Exhibit
10.86


Phoenix, AZ (Courtyard)
Phoenix, AZ (Residence Inn)


PURCHASE CONTRACT


between


HAPPY VALLEY RES, LLC (“SELLER”)


 (“SELLER”)


AND


APPLE
NINE HOSPITALITY OWNERSHIP, INC.


 (“BUYER”)


Dated:
September 10, 2010





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

 	
  

 	
 7

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 2.1

 	
  

 	
 Purchase and Sale

 	
  

 	
 7

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 2.2

 	
  

 	
 Purchase Price

 	
  

 	
 7

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 2.3

 	
  

 	
 Allocation

 	
  

 	
 7

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 2.4

 	
  

 	
 Payment

 	
  

 	
 7

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 2.5

 	
  

 	
 Earnest Money Deposit

 	
  

 	
 7

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE III

 	
  

 	
 REVIEW PERIOD

 	
  

 	
 8

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 3.1

 	
  

 	
 Review Period

 	
  

 	
 8

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 3.2

 	
  

 	
 Due Diligence Examination

 	
  

 	
 9

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 3.3

 	
  

 	
 Restoration

 	
  

 	
 10

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 3.4

 	
  

 	
 Seller Exhibits

 	
  

 	
 10

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE IV

 	
  

 	
 SURVEY AND TITLE
 APPROVAL

 	
  

 	
 10

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4.1

 	
  

 	
 Survey

 	
  

 	
 10

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4.2

 	
  

 	
 Title

 	
  

 	
 11

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4.3

 	
  

 	
 Survey or Title Objections

 	
  

 	
 11

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE V

 	
  

 	
 TERMINATION OF
 MANAGEMENT AGREEMENT

 	
  

 	
 12

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE VI

 	
  

 	
 BROKERS

 	
  

 	
 12

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE VII

 	
  

 	
 REPRESENTATIONS,
 WARRANTIES AND COVENANTS

 	
  

 	
 12

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 7.1

 	
  

 	
 Seller’s Representations, Warranties and Covenants

 	
  

 	
 12

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 7.2

 	
  

 	
 Buyer’s Representations, Warranties and Covenants

 	
  

 	
 15

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 7.3

 	
  

 	
 Survival

 	
  

 	
 16

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE VIII

 	
  

 	
 ADDITIONAL
 COVENANTS

 	
  

 	
 17

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 8.1

 	
  

 	
 Subsequent Developments

 	
  

 	
 17

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 8.2

 	
  

 	
 Operations

 	
  

 	
 17

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 8.3

 	
  

 	
 Third Party Consents

 	
  

 	
 18

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 8.4

 	
  

 	
 Employees

 	
  

 	
 18

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 8.5

 	
  

 	
 Estoppel Certificates

 	
  

 	
 18

 


i









	
  

 	
  

 	
  

 	
  

 	
  

 
	
 8.6

 	
  

 	
 Access to Financial Information

 	
  

 	
 19

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 8.7

 	
  

 	
 Bulk Sales

 	
  

 	
 19

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 8.8

 	
  

 	
 Indemnification

 	
  

 	
 19

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 8.9

 	
  

 	
 Liquor Licenses

 	
  

 	
 22

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE IX

 	
  

 	
 CONDITIONS FOR CLOSING

 	
  

 	
 22

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 9.1

 	
  

 	
 Buyer’s Conditions for Closing

 	
  

 	
 22

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 9.2

 	
  

 	
 Seller’s Conditions for Closing

 	
  

 	
 23

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE X

 	
  

 	
 CLOSING AND
 CONVEYANCE

 	
  

 	
 24

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 10.1

 	
  

 	
 Closing

 	
  

 	
 24

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 10.2

 	
  

 	
 Deliveries of Seller

 	
  

 	
 24

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 10.3

 	
  

 	
 Buyer’s Deliveries

 	
  

 	
 25

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE XI

 	
  

 	
 COSTS

 	
  

 	
 26

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 11.1

 	
  

 	
 Seller’s Costs

 	
  

 	
 26

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 11.2

 	
  

 	
 Buyer’s Costs

 	
  

 	
 26

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE XII

 	
  

 	
 ADJUSTMENTS

 	
  

 	
 27

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 12.1

 	
  

 	
 Adjustments

 	
  

 	
 27

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 12.2

 	
  

 	
 Reconciliation and Final Payment

 	
  

 	
 28

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 12.3

 	
  

 	
 Employees

 	
  

 	
 29

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE XIII

 	
  

 	
 CASUALTY AND
 CONDEMNATION

 	
  

 	
 29

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 13.1

 	
  

 	
 Risk of Loss; Notice

 	
  

 	
 29

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 13.2

 	
  

 	
 Buyer’s Termination Right

 	
  

 	
 29

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 13.3

 	
  

 	
 Procedure for Closing

 	
  

 	
 30

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE XIV

 	
  

 	
 DEFAULT REMEDIES

 	
  

 	
 30

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 14.1

 	
  

 	
 Buyer Default

 	
  

 	
 30

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 14.2

 	
  

 	
 Seller Default

 	
  

 	
 30

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 14.3

 	
  

 	
 Attorney’s Fees

 	
  

 	
 30

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE XV

 	
  

 	
 NOTICES

 	
  

 	
 30

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE XVI

 	
  

 	
 MISCELLANEOUS

 	
  

 	
 31

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 16.1

 	
  

 	
 Performance

 	
  

 	
 31

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 16.2

 	
  

 	
 Binding Effect; Assignment

 	
  

 	
 32

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 16.3

 	
  

 	
 Entire Agreement

 	
  

 	
 32

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 16.4

 	
  

 	
 Governing Law

 	
  

 	
 32

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 16.5

 	
  

 	
 Captions

 	
  

 	
 32

 


ii









	
  

 	
  

 	
  

 	
  

 	
  

 
	
 16.6

 	
  

 	
 Confidentiality

 	
  

 	
 32

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 16.7

 	
  

 	
 Closing Documents

 	
  

 	
 32

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 16.8

 	
  

 	
 Counterparts

 	
  

 	
 32

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 16.9

 	
  

 	
 Severability

 	
  

 	
 32

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 16.10

 	
  

 	
 Interpretation

 	
  

 	
 33

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 16.11

 	
  

 	
 (Intentionally Omitted)

 	
  

 	
 33

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 16.12

 	
  

 	
 Further Acts

 	
  

 	
 33

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 16.13

 	
  

 	
 Joint and Several Obligations

 	
  

 	
 33

 



SCHEDULES:


	
  

 	
  

 
	
 Schedule 3.1

 	
 Due Diligence List

 
	
  

 	
  

 
	
 EXHIBITS:

 	
  

 
	
  

 	
  

 
	
 Exhibit A

 	
 Legal Description of Land

 
	
 Exhibit B

 	
 Environmental Reports

 
	
 Exhibit C

 	
 Escrow Agreement

 
	
 Exhibit D

 	
 FF&E List

 
	
 Exhibit E

 	
 New Management Agreement

 
	
 Exhibit F

 	
 Post-Closing Agreement

 
	
 Exhibit G

 	
 Consents and Approvals

 
	
 Exhibit H

 	
 Property Agreements

 
	
