exv10w4



 







EXHIBIT 10.4




PURCHASE CONTRACT




     This PURCHASE CONTRACT (this “Contract”) is made and entered into as of June 15, 2005, by and
between INTERSTATE PITTSBURGH HOTEL HOLDINGS, L.L.C., a Delaware limited liability company
(“Seller”), with its principal office at 4501 N. Fairfax Drive, Suite 800, Arlington, Virginia
22203, and APPLE SIX HOSPITALITY OWNERSHIP, INC., a Virginia corporation, with its principal office
at                      , or its permitted assigns (“Buyer”).



RECITALS




     A. Seller is the fee simple owner of the Residence Inn by Marriott hotel located at 1500 Park
Lane Drive, Pittsburgh, Pennsylvania.



     B. Buyer is desirous of purchasing such hotel property from Seller, and Seller is desirous of
selling such hotel property 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:



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



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



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



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



     “Bills of Sale” shall have the meaning set forth in Section 10.2(b).



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



     “Business Day” shall mean any day other than a Saturday, Sunday or legal holiday in
the Commonwealth of Virginia or the Commonwealth of Pennsylvania.



 









 





     “Ceiling Amount” shall have the meaning set forth in Section 8.8(d)(ii).



     “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.



     “Contracts, Plans and Specs” shall mean all construction and other contracts, plans,
drawings, specifications, surveys, soil reports, engineering reports, inspection reports, and other
technical descriptions and reports.



     “Cutoff Time” shall have the meaning set forth in Section 12.1.



     “Damages” shall have the meaning set forth in Section 8.8(a).



     “Deductible Amount” shall have the meaning set forth in Section 8.8(d)(i).



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



     “Deposits” shall mean, to the extent assignable, all prepaid rents and deposits
(including, without limitation, any reserves for replacement of FF&E and for capital repairs and/or
improvements), refundable security deposits and rental deposits, and all other deposits for advance
reservations, banquets or future services, made in connection with the use or occupancy of the
Improvements; provided, however, that to the extent Seller has not received or does not hold all of
the prepaid rents and/or deposits attributable to the Leases related to the Property, Buyer shall
be entitled to a credit against the cash portion of the Purchase Price allocable to the Property in
an amount equal to the amount of the prepaid rents and/or deposits attributable to the Leases
transferred at the Closing of such Property, and provided further, that “Deposits” shall exclude
(i) reserves for real property taxes and insurance, in each case, to the extent pro rated on the
settlement statement such that Buyer receives a credit for (a) taxes and premiums in respect of any
period prior to Closing and (b) the amount of deductibles and other self-insurance and all other
potential liabilities and claims in respect of any period prior to Closing, and (ii) utility
deposits.



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



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



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



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



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



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



     “Executive Order” shall have the meaning set forth in Section 7.1(o).



     “Existing Franchise Agreement” shall mean that certain Franchise Agreement dated as of
November 1, 1999 between Seller and the Franchisor, granting Seller a franchise to operate the
Hotel under the Brand.



     “Existing Management Agreement” shall mean that certain Management Agreement dated as
of November 1, 1999 between Seller and the Existing Manager for the operation and management of the
Hotel.



     “Existing Manager” shall mean Crossroads Hospitality Management Company.



     “Extension Deposit” shall have the meaning set forth in Section 9.3.



     “Extension Period” shall have the meaning set forth in Section 9.3.



 









 





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



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



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



     “Franchisor” shall mean Marriott International, Inc.



     “Hotel” shall mean the hotel located on the Land, including all Improvements and
Personal Property associated therewith, known generally as the Residence Inn by Marriott located at
1500 Park Lane Drive, Pittsburgh, Pennsylvania.



     “Hotel Contracts” shall mean all leases, license agreements, leasing agent’s
agreements, equipment leases, building service agreements, maintenance contracts, suppliers
contracts, warranty contracts, operating agreements or other agreements relating to the ownership,
occupancy, operation, management or maintenance of the Property to which Seller is a party (or an
assignee) or that are binding on the Property.



     “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).



     “Internal Revenue Code” shall mean the Internal Revenue Code of 1986, as amended.



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



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



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



     “Licenses” shall mean all permits, licenses, franchises, utility reservations,
certificates of occupancy, and other documents issued by any federal, state, or municipal authority
or by any private party related to the



 









 




development, construction, use, occupancy, operation or maintenance of the Hotel, including,
without limitation, all licenses, approvals and rights (including any and all existing waivers of
any brand standard) necessary or appropriate for the operation of the Hotel under the Brand.




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



     “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 the Hotel under the
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 the Hotel on and after the Closing Date.



     “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 Hotel, as required by the Manager
or the Franchisor, if any.



     “Post-Closing Agreement” shall have the meaning set forth in Section 8.9.



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



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



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



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



     “Release Date” shall have the meaning set forth in Section 8.9.



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



 









 





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



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



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



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



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



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



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



     “Tax Clearance Certificate” shall have the meaning set forth in Section 11.1.



     “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 all telephone exchanges and numbers, trade names, trade
styles, trade marks, and other identifying material, and all variations thereof, together with all
related goodwill (it being understood and agreed that the name of the hotel chain to which the
Hotel is affiliated by franchise, license or management agreement is a protected name or registered
service mark of such hotel chain and cannot be transferred to Buyer by this Contract.



     “Utility Reservations” shall mean Seller’s interest, if any, in the right to receive
immediately on and after the Closing Date 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 as conducted prior to the Closing, including, but not limited to (i) any right to the
present and future use of wastewater, drainage, water and other utility facilities to the extent
such use benefits the Real Property, (ii) any reservations of or commitments covering any such use
in the future, and (iii) any wastewater capacity reservations relating to the Real Property. Buyer
shall be responsible for any requests or documents to transfer the Utility Reservations, at Buyer’s
sole cost and expense.



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



 









 





ARTICLE II

PURCHASE AND SALE; PURCHASE PRICE; PAYMENT;

EARNEST MONEY DEPOSIT




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



     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 Eleven Million and No/100 Dollars ($11,000,000.00) (the “Purchase Price”).



     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 and interest earned thereon, if any, which Buyer elects to have applied against the
Purchase Price (as provided below), less the Escrow Funds, shall be paid to Seller in cash,
certified funds or wire transfer of immediately available funds at the Closing. At the Closing,
the Earnest Money Deposit, together with interest earned thereon, if any, shall, at Buyer’s
election, be returned to Buyer or shall be paid over to Seller by Escrow Agent to be applied to the
portion of the Purchase Price on behalf of Buyer, and the Escrow Funds shall be deposited into an
escrow account pursuant to the Post-Closing Agreement as contemplated by Section 8.9.



     2.5 Earnest Money Deposit.



          (a) Within one (1) Business Day after the date of this Contract, Buyer shall deposit
the sum of Two Hundred Fifty Thousand and No/100 Dollars ($250,000.00) 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, 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, no later than one (1) Business Day after the expiration of the Review Period, deposit the
sum of Two Hundred Fifty Thousand and No/100 Dollars ($250,000.00) in cash, certified bank check or
by wire transfer of immediately available funds (the “Additional Deposit”) with the Escrow Agent.
The Initial Deposit and the Additional Deposit, and all interest accrued thereon, shall hereinafter
be referred to as the “Earnest Money Deposit.”




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




ARTICLE III

REVIEW PERIOD




     3.1 Review Period. Buyer shall have a period through 6:00 p.m. Eastern Time
on the date that is forty-five (45) days after the date of this Contract, unless a longer period of
time is otherwise provided for in this



 









 




Contract and except as otherwise agreed to by Buyer and Seller (the “Review Period”), to
evaluate the legal, title, survey, construction, physical condition, structural, mechanical,
environmental, economic, permit status, franchise status, financial and other documents and
information related to the Property. Within five (5) days following the date of this Contract,
Seller, at Seller’s sole cost and expense, will deliver to Buyer (or make available at the Hotel)
for Buyer’s review, to the extent not previously delivered to Buyer, true, correct and complete
copies of the following to the extent within Seller’s possession or control or to which Seller has
access or which Seller can obtain upon request, together with all amendments, modifications,
renewals or extensions thereof:




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




          (b) Income and expense statements and budgets for the Hotel and for the Seller, for
the current year to date and each of the three (3) prior fiscal years and such other financial
information relating to the Hotel as Buyer may reasonably request (the “Financial Statements”),
provided that Seller also agrees to provide financial and other information as provided in Section
8.6;




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




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




          (f) All notices received since January 1, 2002, or of which Seller otherwise has
knowledge, from governmental authorities in connection with the Hotel and all other notices
received since January 1, 2002, or of which Seller otherwise has knowledge, from governmental
authorities received at any time that relate to any noncompliance or violation of law that has not
been corrected.




