Exhibit 10.54

Alexandria, Virginia (Courtyard)

PURCHASE CONTRACT

between

ALEXANDRIA HOTEL, A FLORIDA GENERAL PARTNERSHIP

(“SELLER”)

AND

APPLE SEVEN HOSPITALITY OWNERSHIP, INC.

(“BUYER”)

Dated: May 4, 2007

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TABLE OF CONTENTS

 

     Page No.

ARTICLE I    DEFINED TERMS

   1           1.1    Definitions    1

ARTICLE II    PURCHASE AND SALE; PURCHASE PRICE; PAYMENT; EARNEST MONEY DEPOSIT

   6

          2.1

   Purchase and Sale    6

          2.2

   Intentionally Deleted    7

          2.3

   Purchase Price    7

          2.4

   Allocation    7

          2.5

   Payment    7

          2.6

   Earnest Money Deposit    7

          2.7

   Existing Loan    8

ARTICLE III    REVIEW PERIOD

   8

          3.1

   Review Period    8

          3.2

   Due Diligence Examination    9

          3.3

   Restoration and Indemnity    10

          3.4

   Seller Exhibits    10

          3.5

   As-Is, Where-Is Sale; Limitation on Representations and Warranties    10

ARTICLE IV    SURVEY AND TITLE APPROVAL

   11

          4.1

   Survey    11

          4.2

   Title    11

          4.3

   Survey or Title Objections    11

ARTICLE V    MANAGEMENT AGREEMENT

   12

ARTICLE VI    BROKERS

   12

ARTICLE VII    REPRESENTATIONS, WARRANTIES AND COVENANTS

   13

          7.1

   Seller’s Representations, Warranties and Covenants    13

          7.2

   Buyer’s Representations, Warranties and Covenants    16

          7.3

   Survival    17

          7.4

   Knowledge    17

ARTICLE VIII    ADDITIONAL COVENANTS

   17

          8.1

   Subsequent Developments    17

          8.2

   Operations    17

          8.3

   Third Party Consents    19

          8.4

   Employees    19

          8.5

   Estoppel Certificates    19

          8.6

   Access to Financial Information    19

          8.7

   Bulk Sales    20

          8.8

   Indemnification    20

 

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          8.9

   Escrow Funds    22

          8.10

   Liquor Licenses    23

          8.11

   Defeasance    23

ARTICLE IX    CONDITIONS FOR CLOSING

   23

          9.1

   Buyer’s Conditions for Closing    23

          9.2

   Seller’s Conditions for Closing    24

ARTICLE X    CLOSING AND CONVEYANCE

   24

        10.1

   Closing    24

        10.2

   Deliveries of Seller    25

        10.3

   Buyer’s Deliveries    26

        10.4

   Escrow Delivery Date    27

ARTICLE XI    COSTS

   27

        11.1

   Seller’s Costs    27

        11.2

   Buyer’s Costs    27

ARTICLE XII    ADJUSTMENTS

   28

        12.1

   Adjustments    28

        12.2

   Reconciliation and Final Payment    29

        12.3

   Employees    30

ARTICLE XIII    CASUALTY AND CONDEMNATION

   30

        13.1

   Risk of Loss; Notice    30

        13.2

   Buyer’s Termination Right    31

        13.3

   Procedure for Closing    31

ARTICLE XIV    DEFAULT REMEDIES

   31

        14.1

   Buyer Default    31

        14.2

   Seller Default    31

        14.3

   Attorney’s Fees    32

ARTICLE XV    NOTICES

   32

ARTICLE XVI    MISCELLANEOUS

   33

        16.1

   Performance    33

        16.2

   Binding Effect; Assignment    33

        16.3

   Entire Agreement    33

        16.4

   Governing Law    33

        16.5

   Captions    33

        16.6

   Confidentiality    33

        16.7

   Closing Documents    33

        16.8

   Counterparts    33

        16.9

   Severability    34

        16.10

   Interpretation    34

        16.11

   (Intentionally Omitted)    34

        16.12

   Further Acts    34

        16.13

   Liability    34

        16.14

   Notice of Proposed Listing    34

 

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SCHEDULES:

EXHIBITS:

  

Exhibit A

   Legal Description

Exhibit B

   List of FF&E

Exhibit C

   List of Hotel Contracts

Exhibit D

   Consents and Approvals

Exhibit E

   Environmental Reports

Exhibit F

   Claims or Litigation Pending

Exhibit G

   Escrow Agreement

 

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PURCHASE CONTRACT

This PURCHASE CONTRACT (this “Contract”) is made and entered into as of May 4,
2007, by and between ALEXANDRIA HOTEL, a Florida General Partnership( “Seller”)
with a principal office at c/o Robert Stirk, 12221 NW 7th Drive, Coral Springs,
FL 33071 and APPLE SEVEN HOSPITALITY OWNERSHIP, INC., a Virginia corporation,
with its principal office at 814 East Main Street, Richmond, Virginia 23219, or
its affiliates or assigns (“Buyer”).

RECITALS

A. Seller is the fee simple owner of that certain hotel property (the “Hotel”)
known as the Courtyard by Marriott – Alexandria, located at 2700 Eisenhower
Avenue, Alexandria, Virginia 22314 and identified in on Exhibit A attached
hereto and incorporated by reference.

B. Buyer is desirous of purchasing the Hotel from Seller, and Seller is desirous
of selling the Hotel to Buyer, for the purchase price and upon terms and
conditions hereinafter set forth.

AGREEMENT:

NOW, THEREFORE, in consideration of the foregoing Recitals, the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

ARTICLE I

DEFINED TERMS

1.1 Definitions. The following capitalized terms when used in this Contract
shall have the meanings set forth below unless the context otherwise requires:

“Additional Deposit” shall mean $250,000.

“Affiliate” shall mean, with respect to Seller or Buyer, any other person or
entity directly or indirectly controlling (including but not limited to all
directors and officers), controlled by or under direct or indirect common
control with Seller or Buyer, as applicable. For purposes of the foregoing, a
person or entity shall be deemed to control another person or entity if it
possesses, directly or indirectly, the power to direct or cause direction of the
management and policies of such other person or entity, whether through the
ownership of voting securities, by contract or otherwise.

“Appurtenances” shall mean all rights, titles, and interests of a Seller
appurtenant to the Land and Improvements, including, but not limited to, (i) all
easements, rights of way, rights of ingress and egress, tenements,
hereditaments, privileges, and appurtenances in any way belonging to the Land or
Improvements, (ii) any land lying in the bed of any alley, highway, street, road
or avenue, open or proposed, in front of or abutting or adjoining the Land,
(iii) any strips or gores of real estate adjacent to the Land, and (iv) the use
of all alleys, easements and rights-of-way, if any, abutting, adjacent,
contiguous to or adjoining the Land.

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“Brand” shall mean Courtyard by Marriott, the hotel brand or franchise under
which the Hotel operates.

“Business Day” shall mean any day other than a Saturday, Sunday or legal holiday
in the Commonwealth of Virginia.

“Closing” shall mean the unconditional delivery of the Deed to Buyer
concurrently with Seller’s receipt of the Purchase Price pursuant to this
Contract.

“Closing Date” shall have the meaning set forth in Section 10.1.

“Contracts, Plans and Specs” shall mean all construction and other contracts,
plans, drawings, specifications, surveys, soil reports, engineering reports,
inspection reports, and other technical descriptions and reports.

“Deed” shall have the meaning set forth in Section 10.2(a).

“Deposits” shall mean, mean, to the extent assignable, all prepaid rents,
refundable security deposits and rental deposits under Leases of the Property,
and all unexpended or unearned deposits for advance reservations, banquets or
future services, made in connection with the use or occupancy of the
Improvements; provided further, that “Deposits” shall exclude (i) reserves for
real property taxes and insurance paid by tenants under Leases of the Property,
in each case, to the extent pro rated on the settlement statement such that
Buyer receives a credit for accrued but unpaid taxes and premiums in respect of
any period prior to Closing, and (ii) utility deposits.

“Due Diligence Examination” shall have the meaning set forth in Section 3.2.

“Earnest Money Deposit” shall have the meaning set forth in Section 2.5(a).

“Environmental Requirements” shall have the meaning set forth in Section 7.1(f)

“Escrow Agent” shall have the meaning set forth in Section 2.5(a).

“Escrow Agreement” shall have the meaning set forth in Section 2.5(b).

“Exception Documents” shall have the meaning set forth in Section 4.2.

“Existing Loan” shall mean that certain indebtedness of Seller evidenced by that
certain promissory note in favor of Morgan Stanley Market Capital, Inc.
(“Lender”) dated November 2, 1998, in the original principal amount of
12,750,000, secured by that certain Deed of Trust dated November 2, 1998, and
recorded in the Clerk’s Office, Circuit Court of the City of Alexandria,
Virginia.

“Existing Management Agreement” shall mean that certain management agreement
between the Seller and the Manager for the operation, franchise and management
of the Hotel.

 

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“FF&E” shall mean all tangible personal property and fixtures of any kind (other
than Supplies and personal property (i) owned by guests of the Hotel or
(ii) leased by Seller pursuant to an FF&E Lease) attached to, or located upon
and used in connection with the ownership, maintenance, use or operation of the
Land or Improvements as of the date hereof (or acquired by Seller and so
employed prior to Closing), including, but not limited to, all furniture,
fixtures, equipment, signs and related personal property; all heating, lighting,
plumbing, drainage, electrical, air conditioning, and other mechanical fixtures
and equipment and systems; all elevators, and related motors and electrical
equipment and systems; all hot water heaters, furnaces, heating controls, motors
and equipment, all shelving and partitions, all ventilating equipment, and all
disposal equipment; all spa, health club and fitness equipment; all equipment
used in connection with the use and/or maintenance of the guestrooms,
restaurants, lounges, business centers, meeting rooms, swimming pools, indoor
and/or outdoor sports facilities and other common areas and recreational areas;
all carpet, drapes, beds, furniture, televisions and other furnishings; all
stoves, ovens, freezers, refrigerators, dishwashers, disposals, kitchen
equipment and utensils, tables, chairs, plates and other dishes, glasses,
silverware, serving pieces and other restaurant and bar equipment, apparatus and
utensils. A current list of FF&E may be compiled by the Buyer and/or the Manager
during the Review Period and after approval by Seller, attached hereto as
Exhibit B on or before the expiration of the Review Period.

“FF&E Leases” shall mean all leases of any FF&E and other contracts permitting
the use of any FF&E at the Improvements that are assumed by Buyer.

“Financial Statements” shall have the meaning set forth in Section 3.1(b).

“Franchisor” shall mean Courtyard Management Corporation.

“Hotel Contracts” shall have the meaning set forth in Section 10.2(d).

“Hotel Advance Deposits” shall mean all unexpended deposits for advance
reservations, banquets or future services, made in connection with the operation
of the Hotel (including, without limitation, any reserves for replacement of
FF&E and for capital repairs and/or improvements in accordance with the
Franchise Agreement).

“Improvements” shall mean all buildings, structures, fixtures, parking areas and
other improvements to the Land and all related facilities.

“Indemnified Party” shall have the meaning set forth in Section 8.8(c)(i).

“Indemnifying Party” shall have the meaning set forth in Section 8.8(c)(i).

“Initial Deposit” shall have the meaning set forth in Section 2.5(a).

“Land” shall mean, collectively, a fee simple absolute interest in the real
property more fully described in Exhibit A, which is attached hereto and
incorporated herein by reference, together with all rights (including without
limitation all air rights and development rights), alleys, streets, strips,
gores, waters, privileges, appurtenances, advantages and easements belonging
thereto or in any way appertaining thereto.

 

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“Leases” shall mean all leases, occupancy agreements or other agreements
demising space in or providing for the exclusive use or occupancy of, or
otherwise similarly affecting or relating to the use or occupancy of, the
Improvements or Land, or any portion thereof, together with all amendments,
modifications, renewals and extensions thereof, and all guaranties by third
parties of the obligations of the tenants, licensees, franchisees,
concessionaires or other entities thereunder.

“Legal Action” shall have the meaning set forth in Section 8.8(c)(ii).

“Lender” shall mean Morgan Stanley Market Capital, Inc.

“Licenses” shall mean all permits, licenses, franchises, utility reservations,
certificates of occupancy, and other documents issued by any federal, state, or
municipal authority or by any private party related to the development,
construction, use, occupancy, operation or maintenance of the Hotel, including,
without limitation, all licenses, approvals and rights (including any and all
existing waivers of any brand standard) necessary or appropriate for the
operation of the Hotel under the Brand.

“Liquor Licenses” shall have the meaning set forth in Section 8.10.

“Manager” shall mean the management company (which Seller and Buyer acknowledge
shall be the same management company) under both the Existing Management
Agreement and the New Management Agreement.

“New Management Agreement” means the management agreement, or amendment to the
Existing Management Agreement, as the case may be, to be entered into between
Buyer and the Manager for the operation and management of the Hotel on and after
the Closing Date.

“Other Property” shall have the meaning set forth in Section 16.14.

“Pending Claims” shall have the meaning set forth in Section 7.1(e).

“Permitted Exceptions” shall have the meaning set forth in Section 4.3.

“Personal Property” shall mean, collectively, all of the Property other than the
Real Property.

“PIP” shall mean a product improvement plan for any Hotel, as required by the
Manager or the Franchisor, if any.

“Post-Closing Agreement” shall have the meaning set forth in Section 8.9.

“Property” shall mean, collectively, (i) all of the following with respect to
the Hotel: the Land, Improvements, Appurtenances, FF&E, Supplies, Leases,
Deposits, Hotel Advance Deposits, Records, Service Contracts, Warranties,
Licenses, FF&E Leases, Contracts, Plans and Specs, Tradenames, Utility
Reservations, as well as all other real, personal or intangible property of
Seller related to any of the foregoing and (ii) any and all of the following
that relate to or affect in any way the design, construction, ownership, use,
occupancy, leasing, maintenance, service or operation of the Real Property,
FF&E, Supplies, Leases, Deposits or Records: Service Contracts, Warranties,
Licenses, Tradenames, Contracts, Plans and Specs and FF&E Lease.