 Exhibit I

 	
 Pending Claims or Litigation

 
	
 Exhibit J

 	
 Liquor License Agreement

 
	
 Exhibit K

 	
 Other Contracts

 


iii





PURCHASE
CONTRACT


          This
PURCHASE CONTRACT (this “Contract”)
is made and entered into as of September 10, 2010, by and between HAPPY VALLEY RES,
LLC, an Indiana limited liability company (“Seller”) with a principal office at 1000 East 80th
Place, Suite 600 North, Merrillville, Indiana 46410 and APPLE NINE HOSPITALITY
OWNERSHIP, INC., a Virginia corporation, with its principal office at 814 East
Main Street, Richmond, Virginia 23219 (“Buyer”)



RECITALS


          A.
Seller is the fee simple owner of those certain hotel properties commonly known as the Residence Inn Phoenix North/Happy Valley,
located at 2035 Whispering Wind Drive, Phoenix, AZ 85085 (the “Residence Inn Hotel” and the Courtyard Phoenix North/Happy Valley,
located at 2029 Whispering Wind Drive, Phoenix, AZ 85085 (the “Courtyard Hotel”, and together with the Residence Inn Hotel,
collectively, the “Hotels” and sometimes, individually, a “Hotel”) identified in on Exhibit A attached hereto and incorporated by
reference.  


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


AGREEMENT:


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


ARTICLE
I

DEFINED TERMS


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


          “Additional
Deposit” shall mean One Million and No/100 Dollars ($1,000,000.00).


          “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, 


1







street, road or avenue, open or
proposed, in front of or abutting or adjoining the Land, (iii) any strips or
gores of real estate adjacent to the Land, and (iv) the use of all alleys,
easements and rights-of-way, if any, abutting, adjacent, contiguous to or
adjoining the Land.



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


          “Business
Day” shall mean any day other than a Saturday, Sunday or legal holiday in
the state in which the 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
Plans” shall mean the construction plans, surveys, soil reports,
engineering reports, inspection reports, and other technical descriptions and
reports to the extent the same are (i) in the possession or control of Seller
and (ii) can be transferred or assigned by Seller without default, penalty or
payment of a fee or charge.


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


          “Deposits”
shall mean, all prepaid rents and deposits received by Seller from any tenant
or guest of the Property, refundable security deposits and rental deposits
received by Seller from any tenant or guest of the Property, and all other
deposits for advance reservations, banquets or future services received by
Seller from any tenant or guest of the Property, to the extent the same is
received or collected in connection with the use or occupancy of the
Improvements. “Deposits” shall exclude all reserves and/or accounts funded by
Seller, including without limitation, reserves for real property taxes,
reserves to pay insurance, reserves to cover all other potential liabilities
and claims, utility deposits, any reserves for replacement of FF&E and for
capital repairs and/or improvements.


          “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
Reports” shall mean those environmental reports and studies relating to the
Land as are listed on Exhibit B
attached hereto.


          “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), and shall be
in the form attached hereto as Exhibit C.


          “Escrow
Funds” shall have the meaning set forth in Section 8.9.


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




2






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




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



          “FF&E”
shall mean all appliances, machinery, devices, fixtures, appurtenances,
equipment, furniture, furnishings and articles of tangible personal property of
every kind and nature whatsoever owned by Seller, and located at or used in
connection with the ownership, operation or maintenance of the Real Property, but
expressly excluding (i) all property owned by Seller or any of its
Affiliates not normally located at such Real Property and used, but not
exclusively, in connection with the operation of such Real Property, (ii) all
items, tangible or intangible, containing proprietary information, (iii)
computer software, except to the extent that such software is used in
connection with the operation of the Real Property and may be assigned upon
assignment of a license to Buyer, which Buyer agrees to assume, (iv) all cash
in vending machines and ATMs at the Real Property and in cash accounts in
Seller’s or Manager’s name, and (v) such other items as are specifically
reserved for herein by Seller. A current list of FF&E is attached hereto as
Exhibit D.


          “FF&E
Leases” shall mean, to the extent assignable by Seller without default,
penalty or payment of a fee or charge, all leases of any FF&E by Seller and
other contracts to which Seller is a party permitting the use of any FF&E
at the Improvements.


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


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


          “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 to the Land, and all related facilities.


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


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


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


          “Land”
shall mean, collectively, a fee simple absolute interest in the real property
more fully described in Exhibit A,
which is attached hereto and incorporated herein by reference, together with
all rights (including without limitation all air rights, mineral 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, to the extent assignable by Seller, all leases and occupancy
agreements, if any, “trade-out” agreements, advance bookings, convention
reservations, or other agreements demising space in, providing for the use or
occupancy of, or otherwise similarly 


3







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, concessionaires or other entities
thereunder.


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


          “Licenses”
shall mean, to the extent assignable by Seller without default, penalty or the
payment of a fee or charge, all permits, licenses, 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 Hotels, 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 each Hotel under
its applicable Brand.


          “Liquor
Licenses” shall have the meaning set forth in Section 8.9.


          “Manager”
shall mean White Lodging Services Corporation, an Indiana corporation.


          “New
Franchise Agreement” shall mean the franchise license agreement to be
entered into between Buyer and the Franchisor, granting to Buyer a franchise to
operate each Hotel under the respective Brand on and after the Closing Date. 


          “New
Management Agreement” means the management agreement to be entered into
between Buyer and the Manager for the operation and management of each Hotel on
and after the Closing Date, the form of which is attached hereto as Exhibit E.


          “Other
Contracts” shall have the meaning set forth in Section 9.1.


          “Other
Properties” shall have the meaning set forth in Section 9.1.


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


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


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


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


          “Post-Closing
Agreement” shall have the meaning set forth in Section 8.9 and shall be in
the form attached hereto as Exhibit F.


          “Property”
shall mean, collectively, (i) all of the following with respect to each Hotel:
the Real Property, FF&E, Supplies, Leases, Deposits, Records, Service
Contracts, Warranties, Licenses, FF&E Leases, Construction Plans,
Tradenames, Utility Reservations, as well as all other real, personal or
intangible property of Seller related to any of the foregoing and (ii) any and
all of the following, to the extent the same are transferable or assignable
without default, 


4







penalty or the payment of a fee or charge, 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, Records, Service Contracts, Warranties, Licenses, Tradenames,
Construction Plans and FF&E Lease. 



          “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 Hotels. 


          “Records”
shall mean, to the extent the same are transferable or assignable, all books,
records, promotional material, tenant data, guest history information (other
than any such information owned exclusively by the Manager), marketing and
leasing material and forms (including but not limited to any such records,
data, information, material and forms in the form of computerized files located
at the Hotels), 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 Hotels) owned by Seller and/or in Seller’s possession or
control, or to which Seller has access or may obtain from the Manager, that are
used in or relating to the Property and/or the operation of the Hotels,
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 Hotels and a list of the general contractors, architects
and engineers providing goods and/or services in connection with the
construction of the Hotels, all construction warranties and guaranties in effect
at Closing and copies of the final plans and specifications for the Hotels.


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


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


          “Seller’s
knowledge” shall mean the actual (and not constructive or imputed)
knowledge of Lawrence E. Burnell or Deno Yiankes.


