Exhibit 10.151


 


PURCHASE AND SALE AGREEMENT


 


BETWEEN


 


THE WOODLANDS HOTEL, L.P.


 


AS SELLER


 


AND


 


INLAND AMERICAN LODGING ACQUISITION, INC.


 


AS PURCHASER


 


DATED AUGUST 22, 2007


 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page No.

  
	
   

  	
   

  	
   

  
	
  ARTICLE 1

  	
  BASIC INFORMATION

  	
  1

  
	
  Section 1.2

  	
  Closing Costs

  	
  2

  
	
  Section 1.3

  	
  Notice Addresses:

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
  PROPERTY

  	
  4

  
	
  Section 2.1

  	
  Property

  	
  4

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
  EARNEST MONEY AND
  ALLOCATION OF PURCHASE PRICE

  	
  6

  
	
  Section 3.1

  	
  Deposit and Investment of
  Earnest Money

  	
  6

  
	
  Section 3.2

  	
  Independent Consideration

  	
  6

  
	
  Section 3.3

  	
  Form; Failure to Deposit

  	
  6

  
	
  Section 3.4

  	
  Disposition of Earnest Money

  	
  7

  
	
  Section 3.5

  	
  Allocation of Purchase
  Price

  	
  7

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
  DUE DILIGENCE

  	
  7

  
	
  Section 4.1

  	
  Due Diligence Materials Delivered
  to Purchaser

  	
  7

  
	
  Section 4.2

  	
  Due Diligence Materials To
  Be Made Available

  	
  9

  
	
  Section 4.3

  	
  Physical Due Diligence

  	
  9

  
	
  Section 4.4

  	
  Due Diligence/Termination Right

  	
  10

  
	
  Section 4.5

  	
  Service Contracts

  	
  10

  
	
  Section 4.6

  	
  Proprietary Information;
  Confidentiality

  	
  10

  
	
  Section 4.7

  	
  No Representation or Warranty by Seller

  	
  10

  
	
  Section 4.8

  	
  Purchaser’s Responsibilities

  	
  11

  
	
  Section 4.9

  	
  Purchaser’s Agreement to
  Indemnify

  	
  11

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
  TITLE AND SURVEY

  	
  12

  
	
  Section 5.1

  	
  Title Commitment

  	
  12

  
	
  Section 5.2

  	
  New or Updated Survey

  	
  12

  
	
  Section 5.3

  	
  Title Review

  	
  12

  
	
  Section 5.4

  	
  Delivery of Title Policy at Closing

  	
  12

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
  OPERATIONS AND RISK OF
  LOSS

  	
  13

  
	
  Section 6.1

  	
  Ongoing Operations

  	
  13

  
	
  Section 6.2

  	
  Damage

  	
  14

  
	
  Section 6.3

  	
  Condemnation

  	
  15

  
	
  Section 6.4

  	
  Hotel Employees; Manager

  	
  15

  
	
  Section 6.5

  	
  Assumption of Certain Agreements

  	
  15

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7

  	
  CLOSING

  	
  16

  
	
  Section 7.1

  	
  Closing

  	
  16

  
	
  Section 7.2

  	
  Conditions to Parties’ Obligation to Close

  	
  16

  
	
  Section 7.3

  	
  Seller’s Deliveries in
  Escrow

  	
  17

  



 


i

















 


	
   

  	
   

  	
  Page No.

  
	
   

  	
   

  	
   

  
	
  Section 7.4

  	
  Purchaser’s Deliveries in Escrow

  	
  19

  
	
  Section 7.5

  	
  Closing Statements

  	
  19

  
	
  Section 7.6

  	
  Purchase Price

  	
  19

  
	
  Section 7.7

  	
  Possession

  	
  19

  
	
  Section 7.8

  	
  Delivery of Books and Records

  	
  19

  
	
  Section 7.9

  	
  Notice to Vendors

  	
  20

  
	
  Section 7.10

  	
  Liquor Licenses

  	
  20

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8

  	
  PRORATIONS, DEPOSITS,
  COMMISSIONS

  	
  20

  
	
  Section 8.1

  	
  Prorations

  	
  20

  
	
  Section 8.2

  	
  Closing Costs

  	
  22

  
	
  Section 8.3

  	
  Final Adjustment After
  Closing

  	
  22

  
	
  Section 8.4

  	
  Hotel Sales Tax
  Liabilities

  	
  22

  
	
  Section 8.5

  	
  Commissions

  	
  23

  
	
  Section 8.6

  	
  Safe Deposit Boxes

  	
  23

  
	
  Section 8.7

  	
  Inventory of Baggage

  	
  23

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9

  	
  REPRESENTATIONS AND
  WARRANTIES

  	
  24

  
	
  Section 9.1

  	
  Seller’s Representations and Warranties

  	
  24

  
	
  Section 9.2

  	
  Purchaser’s Representations and Warranties

  	
  27

  
	
  Section 9.3

  	
  Survival of Representations and Warranties

  	
  28

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10

  	
  DEFAULT AND REMEDIES

  	
  28

  
	
  Section 10.1

  	
  Seller’s Remedies

  	
  28

  
	
  Section 10.2

  	
  Purchaser’s Remedies

  	
  29

  
	
  Section 10.3

  	
  Attorneys’ Fees

  	
  30

  
	
  Section 10.4

  	
  Other Expenses

  	
  30

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11

  	
  DISCLAIMERS, RELEASE AND
  INDEMNITY

  	
  30

  
	
  Section 11.1

  	
  Disclaimers by Seller

  	
  30

  
	
  Section 11.2

  	
  Sale “As Is, Where Is”

  	
  31

  
	
  Section 11.3

  	
  Seller Released from
  Liability

  	
  31

  
	
  Section 11.4

  	
  “Hazardous Materials”
  Defined

  	
  32

  
	
  Section 11.5

  	
  Indemnity

  	
  32

  
	
  Section 11.6

  	
  Survival

  	
  33

  
	
   

  	
   

  	
   

  
	
  ARTICLE 12

  	
  MISCELLANEOUS

  	
  33

  
	
  Section 12.1

  	
  Parties Bound; Assignment

  	
  33

  
	
  Section 12.2

  	
  Headings

  	
  33

  
	
  Section 12.3

  	
  Invalidity and Waiver

  	
  33

  
	
  Section 12.4

  	
  Governing Law

  	
  33

  
	
  Section 12.5

  	
  Survival

  	
  33

  
	
  Section 12.6

  	
  Entirely and Amendments

  	
  33

  



 


ii

















 


	
   

  	
   

  	
  Page No.

  
	
   

  	
   

  	
   

  
	
  Section 12.7

  	
  Time

  	
  34

  
	
  Section 12.8

  	
  Confidentiality

  	
  34

  
	
  Section 12.9

  	
  No Electronic Transactions

  	
  34

  
	
  Section 12.10

  	
  Notices

  	
  34

  
	
  Section 12.11

  	
  Construction

  	
  34

  
	
  Section 12.12

  	
  Calculation of Time
  Periods

  	
  34

  
	
  Section 12.13

  	
  Execution in Counterparts

  	
  35

  
	
  Section 12.14

  	
  No Recordation

  	
  35

  
	
  Section 12.15

  	
  Further Assurances

  	
  35

  
	
  Section 12.16

  	
  Discharge of Obligations

  	
  35

  
	
  Section 12.17

  	
  No Third Party Beneficiary

  	
  35

  
	
  Section 12.18

  	
  Reporting Person

  	
  35

  
	
  Section 12.19

  	
  Like-Kind Exchange

  	
  35

  



 


iii

















 


LIST OF DEFINED TERMS


 


	
   

  	
  Page No.

  
	
   

  	
   

  
	
  Accounts Receivables

  	
  21

  
	
  Additional Earnest Money

  	
  1

  
	
  Additional Property
  Information

  	
  9

  
	
  Advance Bookings

  	
  9

  
	
  Agreement

  	
  1

  
	
  Applicable Person

  	
  1

  
	
  Assignment

  	
  17

  
	
  Casualty Notice

  	
  14

  
	
  CERCLA

  	
  30

  
	
  Closing

  	
  16

  
	
  Closing Date

  	
  2

  
	
  Convention Center Lease

  	
  6

  
	
  Convention Center Project

  	
  6

  
	
  Deed

  	
  17

  
	
  Delinquent

  	
  20

  
	
  Due Diligence Termination
  Notice

  	
  10

  
	
  Earnest Money

  	
  1

  
	
  Effective Date

  	
  2

  
	
  Escrow Agent

  	
  2

  
	
  Exchange

  	
  34

  
	
  Guest Ledger

  	
  21

  
	
  Hazardous Material

  	
  31

  
	
  Hazardous Materials

  	
  31

  
	
  Hazardous Substance

  	
  31

  
	
  Hotel

  	
  4

  
	
  Hotel Employees

  	
  8

  
	
  Improvements

  	
  4

  
	
  Independent Consideration

  	
  6

  
	
  Initial Earnest Money

  	
  1

  
	
  Inspection Period

  	
  2

  
	
  Intangible Personal
  Property

  	
  5

  
	
  Inventory

  	
  5

  
	
  Land

  	
  4

  
	
  License Agreements

  	
  6

  
	
  Management Agreement

  	
  5

  
	
  Manager

  	
  5

  
	
  Marriott Consent

  	
  17

  
	
  Material Damage

  	
  15

  
	
  Materially Damaged

  	
  15

  
	
  Natural Gas Liquids

  	
  31

  
	
  OFAC

  	
  25

  
	
  Operating Statements

  	
  8

  



 


iv

















 


	
   

  	
  Page No.

  
	
   

  	
   

  
	
  Permitted Exceptions

  	
  12

  
	
  Permitted Outside Parties

  	
  10

  
	
  Petroleum

  	
  31

  
	
  Petty Cash

  	
  21

  
	
  Pollutant or Contaminant

  	
  31

  
	
  Property

  	
  4

  
	
  Property Documents

  	
  10

  
	
  Property Information

  	
  8

  
	
  Proposed Purchase Price
  Allocation

  	
  7

  
	
  Purchase Price

  	
  1

  
	
  Purchaser

  	
  1

  
	
  Purchaser Manager

  	
  15

  
	
  qualified beneficiaries

  	
  16

  
	
  Qualifying Event

  	
  16

  
	
  Real Property

  	
  4

  
	
  Rents

  	
  20

  
	
  Rooms Ledger

  	
  5

  
	
  Seller

  	
  1

  
	
  Seller’s Broker

  	
  22

  
	
  Seller’s Representatives

  	
  27

  
	
  Service Contracts

  	
  5

  
	
  Survey

  	
  12

  
	
  Surveyor

  	
  12

  
	
  Survival Period

  	
  27

  
	
  Tangible Personal Property

  	
  5

  
	
  Taxes

  	
  20

  
	
  TCID

  	
  5

  
	
  Title and Survey Review
  Period

  	
  2

  
	
  Title Commitment

  	
  11

  
	
  Title Commitment Delivery
  Date

  	
  2

  
	
  Title Company

  	
  1

  
	
  Title Policy

  	
  12

  
	
  to Seller’s knowledge

  	
  27

  
	
  to the best of Seller’s
  knowledge

  	
  27

  
	
  Urban Retreat Lease

  	
  6

  
	
  WARN Act

  	
  15

  



 


v

















 


PURCHASE AND SALE AGREEMENT


The Woodlands Waterway Marriott Hotel, The Woodlands, Texas


 


This
Purchase and Sale Agreement (this “Agreement”)
is made and entered into by and between Purchaser and Seller.


 


RECITALS


 


A.                                    Defined terms are indicated by initial
capital letters. Defined terms shall have the meaning set forth herein, whether
or not such terms are used before or after the definitions are set forth.


 


B.                                      Purchaser desires to purchase the Property
and Seller desires to sell the Property, all upon the terms and conditions set
forth in this Agreement.


 


NOW, THEREFORE, in consideration of the mutual
terms, provisions, covenants and agreements set forth herein, as well as the
sums to be paid by Purchaser to Seller, and for other good and valuable
consideration, the receipt and sufficiency of which are acknowledged, Purchaser
and Seller agree as follows:


 


ARTICLE 1

BASIC INFORMATION


 


	
   

  	
  1.1.1

  	
  Seller:

  	
  THE WOODLANDS HOTEL, L.P., a Texas limited partnership

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.1.2

  	
  Purchaser:

  	
  INLAND AMERICAN LODGING
  ACQUISITION, INC.,
  a Delaware corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.1.3

  	
  Purchase Price:

  	
  $137,000,000.00

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.1.4

  	
  Earnest Money:

  	
  $2,000,000.00 (the “Initial Earnest Money”), including interest
  thereon, to be deposited in accordance with Section 3.1 below, to be
  increased by $3,000,000.00 (the “Additional Earnest
  Money”) to $5,000,000.00, plus interest thereon, pursuant to Section
  3.1.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.1.5

  	
  Title Company:

  	
  Stewart Title Company of Montgomery
  County, Inc.

  1610 Woodstead Court, Suite 100

  The Woodlands, Texas 77380

  Attn: Cynthia Kojak

  Telephone: (832) 482-1844

  Facsimile: (281) 367-0327

  Email: ckojak@stewart.com

  



 

















 


	
   

  	
  1.1.6

  	
  Escrow Agent:

  	
  Stewart Title Company of Montgomery
  County, Inc.

  1610 Woodstead Court, Suite 100

  The Woodlands, Texas 77380

  Attn: Cynthia Kojak

  Telephone: (832) 482-1844

  Facsimile: (281) 367-0327

  Email: ckojak@stewart.com

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.1.7

  	
  Effective Date:

  	
  The date on which this
  Agreement is executed by the latter to sign of Purchaser or Seller, as
  indicated on the signature page of this Agreement. If the execution date is
  left blank by either Purchaser or Seller, the Effective Date shall be the
  execution date inserted by the other party.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.1.8

  	
  Title Commitment

  Delivery Date:

  	
  The date which is five (5)
  days after the Effective Date.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.1.9

  	
  Title and Survey Review Period:

  	
  The period ending upon the
  expiration of the Inspection Period.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.1.10

  	
  Inspection Period:

  	
  The period beginning on
  the Effective Date and ending the earlier to occur of (i) twenty-one (21)
  days after the Effective Date or (ii) September 12, 2007.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.1.11

  	
  Closing Date:

  	
  The earlier to occur of
  (i) thirty (30) days from the end of the Inspection Period or (ii) October
  12, 2007.

  



 


Section
1.2                                        Closing Costs. Closing costs shall be allocated and paid as
follows:


 


	
   

  	
   

  	
  RESPONSIBLE

  
	
  COST

  	
   

  	
  PARTY

  
	
   

  	
   

  	
   

  
	
  Title Commitment required
  to be delivered pursuant to Section 5.1.

  	
   

  	
  Seller

  
	
   

  	
   

  	
   

  
	
  Premium for standard Title
  Policy delivered pursuant to Section 5.4, together with a
  Restrictions, Encroachments, Minerals Endorsement (T-19.1) (to the extent the
  Title Company will issue the same).

  	
   

  	
  Seller

  



 


2

















 


	
  COST

  	
   

  	
  RESPONSIBLE

  PARTY

  
	
   

  	
   

  	
   

  
	
  Premium for any upgrade of
  Title Policy for any additional coverage and any endorsements desired by
  Purchaser (other than Endorsement T-19.1), any inspection fee charged by the
  Title Company, tax certificates, municipal and utility lien certificates, and
  any other Title Company charges.

  	
   

  	
  Purchaser

  
	
   

  	
   

  	
   

  
	
  Costs of Survey

  	
   

  	
  Purchaser

  
	
   

  	
   

  	
   

  
	
  Costs of any revisions,
  modifications or recertifications to the Survey

  	
   

  	
  Purchaser

  
	
   

  	
   

  	
   

  
	
  Costs for UCC searches

  	
   

  	
  Purchaser

  
	
   

  	
   

  	
   

  
	
  Recording fees

  	
   

  	
  Purchaser

  
	
   

  	
   

  	
   

  
	
  Any transfer taxes, sales
  taxes and fees due in connection with the transfer of the Property

  	
   

  	
  Purchaser

  
	
   

  	
   

  	
   

  
	
  Any taxes, fees or
  assessments in connection with any security instrument required by
  Purchaser’s lender

  	
   

  	
  Purchaser

  
	
   

  	
   

  	
   

  
	
  Any escrow fee charged by
  Escrow Agent for holding the Earnest Money or conducting the Closing

  	
   

  	
  Purchaser:
  1/2

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Seller:
  1/2

  
	
   

  	
   

  	
   

  
	
  Real Estate Sales
  Commission to Broker

  	
   

  	
  Seller

  
	
   

  	
   

  	
   

  
	
  All other closing costs,
  expenses, charges and fees, including the respective parties’ attorneys’ fees
  and fees of professional consultants

  	
   

  	
  Each
  party to pay its own

  



 


Section
1.3                                        Notice Addresses:


 


	
  Purchaser:

  	
   

  	
  Copy to:

  
	
  Inland American Lodging
  Acquisitions, Inc.

  390 N. Orange Avenue, Suite 1650

  Orlando, Florida

  Attention: Marcel Verbaas, President

  Telephone: 407-317-6950

  Facsimile: 407-999-8428

  E-mail: Verbaas@inlandgroup.com

  	
   

  	
  The Inland Real Estate
  Group, Inc.

  Law Development

  2901 Butterfield Road

  Oak Brook, IL 60523

  Attention: Scott Wilton, Esquire

  Telephone: 630-218-8000

  Facsimile: 630-218-4900

  E-mail: swilton@inlandgroup.com

  



 


3

















 


	
   

  	
   

  	
  Copy to:

  
	
   

  	
   

  	
  Lowndes, Drosdick, Doster,
  Kantor & Reed, PA

  215 N. Eola Drive

  Orlando, FL 32801

  Attention: Richard J. Fildes, Esquire

  Telephone: 407-843-4600

  Facsimile: 407-843-4444

  E-mail: rich.fildes@lowndes-law.com

  



 


	
  Seller:

  	
   

  	
  Copy to:

  
	
  The Woodlands Hotel, L.P.

  2201 Timberloch Place

  The Woodlands, Texas 77380-1181

  Attention: Dan B. Leverett

  Telephone: (281) 719-6142

  Facsimile: (281) 719-6280

  E-mail:dleverett@thewoodlands.com

  	
   

  	
  The Woodlands Operating
  Company, L.P.

  2201 Timberloch Place

  The Woodlands, Texas 77380-1181

  Attention: Karen West

  Telephone: (281) 719-6224

  Facsimile: (281) 719-6280

  E-mail:kwest@thewoodlands.com

  



 


ARTICLE 2

PROPERTY


 


Section 2.1                                      Property. Subject to the terms and conditions of this
Agreement, Seller agrees to sell to Purchaser, and Purchaser agrees to purchase
from Seller, the following property (collectively, the “Property”):


 


2.1.1                         Real Property. The land described in Exhibit A
attached hereto (the “Land”),
together with (a) all improvements located thereon, including that certain
hotel located at 1601 Lake Robbins Drive, The Woodlands, Texas 77380 (the “Hotel”),  but expressly
excluding improvements and structures owned by any tenant (“Improvements”),
(b) without warranty, all right, title and interest of Seller, if any, in and
to the rights, benefits, privileges, easements, tenements, hereditaments, and
appurtenances thereon or in anywise appertaining thereto, and (c) without
warranty, all right, title, and interest of Seller, if any, in and to all
strips and gores and any land lying in the bed of any street, road or alley,
open or proposed, adjoining the Land (collectively, the “Real Property”).


 


2.1.2                         Tangible Personal Property. All of Seller’s right, title and interest,
without warranty, in the equipment, machinery, furniture, furnishings,
supplies, Inventory and other tangible personal property, if any, owned by
Seller, and now or hereafter located in and used in connection with the
operation, ownership or management of the Real Property, but specifically
excluding any items of personal property owned or leased by Manager (as defined
below), tenants, licensees or concessionaires at or on the Real Property,
including any items of personal property containing the logo, tradename,
trademark or branding of the name “Marriott” or
any derivative thereof (provided that any items of personal property containing
the logo, tradename, trademark or branding of the name “Marriott” or any
derivative thereof shall be included as Tangible Personal


 


4

















 


Property
to the extent that Purchaser has obtained a proper use license from the Manager
with respect thereto), and further excluding any items of personal property
owned by third parties and leased to Seller (other than pursuant to an
assignment of Seller’s right, title and interest in any such lease hereunder)
(collectively, the “Tangible Personal
Property”).  As used herein, “Inventory” shall mean all of Seller’s
right, title and interest, without warranty, in all inventories of food in open
or unopened containers or cases and any used or reserve stock of linens, china,
glassware, silver eating utensils, uniforms, towels, paper goods, soaps,
cleaning supplies and similar materials with respect to the operation,
ownership or management of the Hotel, but specifically excluding any items of
personal property containing the logo, tradename, trademark or branding of the
name “Marriott” or any derivative thereof (provided that any items of personal
property containing the logo, tradename, trademark or branding of the name “Marriott”
or any derivative thereof shall be included as Tangible Personal Property to
the extent that Purchaser has obtained a proper use license from the Manager
with respect thereto).


 


2.1.3                                    Intangible Personal Property. All of Seller’s right, title and interest, if
any, without warranty, in all intangible personal property related to the Real
Property and the Improvements, including, without limitation: Seller’s rights
and interests, if any, in the name of the Real Property and/or the name of the
Hotel; the plans and specifications and other architectural and engineering
drawings for the Improvements, if any (to the extent assignable without cost to
Seller); contract rights related to the operation or ownership of the Real
Property, including operating agreements (and including without limitation the
Convention Center Booking and Blocking Agreement dated June 29, 2001 between
Seller and Town Center Improvement District of Montgomery County, Texas (“TCID”), as amended to date), maintenance, service, construction,
supply and equipment rental contracts, if any (collectively, the “Service  Contracts”)  (Seller’s obligations thereunder
are expressly assumed by Purchaser pursuant to this Agreement, at Seller’s cost
unless otherwise expressly provided herein or agreed to by Seller and
Purchaser), but not including License Agreements (defined below), that certain
Management Agreement dated as of July 18, 2001 (as amended to date, the “Management Agreement”) between Seller and Marriott Hotel Services,
Inc. (“Manager”); warranties (to the
extent assignable without cost to Seller); governmental permits, approvals and
licenses, if any (to the extent assignable without cost to Seller); telephone
exchange numbers (to the extent assignable without cost to Seller); Advance
Bookings (defined below); Purchaser’s share of the Rooms Ledger as defined in
and determined under Section 8.1.4 hereof; and the Petty Cash, Purchaser’s
share of the Guest Ledger, and Accounts Receivables (each as defined in Section
8.1.5 hereof) (all of the items described in this Section 2.1.3
collectively referred to as the “Intangible
Personal Property”).  Tangible Personal Property and
Intangible Personal Property shall not include (a) any appraisals or other
economic evaluations of, or projections with respect to, all or any portion of
the Property, including, without limitation, budgets prepared by or on behalf of
Seller, Manager or any affiliate thereof, (b) any documents, materials or
information which are subject to attorney/client, work product or similar
privilege, which constitute attorney communications with respect to the
Property and/or Seller, or which are subject to a confidentiality agreement,
and any trade name, mark or other identifying material that includes the name “Marriott”
or the name “The Woodlands” or any derivative thereof. Provided however, Seller
and Purchaser shall enter into a license


 


5

















 


agreement
for the use of the name “The Woodlands” or “Woodlands” by Purchaser, if the
parties can mutually agree on the form of license agreement (which shall be
negotiated in good faith by the parties) prior to the end of the Inspection
Period.


 


2.1.4                                License Agreements.
All of Seller’s right, title
and interest, without warranty, in and to all agreements, if any, for the
leasing or licensing of rooftop space or equipment, telecommunications
equipment, cable access and other space, equipment and facilities that are
located on or within the Real Property and generate income to Seller as the
owner of the Real Property, including that certain (i) lease agreement dated
June 24, 2005 between Seller and Urban Retreat of The Woodlands, L.L.C. (as
amended to date, the “Urban Retreat Lease”),
and (ii) Meeting Rooms Lease Agreement dated June 29, 2001, between Seller and
TCID, as amended to date, and further including agreements which may be made by
Seller after the Effective Date and prior to Closing as permitted by this
Agreement (the “License Agreements”).
Anything in this Agreement to the contrary notwithstanding, Purchaser shall
assume the obligations of the “lessor” or “licensor” under all License
Agreements, some or all of which may be non-cancelable.


 


2.1.5                                Project Lease.
All of Seller’s right, title
and interest under that certain Project Lease Agreement (“Convention
Center Lease”) dated as of June 29, 2001, by and between TCID,
as landlord, and Seller, as tenant, as heretofore amended, with respect to the
multi-use convention center/meeting facility contiguous to the Hotel and
related improvements, personal property, land and leasehold interests, all as
set forth in the Convention Center Lease (collectively, the “Convention Center Project”).


 


ARTICLE 3

EARNEST MONEY AND ALLOCATION OF PURCHASE PRICE


 


Section
3.1                                        Deposit and Investment of Earnest
Money. Within two business days after the Effective
Date, Purchaser shall deposit the Initial Earnest Money with Escrow Agent. If
upon the expiration of the Inspection Period, this Agreement is still in force
and effect, Purchaser shall, no later than two business days after the last day
of the Inspection Period, deposit the Additional Earnest Money as specified in Section
1.1.4 above, with Escrow Agent. Escrow Agent shall invest the Earnest Money
in government insured interest-bearing accounts satisfactory to Seller and
Purchaser, shall not commingle the Earnest Money with any funds of Escrow Agent
or others, and shall promptly provide Purchaser and Seller with confirmation of
the investments made. Such account shall have no penalty for early withdrawal,
and Purchaser accepts all risks with regard to such account.


 


Section 3.2                                     Independent Consideration. If Purchaser elects to terminate this
Agreement for any reason and is entitled to receive a return of the Earnest
Money pursuant to the terms hereof, the Escrow Agent shall first disburse to
Seller One Hundred and No/100 Dollars ($100.00) as independent consideration
for Seller’s performance under this Agreement (“Independent
Consideration”), which shall be retained by Seller in all
instances.


 


Section 3.3                                    Form; Failure to Deposit. The Earnest Money shall be in the form of a
certified or cashier’s check or the wire transfer to Escrow Agent of
immediately available U.S. federal funds. If Purchaser fails to timely deposit
any portion of the Earnest Money within the


 


6

















 


time
periods required, Seller may terminate this Agreement by written notice to
Purchaser, in which event any Earnest Money that has previously been deposited
by Purchaser with Escrow Agent shall be immediately delivered to Seller and
thereafter the parties hereto shall have no further rights or obligations
hereunder, except for rights and obligations which, by their terms, survive the
termination hereof.


 


Section 3.4                                       Disposition of Earnest Money. The Earnest Money shall be applied as a
credit to the Purchase Price at Closing. However, if Purchaser elects to
terminate this Agreement prior to the expiration of the Inspection Period
pursuant to Section 4.4, Escrow Agent shall pay the entire Earnest
Money (less the Independent Consideration) to Purchaser one business day
following receipt of the Due Diligence Termination Notice from Purchaser (as
long as the current investment can be liquidated and disbursed in one business
day). No notice to Escrow Agent from Seller shall be required for the release
of the Earnest Money to Purchaser by Escrow Agent if Purchaser terminates this Agreement
pursuant to Section 4.4. In the event of a termination of this Agreement
by either Seller or Purchaser for any reason other than pursuant to Section
4.4, Escrow Agent is authorized to deliver the Earnest Money to the party
hereto entitled to same pursuant to the terms hereof on or before the tenth
business day following receipt by Escrow Agent and the non-terminating party of
written notice of such termination from the terminating party, unless the other
party hereto notifies Escrow Agent that it disputes the right of the other
party to receive the Earnest Money. In such event, Escrow Agent shall continue
to hold the Earnest Money until Escrow Agent has received joint written
instructions on the disposition thereof from Seller and Purchaser. If such
written instructions are not received by Escrow Agent within ten (10) days
after Escrow Agent has delivered a written request for instructions upon Seller
and Purchaser, Escrow Agent may interplead the Earnest Money into a court of
competent jurisdiction in the county in which the Earnest Money has been
deposited. All attorneys’ fees and costs and Escrow Agent’s costs and expenses
incurred in connection with such interpleader shall be assessed against the
party that is not awarded the Earnest Money, or if the Earnest Money is
distributed in part to both parties, then in the inverse proportion of such
distribution.


 


Section 3.5                                Allocation of Purchase Price. On or before the date which is thirty (30)
days after the Effective Date, Purchaser shall provide to Seller the proposed
allocation of the Purchase Price among the Land, the Improvements, the Tangible
Personal Property and the Intangible Personal Property comprising the Property
(the “Proposed Purchase Price Allocation”) for Seller’s approval, such approval
not to be unreasonably withheld, conditioned or delayed. Seller shall notify
Purchaser in writing whether it approves of the Proposed Purchase Price
Allocation within three business days after Purchaser’s submission thereof. If
Seller disapproves of such Proposed Purchase Price Allocation, then Seller
shall notify Purchaser thereof in writing specifying in reasonable detail the
reasons for such disapproval, in which case Purchaser and Seller shall in good
faith endeavor to agree upon the Proposed Purchase Price Allocation prior to
Closing, but the same shall not be a condition to Closing.


 


ARTICLE 4

DUE DILIGENCE


 


Section 4.1                            Due Diligence Materials
Delivered to Purchaser. Seller
shall deliver to Purchaser (or make available as referenced in 4.1.1) the following
information (the “Property Information”) within five (5) business days
following the Effective Date, and thereafter through


 


7

















 


Closing,
Seller shall provide any updates to or any new Property Information to
Purchaser promptly upon any such new or updated Property Information becoming
available to Seller:


 


4.1.1                            Financial Information. To the extent
Seller has, or has access to, the following documents pursuant to the
Management Agreement, Seller shall make available to Purchaser for review and
copying at the Hotel, copies of all accounting, tax financial and other books
and records relating to the Property in Seller’s possession or located at the
Property, operating statements and a summary of capital expenditures pertaining
to the Property for the period of time that Seller has owned the Property (“Operating Statements”);


 


4.1.2                            Environmental Reports. Copy of any
environmental reports or site assessments related to the Property prepared for
the benefit of Seller;


 


4.1.3                            Tax Statements. Copy of ad valorem tax statements relating
to the Property for the current tax period and the immediately preceding tax
period;


 


4.1.4                            Title and Survey. Copy of Seller’s most current title
insurance information and survey of the Property;


 


4.1.5                        Service Contracts. A list, together with copies, of Service
Contracts;


 


4.1.6                        Management Agreement. Copy of the Management Agreement.


 


4.1.7                        Hotel Employees. A current schedule of persons employed by
Manager in the direct “on-site” management of the Hotel (the “Hotel Employees”), specifying the number of
employees, their name and title, actual salary and approved overhead.


