Document:

Exhibit 10.7

 Exhibit 10.7 
 FORM OF 
 BANK EMPLOYMENT AGREEMENT 
 THIS AGREEMENT (the “Agreement”), made this          day of
                    , 2006, by and between NORTHEAST COMMUNITY BANK, a federally chartered savings bank (the “Bank”), and
                                       
  (the “Executive”). 
  WHEREAS, Executive serves in a position of substantial responsibility; and 

 WHEREAS, the Bank wishes to assure Executive’s services for the term of this Agreement; and 
 WHEREAS, Executive is willing to serve in the employ of the Bank during the term of this Agreement. 
 NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, and upon the other terms and conditions provided for in this
Agreement, the parties hereby agree as follows: 
 1. Employment. The Bank will employ Executive as
                    . Executive will perform all duties and shall have all powers commonly incident to the offices of
                     or which, consistent with those offices, the Board of Directors of the Bank (the “Board”) delegates to
Executive. Executive also agrees to serve, if elected, as an officer and/or director of any subsidiary or affiliate of the Bank and to carry out the duties and responsibilities reasonably appropriate to those offices. 
 2. Location and Facilities. The Bank will furnish Executive with the working facilities and staff customary for executive officers with the
title and duties set forth in Section 1 and as are necessary for him to perform his duties. The location of such facilities and staff shall be at the principal administrative offices of the Bank, or at such other site or sites customary for
such offices. 
 3. Term. 
  

	 	a.	The term of this Agreement shall include: (i) the initial term, consisting of the period commencing on the date of this Agreement (the “Effective Date”) and ending on
the third anniversary of the Effective Date, plus (ii) any and all extensions of the initial term made pursuant to this Section 3. 

  

	 	b.	Commencing on the first anniversary of the Effective Date and continuing on each anniversary of the Effective Date thereafter, the disinterested members of the Board may extend the
Agreement term for an additional year, so that the remaining term of the Agreement again becomes thirty-six (36) months, unless Executive elects not to extend the term of this Agreement by giving written notice in accordance with
Section 19 of this Agreement. The Board will review the Agreement and Executive’s performance annually for purposes of determining whether to extend the Agreement term and will include the rationale and results of its review in the minutes
of the meeting. The Board will notify Executive as soon as possible after its annual review whether the Board has determined to extend the Agreement. 

 4. Base Compensation. 
  

	 	a.	The Bank agrees to pay Executive during the term of this Agreement a base salary at the rate of $             per
year, payable in accordance with customary payroll practices. 

  

	 	b.	Each year, the Board will review the level of Executive’s base salary, based upon factors they deem relevant, in order to determine whether to maintain or increase his base
salary. 

 5. Bonuses. Executive will participate in discretionary bonuses or other incentive
compensation programs that the Bank may sponsor or award from time to time to senior management employees. 
 6. Benefit Plans.
Executive will participate in life insurance, medical, dental, pension, profit sharing, retirement and stock-based compensation plans and other programs and arrangements that the Bank may sponsor or maintain for the benefit of its employees.

 7. Vacations and Leave. 
  

	 	a.	Executive may take vacations and other leave in accordance with the Bank’s policy for senior executives, or otherwise as approved by the Board. 

  

	 	b.	In addition to paid vacations and other leave, the Board may grant Executive a leave or leaves of absence, with or without pay, at such time or times and upon such terms and
conditions as the Board, in its discretion, may determine. 

 8. Expense Payments and Reimbursements. The Bank
will reimburse Executive for all reasonable out-of-pocket business expenses incurred in connection with his services under this Agreement upon substantiation of such expenses in accordance with applicable policies of the Bank. 
 9. Automobile Allowance. During the term of this Agreement, the Bank will provide Executive with the use of an automobile, including
insurance, maintenance and work-related fuel expenses, or, in the alternative and the sole discretion of the Bank, the Bank will provide Executive with an automobile allowance that approximates the expense of a Bank-provided automobile and related
insurance, maintenance and fuel costs. Executive will comply with reasonable reporting and expense limitations on the use of such automobile as the Bank may establish from time to time, and the Bank shall annually include on Executive’s Form
W-2 any income attributable to Executive’s personal use of the automobile. 
 10. Loyalty and Confidentiality.

  

	 	a.	During the term of this Agreement, Executive will devote all his business time, attention, skill, and efforts to the faithful performance of his duties under this Agreement;
provided, however, that from time to time, Executive may serve on the boards of directors of, and hold any other offices or positions in, companies or organizations that will not present any conflict of interest with the Bank or any of its
subsidiaries or affiliates, unfavorably affect the performance of Executive’s duties pursuant to this Agreement, or violate any applicable statute or regulation. Executive will not engage in any business or activity contrary to the business
affairs or interests of the Bank or any of its subsidiaries or affiliates. 

  

	 	b.	Nothing contained in this Agreement will prevent or limit Executive’s right to invest in the capital stock or other securities or interests of any business dissimilar from that
of the Bank, or, solely as a passive, minority investor, in any business. 

  

	 	c.	Executive agrees to maintain the confidentiality of any and all information concerning the operation or financial status of the Bank; the names or addresses of any of its borrowers,
depositors and other customers; any information concerning or obtained from such customers; and any other information concerning the Bank or its subsidiaries or affiliates to which he may be exposed during the course of his employment. Executive
further agrees that, unless required by law or specifically permitted by the Board in writing, he will not disclose to any person or entity, either during or subsequent to his employment, any of the above-mentioned information which is not generally
known to the public, nor will he use the information in any way other than for the benefit of the Bank. 

  

 2 

 11. Termination and Termination Pay. Subject to Section 12 of this Agreement,
Executive’s employment under this Agreement may be terminated in the following circumstances: 
  

	 	a.	Death. Executive’s employment under this Agreement will terminate upon his death during the term of this Agreement, in which event Executive’s estate will receive
the compensation due to Executive through the last day of the calendar month in which his death occurred. 

  

	 	b.	Retirement. This Agreement will terminate upon Executive’s retirement under the retirement benefit plan or plans in which he participates pursuant to Section 6 of
this Agreement or otherwise. 

  

	 	c.	Disability. 

  

	 	i.	The Board or Executive may terminate Executive’s employment after having determined Executive has a Disability. For purposes of this Agreement, “Disability” means a
physical or mental infirmity that impairs Executive’s ability to substantially perform his duties under this Agreement and results in Executive becoming eligible for long-term disability benefits under any long-term disability plans of the Bank
(or, if no such plans exists, that impairs Executive’s ability to substantially perform his duties under this Agreement for a period of one hundred eighty (180) consecutive days). The Board will determine whether or not Executive is and
continues to be permanently disabled for purposes of this Agreement in good faith, based upon competent medical advice and other factors that the Board reasonably believes to be relevant. As a condition to any benefits, the Board may require
Executive to submit to physical or mental evaluations and tests as the Board or its medical experts deem reasonably appropriate. 