          “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, to the extent the same are transferable or
assignable without default, penalty or the payment of a fee or charge, all
maintenance, supply, service or utility contracts or agreements in effect as of
the Closing Date.


          “Supplies”
shall mean all merchandise, supplies, inventory and other items owned by Seller
and 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) that may legally be transferred  


5







and assigned, inventory
(opened or unopened), 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
Hotels), guest cleaning, paper and other supplies, upholstery material,
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 8.3.


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


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


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


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


          “Tradenames”
shall mean, to the extent assignable or transferable without default, penalty
or the payment of a fee or charge, all of Seller’s interest in any 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 each Hotel is affiliated by franchise or license is a protected name or
registered service mark of such hotel chain and cannot be transferred to Buyer
by this Contract, provided that all such franchise, license, 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 if
assignable without default, penalty or the payment of a fee or charge).


          “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. Seller
shall be responsible for any requests or documents to transfer the Utility
Reservations, at Seller’s sole cost and expense.


          “Warranties”
shall mean, to the assignable or transferable without default, penalty, voiding
or payment of a fee or charge, all warranties, guaranties, indemnities and
claims for the benefit of Seller with respect to each Hotel, the Property or any
portion thereof, including, without limitation, all warranties and guaranties
of the development, construction, completion, installation, equipping and
furnishing of the Hotels, and all indemnities, bonds and claims of Seller
related thereto and available as of Closing.


6





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


          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 THIRTY MILLION and No/100 Dollars ($30,000,000.00) (the “Purchase Price”). The Purchase
Price is allocated between the Hotels as follows:  


                    (a)     Courtyard Hotel          - $16,000,000.00

                    (b)     Residence Inn Hotel   - $14,000,000.00


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


          2.4
Payment. The portion of the Purchase Price, less the Earnest
Money Deposit, to the extent that Buyer elects to have it applied against the
Purchase Price (as provided below), less 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, shall, at Buyer’s
election, be returned to Buyer or shall be paid over to Seller by Escrow Agent
to be applied to the portion of the Purchase Price on behalf of Buyer and the
Escrow Funds shall be deposited into an escrow account pursuant to the
Post-Closing Agreement as contemplated by Section 8.9.


          2.5
Earnest Money Deposit.


                    (a)
Within three (3) Business Days after the full execution and delivery of this
Contract, Buyer shall deposit the sum of Six Hundred Thousand and No/100 Dollars
($600,000.00) in cash, certified bank check or by wire transfer of immediately
available funds (the “Initial Deposit”)
with the Title Company, as escrow agent (“Escrow
Agent”), which sum shall be held by Escrow Agent as earnest
money. If, pursuant to the provisions of Section 3.1 of this Contract, Buyer
elects to terminate this Contract at any time prior to the expiration of the
Review Period, then the Escrow Agent shall return the Earnest Money Deposit to
Buyer promptly upon written notice to that effect from Buyer. If Buyer does not
elect to terminate this Contract on or before the expiration of the Review
Period, Buyer shall, prior to the expiration of the Review Period, deposit the
Additional Deposit with the Escrow Agent. The Initial Deposit and the
Additional Deposit, and all interest accrued thereon, shall hereinafter be referred
to as the 


7






“Earnest Money Deposit.” As between the Hotels, the Earnest Money Deposit shall be split 50/50.



                    (b)
The Earnest Money Deposit shall be held by Escrow Agent subject to the terms
and conditions of an Escrow Agreement dated as of the date of this Contract
entered into by Seller, Buyer and Escrow Agent (the “Escrow Agreement”). The Earnest Money
Deposit shall be held in an interest-bearing account in a federally insured
bank or savings institution reasonably acceptable to Seller and Buyer, with all
interest to accrue to the benefit of the party entitled to receive it and to be
reportable by such party for income tax purposes; provided, however,
to the extent that Buyer instructs the Escrow Agent to apply the Earnest Money
Deposit toward the Purchase Price in accordance with Section 2.4, interest
shall be deemed to have accrued to the benefit of Buyer and be reportable by
Buyer 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 forty-five (45) days after the date of this
Contract, unless a longer period of time is otherwise provided for in this
Contract (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 five (5) Business Days following the date of this Contract, Seller, at
Seller’s sole cost and expense, will deliver, or cause the Manager to deliver
to Buyer to the extent the same are in the possession or control of Seller 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 and Licenses relating to the Hotels or any part thereof;


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


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


                    (d)
All Construction Plans (regardless of whether the same can be transferred or
assigned), the most recent title policies, reports or commitments, current
zoning information and marketing and economic data relating to the Hotels and
the construction thereof, as well as copies of the most recent environmental
reports, topographical, boundary or “as built” surveys,


8






engineering reports,
subsurface studies and other Construction Plans relating to or affecting the
Hotels.


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


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


                    (g)
Any other information described on Schedule 3.1 attached hereto.


          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 in
the possession and control of Seller and relevant to the management, operation,
use, occupancy or leasing of or title to the applicable Hotel and the plans
specifications for development of the Hotels. Notwithstanding any contrary
provision of this Contract, such materials shall, at Seller’s election, be
placed in an e-room to which Buyer shall have secured access and subject to the
provisions of Section 16.6.


          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, (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. Upon Buyer’s election to terminate this Contract in
accordance to this or any other provision herein, upon the request of Seller
and reimbursement to Buyer for the cost thereof, Buyer shall deliver to Manager
copies of all third-party reports and studies obtained by Buyer and relating to
the Property. All such reports and studies shall be delivered by Buyer without
representation or warranty as to accuracy.


          3.2
Due Diligence Examination. At any time during the Review Period,
and thereafter through Closing of the Property, Buyer and/or its
representatives and agents shall have the right to enter upon the Property at
all reasonable times and after providing reasonable notice to Seller for the
purposes of reviewing all Records except such materials that are available in
the e-room, and other reasonably requested 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 (the “Due
Diligence Examination”). Seller shall have the right to have its
designated representative present during Buyer’s physical inspections of its
Property, provided that failure of Seller to do so shall not prevent Buyer from
exercising its due diligence, review and inspection rights hereunder. Buyer
agrees to exercise reasonable care when visiting the Property, in a manner
which shall not materially adversely affect the operation of the Property.
 


9





Prior to such inspections, Buyer and its representatives shall be covered by a
policy of insurance (which may be a master or umbrella policy) insuring Buyer,
Buyer’s agents, Manager and Seller, against any and all liability arising out
of Buyer’s or Buyer’s agents’ entry upon and inspection of the Property, including, without limitation, any loss
or damage to the Property, with coverage in the amount of not less than Two
Million Dollars ($2,000,000) per occurrence. All policies of insurance shall
name Manager and Seller as additional insureds and shall be primary, for
occurrences related to entry on the Property by Buyer and its agents. Buyer
shall provide a certificate of such insurance coverage to Manager.