 


4.1.8                        Certificate of Insurance. Copy of the
certificate of insurance evidencing the property insurance maintained by Seller
with respect to the Improvements;


 


4.1.9                        A/R Schedule. Copy of a current accounts receivable
schedule with respect to the Property; and


 


4.1.10                  License
Agreements/Tenant Leases. A list, together with copies, of any License
Agreements, and space leases, if any, for any portion of the Hotel (such space
leases being herein referred to as the “Tenant Leases”). For purpose of this
Agreement, the Urban Retreat Lease shall not be included within the definition
of Tenant Leases.


 


4.1.11               Convention Center Lease. A copy of the Convention Center Lease.


 


4.1.12               Permits,
etc. A list, together with copies of all permits
and licenses, certificates of occupancy, copies of books and records of
accounts and copies of correspondence with tenants and suppliers.


 


4.1.13               Urban
Retreat Lease. A copy of the Urban Retreat Lease.


 


8

















 


Section
4.2                                        Due Diligence Materials To
Be Made Available. To the
extent such items are in Seller’s possession or control, Seller shall make available
to Purchaser for Purchaser’s review, at Seller’s option at either the offices
of Seller or at the Property, the following items and information (the “Additional Property Information”) on or before the date that is five
days following the Effective Date, and Purchaser at its expense shall have the
right to make copies of same, and thereafter through Closing Seller shall make
available to Purchaser with notice to Purchaser of the availability of same any
updates to or any new Additional Property Information promptly upon any such
new or updated Additional Property Information becoming available to Seller:


 


4.2.1                          Equipment and Building
Warranties. Warranties, if any,
on roofs, air conditioning units, fixtures and equipment;


 


4.2.2                          Advance Bookings. The register of reservations and agreements
made or entered into by Seller in the ordinary course of business prior to
Closing for hotel rooms or meeting rooms to be utilized after Closing, or for
catering services or other hotel services to be provided after Closing (the “Advance Bookings”), which
register of Advance Bookings shall be updated and delivered to Purchaser at
Closing; and


 


4.2.3                          Plans and Specifications. Building plans and specifications relating to
the Property.


 


Section 4.3                                   Physical Due Diligence. Commencing on the Effective Date and
continuing until the Closing, Purchaser shall have reasonable access to the
Property at all reasonable times during normal business hours for the purpose
of conducting reasonably necessary tests, including surveys and architectural,
engineering, geotechnical and environmental inspections and tests, provided
that (a) Purchaser must give Seller twenty-four (24) hours’ prior telephone or
written notice of any such inspection or test, and with respect to any
intrusive inspection or test (i.e., core sampling) must obtain Seller’s prior
written consent (which consent may be given, withheld or conditioned in Seller’s
sole discretion), (b) prior to performing any inspection or test, Purchaser
must deliver a certificate of insurance to Seller evidencing that Purchaser and
its contractors, agents and representatives have in place reasonable amounts of
commercial general liability insurance and workers compensation insurance for
its activities on the Property in terms and amounts reasonably satisfactory to
Seller covering any accident arising in connection with the presence of
Purchaser, its contractors, agents and representatives on the Property, which
insurance shall name Seller as an additional insured thereunder, and (c) all such
tests shall be conducted by Purchaser in compliance with Purchaser’s
responsibilities set forth in Section 4.8 below. Purchaser shall bear
the cost of all such inspections or tests and shall be responsible for and act
as the generator with respect to any wastes generated by those tests (except
for any wastes arising out of pre-existing matters merely discovered by
Purchaser (i.e., latent environmental contamination)). Subject to the
provisions of Section 4.6 hereof, Purchaser or Purchaser’s
representatives may meet with the general manager of the Hotel; provided,
however, Purchaser must contact Seller at least twenty-four (24) hours in
advance by telephone to inform Seller of Purchaser’s intended meeting and to
allow Seller the opportunity to attend such meeting if Seller desires. Subject
to the provisions of Section 4.6 hereof, Purchaser or Purchaser’s
representatives may meet with any governmental authority for the sole purpose
of gathering information in connection with the transaction contemplated by this
Agreement;


 


9

















 


provided, however, Purchaser
must contact Seller at least twenty-four (24) hours in advance by telephone to
inform Seller of Purchaser’s intended meeting and to allow Seller the
opportunity to attend such meeting if Seller desires.


 


Section 4.4                                       Due Diligence/Termination Right. Purchaser shall have through the last day of
the Inspection Period in which to (a) examine, inspect, and investigate the
Property Information and the Additional Property Information (collectively, the
“Property Documents”) and the
Property and, in Purchaser’s sole and absolute judgment and discretion,
determine whether the Property is acceptable to Purchaser, (b) obtain all
necessary internal approvals, and (c) satisfy all other contingencies of
Purchaser. Notwithstanding anything to the contrary in this Agreement,
Purchaser may terminate this Agreement and receive a return of the Earnest
Money for any reason or no reason by giving written notice of termination to
Seller and Escrow Agent (the “Due Diligence
Termination Notice”) on or before the last day of the Inspection
Period. If Purchaser does not give a Due Diligence Termination Notice, this
Agreement shall continue in full force and effect, Purchaser shall be deemed to
have waived its right to terminate this Agreement pursuant to this Section
4.4, and Purchaser shall be deemed to have acknowledged that it has
received or had access to all Property Documents and conducted all inspections
and tests of the Property that it considers important.


 


Section 4.5                                    Service Contracts. On or prior to the last day of the
Inspection Period, Purchaser will advise Seller in writing of which Service
Contracts it will assume and for which Service Contracts Purchaser requests
that Seller deliver written termination at or prior to Closing, provided Seller
shall have no obligation to terminate, and Purchaser shall be obligated to
assume, any Service Contracts which by their terms cannot be terminated without
penalty or payment of a fee. Seller shall deliver at or before Closing notices
of termination of all Service Contracts that are not so assumed. Purchaser must
assume the obligations arising from and after the Closing Date under those
Service Contracts (a) that Purchaser has agreed to assume, or that Purchaser is
obligated to assume pursuant to this Section 4.5, and (b) for which a
termination notice is delivered as of or prior to Closing but for which
termination is not effective until after Closing.


 


Section 4.6                                 Proprietary Information; Confidentiality. Purchaser acknowledges that the Property
Documents are proprietary and confidential and will be delivered to Purchaser
solely to assist Purchaser in determining the feasibility of purchasing the
Property. Purchaser shall not use the Property Documents for any purpose other
than as set forth in the preceding sentence. Purchaser shall not disclose the
contents to any person other than to those persons who are responsible for
determining the feasibility of Purchaser’s acquisition of the Property and who
have agreed to preserve the confidentiality of such information as required
hereby (collectively, “Permitted Outside
Parties”). Purchaser shall not divulge the contents of the
Property Documents and other information except in strict accordance with the
confidentiality standards set forth in this Section 4.6. In permitting
Purchaser to review the Property Documents or any other information, Seller has
not waived any privilege or claim of confidentiality with respect thereto, and
no third party benefits or relationships of any kind, either express or
implied, have been offered, intended or created.


 


Section 4.7                              No Representation or Warranty by
Seller. Purchaser acknowledges that, except as
expressly set forth in this Agreement, Seller has not made and does not make
any warranty or representation regarding the truth, accuracy or completeness of
the Property


 


10

















 


Documents
or the source(s) thereof. Purchaser further acknowledges that some if not all
of the Property Documents were prepared by third parties other than Seller.
Seller expressly disclaims any and all liability for representations or
warranties, express or implied, statements of fact and other matters contained
in such information, or for omissions from the Property Documents, or in any
other written or oral communications transmitted or made available to
Purchaser. Purchaser shall rely solely upon Seller’s written representations as
set forth in this Agreement and its own investigation with respect to the
Property, including, without limitation, the Property’s physical, environmental
or economic condition, compliance or lack of compliance with any ordinance,
order, permit or regulation or any other attribute or matter relating thereto.
Seller has not undertaken any independent investigation as to the truth,
accuracy or completeness of the Property Documents and is providing the
Property Documents solely as an accommodation to Purchaser.


 


Section 4.8                                     Purchaser’s Responsibilities. In conducting any inspections,
investigations or tests of the Property and/or Property Documents, Purchaser
and its agents and representatives shall: (a) not unreasonably disturb the
guests of the Hotel or interfere with their use of the Property; (b) not
unreasonably interfere with the operation and maintenance of the Property; (c)
not damage any part of the Property or any personal property owned or held by
any tenant or any third party; (d) not injure or otherwise cause bodily harm to
Seller or its agents, guests, invitees, contractors and employees or any guests
of the Hotel or their invitees; (e) comply with all applicable laws; (f)
promptly pay when due the costs of all tests, investigations, and examinations
done with regard to the Property; (g) not permit any liens to attach to the
Real Property by reason of the exercise of its rights hereunder; (h) repair any
damage to the Real Property resulting directly or indirectly from any such
inspection or tests; and (i) not reveal or disclose prior to Closing any
information obtained during the Inspection Period concerning the Property and
the Property Documents to anyone other than the Permitted Outside Parties, in
accordance with the confidentiality standards set forth in Section 4.6
above, or except as may be otherwise required by law.


 


Section 4.9                                 Purchaser’s Agreement to Indemnify. Purchaser hereby
agrees to indemnify, defend and hold Seller harmless from and against any and
all liens, claims, causes of action, damages, liabilities and expenses
(including reasonable attorneys’ fees) arising out of Purchaser’s inspections
or tests permitted under this Agreement or any violation of the provisions of Section
4.3, Section 4.6  and Section 4.8; provided,
however, the indemnity shall not extend to protect Seller from any pre-existing
liabilities for matters merely discovered by Purchaser (i.e., latent
environmental contamination). Purchaser’s obligations under this Section 4.9
shall survive the termination of this Agreement and shall survive the Closing.


 


Section 4.10                        Cooperation with Purchaser’s Audit. Seller agrees, at
Purchaser’s expense, to cooperate fully with Purchaser and Purchaser’s
representatives to facilitate Purchaser’s evaluations and reports concerning
the Property, including a one (1) year audit of the 2006 (January 1-December
31, 2006) books and records of the Property. In addition, at the Closing,
Seller shall execute and deliver to Purchaser an audit representation letter
(the “Audit Letter”) if the parties can mutually agree on the form of the
letter prior to the end of the Inspection Period.


 


11
















 


ARTICLE 5

TITLE AND SURVEY


 


Section 5.1                            Title Commitment. Seller shall cause to be prepared and
delivered to Purchaser on or before the Title Commitment Delivery Date: (a) a
current commitment for title insurance or preliminary title report (the “Title Commitment”) issued by the Title Company, in
the amount of the Purchase Price and on a TLTA Standard Form commitment, with
Purchaser as the proposed insured, and (b) copies of all documents of record
referred to in the Title Commitment as exceptions to title to the Property.
PURCHASER ACKNOWLEDGES THAT SELLER HAS ADVISED THAT THE PROPERTY IS LOCATED
WITHIN A MUNICIPAL UTILITY DISTRICT.


 


Section 5.2                            New or Undated Survey. Within ten (10) days from the date of this
Agreement, Seller shall provide, at Seller’s sole cost and expense (except as
provided below), (i) a current map of survey of the Property (“Survey”) conforming with the standards for an ALTA
Survey, according to the current Manual of Practice for Land Surveying in Texas
of the Texas Society of Professional Surveyors, prepared by a Registered
Professional Land Surveyor (“Surveyor”),
containing a Surveyor’s Certificate in the form attached as Exhibit E,
and (ii) a legal description of the Property prepared by the Surveyor.
Purchaser shall pay for any revisions, modifications or recertifications to the
Survey.


 


Section 5.3                            Title Review. During the Title and Survey Review Period,
Purchaser shall review title to the Property as disclosed by the Title
Commitment and the Survey. Seller shall have no obligation to cure title
objections except financing liens of an ascertainable amount created by, under
or through Seller, which liens Seller shall cause to be released at or prior to
Closing (with Seller having the right to apply the Purchase Price or a portion thereof
for such purpose), and Seller shall deliver the Property free and clear of any
such financing liens. Seller further agrees to remove any exceptions or
encumbrances to title which are voluntarily created by, under or through Seller
after the Effective Date without Purchaser’s consent (if requested, such
consent shall not be unreasonably withheld or delayed). The term “Permitted Exceptions” shall mean: the specific
exceptions (excluding exceptions that are part of the promulgated title
insurance form) in the Title Commitment that the Title Company has not agreed
to remove from the Title Commitment as of the end of the Title and Survey
Review Period and that Seller is not required to remove as provided above;
matters created by, through or under Purchaser; items shown on the Survey which
have not been removed as of the end of the Inspection Period (or if Purchaser
does not obtain a new or updated Survey, all matters that a current, accurate
survey of the Property would show); real estate taxes not yet due and payable;
rights of tenants under the Leases as tenants only; rights of tenants or
licensees under License Agreements as tenants or licensees only.


 


Section 5.4                            Delivery of Title Policy at
Closing. In the event that the Title Company does not
issue at Closing, or unconditionally commit at Closing to issue, to Purchaser,
an owner’s title policy in accordance with the Title Commitment, insuring
Purchaser’s title to the Property in the amount of the Purchase Price, subject
only to the standard exceptions and exclusions from coverage contained in such
policy and the Permitted Exceptions (the “Title Policy”),
Purchaser shall have the right to terminate this Agreement, in which case the
Earnest Money shall be


 


12

















 


immediately returned to
Purchaser and the parties hereto shall have no further rights or obligations,
other than those that by their terms survive the termination of this Agreement.


 


ARTICLE 6

OPERATIONS AND RISK OF LOSS


 


Section 6.1                            Ongoing Operations. From the Effective Date through Closing:


 


6.1.1                 Hotel
Operations. Seller shall operate or cause to be operated
the Hotel in compliance with the Management Agreement and the existing budget
and in substantially the same manner in which it operated the Hotel prior to
the Effective Date. Subject to seasonal differences, market conditions and
events beyond Seller’s reasonable control, Seller shall continue to take or
cause to be taken Advance Bookings, to maintain and replenish sufficient levels
of Inventory to operate the Hotel in generally the same manner as prior to the
Effective Date and to otherwise promote the Hotel in generally the same manner
as prior to the Effective Date.


 


6.1.2                 Service
Contracts and License Agreements. Seller will
perform its material obligations under the Service Contracts and License
Agreements.


 


6.1.3                 New
Contracts. Except as provided in Section 6.1.5,
Seller will not enter into any contract that will be an obligation affecting
the Property subsequent to the Closing, except Advance Bookings and contracts
entered into in the ordinary course of business that are terminable without
cause and without the payment of any termination penalty on not more than 30
days’ prior notice.


 


6.1.4                 Maintenance
of Improvements; Removal of Personal Property. Subject to Section 6.2 and Section
6.3, Seller shall maintain all Improvements substantially in their present
condition (ordinary wear and tear and casualty excepted) and in a manner
consistent with Seller’s maintenance of the Improvements during Seller’s period
of ownership. Seller will not remove any Tangible Personal Property except as
may be required for necessary repair or replacement, and replacement shall be
of approximately equal quality and quantity as the removed item of Tangible
Personal Property.


 


6.1.5                 License
Agreements, Convention Center Lease. Seller will not
amend or terminate any existing License Agreement or the Convention Center
Lease or enter into any new License Agreement without providing Purchaser (a)
all relevant supporting documentation, as reasonably determined by Seller,
including, without limitation, tenant financial information to the extent in
Seller’s possession, and (b) as to any such amendment or termination of a
License Agreement or the Convention Center Lease, or new License Agreement
which is to be executed after the expiration of the Inspection Period, Seller’s
request for Purchaser’s approval. If Purchaser’s consent is requested by Seller
as to any amendment or termination of a License Agreement or the Convention
Center Lease, or as to a new License Agreement, Purchaser agrees to give Seller
written notice of approval or disapproval of a proposed amendment or
termination of a License Agreement or the Convention Center Lease, or new
License Agreement within five


 


13

















 


business
days after Purchaser’s receipt of the items in Section 6.1.5(1) and Section
6.1,5(2). If Purchaser does not respond to Seller’s request within such
time period, then Purchaser will be deemed to have approved such amendment,
termination or new License Agreement. Purchaser’s approval rights and
obligations will vary depending on whether the request for approval from Seller
is delivered to Purchaser before or after the expiration of the Inspection Period,
as follows:


 


(1)                             With respect to a request for approval
delivered by Seller to Purchaser before the expiration of the Inspection
Period, Purchaser’s consent shall not be required. Moreover, whether or not
Purchaser consents to an amendment or termination of a License Agreement or the
Convention Center Lease, or the entering into of a new License Agreement,
Seller may amend or terminate a License Agreement or the Convention Center
Lease, or enter into a new License Agreement at anytime prior to the expiration
of the Inspection Period; however, if Purchaser does not consent to same or is
not deemed to have approved same, and if Seller elects to amend or terminate a
License Agreement or the Convention Center Lease, or enter into a new License
Agreement notwithstanding Purchaser’s failure to approve same, then Purchaser
may, at the time Seller notifies Purchaser of the execution of said amendment,
termination or new License Agreement, elect to terminate this Agreement and
receive a return of the Earnest Money; provided that if Purchaser does not
elect to terminate within five days after said notification from Seller, then
Purchaser shall have waived its right to terminate pursuant to this Section
6.1.5.


 


(2)                         With respect to a request for approval
delivered by Seller to Purchaser after the expiration of the Inspection Period,
Purchaser may withhold its consent at its reasonable discretion, and Seller may
not amend or terminate a License Agreement or the Convention Center Lease, or
enter into a new License Agreement without Purchaser’s written consent.


 


Section 6.2                              Damage. If prior to Closing the Property is damaged
by fire or other casualty, Seller will promptly provide Purchaser written
notice thereof (the “Casualty Notice”).


 


6.2.1                  Material. In the event of any Material Damage to or
destruction of the Property or any portion thereof prior to Closing, Purchaser
may, at its option, terminate this Agreement by delivering written notice to
the Seller on or before the expiration of 30 days after the date Seller delivers
the Casualty Notice to Purchaser (and if necessary, the Closing Date shall be
extended to give the Purchaser the full thirty-day period to make such election
and to obtain insurance settlement agreements with Seller’s insurers). Upon any
such termination, the Earnest Money shall be returned to Purchaser and the
parties hereto shall have no further rights or obligations hereunder, other
than those that by their terms survive the termination of this Agreement. If
Purchaser does not so terminate this Agreement within said 30-day period, then
the parties shall proceed under this Agreement and close on schedule (subject
to extension of Closing as provided above), and as of Closing Seller shall
assign to Purchaser without representation or warranty by or recourse against
Seller all of Seller’s rights in and to any insurance proceeds (including any
rent loss insurance applicable to any period on and after the


 


14

















 


Closing
Date) due Seller as a result of such damage or destruction and Purchaser shall
assume full responsibility for all needed repairs, and Purchaser shall receive
a credit at Closing for any deductible amount under such insurance policies.
For the purposes of this Agreement, “Material
Damage” and
“Materially Damaged” means
damage which is reasonably estimated to exceed $5,000,000.00 by a third party
consultant experienced in such estimating and mutually agreed upon by Seller
and Purchaser.


 


6.2.2                      Not Material. If
the Property is not Materially Damaged, then Purchaser shall not have the right
to terminate this Agreement, and Seller shall, at its option, either (a) repair
the damage before the Closing in a manner reasonably satisfactory to Purchaser
(and if necessary, Seller may extend the Closing Date up to 30 days to complete
such repairs), or (b) assign to Purchaser without representation or warranty by
or recourse against Seller all of Seller’s rights in and to any insurance
proceeds (including rent loss insurance applicable to any period after the Closing
Date) due Seller as a result of such damage or destruction and Purchaser shall
assume full responsibility for all needed repairs, and Purchaser shall receive
a credit at Closing for any deductible amount.


 


Section 6.3                              Condemnation. If proceedings in eminent domain are
instituted with respect to the Property or any portion thereof, Purchaser may,
at its option, by written notice to Seller given within ten days after Seller
notifies Purchaser of such proceedings (and if necessary the Closing Date shall
be automatically extended to give Purchaser the full ten-day period to make
such election), either: (a) terminate this Agreement, in which case the Earnest
Money shall be immediately returned to Purchaser and the parties hereto shall
have no further rights or obligations, other than those that by their terms
survive the termination of this Agreement, or (b) proceed under this Agreement,
in which event Seller shall, at the Closing, assign to Purchaser its entire
right, title and interest in and to any condemnation award, and Purchaser shall
have the sole right after the Closing to negotiate and otherwise deal with the
condemning authority in respect of such matter. If Purchaser does not give
Seller written notice of its election within the time required above, then
Purchaser shall be deemed to have elected option (b) above.


 


Section 6.4                            Hotel Employees; Manager. Purchaser covenants and agrees to retain
Manager as Purchaser’s manager of the Hotel (“Purchaser’s Manager”) after
Closing pursuant to an assumption of the Management Agreement and in any event
for so long as necessary to continue the employment of a sufficient number of
Hotel Employees on such terms and conditions so as to prevent (1) the
application of the U.S. Worker Adjustment and Retraining Notification Act (“WARN Act”), and (2) the occurrence
of a Qualifying Event (defined below) for any Hotel Employees. For purposes of
this provision, the term “Qualifying Event”
shall refer to an event resulting in the loss of group health
coverage to a qualified beneficiary as provided under applicable federal or
state law. The provisions of this Section 6.4 shall survive the Closing.


 


Section 6.5                         Assumption of Certain
Agreements, At Closing,
Purchaser shall assume the Convention Center Lease and the Management Agreement,
as well as all Service Contracts and License Agreements.


 


6.5.1               Seller agrees that Seller shall pay and
discharge each and every obligation that Seller has or may have under the
Convention Center Lease and the Management


 


15

















 


Agreement
through the Closing. Seller further agrees to indemnify and hold Purchaser
harmless from and against any and all liabilities, claims, demands and expenses
of any kind or nature which arise or accrue under the Convention Center Lease
and the Management Agreement prior to Closing and Purchaser agrees to indemnify
and hold Seller harmless from and against any and all liabilities, claims,
demands and expenses of any kind of nature which arise or accrue under the
Convention Center Lease and the Management Agreement after Closing.


 


Section 6.6                              Lease Agreement. At Closing, Purchaser and Seller shall enter
into a lease agreement (“Lease Agreement”) relating to Seller’s lease of Suite
1401 in the Property, the form of which shall be negotiated during the
Inspection Period. Certain essential terms of such Lease Agreement are set
forth on Exhibit H attached hereto.


 


ARTICLE 7

CLOSING


 


Section 7.1                            Closing. The consummation of the transaction
contemplated herein (“Closing”) shall
occur on the Closing Date at the offices of Escrow Agent (or such other
location as may be mutually agreed upon by Seller and Purchaser). All Earnest
Money shall be applicable to the  Purchase
Price. Funds from Purchaser at Closing shall be deposited into and held by
Escrow Agent in a closing escrow account with a bank satisfactory to Purchaser
and Seller. Upon satisfaction or completion of all closing conditions and
deliveries, the parties shall direct Escrow Agent to immediately record and
deliver the closing documents to the appropriate parties and make disbursements
according to the closing statements executed by Seller and Purchaser.


 


Section 7.2                           Conditions to Parties’
Obligation to Close. In addition
to all other conditions set forth herein, the obligation of Seller, on the one
hand, and Purchaser, on the other hand, to consummate the transactions
contemplated hereunder are conditioned upon the following:


 


7.2.1              Representations and
Warranties. The other party’s
representations and warranties contained herein shall be true and correct in
all material respects as of the Effective Date and the Closing Date, except for
representations and warranties made as of, or limited by, a specific date,
which will be true and correct in all material respects as of the specified
date or as limited by the specified date;


 


7.2.2              Deliveries. As of the Closing Date, the other party shall
have tendered all deliveries to be made at Closing; and


 


7.2.3              Actions, Suits, etc. There shall exist no pending or threatened
actions, suits, arbitrations, claims, attachments, proceedings, assignments for
the benefit of creditors, insolvency, bankruptcy, reorganization or other
proceedings, against the other party that would materially and adversely affect
the operation or value of the Property or the other party’s ability to perform
its obligations under this Agreement.


 


7.2.4           Marriott Consent. As of the Closing Date, (a) Purchaser shall
have received a consent from Manager with respect to the Management Agreement
(the


 


16

















 


“Marriott Consent”), which Marriott Consent shall provide for either an assumption by
Purchaser of all obligations and liabilities of Seller under or with respect to
the Management Agreement from and after the Closing Date and a full release of
Seller from all obligations and liabilities with respect to the Management
Agreement from and after the Closing Date at no cost or expense to Seller, or
the termination as of the Closing Date of the Management Agreement at no cost
or expense to Seller, and Purchaser, at Purchaser’s expense, shall enter into a
new management agreement with Manager in accordance with Section 10.02D of the
Management Agreement. Purchaser shall submit the information required under
Section 10.02A and 10.02B of the Management Agreement to Manager within ten
days following the Effective Date and Seller shall submit same to Manager.
Seller shall use commercially reasonable efforts to obtain the Marriott Consent
as soon as possible after the Effective Date.


 


So
long as a party is not in default hereunder, if any condition to such party’s
obligation to proceed with the Closing hereunder has not been satisfied as of
the Closing Date (or such earlier date as is provided herein), subject to any
applicable notice and cure periods provided in Section 10.1 and Section
10.2, such party may, in its sole discretion, terminate this Agreement by
delivering written notice to the other party on or before the Closing Date (or
such earlier date as is provided herein), in which event the Earnest Money
shall be returned to Purchaser so long as Purchaser is not in default
hereunder, or elect to close (or to permit any such earlier termination
deadline to pass) notwithstanding the non-satisfaction of such condition, in
which event such party shall be deemed to have waived any such condition. In
the event such party elects to close (or to permit any such earlier termination
deadline to pass), notwithstanding the non-satisfaction of such condition, said
party shall be deemed to have waived said condition, and there shall be no
liability on the part of any other party hereto for breaches of representations
and warranties of which the party electing to close had knowledge at the
Closing.


 


Section 7.3                          Seller’s Deliveries in Escrow. As of or prior to the Closing Date, Seller
shall deliver in escrow to Escrow Agent the following:


 


7.3.1              Deed. A special warranty deed in the form of Exhibit
B hereto (warranting title only against any party claiming by, through or
under Seller) in form acceptable for recordation under the law of the state
where the Property is located and including a list of Permitted Exceptions to
which the conveyance shall be subject, executed and acknowledged by Seller,
conveying to Purchaser Seller’s interest in the Real Property (the “Deed”);


 


7.3.2              Bill of Sale, Assignment and
Assumption. A Bill of Sale,
Assignment and Assumption in the form of Exhibit C attached hereto (the “Assignment”), executed and acknowledged by Seller,
vesting in Purchaser, without warranty, Seller’s right, title and interest in
and to the property described therein free of any claims, except for the
Permitted Exceptions to the extent applicable;


 


7.3.3           FIRPTA. A Foreign Investment in Real Property Tax
Act affidavit in the form of Exhibit D hereto executed by Seller;


 


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7.3.4           Assignment and Assumption of Convention Center Lease/Estoppel. An assignment and assumption of the
Convention Center Lease, together with an Estoppel Certificate from Landlord
thereunder pursuant to Section 10.7(1) thereof;


 


7.3.5           Assignment and Assumption of Management Agreement. An assignment and assumption of the
Management Agreement as of Closing;


 


7.3.6           Municipal Utility District Notice. A notice regarding
The Woodlands Metro Center Municipal Utility District;


 


7.3.7           Authority. Evidence of the existence, organization and
authority of Seller and of the authority of the persons executing documents on
behalf of Seller reasonably satisfactory to the underwriter for the Title
Policy;


 


7.3.8           Vehicles. Title to all vehicles owned by Seller, free
and clear of all liens;


 


7.3.9           Notices to Lessees/Third Parties. A notice to all
lessees and third parties of the subject sale; and


 


7.3.10     Audit Letter. The Audit Letter in the form negotiated by
Seller and Purchaser during the Inspection Period.


 


7.3.11     Lease Agreement. The Lease Agreement in the form negotiated
by Seller and Purchaser during the Inspection Period.


 


7.3.12     Tenant Estoppels. Tenant Estoppel Certificates signed by
tenants under the Tenant Leases and the tenant under the Urban Retreat Lease,
each of which is dated no earlier than ten (10) business days prior to Closing
and which (a) identifies the lease in question and states that the lease is in
full force and effect and, (b) states the date through which rentals have been
paid and the amount of monthly rent payable under such lease, (c) states the
amount of the security deposit, if any, outstanding for such lease, (d) states
the date of commencement of the term of the lease, (e) states the nature of any
amendments or modifications of the lease, (f) states to the best of tenant’s
knowledge, no defaults or state of facts which with the passage of time or
notice (or both) would constitute a default, exists under the Lease, or
identifying any such defaults, events or conditions claimed by the tenant to
exist, and (g) to the best of tenant’s knowledge, no set offs, recoupments,
estoppels, claims or considerations exist against Landlord.


 


7.3.13     Additional
Documents. Any additional documents, certifications and/or affidavits
that Escrow Agent or the Title Company may reasonably require for the proper consummation
of the transaction contemplated by this Agreement (provided, however, other
than Seller’s delivery of a so-called owner’s or seller’s affidavit in favor of
the Title Company in form reasonably acceptable to the Title Company and
Seller, no such additional document shall expand any obligation, covenant,
representation or warranty of Seller or result in any new or additional
obligation, covenant, representation or warranty of Seller under this Agreement
beyond those expressly set forth in this Agreement); and 


 


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Section 7.4                          Purchaser’s Deliveries in Escrow. As of or prior to
the Closing Date, Purchaser shall deliver in escrow to Escrow Agent the
following:


 


7.4.1               Bill of Sale, Assignment and
Assumption. The Assignment, executed and acknowledged by
Purchaser;


 


7.4.2               Assignment and Assumption of
Convention Center Lease. An assignment and assumption of the
Convention Center Lease prior to Closing;


 


7.4.3               Assignment and Assumption of
Management Agreement. An assignment and assumption of the
Management Agreement as of Closing;


 


7.4.4               Municipal Utility District Notice. A notice regarding The Woodlands Metro
Center Municipal Utility District;


 


7.4.5               Authority. Evidence of the existence, organization and
authority of Purchaser and of the authority of the persons executing documents
on behalf of Purchaser reasonably satisfactory to the underwriter for the Title
Policy; and


 


7.4.6               Lease Agreement. The Lease Agreement in the form negotiated
by Seller and Purchaser during the Inspection Period.


 


7.4.7               Additional Documents. Any additional documents that Seller, Escrow
Agent or the Title Company may reasonably require for the proper consummation
of the transaction contemplated by this Agreement (provided, however, no such
additional document shall expand any obligation, covenant, representation or
warranty of Purchaser or result in any new or additional obligation, covenant,
representation or warranty of Purchaser under this Agreement beyond those
expressly set forth in this Agreement).


 


Section 7.5                          Closing Statements. As of or prior to the Closing Date, Seller
and Purchaser shall deposit with Escrow Agent executed closing statements
consistent with this Agreement in the form required by Escrow Agent and
approved by Purchaser and Seller.