  

	 	ii.	In the event of his Disability, Executive will no longer be obligated to perform services under this Agreement. The Bank will pay Executive, as Disability pay, an amount equal to
seventy-five percent (75%) of Executive’s rate of base salary in effect as of the date of his termination of employment due to Disability. The Bank will make Disability payments on a monthly basis commencing on the first day of the month
following the effective date of Executive’s termination of employment due to Disability and ending on the earlier of: (A) the date he returns to full-time employment at the Bank in the same capacity as he was employed prior to his
termination for Disability; (B) his death; (C) his attainment of age 65 or (D) the date this Agreement would have expired had Executive’s employment not terminated by reason of Disability. The Bank will reduce Disability payments
by the amount of any short- or long-term disability benefits payable to Executive under any other disability programs sponsored by the Bank. In addition, during any period of Executive’s Disability, the Bank will continue to provide Executive
and his dependents, to the greatest extent possible, with continued coverage under all benefit plans (including, without limitation, retirement plans and medical, dental and life insurance plans) in which Executive and/or his dependent participated
prior to his Disability on the same terms as if he remained actively employed by the Bank. 

  

	 	d.	Termination for Cause. 

  

	 	i.	The Board may, by written notice to Executive in the form and manner specified in this paragraph, immediately terminate his employment at any time for “Cause.” Executive
shall have no right to receive compensation or other benefits for any period after termination for Cause, except for already vested benefits. Termination for Cause shall mean termination because of, in the good faith determination of the Board,
Executive’s: 

  

	 	(1)	Personal dishonesty; 

  

 3 

	 	(2)	Incompetence; 

  

	 	(3)	Willful misconduct; 

  

	 	(4)	Breach of fiduciary duty involving personal profit; 

  

	 	(5)	Intentional failure to perform stated duties; 

  

	 	(6)	Willful violation of any law, rule or regulation (other than traffic violations or similar offenses) or final cease-and-desist order; or 

  

	 	(7)	Material breach of any provision of this Agreement. 

   

	 	ii.	Notwithstanding the foregoing, Executive’s termination for Cause will not become effective unless the Bank has delivered to Executive a copy of a resolution duly adopted by the
affirmative vote of a majority of the entire membership of the Board, at a meeting of the Board called and held for the purpose of finding that, in the good faith opinion of the Board (after reasonable notice to Executive and an opportunity for
Executive to be heard before the Board with counsel), Executive was guilty of the conduct described above and specifying the particulars of this conduct. 

  

	 	e.	Voluntary Termination by Executive. In addition to his other rights to terminate under this Agreement, Executive may voluntarily terminate employment during the term of this
Agreement upon at least sixty (60) days prior written notice to the Board. Upon Executive’s voluntary termination, he will receive only his compensation, and vested rights and benefits to the date of his termination. Following his
voluntary termination of employment under this Section 11(e), Executive will be subject to the restrictions set forth in Sections 11(g)(i) and 11(g)(ii) of this Agreement for a period of one (1) year from his termination date.

  

	 	f.	Without Cause or With Good Reason. 

  

	 	i.	In addition to termination pursuant to Sections 11(a) through 11(e), the Board may, by written notice to Executive, immediately terminate his employment at any time for a reason
other than Cause (a termination “Without Cause”) and Executive may, by written notice to the Board, immediately terminate this Agreement at any time within ninety (90) days following an event constituting “Good Reason,” as
defined below (a termination “With Good Reason”). 

  

	 	ii.	 Subject to Section 12 of this Agreement, in the event of termination under this Section 11(f), Executive will receive his base salary and the value of
employer contributions to benefit plans in which the Executive participated upon termination for the remaining term of the Agreement, paid in one lump sum within ten (10) calendar days of his termination. Executive will also continue to
participate in any benefit plans of the Bank that provide medical, dental and life insurance coverage for the remaining term of the Agreement, under terms and conditions no less favorable than the most favorable terms and conditions provided to
senior executives of the 

  

 4 

	 	 
Bank during the same period. If the Bank cannot provide such coverage because Executive is no longer an employee, the Bank will provide Executive with
comparable coverage on an individual policy basis or the cash equivalent. 

  

	 	iii.	“Good Reason” exists if, without Executive’s express written consent, the Bank materially breaches any of its obligations under this Agreement. Without limitation,
such a material breach will occur upon any of the following: 

  

	 	(1)	A material reduction in Executive’s responsibilities or authority in connection with his employment with the Bank; 

  

	 	(2)	Assignment to Executive of duties of a non-executive nature or duties for which he is not reasonably equipped by his skills and experience; 

  

	 	(3)	Failure of Executive to be nominated or renominated to the Board to the extent Executive is a Board member prior to the Effective Date; 

  

	 	(4)	A reduction in salary or benefits contrary to the terms of this Agreement, or, following a Change in Control as defined in Section 12 of this Agreement, any reduction in salary
or material reduction in benefits below the amounts Executive was entitled to receive prior to the Change in Control; 

   

	 	(5)	Termination of incentive and benefit plans, programs or arrangements, or reduction of Executive’s participation, to such an extent as to materially reduce their aggregate value
below their aggregate value as of the Effective Date; 

  

	 	(6)	A requirement that Executive relocate his principal business office or his principal place of residence outside of the area consisting of a twenty-five (25) mile radius from
the current main office and any branch of the Bank, or the assignment to Executive of duties that would reasonably require such a relocation; or 

  

	 	(7)	Liquidation or dissolution of the Bank. 

  

	 	iv.	Notwithstanding the foregoing, a reduction or elimination of Executive’s benefits under one or more benefit plans maintained by the Bank as part of a good faith, overall
reduction or elimination of such plans or benefits, applicable to all participants in a manner that does not discriminate against Executive (except as such discrimination may be necessary to comply with law), will not constitute an event of Good
Reason or a material breach of this Agreement, provided that benefits of the same type or to the same general extent as those offered under such plans prior to the reduction or elimination are not available to other officers of the Bank or any
affiliate under a plan or plans in or under which Executive is not entitled to participate. 

  

	 	g.	Continuing Covenant Not to Compete or Interfere with Relationships. Regardless of anything herein to the contrary, following a termination by the Bank or Executive pursuant
to Section 11(e) or 11(f): 

  

	 	i.	Executive’s obligations under Section 10(c) of this Agreement will continue in effect; and 

  

 5 

	 	ii.	During the period ending on the first anniversary of such termination, Executive will not serve as an officer, director or employee of any bank holding company, bank, savings
association, savings and loan holding company, mortgage company or other financial institution that offers products or services competing with those offered by the Bank from any office within thirty-five (35) miles from the main office or any
branch of the Bank and, further, Executive will not interfere with the relationship of the Bank, its subsidiaries or affiliates and any of their employees, agents, or representatives. 

  

	 	h.	To the extent Executive is a member of the Board on the date of termination of employment with the Bank, Executive will resign from the Board immediately following such termination
of employment with the Bank. Executive will be obligated to tender this resignation regardless of the method or manner of termination, and such resignation will not be conditioned upon any event or payment. 