 

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“Purchase Price” shall have the meaning set forth in Section 2.2.

“Real Property” shall mean, collectively, all Land, Improvements and
Appurtenances with respect to the Hotel.

“Records” shall mean all books, records, promotional material, tenant data,
guest history information (other than any such information owned exclusively by
the Manager), marketing and leasing material and forms (including but not
limited to any such records, data, information, material and forms in the form
of computerized files located at the Hotel), market studies prepared in
connection with Seller’s current annual plan and other materials, information,
data, legal or other documents or records (including, without limitation, all
documentation relating to any litigation or other proceedings, all zoning and/or
land use notices, relating to or affecting the Property, all business plans and
projections and all studies, plans, budgets and contracts related to the
development, construction and/or operation of the Hotel) owned by Seller and/or
in Seller’s possession or control, or to which Seller has access or may obtain
from the Manager, that are used in or relating to the Property and/or the
operation of the Hotel, including the Land, the Improvements or the FF&E, and
proforma budgets and projections and construction budgets and contracts related
to the development and construction of the Hotel and a list of the general
contractors, architects and engineers providing goods and/or services in
connection with the construction of the Hotel, all construction warranties and
guaranties in effect at Closing and copies of the final plans and specifications
for the Hotel.

“Release” shall have the meaning set forth in Section 7.1(f).

“Review Period” shall have the meaning set forth in Section 3.1.

“SEC” shall have the meaning set forth in Section 8.6.

“Seller Liens” shall have the meaning set forth in Section 4.3.

“Seller Parties” shall have the meaning set forth in Section 7.1(e).

“Service Contracts” shall mean contracts or agreements entered into by the
Manager pursuant to the Management Agreement, or Seller on its on behalf, for
the operation of the Hotel, such as maintenance, supply, service or utility
contracts.

“Supplies” shall mean all merchandise, supplies, inventory and other items used
for the operation and maintenance of guest rooms, restaurants, lounges, swimming
pools, health clubs, spas, business centers, meeting rooms and other common
areas and recreational areas located within or relating to the Improvements,
including, without limitation, all food and beverage (alcoholic and
non-alcoholic) inventory, office supplies and stationery, advertising and
promotional materials, china, glasses, silver/flatware, towels, linen and
bedding (all of which shall be 2-par level for all suites or rooms in the
Hotel), guest cleaning, paper and other supplies, upholstery material, carpets,
rugs, furniture, engineers’ supplies, paint and painters’ supplies, employee
uniforms, and all cleaning and maintenance supplies, including those used in

 

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connection with the swimming pools, indoor and/or outdoor sports facilities,
health clubs, spas, fitness centers, restaurants, business centers, meeting
rooms and other common areas and recreational areas, subject to depletion prior
to the Closing Date as shall occur in the ordinary course of business.

“Survey” shall have the meaning set forth in Section 4.1.

“Third Party Consents” shall have the meaning set forth in Section 8.3.

“Title Commitment” shall have the meaning set forth in Section 4.2.

“Title Company” shall have the meaning set forth in Section 4.2.

“Title Policy” shall have the meaning set forth in Section 4.2.

“Title Review Period” shall have the meaning set forth in Section 4.3.

“Tradenames” shall mean all telephone exchanges and numbers, trade names, trade
styles, trade marks, and other identifying material, and all variations thereof,
together with all related goodwill (it being understood and agreed that the name
of the hotel chain to which the Hotel is affiliated by franchise, license or
management agreement is a protected name or registered service mark of such
hotel chain and cannot be transferred to Buyer by this Contract.

“Utility Reservations” shall mean Seller’s interest, if any, in the right to
receive immediately on and after Closing and continuously consume thereafter
water service, sanitary and storm sewer service, electrical service, gas service
and telephone service on and for the Land and Improvements in capacities that
are adequate continuously to use and operate the Improvements for the purposes
for which they were intended, including, but not limited to (i) any right to the
present and future use of wastewater, drainage, water and other utility
facilities to the extent such use benefits the Real Property, (ii) any
reservations of or commitments covering any such use in the future, and
(iii) any wastewater capacity reservations relating to the Real Property. Buyer
shall be responsible for any requests or documents to transfer the Utility
Reservations, at Buyer’s sole cost and expense.

“Warranties” shall mean all warranties, guaranties, indemnities and claims
(expressly excluding any indemnities and claims arising under the Existing
Management Agreement and Existing Franchise Agreement) for the benefit of Seller
with respect to the Hotel, the Property or any portion thereof, including,
without limitation, all warranties and guaranties of the development,
construction, completion, installation, equipping and furnishing of the Hotel,
and all indemnities, bonds and claims of Seller related thereto, if any, and to
the extent transferable.

ARTICLE II

PURCHASE AND SALE; PURCHASE PRICE; PAYMENT;

EARNEST MONEY DEPOSIT

2.1 Purchase and Sale. Seller agrees to sell and convey to Buyer or its
Affiliates and/or assigns, and Buyer or its assigns agrees to purchase from
Seller, the Property, in consideration of the Purchase Price and upon the terms
and conditions hereof. All of the Property shall be conveyed, assigned, and
transferred to Buyer at Closing, subject only to the Permitted Exceptions.

 

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2.2 Intentionally Deleted.

2.3 Purchase Price. Buyer agrees to pay, and Seller agrees to accept, as
consideration for the conveyance of the Property, subject to the adjustments
provided for in this Contract, the amount of Thirty-Six Million Five Hundred
Thousand and No/100 Dollars ($36,500,000.00) (the “Purchase Price”).

2.4 Allocation. Buyer and Seller shall attempt to agree, prior to the expiration
of the Review Period, on an allocation of the Purchase Price among Real
Property, tangible Personal Property and intangible property related to the
Property. In the event Buyer and Seller do not agree, each party shall be free
to allocate the Purchase Price to such items as they deem appropriate, subject
to and in accordance with applicable laws.

2.5 Payment. The portion of the Purchase Price, less the Earnest Money Deposit
and interest earned thereon, if any, which Buyer elects to have applied against
the Purchase Price (as provided below), less the Escrow Funds, less the
outstanding principal balance of the Existing Loan, shall be paid to Seller in
cash, certified funds or wire transfer, at the Closing of the Property. At the
Closing, the Earnest Money Deposit, together with interest earned thereon, if
any, shall, at Buyer’s election, be returned to Buyer or shall be paid over to
Seller by Escrow Agent to be applied to the portion of the Purchase Price on
behalf of Buyer, and the Escrow Funds shall be deposited into an escrow account
pursuant to the Post-Closing Agreement as contemplated by Section 8.9.

2.6 Earnest Money Deposit.

(a) Within one (1) Business Day after the full execution and delivery of this
Contract, Buyer shall deposit the sum of Two Hundred Fifty Thousand and No/100
Dollars ($250,000.00) in cash, certified bank check or by wire transfer of
immediately available funds (the “Initial Deposit”) with the Title Company, as
escrow agent (“Escrow Agent”), which sum shall be held by Escrow Agent as
earnest money. If, pursuant to the provisions of Section 3.1 of this Contract,
Buyer elects to terminate this Contract at any time prior to the expiration of
the Review Period, then the Escrow Agent shall return the Earnest Money Deposit
to Buyer promptly upon written notice to that effect from Buyer. If Buyer does
not elect to terminate this Contract on or before the expiration of the Review
Period, Buyer shall, within three (3) Business Days after the expiration of the
Review Period deposit the Additional Deposit with the Escrow Agent. The Initial
Deposit and the Additional Deposit, and all interest accrued thereon, shall
hereinafter be referred to as the “Earnest Money Deposit.”

(b) The Earnest Money Deposit shall be held by Escrow Agent subject to the terms
and conditions of an Escrow Agreement dated as of the date of this Contract
entered into by Seller, Buyer and Escrow Agent (the “Escrow Agreement”). The
Earnest Money Deposit shall be held in an interest-bearing account in a
federally insured bank or savings institution reasonably acceptable to Seller
and Buyer, with all interest to accrue to the benefit of the party entitled to
receive it and to be reportable by such party for income tax purposes.

 

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2.7 Existing Loan. Buyer acknowledges that as part of the consideration for the
sale of the Property, Buyer shall defease the Existing Loan at its sole cost and
expense; provided, however, Seller shall be responsible for its attorneys’ fees,
if any, incurred in connection with the defeasance. At such time as a reasonable
approximation of Buyer’s total defeasance costs (exclusive of the outstanding
principal balance of the Existing Loan) are determined, Buyer and Seller shall
amend this Contract to adjust upward the Purchase Price by such defeasance costs
whereupon Seller shall then be responsible for all of such defeasance costs at
Closing. The portion of the Grantor and Grantee tax on the deed attributable to
such upward adjustment shall be paid by Buyer at Closing.

ARTICLE III

REVIEW PERIOD

3.1 Review Period. Buyer shall have a period through 6:00 p.m. Eastern Time on
the date that is forty-five (45) days after the date of this Contract, unless a
longer period of time is otherwise provided for in this Contract and except as
otherwise agreed to by Buyer and Seller (the “Review Period”), to evaluate the
legal, title, survey, construction, physical condition, structural, mechanical,
environmental, economic, permit status, franchise status, financial and other
documents and information related to the Property. Within two (2) Business Days
following the date of this Contract, Seller, at Seller’s sole cost and expense,
will deliver to Buyer (or make available at the Hotel) for Buyer’s review, to
the extent not previously delivered to Buyer, true, correct and complete (to the
knowledge of Seller) copies of the following, together with all amendments,
modifications, renewals or extensions thereof to the extent in Seller’s or
Manager’s possession or control:

(a) All Warranties and Licenses relating to the Hotel or any part thereof;

(b) Income and expense statements and budgets for the Hotel, for the current
year to date and each of the three (3) prior fiscal years (the “Financial
Statements”), and Seller shall provide to Buyer copies of all income and expense
statements generated by Seller or any third party that relate to the operations
of the Hotel and that contain information not included in the financial
statements, if any, provided to Buyer by the Manager, provided that Seller also
agrees to provide to Buyer’s auditors and representatives all financial and
other information necessary or appropriate for preparation of audited financial
statements for Buyer and/or its Affiliates as provided in Section 8.6, below;

(c) All real estate and personal property tax statements with respect to the
Hotel and notices of appraised value for the Real Property for the current year
(if available) and each of the three (3) calendar years prior to the current
year;

(d) Engineering, mechanical, architectural and construction plans, drawings,
specifications and contracts, payment and performance bonds, title policies,
reports and commitments, zoning information and marketing and economic data
relating to the Hotel and the construction, development, installation and
equipping thereof, as well as copies of all environmental reports and
information, topographical, boundary or “as built” surveys, engineering reports,
subsurface studies and other Contracts, Plans and Specs relating to or affecting
the Hotel. If the Hotel is purchased by Buyer, Seller’s right, title and
interest, if any, in

 

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all such documents and information relating to the Hotel shall thereupon be and
become the property of Buyer without payment of any additional consideration
therefor and without any express or implied warranty by Seller as to the
accuracy or completeness of any documents or reports prepared by any third party
professional, independent contractor or consultant.

(e) All FF&E Leases, Services Contracts, Leases and, if applicable, a schedule
of such Leases of space in the Hotel, and all agreements for real estate
commissions, brokerage fees, finder’s fees or other compensation payable by
Seller in connection therewith; and

(f) All notices received from governmental authorities in connection with the
Hotel and all other notices received from governmental authorities received at
any time that relate to any noncompliance or violation of law that has not been
corrected.

Seller shall, upon request of Buyer, make available to Buyer and Buyer’s
representatives and agents, for inspection and copying during normal business
hours, Records located at Seller’s corporate offices, and Seller agrees to
provide Buyer copies of all other reasonably requested information that is
relevant to the management, operation, use, occupancy or leasing of or title to
the applicable Hotel and the plans specifications for development of the Hotel.
At any time during the Review Period, Buyer may, in its sole and absolute
discretion, elect not to proceed with the purchase of the Property for any
reason whatsoever by giving written notice thereof to Seller, in which event:
(i) the Earnest Money Deposit shall be promptly returned by Escrow Agent to
Buyer together with all accrued interest, if any, (ii) this Contract shall be
terminated automatically, (iii) all materials supplied by Seller to Buyer shall
be returned promptly to Seller, and (iv) both parties will be relieved of all
other rights, obligations and liabilities hereunder, except for the parties’
obligations pursuant to Sections 3.3 and 16.6 below. Failure of Buyer to
terminate this Contract prior to the end of the Review Period as set forth above
shall be deemed a waiver and release of such right of termination in favor of
Buyer and shall constitute Buyer’s acceptance of the Property in its “as
is/where is” condition pursuant to Section 3.5 below.

3.2 Due Diligence Examination. At any time during the Review Period, and
thereafter through Closing of the Property, Buyer and/or its representatives and
agents shall have the right to enter upon the Property at all reasonable times
for the purposes of reviewing all Records and other data, documents and/or
information relating to the Property and conducting such surveys, appraisals,
engineering tests, soil tests (including, without limitation, Phase I and Phase
II environmental site assessments), inspections of construction and other
inspections and other studies as Buyer deems reasonable and necessary or
appropriate to evaluate the Property, subject to providing reasonable advance
notice to Seller unless otherwise agreed to by Buyer and Seller (the “Due
Diligence Examination”). Buyer shall not make any physical alterations to the
Property or any invasive tests. Buyer shall conduct, and ensure that each of its
agents, employees, contractors or representatives conducts, each such entry in a
manner that does not interfere with the guests or management of the Hotel.
Seller shall have the right to have its representative present during Buyer’s
physical inspections of its Property, provided that failure of Seller to do so
shall not prevent Buyer from exercising its due diligence, review and inspection
rights hereunder. Buyer agrees to exercise reasonable care when visiting the
Property, in a manner which shall not materially adversely affect the operation
of the Property.

