Elness Swenson Graham Architects, Inc.// RLJ II-C Austin Air, LP RLJ II-C Austin Air Lessee, LP And RLJ Lodging Fund II Acquisitions, LLC v. RLJ II-C Austin Air, LP RLJ II-C Austin Air Lessee, LP And RLJ Lodging Fund II Acquisitions, LLC// Elness Swenson Graham Architects, Inc.

Opinion

ACCEPTED 03-14-00738-CV SEE AMENDED BRF 5648230 THIRD COURT OF APPEALS FILED ON 6/15/15 AUSTIN, TEXAS 6/11/2015 7:28:52 PM JEFFREY D. KYLE CLERK Oral Argument Requested

No. 3-14-00738-CV FILED IN 3rd COURT OF APPEALS AUSTIN, TEXAS In The Court of Appeals For The 6/11/2015 7:28:52 PM Third District of Texas JEFFREY D. KYLE Clerk Elness, Swenson, Graham § From the 200th District Court Architects, Inc., § Appellant and Cross-Appellee, § § v. § § RLJII-C Austin Air, LP, § RLJ II-C Austin Air Lessee, LP § and RJL Lodging Fund II § Acquisitions, LLC, § Appellees and Cross-Appellants. § Of Travis County, Texas

APPELLEES’ BRIEF

MUNSCH, HARDT, KOPF & HARR, P.C.

Michael W. Huddleston Benton T. Wheatley State Bar No: 10148415 State Bar No. 24015171 J. Stephen Gibson Tracy McCreight State Bar No: 07866000 State Bar No. 24037064 3800 Ross Tower 401 Congress Avenue 500 North Akard Street Suite 3050 Dallas, Texas 75201 Austin, TX 78701 214-855-7500 telephone 512-391-6100 telephone 214-855-7584 facsimile 512-391-6149 facsimile

ATTORNEYS FOR APPELLEES, CROSS-APPELLANTS IDENTITY OF PARTIES AND COUNSEL

The undersigned counsel of record, pursuant to Texas Rule of Appellate

Procedure 38.2, certifies that the following persons have an interest in the outcome

of this case:

Appellant, Cross-Appellee: Elness, Swenson, Graham Architects, Inc. Appellant’s, Cross-Appellee’s Weston M. Davis Counsel on Appeal: Gregory N. Ziegler Steven R. Baggett Macdonald Devin, P.C. 1201 Elm Street 3800 Renaissance Tower Dallas, TX 75270

Appellant, Cross-Appellee’s Weston M. Davis Counsel at Trial: Gregory N. Ziegler Matthew Mumm Macdonald Devin, P.C. 1201 Elm Street 3800 Renaissance Tower Dallas, TX 75270

Appellees, Cross-Appellants: RLJ II-C Austin Air, LP RLJ II-C Austin Air Lessee, LP RLJ Lodging Fund II Acquisitions, LLC

Appellees’, Cross-Appellants’ Michael W. Huddleston Counsel on Appeal: J. Stephen Gibson Munsch Hardt Kopf & Harr, P.C. 3800 Ross Tower 500 North Akard Street Dallas, Texas 75201

i Appellees’, Cross-Appellants’ Benton T. Wheatley Counsel at Trial: Tracy McCreight Munsch Hardt Kopf & Harr, P.C. 401 Congress Avenue Suite 3050 Austin, TX 78701

By: /s/ Michael W. Huddleston

Attorney for Appellees, Cross- Appellants

ii STATEMENT CONCERNING ORAL ARGUMENT Appellees and Cross-Appellants respectfully request oral argument in this

case. Appellees and Cross-Appellants respectfully submit that oral argument will

help the Court in evaluating the issues necessary to the resolution of this appeal.

iii TABLE OF CONTENTS IDENTITY OF PARTIES AND COUNSEL .............................................................i STATEMENT CONCERNING ORAL ARGUMENT ........................................... iii TABLE OF CONTENTS ..........................................................................................iv INDEX OF AUTHORITIES.................................................................................. viii I. STATEMENT OF THE CASE ....................................................................... 1 II. ISSUES PRESENTED .................................................................................... 3 III. STATEMENT OF FACTS .............................................................................. 4 IV. SUMMARY OF ARGUMENT ....................................................................... 5 V. ARGUMENT AND AUTHORITIES ............................................................. 8 A. The Trial Court Correctly Awarded RLJ Its Attorney’s Fees............... 8 1. Chapter 38 Does Not Require a Judgment for Damages. ........... 8 a. The “Judgment” Requirement Was Eliminated by the 1977 Amendment to Chapter 38’s Predecessor.................................................. 9 b. The Texas Supreme Court and This Court Have Rejected Any Such Requirement. ........................... 9 c. The Architect’s Cases Do Not Say Otherwise. .................................................................... 11 2. Chapter 38 Only Requires a Valid Claim Timely Presented and Unpaid for Thirty Days. ............................................................ 12 a. The Architect Ignores Proper Statutory Interpretation................................................................... 12 b. The Architect Attempts to Add Words to Chapter 38 By Misapplication of Cases. ........................ 13 3. Chapter 38 Only Requires a Valid Claim Timely Presented and Unpaid for Thirty Days. ............................................................ 15 a. A “Valid Claim” Is Required.......................................... 15 1) “In [A]ddition [T]o” Does Not Imply a “Valid Claim” Requires a Judgment Awarding Damages. ............................................. 15 2) A Verdict Awarding Damages Is Enough To Have a “Valid Claim.” ...................... 16 b. Chapter 38 Requires the Valid Claim to Remain Unpaid 30 Days After Presentment. ................. 17

iv 4. RLJ Met All the Statutory Requirements for Recovering Its Attorney’s Fees. ........................................................................ 21 a. RLJ Had a Valid Claim. ................................................. 21 b. The Just Amount Owing Was Not Timely Tendered. .................................................................... 22 5. The Trial Court’s Reasoning Agreed With the Legislature’s. .. 23 B. RLJ Was Assigned the Contract and the Cause of Action and Had Standing to Sue. ................................................................................... 24 1. RLJ Owned Both the Architectural Contract Rights and Causes of Action of Action for Its Breach. ........................................... 25 a. Ausaircourt Assigned the Contract to RLJ Under the PSA and the Cause of Action By Assignment of “Intangible Assets.” ............................... 25 2. The Intangibles Assignment Transferred the Contract Cause of Action. ....................................................................................... 26 a. “Intangible Assets” Included Contract Cause of Action. ............................................................. 27 b. The Architect’s Argument Ignores Context and the Residuary Clause’s Purpose............................... 28 3. The Intangibles Assignment was “Express.” ............................ 31 4. The Supplemental Clarification May Be Considered and Removes Any Doubt That RLJ Was Assigned the Architectural Contract and the Cause of Action For Its Breach. .................... 34 5. Alternatively, The PSA Transferred The Contract Cause of Action When It Transferred the Contract. ................................ 36 6. The Architectural Contract Was Validly Assigned to RLJ. ..... 36 C. The Contract Was Admissible and Authenticated. ............................. 39 D. The Trial Court Did Not Err in Submitting the Contractual Liability Issue Concerning Structural Engineering and The Architect’s Complaints Have Not Been Preserved For Review. ........................... 41 1. The Architect Waived Its Complaint By Failing to Specially Except to the Omission of Vicarious or Respondeat Superior Allegations. ............................................................................... 41 2. The Architect Waived Its Complaint By Failing to File a Verified Denial of Liability in the Capacity Sued. ................... 43

v 3. The Architect Failed to Preserve Its Charge Complaint By Objecting On Different Grounds Than Those Now Urged. ..... 44 4. Vicarious or Respondeat Superior Liability Is Not Required When Responsibility Exists Under a Contract. ........................ 44 a. Ryan Decided Tort, Not Contractual, Duty Under a Now-Rejected Liability Theory. ....................... 44 b. The Contract Defines Contractual Duties....................... 45 5. The Architect Waived Any Complaint About the Duty Submitted By Failing to Request Any Question, Definition or Instruction. ................................................................................ 46 6. Ryan Only Addressed the Architect’s Direct, Not Vicarious, Tort Liability. ............................................................................ 46 7. Architect’s Reasoning Permits It All the Contractual Benefits Free of Burden and Risk. .......................................................... 47 8. Illegality Is Not an Issue Due to The Architect’s Failure to Plead It and Statutory Authorization for Architects Performing Structural Engineering Services. ............................................... 48 a. Any Illegality Was Waived Because It Is Not Apparent And The Architect Did Not Affirmatively Plead It. .................................................... 49 b. Seaview Hospital Does Not Say An Architect Cannot Provide Structural Engineering Services. ..................................................... 50 E. The Evidence of Diminution in Value Was Legally Sufficient. ......... 50 1. The Evidence Is Legally Sufficient If It Provides More Than a Scintilla of Factual Support. ..................................................... 51 2. Hornsby’s Testimony Was Well-Founded Based on Well- Accepted Standards and Methodologies. .................................. 52 3. The Architect’s Complaints Are Meritless. .............................. 54 a. The Evidence Supported the Answer to the Question Asked, and the Architect Waived Its Valuation Date Complaint. ........................................ 54 b. The Jury Was Provided With Actual Performance Data. .......................................................... 58 c. There Was Legally Sufficient Evidence to Support the Jury’s Verdict and Any Allocation of Damages. .................................................. 60

vi 1) The Architect Erroneously Assumes Jury Must Have Implicitly Found Others Breached. .................................................. 60 2) Evidence of Unsegregated Damages Is Legally Sufficient Evidence of Segregated Damages. ........................................... 61 3) Testimony Segregating Damages Is Not Required. ....................................................... 62 d. Comparable Sales Were a Vouchsafe, Not the Basis for Valuations. ................................................. 63 e. There Was No Recovery For “Stigma” Damages and No Double Recovery. .............................. 65 f. Lost Profits Were Not a Separate Element of Recovery, But Were Only Used As Necessary for the Texas Supreme Court’s Approved Method of Valuing Property Producing Income. .......................................................... 66 VI. CONCLUSION AND PRAYER ................................................................... 67 CERTIFICATE OF COMPLIANCE ....................................................................... 70 CERTIFICATE OF SERVICE ................................................................................ 71 APPENDIX ..............................................................................................................72

vii INDEX OF AUTHORITIES

Page(s) CASES A.D. Willis Co. v. Metal Bldg. Components, Inc., No. 03-99-00574-CV, 2000 WL 1508500 (Tex. App.—Austin Oct. 12, 2000, pet. denied) .............................. 10, 12, 15-16

Adams v. Great American Lloyd’s Ins., 891 S.W.2d 769 (Tex. App.—Austin 1995, no writ) ......................................... 27

Akin, Gump, Strauss, Hauer & Feld, L.L.P. v. E Court, Inc., No. 03-02-00714-CV, 2003 WL 21025030 (Tex. App.—Austin May 8, 2003, no pet.)......................................................... 27

Alaniz v. Jones & Neuse, Inc., 907 S.W.2d 450 (Tex. 1995) .............................................................................. 42

Am. Multi-Cinema, Inc. v. Hegar, No. 03-14-00397-CV, 2015 WL 1967877 (Tex. App.—Austin Apr. 30, 2015, no pet. h.) ................................................... 28

Associated Press v. Hicks Broad. Corp., No. C14-93-00066-CV, 1993 WL 495114 (Tex. App.—Houston [14th Dist.] Dec. 2, 1993, no writ) ........................... 40-41

Austin Hill Country Realty, Inc. v. Palisades Plaza, Inc., 948 S.W.2d 293 (Tex. 1997) .............................................................................. 10

Austin Road Co. v. Pope, 147 Tex. 430, 216 S.W.2d 563 (1949) ............................................................... 20

Avanti Servs. Inc. v. Questor Drilling, Inc., No. 01-86-00741-CV, 1987 WL 8352 (Tex. App.—Houston [1st Dist.] Mar. 26, 1987, no writ) .................................. 43

Baroid Equipment, Inc. v. Odeco Drilling, Inc., 184 S.W.3d 1 (Tex. App.—Houston [1st Dist.] 2006, pet. denied) ................... 35

Barraza v.Koliba, 933 S.W.2d 164 (Tex. App.—San Antonio 1996, writ denied) ......................... 54

viii Barry v. Jackson, 309 S.W.3d 135 (Tex. App.—Austin 2010, no pet.) .................................... 56-58

Bechtel Corp. v. CITGO Products Pipeline Co., 271 S.W.3d 898 (Tex. App.—Austin 2008, no pet.) .......................................... 62

Beech Aircraft Corp. v. Jinkins, 739 S.W.2d 19 (Tex. 1987)................................................................................. 20

Berschauer/Phillips Const. Co. v. Seattle Sch. Dist. No. 1, 881 P.2d 986 (Wash. 1994) .......................................................................... 37-38

Binion v. Brinkley, No. 2-09-121-CV, 2010 WL 396385 (Tex. App.—Houston [14th Dist.] Feb. 4, 2010) ............................................... 62

Blizzard v. Nationwide Mut. Fire Ins. Co., 756 S.W.2d 801 (Tex. App.—Dallas 1988, no writ) ....................................12, 20

BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789 (Tex. 2002)................................................................................. 23

Boerschig v. Southwestern Holdings, Inc., 322 S.W.3d 752 (Tex. App.—El Paso 2010, no pet.) ........................................ 30

Brooks v. Chevron USA Inc., No. 13-05-029-CV, 2006 WL 1431227 (Tex. App.—Corpus Christi May 25, 2006, pet. denied)(mem. op.) ........... 32-33

Browne v. King, 196 S.W. 884 (Tex. Civ. App. 1917) aff'd, 111 Tex. 330, 235 S.W. 522 (1921) ................................................................... 27

Buccaneer Homes of Ala., Inc. v. Pelis, 43 S.W.3d 586 (Tex. App.—Houston [1st Dist.] 2001, no pet.) ........................ 20

Buckner Glass & Mirror Inc. v. T.A. Pritchard Co., 697 S.W.2d 712 (Tex. App.—Corpus Christi 1985, no writ) ........................8, 22

Burroughs Wellcome Co. v. Crye, 907 S.W.2d 497 (Tex.1995)................................................................................ 51

ix Butler v. Joseph's Wine Shop, Inc., 633 S.W.2d 926 (Tex. App.—Houston [14th Dist.] 1982, writ ref'd n.r.e.) .................................. 43

C.W. 100 Louis Henna, Ltd. v. El Chico Rests. of Tex., L.P., 295 S.W.3d 748 (Tex. App.—Austin 2009, no pet.) .......................................... 21

C& H Nationwide, Inc. v. Thompson, 903 S.W.2d 315 (Tex. 1994) .............................................................................. 23

CBI NA-CON, Inc. v. UOP Inc., 961 S.W.2d 336 (Tex. App.—Houston [1st Dist.] 1997, pet. denied) .......................................... 45

Cedar Point Apartments v. Cedar Point Inv. Corp., 693 F.2d 748 (8th Cir.), cert. denied, 461 U.S. 914 (1983) ............................... 38

Ceramic Tile Int’l Inc. v. Balusek, 137 S.W.3d 722 (Tex. App.—San Antonio 2004, no pet.) ................................ 32

City of Harlingen v. Sharboneau, 48 S.W.3d 177 (Tex. 2001).....................................................................52, 55, 66

City of Keller v. Wilson, 168 S.W.3d 802 (Tex.2005)..........................................................................51, 60

City of Rockwall v. Hughes, 246 S.W.3d 621 (Tex. 2008) ........................................................................ 13-14

Coffin v. Douglas, 61 Tex. 406 (1884)(available at 1884 WL 8785) ......................................... 29-30

Collin Cnty. v. Hixon Family P'ship, Ltd., 365 S.W.3d 860 (Tex. App.—Dallas 2012, pet. denied).................................... 64

Commercial Structures and Interiors, Inc. v. Liberty Educ. Ministries, Inc., 192 S.W.3d 827 (Tex. 2006) ........................................................................26, 34

Cook v. Exxon Corp., 145 S.W.3d 776 (Tex. App.—Texarkana 2004, no pet.).................................... 32

D Design Holdings, L.P. v. MMP Corp., 339 S.W.3d. 195 (Tex. App.—Dallas 2011, no pet.) ......................................... 36

x De La Rosa v. Kaples, 812 S.W.2d 432 (Tex. App.—San Antonio 1991, writ denied) ......................... 16

Doctors Hosp. 1997, L.P. v. Sambuca Houston, L.P., 154 S.W.3d 634 (Tex. App—Houston [14th Dist.] 2004, pet. abated) ......................................... 17

Dynegy Midstream Servs., Ltd. P'ship v. Apache Corp., 294 S.W.3d 164 (Tex. 2009) .............................................................................. 27

Effel v. McGarry, 339 S.W.3d 789 (Tex. App.—Dallas 2011, pet. denied).................................... 36

Ellis County State Bank v. Keever, 888 S.W.2d 790 (Tex. 1994) .............................................................................. 23

331 S.W.3d at 420, 424-25 ...................................................................................... 31

Enriquez v. K & D Development & Construction, Inc., 567 S.W.2d 40 (Tex. Civ. App.—El Paso 1978, writ ref'd n.r.e.) ................................................. 8

Exxon Corp. v. Emerald Oil & Gas Co., L.C., 331 S.W.3d 419, 424-25 (Tex. 2010) ...........................................................31, 33

Exxon Corp. v. Pluff, 94 S.W.3d 22 (Tex. App.—Tyler 2002, pet. denied) ................................... 31-32

Farrar v. Hobby, 506 U.S. 103 (1992) ............................................................................................ 14

Fire Ins. Exchg. v. Sullivan, 192 S.W.3d 99 (Tex. App.—Houston [14th Dist.] 2006, pet. denied) ..................................12, 20

Folgers Architects Ltd. v. Kerns, 612 N.W.2d 539 (Neb. App. 2000) .................................................................... 37

Ford v. Robertson, 739 S.W.2d 3 (Tenn. Ct. App. 1987) .................................................................. 37

Gallagher v. Southern Source Packaging, LLC, 564 F.Supp.2d 503 (E.D.N.C. 2008) .................................................................. 38

xi Geis v. Colina Del Rio, LP, 362 S.W.3d 100 (Tex. App.—San Antonio 2011, pet. denied) .......................... 49

Getzschman v. Miller Chem. Co., 232 Neb. 885, 443 N.W.2d 260 (1989) .............................................................. 45

Gips v. Red Robin Corp., 366 S.W.2d 853 (Tex. Civ. App.—Houston 1963, writ ref’d n.r.e) .............................................. 38

Grapevine Excavation, Inc. v. Maryland Lloyds, 35 S.W.3d 1 (Tex. 2000)..................................................................................... 13

Green Int’l, Inc. v. Solis, 951 S.W.2d 384 (Tex. 1997) .......................................................................passim

Green v. H. E. Butt Found., 217 F.2d 553 (5th Cir. 1954) .............................................................................. 28

Guirey, Srnka & Arnold, Architects v. Phoenix, 9 Ariz. App. 70, 449 P.2d 306 (1969) ................................................................ 45

Gulf Ins. Co. v. Cunningham, A14-91-00799-CV, 1993 WL 136039 (Tex. App.—Houston [14th Dist.] Apr. 29, 1993, writ denied) ......................... 57

Gulf States Utilities Co. v. Low, 79 S.W.3d 561 (Tex. 2002)................................................................................. 59

Hagins v. E-Z Mart Stores, Inc., 128 S.W.3d 383 (Tex. App.—Texarkana 2004, no pet.).................................... 62

Halliburton, Inc. v. Admin. Review Bd., 771 F.3d 254 (5th Cir. 2014) .............................................................................. 30

Hamra v. Gulden, 898 S.W.2d 16 (Tex. App.—Dallas 1995, writ dism’d w.o.j.)........................... 20

Haubold v. Medical Carbon Research Inst., LLC, No. 03-11-00115-CV, 2014 WL 1018008 (Tex. App.—Austin Mar. 14, 2014, no pet.)(mem. op.) ........................ 11-12, 16

xii Horton v. Robinson, 776 S.W.2d 260 (Tex. App.—El Paso 1989, no writ) ........................................ 43

Houston Unlimited, Inc. Metal Processing v. Mel Acres Ranch, 389 S.W.3d 583 (Tex. App.—Houston [14th Dist.] 2012), rev'd on other grounds, 443 S.W.3d 820 (Tex. 2014) ........................................ 65

Houston Unlimited, Inc. Metal Processing v. Mel Acres Ranch, 443 S.W.3d 820 (Tex. 2014) .............................................................................. 52

Hubacek v. Ennis State Bank, 159 Tex. 166, 317 S.W.2d 30 (1958) ................................................................. 34

Ian Martin, Inc. v. Greenspoint Bank, 01-87-00631-CV, 1988 WL 45423..................................................................... 33

Imperial Lofts, Ltd. v. Imperial Woodworks, Inc., 245 S.W.3d 1 (Tex. App.—Waco 2007, pet. denied)......................................... 20

In re Cooper, 242 B.R. 767 (Bankr. S.D. Ga. 1999) ................................................................. 38

In re First State Bancorporation, 498 B.R. 322 (Bankr. D.N.M. 2013) .................................................................. 27

In re Fleckenstein, 589 S.W.2d 788 (Tex. Civ. App.—El Paso 1979, no writ) ................................ 28

In re Grotjohn, No. 03-47055DML, 2005 WL 6441386 (Bankr. N.D. Tex. July 19, 2005) ....................................................................... 28

In re Malacara, 223 S.W.3d 600 (Tex. App.—Amarillo 2007, no pet.) ...................................... 28

In re Scott, 157 B.R. 297 (Bankr. W.D. Tex. 1993), withdrawn per settlement, 162 B.R. 1004 (Bankr. W.D. Tex. Jan. 21, 1994) ....................................................................... 28

Intercontinental Group P’ship v. KB Home Lone Star, L.P., 295 S.W.3d 650 (Tex. 2009) ........................................................................11, 14

xiii Interstate Contracting Corp. v. City of Dallas, 135 S.W.3d 605 (Tex. 2004) .............................................................................. 48

Jakab v. Gran Villa Townhouses Homeowners Ass'n, Inc., 149 S.W.3d 863 (Tex. App.—Dallas 2004, no pet.) .......................................... 14

Jones v. Kelley, 614 S.W.2d 95 (Tex.1981)...................................................................... 14, 16-17

Karol v. Presido Enterprises, Inc., 622 S.W.2d 638 (Tex. App.—Austin 1981, no writ) ......................................... 22

Kelly v. Northwest Community Hospital, 66 Ill.App.3d 679, 23 Ill.Dec. 466, 384 N.E.2d 102 (1978) ............................... 45

Kennedy v. Lynd, 306 F.2d 222 (5th Cir. 1962) .............................................................................. 30

Kleas v. Clark, Thomas & Winters, P.C., No. 03-12-00755-CV, 2013 WL 4516120 (Tex. App.—Austin Aug. 21, 2013, pet. denied) .........................................21, 12

La Tierra de Simmons Familia, Ltd. v. Main Event Entm't, LP, No. 03-10-00503-CV, 2012 WL 753184 (Tex. App.—Austin Mar. 9, 2012, pet. denied).................................................. 32

Lay v. Aetna Ins. Co., 599 S.W.2d 683 (Tex. App.—Austin 1980, writ ref'd n.r.e.) ............................. 27

Lee v. City of Houston, 807 S.W.2d 290 (Tex. 1991) ................................................................................ 9

Leggett v. Brinson, 817 S.W.2d 154 (Tex. App.—El Paso 1991, no writ) ........................................ 43

Leland v. Brandal, 257 S.W.3d 204 (Tex. 2008) .............................................................................. 13

Lewis v. Adams, 979 S.W.2d 831 (Tex. App.—Houston [14th Dist.] 1998, no pet)................................................ 34

xiv Lippincott v. Whisenhunt, 58 Tex. Sup. Ct. J. 705, 2015 WL 1967025 (Tex. Apr. 27, 2015)(per curiam) ....................................................................... 12

Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572 (Tex. 2006) .............................................................................. 59

Mancorp, Inc. v. Culpepper, 802 S.W.2d 226 (Tex.1990)................................................................................ 51

Manges v. Mustang Oil Tool Co., 658 S.W.2d 725 (Tex. App.—Corpus Christi 1983, writ ref'd n.r.e.) ........................................... 17

Marange v. Marshall, 402 S.W.2d 236 (Tex. Civ. App.—Corpus Christi 1966, writ ref'd n.r.e.) ................................... 47

Martini v. Tatum, 776 S.W.2d 666 (Tex. App.—Amarillo 1989, writ denied) ............................... 16

MBM Fin. Corp. v. Woodlands Operating Co., 292 S.W.3d 660 (Tex. 2009) ........................................................................11, 16

McGalliard v. Kuhlmann, 722 S.W.2d 694 (Tex.1986)................................................................................ 60

McGinty v. Hennen, 372 S.W.3d 625 (Tex. 2012) ........................................................................54, 56

McKinley v. Drozd, 685 S.W.2d 7 (Tex. 1985)............................................................................passim

Merrell Dow Pharm., Inc. v. Havner, 953 S.W.2d 706 (Tex. 1997) .............................................................................. 57

Methodist Hosps. v. Corporate Communicators, Inc., 806 S.W.2d 879 (Tex. App.-Dallas 1991, writ denied) ...................................... 40

Minn. Mining & Mfg. Co. v. Nishika Ltd., 953 S.W.2d 733 (Tex. 1997) ........................................................................ 61-62

xv Missouri-Kansas-Texas R. Co. v. City of Dallas, 623 S.W.2d 296 (Tex. 1981) .............................................................................. 51

Montgomery Ward & Co. v. Scharrenbeck, 146 Tex. 153, 204 S.W.2d 508 (1947) ............................................................... 42

Moundsview ISD v. Buetow & Assoc., 253 N.W.2d 836 (Minn.1977) ............................................................................ 45

Mueller v. All-Temp Refrig., Inc., 2014 Ohio 2718 .................................................................................................. 32

Mustang Pipeline Co. v. Driver Pipeline Co., 134 S.W.3d 195 (Tex. 2004) .............................................................................. 11

Naylor v. Stiegler, 613 S.W.2d 546 (Tex. Civ. App.—Fort Worth 1981, no writ) .......................... 57

O and B Farms, Inc. v. Black, 300 S.W.3d 418 (Tex. App.—Houston [14th Dist.] 2009, pet. denied) ........................................ 51

Office of Pub. Util. Counsel v. P.U.C., 878 S.W.2d 598 (Tex. 1994) .............................................................................. 40

Orix Credit Alliance, Inc. v. Omnibank, N.A., 858 S.W.2d 586 (Tex. App. 1993)...................................................................... 33

Osborne v. Jauregui, Inc., 252 S.W.3d 70 (Tex. App.—Austin 2008, pet. denied) ..............................passim

Osterberg v. Peca, 12 S.W.3d 31 (Tex. 2000)................................................................................... 54

Owen v. CNA Insurance/Continental Cas. Co., 167 N.J. 450, , 771 A.2d 1208 (N.J. Super. 2001) ............................................. 38

Owen v. Vibrasonic Exploration, Inc., 694 S.W.2d 421 (Tex. App.—Houston [14th Dist.] 1985, writ ref’d n.r.e.) ................................. 33

Pagosa Oil & Gas LLC v. Marrs & Smith Ptnrs., 323 S.W.3d 203 (Tex. App.—El Paso 2010, pet. denied) .................................. 37

xvi Park v. Escalera Ranch Owners' Ass'n, Inc., No. 03-12-00314-CV, 2015 WL 737424 (Tex. App.—Austin Feb. 13, 2015, no pet. h.) ................................................... 49

Parkway Co. v. Woodruff, 901 S.W.2d 434 (Tex. 1995) .............................................................................. 66

Peissel v. Peissel, 620 S.W.2d 796 (Tex. Civ. App.—Houston [14th Dist.] 1981, no writ) ...................................... 19

Perez v. Baker Packers, 694 S.W.2d 138 (Tex. App.—Houston [14th Dist.] 1985, writ ref'd n.r.e.) .................................. 10

Petsch v. Slator, 573 S.W.2d 849 (Tex. Civ. App.—Austin 1978, writ ref'd n.r.e.) ..................... 30

Phillips v. Estate of Poulin, No. 03-05-00099-CV, 2007 WL 2980180 (Tex. App.—Austin Oct. 12, 2007, no pet.) ....................................................... 23

Phillips v. Phillips, 820 S.W.2d 785 (Tex.1991)................................................................................ 49

Pilgrim’s Pride Corp. v. Smoak, 134 S.W.3d 880 (Tex. App.—Texarkana 2004, pet. denied) ............................. 63

Playskool, Inc. v. Elsa Benson, Inc., 147 Ill. App. 3d 292, 497 N.E.2d 1199 (1986) ................................................... 47

Precision Homes, Inc. v. Cooper, 671 S.W.2d 924 (Tex. App.—Houston [14th Dist.] 1984, writ ref'd n.r.e.) ............................ 65-66

Prize Energy Res., L.P. v. Cliff Hoskins, Inc., 345 S.W.3d 537 (Tex. App.—San Antonio 2011, no pet.) ................................ 48

Provident Life & Acc. Ins. Co. v. Knott, 128 S.W.3d 211 (Tex. 2003) .............................................................................. 34

xvii Rasmusson v. LBC PetroUnited, Inc., 124 S.W.3d 283 (Tex. App.—Houston [14th Dist.] 2003, pet. denied) ..................................14, 16

Reuben H. Donnelley Corp. v. McKinnon, 688 S.W.2d 612 (Tex. App.—Corpus Christi 1985, writ ref’d)......................... 38

Richey v. Stop N Go Markets of Tex., 654 S.W.2d 430 (Tex.1983).......................................................................... 31-33

Rockwall Commons Assocs. Ltd. v. MRC Mortgage Grantor Trust I, 331 S.W.3d 500 (Tex. App.—El Paso 2010, no pet.) ........................................ 39

Rogers v. RAB Inv. Ltd., 816 S.W.2d 543 (Tex. App.—Dallas 1991, no writ) .......................................... 16

Rosell v. Central W. Motor Stages, Inc., 89 S.W.3d 643 (Tex. App.—Dallas 2002, pet. denied) ...................................... 63

Ross v. Ross, 20 Ala. 105 (1852) .............................................................................................. 32

Ross v. St. Luke’s Episcopal Hosp., 58 Tex. Sup. Ct. J. 766, 2015 WL 2009744 (Tex. May 1, 2015) ....................... 12

Rumbin v. Utica Mut. Ins. Co., 254 Conn. 259, 757 A.2d 526 (Conn. 2000) ...................................................... 38

Ryan v. Morgan Spear Associates Inc., 546 S.W.2d 678 (Tex. Civ. App.—Corpus Christi 1977, writ ref'd n.r.e.) ............................. 44-47

Sanders v. Worthington, 382 S.W.2d 910 (Tex.1964)................................................................................ 39

Seaview Hospital, Inc. v. Medicenters of Am., Inc., 570 S.W.2d 35 (Tex. Civ. App.—Corpus Christi 1978, no writ) ................. 49-50

Shoemake v. Fogel, Ltd., 826 S.W.2d 933 (Tex.1992)................................................................................ 42

xviii Simmons v. Bisland, No. 03-08-00141-CV, 2009 WL 961522 (Tex. App.—Austin Apr. 9, 2009, pet. denied)(mem. op.) ................................ 63

Southwestern Bell Tel. Co. v. DeLanney, 809 S.W.2d 493 (Tex. 1991) .............................................................................. 45

St. Anthony's Hosp. v. Whitfield, 946 S.W.2d 174 (Tex. App.—Amarillo 1997, writ denied) ............................... 47

State Dep't of Highways & Pub. Transp. v. Payne, 838 S.W.2d 235 (Tex. 1992) ........................................................................44, 46

State Farm Fire and Casualty Co. v Gandy, 925 S.W.2d 696 (Tex. 1996) .............................................................................. 36

State Farm Life Ins. Co. v. Beaston, 907 S.W.2d 430 (Tex. 1995) ........................................................................ 11-12

State v. Bristol Hotel Asset Co., 293 S.W.3d 170 (Tex. 2009) ........................................................................27, 67

Stewart Title Guar. Co. v. Sterling, 822 S.W.2d 1 (Tex. 1991).............................................................................14, 62

Tex. Lottery Comm’n v. First State Bank of DeQueen, 325 S.W.3d 628 (Tex. 2010) .............................................................................. 13

Tex. Pipe Line Co. v. Hunt, 149 Tex. 33, 228 S.W.2d 151 (Tex. 1950) ......................................................... 64

Texarkana Memorial Hospital, Inc. v. Murdock, 946 S.W.2d 936 (Tex. 1997) .............................................................................. 62

Texas Alcoholic Beverage Comm'n v. Kings Four, Inc., 583 S.W.2d 676 (Tex. Civ. App.—Austin 1979, no writ) ................................... 9

Thomas C. Cook, Inc. v. Rowhanian, 774 S.W.2d 679 (Tex. App.—El Paso 1989, writ denied) ................................. 39

THPD, Inc. v. Cont’l Imports, Inc., 260 S.W.3d 593 (Tex. App.—Austin 2008, no pet.) .......................................... 54

xix Turner, Collie & Braden, Inc. v. Brookhollow, Inc., 642 S.W.2d 160 (Tex. 1984) .............................................................................. 57

Union Carbide Corp. v. Synatzske, 438 S.W.3d 39 (Tex. 2014)................................................................................. 13

University Mews Associates v. Jeanmarie, 122 Misc.2d 434, 471 N.Y.S.2d 457 (N.Y. Sup.Ct. 1983) ................................. 38

Van Zandt v. Fort Worth Press, 359 S.W.2d 893 (Tex. 1962) .............................................................................. 13

Vance v. My Apartment Steak House of San Antonio, Inc., 677 S.W.2d 480 (Tex.1984)..........................................................................51, 56

Vanderburg v. Nocona Gen. Hosp., No. 7:02-CV-291-KA, 2008 WL 114846 (N.D. Tex. Jan. 10, 2008) ................................................................................... 27

Vann v. Bowie Sewerage Co., 127 Tex. 97, 90 S.W.2d 561 (1936) ................................................................... 31

Vernooy Architects v. Smith, 346 S.W.3d 877 (Tex. App.—Austin 2011, pet. denied) ................................... 45

Welch v. Monroe, No. 10-03-00013-CV, 2004 WL 2474504 (Tex. App.—Waco Nov. 3, 2004, no pet.) ......................................................... 31

Westminster Falcon/Trinity L.L.P. v. Chong Shin, No. 07-11-0033-CV, 2012 WL 5231851 (Tex. App.—Amarillo Oct. 23, 2012, no pet.) ................................................... 56

Whirlpool Corp. v. Camacho, 298 S.W.3d 631 (Tex. 2009) .............................................................................. 59

White v. Dennison, 752 S.W.2d 714 (Tex. App.—Dallas 1988, writ denied) ................................... 47

xx STATUTES Act of April 25, 1977, ch. 76, §1, 1977 TEX. GEN. LAWS 153 .................................. 9

Act of May 17, 1971, ch. 225, §1, 1971 TEX. GEN. LAWS 1073 ............................... 9

Act of June 6, 1979, ch. 314, §1, 1979 TEX. GEN. LAWS 718 ................................. 17

TEX. OCCUP. CODE §1001.0031(d) .......................................................................... 50

TEX. BUS. & COMM. CODE §9.110 ........................................................................... 33

TEX. BUS. & COMM. CODE §17.50(d)....................................................................... 14

TEX. BUS. & COM. CODE ANN. § 2.210(b) (West 2011) .......................................... 36

TEX. CIV. PRAC. & REM. CODE §§32.001, 32.002.................................................... 20

TEX. CIV. PRAC. & REM. CODE §33.002.................................................15, 17, 20, 23

TEX. CIV. PRAC. & REM. CODE §38.001.........................................................8, 15, 17

TEX. CIV. PRAC. & REM. CODE §38.005.............................................................13, 17

TEX. INS. CODE §541.152 ......................................................................................... 14

OTHER AUTHORITIES Black's Law Dictionary (10th ed. 2014) .................................................................. 27

Black’s Law Dictionary 117 (6th ed. 1990) ............................................................ 29

Charles R. “Skip” Watson, Jr., “The Court's Charge to the Jury,” Advanced Civil Trial Course (State Bar of Texas 2003) ................................... 55

TEX. R. CIV. P. 90 ..................................................................................................... 42

TEX. R. CIV. P. 93 ......................................................................................... 39-40, 43

TEX. R. CIV. P. 94 ..................................................................................................... 49

TEX. R. CIV. P. 274 ................................................................................................... 55

TEX. R. CIV. P. 278 ................................................................................................... 42

xxi TEX. R. CIV. P. 279 .............................................................................................46, 54

TEX. R. EVID. 201(b) ................................................................................................ 40

TEX. R. EVID. 901(10) .............................................................................................. 41

xxii I. STATEMENT OF THE CASE This is a breach of contract case arising out of severe foundation problems at

the Courtyard by Marriott Hotel, located on East Ben White Boulevard, near

Bergstrom International Airport (“Project”). (CR187) 1. RLJ II-C Austin Air, LP;

RLJ II-C Austin Air Lessee, LP; and RLJ Lodging Fund II Acquisitions, LLC

(“RLJ” collectively), sued, among others, the architect, general contractor and soils

engineer for breaching their separate contractual responsibilities related to the

Project’s construction. (CR184-218). RLJ asserted that claim as assignee of and

successor-in-interest to and assignee of the rights under the Architectural Contract

and the contract cause of action of White Lodging Services Corp. (“Owner”),

original owner of the Project. (CR1124;1063-64). The architect, Elness, Swenson,

Graham. Inc. (“Architect”), was the only remaining defendant when the case was

submitted to the jury. (CR1121-29). Due to settlements by other parties and the

trial court’s pre-trial rulings, breach of contract was the only liability theory against

the Architect. Id.

The jury found that the Architect failed to “comply with the Architectural

Contract regarding the structural engineering services required by the contract”

1 The Clerk’s Record is cited as “CR”; First Supplemental Clerk’s Record,“1SCR”; Second Supplemental Clerk’s Record, “2SCR”; Third Supplemental Clerk’s Record, “3SCR”). The Reporters Record is cited by “[Volume Number]RR” Exhibits are cited to page or pages of the Reporter’s Record on which they or the pertinent parts thereof appear. “4SCR__” refers to the supplemental clerk’s record that is being requested, but is not yet available. See n.14.

1 (“Structural Engineering Question”). (CR1126). The jury’s verdict assessed

$785,000 in damages for the breach. (CR1125-27).

After trial, the Architect moved for and the trial court allowed credit under

the one satisfaction rule for $1.17 million paid by the General Contractor and the

Soils Engineer (“Settling Defendants” collectively) in settlement of the contract

claims against them. (CR1173-79,1439,1710). The parties agreed to try the

attorney’s fees claimed under Chapter 38 of the Texas Civil Practice and Remedies

Code (“Chapter 38” 2) to the court instead of the jury. (CR201,1710).

RLJ presented evidence of its reasonable and necessary attorney’s fees for

asserting the contractual claims against the Architect and the Settling Defendants.

(3SCR3-611;2SCR1603-1605). The trial court only awarded fees for the

contractual claim against the Architect. For that claim, it determined that RLJ was

entitled to recover from the Architect $901,650.96 as reasonable attorney’s fees.

(CR1711). The trial court rendered judgment for RLJ in the principal sum of

$516,650.96. (CR1711). It arrived at this amount by adding the amount of the

damages awarded in the jury verdict with the amount of the Chapter 38 attorney’s

fees award, then subtracting the amounts paid in settlement by the Settling

Defendants. (Id.). The judgment also awarded conditional appellate attorney’s fees,

2 References to “Chapter 38” also include the 1977 and later versions of its predecessor statute, article 2226.

2 costs, and post-judgment interest. (Id.). The Architect timely filed its notice of

appeal (CR1907-1913) and RLJ timely perfected its cross-appeal (1SCR3-4).

II. ISSUES PRESENTED

A. Whether the trial court correctly allowed RLJ to recover its attorney’s fees

under Chapter 38 of the Texas Civil Practice & Remedies Code even if it

correctly applied the one satisfaction rule to offset the jury’s damage award?

B. Whether the trial court correctly determined that RLJ has standing to sue the

Architect under the assignments of rights from RLJ’s predecessors-in-

interest?

C. Whether the trial court’s determination may be further supported by

consideration of the supplemental clarification which the trial court

erroneously deemed parol evidence inappropriate for consideration?

(Appellees’ Reply Point).

D. Whether the trial court correctly ruled that the Architectural Contract was

not inadmissible hearsay and was sufficiently authenticated?

E. Whether the trial court erred in submitting the contractual liability issue

concerning structural engineering services and, in the unlikely event that it

did, whether the Architect failed to preserve the complaints it makes in this

appeal?

3 F. Whether the evidence was legally sufficient to support the damages for

diminution in value awarded by the jury?

III. STATEMENT OF FACTS

RLJ is not satisfied with the accuracy of Architect’s Statement of Facts and

includes the following as a brief statement of the facts relevant to Appellant’s

issues. The proceedings below are described in the Statement of the Case and as

necessary in the argument section of this brief. RLJ also refers the court to the

Statement of Facts in Cross-Appellant’s Brief at 6-13, and reserves to the argument

section further discussion of the facts relevant to those issues.

The Architect contracted with the Owner to design the Project. The

Architectural Contract obliged the Architect to provide architectural and structural

engineering services. (12RR39,47). Under a separate contract to which the Owner

was not a party, the Architect engaged “[o]ur Structural Engineering firm...Marlin

Bridges Associates, Inc.” (“Structural Engineer”) to design the foundation.

(12RR17-25,30,35,47,49;App.G).

Before the Project was complete, RLJ contracted to purchase the Project

from the Owner, along with numerous other hotels. (CR184-218;606-676;707-

709;App.J). Before RLJ closed the purchase of this hotel, the Project experienced

some cracking in the laundry room and around the pool area. (3RR122). RLJ was

advised that repair costs would be $50,000 (3RR187-88), and it received a credit of

4 the same amount 3 and closed the purchase. (CR626-28). After closing, the Project

began to experience cracks in partition walls, shifting door frames, and other issues

evident of foundation movement. (3RR118;4RR78-79;7RR47). Investigation

revealed the foundation design was inappropriate for the soil conditions at this site.

(4RR111). This litigation ensued.

IV. SUMMARY OF ARGUMENT None of the Architect’s complaints permit it to elude its liabilities for failing

to comply with the Architectural Contract’s concerning the provision of structural

engineering services.

Its attack on liability for RLJ’s attorney’s fees is invalid. As the verdict

established, it had a valid claim for a just amount owed that was presented and

unpaid for years, and which remained unpaid when this case was tried. Nothing in

Chapter 38 further requires the claimant to recover those damages in a judgment.

The Legislature eliminated that requirement when it amended the statute 38 years

ago. Neither it nor the Architect’s cited cases require the claimant to obtain a

judgment. The Texas Supreme Court has said so. This Court has said so.

acquired during its history that does not address the issue here: whether RLJ

satisfied Chapter 38. The alpha and omega of that inquiry is the statute itself, not

3 The Architect is incorrect to suggest this adjustment amount was for all of the Project’s foundation problems that ultimately manifested themselves. (Appellant’s Brief 5-6). It was only for the limited issues then known. (3RR187-88).

5 the language of cases, other statutes, or general concepts about attorney’s fee

recovery.

The trial court adhered to the precise language of the statute when it awarded

RLJ its attorney’s fees. Even if the one satisfaction rule applied so that credit for a

settlement during trial could preclude recovery of the jury’s damage award, the

trial court did not err in allowing RLJ to recover its attorney’s after application of

that credit.

RLJ also had standing to sue on the Architectural Contract by virtue of an

assignment of all intangible assets related to the Project. The Architect’s only

argument is that a cause of action is not an intangible asset. This court, other

jurisdictions, and even the dictionary on which the Architect bases its argument,

recognize that a cause of action is an asset that is intangible. A supplement to this

assignment made clear that it included all “causes of action” against the Architect.

The trial court erroneously ruled that it could consider the supplement, but it may

nevertheless support the trial court’s standing determination because it was not

parol evidence at all. Even if it were, the Architect was not a party to the contract

the supplement concerned and, therefore, could not invoke the parol evidence rule.

The Architect’s complaint that the Architectural Contract was inadmissible

hearsay is baseless. The contract was not offered to prove anything other than the

fact that it said what it said. Its complaint about improper authentication is equally

6 flawed. The Architect used the contract as an exhibit and proved that it was a

business record.

The Architect waived its complaint that RLJ should have been required to

prove its derivative liability for the Structural Engineer’s errors by failing to

specially except, file a verified plea that it was not liable in the capacity sued, and

failing to preserve its complaints at the charge conference. In any event, RLJ was

not obliged to establish vicarious liability because the Architect had direct,

contractual liability. Its only support to the contrary is a case that was long ago

superseded by the Texas Supreme Court.

The Architect finally challenges the sufficiency of the expert testimony to

support the jury’s diminution-in-value damage award. That testimony employed

accepted appraisal methodologies and standards. Indeed, the valuation method

used was the one the Texas Supreme Court has deemed appropriate. The valuation

date used was the date that was submitted in the court’s charge – an appropriate

date given what be considered. Criticism of the appraiser for allegedly failing to

provide actual performance data is baseless because the appraiser in fact provided

it. His testimony did not include “stigma” damages and did not include damages

for lost profits. The damages need not have been “segregated” to be legally

sufficient. Legally sufficient evidence supported the jury’s damage assessment.

7 V. ARGUMENT AND AUTHORITIES

A. The Trial Court Correctly Awarded RLJ Its Attorney’s Fees.

The Architect asserts the trial court erred in awarding RLJ Chapter 38

attorney’s fees. It argues Chapter 38 required RLJ to “recover damages” without

specifying what a “recovery” of damages is. (Appellant’s Brief 16,17). The jury

found $785,000 in damages. 4 (CR1127;App.B). Apparently, the Architect contends

the jury’s damage award does not suffice and that Texas Civil Practice &

Remedies Code §38.001 (“§38.001”) requires a judgment awarding damages to

recover attorney’s fees. The Architect’s complaint is moot if this Court rules that

the one satisfaction rule is inapplicable. 5 (Cross-Appellants’ Brief 13-58).

1. Chapter 38 Does Not Require a Judgment for Damages. The Architect’s argument is also wrong. Chapter 38 does not now require

and has not for nearly 40 years required a judgment awarding damages. McKinley

v. Drozd, 685 S.W.2d 7, 10-11 (Tex. 1985); Buckner Glass & Mirror Inc. v. T.A.

Pritchard Co., 697 S.W.2d 712, 714 (Tex. App.—Corpus Christi 1985, no writ);

Enriquez v. K & D Development & Construction, Inc., 567 S.W.2d 40, 42 (Tex.

Civ. App.—El Paso 1978, writ ref'd n.r.e.).

4 The Architect’s assertion that the jury “found” RLJ’s damages “greatly exaggerated” (Appellant’s Brief 17) is incorrect. There was no such finding. 5 RLJ’s attorney’s fees arguments are presented subject to and without waiving its arguments that the one satisfaction rule is inapplicable.

8 a. The “Judgment” Requirement Was Eliminated by the 1977 Amendment to Chapter 38’s Predecessor.

In 1977, the Legislature amended the predecessor to Chapter 38 to eliminate

“finally obtain judgment” as a condition to recovering attorney’s fees. Compare

Act of May 17, 1971, ch. 225, §1, 1971 TEX. GEN. LAWS 1073 (former article

2226), with Act of April 25, 1977, ch. 76, §1, 1977 TEX. GEN. LAWS 153;

McKinley, 685 S.W.2d at 10-11 (explaining effect of amendment and court’s

failure to notice it). If the Legislature wishes to re-impose recovery of damages in

the judgment to recover attorney’s fees, it may do so. Judicial resurrection of this

requirement after Legislative elimination would impermissibly transgress the

constitutional separation of legislative authority from judicial power. See Lee v.

City of Houston, 807 S.W.2d 290, 293 (Tex. 1991); Texas Alcoholic Beverage

Comm'n v. Kings Four, Inc., 583 S.W.2d 676, 678 (Tex. Civ. App.—Austin 1979,

no writ).

b. The Texas Supreme Court and This Court Have Rejected Any Such Requirement.

If “obtain[ing] judgment” were still necessary, the Texas Supreme Court

could not have allowed recovery of attorney’s fees in McKinley. There, the

claimant received a verdict for contract damages, but did not recover them in the

judgment because of an offsetting counterclaim. Nevertheless, the court awarded

9 attorney’s fees because the claimant met the statutory requirements without a

judgment for damages. 685 S.W.2d at 11.

This court also recognized, under circumstances very similar to those in this

case, that a party may recover Chapter 38 attorney’s fees without recovering

damages in the judgment. In A.D. Willis Co. v. Metal Bldg. Components, Inc., No.

03-99-00574-CV, 2000 WL 1508500 (Tex. App.—Austin Oct. 12, 2000, pet.

denied)(not designated for publication), the jury awarded damages for the

claimant’s breach of contract claim, but found a greater loss caused by the

claimant’s failure to mitigate. This Court ruled Chapter 38 attorney’s fees could

not be denied merely for want of damage recovery in the judgment. Id. at *5. Like

a settlement credit, failure to mitigate reduces recovery because it “tends to rebut

the measure of damages under the [plaintiff’s] claim of breach.” Austin Hill

Country Realty, Inc. v. Palisades Plaza, Inc., 948 S.W.2d 293, 300 (Tex. 1997).

This Court noted that the claimant had a “valid claim” for a “just amount” unpaid

on the thirtieth day following presentment. Because McKinley rejected a “net

recovery” requirement, this Court allowed attorney’s fees despite no judgment

awarding damages. 6 Id. at *6.

6 This reasoning is consistent with Perez v. Baker Packers, 694 S.W.2d 138, 143 (Tex. App.— Houston [14th Dist.] 1985, writ ref'd n.r.e.), in which a claimant whose damages offset by settlement credits was deemed the “successful party” entitled to recover rule 131 costs.

10 c. The Architect’s Cases Do Not Say Otherwise. The Architect’s attack rests entirely on cases saying recovery of attorney’s

fees generally requires the claimant “(1) prevail on a cause of action for which

attorney’s fees are recoverable, and (2) recover damages,” Intercontinental Group

P’ship v. KB Home Lone Star, L.P., 295 S.W.3d 650, 653 (Tex. 2009) 7; MBM Fin.

Corp. v. Woodlands Operating Co., 292 S.W.3d 660, 664, 666 (Tex. 2009)(no

proof); Green Int’l, Inc. v. Solis, 951 S.W.2d 384, 390 (Tex. 1997); State Farm

Life Ins. Co. v. Beaston, 907 S.W.2d 430, 434, 437 (Tex. 1995); see also Mustang

Pipeline Co. v. Driver Pipeline Co., 134 S.W.3d 195, 201 (Tex. 2004); Haubold v.

Medical Carbon Research Inst., LLC, No. 03-11-00115-CV, 2014 WL 1018008 at

*6, *7 (Tex. App.—Austin Mar. 14, 2014, no pet.)(mem. op.).

Closer examination of the facts in these cases reveals that “recovery” does

not require a judgment awarding damages. Instead, they hold that one cannot

recover attorney’s fees when there is no possibility of liability. In each, there was

no recovery because: (1) the jury found zero damages; (2) liability was not

established; or (3) no legally competent evidence supported awarding damages.

Intercontinental Group, 295 S.W.3d at 653, 655 (no finding); MBM Fin. Corp.,

292 S.W.3d at 664, 666 (Tex. 2009)(no proof); Mustang Pipeline Co., 134 S.W.3d

7 An example of the Architect’s superficial analysis is its assertion that this case “hold[s] that, absent recovery of damages, attorney’s fees are not recoverable under Chapter 38.” (Appellant’s Brief 15). The opinion, however, says Chapter 38 “is not controlling.” Intercontinental Group, 295 S.W.3d at 653.

11 at 201 (no proof); Solis, 951 S.W.2d at 390 (Tex. 1997)(no finding); Beaston, 907

S.W.2d at 434, 437 (no proof of damages under DTPA); Blizzard v. Nationwide

Mut. Fire Ins. Co., 756 S.W.2d 801, 806 (Tex. App.—Dallas 1988, no writ)(no

unpaid damages 8); Fire Ins. Exchg. v. Sullivan, 192 S.W.3d 99, 102, 110-11 (Tex.

App.—Houston [14th Dist.] 2006, pet. denied)(same 9); Haubold (claimant sought

no recoverable damages). None of them address a situation like McKinley or A.D.

Willis Co. in which the claim is valid but results no recovery under a judgment.

They do not, as the Architect suggests, require the recovery of damages by

judgment.

2. Chapter 38 Only Requires a Valid Claim Timely Presented and Unpaid for Thirty Days. The foregoing shows Chapter 38 does not require the recovery of damages

in a judgment. The inquiry may now focus on what Chapter 38 does require.

a. The Architect Ignores Proper Statutory Interpretation. All statutory interpretation begins with the statute’s language. Ross v. St.

Luke’s Episcopal Hosp., 58 Tex. Sup. Ct. J. 766, 2015 WL 2009744 at *3 (Tex.

