Exhibit 10.1

PURCHASE AGREEMENT

by and between

WSRH AUSTIN, L.P., a Delaware limited partnership (“Austin Seller”)

and

WSRH ATLANTA WAVERLY, L.L.C., a Delaware limited liability company

(“Waverly Seller”),

and

DIAMONDROCK HOSPITALITY LIMITED PARTNERSHIP,

a Delaware limited partnership (“Buyer”)

Dated:  November 13, 2006

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TABLE OF CONTENTS

1.

Certain Defined Terms

1

 

 

 

2.

Purchase and Sale

3

 

 

 

3.

Payment of Purchase Price

4

 

3.1

Escrow Deposit

4

 

3.2

Closing Payment

4

 

 

 

4.

Conditions Precedent

4

 

4.1

Title Matters

5

 

4.2

Due Diligence Reviews

6

 

4.3

Performance by Seller

8

 

4.4

Performance by Buyer

8

 

4.5

Hotel Management Agreement

8

 

4.6

Liquor Licenses

9

 

4.7

Audit

9

 

4.8

Estoppels.

10

 

 

 

5.

Closing Procedure

10

 

5.1

Closing Deliveries

10

 

5.2

Closing Costs

13

 

5.3

Prorations

13

 

 

 

6.

Condemnation or Destruction of Property

19

 

6.1

Condemnation

19

 

6.2

Fire or Other Casualty

19

 

 

 

7.

Representations, Warranties and Covenants

20

 

7.1

Representations, Warranties and Covenants of Seller

20

 

7.2

Representations and Warranties of Buyer

24

 

7.3

Survival

27

 

7.4

Interim Covenants of Seller

28

 

7.5

Seller’s Environmental Inquiry

28

 

7.6

Hotel Management Agreement Indemnity

28

 

7.7

Reservations and Bookings

28

 

7.8

Notice of Proceedings

29

 

7.9

Removal of Property

29

 

7.10

Existing Loans

29

 

7.11

Insurance

29

 

7.12

Material Alteration; Additional Renovation

29

 

7.13

Transfer of Permits

29

 

7.14

No Further Marketing

30

 

7.15

Management Agreement Consents

30

 

7.16

Baggage Inventory

30

 

7.17

Safe Deposit Boxes

30

 

7.18

No Tax Due Certificate

30

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8.

DISCLAIMER, RELEASE AND ASSUMPTION

31

 

8.1

DISCLAIMER

31

 

8.2

RELEASE

32

 

8.3

SURVIVAL

32

 

 

 

9.

Disposition Of Escrow Deposit

33

 

9.1

Default by Seller

33

 

9.2

Default By Buyer

33

 

9.3

Closing

33

 

 

 

10.

Miscellaneous

34

 

10.1

Brokers

34

 

10.2

Limitation of Liability.

34

 

10.3

Exhibits; Entire Agreement; Modification

35

 

10.4

Time of the Essence

35

 

10.5

Interpretation

35

 

10.6

Governing Law

35

 

10.7

Successors and Assigns

36

 

10.8

Notices

36

 

10.9

Third Parties

38

 

10.10

ARBITRATION OF DISPUTES

38

 

10.11

Legal Costs

39

 

10.12

No Recordation

39

 

10.13

Counterparts

39

 

10.14

Effectiveness

39

 

10.15

Press Releases

39

 

10.16

Indemnities

40

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PURCHASE AGREEMENT

          THIS AGREEMENT (this “Agreement”) is made and entered into as of the
13th day of November, 2006, by and between WSRH AUSTIN, L.P., a Delaware limited
partnership (“Austin Seller”), and WSRH ATLANTA WAVERLY, L.L.C., a Delaware
limited liability company (“Waverly Seller”), and DIAMONDROCK HOSPITALITY
LIMITED PARTNERSHIP, a Delaware limited partnership (“Buyer”).

R E C I T A L S

          A.      Austin Seller is the owner of the “Austin Property” (as
hereinafter defined).

          B.      Waverly Seller is the owner of the “Waverly Property” (as
hereinafter defined).

          C.      Buyer desires to purchase the Austin Property and the Waverly
Property on the terms and conditions hereinafter documented.

          NOW, THEREFORE, in consideration of the mutual undertakings of the
parties hereto, it is hereby agreed as follows:

Certain Defined Terms.  As used herein:

                    1.1.          “Purchase Price” shall mean Two Hundred Thirty
Seven Million Five Hundred Thousand Dollars ($237,500,000.00).  The Purchase
Price shall be allocated One Hundred Seven Million Five Hundred Thousand Dollars
($107,500,000.00) for the Austin Property, and One Hundred Thirty Million
Dollars ($130,000,000.00) for the Waverly Property.

                    1.2          “Escrow Deposit” shall mean Eleven Million
Eight Hundred Seventy Five Thousand Dollars ($11,875,000.00).

                    1.3          “Austin Property” means Austin Seller’s right,
title and interest in (a)  that certain land described in Exhibit “A-1”,
together with all easements, licenses, rights-of-way, and appurtenances
benefiting such land (the “Austin Land”), (b) all improvements, structures and
facilities located upon the Austin Land (the  “Austin Improvements”), (c) all
furniture, fixtures, and equipment and items of personal property (other than
cash) used in the operation of the Austin Improvements on or attached or
appurtenant to the Austin Improvements, including, without limitation,
furnishings, artwork, all fabric, textile and flexible plastic products which
are used in furnishing the hotel, including carpeting, drapes, bedspreads, wall
and floor coverings, mats, shower curtains and similar items, furniture and
furnishings used in the hotel, including, chairs, beds, chests, headboards,
desks, lamps, tables, television sets, mirrors, pictures, wall decorations and
similar items, signage, audio visual equipment, kitchen appliances, vehicles,
carpeting and equipment, including front desk and back of the house computer
equipment, manuals, all books and records relating to the Austin Property, phone
lists, guest lists and off site and on-site signs (collectively, the “Austin
Personal Property”), (d) all food, liquor, wine and other beverages, including
such food, liquor and other beverages held for sale in hotel rooms within the
Austin Improvements, and all consumable supplies and inventories of every kind
and

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nature including “Inventories of Merchandise” and “Inventories of Supplies” as
such terms are defined in the current Uniform System of Accounts for Hotels
published by the Hotel Association of New York City, Inc. (the “Austin
Consumables”), in each case owned by Austin Seller as of the “Closing Date” (as
hereinafter defined) (and not by tenants under “Leases” [as hereinafter defined]
applicable to the Austin Property (“Austin Leases”)), and located at, and used
in connection with the operation of, the Austin Improvements, including, without
limitation, cleaning supplies, guest supplies, paper supplies, stationary, bar
supplies, robes, slippers, fuel, laundry supplies, engineering supplies, sundry
or gift shop inventory and room, food and beverage linen, glassware and
silverware, whether in use or held in stock or storage for future use in
connection with Austin Seller’s ownership, operation or maintenance of the
Improvements, and (e) the landlord’s interest in all Austin Leases, the rights
of Austin Seller, to the extent assignable, in and to all “Austin Service
Agreements”, “Austin Renovation Commitments”, the “Austin Management Agreement”
(as such terms are hereinafter defined) and Manager’s workforce in place at the
Austin Land, goodwill, and, to the extent assignable, all right, title and
interest of Austin Seller in and to all copyrights, trademarks, trade names, and
any licenses related to the foregoing that relate to the business being
conducted on the Austin Land, other than any software licenses used by Austin
Seller in the corporate offices of Austin Seller (the matters described in this
clause “(e)”collectively called the “Austin Intangible Property”); provided,
however, in no event shall the Austin Intangible Property include Marriott or
Renaissance brand concepts or the “Intellectual Property” as defined in the
Austin Management Agreement.

                    1.4          “Waverly Property” means Waverly Seller’s
right, title and interest in (a)  that certain land described in Exhibit “A-2”,
together with all easements, licenses, rights-of-way, and appurtenances
benefiting such land (the “Waverly Land”), (b) all improvements, structures and
facilities located upon the Waverly Land (the  “Waverly Improvements”), (c) all
furniture, fixtures, equipment and items of personal property (other than cash)
used in the operation of the Waverly Improvements on or attached or appurtenant
to the Waverly Improvements including, without limitation, furnishings, artwork,
all fabric, textile and flexible plastic products which are used in furnishing
the hotel, including carpeting, drapes, bedspreads, wall and floor coverings,
mats, shower curtains and similar items, furniture and furnishings used in the
hotel, including, chairs, beds, chests, headboards, desks, lamps, tables,
television sets, mirrors, pictures, wall decorations and similar items, signage,
audio visual equipment, kitchen appliances, vehicles, carpeting and equipment,
including front desk and back of the house computer equipment, manuals, all
books and records relating to the Waverly Property, phone lists, guest lists and
off site and on-site signs (collectively, the “Waverly Personal Property”), (d)
all food, liquor, wine and other beverages, including such food, liquor and
other beverages held for sale in hotel rooms within the Waverly Improvements,
and all consumable supplies and inventories of every kind and nature including
“Inventories of Merchandise” and “Inventories of Supplies” as such terms are
defined in the current Uniform System of Accounts for Hotels published by the
Hotel Association of New York City, Inc. (the “Waverly Consumables”), in each
case owned by Waverly Seller as of the “Closing Date” (as hereinafter defined)
(and not by tenants under “Leases” [as hereinafter defined] applicable to the
Waverly Property (“Waverly Leases”)), and located at, and used in connection
with the operation of, the Improvements, including, without limitation, cleaning
supplies, guest supplies, paper supplies, stationary, bar supplies, robes,
slippers, fuel, laundry supplies, engineering supplies, sundry or gift shop
inventory and room, food and beverage linen, glassware and silverware, whether
in use or held in

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stock or storage for future use in connection with Waverly Seller’s ownership,
operation or maintenance of the Waverly Improvements, and (e) the landlord’s
interest in all Waverly Leases, the rights of Waverly Seller, to the extent
assignable, in and to all “Waverly Service Agreements”, “Waverly Renovation
Commitments”, the “Waverly Management Agreement” (as such terms are hereinafter
defined) and Manager’s workforce in place at the Waverly Land, goodwill, and, to
the extent assignable, all right, title and interest of Waverly Seller in and to
all copyrights, trademarks, trade names (including, without limitation, the word
“Waverly” as applied to the Waverly Improvements), and any licenses related to
the foregoing that relate to the business being conducted on the Waverly Land,
other than any software licenses used by Waverly Seller in the corporate offices
of Waverly Seller (the matters described in this clause “(e)”collectively called
the “Waverly Intangible Property”); provided, however, in no event shall the
Waverly Intangible Property include Marriott or Renaissance brand concepts or
the “Intellectual Property” as defined in the Waverly Management Agreement.

                    1.5          “Seller” means the Austin Seller and the
Waverly Seller, individually.

                    1.6          “Property” means the Austin Property, or the
Waverly Property, as applicable.

                    1.7          “Properties” means the Austin Property and the
Waverly Property, collectively.

                    1.8          “Hotel” means the hotel operated on the
Property.

                    1.9          “Personal Property” means the Austin Personal
Property, or the Waverly Personal Property, as applicable.

Purchase and Sale      2.1          Upon the terms and conditions hereinafter
set forth, Austin Seller shall sell to Buyer, and Buyer shall purchase from
Austin Seller, the Austin Property, and Waverly Seller shall sell to Buyer, and
Buyer shall purchase from Waverly Seller, the Waverly Property. 

         2.2      The Austin Property and the Waverly Property do not include
(and Buyer shall have no right to) Seller’s Proprietary Materials.  As used
herein, the term “Seller’s Proprietary Materials” means any and all property
condition reports or any confidential or proprietary materials, including,
without limitation, the following: (1) information contained in Seller’s credit
reports, credit authorizations, credit for financial analyses or projections,
steering committee sheets, account summaries or other internal documents
relating to such Seller’s Property, including any valuation documents and the
book value of the Property; (2) material which is subject to attorney client
privilege or which is attorney work product or may not be disclosed pursuant to
any order or agreement in any arbitration, litigation or other proceeding; (3)
appraisal reports or letters; (4) financials or tax returns of Seller or any
affiliate of Seller; or (5) material which Seller is legally required not to
disclose.  The provisions of Section 2.2 shall survive the Closing or any
termination of this Agreement.

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Payment of Purchase Price.  The Purchase Price shall be paid to Seller by Buyer
as follows:

Escrow Deposit .  On or before the date that is one Business Day after the date
on which this Agreement is executed and delivered by both Seller and Buyer,
Buyer shall deliver the Escrow Deposit to First American Title Insurance
Company, at its offices at 1801 K Street, NW, Suite 200K, Washington, D.C.
20006, Attention: Rollie Fuchtenberg (which company, in its capacity as escrow
holder hereunder, is called “Escrow Holder”).  The Escrow Deposit shall be
delivered to Escrow Holder by wire transfer of immediately available federal
funds or by bank or cashier’s check drawn on a national bank reasonably
satisfactory to Seller.  The Escrow Deposit shall be held by Escrow Holder as a
deposit against the Purchase Price, and shall be invested by Escrow Holder, in
accordance with the terms and provisions of this Agreement, and a separate
escrow agreement in the form of Exhibit “D” attached hereto and dated the date
hereof by and among Buyer, Seller and Escrow Agent (the “Interim Deposit
Agreement”).  At all times that the Escrow Deposit is being held by the Escrow
Holder, the Escrow Deposit shall be invested by Escrow Holder in the following
investments (“Approved Investments”):  (i) United States Treasury obligations,
(ii) United States Treasury backed repurchase agreements issued by a major money
center banking institution reasonably acceptable to Seller and Buyer, (iii) the
Bank of America money market fund that invests in U.S. Treasury securities known
as “Nations Treasury Reserves - Daily Shares (symbol NTRDX)” or (iv) such other
manner as may be reasonably agreed to by Seller and Buyer.  The Escrow Deposit
shall be disposed of by Escrow Holder only as provided in this Agreement.  All
accrued interest on the Escrow Deposit shall become part of the Escrow Deposit.

Closing Payment.  The balance of the Purchase Price, as adjusted by the
adjustments, prorations, credits, and allocations of income and expenses
provided for in this Agreement (as so adjusted, the “Closing Payment”), shall be
paid by Buyer delivering the Closing Payment to Escrow Agent by federal funds
wire transfer of immediately available funds on the “Closing Date” (as
hereinafter defined).

Conditions Precedent.  The obligation of Buyer to acquire the Austin Property
and the Waverly Property, the obligation of Austin Seller to transfer the Austin
Property, and the obligation of Waverly Seller to transfer the Waverly Property,
all as contemplated by this Agreement is subject to satisfaction of each of the
following conditions precedent (any of which may be waived in writing by the
party in whose favor such condition exists) on or before the applicable date
specified for satisfaction of the applicable condition.  If any of such
conditions is not fulfilled (or waived) pursuant to the terms of this Agreement,
then this Agreement shall terminate following the expiration of the applicable
cure period under Section 9.1 or 9.2, and, in connection with any such
termination made in accordance with this Section 4, the Austin Seller, the
Waverly Seller and Buyer shall be released from further obligation or liability
hereunder (except for those obligations and liabilities which, pursuant to the
terms of this Agreement, survive such termination), and the Escrow Deposit shall
be disposed of in accordance with Section 9.  The “Closing” (as hereinafter
defined) shall constitute approval by each party of all matters to which such
party has a right of approval and a waiver of all conditions precedent; except
that there shall be no waiver for a breach of the representations and warranties
contained herein or for any covenants expressly surviving Closing as set forth
herein.

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Title Matters.

Title Report/Survey.  Buyer has received the title insurance commitments dated
July 31, 2006 for the Waverly land and August 24, 2006 for the Austin land  (the
“Commitments”) from First American Title Insurance Company (which company, in
its capacity as title insurer hereunder, is herein called the “Title Company”). 
In addition, Seller has delivered and Buyer has received the surveys of the
Austin Land and the Waverly Land in Seller’s possession (the “Surveys”).  If
Buyer shall fail to deliver the “Termination Notice” as hereinafter defined on
or before the end of the “Due Diligence Period” (as hereinafter defined), Buyer
shall be deemed to have approved the exceptions to title shown on the
Commitments and the matters disclosed on the Surveys and such other title or
survey matters as are disclosed to Buyer during the Due Diligence Period.

Additional Post Due Diligence Title Matters.  Approval by Buyer of any, in
Buyer’s reasonable opinion, material additional exceptions to title or survey
matters disclosed after the end of the Due Diligence Period (“Additional Title
Matters”) shall be a condition precedent to Buyer’s obligations to purchase the
Properties (Buyer hereby agreeing that its approval of Additional Title Matters
shall not be unreasonably withheld).  Unless Buyer gives written notice (“Title
Disapproval Notice”) that it disapproves any Additional Title Matters, stating
the Additional Title Matters so disapproved, before the sooner to occur of the
Closing or ten (10) days after receipt of written notice of such Additional
Title Matters, Buyer shall be deemed to have approved such Additional Title
Matters.  Seller shall have up to a thirty (30) day period after its receipt of
any Title Disapproval Notice within which to remove the disapproved Additional
Title Matters set forth therein from title or obtain from Title Company a
commitment to issue an endorsement affirmatively insuring against such items in
a form reasonably acceptable to Buyer at no cost or expense to Buyer (Seller
having the right but not the obligation to do so), and the Closing Date shall be
extended, at Seller’s option, to allow for such thirty (30) day period.  In the
event Seller determines at any time that it is unable or unwilling to remove any
one or more of such disapproved Additional Title Matters, Seller may give
written notice to Buyer to such effect; in such event, Buyer may, at its option,
terminate this Agreement upon written notice to Seller but only if given prior
to the sooner to occur of the Closing or ten (10) days after Buyer receives
Seller’s notice.  If Buyer fails to give such termination notice by such date,
Buyer shall be deemed to have waived its objection to, and approved, the matters
set forth in Seller’s notice.