 

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3.3 Restoration and Indemnity. Buyer covenants and agrees not to damage or
destroy any portion of the Property in conducting its examinations and studies
of the Property during the Due Diligence Examination and, if closing does not
occur, shall repair any portion of the Property damaged by the conduct of Buyer,
its agents or employees, to substantially the condition such portion(s) of the
Property were in immediately prior to such examinations or studies. Buyer shall
indemnify and hold Seller harmless from any and all claims, damages, demands,
penalties, causes of action, liabilities, losses, costs or expenses (including,
without limitation, reasonable attorneys’ fees and other charges) arising out of
or in any way related to personal injury (including death), property damage,
disruptions of operations, nuisance or other claims asserted by any person or
entity relating to the acts or omissions of Buyer, or its agents, employees,
contractors or representatives in the course of any such entry or inspection of
the Hotel. The foregoing indemnity shall survive Closing or any termination of
this Contract. If Buyer elects to terminate this Contract, Buyer agrees to
supply Seller with all copies of the results of any tests, studies or
inspections of the Property performed hereunder.

3.4 Seller Exhibits. Buyer shall have until the end of the Review Period to
review and approve the information on Exhibits B, C, D, E and F. In the event
Buyer does not approve any such Exhibit or the information contained therein,
Buyer shall be entitled to terminate this Contract by notice to Seller and the
Earnest Money Deposit shall be returned to Buyer with all interest thereon and
both parties shall be relieved of all rights, obligations and liabilities
hereunder except for the parties’ obligations pursuant to Sections 3.3 and 16.6
which shall expressly survive any such termination.

3.5 As-Is, Where-Is Sale; Limitation on Representations and Warranties. BUYER
ACKNOWLEDGES AND AGREES THAT, EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN ARTICLE
VII BELOW AND ELSEWHERE IN THIS CONTRACT, THE HOTEL OWNED BY SELLER IS SOLD
“AS-IS -WHERE-IS,” AND NEITHER SELLER NOR ANY AGENT NOR REPRESENTATIVE OF SELLER
HAS MADE, AND NEITHER SELLER NOR ANY AGENT OR REPRESENTATIVE OF SELLER IS LIABLE
FOR OR BOUND IN ANY MANNER BY, ANY EXPRESS OR IMPLIED WARRANTIES, GUARANTIES,
PROMISES, STATEMENTS, INDUCEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO
THE PROPERTY, THE PHYSICAL CONDITION, OPERATION OR FINANCIAL VIABILITY OF ALL OR
ANY PART THEREOF, THE INCOME AND EXPENSES ATTRIBUTABLE OR LIKELY TO BE
ATTRIBUTABLE THERETO, THE USES WHICH CAN BE MADE OF ALL OR ANY PART OF THE
PROPERTY OR ANY OTHER MATTER OR THING OF ANY KIND WITH RESPECT THERETO OR TO THE
MARKET IN WHICH THE HOTEL IS LOCATED. WITHOUT LIMITING THE FOREGOING, BUYER
ACKNOWLEDGES AND AGREES THAT, EXCEPT AS EXPRESSLY SET FORTH IN ARTICLE VII BELOW
AND ELSEWHERE IN THIS CONTRACT, NEITHER SELLER IS NOT LIABLE FOR OR BOUND BY
(AND BUYER HAS NOT RELIED UPON) ANY VERBAL OR WRITTEN STATEMENTS,
REPRESENTATIONS, FINANCIAL STATEMENTS OR OTHER INFORMATION OF ANY KIND SUPPLIED
BY OR ON BEHALF OF SELLER AND PERTAINING TO THE HOTEL OR ANY OTHER INFORMATION
RESPECTING THE HOTEL FURNISHED BY SELLER OR ANY EMPLOYEE, AGENT, CONSULTANT OR
OTHER PERSON REPRESENTING OR PURPORTEDLY REPRESENTING SELLER. BUYER ACKNOWLEDGES
THAT TO THE EXTENT REQUIRED TO BE OPERATIVE, THE DISCLAIMERS OF

 

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REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS SECTION ARE “CONSPICUOUS”
DISCLAIMERS FOR PURPOSES OF ANY APPLICABLE LAW, RULE, REGULATION OR ORDER.

ARTICLE IV

SURVEY AND TITLE APPROVAL

4.1 Survey. Seller has delivered to Buyer true, correct and complete copies of
the most recent survey of the Real Property. In the event that an update of the
survey or a new survey (such updated or new survey being referred to as the
“Survey”) are desired by Buyer, then Buyer shall be responsible for all costs
related thereto.

4.2 Title. Seller has delivered to Buyer its existing title insurance policy,
for its Real Property. During the Review Period, Buyer shall obtain and review,
at its expense (i) a Commitment for Title Insurance (the “Title Commitment”)
issued by LandAmerica American Title Company, 8201 Preston Road, Suite 280,
Dallas, Texas, 75225 (the “Title Company”), for the most recent standard form of
owner’s policy of title insurance in the state in which the Real Property is
located, covering the Real Property, setting forth the current status of the
title to the Real Property, showing all liens, claims, encumbrances, easements,
rights of way, encroachments, reservations, restrictions and any other matters
affecting the Real Property and pursuant to which the Title Company agrees to
issue to Buyer at Closing an Owner’s Policy of Title Insurance on the most
recent form of ALTA (where available) owner’s policy available in the state in
which the Land is located, with extended coverage and, to the extent applicable
and available in such state, comprehensive, access, single tax parcel,
contiguity, Fairway and such other endorsements as may be required by Buyer
(collectively, the “Title Policy”); and (ii) true, complete, legible and, where
applicable, recorded copies of all documents and instruments (the “Exception
Documents”) referred to or identified in the Title Commitment, including, but
not limited to, all deeds, lien instruments, leases, plats, surveys,
reservations, restrictions, and easements affecting the Real Property. Buyer
shall cause the Title Company to promptly provide Seller with a copy of the
Title Commitment issued by the Title Company.

4.3 Survey or Title Objections. If Buyer discovers any title or survey matter
which is objectionable to Buyer, Buyer may provide Seller with written notice of
its objection to same (including all Exception Documents) and the applicable
Survey on or before the expiration of the Review Period (the “Title Review
Period”). If Buyer fails to so object in writing to any such matter set forth in
the Survey or Title Commitment, it shall be conclusively assumed that Buyer has
approved same. If Buyer disapproves any condition of title, survey or other
matters by written objection to Seller on or before the expiration of the Title
Review Period, Seller shall elect either to attempt to cure or not cure any such
item by written notice sent to Buyer within five (5) days after its receipt of
notice from Buyer, and if Seller commits in writing to attempt to cure any such
item, then Seller shall be given until the Closing Date to cure any such defect.
In the event Seller shall fail to cure a defect which Seller has committed in
writing to cure prior to Closing, or if a new title defect arises after the date
of Buyer’s Title Commitment or Survey, as applicable, but prior to Closing, then
Buyer may elect, in Buyer’s sole and absolute discretion: (i) to waive such
objection and proceed to Closing, or (ii) to terminate this Contract and receive
a return of the Earnest Money Deposit, and any interest thereon. The items shown
on the Title Commitment which are not objected to by Buyer as set forth above
(other than exceptions and

 

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title defects arising after the title review period and other than those
standard exceptions which are ordinarily and customarily omitted in the state in
which the applicable Hotel is located, so long as Seller provides the
appropriate owner’s affidavit, gap indemnity or other documentation reasonably
required by the Title Company for such omission) are hereinafter referred to as
the “Permitted Exceptions.” In no event shall Permitted Exceptions include liens
(except for tax and special assessment liens which are not yet due and payable),
or documents evidencing liens, securing any indebtedness, any mechanics’ or
materialmen’s liens or any claims or potential claims therefor covering the
Property or any portion thereof (“Seller Liens”), each of which shall be paid in
full by Seller, removed to bond or other arrangements satisfactory to the Title
Company made by Seller in order to cause such Seller Liens to be deleted from
Buyer’s Title Commitment at Closing.

ARTICLE V

MANAGEMENT AGREEMENT

Buyer acknowledges that pursuant to the terms of the Existing Management
Agreement, Manager must consent to the sale of the Property to Buyer. Within two
(2) Business Days following the date hereof, Seller shall notify Manager of the
proposed sale to Buyer in accordance with the applicable provisions of the
Existing Management Agreement. Buyer acknowledges that under the Existing
Management Agreement, Manager has the right to either (a) consent to the sale of
the Property, in which case at the Closing, Buyer shall assume all of Seller’s
obligations under the Management Agreement or execute a New Management Agreement
upon the same terms and conditions of the Existing Management Agreement except
that the term of the New Management Agreement shall be the remaining term under
the Existing Management Agreement or (b) terminate the Existing Management
Agreement or (c) exercise its right of first refusal. If Manager does not
consent to the sale of the Property or waive its right of first refusal, Buyer
shall have the right to terminate this Contract, upon notice to Seller, in which
event: (i) the Earnest Money Deposit shall be promptly returned by Escrow Agent
to Buyer, (ii) all materials supplied by Seller to Buyer shall be returned
promptly to Seller, and (iii) both parties will be relived of all other rights,
obligations, and liabilities hereunder, except for the parties’ obligations
pursuant to Sections 3.3 and 16.6 hereof and any other provisions herein which
are expressly indicated as surviving termination of this Contract.

ARTICLE VI

BROKERS

Seller and Buyer each represents and warrants to the other that it has not
engaged any broker, finder or other party in connection with the transaction
contemplated by this Contract. Buyer and Seller each agree to save and hold the
other harmless from any and all losses, damages, liabilities, costs and expenses
(including, without limitation, attorneys’ fees) involving claims made by any
other agent, broker, or other person by or through the acts of Buyer or Seller,
respectively, in connection with this transaction.

 

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ARTICLE VII

REPRESENTATIONS, WARRANTIES AND COVENANTS

7.1 Seller’s Representations, Warranties and Covenants. Seller hereby
represents, warrants and covenants to Buyer as follows:

(a) Authority; No Conflicts. Seller is a general partnership duly formed,
validly existing and in good standing in the State of Florida. Seller has
obtained all necessary consents to enter into and perform this Contract and is
fully authorized to enter into and perform this Contract and to complete the
transactions contemplated by this Contract. No consent or approval of any
person, entity or governmental authority is required for the execution, delivery
or performance by Seller of this Contract, except as set forth in Exhibit D, and
this Contract is hereby binding and enforceable against Seller. Except as set
forth in Exhibit D, neither the execution nor the performance of, or compliance
with, this Contract by Seller has resulted, or will result, in any violation of,
or default under, or acceleration of, any obligation under any existing
corporate charter, certificate of incorporation, bylaw, articles of
organization, limited liability company agreement or regulations, partnership
agreement or other organizational documents and under any, mortgage indenture,
lien agreement, promissory note, contract, or permit, or any judgment, decree,
order, restrictive covenant, statute, rule or regulation, applicable to Seller
or to the Hotel.

(b) FIRPTA. Seller is not a foreign corporation, foreign partnership, foreign
trust or foreign estate (as those items are defined in the Internal Revenue Code
and Income Tax Regulations).

(c) Bankruptcy. Neither Seller, nor to Seller’s knowledge, any of its partners
or members, is insolvent or the subject of any bankruptcy proceeding,
receivership proceeding or other insolvency, dissolution, reorganization or
similar proceeding.

(d) Property Agreements. A complete list of all FF&E Leases, Service Contracts
and Leases (other than those entered into by the Manager on its own behalf) used
in or otherwise relating to the operation and business of the Hotel is attached
hereto as Exhibit C-1, and, to Seller’s knowledge, a complete list of all other
FF&E Leases, Service Contracts and Leases used in or otherwise relating to the
operation and business of the Hotel is attached hereto as Exhibit C-2. The
assets constituting the Property to be conveyed to Buyer hereunder constitute
all of the property and assets of Seller used in connection with the operation
and business of the Hotel. There are no leases, license agreements, leasing
agent’s agreements, equipment leases, building service agreements, maintenance
contracts, suppliers contracts, warranty contracts, operating agreements, or
other agreements (i) to which Seller is a party or an assignee, or (ii) to
Seller’s knowledge, binding upon the Hotel, relating to the ownership,
occupancy, operation, management or maintenance of the Real Property, FF&E,
Supplies or Tradenames, except for those Service Contracts, Leases, Warranties
and FF&E Leases disclosed on Exhibit C or to be delivered to Buyer pursuant to
Section 3.1. The Service Contracts, Leases, Warranties and FF&E Leases disclosed
on Exhibit C or to be delivered to Buyer pursuant to Section 3.1 are in full
force and effect, and to the knowledge of Seller, no default has occurred and is
continuing thereunder and no circumstances exist which, with the giving of
notice, the lapse of time or both, would constitute such a default. Except for
the Manager pursuant to the Existing Management Agreement, no party has any
right or option to acquire the Hotel or any portion thereof, other than Buyer.

 

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(e) Pending Claims. There are no: (i) claims, demands, litigation, proceedings
or governmental investigations pending or to Seller’s knowledge threatened
against Seller or related to the business or assets of the Hotel, except as set
forth on Exhibit F attached hereto and incorporated herein by reference, (ii) to
Seller’s knowledge, special assessments or extraordinary taxes except as set
forth in the Title Commitment or (iii) pending or to Seller’s knowledge,
threatened condemnation or eminent domain proceedings which would affect the
Property or any part thereof. There are no: pending arbitration proceedings or
unsatisfied arbitration awards, or judicial proceedings or orders respecting
awards, which might become a lien on the Property or any portion thereof,
pending unfair labor practice charges or complaints, unsatisfied unfair labor
practice orders or judicial proceedings or orders with respect thereto, pending
charges or complaints with or by city, state or federal civil or human rights
agencies, unremedied orders by such agencies or judicial proceedings or orders
with respect to obligations under city, state or federal civil or human rights
or antidiscrimination laws or executive orders affecting the Hotel, or other
pending, actual or, to Seller’s knowledge, threatened litigation claims,
charges, complaints, petitions or unsatisfied orders by or before any
administrative agency or court which affect the Hotel or might become a lien on
the Hotel (collectively, the “Pending Claims”).