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



     3.2 Due Diligence Examination. At any time during the Review Period, and
thereafter through Closing, Buyer and/or its representatives and agents shall have the right to
enter upon the Property at all reasonable times for the purposes of reviewing all Records and other
data, documents and/or information relating to the Property and conducting such surveys,
appraisals, engineering tests, soil tests (including, without limitation, Phase I and Phase II
environmental site assessments), inspections of construction and other inspections and other
studies as Buyer deems reasonable and necessary or appropriate to evaluate the Property, subject to
providing reasonable



 









 




advance notice to Seller unless otherwise agreed to by Buyer and Seller (the “Due Diligence
Examination”). Seller shall have the right to have its representative present during Buyer’s
physical inspections of the 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 or the Existing Management Agreement. Buyer will
provide a copy of Buyer’s environmental report obtained with respect to the Property during the
Review Period.




     3.3 Restoration. Buyer covenants and agrees not to damage or destroy any
portion of the Property in conducting its examinations and studies of the Property during the Due
Diligence Examination and, if Closing does not occur, shall repair any portion of the Property
damaged by the conduct of Buyer, its agents or employees, to substantially the condition such
portion(s) of the Property were in immediately prior to such examinations or studies. Buyer agrees
to indemnify and hold harmless Seller from any liabilities Seller may suffer by reason of damage to
persons or property resulting from such examinations or studies made by or at the request of Buyer.



     3.4 Seller Exhibits. Seller has provided to Buyer completed Exhibits B,
C, D, E and F, together with true, correct and complete copies of all documents and
instruments described and/or referred to therein. Buyer shall have until the end of the Review
Period to review and approve the information on Exhibits B, C, D, E and F and in
such documents and instruments. In the event Buyer does not approve any such Exhibit or the
information contained therein, Buyer shall be entitled to terminate this Contract prior to the
expiration of the Review Period by notice to Seller and the Earnest Money Deposit shall be returned
to Buyer with all interest thereon 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. Within five (5) days after the date of this Contract, Seller
shall deliver to Buyer true, correct and complete copies of the most recent survey of the Real
Property of which Seller is aware (if any). In the event that an update of the survey or a new
survey (such updated or new survey being referred to as the “Survey”) is desired by Buyer, then
Buyer shall be responsible for all costs related thereto, and Buyer agrees to order such update or
new survey within three (3) Business Days after Buyer’s receipt of such survey from Seller.



     4.2 Title. Within five (5) days after the date of this Contract, Seller
shall deliver to Buyer Seller’s existing title insurance policy, including copies of all documents
referred to therein, for the Real Property. As soon as reasonably practicable after receipt
thereof, Buyer shall use commercially reasonable efforts to obtain (i) a Commitment for Title
Insurance (the “Title Commitment”) issued by LandAmerica American Title Company, 8201 Preston Road,
Suite 280, Dallas, Texas, 75225 (the “Title Company”), for the most recent standard form of owner’s
policy of title insurance in the state in which the Real Property is located, covering the Real
Property, setting forth the current status of the title to the Real Property, showing all liens,
claims, encumbrances, easements, rights of way, encroachments, reservations, restrictions and any
other matters affecting the Real Property and pursuant to which the Title Company agrees to issue
to Buyer at Closing an Owner’s Policy of Title Insurance on the most recent form of ALTA (where
available) owner’s policy available in the state in which the Land is located, with extended
coverage and, to the extent applicable and available in such state, comprehensive, access, single
tax parcel, contiguity and such other endorsements as may be required by Buyer (collectively, the
“Title Policy”); and (ii) true, complete, legible and, where applicable, recorded copies of all
documents and instruments (collectively, 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 agrees to
place an order for the Title Commitment with the Title Company within three (3) Business Days after
Buyer’s receipt of Seller’s current title policy for the Property. Buyer shall promptly provide
Seller, at Seller’s expense, with a copy of the Title Commitment issued by the Title Company,
together with copies of the Exception Documents.



     4.3 Survey or Title Objections. If Buyer discovers any title or survey
matter which is objectionable to Buyer, Buyer may provide Seller with written notice of its
objection to same within ten (10) days after receipt of both the Title Commitment (including all
Exception Documents) and the Survey (the “Title Review Period”). If



 









 




Buyer fails to so object in writing to any such matter set forth in the Survey or Title
Commitment, it shall be conclusively assumed that Buyer has approved same. If Buyer disapproves
any condition of title, survey or other matters by written objection to Seller on or before the
expiration of the Title Review Period, Seller shall elect either to attempt to cure or not cure any
such item by written notice sent to Buyer within five (5) Business Days after Seller’s receipt of
notice from Buyer, and if Seller commits in writing to attempt to cure any such item, 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
and such new title defect is not cured by Seller prior to Closing, then Buyer may elect, in Buyer’s
sole and absolute discretion: (i) to waive such objection and proceed to Closing, or (ii) to
terminate this Contract and receive a return of the Earnest Money Deposit, and any interest
thereon. The items shown on the Title Commitment which are not objected to by Buyer as set forth
above (other than exceptions and title defects arising after the Title Review Period and other than
those standard exceptions which are ordinarily and customarily omitted in the state in which the
Hotel is located, so long as Seller provides the appropriate owner’s affidavit, gap indemnity or
other documentation reasonably required by the Title Company for such omission) are hereinafter
referred to as the “Permitted Exceptions.” In no event shall Permitted Exceptions include liens,
or documents evidencing liens, securing any indebtedness or any mechanics’ or materialmen’s liens
or any claims or potential claims therefor covering the Property or any portion thereof (“Seller
Liens”), each of which shall be paid in full by Seller and released at Closing.




ARTICLE V

MANAGEMENT AGREEMENT AND FRANCHISE AGREEMENT




     At or prior to the Closing, Seller shall terminate the Existing Management Agreement and use
commercially reasonable efforts to terminate the Existing Franchise Agreement, and Seller shall be
solely responsible for all claims and liabilities arising thereunder on, prior to or following the
Closing Date. Buyer shall use commercially reasonable efforts to enter into the New Management
Agreement and the New Franchise Agreement, effective as of the Closing Date, containing terms and
conditions reasonably acceptable to Buyer (including, without limitation, such terms and conditions
as may be required to accommodate Buyer’s and/or Buyer’s Affiliates’ REIT structure). Seller shall
be responsible for paying all costs and fees (including attorneys fees) related to the termination
of the Existing Management Agreement and the Existing Franchise Agreement, including but not
limited to, the payment of all termination and cancellation fees and/or penalties, all costs and
fees of its attorneys and consultants, all costs associated with any releases or other provisions
requested by or for the benefit of Seller, provided, however, that, notwithstanding the foregoing,
Buyer shall pay the termination fee (if any) payable to the Franchisor pursuant to Section XVIII E
of the Existing Franchise Agreement (not to exceed the liquidated damages amount calculated
pursuant to such Section) in order to terminate the Existing Franchise Agreement as a result of a
sale of the Hotel pursuant to this Contract, provided further, that Buyer shall not be responsible
for payment of (x) any costs, expenses, fees or liabilities resulting from any default or other act
or omission by Seller under the Existing Franchise Agreement (including, without limitation, any
costs, expenses, fees or liabilities relating to termination of any franchise or license agreement
between Seller and the Franchisor and/or any Affiliate of either of them relating to any hotel
other than the Hotel), or (y) any accrued but unpaid monetary obligations or payments payable to
Franchisor or any of its Affiliates under the Existing Franchise Agreement up to the date of
termination thereof, all of which shall be the responsibility of, and shall be paid by, Seller.
Buyer shall also pay all license, application and similar fees related to the New Management
Agreement and the New Franchise Agreement and the costs of any PIP improvements required by the
Franchisor, where applicable, incurred in connection with the New Franchise Agreement. Buyer and
Seller shall use commercially reasonable efforts to promptly provide all information required by
the Manager or the Franchisor in connection with the New Management Agreement and the New Franchise
Agreement, and Buyer shall diligently pursue obtaining the same.



