Exhibit 10.22

North Charleston, SC (Home2)

PURCHASE CONTRACT

between

THE
GENERATION COMPANIES, LLC (SELLER)

AND

APPLE SUITES REALTY GROUP, INC.
(BUYER)

Dated: November 5, 2010

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TABLE OF CONTENTS

|             |      |  |                                                                      |  |    |         
|------------ | ---- |  | -------------------------------------------------------------------- |  | -- | --------
|             |      |  |                                                                      |  |    | Page No.
|             |      |  |                                                                      |  |    |         
|ARTICLE I    |      |  | DEFINED TERMS                                                        |  | 1 
|             | 1.1  |  | Definitions                                                          |  | 1 
|             |      |  |                                                                      |  |   
|ARTICLE II   |      |  | PURCHASE AND SALE; PURCHASE PRICE; PAYMENT; EARNEST
 MONEY DEPOSIT   |  | 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 III  |      |  | REVIEW PERIOD                                                        |  | 9 
|             | 3.1  |  | Review Period                                                        |  | 9 
|             | 3.2  |  | Due Diligence Examination                                            |  | 10
|             | 3.3  |  | Restoration                                                          |  | 11
|             |      |  |                                                                      |  |   
|ARTICLE IV   |      |  | SURVEY AND TITLE APPROVAL                                            |  | 11
|             | 4.1  |  | Survey                                                               |  | 11
|             | 4.2  |  | Title                                                                |  | 11
|             | 4.3  |  | Survey or Title Objections                                           |  | 11
|             |      |  |                                                                      |  |   
|ARTICLE V    |      |  | MANAGEMENT AGREEMENT AND FRANCHISE AGREEMENT                         |  | 12
|             |      |  |                                                                      |  |   
|ARTICLE VI   |      |  | BROKERS                                                              |  | 13
|             |      |  |                                                                      |  |   
|ARTICLE VII  |      |  | REPRESENTATIONS, WARRANTIES AND COVENANTS                            |  | 13
|             | 7.1  |  | Sellers and Indemnitors Representations,
 Warranties and Covenants |  | 13
|             | 7.2  |  | Buyers Representations, Warranties and Covenants                    |  | 17
|             | 7.3  |  | Survival                                                             |  | 17
|             |      |  |                                                                      |  |    |         
|ARTICLE VIII |      |  | ADDITIONAL COVENANTS                                                 |  | 17
|             | 8.1  |  | Subsequent Developments                                              |  | 17
|             | 8.2  |  | Construction of Hotel                                                |  | 18
|             | 8.3  |  | Plans and Specifications                                             |  | 18
|             | 8.4  |  | Commencement of Construction; Substantial Completion                 |  | 18
|             | 8.5  |  | Inspections                                                          |  | 19
|             | 8.6  |  | Punch List                                                           |  | 19
|             | 8.7  |  | Pre-Opening Program                                                  |  | 19
|             | 8.8  |  | Construction Warranty                                                |  | 20
|             | 8.9  |  | Other Obligations of Seller Before Closing                           |  | 20
|             | 8.10 |  | Third Party Consents                                                 |  | 20
|             | 8.11 |  | Access to Financial Information                                      |  | 21

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|             |       |  |                                  |  |    | 
|------------ | ----- |  | -------------------------------- |  | -- | 
|             | 8.12  |  | Bulk Sales                       |  | 21
|             | 8.13  |  | Indemnification                  |  | 21
|             | 8.14  |  | Escrow Funds                     |  | 23
|             |       |  |                                  |  |   
|ARTICLE IX   |       |  | CONDITIONS FOR CLOSING           |  | 24
|             | 9.1   |  | Buyers Conditions for Closing   |  | 24
|             | 9.2   |  | Sellers Conditions for Closing  |  | 25
|             |       |  |                                  |  |   
|ARTICLE X    |       |  | CLOSING AND CONVEYANCE           |  | 25
|             | 10.1  |  | Closing                          |  | 25
|             | 10.2  |  | Deliveries of Seller             |  | 26
|             | 10.3  |  | Buyers Deliveries               |  | 27
|             |       |  |                                  |  |   
|ARTICLE XI   |       |  | COSTS                            |  | 28
|             | 11.1  |  | Sellers Costs                   |  | 28
|             | 11.2  |  | Buyers Costs                    |  | 28
|             |       |  |                                  |  |    | 
|ARTICLE XII  |       |  | ADJUSTMENTS                      |  | 28
|             | 12.1  |  | Adjustments                      |  | 28
|             | 12.2  |  | Reconciliation and Final Payment |  | 29
|             | 12.3  |  | Employees                        |  | 30
|             |       |  |                                  |  |    | 
|ARTICLE XIII |       |  | CASUALTY AND CONDEMNATION        |  | 30
|             | 13.1  |  | Risk of Loss; Notice             |  | 30
|             | 13.2  |  | Buyers Termination Right        |  | 30
|             | 13.3  |  | Procedure for Closing            |  | 31
|             |       |  |                                  |  |    | 
|ARTICLE XIV  |       |  | DEFAULT REMEDIES                 |  | 31
|             | 14.1  |  | Buyer Default                    |  | 31
|             | 14.2  |  | Seller Default                   |  | 31
|             | 14.3  |  | Attorneys Fees                  |  | 31
|             |       |  |                                  |  |    | 
|ARTICLE XV   |       |  | NOTICES                          |  | 32
|             |       |  |                                  |  |   
|ARTICLE XVI  |       |  | MISCELLANEOUS                    |  | 33
|             | 16.1  |  | Performance                      |  | 33
|             | 16.2  |  | Binding Effect; Assignment       |  | 33
|             | 16.3  |  | Entire Agreement                 |  | 33
|             | 16.4  |  | Governing Law                    |  | 33
|             | 16.5  |  | Captions                         |  | 33
|             | 16.6  |  | Confidentiality                  |  | 33
|             | 16.7  |  | Closing Documents                |  | 34
|             | 16.8  |  | Counterparts                     |  | 34
|             | 16.9  |  | Severability                     |  | 34
|             | 16.10 |  | Interpretation                   |  | 34
|             | 16.11 |  | (Intentionally Omitted)          |  | 34
|             | 16.12 |  | Further Acts                     |  | 34