(f) Environmental. With respect to environmental matters, (i) to Seller’s
knowledge, there has been no Release or threat of Release of Hazardous Materials
in, on, under, to, from or in the area of the Real Property, except as disclosed
in the reports and documents set forth on Exhibit E attached hereto and
incorporated herein by reference, (ii) no portion of the Property is being used
for the treatment, storage, disposal or other handling of Hazardous Materials or
machinery containing Hazardous Materials other than standard amounts of cleaning
supplies and chlorine for the swimming pool, all of which are stored on the
Property in strict accordance with applicable Environmental Requirements and do
not exceed limits permitted under applicable laws, including without limitation
Environmental Requirements, (iii) no underground storage tanks are currently
located on or in the Real Property or any portion thereof, (iv) no environmental
investigation, administrative order, notification, consent order, litigation,
claim, judgment or settlement with respect to the Property or any portion
thereof is pending or to Seller’s knowledge, threatened, (v) to Seller’s
knowledge, there is not currently and never has been any mold, fungal or other
microbial growth in or on the Real Property, or existing conditions within
buildings, structures or mechanical equipment serving such buildings or
structures, that could reasonably be expected to result in material liability or
material costs or expenses to remediate the mold, fungal or microbial growth, or
to remedy such conditions that could reasonably be expected to result in such
growth, and (vi) except as disclosed on Exhibit E, there are no reports or other
documentation regarding the environmental condition of the Real Property in the
possession of Seller or Seller’s Affiliates, consultants, contractors or agents.
As used in this Contract: “Hazardous Materials” means (1) “hazardous wastes” as
defined by the Resource Conservation and Recovery Act of 1976, as amended from
time to time (“RCRA”), (2) “hazardous substances” as defined by the
Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42
U.S.C. 9601 et seq.), as amended by the Superfund Amendment and Reauthorization
Act of 1986 and as otherwise amended from time to time (“CERCLA”); (3) “toxic
substances” as defined by the Toxic Substances Control Act, as amended from time
to time (“TSCA”), (4) “hazardous materials” as defined by the Hazardous
Materials Transportation Act, as amended from time to time (“HMTA”),
(5) asbestos, oil or other petroleum products, radioactive materials, urea
formaldehyde foam insulation, radon gas

 

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and transformers or other equipment that contains dielectric fluid containing
polychlorinated biphenyls and (6) any substance whose presence is detrimental or
hazardous to health or the environment, including, without limitation, microbial
or fungal matter or mold, or is otherwise regulated by federal, state and local
environmental laws (including, without limitation, RCRA, CERCLA, TSCA, HMTA),
rules, regulations and orders, regulating, relating to or imposing liability or
standards of conduct concerning any Hazardous Materials or environmental, health
or safety compliance (collectively, “Environmental Requirements”). As used in
this Contract: “Release” means spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or disposing.

(g) Title and Liens. Except for Seller Liens to be released or deleted from the
Title Commitment at Closing, to Seller’s knowledge, Seller has good and
marketable fee simple absolute title to the Real Property, subject only to the
Permitted Exceptions. Except for the FF&E subject to the FF&E Leases and any
applicable Permitted Exceptions, Seller has good and marketable title to the
Personal Property, free and clear of all liens, claims, encumbrances or other
rights whatsoever (other than the Seller Liens to be released at Closing), and
to Seller’s knowledge, there are no other liens, claims, encumbrances or other
rights pending related to any other Personal Property.

(h) Utilities. All appropriate utilities, including sanitary and storm sewers,
water, gas, telephone, cable and electricity, are, to Seller’s knowledge,
currently sufficient and available to service the Hotel and all installation,
connection or “tap-on”, usage and similar fees have been paid.

(i) Licenses, Permits and Approvals. Seller has not received any written notice,
and neither Seller has no knowledge that the Property fails to comply with all
applicable licenses, permits and approvals and federal, state or local statutes,
laws, ordinances, rules, regulations, requirements and codes including, without
limitation, those regarding zoning, land use, building, fire, health, safety,
environmental, subdivision, water quality, sanitation controls and the Americans
with Disabilities Act, and similar rules and regulations relating and/or
applicable to the ownership, use and operation of the Property as it is now
operated. Seller or the Manager has received all licenses, permits and approvals
required or needed for the lawful conduct, occupancy and operation of the
business of the Hotel, and each license and permit is in full force and effect,
and will be in full force and effect as of the Closing. To Seller’s knowledge,
no licenses, permits or approvals necessary for the lawful conduct, occupancy or
operation of the business of the Hotel requires any approval of a governmental
authority for transfer of the Property except as set forth in Exhibit D.

(j) Financial Statements. Seller has delivered copies of all prior and current
(i) Financial Statements for the Hotel for the years 2004, 2005, 2006 and year
to date 2007, (ii) operating statements prepared by the Manager for the Hotel,
and (iii) accounting period financial statements prepared by the Manager for the
Hotel for all accounting periods between January 1, 2005 and the most recent
2007 period. Each of such statements is, to Seller’s knowledge, complete and
accurate in all material respects and, except in the case of budgets prepared in
advance of the applicable operating period to which such budgets relate, fairly
presents the results of operations of the Hotel for the respective periods
represented thereby. Seller has relied upon the Financial Statements in
connection with its ownership and operation of the Hotel, and

 

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there are no independent audits or financial statements prepared by third
parties relating to the operation of the Hotel other than the Financial
Statements prepared by or on behalf of the Manager, all of which have been
provided to Buyer.

(k) Employees. All employees employed at the Hotel are the employees of the
Manager. There are, to Seller’s knowledge, no (i) unions organized at the Hotel,
(ii) union organizing attempts, strikes, organized work stoppages or slow downs,
or any other labor disputes pending or threatened with respect to any of the
employees at the Hotel, or (iii) collective bargaining or other labor agreements
to which Seller or the Manager or the Hotel is bound with respect to any
employees employed at the Hotel.

(l) Operations. To Seller’s knowledge, the Hotel has at all times been operated
by Manager in accordance with all applicable laws, rules, regulations,
ordinances and codes.

(m) Existing Management and Franchise Agreements. Seller has furnished to Buyer
true and complete copies of the Existing Management Agreement and the Existing
Franchise Agreement, which constitutes the entire agreement of the parties with
respect to the subject matter thereof and which have not been amended or
supplemented in any respect. There are no other management agreements, franchise
agreements, license agreements or similar agreements for the operation or
management of the Hotel or relating to the Brand, to which Seller is a party or
which are binding upon the Property, except for the Existing Management
Agreement and the Existing Franchise Agreement. The Improvements comply with,
and the Hotel is being operated in accordance with, all requirements of such
Existing Management Agreement and the Existing Franchise Agreement and all other
requirements of the Manager and the Franchisor, including all “brand standard”
requirements of the Manager and the Franchisor. The Existing Management
Agreement and the Existing Franchise Agreement are in full force and to the
knowledge of Seller no default has occurred and is continuing under the Existing
Management Agreement or the Existing Franchise Agreement, and no circumstances
exist which, with the giving of notice, the lapse of time or both, would
constitute such a default.

7.2 Buyer’s Representations, Warranties and Covenants. Buyer represents,
warrants and covenants:

(a) Authority. Buyer is a corporation duly formed, validly existing and in good
standing in the Commonwealth of Virginia. Buyer has received or will have
received by the applicable Closing Date all necessary authorization of the Board
of Directors of Buyer to complete the transactions contemplated by this
Contract. No other consent or approval of any person, entity or governmental
authority is required for the execution, delivery or performance by Buyer of
this Contract, and this Contract is hereby binding and enforceable against
Buyer.

(b) Bankruptcy. Buyer is not insolvent nor the subject of any bankruptcy
proceeding, receivership proceeding or other insolvency, dissolution,
reorganization or similar proceeding.

 

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(c) Franchisor’s Approval. Buyer, at its sole expense, shall, with respect to
the Franchise Agreement, make commercially reasonable efforts to obtain the
approval of the franchisor thereunder to Buyer’s acquisition of the Property
pursuant to this Contract.

(d) Management Agreement. Buyer, at its sole expense, shall make commercially
reasonable efforts to obtain the consent of the Manager to the sale of the Hotel
and to conclude the negotiation of the terms and conditions of a New Management
Agreement acceptable to Buyer in its sole discretion during the Review Period.
Prior to the end of the Review Period, Buyer shall provide written notice to
Seller affirming that Buyer has reached agreement with Marriott on the material
terms of a New Management Agreement acceptable to Buyer. Buyer’s failure to
provide such written notice to Seller shall be deemed a waiver by Buyer of any
closing condition based on Buyer’s dissatisfaction with the terms of any New
Management Agreement or any amendment to the Existing Management Agreement that
may be offered by Marriott to Buyer for its acceptance and execution on or prior
to the Closing Date.

(e) Defeasance of Existing Loan. Buyer shall diligently prosecute the defeasance
of the Exiting Loan and shall timely make any cost deposits, engage the
consultants and professionals required by the Lender and take all other
commercially reasonable steps to avoid a postponement of the Closing
attributable to the Existing Loan Defeasance (as hereinafter defined).

7.3 Survival. All of the representations and warranties are true, correct and
complete in all material respects as of the date hereof and the statements set
forth therein (without qualification or limitation as to a party’s knowledge
thereof except as expressly provided for in this Article VII) shall be true,
correct and complete in all material respects as of the Closing Date. All of the
representations and warranties made herein shall survive Closing for a period of
six (6) months or November 30, 2007, whichever shall first occur, and shall not
be deemed to merge into or be waived by the Deed or any other closing documents.

7.4 Knowledge. Any and all uses in this Contract of the phrase “to the knowledge
of Seller,” “to Seller’s knowledge” or “known to Seller” (or any similar phrase
referring to Seller) shall mean the actual knowledge, after reasonable inquiry,
of Robert Stirk (the “Knowledge Individual”).

ARTICLE VIII

ADDITIONAL COVENANTS

8.1 Subsequent Developments. After the date of this Contract and until the
Closing Date, Seller shall use best efforts to keep Buyer fully informed of all
subsequent developments of which Seller has knowledge (“Subsequent
Developments”) which would cause any of Seller’s representations or warranties
contained in this Contract to be no longer accurate in any material respect.

8.2 Operations. From and after the date hereof through the Closing on the
Property, Seller shall comply with the Existing Management Agreement and the
Existing Franchise Agreement and keep the same in full force and effect and
shall perform and comply with all of the following subject to and in accordance
with the terms of such agreements:

 

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(a) Continue to maintain the Property generally in accordance with past
practices of Seller and pursuant to and in compliance with the Existing
Management Agreement and the Existing Franchise Agreement, including, without
limitation, (i) using reasonable efforts to keep available the services of all
present employees at the Hotel and to preserve its relations with guests,
suppliers and other parties doing business with Seller with respect to the
Hotel, (ii) accepting booking contracts for the use of the Hotel’s facilities
retaining such bookings in accordance with the terms of the Existing Management
Agreement and the Existing Franchise Agreement, (iii) maintaining the current
level of advertising and other promotional activities for the Hotel’s
facilities, (iv) maintaining the present level of insurance with respect to the
Hotel in full force and effect until the Closing Date for the Hotel and
(v) remaining in compliance in all material respects with all current Licenses;

(b) Keep, observe, and perform in all material respects all its obligations
under and pursuant to the Leases, the Service Contracts, the FF&E Leases, the
Existing Management Agreement, the Existing Franchise Agreement, the Contracts,
Plans and Specs, the Warranties and all other applicable contractual
arrangements relating to the Hotel;

(c) Not cause or permit the removal of FF&E from the Hotel except for the
purpose of discarding worn and valueless items that have been replaced with FF&E
of equal or better quality; timely make all repairs, maintenance, and
replacements to keep all FF&E and all other Personal Property and all Real
Property in its existing condition; keep and maintain the Hotel in its existing
state of repair and condition, reasonable and ordinary wear and tear excepted;
and not commit waste of any portion of the Hotel;

(d) Maintain the levels and quality of the Personal Property generally at the
levels and quality existing on the date hereof and keep merchandise, supplies
and inventory adequately stocked, consistent with good business practice, as if
the sale of the Hotel hereunder were not to occur, including, without
limitation, maintaining linens and bath towels at least at a 2-par level for all
suites or rooms of the Hotel;

(e) Advise Buyer promptly of any litigation, arbitration, or administrative
hearing before any court or governmental agency concerning or affecting the
Hotel which is instituted or threatened in writing after the date of this
Contract or if any representation or warranty contained in this Contract shall
become false or misleading in any material respect;

(f) Not take, or purposefully omit to take, any action that would have the
effect of violating any of the representations, warranties, covenants or
agreements of Seller contained in this Contract;

(g) Pay or cause to be paid all taxes, assessments and other impositions levied
or assessed on the Hotel or any part thereof prior to the delinquency date, and
comply with all federal, state, and municipal laws, ordinances, regulations and
orders relating to the Hotel;

(h) Not sell or assign, or enter into any agreement to sell or assign, or create
or permit to exist any lien or encumbrance (other than a Permitted Exception)
on, the Property or any portion thereof; and

 

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(i) Not allow any permit, receipt, license, franchise or right currently in
existence with respect to the operation, use, occupancy or maintenance of the
Hotel to expire, be canceled or otherwise terminated.

Seller shall promptly furnish to Buyer copies of all new, amended or extended
FF&E Leases, Service Contracts, Leases and other contracts or agreements (other
than routine hotel room bookings entered into in the ordinary course of
business) relating to the Hotel and entered into by the Manager prior to
Closing; provided, however, that in the case of any of the foregoing entered
into by the Manager on its own behalf, only to the extent Seller has knowledge
thereof or a copy of which is obtainable from the Manager. Buyer shall have the
right to extend the Review Period for a period of five (5) Business Days in
order to review any of the foregoing that are not received by Buyer at least
five (5) Business Days prior to the expiration of the Review Period. Seller
shall not, without first obtaining the written approval of Buyer, which approval
shall not be unreasonably withheld, enter into any new FF&E Leases, Service
Contracts, Leases or other contracts or agreements related to the Hotel for
services in excess of $25,000, or extend any existing such agreements, unless
such agreements (x) can be terminated, without penalty, upon thirty (30) days’
prior notice or (y) will expire prior to the Closing Date.

