Moody National Advisor I, LLC. 10-Q


EXHIBIT 10.3


 


AGREEMENT OF PURCHASE AND SALE


 


THIS AGREEMENT OF PURCHASE
AND SALE (this “Agreement”) is made as of the Effective Date, by and among MOODY NATIONAL RI GRAPEVINE S, LLC,
a Delaware limited liability company (“Fee Owner”), MOODY NATIONAL RI GRAPEVINE MT, LLC, a Delaware limited
liability company (“Moody MT”), MOODY NATIONAL MANAGEMENT, LP, a Texas limited partnership (“Interest
Owner”, Fee Owner, Moody MT and Interest Owner collectively referred to herein as “Seller”), and
MOODY NATIONAL REIT I, INC., a Maryland corporation (the “Purchaser”).


 


RECITALS:


 


A.        Fee Owner is the
owner of that certain tract of land more particularly described on Exhibit “A” attached hereto and made a
part hereof, located at 2020 State Highway 26, Grapevine, Texas 76051, together with all rights, titles, benefits, easements, privileges,
remainders, tenements, hereditaments, interests, reversions and appurtenances thereunto belonging or in any way appertaining, and
all of the estate, right, title, interest, claim or demand whatsoever of Fee Owner therein, including in and to adjacent strips
and gores, if any, between the Land and abutting properties, and in and to adjacent streets, highways, roads, alleys or rights-of-way,
and the beds thereof, either at law or in equity, in possession or expectancy, now or hereafter acquired, all water and mineral
rights, development rights and all easements, rights and other interests appurtenant thereto, (the “Land”), and
all buildings and improvements, including a hotel known as the Residence Inn – Grapevine, Texas, located on the Land (the
“Improvements”). The Land and the Improvements, together with the Personal Property are sometimes referred to
hereinafter together as the “Hotel”.


 


B.         Moody MT leases the
Hotel from the Fee Owner in accordance with the terms of that certain Master Lease by and between Moody MT and Fee Owner dated
on or around January 24, 2007 (the “Master Lease”) and is the owner of all Personal Property used in connection
with the operation of the Hotel.


 


C.         Interest Owner is
the owner of all of the limited liability company membership interest of Moody MT (“Membership Interest”).


 


C.         Purchaser desires
to purchase the above described property, including the Hotel and the Membership Interest, from Seller, and Seller desires to sell
the above described property to Purchaser, for the Purchase Price (as defined below) and upon the terms and conditions hereinafter
set forth.


 


NOW, THEREFORE, in
consideration of premises and in consideration of the mutual covenants, promises and undertakings of the parties hereinafter set
forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties,
it is agreed:


 





ARTICLE I

DEFINITIONS


 


The following terms shall
have the indicated meanings:



 






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1.1        “Affiliate”
shall mean any Person that is directly or indirectly (through one or more intermediaries) controlled by, under common control with,
or controlling another Person. For the purposes of this definition, “control” shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management and policies of any Person or the power to veto
major policy decisions of any Person, whether through the ownership of voting securities, by contract or otherwise.


 


1.2        “Agreement”
shall have the meaning ascribed to such term in the Preamble.


 


1.3        “Assignment
and Assumption Agreement” shall mean an assignment and assumption agreement between Moody MT and Purchaser in a form mutually
acceptable to the parties, whereby Moody MT assigns and Purchaser assumes all of the Moody MT’s rights, title and interest in and
to the Hotel Agreements, related to the applicable Property.


 


1.4        “Assignment
of Membership Interest” shall mean an assignment between Interest Owner and Purchaser in a form mutually acceptable to
the parties, conveying 100% of the Membership Interest from Interest Owner to Purchaser.


 


1.5        “Authorizations”
shall mean all certificates of occupancy, licenses, permits, authorizations and approvals required by any governmental or quasi-governmental
agency, body, department, commission, board, bureau, instrumentality or officer, or otherwise appropriate with respect to the construction,
ownership, operation, leasing, maintenance, or use of the Property or any part thereof.


 


1.6        “Bill of
Sale and General Assignment” shall mean a bill of sale and general assignment between the Moody MT and Purchaser in a
form mutually acceptable to the parties, conveying title to the Personal Property (other than Leased Property) from Moody MT to
Purchaser, together with any Warranties and Guaranties related thereto.


 


1.7        “Closing”
shall mean the consummation of the sale and purchase of the Property pursuant to this Agreement.


 


1.8        “Closing
Date” shall mean Friday, March 28, 2014.


 


1.9        “Closing
Documents” shall mean the documents defined as such in Article VI.


 


1.10      “Code”
shall have the meaning ascribed to such term in Section 8.21.


 


1.11      “Deed”
shall mean a special warranty deed in a form mutually acceptable to the parties, conveying fee title to the Real Property from
the Fee Owner to Purchaser, subject to all permitted title exceptions and the Master Lease.


 


1.12      “Earnest
Money” shall have the meaning ascribed to such term in Section 2.3.


 


1.13      “Effective
Date” (or other similar phrases such as “date of this Agreement” or “date hereof”) shall
mean the first date on which the Escrow Agent shall have acknowledged receipt of this Agreement fully executed by Seller and Purchaser.


 


1.14      “Escrow
Agent” shall mean the Title Company.


 


1.15      “FIRPTA
Certificate” shall mean the affidavit of Fee Owner under Section 1445 of the Internal Revenue Code, as amended.


 






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1.16      “Governmental
Authority” shall mean any federal, state, county, municipal or other government or governmental or quasi-governmental
agency, department, commission, board, bureau, office or instrumentality, foreign or domestic, or any of the them.


 


1.17      “Hotel”
shall have the definition ascribed to such term in the Recitals.


 


1.18      “Hotel
Agreements” shall mean collectively the Operating Agreements, Leased Property Agreements, Off-Site Facility Agreements
and the Occupancy Agreements.


 


1.19      “Improvements”
shall mean the Hotel and all other buildings, structures, improvements, and all fixtures, systems, facilities and all other items
of real estate located on the Land.


 


1.20      “Independent
Contract Consideration” shall mean One Hundred and No/100 Dollars ($100.00) of the Earnest Money which shall be paid by
the Escrow Agent to Seller in the event that Purchaser elects to terminate this Agreement.


 


1.21      “Insurance
Policies” shall mean all policies of insurance maintained by or on behalf of Seller pertaining to the Property, its operation,
or any part thereof.


 


1.22      “Intangible
Personal Property” shall mean, to the extent assignable, Seller’s right, title and interest in and to all intangible personal
property owned or possessed by Seller and used in connection with the ownership or operation of the Property, including, without
limitation, (1) Authorizations, (2) utility and development rights and privileges, general intangibles, business records,
plans and specifications pertaining to the Real Property and the Personal Property, and (3) any unpaid award for taking by
condemnation or any damage to the Land by reason of a change of grade or location of or access to any street or highway.


 


1.23      “Inventory”
shall mean all inventories of food, beverage and consumable items in opened or unopened cases and all in-use reserve stock of linens,
towels, paper goods, soaps, cleaning supplies, office supplies, engineering supplies, maintenance supplies, parts and tools and
other “inventories of merchandise” and “inventories of supplies” as such terms are defined in the Uniform System
of Accounts for Hotels used in connection with the operation and maintenance of the Hotel.


 


1.24      “Knowledge”
with respect to any Seller shall mean to the actual knowledge of Brett C. Moody, without any duty of inquiry or investigation.


 


1.25      “Land”
shall mean that certain parcel of real estate described on Exhibit A, together with all rights, titles, benefits, easements,
privileges, remainders, tenements, hereditaments, interests, reversions and appurtenances thereunto belonging or in any way appertaining,
and all of the estate, right, title, interest, claim or demand whatsoever of Seller therein, in and to adjacent strips and gores,
if any, between the Land and abutting properties, and in and to adjacent streets, highways, roads, alleys or rights-of-way, and
the beds thereof, either at law or in equity, in possession or expectancy, now or hereafter acquired.


 


1.26      “Leased
Property” shall mean all leased items of Tangible Personal Property, including items subject to any capital lease, operating
lease, financing lease, or any similar agreement (if any).