 


Section 7.6                          Purchase Price. At or before 3:00 p.m. Houston, Texas time
on the Closing Date, Purchaser shall deliver to Escrow Agent the Purchase
Price, less the Earnest Money that is applied to the Purchase Price, plus or
minus applicable prorations, in immediate, same-day U.S. federal funds wired
for credit into Escrow Agent’s escrow account, which funds must be delivered in
a manner to permit Escrow Agent to deliver good funds to Seller or its designee
on the Closing Date (and, if requested by Seller, by wire transfer); in the
event that Escrow Agent is unable to deliver good funds to Seller or its
designee on the Closing Date, then the closing statements and related
prorations will be revised as necessary.


 


Section 7.7                          Possession. Seller shall deliver possession of the
Property to Purchaser at the Closing subject only to the Permitted Exceptions.


 


Section 7.8                          Delivery of Books and Records. Promptly after the
Closing, Seller shall deliver to the offices of Manager (or release to Manager
if in Manager’s possession) or to the Real Property to the extent in Seller’s
or Manager’s possession or control: License Agreements;


 


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Advance Bookings; Rooms Ledger; Guest Ledger; maintenance records and
warranties; plans and specifications; licenses, permits and certificates of
occupancy; copies or originals of all books and records of account, contracts,
and copies of correspondence with tenants and suppliers; all  advertising
materials; booklets; and keys.


 


Section 7.9                          Notice to Vendors. Seller and Purchaser shall each execute at
Closing, and Purchaser shall deliver to each vendor promptly after the Closing,
a notice regarding the sale in form reasonable acceptable to Seller and
Purchaser or such other form as may be required by applicable state law.


 


Section 7.10                    Liquor Licenses. The parties acknowledge that all alcoholic
beverage licenses necessary to operate the restaurants, bars and lounges
presently located within the Hotel are held by Manager and that Manager will
continue to hold such licenses after Closing.


 


ARTICLE 8

PRORATIONS, DEPOSITS. COMMISSIONS


 


Section 8.1                          Prorations. At Closing, the following items shall be
prorated as of the date of Closing with all items of income and expense for the
Property being borne by Purchaser from and after (and including) the date of
Closing, except as provided otherwise herein: income and rents (“Rents”) that have been collected by Seller as of
Closing; fees and assessments; revenue, prepaid expenses and obligations under
Service Contracts; real and personal ad valorem taxes and standby fees (if any)
(“Taxes”); any assessments by
private covenant for the then-current calendar year of Closing; the Rooms
Ledger; and the Petty Cash, Guest Ledger and Accounts Receivable (each as
defined and as specified below). Specifically, the following shall apply to
such prorations:


 


8.1.1               Taxes. If Taxes for the year of Closing are not
known or cannot be reasonably estimated, Taxes shall be prorated based on Taxes
for the year prior to Closing. Any additional taxes relating to the year of
Closing and thereafter arising out of the consummation of the transactions
contemplated by this Agreement, shall be apportioned between Seller and
Purchaser effective as of Closing and paid by Purchaser when due and payable,
and Purchaser shall receive a credit at Closing for Seller’s apportioned share.


 


8.1.2               Utilities. Purchaser shall take all steps necessary to
effectuate the transfer of all  utilities to its name as of the
Closing Date, and where necessary, post deposits with the utility companies.
Seller shall use reasonable efforts to ensure that all utility meters are read
as of the Closing Date. Seller shall be entitled to recover any and all
deposits held by any utility company as of the Closing Date.


 


8.1.3               Rents. Purchaser will receive a credit for the
prorated amount (as of 12:01 a.m. of the Closing Date) of all Rents previously
paid to or collected by Seller and attributable to any period following
Closing. Rents are “Delinquent” when
they were due prior to the Closing Date, and payment thereof has not been made
on or before the Closing Date. Delinquent Rents will not be prorated. All sums
collected by Purchaser from and after Closing from each tenant under a License
Agreement will be applied first


 


20

















 


to then to current amounts owed by such tenant to Purchaser with
respect to periods from and after the Closing Date, and then to Delinquent
Rents owed by such tenant to Seller. Any sums due Seller received by Purchaser
will be promptly remitted to Seller, but not more frequently than twice
monthly. Purchaser shall not have an exclusive right to collect any sums due
Seller from tenants under the License Agreements and Seller hereby retains the
right to pursue any tenant under the License Agreements for any sums due such
Seller for periods attributable to Seller’s ownership of the Property; provided,
however, Seller (a) shall be required to notify Purchaser in writing of Seller’s
intention to commence or pursue any legal proceedings; (b) shall only be
permitted to commence or pursue legal proceedings after the date which is three
months after Closing; and (c) shall not be permitted to commence or pursue any
legal proceedings against any tenant seeking eviction of such tenant or the
termination of such tenant’s License Agreement. Purchaser acknowledges that
Seller has advised that the tenant under the Urban Retreat Lease has been in
default from time to time in the past twelve (12) months.


 


8.1.4               Rooms Ledger. The “Rooms
Ledger” (being the final night’s room revenue for Hotel rooms
occupied as of 12:01 a.m. on the Closing Date exclusive of the charges on the
Guest Ledger (as hereafter defined) shall be shared equally by Seller and Purchaser.
Guest charges for food, beverage, telephone and similar room charges charged in
the ordinary course of business (the “Guest
Ledger”) before or as of 12:01 a.m. local time on the Closing
Date shall be retained by Seller and guest charges on the Guest Ledger after
12:01 a.m. local time on the Closing Date shall be credited to Purchaser.


 


8.1.5               Prepaid Expenses or
Revenues; Accounts Receivable; Reserves. Seller shall receive a credit for any prepaid
cash expenses for goods or services to be provided from and after the Closing
Date. Seller shall pay, at or before Closing, all other account and trade
payables then accrued with respect to the Property. Purchaser shall receive a
credit against the Purchase Price for the total of (a) prepaid rents, (b)
prepaid room receipts and deposits, function receipts and deposits and other
reservation receipts and deposits, and (c) unforfeited security deposits held
by Seller payable to a tenant under any License Agreement or payable to a
vendor under any Service Contract accepted by Purchaser hereunder. At Closing,
Seller shall receive a credit for the following: (1) all petty cash funds on
hand in connection with the guest operations at the Property as of 12:01 a.m.
local time on the Closing Date (the “Petty Cash”);
and (2) the accounts receivables for the Property actually billed to payors
(other than the final night’s room revenue and the Guest Ledger) as of 12:01
a.m. local time on the Closing Date (the “Accounts
Receivables”). The credit to Seller for the Petty Cash and
Accounts Receivables shall be calculated as follows: (A) for Petty Cash, the
actual amount of petty cash on hand, and (B) for the Accounts Receivables, a
percentage of the total amount of Accounts Receivables (as shown on the records
of the Property for Accounts Receivables) which percentage shall be agreed upon
by the parties prior to the expiration of the Inspection Period. Seller shall
assign to Purchaser at Closing all of Seller’s right, title and interest in and
to (x) the FF&E Reserve under the Management Agreement and (y) the Reserve
under the Convention Center Lease.


 


8.1.6               Retail and Other Taxes. Seller shall pay or cause to be paid prior to
delinquency all retail sales (as distinguished from any tax on the sale of any
Tangible


 


21

















 


Personal Property or Intangible Personal Property effected pursuant to
this Agreement), occupancy and liquor taxes and like impositions with respect
to periods up to but not including the date of Closing, and thereafter
Purchaser shall solely be responsible for all such retail sales, occupancy and
liquor taxes and like impositions accruing from and after the Closing Date.
Purchaser shall be liable for any retail sales or use tax imposed with respect
to the sale of any Tangible Personal Property or Intangible Personal Property
effected pursuant to this Agreement, if any, and Purchaser shall indemnify,
defend and hold harmless Seller from and against any and all such taxes, which
indemnification obligation shall survive the Closing.


 


8.1.7               Hotel Employees. Periodic employee compensation, accrued
vacation pay and other employee benefits, with the assistance of Manager, shall
be prorated as of 12:01 a.m. local time on the Closing Date based on
compensation, pay and benefits accrued as of that time.


 


8.1.8               Gift Certificates: Purchaser shall receive a credit at Closing
in the amount of any “Gift Certificates” issued by Seller for free or reduced
rate room charges which have not been redeemed as of the date of Closing, and
Seller shall furnish Purchaser with detailed records of all Gift Certificates
issued by Seller including a statement identifying the amount of each Gift
Certificate and an identification of all holders of such Gift Certificates and
such other reasonable information as Purchaser may request.


 


8.1.9               Management Fees, Other Operating
Expenses and Convention Center Lease Rent: To the extent not otherwise expressly
provided for in this Section 8.1, Seller and Purchaser agree that
management fees due to Manager, and other operating expenses of the Property,
including the rent due under the Convention Center Lease, shall be prorated as
of 12:01 a.m. on the Closing Date. A final adjustment with respect to such
items shall be made as provided in Section 8.3 of this Agreement.


 


Section 8.2                          Closing Costs. Closing costs shall be allocated between
Seller and Purchaser in accordance with Section 1.2.


 


Section 8.3                          Final Adjustment After Closing. If final bills are
not available or cannot be issued prior to Closing for any item being prorated
under Section 8.1, then Purchaser and Seller agree to allocate such
items on a fair and equitable basis as soon as such bills are available, final
adjustment to be made as soon as reasonably possible after the Closing.
Payments in connection with the final adjustment shall be due within 60 days
following the Closing Date. All such rights and obligations shall survive the
Closing.


 


Section 8.4                          Hotel Sales Tax Liabilities. By no later than
one hundred twenty (120) days after the Closing Date, Seller shall obtain and
furnish Purchaser with a satisfactory certificate in a form that would preclude
any successor liability for Purchaser by reason of acquiring Seller’s hotel
business for hotel sales, use and occupancy taxes, it being deemed that a
certificate of no tax due shall be sufficient. Seller agrees that it is
responsible for paying all hotel sales, use or occupancy taxes attributable to
operations of the Property prior to Closing.


 


22

















 


Section 8.5                          Commissions. Seller and Purchaser each represent and
warrant to the other that no real estate brokerage commission is payable to any
person or entity in connection with the transaction contemplated hereby, other
than to Jones Lang LaSalle Americas, Inc. (“Seller’s Broker”),
whose commission will be paid by Seller pursuant to a separate agreement, and
each agrees to and does hereby indemnify and hold the other harmless against
the payment of any commission to any other person or entity claiming by,
through or under Seller or Purchaser, as applicable. This indemnification shall
extend to any and all claims, liabilities, costs and expenses (including
reasonable attorneys’ fees and litigation costs) arising as a result of such
claims and shall survive the Closing or earlier termination of this Agreement.


 


Section 8.6                          Safe Deposit Boxes. On the Closing Date, Seller shall make (or
cause to be made) available to Purchaser at the Property all receipts and
agreements in Seller’s or Manager’s possession or control relating to all safe
deposit boxes in use at the Property, other than safes or lockboxes, if any,
located inside individual guest rooms in the Property. Purchaser shall be responsible
from and after the Closing Date for all safe deposit boxes in use at the
Property and the contents thereof. Purchaser shall indemnify, defend and hold
harmless Seller and its agents and representatives from any loss, liability,
claim, cost or expense (including reasonable attorney’s fees) to the extent
relating to any such safety deposit box arising or attributable to the period
from and after the Closing Date. Seller shall indemnify, defend and hold
harmless Purchaser and its agents and representatives from any loss, liability,
claim, cost or expense (including reasonable attorney’s fees) to the extent
relating to any such safety deposit box arising or attributable to the period
prior to the Closing Date. If either Seller or Purchaser should elect, as part
of the Closing, they shall jointly, with each holder of any such safety deposit
boxes, inventory the contents of such safety deposit boxes and seek to have the
holder thereof confirm to Seller and Purchaser, in writing, its contents. The
provisions of this Section 8.5 shall survive the Closing.


 


Section 8.7                          Inventory of Baggage. The representatives of Seller and of
Purchaser shall prepare an inventory of baggage at the Property as of 12:00
noon local time on the Closing Date (which inventory of baggage shall be
binding on all parties thereto) of (a) all luggage, valises and trunks checked
or left in the care of the Property by guests then or formerly occupying the
Property, (b) parcels, laundry, valet packages and other property of guests
checked or left in the care of the Property by guests then or formerly
occupying the Property (excluding, however, property in Property safe deposit
boxes), and (c) all items contained in the “lost and found” of the Property.
Purchaser shall be responsible from and after the Closing Date for all baggage
and other items listed in such inventory of baggage. Purchaser shall indemnify,
defend and hold harmless Seller and its agents and representatives from any
loss, claim, liability, cost or expense (including reasonable attorneys’ fees)
to the extent relating to guest baggage, packages and other property of guests
checked or left in the care of the Property by guests then or formerly
occupying the Property to the extent evidenced on the agreed inventory or
arising or attributable to the period from and after the Closing Date, and
Seller shall indemnify, defend and hold harmless Purchaser harmless from and
against any loss, claim, liability, cost or expense (including reasonable
attorneys’ fees) arising out of or with respect to any guest baggage, packages
and other property of guests checked or left in the care of the Property prior
to the Closing Date by guests then or formerly occupying the Property to the
extent not evidenced on the agreed inventory. The provisions of this Section
8.6 shall survive the Closing.


 


23

















 


ARTICLE 9

REPRESENTATIONS AND WARRANTIES


 


Section 9.1                          Seller’s Representations and Warranties. Seller represents and warrants to Purchaser
that:


 


9.1.1                  Organization and Authority. Seller has been duly organized, is validly
existing, and is in good standing in the state in which it was formed. Seller
has the full right and authority and, except for the Marriott Consent, has
obtained any and all consents required to enter into this Agreement and to
consummate or cause to be consummated the transactions contemplated hereby.
Upon receipt of the Marriott Consent, this Agreement, and all of the documents
to be delivered by Seller at the Closing will be, authorized and properly
executed and constitute, or will constitute, as appropriate, the valid and
binding obligation of Seller, enforceable in accordance with their terms.


 


9.1.2                Conflicts and Pending Actions. Upon receipt of the Marriott Consent, to
Seller’s knowledge there is no agreement to which Seller is a party or that is
binding on Seller which is in conflict with this Agreement, and no other
consent, notice or approval of any person, entity, or governmental authority is
required with respect to (i) the execution and delivery of this Agreement and
any document pursuant hereto by Seller, or (ii) the consummation by Seller of
the transactions contemplated hereby or any document pursuant thereto, or (iii)
the performance by Seller of its respective obligations under this Agreement or
any document pursuant hereto. The execution, delivery and performance of this
Agreement and any document pursuant hereto by Seller and the consummation of
the transactions contemplated hereby and thereby by Seller do not (i) violate
any law, order, rule or regulation binding on Seller, (ii) violate any
provision of the limited liability company agreement of Seller, (iii) violate any
provision of any other organizational document of Seller, or (iv) result in the
creation of any lien upon any of the Property. Seller has not been served with
any process or legal filing concerning any action or proceeding against Seller
or the Property, and to Seller’s knowledge there is no action or proceeding
pending or threatened against Seller or relating to the Property, which
challenges or impairs Seller’s ability to execute or perform its obligations
under this Agreement, or which, if adversely determined, would have a material
adverse effect on the operation of the Property or the financial condition of the
Property.


 


9.1.3            Bankruptcy. Seller has not made a general assignment for
the benefit of creditors, become insolvent or filed a petition for voluntary
bankruptcy or filed a petition or answer seeking reorganization or an
arrangement or composition, extension or readjustment of its indebtedness or
consented, in any creditors’ proceeding, to the appointment of a receiver or
trustee of Seller or the Property or any part thereof or been named in an
involuntary bankruptcy proceeding, and to Seller’s knowledge, no such actions
are contemplated or have been threatened.


 


9.1.4            Service Contracts/License Agreements and other Leases. To Seller’s knowledge, the lists of Service
Contracts and License Agreements to be delivered to Purchaser pursuant to this
Agreement are correct and complete as of the date of their


 


24

















 


delivery. To Seller’s knowledge, there are no outstanding obligations
for commissions, tenant improvements or other tenant concessions with respect
to the License Agreements. To Seller’s knowledge, no event has occurred which,
with notice or the passage of time (or both) would constitute a breach or
default by any party to any of the Service Contracts the License Agreements,
the Convention Center Lease, and any of the Tenant Leases. Provided with
respect to the Urban Retreat Lease, Seller is not in default thereunder.


 


9.1.5                             Notices from Governmental
Authorities. To Seller’s knowledge, it has not received,
nor to Seller’s knowledge has Manger received, from any governmental authority
written notice of any material violation of any laws applicable (or alleged to
be applicable) to the Real Property, or any part thereof, that has not been
corrected, except as may be reflected by the Property Documents or otherwise
disclosed in writing to Purchaser.


 


9.1.6                            Condemnation. To Seller’s knowledge, it has not received
written notice from any condemning authority of, nor does Seller have any
knowledge of, any pending or threatened condemnation action or eminent domain
proceeding affecting any portion of the Property.


 


9.1.7                            Personal Property. Seller owns, or will own upon the transfer
of same as required under Section 7.3.5 above, the Tangible Personal
Property and Intangible Personal Property, free and clear of all liens, claims,
and encumbrances except for the Permitted Exceptions to the extent applicable.


 


9.1.8                            Taxes. To Seller’s knowledge, all taxes related to
the ownership, use or income generated by the Property, including, without
limitation, sales and use taxes (other than those sales taxes, if any, arising
from the sale of the Property from Seller to Purchaser), hotel/motel occupancy
taxes and real and personal property taxes that are due and payable by Seller
as of the Closing Date, or are due and payable by Seller as a result of the
transactions contemplated by this Agreement, or are applicable to any period
prior to Closing, have been paid in full (or will be provided for at the
Closing pursuant to the provisions of Section 8.1.6 above), and all
required reports and returns relating thereto have been, or will be, timely
filed.


 


9.1.9                            Prohibited Persons and
Transactions. Neither Seller nor any of its affiliates,
nor any of their respective partners, members, shareholders or other equity
owners, and none of their respective employees, officers, directors,
representatives or agents is, nor will they become, a person or entity with
whom U.S. persons or entities are restricted from doing business under
regulations of the Office of Foreign Asset Control (“OFAC”)
of the Department of the Treasury (including those named on OFAC’s Specially
Designated Nationals and Blocked Persons List) or under any statute, executive
order (including the September 24, 2001, Executive Order Blocking Property and
Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or
Support Terrorism), or other governmental action and is not and will not engage
in any dealings or transactions or be otherwise associated with such persons or
entities.


 


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9.1.10       Hotel Employees.
Seller has no Employees at the Hotel and to Seller’s knowledge, all Hotel
Employees are employees of Manager. To Seller’s knowledge, no union is
presently serving as a collective bargaining agent for any Hotel Employees.


 


9.1.11       Permits. To Seller’s knowledge, a
true, correct and complete list of all Permits is attached hereto as Exhibit “F”
and true, correct and complete copies of the Permits have been or shall be
provided to Purchaser pursuant to Section 4.2 hereof. From and after the date
hereof, Seller will not enter into or obtain any new Permits or modify or terminate
any existing Permits, without Purchaser’s prior written consent.


 


9.1.12       Material Contracts. To Seller’s
knowledge, a true, correct and complete list of all Service Contracts is
attached hereto as Exhibit “G” and Seller has or shall provide complete copies
of the Service Contracts to Purchaser pursuant to Section 4.2 hereof.


 


9.1.13       Financial Statements. To Seller’s
knowledge, the financial statements delivered by Seller to Purchaser are
complete, accurate and fairly represent the results of the operation and the
financial condition of the Hotel for the time period covered by such financial
statements.


 


9.1.14       No Known Title Defects or Exceptions.
To Seller’s actual knowledge, except as described in the Title Commitment,
there are no unrecorded or undisclosed easements, liens, encumbrances,
covenants, conditions, restrictions, instruments, or other exceptions which
affect title to the Property (or any portion thereof). Further, Seller has complied
with all the requirements of any outstanding rights of first refusal or options
relating to the Property, any portion thereof, or any interest therein and (i)
with respect to TCID’s right of first refusal under the Convention Center
Lease, such right of first refusal has been waived or deemed waived and no such
right shall exist as of Closing regarding the subject transaction (although
such right shall continue to exist for subsequent sales and transfers as
contemplated by Article 37 of the Convention Center Lease); and (ii) with
respect to Manager’s right of offer to purchase under the Management Agreement,
Seller rejected Manager’s Offer (as defined in the Management Agreement) and
Seller is free to sell the Property to Purchaser pursuant to the terms hereof
and the subject sale does not violate Section 10.03 of the Management
Agreement.


 


9.1.15       Hazardous Materials. To Seller’s
actual knowledge, there are no known conditions on the Property that are in
violation of any environmental laws, except for hazardous substances used in
the ordinary course of business in compliance with applicable legal
requirements. To Seller’s actual knowledge, there are no pending proceedings or
inquiries by any governmental authorities relating to or arising from any environmental
laws with respect to the Property and Seller has not received written notice from
any governmental authorities threatening any such proceedings or inquiries or concerning
an uncured violation of environmental laws with respect to the Property.


 


9.1.16       No Default Under Convention Center Lease or
Management Agreement. Seller is not in default under the
Convention Center Lease and Seller has given TCID no notice of default under
the Convention Center Lease. Seller is not in


 


26

















 


default
under the Management Agreement and to Seller’s knowledge, with the exception of
Manager’s failure to provide to Seller insurance policies as required under the
Management Agreement, Manager is not in default with respect to any material
obligations under the Management Agreement. Each such Agreement is in full
force and effect.


 


Section
9.2             Purchaser’s
Representations and Warranties. Purchaser represents and
warrants to Seller that:


 


9.2.1         Organization and Authority.
Purchaser has been duly organized and is validly existing as a Delaware
corporation in good standing in the state in which it was formed and is
qualified to do business in the state in which the Real Property is located.
Purchaser has the full right and authority and has obtained any and all
consents required to enter into this Agreement and to consummate or cause to be
consummated the transactions contemplated hereby. This Agreement has been, and
all of the documents to be delivered by Purchaser at the Closing (subject to
satisfaction or waiver of the conditions precedent to Closing herein) will be,
authorized and properly executed and constitute, or will constitute, as
appropriate, the valid and binding obligation of Purchaser, enforceable in
accordance with their terms.


 


9.2.2         Conflicts and Pending Action.
Subject to obtaining the Marriott Consent, there is no agreement to which
Purchaser is a party or to Purchaser’s knowledge binding on Purchaser which is
in conflict with this Agreement and no other consent, notice or approval of any
person, entity, or governmental authority is required with respect to (i) the
execution and delivery of this Agreement and any document pursuant hereto by
Purchaser, or (ii) the consummation by Purchaser of the transactions
contemplated hereby or any document pursuant thereto, or (iii) the performance
by Purchaser of its respective obligations under this Agreement or any document
pursuant hereto. The execution, delivery and performance of this Agreement and
any document pursuant hereto by Purchaser and the consummation of the
transactions contemplated hereby and thereby by Purchaser do not (i) violate
any law, order, rule or regulation binding on Purchaser, (ii) violate any
provision of the limited liability company agreement of Purchaser, (iii)
violate any provision of any other organizational document of Purchaser. There
is no action or proceeding pending or, to Purchaser’s knowledge, threatened
against Purchaser which challenges or impairs Purchaser’s ability to execute or
perform its obligations under this Agreement.


 


9.2.3         Prohibited Persons and Transactions.
Neither Purchaser nor any of its affiliates, nor any of their respective
partners, members, shareholders or other equity owners, and none of their
respective employees, officers, directors, representatives or agents is, nor
will they become, a person or entity with whom U.S. persons or entities are
restricted from doing business under regulations of OFAC of the Department of
the Treasury (including those named on OFAC’s Specially Designated Nationals
and Blocked Persons List) or under any statute, executive order (including the
September 24, 2001, Executive Order Blocking Property and Prohibiting
Transactions with Persons Who Commit, Threaten to Commit, or Support
Terrorism), or other governmental action


 


27

















 


and
is not and will not engage in any dealings or transactions or be otherwise
associated with such persons or entities.


 


Section
9.3             Survival
of Representations and Warranties.
The representations and warranties set forth in this Article 9 are
made as of the Effective Date and are remade as of the Closing Date and shall
not be deemed to be merged into or waived by the instruments of Closing, but
shall survive the Closing for a period of nine (9) months (the “Survival Period”). Terms such as “to Seller’s knowledge,” “to the best of Seller’s knowledge,” “to the Seller’s actual
knowledge” or like phrases mean the actual present and conscious awareness or
knowledge of Alex Sutton and Dan Leverett (collectively, “Seller’s
Representatives”), without any duty of inquiry or investigation;
provided that so qualifying Seller’s knowledge shall in no event give rise to
any personal liability on the part of Seller’s Representatives, or any of them,
or any other officer or employee of Seller, on account of any breach of any
representation or warranty made by Seller herein; and provided, further, no
knowledge of Manager not otherwise in the actual present and conscious
knowledge of Seller’s Representatives shall be imputed to Seller’s
Representatives or Seller. Said terms do not include constructive knowledge, imputed
knowledge, or knowledge Seller or such persons do not have but could have
obtained through further investigation or inquiry. No broker, agent, or party
other than Seller is authorized to make any representation or warranty for or
on behalf of Seller. Each party shall have the right to bring an action against
the other on the breach of a representation or warranty hereunder, but only on
the following conditions: (a) the party bringing the action for breach first
learns of the breach after Closing and files such action within the Survival
Period, and (b) neither party shall have the right to bring a cause of action
for a breach of a representation or warranty unless the damage to such party on
account of such breach (individually or when combined with damages from other
breaches) equals or exceeds $25,000.00. Neither party shall have any liability
after Closing for the breach of a representation or warranty hereunder of which
the other party hereto had knowledge as of Closing. Notwithstanding any other
provision of this Agreement, any agreement contemplated by this Agreement, or
any rights which Purchaser might otherwise have at law, equity, or by statute,
whether based on contract or some other claim, Purchaser agrees that any
liability of Seller to Purchaser will be limited to $1,500,000.00; provided,
however, there shall be no cap or limit on liability with respect to Section
9.1.1 and Section 9.1.2 or any intentional misrepresentation of Seller. The
provisions of this Section 9.3 shall survive the Closing. Any breach of
a representation or warranty that occurs prior to Closing shall be governed by Article
10.


 


ARTICLE 10

DEFAULT AND REMEDIES


 


Section
10.1           Seller’s Remedies. If Purchaser fails
to consummate the purchase of the Property pursuant to this Agreement or
otherwise defaults on its obligations hereunder at or prior to Closing for any
reason except failure by Seller to perform hereunder, or if prior to Closing
any one or more of Purchaser’s representations or warranties are breached in
any material respect, and such default or breach is not cured by the earlier of
the third (3rd) business day after written notice thereof from Seller or the
Closing Date (Seller hereby agreeing to give such written notice to Purchaser
within two business days after Seller first learns of any such default or
breach by Purchaser, except no notice or cure period shall apply if Purchaser
fails to consummate the purchase of the Property hereunder), Seller shall be
entitled, as its sole remedy (except as


 


28

















 


provided
in Section 4.9, Section 8.4, Section 10.3 and Section
10.4 hereof), to terminate this Agreement and recover the Earnest Money as
liquidated damages and not as penalty, in full satisfaction of 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 such damages to be certain. Notwithstanding
anything in this Section 10.1 to the contrary, in the event of Purchaser’s
default or a termination of this Agreement, Seller shall have all remedies
available at law or in equity in the event Purchaser or any party related to or
affiliated with Purchaser is asserting any claims or right to the Property that
would otherwise delay or prevent Seller from having clear, indefeasible and
marketable title to the Property, In all other events Seller’s remedies shall
be limited to those described in this Section 10.1 and Section 4.9,
Section 8.4, Section 10.3 and Section 10.4 hereof. If
Closing is consummated, Seller shall have all remedies available at law or in
equity in the event Purchaser fails to perform any obligation of Purchaser
which expressly survives the Closing under this Agreement, IN NO EVENT SHALL
PURCHASER’S DIRECT OR INDIRECT PARTNERS, SHAREHOLDERS, OWNERS OR AFFILIATES,
ANY OFFICER, DIRECTOR, EMPLOYEE OR AGENT OF THE FOREGOING, OR ANY AFFILIATE OR
CONTROLLING PERSON THEREOF HAVE ANY PERSONAL LIABILITY FOR ANY CLAIM, CAUSE OF
ACTION OR OTHER LIABILITY ARISING OUT OF OR RELATING TO THISAGREEMENT OR THE
PROPERTY, WHETHER BASED ON CONTRACT, COMMON LAW, STATUTE, EQUITY OR OTHERWISE.


 


Section 10.2          Purchaser’s Remedies. If Seller fails
to consummate the sale of the Property pursuant to this Agreement or otherwise
defaults on its obligations hereunder at or prior to Closing for any reason
except failure by Purchaser to perform hereunder, or if prior to Closing any
one or more of Seller’s representations or warranties are breached in any
material respect, and such default or breach is not cured by the earlier of the
third (3rd) business day after written notice thereof from Purchaser or the
Closing Date (Purchaser hereby agreeing to give such written notice to Seller
within two business days after Purchaser first learns of any such default or
breach by Seller, except no notice or cure period shall apply if Seller fails
to consummate the sale of the Property hereunder), Purchaser shall elect, as
its sole remedy, one of the following three (3) options: to (a) terminate this
Agreement by giving Seller timely written notice of such election prior to or
at Closing and receive a return of the Earnest Money, or (b) enforce specific
performance to consummate the sale of the Property hereunder, or (c) waive said
failure or breach and proceed to Closing without any reduction in the Purchase
Price. Notwithstanding anything herein to the contrary, Purchaser shall be
deemed to have elected to terminate this Agreement if Purchaser fails to
deliver to Seller written notice of its intent to file a claim or assert a
cause of action for specific performance against Seller on or before ten
business days following the scheduled Closing Date or, having given such
notice, fails to file a lawsuit asserting such claim or cause of action in the
county in which the Property is located within two months following the
scheduled Closing Date. Purchaser’s remedies shall be limited to those
described in this Section 10.2 and Section 8.4, Section 9.3,
Section 10.3 and Section 10.4 hereof. If Closing is consummated,
Purchaser shall have all remedies available at law or in equity in the event
Seller fails to perform any obligation of Seller which expressly survives the
Closing under this Agreement. IN NO EVENT SHALL SELLER’S DIRECT OR INDIRECT
PARTNERS, SHAREHOLDERS, OWNERS OR AFFILIATES, ANY OFFICER, DIRECTOR, EMPLOYEE
OR AGENT OF THE FOREGOING, OR ANY AFFILIATE OR CONTROLLING PERSON


 


29

















 


THEREOF
HAVE ANY PERSONAL LIABILITY FOR ANY CLAIM, CAUSE OF ACTION OR OTHER LIABILITY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE PROPERTY, WHETHER BASED ON
CONTRACT, COMMON LAW, STATUTE, EQUITY OR OTHERWISE.


 


Section 10.3           Attorneys’ Fees. In the event
either party hereto employs an attorney in connection with claims by one party
against the other arising from the operation of this Agreement, the
non-prevailing party shall pay the prevailing party all reasonable fees and
expenses, including attorneys’ fees, incurred in connection with such claims.


 


Section 10.4           Other Expenses. If this Agreement
is terminated due to the default of a party, then the defaulting party shall
pay any fees or charges due to Escrow Agent for holding the Earnest Money as
well as any escrow cancellation fees or charges and any fees or charges due to
the Title Company for preparation and/or cancellation of the Title Commitment.


 


ARTICLE 11

DISCLAIMERS, RELEASE AND INDEMNITY


 


Section
11.1           Disclaimers
by Seller. Except as expressly set forth in this Agreement and
any document executed by Seller and delivered to Purchaser at Closing, it is
understood and agreed that Seller and Seller’s agents or employees have not at
any time made and are not now making, and they specifically disclaim, any
warranties, representations or guaranties of any kind or character, express or
implied, with respect to the Property, including, but not limited to,
warranties, representations or guaranties as to (a) matters of title (other
than Seller’s special warranty of title to be contained in the Deed), (b)
environmental matters relating to the Property or any portion thereof,
including, without limitation, the presence of Hazardous Materials in, on,
under or in the vicinity of the Property or any fact or condition existing
regarding the presence of, testing for, or remediation of, mildew, mold or mold
spores on the Property, (c) geological conditions, including, without
limitation, subsidence, subsurface conditions, water table, underground water
reservoirs, limitations regarding the withdrawal of water, and geologic faults and
the resulting damage of past and/or future faulting, (d) whether, and to the
extent to which the Property or any portion thereof is affected by any stream
(surface or underground), body of water, wetlands, flood prone area, flood
plain, floodway or special flood hazard, (e) drainage, (f) soil conditions,
including the existence of instability, past soil repairs, soil additions or
conditions of soil fill, or susceptibility to landslides, or the sufficiency of
any undershoring, (g) the presence of endangered species or any environmentally
sensitive or protected areas, (h) zoning or building entitlements to which the
Property or any portion thereof may be subject, (i) the availability of any
utilities to the Property or any portion thereof including, without limitation,
water, sewage, gas and electric, (j) usages of adjoining property, (k) access
to the Property or any portion thereof, (1) the value, compliance with the
plans and specifications, size, location, age, use, design, quality,
description, suitability, structural integrity, operation, title to, or
physical or financial condition of the Property or any portion thereof, or any
income, expenses, charges, liens, encumbrances, rights or claims on or
affecting or pertaining to the Property or any part thereof, (m) the condition
or use of the Property or compliance of the Property with any or all past,
present or future federal, state or local ordinances, rules, regulations or
laws, building, fire or zoning ordinances, codes or other similar laws, (n) the
existence or non-existence of underground storage tanks, surface impoundments,
or landfills,


 


30

















 


(o) any other matter
affecting the stability and integrity of the Property, (p) the potential for
further development of the Property, (q) the merchantability of the Property or
fitness of the Property for any particular purpose, (r) the truth, accuracy or
completeness of the Property Documents, (s) tax consequences, or (t) any other
matter or thing with respect to the Property.


 


Section
11.2              Sale “As
Is, Where Is”. Purchaser acknowledges and agrees that upon
Closing, Seller shall sell and convey to Purchaser and Purchaser shall accept
the Property “AS IS, WHERE IS, WITH ALL FAULTS,” except to the extent expressly provided otherwise in this
Agreement and any document executed by Seller and delivered to Purchaser at
Closing, Except as expressly set forth in this Agreement and any document
executed by Seller and delivered to Purchaser at Closing, Purchaser has not relied
and will not rely on, and Seller has not made and is not liable for or bound
by, any express or implied warranties, guarantees, statements, representations or
information pertaining to the Property or relating thereto (including
specifically, without limitation, Property information packages distributed
with respect to the Property) made or furnished by Seller, or any property
manager, real estate broker, agent or third party representing or purporting to
represent Seller, to whomever made or given, directly or indirectly, orally or
in writing. Purchaser represents that it is a knowledgeable, experienced and
sophisticated purchaser of real estate and that, except as expressly set forth
in this Agreement and any document executed by Seller and delivered to Purchaser
at Closing, it is relying solely on its own expertise and that of Purchaser’s
consultants in purchasing the Property and shall make an independent
verification of the accuracy of any documents and information provided by
Seller. Purchaser will conduct such inspections and investigations of the
Property as Purchaser deems necessary, including, but not limited to, the
physical and environmental conditions thereof, and shall rely upon same. By
failing to terminate this Agreement prior to the expiration of the Inspection
Period, Purchaser acknowledges that Seller has afforded Purchaser a full
opportunity to conduct such investigations of the Property as Purchaser deemed
necessary to satisfy itself as to the condition of the Property and the
existence or non-existence or curative action to be taken with respect to any
Hazardous Materials on or discharged from the Property and any fact or
condition existing regarding the presence of, testing for, or remediation of,
mildew, mold or mold spores on the Property, and will rely solely upon same and
not upon any information provided by or on behalf of Seller or its agents or
employees with respect thereto, other than such representations, warranties and
covenants of Seller as are expressly set forth in this Agreement and any
document executed by Seller and delivered to Purchaser at Closing. Upon
Closing, Purchaser shall assume the risk that adverse matters, including, but
not limited to, adverse physical or construction defects or adverse
environmental, health or safety conditions, may not have been revealed by
Purchaser’s inspections and investigations. Purchaser hereby represents and
warrants to Seller that: (a) Purchaser is represented by legal counsel in
connection with the transaction contemplated by this Agreement; and (b)
Purchaser is purchasing the Property for business, commercial, investment or
other similar purpose and not for use as Purchaser’s residence. Purchaser
waives any and all rights or remedies it may have or be entitled to, deriving
from disparity in size or from any significant disparate bargaining position in
relation to Seller.


 


Section
11.3              Seller Released from Liability. Purchaser
acknowledges that it will have the opportunity to inspect the Property during
the Inspection Period, and during such period, observe its physical
characteristics and existing conditions and the opportunity to conduct such
investigation and study on and of the Property and adjacent areas as Purchaser
deems necessary,


 


31

















 


and Purchaser hereby FOREVER
RELEASES AND DISCHARGES Seller from all responsibility and liability, including
without limitation, liabilities under the Comprehensive Environmental Response,
Compensation and Liability Act Of 1980 (42 U.S.C. Sections 9601 et seq.),
as amended (“CERCLA”), the Resource
Conservation and Recovery Act (42 U.S.C. Section 9601 et seq.), as amended, and
the Oil Pollution Act (33 U.S.C. Section 2701 et seq.), regarding the
condition, valuation, salability or utility of the Property, or its suitability
for any purpose whatsoever (including, but not limited to, with respect to the
presence in the soil, air, structures and surface and subsurface waters, of
Hazardous Materials or other materials or substances that have been or may in the
future be determined to be toxic, hazardous, undesirable or subject to
regulation and that may need to be specially treated, handled and/or removed
from the Property under current or future federal, state and local laws,
regulations or guidelines, and any structural and geologic conditions,
subsurface soil and water conditions and solid and hazardous waste and
Hazardous Materials on, under, adjacent to or otherwise affecting the Property)
and any fact or condition existing regarding the presence of, testing for, or
remediation of, mildew, mold or mold spores on the Property. Purchaser further
hereby WAIVES (and by Closing this transaction will be deemed to have WAIVED)
any and all objections and complaints (including, but not limited to, federal,
state and local statutory and common law based actions, and any private right
of action under any federal, state or local laws, regulations or guidelines to
which the Property is or may be subject, including, but not limited to, CERCLA)
concerning the physical characteristics and any existing conditions of the
Property. Purchaser further hereby assumes the risk of changes in applicable
laws and regulations relating to past, present and future environmental
conditions on the Property and the risk that adverse physical characteristics
and conditions, including, without limitation, the presence of Hazardous
Materials or other contaminants, including mold or mold spores, may not have
been revealed by its investigation. The waiver and release contained in this Section
11.3, however, shall not apply to any breach of Seller’s express
representations or warranties set forth in Section 9.1, but subject in
all respects to Section 9.3, and, further, nothing contained is this Section
11.3 is intended to or shall be deemed to release any claims which
Purchaser may have against any potentially liable party other than Seller with
respect to any of the matters covered in this Section 11.3, and Seller
hereby assigns, on a non-exclusive basis, any right, remedy, claim or cause of
action which Seller may have against any such other potentially liable party
with respect to any of the matters covered in this Section 11.3.


 


Section
11.4           “Hazardous Materials”
Defined. For purposes hereof, “Hazardous
Materials” means “Hazardous
Material,” “Hazardous Substance,” “Pollutant or Contaminant,”
and “Petroleum” and
“Natural Gas Liquids,” as
those terms are defined or used in Section 101 of CERCLA, and any other
substances regulated because of their effect or potential effect on public
health and the environment, including, without limitation, PCBs, lead paint,
asbestos, urea formaldehyde, radioactive materials, putrescible materials, and
infectious materials.


 


Section
11.5           Indemnity. The
parties agree to indemnify, defend and hold each other harmless of and from any
and all third party liabilities, claims, demands, and expenses of any kind or
nature which, with respect to Seller, arise or accrue prior to Closing and
which, with respect to Purchaser, arise or accrue after Closing and which are
in any way related to the ownership, maintenance, or operation of the Property.


 


32

















 


Section
11.6            Survival.
The terms and conditions of this Article 11 shall expressly survive the
Closing, not merge with the provisions of any closing documents and shall be
deemed to be incorporated into the Deed.


 


Purchaser
acknowledges and agrees that the disclaimers and other agreements set forth
herein are an integral part of this Agreement and that Seller would not have
agreed to sell the Property to Purchaser for the Purchase Price without the
disclaimers and other agreements set forth above.


 


ARTICLE 12

MISCELLANEOUS


 


Section
12.1            Parties
Bound; Assignment. This Agreement, and the terms, covenants, and
conditions herein contained, shall inure to the benefit of and be binding upon
the heirs, personal representatives, successors, and assigns of each of the
parties hereto. Purchaser may assign its rights under this Agreement upon the
following conditions: (a) the assignee of Purchaser must be an entity
controlling, controlled by, or under common control with Purchaser, (b) all of
the Earnest Money must have been delivered in accordance herewith, (c) the
Inspection Period shall be deemed to have ended, (d) the assignee of Purchaser
shall assume all obligations of Purchaser hereunder, but Purchaser shall remain
primarily liable for the performance of Purchaser’s obligations, (e) a copy of
the fully executed written assignment and assumption agreement shall be
delivered to Seller at least ten days prior to Closing, and (f) the
requirements in Section 12.17 are satisfied.


 


Section
12.2            Headings.
The article, section, subsection, paragraph and/or other headings of this
Agreement are for convenience only and in no way limit or enlarge the scope or
meaning of the language hereof.


 


Section
12.3            Invalidity
and Waiver. If any portion of this Agreement is held invalid or
inoperative, then so far as is reasonable and possible the remainder of this
Agreement shall be deemed valid and operative, and, to the greatest extent
legally possible, effect shall be given to the intent manifested by the portion
held invalid or inoperative. The failure by either party to enforce against the
other any term or provision of this Agreement shall not be deemed to be a waiver
of such party’s right to enforce against the other party the same or any other
such term or provision in the future.


 


Section
12.4            Governing
Law. This Agreement shall, in all respects, be governed,
construed, applied, and enforced in accordance with the law of the state in
which the Real Property is located.


 


Section
12.5            Survival.
The provisions of this Agreement that contemplate performance after the Closing
and the obligations of the parties not fully performed at the Closing (other
than any unfulfilled closing conditions which have been waived or deemed waived
by the other party) shall survive the Closing and shall not be deemed to be
merged into or waived by the instruments of Closing.


 


Section
12.6            Entirety
and Amendments. This Agreement embodies the entire agreement
between the parties and supersedes all prior agreements and understandings
relating to


 


33

















 


the
Property. This Agreement may be amended or supplemented only by an instrument
in writing executed by the party against whom enforcement is sought. All
Exhibits attached hereto are incorporated herein by this reference for all
purposes.


 


Section
12.7            Time.
Time is of the essence in the performance of this Agreement.


 


Section
12.8            Confidentiality.
Purchaser shall make no public announcement or disclosure of any information
related to this Agreement to outside brokers or third parties, before the
Closing, without the prior written specific consent of Seller; provided,
however, that Purchaser may, subject to the provisions of Section 4.6,
make disclosure of this Agreement to its Permitted Outside Parties as necessary
to perform its obligations hereunder and as may be required under laws or
regulations applicable to Purchaser.


 


Section
12.9            No
Electronic Transactions. The parties hereby acknowledge and
agree this Agreement shall not be executed, entered into, altered, amended or
modified by electronic means. Without limiting the generality of the foregoing,
the parties hereby agree the transactions contemplated by this Agreement shall
not be conducted by electronic means, except as specifically set forth in the “Notices”
section of this Agreement.


 


Section
12.10          Notices.
All notices required or permitted hereunder shall be in writing and shall be
served on the parties at the addresses set forth in Section 1.3. Any
such notices shall, unless otherwise provided herein, be given or served (a) by
overnight delivery using a nationally recognized overnight courier, (b) by
personal delivery, or (c) by facsimile transmission during normal business
hours with a confirmation copy delivered by another method permitted under this
Section 12.10. Notice given in accordance herewith for all permitted
forms of notice, shall be effective upon the earlier to occur of actual
delivery to the address of the addressee or refusal of receipt by the
addressee. Except for facsimile notices as described above, no notice hereunder
shall be effective if sent or delivered by electronic means. In no event shall
this Agreement be altered, amended or modified by electronic mail or electronic
record. A party’s address may be changed by written notice to the other party;
provided, however, that no notice of a change of address shall be effective
until actual receipt of such notice. Copies of notices are for informational
purposes only, and a failure to give or receive copies of any notice shall not
be deemed a failure to give notice. Notices given by counsel to the Purchaser
shall be deemed given by Purchaser and notices given by counsel to the Seller
shall be deemed given by Seller.


 


Section
12.11          Construction.
The parties acknowledge that the parties and their counsel have reviewed and
revised this Agreement and agree that the normal rule of construction - to the
effect that any ambiguities are to be resolved against the drafting party -
shall not be employed in the interpretation of this Agreement or any exhibits
or amendments hereto.


 


Section
12.12          Calculation
of Time Periods. Unless otherwise specified, in computing any
period of time described herein, the day of the act or event after which the
designated period of time begins to run is not to be included and the last day
of the period so computed is to be included, unless such last day is a
Saturday, Sunday or legal holiday for national banks in the location where the
Property is located, in which event the period shall run until the end of the
next day which is not a Saturday, Sunday, or legal holiday. The last day of any
period of time


 


34

















 


described herein shall be
deemed to end at 5:00 p.m. local time in the state in which the Real Property
is located.


 


Section
12.13          Execution
in Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of such
counterparts shall constitute one Agreement. To facilitate execution of this
Agreement, the parties may execute and exchange by telephone facsimile
counterparts of the signature pages, provided that executed originals thereof are
promptly forwarded to the other party by any of the delivery methods set forth
in Section 12.9 other than facsimile.


 


Section
12.14          No
Recordation. Without the prior written consent of Seller, there
shall be no recordation of either this Agreement or any memorandum hereof, or
any affidavit pertaining hereto, and any such recordation of this Agreement or
memorandum or affidavit by Purchaser without the prior written consent of
Seller shall constitute a default hereunder by Purchaser, whereupon Seller shall
have the remedies set forth in Section 10.1 hereof. In addition to any
such remedies, Purchaser shall be obligated to execute an instrument in
recordable form releasing this Agreement or memorandum or affidavit, and
Purchaser’s obligations pursuant to this Section 12.14 shall survive any
termination of this Agreement as a surviving obligation.


 


Section
12.15          Further
Assurances. In addition to the acts and deeds recited herein and
contemplated to be performed, executed and/or delivered by either party at Closing,
each party agrees to perform, execute and deliver, but without any obligation
to incur any additional liability or expense, on or after the Closing any
further deliveries and assurances as may be reasonably necessary to consummate
the transactions contemplated hereby or to further perfect the conveyance,
transfer and assignment of the Property to Purchaser.


 


Section
12.16          Discharge
of Obligations. The acceptance of the Deed by Purchaser shall be
deemed to be a full performance and discharge of every representation and
warranty made by Seller herein and every agreement and obligation on the part
of Seller to be performed pursuant to the provisions of this Agreement, except
those which are herein specifically stated to survive Closing.


 


Section
12.17          No Third
Party Beneficiary. The provisions of this Agreement and of the
documents to be executed and delivered at Closing are and will be for the
benefit of Seller and Purchaser only and are not for the benefit of any third
party, and accordingly, no third party shall have the right to enforce the
provisions of this Agreement or of the documents to be executed and delivered
at Closing, except that a tenant of the Property may enforce Purchaser’s
indemnity obligation under Section 4.9 hereof.


 


Section
12.18          Reporting
Person. Purchaser and Seller hereby designate the Title Company
as the “reporting person” pursuant to the provisions of Section 6045(e) of the
Internal Revenue Code of 1986, as amended.


 


Section
12.19          Like-Kind
Exchange. Purchaser may consummate the purchase of the Property
as part of a so-called like-kind exchange (the “Exchange”)
pursuant to §1031 of the Internal Revenue Code of 1986, as amended, provided
that (a) Purchaser shall notify Seller in writing no later than ten days before
Closing that it intends to consummate this transaction as


 


35

















 


part
of an Exchange, and shall provide with such notice all material information
relating to the parties and properties to the Exchange; (b) all costs, fees,
and expenses attendant to the Exchange shall be the sole responsibility of
Purchaser, and Purchaser shall indemnify and hold harmless Seller from and
against any such costs, fees, and expenses; (c) the Closing shall not be
delayed or affected by reason of the Exchange nor shall the consummation or
accomplishment of the Exchange be a condition precedent or condition subsequent
to Purchaser’s obligations and covenants under this Agreement; and (d) Seller
shall not be required to acquire or hold title to any real property other than
the Property for purposes of consummating the Exchange. Purchaser agrees to
defend, indemnify and hold Seller harmless from any liability, damages, or
costs, including (without limitation) reasonable attorneys’ fees, that may result
from Seller’s acquiescence to the Exchange. Seller shall not, by this Agreement
or acquiescence to the Exchange, (l) have its rights under this Agreement,
including (without limitation) those that survive Closing, affected or
diminished in any manner or (2) be responsible for compliance with or be deemed
to have warranted to Purchaser that the Exchange in fact complies with §1031 of
the Internal Revenue Code of 1986, as amended. The terms of this Section shall
survive Closing.


 


[SIGNATURE PAGES AND EXHIBITS TO FOLLOW]


 


36

















 


SIGNATURE PAGE TO AGREEMENT OF


PURCHASE AND SALE


BY AND BETWEEN


THE WOODLANDS HOTEL, L.P.


AND


INLAND AMERICAN LODGING ACQUISITION, INC.


 


IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and
year written below.


 


	
  SELLER:

  	
   

  	
  THE
  WOODLANDS HOTEL, L.P.,

  	 

	
   

  	
   

  	
  a Texas limited
  partnership

  	 

	
  Date executed by Seller

  	
   

  	
   

  	 

	
   

  	
   

  	
  By:

  	
  The Woodlands Hotel GP,
  L.L.C.,

  	 

	
                                 ,
  2007

  	
   

  	
   

  	
  a Texas limited liability
  company,

  	 

	
   

  	
   

  	
   

  	
  its sole General Partner

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
  PURCHASER:

  	
   

  	
  INLAND
  AMERICAN LODGING

  	 

	
   

  	
   

  	
  ACQUISITIONS,
  INC.,

  	 

	
  Date executed by Purchaser
  

  	
   

  	
  a Delaware corporation

  	 

	
   

  	
   

  	
   

  	 

	
  8/22/, 2007

  	
   

  	
   

  	 

	
   

  	
   

  	
  By:

  	
  /s/ Marcel Verbaas

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Marcel Verbaas

  	
   

  	 

	
   

  	
   

  	
  Title:

  	
  President

  	
   

  
													



 


37

















 


SIGNATURE PAGE TO AGREEMENT OF


PURCHASE AND SALE


BY AND BETWEEN


THE WOODLANDS HOTEL, L.P.


AND


INLAND AMERICAN LODGING ACQUISITION, INC.


 


IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and
year written below,


 


	
  SELLER:

  	
   

  	
  THE
  WOODLANDS HOTEL, L.P.,

  
	
   

  	
   

  	
  a Texas limited
  partnership

  
	
  Date executed by Seller 

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  The Woodlands Hotel GP,
  L.L.C.,

  
	
  8.22, 2007

  	
   

  	
   

  	
  a Texas limited liability
  company,

  
	
   

  	
   

  	
   

  	
  its sole General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Alexander G. Sutton
  III    

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Alexander G. Sutton III    

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  PURCHASER:

  	
   

  	
  INLAND
  AMERICAN LODGING

  
	
   

  	
   

  	
  ACQUISITIONS,
  INC.,

  
	
  Date executed by Purchaser
  

  	
   

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
                         ,
  2007

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
											



 


38

















 


JOINDER BY ESCROW AGENT


 


Escrow
Agent has executed this Agreement in order to confirm that Escrow Agent shall
hold the Earnest Money required to be deposited under this Agreement and the
interest earned thereto, in escrow, and shall disburse the Earnest Money, and
the interest earned thereon, pursuant to the provisions of this Agreement.


 


	
  Date executed by Escrow
  Agent

  	
   

  	
  STEWART
  TITLE CO  OF

  
	
   

  	
   

  	
  MONTGOMERY
  COUNTY, INC.

  
	
  8-22, 2007

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
          /s/
  Cynthia M. Kojak

  	
   

  
	
   

  	
   

  	
  Name:

  	
     Cynthia M. Kojak

  	
   

  
	
   

  	
   

  	
  Title:

  	
        SR.
  Vice-President

  	
   

  
							



 


39
















 


FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT


 


THIS FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT (the “First Amendment”) is made and entered
into as of the 12th day of September 2007 between THE WOODLANDS HOTEL, L.P., as Seller and INLAND AMERICAN LODGING ACQUISITIONS, INC., as
Purchaser.


 


WITNESSETH:


 


WHEREAS, Seller and Purchaser made and entered into that certain Purchase and
Sale Agreement, dated as of August 22, 2007 (the “Agreement”), with respect to
the sale and purchase of the Woodlands Waterway Marriott Hotel; and


 


WHEREAS, pursuant to the terms of the Agreement, the Inspection Period expires
on September 12, 2007; and


 


WHEREAS, Purchaser and Seller decided to amend the Agreement to extend the
Inspection Period as more particularly hereinafter set forth.


 


NOW, THEREFORE,
in consideration of the mutual terms, provisions, covenants and agreements set
forth herein and in the Agreement, and for other good and valuable
considerations, the receipt and sufficiency of which are hereby acknowledged,
Purchaser and Seller hereby agree to amend the Agreement as follows:


 


1.                                       Defined Terms: Capitalized Terms used herein and not
defined herein shall have the meaning ascribed thereto in the Agreement.


 


2.                                       Inspection Period. Section 1.1.10 of the Agreement is hereby
amended and restated in its entirety to read as follows:


 


1.1.10                                       Inspection Period:   The Period beginning on the Effective Date and
ending on September 14, 2007.


 


3.                                       Amendment. Except as hereby amended and modified the Agreement shall remain in
full force and effect in accordance with the terms thereof.


 


[SIGNATURES
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IN
WITNESS WHEREOF, Purchaser and Seller have executed this First Amendment in
manner and form sufficient to bind them as of this 12th day of
September 2007.


 


	
  SELLER:

  	
  THE
  WOODLANDS HOTEL, L.P.,

  
	
   

  	
  a Texas limited
  partnership

  
	
  Date executed by Seller 

  	
   

  
	
   

  	
  By:

  	
  The Woodlands Hotel GP,
  L.L.C.,

  
	
  September 12, 2007

  	
   

  	
  a Texas limited liability
  company,

  
	
   

  	
   

  	
  its sole General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ DAN B. LEVERETT

  	
   

  
	
   

  	
   

  	
  Name:

  	
  DAN B. LEVERETT

  	
   

  
	
   

  	
   

  	
  Title:

  	
     Vice President

  	
   

  
							



 


 


	
  PURCHASER:

  	
  INLAND
  AMERICAN LODGING

  
	
   

  	
  ACQUISITIONS,
  INC.,

  
	
  Date executed by Purchaser

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
  September 12, 2007

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Edwin Hendriksen

  	
   

  
	
   

  	
  Name:

  	
  Edwin Hendriksen

  
	
   

  	
  Title:

  	
  Senior Vice President

  
					



 


2

















 


SECOND
AMENDMENT TO PURCHASE AND SALE AGREEMENT


 


THIS SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT (the “Second Amendment”) is made and entered
into as of this 14th day of September, 2007 between THE
WOODLANDS HOTEL, L.P., as Seller and INLAND
AMERICAN LODGING ACQUISITIONS, INC., as Purchaser.


 


WITNESSETH:


 


WHEREAS,
Seller and Purchaser made and entered into that certain Purchase and Sale
Agreement dated as of August 22, 2007, as amended by that certain First
Amendment to Purchase and Sale Agreement dated as of September 12, 2007
(together the “Agreement”) with respect to the sale and purchase of the
Woodlands Waterway Marriott Hotel; and


 


WHEREAS,
pursuant to the terms of the Agreement, the Inspection Period expires on
September 14, 2007; and


 


WHEREAS,
Purchaser and Seller have agreed to amend the Agreement to further extend the
Inspection Period as more particularly hereinafter set forth.


 


NOW, THEREFORE,
in consideration of the mutual terms, provisions, covenants and agreements set
forth herein and in the Agreement, and for other good and valuable
considerations, the receipt and sufficiency of which are hereby acknowledged,
Seller and Purchaser hereby agree to further amend the Agreement as follows:


 


1.                                       Defined Terms. Capitalized Terms used herein and not
defined herein shall have the meanings ascribed thereto in the Agreement.


 


2.                                       Inspection Period. Section 1.1.10 of the Agreement is hereby
amended and restated in its entirety to read as follows:


 


1.1.10                                       Inspection Period:   The Period beginning on the
Effective Date and ending on September 19, 2007.


 


3.                                       Amendment. Except as hereby amended and modified, the Agreement shall remain in
full force and effect in accordance with the terms thereof.


 


[SIGNATURES
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IN WITNESS WHEREOF, Purchaser and Seller have executed this Second Amendment in the manner
and form sufficient to bind them as of this 14th day of September, 2007.


 


	
  SELLER:

  	
  THE
  WOODLANDS HOTEL, L.P.,

  
	
   

  	
  a Texas limited
  partnership

  
	
  Date executed by Seller 

  	
   

  
	
   

  	
  By:

  	
  The Woodlands Hotel GP,
  L.L.C.,

  
	
  September 14, 2007

  	
   

  	
  a Texas limited liability
  company,

  
	
   

  	
   

  	
  its sole General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ DAN B. LEVERETT

  	
   

  
	
   

  	
   

  	
  Name:

  	
  DAN B. LEVERETT

  	
   

  
	
   

  	
   

  	
  Title:

  	
     Vice President

  	
   

  
							



 


 


	
  PURCHASER:

  	
  INLAND
  AMERICAN LODGING

  
	
   

  	
  ACQUISITIONS,
  INC.,

  
	
  Date executed by Purchaser

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
  September 14, 2007

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Edwin Hendriksen

  	
   

  
	
   

  	
  Name:

  	
  Edwin Hendriksen

  
	
   

  	
  Title:

  	
  Senior Vice President

  
					



 

















 


THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT


 


THIS THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT (the “Third Amendment”) is made and entered
into as of this 19th day of September, 2007 between THE WOODLANDS HOTEL, L.P., as Seller and INLAND AMERICAN LODGING ACQUISITIONS, INC., as
Purchaser.


 


WITNESSETH:


 


WHEREAS, Seller and Purchaser made and entered into that certain Purchase and
Sale Agreement dated as of August 22, 2007, as amended by that certain First
Amendment to Purchase and Sale Agreement dated as of September 12, 2007, and as
further amended by that certain Second Amendment to Purchase and Sale Agreement
dated as of September September 14, 2007 (collectively the “Agreement”) with
respect to the sale and purchase of the Woodlands Waterway Marriott Hotel; and


 


WHEREAS, pursuant to the terms of the Agreement, the Inspection Period expires
on September 14, 2007; and


 


WHEREAS, Purchaser and Seller have agreed to amend the Agreement to further
extend the Inspection Period as more particularly hereinafter set forth.


 


NOW, THEREFORE, in consideration of the mutual terms, provisions, covenants and
agreements set forth herein and in the Agreement, and for other good and
valuable considerations, the receipt and sufficiency of which are hereby
acknowledged, Seller and Purchaser hereby agree to further amend the Agreement
as follows:


 


1.                                       Defined Terms. Capitalized Terms used herein and not
defined herein shall have the meanings ascribed thereto in the Agreement.


 


2.                                       Inspection Period. Section 1.1.10 of the Agreement is hereby
amended and restated in its entirety to read as follows:


 


1.1.10                                       Inspection Period:    The Period beginning on the Effective Date and
ending on October 1, 2007.


 


3.                                       Amendment. Except as hereby amended and modified, the Agreement shall remain in
full force and effect in accordance with the terms thereof.


 


[SIGNATURES
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IN WITNESS WHEREOF, Purchaser and Seller have executed this Third
Amendment in the manner and form sufficient to bind them as of this 19th day of
September, 2007.


 


	
  SELLER:

  	
  THE
  WOODLANDS HOTEL, L.P.,

  
	
   

  	
  a Texas limited
  partnership

  
	
  Date executed by Seller 

  	
   

  
	
   

  	
  By:

  	
  The Woodlands Hotel GP,
  L.L.C.,

  
	
  September 19, 2007

  	
   

  	
  a Texas limited liability
  company,

  
	
   

  	
   

  	
  its sole General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Alexander G. Sutton III

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Alexander G. Sutton III

  	
   

  
	
   

  	
   

  	
  Title:

  	
  President

  	
   

  
							



 


 


	
  PURCHASER:

  	
  INLAND
  AMERICAN LODGING

  
	
   

  	
  ACQUISITIONS,
  INC.,

  
	
  Date executed by Purchaser

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
  September 19, 2007

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Edwin Hendriksen

  	
   

  
	
   

  	
  Name:

  	
  Edwin Hendriksen

  
	
   

  	
  Title:

  	
  Senior Vice President

  
					



 

















 


FOURTH
AMENDMENT TO PURCHASE AND SALE
AGREEMENT


 


THIS FOURTH AMENDMENT TO PURCHASE AND SALE AGREEMENT (the “Fourth Amendment”) is made and entered
into as of this 1st day of October, 2007 between THE WOODLANDS HOTEL, L.P., as Seller and INLAND AMERICAN LODGING ACQUISITIONS, INC., as
Purchaser.


