Document:

Exhibit 10.41

Austin/Round Rock (Homewood Suites)

PURCHASE CONTRACT

between

VHRMR ROUND ROCK, LTD. (“SELLER”)

AND

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

Dated: May 27, 2011

TABLE OF CONTENTS

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 Page No.

 
	
  

 	
  

 	
  

 	
  

 	
  

 	

 

 
	
  

 
	
 ARTICLE I

 	
  

 	
 DEFINED
 TERMS

 	
  

 	
 1

 
	
  

 	
 1.1

 	
  

 	
 Definitions

 	
  

 	
 1

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE II

 	
  

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

 	
  

 	
 7

 
	
  

 	
 2.1

 	
  

 	
 Purchase and
 Sale

 	
  

 	
 7

 
	
  

 	
 2.2

 	
  

 	
 Intentionally
 Deleted

 	
  

 	
 7

 
	
  

 	
 2.3

 	
  

 	
 Purchase
 Price

 	
  

 	
 7

 
	
  

 	
 2.4

 	
  

 	
 Allocation

 	
  

 	
 7

 
	
  

 	
 2.5

 	
  

 	
 Payment

 	
  

 	
 7

 
	
  

 	
 2.6

 	
  

 	
 Earnest Money
 Deposit

 	
  

 	
 8

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE III

 	
  

 	
 REVIEW
 PERIOD

 	
  

 	
 8

 
	
  

 	
 3.1

 	
  

 	
 Review
 Period

 	
  

 	
 8

 
	
  

 	
 3.2

 	
  

 	
 Due
 Diligence Examination

 	
  

 	
 9

 
	
  

 	
 3.3

 	
  

 	
 Restoration

 	
  

 	
 10

 
	
  

 	
 3.4

 	
  

 	
 Buyer’s
 Inspections

 	
  

 	
 10

 
	
  

 	
 3.5

 	
  

 	
 Seller
 Exhibits

 	
  

 	
 10

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE IV

 	
  

 	
 SURVEY AND
 TITLE APPROVAL

 	
  

 	
 11

 
	
  

 	
 4.1

 	
  

 	
 Survey

 	
  

 	
 11

 
	
  

 	
 4.2

 	
  

 	
 Title

 	
  

 	
 11

 
	
  

 	
 4.3

 	
  

 	
 Survey or
 Title Objections

 	
  

 	
 11

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE V

 	
  

 	
 MANAGEMENT
 AGREEMENT AND FRANCHISE AGREEMENT

 	
  

 	
 12

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE VI

 	
  

 	
 BROKERS

 	
  

 	
 12

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE VII

 	
  

 	
 REPRESENTATIONS
 and WARRANTIES

 	
  

 	
 13

 
	
  

 	
 7.1

 	
  

 	
 Seller’s
 Representations and Warranties

 	
  

 	
 13

 
	
  

 	
 7.2

 	
  

 	
 Buyer’s
 Representations and Warranties

 	
  

 	
 17

 
	
  

 	
 7.3

 	
  

 	
 Survival

 	
  

 	
 17

 
	
  

 	
 7.4

 	
  

 	
 Changed
 Conditions

 	
  

 	
 17

 
	
  

 	
 7.5

 	
  

 	
 AS-IS

 	
  

 	
 18

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE VIII

 	
  

 	
 ADDITIONAL
 COVENANTS

 	
  

 	
 19

 
	
  

 	
 8.1

 	
  

 	
 Subsequent
 Developments

 	
  

 	
 19

 
	
  

 	
 8.2

 	
  

 	
 Operations

 	
  

 	
 19

 
	
  

 	
 8.3

 	
  

 	
 Third Party
 Consents

 	
  

 	
 20

 
	
  

 	
 8.4

 	
  

 	
 Employees

 	
  

 	
 21

 
	
  

 	
 8.5

 	
  

 	
 Estoppel
 Certificates

 	
  

 	
 21

 
	
  

 	
 8.6

 	
  

 	
 Access to
 Financial Information

 	
  

 	
 21

 
	
  

 	
 8.7

 	
  

 	
 Bulk Sales

 	
  

 	
 21

 
	
  

 	
 8.8

 	
  

 	
 Indemnification

 	
  

 	
 22

 

i

TABLE OF CONTENTS
(Continued)

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 Page No.

 
	
  

 	
  

 	
  

 	
  

 	
  

 	

 

 
	
  

 
	
  

 	
 8.9

 	
  

 	
 Escrow Funds

 	
  

 	
 24

 
	
  

 	
 8.10

 	
  

 	
 Liquor
 Licenses

 	
  

 	
 24

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE IX

 	
  

 	
 CONDITIONS
 FOR CLOSING

 	
  

 	
 25

 
	
  

 	
 9.1

 	
  

 	
 Buyer’s
 Conditions for Closing

 	
  

 	
 25

 
	
  

 	
 9.2

 	
  

 	
 Seller’s
 Conditions for Closing

 	
  

 	
 26

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE X

 	
  

 	
 CLOSING AND
 CONVEYANCE

 	
  

 	
 26

 
	
  

 	
 10.1

 	
  

 	
 Closing

 	
  

 	
 26

 
	
  

 	
 10.2

 	
  

 	
 Deliveries
 of Seller

 	
  

 	
 27

 
	
  

 	
 10.3

 	
  

 	
 Buyer’s
 Deliveries

 	
  

 	
 28

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE XI

 	
  

 	
 COSTS

 	
  

 	
 29

 
	
  

 	
 11.1

 	
  

 	
 Seller’s
 Costs

 	
  

 	
 29

 
	
  

 	
 11.2

 	
  

 	
 Buyer’s
 Costs

 	
  

 	
 29

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE XII

 	
  

 	
 ADJUSTMENTS

 	
  

 	
 30

 
	
  

 	
 12.1

 	
  

 	
 Adjustments

 	
  

 	
 30

 
	
  

 	
 12.2

 	
  

 	
 Reconciliation
 and Final Payment

 	
  

 	
 31

 
	
  

 	
 12.3

 	
  

 	
 Employees

 	
  

 	
 31

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE XIII

 	
  

 	
 CASUALTY AND
 CONDEMNATION

 	
  

 	
 32

 
	
  

 	
 13.1

 	
  

 	
 Risk of
 Loss; Notice

 	
  

 	
 32

 
	
  

 	
 13.2

 	
  

 	
 Buyer’s
 Termination Right

 	
  

 	
 32

 
	
  

 	
 13.3

 	
  

 	
 Procedure
 for Closing

 	
  

 	
 32

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE XIV

 	
  

 	
 DEFAULT
 REMEDIES

 	
  

 	
 33

 
	
  

 	
 14.1

 	
  

 	
 Buyer
 Default

 	
  

 	
 33

 
	
  

 	
 14.2

 	
  

 	
 Seller
 Default

 	
  

 	
 33

 
	
  

 	
 14.3

 	
  

 	
 Attorney’s
 Fees

 	
  

 	
 33

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE XV

 	
  

 	
 NOTICES

 	
  

 	
 33

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE XVI

 	
  

 	
 MISCELLANEOUS

 	
  

 	
 34

 
	
  

 	
 16.1

 	
  

 	
 Performance

 	
  

 	
 34

 
	
  

 	
 16.2

 	
  

 	
 Binding
 Effect; Assignment

 	
  

 	
 34

 
	
  

 	
 16.3

 	
  

 	
 Entire
 Agreement

 	
  

 	
 35

 
	
  

 	
 16.4

 	
  

 	
 Governing
 Law

 	
  

 	
 35

 
	
  

 	
 16.5

 	
  

 	
 Captions

 	
  

 	
 35

 
	
  

 	
 16.6

 	
  

 	
 Confidentiality

 	
  

 	
 35

 
	
  

 	
 16.7

 	
  

 	
 Closing Documents

 	
  

 	
 35

 
	
  

 	
 16.8

 	
  

 	
 Counterparts

 	
  

 	
 36

 
	
  

 	
 16.9

 	
  

 	
 Severability

 	
  

 	
 36

 

ii

TABLE OF CONTENTS
(Continued)

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 Page No.

 
	
  

 	
  

 	
  

 	
  

 	
  

 	

 

 
	
  

 
	
  

 	
 16.10

 	
  

 	
 Interpretation

 	
  

 	
 36

 
	
  

 	
 16.11

 	
  

 	
 Time

 	
  

 	
 36

 
	
  

 	
 16.12

 	
  

 	
 Further Acts

 	
  

 	
 36

 
	
  

 	
 16.13

 	
  

 	
 Joint and
 Several Obligations

 	
  

 	
 36

 
	
  

 	
 16.14

 	
  

 	
 Exchange

 	
  

 	
 36

 
	
  

 	
 16.15

 	
  

 	
 Effective
 Date

 	
  

 	
 37

 
	
  

 	
 16.16

 	
  

 	
 No Third
 Party Rights; No Recording

 	
  

 	
 37

 
	
  

 	
 16.17

 	
  

 	
 Waiver of
 Trial by Jury

 	
  

 	
 37

 
	
  

 	
 16.18

 	
  

 	
 Survival

 	
  

 	
 37

 

SCHEDULES:

EXHIBITS:

	
  

 	
  

 
	
 Exhibit A

 	
 Legal
 Description

 
	
 Exhibit B

 	
 List of
 FF&E

 
	
 Exhibit C

 	
 List of
 Hotel Contracts

 
	
 Exhibit D

 	
 Consents and
 Approvals

 
	
 Exhibit E

 	
 Environmental
 Reports

 
	
 Exhibit F

 	
 Claims or
 Litigation Pending

 
	
 Exhibit G

 	
 Escrow
 Agreement

 
	
 Exhibit I

 	
 Post-Closing
 Agreement

 

iii

PURCHASE CONTRACT

          This
PURCHASE CONTRACT (this “Contract”)
is made and entered into as of May 27, 2011 (“Effective Date”), by and between VHRMR ROUND ROCK, LTD., a
Texas limited partnership (“Seller”),
with a principal office at 10370 Richmond Avenue, Suite 150, Houston,
Texas 77042, and APPLE TEN HOSPITALITY OWNERSHIP, INC., a Virginia corporation,
with its principal office at 814 East Main Street, Richmond, Virginia
23219 (“Buyer”).

RECITALS

          A. Seller
is the fee simple owner of that certain 115-room hotel property commonly known
as the Homewood Suites Austin/Round Rock, located at 2201 South Mays, Round
Rock, Texas 78664 (the “Hotel”)
identified on Exhibit A attached hereto and incorporated by
reference.

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

AGREEMENT:

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

ARTICLE I

DEFINED TERMS

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

          “Additional
Deposit” shall mean $150,000.

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

          “Appurtenances”
shall mean all rights, titles, and interests of a 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.

          “Assumption
Costs” shall have the meaning set forth in Section 4.4.

          “Assumption
Documents” shall have the meaning set forth in Section 10.3(g).

          “Brand”
shall mean Homewood Suites, 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 state where the Hotel is located.

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

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

          “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.

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

          “Deposits”
shall mean (i) with respect to the Leases, to the extent assignable, all
prepaid rents and deposits, refundable security deposits and rental deposits,
(ii) 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 (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 2.6(a).

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

          “Escrow
Agent” shall have the meaning set forth in Section 2.6(a).

          “Escrow
Agreement” shall have the meaning set forth in Section 2.6(b).

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

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

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

2

          “Existing
Manager” shall mean Vista Host, Inc.

          “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 Hilton Hotels Corp. or its affiliate.

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

          “Improvements”
shall mean all buildings, structures, fixtures, parking areas and other
improvements to the Land, and all related facilities.

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

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

          “Initial
Deposit” shall have the meaning set forth in Section 2.6(a).

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

          “Leases”
shall mean all leases, franchises, licenses, occupancy agreements, “trade-out”
agreements, advance bookings, convention reservations, or other agreements
demising space in, providing for the use or occupancy of, or otherwise
similarly affecting or relating to the use or occupancy of, the Improvements or
Land, together with all amendments, modifications, renewals 

3

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.

          “Liquor
Licenses” shall have the meaning set forth in Section 8.10.

          “Manager”
shall mean Vista Host, Inc.

          “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
Guarantor” shall have the meaning set forth in Section 4.4.

          “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.

          “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 Leases. There shall be
excluded from Property all cash owned by Seller (other than in the Hotel Banks
described below), accounts receivables, personal property that belongs to
guests, and incidental personal property owned by Manager. Any personal
property to be conveyed pursuant to this Contract is subject to depletions,
replacements and additions in the ordinary course of Seller’s business, subject
to the terms and provisions of this Contract.

4

          “Purchase
Price” shall have the meaning set forth in Section 2.3.

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

          “Records”
shall mean with respect to the Hotel, all 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 current 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 (the “Plans and Specifications”) for the Hotel.
Notwithstanding the foregoing, Records shall not be deemed to include
(i) any correspondence between Seller, its constituent partners and their
respective Affiliates concerning this Contract, marketing the Hotel for sale or
matters that would ordinarily fall within the attorney/client privilege,
(ii) the Existing Management Agreement, (iii) any matter not within
the actual possession or control of Seller, (iv) if more than three (3)
years old or they predate Seller’s ownership of the Hotel, budgets, tenant
data, guest history and other matters relating to the operation of the Hotel,
and (v) any other book or record that would not typically be furnished to
a buyer under a contract similar to this Contract. 

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

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

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

          “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 

5

promotional materials, china, glasses, silver/flatware, towels, linen
and bedding (all of which shall be 2-par level for all suites or rooms in the
Hotel), guest cleaning, paper and other supplies, upholstery material, carpets,
rugs, furniture, engineers’ supplies, paint and painters’ supplies, employee
uniforms, and all cleaning and maintenance supplies, including those used in
connection with the swimming pools, indoor and/or outdoor sports facilities,
health clubs, spas, fitness centers, restaurants, business centers, meeting
rooms and other common areas and recreational areas.

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

          “Third
Party Consents” shall have the meaning set forth in Section 8.3.

          “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.

          “To Seller’s
Knowledge” or similar language shall mean and apply to the actual,
conscious knowledge of the “Named
Representative” (defined below) of Seller after due inquiry to
Manager’s on-site general manager and regional director of operations, it being
understood that (i) such persons, in many instances, were not involved in
the day-to-day operations of the Hotel and may not have been fully involved in
the acquisition, development or construction of the Hotel, and (ii) such
persons are not charged with knowledge of all of the facts and/or omissions of
predecessors owning the Hotel or knowledge of all of the acts and/or omissions
of Seller’s agents, and shall not apply or be construed to apply to information
that may generally or incidentally be in the possession of Seller or Manager,
but which is not actually known to the Named Representative. The Named
Representative of Seller is Michael V. Harrell.

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

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

6

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

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

ARTICLE II

PURCHASE AND SALE; PURCHASE PRICE; PAYMENT;

EARNEST MONEY DEPOSIT

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

          2.2
Intentionally Deleted.

          2.3 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 Fifteen Million Five Hundred Thousand and No/100
Dollars ($15,500,000.00) (the “Purchase
Price”).

          2.4 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; provided, however, any value affidavits
required to be filed in connection with recording of the Deed (as defined
below) shall contain Buyer’s allocation.

          2.5 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, at the Closing of the Property. At the
Closing, the Earnest Money Deposit, together with interest earned thereon, if
any, shall, at Buyer’s election, be returned to Buyer or shall be paid over to
Seller by Escrow Agent to be applied to the portion of the Purchase Price on
behalf of Buyer, and the Escrow Funds shall be deposited into an escrow account
pursuant to the Post-Closing Agreement as contemplated by Section 8.9.

7

          2.6
Earnest Money Deposit. 

	
  

 	
  

 
	
  

 	
           (a) Upon
 the full execution and delivery of this Contract, Buyer shall deposit the sum
 of One Hundred Fifty Thousand and No/100 Dollars ($150,000.00) in cash,
 certified bank check or by wire transfer of immediately available funds (the
 “Initial Deposit”) with
 the Title Company, as escrow agent (“Escrow
 Agent”), which sum shall be held by Escrow Agent as earnest
 money. If, pursuant to the provisions of Section 3.1 of this Contract,
 Buyer elects to terminate this Contract at any time prior to the expiration
 of the Review Period, then the Escrow Agent shall return the Initial Earnest
 Money Deposit to Buyer promptly upon written notice to that effect from
 Buyer. If Buyer does not elect to terminate this Contract on or before the
 expiration of the Review Period, Buyer shall, within three (3) Business Days
 after the expiration of the Review Period deposit the Additional Deposit with
 the Escrow Agent. The Initial Deposit and the Additional Deposit, and all
 interest accrued thereon, shall hereinafter be referred to as the “Earnest Money Deposit.”

 
	
  

 	
  

 
	
  

 	
           (b) The
 Earnest Money Deposit shall be held by Escrow Agent subject to the terms and
 conditions of an Escrow Agreement dated as of the date of this Contract
 entered into by Seller, Buyer and Escrow Agent (the “Escrow Agreement”) in the form
 attached hereto as Exhibit G. 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 two (2) Business Days following the
date of this Contract, Seller, at Seller’s sole cost and expense, will deliver
to Buyer for Buyer’s review, to the extent not previously delivered to Buyer,
and to the extent available and in Seller’s possession or under its control,
true, correct and complete copies of the following, together with all
amendments, modifications, renewals or extensions thereof:

	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
           (b)
 Income and expense statements and budgets for the Hotel, for the current year
 to date and each of the prior fiscal years since construction of the Hotel
 commenced (the “Financial Statements”),
 and Seller shall provide to Buyer copies of all income and expense statements
 generated by Seller or any third party that relate to the operations of the
 Hotel and that contain information not included in the financial statements,
 if any, provided to Buyer by the Existing Manager, provided that Seller also
 agrees to provide to Buyer’s auditors and representatives all financial and
 other information necessary or

 

8

	
  

 	
  

 
	
  

 	
 appropriate for preparation of audited financial statements for Buyer
 and/or its Affiliates as provided in Section 8.6, below;

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
           (d)
 Existing 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, subject to any third party licensing or other limitations as to the
 use of other parties to utilize any of such documents and information;

 
	
  

 	
  

 
	
  

 	
           (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 from governmental authorities since January 1, 2007 in
 connection with the Hotel and all other notices received from governmental
 authorities received at any time that, to Seller’s Knowledge, relate to any
 noncompliance or violation of law that, to Seller’s Knowledge, has not been
 corrected.

