Document:

Exhibit 4.1

 Exhibit 4.1 
  

[Face of Security] 
  
 FEDERAL REALTY INVESTMENT TRUST 
  
 5.65% Note due 2016 
  

			
	 CUSIP No. 313747 AL 1
	 	 $125,000,000

  
 UNLESS THIS NOTE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND SUCH NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR
SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN. 
  
 UNLESS AND UNTIL THIS NOTE IS EXCHANGED IN WHOLE OR IN PART FOR
NOTES IN CERTIFICATED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE THEREOF OR BY A NOMINEE THEREOF TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A
SUCCESSOR OF THE DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR. 
  
 THIS NOTE
WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN MINIMUM DENOMINATIONS OF $1,000 AND INTEGRAL MULTIPLES OF $1,000 IN EXCESS THEREOF. 
  
 FEDERAL REALTY INVESTMENT TRUST, a Maryland real estate investment trust (herein referred to as the “Company,” which term includes any successor
corporation under the Indenture referred to on the reverse hereof), for value received, hereby promises to pay to Cede & Co. or registered assigns the principal sum of One Hundred Twenty-Five Million Dollars on June 1, 2016 (the “Stated
Maturity Date”) or the date fixed for earlier redemption (the “Redemption Date,” and together with the Stated Maturity Date with respect to principal repayable on such date, the “Maturity Date”), and to pay interest thereon
from December 2, 2005 or from the most recent interest payment date to which interest has been paid or duly provided for, semi-annually on June 1 and December 1 in each year (each, an “Interest Payment Date”), commencing June 1, 2006, at
the rate of 5.65% per annum, until the principal hereof is paid or duly provided for. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Holder in whose
name this Note (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be on May 15 or November 15 (whether or not a Business Day), as the case may be, next preceding
such Interest Payment Date at the office or agency of the Company maintained for such purpose; provided, however, that such interest may be paid, at the Company’s option, by mailing a check to such Holder at its registered 

 
address or by transfer of funds to an account maintained by such Holder within the United States. Any such interest not so punctually paid or duly provided
for shall forthwith cease to be payable to the Holder on such Regular Record Date, and may be paid to the Holder in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the
payment of such Defaulted Interest to be fixed by the Trustee referred to on the reverse hereof, notice whereof shall be given to Holders of Notes of this series not less than 10 days prior to such Special Record Date, or may be paid at any time in
any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture.
Interest will be computed on the basis of a 360-day year of twelve 30-day months. 
  
 The principal of this Note payable on the Stated Maturity Date or the principal of, premium, if any, and, if the Redemption Date is not an Interest Payment Date, interest on this Note payable on the Redemption Date
will be paid against presentation of this Note at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, The City of New York, in such coin or currency of the United States of America as at the time of payment
is legal tender for the payment of public and private debts. 
  
 Interest payable on this Note on any Interest Payment Date and on the Maturity Date, as the case may be, will include interest accrued from and including the next preceding Interest Payment Date in respect of which interest has been paid or
duly provided for (or from and including December 2, 2005, if no interest has been paid on this Note) to but excluding such Interest Payment Date or the Maturity Date, as the case may be. If any Interest Payment Date or the Maturity Date falls on a
day that is not a Business Day, as defined below, principal, premium, if any, and/or interest payable with respect to such Interest Payment Date or Maturity Date, as the case may be, will be paid on the next succeeding Business Day with the same
force and effect as if it were paid on the date such payment was due, and no interest shall accrue on the amount so payable for the period from and after such Interest Payment Date or Maturity Date, as the case may be. “Business Day” means
any day, other than a Saturday or Sunday, on which banks in the City of New York and the City of Charlotte, State of North Carolina, are not required or authorized by law or executive order to close. 
  
 All payments of principal, premium, if any, and interest in respect of this
Note will be made by the Company in immediately available funds. 
  
 Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. 
  
 Unless the Certificate of Authentication hereon has been executed by the
Trustee by manual signature of one of its authorized signatories, this Note shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose. 
  
 [This space intentionally left blank] 
  

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 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed. 
  
