Document:

Exhibit 10.45

 EXECUTION VERSION

Scottsdale, AZ (HGI)

PURCHASE CONTRACT

between

SCOTTSDALE LODGING INVESTORS, LLC
(“SELLER”)

AND

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

Dated: July 13, 2011

TABLE OF CONTENTS

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 Page

 
	
  

 	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 
	
 ARTICLE I DEFINED TERMS

 	
  

 	
 1

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 1.1

 	
 Definitions

 	
  

 	
 1

 
	
  

 	
  

 	
  

 	
  

 	
  

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

 	
  

 	
 7

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 2.1

 	
 Purchase and Sale

 	
  

 	
 7

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 2.2

 	
 Purchase Price

 	
  

 	
 7

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 2.3

 	
 Allocation

 	
  

 	
 7

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 2.4

 	
 Payment

 	
  

 	
 7

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 2.5

 	
 Earnest Money Deposit

 	
  

 	
 7

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE III REVIEW PERIOD

 	
  

 	
 8

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 3.1

 	
 Review Period

 	
  

 	
 8

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 3.2

 	
 Due Diligence Examination

 	
  

 	
 9

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 3.3

 	
 Restoration

 	
  

 	
 9

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 3.4

 	
 Seller Exhibits

 	
  

 	
 10

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE IV SURVEY AND TITLE APPROVAL

 	
  

 	
 10

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 4.1

 	
 Survey

 	
  

 	
 10

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 4.2

 	
 Title

 	
  

 	
 10

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 4.3

 	
 Survey or Title Objections

 	
  

 	
 10

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 4.4

 	
 Existing Loan

 	
  

 	
 11

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE V MANAGEMENT AGREEMENT AND FRANCHISE
 AGREEMENT

 	
  

 	
 11

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE VI BROKERS

 	
  

 	
 12

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE VII REPRESENTATIONS, WARRANTIES AND
 COVENANTS

 	
  

 	
 12

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 7.1

 	
 Seller’s Representations, Warranties and Covenants

 	
  

 	
 12

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 7.2

 	
 Buyer’s Representations, Warranties and Covenants

 	
  

 	
 16

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 7.3

 	
 Survival

 	
  

 	
 16

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE VIII ADDITIONAL COVENANTS

 	
  

 	
 17

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 8.1

 	
 Subsequent Developments

 	
  

 	
 17

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 8.2

 	
 Operations

 	
  

 	
 17

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 8.3

 	
 Third Party Consents

 	
  

 	
 18

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 8.4

 	
 Employees

 	
  

 	
 18

 

i

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 8.5

 	
 Estoppel Certificates

 	
  

 	
 18

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 8.6

 	
 Access to Financial Information

 	
  

 	
 19

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 8.7

 	
 Bulk Sales

 	
  

 	
 19

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 8.8

 	
 Indemnification

 	
  

 	
 19

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 8.9

 	
 Escrow Funds

 	
  

 	
 22

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 8.10

 	
 Liquor Licenses

 	
  

 	
 22

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE IX CONDITIONS FOR CLOSING

 	
  

 	
 22

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 9.1

 	
 Buyer’s Conditions for Closing

 	
  

 	
 22

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 9.2

 	
 Seller’s Conditions for Closing

 	
  

 	
 23

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE X CLOSING AND CONVEYANCE

 	
  

 	
 24

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 10.1

 	
 Closing

 	
  

 	
 24

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 10.2

 	
 Deliveries of Seller

 	
  

 	
 24

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 10.3

 	
 Buyer’s Deliveries

 	
  

 	
 26

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE XI COSTS

 	
  

 	
 27

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 11.1

 	
 Seller’s Costs

 	
  

 	
 27

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 11.2

 	
 Buyer’s Costs

 	
  

 	
 27

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE XII ADJUSTMENTS

 	
  

 	
 27

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 12.1

 	
 Adjustments

 	
  

 	
 27

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 12.2

 	
 Reconciliation and Final Payment

 	
  

 	
 29

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 12.3

 	
 Employees

 	
  

 	
 29

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE XIII CASUALTY AND CONDEMNATION

 	
  

 	
 29

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 13.1

 	
 Risk of Loss; Notice

 	
  

 	
 29

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 13.2

 	
 Buyer’s Termination Right

 	
  

 	
 30

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 13.3

 	
 Procedure for Closing

 	
  

 	
 30

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE XIV DEFAULT REMEDIES

 	
  

 	
 30

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 14.1

 	
 Buyer Default

 	
  

 	
 30

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 14.2

 	
 Seller Default

 	
  

 	
 30

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 14.3

 	
 Attorney’s Fees

 	
  

 	
 31

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE XV NOTICES

 	
  

 	
 31

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE XVI MISCELLANEOUS

 	
  

 	
 32

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 16.1

 	
 Performance

 	
  

 	
 32

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 16.2

 	
 Binding Effect; Assignment

 	
  

 	
 32

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 16.3

 	
 Entire Agreement

 	
  

 	
 32

 

ii

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 16.4

 	
 Governing Law

 	
  

 	
 32

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 16.5

 	
 Captions

 	
  

 	
 32

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 16.6

 	
 Confidentiality

 	
  

 	
 32

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 16.7

 	
 Closing Documents

 	
  

 	
 33

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 16.8

 	
 Counterparts

 	
  

 	
 33

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 16.9

 	
 Severability

 	
  

 	
 33

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 16.10

 	
 Interpretation

 	
  

 	
 33

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 16.11

 	
 Further Acts

 	
  

 	
 33

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 16.12

 	
 Joint and Several Obligations

 	
  

 	
 33

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 16.13

 	
 Notice of Proposed Listing

 	
  

 	
 33

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 16.14

 	
 Section 1031 Exchange

 	
  

 	
 34

 

	
  

 	
  

 
	
 SCHEDULES:

 	
  

 
	
  

 	
  

 
	
 Schedule 2.3

 	
 Allocation

 
	
 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

 
	
 Exhibit H

 	
 Existing Loan Information

 

iii

PURCHASE CONTRACT

          This
PURCHASE CONTRACT (this “Contract”) is made and entered into as
of July 11, 2011, by and between SCOTTSDALE LODGING INVESTORS, LLC, a
Wisconsin limited liability company (“Seller”) with a principal office at
1600 Aspen Commons, Suite 200, Middleton, WI 53562 and 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 Scottsdale North/Perimeter Center, located at 8550 East
Princess Drive, Scottsdale, Arizona 85255, containing, among other things, 122 guest rooms (the “Hotel”)
identified in 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.

