EXHIBIT 10.2
 
CONSTRUCTION CONTRACT
 
This Construction Contract (“Contract”) is made and entered into as of the 2nd
day of August, 2002, by and between JAMESON INNS, INC., a Georgia corporation,
and JAMESON PROPERTIES OF TENNESSEE, L.P., a Tennessee limited liability company
(hereinafter collectively referred to as “Owner”), and KITCHIN DEVELOPMENT AND
CONSTRUCTION COMPANY, LLC, a Georgia limited liability company (hereinafter
referred to as “Contractor”).
 
WHEREAS, the Owner desires that a 68-room three-story motel building and
specified appur-tenances (hereinafter referred to separately as the “Structure”)
be constructed on that certain tract of real property situated in West Monroe,
Louisiana; and that an additional 20-room, two-story motel building and
specified appurtenances (also a “Structure” and in the aggregate,
“Structures”)be constructed on that certain tracts of real property situated in
Tullahoma, Tennessee; each of which is more fully described on Exhibits A-1 and
A-2 hereto (each of which is separately referred to as the “Property”); and
 
WHEREAS, Contractor desires to build the Structure on each Property pursuant to
the terms and conditions of this Contract (each separately referred to as the
“Project”).
 
NOW THEREFORE, in consideration of the mutual covenants and agreements contained
herein, the parties do hereby agree as follows:
 
ARTICLE I
Contractor’s Duties
 
Section 1.1.  Work to Be Performed by Contractor.    Contractor shall erect and
complete, in a substantial and workmanlike manner, the Structures for Owner upon
the Property for the Contractor’s Fee hereinafter set forth.
 
Section 1.2.  Architect’s Plans and Specifications.    The Structures shall be
constructed and completed in conformity with the detail of the plans and
specifications prepared by Albert S. Jolly & Associates, A.I.A. (the
“Architect”) for each such Structure, all of which said plans, specifications
and blueprints and addenda thereto as permitted for use in the construction of
the Structure (the “Plans”), a summary of which is set forth in Exhibits B-1 and
B-2 attached hereto; provided, however, that Contractor may make such changes,
modifications, additions or alterations in the work to be performed hereunder as
may be necessary to meet applicable building codes, zoning require-ments and
such other rules, requirements or restrictions as may apply to the Structure, in
accordance with the Change Order procedure described in Section 7.1 below.
 
Section 1.3.  General Scope of Contractor’s Duties.    The scope of the work of
the Contractor for each Project is described in the Plans and Exhibits B-1, with
respect to a interior building, and Exhibit B-2, with respect to a 16-room or
20-room building, and it is agreed by the parties that the work of the
Contractor includes, but is not limited to, the following items:
 
A.  Supervision.    Contractor shall supervise the construction of the Structure
on each Property in order to ensure the proper construction of the Structure
according to the

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specifications contained in the Plans. Contractor shall supervise all
subcontractors performing work on the construction site as well as the suppliers
furnishing materials for use in the construction of the Structure. All such work
performed and materials furnished shall be in compliance with the details set
forth in the Plans.
 
B.  Progress Reports.    By the fifth day of each month, Contractor shall submit
to Owner construction reports detailing the progress of the construction of the
Structure to the end of the prior calendar month, an estimate of work to be
completed and the time required for completion.
 
C.  Subdivision Utilities and Common Elements.    Contractor shall be
responsible for promptly repairing and restoring all utility services and common
elements of the subdivision which may be damaged or destroyed during
construction.
 
D.  Project Development.    The Contractor’s Fee shall include all associated
Project development costs, including, but not limited to, site selection and
staffing of the Project, furniture, fixtures and equipment, linens, towels and
related inventory, operating systems, personal computer and operating systems.
 