          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. To the extent that, in
connection with its investigations, Buyer or its agents, representatives or
contractors, damages or disturbs the Property, Buyer shall be responsible for
returning the same to substantially the same condition that existed immediately
prior to such damage or disturbance. To the extent that Seller elects, in its
sole discretion, to undertake the restoration of the Property damaged by Buyer
or its agents, representatives or contractors, Buyer shall reimburse Seller for
the reasonable costs of such restoration provided that Seller has notified
Buyer of the actions proposed to be taken by Seller and the anticipated cost
thereof prior to Seller commencing such restoration. The preceding sentence
notwithstanding, Seller shall have no obligation to notify Buyer (and Buyer
shall not be relieved of its obligation to reimburse Seller) prior to
undertaking restoration of a Property if Seller determines, in its reasonable judgment,
that immediate remediation is or may be required to prevent injury to persons
or the Property. In addition, Buyer shall indemnify, defend and hold harmless
Seller and Manager from and against any and all expense, loss or damage
(including, without limitation, reasonable attorneys’ fees) which Seller (as
owner of the Property) or Manager (as manager) may incur as a result of any act
or omission of Buyer or its agents in connection with any such inspections. The
foregoing indemnification agreement shall survive the termination of this
Contract or the Closing hereunder, as applicable, for a period of one year.


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


ARTICLE
IV

SURVEY AND TITLE APPROVAL


          4.1
Survey. Seller has delivered to Buyer copies of the most recent
surveys of the Real Property. In the event that an update of the survey or a
new survey (such updated or new surveys being referred to as the “Survey”) are desired by Buyer, then
Buyer shall be responsible for all costs related thereto. In the event that
Buyer shall arrange for the preparation of any survey for the Real Property,
Buyer agrees to instruct the surveyor preparing such survey to deliver copies
to (i) Ann Bowman at the address provided in Article XV and (ii) Anne-Therese
Bechamps, at Venable LLP, 210 Allegheny Avenue, Towson, Maryland 21204,
atbechamps@venable.com.



10






          4.2
Title. Seller has delivered to Buyer its existing title insurance
policy, for its Real Property. During the Review Period, Buyer shall have
obtained at its sole cost and expense (i) a  title commitment (the “Title Commitment”) issued by Chicago Title Company, Attn:
Debby Moore, 5501 LBJ Freeway, Ste. 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 (ii) true,
complete, legible and, where applicable, recorded copies of all documents and
instruments (the “Exception Documents”)
referred to or identified in the Title Commitment, including, but not limited
to, all deeds, lien instruments, leases, plats, surveys, reservations,
restrictions, and easements affecting the Real Property. Buyer’s obligations
under this Contract are conditioned upon Buyer being able to obtain, at its
sole cost and expense, for the Real Property 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, (collectively, the “Title Policy”) consistent in all
material respects with the Title Commitment. Buyer agrees to instruct the Title
Company to deliver copies of the Title Commitment and Exception Documents to
(i) Ann Bowman and (ii) Anne-Therese Bechamps as provided in Section 4.1.


          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. Any contrary provisions of Article XV
concerning what does or does not constitute delivery notwithstanding, Buyer
shall provide and Seller must actually receive, any notice of objections on or
before the fifth (5th) day prior to the expiration of the Review
Period (the “Title Review Period”).
If Seller has not actually received a written notice of objection to any such
matter set forth in the Survey or Title Commitment prior to the expiration of
the Title Review Period, it shall be conclusively assumed that Buyer has
approved same. If Buyer disapproves any condition of title, survey or other
matters by written objection to Seller on or before the expiration of the Title
Review Period, Seller shall elect either to attempt to cure or not cure any
such item and shall notify Buyer of its election by written notice within five
(5) days after its receipt of notice from Buyer setting forth title or survey
objection. 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. 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 applicable Hotel is located, so long as Seller provides
the appropriate owner’s affidavit, gap indemnity or other documentation
reasonably required by the Title Company for such omission) are hereinafter
referred to as the “Permitted Exceptions.”
In no event shall Permitted Exceptions include liens, or documents evidencing
liens, securing any indebtedness (including vehicle or FF&E leases or financing
arrangements) 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, except to the extent caused by
Buyer. If a vehicle or FF&E


11







lease or other financing cannot be released at
Closing, Seller shall credit Buyer at Closing with the amount necessary to
fully pay off such lease or financing over its term.



ARTICLE V

MANAGEMENT AGREEMENT AND FRANCHISE AGREEMENT


                    (a)
At or prior to the Closing, Seller shall terminate the Existing Management
Agreements and the Existing Franchise Agreements, and Seller shall be solely
responsible for all claims and liabilities arising thereunder on, prior to or
following the Closing Date, except termination or similar fees, which shall be
paid by Buyer. Seller shall be responsible for paying all costs related to the
termination of the Existing Management Agreements and Buyer shall be responsible
for paying all reasonable and actual costs of the Franchisor related to the
assignment or termination, as applicable, of the Existing Franchise Agreements.


                    (b)
At Closing, Buyer shall enter into the New Management Agreement for each Hotel in the form attached
as Exhibit E and the New
Franchise Agreements, 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). 


                    (c)
Seller shall use best efforts to promptly provide all information required by
the Franchisor in connection with the New Franchise Agreement. Prior to the
expiration of the Review Period, Buyer and Franchisor shall agree on the form
and substance of the New Franchise Agreement. Except as otherwise provided in
this Contract, the New Franchise Agreement shall contain such terms and
conditions as are acceptable to Buyer in its sole and absolute discretion. 


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 Indiana. 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,



12





delivery or performance by Seller of this Contract, except as set forth in Exhibit G, 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 articles of organization, limited liability company
agreement or regulations, 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 Hotels, except as set forth in Exhibit G. 


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


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


                    (d)
Property Agreements. A complete list of all FF&E Leases, Service
Contracts and Leases (other than those entered into by the Manager on its own
behalf) used in or otherwise relating to the operation and business of the
Hotels is attached hereto as Exhibit H.
The assets constituting the Property to be conveyed to Buyer hereunder
constitute all of the property and assets of Seller (other than that of the
Manager) used in connection with the operation and business of the Hotels. The
Service Contracts, Leases, Warranties and FF&E Leases disclosed on Exhibit H or to be delivered to Buyer
pursuant to Section 3.1 are in full force and effect, and to Seller’s
knowledge, no default has occurred and is continuing thereunder and no
circumstances exist which, with the giving of notice, the lapse of time or
both, would constitute such a default. No party has any right or option to
acquire the Hotels or any portion thereof, other than Buyer. 


                    (e)
Pending Claims. There are no (i) claims, demands, litigation,
proceedings or governmental investigations pending or to Seller’s knowledge
threatened, against Seller, the Manager or any Affiliate of any of them
(collectively, “Seller Parties”)
or related to the business or assets of the Hotels, except as set forth on Exhibit I 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. To Seller’s knowledge, there are no other:
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 Hotels, 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 Hotels or might become a lien on either Hotel (collectively, the “Pending Claims”).



13






                    (f)
Environmental. Seller has received no written notice that the Real
Property is in violation of any Federal, State or local laws governing the
storage, release or disposal of any hazardous waste, contaminants, oil,
radioactive or other hazardous material on the Real Property, or any portion
thereof; and to Seller’s knowledge, except as otherwise disclosed in the
Environmental Reports included on Exhibit
B hereto, copies of which shall be made available to Buyer, the
Real Property is free from any such hazardous waste, contaminants, oil,
radioactive and other hazardous materials, except for amounts of any such
materials as are reasonably necessary for the maintenance, repair and operation
of the Hotels on the Real Property and which are stored, maintained and used in
accordance with applicable law.