          “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 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,
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 “Deposits” shall
exclude (i) Reserves (as defined herein), (ii) 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, (iii) utility deposits, and (iv) any reserves
for replacement of FF&E and for capital repairs and/or improvements.

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

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

          “Environmental
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.

          “Existing
Lender” shall mean the lender identified on Exhibit H.

          “Existing
Loan” shall mean the loan identified on Exhibit H.

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 mean North Central Management, 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 Inns 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 (but
excluding room reservations), “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, but excluding the Existing Franchise
Agreement.

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

          “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, Reserves, 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

4

any of the foregoing and (ii) any and all of the
following that relate to or affect in any way the design, construction, ownership,
use, occupancy, leasing, maintenance, service or operation of the Real
Property, FF&E, Supplies, Leases, Deposits or Records: Service Contracts,
Warranties, Licenses, Tradenames, Contracts, Plans and Specs and FF&E
Lease. 

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

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

          “Records”
shall mean all books, records, promotional material, guest history information
(other than any such information owned by the Existing Manager or Franchisor,
or any such information related to any other hotels owned by Affiliates of
Seller), marketing and leasing material (including but not limited to any such
records, data, information, and material in the form of computerized files
located at the Hotel), market studies prepared in connection with Seller’s
current annual plan (if any) and other materials, information, data, or other
documents or records (including, without limitation, all documentation relating
to 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 operation of the Hotel) all to the extent the same are
in Seller’s possession or control (or Seller has reasonably access or may
obtain the same from the Existing Manager), and 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 copies of the final plans and specifications
for the Hotel, but excluding all such materials and documents owned by
Franchisor and all such materials and documents that constitute source
documents for Seller’s financial and tax records.

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

          “Reserves”
shall have the meaning set forth in Section 12.1(l).

          “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

5

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.

          “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.

6

ARTICLE
II

PURCHASE AND SALE; PURCHASE PRICE; PAYMENT;

EARNEST MONEY DEPOSIT

          2.1
Purchase and Sale. Seller agrees to sell and convey to Buyer or its 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 (other than
the Existing Loan), 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 SIXTEEN MILLION THREE HUNDRED
THOUSAND and No/100 Dollars ($16,300,000.00) (the “Purchase Price”), plus
the entire amount of all Reserves as of the Closing Date. 

          2.3
Allocation. The allocation among Real Property, Personal Property and
intangible property shall be as set forth on Schedule 2.3 attached hereto. 

          2.4
Payment. The portion of the Purchase Price, less the outstanding principal
balance of the Existing Loan, less the Earnest Money Deposit and interest
earned thereon, if any, which Buyer elects to have applied against the Purchase
Price (as provided below), shall be paid to Seller by wire transfer, on the
Closing Date. 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 and the Initial Deposit and Additional Deposit shall then be
non-refundable to Buyer except as otherwise provided herein. The Initial
Deposit and the Additional Deposit, and all interest accrued thereon, shall
hereinafter be referred to as the “Earnest Money Deposit.”

7

                    (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.

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 (or cause to be delivered
to Buyer) for Buyer’s review, to the extent not previously delivered to Buyer,
true, correct and complete copies of the following to the extent Seller has
such in its possession or control, together with all amendments, modifications,
renewals or extensions thereof: 

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

                    (b)
Operating statements for the Hotel, for the current year to date and each of
the three (3) prior fiscal years, all in a consolidated month-by-month format
by year (the “Financial Statements”).
Seller also agrees to provide to Buyer’s auditor 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, but not including any agreements for real
estate

8

commissions, brokerage fees, finder’s fees or other
compensation payable by Seller in connection therewith;

                    (f)
All notices received from governmental authorities in connection with the 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;

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

                    (h)
All documents related to the Existing Loan and contact information for the
servicers of the Existing Loan.

          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, at Buyer’s request, 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, to the extent Seller has such in its possession or
control. 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
(and all copies thereof made by 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 mutually agreed upon
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 (with the prior written consent of Seller) 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 and agrees not to view any rooms occupied at the
time of such visit by guests of the Hotel. 

          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 shall promptly 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.  

9

          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. 

ARTICLE
IV

SURVEY AND TITLE APPROVAL

          4.1
Survey. Within two (2) Business Days following the date of this Contract,
Seller (to the extent Seller has such in its possession or control) will
deliver 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. Within two (2) Business Days following the date of this Contract, Seller
will deliver to Buyer its existing title insurance policy, including copies of
all documents referred to therein (to the extent Seller has the same in its
possession or control), for the Real Property. Buyer’s obligations under this
Contract are conditioned upon Buyer being able to obtain for the Property (i) a
Commitment for Title Insurance (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) Business 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
fails to notify Buyer of its election 

10

within such five (5) Business Day period, Seller shall
be deemed to have elected to cure such item. 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 (in which event such
items shall become “Permitted Exceptions”) 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 Exceptions include
liens (other than the Existing Loan), 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 resulting from an
act or omission of Seller (“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. 