Seller Mortgage Liens.  Notwithstanding the foregoing provisions of this Section
4.1, Seller shall be obligated to take such actions as may be required by the
Title Company so that the Title Company is willing to issue title insurance to
Buyer without exception for any “Seller Mortgage Liens” (which, as used herein,
means any mortgage or deed of trust liens, construction or mechanics’ liens, tax
liens or other liens or charges in a fixed sum created or arising by, through or
under Seller or capable of computation as a fixed sum that encumber the
applicable Property).  Such actions shall include obtaining a pay-off letter and
leaving a portion of the Purchase Price in escrow to satisfy the Seller Mortgage
Liens.

Exceptions to Title.  Buyer shall be obligated to accept title to the
Properties, subject to the following exceptions to title (the “Permitted
Exceptions”):

                                        (a)          Liens for real estate taxes
and assessments not yet due and payable;

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                                        (b)          The Austin Leases, and the
Waverly Leases.

                                        (c)          Actions caused by or
through Buyer;

                                        (d)          the exceptions listed on
Exhibit “E” hereto;

                                        (e)          liens for labor and
material with respect to the Renovation Commitments to the extent of monetary
amounts not in default under the applicable agreements for such labor and
material; and

                                        (f)          Such other exceptions to
title or survey exceptions as may be approved (or deemed approved) by Buyer
pursuant to the above provisions of this Section 4.1 or otherwise expressly
permitted under this Agreement.

Conclusive evidence of the availability of such title shall be the willingness
of Title Company to issue to Buyer on the Closing Date owner’s title insurance
policies in the standard form issued in the State of Texas (with respect to the
Austin Property) and the State of Georgia (with respect to the Waverly Property)
(the “Owner’s Policies”), in the face amount of the Purchase Price, which policy
shall show (i) title to the Austin Land and the Waverly Land to be vested of
record in Buyer, and (ii) the Permitted Exceptions to be the only exceptions to
title. 

Endorsements to Owner’s Policies.  It is understood that Buyer may request a
number of endorsements to the Owner’s Policies.  Buyer shall satisfy itself
during the Due Diligence Period that the Title Company will issue such
additional endorsements in connection with the Owner’s Policies at Closing. 
However, the issuance of such endorsements shall not be a condition to Closing
and in no event shall Seller be obligated to provide any indemnity or other
document in order to issue such endorsements.

Due Diligence Reviews.  Except for title and survey matters (which shall be
governed by the provisions of Section 4.1 above), and subject to the provisions
hereinafter set forth, Buyer shall have until 5:00 p.m. (Chicago time) Monday,
November 20, 2006 (the period beginning on the date hereof and ending on such
date being herein called the “Due Diligence Period”) within which to perform and
complete all of Buyer’s due diligence examinations, reviews and inspections of
all matters pertaining to the purchase of the Properties , including all
permits, licenses, management agreements, leases, service contracts, and all
physical, environmental and compliance matters and conditions respecting the
Properties.  During the Due Diligence Period, Seller shall provide Buyer with
reasonable access to the Properties (subject to this Section 4.2) upon
reasonable advance notice and shall also make available to Buyer (to the extent
in Seller’s possession or control) and shall instruct its Manager to make
available to Buyer such leases, service contracts and other information relating
to the operation of the Properties as Buyer shall reasonably request, all upon
reasonable advance notice.  In no event, however, shall Seller be obligated to
make available any attorney-client work product or privileged documents or
documents in breach of confidentiality agreements or any internal memoranda,
correspondence, analyses, documents or reports prepared by or for Seller for its
internal use in connection with this Agreement, the transaction contemplated by
this Agreement, the acquisition of the Properties by Seller (other than any
property condition, compliance, engineering, third party inspection or
environmental reports pertaining to the Properties), and appraisals or other
valuations of the Properties in the possession or control of Seller.  Buyer
shall promptly commence, and shall diligently and in good faith pursue, its due
diligence review hereunder.

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Review Standards.  Buyer shall at all times conduct its review, inspections and
examinations in a manner so as to not cause liability, damage, lien, loss, cost
or expense to Seller or the Properties and so as to not unreasonably interfere
with or disturb the Manager, any guest or any tenant at the Properties, and
Buyer will indemnify, defend, and hold Seller and the Properties harmless from
and against any such liability, damage, lien, loss, cost or expense (the
foregoing obligation surviving any termination of this Agreement).  Prior to
entry upon a Property, Buyer shall provide Seller with copies of certificates of
insurance evidencing comprehensive general liability insurance policies (naming
Seller as an additional insured) which shall be maintained by Buyer in
connection with its investigations upon the Properties prior to the date of
entry upon the Properties, with limits, coverages and insurers under such
policies reasonably satisfactory to Seller which insurance policies must have
limits for bodily injury and death of not less than Five Million Dollars
($5,000,000) for any one occurrence and not less than Five Million Dollars
($5,000,000) for property damage liability for any one occurrence.  Without
limitation on the foregoing, in no event shall Buyer:  (a) make any intrusive
physical testing (environmental, structural or otherwise) at the Properties
(such as soil borings, water samplings or the like) without Seller’s express
written consent which shall not be unreasonably withheld or delayed (and Buyer
shall in all events promptly return the Properties to their prior condition and
repair thereafter) and which may be further conditioned upon, among other
things, Seller’s reasonable approval of the following:  (i) the insurance
coverage of the contractor who will be conducting such testing; and (ii) the
scope and nature of such testing to be performed by such contractor; (b) contact
the Manager or any tenant of a Property without Seller’s express written consent
(which shall not be unreasonably withheld or delayed); (c) contact any
governmental authority having jurisdiction over a Property without Seller’s
express written consent (which shall not be unreasonably withheld or delayed);
provided, Buyer may in the course of its due diligence contact governmental
authorities with respect to determining Seller’s and the Hotel’s compliance with
applicable zoning or building code requirements and regulations and other
applicable laws and regulations, and to cause the transfer or issuance of all
applicable licenses and permits (including liquor licenses) necessary for the
continued normal operation of the Hotel following the Closing.  Seller shall
have the right, at its option, to cause a representative of Seller to be present
at all inspections, reviews and examinations conducted hereunder.  At Seller’s
written request, at no expense to and without representation, warranty by or
liability to Buyer, and provided Buyer has the right to do so, Buyer shall
promptly deliver to Seller true and complete copies of any written reports
relating to a Property prepared for or on behalf of Buyer by any third party. 
In the event of any termination of this Agreement, Buyer shall return all
documents and other materials furnished by Seller.  Prior to Closing and subject
to Section 10.15 hereof, Buyer shall keep all non-public information or data
received or discovered in connection with any of Buyer’s inspections, reviews or
examinations strictly confidential, except for disclosures required to comply
with applicable law and disclosures to representatives, investors, lenders,
counsel and agents, provided such disclosures are on an as needed basis for
Buyer’s acquisition of the Properties, and such persons are instructed to keep
the information strictly confidential.  The provisions of this Section 4.2.1
shall survive any termination of this Agreement.

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Termination Right.  If, on or before the expiration of the Due Diligence Period,
Buyer shall determine in its sole discretion that it no longer intends to
acquire the Properties, then Buyer shall promptly (but in all events prior to
the expiration of the Due Diligence Period) notify Seller of such determination
in writing (such notice being herein called the “Termination Notice”), whereupon
this Agreement, and the obligations of the parties hereunder, shall terminate
(and no party hereto shall have any further obligation in connection herewith
except under those provisions that expressly survive a termination of this
Agreement).  In such event, Escrow Holder shall deliver One Hundred Dollars
($100) of the Escrow Deposit to Seller as consideration for entering into this
Agreement, and the remainder of the Escrow Deposit shall be released to Buyer by
Escrow Holder.  In the event that Buyer shall fail to have delivered the
Termination Notice to Seller before the expiration of the Due Diligence Period,
Buyer shall have no further right to terminate this Agreement pursuant to this
Section 4.2, and the Escrow Deposit shall not be refundable to Buyer for any
reason whatsoever, except as otherwise set forth in this Agreement. 

Performance by Seller.  The accuracy of Seller’s representations and warranties
in all material respects and the performance and observance, in all material
respects, by Seller of all covenants and agreements of this Agreement to be
performed or observed by Seller prior to or on the Closing Date shall be a
condition precedent to Buyer’s obligation to purchase the Properties.  Without
limitation on the foregoing, in the event that the “Seller Closing Certificate”
(as hereinafter defined) shall disclose any material inaccuracies or material
adverse changes in the representations and warranties of Seller which are not
otherwise permitted or contemplated by the terms of this Agreement or known to
Buyer (as defined in Section 7.2.5 hereof) during the Due Diligence Period, then
Buyer shall have the right to terminate this Agreement.

Performance by Buyer.  The accuracy of Buyer’s representations and warranties in
all material respects and the performance and observance, in all material
respects, by Buyer of all covenants and agreements of this Agreement to be
performed or observed by it prior to or on the Closing Date shall be a condition
precedent to Seller’s obligation to sell the Properties.  Without limitation on
the foregoing, in the event that the “Buyer Closing Certificate” (as hereinafter
defined) shall disclose any material inaccuracies or material adverse changes in
the representations and warranties of Buyer contained in Section 7.2 which are
not permitted or contemplated by the terms of this Agreement, then Seller shall
have the right to terminate this Agreement.

Hotel Management Agreement.  Austin Property is subject to a hotel management
dated June 23, 2005, by and between Austin Seller and Renaissance Hotel
Operating Company,  a Delaware corporation (“Manager”), as amended by that
certain first amendment between Manager and Austin Seller dated September 26,
2006 , and as further amended the “Multi-Hotel Letter Agreement” (said agreement
as so amended are herein called the “Austin Management Agreement”).  Waverly
Property is subject to a hotel management dated June 23, 2005, by and between
Waverly Seller and Manager, as amended by that certain first amendment between
Manager and Waverly Seller dated September 26, 2006, and as further amended the
“Multi-Hotel Letter Agreement” (said agreement as so amended are herein called
the “Austin Management Agreement”). The “Multi-Hotel Letter Agreement” means
certain letter agreement dated September 26, 2006, from Manager and Renaissance
Hotel Management Company, LLC and Renaissance Hotel Operating Company, addressed
to WSRH Holdings, L.L.C., and executed by Austin Seller, Waverly Seller and
various other hotel owners, said letter agreement providing in Section 9 thereof
that, “This letter agreement and the provisions hereof shall terminate with

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respect to any Hotel on the earlier to occur of (i) a Sale of the Hotel pursuant
to Section 10.02 of the applicable Management Agreement, or (ii) the Termination
of the Applicable Management Agreement.” “Hotel Management Agreements” means the
Austin Management Agreement and the Waverly Management Agreement.  The
obligations of Seller to close the sale contemplated hereby shall be conditioned
upon Buyer satisfying all of the requirements set forth in the Management
Agreements, including, without limitation, the requirements set forth in Section
10.2 thereof.  Buyer represents and warrants that Buyer has reviewed the
Management Agreements and will be able to satisfy the requirements of Section
10.2 of the Management Agreements.  If Manager will not permit an assignment of
the Management Agreements to Buyer solely as a result of Buyer’s failure to
satisfy the requirements of Section 10.2 of the Management Agreement, then Buyer
will be deemed to be in default hereunder and Seller may terminate this
Agreement and retain the Escrow Deposit as liquidated damages.

Liquor Licenses.  Buyer acknowledges that there may be various liquor licenses
associated with the operation of the Hotels.  As soon as is reasonably
practicable after the full execution and delivery of this Agreement, Buyer shall
file an application with the required state and local agencies for the issuance
of such licenses (the “Required Liquor Licenses”) as are necessary for the
continued service of alcoholic beverages at Austin Property and at the Waverly
Property.  Buyer shall diligently pursue the obtaining of the Required Liquor
Licenses at Buyer’s sole cost and expense.  Seller shall cooperate and instruct
Manager to cooperate reasonably with Buyer in its efforts to obtain the Required
Liquor Licenses and shall cause any violation of liquor laws or regulations
which would affect the ability of Buyer to obtain the Required Liquor Licenses
by Closing to be cured to the satisfaction of the liquor license authorities and
any fines to be paid, all prior to the Closing Date and at Seller’s sole cost
and expense.  The issuance of the Required Liquor Licenses shall not be a
condition to Buyer’s obligations to close the sale contemplated hereby. 
However, if applicable and as permitted by applicable law, Seller shall enter
into a customary post-closing interim agreement for use of Seller’s liquor
licenses with customary indemnities whereby such alcoholic beverage operations
are continued or managed by the existing holder of the liquor licenses until the
Required Liquor Licenses can be obtained by Buyer following the Closing.

                    Audit.  Buyer shall have the right to obtain from a
third-party certified public accountant (at Buyer’s sole cost and expense)
audits with respect to the Austin Property and the Waverly Property providing
all disclosures required by generally accepted accounting principles and
Securities and Exchange Commission regulations, specifically in accordance with
Section 3.05 of Regulation S-X and all related rules and regulations thereof. 
Seller, at no cost or expense to Seller, shall, and shall use reasonable efforts
to cause its Manager and the predecessor owner(s) and manager(s) of the
Properties to, cooperate in a commercially reasonable manner in connection with
the performance of such audits and to provide information reasonably requested
by such accountants.  In connection with such audits, Seller, at no cost or
expense to Seller, shall and shall use reasonable efforts to cause Manager and
the predecessor owner(s) and manager(s) to provide the accountants performing
such audits with representation letters conforming to American Institute of
Certified Public Accountants professional standards.  Buyer completing the
preparation of any such audited financial statements shall not be a condition to
Closing and the failure to obtain same will not permit Buyer to terminate this
Agreement.

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                    Estoppels.  Seller shall have obtained and delivered to
Buyer (and Seller agrees to use commercial reasonable efforts to so obtain)
estoppel letters addressed to Buyer dated within forty-five (45) days of the
Closing with respect to the Hotel Management Agreements, substantially in the
form required under each such agreement, which estoppels shall, among other
things, certify that to the knowledge of the Manager there are no material
defaults under any such agreement.  Seller shall not be in default under this
Agreement or have any liability to Buyer if Seller is unable to obtain any of
the foregoing estoppel letters, provided Seller uses commercially reasonable
efforts to do so.  If required by the Title Company, Seller shall also have
obtained (and Seller shall use commercially reasonable efforts to obtain) and
deliver to the Title Company such lien waiver from Manager with respect to the
period prior to Closing sufficient to cause the Title Company not to make an
exception in the Owner’s Policy for any lien of right to a lien in favor of
Manager.

Closing Procedure.  The closing (the “Closing”) of the sale and purchase herein
provided shall occur on the Closing Date.  As used herein, “Closing Date” means
December 21, 2006, or such other date as may be agreed upon by Buyer and
Seller.  The Closing Date is subject to extension under Section 4.1.2.  Buyer
shall deliver its funds to the Escrow Holder no later than 11:00 a.m. central
time on the Closing Date.  The Closing shall be accomplished pursuant to escrow
instructions (the “Escrow Instructions”) to be executed by and among Buyer,
Seller and the Escrow Holder in the form of Exhibit “F” hereto.

