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                                                                  EXECUTION COPY

                                                                   Exhibit 10.35

                               PURCHASE AGREEMENT

                                     BETWEEN

                               BRENTWOOD BWI, LLC,

                                   AS SELLER,

                                       AND

                           HIGHLAND HOSPITALITY, L.P.,

                                  AS PURCHASER

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Definitions: The following capitalized terms used in this Agreement are defined
in the sections indicated below:


Accountants                                                Section 13.7
Additional Deposit                                         Section 2.3
Agreement                                                  Introduction
Apportionment Date                                         Section 13.1
Bill of Sale                                               Section 9.2
Closing                                                    Section 5.1
Closing Date                                               Section 5.1
Contracts                                                  Section 1.3
Contract Date                                              Introduction
Current Ledger                                             Section 13.3
Deed                                                       Section 9.1
Deposit                                                    Section 2.3
Due Diligence Period                                       Section 6.5
Environmental Laws                                         Section 3.7
Equipment Leases                                           Section 1.3
Escrow Agent                                               Section 2.1
Escrow Instructions                                        Section 2.3
Existing Manager                                           Section 3.6
Existing Management Agreement                              Section 3.6
Extension Deposit                                          Section 5.1
Extension Fee                                              Section 5.1
Extension Notice                                           Section 5.1
FF&E                                                       Section 1.2
Fixed Asset Supplies                                       Section 1.2
Franchise Agreement                                        Section 3.6
Franchisor                                                 Section 3.6
Front Desk Closing Hour                                    Section 13.3
Hazardous Substances                                       Section 3.7
Hotel                                                      Section 1.1
Improvements                                               Section 1.1
Initial Deposit                                            Section 2.3
Inventories                                                Section 1.2
Land                                                       Section 1.1
Permits                                                    Section 3.14
Permitted Exceptions                                       Section 6.2(b)
Personal Property                                          Section 1.2
Property                                                   Section 1.2
Purchase Price                                             Section 2.1
Purchaser                                                  Introduction
Purchaser Indemnitees                                      Section 11.3
Scheduled Closing Date                                     Section 5.1
Seller                                                     Introduction
Seller Knowledge Individual                                Section 3.22


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Space Leases                                               Section 1.3
Survey                                                     Section 6.3
Termination Notice                                         Section 6.5(b)
Title Commitment                                           Section 6.2(a)
Title Company                                              Section 6.2(a)
Uniform System of Accounts                                 Section 1.2
WARN Act                                                   Section 7.8

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                               PURCHASE AGREEMENT

         THIS PURCHASE AGREEMENT (this "Agreement") is entered into this 17th
day of November, 2003 (the "Contract Date") by and between BRENTWOOD BWI, LLC, a
Virginia limited liability company ("Seller"), and HIGHLAND HOSPITALITY, L.P., a
Delaware limited partnership ("Purchaser").

                                    ARTICLE I
                                      Sale

         Subject to the terms and conditions set forth in this Agreement, Seller
agrees to sell and convey to Purchaser, and Purchaser agrees to buy and assume
from Seller:

         1.1 Property. All of Seller's right, title and interest in and to that
certain parcel of land more particularly described in Exhibit A attached hereto
(collectively, the "Land"), situated in Lithicum, Maryland, including all right,
title and interest of Seller, if any, in and to the land lying in the bed of any
street or highway in front of or adjoining the Land to the center line thereof,
all water and mineral rights, development rights and all easements, rights and
other interests appurtenant thereto, and all buildings located on the Land (the
"Improvements"). The Land, and the Improvements located thereon are sometimes
referred to hereinafter together as the "Hotel."

         1.2 Personal Property. The following personalty to the extent owned by
Seller (collectively the "Personal Property"): (a) all furniture, furnishings,
fixtures, vehicles, rugs, mats, carpeting, appliances, devices, engines,
telephone and other communications equipment, televisions and other video
equipment, plumbing fixtures and other equipment located in the Hotel (the
"FF&E"), (b) all items included within the definition of "Property and
Equipment" under the Uniform System of Accounts for the Lodging Industry, Ninth
Revised Edition, as published by the Hotel Association of New York City, Inc.
(the "Uniform System of Accounts") and used in the operation of the Hotel, if
any, including, without limitation, linen, china, glassware, tableware, uniforms
and similar items (the "Fixed Asset Supplies"); (c) all "Inventories" as defined
in the Uniform System of Accounts and used in the operation of the Hotel, if
any, such as provisions in storerooms, refrigerators, pantries, and kitchens,
unopened beverages in wine cellars and bars, other merchandise intended for sale
or resale, fuel, mechanical supplies, stationery, guest supplies, maintenance
and housekeeping supplies and other expensed supplies and similar items (the
"Inventories"); (d) to the extent in Seller's possession or control, all
surveys, architectural, consulting and engineering blueprints, plans and
specifications and reports, if any, related to the Hotel, all books and records,
if any, related to the Hotel (which shall not include the tax or corporate
records of the Seller), and any goodwill of Seller related to the Hotel and (e)
any and all other items of personalty owned by Seller and located at the Hotel
(excluding any and all FF&E reserves relating to the Property).

       1.3 Contracts and Leases. All rights of Seller, to the extent
transferable, under all written service, maintenance, licensing, concession, and
other contracts or agreements related to


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the maintenance, ownership, use, possession or operation of the Personal
Property or the Hotel, other than the Existing Management Agreement (the
"Contracts"), all written leases of personal property located at, or used in the
operation of the Hotel (the "Equipment Leases") to which Seller or Existing
Manager is a party and, if any, all leases, subleases and other occupancy
agreements, which provide for the use or occupancy of space or facilities on or
relating to the Hotel (the "Space Leases") Existing (the Hotel, Personal
Property, Contracts, Equipment Leases and any such Space Leases are
collectively, the "Property").

                                   ARTICLE II
                                 Purchase Price

         2.1 Purchase Price. The purchase price for the Property is TWENTY-ONE
MILLION NINE HUNDRED THOUSAND AND 00/100 DOLLARS ($21,900,000.00) (the "Purchase
Price"), subject to adjustment as provided herein, which shall be payable on the
Closing Date to Seller in cash by wire transfer of immediately available funds
to Fidelity National Title Insurance Company, as escrow agent (the "Escrow
Agent").

         2.2 Allocation of Purchase Price. Seller and Purchaser shall agree,
within ten (10) days after the Contract Date, upon an allocation of the Purchase
Price among the Hotel and various items of Personal Property. If Seller and
Purchaser agree on such allocations, each party agrees to file federal, state
and local tax returns consistent with such allocations agreed upon between the
parties. If Seller and Purchaser cannot agree upon such allocations of the
Purchase Price within ten (10) days after the Contract Date, each party shall
file federal, state and local tax returns based on each party's own
determination of the proper allocations of the Purchase Price, each bearing its
own consequences of any discrepancies.

         2.3 Deposit. Within three (3) business day following the Contract Date,
Purchaser shall deliver to the Escrow Agent a deposit in the amount of ONE
HUNDRED THOUSAND AND 00/100 DOLLARS ($100,000.00) in immediately available funds
(together with any interest earned thereon, the("Initial Deposit"). If Purchaser
does not deliver the Initial Deposit to the Escrow Agent within three (3)
business day following the Contract Date, Seller shall have the right to
terminate this Agreement by giving written notice to Purchaser, and neither
party shall then have any further liability to the other under this Agreement
except as otherwise specifically provided herein. On the date that is the
expiration of the Due Diligence Period, Purchaser shall deliver to the Escrow
Agent an additional deposit in the amount of TWO HUNDRED FIFTY THOUSAND AND
00/100 DOLLARS ($250,000.00) (together with any interest earned thereon, the
"Additional Deposit") (the Initial Deposit and, when and if made, the Additional
Deposit and the Extension Deposit, are sometimes referred to in this Agreement
as the "Deposit"). The Escrow Agent shall hold the Deposit in accordance with
escrow instructions executed by Seller, Purchaser and the Escrow Agent (the
"Escrow Instructions") substantially in the form attached hereto as Exhibit B.