          4.4
Existing Loan. Seller represents and warrants that the Existing Loan is the
only indebtedness secured by the Property and that the information contained on
Exhibit H is true, correct and complete. Neither Seller nor any
guarantor is in default or breach of any provisions of the documents evidencing
the Existing Loan and no event or circumstance has occurred or exists which but
for the passage of time would be a default under the Existing Loan. At Closing,
Buyer shall assume the Existing Loan and Buyer shall pay all administrative
fees, assumption fees and underwriting costs, if any, charged by the Existing
Lender in connection with said assumption. Seller shall cooperate with Buyer in
Buyer’s efforts related to the assumption of the Existing Loan including
executing such applications, certificates and other documents required by the
Lender and providing any information required by the Lender in connection with
the assumption of the Existing Loan. Seller shall be responsible for the costs
of its attorneys, and Buyer shall be responsible for the costs of its
attorneys. In addition, Buyer shall be responsible for the cost, if any, of
Existing Lender’s attorneys, related to the assumption of the Existing Loan.  

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
including, without limitation, a franchise term of not less than ten years.
Seller shall be responsible for paying all costs related to the termination of
the Existing Management Agreement. Buyer shall be responsible for

11

paying all reasonable and actual costs of the
Franchisor related to the termination of the Existing Franchise Agreement.
Seller shall use best efforts to promptly provide all information required by
the Franchisor in connection with the New Franchise Agreement, and Seller and
Buyer shall diligently pursue obtaining each the same. Buyer covenants and
agrees to submit a complete franchise application, including all required
deposits, to Franchisor for the New Franchise Agreement no later than the end
of the Review Period, and to provide Seller evidence of submission on or before
the expiration of the Review Period in the form of a written receipt from
Franchisor of the franchise deposit and a complete application. In the event
Buyer fails to comply with the foregoing, this condition shall be deemed waived
by Buyer. 

ARTICLE
VI

BROKERS

          Seller
and Buyer each represents and warrants to the other that it has not engaged any
broker, finder or other party in connection with the transaction contemplated
by this Contract, except for Hodges Ward Elliott (Bill Hodges) (the “Broker”),
which Broker shall be entitled to a commission from Seller upon the sale of the
Property under a separate agreement with Seller. Buyer and Seller each agree to
save and hold the other harmless from any and all losses, damages, liabilities,
costs and expenses (including, without limitation, attorneys’ fees) involving
claims made by any other agent, broker, or other person by or through the acts
of Buyer or Seller, respectively, in connection with this transaction.

ARTICLE
VII

REPRESENTATIONS, WARRANTIES AND COVENANTS

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

                    (a)
Authority; No Conflicts. Seller is a limited liability company duly
formed, validly existing and in good standing in the State of Wisconsin. Seller
has obtained all necessary consents to enter into and perform this Contract
(except the consent and approval of the Existing Lender to the assumption of
the Existing Loan as referenced below) 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 subject to the consent of
Seller’s members per Exhibit D. 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; provided, however, the assumption of the
Existing Loan by Buyer is subject to the consent and approval of the Existing
Lender.

12

                    (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 (or if Exhibit C is not
completed as of the date of signing of this Contract, the same will be
delivered within two (2) Business Days following the date of this Contract).
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 material 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 actual 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”) or related to the
business or assets of the Hotel, except as set forth on Exhibit F
attached hereto and incorporated herein by reference, (ii) special assessments
or extraordinary taxes except as set forth in the Title Commitment or (iii)
pending or threatened condemnation or eminent domain proceedings which would
affect the Property or any part thereof. There are no: pending arbitration
proceedings or unsatisfied arbitration awards, or judicial proceedings or
orders respecting awards, which might become a lien on the Property or any
portion thereof, pending unfair labor practice charges or complaints,
unsatisfied unfair labor practice orders or judicial proceedings or orders with
respect thereto, pending charges or complaints with or by city, state or
federal civil or human rights agencies, unremedied orders by such agencies or
judicial proceedings or orders with respect to obligations under city, state or
federal civil or human rights or antidiscrimination laws or executive orders
affecting the Hotel, or other pending, actual or, to Seller’s knowledge,
threatened litigation claims, charges, complaints, petitions or unsatisfied
orders by or before any administrative agency or court which affect the Hotel
or might become a lien on the Hotel (collectively, the “Pending Claims”).

13

                    (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.

                    (g)
Title and Liens. Except for Seller Liens to be released at Closing, to
Seller’s actual knowledge, Seller has good and marketable fee simple absolute
title to the Real Property, subject only to the Permitted Exceptions. Except
for the FF&E subject to the FF&E Leases and any applicable Permitted
Exceptions, 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,

14

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 actual
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 actual 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 actual knowledge requires any approval of a governmental authority for
transfer of the Property except as set forth in Exhibit D.

                    (j)
Financial Statements. Seller will deliver the Financial Statements, each
of which is, to Seller’s actual knowledge, complete and accurate in all
material respects and 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.

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

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

                    (m)
Existing Management and Franchise Agreements. 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, and as listed on Exhibits C and D, attached. The Improvements
materially comply with, and the Hotel is being operated materially 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

15

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) 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.

 
	
  

 	
  

 
	
  

 	
 Notwithstanding the foregoing, Buyer acknowledges
 that it is being given a full opportunity to completely inspect the Property,
 the operation thereof, and the financial information in connection therewith.
 Therefore, except as specifically provided in this Contract, Seller is
 conveying and Buyer is accepting the Property in strictly “AS IS” condition
 with all faults and, except for the specific warranties and representations
 provided in this Contract, Seller is not making any further warranties or representations
 express or implied, including, without limitation, any warranty of
 merchantability or fitness for a particular purpose. Buyer acknowledges that,
 as of the Closing Date, Buyer will be familiar with the Property and will
 have made such independent investigations as Buyer deems necessary or
 appropriate concerning 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 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.

          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.  