 


1.27      “Leased
Property Agreements” shall mean all lease agreements pertaining to the Leased Property (if any).


 






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1.28      “License
Agreement” shall mean that certain Relicensing Franchise Agreement between Licensor and Moody MT with respect to the Hotel,
as amended, restated or modified.


 


1.29      “Licensor”
shall mean Marriott International, Inc.


 


1.30      “Management
Agreement” shall mean that certain Hotel Management Agreement between Moody MT and the Manager for the management or operation
of the Hotel, as amended, restated or modified.


 


1.31      “Manager”
shall mean Moody National Hospitality Management, LLC.


 


1.32      “Master
Lease” shall have the definition ascribed to such term in the Recitals.


 


1.33      “Membership
Interest” shall have the definition ascribed to such term in the Recitals.


 


1.34      “Occupancy
Agreements” shall mean all leases, concession or occupancy agreements in effect with respect to the Real Property under
which any tenants (other than Hotel guests) or concessionaires have the right to occupy space upon the Real Property.


 


1.35      “Off-Site
Facility Agreements” shall mean any leases, contracts and agreements, if any, pertaining to facilities not located on
the Property but which are required and presently used for the operation of the Hotel including, without limitation, use agreements
for local golf courses, and parking or garage contracts or leases.


 


1.36      “Operating
Agreements” shall mean all service, supply, maintenance and repair, and other similar contracts in effect with respect
to the Property including the Management Agreement (other than the Occupancy Agreements, Leased Property Agreements, Management
Agreement, and Off-Site Facility Agreements) related to construction, operation, or maintenance of the Property and the business
conducted thereon.


 


1.37      “Owner’s
Title Policy” shall mean an owner’s policy of title insurance issued to Purchaser by the Title Company, pursuant to which
the Title Company (or any applicable underwriter) insures Purchaser’s ownership of fee simple title to the Real Property.


 


1.38      “Person”
shall mean an individual, a partnership, a limited liability company, a corporation, an association, a joint stock company, a trust,
a joint venture, an unincorporated organization, or a Governmental Authority.


 


1.39      “Personal
Property” shall mean collectively the Tangible Personal Property and the Intangible Personal Property.


 


1.40      “Property”
shall mean collectively the Real Property, Personal Property and Membership Interest.


 


1.41      “Purchase
Price” shall mean the amount of TWENTY MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($20,500,000.00).


 


1.42      “Purchaser
Parties” shall mean Purchaser’s directors, officers, lenders, employees, agents, counsel, consultants or representatives.


 


1.43      “Real Property”
shall mean the Land and the Improvements.


 






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1.44      “Study
Period” shall mean the period ending at 5:00 p.m. on Monday, March 24, 2014.


 


1.45      “Submission
Matters” shall mean all due diligence deliverables provided by Seller to Purchaser.


 


1.46      “Tangible
Personal Property” shall mean the items of tangible personal property consisting of all furniture, fixtures, equipment,
machinery, Inventory, all vehicles used in operation of Property and the Hotel and other tangible personal property of every kind
and nature (which does not include cash-on-hand and petty cash) located at the Hotel and owned or leased by the Moody MT, including,
without limitation, the Moody MT’s interest as lessee with respect to any such leased Tangible Personal Property.


 


1.47      “Title
Company” shall mean Moody National Title Company, L.P., 6363 Woodway, Suite 250, Houston, Texas 77057, or other title
insurance underwriter selected by Purchaser and reasonably acceptable to Seller.


 


1.48      “Warranties
and Guaranties” shall mean, to the extent assignable, all of Seller’s interest in any existing warranties and guaranties
relating to the development, construction, ownership and operation of the Improvements, the Tangible Personal Property, the Hotel
or any part thereof.


 


ARTICLE II

PURCHASE AND SALE; DEPOSIT; PAYMENT OF

PURCHASE PRICE; STUDY PERIOD


 


2.1        Purchase and
Sale. Seller agrees to sell the Property, and Purchaser agrees to purchase the Property, free and clear of all liens and encumbrances,
for the Purchase Price and in accordance with and subject to the other terms and conditions set forth herein.


 


2.2        Payment of Purchase
Price. Purchaser shall pay the Purchase Price, as adjusted in the manner specified in Article VI and as set forth below, to
Seller (or other party designated by Seller) at Closing by making a wire transfer of immediately available federal funds to the
account of Seller (or other party designated by Seller). Such wire transfer shall be sent by Purchaser to the Escrow Agent for
the account of Seller on the Closing Date. The Purchase Price shall be allocated as follows: Real Property - $20,350,000.00; Personal
Property - $100,000.00; and Membership Interest - $50,000.00.


 


2.3        Earnest Money.
Within one (1) business day following the Effective Date, Purchaser will deliver to the Escrow Agent the sum of ONE HUNDRED THOUSAND
AND NO/100 DOLLARS ($100,000.00) (the “Earnest Money”). The Earnest Money shall be invested by the Escrow
Agent in short term interest bearing accounts at banks or other financial institutions, which accounts must be insured by the Federal
Deposit Insurance Corporation. All interest earned on such deposits shall belong to the party (as between Seller and Purchaser)
who is entitled to receive the Earnest Money under the applicable provisions of this Agreement. In the event the transactions contemplated
herein are not closed in accordance with the provisions hereof, the Earnest Money shall be disbursed to either Seller or Purchaser
as provided in this Agreement.


 






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2.4        Due Diligence.


 


(a)         Purchaser shall have
the right, until 5:00 p.m. the last day of the Study Period, and thereafter if Purchaser does not notify Seller in writing prior
to the expiration of the Study Period that Purchaser has elected to terminate this Agreement, to enter upon the Real Property upon
not less than one (1) business day prior notice to Seller, and to perform at Purchaser’s expense, and subject to terms and conditions
set forth in Section 2.5(c) below, such economic, surveying, engineering, topographic, environmental, marketing and other test,
studies and investigations as Purchaser may deem appropriate. If such tests, studies and investigations warrant, in Purchaser’s
sole, absolute and unreviewable discretion, the purchase of the Property for the purposes contemplated by Purchaser, then Purchaser
shall proceed with this transaction in accordance with and subject to the terms of this Agreement; provided, however, if, prior
to the expiration of the Study Period, Purchaser provides written notice to Seller and Escrow Agent that it has determined in its
sole, absolute and unreviewable discretion, to terminate this Agreement, this Agreement shall automatically terminate, and Seller
and Purchaser shall be released from all further liability or obligation hereunder except those which expressly survive a termination
of this Agreement. In the event of such termination, the Earnest Money, less the Independent Contract Consideration, shall be refunded
by the Escrow Agent to Purchaser without any further notice to Escrow Agent.


 


(b)         Seller hereby agrees
and acknowledge that Moody MT may make available to Purchaser any and all due diligence information related to the Property.


 


(c)         Purchaser shall indemnify,
hold harmless and defend Seller against any loss, damage, liability or claim for personal injury or property damage and any other
loss, damage, liability, claim or lien to the extent arising from the acts upon the Real Property by Purchaser or Purchaser Parties
or any agents, contractors or employees of Purchaser or Purchaser Parties, except for the discovery of existing conditions of the
Real Property the condition of which are not exacerbated by the Purchaser. Purchaser understands and accepts that any on-site inspections
of the Property shall occur at reasonable times agreed upon by Seller and Purchaser after not less than one (1) business day prior
notice to Seller and shall be conducted so as not to interfere unreasonably with the operation of the Property and the use of the
Property by the tenants and the guests of the Hotel. Seller shall have the right to have a representative present during any such
inspections. If Purchaser desires to do any invasive testing at the Property, Purchaser shall do so only after obtaining the prior
written consent of Seller, which approval may be subject to reasonable terms and conditions as may be proposed by Seller. Purchaser
shall not permit any liens to attach to the Property by reason of such inspections. Purchaser shall (i) restore the Property,
at its own expense, to substantially the same condition which existed prior to any inspections or other activities of Purchaser
thereon; and (ii) be responsible for and pay any and all liens by contractors, subcontractors, materialmen, or laborers performing
the inspections or any work for Purchaser or Purchaser Parties on or related to the Property. The provisions of this Section 2.4(c)
shall survive any termination of this Agreement and a closing of the transaction contemplated hereby and are not subject to any
liquidated damage limitation on remedies, notwithstanding anything to the contrary in this Agreement.