                                       2

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                                   ARTICLE III

               Seller's Representations, Warranties and Covenants

         In order to induce Purchaser to enter into this Agreement and to
consummate the transactions contemplated hereby, Seller represents and warrants
to, and covenants with, Purchaser as follows:

         3.1 Good Standing. Seller is a limited liability company duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Virginia, is authorized to conduct the business in which it is
now engaged, and is duly qualified and in good standing in all states where the
ownership of its assets or the conduct of its business makes such qualification
necessary.

         3.2 Due Authorization. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby have been
duly and validly authorized by all requisite actions of Seller, none of which
actions have been modified or rescinded, and all of which actions are in full
force and effect. This Agreement constitutes a valid and binding obligation of
Seller, enforceable against Seller in accordance with its terms.

         3.3 No Violations or Defaults. The execution, delivery and performance
of this Agreement and the consummation by Seller of the transactions
contemplated hereby will not (a) violate any law or any order of any court or
governmental authority with proper jurisdiction binding against Seller or its
assets; (b) result in a breach or default under any contract or other binding
commitment of Seller or any provision of the organizational documents of Seller;
or (c) require any consent or approval or vote that has not been taken or given,
or as of the Closing Date shall not have been taken or given.

         3.4 Litigation. As of the date hereof, there are no actions, suits,
arbitrations, governmental investigations or other proceedings pending or, to
the knowledge of Seller, threatened against Seller in writing or affecting the
Property before any court or governmental authority.

         3.5 Condemnation Actions. To Seller's knowledge, there are no pending
or threatened condemnation actions or special assessments of any nature with
respect to the Property or any part thereof.

         3.6 Management and Franchise Agreements. There are no existing
management contracts or franchise agreements relating to the Property other than
that certain License Agreement between Seller and Hilton Inns, Inc. (the
"Franchisor"), dated as of December 12, 2000, as amended by that certain
Amendment to License Agreement and Commencement Date Agreement dated as of
February 1, 2002 (as amended, the "Franchise Agreement") and the Hotel
Management Agreement between Seller and LTD Management Co., Inc. (the "Existing
Manager"), dated as of June 15, 2001 (the "Existing Management Agreement"), nor
are there any outstanding or alleged claims, liabilities or amounts due under
any such contracts or agreements.

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         3.7 Environmental Matters. Except as disclosed in the environmental
reports listed on Exhibit C, Seller has not received any written notice from any
governmental or regulatory authority of the presence or release of any substance
that is regulated under any Environmental Laws as a pollutant, contaminant or
toxic, radioactive or otherwise hazardous substance, including petroleum, its
derivatives or by-products and other hydrocarbons (collectively and
individually, "Hazardous Substances") that would cause the Hotel to be in
violation of any applicable Environmental Laws and that remains uncured, nor has
Seller received written notice from any applicable governmental or regulatory
authority that the Hotel is not in compliance with applicable Environmental
Laws. Except as otherwise disclosed in such environmental reports, to Seller's
knowledge (a) there are no Hazardous Substances located at, on or under the
Hotel and (b) no Hazardous Substances have leaked, escaped or been discharged,
emitted or otherwise released from the Land underlying the Hotel onto any
adjoining properties other than (i) Hazardous Substances used in the ordinary
course of maintaining and cleaning the Hotel in commercially reasonable amounts,
and (ii) Hazardous Substances used as fuels, lubricants or otherwise in
connection with vehicles, machinery and equipment located at the Hotel in
commercially reasonable amounts. The Hazardous Substances described in the
foregoing clauses (i) and (ii) are being stored, used and disposed of in
compliance with all Environmental Laws. For the purposes of this Section,
"Environmental Laws" means any and all statutes, laws, regulations and rules in
effect on the date hereof relating to the protection of the environment or to
the use, transportation and disposal of Hazardous Substances.

         3.8 Compliance with Applicable Law. To Seller's knowledge, the Hotel is
in compliance in all material respects with all applicable building codes and
zoning laws, and all other applicable laws, ordinances, rules and regulations.
Seller has not received any written notice from any governmental authority of
any violations of law or municipal ordinances, orders or requirements with
respect to the Hotel.

         3.9 Labor and Employment Matters. No employment contracts or collective
bargaining agreements exist with respect to the Property that will subject
Purchaser to liability therefor. Seller is the employer of all persons employed
at, or in connection with, the Property. There are less than one hundred
employees employed at, or in connection with, the Property Seller has no
knowledge of any strike, work stoppage or other labor dispute relating to the
operation of the Property or threatened by any union and has no knowledge of any
application pending or threatened for certification of a collective bargaining
agent.

         3.10 Insurance. Seller has and shall maintain through the Closing Date
insurance policies equivalent in all material respects to those currently
maintained by Seller, as listed on Exhibit D.

         3.11 Contracts. All material Contracts known to Seller and related to
the maintenance ownership, use, possession or operation of the Property, other
than the Existing Management Agreement, the Equipment Leases and the Space
Leases (if any), are listed on Exhibit E attached hereto. Seller has made
available to Purchaser true and complete copies of all such Contracts. To
Seller's knowledge, (a) all such Contracts are in full force and effect, and (b)
there are no defaults or events that with notice or the passage of time or both,
would constitute a default by Seller under any such Contract, nor by any other
party thereto.

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         3.12 Equipment Leases. All material Equipment Leases known to Seller to
which Seller or Existing Manager is a party are listed on Exhibit F attached
hereto. Seller has made available to Purchaser true and complete copies of all
such Equipment Leases. To Seller's knowledge, (a) all such Equipment Leases are
in full force and effect, and (b) there are no defaults or events that with
notice or the passage of time or both, would constitute a default by Seller
under any such Equipment Lease, nor by any other party thereto.

         3.13 Space Leases. All material Space Leases known to Seller to which
Seller or Existing Manager is a party are listed on Exhibit G attached hereto.
To Seller's knowledge, (a) all such Space Leases are in full force and effect,
and (b) there are no defaults or events that with notice or the passage of time
or both, would constitute a default by Seller under any such Space Leases, nor
by any other party thereto.

         3.14 Permits. To Seller's knowledge, all material licenses (including,
without limitation, liquor licenses), certificates of occupancy, permits and
approvals required to be issued by any governmental authority or any third party
and used in or necessary to the operation of the Hotel as a fully functioning
full-service hotel (the "Permits") have been obtained and are in full force and
effect. Each such Permit is listed on Exhibit H attached hereto, and Seller has
made available to Purchaser true and complete copies of each such Permit.

         3.15 Not a Foreign Person. Seller is not a "foreign person" within the
meaning of Section 1445 of the United States Revenue Code of 1986, as amended,
and the regulations promulgated thereunder.

         3.16 Bankruptcy. Seller is not the subject debtor under any federal,
state or local bankruptcy or insolvency proceeding, or any other proceeding for
dissolution, liquidation or winding up of its assets, and no attachments,
execution proceedings, assignments for the benefit of creditors, insolvency,
bankruptcy, or similar proceedings are pending or, to Seller's knowledge,
threatened against Seller, nor is Seller contemplating commencing any
proceedings.