ARTICLE II
Contract Price
 
Section 2.1.  Cost of Construction - Reimbursement of Contractor.    For
construction of the Structures in the aggregate and other improvements and
payment of all of the costs and expenses thereof, Contractor shall be paid the
sum of $4,878,000.00 (the “Contractor’s Fee”), subject to the provisions of
Section 2.4. The Contractor’s Fee shall be payable to Contractor within five
days after the end of each calendar month for work performed during such month
as the construction of the Structures progresses, based upon payment requests
certified by Contractor. All monthly payments made to Contractor shall be
subject to a 10% retention by Owner. The cost and expense of construction
referred to in the prior sentence shall mean all actual costs incident to the
proper performance of the work during the construction phase of the Structures
and in readying the Structures for occupancy and operation which are paid or
incurred by or on behalf of the Contractor, including, without limitation, all
building materials and supplies, and costs of the parking lot, swimming pool,
fitness center and equipment, driveways, acceleration/deceleration lanes, curbs
and gutters, furniture, fixtures, equipment and the sign to be erected on each
Property, all in accordance with the Plans and the applicable Exhibit B. Owner
hereby agrees that, within 60 days after receipt of Contractor’s certification
of completion and other documents required pursuant to Section 2.2, payment will
be made to Contractor of the balance of the Contractor’s Fee (including all
amounts retained by Owner) due hereunder, except as otherwise provided in
Section 2.2 below; provided, however, it is contemplated that the Owner may
contribute a particular Property to a wholly owned subsidiary which in turn may
contribute the Property to a partnership for which such subsidiary serves as
managing general partner (the “Partnership”) upon completion of the Structure
and such wholly owned subsidiary and/or the Partnership may assume the Owner’s
obligations hereunder. Contractor expressly covenants that if the total costs
and expense of construction of the Structures in accordance with the Plans
(subject to approved Change Orders) exceed the Contractor’s Fee, Contractor has
an independent obligation to pay such excess amounts out of its own funds
without

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any right of reimbursement or repayment from the Owner. For purposes of making
payments hereunder based on completion of a Structure, the amount to be held
back with respect to each Project and to establish a pro rata cost of each
Structure, the Contractor’s Fee shall be allocated to each Property as set forth
in Exhibit C hereto.
 
Section 2.2.  Contractor’s Certification of Completion.    The Contractor shall,
upon final completion of its work hereunder in accordance with the Plans and the
applicable Exhibit B and any agreed modification thereof, submit a written
request to the Owner for final inspection. Within ten days following the request
for final inspection, the Owner and Contractor shall make a joint inspection of
the work and Owner shall furnish Contractor detailed written lists, if any, of
any variances in construction of the Structures from the requirements of the
Plans, including the identification of any work that does not meet the standards
of performance required under the terms of this Contract, Exhibits B-1 and B-2,
and the Plans.
 
Upon receipt of the written list of incomplete work or defects, the Contractor
shall immediately remedy such variances or defects in a workmanlike manner, or
notify the Owner upon receipt of such lists that it does not consider the
specified item to be a variance or defect. All disputed items will be submitted
in writing to the Architect who shall render a decision as soon as practicable,
which decision will be binding on both parties.
 
When the Contractor and Owner have agreed that the written list of incomplete
work or defects has been completed in a workmanlike manner, the Contractor shall
certify in writing to the Owner the completion of the Structure and furnish the
Owner a sworn statement executed by Contractor certifying that there are no
liens or rights of liens against the Structure or the Property as a result of
the work performed by or on behalf of the Contractor hereunder and shall deliver
waivers or releases of all lien rights duly executed by all subcontractors and
suppliers who furnished labor or materials for the work.
 
Section 2.3.  Construction Period Interest.    The Contractor shall reimburse
the Owner out of the Contractor’s Fee an amount equal to (i) all interest
incurred by the Owner on amounts borrowed by Owner to finance the purchase of
each Property and the construction of the Structure thereon for the period
commencing upon the date Owner purchases the Property and ending on the date
Contractor certifies completion of the Structure pursuant to Section 2.2 above
plus (ii) all fees charged by Owner’ s lender to provide construction financing
for the Project; provided further, if Owner uses its own funds to purchase the
Property or pay construction costs in lieu of borrowing funds from a third
party, Contractor shall pay owner interest on such funds at the same rate
charged to Owner on funds borrowed from its primary lenders. Contractor shall
reimburse or pay Owner for such interest upon completion of the Structures.
 