Closing Deliveries.  Prior to the Closing Date, the parties shall deliver to the
Escrow Holder the following:

Seller Deliveries.  Seller shall deliver to Escrow Holder the following:

                                        (g)          Duly executed and
acknowledged original special warranty deeds to the Austin Property and to the
Waverly Property (the “Deeds”) in the forms of Exhibits “G-1” and “G-2”
respectively;

                                        (h)          A duly executed and
acknowledged original assignment and assumption of Hotel Management Agreement
(the “Hotel Management Agreement Assignment and Assumption”) in the form of
Exhibit “H” for each of the Austin Property and the Waverly Property;

                                        (i)          The other assignment
documents (collectively, “Other Assignment and Assumption Agreements”) attached
hereto as Exhibit “I”, duly executed by Seller;

                                        (j)          A duly executed Bill of
Sale, Assignment and Assumption Agreement (“Bill of Sale”) in the form of
Exhibit “J” with respect to the Austin Property and with respect to the Waverly
Property;

                                        (k)          A duly executed original
certificate of Seller (the “Seller Closing Certificate”) in the form of Exhibit
“K” updating the representations and warranties contained in Section 7.1 to the
Closing Date and noting any changes thereto;

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                                        (l)          A duly executed original
certificate of “non-foreign” status in the form of Exhibit “L-1” executed by
WSRH Holdings, LLC with respect to transfer of the Austin Property, a duly
executed original certificate of “non-foreign” status in the form of Exhibit
“L-2” executed by WSRH Holdings, LLC with respect to the transfer of the Waverly
Property, a duly executed original Affidavit of Seller’s Residence in the form
of Exhibit “L-3” with respect to the Waverly Property, and any required state
certificate that is sufficient to exempt Seller from any state withholding
requirement with respect to the sale contemplated by this Agreement;

                                        (m)         Evidence reasonably
satisfactory to Buyer and Title Company respecting the due organization, good
standing and qualification to do business of Seller and the due authorization
and execution of this Agreement and the documents required to be delivered
hereunder;

                                        (n)          To the extent they are then
in Seller’s possession, and have not theretofore been delivered to Buyer:  (i)
any plans and specifications for the Improvements; (ii) all unexpired warranties
and guarantees which Seller has received in connection with any work or services
performed with respect to, or equipment installed in, the Improvements; (iii)
all keys for the Improvements; (iv) originals of all Leases, all correspondence
to or from any tenants, relating to the Leases; (v) originals of all Service
Agreements that will remain in effect after the Closing; (vi) a set of guest
registration cards; (vii) a list of advance room reservations and functions;
(viii) a list of Seller’s outstanding accounts receivable as of midnight on the
date prior to the Closing; (ix) all permits and licenses for either Property;
and (x) all books and records relating solely to the operation of the Properties
(which materials under this clause (h) may be either delivered at Closing or
left at the management office at applicable Property);

                                        (o)          Tenant Notices to each of
(i) the tenants under the Austin Tenant Leases, duly executed by the Austin
Seller, addressed to each of such tenants, in the form of Exhibit “U-1” and (ii)
the tenants under the Waverly Tenant Leases, duly executed by the Waverly
Seller, addressed to each of such tenants, in the form of Exhibit “U-2”;

                                        (p)          Notices of the sale to
Buyer to each of the vendors under the Service Agreements duly executed by the
Seller, addressed to each of such vendors;

                                        (q)          Duly executed and
acknowledged resale certificates or other exemption certificates which are
applicable to sales taxes on the transfer of personal property;  and

                                        (r)          Such additional documents
as may be reasonably required by Buyer and Title Company in order to consummate
the transactions hereunder (provided the same do not increase in any material
respect the costs to, or liability or obligations of, Seller in a manner not
otherwise provided for herein).  However, in no event shall Seller be obligated
to provide any indemnity or other document to the Title Company with respect to
the issuance of the Title Policies other than the certificate in the form of
Exhibit “M” (the “Seller’s Title Certificate”), and the standard title indemnity
(sometimes called a “gap indemnity”) against matters created by the Seller on
the day prior to the Closing, on the day of the Closing, and on the day
following the Closing up to the time on such day following the Closing that the
Deeds are recorded.

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Buyer Deliveries.  Buyer shall deliver to the Escrow Holder the following:

                                        (s)          The Closing Payment in
immediately available federal funds;

                                        (t)          An original Hotel
Management Agreement Assignment and Assumption for each of the Austin Property
and the Waverly Property;

                                        (u)          An original of each Other
Assignment and Assumption Agreement for each of the Austin Property and the
Waverly Property.

                                        (v)          A duly executed original
Bill of Sale with respect to each of the Austin Property and the Waverly
Property.

                                        (w)          A duly executed original
certificate of Buyer (“Buyer Closing Certificate”) in the form of Exhibit “N”
updating the representations and warranties contained in Section 7.2 to the
Closing Date and noting any changes thereto;

                                        (x)          Evidence reasonably
satisfactory to Seller and Title Company respecting the due organization of
Buyer and the due authorization and execution of this Agreement and the
documents required to be delivered hereunder; and

                                        (y)          Such additional documents
as may be reasonably required by Seller and Title Company in or to consummate
the transactions hereunder (provided the same do not increase in any material
respect the costs to, or liability or obligations of, Buyer in a manner not
otherwise provided for herein).

Mutual Deliveries.  Buyer and Seller shall mutually execute and deliver to the
Escrow Holder, the following:

                                        (z)          A Closing Statement
reflecting the Purchase Price, and the adjustments and prorations required
hereunder and the allocation of income and expenses required hereby; and

                                        (aa)        Such transfer tax forms as
required by state and local authorities.

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Closing Costs.  With reference to Closing, Seller shall pay (1) 50% of all
escrow charges, (2) the brokerage commission payable at Closing to Hodges Ward
Elliot, Inc. (the “Broker”), under separate agreement between Broker and Seller,
(3) the premium for standard coverage title insurance with respect to the
Owner’s Policy on the Austin Land and Austin Improvements, and (4) all state,
county and city excise taxes and transfer fees payable in connection with the
transfer of the Waverly Land and the Waverly Improvements.  Buyer shall pay (1)
all state, county and city excise taxes and transfer fees payable in connection
with the transfer of the Austin Property, and all state, county and city excise
taxes and transfer fees payable in connection with any part of the Waverly
Property other than the Waverly Land and the Waverly Improvements, (2) all
recording charges, if any, in connection with the transfers contemplated hereby,
(3) the premiums and costs of obtaining the Owner’s Policies, other than the
limited portion thereof described above in this Section 5.2 for which Seller is
responsible, (4) Buyer’s due diligence costs and property inspection fees,
including the cost of any additional environmental, asbestos, structural and
physical audits it deems necessary, (5) the costs, if any, to update the
Existing Surveys, (6) any personal property sales tax, (7) all fees, costs or
expenses in connection with any financing obtained by Buyer in connection with
the transaction contemplated hereby, and (8) 50% of all escrow charges.   Seller
shall pay all costs associated with the payoff of its existing loans with
respect to the Properties (including any exit or prepayment fees).

Prorations Items to be Prorated.  The following provisions shall govern the
adjustments and prorations that shall be made at Closing and the allocation of
income and expenses from the Properties between Seller and Buyer.  Except as
expressly provided in this Section 5.3.1, all items of operating revenue and
operating expense of the Properties, with respect to the period prior to
12:00:01 a.m. (the “Cut-Off Time”) local time at the Hotel on the Closing Date,
shall be for the account of and paid by Seller and all items of operating
revenue and operating expense of the Properties with respect to the period after
the Cut-Off Time, shall be for the account of and paid by Buyer.

                                        (bb)        Taxes.  (i)  All unpaid real
estate taxes, personal property taxes and other assessments on each Property
shall be prorated at Closing.  Seller shall be responsible for all real property
taxes and personal property taxes and other assessments for the tax periods
prior to the Closing Date, and Buyer shall be responsible for all real property
taxes and personal property taxes and other assessments for the tax periods from
and after the Closing Date; however if any special improvement assessments on
any Property are payable in installments, then the installments (including the
current installment) shall be prorated as of the Cut-Off Time (with Buyer
assuming the obligation to pay any installments payable after the Closing).  If
the real property tax rate, personal property tax rate or any assessment has not
been set for the tax year in which the Closing occurs, then the proration of
such real property tax, personal property tax or assessment shall be based on
the previous tax bill for the preceding tax year for such tax or assessment
which has not been set for the tax year in which the Closing occurs, and such
proration shall be adjusted between Seller and Buyer upon presentation of
written evidence that the actual taxes or assessment paid (determined as of the
date such taxes or assessment are actually paid) for the tax year in which the
Closing occurs differ from the amounts used at Closing and in accordance with
Section 5.3.2.  Seller shall consult with Buyer regarding any assessment for
real property taxes for the 2006 tax year.  Seller and Buyer acknowledge that
Seller has retained counsel to seek a reduction in real estate taxes for the
fiscal period in which the Closing occurs and the parties shall reasonably
cooperate with each other in connection with any such proceedings so as to
maximize the benefits of such proceedings for both.  The amount of any tax
refunds (net of attorneys’ fees and other costs incurred by Seller in seeking
such a reduction) with respect to any portion of the Properties for all tax
years prior to the tax year in which the Cut-Off Time occurs shall be allocated
entirely to Seller.  The amount of any tax refunds (net of attorneys’ fees and
other costs incurred by Seller in seeking such a reduction) with respect to any
portion of the Properties for the tax year in which the Cut-Off Time occurs
shall be apportioned between Seller and Buyer in the same manner as unpaid real
estate taxes, personal property taxes and other assessments on the Properties.

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          (ii)  The parties acknowledge that certain taxes accrue and are
payable to the various local governments by any business entity operating a
hotel and its related facilities.  Included in those taxes may be business and
occupation taxes, retail sales and use taxes, gross receipts taxes, and other
special lodging or hotel taxes.  For purpose of this Agreement, all of such
taxes (expressly excluding taxes and assessments covered by Section 5.3.1(a)(i)
above, corporate franchise taxes, and federal, state, and local income taxes)
(hereinafter referred to as “Operational Taxes”) shall be allocated between
Seller and Buyer such that those attributable to the period prior to the Cut-Off
Time shall be allocable to Seller and those attributable to the period from and
after the Cut-Off Time shall be to Buyer (with the attribution of such taxes
hereunder to be done in a manner consistent with the attribution under this
Agreement of the applicable revenues on which such taxes may be based).  Buyer
shall receive a credit for any Operational Taxes attributable to the period
prior to the Cut-Off Time which Seller has not paid.  Except for the Operational
Taxes for which (and in the amount for which) Buyer has received a credit under
this Section 5.3(a)(ii), Seller shall be solely responsible for payment of the
Operational Taxes with respect to the period prior to the Cut-Off Time, and
Buyer shall be solely responsible for payment of such Operational Taxes with
respect to the period after the Cut-Off Time (and those for which and in the
amount for which it receives a credit).

                                        (cc)        Lease and Rental Expenses. 
Collected rents and other payments from the tenants under the Leases (the
“Tenants”), shall be prorated between Seller and Buyer as of 11:59 P.M. on the
day prior to the Closing Date.  If on the Closing Date there are past due rents
or charges owed by Tenants, collection of such amounts shall be prorated when
received.  If any payments of rent or other fixed charges received by Seller or
Buyer on or after the Closing Date are payable to the other party by reason of
this allocation, the appropriate sum shall be promptly paid to the other party. 
Seller is responsible, at its cost, to direct Manager to collect all past due
amounts prior to Closing.  If any Lease contains obligations on the part of the
Tenant for tax, escalation, percentage, or overage payments (“additional rent”)
and such additional rent is not yet payable as of the Closing Date, then if
Seller’s portion of such additional rent is collected by Buyer from the Tenant,
Buyer shall remit such amounts to Seller.  Buyer will make reasonable efforts to
collect all past due rents, if any, for Seller’s account, but Buyer shall not be
obligated to commence dispossession or other legal proceedings. 

                                        (dd)        Adjustment on Account of
Future Renovation Costs and Applicable Reserves.

                                                      (i)          Certain
Definitions.  As used herein, the following terms  mean as follows:

                                                                    (1)          “Closing
Date Remaining PIP Amount” means the amount by which (aa) the aggregate of the
amount shown on Schedule 1 to each of the First Amendments to Management
Agreements as “Total Capital Expenditures” (i.e., the sum of $4,173,065 as to
the Austin Property, and $7,552,589 as to the Waverly Property), exceeds (bb)
the aggregate of the actual dollars expended prior to the Closing Date by each
Seller or Manager on behalf of each Seller as to the matters (the “PIP Work”)
referred to on said Schedule 1 (including, but not limited to, matters therein
referred to as “work”, “fees”, “taxes”, “freight” and “other”).

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(2)          “Closing Date Project Sources”  means the aggregate of the sum of
(aa) the balance as of the Closing Date of  the “FF&E Reserve” (as defined in
the each of Management Agreements), and any other reserve account with respect
to the Austin Property or the Waverly Property held by Manager, (bb) any sums to
be funded into the FF&E Reserve for “Accounting Period 13” for 2006 (said
Accounting Period 13 being the “Accounting Period” (as defined in each of the
Management Agreements) ending December 29, 2006), which amount for such
Accounting Period is 4% of Gross Revenues (as defined in the Management
Agreements) for such Accounting Period, and (cc) the $300,000 reserve to be
established in 2007 as shown on Schedule 1 to the First Amendment to Waverly
Management Agreement.

                                                        (ii)        Adjustment
Calculation.  If the Closing Date Remaining PIP Amount exceeds the Closing Date
Project Sources, then, on the Closing Date,  Buyer shall receive a credit for
the amount by which the Closing Date Remaining PIP Amount exceeds the Closing
Date Project Sources.  Conversely, if the Closing Date Project Sources exceeds
the Closing Date Remaining PIP Amount,  then, on the Closing Date, Seller shall
receive a credit for the amount by which the Closing Date Project Sources
exceeds the Closing Date Remaining PIP Amount.

                                        (ee)          Hotel Reservations and
Revenues.

                                                        (i)          Reservations. 
On the Closing Date, Seller shall request that Manager provide Buyer with its
schedule of confirmed reservations for dates subsequent to the Closing Date,
which schedule shall list the party for whose benefit the reservation was made,
the amount of deposit thereunder, the amount of any room rental deposits, and
the amount of any other deposits made for advance reservations, banquets or
future services to be provided after the Closing Date.  Buyer will honor (or
cause its manager to honor), for its account, all pre-Closing Date reservations
as so confirmed by Seller for dates subsequent to the Closing Date at the rate
or price previously agreed to by Seller (so long as such rates conform to
customary rates charged by Seller).  Seller shall pay or credit to Buyer the
amount of all prepayments or deposits disclosed in such schedule.

                                                        (ii)          Guest
Revenues.  Seller shall receive a credit for, and Buyer shall purchase from
Seller, the Guest Ledger.  Such credit shall equal the amount of the accounts
receivable (or 50% thereof in the case of the final night’s room revenue,
including any sales taxes, room taxes and other taxes charged to guests in such
rooms, all parking charges, sales from mini-bars, in-room food and beverage,
telephone, facsimile and data communications, in-room movie, laundry, and other
service charges allocated to such rooms with respect to the night), less credit
card charges, travel company charges and similar commissions.  Revenues from
guest rooms in the Hotel occupied on the night containing the Cut-Off Time,
including any sales taxes, room taxes and other taxes charged to guests in such
rooms, all parking charges, sales from mini bars, in room food and beverage,
telephone, facsimile and data communications, in room movie, laundry, and other
service charges allocated to such rooms with respect to the night containing the
Cut-Off Time shall be divided equally between Seller and Buyer; provided,
however, that to the extent the times at which food and beverage sales,
telephone, facsimile or data communication, in room movie, laundry, and other
services are ordered by guests can be determined, the same shall be allocated
between Seller and Buyer based on when orders for the same were received, with
orders originating prior to Cut-Off Time being allocable to Seller, and orders
originating from and after the Cut-Off Time being allocable to Buyer.  All other
revenues from restaurants, lounges, and other service operations conducted at
the Properties shall be allocated based on whether the same accrued before or
from and after the Cut-Off Time as described in the preceding sentence, and
Seller shall instruct the Manager, and Buyer shall instruct its manager, to
separately record sales occurring before and from and after the Cut-Off Time. 
The foregoing amounts are referred to collectively as “Guest Revenues”.

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                                                        (iii)          Banquet
and Meeting Room Revenues.  Revenues from conferences, receptions, meetings, and
other functions occurring in any conference, banquet or meeting rooms in the
Hotel, including usage charges and related taxes, food and beverage sales, valet
parking charges, equipment rentals, and telecommunications charges, shall be
allocated between Seller and Buyer, based on when the function therein
commenced, with (i) one-day functions commencing prior to the Cut-Off Time being
allocable to Seller; (ii) one day functions commencing from and after the
Cut-Off Time being allocable to Buyer; and (iii) multi day functions that
include periods both before and after the Cut-Off Time being prorated between
Seller and Buyer according to the period of time before and from and after the
Cut-Off Time.  The foregoing amounts are referred to collectively as “Conference
Revenues”.

                                                        (iv)          Unredeemed
Gift Certificates and Vouchers.  Buyer shall receive a credit against the
Purchase Price at Closing the face value of all paid for vouchers, gift
certificates and other promotional materials (together, the “Vouchers”) which
may be used as full or partial payment for any Hotel service including, room
rentals, food and beverage service, or any other item either borne directly by
the owner of the Hotel or which is reimbursable by the owner of the Hotel (i.e.,
if a gift certificate can be used to pay for items in the Hotel gift shop).  The
parties also agree that no credit shall be given for any complimentary Vouchers.
Seller shall request that Manager deliver to Buyer one (1) business day prior to
the Closing Date a list of all such Vouchers. 

                                        (ff)          Utilities and Insurance. 
Buyer shall be responsible for all dealings with utility service providers with
respect to any actions to change over accounts to Buyer as of the Closing Date. 
All charges for utilities shall be prorated as of the Closing Date.  In the
event the actual amounts for such charges for utilities or telephone calls are
not known as of the Closing Date or cannot be billed separately to the
responsible party, such charges shall be prorated between the parties as of the
Closing Date once the actual amounts thereof become known.  If necessary, at the
request of Buyer, Seller shall complete the customary forms required by any
telephone company or telephone company service provider to assign the
Properties’ existing telephone numbers to Buyer.  Any fees payable by the owner
of the Hotel in respect of the insurance policies maintained by Manager for a
Property shall be prorated as of the Closing Date.  The parties shall request
that Manager add Buyer as an additional named insured on any such insurance
policies as of the Closing Date.

                                        (gg)          Permits.  Permit and
license fees of assignable permits and licenses, if any, shall be prorated as of
the Closing Date.