 Dated: December 2, 2005 
  

			
	FEDERAL REALTY INVESTMENT TRUST
		
	By:	 	 
	 	 	 Trustee

  

			
		
	By:	 	 
	 	 	 Dawn M. Becker
 Executive Vice President-General Counsel
 and Secretary

  
 Attest: 
  

	
	
	  
	 Darlene M. Hough
 Assistant Secretary

  
 TRUSTEE’S CERTIFICATE OF AUTHENTICATION 
  
 This is the Note of the series designated therein referred to in the within-mentioned Indenture. 
  
  

			
	 WACHOVIA BANK, NATIONAL
 ASSOCIATION, as Trustee

		
	By:	 	 
	 	 	Authorized Signatory

 [Reverse of Security] 
  
 FEDERAL REALTY INVESTMENT TRUST 
  
 5.65% Note due 2016 
  
 This Note is one of a duly authorized issue of securities of the Company (herein called the “Securities”), issued and to be issued in one or
more series under an Indenture, dated as of September 1, 1998 (herein called the “Indenture”) between the Company and Wachovia Bank, National Association, as Trustee (herein called the “Trustee”, which term includes any successor
trustee under the Indenture with respect to the series of which this Note is a part), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the Securities, and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Note is one of the duly authorized series of Securities designated
as “5.65% Notes due 2016” (collectively, the “Notes”), and the aggregate principal amount of the Notes to be issued under such series is initially limited to $125,000,000 (except for Notes authenticated and delivered upon
transfer of, or in exchange for, or in lieu of other Notes). The Company may, without the consent of the Holders of any Securities, create and issue additional notes in the future having the same terms other than the date of original issuance, the
issue price and the date on which interest begins to accrue so as to form a single series with the Notes. The Notes are the unsecured and unsubordinated obligations of the Company and rank equally will all existing and future unsecured and
unsubordinated indebtedness of the Company. All terms used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture. 
  
 If an Event of Default, as defined in the Indenture, shall occur and be continuing, the principal of the Securities of this
series may be declared due and payable in the manner and with the effect provided in the Indenture. 
  
 The Notes are subject to redemption at any time, in whole or in part, at the election of the Company, at a redemption price equal to the greater of
(1) 100% of the principal amount of the Notes being redeemed, or (2) as determined by the Quotation Agent (as defined below), the sum of the present values of the remaining scheduled payments of principal and interest thereon (not
including any portion of such payments of interest accrued as of the Redemption Date) discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate (as defined
below) plus 20 basis points plus, in each case, accrued interest thereon to the Redemption Date; provided, however, that installments of interest on this Note whose Stated Maturity Date is on or prior to such Redemption Date will be payable to the
Holder of this Note, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture. 
  
 As used herein: 
  
 “Adjusted Treasury Rate” means, with
respect to any Redemption Date, the rate per year equal to the semi-annual equivalent yield to maturity of the Comparable 

 
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price
for such Redemption Date. 
  
 “Comparable
Treasury Issue” means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term of the notes to be redeemed that would be utilized, at the time of selection and in accordance
with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such notes. 
  
 “Comparable Treasury Price” means, with respect to any Redemption Date, (1) the average of the Reference Treasury
Dealer Quotations for such Redemption Date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (2) if the Trustee obtains fewer than three such Reference Treasury Dealer quotations, the average of all such
Quotations. 
  
 “Quotation
Agent” means the Reference Treasury Dealer appointed by the Company. 
  
 “Reference Treasury Dealer” means (1) each of Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and one other primary U.S. Government securities dealer in
New York City selected by Wachovia Capital Markets, LLC, and their respective successors; provided, however, that if any of the foregoing cease to be a primary U.S. Government securities dealer (a “Primary Treasury Dealer”), the Company
will substitute therefor another Primary Treasury Dealer; and (2) any other Primary Treasury Dealer selected by the Company. 
  
 “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any Redemption Date, the
average, as determined by the Company, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. New
York City time, on the third Business Day preceding such Redemption Date. 
  
 Notice of redemption will be given by mail to Holders of Securities, not less than 30 nor more than 60 days prior to the Redemption Date, all as provided in the Indenture. 
  
