Document:

Exhibit 10.2

Exhibit 10.2

DIAMONDROCK HOSPITALITY COMPANY

$75,000,000 OF COMMON STOCK

CONTROLLED EQUITY OFFERINGSM

SALES AGREEMENT

October 19, 2009

CANTOR FITZGERALD & CO.

499 Park Avenue

New York, New York 10022

Ladies and Gentlemen:

DIAMONDROCK HOSPITALITY COMPANY, a Maryland corporation (the “Company”), DIAMONDROCK
HOSPITALITY LIMITED PARTNERSHIP, a Delaware limited partnership (the “Partnership”) and Cantor
Fitzgerald & Co. (“CF&Co”), were each a party to that certain Sales Agreement dated July 27, 2009
(the “July 2009 Agreement”) providing for the issuance and sale of shares (the “Original Placement
Shares”) of the Company’s common stock, par value $0.01 per share (the “Common Stock”). The July
2009 Agreement was terminated prior to the date hereof pursuant to Section 11(d) of the July 2009
Agreement upon the issuance and sale of all of the Original Placement Shares through CF&Co.

The parties hereto now desire to enter into a new agreement providing for the issuance and
sale of Common Stock. In connection therewith, the Company and the Partnership confirm their
respective agreements (this “Agreement”) with CF&Co as follows:

1. Issuance and Sale of Shares. The Company agrees that, from time to
time during the term of this Agreement, on the terms and subject to the conditions set forth
herein, it may issue and sell through CF&Co, acting as agent and/or principal, shares of the
Company’s Common Stock having an aggregate offering price of up to $75,000,000 (the “Shares”).
Notwithstanding anything to the contrary contained herein, the parties hereto agree that compliance
with the limitation set forth in this Section 1 on the number of Shares issued and sold under this
Agreement shall be the sole responsibility of the Company, and CF&Co shall have no obligation in
connection with such compliance. The issuance and sale of Shares through CF&Co will be effected
pursuant to the Registration Statement (as defined below) filed by the Company that became
effective upon filing with the Securities and Exchange Commission (the “Commission”), although
nothing in this Agreement shall be construed as requiring the Company to use the Registration
Statement (as defined below) to issue the Shares.

The Company has filed, in accordance with the provisions of the Securities Act of 1933, as
amended, and the rules and regulations thereunder (collectively, the “Securities Act”), with the
Commission an automatic shelf registration statement on Form S-3 (File No. 333-161298), including a
base prospectus dated August 12, 2009, relating to certain securities, including the Shares, to be
issued from time to time by the Company, and which incorporates by reference documents that the
Company has filed or will file in accordance with the provisions of the Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder (collectively, the “Exchange Act”). The
Company has prepared a prospectus supplement specifically

 

 

relating to the Shares (the “Prospectus Supplement”) to
the base prospectus included as part of such registration statement. The Company has furnished to
CF&Co, for use by CF&Co, copies of the prospectus included as part of such registration statement,
as supplemented by the Prospectus Supplement, relating to the Shares. Except where the context
otherwise requires, such registration statement, on each date and time that such registration
statement and any post-effective amendment thereto became or becomes effective, including all
documents filed as part thereof or incorporated by reference therein, and including any information
contained in a Prospectus (as defined below) subsequently filed with the Commission pursuant to
Rule 424(b) under the Securities Act deemed to be a part of such registration statement pursuant to
Rule 430B or 462(b) of the Securities Act, is herein called the “Registration Statement.” The base
prospectus, including all documents incorporated therein by reference, included in the Registration
Statement, as it may be supplemented by the Prospectus Supplement, in the form in which such
prospectus and/or Prospectus Supplement have most recently been filed by the Company with the
Commission pursuant to Rule 424(b) under the Securities Act, together with any “issuer free writing
prospectus,” as defined in Rule 433 of the Securities Act Regulations (“Rule 433”), relating to the
Shares that (i) is required to be filed with the Commission by the Company or (ii) is exempt from
filing pursuant to Rule 433(d)(5)(i), in each case in the form filed or required to be filed with
the Commission or, if not required to be filed, in the form retained in the Company’s records
pursuant to Rule 433(g) (“Issue Free Writing Prospectus”), is herein called the “Prospectus.” Any
reference herein to the Registration Statement, the Prospectus or any amendment or supplement
thereto shall be deemed to refer to and include the documents incorporated by reference therein,
and any reference herein to the terms “amend,” “amendment” or “supplement” with respect to the
Registration Statement or the Prospectus shall be deemed to refer to and include the filing after
the execution hereof of any document with the Commission deemed to be incorporated by reference
therein. For purposes of this Agreement, all references to the Registration Statement, the
Prospectus or to any amendment or supplement thereto shall be deemed to include any copy filed with
the Commission pursuant to either the Electronic Data Gathering Analysis and Retrieval System or
Interactive Data Electronic Applications (collectively “IDEA”).

The Company owns 100% of the partnership interests of the Partnership and is the sole general
partner of the Partnership. The Partnership directly or indirectly owns twenty (20) hotels as
described in the Prospectus (individually a “Hotel” and collectively, the “Hotels”). The
Partnership (or one of its subsidiaries) leases each of the Hotels to a wholly-owned subsidiary (a
“Lessee”), pursuant to a separate lease (collectively, the “Leases”). All of the Hotels are
operated and managed by a manager (the “Manager”) pursuant to separate management agreements
(collectively, the “Management Agreements”), each between a Lessee and the Manager, with the
exception of the Frenchman’s Reef & Morning Star Marriott Beach Resort property (which does not
operate under a lessee structure). The Leases and the Management Agreements are referred to
herein, collectively, as the “Hotel Agreements.”

2. Placements. Each time that the Company wishes to issue and sell the
Shares hereunder (each, a “Placement”), it will notify CF&Co by email notice (or other method
mutually agreed to in writing by the parties) (a “Placement Notice”) containing the parameters in
accordance with which it desires the Shares to be sold, which shall at a minimum include the number
of Shares to be issued (the “Placement Shares”), the time period during which sales are requested
to be made, any limitation on the number of Shares that may be sold in any one Trading Day (as
defined in Section 3) and any minimum price below which sales may not be made, a form of which
containing such minimum sales parameters necessary is attached hereto as Schedule 1. The
Placement Notice shall originate from any of the individuals from the Company set forth on Schedule
2 (with a copy to each of the other individuals from the Company listed on such schedule), and
shall be addressed to each of the individuals from CF&Co set forth on Schedule 2, as such Schedule
2 may be amended from time to time. The Placement Notice shall be effective upon receipt by CF&Co
unless and until (i) in accordance with the notice requirements set forth in Section 4, CF&Co
declines to accept the terms contained therein for any reason, in its sole discretion, (ii) the entire amount of the Placement Shares have been

 

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sold, (iii) in accordance
with the notice requirements set forth in Section 4, the Company suspends or terminates the
Placement Notice, (iv) the Company issues a subsequent Placement Notice with parameters superseding
those on the earlier dated Placement Notice, or (v) the Agreement has been terminated under the
provisions of Section 11. The amount of any discount, commission or other compensation to be
paid by the Company to CF&Co in connection with the sale of the Placement Shares shall be
calculated in accordance with the terms set forth in Schedule 3. It is expressly acknowledged and
agreed that neither the Company nor CF&Co will have any obligation whatsoever with respect to a
Placement or any Placement Shares unless and until the Company delivers a Placement Notice to CF&Co
and CF&Co does not decline such Placement Notice pursuant to the terms set forth above, and then
only upon the terms specified therein and herein. In the event of a conflict between the terms of
this Agreement and the terms of a Placement Notice, the terms of the Placement Notice will control.

3. Sale of Placement Shares by CF&Co. Subject to the terms and
conditions herein set forth, upon the Company’s issuance of a Placement Notice, and unless the sale
of the Placement Shares described therein has been declined, suspended, or otherwise terminated in
accordance with the terms of this Agreement, CF&Co., for the period specified in the Placement
Notice, will use its commercially reasonable efforts consistent with its normal trading and sales
practices and applicable state and federal laws, rules and regulations and the rules of the New
York Stock Exchange (the “NYSE”) to sell such Placement Shares up to the amount specified, and
otherwise in accordance with the terms of such Placement Notice. CF&Co will provide written
confirmation to the Company (including by email correspondence to each of the individuals of the
Company set forth on Schedule 2, if receipt of such correspondence is actually acknowledged by any
of the individuals to whom the notice is sent, other than via auto-reply) no later than the opening
of the Trading Day (as defined below) immediately following the Trading Day on which it has made
sales of Placement Shares hereunder setting forth the number of Placement Shares sold on such day,
the compensation payable by the Company to CF&Co pursuant to Section 2 with respect to such sales,
and the Net Proceeds (as defined below) payable to the Company, with an itemization of the
deductions made by CF&Co (as set forth in Section 5(a)) from the gross proceeds that it receives
from such sales. CF&Co may sell Placement Shares by any method permitted by law deemed to be an
“at the market” offering as defined in Rule 415 of the Securities Act, including without limitation
sales made directly on the NYSE, on any other existing trading market for the Common Stock or to or
through a market maker. After consultation with the Company, CF&Co may also sell Placement Shares
in privately negotiated transactions. The Company acknowledges and agrees that (i) there can be no
assurance that CF&Co will be successful in selling Placement Shares, and (ii) CF&Co will incur no
liability or obligation to the Company or any other person or entity if it does not sell Placement
Shares for any reason other than a failure by CF&Co to use its commercially reasonable efforts
consistent with its normal trading and sales practices to sell such Placement Shares as required
under this Section 3. For the purposes hereof, “Trading Day” means any day on which the Company’s
Common Stock is purchased and sold on the principal market on which the Common Stock is listed or
quoted.

4. Suspension of Sales. The Company or CF&Co may, upon notice to the
other party in writing (including by email correspondence to each of the individuals of the other
party set forth on Schedule 2, if receipt of such correspondence is actually acknowledged by any
of the individuals to whom the notice is sent, other than via auto-reply) or by telephone
(confirmed immediately by verifiable facsimile transmission or email correspondence to each of the
individuals of the other party set forth on Schedule 2), suspend any sale of Placement Shares;
provided, however, that such suspension shall not affect or impair either party’s obligations with
respect to any Placement Shares sold hereunder prior to the receipt of such notice. Each of the
Parties agrees that no such notice under this Section 4 shall be effective against the other unless
it is made to one of the individuals named on Schedule 2 hereto, as such schedule may be amended
from time to time.

 

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5. Settlement.

(a) Settlement of Placement Shares. Unless otherwise specified in the
applicable Placement Notice, settlement for sales of Placement Shares will occur on the third (3rd)
Trading Day (or such earlier day as is industry practice for regular-way trading) following the
date on which such sales are made (each, a “Settlement Date”). The amount of proceeds to be
delivered to the Company on a Settlement Date against receipt of the Placement Shares sold (the
“Net Proceeds”) will be equal to the aggregate sales price received by CF&Co at which such
Placement Shares were sold, after deduction for (i) CF&Co’s commission, discount or other
compensation for such sales payable by the Company pursuant to Section 2 hereof, (ii) any other
amounts due and payable by the Company to CF&Co hereunder pursuant to Section 7(g) hereof, and
(iii) any transaction fees imposed by any governmental or self-regulatory organization in respect
of such sales.

(b) Delivery of Placement Shares. On or before each Settlement Date, the
Company will, or will cause its transfer agent to, electronically transfer the Placement Shares
being sold by crediting CF&Co’s or its designee’s account (provided CF&Co shall have given the
Company written notice of such designee prior to the Settlement Date) at The Depository Trust
Company through its Deposit and Withdrawal at Custodian System or by such other means of delivery
as may be mutually agreed upon by the parties hereto which in all cases shall be freely tradeable,
transferable, registered shares in good deliverable form. On each Settlement Date, CF&Co will
deliver the related Net Proceeds in same day funds to an account designated by the Company on, or
prior to, the Settlement Date. The Company agrees that if the Company, or its transfer agent (if
applicable), defaults in its obligation to deliver Placement Shares on a Settlement Date, that in
addition to and in no way limiting the rights and obligations set forth in Section 9(a) hereto, it
will (i) hold CF&Co harmless against any loss, claim, damage, or expense (including reasonable
legal fees and expenses), as incurred, arising out of or in connection with such default by the
Company and (ii) pay to CF&Co any commission, discount, or other compensation to which it would
otherwise have been entitled absent such default.

6. Representations and Warranties of the Company and the
Partnership. The Company and the Partnership, jointly and severally, represent and warrant to,
and agree with, CF&Co that as of the date of this Agreement and as of each Representation Date (as
defined in Section 7(m) below) on which a certificate is required to be delivered pursuant to
Section 7(m) of this Agreement, and as of the time of each sale of any Shares pursuant to this
Agreement (each, an “Applicable Time”), as the case may be:

(a) Status as a Well-Known Seasoned Issuer. (A) At the time of filing the Registration
Statement on August 12, 2009 and on the date of this Agreement, (B) at the time of the most recent
amendment thereto, if any, for the purposes of complying with Section 10(a)(3) of the Securities
Act (whether such amendment was by post-effective amendment, incorporated report filed pursuant to
Section 13 or 15(d) of the Exchange Act or form of prospectus), (C) at the time the Company or any
person acting on its behalf (within the meaning, for this clause only, of Rule 163(c) of the
Securities Act ) made any offer relating to the Shares in reliance on the exemption of Rule 163 of
the Securities Act and (D) at the date hereof, the Company was and is a “well-known seasoned
issuer” as defined in Rule 405 of the Securities Act (“Rule 405”), including not having been and
not being an “ineligible issuer” as defined in Rule 405. The Registration Statement is an
“automatic shelf registration statement,” as defined in Rule 405, and the Shares, since their
registration on the Registration Statement, have been and remain eligible for registration by the
Company on a Rule 405 “automatic shelf registration statement.” The Company has not received from
the Commission any notice pursuant to Rule 401(g)(2) of the Securities Act objecting to the use of
the automatic shelf registration statement form.

 

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(b) Registration Statement, Prospectus and Disclosure at Time of Sale. The
Registration Statement became effective upon filing under Rule 462(e) of the Securities Act (“Rule
462(e)”) on August 12, 2009, and any post-effective amendment thereto also became effective upon filing
under Rule 462(e). Any offer that is a written communication relating to the Shares made prior to
the filing of the original Registration Statement by the Company or any person acting on its behalf
(within the meaning, for this paragraph only, of Rule 163(c) of the Securities Act) on August 12,
2009 has been filed with the Commission in accordance with the exemption provided by Rule 163 of
the Securities Act (“Rule 163”) and otherwise complied with the requirements of Rule 163, including
without limitation the legending requirement, to qualify such offer for the exemption from
Section 5(c) of the Securities Act provided by Rule 163.

At each respective time the Registration Statement became effective, at each deemed effective
date with respect to CF&Co pursuant to Rule 430B(f)(2) of the Securities Act and as of each
Settlement Date, the Registration Statement complied and will comply in all material respects with
the requirements of the Securities Act and did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading.

Neither the Prospectus nor any amendments or supplements thereto, at the time the Prospectus
or any such amendment or supplement was issued, as of the date hereof, each Applicable Time, each
Settlement Date and each Representation Date included or will include an untrue statement of a
material fact or omitted or will omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading.
The Prospectus complied when so filed in all material respects with the Securities Act.

Each Issuer Free Writing Prospectus, if any, as of its issue date and at all subsequent times
through the completion of the public offer and sale of the Shares or until the issuer notified or
notifies CF&Co otherwise, did not, does not and will not include any information that conflicted,
conflicts or will conflict with the information contained in the Registration Statement or the
Prospectus, including any document incorporated by reference therein and any preliminary or other
prospectus deemed to be a part thereof that has not been superseded or modified.

The representations and warranties in this subsection shall not apply to statements in or
omissions from the Registration Statement, the Prospectus or any amendment or supplement thereto or
any Issuer Free Writing Prospectus made in reliance upon and in conformity with written information
furnished to the Company by CF&Co expressly for use therein.

(c) [Intentionally Omitted.]

(d) Incorporated Documents. Each document incorporated or deemed to be incorporated
by reference in the Registration Statement and the Prospectus, at the time they were or hereafter
are filed with the Commission, complied and will comply when filed in all material respects with
the requirements of the Exchange Act and, when read together with the other information in the in
the Prospectus, at the date of the Prospectus and as of each Settlement Date, if any, did not and
will not include an untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under which they were
made, not misleading; and any further documents so filed and incorporated by reference in the
Registration Statement or the Prospectus, when such documents become effective or are filed with
the Commission, as the case may be, will conform to the requirements of the Exchange Act, in all
material respects, and will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein not
misleading.

 

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(e) Offering Materials Furnished to CF&Co. The Company has delivered to
CF&Co one complete copy of the Registration Statement and a copy of each consent and certificate of
experts filed as a part thereof, and conformed copies of the Registration Statement (without
exhibits) and the Prospectus, as amended or supplemented, in such quantities and at such places as
CF&Co has reasonably requested. The Prospectus delivered to CF&Co for use in connection with the
offering of the Shares was, and any amendment or supplement thereto will be, at the time of such
delivery, identical to the electronically transmitted copies thereof filed with the Commission
pursuant to IDEA, except to the extent permitted by Regulation S-T.

(f) Offering Materials. The Company has not distributed and will not distribute,
prior to the later of the final Settlement Date, if any, or the completion of CF&Co’s distribution
of the Shares, any offering material in connection with the offering and sale of the Shares other
than the Registration Statement and the Prospectus.

(g) No Stop Order. No stop order suspending the effectiveness of the Registration
Statement or any part thereof, or any Rule 462(b) Registration Statement, has been issued and no
proceedings for that purpose have been instituted or are pending or, to the knowledge of the
Company, threatened or contemplated by the Commission or by the state securities authority of any
jurisdiction. No order preventing or suspending the use of the Prospectus has been issued and no
proceeding for that purpose has been instituted or, to the knowledge of the Company, threatened or
contemplated by the Commission or by the state securities authority of any jurisdiction, and any
request on the part of the Commission or state securities authority of any jurisdiction for
additional information has been complied with.

(h) Capitalization. The shares of Common Stock conform in all material respects to
the description thereof contained in the Registration Statement and the Prospectus; immediately
prior to the execution of this Agreement, 118,264,516 shares of Common Stock will be issued and
outstanding; all of the outstanding shares of Common Stock of the Company and the outstanding
shares of capital stock or equity interests of each subsidiary of the Company, all of which are
listed on Schedule 4 attached hereto (each, including the Partnership, except where noted, a
“Subsidiary”, and collectively, the “Subsidiaries”) have been duly and validly authorized and
issued are fully paid and nonassessable, and except as disclosed in the Registration Statement and
Prospectus, all of the outstanding shares of capital stock, partnership interests and limited
liability company membership interests, as applicable, of the Subsidiaries, including the
Partnership, are directly or indirectly owned of record and beneficially by the Company; except as
disclosed in the Registration Statement and Prospectus, there are no outstanding (i) securities or
obligations of the Company or any of the Subsidiaries convertible into or exchangeable for any
equity interests of the Company or any such Subsidiary, (ii) warrants, rights or options to
subscribe for or purchase from the Company or any such Subsidiary any such equity interests or any
such convertible or exchangeable securities or obligations or (iii) obligations of the Company or
any such Subsidiary to issue any equity interests, any such convertible or exchangeable securities
or obligation, or any such warrants, rights or options.

 

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(i) Good Standing of the Company. The Company has been duly incorporated and is
validly existing as a corporation under the laws of the State of Maryland and is in good standing
with the State Department of Assessments and Taxation of the State of Maryland, with all requisite
corporate power and authority to own, lease and operate its properties, and conduct its business as
described in the Registration Statement and the Prospectus, and is duly qualified or licensed to
transact business as a foreign entity and is in good standing in each jurisdiction in which the
nature or conduct of its business requires such qualification or license and in which the failure
to be so qualified or licensed, individually or in the
aggregate, (i) would reasonably be expected to have a material adverse effect on the
performance of this Agreement or the consummation of any transactions contemplated hereby or
(ii) would reasonably be expected to have a material adverse effect on, or result in a material
adverse change in, the condition (financial or otherwise), prospects, earnings, business or
properties of the Company and the Subsidiaries taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth or contemplated in the
Registration Statement and the Prospectus (exclusive of any supplement thereto) (any such effect or
change described in clause (ii) hereof is hereinafter called a “Material Adverse Effect”); except
for pledges of limited liability company membership interests granted in connection with the
incurrence of debt as disclosed in the Registration Statement and the Prospectus, all of the issued
and outstanding shares of common stock, capital stock, limited liability company membership
interests or partnership interests, as applicable, of each Subsidiary are owned by the Company
directly or through its Subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance or claim; except for restrictions in loan documents entered into in connection
with indebtedness, which loan documents were provided to CF&Co or its counsel, no Subsidiary is
prohibited or restricted, directly or indirectly, from (A) paying dividends to the Company, (B)
making any other distribution with respect to such Subsidiary’s capital stock, (C) repaying to the
Company or any other Subsidiary any amounts which may from time to time become due under any loans
or advances to such Subsidiary from the Company or such other Subsidiary, or (D) transferring any
such Subsidiary’s property or assets to the Company or to any other Subsidiary; other than the
Subsidiaries, the Company does not, and upon completion of the offering of the Shares will not,
own, directly or indirectly, any capital stock or other equity securities of any corporation or any
ownership interest in any partnership, limited liability company, joint venture or other entity
other than the Subsidiaries.

(j) Ownership of the Partnership; Good Standing of the Subsidiaries. The Company is
the sole general partner of the Partnership and owns, directly or indirectly, 100% of the
partnership interests (“Units”) in the Partnership; the Subsidiaries have been duly incorporated,
formed or organized, as the case may be, and are validly existing as a corporation, limited
liability company, general partnership or limited partnership, as the case may be, in good standing
under the laws of their respective jurisdictions of incorporation, formation or organization, as
applicable, with all requisite power and authority to own, lease and operate their respective
properties and to conduct their respective business as described in the Registration Statement and
the Prospectus; each Subsidiary is duly qualified or licensed to transact business as a foreign
entity and is in good standing in each jurisdiction in which the nature or conduct of its business
requires such qualification or license, and in which the failure to be so qualified or licensed,
individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.

(k) The Partnership Agreement. The Agreement of Limited Partnership of the
Partnership, as further amended and/or restated (the “Partnership Agreement”), has been duly and
validly authorized, executed and delivered by or on behalf of each of the partners of the
Partnership and constitutes a valid and binding agreement of the parties thereto, enforceable in
accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ rights generally or by general
principles of equity.

(l) Compliance with Laws. The Company, the Subsidiaries and the Hotels are in
compliance in all material respects with all applicable laws, rules, regulations, orders, decrees
and judgments, including those relating to transactions with affiliates, except where the failure
to be in compliance would not have a Material Adverse Effect.

 

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(m) Absence of Breaches and Defaults. The Company is not in violation of its Articles
of Amendment and Restatement, as amended and/or restated (the “Articles”), or its bylaws, as
amended and/or restated (the “Bylaws”); the Partnership is not in violation of its Certificate of
Limited Partnership or the Partnership Agreement; no Subsidiary is in violation of its
organizational documents (including, without limitation, partnership and limited liability company
agreements), except for such violations that, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect; neither the Company nor any Subsidiary is
in breach of or default in, nor to the knowledge of the Company and the Partnership has any event
occurred which with notice, lapse of time, or both would constitute a breach of or default in, the
performance or observance by the Company or any Subsidiary, as the case may be, of any obligation,
agreement, contract, franchise, covenant or condition contained in any license, indenture,
mortgage, deed of trust, loan or credit agreement, lease or other agreement or instrument to which
the Company or any Subsidiary is a party or by which any of them or their respective properties is
bound, except for such breaches or defaults that, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect.

(n) Absence of Conflicts. The execution, delivery and performance of this Agreement
and the other agreements listed as exhibits to the Registration Statement by the Company and the
Partnership (to the extent a party thereto) and the issuance, sale and delivery by the Company of
the Shares and the consummation of the transactions contemplated herein do not and will not
(A) conflict with, or result in any breach or constitute a default (nor constitute any event which
with notice, lapse of time or both would constitute a breach or default) (i) by the Company of any
provisions of its Articles or Bylaws, by the Partnership of any provisions of its Certificate of
Limited Partnership or Partnership Agreement, by any Subsidiary (excluding the Partnership) of any
provision of its organizational documents, or (ii) by the Company or any Subsidiary of any
provision of any obligation, agreement, contract, franchise, license, indenture, mortgage, deed of
trust, loan or credit agreement, lease or other agreement or instrument to which the Company or any
Subsidiary is a party or by which any of them or their respective properties may be bound or
affected, or (iii) by the Company or any Subsidiary under any U.S. federal, state, local or foreign
law, regulation or rule or any decree, judgment or order applicable to the Company or any
Subsidiary, except in the use of clauses (A)(ii) and (A)(iii) above, for such conflicts, breaches
or defaults that, individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect, or (B) result in the creation or imposition of any lien, charge, claim or
encumbrance upon any property or asset of the Company or any Subsidiary, except as disclosed in the
Registration Statement and the Prospectus.

(o) Company Authorization of Agreement and Offering. The Company has the full
corporate power and authority to enter into this Agreement and to consummate the transactions
contemplated herein; the Company has the corporate power to issue, sell and deliver the Shares as
provided herein; this Agreement has been duly authorized, executed and delivered by the Company and
is a legal, valid and binding agreement of the Company enforceable against the Company in
accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ rights generally, and by general
equitable principles and except as rights to indemnity and contribution thereunder may be limited
by applicable law or policies underlying such law.

(p) Partnership Authorization of Agreement and Offering. The Partnership has the full
partnership power and authority to enter into this Agreement and to consummate the transactions
contemplated herein; this Agreement has been duly authorized, executed and delivered by the
Partnership and is a legal, valid and binding agreement of the Partnership enforceable against the
Partnership in accordance with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally, and by
general equitable principles and except as rights to indemnity and contribution thereunder may be
limited by applicable law or policies underlying such law.

 

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(q) Absence of Further Requirements. No approval, authorization, consent or order of,
or registration or filing with, any U.S. federal, state or local governmental or regulatory
commission, board, body, authority or agency is required for the Company’s or the Partnership’s or
any Subsidiary’s execution, delivery and performance of this Agreement or the consummation of the
transactions contemplated herein or therein, including the sale and delivery of the Shares, other
than (A) such approvals as have been obtained, or will have been obtained before the Closing Time
or each Date of Delivery, as the case may be, under the Securities Act and the Exchange Act,
(B) such approvals as have been obtained in connection with the approval of the listing of the
Shares on the New York Stock Exchange, and (C) any necessary qualification under the securities or
blue sky laws of the various jurisdictions in which the Shares are being offered by CF&Co.

(r) Possession of Licenses and Permits. Each of the Company, the Subsidiaries, and,
to the knowledge of the Company, the Manager with respect to the Hotels, has all necessary
licenses, permits, authorizations, consents and approvals, possess valid and current certificates,
has made all necessary filings required under any federal, state or local law, regulation or rule,
and has obtained all necessary authorizations, consents and approvals from other persons, required
in order to conduct their respective businesses as described in the Registration Statement and the
Prospectus, except for such licenses, permits, authorizations, consents and other approvals the
absence of which, individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect; neither the Company nor any of the Subsidiaries, nor any Hotel nor, to the
knowledge of the Company, the Manager with respect to the Hotels, is in violation of, in default
under, or has received any notice regarding a possible violation, default or revocation of any such
certificate, license, permit, authorization, consent or approval or any federal, state, local or
foreign law, regulation or rule or any decree, order or judgment applicable to the Company, any
Subsidiary or any Hotel the effect of which, individually or in the aggregate, would reasonably be
expected to result in a Material Adverse Effect.

(s) Absence of Proceedings. Except as disclosed in the Registration Statement and the
Prospectus, there are no actions, suits, proceedings, inquiries or investigations pending or, to
the knowledge of the Company, threatened against or affecting the Company or any of its
Subsidiaries or any Hotel or, to the knowledge of the Company, the Manager with respect to the
Hotels, or which has as the subject thereof any of the respective officers and directors of the
Company or any officers, directors, managers or partners of its Subsidiaries, or to which the
properties, assets or rights of any such entity are subject, at law or in equity, before or by any
federal, state, local or foreign governmental or regulatory commission, board, body, authority,
arbitral panel or agency, that (i) would reasonably be expected to have a material adverse effect
on the performance of this Agreement or the transactions contemplated hereby or (ii) would
reasonably be expected to have a Material Adverse Effect.

 

9

 

(t) Financial Statements. The consolidated financial statements of the Company and
the Subsidiaries, including the notes thereto, included or incorporated by reference in the
Registration Statement and the Prospectus present fairly the consolidated financial position of the
respective entities to which such financial statements relate (the “Covered Entities”) as of and at
the dates indicated and the consolidated results of operations and changes in financial position
and shareholders’ equity and cash flows of the Covered Entities for the periods specified; the
supporting schedules included or incorporated by reference in the Registration Statement, if any, fairly present the information required to
be stated therein; such financial statements and supporting schedules have been prepared in
conformity with generally accepted accounting principles as applied in the United States (“GAAP”)
and on a consistent basis during the periods involved (except as may be expressly stated in the
related notes thereto) and in accordance with Regulation S-X promulgated by the Commission; the
financial data set forth or incorporated by reference in the Registration Statement and the
Prospectus fairly present the information shown therein and has been compiled on a basis consistent
with the financial statements included in the Registration Statement and the Prospectus; no other
financial statements or supporting schedules are required to be included in the Registration
Statement; all disclosures contained in the Registration Statement or the Prospectus regarding
“non-GAAP financial measures” (as such term is defined by the rules and regulations of the
Commission) comply with Regulation G of the Exchange Act and Item 10 of Regulation S-K of the
Securities Act, to the extent applicable.

(u) Independent Accountants. KPMG LLP, who has audited the financial statements of
the Covered Entities and has expressed their opinion in a report with respect to the financial
statements of the Covered Entities included or incorporated by reference in the Registration
Statement and the Prospectus, is, and was during the periods covered by its report, an independent
registered public accounting firm with respect to the Covered Entities as required by the
Securities Act.

(v) No Material Adverse Change in Business. Subsequent to the respective dates as of
which information is given in the Registration Statement and the Prospectus, and except as may be
otherwise stated in the Registration Statement or the Prospectus, there has not been (A) any
Material Adverse Effect, whether or not arising in the ordinary course of business, (B) any
probable transaction or binding agreement that is material to the Company and the Subsidiaries
taken as a whole, entered into by the Company or any of the Subsidiaries, (C) any obligation,
contingent or otherwise, directly or indirectly incurred by the Company or any Subsidiary that
could reasonably be expected to result in a Material Adverse Effect or (D) any dividend or
distribution of any kind declared, paid or made by the Company on any class of its capital stock or
repurchase or redemption by the Company of any class of capital stock.

(w) Registration Rights. Except as disclosed in the Registration Statement and the
Prospectus, there are no persons with registration or other similar rights to have any equity or
debt securities, including securities which are convertible into or exchangeable for equity
securities, registered pursuant to the Registration Statement or otherwise registered by the
Company under the Securities Act; and no person has a right of participation or first refusal with
respect to the sale of the Shares by the Company.

(x) Authorization of the Shares. The issuance and sale of the Shares to CF&Co
hereunder have been duly authorized by the Company, and when issued and duly delivered against
payment therefor as contemplated by this Agreement, the Shares will be validly issued, fully paid
and nonassessable, free and clear of any pledge, lien, encumbrance, security interest or other
claim created by or known to the Company, and the issuance and sale of the Shares by the Company is
not subject to preemptive or other similar rights arising by operation of law, under the
organizational documents of the Company or under any agreement to which the Company or any
Subsidiary is a party.

 

10

 

(y) Authorization of the Units. The issuance of the Units to the Company in exchange
for contribution of proceeds from the sale of the Shares described in the Registration Statement
and the Prospectus has been duly authorized by the Partnership, and when issued and duly delivered
against payment therefor, will be validly issued, fully paid and nonassessable, free and clear of
any pledge, lien, encumbrance, security interest or other claim created by or known to the Company
or the Partnership; and the issuance of Units by the Partnership is not subject to preemptive or
other similar rights arising by operation of law under the organizational documents of the
Partnership or under any agreement to which the Partnership is a party.

(z) Transfer Taxes. Except as disclosed in the Registration Statement and the
Prospectus, there are no transfer taxes or other similar fees or charges under Federal law or the
laws of any state or any political subdivision thereof, required to be paid in connection with the
execution and delivery of this Agreement or the issuance or sale by the Company of the Shares.

(aa) Listing on NYSE. The Shares have been registered pursuant to Section 12(b) of
the Exchange Act and as of each Settlement Date, the Shares will be duly listed and admitted and
authorized for trading on the New York Stock Exchange, subject only to official notice of issuance.

(bb) Absence of Manipulation. The Company has not taken, and will not take, directly
or indirectly, any action which is designed to or which has constituted or which might reasonably
be expected to cause or result in stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares.

(cc) FINRA. Neither the Company nor any of its affiliates (i) is required to register
as a “broker” or “dealer” in accordance with the provisions of the Exchange Act, or (ii) directly,
or indirectly through one or more intermediaries, controls or has any other association with
(within the meaning of Article I of the By-laws of the Financial Industry Regulatory Authority,
Inc. (the “FINRA”)) any member firm of the FINRA.

(dd) Legal, Tax or Accounting Advice. Neither the Company nor the Partnership has
relied upon CF&Co or legal counsel for CF&Co for any legal, tax or accounting advice in connection
with the offering and sale of the Shares.

(ee) Form of Stock Certificate. The form of certificate used to evidence the Common
Stock complies in all material respects with all applicable statutory requirements, with any
applicable requirements of the Articles and Bylaws of the Company and the requirements of the New
York Stock Exchange.

 

11

 

(ff) Title to Property. (A) The Company and the Subsidiaries have good and marketable
title in fee simple to, or a valid leasehold interest in, all real property owned or leased by them
that are material to the business as described in the Registration Statement and the Prospectus,
and good title to all personal property owned by them, in each case free and clear of all liens,
security interests, pledges, charges, encumbrances, encroachments, restrictions, mortgages and
other defects, except such as are (i) disclosed in the Registration Statement and the Prospectus or
(ii) listed as an exception to the owner’s or leasehold title insurance policies furnished by the
Company to CF&Co or its counsel or (iii) would not reasonably be expected to have a material
adverse effect on the Company’s interest in the related
property, the value of such property or the business conducted thereon; (B) any real property,
improvements, equipment and personal property held under lease by the Company or any Subsidiary are
held under valid, existing and enforceable leases, in each case, with such exceptions as are not
material and do not interfere with the use made and proposed to be made of such property by the
Company or any Subsidiary; and (C) except with respect to the Company’s corporate headquarters at
6903 Rockledge Drive, Suite 800, Bethesda, MD 20817 (the “Headquarters”), the Company or a
Subsidiary has an owner’s or leasehold title insurance policy, from a title insurance company
licensed to issue such policy, on each property described in the Registration Statement and
Prospectus as being owned or leased, as the case may be, by the Company or a Subsidiary, that
insures the Company’s or the Subsidiary’s fee simple or leasehold interest, as the case may be, in
such real property, which policies include only commercially reasonable exceptions, and with
coverages in amounts at least equal to amounts that are generally deemed in the Company’s industry
to be commercially reasonable in the markets where the Company’s properties are located.

(gg) Condition of Property. To the knowledge of the Company, all real property owned
or leased by the Company or any Subsidiary (other than the Company’s corporate headquarters office
space), whether owned in fee simple or through a joint venture or other partnership, including the
Hotels (each, a “Property” and collectively, the “Properties”), is free of any material structural
defects and all building systems contained therein are in reasonable working order in all material
respects, subject to ordinary wear and tear or, in each instance, the Company or any Subsidiary, as
the case may be, has created an adequate reserve or capital budget to effect reasonably required
repairs, maintenance and capital expenditures; to the knowledge of the Company, water, storm water,
sanitary sewer, electricity and telephone service are all available at the property lines of such
property over duly dedicated streets or perpetual easements of record benefiting such property;
except as described in the Registration Statement and the Prospectus, to the knowledge of the
Company, there is no pending or threatened special assessment, tax reduction proceeding or other
action that could have a Material Adverse Effect.

(hh) Property Leases. Except with respect to the Headquarters, each of the properties
listed in the Registration Statement and the Prospectus as a property with respect to which the
Company or one of its Subsidiaries has a leasehold interest is the subject of a lease that (A) is
in the name of the relevant Subsidiary and has been duly and validly authorized, executed and
delivered by or on behalf of the relevant Subsidiary or (B) has been assigned to a Subsidiary
pursuant to an assignment of lease which has been duly and validly authorized, executed and
delivered by or on behalf of the relevant Subsidiary and to the knowledge of the Company, by each
of the other parties thereto and each such lease constitutes a valid and binding agreement of the
parties thereto, enforceable in accordance with its terms, except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights
generally or by general principles of equity.

(ii) Disclosure of Legal Matters. The descriptions in the Registration Statement and
the Prospectus of the legal or governmental proceedings, contracts, leases and other legal
documents therein described present fairly in all material respects the information required to be
disclosed, and there are no legal or governmental proceedings, contracts, leases, or other
documents of a character required to be described in the Registration Statement or the Prospectus
or to be filed as exhibits to the Registration Statement which are not described or filed as
required; all agreements between the Company or any of the Subsidiaries and third parties expressly
referenced in the Registration Statement and the Prospectus are or will be legal, valid and binding
obligations of the Company or one or more of the Subsidiaries, enforceable in accordance with their
respective terms, except to the extent enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ rights
generally and by general equitable principles and except with respect to this Agreement to the
extent that the indemnification provisions hereof may be limited by federal or state securities
laws and public policy considerations in respect thereof; and to the best of the Company’s
knowledge, no party thereto is in, or with the passage of time or the giving of notice or both will
be in, breach or default under any of such agreements that would have a Material Adverse Effect.

 

12

 

(jj) Possession of Intellectual Property. The Company and each Subsidiary, and, to
the knowledge of the Company, the Manager with respect to the Hotels, owns or possesses adequate
and sufficient licenses or other rights to use all patents, trademarks, service marks, trade names,
copyrights, domain names, software and design licenses, approvals, trade secrets, manufacturing
processes, other intangible property rights and know-how (collectively “Intellectual Property
Rights”) necessary to entitle the Company and each Subsidiary to conduct its business as described
in the Registration Statement and Prospectus; neither the Company nor any Subsidiary has received
notice of infringement of or conflict with (and the Company knows of no such infringement of or
conflict with) asserted rights of others with respect to any Intellectual Property Rights which
would reasonably be expected to have a Material Adverse Effect; neither the Company nor any
Subsidiary is a party to or bound by any options, licenses or agreements with respect to the
Intellectual Property Rights of any other person or entity that are required to be set forth in the
Registration Statement and Prospectus and are not described as required.

(kk) Accounting and Disclosure Controls. The Company, each of the Subsidiaries and,
to the knowledge of the Company, the Manager with respect to the Hotels maintain a system of
internal accounting controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management’s general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in conformity with generally
accepted accounting principles as applied in the United States and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with management’s general or
specific authorization; (iv) the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with respect to any differences;
(v) management is made aware of all material transactions concerning the Company or its properties;
and (vi) the Company qualifies as a REIT under the requirements of the Code. The Company, each of
the Subsidiaries and, to the knowledge of the Company, the Manager with respect to the Hotels
employ disclosure controls and procedures that are designed to ensure that information required to
be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the Commission’s rules and
forms, and is accumulated and communicated to the Company’s management, including its principal
executive officer and principal financial officer, as appropriate, to allow timely decisions
regarding disclosure.

(ll) Payment of Taxes. Each of the Company and the Subsidiaries has filed on a timely
basis (including in accordance with any applicable extensions) all necessary U.S. federal, state,
local and foreign income and franchise tax returns required to be filed through the date hereof or
have properly requested extensions thereof (except in any case in which the failure so to file
would not reasonably be expected to have a Material Adverse Effect), and have paid all taxes shown
as due thereon, and if due and payable, any related or similar assessment, fine or penalty levied
against the Company or any of the Subsidiaries; no tax deficiency has been asserted against any
such entity, nor does the Company or any of the Subsidiaries know of any tax deficiency which is
likely to be asserted against any such entity which, if determined adversely to any such entity,
would reasonably be expected to have a Material Adverse Effect; all such tax liabilities are
adequately provided for on the respective books of such entities.

 

13

 

(mm) Insurance. Each of the Company and the Subsidiaries maintains insurance (issued
by insurers of recognized financial responsibility) of the types and with policies in such amounts
and with such deductibles and covering such risks as are in the reasonable opinion of management
prudent for their respective businesses; all policies of insurance and fidelity or surety bonds
insuring the Company or any of its Subsidiaries or their respective businesses, assets, employees,
officers and directors are in full force and effect; the Company and its Subsidiaries are in
compliance with the terms of such policies and instruments in all material respects; and there are
no claims by the Company or any of its Subsidiaries under any such policy or instrument as to which
any insurance company is denying liability or defending under a reservation of rights clause; the
Company has no reason to believe that it or any Subsidiary will not be able (i) to renew its
existing insurance coverage as and when such policies expire or (ii) to obtain comparable coverage
from similar institutions as may be necessary or appropriate to conduct its business as now
conducted and at a cost that would not reasonably be expected to result in a Material Adverse
Effect.

(nn) Environmental Laws. The Company has obtained Phase I Environmental Audits with
respect to the Properties as described in the Registration Statement and the Prospectus and except
as otherwise disclosed in the Registration Statement and the Prospectus, (i) none of the Company,
the Partnership, any of the Subsidiaries nor, to the knowledge of the Company, any other owners of
the Properties, has used, handled, stored, treated, transported, manufactured, spilled, leaked,
released or discharged, dumped, transferred or otherwise disposed of or dealt with, Hazardous
Materials (as defined below) on, in, under or affecting any Property, except for the use, handling,
storage, and transportation of Hazardous Materials (a) necessary for the operation of the Hotels
and consistent with (1) the practice of comparable hotels in the industry and (2) the intended or
recommended use, handling, storage and transportation of such Hazardous Materials, and (b) in
compliance with applicable Environmental Statutes (as defined below); (ii) the Company, the
Partnership and the other Subsidiaries do not intend to use any Property or any subsequently
acquired properties for the purpose of using, handling, storing, treating, transporting,
manufacturing, spilling, leaking, discharging, dumping, transferring or otherwise disposing of or
dealing with Hazardous Materials, except for the use, handling, storage, and transportation of
Hazardous Materials (a) necessary for the operation of the Hotels and consistent with (1) the
practice of comparable hotels in the industry and (2) the intended or recommended use, handling,
storage and transportation of such Hazardous Materials, and (b) in compliance with applicable
Environmental Statutes; (iii) none of the Company, the Partnership, nor any of the other
Subsidiaries has received any notice of, or has any knowledge of, any occurrence or circumstance
which, with notice or passage of time or both, would give rise to a claim under or pursuant to any
federal, state or local environmental statute or regulation or under common law, pertaining to
Hazardous Materials on or originating from any Property or any assets described in the Registration
Statement and the Prospectus or any other real property owned or occupied by any such party or
arising out of the conduct of any such party or of an agent of any such party, including without
limitation a claim under or pursuant to any Environmental Statute; (iv) no Property is included or
proposed for inclusion on the National Priorities List issued pursuant to CERCLA (as defined below)
by the United States Environmental Protection Agency (the “EPA”) or, to the knowledge of the
Company, proposed for inclusion on any similar list or inventory issued pursuant to any other
Environmental Statute or issued by any other Governmental Authority (as defined below).

As used herein, “Hazardous Material” shall include, without limitation, any
flammable explosive, radioactive material, hazardous substance, hazardous material,
hazardous waste, toxic substance, asbestos or related material, as defined by any
federal, state or local environmental law, ordinance, rule or regulation including
without limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, 42 U.S.C. Sections 9601-9675 (“CERCLA”), the
Hazardous Materials Transportation Act, as amended, 49 U.S.C. Sections 1801-1819, the

 

14

 

Resource Conservation  and Recovery Act (Solid Waste Disposal Act), as amended, 42
U.S.C. Sections 6901-6992k, the Emergency Planning and Community Right-to-Know Act
of 1986, 42 U.S.C. Sections 11001-11050, the Toxic Substances Control Act, as
amended, 15 U.S.C. Sections 2601-2692, the Federal Insecticide, Fungicide and
Rodenticide Act, as amended, 7 U.S.C. Sections 136-136y, the Clean Air Act, as
amended, 42 U.S.C. Sections 7401-7671q, the Clean Water Act (Federal Water Pollution
Control Act), as amended, 33 U.S.C. Sections 1251-1387, the Safe Drinking Water Act,
as amended, 42 U.S.C. Sections 300f-300j-26, and the Occupational Safety and Health
Act, as amended, 29 U.S.C. Sections 651-678, as any of the above statutes may be
amended from time to time, and in the regulations promulgated pursuant to each of
the foregoing (individually, an “Environmental Statute”) or by any federal, state or
local governmental authority having or claiming jurisdiction over the properties and
assets described in the General Disclosure Package and the Prospectus (a
“Governmental Authority”).

(oo) Environmental Liabilities. To the knowledge of the Company, there are no costs
or liabilities associated with the Properties pursuant to any Environmental Statute (including,
without limitation, any capital or operating expenditures required for clean-up, closure of
properties or compliance with any Environmental Statute or any permit, license or approval, any
related constraints on operating activities and any potential liabilities to third parties) which
would reasonably be expected to have a Material Adverse Effect.

(pp) Independent Appraisals and Environmental Reports. To the knowledge of the
Company, none of the entities that prepared appraisals of the Properties, nor the entities that
prepared Phase I or other environmental assessments with respect to any Property, was employed for
such purpose on a contingent basis or has any substantial interest in the Company or any of the
Subsidiaries, and none of their directors, officers or employees is connected with the Company or
any of the Subsidiaries as a promoter, selling agent, officer, director or employee.

(qq) Anti-Discrimination Laws. None of the Company, the Partnership or any Subsidiary
or, to the knowledge of the Company, the Manager, with respect to the Hotels, is in violation of or
has received notice of any violation with respect to any U.S. federal or state law relating to
discrimination in the hiring, termination, promotion, terms or conditions of employment or pay of
employees, nor any applicable U.S. federal or state wages and hours law, the violation of any of
which would reasonably be expected to have a Material Adverse Effect.

(rr) ERISA. Any “employee benefit plan” (as defined under the Employee Retirement
Income Security Act of 1974, as amended, and the regulations and published interpretations
thereunder (collectively, “ERISA”)) established or maintained by the Company, the Subsidiaries or
their “ERISA Affiliates” (as defined below) or to which the Company, the Subsidiaries or their
ERISA Affiliates contribute or are required to contribute are in compliance in all material
respects with ERISA; “ERISA Affiliate” means any trade or business, whether or not incorporated,
which with the Company or a Subsidiary is treated as a single employer under Section 414(b), (c),
(m) or (o) of the Internal Revenue Code of 1986, as amended, and the rules and regulations
promulgated thereunder (the “Code”); no such employee benefit plan is subject to Section 412 of the
Code, Section 302 of ERISA or Title IV of ERISA; all contributions required to have been made under
each such employee benefit plan have been made on a timely basis; there has been no “prohibited
transaction” (as defined in Section 4975 of the Code or
Section 406 or 407 of ERISA) for which the Company, the Subsidiaries or their ERISA Affiliates
have any material liability; and each such employee benefit plan that is intended to be qualified
under Section 401(a) of the Code is so qualified and to the knowledge of the Company, nothing has
occurred, whether by action or failure to act, which would reasonably be expected to cause the loss
of such qualification, in each case, except as disclosed in the Registration Statement and the
Prospectus.

 

15

 

(ss) Anti-Bribery Laws. Neither the Company nor any of the Subsidiaries nor, to the
knowledge of the Company any officer, director, manager or director purporting to act on behalf of
the Company or any of the Subsidiaries has at any time (i) made any contributions to any candidate
for political office, or failed to disclose fully any such contributions, in violation of law,
(ii) made any payment to any U.S. federal, state, local or foreign governmental officer or
official, or other person charged with similar public or quasi-public duties, other than payments
required or allowed by applicable law and the Company’s Code of Business Conduct provided to CF&Co
or its counsel, or (iii) engaged in any transactions, maintained any bank account or used any
corporate funds except for transactions, bank accounts and funds which have been and are reflected
in the normally maintained books and records of the Company and the Subsidiaries.

(tt) Loans to Certain Related Parties. Except as otherwise disclosed in the
Registration Statement and the Prospectus, there are no outstanding loans or advances or material
guarantees of indebtedness by the Company or any of the Subsidiaries to or for the benefit of any
of the officers, directors, managers or trustees of the Company or any of the Subsidiaries or any
of the members of the families of any of them.

(uu) Sarbanes-Oxley Act. There is and has been no failure on the part of the Company
or any of the Company’s directors or officers, in their capacities as such, to comply with any
provision of the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations promulgated
by the Commission thereunder (the “Sarbanes-Oxley Act”), including Section 402 related to loans,
Section 404 related to internal controls and Sections 302 and 906 related to certifications.

(vv) Money Laundering Laws. The operations of the Company and its Subsidiaries are
and have been conducted at all times in compliance with applicable financial recordkeeping and
reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended,
the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any
related or similar rules, regulations or guidelines, issued, administered or enforced by any
governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding
by or before any court or governmental agency, authority or body or any arbitrator involving the
Company or any of its Subsidiaries with respect to the Money Laundering Laws is pending or, to the
knowledge of the Company, threatened.

(ww) Affiliations with CF&Co. Except as disclosed in the Prospectus, the Company
(i) does not have any material lending or other relationship with any bank or lending affiliate of
CF&Co and (ii) does not intend to use any of the proceeds from the sale of the Shares hereunder to
repay any outstanding debt owed to any affiliate of CF&Co.

 

16

 

(xx) Compliance with Securities Laws. All securities issued by the Company have been
issued and sold in compliance with (i) all applicable federal and state securities laws and (ii)
the requirements of the New York Stock Exchange. The Company is in compliance in all material
respects with the current listing standards of the New York Stock Exchange.

(yy) Rights and Actions Affecting Properties. To the knowledge of the Company, each
of the Properties complies with all applicable zoning laws, ordinances, regulations and deed
restrictions or other covenants in all material respects; if and to the extent there is a failure
to comply, such failure, individually or in the aggregate, could not reasonably be expected to have
a Material Adverse Effect and will not result in a forfeiture or reversion of title; to the
knowledge of the Company, there is no pending or threatened condemnation, zoning change, or other
similar proceeding or action that will in any material respect affect the size of use of,
improvements on, construction on or access to any of the Properties, except such zoning changes,
proceedings or actions that, individually or in the aggregate, would not have a Material Adverse
Effect; all liens, charges, encumbrances, claims, or restrictions on or affecting the properties
and assets (including the Properties) of the Partnership or any of the Subsidiaries that are
required to be described in the Registration Statement and the Prospectus are disclosed therein; to
the knowledge of the Company, no lessee, licensee, concessionaire or vendor of any portion of any
of the Properties is in default under any of the leases or licenses governing such properties and
there is no event which, but for the passage of time or the giving of notice or both could
constitute a default under any of such leases or licenses, except such defaults that would not
reasonably be expected to have a Material Adverse Effect; no person has an option or right of first
refusal to purchase all or any part of any Hotel, or any interest therein, which option or right is
required to be described in the Registration Statement or the Prospectus and which option or right
is not so described.

(zz) Convertible Property Interests. The mortgages and deeds of trust encumbering the
Hotels are not convertible into equity interests in the property, nor will the Company or the
Partnership hold a participating interest therein and such mortgages and deeds of trust are not
cross-defaulted or cross-collateralized to any property not to be owned directly or indirectly by
the Company or the Partnership.

(aaa) Finder’s Fees. The Company has not incurred any liability for any finder’s fees
or similar payments in connection with the transactions herein contemplated.

(bbb) Related Party Transactions. No relationship, direct or indirect, exists between
or among the Company or any of the Subsidiaries on the one hand, and the directors, officers,
trustees, managers, shareholders, partners, customers or suppliers of the Company or any of the
Subsidiaries on the other hand, which is required to be described in the Registration Statement and
the Prospectus and which is not so described.

(ccc) Investment Company Act. Neither the Company nor any of the Subsidiaries is, and
after giving effect to the offering and sale of the Shares and the use of the proceeds as described
under the caption “Use of Proceeds” in the Prospectus, will be an “investment company” or an entity
“controlled” by an “investment company”, as such terms are defined in the Investment Company Act of
1940, as amended (the “Investment Company Act”).

 

17

 

(ddd) Absence of Labor Disputes. There are no existing or, to the knowledge of the
Company, threatened labor disputes with the employees of the Company or any of the Subsidiaries or,
to the knowledge of the Company, the Manager with respect to the Hotels which would reasonably be
expected to have a Material Adverse Effect.

(eee) Statistical and Market Related Data. The industry, statistical and market
related data included in the Registration Statement and the Prospectus are based on or derived from
sources available that the Company believes are reliable and, to the knowledge of the Company, such
data are accurate.

(fff) Federal Tax Status. The Company elected to be taxed as a real estate investment
trust (a “REIT”) under the Code commencing with its taxable year ended December 31, 2005;
commencing with the Company’s taxable year ended December 31, 2005, the Company has been organized
and operated in conformity with the requirements for qualification and taxation as a REIT under the
Code, and its current and proposed ownership and operations will allow the Company to continue to
satisfy the requirements for qualification and taxation as a REIT under the Code for its taxable
year ending December 31, 2009 and in the future; as long as the Partnership has only one member for
federal income tax purposes, it will be disregarded as an entity separate from the Company and if
and when the Partnership has two or more members for federal income tax purposes, the Partnership
will be treated as a partnership within the meaning of Sections 7701(a)(2) and 761(a) of the Code
and will not be treated as a publicly traded partnership taxable as a corporation under Section
7704 of the Code; the Company intends to continue to qualify as a REIT under the Code for all
subsequent years; and the Company does not know of any event that would reasonably be expected to
cause the Company to fail to qualify as a real estate investment trust under the Code for the
taxable year ending December 31, 2009 or at any time thereafter.

(ggg) Tax Disclosures. The factual description of, and the assumptions and
representations regarding, the Company’s organization and current and proposed method of operation
set forth in the Prospectus under the headings “Federal Income Tax Considerations Related to Our
REIT Election” and “Supplement to Federal Income Tax Considerations” accurately and completely
summarize the matters referred to therein in all material respects.

(hhh) Absence of Business Interruption. Neither the Company, any of its Subsidiaries,
nor any Hotel has sustained, since September 11, 2009, any loss or interference with its business
from fire, explosion, flood, hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or arbitrators’ or court or governmental action, order or
decree that would reasonably be expected to have a Material Adverse Effect, otherwise than as set
forth in the Prospectus.

(iii) CF&Co Purchases. The Company acknowledges and agrees that CF&Co has informed
the Company that CF&Co may, to the extent permitted under the Securities Act and the Exchange Act,
purchase and sell shares of Common Stock for its own account while this Agreement is in effect,
provided, that (i) no such purchase or sales shall take place while a Placement Notice is in effect
(except to the extent CF&Co may engage in sales of Placement Shares purchased or deemed purchased
from the Company as a “riskless principal” or in a similar capacity) and (ii) the Company shall not
be deemed to have authorized or consented to any such purchases or sales by CF&Co.

 

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(jjj) Ineligible Issuer. At the time of filing the Registration Statement and any
post-effective amendments thereto, at the earliest time thereafter that the Company or another
offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) of the Securities
Act) of the Shares and at the date hereof, the Company was not and is not an “ineligible issuer,”
as defined in Rule 405 of the Securities Act.

(kkk) Officer’s Certificates. Any certificate signed by any officer of the Company,
the Partnership, or any Subsidiary delivered to CF&Co or to counsel for CF&Co pursuant to or in
connection with this Agreement shall be deemed a representation and warranty by the Company and the
Partnership to CF&Co as to the matters covered thereby.

The Company acknowledges that CF&Co and, for purposes of the opinions to be delivered pursuant to
Section 7 hereof, counsel to the Company and counsel to CF&Co, will rely upon the accuracy and
truthfulness of the foregoing representations and hereby consents to such reliance.

7. Covenants of the Company and the Partnership. The Company and the
Partnership, jointly and severally, covenant and agree with CF&Co that:

(a) Registration Statement Amendments. After the date of this Agreement
and during any period in which a Prospectus relating to any Placement Shares is required to be
delivered by CF&Co under the Securities Act with respect to a pending sale of the Placement Shares
(including in circumstances where such requirement may be satisfied pursuant to Rule 172 under the
Securities Act), (i) the Company will notify CF&Co promptly, and confirm the notice in writing, of
the time when (A) any subsequent amendment to the Registration Statement, other than documents
incorporated by reference, has been filed with the Commission and/or has become effective or any
subsequent supplement to the Prospectus has been filed, (B) of the receipt of any comments from the
Commission, (C) of any request by the Commission for any amendment or supplement to the
Registration Statement, Prospectus or any document incorporated by reference therein or for
additional information and (D) the Company becomes the subject of a proceeding under Section 8A of
the Securities Act in connection with the offering of the Shares, (ii) the Company will prepare and
file with the Commission, promptly upon CF&Co’s request, any amendments or supplements to the
Registration Statement or Prospectus that, in CF&Co’s reasonable opinion, may be necessary or
advisable in connection with the distribution of the Placement Shares by CF&Co (provided, however,
that the failure of CF&Co to make such request shall not relieve the Company of any obligation or
liability hereunder, or affect CF&Co’s right to rely on the representations and warranties made by
the Company in this Agreement); (iii) the Company will not file any amendment or supplement to the
Registration Statement or Prospectus, other than documents incorporated by reference, relating to
the offering and sale of Placement Shares under this Agreement unless a copy thereof has been
submitted to CF&Co within a reasonable period of time before the filing and CF&Co has not
reasonably objected thereto (provided, however, that the failure of CF&Co to make such objection
shall not relieve the Company of any obligation or liability hereunder, or affect CF&Co’s right to
rely on the representations and warranties made by the Company in this Agreement) and the Company
will furnish to CF&Co at the time of filing thereof a copy of any document that upon filing is
deemed to be incorporated by reference into the Registration Statement or Prospectus, except for
those documents available via IDEA; and (iv) the Company will effect the filings required under
Rule 424(b) of the Securities Act, including any amendments or supplements to the Prospectus, in
the manner and within the time period required by Rule 424(b) (without reliance on Rule 424(b)(8)
of the Securities Act).

(b) Notice of Commission Stop Orders. The Company will advise CF&Co,
promptly after it receives notice or obtains knowledge thereof, of the issuance or threatened
issuance by the Commission of any stop order suspending the effectiveness of the Registration
Statement, of the suspension of the qualification of the Placement Shares for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceeding for any such purpose; and it
will use its commercially reasonable efforts to prevent the issuance of any stop order or to obtain
the lifting thereof if such a stop order should be issued.

 

19

 

(c) Delivery of Prospectus; Subsequent Changes. During any period in which
a Prospectus relating to the Placement Shares is required to be delivered by CF&Co under the
Securities Act with respect to a pending sale of the Placement Shares, (including in circumstances
where such requirement may be satisfied pursuant to Rule 172 under the Securities Act), the Company
will comply with all requirements imposed upon it by the Securities Act, as from time to time in
force, and to file on or before their respective due dates all reports and any definitive proxy or
information statements required to be filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14, 15(d) or any other provision of or under the Exchange Act. If during such period
any event occurs as a result of which the Prospectus as then amended or supplemented would include
an untrue statement of a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances then existing, not misleading, or if during
such period it is necessary to amend or supplement the Registration Statement or Prospectus to
comply with the Securities Act, the Company will promptly notify CF&Co, and confirm the notice in
writing, to suspend the offering of Placement Shares during such period and the Company will
promptly amend or supplement the Registration Statement or Prospectus (at the expense of the
Company) so as to correct such statement or omission or effect such compliance.

(d) Listing of Placement Shares. During any period in which the Prospectus
relating to the Placement Shares is required to be delivered by CF&Co under the Securities Act with
respect to a pending sale of the Placement Shares (including in circumstances where such
requirement may be satisfied pursuant to Rule 172 under the Securities Act), the Company will use
its commercially reasonable efforts to cause the Placement Shares to be listed on the Exchange and
to qualify the Placement Shares for sale under the securities laws of such jurisdictions as CF&Co
reasonably designates and to continue such qualifications in effect so long as required for the
distribution of the Placement Shares; provided, however, that the Company shall not be required in
connection therewith to qualify as a foreign corporation or dealer in securities or file a general
consent to service of process in any jurisdiction.

(e) Delivery of Registration Statement and Prospectus. The Company will
furnish to CF&Co and its counsel (at the expense of the Company) copies of the Registration
Statement, the Prospectus (including all documents incorporated by reference therein) and all
amendments and supplements to the Registration Statement or Prospectus that are filed with the
Commission during any period in which a Prospectus relating to the Placement Shares is required to
be delivered under the Securities Act (including all documents filed with the Commission during
such period that are deemed to be incorporated by reference therein), in each case as soon as
reasonably practicable and in such quantities as CF&Co may from time to time reasonably request
and, at CF&Co’s request, will also furnish copies of the Prospectus to each exchange or market on
which sales of the Placement Shares may be made; provided, however, that the Company shall not be
required to furnish any document (other than the Prospectus) to CF&Co to the extent such document
is available on IDEA.

(f) Earnings Statement. The Company will timely file such reports
pursuant to the Exchange Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes of, and to provide to
CF&Co the benefits contemplated by, the last paragraph of Section 11(a) of the Securities Act.

 

20

 

(g) Expenses. The Company, whether or not the transactions contemplated
hereunder are consummated or this Agreement is terminated, in accordance with the provisions of
Section 11 hereunder,
will pay the following expenses all incident to the performance of its obligations hereunder,
including, but not limited to, expenses relating to (i) the preparation, printing, filing and
delivery to CF&Co of the Registration Statement and each amendment and supplement thereto, of each
Prospectus and of each amendment and supplement thereto, and of this Agreement and such other
documents as may be required in connection with the offering, purchase, sale, issuance or delivery
of the Shares, (ii) the preparation, issuance and delivery of the Placement Shares, including any
stock or other transfer taxes and any stamp or other duties payable upon the sale, issuance or
delivery of the Shares to CF&Co, (iii) the qualification of the Placement Shares under securities
laws in accordance with the provisions of Section 7(d) of this Agreement, including filing fees
(provided, however, that any fees or disbursements of counsel for CF&Co in connection therewith
shall be paid by CF&Co), (iv) the printing and delivery to CF&Co of copies of the Prospectus and
any amendments or supplements thereto, and of this Agreement, (v) the fees and expenses incurred in
connection with the listing or qualification of the Placement Shares for trading on the Exchange,
(vi) the fees and expenses of any transfer agent or registrar for the Shares, and (vii) filing fees
incident to, and fees and expenses, if any, in connection with, the review of the Commission or the
FINRA.

(h) Use of Proceeds. The Company will apply the Net Proceeds in accordance
in all material respects with the statements under the caption “Use of Proceeds” in the Prospectus.

(i) Notice of Other Sales. During the pendency of any Placement Notice
given hereunder, the Company shall provide CF&Co notice, subject to CF&Co’s agreement to keep the
information in such notice confidential, as promptly as reasonably possible before it offers to
sell, contracts to sell, sells, grants any option to sell or otherwise disposes of any shares of
Common Stock (other than Placement Shares offered pursuant to the provisions of this Agreement) or
securities convertible into or exchangeable for Common Stock, warrants or any rights to purchase or
acquire Common Stock; provided, that such notice shall not be required in connection with the (i)
issuance, grant or sale of Common Stock, options to purchase shares of Common Stock or Common Stock
issuable upon the exercise of options or other equity awards pursuant to any stock option, stock
bonus or other stock plan or arrangement described in the Prospectus, (ii) the issuance of
securities, including Units, in connection with an acquisition, merger or sale or purchase of
assets or (iii) the issuance or sale of Common Stock pursuant to any dividend reinvestment plan
that the Company may adopt from time to time, provided the implementation of such is disclosed to
CF&Co in advance or (iv) any shares of common stock issuable upon the redemption of Units in the
Partnership.

(j) Change of Circumstances. The Company will, at any time during a
fiscal quarter in which the Company tenders a Placement Notice or sells Placement Shares, advise
CF&Co promptly after it shall have received notice or obtained knowledge thereof, of any
information or fact that would alter or affect in any material respect any opinion, certificate,
letter or other document provided to CF&Co pursuant to this Agreement.

(k) Due Diligence Cooperation. The Company will cooperate with any
reasonable due diligence review conducted by CF&Co or its agents in connection with the
transactions contemplated hereby, including, without limitation, providing information and making
available documents and senior corporate officers, during regular business hours and at the
Company’s principal offices, as CF&Co may reasonably request.

(l) Required Filings Relating to Placement of Placement Shares. The
Company agrees that it will (i) file and disclose in a prospectus supplement with the Commission
under the applicable paragraph of Rule 424(b) under the Securities Act (each and every filing under
Rule 424(b), a “Filing Date”) or (ii) disclose in its annual reports on Form 10-K and quarterly
reports on Form 10-Q, as applicable, the number of Shares sold through CF&Co under this Agreement,
the Net Proceeds to the
Company and the compensation paid by the Company with respect to sales of Shares pursuant to
this Agreement during the relevant period; the Company agrees to deliver such number of copies of
each such prospectus supplement (if any) to each exchange or market on which such sales were
effected as may be required by the rules or regulations of such exchange or market.

 

21

 

(m) Representation Dates; Certificate. On or prior to the date that the
first Shares are sold pursuant to the terms of this Agreement and each time the Company (i) files
the Prospectus relating to the Placement Shares or amends or supplements the Registration Statement
or the Prospectus relating to the Placement Shares (other than a prospectus supplement filed in
accordance with Section 7(l) of this Agreement) by means of a post-effective amendment, sticker, or
supplement but not by means of incorporation of document(s) by reference to the Registration
Statement or the Prospectus relating to the Placement Shares; (ii) files an annual report on Form
10-K under the Exchange Act; (iii) files its quarterly reports on Form 10-Q under the Exchange Act;
or (iv) files a report on Form 8-K containing amended financial information (other than an earnings
release, to “furnish” information pursuant to Items 2.02 or 7.01 of Form 8-K or to provide
disclosure pursuant to Item 8.01 of Form 8-K relating to the reclassifications of certain
properties as discontinued operations in accordance with Statement of Financial Accounting
Standards No. 144) under the Exchange Act (each date of filing of one or more of the documents
referred to in clauses (i) through (iv) shall be a “Representation Date”); the Company shall
furnish CF&Co with a certificate, in the form attached hereto as Exhibit 7(m) within three
(3) Trading Days of any Representation Date if requested by CF&Co. The requirement to provide a
certificate under this Section 7(m) shall be waived for any Representation Date occurring at a time
at which no Placement Notice is pending, which waiver shall continue until the earlier to occur of
the date the Company delivers a Placement Notice hereunder (which for such calendar quarter shall
be considered a Representation Date) and the next occurring Representation Date. Notwithstanding
the foregoing, if the Company subsequently decides to sell Placement Shares following a
Representation Date when the Company relied on such waiver and did not provide CF&Co with a
certificate under this Section 7(m), then before the Company delivers the Placement Notice or CF&Co
sells any Placement Shares, the Company shall provide CF&Co with a certificate, in the form
attached hereto as Exhibit 7(m), dated the date of the Placement Notice.

(n) Legal Opinion. On or prior to the date that the first Shares are sold
pursuant to the terms of this Agreement and within three (3) Trading Days of each Representation
Date with respect to which the Company is obligated to deliver a certificate in the form attached
hereto as Exhibit 7(m) for which no waiver is applicable, the Company shall cause to be
furnished to CF&Co (i) the written opinions of Goodwin Proctor LLP (“Company Counsel”), or other
counsel satisfactory to CF&Co, in form and substance satisfactory to CF&Co and its counsel, dated
the date that the opinion is required to be delivered, substantially similar to the form attached
hereto as Exhibit 7(n)(i) and Exhibit 7(n)(ii), and (ii) a written opinion of
Michael D. Schecter, Esq., General Counsel of the Company (“General Counsel”), in form and
substance satisfactory to CF&Co and its counsel, dated the date that the opinion is required to be
delivered, substantially similar to the form attached hereto as Exhibit 7(n)(iii), each
such opinion modified, as necessary, to relate to the Registration Statement and the Prospectus as
then amended or supplemented; provided, however, that in lieu of such opinions for subsequent
Representation Dates, counsel may furnish CF&Co with a letter (a “Reliance Letter”) to the effect
that CF&Co may rely on a prior opinion delivered under this Section 7(n) to the same extent as if
it were dated the date of such letter (except that statements in such prior opinion shall be deemed
to relate to the Registration Statement and the Prospectus as amended or supplemented at such
Representation Date).

 

22

 

(o) Comfort Letter. On or prior to the date that the first Shares are sold
pursuant to the terms of this Agreement and within three (3) Trading Days of each Representation
Date with respect to which the Company is obligated to deliver a certificate in the form attached
hereto as Exhibit 7(m) for which no waiver is applicable, the Company shall cause its
independent accountants to furnish CF&Co
letters (the “Comfort Letters” ), dated the date the Comfort Letter is delivered, in form and
substance satisfactory to CF&Co, (i) confirming that they are an independent registered public
accounting firm within the meaning of the Securities Act and the PCAOB, (ii) stating, as of such
date, the conclusions and findings of such firm with respect to the financial information and other
matters ordinarily covered by accountants’ “comfort letters” to CF&Co in connection with registered
public offerings (the first such letter, the “Initial Comfort Letter” ) and (iii) updating the
Initial Comfort Letter with any information that would have been included in the Initial Comfort
Letter had it been given on such date and modified as necessary to relate to the Registration
Statement and the Prospectus, as amended and supplemented to the date of such letter.

(p) Market Activities. The Company will not, directly or indirectly, (i)
take any action designed to cause or result in, or that constitutes or might reasonably be expected
to constitute, the stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares or (ii) sell, bid for, or purchase the Shares to be
issued and sold pursuant to this Agreement, or pay anyone any compensation for soliciting purchases
of the Shares other than CF&Co; provided, however, that the Company may bid for and purchase shares
of its common stock in accordance with Rule 10b-18 under the Exchange Act.

(q) Insurance. The Company and its Subsidiaries shall maintain, or caused
to be maintained, insurance of the types and with policies in such amounts and with such
deductibles and covering such risks as are in the reasonable opinion of management prudent for
their respective businesses.

(r) Compliance with Laws. The Company will comply in all material
respects with all applicable securities and other applicable laws, rules and regulations,
including, without limitation, the Sarbanes-Oxley Act, and use its commercially reasonable efforts
to cause the Company’s directors and officers, in their capacities as such, to comply in all
material respects with such laws, rules and regulations, including, without limitation, the
provisions of the Sarbanes-Oxley Act.

(s) REIT Qualification. The Company shall not take any action to revoke
or otherwise terminate the Company’s REIT election pursuant to Section 856(g) of the Code, except
as otherwise determined by the Board of Directors of the Company to be in the best interests of
stockholders.

(t) Investment Company Act. The Company shall not invest, or otherwise
use the proceeds received by the Company from its sale of the Shares in such a manner as would
require the Company or any of its Subsidiaries to register as an investment company under the
Investment Company Act.

(u) No Offer to Sell. Other than a free writing prospectus (as defined in
Rule 405 under the Act) approved in advance by the Company and CF&Co in its capacity as principal
or agent hereunder, neither CF&Co nor the Company or the Partnership (including its agents and
representatives, other than CF&Co in its capacity as such) will make, use, prepare, authorize,
approve or refer to any written communication (as defined in Rule 405 under the Act), required to
be filed with the Commission, that constitutes an offer to sell or solicitation of an offer to buy
the Shares as contemplated to be sold pursuant to this Agreement.

(v) Payment of SEC Filing Fees. The Company will pay any required registration fee
for the offering of the Shares pursuant to Rule 456 under the Securities Act within the time period
required by such rule (without regard to the proviso therein relating to the four (4) Business Days
extension to the payment deadline) and in any event prior to the time that the Prospectus
Supplement covering the Shares is first filed with the Commission.

(w) Undertakings. The Company will comply with all of the provisions of
any undertakings in the Registration Statement.

 

23

 

8. Conditions to CF&Co’s Obligations. The obligations of CF&Co hereunder
with respect to a Placement will be subject to the continuing accuracy and completeness of the
representations and warranties made by the Company and the Partnership herein, to the due
performance by the Company and the Partnership of their obligations hereunder, to the completion by
CF&Co of a due diligence review satisfactory to CF&Co in its reasonable judgment, and to the
continuing satisfaction (or waiver by CF&Co in its sole discretion) of the following additional
conditions:

(a) Registration Statement Effective. The Registration Statement shall be
effective and shall be available for (i) all sales of Placement Shares issued pursuant to all prior
Placement Notices and (ii) the sale of all Placement Shares contemplated to be issued by any
Placement Notice.

(b) No Material Notices. None of the following events shall have occurred
and be continuing: (i) receipt by the Company or any of its Subsidiaries of any request for
additional information from the Commission or any other federal or state governmental authority
during the period of effectiveness of the Registration Statement, the response to which would
require any post-effective amendments or supplements to the Registration Statement or the
Prospectus; (ii) the issuance by the Commission or any other federal or state governmental
authority of any stop order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose; (iii) receipt by the Company of any notification
with respect to the suspension of the qualification or exemption from qualification of any of the
Placement Shares for sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose; (iv) the occurrence of any event that makes any material statement made in the
Registration Statement or the Prospectus or any material document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that requires the making of any
changes in the Registration Statement, related Prospectus or such documents so that, in the case of
the Registration Statement, it will not contain any materially untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to make the
statements therein not misleading and, that in the case of the Prospectus, it will not contain any
materially untrue statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading.

(c) No Misstatement or Material Omission. CF&Co shall not have advised the
Company that the Registration Statement or Prospectus, or any amendment or supplement thereto,
contains an untrue statement of fact that in CF&Co’s reasonable opinion is material, or omits to
state a fact that in CF&Co’s opinion is material and is required to be stated therein or is
necessary to make the statements therein not misleading.

(d) Material Changes. Except as contemplated in the Prospectus, or
disclosed in the Company’s reports filed with the Commission and incorporated by reference in the
Prospectus, there shall not have been any material adverse change, on a consolidated basis, in the
authorized capital stock of the Company or any Material Adverse Effect or any development that
could reasonably be expected to result in a Material Adverse Effect, or any downgrading in or
withdrawal of the rating assigned to any of the Company’s securities (other than asset backed
securities) by any rating organization or a public announcement by any rating organization that it
has under surveillance or review its rating of any of the Company’s securities (other than asset
backed securities), the effect of which, in the case of any such action by a rating organization
described above, in the reasonable judgment of CF&Co (without relieving the Company of any
obligation or liability it may otherwise have), is so material as to make it
impracticable or inadvisable to proceed with the offering of the Placement Shares on the terms
and in the manner contemplated in the Prospectus.

 

24

 

(e) Legal Opinions. CF&Co shall have received the opinions of each of
Company Counsel and General Counsel required to be delivered pursuant Section 7(n) on or before the
date on which such delivery of such opinion is required pursuant to Section 7(n).

(f) Comfort Letter. CF&Co shall have received the Comfort Letter required
to be delivered pursuant Section 7(o) on or before the date on which such delivery of such letter
is required pursuant to Section 7(o).

(g) Representation Certificate. CF&Co shall have received the certificate
required to be delivered pursuant to Section 7(m) on or before the date on which delivery of such
certificate is required pursuant to Section 7(m).

(h) No Suspension. Trading in the Shares shall not have been suspended on
the New York Stock Exchange.

(i) Other Materials. On each date on which the Company is required to
deliver a certificate pursuant to Section 7(m), the Company shall have furnished to CF&Co such
appropriate further information, certificates and documents as CF&Co may have reasonably requested.
All such opinions, certificates, letters and other documents shall have been in compliance with the
provisions hereof. The Company will furnish CF&Co with such conformed copies of such opinions,
certificates, letters and other documents as CF&Co shall have reasonably requested.

(j) Securities Act Filings Made. All filings with the Commission required
by Rule 424 under the Securities Act to have been filed prior to the issuance of any Placement
Notice hereunder shall have been made within the applicable time period prescribed for such filing
by Rule 424.

(k) Approval for Listing. The Placement Shares shall either have been (i)
approved for listing on the NYSE, subject only to notice of issuance, or (ii) the Company shall
have filed an application for listing of the Placement Shares on the NYSE at, or prior to, the
issuance of any Placement Notice.

(l) No Termination Event. There shall not have occurred any event that
would permit CF&Co to terminate this Agreement pursuant to Section 11(a) .

9. Indemnification and Contribution.

(a) Company Indemnification. The Company and the Partnership, jointly and
severally, agree to indemnify and hold harmless CF&Co, the directors, officers, partners, employees
and agents of CF&Co and each person, if any, who (i) controls CF&Co within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act, or (ii) is controlled by or is under
common control with CF&Co (a “CF&Co Affiliate”) from and against any and all losses, claims,
liabilities, expenses and damages (including, but not limited to, any and all reasonable
investigative, legal and other expenses incurred in connection with, and any and all amounts paid
in settlement (in accordance with Section 9(c) ) of, any action, suit or proceeding between any of
the indemnified parties and any indemnifying parties or between any indemnified party and any third
party, or otherwise, or any claim asserted), as and when incurred, to which CF&Co, or any such
person, may become subject under the Securities Act, the Exchange Act or other federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses, claims,
liabilities, expenses or damages arise out of or are based, directly or indirectly, on (x) any untrue statement or alleged

 

25

 

untrue statement of a material
fact contained in the Registration Statement or the Prospectus or any amendment or supplement to
the Registration Statement or the Prospectus or in any free writing prospectus or in any
application or other document executed by or on behalf of the Company or based on written
information furnished by or on behalf of the Company filed in any jurisdiction in order to qualify
the Shares under the securities laws thereof or filed with the Commission, (y) the omission or
alleged omission to state in any such document a material fact required to be stated in it or
necessary to make the statements in it not misleading or (z) any breach by any of the indemnifying
parties of any of their respective representations, warranties and agreements contained in this
Agreement; provided, however, that this indemnity agreement shall not apply to the extent that such
loss, claim, liability, expense or damage arises from the sale of the Placement Shares pursuant to
this Agreement and is caused directly or indirectly by an untrue statement or omission made in
reliance upon and in conformity with written information relating to CF&Co and furnished to the
Company by CF&Co expressly for inclusion in any document as described in clause (x) of this Section
9(a). This indemnity agreement will be in addition to any liability that the Company might
otherwise have.

(b) CF&Co Indemnification. CF&Co agrees to indemnify and hold harmless the
Company, its directors, each officer of the Company that signed the Registration Statement, the
Partnership and each person, if any, who (i) controls the Company or the Partnership within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act or (ii) is controlled
by or is under common control with the Company or the Partnership (a “Company Affiliate”) against
any and all loss, liability, claim, damage and expense described in the indemnity contained in
Section 9(a), as incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any amendments thereto) or
the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with
written information relating to CF&Co and furnished to the Company by CF&Co expressly for inclusion
in any document as described in clause (x) of Section 9(a).

(c) Procedure. Any party that proposes to assert the right to be
indemnified under this Section 9 will, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim is to be made against an indemnifying party
or parties under this Section 9, notify each such indemnifying party of the commencement of such
action, enclosing a copy of all papers served, but the omission so to notify such indemnifying
party will not relieve the indemnifying party from (i) any liability that it might have to any
indemnified party otherwise than under this Section 9 and (ii) any liability that it may have to
any indemnified party under the foregoing provision of this Section 9 unless, and only to the
extent that, such omission results in the forfeiture of substantive rights or defenses by the
indemnifying party. If any such action is brought against any indemnified party and it notifies the
indemnifying party of its commencement, the indemnifying party will be entitled to participate in
and, to the extent that it elects by delivering written notice to the indemnified party promptly
after receiving notice of the commencement of the action from the indemnified party, jointly with
any other indemnifying party similarly notified, to assume the defense of the action, with counsel
reasonably satisfactory to the indemnified party, and after notice from the indemnifying party to
the indemnified party of its election to assume the defense, the indemnifying party will not be
liable to the indemnified party for any legal or other expenses except as provided below and except
for the reasonable costs of investigation subsequently incurred by the indemnified party in
connection with the defense. The indemnified party will have the right to employ its own counsel in
any such action, but the fees, expenses and other charges of such counsel will be at the expense of
such indemnified party unless (1) the employment of counsel by the indemnified party has been
authorized in writing by the indemnifying party, (2) the indemnified party has reasonably concluded
(based on advice of counsel) that there may be legal defenses available to it

 

26

 

or other indemnified
parties that are different from or in addition to those available to the indemnifying party, (3) a conflict or potential conflict exists (based on advice of counsel to the indemnified party) between the indemnified party and the indemnifying party (in which
case the indemnifying party will not have the right to direct the defense of such action on behalf
of the indemnified party) or (4) the indemnifying party has not in fact employed counsel to assume
the defense of such action within a reasonable time after receiving notice of the commencement of
the action, in each of which cases the reasonable fees, disbursements and other charges of counsel
will be at the expense of the indemnifying party or parties. It is understood that the indemnifying
party or parties shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees, disbursements and other charges of more than one
separate firm admitted to practice in such jurisdiction at any one time for all such indemnified
party or parties. All such fees, disbursements and other charges will be reimbursed by the
indemnifying party promptly as they are incurred. An indemnifying party will not, in any event, be
liable for any settlement of any action or claim effected without its written consent. No
indemnifying party shall, without the prior written consent of each indemnified party, settle or
compromise or consent to the entry of any judgment in any pending or threatened claim, action or
proceeding relating to the matters contemplated by this Section 9 (whether or not any indemnified
party is a party thereto), unless such settlement, compromise or consent includes an unconditional
release of each indemnified party from all liability arising or that may arise out of such claim,
action or proceeding.

(d) Contribution. In order to provide for just and equitable contribution
in circumstances in which the indemnification provided for in the foregoing paragraphs of this
Section 9 is applicable in accordance with its terms but for any reason is held to be unavailable
from the Company, the Partnership or CF&Co, the Company, the Partnership and CF&Co will contribute
to the total losses, claims, liabilities, expenses and damages (including any investigative, legal
and other expenses reasonably incurred in connection with, and any amount paid in settlement of,
any action, suit or proceeding or any claim asserted, but after deducting any contribution received
by the Company or the Partnership from persons other than CF&Co, such as persons who control the
Company within the meaning of the Securities Act, officers of the Company who signed the
Registration Statement and directors of the Company, who also may be liable for contribution) to
which the Company, the Partnership and CF&Co may be subject in such proportion as shall be
appropriate to reflect the relative benefits received by the Company and the Partnership on the one
hand and CF&Co on the other. The relative benefits received by the Company and the Partnership on
the one hand and CF&Co on the other hand shall be deemed to be in the same proportion as the total
Net Proceeds received by the Company from the sale of the Placement Shares (before deducting
expenses) bear to the total compensation received by CF&Co from the sale of Placement Shares on
behalf of the Company. If, but only if, the allocation provided by the foregoing sentence is not
permitted by applicable law, the allocation of contribution shall be made in such proportion as is
appropriate to reflect not only the relative benefits referred to in the foregoing sentence but
also the relative fault of the Company and the Partnership, on the one hand, and CF&Co, on the
other, with respect to the statements or omission that resulted in such loss, claim, liability,
expense or damage, or action in respect thereof, as well as any other relevant equitable
considerations with respect to such offering. Such relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information supplied by the
Company, the Partnership or CF&Co, the intent of the parties and their relative knowledge, access
to information and opportunity to correct or prevent such statement or omission. The Company, the
Partnership and CF&Co agree that it would not be just and equitable if contributions pursuant to
this Section 9(d) were to be determined by pro rata allocation or by any other method of
allocation that does not take into account the equitable considerations referred to herein. The
amount paid or payable by an indemnified party as a result of the loss, claim, liability, expense,
or damage, or action in respect thereof, referred to above in this Section 9(d) shall be deemed to
include, for the purpose of this Section 9(d) , any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such action or claim to
the extent consistent with Section 9(c) hereof.

 

27

 

Notwithstanding the foregoing provisions of this
Section 9(d), CF&Co shall not be required to contribute any amount in excess of the commissions received by it under this
Agreement and no person found guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) will be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of this Section 9(d), any person who controls a
party to this Agreement within the meaning of the Securities Act, and any officers, directors,
partners, employees or agents of CF&Co, will have the same rights to contribution as that party,
and each officer of the Company who signed the Registration Statement will have the same rights to
contribution as the Company, subject in each case to the provisions hereof. Any party entitled to
contribution, promptly after receipt of notice of commencement of any action against such party in
respect of which a claim for contribution may be made under this Section 9(d), will notify any such
party or parties from whom contribution may be sought, but the omission to so notify will not
relieve that party or parties from whom contribution may be sought from any other obligation it or
they may have under this Section 9(d) except to the extent that the failure to so notify such other
party materially prejudiced the substantive rights or defenses of the party from whom contribution
is sought. Except for a settlement entered into pursuant to the last sentence of Section 9(c)
hereof, no party will be liable for contribution with respect to any action or claim settled
without its written consent if such consent is required pursuant to Section 9(c) hereof.

10. Representations and Agreements to Survive Delivery. The indemnity and
contribution agreements contained in Section 9 of this Agreement and all representations and
warranties of the Company herein or in certificates delivered pursuant hereto shall survive, as of
their respective dates, regardless of (i) any investigation made by or on behalf of CF&Co, any
controlling persons, or the Company (or any of their respective officers, directors or controlling
persons), (ii) delivery and acceptance of the Placement Shares and payment therefor or (iii) any
termination of this Agreement.

11. Termination.

(a) CF&Co shall have the right by giving notice as hereinafter specified at any
time to terminate this Agreement if (i) any Material Adverse Effect, or any development that has
actually occurred and that would reasonably be expected to result in a Material Adverse Effect has
occurred that, in the reasonable judgment of CF&Co, may materially impair the ability of CF&Co to
sell the Placement Shares hereunder, (ii) the Company shall have failed, refused or been unable to
perform any agreement on its part to be performed hereunder; provided, however, in the case of any
failure of the Company to deliver (or cause another person to deliver) any certification, opinion,
or letter required under Sections 7(m), 7(n), or 7(o), CF&Co’s right to terminate shall not arise
unless such failure to deliver (or cause to be delivered) continues for more than thirty (30) days
from the date such delivery was required; or (iii) any other condition of CF&Co’s obligations
hereunder is not fulfilled, or (iv), any suspension or limitation of trading in the Placement
Shares or in securities generally on the New York Stock Exchange shall have occurred. Any such
termination shall be without liability of any party to any other party except that the provisions
of Section 7(g), Section 9, Section 10, Section 16 and Section 17 hereof shall remain in full force
and effect notwithstanding such termination. If CF&Co elects to terminate this Agreement as
provided in this Section 11(a), CF&Co shall provide the required notice as specified in Section
12.

(b) The Company shall have the right, by giving ten (10) days notice as hereinafter
specified to terminate this Agreement in its sole discretion at any time after the date of this
Agreement. Any such termination shall be without liability of any party to any other party except
that the provisions of Section 7(g), Section 9, Section 10, Section 16 and Section 17 hereof shall
remain in full force and effect notwithstanding such termination.

(c) CF&Co shall have the right, by giving ten (10) days notice as hereinafter
specified to terminate this Agreement in its sole discretion at any time after the date of this
Agreement. Any such termination shall be without liability of any party to any other party except
that the provisions of Section
7(g), Section 9, Section 10, Section 16 and Section 17 hereof shall remain in full force and
effect notwithstanding such termination.

 

28

 

(d) Unless earlier terminated pursuant to this Section 11, this Agreement shall
automatically terminate upon the issuance and sale of all of the Placement Shares through CF&Co on
the terms and subject to the conditions set forth herein; provided, that the provisions of Section
7(g), Section 9, Section 10, Section 16 and Section 17 hereof shall remain in full force and effect
notwithstanding such termination.

(e) This Agreement shall remain in full force and effect unless terminated pursuant
to Sections 11(a), (b), (c), or (d) above or otherwise by mutual agreement of the parties;
provided, however, that any such termination by mutual agreement shall in all cases be deemed to
provide that Section 7(g), Section 9, Section 10, Section 16 and Section 17 shall remain in full
force and effect.

(f) Any termination of this Agreement shall be effective on the date specified in
such notice of termination; provided, however, that such termination shall not be effective until
the close of business on the date of receipt of such notice by CF&Co or the Company, as the case
may be. If such termination shall occur prior to the Settlement Date for any sale of Placement
Shares, such termination shall not become effective until the close of business on such Settlement
Date, with Placement Shares settling in accordance with the provisions of this Agreement.

12. Notices. All notices or other communications required or permitted to be given
by any party to any other party pursuant to the terms of this Agreement shall be in writing, unless
otherwise specified in this Agreement, and if sent to CF&Co, shall be delivered to CF&Co at Cantor
Fitzgerald & Co., 499 Park Avenue, New York, New York 10022, fax no. (212) 308-3730, Attention:
Capital Markets/Jeff Lumby, with copies to Stephen Merkel, General Counsel, at the same address,
and Hunton & Williams LLP, Riverfront Plaza, East Tower, 951 East Byrd Street, Richmond Virginia
23219, fax no. (804) 788-8218, Attention: David C. Wright; or if sent to the Company or the
Partnership, shall be delivered to DiamondRock Hospitality Company, 6903 Rockledge Drive, Suite
800, Bethesda, Maryland 20817, fax no. (301) 380-6727, attention: Michael D. Schecter, with a copy
to Goodwin Proctor LLP, Exchange Place, Boston, Massachusetts 02109, fax no. (617) 523-1231,
attention: Suzanne Lecaroz. Each party to this Agreement may change such address for notices by
sending to the parties to this Agreement written notice of a new address for such purpose. Each
such notice or other communication shall be deemed given (i) when delivered personally or by
verifiable facsimile transmission (with an original to follow) on or before 4:30 p.m., New York
City time, on a Business Day (as defined below), or, if such day is not a Business Day on the next
succeeding Business Day, (ii) on the next Business Day after timely delivery to a
nationally-recognized overnight courier and (iii) on the Business Day actually received if
deposited in the U.S. mail (certified or registered mail, return receipt requested, postage
prepaid). For purposes of this Agreement, “Business Day” shall mean any day on which the NYSE and
commercial banks in the City of New York are open for business.

13. Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the Company, the Partnership and CF&Co and their respective successors and the
affiliates, controlling persons, officers and directors referred to in Section 9 hereof.
References to any of the parties contained in this Agreement shall be deemed to include the
successors and permitted assigns of such party. Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the parties hereto or their respective successors and
permitted assigns any rights, remedies, obligations or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement. Neither party may assign its rights or
obligations under this Agreement without the prior written consent of the other party; provided,
however, that CF&Co may assign its rights and obligations hereunder to an affiliate of CF&Co
without obtaining the Company’s consent.

 

29

 

14. Adjustments for Share Splits. The parties acknowledge and agree that
all share-related numbers contained in this Agreement shall be adjusted to take into account any
share split, share dividend or similar event effected with respect to the Shares.

15. Entire Agreement; Amendment; Severability. This Agreement (including
all schedules and exhibits attached hereto and Placement Notices issued pursuant hereto)
constitutes the entire agreement and supersedes all other prior and contemporaneous agreements and
undertakings, both written and oral, among the parties hereto with regard to the subject matter
hereof. Neither this Agreement nor any term hereof may be amended except pursuant to a written
instrument executed by the Company, the Partnership and CF&Co. In the event that any one or more
of the provisions contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable as written by a court of competent jurisdiction, then such
provision shall be given full force and effect to the fullest possible extent that it is valid,
legal and enforceable, and the remainder of the terms and provisions herein shall be construed as
if such invalid, illegal or unenforceable term or provision was not contained herein, but only to
the extent that giving effect to such provision and the remainder of the terms and provisions
hereof shall be in accordance with the intent of the parties as reflected in this Agreement.

16. Applicable Law; Consent to Jurisdiction. This Agreement shall be
governed by, and construed in accordance with, the internal laws of the State of New York without
regard to the principles of conflicts of laws. Each party hereby irrevocably submits to the
non-exclusive jurisdiction of the state and federal courts sitting in the City of New York, borough
of Manhattan, for the adjudication of any dispute hereunder or in connection with any transaction
contemplated hereby, and hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit,
action or proceeding is improper. Each party hereby irrevocably waives personal service of process
and consents to process being served in any such suit, action or proceeding by mailing a copy
thereof (certified or registered mail, return receipt requested) to such party at the address in
effect for notices to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to
limit in any way any right to serve process in any manner permitted by law.

17. Waiver of Jury Trial. The Company, the Partnership and CF&Co each
hereby irrevocably waives any right it may have to a trial by jury in respect of any claim based
upon or arising out of this Agreement or any transaction contemplated hereby.

18. Absence of Fiduciary Relationship. The Company and the Partnership,
jointly and severally, acknowledge and agree that:

(a) CF&Co has been retained solely to act as underwriter in connection with the
sale of the Shares and that no fiduciary, advisory or agency relationship between the Company, the
Partnership and CF&Co has been created in respect of any of the transactions contemplated by this
Agreement, irrespective of whether CF&Co has advised or is advising the Company or the Partnership
on other matters;

(b) each of the Company and the Partnership is capable of evaluating and
understanding and understands and accepts the terms, risks and conditions of the transactions
contemplated by this Agreement;

 

30

 

(c) each of the Company and the Partnership has been advised that CF&Co and its
affiliates are engaged in a broad range of transactions which may involve interests that differ
from those of the Company or the Partnership and that CF&Co has no obligation to disclose such
interests and
transactions to the Company or the Partnership by virtue of any fiduciary, advisory or agency
relationship; and

(d) each of the Company and the Partnership waives, to the fullest extent permitted
by law, any claims it may have against CF&Co, for breach of fiduciary duty or alleged breach of
fiduciary duty and agrees that CF&Co shall have no liability (whether direct or indirect) to the
Company or the Partnership in respect of such a fiduciary claim or to any person asserting a
fiduciary duty claim on behalf of or in right of the Company or the Partnership, including
stockholders, partners, employees or creditors of the Company or the Partnership.

19. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument. Delivery of an executed Agreement by one party to the other may be
made by facsimile transmission.

[Remainder of Page Intentionally Blank]

 

31

 

If the foregoing correctly sets forth the understanding between the Company and CF&Co, please
so indicate in the space provided below for that purpose, whereupon this letter shall constitute a
binding agreement between the Company and CF&Co.

	 	 	 	 	 
	 	Very truly yours,

DIAMONDROCK HOSPITALITY COMPANY

	 
	 	By:  	/s/ Michael D. Schecter
 	 
	 	 	Name:  	Michael D. Schecter  	 
	 	 	Title:  	Executive Vice President, General Counsel

and Corporate Secretary 	 
	 
	 	DIAMONDROCK HOSPITALITY LIMITED PARTNERSHIP

	 
	 	By 	
 DiamondRock Hospitality Company,

its general partner

 	 
	 	By:  	/s/ Michael D. Schecter
 	 
	 	 	Name:  	Michael D. Schecter 	 
	 	 	Title:  	Executive Vice President, General Counsel

and Corporate Secretary 	 

 

32

 

	 	 	 	 	 
	 	ACCEPTED as of the date

first-above written:

CANTOR FITZGERALD & CO.

 	 
	 	By:  	/s/
Jeffrey Lumby 	 
	 	 	Name:  	Jeffrey Lumby 	 
	 	 	Title:  	Managing Director 	 

 

33

 

SCHEDULE 1

FORM OF PLACEMENT NOTICE

	 	 	 
	From:

	 	[          ]
	 
	 	 
	Cc:

	 	[          ]
	 
	 	 
	To:

	 	[          ]
	 
	 	 
	Subject:

	 	Controlled Equity Offering—Placement Notice
	 
	 	 
	Gentlemen:
	 	 

Pursuant to the terms and subject to the conditions contained in the Controlled Equity
OfferingSM Sales Agreement between DiamondRock Hospitality Company (the “Company”), DiamondRock
Hospitality Limited Partnership, and Cantor Fitzgerald & Co. (“CF&Co”) dated October 19, 2009 (the
“Agreement”), I hereby request on behalf of the Company that CF&Co sell up to [          ] shares of the
Company’s common stock, par value $0.01 per share, at a minimum market price of $                     per share
until [date]*.

	 	 	 
	*	 	The Company shall add additional parameters, such as the bracketed text above regarding a
termination date, to the Placement Notice as it may deem necessary at any time.

SCHEDULE 1 

 

 

 

SCHEDULE 2

CANTOR FITZGERALD & CO.

	 	 	 
	Peter Dippolito

	 	pdippolito@cantor.com
	 
	 	 
	Joshua Feldman

	 	jfeldman@cantor.com
	 
	 	 
	Jeff Lumby

	 	jlumby@cantor.com
	 
	 	 
	DIAMONDROCK HOSPITALITY COMPANY
	 
	 	 
	Mark Brugger

	 	mark.brugger@drhc.com
	 
	 	 
	Sean Mahoney

	 	sean.mahoney@drhc.com
	 
	 	 
	Michael Schecter

	 	michael.schecter@drhc.com

SCHEDULE 2

 

 

 

SCHEDULE 3

Compensation

CF&Co shall be paid compensation equal to up to two percent (2%) of the gross proceeds from the
sales of Shares pursuant to the terms of this Agreement.

SCHEDULE 3

 

 

 

SCHEDULE 4

Subsidiaries

DiamondRock Hospitality Company

Subsidiaries

	 	 	 	 	 
	 	 	 	 	JURISDICTION IN WHICH
	 	 	JURISDICTION OF	 	QUALIFIED TO DO
	SUBSIDIARY	 	ORGANIZATION	 	BUSINESS
	 
	 	 	 	 
	1 Bloodstone TRS, Inc.

	 	Delaware
	 	Massachusetts
	 
	 	 	 	 
	2 DiamondRock Alpharetta Owner, LLC

	 	Delaware
	 	Georgia
	 
	 	 	 	 
	3 DiamondRock Alpharetta Tenant, LLC

	 	Delaware
	 	Georgia
	 
	 	 	 	 
	4 DiamondRock Atlanta Perimeter Owner, LLC

	 	Delaware
	 	Georgia
	 
	 	 	 	 
	5 DiamondRock Atlanta Perimeter Tenant, LLC

	 	Delaware
	 	Georgia
	 
	 	 	 	 
	6 DiamondRock Bethesda General, LLC

	 	Delaware
	 	Maryland
	 
	 	 	 	 
	7 DiamondRock Bethesda Limited, LLC

	 	Delaware
	 	Maryland
	 
	 	 	 	 
	8 DiamondRock Bethesda Owner Limited Partnership

	 	Maryland
	 	N/A
	 
	 	 	 	 
	9 DiamondRock Bethesda Tenant, LLC

	 	Delaware
	 	Maryland
	 
	 	 	 	 
	10 DiamondRock Boston Expansion Owner, LLC

	 	Delaware
	 	Massachusetts
	 
	 	 	 	 
	11 DiamondRock Boston Owner, LLC

	 	Delaware
	 	Massachusetts
	 
	 	 	 	 
	12 DiamondRock Boston Retail Owner, LLC

	 	Delaware
	 	Massachusetts
	 
	 	 	 	 
	13 DiamondRock Boston Tenant, LLC

	 	Delaware
	 	Massachusetts
	 
	 	 	 	 
	14 DiamondRock Buckhead Owner, LLC

	 	Delaware
	 	Georgia
	 
	 	 	 	 
	15 DiamondRock Buckhead Tenant, LLC

	 	Delaware
	 	Georgia
	 
	 	 	 	 
	16 DiamondRock Cayman Islands, Inc.

	 	Cayman Islands
	 	N/A
	 
	 	 	 	 
	17 DiamondRock Chicago Conrad Owner, LLC

	 	Delaware
	 	Illinois
	 
	 	 	 	 
	18 DiamondRock Chicago Conrad Tenant, LLC

	 	Delaware
	 	Illinois
	 
	 	 	 	 
	19 DiamondRock Chicago Owner, LLC

	 	Delaware
	 	Illinois
	 
	 	 	 	 
	20 DiamondRock Chicago Tenant, LLC

	 	Delaware
	 	Illinois

SCHEDULE 4 

 

1

 

DiamondRock Hospitality Company

Subsidiaries

	 	 	 	 	 
	 	 	 	 	JURISDICTION IN WHICH
	 	 	JURISDICTION OF	 	QUALIFIED TO DO
	SUBSIDIARY	 	ORGANIZATION	 	BUSINESS
	 
	 	 	 	 
	21 DiamondRock East 40th Street NYC Owner Holdings, LLC

	 	Delaware
	 	New York
	 
	 	 	 	 
	22 DiamondRock East 40th Street NYC Owner, LLC

	 	Delaware
	 	New York
	 
	 	 	 	 
	23 DiamondRock East 40th Street NYC Tenant, LLC

	 	Delaware
	 	New York
	 
	 	 	 	 
	24 DiamondRock Frenchman’s Holdings, LLC

	 	Delaware
	 	N/A
	 
	 	 	 	 
	25 DiamondRock Frenchman’s Owner, Inc.

	 	U.S. Virgin Islands
	 	N/A
	 
	 	 	 	 
	26 DiamondRock Griffin Gate Owner, LLC

	 	Delaware
	 	Kentucky
	 
	 	 	 	 
	27 DiamondRock Griffin Gate Tenant, LLC

	 	Delaware
	 	Kentucky
	 
	 	 	 	 
	28 DiamondRock Hospitality Limited Partnership

	 	Delaware
	 	Massachusetts
	 
	 	 	 	 
	29 DiamondRock Hospitality, LLC

	 	Delaware
	 	N/A
	 
	 	 	 	 
	30 DiamondRock LAX Owner, LLC

	 	Delaware
	 	California
	 
	 	 	 	 
	31 DiamondRock LAX Tenant, LLC

	 	Delaware
	 	California
	 
	 	 	 	 
	32 DiamondRock Manhattan/Midtown East Owner, LLC

	 	Delaware
	 	New York
	 
	 	 	 	 
	33 DiamondRock Manhattan/Midtown East Tenant, LLC

	 	Delaware
	 	New York
	 
	 	 	 	 
	34 DiamondRock Oak Brook Owner, LLC

	 	Delaware
	 	Illinois
	 
	 	 	 	 
	35 DiamondRock Oak Brook Tenant, LLC

	 	Delaware
	 	Illinois
	 
	 	 	 	 
	36 DiamondRock Orlando Airport Owner, LLC

	 	Delaware
	 	Florida
	 
	 	 	 	 
	37 DiamondRock Orlando Airport Tenant, LLC

	 	Delaware
	 	Florida
	 
	 	 	 	 
	38 DiamondRock Salt Lake Owner, LLC

	 	Delaware
	 	Utah
	 
	 	 	 	 
	39 DiamondRock Salt Lake Tenant, LLC

	 	Delaware
	 	Utah
	 
	 	 	 	 
	40 DiamondRock Sonoma Owner, LLC

	 	Delaware
	 	California
	 
	 	 	 	 
	41 DiamondRock Sonoma Tenant, LLC

	 	Delaware
	 	California
	 
	 	 	 	 
	42 DiamondRock Torrance Owner, LLC

	 	Delaware
	 	California

SCHEDULE 4 

 

2

 

DiamondRock Hospitality Company

Subsidiaries

	 	 	 	 	 
	 	 	 	 	JURISDICTION IN WHICH
	 	 	JURISDICTION OF	 	QUALIFIED TO DO
	SUBSIDIARY	 	ORGANIZATION	 	BUSINESS
	 
	 	 	 	 
	43 DiamondRock Torrance Tenant, LLC

	 	Delaware
	 	California
	 
	 	 	 	 
	44 DiamondRock Vail Owner, LLC

	 	Delaware
	 	Colorado
	 
	 	 	 	 
	45 DiamondRock Vail Tenant, LLC

	 	Delaware
	 	Colorado
	 
	 	 	 	 
	46 DiamondRock Waverly Owner, LLC

	 	Delaware
	 	Georgia
	 
	 	 	 	 
	47 DiamondRock Waverly Tenant, LLC

	 	Delaware
	 	Georgia
	 
	 	 	 	 
	48 DRH Austin Owner General, LLC

	 	Delaware
	 	Texas
	 
	 	 	 	 
	49 DRH Austin Owner Limited, LLC

	 	Delaware
	 	N/A
	 
	 	 	 	 
	50 DRH Austin Owner Limited Partnership

	 	Delaware
	 	Texas
	 
	 	 	 	 
	51 DRH Austin Tenant General, LLC

	 	Delaware
	 	Texas
	 
	 	 	 	 
	52 DRH Austin Tenant Limited, LLC

	 	Delaware
	 	N/A
	 
	 	 	 	 
	53 DRH Austin Tenant Limited Partnership

	 	Delaware
	 	Texas
	 
	 	 	 	 
	54 DRH Worthington Owner General, LLC

	 	Delaware
	 	Texas
	 
	 	 	 	 
	55 DRH Worthington Owner Limited, LLC

	 	Delaware
	 	N/A
	 
	 	 	 	 
	56 DRH Worthington Owner Limited Partnership

	 	Delaware
	 	Texas
	 
	 	 	 	 
	57 DRH Worthington Tenant General, LLC

	 	Delaware
	 	Texas
	 
	 	 	 	 
	58 DRH Worthington Tenant Limited, LLC

	 	Delaware
	 	N/A
	 
	 	 	 	 
	59 DRH Worthington Tenant Limited Partnership

	 	Delaware
	 	Texas

Note: DiamondRock Hospitality Company is qualified to do business in Massachusetts.

SCHEDULE 4 

 

3

 

Exhibit 7(n)(i)

MATTERS TO BE COVERED BY INITIAL OPINION OF

GOODWIN PROCTER LLP

1. The Company has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Maryland.

2. The Partnership has been duly formed and is validly existing as a partnership in good
standing under the laws of the State of Delaware.

3. Each of the Company and the Partnership has the corporate power or limited partnership
power to conduct its business and to own, lease and operate its respective properties as such
business and properties are described in the Registration Statement and the Prospectus and to
execute and to perform its obligations under the Agreement.

4. The Common Stock Certificate complies in all material respects with the applicable
requirements of the Maryland General Corporation Law (“MGCL”), the Articles of Amendment and
Restatement of the Company (the “Articles”) and the Second Amended and Restated Bylaws of the
Company (the “Bylaws”).

5. The capital stock of the Company conforms in all material respects to the description
thereof contained in the Registration Statement and the Prospectus under the captions “Description
of Capital Stock,” “Description of Common Stock,” Description of Preferred Stock,” and “Description
of Certain Material Provisions of Maryland Law, Our Charter and Our Bylaws.”

6. The Registration Statement has become effective under the Securities Act. Any required
filing of the Prospectus pursuant to Rule 424(b) has been made in the manner and within the time
period required by Rule 424(b). To our knowledge, (i) no stop order suspending the effectiveness
of the Registration Statement has been issued under the Securities Act and (ii) no proceedings for
that purpose have been instituted or are pending or threatened by the Commission.

7. The Agreement has been duly authorized, executed and delivered by the Company and the
Partnership.

8. The Shares have been duly authorized and, when issued in accordance with the Agreement
against payment of the consideration set forth therein, will be validly issued, fully paid and
non-assessable, and will not be subject to any preemptive right in the Articles or the Bylaws of
the Company or arising under the MGCL.

9. The execution, delivery and performance of the Agreement by the Company and the Partnership
and the issuance by the Company of the Shares in accordance therewith: (a) do not require any
consent, approval, authorization, license or exemption by, or order of or filing by the Company or
the Partnership with, any governmental authority, except such as has been made or obtained under
the Securities Act, and except as may be required under the securities or Blue Sky laws of any
foreign jurisdiction or of any state or other jurisdiction of the United States, as to which we
express no opinion, (b) will not violate (i) the provisions of the Articles or Bylaws of the
Company, (ii) the provisions of the certificate of limited partnership or the Partnership Agreement
of the Partnership or (iii) the provisions of the organizational documents of the Subsidiaries, (c)
will not violate any law or regulation of the United
States, the MGCL, the Revised Uniform Limited Partnership Act of the State of Delaware or the
Limited Liability Company Act of the State of Delaware applicable to the Company or the
Partnership, or any order, judgment or decree of any Maryland, Delaware, Massachusetts
instrumentality or court, specifically naming the Company or the Partnership of which we are aware
and (d) will not result in a breach of, or default under, any of the material contracts filed with
or incorporated by reference into the Registration Statement.

EXHIBIT 7(n)(i)

 

1

 

10. The Shares have been approved for listing, subject to notice of issuance, on the New York
Stock Exchange.

11. The statements set forth under the headings captioned “Description of Capital Stock,”
“Description of Certain Material Provisions of Maryland Law, Our Charter and Our Bylaws” and
“Description of The Partnership Agreement of Diamond Rock Hospitality Limited Partnership” in the
Registration Statement and the Prospectus, insofar as such statements contain description of laws,
rules or regulations, and insofar as they describe the terms of agreements or the Company’s
Articles or Bylaws have been reviewed by us and are correct in all material respects.

12. The Company is not, and after giving effect to the issuance of the Shares and the
application of the proceeds as described in the Prospectus, will not be, an “investment company,”
as that term is defined in the Investment Company Act of 1940, as amended.

This opinion letter is furnished by us as counsel for the Company to you and is solely for your
benefit as sales agent in connection with the issuance of the Shares, and, except as set forth in
the paragraph above, may not be relied on by you for any other purpose, or furnished to, quoted to,
or relied on by, in whole or in part, any other person, firm or corporation for any purpose,
without our prior written consent.

********************

Reference is made to the registration under the Securities Act of 1933, as amended (the “Securities
Act”), of shares of common stock, $0.01 par value per share (the “Shares”), of DiamondRock
Hospitality Company, a Maryland corporation (the “Company”), having an aggregate maximum offering
price of up to $75,000,000, pursuant to a Registration Statement on Form S-3 (No. 333-161298),
together with all amendments thereto (the “Registration Statement), all as filed prior to the date
hereof with the Securities and Exchange Commission (the “Commission”) under the Securities Act, and
the form of prospectus supplement dated October 19, 2009, relating to the Shares (the “Prospectus
Supplement”). The Registration Statement is an automatic shelf registration statement that became
effective upon filing with the Commission on August 12, 2009. The form of prospectus included in
the Registration Statement when the Registration Statement became effective, as supplemented by the
Prospectus Supplement and filed with the Commission on October 19, 2009 pursuant to Rule 424(b)(5)
under the Securities Act, is herein referred to as the “Prospectus.” When the Registration
Statement became effective, the form of prospectus included in it omitted certain information in
reliance upon Rule 430B under the Securities Act. That information is contained in the Prospectus,
which is deemed to be a part of the Registration Statement as of the time specified in Rule
430B(f)(1). The Prospectus also updates or supplements certain information contained in the
Registration Statement.

This letter is being furnished to you at the request of the Company and pursuant to Section
7(n)(ii) of the Sales Agreement (the “Agreement”), dated as of October 19, 2009, among the Company,
DiamondRock Hospitality Limited Partnership, a Delaware limited partnership (the “Partnership”),
and you (the “CF&Co”).

As counsel to the Company, we reviewed the Registration Statement and the Prospectus, and
participated in discussions with your representatives, those of your counsel and those of the
Company and its
independent registered public accounting firm, at which the contents of the Registration Statement
and the Prospectus were discussed.

EXHIBIT 7(n)(i)

 

2

 

The purpose of our engagement was not to establish or to confirm factual matters set forth in the
Registration Statement and the Prospectus, and we have not undertaken any obligation to verify
independently any of the factual matters set forth in the Registration Statement and the
Prospectus. Moreover, many of the determinations required to be made in the preparation of the
Registration Statement and the Prospectus involve matters of a non-legal nature.

Subject to the foregoing, we confirm to you that: (i) on the basis of the information that we
gained in the course of performing the services referred to above, nothing came to our attention
that caused us to believe that (a) the Registration Statement, at the date and time it became
effective, contained an untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not misleading, and (b)
the Prospectus, as of its date and the date of the Agreement, contained or contains any untrue
statement of a material fact or omitted or omits to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under which they were made, not
misleading, and (ii) nothing further came to our attention in the course of the procedures
described in the second sentence of the third paragraph of this letter that caused us to believe
that the Prospectus, as of the date and time of delivery of this letter, contains an untrue
statement of a material fact or omits to state any material fact necessary in order to make the
statements therein, in the light of circumstances under which they were made, not misleading;
provided, however, except as set forth in paragraph 13 of our letter to you as of even date
herewith, we do not assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement and the Prospectus and we do not express any
belief as to the financial statements and related notes, financial statement schedules or financial
or accounting data contained in the Registration Statement and the Prospectus. In the first
sentence of this paragraph, “attention” refers to the actual knowledge of each of the lawyers of
our firm who actively participated in the preparation of the Registration Statement and the
Prospectus after such inquiries as they deemed appropriate with other lawyers in our firm providing
substantive attention to other legal matters on behalf of the Company and the Partnership; and
“believe” refers to the good faith belief of each of those lawyers.

Based solely upon oral telephonic advice from one or more members of the Commission’s staff, we
inform you that no stop order suspending the effectiveness of the Registration Statement has been
issued under the Securities Act and no proceedings for that purpose have been instituted or are
pending or threatened by the Commission.

We are not representing the Company, the Partnership or any Subsidiary in any pending litigation in
which it is a named defendant that challenges the validity or enforceability of, or seeks to enjoin
the performance of, the Agreement.

Further, we confirm to you that the Registration Statement, as of its effective time and date, and
the Prospectus, as of the date of the Prospectus, appeared to us on their face to be responsive in
all material respects to the requirements of the form on which the Registration Statement was
filed, as well as the applicable requirements of Regulation C under the Securities Act, except that
the foregoing statement does not address any requirement relating to financial statements and
related notes, financial statement schedules or financial or accounting data contained in the
Registration Statement or the Prospectus.

This letter is furnished by us as counsel for the Company to you in connection with the Agreement
and is solely for your benefit in connection with the issuance to you of the Shares, and may not be
relied on for any other purpose by you or anyone else.

EXHIBIT 7(n)(i)

 

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Exhibit 7(n)(ii)

FORM OF TAX OPINION OF GOODWIN PROCTER LLP

TO BE DELIVERED PURSUANT TO SECTION 7(n)(i)

Ladies and Gentlemen:

We have acted as counsel for DiamondRock Hospitality Company, a Maryland corporation (the
“Company”), in connection with the Company’s automatic shelf registration statement on Form S-3
filed on August 12, 2009 (File No. 333-161298) filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, as amended by the prospectus supplement dated October
19, 2009 (as so amended or supplanted, the “Registration Statement”), and sale by the Company
through Cantor Fitzgerald & Co (“CF&Co), in one or more offerings, of up to $75,000,000 aggregate
maximum offering price of shares of common stock, $0.01 par value per share (the “Shares”), of the
Company pursuant to the sales agreement dated October 19, 2009 (the “Sales Agreement”) among the
Company, DiamondRock Hospitality Limited Partnership, a Delaware limited partnership (the
“Operating Partnership”), and CF&Co. This opinion letter addresses the Company’s qualification as
a real estate investment trust (a “REIT”) under the Internal Revenue Code of 1986, as amended (the
“Code”), the classification of the Operating Partnership for federal income tax purposes, and the
accuracy of certain matters discussed in the Registration Statement under the heading “Federal
Income Tax Considerations Related to our REIT Election” and in the prospectus supplement under the
heading “Supplement to Federal Income Tax Considerations.”

The advice set forth herein is not intended for or written to be used, nor can it be used, by
any taxpayer for the purpose of avoiding United States tax penalties that may be imposed on the
taxpayer. The advice contained herein was written to support the issuance and sale of the Shares.
You should seek advice based on your particular circumstances from an independent tax advisor. The
foregoing language is intended to satisfy the requirements under the regulations in Section 10.35
of Treasury Department Circular 230.

In rendering the following opinions, we have reviewed and relied upon the Articles of
Amendment and Restatement of Articles of Incorporation dated as of June 25, 2004 and Second Amended
and Restated Bylaws of the Company dated as of April 20, 2005, each as amended from time to time
and as in effect as of the date of this opinion letter, the Limited Partnership Agreement of the
Operating Partnership dated as of June 4, 2004 and as in effect as of the date hereof, and such
other records, certificates, and documents as we have deemed necessary or appropriate for purposes
of rendering the opinions set forth herein. For purposes of this opinion letter, we have assumed
(i) the genuineness of all signatures on documents we have examined, (ii) the authenticity of all
documents submitted to us as originals, (iii) the conformity to the original documents of all
documents submitted to us as copies, (iv) the conformity, to the extent relevant to our opinions,
of final documents to all documents submitted to us as drafts, (v) the authority and capacity of
the individual or individuals who executed any such documents on behalf of any person, (vi) due
execution and delivery of all such documents by all the parties thereto, (vii) the compliance of
each party with all material provisions of such documents, and (viii) the accuracy and completeness
of all records made available to us.

We also have reviewed and relied upon the representations, as to factual matters, and
covenants of the Company and the Operating Partnership contained in a letter that the Company
provided to us in connection with the preparation of this opinion letter (the “REIT Certificate”),
and that we have discussed with the Company’s representative, regarding the organization and
operations of the Company and the Operating Partnership and other matters affecting the Company’s
ability to qualify as a REIT. For purposes of this opinion letter, we assume that each such
representation and covenant has been, is and
will be true, correct and complete, that the Company, the Operating Partnership and any
subsidiaries have been, are and will be owned and operated in accordance with the REIT Certificate
and that all representations that speak to the best of the belief and/or knowledge of any person(s)
or party(ies), or are subject to similar qualification, have been, are and will continue to be
true, correct and complete as if made without such qualification. To the extent such
representations and covenants speak to the intended ownership or operations of the Company or the
Operating Partnership, we assume that each of the Company and the Operating Partnership will in
fact be owned and operated in accordance with such stated intent.

EXHIBIT 7(n)(ii)

 

1

 

Based upon the foregoing and subject to the limitations set forth herein, we are of the
opinion that:

(i) commencing with the Company’s taxable year ended December 31, 2005, the Company has been
organized and operated in conformity with the requirements for qualification and taxation as a REIT
under the Code and its current and proposed ownership and operations will allow the Company to
continue to satisfy the requirements for qualification and taxation as a REIT under the Code for
subsequent taxable years;

(ii) as long as the Operating Partnership has only one partner for federal income tax
purposes, it will be disregarded as an entity separate from the Company and if and when the
Operating Partnership has two or more partners for federal income tax purposes, the Operating
Partnership will be treated as a partnership within the meaning of Code Sections 7701(a)(2) and
761(a) and will not be treated as a publicly traded partnership taxable as a corporation under the
rules of Code Section 7704; and

(iii) the statements set forth under the heading “Federal Income Tax Considerations Related to
our REIT Election” in the Registration Statement and under the heading “Supplement to Federal
Income Tax Considerations” in the prospectus supplement, insofar as such statements constitute
matters of law, summaries of legal matters, legal documents, contracts or legal proceedings, or
legal conclusions, are correct in all material respects and do not omit to state a matter of law
necessary to make the statements therein, in light of the circumstances under which they were made,
not misleading.

* * * * *

We express no opinion other than the opinions expressly set forth herein. Our opinions are
not binding on the Internal Revenue Service. The Internal Revenue Service may disagree with and
challenge our conclusions, and a court could sustain such a challenge. Our opinions are based upon
the Code, the Income Tax Regulations and Procedure and Administration Regulations promulgated
thereunder and existing administrative and judicial interpretations thereof, all as in effect as of
the date of this opinion letter. Changes in applicable law could cause the federal income tax
treatment of the Company or the Operating Partnership to differ materially and adversely from the
treatment described above and render the tax discussion in the Registration Statement incorrect or
incomplete.

We are rendering this opinion letter to you pursuant to Section 7(n)(i) of the Sales Agreement
in connection with the sale of Shares and this opinion letter may not be relied upon by any other
person or for any other purpose without our prior written consent. This opinion letter speaks only
as of the date hereof, and we undertake no obligation to update this opinion letter or to notify
any person of any changes in facts, circumstances or applicable law (including without limitation
any discovery of any facts that are inconsistent with the REIT Certificate).

Very truly yours          

EXHIBIT 7(n)(ii)

 

2

 

Exhibit 7(n)(iii)

FORM OF OPINION OF MICHAEL D. SCHECTER, ESQ.,

TO BE DELIVERED PURSUANT TO SECTION 7(n)(iii)

I am the general counsel of DiamondRock Hospitality Company, a Maryland corporation (the
“Company”). I have represented the Company and DiamondRock Hospitality Limited Partnership, a
Delaware limited partnership (the “Partnership”), in connection with, among other things, the
execution and delivery of the Sales Agreement, dated as of October 19, 2009 (the “Agreement”),
among the Company, the Partnership and you (“CF&Co”).

I am furnishing this opinion letter pursuant to Section 7(n)(iii) of the Agreement. Capitalized
terms that are not defined herein but are defined in the Agreement shall have the meaning ascribed
to them in the Agreement.

In connection with the delivery of this opinion, I have examined such corporate or partnership
records, certificates and other documents or other agreements and such questions of law that I have
considered necessary or appropriate for the purposes of this opinion. Upon the basis of such
examination, I advise you that, in my opinion:

	 	1.	 	Except as disclosed in the Registration Statement and the Prospectus, there are
no outstanding (i) securities or obligations of the Company, the Partnership or any
Subsidiary convertible into or exchangeable for any capital stock of the Company, (ii)
warrants, rights or options to subscribe for or purchase from the Company, the
Partnership or any Subsidiary any such capital stock or any such convertible or
exchangeable securities or obligations or (iii) obligations of the Company, the
Partnership or any Subsidiary to issue or sell any shares of capital stock, partnership
interests or membership interests, as applicable, any such convertible or exchangeable
securities or obligation, or any such warrants, rights or options.

	 	2.	 	To my knowledge, no actions, suits, proceedings, investigations, legal or
governmental proceedings are pending or overtly threatened to which the Company or the
Partnership or any Subsidiary or any of their directors, officers or employees is a
party or to which the properties, assets or rights of the Company or the Partnership or
any Subsidiary is subject, at law or in equity, before any federal, state, local or
foreign governmental or regulatory commission, board, body, authority, arbitral panel
or agency that are required to be described in the Registration Statement or the
Prospectus.

	 	3.	 	Neither the Company nor the Partnership, nor, to my knowledge, any Subsidiary
is (i) in breach of, or in default under (nor has any event occurred which with notice,
lapse of time, or both would constitute a breach of, or default under), its charter,
bylaws, certificate of limited partnership, partnership agreement or other
organizational documents or (ii) in breach or default (nor has any event occurred which
with notice, lapse of time or both would constitute a breach or default) in the
performance or observance of any of its obligations, agreements, covenants or
conditions contained in any license, indenture, mortgage, deed of trust, bank loan or
credit agreement or other agreement or instrument known to me which the Company, the
Partnership or any Subsidiary is a party or by which it or its properties are bound or
affected, except for such breaches or defaults which would not individually or in the
aggregate, have a Material Adverse Effect.

	 	4.	 	Each Subsidiary listed on Exhibit A (the “Designated Subsidiaries”) is
validly existing as a corporation, limited liability company, or limited partnership,
and in good standing under the law of its jurisdiction of organization. Each of the
Designated Subsidiaries is duly qualified
to do business and is in good standing as a foreign corporation in the jurisdictions set
forth opposite its name on Exhibit A hereto.

EXHIBIT 7(n)(iii)

 

1

 

	 	5.	 	Each of the Designated Subsidiaries has the corporate power or limited
liability company power, as the case may be, to conduct its respective business and to
own, lease and operate its respective properties as such business and properties are
described in the Registration Statement and the Prospectus.

	 	6.	 	With the exception of its interests in the Designated Subsidiaries, the Company
does not own, directly or indirectly, capital stock or other equity interests in any
other corporation, limited liability company, partnership, joint venture, trust or
other entity.

	 	7.	 	The Shares, when issued in accordance with the Agreement against payment of the
consideration set forth therein, will be free and clear of any pledge, lien,
encumbrance, security interest or claim created by the Company.

	 	8.	 	The issued and outstanding shares of capital stock of the Company have been
duly authorized and validly issued, and are fully paid and non-assessable.

	 	9.	 	The issued and outstanding units of partnership interests or membership
interests of the Partnership and each Subsidiary have been duly authorized and validly
issued, are fully paid and non-assessable, and are owned of record directly or
indirectly by the Company.

	 	10.	 	To my knowledge, there are no contracts or documents of a character required to
be filed as exhibits to the Registration Statement or summarized in the Registration
Statement and the Prospectus that have not been so filed, summarized or described.

	 	11.	 	The execution, delivery and performance of the Agreement by the Company and the
Partnership and the issuance by the Company of the Shares in accordance therewith will
not, to my knowledge, result in a breach of, or default that would reasonably be
expected to have a Material Adverse Effect under any agreement, license, instrument,
indenture, mortgage or deed of trust known to me to which the Company, the Partnership
or any Subsidiary is a party or by which any of them or their respective properties may
be bound.

	 	12.	 	Except as described in the Registration Statement and the Prospectus, to my
knowledge, no agreement grants to any person the right to require the Company to file a
registration statement under the Securities Act with respect to any securities of the
Company owned or to be owned by such person or to require the Company to include such
securities in the securities registered pursuant to the Registration Statement or in
any securities being registered pursuant to any other registration statement filed by
the Company under the Securities Act, except for any such rights that have been waived.

The foregoing opinions are limited to the Federal laws of the United States and the laws of the
States of New York, Delaware (but only insofar as set forth in the Revised Uniform Limited
Partnership Act of the State of Delaware) and Maryland (but only insofar as set forth in the
Maryland General Corporation Law).

EXHIBIT 7(n)(iii)

 

2

 

I have relied as to certain matters on information obtained from public officials and other sources
believed by me to be responsible, and I have assumed that the original documents conformed to the
specimens examined by me and that the signatures on all documents examined by me are genuine,
assumptions which I have not independently verified but have no information to the contrary.

This opinion letter is furnished by me as counsel for the Company and the Partnership and may be
relied upon by you, your successors and assigns. I also consent to reliance on this opinion by
Goodwin Procter LLP (“Goodwin Procter”) in connection with the rendering of its opinion of even
date herewith to the addressees hereof. Except as set forth above, this opinion letter may not be
used or relied upon by you or Goodwin Procter, or quoted by you or Goodwin Procter, for any other
purpose or by any other person, nor may copies be delivered to any other person, without in each
instance, my prior written consent.

This opinion letter is given as of the date hereof. I assume no obligation to update or supplement
this opinion letter to reflect any facts or circumstances which may hereafter come to my attention,
including any subsequent changes in law or regulation, or the interpretation thereof.

EXHIBIT 7(n)(iii)

 

3

 

Exhibit 7(m)

OFFICER CERTIFICATE

The undersigned, the duly qualified and elected [Chief Executive Officer, Chief Financial Officer,
or Executive Vice President and General Counsel], of DIAMONDROCK HOSPITALITY COMPANY (“Company”), a
Maryland corporation, does hereby certify in such capacity and on behalf of the Company, for itself
and as the general partner of DiamondRock Hospitality Limited Partnership, a Delaware limited
partnership (the “Partnership”) pursuant to Section 7(m) of the Sales Agreement dated October 19,
2009 (the “Sales Agreement”) between the Company, the Partnership and Cantor Fitzgerald & Co., that
to the best of the knowledge of the undersigned:

(i) The representations and warranties of the Company in Section 6 of the Sales
Agreement (A) to the extent such representations and warranties are subject to qualifications and
exceptions contained therein relating to materiality or Material Adverse Effect, are true and
correct on and as of the date hereof with the same force and effect as if expressly made on and as
of the date hereof, except for those representations and warranties that speak solely as of a
specific date and which were true and correct as of such date, and (B) to the extent such
representations and warranties are not subject to any qualifications or exceptions, are true and
correct in all material respects as of the date hereof as if made on and as of the date hereof with
the same force and effect as if expressly made on and as of the date hereof, except for those
representations and warranties that speak solely as of a specific date and which were true and
correct as of such date; and

(ii) The Company has complied with all agreements and satisfied all conditions on
its part to be performed or satisfied pursuant to the Sales Agreement at or prior to the date
hereof.

	 	 	 	 	 
	 	 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Date:                     , 20__

EXHIBIT 7(m)exv10w4

Exhibit 10.4

PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS

between

The parties designated on Exhibit A

as Seller

and

CHATHAM LODGING TRUST

as Purchaser

Homewood Suites

35 Middlesex Turnpike

Billerica, Massachusetts 01821

Homewood Suites

2261 Killebrew Drive

Bloomington, Minnesota 55425

Homewood Suites

5107 Peter Taylor Park

Brentwood, Tennessee 37027

Homewood Suites

2747 North Stemmons Freeway

Dallas, Texas 75207

Homewood Suites

2 Farm Glen Boulevard

Farmington, Connecticut 06032

Homewood Suites

290 Southhall Lane

Maitland, Florida 32751

November 16, 2009

 

 

PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS

     This PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS (“Agreement”) is dated as of
this 16th day of November, 2009 (“Effective Date”), and is made by and between each of the
parties named on Exhibit A hereto (each, individually, “Seller” and, collectively,
“Sellers”), and CHATHAM LODGING TRUST, a Maryland real estate investment trust
(“Purchaser”).

RECITALS

     A. Sellers are the owners of all of the Properties, with the specific owner of each Property
as set forth on Exhibit A.

     B. Purchaser desires to purchase all of the Properties and to acquire all of Sellers’
respective right, title and interest in and to the Properties, on the terms and conditions set
forth in this Agreement.

     C. Sellers desire to sell to Purchaser all of the Properties and to convey to Purchaser all of
their respective right, title and interest in the Properties, on the terms and conditions set forth
in this Agreement.

     D. All capitalized terms used in this Agreement and not otherwise defined shall have the
meanings ascribed to such terms in Article I.

AGREEMENT

     NOW, THEREFORE, for valuable consideration, including the promises, covenants, representations
and warranties hereinafter set forth, the receipt and adequacy of which are hereby acknowledged,
the parties, intending to be legally and equitably bound, agree as follows.

I.

DEFINITIONS

     As used in this Agreement, the following terms have the meanings ascribed to them in this
Article I:

     “Alcoholic Beverages.” With respect to each Property, all unopened wine, beer and
other alcoholic beverages located at the Real Property and held for consumption and/or sale in the
operation of the Hotel.

     “Assignment of Contracts.” As set forth in Section 5.2(d) hereof.

     “Assignment of Intangibles.” As set forth in Section 5.2(c) hereof.

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     “Authorizations” shall mean all licenses, permits and approvals required by any
governmental or quasi-governmental agency, body or officer for the ownership, operation and use of
the Property or any part thereof.

     “Bill of Sale.” As set forth in Section 5.2(b) hereof.

     “Bookings.” With respect to each Property, all contracts or reservations for the use
or occupancy of guest rooms, meeting rooms and/or banquet facilities of the Hotel for periods on
and after the Closing Date which are made in Seller’s ordinary course of business for the Hotel.

     “Casualty.” As set forth in Section 12.13.1 hereof.

     “Casualty Notice.” As set forth in Section 12.13.1 hereof.

     “Casualty Renovation Cost.” As set forth in Section 12.13.1 hereof.

     “Close of Escrow.” As set forth in Section 5.1 hereof.

     “Closing Date.” As set forth in Section 5.1 hereof.

     “Contracts.” With respect to each Property, all leases of furniture and equipment,
all space leases, and all contracts and agreements used and/or executed in connection with the
construction, ownership, operation, occupancy and/or maintenance of the Hotel and/or the Property,
together with (a) all contracts, agreements and other obligations terminable on not more than
thirty (30) days prior notice without fee or penalty, (b) all Bookings, gift certificates, and
similar promotional arrangements entered into by Seller prior to the Effective Date, and (c) all
contracts and agreements entered into by Seller in the ordinary course of business, but only to the
extent expressly permitted, and disclosed to Purchaser as required, by the terms of this Agreement,
but excluding, in each case, the Franchise Agreement, provided Purchaser shall have the right, by
notice delivered to Seller during the Due Diligence Period, to require that, by Close of Escrow,
Seller terminate or give notice of termination with respect to any or all Contracts that can be
terminated without penalty, or with penalty if Purchaser agrees to assume the penalty. All of the
Material Contracts in effect as of the Effective Date are described on Exhibit “C” attached
hereto.

     “Cooperating Party.” As set forth in Section 12.5 hereof.

     “Cut-Off Time.” As set forth in Section 5.5.4 hereof.

     “Due Diligence Materials.” As set forth in Section 4.3 hereof.

     “Due Diligence Period.” As set forth in Section 4.3 hereof.

     “Earnest Money Deposit.” As set forth in Section 2.2.1 hereof.

     “Environmental Damages.” As set forth in Section 4.4.1(j) hereof.

     “Environmental Requirements.” As set forth in Section 4.4.1(k) hereof.

2

 

     “Escrow.” As set forth in Section 3.1 hereof.

     “Escrow Holder.” Chicago Title Insurance Company

     “Exchangor.” As set forth in Section 12.15 hereof.

     “Excluded Assets.” With respect to each Property, the Proprietary Computer Systems,
the Excluded Documents, cash, cash equivalents, checks and other funds, including, without
limitation, till money, house banks, Seller’s Accounts Receivable, notes, securities and other
evidence of indebtedness held at the Hotel as of the Cut-Off Time, and balances on deposit to the
credit of Seller with banking institutions, all of which shall be retained by Seller.

     “Excluded Documents.” With respect to each Property, all (a) internal memoranda,
correspondence, analyses, documents or reports prepared by or for Seller or any affiliate of Seller
in connection with the sale of the Property or otherwise, including, without limitation, tax
returns or financial statements of Seller (exclusive of operating statements of the Hotel which
shall be available for review by Purchaser) for or in connection with its ownership or operation of
the Property (but excluding any historical sales/customer data used in the ordinary course of
business which shall be provided to Purchaser), (b) communications between Seller or any affiliate
and its attorneys or other agents or representatives, (c) employee personnel files of Seller and
the manager of the Hotel, (d) appraisals, assessments or other valuations of the Property in the
possession of Sellers, (e) original bills, invoices, receipts and checks relating to expenses
incurred prior to the Cut-Off Time (provided that Purchaser shall be entitled to copies of such
items), and (f) any confidential or proprietary information of any Seller in Seller’s possession,
in each case however embodied.

     “Food Inventory.” With respect to each Property, all unopened food, food stuffs, menu
stock and non-alcoholic beverages located at the Real Property and held for consumption and/or sale
in the operation of the Hotel.

     “Franchise Agreement.” With respect to each Property, the franchise agreement to be
entered into by Purchaser with Franchisor at or prior to Closing or, if an existing franchise
agreement is being assumed by Purchaser pursuant to the election of Franchisor, then the assumed
franchise agreement from and after Closing.

     “Franchisor.” With respect to each Property, the franchisor having entered into an
existing franchise agreement or which will enter into a new Franchise Agreement.

     “Good Funds.” A deposit of cashier’s check, certified funds, or confirmed wire
transfer of funds.

     “Hazardous Materials.” As set forth in Section 4.4.1(l) hereof.

     “Hotel.” With respect to each Property, the hospitality business (including restaurant
and lounge services and businesses) operated and conducted by Seller on the Real Property.

     “Improvements.” With respect to each Property, the buildings, structures, and other
permanent improvements located on the Land, including, without limitation, electrical

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distribution systems, HVAC systems, walkways, driveways, parking lots, recreational
facilities, plumbing, swimming pool, lighting, and mechanical equipment and fixtures installed
thereon, and all rights, benefits and privileges appurtenant thereto.

     “Intangible Property.” With respect to each Property, all (a) fictitious business
names and logos used by Seller in the operation of the Hotel and which are identified exclusively
with the Hotel, but excluding the franchise proprietary names, (b) local telephone and facsimile
exchange numbers identified exclusively with the Hotel, (c) transferable certificates (including
the Certificate of Occupancy for the Real Property), licenses (including liquor licenses, to the
extent transferable), permits and warranties now in effect with respect to the Property
(specifically excluding, however the franchise name for the Hotel) at no cost to Seller, (d)
internet sites and names associated with each hotel (URLs), (e) plans, specifications and surveys
and (f) all other intangible property located at the Real Property and used by Seller exclusively
in connection with the ownership and operation of the Hotel, but excluding the Excluded Assets.

     “Intermediary.” As set forth in Section 12.15.3 hereof.

     “Inventory.” With respect to each Property, all unopened operating inventories,
materials and supplies used in connection with the operation of the Hotel and located thereat,
including linens, bath towels, paper goods and guest supplies, and all gift shop inventory owned by
Seller, including without limitation, Alcoholic Beverages.

     “IPO Condition.” As set forth in Section 8.2(d) hereof.

     “Land.” With respect to each Property, the land, as more particularly described on
Exhibit “B” attached hereto and upon which the Improvements are located, including all
easements, rights-of-way, strips, zones, licenses, transferable hereditaments, privileges,
tenements and appurtenants belonging to the Land including any development rights, water rights and
mineral rights, and any right or interest in any open or proposed highways, streets, roads,
avenues, alleys, easements, strips, gores and rights-of-way in, across, in front of, contiguous to,
abutting or adjoining the Land, and other rights and benefits running with the Land and/or the
owner of the Land.

     “Liabilities.” As set forth in Section 12.15.2 hereof.

     “Liquor Licenses.” With respect to each Property, the liquor licenses relating to the
operation of the restaurant and lounge businesses at the Real Property, as described in Section 2.4
hereof.

     “Management Agreement” With respect to each Property, the management agreement with a
third-party manager currently in existence.

     “Material Contracts.” With respect to each Property, those Contracts which require
more than thirty (30) days’ notice of termination or the payment of a fee or penalty in connection
with such termination or which involve payment obligations by any Seller or third-party manager in
excess of Fifty Thousand Dollars ($50,000.00).

     “Non-Foreign Affidavit.” As set forth in Section 5.2(e) hereof.

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     “Notice.” As set forth in Article XI hereof.

     “Opening of Escrow.” As set forth in Section 3.1 hereof.

     “PCA Report.” As set forth in Section 4.3.9 hereof.

     “Permitted Exceptions.” As set forth in Section 4.2 hereof.

     “Personal Property.” With respect to each Property, all (a) keys and combinations to
all doors, cabinets, enclosures and other locks on or about the Real Property, (b) furniture,
equipment, appliances, televisions, telephone systems, artwork, machinery, tools, trade fixtures,
linens, towels, utensils, china, glassware, and theme park tickets and other personal property
owned by Seller, located on the Real Property, including those used in the operation of any
restaurants and other ancillary hotel operations, and which are used exclusively in connection with
the operation of the Hotel and/or the Real Property, (c) copies of files maintained or generated by
Seller and/or Seller’s Hotel manager in the course of, and related to, the operation of the Hotel
(excluding the Excluded Documents and other materials proprietary to Seller) which are located on
the Real Property, (d) the Restaurant Equipment, (e) the Food Inventory, (f) any vehicles owned by
Seller and used in the operation of the Hotel, (g) to the extent transferable to Purchaser, the
Liquor License, and (h) all other personal property located at the Real Property with respect to
which Seller is the owner thereof and which is used by Seller exclusively in connection with the
ownership and operation of the Hotel and/or the Real Property; but excluding, however, (i) the
Excluded Assets, (ii) the personal property owned by any tenant or guest on the Real Property,
(iii) all refunds and claims for refunds for real property and personal property taxes in
connection with the Property for any period prior to the Close of Escrow, and (iv) all tax and
utilities and other deposits.

     “Physical Condition.” A structural or environmental defect or defects identified by
an independent and qualified structural or environmental consultant (“Consultant”) in a
property condition assessment report or an environmental site assessment report issued by such
Consultant (either, an “Inspection Report”).

     “Property.” With respect to each Seller, the Improvements, the Hotel, the Personal
Property, the Inventory, and the Intangible Property owned by such Seller.

     “Proprietary Computer Systems.” With respect to each Property, the computer software,
hardware, programs, processes and procedures set forth for such Property on Exhibit “C”
attached hereto.

     “Proprietary Information.” As set forth in Section 12.18 hereof.

     “Purchase Price.” As set forth in Section 2.2 hereof.

     “Real Property.” With respect to each Property, the Land and the Improvements.

     “Registration Statement.” As set forth in Section 8.2(d) hereof.

     “Reports. As set forth in Section 4.4.1(e) hereof.

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     “Restaurant Equipment.” With respect to each Property, all equipment, furniture,
fixtures, utensils, glassware, silverware and china used in connection with the operation of all
restaurants and lounges on the Real Property.

     “Seller’s Accounts Receivable.” With respect to each Property, all accounts
receivable and other sums owing Seller in connection with the operation of the Hotel prior to the
Close of Escrow existing on and prior to the Close of Escrow.

     “Survey.” As set forth in Section 4.2 hereof.

     “Title Commitment.” As set forth in Section 4.1 hereof.

     “Title Insurer.” Chicago Title Insurance Company, 1129 20th Street, NW,
Suite 300, Washington, DC 20036

     “Title Policy.” As set forth in Section 4.2 hereof.

     “WARN Act.” As set forth in Section 6.3 hereof.

II.

SALE AND PURCHASE OF PROPERTY

     2.1 Purchase of Property. As of the Close of Escrow, and subject to the terms and
conditions of this Agreement, each Seller shall sell, assign, convey, transfer and deliver to
Purchaser, and Purchaser shall purchase and acquire from each Seller, such Seller’s fee title in
the Improvements, good and marketable title in the Land and the Personal Property and the
Inventory, and all of such Seller’s right, title and interest in and to the Contracts, and the
Intangible Property, free and clear of all monetary liens and encumbrances (other than the
Contracts and the Permitted Exceptions), at the purchase price provided in Section 2.2 hereof. For
the avoidance of doubt, this transaction is for a purchase and sale of all, and not less than all,
of the Properties owned by the Sellers.

     2.2 Purchase Price and Terms of Payment. The aggregate purchase price for the
Properties (“Purchase Price”) shall be Seventy-three Million Five Hundred Thousand Dollars
($73,500,000), allocated as indicated on Exhibit A-1 (which allocation shall be incorporated into
Exhibit A-1 by not later than ten (10) days following the date hereof), and shall consist of and be
payable as follows:

          2.2.1 Earnest Money Deposit. Within two (2) business days following the Effective
Date, Purchaser shall deliver to Escrow Holder, in Good Funds, the sum of One Million Five Hundred
Thousand Dollars ($1,500,000) (together with all interest accrued thereon, and the Additional
Deposit, if delivered, the “Earnest Money Deposit”). The Earnest Money Deposit shall be
fully refundable to Purchaser if Purchaser elects to terminate this Agreement for any reason on or
before the 30th day following the Effective Date (“Due Diligence Period”). If
Purchaser has not elected to terminate this Agreement and cancel the Escrow prior to the later of
(i) the end of the Due Diligence Period and (ii) the end of the Limited Due Diligence Period, if
any, then, within two (2) business days, Purchaser shall increase the Earnest Money Deposit to

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Two Million Five Hundred Thousand Dollars ($2,500,000) (without regard to any interest
earnings, provided that any interest earned thereon shall become part of the Earnest Money Deposit)
by delivery to Escrow Holder of the additional sum of One Million Dollars ($1,000,000) (the
“Additional Deposit”) in Good Funds. In the event of any failure by Purchaser to timely
deliver the Additional Deposit, if Purchaser has not remedied such failure within one (1) business
day following written notice of such failure from Seller to Purchaser, Seller shall have the
absolute right by written notice to Purchaser, given at any time prior to the posting of the
Additional Deposit, to terminate this Agreement, whereupon Seller shall be entitled to receive the
Earnest Money Deposit. Upon expiration of the later of (i) the Due Diligence Period and (ii) the
Limited Due Diligence Period, if any, unless Purchaser has timely terminated this Agreement, the
Earnest Money Deposit shall thereafter be non-refundable to Purchaser, except (a) in the event of a
material default by Seller of its obligations under this Agreement that is not cured within any
applicable cure period provided in this Agreement, (b) upon the failure of a condition precedent to
Purchaser’s obligations as set forth in this Agreement, or (c) as otherwise specifically provided
in this Agreement. The Earnest Money Deposit shall be applied to the Purchaser Price on the
Closing Date in the event Closing occurs.

          2.2.2 Existing Indebtedness. The Properties shall be sold free and clear of any
existing indebtedness.

          2.2.3 Balance of Purchase Price. Not later than 11:00 a.m. Washington, DC time on the
Closing Date, Purchaser shall deposit with Escrow Holder, in Good Funds, the balance of the
Purchase Price, reduced or increased by such amounts required to take into account by such
prorations, credits, costs or other adjustments which are required by this Agreement and which can
be computed and determined as of the time for the required deposit hereunder.

     2.3 Assumption of the Contracts. As additional consideration, Purchaser shall, on and
as of the Close of Escrow, at its sole cost and expense, assume and agree to pay all sums and
perform, fulfill and comply with all other covenants and obligations which are to be paid,
performed and complied with by Sellers under the Contracts, that Purchaser is, pursuant to the
provisions of this Agreement, required to assume, which first arise or accrue on and after the
Closing Date.

     2.4 Liquor Licenses and Alcoholic Beverages. Seller will cooperate in all reasonable
respects (which shall include, without limitation, supplying information known to Seller and
execution of such documents as may be legally required) with Purchaser in connection with
Purchaser’s application for transfer of the Liquor License to Purchaser or issuance of new liquor
licenses. If Purchaser is unable to obtain the transfer of the Liquor License or issuance of new
liquor licenses (temporary or permanent) prior to the Closing, provided that Purchaser has taken
all commercially reasonable measures to obtain cause such transfer or obtain such new license,
then, on the Closing Date, Seller shall cause the current licensee of the applicable Hotel
(“License Holder”) enter into a lease, concession or management agreement with Purchaser, to the
extent legally permissible, whereby License Holder shall, for a period not to exceed ninety (90)
days, operate the liquor concessions at the Hotel under Seller’s or License Holder’s existing
liquor license at no cost or expense to Purchaser pending the transfer or issuance of the Liquor
License to Purchaser. Purchaser shall indemnify, defend and hold the License Holder harmless

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from and against any and all claims, liabilities, costs and expenses (including, without
limitation, reasonable attorneys’ fees and costs) arising in connection with such operation, except
to the extent of any negligence or willful misconduct of License Holder or any of its agents or
employees in such respect, and provide insurance coverage naming License Holder as an additional
named insured.

III.

ESCROW

     3.1 Opening of Escrow. Purchaser and Sellers shall promptly open an escrow
(“Escrow”) with Escrow Holder by depositing with Escrow Holder the Earnest Money Deposit
and three (3) copies of this Agreement duly executed (in counterparts or otherwise) by Sellers and
Purchaser. The time when Escrow Holder so receives the Earnest Money Deposit and the copies of
this Agreement, fully executed by the parties and executes and delivers copies thereof to Sellers
and Purchaser, shall be deemed the “Opening of Escrow.” Purchaser and Sellers shall
execute and deliver to Escrow Holder, in a timely fashion, such instruments and funds as are
reasonably necessary to close the Escrow and consummate the sale and purchase of the Property (or
the exchange thereof, if applicable) in accordance with the terms and provisions of this Agreement.

     3.2 Escrow Holder’s General Provisions. In the event of any conflict between the
provisions of the typed portion of this Agreement and Escrow Holder’s General Provisions (if any),
the provisions of the typed portion of this Agreement shall be controlling and the General
Provisions will be deemed amended accordingly.

     3.3 Additional Escrow Holder Requirements. If there are any requirements imposed by
Escrow Holder relating to the duties or obligations of Escrow Holder, or if Escrow Holder requires
any other additional instructions, the parties agree to make such deletions, substitutions and
additions to this Agreement which do not cause more than a ministerial or de minimis change to this
Agreement or its intent. Any such changes requested by Escrow Holder shall be subject to written
approval of the parties, which approval shall not be unreasonably withheld or conditioned.

     3.4 Deposit of Funds. Except as otherwise provided in this Agreement, all funds
deposited into the Escrow by Purchaser shall be immediately deposited by Escrow Holder into
Treasury Bills or other short-term United States Government obligations, in repurchase contracts
for the same, or in a federally insured money market account, subject to the control of Escrow
Holder in a bank or savings and loan association, or such other institution approved by Purchaser;
provided, however, that such funds must be readily available as necessary to comply with the terms
of this Agreement and Escrow Holder’s escrow instructions (including the return of the Earnest
Money Deposit, or any portion thereof then on deposit with Escrow Holder, to Purchaser in
accordance with this Agreement), and for the Escrow to close within the time specified in Section
5.1 of this Agreement. Except as may be otherwise specifically provided herein, interest on
amounts placed by Escrow Holder in any such investments or interest bearing accounts shall accrue
to the benefit of Purchaser, and Purchaser shall promptly provide to Escrow Holder Purchaser’s Tax
Identification Number.

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     3.5 Release of Funds by Escrow Holder. Escrow Holder’s obligation, if any, under this
Agreement to release the Earnest Money Deposit, and any other funds, prior to the Close of Escrow
is subject to such funds having cleared through the bank, savings and loan, or other financial
institution on which such funds are drawn. Escrow Holder shall make such payments only in strict
accordance with the provisions of this Agreement, and Purchaser and Sellers agree to save and hold
Escrow Holder harmless in disbursing and releasing the funds as specified in this Agreement.
Purchaser and Sellers represent to Escrow Holder that the release instructions set forth in this
Agreement are made of their own free will, under no duress, and with full understanding of the
consequences thereof, not relying on any information furnished or statements made by Escrow Holder.

IV.

CONDITION OF TITLE

     4.1 Title Commitment. Within five (5) days after the Opening of Escrow, Escrow
Holder, at Purchaser’s sole cost and expense, shall cause to be furnished to Purchaser, with a copy
to Sellers, a current commitment for a 2006 A.L.T.A. Owner’s Policy of Title Insurance (standard
coverage) for each Property issued by Title Insurer (“Title Commitment”) reflecting the
status of title to the Real Property, and all exceptions, including easements, licenses,
restrictions, rights-of-way, leases, covenants, reservations and other conditions, if any,
affecting the Real Property, which would appear in a 2006 A.L.T.A. Owner’s Policy of Title
Insurance (standard coverage) if used, and committing to issue the 2006 A.L.T.A. Owner’s Policy of
Title Insurance (standard coverage) to Purchaser for the Real Property and the Improvements in the
full amount of the Purchase Price. Accompanying the Title Commitment, Escrow Holder shall cause to
be furnished to Purchaser, to the extent available, legible copies of the documents affecting the
Real Property referred to in the Title Commitment.

     4.2 Title to the Real Property. Effective as of the Closing Date, but conditioned
upon the Close of Escrow, Title Insurer shall issue to Purchaser for each Property Title Insurer’s
2006 A.L.T.A. Owner’s Policy of Title Insurance (standard coverage) (“Title Policy”), with
the liability under the Title Policies to be in an aggregate amount equal of the Purchase Price,
insuring the fee title in Real Property as vested in Purchaser subject only to the following
matters affecting title (“Permitted Exceptions”).

     (a) All general and special property taxes and assessments not yet delinquent, and all
improvement and assessment bonds;

     (b) Supplemental taxes, if any, assessed as a result of the sale of the Real Property
and the Improvements by Seller to Purchaser;

     (c) Subject to the provisions of Section 4.4 hereof, all liens, covenants, conditions,
restrictions, easements, rights of way, and all other exceptions to title as referenced in
the Title Commitments, except monetary liens and encumbrances (except as caused by
Purchaser) which Seller shall remove at or prior to the Close of Escrow;

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     (d) Subject to Section 4.4 hereof, all exceptions to title disclosed by the
Surveys (and any updates thereto) of the Real Property for the Title Policy (including,
without limitation, easements, encroachments and zoning);

     (e) Guests of the Hotels in the ordinary course of business and rights of parties in
possession not shown by the public records, but only with respect to those which Purchaser
has actual knowledge thereof prior to expiration of the Due Diligence Period or has
consented to thereafter;

     (f) Governmental laws, codes, ordinances and restrictions now or hereafter in effect so
far as these affect the Real Property or any part thereof, including, without limitation,
zoning ordinances (and amendments and additions relating thereto) and the Americans with
Disabilities Act of 1990, as amended;

     (g) Any exceptions created by Purchaser or its agents, employees and/or contractors,
including without limitation, any exceptions arising by reason of the entry on the Real
Property by Purchaser or by its agents, employees and/or contractors; and

     (h) All preprinted exceptions and exclusions contained in the Title Policies not
customarily removed upon receipt by the Title Company of its standard seller’s affidavit as
to liens and possession through the Close of Escrow, to be provided by Seller.

Purchaser shall have the right to obtain from Title Insurer such endorsements to the Title Policies
and/or such additional liability protection as Purchaser may elect to obtain; provided, however,
that Purchaser’s ability to obtain such title endorsements and/or such additional liability
protection shall not be a condition precedent to Purchaser’s obligations hereunder and shall not
extend or delay the Close of Escrow; provided further, however, that Seller shall execute and
deliver to the Title Insurer such certified organizational documents and consents, affidavits,
agreements, and undertakings (including, without limitation, gap undertakings), as may be required
by the Title Insurer in order to issue the Title Policies with affirmative coverage over mechanics
liens. Purchaser shall be solely responsible for negotiating with Title Insurer with respect to
the Title Policies and/or with respect to such title endorsements and/or such additional liability
protection as may be requested by Purchaser, if any. With respect to each Property, Seller will
deliver to Purchaser a copy of any survey of the Real Property in its possession, without warranty,
and Purchaser shall be solely responsible for, and shall assume the risk of, obtaining a survey (or
updating Seller’s survey) of the Real Property (“Survey”) acceptable to Title Insurer for
purposes of issuing the Title Policy.

     4.3 Inspection and Due Diligence Review.

          4.3.1 Purchaser shall have the right, in its sole discretion, until 5:00 p.m. Washington, DC
time on the 30th day following the Effective Date, to satisfy itself, in its sole and
absolute discretion, as to the condition and extent of the Property (“Due Diligence
Period”). Subject to the prior termination of this Agreement, during the term of this
Agreement, Sellers shall cooperate and provide Purchaser with reasonable and continuing access to
the Real Property or any due diligence materials required hereunder upon one (1) business day prior
Notice to Sellers for the purpose of Purchaser’s inspection and due diligence review. In

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connection with such review, Seller shall deliver to Purchaser or make available to Purchaser
at the respective Hotel during normal business hours during the Due Diligence Period, all records,
including non-proprietary financial reports, the instruments evidencing the Contracts pertaining to
the Hotels and any other documents, which are in or under Sellers’ or Sellers’ property manager’s
control and relate to the operation of the Hotels or any other matter affecting the Property
(“Due Diligence Materials”), except that Sellers shall have no obligation to deliver or
make available to Purchaser, and Purchaser shall have no right to review, the Excluded Assets and
the Excluded Documents. Neither Purchaser nor any of its employees, agents or representatives
shall contact or otherwise discuss this transaction and /or the operation of the Hotels with any
on-site employees of the Hotels; provided, however, that Purchaser may meet with any Hotel’s
General Manager (or other designee) upon not less than one (1) business day’s Notice to Sellers but
only in the presence of Sellers’ representative (unless waived).

          4.3.2 Purchaser acknowledges that prior to the date of this Agreement, Sellers have delivered
to Purchaser, or Sellers have provided Purchaser with access to, certain Due Diligence Materials.
Purchaser shall have until the expiration of the Due Diligence Period to review and approve the Due
Diligence Materials.

          4.3.3 During the Due Diligence Period, Purchaser shall also have the opportunity to conduct a
Phase I environmental audit/study of all Real Property, provided such Phase I environmental
audit/study is not invasive or intrusive. Any environmental audit/study, other than the Phase I,
proposed to be undertaken by Purchaser shall be subject to Sellers’ written approval, which shall
not be unreasonably withheld, prior to the commencement thereof. As a condition to any such
consent, Purchaser shall, or shall cause the entity conducting the Phase I environmental
audit/study to, obtain and maintain such public liability insurance in an amount of Two Million
Dollars ($2,000,000) for each Property, naming as an additional insured the Seller owning such Real
Property. At any time prior to 5:00 p.m. Washington, DC time on the last day of the Due Diligence
Period, Purchaser shall have the right in its sole discretion to terminate this Agreement for any
reason or no reason at all, in which event Escrow Holder shall deliver the Earnest Money Deposit to
Purchaser.

          4.3.4 Purchaser, at all times, will conduct such due diligence in compliance with all
applicable laws, and in a manner so as to not cause damage, loss, cost or expense to Sellers, any
Property or the tenants or guests of any Property, and without unreasonably interfering with or
disturbing any employee, tenant or guest at the Hotels. Purchaser will promptly restore any damage
to the Property caused by Purchaser’s inspection to its condition immediately preceding such
inspections and examinations and will keep the Property free and clear of any mechanic’s liens or
materialmen’s liens in connection with such inspections and examinations.

          4.3.5 The cost of the inspections and tests undertaken pursuant to this Section 4.3 shall be
borne solely by Purchaser. Purchaser shall indemnify, protect, defend, and hold Sellers, Sellers’
lenders, and their affiliates, owners, agents and employees harmless from and against any
obligation, liability, claim (including any claim for damage to property or injury to or death of
any persons), lien or encumbrance, loss, damage, cost or expense, including reasonable attorneys’
fees, whether or not legal proceedings are instituted, arising from the acts or omissions of
Purchaser or its agents, employees or contractors occurring in connection with, or as a result of,
such inspections, tests or examinations of any Property. In the event that

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Purchaser elects to terminate this Agreement prior to the end of the Due Diligence Period or upon any other
termination of this Agreement, except by reason of Seller’s default, Purchaser shall deliver to
Seller copies of all third-party reports received by Purchaser with respect to the Property.

          4.3.6 Subject to Section 12.17, until Close of Escrow, Purchaser shall endeavor in good faith
not to disseminate any information or materials disclosed and/or delivered to it by Sellers, or
Sellers’ agents, employees and representatives which relate to the operations of the Property and
whose dissemination could harm the operations of the Property. Purchaser also agrees that in the
event the transactions contemplated in this Agreement are not consummated as provided herein,
Purchaser shall return all information and materials disclosed and/or delivered to it by Sellers,
or Sellers’ agents, employees and representatives, and all copies thereof, to Sellers promptly upon
Sellers’ request.

          4.3.7 Except as expressly provided in this Agreement, Sellers make no representations or
warranties as to the truth, accuracy or completeness of any materials, data or other information,
if any, supplied to Purchaser in connection with Purchaser’s inspection of the Property (e.g., that
such materials are complete, accurate or the final version thereof, or that all such materials are
in Sellers’ possession). It is the parties’ express understanding and agreement that any such
materials are to be provided only for Purchaser’s convenience in making its own examination and
determination prior to the expiration of the Due Diligence Period as to whether it wishes to
purchase the Properties, and, in doing so, Purchaser shall rely exclusively on its own independent
investigation and evaluation of every aspect of each Property and not on any materials supplied by
Sellers. Purchaser expressly disclaims any intent to rely on any such materials provided to it by
Sellers in connection with its inspection and agrees that it shall rely solely on its own
independently developed or verified information.

          4.3.8 The obligations of Purchaser under this Section 4.3 (including its indemnification
obligations) shall survive the Close of Escrow or the termination of this Agreement.

          4.3.9 Notwithstanding any provision herein to the contrary, so long as Purchaser has ordered
(i) the Phase I environmental audit/study (the “Environmental Report”) and (ii) an
engineering PCA report (the “PCA Report”) (together the Environmental Report and the PCA
Report are referred to as the “Reports”) by the seventh (7th) business days following the
Effective Date, then, in the event that any one or more of these items has not been delivered by
the date which is the fourth (4th ) business day prior to the expiration of the Due
Diligence Period (a “Late Report”), Purchaser shall have the right, by written notice to
Seller, given not later than the expiration of the third (3rd ) business day prior to
the expiration of the Due Diligence Period, to extend its right to terminate this Agreement (and to
receive a refund of the Deposit) for an additional fifteen (15) day period (the “Limited Due
Diligence Period”), but such extended right to terminate shall be exercisable solely by reason
of unsatisfactory matters disclosed in the Late Report during such Limited Due Diligence Period.

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     4.4 Notice of Non-Satisfaction.

          4.4.1 Within ten (10) business days of receipt of the Title Commitment and the Survey with
respect to a Property, Purchaser shall notify Sellers, by Notice, of any objections to
exceptions appearing in the Title Commitment. Within five (5) business days following
Purchaser’s Notice, Sellers shall notify Purchaser, by Notice, (i) that Sellers will, prior to the
Closing Date, eliminate the exceptions to which Purchaser objects, or (ii) that Sellers decline to
eliminate specified exceptions. If Sellers elect not to take such actions as may be required by
the Title Insurer to remove all exceptions to title to which Purchaser has objected, Purchaser may
within three (3) days terminate this Agreement in its sole discretion and receive a return of the
Earnest Money Deposit. If Sellers agree to take the actions necessary to eliminate all exceptions
to which Purchaser has objected, then such exceptions shall not be Permitted Exceptions, Sellers
shall cause such exceptions to be removed prior to or at Close of Escrow, and Seller’s failure to
do so shall be a default under this Agreement. If Purchaser fails to provide Notice of
cancellation within the Due Diligence Period as provided for herein, Purchaser shall be deemed to
have approved the state of the Properties and the condition of title, and shall be deemed to have
waived its rights to terminate this Agreement by reason of such title objections and cancel the
Escrow by reason of such title objections under this Section 4.4.

     4.5 Condition of the Property. SUBJECT TO THE EXPRESS PROVISIONS OF THIS AGREEMENT
AND EXCEPTING ALL REPRESENTATIONS AND WARRANTIES OF SELLER EXPRESSLY SET FORTH IN THIS AGREEMENT OR
ANY DOCUMENT DELIVERED AT CLOSING:

     (a) BY ENTERING INTO THIS AGREEMENT, PURCHASER HAS AGREED TO, AND WILL, PERFORM (AND
PURCHASER REPRESENTS AND WARRANTS TO SELLERS THAT PURCHASER IS CAPABLE OF PERFORMING) A
SOPHISTICATED, EXPERT, THOROUGH AND INDEPENDENT INVESTIGATION, ANALYSIS AND EVALUATION OF
THE LAND AND THE PROPERTY. PRIOR TO THE EXPIRATION OF THE DUE DILIGENCE PERIOD, PURCHASER
WILL HAVE DETERMINED, SUBJECT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT, THAT THE LAND
AND THE PROPERTY ARE ACCEPTABLE TO PURCHASER. PRIOR TO THE EXPIRATION OF THE DUE DILIGENCE
PERIOD, PURCHASER WILL HAVE CONDUCTED ITS OWN THOROUGH AND INDEPENDENT INSPECTION,
INVESTIGATION, ANALYSIS AND EVALUATION OF ALL INSTRUMENTS, RECORDS AND DOCUMENTS WHICH
PURCHASER MAY DETERMINE TO BE APPROPRIATE OR ADVISABLE TO REVIEW IN CONNECTION WITH
PURCHASER’S ACQUISITION OF THE PROPERTY AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT,
AND PURCHASER WILL EITHER HAVE DETERMINED, SUBJECT TO THE TERMS AND CONDITIONS OF THIS
AGREEMENT, THAT THE INFORMATION AND DATA CONTAINED THEREIN OR EVIDENCED THEREBY ARE
SATISFACTORY TO PURCHASER, OR TERMINATED THIS AGREEMENT PRIOR TO THE EXPIRATION OF THE DUE
DILIGENCE PERIOD.

     (b) PURCHASER ACKNOWLEDGES THAT SELLERS ARE NOT THE DEVELOPERS OR THE ORIGINAL OWNERS
OF THE REAL PROPERTY OR THE HOTELS. PURCHASER FURTHER ACKNOWLEDGES THAT, PRIOR TO THE
EXPIRATION OF THE DUE DILIGENCE PERIOD, PURCHASER WILL HAVE

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THOROUGHLY INSPECTED AND EXAMINED, AND, FAILING A TERMINATION OF THIS AGREEMENT PURSUANT TO SECTION 4.4,
UNCONDITIONALLY AND IRREVOCABLY APPROVED, ALL ELEMENTS COMPRISING THE LAND AND THE PROPERTY, AND ALL
FACTORS RELATED TO THEIR USE AND OPERATION. PURCHASER HEREBY RELEASES AND FOREVER
DISCHARGES SELLERS FROM ANY AND ALL CLAIMS, LOSSES, DAMAGES, LIABILITIES OR OBLIGATIONS
ARISING OUT OF OR IN ANY WAY RELATED TO ALL OF THE ITEMS LISTED IN THIS SECTION, WHICH
RELEASE AND DISCHARGE FROM LIABILITY SHALL SURVIVE THE CLOSE OF ESCROW.

     (c) PURCHASER ACKNOWLEDGES AND AGREES THAT PURCHASER’S FAILURE TO TERMINATE THIS
AGREEMENT AND CANCEL THE ESCROW PRIOR TO THE EXPIRATION OF THE DUE DILIGENCE PERIOD SHALL BE
CONCLUSIVELY DEEMED PURCHASER’S AFFIRMATION THAT IT HAS COMPLETED ITS INVESTIGATIONS AND DUE
DILIGENCE REVIEW OF THE LAND AND THE PROPERTY AND HAS APPROVED THE CONDITION AND STATE
THEREOF.

     (d) PURCHASER FURTHER ACKNOWLEDGES THAT PURCHASER HAS SUBSTANTIAL EXPERIENCE WITH REAL
PROPERTY, HOTELS AND HOTEL OPERATIONS, AND THAT PURCHASER WILL ACQUIRE THE PROPERTY IN
“AS IS, WHERE IS, WITH ALL FAULTS” CONDITION, AND SOLELY IN RELIANCE ON PURCHASER’S
OWN INSPECTION AND EXAMINATION AND SELLERS’ REPRESENTATIONS AND WARRANTIES CONTAINED HEREIN.
PURCHASER WAIVES ANY OBLIGATION ON THE PART OF SELLERS, OR ANY OTHER PERSON, TO DISCLOSE
ANY DEFECTS OR OTHER DEFICIENCIES OR LIABILITIES IN OR WITH RESPECT TO THE PROPERTY.

     (e) IT IS EXPRESSLY UNDERSTOOD AND AGREED THAT SELLERS MAKE NO REPRESENTATIONS,
WARRANTIES OR GUARANTIES OF ANY KIND, NATURE OR SORT, EXPRESS OR IMPLIED, WITH RESPECT TO
THE PHYSICAL CONDITION, PAST, PRESENT OR FUTURE OPERATION AND/OR PERFORMANCE, OR VALUE, OF
ANY PROPERTY. SELLERS CONVEY THE PROPERTY TO PURCHASER “AS IS AND WHERE IS, WITH ALL
FAULTS,” AND PURCHASER ACKNOWLEDGES THAT SELLERS MAKE NO REPRESENTATIONS, GUARANTIES OR
WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, AS TO THE QUALITY, CHARACTER, EXTENT,
PERFORMANCE, CONDITION OR SUITABILITY OF THE PROPERTY FOR ANY PURPOSE. PURCHASER
ACKNOWLEDGES THAT PURCHASER SHALL BE SOLELY RESPONSIBLE AND LIABLE FOR ASCERTAINING THE
TRANSFERABILITY OF ALL LICENSES, PERMITS AND OTHER GOVERNMENTAL CONSENTS FOR THE OWNERSHIP,
USE AND OPERATION OF THE PROPERTY, AND SHALL BE SOLELY RESPONSIBLE FOR OBTAINING THE
TRANSFERS THEREOF, PROVIDED SELLER SHALL USE COMMERCIALLY REASONABLE EFFORTS (BUT AT NO COST
TO SELLER) TO

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COOPERATE WITH AND ASSIST PURCHASER IN OBTAINING THE TRANSFER OF OR NEW
LICENSES, PERMITS AND CONSENTS AS NECESSARY.

     (f) PURCHASER’S INSPECTION, INVESTIGATION AND SURVEY OF THE LAND AND THE PROPERTY,
DURING THE DUE DILIGENCE PERIOD, SHALL BE IN LIEU OF ANY NOTICE OR DISCLOSURE REQUIRED BY
ANY APPLICABLE LAW, RULE OR REGULATION, INCLUDING, WITHOUT LIMITATION, LAWS REQUIRING
DISCLOSURE BY SELLER OF FLOOD, FIRE, MOLD, SEISMIC HAZARDS, LEAD PAINT, MELLO ROOS,
LANDSLIDE AND LIQUEFACTION, OTHER GEOLOGICAL HAZARDS, RAILROAD AND OTHER UTILITY ACCESS,
SOIL CONDITIONS AND OTHER CONDITIONS WHICH MAY AFFECT THE USE OF THE REAL PROPERTY, AND
PURCHASER HEREBY WAIVES ANY REQUIREMENT FOR A NOTICE PURSUANT TO THOSE PROVISIONS AND HEREBY
ACKNOWLEDGES AND AGREES THAT IT IS FAMILIAR WITH SUCH DISCLOSURE REQUIREMENTS AND WILL
CONDUCT ITS OWN DUE DILIGENCE WITH RESPECT TO ALL MATTERS COVERED THEREBY, AND HEREBY
RELEASES SELLERS FROM LIABILITY IN CONNECTION WITH ANY SUCH MATTERS THAT ARE NOT THE SUBJECT
OF ANY OF SELLERS’ REPRESENTATIONS AND WARRANTIES. PURCHASER SHALL BE DEEMED TO HAVE
APPROVED ALL CONDITIONS PERTAINING TO THE PROPERTY UNLESS IT CANCELS THE ESCROW IN
ACCORDANCE HEREWITH ON OR BEFORE THE END OF THE DUE DILIGENCE PERIOD.

     (g) PURCHASER ALSO ACKNOWLEDGES AND AGREES THAT, ALTHOUGH SELLERS HAVE PROVIDED TO
PURCHASER CERTAIN REPORTS, STUDIES AND SURVEYS FOR OR REGARDING THE REAL PROPERTY
(“REPORTS”), SELLERS HAVE NOT VERIFIED THE ACCURACY THEREOF AND MAKES NO
REPRESENTATIONS OR WARRANTIES REGARDING THE MATTERS SET FORTH THEREIN, IT BEING THE
RESPONSIBILITY OF PURCHASER TO VERIFY THE ACCURACY OF SUCH REPORTS. PURCHASER HEREBY
RELEASES AND FOREVER DISCHARGES SELLERS FROM ANY AND ALL CLAIMS, LOSSES, DAMAGES,
LIABILITIES OR OBLIGATIONS ARISING OUT OF OR IN ANY WAY RELATED TO ALL OF THE ITEMS LISTED
IN THIS PARAGRAPH, WHICH RELEASE AND DISCHARGE FROM LIABILITY SHALL SURVIVE THE CLOSE OF
ESCROW.

     (h) FURTHERMORE, PURCHASER ACKNOWLEDGES THAT SELLERS HAVE NOT AND DO NOT MAKE ANY
REPRESENTATIONS OR WARRANTIES IN CONNECTION WITH THE PRESENCE OR INTEGRATION OF HAZARDOUS
MATERIALS UPON OR WITHIN THE REAL PROPERTY. IN THAT REGARD, PURCHASER WILL, PRIOR TO THE
EXPIRATION OF THE DUE DILIGENCE PERIOD, CONDUCT ITS OWN INVESTIGATION AND OBTAIN ITS OWN
ENVIRONMENTAL ASSESSMENT REPORT TO DETERMINE IF THE REAL PROPERTY CONTAINS ANY HAZARDOUS
MATERIALS OR TOXIC WASTE, MATERIALS, DISCHARGE, DUMPING OR CONTAMINATION, WHETHER SOIL,
GROUNDWATER OR OTHERWISE, WHICH VIOLATES ANY FEDERAL, STATE,

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LOCAL OR OTHER GOVERNMENTAL LAW, REGULATION OR ORDER OR REQUIRES REPORTING TO ANY GOVERNMENTAL AUTHORITY.

     (i) PURCHASER, FOR ITSELF AND ITS OWNERS, SUCCESSORS AND ASSIGNS, HEREBY RELEASES AND
FOREVER DISCHARGES SELLERS, AND THEIR PAST, PRESENT AND FUTURE MEMBERS, AFFILIATES,
EMPLOYEES, AGENTS, ATTORNEYS, ASSIGNS, AND SUCCESSORS-IN-INTEREST FROM ALL PAST, PRESENT AND
FUTURE CLAIMS, DEMANDS, OBLIGATIONS, LOSSES AND CAUSES OF ACTION OF ANY NATURE WHATSOEVER,
WHETHER NOW KNOWN OR UNKNOWN, DIRECT OR INDIRECT, FORESEEN OR UNFORESEEN, SUSPECTED OR
UNSUSPECTED, WHICH ARE BASED UPON OR ARISE OUT OF OR IN CONNECTION WITH THE CONDITION OF THE
LAND OR THE PROPERTY, THE MATTERS ADDRESSED IN SUBSECTIONS (a), (b), (c), (d) AND (e) OF
THIS SECTION 4.5, AND WITH RESPECT TO THE PRESENCE OF ANY HAZARDOUS MATERIALS, ANY
ENVIRONMENTAL DAMAGES OR ENVIRONMENTAL REQUIREMENTS, INCLUDING, WITHOUT LIMITATIONS, THE
PHYSICAL, STRUCTURAL, GEOLOGICAL, MECHANICAL AND ENVIRONMENTAL (SURFACE AND SUBSURFACE)
CONDITION OF THE REAL PROPERTY (INCLUDING THE IMPROVEMENTS THEREON) OR ANY LAW OR REGULATION
RELATING TO HAZARDOUS MATERIALS. WITHOUT LIMITING THE FOREGOING, THIS RELEASE SPECIFICALLY
APPLIES TO ALL LOSSES AND CLAIMS ARISING UNDER THE COMPREHENSIVE ENVIRONMENTAL RESPONSE,
COMPENSATION AND LIABILITY ACT OF 1980, AS AMENDED, THE SUPERFUND AMENDMENTS AND
REAUTHORIZATION ACT OF 1986, (42 U.S.C. SECTIONS 9601 ET SEQ.), THE
RESOURCES CONSERVATION AND RECOVERY ACT OF 1976, (42 U.S.C. SECTIONS 6901 ET
SEQ.), THE CLEAN WATER ACT, (33 U.S.C. SECTIONS 466 ET SEQ.), THE
SAFE DRINKING WATER ACT, (14 U.S.C. SECTION 1401-1450), THE HAZARDOUS MATERIALS
TRANSPORTATION ACT, (49 U.S.C. SECTIONS 1801 ET SEQ.), THE TOXIC SUBSTANCE
CONTROL ACT, (15 U.S.C. SECTIONS 2601-2629), AND ANY OTHER FEDERAL, STATE OR LOCAL LAW OF
SIMILAR EFFECT, AS WELL AS ANY AND ALL COMMON LAW CLAIMS. IN ACCORDANCE WITH THE FOREGOING,
PURCHASER WAIVES ALL RIGHTS UNDER ANY STATUTES WHICH MAY HAVE PROVISIONS SIMILAR TO THE
FOLLOWING:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING
THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR.”

     BY INITIALING THIS AGREEMENT CLAUSE, PURCHASER ACKNOWLEDGES THAT THIS SECTION HAS BEEN
READ AND FULLY UNDERSTOOD, AND THAT PURCHASER HAS HAD THE CHANCE TO ASK QUESTIONS OF ITS
COUNSEL ABOUT ITS MEANING AND SIGNIFICANCE.

	 	 	 	 	 
	 

	 	 

PURCHASER’S INITIALS
	 	 

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     (j) “Environmental Damages” means all claims, judgments, damages, losses,
penalties, fines, liabilities (including strict liability), encumbrances, liens, costs, and
expenses of investigation and defense of any claim, whether or not such claim is ultimately
defeated, and of any good faith settlement of judgment, of whatever kind or nature,
contingent or otherwise matured or unmatured, foreseeable or unforeseeable, including
without limitation reasonable attorneys’ fees and disbursements and consultants’ fees, any
of which are incurred at any time as a result of the existence of Hazardous Materials upon,
about, beneath the Real Property or migrating or threatening to migrate to or from the Real
Property, or the existence of a violation of Environmental Requirements pertaining to the
Real Property, regardless of whether the existence of such Hazardous Materials or the
violation of Environmental Requirements arose prior to the present ownership or operation of
the Real Property.

     (k) “Environmental Requirements” means all applicable present and future
statutes, regulations, rules, ordinances, codes, licenses, permits, orders, approvals,
plans, authorizations, concessions, franchises, and similar items, of all governmental
agencies, departments, commissions, boards, bureaus, or instrumentalities of the United
States, states and political subdivisions thereof and all applicable judicial,
administrative, and regulatory decrees, judgments, and orders relating to the protection of
human health or the environment.

     (l) “Hazardous Materials” means mold, mildew, and any substance (i) the
presence of which requires investigation or remediation under any federal, state or local
statute, regulation, ordinance or policy; or (ii) which is defined as a “hazardous
waste” or “hazardous substance” under any federal, state or local statute,
regulation or ordinance, including without limitation the Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C. Section 9601 et seq.)
and the Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et
seq.) and amendments thereto and regulations promulgated thereunder; or (iii) which
is toxic, explosive, corrosive, infectious or otherwise hazardous or is regulated by any
federal, state or local governmental authority; or (iv) without limitation which contains
polychlorinated biphenyls (PCBs), asbestos or urea formaldehyde.

The provisions of this Section 4.6 shall survive the Close of Escrow.

V.

CLOSING

     5.1 Closing Date. The “Closing Date” for purposes of this Agreement shall be
the date which is the first business day following the later of (i) thirty (30) days after the
expiration of the Due Diligence Period, or (ii) three (3) business days following satisfaction of
the IPO Condition, or such earlier or later date as may be agreed upon, in writing, by Sellers and
Purchaser, and shall be the date on which the Close of Escrow occurs. The “Close of
Escrow”

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for purposes of this Agreement is defined as the time when the Grant Deeds are recorded
in the Official Records, by Escrow Holder. It is agreed that if termination of the Escrow is
caused by the default of one party then such party shall be responsible for all escrow and title
cancellation charges, and if the termination occurs where neither party is in default or where both parties
are in default, then each party shall be responsible for one-half (1/2) of all title and Escrow
cancellation charges.

     5.2 Action Prior to the Close of Escrow by Seller. Sellers agree that, provided
Purchaser has complied with its obligations under Section 5.3 hereof, on or before 11:00 a.m.
Washington, DC time on the business day immediately preceding the Closing Date, Sellers will
deposit with Escrow Holder such funds and other items and instruments (executed and acknowledged,
if appropriate) as may be necessary in order for Escrow Holder to comply with this Agreement,
including, without limitation, the following:

     (a) For each Property, a grant deed in the form and content attached hereto as
Exhibit “D”, prepared and executed by Seller and acknowledged before a Notary Public
in the manner provided under the laws of the applicable state, reflecting the sale and
transfer to Purchaser of the Real Property and the Improvements, (“Grant Deed”).

     (b) For each Property, two (2) duplicate originals of a Bill of Sale, in the form and
content attached hereto as Exhibit “E”, prepared and executed by Seller, assigning,
conveying and transferring to Purchaser the Personal Property and the Inventory (“Bill
of Sale”);

     (c) For each Property, two (2) duplicate originals of an Assignment of Intangible
Property, in the form and content attached hereto as Exhibit “F”, prepared and
executed by Seller, assigning and conveying to Purchaser, at no cost or expense to Sellers,
and without representation or warranty, all of Seller’s right, title and interest in the
Intangible Property (“Assignment of Intangibles”);

     (d) For each Property, two (2) duplicate originals of an Assignment and Assumption of
Contracts (which shall include an assignment of any leases if applicable), in the form and
content attached hereto as Exhibit “G”, prepared and executed by Seller, assigning
and conveying to Purchaser, at no cost or expense to Sellers, and without representation or
warranty, all of Seller’s right, title and interest under the Contracts and any applicable
leases (“Assignment of Contracts”);

     (e) For each Property, a Non-Foreign Affidavit signed by Seller in the form to be
prepared by Escrow Holder (“Non-Foreign Affidavit”);

     (f) A certificate of Seller recertifying all of Seller’s representations and warranties
as true and correct as of Close of Escrow, subject to such modifications, if any, to the
extent permitted under this Agreement;

     (g) A closing settlement statement mutually approved by Purchaser and Seller (the
“Settlement Statement”);

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     (h) Such other funds, instruments or documents as may be reasonably necessary to effect
or carry out the covenants and obligations to be performed by Sellers pursuant to this
Agreement;

     (i) Seller’s 1099-S;

     (j) Such other instruments or documents as may be reasonably required by the Title
Insurer as necessary to issue the Title Policy, but only to the extent required pursuant to
the provisions of Section 4.4;

     (k) Notices to tenants and contract parties notifying such parties of the transfer of
ownership (“Third Party Notices”);

     (l) An updated employee census;

     (m) Title to all vehicles, duly endorsed over to Purchaser; and

     (n) Evidence of termination of the Management Agreements.

     5.3 Action Prior to the Close of Escrow by Purchaser. Purchaser agrees that
Purchaser will deposit with Escrow Holder at such time as required to effect Close of Escrow on
the Closing Date, all additional funds (in Good Funds) and/or documents (executed and
acknowledged, if appropriate) which are necessary to comply with the terms of this Agreement,
including without limitation:

     (a) The funds referred to in Section 2.2.3 hereof;

     (b) For each Property, two (2) fully executed duplicate originals of the Assignment of
Contracts executed by Purchaser;

     (c) For each Property, two (2) fully executed duplicate originals of the Assignment of
Intangibles executed by Purchaser;

     (d) The Settlement Statement;

     (e) The Third Party Notices; and

     (f) Such other funds, instruments or documents as may be reasonably necessary to effect or
carry out the covenants and obligations to be performed by Purchaser pursuant to this Agreement.

     5.4 Recording of Grant Deeds. Escrow Holder will cause the Grant Deeds to be dated
and recorded in the Official Records, and all other conveyance documents deposited with Escrow
Holder dated as of the Closing Date, when (but in no event after the Closing Date) Title Insurer is
irrevocably committed to issue the Title Policies to be issued to Purchaser as contemplated in this
Agreement, and holds for the account of Sellers and Purchaser the items and funds (if any) to be
delivered to Sellers and Purchaser through the Escrow, after payment of

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costs, expenses, disbursements and prorations chargeable to Sellers or Purchaser pursuant to the provisions of this
Agreement.

     5.5 Prorations.

          5.5.1 Taxes.

               5.5.1.1 With respect to each Property, all non-delinquent real estate and personal property
general and special taxes and assessments for the Property and the Land for the current assessment
year shall be prorated as of the Closing Date. It is understood that any supplemental property tax
bill issued as a result of the sale of any Property pursuant to the provisions of this Agreement,
shall be borne by Purchaser. Notwithstanding anything to the contrary in this Agreement, Sellers
shall retain all right, title and interest in and to any and all property tax (both real property
and personal property) refunds and claims for refunds with respect to the Properties for any period
prior to the Closing Date. Both Seller and Purchaser shall have the right to pursue claims for any
such refunds, with respect to their respective periods of ownership. With respect to each
Property, Purchaser and Sellers shall be equally responsible for, and shall pay equally, all sales,
use and other transfer taxes imposed in connection with the sale and transfer of the Personal
Property, the Inventory and the Intangible Property.

               5.5.1.2 If any proceeding for certiorari or other proceeding to determine the assessed value
of any Property or the real property taxes payable with respect to any Property is continuing as of
the Close of Escrow, Seller will be entitled to control the prosecution of such proceeding or
proceedings to completion and to settle or compromise any claim therein, subject to the reasonable
approval of Purchaser. Seller agrees to cooperate with Purchaser and to execute any and all
documents reasonably requested by Purchaser in furtherance of the foregoing. Any amounts recovered
in such settlement or proceeding, net of the expenses of recovery thereof, including any fee or
commission to any real property tax consultant due in connection with the real property tax
proceeding, shall be appropriately apportioned between Seller and Purchaser. Seller shall not
initiate any real property tax appeals or other proceedings after the conclusion of the Due
Diligence Period without the prior written consent of the Purchaser, which consent shall not be
unreasonably withheld or delayed.

          5.5.2 Advance Reservations. At the Close of Escrow, each Seller shall provide
Purchaser with a schedule of post-closing confirmed Bookings for such Seller’s Hotel. Purchaser
shall honor all such confirmed and Bookings, provided that such Bookings were booked by Sellers in
a manner consistent with normal business practices.

          5.5.3 Utility Service. With respect to each Property, Sellers shall request each
utility company providing utility service to the Real Property to cause all utility billings to be
closed and billed as of the Closing Date in order that utility charges may be separately billed for
the period prior to the Closing Date and the period on and after the Closing Date. In the event
any such utility charges are not separately billed, the same shall be prorated. In connection with
any such proration, it shall be presumed that utility charges were uniformly incurred during the
billing period in which the Close of Escrow occurs.

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          5.5.4 Revenue From Operations. With respect to each Property, all revenues from Hotel
operations, including, without limitation, guest room rentals, revenue from the minibars (if any),
banquet rooms rentals, vending machines, coin telephones, and other income-producing equipment
arising through 12:01 a.m. local time on the Close of Escrow (“Cut-Off Time”) shall belong to Seller. All revenues from Hotel operations, including, without
limitation, guest room rentals, revenue from the minibars (if any), banquet rooms rentals, vending
machines, coin telephones, and other income producing equipment arising after the Cut-Off Time
shall belong to Purchaser. Revenue from guest room rentals for the evening before the date of the
Close of Escrow through to the day of the Close of Escrow shall be allocated one-half (1/2) to
Seller and one-half (1/2) to Purchaser. All prepaid rentals, room rental deposits, and all other
deposits for advance reservations and Bookings for the period after the Cut-Off Time, shall be
credited to Purchaser.

          5.5.5 Accounts Payable and Operating Expenses. With respect to each Property, all
obligations and liabilities (for services and materials ordered, or otherwise in the ordinary
course of business) and accounts payable for the Hotel and the Real Property owing as of the
Closing Date for merchandise, equipment, tour agents’ and travel agents’ commissions,
advertisements, supplies and other materials and services paid, incurred or ordered shall be
prorated between Sellers and Purchaser as of the Closing Date. Sellers shall receive a credit for
all prepaid expenses.

          5.5.6 Miscellaneous Permits and Taxes. With respect to each Property, all water and
sewer charges, taxes (other than ad valorem property taxes), including license taxes or fees for
licenses (other than the Liquor Licenses) which are assignable or transferable without added cost
and have a value which will survive Close of Escrow, including, but not limited to, any unpaid
taxes payable in arrears, shall be prorated as of the Closing Date. Sellers will be credited for
that portion of taxes and fees paid by Sellers allocable to the period after the Closing Date.

          5.5.7 Contracts/Leases. With respect to each Property, all payments and receipts, as
applicable, under the Contracts and any leases shall be prorated between Purchaser and Seller as of
the Closing Date. Sellers shall receive a credit for all prepayments and deposits under any
Contracts and Purchaser shall receive a credit for any security deposits under any leases.

          5.5.8 Other Income. With respect to each Property, all other income derived by Seller
from the Property accruing or relating to the period up to and including the Cut-Off-Time shall be
paid to Seller. All other income derived by Seller from the Property accruing or relating to the
period on and after the Cut-Off-Time shall be paid to Purchaser.

          5.5.9 Other Expenses. With respect to each Property, all other expenses and
obligations not otherwise specified in this Section 5.5 incurred in the ownership of the Property
and operation of the Hotel shall be prorated between Seller and Purchaser as of the Closing Date.

          5.5.10 Ticket and Gift Shop Inventory. With respect to each Property, Seller shall
receive a credit for all gift shop inventory, held by Seller for sale at the Hotel, in an amount
equal to Seller’s actual cost thereof.

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          5.5.11 House Banks. With respect to each Property, on the Close of Escrow, in
addition to the Purchase Price, Seller shall receive a credit through the Escrow for an amount
equal to all till money, cash-on-hand, and all sums in house banks for the Hotel, in which case all
right, title and interest to the till money, cash-on-hand and house banks shall be assigned
and conveyed by Seller to Purchaser. In the event Seller and Purchaser are unable to agree upon
the amount of the till money, cash-on-hand and house banks, the provisions of this Section 5.5.11
shall be inapplicable, and title to the till money, cash-on-hand and house banks shall remain with
Seller. The failure of Purchaser and Seller to agree on the amounts of the till money,
cash-on-hand and house banks shall not be deemed a condition precedent to the obligations of Seller
and Purchaser under this Agreement.

          5.5.12 Delayed Adjustments. If, at any time following the Closing Date, the amount of
an item listed in this Section 5.5 shall prove to be incorrect, the party in whose favor the error
was made shall pay to the other party within fifteen (15) days after request the sum necessary to
correct such error upon receipt of proof of such error, provided that such proof is delivered to
the party from whom payment is requested on or before one hundred fifty (150) days after the Close
of Escrow. The acceptance of the closing statement by either party shall not prevent later
readjustment pursuant to this Section 5.5.12. After the Close of Escrow, each party shall have
reasonable access to the books and records of the other party with respect to all matters set forth
in this Section 5.5 for the purposes of determining the accuracy of all adjustments and the
performance of the obligations of the parties under this Section 5.5.

          5.5.13 Proration Allocation. For proration purposes, the date of the Close of Escrow
shall be charged to Purchaser.

          5.5.14 Survival. The provisions of this Section 5.5 shall survive the Close of
Escrow.

     5.6 Guest Property. With respect to each Property, property of guests of the Hotel in
Seller’s care, possession or control (excluding that in guest rooms) on the Closing Date shall be
handled in the following manner:

          5.6.1 Safe Deposit Boxes. On the day prior to the Closing Date, Seller shall send
written notice to guests in the Hotel who have safe deposit boxes advising them of the sale of the
Hotel to Purchaser and the procedures to be followed pursuant to this Section 5.6.1. On the
Closing Date, Seller shall deliver to Purchaser all keys to the safe deposit boxes in the Hotel,
all receipts and agreements relating to such safe deposit boxes, and a complete list of the name
and room number of each depositor. Each box in use by a Hotel guest shall then be sealed by
representatives of Seller and Purchaser. At Purchaser’s option, guests may be requested to remove
and verify the contents of the sealed boxes prior to the Close of Escrow. All such removals and
verifications shall be under the supervision of a representative to be agreed upon between
Purchaser and Seller. Purchaser shall be responsible for all boxes once the seal is broken, and
for the contents of all boxes which are verified. Seller shall be responsible for any claims
pertaining to any property allegedly deposited in a safe deposit prior to the Closing Date, the
seal of which was not broken. Each of Seller and Purchaser shall indemnify and hold the other
harmless from and against all claims and losses arising from such indemnifying party’s obligations
under this Section 5.6.1.

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          5.6.2 Baggage Inventory. All guest baggage and other guest property checked and left
in the possession, care and control of Seller shall be listed in an inventory to be prepared
in duplicate and signed by Seller’s and Purchaser’s representatives on the Closing Date.
Purchaser shall be responsible from and after the Closing Date for all baggage (and the contents
thereof) and other guest property listed in inventory. Purchaser agrees to indemnify and save and
hold Seller harmless from and against any claim arising out of or with respect to the baggage
listed in the inventory, and Seller agrees to indemnify and save and hold Purchaser harmless from
and against any claim arising prior to the Closing Date out of or with respect to any guest baggage
or other guest property not listed in the inventory.

     5.7 Costs. Purchaser and Seller shall each pay one-half (1/2) of the premium for the
A.L.T.A coverage under the Title Policy. Purchaser shall pay the costs of all endorsements to the
Title Policy, all costs or premiums for any lender title policies, and for the Survey (or the
updating thereof). Purchaser and Seller shall each pay one-half (1/2) of the documentary transfer
taxes and the recording fee for the Grant Deed. Each of Seller and Purchaser shall pay one-half
(1/2) of all escrow fees for that portion of the Escrow pertaining to the sale of the Property.

     5.8 Real Estate Withholding. Sellers and Purchaser appoint Escrow Holder as the
withholding agent for purposes of compliance with any state statue respecting the withholding of
taxes. Prior to the Close of Escrow, Sellers will provide Escrow Holder with all information and
documentation reasonably required to determine the amount, if any, to be withheld from the proceeds
of the sale transaction contemplated herein for payment to the appropriate taxing authority.

     5.9 Distribution of Funds and Documents Following Close of Escrow. Following Close of
Escrow, Escrow Holder shall distribute the documents as follows:

          5.9.1 To Sellers. With respect to each Property:

     (a) The cash portion of the Purchase Price as set forth in Section 2.2, less costs,
offsets and prorations in accordance with the provisions of this Agreement;

     (b) A copy of the recorded Grant Deed;

     (c) One (1) fully executed duplicate original of the Bill of Sale;

     (d) One (1) fully executed duplicate original of the Assignment of Intangibles;

     (e) One (1) fully executed duplicate original of the Assignment of Contracts;

     (f) One (1) fully executed duplicate of the Settlement Statement;

     (g) One (1) fully executed duplicate of the Third Party Notices;

     (h) A copy of the Title Policy issued to Purchaser;

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     (i) One (1) duplicate original or conformed copy as appropriate, of any other document
to be received by Sellers through Escrow pursuant to the provisions of this Agreement; and

     (j) One (1) copy of any other document delivered to Escrow Holder by Purchaser or
Sellers pursuant to the terms of this Agreement.

          5.9.2 To Purchaser.

     (a) Any excess funds deposited by Purchaser which remain after disbursement to Sellers;

     (b) One (1) conformed copy of the Grant Deed, the original to be mailed to Purchaser
following the recordation thereof;

     (c) One (1) fully executed duplicate original of the Bill of Sale;

     (d) One (1) fully executed duplicate original of the Assignment of Intangibles;

     (e) One (1) fully executed duplicate original of the Assignment of Contracts;

     (f) One (1) fully executed duplicate of the Settlement Statement;

     (g) One (1) fully executed duplicate of the Third Party Notices;

     (h) One (1) duplicate original or conformed copy as appropriate, of any other document
to be received by Purchaser through Escrow pursuant to the provisions of this Agreement;

     (i) One (1) copy of any other document delivered to Escrow Holder by Purchaser or
Sellers pursuant to the terms of this Agreement; and

     (j) The original of the Title Policy.

     5.10 Possession. Purchaser shall be entitled to sole possession of each Property on
the Close of Escrow, subject to the possessory rights of any guests of the Hotel.

VI.

ADDITIONAL COVENANTS AND INDEMNITIES

     6.1 Purchaser’s Covenants.

          6.1.1 Indemnification. Purchaser covenants to defend, indemnify and hold harmless
Sellers, and their respective affiliates, owners, employees, agents and representatives, from and
against any and all claims, penalties, liabilities, fines, losses, causes of action, fees,
injuries, damages, liens, proceedings, judgments, actions, rights, demands, costs and expenses
(including, without limitation, reasonable attorneys’ fees and court and litigation costs, but
excluding consequential damages and loss of profits) (a) arising from the acts and omissions of

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Purchaser and its agents, employees and contractors occurring in connection with or as a result of,
any inspections, tests or examinations of or to the Property and the Land, (b) arising from the
use, management, operation, rental, maintenance and ownership of the Property and the Land,
based upon acts, conduct or omissions (other than by Sellers) occurring, on or after the
Closing Date, including, without limitation, with respect to and under the Contracts, (c) caused by
or arising out of any material misrepresentation by Purchaser in connection with this Agreement,
and (d) and arising from any breach of this Agreement by Purchaser or any instrument or agreement
delivered or required to be delivered pursuant to the provisions of this Agreement, including under
the WARN Act. This indemnity shall survive the Close of Escrow.

          6.1.2 Seller’s Accounts Receivable. On the Closing Date, each Seller shall deliver to
Purchaser an update of Seller’s Accounts Receivable list. Thereafter, Purchaser, upon receipt,
shall promptly remit to such Seller all sums received by Purchaser in payment of any of Seller’s
Accounts Receivables. All sums received by Purchaser from a customer, guest or patron following
Closing shall be credited, unless otherwise designated by the payor, first, to the sums owing to
Purchaser, and then, to the extent any sums remain, to Seller for any Seller’s outstanding Accounts
Receivable. For a period of one (1) year after the Close of Escrow, Sellers shall have the right,
from time to time, to inspect and audit the books and records of the Hotels that pertain to income
and collections, at Sellers’ sole cost (unless it is determined from such audit or inspection that
Purchaser has withheld any Seller’s Accounts Receivable, then Purchaser shall pay the costs of such
audit and inspection), and Purchaser shall provide full and complete access thereto to Sellers upon
not less than three (3) business days prior Notice, to verify receipt and payment of Sellers’
Accounts Receivable. All information so obtained by Sellers or their agents shall be confidential
information which shall be disclosed solely on a need-to-know basis. Nothing in the foregoing
shall obligate Purchaser to pursue the collection of any outstanding Seller Account Receivables and
Purchaser shall have no obligation to Seller to do so.

          6.1.3 Public Offering. Purchaser shall use reasonable commercial efforts to finalize
and file with the Securities and Exchange Commission the Registration Statement and to cause the
Registration Statement to become effective under the Securities Act of 1933, as amended, and the
rules and regulations thereunder, by 5:00 p.m. on February 15, 2010 and thereafter to cause the
securities being offered pursuant to the Registration Statement to be sold (the “Public
Offering”). All costs related to the Public Offering, including any audit or accounting fees
incurred by Purchaser and/or Seller in causing any audits related to the Public Offering, shall be
borne solely by Purchaser regardless of whether Closing occurs.

     6.2 Seller Covenants. Each Seller (but solely for itself and its own Property, and
not for any other Seller or any other Property) covenants to Purchaser as follows:

          6.2.1 Indemnification. Seller covenants to defend, indemnify and hold harmless
Purchaser and its affiliates, owners, employees, agents and representatives from and against any
and all claims, penalties, liabilities, fines, losses, causes of action, fees, injuries, damages,
liens, proceedings, judgments, actions, rights, demands, costs and expenses (including, without
limitation, reasonable attorneys’ fees and court and litigation costs, but excluding consequential
damages and loss of profits) (a) arising from the use, management, rental, maintenance, ownership
and operations of the Property during the period of Seller’s ownership thereof (except as to, and
specifically excluding, the matters set forth in Section 6.1.1 hereof, Environmental

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Damages, Environmental Requirements, and the matters addressed in Section 0 hereof), (b) arising under the
Contracts and the Franchise Agreement during the period of Seller’s ownership, (c) caused by or
arising out of any material misrepresentation by Sellers in connection with this
Agreement, and (d) arising from any breach of this Agreement by Seller or any instrument or
agreement required to be delivered or to be delivered pursuant to the provisions of this Agreement.
This indemnity shall survive the Close of Escrow.

          6.2.2 Assumption of Franchise Agreement. At Closing, Purchaser shall either (i)
assume the Franchise Agreements or (ii) enter into new franchise agreements with the same
Franchisors, with the original Franchise Agreements being terminated and Seller being fully
released from any liability arising under the existing Franchise Agreements from and after Closing.

          6.2.3 Terminating the Management Agreements. Seller shall terminate or cause to be
terminated the Management Agreement affecting each Hotel effective upon the Close of Escrow. Any
payments required by any management company pursuant to the Management Agreements to so terminate
the Management Agreements shall be at Purchaser’s sole cost and expense.

          6.2.4 Operation of the Hotel. Subject to the terms of this Agreement, Seller, during
the term of this Agreement, shall carry on the business and operations of the Hotel in
substantially the same manner as heretofore carried on by it. Seller shall pay and perform all of
its material obligations and otherwise comply with all of the material terms and conditions of the
covenants and other agreements of record reflected in the Permitted Exceptions, the Contracts, the
Franchise Agreement, the Existing Indebtedness (and all documents evidencing, securing or relating
to the Existing Indebtedness (including, but not limited to, causing any guarantors and indemnitors
to perform their obligations thereunder)). Prior to the Closing Date, Seller shall maintain (or
replace with policies of like amounts) all existing insurance policies insuring the Property and
the operation of the Hotel. Seller shall not remove any of the Personal Property from the Real
Property, unless such removal is in the ordinary course of Seller’s business and Seller replaces
the same with like items that are of equal or better quality and condition. Seller shall maintain
the Inventory, the Food Inventory and the Alcoholic Beverages consistent with Seller’s past
practices, and will replenish the same consistent with its past practices. Following the Effective
Date of this Agreement, Seller may, extend, amend, modify or terminate any of the existing
Contracts, including any leases of furniture, fixtures or equipment for the Hotel, and may enter
into new Contracts as Seller deems appropriate to operate, service and maintain the Property
consistent with normal business practices, and may enter into new Contracts; provided, however,
that (i) Seller shall not enter into or amend, modify or extend any Material Contracts unless (a)
Seller provides Purchaser with a copy of such new Material Contract or amendment, modification or
extension of an existing Material Contract prior to or within two (2) business days after Seller’s
execution thereof, and (b) commencing two (2) business days prior to the expiration of the Due
Diligence Period and continuing through the Close of Escrow or earlier termination of this
Agreement, so long as Purchaser is not in default of any of its obligations under this Agreement,
Seller shall have obtained the prior written consent of Purchaser, which consent shall not be
unreasonably withheld or delayed, (ii) Seller shall not enter into, or amend, modify or extend any
leases of furniture, fixtures or equipment for the Hotel, (iii) other than with respect to the sale
of Food Inventory or liquor in the ordinary course of business at the Property,

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no part of the Property, or any interest therein, will be sold or otherwise transferred or encumbered without
Purchaser’s prior written consent; and (iv) without the prior written approval of Purchaser (which
approval shall not be unreasonably withheld or delayed), Seller
shall not make any material alterations to the Property. Seller shall pay all of its debts,
liabilities and obligations as and when the same become due.

          6.2.5 Cooperation. Seller shall cooperate with Purchaser in all reasonable respects,
including by executing and delivering necessary or desirable applications and other documents, to
facilitate the issuance and/or transfer of the authorizations and other authorizations in
connection with the operation of the Hotel, including the Liquor Licenses. Purchaser shall
promptly reimburse Seller for all reasonable out-of-pocket expenses incurred by Seller in
connection with such cooperation. Except for the Liquor Licenses which are subject to the
provisions of Section 2.4 above, to the extent any license is not transferable, but is necessary
for any aspect of the operation of the Hotel, Seller shall cooperate with Purchaser by entering
into such arrangements as may be usual and customary in similar transactions, provided that any
such arrangements are in compliance with all applicable laws, rules and regulations, that Purchaser
promptly reimburses Seller for all reasonable out-of-pocket expenses incurred by Seller in
connection therewith, and that Purchaser indemnifies and holds Seller harmless from and against any
liabilities arising in connection therewith.

     6.3 Employee Matters.

          6.3.1 On the Closing Date, Seller shall pay all employee salaries, wages, fringe benefits and
other compensation, including any applicable federal, state and local taxes, for any employees of
the Hotel which have accrued up to the Cut-Off Time. Seller shall terminate all of the Hotel
employees effective at 11:00 a.m. local time on the Closing Date. Subject to the provisions of
Section 6.3.2 hereof, Seller shall indemnify, defend and hold harmless Purchaser against any and
all labor or employment claims, liabilities or obligations (including, without limitation,
attorneys’ fees and costs) which arise or accrue before, or arise out of events occurring before,
the Closing Date, which indemnity shall survive the Close of Escrow.

          6.3.2 As of the Close of Escrow, but effective at 8:00 a.m. local time on the Closing Date,
Purchaser shall hire (or cause its hotel management company to hire) not less than eighty percent
(80%) of the employees of each Hotel. Purchaser shall indemnify, defend and hold harmless Seller,
and its affiliates, owners and employees, against any and all labor or employment claims,
liabilities and obligations (including, without limitation, attorneys’ fees and costs) which arise
or accrue from or after, or arise out of events occurring from or after the Close of Escrow,
including, without limitation, all claims arising from the termination by Purchaser of any Hotel
employee or personnel performing services at or for the Hotel, and Purchaser’s decision to continue
or discontinue any employment policy or practice of Seller in existence or effect at the Hotel
prior to the Close of Escrow, which indemnity shall survive the Close of Escrow. The foregoing
indemnity shall survive the Close of Escrow.

          6.3.3 Purchaser acknowledges that Seller is not giving any notice under, or otherwise
complying with, the Worker Adjustment and Retraining Notification Act and/or any applicable state
law counterpart (together with all rules and regulations promulgated thereunder, the “WARN
Act”). Purchaser agrees to hire a sufficient number of the Hotel employees, and on

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such terms and conditions, as to avoid any violation of the WARN Act in the absence of such notice, and agrees
to indemnify and defend Seller, and to hold Seller harmless, from and against any and all loss,
damage, liability, claim, cost or expense (including, without limitation,
reasonable attorneys fees) incurred by any of such parties as a result of the failure to give
such notice or otherwise comply with the WARN Act.

     6.4 Exclusive Dealings. Purchaser and Seller agree that, in consideration of the
payment of the Earnest Money Deposit, and Purchaser’s projected efforts and undertakings, and in
preparing the necessary legal documentation to complete the purchase transaction, neither Seller,
nor any of its affiliates, agents, representatives, officers, directors, partners or shareholders,
will engage in any negotiations, or accept any offers, regarding the sale, exchange, or other
conveyance of the Property until the later of the Closing Date, or the date Purchaser and Seller
mutually agree to extend the Closing Date, or such sooner date as Purchaser terminates this
Agreement and cancels the Escrow.

     6.5 No Obligations of Escrow Holder. