Document:

Exhibit 10.161

	
	
CONTINUING GUARANTY, PAGE 1
4887-9740-7754.3
CONTINUING GUARANTY
This Continuing Guaranty (this “Guaranty”), dated as of February 8, 2022 (the “Effective
Date”), is made by LODGING FUND REIT III OP, LP, a Delaware limited partnership (the
“Guarantor”) in favor of LEGENDARY A-1 BONDS, LLC, a Delaware limited liability company
(“Lender”).
RECITALS
A.  LF3 El Paso Airport, LLC, a Delaware limited liability company and LF3 El Paso Airport
TRS, LLC, a Delaware limited liability company (collectively, “Borrower”) are indebted to Lender
pursuant to the Promissory Note in the principal amount of $9,990,000 dated the Effective Date from
Borrower payable to the order of Lender, issued pursuant to the Loan Agreement (defined below).
B.  Guarantor is the beneficial owner of a direct or indirect interest in Borrower and is an
affiliate of Borrower. The value of the consideration and benefit received and to be received by
Guarantor, directly or indirectly, as a result of Lender’s extension of credit to Borrower is a substantial
benefit to Guarantor.
C.  As a condition to extending credit to Borrower, Lender requires Guarantor to guaranty
the indebtedness of Borrower to Lender.
For good and valuable consideration, receipt and sufficiency of which is hereby acknowledged,
and to induce Lender, at its option, at any time or from time to time to lend money to Borrower, the
Guarantor hereby agrees as follows:
1. As used herein, the following terms have the meanings assigned; provided however, capitalized
terms used herein but not defined will have the meaning assigned to such terms in the Loan
Agreement:
 “Event of Default” has the meaning ascribed to such term in the Loan Agreement.
 “Guaranteed Obligations” means (a) all indebtedness of every kind and character,
whether now existing or hereafter arising, of Borrower to Lender, whether direct or indirect,
primary or secondary, joint or several, fixed or contingent and whether evidenced by note, draft,
open account, acceptance, overdraft, line of credit, endorsement, guaranty, security agreement,
loan agreement, application for letter of credit or otherwise, together with interest thereon, (b) the
full and prompt performance when due all of the covenants, agreements and other obligations
undertaken by Borrower in the Loan Documents, and (c) any and all costs, reasonable attorneys’
fees and expenses incurred or expended by Lender in collecting any of the foregoing
indebtedness/obligations or due to any default in the performance of the foregoing obligations or
in enforcing any right granted hereunder or under the other Loan Documents.
 “Debt” has the meaning ascribed to such term in the Loan Agreement.
“Loan Agreement” means that certain Loan Agreement dated of even date herewith
between Borrower and Lender.
“Loan Documents” means each and every note, deed of trust, mortgage, draft, line of
credit, loan agreement, application for letter of credit, interest rate protection agreement, guaranty
or other similar document or instrument (if any) at any time and from time to time executed in
connection with the Guaranteed Obligations, all amendments, modifications, restatements,
supplements, endorsements, renewals, extensions and rearrangements thereof and substitutions 

	
	