May 1, 2015); Lippincott v. Whisenhunt, 58 Tex. Sup. Ct. J. 705, 2015 WL

8 In both Beaston and Blizzard, there was no breach of contract at all. The insurers paid more than the policy required. Neither claimant in those cases had a “valid claim.” See Kleas, 2013 WL 4516120, at *2. 9 In Sullivan, the insurer had also paid more than the damages later found so there was never a “valid claim” for breach of the policy or a DTPA violation that would support recovery of attorney’s fees.

12 1967025 at *1(Tex. Apr. 27, 2015)(per curiam). The goal is to ascertain the

Legislature’s intent from that language alone, Leland v. Brandal, 257 S.W.3d 204,

206 (Tex. 2008), by considering the all statutory language in context, not in

isolation. See Union Carbide Corp. v. Synatzske, 438 S.W.3d 39, 51 (Tex. 2014).

Under the guise of interpretation, Courts may not add to or remove words from an

unambiguous statute. City of Rockwall v. Hughes, 246 S.W.3d 621, 631 (Tex.

2008). Undefined, unambiguous words have their ordinary meaning. Tex. Lottery

Comm’n v. First State Bank of DeQueen, 325 S.W.3d 628, 635 (Tex. 2010);

Leland, 257 S.W.3d at 206. Further, the Legislature has rejected narrow

construction of Chapter 38 and mandates instead that it “be liberally construed to

promote its underlying purposes.” 10 TEX. CIV. PRAC. & REM. CODE §38.005. That

purpose is to discourage unnecessary litigation over just claims. McKinley, 685

S.W.2d at 10-11.

b. The Architect Attempts to Add Words to Chapter 38 By Misapplication of Cases.

The Architect’s argument ignores these well-settled rules and relies on case

language interpreting other attorney’s fees statutes or previous versions of Chapter

10 Article 2226 was also amended in 1979 to add claims for oral and written contracts and to mandate liberal statutory construction to overturn the previous rule that it should be strictly construed because recovery of attorney’s fees was contrary to common law. See, e.g., Van Zandt v. Fort Worth Press, 359 S.W.2d 893, 995 (Tex. 1962). Without intending to change the statute's meaning, in 1985 the Legislature codified the 1979 version of article 2226 into the Civil Practice and Remedies Code. Grapevine Excavation, Inc. v. Maryland Lloyds, 35 S.W.3d 1, 7 (Tex. 2000).

13 38 with language different from Chapter 38. See V.A.1.c., supra. Nothing in

Chapter 38 says the claimant must either “prevail” or “recover damages.” To

“prevail” is only required for recovery of attorney’s fees under the DTPA and

Insurance Code, not Chapter 38. TEX. BUS. & COMM. CODE §17.50(d); TEX. INS.

CODE §541.152. Nevertheless, the Architect relies on cases interpreting these

dissimilar or outdated statutes to impermissibly superimpose requirements not

supported by Chapter 38’s language. Reading words into a statute impermissibly

usurps the legislative prerogative. See Hughes, 246 S.W.3d at 631. The Texas

Supreme Court has ruled that constructions of disparate language in other

attorney's fees statutes do not control what Chapter 38 means. McKinley, 685

S.W.2d at 9; Jakab v. Gran Villa Townhouses Homeowners Ass'n, Inc., 149

S.W.3d 863, 868 (Tex. App.—Dallas 2004, no pet.). 11

11 In Solis, without acknowledging its holding in McKinley, the court included “prevail” as part of its two-part “test” for Chapter 38. 951 S.W.2d at 390. This led some courts to improperly look to federal attorney’s fees statutes with a “prevail” requirement. E.g.,, Intercontinental Group, 295 S.W.3d at 654. Even under the federal standard, RLJ “prevailed” by procuring a settlement, Farrar v. Hobby, 506 U.S. 103, 11-12 (1992); Intercontinental Group, 295 S.W.3d at 654, of its claim for damages for which all defendants must have been jointly liable if the one satisfaction rule applies. Stewart Title Guar. Co. v. Sterling, 822 S.W.2d 1, 7 (Tex. 1991). RLJ also succeeded by establishing liability and receiving a damages verdict. Several Texas Chapter 38 cases permit attorney’s fees with no damage award if the claimant recovers “something of value,” such as a decree for specific performance. Jones, 614 S.W.2d at 96, 100–01; Rasmusson v. LBC PetroUnited, Inc., 124 S.W.3d 283, 287 (Tex. App.—Houston [14th Dist.] 2003, pet. denied).

14 3. Chapter 38 Only Requires a Valid Claim Timely Presented and Unpaid for Thirty Days.

Chapter 38 only requires (1) that the claimant be represented by an attorney;

(2) that the claim be for a specified type; (3) that the claim be “valid” and (4)

presented; and (5) that the just amount owing not be tendered within 30 days after

presentment. TEX. CIV. PRAC. & REM. CODE §§38.001-.002. If these conditions are

satisfied, the claimant may recover attorney’s fees. TEX. CIV. PRAC. & REM. CODE

§38.001. In the present case, the meaning of the statutory requirements for

representation of counsel, presentment, and type of claim are not at issue.

a. A “Valid Claim” Is Required. Under §38.001, “[a] person may recover reasonable attorney’s fees … in

addition to the amount of a valid claim” for a “written contract.” TEX. CIV. PRAC.

& REM. CODE §38.001. Chapter 38 further informs that a “valid claim” is one with

a “just amount owed.” TEX. CIV. PRAC. & REM. CODE §38.002(2). As McKinley

and A. D. Willis illustrate, a “valid claim” authorizing Chapter 38 attorney’s fees

exists with a verdict of liability and resulting damages, even if award of those

damages is ultimately rendered in the judgment.

1) “In [A]ddition [T]o” Does Not Imply a “Valid Claim” Requires a Judgment Awarding Damages.

Yet, the Architect also cites cases suggesting that the phrase “in addition to

the amount of a valid claim” implies there must be some damage amount awarded

15 in the judgment to recover Chapter 38 attorney’s fees. (Appellant’s Brief 16). Its

reliance on Solis, 951 S.W.2d at 390, MBM Fin. Corp., 292 S.W.3d at 666, and

Haubold, 2014 WL 1018008 at *6, for this interpretation is misplaced. In all three,

there was no valid verdict awarding damages because the jury found no damages

or the damage finding was unsupported by competent evidence. Further,

suggesting that Chapter 38 requires either a verdict or judgment for monetary

damages ignores that Chapter 38 attorney’s fees may be recovered when only non-

monetary relief is obtained. See, e.g., Jones v. Kelley, 614 S.W.2d 95, 96, 100–01

(Tex.1981); Rasmusson v. LBC PetroUnited, Inc., 124 S.W.3d 283, 287 (Tex.

App.—Houston [14th Dist.] 2003, pet. denied); Martini v. Tatum, 776 S.W.2d 666,

668, 670 (Tex. App.—Amarillo 1989, writ denied)(contractual liability decided but

no judgment awarding monetary relief); De La Rosa v. Kaples, 812 S.W.2d 432,

433, 435 (Tex. App.—San Antonio 1991, writ denied)(same).

2) A Verdict Awarding Damages Is Enough To Have a “Valid Claim.”

As McKinley and A. D. Willis amply demonstrate, recovery of damages in a

judgment is not necessary. If the existence of a “valid claim” included a

requirement that the claimant “recover” as the Architect’s cases suggest, it is

apparent that a verdict of liability and awarding damages is “recovery” enough to

have a valid claim. Rogers v. RAB Inv. Ltd., 816 S.W.2d 543, 551 (Tex. App.—

Dallas 1991, no writ), observed, “Without a jury finding of damages or a recovery

16 of damages, there can be no award of attorney’s fees” under §38.001. By negative

implication, Solis also suggests that a jury verdict is a “recovery” by treating a zero

damages verdict as a failure to “recover.”

b. Chapter 38 Requires the Valid Claim to Remain Unpaid 30 Days After Presentment. Chapter 38 also specifies when the valid claim must exist. “Payment for the

just amount owed must not have been tendered before the expiration of the 30th

day after the claim is presented.” TEX. CIV. PRAC. & REM. CODE §38.002(3). As

already discussed, the reason why the Legislature authorized the recovery of

attorney’s fees was to encourage pre-trial settlement of valid claims and thereby

avoid unnecessary litigation over just claims. McKinley, 685 S.W.2d at 10-11;

Jones v. Kelley, 614 S.W.2d 95, 100 (Tex. 1981); see also Doctors Hosp. 1997,

L.P. v. Sambuca Houston, L.P., 154 S.W.3d 634, 638 (Tex. App—Houston [14th

Dist.] 2004, pet. abated); Manges v. Mustang Oil Tool Co., 658 S.W.2d 725, 730

(Tex. App.—Corpus Christi 1983, writ ref'd n.r.e.). Permitting recovery of Chapter

38 attorney’s fees based on the validity of the claim before events trial instead of

after it commences is “more consistent” with (1) “legislative intent” to discourage

unnecessary litigation over just claims, and (2) the statutory liberal construction

mandate to “promote its underlying purpose.” McKinley, 685 at 10-11; TEX. CIV.

PRAC. & REM. CODE §38.005; Act of June 6, 1979, 66th Leg., R.S., ch. 314, §1,

1979 TEX. GEN. LAWS 718.

17 Of course, trial results affect whether there was ever a valid claim. A finding

of no liability or zero damages, or want of legally sufficient evidence of either

establishes no valid claim ever existed. See cases cited in V.A.1.c., supra.

However, allowing a claim’s validity to be undermined by credits for settlements

that occur during trial, which is the situation here, defeats Chapter 38’s purpose.

Settlements during trial do not avoid the unnecessary expense that Chapter 38 was

intended to avoid.

The distinction between pre-trial and during trial settlements was critical to

this Court’s analysis in Osborne v. Jauregui, Inc., 252 S.W.3d 70, 75-77 (Tex.

App.—Austin 2008, pet. denied). Unlike the present Chapter 38 breach-of-contract

case, Osborne involved recovery of attorney’s fees under the DTPA, under which

the issue was whether the plaintiff “prevailed” – something Chapter 38 does not

require. See V.A.2.a., supra. However, the analogy is instructive with respect to

when the validity of the claim is measured. In Osborne, the plaintiff settled before

trial commenced with all but one defendant for an amount greater than the

damages awarded by the jury against the remaining defendant. Osborne, 252

S.W.3d at 73. RLJ, on the other hand, reached the relevant settlement after trial

commenced.

This Court recognized in Osborne that “a net recovery is not necessary for a

plaintiff to be considered a prevailing party.” Osborne, 252 S.W.3d at 76. But it

18 concluded, reasonably enough, that a party does not “prevail” at trial when it

received before trial more than it recovered at trial for tort damages that all

defendants would have jointly and severally liable for under the contribution

statute. “It is one thing to allow attorney’s fees notwithstanding an opposing

party’s success on an offsetting claim. However it is another to allow attorney’s

fees on a claim that, although successful, was paid before trial.” Id. (Emphasis

added).

The logic of Osborne implicit in the concept of what it means to “prevail” is

explicit under Chapter 38 which specifically says attorney’s fees may be recovered

if the claim is valid and unpaid for more than thirty days after presentment. It

should be noted that some cases have suggest that fees are recoverable under

Chapter 38 if the presented claim is unpaid before trial commences. Peissel v.

Peissel, 620 S.W.2d 796, 800 (Tex. Civ. App.—Houston [14th Dist.] 1981, no

writ). Cases can neither add nor subtract from Chapter 38’s plain language that the

claim need only be valid thirty days after presentment. For reasons discussed

below, resolving that discrepancy is unnecessary here.

Chapter 38’s concern with whether a valid claim that existed before a trial

begins is the basis of the so-called “exception” to McKinley disallowing attorney’s

fees if the claimant’s contract damages are fully offset by a “credit” for sums the

defendant paid. In these cases, including Osborne, the “credit” was due to

19 payments madd worade before trial so that there was no “valid claim” for a “just

amount owing” remaining when trial commenced. Blizzard, 756 S.W.2d at 806 12;

Osborne, 252 S.W.3d at 74, 76-77; Imperial Lofts, Ltd. v. Imperial Woodworks,

Inc., 245 S.W.3d 1, 7 (Tex. App.—Waco 2007, pet. denied); Buccaneer Homes of

Ala., Inc. v. Pelis, 43 S.W.3d 586, 591 (Tex. App.—Houston [1st Dist.] 2001, no

pet.); Hamra v. Gulden, 898 S.W.2d 16, 19 (Tex. App.—Dallas 1995, writ dism’d

w.o.j.); Sullivan, 192 S.W.3d at 109-110.

Assume arguendo the one satisfaction rule applies to breach of contract

claims at all or that joint liability may be based on common injury alone. Under

either assumption, if a claim’s validity were determined by whether the claimant

received a damage award under a judgment, a defendant in multi-defendant cases

would resist reasonable settlements as long as possible in hopes other defendants

would settle and allow it to escape scot-free, despite its joint liability, if those

settlement sums exceed the damages caused. Settling defendants have no

contribution claim against the hold-out under either Chapter 32 or common law

because the settlors are not judgment debtors.13 Beech Aircraft Corp. v. Jinkins,

739 S.W.2d 19, 22 (Tex. 1987)(Chapter 32); Austin Road Co. v. Pope, 147 Tex.

12 Blizzard is actually a no-breach, not a “credit,” case. See n.8, supra. 13 TEX. CIV. PRAC. & REM. CODE §§32.001, 32.002 (contribution allowed only in tort actions for “a person against whom a judgment is rendered”); TEX. CIV. PRAC. & REM. CODE §33.002 (Chapter 33 only applies to tort actions); Beech Aircraft Corp. v. Jinkins, 739 S.W.2d 19, 22 (Tex. 1987)(settlor has no right to sue for contribution).

20 430, 216 S.W.2d 563, 564-65 (1949)(common law); see Cross-Appellants’ Brief

19-21,48-51. Thus, the Architect’s suggested interpretation of Chapter 38

discourages, rather than encourages, settlement of valid claims. For these reasons,

neither the Architect’s authorities nor Osborne support a rule barring recovery of

Chapter 38 attorney’s fees if the settlement exceeding the damage award occurs

during rather than before trial.

4. RLJ Met All the Statutory Requirements for Recovering Its Attorney’s Fees. RLJ met all of Chapter 38’s necessary conditions. It had a valid claim that

was unpaid more than thirty days after presentment and remained unpaid before

trial commenced.

a. RLJ Had a Valid Claim.

A “valid” breach of contract claim requires: (1) a valid contract; (2) that the

claimant performed or was excused from performing; (3) that the defendant

breached which (4) damaged the claimant. Kleas v. Clark, Thomas & Winters,

P.C., No. 03-12-00755-CV, 2013 WL 4516120, at *2 (Tex. App.—Austin Aug. 21,

2013, pet. denied); C.W. 100 Louis Henna, Ltd. v. El Chico Rests. of Tex., L.P.,

295 S.W.3d 748, 752 (Tex. App.—Austin 2009, no pet.). The jury’s verdict

removes all doubt that RLJ’s claim was valid. (CR1126-27).

21 b. The Just Amount Owing Was Not Timely Tendered.

RLJ’s claim was first presented in August 2009, with further presentments

of its claim in August 2010 and by April 6, 2011 letter. (3SCR37-38,4SCR___ 14).

The Architect did not respond to these presentments. (3SCR38). Assume arguendo

that the jury’s verdict was – as the Architect contended– for “indivisible” damages

for which the Architect and the Settling Defendants were jointly liable, RLJ did not

– unlike the claimant in Osborne – settle for a total amount greater than the jury’s

damage award until during the 2014 trial, long after the claim was presented.

(CR1080-81,1174,1710;7RR105-108). In that hypothetical case, the jury’s finding

established that the “just amount owing” was $785,000 (CR1127) which was not

timely paid. Even if the one satisfaction rule applied, which it does not, that is all

that was necessary. “If a plaintiff meets the requirements of [the attorney’s fee

statute], [t]he [plaintiff] is entitled to attorney's fees. Karol v. Presido Enterprises,

Inc., 622 S.W.2d 638, 640 (Tex. App.—Austin 1981, no writ); see also Buckner

Glass & Mirror Inc. v. T.A. Pritchard Co., 697 S.W.2d 712, 714 (Tex. App.—

Corpus Christi 1985, no writ)(decided under post-1977 amendment to article

14 Exhibits 5 and 6 to Amended Attorney’s Fees Affidavit were included in RLJ’s request for the accompanying motion to be included in the Clerk’s Record, but appear to have been omitted. RLJ is requesting supplementation to include them.

22 2226). Thus, RLJ satisfied Chapter 38’s timing requirement regarding its valid

claim. TEX. CIV. PRAC. & REM. CODE §38.002(3). 15

5. The Trial Court’s Reasoning Agreed With the Legislature’s. The Architect alleges that the trial court was “creat[ing] its own rule of law”

by ruling based on the settlement’s timing. (Appellant’s Brief 15). To the contrary,

the trial court here correctly distinguished settlements before trial from those that

occur during trial. (CR1439-41). The trial court was not legislating or improvising.

It simply analyzed the language of Chapter 38 more carefully than the Architect. 16

The Architect also attacks the trial court’s reasoning for treating attorney’s

fees as damages. This criticism assumes attorney’s fees cannot be recovered or

considered “part of the amount of the judgment” unless other damages are

recovered. (Appellant’s Brief 16). The Architect cites C& H Nationwide, Inc. v.

Thompson, 903 S.W.2d 315, 325-26 (Tex. 1994), and Ellis County State Bank v.

Keever, 888 S.W.2d 790, 797n.13 (Tex. 1994), without mentioning they construe

“amount of the judgment” in the pre-judgment interest statute, not Chapter 38.

Indeed, “amount of the judgment” appears nowhere in Chapter 38.

15 §38.002 also requires presentment and representation by counsel. It is undisputed that RLJ’s claim was presented and it was represented by counsel. (3SCR31,37-38). 16 Unlimited by findings or conclusions, the judgment must be upheld under any theory supported by evidence. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex. 2002); Phillips v. Estate of Poulin, No. 03-05-00099-CV, 2007 WL 2980180, at *4 (Tex. App.— Austin Oct. 12, 2007, no pet.). The very letter ruling the Architect criticizes states that it does not limit the ruling’s bases and incorporates previous admonitions to that effect. (CR1057,1437).

23 Chapter 38 does not require recovery of damages under a judgment to

authorize attorney’s fees. Whether attorney’s fees are “damages” is beside the

point. It is still worth noting, however, the Legislature considered attorney’s fees as

“damages” when it eliminated the “finally obtain judgment” requirement in 1977.

The Committee Report for the 1977 amendment states, “Even in a lawsuit

involving a lot of money, the losing party in effect prevents the winner from

getting the full amount, because the winner must pay his attorney. Either way, it's

not right for a person to be deprived of his full damages from a wrongdoer.”

(emphasis added; available from the Texas Legislative Reference Library at

http://www.lrl.state.tx.us/scanned/hroBillAnalyses/65-0/HB452.pdf;App.K).

RLJ was entitled to attorney’s fees. It met all of Chapter 38’s requirements.

Nothing further required RLJ to recover a judgment for damages to recover its

attorney’s fees. The Architect cites no authority addressing the effect of post-trial

settlement credits. Authorities interpreting other statutes have no bearing on

Chapter 38. Even if they did, RLJ “prevailed.”

B. RLJ Was Assigned the Contract and the Cause of Action and Had Standing to Sue. On three separate occasions, the Architect has tried and failed to convince

two different trial judges that RLJ could not sue because it did not have the

necessary consensual assignment of rights under the Architectural Contract.

(CR220,1083-84). The outcome can be no different here.

24 1. RLJ Owned Both the Architectural Contract Rights and Causes of Action of Action for Its Breach.

The Owner and the Architect were the original parties to the Architectural

Contract. (CR463;App.G). With the Architect’s consent, the Owner assigned to

South Ausaircourt, L.P. (“Ausaircourt”) “all of [the Owner’s] interest … in and to

that certain Standard Form Agreement Between Owner and Architect … date[d] …

January 1, 2005 ….” (CR578;App.L). There is no dispute that the Owner

effectively assigned its rights under the Architectural Contract to Ausaircourt.

(Appellant’s Brief 19). The Architect does not question that Ausaircourt owned the

contract cause of action against it. (Appellant’s Brief 21). The Architect’s first

challenge to the trial court’s summary judgment is limited to whether Ausaircourt

effectively and validly transferred the cause of action to RLJ. (Appellant’s Brief

19,28).

a. Ausaircourt Assigned the Contract to RLJ Under the PSA and the Cause of Action By Assignment of “Intangible Assets.” After the Project was substantially completed, many properties, including

the Project, were contracted to be sold pursuant to a “New Hotels Purchase and

Sale Agreement” (“PSA”). (CR605-676). Under the PSA, the Owner sold

Ausaircourt “all contracts, agreements … and warranties covering the design,

development, construction, operations, maintenance and repair of the Property….”

(CR 613[“Assets” defined];615[“Contracts” defined]; 619[“Property” defined];

25 621[sales agreement]; App.J). At closing, Ausaircourt assigned RLJ “all of

[Ausaircourt]’s right, title and interest in and to all licenses, permits and all other

intangible assets relating to the [Project]….” (CR701; emphasis added; App.M).

(“Intangibles Assignment”).

RLJ has a clear chain of ownership from Ausaircourt through the PSA and

Intangibles Assignment of both the Architectural Contract and the cause of action.

Under the PSA’s authorization for supplemental documentation effecting the

transaction (CR656), a later “Supplemental Clarification of Assignment”

(“Supplemental”) specified the Intangibles Assignment “intended to assign”

Ausaircourt’s rights in the Architectural Contract “along with all intangibles,

including but not limited to causes of action or claims owned by [Ausaircourt]

against [the Architect].” (CR602-04; emphasis added; App.N).

2. The Intangibles Assignment Transferred the Contract Cause of Action. The plain language of the Intangibles Assignment conveyed the cause of

action to RLJ. Assignments are construed like any contract through rules of

construction to ascertain the parties’ intent expressed in the written assignment.

Commercial Structures and Interiors, Inc. v. Liberty Educ. Ministries, Inc., 192

S.W.3d 827, 832-33 (Tex. 2006). Terms are given “their plain and ordinary

meaning unless the instrument indicates the parties intended a different meaning.”

26 Dynegy Midstream Servs., Ltd. P'ship v. Apache Corp., 294 S.W.3d 164, 168 (Tex.

2009).

a. “Intangible Assets” Included Contract Cause of Action. The plain, ordinary meaning of an “intangible asset” includes choses in

action or causes of action. An “intangible asset” is “[a]ny nonphysical asset or

resource that can be amortized or converted to cash, such as patents, goodwill, and

computer programs, or a right to something, such as services paid for in advance.”

Asset, Black's Law Dictionary (10th ed. 2014). A cause of action is “intangible”

because it is an incorporeal personal property right with no physical existence

except by a document without intrinsic value. Lay v. Aetna Ins. Co., 599 S.W.2d

683, 686 (Tex. App.—Austin 1980, writ ref'd n.r.e.); Browne v. King, 196 S.W.

884, 887 (Tex. Civ. App. 1917) aff'd, 111 Tex. 330, 235 S.W. 522 (1921). A cause

of action is an “asset” as the right to a judicial proceeding to recover money.

Vanderburg v. Nocona Gen. Hosp., No. 7:02-CV-291-KA, 2008 WL 114846, at *4

(N.D. Tex. Jan. 10, 2008); Adams v. Great American Lloyd’s Ins., 891 S.W.2d 769,

772 (Tex. App.—Austin 1995, no writ). A non-frivolous claim is an “asset,”

regardless of its ultimate success. In re First State Bancorporation, 498 B.R. 322,

329-30 (Bankr. D.N.M. 2013).

This Court agrees, calling a claim “an asset of the receivership estate.” Akin,

Gump, Strauss, Hauer & Feld, L.L.P. v. E Court, Inc., No. 03-02-00714-CV, 2003

27 WL 21025030 (Tex. App.—Austin May 8, 2003, no pet.)(emphasis added). It

explained in Am. Multi-Cinema, Inc. v. Hegar, No. 03-14-00397-CV, 2015 WL

1967877, at *5 (Tex. App.—Austin Apr. 30, 2015, no pet. h.), that “Intangible

property” includes “incorporeal property (as choses in action) often evidenced by

documents (as stocks, bonds, notes, judgments, franchises) having no intrinsic

value or by rights of action, easements, goodwill, trade secrets.” Accord, In re

Malacara, 223 S.W.3d 600, 602 (Tex. App.—Amarillo 2007, no pet.)(retirement

benefits); In re Fleckenstein, 589 S.W.2d 788, 789-90 (Tex. Civ. App.—El Paso

1979, no writ)(promissory note). Thus, “intangible asset” and “intangible property”

are commonly understood to include causes of action. Green v. H. E. Butt Found.,

217 F.2d 553, 554 (5th Cir. 1954)(constructive possession of a chose in action); In

re Grotjohn, No. 03-47055DML, 2005 WL 6441386, at *5 (Bankr. N.D. Tex. July

19, 2005)(“Intangible assets such as … causes of action”); In re Scott, 157 B.R.

297, 314 (Bankr. W.D. Tex. 1993), withdrawn per settlement, 162 B.R. 1004

(Bankr. W.D. Tex. Jan. 21, 1994)(party succeeded to “intangible assets like causes

of action”).

b. The Architect’s Argument Ignores Context and the Residuary Clause’s Purpose.

The Architect’s declaration that there is “[n]o authority … causes of action

are included within ‘intangible assets’” is incorrect. (Appellant’s Brief 26). The

Architect’s only cited support, an old edition of Black’s Law Dictionary, defines

28 “asset” as “[p]roperty of all kinds, real and personal, tangible and intangible,

including … causes of action….” Black’s Law Dictionary 117 (6th ed.

1990)(emphasis added). Nevertheless, the Architect argues that omission of “cause

of action” from the examples of “intangible asset” means it is not one. Having

already described “cause of action” as an “asset,” the dictionary’s failure to repeat

it as an example of an “intangible asset” does not support the Architect’s

conclusion. Presumably, the dictionary reasonably assumed readers would

understand that a “cause of action” is intangible property and that example lists are

not exhaustive. The Architect points to the dictionary’s inclusion of “judgment” or

“claim” as examples of a “nominal asset” to suggest that they cannot be intangible

assets. Nothing indicates that “intangible” and “nominal” assets are mutually

exclusive. The parties did not incorporate any such distinction. The Architect may

not now urge interpreting the assignments as if they had.

The Architect’s narrow definition of “intangible asset” also ignores its

context. In construing assignments, the courts consider the surrounding

circumstances. Coffin v. Douglas, 61 Tex. 406, 409 (1884)(available at 1884 WL

8785). Here, the parties were closing the sale of the Project. They intended RLJ to

step into Ausaircourt’s shoes. The PSA required the transfer of all Ausaircourt’s

claims and causes of action concerning the Project. (CR692). The PSA provides

specifically that Ausaircourt must cooperate with RLJ to enforce “any rights under

29 the [A]rchitectural [Contract] … respecting the design … and construction of the

Hotel.” (CR643;App.J). Thus, RLJ “bargained for an assignment of the prior

owner’s possible causes of action … that occurred before [its] purchase.”

Boerschig v. Southwestern Holdings, Inc., 322 S.W.3d 752, 767 (Tex. App.—El

Paso 2010, no pet.).

Under the Intangibles Assignment, the transfer of “all other intangible

assets” (CR701;App.M; emphasis added) is a residue or “Mother Hubbard” clause

intended to convey any categorical item not otherwise assigned. This Court

recognizes such clauses clearly intend to dispose of all of one’s property. Petsch v.

Slator, 573 S.W.2d 849, 853 (Tex. Civ. App.—Austin 1978, writ ref'd n.r.e.). The

same is true here.

“The language used [in the Intangibles Assignment] is as broad as it well

could be.” Coffin, 61 Tex. at 409 (effect of assigning “all properties of all kinds

owned by us”). “All means all,” Halliburton, Inc. v. Admin. Review Bd., 771 F.3d

254, 266 (5th Cir. 2014); Kennedy v. Lynd, 306 F.2d 222, 230 (5th Cir. 1962), not

“all, but” or “all, except.” Ausaircourt could not express more definitively that it

conveyed all, and reserved no, intangible asset. The Architect’s narrow and self-

serving assignment interpretation cannot be reconciled with surrounding

circumstances, the parties’ manifest intent, controlling interpretive rules, or its own

dictionary’s definition of “asset.”

30 3. The Intangibles Assignment was “Express.” Notwithstanding the explicit assignment of “all ... intangible assets”

(CR701;App.M), the Architect argues that something more “express” – by which

the Architect means “more particular” – was required. (Appellant’s Brief 22) This

argument relies on cases about whether wording in a real property deed also

effectively assigns an accrued cause of action for damage to the real estate

conveyed. The courts, quite logically, have said “no.” The cause of action is not a

right that “runs with the land.” Welch v. Monroe, No. 10-03-00013-CV, 2004 WL

2474504, at *2 (Tex. App.—Waco Nov. 3, 2004, no pet.); Exxon Corp. v. Pluff, 94

S.W.3d 22, 27 (Tex. App.—Tyler 2002, pet. denied). Once accrued, the claim is

the personal property of the owner at that time. Exxon Corp. v. Emerald Oil & Gas

Co., L.C., 331 S.W.3d 419, 424-25 (Tex. 2010); Vann v. Bowie Sewerage Co., 127

Tex. 97, 90 S.W.2d 561, 562 (1936)(permanent nuisance).

Not being a real property right, “mere transfer of the land by deed does not

transfer the [accrued] claim for damages.” Emerald Oil, 331 S.W.3d at 420, 424-

25; Vann, 90 S.W.2d at 563. Without a more specific reference, Emerald Oil, 331

S.W.3d at 424-25, the accrued cause of action is not conveyed by a general

warranty deed’s grant of the described real estate and all “rights and appurtenances

thereto.” Richey v. Stop N Go Markets of Tex., 654 S.W.2d 430, 431 (Tex.1983).

Assignment of the cause of action cannot be implied because a general warranty

31 deed contains no language manifesting an intention to convey personal property.

See Brooks v. Chevron USA Inc., No. 13-05-029-CV, 2006 WL 1431227, at *8

(Tex. App.—Corpus Christi May 25, 2006, pet. denied)(mem. op.); Pluff, 94

S.W.3d at 27; Cook v. Exxon Corp., 145 S.W.3d 776, 781 (Tex. App.—Texarkana

2004, no pet.); La Tierra de Simmons Familia, Ltd. v. Main Event Entm't, LP, No.

03-10-00503-CV, 2012 WL 753184 at * (Tex. App.—Austin Mar. 9, 2012, pet.

denied).

Unlike the parties in the Architect’s cases, RLJ need not rely on the real

property deed for its right to sue. It has express assignments of the seller’s personal

property and intangible property. Cf. Ceramic Tile Int’l Inc. v. Balusek, 137

S.W.3d 722, 724 (Tex. App.—San Antonio 2004, no pet.)(plaintiff’s claim for

damage to real property failed due because separate assignment not introduced).

Yet, the Architect relies on Richey to argue that more particularity is necessary for

the cause of action’s assignment to be “express.” “Express” is the opposite of

“implied.” Mueller v. All-Temp Refrig., Inc., 2014 Ohio 2718, ¶ 45; Ross v. Ross,

20 Ala. 105, 111 (1852). RLJ need not resort to implication because the

assignment to it was overtly expressed. Richey says nothing about particularity. It

only holds that a general warranty deed’s conveyance of described real property

“with all … rights and appurtenances” does not include personal property

32 consisting of an accrued land damage cause of action. 654 S.W.2d at 431-32; see

Emerald Oil, 331 S.W.3d at 425; Brooks, 2006 WL 1431227, at *8.

The Richey cases also do not suggest that a categorical description is

ineffective to describe everything within that category. General, categorical

descriptions are effective for that purpose. See, e.g., Owen v. Vibrasonic

Exploration, Inc., 694 S.W.2d 421, 424 (Tex. App.—Houston [14th Dist.] 1985,

writ ref’d n.r.e.)(“accounts receivable” … “including but not limited to those

shown” sufficient to describe unlisted account); Ian Martin, Inc. v. Greenspoint

Bank, 01-87-00631-CV, 1988 WL 45423 at *3 (Tex. App.—Houston [14th Dist.]

May 5, 01-87-00631-CV, 1988 WL 45423 (Tex. App. May 5, 1988)(same;

unpublished); Orix Credit Alliance, Inc. v. Omnibank, N.A., 858 S.W.2d 586 (Tex.

App. 1993)(“property of every kind and nature” satisfied TEX. BUS. & COMM.

CODE §9.110’s “reasonably identified” requirement for a lien on all tangible

property). The Architect cites, and research reveals, no authority invalidating a

cause of action’s assignment because it conveyed an encompassing class of

intangible rights without specifically mentioning “cause of action” or “chose in

action.” Merely because an accrued cause of action does not automatically pass

with a real property conveyance or the underlying contract’s assignment does not

justify a “magic words” test that ignores that assignments like any other contract

must be construed according to its language in light of surrounding circumstances.

33 Commercial Structures, 192 S.W.3d at 832-33. RLJ was validly assigned

Ausaircourt’s ownership of the cause of action against the Architect on the basis of

the Intangibles Assignments alone. 17

4. The Supplemental Clarification May Be Considered and Removes Any Doubt That RLJ Was Assigned the Architectural Contract and the Cause of Action For Its Breach. The propriety of the trial court’s ruling RLJ had standing is confirmed by

considering the Supplemental’s statement the Intangibles Assignment was intended

to include the Architectural Contract and “causes of action or claims … against the

[Architect].” (CR603;App.N). The Architect suggests, however, the Supplemental

cannot be considered because the trial court sustained its extrinsic parol evidence

objection. (Appellant’s Brief 27).

The parol evidence rule is a substantive, not evidentiary, so this ruling can

be reconsidered de novo. Hubacek v. Ennis State Bank, 159 Tex. 166, 169, 317

S.W.2d 30, 31 (1958)(parol evidence substantive); Provident Life & Acc. Ins. Co.

v. Knott, 128 S.W.3d 211, 215 (Tex. 2003)(summary judgment reviewed de novo).

The parol evidence rule only precludes enforcement of inconsistent prior or

contemporaneous agreements if the parties have a fully integrated agreement.

Hubacek, 317 S.W.2d at 31; Lewis v. Adams, 979 S.W.2d 831, 836 (Tex. App.—

17 The Architect devotes considerable discussion to the trial court’s April 10, 2014 letter. (Appellant’s Brief 22). The trial court did not limit the underpinnings for its ruling to the reasoning in its letter. See n. 16, supra.

34 Houston [14th Dist.] 1998, no pet)(only excludes prior agreements). The

Supplemental was not parol evidence for at least four reasons.

First, assuming arguendo that intent was not, as the Architect contends,

expressed with sufficient particularity, the Supplemental was consistent with the

intent to convey causes of action as a subset of the “intangible assets” expressly

conveyed. All the Supplemental did was provide more particularity; it did not alter

and was not inconsistent with the intent originally expressed. Second, the

Supplemental was not parol evidence because it did not antedate the PSA or the

Intangibles Assignment. Third, the assignment was not fully integrated. Indeed, the

PSA authorized the execution of any necessary additional instruments and

permitted its modification in writing. (CR654,656;App.J).

Finally and ironically, the Architect has no standing to assert the parol

evidence rule. The Architect is a stranger to both the Intangibles Assignment and

the PSA. The parol evidence rule does not apply to a dispute between a contracting

party and a contractual stranger. Baroid Equipment, Inc. v. Odeco Drilling, Inc.,

184 S.W.3d 1, 13 (Tex. App.—Houston [1st Dist.] 2006, pet. denied). The

Supplemental was appropriate for consideration despite the trial court’s erroneous

“evidentiary” ruling and fully supports its decision that RLJ had standing through

the Intangibles Assignment.

35 5. Alternatively, The PSA Transferred The Contract Cause of Action When It Transferred the Contract.

If more than the Intangibles Assignment were required to transfer the cause

of action, it is found in the PSA. It transferred all of Ausaircourt’s “right, title and

interest” to “the Assets,” which included “all contracts, agreements … and

warranties covering the design, development, construction, operations,

maintenance and repair of the Property….” (CR613,615,619;App.J). This clearly

intended and effectuated an assignment of the Architectural Contract rights. The

PSA’s assignment of all “right, title, and interest” in that contract includes the

cause of action for its breach. See D Design Holdings, L.P. v. MMP Corp., 339

S.W.3d. 195, 202-203 (Tex. App.—Dallas 2011, no pet.)(pre-suit assignment of

“all of right, title, and interest” left no cause for the assignor to assert); see also

Effel v. McGarry, 339 S.W.3d 789, 792 (Tex. App.—Dallas 2011, pet. denied) (all

interests in assigned judgment, “including the underlying claim,” was assigned).

6. The Architectural Contract Was Validly Assigned to RLJ.

The Architect next argues that the Architectural Contract’s Anti-Assignment

Clauses invalidated the transfer of rights under that contract. Notably, the

Architect does not assert these clauses affected assignment of the cause of action.18

18 The Architect’s consent was unnecessary to assign the cause of action. Causes of action are freely alienable, subject to exceptions inapplicable here. State Farm Fire and Casualty Co. v Gandy, 925 S.W.2d 696, 707 (Tex. 1996); see TEX. BUS. & COM. CODE ANN. § 2.210(b) (West 2011)(contract actions). Anti-assignment clauses do not prevent assignments of causes of action.

36 Assignment of the cause of action was conclusively established under either the

Intangibles Assignment or the PSA which makes irrelevant the Architect’s

arguments about the Architectural Contract’s assignment. Nevertheless, the

Architect’s challenge to the contract assignment is refuted here.

First, the Architect inaccurately asserts that RLJ admitted “alleg[ing] only an

assigned cause of action … rather than assignment of the [Architectural] Contract

itself.” (Appellant’s Brief 18,n.9). Yet the cited portion of RLJ’s pleading states

“Ausaircourt assigned the Project, the contracts, … intangibles … and causes of

action to [an] RLJ [entity].… and then assigned its rights … under the Project

contracts to … RLJ.” (CR222,329). This is no admission RLJ was not assigned the

contract, but simply acknowledges the PSA and Intangibles Assignments were

separate instruments.

Additionally, even if contract assignment had been proscribed by the anti-

assignment clause, Ausaircourt’s transfer of the Architectural Contract to RLJ

remained effective. “[T]he obligor a right to damages for breach of the terms

forbidding assignment but [its breach] does not render the assignment ineffective.”

Pagosa Oil & Gas LLC v. Marrs & Smith Ptnrs., 323 S.W.3d 203, 212 (Tex. App.—El Paso 2010, pet. denied); see also Restatement (Second) of Contract §§322(1), (2)(a). Other jurisdictions agree that the AIA anti-assignment clause does not require consent to assign a cause of action. See e.g. Berschauer/Phillips Const. Co. v. Seattle Sch. Dist. No. 1, 881 P.2d 986 (Wash. 1994); Ford v. Robertson, 739 S.W.2d 3, 5 (Tenn. Ct. App. 1987)(post-performance assignment of cause of action); Folgers Architects Ltd. v. Kerns, 612 N.W.2d 539, 548 (Neb. App. 2000)(same).

37 Restatement (Second) of Contract §322(2)(b); see Reuben H. Donnelley Corp. v.

McKinnon, 688 S.W.2d 612, 615 (Tex. App.—Corpus Christi 1985, writ ref’d);

Gips v. Red Robin Corp., 366 S.W.2d 853, 857 (Tex. Civ. App.—Houston 1963,

writ ref’d n.r.e); accord, Cedar Point Apartments v. Cedar Point Inv. Corp., 693

F.2d 748, 753, 754 (8th Cir.), cert. denied, 461 U.S. 914 (1983); Rumbin v. Utica

Mut. Ins. Co., 254 Conn. 259, 757 A.2d 526, 528, 530, 535-537, 541 (Conn. 2000);

University Mews Associates v. Jeanmarie, 122 Misc.2d 434, 471 N.Y.S.2d 457,

461 (N.Y. Sup.Ct. 1983).

Some jurisdictions hold that if the assignor has fully performed, as is the

case here, the anti-assignment is unenforceable absent significant resulting harm.

In re Cooper, 242 B.R. 767, 771 (Bankr. S.D. Ga. 1999); Gallagher v. Southern

Source Packaging, LLC, 564 F.Supp.2d 503, 506-508, 514, 515 (E.D.N.C.

2008)(assigment not barred if payment only performance due); Owen v. CNA

Insurance/Continental Cas. Co., 167 N.J. 450, , 771 A.2d 1208, 1213-14, 1218

(N.J. Super. 2001)(no material increase in risk or burden). In Berschauer/Phillips

Const. Co. v. Seattle Sch. Dist. No. 1, 881 P.2d 986 (Wash. 1994), the court

observed that “[t]he primary purpose of clauses prohibiting the assignment of

contract rights without … permission is to protect him [or her] in selecting the

persons with whom he [or she] deals.” 811 P.2d at 830 (citing Portland Elec. &

Plumbing Co. v. Vancouver, 627 P.2d 1350 (1981)). Thus, the anti-assignment

38 clause, if enforceable at all, did not invalidate the PSA’s assignment of the

Architectural Contract.

C. The Contract Was Admissible and Authenticated.

The Architect next complains the trial court abused its discretion by

admitting the Architectural Contract in evidence because the contract was (1)

inadmissible hearsay and (2) not properly authenticated. (Appellant’s Brief 31-32).

Both complaints are meritless. A contract has legal effect independent of the truth

of any statements therein. Rockwall Commons Assocs. Ltd. v. MRC Mortgage

Grantor Trust I, 331 S.W.3d 500, 511 (Tex. App.—El Paso 2010, no pet.).

Statements that constitute offer, acceptance or terms of a contract— so-called “operative facts”—are not hearsay[. M]erely making of such statements are in themselves relevant and thus evidence that such statements were made is not barred by the hearsay rule.

Thomas C. Cook, Inc. v. Rowhanian, 774 S.W.2d 679, 685 (Tex. App.—El Paso

1989, writ denied); see also Sanders v. Worthington, 382 S.W.2d 910, 915–16

(Tex.1964). The Architect is simply wrong when, without supporting authority, it

asserts otherwise. The trial court correctly overruled the Architect’s hearsay

objection. (4RR8-9).

The Architect’s complaint about authentication fares no better. Texas Rule

of Civil Procedure 93(7) requires a verified denial to contest the execution of any

written instrument on which any pleading is wholly or partially founded. RLJ

alleged the Architect “contracted for” and “breached the Architectural Contract”

39 (CR189,192), making the Architectural Contract the bedrock for RLJ’s pleading.

The Architect having not made a sworn denial (CR33-34,47-48), Rule 93(7)

mandated its “receipt in evidence as fully proved.” TEX. R. CIV. P. 93(7); see also

Associated Press v. Hicks Broad. Corp., No. C14-93-00066-CV, 1993 WL 495114,

at *2 (Tex. App.—Houston [14th Dist.] Dec. 2, 1993, no writ)(unpublished);

Methodist Hosps. v. Corporate Communicators, Inc., 806 S.W.2d 879, 882 (Tex.

App.-Dallas 1991, writ denied).

The Architect could hardly deny the authenticity of the Architectural

Contract. It defended on the provisions in, and founded its declaratory relief

request based on, the Architectural Contract. (CR53,55;App.O). It attached the

same contract bearing the same date stamp and its Bates numbers to its live answer

and counterclaim. (Compare CR59-79;App.O with 12RR26-46;App.G). The

Architect supported its summary judgment motions with the Architectural Contract

(CR90-91,100-120,262-63,265,278-300), calling it an “undisputed fact” that the

Architect “performed its services on the Project under” that instrument. (CR91). Its

counsel represented during trial that “Plaintiffs' Exhibit 15 … is a copy of the

ESG/White Lodging contract for this project.” (5RR134). The trial court could and

presumably did take judicial notice of this instrument filed in its records. See TEX.

R. EVID. 201(b); Office of Pub. Util. Counsel v. P.U.C., 878 S.W.2d 598, 600 (Tex.

40 1994). On that basis alone, the contract was sufficiently authenticated. Associated

Press, 1993 WL 495114, at *3.

The same contract was also proved a business record by the Architect’s vice-

president. (CR178,316). Such proof also authenticated the contract. TEX. R. EVID.

901(10). For all these reasons, the trial court correctly overruled the hearsay and

authentication objections.

D. The Trial Court Did Not Err in Submitting the Contractual Liability Issue Concerning Structural Engineering and The Architect’s Complaints Have Not Been Preserved For Review. The Architect complains of the jury submission of its liability for “fail[ure]

to comply with the Architectural Contract regarding the structural engineering

services” (CR1126) “because RLJ did not plead or prove any theory of respondeat

superior or vicarious liability against [it] for the [Structural Engineer’s] services.”

(Appellant’s Brief 33). Though the Architect agreed its “services would ‘include’

structural engineering services” (12RR39,47-50;App.G), it now argues that without

pleading and proof of vicarious or respondeat superior liability, it has no

responsibility for the Structural Engineer’s work. (Appellant’s Brief 33).

1. The Architect Waived Its Complaint By Failing to Specially Except to the Omission of Vicarious or Respondeat Superior Allegations.

Vicarious or respondeat superior liability is, as explained below,

unnecessary. The Architect assumed in the Architectural Contract direct

41 responsibility to the Owner to provide structural engineering services.

(12RR39,47-50;App.G) RLJ did not need to rely on any warranty concerning

structural engineering because reasonable performance is implied in every

contractual undertaking. Montgomery Ward & Co. v. Scharrenbeck, 146 Tex. 153,

204 S.W.2d 508, 510 (1947). Even if such derivative liability theories had been

necessary, the Architect cannot predicate its current complaint on its non-specific

“no evidence” charge objection. The trial court is only required to submit the

“questions, instructions and definitions … raised by the pleadings and the

evidence.” TEX. R. CIV. P. 278(emphasis added). A party is only required to prove

what it pleads. See Alaniz v. Jones & Neuse, Inc., 907 S.W.2d 450, 452 (Tex.

1995)(no questions permitted regarding unpleaded issues). Unalleged facts

essential to liability need not be proved unless the opponent specially excepts to

the omission. TEX. R. CIV. P. 90; Shoemake v. Fogel, Ltd., 826 S.W.2d 933, 937

(Tex.1992). RLJ alleged the Architect “agreed to … provide … structural

engineering design … for the Project” (CR44) and “breached the Architectural

Contract by … failing to produce design plans free from defects.” (CR47). The

Architect never specially excepted to failure to allege vicarious or respondeat

superior liability. Therefore, RLJ was not required to prove either theory.

42 2. The Architect Waived Its Complaint By Failing to File a Verified Denial of Liability in the Capacity Sued.

The Architect also now denies direct contractual liability, asserting instead

that it is only vicariously liable for its Structural Engineer. The Architect alleged

generally it did nothing that harmed RLJ, and any of RLJ’s damages were caused

by “others for whose conduct [the Architect is] not legally responsible.” (CR48

¶¶D.1, 2;App.O). This is a contest to liability in the capacity sued, which the

Architect was required, but failed, to plead by verified denial. TEX. R. CIV. P.

93(2). Leggett v. Brinson, 817 S.W.2d 154, 158 (Tex. App.—El Paso 1991, no

writ)(defendant sued individually for DTPA violations waived defense that he was

only acting as agent for another without a verified denial); Avanti Servs. Inc. v.

Questor Drilling, Inc., No. 01-86-00741-CV, 1987 WL 8352, at *2 (Tex. App.—

Houston [1st Dist.] Mar. 26, 1987, no writ)(unpublished; same for corporate

contract signatory sued for direct contract liability with no verified plea that it only

signed as agent for another). The Architect’s general, unverified denial of causing

any of RLJ’s damages does not preserve its current complaint about its liability for

the Structural Engineer’s defective design. See Butler v. Joseph's Wine Shop, Inc.,

633 S.W.2d 926, 929-30 (Tex. App.—Houston [14th Dist.] 1982, writ ref'd

n.r.e.)(unverified denial of action in individual capacity waived capacity defense).

Without a sworn denial, the Architect waived its complaint. See Horton v.

Robinson, 776 S.W.2d 260, 266–267 (Tex. App.—El Paso 1989, no writ).

43 3. The Architect Failed to Preserve Its Charge Complaint By Objecting On Different Grounds Than Those Now Urged. At the charge conference, the Architect’s only objection to the structural

engineering liability question was “there is no evidence to support [liability for]…

failure to comply with the [A]rchitectural [C]ontract regarding structural

engineering services.” (9RR152). This objects to whether there was probative

evidence the Architect failed to comply. The Architect’s complaint now concerns

evidence supporting the Architect’s responsibility for the Structural Engineer’s

failure to comply. Objection on one ground preserves no error on another. State

Dep't of Highways & Pub. Transp. v. Payne, 838 S.W.2d 235, 242 (Tex. 1992).

The Architect waived its objection to the submission of the structural engineering

liability question for this additional reason.

4. Vicarious or Respondeat Superior Liability Is Not Required When Responsibility Exists Under a Contract. The substance of the Architect’s argument is also meritless. The Architect

relies on Ryan v. Morgan Spear Associates Inc., 546 S.W.2d 678, 681–82 (Tex.

Civ. App.—Corpus Christi 1977, writ ref'd n.r.e.), for its vicarious/respondeat

superior liability argument. That reliance is misplaced.

a. Ryan Decided Tort, Not Contractual, Duty Under a Now-Rejected Liability Theory. The Architect acknowledges the Ryan plaintiff contended the liability

inquiry should have been based on whether the architect “breached its contractual

44 duty to prepare plans and specifications free from defect.” (Appellant’s Brief

35;emphasis added). It fails to mention, however, that the Ryan court never

reached contractual duty question by ruling “liability … can only be sustained on

proof that [the architect] was negligent….” 19 Id. at 682 (emphasis added). For 24

years since Southwestern Bell Tel. Co. v. DeLanney, 809 S.W.2d 493, 494–95

(Tex. 1991), damages to the contract’s subject must be recovered in contract, not

tort, actions. CBI NA-CON, Inc. v. UOP Inc., 961 S.W.2d 336, 340 (Tex. App.—

Houston [1st Dist.] 1997, pet. denied). Ryan antedated DeLanney and only

addresses the architect’s tort duty. It does not resolve the situation here: whether

contractual liability may be imposed for breach of a duty the architect’s agreement

to provide structural engineering services. (CR68,72-73).

b. The Contract Defines Contractual Duties. As this Court recognized in Black + Vernooy Architects v. Smith, 346

S.W.3d 877, 882 (Tex. App.—Austin 2011, pet. denied), an architect’s duties are

contractually defined. Accord Guirey, Srnka & Arnold, Architects v. Phoenix, 9

Ariz. App. 70, 449 P.2d 306 (1969); Moundsview ISD v. Buetow & Assoc., 253

N.W.2d 836 (Minn.1977); Getzschman v. Miller Chem. Co., 232 Neb. 885, 898-99,

443 N.W.2d 260, 270 (1989); Kelly v. Northwest Community Hospital, 66

19 After obtaining summary judgment that RLJ could not recover in negligence pursuant to the doctrine of equitable subrogation (CR1708), the Architect now seeks liability insulation under law only applicable to liability for negligence.

45 Ill.App.3d 679, 23 Ill.Dec. 466, 384 N.E.2d 102 (1978). Here, the Architect had a

direct duty to provide structural engineering services by contracting to do so. Proof

of vicarious or respondeat superior liability was superfluous.

5. The Architect Waived Any Complaint About the Duty Submitted By Failing to Request Any Question, Definition or Instruction.

Nevertheless, the Architect suggests under Ryan it should not be liable for

“failure to comply with the Architectural Contract regarding the structural

engineering services required” because it neither “guarantee[d]” quality nor

promised “a perfect plan or satisfactory result.” (Appellant’s Brief 33, 34). Even if

Ryan had so constricted the Architect’s contractual duty, the Architect’s complaint

is that the jury question incorrectly stated the liability standard. But the Architect

requested no question proposing any liability standard. (CR1119-20). Its own

proposed bulk charge, on which it obtained no ruling, included no such liability

standard. (CR1108). It requested no definition or instruction submitting such a

standard. (CR1119-20). The Architect’s complaint was waived through these

failures. TEX. R. CIV. P. 279; Payne, 838 S.W.2d at 242.

6. Ryan Only Addressed the Architect’s Direct, Not Vicarious, Tort Liability. The Architect also asserts that Ryan means a contract party may later

delegate its promised performance to one it unilaterally characterizes an

independent contractor and thereby elude liability without proof of respondeat

46 superior. Respondeat superior, however, is only applicable to torts. It is based on

the theory the employer is liable for the employee’s negligence though the

employer itself beached no duty. St. Anthony's Hosp. v. Whitfield, 946 S.W.2d 174,

178 (Tex. App.—Amarillo 1997, writ denied); White v. Dennison, 752 S.W.2d

714, 716 (Tex. App.—Dallas 1988, writ denied); Marange v. Marshall, 402

S.W.2d 236, 241–42 (Tex. Civ. App.—Corpus Christi 1966, writ ref'd n.r.e.). It is

unnecessary when the employer breaches a direct duty it contractually assumed.

See V.D.4.b., supra.

Because the Ryan plaintiff failed to request a charge question whether the

engineer was the architect’s agent, 546 S.W.2d at 682, the only issue before the

court was whether sufficient evidence supported the architect’s direct tort liability.