 


WITNESSETH:


 


WHEREAS, Seller and Purchaser made and entered into that certain Purchase and
Sale Agreement dated as of August 22, 2007, as amended by that certain First
Amendment to Purchase and Sale Agreement dated as of September 12, 2007, as
amended by that certain Second Amendment to Purchase and Sale Agreement dated
as of September 14, 2007 and as further amended by that certain Third Amendment
to Purchase and Sale Agreement dated as of September 19, 2007 (collectively the
“Agreement”) with respect to the sale and purchase of the Woodlands Waterway
Marriott Hotel; and


 


WHEREAS,
pursuant to the terms of the Agreement, the Inspection Period expires on
October 1, 2007; and


 


WHEREAS, Purchaser and Seller have agreed to amend the Agreement to further
extend the Inspection Period as more particularly hereinafter set forth.


 


NOW, THEREFORE, in consideration of the mutual terms, provisions, covenants and
agreements set forth herein and in the Agreement, and for other good and
valuable considerations, the receipt and sufficiency of which are hereby
acknowledged, Seller and Purchaser hereby agree to further amend the Agreement
as follows:


 


1.                                       Defined Terms. Capitalized Terms used herein and not
defined herein shall have the meanings ascribed thereto in the Agreement.


 


2.                                       Inspection Period. Section 1.1.10 of the Agreement is hereby
amended and restated in its entirety to read as follows:


 


1.1.10                                       Inspection Period:   The Period beginning on the
Effective Date and ending on October 28, 2007.


 


3.                                       Amendment. Except as hereby amended and modified, the Agreement shall remain in
full force and effect in accordance with the terms thereof.


 


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IN WITNESS WHEREOF, Purchaser and Seller have executed this Fourth Amendment in the manner
and form sufficient to bind them as of this 1st day of October, 2007.


 


	
  SELLER:

  	
  THE
  WOODLANDS HOTEL, L.P.,

  
	
   

  	
  a Texas limited
  partnership

  
	
  Date executed by Seller 

  	
   

  
	
   

  	
  By:

  	
  The Woodlands Hotel GP,
  L.L.C.,

  
	
  October 1, 2007

  	
   

  	
  a Texas limited liability
  company,

  
	
   

  	
   

  	
  its sole General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Alexander G. Sutton III

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Alexander G. Sutton III

  	
   

  
	
   

  	
   

  	
  Title:

  	
  President

  	
   

  
							



 


 


	
  PURCHASER:

  	
  INLAND
  AMERICAN LODGING

  
	
   

  	
  ACQUISITIONS,
  INC.,

  
	
  Date executed by Purchaser

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
  October 1, 2007

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Edwin Hendriksen

  	
   

  
	
   

  	
  Name:

  	
  Edwin Hendriksen

  
	
   

  	
  Title:

  	
  Senior Vice President

  
					



 

















 


FIFTH AMENDMENT TO PURCHASE AND SALE AGREEMENT


 


THIS FIFTH AMENDMENT TO PURCHASE AND SALE AGREEMENT (the “Fifth Amendment”) is made and entered
into as of this 2nd day of October, 2007 between THE WOODLANDS HOTEL, L.P., as Seller and INLAND AMERICAN LODGING ACQUISITIONS, INC., as
Purchaser.


 


WITNESSETH:


 


WHEREAS, Seller and Purchaser made and entered into that certain Purchase and Sale
Agreement dated as of August 22, 2007, as amended by that certain First
Amendment to Purchase and Sale Agreement dated as of September 12, 2007, as
amended by that certain Second Amendment to Purchase and Sale Agreement dated
as of September 14, 2007, as further amended by that certain Third Amendment to
Purchase and Sale Agreement dated as of September 19, 2007, and as further
amended by that certain Fourth Amendment to Purchase and Sale Agreement dated
as of October 1, 2007 (collectively the “Agreement”) with respect to the sale
and purchase of the Woodlands Waterway Marriott Hotel; and


 


WHEREAS, Seller and Purchaser desire to amend the Agreement in certain respects
as more particularly hereinafter set forth.


 


NOW, THEREFORE, in consideration of the mutual terms,
provisions, covenants and agreements set forth herein and in the Agreement, and
for other good and valuable considerations, the receipt and sufficiency of
which are hereby acknowledged, Seller and Purchaser hereby agree to further
amend the Agreement as follows:


 


1.                                         Defined Terms. Capitalized Terms used herein and not
defined herein shall have the meanings ascribed thereto in the Agreement.


 


2.                                         Closing Date. Section 1.1.11 of the Agreement is hereby
amended and restated in its entirety to read as follows:


 


1.1.11                                   Closing Date:                                                November 15, 2007.


 


3.                                         Earnest Money. Section 3.1 of the Agreement is hereby
deleted in its entirety and replaced with the following:


 


Section
3.1                                      Deposit and Investment of
Earnest Money. Within
two business days after the Effective Date, Purchaser shall deposit the Initial
Earnest Money with Escrow Agent. The parties acknowledge that the Initial
Earnest Money was timely delivered. On or before October 3, 2007, Purchaser
shall deposit the Additional Earnest Money as specified in Section 1.1.4
above, with Escrow Agent. Escrow Agent shall invest the Earnest Money in
government insured interest-bearing accounts satisfactory to Seller and
Purchaser, shall not commingle the Earnest Money with any funds of Escrow Agent
or others, and shall promptly provide Purchaser and Seller with confirmation of
the investments made. Such account shall


 


1

















 


have no penalty for early
withdrawal, and Purchaser accepts all risks with regard to such account.


 


4.                                         Additional Conditions to Close. Section 7.2 of the Agreement is hereby
amended to include the following new subsections 7.2.5, 7.2.6, 7.2.7 and 7.2.8
immediately following subsection 7.2.4:


 


7.2.5                        Property Condition
Assessment. Prior to the Closing
Date, Seller shall cause to be completed the work and repairs set forth on Schedule
1 attached to this Fifth Amendment. If such work is not completed by
Closing, Seller shall escrow at Closing funds necessary to complete such work
and repairs.


 


7.2.6                        Fill Prevention, Control and
Counter Measure Plan. Prior to
the Closing Date, Seller shall have caused to be prepared and filed with the
appropriate governmental authorities a Fill Prevention, Control and Counter
Measure Plan in accordance with applicable law for the 5,000 gallon diesel
above ground storage tank located on the Property.


 


7.2.7                        3.05 Audit Letter. Seller shall have executed a Section 3.05
Audit Letter in the form attached hereto as Schedule 2.


 


7.2.8                        Additional Estoppels Matters. Seller shall cause those matters set forth on
Schedule 3 attached hereto to be completed and shall deliver evidence of
such completion to Purchaser prior to Closing.


 


5.                                         Seller’s Deliveries. Subsection 7.3.13 of Section 7.3 is hereby
amended and restated in its entirety to read as follows:


 


7.3.13                  Additional Documents. (a) Any additional documents which Seller has
agreed to or is required to deliver pursuant to the terms of this Agreement,
and (b) any additional documents, certifications and/or affidavits which Escrow
Agent or the Title Company may reasonably require for the proper consummation
of the transaction contemplated by this Agreement (provided, however, other
than Seller’s delivery of a so-called owner’s or seller’s affidavit in favor of
the Title Company in form reasonably acceptable to the Title Company and
Seller, no such additional document required by the Escrow Agent or Title
Company shall expand any obligation, covenant, representation or warranty of
Seller or result in any new or additional obligation, covenant, representation
or warranty of Seller under this Agreement beyond those expressly set forth in
this Agreement); and


 


6.                                         Accounts Receivable. Section 8.1.5 of the Agreement contemplates
that the credit to Seller for Accounts Receivables shall be the percentage of
the total amount of Accounts Receivables agreed upon by the parties prior to
the expiration of the Inspection Period. This Fifth Amendment confirms that
Purchaser has agreed to pay for 100% of the Accounts Receivables outstanding as
of Closing.


 


2

















 


7.                                         Trademark License Agreement. Attached hereto as Schedule 4 is the
form of Trademark License Agreement agreed upon by the parties as contemplated
in Section 2.1.3 of the Agreement.


 


8.                                         Lease Agreement. Attached hereto as Schedule 5 is the
form of Lease Agreement agreed upon by the parties as contemplated in Section
6.6 of the Agreement.


 


9.                                         Amendments. Except as hereby amended and modified, the Agreement shall remain in
full force and effect in accordance with the terms thereof.


 


[SIGNATURES
APPEAR ON NEXT PAGE]


 


3

















 


IN WITNESS WHEREOF, Purchaser and Seller have executed this Fifth Amendment in the manner
and form sufficient to bind them as of this 2nd day of October, 2007.


 


	
  SELLER:

  	
  THE
  WOODLANDS HOTEL, L.P.,

  
	
   

  	
  a Texas limited
  partnership

  
	
  Date executed by Seller

  	
   

  
	
   

  	
  By:

  	
  The Woodlands Hotel GP,
  L.L.C.,

  
	
  October 2, 2007

  	
   

  	
  a Texas limited liability
  company,

  
	
   

  	
   

  	
  its sole General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Alexander G. Sutton III

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Alexander G. Sutton III

  	
   

  
	
   

  	
   

  	
  Title:

  	
  President

  	
   

  
							



 


 


	
  PURCHASER:

  	
  INLAND
  AMERICAN LODGING

  
	
   

  	
  ACQUISITIONS,
  INC.,

  
	
  Date executed by Purchaser

  	
  a Delaware corporation

  
	
   

  	
   

  
	
  October 2, 2007

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Edwin Hendriksen

  	
   

  
	
   

  	
  Name:

  	
  Edwin Hendriksen

  
	
   

  	
  Title:

  	
  Senior Vice President

  



 


4

















 


SCHEDULE 1


 


PROPERTY CONDITION ASSESSMENT


 


Modify and re-slope soil
areas causing ponding water adjacent to the Convention Center Building.


 


Replace ground light fixtures.


 


Further investigation of
Skybridge intersection point by a licensed structural engineer.*


 


Prep and paint exterior
stairs at the north end of the Convention Center Building.


 


Replace broken sliding door
sidelite glazing at Room 840.


 


Repair active roof/deck
leaks at the northwest side of the Convention Center Building.


 


Repair active roof leak at
the parking garage southwest elevator lobby.


 


Mitigate items of concern
regarding the electrical systems and labeled as “Advisory” in the infrared Scan
Report. **


 


Re-inspect life safety and
fire protection throughout each building. **


 


Re-inspect kitchen hood
ANSUL Systems. **


 


Install lever-type sink
handles at each handicap accessible guestroom.


 


Remove and replace water
damaged interior finishes in the sound room.


 






*                                         Any costs to repair and stabilize the
structural system shall also be paid by Seller (or the funds will be escrowed
at Closing).


 


**                                  Identified costs to remedy this item shall
also be paid by Seller (or the funds will be escrowed at Closing).


 

















 


SCHEDULE
2


 


SELLER’S
AUDIT LETTER


 


[Seller’s
Audit Letter is behind this page.]


 
















 


KPMG LLP


303 E. Wacker Drive


Chicago, IL 60601


 


Date - TBD


 


Ladies and Gentlemen:


 


We are providing this letter in connection with your
audits of the balance sheets of The Woodlands Hotel, LP (the “Partnership”) as
of December 31, 2006, and the related statements of operations, retained
earnings, and cash flows for the year then ended for the purpose of expressing
an opinion as to whether these financial statements present fairly, in all
material respects, the financial position, results of operations, and cash
flows of the Partnership in conformity with U.S. generally accepted accounting
principles.


 


Certain representations in this letter are described
as being limited to matters that are material. Items are considered material,
regardless of size, if they involve an omission or misstatement of accounting
information that, in the light of surrounding circumstances, makes it probable
that the judgment of a reasonable person relying on the information would be
changed or influenced by the omission or misstatement.


 


The Partnership has contracted with Marriott Hotel
Services, Inc. (the “Manager”) to manage the day-to-day operations of The
Woodlands Waterway Marriott Hotel (the “Hotel”), including all accounting
functions. Representations made by the undersigned rely on communications from
the Manager, and phrases such as “knowledge” and “actual knowledge” are made in
reliance on these communications. Representations made by the undersigned are
also made based on the Partnership’s knowledge of Partnership activities.


 


Except as provided in Exhibit A, the undersigned
confirm, to our actual knowledge and belief, the following representations made
to you during your audit:


 


1.                                       The
financial statements referred to above are fairly presented in conformity with
U.S. generally accepted accounting principles.


 


2.                                       We
have made available to Inland American Lodging Acquisitions, Inc. (“Inland”) :
all financial records and related data to the extent the Partnership has, or
has access thereto,


 

















 


3.                                       Except
as disclosed to you in writing, there have been no:


 


a.                                       Circumstances
that have resulted in communications from the Partnership’s legal counsel to
the Partnership reporting evidence of a material violation of securities law or
breach of fiduciary duty, or similar violation by the Partnership or any agent
thereof.


 


b.                                      Communications
from regulatory agencies concerning noncompliance with, or deficiencies in,
financial reporting practices.


 


4.                                       There
are no:


 


a.                                       Violations
or possible violations of laws or regulations, whose effects should be considered
for disclosure in the financial statements or as a basis for recording a loss
contingency.


 


b.                                      Other
liabilities or gain or loss contingencies that are required to be accrued or disclosed
by SFAS No. 5.


 


c.                                       Material
transactions that have not been properly recorded in the accounting records
underlying the financial statements.


 


d.                                      Events
that have occurred subsequent to the balance sheet date and through the date of
this letter that would require adjustment to or disclosure in the financial statements.


 


e.                                       Changes
in internal control over financial reporting or other factors that have occurred
subsequent to the balance sheet date and through the date of this letter that
might significantly affect internal control over financial reporting, including
corrective actions taken by management with regard to significant deficiencies
and material weaknesses.


 


5.                                       We
believe that the effects of the uncorrected financial statement misstatements summarized
in the accompanying schedule are immaterial, both individually and in the aggregate,
to the financial statements taken as a whole.


 


6.                                       We
acknowledge our responsibility for the design and implementation of programs
and controls to prevent, deter and detect fraud for the Partnership. The
Partnership has neither designed nor implemented any programs at the Hotel to
prevent, deter and detect fraud. We understand that the term “fraud” includes
misstatements arising from


 


2

















 


fraudulent financial
reporting and misstatements arising from misappropriation of assets.


 


Misstatements arising
from fraudulent financial reporting are intentional misstatements, or omissions
of amounts or disclosures in financial statements to deceive financial
statement users. Misstatements arising from misappropriation of assets involve
the theft of an entity’s assets where the effect of the theft causes the
financial statements not to be presented in conformity with U.S. generally
accepted accounting principles.


 


7.             Other
than what has been disclosed in Exhibit A, we have no actual knowledge of any fraud
or suspected fraud affecting the entity involving:


 


a.                                       Management,


 


b.                                      Employees
who have significant roles in internal control over financial reporting, or


 


c.                                       Others
where the fraud could have a material effect on the financial statements.


 


8.             We
have no actual knowledge of any allegations of fraud or suspected fraud
affecting the entity received in communications from employees or, former
employees of the Partnership.


 


9.             The
Partnership has no plans or intentions that may materially affect the carrying
value or classification of assets and liabilities.


 


10.           We
have no actual knowledge of any officer or director of the Partnership, or any
other person acting under the direction thereof, having taken any action to
fraudulently influence, coerce, manipulate or mislead you during your
integrated audit.


 


11.           To
our actual knowledge the following have been properly recorded or disclosed in
the financial statements:


 


a.                                       Related
party transactions including sales, purchases, loans, transfers, leasing arrangements,
guarantees, ongoing contractual commitments and amounts receivable from or
payable to related parties.


 


We understand that the
term “related party” refers to affiliates of the enterprise; entities for which
investments are accounted for by the equity method by the enterprise; trusts
for the benefit of employees, such as pension and profit-


 


3

















 


sharing trusts that are
managed by or under the trusteeship of management; principal owners of the
enterprise; its management; members of the immediate families of principal
owners of the enterprise and its management; and other parties with which the
enterprise may deal if one party controls or can significantly influence the
management or operating policies of the other to an extent that one of the
transacting parties might be prevented from fully pursuing its own separate
interests. Another party also is a related party if it can significantly
influence the management or operating policies of the transacting parties or if
it has an ownership interest in one of the transacting parties and can
significantly influence the other to an extent that one or more of the
transacting parties might be prevented from fully pursuing its own separate
interests.


 


b.                                      Guarantees,
whether written or oral, under which the Partnership is contingently liable,
including guarantee contracts and indemnification agreements pursuant to FASB
Interpretation No. 45, Guarantor’s
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others.


 


c.                                       Significant
estimates and material concentrations known to management that are required to
be disclosed in accordance with the AICPA’s Statement of Position (SOP) 94-6, Disclosure of Certain Significant Risks and
Uncertainties.


 


Significant estimates are
estimates at the balance sheet date, which could change materially within the
next year. Concentrations refer to volumes of business, revenues, available
sources of supply, or markets or geographic areas for which it is reasonably
possible that events could occur which would significantly disrupt normal
finances within the next year. Concentrations include material sources of
financing, including off-balance sheet arrangements and transactions with
unconsolidated, limited purpose entities, and contingencies inherent in the
arrangements, that are reasonably likely to affect the continued availability
of liquidity and financing.


 


d.                                      Off-balance
sheet activities, including accounting policies relating to non-consolidation
and revenue recognition. Specifically, for those off-balance sheet activities
in which the Partnership is a sponsor or transferor, the majority owners of the
off-balance sheet vehicle are independent third parties who have made and
maintained a substantive capital investment in the vehicle, control the vehicle
and have substantive risks and rewards of the assets of the vehicle, including
residuals.


 


4

















 


e.                                       Variable
interest entities, and significant variable interests in variable interest entities
in which the Partnership is not deemed the primary beneficiary, pursuant to
FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities (FIN 46R).


 


f.                                         Significant
common ownership or management control relationships requiring disclosure.


 


g.                                      Agreements
to repurchase assets previously sold, including sales with recourse.


 


12.           The
Partnership has satisfactory title to all owned assets.


 


13.           The
Partnership has complied with all aspects of contractual agreements that would
have a material effect on the financial statements in the event of
noncompliance.


 


14.           Receivables
reported in the financial statements represent valid claims against debtors for
sales or other charges arising on or before the balance-sheet date and have
been appropriately reduced to their estimated net realizable value.


 


15.           Debt
securities that have been classified as held-to-maturity have been so
classified due to our intent and ability to hold such securities to maturity.
All other debt securities have been classified as available-for-sale or
trading. Declines in value of debt or equity securities classified as either
available-for-sale or held-to-maturity are considered to be temporary because
we have both the intent and ability to hold these impaired securities for a
sufficient period of time, until maturity if necessary, to allow for their
recovery in market value.


 


16.           The
following information about financial instruments with off-balance-sheet risk
and financial instruments with concentrations of credit risk has been properly
disclosed in the financial statements:


 


a.                                       Extent,
nature, and terms of financial instruments with off-balance-sheet risk;


 


b.                                      The
amount of credit risk of financial instruments with off-balance-sheet credit risk,
and information about the collateral supporting such financial instruments; and


 


c.                                       Significant
concentrations of credit risk arising from all financial instruments and
information about the collateral supporting such financial instruments.


 


5

















 


17.           The
Partnership is responsible for determining the fair value of financial
instruments as required by SFAS No. 107, Disclosures
about Fair Value of Financial Instruments. The amounts disclosed
represent the Partnership’s best estimate of fair value of financial
instruments required to be disclosed under the SFAS No. 107 (and other assets
or liabilities, if separately disclosed). The Partnership also has disclosed
the methods and significant assumptions used to estimate the fair value of
financial instruments.


 


18.           The
Partnership’s reporting units have been appropriately identified in accordance
with SFAS No. 142, Goodwill and Other
Intangible Assets. Provision has been made for any impairment losses
related to goodwill and/or non-amortizable intangible assets.


 


19.           The
Partnership has accounted for asset retirement obligations in accordance with
SFAS No. 143, Accounting for Asset
Retirement Obligations, and FIN 47, Accounting
for Conditional Asset Retirement Obligations, an interpretation of FASB
Statement No. 143 (issued march 2005). All legal obligations
associated with the retirement of tangible long-lived assets have been
recognized. The Partnership recognized the obligations when incurred using
management’s best estimate of fair value.


 


20.           The
Partnership has appropriately grouped long-lived assets together for purposes
of assessing impairment in accordance with SFAS No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets. We have reviewed long-lived assets, including
amortizable intangible assets, to be held and used for impairment whenever
events or changes in circumstances have indicated that the carrying amount of
the assets might not be recoverable. Provision has been made for any material
adjustments to long-lived assets including amortizable intangible assets.


 


21.           We
are responsible for making the fair value measurements and disclosures included
in the financial statements, including determining the fair value of
investments for which a readily determinable fair value does not exist. As part
of fulfilling this responsibility, we have established an accounting and
financial reporting process for determining the fair value measurements and
disclosures, considered the appropriateness of valuation methods, adequately
supported any significant assumptions used, and ensured that the presentation
and disclosure of the fair value measurements are in accordance with U.S.
generally accepted accounting principles. We believe the assumptions and
methods used by us, including those used by specialists engaged by us, are
appropriate in the circumstances and the resulting valuations and disclosures
are reasonable.


 


22.           We
believe that all material expenditures that have been deferred to future
periods will be recoverable.


 


6

















 


23.           All
sales transactions entered into by the Partnership are final and there are no side
agreements with customers, or other terms in effect, which allow for the return
of merchandise, except for defectiveness or other conditions covered by usual
and customary warranties.


 


24.           The
unaudited interim financial information accompanying (presented in Note X to)
the financial statements for the (identify all related periods) has been
prepared and presented in conformity with U.S. generally accepted accounting
principles(4) applicable to interim financial information (and with Item 302(a)
of Regulation S-K). The accounting principles used to prepare the unaudited
interim financial information are consistent with those used to prepare the
audited financial statements.


 


25.           The
Partnership has accounted for its derivatives and hedging activities in accordance
with SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities, and SFAS No. 138, Accounting for Certain Derivative Instruments and
Certain Hedging Activities, an Amendment of SFAS No. 133, and SFAS
No. 149, Amendment of SFAS No. 133 on
Derivative Instruments and Hedging Activities, including the
requirement for contemporaneous documentation of the hedging relationship and
the Partnership’s risk management objective and strategy for entering into the
hedge as well as initial and periodic effectiveness assessments. The estimate
of fair value of derivative instruments is in compliance with EITF Issue 02-03,
Issues Involved in Accounting for Derivative
Contracts Held for Trading Purposes and Contracts Involved in Energy Trading
and Risk Management Activities, including the propriety of
recognized gains and losses at inception of the derivative instruments when
using internal valuation techniques.(35)


 


26.           We
have disclosed to you all accounting policies and practices we have adopted that,
if applied to significant items or transactions, would not be in accordance
with U.S. generally accepted accounting principles (GAAP). We have evaluated
the impact of the application of each such policy and practice, both
individually and in the aggregate, on the Partnership’s current period
financial statements, and the expected impact of each such policy and practice
on future periods’ financial reporting. We believe the effect of these policies
and practices on the financial statements is not material. Furthermore, we do
not believe the impact of the application of these policies and practices will
be material to the financial statements in future periods.


 


27.           Gross
revenue includes only those sales for which the Partnership has acted as a
principal in the transaction, takes title to the products, and has the risks
and rewards of ownership, including the risk of loss for collection, delivery
and returns. Any sales for which the Partnership has acted as an agent or
broker without assuming the risks and rewards of ownership have been reported
on a net basis.


 


7

















 


28.                                 Allocations
of individual partner interests are in accordance with the respective
partnership agreement.


 


Further, we confirm that we are responsible for the
fair presentation in the financial statements of financial position, results of
operations, and cash flows in conformity with U.S. generally accepted
accounting principles.


 


	
  Very truly yours,

  
	
   

  
	
  THE WOODLANDS HOTEL, L.P.,

  
	
  A Texas limited partnership

  
	
   

  
	
  By:

  	
  The Woodlands Hotel GP, L.L.C.

  
	
   

  	
  A Texas limited liability company,

  
	
   

  	
  Its sole General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Alex Sutton, President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  G. Randy Davis, Treasurer

  



 


8

















 


EXHIBIT A


 


Item #7 – In the first
quarter of 2006, the Manager informed the Partnership that several senior
managers, including the general manager, had been discharged for allegations
related to petty cash management and/or misuse of company property.


 


 


[More items may be added before execution]


 

















 


SCHEDULE 3


 


ADDITIONAL ESTOPPELS

(with document numbers)


 


Seller
shall deliver to Purchaser and/or Title Company Estoppel Certificates with
respect to the following documents, executed by the specified parties:


 


	
  Title of Document

  	
   

  	
  Date of

  Document

  	
   

  	
  Parties to

  Provide

  Estoppels

  	
   

  	
  Document

  Number

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Project Lease Agreement

  	
   

  	
  June 29, 2001

  	
   

  	
  Hotel(1)

  	
   

  	
  1091628

  
	
   

  	
   

  	
   

  	
   

  	
  TCID(2)

  	
   

  	
  1090847

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Parking Easement and
  Agreement

  	
   

  	
  June 29,2001

  	
   

  	
  Hotel

  	
   

  	
  1094067

  
	
   

  	
   

  	
   

  	
   

  	
  TCID

  	
   

  	
  1094079

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Meeting Rooms Lease
  Agreement

  	
   

  	
  June 29,2001

  	
   

  	
  Hotel

  	
   

  	
  1091634

  
	
   

  	
   

  	
   

  	
   

  	
  TCID

  	
   

  	
  1091603

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Convention Center Booking
  and Blocking Agreement

  	
   

  	
  June 29, 2001

  	
   

  	
  Hotel

  	
   

  	
  1091808

  
	
   

  	
   

  	
   

  	
   

  	
  TCID

  	
   

  	
  1091779

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Elevated Walkway and
  Easement Agreement

  	
   

  	
  June 29, 2001

  	
   

  	
  Hotel

  	
   

  	
  1091836

  
	
   

  	
   

  	
   

  	
   

  	
  TCID

  	
   

  	
  1091795

  
	
   

  	
   

  	
   

  	
   

  	
  TWLDC(3)

  	
   

  	
  1091839

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Garage Joint Use and
  Easement Agreement

  	
   

  	
  May 13, 2005

  	
   

  	
  Hotel

  	
   

  	
  Seller

  
	
   

  	
   

  	
   

  	
   

  	
  TCDCLP(4)

  	
   

  	
  Seller

  
	
   

  	
   

  	
   

  	
   

  	
  21 Waterway(5)

  	
   

  	
  Seller

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Common Access Driveway
  Easement Agreement

  	
   

  	
  May 13, 2005

  	
   

  	
  Hotel

  	
   

  	
  Seller

  
	
   

  	
   

  	
   

  	
   

  	
  TCID

  	
   

  	
  Seller

  
	
   

  	
   

  	
   

  	
   

  	
  TCDCLP

  	
   

  	
  Seller

  
	
   

  	
   

  	
   

  	
   

  	
  21 Waterway

  	
   

  	
  Seller

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lease Agreement (Urban
  Retreat)

  	
   

  	
  June 24, 2005

  	
   

  	
  Hotel

  	
   

  	
  1095137

  
	
   

  	
   

  	
   

  	
   

  	
  Urban Retreat(6)

  	
   

  	
  1095188

  



 






(1)          The Woodlands Hotel, L.P.


(2)          Town Center Improvement District of Montgomery
County, Texas


(3)          The Woodlands Land Development Company, L.P.


(4)          Town Center Development Company, L.P.


(5)          21 Waterway Holding LLC


(6)          Urban Retreat of the Woodlands, L.L.C.


 

















 


	
  Title of Document

  	
   

  	
  Date of

  Document

  	
   

  	
  Parties to

  Provide

  Estoppels

  	
   

  	
  Document

  Number

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Parking Lot Easement
  Agreement

  	
   

  	
  May 13, 2005

  	
   

  	
  Hotel

  	
   

  	
  1094331

  
	
   

  	
   

  	
   

  	
   

  	
  TWLDC

  	
   

  	
  1094426

  
	
   

  	
   

  	
   

  	
   

  	
  Marriott(7)

  	
   

  	
  1094464

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Limited Access Driveway
  Easement Agreement

  	
   

  	
  March 30, 2007

  	
   

  	
  Hotel

  	
   

  	
  1094073

  
	
   

  	
   

  	
   

  	
   

  	
  Watumull(8)

  	
   

  	
  1094061

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Declaration of Covenants and Restrictions of the Woodlands Commercial
  Owners Association

  	
   

  	
  October 26, 1993

  	
   

  	
  TWCOA(9)

  	
   

  	
  1094103

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Declaration of Covenants and Restrictions for the Woodlands Town
  Center Owners Association

  	
   

  	
  April 12, 1995

  	
   

  	
  TCOA(10)

  	
   

  	
  1094447

  



 






(7)          Marriott Hotel Services, Inc.


(8)          Watumull Woodlands II, LLC


(9)          The Woodlands Commercial Owners Association


(10)    The Town Center Owner’s Association


 

















 


SCHEDULE 4


 


TRADEMARK LICENSE AGREEMENT


 


[Trademark
License Agreement is behind this page.]


 

















 


TRADEMARK LICENSE AGREEMENT


 


THIS TRADEMARK LICENSE AGREEMENT (this “Agreement”) is
dated as of October     , 2007 (the “Commencement Date”), and entered into by and between The Woodlands
Commercial Properties Company, L.P., a Texas Limited Partnership, located at
2201 Timberloch Place, The Woodlands, Texas (the “Licensor”)
and Inland American Lodging Woodlands TRS, L.L.C., a Delaware LLC, located at
390 N. Orange Ave., Suite 1650, Orlando, Florida 32801 (the “Licensee”). Licensee and Licensor are sometimes referred to
herein individually as a “Party” and
collectively as the “Parties.”