CONTINUING GUARANTY, PAGE 2
4887-9740-7754.3
therefor, and each and every deed of trust, mortgage, security agreement, pledge, assignment or
other similar instrument (if any), at any time and from time to time securing, in whole or in part,
the Guaranteed Obligations.
“Obligations” as defined in the Loan Agreement.
2. Guarantor unconditionally guarantees unto Lender the prompt and complete payment when due
(whether at its stated maturity, by acceleration or otherwise) and performance of the Guaranteed
Obligations in accordance with the terms of the Loan Documents.
3. This Guaranty is unconditional and absolute, and if for any reason all or any portion of the
Guaranteed Obligations is not paid promptly when due, Guarantor will promptly, and provided
that Lender shall endeavor to provide Guarantor written notice of any Monetary default under the
Loan Agreement, pay the same to Lender or any other Person entitled thereto, regardless of any
defense, right of setoff or counterclaim which Borrower may have or assert and regardless of any
other condition or contingency.
4. The obligations, covenants, agreements and duties of Guarantor under this Guaranty will in no
way be affected or impaired by reason of the happening from time to time of any of the following
with respect to the Loan Documents, without the necessity of any notice to, or further consent of
Guarantor: (a) the release or waiver, by operation of law or otherwise, of the performance or
observance by Borrower or any co-guarantor, surety, endorser or other obligor of any express or
implied agreement, covenant, term or condition in any of the Loan Documents to be performed or
observed by such party, (b) the extension of the time for the payment of all or any portion of the
Guaranteed Obligations or any other sums payable under the Loan Documents or the extension of
time for the performance of any other obligation under, arising out of or in connection with the
Loan Documents, (c) the supplementing, modification or amendment (whether material or
otherwise) of any of the Loan Documents or of the obligations of Borrower, Guarantor or any
surety for Borrower set forth in the Loan Documents or otherwise, (d) any failure, omission,
delay on the part of Lender, or any other Person, to enforce, assert or exercise any right, privilege,
power or remedy conferred on Lender, or any other Person in any of the Loan Documents, or any
action on the part of Lender, or such other Person granting indulgence or extension of kind,
(e) the release of any security under any deed of trust, mortgage, security agreement, pledge,
assignment or other Loan Document, or the release, modification, waiver or failure to enforce any
pledge, security device, insurance agreement, bond or other guaranty, surety or indemnity
agreement whatsoever, (f) the release, modification, waiver or failure to enforce any right,
benefit, privilege or interest under any contract or agreement, under which the rights of Borrower
or any other obligor have been collaterally or absolutely assigned, or in which a security interest
has been granted to Lender as direct or indirect security for payment of the Guaranteed
Obligations or performance of any obligations to Lender, (g) the voluntary or involuntary
liquidation, dissolution, sale of any collateral, marshaling of assets and liabilities, receivership,
insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement,
composition or deficiency readjustment of debt of, or other similar proceedings affecting
Borrower or any other surety for Borrower or any of the assets of Borrower, (h) any failure to
acquire, perfect or to maintain perfection of any lien on or security interest in any collateral
securing payment of the Guaranteed Obligations or any portion thereof or performance of
Borrower’s or any other person’s obligations under the Loan Documents or securing this
Guaranty, (i) the settlement, compromise or subordination of any obligation guaranteed hereby or
hereby incurred, or  (j)  the bankruptcy, insolvency, death or corporate dissolution of Borrower
(even though the same will render the Guaranteed Obligations void or unenforceable or
uncollectible, in whole or in part, as against Borrower). 

	
	
CONTINUING GUARANTY, PAGE 3
4887-9740-7754.3
5. Guarantor hereby waives marshaling of assets and liabilities, rights of offset, sale in inverse order
of alienation, notice of acceptance of this Guaranty and of any liability to which it applies or may
apply, acceleration, presentment, demand for payment, protest, notice of non-payment, notice of
dishonor, notice of acceleration, notice of intent to accelerate and all other notices and demands,
collection suit or the taking of any other action by Lender. Guarantor expressly waives each and
every right to which it may be entitled by virtue of the suretyship law of the State of Texas,
including, without limitation, any rights it may have pursuant to Rule 31, Texas Rules of Civil
Procedure, Chapter 43 of the Texas Civil Practice and Remedies Code and Section 17.001, Texas
Civil Practice and Remedies Code. Further, Guarantor expressly waives all rights, remedies,
claims and defenses based upon or related to Sections 51.003, 51.004 and 51.005 of the
Texas Property Code, to the extent the same pertain or may pertain to any enforcement of
this Guaranty.
6. This is an absolute guaranty of payment and not of collection, and Guarantor waives any right to
require that any action be brought against Borrower or any other Person. Should Lender seek to
enforce the obligations of Guarantor by arbitration or action in any court, Guarantor waives any
necessity, substantive or procedural, that a judgment previously be rendered against Borrower or
any other Person or that a separate action be brought against Borrower or any other Person. The
obligations of Guarantor hereunder are joint and several from those of Borrower or any other
Person (including any other surety for Borrower), and are primary obligations concerning which
Guarantor is the principal obligor. All waivers herein contained will be without prejudice to
Lender at their option to proceed against Borrower or any other Person, whether by separate
action or by joinder. This is a continuing guaranty, and all extensions of credit and financial
accommodations heretofore, concurrently herewith or hereafter made by Lender to Borrower will
be conclusively presumed to have been made in acceptance of and reliance on this Guaranty.
7. This Guaranty is an absolute and unconditional guaranty of the payment and performance of the
Guaranteed Obligations, is irrevocable and will continue in full force and effect until payment in
full of the Guaranteed Obligations. Guarantor will remain fully liable hereunder notwithstanding
the death of, or complete or partial release for any cause of, any one or more of Guarantor (if
more than one), or of Borrower or of anyone liable in any manner for the liabilities (including
those hereunder) incurred directly or indirectly in respect thereof or hereof, and notwithstanding
the dissolution, termination or change in personnel of any one or more of Guarantor (if more than
one).
8. Guarantor agrees that so long as all or any part of the Guaranteed Obligations remains unpaid
and/or unperformed: (a) Lender may determine in its sole discretion which remedy to pursue and
Lender may pursue any one or more remedies without prejudice to the right of Lender to pursue
any other remedy (including enforcement and collection of this Guaranty), (b) except as expressly
provided herein or agreed to by Lender, the receipt of sums by Lender through pursuit of any one
or more remedies will not prejudice the right of Lender to receive payment of sums through
pursuit of any other remedy, and the rights of Lender under the Loan Documents are cumulative,
(c) realization upon the collateral security or guaranties and the other obligations provided for in
any Loan Documents and application of the proceeds thereof to reduce the Guaranteed
Obligations will not affect or impair Lender’s right to seek enforcement of any other Loan
Documents in accordance with their respective terms, and (d) Lender may apply any sums
realized through pursuit of any remedy toward payment of principal, interest and other expenses
owing by Borrower, by Guarantor or by any other obligor or surety in such order of priority and
manner as Lender may elect in its sole discretion.
9. Guarantor (jointly and severally if more than one) represents and warrants to Lender that:
(a) Guarantor, if a legal entity, is duly organized, legally existing and in good standing under the 