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                                        (hh)          Service Agreements.  Fees
and other amounts, including accrued employee expenses, payable and/or accrued
under the Hotel Management Agreements and payments due under the other Service
Agreements in the name of Seller shall be prorated as of the Closing Date. 
Seller shall be required to pay or cause to be paid (or reimbursed to Manager)
or credit to Buyer at the Closing any accrued or earned wages, vacation pay,
sick pay, bonuses, pension, profit-sharing and welfare benefits and other
compensation and fringe benefits of all persons employed at any Property on or
before the Closing Date, including any employment taxes or other fees or
assessments attributable thereto; it being understood, however, that Seller
shall not be required to pay any withdrawal liability with respect to any union
employees.  The parties further agree that with respect to sick pay, at the end
of the calendar year in which the Closing occurs, Buyer shall reimburse Seller
for all unused sick pay credited to Buyer at Closing which did not carry over to
the following calendar year.

Calculation.  The Seller shall prepare and deliver to Buyer a preliminary
closing statement (the “Preliminary Closing Statement”) which shall show the net
amount due either to Seller or Buyer as a result thereof, and such net amount
will be added to, or subtracted from the payment of the Purchase Price to be
paid to Seller pursuant to Section 5.1.2 hereof.  If any of the prorations or
credits cannot be calculated based on actual figures, then they shall be
calculated based on Seller’s good faith estimates thereof.  Within one hundred
and twenty (120) days following the Closing Date, Buyer shall prepare and submit
to Seller a recalculation of the prorations and credits, reflecting actual
figures and not estimates.  Such recalculation shall be binding on Buyer and
Seller unless Seller delivers to Buyer, within thirty (30) days after Seller has
received such recalculation, a notice (“Audit Notice”) stating Seller does not
agree with such calculations, and, if such notice is given, a nationally
recognized accounting firm selected by Seller and reasonably approved by Buyer
shall be engaged to make the final determination of such prorations and credits
(the accounting firm engaged to make such determination herein called the
“Accounting  Firm”).  Within thirty (30) days after the delivery of an Audit
Notice, Seller shall provide notice to Buyer of the accounting firm selected by
Seller; if Buyer reasonably objects to the accounting firm so selected by
Seller, Buyer shall give notice of disapproval within fifteen (15) days after
the delivery of the notice from Seller of Seller’s selection (and if Buyer fails
to give a notice of such disapproval within such fifteen (15) day period, Buyer
will be deemed to have approved Seller’s selection).  If Buyer reasonably
objects to the firm so selected by Seller within such fifteen (15) day period,
Seller shall nominate another accounting firm, which shall be subject to Buyer’s
reasonable approval using the same procedure as provided in the preceding
sentence.  The fees and costs of the Accounting Firm in making such
determination shall be borne as follows:  if the net amount of the prorations
and credits determined by the Accounting Firm is within 2% of the net amount as
determined by Buyer, Seller shall bear the entire fees and costs of the
Accounting Firm in making such determination; and if the net amount of the
prorations and credits determined by the Accounting Firm is greater than 2% of
the net amount as determined by Buyer, Buyer shall bear the entire fees and
costs of the Accounting Firm in making such determination.  Each of Seller and
Buyer shall cooperate in good faith and act reasonably after Closing to assist
Manager and  Accounting Firm in their determinations.

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Accounts Receivable.  Accounts Receivable shall be identified as of the Cut-Off
Time.  Seller shall receive a credit for, and Buyer shall purchase from Seller,
all accounts receivable (other than the Guest Ledger) that are less than ninety
(90) days past due.  Such credit shall equal the amount of the accounts
receivable, less (i) credit card charges, travel company charges and similar
commissions and (ii) on all accounts receivable other than credit card
receivables, a 3% discount for uncollectible amounts for receivables that are
less than ninety (90) days past due.  Subject to the following sentence, all
accounts receivable and credit card claims for goods and services furnished
prior to the Cut-Off Time that are not so purchased by Buyer shall remain the
property of Seller and, to the extent Buyer receives any payments on account
thereof after Closing (A) if the applicable account debtor who makes such
payment then owes payment on one of Seller’s accounts receivable and no accounts
receivable of Buyer, then Buyer shall immediately remit such amount (net of
travel agent commissions or credit card company charges for payment of such
claims) to Seller, and (B) if the applicable account debtor who makes such
payment then owes payment on accounts receivable owing to Buyer and to Seller,
such payments (net of travel agent commissions or credit card company charges
for payment of such claims) shall be applied to pay accounts receivable in order
of priority from the least-aged to the most-aged.  The foregoing shall apply to
past due or accruing room rents and other customary Hotel charges including the
guest and city ledgers.

Bank Accounts, Inventory and Seller’s Deposits.  Buyer and Seller shall mutually
agree upon the aggregate amount of cash in the house bank accounts, house banks
and cash on hand as of the Closing Date (the “Aggregate Cash Amount”).  At the
Closing, Seller shall be credited with the Aggregate Cash Amount, including
without limitation any management account (excluding the FF&E reserve account
which will be treated in accordance with the provision of Section 5.3.1(c)
hereof), to the Cut-Off Time.  All transferable deposits of Seller made for
utilities, maintenance or service contracts, licenses, or otherwise, shall be
credited to Seller at Closing.  In this regard, the parties shall arrange to
have all such accounts and deposits transferred to Buyer at Closing.

Health Club and Other Dues.  Prepaid health club and other revenues shall be
prorated between Buyer and Seller as of the Cut-Off Time, with Buyer receiving a
credit for the unearned health club and other revenue as of the Cut-Off Time.

Prepaids.  Seller shall receive a credit for prepaid expenses as of the Cut-Off
Time, including prepaid expenses under contracts, advertising expenses, trade
association dues and trade subscriptions, and fees for permits.  Prepaid
advertising expenses shall only include advertising which has not been
published, mailed or aired as of the Cut-Off Time.

Payables.    Seller shall use reasonable commercial efforts to pay off all trade
accounts payable as of the Cut-Off Time.  To the extent unpaid, Buyer shall
receive a credit for all accounts payable and accrued liabilities owing for
goods and services furnished prior to the Cut-Off Time.  Buyer shall pay all
accounts payable relating to goods and services for which orders have been
placed but, as of the Cut-off Time, such goods and services have not yet been
delivered or provided.  All fees, reimbursements and other amounts payable to
the Manager under the Hotel Management Agreement shall be apportioned between
Seller and Buyer as of the Cut-off Time.

Surviving Obligations.  The provisions of this Section 5.3 shall survive the
Closing and shall not be subject to the limitations set forth in Section 10.2.1
hereof.

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Condemnation or Destruction of Property.

                    Condemnation.  Seller agrees to give Buyer prompt notice of
any notice it receives of any taking by condemnation (actual, pending or
threatened) of any part of or rights appurtenant to the Austin Property or the
Waverly Property. Buyer shall have the right to terminate this Agreement in the
event of an actual, pending or threatened condemnation or temporary condemnation
of longer than six (6) months that has or reasonably would be expected to have a
material adverse impact on the operations of the Austin Property or the Waverly
Property, in which event Escrow Deposit shall be returned to Buyer.  If Buyer
does not so elect to terminate this Agreement, then the Closing shall take place
as provided herein, and Seller shall assign to Seller at the Closing all of
Seller’s interest in any condemnation award which may be payable to Buyer on
account of any such condemnation and, at Closing, Seller shall credit to the
amount of the Purchase Price payable by Buyer the amount, if any, of
condemnation proceeds received by Seller between the Date of this Agreement and
Closing less any amounts which are reasonably allocated to lost earnings
reasonably allocated or attributed to the period of time prior to Closing or
which are used to repair or restore the applicable property prior to Closing. 
Provided Buyer has not exercised its right to terminate this Agreement, Seller
shall notify Buyer in advance regarding any proceeding or negotiation with
respect to the condemnation and Buyer shall have the right, at its own cost and
expense, to appear and participate in any such proceeding or negotiation.

                    Fire or Other Casualty.  Seller shall give Buyer prompt
notice of any fire or other casualty to either Property costing more than
$100,000.00 to repair and occurring between the Date of this Agreement and the
Closing.  If, prior to Closing, either Property is damaged by fire or other
casualty which is insured (without regard to deductibles) to an extent as would
not cost (as to the damaged property) more than $5,750,000.00 and would not take
longer than six (6) months to repair, and if the holders of the existing loans
to Seller permit insurance proceeds to be used to repair and restore such
Property, then the Closing shall take place without abatement of the purchase
price, but Seller shall assign to Buyer at Closing all of Seller’s interest in
any insurance proceeds (except only, rent loss and business interruption
insurance, and any similar insurance attributable to the period preceding the
Closing Date) that may be payable to Seller on account of any such fire or other
casualty, plus Seller shall credit the amount of any deductibles under any
policies related to such proceeds to the purchase price, to the extent such
deductibles or insurance proceeds have not been previously expended or are
otherwise required to reimburse Owner for actual expenditures of restoration. 
If any such damage due to fire or other casualty is insured and is to such an
extent as would cost more than $5,750,000.00 or would take longer than six (6)
months to repair, or if such holders will not permit insurance proceeds to be
used to repair and restore such Property then, at Buyer’s option, Buyer may
terminate this Agreement and the Escrow Deposit shall be returned to Buyer. 
Should Buyer nevertheless elect to proceed to Closing, the Closing shall take
place without abatement of the Purchase Price and at Closing Seller shall assign
to Buyer all of Seller’s interest in any insurance proceeds (except only, rent
loss and business interruption insurance, and any similar insurance, in each
case, attributable to the period preceding the Closing Date) that may be payable
to Seller on account of any such fire or other casualty, and Seller shall grant
to Buyer a credit against the Purchase Price equal to the amount of the
applicable deductible, to the extent such deductibles or insurance proceeds have
not been previously expended or are otherwise required to reimburse Owner for
actual expenditures of restoration.  If, prior to Closing, either Property is
damaged by fire or other casualty which is uninsured and would cost more than
$5,750,000.00 to repair or would take longer than six (6) months to repair,
then, at Buyer’s option, Buyer may terminate this Agreement and the Escrow
Deposit shall be returned to Buyer.  If Buyer does not elect to terminate this
Agreement with respect to an uninsured casualty as aforesaid, or if any
uninsured casualty would not cost more than $5,750,000.00 to repair and would
not take longer than six (6) months to repair, then the Closing shall take place
as provided herein, and the Purchase Price shall be reduced by the estimated
amount to repair casualty not to exceed such $5,750,000.00.  If Buyer does not
or is not entitled to terminate this Agreement with respect to a casualty or
condemnation, Seller shall diligently commence and pursue restoration of the
Property so as to minimize the loss of business and good will of the Property.

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Representations, Warranties and Covenants.

Representations, Warranties and Covenants of Seller.

General Disclaimer.  Except as specifically set forth in Section 7.1.2 below or
elsewhere in this Agreement or in the applicable Deed or other closing
documents, the sale of the Properties hereunder is and will be made on an “as
is” basis, without representations and warranties of any kind or nature,
express, implied or otherwise, including any representation or warranty
concerning title to the Properties, the physical condition of the Properties
(including the condition of the soil or the Austin Improvements or the Waverly
Improvements), the environmental condition of the Properties (including the
presence or absence of hazardous substances on or respecting the Properties),
the compliance of the Properties with applicable laws and regulations (including
zoning and building codes or the status of development or use rights respecting
the Properties), the financial condition of the Properties or any other
representation or warranty respecting any income, expenses, charges, liens or
encumbrances, rights or claims on, affecting or pertaining to the Properties or
any part thereof.  Buyer acknowledges that, during the Due Diligence Period,
Buyer will examine, review and inspect all matters which in Buyer’s judgment
bear upon the Properties and their respective values and suitability for Buyer’s
purposes.  Except as to matters specifically set forth in Section 7.1.2 below or
elsewhere in this Agreement or in the Deed or other closing documents, Buyer
will acquire the Properties solely on the basis of its own physical and
financial examinations, reviews and inspections and the title insurance
protection afforded by the Owner’s Policy.

Limited Representations and Warranties of Seller. Seller hereby represents and
warrants to Buyer as set forth in this Section 7.1.2, each only as to the
Property owned by it.  For the purposes of this Agreement and the documents to
be delivered pursuant hereto, references to “To Seller’s knowledge” or “Seller’s
actual knowledge” or “Seller has no knowledge” shall mean the actual, present,
conscious knowledge of Semi Salmi and Tom Bennett, such individuals being the
executives, other than persons working on behalf of the Manager, working on
behalf of Seller who have the most knowledge regarding the Austin Property and
the Waverly Property (collectively, the “Seller Knowledge Individuals”) on the
date of this Agreement without any investigation or inquiry, but such
individuals shall not have any individual liability in connection herewith. 
Without limiting the foregoing, Buyer acknowledges that the Seller Knowledge
Individuals have not performed and are not obligated to perform any
investigation or review of any files or other information in the possession of
Seller, or to make any inquiry of any persons, or to take any other actions in
connection with the representations and warranties of Seller set forth in this
Agreement.  Neither the actual, present, conscious knowledge of any other
individual or entity, nor the constructive knowledge of the Seller Knowledge
Individuals or of any other individual or entity, shall be imputed to the Seller
Knowledge Individuals:

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                                        (ii)          Leases.  There are no
leases of or licenses or concessions for space in any Property which will be in
force after the Closing and under which Seller is the landlord (whether by it or
its agent entering into the leases or acquiring the Properties subject to the
leases) other than the Leases.  As used herein, “Austin Leases” means,
collectively, (a) the leases, licenses and concessions agreements listed on
Exhibit “O-1” and (b) the leases, licenses and concessions agreements entered
with respect to the Austin Property into in accordance with this Agreement.  As
used herein, “Waverly Leases” means, collectively, (a) the leases, licenses and
concessions agreements listed on Exhibit “O-2”  and (b) the leases, licenses and
concessions agreements entered with respect to the Waverly Property into in
accordance with this Agreement.  “Leases” means the Austin Leases and the
Waverly Leases. All of the Leases are in full force and effect and none of them
has been amended except as set forth in Exhibits “O-1” and “O-2”.  Except as set
forth on Exhibit “P”, there are no security deposits under the Leases.  There
are no construction allowances, brokerage commissions, or fees or similar
inducements due now or payable in the future in connection with the Leases.  To
Seller’s knowledge, Seller has performed all material work required to be
performed by Seller under the Leases.  To Seller’s knowledge Seller has
delivered to Buyer true, correct and complete copies of the Leases.  To Seller’s
knowledge, Seller is not in default in any material respect under the Leases and
there is no existing condition that, with notice or passage of time or both,
would constitute a material default by Seller under any of the Leases.  To
Seller’s knowledge, no other party to a Lease is in default in any material
respect under such lease and there is not existing condition that, with notice
or passage of time or both, would constitute a material default by such party
under any Lease.

                                        (jj)          Litigation.  Except as set
forth in Exhibit “Q”, there is no pending (nor has Seller or to Seller’s
knowledge, its Manager, received any written notice of any threatened) action,
litigation, condemnation or other proceeding against any Property or against
Seller or to Seller’s knowledge Manager with respect to any Property, other than
personal injury matters covered by Seller’s insurance and routine workers
compensation claims.

                                       (kk)         Service Agreements.  Austin
Seller has not entered into and, to Seller’s knowledge, there are not, any
service, supply, maintenance, capital improvement, equipment leasing,
employment, collective bargaining, union or similar contracts relating to the
Austin Property which will be in force after the Closing, except for the Austin
Service Agreements, Austin Renovation Commitments and “Excluded Contracts” (as
hereinafter defined).  Waverly Seller has not entered into and, to Seller’s
knowledge, there are not, any service, supply, maintenance, capital improvement,
equipment leasing, employment, collective bargaining, union or similar contracts
relating to the Waverly Property which will be in force after the Closing,
except for the Waverly Service Agreements, Waverly Renovation Commitments and
Excluded Contracts.  As used herein, the “Austin Service Agreements” means,
collectively, (a) the contracts described in Exhibit “R-1”, (b) contracts (other
than Excluded Contracts and Austin Renovation Commitments) with which are
cancelable on thirty (30) days’ or less notice, without penalty, and (c)
contracts with respect to the Austin Property entered into in accordance with
this Agreement.  As used herein, the “Waverly Service Agreements” means,
collectively, (a) the contracts described in Exhibit “R-2”, (b) contracts (other
than Excluded Contracts and Waverly Renovation Commitments) which are cancelable
on thirty (30) days’ or less notice, without penalty, and (c) contracts with
respect to the Austin Property entered into in accordance with this Agreement. 
As used herein, “Austin Renovation

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Commitments” means the contracts and commitments described in Exhibit “R-3”,
and, to the extent Buyer consents to the same, any additional contracts entered
into by Austin Seller prior to the Closing Date with respect to the renovation
of the Austin Property. As used herein, “Waverly Renovation Commitments” means
the contracts and commitments described in Exhibit “R-4”, and, to the extent
Buyer consents to the same, any additional contracts entered into by Waverly
Seller prior to the Closing Date with respect to the renovation of the Waverly
Property. As used herein, “Excluded Contracts” means Seller’s contracts for
(i) insurance and (ii) the engagement of attorneys, accountants and
consultants.  The Excluded Contracts are not being assigned to or assumed by
Buyer hereunder. Buyer shall assume (and execute such documentation as Seller
may reasonably request to reflect its assumption of) the brokerage commission
obligations identified in Section 7.4.3.  As used herein, “Service Agreements”
means the Austin Service Agreements and the Waverly Service Agreements.  As used
herein, “Renovation Commitments” means the Austin Renovation Commitments and the
Waverly Renovation Commitments.  To Seller’s knowledge, Seller has provided
Buyer with access to true, correct and complete copies of the Service Agreements
and Renovation Commitments.  To Seller’s knowledge, all of the Service
Agreements and Renovation Commitments are in full force and effect, Seller is
not in default in any material respect under the Service Agreements and
Renovation Commitments and there is no existing condition that, with notice or
the passage of time would constitute a material default by Seller under any
Service Agreement or Renovation Commitment.  To Seller’s knowledge, no other
party to a Service Agreement or Renovation Commitment is in default in any
material respect under any of the Service Agreements or Renovation Commitments. 