16

ARTICLE VIII

ADDITIONAL COVENANTS

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

          8.2
Operations. From and after the date hereof through the Closing on the Property,
Seller shall 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 employees at
the Hotel and to preserve its relations with guests, suppliers and other
parties doing business with Seller with respect to the Hotel, (ii) accepting
booking contracts for the use of the Hotel’s facilities and retaining such
bookings in accordance with the terms of the Existing Management Agreement and
the Existing Franchise Agreement, (iii) maintaining the current level of
advertising and other promotional activities for the Hotel’s facilities, (iv)
maintaining the present level of insurance with respect to the Hotel in full
force and effect until the Closing Date 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 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 state of
repair and condition materially the same as it currently is, 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 

17

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

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

                    (g)
Pay or cause to be paid all taxes, assessments and other impositions levied or
assessed on the Hotel or any part thereof prior to the delinquency date (unless
the same are in good faith being contested), and comply in all material
respects with all federal, state, and municipal laws, ordinances, regulations
and orders relating to the Hotel;

                    (h)
Not sell or assign, or enter into any agreement to sell or assign, or create or
permit to exist any lien or encumbrance (other than a Permitted Exception) on,
the Property or any portion thereof; 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
(except for costs incurred in connection with assuming the Existing Loan, which
shall be Buyer’s responsibility as provided in Section 4.4), use best efforts
to (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. At a mutually agreed upon time after the expiration of the Review
Period and prior to Closing, Buyer and its employees, representatives and
agents shall, provided they are accompanied by Seller’s representatives if
Seller so desires, 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. 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  

18

material
FF&E Lease, and (iii) each declarant, property owners’ association or
similar entity having 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 material and
uncured defaults by the Property as to use, construction or otherwise and no
uncontested 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 (at no out-of-pocket expense to Seller or such
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:

	
  

 	
  

 
	
  

 	
           (i)
 any claim made or asserted against Buyer or any of the Property by a creditor
 of Seller as a direct result of any act or omission 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;

 

19

	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
           (iv)
 any claim made or asserted by an employee of Seller arising directly 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 or on behalf of Buyer of its business at the
 Hotel or the ownership, use or operation of the Property after the Closing;
 and

 
	
  

 	
  

 
	
  

 	
           (iii)
 any liability or obligation of Seller 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 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 

 

20

	
  

 	
 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. 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 of its books and records
 relating to such Legal Action and (z) the parties shall render to each other
 such assistance as may be reasonably required in order to ensure the proper
 and adequate defense of such Legal Action.

 
	
  

 	
  

 
	
  

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

 

21

	
  

 	
  

 
	
  

 	
 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 One Hundred Fifty Thousand and No/100 Dollars ($150,000.00) (the “Escrow Funds”)
which shall be withheld from the Purchase Price payable to Seller and shall be
deposited for a period of one hundred eighty (180) days 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 one hundred eighty (180) day period, the Escrow
Funds deposited by Seller shall be released to Seller. 

          8.10
Liquor Licenses. As a condition to Buyer’s obligations under this Contract, (i)
the Manager or an Affiliate thereof approved by Buyer shall have or shall have
obtained all liquor licenses and alcoholic beverage licenses necessary or
desirable to operate any restaurants, bars and lounges presently located within
the Hotel (collectively, the “Liquor Licenses”) and, in the case of
an Affiliate of the Manager, the Hotel has the right to use such Liquor
License, (ii) if permitted under the laws of the jurisdiction in which the
Hotel is located, the Manager shall execute and file any and all necessary
forms, applications and other documents (and Seller shall cooperate with the
Manager in filing such forms, applications and other documents) (including
interim or transition agreements) with the appropriate liquor and alcoholic
beverage authorities so that the Liquor Licenses remain in full force and
effect upon completion of Closing. Notwithstanding the foregoing, Buyer
covenants and agrees to submit a complete application for the Liquor Licenses
with the appropriate liquor and alcoholic beverage authorities prior to the end
of the Review Period, and to provide Seller evidence of submission on or
before the expiration of the Review Period in the form of a written receipt
from such liquor and alcoholic beverage authorities. In the event Buyer fails
to comply with the foregoing and has not terminated this Contract as provided
in Section 9.1, this condition shall be deemed waived by Buyer. 

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. 

22

                    (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.

                    (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)
All Liquor Licenses shall be in full force and effect and shall remain in full
force and effect following Closing and shall have been or shall be transferred
to, or new Liquor Licenses issued to, the Manager or an Affiliate thereof
approved by Buyer at or as of Closing, and Buyer shall have received
satisfactory evidence thereof. 

                    (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 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. 

                    (i)
The Existing Lender shall have approved and authorized closing of the
assumption of the Existing Loan by Buyer.

          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 delivered to Seller and each of the parties
shall be relieved from further liability to the other, except as otherwise
expressly provided herein. 

23

                    (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)
Seller shall have obtained the necessary consent of its members to consummate
the transaction described herein.

                    (e)
The Existing Lender shall have approved and authorized closing of the
assumption of the Existing Loan by Buyer and documents indicating same have
been executed.

                    (f)
The Existing Lender shall have terminated and cancelled any prospective personal
liability owed to the Existing Lender by David A. Lenz Investments, LLC, a
Wisconsin limited liability company, pursuant to that certain Guaranty of
Recourse Obligations of Borrower and that certain Environmental Indemnity
Agreement each dated as of May 16, 2006. For avoidance of doubt, it shall not
be a condition to closing that Existing Lender release David A. Lenz
Investments, LLC from any personal liability arising out of any loan document
for any period prior to Closing.

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 or
(c) the date that Existing Lender has unconditionally committed to close on the
assumption of the Existing Loan by, and consent to the transfer of the Property
to, Buyer, provided in any case that all conditions to Closing by Buyer and
Seller 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. In no event shall the
Closing Date be later than March 30, 2012. 

          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): 

24

                    (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)
Affidavit of Value. An Affidavit of Value indicating the allocation of
the Purchase Price.

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

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

                    (e)
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.

                    (f)
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.

                    (g)
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.

                    (h)
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.

                    (i)
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.

                    (j)
Authority Documents. Certified copy of resolutions of the Members 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 

25

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.

                    (k)
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.

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

                    (m)
Loan Assumption Documents. Documents required to be signed by Seller
evidencing the assumption of the Existing Loan by Buyer. 