8.3 Third Party Consents. Prior to the Closing Date, Buyer shall, at its
expense, use commercially reasonable efforts to obtain the third party consents
and approvals listed in Exhibit D (all of such consents and approvals), the
“Third Party Consents”). Upon request of Buyer, Seller agrees promptly and
reasonably to cooperate with Buyer in obtaining the Third Party Consents. Upon
Buyer’s request, Seller agrees at Closing to enter into an interim operating
agreement (on commercially reasonable terms and with appropriate
indemnifications from Buyer) for a term ending no later than November 30, 2007,
if and to the extent such an agreement is required under local licensing laws
and regulations in order for the Hotel to continue operating in the ordinary
course without interruption.

8.4 Employees. Upon reasonable prior notice to Seller by Buyer, Buyer and its
employees, representatives and agents shall have the right to communicate with
Seller’s staff, and, subject to the approval of the Manager, the Hotel staff and
the Manager’s staff, including without limitation the general manager, the
director of sales, the engineering staff and other key management employees of
the Hotel, at any time before Closing. Buyer shall not interfere with the
operations of the Hotel while engaging in such communication in a manner that
materially adversely affects the operation of any Property or the Existing
Management Agreement.

8.5 Estoppel Certificates. Seller shall use commercially reasonable efforts to
obtain from (i) each tenant under any Lease affecting the Hotel (but not from
current or prospective occupants of hotel rooms and suites within the Hotel) and
(ii) each lessor under any FF&E Lease for the Hotel identified by Buyer as a
material FF&E Lease, the estoppel certificates substantially in the forms
provided by Buyer to Seller during the Review Period, and deliver to Buyer not
less than five (5) days before the Closing.

8.6 Access to Financial Information. Buyer’s representatives shall have access
to, and Seller and its Affiliates shall reasonably cooperate with Buyer and
furnish upon request, all financial and other information in Seller’s possession
or control relating to the Hotel’s operations to the extent necessary to enable
Buyer’s representatives to prepare audited financial statements

 

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in conformity with Regulation S-X of the Securities and Exchange Commission (the
“SEC”) and other applicable rules and regulations of the SEC and to enable them
to prepare a registration statement, report or disclosure statement for filing
with the SEC on behalf of Buyer or its Affiliates, whether before or after
Closing and regardless of whether such information is included in the Records to
be transferred to Buyer hereunder. Seller shall also provide to Buyer’s
representative a signed representation letter in form and substance reasonably
acceptable to Seller sufficient to enable an independent public accountant to
render an opinion on the financial statements related to the Hotel. The
provisions of this Section shall survive Closing or termination of this
Contract.

8.7 Bulk Sales. At Seller’s risk and expense, Seller shall take all steps
necessary to comply with the requirements of a transferor under all bulk
transfer laws, if any, that are applicable to the transactions contemplated by
this Contract.

8.8 Indemnification. If the transactions contemplated by this Contract are
consummated as provided herein:

(a) Indemnification of Buyer. Without in any way limiting or diminishing the
warranties, representations or agreements herein contained or the rights or
remedies available to Buyer for a breach hereof, Seller hereby agrees to
indemnify, defend and hold harmless Buyer and its respective designees,
successors and assigns from and against all losses, judgments, liabilities,
claims, damages or expenses (including reasonable attorneys’ fees) of every
kind, nature and description in existence before, on or after Closing, whether
known or unknown, absolute or continent, joint or several, arising out of or
relating to:

(i) any claim made or asserted against Buyer or any of the Property by a
creditor of Seller, including any claims based on or alleging a violation of any
bulk sales act or other similar laws;

(ii) the breach of any representation, warranty, covenant or agreement of Seller
contained in this Contract and expressly stated to survive the Closing;

(iii) any liability or obligation of Seller not expressly assumed by Buyer
pursuant to this Contract; and

(iv) any claim made or asserted against Buyer based on the conduct and operation
by or on behalf of Seller of its Hotel or the ownership, use or operation of its
Property prior to Closing.

(b) Indemnification of Seller. Without in any way limiting or diminishing the
warranties, representations or agreements herein contained or the rights or
remedies available to Seller for a breach hereof, Buyer hereby agrees, with
respect to this Contract, to indemnify, defend and hold harmless Seller from and
against all losses, judgments, liabilities, claims, damages or expenses
(including reasonable attorneys’ fees) of every kind, nature and description in
existence before, on or after Closing, whether known or unknown, absolute or
contingent, joint or several, arising out of or relating to:

(i) the breach of any representation, warranty, covenant or agreement of Buyer
contained in this Contract and expressly stated to survive the Closing;

 

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(ii) any claim made or asserted against Seller based on the conduct and
operation by Buyer of its business at the Hotel after the Closing; and

(iii) any liability or obligation of Buyer expressly assumed by Buyer at
Closing.

(c) Indemnification Procedure for Claims of Third Parties. Indemnification, with
respect to claims resulting from the assertion of liability by those not parties
to this Contract (including governmental claims for penalties, fines and
assessments), shall be subject to the following terms and conditions:

(i) The party seeking indemnification (the “Indemnified Party”) shall give
prompt written notice to the party or parties from which it is seeking
indemnification (the “Indemnifying Party”) of any assertion of liability by a
third party which might give rise to a claim for indemnification based on the
foregoing provisions of this Section 8.8, which notice shall state the nature
and basis of the assertion and the amount thereof, to the extent known;
provided, however, that no delay on the part of the Indemnified Party in giving
notice shall relieve the Indemnifying Party of any obligation to indemnify
unless (and then solely to the extent that) the Indemnifying Party is prejudiced
by such delay.

(ii) If in any action, suit or proceeding (a “Legal Action”) the relief sought
is solely the payment of money damages, and if the Indemnifying Party
specifically agrees in writing to indemnify such Indemnified Party with respect
thereto and demonstrates to the reasonable satisfaction of such Indemnified
Party its financial ability to do so, the Indemnifying Party shall have the
right, commencing thirty (30) days after such notice, at its option, to elect to
settle, compromise or defend, pursuant to this paragraph, by its own counsel and
at its own expense, any such Legal Action involving such Indemnified Party’s
asserted liability. If the Indemnifying Party does not undertake to settle,
compromise or defend any such Legal Action, such settlement, compromise or
defense shall be conducted in the sole discretion of such Indemnified Party, but
such Indemnified Party shall provide the Indemnifying Party with such
information concerning such settlement, compromise or defense as the
Indemnifying Party may reasonably request from time to time. If the Indemnifying
Party undertakes to settle, compromise or defend any such asserted liability, it
shall notify such Indemnified Party in writing of its intention to do so within
thirty (30) days of notice from such Indemnified Party provided above.

(iii) Notwithstanding the provisions of the previous subsection of this
Contract, until the Indemnifying Party shall have assumed the defense of the
Legal Action, the defense shall be handled by the Indemnified Party.
Furthermore, (x) if the Indemnified Party shall have reasonably concluded that
there are likely to be defenses available to it that are different from or in
addition to those available to the Indemnifying Party; (y) if the Legal Action
involves other than money damages and seeks injunctive or

 

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other equitable relief; or (z) if a judgment against Buyer, as the Indemnified
Party, in the Legal Action will, in the good faith opinion of Buyer, establish a
custom or precedent which will be adverse to the best interest of the continuing
business of the Hotel, the Indemnifying Party, shall not be entitled to assume
the defense of the Legal Action and the defense shall be handled by the
Indemnified Party, provided that, in the case of clause (z), the Indemnifying
Party shall have the right to approve legal counsel selected by the Indemnified
Party, such approval not to be unreasonably withheld, delayed or conditioned. If
the defense of the Legal Action is handled by the Indemnified Party under the
provisions of this subsection, the Indemnifying Party shall pay all legal and
other expenses reasonably incurred by the Indemnified Party in conducting such
defense.

(iv) In any Legal Action initiated by a third party and defended by the
Indemnified Party (w) the Indemnified Party shall have the right to be
represented by advisory counsel and accountants, at its own expense, (x) the
Indemnifying Party shall keep the Indemnified Party fully informed as to the
status of such Legal Action at all stages thereof, whether or not the
Indemnified Party is represented by its own counsel, (y) the Indemnifying Party
shall make available to the Indemnified Party and its attorneys, accountants and
other representatives, all books and records of Seller relating to such Legal
Action and (z) the parties shall render to each other such assistance as may be
reasonably required in order to ensure the proper and adequate defense of such
Legal Action.

(v) In any Legal Action initiated by a third party and defended by the
Indemnifying Party, the Indemnifying Party shall not make settlement of any
claim without the written consent of the Indemnified Party, which consent shall
not be unreasonably withheld. Without limiting the generality of the foregoing,
it shall not be deemed unreasonable to withhold consent to a settlement
involving injunctive or other equitable relief against Buyer or its respective
assets, employees, Affiliates or business, or relief which Buyer reasonably
believes could establish a custom or precedent which will be adverse to the best
interests of its continuing business.

(d) Bar Date for Claims for Indemnification. Notwithstanding anything to the
contrary above, except for any claim for indemnification given in writing to the
Indemnifying Party on or before November 30, 2007, neither party shall have any
further obligation to indemnify the other pursuant to this Section 8.8 after
November 30, 2007.

8.9 Escrow Funds. To provide for the timely payment of any post-closing claims
by Buyer against Seller hereunder, at Closing, Seller shall deposit an amount
equal to One Hundred Seventy-Five Thousand and No/100 Dollars ($175,000.00) (the
“Escrow Funds”) which shall be withheld from the Purchase Price payable to
Seller and shall be deposited for a period between closing and November 30, 2007
(the “Holdback Period”) in an escrow account with the Title Company pursuant to
an escrow agreement reasonably satisfactory in form and substance to Buyer and
Seller (the “Post-Closing Agreement”), which escrow and Post-Closing Agreement
shall be established and entered into at Closing and shall be a condition to
Buyer’s obligations under this Contract. If no claims have been asserted by
Buyer against Seller, or all such claims have been satisfied, within the
Holdback Period, the Escrow Funds deposited by Seller shall be released to
Seller.

 

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8.10 Liquor Licenses. If permitted under the laws of the jurisdiction in which
the Hotel is located, the Manager shall execute and file any and all necessary
forms, applications and other documents (and Seller and Buyer shall each
cooperate with the Manager in filing such forms, applications and other
documents) with the appropriate liquor and alcoholic beverage authorities prior
to Closing.

8.11 Defeasance. At Buyer’s sole expense (except for legal fees of Seller’s
counsel), at Closing Buyer shall complete the Existing Loan Defeasance
(hereafter defined) to the satisfaction of the Lender and the reasonable
satisfaction of the Seller and the Buyer. Buyer shall be responsible to
coordinate the Existing Loan Defeasance and shall engage counsel to prepare all
documents and deliver all opinions which shall be necessary to accomplish the
Existing Loan Defeasance, which counsel shall keep Seller and Buyer regularly
and reasonably informed of such counsel’s activities in connection therewith.
Seller shall reasonably cooperate in regard to such activities and shall sign
such documents at or prior to Closing (including, without limitation, an
acknowledgment that Buyer is authorized to prepare for and consummate the
Existing Loan Defeasance) as shall be required to accomplish the Existing Loan
Defeasance in accordance with the Exiting Loan documents in a manner acceptable
to the Lender and in form and substance reasonably acceptable to the Seller and
Buyer, including, without limitation, the formation of the Defeasance Obligor
pursuant to Section 6(d) of the Amended and Restated Note dated November 2, 1998
from Seller in favor of Lender.

ARTICLE IX

CONDITIONS FOR CLOSING

9.1 Buyer’s Conditions for Closing. Unless otherwise waived in writing, and
without prejudice to Buyer’s right to cancel this Contract during the Review
Period, the duties and obligations of Buyer to proceed to Closing under the
terms and provisions of this Contract are and shall be expressly subject to
strict compliance with, and satisfaction or waiver of, each of the conditions
and contingencies set forth in this Section 9.1, each of which shall be deemed
material to this Contract. In the event of the failure of any of the conditions
set forth in this Section 9.1 or of any other condition to Buyer’s obligations
provided for in this Contract, which condition is not waived in writing by
Buyer, Buyer shall have the right at its option to declare this Contract
terminated, in which case the Earnest Money Deposit and any interest thereon
shall be immediately returned to Buyer and each of the parties shall be relieved
from further liability to the other, except as otherwise expressly provided
herein, with respect to this Contract.

(a) All of Seller’s representations and warranties contained in or made pursuant
to this Contract shall be true and correct in all material respects as if made
again on the Closing Date.

(b) Buyer shall have received all of the instruments and conveyances listed in
Section 10.2.

(c) Seller shall have performed, observed and complied in all material respects
with all of the covenants, agreements, closing requirements and conditions
required by this Contract to be performed, observed and complied with by Seller,
as and when required hereunder.

 

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(d) All Liquor Licenses shall be in full force and effect.

(e) The Escrow Funds shall have been deposited in the escrow account pursuant to
the Post-Closing Agreement and the parties thereto shall have entered into the
Post-Closing Agreement.

(f) Buyer and the Manager shall have executed and delivered the New Management
Agreement in accordance with Section 7.2(d) hereof.

9.2 Seller’s Conditions for Closing. Unless otherwise waived in writing, and
without prejudice to Seller’s right to cancel this Contract during the Review
Period, the duties and obligations of Seller to proceed to Closing under the
terms and provisions of this Contract are and shall be expressly subject to
strict compliance with, and satisfaction or waiver of, each of the conditions
and contingencies set forth in this Section 9.2, each of which shall be deemed
material to this Contract. In the event of the failure of any of the conditions
set forth in this Section 9.2, which condition is not waived in writing by
Seller, Seller shall have the right at its option to declare this Contract
terminated and null and void, in which case the remaining Earnest Money Deposit
and any interest thereon shall be immediately returned to Buyer and each of the
parties shall be relieved from further liability to the other, except as
otherwise expressly provided herein.