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


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


                    (i)
Licenses, Permits and Approvals. Seller has not received any written
notice, and 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. To Seller’s knowledge, (i) Seller has received all
licenses, permits and approvals required or needed for the lawful conduct,
occupancy and operation of the business of the Hotels, and (ii) each applicable
license and permit is in full force and effect, and will, if assignable or
transferable as provided in this Contract, be received and in full force and
effect as of the Closing. No licenses, permits or approvals necessary for the
lawful conduct, occupancy or operation of the business of the Hotels, to
Seller’s knowledge, requires any approval of a governmental authority for
transfer of the Property except as set forth in Exhibit G.


                    (j)
Financial Statements. Seller has delivered copies of all material (i)
Financial Statements for the Hotels, (ii) operating statements prepared by the
Manager for the Hotels, and (iii) monthly financial statements prepared by the
Manager for the Hotels. 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 


14





such
budgets relate, fairly presents the results of operations of the Hotels for the
respective periods represented thereby. Seller has relied upon the Financial
Statements in connection with its ownership and operation of the Hotels, and
there are no independent audits or financial statements prepared by third parties relating to the
operation of the Hotels other than the Financial Statements prepared by or on
behalf of the Manager.


                    (k)
Employees. All employees employed at the Hotels are the employees of the
Manager. There are, to Seller’s knowledge, no (i) unions organized at the
Hotels, (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 Hotels, or (iii) collective bargaining or other
labor agreements to which Seller or the Manager or either Hotel is bound with
respect to any employees employed at the Hotels.


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


                    (m)
Construction of Hotels. 


                              (i)
To Seller’s knowledge, each Hotel has been constructed in a good and workmanlike
manner without encroachments except as noted on the Survey and in accordance in
all material respects with the Construction Plans. To Seller’s knowledge, each
Hotel has received all building permits and certificates of occupancy necessary
for the operation thereof, and is in compliance with applicable zoning,
platting, subdivision, health, safety and similar laws, rules, regulations,
ordinances and codes.


                              (ii)
To the best of Seller’s knowledge, the Personal Property is in good condition
and operating order.


                    (n)
Liability for Breach of Seller Representations. Buyer shall give written
notice to Seller if it determines that Seller has breached any representation
or warranty made in this Section 7.1. If, as a consequence of such breach,
Buyer shall have suffered a loss or incurred damages, then Seller shall be
liable to Buyer for payment of such damages. The preceding sentence
notwithstanding, in no event shall the liability of Seller with respect to
breaches of any representations or warranties made in this Section 7.1 exceed,
in the aggregate, the sum of ten percent (10%) of the Purchase Price.


                    (o)
Disclaimer of Express or Implied Representations. Except as otherwise
expressly provided in this Contract, Seller disclaims the making of any
representations or warranties, express or implied, regarding the Property or
matters affecting the Property. 


          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 during the Review Period 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 


15







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)
Buyer’s Independent Investigations. Pursuant to the terms of this
Contract, Seller has agreed to give Buyer the opportunity to investigate all
physical aspects of the Property, and to make all such independent inspections
and/or investigations of the Property, as Buyer deems necessary or desirable.
Buyer acknowledges that it has entered into this Contract with the intention of
making and relying upon its own investigation or that of third parties with
respect to the physical, environmental, economic and legal condition of the
Property.


                    (d)
No Reliance. SUBJECT ONLY TO THE EXPRESS COVENANTS, REPRESENTATIONS AND
WARRANTIES SET FORTH HEREIN MADE BY SELLER FOR THE BENEFIT OF BUYER: IN
ENTERING INTO THIS CONTRACT, BUYER HAS NOT RELIED ON ANY REPRESENTATION,
WARRANTY, PROMISE OR STATEMENT, EXPRESS OR IMPLIED, OF SELLER OR ANYONE
(INCLUDING MANAGER) ACTING FOR OR ON BEHALF OF SELLER; AND THAT, AS A MATERIAL
INDUCEMENT TO THE EXECUTION AND DELIVERY OF THIS CONTRACT BY SELLER, BUYER
ACKNOWLEDGES THAT THE PROPERTY WILL BE ACQUIRED BY BUYER IN ITS “AS IS”
CONDITION, WITH ALL FAULTS.


                    (e)
Liability for Breach of Buyer Representations. Seller shall give written
notice to Buyer if it determines that Buyer has breached any representation or
warranty made in this Section 7.2. If, as a consequence of such breach, Seller
shall have suffered a loss or incurred damages, then Buyer shall be liable to
Seller for payment of damages. The preceding sentence notwithstanding, in no
event shall the liability of Buyer with respect to breaches of any
representations or warranties made in this Section 7.2 exceed, in the
aggregate, the sum of ten percent (10%) of the Purchase Price. 


                    (f)
Seller Representations Deemed Waived. To the extent that Buyer has
actual (not imputed or constructive) knowledge, prior to Closing, that any of
Seller’s representations or warranties are inaccurate, untrue, or incorrect and
Buyer proceeds to close hereunder, then such misrepresentation or breach of
warranty shall be deemed waived by Buyer. 


          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. 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
the Deed.



16







ARTICLE
VIII

ADDITIONAL COVENANTS


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


          8.2
Operations. From and after the date hereof through the Closing on
the Property, Seller shall substantially 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)
Continue to maintain the Property generally in accordance with prudent business
practices and pursuant to and in substantial compliance with the Existing
Management Agreement and the Existing Franchise Agreement, including, without
limitation, (i) using reasonable efforts to keep available the services of all
present employees at the Hotels and to preserve its relations with guests,
suppliers and other parties doing business with Seller with respect to the
Hotels, (ii) accepting booking contracts for the use of the Hotels’ facilities
retaining such bookings in accordance with the terms of the Existing Management
Agreement and the Existing Franchise Agreement, (iii) maintaining the current
level of advertising and other promotional activities for the Hotels’
facilities, (iv) maintaining the present level of insurance with respect to the
Hotels in full force and effect until the Closing Date for the Hotels and (v)
remaining in compliance in all material respects with all current Licenses;


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


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


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


                    (e)
Advise Buyer promptly of any litigation, arbitration, or administrative hearing
before any court or governmental agency concerning or affecting the Hotels which is



17








instituted or threatened after the date of this Contract or if any
representation or warranty contained in this Contract shall become false;


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




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


                    (h)
Not sell or assign, or enter into any agreement to sell or assign, or create or
permit to exist any lien or encumbrance (other than a Permitted Exception) on,
the Property or any portion thereof except agreements with guests in the
ordinary course of business; and


                    (i)
Except as described in this Contract, not allow any permit, receipt, license,
franchise or right currently in existence with respect to the operation, use,
occupancy or maintenance of the Hotels to expire, be canceled or otherwise
terminated.


          Neither
Seller nor Manager shall, without first obtaining the written approval of
Buyer, which approval shall not be unreasonably withheld, enter into any new
FF&E Leases, Service Contracts, Leases or other contracts or agreements related
to the Hotels other than agreements with guests in the ordinary course of
business, or extend any existing agreements, unless such agreements (x) can be
terminated, without payment or penalty, upon thirty (30) days’ prior notice or
(y) will expire prior to the Closing Date.