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| |       |  |                               |  |    | 
| | ----- |  | ----------------------------- |  | -- | 
| | 16.13 |  | Joint and Several Obligations |  | 34
| | 16.14 |  | Notice of Proposed Listing    |  | 34
| | 16.15 |  | Construction Loan             |  | 35
| | 16.16 |  | Title to Land                 |  | 35

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       
|Exhibit I | Pre-Opening Budget          

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PURCHASE CONTRACT

This PURCHASE CONTRACT (this Contract) is made and
entered into as of November 5, 2010, by and between THE GENERATION COMPANIES,
LLC, a North Carolina limited liability company (Seller) with a
principal office at 1822 N.C. Highway 54 East, Suite 300, Durham, North
Carolina 27713, and APPLE SUITES REALTY GROUP, INC., a Virginia corporation,
with its principal office at 814 East Main Street, Richmond, Virginia 23219, or
its affiliates or assigns as permitted under Section 16.2 herein (Buyer).


RECITALS


A.
Seller is or will become the fee simple owner of the land located in the City
of North Charleston, County of Charleston, South Carolina, identified in on Exhibit
A attached hereto and incorporated herein by reference. Seller intends to
construct a hotel on such land containing 122 suites to be operated as a Home2
by Hilton hotel.

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

AGREEMENT:

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

ARTICLE
IDEFINED TERMS

1.1Definitions. 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 $100,000.

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 but not any adjacent parcels of Seller, (iii)
any strips or gores of real estate adjacent to the Land, and (iv) the use of
all

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alleys, easements and rights-of-way, if any, abutting,
adjacent, contiguous to or adjoining the Land. If Seller owns contiguous
parcels of land, Appurtenances shall apply only to the Land and not any such
contiguous parcels.

Architect shall mean the architect for the
Hotel, The Neil Luton Planning Group.

Brand
shall mean Home2 by Hilton, the hotel brand or franchise under which the Hotel
will operate.

Business
Day shall mean any day other than a Saturday, Sunday or legal holiday in
the Commonwealth of Virginia or the state in which the Real Property is
located.

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 Lender shall mean RBC Bank
(USA).

Construction Warranty shall have the meaning
set forth in Section 8.8.

Contractor shall mean the contractor for the
Hotel, Tri Construction Associates, Inc.

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 Contract 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)

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Escrow Agent shall have the meaning set forth
in Section 2.5(a).

Escrow Agreement shall have the meaning set
forth in Section 2.5(b).

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.

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. A current list of FF&E will be
attached hereto as Exhibit B at least 15 days prior to Closing.

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 (i) strikes, lockouts or
labor disputes, (ii) the inability through no fault of the Seller to obtain
labor or materials or reasonable substitutes therefor, (iii) acts of God and
adverse weather conditions, (iv) enemy or hostile governmental action or acts
of terrorism, (v) governmental restrictions such as embargoes, (vi) civil
commotion, (vii) fire or other casualty or (viii) other conditions similar to
those enumerated above that are beyond the control of Seller, but in each case
excluding any such events or conditions that merely result in increased costs
to Seller.

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

Franchisor shall mean Hilton Worldwide, Inc.
or its affiliate.

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Hotel shall mean the hotel to be constructed
on the Land, including all Improvements and Personal Property associated
therewith, to be known generally as the North Charleston Home2 Suites by
Hilton.

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, provided, however, that
the term Improvements shall not include any buildings, structures, fixtures,
parking areas and other improvements that are or will be demolished or removed
in connection with the construction and development of the Hotel.

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).

Knowledge, knowledge or known to or similar
statements shall mean, with respect to Seller, the actual knowledge of H. Mark
Daley, III or Jeffrey P. Castleberry, and with respect to Buyer, the actual
knowledge of Nelson Knight.

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.

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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.

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 after Substantial Completion of
the Hotel.

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

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and leasing material and forms (including but not
limited to any such records, data, information, material and forms in the form
of computerized files located at the Hotel), market studies prepared in
connection with Sellers current annual plan and other materials, information,
data, legal or other documents or records (including, without limitation, all
documentation relating to any litigation or other proceedings, all zoning
and/or land use notices, relating to or affecting the Property, all business
plans and projections and all studies, plans, budgets and contracts related to
the development, construction and/or operation of the Hotel) owned by Seller
and/or in 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; (v) 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 (vi) 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.