         3.17 Title to the Property. Seller has good and valid title to the
Property and, on the Closing Date, except the Personal Property sold or
otherwise disposed of since the Contract Date in the ordinary course consistent
with past practices, the Property shall be transferred to Purchaser free and
clear of all mortgages, liens, encumbrances of any nature whatsoever except the
Permitted Exceptions.

         3.18 Taxes. All federal, state, local and other tax returns, reports
and declarations of every nature required to be filed by or on behalf of Seller
(either separately or as part of a consolidated group) prior to the Closing Date
with respect to the Property have been timely filed (subject to any extensions
that may be permitted by law) and such returns, reports and declarations as so
filed are complete and accurate and disclose all taxes required to be paid for
the periods covered thereby. All taxes and all deficiency assessments, penalties
and interest relating to any period ending prior to the Closing Date with
respect to the Property shall be paid by Seller if due as of or prior to the
Closing Date.

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         3.19 Zoning. Seller has received no written notice nor does Seller have
any knowledge of any actual or potential change to or modification of the zoning
applicable to the Hotel (or any component thereof).

         3.20 Complete Copies. All instruments, documents, lists, schedules and
items with respect to the Hotel which Seller has delivered or made available, or
will deliver to or make available to Purchaser pursuant to this Agreement are
true, correct and complete copies of originals.

         3.21 "As-Is, Where-Is" Sale. PURCHASER ACKNOWLEDGES AND AGREES THAT,
EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, THE PROPERTY IS SOLD
"AS-IS, WHERE-IS WITH ALL FAULTS," AND EXCEPT AS SET FORTH IN THIS AGREEMENT,
PURCHASER IS NOT RELYING ON ANY REPRESENTATIONS OR WARRANTIES FROM SELLER, ITS
AGENTS OR BROKERS AS TO ANY MATTERS CONCERNING THE PROPERTY.

         3.22 Knowledge. Any and all uses in this Agreement of the phrase "to
the knowledge of Seller", "to Seller's knowledge" or "known to Seller" (or any
similar phrase) shall mean the actual and present knowledge of Haribai Kanji
Thakkar, Tammy Constande and the general manager of the Hotel (collectively the
"Seller Knowledge Individual"). Neither the actual, present knowledge of any
other individual or entity, nor the constructive knowledge of the Seller
Knowledge Individual or of any other individual or entity shall be imputed to
the Seller Knowledge Individual.

                                   ARTICLE IV
              Purchaser's Representations, Warranties and Covenants

         In order to induce Seller to enter into this Agreement and to
consummate the transactions contemplated hereby, Purchaser represents and
warrants to, and covenants with, Seller as follows:

         4.1 Good Standing. Purchaser is a corporation, validly existing and in
good standing under the laws of Maryland, is authorized to conduct the business
in which it is now engaged and is, or as of the Closing Date shall be, qualified
to do business in all jurisdictions where the ownership of its assets or the
conduct of its business makes such qualification necessary.

         4.2 Due Authorization. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby have been
duly and validly authorized by all requisite corporate actions of Purchaser,
none of which actions have been modified or rescinded, and all of which actions
are in full force and effect. This Agreement constitutes a valid and binding
obligation of Purchaser, enforceable against Purchaser in accordance with its
terms.

         4.3 No Violations or Defaults. The execution, delivery and performance
of this Agreement and the consummation by Purchaser of the transactions
contemplated hereby will not (a) violate any law or any order of any court or
governmental authority with proper jurisdiction;

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(b) result in a breach or default under any contract or other binding commitment
of Purchaser or any provision of the organizational documents of Purchaser; or
(c) require any consent or approval or vote that has not been taken or given, or
as of the Closing Date shall not have been taken or given.

         4.4 Litigation. There are no actions, suits, arbitrations, governmental
investigations or other proceedings pending or, to the knowledge of Purchaser,
threatened against Purchaser before any court or governmental authority, an
adverse determination of which might adversely affect (a) the financial
condition or operations of Purchaser or (b) Purchaser's ability to enter into or
perform this Agreement.

                                    ARTICLE V
                                     Closing

         5.1 Closing. The consummation of the purchase and sale of the Property
as contemplated by this Agreement (the "Closing") shall take place on January 6,
2004 or on such alternative date or at such alternative location as may be
mutually agreed upon by Seller and Purchaser (the "Scheduled Closing Date").
Purchaser may elect to extend the Scheduled Closing Date for up to sixty (60)
days, at Purchaser's option, by (i) providing Seller with notice of such
election on or before December 15, 2003 (the "Extension Notice"), (ii)
depositing with the Escrow Agent within three (3) business days of the delivery
of the Extension Notice an additional earnest money deposit of ONE HUNDRED
THOUSAND AND 00/100 DOLLARS ($100,000.00) (the "Extension Deposit"), and (iii)
paying to Seller in addition to the Purchase Price an amount equal to the per
diem interest on the amount of the Purchase Price less the Deposit, at an
annualized rate equal to Wachovia Bank's prime rate of interest plus one percent
(1%) for each day subsequent to the Scheduled Closing Date that the Closing is
extended (the "Extension Fee"). The term "Closing Date" when used herein shall
mean the Scheduled Closing Date or the Scheduled Closing Date as may be extended
in accordance with this Section 5.1. The Extension Fee shall be payable on the
Closing Date to Seller in cash by wire transfer of immediately available funds
to the Escrow Agent. All of Seller and Purchaser's deliveries, the cash payment
of the Purchase Price, the Extension Fee, if any, and sufficient additional cash
necessary for the parties to pay the costs contemplated by Section 5.2 shall be
delivered in escrow to the Escrow Agent.

         5.2 Costs. Purchaser shall pay all of the transfer and recording taxes
and fees connected with the transfer of the Property and the recordation of the
Deed, (ii) fees of the Escrow Agent, and (iii) bulk sales taxes and other
personal property taxes associated with the Closing, if any. Purchaser shall pay
for (i) the cost of all environmental and engineering reports, (ii) the title
insurance premiums, including without limitation, the costs of all endorsements
and the Survey, and (iii) any and all sums required to be paid in connection
with the execution of a new franchise agreement; provided, however, that
Purchaser shall not be responsible for any amounts due and owing to Franchisor
pursuant to the Franchise Agreement representing obligations which accrued prior
to the Closing. Each party shall pay its own accountants and attorneys' fees
incurred in connection with the preparation, negotiation and execution of this
Agreement and the consummation of the transactions contemplated hereby.

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                                   ARTICLE VI
                  Actions Pending Closing; Due Diligence Period

         6.1 Conduct of Business; Maintenance and Operation of Property. Between
the Contract Date and the Closing Date, Seller shall continue to maintain the
Property in the same manner as it was maintained prior to the date hereof and
keep the Property in its present order and condition, subject to normal wear and
tear, exercising the same degree of care in such matters as Seller has
previously exercised. Seller shall not remove any item of Personal Property from
the Property without replacing the same with property of equal or greater value.