          8.3
Third Party Consents. Prior to the Closing Date, Seller shall, at
its expense, (i) obtain any and all third party consents and approvals (x)
required in order to transfer the Hotels to Buyer, or (y) which, if not obtained,
would materially adversely affect the operation of the Hotels, including,
without limitation, all consents and approvals referred to on Exhibit G 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”).


          8.4
Employees. Upon reasonable prior notice to Seller by Buyer, Buyer
and its employees, representatives and agents shall have the right to
communicate with Seller’s staff, and, subject to the approval of the Manager,
the following persons on the Hotels’ staff and the Manager’s staff: the general
manager, the director of sales, and the director of engineering, at any time
before Closing and in the presence of a Seller-designated representative. Buyer
covenants and agrees that it shall not interfere with the operations of the
Hotels while engaging in such communications, and further agrees that no such
communications shall materially or adversely affect the operation of the
Property or the Existing Management Agreements.


          8.5
Estoppel Certificates. If requested in writing by Buyer not less
than twenty (20) days prior to Closing, Seller shall obtain from (i) each
tenant under any Lease affecting the Hotels (but not from current or prospective
occupants or guests of hotel rooms and suites within the Hotels) and (ii) each
lessor under any FF&E Lease for the Hotels identified by Buyer as a 


18







material FF&E Lease, the estoppel certificates substantially in the forms provided
by Buyer to Seller, and deliver to Buyer not less than five (5) days before the
Closing.


          8.6
Access to Financial Information. Buyer’s representatives shall
have access to, and Seller and its Affiliates shall cooperate with Buyer and
furnish upon request, all financial and other information relating to the
Hotels’ 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 with respect to the transaction
contemplated by this Contract 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 Hotels. 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 letters. The provisions of this
Section shall survive Closing or termination of this Contract.


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


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


                    (a)
Indemnification of Buyer. Without in any way limiting or diminishing the
warranties, representations or agreements herein contained or the rights or
remedies available to Buyer for a breach hereof, Seller hereby agrees to
indemnify, defend and hold harmless Buyer and its respective designees,
successors and assigns from and against all losses, judgments, liabilities,
claims, damages or expenses (including reasonable attorneys’ fees) of every
kind, nature and description in existence before, on or after Closing, whether
known or unknown, absolute or contingent, 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, subject, however, to the applicable provisions in
Section 7.1 and 7.2 of 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 Seller’s
decision to sell the Property; and



19







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


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


                              (i)
the breach of any representation, warranty, covenant or agreement of Buyer
contained in this Contract, subject, however, to the applicable provisions in
Section 7.1 and 7.2 of this Contract; 


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


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


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


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


                              (ii)
If in any action, suit or proceeding (a “Legal Action”) the relief
sought is solely the payment of money damages, and if the Indemnifying Party
specifically agrees in writing to indemnify such Indemnified Party with respect
thereto and demonstrates to the reasonable satisfaction of such Indemnified
Party its financial ability to do so, the Indemnifying Party shall have the
right, commencing twenty (20) 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 


20








information concerning such settlement, compromise or defense as the Indemnifying
Party may reasonably request from time to time. If the Indemnifying Party
undertakes to settle, compromise or defend any such asserted liability, it
shall notify such Indemnified Party in writing of its intention to do so within
twenty (20) 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
unreasonably adverse to the best interest of the continuing business of the
Hotels, 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 Indemnifying
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 reasonably 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 if the party affected thereby reasonably believes such
settlement could establish a custom or precedent which will be adverse to the
best interests of its continuing business.


          8.9
Escrow Funds. To provide for the timely payment of any
post-closing claims by Buyer against Seller hereunder, at Closing, Seller agrees
that Four Hundred Thousand and No/100 Dollars ($400,000.00) (the “Escrow Funds”) shall be withheld from
the Purchase Price 




21







payable to 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 in the form attached hereto as Exhibit
F (the “Post-Closing
Agreement”). Buyer and Seller agree that six (6) months after
the Closing Date, the Escrowed Funds shall be reduced to Two Hundred Thousand
and No/100 Dollars ($200,000.00). If no claims have been asserted by Buyer
against Seller, or all such claims have been satisfied, within such 1-year period, the Escrow
Funds deposited by Seller, together with interest thereon, shall be released to
Seller. The Escrow Funds allocable to each Hotel shall be split 50/50.


          8.10
Liquor Licenses. To the extent that a license or permit required
for service of alcoholic beverages at the Property (a “Liquor License”) is issued to Seller,
Seller shall, to the extent permitted or not prohibited by applicable laws,
rules or regulations, transfer such Liquor License to Buyer at Closing. If a
Liquor License cannot be transferred to Buyer by Seller or otherwise obtained
by Buyer prior to the scheduled Closing, to the extent permitted or not
prohibited by applicable law, Seller shall cooperate with Buyer by entering, or
causing its Affiliate holding the current liquor permit for the Property to
enter into, an interim alcoholic beverage management agreement with respect to
the sale of alcoholic beverages at the Property in a form substantially similar
to the agreement attached hereto as Exhibit
J. Seller shall also assist and cooperate with Buyer if Buyer
elects to apply for an interim/temporary liquor license so that alcoholic
beverages may continue to be served at the Property pending issuance of the
permanent Liquor License. To the extent that a Liquor License is issued to Manager, Manager shall, to the extent
permitted by applicable laws, rules or regulations, continue to hold such
Liquor License after Closing. To the extent that Seller and/or Manager is not
able to transfer a Liquor License to Buyer at Closing, Seller and/or Manager
agree to cooperate with Buyer to facilitate the issuance or transfer of the
Liquor License. The foregoing provisions of this Section 8.9 notwithstanding,
(i) all costs incurred by Manager and/or Seller in connection with obtaining or
transferring Liquor License for the Property shall be borne by Buyer, and (ii)
neither Seller nor Manager shall have any obligation to transfer an existing
liquor permit to Buyer prior to Closing, and (iii) Buyer shall not obtain, and
Seller and Manager shall have no obligation to pursue, any Liquor License for
the Property prior to Closing if the issuance of such Liquor License would
impact the rights of Seller or Manager under any existing liquor permit, and
(iv) if this Contract is terminated, Buyer agrees to promptly withdraw any
pending application for a Liquor License for the Property.


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 terminate 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 terminate this Contract, in
which case the Earnest Money Deposit shall be immediately returned to Buyer and



22








each of the parties shall be relieved from further liability to the other,
except as otherwise expressly provided herein, with respect to this Contract.


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




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


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


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


                    (e)
Each Existing Franchise Agreement shall have been terminated.


                    (f)
The Existing Management Agreement shall have been terminated and Buyer and the
Manager shall have executed and delivered the New Management Agreements
consistent with the form attached hereto as Exhibit E.


                    (g)
Buyer and Franchisor shall have executed (or Franchisor has unconditionally
committed to execute) the New Franchise Agreements.