                                        (ll)          Due Authority.  This
Agreement and all agreements, instruments and documents herein provided to be
executed or to be caused to be executed by Seller are and on the Closing Date
will be duly authorized, executed and delivered by and are binding upon Seller. 
Seller is a limited liability company, duly organized and validly existing and
in good standing under the laws of the State of Delaware, and is duly authorized
and qualified to do all things required of it under this Agreement.  Seller has
the capacity and authority to enter into this Agreement and consummate the
transactions herein provided without the consent or joinder of any other party
(except as otherwise may be set forth in this Agreement).  Waverly Seller is, or
is deemed to be, a Georgia resident pursuant to Official Code of George
Annotated Sections 48-7-128.  The foregoing statement shall not be subject to
the “knowledge qualification” set forth above.

                                     (mm)          Environmental Matters.  The
reports described in Exhibit “S” (the “Environmental Reports”) represent all of
the environmental reports with respect to the Properties in the possession or
control of Seller.  Except for any and all matters that are disclosed in the
Environmental Reports, Seller has not received written notice of and to Seller’s
knowledge there are no violations of environmental laws, ordinances or
regulations with respect to any Property.  To Seller’s knowledge, there is no
presence of any hazardous materials, hazardous substances, toxic substances or
wastes (as defined in or regulated by any federal, state or local laws,
ordinances or regulations) on, under, in, at or emanating from any Property
except in compliance with such laws, ordinances and regulations.

                                       (nn)          Condemnations and
Assessments.  There is no condemnation either instituted or, to Seller’s
knowledge, threatened, which would affect the Properties, and neither Seller
nor, to Seller’s knowledge, Manager has received written notice of any special
assessment affecting any of the Properties.

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                                        (oo)          Insurance.  Neither Seller
nor, to Seller’s knowledge, Manager has received written notice from any
insurance company of any defects or inadequacies in any Property that would
affect adversely its insurability or increase the cost of insurance. 

                                        (pp)          Anti-Terrorism Laws. 
Neither Seller nor to Seller’s knowledge, any of its respective constituent
owners or affiliates are in violation of any laws relating to terrorism or money
laundering (collectively, the “Anti-Terrorism Laws”), including without
limitation Executive Order No. 13224 on Terrorist Financing, effective September
24, 2001 and relating to Blocking Property and Prohibiting Transactions With
Persons Who Commit, Threaten to Commit, or Support Terrorism (the “Executive
Order”) and/or the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law
107-56) (the “USA Patriot Act”).

                                        (qq)          Solvency.  Seller is not
the subject debtor under any federal, state or local bankruptcy or insolvency
proceeding, or any other proceeding for dissolution, liquidation or winding up
of its assets.  Seller is not insolvent, and the consummation of the
transactions contemplated by this Agreement shall not render Seller insolvent.

                                        (rr)          Legal Requirements. 
Seller and, to Seller’s knowledge, Manager, have not received written notice
from any governmental authority alleging a violation of any legal requirement or
absence, suspension, revocation or non-renewal of any license or permit that has
not been corrected, cured or otherwise resolved or seeking to audit or
investigate compliance of the Hotel with any applicable legal requirement, which
audit or investigation has not been completed or otherwise resolved and, to
Seller’s knowledge, all material permits and licenses necessary for the normal
operation of the Properties are in full force and effect.

                                        (ss)          Financial Information.  To
Seller’s knowledge, Seller’s financial information provided to Buyer set forth
on Exhibit “T” hereto (“Financial Information”) is correct and complete in all
material respects and presents accurately the results of the operations of the
Properties for the periods indicated.

                                        (tt)           No Options.  Seller has
not granted any option, right of first offer or refusal or similar right in
favor of any person to purchase or otherwise acquire the Hotel, any portion
thereof or any interest therein.

                                        (uu)         Audits.  Seller and, to
Seller’s knowledge, Manager, has not received any written notice of any audit of
any taxes payable or tax delinquency with respect to any Property which has not
been resolved or completed.

                                        (vv)         Unrecorded Commitments. 
Seller has not entered into any unrecorded commitment or agreement with any
governmental authority affecting any Property which could reasonably be expected
to have a material adverse effect on the ownership, value or operation of any
Property.  Neither Seller, nor to Seller’s knowledge, Manager, has entered into
any unrecorded commitment or agreement with any governmental authority,
association or other organization or group affecting all or any portion of the
Properties which would impose any obligation to make any contribution or
dedication of money or land or to construct, install or maintain any
improvements of a public or private nature on or off any Property.

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                                        (ww)         Personal Property.  Seller
has good and marketable title to or a valid leasehold interest in its interest
in all its Personal Property and, subject to any equipment leases listed in the
schedule of Service Agreements, all such Personal Property shall be free and
clear of all encumbrances at Closing. Seller has not transferred any Personal
Property (including the Personal Property it acquired when Seller first acquired
the Properties), except in the ordinary course of Seller’s business. 

                                        (xx)          Employees.  Seller has no
employees working at any Property, and all employees working at any Property on
behalf of Seller are employees of Manager.  Seller has not itself established
any retirement, health insurance, vacation, pension, profit sharing or other
benefit plans relating to the operation or maintenance of any Property.  To
Seller’s knowledge as of the date of this Agreement, Seller has not received any
written notice nor has Manager informed Seller of any actual or threatened union
strikes, work stoppages or slow downs or any other labor disputes concerning
individuals employed at any Property.  To Seller’s knowledge, no benefit plans
maintained by Manager for Manager’s employees working at any Property are in
violation of applicable laws or the terms of such plans.

                    7.2          Representations and Warranties of Buyer.  Buyer
hereby represents and warrants to Seller that:

                                   7.2.1          This Agreement and all
agreements, instruments and documents herein provided to be executed or to be
caused to be executed by Buyer are and on the Closing Date will be duly
authorized, executed and delivered by and are binding upon Buyer; Buyer is a
limited partnership, duly organized and validly existing and in good standing
under the laws of the State of Delaware, and is duly authorized and qualified to
do all things required of it under this Agreement; and Buyer has the capacity
and authority to enter into this Agreement and consummate the transactions
herein provided without the consent or joinder of any other party (except as
otherwise may be set forth in this Agreement).

                                   7.2.2          Buyer and, to Buyer’s
knowledge, its beneficial, controlling constituent owners and affiliates, are in
compliance with the requirements of Executive Order No. 13224, 66 Fed. Reg.
49079 (Sept. 25, 2001)  (the “Order”) and other similar requirements contained
in the rules and regulations of the Office of Foreign Asset Control, Department
of the Treasury (“OFAC”) and in any enabling legislation or other Executive
Orders in respect thereof (the Order and such other rules, regulations,
legislation, or orders are collectively called the “Orders”). 

                                   7.2.3          Neither Buyer nor, to Buyer’s
knowledge, its beneficial, controlling constituent owners and affiliates:

                                                     (a)          is listed on
the Specially Designated Nationals and Blocked Persons List maintained by OFAC
pursuant to the Order and/or on any other list of terrorists or terrorist
organizations maintained pursuant to any of the rules and regulations of OFAC or
pursuant to any other applicable Orders (such lists are collectively referred to
as the “Lists”);

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                                                     (b)          has been
arrested for money laundering or for predicate crimes to money laundering,
convicted or pled nolo contendere to charges involving money laundering or
predicate crimes to money laundering;

                                                     (c)          has been
determined by competent authority to be subject to the prohibitions contained in
the Orders;

                                                     (d)          is owned or
controlled by, nor acts for or on behalf of, any Person on the Lists or any
other Person who has been determined by competent authority to be subject to the
prohibitions contained in the Orders;

                                                     (e)          shall transfer
any interest in Buyer or such parties to any Person who is, or whose beneficial
owners are, listed on the Lists; or

                                                     (f)          shall assign
this Agreement or any interest herein, to any Person who is listed on the Lists
or who is engaged in illegal money laundering.

If Buyer or any constituent owner or affiliate of Buyer becomes listed on the
Lists or is indicted, arraigned, or custodially detained on charges involving
money laundering or predicate crimes to money laundering, Buyer shall
immediately notify Seller upon Buyer’s obtaining knowledge thereof.  Buyer shall
have ten (10) business days to remove such party from any interest in Buyer or
Seller may terminate this Agreement upon written notice to Buyer, whereupon the
Escrow Deposit shall be returned to Buyer and neither party shall have any
further obligation hereunder except for those obligations which expressly
survive a termination of this Agreement.

                                   7.2.4          Buyer understands that, among
the requirements of the states in which the Austin Property and the Waverly
Property are located, that govern the issuance of the liquor licenses with which
it will be required to comply, are the following:  Buyer will be required to
submit personal background information, including social security numbers and
driving records, on Buyer’s managers and Buyer will further be required to
submit such information on the owners and managers of any company which directly
or indirectly controls Buyer.  Buyer shall comply with these requirements. 
Buyer has no reason to believe that it will not be able to obtain the issuance
of the required liquor licenses in accordance with the timing contemplated by
this Agreement.

                                   7.2.5          No Bankruptcy/Dissolution
Event.  No Bankruptcy/Dissolution Event has occurred with respect to Buyer or
any of its partners or members, as applicable.

                                   7.2.6          Satisfaction of Management
Agreement Requirements.  Buyer complies with all of the requirements set forth
in Section 10.2A of the Management Agreement.  Without limitation on the
generality of the foregoing, (a) Buyer has sufficient financial resources and
liquidity to fulfill the obligations of the “Owner” under the Management
Agreements (including a net worth of at least 10% of the “Invested Capital”, as
such dollar amount is adjusted from the “Effective Date” until the date of the
“Notice of Proposed Sale” by the greater of the “GDP Deflator” or 3.2% (as such
terms are defined in the Management Agreements)); (b) neither Buyer nor any of
its “Affiliates” (as defined in the Management Agreements) is known in the
community as being of bad moral character, or has been convicted of a felony in
any state or federal court, and is in control of or controlled by persons who
have been convicted of felonies in any state or federal court;  (c) neither
Buyer nor any of its Affiliates, directly or indirectly, is the owner, manager
or franchisor of a nationally recognized brand with at least five thousand
(5000) guest rooms that is competitive with the “Renaissance Hotel System” (such
as Hyatt, Sheraton or Hilton), and (d) neither Buyer nor any of its Affiliates
is a “Specially Designated National” or “Blocked Person” (as such terms are
defined in the Management Agreements).

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                                   7.2.7          Condition of Property.  The
Purchase Price reflects Buyer’s underwriting of the costs of any capital
improvements or repairs that may be required with respect to the Austin Property
and the Waverly Property, Buyer hereby acknowledging that Buyer shall assume
responsibility for payment with respect to capital improvements or repairs that
have either been included in the budget for 2006 for the Austin Property or for
the Waverly Property, or for which Seller has otherwise committed to fund. 
However, the foregoing does not waive the prorations set  forth in Section
5.3.1(c).

                                   7.2.8          ERISA.  Neither (i) any assets
of Buyer, nor (ii) any funds to be used by Buyer with respect to the
transactions contemplated pursuant to this Agreement, are, or at Closing will
be, pursuant to “ERISA” (as hereinafter defined) or the “Code” (as hereinafter
defined) considered for any purpose of ERISA or Section 4975 of the Code to be
assets of a “Plan” (as hereinafter defined).  Buyer is not executing this
Agreement and will not be performing its obligations or exercising its rights or
remedies under the Agreement on behalf of or for the benefit of any Plan. 
Neither the execution or delivery of this Agreement by Seller, nor the
performance by Seller of its obligations or the exercise of its rights or
remedies under this Agreement, nor any transaction contemplated under this
Agreement, is or will be a “prohibited transaction” within the meaning of
Section 406 of ERISA or Section 4975 of the Code.  For the purposes hereof the
following terms shall have the following meanings:  “Code” shall mean the
Internal Revenue Code of 1986, as amended; “ERISA” shall mean the Employee
Retirement Income Security Act of 1974, as amended (and any successor statute
and any applicable regulations or guidance promulgated thereunder); and “Plan”
shall mean a “plan” as that term is defined in Section 3(3) of ERISA or Section
4975 of the Code.

                                   7.2.9          No Reliance on Seller’s
Warranties.  BUYER ACKNOWLEDGES AND AGREES THAT ITS OBLIGATIONS UNDER THIS
AGREEMENT SHALL NOT BE SUBJECT TO ANY FINANCING CONTINGENCY. EXCEPT AS EXPRESSLY
SET FORTH IN THIS AGREEMENT AND ANY DOCUMENTS EXECUTED BY THE AUSTIN SELLER AND
THE WAVERLY SELLER AT CLOSING, THE SALE AND TRANSFER OF THE AUSTIN PROPERTY AND
THE WAVERLY PROPERTY HEREUNDER IS AND WILL BE MADE ON AN “AS IS” BASIS, WITHOUT
REPRESENTATIONS AND WARRANTIES OF ANY KIND OR NATURE, EXPRESS, IMPLIED OR
OTHERWISE, INCLUDING ANY REPRESENTATION OR WARRANTY CONCERNING TITLE TO THE
AUSTIN PROPERTY OR THE WAVERLY PROPERTY, THE PHYSICAL CONDITION OF THE AUSTIN
PROPERTY OR THE WAVERLY PROPERTY (INCLUDING THE CONDITION OF THE SOIL OR THE
IMPROVEMENTS), THE ENVIRONMENTAL CONDITION OF THE AUSTIN PROPERTY OR THE WAVERLY
PROPERTY (INCLUDING THE PRESENCE OR ABSENCE OF HAZARDOUS SUBSTANCES ON OR
RESPECTING THE AUSTIN PROPERTY OR THE WAVERLY PROPERTY), THE COMPLIANCE OF THE
AUSTIN PROPERTY OR THE WAVERLY PROPERTY WITH APPLICABLE LAWS, ENCUMBRANCES AND
REGULATIONS (INCLUDING ZONING, SIGNAGE, PARKING

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AND BUILDING CODES OR THE STATUS OF DEVELOPMENT, SIGNAGE AND USE RIGHTS
RESPECTING THE AUSTIN PROPERTY OR THE WAVERLY PROPERTY), THE FINANCIAL CONDITION
OF THE AUSTIN PROPERTY OR THE WAVERLY PROPERTY, OR ANY OTHER REPRESENTATION OR
WARRANTY RESPECTING ANY INCOME, EXPENSES, CHARGES, LIENS OR ENCUMBRANCES, RIGHTS
OR CLAIMS ON, AFFECTING OR PERTAINING TO THE AUSTIN PROPERTY OR THE WAVERLY
PROPERTY OR ANY PART THEREOF.  BUYER ACKNOWLEDGES THAT DURING THE DUE DILIGENCE
PERIOD, BUYER SHALL EXAMINE, REVIEW AND INSPECT ALL MATTERS WHICH IN BUYER’S
JUDGMENT BEAR UPON THE AUSTIN PROPERTY AND THE WAVERLY PROPERTY AND THEIR VALUE
AND SUITABILITY FOR BUYER’S PURPOSES.  EXCEPT AS TO MATTERS EXPRESSLY SET FORTH
IN THIS AGREEMENT ANY DOCUMENTS EXECUTED BY THE AUSTIN SELLER AND THE WAVERLY
SELLER AT CLOSING, BUYER WILL ACQUIRE THE AUSTIN PROPERTY AND THE WAVERLY
PROPERTY SOLELY ON THE BASIS OF ITS OWN PHYSICAL AND FINANCIAL EXAMINATIONS,
REVIEWS AND INSPECTIONS AND THE TITLE INSURANCE PROTECTION AFFORDED BY THE
OWNER’S POLICIES.

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Seller’s Initials

 

Buyer’s Initials

 

                                   7.2.10          “Buyer’s knowledge” (or any
similar phrase used in this Agreement) shall mean the present actual knowledge,
without taking into account any constructive or imputed knowledge of Michael D.
Schecter, John Williams and Mark Brugger, but such individuals shall not have
any individual liability in connection herewith.  Buyer represents that such
persons are familiar with the business and affairs of Buyer and the transactions
contemplated under this Agreement and are the executive officers responsible for
Buyer and its operations in the best position to have knowledge concerning the
scope of the representations made by Buyer in this Agreement and to have
knowledge of the results of Buyer’s diligence investigations of the Austin
Property and the Waverly Property.

Survival.  The foregoing representations and warranties (including any cause of
action by reason of a breach thereof), except those pertaining to a party’s
authority or to Seller’s title, which shall survive indefinitely, shall survive
until the date that is nine (9) months after the Closing Date (the period
beginning on the date hereof and ending on such date being herein called the
“Survival Period”), at which time such representations and warranties (and any
cause of action for a breach thereof not then in litigation) shall terminate. 
Notwithstanding the foregoing, Seller shall have no liability and Buyer shall
make no claim against Seller, for (and Buyer shall be deemed to have waived any
failure of a condition hereunder by reason of) a breach of any representation or
warranty of Seller under this Agreement or any document executed by Seller in
connection with this Agreement (including for this purpose any matter that would
have constituted a breach of Seller’s representations and warranties had they
been made on the Closing Date) (a) if the breach in question was known to Buyer
prior to the end of the Due Diligence Period, or (b) the breach in question was
known to Buyer prior to Closing and Buyer proceeds with the Closing.