 


WHEREAS, Licensor has adopted the mark THE WOODLANDS
WATERWAY® (the “Mark”) and has
extensively used the Mark in connection with its development project commonly
referred to as THE WOODLANDS and based upon that extensive use, Licensor has
developed common law rights in the Mark and has acquired certain federal
registrations for the Mark (such registrations being more particularly
described on Exhibit “A” to this Agreement);


 


WHEREAS, Licensee desires to use the Mark in
connection with the ownership, operation, advertisement and marketing of a
hotel (the “Hotel”) located at 1601 Lake
Robbins Drive, The Woodlands, Texas (“Licensee’s Business”);


 


WHEREAS, Licensor has developed a licensing program
to allow third parties to use the Mark in a limited manner, and in connection
with such program desires to grant to Licensee a license to use the Mark in
connection with Licensee’s Business and in combination with the words “THE
WOODLANDS WATERWAY HOTEL” to identify Licensee’s Business;


 


NOW THEREFORE, in consideration of the covenants and
agreements herein contained and the mutual benefits to be derived therefrom,
the parties hereto do hereby covenant and agree as follows:


 


1.                                       License.  Subject to the terms of this
Agreement, Licensor shall provide to Licensee a nonexclusive, fully-paid and
royalty-free license to use the Mark: (i) in combination with the word “HOTEL”
in the phrase “THE WOODLANDS WATERWAY HOTEL” to identify Licensee’s Business
(and Licensee may also insert the name of the manager of the hotel or a
derivation thereof before “HOTEL” or “THE WOODLANDS WATERWAY HOTEL” provided
that Licensee has obtained a valid license from the manager for use of the
manager’s mark); (ii) in such combination, in connection with the advertising,
promotion and operation of Licensee’s Business, by or on behalf of Licensee or
its manager, including use by third-party agents of Licensee, including, with,
on or in any advertising or promotional materials in print, TV, radio,
Internet, wireless or other advertising in any format or by any medium or
technology now known or later developed, or in, on or through any website owned
by, or operated on behalf of Licensee, its managers or third-party agents or in
any way associated with Licensee’s Business; (iii) in such combination in
publications and public filings; (iv) in such combination in connection with
the sponsorship of events by or on behalf of Licensee’s Business; (v) or
abbreviations thereof in any internet domain names and urls associated with
Licensee’s Business subject to approval of the domain name by Licensor for
trademark control purposes; (vi) in such combination in connection with the
sale of merchandise bearing the Mark or logos incorporating the Mark in such
combination; and (vii) to authorize and sublicense to Licensee’s manager of the
Hotel the right to exercise the rights of this License solely for use in
manager’s role and activities


 


1

















 


in managing, operating,
advertising and promoting the Hotel (collectively the “License”)
solely for Licensee’s use pursuant to this Agreement and subject to the
following conditions:


 


(a)                                  Use of Mark. Licensee (and Licensee’s manager) shall have the right to use the
Mark strictly as provided in Section 1. Licensee’s Business shall be operated
in a manner consistent with the high standards generally associated with THE
WOODLANDS development project. Licensee shall own all domain names and urls it
purchases containing the Mark in combination with “Hotel” subject to the
retained rights of Licensor in the Mark. Licensor agrees that approval for
domain names and urls in Section 1 shall not be unreasonably withheld, and
shall be deemed given, if Licensor does not object in writing to any proposal
for a domain name or url by Licensee within fifteen (15) business days of
submittal by Licensee, and Licensee shall be free to use and add any domain
name extensions (such as .com, .biz, .org) for previously approved internet
domain names and urls.


 


(b)                                 Inspection. All uses of the Mark by Licensee in advertising or promotional
materials, signs, logos, displays or otherwise shall be consistent with the use
of the Mark by Licensor prior to the Commencement Date or otherwise shall be in
a form and manner approved by Licensor. In connection with such approval,
Licensor has the right (but not the obligation) to appoint a designated
representative to inspect, on an annual basis, Licensee’s use of the Mark in
connection with Licensee’s operation of Licensee’s Business upon reasonable
notice by Licensor but only during regular business hours and only if such
inspection does not interfere with the normal operation of Licensee’s Business.
Licensor may then, at its option, prescribe such reasonable changes in the use
of the Mark by Licensee in connection with Licensee’s Business that are
reasonably necessary so that Licensee’s use of the Mark conforms to Licensor’s
quality standards.


 


(c)                                  Rights Limited. The rights to use the Mark granted to
Licensee under the License are limited to the licensed uses described in
Section 1, and such rights do not extend to any other location, business or
project unrelated to Licensee’s Business that Licensee may become involved in
without the express written consent of Licensor.


 


2.                                       Relationship of the Parties. The relationship of Licensee and Licensor
under this Agreement is that of independent parties, each acting in its own
best interests, and notwithstanding anything in this Agreement to the contrary,
no partnership, joint venture, principal-agent or other business relationship
is established or intended hereby between the Parties.


 


3.                                       Term. The term of this Agreement shall commence simultaneously with the
closing of that certain Purchase and Sale Agreement by and between The
Woodlands Hotel, L.P., as Seller and Inland American Lodging Acquisition, Inc.,
as Purchaser, and shall continue for so long as Licensee operates Licensee’s
Business, subject to earlier termination in accordance with Section 4 below
(the “Term”).


 


4.                                       Termination.


 


(a)                                  Termination by Licensor.


 


(i)                                     Notice not Required. Licensor may terminate this Agreement immediately
without notice, if: (A) Licensee applies for or consents to the


 


2

















 


appointment
of a receiver, trustee or liquidator of all or a substantial part of its
assets; (B) Licensee files a voluntary petition in bankruptcy; (C) Licensee
files a petition or an answer seeking reorganization or arrangement with
creditors; (D) a final order, judgment or decree is entered by a court of
competent jurisdiction adjudicating Licensee as bankrupt or insolvent, or
approving a petition seeking reorganization of Licensee or appointing a
receiver, trustee or liquidator of Licensee of all or a substantial part of its
assets; or (E) upon the discontinuation of Licensee’s Business.


 


(ii)                                  Notice Required. Licensor may terminate this Agreement
effective upon delivery of written notice of termination to Licensee if
Licensee violates any of its obligations described in this Agreement and such
violation is not corrected within thirty (30) days after written notice of the
violation is provided to Licensee by Licensor.


 


(b)                                 Termination by Licensee. Licensee may terminate this Agreement at
any time effective thirty (30) days after delivery of written notice of
termination to Licensor.


 


(c)                                  Effect of Termination. Except for termination under Section 4(d),
upon termination of this Agreement, Licensee shall immediately cease using the
Mark, and shall not thereafter use any name, mark or symbol that is identical
to or confusingly similar with the Mark in connection with Licensee’s Business,
and this Agreement shall no longer have any force or effect.


 


(d)                                 Termination by Cessation. The License and this Agreement will be considered
terminated, and Licensee will be free to continue use of the Mark without restrictions
of this Agreement in the event that the following occurs: (i) Licensor ceases to
use the Mark and maintain the registration of the Mark with the United States
Patent and Trademark Office (“USPTO”) or Licensor ceases to operate Licensor’s
business that owns the Mark; and (ii) a Transfer of the Mark (as defined in
Section 12) does not occur. In such event, Licensee will also be free to pursue
all trademark registrations for hotel services and other services and goods
related to Licensee’s Business.


 


5.                                       Maintenance of the Mark. Licensor shall in its discretion, at its
cost, and in good faith maintain the registration of the Mark in the USPTO, but
Licensor reserves the right, in its sole discretion, to discontinue maintenance
of the Mark, it being understood that Licensor owes Licensee no obligation to
maintain the Mark. However, Licensor will provide written notice to Licensee of
its intention to abandon or discontinue use of the Mark, cease the maintenance
of a registration for the Mark with the USPTO or a Transfer of the Mark, thirty
(30) days prior to any such event for the purpose of providing Licensee the
opportunity to take action contemplated in this Agreement to maintain or pursue
protection for its rights related to the Mark and this License. If Licensor
provides such notice of ceasing to maintain the registration for the Mark with
the USPTO without Transfer of the Mark (or, in the event Licensor fails to
provide such notice, in Licensee’s reasonable judgment that Licensor intends to
or has failed to maintain and prosecute the Mark in the USPTO), Licensee may,
upon providing written notice to Licensor, assume such obligations in
connection with such maintenance and prosecution. In the event that Licensor
intends to abandon use of the Mark or discontinue the business of Licensor that
uses the Mark without Transfer of the Mark, Licensor shall provide written
notice of such intention to Licensee at least thirty (30) days prior to such
event to provide Licensee the opportunity to


 


3

















 


protect Licensee’s rights
associated with the Mark. Upon receiving such notice (or, in the event Licensor
fails to provide such notice, in Licensee’s reasonable judgment that Licensor
intends to or has abandoned the Mark) Licensee may, at Licensee’s sole
discretion, cost and expense, assume all responsibilities for maintaining and
prosecuting the Mark, including filing a new application in Licensee’s name if
Licensor has abandoned registration and use of the Mark or discontinued
Licensor’s business without a Transfer of the Mark. Licensor agrees to
cooperate with Licensee and to execute reasonable documents and instruments and
perform reasonable actions as necessary to effect Licensee’s ability to
maintain, prosecute or protect the Mark in the USPTO at Licensee’s cost.


 


6.                                       Infringement; Infringement Suit. Licensee agrees to notify Licensor promptly
of any unauthorized use of or infringement of the Licensed Mark and if
appropriate, Licensee’s intention to take action against such unauthorized use
or infringement, as soon as practically possible after the unauthorized use or
infringement of the Licensed Mark comes to Licensee’s attention. Licensor shall
have the sole initial right and discretion to bring or defend infringement or
unfair competition proceedings based on the Licensed Marks. If Licensor decides
to assert its rights or bring any claim, Licensee agrees, if reasonably requested
by Licensor, to cooperate with Licensor in any such action, including, without
limitation, by joining the action as a party if necessary to maintain standing.
All out-of-pocket expenses, including reasonable attorneys’ fees, expert
witness fees, and court costs, relating to Licensee’s participation in such
infringement action at the request of Licensor, shall be borne solely by
Licensor. Any award, or portion of any award, recovered by Licensor in any such
action or proceeding commenced by Licensor shall belong solely to Licensor,
after recovery by both parties of their respective actual out-of-pocket costs.
To the extent that Licensee shares any costs as a result of such assistance,
Licensee shall share in any recovery, pro-rata in proportion to any costs actually
incurred by Licensee. If Licensor determines not to take any such action with
respect to protecting the Mark, it shall so notify Licensee, who then may take
such action in its own name and at its own expense (or, in the event Licensor
fails to provide such notice or take action within sixty (60) days of Licensee
providing to Licensor notice of such unauthorized use and Licensee’s intention
to take action against such unauthorized use or infringement, Licensee may take
such action at the end of this sixty (60) day period); provided however that
Licensee keeps Licensor informed of the status of Licensee’s activities
regarding such action, and any settlement or other resolution thereof. Licensor
shall cooperate with Licensee or join in any such action at Licensee’s request
and expense, and if necessary assign any chose in action or other right to
Licensee. Any award, or portion of any award, recovered by Licensee in any such
action or proceeding commenced by Licensee as permitted herein shall belong solely
to Licensee, after recovery by both parties of their respective actual
out-of-pocket costs. The parties hereby agree to cooperate with each other in
the conduct or defense of any legal action, and in the negotiations in respect
of any legal action relating to the Mark, and each will provide to the other
all relevant data, information and material in its possession which may be
helpful in such action or negotiation, at the cost and expense of the party
requesting such data, information and material.


 


7.                                       No License Fee: No Royalty Fee. The License granted under this Agreement is
a fully paid and royalty-free license. Licensor shall not be entitled to any
royalties or other remuneration for any uses of the Mark by Licensee as
permitted by Licensor under this Agreement.


 


4

















 


8.                                       Insurance. Licensee shall maintain, or cause to be maintained, comprehensive
liability insurance with the premium thereon fully paid in advance, by and
binding upon some solvent insurance company licensed to do business in the
State of Texas, and with an A.M. Best rating of “A-VIII” or better, affording
minimum protection of not less than One Million and 00/100 Dollars
($1,000,000.00) combined single limit bodily injury and property damage and
shall name Licensor, The Woodlands Operating Company, L.P., and each of such
entities’ respective partners, officers, employees and agents (“Licensor Group”) as additional insureds under the
applicable policy. Insurance maintained by Licensee shall be primary to any
similar type coverage maintained by Licensor. Licensee agrees to maintain a
certificate of insurance on file with Licensor at all times while this
Agreement is in effect.


 


9.                                       INDEMNIFICATION.


 


(a)
BY LICENSEE. LICENSEE AGREES TO FULLY INDEMNIFY, DEFEND AND HOLD
HARMLESS THE LICENSOR GROUP FROM AND AGAINST ANY AND ALL CLAIMS, SUITS,
ACTIONS, DEMANDS, LIABILITIES, LOSSES AND EXPENSES (INCLUDING, WITHOUT
LIMITATION, REASONABLE ATTORNEYS’ FEES AND COSTS OF LITIGATION WHETHER INCURRED
FOR LICENSOR’S PRIMARY DEFENSE OR FOR LICENSOR’S ENFORCEMENT OF ITS INDEMNIFICATION
RIGHTS HEREUNDER) AND ANY FINES, PENALTIES, AND ASSESSMENTS (COLLECTIVELY, “CLAIMS”)
THAT RELATE TO, RESULT FROM, OR ARISE OUT OF (I) ANY MATERIAL BREACH BY
LICENSEE OF ANY PROVISION OF THIS AGREEMENT THAT IS NOT CURED BY LICENSEE
WITHIN THIRTY (30) DAYS OF THE DATE THAT LICENSOR PROVIDES WRITTEN NOTICE TO
LICENSEE OF SUCH BREACH OR MATERIAL BREACH BY LICENSEE OF ANY REPRESENTATION OR
WARRANTY MADE BY LICENSEE IN THIS AGREEMENT; AND (II) ANY CLAIM BROUGHT BY ANY
THIRD PARTY BASED ON ANY USE OF THE MARK BY LICENSEE, OTHER THAN IN EACH CASE
IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT, THAT INFRINGES ON SUCH THIRD
PARTY’S INTELLECTUAL PROPERTY RIGHTS; AND (III) ANY CLAIM FOR PRODUCT LIABILITY
ARISING SOLELY FROM THE DEFECTIVE MANUFACTURE OF PRODUCTS SOLD OR OFFERED BY
LICENSEE USING THE MARK. NOTWITHSTANDING THE FOREGOING AND EXCEPT FOR CLAIMS FOR
PRODUCT LIABILITY, LICENSEE’S INDEMNITY OBLIGATION HEREUNDER SHALL NOT APPLY TO
THE EXTENT ANY SUCH INFRINGEMENT OR VIOLATION IS BASED ON LICENSOR’S USE OF THE
MARK OR LICENSEE’S USE OF THE MARK IN ACCORDANCE WITH THE TERMS OF THE LICENSE
AND THIS AGREEMENT. THIS INDEMNITY SHALL NOT BE EXCLUSIVE OF OTHER REMEDIES
THAT MAY BE SOUGHT BY LICENSOR THIS PROVISION SHALL SURVIVE THE TERMINATION OF
THIS AGREEMENT.


 


(b)
BY LICENSOR. LICENSOR AGREES TO FULLY INDEMNIFY, DEFEND AND HOLD
HARMLESS LICENSEE FROM AND AGAINST ANY AND ALL CLAIMS, SUITS, ACTIONS, DEMANDS,
LIABILITIES, LOSSES AND EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE
ATTORNEYS’ FEES AND COSTS OF LITIGATION WHETHER INCURRED FOR LICENSOR’S PRIMARY
DEFENSE OR FOR LICENSOR’S ENFORCEMENT OF ITS INDEMNIFICATION RIGHTS HEREUNDER)
AND ANY FINES, PENALTIES, AND ASSESSMENTS (COLLECTIVELY, “CLAIMS”) THAT RELATE TO,
RESULT FROM, OR ARISE OUT OF ANY MATERIAL BREACH BY


 


5

















 


LICENSOR OF ANY
REPRESENTATION OR WARRANTY MADE BY LICENSOR IN THIS AGREEMENT, AND (II) ANY
CLAIM OF INTELLECTUAL PROPERTY AND/OR TRADEMARK INFRINGEMENT BROUGHT BY ANY
THIRD PARTY BASED ON ANY USE OF THE MARK BY LICENSOR OR BROUGHT BY ANY THIRD
PARTY BASED ON ANY PERMITTED USE OF THE MARK BY LICENSEE UNDER THIS AGREEMENT.
THIS INDEMNITY SHALL NOT BE EXCLUSIVE OF OTHER REMEDIES THAT MAY BE SOUGHT BY
LICENSEE. THIS PROVISION SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT.


 


10.                                 LIMITATION OF LIABILITY. IN NO EVENT, SHALL EITHER PARTY, OR SUCH
PARTY’S RESPECTIVE OFFICERS, DIRECTORS, SHAREHOLDERS, MANGERS, MEMBERS,
EMPLOYEES OR AFFILIATES BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, INDIRECT,
INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES WHETHER BASED ON BREACH OF
CONTRACT, BREACH OF EXPRESS OR IMPLIED WARRANTY, MISREPRESENTATION, NEGLIGENCE,
STRICT LIABILITY, OR ANY OTHER LEGAL THEORY EVEN IF SUCH PARTY WAS SPECIFICALLY
ADVISED ABOUT THE POSSIBILITY OF SUCH LOSSES OR DAMAGES.


 


11.                                 Ownership. LICENSOR REPRESENTS AND WARRANTS TO LICENSEE THAT LICENSOR OWNS THE
MARK AND THAT IT HAS THE RIGHT TO GRANT TO LICENSEE ALL RIGHTS, WHETHER SUCH
RIGHTS ARE EXPRESS OR IMPLIED, DESCRIBED IN THIS AGREEMENT AND THE LICENSE.
Licensee acknowledges and agrees that Licensor owns all right, title and
interest in and to Mark, and agrees that the benefit, and goodwill associated
with the use of the Mark shall inure entirely for the benefit of Licensor.
Licensee acknowledges and agrees that the rights and licenses granted to
Licensee pursuant to this Agreement are of a contractual nature only, and that
this Agreement and the License do not grant Licensee any ownership rights to
the Mark. Licensee agrees that, during the active term of the License, Licensee
will not contest or challenge Licensor’s ownership of or exclusive rights to
the Mark.


 


12.                                 Assignment.


 


(a)                                  Licensor may in the future sell, assign,
convey or otherwise transfer, all or a portion of The Woodlands Waterway and/or
the Mark (along with goodwill associated with the Mark) to Town Center
Improvement District of Montgomery County, Texas (“TCID”). In the event
Licensor sells, assigns, conveys or otherwise transfers the ownership rights to
the Mark, as distinguished from a nonexclusive or exclusive license with
respect to the Mark (“Transfer of the Mark”), to TCID or any third party, such
Transfer of the Mark shall be subject to this Agreement, and such third party
assignee shall assume the Mark subject to Licensee’s License and rights to the
use the Mark as provided in this Agreement and shall assume all duties and
obligations of Licensor to Licensee under this Agreement except to the extent
that any indemnity obligations by an assignee (such as TCID) are prohibited by
law. Licensor agrees to provide written notice of such Transfer of the Mark at
least thirty (30) days prior to the closing of such Transfer of the Mark. The
License and this Agreement shall survive any such Transfer of the Mark by
Licensor or any third party assignee.


 


(b)                                 Licensee may assign, sell, convey or
otherwise transfer Licensee’s rights under the License and this Agreement to a
purchaser of the assets of Licensee’s Business


 


6

















 


or
the Hotel, to an entity that acquires a controlling interest in Licensee’s
Business or Hotel or to an entity that acquires ownership of Licensee’s
Business or Hotel by a collateral assignment resulting from any mortgage
financing, subject to such assignee having substantial financial assets to
purchase and maintain the hotel on a like level as Licensee as a first class,
full-service hotel. Licensee may not otherwise assign or sublicense its rights
under this Agreement to any third party without the express written consent of
Licensor.


 


13.                                 Notices. All notices, offers, consents, or other communications required or
permitted to be given pursuant to this Agreement shall be in writing and shall
be considered as properly given or made when actually received, if delivered
personally, by messenger, by nationally known overnight courier service, by
facsimile (with an original to follow via regular mail) or by registered or
certified U.S. mail with return receipt requested, and addressed to the address
of the intended recipient as set forth below. A Party may change its address by
giving notice in writing stating its new address to the other Party.


 


	
  If to Licensee:

  	
   

  	
  Mr. Edwin Hendricksen

  
	
   

  	
   

  	
  390 N. Orange Ave.

  Suite 1650

  
	
   

  	
   

  	
  Orlando, Florida 32801

  
	
   

  	
   

  	
  Fax No.: (407) 999-8428

  
	
   

  	
   

  	
   

  
	
  If to the Licensor:

  	
   

  	
  The Woodlands Development
  Company

  
	
   

  	
   

  	
  2201 Timberloch Place

  
	
   

  	
   

  	
  The Woodlands, Texas 77380

  
	
   

  	
   

  	
  Attention: General Counsel

  
	
   

  	
   

  	
  Fax No. (281) 719-7324

  



 


14.                                 Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN CONFORMITY WITH THE LAWS OF THE STATE OF TEXAS
EXCLUSIVE OF CONFLICTS OF LAW PROVISIONS. ALL OBLIGATIONS OF THE PARTIES
CREATED HEREUNDER ARE PERFORMABLE IN MONTGOMERY COUNTY, TEXAS.


 


15.                                 Waiver of Jury Trial. THE PARTIES WAIVE THEIR
RIGHT TO A JURY TRIAL WITH RESPECT TO ALL CLAIMS AND CAUSES OF ACTION RELATED
TO OR ARISING OUT OF THE NEGOTIATION OR PERFORMANCE OF THIS AGREEMENT.


 


16.                                 Severability. In the event that any one or more
provisions of this Agreement shall for any reason be held to be invalid,
illegal or unenforceable, any such invalid, illegal or unenforceable provision
shall be treated as modified to the least extent necessary to rectify its
invalidity, illegality or unenforceability, and shall be enforced as so
modified. If no feasible modification shall save such provision, it will be
severed from the remainder of this Agreement, as appropriate. The remaining
provisions of this Agreement shall be unimpaired, and remain in full force and
effect.


 


17.                                 Non-Waiver. A failure of either party to enforce at any time any of the
provisions of this Agreement, or to require at any time performance of any of
the provisions hereof, shall in


 


7

















 


no way affect the full right
to require such performance at any time thereafter. No waiver shall be deemed a
waiver of any other breach of the same or any other term or condition hereof.


 


18.                                 Successors and Assigns. Subject to the provisions of Section 11,
this Agreement and all of the terms and provisions hereof shall be binding upon
and shall inure to the benefit of each of the Parties and their respective
successors and permitted assigns.


 


19.                                 Merger and Amendments. This Agreement contains the entire
understanding and agreement of the Parties and supersedes any prior
understandings and written or oral agreements between them respecting this
subject matter. This Agreement may be amended only by the written consent of
the Parties hereto.


 


20.                                 Mutual Agreement; Consent, Approval. Except as otherwise provided elsewhere in
this Agreement, if the terms and conditions hereof require the Parties to
mutually agree to, consent to or approve of some matter, it is agreed and
understood that such agreement, consent or approval will not be unreasonably
withheld, conditioned or delayed. If the terms and conditions hereof require
the Parties to negotiate or agree on a point, such negotiation shall be
undertaken and conducted by the Parties in good faith.


 


21.                                 Headings; Pronouns and Plurals. The headings in this Agreement are for the
purpose of convenience only. They are not intended to be a material part of the
Agreement, and in the event of any conflict between the heading and the text,
the text shall govern. Whenever the context may so require, any pronoun used in
this Agreement shall include the corresponding masculine, feminine or neuter
forms, and the singular form of nouns, pronouns and verbs shall include the
plural and vice versa.


 


22.                                 Third Party Beneficiary. Any agreement to perform any obligation or
pay any amount herein contained, express or implied, shall be only for the
benefit of the Licensor or Licensee, and their respective successors and
permitted assigns, and such agreements shall not inure to the benefit of any
third party whomsoever, it being the intention of the undersigned Parties that
no one shall be or be deemed to be a third-party beneficiary of this Agreement.


 


23.                                 No Presumptions. No presumption will apply in favor of a
Party in the interpretation of this Agreement or in the resolution of any
ambiguity of any provisions thereof.


 


24.                                 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original
instrument and all of which together shall constitute a single agreement.


 


NOTICE OF
INDEMNIFICATION: THE PARTIES TO THIS AGREEMENT HEREBY ACKNOWLEDGE AND AGREE
THAT THIS AGREEMENT CONTAINS INDEMNIFICATION PROVISIONS IN SECTION 9.


 


[Signatures on Following Page]


 


8
















 


IN WITNESS
WHEREOF, the Parties
have executed this Agreement as of the day and year first written above.


 


 


	
   

  	
  LICENSOR

  
	
   

  	
   

  
	
   

  	
  The
  Woodlands Commercial Properties

  Company, L.P., a Texas Limited Partnership

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  The Woodlands Operating
  Company, L.P., a

  Texas Limited Partnership

  
	
   

  	
   

  	
  Its Authorized Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
						



 


 


	
   

  	
  LICENSEE

  
	
   

  	
   

  
	
   

  	
  Inland American
  Lodging Woodlands TRS,

  LLC, a  Delaware
  Limited Liability Company.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					



 


9

















 


Exhibit “A”


 


Federal Registration for the Trademark “THE WOODLANDS
WATERWAY”


 


	
  Mark

  	
   

  	
  Registration Number

  	
   

  	
  Registration Date

  
	
  THE WOODLANDS WATERWAY

  	
   

  	
  2555432

  	
   

  	
  April 2, 2002

  



 


10

















 


SCHEDULE 5


 


LEASE AGREEMENT


 


[Lease
Agreement is behind this page.]


 

















 


LEASE AGREEMENT


 


This Lease Agreement (this “Lease”) is entered into to be effective
as of
               
,2007, by and between INLAND AMERICAN LODGING
WOODLANDS TRS, L.L.C. a Delaware limited liability company (“Landlord”), and THE WOODLANDS OPERATING COMPANY, L.P., a
Texas limited partnership (“Tenant”).
For and in consideration of the mutual covenants contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties, Landlord and
Tenant hereby agree as follows:


 


1.                                      LEASED PREMISES. Landlord is an Affiliate (as hereafter defined) of Inland American Lodging Woodlands Limited Partnership,
an Illinois limited partnership (the “Owner”). Owner owns the Building and has leased the Building
to Landlord pursuant to that certain Lease Agreement of even date herewith (the “TRS Lease”). The Landlord is
also, with respect to the Management
of the Building, party to a Management Agreement with Marriott Hotels Services, Inc. (“Manager”). Landlord hereby
leases to Tenant and Tenant hereby leases from Landlord for the rental and on the terms and conditions
herein set forth certain space designated herein as Suite 1401 and containing approximately 840
square feet as reflected on Exhibit A
attached hereto and made a
part hereof by reference (the “Premises”),  on the fourteenth floor
of the building located at 1601
Lake Robins Drive, The Woodlands, Texas 77380, and known as The Woodlands Waterway Marriott Hotel and
Convention Center (the “Building”).  Landlord grants Tenant a non-exclusive right to use the
Common Areas during the Term, in common with others and subject to the provisions of this Lease. “Common Areas” are,
and shall be limited to, all present
and future areas, facilities and equipment in the Building designated for the
common use of the occupants,
guests and invitees of the Building, including, without limitation, parking facilities (subject to payment as
hereafter provided), walkways, driveways, lobbies, landscaped areas, loading areas, public corridors,
public restrooms, stairs and elevators. Subject to the payment of applicable fees and charges from
time to time in effect for visitor parking in the parking facilities serving the Building,
Tenant and Tenant’s agents, employees, licensees and invitees shall have the non-exclusive right
to use the parking facilities serving the Building (which shall not exceed the standard rates
charged to hotel guests and users of meeting an conference facilities in the Building), in common with the hotel guests
and users of meeting and conference
facilities in the Building, and Tenant’s invitees shall be permitted to utilize
the visitor parking spaces
within such parking facilities. In addition to the foregoing and provided no
event of default exists, and
subject to payment by Tenant of applicable charges from time to time established by Landlord for parking permits,
Landlord agrees to make available to Tenant five (5) parking permits, each for the non-exclusive use by a single
automobile 24 hours a day and 7 days
a week in the so-called “East Garage”, which is immediately adjacent to the
Building.


 


2.                                      TERM.  Subject
to and upon the conditions set forth herein, the term of this Lease shall be
for a period of ten (10) years, beginning on November, 2007 (“Commencement Date”)  and ending on the tenth (10th)
anniversary of the Commencement Date (the “Term”).


 


3.                                      USE.  The
Premises shall only be used and occupied by Tenant as a marketing center,
conference room, hospitality suite, and/or office, and for other uses in
support of Tenant’s and Tenant’s Affiliates’ business development, marketing
and sales activities, or for other similar commercial uses by Tenant and its
Affiliates allowed by applicable law. Provided, however, neither Tenant, nor
any Affiliate of Tenant, shall have a full-time, permanent staff in the


 

















 


Premises, or use the
Premises for any hotel use, condominium hotel use or other transient guest use
or as a design center/showroom (i.e., stocked with materials samples for the
buildout of tenant space). The parties acknowledge that Tenant will use the
Premises for general marketing purposes with respect to the Town Center area of
The Woodlands, including marketing for a competitive facility; however, Tenant
will not use the Premises primarily for a competitive purpose nor shall the
Premises be used by a competitor of Landlord, Manager or the Hotel. The
Landlord agrees that for purposes of this Lease that The Woodlands Operating
Company, L.P. is not a competitor of Landlord, Manager or the Hotel.


 


4.                                      SECURITY DEPOSIT. None.


 


5.                                      BASE RENT.  During
the Term and as part of the consideration for Landlord’s execution of this
Lease, Tenant shall pay to Landlord annual installments of One Dollar ($1.00)
(the “Base Rent”) payable at the office of Landlord in
legal tender of the United States of America, in advance, without demand,
deduction or set-off, on the Commencement Date and each anniversary thereof
during the Term. Landlord acknowledges that contemporaneously herewith Tenant
has paid to Landlord the Base Rent for the entire Term (i.e., $10.00) and that
no. additional payments of Base Rent shall be required during the Term.
Landlord and Tenant acknowledge and agree that (i) this Lease is being entered
into contemporaneously with the sale of the Building by Tenant to Landlord,
(ii) Tenant would not have agreed to such sale without the lease of the
Premises to Tenant as contemplated herein, and (iii) the sales price received
by Tenant from Landlord reflects a reduction due to this Lease and such
reduction constitutes consideration for the lease of the Premises to Tenant
that is in addition to the Base Rent provided above.


 


6.                                      GROSS LEASE. Tenant leases the Premises on a gross lease
basis; and as such, included in the payment of the Base Rent herein specified,
are all taxes, insurance premiums, utilities (including, without limitation,
electricity, water, wastewater, telephone, basic cable television (consistent
with the basic cable provided in guest rooms of the Building), and high-speed
internet service available 24 hours a day and 7 days a week), heating,
ventilation and air conditioning (“HVAC”), housekeeping and janitorial
service, and costs of repairs and maintenance. However, Tenant shall pay for
all costs of repairs and maintenance for damage caused by Tenant or its guests,
invitees, employees, agents and licensees as well as long-distance phone
charges and premium cable television charges.