Section 2.4.  Profit Limitation.    If the total costs incurred by Contractor
for the work performed under this Contract are less than an amount equal to 90%
of the Contractor’s Fee, Contractor shall rebate to Owner that portion of the
Contractor’s Fee which is in excess of 110% of the total costs incurred by
Contractor for the work performed under this Contract. For purposes of this
Section 2.4, costs incurred by Contractor for work performed under this Contract
shall include all costs that can be capitalized in accordance with generally
accepted accounting principles (including, but not limited to, an allocation of
Contractor’s general and administrative overhead costs and the construction
period interest reimbursed to Owner) and such other general and administrative

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costs properly allocable to the Project, but not capitalized. Owner shall have
the right, at its expense, to audit the records of Contractor to verify the
costs and overhead incurred by Contractor for the work performed under this
Contract.
 
ARTICLE III
Materials and Labor of Contractor
 
Section 3.1.  Materials and Labor of Workmanlike Quality.    All materials and
equipment to be furnished by the Contractor in the performance of this Contract
will be of good quality and new, unless otherwise specified in Exhibit B-1,
Exhibit B-2, or the Plans. All work and labor of the Contractor and its
subcontractors will be performed in a workmanlike manner utilizing a qualified
and experienced work force.
 
Section 3.2.  Furnishing Scaffolding, Tools and Machinery.    Contractor will
provide at its sole cost and expense all scaffolding, tools and machinery
necessary for the performance of Contractor’s work hereunder.
 
Section 3.3.  Payment of Subcontractors and Material Suppliers.    Contractor
shall pay upon receipt from each third party, all proper invoices, bills and
statements of any subcontractor or materialman performing work upon the
Structure or supplying materials to the Property, subject to Contractor’s right
to contest in good faith the amount it believes to be due through appropriate
proceedings. Contractor warrants that upon completion, the Structure and the
Property will be free from any materialmen’s or mechanics’ liens or other
lienable claims other than those it has discharged as a lien against the
Property and has chosen to contest in good faith.
 
Section 3.4.  Subcontractors’ Compliance with Plans.    Contractor specifically
agrees that any and all subcontractors and materialmen which Contractor uses in
the construction of the Structure shall comply with the Plans and any
modifications thereof made in accordance with this Contract.
 
ARTICLE IV
Site Preparation and Inspection
 
Section 4.1.  Site Preparation.    Prior to Contractor’s commencement of
construction of a Structure, the Property on which such Structure is to be built
will be fully prepared for construction of the Structure at Contractor’s sole
cost and expense, including, without limitation, preparation of a legal
description of the Property, preparation of civil engineering plans and
specifications, if required, clearing, leveling, topography, core analysis,
compaction, survey, access to utilities, zoning approval, curb cut
authorizations and approvals and all other governmental or regulatory
authorizations and approvals.
 
Section 4.2.  Site Inspection.    Contractor represents that it has had each
Property inspected by qualified engineers and is fully familiar with the
conditions thereof. The engineers have conducted core tests and tests of subsoil
conditions of each Property and have issued analytical

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reports with respect to such tests. Contractor specifically agrees to construct
each Structure in accordance with the requirements detailed in such engineering
reports.
 
ARTICLE V
Permits, Surveys and Governmental Authority
 
Section 5.1.  Permits, Surveys and Governmental Authority.    Contractor shall
obtain all necessary permits from proper governmental authorities and shall
comply with all applicable laws, ordinances, bylaws or regulations, in
connection with the construction of the Structures. The fees or costs of any
permits, governmental authorization or inspection, as well as for infraction or
violation of governmental requirements or expenses or damages resulting
therefrom, shall be borne solely by Contractor.
 