Id. at 681. The Architect’s suggestion that Ryan defines a contractual standard is

incorrect. Even in negligence, an architect is not relieved of responsibility simply

by hiring a consultant to discharge its professional responsibilities. Playskool, Inc.

v. Elsa Benson, Inc., 147 Ill. App. 3d 292, 299, 497 N.E.2d 1199, 1204 (1986).

7. Architect’s Reasoning Permits It All the Contractual Benefits Free of Burden and Risk. The Architect further uses Ryan to suggest that it is not contractually liable

for the Structural Engineer’s shortcomings because the contract between the

Architect and Structural Engineer provided the latter was an independent

contractor. (Appellant’s Brief 33). The Owner was not a party to that agreement.

47 Its rights are unaffected by such a contract. See Prize Energy Res., L.P. v. Cliff

Hoskins, Inc., 345 S.W.3d 537, 554 (Tex. App.—San Antonio 2011, no pet.). The

lack of privity between construction subcontractors and owners is why it was

necessary to devise the “pass-through” fiction based on the general contractor’s

privity with the owner to permit subcontractors to sue owners for breaches.

Interstate Contracting Corp. v. City of Dallas, 135 S.W.3d 605, 615 (Tex. 2004).

The Architect in this case was, however, a party to the contract under which

it agreed to perform structural engineering services. It was free to contract with the

Structural Engineer for indemnity or other protections. No matter how it chose to

arrange the Structural Engineer’s performance, the Architect was contractually

answerable to the Owner and its assigns for the breach. The Architect’s vicarious-

only argument overlooks the same principle the Architect espouses concerning the

assignment: there is no privity; ergo, no contractual liability. If the remedy against

the Architect were limited to derivative liability, the Architect would be free to

contract for services completely free of liability for another’s failure to provide the

promised performance.

8. Illegality Is Not an Issue Due to The Architect’s Failure to Plead It and Statutory Authorization for Architects Performing Structural Engineering Services. The Architect also argues that it cannot be liable for failings of its Structural

Engineer because it “literally cannot agree to provide structural engineering

48 services.” (Appellant’s Brief 36). It quotes Seaview Hospital, Inc. v. Medicenters

of Am., Inc., 570 S.W.2d 35, 39 (Tex. Civ. App.—Corpus Christi 1978, no writ),

for the proposition that “a contract for engineering services to be performed by a

person who is prohibited from practicing engineering in Texas is void and

unenforceable.” (Appellant’s Brief 36).

a. Any Illegality Was Waived Because It Is Not Apparent And The Architect Did Not Affirmatively Plead It. Unenforceability due to alleged illegality is an affirmative defense that is

waived if not pleaded unless pleaded facts conclusively establish illegality. TEX. R.

CIV. P. 94; Phillips v. Phillips, 820 S.W.2d 785, 789 (Tex.1991); Park v. Escalera

Ranch Owners' Ass'n, Inc., No. 03-12-00314-CV, 2015 WL 737424, at *16 (Tex.

App.—Austin Feb. 13, 2015, no pet. h.). Even if it were a valid defense here,

nothing pleaded showed the Architect was not licensed to or could not lawfully

provide engineering services. Failure to plead illegality waived any such defense.

There was no illegality defense to waive, however. Even if the contract

violated architecture regulations, the Architect could not assert it. Public policy

would not prevent contract enforcement against the Architect because of the need

to discourage Architect’s from regulatory violations. Geis v. Colina Del Rio, LP,

362 S.W.3d 100, 110 (Tex. App.—San Antonio 2011, pet. denied). Further, there

is no illegality. The Architect is authorized to prepare “engineering plans and

49 specifications for … the depiction of the building systems, including structural,

mechanical, electrical, and plumbing systems….” TEX. OCCUP. CODE

§1001.0031(d)(emphasis added).

b. Seaview Hospital Does Not Say An Architect Cannot Provide Structural Engineering Services. Finally, the Architect’s citation of and quotation ignores that Seaview

Hospital does not discuss the dividing line between architecture and engineering. It

involved a contract under which a general contractor agreed to provide, not

perform, those services under a turnkey contract. 570 S.W.2d at 38-39. The

contractor in fact arranged for those services through licensed professionals. It was

the owner-defendant, not the architect, asserting illegality. Seaview Hospital held

the contract should be interpreted to be enforceable; i.e., that the general contractor

only agreed to arrange for others to provide such services.

The Architect’s complaint cannot be sustained. The trial court did not

reversibly err in submitting a jury question concerning the Architect’s failure to

perform structural engineering services.

E. The Evidence of Diminution in Value Was Legally Sufficient.

The Architect’s last complaint is “[t]he evidence at trial was legally

insufficient to support the jury’s $700,000 award of market value damages.”

(Appellant’s Brief 36). This attack is limited to supporting evidence for the jury’s

50 finding of Project value difference “determined as of August 31, 2010.” (CR

1127;App.B). The jury’s verdict, however, is fully supported.

1. The Evidence Is Legally Sufficient If It Provides More Than a Scintilla of Factual Support. A finding is unsupported by legally sufficient evidence only if there is a

complete absence of probative evidence; such evidence is not enough to cause

reasonable, fair-minded people to differ; or its opposite is conclusively established.

City of Keller v. Wilson, 168 S.W.3d 802, 810 (Tex.2005); Burroughs Wellcome

Co. v. Crye, 907 S.W.2d 497, 499 (Tex.1995). A reviewing court may only

consider evidence supporting the verdict, viewing that evidence and inferences

therefrom in the light most favorable to the verdict. Mancorp, Inc. v. Culpepper,

802 S.W.2d 226, 227 (Tex.1990). Even if an expert’s valuation lacks supportive

market data, the opinion is more than a scintilla and sufficient to present a disputed

fact issue. Alleged data deficiency goes to persuasive, not probative, value. See

Missouri-Kansas-Texas R. Co. v. City of Dallas, 623 S.W.2d 296, 299 (Tex. 1981).

Damages are not denied for want of exactitude “[i]f an injured party has produced

the best evidence available… afford[ing] a reasonable basis for determining [the]

loss.” Vance v. My Apartment Steak House of San Antonio, Inc., 677 S.W.2d 480,

484 (Tex.1984); O and B Farms, Inc. v. Black, 300 S.W.3d 418, 422 (Tex. App.—

Houston [14th Dist.] 2009, pet. denied)(evidence sufficient despite loss of

documents necessary for precise calculation). Whatever the Architect’s quibbles

51 about the appraiser’s supporting data, his opinion is not facially conclusory. It has

probative value. See Houston Unlimited, Inc. Metal Processing v. Mel Acres

Ranch, 443 S.W.3d 820, 838 (Tex. 2014).

2. Hornsby’s Testimony Was Well-Founded Based on Well- Accepted Standards and Methodologies. Real estate appraiser Paul Hornsby appropriately valued the Project on the

date the charge specified – August 31, 2010 (“Valuation Date”) – using the income

approach under two different scenarios. “[T]he income approach … is appropriate

when the property would, in the open market, be priced according to the income

that it already generates.” City of Harlingen v. Sharboneau, 48 S.W.3d 177, 183

(Tex. 2001). This is how a buyer would value the Project. (7RR128). Hornsby’s

methodology complied with the Uniform Standards of Professional Appraisal

Practice (“USPAP”). (7RR116, 122-23).

Hornsby appraised thousands of Austin-area properties over 34 years

(7RR114), including over 100 hotels. (7RR115). Hornsby performed two August

31, 2010 valuations: one for the Project’s actual impaired condition after the

remediation had been implemented; another had its condition not been impaired.

(7RR116,122-23,175-177). As USPAP requires, Hornsby considered three

customary valuation methods: cost, comparable sales, and income. (7RR121-22).

Hornsby looked primarily to the income approach, with comparable sales as a

vouchsafe only. There was insufficient sales data for comparable sales to be

52 independently reliable. (7RR142-43). Unless a hotel is brand new, the cost method

is inappropriate. (7RR128).

To determine the Project’s income-based value on the appraisal date were it

undamaged (“undamaged value”), Hornsby considered average daily room rate,

average occupancy rate, typical expenses, and capitalization rate from published

data for five other similar nearby hotels and the Project’s actual performance data

through the Valuation Date. (7RR130-34). With necessary adjustments, Hornsby

estimated that the undamaged Project would have a $100.00 average daily rate and

70% average occupancy. (7RR134-40). He concluded that the income-based

undamaged value of the Project was $13,650,000. (7RR141-42,44). Hornsby

checked that valuation against comparable sales. (7RR142-44).

Hornsby then used income to value the Project “as-is” as of the appraisal

date, assuming all feasible repairs were complete and recognizing their future

effectiveness was uncertain (“damaged value”). (7RR144-45). Hornsby adjusted

for faster-declining room rates, no-growth occupancy rates, increased operating

expenses for the Project as-is compared to undamaged hotels. (7RR145-47). He

also adjusted the capitalization rate up from that for undamaged hotels because of

the higher return rate necessary to induce a buyer to take on the additional known

foundation risks with the Project. (7RR147-48). He concluded that the income-

based damaged value of the Project was $7,220,000. (7RR148). He could not test

53 this against comparable sales because there were no area sales of hotels in a similar

state. (7RR145). Hornsby’s diminution-in-value testimony was more than

sufficient to support the jury’s verdict.

3. The Architect’s Complaints Are Meritless.

a. The Evidence Supported the Answer to the Question Asked, and the Architect Waived Its Valuation Date Complaint. Without challenging any evidentiary ruling, the Architect asserts Hornsby’s

testimony could not support the verdict “because his valuations were determined as

of the wrong date.” The Architect ignores the charge specifically instructed

damages should be determined “as of August 31, 2010” – the date of Hornsby’s

valuations. 20 (CR1127). The evidence need only support the answer to the question

asked. Osterberg v. Peca, 12 S.W.3d 31, 55 (Tex. 2000); see THPD, Inc. v. Cont’l

Imports, Inc., 260 S.W.3d 593, 608 (Tex. App.—Austin 2008, no pet.). It did.

If the Architect wanted an instruction with a different date, it needed to

tender such an instruction. TEX. R. CIV. P. 279. It did not. (CR1119). Neither did

it object to the question because of the date. (9RR153). Its objection was to

“legal[ly] and factually insufficient evidence to support the damages question

tendered, and we incorporate the motion for directed verdict arguments.” (Id.;

20 In McGinty v. Hennen, 372 S.W.3d 625, 628 (Tex. 2012), and Barraza v.Koliba, 933 S.W.2d 164, 169 (Tex. App.—San Antonio 1996, writ denied), do not apply here. There, the testimony and charge involved different valuation dates; here, the testimony and charge involved the same valuation dates.

54 emphasis added). The objection to the “question tendered” was invalid because

Hornsby’s testimony supported the “question tendered” in the charge.

The attempted incorporation of “directed verdict arguments” added nothing.

Rule 274 is explicit that “[n]o objection to one part of the charge may be adopted

and applied to any other part… by reference only” because “all participants… are

entitled to know with certainty the that all objections have been made at the

designated point….” Charles R. “Skip” Watson, Jr., “The Court's Charge to the

Jury,” Advanced Civil Trial Course 7–28 (State Bar of Texas 2003). Because this

goal is thwarted by incorporating charge objections by reference, objections to

defects in instructions that incorporate arguments in previous motions must also be

deemed waived because they are not “specifically included in the objections.” TEX.

R. CIV. P. 274.

In addition, the Valuation Date submitted was appropriate in light of the

acknowledged superiority of the “income approach” when the market values

properties like the Project according to its income. (7RR128-29). Sharboneau, 48

S.W.3d at 183. By the Valuation Date, the Project’s operations had stabilized and

provided a more reliable income model, much of the possible repair work was

complete, and the ramifications of the Project’s problems were more fully known.

(7RR120,124-25). That date permitted appraisal by analysis, not speculation. An

55 earlier date would have yielded inaccurate results because of uncertainty over the

full consequences of the Project’s problems. (7RR125-26).

This carefully tailored approach is precisely what cases involving breaches

of design or construction contracts call for because measure of damages is

governed by each case’s peculiar facts. Vance, 677 S.W.2d at 482. “What is a

reasonable time is a question of fact, varied by the circumstances of each case.”

Barry v. Jackson, 309 S.W.3d 135, 141 (Tex. App.—Austin 2010, no pet.) 21. Yet,

the Architect offers and research revealed no authority that the Valuation Date is

improper for breach of a design contract for an income-producing property. The

Architect ignores the Vance directive and would superimpose a one-size-fits-all

solution by resort to a rigid-date approach used in real estate sales contract

breaches.

A date-of-sale valuation is appropriate for the breach of a real estate sales

contract because damages are based on a single value fixed at a definite time.

Barry 309 S.W.3d at 140; accord Westminster Falcon/Trinity L.L.P. v. Chong

Shin, No. 07-11-0033-CV, 2012 WL 5231851, at *2 (Tex. App.—Amarillo Oct.

23, 2012, no pet.). Damages for the breach of a contract concerning a newly-built

building, on the other hand, is based on a difference in two separate values: “the

21 The Architect overlooks that Barry involved lay, not expert, opinion and that there was no testimony relating the post-sale valuation to market conditions on the date of sale. Id. at 140. This is the problem also addressed in McGinty, see n. 20, supra., but is not present here.

56 value of the building as constructed and its value had it been constructed in

accordance with the contract.” Turner, Collie & Braden, Inc. v. Brookhollow, Inc.,

642 S.W.2d 160, 164 (Tex. 1984); Gulf Ins. Co. v. Cunningham, A14-91-00799-

CV, 1993 WL 136039, at *3 (Tex. App.—Houston [14th Dist.] Apr. 29, 1993, writ

denied).

Unlike breach of a sales contract, the consequences of contractual deviations

in construction frequently do not become manifest until after the breach occurrs.

That was certainly true here because the damage to the Project resulting from the

structural design deficiencies were dynamic, not static, and continued to worsen as

time passed. (7RR117,126,144-45;4RR78-79). Thus, a rigid date-of-breach

approach would often underestimate the value received in contractual breaches

involving new construction.

Further, given the delay involved for latent defects to appear, assessing the

hypothetical undamaged value must be postponed so that both it and damaged

value are assessed under the same market conditions to avoid concerns about

rapidly-fluctuating market conditions expressed in Barry and Naylor v. Stiegler,

613 S.W.2d 546, 547 (Tex. Civ. App.—Fort Worth 1981, no writ). Otherwise, the

comparison ceases to be reliable for accurately measuring diminution. Unreliable

data is not a permissible basis for expert opinion. Merrell Dow Pharm., Inc. v.

Havner, 953 S.W.2d 706, 714 (Tex. 1997).

57 In addition, the Architect’s reliance on this Court’s observation in Barry

about the effect of the passage of time on the real estate market concerned

valuation based on sales, not income. 309 S.W.3d at 141. Thus, worries about lay

testimony that did not attempt to relate a later sale to the valuation date are absent

here. The valuation method here was different. The testimony was presented by an

expert who related his data to the Valuation Date. Hornsby eschewed the

Architect’s unreliable approach and used the charge’s Valuation Date to determine

both the damaged and undamaged value as precisely as circumstances permitted –

i.e., after the issues had manifested and the remediation work was complete, even

though the Project could not be fully repaired. (7RR123-25,176-77).

b. The Jury Was Provided With Actual Performance Data. Having argued that the Valuation Date in the charge was too late, the

Architect also argues that it was not late enough. It contends Hornsby’s diminished

value opinion was undermined because it was based on predicted data as of the

valuation date instead of actual performance data that only became available until

after the court’s charge’s specified valuation date. In fact, Hornsby testified about

the diminution in value based on both the actual, post-valuation performance data

and the projections based on the data available on the valuation date. (7RR149-53.)

Hornsby informed the jury that based on actual performance, the Project’s

diminution in value was $4.3 million (7RR152); based on the data available as of

58 the valuation date, its diminution in value was $6.4 million. (7RR153). Thus, even

if the Architect were right about the proper underpinnings for calculating value

diminution, the Architect’s legal sufficiency attack on this basis is meritless

because the jury was given a valuation based on the actual performance data. Its

diminution finding as caused by the Architect’s breach was within the range of

diminution damages the evidence supports. See Gulf States Utilities Co. v. Low, 79

S.W.3d 561, 566 (Tex. 2002).

Nonetheless, the Architect is wrong about using data unavailable on the

Valuation Date. USPAP standards disallow consideration of information the

hypothetical buyer and seller not then know. (7RR149,152). Hornsby’s use of only

pre-valuation data was the correct methodology and his analysis was reliable. That

is all that was required. Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 581 (Tex.

2006). The jury gets to resolve the weight to be given his opinion. See id.

Hornsby’s analysis is not unreliable under Whirlpool Corp. v. Camacho, 298

S.W.3d 631, 640 (Tex. 2009), because his opinion based on pre-valuation data did

not disregard relevant facts as the experts in Whirlpool did.

Again, the Architect is complaining that a different date should have been

asked without preserving that objection to the charge. For any and all of these

reasons, this aspect of the Architect’s legal insufficiency argument is specious.

59 c. There Was Legally Sufficient Evidence to Support the Jury’s Verdict and Any Allocation of Damages.

The Architect apparently argues Hornsby’s opinion cannot support the jury’s

verdict because it was not limited to diminution caused by the Architect alone.

This argument is flawed in several of its premises.

1) The Architect Erroneously Assumes Jury Must Have Implicitly Found Others Breached. It erroneously assumes the jury must have found other’s breaches caused

diminution damages. Such assumption violates the obligation to review evidence in

the most favorable light, ignoring all contrary evidence and inferences. City of

Keller v. Wilson, 168 S.W.3d 802, 810 (Tex. 2005). The jury is entitled to

disbelieve any or all of expert or lay testimony. See McGalliard v. Kuhlmann, 722

S.W.2d 694, 697 (Tex.1986). It could have believed the Architect’s breach of its

structural design obligation alone caused all the diminution in value.

There evidence supported that conclusion. An expert testified that

inadequate foundation design caused foundation movement because it focused on

load distribution, not resisting movement from soil expansion. (4RR87,90-92,111-

12). The Soils Engineer correctly evaluated the Project site’s soil plasticity.

(4RR114-117,119-122). The Architect was the center of the design team ultimately

responsible to see that the foundation design followed the Soils Engineer’s

recommendations. (5RR165-67,176,216-18,222-23).

60 The foundation design utilized was not the one the Soils Engineer

recommended (4RR122-23,185), and was not adequate for the Project site.

(5RR57-58,96,217-18). The design was inappropriate because it did not properly

address resistance to movement from soil expansion. (4RR87-88,128-29). The

General Contractor was required to build the type of foundation specified, which it

did. (3RR159,157-58). This evidence supported any determination the Architect’s

failure to provide proper structural engineering alone would have caused value-

diminishing Project damage in the amount the jury found. The Architect’s

segregation complaint is academic.

2) Evidence of Unsegregated Damages Is Legally Sufficient Evidence of Segregated Damages. Complaint about the legal insufficiency of the supporting damages evidence

is procedurally and substantively invalid. Procedurally, the architect did not make

clear that its objection was to lack of evidence of segregation or allocation. It only

generally objected that there was legally insufficient evidence. See V.F.3.a., supra.;

cf. Minn. Mining & Mfg. Co. v. Nishika Ltd., 953 S.W.2d 733, 738 (Tex.

1997)(“objection pointed out distinctly the nature of 3M's complaint about the

damage question's form” sufficient).

Substantively, the legally insufficient evidence objection being asserted on

appeal could not be sustained even had it been sufficiently particular. The Texas

61 Supreme Court resolved this issue against the Architect in Nishika. 953 S.W.2d at

978-79. There, four plaintiffs sued for breach of warranty and recovered lump-sum

damages. On appeal, two plaintiffs were disqualified from warranty protection.

The court rejected defendant’s argument for a take-nothing judgment because

damages evidence was not segregated for the remaining plaintiffs. It held that

unsegregated damages evidence was legally sufficient evidence of segregated

damages. Accord, Stewart Title Guaranty Co. v. Sterling, 822 S.W.2d 1, 11 (Tex.

1991)(attorney’s fees not limited to permissible claims); Texarkana Memorial

Hospital, Inc. v. Murdock, 946 S.W.2d 936, 840-41 (Tex. 1997)(damages not

segregated by liable defendant).

3) Testimony Segregating Damages Is Not Required. The Architect is in effect challenging the jury’s ability to apportion

responsibility without expert guidance. The percentage responsibility cases,

however, confirm that such allocations are routinely entrusted to juries without

specific allocation testimony, and that courts will not substitute their judgment for

the jury’s concerning that allocation. Bechtel Corp. v. CITGO Products Pipeline

Co., 271 S.W.3d 898, 920 (Tex. App.—Austin 2008, no pet.); accord, Binion v.

Brinkley, No. 2-09-121-CV, 2010 WL 396385, at *2 (Tex. App.—Houston [14th

Dist.] Feb. 4, 2010); Hagins v. E-Z Mart Stores, Inc., 128 S.W.3d 383, 392 (Tex.

62 App.—Texarkana 2004, no pet.); Rosell v. Central W. Motor Stages, Inc., 89

S.W.3d 643, 659–60 (Tex. App.—Dallas 2002, pet. denied).

The jury may decide causation whenever general experience and common

sense enable a layperson to fairly determine that relationship between event and

result. Pilgrim’s Pride Corp. v. Smoak, 134 S.W.3d 880, 894 (Tex. App.—

Texarkana 2004, pet. denied). When not subject to precise mathematical

calculation, it is the peculiar province of the jury to determine the issue. Simmons

v. Bisland, No. 03-08-00141-CV, 2009 WL 961522, at *8 (Tex. App.—Austin

Apr. 9, 2009, pet. denied)(mem. op.). Allocation of damages caused among

multiple breaches is not subject to precise calculation.

d. Comparable Sales Were a Vouchsafe, Not the Basis for Valuations. The Architect confuses things again with its “comparable sales” method

argument. (Appellant’s Brief 46). Hornsby did not calculate diminution in value

based on comparable sales. (7RR128). He calculated income-based valuations for

the “damaged” and hypothetical “undamaged” Project on the Valuation Date

(7RR128-142), only using comparable sales to “test” his income-based valuations.

(7RR142-43). Even if Hornsby had partially relied on comparable sales, it would

not invalidate his opinion.

[I]f the opinion should be shown to be based exclusively upon considerations of incompetent factors, it would have to be disregarded, ‘but, all opinion being at best something of a speculation,

63 it does not cease to have probative force when impropriety attaches only to some, rather than all, of its underlying reasons. The question of market value is thus peculiarly one for the fact finding body....’”

Tex. Pipe Line Co. v. Hunt, 149 Tex. 33, 228 S.W.2d 151, 156 (Tex. 1950).

Comparable sales were not the sole basis for or only methodology underlying the

valuations. Their incidental, confirmatory role did not rob Hornsby’s valuations of

probative value.

Even when an expert’s valuation is based on comparable sales, the trial court

has broad discretion whether “a sale is sufficiently similar to be admissible as a

circumstance influencing an expert witness in arriving at his opinion of value.” Id.

(quoting Tex. Elec. Serv. Co. v. Graves, 488 S.W.2d 135, 139 (Tex. Civ. App.—El

Paso 1972, writ ref'd n.r.e.). The Architect has shown no such abuse. Comparable

sales are generally admissible unless “reasonable minds cannot differ that the

evidence of the other sale lacks probative force because of its dissimilarity….”

Collin Cnty. v. Hixon Family P'ship, Ltd., 365 S.W.3d 860, 868 (Tex. App.—

Dallas 2012, pet. denied) (quoting Bridges v. Trinity River Auth., 570 S.W.2d 50,

56 (Tex. Civ. App.—Tyler 1978, writ ref'd n.r.e.)). Here, Hornsby followed

USPAP in utilizing sales comparisons (7RR143) and provided an explanation as to

the appropriateness of the comparisons. (7RR142-145).

64 e. There Was No Recovery For “Stigma” Damages and No Double Recovery.

The Architect also reasons there was no evidence the Project was incapable

of repair, so any diminution valuation necessarily included “stigma” damages.

Again, the Architect’s premise is flawed. “Stigma” or “fear” damages are those for

reductions in property value due to the lingering perception or fear of a harmful

condition after it has been repaired or eliminated. Houston Unlimited, Inc. Metal

Processing v. Mel Acres Ranch, 389 S.W.3d 583, 594 (Tex. App.—Houston [14th

Dist.] 2012), rev'd on other grounds, 443 S.W.3d 820 (Tex. 2014). The damage

here is concrete reality, not anguished perception.

The factual flaw is that there was probative evidence that the foundation

could not be repaired. (4RR93,96-97). Thus, the question of diminution in value

attributable solely to market risk/uncertainty intolerance for a non-existent

condition never arises. The foundation could not be strengthened or altered to

avoid ongoing movement. (4RR90-92,96-97). The best that could be accomplished

was to control soil expansion and resulting movement by limiting moisture

infiltration. (4RR90-97). The foundation problems would continue. The efficacy of

the repairs was uncertain. (Id.). Thus, market uncertainty was over an existing, not

imagined, condition likely to cause future damage or deterioration. (Id.;7RR117,

124,176-77). On that is required for value diminution. Precision Homes, Inc. v.

65 Cooper, 671 S.W.2d 924, 930 (Tex. App.—Houston [14th Dist.] 1984, writ ref'd

n.r.e.).

There is no double recovery when the jury awarded pre-Valuation Date

repair costs of repair for repairs plus Valuation Date value diminution. The latter

takes into account future repair costs. (7RR123-24,177-78). That is how Hornsby

calculated the damaged value. (Id.). Indeed, there is no duplication in comparing

post-repair value to the hypothetical undamaged value on the same Valuation Date.

See Parkway Co. v. Woodruff, 901 S.W.2d 434, 441 (Tex. 1995). The charge’s

damage question avoided any possibility of double recovery by limiting repair

costs to those incurred on or before the Valuation Date (CR1127;App.B), which

were not factored in to Hornsby’s valuation. Those that might have been incurred

after the valuation date were included in the diminished value as of the Valuation

Date. There was no double recovery and no recovery for “stigma” damages.

f. Lost Profits Were Not a Separate Element of Recovery, But Were Only Used As Necessary for the Texas Supreme Court’s Approved Method of Valuing Property Producing Income. Hornsby’s income-based Project valuation utilized the method the Texas

Supreme Court approved for income-producing property. Sharboneau, 48 S.W.3d

at 183. “[E]stimating … future income and applying a capitalization rate … allows

the appraiser to arrive at a present value.” Id. The income method consists of

“estimating the net operating income stream of a property and applying a

66 capitalization rate to determine the property’s present value.” State v. Bristol Hotel

Asset Co., 293 S.W.3d 170, 171 (Tex. 2009).

Estimating future income necessarily includes modeling based on historical

performance, consultation with published figures available to appraisal

professionals and estimates of future occupancy and room rates. (7RR129-30).

Hornsby used these resources to arrive at an overall valuation of the Hotel itself.

This is not a “lost profits” model and RLJ did not obtain damages for “lost profits,”

despite the Architect’s claims. None of the Architect’s evidentiary insufficiency

arguments are meritorious.

VI. CONCLUSION AND PRAYER For the foregoing reasons, and the reasons presented in RLJ’s Cross-

Appellants’ Brief, RLJ asks the Court to:

1) Reverse the trial court’s the judgment applying the one satisfaction rule

and delete the credit for the amount of the Settling Defendants’

settlements;

2) In the alternative, if and only if the one satisfaction rule applies, reverse

the trial court’s judgment concerning the award of attorney’s fees and

either reform it to award RLJ unsegregated fees for prosecution of all

contract claims against the Architect and the Settling Defendants, or

remand the case to the trial court solely for a determination of reasonable

67 and necessary attorney’s fees for the prosecution of all contract claims

against the Architect and the Settling Defendants;

3) Grant any one or more of 1) – 2) above subject to the conditions

prescribed; and/or

4) Otherwise affirm or modify the trial court’s judgment in favor of RLJ as

set forth herein and in RLJ’s Cross-Appellants’ Brief.

RLJ further requests such other relief to which it is justly entitled, provided

such relief requested does not include a retrial on the merits of its claims against

the Architect.

Respectfully submitted,

MUNSCH HARDT KOPF & HARR PC

/s/Michael W. Huddleston Michael W. Huddleston State Bar No. 10148415 J. Stephen Gibson State Bar No. 07866000 3800 Ross Tower 500 North Akard Street Dallas, TX 75201 (214) 855-7500 Main Tel. (214) 855-7584 Main Fax mhuddleston@munsch.com sgibson@munsch.com

68 Benton T. Wheatley State Bar No. 24015171 Tracy McCreight State Bar No. 24037064 Munsch Hardt Kopf & Harr, P.C. 401 Congress Avenue, Suite 3050 Austin, TX 78701 (512) 391-6100 Main Tel. (512) 391-6149 Main Fax bwheatley@munsch.com tmccreight@munsch.com

Attorneys For Appellees and Cross- Appellants.

69 CERTIFICATE OF COMPLIANCE I hereby certify that this Appellees’ Brief was prepared using Microsoft

Word 2010, which indicated that the total word count (exclusive of those items

listed in Tex. R. App. P. 9.4(i)(1)) is 14,955 words.

/s/ Michael W. Huddleston Michael W. Huddleston

70 CERTIFICATE OF SERVICE I certify that I served a true and correct copy of the foregoing document

upon counsel listed below on this 11th day of June, 2015 by e-file:

Weston M. Davis Gregory N. Ziegler Steven R. Baggett Macdonald Devin, P.C. 1201 Elm Street 3800 Renaissance Tower Dallas, TX 75270

/s/ Michael W. Huddleston Michael W. Huddleston

TAB DESCRIPTION OF DOCUMENT CR/RR Appendix documents under Tabs A-I can be located in the Appendix to Cross-Appellants’ Brief and are not re-attached to Appellees’ Brief. A Plaintiffs’ Seventh Amended Original CR184-218 Petition 2SCR39-73 (duplicate)

B Charge of the Court CR1121-29 2SCR1563-71 (duplicate)

C June 13, 2014 Letter from Hon. Judge CR1437-41 Yelenosky 2SCR1598-1602 (duplicate)

D Final Judgment CR1708-12 CR1905-09 (duplicate)

E Contract with Soils Engineer 12RR6-11

F Contract with General Contractor 12RR567-651

G Contract with Architect 12RR26-128

H Architect’s Second Amended Answer CR46-79 2SCR5-38 (duplicate)

I Report of SB 890 (2005) n/a

TAB DESCRIPTION OF DOCUMENT CR/RR Appendix documents under Tabs J-O are attached hereto. J Purchase and Sale Agreement (PSA) CR606-676

K Legislative Committee Report for n/a 1977 Amendment to Article 2226

L Assignment of Contract CR578

72 M Intangibles Assignment CR701-05

N Supplemental Clarification of CR602-604 Assignment

O Elness, Swenson Graham Architects, CR 46-79;44-45 Inc.’s Second Amended Answer and Original Counterclaim for Declaratory Judgment

73 APPENDIX J NEW HOTELS PURCIIASE AND SALE AGREEMENT

BY AND BETWEEN

WBITECO INDUS'J'lUES, JNC. and each of me parties named on Sdledple A hereto (Sellen)

IU..J LODGING FUND U ACQUlSlTlONS, LlC (Purchaser)

ond join-ed by

WHITE LODGING SERVICES CORPORATION, as Manager and agent fN Sellers (Wh~ Lodgiug)

Qo!ed: March 16.2006

Exhibit f Witness _-_--~'-_.,A:_-~C/_.._,_~,.,?J::L:.o....t'""'":P~:-= Date S. . '2.~--- /7/ Melissa Parkhill, CSR - RLJ Austin Courtyard 018307 Exhibit 6

606 ------------------ -----------------

TABLE OF CONTENTS

SECTION 1. DEFINITIONS

SECTION 2. PURCHASE-SALE

2.1 Purehut-Sale

21 ~

2.3 Al~e Price

2.4 ~

SECTION 3. DILIGENCE; INSPECTIONS

3.1 1nsoeW9n Perjosl. 3.2 Title md Syryey Maners

3.3 Struc!ural a.nd Enyjroruncp.!!lt R.epons

3.4 TakiQ¥ !!!'!? Cawl!lrY

SltcrJON 4.. CLOSING CONDITIONS

4 .l {:!oaing Docwnent:s

4.2 Allocable Price

4.3 Materials

4.4 ('ondjtion of APP!i!:qbh; P!'!ID!:!lY

4.5 :Q1bg

4.6 faj!!.!le ofCom.litions

SECfiON 5. TERMINATION OF AGREEMENT ' '

-- RLJ Austin Courtyard 018308

607 SECTION Ci. REPRESENTATIONS AND WARRA.N11.ES OF SELLlm 6.1 Swus ofSeller

6.2 AuthQrilx sz!~lle[

6.3 Existing Agreements

6.4 Tax Returns

6.5 No Yioladoqs of Agreements

6.6 Litigation

6.1 ConcleomatiQn 6.8 N!2l A Emti!Ul Pmru! 6.9 Construc:tiQ!l ~OOllJC:t!

6.10 Eferdo~ Su!2~a!X~

6.1 J [ntentiQ!!!Il~ Qmi~

6.12 Inten!.iooall! Qmitted 6.13 ~

6.14 No Pmffi:rs 6.15 ti2 Yi21Aii2m 6.16 Seoome Im! ~m:el

6.17 lntentiQD!Ul Omitted

6.18 Groundf.mes

6.19 Llbor and ERISA

6.20 b!2..C.ammi!mmti 6.21 Res!atemem orSs:llc;r Re~I2!Kw @f!d Wammties

6.22 SllQ'ival of Seller Rmn;sentatiQDS

-ii- -- RU Austin Courtyard 018309

608 ... 6.23 Ljabjlin! for~adl ofSetl.erRepresetmioos

6.24 Disc!ii!neto{.Elcprm or Implied ~tkm$

6.25 Seller's ~ge SECTION GA. REPRESENTATIONS AND WARRAJ\'TIES OF WHITE LODGING

6A.I Status ofWitite Lodgjn£

6A.2 Alllhority oOYhite Lodslng

6A.J No Violations of Asreemems

6AA Litigatjoo

6A.6 Swriwl ofWbjte Lodging's Representatjons: 6A.7 L.i!bility for .Preach ofWhijt,: Lodging·s Rtprmntatioos

6A.B )Vhlte t,QS!gjna·s Knu~~o--!);dm:

SECTION 7. REPRESENJAIIONS ,ANI> W6RRANDES Qll' MJR.CfiASER 7.1 Stalus nnd Authoritv ofPurebmr

7.2 Agjoo oflJ!rcbger

7.3 No ViolatiOJ!$ of Agreem_egts

1.4 Lir.igatkm

7.5 W> Reliance

7. 7 ~testatemc:nl of Pwcha:;er Re;prcseptations and Warranties

7.9 lilbilily fm-.Sn:acb offurchllser RcpresenwiQP£

7.10 PUJ£baser's J(rowlcdge

-iii· -- RLJ Austin Courtyard 018310

609 ... 7.11 SeRer~~ Deemed Waived SECTION 8. COVENANTS OF SELLERS. PURCHASER AND WHITE LODGING !U Seller Coymm!;S

8.2 ~ Co'GOants

&.4 ligugt Permit1

SECTION 9. APPORTIONMENTS

9.2 Cklsjoo Staie!IWll; fnNr-Up

9.3 Sellers CJosing kQstS

9.4 Pult'hgfs Closiwl Cos!s

9.5 Cancellation fee

9.7 ~.

SECfiON 10. DSFAULT

10.1 DefBYil by Seller

I0.2 Oeftn1lt by Plrehaser

SECTION 11. MlSCELLANEOUS

11.1 AmcmenUo .IndemnitY. ll.2 Brokmee CommisSi~

IJ.3 ~

Jl.4 ~

-iv-

Rl.J Austin Courtyard 018311

610 ... 11.5 Waiyers; ModifieR ofA~t

I L6 1\sSi!UJ!lW!t Spcmso.rs and Assigns

Ju Seyqa!n1i!v 11.3 CounlemW

tJ.9 Govemin& l..aw

ll.l I> PerformN!Ce on Businm P!n

1u1 Merom' fees 11. 12 RelatiQnsbifl

11.13 Like-Kind l2xdtange

11.14 Purshm o(Ooc or More Seller Entities

1 I. 15 Eurtl!er ASSUl1!11Cey

I l. I6 Alltboritv of White Lodging

11.17 Seclion and Other Heading~

J f.lll Time of the Essoce

RLJ Austin Courtyard 018312

611 ... NEW HOULS PURCIMSE AND SALE A(!RUM§.NT

'l'mS NEW HOTELS PURCHASE AND SALE AGREEMENT is made as of the 16th day of Match. 2006 ("Effedfve Date") by ad between (i) WHITECO INDUSTIUES, INC., a Nebraska CCI'pOflllioo. and eii.Ch of tbe panics uamed on Sefmi!leA ~remo (individually, "'Seller" and c:oUectivdy, "Sellen"}, and (ii) RU LODGJNG FUND li ACQl!ISI110NS, LLC,a Delaware limited liability company ("hrdtuer''), and joined by (iii) WHITE .LODGING SERVICES CORPORATION. an [ndiana coJPOI"'(ion ('White Lodpng'') liS Manager and agent for the Sellers.

RECJTal.S

J. Sellm' IN the owners of aU or the Properties, with the specific ownership of spec:ift<: Properties being set lbnb on §el!edp!e A hereto.

2. Ptm:haser desires to ptlfChne all oflhe Properties and thereby acquire aU of Sellers' teSpeC~ive right, title and inmrest in md to the Properties upon the terms and conditilllts hereiflli\er set fonh.

3. Sellers~ to sell to~ all of the Properties 11nd lbereby convey all their respective right. rille lllld interest in ~h Properties. upon the terms and conditions hereinafter set fonh. 4. Upon comple'lion of !he Improvements on eaeb Property, White lodging will be the Manager ohll oftlw: Properties.

5. Purchaser and White Lodging have agreed that White lodging will manage lhe operatioo of aiJ of tbe Properties after Purchaser acquires the sarue.

6. All capitafmd tmos USed herein and 001. otherwise defined ~thaH have the meatJiqs ascribed to such terms in Section 1.

NOW. TIIEREFORE. mcunsidemtion oft he mutwl covenants herein tol'ltllined and other Rood Md valuable cunsidenuion. the munml receip1 and legal suffkic:ncy of which are hereby acknuwlfil,;td. &I len. Purl: baser nnd White Lodging hereby agree as follows:

SECTION I .Dif1NmQNS Capitalized terms used in this Agreemll!l'lt arid not defmed elsewhere herein shaJI have the meanings set fOrth below: ..Act pf Bankm@" shaiiiTJtlll) if a Pil1.Y hcrelo (or any genet'llll partner or member lbereofat:ting on behalf of sucb parl)')shall (i)apply for or consent roth

-- RLJ Austid Cmutyard 018313

612 ... ofitself or all of or a substantial part of its property; (ii) admit in writing its iMbility ro .Jlfl)' ia debts u they become due; (iii) make a f:CDe:ml assignment fOe' the benefit of its creditors~ (iv} .fHe a voluntary petition or commerJCC a vollllltary case or proceeding under the Federal BaDkrup(cy Code (u oow or herea:ftcr in dfeet); (v) be adjudicated a bankrupt or inso!~: (vi) file a petition seelciDg to taJce advanrage of llriJ other law relating 10 bankruptcy, insolvency. reorgMizatiotl, winding-op or composition or adjustment of debls; or (vii) filii to canlrovert wilhin sixty (60) days, OJ acquiesce in writing to, any petition filed against it in an irwolunwy case or proceeding under tht Federal Bankruptcy Code (as nuw or bereal\er in elTect).

..Amliate" shall mean (i) lilly other Person tblllt is directly or indirectly (through one or lllOI'C lntemtediaries) controDed by. under common control with, or~lliDS • PetSOh. or {ii) any other Penon m wbieh a Pmoa has 11 direct or indirect equity inteteSt constituting at least a majority interest oftbe kltDI equity ofsuch other Pe:rson. For purposes ofdlis definition. "l:ontml' &hall mean the pos!le5Sion, directly or indirec;lly, of the pcW~eT lo dirtct or cause lhe direction oflhe mllllllsemerd and policies or any Person, w~ through the ownership of voting securities, by contract OT otherwise.

''1\greemm.f' shall me3n this Pun:ha!ll: and Sole Agrtf:ment. TOgether with Sd!Bfui§A lhrougb.! lind lhe J)lsdosu,-. Sc:fledlfle hereto, as it and they may be amendtd From rime to time. ••

"AJiopblc: Prke" shall mean. wirb respect 10 each Property, the portion of the Purclla5e Pritt allocable tO such Property as set forth on the Allocalion Scbeduk llltiPC~d hereto 11!1 $ehtdtdf C. it being undtm:tood and ~ thm the asgregate llfnOimt of the Allocabte Prices of all Properties shall be equal to the Purchase Price. subject f£1 any or adjustments and ~pponionments lllllde ptiDUilm ro the provisions this Agreement.

-AUgqtlfg &bedule.., shall mean tbe schedule auached as ~le q hereto sbowing the AllocDble Pritt for each Property. • ~eordo!mcJ!( Tnacf' shall have !he !llell.ning given such n:nn in Section 9.1. "Arcl!il!et" shall man an AlA qualified atehi1ecl who s:lWI haYe bad a signiliciiTll role in the preparaaion of the Plans lind Specifications.

~~.. shaU mean, with respect to each Propetty,all of the PelSODIII Prollf!rty, Supply rnventories, Consumable Inventories, COillracts, IUld Licenses and Pennia, now owned or hereaner acq\tired by each Scllu in connl!'ction with or relating to its Property. ather than any Excluded Assets with respect tu such Property. -~ "'Amznrmu aM !\lsgmptio! ofCOJ!!ratl!"' sh11ll mean 111n Assignment and Assumption ofContrat:l! in the li.lrm ofScl!edek l hc."I:C1<>.

-wnmmt 111K1 Assumtion ctf Ltasc( shall mean an Assigrunent and Assumption of Lease in the fonn ofScbechlte J hereto.

-- -2· Exec:ution Vmion

RlJ Austin Courtyard 018314

613 ... ''Assimpept of!Jgp•.lm!iliJ m lp,lmgibl@" shall mean an Assignment ofLicenses IUid Permits in 1be {(11111 of Selaedule K hereto.

..B!l!Dge" shall bavc: tbe meaning given such lmn in Section 9.6. "BiU ofSg.. mall mean a bill ofsale in tbe form ofSd!ed!k L hereto•

..Baum D!y" shall mean my day other !ban a. Satl.llday, Sunday or any Oilier day on whk:h bimtin& institutions in the State of Maryland liN authorized by law or executive .action to close.

··~.. rmd '"C!osiag" shall have the mealling given suc:b term in Section 2.4. "Qesin.COJd!titM" shall have tbe meaning given mch term in Section4. ''C!!!Bnc Dah:" shall have !be meaning given IJtlCb 1enn in Sccuon 2.4.

~,. shall mean the Consolidated Omnibus Budget Reconciliation Aet of 198S.

"Completed" shall mBal'l with respect to the Improvements on a specifit Property that sudt Improvements .have beefl constmt:ted. and ampleb:d (j) in a good end workmanlike mWJer, (ii) in eompliance with all app1K:able laws, rules and regulations. {iii) in accordance, in all tnaterial respects, with the Plans and Specifications, (iv) in compliance with any (a) conditional opening approvulletter, (b) authorization of Fmnchisor or{c) any PIP. and {v} incomplillllce. ina!J material respectS. with lite requiremeoms of the SelkrFranch~ Agrtemenl. as !be same may be modil:ied or amended by ae~"fflent Oel1A"«n Seller and the franchi!lor. provided IM12ny materia( modification Of amendment of me Seller Franchbe Agrecmeut shall be subject to Purcllaser's approval, whith appn:wal shall not be unre~~sonably \\lithhekJ. PCellletim! Csrtifitate" 'ball mean the certitica.te of a Seller to be deliveted al Closing and certifying to Purchaser lhar {i} the Improvements haw: been Completed. and (ii) the Hoti!l has been fully equipped witb the furnishings. flltlun:s, equipment and supplies necessary for !he opemion of the H~l as required pursuant to the Sdlet Franc:hise Agreement. lo which cenifitate shaJI be appended (a) a copy of 11 current certifJCate of occupan<:y or equivalem thcreor iss~ by 1M jurisdiction in which the Pmpcrty is located and evidencing the ril!hliO occupy the Impwvetnet~ts on such Property and (b) a certifiCate of the project manqer (who may be an employee ofWbite Lodging or :m employee of an Affilillte of White Loddng) for lhe developmeat of the lmprovements, cenifyiq to Pure~ that the lmprovemeniS have been completed in acc::~c with the Plall! ll%ld Spei:ificntions.

"£cmp!tmt" sball have me meaning givm such temt in lhe definifion of Physical Condition.

"'i&DWV.ble J~tveatorics" shall me:m aU merchandise, food and beverages held for sale in connection wilb the operation of ~h Property to the ex1ent the food and

-- RLJ Austin Courtyard 018315

614 beverage ootletB. are not opmted by third-party 1emmts under lell$.1!! ~ pi'O'IIided . that any llcoholic beverages that c:asmot legally be tzamt'erred 10 Pw-chaser al Closing shall be and tetnain lhe propmy of Sellers until such time as: such beveraget may legally be traosfcmd to Purchaser.

'"Co•tnS!I" shalf me.n, wilb respect lO each Property, (l) atl eonfem1Ce. oonvmdon and banquet room contracts. guest mom resnvations; {u) Ill! leases, concessions and other occupancy tgreemeo~. if any. with tenants of the Property; fui) aJJ leases covering the equipment nec:ess!U)' to operate the Property. if any; and (iv) all contracts, agreements {other than suiJcohtrac1s) lllld wuranties oo-vering the design. development. con$tnletion. operatiorw, rnainttn~.nee IIIDd repair of the Property and/or equipment loca.ced in the Property.

"!!mr' sballroeao a 5pecial wammty deed in substamiaily the form attached hereto as Sdl!4Jde 0 (or such other fbrm u is customarY in the applictble jmildictim to the same substantive effect) when:by each Seller of a Property conveys fee simple title to lhe real property portion of the Property {other Than the real property portions of Properties which are in the form oflcldebold interests) 10 P~~tthaser. -~··shall rnran the deposi1 in the amOtDJI of Ten Millim Dollars ($1 0,000,000.00), qe1her with interest earned thereon. -- "Deposit Ess;pw IJllfJ'!IS!iopJ~ shall mean lhose insmactions 10 the Title Company in !be form of S9ed•le P attached hereto pursuan1 ttl wbieh the Titk: Company will hold the Deposil.

"Effecqve Date" shall be the date set fcnh in the prellmble of this Agreement that bas been entered by agfeeml!t'lt of counsel for Sellers and Pun:haser alkt all ~nntetpart siptures and Scbcdult!s haw: been rcceh'ed and attached • ..Eipployt! Li!!!bil!tle£' shall have the meaning given to such tmn in Section 9.1fnt.

~EatiiY furd!ase Notice·• shall bnr: the meaning given 10 such leon in Section I U4.

"ERISA Affiliate" means any en~i1y wh.iclt. together with the Seller or Menagcr (as applieable:),js required to be umed as a si~q~le employer mufer Code Section 4H or ERISA Stctioo 400 I. ~~;studq! ets'" shrdl mean. with re

-- RU Austin Courtyard 018316

615 ... boob. ledger sheets, files and records of Seller or my of Its Affiliates, oiliet than t,ba,e that are exclusive to the .Property. (vi) all investment and tor finan.ci11l data of Seller Md its Affiliates except to the extent Seller c:xp~gy 11pec5 herein to provide sucll dala to Purchaser. {vii) all cash in vending machines and ATMs ~~ thr Propeny and in cash nccounts in Seller's or White Lodging's name. 11n<.f (viii) sueb Other items II$ arc spec:ifieally reserved for, or retained by. Seller and are identifled on Sdudtde 0 hereto. provided,~ !hat. notwithstanding the f~oing, oo data relaling to tbe opemiotl.s and/or maintenmce of the Property shall in any event be deemed 1o be E:xcluded Aslets. ..Et~tilll!: El!tr4 Amgnt" sball mean lhat certain Purchase and Sale Agn:ement dattd February 7. 2006 by md between Puroba:lcr. the Existing Hrul Agrecmllllt Sellm and Wbite Lodging Services Cmporation for eighty-MYell (11) hotel propcnies and a TG1F Restallmlt.

..E!iffiulJWI At!mmmt laspeslioa Period" shall have lhe meanlog given to !!UCh term in &etion 2-2-

"&istl!: Hetti A.J!rttmqt Sellm" shall mean those Pcrsou idmtifted as sellers on Schedule A 10 file Existing Hotel Agrttmeot.

"hgtiag Ho(!l frepertft!"' shall meu time propenie:s identified 011 Schedule B and Schedule B-1 to 1l1e Existing Horel Alreement. ...tYAr shaD mean. with respect lo each Property. an appliances, machinery. c:Je,·ices.lixtures.llppurtenances. equipment. furnit~. fitmi!!hiOI!sand IU'Iiclcs ofua~ibk personal property of evel)' kind and nature whatsoever cwned by the Sell~. and loc:aled at or used in connec1ion with the ownership. operation or main~ of such Property. other than any Excluded As~ts.

"FragclllR, shall mean the brand rmme ~ified oo Sclmiple E as being ihe identified brand name pursuantlO which a Hotel shall be operated subject to e Ftmebise Agreement

YFra!el!ise Agnemeat'' shall mean. with resrect to ~h Propeny. the franchise Agreement to be entemi into by Purchaser with Franchisor at or prior to the Closing or, if an aiSling franchise agn:emenc is being assumtd by Purt:haser pursuant to the election of Fn~~~dusor. then tbe assumed fr.mchise agreement from and after Closiux.

"fraogRII Hater shall mean a hotd which is franchbed to operale as a Fl'IIDChiJC under the: Seller Franchise: Agreeml:11l. ·Frur&fsor.. sllall raeon mernity which hu licensed a Fran~:hise to a Se.ller and/or which wiU enter into a new Fmnchise Agreement relaling to a Propmy \\-ith PurchaSt>r. ''Gfgetal E.<~.toppel" shall have the meaning given such term in Section 8.1 (i).

-5- -- RLJ Austin Courtyard 018317

616 "Grmmtl Lwt Esfop!!d" sbaiJ mean an estoppel cemficute sub&bl.ntially in the .Corn~of Scla!!f!l§ M hereto (subject to sueb reuonabk vsriations as may be ~uested by l'un:haser's lenderS and the applicable Lam:llooj)•

..~.. all mean Hod~ Ward Elliott "um.!" shaD mean the Compleled opmting hotel, franchised by the national Fnmdri.sor idemified gyhe francbisor for such Hotel oo SeM!I!!l¢ E.localed on a. parcel or pan:e!s ofreal property whieh is a part ofa Property. ..lrnmaterilll T!!ldg" shall have the meanins g.iven such term in ~ction 3.4{a).

.. I.mpme!JW~b.. liball mean. \\ith respect to each P~t~perty. all buildings (meludins the Hotel), fi~ttures. wallr. fences.landscapin& 4lld other stl1ldUres and improvements siu.ted on. affixed or appiiTteDitl)t to the real property including, wllhout limitaUon, all pavement. acceu ways. curb ew. parking. ki«chen Jll1ld support facilities, meeting and confemx:e rooms:, swirtl11lin& pool facilities, rweatlooal amenities, office facilities. drainage system and facilities. air ventilation and filtering systems ad facilities and utility facilities and connections for saniWy sewer, potable water, irrigation. eh:etricity. ldephooe, cable television and natural gas. to the extent the same form a part of the Propeny. ~tnspa;etio• Peri!XS'' shall have the meani11g given such tenn in Section 3.J(a). -Jpspcctiu Rmort.. shall have the meaning gn:en soch term in the definition of Ph)"sieal Condition.

-Lallfllkin:l" sball mean (i} !he Finley Company, 1he fee owner and lessor of the parcel uo which both the Coortyard and Residence lnn In Austin. Texas {propeny numbezs 93 and 9-IJ ~ consrructed, and {ii) the City ofB'Ioomington, Jndillllll Redcvelopmem Commission. the fee owner and lessor of the parcel on which lbe Hihon Darden in Bktominf,!.ron. Indiana {property number 95) is construttcd.

.. l.ap!IJmis-shll.!l mean. CQIJet:tively. each alld ev~· Landlonl. ··~&m'" .sfWI m~ individually or (ollcetivdy, any of !hose ground lease agreemems iden4Hied on Se.bedtale D hereto and ..~·· shall mean all oftbose ground lease agn..~ents. '"l&i!K fil:redit'' shall have the~ given such lerm in Section U(b).

-Lkmm pd f:maits.. shllll mean, with respect to each Property. aU pennits, licenses and aWloriZIMiollll issued by anr stale: ur Joca[ !Wthorities and requiml for the: coJ"ljtnJt"tion. OWI'Iei"Ship and operation of the Jmprovemcms including. without limilation, completion certif"ICDles. buildill!! permits. signaae f!t!rmits. site l.llle approvals. zoning ccrlificates, 100 environm~"'IW ami land use permits. provided that sueh permilS and licenset aretnl'nSfembie or assignabk.

-- RLJ Austin Courtyard 018318

617 "Liens to be Reieullld" shan have the znearring given to such tenn in Section 3.2(d) .

..Liquer Pemeit- and "Lk!llot' Permits'' shall have the meaning given to such terms mSection 8.4. "l~htaagemept Mreemepf' shaU ml!'lln, with respect to each Property. the new Manag.:m~mt Agreement, substantially in the form ofSebmle N .hereto, to be enlered into by While LodgiDg. as maoager, and Pun:haser, as owner of the Propefly, at or prior to Closing.

"'Mauger" ~all mean White Lodgmg. "Material Tak~g" shall b...-e the meaning given suth term in Section 3.4{a). "!:!:Ja,dmgm Plmkal CimdJtiom Ol!lilt!tiotf shall have the meaning given s~h tenn in Secdon 3.3(b).

'"Qpe11laa pate"' shall mean the dale on which a Hotel opens to the public for business as a Fnmchise Hotel in compliiUice with the Seller fi'IUlChise Agreement and all ~pplicable laws, rules and regulations. -- "Person'"' or "Pers011s'' shaD mean liD)' individmll or en.lity. and the heins, executors. administtatOrS, lepl repmenta.tives. s~~ nod assigns of such Person where the ccmtext so permits. -· ~rmeaal Pa·P.nrrty., ~halll'llea.n all fumiture. furr.isbill£-<;, works of!lrt.lradc li:\tures and equipmenlloeated a( 11ndlor used in eonnec:tion with the Property, indudinc d1c FF&E.

-Qysl£!1 CD'ndition" shall mean a suuctural or em·imnmemal defect iden1ifitd by an independent and qualified structural or envirorunental consultant ("'ConSllltautj in either a p:ropert)' condition DSSeSSment repon or an environmemaJ ~tc assessment report issued by 5\!Ch Consultant (either an -raspeetkln Report"') that {a) efther(x) involves a remediation cost of$25.000.00 or m«m, or (y) in the reasonabl!!-judgment of Purchaser. based on the Inspection Report, has a mareriol impact on the marketability or operations of a Propeny. and (b) is. in the professiomtljudgmcnt oflhe C'oosuhant as e,·idtnced b)' the Inspection R~port. an ~immediate need.~ ·

~Physit;al Coaditjpps"' sftall mean.1:olleclivdy. each nnd t:\'et)' l,bysiral Condition.

.. FbytkaJ Cpditi~t~~s Cr:gfif' shall bave the meaning given such term in Section 3.3(b).

"Phviigl C'oBdltiGII!S Cau·e" shall have the meaning gh'ell sueh term m Sectioo 3.3(b).

-7~

RLJ Austin Courtyard 018319

618 "Phnical Cop®ioos IWmvr" shall have the meaning give-n such term in Section 3.3(c).

"Pbyaiql Coaditio~~tt Notice.. shall have the meaning ~:iven such term in Section 3.3(a).

".Pl!l'lim! C9!1111Kklt!ll Resmse" shall have 1he meaning given snell term in Seetioo JJ(b). "m" shall,. to the exlmt applicable, mean all of the ~equirements ofa Ftanchisor for improvements tO 11 specifiC Property, including tbe establishment of reserves fbr the making or.mch ill'lproVemc:nt!l at the Pro{:mr. but only to the extent th1n such improvemcJJts are required lo be completed ~ilhin twelve ( 12) months after the Closing Date. ·~·· sflftll mean, collectively, tacit and e'\ll:ry PIP. . ''p)m !!lid Spedfqcw" shall mem. with respect to each Properly. those nenain plans and specifications for COIIlltrutrlon of the ImprovementS whieb: (i) comply wilh tbe requirements ofall appfic:able laM. IUh~s and replations and with lhe requirements of the Se-ller Francblse Agreement, and (ii} will be provided by Seller to Purch!lw during the 1nspoctir.m ~riod. as 3UCit pia~ and spmlications may be m

"J'ost-Omillg &erow"' sh<\11 me&llllll escrow in abe form orSd!!!d!le T.

''Poat·Ck!sbtg UIHlerf!k!gg" mall bavr the meaning given such term in Section Jl.l(c}.

··J>rppe[ties" shall mean. collecth'l!l~. euch and cvuy .Property•

..Property" .shall mean the fee simpk intete$1 or leasehold interest, a~ !lflPiicabk, in a partitular pared of real mate iOelltiJied by address on Sthechllt Q. Md by legal description on ggechtle S..l. togetbeT with (i} the Improvements i:OOSCnlded on. or to be tonSlNCted on. such mtl estate; and (ii) Ihe Asstls. . '· ~rrppgty Cma]!r'' shall have !he meaning giv.m to sucb term in Section 3.4(b).

..Pmertv Eg!J)I!!"«S'" shall mean all c:mplo)"t-~s orSelkt. Manager or any l\ffili:uc of Scller tlr MonftJII."I' employed at ;t Pr.1pcn~.

-8-

-- RLJ Austin Courtyard 018320

619 ... '1!'!J!riet!rv lgfo!'l!!!ful!" shall mean the White Lodging owned software program kllowu as «full Service Deily Sales Propm... "P!rdwe Price" shall mean the sum ofTwo Hundred Fifty-One M'dliOII Six Hundred Tbirly-Egbt 'J'bousand Eight Hundred Sewn Dotlm ($251,638,807.00). which amooot sbllll equal the aggregate of the Allaeable Prices fot all Properties being purchased. subject to allJKijustments and appmtiOOitlellts made pursuant 1.0 lite provisions of this Agreement. ..P•rclt!!!H!"" shall mean RIJ Lodging Fund II Acquisitions. tLC and its permitted suecessors and assigns. .

..&eodiiiJ Ch•!Jes" shall have the meaning ,Pven to such tenn in Section 9.3(11). ·

..Sale ~t BiX!!!" shall bave the memtiog, given 10 such term in Section 9.6. . ~" sholl have the meaning given to such tmn in lhe Preamble to this Agreement. As rome times used herein. Seller shall mean the :respecth:e owner of a particular Properly. "Seller l'mnehise Agrttgu;gt" sban mean the franchise agreement enrered ioto by Seller and the Pnmebisor for the operation of a Franchised Hotel, a copy of wbith shall be delivered to Purchasef during rhe Inspection Period. ·~shall mean, collec!ively. each ;uvd every Seller. ·-stalldard EBdOf]e&npts" shall have meaning given siiCb ll:rm in S~rion 9.3(e).

'"StP»lT lnvt!!ttrles- shall rnean. \0/Jrh resp:ct to eath Property. all china. glasswl!re.llil~me.linms. uniforms. materials and supplies used or intended for~ and/or for sale in connection with the opmttion orthe J:lropeny. all fuel stored on sire, and all inventory. if any, held for sale in 1he gift shops or other re~ail outlets located in !he Property to the eKtent the rebkil oudets are not opc:mlc:d by lbird·Jlllrfy ternmls IInder leaJ;e agreements.

-TS!J!i&~n N!!tis!~ shall have !he meaning given S\'dl tenn in Section 5. "Thlrd-Pgrtv Costs" shall nave the. meaning given StiCh term in Sectfoo 9.4{i).

'"J]!inJ-farty f!itcl!ne Rig!l!!l:l' shall have the meaning given to suclt tenn in Section 8.1 (j}. _,

'"Tide Commitmr:mts" shall hnve the meanins given such i.enn in Section 3.2. d!ltle S:OI!IP!u" shall mean LandAmetlca FintneiaJ Group. Inc.

-9- -- RLJ Austin Counyard 018321

620 "Titk CAAd®!D bcJ&mi!W!t!" shall hm: lhe mtaning given such term in •Section 9 3{f).

''Tille Coadijio!S" siWl have the mtaning given sueh tenn in Section 3.2(a).

"'Tiile Ccm!IWqm Notig" shall !moe 1he meanin& given such terDi in Section 3.2(b).

"TitJt Poiiey'' shall have the meaning given such term in Section .3.2(t). "'Tme-Up" !dlaO have the meaning given such term in Section 9.2. "liBusd OJ!im Cllegu"" shall bave the meaning givm such term in Section 9.6.

.. WARN Ad' shall meso the U.S. Worker Adjustment and Retrtrining Notification Ael

·')¥bite Lcdlring" shall tnean White Lodging Services Corpomion. w~,.. shatl mean Wbireco Industries, Ine.

-· SECTION2

PURCHASE-SALE ~

2.1 Putcg-Sale. Purchaser ~by agrees to purchase from each Seller, and each Seller h•:rcb} agr~s to sell and ccnvt)' iO Purchaser, for the: Allocable Price, rhe Property owntd by such Seller.~ ~.to and in ~e wi\h lhe lmns and conditions of this Agreement. None oft~ Sellen mull have any obligation to convey. and Purcbaf

2.2 ~-

(a) Purchaser has deposiled into escrow witb the Title Company Two Million Dollu~ ($2,000,000.00) to be hdd b)· the Title Compan~· in an interest bearing !ICCOunl. in ucconlanc.: with tht.-~enn:; of lh\;' 1..:::5-isting llutd Agrc.!menl and cenain dcpo$il estro\11: instructions delivered to Tide Company by White Lodging and Ptm:huer. Pursuant to the r.erms of the ~xisting Hotel Ag.reem!!llt. unlw Purchaser elects to terminme the Existing Hotel Agreement prior ro the expiration of me IJ15P"tion Period, Purehaser shall increase the~~ to Ten MilliOtt f)oltan ($10,000,000.00) prior to the expiration of the inspection period' set fonh in the Existing Hotel A~nt t"Ellilltiag Hotel Agreemesat 1111specfiH Period"). The Deposit shall be fu!Jy refundable to .Purel:laser i£ Purchaser elects lo terminAte both (i) the E~~:isting Hotel Agreement prior to the expiration of the Existing Hotel Agreemml Inspection Period. aod (ii) tbis Agreement, as htrein provided. tor any miSOI1 prior 10 the expinnion orthe lMpttlioo Period. After expiration oflbe Existing Jiotel Agreement Inspection P~riod and the

·10·

RU Austin. Courtyard 018322

621 Inspection Period, except for provisions of !.he Existing Hotel Agreement and Ibis Agreemem that exp:essly pnwide for~ return of the Deposit to Purdwler, Purcbu:er aclwowledges and agrees that the Deposit shall be no~H:ei\md:able.

(b) Sellers and Purchaser ibrther agm: that after clming un.der the Exisli11£ Hotel A.greelnellt (ij tbe Deposit thall continue to serve liS the Deposit for this Agreement. (ii) Purt:111ser may elect lo post n tetter ofO:edit in the 11m01111t of the Deposit in substitution for the linld! held in cserow by the Tnle Company. If Purchaser eleds to replace tbe funds in escrow with a J..etu:r of t:;redit, web Letter of Credit shall be issued for the benefit ofSeller by a bank or fiJliBJCial institution having a net worth of not Jess dian st,ooo.ooo.ooo and shall be $1lbstantia0y slmi1~~r to the ronn of letter ar credit attached hereto as !bliibiJ A !!t.SdJsc!Jltl ("'Letter of CredU"').. The Letter ofCredil shall be held in escrow by the Title Company maecordenee with the terms oftbe Deposit Escrow lnstrudions. Should tbe expiry date of !be LeUer of Credit not be a date ilial is at least thirty (30) days after the lnt pro,jecled Closing Date. Purehaser shall provide to the T'ttle Compmy an •meudment (0 the Letter of Credit cxtendios such expiry date 10 a date oot earlier than thirty (30) days after such CJosin& Date. If Purt:haser fails- to timely piovide snclt 8111endment. or ifthe Title Company hu filed an interpleader acrlon. the Title Company !hull present lhe Letter of Credit for payment and shall hold the proceeds in lieu ofthe LelterofC~it. but ot!Jerv.iae in accordance with the tenns of the Deposit Escrow IDstrucrions, or shall pay the ~ i~~to a coun or competent jurisdiruon in coojunc1ion with its inrerpleader action.

(c) To the eXtefll that~ Deposit is in the form of cash. the Deposit shall be applied pro raUl at each Closing against that ~ that the Allocable Priceo bears to dJe Purchase Price: ~.~.in no~ matt the DepQsit bt reduced to a sum tmt is less tbnn Two Million Fivt Httnclred Thoosand Dollars (S2,500,000.00} prior 10 rhe fiDal Closing. AI Clmling on the last Property to be cOtTYeycd herel.lllder, the balance of the Deposit shall be applied against me AIIOC8blc Price payable to the Seller ofsuclt Pmpen~. ff. pursuantt~l Section 2.21b). Purchaser elects 10 convert lhe t1ISh: Deposit to a Letter or CrediL then following euth Closing. P'urchaser sb&ll be entitled 10 tqJiace Inc L~tter of Credit with a new Lener of Credit in a lesser amount: ~ h!)Wever. at no time shall such Lett« llf('redit be in Dn amount that is less than the amount of the cult Deposit that Purchaser would otherwise be required 10 mairnain ~under.

2.3 h!Jocpbk: fril:.e. At Closing on each Property, the Allocable Price, subjm to any adjustments Md apportionments made pursuant to the provisions of this Agreement. shall be payoblt: by Pwdmser, by wire tmnsfer orinmtedialely available funds. to an m:count or ~ 10 hie desipted by White Lodging prior to Closing. •.' 2.-t ~-

('il) Th~ purchase and sale of 1ho! PI'Opl"l't~ and other tmnSI!rtions conremplated hm:by dm11 he ron.

·II- -- RLJ Austin Courtyard CH8323

622 Joc::atlon as Wbile Lodging and Pnn:.ba.st:r may ~ COUEI9el for- Sellers and Pmcbuer slulU begin ammblinQ the dOCWilents described mSection 4.1 and 1he materials described In Section 4.4 not less tbtn one week before the scheduled Closing Dille (hereinafter defined). (b) &eept for CW5ing on die Bloorning~an Hilron Garden (property number 9S), Closing on eaeb Property shall oecur on. (iJ the date that is the first Busineu Day following !he date lhlt b thirteen (l J) months after the Opening Date or (ii) such other date liS the Seller and Purclmcr shall agree. but in no event later !han the date specified as lhe Outside Closing Date fi)J' such Property oo Sshecltd& E. Closing on the ·Bloomington Hilton Oardm (property liUMbc:r 95) shall t!CCIII:otl (i) JanllfUJ' I. 2009 or (ii) st!cli other dateRS the Seller .and Purchiuer all 11gree. bat in no emlt lalet than the date specified as the Outside Closing Date for such Propc:ny 011 smah!le .E.

(c) For purposcsofthb Agreemem. Closing shall be deemed consumm111.ed on the date r'Ciosfnc l>•te") that the Title Company rettives (i) funds from P~randlor i1s lender sufficim to close the sale wilb respec!IO a Property and (.ii) instrutlions to disbuml Ncb funds in accordance with the Settlement Statement. The provisions of die p-eceding scmmce notwithstanding. in dJC event that the Title Comp;!l1lY sball rereM: such funds or lhe illstruttiOPS lo disbuni: sucb funds after 3 p.m. (WasbinJPOO. D.C. ~).the Clcmng Da!e mall be lllC' next :Business Day.

(d) Seller sbaJl provide notice to Pun:baseroftbe anticipated Opemng Date for a Hotel not later than thirty (30) days prior to such antioipeted Opening Dau: and or shall provide II second notice to Purthuer. 'A:hic:ll SCC\'100 notice shall advi!JC Purchaser the ac:tuaJ Opcni11!J Date. 001 lruu than thirty (30} days following the actual Opening Date. The foregoing proviskw of Ibis ~n notwithstanding.. if Clo$iog on IRI)' Propeny has not occurred ~nuse ofStller's tiilure lO Complete the Improvements or ~ c;£lfJvcy the !"ropc:n)- in BCOO!'~Wlce with the 1em1s of this Agreanent by 1he date specified on Scbedale E u the Outside Closing Date, Pun:huer shall have the right, in its sole diecmioo. to ~mninate ibis Agreemetll with respect 1o such Propeny. wbm:upon tbe Purch• Pric:e shall be mluc:ed by the amount oftbe Allocable Ptmbese Price for such Property and Pun:llll$CI' sballllll"'e the risht to reduce the Deposit as provided in Section 2.2{c}.

SECTlON3

DU.. IGEISCE; KNSPEcnOiiSj CHANGES TQ Pt.ANS .' 3.1 lnspcstion Period.

(a) Duri.nc !he period beginning on tbc Effecti\

-- RU Austin Courtyard 018324

623 :"'

deliver to Purc:beser(i} alany time prior to or after Cl0$ing, any material ~hat is Propri~:~a~y Infomlatioo. and/or (ii) prior to Closin8, any prieilli information contained in the atdllt«t a~ents and the genen.l contr'IICts for the- Propenies. For purposes of clarifYing the immediately preceding sentence, Sellen or White Lodging shall deliver to Purclwer copies of an:hitem" a~ and gegeml conl.l'lldJ for lhe Propemes; PW'ided- ~ that Slltb agreetntms shall have the pricing informatloll redacted. At Closing. Sellen or White Lodgiulg sballll§ip lind ddiver t

(t:1 To th.! ~1.:n1 that. in rolll)ectioo \vilh iiS i~M:Sti811lions.. Purchaser or iiS agent5. representativct Of ~;;ontni~OI'$, damages or disturbs any Property, Purchaser shall be responsible for n:tumiag the mmc to sulman1ially the same condition that existed immediately prior to such damaf.e or dl~ce. To the exlent thai Seller e.lec:ts.. in its sole discretion, 10 UDdenake d:le restoration of a Property damaged by Pun:baser or its agent$, Purehuer shall reimburse S11ller for the teUOMbte costs of suc;h reston~tion provided 1.1wt Sdler hn notified Purebaser of the actions proposed to be taken by Seller and ilie anticipated cost thereof prior to SeUer c:ornmencing sucb restoration. The preceding M"~lenec ootwithsutndi!IJ. Seller shall ba' e no obligati(lll tu notil)· Purchaser {and Purtbner shall not be relieved of its obligation1o reimburse Seller) prior to undertaking res1oralion oh Property if Seller det1m11ines. in its reasonable judgment. that immediate rem~ is or may be required to prevent injuty to Persons or the Property.

624 ·- In addition. Pmehasu shall indemnifY, defend and hold hatmkss Seller and White Lodging from and apinsLilfiY and .U e~, Joss or dlrmale (incltldio& wilmlll limilation, I'I!I&SCIIlable attomeys• fees} whicb Seller (as owner of1be Property) or White Lodging (as Mllllllger) may intur as a result of any act or omission of Purchaser or its age!D iD counectioo witb any such inspections. The fotegoing i~J(kmnific:atioo agreement !>!WI. with respect to escl1 J'n)perty, survive the tennl.nafion oftbis Agreement or the Closing bereundet-, as applicable, rou period of one year.

3.1 Iilk rmQ Survey Mattm· Prior to lbc date hr:n:of, Purclwcr and 'White Lodging ditee1ed the Title Company 10 prep!in! and deliver 10 Put1:haser and White Lodging preliminary title eomrniuneats for ALTA extended owner's policies(){ leuehold owner's policies, as applicable, with respect to each Property, together with eompJete and legible copies of all instnnnents. and docnments referred to as exceptions to lille (colleet.iveiy, '"Tit~ Commftlw!DfS"). ln additkm, Purebasa- will llrl'mF for the prepm.tion of as--built surveys with respect to each Property. and has ~the surveyor preparing each sueh wney 10 deliver copies 10 (i) ADD Bo'Wiftan, White Lodging'! O~ral Counsel, (ii) ~Therese Beehamps, at Venable LLP.IIJICI (iii) Ti* C"ompany.

(a} If Purebaser does not notify White Lodging of any title or survey oonditiCIIlll thaJ materially and ldvenely atrect Iitie 10 any PI'"Opmy, including conditions that render any Property unmarketable or"Unmirable for commercial financing, ("Tide Cumildontj pior to tbe expiration ol lhe Inspection Period, Purchaser s:ball be deemed to have approwd (i) the Tide Commitments, Mid (ii) title for each Property u $c:t fortb in such Trtle Commitment. 5Ubject to the reprcsenlations, wammlies, terms and t"'Olditions of this Agreement.

(b) lf Purcooscr determines rbat wy Pmperty has Tille Cooditions, Purdm'll:f" sh:tJI. prior li';l the cxpinuion of !h.: lnspcc-1ioo Period. pru\·itk writto!ll noticl! (-Title Ctllld:itioas Notice.., to While lcxlging indica ling the nature or 1be Tille Conditions. and the Propti1Y vr Properties so urTcctcd by the Titk Conditions. Sellers $ball in good faith reasonably cooperate wilb P~~t~:baser to cause the removal of eny Title Comliti®s; p!S!Yided. ~if, for aJJY rnson, a Seller who~ Propc::ny is identified in a Title Condiriom Notic:c: as having Title Coodilioos is unable or UltWI1liag lo take such actioas as may be required to cause such Tide Conditions to be muoved from lhe Tnle Commibm:nts or lo p11f the costs 10 have !he Tille C0111pany imure over such Title COnditions. :!IIJCh SeHer shall give Purc!wer and White Lodgina notice 1hen:on it being IIJldmtood and agreed thai. the fail we of such Seller to give $UCh notice within fifteen (IS) days alter Pul'l:ba$er's ddiveey of its 1itlc: Conditions Notice shall be deemed an election by such Seller not to remedy mch Title Cooditiont.

(c) lf a s~uer ag.rees 10 cure me Title Conditions ()f llgrel!S to pay t~ premiums nl!t:es!llllry to c:uuse the Tille Compnny to insun: on:r lhe Title Condieions in 11 m~tnner I"CaSSiillb.!y Slltistilctory to Purchas.e:r, Seller shall eff~le such cure oo or before Dosing or pay such premiums 111 Closing .so that Tille Company shall be uneonditionally prepan:d to issue an ALTA Polity ofTitle lnsumtee in the ill'OOUI'It of lbe Alfocuble Price insuring Pun::haser·s title 10 the Property without ex;cept{on fouucb Title

-14-

RU Austin Courtyard 018326

625 , ,~ .. Conditlont and free and clear of tht Liens to be Released and othe:rw1st: in eonformli.Y witb the Title Commitment for the Property ("T'1de hliey") and Purebaser shall close 011 tbe Property without adj'ustlmlll (for Title Conditions) to the AJiotable Price for such Property. It a Seller eletts to take no attioo with respect to such Title Conditions, PwclJaser shall tJave the option to (i} lelminate this A~ent with~ 1o the affected Property, m which~~~~ the Pun:bue Prite shall be reduced by the fiiOOllnL of the AlJOC!IbJe Price for such Property and !his A~ shall be ofno fbrtbe.r force and effect with respect to such Property. or (ii) ~ the uansactions ccmtmplated 11ereby. aotwithmoding such Tnle Cooditioo, withom any abatement or reduction in the Purchase Price or lhe A.IJocabte Price. Purcltaser shalllllllke such election by written notice to White Lodging givefl oo or before 1he expimtioo of the Jmpec:lion Period. A failure by Pure'luuer tQ give notice of its election in accordance with clause (i) of this section shatl ~ del:mcd an election by Purchaser lo proceed to C!osing in I!ICCOnlance whh cta.Jse (ii) of Ibis Section. {d} The fuJegoing provisions ofrhis Section 3.2 nolwlthsl.anding, Sellers shall cause all mortga@es. deeds ortrus~. and other monmry liens encumbering any of !he! Properties lo be releosed or bonded over (to the reasonable: satisfaction of Purchaser) at or prior to Clorin& (''Uti!$ to be Released"'). Sellers· obligation to cause the n:lwc of an Liens to be Released shall swvive Clcsing.

(e) Except u approved in writina by Purchaser. in no event shall lillY Seller creale uy monetary encumbrance witb resped ro its Property (except for encumbmnces lhat. together with an)' cxillting enc-umbrances do not aggregate to more lhan eigtlty petcenl {80%) oftb~ Allocable Price for the Property and will be released or b\lm!rd over (W illc reasonmbk s:~lisfac:tion ofPurc:b~~SCr} bef«e Oosin~}. nor sho.ll "1'1) Seller burden its Property \vith any obligad,m. undertaking or reslrictive c:ovenanl that will sun:irt C'losifll:.

3.3 SlrliCtural @l1!f En\'imnmental Reports.

(a) lfPurchaJCr or .Purebase:r·s Consuhmlt has derennined 1bid a Property bas one or more Physical Conditions, Purchaser shaiJ provide written notice to Whi&e lodgins (each S\ICh notification being a "Pitysieal C.nditlou No-tJcej and, tOBether witb the Physical CORditiom Notice. delh-er to White Lodging 111 copy of the Inspection Report describing the nature of such Physical Conditions prior to the expiration of !be lospe<:tion (leriud. The Phys.ical l'onditi,,n, !'>:Oiicc shall lkn'fibe (i) the Physical Condition (t~>getlwr "itb l~ appropriute rclctmcc 10 the ln!.-pection R.epon). (ii) lbe Ptoptrty affected by the Physical Conditions. and {iii) the estimated cost required 10 correct each sueb Physical Condllion (as rt:ISOOably drtermined by Ptm:haser's Ccmsuhmt). If Pun:buer filils to provide a l'ttysieal Cflllditions Non~. toaelher wi1h the appmpria~ Inspc:ction Report. witb respect to any Property to Whlte. Lodging durina the l~cm Period, Purchaser sball be deemed to have approved such Prupe.rty in its "as is, where is" condition as of the later of: (y) 100 dale hereof. or (z) the date dle inspection of the Property has been completed, in each case subject to (I} lien-free completion oflhf: Improvements, (2) ordinary wear and tear. and (3) the representalions. warranties, 1£nns

-15-

-- RLJ Austin Courtyard 018327

626 and c:Oildltionl oflbis Asreement.aubject, bo'vllever.to the obligation of Seller to Complete the lmprovements liS provided herein. (b} · Upon receipt ofa Physiall Cooditi011li Notice, together with &: ~te ~Oil Report 5otn Putclwcr,a Seller smdl have the option. to be exe~ised by written notice 10 Purchaser ('"P'hy.sinl Coaditlcms R~ given mdtin ten (IO)dayt foDowing receipt by White l.cd4ing of the Ph)'!ical Conditions Notice. together with the Inspection Report: eithcr{j)to agree to cure the Physical Conditions prior to Closing ("PIIysial Ccmditiou C11re'"), and/or (ii) 10 give Purehsser a credit. ("Piayskal Cottdmeu Cnditj apin$t the Allocable Priec 111 Closing in the amoUII( r.:quired lo cttre the Physical Conditions; ~ bqweyer. tlw. Sellers i'lereuuder lliJd 1hc' Exlstinlt Hotel Agreement Sellers col1eetivdy. shall not be required to contribute more tblm Fiftren MH!ion Dollan (SIS,OOO,OOO.OO} i111M aaregate towards Pbysital Comfitic:ms Cutes Eldlor Physial Conditions Credits in connection with Physical ConditiOIIS afkting 1be Properties and/or the E.'llsting Hotel Pmpenies: ("M11:dlrHrm Pb)'Sic1d CaBdiCions Oblipdoo"). but sba!l be required 10 meet the Maximum Physical Ccmditions Obligations if the Physical Cmfltions Nctiees and attomp&nyiug Inspection Reports indieftte thtt at leut Fifteen Million Dollars (Sl 5,000,000.00) or Pbyskal Condi,ions exiSI on the Properties and/or lhe Existing Hotel Properties. Once Sellen and !he F.xistlng I~~ Asm-ment Sellen have made Physical Conditions Cures or agreed 10 pM'ide Ph)"Jlal Conditions Credits of Fi~ Million Oollm (Sl5,000.000.00) towmf the cure or Physical t'tl!lditiom on lhe P'rclpl:nics andi

(e) If. pur.~unnt toelaust ti) of Section :U(b), a Seller eltcl$10 malte a Physical Conditions Cure, c:ompletkln of wc:h wrc b)' !be Clo5i.ng Dale &ball be a eonditil:m to Pun!blls"er's obligation to close en such Properly;~~. mat Closing on the other Propertin shall not be delayed or otbm>.ise impscted. ff a SeJiet thaf has eteetc:d to mde 11 Physical Conditioos Cure mils to complete !lie cure by the Closing Date, Ptlrth&SCt' shall haw dte op1ion either to {i) defer !he Closing on such Property until sucb Physi<:al. Conditions Cure is completed; or (ii} close on such Propeny, but Purch3ser shan dtber (x) :K"qttiR' lb.: l'rl!peny :rubjet::llu the Physical C'Oftdilions and receive a credit eq1111110 the IIIIJIOiml required to complete tbe Physical Condirioos Cure, or (y) require the Selltt lo e.ttr into 11 Physical Conditioml C~~te escrow substantially simiJar 10 tbe fomt of the agreement auu:hed hereto u St;htdqfe G \1'11ysLc:.l C011ditieu Ew-mv"} in the amouot of JOS% o£the Physical Conditions On toSt and have Seller complelt such Physical Conditions Cure followjQg Closing. To the elUent dtat Purchuer elects to bsve 11 Seller establish a Pby$kal Conditions Escrow, !lOll the Physical Conditions Cure l$ :sulmqucruly completed b}· sud1 Seller for less than lhe eserowed amount. any funds te!Dllmmg in the~ upon completion of the Physical C:onditioM Cure shall promptly be rttumed ro Seller. lf, punmnnt to clause liil of Section 3.3(b). a SeJier elects to give Purchaser a Physical Conditions Credit. Purehii!Str shall acquire t~ Propeny Stlbj«t It) the Physic:al C<'lnditio~. for lbe amtltlm lhai is equal to !he Allocable PriceD the :rmoullt orlbe Physical (."ondiliO!)S Cttdit.

-16- -- RLJ Austin Courtyard OJ83l8

627 (d) The provisions of Section .3.3(e) ootwitbstanding. if. after Sellen have giveo a Physical Conditioas Response in which Sellm~agree to either (i) make the Physical Ccmditions Cure, and/or (ii) 10 give Purchaser a Physical Conditions Credil in an amount equal to cbe cost 10 cute the Physical Conditions, addltiomll Physical Conditions remain um:und with respeet to any Property, Purl:haser shall have the option (x) to tenninllte rrus Agreement with respect to such affected Property or Propertia. in which event d11: Purchase Price shall be reduced by the lll'llOilnt of the Allocable Price for such Property or Properties and this Agreemem shaH be of no further rorc:e and effi:ct with respect co sud.! .Property or Propettic:s, or (y} to COIIS\I1nmlll1e the trans&ctiom con.cempl•ted hereby with respect to sucll affected Property or Properties, notwithstanding such Physical CODditions, without any abatement otredudion in the l'un:hlse Pri<:e or the Allocable Priee. Purchaser sbaiJ make such el«tion by 'Written notice to White Lodging before the expimtion oftbe Inspection Period. A faihne by Purchaser to give ooti~:e ofit.s clection in accordance with clause (x} of this Seetion shall be detomed an election by Pun:heser to p!"t~Ct'l.'d 10 Closing in accordance with clause (y) of this Section.

3.4 Takine pnd Casul!ll)'.

(a) If. prio.r to lhe Closing, a Property is the subject of a condemnation, White Lodgiq sbafl promptly ftOI:ift Purcbaser oftbe same. If such condemnation. as reasonably ~nnlned by ~baser. does not rnateria.lly and adversely affect: (i) access to tbe Property or tbe Imprnventellt$ ~n. (ii} complifiJtCe with applicable zoning or building requirements. including parking. (iii) the projected ne~ cash tlow from the Propeny. and {iv} the ope1111ion oftbe lmpn:nlentenl!l as 11 Hotel or restamnt. as applicable C"lmnu1teriol Taking"). this A!!r«n~enl will remain in full r.,n:e snd dTett with ~t to the .sale of such Property; ~ ~. dm Seller shall be ~:~tthkd 11.'1 receive and main any condemnation award on account of such tuing,. but lhe Alloc:abk Price far sua:h Propeny shill! be red!ll:ed by the amount of SUth condemnation award. If such condemnation is not an Immaterial Taking \Msk:rial TakiDgj, Pu.rcha$er shall have the right. upon delivery ofwrinennotice to White Lodging within lm (1 0) days of receipt of White Lodaing's notice advis.ing of such condemnation. to terminate chis A.greemeat with respec!t to she affected Pmpeny, in which event the Purchase Price shall be reduced by !he amount of the Allocable Price for such Propmy and this Agreement shalt be of no filrther feme 1md efl'et:t wi!b mpect to such Property.

(b) tf. prior tD the Closi~ n Pro~y. is dllm~~d or destroyed by lire or other cas\llllty. such that it cannot, in Lilt :re-.tSI)QIIble opinioo of Purchaser. be subslanlial!y restored within nine (9) momhs after the cas~.~:~ lay (-Properly CasqaJiy"), P~ shall have the right to tennirullle this Agreem~m with ~t to the affected Property, by delivering atenninatioo notice to Seller within thirty (30) days of !he Property Carualty• .in which event !he Purch115e Price shan be red Deed by the all:IOW:It of the Allocable Price for such Property and this Agreement shall be of no further force and effect with respect to such Property. If Purchaser does not terminare this Agreement pl!fSU&nl ta the preceding sentence, Seller shall undertake and pursue the restmatioo of such Property in a commercially msonabl~ fashion. and ("losing on s.ucb Property shall

-- -!7-

RU Austin Courtyard 018329

628 be extended for such period of time as may be reasonably neeessary or appropriate to permit Seller to complete sueh re!ttmltion. The risk oflou to my Property £hall remain with Seller until Closing on sueb Propctty.

SECTION4

CLOSING CQffruDOt§ The obliption ofPIJI'Chaser to acquire a Property and Seller to corwey 1he Propeny is subject fo the salisfaerion. or waiver. ofihe fOllowing c:ondjtions ("Clusisg C~uulinouj on and as of~ Closing Date: 4.1 OosinB Doctmu:ms. All dooumo:nts lo be filed or n:corded in the land reccm:ls or official recon:ls wU be delivered to tbe Title Company to be held in escrow during lfle Closing procedures. AJI ofother doeu~Y~ents deser.ibed below in thi!l Section 4J sbmll be delivered co the Arent FQX dming room to be held in escrow during the Ciosihf! pmcedures. Seller and Purebam (10 the extent Plnclwer's signature on such decumem is required) shall have delivered (or ~used lobe delivered) tbe following duly executed docW'Jlenls with Rspect to each PR:Jpert)';

(a) Deed (or. with respect lO tU'IY Property in whieh a Seller possesses a leasehold interest. an Assignment and A.!I$UmpUOfl of Lease);

(b) Bill of Sale:

(c} Assignmentll.l'ld Assumption of ConlnBCk;

(d) Assignment of Lieeoses. Permits and lnlllngibles; (e) Mmagemem Agreement duly extcUtcd by White: Lodging. as manager. and Pun:baser;

[1) Copies of n:soltnions tmd emi.licates ofincumbcney with respect to Seller. Puttlr.lser and such other Persons as Purchaser, Seller 01'" Title Cornpeny m~.~y reusunably require:

(g) C..'l'ti.licalt.."S of Seller (fur~~ hcl'h!lit ofPun::haser). Certificate of Pwtbaser {for the benefit of Sellers) and CenifJCale of White Lodging (for the bmdit of Purcfwcr) re:affinning the tMh unci &ceumcy of \heir mpective repn:sem.at.ions and warranties made in this Agreement {subject to mch dmngcs liS Seller bas given notice of 1o Pun:hlser pursuant to Section 6.21 );

{b) Owner's Affidavi£ executed by Seller in a furm reiiSOnably acceptable 10 Title Company;

{i} Physical CondilioJrS £!Crow. if.:~ppticabl~:

(.j) Ground Lease Estoppel. ir applicable:

-- RLJ Austin Courtyard 018330

629 (k) Cltoentl EswppeJ, ifapplieabte;

(1) FIRPTA Affidavit;

(m) Settlement S11tern~nt:

(n) .Post...CJo.~il'l,@ Undertaking. if appticable:

to) Post-Cicaing Escrow, ifaJ'lPk:able; {p) Completion Cenificare; (q) F"mal and complete COMtru<.:t!on doeuments whlcll shall include any chaDg6 ro ibe Plans mel SpecifJCatwm; and

(r) Such other doeumcnls. certi&ates lml'l other i~ as may be: reaSCX'I8hly reqllired to r:onsummate !he ~on I:OI'Itemplatecl hereby.

4.2 AJioc:ab(c ftjee. (a) Purcbcser 5ball hive delivered to Title ContJIIIII)'. to hold in eliCl'OW pending Closing and iheret~ikY to delivet to Seller, tla: Allocable Priee for the Property.

4.3 Marqials. Selk:t shall~ deli\'tfed, or made lr!1mgetnents tc delive:r. to Purchaser (or at Purebasefs oprion, lo M~~t~~~ger) the foflowing malerials with respect to a Property:

(a) Originals (or lf001available:, copies) ofLicenJC.'S and Permits:

Cb) Orig.in=tls (or if notllv11illble, copks} ofCootraa:ts; (c} Origjnols (or if 1'101uvailabk. ~-opies) of an)' Dnd an Wlll'lllntle$ and guamntcea issued with n:spec::t tu thv htrpro\'a'nents; ond

{d) All information in Seller or Manago:r' s Jl'I)SK'SSion. m control and relating to bookings and opemtions at the Property. except to the exfml the !llml.C: is Proprieulry lnfonnation.

4.4 l;!W!ition gCA.pptiC!ble Prooeru. (a) The lmprovemenls shall be fully Compkred and the Optning Date of the Hotel shall h:l.ve occl.ltl'ed not less than thinecn {13) monllts previously, with I he llotel bnving been opc:n ro lbe publ~ ror business durifl!: 11 prepondetan~:"e of me period .;inc..: tho: Opening Date; '·

RU Austin Courtyard 018331

630 (b) Other !han an lmmlltcrial. Taking. no action shall be pendi112 or threatened for tbe condemnation or taki~t¥ by power of eminent domain of all or any mmerial ponion of the Property; and

(c) Other thin ordinary wear and leer, the Improvements oo the Propct1y ..U QOl have suffered any damqe siat:e the Opening Date thal have not been repaired to mbstantiafly the saJDe or better couditioo thl!ln e:xisled prior to sudJ dMJage.

4.5 ~-

(a) The represenlations tnd wammties of Seller set forth in Section 6, the represefltl\tions and wamnties ofManager set forth in Section 6A. and the representations and warrt~nties of Purchaser set fonh in Settion 7 of Ibis Agreemenl mall be true. com!Ct and complete in 1111 milleriaJ respect~ 011 and as ofrhe Closing D«te; (b) No~~ of .Bankruptcy on the part of Seller, Purehaser or M~ shall have ~\lt11!d and remain ouiStanding as of the Closing Date;

(c) Sdleuball be1be sole owner oflhe Property or, with respect Loa Property in which a Seller possesses a leadlold inkrut. Seller sball be the leD&nl under the l.ease,IIBd 10 the extent~ by tbe Lease., Landlord sh111l have (i) approved SeDer's a&~~ignmem and Purclwer's assuMption of the lease. (ii) delivered a tomplell!d GtoUIId lease Estoppd, and (iii) relet!ed Seller and any Pemms guifllnteting the: obliglltions of Seller from liabilities under the Lease arising after Closing; Id) Franc:hisor shall have entered inw u lli!.W Franchise A.greement wilb Purtha.ser. or at the option ofsuc:b fnncbisor. Purcha.">Cf shall lS$Wl'IC th~ obliptions of Srller undc:r 1he existing franchise a~ afrer Closing. and Franchisor shnll have rele:Jm! Seller and 1111y Persons gllllnmltt::inJ!- the obliptioos of Seller from any liabilities under the existing &anehise apement arising IIIler C!ming;

{e} Purchaser sba!l have funded any working capital remve or FF&.E ruerve to the extent required (i) undet' the Mana~ent A~l, (ii) under 1he Franchise Agreement. and (iii) by any Purclulser lender;

!J) The existing propeny management apmenl for elleh Propeny slwJI have been ttnnimned and all rosts and ~.\pfD!IeS in ;;:,lfllll!r:ti~'ll with till: property mauaymo!Jn u~ments shall ha\<: been paW by ScJkr;

u::) Any !.And lord, Franchisor, Mamtt,'l:r or other p!IIIt}' ha\ting a right of litsl refUsal or first offet ill ronneclioo with lhe proposed trm1sfer of any Property sball hnve waived rn writing~ e111en:isc 'br such right of fir£t refusal ur litst offe1. or the time period for the exercise 1he:r«lf shall have lapsed:

(hJ Title Company shan be unconditionally (subject only r.o pa}ment of premiums) and irrevocably prepared to issue a Title Policy with respect to each Prope11y; and

-20-

Rl.J Austin Courtyard 018332

631 (j) Pun:haser sbaU have complied., in aU mJteri.ld respcc:U. with it$ obligatiot'IS under the Existing Hotel Agreemen!. 4.6 failure of CQ!l(ltigns. The fwure of aoy CJO$i~~g Condition with respect 10 any Property shall only affect tile obligation of Sell= to cxmvey and ofPun:baser to acquire that Property, and such failure shall not affi!Ct lhe obligations oftbe plllties hereunder with respect to any other Property. Any ~rary pi"''Yisions oftbis Agreemeot notwithstanding. a party hereto shall only have me right to invoke or waive a CJosing Condit.iort thnt is 'fl:ll" the ~fit of such party.

SECMONS

~ATION OF AGREEMENT

5.1 Aqy <:Oftirlir:Y provisions ofthis Agreement notwithstanding. to the extent tlutt men: lhan eight (8) Properties are not able to be conveyed (it being understood that such unal shall include any Existing llotel Propenies lhat are nol able to be eonveyed} because: {i) Sellers or F_>cisting I Iotel Agrecmm~ ~11ers. as applicable.~ unwilliDg or l!Oable lO rat'IO\-e any Title Conditions (but Tbird-l,any Purclwe Rights shalloot be demed Title Conditions for the purposes of tim Stetion), 11pd/or {ii) Sellft'S or Existing Hotel A~ment Sellers. u applicable. are wtwilling or unable to remove any PbyskaJ Conditions (after having agreed to make the Physical Conditions Cure andJor to provide the Physical CondiliOIU Cm:lit in an amomt or not less than the Maximum Physical Conditions Obtiaation), am:llor (iii) the Closing Conditions set forth in Seaion 4 thltt an: for the benefit of Sellm or Existing HOld Agreement Sellers. as applicable, are not satisfied, White f...odgJng shall have the Jight, in msole discretion, (0 deliver to Purehaser within ten (10) days afler White lodging has become a\\-'llre of the matters set forth in llt.lbsection li). (ii) andlor (iii) abo\

-21~

-- RU Austin Courtyard 018333

632 -·------ ··-···--···- ........ ------------·------------'-------------------------------.

of-.pocl:et expen!e!~ incuned by Puiehaser in comecrioo witb the ~ described in Ibis Agreement ContempotllinCOUSIY with Slldl payment, Pmcllaser shall deliver to Whlle Lodgins copies of 11111 third-party repom and srudies obtained by Purehlm' and relati~ to the Properties.

SECTION6

REP!ESENIATIONS AND WA.RRAN1J:£S OF SEl.IJR

To mduee Pll!'clwer 10 enter into this Agreement, eiiCh Seller (but solely for itself ll11d its own Property. and 11011 for 111'1)' othet Sellef' 01' any other Property) ~ts end WliJTIIJli$ to Pwchll!el' as follows. wbjed lo the matterS' set forth on the rdevam section of the Disclosure Sclledule:

6.1 - S!atus o[Sefjr:r. SeHer is formed or orglmized (liS •ppli.cabl~}. and validly ex:isting UZKier the laws of its stare of orpnization. and Seller m all nquisjte power and atilbority tmder the lllws of sut:h Sllll.t'! ;md ils mpectiw t'barferdoeumeats to emer into and perform iu obJigeltiom under this Apeemmt tnd 10 conswnmate the transactions c:ootemplaw:d hereby Cor such Seller. Seller is duly qualified to transact busine&s in the state in which saeb Seller's Property is ~d.

6.2 6!.!lbority afSeller. Seller has Iaten all~ action to autbnrlze the execution. delivery and perfomumce of this AgJft'1!'1tnt by it and upon the eucution and delivery or any document lo be delivered by Sell~r hereunder. such document !!haJJ constitute the- valid and binding obli(!ation and agn=ement of Seller. The Penon or Persons I!)Ctet~ting and t.leliYering this A~rtl!mell\ t'lr any Nk-r docuJn.attlo be deliveretl by Seller on or prior to the Closing Dme is dul~ otuthcrized to execute and del rYe!' such documems on bchalfofSclter.

6.3 Existing A!!!!'e!l,menls. There>~ no servil:e contracts.. ma.in.t~ agreements, leasing commissions or brokeragE agrcemems. repair c::ootracts. property manatemcnt contracrs. contracts for the pun:hase or•liver)' of labor, serviets,. materials or goods, supplies or equiptb.etn.le~ licenses or occupertc:y agreemcnts. or sirnilv agreements entered into by or on bdJalf of Sdler with respect to its Property which will be obligations ofPurdm.m after Closing and which are materially diiTcrent from the agreements in place \\ith respect to tboslcl Properties of comparable si2e and room cuunt :1!1 the Prupen) .

6.4 Tax Returns. 1\U privilege, gross m:eipts, excise, sales and use, pmonal property and mncbise taJtes resull.ing-from opemrloos prior to Oosillg have been or will be paid by Seller as lind wt~en due, and all tax n:tums fur 5J.idJ taxes shall be prepv~red and duly and timely filed. 6.5 iSa Vjolatlons of Agreements. Neither t1le uecution, delivery or perfonnliJ'Ice of this Agreement by Set~r. nor complianee with Ute terms and provisions hereof. will resuh in any breach of the l¢rnl5, conditi.ms or provisions of. or conflict with

RU Austin Courtyard 018334

633 or constitute a default under,llDY illdenture, mortgage, deed of trust, note, evidence of jadebtedness or llDJ' other ag.eement or insttumetlt by which Seller is bound.

6.6 wtfption. Scller has received 110 written no1ic:e of. and Seller bu IJO bowiedge of. my pending or threa.tmed investigation, action or proceeding. which (i) quesliooa the validity of this Agreement or 1111)" action rakm or Co be t&!:en pun.m~nt hereto. or (ii) may result in or 111.1bject the PJoperiy to a material liability whieb is nat covered by insurance or will not be paid or satisfied by Closing. 6.7 Coodemnatjon. Seller has received no written notice of, and 1m no knowledge of. any action that imrolves coodemn111ion CJf eminent domain procmiinp against ~ny rnaiCr.ial part of the Property.

6.8 No!. A f

6.9 Cgnstrugioo ~- At Closing. tbete ws11 be no OU1SiandiQ8 contracts made by Seller for fhe coi1Sl.Y1K:tion or repair of any Improvements relating to lit'l)' Property whiehhave not been fully paid (10 the extent payment:! are due) Of for whielt funds have no1 been reserved (and which will be conveyed to Purcbasa-at Closing) to make paymentS II$ and whtn invoices are tfceived.

6.10 lia7.11fdous Sygsta!,!CCS. Seller bas rtte1ved oo writtm notice lhalthe Property is in violation of any Fede.rl!l, Sl.ale or local Jaws governing the stOrage. release or disposal of any htuardoU5 waste. rontaminants, oil. miioadive or olhe,. ba:wdous material on the Property, or any ponion lhereor; and ta Seller's actual btoMedge, excepr as otherwise disclosed in the Oi'idOSUN Sthedule and in the Environmental Reports oblained by Purchaser), tbe Property is free !rom a~~y such hazardom waste. contaminanrs, oil, radionCii\'e and other bl\l.lllfdous m~~terials, excepl for amounts ofany :sueb mnt~rials as are rcamnably n«essary for lbe mlintelli81.1Ce, repair and opemtion of the Hotel onlhe Propen y and which are stored. maintained and used in accorthmce with applicable Jaw. 6. I I JntemiQillll.lv Ominc;d

6.12 lrurntionallv Omin!

6.14 ~Proffers. As oftb"e Closing Date. Seller shall have paid {or lbe provision for the p~~ymenl of whicb has been mode by &el!er) and/or petfonned, as applkable. all protfm. deve!opmenl fees. up fees. connection charges. impacl fees. improvements (ineluding o1T-5he improvement$) and other requirements imposed b)· applk:abfe law in connection wilh the eonstrlJCiion and development of ~ch Property.

-23-

RU Austin Courtyard 018335

634 6.15 No 'Vjp)atjons. Except as otherwise disclosed in the Disclosure Sdmlule. Sellet h~~~; received no written notice or order from aoy governmental authority (i} alleging the existence of any violation t1f any law, rephllion. order or rcquifement af'fectinalhe Psoperty. or {ii) ~iring any repairs, maimenancc or im~ lO the Property which have not been fully performed. Excepl as otherwise disclosed in tbe Disclosure Scbedu.lc:. Seller has reeeived n(l wrinen notice from any governmental autllority or any Penon that the Property is 001 in co:mplianee witb the Americans With Disabilities Act or aay &tate statute analogous lhereso. 6.) 6 SeJ'!Iu!t~ Tax Pam!. The Property constitutes a seperate peW far purposes of ad valorem naJ property taxes, 8Dd is not subject to a Jien for non-payment ofml propeny UIXes relating to any other property.

6.!7 Intentionally Omilfed.

6.18 Ground L;a!i$J. The copy of the Ground Leas~delivmd by Seller to Pmchuer end which is described Oil !be Di~~~elor;~M Scbeduh: iJ a filii, c:omplele and rorrectcopy of the Ground J.ease and all amendmtnts, supplements. modifications and addmda then:11>. Seller has not received any writll!n notice of defeblt unci« tht CinMld Lease that has 110t been e~Md. Se.ller has 1101 assipe-d any interest in tbe Ground lease to any party, other than 10 a secured lender.on a coJiateral basis. To Seller's knowledge. the landlord is nol in defllult uJlder the Oround lease in any material resp«U.

6.19 L..abor and ERISA. There exisl no liens on the Property or any other a5$et to be tzansfemd Co tlx: Purcha$tr under thil; Agreement 8$ a resuh of MY li•bility. under Tille IV of ERISA. (i) Th~rt:•re no ernplo~ of Seller at the Property and (ii) none or Sella'. Manager or nn>· ERISA Aftiliate {a) is subject to a collective bargainill.@ ag~emenl with respect to any of lhe Property Employees. or {b) eit~r curTently or v.-ithin ahe paS! five (5) )'eDJ'S has sponsored. contribuled to or had 1111 obligorion to contribute to any mulliempl.oyer plan as defined in Section 3(31) of ERJSA ora dmned benefit pension pbu (as ~fmed in Seclion 3{35) ofERJSA). No portion or any l'ropert}' constit111e.s a "ppan 8$1el," as defined in Labor Reg. S~ction 2510.3-HH.

6.20 No Commitmco!s. To Seller's knowledge, no material commitments have been made by SeJier or Manap to any GovernnlC'IItat Authority, utility company, sebool board, cbureh or other religious body, or any homcoWilers' association or any other orgarrintion, !IFOUP or individunl relmi~ to its Property wbitb would impose: any oblip!ion upon J>un::baser or Manager to mike ony contribution or dedication of money or land or to constrUct. in~tall or mointnin any impro~·emcnts of u public or privme oaiUre an· on or such Propc:rt.) • ,"

6.1 I Rt:!tat!!ll!tnt o{SdJer R,;!!fmnl!lti9Q1 and WNIJ!P,Ue$. The rqmsentations and watranties made in this A~ by eaclt Seller are made as of the date hereof aud shall be deemed rema1fe by such Seller as of the Closing Dare, with the mne force a11d effect as if made on. and as of, stJCh date; ~ howewr, thllt a Seller shall have !be right, from time to time prior 1.0 the Closing J)atco. to modify the

-24-

RU Austin Courtyard 018336

635 representations and warramies made in Section 6.3 (Existing Agreements), Sectiou6.S (No Violaiio:os of Agreements), Section 6.6 (Litiption). Section 6.1 (Olndemoatioo). Sectioa 6.10 ~Sub~). Section 6.9 {Contracts). Section 6.15 (No Violations), Section 6.18 (Ground Leases), Section 6.19 (ii)(a) (Labor 8Jld ERISA). Section 6.20 (No Commitmetlll) u a teSUft or cbaqe.s in ~blc condiOO:ns or if eonslstent with Seller•s covel'lants herein. by delivery of ootic:e to i'un:baK:r ud, in socb event, die~ and Wllmultiet: sbaU be deemed modified to Jb! extent .required by such changes;~. boweyer. that any m:b change. ir material and adverse, shall giVe Purebuer the riabt to &erminate this AJ11:ement with yespecl to the: Property in question, 'Wi.thout giving Sellers a right to lenninate this Agrecrnem with respect to any or all Properlies.

6.22 SurvJnl ofSetkiRem;mn!atjons. All repre$entations and wammries :made in this Agreement by ~Jier shall survive the applicable Closinl Date for a period of one (t} year. Any action, .suit or proeeedins wjth n!llpect to the truth,acturacy ot t'lOIIIpldenen ofany such representation or warranty shall be commencc:d, if a1a!l, on or before tbe dare which Is one (1) yeat aftet the applicable Closing Date Md. if OOl cOmmenced on or- before such date. thereafter shall be void and of no ron:e or effect.