	
	
CONTINUING GUARANTY, PAGE 4
4887-9740-7754.3
laws of the State of its organization and is duly qualified and/or registered to do business in each
jurisdiction where it is required to do so by applicable law, (b) this Guaranty has been duly
executed and delivered by Guarantor and constitutes a legal, valid and binding obligation of
Guarantor enforceable in accordance with its terms; (c) the execution, delivery and performance
of this Guaranty (i) do not and will not violate any agreement, certificate or instrument by which
Guarantor or its property may be bound, (ii) do not and will not violate or conflict with any law,
governmental rule or regulation or any judgment, writ, order, injunction, award or decree of any
court, arbitrator, administrative agency or other governmental authority applicable to Guarantor
or any indenture, mortgage, contract, agreement or other undertaking to which Guarantor is a
party or by which Guarantor may be bound or affected, and (iii) do not and will not require any
consent of any other Person or any consent, license, permit, authorization or other approval of,
registration with, any giving of notice to or any exemption by, any court, arbitrator,
administrative agency or other governmental authority, (d) there is no action, suit or proceeding
pending or, to the knowledge of Guarantor, threatened against or affecting Guarantor before any
court or administrative agency which might result in any material adverse change in the business
or financial condition of Guarantor, (e) Guarantor has filed or caused to be filed all federal and
state tax returns which are required to be filed, and has paid all taxes as shown on said returns and
all assessments against the property of Guarantor to the extent that such taxes and assessments
have become due and payable, (f) Guarantor is not a party to any contract or agreement which
materially and adversely affects the business, property or assets, or financial condition of
Guarantor, (g) all information supplied and statements made to Lender by or on behalf of
Guarantor prior to, contemporaneously with or subsequent to the execution of this Guaranty are
and will be true, correct, complete, valid and genuine, (h) all financial statements and applications
for credit furnished to Lender by or on behalf of Guarantor fully and accurately present the
financial condition of the subject thereof as of the dates thereof and for the periods then ended,
(i) no material adverse change has occurred in the financial condition reflected in such financial
statements and applications for credit since the respective dates thereof, (j) Guarantor is not in
default with respect to any order, writ, injunction, decree or demand of any court or other
governmental authority, or in the payment of any indebtedness for borrowed money or under the
terms or provisions of any agreement or instrument evidencing or securing any such
indebtedness, (k) the execution and delivery of this Guaranty to Lender will directly or indirectly
benefit Guarantor, (l) Guarantor is the beneficial owner of a direct or indirect interest in Borrower
and is an Affiliate of Borrower and the value of the consideration and benefit received and to be
received by Guarantor, directly or indirectly, as a result of Lender’s extension of credit to
Borrower is a substantial and direct benefit to Guarantor, (m) all of the assets listed on
Guarantor’s financial statements delivered to Lender and to be delivered to Lender are available
to pay the Guaranteed Obligations without the joinder of any other party, and (n) no
representation or warranty contained in this Guaranty and no statement contained in any
certificate, schedule, list, financial statement or other instrument furnished to Lender contains, or
will contain, any untrue statement of material fact or omits or will omit, to state a material fact
necessary to make the statement contained herein or therein not misleading.
10. Guarantor will furnish to Lender all such unaudited financial statements and other information
relating to the financial condition normally or customarily prepared by Guarantor, properties and
affairs of Guarantor as required by the Loan Agreement.
11. Guarantor will not change its address, name or identity without notifying Lender of such change
in writing.
12. If an Event of Default exists, the holder or holders of the Guaranteed Obligations may, at its or
their option, declare the unpaid balance of the Guaranteed Obligations, together with all interest
then accrued thereon, to be immediately due and payable, and thereupon the Guaranteed 

	
	