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, except that
Seller has engaged O’Connell Hospitality Group, LLC (the “Broker”) to act on Seller’s behalf in
connection with the transactions contemplated hereby and Seller shall pay at Closing all fees and
amounts payable to the Broker in connection with



 









 




the transactions 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 Delaware and is qualified to do
business and in good standing in the Commonwealth of Pennsylvania. Seller has duly authorized, by
all necessary limited liability company action, the execution, delivery and performance of this
Contract. This Contract has been duly executed and delivered by Seller and constitutes the valid
and legally binding obligation of Seller, enforceable against Seller in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws now or hereafter in effect relating to creditors’ rights and by
general principles of equity. No consent or approval of any person, entity or governmental
authority is required for the execution, delivery or performance by Seller of this Contract, except
as set forth in Exhibit D hereto and except for consents and approvals that, individually
or in the aggregate, (x) are not required to transfer any part of the Property to Buyer or its
permitted assigns, (y) are not necessary for the ownership, occupany and/or operation by Buyer, its
Affiliates, permitted assigns and/or Manager of the Property as a Residence Inn by Marriott, and
(z) if not obtained, would not have a material adverse effect on the Hotel’s business and/or
operations and/or the financial performance of the Property as reflected in the Financial
Statements. Neither the execution, delivery nor 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 the articles of organization or limited liability company agreement of Seller
or 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 Hotel.




          (b) FIRPTA. Seller is not a foreign corporation, foreign partnership,
foreign trust or foreign estate (as those items are defined in the Internal Revenue Code and income
tax regulations promulgated thereunder).




          (c) Bankruptcy. None of 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 used in or otherwise relating to the operation and business of the Hotel is
attached as Exhibit C hereto. The assets constituting the Property to be conveyed to Buyer
hereunder constitute all of the property and assets of Seller used in connection with the operation
and business of the Hotel. There are no leases, license agreements, leasing agent’s agreements,
equipment leases, building service agreements, maintenance contracts, suppliers contracts, warranty
contracts, operating agreements, or other agreements (i) to which Seller is a party or an assignee,
or (ii) to Seller’s knowledge, binding upon the Hotel, relating to the ownership, occupancy,
operation, management or maintenance of the Real Property, FF&E, Supplies or Tradenames, except for
those Service Contracts, Leases, Warranties and FF&E Leases disclosed on Exhibit C hereto
or to be delivered to Buyer pursuant to Section 3.1. The Service Contracts, Leases, Warranties and
FF&E Leases disclosed on Exhibit C hereto or to be delivered to Buyer pursuant to Section
3.1 are in full force and effect, and no default by Seller or, to Seller’s knowledge, any other
party has occurred and is continuing thereunder and, to Seller’s knowledge, 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 Hotel or any portion thereof, other than Buyer and the
Franchisor pursuant to Section XV.D of the Existing Franchise Agreement to the extent Buyer is
deemed a “Competitor” as defined in such Section.




 









 








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




          (f) Environmental, Etc. Seller has not received since January 1, 2002, and
Seller otherwise has no knowledge of, any written notice that Seller or the Property is in
violation of any applicable environmental, health or safety law, rule or regulation.




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




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




          (i) Licenses, Permits and Approvals. Seller has not received since January
1, 2002 any written notice, and Seller has no knowledge, that the Property fails to comply with all
applicable licenses, permits and approvals and federal, state or local statutes, laws, ordinances,
rules, regulations, requirements and codes including, without limitation, those regarding zoning,
land use, building, fire, health, safety, environmental, subdivision, water quality, sanitation
controls and the Americans with Disabilities Act, and similar rules and regulations relating and/or
applicable to the ownership, use and operation of the Property as it is now operated. Seller has
received all licenses, permits and approvals required or needed for the lawful conduct, occupancy
and operation of the business of the Hotel, except for licenses, permits and approvals that,
individually or in the aggregate, (x) are not required to transfer any part of the Property to
Buyer or its permitted assigns, (y) are not necessary for the ownership, occupancy and/or operation
by Buyer, its Affiliates, permitted assigns and/or Manager of the Property as a Residence Inn by
Marriott, and (z) if not obtained, would not have a material adverse effect on the Hotel’s business
and/or operations and/or the financial performance of the Property as reflected in the Financial
Statements, and each such license and permit is in full force and effect, and will be received and
in full force and effect as of the Closing. To Seller’s knowledge, no licenses, permits or
approvals necessary for the lawful conduct, occupancy or operation of the business of the Hotel
requires any approval of a governmental authority for transfer of the Property except as set forth
in Exhibit D.




          (j) Financial Statements. Seller has delivered copies of the Financial
Statements. Each of the Financial Statements is, to Seller’s knowledge, complete and accurate in
all material respects and, except in the case of budgets prepared in advance of the applicable
operating period to which such budgets relate, fairly presents the results of operations of the
Hotel for the respective periods represented thereby.




 









 








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




          (l) Operations. To Seller’s knowledge, the Hotel has been operated by the
Existing Manager in all material respects in accordance with all applicable laws, rules,
regulations, ordinances and codes.




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




          (n) Easements. To Seller’s knowledge, necessary easements for ingress and
egress, drainage, signage and utilities serving the Hotel have either been dedicated to the public,
conveyed to the appropriate utility or will be conveyed to Buyer along with the Property.




          (o) Anti-Terrorism Compliance. Seller is not a person or entity described
in Section 1 of the Executive Order (No. 13, 224) Blocking Property and Prohibiting Transactions
With Persons Who Commit, Threaten to Commit, or Support Terrorism, 66 Fed. 49,079 (September 24,
2001) (the “Executive Order”).




     As used in this Contract, “Seller’s knowledge”, “known to Seller” or similar statements shall
mean the actual knowledge of (i) Susan Ridgeway, Vice President of Operations of the Existing
Manager, (ii) John Rubino, Regional Director of Operations for the Hotel, (iii) Christopher
Bennett, Senior Vice President and General Counsel of Interstate Hotels & Resorts, Inc. (an
Affiliate of Seller and the Existing Manager), and (iv) Colin Dunkley, Vice President –
Architecture and Construction for the Hotel, in each case, after due inquiry of the General Manager
of the Hotel.



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



          (a) Authority; No Conflicts. Buyer is a corporation duly formed, validly
existing and in good standing in the Commonwealth of Virginia. Buyer has received all necessary
authorization of the Board of Directors of Buyer to execute and deliver this Contract and to
complete the transactions contemplated by this Contract. No other consent or approval of any
person, entity or governmental authority is required for the execution, delivery or performance by
Buyer of this Contract. This Contract has been duly executed and delivered by Buyer and
constitutes the valid and legally binding obligation of Buyer, enforceable against Buyer in
accordance with its terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws now or hereafter in effect relating
to creditors’ rights and by general principles of equity. Neither the execution, delivery or
performance of, or compliance with, this Contract by Buyer has resulted, or will result, in any
violation of, or default under, or acceleration of, any obligation under the articles of
incorporation or by-laws of Buyer or under any mortgage indenture, lien, agreement, promissory
note, contract, or permit, or any judgment, decree, order, restrictive covenant, statute, rule or
regulation, applicable to 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) Anti-Terrorism Compliance. Buyer is not a person or entity described in
Section 1 of the Executive Order.




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



     7.4 AS-IS. BUYER ACKNOWLEDGES THAT IT IS EXPERIENCED IN THE ACQUISITION AND
OWNERSHIP OF PROPERTIES SIMILAR TO THE PROPERTY. BUYER ACKNOWLEDGES THAT IT IS RELYING ON BUYER’S
(OR BUYER’S REPRESENTATIVES’) INSPECTIONS, EXAMINATIONS AND EVALUATIONS OF THE PROPERTY AND NOT
UPON ANY STATEMENTS (ORAL OR WRITTEN) WHICH MAY HAVE BEEN MADE OR MAY BE MADE (OR PURPORTEDLY MADE)
BY SELLER OR ANY OF ITS REPRESENTATIVES, AGENTS, BROKERS, ATTORNEYS, OFFICERS, MANAGERS OR
EMPLOYEES, OTHER THAN AS EXPRESSLY SET FORTH HEREIN OR CONTEMPLATED HEREBY (SELLER EXPRESSLY
ACKNOWLEDGING THAT BUYER IS RELYING ON THE REPRESENTATIONS, WARRANTIES AND STATEMENTS MADE IN THIS
CONTRACT AND ON INFORMATION PROVIDED PURSUANT TO THIS CONTRACT TO BUYER BY SELLER OR ITS
REPRESENTATIVES, AGENTS, BROKERS, ATTORNEYS, OFFICERS, MANAGERS OR EMPLOYEES).