6.23 Lj!Wjlirv fur Bm!!;b ofSeJ!q Repruculltjgm. Ptu:ebaser sbo.ll giYe written notice to a Seller thai such Seller !Jas bmlthc:d any represenlation or W~mU~l)' made in this Section 6. If. as a consequenee ofsuelt breach. Puretwer shall hr.-e suffered a loss or incurred damages. then ~h Seller shall be liable tQ Porcbaser ror JliiYmenl of damages. lbe precedinr. senteQee notwithstanding, in no «:vent shall the liability or Rll}' Seller with respe<-t ((I bre~~C!IB oh.ny representations or ~mmlies made in this Section 6 exceed, in the aggregale, the sum of five percen1 (5%) offhe Allocable Prire for sue h Properl!f.

6.24 Disclaimer of E.-spre$s or lnmlied Representations. Except a Olhelwise express!! provided in !his AgreemmL each Seller disclllims the mllldlli. of any represenUrtions or wamm1its. express or implied. reprdins thc Property or mlllters aiTectillg lhe Prqlen y. wh~th« made b~· Scller or Wllire lodging on ~tier's behalf.

6-25 Seller's Koowlg!gs;. As used ifl this Asreement. the phrBsc ·1o Sclter•s bowledge."' Of' words of similar import shall m«:ln the ICtUaJ (and not constructive or imputed) knowh:dgc of (i} Dl:oo Yiankes. wid! respecl to all of thr Properties; and {ii) Mike Wernet, with res~ to all of the PropertieS. and (iii} the manager, mamging member or Bf:neral partner. as applicable. or eac:h SeUer with respect to the Property OWl'led by such Seller. none of whom shall have any duty ofim'CStigatioo or inquiry other lban 1o review and comment in 800!i! faith on the representations and wammties contained herein. -

S£CTION6A

BEPRF..SF.NTATJOI'\S AND WAgR.<\~'TIF-~ Of WHITE LODGL'I(i

-- RLJ Austin Couriya.rd 018337

636 To induce PwciJaser to enter into thll Agreement, While Lodging ~t:s &lid warrauts to Purchaser as fo.llomr:

6A.I StmtiS of Wbi!e I.ndgjng White Lodging is duly in~ llftd validly exisliog unc!crthe laws ofit.~~: state ofim:orporation, a has llll requisite power and authority under the faws of such state and i&s reJpeetive cbaner documents 10 elller ie1to and perfonn its obligatioos undeT tbis. Agreeure,n and to consummate the~ contempla~d bcreby. White Lodging is duly qualified to tran.sac:t business in diose slates where, based upon the nature of White Lodging·~ business, it Is required to be so qll&lifted.

6A.2 Amboritv of White Lodgina. White Lodging bas laken all neeeuary action w uutborize the execution. deli my and perfOilnllDCe of lhiJ Agreement by it, and upon the: exewriat:l and delil'el')' of aoy doc:umene to be delivered by White LocJcing hereunder• .!l'lldll ~~ sbaJI c:onstiltlle the valid end binding obtiptiooand !lllteement- of wrote Lodging. The Person or Persons executing and dC'Iiverihg thit Agreement or any other document to be delivered by White Lodging on or prior 10 the Closing. Oat~ is dUly authorized to execute IIJid deliver s&K:b doct1men~ on bebalrof White Lod!linJJ.

6A.3 No \fi!.Jiations 0 fAgreeQ¥ms. Neither lhe el(ecution, delivery nor perfortnanee of this A~ by While Lodeing. nor compliance with the 1enns and provisions hereof. will result in any breach of the tem11, o::.ndition& or provisiooa of, or conflict with or constitute a default under ooy agreement or instroment by which While Lodging is bound.

6A.4 l.iri~Jl!Iim- White Lodging bu ..:ceived no written notice of.I!Jld to White Lodging's koowledge ~ is no pending or threatened inve&tigation, action or procet'ding. "'hich que,;tions tiM: \·alidity of this A~ment or any :n.1ion ~liken or to be taken by White Lodging pursuant hereto.

61\.5 Oisdajmey of E.wrm or Implied Benrmntfllions. Except as otbetwise expr'C$llly provitled in 1his Al!~ent. White Lodgin& disdairns the makjng of m'IY representariolls or wat11mties. e.Jtpress or implied.

6A.6 Survjwl ofWbite todcing's Repn;st!!l.!tiQ!!S. AU n:presenutions and warTanties made in lhis A~ent by White Lodging shall survive the Cloti113 Pale with respetl to each Property for a period of one (1) year. Any !!Won. sui! or proc:t"eding with respettto the umh. aCCUtliCy or complereness of any such representation or warranty shall be oomml.'nce

6A.1 Liability for Breach ofWbiJt lod&inz'3 ~- Purdwer shall give writlcn notice to While lodging that White lodging b.es bteacl'red any representation or WJIItallt)' mide in this Sec;tion 6A.. 1f. as a consequence of such breach, Pl.llthaseubll.ll ha\·e suffered a Joss or incurred dam111ges, then White Lodging shall be lin"'e to Purdmer for pymem of damages. The preceding sentence notwithsunding. in no evem shall the

-26- -- R.LJ Austin Courtyard 018338

637 liabiljty ofWlUte Lodaing with mpeetto breaches ofoy repruenta1ioos i:lr warranties made in this Seetiou 6A exte:ed, in me anreaate. lilt 111.111'1 of Two Hundred F"rfty Thousand Dollm ($2SO,OOO.OO), ~. howeyer. that &Ueb limication shall OOf ~pply to White Lodpng's liability putsllant to lf:ll! prol'iSiOflS of Section 11.1 {e).

6A..8 Wbii.C Lodgig':s K!'J2'!1YiedJU<- As ustd in !bls A~ the phrase "to White !Adpag•• blmletJ&e," oc words of similar impor! shall mean the actual (and not coi'IStiUCtive or imPuled> mowledge of Bruce White. u Ch&irmaD ofWhite Lodging. .DMo Y"lllnk.es, u Piesident aDd COO Developmott aad A.-I: Mana,.ement Dirision of White I..oclginr. and Larry Bumelt,as Chief Operating Officer of Wbire Lodging. none of wbom !ball Jmre any duty of invsigati011 or> inquiry other dum to review and comment in good flaith on the ~entatioos and W~~m~Dties contained herrin.

SI!:CflO!o£7

To indace Sellers to enter into this Agreement. Pu:tcbaset represents and warrants 10 Sellers as fOlloW!:

7.1 Sl.itus!JilliAU!Jqitv ofr'lirdwer. Purchaser is duly mpniud lJ1ld validly existing under the Inn of the juriscfiction in vdli<:h it was formed. and has aU requisill: power antlalllhority under the laws of such Slate and und~r its charter documcms to enlef into and perfurm its o&ligacions under Ihis Agreement and lo conswnmm die tra~iOM c:ontempla~d here~·. Tu the e.'(tcnl required by 11ppJicabJc :.tate law, P~ is. or wiJI be by lhe Closing De~e. duly qualified and in good stw:rding in eodt of the Slates in which Ihe Properties are loe•ted.

7.2 Action ofPun;hPgr. Pwthaser bas taken all necemuy action to authorize the e:m:ution. delivery and performance of this Agreeme111, and UJXlD me esccwtion and delivery of any document to be delivered b)• Purcbast:r on or prior to the Closing Date, such document shall constittlte the valid and binding obligatibn and aJreeH~ent of hrehaser. The Persoo or Persona exr:cuting and delivering this Agreement or any other document to be deHvm:d by Purchaser on or pior to lht Clo!inll Date is duty authorized ao e-xecute and del~r such documents on behilfof Purchaser. 7.3 No VjoJatioos of AgreemcniS. The exeeurion. &>livery and performance orthis A~ by Pun:haser. and the complhutee wim the terms and provisions hereof. will001 result In any br=ch of the terms, conditions or provisions of, or conmcr. with or comtil.ute a default under an) agreement or inltf111Mflt by which Purchaser is bound.

7.4- LitiptioJl. Purcfmer has received no W!iuen notice of and. to Purchaser's koowledge, no imrestiption. action or proceeding is pending or 1hrca1ened. wbicb questions !he validity or this A~ent or tm:; a<:tioo taken or t¢ be taken pursuant hefelo.

-- ·'11- ExeaJ~ion Vmioa

RU Austia Courtyard 018339

638 7.5 HQRdiarq. SUBJECTONLYTOTHBEXPRESSCOVENANTS. REPRESENTATIONS AND WARRANTIES SET FOR1H HEREIN MADE BY EACH SELLER AND WHITE LODOING FOR THE BENEFIT Of PURCHASER: IN ENl'EitiNG INTO TIUS AGREEMENT. PURCHASER HAS NOT RELIED ON ANY REPRESENTAnON, WARR.ANTY. PROMlSB OR. STATEMENT. EXPRESS OR JMPUED. OF SRLLERS OR ANYONE (I.NCLUDJNO WHITE LOOOINO) AC11NO FOR OR ON BEHALF OF SELLERS; AND THAT, AS AMATERIAL JNOUCEMEN'rro 11iE .EXECUTION AND DELIVERY Of TillS AGREEMENT BY SELU!RS. PURCHASERACKNOWLEDGES 1lfATnrE PROPERTIES WILL BE ACQUIRED BY PURCHASER. IN THEIR "AS TS'" CONDmON. WITH AlL FAULTS.

7.6 Puni~Jaser•s fndepmdem lnye,Hig!ltioN. PuBumt to !he terms of this Agreement. Sellers have agreed to give Purcflaser llie opportunity to investigate all J)hysiealiiSIX!Ctf c>f the Properties., and to make all $1lcf\ independent inspection! mdlor investiptioos rL eacb Property. as Purtluim deems necessary or desirable. Pwcbaser acknowledges dial it bas entered into this Agreement with the imeftticn of maldng and relying upoo its own ~stigatial or that of t!rird parties with respecl to the physical. envii'OflllKntaf. economic and legal conditjon of each Property.

1.1 Rest~lemeru ofP~ &mse!!Wioos !lid Wl!mmtie.5. The rq:ID:!It'ruatium and \\'llrrriJKk!l made in this AJn:emcm by Pun: bam' are mlidc' liS of the dat.: hereof and shall be deemed remade by Purdmcr liS of the Closing Dllfe wilb the same force and dfcet liS if made on. nnd us of. such date-.

1.8 S!!IVjvaJ QfPurdmser R.cRRSmtiw. Aii n:prt."SenWions aDd 9/lirianties made in this Agreement by Ptm:haser Jball survive the applicable Closing Dale for a period of one ( l) )QI'. An)• actioa. suit Of procecdinu. \vith resped to !he truth, accuracy or completeness ofany sum rep~ion Ot wanmty shall be comrnenctd., if at all. oo or be~ the dnre v;bith is ~ (1} yaw after Ilk! Closing Dare for 1 giml Property and. if nnt $0 commenced on or bd~ such date. 1hm:oficr :dull! be void and of no forte or effect.

7 .tJ J..!abilit):.fur Urc!ltb of Purrgr Rc:rummatiQDS. Wh~ Lodging shoJI give written notice ro Pu~ rhat Pun:bastt has breached any tqnSentation or Wllmi:Qty made in lhis Section 7. 1f, u a ronsequm:e of such breach, 11!1)' Seller shaU have sufftred a loss or incuned damages, then P.urehaser shl\ll be liable 10 such Seller for payment or

7.10 Poo:hap's Know!~!~. r\s ust'd in this Agn:emcm. 1be phrase "to l"un:haser's kuowtcd~·· or words ofsimil&r impoo !tlmll mean the nctual (and Dot comtruetive or imputed) know!edt:e. witl'IIIUI indeprndent i•wesligation ~inquiry. of

-28-

RU Austi.e Courtyard 018340

639 .,-. 'Thomas J. Bah.imore,Jr.. as President of Purcha~er. mi R~ Biedan, as ~ive Vice Ptesldenl of Purcbuer.

7. l 1 Seller Repmenq!ions Peemed Wajyed, To 1be extent that Ptm:haser has kll(lwledge, or is deemed to have lumwledge, prkwto Closing. that any of Sella's representations or warranties are inaceutate, 1111tn1e, or mconttt and Purcllaser proceeds to close hereunder, such misrepresenration or breaclt of warrmty shaD be deemed waived by Pun::JJam. For purposes of this A~ Purcllaser shall be "ileemtd to M\'e: bowl~" that .11 repre~ or wammty is 1ll11l'Ue, il'l&tl:urate. or inc:onect to the extent that U~ywrit:lea studi!s.tests, investigalions, reports. (ll; aoalyses cleriveted to Pun:b.aser « 01herwiJt received by Purcb.tuer COP!Iin information !bat is iDa:msistc:nl with any repmentalion or wammzy made by SeUer.

SECTIONS

COVEIUNTS OF SELLERS. PJJ&QjMER ANI.! WHITE LODGING 8.1 Seller Covel]ll.lq. EBth Seller (but solely for iasdfand its own Property, and not for any other Seller or my othe:r Property) hmb)' covenatJts and agrees as follows: __

(a) <;ompliam:e wj!h LaM· From tbe Effective Date and wtilthe Closing Date. Seller shall use eommm::iaUy reasonable efforts to comply in allrnterial •' respects with (i} all laws, n:gulntioosl!lld other nrquir.:tm:ne afl'ccting Seller's Property or too liSt or oc:<:upam:y or BIIY rmprovements !ocated ~hereon;· and (ii) all terms, rovcnants 1100 c:ondi6DIIS or instrUments of recurd affecting such Propt:ny.

(bJ Maimwmcc ;md Opmtjgo ofHQl.el. From rhe Opening Oat~: and Wttill~ Closin8 Date, Seller •nd White Lodging (as ManaJet of the Property) shall use commmially reasonable efiOn:s to maintain and operaLC the Property in a manner consistent, in altmareriaJ n:spccts, with the SI.BIIdards and practices (i} by whic:h White Lodging opem:s the Existins Hocel Properties~ lll'ld (ii) required by the applicable Setler Fram::bise Agreement Such mainkn~~nce IIDd openrtion shaD include, but not be limited to, hiring and firing employees in the ordinl!t')' course. stocking abe Property wid! such in\'~ntOI')' as is consiswnt '\\ith the requimnenls or the fin:t ~mtcncc of this subsectioo. booki!ll roc:mn in the mdin~~ry toW'Sf! and not null.tit'ring onr c-onuacltlllf obligations or rights of Seller other than In !h.: ~m.lilllU") C\ltll'lle.

(c;) fmoloys;es ...~tier shall pay all Wll!ICS and ~!aries and nil vac.tion pay. p.!miOI'J and. wclfilre benefits and other frin1e benefits accmed with respect to aU Jndividullls employed at the Property re!Ming to the pcricd prior to the Closi!le; Date. At no time shall81'Jy of the employees at the Propctt}, including employl!es of 1111)' numager thereof. be or be deemed to be the employees of P~m;haser. If required, Seller will comply wilh the nolice and other requimneo!5 under the WARN Act, COBRA or any simillll' state or local legislation with tapect tuuch employee rnauers.

-:'.!9· -- RU Austin Courtyard 018341

640 (d) Medwrig' Liw. Seiter sblill disciwJe and relea: of record all · ~· Ot' materialsnen's liens. if any, arisiot liom uy labor oc materials fumimed to its Property prior to Closing to the extent uy sud! lieu iJ not ins\IJ'cd 0\ler by the Title Company or bonded over p~t to apPiicaNe Jaw. I~ after Closing. 11 ~· or mlderialmen't liM is filed in eoooection with any labor or lllllterials furnished to lluc:h Property prior to Closjog. SeUer shall disc:barF and have released of1'eCOI'd or bonded suell lien within thirty (30) days ftom 1be dille Seller receives: ooliee that the lien was · filed.

(e) Pis;lwge oflo!g. Sdler agretl! to aUie to bed~ aU IOllllt affecting l~ Propeny.

(f) GJwmd l&m Estomeb· Seller shall use all COUtmercially rtiiSOIIIIbk rffurrs to obtain a Orolmlf lease Estoppel from Hdt Landlord. To the extmt that Seller is unable to ~n such Ground leak Estoppel From the l..andlord. such Seller ~I exeeule ami deliver such Ground Leue Estoppel.

(I) Other~ SeDer .s~haU use all commercitllly reasonable efforts to obrain ~r certificates in form and substance reaorutbly misfiiCIOfY to PUI'Cha$er from each lerutnt oecupying at l,cMt ont dlo\$alld (1000) .quare feet of space 111 a ~ ( e:tdusiv~ of liO)" Hotel ~~-who ure dedned to be tmants Ul'lCkT tbt laws of any jtll'isdictioo ill wbicb any oftbt! r~rtics is located) and from any association or olh« ~ that I'IUly levy a.ssessments or other charges against the .Property ("Gm.mal Estoppels"}. To the e:tlent that Seller is tlllllble tO ob'lain 11ft)' General EdOppel from ally such tenant. suc:h Seller sball execme and delh.er such General Estoppel. Furd!er, Seller sball u9f c:oounen:Wly rewmable dfons 10 provide a Subordinatioll and Non· Disturbe~~te Agreement ~Uy in the lOrm attacbed as Sdled•le R bereto (subject to SQI:h ~e variations as may be reque$led by Purchaser's lenders and blants) from my ten111t oecupying arleast one thousaad ( 1000) square feet of space at a Property (exclusive of any Hotel gnests who are~ to be tenams Ullder dll! laws ofrlll.y jurisdictioo in which any Properiy is located).

(h) Comnktion of PJP:a. Seller rovepams 10 petfonn all PIP work u part of its Completion of the lmptO~ in a fim-cl;ns liW!fler, and mconfonnity Ylith the requirel'llellts oft~ applicable: fnnchimr and thr! applicable Fnmc:hise Agrecmem. All casts and expcmes rela~ to the riP Jhall be Scner's 50k"mponsibility.

(i} RiJ1bts Qfflm Offer. Ceruin Propenies are subject 10 rights of tim offer or similar pun:hue rights in favor of a franc:hisor or landlord (the "Third- Party Purdulli! Rights"). Seller sHall use an eom.ntCJ'CiaJ1y I'C:aSOMble and diliJJeDt efforu to~ lbe bolderofltny such Thitd-Pllrty P11rchasc Rights to waive 111111 relinqui~ $\ICh "Third-Party Pun:hase Rights lind Seller sba11 keep ~r illformed of its ~ in oouiniDB such Wlli\."l-'fS and n:linquillbments and shall ddi'lle!' 10 Pun:hasef ..-up~ ofall rck:vant notit:cs and A.'SpOfl!ia promptly upon rcccipt ioduding. without limitation, Roy no1ices or oommuniL'lltiuns Wllivin! iln) Third-Pany Purebase Rights. !f any third-part)' has e.-cett:ised a Third-Pur!) Purchase Rigln wilh res~ to Illy .Property,

-- ~30-

RI..J Austis Courtyard 018342

641 .BegDoc#: RU Austin Courtyard 018343

EndDoc#: RlJ Austin Courtyard 018376

Filename: Courtyard Austin Airport 8.12.08 (PSA . part2).pdf

...,.

642 at Purclwer's optkm, either (i) sucb Propetty shalJ be immedilllldy wilhchwft from this ~ and liHI Pun:hue Prit:e shall b8 reduced by the AU0<:111ble Price for suclt Property. or (h) such Property sbaU be inwedmety withdnwn from this Agreemeru., provided, however, that in the event the tiJii:d..prty fails 1o close on its exercise of t&e Thinf..Pany Pm:hue R.iaht with. mpect to such Property,~ shall ba\11! 11 right to purtbasl: such Property in acootdanc:e with lhe 1etma and scbedu!e for Closing !let forth in lhis Agreement.

{j) New COillmCts and A~- From the Effective Date and llnlil the Closing Date, withoui Pun:ba.ser's prior conscnt, Seller sbiiU not enter into ay new eontncf;!; or ajpeCitleuts relating to maintenance, repair or opmtion of its Property which will become an oblig~~tlon of Ptndmser after Oosing and (x) are mlllterially di:Rerena &om the contrac!S and ~~gnements in place with respeet to lholll! Existing Hotel Properties of oomplttllhle she and room count as the Property or {y) are 'frill! any afJiliatfes of SeDer or Manager. To the extent that hrcbaseT's consent is~ by Seller to enable Seller to enter inlo a cont111Ct or agreement. Pun:baser agrees that it will not \111J'ea!;onabfy withhold, dfiay ur eonditiou its consent.

{k) lnSU!'&DCe. Seller £hall proeu~ and rumwn ~ c:OYmlge of lbe types and in the III'IIOUIUS required by its lenders, the management &~land the frandiiJe a~nt and as is UStlal and cusComary for similar projects being developed and C:OI151ructed by Seller or any Affiliate of Sdler and shall add Purclwer II$ Ill additional iDstued on the iDmrance policies providillg liability coverJge.

{J) COJJgrtgl.ipn and FL!!t!iainK oflhe Hotel. Seller shall (i) develop i1lld construct the Improvements on ~Property (at} in a good, workmanli.lce, diligent 1400 efficient manner, (bb) in aceonbnce with the de•;dopment pructiccs customarily cmplo)·cd by \\'bite todgiJll for cQtnparable projem. (Cc) in the mannerrequiJCd by. and in compliunce in 11)1 material respects with. the Pbm: and Specifreatioft!l:. {dd) on 11 timely basis. and (tt) in c.:ompliancc: "ith all applicable Ins. rul6 and regulations; ana {ii) c.use the Hmel1o bt! futlr equipped Y.itb fumitllfl!'. Ji.xtures. ~ipmcat and supplies ~ ror tk opm~lion of the Hotel iA a manntr t."OOSistmt. in aJJ material respec:ts, wilt! the requirements set fonh in the Seller Fnmc:hisc Aareement.

(m) Post-Clpsjng Coopmtjoo. Sellt!t lllld While Lodging shllll, lliUf lihfall cause any of their respective Affiliaresto, cooperate v.;tb Purclwer in the enforcement ohny rights under any arthiteenmd, construction or other similar contn~~ets respeding the design. development ond construction ofthe Hote-l including. b111 not limited to. !be: enfon:emenr. if applicable, of IUIY post~tioo obligations and warranties.

fn) Sale gf Intm:sts in Bloomington Hilton Gmkn. The maaaging members ofBioomhoteJ, LLC. the leaschokl owner of the tul property 0(1 which the Bloomingron Hilton Garden in Bloomington. Indiana (pttlptny number 9S} will be constructed, shall either (i) acquire the ownership interests ofrhe invesmt member in

-- -31~ E.~c:..:uliofl Vmion

RU Austin Courtyard 018343

643 ··-·· ·-----···- ··-----------------------------------------

... .~

Bloombotel, llC; or (ii} obtain !he con!reJlt of ihl: investor mePJber 10 usign rite Leue and convey the lmpTo'vements and other interests of Bloombotel, LLC to Pun: baser.

(a) E~ Agreements. Pt.udlaser agn:es to enter mta new Franchise Agl'eerneDts with the Fnmchlsor of each Hotel, or llllbe option ofFranebisors, to assume the existing fr.m:bise agn:ements, but only from lllld after the Closing.

(b) ~nt Agreements. Purchaser agrees to en1er into Management AgreemenfS with White Lodging for the operation oftbe Hotel on eacb Propeny.

(c) Ground Leases. Ptm:haser agrees 10 assume tbe obliptioos of Seller, as tri'Wlt, under !be- Leases, but only !hose: IICQ"Uiog from and after the Closinj.

(d) Al!$umption ofCertpig COIJtl!m. Pun:huseugrees 10 usume ill!! obligations of Seifers IICCruift,g from end afltr Closing under :md with respect to those Contrad.s disclosed oo the Disclosure Statement being, assigned and assumed.

8.3 Cosngraljon. Sel!et"S and P.w"cbaser shall each UR commercially reasonable efforts lo salis~v the tom:litiOM set fbrth in Sci:tion 4. Sellets agree Ilull securing lhe releases descnlk..U in Sections 4.Stc) :mt! (d) shall be the respoosibt1ity of Sellers;~ ~. if m:eipl of.rephu:ement guarantees is a condition to the .· release or ~llcr guarantees (01" guarantee$ ofP~ afliJiatcd \\;th Sellers). Pufdtaset agrees lo coopetate with Sellen. Fnll'lchi:wrs amd l.llhdlords 10 ~eplaee Seller~ with gtlllllnlee$1:.'ittuted by Pun:bllser and/or its Affilial"-"5· AdditionaUy, Sellm mi Purchaser shall use commercially reaSOMble effons and cooperate with each other ro obtain any coomn:s or approvals 1hat may be necessary or desirable iP order to oonsumma1e the purdlase of the Properties: provided.M"'rnt· lbat. except as o~e provided herein, Sellen .shall pay to secure the appro~ Is or COIIllefltS that Sellers require and Purchaser sball pay to secure the spprovals or consent$ Ihat Purchaser requires.

8.4 liouor Pennits. ·ro the extent that a lic~nsc or permit required for service of llkohlllit.: bcYcmgcs at a Proper!)' (individually. 11 ~Liq110r PmDif' and collectively, ··Liqu«lr Permit!!") is issued to a Selkr. such Seller shall. 10 the ex1en1 permitted by :~pplitabk ll'lws. rules or n-r;ulations.tran.~Jer such liquor Penni1 to Purchaser or Man:~ger at Clos.ing. Ifa Liquor Pennfl c:mnot be rl'llftSJi.'fl'ed 10 Pun::haser or Manager by SeJk=r or otherwise oblained by ~prior lo the s.c~uled ClosiDg, lo !he extent penninai by applicable law. a Sel~ shall coopoet"ate t\.ith Pl.ll.'clwer by attering, or causing its Affiliate hoJding the cumn1liquor po..'mlit f« tire Hotel to enter into, an interim akoholic beverage management agreemem with mpect to the sale of akohofie bcverqes at the Hotel in a fonn substantially similar to the agreeme11t attached heteto 11S Sebnl•le f. Seller shall also assist lind t:oo!)emle with Purchaser ifPtm;bastrelects 10 apPly for nn inrmmltcmpor.ary Jiquor license so thai alcoholic beverages m11y ~-ontinue to be servro aetbe Hotel pending issuance of the pem~antnt Liquor Pcnnlts. To !he exrent

-32- .Exffllllion Ve~lon - RU Austin Courtyard 018344

644 that a Liquor Permit is issued to Managl!f', Mm•sez shall. to 1he ex.tent permiuecl by applicable lava:. rutcs or resulllions,. CODtimle w hold such Liquor Permit t.liec Ck:ldni. . To the eneut thalli ScUer am:l/or MaDqer it not able 10 tnmsfer 1t Liquor l'enmt to P\uthaser at CIO!inr. Seller mlfor Manager~ to cooperate with Purdlaser to facilitale the isswmee- or lranifer of the Liquor Pennia. The foregoing provisioos of this Seccion 8.4 no~ withstanding. (i) aU costs incuned by White Lodeing !md/or SclJeB in eonncction with obtaining or tnwfening Uqwr Permits for the Properties sball be borne- by Purcbaser.11nd (ii) ncidter Seller nor White Lodaift! shall have any oblisanon to lnUlSier an exbli111liqoor permit to Purchuer priw 10 Closinz, itnd (iii) ~shall not obtain, and SeUm llDd White Lodging Bhall ha~ no obltaalion to pursue. •Y Liquor Permit lOT IIJI)' Property prior 10 Closing if abe issuance of sucb Liquor Permit ~let impact lbe rights of Setters ar While Lodging under lillY exbfulg liquor pemit. and (iv) if this Agreement il terminated in itt entirety or wills l'f:SJ)CCt to 31l'J Property. Pl.ttbaer agrees to proe~PiJy withdraw my peOOing applicatiOn :fur a Liquor Permit for such Property.

St:CTIONIJ

APPORJ10NMpq8

9.1 ActiustmerQ and Pm!J[joo&. The following matters and items pmainil)8 10 each Property shall be apportioned bretween Seller and PIIC'Ch&ser or. where applicable, creditt:d in total to a particular pany, as &f 12:01 a.m. on the Closing Date ('"APJX~rtinment Tfmej. l'k4 tredil! in fll\101' ofPun:haser- shall be deducted from tbe .· Al101:11ble Prlr:e at Closins IUld nd cmliU ill f•vor orSdkT shall be paid by Putcbner. in nddition Lo the Allocable Price, in cash at Closing. Unle-ss otherwise indicated btlow, Pun:bnser shall reeeivc • credit a.pinst tlu: AHocable Price fbr IUlY of !ht following items to the enent the same are accrued but unpnid ~ oflhc ApportionMent Time ('ILiletber or IIOl due, owing or delinquent ns oftrn: Apportionrn..'nt T'rme}.11nd Selkr .shall m:ei ..-e a cR:dit (and thereby be entitled'" a )lQ}111CI'If from Ptm:h.,SI:Tl ¥.itb respect to any oflbc following items \\hiclt shall have bffll paid priiJr ttJ the C'losin11 Date lO the cxlelll the paymm thereof relates ro any l'l!'riod of rime after the Apportionment Time:

(a) 91!e!tlM!Rer- Guest ledger receivables (i.e.. a!JlOilnt$ including. without lintitotion, room charses. 811d c.lwp fur fOOd and beverage~;, &«rued to tbe acccunts of guests and other C\tMOmeTS ortbe Property as of !he Apponioruneot Time) shall be prcwated between Purchaser aftd Seller. &eller shall reecive a rndit fur ell guest Jedp- re~-eivables, rtet. of credit c:ard eommissicms, for all room nights and other c:Mrses up to bill not inc1udil'lg d1e room night during whitb the Appllflionment Time OCCUI'$. Purc:bas« shall be enti11ed 10 tbe amounts of gacst ledger te(ciYables tor the room niglm and olhl:r cl:utrge5 alkr !he Appo11ionmmr TlmC. Seller 1111d Purebuer shall each receive me a cmdit tquulto o~hnlf of !he amount uf room n:~enue intluded on tbe g11Cst Jed~:,rcr for the nigh« cluriJI& \\ilk:h lhe Apportionment Time <>eeurs. All r.E'Veri'Uc!s from 16lllurants. burs und lot1J18C lieilitics f\lr t.l~<: night during which lh1: Apponionmmt Tltl'le occUlli sball belong tO Seller and SeUer shall bear all expenses related lo such revenues indudil'lg. bul oollim.iled to. payroll and food lind be'Yffllge ~osts.

·33- -- RU Austin Courtyard 018345

645 .

(b) I~ !!ll4 A.w!s.smmt.i, Seller shall be solely re!pOJUible for any taxes~ in respect of its income, net wonb or capital, if any, and any privilege, sa1e:s, hote] or terort occupancy laX or transient a:cupency llllt, due or owing to any g~ entil)' in connection with tbt: operation of !.he Property for any~ of time prior to the Apportionment Time. ~shall be solely r.:spomible for all such taxes for any period fiom 111\d aftet' the Apportionment Time. AEj mcome 1llX arising u a res\ilt of the sale and lransfct of the Property by SeDer to Purchaser shall be the SQie responsibility of Seller. All ad valorem taxes. special or general assessmeots. teal prop«ty taxes, water and sewer rems, rates and charges. vault cbarges. IIDd any mllllieipai permit fees shall be proraled as of the Apportionment Time between Purcha:ser 1100 Seller.

{c) UtiljJies; Id!;plwnc. Telephone and telex charges and charges for the supply<)( heat. meam. electriC po\Wr. p:>. lighfing.. cnb11!' television and any O'lhet- utility ~rvice shall be prorated u of the Apponiomncnt l'imc between Pun:hast!r and s~ner. Seller shan recch-e a credit for all d~its. if any. made by Seller as securiry under any utifil}r service cxmttacts if the same are Cnmsferable end provided sueb ®posits remain on deposit for the benefit or Purchaser. If possible. cutoff readings wiU be secured F«atlutilities liS oflhe Apponionment Time. To the extern cutoffreadiugs are not available as of the Apportio:nmem Uu.te. the cost of sue1t uti)ities sbal! be apportkl~ between rhe pa.rties on she basis oftbe latest actwal {not cstimeted} biJJ for such service.

{d) ContJ1H:ts and ~; Trode Pavabh:s and Receivables: Securi!'r Dcwsits. An)' Dl'!IOUIIIS prepaid or payable 111xkr any Contm:ts and any other !Rdeo pa}abll:lllllld reeei\"llbles sit! II be prot;lled as of the A.pponilmmcnt Time bctween Purchaser and Sl!ller. AU amounts known w be due under Contracts v.ith reference ro periods prior lo the Cloting Date shall be paid by Seller orcredlh."'llo Pun::lwer. Any addhloN.l!lmoums not known or oot available at Closing will be pan of the post closing adjustments contempla!ed in Secrion 9.2. Pwdtaser shall be entitled to a credit for all security and other deposits, if any, held by Seller us of the Apportionment Tune with rcspeello Contrac~ to the extent Pun:haset aumnes such Contracts.

(e) ~- fees peidforliccnses, p:mits and otherauthorizatioos ne~sary for 1hc usc.~Jecupancy and OjXf'Ution of the Prop.-ny in tbe cllfTeflt period shall be prorattd ns af tilt! Apponi0tU71tnl Tim.! between Pur<:ha~~ and Seller provided that such licenses. pewits and other aUI.ftorizatioos are trnnsfcrred 10 Ptm:hlm:r.

(I) Bookings. Purchit!!Ct shall receiw II credit roradl-11nCe Jlll)"JUelll$ and &posits. if nny. under my ~ings lh11: rela!l! to a period after the Apportionmeut Time:.

(gj Qitl Ctttifisr@. Pun:l!aser sball receive a credit fur 1he value of all gift certifieales issued by SeUer or Manager ~hat have not been redeemf'd as oflhe Apportionment Time, oel of the historic forfeiture rau: applicable at the Propmy.

RU Austin Courtyard 018346

646 ..., .. (b) Ye!!dbm Madiixles: AlMs. To the extent that fobds in ~ machines lllld ATMs are the property ofSeUcr, 5\M:b ftmds shall be remand by Se~ as of the Appot't.iaDmeDt Time. Purcbaser shall nol receive a credit for such monies.

(i) Cub .Accomis, AU Jiulds held in any accoams mllintllirled by or for the benefit of Seller at the Appartionment Time will be retained by Seller. hrc:base shall not reteive a credit for such funds.

(i) House Bapk.s. NOtWithstanding t~ provisiom of S«lion 9.l(i). Seller shall RCCive 11 cred"ll for the cub held in lbe H

(k) P!mid G!pef!J,q,i Deposits.. Seller man receive a eredit for prepaid expenses diftCdy or illdirectly allocable to any period from and _after the Clcmoa Date mcludin& witboot fimitllion, prepaid I1!IU Llldct any equipment lease. annual pennillnd inspectioll tees. f!n for licenses, lrade aDOciatioD dues !Nllnlcle mbscriplions. ami all stt'llrity or nt1Mr deposi!$ peid by or on behalf of Seller to third parties to the extent lbe same m: ll'llflsferable and remalll on dtpos:il for lh~ benefit of Purcham-. W'ltb the CXC"eplioo of prcp!lid ad\'Cftisif11!. wbich bas not bffll publisbed, mlliled IX 11ir..-d, Sl!ller will recd\'e no cl'tl,ih for~ ed"'•llii!ring L'i)$\ll.

(I) !RSUCIJII:1:. Seller shallllC' paid lUI}' refllllik for IllY prepaid premiums for e:dstina insllniJK."e policies due 10 Seller upon rreeipt of the same by SdJer or Purt!hueT. ~all not trceive D e!1!'dit ror any prepaid premiwna.. .'

(m) Inventtries. No adjustment shall be made fur any Consumable lnventuries. ~:~II of which shall be included il'l the AUocable Price. 1"be pretrding sentence nolwilhstanamJ. merchandise, rood and' bevm!-i!s that a~ owned by third-party renams do .1'101 t"Unvey_

tn) Emmce§. f.mplotcc lN!biJitics s!mll be prorated as afthe Apportionm~nl Date. SciJcT wiii have liability wi1h repcct to wry employees or ochc:rs WOI\ing at a Propeny lO the cnentany liabilit) or obligation ~~~:crued ill my period befure the Apportionment Date. Ptircllaser will be responsible for aU Employee Liabiti~ ~from aod alkr tbc Apportionment Dare; ~!nrs.m. all such amounts ~bkh are pil)'llble alicr the Appotlionnli!:Jll Dale but arose. accrued, or an: attributable to any period prior lo the A.pportiORDJent Date will be aUocated to Selloet and crediled 10 PurdJsser at Closma. For~ of this Section, ~Eatployft Liabilities" sballlll1:lll all employees' wap:s. ·~ \-acaion. pay. sick IC!IIn. bonuses. pension bene tits including. witbtnllimitalian. any COBRA ril!hts. and Other bmttits e&I'Md and IIC.'CTUed by employees ala Propeny togeth.:r "i1h F.J.C_.'\ .• tmnnployment and otbu l&:..es IIJ!d benefits dUt: from IIJl CIJlpJuycr Uf $Ucll L"mpJ~ CC.

(o) O!ber Item:>. Except as otherwise provided for herein. such other items as are normally premed and adjusted in !be lillie of teal property or of a hotel sh&.ll

·35-

RLJ Austin Courtyard 018347

647 be prorated as of the Apportionment T'ame in accordance with Jocaa custom in the jurisdiction in which the Property is locaf£d.

9.2 Closing S!!llemCI)I; Jwe-!Jp, Sellers and Purchaser shall joindy prepare a proposed closint statement containing the parties' reasooable estimate o( the items requiring p!'OI'lltions and adjt~Stn'~ems in this Agrttmem. Subsequetrt fmaladjuslmmts and paymems ('1'ntt-Up'') shall be made in cash or olher immediately available funds IllS soon DS practicable after the Closing Dale. Jn the event thai a Seller and Purchaser have not agreed on rhe IKljustmentS described in Seetioo 9. J, upon epplica6on by either l*t}'. a certified public accountant ~bly acceptable to both parties shall detenniM any such adjustmtm~:S. The charges ofsuch aceollfttant shall be bome equally by the parties to such disputed adjustment. All adjustments to be made as a ~t of the final result! of tbe Troo-Up diall be paid to the party entitled to such adjustmeQt within ninety (90) days after the final ddmnination thereof.

. 9.3 Sdlm Clqg Costs. The- following costs and charp shllill be paid by Sellers:

(a) filly percent (SO%) of all transfer. Ales, use, recordlalion or otbeT similar IDes, impositions or expenses ("Rc:ccrdmg Chllllrp~"J incurred in comection with lhe recordation or filing of the instl1lU'Iel'ltt required at Closing on any Property. includin& the 1Ili11S-fcr of the Asseu;

{b) fifty ~ (50%) of all bulk sales raxes and other persooal .· ~)' lll!Ce!;, if IIDY~

{c) fill)' percent (50%) uflhe costs or undennking lhe Iitle selllirelteg and preparint.: Ibe Title: Comm itmt!nts:

{d) lifl.)' perccn1 {50%) or the coo~ ~lf un~ title premiums charged by the Title Company in connectioo with the issuance orTnle Policies, as w-ell as the costs to obtain lhe follo\\ing endonements to lht Title Policies, where applicable 8!ld av.-ilable: ( 1) com_prebensive endorsemen«. (2) zoning eodorsetnent (ALTA JJ ). (3} MVCy/legal description endorsement, (4) il:eess to public road endorsement, {S} torltiguity endorsement, (6) blanket/non-locatable easementS. (1) encmechments onto eu:stments. and (8) separate tal' lot endorsement rsbl.,dard Eationemenb"');

(e) the eoslofany endorsemtn!s. other thM me Stnndard End~mc:n!S.. issued tu remedy Title Coodiriow (""'Ttale Coadlrion Endor-sements}:

(0 fifir pcrum~ (S~) of any fees payable ro the Tirl~ C'ompmy in connection wilh irs sett'k:es as I!Serow agent:

(g) any commission due to HWE; and

-- -36-

RU Austin Courtyard 018348

648 ....- (b) all fees charged by s.llm' legal~~ end their other con.mltmts in eollllCCtlcm with the prepention aDd negotiation of this Asreement. and all other dac:uments aQtl iasuumenlS in cortliedion hetewith.

(a) !he Allocable Price; (b) any ~~moums due in eoona:tion with the issuance of new fmrehbe Agreements (bul excluding any anKnmts requi~ to fund any PIPs. which shall be the sole reJpOnSibillty of Seller as part of Seller's I Jotcl ~tion obligllltion};

(c) any amounts to be paid h1 Ctllllll!etion with new Management A,gmmen'b, iJJCiuding any reserves and/or working capital required by !be terms of the - Manaceme:nt Agreeme~

(d) fifty pm:em (SO%) of tbe ~om of undertlakin& the title ~hes 8Jld prepllring lbe Title Commitments:

(c:) fiftY pmem (50%) of the costs of any title premiums chargtd by the Title C'omp!llly in cOM«tion \\ith ihc il.suance ofTim Policies and !he Sllll'Xbrd Endorsernenls; {f) tb~ COSI. of any endor.aements. othet- than Slaftdatd Undorsements and Title C'onditioo Endom:mems, that Pun:ham- and/or it$ tenders sbeU n:q~t;

(g) ttU tide re-insurance tOSt$:

(h) fifty~ (50%) ofany fees payable lo the Tide Company in ronnetlion with its serviC"C"S as escrow agent~

(i) all cow: im:umd in performin~ due dilisencc and :teeurin~t finllllcinJ to complete the lnlnsm:tion (""Third-Prerty Costs..) ii'IC"Iuding. without limillltion: (i) cnYinmmentul t.:pt.'lltS for :my PI\,Jl'!rtY: tii) !'Urveys ohny Prop:ny; (iii) nppraislils~ {iv) fees 3nd custs paid to any ]l!lld(f in conneetioll whll obtaining fil'l8llCing for any Propeny~

G) all fees charged by Purchaser's legal ~land its other c:onst~ltallls in tunnection with dtl;_prepara1ima aQd ~gotiation oftbis Agreement and all other doc:urnenlS and instrtmlenltin connmion herewi.~h;

(k) fifty peretnt (SO%} of all Recording Charges in~d in connection with the recordtltion or filinG ofrhe imtnrments required at Ctosing on any Property, including the tmns&r of the Asseb; nnd

-- RLJ Austill Courtyard 018349

649 (1) My pemm.t (50%) oran bUlk sa~es tws md other pen!OI1il property taxes, if any.

9.!1 C!m:eJI~&iDD. &e. The obligauioo of Seltm and Purchaser to pay any ~ion fee charged by Title Coi'II'J)tny shalJ not bt ccmctitioned upon a dosint; of the l:r'aRSI9Ctions dncribed in this Apmnent. The parlin hereto !!pee that ifthis ~ shall be: tenn.inated for Bny reason whatsoever Sellers and PL~ttllascr shaU eacll pay fifi.y pe~ttnt {50%) of lilY cancellation fee charged by Tide Company.

9.6 Baggage; Safe J}cJ!osit Bow. On the Closing Date, ~tativcs of Seller and Pwdmer shall &Me 1111 iJwentory ot: and seal. (i) aU safe deposit boxes (other than~ .u:fet located in guest l'OOIIIIl for use by Hotel~) in tbe ~("Safe Deposit kesj; (u) aU lttuage. valises, trunb. pam:}$. ~.valet~ and other property ofpe3ts elleclted or left in the care of me Hotel by guests or IBioed by Sellet'u ~ty for any unpaid ~receivable. and all ilems ~oed io lbe Hotel's lostund found (eolleetiYely, ..~;;and (iii) an unused bagpge cllairn dlecb ("V••* Clafla Clsetks"), JfPureboser ef~ not to take an inventof)' ofd~e Sa-te Deposit Boxes. &IWlJe und Unused Claim Checks. Seller's irrven10ry of S"UCh irems wm be deemed llCCilrilte. From and sftct the making ol"suclt inventory and sealine of the Safe Deposit &lees, Baggage lllld Unused Claim Cheeks, Purcbascr shall be rtSpOnsible forrdl Safe Oeposlts Boxes, all claims relaYug tO Untl$ed Claim Cheeks and all Baggage.. If and to the extefil. the seal placed on any Safe Deposit Box or Bar&gage sball be broken prior ro lhe release thereof to «be respectjve owners, Purt:h~~Se!' sbtll be responsible for the eonk1lts tbereo£.

9.7 ~ The provisions of lhis Section 9 shall sur'\'ive Closing. or in me case of Section 9.5, a tmnin11tion etflhis Agreement.

SECTI0:-410

~f;FAULT

10.1 oerautt. by Selley. If any Seller shall fail to perform any of t1te material <:OVmU1tS 8lld ~ cmtained herein .net such condition or faiJure continues for 11 peri()d often (I O) days (or S\ICh additional period ;1s 108)' be reasonably required to etfectuote a c:ute oftbe same) after written notiee tbemlf from Pwehaser~ Ptm:Ju:r may eleet 1o pursue one of the following remedies: (i} pursue the remedy of specifiC perfonnance apinst tbe dethulting Seller, or (ii} tmninate 1his Agreement solely witb rnpeet to the atrec~ed Property. in whkll event the Pmclllll$e Pritt s.IWJ be redi!Ced by the amoom. of the Allocable Price for sw.;h Propo:n). In tlb: ~,·ent lltal Purchaser shall terminate Ibis Agreement pursuant tb clause (ii) of the precedi"~t sententt, Purchaser shall name only tlw! Seller or Sellers whose fail~~tt to perform gave rise to the derault in my lepl action. and in no event. sJmll Purdtam iru:ludl: While Lodging or any other Sellers in sucb suit or proeeec:Hng. In the C\'ellt that Pwcha:ser sball terminate this Agreemenl pulSU811110 clause (ii) of Ihis: seelion. Purch~~SCT shalt be mtitkd to m:over its reasonable aad vetifmbJe out-of·~ expc.II'$H paid by Purchaser 10 third-plll'tits and

-38·

RLJ Austin Courtyard 018350

650 rela!inrl to lhe tesu, stlldies or iupections of !.he specific Pmpert:y or Properiiea ofany defaultiu£ Sellezs.. and with respect to oommon or sblllred expense~ {sueb u h:pl r:osu) paid to lhlrd-partles. Pmdluer shaJI be eolitfed to reoover a pro rua ~ of at~eh expenses. The foregoitlg provisil.l>IIB of this Seetion J0.1 n«witbsundiug. in ao event Hall defawtiag Sellera be oblil!,llted to reimburse Purdmer for more tbm Oac MUUcn Dollars (Sl,OOO,OOO.OO) in me agregate ofmth ~

10.2 DetJu!tbyfnmbgser. Ifthuale of11.11.y Property. u ooolemplali!d hereunder, is not c:oosummated due to Purchaser's &illlre to perfonn atJY mataitJ ~ or~ts c:~ bcrdn (other thll.ll. Putclraer's failure to pay tile P~hase Priee and !be other amounts 10 be paid by Pun:~ hereunder) and wch ~iorll or faihlr'e~ for aperiodoftm(fO)dsy.s adler written noticethee.of from ~tleTa or soeh additi0111111l period IS may lie ~bly required to efTeernre a awe of the same {bitt in no evem longer dwJ lhlrty (30) days aftef notia: from Sellm). Sellers wlt be mtiUH, u their sole and eJ~clusive retDedy for such defilutt,. to tetm~ 1hi.s A~ .QCVor ~cive the Depoeit IS liquidated dauuqes. Sellers' ript to =ive 1he ~tis lntcaded 1101 ar a penalty.tM. u t\111 Jiquidat=d ~ The right to m:em the J)qlosi.t as fullliquidlled dlfll88" is Sellm' sole amJ exdwrivc remedy in die e\-eat of defau!E bemmder by Pun:baser, and Sellers ~ waive and release &flY rlabt to (ll.lld hereby covenllllts that !hey shall not) sue Purdlluer for~ perfonJ111L11Ce oft!tit Agmemeol or to recover any damap ~any .lllllure or description other thaD Ule f)epaJit. P~ hereby waives and relem:s any rigbl to (and hereby .:DVlmlln!J that it shall not) sue Selltrs or seek or daim a n:ftmd oflhe Deposit (or any part thBeOt) oo lhe ~it is ~bk in amO\Illt and elttteds Sellers" actumf damases or that its relertion by Sellers eonstinaes a p191alty lind nolag.reed upon and n:1150nable liquidated da1ft11$t:s.

SECTIONlt

11.1 Asmmmt to lndemnifr.

(a) Subject to the expn.'SS provisions oftbis Agreement, Sellers shell indemnify. de rend and hold hlmnleu Potth!ISCr and its suetCS9orS and assigns !'rom and agaiusl any claims. los!ie$. damases. liabilities. custs. and expenses (including. without fimilatioa, mtiiOI)Ilbl~ attorneys • fees IUld expenses) arisiQ3 out of events. acrs. or omissions of SIX:b Seller duu oc:cuned in conntttion with ilS ownership ot operation ofits Property prior to the Clofing Dtde, OF obligations ~~ prior 10 the Closittg Date under any Comraca of sw:b Seller {exetpt 1o the extent of any adjusbntnt made in respect of such Contt$Ct at Closing). T&e Indemnity provided for in this Section 11.1 (•) !>hall no1 exteJJd IO consequetlliaJ damages.

(b) Whenever it is prtl\ided in this Agyeement lhat 211 oblisalion will c:on~inue after Closing ISnn obligation of Pun;ha~~er or be a!SSI&med by PurdJUer 11.fter Closing. Purchaser shall be det!med lo hove 11lso ~to indemnify and bold harmless

-39· - RLJ Austin Courtyard 018351

651 Sellers 111111 their respective ~and wipa from fllld against any clllims,lossi:s, dam.ases, JiabiJities, costs. and expen.ser (induding. w1tbout limitation. ~ im~· fees and ~) arisiD& fiomarry fli.Butt!: of Ptln:base, 10 perfoun rbe obli8Jltion 110

(e) With respect 10 each Seller. at Closing. either (i) sucb Seller s.hall deliver to Purchaser, in a rorm reasonably •'CfJll&ble to Purebuer, the qreesom (the hPIIIt-Clotlag Uadertald:ag") oflts mlllllll&ff, mllnllciJtS member, genen.l partner or other guaranux {which guarantor must be acceptable I.G Putehaller in its reasorulble di$cretioo) lo the effect that,. from and after CJoriJ1i and JW a period of trix (6) months, Seller shall retain film~• in an amotllll·equal ro not less than fi~ pereent (.5%) of th.: AJiocable Price Jlll}'llble to sudl Selle, {provided that SQI:h ~. ~ member, general ):lllftner or~ ibl::ffbas a net wonb 1bat ii not less Ibm the~ (a) 1e11 pa:cent {10%} of the Alloeabk- Price payable to sueb Seller cr (b) Nine Minion Doliiii'JI ($9.000..000.00) {which amounllhall salisf)r all of the net worth requirements under this subsection 11.1 (c) for any Pmorr Mia is a lllllnteer. managing member, general pat'lnfr or parantor} ). or at the option of Seller's maJIIIICer. I1'Wlltgint member or 1enetal pllllller, (ii) Sl.ll:h Seller shall deposit imo II Post-('k>!ring E:~~..·rou. the sum or not less lhan li\-e percent (S%) oflhe Allacable Prite payabl! to such Seller. From and after the dmc: tlldlt is six {6) months after lhe Closing Oat\'! and until the date d!at is twelve (12} lllOOths after the ClosiBg Date, the boklbatlr and net worth requi~s ~ forth in lhe preccdinc sentence shttll be reduec:d fulm five(S) pm:em of the All«able Price payable to such .· Seller to two and one-balfpercebl (2.5%) oftbe Allocable Prlee Jlll}'tllbk t() such Seller, and the balance in any escn:rw shall be released ro Setler; ~ ~Jstv.tem. that to the extent that Purcbuer bas timely wened ill Writing any claim against such Seller. either (i) sodt S«llet shall retain nDIIess tJ.n one bllmhed twenty percent (120%) Qf1he reasonable amomn of sacll ellrim, or (ii) an amOWit equal tu one hundred twmty pereent (120%)oflbe~leamount of such claim sballcontinueto be bcld in escww,asshe case II'IIIY be--. until sueb time os such dnim is dlhl:r n:solved or released.

(d) The pll)\'isions of this Seetiun 11.1 shall sunive the Closing bere\mder.