 


(d)         Promptly following
the Effective Date, Seller shall cause the Title Company to furnish to Purchaser, a title insurance commitment bearing an effective
date not earlier than thirty (30) days prior to the Effective Date issued by the Title Company covering the Real Property, binding
the Title Company to issue the Owner’s Title Policy together with legible copies (to the extent such legible copies are available)
of all documents identified in such title insurance commitment as exceptions to title (collectively, the “Title Commitment”)
with respect to the state of title to the Property.


 






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(e)         At Purchaser’s
sole cost and expense, Purchaser’s auditor may conduct an audit as required of Purchaser pursuant to Rule 3-05 of Securities and
Exchange Commission Regulation S-X (the “3-05 Audit”) of the financial statements of the Property for the three
(3) complete fiscal years immediately preceding the Closing Date and the stub period through the Closing Date (the “Covered
Audit Period”), and Seller shall reasonably cooperate (at no cost to Seller) with Purchaser’s auditor in the conduct of
such 3-05 Audit. Without limiting the foregoing, (i) Purchaser or its designated independent or other auditor may audit the financial
statements of the Property, at Purchaser’s expense and, upon Purchaser’s prior written request, Seller shall allow Purchaser’s
auditors reasonable access to such books and records maintained by Seller in respect to the Property and pertaining to the Covered
Audit Period as necessary to conduct such 3-05 Audit, and (ii) Seller shall use reasonable efforts to provide to Purchaser such
existing financial information as may be reasonably required by Purchaser and required for Purchaser’s auditors to conduct such
3-05 Audit; provided, however, that the ongoing obligations of Seller shall be limited to providing such information or documentation
as may be in the possession or control of Seller, Seller’s accountants or Manager, at no cost to any of such parties, and in the
format that Seller or its accountants or Manager have maintained such information. Seller certifies and represents and warrants
to Purchaser that the materials delivered to Purchaser in connection with the 3-05 Audit shall be true and accurate in all material
respects and to Seller’s knowledge there are no known fraud or material misrepresentations, or material subsequent events not reflected
in such materials. Notwithstanding anything contained in this paragraph to the contrary, in no event shall Seller or any of Seller’s
Affiliates be obligated to disclose any confidential or non-public financial information with respect to any of Seller’s Affiliates
or any property of any such Seller’s Affiliate. Seller shall also provide to Purchaser’s representative a signed representation
letter in form and substance reasonably acceptable to Seller sufficient to enable an independent public accountant to render an
opinion on the financial statements related to the Property. Seller shall maintain its records for use under this Section for a
period of not less than one (1) year after the Closing Date. The provisions of this Section shall survive Closing or termination
of this Agreement.


 


ARTICLE III

SELLERS’ REPRESENTATIONS AND WARRANTIES


 


3.1        Fee Owner Representations
and Warranties. In order to induce Purchaser to enter into this Agreement and to purchase the Property, and to pay the Purchase
Price therefore and except for and subject to the information contained in the Submission Matters, Fee Owner hereby makes the representations
and warranties set forth below. Each such representation shall be materially true and correct on the Effective Date and shall be
materially true and correct on the Closing Date.


 


(a)         Organization
and Power. Fee Owner is a limited liability company duly organized, validly existing and in good standing under the laws of
Delaware and has all requisite power and authority to enter into and perform its obligations hereunder and under any document or
instrument required to be executed and delivered on behalf of Fee Owner hereunder.


 


(b)         Authorization
and Execution. This Agreement (and all documents contemplated hereby) has been duly authorized by all necessary action on the
part of Fee Owner, has been duly executed and delivered by Fee Owner, constitutes the valid and binding agreement of Fee Owner
and is enforceable against Fee Owner in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency,
moratorium or other similar laws affecting creditors’ rights generally or by the principles governing the availability of equitable
remedies. The Person executing this Agreement on behalf of Fee Owner, for and on behalf of Fee Owner, has the authority to do so.


 


(c)         Litigation.
There is no action, suit or proceeding, pending or, to Fee Owner’s Knowledge, known to be threatened, against or affecting any
Fee Owner in any court or before any arbitrator or before any Governmental Authority which would materially and adversely affect
the ability of Fee Owner to perform its obligations hereunder, or under any document to be delivered pursuant hereto.


 






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(d)         Fee Owner Is
Not a “Foreign Person”. Fee Owner is not a “foreign person” or a “disregarded entity” within
the meaning of Section 1445 of the Internal Revenue Code, as amended (i.e., Seller is not a foreign corporation, foreign partnership,
foreign trust, foreign estate or foreign person as those terms are defined in the Internal Revenue code and regulations promulgated
thereunder).


 


(e)         Insurance.
All insurance policies held with respect to the Property by Fee Owner are valid and in full force and effect.


 


(f)         Right to Purchase.
Fee Owner has not granted to any Person other than Purchaser, any right to purchase the Property or any portion thereof or interest
therein.


 


(g)         Condemnation.
There are no any pending or, to Fee Owner’s Knowledge, threatened condemnation or similar proceedings affecting the Property.


 


3.2        Moody MT Representations
and Warranties. In order to induce Purchaser to enter into this Agreement and to purchase the Property, and to pay the Purchase
Price therefore and except for and subject to the information contained in the Submission Matters, Moody MT hereby makes the representations
and warranties set forth below. Each such representation shall be materially true and correct on the Effective Date and shall be
materially true and correct on the Closing Date.


 





(a)         Organization
and Power. Moody MT is a limited liability company duly organized, validly existing and in good standing under the laws of
Delaware and has all requisite power and authority to enter into and perform its obligations hereunder and under any document or
instrument required to be executed and delivered on behalf of Moody MT hereunder.


 


(b)         Authorization
and Execution. This Agreement (and all documents contemplated hereby) has been duly authorized by all necessary action on the
part of Moody MT, has been duly executed and delivered by Moody MT, constitutes the valid and binding agreement of Moody MT and
is enforceable against Moody MT in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency,
moratorium or other similar laws affecting creditors’ rights generally or by the principles governing the availability of equitable
remedies. The Person executing this Agreement on behalf of Moody MT, for and on behalf of Moody MT, has the authority to do so.


 


(c)         Litigation.
There is no action, suit or proceeding, pending or, to Moody MT’s Knowledge, known to be threatened, against or affecting Moody
MT in any court or before any arbitrator or before any Governmental Authority which would materially and adversely affect the ability
of Moody MT to perform its obligations hereunder, or under any document to be delivered pursuant hereto.


 


(d)         Moody MT Is
Not a “Foreign Person”. Moody MT is not a “foreign person” or a “disregarded entity” within the
meaning of Section 1445 of the Internal Revenue Code, as amended (i.e., Seller is not a foreign corporation, foreign partnership,
foreign trust, foreign estate or foreign person as those terms are defined in the Internal Revenue code and regulations promulgated
thereunder).


 


3.3        Interest Owner
Representations and Warranties. In order to induce Purchaser to enter into this Agreement and to purchase the Property, and
to pay the Purchase Price therefore and except for and subject to the information contained in the Submission Matters, Interest
Owner hereby makes the representations and warranties set forth below. Each such representation shall be materially true and correct
on the Effective Date and shall be materially true and correct on the Closing Date.


 






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(a)         Organization
and Power. Interest Owner is a limited liability company duly organized, validly existing and in good standing under the laws
of Delaware and has all requisite power and authority to enter into and perform its obligations hereunder and under any document
or instrument required to be executed and delivered on behalf of Interest Owner hereunder.


