Exhibit 10.48

Grapevine, TX (CY/TPS)

PURCHASE CONTRACT

between

GRAPEVINE EQUITY PARTNERS, LLC (“SELLER”)

AND

APPLE TEN HOSPITALITY OWNERSHIP, INC. (“BUYER”)

Dated: November 1, 2011

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TABLE OF CONTENTS

 

 

 

 

 

 

ARTICLE 1

 

DEFINED TERMS

 

1

 

 

 

 

 

 

 

1.1

 

Definitions

 

1

 

 

 

 

 

 

ARTICLE 2

 

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

 

8

 

 

 

 

 

 

 

2.1

 

Purchase and Sale

 

8

 

 

 

 

 

 

 

2.2

 

Purchase Price

 

8

 

 

 

 

 

 

 

2.3

 

Allocation

 

8

 

 

 

 

 

 

 

2.4

 

Payment

 

8

 

 

 

 

 

 

 

2.5

 

Earnest Money Deposit

 

8

 

 

 

 

 

 

ARTICLE 3

 

REVIEW PERIOD

 

9

 

 

 

 

 

 

 

3.1

 

Review Period

 

9

 

 

 

 

 

 

 

3.2

 

Due Diligence Examination

 

10

 

 

 

 

 

 

 

3.3

 

Restoration

 

11

 

 

 

 

 

 

ARTICLE 4

 

SURVEY AND TITLE APPROVAL

 

11

 

 

 

 

 

 

 

4.1

 

Survey

 

11

 

 

 

 

 

 

 

4.2

 

Title

 

11

 

 

 

 

 

 

 

4.3

 

Survey or Title Objections

 

11

 

 

 

 

 

 

ARTICLE 5

 

MANAGEMENT AGREEMENT AND FRANCHISE AGREEMENT

 

12

 

 

 

 

 

 

ARTICLE 6

 

BROKERS

 

12

 

 

 

 

 

 

ARTICLE 7

 

REPRESENTATIONS, WARRANTIES AND COVENANTS

 

13

 

 

 

 

 

 

 

7.1

 

Seller’s Representations, Warranties and Covenants

 

13

 

 

 

 

 

 

 

7.2

 

Buyer’s Representations, Warranties and Covenants

 

16

 

 

 

 

 

 

 

7.3

 

Survival

 

17

 

 

 

 

 

 

ARTICLE 8

 

ADDITIONAL COVENANTS

 

17

 

 

 

 

 

 

 

8.1

 

Subsequent Developments

 

17

 

 

 

 

 

 

 

8.2

 

Construction of Hotel

 

17

 

 

 

 

 

 

 

8.3

 

Plans and Specifications

 

17

 

 

 

 

 

 

 

8.4

 

Commencement of Construction; Substantial Completion

 

18

 

 

 

 

 

 

 

8.5

 

Inspections

 

18

 

 

 

 

 

 

 

8.6

 

Punch List

 

18

 

 

 

 

 

 

 

8.7

 

Pre-Opening Program

 

18

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8.8

 

Construction Warranty

 

19

 

 

 

 

 

 

 

8.9

 

Other Obligations of Seller Before Closing

 

19

 

 

 

 

 

 

 

8.10

 

Third Party Consents

 

20

 

 

 

 

 

 

 

8.11

 

Access to Financial Information

 

20

 

 

 

 

 

 

 

8.12

 

Bulk Sales

 

20

 

 

 

 

 

 

 

8.13

 

Indemnification

 

20

 

 

 

 

 

 

 

8.14

 

Escrow Funds

 

23

 

 

 

 

 

 

 

8.15

 

Liquor License

 

23

 

 

 

 

 

 

 

8.16

 

Mechanics’ Lien Protection

 

23

 

 

 

 

 

 

ARTICLE 9

 

CONDITIONS FOR CLOSING

 

23

 

 

 

 

 

 

 

9.1

 

Buyer’s Conditions for Closing

 

24

 

 

 

 

 

 

 

9.2

 

Seller’s Conditions for Closing

 

25

 

 

 

 

 

 

ARTICLE 10

 

CLOSING AND CONVEYANCE

 

26

 

 

 

 

 

 

 

10.1

 

Closing

 

26

 

 

 

 

 

 

 

10.2

 

Deliveries of Seller

 

26

 

 

 

 

 

 

 

10.3

 

Buyer’s Deliveries

 

28

 

 

 

 

 

 

ARTICLE 11

 

COSTS

 

28

 

 

 

 

 

 

 

11.1

 

Seller’s Costs

 

28

 

 

 

 

 

 

 

11.2

 

Buyer’s Costs

 

28

 

 

 

 

 

 

ARTICLE 12

 

ADJUSTMENTS

 

29

 

 

 

 

 

 

 

12.1

 

Adjustments

 

29

 

 

 

 

 

 

 

12.2

 

Reconciliation and Final Payment

 

30

 

 

 

 

 

 

 

12.3

 

Employees

 

30

 

 

 

 

 

 

ARTICLE 13

 

CASUALTY AND CONDEMNATION

 

30

 

 

 

 

 

 

 

13.1

 

Risk of Loss; Notice

 

30

 

 

 

 

 

 

 

13.2

 

Buyer’s Termination Right

 

30

 

 

 

 

 

 

 

13.3

 

Procedure for Closing

 

31

 

 

 

 

 

 

ARTICLE 14

 

DEFAULT REMEDIES

 

31

 

 

 

 

 

 

 

14.1

 

Buyer Default

 

31

 

 

 

 

 

 

 

14.2

 

Seller Default

 

31

 

 

 

 

 

 

 

14.3

 

Attorney’s Fees

 

31

 

 

 

 

 

 

ARTICLE 15

 

NOTICES

 

32

 

 

 

 

 

 

ARTICLE 16

 

MISCELLANEOUS

 

33

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16.1

 

Performance

 

33

 

 

 

 

 

 

 

16.2

 

Binding Effect; Assignment

 

33

 

 

 

 

 

 

 

16.3

 

Entire Agreement

 

33

 

 

 

 

 

 

 

16.4

 

Governing Law

 

33

 

 

 

 

 

 

 

16.5

 

Captions

 

33

 

 

 

 

 

 

 

16.6

 

Confidentiality

 

33

 

 

 

 

 

 

 

16.7

 

Closing Documents

 

33

 

 

 

 

 

 

 

16.8

 

Counterparts

 

33

 

 

 

 

 

 

 

16.9

 

Severability

 

33

 

 

 

 

 

 

 

16.10

 

Interpretation

 

34

 

 

 

 

 

 

 

16.11

 

(Intentionally Omitted)

 

34

 

 

 

 

 

 

 

16.12

 

Further Acts

 

34

 

 

 

 

 

 

 

16.13

 

Joint and Several Obligations

 

34

 

 

 

 

 

 

 

16.14

 

[Notice of Proposed Listing

 

34

SCHEDULES:

 

 

EXHIBITS:

 

 

 

Exhibit A

Legal Description

Exhibit B

List of FF&E

Exhibit C

List of Hotel Contracts

Exhibit D

Consents and Approvals

Exhibit E

Environmental Reports

Exhibit F

Claims or Litigation Pending

Exhibit G

Escrow Agreement

Exhibit H

Construction Warranty

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PURCHASE CONTRACT

          This PURCHASE CONTRACT (this “Contract”) is made and entered into as
of November 1, 2011, by and between GRAPEVINE EQUITY PARTNERS, LLC, a Texas
limited liability company (“Seller”) with a principal office at 1135 Kinwest
Parkway #150, Irving, Texas 75063, and APPLE TEN HOSPITALITY OWNERSHIP, INC., a
Virginia corporation, with its principal office at 814 East Main Street,
Richmond, Virginia 23219, or its affiliates or assigns (“Buyer”).

RECITALS

          A. Seller is the fee simple owner of the land located in the City of
Grapevine, County of Tarrant, Texas, identified on Exhibit A attached hereto and
incorporated herein by reference. Seller intends to construct on such land a
Courtyard by Marriott Combo Hotel containing 180 guestrooms and a TownePlace
Suites by Marriott Combo Hotel containing 120 guestrooms.

          B. Buyer is desirous of purchasing such land and the hotels to be
constructed thereon from Seller upon completion of the hotels, and Seller is
desirous of selling such land and hotels to Buyer, for the purchase price and
upon terms and conditions hereinafter set forth.

AGREEMENT:

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

ARTICLE 1
DEFINED TERMS

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

          “Additional Deposit” shall mean $50,000.

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

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

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strips or gores of real estate adjacent to the Land, and (iv) the use of all
alleys, easements and rights-of-way, if any, abutting, adjacent, contiguous to
or adjoining the Land.

          “Architect” shall mean the architect for the Hotel, Dell Livingston,
LLW Architects, Inc., 803 Mount Moriah Rd., Ste 100b, Memphis, TN.