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Interim Covenants of Seller.  Until the Closing Date or the sooner termination
of this Agreement:

Maintenance/Operation.  Seller shall cause the Properties to be maintained,
repaired and operated in the same manner as prior hereto pursuant to its normal
course of business (including making capital expenditures and expenditures of
FF&E reserves in such normal course of business).  Such continuing operation
shall include delivering Properties to Buyer at Closing with such levels of
inventories and supplies as Seller has found sufficient in its operation of its
business at the Properties.

Service Contracts.  Seller shall not enter into any additional Service
Agreements or other similar agreements without the prior consent of Buyer, which
shall not be unreasonably withheld, except for (1) those deemed reasonably
necessary by Seller which are cancelable on thirty (30) days’ notice without
penalty and (2) those entered into by Manager which do not require Seller’s
consent.

Leases.  Except to the extent required under the Management Agreement without
Seller’s consent, Seller shall not enter into any new Leases or material
modifications of Leases or terminate any Leases without Buyer’s express written
consent which shall not be unreasonably withheld or delayed and shall be deemed
given if Buyer, within seven (7) business days after Seller requests Buyer’s
approval to a proposed new lease or material modification or termination of a
Lease and provides Buyer with such information as is reasonable and appropriate
for Buyer to determine whether to grant or withhold approval, fails to give
Seller written notice of its disapproval thereof and the reasons therefor. 
Notwithstanding anything herein to the contrary, if the Closing occurs, Buyer
shall bear all costs and expenses related to any new Leases or modifications,
extensions, expansions, options or renewals of existing Leases entered into
after the date hereof pursuant to this subsection (including tenant improvement
costs and leasing commissions, but excluding free rent allocable to any period
prior to the Closing Date) and, without limitation on the foregoing, the
prorations at Closing shall include an appropriate credit to Seller consistent
with the foregoing. 

Seller’s Environmental Inquiry.  Buyer acknowledges and agrees that the sole
inquiry and investigation Seller has conducted in connection with the
environmental condition of the Properties is to obtain the Environmental
Reports, and that, for purposes of this Agreement, Seller has acted reasonably
in solely relying upon said inquiry and investigation.

Hotel Management Agreement Indemnity.  Buyer shall indemnify, defend and hold
harmless Seller from and against any claim by Manager (and all obligations,
claims, liabilities, damages, losses, cost or expenses, including reasonable
attorneys’ fees and court costs, resulting therefrom) by reason of a default by
the owner under the Hotel Management Agreement occurring and attributable to the
period on or after the Closing Date.  Seller shall indemnify, defend and hold
harmless Buyer from and against any claim by Manager (and all obligations,
claims, liabilities, damages, losses, cost or expenses, including reasonable
attorneys’ fees and court costs, resulting therefrom) by reason of a default by
the owner under the Hotel Management Agreement occurring or attributable to the
period prior to the Closing Date.  The indemnity obligations set forth in this
Section 7.6 shall survive the Closing.

                    Reservations and Bookings.  Seller shall cause Manager to
continue to take guest room reservations and to book functions and meetings and
otherwise to market and promote the business of the Hotel in generally the same
manner as it did prior to the execution of this Agreement; and all advance room
bookings and reservations and all meetings and function bookings shall be booked
at rates, prices and charges charged by Seller and Manager for such purposes in
the ordinary course of business consistent with Seller’s past practices.

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                    Notice of Proceedings.  Seller shall promptly advise Buyer
of any litigation, arbitration or administrative hearing, or any written threat
to commence any of the foregoing, concerning or relating to any Property or the
operation thereof, of which Seller obtains knowledge.

                    Removal of Property.  Seller shall refrain and cause Manager
to refrain from removing any portion of the Properties without the prior written
consent of Buyer, except in the normal course of business as to personal
property that is no longer needed or useful or is replaced, prior to Closing,
with similar items of at least equal suitability, quality and value, free and
clear of any liens or security interests.

                    Existing Loans.  Seller shall make all payments of
principal, interest and other sums under the existing mortgage loans, mezzanine
loans and Management Agreements, and perform all of its respective obligations
thereunder which accrue to the period prior to the Closing.  Seller shall make
not enter into any new loan documents or modify any existing loan documents or
any other of the aforementioned agreements which would be binding on Buyer or
any Property which would materially increase Buyer or its affiliates’
liabilities or obligations or materially decrease Buyer’s or its affiliates’
rights thereunder.

                    Insurance.  Seller shall not affirmatively cancel any
existing insurance carried on the Properties, shall use commercially reasonable
efforts to maintain or, to the extent Manager maintains the insurance, cause
Manager to maintain, all existing insurance carried on the Properties by Seller
or Manager, and shall use commercially reasonable efforts to renew any such
insurance which comes up for renewal prior to the Closing.

                    Material Alteration; Additional Renovation.  Without Buyer’s
consent, which shall not be unreasonably withheld, delayed or conditioned, (i)
Seller shall not make or obligate itself to make, and Seller shall request
Manager not to make, or obligate itself to make any material alterations or
modifications to any Property except in the case of emergencies and except those
contemplated in the capital expenditure and FF&E budgets provided to Buyer
during the Due Diligence Period, and (ii) Seller shall not enter into, and
Seller shall cause Manager not to enter into, any agreement for renovation of
the Properties which is not set forth on Exhibits “R-3” and “R-4”.  From the
date hereof through the Closing Date, Seller shall continue to use commercially
reasonable efforts to cause the performance of the work under the Renovation
Commitments (with Buyer assuming Seller’s rights and obligations under the
Renovation Commitments from and after the Closing Date).

                    Transfer of Permits.  Seller shall cooperate with Buyer
(with no out-of-pocket cost to Seller) in all reasonable respects in connection
with the transfer (if any) of any permits, licenses, certificates and approvals
issued with respect to any Property to Buyer or the issuance of any new permits,
licenses, certificates or approvals (if any) to Buyer, each to be effective no
earlier than Closing, and Seller shall and shall cause Manager to use
commercially reasonable efforts to (i) preserve and keep in force existing
permits, licenses, certificates and approvals issued with respect to any
Property, and (ii) cause all those expiring during the period between the date
of this Agreement and the Closing to be renewed prior to the Closing Date.

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                    No Further Marketing.  Following the expiration of the Due
Diligence Period without a cancellation of this Agreement by Buyer, Seller shall
not market, sell, convey or offer to sell any portion of the Properties (nor
permit Manager to do any of the same), except for items of Personal Property
sold or consumed in the ordinary course of business.

                    Management Agreement Consents.  Seller shall not grant any
material consent requested by Manager pursuant to the Management Agreement
without first consulting with Buyer and obtaining Buyer’s consent, which shall
not be unreasonably withheld, delayed or conditioned.

                    Baggage Inventory.  The representatives of Seller and Buyer
shall prepare the inventory as of the day immediately preceding the Closing Date
(which inventory shall be binding on all parties thereto) of (a) all luggage,
valises and trunks checked or left in the care of the Hotel by guests then or
formerly in the Hotel, (b) parcels, laundry, valet packages and other property
of guests checked or left in the care of the Hotel by guests then or formerly in
the Hotel (excluding, however, property in the Hotel safe deposit boxes), (c)
all luggage or other property of guests retained by Buyer, and (d) all items
contained in the Hotel lost and found.  Buyer shall be responsible from and
after the Closing Date for all baggage, and other items listed in such
inventory.  Seller hereby agrees to indemnify and hold Buyer harmless from and
against any and all liability for claims arising prior to the Closing Date
relating to such items not listed on the inventory.  The provisions of this
Section 7.16 shall survive the Closing.

                    1.3          Safe Deposit Boxes.  Prior to the Closing Date,
Seller shall endeavor to send written notice to guests or tenants or other
persons who to Seller’s or its Manager’s knowledge have possessions locked in
safe-deposit boxes at the Hotel advising them of the sale of the Hotel
(excluding in-room safes) to Buyer and requesting removal of the contents
thereof or the removal thereof and concurrent re-deposit of such contents
pursuant to new safe deposit agreements with Buyer.  Seller and Buyer shall have
representatives present when the boxes are opened and the contents thereof shall
be inventoried.  If the guest does not timely respond to Seller’s notice, the
safe deposit box may, if Seller, in its sole discretion, so agrees, be broken
open in the presence of Seller and Buyer and the contents inventoried and
re-deposited in a new “safe deposit” box.  Buyer shall be solely responsible for
all items in the Hotel’s safe deposit boxes which had been so inventoried,
removed and re-deposited and Buyer hereby agrees to indemnify, defend and hold
Seller harmless from and against any and all liability therefor.  Seller hereby
agrees to indemnify and hold Buyer harmless from and against any and all
liability for claims arising prior to the Closing Date relating to such items
not listed on the inventory.  The provisions of this Section 7.17 shall survive
the Closing.

                    1.4          No Tax Due Certificate.  With respect to any
and all sales taxes, occupancy taxes, room taxes, gross receipts taxes and
similar excises imposed by any governmental authority upon the sale of rooms,
food, beverages and other goods and services in, at or from the Austin Property
or on the gross revenues of the Austin Property including, but not limited to,
Texas franchise taxes and Texas sales taxes and use taxes and other taxes under
Title 2 of the Texas Tax Code (collectively, the “Excise Taxes”) for which,
under applicable laws, Buyer would otherwise after Closing have successor
liability for amounts accrued prior to Closing, Austin Seller shall comply with
any procedures specified in such laws to obtain and deliver to Buyer on or
before the Closing Date, (i) one or more Certificates of No Tax Due (under
Section 111.020 of the Texas Tax Code) from the Comptroller or Public Accounts
of the State of Texas; and (ii) to the extent available, certificates from the
City of Austin indicating that all Excise Taxes assessed by the City of Austin
(including specifically, without limitation, any hotel or occupancy taxes) in
respect of Austin Seller or the Austin Property have been paid.  Without
limiting the generality of the foregoing, Austin Seller shall timely make all
filings or application for such certificates or confirmations and, if a
condition to the issuance of such certificates or confirmations, shall authorize
Escrow Holder at Closing to withhold from the proceeds to be distributed to
Austin Seller under and in accordance with the Agreement and retain in escrow
any amount required by applicable governmental authority, pursuant to such laws
as security for the payment of the accrued Excise Taxes in question.

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DISCLAIMER, RELEASE AND ASSUMPTION.  AS AN ESSENTIAL INDUCEMENT TO SELLER TO
ENTER INTO THIS AGREEMENT, AND AS PART OF THE DETERMINATION OF THE PURCHASE
PRICE, BUYER ACKNOWLEDGES, UNDERSTANDS AND AGREES AS OF THE DATE HEREOF AND AS
OF THE CLOSING DATE AS FOLLOWS:

DISCLAIMER.
AS-IS, WHERE-IS.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN SECTION 7.1 OR
ELSEWHERE IN THIS AGREEMENT OR IN THE DEED OR OTHER CLOSING DOCUMENTS, THE SALE
OF THE PROPERTIES HEREUNDER IS AND WILL BE MADE ON AN “AS IS, WHERE IS” BASIS
AND SELLER HAS NOT MADE, DOES NOT MAKE AND SPECIFICALLY NEGATES AND DISCLAIMS
ANY REPRESENTATIONS,  WARRANTIES OR GUARANTIES OF ANY KIND OR CHARACTER
WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT OR FUTURE
OF, AS TO, CONCERNING OR WITH RESPECT TO THE PROPERTIES OR ANY OTHER MATTER
WHATSOEVER.

SOPHISTICATION OF BUYER.  BUYER IS A SOPHISTICATED BUYER WHO IS FAMILIAR WITH
THE OWNERSHIP AND OPERATION OF REAL ESTATE PROJECTS SIMILAR TO THE PROPERTIES
AND THAT BUYER HAS OR WILL HAVE ADEQUATE OPPORTUNITY TO COMPLETE ALL PHYSICAL
AND FINANCIAL EXAMINATIONS (INCLUDING ALL OF THE EXAMINATIONS, REVIEWS AND
INVESTIGATIONS REFERRED TO IN SECTION 4) RELATING TO THE ACQUISITION OF THE
PROPERTIES HEREUNDER IT DEEMS NECESSARY, AND WILL ACQUIRE THE SAME SOLELY ON THE
BASIS OF AND IN RELIANCE UPON SUCH EXAMINATIONS AND THE TITLE INSURANCE
PROTECTION AFFORDED BY THE OWNER’S POLICY AND NOT ON ANY INFORMATION PROVIDED OR
TO BE PROVIDED BY SELLER (OTHER THAN AS EXPRESSLY PROVIDED IN SECTION 7.1 OR
ELSEWHERE IN THIS AGREEMENT OR IN THE DEED OR OTHER CLOSING DOCUMENTS).

PASSIVE OWNER.  SELLER (A) DID NOT DEVELOP OR CONSTRUCT THE PROPERTIES; AND (B)
HAS DELEGATED THE DAY-TO-DAY MANAGEMENT OF THE PROPERTIES TO A THIRD PARTY
MANAGER.

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DUE DILIGENCE MATERIALS.  ANY INFORMATION PROVIDED OR TO BE PROVIDED WITH
RESPECT TO THE PROPERTIES IS SOLELY FOR BUYER’S CONVENIENCE AND WAS OR WILL BE
OBTAINED FROM A VARIETY OF SOURCES AND THAT SELLER HAS NOT MADE ANY INDEPENDENT
INVESTIGATION OR VERIFICATION OF SUCH INFORMATION AND MAKES NO (AND EXPRESSLY
DISCLAIMS ALL) REPRESENTATIONS AS TO THE ACCURACY OR COMPLETENESS OF SUCH
INFORMATION (EXCEPT TO THE EXTENT PROVIDED IN SECTION 7.1 OR ELSEWHERE IN THIS
AGREEMENT AND IN THE DEED OR OTHER CLOSING DOCUMENTS).  EXCEPT AS OTHERWISE
EXPRESSLY PROVIDED IN SECTION 7.1 OR ELSEWHERE IN THIS AGREEMENT OR IN THE DEED
OR OTHER CLOSING DOCUMENTS, SELLER SHALL NOT BE LIABLE FOR ANY MISTAKES,
OMISSIONS, MISREPRESENTATION OR ANY FAILURE TO INVESTIGATE THE PROPERTIES NOR
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN SECTION 7.1 OR ELSEWHERE IN THIS
AGREEMENT OR IN THE DEED OR OTHER CLOSING DOCUMENTS SHALL SELLER BE BOUND IN ANY
MANNER BY ANY VERBAL OR WRITTEN STATEMENTS, REPRESENTATIONS, APPRAISALS,
ENVIRONMENTAL ASSESSMENT REPORTS, OR OTHER INFORMATION PERTAINING TO THE
PROPERTIES OR THE OPERATION THEREOF, FURNISHED BY SELLER, ITS MANAGER, OR BY ANY
REAL ESTATE BROKER, AGENT, REPRESENTATIVE, AFFILIATE, DIRECTOR, OFFICER,
SHAREHOLDER, EMPLOYEE, SERVANT OR OTHER PERSON OR ENTITY ACTING ON SELLER’S
BEHALF (COLLECTIVELY, “SELLER RELATED PARTIES”).

RELEASE.  BUYER RELEASES SELLER AND ALL SELLER RELATED PARTIES FROM ALL CLAIMS
WHICH ANY BUYER OR ANY PARTY RELATED TO OR AFFILIATED WITH BUYER (A “BUYER
RELATED PARTY”) HAS OR MAY HAVE ARISING FROM OR RELATED TO ANY MATTER OR THING
RELATED TO OR IN CONNECTION WITH THE PROPERTIES INCLUDING THE DOCUMENTS AND
INFORMATION REFERRED TO HEREIN, THE HOTEL MANAGEMENT AGREEMENT, THE TENANT
LEASES AND THE TENANTS THEREUNDER, ANY CONSTRUCTION DEFECTS, ERRORS OR OMISSIONS
IN THE DESIGN OR CONSTRUCTION AND ANY ENVIRONMENTAL CONDITIONS, AND BUYER SHALL
NOT LOOK TO ANY SELLER RELATED PARTIES IN CONNECTION WITH THE FOREGOING FOR ANY
REDRESS OR RELIEF.  THIS RELEASE SHALL BE GIVEN FULL FORCE AND EFFECT ACCORDING
TO EACH OF ITS EXPRESSED TERMS AND PROVISIONS, INCLUDING THOSE RELATING TO
UNKNOWN AND UNSUSPECTED CLAIMS, DAMAGES AND CAUSES OF ACTION.  HOWEVER, THE
FOREGOING PROVISIONS OF THIS SECTION 8.2 SHALL NOT AFFECT, APPLY OR LIMIT
SELLER’S EXPRESS OBLIGATIONS UNDER THIS AGREEMENT AND THE DOCUMENTS EXECUTED IN
CONNECTION HEREWITH.

SURVIVAL.  THIS SECTION SHALL SURVIVE ANY TERMINATION OF THIS AGREEMENT AND THE
CLOSING.

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Disposition Of Escrow Deposit.