 In the event of redemption of this Note in part only, a new Note or Notes for
the unredeemed portion hereof shall be issued in the name of the Holder hereof upon the cancellation hereof. 
  
 The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority of the aggregate principal amount of all Securities issued under the
Indenture at the time Outstanding and affected thereby. The Indenture also contains provisions permitting the Holders of not less than a majority of the aggregate principal amount of the Outstanding Securities, on behalf of the Holders of all such

  

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Securities, to waive compliance by the Company with certain provisions of the Indenture. Furthermore, provisions in the Indenture permit the Holders of not
less than a majority of the aggregate principal amount, in certain instances, of the Outstanding Securities of any series to waive, on behalf of all of the Holders of Securities of such series, certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and other Notes issued upon the registration of transfer hereof or in exchange herefor or
in lieu hereof, whether or not notation of such consent or waiver is made upon this Note. 
  
 No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if
any) and interest on this Note at the times, places and rate, and in the coin or currency, herein prescribed. 
  
 The Company will not, and will not permit any Subsidiary to, incur any Debt (as defined below) if, immediately after giving effect to the incurrence of
such Debt and the application of the proceeds thereof, the aggregate principal amount of all outstanding Debt of the Company and its Subsidiaries on a consolidated basis determined in accordance with generally accepted accounting principles is
greater than 60% of the sum of (without duplication) (i) Total Assets as of the end of the calendar quarter covered in the Company’s Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as the case may be, most recently filed with
the Securities and Exchange Commission (or, if such filing is not permitted under the Securities Exchange Act of 1934, with the Trustee) prior to the incurrence of such additional Debt and (ii) the purchase price of any real estate assets or
mortgages receivable acquired, and the amount of any securities offering proceeds received (to the extent such proceeds were not used to acquire real estate assets or mortgages receivable or used to reduce Debt), by the Company or any Subsidiary
since the end of such calendar quarter, including those proceeds obtained in connection with the incurrence of such additional Debt. 
  
 In addition to the foregoing limitation on the incurrence of Debt, the Company will not, and will not permit any Subsidiary to, incur any Debt secured by
any mortgage, lien, charge, pledge, encumbrance or security interest of any kind upon any of the property of the Company or any Subsidiary if, immediately after giving effect to the incurrence of such Debt and the application of the proceeds
thereof, the aggregate principal amount of all outstanding Debt of the Company and its Subsidiaries on a consolidated basis which is secured by any mortgage, lien, charge, pledge, encumbrance or security interest on property of the Company or any
Subsidiary is greater than 40% of the sum of (without duplication) (1) Total Assets as of the end of the calendar quarter covered in the Company’s Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as the case may be, most
recently filed with the Securities and Exchange Commission (or, if such filing is not permitted under the Securities Exchange Act of 1934, with the Trustee) prior to the incurrence of such additional Debt and (2) the purchase price of any real
estate assets or mortgages receivable acquired, and the amount of any securities offering proceeds received (to the extent such proceeds were not used to acquire real estate assets or mortgages receivable or used to reduce Debt), by the Company or
any Subsidiary since the end of such calendar quarter, including those proceeds obtained in connection with the incurrence of such additional Debt; provided, however, that for purposes of this limitation, the amount of 

  

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obligations under capital leases shown as a liability on the Company’s consolidated balance sheet shall be deducted from Debt and Total Assets.