 12. Termination in Connection with a Change in Control. 
  

	 	a.	For purposes of this Agreement, a “Change in Control” means any of the following events: 

  

	 	i.	Merger: Northeast Community Bancorp, Inc. (the “Company”) merges into or consolidates with another entity, or merges another corporation into the Company, and as a
result, less than a majority of the combined voting power of the resulting corporation immediately after the merger or consolidation is held by persons who were stockholders of the Company immediately before the merger or consolidation;

  

	 	ii.	Acquisition of Significant Share Ownership: There is filed, or is required to be filed, a report on Schedule 13D or another form or schedule (other than Schedule 13G)
required under Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended, if the schedule discloses that the filing person or persons acting in concert has or have become the beneficial owner of 25% or more of a class of the
Company’s voting securities, but this clause (ii) shall not apply to beneficial ownership of Company voting shares held in a fiduciary capacity by an entity of which the Company directly or indirectly beneficially owns 50% or more of its
outstanding voting securities; 

  

	 	iii.	Change in Board Composition: During any period of two consecutive years, individuals who constitute the Company’s Board of Directors at the beginning of the two-year
period cease for any reason to constitute at least a majority of the Company’s Board of Directors; provided, however, that for purposes of this clause (iii), each director who is first elected by the board (or first nominated by the board for
election by the members) by a vote of at least two-thirds (2/3) of the directors who were directors at the beginning of the two-year period shall be deemed to have also been a director at the beginning of such period; or

  

	 	iv.	Sale of Assets: The Company sells to a third party all or substantially all of its assets. 

  

	 	b.	 Termination. If within the period ending one year after a Change in Control, (i) the Bank terminates Executive’s employment Without Cause, or
(ii) Executive voluntarily terminates his employment With Good Reason, the Bank will, within ten calendar days of the termination of Executive’s employment, make a lump-sum cash payment to him equal to three times Executive’s average
“Annual Compensation” over the five (5) most recently completed calendar years, ending with the year immediately preceding the effective date of the Change in Control. “Annual Compensation” will include base salary and any
other taxable income, 

  

 6 

	 	 
including, but not limited to, amounts related to the granting, vesting or exercise of restricted stock or stock option awards, commissions, bonuses,
retirement benefits, director or committee fees and fringe benefits paid to Executive or accrued for Executive’s benefit. Annual Compensation will also include profit sharing, employee stock ownership plan and other retirement contributions or
benefits, including to any tax-qualified plan or arrangement (whether or not taxable) made or accrued on behalf of Executive for such year. The cash payment made under this Section 12(b) shall be made in lieu of any payment also required under
Section 11(f) of this Agreement because of Executive’s termination of employment, however, Executive’s rights under Section 11(f) are not otherwise affected by this Section 12. Following termination of employment, executive
will also continue to participate in any benefit plans of the Bank that provide medical, dental and life insurance coverage upon terms no less favorable than the most favorable terms provided to senior executives. If the Bank cannot provide such
coverage because Executive is no longer an employee, the Bank will provide Executive with comparable coverage on an individual basis or the cash equivalent. The medical, dental and life insurance coverage provided under this Section 12(b) shall
cease upon the earlier of: (i) the Executive’s death; (ii) Executive’s employment by another employer other than one of which he is the majority owner; or (iii) thirty-six (36) months after his termination of
employment. 

   

	 	c.	The provisions of Section 12 and Sections 14 through 26, including the defined terms used in such sections, shall continue in effect until the later of the expiration of this
Agreement or one year following a Change in Control. 

  

	 	d.	Notwithstanding anything in this Section 12 to the contrary, a “Change in Control” for purposes of this Agreement shall not include any corporate restructuring
transaction by the Bank, including, but not limited to, a mutual to stock conversion, provided that the Board of Directors of the Bank immediately preceding such transaction constitutes at least a majority of the Board of Directors of the Bank after
such transaction. 

 13. Indemnification and Liability Insurance. 
  

	 	a.	Indemnification. The Bank agrees to indemnify Executive (and his heirs, executors, and administrators), and to advance expenses related to this indemnification, to the
fullest extent permitted under applicable law and regulations against any and all expenses and liabilities that Executive reasonably incurs in connection with or arising out of any action, suit, or proceeding in which he may be involved by reason of
his service as a director or Executive of the Bank or any of its subsidiaries or affiliates (whether or not he continues to be a director or Executive at the time of incurring any such expenses or liabilities). Covered expenses and liabilities
include, but are not limited to, judgments, court costs, and attorneys’ fees and the costs of reasonable settlements, subject to Board approval, if the action is brought against Executive in his capacity as an Executive or director of the Bank
or any of its subsidiaries. Indemnification for expenses will not extend to matters related to Executive’s termination for Cause. Notwithstanding anything in this Section 13(a) to the contrary, the Bank will not be required to provide
indemnification prohibited by applicable law or regulation. The obligations of this Section 13 will survive the term of this Agreement by a period of six (6) years. 

   

	 	b.	Insurance. During the period for which the Bank must indemnify Executive, the Bank will provide Executive (and his heirs, executors, and administrators) with coverage under a
directors’ and officers’ liability policy at the Bank’s expense, that is at least equivalent to the coverage provided to directors and senior executives of the Bank. 

  

 7 

 14. Reimbursement of Executive’s Expenses to Enforce this Agreement. The Bank will
reimburse Executive for all out-of-pocket expenses, including, without limitation, reasonable attorneys’ fees, incurred by Executive in connection with his successful enforcement of the Bank’s obligations under this Agreement. Successful
enforcement means the grant of an award of money or the requirement that the Bank take some specified action: (i) as a result of court order; or (ii) otherwise following an initial failure of the Bank to pay money or take action promptly
following receipt of a written demand from Executive stating the reason that the Bank must make payment or take action under this Agreement. 
 15. Limitation of Benefits under Certain Circumstances. If the payments and benefits pursuant to Section 12 of this Agreement, either alone or together with other payments and benefits Executive has the right to receive
from the Bank, would constitute a “parachute payment” under Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), the payments and benefits pursuant to Section 12 shall be reduced or revised, in
the manner determined by Executive, by the amount, if any, which is the minimum necessary to result in no portion of the payments and benefits under Section 12 being non-deductible to the Bank pursuant to Section 280G of the Code and
subject to the excise tax imposed under Section 4999 of the Code. The Bank’s independent public accountants will determine any reduction in the payments and benefits to be made pursuant to Section 12; the Bank will pay for the
accountant’s opinion. If the Bank and/or Executive do not agree with the accountant’s opinion, the Bank will pay to Executive the maximum amount of payments and benefits pursuant to Section 12, as selected by Executive, that the
opinion indicates have a high probability of not causing any of the payments and benefits to be non-deductible to the Bank and subject to the imposition of the excise tax imposed under Section 4999 of the Code. The Bank may also request, and
Executive has the right to demand that the Bank request, a ruling from the IRS as to whether the disputed payments and benefits pursuant to Section 12 have such tax consequences. The Bank will promptly prepare and file the request for a ruling
from the IRS, but in no event will the Bank make this filing later than thirty (30) days from the date of the accountant’s opinion referred to above. The request will be subject to Executive’s approval prior to filing; Executive shall
not unreasonably withhold his approval. The Bank and Executive agree to be bound by any ruling received from the IRS and to make appropriate payments to each other to reflect any IRS rulings, together with interest at the applicable federal rate
provided for in Section 7872(f)(2) of the Code. Nothing contained in this Agreement shall result in a reduction of any payments or benefits to which Executive may be entitled upon termination of employment other than pursuant to Section 12
hereof, or a reduction in the payments and benefits specified in Section 12, below zero. 
 16. Injunctive Relief. Upon a
breach or threatened breach of Section 11(g) of this Agreement or the prohibitions upon disclosure contained in Section 10(c) of this Agreement, the parties agree that there is no adequate remedy at law for such breach, and the Bank shall
be entitled to injunctive relief restraining Executive from such breach or threatened breach, but such relief shall not be the exclusive remedy for a breach of this Agreement. The parties further agree that Executive, without limitation, may seek
injunctive relief to enforce the obligations of the Bank under this Agreement. 
 17. Successors and Assigns. 
  

	 	a.	This Agreement shall inure to the benefit of and be binding upon any corporate or other successor of the Bank which shall acquire, directly or indirectly, by merger, consolidation,
purchase or otherwise, all or substantially all of the assets or stock of the Bank. 