CONTINUING GUARANTY, PAGE 5
4887-9740-7754.3
Obligations will immediately be due and payable without presentation, notice of protest, other
notice of dishonor, notice of intent to accelerate, or notice of acceleration, all of which are hereby
expressly waived by Guarantor.
13. All property of Guarantor now or hereafter in the possession or custody of or in transit to Lender
for any purpose, including safekeeping, collection or pledge, for the account of Borrower or
Guarantor, or as to which Guarantor may have any right or power, will be held by Lender subject
to a lien and security interest in favor of Lender to secure payment and performance of all
obligations and liabilities of Guarantor to Lender hereunder. The balance of every account of
Guarantor with, and each claim of Guarantor against, Lender and any Lender existing from time
to time will be subject to a lien and subject to set-off against any and all liabilities of Guarantor to
Lender and such Lender, and Lender may, at any time and from time to time at their option and
without notice, appropriate and apply toward the payment of any of such liabilities the balance of
each such account or claim of Guarantor against Lender and/or such Lender, as applicable. If a
particular security instrument expressly requires an application different from that permitted
under the preceding sentence, proceeds realized by Lender from such security instrument will be
applied as provided in such instrument.
14. Guarantor expressly subordinates its rights to payment of any indebtedness owing from Borrower
to Guarantor, whether now existing or arising at any time in the future, to the prior right of
Lender to receive or require payment in full of the Guaranteed Obligations and until payment and
performance in full of the Guaranteed Obligations (and including interest accruing after any
petition under the Bankruptcy Code, which post-petition interest Guarantor agrees will remain a
claim that is prior and superior to any claim of Guarantor notwithstanding any contrary practice,
custom or ruling in proceedings under the Bankruptcy Code generally). Notwithstanding anything
to the contrary contained herein, (a) Guarantor will not have any right of subrogation in or under
any of the Loan Documents or to participate in any way therein, or in any right, title or interest in
and to any security or right of recourse for the Obligations of Borrower, until the Obligations of
Borrower have been fully and finally paid, and (b) if Guarantor is or becomes an “insider” (as
defined in Section 101 of the Bankruptcy Code) with respect to Borrower, then Guarantor hereby
irrevocably and absolutely waives any and all rights of contribution, indemnification,
reimbursement or any similar rights against Borrower with respect to this Guaranty (including
any right of subrogation, except to the extent of collateral held by Lender), whether such rights
arise under an express or implied contract or by operation of law. It is the intention of the parties
that Guarantor will not be deemed to be a “creditor” (as defined in Section 101 of the Bankruptcy
Code) of Borrower by reason of the existence of this Guaranty in the event that Borrower or
Guarantor becomes a debtor in any proceeding under the Bankruptcy Code. This waiver is given
to induce Lender to make the Loan.
15. Guarantor hereby assigns and grants to Lender for the benefit of Lender a security interest in all
indebtedness and security, if any, of Borrower to Guarantor now existing or hereafter arising,
including any dividends and payments pursuant to debtor relief or insolvency proceedings. In the
event of receivership, bankruptcy, reorganization, arrangement or other debtor relief or
insolvency proceedings involving Borrower as debtor, Lender will have the right to prove its
claim in any such proceeding so as to establish its rights hereunder and will have the right to
receive directly from the receiver, trustee or other custodian (whether or not an Event of Default
will have occurred or be continuing under any of the Loan Documents), dividends and payments
that are payable upon any obligation of Borrower to Guarantor now existing or hereafter arising,
and to have all benefits of any security therefor, until the Obligations of Borrower have been fully
and finally paid and performed. If, notwithstanding the foregoing provisions, Guarantor should
receive any payment, claim or distribution that is prohibited as provided above in this Section,
Guarantor will have absolutely no dominion over the same except to pay it immediately to 

	
	