 


(b)         Authorization
and Execution. This Agreement (and all documents contemplated hereby) has been duly authorized by all necessary action on the
part of Interest Owner, has been duly executed and delivered by Interest Owner, constitutes the valid and binding agreement of
Interest Owner and is enforceable against Interest Owner in accordance with its terms, except as such enforcement may be limited
by bankruptcy, insolvency, moratorium or other similar laws affecting creditors’ rights generally or by the principles governing
the availability of equitable remedies. The Person executing this Agreement on behalf of Interest Owner, for and on behalf of Interest
Owner, has the authority to do.


 


(c)         Ownership.
Interest Owner owns 100% of the Membership Interest and has the full and unrestricted power to sell, assign, transfer and deliver
the Membership Interest to Purchaser upon the terms and subject to the conditions of this Agreement, free and clear of any encumbrances.


 


(d)         Litigation.
There is no action, suit or proceeding, pending or, to Interest Owner’s Knowledge, known to be threatened, against or affecting
Interest Owner in any court or before any arbitrator or before any Governmental Authority which would materially and adversely
affect the ability of Interest Owner to perform its obligations hereunder, or under any document to be delivered pursuant hereto.


 


The representations and
warranties in this Article III shall survive the Closing for a period of one (1) year following the Closing Date (“Survival
Period”).


 


ARTICLE IV

PURCHASER’S REPRESENTATIONS AND WARRANTIES


 


In order to induce Seller
to enter into this Agreement and to sell the Property, Purchaser hereby makes the following representations and warranties, each
of which is made to Purchaser’s knowledge:


 


4.1         Organization
and Power. Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the State of
Maryland and has all requisite power and authority to enter into and perform its obligations under this Agreement and any document
or instrument required to be executed and delivered on behalf of Purchaser hereunder.


 


4.2         Authorization
and Execution. This Agreement has been duly authorized by all necessary action on the part of Purchaser, has been duly executed
and delivered by Purchaser, constitutes the valid and binding agreement of Purchaser and is enforceable against Purchaser in accordance
with its terms, except as such enforcement may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting
creditors’ rights generally or by the principles governing the availability of equitable remedies. The Person executing this Agreement
on behalf of Purchaser has the authority to do so.


 


4.3         Non-contravention.
The execution and delivery of this Agreement and the performance by Purchaser of its obligations hereunder do not and will not
contravene, or constitute a default under, any provisions of applicable law or regulation, Purchaser’s organizational documents,
or any agreement, judgment, injunction, order, decree or other instrument binding upon Purchaser or result in the creation of any
lien or other encumbrance on any asset of Purchaser.


 






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4.4         Litigation.
There is no action, suit or proceeding, pending or known to be threatened, against or affecting Purchaser in any court or before
any arbitrator or before any Governmental Authority which would materially and adversely affect the ability of Purchaser to perform
its obligations hereunder, or under any document to be delivered pursuant hereto.


 


4.5         OFAC. Purchaser
represents and warrants to Seller that neither Purchaser nor any affiliate of Purchaser is subject to sanctions of the United States
government or in violation of any federal, state, municipal or local laws, statutes, codes, ordinances, orders, decrees, rules
or regulations relating to terrorism or money laundering, including, without limitation, Executive Order No. 13224, 66 Fed. Reg.
49079 (published September 25, 2001) (the “Terrorism Executive Order”) or is similarly designated under any related
enabling legislation or any other similar Executive Orders (collectively with the Terrorism Executive Order, the “Executive
Orders”), the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism
Act of 2001 (Public Law 107-56, the “Patriot Act”), any sanctions and regulations promulgated under authority
granted by the Trading with the Enemy Act, 50 U.S.C. App. 1-44, as amended from time to time, the International Emergency Economic
Powers Act, 50 U.S.C. §§ 1701-06, as amended from time to time, the Iraqi Sanctions Act, Publ. L. No. 101-513; United
Nations Participation Act, 22 U.S.C. § 287c, as amended from time to time, the International Security and Development Cooperation
Act, 22 U.S.C. § 2349 aa-9, as amended from time to time, The Cuban Democracy Act, 22 U.S.C. §§ 6001-10, as amended
from time to time, The Cuban Liberty and Democratic Solidarity Act, 18 U.S.C. §§ 2332d and 2339b, as amended from time
to time, and The Foreign Narcotics Kingpin Designation Act, Publ. L. No. 106-120, as amended from time to time.


 


4.6         Condition of
the Property. Purchaser acknowledges the following: (i) Purchaser has been been given a reasonable and adequate opportunity
to inspect and investigate the Property and all aspects relating thereto, including all of the physical, environmental and operational
aspects of the Property, either independently or through agents and experts of Purchaser’s choosing, that (ii) Purchaser is a sophisticated
purchaser of Property, and (iii) Purchaser will acquire the Property based upon Purchaser’s own investigation and inspection of
the Property. PURCHASER SPECIFICALLY ACKNOWLEDGES AND AGREES THAT EXCEPT AS EXPRESSLY SET FORTH HEREIN, (i) SELLER IS DISPOSING
OF THE PROPERTY “AS IS, WHERE IS AND WITH ALL FAULTS” AND (ii) NEITHER PURCHASER NOR ANY OTHER PERSON IS RELYING ON ANY
REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, WHETHER ORAL OR WRITTEN, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, FROM
SELLER OR ANY DIRECT OR INDIRECT PARTNER, OFFICER, DIRECTOR, TRUSTEE, MEMBER, EMPLOYEE, AFFILIATE, ATTORNEY, AGENT OR BROKER OF
SELLER, AS TO ANY MATTER CONCERNING THE PROPERTY OR SET FORTH, CONTAINED OR ADDRESSED IN ANY MATERIALS RECEIVED BY PURCHASER OR
ANY OF PURCHASER’S AGENTS(INCLUDING, WITHOUT LIMITATION, THE COMPLETENESS THEREOF).


 


ARTICLE V

CONDITIONS PRECEDENT


 


5.1         As to Purchaser’s
Obligations. Subject to the provisions of Section 8.1, Purchaser’s obligations hereunder are subject to the timely satisfaction
of the following conditions precedent on or before the Closing Date or such earlier date as is set forth below.


 


(a)         Seller’s Deliveries.
Seller shall have delivered to or for the benefit of Purchaser, on or before the Closing Date, all of the documents required of
Seller pursuant to Sections 6.2 and 6.4 hereof.


 






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(b)         Representations,
Warranties and Covenants; Obligations of Seller; Certificate. All of Seller’s representations and warranties made in this Agreement
shall be true and correct in all material respects as of the date hereof and as of the Closing Date as if then made; and Seller
shall have performed in all material respects all of its covenants and other obligations under this Agreement. Further, a duly
authorized officer of Fee Owner and Interest Owner shall have executed at Closing a “bring down certificate” with respect
to its representations and warranties.


 


(c)         Title. Title
Company shall unconditionally be prepared to deliver to Purchaser Owner’s Title Policy (subject to the premiums therefor and delivery
of the documents specified in Section 7.2 below and Purchaser’s authority documents).


 


(d)         License Agreement.
Licensor have delivered a comfort letter, or have delivered some other acknowledgment, authorizing the transfer of the Real Property,
as well as all other transfers contemplated by this Agreement.


 


(e)         Management Agreement.
Moody MT and Manager shall have mutually agreed to the terms of an amended and restated Management Agreement.


 


(f)         Master Lease.
Purchaser and Moody MT shall have mutually agreed to the terms of an amended and restated Master Lease.


 


(g)         Litigation.
There shall be no actions, suits, arbitrations, governmental investigations or other proceedings pending or, threatened against
Seller or affecting the Property before any court or governmental authority, an adverse determination of which might materially
and adversely affect the Property.


 


(h)         REIT Audit.
Purchaser shall have completed the REIT Audit as contemplated under Section 2.4(f).


 


Each of the conditions
contained in this Section are intended for the benefit of Purchaser and may be waived in whole or in part, by Purchaser. If
the conditions precedent set forth above are neither satisfied nor waived by Purchaser by the Closing Date, Purchaser shall have
the right to terminate this Agreement, obtain a refund of the Earnest Money and Seller and Purchaser shall be released from all
further liability or obligation hereunder except those which expressly survive the termination of this Agreement; provided however
that if Seller is in default hereof at the time of such termination, Section 8.1 shall additionally apply.