         6.2 Title Insurance. (a) Within ten (10) days after the Contract Date,
Seller shall provide Purchaser a copy of the existing title policy together with
copies of all exception documents listed on such policy. Purchaser shall obtain,
at Purchaser's sole cost, a binding commitment for owner's policy of title
insurance (the "Title Commitment") relating to the Hotel to be issued by a title
insurance company of Purchaser's choosing (the "Title Company"), committing to
insure Purchaser's good and marketable fee simple title to the Hotel. The Title
Policy to be issued at Closing shall show no liens, mortgages, deeds of trust,
security interests, pledges, charges, options, encroachments, easements,
covenants, leases, reservations or restrictions of any kind other than (i)
applicable zoning regulations and ordinances, (ii) liens for taxes, assessments
and governmental charges not yet due and payable, (iii) liens for water and
sewer service not yet due and payable, and (iv) the other Permitted Exceptions.

         (b) At least ten (10) days prior to the expiration of the Due Diligence
Period, Purchaser agrees to notify Seller in writing of any objections to
exceptions appearing in the Title Commitment. Within five (5) days following
Purchaser's notice, Seller shall notify Purchaser (a) that it will, prior to the
Closing Date, eliminate the exceptions to which Purchaser has objected or (b)
that it declines to eliminate specified exceptions. If Seller elects not to take
such actions as may be required by the Title Company to remove all exceptions to
title to which Purchaser has objected, Purchaser may within five (5) days
terminate this Agreement in its sole discretion and receive a return of the
Deposit and the parties shall have no further obligations to the other under
this Agreement, except for those obligations which expressly survive the
termination of this Agreement. If Seller agrees to take the actions necessary to
eliminate all exceptions to which Purchaser has objected, then such exceptions
shall not be Permitted Exceptions and Seller shall cause such exceptions to be
removed prior to or at Closing. If Purchaser elects to accept any exceptions to
which Purchaser has objected or if Purchaser subsequently elects to accept any
such exceptions and continue this Agreement, Purchaser and Seller shall, on or
prior to the date that is five (5) days following Seller's notification to
Purchaser pursuant to the second sentence of this Section 6.2(b), initial a list
of all exceptions that Purchaser agrees to accept (which shall include items
(i), (ii) and (iii) of Section 6.2(a) and all exceptions set forth in the Title
Commitment to which Purchaser did not object) (collectively, the "Permitted
Exceptions"), which shall be attached hereto as Exhibit I.

         6.3 Survey. Within ten (10) days after the Contract Date, Seller shall
provide Purchaser a copy of the survey for the Property. Purchaser shall obtain,
at Purchaser's sole cost,

                                       8

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an as-built survey of the Hotel, certified to Purchaser and the Title Company by
a land surveyor or professional engineer (the "Survey").

         6.4 No Action. Between the Contract Date and the Closing Date, Seller
shall not take or permit any action that would invalidate, void or make untrue
any representation or warranty provided under this Agreement. If any event
occurs prior to Closing that would cause any of Seller's representations or
warranties to become untrue, Seller shall notify Purchaser immediately in
writing of such occurrence.

         6.5 Inspection; Due Diligence Period. (a) Purchaser and Seller agree
for a period from the Contract Date until December 17, 2003 (the "Due Diligence
Period"), Purchaser shall have the right, at its own risk, cost and expense and
at any date or dates prior to Closing, to enter, or cause its agents or
representatives to enter, upon the Hotel at any reasonable time and upon
reasonable prior notice to Seller, for the purpose of making surveys or other
tests, inspections, investigations and/or studies of all or any part of the
Property. In addition, Purchaser may, at its own risk, cost and expense, conduct
such architectural, environmental, economic and other studies of the Property as
Purchaser may, in its sole discretion, deem desirable. Purchaser shall not make
any physical alterations to the Property or any invasive tests. Prior to entry
onto the Property, Purchaser shall provide Seller with a certificate of
insurance evidencing that Purchaser maintains a commercial general liability
policy that names Seller as an additional insured in such amount as Seller shall
reasonably approve. Purchaser shall conduct, and ensure that each of its agents,
employees, contractors or representatives conducts, each such entry in a manner
that does not materially interfere with the Hotel; and Purchaser shall indemnify
and hold Seller harmless from any and all claims, damages, demands, penalties,
causes of action, liabilities, losses, costs or expenses (including, without
limitation, reasonable attorneys' fees and other charges) arising out of or in
any way related to personal injury (including death), property damage,
disruptions of operations, nuisance or other claims asserted by any person or
entity relating to the acts or omissions of Purchaser, or its agents, employees,
contractors or representatives in the course of any such entry or inspection of
the Hotel. The foregoing indemnity shall survive Closing or any termination of
this Agreement. Purchaser shall have reasonable access to all documentation,
agreements and other information in the possession of Seller or Seller's agents
related to the Property and shall have the right to make copies of same. To the
extent not already made available, Seller shall make available to Purchaser
within ten (10) business days of the date hereof, copies of all environmental
reports listed on Exhibit C, and such other information as Purchaser may
reasonably request.

                  (b) If, during the Due Diligence Period, Purchaser gives
Seller written notification (the "Termination Notice") that Purchaser elects not
to consummate the purchase of the Property based upon the results of its
investigations or review of (i) the Title Commitment and the Survey, (ii)
Purchaser's environmental report of the Property, (iii) Purchaser's physical
inspection and/or study of the Property or (iv) the books or records of the
Hotel for the months July, August and September, 2003, this Agreement shall
terminate, whereupon the Deposit shall be returned to Purchaser and neither
party shall have any further liability to the other under this Agreement except
as otherwise specifically provided herein. In the event that the Termination
Notice is not received by Seller by the end of the Due Diligence Period,
Purchaser shall have

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been deemed to have elected to proceed hereunder, the Deposit shall become
non-refundable unless otherwise provided herein, and this Agreement shall remain
in full force and effect.

         6.6 Contracts and Equipment Leases. Prior to the expiration of the Due
Diligence Period, Purchaser shall notify Seller of any Contracts or Equipment
Leases that it wishes to have Seller terminate as of the Closing Date; provided
that Seller shall not be required to pay any penalties or termination costs in
connection with the termination of such Contracts or Equipment Leases. Between
the Contract Date and the Closing Date, Seller shall not enter into, terminate,
amend or otherwise modify any Contracts, Space Leases or Equipment Leases,
unless (i) any such contract, space lease or equipment lease will not be binding
on Purchaser after Closing, (ii) any such contract, equipment lease or space
lease is an extension or renewal of, or a new contract, equipment lease or space
lease that replaces, Contract, Equipment Lease or Space Lease existing as of the
Contract Date on substantially similar terms, allowing for a reasonable
adjustment in the price or rent charged thereunder to reflect market conditions
in Seller's reasonable judgment, and which new contract, equipment lease or
space lease may be with a new contracting third party or parties in Seller's
reasonable judgment; provided, however, from and after the expiration of the Due
Diligence Period Seller shall obtain the prior written consent of Purchaser
(which consent may be withheld in Purchaser's sole and absolute discretion)
before entering into any such contract, equipment lease or space lease, (iii)
any such new, amended or modified contract, equipment lease or space lease is
terminable by Purchaser without penalty or premium after Closing on no more than
thirty (30) days' notice, (iv) any such terminated contract, equipment lease or
space lease is terminated as a result of the default or nonperformance of a
party thereto other than Seller, or (v) the same is a purchase order for goods
or services entered into in the ordinary course of business of the Hotel
consistent with the practices and procedures in effect as of the Contract Date.

         6.7 Franchise Agreement. On or prior to the expiration of the Due
Diligence Period, Purchaser shall have obtained the approval of Hilton Hotels
Corporation which shall allow Purchaser or its subsidiary to be a Hilton Garden
Inn franchisee for the Hotel.