     AS A MATERIAL PART OF THE CONSIDERATION FOR THIS CONTRACT AND THE PURCHASE OF THE PROPERTY,
BUYER AGREES TO ACCEPT THE REAL PROPERTY, FF&E AND SUPPLIES ON THE CLOSING DATE IN ITS OR THEIR “AS
IS, WHERE IS” CONDITION AS OF THE LAST DATE INSPECTED BY BUYER, WITH ALL FAULTS, AND EXCEPT AS
OTHERWISE PROVIDED IN THIS CONTRACT OR IN THE DEED OR ANY OTHER CLOSING DOCUMENT OR CLOSING
INSTRUMENT PROVIDED PURSUANT TO THIS CONTRACT, WITHOUT REPRESENTATIONS OR WARRANTIES OF ANY KIND,
EXPRESS OR IMPLIED, OR ARISING BY OPERATION OF LAW.



     THE PROVISIONS OF THIS SECTION 7.4 SHALL SURVIVE CLOSING.



ARTICLE VIII

ADDITIONAL COVENANTS




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



     8.2 Operations. From and after the date hereof through the Closing, Seller
shall comply in all material respects 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 past practices of
Seller and pursuant to and in compliance in all material respects with the Existing Management
Agreement and the Existing Franchise Agreement, including, without limitation, (i) using
commercially reasonable efforts to keep available the services of all present employees at the
Hotel and to preserve its relations with guests, suppliers and

 









 








other parties doing business with Seller with respect to the Hotel, (ii) accepting booking
contracts for the use of the Hotel’s facilities and 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 Hotel’s facilities, (iv)
maintaining the present level of insurance with respect to the Hotel in full force and effect until
the Closing Date 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
Agreement, the Existing Franchise Agreement, the Contracts, Plans and Specs, the Warranties and all
other applicable contractual arrangements relating to the Hotel;




          (c) Not cause or permit the removal of FF&E from the Hotel 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 at least as good a condition as on the date inspected by Buyer
during the Review Period; keep and maintain the Hotel generally in such state of repair and
condition; and not commit waste of any portion of the Hotel;




          (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 Seller’s past business practice and prudent industry practice, as if the
sale of the Hotel 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 Hotel;




          (e) Advise Buyer promptly of any litigation, arbitration, or administrative hearing
before any court or governmental agency concerning or affecting the Hotel which is instituted or,
to Seller’s knowledge, threatened after the date of this Contract or if, to Seller’s knowledge, any
representation or warranty made by Seller in this Contract shall become false in any material
respect;




          (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 Hotel or any part thereof prior to the delinquency date, and comply in all material
respects with all federal, state, and municipal laws, ordinances, regulations and orders relating
to the Hotel;




          (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, other than any sales of inventory made in the ordinary course of business
consistent with Seller’s past practice and prudent industry practice; and




          (i) Not allow any permit, receipt, license, franchise or right currently in
existence with respect to the operation, use, occupancy or maintenance of the Hotel to expire, be
canceled or otherwise terminated, if (I) any such expiration, cancellation or termination,
individually or in the aggregate, would (x) adversely affect the transfer of any part of the
Property to Buyer or its permitted assigns or (y) have a material adverse effect on the Hotel’s
business and/or operations and/or the financial performance of the Property as reflected in the
Financial Statements, or (II) any such permit, receipt, license, franchise or right is necessary
for the ownership, occupancy and/or operation by Buyer, its Affiliates, permitted assigns and/or
Manager of the Property as a Residence Inn by Marriott.




     Seller shall promptly furnish to Buyer copies of all new, amended or extended FF&E Leases,
Service Contracts, Leases and other contracts or agreements (other than routine hotel room bookings
entered into in the ordinary course of business) relating to the Hotel and entered into by Seller
or, to Seller’s knowledge, the Existing Manager prior to Closing, provided that Buyer shall not
assume, nor be deemed to assume, any of the foregoing not



 









 




disclosed to Buyer in writing at least five (5) Business Days prior to Closing. The proviso
set forth in the preceding sentence shall survive Closing. Buyer shall have the right to extend
the Review Period for a period of five (5) Business Days in order to review any of the foregoing
that are not received by Buyer at least five (5) Business Days prior to the expiration of the
Review Period. Seller shall not, without first obtaining the written approval of Buyer, which
approval shall not be unreasonably withheld, conditioned or delayed, enter into, nor permit
Existing Manager to enter into, any new FF&E Leases, Service Contracts, Leases or other contracts
or agreements related to the Hotel, or extend any existing such agreements, unless such agreements
(x) can be terminated, without penalty, upon thirty (30) days’ prior notice or (y) will expire
prior to the Closing Date.




     8.3 Third Party Consents. Prior to the Closing Date, Seller, at Seller’s
expense, shall use best efforts (i) to obtain any and all third party consents and approvals that,
individually or in the aggregate, (x) are required to transfer any part of the Property to Buyer or
its permitted assigns, (y) are necessary for the ownership, occupancy and/or operation by Buyer,
its Affiliates, permitted assigns and/or Manager of the Property as a Residence Inn by Marriott and
(z) if not obtained would have a material adverse effect on the Hotel’s business and/or operations
and/or the financial performance of the Property as reflected in the Financial Statements,
including, without limitation, all consents and approvals referred to on Exhibit D and (ii)
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 request and 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 Existing Manager, the Hotel staff and the
Existing Manager’s staff, including without limitation the general manager, the director of sales,
the engineering staff and other key management employees of the Hotel, at any time after the end of
the Review Period and before Closing; provided, however, that communication with the Hotel’s
general manager, director of sales and engineering supervisor may occur (subject to the other
limitations in this Section 8.4) at any time before the Closing. Seller shall be entitled to have
a representative present at any such meeting. Buyer shall not interfere with the operations of the
Hotel while engaging in such communication in a manner that materially adversely affects the
operation of the Property or the Existing Management Agreement.



     8.5 Estoppel Certificates. In the event that there are Leases and/or FF&E
Leases, upon request of Buyer, Seller shall obtain from (i) each tenant under any Lease (but not
from current or prospective occupants of hotel rooms and suites within the Hotel) and (ii) each
lessor under each FF&E Lease identified by Buyer as a material FF&E Lease, the estoppel
certificates in a form reasonably acceptable to Buyer, which shall be delivered 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 shall cooperate, and Seller shall cause Existing Manager to cooperate, with
Buyer and furnish upon request, all financial and other information relating to the Hotel’s
operations to the extent necessary to enable Buyer’s representatives to prepare audited financial
statements in conformity with Regulation S-X of the Securities and Exchange Commission (the “SEC”)
and other applicable rules and regulations of the SEC and to enable them to prepare a registration
statement, report or disclosure statement for filing with the SEC on behalf of Buyer or its
Affiliates, whether before or after Closing and regardless of whether such information is included
in the Records to be transferred to Buyer hereunder. Seller shall also provide to Buyer’s
representative a signed representation letter in form and substance reasonably acceptable to Seller
sufficient to enable an independent public accountant to render an opinion on the financial
statements related to the Hotel. Buyer will reimburse Seller for costs reasonably incurred by
Seller to comply with the requirements of the preceding sentence to the extent that Seller is
required to incur costs not in the ordinary course of business for third parties to provide such
representation letter. The provisions of this Section shall survive Closing.