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

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installation, equipping and furnishing of the Hotel,
and all indemnities, bonds and claims of Seller related thereto.

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

2.1
Purchase and Sale. Seller agrees to sell and convey to Buyer or
its affiliates and/or assigns (as permitted under Section 16.2 below), 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 Thirteen Million Nine Hundred
Eight Thousand and No/100 Dollars ($13,908,000.00) (the Purchase Price) based
upon a room count of 122. The purchase price shall be reduced by (i) an amount
equal to twenty percent (20%) of the amount $10,401,898.00 exceeds the actual
construction costs and (ii) an amount equal to forty percent (40%) of the
amount $2,031,676.00 exceeds FF&E costs.

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 Seller do not agree, each party shall be free to allocate the Purchase
Price to such items as they deem appropriate, subject to and in accordance with
applicable laws.

2.4
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 One Hundred Thousand and No/100
Dollars ($100,000.00) 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

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Review Period, then the Escrow Agent shall return the
Earnest Money Deposit to Buyer promptly upon written notice to that effect from
Buyer. If Buyer does not elect to terminate this Contract on or before the
expiration of the Review Period, Buyer shall subject to Section 16.16
below, within three (3) Business Days after the later to occur of (a) the
expiration of the Review Period or (b) the date Seller closes the Construction
Loan (defined below), 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 in the form attached hereto as Exhibit G
and 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
III
REVIEW PERIOD

3.1
Review Period. Buyer shall have a period through 6:00 p.m. Eastern Time
on the date that is thirty (30) days following the date of this Contract,
unless a longer period of time is otherwise provided for in this Contract and
except as otherwise agreed to by Buyer and Seller (the Review Period), to
evaluate the legal, title, survey, construction, physical condition,
structural, mechanical, environmental, economic, permit status, franchise
status, financial and other documents and information related to the Property.
Within two (2) Business Days following the date of this Contract, Seller, at
Sellers sole cost and expense, will deliver to Buyer (or make available at the
Hotel) for Buyers review, to the extent not previously delivered to Buyer,
true, correct and complete 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)
If there is an existing Hotel, income and expense statements and budgets for
the Hotel, for the current year to date (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
Seller also agrees to provide to Buyers auditors and representatives all
financial and other information necessary or appropriate for preparation of
audited financial statements for Buyer and/or its Affiliates as provided in
Section 8.11, below;

(c)
To the extent existing, all real estate and, if applicable, 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, or for such years as Seller has owned
the Property;

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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;

(e)
To the extent existing, all FF&E Leases, Services 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 (or for such years as Seller has owned the Property) and all other notices
received from governmental authorities received at any time during Sellers
ownership of the Property 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.

3.2Due 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 such 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 or the construction of

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the Improvements, and pay the costs of all such
inspections. Buyer shall perform any physical inspections of the Property at
its own risk. Buyer may not conduct a Phase II environmental site assessment or
any other invasive environmental procedure without the prior written consent of
Seller.

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
IV
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 (each, a Title Commitment) issued by Chicago Title Company,
Attn: Debby Moore, 5501 LBJ Freeway, Suite 200, Dallas, Texas 75240 (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 on or before the expiration of the
Review Period (the Title Review Period). If Buyer fails
to so object in writing to any such matter set forth in the Survey or Title
Commitment, it shall be conclusively assumed that Buyer has approved same,
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

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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 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 (Seller Liens), each
of which shall be paid in full by Seller and released at Closing.

ARTICLE
V
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), provided, however, that Buyer shall
use its commercially reasonable efforts to obtain such Franchise Agreement, and
provided, further, that Buyer shall not be entitled, as a condition to Closing,
to require a new Franchise Agreement containing economic terms more favorable
to the owner or franchisee than the economic terms of the Existing Franchise
Agreement or that differ in any other material respect from the form of
franchise agreement which Buyer and Franchisor have negotiated previously as
their standard form of franchise agreement. 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), and Buyer shall cooperate with Seller in this respect
and shall make good faith efforts to obtain a waiver of all fees from
Franchisor. 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 be responsible for paying all
costs related to the termination of any 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. 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.

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ARTICLE
VI
BROKERS

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

ARTICLE
VII
REPRESENTATIONS, WARRANTIES AND COVENANTS

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

(a)
Authority; No Conflicts. Seller is a limited liability company duly
formed, validly existing and in good standing in the State of North Carolina.
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

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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 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. Seller has not received written notice of: (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 or from 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,
(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

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Contract: Hazardous Materials means (1)
hazardous wastes as defined by the Resource Conservation and Recovery Act of
1976, as amended from time to time (RCRA), (2) hazardous substances as
defined by the Comprehensive Environmental Response, Compensation and Liability
Act of 1980 (42 U.S.C. 9601 et seq.), as amended by the Superfund
Amendment and Reauthorization Act of 1986 and as otherwise amended from time to
time (CERCLA);
(3) toxic substances as defined by the Toxic Substances Control Act, as
amended from time to time (TSCA), (4) hazardous materials as
defined by the Hazardous Materials Transportation Act, as amended from time to
time (HMTA),
(5) asbestos, oil or other petroleum products, radioactive materials, urea
formaldehyde foam insulation, radon gas 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 available at the
boundaries of the Land and Seller is entitled to connect the Hotel thereto, and
upon connection to the Hotel and payment of all connection or tap on,
usage and similar fees to be paid by Seller, which Seller hereby agrees to pay,
such utilities shall be sufficient and available to service the Hotel.