                                   ARTICLE VII
           Conditions Precedent to Purchaser's Obligations at Closing

         It shall be a condition to Purchaser's obligation to purchase the
Property that each and every one of the following conditions shall have been
satisfied as of the Closing Date (or waived by Purchaser).

         7.1 Representations and Warranties. Each of Seller's representations
and warranties shall be true and complete in all material respects as if made on
and as of the Closing Date.

         7.2 Covenants of Seller. Seller shall have materially performed and
complied with all covenants and conditions required by this Agreement to be
performed or complied with at or prior to the Closing Date.

         7.3 Intentionally Deleted.

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<PAGE>

         7.4 Litigation. There shall be no actions, suits arbitrations,
governmental investigations or other proceedings pending or, to the knowledge of
Seller, threatened against Seller in writing or affecting the Property before
any court or governmental authority, an adverse determination of which might
materially and adversely affect (a) the financial condition or operations of
Seller or the Hotel, (b) Seller's ability to enter into or perform this
Agreement or (c) Seller's title to the Property.

         7.5 Franchise Agreement and Existing Management Agreement. Franchisor
shall have approved of Purchaser as a franchisee of the Hotel and shall have
entered into a new franchise agreement with Purchaser on terms and conditions
reasonably acceptable to Purchaser. The Existing Management Agreement shall have
been terminated, at Seller's sole cost and expense. On the Closing Date, there
shall be no contract or agreement in effect between Seller and any third party
for management of the Property after the Closing Date. There shall be no fees,
payments, commissions or other sums due and owing in connection with management
of the Property under the Existing Management Agreement or any other agreement
for the period prior to the Closing Date.

         7.6 Permits. Purchaser shall have been able to obtain a liquor license
or shall have entered into an interim beverage agreement with Seller on terms
and conditions reasonably satisfactory to Purchaser which allows Purchaser to
serve alcoholic beverages at the Property on and subsequent to the Closing Date.

         7.7 Termination of Employees. If necessary, Seller shall terminate the
employment of all individuals employed at or in connection with the Property.
Compliance with the provisions of the Worker Adjustment and Retraining
Notification Act ("WARN Act") 29 U.S.C. 2101 et seq. shall be and remain
Seller's sole responsibility. Seller agrees to indemnify and hold Purchaser
harmless from and against any and all liability, loss, cost, damage and/or
expense (including without limitation, reasonable attorneys' fees and expenses)
arising from or relating to WARN Act insofar as it relates to the purchase and
sale of the Property and the termination of the employees who provide services
at the Property prior to the Closing Date. The indemnity set forth in this
Section 7.7 shall survive Closing and shall not be limited by any claims period
set forth in this Agreement.

         7.8 Failure of Condition. In the event of the failure of any condition
precedent set forth in this Article 7, except a failure that results from the
actions, inactions or material adverse change in the financial condition of
Purchaser or the failure of any of Purchaser's representations and warranties
set forth herein to be true and complete in all material respects, Purchaser, at
its sole election, may (i) terminate this Agreement (and receive a return of the
Deposit), (ii) waive the condition and proceed to Closing or (iii) extend the
Closing Date for such additional period of time, not to exceed thirty (30) days,
as may be reasonably required to allow Seller to remedy such failure. In the
event that any such condition is not satisfied and the transactions contemplated
hereby are not consummated primarily as a result of the actions, inactions or
material adverse change in the financial condition of Purchaser or the failure
of any of Purchaser's representations and warranties set forth herein to be true
and complete in all material respects, then the Deposit shall be forfeited to
Seller as full and complete liquidated damages, this Agreement will be
terminated and the parties shall have no further obligations to the other

                                       11

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under this Agreement, except for those obligations which expressly survive the
termination of this Agreement.

         7.9 Seller Deliveries. Seller shall have delivered all of the other
documents required from it pursuant to Article IX hereof.

                                  ARTICLE VIII
             Conditions Precedent to Seller's Obligations at Closing

         It shall be a condition to Seller's obligation to sell the Property
that each and every one of the following conditions shall have been satisfied as
of the Closing Date (or waived by Seller).

         8.1 Representations and Warranties. Each of Purchaser's representations
and warranties shall be true and complete in all material respects as if made on
and as of the Closing Date.

         8.2 Purchaser Deliveries. Purchaser shall have delivered all of the
other documents and other items required from it pursuant to Article IX hereof.

         8.3 Failure of Condition. In the event of the failure of any condition
precedent set forth in this Article 8, Seller, at its sole election, may (i)
terminate this Agreement, (ii) waive the condition and proceed to Closing or
(iii) extend the Closing Date for such additional period of time, not to exceed
thirty (30) days, as may be reasonably required to allow such failure to be
remedied; provided, however, that if any such condition is not satisfied
primarily as a result of the actions, inactions or material adverse change in
financial condition of Seller or a failure of the representations and warranties
of Seller in this Agreement to be true and complete in all material respects,
then Seller shall be required to return the Deposit to Purchaser and this
Agreement will be terminated and the parties shall have no further obligations
to the other under this Agreement, except for those obligations which expressly
survive the termination of this Agreement.

                                   ARTICLE IX
                               Closing Deliveries

         At Closing, the parties shall make the following deliveries:

         9.1 Deed. Seller shall deliver a special warranty deed in recordable
form conveying Seller's fee simple interest in the Hotel substantially in the
form set forth on Exhibit J attached hereto (the "Deed"), dated as of the
Closing Date, free of all liens, encumbrances and adverse claims other than the
Permitted Exceptions.

         9.2 Bill of Sale. Seller and Purchaser shall each deliver two (2) duly
executed counterparts (one for each party) of the bill of sale and assignment
and assumption of documents substantially in the form set forth on Exhibit K
attached hereto (the "Bill of Sale"), dated as of the Closing Date, conveying to
Purchaser the Personal Property, free of all liens, encumbrances and adverse
claims other than the Permitted Exceptions and assigning all of the applicable

                                       12

<PAGE>

Permits, Contracts, Equipments Leases and Space Leases, to the extent that the
foregoing are assignable.

         9.3 FIRPTA Certificate. Seller shall deliver a certificate, dated as of
the Closing Date, to establish that Seller is not a foreign person for the
purposes of the Foreign Investment in Real Property Tax Act.

         9.5 Intentionally Deleted.

         9.6 Possession; Books and Records, Keys. Seller shall deliver
possession of the Property to Purchaser, together with all books and records
relating to the Property in Seller's possession, in accordance with and subject
to any privacy laws or regulations, necessary or desirable for the operation of
the Hotel and all keys, including, without limitation, keys for all security
systems, rooms and offices.

         9.7 Purchase Price; Extension Fee. Purchaser shall deliver the Purchase
Price and the Extension Fee, if any, payable in the manner provided for in this
Agreement.

         9.8 Other Documents. Seller and Purchaser shall deliver such other
documents and instruments as may be reasonably requested by Seller, Purchaser or
the Title Company to effectuate the transactions contemplated by this Agreement
and to induce the Title Company to insure title to the Hotel as described
herein.

                                    ARTICLE X
                                     Default

         10.1 Purchaser's Default. If Purchaser fails to consummate the purchase
and sale contemplated herein after all conditions precedent to Purchaser's
obligation to do so have been satisfied or waived by Purchaser, Escrow Agent
shall pay the Deposit to Seller in accordance with the Escrow Instructions, as
full and complete liquidated damages, and as the exclusive and sole right and
remedy of Seller, whereupon this Agreement shall terminate, and neither party
shall have any further obligations or liabilities to the other party (except for
such obligations and liabilities as expressly survive the termination hereof).