                    (n)
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.

                    (d)
Loan Assumption Documents. Documents required to be signed by Buyer
evidencing the assumption of the Existing Loan by Buyer. 

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

26

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 the Property (other than the Existing Loan),
and other than as provided in Section 4.4. 

          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 cooperate with Manager
to mutually agree and 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 

27

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. For convenience of the parties, Buyer agrees to purchase the
daily cash account maintained at the Hotel. 

                    (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, 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 but not
including the Closing Date shall be retained by Seller and promptly allocated
to Seller and evidence thereof shall be provided to Buyer upon request, 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.

28

                    (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.

                    (k)
Existing Loan Interest. Interest on the outstanding principal balance of
the Existing Loan shall be prorated between Seller and Buyer as of the Closing
Date with interest up to and including the day preceding the Closing Date being
allocated to Seller. If interest is paid to the Existing Lender in arrears,
then Seller shall credit Buyer with the interest payment for the month in which
Closing occurs.

                    (l)
Reserves. Buyer shall reimburse Seller for the balance in any reserves
and escrows maintained by the Existing Lender and related to the Property (but
which are the property of Seller and will be transferred to Buyer hereunder)
including, but not limited to, any replacement reserve escrow, real estate tax
escrow, insurance escrow and tenant improvement/leasing escrow together with
all interest earned thereon (the “Reserves”).

          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 ninety (90) 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. Buyer shall cause the Manager to offer employment to all persons who
are employees of the Hotel as of the Closing Date, except that Buyer agrees
that Seller and/or the Existing Manager desire to retain the existing general
manager of the Hotel. 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 “WARN Act”), 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 remain an
obligation of Seller, to be paid by Seller in accordance with its typical
policies.  

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  

29

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 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.  

ARTICLE XIV

DEFAULT REMEDIES

          14.1
Buyer Default. If Buyer defaults under this Contract after the Review Period or
fails to deliver the full Purchase Price (plus Reserves) on the Closing Date if
such failure is in fact a breach of Buyer’s obligations, and such default
continues for ten (10) days following written notice from Seller (provided that
no such notice shall be required for a failure by Buyer to be present at
Closing), then at Seller’s election by written notice to Buyer, this Contract
shall be terminated and of no effect, in which event the Earnest Money Deposit,
including any interest thereon, shall be paid to and retained by the Seller as
Seller’s sole and exclusive remedy hereunder, and as liquidated damages for
Buyer’s default or failure to close, and both Buyer and Seller shall thereupon
be released from all obligations hereunder. In no event shall any such default
result in a Closing Date on a day other than as described in Section 10.1. 

          14.2
Seller Default. If Seller defaults under this Contract, and such default
continues for ten (10) days following written notice from Buyer (provided that
no such notice shall be required for a failure by Seller to be present at
Closing), Buyer may elect, as Buyer’s sole and exclusive remedy, either (i) to
terminate this Contract by written notice to Seller delivered to that  

30

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 and costs associated with the assumption of the Existing Loan (not to
exceed $75,000) and thereafter both the Buyer and Seller shall thereupon be
released from all obligations with respect to this Contract, except as
otherwise expressly provided herein; or (ii) to treat this Contract as being in
full force and effect by written notice 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

 

31

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 If to
 Seller:

 	
  

 	
 Scottsdale
 Lodging Investors, LLC

 1600 Aspen Commons, Suite 200

 Middleton, WI 53562

 Attn: Jane Braatz

 Fax No.: (608) 836-6399

 Email: jbraatz@ncghotels.com

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 with a copy
 to:

 	
  

 	
 Reinhart
 Boerner Van Deuren s.c.

 22 East Mifflin Street, Suite 600

 Madison, WI 53703

 Attn: Harvey Temkin

 Fax No.: (608) 229-2100

 Email: htemkin@reinhartlaw.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. In the event the date upon
which an action is to occur or a time period is to commence or expire, as the
case may be, is not a Business Day, then the time for which such action is to
occur or period is to commence or expire shall automatically be extended until
the next Business Day. 

          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 Arizona (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, financial and tax counsel and lender, Buyer’s consultants and
agents, Seller’s 

32

employees at
the Hotel, the Manager, the Existing Manager, the Franchisor and the Title
Company and except as necessitated to obtain Third Party Consents or 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 five (5)-mile radius of the Hotel (any
such other hotel property being referred to as an “Other Property”),
Seller shall promptly 

33

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

          16.14
Section 1031 Exchange. Seller or Buyer (the “Initiating Party”) may
structure this transaction as a like-kind exchange under Internal Revenue Code
Section 1031 at the Initiating Party’s sole cost and expense. The other
party shall reasonably cooperate therein, provided that such party shall incur
no costs, expenses, or liabilities in connection with such exchange, nor shall
the Closing Date be delayed on account thereof. The Initiating Party shall
indemnify, defend, and hold the other party harmless therefrom, and such other
party shall not be required to take title to or contract for purchase of any
other property. If the Initiating Party uses a qualified intermediary to
effectuate such an exchange, any assignment of the rights or obligations of the
Initiating Party hereunder shall not relieve, release, or absolve the
Initiating Party of any of its obligations to the other party.

34

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

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 SELLER:

 
	
  

 	
  

 
	
  

 	
 SCOTTSDALE
 LODGING INVESTORS, LLC, a

 Wisconsin limited liability company

 
	
  

 	
  

 
	
  

 	
 By: 

 	
 /s/ David A.
 Lenz

 	
  

 
	
  

 	
  

 	

 

 	
  

 
	
  

 	
 Name: David
 A. Lenz

 
	
  

 	
 Title:
 Member of David A. Lenz Investments, LLC,

 Managing Member

 
	
  

 	
  

 
	
  

 	
 BUYER:

 
	
  

 	
  

 
	
  

 	
 APPLE TEN
 HOSPITALITY OWNERSHIP, INC.,

 a Virginia corporation

 
	
  

 	
  

 
	
  

 	
 By: /s/
 Justin Knight 

 
	
  

 	
  

 	

 

 	
  

 
	
  

 	
 Name: Justin
 Knight

 
	
  

 	
 Title:
 President

 

35

EXHIBIT
A

LEGAL
DESCRIPTION OF LAND

A-1

EXHIBIT
B

LIST
OF FF&E

B-1

EXHIBIT C

LIST OF HOTEL
CONTRACTS

C-1

EXHIBIT
D

CONSENTS
AND APPROVALS

	
  

 	
  

 
	
 A.