CONTINUING GUARANTY, PAGE 6
4887-9740-7754.3
Lender. Guarantor will promptly upon request of Lender from time to time execute such
documents and perform such acts as Lender may require to evidence and perfect its interest and to
permit or facilitate exercise of its rights under this Section.
16. To the extent any dispute exists at any time between or among multiple third parties that comprise
the Guarantor, Guarantor agrees to indemnify, defend and hold Lender harmless from and against
any loss, damage, claim, demand, cost or other liability (including, without limitation, reasonable
attorneys’ fees, legal expenses and other costs) Lender may suffer as a result of such dispute. Suit
may be brought against such person jointly and/or severally or against any one or more but less
than all of them, without impairing or releasing the rights of Lender against any other such
person.
17. No delay on the part of Lender in exercising any right hereunder or failure to exercise the same
will operate as a waiver of such right, nor will any single or partial exercise of any right, power or
privilege bar any further or subsequent exercise of the same or any other right, power or privilege.
18. This Guaranty will not be changed orally, but will be changed only by agreement in writing
signed by the person against whom enforcement of such change is sought.
19. Any notice, request or other communication required or permitted to be given hereunder will be
given in accordance with the notice provisions of the Loan Agreement to the Guarantor’s address
set forth on the signature page hereof.
20. The masculine and neuter genders used herein will each include the masculine, feminine and
neuter genders and the singular number used herein will include the plural number. The words
“person” and “entity” will include individuals, corporations, partnerships, joint ventures,
associations, joint stock companies, trusts, unincorporated organizations, and governments and
any agency or political subdivision thereof.
21. This Guaranty will be binding upon Guarantor, its heirs, devisees, executors, administrators,
personal representatives, trustees, receivers, successors and assigns and will inure to the benefit
of, and be enforceable by, Lender and its successors and assigns and each and every other person
who will from time to time be or become the owner or holder of any of the Guaranteed
Obligations, and each and every reference herein to “Lender” will also include each and every
successor or holder. Guarantor will not assign its obligations hereunder without the prior written
consent of Lender. This Guaranty may be executed in multiple counterparts, and each counterpart
executed by any party will be deemed an original and will be binding upon the Person executing
the same, irrespective of whether any other Guarantor has executed that or any other counterpart
of this Guaranty. Production of any counterpart other than the one to be enforced will not be
required.
22. This Guaranty and the rights and obligations of the parties hereunder will in all respects be
governed by, and construed and enforced in accordance with, the laws of the State of Texas.
Guarantor hereby irrevocably submits to the non-exclusive jurisdiction of any State or federal
court sitting in the County of El Paso, State of Texas, over any suit, action or proceeding arising
out of or relating to this Guaranty.
23. If any other Person will, with respect to any of the Guaranteed Obligations at any time, execute
and deliver any guaranty, or any other agreement or document with substantially the same effect
as a guaranty, or grant any collateral security, the obligations of Guarantor hereunder will be joint
and several with the obligations of such other Person pursuant to such agreement or document
and the agreement or document granting such collateral security.  

	
	
CONTINUING GUARANTY, PAGE 7
4887-9740-7754.3
24. Nothing herein will be construed to cancel, amend, discharge or limit any other guaranty or
similar obligation executed by Guarantor in favor of Lender.
25. Lender will be entitled, in its sole discretion, to image or make copies of all or any selection of
the agreements, instruments, documents, and items and records governing, arising from or
relating to any of Borrower's or Guarantor’s loans, including, without limitation, the Loan
Documents, and Lender may destroy or archive the paper originals. Guarantor (a) waives any
right to insist or require that Lender produce paper originals, (b) agrees that such images will be
accorded the same force and effect as the paper originals, (c) agrees that Lender is entitled to use
such images in lieu of destroyed or archived originals for any purpose, including as admissible
evidence in any demand, presentment or other proceedings, and (d) further agrees that any
executed facsimile (faxed), scanned, or other imaged copy of the Loan Documents will be
deemed to be of the same force and effect as the original manually executed document.
26. Guarantor will (a) promptly correct any defect, error or omission in this Guaranty, and (b)
execute, acknowledge, deliver, record, and/or file such further instruments and perform such
further acts and provide such further assurances as may be necessary, desirable or proper, in
Lender’s opinion, to carry out the purposes hereof.
27. IN ACCORDANCE WITH SECTION 26.02 OF THE TEXAS BUSINESS AND
COMMERCE CODE, THE PARTIES ACKNOWLEDGE THAT THE WRITTEN LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

[Signature Page Follows] 

	
	Guarantor has executed this Guaranty on the date of aclmowledgment below to be effective as of
the date first above written.
Address for Notice.:
Lodging Fund REIT III OP, LP,
Attn: Linzey Erickson
1635 43rd Street S, Suite 205
Fargo, ND 58103
CONTINUING GUARANTY, PAGE 8
4887-9740-7754.1
LODGING FUND REIT III OP, LP,
a Delaware limited partnership
By: Lodging Fund REIT Ill, Inc.,
a Maryland corporation, its general partner
By:
Name: Samuel C. Montgomery
Title: Chief Financial Officer
With a copy to:
Legendary Capital
Attn: David Durell
644 Lovett SE, Suite B
Grand Rapids, MI 49506
/s/ Sam MontgomeryExhibit 10.162