  
 Furthermore, the Company will not, and will not permit any
Subsidiary to, incur any Debt if the ratio of Consolidated Income Available for Debt Service (as defined below) to the Annual Debt Service Charge (as defined below) for the four consecutive fiscal quarters most recently ended prior to the date on
which such additional Debt is to be incurred shall have been less than 1.5 to 1, on an unaudited pro forma basis after giving effect thereto and to the application of the proceeds therefrom, and calculated on the assumption that (i) such Debt
and any other Debt incurred by the Company and its Subsidiaries since the first day of such four-quarter period and the application of the proceeds therefrom, including to refinance other Debt, had occurred at the beginning of such period;
(ii) the repayment or retirement of any other Debt by the Company and its Subsidiaries since the first day of such four-quarter period had been repaid or retired at the beginning of such period (except that, in making such computation, the
amount of Debt under any revolving credit facility shall be computed based upon the average daily balance of such Debt during such period); (iii) in the case of Acquired Debt or Debt incurred in connection with any acquisition since the first
day of such four-quarter period, the related acquisition had occurred as of the first day of such period with the appropriate adjustments with respect to such acquisition being included in such unaudited pro forma calculation; and (iv) in the
case of any acquisition or disposition by the Company or its Subsidiaries of any asset or group of assets since the first day of such four-quarter period, whether by merger, stock purchase or sale, or asset purchase or sale, such acquisition or
disposition or any related repayment of Debt had occurred as of the first day of such period with the appropriate adjustments with respect to such acquisition or disposition being included in such unaudited pro forma calculation. 
  
 Furthermore, the Company and each of its Subsidiaries taken as a whole, will,
at all times maintain an Unencumbered Total Asset Value (as defined below) in an amount not less than 150% of the aggregate outstanding principal amount of the unsecured Debt of the Company and each of its Subsidiaries, taken as a whole. 

 
 As used herein, 
  
 “Acquired Debt” means Debt of a Person
(i) existing at the time such Person becomes a Subsidiary or (ii) assumed in connection with the acquisition of assets from such Person, in each case, other than Debt incurred in connection with, or in contemplation of, such Person
becoming a Subsidiary or such acquisition. Acquired Debt shall be deemed to be incurred on the date of the related acquisition of assets from any Person or the date the acquired Person becomes a Subsidiary. 
  
 “Annual Debt Service Charge” as of any date means
the maximum amount which is payable in any period for interest on, and original issue discount of, Debt of the Company and its Subsidiaries and the amount of dividends which are payable in respect of any Disqualified Stock (as defined below).

  

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 “Capital Stock” means, with respect to any Person, any capital stock (including
preferred stock), shares, interests, participations or other ownership interests (however designated) of such Person and any rights (other than debt securities convertible into or exchangeable for corporate stock), warrants or options to purchase
any thereof. 
  
 “Consolidated Income
Available for Debt Service” for any period means Funds from Operations (as defined below) of the Company and its Subsidiaries plus amounts which have been deducted for interest on Debt of the Company and its Subsidiaries. 
  
 “Debt” means any indebtedness of the Company, or
any Subsidiary, whether or not contingent, in respect of (without duplication) (i) borrowed money evidenced by bonds, notes, debentures or similar instruments, (ii) indebtedness secured by any mortgage, pledge, lien, charge, encumbrance or
any security interest existing on property owned by the Company or any Subsidiary, (iii) the reimbursement obligations, contingent or otherwise, in connection with any letters of credit actually issued or amounts representing the balance
deferred and unpaid of the purchase price of any property or services, except any such balance that constitutes an accrued expense or trade payable, or all conditional sale obligations or obligations under any title retention agreement,
(iv) the principal amount of all obligations of the Company or any Subsidiary with respect to redemption, repayment or other repurchase of any Disqualified Stock or (v) any lease of property by the Company or any Subsidiary as lessee which
is reflected on the Company’s consolidated balance sheet as a capitalized lease in accordance with generally accepted accounting principles to the extent, in the case of items of indebtedness under (i) through (iii) above, that any
such items (other than letters of credit) would appear as a liability on the Company’s consolidated balance sheet in accordance with generally accepted accounting principles, and also includes, to the extent not otherwise included, any
obligation of the Company or any Subsidiary to be liable for, or to pay, as obligor, guarantor or otherwise (other than for purposes of collection in the ordinary course of business or for the purposes of guaranteeing the payment of all amounts due
and owing pursuant to leases to which the Company is a party and has assigned its interest, provided that such assignee of the Company is not in default of any amounts due and owing under such leases), Debt of another Person (other than the Company
or any Subsidiary) (it being understood that Debt shall be deemed to be incurred by the Company or any Subsidiary whenever the Company or such Subsidiary shall create, assume, guarantee or otherwise become liable in respect thereof). 
  
 “Disqualified Stock” means, with respect to any
Person, any Capital Stock of such Person which by the terms of such Capital Stock (or by the terms of any security into which it is convertible or for which it is exchangeable or exercisable), upon the happening of any event or otherwise
(i) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, (ii) is convertible into or exchangeable or exercisable for Debt or Disqualified Stock or (iii) is redeemable at the option of the holder
thereof, in whole or in part, in each case on or prior to the Stated Maturity of the Notes. 
  

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 “Funds from Operations” for any period means income available to common
shareholders before depreciation and amortization of real estate assets and before extraordinary items less gain on sale of real estate. 
  
 “Total Assets” as of any date means the sum of (i) the Company’s and its Subsidiaries’ Undepreciated Real Estate
Assets and (ii) all other assets of the Company and its Subsidiaries determined in accordance with generally accepted accounting principles (but excluding goodwill). 
  
 “Undepreciated Real Estate Assets” as of any date means the cost (original cost plus capital
improvements) of real estate assets of the Company and its Subsidiaries on such date, before depreciation and amortization determined on a consolidated basis in accordance with generally accepted accounting principles. 
  
 “Unencumbered Total Asset Value” as of any date
means the sum of (i) those Undepreciated Real Estate Assets not encumbered by any mortgage, lien, charge, pledge or security interest and (ii) all other assets of the Company and each of its Subsidiaries on a consolidated basis determined
in accordance with generally accepted accounting principles (but excluding intangibles and accounts receivable), in each case which are unencumbered by any mortgage, lien, charge, pledge or security interest. 
  
 As provided in the Indenture and subject to certain limitations therein and
herein set forth, the transfer of this Note is registrable in the Security Register of the Company upon surrender of this Note for registration of transfer at the office or agency of the Company in any place where the principal of (and premium, if
any) and interest on this Note are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or by his attorney duly authorized in
writing, and thereupon one or more new Notes, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. 
  
 As provided in the Indenture and subject to certain limitations therein and herein set forth, this Note is exchangeable for
a like aggregate principal amount of Notes of different authorized denominations but otherwise having the same terms and conditions, as requested by the Holder hereof surrendering the same. 
  
 The Securities of this series are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. 
  
 No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. 
  
 Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, 

  

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and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. 
  
 The Indenture and the Notes shall be governed by and construed in accordance
with the laws of the State of New York applicable to agreements made and to be performed entirely in such State. 
  

 7Exhibit 10.2

 Exhibit 10.2 
  
 PROPERTY ACQUISITION/DISPOSITION 
 AGREEMENT 
  
 THIS AGREEMENT is
made and entered into as of the              day of                     ,
2005, by and between Apple REIT Seven, Inc., a Virginia corporation (hereinafter referred to as “Owner”), and Apple Suites Realty Group, Inc., a Virginia corporation (hereinafter referred to as “Agent”). 
  
 W I T N E S S E T H : 
  
 WHEREAS, Owner plans to conduct business as a “real estate investment
trust,” and, in connection therewith, plans to, from time to time, acquire and dispose of real property, including particularly hotels, residential apartment communities and other income-producing real estate in selected metropolitan areas of
the United States (hereinafter referred to individually as a “Property” and collectively as the “Properties”); 
  
 WHEREAS, Owner desires to use the services of Agent as a broker in connection with the acquisition and disposition of the Properties on the terms set
forth in this Agreement; and 
  
 WHEREAS, Owner and Agent desire
to enter into this Agreement for the purposes herein contained. 
  
 NOW, THEREFORE, in consideration of the promises herein contained, and for other valuable consideration, receipt of which is hereby acknowledged, the parties agree as follows: 
  
 1. Engagement of Agent as Broker for the Properties. Owner hereby engages Agent as a broker in connection with the purchase
and sale of the Properties, upon the conditions and for the term and compensation herein set forth. All or any portion of the services being performed by Agent may be contracted or subcontracted by Agent to another company, provided that such
company agrees to be bound by the terms of this Agreement. 
  
 2.
Term of Agreement; Renewal. This Agreement shall be valid for an initial term of five (5) years ending                     , 2010. Unless
either party by written notice sent to the other party at least sixty (60) days before the end of any 5-year term hereof elects not to renew this Agreement, this Agreement shall renew automatically for successive terms of five (5) years on the same
terms as contained herein. 
  
 3. Acceptance of Engagement. Agent
hereby accepts its engagement as a broker for the purchase and sale of the Properties and agrees to perform all services necessary to effectuate such purchases and sales which are customarily provided by commercial real estate brokers, and, without
limitation, Agent agrees: 
  
 a. To supervise, on
behalf of Owner, the preparation of contracts of purchase or sale for each Property, on such terms as are specified by Owner or its duly authorized 

 
representatives, and all other documents related thereto or required to effectuate such purchase or sale; 
  
 b. To coordinate the activities of, and act as liaison
between Owner and, independent professionals connected with the purchase or sale of a Property, including attorneys, accountants, investment bankers, appraisers, engineers, inspectors, lenders, if any, and others; 
  
 c. To assist Owner and its authorized representatives in
satisfying any conditions precedent to the purchase or sale of a Property, which shall include contracting on behalf of Owner with any third parties whose services are required to close any such purchase or sale; 
  
 d. To represent Owner at the closing of the purchase or sale
of a Property, to coordinate the activities of professionals and other third persons connected with such closing, and to supervise the compliance by Owner with all requirements and customary actions associated with such purchase or sale, including,
without limitation, the obtaining of property title insurance, the delivery and recordation of deeds and other instruments of conveyance, and the delivery and recordation, as required, of any documents evidencing loans obtained or made by Owner;

  
 e. Generally to act on behalf of Owner in
connection with such purchase or sale as a commercial real estate broker would customarily act with respect to such transaction, including the provision of such additional services as would normally be provided by such a person. 
  
 4. Indemnification. Owner hereby agrees to indemnify and hold harmless Agent
against and in respect of any loss, cost or expense (including reasonable investigative expenses and attorneys’ fees), judgment, award, amount paid in settlement, fine, penalty and liability of any and every kind incurred by or asserted against
Agent by reason of or in connection with the engagement of Agent hereunder, the performance by Agent of the services described herein or the occurrence or existence of any event or circumstance which results or is alleged to have resulted in death
or injury to any person or destruction of or damage to any property and any suit, action or proceeding (whether threatened, initiated or completed) by reason of the foregoing; provided, however, that no such indemnification of Agent shall be made,
and Agent shall indemnify and hold Owner harmless against, and to the extent of, any loss that a court of competent jurisdiction shall, by final adjudication, determine to have resulted from willful misconduct, gross negligence or fraud by or on the
part of Agent. 
  
 5. Compensation of Agent. 
  
 (a) Owner shall pay to Agent a real estate commission in
connection with each purchase of a Property in an amount equal to two percent (2%) of the gross purchase price of the Property (which does not include amounts budgeted for repairs and improvements), in consideration of Agent (or any person with whom
Agent subcontracts or contracts hereunder) performing the services provided for in this Agreement in connection with the purchase of the Property. In consideration of Agent (or any person with whom Agent subcontracts or contracts hereunder)
performing the services provided 

  

