Document:

Exhibit 10.25

 

SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT

 

This Second Amendment to Asset Purchase Agreement (“Amendment”) which is effective as of November 20, 2018, between Gothic River Lodging LLC, an Iowa limited liability company, with an address of 2706 James Street, Coralville, Iowa 52241 (“Seller”), and Lodging Opportunity Fund Real Estate Investment Trust, a North Dakota real estate investment trust with an address of 1635 43rd Street South, Suite 305, Fargo, North Dakota 58103 (“Buyer”), is made with reference to the following:

 

RECITALS

 

A.            Buyer and Seller have entered into an Asset Purchase Agreement effective as October 11, 2018 (the “Asset Purchase Agreement”) for the sale of a hotel asset commonly known as the Holiday Inn Express Cedar Rapids Collins Road, located at 1230 Collins Road North East, Cedar Rapids, Iowa 52402 (the “Business”).  All capitalized terms not defined herein shall be as defined in the Asset Purchase Agreement.

 

B.            Buyer and Seller amended the Asset Purchase Agreement with a First Amendment on November 13, 2018 extending the Review Period until November 20, 2018 (the “First Amendment”).

 

C.            Buyer made an additional earnest money deposit on November 21, 2018 in the amount of two hundred and fifty thousand dollars ($250,000.00) which increases the total Deposit to seven hundred and fifty thousand dollars ($750,000.00).

 

D.            The Buyer timely exercised its termination rights under paragraph 10.2(a) and 14(iii) of the Asset Purchase Agreement on November 20, 2018. The parties are willing to reinstate the Asset Purchase Agreement and complete the transaction in accordance with the Asset Purchase Agreement, as amended by First Amendment and by the terms of this Amendment, unless further amended in writing signed by both parties.

 

AGREEMENT

 

1.              Incorporation of Recitals. The Recitals above constitute material and operative provisions in this Amendment. They are incorporated by reference.

 

2.              Withdraw of Termination. The Buyer withdraws its termination that was effective as of November 20, 2018, and the Asset Purchase Agreement, as amended by the First Amendment, is hereby reinstated.

 

3.              Purchase Price. Paragraph 2.1 is amended to read as follows: The purchase price for the Purchased Assets, including the Noncompetition Agreement, is Seven Million Seven Hundred Thousand Dollars ($7,700,000.00) (the “Purchase Price”).

 

 

For the avoidance of doubt, the price escalation for a varying Franchise Agreement term of years is removed.

 

4.              Operating Revenue. Seller shall receive all operating revenue from the Business through Closing, and Buyer will pay to Seller an additional Two Thousand Five Hundred Dollars ($2,500.00) as a one-time payment due the earlier of Closing or 5:00 PM CST on Friday, November 30, 2018. Such one-time payment shall be deemed earned when paid, shall be non-refundable, and shall not be credited against the Purchase Price.

 

5.              Due Diligence. Buyer is satisfied with its Due Diligence Review under the Review Period, and acknowledges that all contingencies under Sections 10.2(a) and 10.2(b) of the Asset Purchase Agreement are satisfied, and the Deposit is non-refundable to Buyer, except in the event of Seller’s failure to Close, or other Seller’s breach or default under the Asset Purchase Agreement.

 

6.              Seller Repair. Seller will escrow twenty thousand dollars ($20,000.00) (Escrow Funds) with the current escrow agent at First American Title Insurance Company, and the Buyer will use the Escrow Funds to restore the phone system to working order.  Any balance will be released to Seller upon Buyer’s confirmation from Capital Communications Inc. (HHC Systems) that the repair is complete.

 

7.              Closing. Closing will be on November 30, 2018 which is a result of unforeseen delays caused by the Lender and Title Company. In the event Closing has not occurred by 5:00 PM CST on December 7, 2018, the Purchase Price shall be automatically increased to Seven Million Seven Hundred Ten Thousand Dollars ($7,710,000.00).  If Closing has not occurred by 5:00 PM CST on December 14, 2018, Seller may terminate the Asset Purchase Agreement immediately upon written notice to Buyer and the Deposit shall be delivered to Seller.

 

8.              Miscellaneous.

 

8.1       Amendment. This Amendment and the Asset Purchase Agreement will not   be amended, altered, or terminated except by a writing executed by each Party.

 

8.2       Choice of Law. This Amendment and the Asset Purchase Agreement shall be governed in all respects by the laws of the State of Iowa.

 

8.3       Headings. The paragraph headings used in this Amendment are included solely for convenience.

 

8.4       Entire Agreement. This Amendment, together with the Asset Purchase Agreement and First Amendment, sets forth the entire understanding of the Parties as it relates to the subject matter contained herein.

 

 

9.              Counterpart Execution; Facsimile Execution.

 

9.1           Counterpart Execution. This Amendment may be executed in any number of counterparts, each of which shall be deemed to be an original, and all counterparts, when taken together, will constitute one and the same agreement.