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

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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. If the Property consists of an existing hotel,
Seller has delivered copies of all (i) Financial Statements for the Hotel, (ii)
operating statements prepared by the Manager for the Hotel, (iii) monthly
financial statements prepared by the Manager for the Hotel and (iv)
independently audited financial statements for the Hotel (Audits). Each of
such statements is, to Sellers knowledge, complete and accurate in all
material respects and, except in the case of budgets prepared in advance of the
applicable operating period to which such budgets relate, fairly presents the
results of operations of the Hotel for the respective periods represented
thereby. Seller has relied upon the Financial Statements 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 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. If the Property consists of an existing hotel, the Hotel has
at all times been operated by Manager in accordance with all applicable laws,
rules, regulations, ordinances and codes.

(m)
Existing Management and Franchise Agreements. If the Property consists
of an existing hotel, Seller has furnished to Buyer true and complete copies of
the any 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. If the Property consists of an existing hotel,
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.

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(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 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.

(c)
Financial Ability. Buyer has the financial ability to perform its
obligations under this Contract and to close the transaction contemplated by
this Contract. Buyer is not now insolvent and will not be rendered insolvent by
the transaction contemplated by this Contract. As used in this section,
insolvent means that the sum of the debts and other probable liabilities of
Buyer exceeds the present fair saleable value of Buyers assets.

(d)
Actions, Suits, Proceedings, Investigations. There is no pending or, to the
Knowledge of Buyer, threatened action, suit, proceeding or investigation before
or by any court, governmental body or agency to restrain or prevent the
consummation of the transactions contemplated under this Contract or that might
affect the right of Buyer to perform its obligations under this Contract.

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
VIII
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.

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8.2
Construction of Hotel.

(a)
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. Prior to the expiration of the Review Period,
Seller shall submit to Buyer and Franchisor the then-current versions of the
plans and specifications for the construction of the Hotel prepared by the
Architect. When finalized by the Architect, but no later than sixty (60) days
after the date of this Contract, Seller shall submit such plans and
specifications to Buyer and Franchisor for approval. Buyers approval of such
plans and specifications shall not be unreasonably withheld, conditioned or
delayed, provided such plans and specifications comply with the schematic
design drawings approved by Buyer during the Review Period, comply with all
applicable building codes and comply with Franchisors requirements for the
Home2 Suites brand. Buyer shall have thirty (30) days after receipt thereof in
which to approve of such plans and specifications. If Buyer objects to any part
of such plans and specifications, Buyer may provide Seller with written notice
of its objection to same within such thirty (30) day period and Buyer shall
deliver a copy of such written notice simultaneously to Construction Lender. If
Buyer fails to so object in writing to any such matter within such time, it
shall be conclusively assumed that Buyer has approved same and at such time,
Seller shall provide notice of the same to Construction Lender. If Buyer
disapproves any part of the plans and specifications by written objection to
Seller within such thirty (30) day period, Seller shall have the opportunity to
cure such item within thirty (30) days of receiving Buyers written notice of
objection. In the event Seller shall fail to cure such item within such thirty
(30) day period, then Buyer may elect: (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 and Buyer shall notify
Construction Lender in writing of its decision, if applicable. Seller shall
obtain the approval of the Franchisor and Buyer with respect to all subsequent
material changes to such plans and specifications, such approval by Buyer not
to be unreasonably withheld, conditioned or delayed. Such plans and
specifications and all revisions thereto, as approved by the Franchisor and
Buyer, shall constitute the Plans and Specifications for purposes of this
Contract.

8.4
Commencement of Construction; Substantial Completion. Seller shall use
commercially reasonable efforts to obtain, or cause the Contractor to obtain, a
building permit and all other permits, licenses and approvals of governmental
authorities required for the

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construction, equipping and furnishing of the Hotel in
accordance with the Plans and Specifications and this Contract, and, if
construction has not already commenced, shall cause the Contractor to commence
construction of the Hotel not later than December 31, 2010. Thereafter, Seller
shall diligently pursue construction of the Hotel in accordance with this
Contract and shall cause the Contractor to Substantially Complete the Hotel no
later than March 31, 2012, 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.

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 fifty percent (50%) 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.

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 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 (subject to the limitation contained below)
and shall provide the Franchisor and Buyer reasonable access to the Property at
least six (6) months 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, in accordance with the Pre-Opening Budget attached
hereto as Exhibit I, up to but not including the Effective Time, regardless
of when such costs are payable, provided, however, that in no event shall
Seller be responsible for such costs in excess of Two Hundred Forty-One
Thousand Eight Hundred Dollars ($241,800.00) (the Pre-Opening Costs). Seller
shall also fund all working capital accounts, reserve accounts and other
accounts required under the Management Agreement or the Franchise Agreement, to
be funded before the Effective Time. Notwithstanding the foregoing, at the
Closing, Seller shall receive a credit in an amount equal to all such accounts
funded by Seller before the Closing Date, provided that (i)

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such accounts were required by the Franchisor or
otherwise approved by Buyer (which approval shall not be unreasonably
withheld), and (ii) Seller shall not receive a credit for any account to the
extent that the same is intended to cover Pre-Opening Costs.