  

	 	b.	Since the Bank is contracting for the unique and personal skills of Executive, Executive shall not assign or delegate his rights or duties under this Agreement without first
obtaining the written consent of the Bank. 

 18. No Mitigation. Executive shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other employment or otherwise and no such payment shall be offset or reduced by the amount of any compensation or benefits provided to Executive in any subsequent employment.

  

 8 

 19. Notices. All notices, requests, demands and other communications in connection with
this Agreement shall be made in writing and shall be deemed to have been given when delivered by hand or 48 hours after mailing at any general or branch United States Post Office, by registered or certified mail, postage prepaid, addressed to the
Bank at their principal business offices and to Executive at his home address as maintained in the records of the Bank. 
 20. No Plan
Created by this Agreement. Executive and the Bank expressly declare and agree that this Agreement was negotiated among them and that no provision or provisions of this Agreement are intended to, or shall be deemed to, create any plan for
purposes of the Employee Retirement Income Security Act of 1974 (“ERISA”) or any other law or regulation, and each party expressly waives any right to assert the contrary. Any assertion in any judicial or administrative filing, hearing, or
process that an ERISA plan was created by this Agreement shall be deemed a material breach of this Agreement by the party making the assertion. 
 21. Amendments. No amendments or additions to this Agreement shall be binding unless made in writing and signed by all of the parties, except as herein otherwise specifically provided. 
 22. Applicable Law. Except to the extent preempted by federal law, the laws of the State of New York shall govern this Agreement in all
respects, whether as to its validity, construction, capacity, performance or otherwise. 
  23. Severability. The provisions
of this Agreement shall be deemed severable and the invalidity or unenforceability of any one provision shall not affect the validity or enforceability of the other provisions of this Agreement. 
  24. Headings. Headings contained in this Agreement are for convenience of reference only. 
 25. Entire Agreement. This Agreement, together with any modifications subsequently agreed to in writing by the parties, shall constitute
the entire agreement among the parties with respect to the foregoing subject matter, other than written agreements applicable to specific plans, programs or arrangements described in Sections 5 and 6. 
 26. Required Provisions. In the event any of the foregoing provisions of this Agreement conflict with the terms of this Section 26,
this Section 26 shall prevail. 
  

	 	a.	The Bank’s board of directors may terminate Executive’s employment at any time, but any termination by the Bank, other than termination for Cause, shall not prejudice
Executive’s right to compensation or other benefits under this Agreement. Executive shall not have the right to receive compensation or other benefits for any period after termination for Cause as defined in Section 11(d) of this
Agreement. 

   

	 	b.	If Executive is suspended from office and/or temporarily prohibited from participating in the conduct of the Bank’s affairs by a notice served under Section 8(e)(3) or
8(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. Section 1818(e)(3) or (g)(1), the Bank’s obligations under this contract shall be suspended as of the date of service, unless stayed by appropriate proceedings. If the charges in the
notice are dismissed, the Bank may, in its discretion: (i) pay Executive all or part of the compensation withheld while their contract obligations were suspended; and (ii) reinstate (in whole or in part) any of the obligations which were
suspended. 

  

	 	c.	 If Executive is removed and/or permanently prohibited from participating in the conduct of the Bank’s affairs by an order issued under Section 8(e)(4) or
8(g)(1) of the Federal Deposit 

  

 9 

	 	 
Insurance Act, 12 U.S.C. Section 1818(e)(4) or (g)(1), all obligations of the Bank under this contract shall terminate as of the effective date of the
order, but vested rights of the contracting parties shall not be affected. 

  

	 	d.	If the Bank is in default as defined in Section 3(x)(1) of the Federal Deposit Insurance Act, 12 U.S.C. Section 1813(x)(1), all obligations under this contract shall
terminate as of the date of default, but this paragraph shall not affect any vested rights of the contracting parties. 

  

	 	e.	All obligations under this contract shall terminate, except to the extent determined that continuation of the contract is necessary for the continued operation of the institution:
(i) by the Director of the OTS (or his designee) at the time the FDIC enters into an agreement to provide assistance to or on behalf of the Bank under the authority contained in Section 13(c) of the Federal Deposit Insurance Act, 12 U.S.C.
Section 1823(c), or (ii) by the Director of the OTS (or his designee) at the time the Director (or his designee) approves a supervisory merger to resolve problems related to the operations of the Bank or when the Bank is determined by the
Director to be in an unsafe or unsound condition. Any rights of the parties that have already vested, however, shall not be affected by such action. 

  

	 	f.	Any payments made to Executive pursuant to this Agreement, or otherwise, are subject to and conditioned upon their compliance with 12 U.S.C. Section 1828(k) and FDIC Regulation
12 C.F.R. Part 359, Golden Parachute and Indemnification Payments. 

  IN WITNESS WHEREOF, the parties hereto have
executed this Agreement on                         , 2006. 
  

					
	ATTEST:	  	NORTHEAST COMMUNITY BANK
			
	  
	  	By:	 	  

	Witness	  		 	For the Entire Board of Directors
		
	WITNESS:	  	EXECUTIVE
			
	  
	  	By:	 	  

  

 10Exhibit 10.1

 Exhibit 10.1 
 ADVISORY AGREEMENT 
 BETWEEN 
 APPLE REIT SEVEN, INC. 
 AND 
 APPLE SEVEN ADVISORS, INC. 
 THIS ADVISORY AGREEMENT, dated as of March 2, 2006, is between APPLE REIT
SEVEN, INC., a Virginia corporation (the “Company”), and APPLE SEVEN ADVISORS, INC., a Virginia corporation (the “Advisor”). 
 RECITALS 
 A. The purpose of the Company is to invest primarily in hotels, residential apartment communities and other
income-producing real estate in selected metropolitan areas of the United States. The Company intends to qualify as a real estate investment trust pursuant to Sections 856 through 860 of the Internal Revenue Code of 1986, as amended. 
 B. The Company desires to engage the Advisor to provide information, advice, assistance and facilities to the Company and to have the Advisor undertake
the duties and responsibilities hereinafter set forth, all subject to the supervision of the Company’s Board of Directors, on the terms and conditions set forth herein. In consideration therefor, the Company desires to pay the Advisor certain
fees as herein set forth. 
 NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements contained herein,
the parties agree as follows: 
 1. Definitions. For purposes of this Agreement, the following terms shall have the meanings set forth
below. 
 (a) “Affiliate” means (i) any Person directly or indirectly controlling, controlled by or under
common control with another Person, (ii) any Person owning or controlling 10% or more of the outstanding voting securities or beneficial interests of such other Person, (iii) any officer, director, trustee or general partner of such Person
and (iv) if such other Person is an officer, director, trustee or partner of another entity, then the entity for which that Person acts in any such capacity. “Affiliated” means being an Affiliate of a specified Person. 
 (b) “Articles of Incorporation” means the Company’s Articles of Incorporation filed with the Virginia State Corporation
Commission, including all amendments, restatements or modifications thereof. 