 	
 Consents
 Under Hotel Contracts

 
	
  

 	
  

 
	
 B.

 	
 Consents
 Under Other Contracts

 
	
  

 	
  

 
	
 C.

 	
 Governmental
 Approvals and Consents

 
	
  

 	
  

 
	
 D.

 	
 The Liquor
 License that Seller currently has in connection with its operation of the
 Hotel is not transferable or assignable to Buyer.

 

D-1

EXHIBIT
E

ENVIRONMENTAL
REPORTS

Report on
Phase I Environmental Site Assessment prepared by Speedie and Associates for
The Scottsdale Land Trust Limited Partnership dated October 30, 1995

E-1

EXHIBIT
F

CLAIMS
OR LITIGATION PENDING

A. Open
employment claim for disability discrimination filed by terminated team member
in March 2011; charged filed with the Civil Rights Division, Office of the
Arizona Attorney General.

F-1

EXHIBIT
G

ESCROW
AGREEMENT

          THIS
ESCROW AGREEMENT (this “Agreement”) made the ___ day of
_______, 2011 by and among SCOTTSDALE LODGING INVESTORS, LLC, a Wisconsin
limited liability company (“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 and Seller stating that
Buyer has elected to terminate the Contract pursuant to Section 3.1. If Buyer
does not elect to terminate the Contract prior to the expiration of the Review
Period, Buyer agrees to deposit the Additional Deposit per Section 2.5(a)
of the Contract.

                              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 

-i-

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 ten (10) 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 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 ten (10) 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.

-ii-

                              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.

                    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 ten (10) days’ prior written notice to each of the Parties hereto.
The Parties hereto will thereupon jointly designate a successor escrow agent hereunder
within said ten (10) 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 interpleader, 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:

-iii-

	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 If addressed
 to Seller, to:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Scottsdale
 Lodging Investors, LLC

 
	
  

 	
  

 	
 1600 Aspen
 Commons, Suite 200

 
	
  

 	
  

 	
 Middleton,
 WI 53562

 
	
  

 	
  

 	
 Attn: Jane
 Braatz

 
	
  

 	
  

 	
 Fax No.:
 (608) 836-6399

 
	
  

 	
  

 	
 Email: jbraatz@ncghotels.com

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 with a copy
 to:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Reinhart
 Boerner Van Deuren s.c.

 
	
  

 	
  

 	
 22 East
 Mifflin Street, Suite 600

 
	
  

 	
  

 	
 Madison, WI
 53703

 
	
  

 	
  

 	
 Attn: Harvey
 Temkin

 
	
  

 	
  

 	
 Fax No.:
 (608) 229-2100

 
	
  

 	
  

 	
 Email: htemkin@reinhartlaw.com

 
	
  

 	
  

 	
  

 
	
  

 	
 (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 REIT
 Ten, Inc.

 
	
  

 	
  

 	
 814 E. Main
 Street

 
	
  

 	
  

 	
 Richmond,
 Virginia 23219

 
	
  

 	
  

 	
 Attn: Legal
 Dept.

 
	
  

 	
  

 	
 Fax No.:
 (804) 727-6349

 
	
  

 	
  

 	
  

 
	
  

 	
 (iii)

 	
 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.

-iv-

                    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:

 
	
  

 	
  

 	
  

 
	
  

 	
 SCOTTSDALE
 LODGING INVESTORS, LLC

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 
	
  

 	
  

 	

 

 	
  

 
	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	

 

 	
  

 
	
  

 	
 Title:

 	
  

 
	
  

 	
  

 	

 

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 BUYER:

 
	
  

 	
  

 	
  

 
	
  

 	
 APPLE TEN
 HOSPITALITY OWNERSHIP, INC.

 
	
  

 	
  

 	
  

 
	
  

 	
 By: 

 	
  

 
	
  

 	
  

 	

 

 	
  

 
	
  

 	
 Name: 

 	
  

 
	
  

 	
  

 	

 

 	
  

 
	
  

 	
 Title: 

 	
  

 
	
  

 	
  

 	

 

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 ESCROW AGENT:

 
	
  

 	
  

 	
  

 
	
  

 	
 CHICAGO
 TITLE COMPANY

 
	
  

 	
  

 	
  

 
	
  

 	
 By: 

 	
  

 
	
  

 	
  

 	

 

 	
  

 
	
  

 	
 Name: 

 	
  

 
	
  

 	
  

 	

 

 	
  

 
	
  

 	
 Title: 

 
	
  

 	
  

 	

 

 	
  

 

-vi-

Schedule
2.3

Allocation

	
  

 	
  

 	
  

 	
  

 
	
 Land:

 	
  

 	
 $

 	
 12,370,600

 
	
 Building:

 	
  

 	
 $

 	
 439,200

 
	
 Personal Property:

 	
  

 	
 $

 	
 3,490,200

 
	
  

 	
  

 	
  

 	
  

 
	
 Total:

 	
  

 	
 $

 	
 16,300,000

 

-vii-

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 3
 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 3 years)

 	
  

 	
  

 	
  

 	
  

 
	
 10

 	
  

 	
 Personal
 Property Tax Bills (last 3 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 FF&E Leases

 	
  

 	
  

 	
  

 	
  

 
	
 16

 	
  

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

 	
  

 	
  

 	
  

 	
  

 
	
 17

 	
  

 	
 Vehicle
 Title/Leases

 	
  