          “Brand” shall mean Courtyard by Marriott and TownePlace Suites by
Marriott, the hotel brands or franchises under which the Hotel will operate.
“Business Day” shall mean any day other than a Saturday, Sunday or legal holiday
in the State of Texas.

          “Closing” shall mean the closing of the purchase and sale of the
Property pursuant to this Contract.

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

          “Construction Warranty” shall have the meaning set forth in Section
8.8.

          “Contractor” shall mean the contractor for the Hotel, Mike Patel of
Sagestar Development & Construction, LLC, 1135 Kinwest Parkway, #150, Irving,
Texas 75063.

          “Contracts, Plans and Specs” shall mean all construction and other
contracts, plans, drawings, specifications, surveys, soil reports, engineering
reports, inspection reports, and other technical descriptions and reports in the
possession or control of Seller at the time of mutual acceptance of this
Agreement and those created during the term of this Contract.

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

          “Deposits” shall mean, to the extent assignable, all prepaid rents and
deposits, refundable security deposits and rental deposits, and all other
deposits for advance reservations, banquets or future services, made in
connection with the use or occupancy of the Improvements; provided, however,
that to the extent Seller has not received or does not hold all of the prepaid
rents and/or deposits attributable to the Leases related to the Property, Buyer
shall be entitled to a credit against the cash portion of the Purchase Price
allocable to the Property in an amount equal to the amount of the prepaid rents
and/or deposits attributable to the Leases transferred at the Closing of such
Property, and provided further, that “Deposits” shall exclude (i) reserves for
real property taxes and insurance, in each case, to the extent pro rated on the
settlement statement such that Buyer receives a credit for (a) taxes and
premiums in respect of any period prior to Closing and (b) the amount of
deductibles and other self-insurance and all other potential liabilities and
claims in respect of any period prior to Closing, and (ii) utility deposits.

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

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

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

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

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

          “Escrow Funds” shall have the meaning set forth in Section 8.14.

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

          “Existing Franchise Agreement” shall mean that certain franchise
license agreement between the Seller and the Franchisor, granting Seller a
franchise to operate its Hotel under the Brand.

          “Existing Management Agreement” shall mean that certain management
agreement between the Seller and Newcrest Management, LLC (the “Existing
Manager”).

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

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

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

          “Force Majeure” shall mean any delay or hindrance in or the prevention
from the performance of any act by reason of an act of God, strikes, lockouts,
labor troubles, inability to procure materials, failure of power, restrictive
governmental laws or regulations, riots, insurrection, war or other reason of a
like nature not the fault of the party delayed in performing work or doing acts.

          “Franchise Agreement” shall mean the franchise license agreement, in
form reasonably acceptable to Buyer, between Franchisor and Buyer.

          “Franchisor” shall mean Marriott International, Inc. or its affiliate.

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          “Hotel” shall mean, collectively, the hotels to be constructed on the
Land, including all Improvements and Personal Property associated therewith, to
be known generally as the “Courtyard by Marriott and TownePlace Suites by
Marriott Combo Hotel, Grapevine, TX”.

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

          “Improvements” shall mean all buildings, structures, fixtures, parking
areas and other improvements now existing or to be constructed on the Land, and
all related facilities.

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

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

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

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

          “Leases” shall mean all leases, franchises, licenses, occupancy
agreements, “trade-out” agreements, advance bookings, convention reservations,
or other agreements demising space in, providing for the use or occupancy of, or
otherwise similarly affecting or relating to the use or occupancy of, the
Improvements or Land, together with all amendments, modifications, renewals and
extensions thereof, and all guaranties by third parties of the obligations of
the tenants, licensees, franchisees, concessionaires or other entities
thereunder.

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

          “Legal Requirements” shall mean any and all statutes, laws,
ordinances, zoning and other codes, rules, regulations and requirements of any
governmental authority applicable to the Property or any of the parties to this
Contract.

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

          “Liquor Licenses” shall have the meaning set forth in Section 8.15.

          “Management Agreement” means the management agreement to be entered
into between Buyer and the Manager for the operation and management of the Hotel
on and after the Closing Date.

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          “Manager” shall mean the management company chosen by Buyer to operate
the Hotel from and after Closing.

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

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

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

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

          “Plans and Specifications” shall have the meaning set forth in Section
8.3.

          “Pre-Opening Costs” shall have the meaning set forth in Section 8.7.

          “Pre-Opening Program” shall have the meaning set forth in Section 8.7.

          “Post-Closing Agreement” shall have the meaning set forth in Section
8.14.

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

          “Punch List Items” shall mean such items (i) as are reasonably
necessary or appropriate to fully complete the construction, equipping and
furnishing of the Hotel in accordance with this Contract and (ii) that, unless
otherwise agreed by Buyer in its sole discretion, (a) individually and in the
aggregate do not and will not prohibit, cause a delay in or otherwise adversely
affect, under applicable Legal Requirements, the Franchise Agreement or
otherwise, the opening of the Hotel for business to the public or the continued
occupancy and operation of the Hotel as contemplated under the Brand and (b) may
be corrected or completed, subject to delays caused by Force Majeure, within not
more than sixty (60) days.

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

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

          “Records” shall mean all books, records, promotional material, tenant
data, guest history information (other than any such information owned
exclusively by the Franchisor), marketing and leasing material and forms
(including but not limited to any such records, data, information, material and
forms in the form of computerized files located at the Hotel), market studies

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prepared in connection with Seller’s current annual plan and other materials,
information, data, legal or other documents or records (including, without
limitation, all documentation relating to any litigation or other proceedings,
all zoning and/or land use notices, relating to or affecting the Property, all
business plans and projections and all studies, plans, budgets and contracts
related to the development, construction and/or operation of the Hotel) owned by
Seller and/or in a Seller’s possession or control, or to which a Seller has
access or may obtain from the Franchisor, that are used in or relating to the
Property and/or the operation of the Hotel, including the Land, the Improvements
or the FF&E, and proforma budgets and projections and construction budgets and
contracts related to the development and construction of the Hotel and a list of
the general contractors, architects and engineers providing goods and/or
services in connection with the construction of the Hotel, all construction
warranties and guaranties in effect at Closing and copies of the final plans and
specifications for the Hotel.

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

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

          “SEC” shall have the meaning set forth in Section 8.11.

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

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

          “Service Contracts” shall mean contracts or agreements, such as
maintenance, supply, service or utility contracts.

          “Substantial Completion,” including variations thereof such as
“Substantially Complete” and “Substantially Completed” shall mean: (i) the
Architect and the Contractor have issued a certificate of substantial completion
in form and substance satisfactory to Buyer certifying that the Hotel has been
constructed substantially in accordance with the Plans and Specifications and
the Legal Requirements, (ii) at least a temporary certificate of occupancy
authorizing the opening of the Hotel for business to the public and for
operation under the Brand has been issued by the local governing authority and
is in full force and effect, (iii) all other final and unconditional consents,
approvals, licenses and operating permits necessary or appropriate for the Hotel
to open for business to the public and to operate under the Brand have been
issued by and obtained from all applicable governmental and regulatory
authorities, subject to Punch List Items; (iv) the Hotel is fully furnished,
fitted and equipped and ready to open for business to the public and operate
under the Brand, subject to Punch List Items; (iii) all contractors,
subcontractors, suppliers, mechanics, materialmen and other persons or entities
providing labor or materials for the construction and development of the Hotel
shall have been paid in full (or adequate provision for payment of such persons
or entities has been made to Buyer’s satisfaction), subject to Punch List Items
and (iv) the Franchisor has approved the completion, furnishing and equipping of
the Hotel and is prepared to commence (or authorize the commencement of)
operation of the Hotel, and all of the other conditions set forth in the
Franchise Agreement have been satisfied, subject to Punch List Items.

          “Supplies” shall mean all merchandise, supplies, inventory and other
items used for the operation and maintenance of guest rooms, restaurants,
lounges, swimming pools, health clubs,

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

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

          “Third Party Consents” shall have the meaning set forth in Section
8.10.

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

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

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

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

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

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

          “Warranties” shall mean all warranties, guaranties, indemnities and
claims for the benefit of Seller with respect to the Hotel, the Property or any
portion thereof, including, without limitation, all warranties and guaranties of
the development, construction, completion, installation, equipping and
furnishing of the Hotel, and all indemnities, bonds and claims of Seller related
thereto.

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ARTICLE 2
PURCHASE AND SALE; PURCHASE PRICE; PAYMENT;
EARNEST MONEY DEPOSIT.

          2.1 Purchase and Sale. Seller agrees to sell and convey to Buyer or
its Affiliates and/or assigns, and Buyer or its assigns agrees to purchase from
Seller, the Property, in consideration of the Purchase Price and upon the terms
and conditions hereof. All of the Property shall be conveyed, assigned, and
transferred to Buyer at Closing, free and clear of all mortgages, liens,
encumbrances, licenses, franchises (other than any hotel franchises assumed by
Buyer), concession agreements, security interests, prior assignments or
conveyances, conditions, restrictions, rights-of-way, easements, encroachments,
claims and other matters affecting title or possession, except for the Permitted
Exceptions and FF&E Leases.