	
	ACTIVE 60574034v1
LODGING FUND REIT III, Inc.
And
Lodging Fund REIT OP, LP
1635 43rd Street South, Suite 205
Fargo, North Dakota 58103
October 19, 2021
APF - REO, LLC and APF – Northbrook LLC
c/o Access Point Financial
1 Ravina Drive, 9th Floor
Atlanta, GA 30346
Re: Contribution Agreement dated as of September 20, 2021 by and between APF -
Northbrook LLC, an Illinois limited liability company (“Contributor”) and
Lodging Fund REIT III OP, LP, a Delaware limited liability company (“Operating
Partnership”), as amended by First Amendment to Contribution Agreement dated
as of October 4, 2021 (as so amended, the “Contribution Agreement”)
Ladies and Gentlemen:
Reference is made to the Contribution Agreement, that certain Confidential Private Offering
Memorandum dated June 1, 2018 (the “PPM”) provided to Contributor and Contributor
Equityholder by Lodging Fund REIT III, Inc., a Maryland corporation (“REIT”), and that certain
Amended and Restated Limited Partnership Agreement of Lodging Fund REIT III OP, LP dated
as of June 15, 2020 (as amended, the “OPA”).
REIT is the general partner of the Operating Partnership.
APF – REO, LLC, a South Carolina limited liability company, is the sole member of, and owns
100% of the limited liability company interests in, the Contributor (the “Contributor Equity”).
Upon the Closing (as defined in the Contribution Agreement) of the transactions contemplated by
the Contribution Agreement , among other things, the Contributor Equityholder will be subject to
the OPA and the Operating Partnership will issue Common Limited Units and Series T Limited
Units to Contributor Equityholder, as partial consideration for the Contributor Equityholder’s
contribution to the Operating Partnership of all of the Contributor Equity.  This letter agreement
(this “Letter Agreement”) sets forth our mutual understanding and agreements with respect to
certain matters more fully set forth below, shall survive the Closing, and shall not merge into, the
Contribution Agreement and, as to and with respect to the Contributor Equityholder, shall modify
the applicable provisions of, and shall control over any inconsistent provisions of, the Operating
Agreement.  Capitalized terms used but not defined herein shall have the meanings ascribed to
them in the OPA.  

	
	APF – REO, LLC and APF – Northbrook, LLC
October 19, 2021
Page 2

For good and valuable consideration, including without limitation, the mutual premises and
promises hereof, the receipt and sufficiency of which are hereby acknowledged by the parties
hereto, the parties, intending to be legally bound hereby, agree as follows:

1. No Commissions. None of REIT, Operating Partnership nor any of their respective
Affiliates is entitled to any brokerage fees, commissions, or similar payments in connection
with the issuance of the Common Limited Units or the Series T Limited Units, whether at
the time of issuance or at the time of the conversion of the Series T Limited Units into
Common Limited Units or at the time of any sale of any such Limited Partner Units.  For
purposes of clarity, Contributor Equityholder agrees and understands that Operating
Partnership and REIT have obligations to pay The M&A Group LLC for the issuance of
Series T Limited Units and that such payment does not constitute a fee, commission or
payment in connection with this paragraph.

2. Transfer of Limited Partner Units. Notwithstanding anything in the OPA to the contrary,
including, without limitation, the provisions of Section 10 of the OPA, Contributor
Equityholder shall have the right to Transfer, without the consent of the General Partner,
in one or more transactions, from time to time, all or any portion of its Limited Partner
Units to HDDA, LLC, a Delaware limited liability company (“HDDA”), an Affiliate of
Contributor Equityholder, or to any wholly owned and controlled subsidiary of HDDA so
long as such transaction complies with the transfer rules promulgated by the Securities and
Exchange Commission.

3. Series T Value. Notwithstanding anything in the OPA to the contrary, including, without
limitation, the provisions of Section 4.13.3 of the OPA and the definition of “Series T
Value” in the OPA, the Series T Limited Units shall be valued as set forth in Exhibit D to
the Contribution Agreement, which is attached hereto as Exhibit 1, and the definition of
“Series T Value” in the OPA with respect to the Contributor Equityholder’s Series T
Limited Units shall mean and refer to the value thereof calculated in accordance with
Exhibit 1 hereto (Exhibit D to the Contribution Agreement).

4. Conversion of Series T Limited Units to Common Limited Units. Notwithstanding
anything in the OPA to the contrary, including without limitation Section 4.13.3 of the
OPA, Contributor Equityholder shall have the right, upon written notice to the Operating
Partnership given prior to the expiration of thirty-six (36) months after the Closing Date,
to extend the date on which the Series T Limited Units are converted into Common Limited
Units for an additional period of twelve (12) months.

5. Distributions on Series T Limited Units. The provisions of Exhibit 1 hereto (Exhibit D to
the Contribution Agreement) and Section 2.8 of the Contribution Agreement shall control
over any inconsistent provisions of the OPA with respect to distributions upon the
Contributor Equityholder’s Series T Limited Units, including, without limitation, any
inconsistent provision of Section 4.13.2.
 