 	
  

 	
  

 	
  

 
	
 18

 	
  

 	
 Copies and
 Schedules of all Warranties

 	
  

 	
  

 	
  

 	
  

 

G-1

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 Date

 Sent

 	
  

 	
 Comments

 
	
  

 	
  

 	
  

 	
  

 	

 

 	
  

 	

 

 
	
 19

 	
  

 	
 Most current
 Franchise Property Improvement Plan or QA Assessment

 	
  

 	
  

 	
  

 	
  

 
	
 20

 	
  

 	
 Copies of
 all Licenses, including Liquor License

 	
  

 	
  

 	
  

 	
  

 
	
 21

 	
  

 	
 Certificate
 of Occupancy

 	
  

 	
  

 	
  

 	
  

 
	
 22

 	
  

 	
 Most Recent
 Property Payroll

 	
  

 	
  

 	
  

 	
  

 
	
 23

 	
  

 	
 Copy of
 Employment Contracts, if any

 	
  

 	
  

 	
  

 	
  

 
	
 24

 	
  

 	
 Construction
 Plans & Specs (electronically if available)

 	
  

 	
  

 	
  

 	
  

 
	
 25

 	
  

 	
 Structural
 Engineering Audit

 	
  

 	
  

 	
  

 	
  

 
	
 26

 	
  

 	
 Environmental
 Site Assessment (Phase I)

 	
  

 	
  

 	
  

 	
  

 
	
 27

 	
  

 	
 Property
 Condition Report

 	
  

 	
  

 	
  

 	
  

 
	
 28

 	
  

 	
 Schedule of
 Utility Providers and Utility Deposits

 	
  

 	
  

 	
  

 	
  

 
	
 29

 	
  

 	
 Copies of
 Utility Bills (previous 3 months)

 	
  

 	
  

 	
  

 	
  

 
	
 30

 	
  

 	
 Zoning,
 compliance, and violation docs

 	
  

 	
  

 	
  

 	
  

 
	
 31

 	
  

 	
 Title
 Insurance Commitment, Title Search or Title Certificate

 	
  

 	
  

 	
  

 	
  

 
	
 32

 	
  

 	
 Copies of
 Title Exceptions

 	
  

 	
  

 	
  

 	
  

 
	
 33

 	
  

 	
 ALTA Survey

 	
  

 	
  

 	
  

 	
  

 
	
 34

 	
  

 	
 Service
 Contract Summary Completed

 	
  

 	
  

 	
  

 	
  

 
	
 35

 	
  

 	
 Property
 Data Sheet Completed

 	
  

 	
  

 	
  

 	
  

 
	
 36

 	
  

 	
 Other

 	
  

 	
  

 	
  

 	
  

 

G-2

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

 
	

 

 	
  

 	

 

 	
  

 	

 

 	
  

 	

 

 	
  

 	

 

 	
  

 	

 

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 

G-3

Due
Diligence

Property Data Survey

[To Be
Completed Electronically]

G-4

G-5

EXHIBIT
H

Existing
Loan

Name, Address,
Email and Telephone Number Lender: 

Name, Address,
Email and Telephone Number of Servicer:

Date of Note:

Maturity Date:

Interest Rate:

Original
Principal Amount of Note:

Date and
Recording Info of Security Instrument:

Outstanding
Principal Balance as of the Date of this Contract: 

H-1Exhibit 4.1

AMERICAN CHUCH MORTGAGE COMPANY

SHARE REPURCHASE PLAN

Dated July 13, 2011

 

The Board of Directors (the “Board”)
of American Church Mortgage Company, a Minnesota corporation (the “Company”), has adopted this Share Repurchase Plan
(the “Repurchase Plan”) by which shares of the Company’s common stock, par value $0.01 per share (“Shares”),
may be repurchased by the Company from shareholders subject to certain conditions and limitations. The purpose of this Repurchase
Plan is to provide limited interim liquidity for shareholders under the terms, conditions and limitations set forth below until
a liquidity event occurs. No shareholder is required to participate in the Repurchase Plan.

 

1.Repurchase of Shares.
The Company may, at the Board’s sole discretion, repurchase up to 250,000 Shares presented to the Company for cash to
the extent it has sufficient proceeds to do so and subject to the conditions and limitations set forth herein. Any and all Shares
repurchased by the Company shall be canceled, and will have the status of authorized but unissued Shares. Shares acquired by the
Company through the Repurchase Plan will not be reissued unless they are first registered with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, and other appropriate state securities laws or otherwise issued pursuant to exemptions
from applicable registration requirements of such laws.

 

2. Share Redemptions.

 

a.Repurchase
Price. The prices per Share at which the Company will repurchase Shares will be as follows: for shareholders who have
continuously held their Shares for at least one year, (i) the redemption price per Share shall be $4.00 (less a $20 administrative
fee that the Company may, in its discretion, charge for repurchases), or (ii) such price as the
Board may otherwise determine. 

 

3. Funding
and Operation of Repurchase Plan. The Company may make purchases under the Repurchase Plan, at its sole discretion,
as funds allow, the allocation of funds to be utilized for such purposes being subordinated to all other obligations of
the Company. The Company may repurchase Shares on a continuous basis.

 

4. Shareholder Requirements.
Any shareholder may request a repurchase with respect to all or a designated portion of their Shares, subject to the following
conditions and limitations:

 

a.Holding Period.
Only Shares that have been held by the presenting shareholder for at least one (1) year are eligible for repurchase by the
Company.

 

b.No Encumbrances.
All Shares presented for repurchase must be owned by the shareholder(s) making the presentment, or the party presenting the
Shares must be authorized to do so by the owner(s) of the Shares. Such Shares must be fully transferable and not subject to any
liens or other encumbrances.

 

c.Share Repurchase
Form. The presentment of Shares must be accompanied by a completed Share Repurchase Request form, a copy of which is
attached hereto as Exhibit A. All Share certificates must be properly endorsed.