ARTICLE VI
Time of the Essence
 
Section 6.1.  Time of Commencement and Completion of Contractor’s Work.    Time
is of the essence in this Contract. Contractor shall promptly commence its work
hereunder following the date of execution of this Contract and shall continue
such work with due diligence until completed in accordance with the applicable
Exhibit B and the Plans. Each Structure is to be completed and delivered in a
finished condition by Contractor and all work is to be completed in a period of
180 days from the date Contractor obtains all building permits necessary to
commence the respective Project. The time for completion by Contractor may be
extended beyond the 180 day period where delay and work stoppages are occasioned
by adverse weather conditions, strikes, acts of God, labor or material shortages
or other causes beyond the Contractor’s control and which it is unable to avoid
in the exercise of reasonable and due diligence. Such completion time will also
be extended where additional time is required to complete any alterations or
modifications made by agreement of the parties in the plans, blueprints, or
specifications after commencement of construction. Such time will also be
extended where delays are occasioned in the performance of the Contractor’s work
by the unreasonable acts of the Owner or Owner’s agents. Any extension of time
of completion for any of the causes herein enumerated shall be reasonable
considering the type of work to be performed and the cause for delay. In the
event that the parties cannot agree to a mutually agreeable extension, the
dispute shall be submitted to the Architect for resolution as provided in
Section 2.2 above.
 
ARTICLE VII
Additions, Modifications and Alterations
 
Section 7.1.  Written Change Orders.    It is specifically understood and agreed
that the Owner may make additions, modifications, alterations or substitutions
in the work of the Contractor to be performed hereunder by adding to, omitting
from or deviating from the attached plans, blueprints and specifications.
Provided, however, that any additions, deletions, omissions or substitutions
must be evidenced by a written change order fully executed by all of the parties
hereto on a change order form to be provided by the Contractor. All such change
orders shall contain or

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reflect the value of any additional or other work or materials and the amount so
agreed upon shall be added to or deducted from the Contractor’s Fee as herein
set forth. All written change orders shall be dated and attached to this
Contract as an additional exhibit or addendum thereto and shall be made a part
hereof. The provisions of this Contract shall apply to all additions, deletions,
omissions or substitutions with the same effect as if such were embodied in the
original the Plans. No claim for any additions, deletions, omissions or
substitutions to this Contract or delay in completion attributable to any change
in the work shall be valid unless authorized by the parties hereto, as evidenced
by a fully executed change order.
 
ARTICLE VIII
Inspections and Corrections of
Defective Work during Construction
 
Section 8.1.  Municipal Building Inspections.    All required governmental
inspections of the Contractor’s work shall be requested and obtained by the
Contractor as required by law. Contractor shall give all notices and comply with
all building codes and other regulations, ordinances, rules and laws of all
governmental bodies or authorities having jurisdiction over any phase of
Contractor’s work covered hereby and shall keep the Owner indemnified against
all fines, penalties and losses incurred by reason of any breach of this
covenant.
 
Section 8.2.  Authorized Owner Inspections.    Contractor shall facilitate
inspection and shall allow the Owner, any authorized representative, architect,
engineer, any lending institution committed to lend money to the Owner or any
public authority to inspect the plans, specifi-cations or the structural work in
progress at any reasonable time and under any reasonable conditions.
 
Section 8.3.  Cost of Non-Conforming Work.    If during the course of
construction any work fails to conform to the Plans or if the architect or any
municipal inspector should point out to Contractor any work failing to conform
to the Plans or any agreed modifications thereof, or the Contractor should
observe any work failing to conform to the Plans or any agreed modification
thereof, or any inspecting authority should refuse to approve work performed by
Contractor, or any subcontractor under its authority during the course of
construction, the Contractor shall promptly remove from the premises all such
work which is finally determined by proper authority not to conform to the Plans
and any modifications thereof, or which is finally determined by proper
authority not to meet the requirements of governmental authorities. Contractor
shall promptly replace or cause to be replaced its own work or the work of its
subcontractors in accordance with the Plans and any modifications thereof and
without any expense to the Owner. Contractor shall bear the expense of making
good all work destroyed or damaged by such removal or replacement.
 