 (c) “Asset Management Fee” means the fee payable to the Advisor for its
services hereunder. Such fee will be paid pursuant and subject to Section 11 of this Agreement. 
 (d) “Average
Invested Assets” for any period means the average of the aggregate book value of the assets of the Company invested, directly or indirectly, in equity interests in and loans secured by real estate, before reserves for depreciation or bad debts
or other similar non-cash reserves, computed by taking the average of such values at the end of each month during such period. 
 (e) “Board of Directors” means the Company’s Board of Directors as of any particular time. 
 (f)
“Bylaws” means the Company’s Bylaws, including all amendments, restatements or modifications thereof. 
 (g)
“Calendar Year” means the year ended December 31st and any portion thereof treated by the Internal Revenue Service as a reporting period for the Company. 
 (h) “Code” means the Internal Revenue Code of 1986, as amended from time to time, including successor statutes thereto.

 (i) “Company Net Income” for any period means the total revenues of the Company for such period, less expenses
applicable to such period other than additions to reserves for depreciation or bad debts or other similar non-cash reserves. “Company Net Income,” for purposes of calculating Operating Expenses in Section 15 of this Agreement, does
not include the gain from the sale of the Company’s assets. 
 (j) “Directors” means, as of any particular
time, the directors of the Company holding office at such time. 
 (k) “Modified Net Income” means net income
(computed in accordance with generally accepted accounting principles) excluding gains (or losses) from debt restructuring and sales of property, plus depreciation of real property, and after adjustments for significant non-recurring items and
unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect modified net income on the same basis. 
 (l) “Offering” means the public offering of the Company’s Units. 
 (m) “Operating Expenses” means all operating, general and administrative expenses of the Company as determined under generally
accepted accounting principles (including regular compensation payable to the Advisor), excluding, however, the following: 
 (i) expenses of raising capital; 
 (ii) interest payments; 
  

 2 

 (iii) taxes; 
 (iv) non-cash expenditures, such as depreciation, amortization and bad debt; 
 (v) reserves; 
 (vi) incentive fees paid to the Advisor, if any; and 
 (vii) costs related directly to asset acquisition, operation
or disposition. 
 (n) “Organizational and Offering Expenses” means all expenses incurred in connection with the
formation and registration of the Company and in qualifying and marketing the Units under applicable federal and state law, and any other expenses actually incurred and directly related to the qualification, registration, offer and sale of the
Units, including such expenses as (i) all marketing expenses and payments made to broker-dealers as compensation or reimbursement for all costs of reviewing the Offering, including due diligence investigations and fees and expenses of their
attorneys, accountants and other experts; (ii) registration fees, filing fees and taxes; (iii) the costs of printing, amending, supplementing and distributing the registration statement and Prospectus; (iv) the costs of obtaining
regulatory clearances of, and printing and distributing, sales materials used in connection with the offer and sale of the Units; (v) the costs related to investor and broker-dealer sales meetings concerning the Offering; and
(vi) accounting and legal fees incurred in connection with any of the foregoing. 
 (o) “Person” includes an
individual, corporation, partnership, joint venture, association, company, trust, bank or other entity, or government and any agency and political subdivision of a government. 
 (p) “Property” or “Properties” means partial or entire equity interests, including equity participation interests such
as general partnership interests and joint venture interests, owned by the Company in real property as described in the Prospectus. 
 (q) “Prospectus” has the meaning given to that term by Section 2(10) of the Securities Act of 1933, as amended, and as used herein, the term means the Prospectus of the Company pursuant to which the Units are offered to the
public. 
 (r) “Return Ratio” means, for any period, the ratio of Modified Net Income to Total Contributions.

 (s) “Shareholders” means the holders of record of the Company’s Units. 
 (t) “Total Contributions” means the gross offering proceeds which have been received by the Company from time to time from the
sale or sales of the Units. Total Contributions shall be calculated to reflect the average of the daily amounts during the period in question of the gross offering proceeds which have been received by the Company from time to time from the sales of
Units, to extent such Units are issued and such sales have actually been closed. 
  

 3 

 (u) “Units” means the Units of the Company. Each Unit consists of one Common
Share and one Series A preferred share of the Company. 
 2. Duties of the Advisor. Subject to the terms of the Articles of
Incorporation, the Bylaws, and the supervision of the Board of Directors, the Advisor, at its own cost and expense, unless otherwise set forth herein, on behalf of the Company, shall: 
 (a) serve as the Company’s investment advisor and consultant in connection with policy and investment decisions to be made by the
Board of Directors, furnish reports to the Board of Directors, and provide research, economic and statistical data in connection with the acquisition, financing, refinancing, holding, leasing and disposition of Properties and other investments of
the Company; 
 (b) administer the day-to-day operations of the Company and perform or supervise the various administrative
functions reasonably necessary for the management of the Company; 
 (c) investigate, select and, on behalf of the Company,
engage and conduct business with (including, but not limited to, entering into contracts in the name of the Advisor or the Company) consultants, accountants, correspondents, lenders, servicers, technical advisors, attorneys, brokers, underwriters,
corporate fiduciaries, escrow agents, depositaries, custodians, agents for collection, insurers, insurance agents, banks, builders, developers, property owners, mortgagors, and other mortgage and investment participants, any and all agents for any
of the foregoing, including Affiliates of the Advisor, and Persons acting in any other capacity deemed by the Board of Directors necessary or desirable for the performance of any of the foregoing services; 
 (d) act as attorney-in-fact or agent in acquiring, financing, refinancing, leasing and disposing of Properties and other investments, in
disbursing and collecting funds of the Company, in paying the debts and fulfilling the obligations of the Company and in handling, prosecuting and settling any claims of the Company, including the foreclosure or other enforcement of any mortgage or
other lien securing Properties or other investments, and exercise its own discretion in doing so; provided that any fees and costs payable to independent Persons incurred by the Advisor in connection with the foregoing shall be the responsibility of
the Company; 
 (e) negotiate on behalf of the Company with banks or other lenders for loans to be made to the Company, and
negotiate on behalf of the Company with investment banking firms and broker-dealers or negotiate private sales of the securities of the Company or obtain loans for the Company, but in no event in such a way so that the Advisor shall be acting as
broker-dealer or underwriter; and provided, further, that any fees and costs payable to third parties incurred by the Advisor in connection with the foregoing shall be the responsibility of the Company; 
 (f) invest or reinvest any money of the Company, as directed by the Board of Directors or subject to such discretionary powers as the
Board of Directors may from time to time delegate; 
  

 4 

 (g) if requested by the Company, provide appraisal reports on any real property that is,
or is proposed to be, acquired by the Company for investment; 
 (h) at any time reasonably requested by the Board of
Directors (but not more than monthly) make reports of its performance of services to the Company; 
 (i) communicate on behalf
of the Company with the Shareholders of the Company as required to satisfy the continuous reporting and other requirements of any governmental bodies or agencies to the Shareholders and third parties and to maintain effective relations with the
Shareholders; 
 (j) counsel the Company in connection with policy decisions to be made by the Board of Directors; 

(k) provide the executive and administrative personnel and services required in rendering the foregoing services to the Company; and

 (l) perform such other services as may be required from time to time for management and other activities relating to the
assets of the Company as the Advisor shall deem appropriate under the particular circumstances. 
 3. Commitments. In order to meet
the investment requirements of the Company, but only as determined by the Board of Directors, or any authorized committee thereof, from time to time, the Advisor agrees at the direction of the Board of Directors or any such committee to issue on
behalf of the Company commitments on such terms as are established by the Board of Directors or any such committee, for the acquiring of Properties or other assets. 
 4. Duties of the Board of Directors. In order for the Advisor to fulfill its duties, the Board of Directors shall, to the extent it deems proper, provide the Advisor with full information concerning the
Company, its capitalization and investment policies and the intentions of the Board of Directors with respect to future investments. The Company shall furnish the Advisor with a copy of all audited financial statements, a signed copy of each report
prepared by independent accountants, and such other information with regard to its affairs as the Advisor may from time to time reasonably request. 
 5. Advice. In addition to the services described in Section 2 above, the Advisor shall consult with the Board of Directors and the officers of the Company and shall furnish them with advice and recommendations with respect to
the acquiring of Properties or commitments therefor, or other investments of, or investments considered by, the Company, and shall furnish advice and recommendations with respect to other aspects of the business and affairs of the Company. In order
to facilitate the investment of the funds of the Company and enable it to avail itself of investment opportunities as they arise, the Advisor may from time to time be granted, but is not hereby granted, the power and authority to make and dispose of
investments and to make and terminate commitments for investments, on behalf of and in the name of the Company, without further or express authority from the Board of Directors; provided, however that the Board of Directors shall have the power to
revoke, suspend, modify or limit such power and authority at any time or from time to time, but not retroactively. Unless otherwise notified by the 

  

 5 

 
Board of Directors, a representative of the Advisor shall attend all regular and special meetings of the Board of Directors, and the Board of Directors shall
notify the Advisor of such meetings. 
 6. Bank Accounts. The Advisor may establish and maintain one or more bank accounts in the name
of the Company and may collect and deposit into any such account or accounts, and disburse from any such account or accounts, any money on behalf of the Company, under such terms and conditions as the Board of Directors may approve, provided that
all such accounts shall be maintained in such fashion as to make clear that the funds therein are the property of the Company and not of the Advisor. The Advisor shall from time to time render appropriate accountings of such collections and payments
to the Board of Directors and to the auditors of the Company. 
 7. Investment Undertakings. The Advisor shall use its best efforts to
assure that (i) any mortgage securing a Property of the Company shall be and remain a valid lien upon the mortgaged property according to its terms; (ii) the title to any Property is insured by appropriate policies of title insurance;
(iii) any Property is duly insured against loss or damage by fire, with extended coverage, and against such other insurable hazards and risks as is customary and appropriate in the circumstances; and (iv) the policies from time to time
specified by the Board of Directors with regard to the protection of the Company’s investments are carried out. Any and all fees and costs incurred by the Advisor in performing such functions, whether payable to its Affiliates or independent
Persons shall be borne by the Company. 
 8. Records; Confidentiality. The Advisor shall maintain appropriate records of all its
activities hereunder and make such records available for inspection by the Board of Directors and by counsel, auditors and authorized agents of the Company, at any time or from time to time during normal business hours. The Advisor shall at all
reasonable times have access to the books and records of the Company. The Advisor shall keep confidential any and all information obtained in connection with the services rendered hereunder and shall not disclose any such information to
nonaffiliated Persons except with the prior consent of the Board. 
 9. Limitation of Activities. Anything else in this Agreement to
the contrary notwithstanding: 
 (a) The Advisor shall refrain from taking any action which, in its sole judgment made in good
faith, would adversely affect the status of the Company as a real estate investment trust as defined in the Code, subject the Company to regulation under the Investment Company Act of 1940, violate any law, rule or regulation or would otherwise not
be permitted by the Articles of Incorporation or Bylaws of the Company, except if such action shall be ordered by the Board of Directors, in which case the Advisor shall notify promptly the Board of Directors of the Advisor’s judgment of the
potential impact of such action and shall refrain from taking such action until it receives further clarification or instructions from the Board of Directors. Notwithstanding the foregoing, the Advisor and its stockholders, directors, officers and
employees shall not be liable to the Company, or to the Company’s Board of Directors or Shareholders for any act or omission by the Advisor, or its stockholders, directors, officers or employees except as provided in Section 16 of this
Agreement. 
  

 6 

 (b) In performing its duties and obligations under this Agreement, the Advisor shall
abide by and comply with the provisions and policies set forth in the Articles of Incorporation and Bylaws. 
 10. Relationship with Board
of Directors. Employees of the Advisor may serve as members of the Board of Directors or any committee thereof and as officers of the Company, except that no employee of the Advisor who also is a Director or officer of the Company shall receive
any compensation from the Company for serving as a Director or officer other than for reasonable reimbursement for travel and related expenses incurred in attending meetings of the Board of Directors or any committee thereof. 
 11. Fees. 
 (a) Asset
Management Fee. The Company shall pay to the Advisor quarterly, for services rendered under this Agreement, an Asset Management Fee calculated as follows: The Asset Management Fee for any calendar quarter shall be a applicable percentage of the
Total Contributions. The applicable percentage used to calculate such Asset Management Fee shall be based upon the Return Ratio, calculated on a per annum basis, for the preceding calendar quarter. The Asset Management Fee shall be as follows with
respect to any such quarter: 0.1% of Total Contributions if the Return Ratio for the preceding calendar quarter is 6.0% per annum or less; 0.15% of Total Contributions if the Return Ratio for the preceding calendar quarter is more than
6.0% per annum but not more than 8.0% per annum; and 0.25% of Total Contributions if the Return Ratio for the preceding calendar is above 8.0% per annum. If the Asset Management Fee is payable with respect to any partial calendar
quarter, it shall be prorated based on the number of days elapsed during any such partial calendar quarter. 
 (b) Payment of
Asset Management Fee. The Advisor shall compute the compensation payable to it under Section 11(a) of this Agreement within 45 days of the end of each calendar quarter. A copy of the computations made by the Advisor to calculate its
compensation shall thereafter promptly be delivered to the Board of Directors and, upon such delivery, payment of the compensation earned under Section 11(a) of this Agreement shown therein shall be due and payable within 60 days after the end
of such calendar quarter. 
 12. Expenses. 
 (a) The Company shall pay directly or reimburse the Advisor for the following expenses in addition to the compensation provided for in
this Agreement: 
 (i) all costs of personnel employed by the Company and involved in the business of the Company; 

(ii) expenses incurred in connection with the initial investment of the funds of the Company, including all direct expenses incurred in
connection with investigation and acquisition of Properties; 
  