         10.2 Seller's Default. If Seller fails to consummate the transaction in
accordance with the terms of this Agreement and Purchaser is otherwise willing
and able to proceed as contemplated hereunder, Purchaser shall be entitled, as
its sole remedy, to pursue any or all of the following remedies: (i) specific
performance of this Agreement, (ii) have the Deposit returned to Purchaser by
the Escrow Agent in accordance with the Escrow Instructions and (iii) in the
case of a willful and intentional default by Seller in its obligations to
proceed to Closing, or a willful and intentional failure to satisfy any
condition set forth in Article VII and Purchaser elects not to proceed to
Closing, recovery from Seller of the actual out-of-pocket damages incurred by
Purchaser in connection with the transactions contemplated by this Agreement,
provided that in no event shall the aggregate liability of Seller to Purchaser
under this clause (iii) exceed Five Hundred Thousand Dollars ($500,000).

                                       13

<PAGE>

                                   ARTICLE XI
         Survival; Indemnification Obligations; Post-Closing Obligations

         11.1 Generally. Except as otherwise expressly provided herein, the
respective representations, warranties, obligations, covenants and agreements of
Seller and Purchaser contained herein shall not survive the Closing, and no
action may be brought on any such representation, warranty, obligation, covenant
or agreement.

         11.2 Survival. Any claims for breach of the representations, warranties
and covenants of Seller and Purchaser contained herein shall be made within
twelve (12) months of the Closing Date, otherwise they shall irrevocably be
deemed to have been waived.

         11.3 Agreement to Indemnify. Notwithstanding any provisions of this
Agreement to the contrary, Seller shall hold harmless, indemnify and defend
Purchaser, its affiliates and their respective successors and assigns, and the
respective officers, directors, shareholders, partners, members, employees, and
agents of each of them (the "Purchaser Indemnitees") against any and all
obligations, claims, losses, damages, liabilities and expenses (including,
without limitation, reasonable attorneys' fees and other charges) connected with
the ownership or operation of the Hotel and relating to the period during which
Seller owned the Hotel, including, without limitation, actions or claims
relating to damage to property or injury to or death of any person during the
period of Seller's ownership of the Hotel, or any claims for any debts or
obligations occurring on or about or in connection with the Hotel or any portion
thereof or with respect to the Hotel's operations at any time during such
period. Notwithstanding any provisions of this Agreement to the contrary,
Purchaser shall hold harmless, indemnify and defend Seller its affiliates and
their respective successors and assigns, and the respective officers, directors,
shareholders, partners, members, employees, and agents of each of them against
any and all obligations, claims, losses, damages, liabilities and expenses
(including, without limitation, reasonable attorneys' fees and other charges)
connected with the ownership or operation of the Hotel and relating to the
period from or after the Closing Date, including, without limitation, actions or
claims relating to damage to property or injury to or death of any person during
the period in which the Hotel is owned by Purchaser (or Purchaser's affiliates)
or any claims for any debts or obligations occurring on or about the Hotel or
any portion thereof or with respect to the Hotel's operations at any time during
such period. The foregoing indemnities shall survive the Closing.

         11.4 Indemnification Regarding Assumed Obligations. Whenever it is
provided in this Agreement that an obligation of one party will be assumed by
the other party on or after the Closing, the party so assuming such liability
also shall be deemed to have agreed to indemnify, defend and hold harmless the
other party and its successors and assigns, from and against all claims, losses,
damages, liabilities, costs and expenses (including reasonable attorneys' fees
and other charges) arising from any failure of the assuming party to perform the
obligation so assumed after the Closing and from all third party claims brought
against the other party to the extent relating to the period from and after
assumption of the liability on which the claim is based.

                                       14

<PAGE>

         11.5 Notice and Cooperation on Indemnification. Whenever either party
shall learn through the filing of a claim or the commencement of a proceeding or
otherwise of the existence of any liability for which the other party is or may
be responsible under this Agreement, the party learning of such liability shall
notify the other party promptly and furnish such copies of documents (and make
originals thereof available) and such other information as such party may have
that may be used or useful in the defense of such claims and shall afford said
other party full opportunity to defend the same in the name of the notifying
party and generally shall cooperate with said other party in the defense of any
such claim. Upon receipt of such notice of possible liability, the party
obligated to provide indemnity shall have the right to provide a written notice
to the party entitled to indemnity that the indemnifying party elects to assume
the defense of such matter, including, without limitation, the employment of
counsel reasonably satisfactory to the indemnified party; whereupon the
indemnifying party shall have the right to prosecute such defense and shall be
responsible for the payment of the fees and disbursements of such counsel;
provided, however, if in the reasonable judgment of the indemnified party, (i)
such litigation, action, suit, demand, claim or the resolution thereof, would
have a material adverse effect on the indemnified party or (ii) the indemnifying
party shall have a conflict of interest in defending such action on the
indemnified party's behalf, then at the indemnified party's election, the
indemnified party may defend itself, and in either of such instances it shall be
at the indemnifying party's expense; provided, however, that the indemnifying
party shall be responsible for the reasonable fees of no more than one counsel
in each jurisdiction in each proceeding. No indemnifying party shall be
responsible for any obligation, loss, cost, expense or other liability to the
extent that (a) the party entitled to indemnification failed to provide prompt
notice thereof to the indemnifying party and (b) such obligation, loss, cost,
expense or other liability could have been avoided if prompt notice had been
given.

                                   ARTICLE XII
                            Casualty or Condemnation

         12.1 Notice to Purchaser. Seller agrees to give purchaser prompt notice
of any fire or other casualty occurring at the Hotel between the Contract Date
and the Closing Date; provided, however, that Seller shall not be deemed to be
in default under this Section 12.1 for failure to report minor incidents causing
insignificant damage.

         12.2 Condemnation, Casualty or Litigation. If, prior to Closing, (i)
condemnation proceedings are commenced against all or any material portion of
the Property, or (ii) the Property is damaged by fire or other casualty to the
extent that the cost of repairing such damage shall be Five Hundred Thousand and
00/100 Dollars ($500,000.00) or more, Purchaser shall have the right, upon
notice in writing to Seller delivered within fifteen (15) days after actual
notice of such condemnation, fire or other casualty or litigation, to terminate
this Agreement. Upon such termination, the Deposit shall be returned immediately
to Purchaser, and neither party shall have any further liability to the other
hereunder, except as otherwise expressly provided in this Agreement. If the
Hotel is so damaged but this Agreement is not terminated with respect to the
Hotel, the Purchase Price shall not be reduced, but Purchaser shall be entitled
to an assignment of all of Seller's share of the condemnation award or the
proceeds of any fire or other casualty insurance plus the amount of any
deductible under such insurance that has not been applied to the restoration or
repair of such damage and all rent insurance proceeds (if any) payable with
respect
                                       15

<PAGE>

to the Hotel relating to the period after Closing and Seller shall have no
obligation to repair or restore the Property.

         12.3 Risk of Loss. Subject to the provisions of this Article XII, the
risk of loss or damage to the Property shall remain with Seller until the
delivery of the Deed.