Section 8.4.  Contractor’s Negligence.    The Contractor shall also correct
without compensation any work improperly performed and shall bear the expense of
correcting all damage caused to the improvements by Contractor, or any
subcontractor acting under its authority, due to the negligence of the
Contractor or the negligence of any agent or employee of Contractor, its
subcontractors or suppliers.

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ARTICLE IX
Insurance, Indemnity and Taxes
 
Section 10.1.  Contractor’s Indemnity and Insurance.    Contractor shall
indemnify and hold harmless Owner from and against claims, damages, losses and
expenses, including but not limited to attorney fees, arising out of or
resulting from performance of work or any obligation of Contractor under this
Contract. Contractor shall provide, maintain and pay for all insurance necessary
to fully protect Contractor and Owner from claims or damages to any person
whomsoever, whether a workman or a member of the general public, property damage
or bodily injury, including death, which may arise from and during the
performance of Contractor’s work pursuant to this Contract, whether such
operations and work under this Contract be by the Contractor itself or by any of
its subcontractors or anyone directly employed by them or any of their agents.
Contractor shall also carry such insurance as necessary to fully protect
Contractor and Owner as their interests may appear from any damage by fire or
normal extended coverage risk caused to the Structures being constructed by
Contractor pursuant to the terms hereof. Such insurance shall be procured and
maintained by Contractor until completion of its work and shall include without
limitation the following policies:
 
A.  Workers’ Compensation Coverage.    Contractor shall comply with applicable
workers’ compensation laws and shall be fully responsible for ascertaining that
all of the subcontractors comply with said laws.
 
B.  Builder’s Risk Insurance.    Contractor shall carry builder’s all-risk
insurance providing for coverage normally and customarily included therein. Such
all-risk insurance shall be extended only to the work of the Contractor
hereunder and any subcontractor, employee or agent working under the
Contractor’s supervision or control. Until the work of the Contractor is fully
completed and final, and payment made by the Owner to the Contractor, the
Contractor shall promptly repair at no cost to the Owner any damages to any
portion of the Contractor’s work caused by fire, explosion, lightning,
hailstorm, flood, tornado, riot, civil commotion or any other hazard that may
result in damage to or destruction of any portion of the work of the Contractor.
Even though the Owner may be named as an additional insured in the all-risk
insurance to be furnished by the Contractor, until the work of the Contractor is
completed and final payment of the Contractor’s Fee made here-under, all
proceeds from said insurance shall be paid over to the Contractor as
reim-bursement for work required to be done by reason of the damage covered by
said insurance policy or policies.
 
Section 9.2.  Furnishing Certificates of Insurance.    Contractor shall submit
to Owner, prior to commencement of any work hereunder, certificates of all the
insurance required to be procured and maintained by the Contractor hereunder.
All insurance policies required of the Contractor shall be issued by an
insurance company duly licensed to do business in the state wherein the Property
is located. No material change or alteration shall be made in any of these
policies or the same canceled without thirty days’ prior written notice to the
Owner.

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ARTICLE X
Assignment of Contract by Contractor
 
Section 10.1.  Assignment Prohibition.    Contractor may not assign this
Contract or performance of its work hereunder without prior written consent of
the Owner. This provision shall not be construed, expressly or impliedly, as
prohibiting the Contractor from subcontracting all or any portion of the work to
be done hereunder; provided that the Contractor will continue to be responsible
for all of its obligations under the Contract.
 
ARTICLE XI
Material Liens
 
Section 11.1.  Timely Discharge of Liens.    Any materialmen’s or mechanic’s
lien filed against the property for work claimed to have been done or performed
or materials claimed to have been furnished by the Contractor or any
subcontractor or material supplier of the Contractor, shall be discharged by the
Contractor within 40 days from the date of such filing, except and unless such
lien is the responsibility of the Owner as provided in the following sentence.
Any materialman’s or mechanic’s liens filed against a Property for work
performed or materials furnished solely at the direction or upon the order of
the Owner shall be the sole responsibility of the Owner and not the Contractor.
 