8.8
Construction Warranty. At the Closing, to the extent assignable, 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, and
comply with all federal, state, and municipal laws, ordinances, regulations and
orders relating to the Property;

(d)
Except with respect to utility and related easements and agreements that do not
interfere with the operation of the Hotel and do not affect the marketability
of title to the Real Property, 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

20

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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 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:

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

| |                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i)
 any claim made or asserted against Buyer or any of the Property by a creditor
 of Seller, including any claims based on or alleging a violation of any bulk
 sales act or other similar laws;
| |                                                                                                                                                                                                   
| | (ii)
 the breach of any representation, warranty, covenant or agreement of Seller
 contained in this Contract;                                                                                    
| |                                                                                                                                                                                                   
| | (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 such
 Sellers decision to sell the Property; and                                                                        

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| |                                                                                                                                            
| | -------------------------------------------------------------------------------------------------------------------------------------------
| | (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 breach of any representation, warranty, covenant or agreement of Buyer
 contained in this Contract;                                    
| |                                                                                                                                                 
| | (ii)
 the conduct and operation by or on behalf of Buyer of the Hotel or the
 ownership, use or operation of the Property after the Closing; and
| |                                                                                                                                                 
| | (iii)
 any liability or obligation of Buyer expressly assumed by Buyer at Closing.                                                              

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

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i)
 The party seeking indemnification (the Indemnified Party) shall give prompt
 written notice to the party or parties from which it is seeking
 indemnification (the Indemnifying Party) of any assertion of liability by a
 third party which might give rise to a claim for indemnification based on the
 foregoing provisions of this Section 8.13, 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

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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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 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, an amount
equal to Two Hundred Thousand and No/100 Dollars ($200,000.00) (the Escrow
Funds) shall be withheld from the Purchase Price payable to a
Seller and shall be deposited for a period of one (1) year in an escrow account
with the Title Company pursuant to an escrow agreement reasonably satisfactory
in form and

23

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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 one-year
period, the Escrow Funds deposited by the Seller shall be released to the
Seller.

ARTICLE
IX
CONDITIONS FOR CLOSING

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

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

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

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

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

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

(f)
The Hotel shall be Substantially Completed.

(g)
Any existing management agreement and the Existing Franchise Agreement shall
have been terminated

(h)
The Franchisor shall have executed and delivered the Franchise Agreement as
provided in Article V.

24

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(i)
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 or value of the Property and did not exist as of the
date that Buyer first received such survey.

(j)
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 existing as of the date that Buyer first received the Title Commitment
and disclosed by the Title Commitment or approved by Buyer and (iv) with no
other exceptions to title other than the Permitted Exceptions and normal and
customary utility and similar easements and agreements.

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.

ARTICLE
X
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

25

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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 General Warranty Deed conveying to Buyer fee simple title to the
Real Property, subject only to the Permitted Exceptions (the Deed).

(b)
Bills of Sale. A Bill of sale to Buyer and/or its designated Lessee,
conveying title to the tangible Personal Property.

(c)
Existing Management and 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 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,

26

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and estoppel certificates from tenants under Leases
and the lessors under FF&E Leases in form and substance acceptable to
Buyer.

(h)
Vehicle Titles. If applicable, 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, in form reasonably acceptable to Seller, to effectuate the
conveyance of property similar to the Hotel, with the effect that, after the
Closing, Buyer will have succeeded to all of the rights, titles, and interests
of Seller related to the Hotel and Seller will no longer have any rights,
titles, or interests in and to the Hotel.

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

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

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

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

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

(c)
Miscellaneous. Such other instruments as are contemplated by this
Contract to be executed or delivered by Buyer, reasonably required by Seller or
the Title Company, or customarily executed in the jurisdiction in which the
Hotel is located, in form reasonably acceptable to Buyer, 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.

27

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

ARTICLE
XI
COSTS

All Closing costs
shall be paid as set forth below:

11.1
Sellers Costs. In connection with the sale of the Property
contemplated under this Contract, Seller shall be responsible for 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
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
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
XII
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

28

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

(d)
Accounts. All working capital accounts, reserve accounts and escrow
accounts (including all FF&E 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. Notwithstanding the foregoing, at the
Closing, Seller shall receive a credit in an amount equal to all such accounts
funded by Seller before the Closing Date, provided that (i) such accounts were
required by the Franchisor or otherwise approved by Buyer (which approval shall
not be unreasonably withheld), and (ii) Seller shall not receive a credit for
any account to the extent the same is intended to cover Pre-Opening Costs for
which Seller is responsible and which have not been paid as of the Closing.

(e)
Advance Deposits, etc. All income generated by the Hotel, including
receipts from guest room or suite rentals, all prepaid rentals, room rental
deposits, and all other deposits for advance registration, banquets or services,
whether attributable to the period before the Effective Time or 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, 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.