     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 successors and assigns from and against all losses, judgments, liabilities, claims, damages or
expenses (including reasonable attorneys’ fees) of every kind, nature and description in existence
before, on or after Closing, whether known or unknown, absolute or continent, joint or several
(collectively, “Damages”), arising out of or relating to:





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




               (ii) the breach of any representation, warranty, covenant or agreement of
Seller contained in this Contract;




               (iii) any liability or obligation of Seller other than the Assumed
Obligations; and




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



          (b) Indemnification of Seller. Without in any way limiting or diminishing
the warranties, representations or agreements herein contained or the rights or remedies available
to Seller for a breach hereof, Buyer hereby agrees to indemnify, defend and hold harmless Seller
and its successors from and against all Damages arising out of or relating to:





               (i) the breach of any representation, warranty, covenant or agreement of
Buyer contained in this Contract;




               (ii) the conduct and operation by or on behalf of Buyer of the Hotel or the
ownership, use or operation of the Property after the Closing; and




               (iii) the Assumed Obligations.



          (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 thirty (30) days after such notice, at
its option, to elect to settle, compromise or defend, pursuant to this paragraph, by its own
counsel and at its own expense, any such Legal Action involving such Indemnified Party’s
asserted liability. If the Indemnifying Party does not undertake to settle, compromise or
defend any such Legal Action, such settlement, compromise or defense shall be conducted



 









 







in the sole discretion of such Indemnified Party, but such Indemnified Party shall
provide the Indemnifying Party with such information concerning such settlement, compromise
or defense as the Indemnifying Party may reasonably request from time to time and shall
notify the Indemnifying Party at least ten (10) days prior to any proposed settlement of the
terms thereof. If the Indemnifying Party undertakes to settle, compromise or defend any
such asserted liability, it shall notify such Indemnified Party in writing of its intention
to do so within thirty (30) days of notice from such Indemnified Party provided above.




               (iii) Notwithstanding the provisions of the previous subsection of this
Contract, until the Indemnifying Party shall have assumed the defense of the Legal Action,
the defense shall be handled by the Indemnified Party. Furthermore, (x) if the Indemnified
Party shall have reasonably concluded that there are likely to be defenses available to it
that are different from or in addition to those available to the Indemnifying Party; (y) if
the Legal Action involves other than money damages and seeks injunctive or other equitable
relief; or (z) if a judgment against Buyer, as the Indemnified Party, in the Legal Action
will, in the good faith opinion of Buyer, establish a custom or precedent which will be
adverse to the best interest of the continuing business of the Hotel, the Indemnifying
Party, shall not be entitled to assume the defense of the Legal Action and the defense shall
be handled by the Indemnified Party, provided that, in the case of clause (z), the
Indemnifying Party shall have the right to approve legal counsel selected by the
Indemnified Party, such approval not to be unreasonably withheld, delayed or conditioned.
If the defense of the Legal Action is handled by the Indemnified Party under the provisions
of this subsection, the Indemnifying Party shall pay all legal and other expenses reasonably
incurred by the Indemnified Party in conducting such defense, unless a judicial
determination is made that the Indemnified Party is not entitled to indemnification pursuant
to this Section 8.8.




               (iv) In any Legal Action initiated by a third party and defended by the
Indemnified Party (w) the Indemnified Party shall have the right to be represented by
advisory counsel and accountants, at its own expense, (x) the Indemnifying Party shall keep
the Indemnified Party fully informed as to the status of such Legal Action at all stages
thereof, whether or not the Indemnified Party is represented by its own counsel, (y) the
Indemnifying Party shall make available to the Indemnified Party and its attorneys, accounts
and other representatives, all books and records of the Indemnifying Party relating to such
Legal Action and (z) the parties shall render to each other such assistance as may be
reasonably required in order to ensure the proper and adequate defense of such Legal Action.




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



          (d) Limitation of Seller’s Liability. Notwithstanding anything in this
Contract to the contrary, Seller’s obligation to indemnify Buyer pursuant to Section 8.8(a) shall
be subject to the following:





               (i) Deductible. Buyer shall not be entitled to recover Damages
pursuant to Section 8.8(a) until the aggregate of all Damages suffered by Buyer exceeds Ten
Thousand and No/100 Dollars ($10,000.00) (the “Deductible Amount”); provided, however, that
once such aggregate exceeds the Deductible Amount, Buyer may recover all Damages suffered by
Buyer in excess of the Deductible Amount.




               (ii) Ceiling. Buyer shall not be entitled to recover Damages
pursuant to Section 8.8(a) in excess of One Million One Hundred Thousand and No/100 Dollars
($1,100,000.00) (the “Ceiling Amount”).



 









 






               (iii) Time Limitation. No claim for the recovery of Damages may be
asserted by Buyer against Seller or its successors or permitted assigns pursuant to Section
8.8(a) after the date that is two (2) years after the Closing Date; provided, however, that
claims for Damages first asserted in writing by Buyer within such time period shall not
thereafter be barred.




               (iv) Exclusive Remedy. Except with respect to any claim for Damages
relating to any intentional or fraudulent breach of a representation, warranty or covenant
of Seller and except as otherwise proved in this Contract, indemnification under this
Section 8.8 shall be the exclusive remedy of Buyer subsequent to Closing with respect to any
legal, equitable or other claim for relief based upon this Contract or arising hereunder.




               (v) Exceptions. The limitations set forth in this Section 8.8(d)
shall not apply with respect to any claim for Damages relating to any Retained Obligations,
any obligations or liabilities subject to adjustment under Article XII or any intentional or
fraudulent breach of a representation, warranty or covenant of Seller, nor shall there be
any survival limitation for any such claim except as provided by applicable law.



          (e) Limitation of Buyer’s Liability. Notwithstanding anything in this
Contract to the contrary, Buyer’s obligation to indemnify Seller pursuant to Section 8.8(b) shall
be subject to the following:





               (i) Deductible. Seller shall not be entitled to recover Damages
pursuant to Section 8.8(b) until the aggregate of all Damages suffered by Seller exceeds the
Deductible Amount; provided, however, that once such aggregate exceeds the Deductible
Amount, Seller may recover all Damages suffered by Seller in excess of the Deductible
Amount.




               (ii) Ceiling. Seller shall not be entitled to recover Damages
pursuant to Section 8.8(b) in excess of the Ceiling Amount.




               (iii) Time Limitation. No claim for the recovery of Damages may be
asserted by Seller against Buyer or its successors or permitted assigns pursuant to clause
(i) of Section 8.8(b) after the date that is two (2) years after the Closing Date; provided,
however, that claims for Damages first asserted in writing by Seller within such time period
shall not thereafter be barred.




               (iv) Exclusive Remedy. Except with respect to any claim for Damages
relating to any intentional or fraudulent breach of a representation, warranty or covenant
of Buyer and except as otherwise provided in this Contract, indemnification under this
Section 8.8 shall be the exclusive remedy of Seller subsequent to Closing with respect to
any legal, equitable or other claim for relief based upon this Contract or arising
hereunder.




               (v) Exceptions. The limitations set forth in this Section 8.8(e)
shall not apply with respect to any claim for Damages relating to any Assumed Obligations,
any tax obligations or tax liabilities relating to Buyer, or its Affiliates, or the Property
payable or arising in respect of any period after the Closing, any obligations or
liabilities subject to adjustment under Article XII or any intentional or fraudulent breach
of a representation, warranty or covenant of Buyer, nor shall there be any survival
limitation for any such claim except as provided by applicable law.



          (f) Survival. The provisions of this Section 8.8 shall survive Closing,
subject to the limitations set forth herein.




     8.9 Escrow Funds. To provide for the timely payment of any post-closing
claims by Buyer against Seller hereunder, at Closing, an amount equal to Two Hundred Thousand and
No/100 Dollars ($200,000.00) (the “Escrow Funds”) shall be withheld from the Purchase Price payable
to Seller and shall be deposited until the later of (i) one hundred eighty (180) days after the
Closing Date or (ii) the date on which the Tax Clearance Certificate is delivered to Seller
pursuant to Section 11.1 (the “Release Date”) in an escrow account with the Title Company



 









 




pursuant to an escrow agreement reasonably satisfactory in form and substance to Buyer and
Seller (the “Post-Closing Agreement”), which escrow and Post-Closing Agreement shall be established
and entered into at Closing and shall be a condition to Buyer’s obligations under this Contract.
The Escrow Funds held on the Release Date shall be released to Seller, provided, that the Title
Company shall retain, hold and disburse pursuant to the Post-Closing Agreement Escrow Funds in an
amount equal to one hundred ten percent (110%) of the aggregate amount of the unresolved claims
asserted by Buyer as of the Release Date.