 

          Seller
shall, upon not less than two (2) Business Days advance notice from 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 or at the corporate offices of Manager, 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
applicable Hotel and the plans and specifications for development of the Hotel.
At any time during the Review Period, Buyer may, in its sole and absolute
discretion, elect not to proceed with the purchase of the Property for any
reason whatsoever by giving written notice thereof to Seller, in which event:
(i) the Earnest Money Deposit shall be promptly returned by Escrow Agent
to Buyer together with all accrued interest, if any, (ii) this Contract
shall be terminated automatically, (iii) all materials supplied by Seller
to Buyer shall be returned promptly to Seller, and (iv) both parties will
be relieved of all other rights, obligations and liabilities hereunder, except
for the parties’ obligations pursuant to Sections 3.3, 3.4, 4.4 and 16.6
and Article VI below.

          3.2 Due
Diligence Examination. At any time during the Review Period, and thereafter
through Closing of the Property, Buyer and/or its representatives and agents
shall have the right to enter upon the Property at all reasonable times and
upon reasonable advance notice 

9

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

          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. The provisions of this Section 3.3 shall survive
any termination of this Contract.

          3.4 Buyer’s
Inspections. Buyer agrees to indemnify, defend and hold Seller, Seller’s
Affiliates and Existing Manager harmless from and against any and all claims,
liens, demands, liabilities, losses, damages, costs and expenses (including
reasonable attorneys’ fees) resulting from Buyer’s Due Diligence Examination,
whether performed directly by Buyer or any of its agents. Buyer further waives
and releases all claims and causes of action it may have against Seller and
Seller’s Affiliates and Existing Manager for injuries or damages to person or
property sustained by Buyer or its agents arising, directly or indirectly, from
their entry onto the Property. Prior to entering onto the Land, Buyer shall
carry at its own expense at least $1,000,000.00 of commercial general liability
insurance (including coverage for contractual liability) listing Seller and
Manager each as an additional insured. No invasive testing, sampling or
drilling shall occur without the prior written consent of Seller, such consent
not to be unreasonably withheld. In the event Buyer requests and Seller
consents to such invasive testing, sampling or drilling, Buyer shall also
furnish Seller with evidence that the party completing such testing, sampling
or drilling has at least $1,000,000.00 of commercial general liability
insurance (including coverage for contractual liability) listing Seller and
Existing Manager each as an additional insured from an insurance company and in
a form reasonably satisfactory to Seller. The party performing such testing
shall also furnish Seller with a policy of insurance for pollution liability
with limits of not less than $1,000,000.00 combined single limit, written on a
“claims made” basis, and including coverage for asbestos liability,
environmental site investigations, and cutting and drilling. Evidence of the
required insurance from Buyer and its agents shall be furnished to Seller
before any entry onto the Property or the performing of any invasive testing,
drilling or sampling, as the case may be, and shall be in a form reasonably
satisfactory to Seller. The provisions of this Section 3.4 shall survive
Closing or any termination of this Contract.

          3.5 Seller
Exhibits. Buyer shall have until the end of the Review Period to review and
approve the information on Exhibits B, C, D, E and F. In the event Buyer
does not approve any such Exhibit or the information contained therein, Buyer
shall be entitled to terminate this Contract by notice to Seller and the
Earnest Money Deposit shall be returned to Buyer with all 

10

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, 3.4, 4.4 and 16.6, and Article VI below.

ARTICLE IV

SURVEY AND TITLE APPROVAL

          4.1 Survey.
Seller has delivered to Buyer true, correct and complete copies of the most
recent surveys of the Real Property. In the event that an update of the survey
or a new survey (such updated or new surveys being referred to as the “Survey”) are desired by Buyer, then
Buyer shall be responsible for all costs related thereto. Promptly after
receipt by Buyer, Buyer shall deliver the new or updated Survey of the Real
Property to Seller.

          4.2
Title. Seller has delivered to Buyer its existing title insurance policy
for its Real Property. Buyer’s obligations under this Contract are conditioned
upon Buyer being able to obtain for the Property (i) a Commitment for
Title Insurance (the “Title Commitment”)
issued by Chicago Title Company, Attn: Debby Moore, 5501 LBJ Freeway, Ste.
200, Dallas, Texas 75240 (the “Title
Company”), for the most recent standard form of owner’s policy
of title insurance in the state in which the Real Property is located, covering
the Real Property, setting forth the current status of the title to the Real
Property, according to the Title Company, showing all liens, claims,
encumbrances, easements, rights of way, encroachments, reservations,
restrictions and any other matters of record affecting the Real Property,
according to the Title Company, 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, Fairway and such other endorsements as may be required by Buyer
(collectively, the “Title Policy”);
and (ii) true, complete, legible and, where applicable, recorded copies of
all documents and instruments (the “Exception
Documents”) referred to or identified in the Title Commitment,
including, but not limited to, all deeds, lien instruments, leases, plats,
surveys, reservations, restrictions, and easements affecting the Real Property.
By no later than ten (10) days after the Effective Date, Buyer shall obtain a
Title Commitment and best available copies of all of the Exception Documents.
Buyer shall request the Title Company to provide Seller with a copy of the Title
Commitment issued by the Title Company and best available copies of the
Exception Documents at the same time they are delivered to Buyer.

          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 by no later than thirty (30) days after the
Effective Date (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) days after its
receipt of notice from Buyer, and if Seller commits in writing to attempt to
cure any such item, then Seller shall be given until the Closing Date to cure
any such defect. In the event Seller shall fail to cure a defect which Seller
has committed in writing to cure prior to or at Closing, or if a new title
defect arises after the date of 

11

Buyer’s Title
Commitment or Survey, as applicable, but prior to Closing, then Buyer may
elect, in Buyer’s sole and absolute discretion: (i) to waive such
objection and proceed to Closing, or (ii) to terminate this Contract and
receive a return of the Earnest Money Deposit, and any interest thereon. If a lien
or other defect in title is caused by the acts or omissions of Buyer, then
Buyer’s sole remedy shall be to waive such objection and proceed to Closing,
without reduction in the Purchase Price. Except as otherwise expressly provided
in this Section 4.3, any uncured objections as of the end of the Review
Period shall be deemed Permitted Exceptions, unless Seller unconditionally
agrees to cure same prior to Closing. 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, any mechanics’ or materialmen’s liens or any claims
or potential claims therefor covering the Property (including equipment or
other personal property leases or other financing) or any portion thereof
arising prior to Closing (“Seller Liens”),
each of which shall be paid in full by Seller and released at Closing.

ARTICLE V

MANAGEMENT AGREEMENT AND FRANCHISE AGREEMENT

          Contemporaneously
with Closing, Seller shall terminate the Existing Management Agreement and the
Existing Franchise Agreement, and Seller shall be solely responsible for all
claims and liabilities arising thereunder on, prior to or following the Closing
Date. As a condition to Buyer’s and Seller’s obligation to close, Buyer shall
enter into the New Management Agreement and the New Franchise Agreement,
effective as of the Closing Date, containing terms and conditions acceptable to
Buyer and Manager and agreed to prior to the Effective Date, and, in the case
of the New Franchise Agreement, containing a term of not less than ten (10)
years. Seller shall be responsible for paying all costs related to the
termination of the Existing Management Agreement. Seller shall use best efforts
to promptly provide all information required by the Franchisor in connection
with the New Franchise Agreement, and Seller and Buyer shall diligently pursue
obtaining each the same. Buyer shall upon written request from Seller from time
to time update Seller as to the status of the issuance of the New Franchise
Agreement. Buyer shall be responsible for the payment of any and all
application fees imposed by the Franchisor in connection with the assignment,
transfer and/or issuance of the new Franchise Agreement; provided, however,
Seller shall be responsible for any accrued royalty payments, Key Money
repayments and any other costs, fees and charges under the Existing Franchise
Agreement.

ARTICLE VI

BROKERS

          Seller and
Buyer each represents and warrants to the other that, except for Hodges Ward
Elliott (or its affiliate) for whose fees and commissions Seller shall be
solely responsible, it has not engaged any broker, finder or other party in
connection with the transaction contemplated by this Contract. Buyer and Seller
each agree to save and hold the other harmless from any and all losses, damages,
liabilities, costs and expenses (including, without limitation, attorneys’
fees) 

12

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. The provisions of this Article VI shall survive Closing or
any termination of this Contract.

ARTICLE VII

REPRESENTATIONS AND WARRANTIES

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

	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
           (c) Bankruptcy.
 Seller is not 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 hereto as Exhibit C. 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, other than cash, accounts receivables or other items specifically
 excluded herefrom. Unless reflected specifically on the Title Commitment,
 there are no leases, license agreements, leasing agent’s agreements,
 equipment leases, building service agreements, maintenance contracts,
 suppliers contracts, warranty contracts, or other similar 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 or to be delivered to
 Buyer pursuant to Section 3.1. The Service Contracts, Leases, Warranties
 and FF&E Leases disclosed on 

 

13

	
  

 	
  

 
	
  

 	
 Exhibit C or to be delivered to Buyer
 pursuant to Section 3.1 are in full force and effect, and, to Seller’s
 Knowledge, no default has occurred and is continuing thereunder and no
 circumstances exist which, with the giving of notice, the lapse of time or
 both, would constitute such a default. No party has any right or option to
 acquire the Hotel or any portion thereof, other than Buyer.

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
           (f) Environmental.
 With respect to environmental matters, to Seller’s Knowledge (i) other
 than in compliance with Environmental Requirements, there has been no Release
 or threat of Release of Hazardous Materials in, on, under, to, from or in the
 area of the Real Property, except as disclosed in the reports and documents
 set forth on Exhibit E attached hereto and incorporated herein by
 reference, (ii) no portion of the Property is being used for the
 treatment, storage, disposal or other handling of Hazardous Materials or
 machinery containing Hazardous Materials other than standard amounts of
 cleaning supplies and chemicals for the swimming pool, and other materials
 commonly used at hotels similar to the Hotel, all of which are stored on the
 Property in strict accordance with applicable Environmental Requirements and
 do not exceed limits permitted under applicable laws, including without
 limitation Environmental Requirements, (iii) no underground storage
 tanks are currently located on or in the Real Property or any portion
 thereof, (iv) no environmental investigation, administrative order,
 notification, consent order, litigation, claim, judgment or settlement with
 respect to the Property or any portion thereof is pending or threatened,
 (v) there is not currently any mold, fungal or other microbial growth in
 or on the Real Property, and (vi) except as disclosed on Exhibit E
 or in any environmental reports delivered to Buyer pursuant to
 Section 3.1, there are no reports or other documentation regarding the
 environmental condition of the Real Property in the possession of Seller or
 Seller’s Affiliates, consultants, contractors or agents. As used in this
 Contract: “Hazardous Materials”
 means (1) ”hazardous wastes” as defined by the Resource Conservation and
 Recovery 

 

14

	
  

 	
  

 
	
  

 	
 Act of 1976, as amended from time to time (“RCRA”),
 (2) ”hazardous substances” as defined by the Comprehensive Environmental
 Response, Compensation and Liability Act of 1980 (42 U.S.C. 9601 et seq.),
 as amended by the Superfund Amendment and Reauthorization Act of 1986 and as
 otherwise amended from time to time (“CERCLA”);
 (3) ”toxic substances” as defined by the Toxic Substances Control Act,
 as amended from time to time (“TSCA”),
 (4) ”hazardous materials” as defined by the Hazardous Materials
 Transportation Act, as amended from time to time (“HMTA”), (5) asbestos, oil or
 other petroleum products, radioactive materials, urea formaldehyde foam
 insulation, radon gas and transformers or other equipment that contains
 dielectric fluid containing polychlorinated biphenyls and (6) any
 substance whose presence is detrimental or hazardous to health or the
 environment, including, without limitation, microbial or fungal matter or
 mold, or is otherwise regulated by federal, state and local environmental
 laws (including, without limitation, RCRA, CERCLA, TSCA, HMTA), rules,
 regulations and orders, regulating, relating to or imposing liability or
 standards of conduct concerning any Hazardous Materials or environmental,
 health or safety compliance (collectively, “Environmental Requirements”). As used in this Contract:
 “Release” means spilling,
 leaking, pumping, pouring, emitting, emptying, discharging, injecting,
 escaping, leaching, dumping or disposing.

 
	
  

 	
  

 
	
  

 	
           (g) Title
 and Liens. To Seller’s Knowledge, 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 associated financing
 statements), 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.
 To Seller’s Knowledge, all appropriate utilities, including sanitary and
 storm sewers, water, gas, telephone, cable and electricity, are, to Seller’s
 Knowledge, currently sufficient and available to service the Hotel and all
 installation, connection or “tap-on”, usage and similar fees have been paid.

 
	
  

 	
  

 
	
  

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

 

15

	
  

 	
  

 
	
  

 	
 Knowledge 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 all prior (but no earlier than
 three (3) years or before Seller owned the Hotel, whichever is later) and
 current (i) Financial Statements for the Hotel, (ii) operating statements
 prepared by the Existing Manager for the Hotel, and (iii) monthly financial
 statements prepared by the Existing Manager for the Hotel. Each of such
 statements is, to Seller’s Knowledge, complete and accurate in all material
 respects and, except in the case of budgets prepared in advance of the
 applicable operating period to which such budgets relate, fairly presents the
 results of operations of the Hotel for the respective periods represented
 thereby. Seller has relied upon the Financial Statements in connection with
 its ownership and operation of the Hotel, and there are no independent audits
 or financial statements prepared by third parties relating to the operation
 of the Hotel other than the Financial Statements prepared by or on behalf of
 the Existing Manager, all of which have been provided to Buyer for the
 appropriate time periods.

 
	
  

 	
  

 
	
  

 	
            (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 at all times when owned by Seller been
 operated by Existing Manager in accordance with all applicable laws, rules,
 regulations, ordinances and codes.

 
	
  

 	
  

 
	
  

 	
            (m) Existing
 Management and Franchise Agreements. Seller has furnished to Buyer a true
 and complete copy of the Existing Franchise Agreement, which constitutes the
 entire agreement of the parties with respect to the subject matter thereof
 and which has not been amended or supplemented in any respect. There are no
 other 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 substantial accordance with, all requirements of such Existing
 Management Agreement and the Existing Franchise Agreement and all other
 requirements of the Existing Manager and the Franchisor, including all “brand
 standard” requirements of the Existing Manager and the Franchisor. 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. To Seller’s Knowledge:
 no default has occurred and is continuing under the Existing Management
 Agreement or the Existing Franchise Agreement, and no 

 

16

	
  

 	
  

 
	
  

 	
 circumstances exist which, with the giving of notice, the lapse of
 time or both, would constitute such a default.

 
	
  

 	
  

 
	
  

 	
           (n) Named
 Representative. The Named Representative is that individual within
 Seller’s organization that has the most detailed knowledge of the Property
 and the operation of the Hotel.

 
	
  

 	
  

 
	
           7.2 Buyer’s
 Representations and Warranties. Buyer represents and warrants to Seller
 as follows:

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
           (c) Buyer’s
 Conditions. Buyer shall use good faith efforts, or such greater standard
 imposed elsewhere in this Contract, to satisfy the conditions set forth in
 Section 9.1 hereof.

 
	
  

 	
  

 
	
           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 two (2) years and shall not be deemed to merge into or be waived by
 the Deed or any other closing documents.

 
	
  

 	
  

 
	
           7.4 Changed
 Conditions. If after the Effective Date and on or prior to Closing,
 Seller obtains Knowledge or receives actual notice of any fact or
 circumstance which causes any of Seller’s representations and warranties made
 in this Contract to be inaccurate or untrue in any material respect, Seller
 shall promptly give written notice thereof to Buyer specifying in reasonable
 detail the fact or circumstance in question and whether Seller elects to have
 a seven (7) day period to cure such matter (with the Closing Date being
 extended, with Buyer’s prior written consent, and as necessary so Seller will
 have a full seven (7) days to cure). If Seller does not indicate in Seller’s
 notice that it has elected to cure such matter of if Seller elects to but
 fails to cure such matter within the seven (7) day period following receipt
 by Buyer of Seller’s initial notice, then within ten (10) business days after
 either of such event, Buyer shall either terminate this Contract and
 immediately receive the Earnest Money Deposit or waive any objection to such
 matter and proceed to Closing without adjustment in the Purchase Price.
 Buyer’s failure to give notice of its decision shall be deemed its election
 to waive the objection (and the applicable 

 

17

	
  

 	
  

 
	
 representations and warranties shall be deemed performed to include
 exception for the new information). Except for Seller’s failure to perform
 its obligations in the first sentence of this grammatical paragraph, Buyer
 shall have no other remedy if the representation and warranty was correct
 when initially given, provided, that, in all events, Buyer shall have the
 right to terminate this Contract upon discovery of such matter as provided in
 this Contract. If after the Effective Date and on or prior to the Closing
 Date, Buyer obtains knowledge of any fact or circumstance which causes any of
 Seller’s representations and warranties made in this Contract to be
 inaccurate or untrue in any material respect, Buyer shall give Seller notice
 thereof. Seller shall have a seven (7) day period from the date of Buyer’s
 notice to cure such matter (with the Closing Date being extended (with
 Buyer’s prior written consent) and as necessary so Seller will have a full
 seven [7] days to cure). If Seller fails to cure such matter and provide
 Buyer with notice thereof within the seven (7) day period following Buyer’s
 initial notice, then within ten (10) days after the expiration of Seller’s
 seven (7) day cure period, Buyer shall either terminate this Contract and
 immediately receive the Earnest Money or waive any objection to such matter
 and proceed to Closing without reduction of the Purchase Price (and the
 applicable representation and warranty shall be deemed reformed to include
 exception for the new information). Buyer’s failure to give notice within ten
 (10) business days of its decision after Seller’s cure period shall be deemed
 its election to waive the objection. Except for Seller’s failure to perform
 its obligations in the first sentence of this grammatical paragraph, Buyer shall
 have no other remedy if the representation and warranty was correct when
 initially given, provided, that, in all events, Buyer shall have the right to
 terminate this Contract upon discovery of such matter as provided in this
 Contract.