	
	APF – REO, LLC and APF – Northbrook, LLC
October 19, 2021
Page 3

6. Section 5.1.1 of OPA.  After the reference to Section “5.12” and prior to the word “is” in
the second line of Section 5.1.1 of the OPA, the words “each Partner’s Capital Account”
are hereby inserted.

7. Miscellaneous.

a. This Letter Agreement contains the entire agreement among the parties hereto with
respect to the subject matter hereof.

b. This Letter Agreement may not be amended or otherwise modified or terminated
except by the written agreement of all of the parties hereto.

c. This Letter Agreement shall inure to the benefit and bind each of the parties hereto
and their respective successor and assigns.

d. This Letter Agreement may be executed in any number of counterparts, all of which
shall constitute the same agreement, and each of which shall be an original.  Any
party may deliver a manually executed counterpart of this agreement by email in
portable document format or in an equivalent electronic format and such
electronically delivered counterpart and any print-out thereof shall have the same
force and effect as a “wet-ink” original.

e. Each entity entering or joining into this Letter Agreement has the full power and
authority and has been duly authorized by all requisite entity action to do so, and
each individual signing on behalf of any such entity has been duly authorized by or
on behalf of such entity to execute and deliver this Letter Agreement on behalf of
such entity.

f. The provisions of Sections 8.1, 8.3, 8.7, 8.9, 8.10, 8.14 and 8.15 of the Contribution
Agreement are hereby incorporated herein and made a part hereof as if reinstated
in full herein with the references in such sections to the Contribution Agreement
changed to references to this Letter Agreement.  In the case of any notice to be
provided to the REIT hereunder, the address for such notice shall be the same as
that for the Operating Partnership set forth in said Section 8.15 but addressed to the
REIT instead of the Operating Partnership.  In the case of any notice to be provided
to the Contributor Equityholder hereunder, the address for such notice shall be the
same as that for the Contributor set forth in said Section 8.15 but addressed to the
Contributor Equityholder instead of the Contributor.

[signature page follows]
 

	
	APF - REO, LLC and APF - Northbrook, LLC
October 19, 2021
Page4
Very truly yours,
REIT:
LODGING FUND REIT III, INC., a Delaware
::�oration
Nam£:R.�-'-'----
Title: Chief Investment Officer
OPERA TING PARTNERSHIP:
LODGING FUND REIT III OP, LP, a Delaware
limited partnership
By: Lodging Fund REIT III, Inc.,
a Delaware corporation,
its ge
�
neral partner
By: - � -:lc--�� ��-------­
Nam · avid . urell
Title: Chief Investment Officer
[Acceptance of Contributor and Contributor Equityholder follows.]
/s/ David Durell
/s/ David Durell

	
	19
/s/ John Patton
/s/ John Patton

	
	EXHIBIT 1
[Exhibit D to the Contribution Agreement attached] 

	
	Exhibit D
1
ACTIVE 59664012v6
EXHIBIT D
TO
CONTRIBUTION AGREEMENT
TOTAL CONSIDERATION
Total Consideration pursuant to Section 2.8 of the Agreement shall be $11,305,000, consisting of:
$3,700,000 via new financing
$6,084,000 in Series T Limited Units, equivalent to 608,400 Series T Limited Units
$1,521,000 in Common Limited Partnership Units (“Common Partnership Units”)
Distributions pursuant to Section 2.11 of the Agreement shall be:
$729,636 Base year NOI
Year 1 Distribution Schedule: No distributions
Year 2 Distribution Schedule Based on Normalized NOI
Payable as a single cash distribution 26 months post-closing
Distribution
Amount Condition
0.35% If NOI is equal to or greater than 70% but less than 80% of Base Year NOI
0.7% If NOI is equal to or greater than 80% but less than 90% of Base Year NOI
1.05% If NOI is equal to or greater than 90% but less than 100% of Base Year NOI
1.4% If NOI is equal to or greater than 100% but less than 110% of Base Year NOI
1.75% If NOI is equal to or greater than 110% but less than 120% of Base Year NOI
2.1% If NOI is equal to or greater than 120% of Base Year NOI
Year 3 Distribution Schedule
Payable as a single cash distribution 38 months post-closing
Distribution
Amount Condition
0.35% If NOI is equal to or greater than 70% but less than 77.5% of Base Year NOI
0.7% If NOI is equal to or greater than 77.5% but less than 85% of Base Year NOI
1.05% If NOI is equal to or greater than 85% but less than 92.5% of Base Year NOI
1.4% If NOI is equal to or greater than 92.5% but less than 100% of Base Year NOI
1.75% If NOI is equal to or greater than 100% but less than 107.5% of Base Year NOI
2.1% If NOI is equal to or greater than 107.5% but less than 115% of Base Year NOI
2.45% If NOI is equal to or greater than 115% but less than 122.5% of Base Year NOI
Year 4 (if extended) Distribution Schedule: No distributions
Any Series T Limited Unit distributions pursuant to Section 2.11 of the Agreement shall be held in a separate reserve
account. Such reserve account shall be used for capital expenditures in lieu of the Operating Partnership investing
operating cash into the property.
The number of Common Limited Units in the Operating Partnership shall be determined based on the formula below,
which shall constitute the Series T Value.  The Series T Value shall be determined upon (i) 36 months, or, at the option
of the Contributor, up to 48 months after the Closing Date, or (ii) the sale of (a) the Property or (b) all or substantially
all of the Operating Partnership’s assets. 