                                  ARTICLE XIII
                                 Apportionments

         13.1 Apportionments. The following apportionments shall be made between
the parties at the Closing as of the close of business on the day immediately
prior to the Closing Date (the "Apportionment Date"):

                  (a) real estate taxes, personal property taxes, special
assessments and vault charges, if any, on the basis of the fiscal period for
which assessed;

                  (b) fuel oil in the tank at the Hotel, if any, (based upon
invoice cost, first in, first out), water and sewer service charges and charges
for gas, electricity, telephone and all other public utilities. If there are
meters measuring the consumption of water, gas or electric current, Seller
shall, not more than one day prior to the Apportionment Date, if possible, cause
such meters to be read, and shall pay all utility bills for which Seller is
liable upon receipt of statements therefor. Purchaser shall be responsible for
causing such utilities and services to be changed to its name and shall be
liable for and shall pay all utility bills for services rendered after the
Apportionment Date. All utility adjustments will be made by the parties outside
of Closing;

       (c) amounts which have been paid or are payable under the Contracts,
Space Leases, Equipment Leases and Permits assigned to and assumed by Purchaser
at Closing;

       (d) prepaid advertising expenses;

       (e) commissions of credit and referral organizations; and

       (f) all other charges and fees customarily prorated and adjusted in
similar transactions.

       In addition to the foregoing apportionments, the Purchase Price shall be
increased by the amount of petty cash at the Hotel on the Closing Date.

         13.2 Deposits. All deposits (including any interest thereon due the
party making such deposit) from guests or others made as security or in
connection with future services to be rendered shall be credited to Purchaser at
the Closing. Purchaser shall assume responsibility for all deposits and shall
hold Seller harmless therefrom. Seller shall hold Purchaser harmless from any
liability for deposits not so credited.

         13.3 Room Revenue. All revenues received or to be received from
transient guests on account of room rents for the period ending on the
Apportionment Date shall belong to Seller,

                                       16

<PAGE>

and for the period beginning on the day immediately following the Apportionment
Date such revenues shall belong to Purchaser; provided, however, that revenues
received or "posted" in the normal course after the time Seller normally closes
its front desk activity for the "night" audit for the Apportionment Date (the
"Front Desk Closing Hour") shall belong to Purchaser. The accounts receivable of
registered guests at the Property who have not checked out and were occupying
rooms as of 12:01 a.m. on the Apportionment Date are collectively called the
"Current Ledger", and Purchaser shall pay over to Seller, Seller's share of the
proceeds of the Current Ledger attributable to payments of each guest's account
for the period ending on the Apportionment Date. In the event that an amount
less than the total amount due from a guest is collected and the guest continued
in occupancy after the Apportionment Date, such amount shall be applied first to
any indebtedness owing by such person to Purchaser and thereafter to such
person's indebtedness to Seller.

         13.4 Accounts Receivable; Accounts Payable. (a) Purchaser shall
purchase from Seller, and Seller shall assign to Purchaser at Closing and
receive a credit for (i) all of Seller's current accounts receivable (i.e.
accounts receivable which are aged not more than ninety (90) days) including,
without limitation, all account receivables from credit card issuers and (ii)
the accounts receivable of registered guests who have not checked out prior to
the Apportionment Date and who are occupying rooms on the evening preceding the
Closing Date. Such credit shall equal the amount of accounts receivable less (i)
credit card charges, travel company charges and similar commissions and (ii) on
all accounts receivable other than credit card receivables, a discount of five
percent (5%). All other accounts receivable relating to the Hotel in respect of
the period prior to the Apportionment Date shall be for Seller's sole account,
and Purchaser shall not be responsible to Seller for the same. Notwithstanding
the foregoing, payments received by Purchaser that are identified as relating to
accounts receivable not purchased by Purchaser shall be promptly turned over to
Seller.

         (b) Any indebtedness, accounts payable, liabilities or obligations of
any kind or nature related to Seller or the Property for the periods prior to
and including the Apportionment Date shall be retained and paid by Seller, and
Purchaser shall not be or become liable therefor, except as assumed by Purchaser
pursuant to this Agreement.

         13.5 Food and Beverage Revenue; Vending Machine Revenue. All monies
received in connection with bar and restaurant services, if any, at the Hotel
(other than amounts due from any guest) during the Apportionment Date shall
belong to Purchaser. Vending machine proceeds shall be counted as close to the
Front Desk Closing Hour as is possible and the net amount thereof shall be
credited to Seller at Closing.

         13.6 Guests' Property. All baggage or other property of patrons of the
Hotel checked or left in care of Seller shall be listed in an inventory to be
prepared in duplicate and signed by Seller's and Purchaser's representatives on
the Closing Date. Purchaser shall be responsible from and after the Closing Date
and will indemnify and hold Seller harmless from and against all claims for all
baggage and property listed in such inventory. All baggage or other property of
guests retained by Seller as security for unpaid accounts receivable may be left
at the Hotel, for a period not to exceed one (1) month from Closing Date, within
which time such baggage or other property shall be removed or otherwise disposed
of by Seller.

                                       17

<PAGE>

         13.7 Accounting. Except as otherwise expressly provided herein, all
apportionments and adjustments shall be made in accordance with the Uniform
System of Accounts, and to the extent not inconsistent therewith, generally
accepted accounting principles. The computation of the adjustments shall be
jointly prepared by Seller and Purchaser, and, upon the request of either
Purchaser or Seller, shall be reviewed by a mutually acceptable reputable
accounting firm (the "Accountants") and reviewed by representatives of both
Purchaser and Seller. To the extent the exact amount of any adjustment item
provided for in this Article XIII cannot be precisely determined on the Closing
Date, Purchaser and Seller shall estimate the amount thereof, for purposes of
computing the net amount due Seller or Purchaser pursuant to this Article XIII
and shall determine the exact amount thereof not later than sixty (60) days
after the Closing Date. All determinations made by the Accountants shall be
binding on both Seller and Purchaser. The fees and expenses of the Accountants
shall be borne one-half each by Seller and Purchaser.

         13.8 Employee Compensation. Seller and Existing Manager shall be
responsible for any liability for payment of all employees' wages, accrued
vacation pay, sick leave, bonuses, pension benefits, including, without
limitation, any COBRA rights, and other benefits earned by and due to employees
at the Property through 12:01 a.m. on the Closing Date, together with F.I.C.A.,
unemployment and other taxes and benefits due from any employer of such
employees. Purchaser shall be responsible for any liability for payment of all
employees' wages, accrued vacation pay, sick leave, bonuses, pension benefits,
including, without limitation, any COBRA rights, and other benefits earned by
and due to employees at the Property that it has hired or caused its manager to
hire after 12:01 a.m. on the Closing Date, together with F.I.C.A., unemployment
and other taxes and benefits due from any employer of such employee.
Notwithstanding the foregoing, Purchaser shall assume and undertake to pay,
defend and discharge and perform when due accrued vacation pay, sick leave and
bonuses for employees at the Property it has hired or caused its manager to
hire, to the extent that (i) such accrued vacation leave, sick pay and bonuses
are reflected properly on a schedule delivered by Seller to Purchaser at Closing
and acknowledged by each of the employees listed on such schedule and (ii)
Purchaser receives a credit therefore against the Purchase Price.

                                   ARTICLE XIV
                                  Miscellaneous

         14.1 Assignment. Neither party shall assign or transfer or permit the
assignment or transfer of its rights or obligations under this Agreement without
the prior written consent of the other, any such assignment or transfer without
such prior consent being hereby declared to be null and void; provided, however,
that Purchaser shall have the right to assign this Agreement in its entirety (a)
without Seller's consent to (i) Highland Hospitality Corporation or a subsidiary
or an affiliate thereof or (ii) a subsidiary or an affiliate of Purchaser or (b)
with Seller's consent, which consent shall not be unreasonably withheld or
delayed, to a third party capital partner provided that Purchaser shall remain
liable to Seller for its obligations hereunder.