 


5.2         As to Seller’s
Obligations. Subject to the provisions of Section 8.2, Seller’s obligations hereunder are subject to the satisfaction
of the following conditions precedent:


 


(a)         Purchaser’s Deliveries.
Purchaser shall have delivered to or for the benefit of Seller, on or before the Closing Date, all of the documents and payments
required of the Purchaser pursuant to Sections 6.3 and 6.4 hereof.


 


(b)         Representations,
Warranties and Covenants; Obligations of Purchaser; Certificate. All of Purchaser’s representations and warranties made in
this Agreement shall be true and correct in all material respects as of the date hereof and as of the Closing Date as if then made;
and Purchaser shall have performed in all material respects all of its covenants and other obligations under this Agreement. Further,
a duly authorized officer of Purchaser shall have executed at Closing a “bring down certificate” with respect to the
aforesaid representations and warranties.


 






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Each of the conditions
contained in this Section are intended for the benefit of Seller and may be waived in whole or in part, by Seller. If the
conditions precedent set forth above are neither satisfied nor waived by Seller by the Closing Date, Seller shall have the right
to terminate this Agreement, and Seller and Purchaser shall be released from all further liability or obligation hereunder except
those which expressly survive the termination of this Agreement; provided however that if Purchaser is in default hereof at the
time of such termination, Section 8.2 shall additionally apply.


 


ARTICLE VI

CLOSING


 


6.1         Closing.
The Closing shall occur on the Closing Date. As more particularly described below, at the Closing the parties hereto will (a) execute
or cause to be executed (and acknowledged where appropriate) all of the documents required to be delivered in connection with the
transactions contemplated hereby (the “Closing Documents”), (b) deliver or cause to be delivered the same
to the Escrow Agent, and (c) take or cause to be taken all other action required to be taken in respect of the transactions
contemplated hereby. The Closing will occur through escrow, at the Title Company, or at any such other place as Seller and Purchaser
may mutually agree. At the Closing, Purchaser shall deliver the balance of the Purchase Price to Escrow Agent as provided herein.
As provided herein, the parties hereto will agree upon adjustments and prorations to certain items which cannot be exactly determined
at the Closing and will make the appropriate adjustments with respect thereto. Possession of the Property shall be delivered to
Purchaser at the Closing, subject to any permitted title exceptions, the Master Lease and guests in possession.


 


6.2         Seller’s Deliveries.
At the Closing, Seller shall deliver (or cause to be delivered) to the Escrow Agent all of the following instruments, each of which
shall have been duly executed and, where applicable, acknowledged and/or sworn, on behalf of Seller, and shall be dated to be effective
as of the Closing Date:


 


(a)         The Deed.


 


(b)         The Bill of Sale and
General Assignment.


 


(c)         Assignment of Membership
Interest.


 


(d)         The Assignment and
Assumption Agreement.


 


(e)         A bills paid affidavit
verifying that there are no unpaid bills or claims for labor performed or materials furnished to the Property prior to the Closing,
and by which Seller indemnifies and holds Purchaser and Title Company harmless from any loss, liability, cost or expense of Purchaser
resulting from or incident to claims against the Property.


 


(f)         Certificate(s)/Registration
of Title for any vehicle owned by Seller and used in connection with the Property (if any).


 


(g)        The FIRPTA Certificate.


 


(h)        The “bring-down
certificate” specified in Section 5.1(b).


 


(i)         An owner’s title affidavit
and gap indemnity (to the extent required by the Title Company), each duly executed and acknowledged by Seller.


 






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(j)         Any other document
or instrument specifically required by this Agreement.


 


Seller shall also cause
the Manager to deliver to Purchaser or make available to Purchaser at the Property:


 


(k)         all original Warranties,
Guarantees, and Hotel Agreements to be assigned to and assumed by Purchaser and in Seller’s or the Manager’s possession,


 


6.3         Purchaser’s Deliveries.
At the Closing, Purchaser shall deliver to Escrow Agent the following, duly executed and, where applicable, acknowledged and/or
sworn on behalf of Purchaser, and dated as of the Closing Date:


 


(a)        The Assignment and
Assumption Agreement.


 


(b)        The Bill of Sale and
General Assignment.


 


(c)        Assignment of Membership
Interest.


 


(d)        The “bring-down
certificate” specified in Section 5.2(b).


 


(e)        Any other document
or instrument specifically required by this Agreement.


 


(f)         At the Closing, Purchaser
shall deliver to Escrow Agent the Purchase Price as described in Section 2.2 hereof.


 


6.4         Mutual Deliveries.
At the Closing, Purchaser and Seller shall mutually execute and deliver each to the other:


 


(a)         A closing statement
reflecting the Purchase Price and the adjustments and prorations required hereunder and the allocation of income and expenses required
hereby.


 


(b)         Such other documents,
instruments and undertakings as may be required by the authorities of the State where the Property is located.


 


(c)         Such other and further
documents, papers and instruments as may be reasonably required by the parties hereto or their respective counsel or the Title
Company to consummate the transactions contemplated by this Agreement and which are not inconsistent with the Agreement or the
other Closing Documents.


 


6.5         Closing Costs.


 


(a)         Seller and Purchaser
shall equally divide any escrow fee other expenses or similar charges charged by the Title Company. Seller shall pay for the cost
of the title search, the premium for a standard Owner’s Title Policy. Purchaser shall pay for all endorsements to the Owner’s Title
Policy, the cost of any updated survey and all filing fees. Purchaser shall pay the costs of all inspections or tests undertaken
by Purchaser. Purchaser shall pay all costs associated with financing the acquisition of the Property. Purchaser shall pay all
costs associated with obtain all required approvals from the Licensor and Manager. Unless the payment of any other cost is specifically
provided for in this Agreement, all other costs shall be apportioned between the parties by the Title Company in the manner customary
in the location of the Hotel, for properties of a similar nature. Except as otherwise provided in Section 8.3, each party shall
be responsible for the payment of its own attorney’s fees incurred in connection with transaction which is the subject of this
Agreement.


 






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(b)        All revenues and expenses
with respect to the Property, and applicable to the period of time before and after Closing, determined in accordance with sound
accounting principles consistently applied, shall be allocated between Seller and Purchaser as provided herein. Seller shall be
entitled to all revenue and shall be responsible for all expenses for the period of time up to but not including the Closing Date,
and Purchaser shall be entitled to all revenue and shall be responsible for all expenses for the period of time from, after and
including the Closing Date.


 


(c)        If accurate allocations
cannot be made at Closing because current bills are not obtainable (as, for example, in the case of utility bills and/or real estate
or personal property taxes), the parties shall allocate such revenue or expenses at Closing on the best available information,
subject to adjustment upon receipt of the final bill or other evidence of the applicable revenue or expense. The obligation to
make the adjustment shall survive the closing of the transaction contemplated by this Agreement. Any revenue received or expense
incurred by Seller or by Purchaser with respect to the Property after the Closing Date shall be promptly allocated in the manner
described herein and the parties shall promptly pay or reimburse any amount due. With respect to any closing statements amounts
or issues relating to prorations that are not agreed upon at Closing, Seller and Purchaser shall thereafter work in good faith
to resolve such amounts or issues; provided that if such amounts or issues are not fully agreed upon and paid within ten (10) days
after the Closing, then, in such event, such amounts or issues shall be submitted to an independent certified public accountant
with a hospitality practice reasonably acceptable to Seller and Purchaser for final resolution, and Seller and Purchaser agree
to be bound by the determination of such accountant. The costs and expenses incurred in connection with the services of such accountant
shall be borne equally by Seller and Purchaser. The provisions of this Section 6.5 shall survive the Closing.