          2.2 Purchase Price. Buyer agrees to pay, and Seller agrees to accept,
as consideration for the conveyance of the Property, subject to the adjustments
provided for in this Contract, the amount of FORTY-ONE MILLION SEVEN HUNDRED
THOUSAND and No/100 Dollars ($41,700,000.00); provided, however, that if the
actual cost of construction of the Hotel is less than $34,965,695.00, the
purchase price shall be reduced by an amount equal to twenty percent (20%) of
the difference between such actual construction costs and $34,965,695.00 (the
“Purchase Price”).

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

          2.4 Payment. The portion of the Purchase Price, less: (a) the Earnest
Money Deposit and interest earned thereon, if any, which Buyer elects to have
applied against the Purchase Price (as provided below) and (b) the Escrow Funds,
shall be paid to Seller in cash, certified funds or wire transfer, at the
Closing of the Property. At the Closing, the Earnest Money Deposit, together
with interest earned thereon, if any, shall, at Buyer’s election, be returned to
Buyer or shall be paid over to Seller by Escrow Agent to be applied to the
portion of the Purchase Price on behalf of Buyer, and the Escrow Funds shall be
deposited into an escrow account pursuant to the Post-Closing Agreement as
contemplated by Section 8.14.

          2.5 Earnest Money Deposit.

                              (a) Within three (3) Business Days after the full
execution and delivery of this Contract, Buyer shall deposit the sum of Fifty
Thousand and No/100 Dollars ($50,000.00) in cash, certified bank check or by
wire transfer of immediately available funds (the “Initial Deposit”) with the
Title Company, as escrow agent (“Escrow Agent”), which sum shall be held by
Escrow Agent as earnest money. If, pursuant to the provisions of Section 3.1 of
this Contract, Buyer elects to terminate this Contract at any time prior to the
expiration of the Review

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Period, then the Escrow Agent shall return the Earnest Money Deposit to Buyer
promptly upon written notice to that effect from Buyer. If Buyer does not elect
to terminate this Contract on or before the expiration of the Review Period,
Buyer shall, within three (3) Business Days after the expiration of the Review
Period deposit the Additional Deposit with the Escrow Agent. The Initial Deposit
and the Additional Deposit, and all interest accrued thereon, shall hereinafter
be referred to as the “Earnest Money Deposit.”

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

ARTICLE 3
REVIEW PERIOD

          3.1 Review Period. Buyer shall have a period through 6:00 p.m. Eastern
Time on the date that is the later of (a) one hundred five (105) days following
the date of this Contract or (b) forty-five (45) days following the date Seller
obtains and notifies Buyer that it has received a commitment for construction
financing for the Hotel, unless a longer period of time is otherwise provided
for in this Contract and except as otherwise agreed to by Buyer and Seller (the
“Review Period”), to evaluate the legal, title, survey, construction, physical
condition, structural, mechanical, environmental, economic, permit status,
franchise status, financial and other documents and information related to the
Property. Within two (2) Business Days following the date of this Contract,
Seller, at Seller’s sole cost and expense, will deliver to Buyer for Buyer’s
review, to the extent not previously delivered to Buyer and to the extent
available, true, correct and complete copies of the following, together with all
amendments, modifications, renewals or extensions thereof:

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

                              (b) To the extent available and applicable, income
and expense statements and budgets for the Hotel, for the current year to date
and each of the three (3) prior fiscal years (the “Financial Statements”), and
the Seller shall provide to Buyer copies of all income and expense statements
generated by the Seller or any third party that relate to the operations of the
Hotel and that contain information not included in the financial statements, if
any, provided to Buyer by the Manager, provided that Sellers also agree to
provide to Buyer’s auditors and representatives all financial and other
information necessary or appropriate for preparation of audited financial
statements for Buyer and/or its Affiliates as provided in Section 8.11, below;

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

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                              (d) Engineering, mechanical, architectural and
construction plans, drawings, specifications and contracts, payment and
performance bonds, title policies, reports and commitments, zoning information
and marketing and economic data relating to the Land or the Hotel and the
construction, development, installation and equipping thereof, as well as copies
of all environmental reports and information, topographical, boundary or “as
built” surveys, engineering reports, subsurface studies and other Contracts,
Plans and Specs relating to or affecting the Hotel. If the Hotel is purchased by
Buyer, all such documents and information relating to the Hotel shall thereupon
be and become the property of Buyer without payment of any additional
consideration therefor; and

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

                              (f) All notices received from governmental
authorities in connection with the Land for the current year and each of the
two(2) calendar years prior to the current year and all other notices received
from governmental authorities received at any time that relate to any
noncompliance or violation of law that has not been corrected.

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

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

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          3.3 Restoration. Buyer covenants and agrees not to damage or destroy
any portion of the Property in conducting its examinations and studies of the
Property during the Due Diligence Examination and, if closing does not occur,
shall repair any portion of the Property damaged by the conduct of Buyer, its
agents or employees, to substantially the condition such portion(s) of the
Property were in immediately prior to such examinations or studies.

ARTICLE 4
SURVEY AND TITLE APPROVAL

          4.1 Survey. Seller has delivered to Buyer true, correct and complete
copies of the most recent surveys of the Real Property. In the event that an
update of a survey or a new survey (such updated or new surveys being referred
to as the “Surveys”) are desired by Buyer, then Buyer shall be responsible for
all costs related thereto; provided, however, Seller shall provide, at its sole
cost and expense, an as-built survey when the Hotel is substantially complete.

          4.2 Title. Seller has delivered to Buyer Seller’s existing title
insurance policy, including copies of all documents referred to therein, for the
Real Property. Buyer’s obligations under this Contract are conditioned upon
Buyer being able to obtain for the Property (i) a Commitment for Title Insurance
(the “Title Commitment”) issued by Chicago Title Co., 5501 LBJ Freeway, Ste.
200, Dallas, Texas 75240, Attn: Debby Moore, (the “Title Company”), for the most
recent standard form of owner’s policy of title insurance in the state in which
the Real Property is located, covering the Real Property, setting forth the
current status of the title to the Real Property, showing all liens, claims,
encumbrances, easements, rights of way, encroachments, reservations,
restrictions and any other matters affecting the Real Property and pursuant to
which the Title Company agrees to issue to Buyer at Closing an Owner’s Policy of
Title Insurance on the most recent form of ALTA (where available) owner’s policy
available in the state in which the Land is located, with extended coverage, and
to the extent applicable and available in such state, comprehensive, access,
single tax parcel, contiguity and such other endorsements as may be required by
Buyer (collectively, the “Title Policy”); and (ii) true, complete, legible and,
where applicable, recorded copies of all documents and instruments (the
“Exception Documents”) referred to or identified in the Title Commitment,
including, but not limited to, all deeds, lien instruments, leases, plats,
surveys, reservations, restrictions, and easements affecting the Real Property.
If requested by Seller, Buyer shall promptly provide Seller with a copy of the
Title Commitment issued by the Title Company.

          4.3 Survey or Title Objections. If Buyer discovers any title or survey
matter which is objectionable to Buyer, Buyer may provide Seller with written
notice of its objection to same within ninety (90) days after receipt of each
Title Commitment (including all Exception Documents) and the applicable Survey
(the “Title Review Period”). If Buyer fails to so object in writing to any such
matter set forth in the Survey or Title Commitment, it shall be conclusively
assumed that Buyer has approved same, except as otherwise provided in Section
9.1. If Buyer disapproves any condition of title, survey or other matters by
written objection to Seller on or before the expiration of the Title Review
Period, Seller shall elect either to attempt to cure or not cure any such item
by written notice sent to Buyer within five (5) days after Seller’s receipt of
notice from Buyer, and if Seller commits in writing to attempt to cure any such
item, then Seller shall be given until the Closing Date to cure any such defect.
In the event Seller shall fail to cure a defect which Seller has committed in
writing to cure prior to Closing, or if a

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new title defect arises after the date of Buyer’s Title Commitment or Survey, as
applicable, but prior to Closing, then Buyer may elect, in Buyer’s sole and
absolute discretion: (i) to waive such objection and proceed to Closing, or (ii)
to terminate this Contract and receive a return of the Earnest Money Deposit,
and any interest thereon. The items shown on the Title Commitment which are not
objected to by Buyer as set forth above (other than exceptions and title defects
arising after the title Review Period and other than those standard exceptions
which are ordinarily and customarily omitted in the state in which the Hotel is
located, so long as Seller provides the appropriate owner’s affidavit, gap
indemnity or other documentation reasonably required by the Title Company for
such omission) and all Leases showing on the Title Commitment are hereinafter
referred to as the “Permitted Exceptions.” In no event shall Permitted
Exceptions include liens, or documents evidencing liens, securing any
indebtedness or any mechanics’ or materialmen’s liens or any claims or potential
claims therefor covering the Property or any portion thereof or vehicle,
equipment or FF&E liens or other financing(“Seller Liens”), each of which shall
be paid in full by Seller and released at Closing. Notwithstanding anything
contained in this Contract to the contrary, if a vehicle, equipment or FF&E
lease or other financing cannot be released at Closing, Seller shall credit
Buyer at Closing with the amount necessary to fully pay off such lease or
financing over its term.