 


7.                                      CATERING AND HOUSEKEEPING
SERVICES.
Landlord shall provide on-demand
catering and housekeeping services to the Premises consistent with existing
hotel practices. Further, Tenant shall, subject to the payment of applicable
charges charged to hotel guests and users of meeting and conference facilities
in the Building, be entitled to utilize all other services provided to such
hotel guests and users of meeting and conference facilities. Notwithstanding
the foregoing, Tenant shall not be charged for the housekeeping services
provided to the Premises. With respect to the catering, Tenant shall be charged
the same rates charged by Landlord to other guests and invitees making
comparable use of Landlord’s catering services. Tenant shall pay to Landlord
the charges for such services within ten (10) days after Landlord renders a
statement therefor to Tenant. All past due amounts owed hereunder by Tenant
shall bear interest at the rate of twelve percent (12%) per annum or the
highest lawful rate, whichever is less, from the date due until paid. To the
extent Landlord has contracted with a hotel management company or other
third-party to perform any of the services or other obligations of Landlord
under this Lease,


 


2

















 


Landlord shall cause such
hotel management company or other third-party to perform such services and
obligations in accordance with the terms and conditions of this Lease.


 


8.                                      QUIET ENJOYMENT.  Tenant, on paying the rent and performing the
covenants herein, shall and may peaceably and quietly have, hold and enjoy the
Premises for the Term.


 


9.                                      FURNITURE, FIXTURES AND EQUIPMENT.  Landlord
acknowledges that the furniture, trade fixtures and equipment and all other
personal property located in the Premises as of the Commencement Date
(collectively, “Tenant’s
Property”), is and shall remain the property
of Tenant, and Tenant may at any time and from time to time remove and/or
replace the same or install any additional such items. Tenant acknowledges that
all other fixtures and the carpeting, paneling or other wall covering are and
shall remain the property of Landlord. Tenant may replace Tenant’s Property as
aforesaid and make other alterations and improvements to the Premises that do
not impact the structural components of the Building or the mechanical,
electrical or plumbing systems of the Building provided Tenant obtains Landlord’s
prior written consent, which consent will not be unreasonably withheld. Tenant
may not make any other alterations or improvements to the Premises without the
express prior written consent of Landlord, which consent may be given, withheld
or conditioned in Landlord’s sole discretion.


 


10.                               SUBLETTING AND ASSIGNING.  Tenant
shall not, without Landlord’s prior written consent, which may be granted,
conditioned or withheld in Landlord’s sole discretion, (i) assign Tenant’s
interest under this Lease, in whole or in part, including by operation of law
or otherwise (ii) mortgage or pledge the same, and/or (iii) sublet the
Premises, or any part thereof. Notwithstanding the foregoing, Tenant may,
without the consent of Landlord, (x) assign Tenant’s interest under this Lease,
in whole or in part, to an Affiliate of Tenant, and/or (y) sublet the Premises,
or any part thereof, to an Affiliate of Tenant. Landlord shall have the right
to assign or transfer, in whole or in part, its rights and obligations
hereunder and in the Building. Tenant specifically agrees to look solely to
Landlord’s interest in the Building for the recovery of any judgment from
Landlord and agrees that Landlord shall never be personally liable for any such
judgment. For purposes of this Lease, the term “Affiliate” means any entity
which directly controls, or is under common control, with Tenant. For purposes
hereof, the term “Control” means the possession of the power to direct or cause
the direction of the management and policies of such entity. Provided, however,
for purposes of this Lease, Affiliate shall not include any entity that is a
direct competitor of Manager or the Hotel.


 


11.                               FIRE AND CASUALTY.  If the Premises or Building are partially or
totally destroyed by fire or other casualty and Landlord in its sole discretion
elects to repair or restore the same, then Landlord shall repair and restore
the Premises as soon as it is reasonably practicable, to substantially the same
condition in which the same were before such damage, failing which this Lease
shall be terminable as of the date of the occurrence of the damage or
destruction, by either party hereto by serving written notice to the other.
Notwithstanding the foregoing, if such damage is generally limited to the
Premises, and not caused by an act or omission of Tenant, then Landlord shall
repair and restore the Premises as soon as it is reasonably practicable, to
substantially the same condition in which the same was before such damage.


 


12.                               DEFAULT BY TENANT.  If Tenant defaults in any covenant or
agreement to be performed by it and, if after written notice is given by
Landlord to Tenant, such default shall continue for a period of thirty (30)
days (or such longer period of time following diligent efforts to cure as may


 


3

















 


be reasonably necessary to
cure such default), then Landlord may, as its sole and exclusive remedy,
terminate this Lease and take full and absolute possession of the Premises free
from any subsequent rights or obligations of Tenant. Waiver by Landlord of any
right for any default of Tenant shall not constitute a waiver of any right for
either a subsequent default of the same obligation or any other default.


 


13.                               HOLD HARMLESS. Tenant will indemnify Landlord for, and hold
Landlord harmless from and against all fines, suits, claims, demands,
liabilities, and actions (including costs and expenses of defending against
such claims) resulting or alleged to result from any damage or injury occurring
in the Premises), to the extent resulting from Tenant’s gross negligence or
willful misconduct. Landlord will indemnify Tenant for, and hold Tenant
harmless from and against all fines, suits, claims, demands, liabilities, and
actions (including costs and expenses of defending against such claims)
resulting or alleged to result from any damage or injury occurring in the
Building (excluding the Premises), to the extent resulting from Landlord’s
gross negligence or willful misconduct.


 


14.                               INSURANCE.  Tenant
shall procure and maintain (i) commercial general liability insurance with a
combined single limit of at least $2,000,000 and (ii) special form property
insurance covering the full replacement cost of Tenant’s Property. Landlord or
Manager shall procure and maintain (x) commercial general liability insurance
with a combined single limit of at least $2,000,000 and (y) special form
property insurance covering the full replacement cost of the Building.


 


15.                               WAIVER OF SUBROGATION.  Landlord
and Tenant hereby waive any rights each may have against the other, on account
of any loss or damage occasioned to Landlord or Tenant, as the case may be,
their respective property, the Premises or the Building, or their respective
contents, arising from any risk actually covered by valid and enforceable
special form property insurance, to the extent of such coverage. Landlord and
Tenant each agree to cause an endorsement to be furnished to their respective
insurance policies recognizing this waiver of subrogation.


 


16.                               SEVERABILITY.  This Lease shall be construed in accordance
with the laws of the State of Texas. If any clause or provision of this Lease
is illegal, invalid or unenforceable, under present or future laws effective
during the Term hereof, then it is the intention of the parties hereto that the
remainder of this Lease shall not be affected thereby, and it is also the
intention of both parties that in lieu of each clause or provision that is
illegal, invalid or unenforceable, there be added as part of this Lease a
clause or provision as similar in terms to such illegal, invalid or
unenforceable clause or provision as may be possible and be legal, valid and
enforceable.


 


17.                               SUCCESSORS AND ASSIGNS. This Lease and all the covenants herein
contained shall be binding upon the parties hereto and their respective heirs,
legal representatives, successors and assigns, if any.


 


18.                               SUBORDINATION.  Tenant
accepts this Lease subject and subordinate to any mortgage, deed of trust or
other lien presently existing or hereafter placed upon the Premises and to any
renewals and extensions thereof, and Tenant acknowledges that such
subordination is automatic without any further documentation. Upon demand,
Tenant agrees to execute such further commercially reasonable instruments subordinating
this Lease, as Landlord may request. In the


 


4

















 


event of a foreclosure of
any such mortgage, deed of trust or other lien or of any other action or
proceeding for the enforcement thereof, or of any sale thereunder, including
acquisition of Landlord’s interest in the Building by the holder of any such
mortgage, deed of trust or other lien, Tenant will attorn to such purchaser.


 


19.                               ACCESS BY LANDLORD.  Upon
reasonable advance notice to Tenant, Landlord, its agents and employees shall
have access to and the right to enter upon the Premises at any reasonable time
to provide the services to be provided by Landlord hereunder and to make any
repairs or alterations required to be made by Landlord hereunder. Landlord and
its agents and employees will use commercially reasonable efforts not to
disrupt Tenant’s business operations in the Premises while exercising its
access rights under this Section 19.


 


20.                               HOLDING OVER.  If
Tenant holds over after the expiration or termination of this Lease, such hold
over shall be as a tenant at will and all of the terms and provisions of this
Lease shall be applicable during such period, provided Tenant shall pay to
Landlord as and for Rent during such hold over period, the sum of $10,000 per
month and Tenant will vacate the Premises and deliver the same to Landlord
within thirty (30) days after the date of Tenant’s receipt of written notice
from Landlord to vacate the Premises. No holding over by Tenant, whether with
or without consent of Landlord, shall operate to extend this Lease except as
herein provided.


 


21.                               ENTIRE AGREEMENT.  This
instrument and any attached addenda or exhibits constitute the entire agreement
between Landlord and Tenant; no prior written or prior or contemporaneous oral
promises or representations shall be binding. This Lease shall not be amended
or modified except by written instrument signed by both parties hereto.
Paragraph captions herein are for Landlord’s and Tenant’s convenience only, and
neither limit nor amplify the provisions of this instrument.


 


22.                               ATTORNEYS’ FEES.  If any action or proceeding is commenced by
either party to enforce their rights under this Lease or in connection with any
default hereunder, the prevailing party in such action or proceeding shall be
entitled to recover reasonable attorneys’ fees and expenses, in addition to any
other relief awarded by the court.


 


23.                               NOTICES.  Whenever in this Lease it shall be required
or permitted that notice or demand be given or served by either party to this
Lease to or on the other, such notice or demand shall be given or served and
shall not be deemed to have been given or served unless in writing and delivered
personally or forwarded by Certified or Registered Mail, postage prepaid or
other reputable common carrier guaranteeing next-day delivery, addressed as
follows:


 


	
  To the Landlord:

  	
   

  	
  Inland American Lodging
  Woodlands TRS, L.L.C.

  
	
   

  	
   

  	
  390 N. Orange Avenue, Ste.
  1650

  
	
   

  	
   

  	
  Orlando, Florida 32801

  
	
   

  	
   

  	
  Attn: Mr. Edwin Henriksen

  
	
   

  	
   

  	
   

  
	
  To the Tenant:

  	
   

  	
  The Woodlands Operating
  Company, L.P.

  
	
   

  	
   

  	
  2201 Timberloch Place

  
	
   

  	
   

  	
  The Woodlands, Texas 77380

  
	
   

  	
   

  	
  Attn:

  	
   

  	
   

  



 


5

















 


Such addresses may be
changed from time to time by either party by serving notice as above provided.


 


24.                               BROKERS. Each party represents and warrants to the
other party that it has had no dealings with any real estate broker or agent
who is entitled to a commission in connection with this Lease. Each party
agrees to indemnify and hold harmless the other party from and against any
liability from all claims for commission arising from the actions of the
indemnifying party.


 


[Remainder of Page Intentionally Left Blank]


 


6

















 


IN
WITNESS WHEREOF, this Lease Agreement has been executed by the parties as of
the date first set forth above.


 


	
  LANDLORD:

  	
  TENANT:

  
	
   

  	
   

  
	
  INLAND
  AMERICAN LODGING

  WOODLANDS TRS, L.L.C., a

  	
  THE
  WOODLANDS OPERATING

  COMPANY, L.P., a
  Texas limited

  
	
  Delaware limited liability
  company

  	
  partnership

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
										



 


7

















 


EXHIBIT
A


 


FLOOR
PLAN OF THE PREMISES


 


[To be
attached]


 

















 


SIXTH AMENDMENT TO PURCHASE AND SALE AGREEMENT


 


THIS SIXTH
AMENDMENT TO PURCHASE AND SALE AGREEMENT (the “Sixth Amendment”) is made and entered
into as of this 15th  day of
November, 2007 between THE WOODLANDS HOTEL,
L.P., as Seller, and INLAND
AMERICAN LODGING ACQUISITIONS, INC., as Purchaser.


 


WITNESSETH:


 


WHEREAS, Seller and Purchaser made and entered into
that certain Purchase and Sale Agreement dated as of August 22, 2007, as
amended by that certain First Amendment to Purchase and Sale Agreement dated as
of September 12, 2007, as amended by that certain Second Amendment to Purchase
and Sale Agreement dated as of September 14, 2007, as further amended by that
certain Third Amendment to Purchase and Sale Agreement dated as of September
19, 2007, as further amended by that certain Fourth Amendment to Purchase and
Sale Agreement dated as of October 1, 2007, and as further amended by that
certain Fifth Amendment to Purchase and Sale Agreement dated as of October 2,
2007 (collectively the “Agreement”) with respect to the sale and purchase of
the Woodlands Waterway Marriott Hotel; and


 


WHEREAS, Seller and Purchaser desire to amend the
Agreement to further extend the Closing Date as more particularly hereinafter
set forth.


 


NOW,
THEREFORE, in
consideration of the mutual terms, provisions, covenants and agreements set
forth herein and in the Agreement, and for other good and valuable
considerations, the receipt and sufficiency of which are hereby acknowledged,
Seller and Purchaser hereby agree to further amend the Agreement as follows:


 


1.                                       Defined Terms. Capitalized Terms used herein and not
defined herein shall have the meanings ascribed thereto in the Agreement.


 


2.                                       Closing Date. Section 1.1.11 of the Agreement is hereby
amended and restated in its entirety to read as follows:


 


1.1.11                                       Closing Date:   November 30, 2007.


 


3.                                       Additional Earnest Money Deposit. On or before 3:00 p.m. Houston, Texas time
on November 15, 2007, Purchaser shall deliver in escrow to Escrow Agent the sum
of $25,000,000.00 (the “Second Additional Earnest Money Deposit”), which shall
constitute and be deemed a portion of the Earnest Money for all  purposes
under the Agreement. Upon the payment of the Second Additional Earnest
Money Deposit, the parties hereto acknowledge and agree that the total Earnest
Money under the Agreement shall be $30,000,000.00.


 


4.                                       Seller’s Deliveries in Escrow. Section 7.3 of the Agreement is hereby
amended and restated in its entirety to read as follows:


 


1

















 


7.3                                 Seller’s Deliveries in
Escrow. On or before 3:00
p.m. Houston, Texas time on November 28, 2007, Seller shall deliver in escrow
to Escrow Agent the following:


 


5.                                       Purchaser’s Deliveries in Escrow. Section 7.4 of the Agreement is hereby amended
and restated in its entirety to read as follows:


 


7.4                                 Purchaser’s Deliveries in
Escrow. On or before 3:00
p.m. Houston, Texas time on November 28, 2007, Purchaser shall deliver in
escrow to Escrow Agent the following:


 


6.                                       Assignment and Assumption. Notwithstanding anything set forth in the
Agreement to the contrary, Purchaser shall have the right, at its option, to
designate its affiliate, Inland American Lodging Woodlands TRS Limited
Partnership, an Illinois limited partnership, to be the assignee under any
Assignment from Seller as contemplated in Section 7.3.2 of the Agreement and
the Assignment and Assumption of Management Agreement contemplated in Section
7.3.5 of the Agreement.


 


7.                                       Trademark License Agreement. Schedule 4 attached to the Fifth
Amendment to Purchase and Sale Agreement is hereby deleted in its entirety, and
is hereby replaced with the new Schedule 4 attached hereto.


 


8.                                       Lease Agreement. Schedule 5 attached to the Fifth
Amendment to Purchase and Sale Agreement is hereby deleted in its entirety, and
is hereby replaced with the new Schedule 5 attached hereto.


 


9.                                       Purchase Price. Section 7.6 of the Agreement is hereby
amended and restated in its entirety to read as follows:


 


7.6                                 Purchase Price. At or
before 3:00 p.m. Houston, Texas time on November 28, 2007, Purchaser shall
deliver to Escrow Agent the Purchase Price, less the Earnest Money that is
applied to the Purchase Price, plus or minus a good faith estimate of
applicable prorations, in immediate, same-day U.S. federal funds wired for
credit into Escrow Agent’s escrow account, which funds must be delivered in a
manner to permit Escrow Agent to deliver good funds to Seller or its designee
on the Closing Date (and, if requested by Seller, by wire transfer); in the
event that Escrow Agent is unable to deliver good funds to Seller or its
designee on the Closing Date, then the closing statements and related prorations
will be revised as necessary. The parties hereto acknowledge that the
prorations will be finalized on the morning of the Closing Date, that
immediately thereafter both parties will execute and deliver to Escrow Agent
the closing statement and that Escrow Agent shall immediately upon receipt of
the executed closing statement deliver the Purchase Price (as adjusted by the
applicable prorations) to Seller.


 


10.                                 Amendments. Except as hereby amended and modified, the Agreement shall remain in
full force and effect in accordance with the terms thereof.


 


[SIGNATURES
APPEAR ON NEXT PAGE]


 


2

















 


IN WITNESS
WHEREOF, Purchaser
and Seller have executed this Sixth Amendment in the manner and form sufficient
to bind them as of this 15 day of November, 2007.


 


	
  SELLER:

  	
  THE
  WOODLANDS HOTEL, L.P.,

  
	
   

  	
  a Texas limited
  partnership

  
	
  Date executed by Seller 

  	
   

  
	
   

  	
  By:

  	
  The Woodlands Hotel GP,
  L.L.C.,

  
	
  November 15,  2007

  	
   

  	
  a Texas limited liability
  company,

  
	
   

  	
   

  	
  its sole General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Dan B. Leverett

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Dan B. Leverett

  	
   

  
	
   

  	
   

  	
  Title:

  	
     Vice President - Commercial

  	
   

  
							



 


 


	
  PURCHASER:

  	
  INLAND
  AMERICAN LODGING

  
	
   

  	
  ACQUISITIONS,
  INC.,

  
	
  Date executed by Purchaser

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
  November 15,  2007

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Edwin Hendriksen

  	
   

  
	
   

  	
  Name:

  	
  Edwin Hendriksen

  
	
   

  	
  Title:

  	
  Senior Vice President

  
					



 


3

















 


SCHEDULE 4


 


TRADEMARK LICENSE AGREEMENT


 


 


[Trademark
License Agreement is behind this page.]


 
















 


TRADEMARK LICENSE AGREEMENT


 


THIS
TRADEMARK LICENSE AGREEMENT (this “Agreement”) is
dated as of November
           , 2007 (the “Commencement Date”), and entered into by
and between The Woodlands Commercial Properties Company, L.P., a Texas Limited
Partnership, located at 2201 Timberloch Place, The Woodlands, Texas (the “Licensor”) and Inland American Lodging
Woodlands TRS Limited Partnership, an Illinois limited partnership, located at
390 N, Orange Ave., Suite 1650, Orlando, Florida 32801 (the “Licensee”).  Licensee and
Licensor are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”


 


WHEREAS, Licensor has adopted the mark  THE WOODLANDS WATERWAY® (the “Mark”) and has extensively used the Mark
in connection with its development project commonly referred to as THE
WOODLANDS and based upon that extensive use, Licensor has developed common law
rights in the Mark and has acquired certain federal registrations for the Mark
(such registrations being more particularly described on Exhibit “A” to this Agreement);


 


WHEREAS, Licensee desires to use the Mark in
connection with the ownership, operation, advertisement and marketing of a
hotel (the “Hotel”) located at
1601 Lake Robbins Drive, The Woodlands, Texas (“Licensee’s
Business”);


 


WHEREAS, Licensor has developed a licensing program to
allow third parties to use the Mark in a limited manner, and in connection with
such program desires to grant to Licensee a license to use the Mark in
connection with Licensee’s Business and in combination with the words “THE
WOODLANDS WATERWAY HOTEL” to identify Licensee’s Business;


 


NOW THEREFORE, in consideration of the covenants and
agreements herein contained and the mutual benefits to be derived therefrom,
the parties hereto do hereby covenant and agree as follows:


 


1.                                     License. Subject to the terms of this Agreement, Licensor shall provide to
Licensee a nonexclusive, fully-paid and royalty-free license to use the Mark:
(i) in combination with the word “HOTEL” in the phrase “THE WOODLANDS WATERWAY
HOTEL” to identify Licensee’s Business (and Licensee may also insert the name
of the manager of the hotel or a derivation thereof before “HOTEL” or “THE
WOODLANDS WATERWAY HOTEL” provided that Licensee has obtained a valid license
from the manager for use of the manager’s mark); (ii) in such combination, in
connection with the advertising, promotion and operation of Licensee’s
Business, by or on behalf of Licensee or its manager, including use by
third-party agents of Licensee, including, with, on or in any advertising or
promotional materials in print, TV, radio, Internet, wireless or other
advertising in any format or by any medium or technology now known or later
developed, or in, on or through any website owned by, or operated on behalf of
Licensee, its managers or third-party agents or in any way associated with
Licensee’s Business; (iii) in such combination in publications and public
filings; (iv) in such combination in connection with the sponsorship of events
by or on behalf of Licensee’s Business; (v) or abbreviations thereof in any
internet domain names and urls associated with Licensee’s Business subject to
approval of the domain name by Licensor for trademark control purposes; (vi) in
such combination in connection with the sale of merchandise bearing the Mark or
logos incorporating the Mark in such combination; and (vii) to authorize and
sublicense to Licensee’s manager of the Hotel the right to exercise the rights
of this License solely for use in manager’s role and activities


 


1

















 


in managing, operating,
advertising and promoting the Hotel (collectively the “License”) solely for Licensee’s use
pursuant to this Agreement and subject to the following conditions:


 


(a)                                     Use of Mark. Licensee (and Licensee’s manager) shall have the right to use the
Mark strictly as provided in Section 1. Licensee’s Business shall be operated
in a manner consistent with the high standards generally associated with THE
WOODLANDS development project. Licensee shall own all domain names and urls it
purchases containing the Mark in combination with “Hotel” subject to the
retained rights of Licensor in the Mark. Licensor agrees that approval for
domain names and urls in Section 1 shall not be unreasonably withheld, and
shall be deemed given, if Licensor does not object in writing to any proposal
for a domain name or url by Licensee within fifteen (15) business days of
submittal by Licensee, and Licensee shall be free to use and add any domain
name extensions (such as .com, .biz, .org) for previously approved internet
domain names and urls.


 


(b)                                    Inspection. All uses of the Mark by Licensee in advertising or promotional
materials, signs, logos, displays or otherwise shall be consistent with the use
of the Mark by Licensor prior to the Commencement Date or otherwise shall be in
a form and manner approved by Licensor. In connection with such approval,
Licensor has the right (but not the obligation) to appoint a designated
representative to inspect, on an annual basis, Licensee’s use of the Mark in
connection with Licensee’s operation of Licensee’s Business upon reasonable
notice by Licensor but only during regular business hours and only if such
inspection does not interfere with the normal operation of Licensee’s Business.
Licensor may then, at its option, prescribe such reasonable changes in the use
of the Mark by Licensee in connection with Licensee’s Business that are
reasonably necessary so that Licensee’s use of the Mark conforms to Licensor’s
quality standards.


 


(c)                                     Rights Limited. The rights to use the Mark granted to
Licensee under the License are limited to the licensed uses described in
Section 1, and such rights do not extend to any other location, business or
project unrelated to Licensee’s Business that Licensee may become involved in
without the express written consent of Licensor.


 


2.                                      Relationship of the Parties. The relationship of Licensee and Licensor
under this Agreement is that of independent parties, each acting in its own
best interests, and notwithstanding anything in this Agreement to the contrary,
no partnership, joint venture, principal-agent or other business relationship
is established or intended hereby between the Parties.


 


3.                                      Term. The term of this Agreement shall commence simultaneously with the
closing of that certain Purchase and Sale Agreement by and between The
Woodlands Hotel, L.P., as Seller, and Inland American Lodging Acquisition,
Inc., as Purchaser, as amended and assigned, and shall continue for so long as
Licensee operates Licensee’s Business, subject to earlier termination in
accordance with Section 4 below (the “Term”).


 


4.                                      Termination.


 


(a)                                  Termination by Licensor.


 


(i)                                     Notice not Required. Licensor may terminate this Agreement
immediately without notice, if: (A) Licensee applies for or consents to the


 


2

















 


appointment
of a receiver, trustee or liquidator of all or a substantial part of its
assets; (B) Licensee files a voluntary petition in bankruptcy; (C) Licensee
files a petition or an answer seeking reorganization or arrangement with
creditors; (D) a final order, judgment or decree is entered by a court of
competent jurisdiction adjudicating Licensee as bankrupt or insolvent, or
approving a petition seeking reorganization of Licensee or appointing a
receiver, trustee or liquidator of Licensee of all or a substantial part of its
assets; or (E) upon the discontinuation of Licensee’s Business.


 


(ii)                                  Notice Required. Licensor may terminate this Agreement
effective upon delivery of written notice of termination to Licensee if
Licensee violates any of its obligations described in this Agreement and such
violation is not corrected within thirty (30) days after written notice of the
violation is provided to Licensee by Licensor.


 


(b)                                 Termination by Licensee. Licensee may terminate this Agreement at
any time effective thirty (30) days after delivery of written notice of
termination to Licensor.


 


(c)                                  Effect of Termination. Except for termination under Section 4(d),
upon termination of this Agreement, Licensee shall immediately cease using the
Mark, and shall not thereafter use any name, mark or symbol that is identical
to or confusingly similar with the Mark in connection with Licensee’s Business,
and this Agreement shall no longer have any force or effect.


 


(d)                                 Termination by Cessation. The License and this Agreement will be considered
terminated, and Licensee will be free to continue use of the Mark without restrictions
of this Agreement in the event that the following occurs: (i) Licensor ceases to
use the Mark and maintain the registration of the Mark with the United States
Patent and Trademark Office (“USPTO”) or Licensor ceases to operate Licensor’s
business that owns the Mark; and (ii) a Transfer of the Mark (as defined in
Section 12) does not occur. In such event, Licensee will also be free to pursue
all trademark registrations for hotel

services and other services and goods related to Licensee’s Business.


 


5.                                        Maintenance of the Mark. Licensor shall in its discretion, at its
cost, and in good faith maintain the registration of the Mark in the USPTO, but
Licensor reserves the right, in its sole discretion, to discontinue maintenance
of the Mark, it being understood that Licensor owes Licensee no obligation to
maintain the Mark. However, Licensor will provide written notice to Licensee of
its intention to abandon or discontinue use of the Mark, cease the maintenance
of a registration for the Mark with the USPTO or a Transfer of the Mark, thirty
(30) days prior to any such event for the purpose of providing Licensee the
opportunity to take action contemplated in this Agreement to maintain or pursue
protection for its rights related to the Mark and this License. If Licensor
provides such notice of ceasing to maintain the registration for the Mark with
the USPTO without Transfer of the Mark (or, in the event Licensor fails to
provide such notice, in Licensee’s reasonable judgment that Licensor intends to
or has failed to maintain and prosecute the Mark in the USPTO), Licensee may,
upon providing written notice to Licensor, assume such obligations in
connection with such maintenance and prosecution. In the event that Licensor
intends to abandon use of the Mark or discontinue the business of Licensor that
uses the Mark without Transfer of the Mark, Licensor shall provide written
notice of such intention to Licensee at least thirty (30) days prior to such
event to provide Licensee the opportunity to


 


3

















 


protect Licensee’s rights
associated with the Mark. Upon receiving such notice (or, in the event Licensor
fails to provide such notice, in Licensee’s reasonable judgment that Licensor
intends to or has abandoned the Mark) Licensee may, at Licensee’s sole
discretion, cost and expense, assume all responsibilities for maintaining and
prosecuting the Mark, including filing a new application in Licensee’s name if
Licensor has abandoned registration and use of the Mark or discontinued
Licensor’s business without a Transfer of the Mark. Licensor agrees to
cooperate with Licensee and to execute reasonable documents and instruments and
perform reasonable actions as necessary to effect Licensee’s ability to
maintain, prosecute or protect the Mark in the USPTO at Licensee’s cost.


 


6.                                        Infringement; Infringement Suit. Licensee agrees to notify Licensor promptly
of any unauthorized use of or infringement of the Licensed Mark and if
appropriate, Licensee’s intention to take action against such unauthorized use
or infringement, as soon as practically possible after the unauthorized use or
infringement of the Licensed Mark comes to Licensee’s attention. Licensor shall
have the sole initial right and discretion to bring or defend infringement or
unfair competition proceedings based on the Licensed Marks. If Licensor decides
to assert its rights or bring any claim, Licensee agrees, if reasonably
requested by Licensor, to cooperate with Licensor in any such action,
including, without limitation, by joining the action as a party if necessary to
maintain standing. All out-of-pocket expenses, including reasonable attorneys’
fees, expert witness fees, and court costs, relating to Licensee’s
participation in such infringement action at the request of Licensor, shall be
borne solely by Licensor. Any award, or portion of any award, recovered by
Licensor in any such action or proceeding commenced by Licensor shall belong
solely to Licensor, after recovery by both parties of their respective actual
out-of-pocket costs. To the extent that Licensee shares any costs as a result
of such assistance, Licensee shall share in any recovery, pro-rata in
proportion to any costs actually incurred by Licensee. If Licensor determines
not to take any such action with respect to protecting the Mark, it shall so
notify Licensee, who then may take such action in its own name and at its own
expense (or, in the event Licensor fails to provide such notice or take action
within sixty (60) days of Licensee providing to Licensor notice of such
unauthorized use and Licensee’s intention to take action against such
unauthorized use or infringement, Licensee may take such action at the end of
this sixty (60) day period); provided however that Licensee keeps Licensor
informed of the status of Licensee’s activities regarding such action, and any
settlement or other resolution thereof. Licensor shall cooperate with Licensee
or join in any such action at Licensee’s request and expense, and if necessary
assign any chose in action or other right to Licensee. Any award, or portion of
any award, recovered by Licensee in any such action or proceeding commenced by
Licensee as permitted herein shall belong solely to Licensee, after recovery by
both parties of their respective actual out-of-pocket costs. The parties hereby
agree to cooperate with each other in the conduct or defense of any legal
action, and in the negotiations in respect of any legal action relating to the
Mark, and each will provide to the other all relevant data, information and
material in its possession which may be helpful in such action or negotiation,
at the cost and expense of the party requesting such data, information and
material.


 


7.                                        No License Fee; No Royalty Fee. The License granted under this Agreement is
a fully paid and royalty-free license. Licensor shall not be entitled to any
royalties or other remuneration for any uses of the Mark by Licensee as
permitted by Licensor under this Agreement.


 


4

















 


8.                                        Insurance. Licensee shall maintain, or cause to be maintained, comprehensive liability
insurance with the premium thereon fully paid in advance, by and binding upon
some solvent insurance company licensed to do business in the State of Texas,
and with an A.M. Best rating of “A-VIII” or better, affording minimum
protection of not less than One Million and 00/100 Dollars ($1,000,000.00)
combined single limit bodily injury and property damage and shall name
Licensor, The Woodlands Operating Company, L.P., and each of such entities’ respective
partners, officers, employees and agents (“Licensor Group”)  as additional insureds under the
applicable policy. Insurance maintained by Licensee shall be primary to any
similar type coverage maintained by Licensor. Licensee agrees to maintain a
certificate of insurance on file with Licensor at all times while this
Agreement is in effect.