 
	
  

 	
  

 
	
           7.5 AS-IS.
 BUYER ACKNOWLEDGES THAT THE CONVEYANCE OF THE PROPERTY IS MADE “AS-IS” AND
 “WHERE-IS,” WITHOUT ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED
 (EXCEPT AS TO TITLE AS LIMITED BY SPECIAL WARRANTY OR ANY EXPRESS
 REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS CONTRACT), INCLUDING,
 WITHOUT LIMITATION, IMPLIED WARRANTIES OF FITNESS FOR ANY PARTICULAR PURPOSE
 OR MERCHANTABILITY OR ANY OTHER WARRANTIES CONTAINED IN OR CREATED BY THE
 UNIFORM COMMERCIAL CODE OR OTHERWISE.

 
	
  

 	
  

 
	
           BUYER
 ACKNOWLEDGES THAT, EXCEPT AS EXPRESSLY PROVIDED IN THIS CONTRACT, NEITHER
 SELLER NOR ANY OF ITS AGENTS HAVE MADE ANY REPRESENTATIONS, WARRANTIES,
 COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER, WHETHER EXPRESS
 OR IMPLIED, ORAL OR WRITTEN, CONCERNING (i) THE VALUE, NATURE, QUALITY OR
 CONDITION OF THE PROPERTY, (ii) THE SUITABILITY OF THE PROPERTY FOR ANY USES
 WHICH MAY BE CONDUCTED THEREON, (iii) THE COMPLIANCE OF THE PROPERTY WITH ANY
 LAWS, RULES, ORDINANCES OR REGULATIONS OF ANY APPLICABLE GOVERNMENTAL
 AUTHORITY, (iv) THE HABITABILITY, MERCHANTABILITY, MARKETABILITY,
 PROFITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE PROPERTY, OR (v) ANY
 OTHER MATTER WITH RESPECT TO THE PROPERTY, AND THAT NEITHER SELLER NOR ANY OF
 ITS AGENTS HAVE MADE (EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY
 SET FORTH IN THIS CONTRACT), ANY REPRESENTATIONS OR WARRANTIES REGARDING
 COMPLIANCE OF THE PROPERTY WITH ANY ENVIRONMENTAL REQUIREMENTS. 

 

18

	
  

 	
  

 
	
 BUYER SHALL RELY SOLELY ON ITS OWN INVESTIGATION OF THE PROPERTY AND
 NOT ON ANY INFORMATION PROVIDED OR TO BE PROVIDED BY SELLER OR ITS AGENTS,
 EXCEPT AS EXPRESSLY SET FORTH IN THIS CONTRACT. EXCEPT AS EXPRESSLY SET FORTH
 IN THIS CONTRACT, SELLER SHALL NOT BE LIABLE IN ANY MANNER BY ANY VERBAL OR
 WRITTEN STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE PROPERTY
 OR THE OPERATION THEREOF, FURNISHED BY ANY PARTY PURPORTING TO ACT ON BEHALF
 OF SELLER. The provisions of this Section 7.5 shall survive Closing or any
 termination of this Contract.

 
	
  

 	
  

 
	
 ARTICLE VIII

 
	
 ADDITIONAL COVENANTS

 
	
  

 	
  

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

 
	
  

 	
  

 
	
           8.2 Operations.
 From and after the date hereof through the Closing on the Property, Seller
 shall 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 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 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 for the Hotel, 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, 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 good operating condition; keep and maintain the Hotel in a
 good state of repair and condition, reasonable and ordinary wear and tear
 excepted; and not commit waste of any portion of the Hotel;

 

19

	
  

 	
  

 
	
  

 	
           (d)
 Maintain the levels and quality of the Personal Property generally at the
 levels and quality existing on the date hereof and keep merchandise, supplies
 and inventory adequately stocked, consistent with good business practice, as
 if the sale of the 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 after gaining Knowledge of any litigation, arbitration,
 or administrative hearing before any court or governmental agency concerning
 or affecting the Hotel which is instituted or threatened after the date of
 this Contract or if any representation or warranty contained in this Contract
 shall become false;

 
	
  

 	
  

 
	
  

 	
           (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 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, unless authorized by this Contract
 or which will not be binding on Buyer or the Property following Closing; 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.

 
	
  

 	
  

 
	
           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 the Existing Manager
 prior to Closing; provided, however, that in the case of any of the foregoing
 entered into by the Existing Manager on its own behalf, only to the extent
 Seller has Knowledge thereof or a copy of which is obtainable from the
 Existing Manager. 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, 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, in either of which events the Review Period shall not be
 extended as otherwise provided above.

 
	
  

 	
  

 
	
           8.3 Third
 Party Consents. Prior to the Closing Date, unless otherwise addressed in
 this Contract, Seller shall, at its expense, (i) obtain any and all third
 party consents and approvals 

 

20

	
  

 	
  

 
	
 applicable to Seller (x) required in order to transfer the Hotel to
 Buyer, or (y) which, if not obtained, would materially adversely affect the
 operation of the Hotel, including, without limitation, all consents and
 approvals referred to on Exhibit D and (ii) use best efforts to obtain
 all other third party consents and approvals applicable to Seller (all of
 such consents and approvals in (i) and (ii) above being referred to
 collectively as, the “Third Party Consents”).

 
	
  

 	
  

 
	
           8.4 Employees.
 Upon reasonable prior notice to Seller by Buyer, Buyer and its employees,
 representatives and agents shall have the right to communicate with Seller’s
 staff, and, subject to the approval of the 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 before Closing. 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
 any Property or the Existing Management Agreements.

 
	
  

 	
  

 
	
           8.5 Estoppel
 Certificates. Seller shall if requested in writing by Buyer within ten
 (10) days after the Effective Date, use good faith efforts to obtain from (i)
 each tenant under any Lease affecting the Hotel (but not from current or
 prospective occupants of hotel rooms and suites within the Hotel) and (ii)
 each lessor under any FF&E Lease for the Hotel identified by Buyer as a
 material FF&E Lease, the estoppel certificates substantially in the forms
 provided in good faith by Buyer to Seller, and, if so obtained, deliver to
 Buyer not less than five (5) days before the Closing.

 
	
  

 	
  

 
	
           8.6 Access
 to Financial Information. Buyer’s representatives shall have access to,
 and Seller and its Affiliates shall cooperate with Buyer and furnish upon
 request, all financial and other information relating to the 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 each 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 letters. Nothing in this Section 8.6 shall materially increase
 Seller’s or its Affiliates’ liability under this Contract. The provisions of
 this Section shall survive Closing for a period of one (1) year.

 
	
  

 	
  

 
	
           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.

 

21

	
  

 	
  

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

 
	
  

 	
  

 
	
  

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

 

	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (i) the
 breach in any material respect 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 Hotel or the ownership, use
 or operation of its Property after Closing; and

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
           (c) Indemnification
 Procedure for Claims of Third Parties. Indemnification, with respect to
 claims resulting from the assertion of liability by those not parties to this
 

 

22

	
  

 	
  

 	
  

 
	
  

 	
 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. 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 

 

23

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Indemnifying Party shall pay all legal and other expenses reasonably
 incurred by the Indemnified Party in conducting such defense.

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
           8.9 Escrow
 Funds. To provide for the timely payment of any post-Closing claims by
 Buyer against Seller hereunder, at Closing, Seller shall deposit an amount
 equal to Two Hundred Thousand and No/100 Dollars ($200,000.00) (the “Escrow
 Funds”) which shall be withheld from the Purchase Price
 payable to Seller and shall be deposited for a period of one (1) year in an
 escrow account with the Title Company pursuant to an escrow agreement (the “Post-Closing
 Agreement”) in the form attached hereto as Exhibit I,
 which escrow and Post-Closing Agreement shall be established and entered into
 at Closing. If no claims have been asserted by Buyer against Seller, or all
 such claims have been satisfied, within such 1-year period, the Escrow Funds
 deposited by Seller shall be released to Seller, except as provided in the
 Post-Closing Agreement.

 
	
  

 	
  

 	
  

 
	
           8.10 Liquor
 Licenses. To the extent that the Hotel currently sells alcoholic
 beverages pursuant to a liquor license and/or alcoholic beverage license
 (collectively, the “Liquor Licenses”), Seller shall
 cooperate (or cause Manager to so cooperate), at no expense to Seller or
 Manager, in the processing of any and all necessary forms, applications and
 other documents with the appropriate liquor and alcoholic beverage
 authorities prior to Closing so that new Liquor Licenses may be issued to
 Buyer either upon completion of Closing or shortly thereafter. Issuance of a
 Liquor License to Buyer shall not be a condition precedent to its obligation
 to close pursuant to this Contract. To the extent not prohibited by
 applicable law, Seller and Buyer shall execute an interim beverage agreement
 in a form reasonably acceptable to Seller and Buyer whereby Buyer or Manager,
 as the case may be, shall be able to operate under the Liquor Licenses after
 Closing if necessary or required in order to continue uninterrupted alcohol
 sales from and after Closing. In such case, Buyer shall defend, indemnify and
 hold Seller harmless 

 

24

	
  

 	
  

 	
  

 
	
 from and against any and all claims, liabilities costs and expenses
 arising out of post-Closing alcohol sales and service, and provide
 appropriate insurance.

 
	
  

 	
  

 	
  

 
	
 ARTICLE IX

 
	
 CONDITIONS FOR CLOSING

 
	
  

 	
  

 	
  

 
	
           9.1 Buyer’s
 Conditions for Closing. Unless otherwise waived in writing, and without
 prejudice to Buyer’s right to cancel this Contract during the Review Period,
 the duties and obligations of Buyer to proceed to Closing under the terms and
 provisions of this Contract are and shall be expressly subject to strict
 compliance with, and satisfaction or waiver of, each of the conditions and contingencies
 set forth in this Section 9.1, each of which shall be deemed material to this
 Contract. In the event of the failure of any of the conditions set forth in
 this Section 9.1 or of any other condition to Buyer’s obligations provided
 for in this Contract, which condition is not waived in writing by Buyer, and
 provided that Buyer is not in default, 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 (or
 paid to Seller if Buyer is in default under this Contract) and each of the
 parties shall be relieved from further liability to the other with respect to
 this Contract, except as otherwise expressly provided herein, if the failure
 is attributable to a breach or default by Seller or a matter that survives
 termination.

 
	
  

 	
  

 	
  

 
	
  

 	
           (a) All
 of Seller’s representations and warranties contained in or made pursuant to
 this Contract shall be true and correct in all material respects as if made
 again on the Closing Date, subject to Section 7.4.

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
           (d) Third
 Party Consents in form and substance 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 no less
 adverse to Buyer than what was last offered to Buyer during the Review
 Period.

 

25

	
  

 	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
           (d) The
 Existing Management Agreement and the Existing Franchise Agreement shall have
 been terminated. In the case of the Existing Franchise Agreement, both Seller
 and any of its principals who guaranteed the Existing Franchise Agreement
 shall have been released of all unaccrued obligations thereunder.

 
	
  

 	
  

 	
  

 
	
  

 	
           (e) 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.

 
	
  

 	
  

 	
  

 
	
 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 before September 21, 2011
 and not later than October 31, 2011, provided that all conditions to Closing
 by Buyer and Seller hereunder have been satisfied or waived. 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. Subject to the next sentence, if
 the Closing Date has not occurred within forty-five (45) days after the
 expiration of the Review Period because the conditions to Closing by Buyer or
 Seller have not been satisfied, either Seller or Buyer may thereafter
 terminate this Contract upon notice given to the other party, each party
 shall be released of any further obligations under this Contract (except 

 

26

	
  

 	
  

 	
  

 
	
 those that expressly survive a termination), unless a party is in
 default under this Contract at the time, in which event the other party may
 exercise the rights and remedies provided in Article XIV.

 
	
  

 	
  

 	
  

 
	
           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 Closing pursuant to Section
 16.7):

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
           (b) Bills
 of Sale. Bills of sale to Buyer and/or its designated Lessee, conveying
 title to the tangible Personal Property (other than the alcoholic beverage
 inventories, if any, which will be disposed of in accordance with applicable
 law and not transferred to Buyer).

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
           (d) General
 Assignments. To the extent assignable, assignments of all of Seller’s
 right, title and interest in and to all FF&E Leases, Service Contracts
 and Leases identified on Exhibit C hereto (the “Hotel Contracts”).
 The assignment shall also be a general assignment and shall provide for the
 assignment to the extent assignable, 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.
 It shall also provide for Seller’s indemnification of Buyer for pre-Closing
 obligations under the Hotel Contracts and likewise, Buyer’s indemnification
 of Seller for post-Closing obligations under the Hotel Contracts. The Liquor
 Licenses and the Existing Franchise Agreement shall not be assigned.

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
           (g) Possession;
 Estoppel Certificates. Possession of the Property, subject only to rights
 of guests in possession and tenants pursuant to written leases included in
 the 

 

27

	
  

 	
  

 	
  

 
	
  

 	
 Leases, and, the estoppel certificates from tenants under the Leases
 and the lessors under the FF&E Leases, to the extent obtained by Seller
 pursuant to Section 8.5 and not previously delivered 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 owned by Seller and regularly used in connection with the
 Hotel’s operations.

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
           (a) Purchase
 Price. The balance of the Purchase Price, adjusted for the adjustments
 provided for in Section 12.1, below, and less any sums to be deducted
 therefrom as provided in Section 2.5.

 
	
  

 	
  

 	
  

 
	
  

 	
           (b) New
 Management Agreement and New Franchise Agreement. The New Management
 Agreement and the New Franchise Agreement and all documents required in
 connection therewith.

 
	
  

 	
  

 	
  

 
	
  

 	
           (c) General
 Assignments. An executed counterpart of the General Assignment referred
 to in Section 10.2(d) above, whereby Buyer assumes all of the obligations of
 Seller under the FF&E Leases, Service Contracts and Leases arising on and
 after the Closing Date.

 

28

	
  

 	
  

 	
  

 
	
  

 	
           (d) 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.

 
	
  

 	
  

 	
  

 
	
  

 	
           (e) 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, to the extent provided
 herein, and Seller will no longer have any rights, titles, or interests in
 and to the Hotel, to the extent provided herein.

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
 ARTICLE XI

 
	
 COSTS

 
	
  

 	
  

 	
  

 
	
  

 	
 All Closing costs shall be paid as set forth below:

 
	
  

 	
  

 	
  

 
	
           11.1 Seller’s
 Costs. In connection with the sale of the Property contemplated under
 this Contract, Seller shall be responsible for all transfer and recordation
 taxes, including, without limitation, all transfer, mansion, sales, use or
 bulk transfer taxes or like taxes on or in connection with the transfer of
 the Real Property (including the Deed), in each case except as otherwise
 provided in Section 12, and all accrued taxes of Seller prior to Closing and
 income, sales and use taxes and other such taxes of Seller attributable to
 the sale of the Property to Buyer. Seller shall be responsible for all costs
 related to the termination of the Existing Management Agreement as provided
 in Article V as well as costs and expenses of its attorneys, accountants,
 appraisers and other professionals, consultants and representatives. Seller
 shall also be responsible for payment of all prepayment penalties and other
 amounts payable in connection with the pay-off of any liens and/or
 indebtedness encumbering the Property, including any FF&E or equipment
 leases or other financing.

 
	
  

 	
  

 	
  

 
	
           11.2 Buyer’s
 Costs. In connection with the purchase of the Property contemplated under
 this Contract, Buyer shall be responsible for the costs and expenses of its
 attorneys, accountants and other professionals, consultants and
 representatives. Buyer shall also be responsible for the costs and expenses
 in connection with the preparation of any environmental report, any update to
 the survey and the costs and expenses of preparation of the title insurance
 commitment and the issuance of the title insurance policy contemplated by
 Article IV and the per page recording charges and clerk’s fee for the Deed
 (if applicable). Buyer shall also be responsible for the costs of applying
 for and obtaining the New Franchise Agreement. Buyer shall further be
 responsible for all costs associated with the financing of its purchase of
 the Property.

 

29

	
  

 	
  

 	
  

 
	
 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 and shall be collected through
 and/or adjusted in accordance with the terms of the Existing Management
 Agreement. Except as otherwise expressly provided herein, all apportionments
 and adjustments shall be made on an accrual basis in accordance with
 generally accepted accounting principles. Buyer and Seller shall request that
 the Manager 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 Leases and
 Hotel Contracts applicable to the Property, and any deposits, prepayments and
 receipts thereunder, shall be prorated between Buyer and Seller as of the
 Cutoff Time.

 
	
  

 	
  

 	
  

 
	
  

 	
           (d) House
 Banks. All cash, checks and other funds including till money and house
 banks held at the Hotel as of the Cutoff Time (collectively, the “House
 Banks”) shall be turned over to Buyer and Seller shall receive
 a credit at Closing in the amount of the cash, checks and other funds so
 delivered.

 
	
  

 	
  

 	
  

 
	
  

 	
           (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.

 

30

	
  

 	
  

 	
  

 
	
  

 	
           (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 paid by
 Seller prior to delinquency in the ordinary course of business.

 
	
  

 	
  

 	
  

 
	
  

 	
           (j) Restaurants,
 Bars, Machines, Other Income. All monies received in connection with any
 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 become employees of the Manager. Seller shall
 not give notice under any applicable federal or state plant closing or
 similar act, including, if applicable, the Worker Adjustment and Retraining
 Notification Provisions of 29 U.S.C., Section 2102, the parties having agreed
 that a mass layoff, as that term is defined in 29 U.S.C., 2101(a)(3), will
 not have occurred. Any liability for payment of all wages, salaries and
 benefits, including, without limitation, accrued vacation pay, sick leave,
 bonuses, pension benefits, COBRA rights, and other benefits accrued or earned
 by and due to employees at the Hotel through the Cutoff Time, together with
 F.I.C.A., unemployment and other taxes and benefits due with respect to such 

 

31

	
  

 	
  

 	
  

 
	
 employees for such period, shall be charged to Seller, in accordance
 with the Existing Management Agreement, for the purposes of the adjustments
 to be made as of the Cutoff Time. All liability for wages, salaries and
 benefits of the employees accruing in respect of and attributable to the
 period from and after Closing shall be charged to Buyer, in accordance with
 the New Management Agreement. To the extent applicable, all such allocations
 and charges shall be adjusted in accordance with the provisions of the
 Existing Management Agreement. Any accrued vacation credits for employees as
 of the Closing Date shall be coordinated by Manager.

 
	
  

 	
  

 	
  

 
	
 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 a Hotel (or access thereto)
 as could, in Buyer’s reasonable judgment, render use of the remainder
 impractical or unfeasible for the uses herein contemplated, and, in the
 context of casualty loss or damage, “substantial” shall mean a loss or damage
 in excess of Two Hundred Fifty Thousand and No/100 Dollars ($250,000.00) in
 value.

 
	
  

 	
  

 	
  

 
	
           13.3 Procedure
 for Closing. If Buyer shall not timely elect to terminate this Contract
 under Section 13.2 above, or if the loss, damage or condemnation is not
 substantial, Seller agrees to pay to Buyer at the Closing all insurance
 proceeds or condemnation awards which Seller has received as a result of the
 same, plus an amount equal to the insurance deductible, and assign to Buyer
 all insurance proceeds and condemnation awards payable as a result of the
 same, in which event the Closing shall occur without Seller replacing or
 repairing such damage. In the case of damage or casualty, at Buyer’s election
 and to the extent practical, Seller shall repair and restore the Property to
 its condition immediately prior to such damage or casualty and shall assign
 to Buyer all excess insurance proceeds. Seller shall have right to place any
 damaged portion of the Improvements in a safe condition and receive a credit
 on the deductible or insurance for the reasonable amounts so spent. In the
 event the law of the state where the Hotel is located affords 

 

32

	
  

 	
  

 	
  

 
	
 other rights and remedies for a casualty or condemnation beyond those
 expressly set forth herein, Buyer expressly waives any such other rights and
 remedies.

 
	
  

 	
  

 	
  

 
	
 ARTICLE XIV

 
	
 DEFAULT REMEDIES

 
	
  

 	
  

 	
  

 
	
           14.1 Buyer
 Default. If Buyer defaults under this Contract after the Review Period,
 and such default continues for five (5) 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 the Additional Deposit that Buyer is obligated hereunder to pay,
 but has failed to do so), 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.
 Notwithstanding the foregoing provision, (i) Buyer shall not be released from
 any obligation relating to insurance or indemnities or which otherwise
 expressly survives a termination of this Contract, (ii) no notice shall be
 required for Buyer’s failure to timely make the Additional Deposit in
 accordance with the provisions hereof, and (iii) no notice need be given for
 a default at Closing.

 
	
  

 	
  

 	
  

 
	
           14.2 Seller
 Default. If Seller defaults under this Contract, and such default
 continues for ten (10) days following written notice from Buyer, Buyer may
 elect, as Buyer’s sole and exclusive remedy, either (i) to terminate this
 Contract by written notice to Seller delivered to that Seller at any time
 prior to the completion of such cure, in which event the Earnest Money
 Deposit, including any interest thereon, shall be returned to Buyer, Seller
 shall reimburse Buyer for its actual out-of-pocket expenses incurred in
 connection with this Contract not to exceed $100,000.00 (with Buyer providing
 Seller with reasonable evidence documenting same), 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
 the defaulting Seller for specific performance. Any action for specific
 performance must be filed by no later than one hundred eighty (180) days
 after the Effective Date or such remedy shall no longer be available. No
 notice shall be given for a default at Closing.

 
	
  

 	
  

 	
  

 
	
           14.3 Attorney’s
 Fees. Anything to the contrary herein notwithstanding, if it shall be
 necessary for either the Buyer or Seller to file suit to enforce its rights
 pursuant to this Contract because of the default of the other party, then the
 prevailing party shall reimburse the non-prevailing party on demand for the
 prevailing party’s reasonable attorneys’ fees, costs and expenses. This
 Section 14.3 shall survive the Closing and any termination of this Contract,
 and shall supersede any limitations on remedies in this Article XIV.

 
	
  

 	
  

 	
  

 
	
 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 

 

33

	
  

 
	
 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 Ten Hospitality Ownership, Inc.

 
	
  

 	
 814 E. Main Street

 
	
  

 	
 Richmond, Virginia 23219

 
	
  

 	
 Attention: Sam Reynolds

 
	
  

 	
 Fax No.:
 (804) 344-8129

 
	
  

 	
  

 
	
 with a copy to:

 	
 Apple Ten Hospitality Ownership, Inc.

 
	
  

 	
 814 E. Main Street

 
	
  

 	
 Richmond, Virginia 23219

 
	
  

 	
 Attention: Legal Dept.

 
	
  

 	
 Fax No.:
 (804) 344-8129

 
	
  

 	
  

 
	
 If to Seller:

 	
 c/o Vista Host, Inc.

 
	
  

 	
 10370 Richmond Avenue, Suite 150

 
	
  

 	
 Houston, Texas 77042

 
	
  

 	
 Attn: Michael Harrell/Kathie Long

 
	
  

 	
 Fax No.:
 (713) 267-5820

 
	
  

 	
  

 
	
 with a copy to:

 	
 Winstead PC

 
	
  

 	
 1100 JPMorgan Chase Tower

 
	
  

 	
 600 Travis Street

 
	
  

 	
 Houston, Texas 77002

 
	
  

 	
 Attn: Barry E. Putterman

 
	
  

 	
 Fax No.:
 (713) 650-2400

 

          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
 assigns. Except for a “Permitted Transfer” (defined below),
 Buyer shall not have the right to assign its interest in this Contract
 without obtaining the prior written consent of Seller. As used herein,
 “Permitted 

 

34

	
  

 	
  

 	
  

 
	
 Transfer” shall refer to an assignment by Buyer of all of its rights
 under this Contract (a) for which notice thereof (including a fully executed
 copy of the assignment and assumption document) is contemporaneously given to
 Seller and at least five (5) Business Days prior to Closing, (b) to an assignee
 which expressly assumes in writing all obligations of Buyer hereunder
 (without releasing the original named Buyer) and is an entity which itself
 or, if a limited partnership, whose general partner, has a director, officer
 or manager in common with Buyer, or if a company, has an officer or manager
 in common with Buyer, or regardless of entity type, is a wholly-owned
 subsidiary of Apple REIT Companies, and (c) under circumstances that do not
 prevent or frustrate any conditions to Closing. Any assignment shall not
 affect the Earnest Money Deposit provisions in this Contract, and Buyer shall
 indemnify Seller for any claims made by any assignee which are related to the
 Earnest Money Deposit The preceding sentence shall survive Closing. Following
 Closing pursuant to a Permitted Transfer, the original named Buyer shall be
 released automatically of any unaccrued obligations and liabilities under
 this Contract.

 
	
  

 	
  

 	
  

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

 
	
  

 	
  

 	
  

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

 
	
  

 	
  

 	
  

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

 
	
  

 	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
           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.

 

35

	
  

 	
  

 	
  

 
	
           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 Time.
 Where performance, the giving of notice, or other act is required to occur
 within “X” days from and after or following a date certain, and the “Xth” day
 occurs on a day other than a business day, then the date for performance,
 notice or other act shall automatically be extended until the next business
 day.

 
	
  

 	
  

 	
  

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

 
	
  

 	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
           16.14 Exchange.
 Seller (including its beneficial owners for purposes of this Section) may
 consummate the sale of the Property as part of a like-kind exchange (the
 “Exchange”) pursuant to Section 1031 of the Internal Revenue Code of 1986, as
 amended, provided that (a) all costs, fees and expenses attendant to the
 Exchange shall be the sole responsibility of Seller; (b) the Closing shall
 not be delayed or adversely affected by reason of the Exchange nor shall the
 consummation or accomplishment of the Exchange be a condition precedent or
 condition subsequent to Seller’s obligations and conditions under this
 contact; and (c) Buyer shall not be required to acquire or hold title to any
 land other than the Property for purposes of consummating the Exchange.
 Seller agrees to defend, indemnify and hold Buyer harmless from any
 liability, damage or cost, including, without limitation, reasonable
 attorney’s fees, that may result from Buyer’s acquiescence to the Exchange.
 Buyer shall not, by reason of the Exchange, (i) have its rights under this
 Contract, including those which survive Closing, adversely affected or
 diminished in any manner, or (ii) be responsible for compliance with or be
 deemed to have warranted to Seller that the Exchange in fact complies with
 Section 1031 of the Internal Revenue 

 

36

	
  

 	
  

 	
  

 
	
 Code of 1986, as amended. Buyer consents to Seller assigning this
 Contract to its Exchange facilitator, and waives all claims against such
 Exchange facilitator arising out of its participation in the Exchange,
 provided that Seller remains liable to Buyer to fulfill all obligations of
 Seller on this Contract after such assignment.

 
	
  

 	
  

 	
  

 
	
           16.15 Effective
 Date. For purposes of calculation of all time periods within which Seller
 or Buyer must act or respond as herein described, all phrases such as the
 “Effective Date of this Contract” or the “date of execution of this Contract”
 or any other like phrases referring to the date of this Contract, shall mean
 and refer to the date when both Seller and Buyer have executed this Contract
 and evidence thereof has been delivered to the first party to sign this
 Contract. At such time, the Escrow Agent is authorized and directed to
 complete the Effective Date in the first sentence of Page 1 hereof.

 
	
  

 	
  

 	
  

 
	
           16.16 No
 Third Party Rights; No Recording. Nothing in this Contract, express or
 implied, is intended to confer upon any person, other than the parties hereto
 and their respective successors and assigns, any rights or remedies under or
 by reason of this Contract, with the exception of Manager. Neither Seller nor
 Buyer shall record this Contract or a memorandum of this Contract in the
 public records of the county in which the Real Property is located, and any
 violation of this section shall be a default under this Contract.

 
	
  

 	
  

 	
  

 
	
           16.17 Waiver
 of Trial by Jury. To the extent they may legally do so, Seller and Buyer
 hereby expressly waive any right to trial by jury of any claim, demand,
 action, or proceeding arising under or with respect to this Contract, or in
 any way connected thereto, in each case whether now existing or hereafter
 arising, and irrespective of whether sounding in contract, tort or otherwise.
 Seller and Buyer further agree, to the extent they may legally do so, that
 any such claim, demand, action or proceeding shall be decided by a court trial
 without a jury and that either party hereto may file an original counterpart
 of this Contract or a copy of this section with any court as written evidence
 to the consent of the other party or parties hereto to waiver of its right to
 trial by jury.

 
	
  

 	
  

 	
  

 
	
           16.18 Survival.
 Except as otherwise expressly provided in this Contract, no representation,
 warranty, covenant, agreement or other obligation in this Contract shall
 survive the Closing.

 

[Signatures Begin on Following Page]

37

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

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 SELLER:

 
	
  

 	
  

 	
  

 
	
  

 	
 VHRMR ROUND
 ROCK, LTD., a Texas limited partnership

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 	
 VHRR, Inc.,
 a Texas corporation,
its general partner

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 By: 

 	
 /s/ Kathie
 Long

 
	
  

 	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
 Name: Kathie
 Long

 
	
  

 	
  

 	
  

 	
 Title: Vice
 President

 

	
  

 	
  

 	
  

 
	
  

 	
 BUYER:

 
	
  

 	
  

 
	
  

 	
 APPLE TEN
 HOSPITALITY OWNERSHIP, INC.,
a Virginia corporation

 
	
  

 	
  

 
	
  

 	
 By: 

 	
 /s/ David
 Buckley

 
	
  

 	
  

 	

 

 
	
  

 	
 Name: David
 Buckley

 
	
  

 	
 Title: Vice President

 

38

EXHIBIT “A”

LEGAL DESCRIPTION OF LAND

Lot 1, Block
“B”, DAYSTAR SUBDIVISION, SECTION TWO FINAL PLAT, a subdivision in Williamson
County, Texas, according to the map or plat thereof, recorded in Cabinet GG,
Slide(s) 3-4 of the Plat Records of Williamson County, Texas.

Exhibit A – Page 1

EXHIBIT B

LIST OF FF&E

[TO BE
FURNISHED BY SELLER BY NO LATER THAN FIVE (5) DAYS PRIOR TO THE END OF THE
REVIEW PERIOD]

Exhibit B – Page 1

EXHIBIT C

	
  

 	
  

 	
  

 
	
 A Closer
 Look

 	
  

 	
 Mystery Shop
 Service

 
	
 AT&T
 WIFI Services/Hilton Stay Connected

 	
  

 	
 HSIA WiFi
 Services

 
	
 Automatic
 Data Processing

 	
  

 	
 Payroll
 Processing Fees

 
	
 Best Vendors
 Company

 	
  

 	
 Vending
 Machine Commissions

 
	
 Buy
 Efficient, LLC

 	
  

 	
 Purchasing
 Service

 
	
 Certegy

 	
  

 	
 Check
 Approval Service

 
	
 DMX Music

 	
  

 	
 Lobby Music
 & Messaging

 
	
 eMax

 	
  

 	
 Website
 Monthly Fee

 
	
 EscapeWire
 Solutions/Direct TV

 	
  

 	
 Free to
 Guest Direct TV

 
	
 Hilton High
 Speed Internet

 	
  

 	
 OnQ
 Equipment Maintenance

 
	
 Hilton
 Worldwide Inc

 	
  

 	
 Scout Hotel
 Group Lead/Opportunity

 
	
 Hilton High
 Speed Internet Circuit

 	
  

 	
 Network
 Services for HSIC Program

 
	
 Hilton
 Systems Solutions, LLC

 	
  

 	
 Load
 Balancer Program

 
	
 Hilton Total
 Solution Program

 	
  

 	
 Hilton
 Network and Circuit Agmt

 
	
 Hotel
 Systems Pro

 	
  

 	
 Sales
 Automation Software

 
	
 LET Group
 Inc.

 	
  

 	
 Internet
 Advertising

 
	
 Lincoln
 Waste

 	
  

 	
 Waste
 Removal

 
	
 LUSA Austin,
 LLC

 	
  

 	
 Landscape
 Maintenance

 
	
 R & L
 Electrical Contractors

 	
  

 	
 Fire Alarm
 Monitoring

 
	
 Resource
 Technology

 	
  

 	
 Telecommunications

 
	
 Steritech
 Group Inc.

 	
  

 	
 Pest Control

 
	
 Steritech
 Group Inc.

 	
  

 	
 Bed Bug
 Control

 
	
 Thomas &
 Thorngren

 	
  

 	
 Unemployment
 Mgt. Service

 
	
 Thomson Inc.

 	
  

 	
 Pro:Idiom
 Licensee Transcoder Lic

 
	
 Time Warner
 Cable

 	
  

 	
 HSIA Service

 
	
 TravelClick,
 Inc. (Split Austin/Round Rock)

 	
  

 	
 Hotelligence

 
	
 Unifocus

 	
  

 	
 Software
 Support

 
	
 Uniguest

 	
  

 	
 Business
 Center Comp System

 

Exhibit C – Page 1

EXHIBIT D

CONSENTS AND APPROVALS

          A.
Consents Under Hotel Contracts

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

          B.
Consents Under Other Contracts

To be provided
by Seller

          C.
Governmental Approvals and Consents

To be provided
by Seller

Exhibit D – Page 1

EXHIBIT E

ENVIRONMENTAL REPORTS

Phase I Environmental Site Assessment Updated, dated September 16,
1999, Project No. 2075-01, prepared by Rosengarten, Smith & Associates,
Inc.

Exhibit E – Page 1

EXHIBIT F

CLAIMS OR LITIGATION PENDING

NONE

Exhibit F – Page 1

EXHIBIT G

ESCROW AGREEMENT

          THIS ESCROW
AGREEMENT (this “Agreement”) made the ___ day of
_______, 2008 by and among _________________________, a _______________
_________________ (“Seller”), APPLE TEN HOSPITALITY
OWNERSHIP, INC. a Virginia corporation, or its assigns (“Buyer”), and CHICAGO
TITLE COMPANY (“Escrow Agent”).

R E C I T A L S

          WHEREAS,
pursuant to the provisions of Section 2.6 of that certain Purchase
Contract dated _______ ___, 2008 (the “Contract”) between Seller and Buyer
(the “Parties”),
the Parties have requested Escrow Agent to hold in escrow in accordance with
the provisions, upon the terms, and subject to the conditions, of this
Agreement, the Earnest Money Deposit as defined in the Contract (the “Deposit”);
and

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

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

          1. Seller
and Buyer hereby appoint Escrow Agent to serve as escrow agent hereunder, and
the Escrow Agent agrees to act as escrow agent hereunder in accordance with the
provisions, upon the terms and subject to the conditions of this Agreement. The
Escrow Agent hereby acknowledges receipt of the Deposit. Escrow Agent shall
invest the Deposit in accounts insured by the Federal Deposit Insurance
Corporation in a manner that will assure that in the aggregate all of the
Deposit is covered by such insurance.

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

	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 

Exhibit G – Page 1

	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 

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

	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 

Exhibit G – Page 2

	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 

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

	
  

 	
  

 
	
 (i)

 	
 If addressed
 to Seller, to:

 
	
  

 	
 _________________________

 
	
  

 	
 _________________________

 
	
  

 	
 _________________________

 
	
  

 	
 Attention:

 
	
  

 	
 Fax No.:
 (___) ___-____

 

Exhibit G – Page 3

	
  

 	
  

 
	
 (ii)

 	
 If addressed
 to Buyer, to:

 
	
  

 	
 Apple Ten
 Hospitality Ownership, Inc.