ARTICLE 5
MANAGEMENT AGREEMENT AND FRANCHISE AGREEMENT

          At or prior to the Closing, Seller shall terminate any Existing
Management Agreement and the Existing Franchise Agreement and Seller shall be
solely responsible for all claims and liabilities arising thereunder on, prior
to or following the Closing Date. As a condition to Closing, Buyer shall enter
into the Franchise Agreement, effective as of the Closing Date, containing terms
and conditions acceptable to Buyer (including, without limitation, such terms
and conditions as may be required to accommodate Buyer’s and/or Buyer’s
Affiliates’ REIT structure). Seller shall be responsible for paying all costs
related to the termination of the Existing Management Agreement and shall
indemnify and hold Buyer harmless from and against any and all claims from any
persons claiming under any management agreement other than the management
agreement entered into between Buyer and Manager. Seller shall be responsible
for paying all reasonable and actual costs of the Franchisor related to the
termination of the Existing Franchise Agreement including, without limitation,
any key money or other development incentives. Seller shall negotiate a one-time
free right of transfer in the Existing Franchise Agreement which shall permit
Buyer to obtain a new Franchise Agreement at no cost to Buyer (other than
Buyer’s costs of review). In the event Seller is unable to secure this one-time
free right of transfer, Seller shall reimburse Buyer at Closing for any
franchise/application fees imposed by Franchisor on Buyer. Seller shall use best
efforts to promptly provide all information required by the Franchisor in
connection with the New Franchise Agreement, and Seller and Buyer shall
diligently pursue obtaining each the same.

ARTICLE 6
BROKERS

          Seller and Buyer each represents and warrants to the other that,
except for Hotel Assets Group, for whom Seller shall be solely responsible for
its compensation pursuant to a separate agreement between Seller and Hotel
Assets Group, it has not engaged any broker, finder or other

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party in connection with the transaction contemplated by this Contract. Buyer
and Sellers each agree to save and hold the other harmless from any and all
losses, damages, liabilities, costs and expenses (including, without limitation,
attorneys’ fees) involving claims made by any other agent, broker, or other
person by or through the acts of Buyer or Sellers, respectively, in connection
with this transaction.

ARTICLE 7
REPRESENTATIONS, WARRANTIES AND COVENANTS

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

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

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

                              (c) Bankruptcy. None of Seller, or, to Seller’s
knowledge, any of its or their partners or members, is insolvent or the subject
of any bankruptcy proceeding, receivership proceeding or other insolvency,
dissolution, reorganization or similar proceeding.

                              (d) Property Agreements. The assets constituting
the Property to be conveyed to Buyer hereunder shall constitute all of the
property and assets to be used in connection with the operation and business of
the Hotel. There are no, and as of the Closing there shall be no, leases,
license agreements, leasing agent’s agreements, equipment leases, building
service agreements, maintenance contracts, suppliers contracts, warranty
contracts, operating agreements, or other agreements (i) to which Seller is a
party or an assignee, or (ii) binding upon the Property, relating to the
ownership, occupancy, operation, management or maintenance of the Real Property,
FF&E, Supplies or Tradenames, except for those Service Contracts, Leases,
Warranties and FF&E Leases to which Seller becomes a party with the approval of
Buyer or which Buyer may enter into before the Closing. As of the Closing, any
Service Contracts, Leases, Warranties and FF&E Leases to which Seller has become
a party with the approval of Buyer shall be in full force and effect, and no
default shall have occurred and be continuing thereunder and no circumstances
shall exist which, with the giving of notice, the lapse

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of time or both, would constitute such a default. No party has, and as of the
Closing no party shall have, any right or option to acquire the Property or any
portion thereof, other than Buyer.

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

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

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(“CERCLA”); (3) “toxic substances” as defined by the Toxic Substances Control
Act, as amended from time to time (“TSCA”), (4) “hazardous materials” as defined
by the Hazardous Materials Transportation Act, as amended from time to time
(“HMTA”), (5) asbestos, oil or other petroleum products, radioactive materials,
urea formaldehyde foam insulation, radon gas and transformers or other equipment
that contains dielectric fluid containing polychlorinated biphenyls and (6) any
substance whose presence is detrimental or hazardous to health or the
environment, including, without limitation, microbial or fungal matter or mold,
or is otherwise regulated by federal, state and local environmental laws
(including, without limitation, RCRA, CERCLA, TSCA, HMTA), rules, regulations
and orders, regulating, relating to or imposing liability or standards of
conduct concerning any Hazardous Materials or environmental, health or safety
compliance (collectively, “Environmental Requirements”). As used in this
Contract: “Release” means spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or disposing.

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

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

                              (i) Licenses, Permits and Approvals. Seller has
not received any written notice, and Seller has no knowledge that the Property
fails to materially comply with all applicable licenses, permits and approvals
and federal, state or local statutes, laws, ordinances, rules, regulations,
requirements and codes including, without limitation, those regarding zoning,
land use, building fire, health, safety, environmental, subdivision, water
quality, sanitation controls and the Americans with Disabilities Act, and
similar rules and regulations relating and/or applicable to the ownership, use
and operation of the Property as it is now operated. Seller has received or
will, prior to Closing receive, all licenses, permits and approvals required or
needed for the lawful conduct, occupancy and operation of the business of the
Hotel, and each license and permit is or will be in full force and effect, and
will be received and in full force and effect as of the Closing. Subject to
Section 8.10 below, no licenses, permits or approvals necessary for the lawful
conduct, occupancy or operation of the business of the Hotel, to Seller’s
knowledge requires any approval of a governmental authority for transfer of the
Property.

                              (j) Financial Statements. Seller has delivered
copies for the two (2) years prior and the current year to date, of any (i)
Financial Statements for the Hotel, (ii) operating statements prepared by the
Existing Manager for the Hotel, and (iii) monthly financial statements prepared
by the Existing Manager for the Hotel, if applicable (“Audits”). Each of such
statements, if available, is to Seller’s knowledge, complete and accurate in all
material

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respects and, except in the case of budgets prepared in advance of the
applicable operating period to which such budgets relate, fairly presents the
results of operations of the Hotel for the respective periods represented
thereby. Seller has relied upon the Financial Statements and Audits in
connection with its ownership and operation of the Hotel, and there are no other
independent audits or financial statements prepared by third parties relating to
the operation of the Hotel other than the Financial Statements and Audits
prepared by or on behalf of the Existing Manager, all of which have been
provided to Buyer.

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

                              (l) Operations. The Hotel has at all times been
operated by Existing Manager in accordance with all applicable laws, rules,
regulations, ordinances and codes.

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

                              (n) Architect and Contractor. The Franchisor has
approved the Architect to design the Hotel and the Contractor to serve as the
general contractor for the construction of the Hotel.

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

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

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performance by Buyer of this Contract, and this Contract is hereby binding and
enforceable against Buyer.

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

          7.3 Survival. All of the representations and warranties are true,
correct and complete in all material respects as of the date hereof and the
statements set forth therein (without qualification or limitation as to a
party’s knowledge thereof except as expressly provided for in this Article VII)
shall be true, correct and complete in all material respects as of the Closing
Date. All of the representations and warranties made herein shall survive
Closing for a period of one (1) year and shall not be deemed to merge into or be
waived by any Seller’s Deed or any other closing documents.

ARTICLE 8
ADDITIONAL COVENANTS

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

          8.2 Construction of Hotel. Subject to the terms and conditions of this
Contract, Seller shall (i) construct the Hotel on the Land (a) in a good,
workmanlike and diligent manner, (b) in accordance with development standards
for comparable projects, (c) in compliance in all material respects with the
Plans and Specifications approved by Franchisor and with all Legal Requirements
and (d) in accordance with all requirements of the Franchise Agreement and (ii)
cause the Hotel to be fully equipped with the FF&E and otherwise fully furnished
and stocked with merchandise, supplies, inventory and other Personal Property as
required by the Franchise Agreement, including, without limitation, linens, bath
towels and other supplies at least at a 2-par level for all suites or rooms of
the Hotel, in each case such that the Hotel can be opened for business to the
public and operated to full capacity under the Brand. All expenses of
constructing, equipping and furnishing the Hotel in accordance with this
Contract shall be the sole responsibility of Seller, and Buyer shall have no
obligation whatsoever to adjust the Purchase Price or pay any additional costs
as a result of unforeseen events or circumstances affecting the cost of
constructing, equipping or furnishing the Hotel.