                    (h)
Seller shall have complied, in all material respects, with its obligations
under the thirteen (13) other purchase contracts (“Other Contracts”), each of even date
herewith and all of which are more particularly described on Exhibit K hereto; and Seller shall be
unconditionally prepared to close on the sale of the hotel properties described
in the Other Contracts (“Other Properties”)
simultaneously with Closing on the Property.


          9.2
Seller’s Conditions for Closing. Unless otherwise waived in
writing, and without prejudice to Seller’s right to terminate 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
terminate this Contract, in which case the remaining Earnest Money Deposit
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.



23







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


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



                    (d)
Buyer shall have complied, in all material respects, with its obligations under
the Other Contracts; and Buyer shall be unconditionally prepared to close on
the acquisition of the Other Properties simultaneously with Closing on the
Property.


                    (e)
To the extent required under the Existing Franchise Agreement, Franchisor shall
have consented to a sale of the Property to Buyer and the Existing Franchise
Agreement shall have been terminated.


ARTICLE
X

CLOSING AND CONVEYANCE


          10.1
Closing. Unless otherwise agreed by Buyer and Seller, the Closing
on the Property (“Closing Date”)
shall occur on a date selected by Buyer and agreed upon by Seller that is the
later of (a) fifteen (15) business days after expiration of the Review Period
or (b) the date Buyer receives the New Franchise Agreement executed by the
Franchisor, provided in either case that all conditions to Closing hereunder
have been satisfied. The foregoing provisions of this Section 10.1
notwithstanding, the Closing Date shall not be later than December 15, 2010.
The Closing shall be held via escrow at the offices of the Title Company, or as
otherwise determined by Buyer and Seller.


          10.2
Deliveries of Seller. At Closing, Seller shall deliver to Buyer
the documents and materials set forth in (a) through (l) below. All instruments
shall be properly executed and conveyance instruments shall be acknowledged and
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 the conclusion of the Review Period):


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


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


                    (c)
Existing Management and Franchise Agreements. Evidence, reasonably
satisfactory to Buyer, that the Existing Management Agreement has been
terminated and the Existing Franchise Agreement has been terminated.



24







                    (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 H. 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, Construction Plans and all other intangible Personal
Property applicable to the Hotels. The assignments shall contain
cross-indemnities by Buyer and Seller for their respective periods of
ownership.


                    (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 as a condition to
issuance of the Owner’s Title Policy.


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


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


                    (i)
Authority Documents. Certified copy of resolutions of the 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 Seller was formed.


                    (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
Hotels are located, to effectuate the conveyance of property similar to the Hotels,
with the effect that, after the Closing, Buyer will have succeeded to all of
the rights, titles, and interests of Seller related to the Hotels and Seller
will no longer have any rights, titles, or interests in and to the Hotels.


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


                    (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 Hotels, Buyer shall deliver
the following:



25







                    (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 Hotels 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 Hotels are located, to effectuate the conveyance of property similar
to the Hotels, with the effect that, after the Closing, Buyer will have
succeeded to all of the rights, titles, and interests of Seller related to the
Hotels and Seller will no longer have any rights, titles, or interests in and to
the Hotels.


                    (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, mansion,
excise, sales, use or 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, 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 the Existing Management
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 all
or any portion of the 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 and clerk’s fee for the Deed (if applicable).
Buyer shall also be responsible for the fees for and all costs associated with
the performance of the PIP, all costs incurred in performing due diligence and
securing financing to complete the transaction, 




26







including without limitation:
(i) appraisals; (ii) fees and costs paid to any lender in connection with
obtaining financing for the Property; (iii) fees, charges or costs to record
any mortgages or deeds of trust to secure Buyer’s obligations to any lender;
and (iv) fees or charges paid or payable to the Title Company to secure a
mortgagee title policy.


ARTICLE
XII

ADJUSTMENTS


          12.1
Adjustments. Unless otherwise provided herein, at Closing,
adjustments between the parties shall be made as of 11:59 p.m. on the eve of
the Closing Date (the “Cutoff Time”),
with the income and expenses accrued prior to the Cutoff Time being allocated
to Seller and the  income and expenses accruing on and after the Cutoff
Time being allocated to Buyer, all as set forth below. For each Hotel, 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, for each Hotel, all apportionments
and adjustments shall be made on an accrual basis in accordance with generally
accepted accounting principles. Buyer and Seller agree that Manager shall
determine the apportionments, allocations, prorations and adjustments as of the
Cutoff Time for each Hotel.


                    (a)
Taxes. All real estate taxes, personal property taxes, or any other
taxes and special assessments (special or otherwise) of any nature upon the
Property levied, assessed or pending for the calendar year in which the Closing
occurs (including the period prior to Closing, regardless of when due and
payable) shall be prorated as of the Cutoff Time and, if no tax bills or assessment
statements for such calendar year are available, such amounts shall be
estimated on the basis of the best available information for such taxes and
assessments that will be due and payable on the Hotels for the calendar year in
which Closing occurs. Until final tax bills that cover the entire year during
which Closing occurred (such that tax liability can reasonably be determined),
Seller’s obligation to pay its share of taxes shall continue.


                    (b)
Utilities. All suppliers of utilities shall be instructed to read meters
or otherwise determine the charges owing as of the Closing Date for services
prior thereto. Charges accruing prior to the Closing Date shall be allocated to
Seller and charges accruing after Closing Date 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 (or assigned for the
benefit of) Buyer at Closing.


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


                    (d)
Accounts. All working capital accounts, reserve accounts and escrow
accounts of any nature shall remain the property of Seller. 


                    (e)
Guest Ledger. Subject to (f) below, all accounts receivable of
registered guests at the Hotels who have not checked out and were occupying
rooms as of the Cutoff Time, shall be prorated as provided herein. Seller shall
receive a credit for all guest ledger receivables,





27






net of credit card
commissions, for all room nights and other charges up to but not including the
room night during which the Cutoff Time occurs.


                    (f)
Room Rentals. All receipts from guest room rentals and other suite
revenues for the night in which the Cutoff Time occurs shall be split 50/50
between Buyer and Seller.


                    (g)
Advance Deposits. All prepaid rentals, room rental deposits, and all
other deposits for advance registration, banquets or future services to be
provided on and after the Closing Date shall be credited to Buyer.


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


                    (i)
Accounts Payable. To the extent not apportioned at Closing, any
indebtedness, accounts payable, liabilities or obligations of any kind or
nature related to Seller or the Property for the periods prior to and including
the Closing Date shall be retained by Seller and promptly allocated to Seller
and evidence thereof shall be provided to Buyer, and Buyer shall not be or
become liable therefor, except as expressly assumed by Buyer pursuant to this
Contract, and invoices received in the ordinary course of business prior to
Closing shall be allocated to Seller at Closing.


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


                    (k)
Inventories. No adjustment shall be made for any merchandise, food or
beverages held for sale at the Property, all of which shall be included in the
Purchase Price. The preceding sentence notwithstanding, merchandise, food and
beverages that are owned by third-party tenants do not convey.


          12.2
Reconciliation and Final Payment. Seller and Buyer shall
reasonably cooperate after Closing to make a final determination of the
allocations and prorations required under this Contract within one hundred
eighty (180) days after the Closing Date; provided, however, failure to make a
final determination within such period shall not relieve the parties of the
obligation to make a final determination nor shall it relieve any party of the
obligation to pay the other any true-up amounts owed. 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





28






within ten (10) days after the reconciliation of such sums. The obligations to
calculate such prorations, make such reconciliations and pay any such sums
shall survive the Closing.