 
	
  

 	
 814 E. Main
 Street

 
	
  

 	
 Richmond,
 Virginia 23219

 
	
  

 	
 Attn: Sam
 Reynolds

 
	
  

 	
 Fax No.:
 (804) 344-8129

 
	
  

 	
  

 
	
  

 	
 with a copy
 to:

 
	
  

 	
  

 
	
  

 	
 Apple Ten
 Hospitality Ownership, Inc.

 
	
  

 	
 814 E. Main
 Street

 
	
  

 	
 Richmond,
 Virginia 23219

 
	
  

 	
 Attn: Legal
 Dept.

 
	
  

 	
 Fax No.:
 (804) 727-6349

 

	
  

 	
  

 	
  

 
	
 If addressed
 to Escrow Agent, to:

 
	
  

 
	
  

 	
 Chicago
 Title Company

 
	
  

 	
 5501 LBJ
 Freeway, Suite 200

 
	
  

 	
 Dallas,
 Texas 75240

 
	
  

 	
 Attn: Debby
 Moore

 
	
  

 	
 Fax No.:
 (214) 987-6780

 

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

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

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

Exhibit G – Page 4

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

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 SELLER:

 
	
  

 	
  

 
	
  

 	

 

 
	
  

 	
  

 
	
  

 	
 By:

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
  

 
	
  

 	
 BUYER:

 
	
  

 	
  

 
	
  

 	
 APPLE TEN
 HOSPITALITY OWNERSHIP, INC.

 
	
  

 	
  

 
	
  

 	
 By: 

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
 Title:

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
  

 
	
  

 	
 ESCROW AGENT:

 
	
  

 	
  

 
	
  

 	
 CHICAGO
 TITLE COMPANY

 
	
  

 	
  

 
	
  

 	
 By:

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
 Title:

 	
  

 
	
  

 	
  

 	

 

 

Exhibit G – Page 5

EXHIBIT I

POST-CLOSING AGREEMENT

          THIS
POST-CLOSING AGREEMENT (this “Agreement”) is executed
effective as of ________________________ (the “Effective Date”), by and among
_______________________________ (“Seller”),
_____________________________________ (“Buyer”), and CHICAGO TITLE COMPANY (“Escrow Agent”). 

R E C I T A L S

          WHEREAS,
pursuant to the provisions of Section 8.9 of that certain Purchase Contract
dated as of _____________________ between Seller and Buyer (as amended, the
“Contract”), as assigned to Buyer pursuant to that certain Assignment of
Contract dated of even date herewith, Buyer and Seller have requested that
Escrow Agent hold in escrow the Escrow Funds (as defined in the Contract) in
the amount of $200,000 in accordance with the provisions, upon the terms and
subject to the conditions of this Agreement; and 

          WHEREAS,
the Escrow Funds are being delivered to Escrow Agent in accordance with the
terms of the Contract and this Agreement. 

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

          1. Defined Terms. Capitalized
terms used but not otherwise defined herein shall have the meanings ascribed to
them in the Contract. 

          2. Appointment of Escrow Agent.
Seller and Buyer hereby appoint Escrow Agent to serve as escrow agent
hereunder, and Escrow Agent agrees to act as escrow agent hereunder in
accordance with the provisions, upon the terms and subject to the conditions of
this Agreement. The Escrow Agent hereby acknowledges receipt of the Escrow
Funds. Escrow Agent shall invest the Escrow Funds as directed by Seller,
provided such investments are reasonably acceptable to Buyer, and interest
earned thereon shall constitute part of the Escrow Funds. If the Escrow Funds
are invested in a bank or savings association, Escrow Agent shall take
appropriate precautions to assure that they are entitled to the maximum
insurance provided by the Federal Deposit Insurance Corporation. 

          3. Escrow Funds. Subject to
the rights and obligations to transfer, deliver or otherwise dispose of the
Escrow Funds, Escrow Agent shall keep the Escrow Funds in Escrow Agent’s
possession pursuant to this Agreement for a period of one (1) year from and
after the Closing Date (the “Escrow Term”) to provide for timely payment of
claims made after Closing by Buyer for indemnification, reimbursement, damages
or other amounts payable by Seller or for the performance of any of Seller’s
obligations (each, a “Claim”) pursuant to the terms of the Contract or this
Agreement, including without limitation all indemnification obligations of
Seller to Buyer pursuant to Section 8.8 of the Contract and all other
post-closing obligations of Seller under the Contract, all of which obligations
shall survive Closing under the Contract and delivery of the Deed. 

Exhibit I – Page 1

          4. Claims. Upon the
determination by Buyer of the amount for which a Claim will be made, Buyer
shall send notice of such Claim (stating the amount claimed) to the Escrow
Agent and Seller. If Seller does not give written notice to the Escrow Agent
and Buyer of its intent to dispute the Claim or the amount claimed within seven
(7) Business Days of the date Seller receives, pursuant to Section 8 below,
Buyer’s notice of Claim, Escrow Agent shall immediately pay to Buyer from the
Escrow Funds the amount specified in Buyer’s notice. If Seller disputes the
Claim within the seven (7) Business Day period and Buyer and Seller are unable
to settle the dispute, Buyer and Seller shall petition a court of competent
jurisdiction for a resolution of the dispute. Seller and Buyer shall each pay
their respective costs incurred in any such court proceedings and shall bear
equally the reasonable expenses of the Escrow Agent in connection therewith. If
Buyer and Seller fail to bring such petition within thirty (30) days after the
notice of dispute of claim is received, Escrow Agent may, but is not required,
to bring such a petition. In any such action, all parties hereto agree to waive
any right to a trial by jury. After settlement or final determination of any
dispute relating to a Claim, the Escrow Agent shall immediately pay to Buyer
from the Escrow Funds the amount, if any, determined to be payable to Buyer.
Payment of any Escrow Funds to Buyer shall not discharge Seller’s obligations
under the Contract unless and until all of Buyer’s Claims are paid, discharged
and satisfied in full. Seller shall be and remain liable to Buyer for, and
shall pay to Buyer the full amount of, all such Claims notwithstanding that the
Escrow Funds may be insufficient to pay the same in full, and Seller shall
immediately pay to Buyer the amount of any deficiency to satisfy in full the
amount of each Claim. Unless otherwise provided herein, if (i) Buyer has not
sent any notice of a Claim during the Escrow Term or (ii) (x) all Claims of
Buyer have been fully paid, discharged and satisfied to Buyer’s satisfaction
during the Escrow Term and (y) a court of competent jurisdiction has resolved
any disputes brought before it by Buyer and Seller (or Escrow Agent on its own)
and all orders of such court have been complied with, the amount of Escrow
Funds remaining with Escrow Agent at the expiration of the Escrow Term,
together with any interest accrued thereon, shall (subject to the terms of this
Agreement) be promptly returned to Seller by Escrow Agent; provided, however,
the return of any Escrow Funds not shall terminate nor relieve Seller of its
unsatisfied post-Closing obligations, if any, to Buyer under the Contract. 

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

          6. Liabilities of Escrow Agent.

	
  

 	
  

 
	
  

 	
           A. Escrow Agent shall not be liable
 for any error of judgment, or any action taken or omitted to be taken
 hereunder, except in the case of Escrow Agent’s willful, bad faith misconduct
 or negligence. Escrow Agent shall be entitled to consult with counsel of its
 choosing and shall not be liable for any action suffered or omitted in
 accordance with the advice of such counsel.

 
	
  

 	
  

 
	
  

 	
           B. In addition to the indemnities
 provided below, Escrow Agent shall not be liable for, and each of the parties
 hereto jointly and severally hereby indemnify and agree 

 

Exhibit I – Page 2

	
  

 	
  

 
	
  

 	
 to save harmless and reimburse Escrow Agent from and against all
 loss, cost, liability, damage and expense, including outside counsel fees in
 connection with its acceptance of, or the performance of its duties and
 obligations under, this Agreement, including the costs and expenses of
 defending against any claim arising hereunder unless the same are caused by
 the willful, bad faith misconduct or negligence of Escrow Agent.

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
 7. Resignation or Termination of
 Escrow Agent.

 

	
  

 	
  

 
	
  

 	
           A. Escrow Agent and any successor
 escrow agent, as the case may be, may resign his or its duties and be
 discharged from all obligations hereunder at any time upon giving five (5)
 Business Days’ prior written notice to each of the parties hereto. The
 parties hereto will thereupon jointly designate a successor escrow agent hereunder
 within said five (5) Business Day period to whom the Escrow Funds shall be
 delivered. In default of such a joint designation of a successor escrow
 agent, Escrow Agent shall retain the Escrow Funds as custodian thereof until
 otherwise directed by the parties hereto, jointly, or until the Escrow Funds
 is released in accordance with clause 7(B) below, in each case, without
 liability or responsibility. 

 
	
  

 	
  

 
	
  

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

 

          8. 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 

Exhibit I – Page 3

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 addressed to Seller, to:

 	
  

 	
 Vista Host, Inc.

 
	
  

 	
  

 	
  

 	
 10370 Richmond Avenue, Suite 150

 
	
  

 	
  

 	
  

 	
 Houston, Texas 77042

 
	
  

 	
  

 	
  

 	
 Attn: Michael Harrell/Kathie Long

 
	
  

 	
  

 	
  

 	
 Fax No.: (713) 267-5820

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 With copies to:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Winstead PC

 
	
  

 	
  

 	
  

 	
 1100 JPMorgan Chase Tower

 
	
  

 	
  

 	
  

 	
 600 Travis Street

 
	
  

 	
  

 	
  

 	
 Houston, Texas 77002

 
	
  

 	
  

 	
  

 	
 Attn: Barry E. Putterman

 
	
  

 	
  

 	
  

 	
 Fax No.: (713) 650-2400

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 If addressed to Buyer, to:

 	
  

 	
 Apple Ten Hospitality Ownership, Inc.

 
	
  

 	
  

 	
  

 	
 814 East Main Street

 
	
  

 	
  

 	
  

 	
 Richmond, Virginia 23219

 
	
  

 	
  

 	
  

 	
 Attn: Justin Knight

 
	
  

 	
  

 	
  

 	
 Fax No.: (804) 344-8129

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 with a copy to:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Apple Ten Hospitality Ownership, Inc.

 
	
  

 	
  

 	
  

 	
 814 East Main Street

 
	
  

 	
  

 	
  

 	
 Richmond, Virginia 23219

 
	
  

 	
  

 	
  

 	
 Attn: Legal Dept.

 
	
  

 	
  

 	
  

 	
 Fax No.: (804) 727-6349

 
	
  

 
	
  

 	
 If addressed to Escrow Agent, to:

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Chicago Title Company

 
	
  

 	
  

 	
  

 	
 5501 LBJ Freeway, Suite 200

 
	
  

 	
  

 	
  

 	
 Dallas, Texas 75240

 
	
  

 	
  

 	
  

 	
 Attn: Debby Moore

 
	
  

 	
  

 	
  

 	
 Fax No.: (214) 987-6780

 

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

Exhibit I – Page 4

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

          10. Governing Law, Venue and
Jurisdiction. This Agreement shall be governed by the same law as governed
the Contract and venue for any action and jurisdiction shall be the same as
provided in the Contract. 

          11. Binding Effect; Assignment; Amendments; Survival. The covenants, conditions and agreements contained in
this Agreement shall bind and inure to the benefit of each of the parties
hereto and their respective successors and assigns. Seller shall not assign,
pledge or otherwise encumber its rights or obligations hereunder in whole or in
part without the prior written consent of Buyer, except to an entity controlled
by or under common control with Seller or its general partner. This Agreement
may only be amended by a written modification executed by Buyer and Seller.
This Agreement shall survive Closing of the sale of the Property and delivery
of the Deed and shall be in addition to, and not in limitation or in lieu of,
all other rights and remedies available to Buyer at law, in equity or by
contract, including the Contract, which rights and remedies Buyer shall be
entitled to exercise concurrently or in such order as Buyer may elect, in its
sole discretion. Seller acknowledges and agrees that Seller’s liability for
Claims shall survive Closing for the periods provided therein, that such
liability and Claims and Buyer’s rights and remedies with respect thereto are not necessarily
limited to the Escrow Term, the amount of the Escrow Funds or any other
provision of this Agreement and that Buyer’s rights hereunder shall not be
limited or otherwise affected by Buyer’s exercise of any of Buyer’s other
rights and remedies, including without limitation any of those available to
Buyer under the Contract. 

[Signatures on Next Page]

Exhibit I – Page 5

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

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 SELLER:

 
	
  

 	
  

 
	
  

 	
 BUYER:

 
	
  

 	
  

 
	
  

 	
 APPLE TEN HOSPITALITY OWNERSHIP, INC.

 
	
  

 	
  

 
	
  

 	
 By: 

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
 Title:

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
  

 
	
  

 	
 ESCROW AGENT:

 
	
  

 	
  

 
	
  

 	
 CHICAGO TITLE COMPANY

 
	
  

 	
  

 
	
  

 	
 By:

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
 Title:

 	
  

 
	
  

 	
  

 	

 

 

Exhibit I – Page 6Exhibit
 10.42

 
	
  

 	
  

 
	
  

 	
 Merrillville, IN
 (HGI)

 

PURCHASE
CONTRACT

between

ASCENT
HOSPITALITY, INC.(“SELLER”)

AND

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

Dated:
July 11, 2011

TABLE
OF CONTENTS

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 Page No.

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE I

 	
  

 	
 DEFINED
 TERMS

 	
  

 	
 1

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 1.1

 	
 Definitions

 	
  

 	
 1

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE II

 	
  

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

 	
  

 	
 6

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 2.1

 	
 Purchase and
 Sale

 	
  

 	
 6

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 2.2

 	
 Purchase
 Price

 	
  

 	
 6

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 2.3

 	
 Allocation

 	
  

 	
 7

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 2.4

 	
 Payment

 	
  

 	
 7

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 2.5

 	
 Earnest
 Money Deposit

 	
  

 	
 7

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE III

 	
  

 	
 REVIEW
 PERIOD

 	
  

 	
 7

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 3.1

 	
 Review
 Period

 	
  

 	
 7

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 3.2

 	
 Due
 Diligence Examination

 	
  

 	
 9

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 3.3

 	
 Restoration

 	
  

 	
 9

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 3.4

 	
 Seller
 Exhibits

 	
  

 	
 9

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE IV

 	
  

 	
 SURVEY AND TITLE
 APPROVAL

 	
  

 	
 9

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 4.1

 	
 Survey

 	
  

 	
 9

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 4.2

 	
 Title

 	
  

 	
 9

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 4.3

 	
 Survey or
 Title Objections

 	
  

 	
 10

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE V

 	
  

 	
 TERMINATION
 OF MANAGEMENT AGREEMENT

 	
  

 	
 10

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE VI

 	
  

 	
 BROKERS

 	
  

 	
 11

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE VII

 	
  

 	
 REPRESENTATIONS,
 WARRANTIES AND COVENANTS

 	
  

 	
 11

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 7.1

 	
 Seller’s
 Representations, Warranties and Covenants

 	
  

 	
 11

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 7.2

 	
 Buyer’s
 Representations, Warranties and Covenants

 	
  

 	
 15

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 7.3

 	
 Survival

 	
  

 	
 15

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE VIII

 	
  

 	
 ADDITIONAL
 COVENANTS

 	
  

 	
 16

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 8.1

 	
 Subsequent
 Developments

 	
  

 	
 16

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 8.2

 	
 Operations

 	
  

 	
 16

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 8.3

 	
 Third Party
 Consents

 	
  

 	
 17

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 8.4

 	
 Employees

 	
  

 	
 17

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 8.5

 	
 Estoppel
 Certificates

 	
  

 	
 18

 

i

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 8.6

 	
 Access to
 Financial Information

 	
  

 	
 18

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 8.7

 	
 Bulk Sales

 	
  

 	
 18

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 8.8

 	
 Indemnification

 	
  

 	
 18

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 8.9

 	
 Escrow Funds

 	
  

 	
 21

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE IX

 	
  

 	
 CONDITIONS
 FOR CLOSING

 	
  

 	
 21

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 9.1

 	
 Buyer’s
 Conditions for Closing

 	
  

 	
 21

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 9.2

 	
 Seller’s
 Conditions for Closing

 	
  

 	
 22

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE X

 	
  

 	
 CLOSING AND
 CONVEYANCE

 	
  

 	
 22

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 10.1

 	
 Closing

 	
  

 	
 22

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 10.2

 	
 Deliveries
 of Seller

 	
  

 	
 23

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 10.3

 	
 Buyer’s
 Deliveries

 	
  

 	
 24

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE XI

 	
  

 	
 COSTS

 	
  

 	
 25

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 11.1

 	
 Seller’s
 Costs

 	
  

 	
 25

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 11.2

 	
 Buyer’s
 Costs

 	
  

 	
 25

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE XII

 	
  

 	
 ADJUSTMENTS

 	
  

 	
 25

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 12.1

 	
 Adjustments

 	
  

 	
 25

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 12.2

 	
 Reconciliation
 and Final Payment

 	
  

 	
 27

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 12.3

 	
 Employees

 	
  

 	
 27

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE XIII

 	
  

 	
 CASUALTY AND
 CONDEMNATION

 	
  

 	
 27

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 13.1

 	
 Risk of
 Loss; Notice

 	
  

 	
 27

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 13.2

 	
 Buyer’s
 Termination Right

 	
  

 	
 28

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 13.3

 	
 Procedure
 for Closing

 	
  

 	
 28

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE XIV

 	
  

 	
 DEFAULT
 REMEDIES

 	
  

 	
 28

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 14.1

 	
 Buyer
 Default

 	
  

 	
 28

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 14.2

 	
 Seller
 Default

 	
  

 	
 29

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 14.3

 	
 Attorney’s
 Fees

 	
  

 	
 29

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE XV

 	
  

 	
 NOTICES

 	
  

 	
 29

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE XVI

 	
  

 	
 MISCELLANEOUS

 	
  

 	
 30

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 16.1

 	
 Performance

 	
  

 	
 30

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 16.2

 	
 Binding
 Effect; Assignment

 	
  

 	
 30

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 16.3

 	
 Entire
 Agreement

 	
  

 	
 30

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 16.4

 	
 Governing
 Law

 	
  

 	
 30

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 16.5

 	
 Captions

 	
  

 	
 30

 

ii

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 16.6

 	
 Confidentiality

 	
  

 	
 30

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 16.7

 	
 Closing
 Documents

 	
  

 	
 30

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 16.8

 	
 Counterparts

 	
  

 	
 30

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 16.9

 	
 Severability

 	
  

 	
 31

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 16.10

 	
 Interpretation

 	
  

 	
 31

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 16.11

 	
 (Intentionally
 Omitted)

 	
  

 	
 31

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 16.12

 	
 Further Acts

 	
  

 	
 31

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 16.13

 	
 Joint and
 Several Obligations

 	
  

 	
 31

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 SCHEDULES:

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Schedule 3.1

 	
  

 	
 Due
 Diligence List

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 EXHIBITS:

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Exhibit A

 	
  

 	
 Legal
 Description

 	
  

 	
  

 
	
 Exhibit B

 	
  

 	
 List of
 FF&E

 	
  

 	
  

 
	
 Exhibit C

 	
  

 	
 List of
 Hotel Contracts

 	
  

 	
  

 
	
 Exhibit D

 	
  

 	
 Consents and
 Approvals

 	
  

 	
  

 
	
 Exhibit E

 	
  

 	
 Environmental
 Reports

 	
  

 	
  

 
	
 Exhibit F

 	
  

 	
 Claims or
 Litigation Pending

 	
  

 	
  

 
	
 Exhibit G

 	
  

 	
 Escrow
 Agreement

 	
  

 	
  

 

iii

PURCHASE
CONTRACT

          This
PURCHASE CONTRACT (this “Contract”) is made and entered into as
of July 11, 2011, by and between ASCENT HOSPITALITY, INC a Indiana
Corporation(“Seller”) with a principal office at 3564 Hintocks Circle,
Carmel IN. 46032and APPLE TEN HOSPITALITY OWNERSHIP, INC., a Virginia
corporation, with its principal office at 814 East Main Street, Richmond,
Virginia 23219, or its affiliates or assigns (“Buyer”).

RECITALS

          A.
Seller is the fee simple owner of that certain hotel property commonly known as
the Hilton Garden Inn Merrillville, located at 7775 Mississippi St,
Merrillville, Indiana 46410, containing, among other things, 124 guestrooms
(the “Hotel”)
identified in on Exhibit A attached hereto and
incorporated by reference.

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

AGREEMENT:

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

ARTICLE I

DEFINED TERMS

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

          “Additional
Deposit” shall mean $100,000.

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

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

1

          
“Brand” shall mean Hilton Garden Inn, 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 state in which the Property is located.

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

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

          “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.

          “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).

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

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

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

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

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

2

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

          “Existing
Manager” shall meanSchulte Hospitality Group.

          “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 Hilton Garden Inn Franchise LLC.

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

          “Improvements”
shall mean all buildings, structures, fixtures, parking areas and other
improvements to the Land, and all related facilities.

          “Indemnification
Agreement” shall have the meaning set forth in Article XVII.

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

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

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

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

3

          “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 entity Buyer chooses to manage the Hotel from and after 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.

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

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

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

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

          “PIP”
shall mean a product improvement plan for any Hotel, as required by the
Existing 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 

4

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

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

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

          “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 (opened or unopened), office supplies and stationery, advertising and
promotional materials, china, glasses, silver/flatware, towels, linen and
bedding (all of which shall be 2-par level for all suites or rooms in the
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 

5

clubs, spas,
fitness centers, restaurants, business centers, meeting rooms and other common
areas and recreational areas.

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

          “Third
Party Consents” shall have the meaning set forth in Section 8.3.

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

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

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

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

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

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

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

ARTICLE II

PURCHASE AND SALE; PURCHASE PRICE; PAYMENT;

EARNEST MONEY DEPOSIT

          2.1
Purchase and Sale. Seller agrees to sell and convey to Buyer or its
Affiliates and/or assigns, and Buyer or its assigns agrees to purchase from
Seller, the Property, in consideration of the Purchase Price and upon the terms
and conditions hereof. All of the 

6

Property shall
be conveyed, assigned, and transferred to Buyer at Closing, free and clear of
all mortgages, liens, encumbrances, licenses, franchises (other than any hotel
franchises assumed by Buyer), concession agreements, security interests, prior
assignments or conveyances, conditions, restrictions, rights-of-way, easements,
encroachments, claims and other matters affecting title or possession, except
for the Permitted Exceptions.

          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 Fourteen Million Eight Hundred and
twenty five Thousand and No/100 Dollars ($14,825,000.00) (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, at the Closing of the
Property. At the Closing, the Earnest Money Deposit, together with interest
earned thereon, if any, shall, at Buyer’s election, be returned to Buyer or
shall be paid over to Seller by Escrow Agent to be applied to the portion of
the Purchase Price on behalf of Buyer, and the Escrow Funds shall be deposited
into an escrow account pursuant to the Post-Closing Agreement as contemplated
by Section 8.9. 

          2.5
Earnest Money Deposit.

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

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

7

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 sixty (60) 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 two (2) Business Days following the date of this Contract, Seller, at
Seller’s sole cost and expense, will deliver to Buyer (or make available at the
Hotel) for Buyer’s review, to the extent not previously delivered to Buyer,
true, correct and complete copies of the following, together with all
amendments, modifications, renewals or extensions thereof:

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

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

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

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

8

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

          Seller
shall, upon request of Buyer, make available to Buyer and Buyer’s
representatives and agents, for inspection and copying during normal business
hours, Records located at Seller’s corporate offices, and Seller agrees to
provide Buyer copies of all other reasonably requested information that is
relevant to the management, operation, use, occupancy or leasing of or title to
the applicable 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 (iv) both parties will be relieved of all other
rights, obligations and liabilities hereunder, except for the parties’
obligations pursuant to Sections 3.3 and 16.6 below.

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

          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. 

          3.4
Seller Exhibits. Buyer shall have until the end of the Review Period to
review and approve the information on Exhibits B, C, D, E and F. 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 end 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.

9

ARTICLE IV

SURVEY AND TITLE APPROVAL

          4.1
Survey. Seller has delivered to Buyer true, correct and complete copies
of the most recent surveys of the Real Property. In the event that an update of
the survey or a new survey (such updated or new surveys being referred to as
the “Survey”)
are desired by Buyer, then Buyer shall be responsible for all costs related
thereto.

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

          4.3
Survey or Title Objections. If Buyer discovers any title or survey
matter which is objectionable to Buyer, Buyer may provide Seller with written
notice of its objection to same on or before the expiration of the Review
Period (the “Title Review Period”). If Buyer fails to so object in
writing to any such matter set forth in the Survey or Title Commitment, it
shall be conclusively assumed that Buyer has approved same. If Buyer disapproves
any condition of title, survey or other matters by written objection to Seller
on or before the expiration of the Title Review Period, Seller shall elect
either to attempt to cure or not cure any such item by written notice sent to
Buyer within five (5) days after its receipt of notice from Buyer, and if
Seller commits in writing to attempt to cure any such item, then Seller shall
be given until the Closing Date to cure any such defect. In the event Seller
shall fail to cure a defect which Seller has committed in writing to cure prior
to Closing, or if a new title defect arises after the date of Buyer’s Title
Commitment or Survey, as applicable, but prior to Closing, then Buyer may
elect, in Buyer’s sole and absolute discretion: (i) to waive such objection and
proceed to Closing, or (ii) to terminate this Contract and receive a return of
the Earnest Money Deposit, and any interest thereon. The items shown on the
Title Commitment which are not objected to by Buyer as set forth above (other
than exceptions and title defects arising after the title review period and
other than those standard exceptions which are ordinarily and customarily
omitted in the state in which the applicable Hotel is located, so long as
Seller provides the appropriate owner’s affidavit, gap indemnity or other
documentation reasonably required by the Title Company for such omission) are
hereinafter referred to as the “Permitted Exceptions.” In no event
shall Permitted 

10

Exceptions
include liens, or documents evidencing liens, securing any indebtedness
(including vehicle or FF&E leases or financing arrangements) any mechanics’
or materialmen’s liens or any claims or potential claims therefor covering the
Property or any portion thereof (“Seller Liens”), each of which shall be
paid in full by Seller and released at Closing. If a vehicle or FF&E lease
or other financing cannot be released at Closing, Seller shall credit Buyer at
Closing with the amount necessary to fully pay off such lease or financing over
its term.

ARTICLE V

MANAGEMENT AGREEMENT AND FRANCHISE AGREEMENT

          At
or prior to the Closing, Seller shall terminate the Existing Management
Agreement and the Existing Franchise Agreement, and Seller shall be solely
responsible for all claims and liabilities arising thereunder on, prior to or
following the Closing Date, including outstanding fees, charges or costs and
further including the repayment of any key money, if any. As a condition to
Closing, Buyer shall enter into the New Franchise Agreement, effective as of
the Closing Date, containing terms and conditions acceptable to Buyer. Seller
shall be responsible for paying all costs related to the termination of the
Existing Management Agreement. Buyer shall be responsible for paying all
reasonable and actual costs of the Franchisor related to the assignment or
termination, as applicable, of the Existing Franchise Agreement. Seller shall
use best efforts to promptly provide all information required by the Franchisor
in connection with the New Franchise Agreement, and Seller and Buyer shall
diligently pursue obtaining each the same. 

ARTICLE VI

BROKERS

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

ARTICLE VII

REPRESENTATIONS, WARRANTIES AND COVENANTS

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

                    (a)
Authority; No Conflicts. Seller is a duly formed, validly existing and
in good standing in the State of Indiana. Seller has obtained all necessary
consents to enter into and perform this Contract and is fully authorized to
enter into and perform this Contract and to complete the transactions
contemplated by this Contract. No consent or approval of any person, entity or
governmental authority is required for the execution, delivery or performance
by Seller of this Contract, except as set forth in Exhibit D, and this
Contract is hereby binding and enforceable against Seller. Neither the
execution nor the performance of, or compliance with, this Contract by Seller
has resulted, or will result, in any violation of, or default under, or
acceleration of, any obligation under any existing corporate charter,
certificate of incorporation, 

11

bylaw,
articles of organization, limited liability company agreement or regulations,
partnership agreement or other organizational documents and under any, mortgage
indenture, lien agreement, promissory note, contract, or permit, or any
judgment, decree, order, restrictive covenant, statute, rule or regulation,
applicable to Seller or to the Hotel.

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

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

                    (d)
Property Agreements. A complete list of all FF&E Leases, Service
Contracts and Leases (other than those entered into by the Existing Manager on
its own behalf) used in or otherwise relating to the operation and business of
the Hotel is attached hereto as Exhibit C-1, and, to Seller’s knowledge,
a complete list of all other FF&E Leases, Service Contracts and Leases used
in or otherwise relating to the operation and business of the Hotel is attached
hereto as Exhibit C-2. 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 or to be delivered to Buyer pursuant to Section 3.1. The Service
Contracts, Leases, Warranties and FF&E Leases disclosed on Exhibit C
or to be delivered to Buyer pursuant to Section 3.1 are in full force and
effect, and no default has occurred and is continuing thereunder and no
circumstances exist which, with the giving of notice, the lapse of time or
both, would constitute such a default. No party has any right or option to
acquire the Hotel or any portion thereof, other than Buyer.

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

12

executive
orders affecting the Hotel, or other pending, actual or, to Seller’s knowledge,
threatened litigation claims, charges, complaints, petitions or unsatisfied
orders by or before any administrative agency or court which affect the Hotel
or might become a lien on the Hotel (collectively, the “Pending Claims”).

                    (f)
Environmental. With respect to environmental matters, to Seller’s actual
knowledge, without investigation, (i) there has been no Release or threat of
Release of Hazardous Materials in, on, under, to, from or in the area of the
Real Property, except as disclosed in the reports and documents set forth on Exhibit
E attached hereto and incorporated herein by reference, (ii) no portion of
the Property is being used for the treatment, storage, disposal or other
handling of Hazardous Materials or machinery containing Hazardous Materials
other than standard amounts of cleaning supplies and chlorine for the swimming
pool, all of which are stored on the Property in strict accordance with
applicable Environmental Requirements and do not exceed limits permitted under
applicable laws, including without limitation Environmental Requirements, (iii)
no underground storage tanks are currently located on or in the Real Property
or any portion thereof, (iv) no environmental investigation, administrative
order, notification, consent order, litigation, claim, judgment or settlement
with respect to the Property or any portion thereof is pending or threatened in
writing, (v) there is not currently and, to Seller’s actual knowledge, never
has been any mold, fungal or other microbial growth in or on the Real Property,
or existing conditions within buildings, structures or mechanical equipment
serving such buildings or structures, that could reasonably be expected to
result in material liability or material costs or expenses to remediate the
mold, fungal or microbial growth, or to remedy such conditions that could reasonably
be expected to result in such growth, and (vi) except as disclosed on Exhibit
E, there are no reports or other documentation regarding the environmental
condition of the Real Property in the possession of Seller or Seller’s
Affiliates, consultants, contractors or agents. As used in this Contract: “Hazardous
Materials” means (1) “hazardous wastes” as defined by the
Resource Conservation and Recovery Act of 1976, as amended from time to time
(“RCRA”), (2) “hazardous substances” as defined by the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. 9601 et
seq.), as amended by the Superfund Amendment and Reauthorization Act of
1986 and as otherwise amended from time to time (“CERCLA”); (3) “toxic
substances” as defined by the Toxic Substances Control Act, as amended from
time to time (“TSCA”), (4) “hazardous materials” as
defined by the Hazardous Materials Transportation Act, as amended from time to
time (“HMTA”),
(5) asbestos, oil or other petroleum products, radioactive materials, urea
formaldehyde foam insulation, radon gas and transformers or other equipment
that contains dielectric fluid containing polychlorinated biphenyls and (6) any
substance whose presence is detrimental or hazardous to health or the
environment, including, without limitation, microbial or fungal matter or mold,
or is otherwise regulated by federal, state and local environmental laws
(including, without limitation, RCRA, CERCLA, TSCA, HMTA), rules, regulations
and orders, regulating, relating to or imposing liability or standards of
conduct concerning any Hazardous Materials or environmental, health or safety
compliance (collectively, “Environmental Requirements”). As used
in this Contract: “Release” means spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, dumping or disposing.

13

                    (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
which must be released at Closing), and there are no other liens, claims,
encumbrances or other rights pending or of which any Seller Party has received
notice or which are otherwise known to any Seller Party related to any other
Personal Property.

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

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

                    (j)
Financial Statements. Seller has delivered copies of all prior and
current (i) Financial Statements for the Hotel, (ii) operating statements
prepared by the Existing Manager for the Hotel, and (iii) monthly financial
statements prepared by the Existing Manager for the Hotel. Each of such
statements is, to Seller’s knowledge, complete and accurate in all material
respects and, except in the case of budgets prepared in advance of the
applicable operating period to which such budgets relate, fairly presents the
results of operations of the Hotel for the respective periods represented
thereby. Seller has relied upon the Financial Statements in connection with its
ownership and operation of the Hotel, and there are no independent audits or
financial statements prepared by third parties relating to the operation of the
Hotel other than the Financial Statements prepared by or on behalf of the
Existing Manager, all of which have been provided to Buyer.

                    (k)
Employees. All employees employed at the Hotel are the employees of the
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.

14

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

                    (m)
Existing Management and Franchise Agreements. Seller has furnished to
Buyer true and complete copies of the Existing Management Agreement and the
Existing Franchise Agreement, which constitutes the entire agreement of the
parties thereto 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. 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 and all other requirements of the Existing Manager and the
Franchisor, including all “brand standard” requirements of the Existing Manager
and the Franchisor. 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 has occurred and is continuing under the Existing Management
Agreement or the Existing Franchise Agreement, and no circumstances exist
which, with the giving of notice, the lapse of time or both, would constitute
such a default. 

                    (n)
Construction of Hotel. To the actual knowledge of Seller, without
investigation:

	
  

 	
  

 
	
  

 	
                     (i)
 The Hotel has been constructed in a good and workmanlike manner without
 encroachments and in accordance in all material respects with the Contracts,
 Plans and Specs, and all building permits and certificates of occupancy
 therefor and all applicable zoning, platting, subdivision, health, safety and
 similar laws, rules, regulations, ordinances and codes.

 
	
  

 	
  

 
	
  

 	
                     (ii)
 The Personal Property is in good condition and operating order.

 
	
  

 	
  

 
	
  

 	
                     (iii)
 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.

 

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

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

15

person, entity
or governmental authority is required for the execution, delivery or
performance by Buyer of this Contract, and this Contract is hereby binding and
enforceable against Buyer.

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

          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 twelve (12) months and shall not be deemed to merge into or be
waived by the Deed or any other closing documents.

ARTICLE VIII

ADDITIONAL COVENANTS

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

          8.2
Operations. From and after the date hereof through the Closing on the
Property, Seller shall comply with the Existing Management Agreement and the
Existing Franchise Agreement and keep the same in full force and effect and
shall perform and comply with all of the following subject to and in accordance
with the terms of such agreements:

                    (a)
Continue to maintain the Property generally in accordance with prudent business
practices and pursuant to and in compliance with the Existing Management
Agreement and the Existing Franchise Agreement, including, without limitation,
(i) using reasonable efforts to keep available the services of all present
employees at the 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 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 for the Hotel 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 

16

better
quality; timely make all repairs, maintenance, and replacements to keep all
FF&E and all other Personal Property and all Real Property in good
operating condition; keep and maintain the Hotel in a good state of repair and
condition, reasonable and ordinary wear and tear excepted; 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 good business 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 threatened after the date of this Contract or if any
representation or warranty contained in this Contract shall become false;

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

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

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

          8.3
Third Party Consents. Prior to the Closing Date, Seller shall, at its
expense, (i) obtain any and all third party consents and approvals (x) required
in order to transfer the Hotel to Buyer, or (y) which, if not obtained, would
materially adversely affect the operation of the Hotel, including, without
limitation, all consents and approvals referred to on Exhibit D and (ii)
use best efforts to obtain all other third party consents and approvals (all of
such consents and approvals in (i) and (ii) above being referred to
collectively as, the “Third Party Consents”).