          8.3 Plans and Specifications. Seller represents and warrants to Buyer
that (i) the plans and specifications that Seller has delivered to Buyer for its
review before the date of this Contract and/or during the Review Period are and
shall be a true and complete copy of the plans and specifications for the
construction of the Hotel, (ii) such plans and specifications have not been
amended or supplemented in any material respect and (iii) such plans and
specifications have been prepared by or otherwise approved by the Franchisor.
Seller shall obtain the approval of the Franchisor and Buyer with respect to all
material changes to such plans and specifications after the date hereof. Such
plans and specifications and all revisions thereto, as approved by the

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the Franchisor and Buyer, shall constitute the “Plans and Specifications” for
purposes of this Contract.

          8.4 Commencement of Construction; Substantial Completion. Upon the
closing of Seller’s construction financing, Seller and Buyer shall determine the
commencement date for construction of the Hotel (the “Construction Commencement
Date”) which Construction Commencement Date shall be not later than thirty (30)
days after Seller’s construction financing closing. Seller and Buyer shall
document the Construction Commencement Date by executing a Construction
Commencement Certificate and such Construction Commencement Certificate shall be
attached to and its terms shall be incorporated into this Agreement. Seller
shall thereafter diligently pursue construction of the Hotel in accordance with
this Contract and shall cause the Contractor to Substantially Complete the Hotel
no later than twenty-four (24) months after the Construction Commencement Date
(the “Scheduled Completion Date”), subject only to delays caused by Force
Majeure. Seller shall promptly notify Buyer of each event or condition of Force
Majeure and the anticipated delay caused thereby. Notwithstanding anything
contained in this Contract to the contrary, including, without limitation,
Section 14.2 below (unless Seller’s breach results in a delay in the
construction of the Hotel), in the event of any delay of the Substantial
Completion Date beyond the Scheduled Completion Date (other than resulting from
Force Majeure of which Seller previously notified Buyer), Seller shall pay Buyer
delay damages in the amount of $20,000.00 for each full week (which amount shall
be prorated for periods shorter than one week) following the Scheduled
Completion Date until the Hotel is Substantially Complete.

          8.5 Inspections. Buyer shall have the right to inspect the Property to
monitor and observe the development and construction of the Hotel. All such
inspections shall require reasonable prior notice to Seller and shall be
conducted in a manner that will minimize any interference with the development
and construction of the Hotel. Buyer shall indemnify, defend and hold Seller
harmless from and against any and all expenses, costs and liabilities (including
but not limited to reasonable attorneys’ fees) for damage or injury to persons
or property arising out of or relating to its entry onto the Land for any such
inspections.

          8.6 Punch List. Upon notification from the Contractor that the Hotel
is Substantially Completed and ready for inspection, Seller shall prepare a
“punch list” with the assistance of the Architect and the Franchisor. Seller
acknowledges that final acceptance of the work on the Hotel shall be made only
with the approval of Buyer and the Franchisor. The costs of completing the Punch
List Items that are not completed as of the date of Closing, as reasonably
estimated by the Seller with the approval of Buyer, such approval not to be
unreasonably withheld, plus twenty-five percent (25%) of such costs, shall be
retained by the Title Company from the Purchase Price and shall be disbursed to
Seller only upon Buyer’s reasonable determination that all of the Punch List
Items have been satisfactorily completed. Seller shall correct or complete all
Punch List Items, or cause the same to be corrected or completed, at Seller’s
expense, with all diligence and in any event within sixty (60) days after
Substantial Completion of the Hotel; provided, however, if such Punch List Items
can not reasonably be completed within such sixty (60) day period, and Seller is
diligently pursuing completion of such Punch List Items during such sixty (60)
day period, then Seller shall have an additional thirty (30) day period to
complete the Punch List Items.

          8.7 Pre-Opening Program. It is contemplated that certain activities
must be undertaken prior to the Closing Date so that the Hotel can function in
an orderly and businesslike manner at the

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Effective Time (“Pre-Opening Program”), which Pre-Opening Program shall be
developed by Buyer and Buyer’s proposed manager. Seller shall cooperate in good
faith with and be responsible for the costs of the Pre-Opening Program and shall
provide the Franchisor and Buyer reasonable access to the Property at least
sixty (60) days in advance of the Closing in order to conduct their activities
related to the Pre-Opening Program; provided that the Pre-Opening Program shall
not be permitted to interfere with or delay the activities of Seller in
completing the Hotel. Seller shall pay in a timely manner all costs associated
with the Pre-Opening Program or otherwise related to the pre-opening operations
of the Property up to but not including the Effective Time, regardless of when
such costs are payable (the “Pre-Opening Costs”).

          The Pre-Opening Program shall consist of the following:

                    a) Completion of Marriott Database not less than ninety (90)
days prior to the Effective Time;

                    b) Completion of website;

                    c) Fully staff Hotel team;

                    d) Completion of Request For Proposal based on availability
for following year; and

                    e) Order all supplies to open Hotel.

          8.8 Construction Warranty. At the Closing, Seller shall assign to
Buyer all construction warranties with respect to the Hotel, which assignment
shall be in form and substance reasonably satisfactory to Buyer, including a
warranty by the Contractor, for the period ending not sooner than one (1) year
after the date the Hotel is Substantially Completed, in the form of the warranty
attached hereto as Exhibit H (the “Construction Warranty”).

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

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

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

                              (c) Pay or cause to be paid all taxes, assessments
and other impositions levied or assessed on the Property or any part thereof
prior to the delinquency date,

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and comply with all federal, state, and municipal laws, ordinances, regulations
and orders relating to the Property;

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

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

                              (f) Seller shall not, without first obtaining the
written approval of Buyer, which approval shall not be unreasonably withheld,
enter into any FF&E Leases, Service Contracts, Leases or other contracts or
agreements related to the Hotel, or extend any existing such agreements, unless
such agreements (x) can be terminated, without penalty, upon thirty (30) days’
prior notice or (y) will expire prior to the Closing Date.

          8.10 Third Party Consents. Prior to the Closing Date, Seller shall, at
its expense, (i) obtain any and all third party consents and approvals (x)
required in order to transfer the Hotel to Buyer, or (y) which, if not obtained,
would materially adversely affect the operation of the Hotel and (ii) use best
efforts to obtain all other third party consents and approvals (all of such
consents and approvals in (i) and (ii) above being referred to collectively as,
the “Third Party Consents”).

          8.11 Access to Financial Information. Buyer’s representatives shall
have access to, and Seller and its affiliates shall cooperate with Buyer and
furnish upon request, all financial and other information relating to the
Hotel’s operations to the extent available and necessary to enable Buyer’s
representatives to prepare audited financial statements in conformity with
Regulation S-X of the Securities and Exchange Commission (the “SEC”) and other
applicable rules and regulations of the SEC and to enable them to prepare a
registration statement, report or disclosure statement for filing with the SEC
on behalf of Buyer or its Affiliates, whether before or after Closing and
regardless of whether such information is included in the Records to be
transferred to Buyer hereunder. Seller shall also provide to Buyer’s
representative a signed representation letter in form and substance reasonably
acceptable to Seller sufficient to enable an independent public accountant to
render an opinion on the financial statements related to the Hotel. Buyer will
reimburse Seller for costs reasonably incurred by Seller to comply with the
requirements of the preceding sentence to the extent that Seller is required to
incur costs not in the ordinary course of business for third parties to provide
such representation letter. The provisions of this Section shall survive Closing
or termination of this Contract.

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

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

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

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

                                        (ii) the material breach of any
representation, warranty, covenant or agreement of Seller contained in this
Contract, except to the extent that Buyer had actual knowledge of such material
breach prior to Closing.

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

                                        (iv) any claim made or asserted by an
employee of Seller arising out of Seller’s decision to sell the Property; and

                                        (v) the conduct and operation by or on
behalf of Seller of the Hotel or the ownership, use or operation of the Property
prior to Closing.

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

                                        (i) the material breach of any
representation, warranty, covenant or agreement of Buyer contained in this
Contract; except to the extent Seller had actual knowledge of such material
breach prior to Closing;

                                        (ii) the conduct and operation by Buyer
of its business at the Hotel after the Closing; and

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

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

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                                        (i) The party seeking indemnification
(the “Indemnified Party”) shall give prompt written notice to the party or
parties from which it is seeking indemnification (the “Indemnifying Party”) of
any assertion of liability by a third party which might give rise to a claim for
indemnification based on the foregoing provisions of this Section 8.13, which
notice shall state the nature and basis of the assertion and the amount thereof,
to the extent known; provided, however, that no delay on the part of the
Indemnified Party in giving notice shall relieve the Indemnifying Party of any
obligation to indemnify unless (and then solely to the extent that) the
Indemnifying Party is prejudiced by such delay.