     8.10 Liquor Licenses. Seller represents and warrants that no liquor or
other alcoholic beverages are sold or served at the Hotel other than Existing Manager’s current
practice of serving complimentary liquor and alcoholic beverages at manager’s receptions. During
the Review Period, Seller shall cooperate with reasonable requests from Buyer to assist Buyer in
confirming that Buyer, its Affiliates and/or the Manager shall be permitted to continue the
Existing Manager’s practice of serving complimentary liquor and alcoholic beverages at the Hotel
without being required to obtain a liquor or alcoholic beverage license.



     8.11 Possession; Assignment and Assumption. Possession of the Property
shall be given by Seller to Buyer at Closing, and Seller shall deliver to Buyer at Closing, in
addition to all other deliveries of Seller provided for in Section 10.2 or otherwise pursuant to
this Contract, all Hotel Contracts assigned to and assumed by Buyer pursuant to the terms of this
Contract, together with evidence reasonably satisfactory to Buyer that all Hotel Contracts not
assigned to and assumed by Buyer have been terminated as of Closing. Buyer shall not assume, and
Seller shall sell the Property to Buyer free and clear of, all obligations and liabilities of
Seller, except that, unless otherwise agreed by Buyer and Seller, at Closing, Buyer shall assume
those obligations of Seller under the Hotel Contracts described on Exhibit C (collectively,
the “Assumed Contracts”) arising in respect of any period from and after the Closing Date (other
than any liability or obligation arising from or in any way related to any breach or default by
Seller or Existing Manager) (collectively, the “Assumed Obligations”). At Closing, Seller shall
assign to Buyer all rights and privileges in, under and to the Assumed Contracts. Seller agrees
that it is, and after Closing shall remain, liable for (i) all obligations and liabilities under
(x) the Assumed Contracts arising in respect of any period prior to the Closing Date and/or (y)
under all Hotel Contracts not assumed by Buyer at Closing, including, in each case, all obligations
and liabilities arising from or in any way related to any breach or default by Seller or Existing
Manager thereunder, (ii) all tax obligations and tax liabilities relating to Seller, or its
Affiliates or the Property payable or arising in respect of any period prior to Closing and (iii)
all obligations and liabilities arising with respect to the matter described on Exhibit F
hereto (collectively, the “Retained Obligations”). The provisions of the preceding sentence shall
survive Closing.



     8.12 Buyer’s Covenants. From and after the date hereof until the Closing,
Buyer shall 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 Buyer contained in
this Contract.



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 declare
this Contract terminated, in which case the Earnest Money Deposit and any interest thereon shall be
immediately returned to Buyer and each of the parties shall be relieved from further liability to
the other, except as otherwise expressly provided herein. Notwithstanding the foregoing, in the
event of the failure of any of any condition set forth in this Section 9.1 as a result of a default
by Seller pursuant to Section 14.2, Buyer shall be entitled to exercise its remedies provided for
in such Section 14.2.



          (a) All of Seller’s representations and warranties contained in 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 referred to in clause (i) of Section 8.3 in form and
substance reasonably satisfactory to Buyer shall have been obtained and furnished to Buyer.




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




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




          (g) Buyer and the Manager shall have executed and delivered the New Management
Agreement and Buyer and the Franchisor shall have executed and delivered the New Franchise
Agreement, in each case upon terms and conditions acceptable to Buyer in its sole and absolute
discretion.




     9.2 Seller’s Conditions for Closing. Unless otherwise waived in writing,
the duties and obligations of Seller to proceed to Closing under the terms and provisions of this
Contract are and shall be expressly subject to strict compliance with, and satisfaction or waiver
of, each of the conditions and contingencies set forth in this Section 9.2, each of which shall be
deemed material to this Contract. In the event of the failure of any of the conditions set forth
in this Section 9.2, which condition is not waived in writing by Seller, Seller shall have the
right at its option to declare this Contract terminated and null and void, in which case the
Earnest Money Deposit and any interest thereon shall be immediately returned to Buyer and each of
the parties shall be relieved from further liability to the other, except as otherwise expressly
provided herein. Notwithstanding the foregoing, in the event of the failure of any condition set
forth in this Section 9.2 as a result of a default by Buyer pursuant to Section 14.1, Seller shall
be entitled to exercise its remedy provided for in such Section 14.1.



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




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




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




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




          (e) The Existing Franchise Agreement shall have been terminated in accordance with
Article V.




     9.3 Return of Earnest Money Deposit. Notwithstanding anything to the
contrary in Section 9.1 or 9.2 or Article XIV, if the Closing does not occur solely as a result of
the New Franchise Agreement not having been executed and delivered at or prior to the Closing,
Buyer shall be entitled to extend the Closing Date up to thirty (30) days (the “Extension Period”);
provided, however, that in the event Closing does not occur within the first seven (7) days of the
Extension Period solely as a result of the New Franchise Agreement not having been executed and all
other conditions to Closing have been, or at Closing would have been, satisfied, on the next
Business Day, Buyer shall deposit the additional sum of Two Hundred Fifty Thousand and No/100
Dollars ($250,000,00), in cash,



 









 




certified bank check or by wire transfer of immediately available funds (the “Extension
Deposit”) with the Escrow Agent, which Extension Deposit, and all interest accrued thereon, shall
become part of and be held, applied to the Purchase Price and/or disbursed in accordance with all
terms and provisions applicable to the “Earnest Money Deposit” for all purposes under this Contract
and the Escrow Agreement, provided, further that in the event Closing does not occur at the end of
the Extension Period solely as a result of the New Franchise Agreement not having been executed and
all other conditions to Closing have been, or at Closing would have been, satisfied Seller shall be
entitled to the Earnest Money Deposit and any interest thereon and, unless otherwise agreed by
Buyer and Seller, this Contract shall be terminated and neither party shall have any obligations or
liabilities hereunder except pursuant to Sections 3.3 and 16.6.




ARTICLE X

CLOSING AND CONVEYANCE




     10.1 Closing. Unless otherwise agreed by Buyer and Seller, the Closing on
the Property shall occur on a date selected by Buyer that is not later than fifteen (15) days after
expiration of the Review Period. Buyer will provide Seller at least five (5) days prior written
notice of the Closing Date selected by Buyer. The date on which the Closing is to occur as
provided in this Section 10.1, or such other date as may be agreed upon by Buyer and Seller, is
referred to in this Contract as the “Closing Date” for the Property. The Closing shall be held at
10:00 a.m. at the offices of the Title Company, or as otherwise determined by Buyer and Seller.



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



          (a) Deed. A Special Warranty Deed conveying to Buyer fee simple title to
the Real Property, subject only to the Permitted Exceptions in the form of Exhibit H hereto
(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), in the form of
Exhibit I hereto (the “Bills of Sale”).




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




          (d) General Assignments. Assignments of all of Seller’s right, title and
interest in and to all Assumed Contracts, provided that Buyer shall only assume the Assumed
Obligations. The assignment shall also be a general assignment and shall provide for the
assignment of all of Seller’s right, title and interest in all Records, Warranties, Licenses,
Tradenames, Contracts, Plans and Specs and all other intangible Personal Property applicable to the
Hotel.




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




          (f) Title Company Documents. All affidavits, gap indemnity agreements and
other documents reasonably required by the Title Company from Seller.




          (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 material FF&E
Leases in form and substance reasonably 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 leased or owned by Seller or the Existing Manager and
used in connection with the Hotel’s operations.




          (i) Authority Documents. Certified copy of resolutions of Seller’s
constituent members 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 Commonwealth of Pennsylvania.




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




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




          (l) Closing Statements. Seller’s Closing Statement, and a certificate
confirming the accuracy in all material respects (except where qualified as to materiality in this
Contract) of Seller’s representations and warranties hereunder as of the Closing Date.




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



          (a) Purchase Price. The balance of the Purchase Price, adjusted for the
adjustments provided for in Section 12.1 and less any sums to be deducted therefrom as provided in
Section 2.4 (provided that the Escrow Agent shall deliver the Earnest Money Deposit to Seller at
Closing if such amount is deducted from the portion of the Purchase Price funded at Closing by
Buyer).




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




          (c) Assumption. An assumption by Buyer of the Assumed Obligations.