 


9.                                        INDEMNIFICATION.


 


(a) BY LICENSEE. LICENSEE AGREES TO FULLY INDEMNIFY, DEFEND AND
HOLD HARMLESS THE LICENSOR GROUP FROM AND AGAINST ANY AND ALL CLAIMS, SUITS,
ACTIONS, DEMANDS, LIABILITIES, LOSSES AND EXPENSES (INCLUDING, WITHOUT
LIMITATION, REASONABLE ATTORNEYS’ FEES AND COSTS OF LITIGATION WHETHER INCURRED
FOR LICENSOR’S PRIMARY DEFENSE OR FOR LICENSOR’S ENFORCEMENT OF ITS
INDEMNIFICATION RIGHTS HEREUNDER) AND ANY FINES, PENALTIES, AND ASSESSMENTS
(COLLECTIVELY, “CLAIMS”) THAT RELATE TO, RESULT FROM, OR ARISE OUT OF (I) ANY
MATERIAL BREACH BY LICENSEE OF ANY PROVISION OF THIS AGREEMENT THAT IS NOT
CURED BY LICENSEE WITHIN THIRTY (30) DAYS OF THE DATE THAT LICENSOR PROVIDES
WRITTEN NOTICE TO LICENSEE OF SUCH BREACH OR MATERIAL BREACH BY LICENSEE OF ANY
REPRESENTATION OR WARRANTY MADE BY LICENSEE IN THIS AGREEMENT; AND (II) ANY
CLAIM BROUGHT BY ANY THIRD PARTY BASED ON ANY USE OF THE MARK BY LICENSEE,
OTHER THAN IN EACH CASE IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT, THAT
INFRINGES ON SUCH THIRD PARTY’S INTELLECTUAL PROPERTY RIGHTS; AND (III) ANY
CLAIM FOR PRODUCT LIABILITY ARISING SOLELY FROM THE DEFECTIVE MANUFACTURE OF
PRODUCTS SOLD OR OFFERED BY LICENSEE USING THE MARK. NOTWITHSTANDING THE
FOREGOING AND EXCEPT FOR CLAIMS FOR PRODUCT LIABILITY, LICENSEE’S INDEMNITY
OBLIGATION HEREUNDER SHALL NOT APPLY TO THE EXTENT ANY SUCH INFRINGEMENT OR
VIOLATION IS BASED ON LICENSOR’S USE OF THE MARK OR LICENSEE’S USE OF THE MARK
IN ACCORDANCE WITH THE TERMS OF THE LICENSE AND THIS AGREEMENT. THIS INDEMNITY
SHALL NOT BE EXCLUSIVE OF OTHER REMEDIES THAT MAY BE SOUGHT BY LICENSOR. THIS
PROVISION SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT.


 


(b) BY LICENSOR. LICENSOR AGREES TO FULLY INDEMNIFY, DEFEND AND
HOLD HARMLESS LICENSEE FROM AND AGAINST ANY AND ALL CLAIMS, SUITS, ACTIONS,
DEMANDS, LIABILITIES, LOSSES AND EXPENSES (INCLUDING, WITHOUT LIMITATION,
REASONABLE ATTORNEYS’ FEES AND COSTS OF LITIGATION WHETHER INCURRED FOR
LICENSOR’S PRIMARY DEFENSE OR FOR LICENSOR’S ENFORCEMENT OF ITS INDEMNIFICATION
RIGHTS HEREUNDER) AND ANY FINES, PENALTIES, AND ASSESSMENTS (COLLECTIVELY, “CLAIMS”)
THAT RELATE TO, RESULT FROM, OR ARISE OUT OF ANY MATERIAL BREACH BY


 


5

















 


LICENSOR OF ANY
REPRESENTATION OR WARRANTY MADE BY LICENSOR IN THIS AGREEMENT, AND (II) ANY
CLAIM OF INTELLECTUAL PROPERTY AND/OR TRADEMARK INFRINGEMENT BROUGHT BY ANY
THIRD PARTY BASED ON ANY USE OF THE MARK BY LICENSOR OR BROUGHT BY ANY THIRD
PARTY BASED ON ANY PERMITTED USE OF THE MARK BY LICENSEE UNDER THIS AGREEMENT.
THIS INDEMNITY SHALL NOT BE EXCLUSIVE OF OTHER REMEDIES THAT MAY BE SOUGHT BY
LICENSEE. THIS PROVISION SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT.


 


10.                                LIMITATION OF LIABILITY. IN NO EVENT, SHALL EITHER PARTY, OR SUCH
PARTY’S RESPECTIVE OFFICERS, DIRECTORS, SHAREHOLDERS, MANGERS, MEMBERS,
EMPLOYEES OR AFFILIATES BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, INDIRECT,
INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES WHETHER BASED ON BREACH OF
CONTRACT, BREACH OF EXPRESS OR IMPLIED WARRANTY, MISREPRESENTATION, NEGLIGENCE,
STRICT LIABILITY, OR ANY OTHER LEGAL THEORY EVEN IF SUCH PARTY WAS SPECIFICALLY
ADVISED ABOUT THE POSSIBILITY OF SUCH LOSSES OR DAMAGES.


 


11.                               Ownership. LICENSOR REPRESENTS AND WARRANTS TO LICENSEE THAT LICENSOR OWNS THE
MARK AND THAT IT HAS THE RIGHT TO GRANT TO LICENSEE ALL RIGHTS, WHETHER SUCH
RIGHTS ARE EXPRESS OR IMPLIED, DESCRIBED IN THIS AGREEMENT AND THE LICENSE.
Licensee acknowledges and agrees that Licensor owns all right, title and
interest in and to Mark, and agrees that the benefit, and goodwill associated
with the use of the Mark shall inure entirely for the benefit of Licensor.
Licensee acknowledges and agrees that the rights and licenses granted to
Licensee pursuant to this Agreement are of a contractual nature only, and that
this Agreement and the License do not grant Licensee any ownership rights to
the Mark. Licensee agrees that, during the active term of the License, Licensee
will not contest or challenge Licensor’s ownership of or exclusive rights to
the Mark.


 


12.                              Assignment.


 


(a)                                  Licensor may in the future sell, assign,
convey or otherwise transfer, all or a portion of The Woodlands Waterway and/or
the Mark (along with goodwill associated with the Mark) to Town Center
Improvement District of Montgomery County, Texas (“TCID”). In the event
Licensor sells, assigns, conveys or otherwise transfers the ownership rights to
the Mark, as distinguished from a nonexclusive or exclusive license with
respect to the Mark (“Transfer of the Mark”), to TCID or any third party, such
Transfer of the Mark shall be subject to this Agreement, and such third party
assignee shall assume the Mark subject to Licensee’s License and rights to the
use the Mark as provided in this Agreement and shall assume all duties and
obligations of Licensor to Licensee under this Agreement except to the extent
that any indemnity obligations by an assignee (such as TCID) are prohibited by
law. Licensor agrees to provide written notice of such Transfer of the Mark at
least thirty (30) days prior to the closing of such Transfer of the Mark. The
License and this Agreement shall survive any such Transfer of the Mark by
Licensor or any third party assignee.


 


(b)                                 Licensee may assign, sell, convey or
otherwise transfer Licensee’s rights under the License and this Agreement to a
purchaser of the assets of Licensee’s Business


 


6

















 


or
the Hotel, to an entity that acquires a controlling interest in Licensee’s
Business or Hotel or to an entity that acquires ownership of Licensee’s
Business or Hotel by a collateral assignment resulting from any mortgage
financing, subject to such assignee having substantial financial assets to
purchase and maintain the hotel on a like level as Licensee as a first class,
full-service hotel. Licensee may not otherwise assign or sublicense its rights
under this Agreement to any third party without the express written consent of
Licensor.


 


13.                                 Notices. All notices, offers, consents, or other communications required or permitted
to be given pursuant to this Agreement shall be in writing and shall be
considered as properly given or made when actually received, if delivered
personally, by messenger, by nationally known overnight courier service, by
facsimile (with an original to follow via regular mail) or by registered or
certified U.S. mail with return receipt requested, and addressed to the address
of the intended recipient as set forth below. A Party may change its address by
giving notice in writing stating its new address to the other Party.


 


	
  If to Licensee:

  	
  Inland American Lodging
  Woodlands TRS Limited Partnership

  	
   

  
	
   

  	
  390 N. Orange Ave.

  Suite 1650

  	
   

  
	
   

  	
  Orlando, Florida 32801

  Attention: Mr. Edwin Hendricksen

  Fax No.: (407)999-8428

  	
   

  
	
   

  	
   

  	
   

  
	
  If to the Licensor:

  	
  The Woodlands Development
  Company 

  	
   

  
	
   

  	
  2201 Timberloch Place

  	
   

  
	
   

  	
  The Woodlands,Texas 77380

  
	
   

  	
  Attention: General Counsel

  Fax No. (281)719-7324

  	
   

  



 


14.                                 Governing Law. THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN CONFORMITY WITH THE LAWS OF THE
STATE OF TEXAS EXCLUSIVE OF CONFLICTS OF LAW PROVISIONS. ALL OBLIGATIONS OF THE
PARTIES CREATED HEREUNDER ARE PERFORMABLE IN MONTGOMERY COUNTY, TEXAS.


 


15.                                 Waiver of Jury Trial. THE
PARTIES WAIVE THEIR RIGHT TO A JURY TRIAL WITH RESPECT TO ALL CLAIMS AND CAUSES
OF ACTION RELATED TO OR ARISING OUT OF THE NEGOTIATION OR PERFORMANCE OF THIS
AGREEMENT.


 


16.                                 Severability. In the event that any one or more
provisions of this Agreement shall for any reason be held to be invalid,
illegal or unenforceable, any such invalid, illegal or unenforceable provision
shall be treated as modified to the least extent necessary to rectify its
invalidity, illegality or unenforceability, and shall be enforced as so
modified. If no feasible modification shall save such provision, it will be
severed from the remainder of this Agreement, as appropriate. The remaining
provisions of this Agreement shall be unimpaired, and remain in full force and
effect


 


7

















 


17.                                   Non-Waiver. A failure of either party to enforce at any time any of the
provisions of this Agreement, or to require at any time performance of any of
the provisions hereof, shall in no way affect the full right to require such
performance at any time thereafter. No waiver shall be deemed a waiver of any
other breach of the same or any other term or condition hereof.


 


18.                                   Successors and Assigns. Subject to the provisions of Section 11,
this Agreement and all of the terms and provisions hereof shall be binding upon
and shall inure to the benefit of each of the Parties and their respective
successors and permitted assigns.


 


19.                                   Merger and Amendments. This Agreement contains the entire
understanding and agreement of the Parties and supersedes any prior
understandings and written or oral agreements between them respecting this
subject matter. This Agreement may be amended only by the written consent of
the Parties hereto.


 


20.                                   Mutual Agreement; Consent.  Approval. Except as otherwise
provided elsewhere in this Agreement, if the terms and conditions hereof
require the Parties to mutually agree to, consent to or approve of some matter,
it is agreed and understood that such agreement, consent or approval will not
be unreasonably withheld, conditioned or delayed. If the terms and conditions
hereof require the Parties to negotiate or agree on a point, such negotiation
shall be undertaken and conducted by the Parties in good faith.


 


21.                                   Headings; Pronouns and Plurals. The headings in this Agreement are for the
purpose of convenience only. They are not intended to be a material part of the
Agreement, and in the event of any conflict between the heading and the text,
the text shall govern. Whenever the context may so require, any pronoun used in
this Agreement shall include the corresponding masculine, feminine or neuter
forms, and the singular form of nouns, pronouns and verbs shall include the
plural and vice versa.


 


22.                                   Third Party Beneficiary. Any agreement to perform any obligation or
pay any amount herein contained, express or implied, shall be only for the
benefit of the Licensor or Licensee, and their respective successors and
permitted assigns, and such agreements shall not inure to the benefit of any
third party whomsoever, it being the intention of the undersigned Parties that
no one shall be or be deemed to be a third-party beneficiary of this Agreement.


 


23.                                   No Presumptions. No presumption will apply in favor of a
Party in the interpretation of this Agreement or in the resolution of any
ambiguity of any provisions thereof.


 


24.                                Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original
instrument and all of which together shall constitute a single agreement.


 


NOTICE OF INDEMNIFICATION: THE PARTIES TO THIS
AGREEMENT HEREBY ACKNOWLEDGE AND AGREE THAT THIS AGREEMENT CONTAINS
INDEMNIFICATION PROVISIONS IN SECTION 9.


 


[Signatures on Following Page]


 


8

















 


IN WITNESS WHEREOF, the Parties have executed this Agreement as
of the day and year first written above,


 


 


	
   

  	
  LICENSOR

  
	
   

  	
   

  
	
   

  	
  The Woodlands
  Commercial Properties

  Company, L.P., a Texas Limited Partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
  The Woodlands Operating
  Company, L.P., a

  Texas Limited Partnership

  Its Authorized Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  LICENSEE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  INLAND
  AMERICAN LODGING

  WOODLANDS TRS LIMITED

  PARTNERSHIP, an
  Illinois limited

  partnership

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  INLAND
  AMERICAN LODGING

  WOODLANDS TRS GP, L.L.C., a

  Delaware limited liability company,

  General Partner

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  INLAND
  AMERICAN LODGING

  OPERATIONS TRS INC., a
  Delaware

  corporation, Sole Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Edwin Hendriksen

  
	
   

  	
   

  	
  Name:

  	
  Edwin
  Hendriksen

  
	
   

  	
   

  	
  Title:

  	
  Senior
  Vice President

  
									



 


9

















 


Exhibit “A”


 


Federal Registration for the Trademark “THE WOODLANDS
WATERWAY”


 


	
  Mark

  	
   

  	
  Registration
  Number

  	
   

  	
  Registration
  Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  THE WOODLANDS WATERWAY

  	
   

  	
  2555432

  	
   

  	
  April 2, 2002

  



 


10

















 


SCHEDULE 5


 


LEASE AGREEMENT


 


 


[Lease Agreement is behind this page.]


 

















 


LEASE AGREEMENT


 


This
Lease Agreement (this “Lease”)  is entered into
to be effective as of                      ,
2007, by and between INLAND AMERICAN LODGING
WOODLANDS TRS LIMITED PARTNERSHIP, an Illinois limited partnership (“Landlord”), and THE WOODLANDS OPERATING COMPANY, L.P., a
Texas limited partnership (“Tenant”). For and in consideration of the
mutual covenants contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the parties, Landlord and Tenant hereby agree as follows:


 


1.                                     LEASED PREMISES. Landlord is an Affiliate (as hereafter
defined) of Inland American Lodging Woodlands Limited Partnership, an Illinois
limited partnership (the “Owner”). Owner owns the Building and has leased the
Building to Landlord pursuant to that certain Lease Agreement of even date
herewith (the “TRS Lease”). The Landlord is also, with respect to the
Management of the Building, party to a Management Agreement with Marriott
Hotels Services, Inc. (“Manager”). Landlord hereby leases to Tenant and Tenant
hereby leases from Landlord for the rental and on the terms and conditions
herein set forth certain space designated herein as Suite 1401 and containing
approximately 840 square feet as reflected on Exhibit A attached
hereto and made a part hereof by reference (the “Premises”), on
the fourteenth floor of the building located at 1601 Lake Robins Drive, The
Woodlands, Texas 77380, and known as The Woodlands Waterway Marriott Hotel and
Convention Center (the “Building”). Landlord
grants Tenant a non-exclusive right to use the Common Areas during the Term, in
common with others and subject to the provisions of this Lease. “Common Areas”
are, and shall be limited to, all present and future areas,
facilities and equipment in the Building designated for the common use of the
occupants, guests and invitees of the Building, including, without limitation,
parking facilities (subject to payment as hereafter provided), walkways,
driveways, lobbies, landscaped areas, loading areas, public corridors, public
restrooms, stairs and elevators. Subject to the payment of applicable fees and
charges from time to time in effect for visitor parking in the parking
facilities serving the Building, Tenant and Tenant’s agents, employees,
licensees and invitees shall have the non-exclusive right to use the parking
facilities serving the Building (which shall not exceed the standard rates
charged to hotel guests and users of meeting an conference facilities in the
Building), in common with the hotel guests and users of meeting and conference
facilities in the Building, and Tenant’s invitees shall be permitted to utilize
the visitor parking spaces within such parking facilities. In addition to the
foregoing and provided no event of default exists, and subject to payment by
Tenant of applicable charges from time to time established by Landlord for
parking permits, Landlord agrees to make available to Tenant five (5) parking
permits, each for the non-exclusive use by a single automobile 24 hours a day
and 7 days a week in the so-called “East Garage”, which is immediately adjacent
to the Building.


 


2.                                     TERM. Subject to and upon the conditions set forth
herein, the term of this Lease shall be for a period of ten (10) years,
beginning on November               ,
2007 (“Commencement Date”)  and ending on the tenth (10th)
anniversary of the Commencement Date (the “Term”).


 


3.                                     USE. The Premises shall only be used and occupied
by Tenant as a marketing center, conference room, hospitality suite, and/or
office, and for other uses in support of Tenant’s and Tenant’s Affiliates’
business development, marketing and sales activities, or for other similar commercial
uses by Tenant and its Affiliates allowed by applicable law. Provided, however,
neither Tenant, nor any Affiliate of Tenant, shall have a full-time, permanent
staff in the


 


1

















 


Premises, or use the
Premises for any hotel use, condominium hotel use or other transient guest use
or as a design center/showroom (i.e., stocked with materials samples for the
buildout of tenant space). The parties acknowledge that Tenant will use the
Premises for general marketing purposes with respect to the Town Center area of
The Woodlands, including marketing for a competitive facility; however, Tenant
will not use the Premises primarily for a competitive purpose nor shall the
Premises be used by a competitor of Landlord, Manager or the Hotel. The
Landlord agrees that for purposes of this Lease that The Woodlands Operating
Company, L.P. is not a competitor of Landlord, Manager or the Hotel.


 


4.                                      SECURITY DEPOSIT. None.


 


5.                                      BASE RENT. During the Term and as part of the
consideration for Landlord’s execution of this Lease, Tenant shall pay to
Landlord annual installments of One Dollar ($1.00) (the “Base Rent”) payable at the office of Landlord
in legal tender of the United States of America, in advance, without demand,
deduction or set-off, on the Commencement Date and each anniversary thereof
during the Term. Landlord acknowledges that contemporaneously herewith Tenant
has paid to Landlord the Base Rent for the entire Term (i.e., $10.00) and that
no additional payments of Base Rent shall be required during the Term. Landlord
and Tenant acknowledge and agree that (i) this Lease is being entered into
contemporaneously with the sale of the Building by Tenant to Landlord, (ii)
Tenant would not have agreed to such sale without the lease of the Premises to
Tenant as contemplated herein, and (iii) the sales price received by Tenant
from Landlord reflects a reduction due to this Lease and such reduction
constitutes consideration for the lease of the Premises to Tenant that is in
addition to the Base Rent provided above.


 


6.                                      GROSS LEASE. Tenant leases the Premises on a gross lease
basis; and as such, included in the payment of the Base Rent herein specified,
are all taxes, insurance premiums, utilities (including, without limitation,
electricity, water, wastewater, telephone, basic cable television (consistent
with the basic cable provided in guest rooms of the Building), and high-speed
internet service available 24 hours a day and 7 days a week), heating,
ventilation and air conditioning (“HVAC”), housekeeping and janitorial
service, and costs of repairs and maintenance. However, Tenant shall pay for
all costs of repairs and maintenance for damage caused by Tenant or its guests,
invitees, employees, agents and licensees as well as long-distance phone
charges and premium cable television charges.


 


7.                                      CATERING AND HOUSEKEEPING
SERVICES. Landlord shall
provide on-demand catering and
housekeeping services to the Premises consistent with existing hotel practices.
Further, Tenant shall, subject to the payment of applicable charges charged to
hotel guests and users of meeting and conference facilities in the Building, be
entitled to utilize all other services provided to such hotel guests and users
of meeting and conference facilities. Notwithstanding the foregoing, Tenant
shall not be charged for the housekeeping services provided to the Premises.
With respect to the catering, Tenant shall be charged the same rates charged by
Landlord to other guests and invitees making comparable use of Landlord’s
catering services. Tenant shall pay to Landlord the charges for such services
within ten (10) days after Landlord renders a statement therefor to Tenant. All
past due amounts owed hereunder by Tenant shall bear interest at the rate of
twelve percent (12%) per annum or the highest lawful rate, whichever is less,
from the date due until paid. To the extent Landlord has contracted with a
hotel management company or other third-party to perform any of the services or
other obligations of Landlord under this Lease,


 


2

















 


Landlord
shall cause such hotel management company or other third-party to perform such
services and obligations in accordance with the terms and conditions of this
Lease.


 


8.                                      QUIET ENJOYMENT. Tenant, on paying the rent and performing
the covenants herein, shall and may peaceably and quietly have, hold and enjoy
the Premises for the Term.


 


9.                                      FURNITURE, FIXTURES AND
EQUIPMENT. Landlord
acknowledges that the furniture, trade fixtures and equipment and all other
personal property located in the Premises as of the Commencement Date
(collectively, “Tenant’s Property”),  is
and shall remain the property of Tenant, and Tenant may at any time and from
time to time remove and/or replace the same or install any additional such
items. Tenant acknowledges that all other fixtures and the carpeting, paneling
or other wall covering are and shall remain the property of Landlord. Tenant
may replace Tenant’s Property as aforesaid and make other alterations and
improvements to the Premises that do not impact the structural components of
the Building or the mechanical, electrical or plumbing systems of the Building
provided Tenant obtains Landlord’s prior written consent, which consent will
not be unreasonably withheld. Tenant may not make any other alterations or
improvements to the Premises without the express prior written consent of
Landlord, which consent may be given, withheld or conditioned in Landlord’s
sole discretion.


 


10.                               SUBLETTING AND ASSIGNING. Tenant shall not, without Landlord’s prior
written consent, which may be granted, conditioned or withheld in Landlord’s
sole discretion, (i) assign Tenant’s interest under this Lease, in whole or in
part, including by operation of law or otherwise (ii) mortgage or pledge the
same, and/or (iii) sublet the Premises, or any part thereof, Notwithstanding
the foregoing, Tenant may, without the consent of Landlord, (x) assign Tenant’s
interest under this Lease, in whole or in part, to an Affiliate of Tenant,
and/or (y) sublet the Premises, or any part thereof, to an Affiliate of Tenant.
Landlord shall have the right to assign or transfer, in whole or in part, its
rights and obligations hereunder and in the Building. Tenant specifically
agrees to look solely to Landlord’s interest in the Building for the recovery
of any judgment from Landlord and agrees that Landlord shall never be
personally liable for any such judgment. For purposes of this Lease, the term “Affiliate”
means any entity which directly controls, or is under common control, with
Tenant. For purposes hereof, the term “Control” means the possession of the
power to direct or cause the direction of the management and policies of such
entity. Provided, however, for purposes of this Lease, Affiliate shall not
include any entity that is a direct competitor of Manager or the Hotel.


 


11.                               FIRE AND CASUALTY. If the Premises or Building are partially or
totally destroyed by fire or other casualty and Landlord in its sole discretion
elects to repair or restore the same, then Landlord shall repair and restore
the Premises as soon as it is reasonably practicable, to substantially the same
condition in which the same were before such damage, failing which this Lease shall
be terminable as of the date of the occurrence of the damage or destruction, by
either party hereto by serving written notice to the other. Notwithstanding the
foregoing, if such damage is generally limited to the Premises, and not caused
by an act or omission of Tenant, then Landlord shall repair and restore the
Premises as soon as it is reasonably practicable, to substantially the same
condition in which the same was before such damage.


 


12.                               DEFAULT BY TENANT. If Tenant defaults in any covenant or agreement
to be performed by it and, if after written notice is given by Landlord to
Tenant, such default shall continue for a period of thirty (30) days (or such
longer period of time following diligent efforts to cure as may


 


3

















 


be
reasonably necessary to cure such default), then Landlord may, as its sole and
exclusive remedy, terminate this Lease and take full and absolute possession of
the Premises free from any subsequent rights or obligations of Tenant. Waiver
by Landlord of any right for any default of Tenant shall not constitute a
waiver of any right for either a subsequent default of the same obligation or
any other default.


 


13.                              HOLD HARMLESS. Tenant will indemnify Landlord for, and hold
Landlord harmless from and against all fines, suits, claims, demands,
liabilities, and actions (including costs and expenses of defending against
such claims) resulting or alleged to result from any damage or injury occurring
in the Premises), to the extent resulting from Tenant’s gross negligence or
willful misconduct. Landlord will indemnify Tenant for, and hold Tenant
harmless from and against all fines, suits, claims, demands, liabilities, and
actions (including costs and expenses of defending against such claims) resulting
or alleged to result from any damage or injury occurring in the Building
(excluding the Premises), to the extent resulting from Landlord’s gross
negligence or willful misconduct.


 


14.                              INSURANCE. Tenant shall procure and maintain (i)
commercial general liability insurance with a combined single limit of at least
$2,000,000 and (ii) special form property insurance covering the full
replacement cost of Tenant’s Property. Landlord or Manager shall procure and
maintain (x) commercial general liability insurance with a combined single
limit of at least $2,000,000 and (y) special form property insurance covering
the full replacement cost of the Building.


 


15.                              WAIVER OF SUBROGATION. Landlord and Tenant hereby waive any rights
each may have against the other, on account of any loss or damage occasioned to
Landlord or Tenant, as the case may be, their respective property, the Premises
or the Building, or their respective contents, arising from any risk actually
covered by valid and enforceable special form property insurance, to the extent
of such coverage. Landlord and Tenant each agree to cause an endorsement to be
furnished to their respective insurance policies recognizing this waiver of
subrogation.


 


16.                              SEVERABILITY. This Lease shall be construed in accordance
with the laws of the State of Texas. If any clause or provision of this Lease
is illegal, invalid or unenforceable, under present or future laws effective
during the Term hereof, then it is the intention of the parties hereto that the
remainder of this Lease shall not be affected thereby, and it is also the
intention of both parties that in lieu of each clause or provision that is
illegal, invalid or unenforceable, there be added as part of this Lease a
clause or provision as similar in terms to such illegal, invalid or
unenforceable clause or provision as may be possible and be legal, valid and
enforceable.


 


17.                              SUCCESSORS AND ASSIGNS. This Lease and all the covenants herein
contained shall be binding upon the parties hereto and their respective heirs,
legal representatives, successors and assigns, if any.


 


18.                               SUBORDINATION. Tenant accepts this Lease subject and
subordinate to any mortgage, deed of trust or other lien presently existing or
hereafter placed upon the Premises and to any renewals and extensions thereof,
and Tenant acknowledges that such subordination is automatic without any
further documentation. Upon demand, Tenant agrees to execute such further commercially
reasonable instruments subordinating this Lease, as Landlord may request. In
the event of a foreclosure of any such mortgage, deed of trust or other lien or
of any other action or


 


4

















 


proceeding for the
enforcement thereof, or of any sale thereunder, including acquisition of
Landlord’s interest in the Building by the holder of any such mortgage, deed of
trust or other lien, Tenant will attorn to such purchaser.


 


19.                              ACCESS BY LANDLORD. Upon reasonable advance notice to Tenant,
Landlord, its agents and employees shall have access to and the right to enter
upon the Premises at any reasonable time to provide the services to be provided
by Landlord hereunder and to make any repairs or alterations required to be
made by Landlord hereunder. Landlord and its agents and employees will use
commercially reasonable efforts not to disrupt Tenant’s business operations in
the Premises while exercising its access rights under this Section 19.


 


20.                              HOLDING OVER. If Tenant holds over after the expiration or
termination of this Lease, such hold over shall be as a tenant at will and all
of the terms and provisions of this Lease shall be applicable during such
period, provided Tenant shall pay to Landlord as and for Rent during such hold
over period, the sum of $10,000 per month and Tenant will vacate the Premises
and deliver the same to Landlord within thirty (30) days after the date of
Tenant’s receipt of written notice from Landlord to vacate the Premises. No
holding over by Tenant, whether with or without consent of Landlord, shall
operate to extend this Lease except as herein provided.


 


21.                              ENTIRE AGREEMENT. This instrument and any attached addenda or
exhibits constitute the entire agreement between Landlord and Tenant; no prior
written or prior or contemporaneous oral promises or representations shall be
binding. This Lease shall not be amended or modified except by written
instrument signed by both parties hereto. Paragraph captions herein are for
Landlord’s and Tenant’s convenience only, and neither limit nor amplify the
provisions of this instrument.


 


22.                              ATTORNEYS’ FEES. If any action or proceeding is commenced by
either party to enforce their rights under this Lease or in connection with any
default hereunder, the prevailing party in such action or proceeding shall be
entitled to recover reasonable attorneys’ fees and expenses, in addition to any
other relief awarded by the court.


 


23.                               NOTICES. Whenever in this Lease it shall be required
or permitted that notice or demand be given or served by either party to this
Lease to or on the other, such notice or demand shall be given or served and
shall not be deemed to have been given or served unless in writing and delivered
personally or forwarded by Certified or Registered Mail, postage prepaid or
other reputable common carrier guaranteeing next-day delivery, addressed as
follows:


 


	
  To the Landlord:

  	
  Inland American Lodging
  Woodlands TRS Limited Partnership

  390 N. Orange Avenue, Ste. 1650

  Orlando, Florida 32801

  Attn: Mr. Edwin Henriksen

  
	
   

  	
   

  
	
  To the Tenant:

  	
  The Woodlands Operating
  Company, L.P.

  
	
   

  	
  2201 Timberloch Place

  
	
   

  	
  The Woodlands, Texas 77380

  
	
   

  	
  Attn: 

  



 


5

















 


Such
addresses may be changed from time to time by either party by serving notice as
above provided.


 


24.                               BROKERS. Each party represents and warrants to the
other party that it has had no dealings with any real estate broker or agent
who is entitled to a commission in connection with this Lease. Each party
agrees to indemnify and hold harmless the other party from and against any
liability from all claims for commission arising from the actions of the
indemnifying party.


 


[Remainder of Page Intentionally Left Blank]


 


6

















 


IN
WITNESS WHEREOF, this Lease Agreement has been executed by the parties as of
the date first set forth above.


 


	
  LANDLORD:

  	
   

  	
  TENANT:

  
	
   

  	
   

  	
   

  
	
  INLAND
  AMERICAN LODGING

  WOODLANDS TRS LIMITED

  PARTNERSHIP, an
  Illinois limited

  partnership

  	
   

  	
  THE WOODLANDS OPERATING

  COMPANY, L.P., a
  Texas limited

  partnership

  
	
   

  	
   

  	
   

  
	
  By:

  	
  INLAND
  AMERICAN LODGING

  	
   

  	
  By:

  	
   

  
	
   

  	
  WOODLANDS
  TRS GP, L.L.C, a

  	
   

  	
  Name:

  	
   

  
	
   

  	
  Delaware limited liability
  company,

  	
   

  	
  Title:

  	
   

  
	
   

  	
  General Partner

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
      INLAND AMERICAN LODGING

  OPERATIONS TRS, INC., a Delaware

  corporation, Sole Member

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
										



 


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