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


ARTICLE
XIII

CASUALTY AND CONDEMNATION


          13.1
Risk of Loss; Notice. Prior to Closing, 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 Hotels 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 Hotels, 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 (a) any
condemnation proceeding shall be pending against a substantial portion of either
Hotel or (b) there is any substantial casualty loss or damage to either 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
shall be delivered to Buyer and thereafter, except as expressly set forth
herein, no party shall have any further obligation or liability to the other
under this Contract. In the context of condemnation, “substantial” shall mean
condemnation of such portion of a Hotel (or access thereto) as could, in
Buyer’s reasonable judgment, render use of the remainder impractical or
unfeasible for the uses herein contemplated, and, in the context of casualty loss
or damage, “substantial” shall mean, with respect to each Hotel, a loss or damage in excess of Five Hundred
Thousand and No/100 Dollars ($500,000.00) in value. 



29






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


ARTICLE
XIV

DEFAULT REMEDIES


          14.1
Buyer Default. If Buyer defaults under this Contract after the
Review Period, and such default continues for thirty (30) days following
written notice from Seller, then at Seller’s election by written notice to
Buyer, this Contract shall be terminated and of no effect, in which event the
Earnest Money Deposit 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 except as otherwise expressly provided herein,
both Buyer and Seller shall thereupon be released from all obligations
hereunder.


          14.2
Seller Default. If Seller defaults under this Contract, and such
default continues for thirty (30) days following written notice from Buyer,
Buyer may elect, as Buyer’s sole and exclusive remedy, either (i) to terminate
this Contract by written notice to Seller delivered to that Seller at any time
prior to the completion of such cure, in which event the Earnest Money Deposit
shall be returned to the Buyer, Seller shall reimburse Buyer for Buyer’s actual
and verifiable due diligence costs and expenses (not to exceed $75,000) and
thereafter both the Buyer and Seller shall thereupon be released from all
obligations with respect to this Contract, except as otherwise expressly
provided herein; or (ii) to treat this Contract as being in full force and
effect by written notice delivered to Seller at any time prior to the
completion of such cure, in which event the Buyer shall have the right to an
action against the defaulting Seller for specific performance.


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


ARTICLE
XV

NOTICES


          All
notices required herein shall be deemed to have been validly given, as
applicable: (i) if given by fax, when the fax is transmitted to the party’s fax
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 



30






overnight delivery
service marked for next day delivery, return receipt requested or similarly
acknowledged:


	
  

 	
  

 
	
 If to Buyer:

 	
 Apple Nine Hospitality Ownership, Inc.

 814 E. Main Street

 Richmond, Virginia 23219

 Attention: Justin Knight

 Fax No.: (804) 344-8129

 
	
  

 	
  

 
	
 with a copy to:

 	
 Apple Nine Hospitality Ownership, Inc.

 814 E. Main Street

 Richmond, Virginia 23219

 Attention: Legal Dept.

 Fax No.: (804) 727-6349

 





	
  

 	
  

 
	
 If to Seller:

 	
 c/o White Lodging Services Corporation

 1000 E. 80th Place

 Suite 600 North

 Merrillville, Indiana 46410

 Attention: Deno Yiankes

 Fax No.: (219) 685-6114

 
	
  

 	
  

 
	
 with a copy to:

 	
 
Carol Ann Bowman

 1000 East 80th Place, Suite 700 North

 Merrillville, Indiana 46410

 Fax No.: (219) 680-4226

 

 and to:

 

 M. Jay Yurow

 Venable LLP

 8010 Towers Crescent Drive 

 Suite 300

 Vienna, Virginia 22182

 Fax No. (703) 821-8949

 



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


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.



31






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


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


          16.4
Governing Law. The validity, construction, interpretation and
performance of this Contract shall in all ways be governed and determined in
accordance with the laws of the jurisdiction in which the Hotels are 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 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. In
addition, Buyer agrees that all materials placed in the e-room and otherwise
made available for review by Buyer and its consultants and agents shall be
handled and treated in a confidential manner; provided, however, that the forgoing provisions shall not be
deemed to limit Buyer’s right to disclose the details of the transaction
contemplated hereby or to share the materials made available by Seller to Buyer
with its legal and financial advisors.


          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 expiration of the Review Period.


          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




32







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




          16.12
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.


          16.13
Relationship. Nothing herein contained shall be deemed or
construed by the parties hereto, nor by any third party, as creating the
relationship of principal and agent or of partnership or joint venture between
the parties hereto, it being understood and agreed that (except as and to the
extent specifically provided for herein) no provision contained herein, nor any
acts of the parties hereto shall be deemed to create any relationship between
the parties hereto other than the relationship of seller and purchaser.


          16.14
Like-Kind Exchange. Seller shall have the right to structure its
transfer of the Property as part of a like-kind exchange to be designated by
Seller (including the ability to have title taken in the name of an entity
established in order to effectuate such exchange), by providing Buyer with
notice of such exchange by not later than ten (10) days prior to the Closing
Date (with any documents to be reviewed by Buyer in connection therewith to be
submitted to Buyer by not later than five (5) days prior to the Closing Date),
with the result that the exchange shall qualify for non-recognition of gain or
loss under Section 1031 of the Internal Revenue Code of 1986, as amended. Buyer
shall cooperate with a Seller in effecting such exchange (such cooperation to
be limited to the review and execution of an assignment to a qualified exchange
intermediary and other reasonable requests of Seller and expressly to exclude
any arrangement to provide for installment sale treatment), provided that:
(i) any costs and expenses incurred by Buyer as a result of structuring such
transaction as an exchange, as opposed to an outright sale, shall be borne by
Seller, (ii) Seller shall indemnify and hold harmless Buyer from and against
any and all liabilities, costs, damages, claims or demands arising from the
cooperation of Buyer in effecting the exchange contemplated hereby, including,
but not limited to, Buyer’s reasonable attorneys’ fees; and (iii) such exchange
shall not result in any delay in Closing the transaction described in this
Contract.


[Signatures Begin
on Following Page]


33





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


	
  

 	
  

 	
  

 	
  

 
	
  

 	
 SELLER:

 
	
  

 	
  

 
	
  

 	
 HAPPY VALLEY RES, LLC, an Indiana limited liability
 company

 
	
  

 	
  

 
	
  

 	
 By:

 	
 WHITE LODGING SERVICES CORPORATION, an Indiana
 corporation, its Manager

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 By:

 	
   /s/ Lawrence E. Burnell

 
	
  

 	
  

 	
  

 	

 


 
	
  

 	
  

 	
  

 	
 Lawrence E. Burnell

 Chief Operating Officer

 


34





          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 NINE HOSPITALITY OWNERSHIP, INC., a Virginia
 corporation

 






	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
      /s/ Justin G. Knight

 
	
  

 	
  

 	

 


 





	
  

 	
 Name:

 	
        Justin G. Knight

 
	
  

 	
  

 	

 


 





	
  

 	
 Title:

 	
        President

 
	
  

 	
  

 	

 


 



35