Default by Seller.  If the transaction herein provided shall not be closed by
reason of Seller’s default under this Agreement in a material respect or the
failure of satisfaction of conditions benefiting Buyer under Section 4, which is
not cured or satisfied on or before the sooner to occur of December 28, 2006 or
ten (10) days after written notice thereof by Buyer to Seller or the termination
of this Agreement in accordance with Section 6, then the Escrow Deposit shall be
returned to Buyer, and neither party shall have any further obligation or
liability to the other (other than those obligations that expressly survive a
termination of this Agreement); provided, however, if the transactions hereunder
shall fail to close solely by reason of Seller’s default, in a material respect,
and Buyer is not in default in any material respect, then Buyer shall be
entitled to (i) specifically enforce this Agreement as its sole and exclusive
remedy (and Buyer shall not be entitled to bring any other action, for damages
or otherwise, by reason of a default by Seller prior to Closing except as
provided in (iii) below), but specific performance may not be granted or awarded
except pursuant to an arbitration proceeding commenced under Section 10.10,
within ninety (90) days after the Closing Date, or (ii) terminate this
Agreement, in which event the Escrow Deposit shall be returned to Buyer and
neither party shall have any further rights or obligations hereunder.
Notwithstanding the foregoing, if Buyer elects to terminate this Agreement as a
result of Seller’s default in a material respect or as a result of a
representation and warranty that was not true in a material respect as of the
date when made and was not known by Buyer prior to the expiration of the Due
Diligence Period to be untrue in a material respect, or which became materially
untrue after the date when made as a result of Seller’s actions or omissions,
Seller shall reimburse Buyer up to Three Hundred Thousand Dollars ($300,000.00)
of Buyer’s documented, reasonable out-of-pocket expenses incurred by Buyer in
connection with this transaction.

Default By Buyer.  In the event the transaction herein provided shall not close
solely by reason of Buyer’s default under this Agreement in a material respect
which is not cured on or before the sooner to occur of December 28, 2006 (with
respect to Austin Property only) or ten (10) days after written notice thereof
by Seller to Buyer, then the Escrow Deposit shall be delivered to Seller as its
sole remedy and as full compensation and liquidated damages under this Agreement
for such failure to close.  In connection with the foregoing, the parties
recognize that Seller will incur expense in connection with the transaction
contemplated by this Agreement and that the Properties will be removed from the
market; further, that it is extremely difficult and impracticable to ascertain
the extent of detriment to Seller caused by the breach by Buyer under this
Agreement and the failure of the consummation of the transaction contemplated by
this Agreement or the amount of compensation Seller should receive as a result
of Buyer’s breach or default.  In the event the sale of the Properties shall not
be consummated on account of Buyer’s default, then the retention of the Escrow
Deposit shall be Seller’s sole and exclusive remedy under this Agreement by
reason of such default, subject to the provisions of this Agreement that
expressly survive a termination of this Agreement. 

Closing.  In the event the transaction herein provided shall close, the Escrow
Deposit shall be applied as a partial payment of the Purchase Price.

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Miscellaneous.

Brokers.

                                   1.4.1          Except as provided in Section
10.1.2 below, Seller represents and warrants to Buyer, and Buyer represents and
warrants to Seller, that no broker or finder has been engaged by it,
respectively, in connection with the sale contemplated by this Agreement.  In
the event of a claim for broker’s or finder’s fee or commissions in connection
with the sale contemplated by this Agreement, then Seller shall indemnify,
defend and hold harmless Buyer from the same if it shall be based upon any
statement or agreement alleged to have been made by Seller, and Buyer shall
indemnify, defend and hold harmless Seller from the same if it shall be based
upon any statement or agreement alleged to have been made by Buyer.  The
provisions of this Section 10.1 shall survive the Closing and shall not be
subject to the limitations on survival in Section 7.3 or the limitations on
liability in Section 10.2.

                                   1.4.2          If and only if the sale
contemplated herein closes, Seller has agreed to pay a brokerage commission to
Hodges Ward Elliott (“Broker”) pursuant to a separate written agreement between
Seller and Broker. 

                    1.5          Limitation of Liability.

                                   1.5.1          Notwithstanding anything to
the contrary contained herein, if the Closing of the transactions hereunder
shall have occurred:  (1) Seller shall have no liability (and Buyer shall make
no claim against Seller) for a breach of any representation or warranty under
this Agreement unless the valid claims for all such breaches collectively
aggregate to more than $115,000 as to the Properties, (2) the liability of the
Seller under this Agreement for all breaches of representations and warranties
under this Agreement (including with respect to itself, the Austin Property and
the Waverly Property) shall not exceed, in the aggregate, to the extent not
covered by insurance, an amount (the “Maximum Liability Amount”) equal to
$4,750,000, and (3) in no event shall Seller be liable for any consequential or
punitive damages for breach of such representations and warranties except in the
case of knowing and intentional fraud.

                                   1.5.2          No constituent member or
partner in or agent of Seller, nor any advisor, trustee, director, officer,
employee, beneficiary, shareholder, member, partner, participant, representative
or agent of any partnership, limited liability company, corporation, trust or
other entity that has or acquires a direct or indirect interest in Seller, shall
have any personal liability, directly or indirectly, under or in connection with
this Agreement or any agreement made or entered into under or pursuant to the
provisions of this Agreement, or any amendment or amendments to any of the
foregoing made at any time or times, heretofore or hereafter, and Buyer and its
successors and assigns and, without limitation, all other persons and entities,
shall look solely to Seller’s assets for the payment of any claim or for any
performance, and Buyer, on behalf of itself and its successors and assigns,
hereby waives any and all such personal liability.  Notwithstanding anything to
the contrary contained in this Agreement, neither the negative capital account
of any constituent member or partner in Seller (or in any other constituent
member or partner of Seller), nor any obligation of any constituent member or
partner in Seller (or in any other constituent member or partner of Seller) to
restore a negative capital account or to contribute capital to Seller (or to any
other constituent member or partner of Seller), shall at any time be deemed to
be the property or an asset of Seller or any such other constituent member or
partner (and neither Buyer nor any of its successors or assigns shall have any
right to collect, enforce or proceed against or with respect to any such
negative capital account or a member’s or partner’s obligation to restore or
contribute).

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                                   1.5.3          The foregoing shall be in
addition to, and not in limitation of, any further limitation of liability that
might otherwise apply (whether by reason of Buyer’s waiver, relinquishment or
release of any applicable rights or otherwise).

                                   1.5.4          Notwithstanding anything
herein to the contrary, except in the case of knowing and intentional fraud by
either party (but except as otherwise provided in Section 10.2.1), the liability
of each party hereto resulting from the breach or default by either party shall
be limited to actual damages incurred by the injured party and except in the
case of knowing and intentional fraud by either party, the parties hereto hereby
waive their rights to recover from the other party consequential, punitive,
exemplary, and speculative damages. 

                                   1.5.5          The provisions of this Section
10.2 shall survive the Closing.

Exhibits; Entire Agreement; Modification.  All exhibits attached and referred to
in this Agreement are hereby incorporated herein as if fully set forth in (and
shall be deemed to be a part of) this Agreement.  This Agreement contains the
entire agreement between the parties respecting the matters herein set forth and
supersedes all prior agreements between the parties hereto respecting such
matters.  This Agreement may not be modified or amended except by written
agreement signed by both parties.

Time of the Essence.  Time is of the essence of this Agreement.  However,
whenever action must be taken (including the giving of notice or the delivery of
documents) under this Agreement during a certain period of time (or by a
particular date) that ends (or occurs) on a non business day, then such period
(or date) shall be extended until the immediately following business day.  As
used herein, “business day” means any day other than a Saturday, Sunday, a
federal holiday, or, as to any state wherein a Property is located, a state
holiday in such state.

Interpretation.  Section headings shall not be used in construing this
Agreement.  Each party acknowledges that such party and its counsel, after
negotiation and consultation, have reviewed and revised this Agreement.  As
such, the terms of this Agreement shall be fairly construed and the usual rule
of construction, to the effect that any ambiguities herein should be resolved
against the drafting party, shall not be employed in the interpretation of this
Agreement or any amendments, modifications or exhibits hereto or thereto.  The
words “herein”, “hereof”, “hereunder”, “hereby”, “this Agreement” and other
similar references shall be construed to mean and include this Agreement and all
amendments and supplements hereto unless the context shall clearly indicate or
require otherwise.  Whenever the words “including”, “include” or “includes” are
used in this Agreement, they shall be interpreted in a non-exclusive manner. 
Except as otherwise indicated, all Exhibit and Section references in this
Agreement shall be deemed to refer to the Exhibits and Sections in this
Agreement. 

Governing Law.  This Agreement shall be construed and enforced in accordance
with the laws of the State of Illinois without regard to Illinois’ conflicts of
law principles.  The parties agree that the sole venue for all actions or
proceedings arising out of or in connection with this Agreement shall be in the
state and federal courts located in Chicago, Illinois.  Each party waives its
right to a jury trial in connection with any such action or proceeding.

35

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Successors and Assigns.  Buyer may not assign or transfer its rights or
obligations under this Agreement without the prior written consent of Seller
either directly or indirectly (whether by outright transfer, transfer of
ownership interests or otherwise); provided, however, Buyer may assign its
interest in this Agreement on or before the Closing Date to an entity in which
Buyer has direct or indirect control and has more than a 50% direct or indirect
ownership interest so long as (a) Buyer gives Seller at least three (3) business
days advance written notice thereof and (b) Buyer and the assignee execute and
deliver an assignment and assumption agreement in form reasonably satisfactory
to Seller.  In the event of a transfer, the transferee shall assume in writing
all of the transferor’s obligations hereunder, but such transferor shall not be
released from its obligations hereunder unless and until the Closing occurs.  No
consent given by Seller to any transfer or assignment of Buyer’s rights or
obligations hereunder shall be construed as a consent to any other transfer or
assignment of Buyer’s rights or obligations hereunder.  No transfer or
assignment in violation of the provisions hereof shall be valid or enforceable. 
Subject to the foregoing, this Agreement and the terms and provisions hereof
shall inure to the benefit of and be binding upon the successors and assigns of
the parties.  Seller acknowledges that certain items of tangible and/or
intangible personal property may need to be assigned to Buyer’s operating lessee
and the applicable closing documents shall be modified accordingly as requested
by Buyer including through the use of separate bills of sale and assignments or
otherwise as reasonably requested by Buyer.

Notices.  Any notice which a party is required or may desire to give the other
shall be in writing and may be sent by personal delivery, by mail (either [i] by
United States registered or certified mail, return receipt requested, postage
prepaid, or [ii] by Federal Express or similar generally recognized overnight
carrier regularly providing proof of delivery or by telecopy (with a copy by
mail), addressed as follows (subject to the right of a party to designate a
different address for itself by notice similarly given):

 

To Seller:

 

 

 

c/o Walton Street Capital, L.L.C .

 

900 North Michigan Avenue

 

Suite 1900

 

Chicago, Illinois  60611

 

Attention:          Ira Schulman and Luke Massar

 

Telecopier:        (312) 915-2881

 

Telephone:        (312) 915-2890

 

 

 

With Copies To:

 

 

 

Pircher, Nichols & Meeks

 

1925 Century Park East, Suite 1700

 

Los Angeles, California  90067

 

Attention:          Real Estate Notices (PGN and STS)

 

Telecopier:        (310) 201-8922

 

Telephone:        (310) 201-8900

36

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and to:

 

 

 

SCS Advisors

 

1101 Fifth Ave., Suite 330

 

San Rafael, California  94901

 

Attention:          Semi Salmi

 

Telecopier:        (415) 458 2328

 

Telephone:        (415) 458 2320

 

 

 

and to:

 

 

 

Rockpoint Group, L.L.C.

 

222 Berkeley Street, Suite 2250

 

Boston, Massachusetts 02116

 

Attention: Thomas F. Gilbane

 

Telecopier:          (617) 437 7011

 

 

 

and to:

 

 

 

Rockpoint Group, L.L.C.

 

13155 Noel Road, Suite 700

 

Dallas, Texas  75240

 

Attention: Pat Fox/Asset Management

 

Telecopier:          (972) 934 8333

 

 

 

To Buyer:

 

 

 

DiamondRock Hospitality Limited Partnership

 

6903 Rockledge Drive

 

Suite 800

 

Bethesda, Maryland  20817

 

Attention:  Michael Schecter

 

Telecopier:          (240) 744-1199

 

Telephone:          (240) 744-1170

 

 

 

With a copy to:

 

Willkie Farr & Gallagher

 

787 Seventh Avenue

 

New York, New York 10019

 

Attention:  Steven D. Klein

 

Telecopier:          (212) 728 9221

 

Telephone:          (212) 728 8221

Any notice so given by mail shall be deemed to have been given as of the date of
delivery (whether accepted or refused) established by U.S. Post Office return
receipt or the overnight carrier’s proof of delivery, as the case may be.  Any
such notice not so given shall be deemed given upon receipt of the same by the
party to whom the same is to be given.

37

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Third Parties.  Nothing in this Agreement, whether expressed or implied, is
intended to confer any rights or remedies under or by reason of this Agreement
on any person other than the parties hereto and their respective successors and
assigns, nor is anything in this Agreement intended to relieve or discharge the
obligation or liability of any third persons to any party to this Agreement, nor
shall any provision give any third parties any right of subrogation or action
over or against any party to this Agreement.  This Agreement is not intended to
and does not create any third party beneficiary rights whatsoever.

ARBITRATION OF DISPUTES.  ANY CONTROVERSY OR CLAIM ARISING UNDER OR RELATING TO
THE TERMS OF THIS AGREEMENT OR ANY OF THE EXHIBITS ATTACHED TO IT, AND ANY
PROCEEDINGS TO ENFORCE THIS AGREEMENT OR RIGHTS UNDER THIS AGREEMENT AND ITS
EXHIBITS OTHER THAN THE “EXCLUDED MATTERS” (AS HEREINAFTER DEFINED) SHALL BE
SETTLED BY ARBITRATION IN THE CITY OF CHICAGO, ILLINOIS, IN ACCORDANCE WITH THE
THEN EXISTING RULES (“RULES”) OF PRACTICE AND PROCEDURE OF THE JUDICIAL
ARBITRATION & MEDIATION SERVICES (“JAMS”).  ARBITRATION SHALL BE INITIATED BY A
WRITTEN DEMAND FOR ARBITRATION BY EITHER PARTY.  THE PARTIES SHALL USE GOOD
FAITH EFFORTS TO SELECT A SINGLE ARBITRATOR WITHIN TEN (10) DAYS OF SUCH
REQUEST.  IF THE PARTIES FAIL TO AGREE ON A SINGLE ARBITRATOR DURING SUCH 10-DAY
PERIOD, THEN EITHER PARTY MAY REQUEST THAT JAMS APPOINT AN ARBITRATOR.  AT THE
TIME OF HIS OR HER APPOINTMENT, THE ARBITRATOR WILL BE REQUESTED TO HOLD AN
ARBITRATION HEARING WITHIN THIRTY (30) DAYS.  AS SOON AS PRACTICABLE AFTER
SELECTION OF THE ARBITRATOR, THE ARBITRATOR SHALL DETERMINE A REASONABLE
ESTIMATE OF THE ANTICIPATED FEES AND COSTS OF THE ARBITRATOR, AND SHALL RENDER A
STATEMENT TO EACH PARTY SETTING FORTH SAID FEES AND COSTS.  THEREAFTER EACH
PARTY SHALL, WITHIN TEN (10) DAYS OF RECEIPT OF SAID STATEMENT, DEPOSIT ONE HALF
OF SAID SUM WITH THE ARBITRATOR(S) TO BE APPLIED AGAINST SUCH FEES AND COSTS
(SUBJECT TO THE PROVISIONS OF THIS AGREEMENT). THE ARBITRATOR SHALL HAVE THE
RIGHT TO DETERMINE THE SCOPE OF HIS OR HER JURISDICTION (PROVIDED THE ARBITRATOR
IS BOUND TO THE PROVISIONS OF THIS AGREEMENT), THE EXTENT OF DISCOVERY AND TO
GRANT EQUITABLE RELIEF, INCLUDING, THE RIGHT TO INCLUDE IN ANY AWARD AN ORDER TO
A PARTY TO EXPUNGE ANY LIS PENDENS WHICH THE ARBITRATOR DEEMS IMPROPER OR TO
MAKE ANY CHANGES AS ARE NECESSARY TO AN IMPROPER LIS PENDENS FILING.  THE
PREVAILING PARTY SHALL BE ENTITLED TO REASONABLE ATTORNEYS’ FEES AND OTHER
REASONABLE COSTS INCURRED IN CONNECTION WITH THE ARBITRATION OR ANY OTHER
LITIGATION PLUS INTEREST ON THE AMOUNT OF ANY AWARD.  JUDGMENT UPON THE AWARD
RENDERED BY THE ARBITRATOR MAY BE ENTERED IN ANY COURT HAVING JURISDICTION
THEREOF.  AS USED HEREIN, “EXCLUDED MATTERS” MEANS ANY CONTROVERSY, CLAIM OR
PROCEEDING WHICH ARISES OR IS MADE OR FILED AFTER THE CLOSING OCCURS. 