11.2 Broke!JL'£ Commimu Purswim I() Ill¢ I.Cmi.S or. sepal"'l..e ~ent between Seller.! and HWE. Sellen have cawed HWE to serve 11s the broker for the tnlnSaC'tioJis ck$tribed herein nnd haw a.peed to p~~y a commission 10 HWE.at Cklsing. Olher than HWE, each of the panifs ~10 represen1s that it deolt with no broker. finder or like JlFnl in tonnection with this (lgrument or the lransactionl contempl11ed hereby. and tbal it reasonably helie''l!S that t'berc is no basis forM)' olher Person to clahn a commissitln O'l' other compe119tion for briflllng llhout this A~ or \he ll'liiiSIKtions contemplated hereby. Se!Jm shalt illdemllilj and hold barmJes.l Purchaser and its sue<:esSOOIIIItld migns from and qainsf any lou.. liability or expense, including reuonable auomeys· fees. arising OUl of any claim or-claims for commissi.OM or Olber compensation for bringing about this Agreement or the tTllnSaetions coorem!Uted hereby

-- RU Austio Courtyard 018352

652 ... ~ by any broker. finder or like •&ent. if such claim or claims an: bued in whole or In put on dealings with Sellett. Purcliaserdu&ll i~ lind hold bannless Sellers and their respective ~ and assigns from and against any loss. liability or expense. indmins m90flllbie llltOmeyS' fees., arising out of any claim or clain:ls fur commissions or other compensation for briDging about Ibis Aareemem or the tnmsactioos ccnaemp.la&ed baeby macle by any broker, fmder or like agent, ifmch claim or c.lflim are based in whole or in p11rt on dealings with~- ~~in this seetioa sh11ll be deemed to eaeate .lll1y rights in uy !bird party. The provj~ ofthis Seetioo 11.2 sWI. JUI'Vive lhe Closing hereimdcr and Bll)' ~on oft&.ia Agreement.

lt..3 ~- Prior to Cbi.Ds.aoyrelealetotbepublic ofinfotmalion wilh respeet to the sale contemplated mmn or 11111)' matten set tbnJi in this Agreentellt will be made only in the form approved by~ and White LodBing (as agent for Sellm). 11.4 ~-

(a} Any and all norices. demands. consents, ;approvals, offers, elections 8i1ld odlu commWiications required or pennilied under this Agroement shall be deeled adequately given If bl writin& and the MUte sbdl be ddiveml either iD lud. by mai1. by Federal EXJRSS orsimilarexpedited commucie.l cmit:r or by fu (with a copy to be sent lbr next business dilly deUvery br Fede!UI Expre!IS or similar canier 011 tbt: same dny), addressed to die recipient of the nolice, postpaid and rqi$tel"fd or certified With return receipt reqlleSied (if by mail). or wilb all freight charges prepaid (if by Fcdel'lll Express or similar carri~}.

~) AJI notices requirei.lur pennitlet.llo be sent hereunder sba!J be deemed to have been given for all Jttll'POKS of this Agreement upon !he earner of (i) the dftte of aclmowledaed ~ipt. cii) me date tbe n:-tipiem tcl"UKS receipt. or (iii) lfM: next business day afteT depMit with !he carrier if st'nt by Fedenl Express cr similar mrrier.

(<:} All soch notices shall be addressed.

if to Sellers to:

Carol Ann Bowman 1000 E. 80111 PlacE Suite 700 North Merrillville, Indiana 46410

with a copy 1o:

Venable I..LP BtllO T()lll'€:111 Creseenl Drive Suire 300 Vl.f11na. Virginia ~~I &l A~ion: M. J11~ Yurow

-41-

RLJ Austin Courtyard 018353

653 iflo Pwclmer, to:

do RU Developmena,UC 6903 Roclckdge Drive Suite 910 Bethesda. Maryland 20&:17 Attention: Thomas J. Ballimore. Jr. with a copy to:

Amu Fox PLLC 1050 Connecticuc Ave._, NW Washington, D.C. 20036 Attention: Gemd Leval

{d) By notice given as herein provided, the parties hereto shall have die right fiolll ti~ to time liJI(I at any time dllrins the ttnu or dii3 Agreement to cbl.utge their respe(tive addreSSl:S effective upon receipt by the lllhl."t' parties of such nCIIiee and each shall have ~be right to spetify as its~ rmy oehrr address within the United Sta~ of America.

11.5 Wilms: Modificalioo of.A~ Any wm-er or any wrm DJ' eondilkm of this Apement, or oflbe breaeh of :my f;(l'¥el)llnt., ~or wamutty contained htreia, in any om; ins~anc;e. shall not opeme as or be deemed to be or construed as 11 flll'tber or continuing \\-aiver ofany otber hm:ch of such term.. condition, cm-enam, re~on or wammty. No failure at any time to enfim::e or require pcrformmcc of 1111)' provision hereof sha!J operate liS a waiver of, or affect in MY mmner, such patty's right •t a lllklr time to enme or require pcrfui'Rii8J1Ce of web provision or nny ocher provision hereof. This Agrrcmem may nol bt- amended nor shall arry >A11ivcr. change. modifit11tinn, consent or discharge bl.· cffecred. e~:cept by 1111 instrument in writing executed br or on brhlliC of the party againn whom enforcement of 11ny amendment. wah·er, chant,oe. modilicn~i011. t'Omomt or uiscbnrge is sought. Tbis ~ s!WI not be binding until such timc ns 1111 p3rtics l:w:rtlo have cxeC111ed this A~t.

11.6 ®ignmm; Sm:cmors and Auim. This A~ment and all rights and obligations bmunder shl!l net be assignable by any party without !be written ~ of the other party. uceptlhat Purchaser may usip this Awecment to any one or ll')(ft Affiliales of~. ilris Agreement shatl be binding upon Md shall inure to the benefit ofthe pmies herelo nnd their rcgpcctiw succcsSOIS and pemtiucd assisns- This A~ent is not intended 11nd shall not be conJtneed to create any rights in, or to be enlbreeztbk! in any pan by. any other Pmons.

-42· - RU Austin Courtyard 018354

654 .- ,~

11.7 ScvmbjJitv. H any provision oftbis ~is, determined by a tomt of c:ompmqt jllrisdiction to be invalid or unenforceable, the remainder oflhis Agreemellt shall nooetbelm mnai.11 in twr foree and effect.

11.8 COUIItgJI!InS. ·rrus Apement may be ~er:uted In twc (2) or more eournerparU. each of which shall be d~mcd en crip, but aU of which tophu shall c:onstiMe OtlC$ and the ume instruJQIUlt. This ~ CONtitutes the entire qreemem of the psrties baeto with respect 10 the subject matter hereof and shaH supersede I!Bid take the place of IUI1 other inscrumenlll purporting to hi! 1111 agreement of the part~ henMo relating to the Sl)'l:!ieet matter hereof.

. 11.9 Oovemjng yw. This Agreement shall be Wtetpt$d. construed, applied and enforced in BCCordance w"ilh the Jaws of~ State ofMaeyJand. applicable 10 contracts made and to be perl"ormcd in ihe Slate of Maryflllld. To tbe maximum exk:nt permined by applicable law. any acdon to enlOree. arllling oot or. or relating in anyway to, any of the provisions of this Agreement shall bt brought and pnmeuted in such court or courts located in the Srate of Maryland liS is prm'ided by 1aYr. and tbe partie3 CWISent 10 lhe jurisdictioa of said court or couns locAted in the Stale of Maryland and !0 service of process by registeml mail, return receipt requested. w by any od1er nmmer provided bylaw. - 11.10 Ptrfgrmancr ou Buslnqs £>a,,s. In tht event the date on which performanc:e or payment or any obligation of ll party required beretmder i l orber than a Business Da.y.lhe time for payment or perfonnance shall automatically he extcllded to the fi!"$1 B\tSiness Day fullov.ing Sl.lidl da.\e.

11.11 Attcmeys' fee,. If any lawsuit or arbitration or other legal proceeding ruises in eonneetion witb the ~lion or ~nron:emenl of this A~L die prevailing pany shall be entilled to receive, rrom th:! other pany, the prev~~iling pany•s cos:IS and expenses, includivg Je8$009ble a!tOme)$. f-ees.

11.12 lkfarjqmbjp. Nothing herein conain!!d sb$11 be deemed or construed by tbe )l'llfl.ics hereto, nor by IIDY third party, u cm~ting the rciQllombip of principal and agent or of parlne'!!lhip orjoint venture betwet'n the parties bema, il being lll:aderstood nnd agreed ihllt (~c:ept II.S !!lid &o the extent 5pe¢i !k.l!y ~idt:d tor hereinl no provl$ion eomaincd herein. not any acts ofthc panies he!'cto shall be deemed to crea~e 11'1)' relationship betw~n th.e parties hen.-to \ltller rh:ln r.hc- rd:nionsltip of ~Iter and pmdnlser.

J 1.13 Ljke-Kind E;,:cbanu. Each Sellon (btlt not indh-ic!wl members or):llfll'lm of any Seller) shill hal-t tile' righ1 to. srructure ies tmnsrer or int~ in its Property as Jlllltl of l'llike-kind exchange 1o be dc:sipted by suth Seller (includmg 1be ability ro hive tiile taken in the l'll1l1e of an entity established in ooier \o effec:tuate !Ueb ex~), by providing Purcltastt with llOt.ke or such exdluge by not lateT than t~ (20) days prior to the Closing Dale (with any doeumentsm be J"e\.iewed by hrehaser in c:onfliCiioR th.m:wilb 1.o be submitted 1o Purchaser by not later than fifteen (1 S) days prior to the Closing Date). with the rt:.'ltllt tbril the exc:bl!nge shall qt~~~.Iify for non-1'1!C0g11iti~m of gain

-- RLJ Austin Courtyard 018355

655 ..

or loss lll'!dl:r Section l 03l of rhe Internal Revenue Code of 1986~ as amei'lded. P~ sball coopeme with a SeDer in efli!ctinB $Udl exe~ (such eoopemion to be limited to the review and. execuliora of en ~t to a q!W!1kd exclumge intezmedilly and other re~e. requests of Seller and expressly to exeJmk: &12)' ~~~T~mgc:ment to provide: t'or instillment sale trea~ment112fP'Vi*d liD!: (i)uy cosiS and ~ inetBm:.d by Pun:bper as a result of structuring such ti'IIIDSIH:tion as an excbanp, as opposed to a outrighi. sete. shall be borne by Seller, (ji) Seller shall Indemnify and bold iulmtless Pwclme:r from and against lillY and all liabilities, C03!S. ~ claims or demands arisina from rhe coopemtion ofPtlfChtser in rifecting the exchange contemplated hefeby including. but DOt limited to. Purcbaser"s reasonable attomeys' fees: and (iii) such excbanse sbUI not result in any delay in closing the tmJsac:tion.

I U4 Ppn:hm ofO!Ie orMm k!l.ttutities. A.t PurebaseT"s opUon.furebuer may eleer, with respect to one or more Properties, to puttlwe all ofthe interests ill !he Selkrcntity in 1teu afpurcltasing such Propeft)' direclly. Such option shaD be exercised with mpect to one or more Properties. if at 111. by Purchaser givina While Lodling written noliee rllereof \Entity Part"hase Notfee..) not lluerthan thirty (30) da:ys prior to the expiration of the Jnspeelion Period. U(JOft tie detivel}' ohn Entity Pwdwe Notite, the parties sball negotiace io good mtb to enter into one or more appropriate JM"'base and ~ agreements n,.- the ~base .md ,.}e of the Sdler entity rad&er tbllll the Property, tiM: tmns and provisions or StJCb •gn:cmem' to be economically as identical to the tenns and provisions c)fthis Agreement as possible. wit!\ approprime adjUIIUnenu to take into ac~o.-olllll !he reasonAble requirements for &!K' ~IT.lsc Df emit)' intererns. The foregoing pro,•isiOI'I$ of this Section ll.14 noh\ilhstnndins, ifPilfrllaser' s election ro buy the Sdlt!£ entity woaki cnt~\lllen ta\'Orable tax trealm~ltt for u Seller 1ban a sale of abe Propeny. Pureh*T 1111d Sell~r agree lo work togclher in good faith 10 !IUUCI~ 11 sale in 111 manner that does 00( crcaae for such Seller the unf~Mlt"ablc Ullt t.reatment.

11.1 S furtbq Assurances. Upon ~ tmns and subject to the conditions hereof, each of the p.1ll1ies bere1o ~ to use its commercially reasonable b'OOd faith effort$ to take. or cause lo bot taken. all actions, and m do. or cal.lle to be done, and to assist and cooperate \nth the other pBrtin in doing. alllhlng.s necc:smy. proper or advisabJe to con~ummate and make effective, in the mOSt expeditious manner pra<:tieable,1he U'IIJtS8Clions contemplated by this Agreement including. without limitation (i) the obtainin& of all necessary actions or non-a<:tioos, wt~h•ers. conseniS nnd appoval$ from govemme~Nal or regulatory 'l!fltities and lb.: making of all JJeCe5SIIfy regislnltions and filings and the taking of all StepS as may be necessary 1o oblain 1!11 approvltl or W4iver from. or 1G avoid an aaion or proceeding by, any governmental authority. (ii) the: obtnining or aiJ llt!ces~ry consents, approvals or waivers from lbird puties, and (iii) 1M aecution and delivery of a11y addiml insuumenls ~ to c:onsununare the transactions. ctm~emplatC!d ~. and ro full)' cony out the pu~'"S Q[ this. Agreement, but which are not inc:oosis.tent v.ith tJ1is A~menl.

11.16 MlhQrit\ of\\ibh,; l.v

- RLJ Austin Courtyard 018356

656 .. , ~

authority to act on im behalf 10r all pUi JliUSIEf of Ibis Agreement inchxlint, but DOt limited to, taking any IIICI:ion ofooy Seller required or permitted hereunder. deliYCTing or receiving any notice required or which may be given hem.mder. graming my~ or approval hereunder or in connectioo with any tmlsaction contemplated hereby. eDC'Uting any documeat,. amendblg this ~tor any doc:wnent 10 be delivered pumwtt tc this Agreement and compromising or resolving ny dispute bertunder. PurcfutHT shall have the full right to rely upon any act or de<:ision of While Lodging hereunder u being the act or decision of one or more ofSeUm and wJJ not in any manner be required to ascertaira whether or not White Lodging has obtained 1be expressmtthorization of uy Seller prior to so acting or deciding. It is expressly agreed by each Seller tbt.l. the agency, power and authority hereby granted to White lodP,g is irrevocable and shall not be modified, a!teml or revoked in any manner prior to ClosinJ.

J 1.17 Section md Other Headjnu. The headings comained in this A~t are JOr referenc:e ooly llllld Jlmll nor in any way affect the meaning or interpn:talion of this

~·· ll.lll Time of the Essence. Time i1 orlh~ essence with re5p«t to this Al£tl!lement.

{SIGNATIJRES APPEAR f)N THE FOLLOWING PAGE]

-45-

RU Austin Courtyard 018357

657 lN WITNESS WHEREOF, the parties hiM: dlllaOd Ibis New Hotels Plrl:dlue fllld Sale A~eriC to be exec.ned a.s a 1111111.1cd ~ • of1he date tint a1m'c '\ll'ritfen,

Mii'Mftrt, LLC, an lndilsla limited labifity compalt)' By; White l..od&ing Services Corpomioa, Mlifi~F

By:S_r~ EOBuntel1 Chief Operating Ol'ffecr

RU Austin Courtyard 018358

658 IN WJTNESS WHEREOF. die parties have c:liWiled this New Hotels Pwrehalws lllid Sale A~ to be executed as a sealed ~IllS l)f'the dtlte first !!bow wri119.

Miflllres,.LLC. an bldlana limired liability company By: Wbite Lodcin& Services CofpofllltioD. M~

~-··· By.~------~--~~~~---- r;'5' -eLfl • E.Bume!L Chief()peming Offleei-

.·

--- RLJ Autin Courtyard 018359

659 rN WITNESS WH2R.EOF, the )*ties llue caii:SI!Id this New Horels ~ and Sale Ap;rc:ement 10 be e~eemed ar • Jelled inslnuiiCIIlt u of'the dale rmt aboYe writlal.

SIUJ.QS:

Lotates, LLC, an bldl•111 li!Mfsd liabiJity company

By; Wbi~ Lodsing Slni~ Corpootioll. . Maneger-

By:£ ~4 £~ l..awrence E. Burnell Cldcf()pemtinc Officer

RU Austin Courtyard 018360

660 .- IN WITNESS WHEREOF, !he partie5 ba?e c::a!Jllllfd this New Hollels ~ IBid Sale A areetnent to be execwxi u 1 telled IMinlmmt as oflbe liilre first aheM: writteR.

Loaploat White .EdcfalSpriac, LLC, riM.fl. . limhed liability romJ*IY llll

By: White Lodging Servic:cs Corpomion, thftaF

By. ~ z q:d(J E. BIII"Ddl Oder~in& Offieer

- RU Austin Courtyard 018361

661 IN WITNESS WHEREOF, 1lie patties me c:aused this New Holc::ls 'P!an:hase and Sale Apeement 10 be ex~ as a l!lled imlmlM'Illes ofehe dan& 1im .bow written.

SIU.U.RS;

Sdltolut, LLC. m Indiana limiled liability oompany

By: While Loqing ~Corporation, Mauser

By. ~ear!~ O.icf(lpenatinJ Otmer

.·

-- RI...J Austin Courtystrd 018362

662 .... IN Wll'NESS WHEREOF. 1he )'¥ties have CIUfild litis New Hoteie ~ and Sale~ to be execu1ed all seated instnmenl G oftbe dille lim abcve wriaell.

By: HPA Ccxp.. Oenerul Putmt-

By.~s~Pf) Presideut

RLJ Austin Courtyard 018363

663 ... ,,~

IN WITN2SS WHEREOF, the partie! Jtave ~ dds New Hotels ~ lllld Sale Apsnem 10 be CJ~etutod es 111 sealed imuumettl as ofthe date h above Y~ritttn.

HetJB~A-*•LP· &a Indiana limbed ~ip

By: HM C01p .. Oefte.ul Pamler

By:~Fp~ ~E. BurDell ~em.

.. '

-- RU Austin Coartyard 018364

664 ... ~-

11'-l Wll'Nl:SS WHEREOF. die ~ have ~ this Ne\\1 Hotels .Pilrcllue llid Sale Apmem hi bt e~ ~Sill~ inslnlineaf. as ofth dale first ~~hove writ~~:~~.

Bloomllotel. u.c. an hlcliJna I~ ked liability eompa~~y

By; BW Bloom, I..U:

By: While i..odsia& Savi£es Coiporarion. M.anap

B~ ;~ C ~ La\lm:IICe E. Bllmell, ChicfOpenariog omeer

RU Austin Courty1ud 018365

665 IN WITNESS WHEREOF, rile parties !me cllll&!!d this New Hotek Pl1reJiue and Sale A~t to be executed as a &Wed instrument as of !he date fi.nt above -mea

Graad Wbite Etta Court. LLC, an Indi.~~n~~~llmited llabiflt)' oomprmy

By: BW Omul UC. Menap-

By: 'Muitc lodsing Semces C«pomion. Manager

.·

.'

-46-

RLJ Austin Courtyard 018366

666 IN WIThiESS WHEREOF. the plll'ties have c:aiiSed 1lai.s New Horels. ~ 1111d Sale A~ to be exeeuled lit$ a sealed i~tas of tile date im above 'llllriam.

Grud Wlllte Etldm. Res, LLC. anl:ndiaa limited JiaWJity company

By: White t..odging~~ Manacer

By: c!i-- 2- .6-.-ef "Wm~c:e e.. Burnell Cbief()pemina Offit:er

RLJ Austin Courtyard 018367

667 .... ~

IN WITNESS WHEREOf, the parties ba>te caused tJtis New Holels ~ llltd SaJc ~ to be eJ~C:Cuted u a sealed instrument u ofthe d.te first ablwe WJ~tten.

S.th A.tlllllalreHrt, LP, 1m bldW. limitcd~fp

- RU Austin Courtyard 018368

668 .-.. ,

IN WITN£SS WHEREOF, the: perlill:s 'have cnsed Ibis Ncrw Hotcla ~ lllld Sale ~to be encutcd u a sealed IIISttllnlentn ofd'le liMe tim above wri1tm..

Wldteeo lndustriei,I.H.. aNebrasb COlJICII'Irion

By~~t~ I.Jemis E. Kackos Flwmc:lal Vice President

RU Austin Courtyard 018369

669 1N WITNESS WHEREOF, the putie&lurve caused this NtN Hotels Purcbaa and Sale Aj;reenJCDl 1o W OXecvtCICI a$ a scaJed WlruMaJt II$ Of the df.lte firsl above written.

-- -47-

RLJ Austin Coa.artyard 018370

670 lN WTINESS WHEREOt,lhe pm1iet have eaused tma New HoEe'b Purcbase and Sale Agreement lobe cxecutl:d aa a sealed instnunent aa mthe elate first a'bave ~

-4&-

RLJ Austin Courtyard 018371

671 ....-

Schedule A Identity ofSellm

ScheduleB Addres31e5 of Properties SehwuleB-l Legal De9Cripti00$ ofl'roperties Sch.edule C Allocable Price b' eacll Propeny

ScheduleD Oround Leases ScheduleE Franchises and Oulitde COfllpletion and Closing Dates Scbedule F [Intentionally Omilted] ScheduleO Form orPhY'ieal Conditions EseTOW ScheduleH Form of Liquor Ucense MaMgement ASJettnent Schedule J Fonn of ~gnment!Uid Am~mption of Contracts

Schedule J Form of A~AnRI'ml and Auumption of Ground Leose Schedule K Form or Assi&nment Dnd Assumption ofl.icePSes. Permits and lntanples Schedule t. form of Bill or Sale

Schedule M Form ofClround Lease Estoppel Cenificale Schedule N Form ofManagemeht Ag:eemenl SeheduleO Ust ofB\chlde:d Anets

Schedt.lle P Fonn of Deposit Eserov.·tnstruttions Schedule Q Form or Special Wammty Deed ScheduleR t:.,rm of Subordination. Non-Dmurbanee ond Anommmt AgrceR~enl

ScheduleS [Intentionally Omitted! ScheduleT FormOrPost-Ciosinll Escrow Agreement

-49-

RU Austi.o Cou.rtyard 018372

672 PROPERTY OWNER PROPERTY NUMBER l 118. CO\Ii1YIIrd Mimnar Ft. Miraeourt, LLC 14.500 sw 2~ Street Mlrm!ar, Florida 33027

89. Residence Jnn Mii'!IIDaf fL Mirares.LtC 14700 SW 29"' Slreet Minnnlll'. Floriclll 3302?

90. Residence Inn Downtown louisville Loures. LLC' Kentucky l33 E. Mttrltet Sm:et Louisville, K~ntUtky 40202

91. Sprinahill Suites lonplont Lon11mont White Etkin Sprfna. LLC 1470 Dry Creek Drive Lonpnool., Colorado 80503

92. Schaumburg Counyard Stllcourt. l.lC · 131J Americun l.ane Schaumburg. Illinois 60173 ' I 9]. Courtyard Austin Downtown Hotel J'ropertie! A~ist. LP 300 E. 4111 Street AuStin. Texas 78701

94. Residence Inn Austin DoWIItCJWn Hotel Properties Austin. LP 300 E. 4" Strttt Austin, Texas 7870 I I 9). Bloomington Hilton Garden Bloomholel. UC 245 N. College Avbnle B1oomington. Indiana 47404

96. : Courtyard Grand Jwc:1ion G1111'J(! White Etkin COUI1, LLC 765 Hortttm Drive Grand Junction, Colorado 81506

A-I I

RU Austin Courtyard 018373

673 .

97. Residence bm Gmnd Junction Grand White Etkin Res. Ltc 767 Horiton Drive Orand Jtme1ion, Colomdo 81506

98. Courtym'd Austin AiJport SoutbA~LP 7109 Esst Ben White Blvd. AustiD,. Texas· 78744

99. Homewood Suites Brandon Wbiteco Industries, Inc. !0230:Palm River Road 8nmdon, Florida 33619 i

A-2

RLJ Austin Courtyard 018374

674 . ..

...,.. Sd!e!)W!B

Addmm tfl'rqperties

PR.OPD.T\' PROPmTY OWNER NUMIHtR

88. Courtyard Miramar FL Mii'IICOurt. U.C 14500 SW 2tf' Sttte1. Miramar. Aorida 33027

39. Resideoee Inn Miramar fL Mil'8ftS,lLC 14700 sw 29* Street Miram.v, Florida 33027

90. Residence I'm Downtown Louisville lc:Jura llC' K.enwcky . 333 E. Market St:reet Louiaville. Kenruck)' 40)01 I ~

9t. Sprlnshill Suites Lonpnont llon(IIJt<)m Whhe l:!lfdn Sprini:LiE"" 1470 Dry Creek Drive Longmont, Colorado 80S03

92. ScbaumbW'g Counyard Sehcowt, LLC 1311 American lane Sebaumburg, IUinois 60173

93. Courtyard Austin Downtown Hotel Ptopt'rties Austin. LP 300 E. 4~~> Street · Austin, Texas 78701

94. Residence 11111 Austin Dnwntovm Hotel Properties Austin. LP 300 E.. 4* Smet Austin. Texu 7&1tll

9S. Bloomington Hilton Gmlen : Bloomhotel. Ll.C 24S N. College A'f(f'nue ; Bloomington, Indiana 4740=1 I I 96. Coun)'IJd Grand Junction 765 Hori:ton Drive lI Gmnd Wbite Etkin Coun,llC

Orand Junct1011. Colorado 81506 i a.J

RLJ Austin Courtyard 018375

675 91. Residence Inn Orand Junction GJ'IIl1d White Etltin Res, LLC 767 Horiron Drive Grand Junction. Colorado 81506

98. Cc:rurtyard Austin Airport South Amain:omt, LP 1809 East Ben Wbhe Blvd. Austin, Texas 78744

99. Homewood Sui1es Brandon Whiteco Industries, Inc. I0230 Palm River Road Brandon. Florida 33619

RLJ Austin Courtyard 018376

676 APPENDIX K HOUSE HB 452 STUDY Willis GROUP bill analysis

SUBJECT: Recovery of attorney's fees in suits founded on oral or written contracts COMMITTEE: Judiciary recommended that it do pass, without amendment VOTE: 9 ayes--Grant*, Hale, Moreno*, M. Garcia*, Cain*, Ezzell, D. Hill*, Ribak*, Rudd 0 nays-- 2 absent--Maloney, Jackson WITNESSES: None DIGEST: Article 2226, Revised Civil Statutes, allows recovery of attorney's fees (in addition to the basic claim) for certain limited kinds of lawsuits. HB 452 expands Article 2226 so that reasonable attorney's fees may be recovered in all suits founded on oral or written contracts. The bill also exempts certain insurance contracts and certain insurers from all provisions of the article. PRO: Expanding the recovery of attorney's fees would serve the ends of justice. Generally, the winner in a lawsuit cannot make the loser pay attorney's fees, unless there is a specific authorization in the law or a contract with that provision. Many times a person with a valid, but small, claim will not bother to go to court because the lawyer's fees are almost as much as the possible proceeds of the suit, sometimes more. Even in a lawsuit involving a lot of money, the losing party in effect prevents the winner from getting the full amount, because the winner must pay his attorney. Either way, it's not right for a person to be deprived of his full damages from a wrongdoer. HB 452 is a minor extension of Article 2226, which already allows attorney's fees for valid claims against a person or corporation for services rendered, labor done and several other causes. Further, many written contracts already contain provisions for attorney's fees. And several other Texas laws permit recovery of fees. In some foreign countries, the winner in every lawsuit receives attorney's fees from the loser. These laws have proved workable. This bill excludes certain insurance contracts and certain insurers to prevent overlapping coverage of· other statutes relating to attorney's fees. CON: This bill is a broad extension of the kinds of lawsuits in which attorney's fees can be recovered. It will cause more litigation and more crowded courts. Oral contracts, in particular, should not involve attorney's fees. Suits on these contracts often degenerate into swearing matches. It 1 s enough for the basic claim to rest on the outcome without putting attorney's fees in the balance, too. (more) HB 452 Page 2

In contract suits, defendants frequently countersue_ Wealthier parties will be in good position to run up the costs and the potential liability far beyond the means of a poor plaintiff. This may scare poor claimants away from ever filing a lawsuit. The proposal to exclude certain insurance contracts and insurers from Article 2226 is an unwarranted grant of immunity from liability for attorney's fees. They should pay, like everyone else, when they lose. COMMENTARY~ 1) The potential advantages and disadvantages of the proposed extension are hard to assess with much certainty. More lawsuits are likely to be filed and the courts will be busier. But that's one thing courts are for. Lawyers will probably make more money. More contracts might be put into writing to avoid the uncertainties and extra liability of oral contracts. And perhaps this would reduce the number of disputes and suits. 2) Texas courts may have to decide how the proposed legislation is to apply to actions arising before the effective date of the act and whether statutory provisions for attorney's fees are always to control over contract provisions. 3) An alternative approach to help settle small lawsuits is to increase the current $150-to-$200 limit for small claims courts in Texas. Some state permit people to sue for much larger claims and prohibit either party from retaining an attorney. 4) HB 452 excludes ~ covera~e those contracts issued by insurers subject to the Unfairlaim Settlement Practices Act. In general, this includes such lines as accident and sickness, motor vehicles, casualty, prepaid legal services, fire, lightning, wind storms, hail, inland marine, rain, home warranty, and fidelity, surety and guaranty bonds. 5) It is worth notin~ that the Uniform Claim Settlement Practices Act does no give individual policyholders any remedy for delayed or inadequate settlement of claims, much less attorney's fees. Instead, the Act gives the State Board of Insurance authority to deal with insurers which frequently engage in certain practices. Thus, under HB 452, persons will not be able to recover Article 2226 attorney's fees against this la"Pge class of insurers. (Under Insurance Code §3.62 and §3.62-1, a policyholder can recover attorney's fees in a case involving a life, health or accident policy.) 6) As written, the bill also excludes entirely from the provisions of 2226 various companies issuing life, health or accident policies. Presumably, then, such companies could not take advantage of the provisions of 2226 for recovering attorney's fees in their own lawsuits. # APPENDIX L Assignment of Contract

White Lodging Services Corporation, an Indiana corporation, hereby assigns and transfers to South Ausaircourt, L.P., an Indiana limited partnership, all of the interest of White Lodging Services Corporation, Inc. (sic), in and to that certain Standard Form Agreement Between Owner and Architect having a date of January I, 2005, between White Lodging Services Corporation, Inc. (sic) and Elness Swenson Graham Architects, Inc.

Dated: September 19, 2005.

White Lodging Services Corporation

By. ____________________ Lawrence E. Burnell Chief Operating Officer

Approved and Consented to:

=~fuc. Paul Mittendorf, AlA Principal and Vice President

3Sl6:10Z:09190S

SCANNED SEP 2 2 2007

ESG001952

578 APPENDIX M A.ust!JJ~ Texll/1 C(JTJr/yprrl AumiJ Airport PropertyNIIl.llber 98

ASSIGNMENT AND ASS'UMPTXON OF Ll"C:ENSES, PERMITS AND INTANGIBLES

TillS ASSIGNMENT AND ASSUMPTION OF UCENSES, PERMITS AND INTANGIBLES ("Assignrnenf') is made and entered into as of the c:Jff:nay ofDecember, 2007, by and between SOUTH AUSAIR.COURT, LP, an Indiana limited parlnernhip (<'Assigi~o:r''), and RLJU -CAUSTIN AIR LESSEE, LP, a Delaware limited partnership ("Assignee"),

RECITALS

A. Reference js made to that certain New Hotels Purchase a:nd Sale Agreement dated March 16.2006, by and among (i}Whfteco Industries, lno. and each of the parties named on Schedule A of the New Hotels :Purchase and Sale Agreement, (fi) RL1 Lodging Fund I1 Acquisitions, LLC, and joined by (iii) White Lodgi:ng Services Coipotation (for itself and as agent for Seller and each of the other sellers named on SchednleA of the New Botels Purchase and Sale Agreement), as amended (as so amended, ''Purehnse.Agreement");

B. Simultaneously here.with, Assignor is conveying to RLJ IT- C AUSTIN AlR, LP .:=:~.\ its interest in that certain. Tell1 property more fully descn'bed on :Exhibit A attached hereto :md .. .,. .. .:•

made a part hereof ("Property") pursuant to the Purchase Agreement; and

c. In connection with the conveyance of the Property. and as oontemp!ated under the Purchase Agreemen~ Assignor and Assignee desire to execute fuis Assignment.

NOW, THEREFORE, in consideration of good and valuable consideration, the receipt and sufficiency of which are hereby- acknowledged, the parties agree as follows:

1. Recitals. The foregoing recitals are hereby incorporated into 1his Assigument·as if fully rewritten and restated in the body of this Assignment.

2. . Assi!Wment.ofLicenses, :Permits and Intangibles. Assignor hereby sells, transfers, conveys and assigns to Assignee all of Assignor's right, title and interest in and to all licenses, permit;s and all other intangible assets relating to the Prop~ (collectively, "'Licenses"), subject, however, to the terms and covenants of the Licenses tmd ihis Assignment

3. AssumptlQn ofOhligafimm. Assignee hereby accepts the assignnient ofth.e Licenses subject to the tenus and conditions hereof; and from and after the date hereof; Assignee hereby assumes and shall be responsible fur and shall perronn, discharge and ful:l'ill all of the obligations imposed on Assignee, ~ iuccessor-in-interest to Assignor, under the Licenses that accrue on or a::fter the date hereof.

R1J Austin CQurt,yard 00601.1

701 ~ ' • • ... •• l '." ., • •.: ...... •l. ·t~-;.·•,• :; ....~·· • . • ~,. '• ~~' •

.·)...• :,:;·:1 4. Assiguee~s fudemnifiea:tion. Assignee hereby agrees to indemni1y, protect. defend and hold Assignor, Assignor's memberil or partners, and all oftheir respe:ctive sucaessors and assigns hartnless :from any and all claims, damages, losses, suits, proceedings, costs and expenses including, without limitation, reasonable attorneys' fees {"Losses"), both known or unknown, arising out of or by virtue of the brea~h by As$ignee of (or Assignee's failure to tlmely . perform)'any or all of tbe obligations imposed on Assignee under the Licenses, as successor-in- interest to Assignor, 1hat accrue on or after the date -hetcot , · · S. Af!sigpor§ Xndi~mnificJ!tlon •. Assignor hereby agrees to indemnify, protectk defend and hold Assignee, Assignee's members or partners, and all of their respective successors and assigqs harmless from any and all Losses, both kno;.vn and unknown,. arising .out of or by virtue of the breach by Assignor of (or Assignor• s failure to timely perlotm) llllY or all of the obligations imposed upon Assignor under tbe Licenses that accrued prior to the date hereof. ti. Defined Terms; Constructif):q, All capitalized terms nsed herein withGut... ·definition shall have the meanings given them in the Purchase Agn:ement. This Assignment is subject in its entirety to the ~nns and conditions of the Purchase Agreement. To the extent the terms and conditions herein and in the Purchase Agreement are inconsistent, the terms and conditions of the Purchase Agreement shall Control.

7. Counterparts. This Assignment ma:y be executed in one or more counterparts, all of which, when taken together shall constitute one and the same instrument. 8. Go'l'erning Law, Thls Assignment shall be governed by and construed in accordance with the laws of the State in which the Property :is located.

9. Partial Invalidity. The provisions hereof shall be deemed independent and severoble, and the invalidity or enforceability of any one provision shall not affect the validity ot enforceability of any other pro'Vision hereof.

10. Successors: and Assig]s. This Assignment shall he binding upon and inure to the benefit of Assignor and Assignee and each of their successors and assigns .

.11. Amendments~ Neither this Assignment nor any term, provision or condition hereof may be changed,. amended or modified,. except in a writing signed by Assignor and Assignee.

fSignature Pages to Follow]

. : :·i •.H~"?:. • -•. ·.l·j ~.. \.!;i,t J

RLJ Austin Courtyard 1;10601:!

702 •• ••• ~ '•",;. > ' • ~· ·' ............··, ~. ~~~ . ; ' .. ' ;; . ..

IN WITNESS WHEREOF, Assignor and Assignee have e;;:ecuted this Assignment to be effective as of the date first above written.

ASSIGNOR:

South Ausaix-cuurt, LP, an Indiana limite;d partnership

By: Southairgen Corp., an Indiana corporation, General Partner

... B~: ~ ~q----<_. [_ p__.d______ · - ----·---· .. - ..... . ~nee E. Bumell President

-) :·..

-3-

703 'j-.) ; i: .. ) . IN WITNESS WHEREOF. Assignor and Assignee have executed this Assignraentta be • , effective as offhe date first above written.

ASSIGNEE:

RLJ U ~ C AUSTIN .AlR LESSEE, LP a Delaware limited partnership

By; RLJ U ~ C Austin Air Lessee General Partner, LLC; a Delaware limited liabili1y compa:o:y General Partner

RLJ Aus!ln Courtyard 006014

704 AustiJJ, Texas Courtyard Austfn Airport Property Number .98

Legal Description

Lot 5-D, Block C, nffi .RESUBDMSION' OF LOTS 4 AND 5, BLOCK C, :METRO CENTER SECTION 5, a subdivision in TRAVIS County, Texas, according to the plat thereof recorded under Document Number 199900265 of the Official 'Public Records of TRAVIS County, Texas.

Being also descnood by metes and bounds description prepared by Robert C. Watts; Jr., RegiStered Professional Land Surveyor) State of Texas No. 499 5, of Chaparral Professional Land Surv~ying, Inc., and dated November 15, 2007. as follows: ·

BEGINNING at a 1/2" rob~ wifu cap found £01· -the southeast co= of said Lot 5-D, being· the -------nCJ:fili.east-co~r~gf.I.Gt-6,..Ble~k-G,M~tr-e-Genter-Sectien~ra-sabdtvision~f-'.f-eeeid-in..:V-elum.e--~----··-- 102, Page 177 of the Plat Records of Travis ·county, Texas and also being in the west right-of- way line of :Palma Verde Drive (75 foot right-of-way width);

. THENCE South 68~50'09" Wes~ with the south. line ofLot 5-D· and the north line of said Lot 6, a distance of 479.89 feet to a 1/2" rebar with cap found in the north line of Lot 6, being ~he· southwest corner of Lot 5-D and also being the southeast comer of Lot 5-C, of the said Resuhdivision of Lots 4 and 5, Block C, Metro Center, Section 5:

T:B:mNCE Wfth the west line Of Lot 5-D and the east line of said Lot 5-c, the following three (3) courses:

L North21 1109'32'7 West, a distance of 166.37 feet to a lf2''rebarwi1h cap found;

Z. North 68"5.4'26" East, a distance of39A3 feet to a l/2" tebar with cap found;

3. North21 "08'04"West, a distance o£233,64 feet to a :mag nail fottnd far the northwest corner of Lot 5-D, bemg fue no:ctheast cornet o(tot 5-C and also being in the sciuth' line of Lot 3, Bl~ck C. of sind Metro Center Section 5; ·

TliENCE North 68()49'12" East, with. the north line of Lot 5-D and the south line of said Lot 3, a distance of 240.57 feetto a mag nail found ,.in the west rj.ght-of-way lin.e of Palma Verde Drive, being the northeaSt comer ofLot 5-D and also being the southeast corner of Lot 3;

THENCE South:47"41'57" East, with'the.east line of Lot s:n and the west rlght:.Of-way line of Palma Verde Drive, a distance of 447.12 fee~ to the l'OINT OF BEGINNJNG.

A-1 RLJ Austin Counyard 006015

705 APPENDIX N SUPPLEMENTAL CLARIFICATION OF ASSIGNMENT

1. Whiteco Industries, Inc., ("Seller'') joined by White Lodging Services Corporation (''White Lodging") and other identified Sellers, including South Ausaircourt, L.P., entered into a New Hotels Purchase and Sale Agreement ("PSA") with RLJ Lodging Fund II Acquisitions, LLC ("Purchaser") dated March 16, 2006. Subsequent to the execution of the PSA, Seller, White Lodging, South Ausaircourt, LP and Purchaser entered into a Ninth Amendment to New Hotels Purchase and Sales Agreement ("Ninth Amendment'') dated December 20, 2007.

2. Both the PSA and the Ninth Amendment reference and pertain to, among other things, "Property 98", which is described as "Courtyard Austin Airport, 7809 East Ben White Blvd., Austin, TX 78744.''

3. The definition of "Contracts'' in the PSA "shall mean, with respect to each Property ... (iv) all contracts, agreements (other than subcontracts) and warranties covering the design, development, construction, operations, maintenance and repair of the Property ... "

4. Paragraph 3.l(a) of the PSA contemplates that "[a]t Closing, Sellers or White Lodging shall assign and deliver to Purchaser, pursuant to the terms of Section 4.2(b), true and complete originals or copies of architects agreements and general contracts for the Properties ..."

5. The language "pursuant to the terms of Section 4.2(b)" as contained in Paragraph 3.l(a) of the PSA, and referenced in paragraph 4 above, is a Scrivener's Error and should likely be to "Section 4.1 (c), as there is no "Section 4.2(b)" in the PSA.

6. Paragraph 11.15 ofthe PSA contemplates that:

"Further Assurances: Upon the terms and subject to the conditions hereof, each of the parties hereto agrees to use its commercially reasonable good faith efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the transactions contemplated by this Agreement including, without limitation ... (iii)the execution and delivery of any additional instruments necessary to consummate the transactions contemplated by, and to fully carry out the purposes of, this Agreement, but which are not inconsistent with this Agreement."

7. In order to clarify the (a) Assignment and Assumption of Licenses, Permits and Intangibles, and the (b) Assignment and Assumption of Contracts and Leases, each dated December 20, 2007, from South Ausaircourt, LP as Assignor to RLJ II - C Austin Air Lessee, LP as Assignee, Assignor intended to assign to Assignee the Assignor's interest in the following:

a. The Agreement for Consulting Services between HBC Engineers, Inc. and White Lodging Services Corporation, dated 10/31/00.

602 b. The Assignor's tangible and intangible rights with respect to the Agreement for Consulting Services between HBC Engineers, Inc. and White Lodging Services Corporation, dated 10/3/00, along with all other contracts, work orders or amendments thereto between HBC Engineers, Inc. and White Lodging Services Corporation relating to Property 98, along with all intangibles, including but not limited to causes of actions or claims owned by Assignor against HBC Engineering, Inc.

c. All contracts, oral or written, between White Lodging Services Corporation, and Terracon Consultants, Inc. relating to the Project.

d. The Assignor's tangible and intangible rights with respect to the all contracts, oral or written, between it and Terracon Consultants, Inc. relating to the Project, along with all other contracts, work orders or amendments thereto and with all intangibles, including but not limited to causes of actions or claims owned by Assignor against Terracon.

e. The Standard Form of Agreement Between Ovmer and Architect, AlA Document B 141-1997 Edition, Parts 1 and 2, between White Lodging Services Corporation, lnc.(sic)and Elness Swenson Graham Architects, Inc., dated January 1, 2005.

f. The Assignor's tangible and intangible rights with respect to the Standard Fom1 of Agreement Between Owner and Architect, AlA Document B 141-1997 Edition, Parts 1 and 2, between White Lodging Services Corporation, Inc, (§.!£) and Elness Swenson Graham Architects, Inc., dated January 1, 2005, along with all other contracts, work orders or amendments thereto between Elness Swenson Graham Architects, Inc., and White Lodging Services Corporation, Inc. relating to Property 98, along with all intangibles, including but not limited to causes of actions or claims owned by Assignor against Elness Swenson Graham Architects, Inc.

g. The Standard Form of Agreement between Owner and General Contractor, dated August 17, 2005, between EBCO General Contractor, Ltd., and White Lodging Services (sic), as assigned by White Lodging to Assignor pursuant to that certain Assignment of Contract dated September 19, 2005 by White Lodging with the approval and consent of EBCO General Contractor, Ltd.

h. The Assignor's tangible and intangible rights with respect to the Standard Form of Agreement between Owner and General Contractor, dated August ·17, 2005, between EBCO General Contractor, Ltd., and White Lodging Services ~), as assigned by White Lodging to Assignor pursuant to that certain Assignment of Contract dated September 19, 2005 by White Lodging with the approval and consent of EBCO General Contractor, Ltd., along with all other contracts, work orders or amendments thereto between EBCO General Contractor, Ltd., and White Lodging relating to Property 98, along with all intangibles, including but not limited to causes of actions, fiduciary duties or claims owned by Assignor against EBCO General Contractor, Ltd.

603 8. Assignor executes this document pursuant to Paragraph 11.15 of the PSA in order to fully carry out the purposes of the PSA in a manner which is consistent with the PSA.

Execution

The undersigned signs this document subject to the penalties imposed by law for the submission of a materially false or fraudulent instrument and certifies under penalty of perjury that the undersigned is authorized under the provisions of law governing the entity to execute the filing instrument.

Date: January 16,2014.

SOUTH AUSAIRCOURT, LP

By:

By:.J:E:::::~~~~~~--'­ Carol Ann Bowman, Vice President

Notary

STATE OF INDIANA§ § COUNTY OF LAKE §

This instrument was acknowledged before me this 16th day of January 2014, by Carol Ann Bowman, an individual residing in the county of Porter, as Vice President of Southairgen Corp., General Partner of South Ausaircourt, LP.

MARGUERITE E. DRAKE Porter County ~~ Notar:u ublic State of Indiana My Commission Expires February 26.2017 Marguerite E. Drake Printed Name ofNotary Public

604 APPENDIX O Filed 12 October 1 P4:20 Amalia Rodriguez-Mendoza District Clerk Travis District D-1-GN-1 0-002325 CAUSE NO. D-1-GN-10-002325

RLJ 11-C AUSTIN AIR, LP; RLJ 11-C § IN THE DISTRICT COURT OF AUSTIN AIR LESSEE, LP; AND RLJ § LODGING FUND II ACQUISITIONS, § LLC, § § Plaintiffs/Counter-Defendants, § § ~ § TRAVIS COUNTY, TEXAS § EBCO GENERAL CONTRACTOR, § LTD; EBCO ADVANCED BUILDING § SYSTEM, LTD; EBCO/WARRIOR § MANAGEMENT LLC; ELNESS, § SWENSON, GRAHAM ARCHITECTS, § INC.; MARK G. SWENSON, § INDIVIDUALLY, TERRACON § CONSULTANTS, INC.; TODD E. § SWOBODA, P.E., INDIVIDUALLY; § MBA STRUCTURAL ENGINEERS AND § ANDREW T. MARLIN, P.E. § INDIVIDUALLY, § § Defendants/Counter-Claimants. § 200 TH JUDICIAL DISTRICT

ELNESS, SWENSON, GRAHAM ARCHITECTS, INC. AND MARK G. SWENSON'S SECOND AMENDED ANSWER AND ORIGINAL COUNTERCLAIM FOR DECLARATORY JUDGMENT

TO THE HONORABLE COURT:

CoME NOW, Defendants and Counter-Claimants Elness, Swenson, Graham Architects,

Inc. ("ESG") and Mark G. Swenson ("Swenson" and, together with ESG, collectively,

"Defendants" or "Counter-Claimants") and file and serve this Second Amended Answer and

Original Counterclaim for Declaratory Judgment in response to Plaintiffs' Sixth Amended

Original Petition and, in support thereof, would respectfully show the Court as follows:

ELNESS, SWENSON, GRAHAM ARCHITECTS, INC. AND MARK G. SWENSON'S SECOND AMENDED ANSWER AND ORIGINAL COUNTERCLAIM FOR DECLARATORY JUDGMENT- Page 1 599603.1 4021122

46 I.

SECOND AMENDED ANSWER

A. GENERAL DENIAL

Pursuant to Rule 92 of the Texas Rules of Civil Procedure, Defendants generally deny

each and every, all and singular, the assertions alleged in Plaintiffs' Sixth Amended Original

Petition and any amendments thereto and request that Plaintiffs be required to prove the charges

and allegations against these Defendants by a preponderance of the evidence and/or by clear and

convincing evidence, as required by the Constitution and the Laws of the State of Texas.

B. SPECIFIC DENIAL

Pursuant to Rule 54 of the Texas Rules of Civil Procedure, Defendants specifically deny

that all conditions precedent to the Plaintiffs' right to recover have been performed, have

occurred, or have been waived or excused. In particular, Defendants specifically deny that

Plaintiffs have presented their claims for payment to Defendants or Defendants' duly authorized

agents as required by Section 38.002(2) of the Texas Civil Practice & Remedies Code.

C. VERIFIED DENIALS

Pursuant to Rule 93 of the Texas Rules of Civil Procedure, Defendants make the

following verified denials:

1. Defendants deny the assignment of the contract upon which Plaintiffs' claims

against Defendants are founded. Specifically, Defendants deny that Defendants or Defendants'

authorized representative(s) provided consent to assign the contract at issue to Plaintiffs.

Therefore, any alleged assignment violates the anti-assignment clause of the contract and is null

and void.

ELNESS, SWENSON, GRAHAM ARCHITECTS, INC. AND MARK G. SWENSON'S SECOND AMENDED ANSWER AND ORIGINAL COUNTERCLAIM FOR DECLARATORY JUDGMENT- Page 2 599603.1 4021122

47 2. Defendants deny that Plaintiffs are entitled to recover in the capacity in which

they sue. Defendants did not provide consent to assign the contract upon which Plaintiffs'

claims are founded, and any such assignment is, therefore, made in violation of the anti-

assignment. As such, Plaintiffs are not parties to the contract and lack standing to bring contract

claims against Defendants.

3. Defendants deny that Swenson is liable in the capacity in which he has been sued.

In particular, Swenson is not a signatory or a party to the contract upon which Plaintiffs' claims

against Defendants are founded.

4. Defendants incorporate by reference herein the sworn verification of Paul

Mittendorf£, a Principal and Vice President of Elness, Swenson, Graham Architects, Inc., which

is attached to Defendants' First Amended Answer and Original Counterclaim for Declaratory

Judgment filed with the Court on or about December 30, 2011.

D. AFFIRMATIVE DEFENSES

Pleading in the affirmative, if such IS necessary, Defendants would further show as

follows:

1. Plaintiffs' alleged injuries and damages, if any, resulted, if at all, from conditions

unrelated to any act, omission or conduct of Defendants.

2. Plaintiffs' alleged injuries and damages, if any, were caused, if at all, in whole or

m part by the acts or omissions of others for whose conduct Defendants are not legally

responsible.

3. At all times material to Plaintiffs' allegations, Defendants' conduct conformed to

the applicable standard of care.

4. Plaintiffs' tort claims are barred in whole or in part, by the economic loss rule.

ELNESS, SWENSON, GRAHAM ARCHITECTS, INC. AND MARK G. SWENSON'S SECOND AMENDED ANSWER AND ORIGINAL COUNTERCLAIM FOR DECLARATORY JUDGMENT- Page 3 599603.1 4021122

48 5. Alternatively, if the economic loss rule does not completely bar all of Plaintiffs'

tort claims, then, pursuant to Chapter 33 of the Texas Civil Practice and Remedies Code,

Defendants are entitled to a credit for any settlement Plaintiffs receive from any other person or

entity. If Plaintiffs settle with any other person or entity, then Defendants reserve the right to

make a written election of credit for settlement under §33.014 of the Texas Civil Practice and

Remedies Code.

6. Alternatively, if the economic loss rule does not completely bar all of Plaintiffs'

tort claims, then, Plaintiffs' alleged injuries and damages, if any, were caused, if at all, in whole

or in part, by Plaintiffs' own negligence. Plaintiffs are wholly barred from recovery to the extent

the finder-of-fact determines Plaintiffs' comparative responsibility is 50% or greater, and, if

Plaintiffs' comparative responsibility is less than 50%, any recovery must be reduced by

Plaintiffs' percentage of responsibility determined by the finder-of-fact, in accordance with

Chapter 33 of the Texas Civil Practice & Remedies Code.

7. Plaintiffs cannot recover for any amount that could have been avoided by their

exercise of reasonable care.

8. Plaintiffs' claims are barred, in whole or in part, by Plaintiffs' failure to mitigate

any alleged damages.

9. Plaintiffs' alleged injuries and damages, if any, resulted, if at all, from

independent, unforeseeable, intervening and/or superseding causes. Any alleged action or

omission on the part of Defendants was not the proximate cause, producing cause, or cause-in-

fact ofPlaintiffs' alleged injuries or damages, if any.

ELNESS, SWENSON, GRAHAM ARCHITECTS, INC. AND MARK G. SWENSON'S SECOND AMENDED ANSWER AND ORIGINAL COUNTERCLAIM FOR DECLARATORY JUDGMENT- Page 4 599603.1 4021122

49 10. Defendants assert any and all defenses and seek any and all relief to which

Defendants may be entitled in accordance with and pursuant to Chapter 150 of the Texas Civil

Practice and Remedies Code.

11. Plaintiffs lack standing to sue on and are not parties to the contract on which

Plaintiffs' claims against Defendants are founded. Assignment of the contract to Plaintiffs was

made without consent ofDefendants, in violation of the anti-assignment clause of the contract.

12. Plaintiffs' non-contract claims are barred by the appropriate statute oflimitations.

13. Plaintiffs' non-contract claims, including claims for equitable subrogation, are

barred by the economic loss doctrine.

14. Plaintiffs' recovery, if any, is limited to direct contract damages, if any, pursuant

to the waiver of consequential damages clause in the contract upon which Plaintiffs' claims

against Defendants are founded. More specifically, Plaintiffs' claims for current and future lost

revenue, profits and diminution in value are barred by the consequential damages clause of the

contract.

15. Plaintiffs' claims are barred against Defendants because Plaintiffs purchased the

building in question "as is."

16. Defendants reserve the right to amend or supplement with any additional

affirmative defenses or pleas of avoidance to which Defendants may be entitled.

II.

COUNTERCLAIM FOR DECLARATORY JUDGMENT

A. INTRODUCTION

1. Now as Counter-Claimants, ESG and Swenson bring this action pursuant to TEX.

Crv. PRAc. & REM. CoDE§ 37.001, et. seq., the Uniform Declaratory Judgments Act, and seek a

ELNESS, SWENSON, GRAHAM ARCHITECTS, INC. AND MARK G. SWENSON'S SECOND AMENDED ANSWER AND ORIGINAL COUNTERCLAIM FOR DECLARATORY JUDGMENT- Page 5 599603.1 4021122

50 declaration from the Court that RLJ 11-C Austin Air, LP; RLJ 11-C Austin Air Lessee, LP; and

RLJ Lodging Fund II Acquisitions, LLC (collectively, "Counter-Defendants") may not recover

contract damages under the contract at issue in this case.