ARTICLE XII
Contractor’s Warranty and Documentation
 
Section 12.1.  Express One Year Warranty.    Contractor hereby expressly
warrants all materials and labor furnished by the Contractor in the performance
of its work hereunder. This warranty shall be for a term of one year, and shall
commence on the final date of issuance of all Certificates of Occupancy from all
governing agencies having jurisdiction over the respective Project. This one
year warranty shall apply to work done by the Contractor and all subcontractors
of the Contractor and materials furnished by them or any supplier of the
Contractor or any sub-contractor. The Contractor does hereby expressly agree to
remedy any patent or latent defects appearing in the work of the Contractor
within said one year warranty. No payment by Owner to Contractor of any kind or
occupancy and possession of the dwelling by the Owner shall constitute or be
construed in any manner to be acceptance or waiver of any patent or latent
defects in workmanship or materials furnished by the Contractor hereunder.
 
This one year warranty is in lieu of any other warranties or guaranties of the
work of the Contractor, expressed or implied, except as is provided in Sections
1.2, 2.1 and 3.1 of this Contract, and these provisions of the Contract
constitute the sole warranty of the Contractor to the Owner hereunder. There are
no expressed or implied warranties of fitness, quality or workmanship or of
materials or any warranty of any nature with regard to the work of the
Contractor hereunder, either expressed or implied, except as specifically set
forth in this numerical paragraph and in Sections 1.2, 2.1 and 3.1 of the
Contract. However, nothing herein contained will be construed to preclude the
Owner from receiving the benefits of any manufacturer’s or supplier’s warranties
or guaranties

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relating to any electrical, mechanical and plumbing equipment and appliances
furnished by such manufacturer or supplier, which Contractor hereby assigns to
Owner.
 
This numerical paragraph shall survive the closing of this transaction and final
payment by the Owner to the Contractor.
 
Section 12.2.  Project Closeout Documentation.    The Contractor shall provide
the Owner with a minimum of one set of complete project record documentation for
each Project, including, but not limited to, the following:
 

 
•
 
Permitted plans, specifications and addenda

 
•
 
Change Orders and other modifications to the Contract

 
•
 
Field Orders or other written instructions

 
•
 
Approved shop drawings, product data and samples

 
•
 
Field test records

 
•
 
Operation and maintenance manuals

 
•
 
Certificates of Occupancy

 
•
 
Names, addresses and telephone numbers of major subcontractors and vendors

 
•
 
Warranties

 
•
 
Contractor’s Affidavit of Release of Liens

 
•
 
Contractor’s Affidavit of Payment of Debts and Claims

 
ARTICLE XIII
Default of Contractor
 
Section 13.1  Owner’s Right to Terminate.    If the Contractor should neglect to
prosecute its work diligently or fails in any way to perform any provisions of
this Contract or shall become insolvent or make an assignment for the benefit of
its creditors or a voluntary or involuntary bankruptcy petition shall be filed
by or against the Contractor, the Owner shall have the right, if the Owner so
elects and without prejudice to any other rights or remedies Owner may have by
the terms of this Contract or by law and after giving Contractor seven days
written notice, terminate this Contract and take possession of the Property and
all materials, tools and appliances thereon and finish the work by whatever
method Owner deems expedient.
 
ARTICLE XIV
Work Stoppage by Owner
 
Section 14.1.  Contractor’s Right to Terminate.    Should the work of the
Contractor hereunder be stopped through the unreasonable act or unreasonable
neglect of the Owner for a period of ten days, then the Contractor, upon seven
days’ written notice to the Owner, may terminate this Contract and recover from
the Owner payment for all work performed and materials furnished to the date of
termination.

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ARTICLE XV
Miscellaneous Covenants and Agreements
 
Section 15.1.  Removal of Waste Materials.    Contractor shall at all times keep
the premises free from accumulations of waste materials or rubbish caused by the
work. Upon the completion of the work of the Contractor hereunder, the
Contractor shall remove all rubbish and waste materials from and about the
Structures and leave the premises “broom clean” or its equivalent.
 