 


ARTICLE VII

GENERAL PROVISIONS


 


7.1         Fire or Other
Casualty. Seller agrees to give Purchaser prompt notice of any fire or other casualty to the Property costing more than One
Hundred Thousand Dollars ($100,000.00) to repair and occurring between the Effective Date and the Closing Date of which Seller
has knowledge. If, prior to Closing, the Property is damaged by fire or other casualty which is fully insured (without regard to
deductibles) and would cost less than Five Hundred Thousand Dollars ($500,000.00) and require less than 180 days to repair, then
neither party shall have the right to terminate this Agreement by reason thereof and the Closing shall take place without abatement
of the Purchase Price, but Seller shall assign to Purchaser at the Closing all of Seller’s interest in any insurance proceeds (except
use and occupancy insurance, rent loss and business interruption insurance, and any similar insurance, attributable to the period
preceding the Closing Date) that may be payable to Seller on account of any such fire or other casualty, to the extent such proceeds
have not been previously expended or are otherwise required to reimburse Seller for actual expenditures of restoration made prior
to the Closing Date, plus Seller shall credit the amount of any deductibles under any policies related to such proceeds
to the Purchase Price together with any amount not covered by insurance. If any such damage due to fire or other casualty is insured
and would cost in excess of Five Hundred Thousand Dollars ($500,000.00) or require more than 180 days to repair, then Purchaser
may terminate this Agreement by written notice given to Seller within ten (10) days after Seller has given Purchaser the notice
of damage or casualty referred to in this Section 7.1, or on the Closing Date, whichever is earlier, in which case the parties
hereto shall be released of all further obligations hereunder with respect to the Property except those which expressly survive
a termination of this Agreement. Should Purchaser elect to proceed to Closing notwithstanding the amount of the insured loss or
the time required for repairs, the Closing shall take place without abatement of the Purchase Price and at Closing Seller shall
assign to Purchaser the insurance proceeds and grant to Purchaser a credit against the Purchase Price equal to the amount of the
applicable deductible plus any amount not covered by insurance. If, prior to Closing, any Property is damaged by fire or casualty
which is uninsured and would cost Five Hundred Thousand Dollars ($500,000.00) or more to repair, then Purchaser may terminate this
Agreement by written notice given to Seller within ten (10) days after Seller has given Purchaser the notice of damage or casualty
or on the Closing Date, whichever is earlier, in which case the parties hereto shall be released of all further obligations hereunder,
except those which expressly survive a termination of this Agreement. If Purchaser does not elect to terminate its obligations
under this Agreement pursuant to the immediately preceding sentence, or if any uninsured fire or casualty would cost less than
Five Hundred Thousand Dollars ($500,000.00) to repair, then the Closing shall take place as provided herein, and the Purchase Price
shall be reduced by the estimated amount to repair such casualty, not to exceed Five Hundred Thousand Dollars ($500,000.00).


 






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7.2         Condemnation.
After the Effective Date, Seller agrees to give Purchaser prompt written notice of any knowledge of or notice of any taking by
condemnation of any part of or rights appurtenant to the Real Property. If taking will materially interfere with the operation
or use of any Hotel which constitutes a part of such Real Property, Purchaser may terminate this Agreement by written notice to
Seller within ten (10) days after Seller has given Purchaser the notice of taking referred to in this Section 7.2, or on the
Closing Date, whichever is earlier. If Purchaser exercises its option to terminate its obligations to purchase the Property pursuant
to this Section 7.2, the parties hereto shall be released from all further obligations hereunder with respect to the Property,
except those which expressly survive a termination of the Agreement. If Purchaser does not so elect to terminate this Agreement,
then the Closing shall take place as provided herein, and Seller shall assign to Purchaser at the Closing all of Seller’s interest
in any condemnation award which may be payable to Seller on account of any such condemnation and, at Closing, Seller shall credit
to the amount of the Purchase Price payable by Purchaser the amount, if any, of condemnation proceeds received by Seller between
the Effective Date and Closing less (a) any amounts reasonably expended by Seller in collecting such sums and (b) any
amounts reasonably used by Seller to repair the Property as a result of such condemnation. If, prior to Closing, there shall occur
a taking by condemnation of any part of or rights appurtenant to the Property that does not materially interfere with the operation
or use of the Hotel which constitutes a part of the Property, Purchaser shall not have the right to terminate this Agreement by
reason thereof and the Closing shall take place without abatement of the Purchase Price, but Seller shall assign to Purchaser at
Closing all of Seller’s interest in any condemnation award which may be payable to Seller on account of any such condemnation and,
at Closing, Seller shall credit to the amount of the Purchase Price payable by Purchaser the amount, if any, of condemnation proceeds
received by Seller between the Effective Date and Closing less (a) any amounts reasonably expended by Seller in collecting
such sums and (b) any amounts reasonably used by Seller to repair the Property as a result of such condemnation. Provided
Purchaser has not exercised its right to terminate this Agreement pursuant to Section 7.2, Seller shall notify Purchaser in
advance regarding any proceeding or negotiation with respect to the condemnation and Purchaser shall have a reasonable right, at
its own cost and expense, to appear and participate in any such proceeding or negotiation. For purposes of Sections 7.1 and 7.2
if this Agreement, estimates of costs and time required for restoration or repair shall be made by an architect or engineer, as
appropriate, designated by Seller and reasonably acceptable to Purchaser.


 


7.3         Broker. Seller
and Purchaser each represents and warrants to the other that it has not employed any real estate sales representatives or brokers
regarding the transaction contemplated by this Agreement. Seller shall indemnify, defend and hold Purchaser harmless from any commission
or fee claimed to be owing due to the acts of Seller. Purchaser shall indemnify, defend and hold Seller harmless from any commission
or fee claimed to be owing due to the acts of Purchaser. This Section relates solely to the transaction contemplated by this Agreement
between Seller and Purchaser and shall not create any third party right or obligation in favor of either or any broker. The provisions
of this Section 7.3 shall survive the Closing and any termination of this Agreement.


 






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ARTICLE VIII

DEFAULT; TERMINATION RIGHTS; INDEMNIFICATION


 


8.1         Default by Seller.
If the sale contemplated hereby is not consummated because of a default by Seller in its obligation to sell the Property in accordance
with this Agreement after Purchaser has performed or tendered performance of its obligations in accordance with this Agreement,
then Purchaser, as its sole and exclusive remedy shall elect (a) to terminate this Agreement, in which event the Earnest Money
Deposit shall be returned to Purchaser and all other rights and obligations of Seller and Purchaser hereunder (except those set
forth herein which expressly survive a termination of this Agreement) shall terminate immediately; or (b) to waive such matter
or condition and proceed to Closing, with no reduction in the Purchase Price; or (c) bring an equitable action to enforce the Closing
Obligations by specific performance; provided, with respect to an action for specific performance, (i) Purchaser shall provide
written notice of Purchaser’s intention to enforce the Closing Obligations by specific performance, and (ii) Purchaser’s suit for
specific performance shall be filed against Seller in a court having jurisdiction in the county and state in which the Property
is located, on or before sixty (60) days following the Closing Date, failing which, Purchaser shall be barred from enforcing the
Closing Obligations by specific performance and shall be deemed to have elected to terminate this Agreement as provided herein.


 


8.2         Default by Purchaser.
If the sale contemplated hereby is not consummated because of a default by Purchaser in its obligation to purchase the Property
in accordance with this Agreement after Seller has performed or tendered performance of all of its obligations in accordance with
this Agreement, Seller, as its sole and exclusive remedy, shall be permitted to terminate this Agreement in which event the parties
hereto shall be released from all further obligations hereunder except those which expressly survive a termination of this Agreement.
In the event of such termination, Seller shall be entitled to receive the Earnest Money from the Escrow Agent as liquidated damages
and not as penalty, in full satisfaction of its claims against Purchaser hereunder. SELLER AND PURCHASER AGREE THAT SELLER’S DAMAGES
RESULTING FROM PURCHASER’S DEFAULT ARE DIFFICULT, IF NOT IMPOSSIBLE, TO DETERMINE AND THE EARNEST MONEY IS A FAIR ESTIMATE OF THOSE
DAMAGES WHICH HAS BEEN AGREED TO IN AN EFFORT TO CAUSE THE AMOUNT OF SAID DAMAGES TO BE CERTAIN. 