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

                                        (iii) Notwithstanding the provisions of
the previous subsection of this Contract, until the Indemnifying Party shall
have assumed the defense of the Legal Action, the defense shall be handled by
the Indemnified Party. Furthermore, (x) if the Indemnified Party shall have
reasonably concluded that there are likely to be defenses available to it that
are different from or in addition to those available to the Indemnifying Party;
(y) if the Legal Action involves other than money damages and seeks injunctive
or other equitable relief; or (z) if a judgment against Buyer, as the
Indemnified Party, in the Legal Action will, in the good faith opinion of Buyer,
establish a custom or precedent which will be adverse to the best interest of
the continuing business of the Hotel, the Indemnifying Party, shall not be
entitled to assume the defense of the Legal Action and the defense shall be
handled by the Indemnified Party, provided that, in the case of clause (z), the
Indemnifying Party shall have the right to approve legal counsel selected by the
Indemnified Party, such approval not to be unreasonably withheld, delayed or
conditioned. If the defense of the Legal Action is handled by the Indemnified
Party under the provisions of this subsection, the Indemnifying Party shall pay
all legal and other expenses reasonably incurred by the Indemnified Party in
conducting such defense.

                                        (iv) In any Legal Action initiated by a
third party and defended by the Indemnified Party (w) the Indemnified Party
shall have the right to be represented by advisory counsel and accountants, at
its own expense, (x) the Indemnifying Party shall keep the Indemnified Party
fully informed as to the status of such Legal Action at all stages thereof,
whether or not the Indemnified Party is represented by its own counsel, (y) the
Indemnifying Party shall make available to the Indemnified Party and its
attorneys, accounts and other

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representatives, all books and records of Seller relating to such Legal Action
and (z) the parties shall render to each other such assistance as may be
reasonably required in order to ensure the proper and adequate defense of such
Legal Action.

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

          8.14 Escrow Funds. To provide for the timely payment of any
post-closing claims by Buyer against Seller hereunder, at Closing, the Seller
shall deposit an amount equal to Three Hundred Thousand and No/100 Dollars
($300,000.00) (the “Escrow Funds”) shall be withheld from the Purchase Price
payable to a Seller and shall be deposited for a period of nine (9) months in an
escrow account with the Title Company pursuant to an escrow agreement reasonably
satisfactory in form and substance to Buyer and Seller (the “Post-Closing
Agreement”), which escrow and Post-Closing Agreement shall be established and
entered into at Closing and shall be a condition to Buyer’s obligations under
this Contract. If no claims have been asserted by Buyer against Seller, or all
such claims have been satisfied, within such nine month period, the Escrow Funds
deposited by the Seller shall be released to the Seller.

          8.15 Liquor License. If required by the Franchisor, the Manager or an
Affiliate thereof approved by Buyer, shall have or shall have obtained all
liquor licenses and alcoholic beverage licenses or banquet licenses, as
appropriate and necessary or desirable to operate any restaurants, bars and
lounges to be located within the Hotel (collectively, the “Liquor Licenses”)
and, in the case of an Affiliate of the Manager, the Hotel shall have the right
to use such Liquor License, (ii) if permitted under the laws of the jurisdiction
in which the Hotel is located, to the extent practicable the Manager shall
execute and file any and all necessary forms, applications and other documents
(and Seller and Buyer shall cooperate with the Manager in filing such forms,
applications and other documents) with the appropriate liquor and alcoholic
beverage authorities prior to Closing so that the Liquor Licenses remain in full
force and effect upon completion of Closing.

          8.16 Mechanics’ Lien Protection. As further inducement for Buyer’s
entering into this Contract and as a condition to Buyer’s obligation to close
hereunder, Seller shall provide all information necessary for the Title Company
to issue to Buyer at Closing a title policy that affirmatively insures Buyer
against materialmen, mechanics, contractors and vendor liens, including, but not
limited to, a list of all vendors and contractors providing goods and services
in connection with the construction of the Hotel, a list of all amounts paid and
amounts due such vendors and contractors, lien waivers from the General
Contractor and all subcontractors and indemnity agreements as may be required by
the Title Company.

ARTICLE 9
CONDITIONS FOR CLOSING

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

                              (a) All of Seller’s representations and warranties
contained in or made pursuant to this Contract shall be true and correct in all
material respects as if made again on the Closing Date; provided, however, in
the event Buyer has actual knowledge of any inaccuracy of Seller’s
representations and warranties in any material respect prior to the end of the
Review Period and Buyer does not object to such inaccuracy prior to the end of
the Review Period, then Buyer shall be deemed to have waived its right to
declare this Contract terminated as a result of such inaccuracy.

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

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

                              (d) All Liquor Licenses shall be in full force and
effect and shall remain in full force and effect following the Closing and shall
have been or shall be transferred to, or new Liquor Licenses shall be issued to,
Manager or an Affiliate thereof approved by Buyer at or as of Closing, and Buyer
shall have received satisfactory evidence thereof. If necessary, the Existing
Manager shall remain in a temporary and limited capacity until the Liquor
License can be transferred, or a new Liquor License can be issued to the Manager
or an Affiliate.

                              (e) Third Party Consents in form and substance
satisfactory to Buyer shall have been obtained and furnished to Buyer.

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

                              (g) The Hotel shall be Substantially Completed.

                              (h) The Existing Management Agreement and the
Existing Franchise Agreement shall have been terminated.

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                              (i) The Franchisor shall have executed and
delivered the Franchise Agreement upon terms and conditions acceptable to Buyer
in its sole and absolute discretion; provided, however, such contingency is
conditioned upon Buyer providing Seller with evidence of Buyer’s submission of a
franchise application to Franchisor not later than ninety (90) days prior to
Closing.

                              (j) Buyer shall have obtained an as-built plat of
survey of the Property completed, dated within 30 days of the Closing Date and
prepared in compliance with the then-current ALTA/ACSM standards for urban
properties, and such plat of survey shall not disclose any encroachments,
boundary line discrepancies or other survey matters that, in Buyer’s reasonable
judgment, would materially adversely affect the use, operation of value of the
Property.

                              (k) Buyer shall have obtained an ALTA owner’s
title insurance policy (or, if an ALTA form of policy is not customarily issued
in the state in which the Real Property is located, in the form customarily
issued in such state), issued by the Title Company pursuant to the Title
Commitment, insuring Buyer’s fee simple ownership in the Real Property (i) with
an effective date as of the Closing Date, (ii) with no exceptions for filed or
unfiled mechanics’ and materialmen’s liens, (iii) with no exceptions for
encroachments or other matters of survey unless approved by Buyer and (iv) with
no other exceptions to title other than the Permitted Exceptions.

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

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

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

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

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                              (d) Within sixty (60) days after the date of this
Contract, Seller shall have received a commitment for financing of the
construction of the Hotel, which commitment shall be acceptable to Seller in its
sole but reasonable discretion. In the event this condition is not satisfied,
either Seller or Buyer may terminate this Contract, or with written notice to
Buyer, Seller may extend such sixty (60) day period by an additional thirty (30)
day period for purposes of obtaining such a commitment. Seller shall provide
Buyer with written notice on or before the expiration of such 60-day period
indicating whether Buyer has obtained such commitment for financing.

ARTICLE 10
CLOSING AND CONVEYANCE

          10.1 Closing. Unless otherwise agreed by Buyer and Seller, the Closing
on the Property shall occur on the date on which the Hotel opens for business to
the public in accordance with the Franchise Agreement, or as soon as practical
thereafter, but in no event later than fifteen (15) business days after
Substantial Completion of the Hotel, provided that all conditions to Closing by
Buyer hereunder have been satisfied. Buyer will provide Seller at least five (5)
days prior written notice of the Closing Date selected by Buyer. The date on
which the Closing is to occur as provided in this Section 10.1, or such other
date as may be agreed upon by Buyer and Seller, is referred to in this Contract
as the “Closing Date” for the Property. The Closing shall be held at 10:00 a.m.
at the offices of the Title Company, or as otherwise determined by Buyer and
Seller. Regardless of the Closing Date, the Closing shall be effective as of
12:01 a.m. on the date which is the later of (i) the Substantial Completion Date
or (ii) the date on which the Hotel opens for business to the public in
accordance with the Franchise Agreement (the “Effective Time”).

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

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

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

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

                              (d) General Assignments. Assignments of all of
Seller’s right, title and interest in and to all FF&E Leases, Service Contracts
and Leases identified on Exhibit C hereto (the “Hotel Contracts”). The
assignment shall also be a general assignment and shall

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provide for the assignment of all of Seller’s right, title and interest in all
Records, Warranties, Licenses, Tradenames, Contracts, Plans and Specs and all
other intangible Personal Property applicable to the Hotel.