(a) All of Buyer’s representations and warranties contained in or made pursuant
to this Contract shall be true and correct in all material respects as if made
again on the Closing Date.

(b) Seller shall have received all of the money, instruments and conveyances
listed in Section 10.3.

(c) Buyer shall have performed, observed and complied in all material respects
with all of the covenants, agreements, closing requirements and conditions
required by this Contract to be performed, observed and complied with by Buyer,
as and when required hereunder.

(d) The franchisor under the Franchise Agreement shall have approved Buyer as a
franchisor under a new franchise agreement.

(e) Buyer and Manager shall have entered into the New Management Agreement for
the Hotel.

(f) Buyer shall have deposited the Defeasance Fee (as hereinafter defined) in
escrow in accordance with Section 10.4 below and shall have fulfilled all
requirements necessary to accomplish the Existing Loan Defeasance in a manner
satisfactory to Lender.

ARTICLE X

CLOSING AND CONVEYANCE

10.1 Closing. Unless otherwise agreed by Buyer and Seller, the Closing on the
Property shall occur on a date selected by Buyer upon at least ten (10) days’
advance notice to

 

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Seller, provided, however, that in no event shall such date be more than one
hundred fifty (150) days from the Effective Date of this Agreement, subject to
the satisfaction or waiver of the conditions precedent to Closing set forth
hereinabove. The date on which the Closing is to occur as provided in this
Section 10.1, or such other date as may be agreed upon by Buyer and Seller, is
referred to in this Contract as the “Closing Date” for the Property.
Notwithstanding the foregoing, if Buyer is diligently prosecuting the proposed
defeasance of the Existing Loan to completion and has otherwise complied with
its obligations in Section 7.2(e) above, but the Existing Loan Defeasance has
not occurred on or before the Closing Date, then Buyer and Seller shall agree to
extend the Closing Date for a reasonable time not to exceed thirty (30) days in
order to complete such defeasance. The Closing shall be held at 10:00 a.m. at
the offices of the Title Company, or as otherwise determined by Buyer and
Seller.

10.2 Deliveries of Seller. At Closing, Seller shall deliver to Buyer the
following, and, as appropriate, all instruments shall be properly executed and
conveyance instruments to be acknowledged in recordable form (the terms,
provisions and conditions of all instruments not attached hereto as Exhibits
shall be mutually agreed upon by Buyer and Seller prior to such Closing):

(a) Deed. A General Warranty deed conveying to Buyer fee simple title to the
Real Property, subject only to the Permitted Exceptions (the “Deed”).

(b) Bills of Sale. Bills of sale to Buyer and/or its designated Lessee,
conveying title to the tangible Personal Property (other than the alcoholic
beverage inventories, which, at Buyer’s election, shall be transferred by Seller
to the Manager as holder of the Liquor Licenses required for operation of the
Hotel).

(c) Existing Management and Franchise Agreements. The termination of the
Existing Management Agreement and the Existing Franchise Agreement.

(d) General Assignments. Assignments of all of Seller’s right, title and
interest in and to all FF&E Leases, Service Contracts and Leases identified on
Exhibit C hereto (the “Hotel Contracts”). The assignment shall also be a general
assignment and shall provide for the assignment of all of Seller’s right, title
and interest in all Records, Warranties, Licenses, Tradenames, Contracts,
Deposits, Hotel Advance Deposits, Plans and Specs and all other intangible
Personal Property applicable to the Hotel.

(e) FIRPTA; 1099. A FIRPTA Affidavit or Transferor’s Certificate of Non-Foreign
Status as required by Section 1445 of the Internal Revenue Code and an IRS Form
1099.

(f) Title Company Documents. All affidavits, gap indemnity agreements and other
documents reasonably required by the Title Company. At Buyer’s sole expense,
Buyer shall have obtained an irrevocable commitment directly from the Title
Company (or in the event the Title Company is not willing to issue said
irrevocable commitment, then from such other national title company as may be
selected by either Buyer or Seller) for issuance of an Owner’s Policy of Title
Insurance to Buyer insuring good and marketable fee simple absolute title to the
Real Property constituting part of the Property, subject only to the Permitted
Exceptions in the amount of the Purchase Price.

 

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(g) Possession; Estoppel Certificates. Possession of the Property, subject only
to rights of guests in possession and tenants pursuant to written leases
included in the Leases, and estoppel certificates from tenants under Leases and
the lessors under FF&E Leases in form and substance acceptable to Buyer.

(h) Vehicle Titles. The necessary certificates of titles duly endorsed for
transfer together with any required affidavits and other documentation necessary
for the transfer of title or assignment of leases from Seller to Buyer of any
motor vehicles used in connection with the Hotel’s operations.

(i) Authority Documents. Certified copy of resolutions of the Board of Directors
of Seller authorizing the sale of the Property contemplated by this Contract,
and/or other evidence reasonably satisfactory to Buyer and the Title Company
that the person or persons executing the closing documents on behalf of Seller
have full right, power and authority to do so, along with a certificate of good
standing of Seller from the State in which the Property is located.

(j) Miscellaneous. Such other instruments as are contemplated by this Contract
to be executed or delivered by Seller, reasonably required by Buyer or the Title
Company, or customarily executed in the jurisdiction in which the Hotel is
located, to effectuate the conveyance of property similar to the Hotel, with the
effect that, after the Closing, Buyer will have succeeded to all of the rights,
titles, and interests of Seller related to the Hotel and Seller will no longer
have any rights, titles, or interests in and to the Hotel.

(k) Plans, Keys, Records, Etc. To the extent not previously delivered to and in
the possession of Buyer, all Contracts, Plans and Specs, all keys for the Hotel
(which keys shall be properly tagged for identification), all Records,
including, without limitation, all Warranties, Licenses, Leases, FF&E Leases and
Service Contracts for the Hotel.

(l) Closing Statements. Seller’s Closing Statement, and a certificate confirming
the truth of Seller’s representations and warranties hereunder as of the Closing
Date.

10.3 Buyer’s Deliveries. At Closing of the Hotel, Buyer shall deliver the
following:

(a) Purchase Price. The balance of the Purchase Price, adjusted for the
adjustments provided for in Section 12.1, below, and less any sums to be
deducted therefrom as provided in Section 2.4.

(b) Authority Documents. Certified copy of resolutions of the Board of Directors
of Buyer authorizing the purchase of the Hotel contemplated by this Contract,
and/or other evidence satisfactory to Seller and the Title Company that the
person or persons executing the closing documents on behalf of Buyer have full
right, power and authority to do so.

(c) Miscellaneous. Such other instruments as are contemplated by this Contract
to be executed or delivered by Buyer, reasonably required by Seller or the Title
Company, or customarily executed in the jurisdiction in which the Hotel is
located, to effectuate the conveyance of property similar to the Hotel, with the
effect that, after the Closing, Buyer will have succeeded to all of the rights,
titles, and interests of Seller related to the Hotel and Seller will no longer
have any rights, titles, or interests in and to the Hotel.

 

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(d) Closing Statements. Buyer’s Closing Statement, and a certificate confirming
the truth of Buyer’s representations and warranties hereunder as of the Closing
Date.

10.4 Escrow Delivery Date. Notwithstanding the foregoing, it is acknowledged and
agreed that (i) the Existing Loan Documents require that the Existing Loan
Defeasance Fee and all documents to accomplish the Existing Loan Defeasance must
be deposited into escrow with an Escrow Agent acceptable to the Lender on a date
in advance of the Closing Date as required by Lender (“Escrow Delivery Date”);
(ii) all of the foregoing Closing Deliveries required of Seller and Buyer shall
be executed and delivered into escrow with Escrow Agent on or prior to the
Escrow Delivery Date; and (iii) Buyer shall pay the Existing Loan Defeasance Fee
on the Escrow Delivery Date, and thereupon neither party shall have any further
rights to the return of Closing Deliveries so delivered into escrow.

ARTICLE XI

COSTS

All Closing costs shall be paid as set forth below:

11.1 Seller’s Costs. In connection with the sale of the Property contemplated
under this Contract, Seller shall be responsible for the Grantor’s tax on the
Deed and one-half of all other transfer and recordation taxes. Seller shall also
be responsible for all sales, use or bulk transfer taxes or like taxes on or in
connection with the transfer of the Personal Property constituting part of the
Property pursuant to the Bill of Sale, in each case except as otherwise provided
in Section 12, and all accrued taxes of Seller prior to Closing and income,
sales and use taxes and other such taxes of Seller attributable to the sale of
the Property to Buyer. Seller shall be responsible for its costs (e.g., its own
attorneys’ fees, if any) related to the termination of the Existing Management
Agreement as provided in Article V (expressly excluding, however, any
termination fees and employee severance costs arising out of the termination
thereof at the Closing). Seller shall also be responsible for the expenses of
its attorneys, accountants, appraisers and other professionals, consultants and
representatives. Seller shall also be responsible for payment of all prepayment
penalties and other amounts payable in connection with the pay-off of any liens
and/or indebtedness (other than the Existing Loan) encumbering the Property. Any
Franchisor escrows, including the remaining balance of any PIP escrows, will be
transferred to Buyer.

11.2 Buyer’s Costs. In connection with the purchase of the Property contemplated
under this Contract, Buyer shall be responsible for the costs and expenses of
its attorneys, accountants and other professionals, consultants and
representatives. Buyer shall also be responsible for the costs and expenses in
connection with the preparation of any environmental report; any update to the
survey; the costs and expenses of preparation of the title insurance commitment
and the issuance of the title insurance policy contemplated by Article IV;
one-half of the transfer and recordation taxes on the Deed (excluding the
Grantor’s tax); and the per page recording charges and clerk’s fee for the Deed
(if applicable). The portion of the Grantor and Grantee tax on the deed
attributable to the Purchase Price adjustment pursuant to Section 2.5 above
shall be paid by Buyer at Closing. Buyer shall be responsible for the
performance of any post-closing PIP and/or owner requested CEP and FF&E advances
for 2007 that are unfunded as of the Closing date and the costs incurred in
connection with the negotiation, execution and

 

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performance under the New Management Agreement. Buyer shall be responsible for
any Marriott-imposed termination fee related to the termination of the Existing
Management Agreement and any expenses in obtaining a new Franchise Agreement or
the franchisor’s consent to the sale of the Property in accordance with the
Existing Franchise Agreement. Buyer shall pay all actual, out-of-pocket costs
and fees (other than fees to Seller’s counsel) (the “Defeasance Fee”), including
without limitation, the Defeasance Deposit (as defined under the Existing Loan
Documents) to defease (the “Existing Loan Defeasance”) the mortgage loan as
evidenced and secured by the Existing Loan which encumber the Property (the
“Existing Loan Documents”), with the counsel engaged to accomplish the Existing
Loan Defeasance selected by Buyer in its discretion and reasonably approved by
Seller.

ARTICLE XII

ADJUSTMENTS

12.1 Adjustments. Unless otherwise provided herein, at Closing, adjustments
between the parties shall be made as of 12:01 a.m. on the Closing Date (the
“Cutoff Time”), with the income and expenses accrued prior to the Closing Date
being allocated to Seller and the income and expenses accruing on and after the
Closing Date being allocated to Buyer, all as set forth below. All of such
adjustments and allocations shall be made in cash at Closing and shall be
collected through and/or adjusted in accordance with the terms of the Existing
Management Agreement. Except as otherwise expressly provided herein, all
apportionments and adjustments shall be made on an accrual basis in accordance
with generally accepted accounting principles. Buyer and Seller shall request
that the Manager determine the apportionments, allocations, prorations and
adjustments as of the Cutoff Time.

(a) Taxes. All real estate taxes, personal property taxes, or any other taxes
and special assessments (special or otherwise) of any nature upon the Property
levied, assessed or pending for the calendar year in which the Closing occurs
(including the period prior to Closing, regardless of when due and payable)
shall be prorated as of the Cutoff Time and, if no tax bills or assessment
statements for such calendar year are available, such amounts shall be estimated
on the basis of the best available information for such taxes and assessments
that will be due and payable on the Hotel for the calendar year in which Closing
occurs.

(b) Utilities. All suppliers of utilities shall be instructed to read meters or
otherwise determine the charges owing as of the Closing Date for services prior
thereto, which charges shall be allocated to Seller. Charges accruing after
Closing shall be allocated to Buyer. If elected by Seller, Seller shall be given
credit, and Buyer shall be charged, for any utility deposits transferred to and
received by Buyer at Closing.

(c) Income/Charges. All rents, income and charges receivable or payable under
any Leases and Hotel Contracts applicable to the Property, and any deposits,
prepayments and receipts thereunder, shall be prorated between Buyer and Seller
as of the Cutoff Time.

(d) Accounts. All reserve accounts and escrow accounts (including all FF&E
accounts, all PIP accounts, Franchisor escrows, but excluding amounts held in
tax and insurance escrow accounts, Existing Lender-imposed PIP or replacement
reserve escrow, and utility deposits to the extent excluded from the definition
of Deposits, shall become the property of Buyer, without additional charge to
Buyer and without Buyer being required to fund the same.

 

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(e) Guest Ledger. Subject to (f) below, all accounts receivable of registered
guests at the Hotel who have not checked out and were occupying rooms as of the
Cutoff Time, shall be prorated as provided herein.

(f) Room Rentals. All receipts from guest room rentals and other suite revenues
for the night in which the Cutoff Time occurs shall belong to Seller, but Seller
shall provide Buyer credit at Closing equal to the reasonable expenses to be
incurred by Buyer to clean such guests’ rooms.

(g) Advance Deposits. All prepaid rentals, room rental deposits, and all other
deposits for advance registration, banquets or future services to be provided on
and after the Closing Date shall be credited to Buyer. Buyer hereby agrees that
from and after the Closing Date, Buyer shall honor all revenue contracts and
reservations relating to the Hotel which were entered into or accepted by the
Seller or Manager in the ordinary course of business prior to the Closing Date,
at the quoted rates.