 


8.3         Costs and Attorneys’
Fees. In the event of any litigation or dispute between the parties arising out of or in any way connected with this Agreement,
resulting in any litigation, then the prevailing party in such shall be entitled to recover its costs of prosecuting and/or defending
same, including, without limitation, reasonable attorneys’ fees at trial and all appellate levels. The provisions of this Section 8.3
shall survive the termination of this Agreement.


 


8.4         Limitation of
Liability. Notwithstanding anything herein to the contrary, the liability of each party hereto resulting from the breach or
default by such party shall be limited to direct actual damages incurred by the injured party and each party hereto hereby waives
its rights to recover from the other party consequential, punitive, exemplary, and speculative damages. The provisions of this
Section 8.4 shall survive the termination of this Agreement.


 






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8.5         Indemnification
by Purchaser. As of the Closing Date, Purchaser shall indemnify, defend and hold Seller harmless from any and all claims resulting
from the following: (a) the breach by Purchaser of any representation, warranty, covenant or obligation contained in
this Agreement and (or) in any other agreement, document, exhibit or instrument executed and delivered hereunder; and (b) the operation,
management and (or) use of the Property by Purchaser on and after the Closing Date.


 


8.6         Indemnification
by Seller. As of the Closing Date, Fee Owner and Interest Owner (but specifically excluding Moody MT) shall indemnify, defend
and hold Purchaser harmless from any and all claims resulting from the following: (a) the breach by Seller of any representation,
warranty, covenant or obligation contained in this Agreement and (or) in any other agreement, document, exhibit or instrument executed
and delivered hereunder; and (b) the operation, management and (or) use of the Property by Seller before the Closing Date. Notwithstanding
anything in this Agreement to the contrary, the maximum aggregate liability of Seller, and the maximum aggregate amount which may
be awarded to and collected by Purchaser shall under no circumstances whatsoever exceed One Million and No/Dollars ($1,000,000.00)
(“Liability Cap”); and no claim by Purchaser may be made, and Seller shall not be liable for any judgment in any action
based upon any such claim, unless and until such claim, either alone or together with any other claims by Purchaser for indemnification
is for an aggregate amount in excess of Twenty-Five Thousand and No/Dollars ($25,000.00) (“Floor Amount”), in which event
Seller’s liability respecting any final judgment concerning such claim or claims shall be for the entire amount thereof, subject
to the Liability Cap; provided, however, that if any such final judgment is for an amount that is less than or equal to the Floor
Amount, then Seller shall have no liability with respect thereto.


 


ARTICLE IX

MISCELLANEOUS PROVISIONS


 


9.1         Completeness;
Modification. This Agreement constitutes the entire agreement between the parties hereto with respect to the transactions contemplated
hereby and supersedes all prior discussions, understandings, agreements and negotiations between the parties hereto. This Agreement
may be modified only by a written instrument duly executed by the parties hereto.


 


9.2         Successors and
Assigns. This Agreement shall bind and inure to the benefit of the parties hereto and their permitted respective successors
and assigns.


 


9.3         Days. If
any action is required to be performed, or if any notice, consent or other communication is given, on a day that is a Saturday
or Sunday or a legal holiday in the jurisdiction in which the action is required to be performed or in which is located the intended
recipient of such notice, consent or other communication, such performance shall be deemed to be required, and such notice, consent
or other communication shall be deemed to be given, on the first business day following such Saturday, Sunday or legal holiday.
Unless otherwise specified herein, all references herein to a “day” or “days” shall refer to calendar days
and not business days.


 


9.4         Governing Law.
This Agreement and all documents referred to herein shall be governed by and construed and interpreted in accordance with the laws
of the state in which the Property is located without regard to its principle of conflicts of law.


 


9.5         Counterparts.
To facilitate execution, this Agreement may be executed in as many counterparts as may be required. It shall not be necessary that
the signature on behalf of both parties hereto appear on each counterpart hereof. All counterparts hereto shall collectively constitute
a single agreement. Telecopied signatures shall have the same valid and binding effect as original signatures.


 






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9.6         Severability.
If any term, covenant or condition of this Agreement, or the application thereof to any person or circumstance, shall to any extent
be invalid or unenforceable, the remainder of this Agreement, or the application of such term, covenant or condition to other persons
or circumstances, shall not be affected thereby, and each term, covenant or condition of this Agreement shall be valid and enforceable
to the fullest extent permitted by law.


 


9.7         Costs. Regardless
of whether Closing occurs hereunder, and except as otherwise expressly provided herein, each party hereto shall be responsible
for its own costs in connection with this Agreement and the transactions contemplated hereby, including, without limitation, fees
of attorneys, engineers and accountants.


 


9.8         Notices.
All notices, requests, demands and other communications hereunder shall be in writing and shall be delivered by hand, sent prepaid
for next-day delivery by Federal Express (or a comparable overnight delivery service) or sent by the United States mail, certified,
postage prepaid, return receipt requested, at the addresses and with such copies as designated below. Any notice, request, demand
or other communication delivered or sent in the manner aforesaid may be given by the party required to give such notice, etc.,
or its attorney, and shall be deemed given or made (as the case may be) when actually delivered to or refused by the intended recipient.


 





	If to Seller:	 	Moody National RI Grapevine S, LLC
	 	 	6363 Woodway, Suite 110
	 	 	Houston, Texas 77057
	 	 	Attn: Brett Moody
	 	 	Telephone: (713) 977-7500
	 	 	Facsimile: (713) 977-7505
	 	 	bmoody@moodynational.com
	 	 	 
	If to Purchaser:	 	Moody National REIT I, Inc.
	 	 	6363 Woodway, Suite 110
	 	 	Houston, Texas 77057
	 	 	Attn: Mary Smith
	 	 	Telephone: (713) 977-7500
	 	 	Facsimile: (713) 977-7505
	 	 	msmith@moodynational.com
	 	 	 
	If to Escrow Agent:	 	Moody National Title Company, L. P.
	 	 	6363 Woodway, Suite 250
	 	 	Houston, Texas  77057
	 	 	Telephone:  (713)977-1700 (Main)
	 	 	(713)273-6680 (Direct)
	 	 	Facsimile:  (713)977-0117(Fax)







 


or to such other address as the intended recipient
may have specified in a notice to the other party. Any party hereto may change its address or designate different or other persons
or entities to receive copies by notifying the other party and Escrow Agent in a manner described in this Section.


 






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9.9         Escrow Agent.
Escrow Agent has agreed to act as such for the convenience of the parties without fee or other charges for such services as Escrow
Agent. Escrow Agent shall not be liable: (a) to any of the parties for any act or omission to act except for its own willful
misconduct; (b) for any legal effect, insufficiency, or undesirability or any instrument deposited with or delivered by Escrow
Agent or exchanged by the parties hereunder, whether or not Escrow Agent prepared such instrument; (c) for any loss or impairment
of funds that have been deposited in escrow while those funds are in the course of collection, or while those funds are on deposit
in a financial institution, if such loss or impairment results from the failure, insolvency or suspension of a financial institution;
(d) for the expiration of any time limit or other consequences of delay, unless a properly executed written instruction, accepted
by Escrow Agent, has instructed Escrow Agent to comply with said time limit; (e) for the default, error, action or omission
of either party to the escrow. Escrow Agent, in its capacity as escrow agent, shall be entitled to rely on any document or paper
received by it, believed by such Escrow Agent, in good faith, to be bona fide and genuine. In the event of any dispute as to the
disposition of any monies held in escrow, or of any documents held in escrow, Escrow Agent may, if such Escrow Agent so elects,
interplead the matter by filing an interpleader action in a court of competent jurisdiction in the county or circuit where the
Real Property is located (to the jurisdiction of which both parties do hereby consent), and pay into the registry of the court
such monies held by Escrow Agent, or deposit any such documents with respect to which there is a dispute in the registry of such
court, whereupon such Escrow Agent shall be relieved and released from any further liability as Escrow Agent hereunder. Escrow
Agent shall not be liable for Escrow Agent’s compliance with any legal process, subpoena, writ, order, judgment and decree of any
court, whether issued with or without jurisdiction, and whether or not subsequently vacated, modified, set aside or reversed.