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

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

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

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

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

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

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

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

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

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

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

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

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

ARTICLE 11
COSTS

          All Closing costs shall be paid as set forth below:

          11.1 Seller’s Costs. In connection with the sale of the Property
contemplated under this Contract, Seller shall be responsible for all transfer
and recordation taxes, including, without limitation, all transfer, sales, use
and bulk transfer taxes or like taxes on or in connection with the transfer of
the Real Property and the Personal Property constituting part of the Property
pursuant to the Bill of Sale, in each case except as otherwise provided in
Section 12, and all accrued taxes of Seller prior to Closing and income, sales
and use taxes and other such taxes of Seller attributable to the sale of the
Property to Buyer. Seller shall be responsible for all costs related to the
termination of any existing management agreement and the Existing Franchise
Agreement as provided in Article V. Seller shall also be responsible for any
fees for the performance of the property improvement plan review and report by
the Franchisor, as well as costs and expenses of its attorneys, accountants,
appraisers and other professionals, consultants and representatives. Seller
shall also be responsible for payment of all prepayment penalties and other
amounts payable in connection with the pay-off of any liens and/or indebtedness
encumbering the Property. Seller shall also be responsible for all Pre-Opening
Costs to the extent provided in Section 8.7. Seller shall pay the sales/use
taxes attributed to the transfer of the personal property.

          11.2 Buyer’s Costs. In connection with the purchase of the Property
contemplated under this Contract, Buyer shall be responsible for the costs and
expenses of its attorneys, accountants and other professionals, consultants and
representatives. Buyer shall also be responsible for the costs and expenses in
connection with the preparation of any environmental report, any update to the
survey and the costs and expenses of preparation of the title insurance

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commitment and the issuance of the title insurance policy contemplated by
Article IV and the per page recording charges for the Deed (if applicable).

ARTICLE 12
ADJUSTMENTS

          12.1 Adjustments. Unless otherwise provided herein, at Closing,
adjustments between the parties of the income and expenses related to the
Property shall be made as of the Effective Time, all as set forth below. All of
such adjustments and allocations shall be made in cash at Closing and shall be
collected through and/or adjusted in accordance with the terms of the Existing
Management Agreement. Except as otherwise expressly provided herein, all
apportionments and adjustments shall be made on an accrual basis in accordance
with generally accepted accounting principles.

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

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

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

                              (d) Accounts. Petty cash, cash in cash registers
and cash in vending machines but excluding amounts held in tax and insurance
escrow accounts and utility deposits (to the extent excluded from the definition
of Deposits) held by or on behalf of Seller, the Manager or the Franchisor with
respect to the Hotel shall become the property of Buyer at Closing without Buyer
being required to fund the same.

                              (e) Advance Deposits, etc. All income generated by
the Hotel, including receipts from pre-paid guest room or suite rentals, all
prepaid rentals, room rental deposits, and all other deposits for advance
registration, banquets or services, if paid during the period before the
Effective Time and applicable to the period after the Effective Time, shall be
credited to Buyer.

                              (f) Other Costs. All other costs attributable to
the period before the Effective Time, including the cost of property and
liability insurance and all Pre-Opening Costs,

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shall be allocated to Seller (subject to the limitations provided in Section
8.7), and all costs attributable to the period after the Effective Time shall be
allocated to Buyer.

          12.2 Reconciliation and Final Payment. Seller and Buyer shall
reasonably cooperate after Closing to make a final determination of the
allocations and prorations required under this Contract within one hundred
eighty (180) days after the Closing Date. Upon the final reconciliation of the
allocations and prorations under this Section, the party which owes the other
party any sums hereunder shall pay such party such sums within ten (10) days
after the reconciliation of such sums. The obligations to calculate such
prorations, make such reconciliations and pay any such sums shall survive the
Closing.

          12.3 Employees. Unless Buyer or the Manager expressly agrees
otherwise, none of the employees of the Hotel shall become employees of Buyer,
as of the Closing Date; instead, if Manager so elects, such employees shall
become employees of the Manager or an affiliate of Manager. Seller shall not
give notice under any applicable federal or state plant closing or similar act,
including, if applicable, the Worker Adjustment and Retraining Notification
Provisions of 29 U.S.C., Section 2102, the parties having agreed that a mass
layoff, as that term is defined in 29 U.S.C., 2101(a)(3), will not have
occurred. Any liability for payment of all wages, salaries and benefits,
including, without limitation, accrued vacation pay, sick leave, bonuses,
pension benefits, COBRA rights, and other benefits accrued or earned by and due
to employees at the Hotel through the Effective Time, together with F.I.C.A.,
unemployment and other taxes and benefits due with respect to such employees for
such period, shall be charged to Seller, in accordance with the Existing
Management Agreement, for the purposes of the adjustments to be made as of the
Effective Time. All liability for wages, salaries and benefits of the employees
accruing in respect of and attributable to the period from and after Closing
shall be charged to Buyer, in accordance with the Management Agreement. To the
extent applicable, all such allocations and charges shall be adjusted in
accordance with the provisions of the any existing management agreement.

ARTICLE 13
CASUALTY AND CONDEMNATION

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

          13.2 Buyer’s Termination Right. If, prior to Closing and the delivery
of possession of the Property to Buyer in accordance with this Contract, (a) any
condemnation proceeding shall be pending against a substantial portion of the
Hotel or (b) there is any substantial casualty loss

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or damage to the Hotel, Buyer shall have the option to terminate this Contract,
provided Buyer delivers written notice to Seller of its election within twenty
(20) days after the date Seller has delivered Buyer written notice of any such
loss, damage or condemnation as provided above, and in such event, the Earnest
Money Deposit, and any interest thereon, shall be delivered to Buyer and
thereafter, except as expressly set forth herein, no party shall have any
further obligation or liability to the other under this Contract. In the context
of condemnation, “substantial” shall mean condemnation of such portion of the
Hotel (or access thereto) as could, in Buyer’s reasonable judgment, render use
of the remainder impractical or unfeasible for the uses herein contemplated,
and, in the context of casualty loss or damage, “substantial” shall mean a loss
or damage in excess of Two Hundred Fifty Thousand and No/100 Dollars
($250,000.00) in value.

          13.3 Procedure for Closing. If Buyer shall not timely elect to
terminate this Contract under Section 13.2 above, or if the loss, damage or
condemnation is not substantial, Seller agrees to pay to Buyer at the Closing
all insurance proceeds or condemnation awards which Seller has received as a
result of the same, plus an amount equal to the insurance deductible, and assign
to Buyer all insurance proceeds and condemnation awards payable as a result of
the same, in which event the Closing shall occur without Seller replacing or
repairing such damage. In the case of damage or casualty, at Buyer’s election,
Seller shall repair and restore the Property to its condition immediately prior
to such damage or casualty and shall assign to Buyer all excess insurance
proceeds.

ARTICLE 14
DEFAULT REMEDIES

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

          14.2 Seller Default. If Seller defaults under this Contract, and such
default continues for thirty (30) days following written notice from Buyer,
Buyer may elect, as Buyer’s sole and exclusive remedy, either (i) to terminate
this Contract by written notice to Seller delivered to Seller at any time prior
to the completion of such cure, in which event the Earnest Money Deposit,
including any interest thereon, shall be returned to the Buyer, Seller shall
reimburse Buyer for its out of pocket due diligence costs (not to exceed
$55,000) and thereafter both the Buyer and Seller shall thereupon be released
from all obligations with respect to this Contract, except as otherwise
expressly provided herein; or (ii) to treat this Contract as being in full force
and effect by written notice to Seller delivered to Seller at any time prior to
the completion of such cure, in which event the Buyer shall have the right to an
action against Seller for specific performance.

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

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in enforcing such rights, then the defaulting party shall reimburse the
non-defaulting party for the non-defaulting party’s reasonable attorneys’ fees,
costs and expenses.

ARTICLE 15
NOTICES

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

 

 

 

 

If to Buyer:

Apple Ten Hospitality Ownership, Inc.
814 E. Main Street
Richmond, Virginia 23219
Attention: Nelson Knight
Fax No.: (804) 344-8129
Email: nknight@applereit.com

 

 

 

 

with a copy to:

Apple REIT Ten, Inc.
814 E. Main Street
Richmond, Virginia 23219
Attention: Legal Dept.
Fax No.: (804) 344-8129
Email: dbuckley@applereit.com

 

 

 

 

If to Seller:

Grapevine Equity Partners, LLC
1135 Kinwest Parkway, Ste. 150
Irving, Texas 75063
Attention: Mehul Patel
Fax No. (214) 260-3724
Email: mike@sagestar.net

 

 

 

 

with a copy to:

Stites & Harbison, PLLC
400 West Market Street, Suite 1800
Louisville, KY 40202
Attention: Jamie L. Cox, Esq.
Fax No. (502) 779-8285
Email: jcox@stites.com

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

ARTICLE 16
MISCELLANEOUS

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

          16.2 Binding Effect; Assignment. This Contract shall be binding upon
and shall inure to the benefit of each of the parties hereto, their respective
successors and assigns.