2. As provided for by Chapter 37 of the Texas Civil Practice and Remedies Code,

Counter-Claimants seek the following declarations from the Court:

a. That the "Anti-Assignment" clause of the contract IS valid, enforceable and

applies to Counter-Plaintiffs, making any ostensible assignment of the contract, in

violation of the Anti-Assignment clause, null and void and of no effect;

b. That the "Statute of Limitations Accrual" clause of the contract is valid and

enforceable and, to the effect that a party could enforce the contract against

Counter-Claimants, such Statute of Limitations Accrual clause establishes the

date upon which any cause of action against Counter-Claimants accrues, i.e., the

date that Counter-Claimants' services were substantially completed, which such

date time-bars all of Counter-Defendants' causes of action with a two-year

limitations period;

c. That the "Waiver of Consequential Damages" clause of the Contract is valid and

enforceable and, to the effect that a party could enforce the contract against

Counter-Claimants, such Waiver of Consequential Damages clause bars Counter-

Defendants from recovering any consequential damages from Counter-Claimants;

and

d. That Swenson was not a signatory or a party to the contract at issue here and, as

such, cannot be liable to the Counter-Defendants under the contract.

ELNESS, SWENSON, GRAHAM ARCHITECTS, INC. AND MARK G. SWENSON'S SECOND AMENDED ANSWER AND ORIGINAL COUNTERCLAIM FOR DECLARATORY JUDGMENT- Page 6 599603.1 4021122

51 B. DISCOVERY CONTROL PLAN

Discovery in this action is intended to be conducted under a Level 3 Discovery Control

Order pursuant to Texas Rule of Civil Procedure 190.3.

C. PARTIES

1. ESG is a Minnesota corporation that is authorized to do business in Texas. ESG

has made an appearance in this matter.

2. Swenson is an individual who is a citizen of Minnesota and who has already

appeared in this lawsuit.

3. RLJ 11-C Austin Air, LP ("RLJ 11-C Austin Air") is a Delaware Limited Liability

Company that is authorized to do business in Texas. RLJ 11-C Austin Air has already appeared

in this matter.

4. RLJ 11-C Austin Air Lessee, LP ("RLJ 11-C Austin Air Lessee") is a Delaware

Limited Partnership that is authorized to do business in Texas. RLJ 11-C Austin Air Lessee has

already made an appearance in this matter.

5. RLJ Lodging Fund II Acquisitions, LLC ("RLJ Lodging") is a Delaware Limited

Liability Company that is, upon information and belief, authorized to do business in Texas. RLJ

Lodging has already appeared in this matter.

D. JURISDICTION AND VENUE

1. The subject matter of this declaratory judgment action is within the jurisdiction of

this Court and is authorized pursuant to TEX. Crv. PRAc. & REM. CoDE§ 37.003.

2. Pursuant to section 15.062(a) of the Texas Civil Practice and Remedies Code,

venue is proper in Travis County, Texas.

ELNESS, SWENSON, GRAHAM ARCHITECTS, INC. AND MARK G. SWENSON'S SECOND AMENDED ANSWER AND ORIGINAL COUNTERCLAIM FOR DECLARATORY JUDGMENT- Page 7 599603.1 4021122

52 E. FACTUALBACKGROUND

1. On or about January 1, 2005, White Lodging Services Corporation, Inc. ("White

Lodging") and ESG entered into an agreement for architect services, as set forth in the following

contracts: (i) AlA Document B141- 1997 Part 1: Standard Form of Agreement Between Owner

and Architect with Standard Form of Architect's Services (the "Contract - 1997 Part 1"),

attached hereto as Exhibit "1;" and (ii) AlA Document B141 - 1997 Part 2: Standard Form of

Architect's Services: Design and Contract Administration (the "Contract - 1997 Part 2"),

attached hereto as Exhibit "2."

2. The Contract - 1997 Part 1 and the Contract - 1997 Part 2 (collectively, the

"Contract") were both executed on March 30, 2005. The Contract was not signed by Swenson in

either his individual or representative capacity.

3. Section 1.3.7.9 of the Contract contains an Anti-Assignment clause, wherein

"[n]either [White Lodging] nor [ESG] shall assign this Agreement without the written consent of

the other, except that [White Lodging] may assign this Agreement to an institutional lender

providing financing on the Project."

4. Section 1.3.6 of the Contract contains a Waiver of Consequential Damages clause,

under which both ESG and White Lodging "waive consequential damages for claims, disputes,

or other matters in question arising out of or relating to this [Contract]."

5. Section 1.3.7.3 of the Contract contains a clause commonly known as a "Statute

of Limitations Accrual" clause, which provides the method to determine when a cause of action

accrues for the purpose of starting the statute of limitations. Specifically, section 1.3.7.3 reads as

follows:

ELNESS, SWENSON, GRAHAM ARCHITECTS, INC. AND MARK G. SWENSON'S SECOND AMENDED ANSWER AND ORIGINAL COUNTERCLAIM FOR DECLARATORY JUDGMENT- Page 8 599603.1 4021122

53 Causes of action between the parties to this Agreement pertaining to acts or failures to act shall be deemed to have accrued and the applicable statute of limitations shall commence to run not later than either the date of Substantial Completion for acts or failures to act occurring prior to Substantial Completion or the date of issuance of the final Certificate for Payment for acts or failures to act occurring after Substantial Completion. In no event shall such statute of limitations commence to run any later than the date when the Architect's services are substantially completed.

(Emphasis added).

6. On or about March 16, 2006 White Lodging, et al. and Counter-Defendants

entered into an agreement entitled New Hotels Purchase and Sale Agreement by and between

Whiteco Industries, Inc. and RLJ Lodging Fund II Acquisitions, LLC, (the "New Hotels Purchase

and Sale Agreement"), through which Counter-Defendants claim that the Contract was assigned

to them.

7. ESG did not consent to an assignment of the Contract from White Lodging to

Counter-Defendants, allegedly effectuated through the New Hotels Purchase and Sale

Agreement.

8. ESG's services were substantially complete before the date the Certificate of

Occupancy was issued for the Project, which was on October 12, 2006. Therefore, any causes of

action against Counter-Claimants accrued, if at all, no later than October 12, 2006.

9. Counter-Defendants initiated this lawsuit and filed Plaintiffs' Original Petition

and Request for Disclosure on July 7, 2010. Therefore, the negligence, negligent

misrepresentation and equitable subrogation causes of action asserted by Counter-Defendants,

each of which are governed by a two-year limitations period, are time-barred by the statute of

limitations.

ELNESS, SWENSON, GRAHAM ARCHITECTS, INC. AND MARK G. SWENSON'S SECOND AMENDED ANSWER AND ORIGINAL COUNTERCLAIM FOR DECLARATORY JUDGMENT- Page 9 599603.1 4021122

54 10. Counter-Defendants seek recovery from Counter-Claimants for, among other

things, diminution in the Project's value, lost revenue and other consequential damages, which

such recovery is barred by the Waiver of Consequential Damages clause in the Contract.

F. CAUSE OF ACTION: APPLICATION FOR DECLARATORY RELIEF.

1. Counter-Claimants incorporate by reference paragraphs II.A.1 through and

including II.E.1 0 above as if fully set forth verbatim herein.

2. There exists an actual and justiciable controversy between Counter-Claimants and

Counter-Defendants herein, within the jurisdiction of this Court, and involving rights, duties,

legal obligations and relations of the parties under the Contract at issue.

3. Counter-Claimants petition this Court, pursuant to Chapter 37 of the Texas Civil

Practice and Remedies Code, to declare that:

a. the Anti-Assignment clause of the Contract is valid, enforceable and applies to

Counter-Plaintiffs, making the assignment of the Contract, which was in violation

of the Anti-Assignment clause, null and void and of no effect;

b. the Statute of Limitations Accrual clause of the Contract is valid and enforceable

and establishes the date upon which any cause of action against ESG accrued was

on or before October 12, 2006, which is the latest date by which ESGs' services

were substantially completed;

c. that all of Counter-Defendants' causes of action against ESG with a two-year

limitations period are time-barred;

ELNESS, SWENSON, GRAHAM ARCHITECTS, INC. AND MARK G. SWENSON'S SECOND AMENDED ANSWER AND ORIGINAL COUNTERCLAIM FOR DECLARATORY JUDGMENT- Page 10 599603.1 4021122

55 d. the Waiver of Consequential Damages clause of the Contract is valid and

enforceable and bars Counter-Defendants from recovering any consequential

damages from Counter-Claimants; and

e. Swenson was not a signatory or a party to the Contract and cannot be liable to the

Counter-Defendants under such Contract.

G. COSTS AND ATTORNEYS' FEES

Counter-Claimants have retained the undersigned law firm to represent them in this

action and have agreed to pay the firm all costs and reasonable and necessary attorneys' fees

incurred in this matter. An award of costs and reasonable and necessary attorney's fees to

Counter-Claimants is equitable and just and, therefore, authorized by Chapter 37 of the Texas

Civil Practice and Remedies Code.

III.

PRAYER

WHEREFORE, PREMISES CONSIDERED, Defendants and Counter-Claimants Elness,

Swenson, Graham Architects, Inc. and Mark G. Swenson respectfully request that Plaintiffs and

Counter-Defendants RLJ 11-C Austin Air, LP; RLJ 11-C Austin Air Lessee, LP; and RLJ Lodging

Fund II Acquisitions, LLC be cited to appear and answer herein and that, on final hearing, the

Court enter an Order as follows:

a. That Plaintiffs and Counter-Defendants take nothing by their claims;

b. A declaration that the assignment of the Contract to Plaintiffs and Counter-

Defendants was made in violation of the Anti-Assignment clause, is null and void

ELNESS, SWENSON, GRAHAM ARCHITECTS, INC. AND MARK G. SWENSON'S SECOND AMENDED ANSWER AND ORIGINAL COUNTERCLAIM FOR DECLARATORY JUDGMENT- Page 11 599603.1 4021122

56 and of no effect, and Defendants and Counter-Claimants are not liable to

Plaintiffs and Counter-Defendants under such Contract;

c. A declaration that Plaintiffs and Counter-Defendants' claims against ESG are

time-barred, pursuant to the Statute of Limitations Accrual clause of the Contract;

d. A declaration that Swenson was not a signatory or party to the Contract and

cannot be liable to Plaintiffs and Counter-Defendants under the Contract;

e. That Counter-Claimants be awarded their costs and all reasonable and necessary

attorneys' fees; and

f. All such other and further relief, both general and special, at law or in equity, to

which Defendants and Counter-Claimants have shown themselves to be justly

entitled.

ELNESS, SWENSON, GRAHAM ARCHITECTS, INC. AND MARK G. SWENSON'S SECOND AMENDED ANSWER AND ORIGINAL COUNTERCLAIM FOR DECLARATORY JUDGMENT- Page 12 599603.1 4021122

57 Respectfully submitted,

MACDONALD DEVIN, P.C.

By: Gregory N. Ziegler State BarNo. 00791985 gziegler@macdonalddevin.com Russell E. Clinage State Bar No. 00790473 rclinage@macdonal ddevin. com

3800 Renaissance Tower 1201 Elm Street Dallas, Texas 75270-2130 (214) 744-3300 Telephone (214) 747-0942 Facsimile

ATTORNEYSFORDEFENDANTSAND COUNTER-CLAIMANTS ELNESS, SWENSON, GRAHAM ARCHITECTS, INC. AND MARK G. SWENSON

CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of the foregoing document has been served

upon all counsel of record in accordance with the Texas Rules of Civil Procedure, on this 1st day

of October 2012.

Gregory N. Ziegler

ELNESS, SWENSON, GRAHAM ARCHITECTS, INC. AND MARK G. SWENSON'S SECOND AMENDED ANSWER AND ORIGINAL COUNTERCLAIM FOR DECLARATORY JUDGMENT- Page 13 599603.1 4021122

58 (S.;

I .AlA Document B141m -1997 Part 1 $11ndard Form of Agreement Between Owner and Architect wilh·Standarrl Form ofArohitect's Services

TABLE OF ARTICLES

1~ INmnALINF~~llON RE$PQNSIBJ!#.li=S OF THE PARTIES ADDmOHS AND DELETIONS; lba IIUihor at thll document hu ~ !.fio:CONDlJIONS .. .. . . addDd !nlcnnatlen noeclod ferIa ccmplllllon. Thtt aulllelt may also SCOPE(),fiS!ftvtCeSAND OTHER SPECIAL TERMS AND CONDmONS have nMaad 1M !lilt ollhe . r .;·" Q'fg!nal AlA atandallllonn. An 1.5. c'O~ENSAT~df.i-. Alltllon~IU!d o.letloM R.ptJtt . . -~~· lhal nctas adcted lnlcnnatlon a Aoiet.mNT ~do u·~(tftc Pliat doy or Jaouary ia tim year Two Thousaod Five. waD DIIRMiions ID lhe alll1dan:t (In JNrdJ, lndlctJtll dar...monrll lllld ye11r) lcrm Ialit II avallablit fl1lm 1M aulhcr lll1d ai1CIIIId bo lll'lfewm. BETWEEN the Architecc'r.cllel)t idcatifled 1111 the Owner: A VltlllcaJ In& In lhe l&lllllllrflt of (NiiiM, tJddrrtn Dlld ot#itsr.}liformlllion) 1? "'? /:~ {. IIIIo docl.mont lndlcatn Mloro ' f\ (!_'I j::. 0 c;... 't 0 S tile av111ot has adclcd noconiiY Whlta Lodglug Setvicei qHponulon, r.c. lnfOI'IIIA!Ian llld wllere lhe llllhor

I 1000 But 80tb Place. Spl.~ SOO North Merril9ille, IN 46410.S666 , 'P .1 !>... 0,... ~ 't- c:;, 1 1 F~ """ has addad to Of delaCtd from 118 origlml AlA llxt. 0-,z:.lcc Co~r. 2../,/o.rrno«xvner~tva~ legal consequences. llld the Arcbire.ct: • ~'{ 1!.../o ,.[ .\. ~IL Comuaalon Mlh lUI at=rnoy (Nunw, tZddnu lllld Olh.~r hrfonntiflon) II OI\CIDUiaOIId wftiiiOtJIOCI Ill ~Alt..~ bA-T6.Ja lb ~ 01 madlfcatlon. Blaeu SweJUOQ Osabam ~ltects, lilc. 500 WuhlllgLOn Awooe SQUib MiDncopoUs.MN S54l5 Z/'2.~/o~ :Slot lo-s: .3/z,r / os For the followJag Ptojecc· · (Include dd41led dqcrll!f!,.'f§}'[.r,_'('jt!cr) . ~ ~ ........ r .. Dcsiln; 4o«:u~on a!il~ conllaCt admlilhtradoa for 1he COIIStnlclion of a l Court)'d.llyltfardott iu Auscia. Tex83. Tho Owner IU!d Arehltcc:t agree as followa:

SCA'f\ff\JED SFP 2 2 2007

EXHIBIT ESG001454 I 59 ARTICLE 1.1 INITIAL INFORMATION .§ 1.1~1 Thi.1 Agreemeat 11 based on the foltowillg mronnadon lllld a.sawnplfona. (Nor. ih#dLrposldonjor lila following /~1111 b)' ln#rtllls the nquutd bifonnatfon or a stotemSII such as •not -apPJlctll!lir," "un.b!own til time of exc~:utlrm" or "ro bet.t.rmlnr4 ~tar by mutual agrei!IJIDIL ") § 1.1.2 PROJECT PARAMETERS § 1.1.2.1 The objecdve or usc is: (ltrlftti/'J or ducribfl, if approprillle, proposed 1114 or goals.)

A COIDiyard by Mmfou • a limited-service, ptototyplcal hotel

§ 1.1.2.2 The physical p~ten are: (ltknlih o;. ducrlbe. Ifqp1't1prilzle. ~~ location, dllllfiiiSlons, or otbr pt~rllnent ltifomr.allDn, .ruch as gfiDtuhnl&tll rtporU about 1htt site:)

§ 1.1.2.3 The Owaet'a Program Is: (ldlntt.fy docummtmion or &tllltl ths 1NJ11Mr in whit:h the progi'U1fl wiU btl diVtlloped.)

The hotel program calls .for a five-stoty building. The project will conlaia 148 guestrooms and die olher prototypical Courtyard Hci~l ~oas - a lobby/lounge, cliDiug..ldtcllea, a recepdon desk witb saadriea display uea and ofliul. meeting space. s'llrimmins pool and whirlpool, exeltise room, bsct-of-bo~~~e storap,lauucky, mecbaulcill and electrical spaces IIDd a guestlauadry &or. Futthcc dcfiDitiou or the ProiCGt Program is COI:IIaincd In Elaess Sweascm ~An:blrects' PmposalleaerdaredNovember 12.2004, nMaedJauuy 21,2004 altiiCbed u "Bxhibit A" with further clarifitatioD colllaiacd In BIDess Sweosoa Graham An:hilectl' schematic dedp documears dalecl111111111'Y 28, 200S. wbicb ire attached by refen~oce as -sxbiblt B.•

§ 1.1.2.4 The legal piiJ!IlDlCiei'S are: (ld6111ifJ pert/Milt lt!Bal information, incbulins. ifoppropriQu, lluul SU¥WyS and lt~gal duaiptiotu and rutrlctlotu ofthe sile.) L:pJ Dc:lcripdon ofPEopeny: Lot 5-D, Block C. RBSUBDIVJ8JON OFLOl'S 4 AND S, BLOCK C. METRO CBNTRB SEC110N S,11 subdivision Jn Austin, Travis Coouty, Texas, accordiDg to the map or plat ~~=n:or n:c:cmkd as Docummt t999002GS in lhe Plats Rc:c:ords of'l'111vfs County, Tens.

§ 1.1.2.5 Tbc'liDancial paliiJDI:(I:tll ~n u roUows . •1 .AmoUnt of ~.Owner's ovetaU budget for the Project, includiai the Mhifcc:t'a compeiiSatiou. b: $48,000 oil' per room or S/,000,000, r'1 .2 Amcunt of the pwiicrs budget for !he Cou or lhe Wod:, acludillg de Archftect's compeosalion, b: \~ unbowil-at time-of execuliqn or Ibis Agrccmcut ~ "\

§ 1.1.2.6 The lime panur=tcn ~= (Irlmlib. if appropriaie, milestone datu, duralions orfan rmclc scheduling.} ,, The following MjJestoac Dares ~ lhe same as !hose listed illl!htess Swt:~~son GraMm Aldllrects' Proposalleucr daled November 12. 2004, revised January 21, 2004 attached as "Bxbbbit A. • and herein rcpiOduccd:

Jamwy 28, 200S 3K Design Documents Chcclc Set March 11, 2~ • 7596 Design Documents Check Set Aprii2S, 20QS 9~ Contract Docu1111111ts; FoWtdalioa Buildillg Permit

§1.1.2.7Tbe proposed procureme~~tordelivay melhod for the Project is: (ldmlif:y mnlwrl such tU ct)mpedtive bltl. negozlatlll COIIlTrZCt. or ct)IUinU:tlcln IIIIIMB611111111.)

SEP 22 2007

ESGDD1455

60 Negotlaled Connct.

§1.1.2.8 Otbu parameters are: (IJlen.tifyqet:ial dulnu:tulslic8 or ntw ofthe PttJj«t sud! tU Drl1'fiY, Dl'llronnutnt41 or lrmorir: p~ei'WIIitm ·nipzinm&Ml.r.J

§ 1.1.3 PROJECT TEAM S1.1.3..1 The Owner's Dcaigaalcd Rep.reaealallvc is: (lbl1111nw, mldren t11rd oilier illfomwum.)

Trezat Bubcr Whi1D Lodglas Scrvk:cG CorpomioD, IDe. 1000 But 80th Plaee, Suite .500 Nonh Menilrillc. IN 46410..56~

§ j.U.2 The pecsoJIS or cntllies, in addltioAIO tho Owacr's Dclianalcd ~ who are required 10 nwicw theAtchlrect'ssubiniuals.lcl the Owner ue: (lilt-. a&Jrus and oilier ill/rlmuJtitm.J

Marriou International MarriCIU Dme WasblllfOn, D.C. 20058 § 1.1.3.31bc Owner's olhcr consultanla and conlniCIOn an:: (lbr discipline and, ({known, ldrnrify thmt by nam• and addnu.)

CMLENGINEBR: Griffin Engineering Group, IDe. 11711 North Lamar Boulevard Aasdn, TX781.53

§ 1.1.3.4 The Archllcct'a Dcaignatcd Ri:p.lesentativc is: (Un nan", addnu arid othtn" itifomtJJtlon.)

Mark Swensan, AlA Paul M!Ueudorff, AlA JlllllCI Timm, AlA J!.hless Swenson Grabam.Archlrecu, Inc, 500 Washiog!o'n Avenue ~9Uih Milinompolls, MN SS41S'

i 1.1.3.5 Tba CODIU~.~Ia retained at the An:hitecl's OXpCDIO 11n1: (Ust dl.Jclpllne Gnd. if known, ldmtifl th4m by name and addrer~.) STRUcrtJRAL BNOINEERlNG: Kollh Owcm, P.B. l4irli~ .Brilfgea !f. Assoc:ialel, Inc. '31520'Bigbtll AVeliuc South, Suire 1J0 Blnnfngham, AL 3!1222

SEP 22 2007

ESG001456

61 MECHANICAL, ELECTRICAL ENOINEEIUNO: Laaylllldsoy, P.B. Lill

§ 1.1.4 Other irnponaot iDilial infomwioa is:

§ 1.1.5 Wbea tbe senices wulu lhls Ageemcat illclwle conii'ICC lldmlllistndoa ICrVIcct, the Oaleral Condidcms of the ColllnCt for Cona11uctfoa siWJ be the eclltloo or AlA Doc:umeDt A20l cum:at Ill of the dale or Chis Asrecmcat. orufoDows:

§1.1.S1'hoiiiC~ ~laincd In this A11icle 1.1 may be I'CI1SOJiably n:llcd upoa by tbe <>-aud AzdWccc ID cleCermiDiDglhe Arcllltect's ~n. Both partie~, howclw, ncogalr.e lhat such lafonnatioa nay cba.agc aud, ia 1batC\'all, the Owa!=z:aadibe An:h!tcc:t shall u.egotlale 1ppropriaro lldjustmca1a iD ac:hcdala, compeualioa and Cha.atoiD Services in iicoonbace withSeclioa 1.3.3.

ARTICLE 1.2 RESPONSmiunEs.OF THE PARTIES § 1~1 'lbe Owaer and :tbe...-Ardlltect llbalJ c:ooperatc with oae IIIIOChcr ro Cu1fi1l their respedive obliaalfons wufer Ibis ~ Bodl par1les sbiill emleavor ro malnlain sood wotldDg relatiauhipa amoq all membcn of tbe Project leam.

§1.2.20WNER § 1.2.2.1Ulllcas olhcnvisc provided WJdcr this A&rccmcnt, lbc OWJU:r sball provide Cull faformatloa 1a a dmcly l!llllllerregariliag ~~~ for IJid fi~ODS OD tbo Project. 'Jbe Owner Shall fllnllsb to lbc Archlll:d, wlthJa 15 days afta" reCeipt ~a wriUCD rcqucac, lnfonnadoa acceaary and rclevaut for the A.rdlirect ro evaiDale, pvc: notice of or eafon:c Ucn rights.

§ 1.2.U The OWDCI" shall periodically updale the budset for the Project, IDc:ludlDJihat pcrtlou aUocaed Cor tho Cost of tho Wort.·1be Owiacr &baD nOc-dgnlficaatly bcralc orclccrwc lho ovaaU bud&do the portioD ofllle budget allocated fW ibc ~of the Woik, or coatlageades lacluded 1a tbo ovenll budaet or a potdoa or tbo budget, Without tho apcemazt of the Architect to a comspoftdlns chaap lathe Project scopo and qaallty.

§ 1.2.2.3 The Qwua-'a DeaJpated R.epaellladve ldcadfied Ia Seclloa 1.1.3 &haJl be IUiborized ta act Oil the Owau'a behaJf with respect tp the Project. Tbc Owner or lhe Ow11cr'a Dcalpaled RcpreaentDIJve shall render decbloiiS iD a dmely"JJWU!eL" prrtalnlng ro clocumcata lllbmltted by the Architect iD order to avoid aareasoaahlo delay in the orderly and l!CqUCIItial progms of the Architect's aervlc:es.

§ 1~ Tbe OWDU sbal~ ~~~ !he services of couullallfl ollw" thaD those dellpa1ed In Secdoa 1.1.3 or aulhclriu · lhe ·~tO futlli5h tbmi as a Chqe ia Services when such IClYiCZS are requested by the Aldlltcc:r llld &Je reuonablY.t#;luiRd. ~ tho scopo or the Project. §1.2.2.5 Unlt:ssiltbenrise provided In Ibis Aareement. the Owner shall fllraiah teats,laapcctlons and repona e.qu1red by law or the Conlract Doc:umenu. such as strucllual, mechanical, ud chemical teats. tests for air aud water pollutl011, end ce.ts for buardous marerlals.

§1.7,2.6 Tho Owner shall t"umlsb aU legal,lnsutllllcc IUld aCCOUDiiogsetViCCI, includlag auditing services, that may ~ reuohably..necessary at any time Cor the Projecr to mccr the Owner' a I!Ceds and interests.

§ 1.2.2.7 Tho Owaer aball provide prompt wriUCII oodcc to the Architect If the Owner becomes aware of aay fault or deled In the Project, including any mora, omissions or lncoadsiOIIC!cs 1a thc Architect's Insttumcols of Service.

N4Doclllnenl8141"'-11197 Plllt t.C.pyrlgl!l 01817, 18211,1848. 18SJ,1M,IIISII,IEH11,11Ml3,1008, 111117, 11170, 1tr14,1tr17,18871111111811711y,.._ Amcllcan lnollUt ~ An:hlloella. All rlstllta nsaomtd. W~HIH011bla AJfli Docllmmt 18 pn~t.cllld lly u.a. CDprfllllll Llw ancllnlllrnatlllnlll TMaltes. lln&utlladDd raprociiiOilon or cllllrlblltlan oltl\lo AI_. Documon~ onnr parelan olll, may mullin M\IDIO cfvtiiiiiCI almlllll ponallln, and Will Ill 4

No.tOOOIS«llS.): uur MaiM: s CAN NED JHOtCcutld to the maximum alent s-llble under lho In'. 'IIIIa doculnont wu ~by NA 10ftw1111t aa 14:32:11011 01112&'200S under Onler Mic:h aplrN an llftll/li*I08, and Ill nat lot rOMit. (38&MS4002)

SEP 22 2007

ESG001457

62 § 1.2.3 ARCHITECT 5 t2,3.11bo savfcea pedotmed by the AR:hilect, Alchitcct's employecs aad Arcbj~ec:t's ~~~ abal1 be u e!Nmcmtcd iD Aatielo 1.4. §·1.2.3.21bo Atchltect's services shall be performed 11 cxpcdilloDIIy as II coasisteat with profCISioaal sJdU and care • ' " orderly proBRSS of lhc Project. Tho Architect ablll submit ror die Owner"a approval a schedule for lhe ~ of the An:bitcct's services wbicb iDirillly sball be ccmsbtc11t with lhe time periods established iD Scclion 1.1.2.6 and wh1cb shall be adjusted, it necawy, as lbc Project pzoceeda. This schedule aball iacludo aDOWllllCCS for pcriodl of time rcquin:d tor the Owacr's review, for lhc pc:donDaqco oldie Ovmcr's c:oiiS\1llaJita, ud filr appto'lll or submilalalls by aulhcrltlcs havhlg jurisdlceion over lhc Project. 1'imo limita Cltablisbed by Ibis sclu:dule approved by c= Owner shall aot, except ror JUSallablc eausc. be eKeedcd by lho Ard!icoct or OWJW.

su.u ne Archilcct'l Dcalguted Ropreac.utalive ida!tificd iD Section 1.1.3 shaD be authorized to act OD lhc Arch!II:Cl's bchall with respect ID die ProjCCL

au.u Tho Arehlcect shall mabitailllho eollfideudality of lolinm:dioo specificully dcaiJruucd ss coofidcnlial by the Owuu; ua.lc:ss wilbholditJ& sucllillfonnalion would vlolaU: the law, create tbc risk of slpiftcalu harm to lhe public ot provoot tho Atcbl~ from oatablbhiDg a c:laim or dctimac iD 1111 adjudicatory pmc:eecliDg. Tho ArdUtect sball require of tho ArChlteot'i ~llltaots sltnllar agreeme~~ts to maiolain tile c:ollfidenliality or illfonnatioo speclficslly dcs.lgosltd aa confidait#al by die Owner.

§ 1.2.U Bxccpt with tlic.Owner's bowledgo lllld C011Sent, tile An:hltect shall not cugaso in any ac:tivity, or accept 1111y employment, lo~:or· c:ontribulioo that would reasonably appear to compromise the Archlrect'll professional judgment wilb rupoct,~tbis Project.

§ 1.2.3.6 Tho Arehltoct.ablill rmow l11ws, c:odcs,lllld regulstloas applicable to the ~t's services. 11m Archilect shall respond In die design of tho Project to requirements imposed by govemmontal autbodtlos havbagjurisdlctlOll over the Project.

§ 1.2.3.7 The Aldllrcc:t·lbsll be eotided to rely oo lho acewaey and complc:ta~oss of scMc:os and informalioo fumishcd by the Owno,r;.Jbo Archltec:l shaD provide prompt wrlttc11 notice to the Owner if lbe Archllcct becomes aware of~ erron, o~slona or iacOIIIIiltcnclos in such services or lofol'UIIItion.

ARilCLE 1.3 TERMS AND CONDmONs § 1.3.1 COST OF THE WORK § 1.3.1.1 'nlo Celli at tht Work shall be the toaaJ coat or, to the oxteatlbc Project is not compldcd, the osdmated cost to lbo Owner of all olomcol5 ~f~-~Jcet designed or specified by tho .AtchitccL •• • 0

51.3.1.2 Tbc Celli of tho Wait siii"llii!Ciodo tho coat at current market ndcs of labor aDd maiCI'Ials fumlshcd by lho 0\Wet IIIII equiplllODt dcdped, spoeified. selected or specially provided far by the Aadd1ect, iJicludina the costs of liiiDIIgeiiiCOt OC supetvisloo cit"C011Slr11Ction ot lastalladoo provided by a sepanilO c:oiiiUUCtloo maDaF Gr contractor, plus a rusooablc aDowa.acc for lbe.lt ovahead and profit. Jn additi011, a reasoublc allowance ror contiJI&ellcles lball bo ~~lcet coodld0111atlho time ofblddiog and for changes lo tbe Wort. §1.3.1J Tbo QoiC o~the Wort docs DOt illcludc tho compomatiOD of the An:hica:t and tho An:bicoct's CODSUIIanu, diocosts of the ~ ~bts-of·way and fioandns or oilier coats tbat 1110 tbe rospousibility of tho Owoer. § 1.3.21HSTRUMENTS OF SERVICE § i.!+1-.J)ra~ spedtlcadoos and other documcats, locludiag Chose in dec110Dic form, )lleplml by lho Arcbiloct llld the'~s c:olllllltuta an: Insuuments or Service fot usc solely with respect to dlls Project. The Archihlct IUid tbe An:hi~Kt's c:onsultaots shall bo dccmccl 1M authors and owucn of their I'Cipcc:li\'0 IDstruDICIIIS of Servlco IIIII aball itfaln aU common law, statutory and other reserved rights, ii!C!uding copyripta. § 1.3.2.2 Upon oxccutlon of Chis Agreement, the Archll£ct paulS to lhc Owner a noooxcluslvc liccnac to reproduce lho Arc:bitcct's Instruments of Service solely for purposes of conslnlcting, using and maiotaloiog the Projoet, provided that the Owner shall eomply with all obUgstloos, Including prompt paymeot of aD sums wbon due. under this Apmeat. Tho Architect shall obtalo similar IIOilOXCiuslvo llcensoa from tho Arc:bicect•s c:onsultuta consislenl

SEP 22 2007

ESG001458

63 wilh this Agreemeul Any taminacioo of lhia Aarccmaat prior to completion of the Projecc sballlemllDIIIC thla ~ O_pou aucll rermloatlou, tbe Owacr sbaU I'D&aln li'om ma1:lng fWtbc:l' repnlductlou oflnltluiiiMII of Service lllld eballfttlml to the Alcbllect within seVI:I1 days of flmllnadoa all odaloalaud reprodac:d0111 In the Owacr's pci;~~ or conlrol. H ud upon the dste tho Amdtzcl illdJIIdaed la default oflhls Apemcnl, the fCII'IIJOing Ucense aball be dcelned letmluat.ed ud Rplaced by a ICICODd. oonexclusive lll:eme petmln.lag the OWDCr to ~other simllarly credentialed design prorcsdr:mala to repmduce 111d, wbete penDIUCd by law, to IIIIWI cilili!ge8, comclioos OJ' addllioDs ro the IAslrumcnls of Scnlco solely for purposes or completing. uiDs IDd D'WDD~lolag the Project.

§ 1.3.2.3 Except for the licenses gnmtcd in Sec:Uoa 1.3.2.2, 110 olha Uccme or riabt aball be deemed sranled or iJDpUcd IIJider lhls AgreeuleDL 1be Owner shaD not ual&a. dclqate, 111bllcecse, pledge or olherwlse lr'IIISfcr any llccUc graDfCd here~ to DAOlhcr party wirbout the prior wriUcn qrecmeat of the A,n:hllect. However, the Owner lbaJl be petmllted to .authorize the Coatraetor, SubcaalnlcCon, Sub-subcollllaCCDR IIDd material or cqalpiDCllt supplicrlto mpi'nduc:e applicable ponlona of die Iuaumeats of Service approprillto to IUid for usc In lhdr cxccutlon of the Work by lfceDse gnm~ ill Scc:doa 1.3.2.2. Submission or dlscributlcm of JDI1niJIIellts of Savlco to meet otlidal rqula.aory rcqulre111C11ts or for almllar purposes in COIIIIOCtloa with the Project b aot to be c:CIIIICrlll:d a pUblication in dc:ropliooofdu: reiCI'Ted ripts ofthc An:hlrec&lllld the Archllect's coasallalltl. Tho Owaarsball not use the Jiistiumalss of Service fOJ flltarc additioos or altcrali0111 to lhia Project or for odv:r projectl, uaJeas lho OwDcrobtaiDII'IIII: pdor wriUCilqRC~~~C~~t of lite An:hlii!Ctalld die ArdiJiecr'a c:onaulranta. Any uaalllhorlxd USD or rho IDalrumcnts of Servkc shall be at the Owner's sole rht and wllbaut llablllry to die Archlted sad the ArchfJecr'a c0uultm15.

§ 1.3.2.4 Prior to tbe Architect providing ro rhc Owacr any lllllnliiiCIIts of Service ID elecavnlc fotm or rha Owuer providing to lho An:hl~ee& any electronic dala for lucotporatlonhlto tha Jostrumcots of Scnice. the Owner IUid t1u: Architect aball by separate written agn:cmentiCI fol1h die speclftc condld0111 gDYer1liJJa lila format or such lllst:n1111eaU of Service or t~lccbcnic d&ta, iocludlag uy speclalllm.itadons or liceascs noa olhetwise provided iD this Agn:ement, anacl1ed u "'Bxhlblt C.".

l.J.lA.I 1bc Arcbitect will make drawiap or spec:ificalioDs ill e!cctnmlc fonn availllble 10 the Contractor, sullcolllniCUil'S, alld ma1Cdal suppllen for a charlo 10 compeusate IQc tboir pceparaliou. "l''z clcc:uo.W: files 18 specifically for usc ID pn:pariug sbop dtawiaga or Oilier reqalred 111bloitllb md Cor no Oilier n:ason. The cha.rp for cacb. ~ of electiOolc documcata for da1s 1110 5biU be SSOO. Bacb nclpicor aball sip dae Aft:birect>a nonilll Elecrroulc Media Rdeuo fllt'lll prior to release of the docomcuta. Bada recipieal is prohibited ·aom·sbariag lhcsc docuiiiCills.

1.3.2.4.2 ~ KparaYo ·~ governinglhc uso of elcccronlc I'AslniiiiCIIIS of Service by tbose oilier 111111 die Owaer Is altlu:bed as "'Exhibit D."

I 1.U CHANOE.IN &EIMCES . § 1.3..3.1 Quae in SerW1cs or the Architect. illdudias scrviccs required of the Arc:bitcct's CODSUitanta. may be (ICICOI1lp1isbc aftu~don of_tbls Agxeemcut, wldlout iDYD.lida!iag the Agreemelll, ifmutualJy agreed In wrhinJ, if required by circulllllallccs bCyoDd lite An:hltect's coatrol, or it the An::hltccl's IIUYic:a are atrectcd as descn'bcd ill Section 1.3.3.2. Ia the ableacc 9f mutual ~in writing, the An:hllel:t aballllotify lila Owacr prior ro providlag such scnices. Htbe OWIICI' deems IJiat all or a pan of aucb Cbaagc iD Services is uot requiftd, lhe Owner sball give prompt writtal JIOiicc to the Ardlitect, and tbe Archltcc:l shaD have uo oblfpdora to provide those sqylces. Blc~t ft)r:a c:baage due co die fault of the Arclllkct, Olaagc In Scrvic:cs of the An:hlta:t shall eotlde the Architect to ail adjusUDCnt io compensadoo pursuant to SectlDD 1.5.2, ud toADY Reimbuaablo Bxpcucs clcacribcd in Section 1.3.9.2 and Section l.S.S.

51~.3,2Jfagy'of lhe following cin:umstanccs affect the Arddtect's services lor the Project, tbo Arcbitl:ctabaU be eat!ded tO'mi ~priate adjustment ia rho .Architect's scltedule IUid competllllion: .1 cban1e in die instnJCl.lolll or approvals given by llle Owner lhat DeCOS&ilate mvlsiona in IMinlmeuts of Service; .2 enac:uneot or revlsioo or codes, Jaws OJ repiAtloos or offidal iaterprefadoos wblcb nc:cessii.Bie cbangc.s co previously prepared lnstrumelltl of Service; .3 dec:lsioas of tho Owoer not rendered in a dlllcly rtUUIIICr,

SEP 22 2007

ESG001459

64 .4 sipi6caut c:Jumge in the Project includllls. but DOt limited to. shie, quaDay, compledty, the Owaer's schedule or budget, or procurement method; .5 failure or pertomuuu:e on lho pan orehc OWDel' or lhe Owuer'a cousulWIIS ur conuaaon; .6 preparation for and ~nduec at a public heari!lg, a dlspntc reaolution pnx:ccdlug or Illegal proceeding exa:pt where tho Architect is party ~hereto: .7 change In the iDfonnation coutained in Anicle 1.1.

§ UA MEDIATION §. t.3.4.1 Auy claim. dispute or olher matter in question arising out of ar lela!ed to this Agreement sball be subject to mccllation u a condition precedent to arbilradon or tho iu&titutiou orlegal or equllablc proccediDgs by eidler pany. If such manenelates to. or ia the sobjoct of a lleuriaillg out of lbe Aldlitect's services, the Arcbitect may proceed ill accordauec with app!icable law to comply wllh the lien nodce or filing deadlines prier to resolutiou of the matter by mediadon. or. by ub~tratiou.

§ f.3.A.2 'l1le Owner 8lll1 ~n:ct shall eudeaVDI' to resol'ie claims, disputes and other matters in question '*ween lhem by mediDdon w~ iui1i:a the panlea mutually agree od1awise, allaJl be in accordiiiiCO witb die: Coastruction l¢usuy Meilladoa RUlesof the Amctlcan ArlJJJradon Association CWRIIIdy lu e.fl'ect. Request for mediadoo sball be filed In wridng wltb the bdicr plllt:y to this AgeeDtCDt IUid with the A.nlcric:a Albitntloa Alsociatloo. The nqucst may be made COUCW1'811dy with the fiUng of a demaud for adlitrallou bur. In l1lcb ovent, mediatio11 shall proceed ia advauce of urbitration or lep'l or equitable proceedings. which shall be stayed peadlug mediation for a period of 60 days from tho ·date of filiDg. unless stayed for a longer period by agreement of tho parties or court order.

§ 1.3.4.3 The patlfes sball share lhe mec.liatur's lee lllld uy f'ding rea equally. The mcdialiun shall he held In the place wbcre tbe Projecfl&.IOCIIICd, unless another location is mutually agJeCd upon. Agreements reached ia mediadon shall be ealorceable· as settlement agreemeots in auy court having jllrisdiclioa thaeof.

§ 1.3.5ARBITRAnoN § 1.3.5.1 Any claiin. cf.lspute.oi ocher :awtet In quesdoa arising out of or ~elated to tbis A~IMDt sball be subject to amtmtion. Prior to arbiliafion. the parties sball cadcavor to resolve disputes by mediation 1D aa:ordauce wilh Section I .3.4.

§ 1.3.5.2 Claims. disputes and other matters iD queslioa betwCCII the parties that are not n:solvcd by mediation sban be decided by arbitration which, liDless tbe parties mutually ape olllerwise, shaJl be iD accoJdance with tbe Construction Iadustl)' Arbitraticm Rules' of the American AJbitralioa Association currently 1D effect. The demand ror amlration shall be filed in writiug with the other party to this Agreeme11t IUid witb lhe American Arbilmlion Assocladoo.

§ 1.3.5.3 A demand for a.rbltralion shall be made wilbla a reaso.aable tUDe aflu tbe claim. dispute or othea- lllllltCf in qucstion·has lqiac:u.lll no evertt·s~IJ 1he demaud for arbitration be made after the date when ins1itutJon of legal or eqWto.ble proceedings bas!'~~ on sucb claim, dispute or otber matter in question would be banecl by the applicable ~.Qfllmitadons•.

§ U.U No arbitration arisiligout·or or relating to this Agrumeat shall include. by coasoUdatioa or joincla- « ia 1\DY otht:f ~· .I!Jl. addltluJial penon or ellliay not a party to 1his Agreement. except by written collllelll containing ll apecifi~Jireii=i¢e;l0. this A~meotand signed by tbe Owner, Archi!cct. and any other penon or eality sought to ile:joiDed/~ i~~itratlon involvia8 an additional person or entity shall uot coaslitutc consent to arbitration of any ·claim, di~pui&·Qi.oiher matter in question not dcscribecl in the wdn= coDSCGt or willl a penon or elllity uot IWDCd or described therein. Tho foregoing agreement to arllltrato and other ~IS to arbitrate with an addkiol)al~911 or entity duly cousented to by parties to Ibis AgreemeDI shan be specifically enforceable in ·aa:Ora.nce:wfl,li!,Jpplicabie Jaw in any court baYing jurisdiction thereof.

§ 1.3.5.5 11le~ telldered by the arbitrator or ari!itrators shall be final, and judgment may be entered upon h In accordance witli applicable law ln any court bavlugjurisdiclion thereof.

SEP 22 2007

ESG001460

65 § 1.3.8 ClAIMS FOR CONSEQUENTIAL DAMAGES Tbc.~~=t &lid the OW1ler waive colllcqucudal daJMp for c1alms, disputes or other matters in question arising .'opt Qfor teladng to this Ag~CC~~~a~L Tbb mutual waivcr ia applicable, without limitation, to aD coDSequentiaJ ~1¢e.dac to either party's termlnaliou in accordance with Sectioa 1.3.8.

§.1.3,71'11SCB.LANEOUS PROVISIONS .§'tlh':1 This Agtecmeut shall be govemed by the law of the priDclpal pl&ec of buabws of the An:hilect, uuless oiherwise provided iD Sec:dou 1A.2.

§ 1.3.7.2 Terms in this Ag!cement shall have the same meaning as those In die edition of AJA Documeat A201, Geuetal Conditions of tile Conlnld for Construction, cutreJJt IS oflhe date of this A~L

§ 1.3.1.3 Causes of action between the parties to this Agsecmeut penaluiug to acts or failures lO act sball be deemed 10 bave accn~ed and tbe appUcab1e statutes of limllltlcms shan commeucc to runaot later thaD either the elate of Substautlal Completion for acJs or failures to act oc:cuniDg prior to Substantial Complelioa or the date of issuance of dlo fiual Certificat& for Pay.ment for acts or failures to act occurrlag a1iel' Substai11Ja1 Compledou. In 110 eveot sail such llatutes of limitations COIJUilCIICC to run any later thm the date when the Architect's &ervices an: subdantlally completed. § 1.3.7.4 To the cxteut d~es arc co~ by property l.asuranco darillg construction, lhe OWDer' llld the Architect waive ali rights agaioat each othP;r and agalust the contl'lc!Ors, COllll!ltants, ageullmd employees of the other for daillap. except Sllch Ji8hts as;f!H:y DUlY baVc to thc proc:eeds ofsucb luswana:: 111 set fortll in the ediliou of AIA Document A201. GC11Cn!~f9.11~6oas of the Contmct for Construceion, CUft'alt u of tho dale of lhi1 AgrameuL The Owaer or tile Arc:hitect, ¥ ..DJIP.Opdate, shall requim of the contracron, coiiSUlta11ts, apars and employees of auy of lhem.shnilar waivers in favor. of Ule otlu:r pries enumerated l=eln.

§ 1.3.7.5 Nothing c:o~..~i~S Agreement shall create a coalmCIUal relatfonsblp wllh or a cause of action in favor of a third patty aaai.l¥t'cithcr the Owner or An:bitcc;t. ; . ~·

§ 1.3.7.6 Unless olhetwi.S& provided lu this Agreement. the ArcblleCI and Arcbilcel's couu!WIIs slutll have no ieapansibility for the discovery, presence, baudling, removal or disposal of or exposw-e ot persons to buardous matariala or toxlo subs~ in lll!fJOlJ!lllt lhe Project Site.

§ 1.3.7.7 'lba ~hitcet sbaU havo:~~t to include pborograpbic or ll1tillic ~ollltiou of the design of tbe Project ainong the~;s prt;Diitibw and profeaslonal matedal.s. The Arcbltect shall be given EeUOMble ai:i:eQ to tho coinplcted Pmject to mala: such RptciClltatious. Ho\Wvcr, the Archiccct's materials sballnot laclucle ~ Oym&!!'s coufideatial or.J!ro~~orma.tioa if the Owner baa previously advbecl tb8 Arcbirect in writiug of d)C:ijleCifiC~~rmatlon CClJ!;SldeRd~y;'dle Owner co be coaftdOIIIlal or proprlewy. The Owner sball provide piofesaiOJIIl.i=dit fq.r the~~ iil'ihc Owner's ptomotiollll matcdals for the ProjccL

§ U.7.8 If-~ requeS'tl~e Architect to execute c:ellilic:ata~, the proposed language of such cer1lficallls shall be ~ttccftD the Afc:blCCCt W,i~ew It lcut 14 days prior to the n:questcd dlliCI of oxccutiOD. The ArchilcCl !thlill...nt be required'tq~~J~Iiillficates that would requlro knowledge, semces or responsibUlllcs beyond the ~;f-~~L'""' ~ . ::i;. ... :':*:-: ~p.9 ThO;~~~ Archileel, respeclivety, bind themselves, their parlllen, succcsson. asslgas and legal ~ti"vea;~other party to this Agreement and to the panners. IIUCCtSSOB,ISSlgns and legal &qlrC5Cntatim of such olhor party with Rlllpcct to aU covcnanta of this Agiee~~~CDL Neither the Owner a.or the ArchiUICt shall assign tJds Agreement without the writteo consent of the orher, except that the Owner may asslgulbis Agreement to an l~iJ.u!w~~ 1c11dcr providing fiuanclns for the Project. In such event. the Ieder shallusume the Owner's rishta and ali~ti_p]i;~er this Apement. The Architect shall execute all coiiSetlb rea.sollllbly required to facilitate such ~~ §{i.& ~~~TloN OR SUSPENSION § 1.3.8.1 If the Owner falls to malc:e paymeots to the Architect iD accorda.uce with this A&reenu:nt, sucb failure shall be coasidcled subslllntial nonpertbnnaoc:e aad cauae for te.rmination or, at the AJchitect's option. cause lor suspeusion of pcrfotDWlCC of services under this Agr=IJIOIIL If the Arcbilect elects to suspe~~d services, prior to

SEP 22 2007

ESG001461

66 suspemioa of servlcca. the Ardiltcct •ball givc aevcn ~· wriUI:a nodco liD the Owls«. Ill tho~ of a swpeas!on or lC(Yices. the Arcllitect Sball bave 110 llabiUiy to the Owner far delay or damap c:auiOCI lho Owner boc:auso of 1111Cb ·5UiPcuUoa of aervlca. Before R:lllmlag ICI'V!a:a.lbe An:bllllel BIDII be paid uD 1111111 due prior to 8Uipa1lloD and ~Y~ Incurred In the lnturupdoa1111d resumpdouftbo Architect's services. The Ardlilcct'sfea Cor tho nmialitlris ICIVices aad the time schedules shall be equ!14bly adjusted.

S t~.U If the Project ls suspended by the Owner for moro llwl30 COIIIOCUtlvc days, tbc Ardllteet ahal1 be ~CIIIIted for scrvfccs performed prior to aotlc:e of IUCh auspaldoa. WileD the Project II resumed, the Architect lha1l be co~ for gpcmea incurred ill the iotempdcna IIIII n:IUIIlpliun vr thc An:tdiii:C:l's ICIYices. The Architect's feel for tho remaiDillg GCrYices aDd tbo tlme IChedulcs shall be equllably adjusted.

51.3.U Ir the Plojcc:t is suspcudcd or dJo An:hltcct's servlcca co suspcadcd Cor more ChiD 90 coma:udve da:JS, lbc Architecl may tcrminatc this AgrumeDI by ghlllg aotlas lhan IIIIYCn days' wriueu aotlco.

51.3.8.4 This Agrccmcut ms.y be wminatc:d by cilha' pvty upon notlclllhlll seven daya' wriuml DOtic:c should the Olhcr pany filii sabstaalilllly to perform ill accordiUice wilh the terms of thlJ Aaroemcut lhnluJh DO fault of tbc party iniliatina tbc tmni~Jioa. § 1.3,U This ~~i be tennlDafed I!Y the Owner apon not las IIIIIIICYCD days' writteal notice ID tbc ~for the OvtDCr.-.~nvc:nlesu:e aad without cause. . ··.. :...... § 1.3.8.8 In !lie eYeDl of~ uClllho fault of IIIII Arcllkecr. cbc Archtrccc shill be c:ompemaiCd for scrviccl pedomcd pdar to teniliuil!ltl, togedlcr with Reimbunabfa Bxpcuca lheo dae aDd aJ1 Tennillation Bxpeases u defined Ill Secllonl.3.8;7,. · :~:-· :. ·. § 1.3.8.7 Termination ~·11R ill addltion to compeuation for the senic:ea oftbc Apccmeut m1 iDctude c:lCpCIISCS dllectly Adribuyabl'c!w. lamination ror which the Architect Ia aot od!elwiso compcD.Ialccl, pills .aamouat for the An:blccet's antlc;l~jirOfit on the value of the services DOl pcri'01111Cd by the ArchlcceL

§1.3.9 PAYMENTS TO Tt!E·ARCHITECT § 1.3.9.1 Payments oa IU:COunt· of service~ n:ndcml and far Relmbunabfa Bxpemcs lncumd shall be made moll1hly upon JII'OfCIIIIdiOn or tbe J),tcbilcct'~ ,~,of ICIMCCS. No cleclucdons sball be mado flomlho All:bitec:t's c:ompcnsallon on accoui1J' of peaaf,lY;.J!'ll!}datzd diiiDIIpa or otbu lllD1I wllhhold hm paymeats to coa~n~C~DCS. or on account of tho cost or changes J,;'~ ~!file other chaD those far wblch the Architccc bu bcca acijudpl to bo Bab!tl. S1.3.9.2 Relmbursablt;~sea are in addllfoa to compaasalioa for the Archllect's services and Include cxpcuca incumd by the An:liitut 1111d AkQlliOI)t!.a employees ODd consullants directly rcl&ted Co the Project, as idCIIIificd iD rile followillg Clauses: ·

.1 tranapCirtation in COillloctlon with the Project, autborlzed out-<~f-town ~ravel and subsbtc:ncc. ud clecttolllc c:imimualcatlam; .2 fees paid for secUring appzowl or authorltlea havloa jurisdiction ovec the Project: .3 reproductions, plots, slaadud form documents, poalllge, bandllag and deUvery of IDStruiDCIIts of Service: A ·~~ of overtime work requiring higher tbu regular nates if authorized in advance by the Owuer, ,5 ~ilgs, modela aad mock-ups roquatcd by tho Owner; .6 ~tilai>:or professional liability lnaurnca deditlfed exclusively 10 this Project or the expease or additional insurance covoraae or limits requested by the Owner ia excess of that normally cmlccl by the .Architect aad the Arcbitect's coasullanta; ,7 reimbursable expenses as deslgnqted In Section l.S.S; .8 other similar dltect Projcct-rolatcd expCI!dltwes.

§U.UR.ecoidtofRelmbursable Expenses, of expenses pertaining co a Cllanp in Services, and of!IOI'Yices pedonnad on tho basis of hourly ratea or 11 awlliplc of Direct Pcraouncl Bxpaasc abllll be available CD the Owner or the Owner' I authorized representative at mutually CODYenlelll dmcs.