 7 

 (iii) interest and other costs for borrowed money, including discounts, points and other
similar fees; 
 (iv) taxes and assessments on income or property and taxes as an expense of doing business; 
 (v) fees and commissions, including finder’s fees and brokerage commissions with respect to the acquisition and disposition of assets
of the Company, whether payable to an Affiliate of the Advisor or an unrelated Person, including, without limitation, costs of foreclosure, maintenance, repair and improvement of Property; 
 (vi) costs associated with insurance required in connection with the business of the Company or by the Board of Directors; 
 (vii) expenses of managing and operating real property owned by the Company, whether payable to an Affiliate of the Advisor or an
unrelated Person; 
 (viii) fees and expenses of legal counsel for the Company; 
 (ix) fees and expenses of independent auditors and accountants for the Company; 
 (x) all expenses in connection with payments to the Board of Directors or any committee thereof and meetings of the Board of Directors or
any committee thereof and Shareholders; 
 (xi) expenses associated with listing the Units on a national stock exchange or
quoting the Units on the NASDAQ National Market System if requested by the Board of Directors, or with the issuance and distribution of any additional Units of the Company at any time, such as taxes, legal and accounting fees, listing and
registration fees, and other expenses; 
 (xii) dividend and dividend distributions; 
 (xiii) expenses of organizing, revising, amending, converting, modifying or terminating the Company, the Articles of Incorporation or the
Bylaws; and 
 (xiv) expenses of maintaining communications with Shareholders, including the cost of preparation, printing,
and mailing annual reports and other Shareholder reports, proxy statements and other reports required by governmental entities; and 
 (xv) all costs and expenses associated with the office space used by the Advisor in rendering its services hereunder. 
  

 8 

 Expenses incurred by the Advisor on behalf of the Company and payable pursuant to this Section, shall be
reimbursed quarterly to the Advisor within 60 days after the end of each quarter. The Advisor shall prepare a statement documenting the expenses of the Company during each quarter, and shall deliver such statement to the Company within 45 days after
the end of each quarter. 
 (b) Except as otherwise provided herein, the Advisor shall pay all expenses of performing its
obligations under this Agreement, including, without limitation, the following expenses: 
 (i) employment expenses of the
Advisor, including, but not limited to, salaries, wages, payroll taxes, costs of employee benefit plans, and temporary help expenses, except to the extent that such expenses are otherwise reimbursable pursuant to Section 12(a) of this Agreement
or the Articles of Incorporation or Bylaws; 
 (ii) audit fees and expenses of the Advisor; 
 (iii) legal fees and other expenses of professional services to the Advisor; 
 (iv) rent, telephone, utilities and other office expenses of the Advisor; 
 (v) insurance of the Advisor; and 
 (vi) all other administrative expenses of the Advisor. 
 13. Limitation on the Advisor’s Investment
Advice. Notwithstanding anything to the contrary in this Agreement, the Advisor shall not be required to, and shall not, advise the Company as to any investments in securities, except when, and to the extent that, the Advisor and the Company
specifically agree (i) that such advice is desirable, and (ii) that such advice can be rendered consistently with applicable legal requirements, including any applicable provisions of relevant “investment advisor” laws.

 14. Other Services. Should the Board of Directors request that the Advisor or any employee thereof render material services for the
Company other than set forth in Section 2, such services shall be separately compensated and shall not be deemed to be services pursuant to the terms of this Agreement. 
 15. Limitation on Operating Expenses. Within 120 days from the end of any Calendar Year, the Advisor shall refund to the Company the amount, if
any, by which the Operating Expenses of the Company, excluding extraordinary nonrecurring items and those items referred to in Section 14, during such Calendar Year exceeded the greater of either of the following limitations: 
 (a) 2% of the Average Invested Assets of the Company for such Calendar Year; or 
  

 9 

 (b) 25% of the Company’s Company Net Income for such Calendar Year, determined in
accordance with generally accepted accounting principles. 
 The Directors of the Company may determine that, because of unusual and
nonrecurring factors which they deem sufficient, a higher level of Operating Expenses is justified for such Calendar Year. The Advisor shall be promptly reimbursed for any payments made under this Section 15 if, in any succeeding Calendar Year,
the Operating Expenses of the Company are less than the permitted level of Operating Expenses. 
 16. Advisory Responsibility. The
Advisor assumes no responsibility under this Agreement other than to render the services called for hereunder in good faith and with integrity, and shall not be responsible for any action of the Company in following or declining to follow any advice
or recommendation of the Advisor. Neither the Advisor, its shareholders, directors, officers nor employees nor any of its Affiliates, nor any Person contracting with the Advisor for services and its shareholders, directors, officers and employees
nor any of its Affiliates shall be liable to the Company or its Shareholders, except by reason of acts constituting gross negligence or willful misconduct. The Advisor hereby agrees to look solely to the assets of the Company for satisfaction of all
claims against the Company, and in no event shall any Shareholder, Director, officer or agent of the Company have any personal liability for the obligation of the Company under this Agreement. 
 17. Incorporation of the Articles of Incorporation and Bylaws. To the extent the Articles of Incorporation and Bylaws impose obligations or
restrictions on the Advisor or grant the Advisor certain rights which are not set forth in this Agreement, the Advisor shall abide by such obligations or restrictions and such rights shall inure to the benefit of the Advisor with the same force and
effect as if they were set forth herein. 
 18. Fiduciary Duty and Indemnification. Subject to Section 16, the Advisor shall have
a fiduciary relationship to the Shareholders. However, the Company shall indemnify the Advisor, to the fullest extent permitted by law, for its liabilities and losses arising from the operations of the Company (including its costs and expenses,
including legal fees and expenses, incurred in connection with investigating and defending itself against such liabilities and losses) if the following conditions are met: 
 (a) the Directors have determined, in good faith, that the course of conduct which caused the liability or loss was undertaken in good
faith within what the Advisor reasonably believed to be the scope of its employment or authority and for a purpose which it reasonably believed to be in the best interests of the Company; 
 (b) the Directors have determined, in good faith, that the liability or loss was not the result of willful misconduct, bad faith, reckless
disregard of duties or violation of the criminal law on the part of the Advisor; and 
 (c) the indemnified amount is
recoverable only out of the assets of the Company and not from the Shareholders. 
  

 10 

 Notwithstanding the foregoing, indemnification will not be allowed for any liability imposed by judgment,
and costs associated therewith, including attorneys’ fees, arising from or out of a violation of state or federal securities laws associated with the Offering of the Units unless (i) there has been a successful adjudication on the merits
of each count involving alleged securities laws violations as to the particular indemnitee, or (ii) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the particular indemnitee or
(iii) a court of competent jurisdiction approves a settlement of the claims against a particular indemnitee. 
 19. Transactions
between the Advisor and the Company. All transactions between the Advisor and the Company shall require the approval by a majority of the Directors and shall otherwise comply with the conflict of interest provisions of the Bylaws. 
 20. Relationship of Advisor and Company. The Company and the Advisor are not partners or joint ventures with each other, and nothing herein shall
be construed to make them such partners or joint ventures or impose any liability as such on either of them. 
 21. Other Activities.
Except as otherwise expressly provided herein, nothing contained herein shall limit the right of the Advisor or any of its officers, directors or employees, whether or not a Director, officer or employee of the Company, to engage in other business
activities or to render services of any kind to any other Person even if such other business activities or services may be in direct competition with the Company. 
 22. Term; Termination of Agreement. 
 (a) This Agreement shall have an initial term
ending seven years after March 2, 2006, and thereafter shall be renewed for additional two-year terms upon the consent of the Directors. 
 (b) Prior to any renewal of this Agreement, the Directors shall review (i) the performance of the Advisor hereunder to determine its compliance with the provisions of this Agreement, and (ii) the fees
payable to the Advisor hereunder to determine whether they are reasonable in relation to the nature and quality of services performed. The findings of the Directors shall be recorded in the minutes of the Directors. 
 (c) This Agreement shall be terminable (i) without cause by the Advisor or (ii) without cause by a majority of the Directors, in
each case upon 60 days’ prior written notice to the non-terminating party. 
 (d) In the event of the termination of the
Advisor, the Advisor will cooperate with the Company and take all reasonable steps requested to assist the Directors in making an orderly transition of the advisory function to another Person. 
 (e) At the sole option of a majority of the Directors, this Agreement may be terminated for cause by written notice of termination from
the Company to the Advisor if any of the following events occur: 
 (i) if the Advisor shall violate or default in the
performance of any material provision of this Agreement and, after written notice of such violation or default, shall not cure such violation or default within 30 days; 
  