Section 15.2.  Notice and Communications.    All notices, communications or
certi-fications required or which may be given pursuant to the provisions of
this Contract shall be sent by certified mail or delivered to Owner at 8
Perimeter Center East, Suite 8050, Atlanta, Georgia 30346-1604, and to
Contractor at 8 Perimeter Center East, Suite 8050, Atlanta, Georgia 30346-1604.
All such notices, communications or certifications to be given pursuant to this
Contract shall be deemed to be properly served if reduced to writing and
delivered personally, mailed first class postage prepaid, sent via air express
delivery service or given telephonically via facsimile transmission. The date of
service of the notice, communi-cation or certification served by mail shall be
the date on which the same is deposited in any United States Post Office with
postage prepaid addressed and sent as aforesaid. The date of service of a
notice, communication or certification delivered personally or via delivery
service or facsimile shall be the date that the same is in fact so delivered.
Place of service of notices may be changed by either party upon prior written
notification to the other party.
 
Section 15.3.  Change in Ownership of Subject Premises.    No change in the
ownership of a Structure however accomplished shall relieve the Owner of the
joint and several obligation and primary responsibility for the performance of
each of the terms and covenants herein contained and the payment of the
Contractor’s Fee unless otherwise agreed upon in writing by Owner and
Contractor. Any transfer of any interest by the Owner in a Structure shall be
expressly subject to the obligations, covenants and agreements herein contained
unless otherwise agreed upon in writing by Owner and Contractor. Any transferee
must specifically assume and agree to be bound by all the terms and covenants of
this Contract.
 
Section 15.4.  Entirety.    This Contract constitutes the entire understanding
and agreement by and between the parties hereto and supersedes any and all
previous oral or written negotiations, contracts, agreements or representations
regarding the subject matters hereof. No prior statements or representations not
incorporated in this Contract shall be binding upon either party hereto. Any
modification or amendment of the terms of this Contract in order to be binding
must first be reduced to writing, dated and signed by all parties hereto. No
waiver of any of the terms of this Contract shall be binding unless reduced to
writing, dated and signed by the party or parties sought to be charged
therewith.
 
Section 15.5.  Duplicate Originals.    Any fully executed copy of this Contract
shall be considered for all purposes an original hereof.
 
Section 15.6.  Binding Effect.    This Contract shall be binding upon and inure
to the benefit of each of the parties hereto, it or their respective successors
and assigns, where assignment is permitted hereunder.

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IN WITNESS WHEREOF, the parties hereto and each of them have executed this
Contract the day and year first above written.
 
 
ATTEST:
 
 
/s/ STEVEN A. CURLEE

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Secretary
[SEAL]

      
JAMESON INNS, INC.,
a Georgia corporation
 
 
By:                                 /s/ CRAIG R. KITchin

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Craig R. Kitchin, President

 

        
JAMESON PROPERTIES OF TENNESSEE, L.P.,
a Tennessee limited partnership
 
By: Kitchin Hospitality, LLC, General Partner
 
 
By:                                 /s/ CRAIG R. KITCHIN

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Craig R. Kitchin, President
 
“OWNER”
 

 
 
ATTEST:
 
 
/s/ STEVEN A. CURLEE

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Secretary
[SEAL]

      
KITCHIN DEVELOPMENT AND
CONSTRUCTION COMPANY, LLC,
a Georgia limited liability company
 
 
By:                                 /s/ JOSEPH H. RUBIN

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Joseph H. Rubin, President-Construction
 
“CONTRACTOR”

 

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EXHIBIT C
 
Allocation of Contractor’s Fee
 
Property

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No. of Rooms

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Allocated Portion of Contractor’s Fee

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Tullahoma, TN -Phase II
  
(20 rooms)
         
$   900,000
West Monroe, LA
  
(68 rooms)
         
3,978,000
                

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Total
              
$4,878,000

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