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




          (e) Closing Statements. Buyer’s Closing Statement, and a certificate
confirming the accuracy in all material respects (except where qualified as to materiality in this
Contract), of Buyer’s representations and warranties hereunder as of the Closing Date.




 









 








ARTICLE XI

COSTS




     All Closing costs shall be paid as set forth below:



     11.1 Seller’s Costs. In connection with the sale of the Property
contemplated under this Contract, Seller shall be responsible for all transfer and recordation
taxes, including, without limitation, all transfer, sales, use or bulk transfer taxes or like taxes
on or in connection with the transfer of the Personal Property constituting part of the Property
pursuant to the Bill of Sale, all accrued taxes of Seller, all taxes relating to the Property or
the business conducted thereon payable in respect of any period prior to Closing and all income,
sales and use taxes and other such taxes of Seller attributable to the sale of the Property to
Buyer. In connection with the foregoing, Seller shall take any and all steps reasonably necessary
to prevent Buyer from incurring successor or transferee liability for any of the foregoing taxes,
including, without limitation, correctly filing all state tax reports and making all payments with
respect to all such taxes and providing to Buyer such documentation as Buyer may reasonably request
to evidence such filing and payment. Promptly after the expiration of the Review Period, and no
later than ten (10) days prior to Closing, Seller shall apply for a tax clearance certificate from
the Pennsylvania Department of Revenue reflecting that all state tax reports have been filed and
all payments have been made (the “Tax Clearance Certificate”), and Seller shall diligently pursue
receipt of, and use best efforts to obtain, the Tax Clearance Certificate at the earliest possible
date, all at Seller’s cost and expense. Upon Seller’s receipt of the Tax Clearance Certificate
from the Pennsylvania Department of Revenue, Seller shall promptly provide a copy of the Tax
Clearance Certificate to Buyer. Seller shall be responsible for all costs related to the
termination of the Existing Management Agreement and the Existing Franchise Agreement except as
expressly as provided in Article V. Seller shall also be responsible for the costs and expenses of
its attorneys, accountants, appraisers and other professionals, consultants and representatives.
Seller shall also be responsible for payment of all prepayment penalties and other amounts payable
in connection with the pay-off of any liens and/or indebtedness encumbering the Property. The
provisions of this Section 11.1 shall survive Closing.



     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 new survey or update to Seller’s existing survey and the costs and expenses of
preparation of the Title Commitment and the issuance of the Title Policy contemplated by Article IV
and the per page recording charges for the Deed (if applicable). Buyer shall be responsible for
all license, application and similar fees payable in connection with the New Management Agreement
or the New Franchise Agreement and all costs to complete all PIP improvements required by the
Franchisor in connection with the New Franchise Agreement.



ARTICLE XII

ADJUSTMENTS




     12.1 Adjustments. Unless otherwise provided herein, at Closing, adjustments
between the parties shall be made as of 12:01 a.m. on the Closing Date (the “Cutoff Time”), with
the income and expenses accrued prior to the Closing Date being allocated to Seller and the income
and expenses accruing on and after the Closing Date being allocated to Buyer, all as set forth
below. All of such adjustments and allocations shall be made in cash at Closing. Except as
otherwise expressly provided herein, all apportionments and adjustments shall be made on an accrual
basis in accordance with generally accepted accounting principles. Buyer and Seller shall request
that the Existing Manager and the Manager coordinate to determine the apportionments, allocations,
prorations and adjustments as of the Cutoff Time.



          (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 Hotel for the calendar year in which Closing occurs.




 









 








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




          (c) Income/Charges. All rents, income and charges receivable or payable
under any Assumed Contracts applicable to the Property, and any deposits, prepayments and receipts
thereunder, shall be prorated between Buyer and Seller as of the Cutoff Time, provided that, except
as expressly provided herein with respect to the Existing Franchise Agreement, Seller shall be
responsible for all amounts payable under any Hotel Contracts not assigned to and assumed by Buyer
pursuant to the terms of this Contract (including, without limitation, all accrued and unpaid
amounts and all termination fees).




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




          (e) Guest Ledger. Subject to (f) below, all accounts receivable of
registered guests at the Hotel who have not checked out and were occupying rooms as of the Cutoff
Time, shall be prorated as provided herein.




          (f) Room Rentals. All receipts from guest room rentals and other suite
revenues for the night in which the Cutoff Time occurs shall belong to Seller, but Seller shall
provide Buyer credit at Closing equal to the reasonable expenses to be incurred by Buyer to clean
such guests’ rooms.




          (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 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 Hotel (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 Hotel shall be prorated between Seller and Buyer at Closing.




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



 









 





     12.3 Employees. Unless Buyer or the Manager expressly agrees otherwise,
none of the employees of the Hotel shall become employees of Buyer, as of the Closing Date;
instead, such employees shall continue as employees of the Existing Manager. Seller shall not give
notice under any applicable federal or state plant closing or similar act, including, if
applicable, the Worker Adjustment and Retraining Notification Provisions of 29 U.S.C., Section
2102, the parties having agreed that a mass layoff, as that term is defined in 29 U.S.C.,
2101(a)(3), will not have occurred. Any liability for payment of all wages, salaries and benefits,
including, without limitation, accrued vacation pay, sick leave, bonuses, pension benefits, COBRA
rights, and other benefits accrued or earned by and due to employees at the Hotel through the
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 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.



ARTICLE XIII

CASUALTY AND CONDEMNATION




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



     13.2 Buyer’s Termination Right. If, prior to Closing and the delivery of
possession of the Property to Buyer in accordance with this Contract, (a) any condemnation
proceeding shall be pending against a substantial portion of the Hotel or (b) there is any
substantial casualty loss or damage to the Hotel, Buyer shall have the option to terminate this
Contract, provided Buyer delivers written notice to Seller of its election within twenty (20) days
after the date Seller has delivered Buyer written notice of any such loss, damage or condemnation
as provided above, and in such event, the Earnest Money Deposit, and any interest thereon, shall be
delivered to Buyer and thereafter, except as expressly set forth herein, no party shall have any
further obligation or liability to the other under this Contract. In the context of condemnation,
“substantial” shall mean condemnation of such portion of the Hotel (or access thereto) as could, in
Buyer’s reasonable judgment, render use of the remainder impractical or unfeasible for the uses
herein contemplated, and, in the context of casualty loss or damage, “substantial” shall mean a
loss or damage in excess of Two Hundred Thousand and No/100 Dollars ($200,000.00) in value.



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



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
(provided no notice shall extend the time for Closing), then at Seller’s election by written notice
to Buyer, this Contract shall be terminated and of no effect, in which event the Earnest Money
Deposit, including any interest thereon, shall be paid to and retained by the Seller as



 









 




Seller’s sole and exclusive remedy hereunder, and as liquidated damages for Buyer’s default or
failure to close, and both Buyer and Seller shall thereupon be released from all obligations
hereunder.




     14.2 Seller Default. If Seller defaults under this Contract, and such
default continues for thirty (30) days following written notice from Buyer (provided no notice
shall extend the time for Closing), Buyer may elect, as Buyer’s sole and exclusive remedy, either
(i) to terminate this Contract by written notice to Seller delivered to Seller, in which event the
Earnest Money Deposit, including any interest thereon, shall be returned to the Buyer, and
thereafter both the Buyer and Seller shall thereupon be released from all obligations with respect
to this Contract, except as otherwise expressly provided herein; or (ii) to treat this Contract as
being in full force and effect by written notice to Seller delivered to Seller at any time prior to
the completion of such cure, in which event the Buyer shall have the right to an action against
Seller for damages, specific performance and all other rights and remedies available at law or in
equity, provided that in any action for damages Seller’s liability shall be limited to actual
out-of-pocket transactions costs (including, without limitation, legal fees) incurred by Buyer in
connection with the transactions contemplated hereby and Buyer’s proposed purchase of the Property,
but not to exceed Two Hundred Thousand and No/100 Dollars ($200,000.00) except in the case of any
claim for damages relating to any intentional or fraudulent breach of any representation, warranty
or covenant of Seller, in which event, the limitation set forth in this proviso shall not apply.