 11 

 (ii) if the Advisor shall be adjudged bankrupt or insolvent by a court of competent
jurisdiction, or an order shall be made by a court of competent jurisdiction for the appointment of a receiver, liquidator or trustee of the Advisor, or of all or substantially all of its property by reason of the foregoing, or approving any
petition filed against the Advisor for reorganization, and such adjudication or order shall remain in force or unstayed for a period of 30 days; or 
 (iii) if the Advisor shall institute proceedings for voluntary bankruptcy or shall file a petition seeking reorganization under the federal bankruptcy laws, or for relief under any law for relief of debtors, or shall
consent to the appointment of a receiver for itself or for all or substantially all of its property, or shall make a general assignment for the benefit of its creditors, or shall admit in writing its inability to pay its debts, generally, as they
become due. 
 (f) Any notice of termination under this Section shall (except to the extent this Section requires a different
notice period) be effective on the date specified in such notice, which may be the day on which such notice is given or any date thereafter. The Advisor agrees that if any of the events specified in subparagraph (ii) or (iii) of
Section 22(e) shall occur, it shall give written notice thereof to the Board of Directors within 5 days after the occurrence of such event. 
 23. Action Upon Termination. 
 (a) From and after the effective date of termination of this Agreement
pursuant to Section 22 hereof, the Advisor shall not be entitled to compensation for further services rendered hereunder, but shall be entitled to receive from the Company within 30 days after the effective date of such termination, an amount
in cash equal to all earned but unpaid Asset Management Fees payable to the Advisor prior to the termination of this Agreement. 
 (b) Within a reasonable period of time, but in no event later than 30 days after the termination of this Agreement, the Advisor shall: 
 (i) pay over to the Company all money collected and held for the account of the Company pursuant to this Agreement, after deducting any accrued compensation and reimbursement for its expenses to which it is then
entitled; 
 (ii) deliver to the Board of Directors a full accounting, including a statement showing all payments collected by
it and a statement of all money held by it, covering the period following the date of the last accounting furnished to the Board of Directors; and 
 (iii) deliver to the Board of Directors all property and documents of the Company then in the custody of the Advisor. 
  

 12 

 The Advisor shall be entitled to receive, promptly after such 30-day period, reimbursement for any
additional expenses to which it is entitled (and for which it has not been reimbursed under clause (i) of Section 23(b)). 
 24.
Assignment. This Agreement may be assigned by the Advisor with the approval of a majority of the Board of Directors; provided, however, that such approval shall not be required in the case of an assignment to a corporation, association, trust
or organization which may take over the assets and carry on the affairs of the Advisor, provided that at the time of such assignment, such successor organization shall be owned substantially by the Advisor or its Affiliates and that an officer of
the Advisor shall deliver to the Board of Directors a statement in writing indicating the ownership structure of the successor organization. Such an assignment shall bind the assignees hereunder in the same manner as the Advisor is bound hereunder
and the assignee shall be entitled to any and all rights under this Agreement, including those set forth in section 18. Upon assignment of this Agreement, the Advisor shall be discharged from its future duties and shall not be entitled to any of the
rights granted under this Agreement. This Agreement shall not be assigned by the Company without the consent of the Advisor, except in the case of an assignment by the Company to a corporation or other organization which is a successor to the
Company, in which case such successor organization shall be bound hereunder and by the terms of said assignment in the same manner as the Company is bound hereunder. 
 25. Bylaws. The execution and performance of this Agreement hereby is expressly made subject to Article VIII of the Bylaws of the Company. 
 26. Notices. Any notice, report or other communication required or permitted to be given hereunder shall be in writing unless some other method of
giving such notice, report or other communication is accepted by the party to whom it is given, and shall be given by being delivered to the addresses set forth herein: 
 To the Board of Directors or to the Company: 
 Apple REIT Seven, Inc. 
 814 East Main Street 
 Richmond, Virginia
23219 
 Attn: Board of Directors 
 To the
Advisor: 
 Apple Seven Advisors, Inc. 
 814 East Main Street 
 Richmond, Virginia 23219 
 Attn: Glade M. Knight 
 Either party may at any time give notice in writing to the other party of a change in its address
for the purposes of this Section. 
 27. Modification. This Agreement shall not be changed, modified, amended, terminated or
discharged, in whole or in part, except by an instrument in writing signed by both parties hereto, or their respective successors or assigns. 
  

 13 

 28. Shareholder Liability. No Shareholder of the Company shall be personally liable for any of the
obligations of the Company under this Agreement. 
 29. Severability. The provisions of this Agreement are independent of and
severable from each other, and no provision shall be affected or rendered invalid or unenforceable by virtue of the fact that for any reason any other or others of them may be invalid or unenforceable in whole or in part. 
 30. Binding. This Agreement shall bind any successors or permitted assigns of the parties hereto as herein provided. 
 31. Construction. The provisions of this Agreement shall be construed and interpreted in accordance with the laws of the Commonwealth of Virginia.

 32. Entire Agreement. This Agreement contains the entire agreement and understanding among the parties hereto with respect to the
subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof. The express terms
hereof control and supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof. 
 33.
Indulgences, Not Waivers. Neither the failure nor any delay on the part of a party to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any
right, remedy, power or privilege preclude any other or further exercise of the same or of any other right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a
waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver. 
 34. Gender. Words used herein regardless of the number and gender specifically used, shall be deemed and construed to include any other number,
singular or plural, and any other gender, masculine, feminine or neuter, as the context requires. 
 35. Titles Not to Affect
Interpretation. The titles of sections and subsections contained in this Agreement are for convenience only, and they neither form a part of this Agreement nor are they to be used in the construction or interpretation hereof. 
 36. Execution in Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall together constitute one and the same instrument. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the
signatures of all of the parties reflected hereon as the signatories. 
  

 14 

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement by their duly authorized officers as
of the date first written above. 
  

			
	 APPLE REIT SEVEN, INC.
 a Virginia
corporation

		
	By:	 	/s/ Glade M. Knight 
	 Title:
	 	 Glade M. Knight, President

  

			
	 APPLE SEVEN ADVISORS, INC.,
 a Virginia
corporation

		
	By:	 	/s/ Glade M. Knight
	 Title:
	 	 Glade M. Knight, President

  

 15

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00102-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00102-of-00352.parquet"}]]