NA Doc1rn1n1 8141111•19t1hrt1.Coprrtghl 01817, 182t.1114&. 18S1,1Be3, 1&1111, 11161,11183,1960,18117,1870. 1974, U77,188111111111197bJ'IIIe Alnalcall lnati:Uio o1 Ardllodl. All rl!ita re.o~Wd. WARMHO: 11111 NA• Documanlll piOIHiad br U.S. CoPVfllllal LIW and llllllnlllanaiTreallal. g llnauiJI...ad ropnodiK:IIon ot clllltl!lullon of tllb N.A• Do...-1, or MJ pG111on otiC, liMY ruullln ...,... dwU lind criminal penalaN, and Will 1ae piOMCIIitiCI to tbll mulmum aunt poullllo under the law. 11ia dacumant -IIIIIIU:ied by NA IOIIwln u 14:82:1EI an 03126'200511111a Onllr ~:m-htlclleoph&GIItli16120C&.amt11Mtrotrnalo. sCAN NE~ SEP 22 2607

ESG001462

67 § 1.U.4 DiRcl Pcracmnd SxtJ- is defiJicd u the dlia:t llllriA CJIIho Architect's penouuel eagapd 011 die ~~ the ponlon otdte cost otlheir IIWidatory &lid cusiDmlry COI1ttibmfoas aDd beudlcs related then:ut, such ~llliiiXQ IUid other 1111Utory employee bc:ucfics,lnsuraDce, sick leave, holidays, vacatioaa, employee ~~ plllls Clad similar contrlbutioos.

~ 1.4 SCOPE Of SERVICES AND OTHER SPECIAL TmMS AND COHDfi'JONS J;f.~11;!!nametadoa of Parts of lho Agmsment. This Agnemeat npn:sencs the enlin: and intepl!IM ~~ lieiweca tbe OWIIU aad die Architect and supellledes all prior RSOiiallcms. repmcalatlou or aareem=t~. either wrillal or oral This ~111 may be arncuded oa1y by wriUcD insbamcDt sipcd by both Owuer aad ArchilecL 1)l4 AgreemeDI coqrises tbe dOCWI!alb listed below.

1·1.-C.U Slandard Porm ofApement Between Owner lll!d Archilect. AlA DOCUD1eDtB141-1997. ttA.1.2 Srandaid Fonn of Archfrect's SemCQ: Desipllld Co1!mct AdmiDlslraflon, AlA Documcal Bl41-1997,or It f~llows: (Ust otlru dDCIIIfUin/3, .#/G1f1· deliMating Arr:hlua':r #tlpe of :rnvlcc:r.J

I P.iu.e.uS'Nei!Son Onhaa,l.A'rchitecb' Proposal lellerdaled November 12,2004, revised January 21,2004 al!lle:W as ·"Bxlllbll A."

t 1.4.1.3 Other documeab as follows: (Un oriMr documau, Iftilly, fonning pan of lhe AgneiMnt) Ellleu Sweoson OrahiiDl Architecb' schematic design documenll daled January 28, 2005, whicb are attac:hcd by reference as qBxltibll B. •

§1.4.2 Spccill Tenus aud Coaditi0113, Special terms aud coaditiona that modify this Agtceroeut IR as follows:

ARTICLE 1.5 COMPfNSATION § 1.5.1 For the Architect~ a services as .described under Article 1.4. compensation shall be computed as follows:

= Fixed fee tor Arcb1letture. StnlcnuaJ, MechaDJca1 aod Eleclrical EnglaeedDg $112.SOO. See schedule for Pbases ofwodc:

Sec ach~ll.~ of~ly rates anacbed as "lhhibll a •

.,. § 1.5J For a Cuut&e in Services of tho Architect's consuliUits, compensation sball be computrd as a multiple of Cue ( 1.00 ) limes lbe amounts bDled to the An:hitect tor such servicel.

SEP 2 2 2007

ESG001463

68 11.5.4 Par Rc:imbursable '&pcllsc:$ as dCICribed iD Scctioo 1.3.9.2, mlay olher Items locludcd lD ScclloD l.S.S as Rchnbarsablo Bxpcnscs, the compcnsation shall be compoced u a mukfplc of One ( 1.00 ) limes the cxpenaes 1 lllcurred by tho Archllect. IIJid lhe Archl~• employees IUld coosullliiiiS.

§ 1.5.5 Olher Reimbursable ExpcDSCS, if any, urc as follows:

§1.5.6 Tho rares ad JDilltlples for services of the An:blcec:t IIJid lho Archlrecc's CODIIlltalltl as :set forth fn lhis Ap:e111C11t abalJ be adjusted iD accotdllllU wilh chclr nonual Alary review pmcdc:es. I '· 1u.r An Initial payment of Zero Dollar~ ud Zero Ccnls ($ o.oo) shall be macle upon executlou of this Ap:emcnt md Is the miulmum paymc:at under tbls A.glccmcul. It ahall be credited to lbe O'MICI''s accouut at final payment. Subseqaoul paymcuts for services shall bo umdc moulhly, IIIII whonl applicable, sbalJ be ill p:oportiou 10 services pcrf'ormed on die basis set forth In this Agn:cma~t.

§ U.8 PayiJICilts - dllC and payable immcdialely zero ( 0.00 ) daya from tbo dato of lho An:hitoct'1 illvaiee. Amounts unpaid sixty . ( 60 ) days aCier lbe invoice dale sball bear IDtaat at lhc rate cntrnd below, or In the abtcnce lheroof at tho logal ia1o pmvailing &om limo 10 lime at the priuclpal place ofblllincss of the Ard!itcet. (lnMtf m" of lnt~rDIDgrud upon..)

U.S. Federal Rese:tve Pdmc Rate plus 2'1..

{f/nu:JIGW$ and r~lmrrents rou/u 1M Fe«ral7ivlh In undlng Aa, slmll4r #Gic Gild ~call co1UIIIIIU credilltnvs tuul otlrttr rwguiDtiou QJ the Own1r's tllld An:hilm's prlndpGI pllu:u ofbllSinu#, lire I«Dttlm ofthe Projed tllld el#wMn: 111111 11/fo&t 1M valld1ty ofrhU pi'DIIlsimL Sp1djic legal Dlhl« Wndd be obltJ/Md witA ~ tD ddetimu ormodijicodou, and ab11 n:~g ,.,~such 111 writun dlst:~Muruor -Mr6.)

§ U.9 Jfthe KI'Viees covered by this AgRCmCJ~t haw: aot been complclt:d within Three ( 3) months of the date hereof, throogb 110 tilalt of cbo Arcbitec:t, cxtcDSioD of tbe Arcbitec:t's sccvlc:ea boyoud tbDt ti1111: shall be co~nalcd as provided in Section I.S.2.

This Agreemenl eotered iAto as of the day and year first writtu above.

~ (S tlllllm) Paul Mittcndorff, AlA PrinciJI!land Vice PresideD! (PrlnmlnomeiUtd tltl~)

SEP 22 2007

ESG001464

69 'Zo53o2.oo

eAIA Document 8141,.-1997 Part 2 Standard Fonn of Architect's Services: Design and Contract Administration

TABLE OF ARTICLES

2.1 PROJECT ADMINISTRATION SERVICES

2.2 SUPPORTING SERVICES T111s docurnolt IUIIIImportunt legal~ 2.3 EVAWAnON AND PLANNING SERVICES COnscAIGVon with an allomly Is 811CX11111lpd with respect to 2A DESIGN SERVICES ~' complotilln or moclillcalcn.

2.5 COHSTRUcnON PROCUReMENT SERVICES

2.6 CONTRACT ADMINISTRATION SERVICES

2.7 FACILITY OPERATION SERVICES

2.8 SCHEOULEOFS~CES

2.9 MODIFICATIONS

ARTICLE 2.1 PROJECT ADMINISTRATION SERVICES § 2.1.11bo An:hlrcec shall Jllll1ap the Architect's serv.k:es IUid adminl&t« the Projec:L Tho Archircec shall consult with the Owacr, rcacan:h applicable dafan aiteria. attau1 Project meetings., COI1IJI1UDicate wflb members or the Project team &lid Issue JIIO&\UI JqJOrtS. Tho An:bltecl shall coordinate the scrv!ces provided by die Archirect lllld die An:hltec:t's COIISUitaDts with 1hasc IC&'Vac:c:,.~dcd by the Owncrllld the Owner's consultaDts.

§ 2.1.2 When Project requirements have been aufflcleDily ldeodfted, the Architect shoJI prepare, and periodically update. 11 Project acbcdulc that lhall identify miiCICOnc date.• for dec:isions required of the Owner, design servlta fwuisbed by the Architect, completion or documentation pnmded by tbe An;bitec:t. commeDCOIIIeZ!t of c:onstnlction lllld Subscantial Compledon or the w.J&Work. spbjeet !9 !he !lmjralions jndjq!gl in m!!!l!l1 Ssgmg gpabam Arcbl!ec!S' Prooos!\l letter dated November 12.1004, revised January 21. 2004 ~ ll \\Jb attached as "Rxhjbit A::. 1 "1\ .,.-

§.~1.4 '1:/tJ&R RllfllBSief lbe OWRer. t~Je...Afohkeekballlllake a p-tali~e eesiga er die Pft,;eet te RIJIMBRtaftr,.et ef lbB 9WIIBt'o

§ 2.1.5 The ArchiteCt sball submit dc.~lgn documents to the Owner at inlen'ab appropriatr: to lhe design process far purpose~ or evaluation and approval by lho Owner. The Architect

SEP 22 2007

EXHIBIT ESG001465

70 §2.1.81be Arcllitect shall usistlho OWII&It iD canucctlon with the Own=' arespoosibWty tor filing documents

IrcquiRd f'or die approval or gvycnuncaaal authodlka baYing jllriscliclion 0\'a' cbo Ftejeet.fmlccl. lllbjcq fD the fpJlowigg llmjrations;

2.1.6.1 Si18layout, submittals and appiovals will bo by othm. Tbe Alchitm will pcdOIID cmc set of revisions to tbe scope buildiDg drawings :iacluded by referalco as "Exhibit B" and 0110 set ofrcviai.om to tbo dOCUDiaiiB submitted forpormit from input recoivcd from the O"Mier pursuant to~ of the . IL l1lllllicipal authorities having jurisdiction over lho Project. Beyoud those revisions, the ArChitect wiD !lOt C 1\ aeate my special drawmp or exhibits. DocumculB or otber work eftbrts reqnired tor p)amWig mbmiUals I\ R. or govCIDDICDial~~ge~~Cyreview aft« the iuitial submisliou will bo ideutified immodjately by lhe Owaer -1f\ 8ll.d may result in a revision to our schedule IIDII compeusatiOD. . . ·: . . ~·

\.! 3,_1,;~~~~·~~WQisfAND CQI;i'OHN&WORK . :·§~!14~~~,a~mullflllla•Je 11- eaftle!e&dyiderllifiiiii,IIID /MhitoM..U P"PMI arr'imln'f)•

.·~~~==-,.::::::::..~~==ea :~~n~~t~eof.!b.~P.IJdale 1111d refiRHb&pNIImilllll)' eatimaleofthe Gesl ef lheWerka Tbo ;\rebiteel . ~lllli~'l!\8'~~ 91 ...-~t1Jll6tmea~S te ~RYiaaa estilMiee efehe Gea afll\e "'A'elk-iodiealed lJy 1111aDgee ill

.-~=::=======::ll :~ ~!IDJ)'•Ot ~~ aad lbe Q'Miel' liheJJ ODIIfletale widlllle t-..Uteat ia maHBI &UGh lllljiiBIOIIIIItlo ·li: :}.::;::':: . \ ". i. :=~=~;;;~~==~==:=:=. ::==~~=====-~· ~~~ iiie~(ii"r-~f;il "-' llide er aesaliatedpd815 wiD 11111 TJtPf h• die Qwue.'a llllldaet faF !he PtejeGI er fRIIR .,..llllliiB".te iifh Qe&t ellbe ~fl1 a, e·oaluaden prep-d or ISM'ed le lly tho 14ehiteatr

t,~.iJ.Jt!i~Rft pimatB~·~.a COS~ arthe WelkJ !he l'ahi!llllUIIalllle peRBilted 1e iaelllde eeBdaseaBies l'er ~ IJid~ IBd ~~•.e0GGJ~Ii8ai 18 detenuiae 'l4JII BIIIIBi!Ws, equipmllllt 1181Rp8nea& .,&kiiiiiHIIId.c,pea.of

~- e!l'l8eded~.&hallllle iaeNa9ed aeelll"i'IRaly. . 0

... .·· ... :- •• .. ••

PeBIIIIIIRIS 1e lila • g_.., lllftleDOed willlia 99 da:Yt Dftef die ,\rekltelt HllmiiS d!e Cealltrlletlaa dt11 budget Cer llle Cesl oldie WerJIIMJllleiHijUSied te tellaot ol!silgBI iD die tii!Mflll )f!IJ.I.af pfi~ p tile OBIIUNedea iiMJtl&lfJa

§ ~!I;,J,'-III!I:e ,wqel fer !he Cesa af lite Weds Is e-Ddsd lty Ilia le~IB&f llle•a fide bid e• oegefieled p~epeea1 1 11!a ~ . . ·.,,~ . giw "Nfltt8B lljJJIRI'JGI af BR IB11f81198 iB lhlll!UdJDI urlho Cell afllte Wlfkt .3 autlleme ,Uiddiag ar RIRII&&delilll eflhe PRijeet wtdlia I Ra~Baallle limo! ,3 ll!m1inare in aaeetdt~Me mill Seeliua UJI.It ur ,4 eaapeate Ia Wliaiagllle Pfejeet seape IIJld quality as te1JIIife4 te tedueollle Gasl efllte W.fk,

SEP 22 2007

ESG001466

71 § ;U,7Al U' rile QwR81' eheeaes IB preeeed under S~~edon :u:t.J,4, ae /..rohllear, 'lloidleUI addidanal ee~~~peaaaalee, ellell modify lito doeulllelliS fer whieh the I'..Jellillilllf ls105J10milllll uedor thlo t\iiiJCimeel at neeUIRI)' le o8111pl)' willl dMI budpt fer diB caas afd!a 'tVarlh 'Ale madllieatiea efli\leh deeumenl~ ehalllla lila 1111111 efdlo .Velllteol'll napellfilllif,y Hilder tlth Seelie11 ;u ,;t, The t.Nkitesf lh.U lie ealided 18 oemplftiWBR iR 11118onlaBeo will! !Ills l.peeiMIIt ferllll aeMan peftenned 'rhelbeHJLBei..COBSIRialiaa i5 semmeaOCMI.

ARTICLE 2.2 SUPPORTING SERVICES § 2.2.1 Unloa spcclflcaDy deslgaated In Section 2.8.3, the ICtYices in Ibis Article 2.2 shill be provided by die Owucr or lhc Owaer's couulrauts and collttKIOrs.

§ 2.2.1.1111e Owac:r sbaiJ tumish a prosram &Oaiag ford! tbe Owner's objccdvcs, scbedlllc. c:onauaims and crileria, iDdudiDg space n:quirameniS and ~latlonships, speelal equiptnenl, systemS aad site requllenu:nu.

§ 2.2.1.2 Tho Owner shall fbnlJsh aurveys ID dacribe physical characterilllca, legal Umitatioaa and utility locallons for du: site of tho Project, 1111d a written lepl dcsc:riplion or the site. The swveys and lqlll lnformalion shAll include, as appUeable, grad= IIDd liDes of ltreets, 11lleys, pavemcntllllld adjoining property ud uractUJCS; adjiiCCIIt dralnaae; npcs~r-way, restricdoDS, easemeats, encroachmcuts, zoning. deed raule1loaa, boundaries and c:on1ours or the site; J.oealioas. dimensions and accessaJY data wilb respect to exbtiu& buildings, olher Improvements and treea; and infom~alion coaceming avaD11ble utility ICtvices ud llllea, bolb public ad private, above 11111 below grade, lnclucllng Inverts and depths. All the ln!ormadon on tbe survey aball be rct'maced 10 a Project benchmark.

5 2.2.1.31be OWuer shall £urnisb services of geo18cludcal engineers whlcb mny include but ace aot limited to test boriags, rat pits, deaenninadons of aoU bearif18 values, percolali011 rats, evallwloaa of ha2.ardow materiala, JrCIU11d COJJ'OSlon tests and resbtivlty liSts, fDCludJDg necessary opetllions for IDIIclpathlg subloil c:onditioaa, with reports aad approptlale rec:otiUllfllldtions.

AlmC:bli 2.a 6\f.t.IJM':RON ~D PbtJUIING SER'nC:IiS S2.1.1 The ,\telllreetlhlll pta•tidaa preliuli-, walualloa ef the ielelftlGtlee Nmislled tty l.ha g lftii!F 1111d• lhi5 o\gl8umoaf, illeludiag the Qwellr'a pNiftUB lllld sahedtlle RNiuirellleatHIIIIHlu4gll fer 1118 Gesl effko 'Wedt, IJCielt ift leftM ar the ether. 'Ale AJieldleel shall ~a Ae'll' &eelllolaARadooiB iiSIM!Ifaiu d!lt il is eeasisi!JRI wilb die RNIUIR!meftiS ef the PN,jeot 111111 allllll aadfy lhe-OwMr ef My alltoril!lfeftftlllien ar eeBSullallt sof'¥iea dlaiiiD)' llo naslltllllll)' needed fer the PNje&to

§ 2.3.2 'Die t'.mbiteol shall pRI'Jide a prellmiaary e•JalllltieR ef the Qweer's till far the JIA)jeet IJ115ed QR the laren..dea p~&·.~d•d by tile Owtlar ehile eoadici0111,8Bikho Gvli\Gf'a JIAISIBIR, sehadlll..aa4-budget fer lito Gesl el'the W.Orl&

§ :LU 'Ria ,\R!Wteel shaiiNViaw lbe Qwner'a prep and mlllhed ar oaallaedas far aea&tNedea &llf'olillll& aetkllall aelify lite Qo.wer ef aatlelpalld impee~ t.hetaueh melhed lllll)' havo en tho Q~s p18lf&IRI AnaneiaiiHld IIIRII

ARTIClE 2.4 DESIGN SERVICES §2.4.1 The Architect's design service~ sbllll include notmal siJUctUJal. mecblllical and electrical enpccring suvlc:es. 12.4.2 SCHEMATIC DESIGN DOCUMENJ'S § 2.4.2.11be Architect shall provide Schematic Deslp Documents based OD lhe mutulllly ap!CCklpon program, schedule, and budget for the Cost of lbc Wort. 1bc documents slmll C$tablish lbc coDCep(Ual cleslga of 1bc Project Ullll1nliDs the scale IUid ~latioashlp of lhe Project componeiiiS. 'Ilia Schematic Design Documcmts shalliBCiudc a conceptual site plan, if appropriate, aud ~limlnary bulldlq plans, sectlons and elevations. At rhe Arcblcect's option, rho Sehemutlc Desip DocumeniS may include study models, pcrspec:tlw s.lcctchea, elccuonic modeUng or comblnatlou of these media. Preliminary selections of major building systems lllld construction materials shall be noted onlbc dnlwfngs or described In wrlring.

SEP 22 2007

ESG001467

72 52.4.3 DESIGN DEVELOPMENT DOCUMENI'S 12.0.f Tbe An:hl~ dla1l provide Dellp Developllll!llt Documenll based 011 the approved Sc:bemalic Dcsisn Documr.nts and updaled budget l'or the Colt of the Work. The Dealp Oevelopme~~t Documcatlshall ilhuaate and describe the rdlnemeat of the de5ip of lhe ProJect. cstlblisbiJia the scope, motioabips, f'onns. size and lppWUICC oC lho Pxoject by means oC plalls, scctioiiS and olevatioDS, typical conslrUdioa delaiJs, a.ad equipment layouts. The Deslp Dovelopmcat Documents ahall include specifications that ldclltify ml!,jor materials and aystcms and es~abllsh ID scaera.J their quaUty levels.

§ 2.4.4 CDNSTRUcnoN DOCUMEHI'S §2.4.4.1 'l'lla Arcbitect lllall provide Coustrucdoa Documents hued oa tbe ipproVed Desip Development Documeats arid updated budget for tbc Cost of tbe Work. The Coulnldl011 Documents shaD set forth In detail the requirements for conalnlction of tho Project. The CoDSirucdon Documents sllall b11:!ude Drawlnp and Speclflcadoas that cstabllsh JD delail tllt: quality levels ot materials and sysaems ~ ror lhe Project.

53.4.4.3 gMsJ dlo de'HiefiBIIII er tile~ tile lallileel allall . . . . , Qweer iB lho !Je"elepR!IIBIHd fR!pURdiea efl (I) blddiBJ aad p18GUR!aaalafGimadea wWoiHieserillee lho dmev piiiGO and eotldidaas efbiddiar;t lllddillr; Grfrepaslll l'eHII5tlllld die f'eftH eflllfiOMBe&t lloiMeR die 0MIIIf and lila Ganll'llelaFi lllld E3) the Qladldeat afdle Ge~ &r Co116t111Gtiae (Qe~lementuy and allier CleRdld• • 11\e Arelliteat lise shciU aempUn the P.Rijeet NaBIIIIIIMa ineludelllle Geadllieas ef the Ge!IINGI fer Ge115U11edea ud SpeeililllltiGBllllld may iBelude biddiag tellllileiDI!DIS lllld sample CeHM.

MRQ.U 3.5 CONSJRuaiON PROCUREM&Nf SER'AC&S 1a.U 1!M t.,1811lall shallllsisl the 0111'11H ia obtaleiag either eempetitio;·e hide or negotiated prep esals and shell wist lhe Owaer In awenling ud prepaflag eealluela f8J' aeii&IJUali&fto.

L

5a.I.J 'Jhe t"..teltiteel c;lr" assist dlo 9WBer Ia hid , alideliea erptepesal e ICI!ualiea BBd dele--Ins~ en ef lite &U&&e51SM ~ld er pmpesal, Jfu,c. lrRifllested by die Owaer, tlle .~alliteel shall aoti(y.GJ!.proepeu&h·o bidders er eealrleleN ef llle llid er prep asal restdl6s

~ S2.1.4A :Bidding »oeumei!IS ahe1l 88119iet ef IIWdifts te'IUiAIIBIIRiec pfBJJ&I!I!!d uOHIRIIIlfoRMc Gaaeml Seadlii08!H111l Sllf!pleme_,. Seailld0111o S,llllifienoae lllld Dfllwiugs,

52.5 t.a If fa4:11051ed by lhe Owner, lllo Mhiteet ahallll'fiiii&Cil'eP f!8GuRal dlo repradu&tiaa er Bidding Deeameall l'et dlsllillelli811 Ia prespesdWIIIiddlll!la 'Ale 0'JJRer shall I'll)' direaiJy l'eF die GB&t of reproduadea er allaU roiiRIIIIfllo tbe AIVIIileet fer sueh IIJIIII!ft9e&a

§ 2.1.4.1 v RWIIIIIMBd lly die Qwall; tilt .'1dCI!iteel sllaD dislfilllllO lho Bi~IO!~ se1111Ml their l'lllllm vpea eemplelian ef tho blddq pl'll ellSIIa 1!he hehiteeuhall Jllalftlaia a las er dlslrilludea and 181riewlw BBdiM emauaf6 sf dspaailllwlf llftYt maei'.'O!d hm IIJld reiUIRN 10 fii'II8JII!Mi\~ bilidcft,

§ 2.5.4.4 ~~~ Al&hiteat sWl eelllider eqllll51e fer wbslilllliaRSc ir peRIIiaed lly the Biddiag DoaumentG, 1111d sllall prnp11R11111d dl511i~lll8 addenda ldaeli(yier; appRI•Ied sallstillllillllll te ell pre5peai'H lliddereo

§ 2.5.4.5 'J!IIe.~hlteaa sMII p8fdeipa18 ia &f¥ at lite Ownw's dlnaien, sllull ergank.e allll eendueta pre bid GGaleHueo fer preepeeliNe lllddeAJ,

§ 2.5A.S'I'Ile .~bi~eet &hall pRpllM rnspeasas ta ~~~ter.1ieM rre"' pteipeelive lliddeB BBil p~e•r

§-2.5.4.7 The/.d'llhileal skell pal'tieipN itt er, at lhe 0\'Jner's dlreedeR, sllall afllllllte Blld eeaduatlke epenina efthe bid$, 'l11e lwhilee& &llaiiNIIIiOilueady dealliiiBIIt ud dJsllibule lite llitldiar; •uks, 11 dileaaod by the 0'.Nft8Ft

SEP 22 2007

ESG001468

73 S3.1,1 NSGcmATED PROPOSALS §2.15.111 PAip8511 »e8111MHY llball 08MIIlBfp19(18BIIl'll'l'fiR!IIIenY, Pl'9fl85ed 88RIIIIIII raRR!l, GURII'II C:ettdllietll llld Supple _ _,. GullllideRS, Speeifioaue111 1111d Dtewiate.

I ~·.u Ir feiJ'II!GIOd lty die Gwnet,lhe J.\RIIIileel 51laU - · rer pRMUI'..1g diU RIJIRidiJ&dea ar PHpOIAI Deettme~~ts fer lllsllib~tliee 111 ptespeali•.. a eelllRiaiSH• 'Rie 0\·111er sltall pay difeelly ferllla east er mpredueliea or &bill RIIIRin&se the .~l!iUel fer &IIIII 811p8H5e&o

§ a.&.&.a If NqUe&led ~ the Q%'il-, tho Atehiteet &hallllt'pllile ead paftietpate Ill aeleellen latefvtowe 'IVittl Pfii!IIIOed"O 88flllllel8111•

§ 2.1.1.4 The o''..rehilell.~ afMII aeasidef.requeets fer lllblli1UiieB5, if permUted lly tho PtepeeiiiDBauiiiORI8 1 lllld sllall pdjJIIN • .Jislfiburo add811da 1.4eslif¥btJIPJIIGYIId 5UIIstllliliaas IHII p118spee11Ye alliiiRK!teAI.

5211111 Rllf'lllsted by die QWJterrtlte..Aie~ llle Ow- duriag nogelllldoa5 wi!h pEMpeelh• eealfeelelllo 'nte AHIIIteel sball wli&IIIJIJORily pR1p1M a AIIRII!OfY R!Jied eU11 DII8BdatleR Rl91llre, 11 dlrea111d by lhe Owiterr ARTIClE 2.6 CONTRACT ADMINISTRATION SERVICES § 2.6.1 GENERAL ADMINISlRATION § 2.8.1.11be Ardli~sbaq provide adminlstrDJioa of die Ccouact betweaa die Owner aad the Conttactor u set Col1b below aud In tho edlti9n.Qf AlA Document A201, Oeaelal Coudltiom oflhc Colllrad forCoiiSinldloo, c:um:ol as of lhe dam of lhls ~ Modlftcatiom made to the Geaeral Coadiliom, when &dopfcd u put of lhc Contract Documents, shall be enfon:cable Wlder lhll Asreemeut oaly to die extem dlat !bey are consistent with tbia Agreemlll!t or apptOVed ID wdlillg by the Alchitcc:l. Site yisits by !he An;bitect w!U bo Umjted to !he num!Jer or mcedpgs ipdis;al!!d in Blpps Swensog Qraham Arshltm:ts' Pmi!OI!J! le!fer dated Nmmbq 12. 2004. revised Janwyy 21, 2004. lll!ncbed a.s "Bxff!bit A,.,

§ 2.6.1.2 The Architect's responsibility to provide dtc Contract AclmlnlsuadCD SCC'Yicolllllder this ~t commcnc:cs with lhc award of the iDillal Contract Cor Construction aad lcrmlnatea at lho Issuance t0 the Owner of the final Certificate for PDym011L However, tho An:hitcct sbllll be enlilled to a Clwlge in Services iD ac:conlance with Sccdon 2.8.2 wben Contract Adra!alstratlon Services extend 60 days Dfter tbe dale or Sub&tlultia! Completion of the Work.

§ 2.8.1.3 The Alchllcc:t shaD be a n:pmentalive of and shall advise ud consult with tho Owner during the provision of the ConctiCt Adtnlnistratlon Services. The Architect ehall have authority tO act on behalf of tlu:: Owner oaly to the ex lent provided In tills Agreement unless otbcrwlse modified by written amendment.

§ 2.6.1A Duties, n:sponslbilities aDd limllalions of authority of !he AR:bitcct aDder this Article 2.6 shall not be rescrided, modified orexlaldcd without written ~toflhe Owner aad Architect with c:oaseatoflho Contractor, wbicb CODIICCit will not be unreasonably withheld.

§ 2.8. U Tbe Architect shall review properly prepared, timely requests by the Contractor for addillonal Information about the CoJUract Documents. A properly pn:parc:d request for addldonallnformatlon about the Coatraet Doeumcllts aban bo in a form prepared or approvocl by the Architect 111111 ahall include a detai1ed written stateme~~t that indicates tbe spedfie Drawings or Specifications In need or clariftc:atloa lllld the nature or the ellrificalioa requested.

f 2.8.1.8 If deemed appropriate by the Architect, the An:hlrect shall on the Owner's behalf prepare, reproduce and distribute ~upplemcntal Drawings and Spcc;ificatlons In .:e.sponsc to requests for inrormatlon by the Contractor.

§ 2.8.1.7 The Arcbitect sbaU Interpret and decide maJtm concemlng performance of tile Owner and Contractor under, and requirements of, rhc Contmct Documents oa writlen request or cidler tbe Owuer or Con~metor. Tile Architect's responso to auch request~ shall be made In writing within any rime Umiu asreed upon or otherwise with re.uon11blc: promptness.

SEP 22 2007

ESG001469

74 § 2.6.f.l Intupmatioas md deciliona of the Arcldtcc:t shall be consistcllt with the lntem of md r=sonably iaferablo from t1111 Contract Doc:wnalta and lball be ia wriliDs or in Chc f'otm of drawinp. When makiaa sucb intcrpzelatioas aac1 ialdal decisions. the Arcbilecl shall endeavor ro secure (allhJbl pctfimuaDce bJ both Owaer IIICI Coarraccor, shall aot show partiality m either, and ahall not be llahlc far tile ICSIIlll of iiiiCqln:tatiolllll or declalons so tcoden:d ill &oodfaith. § 2.6.1.9 Tho Architect sballrondcr Initial doclsiona 011 claims, disputes or other matcem in question between the Owner and Contractor as provided In the Colllract Documcoa. However, the An:bllcct's dcclslo111 on matters tdatillg to acsthcdc cfl'ect shall be final if consistent wilh the intent cxpn:ssed In the Contract DocuiiiCIIfS.

§ 2.6.1 EVALUATIONS OF TilE WORK § 2.&.2.1 'The Architect. as a represeatalive of the OWIICI', sball vbit tho site atlatcnals appropriaJc ro the stage of the Contrsc:tor's operatioos, or u otherwise agreed by the Owner and the Architect in Article 2.8, (1) 10 become generally familiar with and 10 keep the Owner IDfonned about the progreaa 8IICI quality of the portion of the Work ccmplcted. (2) to eudeavor 10 guard the Owner agllillst defcets IUid deficfCIICies in the Work, and (3) lo dctcrllliDC in geaeralltlbe Worlc Is bc.iD& performed in a mllDJiel' il1clic:alina that the Work. when fulJy completed, will be in ~ with tho Coatract Docwnwts. Ho-ver. tho Arcblllll:t shaD not be rr.quln:d to mae exhaustive or conliuuous oa-sita lnspectioas ro check the quality or qwlllity ofthc Work. 'The Archirec:t shallaeilhet bave coaarol over or charge of. aor be respousib1e fur, lhe comuucdon mau, medsods, tec:baiques, sequeuces or proc:edurea, or for safety prccautiou lllld prograJD~la cOIIIICCtioD with the Work. aiuce these aro solely lhe Co~~~~'~~~:!«'a rights IIICI responslbWdes under the Contmct Documents.

§ 2.6.2.21be Arcbita:t aba1l .report 10 the OWIICI' lcaovm deviations from tho Contmct 'Doc;umcuts and from the most reecnt construction schedule submitted by lhco Coalllll:tor. Howcwr, the An:blta:t shall aot be rcapo.asiblc for the Collfr1lctor's milum to pedorm the Work Ia aa:onfaDc:e with the ~a~airemenll of the Colllr8CI Documaus. The ArcfUlect shall bo rcapoaslblo for the Architact's aegllgcat acts or omlssiou, but shall not h&ve CODirOI over or charge or ud shaD not be responsible for aciS or omlsslona of 'die ConlnCIW, SaltCOOiraelon, or their agents or employees, or of any other persODS or entities performins portlon.s of Che Work.

§ 2.6.2.311lc Architect shall at all times have u.cc:ea to lhe Worit wherever Itis in preparatioa or progress.

§ 2.6.2.4 Ell"flt as otherwise provided in this Agreement or wllendircct commUDicalions bave been ISpccially ~authorized. the Owner abalJ eadcav9r to communicate with lhe Contnu:torthrougb !be Alcbltect about mauen asising out of or rolatiog ro tho Contruct Documcnu. CoiMIIIJiic:alions by llld with the Architca's coasultaDU shall be through the Architect.

§ 2.6.2.5 The Architect 511all have authority to reject Work that does aot confonu to the Contract Documcou. Wheneva- the Architect considers It nec:euary or advisable, the Archltact wtn bave authority 10 reqaiJe inspection or testing of tho Worlc in accordaace with the provisions oftbe Contract Doc:wm:uiS. whether or notiiDI!b Work Is f'abricaled. inslaUecl or completed. However, neither litis authority of the Ardairec:t aor a decision ~ in good faith either 10 excrcbe or not to exen:ise such authority shall atw rise ro a duty or responsibility ol tho An:hitect to the Colllnetor, Subcomractors. material aad equipmtnt suppUcrs, lhdr ageaJs or employees or olher persons or Clllilies pedormlng portions of the Work.

~lmFICATION OF PJ.YM&NJS TO C:ONJRA~OR 0 ~ I U.U 'lbe J..mhlteeululll wliM"l aad Gelti[y !be ameual& due the GaaiAiotoHOd 51!1111 i&ml11 Qdfiaalfll fer Pe,o!Beat ill NGJIIlmiiiM• 'At J.oftlltiteel'li elll4ilililliAH fer payiRBHI Mall OOnsdbMI I NpR150BCIIiOI te fha Owner-, bilGed aa the hNhlleel's &'llllualioa aFihe Wadi at JIIV'Iided ia EediSR 3.G.31111d 981he date aempr¥1~tg die CeftiMSier's .~Gillan fw Pa)•mellla dun die 'A..fk bu plll&fBG&Dd le die paiat illdi11ated &5tltaf; 18 the beet er die {'lotehi~eat' e lale·Niadge, illfeHBBiiea aarl belief, 1M qualil) ar the Wedi li Ia aeueRIBBaa with die QaftiMGl '&IGIMIIIIIilftlllo 'lbe reNgaing NpRIIIellWIODG are &ubjeet U) le 1111 e•o'iillllllioa af dJe WerlE rer eeat"etmaaDe '•\lith IIU CeatRall)eGIImeRIB upea Sull!ltllnllsl Campleden1 ~ Ia ASuiiB af &\lll&el}\ll&tletltHad illspeetlaoe1 ~) le eeeeedee ef Jftiaor deYllllieM £ram lhe Ceallllet Qalltlfllllnll pl'tar ta eempledoa, Blld (4) te llflllllUle 1111llifi881iaaa ellpRIS&a d a.y lila !.oftlbiteet.

SEP 22 2007

ESG001470

75 § 3.1*2 the issiiiBMle ef a Gettiiea fof Pa,BIOIIllhoB aet be a.-prlllieftflldea 1hasllte a\falllteet lias EJ) mille eMclusllve or eondiNDIIHD silo IRSpeodoas 18 eheek die ~t~~llily oF quaatily of lha 'Aferk. Ea) IIWI&Wod loRSifUollaD ntelllti1HIOI!Iedl, leehelljlles,&efiiiBIIooa er prauell-. fl) N'Jie'o\ ed eeplas ar ftlllllisitiell roeei'JINIIieiR 811bee0118ete18 8lld-ma!eriAJ suppU1111 11811 oilier Elata NfJUIItllll"' dla g.,...., 18 lillb&l8DCieto-tbe-Ge~ pa)'llleR\ Of~) asaadaiRed •a·.u BP far whal purpa•lhe GaaiRIGiar has Hed IRBII8]' prevlausl,, paid ea aeeatHM of tile Gelltnlel Slllft:

§2.6ASUBMnTALS §2.8.4.1 The Archltcc:t 1hall review and approve or Ab olhct appropriaro acdoa upon tbc Contract.or'aiUbmlaab siiCb u Shop Dr.wlDp, Product Datil and S~les, but oaly Cor the IJmltcd purpose of cbcc:lclns for conformance wldllllf'ormadoll glvea aad tbe dc&lp coucept expressed iD the COIIIIII:t Documenll. Tbe Arcbltect's acdoa shall be .&Uco with aucb re:uonabla promptlless u to c:avre oodday lAthe Wort or lA U.ICC.IWlca of the Owner, Coatnctar or sepuate ccmlndon, while aDowlug sufticleDt time ill lbe Alch11ecl's ptO(asfollll judgmeol to permit adeqllll8 review. Review Of Such submittals is DOt coaducred for the purpose of ddamllllq lhe ueuracy IJid eomplcteftesa Of other decaila such as dimensloas and quantities. or for substaDiialiq inatructiOIIS for iDstallatioa or perfctmance of equipment or systems, all of which n~ma!Ja the mponslbiUty of t11e Conlrletor as requbed by the Coatract DoCUIIICDts. The An:bltect'a review shall nol constilute approval of safety pn:awtiou or, unless otherwise specifically Slated by the An:hltect, of auy coastrucdoo rneam, methods, k:Cimiquca, sequeoccs or procedures. The Architect's approval of 11 specific item shall not lodJcate approval of au assembly of which Ute item is a compoaenL

§ 2.6.4.21be Architect shall mailltllin ll record of submittals IUid coplea of submittals supplied by the: Contraceor in aceordance with the rcqulremaus of the Contract Doc:umenu. § 2.&..0 If professioaal design services or certifications by a design profcsaioaal related 10 syatems, maleriab or equipment are specifically mtuhed of the Cootractor by lhe Coaaact Documems, the: Arehlrect shall specify appmprialc perfoiDiaucc 1111d design criteria !hat such services mUJt sltisfy, Shop Dnlwlap 1111d other subminals relmd 10 the Wotlc dellped or certified by the dealp professional reta1ncd by the Cootractor lba1J bear such (rOf'cssioml' s written approwl when submlllcd to lhe Arcblrcct. Tho An:hJtect sllall be entitled 10 rely upoa the adr:quacy. IIIX:IIIliC)' aad complemJess of the rervic:ea, cettificatioas or 01ppi'0Vals pcrfonncd by such design pEOfessioaals.

§ 2.6.5 CHANGES IN THE WORK §.a.& S1 'Ae Alehitee& lllall pref18R1 Gluulge ORiea aod CellllfUadea GJiaaae Dmtsdves fGi' lila OwaoF's appNVal IIAd 8KIG1Jii8R ill IIBe&rdQBIIO YoiiJs lho Qelllrael 981JIIIBIIBISo 'the ArohJIIet-may &lldteftllll IBieer ehuges in Ilia Welt! nel ia·J&l'liug lllllldjUSimiiRl ill CeRIRet Sum or an e~~taMiaR af Ilia Celllfatl.+ima v.'hjeiiiiAI aansl&leBI wilh lite c ll ~ ialeRl af the Gei\lfaet QeiiUHIOBl&. IlRI!U115SIIfYo lila t\reldl'eel &Mil pNplll\\ NpFOd&ea ad dJslfibil09fawiRg!lllftd "l\ _. Speeifieadaas ta deaelibe ~!!1118 lie added, dellllad er111edified, as pm··ided ill Seeliaa :!.8,;3,

§.

§2.6.5.2 Tbc Archltect shall review properly pnpmd, dmdy requests by tile 0\Wa' or Coalractor for chiJDges Ia lhe Work, includioa adjustments to the Contnct Sum or Contract Time. A property prc:pamt n:quest for a chanae lo the Work shaD be accompllllcd by sufficient supporting dllta 110d infonnadoo to permit the Archltcct to mab a reasonable derermioadon withow extA:nSJve laveatiplioo or pmparat!on of addftioaal drawinss or specificatioas. If tbc Architect deletmlaes that requested chaages In lhe Wort are IIOtmaterially cfifl'clal1 from the requircmcals or die Conttact Documents, tho Ardlitect may l:l$ue an order for ll mioor c:llaop Ia lhe Wort or ruommend to the Owner that die requested change be denied.

§ 2.6.5.31f lhe An:hitect detenniaes that implemealation of the requested c:haagea would rcault In a mataial cbli18C to the Conlnict that may cause an adjustment in the Conlnct Tune or Conrmct Sum, the Architect shall malce a recommendatioo to the Owaer, who may authorize rurtber iavestigation or auch challge. Upon uuch authorizaiJon, and based upon infonnatioo furalshcd by the Contractor, if 11ny, tho Architect shall estimAte the addltionll cost and dme that might result from such change, lncludloi IIDY additional colla aaributable 10 a Cbaage in Services or the ~ With tho Owaer•s approval. the ArchlltQ shall iacospomtc thoao cstimalea into a Change Order or other approprlate documeatadoo Cor the Owner's execution ot negotiation with lhe CoatnlctDt.

SEP 22 2007

ESG001471

76 § ~A.6 PROJ&ef COMP&.IiRON . §2.1.1A 'J:IIe .~llireet allalleoedUIII iaspeslieRG 111 delflfllliiM lhe datu or dale& of SubBIPDiiAl Qnapllliea ud 1M da!a"Bf liiiiJI eomplel:i8Bt sMIJ teeei ue fteiB lhe G8BCNUI8f aed ~ liJ lhe 99111Brt fartha 9wae(a Nvhl·,u llld NOIIM• r:<'rillea w1111!8111ie' ed Nleted deeulllllftts ~eqlliled ltly !he Geall'llet Deeii!Mftll and usemllled lly die Cea~AS&er 1 ad sball ~eu;, a final c:.dieal8 rerPeymeal based upaa a fiaaliiiiJIBidoa lalliAiiRg llle Wed& eutBPiies willl the Nqtlittlme1115 er !he CeaiRlsl 9eGUmeal9•

§2.8.1.2 'Jkl.~~aeiiiiD shall be eeadueled U'llh die O•IJMI''a D111Jpallld Repreceallilh• le ellaelli oeeCeffaaoee er llle "taRe '1'141h lite Nqll:ireiMBII af the Geftlr&GI Dueumeats llftllle ·•r, lbe aeeuraey 111d eempleleaaes sf lhJ Dse &lllmtiHed by lila GaiiiRlater efWIHit te bil aampletad Ul' 881HDieda

§ :Y.U 'Whee lho '\\terli 18 feuad le be 5Ull51endally aampleiB& die a\rehiteel llhaB inlel'lll lhe Ow.-r ab&lll !he tlaiBBDD sf tile QeQifaeC Sllfl'l f8RIIllniag 18 IJe pllld the CeBIRIGier, laolllding llll)' ameual& aeedad 111 pay rer final ~r IIEI-Yilft aflhe~'eFII

§ 2.1.6,4 'Ala ,.,...blfeel sflaU ..-ve ffemlha CGRIJMIOF &Bd fafWRie 11!1 9Wiltff (I) IIEIBSIIBI ef511185y er IIIRIIietr if_,., re Rlduedaa 1ft eFpadial eleGSe of JC4alMco er lho -wa, of &all Jilt) IIIC'Hl llft4 Ea) alfi4s, itt, ,_lpll& teJo1lseHad wai\'819 eFlienlrer-beads iademalfyiog-tke O'MIC'f GpiNllieas.

MIJIC:I.& 2.7 FAGILA'Y OPEM110N SSRVIC:ES § 2.7.1 'Ilia ..-...Jiiteel sllaiJ moot wilh lfle..Gwl1~waer-'a Deeignllted Ropr.&IMiataiJ•e prempdy-ofter SIIIISfQBIJal Gempledaatu te¥1ew the aeed fer t.alUty apaRld&a &eflli885,

5~ Yp sa R't'leal af lila Q-rv 1114 pROF lD lbe eapilaliaa af .... year hm dla diN sf SU.IaHal Ge~~~ploli811J die a"altileGl &IIBU aaaduaf a meeling vtilh die 911'1!0f IIRd di• Goil'ller'l Deslpaled RepR~&enlathB Ill w;lew die fat~~iftllke apprepfiafe Rl88111111eMHens te lho 9v.'lilll't

ARTICLE 2.8 SCHEDULE OF SERVICES § 2.8.1 Doalgn and Conlr.lcl Admlaislralion Scnlcea beyond the following llmil& shall be provided by the Architect as a Change In Setvices in accordance with Section 1.3.3: .1 up to ~ ( 1 ) reviews of each Shop Dtawill& Product Data ilan, sample and aimiJar aubnlitcal or

.2 the ConlnctOr. up to b!! ( 2 oK ~1lte by the Architecc over the duratloo of the Projecc during ) visits to construction. 0~ .3 up to 2'&m ( n) biSpec:tio for any portion of the Work to detcnniae whether such portion of tllcoK l\ ,\ Work is substantially complecc in acc:ordaJtCe with lhc requirements of tho CoDtract Docull1ellts. ~ A upto Zm! ( 2 )illspccdonsforanyportionoftheWortctocfelcmliDeflaalcomplclloo. ~k.~-.

l § 2.8.2 ~ foll~ l>eaip and Collll3Ct Admlnbtndfcm Services shall be provided by lbc An:llllecl a a Cuutae · in.Setviccdn accorilallce with Scctioo 1.3.3: r 1 ·tev.!~ of a Contractor's submiaal out of sequence liom tho submittal schedule agreed to by tbe Architect: .2 respoDSOS to tho Contractor' a rcqucau for information whcR svch infomwloo is available to the Contractor ft'om a cam'ul study aod co~ of tho Contract Documcrlls, field conditions, other Owner-ptovidcd lnfonnatioa, Coutnctor-preparecl coordination drawings. or prlo:r Projcc:l correspoadcnco or documcnl.lldon; .3 Change Orders and Conslnletlon Change Directives rcquirlog evaluation of proposals, iucludlng the preparalioo or revilion orlnstnunenu or Service; .A pRividiDJ consultation concemlDg replacement of Wort resulting from tlrc or otber cause dudns consrructlon; .5 evalUAtion of an extcDSive number or c:Jalms submitted by the Owner' a consultants, tbe Contractor or otbets i.a connrctioa with the Went: AlA Do.__,. 8141"' -1117 p.,t 2. CapJitghl 01117, 11120, 1941, IMJ. liN, IDA. 11101, I &a. 1116&. 1567, 1tml, 1874,1977, IU'TIACI 1Wl'bf Tile Amttlcln lndlllll ol ArcllllaciL All il;lda MCmld. WtJ!I!ll«

(t2094700)

SEP 22 2007

ESG001472

77 .8 evaluadon cf subsdtulions proposed by the Owner'a c:oaaultaDta or conlmctonl and making subaequcnt revialons 10 lDslrUmcllts of SeMco RltlullliJa thetebm; .7 preparal.lon of deslp IUld documeauatlou tor lllemBie bid or proposal requens proposed by the Owac:r. or .B Colllnlet Admillisttatlon Services f10vided 60 da)'lllftu lhe dale of Substantial Compledon of the Work.

§ 2.8.3 Tbc AJchitec:t shall furnilb or ptOVide lbe foUowilla semccs only if specifically desipated:

s.Mces Rapollllbllty Location of SafVIce Dnc:rlptlon (Anlhltect, OWner or Hot Provided)

.1 PIO!ll'MIIIIila -0 .2 Land SUrvev SBMces --o .3 Geotechnical S8111!ces ---Q .4 SPBCB Sdlamul!as/Fiow CiagiBITIS .5 .6 Elddno Fdlles Surveys Ecancmlc FoaslbllitY stumea -- .7 .8 SIIB ~and Se!edion E'n\Wmnantal Sludl88 and ReDOt1s -- .9 ()y,ner.SUIIJlled Data CoordlnaUUl --1 .10 ScheduleD and ~ .11 CiviDe~ -----.! .12 I ,..,...__ Design ~ .13 Interior Design ~·

.14 SJ)Cidal 8ldllln9 or Nlillltlallon ----:! .15 Valua Analysis :--1 .16 DetaUIId Coat Estimating ~ .17 On-6ite Ptoloct Re!lmlenlation -! .18 Construdlon Management -0 .19 stali:uP_Assistance- ' --Q. .20 Realrd DrMngs --·Nf .21 Post.COn1racl Evahlation --~:if .22 Tenant-Relatad Services -Ill: .23 .24 .25

Description of Scrvlcc:a. (ln.Sflt th.scrlptioru of tht: .services dnianoted.)

ARTICLE 2.9 MODIFICATIONS § 2.9.1 Modifications 10 thls Standard Form of Architect's Services: Design and Cootrac:C Adminis1ratioo. If any, ~~n: as follows:

NA Dclclllnanl B141tM •11117 Pin 2. Copyrlghl 0 11117, 111211, 11148, 111151, 11163, 11118, 111111, 111113. 1968, 11187, 111711, 11174, 1877, 1111711111 11117~Tho Amcrlcln ~al ARIIIlecll. All rlgllta Nl&fftd. WtRMNO: lbla AlA• DcWIIMnlll protlcled llf U.S. CepyriQIII LIIW llrld lnlmtalloal Tre&.la. g

tiD. 1DOOI$820$ I wlllcll CIICPha on 2/16120118, and Is not far r!ISII& u..r Noln: - s CAN N. ED lll'llulhGrlad rwprodu~on Ill' dlalrlbl.IUon ollllls Alii Doc&ulmll, ot lillY portion G111, mar ruultln _ .. c:l'flllllld crtmlllll pcnalllel, and Wll be posec:utecltothemolmum ulcllt poeslbla under the law, 'TIU lfOcUIIIttll- JlfOdwodbyAIAIOIIMintll t0143:17mDSIZll2iJOSundtt0tCW

(1209&700)

SEP 22 2007

ESG001473

78 AlA eo-ta1n•-1m P111 :z. eoprrt;~~t o t917, 1911.1941, 1851,1853,1858, 1G61,1H3, 1968,1867,1870. 187•, um. 1ta7w11117byTtta .AmorlcAn muaa. olkclll-. All rl;hta .....-..d. WARNIHCJ: Tltla ~A· Dooumonl bprotoc:lltd by U.S. CoJifntiM L-IIIID I n - Tfelllln. llnaulhortmd r.produc:tiOn ot dlllri!JUIIDII Df IIIIa PJA• Document, or lftJ pcrtlan of II. m-v mullin _ , . chill and criminal penaJU.a,llld will Ill 10 pr0$0CIItad lo IIIII IIWIImum odont ponllllo undft'Uio law. Tills dDaumerlt- plllllwed by AlA scftlnro a1 10:43:17 Dll 03I2$'2GD5 vndDr o.t No. fDDD1562103_1 'WIUI:h Gl~Pos on 2/Uill!OD&.IIId is nd lot ttMIL llhrllola: SCANNED (11!0N700)

SEP 22 2007

ESG001474

79 CAUSE NO. D-1-GN-10-002325

RLJ II-C AUSTIN AIR, LP; RLJ II-C § IN THE DISTRICT COURT AUSTIN AIR LESSEE, LP; AND RLJ § LODGING FUND II ACQUISITIONS, § LLC, § § Plaintiffs, § § vs. § § EBCO GENERAL CONTRACTOR, LTD; § EBCO ADVANCED BUILDING SYSTEM, § 200TH JUDICIAL DISTRICT LTD; EBCO/WARRIOR MANAGEMENT § LLC; ELNESS, SWENSON, GRAHAM § ARCHITECTS, INC.; MARK G. § SWENSON, INDIVIDUALLY, TERRA CON § CONSULTANTS, INC.; TODD E. § SWOBODA, P.E., INDIVIDUALLY; MBA § STRUCTURAL ENGINEERS AND § ANDREWT. MARLIN, P.E. INDIVIDUALLY, § § Defendants. § TRAVIS COUNTY, TEXAS

VERIFICATION

STATE OF TEXAS § § COUNTY OF DALLAS §

BEFORE ME, the undersigned authority, on this day personally appeared Paul

Mittendorff, who, after being duly sworn, stated under oath that he is a Principal and Vice

President of Elness, Swenson, Graham Architects, Inc., a named party in this action; that he has

read the above and foregoing Defendants and Counter-Claimants Elness, Swenson, Graham

Architects, Inc. and Mark G. Swenson's First Amended Answer and Original Counterclaim for

Declaratory Judgment; and that every denial and statement contained in Sub-Section C, Verified

VERIFICATION PAGE I OF2 525314.1 00402/0122

44 Denials, of Section I, First Amended Answer nrc within his personal knowledge and arc lmc nnd

con·cct.

ELNESS, SWENSON, GRAHAM ARCUITECTS, INC. by PAUI.MtTI"ENDORFF

SUBSCRIBED AND SWORN TO BEFORE ME on this the "00 day of December,

2011.

~f:\r"MMI::LA J. STENZEL Notary Public-Minnesota ElQ!IronJan 31,2015

Vmtii'ICATION PAGE20F2 525314.1 00402/0122