          8.4
Employees. Upon reasonable prior notice to Seller by Buyer, Buyer and
its employees, representatives and agents shall have the right to communicate
with Seller’s staff, and, subject to the approval of the Existing Manager, the
Hotel staff and the Existing Manager’s 

17

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
before Closing. 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 any Property or the Existing Management Agreements. 

          8.5
Estoppel Certificates. Seller shall obtain from (i) each tenant under
any Lease affecting the Hotel (but not from current or prospective occupants of
hotel rooms and suites within the Hotel), (ii) each lessor under any FF&E
Lease for the Hotel identified by Buyer as a material FF&E Lease, and (iii)
each declarant, property owners’ association or similar entity have authority
over the development of which the Property is a part, if any, the estoppel
certificates substantially in the forms provided by Buyer to Seller, and
deliver to Buyer on or before Closing. The information contained in such
estoppel certificates shall be subject to Buyer’s reasonable approval and shall
contain no materially adverse information (e.g., no defaults by the Property as
to use, construction or otherwise and no past due fees, dues, charges or
assessments).

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

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

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

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

18

	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 

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

	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 

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

	
  

 	
  

 
	
  

 	
                               (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

 

19

	
  

 	
  

 
	
  

 	
 to indemnify
 unless (and then solely to the extent that) the Indemnifying Party is
 prejudiced by such delay.

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 

20

	
  

 	
  

 
	
  

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

 

          8.9
Escrow Funds. To provide for the timely payment of any post-closing
claims by Buyer against Seller hereunder, at Closing, Seller shall deposit an
amount equal to Two Hundred Thousand and No/100 Dollars ($200,000.00) (the “Escrow
Funds”) which shall be withheld from the Purchase Price payable
to Seller and shall be deposited for a period of nine (9) months in an escrow
account with the Title Company pursuant to an escrow agreement reasonably
satisfactory in form and substance to Buyer and Seller (the “Post-Closing
Agreement”), which escrow and Post-Closing Agreement shall be
established and entered into at Closing and shall be a condition to Buyer’s
obligations under this Contract. If no claims have been asserted by Buyer
against Seller, or all such claims have been satisfied, within such nine (9)
month period, the Escrow Funds deposited by Seller shall be released to Seller.

          8.10
Intentionally Omitted.

ARTICLE IX

CONDITIONS FOR CLOSING

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

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

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

21

                    (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)
Intentionally Omitted.

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

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

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

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

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

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

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

22

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 the later of (a)
fifteen (15) business days after expiration of the Review Period or (b) the
date Buyer receives the New Franchise Agreement executed by the Franchisor,
provided in either case that all conditions to Closing by Buyer hereunder have
been satisfied. 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 via escrow at the offices of the Title Company, or as
otherwise determined by Buyer and Seller. 

          10.2
Deliveries of Seller. At Closing, Seller shall deliver to Buyer the
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 or Limited Warranty deed conveying to Buyer fee simple
title to the Real Property, subject only to the Permitted Exceptions (the “Deed”).

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

                    (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 FF&E Leases, Service Contracts and Leases identified
on Exhibit C hereto (the “Hotel Contracts”). The assignment shall
also be a general assignment and shall provide for the assignment of all of
Seller’s right, title and interest in all Records, Warranties, Licenses,
Tradenames, Contracts, Plans and Specs and all other intangible Personal
Property applicable to the Hotel. The assignments shall contain cross-indemnities
by Buyer and Seller for their respective periods of ownership.

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

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

23

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

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

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

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

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

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

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

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

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

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

24

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

ARTICLE XI

COSTS

          All
Closing costs shall be paid as set forth below:

          11.1
Seller’s Costs. In connection with the sale of the Property contemplated
under this Contract, Seller shall be responsible for all transfer and
recordation taxes, including, without limitation, all transfer, mansion,
excise, sales, use or bulk transfer taxes or like taxes on or in connection
with the transfer of the Real Property and the Personal Property constituting
part of the Property pursuant to the Bill of Sale, and all accrued taxes of
Seller prior to Closing and income, sales and use taxes and other such taxes of
Seller attributable to the sale of the Property to Buyer. Seller shall be
responsible for all costs related to the termination of the Existing Management
Agreement as provided in Article V. Seller shall also be responsible for any
costs and expenses of its attorneys, accountants, appraisers and other
professionals, consultants and representatives. Seller shall also be
responsible for payment of all prepayment penalties and other amounts payable
in connection with the pay-off of any liens and/or indebtedness encumbering all
or any portion of the Property. 

          11.2
Buyer’s Costs. In connection with the purchase of the Property
contemplated under this Contract, Buyer shall be responsible for the costs and
expenses of its attorneys, accountants and other professionals, consultants and
representatives. Buyer shall also be responsible for the costs and expenses in
connection with the preparation of any environmental report, any update to the
survey and the costs and expenses of preparation of the title insurance
commitment and the issuance of the title insurance policy contemplated by
Article IV and the per page recording charges and clerk’s fee for the Deed (if
applicable). Buyer shall also be responsible for the fees for the performance
of the property improvement plan (PIP) review and report by the Franchisor.

ARTICLE XII

ADJUSTMENTS

          12.1
Adjustments. Unless otherwise provided herein, at Closing, adjustments
between the parties shall be made as of 11:59 p.m. on the eve of the Closing
Date (the “Cutoff Time”), with the income and expenses accrued prior
to the Cutoff Time being allocated to Seller and the income and expenses
accruing on and after the Cutoff Time being allocated to Buyer, all as set
forth below. All of such adjustments and allocations shall be made in cash at
Closing and shall be collected through and/or adjusted in accordance with the
terms of the Existing Management Agreement. Except as otherwise expressly
provided herein, all apportionments and adjustments shall be made on an accrual
basis in accordance with generally accepted accounting principles. Buyer and
Seller shall request that the Manager determine the apportionments, allocations,
prorations and adjustments as of the Cutoff Time.

25

                    (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. Until final tax bills that cover the entire year during
which Closing occurred (such that tax liability can reasonably be determined),
Seller’s obligation to pay its share of taxes shall continue.

                    (b)
Utilities. All suppliers of utilities shall be instructed to read meters
or otherwise determine the charges owing as of the Closing Date for services
prior thereto, 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 Leases and Hotel Contracts applicable to the Property, and any
deposits, prepayments and receipts thereunder, shall be prorated between Buyer
and Seller as of the Cutoff Time.

                    (d)
Accounts. All working capital accounts, reserve accounts and escrow
accounts (including all FF&E accounts, all PIP accounts, Franchisor
escrows, but excluding amounts held in tax and insurance escrow accounts and
utility deposits to the extent excluded from the definition of Deposits), shall
become the property of Buyer, without additional charge to Buyer and without Buyer
being required to fund the same. 

                    (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 be split 50/50
between Buyer and Seller.

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

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

                    (i)
Accounts Payable. To the extent not apportioned at Closing, any
indebtedness, accounts payable, liabilities or obligations of any kind or
nature related to Seller or 

26

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; provided, however, failure to make a final determination
within such period shall not relieve the parties of the obligation to make a
final determination nor shall it relieve any party of the obligation to pay the
other any true-up amounts owed. Upon the final reconciliation of the
allocations and prorations under this Section, the party which owes the other
party any sums hereunder shall pay such party such sums within ten (10) days
after the reconciliation of such sums. The obligations to calculate such
prorations, make such reconciliations and pay any such sums shall survive the
Closing.

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

ARTICLE XIII

CASUALTY AND CONDEMNATION

          13.1
Risk of Loss; Notice. Prior to Closing 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

27

(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 a Hotel (or access
thereto) as could, in Buyer’s reasonable judgment, render use of the remainder
impractical or unfeasible for the uses herein contemplated, and, in the context
of casualty loss or damage, “substantial” shall mean a loss or damage in excess
of One Hundred Thousand and No/100 Dollars ($100,000.00) in value.

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

ARTICLE XIV

DEFAULT REMEDIES

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

          14.2
Seller Default. If Seller defaults under this Contract, and such default
continues for thirty (30) days following written notice from Buyer, Buyer may
elect, as Buyer’s sole and exclusive remedy, either (i) to terminate this
Contract by written notice to Seller delivered to that Seller at any time prior
to the completion of such cure, in which event the Earnest Money Deposit,
including any interest thereon, shall be returned to the Buyer, Seller shall
reimburse Buyer for Buyer’s actual and verifiable due diligence costs and
expenses (not to exceed $50,000)

28

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 the
defaulting Seller for specific performance. 

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

ARTICLE XV

NOTICES

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

	
  

 	
  

 	
  

 
	
  

 	
 If to Buyer:

 	
 Apple Ten
 Hospitality Ownership, Inc.

 814 E. Main Street

 Richmond, Virginia 23219

 Attention: Sam Reynolds

 Fax No.: (804) 344-8129

 Email: sreynolds@applereit.com

 
	
  

 	
  

 	
  

 
	
  

 	
 with a copy
 to:

 	
 Apple REIT
 Ten, Inc.

 814 E. Main Street

 Richmond, Virginia 23219

 Attention: Legal Dept.

 Fax No.: (804) 727-6349

 Email: dbuckley@applereit.com

 

29

	
  

 	
  

 	
  

 
	
  

 	
 If to
 Seller:

 	
 Ascent
 Hospitality Inc.

 3564 Hintocks Circle

 Carmel IN. 46032

 Attention: Nash Patel

 Email: ypatel@indy.rr.com

 
	
  

 	
  

 	
  

 
	
  

 	
 with a copy
 to:

 	
 Stites &
Harbison  
400 W. Market St., Suite 1800 
Louisville,
KY 40202
Attention:
Jamie Cox
Fax No::
(502) 779-8285
E-mail:
jcox@stites.com  

 
	
  

 	
  

 	
  

 
	
  

 	
 with a copy
 to:

 	
 Schulte
Hospitlaity Group  
9905 Shelbyville Rd. Suite #200
Louisville,
KY 40223
Attention:
Darryl Schulte Jr. 
Fax No::
(888) 492-2009
E-mail:
darryljr@schultehospitality.com  

 

          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 assigns.

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

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

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

          16.6
Confidentiality. Except as either party may reasonably determine is
required by law (including without limitation laws and regulations applicable
to Buyer or its Affiliates who may be public companies): (i) prior to Closing,
Buyer and Seller shall not disclose the existence of this Contract or their
respective intentions to purchase and sell the Property or generate or
participate in any publicity or press release regarding this transaction,
except to Buyer’s and

30

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
Buyer’s Due Diligence Examination and/or shadow management, unless both Buyer
and Seller agree in writing and as necessary to effectuate the transactions
contemplated hereby and (ii) following Closing, the parties shall coordinate
any public disclosure or release of information related to the transactions
contemplated by this Contract, and no such disclosure or release shall be made
without the prior written consent of Buyer, and no press release shall be made
without the prior written approval of Buyer and Seller. 

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

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

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

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

          16.11
Further Acts. In addition to the acts, deeds, instruments and agreements
recited herein and contemplated to be performed, executed and delivered by
Buyer and Seller, Buyer and Seller shall perform, execute and deliver or cause
to be performed, executed and delivered at the Closing or after the Closing,
any and all further acts, deeds, instruments and agreements and provide such
further assurances as the other party or the Title Company may reasonably
require to consummate the transaction contemplated hereunder.

          16.12
Joint and Several Obligations. If Seller consists of more than one
person or entity, each such person or entity shall be jointly and severally
liable with respect to the obligations of Seller under this Contract.

          16.13
Notice of Proposed Listing. In the event that the sale of the Property
contemplated by this Contract is consummated, if at any time during the five
(5) year period commencing on the date of execution of this Contract by Buyer
and Seller, Seller or any of its Affiliates propose to list for sale any hotel
property or properties owned, acquired, constructed or developed by Seller or
their Affiliates and located within a ten (10)-mile radius of the Hotel (any
such other hotel property being referred to as an “Other Property”),
Seller shall promptly 

31

deliver to
Buyer written notice thereof and Buyer shall have the right to see and
participate in the offering and/or otherwise make an offer to purchase any such
Other Property.

[Signatures Begin on Following Page]

32

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

	
  

 	
  

 	
  

 
	
  

 	
 SELLER:

 
	
  

 	
  

 
	
  

 	
 By: 

 	
 /s/ Nash
 Patel

 
	
  

 	
  

 	

 

 
	
  

 	
 Name: Nash
 Patel

 
	
  

 	
 Title:
 President

 
	
  

 	
  

 
	
  

 	
 BUYER:

 
	
  

 	
  

 
	
  

 	
 APPLE TEN
 HOSPITALITY OWNERSHIP, INC., 

 a Virginia corporation

 
	
  

 	
  

 
	
  

 	
 By: 

 	
 /s/ David
 Buckley

 
	
  

 	
  

 	

 

 
	
  

 	
 Name: David
 Buckley

 
	
  

 	
 Title: Vice
 President

 

33

EXHIBIT
“A”

LEGAL DESCRIPTION OF LAND

FEE TRACT I:

Lot
1 in the Hilton Garden Inn Subdivision, an Addition to the City of Hobart, Lake
County, Indiana, recorded January 8, 2007, in Plat Book 100 Page 77, as
Instrument 2007001915 in the office of the Recorder of Lake County, Indiana.

EASEMENT TRACT II:

Rights
to tie into sanitary sewerage, water, and drainage facilities in favor of the
“Smith Brothers Tract,” as set forth in the agreement by and among (i) G. I.
Land Co., (ii) Smith Real Estate Corporation, and (iii) Marvin D. Smith, Jr.,
and Hugh A. Smith, dated January 10, 1979, and recorded as Instrument 521403 in
the office aforesaid.

EASEMENT TRACT III:

Nonexclusive
easement over 35’ easement area for vehicular and pedestrian ingress
and egress, nonexclusive easement to drain surface waters, and nonexclusive
easements to use Common Facilities and Common Utility Facilities, as set forth
in the Declaration of Easements, Covenants, and Conditions by G. I. Land, dated
December 21, 1978, and recorded as Instrument 513561; being subject to the
Supplemental Agreement by and between G. I. Land and Toys R Us, Inc., dated
January 30, 1979, and recorded as Instrument 513565; being subject to the
amendment by instrument dated March 12, 1987, and recorded as Instrument
907788; being subject to the Supplemental Agreement dated March 16, 1987, and
recorded as Instrument 907791;
being subject to the Supplemental Agreement dated September 27, 1989, recorded
as Instrument 059964; and subject to the Second Amendment to Declaration of
Easements, Covenants, and Conditions recorded August 19, 1994, as Instrument
94059148, all in the office aforesaid.

EXHIBIT B

LIST
OF FF&E

	
  

 	
  

 	
  

 
	
 Guest Rooms

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 Item

 	
  

 	
 Qty

 
	

 

 	
  

 	

 

 
	
 King Beds

 	
  

 	
 72

 
	
 Queen Beds

 	
  

 	
 104

 
	
 Night Stands

 	
  

 	
 196

 
	
 Desks

 	
  

 	
 124

 
	
 Desk Lamps

 	
  

 	
 124

 
	
 Floor Lamps

 	
  

 	
 123

 
	
 Hospitality Centers

 	
  

 	
 124

 
	
 End Table

 	
  

 	
 128

 
	
 Desk Chairs

 	
  

 	
 124

 
	
 Club Chairs

 	
  

 	
 124

 
	
 Ottomans

 	
  

 	
 111

 
	
 Coffee Tables

 	
  

 	
 13

 
	
 Televisions

 	
  

 	
 150

 
	
 Couches

 	
  

 	
 13

 
	
 Full Length Mirrors

 	
  

 	
 125

 
	
 Bath Mirrors

 	
  

 	
 124

 
	
 Wall Mirrors

 	
  

 	
 124

 
	
 Bedroom Artwork

 	
  

 	
 248

 
	
 Bathroom Artwork

 	
  

 	
 124

 
	
 Skirt Hangers

 	
  

 	
 735

 
	
 Pany Hangers

 	
  

 	
 844

 
	
 Radios

 	
  

 	
 127

 
	
 Telephones

 	
  

 	
 248

 
	
 Microwaves

 	
  

 	
 125

 
	
 Coffee Pots

 	
  

 	
 129

 
	
 Coffee Machines

 	
  

 	
 128

 
	
 Ice Bucket

 	
  

 	
 134

 
	
 Refridgerators

 	
  

 	
 127

 
	
 Irons

 	
  

 	
 125

 
	
 Ironing Boards

 	
  

 	
 127

 
	
 Water Glasses

 	
  

 	
 573

 
	
 Coffee Mugs

 	
  

 	
 312

 
	
 Hair Dryers

 	
  

 	
 122

 
	
 Coffee Trays

 	
  

 	
 294

 

2

	
  

 	
  

 	
  

 
	
 Dressers

 	
  

 	
 124

 
	
 Nightstand Lamps

 	
  

 	
 196

 
	
 Ash Trays

 	
  

 	
 35

 
	
 Kleenex Holders

 	
  

 	
 159

 
	
 Wooden Chairs

 	
  

 	
 13

 
	
 Room Garbage Cans

 	
  

 	
 125

 
	
 Bathroom Garbage Cans

 	
  

 	
 126

 
	
 Tall Plants

 	
  

 	
 2

 
	
 Small Plants

 	
  

 	
 1

 
	
  

 	
  

 	
  

 
	