(g)
Accounts Payable. Any indebtedness, accounts payable, liabilities or obligations of any kind or
nature related to the Seller or the Property for the periods prior to the
Effective Time shall be allocated to the Seller.

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
twenty (120) 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.

29

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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 New 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
XIII
CASUALTY AND CONDEMNATION

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

13.2
Buyers Termination Right. If, prior to Closing and the delivery
of possession of the Property to Buyer in accordance with this Contract, (a)
any condemnation proceeding shall be pending against a substantial portion of
the Hotel or (b) there is any substantial casualty loss or damage to the Hotel,
Buyer shall have the option to terminate this Contract, provided Buyer delivers
written notice to Seller of its election within twenty (20) days after the date
Seller has delivered Buyer written notice of any such loss, damage or
condemnation as provided above, and in such event, the Earnest Money Deposit,
and any interest thereon, shall be delivered to Buyer and thereafter, except as
expressly set forth herein, no party shall have any further obligation or
liability to the other under this Contract. In the context of condemnation,
substantial shall mean condemnation of such portion of 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 Three Hundred Thousand and No/100 Dollars ($300,000.00) in value, provided,
however, that no casualty loss or damage shall be substantial if such
casualty loss or damage is capable of being cured by Seller prior to Closing.

30

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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 (if such
amount shall not have already been paid to the insurer) and assign to Buyer all
insurance proceeds and condemnation awards payable as a result of the same
(subject to Construction Lenders approval), 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. Notwithstanding anything to the
contrary in this Section 13.3, all insurance proceeds and condemnation awards
shall be paid to Construction Lender pursuant to the Construction Loan
documents, until such time as the Construction Loan has been paid in full.

ARTICLE
XIV
DEFAULT REMEDIES

14.1
Buyer Default. If Buyer defaults under this Contract after the
Review Period, and such default continues for fifteen (15) 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, (i) 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 or (ii) Seller may
treat this Contract as being in full force and effect by written notice to
Buyer delivered to Buyer at any time prior to the completion of such cure, in
which event the Seller shall have the right to an action against Buyer for
specific performance.

14.2
Seller Default. If Seller defaults under this Contract, and such
default continues for thirty (30) days following written notice from Buyer to
Seller and Construction Lender, Buyer may elect, as Buyers sole and exclusive
remedy, either (i) to terminate this Contract by written notice to Seller and
Construction Lender, delivered to Seller and Construction Lender 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, 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 and Construction Lender, delivered to Seller and Construction Lender
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 and
all other rights and remedies available at law or in equity.

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

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ARTICLE
XV
NOTICES

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

| |                 |  |                                                                                                                                                          
| | --------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------
| | If to Buyer:    |  | Apple Suites Realty Group, Inc.
 814 E. Main Street
 Richmond, Virginia 23219
 Attention: Sam Reynolds
 Fax No.: (804) 344-8129                          
| |                 |  |                                                                                                                                                          
| | with a copy to: |  | Apple Suites Realty Group, Inc.
 814 E. Main Street
 Richmond, Virginia 23219
 Attention: Legal Dept.
 Fax No.: (804) 344-8129                           
| |                 |  |                                                                                                                                                          
| |                 |  | AND                                                                                                                                                      
| |                 |  |                                                                                                                                                          
| |                 |  | RBC Bank (USA)
 131 N. Church Street
 Rocky Mount, NC 27807
 Attention: W. Mahler Thorp                                                                  
| |                 |  |                                                                                                                                                          
| | If to Seller:   |  | The Generation Companies, LLC
 1822 N.C. Highway 54 East, Suite 300
 Durham, North Carolina 27713
 Attention: H. Mark Daley, III
 Fax No.: (919) 361-9009
| |                 |  |                                                                                                                                                          
| | with a copy to: |  | Poyner Spruill LLP
 301 Fayetteville Street, Suite 1900
 Raleigh, North Carolina 27601
 Attention: Joseph B. Dempster, Jr.
 Fax No.: (919) 783-1075      

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| |  |  |                                                                                        
| |  |  | ---------------------------------------------------------------------------------------
| |  |  | AND                                                                                    
| |  |  |                                                                                        
| |  |  | RBC Bank (USA)
 131 N. Church Street
 Rocky Mount, NC 27807
 Attention: W. Mahler Thorp

Addresses may be changed by the parties hereto by
written notice in accordance with this Section. Any notice allowed hereunder
may be given by a partys legal counsel.

ARTICLE
XVI
MISCELLANEOUS

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

16.2
Binding Effect; Assignment. This Contract shall be binding upon
and shall inure to the benefit of each of the parties hereto, their respective
successors and assigns. Notwithstanding the foregoing, neither Buyer nor Seller
may assign its interest in this Contract or any of its rights or duties
hereunder without the prior written consent of the other party, which consent
shall not be unreasonably withheld, conditioned or delayed, except as follows

(a)
Seller may assign, and Buyers consent shall not be required in connection
with: (i) an assignment of Sellers interests hereunder to a newly-formed
entity in which Seller has an ownership interest and is the controlling officer
or member, and (ii) an assignment of Sellers interests hereunder to
Construction Lender (as defined below).