 


9.10       Incorporation
by Reference. All of the exhibits and schedules attached hereto are by this reference incorporated and made a part hereof.


 


9.11       Further Assurances.
Seller and Purchaser each covenant and agree to sign, execute and deliver, or cause to be signed, executed and delivered, and to
do or make, or cause to be done or made, upon the written request of the other party, any and all agreements, instruments, papers,
deeds, acts or things, supplemental, confirmatory or otherwise, as may be reasonably required by either party hereto for the purpose
of or in connection with consummating the transactions described herein provided that compliance with the provision of this Section shall
not increase the liability of the complying party.


 


9.12       No Partnership.
This Agreement does not and shall not be construed to create a partnership, joint venture or any other relationship between the
parties hereto except the relationship of seller and purchaser specifically established hereby.


 


9.13       Time of Essence.
Time is of the essence with respect to every provision hereof.


 


9.14       Signatory Exculpation.
The signatory(ies) for Seller and Purchaser is/are executing this Agreement in his/their capacity as representative of such party
and not individually and, therefore, shall have no personal or individual liability of any kind in connection with this Agreement
and the transactions contemplated by it.


 


9.15       Rules of Construction.
The following rules shall apply to the construction and interpretation of this Agreement:


 


(a)         Singular words shall
connote the plural number as well as the singular and vice versa, and the masculine shall include the feminine and the neuter.


 


(b)        All references herein
to particular articles, sections, subsections, clauses or exhibits are references to articles, sections, subsections, clauses or
exhibits of this Agreement.


 






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(c)        The headings contained
herein are solely for convenience of reference and shall not constitute a part of this Agreement nor shall they affect its meaning,
construction or effect.


 


(d)        Each party hereto
and its counsel have reviewed and revised (or requested revisions of) this Agreement and have participated in the preparation of
this Agreement, and therefore any usual rules of construction requiring that ambiguities are to be resolved against a particular
party shall not be applicable in the construction and interpretation of this Agreement or any exhibits hereto.


 


9.16       No Recording.
Neither this Agreement nor any memorandum hereof, or any other instrument intended to give notice hereof (or which actually gives
notice hereof) shall be recorded.


 


9.17       Facsimile Signatures.
The execution of this Agreement and all notices given hereunder and all amendments hereto, may be effected by facsimile signatures,
all of which shall be treated as originals; provided, however, that the party receiving a document with a facsimile signature may,
by notice to the other, require the prompt delivery of an original signature to evidence and confirm the delivery of the facsimile
signature.


 


9.18       Assignment by
the Parties. Neither party shall assign or transfer or permit the assignment or transfer of its rights or obligations under
this Agreement without the prior written consent of the other, any such assignment or transfer without such prior consent being
hereby declared to be null and void; provided, however, that Purchaser shall have the right to either nominate one
or more Affiliates to take title to the Property or to certain components of the Property or to assign this Agreement to one or
more Affiliates without Seller’s consent.


 


9.19       Waiver.
The excuse or waiver of the performance by a party of any obligation of the other party under this Agreement shall only be effective
if evidenced by a written statement signed by the party so excusing or waiving. No delay in exercising any right or remedy shall
constitute a waiver thereof, and no waiver by Seller or Purchaser of the breach of any covenant of this Agreement shall be construed
as a waiver of any preceding or succeeding breach of the same or any other covenant or condition of this Agreement.


 


9.20       Exclusivity.
After the Effective Date, Seller and its respective agents, representatives and employees shall immediately cease all marketing
of the Property until such time as this Agreement is terminated and Seller shall not directly or indirectly make, accept, negotiate,
entertain or otherwise pursue any offers for the sale of the Property.


 


9.21       Section 1031
Exchange. Either party may consummate the purchase or sale of the Property as part of a so-called like kind exchange (an “Exchange”)
pursuant to Section 1031 of the Internal Revenue Code of 1986, as amended (the “Code”), provided that (i) the
Closing shall not be delayed or affected by reason of an Exchange nor shall the consummation or accomplishment of any Exchange
be a condition precedent or condition subsequent to a party’s obligations under this Agreement; (ii) any party desiring an
Exchange shall effect its Exchange through an assignment of this Agreement, or its rights under this Agreement, to a qualified
intermediary and the other party shall not be required to take an assignment of the purchase agreement for the relinquished or
replacement property or be required to acquire or hold title to any real property for purposes of consummating such Exchange; and
(iii) the party desiring an Exchange shall pay any additional costs that would not otherwise have been incurred by Purchaser
or Seller had such party not consummated its purchase or sale through an Exchange. Neither party shall by this agreement or acquiescence
to an Exchange desired by the other party (1) have its rights under this Agreement affected or diminished in any manner or
(2) be responsible for compliance with or be deemed to have warranted to the other party that such party’s Exchange in fact
complies with Section 1031 of the Code. In connection with such cooperation, Seller agrees, upon request of Purchaser to “direct
deed” for actual interests in the property to designees of Purchaser.


 






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9.22       Public Announcements.
Except as otherwise expressly provided herein, neither Seller nor Purchaser shall make any public statement or issue any press
release prior to the Closing with respect to this Agreement or the transactions contemplated hereby without the prior written consent
of the other party. Seller hereby expressly acknowledges that Purchaser is a wholly-owned subsidiary of a publicly-traded company
and that Seller is aware and will advise its owners, employees and agents that federal and state securities laws prohibit any person
who has material, non-public information about a company from purchasing or selling securities of such a company or from communicating
such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase
or sell such securities. Seller further agrees that Purchaser shall have the right to disclose the fact that it is contemplating
the purchase of the Property and such other details of the transaction to the extent Purchaser reasonably deems necessary to comply
with applicable federal or state securities laws, rules or regulations.


 


[SIGNATURE PAGE TO FOLLOW]


 









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IN WITNESS WHEREOF, Seller
and Purchaser have caused this Agreement to be executed in their names by their respective duly authorized representatives.


 


	 	FEE OWNER:
	 	 	 
	 	MOODY NATIONAL RI GRAPEVINE S, LLC, 
	 	a Delaware limited liability company
	 	 	 
	 	By: 	/s/ Brett C. Moody
	 	Name: 	 
	 	Title:	 







 



    	 



    	 



    




 


IN WITNESS WHEREOF, Seller
and Purchaser have caused this Agreement to be executed in their names by their respective duly authorized representatives.


 





	 	MOODY MT:
	 	 	 
	 	Moody National TPS Newark MT, LLC, a Delaware limited liability company
	 	 	 
	 	By: Moody National Management, L.P., a Texas limited partnership, its sole member
	 	 	 
	 	By: Moody Management Corporation, a Texas corporation, it general partner
	 	 	 
	 	By:	/s/ Brett C. Moody
	 	 	Brett C. Moody, President







 






    	 



    	 



    

 


IN WITNESS WHEREOF, Seller
and Purchaser have caused this Agreement to be executed in their names by their respective duly authorized representatives.


 





	 	INTEREST OWNER:
	 	 	 
	 	MOODY NATIONAL MANAGEMENT, L.P.
	 	 	 
	 	By: Moody Management Corporation, a Texas corporation, it general partner
	 	 	 
	 	/s/ Brett C. Moody
	 	Brett C. Moody, President







 






    	 



    	 



    

 


IN WITNESS WHEREOF, Seller and Purchaser have
caused this Agreement to be executed in their names by their respective duly authorized representatives.


 





	 	PURCHASER:
	 	 	 
	 	MOODY NATIONAL REIT I INC., a Maryland corporation
	 	 	 
	 	By:	/s/ Brett C. Moody
	 	 	Brett Moody, President







 






    	 



    	 



    

 





RECEIPT OF THIS AGREEMENT
IS ACKNOWLEDGED BY PARTNERS TITLE COMPANY, EFFECTIVE AS OF                   , 2014.


 





	 	MOODY NATIONAL TITLE COMPANY, L.P.
	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 







 






    	 



    	 



    

 





EXHIBIT A