 Public Areas/Restaurant

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 Couches

 	
  

 	
 2

 
	
 Club Chairs

 	
  

 	
 9

 
	
 Coffee Tables

 	
  

 	
 2

 
	
 Standning Tables

 	
  

 	
 2

 
	
 End Tables

 	
  

 	
 5

 
	
 Table Lamps

 	
  

 	
 5

 
	
 Floor Lamps

 	
  

 	
 1

 
	
 Dining Room Chairs

 	
  

 	
 56

 
	
 Dining Room Tables

 	
  

 	
 31

 
	
 Bar Stools

 	
  

 	
 12

 
	
 Banquet Tables 6’

 	
  

 	
 36

 
	
 Banquet Tables 8’

 	
  

 	
 21

 
	
 Banquet Tables 72”

 	
  

 	
 31

 
	
 Banquet Chairs

 	
  

 	
 379

 
	
 Bench Seating

 	
  

 	
 5

 
	
 Pool Chairs

 	
  

 	
 17

 
	
 Pool Area Tables

 	
  

 	
 1

 
	
 Outdoor Chairs

 	
  

 	
 12

 
	
 Outdoor Tables

 	
  

 	
 2

 
	
 Outdoor Umbrellas

 	
  

 	
 2

 
	
  

 	
  

 	
  

 
	
 Offices

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 Item

 	
  

 	
 Qty

 
	

 

 	
  

 	

 

 
	
 Desks

 	
  

 	
 6

 
	
 Computer Terminals

 	
  

 	
 11

 
	
 Filing Cabinets

 	
  

 	
 2

 
	
 Desk Chairs

 	
  

 	
 8

 
	
 Secondary Chairs

 	
  

 	
 8

 
	
 Printers

 	
  

 	
 6

 
	
 Scanners

 	
  

 	
 1

 

3

	
  

 	
  

 	
  

 
	
 Telephones

 	
  

 	
 10

 
	
  

 	
  

 	
  

 
	
 Misc Equipment

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 Carpet Extractor

 	
  

 	
 1

 
	
 Spot Bot

 	
  

 	
 1

 
	
 Pressure Washer

 	
  

 	
 1

 
	
 Vaccums

 	
  

 	
 11

 
	
 Speed Blower

 	
  

 	
 1

 
	
 Dance Floor

 	
  

 	
 16

 
	
 Rollaway Beds

 	
  

 	
 4

 
	
 Cribs

 	
  

 	
 2

 
	
 Pack and Plays

 	
  

 	
 1

 
	
 Housekeeping Carts

 	
  

 	
 8

 
	
 Utility Carts

 	
  

 	
 2

 
	
 Washers Guest Laundry

 	
  

 	
 2

 
	
 Dryers Guest Laundry

 	
  

 	
 2

 
	
 Washer Laundry

 	
  

 	
 2

 
	
 Dryer Laundry

 	
  

 	
 2

 
	
 Laundry Folding Tables

 	
  

 	
 2

 
	
 Ice Machines

 	
  

 	
 5

 
	
 Ice Machines Crushed Ice

 	
  

 	
 1

 
	
  

 	
  

 	
  

 
	
 Kitchen

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 Candy Stove

 	
  

 	
 1

 
	
 3 compartment sink

 	
  

 	
 1

 
	
 2 compartment sink

 	
  

 	
 1

 
	
 Dish Tank

 	
  

 	
 1

 
	
 Hot Box

 	
  

 	
 2

 
	
 Table Mixer

 	
  

 	
 1

 
	
 Slicer

 	
  

 	
 1

 
	
 Walkin-Cooler

 	
  

 	
 1

 
	
 Walkin-Freezer

 	
  

 	
 1

 
	
 Ovens

 	
  

 	
 2

 
	
 Deep Fryer

 	
  

 	
 1

 
	
 6 burner stover w/flat top

 	
  

 	
 1

 
	
 Grill

 	
  

 	
 1

 
	
 Microwave

 	
  

 	
 1

 
	
 Low Boy Fridge

 	
  

 	
 3

 
	
 Low Boy Freezer

 	
  

 	
 1

 
	
 Standing Coolers

 	
  

 	
 2

 
	
 Standing Freezer

 	
  

 	
 1

 

4

	
  

 	
  

 	
  

 
	
 Airpots 1.5 Gal

 	
  

 	
 7

 
	
 Airpots 3.0 Liter

 	
  

 	
 5

 
	
 Chafers

 	
  

 	
 10

 
	
 2” Hotel Pan Full

 	
  

 	
 33

 
	
 4” Hotel Pan Full

 	
  

 	
 9

 
	
 6” Hotel Pan Full

 	
  

 	
 10

 
	
 2” Hotel Half

 	
  

 	
 11

 
	
 2” 1/4 Pan

 	
  

 	
 5

 
	
 4” 1/2 pan

 	
  

 	
 4

 
	
 4” 1/4 Pan

 	
  

 	
 1

 
	
 Full Cookie Sheets

 	
  

 	
 31

 
	
 Half Cookie Sheets

 	
  

 	
 17

 
	
 Collanders

 	
  

 	
 3

 
	
 Knife Set

 	
  

 	
 1

 
	
 Muffin Tins

 	
  

 	
 2

 
	
 Mixing Bowls

 	
  

 	
 9

 
	
 6” Fry Pan

 	
  

 	
 9

 
	
 10” Fry Pan

 	
  

 	
 4

 
	
 12” Pan

 	
  

 	
 3

 
	
 18” Pan

 	
  

 	
 4

 
	
 6” Pot

 	
  

 	
 2

 
	
 10” Pot

 	
  

 	
 4

 
	
 12” Pot

 	
  

 	
 4

 
	
 Stock Pot

 	
  

 	
 3

 
	
  

 	
  

 	
  

 
	
 Fitness Center

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 Bike

 	
  

 	
 1

 
	
 Treadmill

 	
  

 	
 2

 
	
 Eliptical

 	
  

 	
 1

 
	
 Stretch Trainer

 	
  

 	
 1

 
	
 Weight bench

 	
  

 	
 1

 
	
 All In One

 	
  

 	
 1

 
	
 Strengthening Ball Sets

 	
  

 	
 1

 
	
 Free Weight Sets

 	
  

 	
 1

 
	
 Stay Fit Kits

 	
  

 	
 3

 

5

EXHIBIT C

LIST OF HOTEL CONTRACTS

EXHIBIT
C-1 - Seller’s Hotel Contracts

F.E. Moran
Inc.—Alarm & Monitoring Systems

Abell
Elevator—Elevator maintenance

Great Lakes
Automatic Door, Inc.—door service

The Lamar
Companies—billboards

Total
Disposal—garbage pickup

Oce—business
center copier

Orkin-Pest
Control

6

EXHIBIT D

CONSENTS AND APPROVALS

NONE

EXHIBIT E

ENVIRONMENTAL REPORTS

          August 15, 2007—(Phase 1 Environmental
Assessment)—ALT & Witzig Consulting Services

EXHIBIT F

CLAIMS OR LITIGATION PENDING

NONE

-i-

EXHIBIT G

ESCROW AGREEMENT

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

R E C I T A L S

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

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

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

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

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

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

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

-ii-

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

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

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

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

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

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

-iii-

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

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

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

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

	
 

	
 

	
 

	
 

	
If to
Seller:

	
Ascent
Hospitality Inc.

	
 

	
 

	
3564
Hintocks Circle

	
 

	
 

	
Carmel IN.
46032

	
 

	
 

	
Attention:
Nash Patel

	
 

	
 

	
Email:
ypatel@indy.rr.com

	
 

	
 

	
 

	
 

	
with a copy
to:

	
Stites &
Harbison

	
 

	
 

	
400 W. Market St., Suite 1800 

-iv-

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Louisville, KY 40202

	
 

	
 

	
 

	
Attention: Jamie Cox

	
 

	
 

	
 

	
Fax No:: (502) 779-8285 

	
 

	
 

	
 

	
E-mail:
jcox@stites.com

	
 

	
 

	
 

	
 

	
 

	
with a copy
to:

	
Schulte
Hospitlaity Group

	
 

	
 

	
 

	
9905 Shelbyville Rd. Suite #200

	
 

	
 

	
 

	
Louisville, KY 40223

	
 

	
 

	
 

	
Attention: Darryl Schulte Jr. 

	
 

	
 

	
 

	
Fax No:: (888) 492-2009 

	
 

	
 

	
 

	
E-mail:
darryljr@schultehospitality.com

	
 

	
 

	
 

	
 

	
 

	
 

	
(i)

	
 

	
If addressed
to Buyer, to:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Apple Ten
Hospitality Ownership, Inc.

	
 

	
 

	
 

	
814 E. Main
Street

	
 

	
 

	
 

	
Richmond,
Virginia 23219

	
 

	
 

	
 

	
Attn: Sam
Reynolds

	
 

	
 

	
 

	
Fax No.:
(804) 344-8129

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
with a copy
to:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Apple REIT
Ten, Inc.

	
 

	
 

	
 

	
814 E. Main
Street

	
 

	
 

	
 

	
Richmond,
Virginia 23219

	
 

	
 

	
 

	
Attn: Legal
Dept.

	
 

	
 

	
 

	
Fax No.:
(804) 727-6349

	
 

	
 

	
 

	
 

	
 

	
 

	
(ii)

	
 

	
If addressed
to Escrow Agent, to:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Chicago
Title Company

	
 

	
 

	
 

	
5501 LBJ
Freeway, Suite 200

	
 

	
 

	
 

	
Dallas,
Texas 75240

	
 

	
 

	
 

	
Attn: Debby
Moore

	
 

	
 

	
 

	
Fax No.:
(214) 570-0210

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

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

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

-v-

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

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
SELLER:

	
 

	
 

	
 

	
By: 

	
 

	
 

	
 

	
 

	

	
 

	
 

	
Name: Nash
Patel

	
 

	
Title: President

	
 

	
 

	
 

	
 

	
BUYER:

	
 

	
 

	
 

	
APPLE TEN
HOSPITALITY OWNERSHIP, INC.

	
 

	
 

	
 

	
By: 

	
 

	
 

	
 

	
 

	

	
 

	
 

	
Name:

	
 

	
 

	
 

	
 

	

	
 

	
 

	
Title:

	
 

	
 

	
 

	
 

	

	
 

	
 

	
 

	
 

	
ESCROW AGENT:

	
 

	
 

	
 

	
CHICAGO
TITLE COMPANY

	
 

	
 

	
 

	
By: 

	
 

	
 

	
 

	
 

	

	
 

	
 

	
Name:

	
 

	
 

	
 

	
 

	

	
 

	
 

	
Title:

	
 

	
 

	
 

	
 

	

	
 

-vi-

SCHEDULE 3.1

DUE DILIGENCE LIST

Due Diligence

Documents Required

[electronic
versions preferred]

Property Name:

Date Opened:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Date

Sent

	
 

	
Comments

	
 

	
 

	
 

	
 

	

	
 

	

	
1

	
 

	
Y-T-D Detailed Operating Statements

	
 

	
 

	
 

	
 

	
2

	
 

	
Prior 5 Years Detailed P&L’s by month

	
 

	
 

	
 

	
 

	
3

	
 

	
2011 Detailed Budget (Operating)

	
 

	
 

	
 

	
 

	
4

	
 

	
2011 Budget (Capital Expenditures)

	
 

	
 

	
 

	
 

	
5

	
 

	
STAR Report (previous 5 years)

	
 

	
 

	
 

	
 

	
6

	
 

	
2011 Marketing Plan

	
 

	
 

	
 

	
 

	
7

	
 

	
Monthly Occupancy & Average
Daily/Week/Package Rates (previous 3 years)

	
 

	
 

	
 

	
 

	
8

	
 

	
Schedule of Advance Deposits of Advance
Reservations and Bookings (Top 20 Accounts)

	
 

	
 

	
 

	
 

	
9

	
 

	
Real Estate Tax Bills (last 2 years)

	
 

	
 

	
 

	
 

	
10

	
 

	
Personal Property Tax Bills (last 2 years)

	
 

	
 

	
 

	
 

	
11

	
 

	
Notices of Current Tax Assessments or
Increases

	
 

	
 

	
 

	
 

	
12

	
 

	
Schedule of Insurance Coverage and Claims

	
 

	
 

	
 

	
 

	
13

	
 

	
Personal Property List (e.g., FF&E,
office equipment)

	
 

	
 

	
 

	
 

	
14

	
 

	
Inventory of Supplies (e.g., chinaware,
glassware, paper goods, office supplies, unopened food and beverage
inventory)

	
 

	
 

	
 

	
 

	
15

	
 

	
Copies of Service Contracts and Equipment
Leases

	
 

	
 

	
 

	
 

	
16

	
 

	
Copies of Space Leases (e.g., gift shop,
health club/spa)

	
 

	
 

	
 

	
 

-vii-

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Date

Sent

	
 

	
Comments

	
 

	
 

	
 

	
 

	

	
 

	

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
17

	
 

	
Vehicle Title/Leases

	
 

	
 

	
 

	
 

	
18

	
 

	
Copies and Schedules of all Warranties and
Guaranties

	
 

	
 

	
 

	
 

	
19

	
 

	
Existing Management Agreement

	
 

	
 

	
 

	
 

	
20

	
 

	
Existing Franchise/License Agreement

	
 

	
 

	
 

	
 

	
21

	
 

	
Loan Documents (Promissory Note, Mortgage,
etc.)

	
 

	
 

	
 

	
 

	
22

	
 

	
Most current Franchise Property Improvement
Plan or QA Assessment

	
 

	
 

	
 

	
 

	
23

	
 

	
Copies of all Licenses, Permits, and
Approvals, including Liquor License

	
 

	
 

	
 

	
 

	
24

	
 

	
Certificate of Occupancy

	
 

	
 

	
 

	
 

	
25

	
 

	
Most Recent Property Payroll

	
 

	
 

	
 

	
 

	
26

	
 

	
Copy of Employment Contracts, if any

	
 

	
 

	
 

	
 

	
27

	
 

	
Construction docs and Plans & Specs
(electronically if available)

	
 

	
 

	
 

	
 

	
28

	
 

	
Appraisal

	
 

	
 

	
 

	
 

	
29

	
 

	
Structural Engineering Audit

	
 

	
 

	
 

	
 

	
30

	
 

	
Environmental Site Assessment (Phase I)

	
 

	
 

	
 

	
 

	
31

	
 

	
Property Condition Report

	
 

	
 

	
 

	
 

	
32

	
 

	
Schedule of Utility Providers and Utility
Deposits

	
 

	
 

	
 

	
 

	
33

	
 

	
Copies of Utility Bills (previous 3 months)

	
 

	
 

	
 

	
 

	
34

	
 

	
Zoning, compliance, and violation docs

	
 

	
 

	
 

	
 

	
35

	
 

	
Title Insurance Commitment, Title Search or
Title Certificate

	
 

	
 

	
 

	
 

	
36

	
 

	
Copies of Title Exceptions

	
 

	
 

	
 

	
 

	
37

	
 

	
ALTA Survey

	
 

	
 

	
 

	
 

	
38

	
 

	
Service Contract Summary Completed

	
 

	
 

	
 

	
 

	
39

	
 

	
Property Data Sheet Completed

	
 

	
 

	
 

	
 

	
40

	
 

	
Other

	
 

	
 

	
 

	
 

-viii-

Due Diligence

Service Contract Summary

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Brand:

Location:

# Rooms:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Service

Contract

	
 

	
Term

	
 

	
Annual

Amount

	
 

	
Cancellation

	
 

	
Company

	
 

	
Assignment

	
 

	
 

	

	
 

	

	
 

	

	
 

	

	
 

	

	
 

	

	
EXAMPLE
 
Kone Elevator

Service 

	
 

	
Quarterly
Inspection
& Service

	
 

	
5yrs; beg
2/12/04

	
 

	
$4,942

	
 

	
90-day notice

prior to

expiration

	
 

	
Hotel

Properties, 

LLC

	
 

	
w/ written consent

	

	
 

	

	
 

	

	
 

	

	
 

	

	
 

	

	
 

	

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

	

	

	

	

	

	

	

	

	

	

	

	

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

	

	

	

	

	

	

	

	

	

	

	

	

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

	

	

	

	

	

	

	

	

	

	

	

	

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

	

	

	

	

	

	

	

	

	

	

	

	

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

	

	

	

	

	

	

	

	

	

	

	

	

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

	

	

	

	

	

	

	

	

	

	

	

	

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

	

	

	

	

	

	

	

	

	

	

	

	

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

	

	

	

	

	

	

	

	

	

	

	

	

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

	

	

	

	

	

	

	

	

	

	

	

	

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

	

	

	

	

	

	

	

	

	

	

	

	

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

	

	

	

	

	

	

	

	

	

	

	

	

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

	

	

	

	

	

	

	

	

	

	

	

	

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

	

	

	

	

	

	

	

	

	

	

	

	

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

	

	

	

	

	

	

	

	

	

	

	

	

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

	

	

	

	

	

	

	

	

	

	

	

	

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

	

	

	

	

	

	

	

	

	

	

	

	

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

	

	

	

	

	

	

	

	

	

	

	

	

	
LEASE CONTRACTS 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

	

	

	

	

	

	

	

	

	

	

	

	

	
Name

	
 

	
Equipment

	
 

	
Term

	
 

	
Annual

Amount

	
 

	
Cancellation

	
 

	
Company

	
 

	
Assignment

	

	
 

	

	
 

	

	
 

	

	
 

	

	
 

	

	
 

	

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

	

	

	

	

	

	

	

	

	

	

	

	

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

	

	

	

	

	

	

	

	

	

	

	

	

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

	

	

	

	

	

	

	

	

	

	

	

	

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

	

	

	

	

	

	

	

	

	

	

	

	

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

	

	

	

	

	

	

	

	

	

	

	

	

-ix-

Due Diligence

Property Data Survey

[To Be Completed Electronically]

-x-

-xi-

-xii-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00193-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00193-of-00352.parquet"}]]