 

d.Presentment; Minimum
Amounts. All Shares presented and all completed Share Repurchase Request received by the Company (or any repurchase
agent) will be accepted or rejected for repurchase by the Company within 30 calendar days of the Company’s receipt of completed
Share Repurchase Requests (accompanied by endorsed Shares). To be eligible for participation, Shareholders must present for repurchase
either: (i) a minimum of 500 Shares, or (ii) the total number of Shares registered in such Shareholder’s name.

 

e.Repurchase Request
Withdrawal. A shareholder may withdraw his or her repurchase request upon written notice to the Company at any time
prior to the date of repurchase.

 

f.Ineffective Withdrawal.
In the event the Company receives a written notice of withdrawal from a shareholder after the Company has repurchased all or
a portion of such shareholder’s Shares, the notice of withdrawal shall be ineffective with respect to the Shares already
repurchased, but shall be effective with respect to

 

     

     

    

 

any of such shareholder’s Shares that have not been repurchased. The
Company shall provide any such shareholder with prompt written notice of the ineffectiveness or partial ineffectiveness of such
shareholder’s written notice of withdrawal.

 

g.Repurchase Agent.
The Company may utilize a registered broker dealer in connection with the repurchases under this Plan.

 

h.Termination, Amendment
or Suspension of Plan. The Board, in its sole discretion, may terminate, amend or suspend the Repurchase Plan if it
determines to do so is in the best interest of the Company. A determination by the Board to terminate, amend or suspend the Repurchase
Plan will require the affirmative vote of a majority of the Board, including a majority of the independent Directors. If the Company
terminates, amends or suspends the Repurchase Plan, the Company will provide shareholders with ten (10) days prior written notice
and the Company will disclose the changes in the appropriate current or periodic report filed with the Securities and Exchange
Commission.

 

5. Miscellaneous.

 

a.Advisor Ineligible.
The Advisor to the Company, Church Loan Advisors, Inc., shall not be permitted to participate in the Repurchase Plan.

 

b.Liability.
Neither the Company nor any repurchase agent shall have any liability to any shareholder for the value of the shareholder’s
Shares, the repurchase price of the shareholder’s Shares, or for any damages resulting from the shareholder’s presentation
of his or her Shares, the repurchase of the Shares under this Repurchase Plan or from the Company’s determination not to
repurchase Shares under the Repurchase Plan, except as a result from the Company’s or the repurchase agent’s gross
negligence, recklessness or violation of applicable law; provided, however, that nothing contained herein shall constitute a waiver
or limitation of any rights or claims a shareholder may have under federal or state securities laws.

 

c.Taxes.
Shareholders shall have complete responsibility for payment of all taxes, assessments, and other applicable obligations resulting
from the Company’s repurchase of Shares.

 

     

     

    

EXHIBIT A

AMERICAN CHURCH MORTGAGE COMPANY

SHARE REPURCHASE REQUEST FORM

 

Dear Shareholder:

De

If you are interested in having
us repurchase your outstanding shares of American Church Mortgage Company Common Stock for cash, please sign this reservation
form where indicated and return the form to us.

 

	
         

         

         
	Shareholder Number:	 
	 	 
	Number of Shares Certificated: 	 
	Number of Shares in Book Entry:	 
	Total Number of Shares Owned:      	 

 

	Total amount of cash you will receive if we purchase all of your outstanding shares (less a $20 administrative fee):	 

 

By signing and
submitting this form, the undersigned hereby acknowledges and represents to each the Company and our repurchase agent the following:

 

·        
The undersigned is the owner (or duly authorized agent of the owner) of the Shares presented
for repurchase, and thus is authorized to present the Shares for repurchase.

 

·        
The Shares presented for repurchase are eligible for repurchase pursuant to the Share Repurchase
Plan. The Shares are fully transferable and have not been assigned, pledged, or otherwise encumbered in any way.

 

·        
The undersigned hereby indemnifies and holds harmless the Company, our repurchase agent, and
each of their respective officers, Directors and employees from and against any liabilities, damages, expenses, including reasonable
attorneys’ fees, arising out of or in connection with any misrepresentation made herein.

 

·        
Stock certificates for the Shares presented for repurchase (if applicable) are enclosed, properly
endorsed with Medallion Signature Guarantee.

 

It is recommended that this
Share Repurchase Request and any attached stock certificates be sent to our repurchase agent at the address below via overnight
courier, certified mail, or other means of guaranteed delivery. Your signature(s) on your certificate must be Medallion Signature
Guaranteed. If your shares are shown in book-entry form, a signed Medallion Signature Guaranteed stock power will need to be completed.
This Share Repurchase Request form can be used as a substitute for a signed stock power. However, it must be Medallion Signature
Guaranteed. This form cannot be used as a substitute for your certificated shares. If you have lost or cannot find your
certificate it will need to be replaced prior to us repurchasing your shares. Please contact us regarding replacing your lost certificate.

 

Your Share Repurchase Request
will be processed by our repurchase agent: American Investors Group, Inc., (“AIGI”) a securities broker-dealer and
a FINRA member firm. If AIGI does not have an account application on file for you, an account application must be completed in
order to process your repurchase request. AIGI can provide a Medallion Signature Guarantee if we have a current account application
on file from you.

 

You
can obtain both a stock power and account application form from our website www.churchbondsusa.com.
Click on the link called “Library” and you will find both AIGI’s account application and a stock power which
you can download, or you can call our office and we will be glad to mail you an account application and/or stock power.

 

Return the signed and Medallion
Guaranteed Share Repurchase Request Form, stock certificate or stock power and account application (if applicable) to:

American Investors
Group, Inc.

10237 Yellow
Circle Drive

Minnetonka,
MN 55343-9101

 

If you have any questions,
please contact the Company at 1-800-815-1175 ext. 127.

 

	 	 	 
	Signature of Owner                         (Date)	 	Signature of Co-Owner (if applicable)            (Date)

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