(b)
Buyer may assign, and neither Sellers nor Construction Lenders consent shall
be required in connection with an assignment of Buyers interests hereunder to
a newly-formed entity in which Buyer or its upstream affiliates has a 100%
ownership interest; provided, however, no assignment shall relieve Buyer of its
obligations hereunder.

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 the state in which the Land is located (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

33

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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 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
provided that such acts, deeds, instruments or agreements are at no expense to
the parties hereto, do not waive any right or remedy of the parties hereto and
do not submit the parties hereto to liability.

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

34

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Affiliates propose to list for sale any Hilton or
Marriott-branded hotel property or properties owned, acquired, constructed or
developed by Seller or its Affiliates and located within a ten (10)-mile radius
of the Hotel (any such other hotel property being referred to as an Other
Property), Seller shall promptly deliver to Buyer written
notice thereof and Buyer shall have the right to see and participate in the
offering and/or otherwise make an offer to purchase any such Other Property.

16.15
Construction Loan.

(a)
As a condition to Closing in favor of Buyer and Seller, Seller shall have
secured financing sufficient for the construction of the Hotel (the Construction
Loan) on terms and conditions acceptable to Seller in its sole
and absolute discretion. Should Seller be unable to secure such financing on
terms acceptable to Seller in its sole and absolute discretion, on or before
December 31, 2010, then any time prior to January 31, 2011 Buyer or Seller may
terminate this Contract by written notice to the other, whereupon: (i) the
Earnest Money Deposit shall be promptly returned by Escrow Agent to Buyer
together with all accrued interest, if any, (ii) Seller shall reimburse Buyer
for its out of pocket diligence costs in an amount not to exceed $25,000, (iii)
this Contract shall be terminated automatically, (iv) all materials supplied by
Seller to Buyer shall be returned promptly to Seller, and (v) both parties will
be relieved of all other rights, obligations and liabilities hereunder, except
for the parties respective obligations pursuant to Sections 3.3 and 16.6
above.

16.16
No Third Party Beneficiary. No agreement or funding arrangement
between Seller and Construction Lender shall be construed as existing for the
benefit of Buyer or be enforceable by Buyer.

16.17
Title to Land. Buyer acknowledges that as of the date of this
Contract, Seller does not own legal title to the Land; however, Seller warrants
that it has entered into a contract to acquire the Land on or about December
31, 2010 (the Land Agreement). If this Contract has not been earlier
terminated, Seller shall provide Buyer with not more than 10 days prior notice
of imminent closing on the Land pursuant to the Land Agreement whereupon Buyer
shall within two (2) business days prior to the closing under the Land
Agreement, deposit the Additional Deposit with Escrow Agent. Notwithstanding
anything contained herein to the contrary, if Seller does not acquire legal
title to the Land on or before December 31, 2010, then any time prior to
January 31, 2011(but in any event before Seller acquires legal title to the
Land), Buyer may terminate this Contract by written notice to Seller,
whereupon: (i) the Earnest Money Deposit shall be promptly returned by Escrow
Agent to Buyer together with all accrued interest, if any, (ii) Seller shall
reimburse Buyer for its out of pocket diligence costs in an amount not to
exceed $50,000, (iii) this Contract shall be terminated automatically, (iv) all
materials supplied by Seller to Buyer shall be returned promptly to Seller, and
(v) both parties will be relieved of all other rights, obligations and
liabilities hereunder, except for the parties respective obligations pursuant
to Sections 3.3 and 16.6 above.

[Signatures Begin
on Following Page]

35

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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 SUITES REALTY GROUP, INC., a Virginia
 corporation
| |                                                          |                      
| | By:                                                      | /s/ David Buckley     | 
| |                                                          |                       | 
| | Name: David Buckley                                     
| | Title: Vice President                                   
| |                                                          |                      
| | SELLER:                                                 
| |                                                          |                      
| | THE GENERATION COMPANIES, LLC,                          
| | a North Carolina limited liability company              
| |                                                          |                      
| | By:                                                      | /s/ H. Mark Daley III | 
| |                                                          |                       | 
| | Name: H. Mark Daley III                                 
| | Title: President                                        

36

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EXHIBIT A

LEGAL
DESCRIPTION OF LAND

---



EXHIBIT B

LIST OF FF&E

To be provided by
Seller at least 15 Business Days prior to Closing

---



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

---



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 _______, 2010 by and among THE
 GENERATION COMPANIES, LLC, a North Carolina limited liability company
 (Seller), APPLE __________________________, 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 _______ ___, 2010 (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 five (5) business
days after receipt of the copy of Buyers Notice to deliver written notice to
Escrow Agent and Buyer objecting to the

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release of the Deposit or applicable portion thereof
to Buyer (Sellers Objection Notice). If Escrow Agent does not receive a
timely Sellers Objection Notice, Escrow Agent shall release 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 five (5) 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

2

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same is delivered to Escrow Agent in writing, signed
by the proper parties to Escrow Agents satisfaction and, in the case of
modification, unless such modification shall be approved by Escrow Agent in
writing.