38

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Legal Costs.  The parties hereto agree that they shall pay directly any and all
legal costs which they have incurred on their own behalf in the preparation of
this Agreement, all deeds and other agreements pertaining to this transaction
and that such legal costs shall not be part of the Closing costs.  In addition,
if either Buyer or Seller brings any suit or other proceeding, including an
arbitration proceeding, with respect to the subject matter or the enforcement of
this Agreement, the prevailing party (as determined by the court, agency,
arbitrator or other authority before which such suit or proceeding is
commenced), in addition to such other relief as may be awarded, shall be
entitled to recover reasonable attorneys’ fees, expenses and costs of
investigation actually incurred.  The foregoing includes attorneys’ fees,
expenses and costs of investigation (including those incurred in appellate
proceedings), costs incurred in establishing the right to indemnification, or in
any action or participation in, or in connection with, any case or proceeding
under Chapter 7, 11 or 13 of the Bankruptcy Code (11 United States Code Sections
101 et seq.), or any successor statutes.  The provisions of this Section 10.11
shall survive the Closing and any termination of this Agreement.

No Recordation.  In no event shall this Agreement or any document or other
memorandum related to the subject matter of this Agreement (other than a lis
pendens giving notice of an arbitration or legal proceeding to specifically
enforce Seller’s obligations under this Agreement) be recorded without the
consent of Seller.

Counterparts.  This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, but all of which shall constitute one and
the same document.  Delivery by facsimile, or e-mail of a PDF copy, of a
counterpart of this Agreement executed by a party shall constitute delivery by
such party of such party’s executed counterpart of this Agreement.

Effectiveness.  In no event shall any draft of this Agreement create any
obligation or liability, it being understood that this Agreement shall be
effective and binding only when a counterpart hereof has been executed and
delivered by each party hereto.

Press Releases.  Except for any disclosures required by law or the Securities
and Exchange Commission, including, without limitation, Regulation FD, Seller
and Buyer agree not to disclose or make any public announcements with respect to
the subject matter of this Agreement or the existence of this Agreement without
the consent of the other party.  If either party desires to issue a press
release or other public announcement regarding this Agreement or the transaction
set forth herein, subject to the immediately preceding sentence, such party
shall obtain the approval of the other party, which approval shall not be
unreasonably withheld or delayed.  The provisions of this Section 10.15 shall
survive the closing and any termination of this Agreement.

39

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                    Indemnities.

                              Agreement to Indemnify.  (i) Seller shall
indemnify and hold harmless Buyer and any partner, member, manager officer,
director, trustee, beneficiary, employee or agent of Buyer (collectively, the
“Buyer Indemnitees”) from and against any and all obligations, claims, losses,
damages, liabilities, and expenses (including, without limitation, reasonable
attorneys’ and accountants’ fees and disbursements (collectively, “Damages”) to
the extent arising out of (A) any loss or damage to property or injury to or
death of any person occurring on or about or in connection with the Properties
or any portion thereof at any time or times prior to the Closing Date (other
than as to and excluding Damages of or to a Governmental Authority arising out
of the physical or environmental condition of the Properties prior to the
Closing Date and other than as to Damages for remediation pertaining to the
physical or environmental condition of the Properties prior to the Closing
Date), or (B) subject to the limitations set forth herein, a breach of any
representation or warranty made by Seller hereunder or in any certificate
delivered by Seller hereunder, and (ii) Buyer shall indemnify and hold harmless
Seller and any partner, member, manager, officer, director, trustee,
beneficiary, employee or agent of Seller (collectively, the “Seller
Indemnities”) from and against any and all Damages to the extent arising out of
(A) any loss or damage to property or injury to or death of any person occurring
on or about the Properties or any portion thereof on or at any time or times
after the Closing Date (other than as to and excluding Damages of or to a
Governmental Authority arising out of or resulting from or relating to the
physical or environmental condition of the Properties prior to the Closing Date
and other than as to Damages for remediation pertaining to the physical or
environmental condition of the Properties prior to the Closing Date), or
(B) subject to the limitations set forth herein, a breach of any representation
or warranty made by Buyer hereunder or in any certificate delivered by Buyer
hereunder.  The provisions of this Section 10.16.1 shall survive the Closing and
the termination of this Agreement.  Seller’s liabilities under this Section
10.16 shall not extend the Survival Period stated in Section 7.3 hereof or
exceed the Maximum Liability Amount provided in Section 10.2.1 hereof, to the
extent not covered by insurance. 

                              Indemnification Procedure for Third Party Claims. 
In the case of any claim asserted by a third party which claim is subject to
indemnification by either party hereunder, ( a “Third-Party Claim”), the party
seeking indemnification (the “Indemnitee”) shall notify the other party (the
“Indemnitor”) promptly after has actual knowledge of any such Third-Party Claim
as to which indemnity may be sought (provided that failure to so notify shall
not affect the Indemnitor’s obligations hereunder except to the extent
materially prejudiced by such failure), and Indemnitee shall permit the
Indemnitor, at its sole expense, to assume the defense of any such Third-Party
Claim, provided that Indemnitee may participate in such defense or
administration at Indemnitee’s sole expense (provided, however, that if a
conflict of interest exists such that separate counsel must be engaged by
Indemnitee and the Indemnitor, the Indemnitor shall be responsible for the
reasonable fees and costs for such counsel for Indemnitee bug only for one
separate counsel for all Indemnitees).  The Indemnitor, in the defense of any
such Third-Party Claim, shall not, except with the consent of Indemnitee, which
Indemnitee agrees will not be unreasonably withheld, conditioned or delayed with
respect to a monetary settlement, judgment or relief, (a) consent to entry of
any judgment or enter into any settlement that provides for injunctive or other
non-monetary relief against Indemnitee or (b) pursue any course of defense of
any such Third-Party Claim subject to indemnification hereunder if Indemnitee
shall reasonably and in good faith determine that the conduct of such defense
could be expected to adversely affect in any material respect Indemnitee, its
direct or indirect owners, the use of the Properties to which the Third-Party
Claim relates.  In addition, if the Indemnitor obtains and desires to accept
from a party to any such Third-Party Claim an offer to settle the Third-Party
Claim solely for an amount certain, then Indemnitee agrees that if requested by
the Indemnitor, Indemnitee will, at its sole expense, assume defense of such
Third-Party Claim and thereafter the Indemnitor’s obligation with respect to
such Third-Party Claim shall not exceed the costs of defense then incurred and
the dollar amount of the settlement the Indemnitor proposed to accept
immediately prior to such assumption by Indemnitee, it being agreed between
Indemnitee and the Indemnitor that Indemnitee will pay any greater amounts owing
and bear any other impositions in excess of those contemplated in the proposed
settlement arrangement. In the event that the Indemnitor does not accept the
defense of any matter as above provided, Indemnitee shall have the full right to
defend against any such Third-Party Claim or demand and shall be entitled to
settle or agree to pay in full such Third-Party Claim or demand, in its sole
discretion.  In any event, the Indemnitor and Indemnitee shall cooperate in the
defense of any action or claim subject to this Agreement and each agrees to make
its records available to the other with respect to such defense as reasonably
requested and to the extent doing so does not compromise any claim of privilege
or any other defense available to it.  Acceptance of the defense of any
Third-Party Claim or of the administration of any Third-Party Claim by the
Indemnitor shall be without prejudice to the Indemnitor’s right to assert at any
time before or after accepting such defense or administration that it is not
obligated to provide an indemnity, either in whole or in part, with respect to
such Third-Party Claim.  In the event that the Indemnitor asserts that it is not
obligated to provide an indemnity to Indemnitee with respect to a Third-Party
Claim, Indemnitee shall have the right to defend such Third-Party Claim, and if
the Indemnitor is adjudicated liable for indemnifying Indemnitee, the Indemnitor
shall reimburse Indemnitee for its out-of-pocket expenses in defending such
Third-Party Claim and all settlements and judgments reasonably incurred as a
result of such Third-Party Claim.

40

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          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.

SELLER:

 

WSRH AUSTIN, L.P.,

 

a Delaware limited partnership

 

 

 

 

 

 

 

By:

WSRH Austin GP, L.L.C.,

 

 

a Delaware limited liability company

 

 

Its General Partner

 

 

 

 

By:

WSRH Austin Mezz, L.P.,

 

 

a Delaware limited partnership

 

 

Its Sole Member

 

 

 

 

By:

WSRH Austin Mezz GP, L.L.C.,

 

 

a Delaware limited liability company

 

 

Its General Partner

 

 

 

 

By:

WSRH Holdings, LLC,

 

 

a Delaware limited liability company

 

 

Its Sole Member

 

 

 

 

By:

Walton Acquisition REOC Holdings IV, LLC,

 

 

a Delaware limited liability company

 

 

Member

 

 

 

 

By:

Walton Street Real Estate Fund IV, L.P.,

 

 

a Delaware limited partnership

 

 

Its Managing Member

 

 

 

 

By:

Walton Street Managers IV, L.P.,

 

 

a Delaware limited partnership

 

 

Its General Partner

 

 

 

 

By:

WSC Managers IV, Inc.,

 

 

a Delaware corporation

 

 

Its General Partner

 

 

 

 

By:

 

 

 

--------------------------------------------------------------------------------

 

Name:

 

 

 

--------------------------------------------------------------------------------

 

Title:

 

 

 

--------------------------------------------------------------------------------

41

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SELLER:

 

WSRH ATLANTA WAVERLY, L.L.C.,

 

a Delaware limited liability company

 

 

 

 

 

 

 

By:

WSRH Atlanta Waverly Mezz, L.L.C.,

 

 

a Delaware limited liability company

 

 

Its Sole Member

 

 

 

 

By:

WSRH Holdings, LLC,

 

 

a Delaware limited liability company

 

 

Its Sole Member

 

 

 

 

By:

Walton Acquisition REOC Holdings IV, LLC

 

 

a Delaware limited liability company

 

 

Member

 

 

 

 

By:

Walton Street Real Estate Fund IV, L.P.,

 

 

a Delaware limited partnership

 

 

Its Managing Member

 

 

 

 

By:

Walton Street Managers IV, L.P.,

 

 

a Delaware limited partnership

 

 

Its General Partner

 

 

 

 

By:

WSC Managers IV, Inc.,

 

 

a Delaware corporation

 

 

Its General Partner

 

 

 

 

By:

 

 

 

--------------------------------------------------------------------------------

 

Name:

 

 

 

--------------------------------------------------------------------------------

 

Title:

 

 

 

--------------------------------------------------------------------------------

42

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BUYER:

 

DIAMONDROCK HOSPITALITY LIMITED PARTNERSHIP,

 

a Delaware limited partnership

 

 

 

 

 

 

 

By:

DIAMONDROCK HOSPITALITY COMPANY,

 

 

a Maryland corporation

 

 

its sole General Partner

 

 

 

 

By:

 

 

 

--------------------------------------------------------------------------------

 

Name:

 

 

 

--------------------------------------------------------------------------------

 

Title:

 

 

 

--------------------------------------------------------------------------------

43

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JOINDER

          Provided that the Closing of the transaction under the Agreement to
which this Joinder is attached shall occur, WSRH Holdings, LLC, a Delaware
limited liability company (“Holdings”), (which by its execution of this Joinder
acknowledges to Buyer that it has a material, economic interest in Waverly
Seller and Austin Seller) agrees to and does hereby absolutely and
unconditionally guarantee the obligations of each Seller under this Agreement,
if any, to pay adjudicated damages to Buyer (the “Obligations”), subject to and
not to exceed the Maximum Liability Amount set forth in Section 10.2.1 of the
Agreement, and subject to any floor and minimum amounts set forth in Section
10.2.1 of the Agreement, all other limitations set forth in Section 10.2 of the
Agreement, the limitations on survival set forth in Section 7.3 of the Agreement
or otherwise, and all other limitations expressly contained in the Agreement. 

          Holdings represents that its net worth as of the Closing Date, without
taking into account the Properties or any contingent liability, will be greater
than $20,000,000.

          Holdings covenants and agrees that, during the Survival Period (and,
if a claim is made by Buyer under the Agreement during the Survival Period, then
until such claim is resolved), Holdings will retain sufficient reserves to pay
its obligations as they come due.

          Holdings hereby waives any right to require Buyer to (i) proceed
against either Seller or pursue any rights or remedies with respect to the
Agreement, or (ii) pursue any other remedy whatsoever in Buyer’s power.  Buyer
shall have the right, subject to the limitations set forth in the Agreement, to
enforce this Joinder regardless of the release or discharge of either Seller by
operation of law.

          The liability of Holdings under this Joinder shall not be deemed to
have been waived, released, discharged, impaired or affected by reason of the
release or discharge of either Seller in any receivership, bankruptcy,
winding-up or other creditors’ proceedings or the rejection, disaffirmance or
disclaimer of the Agreement by any party in any such action or proceeding.

          Holdings authorizes Seller, without notice or consent and without
affecting, impairing or discharging Holdings’ liability hereunder, to from time
to time (a) renew, modify, amend, extend or discharge the provisions of the
Obligations, or of any other term contained within the Agreement, and (b)
exercise or refrain from exercising any of its rights or obligations under the
Agreement, at law or in equity.   Holdings liability hereunder shall not be
impaired by  Buyer’s  release in whole or in part Seller or any member in Seller
(other than Holdings) from liability.  Holdings may not assign its obligations
under the Joinder.

          Holdings agrees to pay (unless Holdings prevails in the enforcement
action in question), upon demand therefor, reasonable attorneys’ fees and all
other costs and expenses that may be incurred by Buyer in the enforcement of
this Joinder and/or the Agreement and agrees that all attorneys’ fees and other
costs and expenses incurred by Buyer in pursuing or enforcing rights under this
Joinder, whether in litigation, or with respect to the Obligations or this
Joinder, or in administrative, bankruptcy or reorganization proceedings shall
constitute obligations which are guaranteed hereunder.

44

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          Holdings represents and warrants to Buyer that (i) it is a Delaware
limited liability company, duly organized, validly existing and in good standing
under the laws of the state in which it was formed, (ii) it has the power,
right, authority and legal capacity to execute and deliver this Joinder and to
fully perform and observe the terms hereof, (iii) the execution, delivery and
performance by it of this Joinder has been duly authorized by all necessary
action on behalf of Holdings, (iv) all of the persons who execute and deliver
this Joinder on behalf of Holdings have been duly authorized and empowered on
behalf of Holdings so to do, (v) this Joinder is the valid and binding
obligation of Holdings enforceable against it in accordance with its terms, (vi)
the execution, delivery and performance by it of this Joinder will not (A)
violate any provision of any of its organizational documents, (B) require it to
obtain any consent, approval or action of, or make any filing with or give any
notice to, any person, (C) violate, conflict with or result in the breach of any
of the terms of, result in a material modification of the effect of, otherwise
give any other contracting party the right to terminate, or constitute (or with
notice or lapse of time or both constitute) a default (by way of substitution,
novation or otherwise) under, any agreement to which it or any of its affiliates
(whether now or formerly existing) is or was a party or by or to which any of
them or any of their properties may be (or have been) bound or subject, (D)
violate any order, judgment, injunction, award, decree or writ of any
governmental body, entity or authority against, or binding upon, it or any of
its affiliates or upon any of its or their properties or the business of
Holdings or (E) violate any law, statute, code, ordinance, regulation or other
requirement of any governmental body, entity or authority, and (vii) there is no
provision in the organizational documents of Holdings that would prevent or
limit, or is otherwise inconsistent with, Holdings’ execution and delivery of,
and performance under, this Joinder.

[Signature on following page]

45

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WSRH HOLDINGS, LLC,

 

a Delaware limited liability company

 

 

 

 

 

 

 

By:

Walton Acquisition REOC Holdings IV, LLC,

 

 

a Delaware limited liability company

 

 

Member

 

 

 

 

By:

Walton Street Real Estate Fund IV, L.P.,

 

 

a Delaware limited partnership

 

 

Its Managing Member

 

 

 

 

By:

Walton Street Managers IV, L.P.,

 

 

a Delaware limited partnership

 

 

Its General Partner

 

 

 

 

By:

WSC Managers IV, Inc.,

 

 

a Delaware corporation

 

 

Its General Partner

 

 

 

 

By:

 

 

 

--------------------------------------------------------------------------------

 

Name:

 

 

 

--------------------------------------------------------------------------------

 

Title:

 

 

 

--------------------------------------------------------------------------------

46

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EXHIBIT LIST

“A-1”

-

Legal Description of Austin Land

“A-2”

-

Legal Description of Waverly Land

“B”

-

There is no Exhibit B

“C”

-

There is no Exhibit C

“D”

-

Interim Deposit Agreement

“E”

-

Permitted Exceptions.

“F”

-

Escrow Instructions

“G-1”

-

Austin Deed

“G-2”

-

Waverly Deed

“H”

-

Hotel Management Agreement Assignment and Assumption

“I”

-

Other Assignment and Assumption Agreements

“J”

-

Bill of Sale

“K”

-

Seller Closing Certificate

“L-1”

-

Certificate of Non-Foreign Status Regarding Austin Property

“L-2”

-

Certificate of Non-Foreign Status Regarding Waverly Property

“L-3”

-

Affidavit of Seller’s Residence (Waverly Seller)

“M”

-

Seller’s Title Certificate

“N”

-

Buyer Closing Certificate

“O-1”

-

Austin Leases

“O-2”

-

Waverly Leases

“P”

-

Security Deposits

“Q”

-

Litigation, Proceedings

“R-1”

-

Austin Service Agreements

“R-2”

-

Waverly Service Agreements

“R-3”

-

Austin Renovation Commitments

“R-4”

-

Waverly Renovation Commitments

“S”

-

Environmental Reports

“T”

-

Financial Information

“U-1”

-

Form of Notice to Tenants (Austin Property)

“U-2”

-

Form of Notice to Tenants (Waverly Property)

47

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