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

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

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

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

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

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

          16.9 Severability. If any provision of this Contract shall, for any
reason, be adjudged by any court of competent jurisdiction to be invalid or
unenforceable, such judgment shall not

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affect, impair or invalidate the remainder of this Contract but shall be
confined in its operation to the provision or provisions hereof directly
involved in the controversy in which such judgment shall have been rendered, and
this Contract shall be construed as if such provision had never existed, unless
such construction would operate as an undue hardship on Seller or Buyer or would
constitute a substantial deviation from the general intent of the parties as
reflected in this Contract.

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

          16.11 (Intentionally Omitted).

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

          16.13 Joint and Several Obligations. If Seller consists of more than
one person or entity, each such person or entity shall be jointly and severally
liable with respect to the obligations of Seller under this Contract.

          16.14 Notice of Proposed Listing. In the event that the sale of the
Property contemplated by this Contract is consummated, if at any time during the
five (5) year period commencing on the date of execution of this Contract by
Buyer and Seller, Seller or any of its Affiliates propose to list for sale any
hotel property or properties owned, acquired, constructed or developed by
Sellers or their Affiliates and located within a ten (10)-mile radius of any
Hotel (any such other hotel property being referred to as an “Other Property”),
Sellers shall promptly deliver to Buyer written notice thereof and Buyer shall
have the right to see and participate in the offering and/or otherwise make an
offer to purchase any such Other Property.

[Signatures Begin on Following Page]

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

 

 

 

 

 

BUYER:

 

 

 

APPLE TEN HOSPITALITY OWNERSHIP, INC.,
a Virginia corporation

 

 

 

 

By:

/s/ David Buckley

 

 

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

 

 

Name: David Buckley

 

Title: Vice President

 

 

 

 

 

SELLER:

 

 

 

GRAPEVINE EQUITY PARTNERS, LLC,
a Texas limited liability company

 

 

 

 

By:

/s/ Mehul Patel

 

 

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

 

 

Name: Mehul Patel

 

Title: Member

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EXHIBIT “A”

LEGAL DESCRIPTION OF LAND

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EXHIBIT C

LIST OF HOTEL CONTRACTS

EXHIBIT C-1 - Seller’s Hotel Contracts

To be provided by Seller and approved by Buyer during the Review Period

EXHIBIT C-2 - Other Hotel Contracts

To be provided by Seller and approved by Buyer during the Review Period

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EXHIBIT D

CONSENTS AND APPROVALS

          A. Consents Under Hotel Contracts

To be provided by Seller and approved by Buyer during the Review Period

          B. Consents Under Other Contracts

To be provided by Seller and approved by Buyer during the Review Period

          C. Governmental Approvals and Consents

To be provided by Seller and approved by Buyer during the Review Period

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

EXHIBIT E

ENVIRONMENTAL REPORTS

To be provided by Seller and approved by Buyer during the Review Period

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

EXHIBIT F

CLAIMS OR LITIGATION PENDING

To be provided by Seller and approved by Buyer during the Review Period

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

EXHIBIT G

ESCROW AGREEMENT

          THIS ESCROW AGREEMENT (this “Agreement”) made the ___ day of _______,
2011 by and among GRAPEVINE EQUITY PARTNERS, LLC, a Texas limited liability
company (“Seller”), APPLE TEN HOSPITALITY OWNERSHIP, INC. a Virginia
corporation, or its assigns (“Buyer”), and CHICAGO TITLE COMPANY (“Escrow
Agent”).

R E C I T A L S

          WHEREAS, pursuant to the provisions of Section 2.5 of that certain
Purchase Contract dated November ___, 2011 (the “Contract”) between Seller and
Buyer (the “Parties”), the Parties have requested Escrow Agent to hold in escrow
in accordance with the provisions, upon the terms, and subject to the
conditions, of this Agreement, the Earnest Money Deposit as defined in the
Contract (the “Deposit”); and

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

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

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

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

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

                              B. If at any time after the expiration of the
Review Period, Buyer claims entitlement to all or any portion of the Deposit,
Buyer shall give written notice to Escrow Agent stating that Seller has
defaulted in the performance of its obligations under the Contract beyond the
applicable grace period, if any, or that Buyer is otherwise entitled to the
return of the Deposit or applicable portion thereof and shall direct Escrow
Agent to return the Deposit or applicable portion thereof to Buyer (the “Buyer’s
Notice”). Escrow Agent shall promptly deliver a copy of Buyer’s Notice to
Seller. Seller shall have three (3) business days after receipt of the copy of
Buyer’s Notice to deliver written notice to Escrow Agent and Buyer objecting to
the release of the Deposit or applicable portion thereof to Buyer (“Seller’s
Objection Notice”).

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If Escrow Agent does not receive a timely Seller’s Objection Notice, Escrow
Agent shall release the Deposit or applicable portion thereof to Buyer. If
Escrow Agent does receive a timely Seller’s Objection Notice, Escrow Agent shall
release the Deposit or applicable portion thereof only upon receipt of, and in
accordance with, written instructions signed by Seller and Buyer, or the final
order of a court of competent jurisdiction.

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

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

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

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

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

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satisfaction and, in the case of modification, unless such modification shall be
approved by Escrow Agent in writing.

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

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

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

 

 

 

 

(i)

If addressed to Seller, to:

 

 

 

 

 

Grapevine Equity Partners, LLC

 

 

1135 Kinwest Parkway, Suite 150

 

 

Irving, Texas 75063

 

 

Attention: Mehul Patel

 

 

Fax No. (214) 260-3724

 

 

Email: mike@sagestar.net

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          with a copy to:

 

 

 

 

Stites & Harbison, PLLC

 

 

400 West Market Street, Suite 1800

 

 

Louisville, KY 40202

 

 

Attention: Jamie L. Cox

 

 

Fax No. (502) 779-8285

 

 

Email: jcox@stites.com

 

 

 

 

 

 

(ii)

If addressed to Buyer, to:

 

 

 

 

 

 

 

Apple Ten Hospitality Ownership, Inc.

 

 

 

814 E. Main Street

 

 

 

Richmond, Virginia 23219

 

 

 

Attn: Nelson Knight

 

 

 

Fax No.: (804) 344-8129

 

 

 

Email: nknight@applereit.com

 

 

 

 

 

 

 

with a copy to:

 

 

 

 

 

Apple REIT Ten, Inc.

 

 

814 E. Main Street

 

 

Richmond, Virginia 23219

 

 

Attn: Legal Dept.

 

 

Fax No.: (804) 727-6349

 

 

Email: dbuckley@applereit.com

 

 

 

 

 

 

(iii)

If addressed to Escrow Agent, to:

 

 

 

 

 

 

 

Chicago Title Company

 

 

 

5501 LBJ Freeway, Ste. 200

 

 

 

Dallas, Texas 75240

 

 

 

Attn: Debby Moore

 

 

 

Fax No.: (214) 570-0210

 

 

 

Email: debby.moore@cttdallas.com

 

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

                    8. This Agreement may be executed in any number of
counterparts each of which shall be deemed an original and all of which,
together, shall constitute one and the same Agreement.

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

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          IN WITNESS WHEREOF the Parties have executed this Agreement as of the
day and year first above written.

 

 

 

 

 

 

 

SELLER:

 

 

 

GRAPEVINE EQUITY PARTNERS, LLC

 

 

By:

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Name:

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

 

 

Title:

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

 

 

 

 

 

 

 

 

BUYER:

 

 

 

APPLE TEN HOSPITALITY OWNERSHIP, INC.

 

 

By:

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

 

 

Name:

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

 

 

Title:

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

 

 

 

 

 

 

 

 

ESCROW AGENT:

 

 

 

 

 

 

 

CHICAGO TITLE COMPANY

 

 

 

 

 

 

 

By:

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Name:

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Title:

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EXHIBIT H

CONSTRUCTION WARRANTY

          The Contractor hereby warrants to Seller and Buyer that all materials
and equipment furnished with respect to the Property are new and the work
performed by the Contractor with respect to the Property is of good and
workmanlike quality, free from faults and defects, and in conformance with all
contract documents. Work not conforming to these requirements, including
substitutions not properly approved and authorized, may be considered defective.
The foregoing warranty excludes remedy for damage or defect caused by abuse,
modifications not executed by the Contractor, improper or insufficient
maintenance, improper operation, or normal wear and tear and normal usage. If
required by Seller or Buyer, the Contractor shall furnish satisfactory evidence
as to the kind and quality of materials and equipment.

          The Contractor hereby guarantees to Seller and Buyer all work
performed and materials and equipment furnished with respect to the Property
against defects in materials and workmanship for a period of one year from the
date of substantial completion of the entire Property, or for a longer period if
so specified in the contract documents.

          The Contractor shall, within a reasonable time after receipt of
written notice thereof, and without reimbursement under the construction
contract, make good any defects in materials, equipment and workmanship which
may develop within periods for which said material, equipment and workmanship
are guaranteed and make good any damage to other work caused by the repairing of
such defects.

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