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 or (iv) on the
next delivery day after such notices are sent by recognized and reputable
commercial overnight delivery service marked for next day delivery, return
receipt requested or similarly acknowledged:

| |     |                             |                                                                                                                                                          
| | --- | --------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i) | If addressed to Seller, to:
| |     |                             |                                                                                                                                                          
| |     |                             | The Generation Companies, LLC
 1822 N.C. Highway 54 East, Suite 300
 Durham, North Carolina 27713
 Attention: H. Mark Daley, III
 Fax No.: (919) 361-9009

3

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| |       |                                   |                                                                                                                                                    
| | ----- | --------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                   | with a copy to:                                                                                                                                    
| |       |                                   |                                                                                                                                                    
| |       |                                   | Poyner Spruill LLP
 301 Fayetteville Street, Suite 1900
 Raleigh, North Carolina 27601
 Attention: Joseph B. Dempster, Jr.
 Fax No.: (919) 783-1075
| |       |                                   |                                                                                                                                                    
| | (ii)  | If addressed to Buyer, to:       
| |       |                                  
| |       | Apple Suites Realty Group, Inc.  
| |       | 814 E. Main Street               
| |       | Richmond, Virginia 23219         
| |       | Attn: Nelson Knight              
| |       | Fax No.: (804) 344-8129          
| |       |                                  
| |       | with a copy to:                  
| |       |                                  
| |       | Apple Suites Realty Group, Inc.  
| |       | 814 E. Main Street               
| |       | Richmond, Virginia 23219         
| |       | Attn: Legal Dept.                
| |       | Fax No.: (804) 344-8129          
| |       |                                  
| | (iii) | If addressed to Escrow Agent, to:
| |       |                                   |                                                                                                                                                    
| |       | Chicago Title Company            
| |       | Attn: Debby Moore                
| |       | 5501 LBJ Freeway, Ste. 200       
| |       | Dallas, Texas 75240              
| |       | Fax No.: (214) 570-0210          

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.

[Signature on Next
Page]

4

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

| |                                 |  |  | 
| | ------------------------------- |  |  | 
| | SELLER:                        
| |                                
| | THE GENERATION COMPANIES, LLC  
| |                                
| | By:                             | 
| |                                 | 
| | Name:                           | 
| |                                 | 
| | Title:                          | 
| |                                 | 
| |                                
| | BUYER:                         
| |                                
| | APPLE SUITES REALTY GROUP, INC.
| |                                
| | By:                             | 
| |                                 | 
| | Name:                           | 
| |                                 | 
| | Title:                          | 
| |                                 | 
| |                                
| | ESCROW
 AGENT:                 
| |                                
| | CHICAGO TITLE COMPANY          
| |                                
| | By:                             | 
| |                                 | 
| | Name:                           | 
| |                                 | 
| | Title:                          | 
| |                                 | 

5

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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.

1

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EXHIBIT I

PRE-OPENING BUDGET

|                                             |  |  |       |  |        |         | 
|-------------------------------------------- |  |  | ----- |  | ------ | ------- | 
|                                             |  |  |       |  | BUDGET |        
|                                             |  |  |       |  |        |        
|                                             |  |  |       |  |        |         | 
|Guest Supply--Rooms                          |  |  |       |  | $      | 40,000  | 
|Guest Room & Pool Linen                      |  |  |       |  | $      | 55,000  | 
|Restaurant/ Displayware/Flatware/Small Wares |  |  |       |  | $      | 15,000  | 
|P & G--Laundry & Housekeeping Supplies       |  |  |       |  | $      | 2,800   | 
|Rising Signs/Focus Services                  |  |  |       |  | $      | 5,000   | 
|Snack Shop Supplies                          |  |  |       |  | $      | 2,300   | 
|Business Center Computers/Printer            |  |  |       |  | $      | 2,200   | 
|Sysco--Breakfast food                        |  |  |       |  | $      | 2,500   | 
|HD Supply-Maintenance                        |  |  |       |  | $      | 9,000   | 
|Staff Uniforms                               |  |  |       |  | $      | 5,000   | 
|Front Desk                                   |  |  |       |  | $      | 7,000   | 
|Memberships & Promotional items              |  |  |       |  | $      | 4,000   | 
|Pre-Opening Advertising/Sales                |  |  |       |  | $      | 6,000   | 
|Hilton Training                              |  |  |       |  | $      | 22,000  | 
|Preopening Payroll **                        |  |  |       |  | $      | 60,000  | 
|Pre-Opening Travel                           |  |  |       |  | $      | 4,000   | 
|                                             |  |  |       |  |        |         | 
|                                            
|Total                                        |  |  | Total |  | $      | 241,800 | 
|                                             |  |  |       |  |        |         | 

|                         |  |        |        | 
|------------------------ |  | ------ | ------ | 
|**Pre
 Opening Payroll   |  | Budget |       
|                         |  |        |       
|                         |  |        |        | 
|General Manager          |  | $      | 23,000 | 
|Director of Sales        |  | $      | 13,300 | 
|Guest Service Manager    |  | $      | 3,500  | 
|House Keeping Manager    |  | $      | 2,500  | 
|Maintenance Engineer     |  | $      | 2,500  | 
|Front Desk& Audit        |  | $      | 7,200  | 
|Room Attendant & Laundry |  | $      | 7,000  | 
|Houseman                 |  | $      | 1,000  | 
|Total                    |  | $      | 60,000 | 

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