(h) Accounts Receivable. To the extent not apportioned at Closing and subject to
(e) and (f) above, all accounts receivable and credit card claims as of the
Cutoff Time shall remain the property of Seller, and Seller and Buyer agree that
the monies received from debtors owing such accounts receivable balances after
Closing, unless otherwise provided in the New Management Agreement, shall be
applied as expressly provided in such remittance, or if not specified then to
the Seller’s outstanding invoices to such account debtors in chronological order
beginning with the oldest invoices, and thereafter, to Buyer’s account.

(i) Accounts Payable. To the extent not apportioned at Closing, any
indebtedness, accounts payable, liabilities or obligations of any kind or nature
related to Seller or the Property for the periods prior to and including the
Closing Date shall be retained by Seller and promptly allocated to Seller and
evidence thereof shall be provided to Buyer, and Buyer become liable for the
accounts payable, liabilities or obligations related to the Property for the
periods from and after the Closing. Seller agrees to indemnify and hold harmless
Buyer from and against any claim, loss, damage or liability (including
reasonable attorneys’ fees and costs of enforcement of the foregoing
indemnification obligation) arising out of Seller’s failure to pay such amounts.

(j) Restaurants, Bars, Machines, Other Income. All monies received in connection
with bar, restaurant, banquet and similar and other services at the Hotel (other
than amounts due from any guest and included in room rentals) prior to the close
of business for each such operation for the night in which the Cutoff Time
occurs shall belong to Seller, and all other receipts and revenues (not
previously described in this Section 12.1) from the operation of any department
of the Hotel shall be prorated between Seller and Buyer at Closing.

12.2 Reconciliation and Final Payment. All apportionments and adjustments shall
be made in accordance with the Uniform System of Accounts, and to the extent not
inconsistent therewith, generally accepted accounting principles. To the extent
the exact amount of any

 

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adjustment item provided for in this Article XII cannot be precisely determined
on the Closing Date, the Manager shall estimate the amount thereof, for purposes
of computing the net amount due Seller or Buyer pursuant to this Article XII and
shall determine the exact amount thereof not later than thirty (30) days after
the Closing Date or, if such amount is not capable of being determined within
such 30-day period, a soon as practicable but in no event later than
November 30, 2007. Upon the final reconciliation of the allocations and
prorations under this Section, the party which owes the other party any sums
hereunder shall pay such party such sums within ten (10) days after the
reconciliation of such sums. The obligations to calculate such prorations, make
such reconciliations and pay any such sums shall survive the Closing for the
time period stipulated above.

12.3 Employees. Unless Buyer or the Manager expressly agrees otherwise, none of
the employees of the Hotel shall become employees of Buyer, as of the Closing
Date; instead, such employees shall become or remain, as the case may be,
employees of the Manager. Seller shall not give notice under any applicable
federal or state plant closing or similar act, including, if applicable, the
Worker Adjustment and Retraining Notification Provisions of 29 U.S.C.,
Section 2102, the parties having agreed that a mass layoff, as that term is
defined in 29 U.S.C., 2101(a)(3), will not have occurred. Any liability for
payment of all wages, salaries and benefits, including, without limitation,
accrued vacation pay, sick leave, bonuses, pension benefits, COBRA rights, and
other benefits accrued or earned by and due to employees at the Hotel through
the Cutoff Time, together with F.I.C.A., unemployment and other taxes and
benefits due with respect to such employees for such period, shall be charged to
Seller, in accordance with the Existing Management Agreement, for the purposes
of the adjustments to be made as of the Cutoff Time, provided that
notwithstanding the foregoing or any other provision to the contrary contained
herein, in no event shall Seller be obligated to consent to the termination of
the Existing Management Agreement if by reason thereof, Seller shall become
liable for any severance or similar compensation payable to employees at the
Hotel upon the termination of their employment on or after the Closing. All
liability for wages, salaries and benefits of the employees accruing in respect
of and attributable to the period from and after Closing shall be charged to
Buyer, in accordance with the New Management Agreement. To the extent
applicable, all such allocations and charges shall be adjusted in accordance
with the provisions of the Existing Management Agreement.

ARTICLE XIII

CASUALTY AND CONDEMNATION

13.1 Risk of Loss; Notice. Prior to Closing and the delivery of possession of
the Property to Buyer in accordance with this Contract, all risk of loss to the
Property (whether by casualty, condemnation or otherwise) shall be borne by
Seller. In the event that (a) any loss or damage to the Hotel shall occur prior
to the Closing Date as a result of fire or other casualty, or (b) Seller
receives notice that a governmental authority has initiated or threatened to
initiate a condemnation proceeding affecting the Hotel, Seller shall give Buyer
immediate written notice of such loss, damage or condemnation proceeding (which
notice shall include a certification of (i) the amounts of insurance coverages
in effect with respect to the loss or damage and (ii) if known, the amount of
the award to be received in such condemnation).

 

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13.2 Buyer’s Termination Right. If, prior to Closing and the delivery of
possession of the Property to Buyer in accordance with this Contract, (a) any
condemnation proceeding shall be pending against a substantial portion of the
Hotel or (b) there is any substantial casualty loss or damage to the Hotel,
Buyer shall have the option to terminate this Contract, provided Buyer delivers
written notice to Seller of its election within twenty (20) days after the date
Seller has delivered Buyer written notice of any such loss, damage or
condemnation as provided above, and in such event, the Earnest Money Deposit,
and any interest thereon, shall be delivered to Buyer and thereafter, except as
expressly set forth herein, no party shall have any further obligation or
liability to the other under this Contract. In the context of condemnation,
“substantial” shall mean condemnation of such portion of a Hotel (or access
thereto) as could, in Buyer’s reasonable judgment, render use of the remainder
impractical or unfeasible for the uses herein contemplated, and, in the context
of casualty loss or damage, “substantial” shall mean a loss or damage in excess
of Two Hundred Thousand and No/100 Dollars ($200,000.00) in value.

13.3 Procedure for Closing. If Buyer shall not timely elect to terminate this
Contract under Section 13.2 above, or if the loss, damage or condemnation is not
substantial, each applicable Seller agrees to pay to Buyer at the Closing all
insurance proceeds (to the extent not expended on repair or reconstruction of
the Property) or condemnation awards which Seller has received as a result of
the same, plus an amount equal to the insurance deductible (to the extent not
expended on repair or reconstruction of the Property), and assign to Buyer all
insurance proceeds and condemnation awards payable as a result of the same, in
which event the Closing shall occur without Seller replacing or repairing such
damage (or completing such replacement or repair).

ARTICLE XIV

DEFAULT REMEDIES

14.1 Buyer Default. If Buyer defaults under this Contract after the Review
Period, and such default continues for thirty (30) days following written notice
from Seller (provided no notice shall extend the time for Closing), then at
Seller’s election by written notice to Buyer, this Contract shall be terminated
and of no effect, in which event the Earnest Money Deposit, including any
interest thereon, shall be paid to and retained by the Seller as Seller’s sole
and exclusive remedy hereunder, and as liquidated damages for Buyer’s default or
failure to close, and both Buyer and Seller shall thereupon be released from all
obligations hereunder.

14.2 Seller Default. If Seller defaults under this Contract, and such default
continues for thirty (30) days following written notice from Buyer, Buyer may
elect, as Buyer’s sole and exclusive remedy, either (i) to terminate this
Contract by written notice to Seller delivered to that Seller at any time prior
to the completion of such cure, in which event the Earnest Money Deposit,
including any interest thereon, shall be returned to the Buyer, Seller shall
reimburse Buyer for its reasonable documented out of pocket costs incurred
during the Review Period up to and not exceeding a maximum reimbursable cap of
$75,000, and thereafter both the Buyer and Seller shall thereupon be released
from all obligations with respect to this Contract, except as otherwise
expressly provided herein; or (ii) to treat this Contract as being in full force
and effect by written notice to Seller delivered to Seller at any time prior to
the completion of such cure, in which event the Buyer shall have the right to an
action against the defaulting Seller for specific performance.

 

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14.3 Attorney’s Fees. Anything to the contrary herein notwithstanding, if it
shall be necessary for either the Buyer or Seller to employ an attorney to
enforce its rights pursuant to this Contract because of the default of the other
party, and the non-defaulting party is successful in enforcing such rights, then
the defaulting party shall reimburse the non-defaulting party for the
non-defaulting party’s reasonable attorneys’ fees, costs and expenses.

ARTICLE XV

NOTICES

All notices required herein shall be deemed to have been validly given, as
applicable: (i) if given by telecopy, when the telecopy is transmitted to the
party’s telecopy number specified below and confirmation of complete receipt is
received by the transmitting party during normal business hours or on the next
Business Day if not confirmed during normal business hours, (ii) if hand
delivered to a party against receipted copy, when the copy of the notice is
receipted or rejected, (iii) if given by certified mail, return receipt
requested, postage prepaid, two (2) Business Days after it is posted with the
U.S. Postal Service at the address of the party specified below or (iv) on the
next delivery day after such notices are sent by recognized and reputable
commercial overnight delivery service marked for next day delivery, return
receipt requested or similarly acknowledged:

 

If to Buyer:      Apple Seven Hospitality Ownership, Inc.      814 E. Main
Street      Richmond, Virginia 23219      Attention: Sam Reynolds      Fax No.:
(804) 344-8129 with a copy to:      Apple Seven Hospitality Ownership, Inc.     
814 E. Main Street      Richmond, Virginia 23219      Attention: Legal Dept.
     Fax No.: (804) 727-6349 If to Seller:      Alexandria Hotel      c/o Robert
Stirk      12221 NW 7th Drive      Coral Springs, FL 33071      Fax No.: (954)
755-8132 with a copy to:      Akerman Senterfitt      25th Floor      One SE
Third Ave.      Miami, FL 33131      Attention: Janice Russell, Esq.      Fax
No.: ( 305) 349-4826

Addresses may be changed by the parties hereto by written notice in accordance
with this Section.

 

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ARTICLE XVI

MISCELLANEOUS

16.1 Performance. Time is of the essence in the performance and satisfaction of
each and every obligation and condition of this Contract.

16.2 Binding Effect; Assignment. This Contract shall be binding upon and shall
inure to the benefit of each of the parties hereto, their respective successors
and assigns. Buyer shall not assign or transfer or permit the assignment or
transfer of its rights or obligations under this Contract (or designate one or
more nominees to take title to the Property) without the prior written consent
of Seller, which consent shall not be unreasonably withheld, conditioned or
delayed. Notwithstanding the immediately preceding sentence to the contrary,
Buyer may assign its rights and obligations under this Contract to any Affiliate
of Buyer without Seller’s consent.

16.3 Entire Agreement. This Contract and the Exhibits constitute the sole and
entire agreement between Buyer and Seller with respect to the subject matter
hereof. No modification of this Contract shall be binding unless signed by both
Buyer and Seller.

16.4 Governing Law. The validity, construction, interpretation and performance
of this Contract shall in all ways be governed and determined in accordance with
the laws of the Commonwealth of Virginia (without regard to conflicts of law
principles).

16.5 Captions. The captions used in this Contract have been inserted only for
purposes of convenience and the same shall not be construed or interpreted so as
to limit or define the intent or the scope of any part of this Contract.

16.6 Confidentiality. Except as either party may reasonably determine is
required by law (including without limitation laws and regulations applicable to
Buyer or its Affiliates who may be public companies): (i) prior to Closing,
Buyer and Seller shall not disclose the existence of this Contract or their
respective intentions to purchase and sell the Property or generate or
participate in any publicity or press release regarding this transaction, except
to Buyer’s and Seller’s legal counsel and lender, Buyer’s consultants and
agents, the Manager, the Franchisor and the Title Company and except as
necessitated by Buyer’s Due Diligence Examination and/or shadow management,
unless both Buyer and Seller agree in writing and as necessary to effectuate the
transactions contemplated hereby and (ii) following Closing, the parties shall
coordinate any public disclosure or release of information related to the
transactions contemplated by this Contract, and no such disclosure or release
shall be made without the prior written consent of Buyer, and no press release
shall be made without the prior written approval of Buyer and Seller.

16.7 Closing Documents. To the extent any Closing documents are not attached
hereto at the time of execution of this Contract, Buyer and Seller shall
negotiate in good faith with respect to the form and content of such Closing
documents prior to Closing.

16.8 Counterparts. This Contract may be executed in counterparts by the parties
hereto, and by facsimile signature, and each shall be considered an original and
all of which shall constitute one and the same agreement.

 

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16.9 Severability. If any provision of this Contract shall, for any reason, be
adjudged by any court of competent jurisdiction to be invalid or unenforceable,
such judgment shall not affect, impair or invalidate the remainder of this
Contract but shall be confined in its operation to the provision or provisions
hereof directly involved in the controversy in which such judgment shall have
been rendered, and this Contract shall be construed as if such provision had
never existed, unless such construction would operate as an undue hardship on
Seller or Buyer or would constitute a substantial deviation from the general
intent of the parties as reflected in this Contract.

16.10 Interpretation. For purposes of construing the provisions of this
Contract, the singular shall be deemed to include the plural and vice versa and
the use of any gender shall include the use of any other gender, as the context
may require.

16.11 (Intentionally Omitted)

16.12 Further Acts. In addition to the acts, deeds, instruments and agreements
recited herein and contemplated to be performed, executed and delivered by Buyer
and Seller, Buyer and Seller shall perform, execute and deliver or cause to be
performed, executed and delivered at the Closing or after the Closing, any and
all further acts, deeds, instruments and agreements and provide such further
assurances as the other party or the Title Company may reasonably require to
consummate the transaction contemplated hereunder.

16.13 Limited Liability. The obligations of Buyer and Seller are intended to be
binding only on Buyer and Seller, respectively, and such obligations shall not
be personally binding upon, nor shall any resort be had to, the private property
of any of their partners, trustees, officers, members, managers, directors or
shareholders, or any of their employees or agents.

16.14 Notice of Proposed Listing. In the event that the sale of the Property
contemplated by this Contract is consummated, if at any time during the five
(5) year period commencing on the date of execution of this Contract by Buyer
and Seller, Seller or any of its Affiliates propose to list for sale any hotel
property or properties owned, acquired, constructed or developed by Seller or
their Affiliates and located within a five (5)-mile radius of the Hotel (any
such other hotel property being referred to as an “Other Property”), Seller
shall promptly deliver to Buyer written notice thereof and Buyer shall have the
right to see and participate in the offering and/or otherwise make an offer to
purchase any such Other Property.

[Signatures Begin on Following Page]

 

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IN WITNESS WHEREOF, this Contract has been executed, to be effective as of the
date first above written, by the Buyer and Seller.

 

SELLER: ALEXANDRIA HOTEL, a Florida general partnership By:   RAHN/ALEXANDRIA,
LTD., a Florida limited partnership, its general partner   By:  
RAHN/ALEXANDRIA, INC., a Florida corporation, its general partner     By:  

/s/ PETER H. ROBERTS

    Name:   PETER H. ROBERTS     Title:   PRESIDENT By:   RAHN/ALEXANDRIA, INC.,
a Florida corporation, its general partner     By:  

/s/ ROBERT J. STIRK

    Name:   ROBERT J. STIRK     Title:   VICE PRESIDENT - TREASURER

[Intentionally short page; Buyer’s signature appears on following page]

 

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[Buyer’s Signature Page to Alexandria Hotel Purchase Contract]

 

BUYER: APPLE SEVEN HOSPITALITY OWNERSHIP, INC., a Virginia corporation By:  

/s/ Justin G. Knight

Name:   JUSTIN G. KNIGHT Title:   SENIOR VICE PRESIDENT

 

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EXHIBIT “A”

LEGAL DESCRIPTION OF LAND

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EXHIBIT B

LIST OF FF&E

To be provided by Buyer and/or Manager and

approved by Seller during the Review Period

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EXHIBIT C

LIST OF HOTEL CONTRACTS

See attached schedule

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EXHIBIT C-2

Other Hotel Contracts

 

1. Courtyard By Marriott Franchise Agreement between Seller and Marriott
International, Inc.;

 

2. Existing Management Agreement;

 

3. The following Cingular Wireless roof top antenna lease:

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EXHIBIT D

CONSENTS AND APPROVALS

 

A. Consents Under Hotel Contracts

None

 

B. Consents Under Other Contracts

Courtyard By Marriott Franchise Agreement between Seller and Marriott
International, Inc.

Existing Management Agreement

 

C. Governmental Approvals and Consents

Governmental Consent is required for the transfer and/or issuance of the
following alcoholic beverage licenses upon a sale of the Hotel:

Business license 9-051-008 for retail sale of beer and wine on premises; and

Business license number 9-141-002 for sale of mixed drinks, over 150 seats.

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EXHIBIT E

ENVIRONMENTAL REPORTS

EMG Phase 1 Environmental Site Assessment of Courtyard by Marriott, 2700
Eisenhower Avenue, Alexandria, Virginia; date of report: July 26, 1998. Project
No. 42693 by EMG, 11011 McCormick Road, Baltimore, MD 21031

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EXHIBIT F

CLAIMS OR LITIGATION PENDING

Pending law suit for personal injury at Hotel with defense undertaken by
Manager’s insurer (additional details to be provided by Manager during the
Review Period )

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EXHIBIT G

ESCROW AGREEMENT

THIS ESCROW AGREEMENT (this “Agreement”) made the      day of May, 2007 by and
among ALEXANDRIA HOTEL, a Florida General Partnership (“Seller”), APPLE SEVEN
HOSPITALITY OWNERSHIP, INC. a Virginia corporation, or its assigns (“Buyer”) and
LANDAMERICA AMERICAN TITLE COMPANY (“Escrow Agent”).

RECITALS

WHEREAS, pursuant to the provisions of Section 2.6 of that certain Purchase
Contract dated April     , 2007 (the “Contract”) between Seller and Buyer (the
“Parties”), the Parties have requested Escrow Agent to hold in escrow in
accordance with the provisions, upon the terms, and subject to the conditions,
of this Contract, the Earnest Money Deposit as defined in the Contract (the
“Deposit”); and

WHEREAS, the Deposit shall be delivered to Escrow Agent in accordance with the
terms of the Contract and this Contract.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the Parties hereto agree as follows:

1. Seller and Buyer hereby appoint Escrow Agent to serve as escrow agent
hereunder, and the Escrow Agent agrees to act as escrow agent hereunder in
accordance with the provisions, upon the terms and subject to the conditions of
this Contract. The Escrow Agent hereby acknowledges receipt of the Deposit.
Escrow Agent shall invest the Deposit as directed by Buyer.

2. Subject to the rights and obligations to transfer, deliver or otherwise
dispose of the Deposit, Escrow Agent shall keep the Deposit in Escrow Agent’s
possession pursuant to this Contract.

3. A. Buyer shall be entitled to an immediate return of the Deposit at any time
prior to the expiration of the Review Period (as defined in Section 3.1 of the
Contract) by providing written notice to Escrow Agent stating that Buyer has
elected to terminate the Contract pursuant to Section 3.1.

B. If at any time after the expiration of the Review Period, Buyer claims
entitlement to all or any portion of the Deposit, Buyer shall give written
notice to Escrow Agent stating that Seller has defaulted in the performance of
its obligations under the Contract beyond the applicable grace period, if any,
or that Buyer is otherwise entitled to the return of the Deposit or applicable
portion thereof and shall direct Escrow Agent to return the Deposit or
applicable portion thereof to Buyer (the “Buyer’s Notice”). Escrow Agent shall
promptly deliver a copy of Buyer’s Notice to Seller. Seller shall have three
(3) business days after receipt of the copy of Buyer’s Notice to deliver written
notice to Escrow Agent and Buyer objecting to the release of the Deposit or
applicable portion thereof to Buyer (“Seller’s Objection Notice”). If Escrow
Agent does not receive a timely Seller’s Objection Notice, Escrow Agent shall
release

 

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the Deposit or applicable portion thereof to Buyer. If Escrow Agent does receive
a timely Seller’s Objection Notice, Escrow Agent shall release the Deposit or
applicable portion thereof only upon receipt of, and in accordance with, written
instructions signed by Seller and Buyer, or the final order of a court of
competent jurisdiction.

C. If, at any time after the expiration of the Review Period, Seller claims
entitlement to the Deposit or applicable portion thereof, Seller shall give
written notice to Escrow Agent stating that Buyer has defaulted in the
performance of its obligations under the Contract, and shall direct Escrow Agent
to release the Deposit or applicable portion thereof to Seller (the “Seller’s
Notice”). Escrow Agent shall promptly deliver a copy of Seller’s Notice to
Buyer. Buyer shall have three (3) business days after receipt of the copy of
Seller’s Notice to deliver written notice to Escrow Agent and Seller objecting
to the release of the Deposit or applicable portion thereof to Seller (“Buyer’s
Objection Notice”). If Escrow Agent does not receive a timely Buyer’s Objection
Notice, Escrow Agent shall release the Deposit or applicable portion thereof to
Seller. If Escrow Agent does receive a timely Seller’s Objection Notice, Escrow
Agent shall release the Deposit or applicable portion thereof only upon receipt
of, and in accordance with, written instructions signed by Buyer and Seller, or
the final order of a court of competent jurisdiction.

4. In the performance of its duties hereunder, Escrow Agent shall be entitled to
rely upon any document, instrument or signature purporting to be genuine and
purporting to be signed by and of the Parties or their successors unless Escrow
Agent has actual knowledge to the contrary. Escrow Agent may assume that any
person purporting to give any notice or instructions in accordance with the
provisions hereof has been duly authorized to do so.

5. A. Escrow Agent shall not be liable for any error of judgment, or any action
taken or omitted to be taken hereunder, except in the case of Escrow Agent’s
willful, bad faith misconduct or negligence, nor shall Escrow Agent be liable
for the conduct or misconduct of any employee, agent or attorney thereof. Escrow
Agent shall be entitled to consult with counsel of its choosing and shall not be
liable for any action suffered or omitted in accordance with the advice of such
counsel.

B. In addition to the indemnities provided below, Escrow Agent shall not be
liable for, and each of the Parties jointly and severally hereby indemnify and
agree to save harmless and reimburse Escrow Agent from and against all loss,
cost, liability, damage and expense, including outside counsel fees in
connection with its acceptance of, or the performance of its duties and
obligations under, this Contract, including the costs and expenses of defending
against any claim arising hereunder unless the same are caused by the willful,
bad faith misconduct or negligence of Escrow Agent.

C. Escrow Agent shall not be bound or in any way affected by any notice of any
modification or cancellation of this Contract, or of any fact or circumstance
affecting or alleged to affect rights or liabilities hereunder other than as is
herein set forth, or affecting or alleged to affect the rights and liabilities
of any other person, unless notice of the same is delivered to Escrow Agent in
writing, signed by the proper parties to Escrow Agent’s satisfaction and, in the
case of modification, unless such modification shall be approved by Escrow Agent
in writing.

 

2

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6. A. Escrow Agent and any successor escrow agent, as the case may be, may
resign his or its duties and be discharged from all obligations hereunder at any
time upon giving five (5) days’ prior written notice to each of the Parties
hereto. The Parties hereto will thereupon jointly designate a successor escrow
agent hereunder within said five (5) day period to whom the Deposit shall be
delivered. In default of such a joint designation of a successor escrow agent,
Escrow Agent shall retain the Deposit as custodian thereof until otherwise
directed by the Parties hereto, jointly, or until the Deposit is released in
accordance with clause (B) below, in each case, without liability or
responsibility.

B. Anything in this Contract to the contrary notwithstanding, (i) Escrow Agent,
on notice to the Parties hereto, may take such other steps as the Escrow Agent
may elect in order to terminate its duties as Escrow Agent hereunder, including,
but not limited to, the deposit of the Deposit with a court of competent
jurisdiction in the Commonwealth of Virginia and the commencement of an action
of interpleaders, and (ii) in the event of litigation between any of the Parties
with respect to the Deposit, Escrow Agent may deposit the Deposit with the court
in which said litigation is pending and, in any such event, Escrow Agent shall
be relieved and discharged from any liability or responsibility to the Parties
hereto. Escrow Agent shall not be under any obligation to take any legal action
in connection with this Contract or its enforcement or to appear in, prosecute
or defend any action or legal proceeding which, in the opinion of Escrow Agent,
would or might involve Escrow Agent in any cost, expense, loss, damage or
liability, unless and as often as requested, Escrow Agent shall be furnished
with security and indemnity satisfactory to Escrow Agent against all such costs,
expenses (including attorney’s fees), losses, damages and liabilities.

7. All notices required herein shall be deemed to have been validly given, as
applicable: (i) if given by telecopy, when the telecopy is transmitted to the
party’s telecopy number specified below and confirmation of complete receipt is
received by the transmitting party during normal business hours or on the next
business day if not confirmed during normal business hours, (ii) if hand
delivered to a party against receipted copy, when the copy of the notice is
receipted or rejected, (iii) if given by certified mail, return receipt
requested, postage prepaid, two (2) business days after it is posted with the
U.S. Postal Service at the address of the party specified below or (iv) on the
next delivery day after such notices are sent by recognized and reputable
commercial overnight delivery service marked for next day delivery, return
receipt requested or similarly acknowledged:

 

  (i) If addressed to Seller, to:

Alexandria Hotel Limited Partnership

c/o Robert Stirk

12221 NW 7th Drive

Coral Springs, FL 33071

Fax No.: (954) 755-8132

 

3

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With a copy to:

Akerman Senterfitt

25th floor

One SE Third Avenue

Miami, Florida 33131

Attention: Janice Russell, Esq.

Fax No.: (305) 349-4826

 

  (ii) If addressed to Buyer, to:

Apple Suites Realty Group, Inc.

814 E. Main Street

Richmond, Virginia 23219

Attn: Justin Knight

Fax No.: (804) 344-8129

with a copy to:

Apple Seven Hospitality Ownership, Inc.

814 E. Main Street

Richmond, Virginia 23219

Attn: Legal Dept.

Fax No.: (804) 727-6349

 

  (iii) If addressed to Escrow Agent, to:

LandAmerica Dallas National Division

8201 Preston Road, Suite 280

Dallas TX 75225

Fax No.: (214) 368-0039

or such other address or addresses as may be expressly designated by any party
by notice given in accordance with the foregoing provisions and actually
received by the party to whom addressed.

8. This Contract may be executed in any number of counterparts each of which
shall be deemed an original and all of which, together, shall constitute one and
the same Agreement. Facsimile signatures of any of the parties shall be valid as
originals for all purposes.

9. The covenants, conditions and agreements contained in this Contract shall
bind and inure to the benefit of each of the Parties hereto and their respective
successors and assigns.

 

4

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IN WITNESS WHEREOF, this Escrow Agreement has been executed, to be effective as
of the date first above written, by the Buyer and Seller.

 

SELLER: ALEXANDRIA HOTEL, a Florida general partnership By:   RAHN/ALEXANDRIA,
LTD., a Florida limited partnership, its general partner   By:  
RAHN/ALEXANDRIA, INC., a Florida corporation, its general partner     By:  

/s/ Peter Roberts

    Name:   Peter Roberts     Title:   President By:   RAHN/ALEXANDRIA, INC., a
Florida corporation, its general partner     By:  

/s/ Robert J. Stirk

    Name:   Robert J. Stirk     Title:   Vice President/Treasurer

[Intentionally short page; Buyer’s signature appears on following page]

 

5

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[Buyer’s signature page to Escrow Agreement]

 

BUYER: APPLE SEVEN HOSPITALITY OWNERSHIP, INC. By:  

/s/ Justin Knight

Name:   Justin Knight Title:   President

 

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[Signature page to Escrow Agreement between

Alexandria Hotel and Apple Seven Hospitality Ownership, Inc.]

 

ESCROW AGENT:

LANDAMERICA AMERICAN TITLE COMPANY

By:

 

 

Name:

 

 

Title:

 

 

 

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