	
	Exhibit D
2
ACTIVE 59664012v6
The Applicable Cap Rate when applied to the then current trailing 12 month net operating income of the
Contributed Asset, plus up to 50% of the replacement reserve as defined in the loan documents at Closing
to the extent such amount does not exceed 50% of the PIP, less amounts incurred or accrued by the
Partnership for (i) up to $100,000 contribution towards reasonable, documented, out-of-pocket closing
costs, (ii) the unpaid principal balance of the initial $3.7MM loan advance and any additional loan advances
to the extent used to Pay PIP costs, (iii) loan assumption fees and related expenses, (iv) if applicable, costs
of defeasance and related expenses, (v) PIP, whether or not incurred, except and excluding any portion of
the PIP paid for out of loan advances, and if not incurred, in the amount of a third party PIP estimate
provided by the Operating Partnership at time of conversion, and in the event the Contributor objects to
the Operating Partnership’s third party PIP estimate, then a PIP estimate provided by a mutually agreed
upon third party, provided that the amount of the PIP if not incurred will not be taken into account in this
formula in the event a conversion occurs based on circumstances provided for in (ii)(a) above (i.e., in the
case of the sale of the Property or all or substantially all of the Operating Partnership’s assets, no PIP
estimate shall be deducted from the formula); and capital expenditures, (vi) operating cash infused by the
Partnership, (vii) any shortfall of the 8% minimum cumulative yield on General Partner’s invested capital,
and (viii) any other unrealized or unreimbursed reasonable, documented, out-of-pocket costs of operating
the Contributed Asset.
Applicable Cap Rate shall mean:
9.50 %
“12 month net operating income of the Contributed Asset” shall mean: (a) the Gross Revenue of the Property, minus
(b) Operating Expenses for the Property, for the current trailing twelve (12)-month period.
“Gross Revenue” shall include the following amounts recorded in accordance with generally accepted accounting
principles consistently applied:
(a) The entire amount of the price charged, whether wholly or partly for cash or on credit, or otherwise,
for the rental of all rooms, suites, conference rooms, restaurants, banquet facilities, and any other facilities and for all
goods, wares, and merchandise sold, leased, licensed, or delivered, and all charges for services sold or performed in,
at, upon, or from any part of, the Property;
(b) All gross income from parking fees and valet service fees billed to guests of or visitors to the
Property or any transient use of parking facilities by anyone;
(c) Without duplication, all deposits received and not refunded to the person or entity making the
deposit in connection with any transactions at such time as the Operating Partnership becomes entitled to such deposit
or the expiration of one (1) year from the date of such deposit, whichever first occurs;
(d) In-room entertainment services, communication services, Internet services, in-room
masseur/masseuse services, and the like, if charged to a guest of the Property.
“Operating Expenses” shall mean: all of the ordinary and normal expenses of operation of the Property, determined
on an annualized accrual basis, including annualized property taxes and property assessed clean energy (“PACE”)
loan payments, insurance premiums (or taxes and/or insurance impounds, if taxes and/or insurance are impounded by
Lender), reserve account equal to 4 percent (4%) of Gross Revenue for furniture, fixtures and equipment reserves,
franchise fees and royalties, telephone and internet expenses, administrative and general expenses, management fees,
utilities, repair and maintenance, salaries and wages, and advertising and marketing expenses; provided, however, that
Operating Expenses will not include:
a. depreciation and amortization;
b. non-cash items;
c. all capital items or expenditures, including construction costs and professional fees and other expenses
relating thereto and any amortization thereof;
d. costs of repair or restoration after a casualty or condemnation;
e. debt service payments made to lenders;

	
	Exhibit D
3
ACTIVE 59664012v6
f. income or franchise taxes; and
g. extraordinary one-time expenses that are not reasonably expected to be incurred in future periods.
“Net Cash Flow” means the Property Net Operating Income (including any FF&E Reserves) less Principal and
Interest, less any distributions provided on T-Unit Equity, less Borrower’s Fund Level Expenses attributable to
Property.

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