 

9.2           Facsimile Execution. The parties agree that signatures on this Amendment may be delivered by facsimile or email in lieu of an original signature, and the parties agree to treat facsimile or email signatures as original signatures and agree to be bound by this provision.

 

The parties have executed this Amendment on the following dates to be effective as of the dates below, the latest of which will be known as the Effective Date.

 

	
 
    	
SELLER
    
	
 
    	
 
    
	
 
    	
Gothic River   Lodging LLC
    
	
 
    	
an Iowa limited   liability company
    
	
 
    	
 
    
	
 
    	
 
    
	
Dated:
    	
  11/30/18
    	
 
    	
/s/   John Hall
    
	
 
    	
 
    	
By: John Hall
    
	
 
    	
Its: CFO
    
				

 

	
 
    	
BUYER
    
	
 
    	
 
    
	
 
    	
Lodging   Opportunity Fund Real Estate Investment Trust
    
	
 
    	
a North Dakota   real estate investment trust
    
	
 
    	
 
    
	
 
    	
 
    
	
Dated:
    	
  11/30/18
    	
 
    	
/s/   David Durell
    
	
 
    	
 
    	
 
    	
By: David Durell
    
	
 
    	
 
    	
Its: Chief   Acquisition OfficerExhibit 10.26

 

ASSIGNMENT OF AGREEMENT FOR SALE AND PURCHASE

 

This Assignment of Agreement for Sale and Purchase (the “Assignment”) is entered into on or as of November 28, 2018. The parties to this Assignment are Lodging Opportunity Fund Real Estate Investment Trust, a North Dakota real estate investment trust (the “Assignor”), LF3 Cedar Rapids, LLC a Delaware limited liability company, and LF3 Cedar Rapids TRS, LLC, a Delaware limited liability company (collectively, the “Assignee”); all entities have an address of 1635 43rd Street South, Suite 305, Fargo, North Dakota 58103.

 

INTRODUCTORY STATEMENTS

 

A. The Assignor entered into an Asset Purchase Agreement effective as October 11, 2018 (a copy of the Asset Purchase Agreement, as amended, is attached to this Assignment as Exhibit A) with respect to the purchase of a hotel business.

 

B. The Assignor and Assignee desire that Assignor assign its interest in the Purchase and Sale Agreement to Assignee under the terms and conditions set forth in this Agreement.

 

C.  Unless otherwise agreed upon, at closing, LF3 Cedar Rapids, LLC will take ownership of the Real Estate and LF3 Cedar Rapids TRS, LLC will take ownership of all other assets.

 

In consideration of the above Introductory Statements, and the promises and provisions set forth in this Assignment, the parties agree as follows:

 

1.              Assignment.  Assignor assigns to Assignee all of Assignor’s right, title, and interest in and to the Asset Purchase Agreement, as amended.

 

2.              Acceptance by Assignee. Assignee accepts the Assignment and all rights accruing to it under the Asset Purchase Agreement, as amended, and assumes and agrees to perform all covenants and obligations of the Assignor under the Asset Purchase Agreement, as amended, from and after this Assignment’s Effective Date.

 

3.              Release of Assignor’s Liability. This Assignment does not relieve Assignor of any of its obligations to Seller under the Asset Purchase Agreement.

 

4.              Effective Date. This Assignment shall be effective upon signing.

 

5.              Counterparts; Facsimile Signatures. This Assignment may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Assignment by telecopier shall be as effective as delivery of a manually executed signature page to this Agreement.

 

 

The parties have executed this Assignment as of the date listed below each party’s signature.

 

	
 
    	
ASSIGNOR
    
	
 
    	
 
    
	
 
    	
Lodging   Opportunity Fund Real Estate Investment Trust a North Dakota Real Estate   Investment Trust
    
	
 
    
	
 
    
	
 
    	
 
    
	
 
    	
/s/   Corey R. Maple
    
	
 
    	
By: Corey R.   Maple
    
	
 
    	
Its: Chairman of   the Board of Trustees
    
	
 
    	
 
    
	
 
    	
ASSIGNEE
    
	
 
    	
 
    
	
 
    	
LF3 Cedar Rapids, LLC
    
	
 
    	
a Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
BY: Lodging Fund REIT III OP, LP
    
	
 
    	
ITS: Sole Member
    
	
 
    	
 
    
	
 
    	
By: Lodging Fund REIT III, Inc.
    
	
 
    	
Its: General Partner
    
	
 
    	
 
    
	
 
    	
/s/   Corey R. Maple
    
	
 
    	
By: Corey R. Maple
    
	
 
    	
Its: Chief Executive Officer and Secretary
    
	
 
    	
 
    
	
 
    	
LF3 Cedar Rapids TRS, LLC a Delaware   limited liability company
    
	
 
    
	
 
    	
 
    
	
 
    	
BY: Lodging Fund REIT III TRS, Inc.
    
	
 
    	
ITS: Sole Member
    
	
 
    	
 
    
	
 
    	
/s/   Corey R. Maple
    
	
 
    	
By: Corey R. Maple
    
	
 
    	
Its: Chief Executive Officer and Secretary

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