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for in this Agreement in connection with the sale of a Property, Owner shall pay to Agent the following: a real estate commission in connection with the sale
of a Property in an amount equal to two percent (2%) of the gross sales price of the Property, if, but only if, the sales price of the Property exceeds the sum of (A) Owner’s cost for the Property (consisting of the original purchase price plus
all capitalized costs and expenditures connected with the Property), without any reduction for depreciation, and (B) ten percent (10%) of such cost. If the person from whom Owner purchases or to whom Owner sells a Property pays any fee to Agent,
such amount shall decrease the amount of Owner’s obligation to Agent. Furthermore, Agent shall not be entitled to any real estate commission in connection with a sale of a Property by Owner to Agent or any Affiliate of Agent or the purchase of
a Property by Owner from Agent or any Affiliate of Agent, but Agent will, in such case, be entitled to payment by Owner of its direct costs in such regard. The fees and expenses provided for herein shall be payable if Owner sells or purchases a
property, sells shares in Owner or purchases shares in the owner of a property, effects a merger of Owner with another entity, or undertakes any other transaction, the purpose or effect of which is, in essence, to dispose of or purchase some or all
Properties. In any case other than an actual sale or purchase of Properties, Owner and Agent shall in good faith agree upon an allocation of purchase price to each Property which is effectively disposed of or purchased. For purposes of this
Agreement, person no. 1 is an “Affiliate” of person no. 2 if (1) person no. 1 directly or indirectly controls, is controlled by, or is under common control with, person no. 2, (2) person no. 1 owns or controls 10% or more of the voting
securities or beneficial interests of person no. 2, or (3) person no. 1 is an executive officer, director, trustee or general partner of person no. 2; further if person no. 1 is an Affiliate of person no. 2, then person no. 2 is an Affiliate of
person no. 1. Notwithstanding anything to the contrary in the definition of “Affiliate,” an Affiliate of the Agent shall be deemed to include, without limitation, any real estate investment trust or similar program (in addition to Owner)
organized by or at the direction of Mr. Glade M. Knight for so long as Mr. Knight remains a director or executive officer of such program. 
  
 (b) In the event Owner purchases, sells, conveys or otherwise transfers a Property within ninety (90) days after the expiration of this
Agreement to a person or persons with whom Agent on behalf of Owner has negotiated as a prospective purchaser or buyer of a Property during the term of this Agreement, Agent shall be deemed to have earned the compensation provided in Section 5(a)
and such compensation shall be due and payable to Agent pursuant to the terms of this Agreement; provided, however, that (i) Agent substantially performs all of the duties and obligations that it would otherwise have under this Agreement if the
Agreement had not terminated, and (ii) Agent has given written notice to Owner of the name of such purchaser or buyer prior to the expiration of the term of this Agreement. 
  
 (c) Notwithstanding anything to the contrary in the Agreement, Owner shall not be deemed to have acquired a
Property from Agent or an Affiliate if (1) Agent or an Affiliate enters into a purchase contract for a Property and then assigns the purchase contract to Owner for nominal or no consideration, or (2) Agent or an Affiliate acquires a Property as an
accommodation for Owner, and then transfers the Property to Owner at a price substantially equal to that paid by Agent or the Affiliate for the Property. In either such case, Agent shall be entitled to a real estate commission as if the Property
were acquired by Owner from a non-Affiliated seller. 
  
 6. Power
of Attorney. Owner hereby makes, constitutes and appoints Agent its true and lawful attorney-in-fact, for it and in its name, place and stead and for its use and benefit to sign, acknowledge and file all documents and agreements (other than
contracts for purchase or sale of a Property, promissory notes, mortgages, deeds of trust or other documents or instruments which would bind Owner to purchase or sell a Property, result or evidence the incurrence of debt by Owner, or encumber a
Property) necessary to perform or effect the duties and obligations of Agent under the terms of this Agreement. The foregoing power of attorney is a special power of attorney coupled with an interest. It shall terminate when this Agreement
terminates as provided herein. 
  
 7. Relationship of Parties. The
parties agree and acknowledge that Agent is and shall operate as an independent contractor in performing its duties under this Agreement, and shall not be deemed an employee of Owner. 
  

 3 

 8. Entire Agreement. This Agreement represents the entire understanding between the parties hereto with
regard to the transactions described herein and may only be amended by a written instrument signed by the party against whom enforcement is sought. 
  
 9. Governing Law. This Agreement shall be construed in accordance with and be governed by the laws of the Commonwealth of Virginia without regard to
conflicts of law. 
  
 10. Exclusion of Third Party Beneficiary.
This Agreement is not intended for the benefit of any person or entity who is not a party to this Agreement, and no such person or entity shall have any rights in connection with this Agreement, whether for enforcement or otherwise. 
  
 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written. 
  

			
	 OWNER:

	
	 APPLE REIT SEVEN, INC.,
a Virginia corporation

		
	By:	 	 
		
	 Title:
	 	 
	
	 AGENT:

	
	 APPLE SUITES REALTY GROUP, INC.,
a Virginia corporation

		
	By:	 	 
		
	 Title:
	 	 

  

 4

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