         14.2 Consents. If, under this Agreement, the consent of a party is
required, the consent shall be in writing and shall be executed by a duly
authorized officer or agent.

                                       18

<PAGE>

         14.3 Applicable Law. This Agreement shall be governed by the laws of
the State of Maryland, without resort to the choice of law rules thereof.

         14.4 Headings; Exhibits. The headings of articles and sections of this
Agreement are inserted only for convenience; they are not to be construed as a
limitation of the scope of the particular provision to which they refer. All
exhibits attached or to be attached to this Agreement are incorporated herein by
this reference.

         14.5 Notices. Notices and other communications required by this
Agreement shall be in writing and delivered by hand against receipt or sent by
recognized overnight delivery service or by certified or registered mail,
postage prepaid, with return receipt requested. All notices shall be addressed
as follows:

         If to Purchaser:

         Highland Hospitality, L.P.
         8405 Greensboro Drive, Suite 500
         McLean, Virginia 22102
         Attention:  General Counsel

         with a copy to:

         Highland Hospitality, L.P.
         8405 Greensboro Drive, Suite 500
         McLean, Virginia 22102
         Attention:  Chief Operating Officer

         If to Seller:

         Brentwood BWI, LLC
         1564 Crossways Boulevard, Suite 201
         Chesapeake, Virginia  23320
         Attention:  H.K. Thakkar

         With a copy to:

         Faggert & Frieden, P.C.
         222 Central Park Avenue, Suite 1300
         Virginia Beach, Virginia  23462
         Attention:  Alan M. Frieden, Esq.

or to such other address as may be designated by a proper notice. Notices shall
be deemed to be effective when so delivered by hand, or if mailed, three days
after mailing or one business day, in the case of express mail or overnight
courier service or refusal of the addressee to accept delivery.

                                       19

<PAGE>


         14.6 Waiver. The failure of either party to insist on strict
performance of any of the provisions of this Agreement or to exercise any right
granted to it shall not be construed as a relinquishment or future waiver;
rather, the provision or right shall continue in full force. No waiver of any
provision or right shall be valid unless it is in writing and signed by the
party giving it.

         14.7 Partial Invalidity. If any part of this Agreement is declared
invalid by a court of competent jurisdiction, this Agreement shall be construed
as if such portion had never existed, unless this construction would operate as
an undue hardship on Seller or Purchaser or would constitute a substantial
deviation from the general intent of the parties as reflected in this Agreement.

         14.8 Entire Agreement. This Agreement, together with the other writings
signed by the parties and incorporated herein by reference and together with any
instruments to be executed and delivered under this Agreement, constitutes the
entire agreement between the parties with respect to the purchase and sale of
the Property and supersedes all prior oral and written understandings. Any
amendments to this Agreement shall not be effective unless in writing and signed
by the parties hereto.

         14.9 Time is of the Essence. Time is of the essence with respect to
performance of all obligations under this Agreement.

         14.10 Waiver of Jury Trial. Seller and Purchaser each hereby waives any
right to jury trial in the event any party files an action relating to this
Agreement or to the transactions or obligations contemplated hereunder.

         14.11 Counterparts. This Agreement may be executed in separate
counterparts, none of which need contain the signatures of all parties, each of
which shall be deemed to be an original, and all of which taken together
constitute one and the same instrument. It shall not be necessary in making
proof of this Agreement to produce or account for more than the number of
counterparts containing the respective signatures of, or on behalf of, all of
the parties hereto.

         14.12 Brokerage. Purchaser and Seller each represents and warrants to
the other that no broker or agent is entitled to the payment of a commission for
services rendered in connection with the transactions contemplated herein other
than CB Richard Ellis and/or Mr. Douglas Henkel, which commissions shall be due
and payable by Seller pursuant to the terms of a separate agreement. Each of the
parties hereto agrees to indemnify and hold the other harmless from claims made
by any broker, attorney or finder claiming through such party for a commission,
fee or compensation in connection with this Agreement or the sale of the
Property hereunder. The provisions of this Section 14.12 shall survive Closing.

         14.13 Attorneys' Fees. If either party hereto fails to materially
perform any of its obligations under this Agreement or if any dispute arises
between the parties hereto concerning the meaning or interpretation of any
provision of this Agreement, then the defaulting party or the party not
prevailing in such dispute, as the case may be, shall pay any and all reasonable
costs

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and expenses incurred by the other party on account of such default and/or in
enforcing or establishing its rights hereunder, including, without limitation,
court costs and reasonable attorneys' fees and disbursements. Any such
attorneys' fees and other expenses incurred by either party in enforcing a
judgment in its favor under this Agreement shall be recoverable separately from
and in addition to any other amount included in such judgment, and such
attorneys' fees obligation is intended to be severable from the other provisions
of this Agreement and to survive and not be merged into any such judgment.

         14.14 Intentionally Deleted.

         14.15 Public Announcements. Neither Seller nor Purchaser shall make any
public statement or issue any press release prior to the Closing with respect to
this Agreement or the transactions contemplated hereby without the prior written
consent of the other party.

         14.16 Time for Performance. If the date for the performance of any
obligation, or the giving of any notice, by Seller or Purchaser hereunder falls
upon a Saturday, Sunday or legal holiday recognized by the United States
government, then the time for such performance or notice shall be extended until
the next business day.

         14.17 Further Assurances. Each party agrees to execute and deliver,
after the Closing, such forms of corrective Deeds, bills of sale or other
documentation as the other party may reasonably request to carry out the intent
of this Agreement.

         14.18 Non-Solicitation. During the period from the Contract Date until
the Closing or the earlier termination of this Agreement, Seller shall not
directly make, accept, solicit, negotiate, entertain or otherwise pursue, or
authorize any representative or affiliate of Seller to make, accept, solicit,
negotiate, entertain or otherwise pursue, any offers for the financing, or
direct or indirect sale or disposition of the Property or any portion thereof,
other than the transactions contemplated by this Agreement.

         14.19 Like-Kind Exchange. Seller shall have the absolute right to
assign any of its rights under this Agreement in connection with a like-kind
exchange of property intended to qualify as tax-free under Section 1031 of the
Internal Revenue Code, provided that (i) Seller shall save, protect, defend,
indemnify and hold the Purchaser Indemnitees harmless from any and all
additional costs, liabilities or expenses as a result of such like-kind
exchange, (ii) Seller shall remain liable for any of its obligations under this
Agreement, (iii) such exchange shall not cause or result in any delay of the
Closing, and (iv) Purchaser shall not be obligated to take title to any other
property in connection with such exchange. Upon request of Seller, Purchaser
shall cooperate with Seller, at Seller's sole cost and expense, as Seller may
reasonably request to enable Seller to consummate such like-kind exchange.

                         [SIGNATURES ON FOLLOWING PAGE]

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         IN WITNESS WHEREOF, Seller and Purchaser have caused this Agreement to
be executed as of the Contract Date indicated above.

                               SELLER

                               BRENTWOOD BWI, LLC

                               By:  Brentwood Hotels, LLC,
                                   Its Manager

                               By:  /s/  H.K. Thakkar
                                   ______________________________________

                               Name: H.K. Thakkar
                               Its: Manager

                               PURCHASER

                               HIGHLAND HOSPITALITY, L.P.

                                   By: Highland Hospitality Corporation,
                                       Its General Partner

                                   By:  /s/  Patrick W. Campbell
                                      __________________________________
                                   Name:  Patrick W. Campbell
                                   Its:   Executive Vice President

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