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





	 	 	 	 	 	 	 	 	 
	 	 	If to Buyer:	 	Apple Six Hospitality Ownership, Inc.
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Attention:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Fax No.:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	with a copy to:	 	McGuireWoods LLP
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Attention:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Fax No.:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	If to Seller:	 	Interstate Pittsburgh Hotel Holdings, L.L.C.
	 	 	 	 	c/o Interstate Hotels & Resorts, Inc.
	 	 	 	 	4501 N. Fairfax Drive, Suite 800
	 	 	 	 	Arlington, Virginia 22203
	 	 	 	 	Attention: Christopher Bennett, Senior Vice President
and General Counsel
	 	 	 	 	Fax No.: (703) 387-3389






 









 






	 	 	 	 	 	 	 	 	 
	 	 	 with a copy to:	 	Eckert Seamans Cherin & Mellott, LLC
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Attention:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Fax No.:	 	 	 	 
	 

	 	 	 	 	 	 	 	 






     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.



     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 permitted
assigns. Buyer may not assign this Contract without the prior written consent of Seller, which
consent shall not be unreasonably withheld, conditioned or delayed; provided, however, that Buyer
may assign its rights hereunder, without obtaining Seller’s consent, to an Affiliate of Buyer
provided that Buyer is not released from liability pursuant to Section 3.3. Buyer shall provide
Seller with written notice of such assignment to an Affiliate of Buyer within a reasonable period
of time prior to Closing. Seller shall not assign this Contract without the prior written consent
of Buyer.



     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 Commonwealth of Pennsylvania (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.



          (a) 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 Existing
Manager, the Franchisor and the Title Company and except as necessitated by the 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 public 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.




          (b) Buyer shall keep confidential all information received from or on behalf of
Seller during or in connection with the Due Diligence Examination (not already in the public domain
or previously known to Buyer from other sources not bound by a confidentiality agreement with
Seller the existence of which has been disclosed in writing to Buyer by Seller) and shall not
disclose said information to any third party without Seller’s prior written consent.
Notwithstanding the immediately preceding sentence, Buyer may disclose such information and the
terms of this transaction (i) to the Franchisor and the Manager and to Buyer’s successors,
permitted assigns,

 










 







Affiliates, investors, lenders, employees, agents, attorneys, advisors and/or consultants
provided that such persons agree to maintain the confidentiality of such information and this
transaction, and (ii) as required by applicable law.




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



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



     16.9 Severability. If any provision of this Contract shall, for any reason,
be adjudged by any court of competent jurisdiction to be invalid or unenforceable, such judgment
shall not affect, impair or invalidate the remainder of this Contract but shall be confined in its
operation to the provision or provisions hereof directly involved in the controversy in which such
judgment shall have been rendered, and this Contract shall be construed as if such provision had
never existed, unless such construction would operate as an undue hardship on Seller or Buyer or
would constitute a substantial deviation from the general intent of the parties as reflected in
this Contract.



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



     16.11 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.



[Signatures Begin on Following Page]




 









 








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



	 	 	 	 	 
	 	 	SELLER:
	 
	 	 	 	 
	 	 	INTERSTATE PITTSBURGH HOTEL HOLDINGS, L.L.C., 
a
Delaware limited liability company
	 
	 	 	 	 
	 

	 	By:	 	/s/ CHRISTOPHER L. BENNETT
	 

	 	 	 	 
	 

	 	Name:	 	Christopher L. Bennett
	 

	 	 	 	 
	 

	 	Title:	 	Senior Vice President and General Counsel
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	BUYER:
	 
	 	 	 	 
	 	 	APPLE SIX HOSPITALITY OWNERSHIP, INC., a Virginia
corporation
	 
	 	 	 	 
	 

	 	By:	 	/s/ AUTHORIZED SIGNATORY
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	Vice President 
	 

	 	 	 	 






 










 






FIRST AMENDMENT

TO

PURCHASE CONTRACT




     THIS FIRST AMENDMENT TO PURCHASE CONTRACT (this “Amendment”) is entered into as of July 29,
2005, by and between INTERSTATE PITTSBURGH HOTEL HOLDINGS, L.L.C., a Delaware limited liability
company (“Seller”), and APPLE SIX HOSPITALITY OWNERSHIP, INC., a Virginia corporation (“Buyer”).



RECITALS




     A. Seller and Buyer are parties to that certain Purchase Contract dated as of June 15,
2005 (the “Contract”), with respect to a Residence Inn hotel in Pittsburgh, Pennsylvania.



     B. Seller and Buyer desire to amend the Contract as hereinafter provided.



AGREEMENT




     NOW, THEREFORE, for and in consideration of the premises and the mutual agreements herein set
forth and further good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Seller and Buyer hereby agree as follows:



     1. Capitalized terms used but not otherwise defined herein shall have the meanings
given to such terms in the Contract.



     2. The Contract is modified by replacing Exhibit C in its entirety with the form of
Exhibit C attached hereto.



     3. Seller and Buyer acknowledge and agree that, except as amended herein, the
Contract is in full force and effect and is hereby ratified and confirmed.



     4. This Amendment (i) may be executed by facsimile signatures and in several
counterparts, and each counterpart when so executed and delivered shall constitute an original
of this Amendment, and all such separate counterparts shall constitute but one and the same
Amendment and (ii) embodies the entire agreement and understanding between the parties with
respect to the subject matter hereof and supercedes all prior agreements, consents and
understandings related to such subject matter.



[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK;

SIGNATURE PAGES FOLLOW]







 









 








     EXECUTED to be effective as of the date first above written.



	 	 	 	 	 	 	 
	 	 	SELLER:
	 
	 	 	 	 	 	 
	 	 	INTERSTATE PITTSBURGH HOTEL

HOLDINGS, L.L.C., a Delaware limited liability

company
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ JAMES A. CROLLE III	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	James A. Crolle III	 	 
	 

	 	Title:
	 	Senior Corporate Counsel	 	 
	 
	 	 	 	 	 	 
	 	 	BUYER:
	 
	 	 	 	 	 	 
	 	 	APPLE SIX HOSPITALITY OWNERSHIP, INC.
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ DAVID BUCKLEY	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	David Buckley 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	Vice President 	 	 
	 

	 	 	 	 	 	 







2









 







EXHIBIT C




LIST OF HOTEL CONTRACTS





	1.	 	Security Services Agreement dated April 20, 1998, by and between ADT SECURITY
SERVICES, INC. and the SELLER.
	 
	2.	 	Waste Removal Agreement dated November 1, 2004, by and between BFI WASTE
SERVICES OF PITTSBURGH and the SELLER.
	 
	3.	 	Special Products Rental Agreement dated February 23, 2000, by and between CINTAS
CORPORATION and the SELLER.
	 
	4.	 	Elevator Maintenance Agreement dated June 3, 1999, by and between MARSHALL
ELEVATOR COMPANY and the SELLER.
	 
	5.	 	Airport Phone Board Agreement dated June 6, 2005, by and between JCDECAUX
AIRPORT and the SELLER.
	 
	6.	 	Telephone and Voicemail Maintenance & Service Agreement dated January 20, 2005, by
and between MIS ASSOCIATES, INC. and the SELLER
	 
	7.	 	Cable Service Agreement dated September 28, 2004, by and between ON COMMAND
VIDEO CORPORATION and the SELLER.
	 
	8.	 	Area Reservations Sales Office Shared Service Agreement dated January 1, 2005, by and
between MARRIOTT INTERNATIONAL, INC. and the SELLER.
	 
	9.	 	Two Way Radio Service Agreement dated November 6, 2002, by and between STALEY
COMMUNICATIONS, INC. and the SELLER.
	 
	10.	 	Fire Panel Monitoring Service Agreement dated April 22, 2005, by and between
SIMPLEXGRINNELL LP and the SELLER.
	 
	11.	 	Xerox Fax Order Agreement dated April 23, 2003, by and between XEROX
CORPORATION and the SELLER.
	 
	12.	 	Landscape Maintenance Agreement dated April 15, 2005, by and between
PLANTSCAPE, INC. and the SELLER.
	 
	13.	 	Agreement dated March 26, 1997 between Regional Industrial Development Corporation
of Southwestern Pennsylvania and IHC Realty Partnership, L.P. (Recorded March 27,
1997 in the Recorder’s Office of Allegheny County, Pennsylvania, in Deed Book 9910,
page 196.)




3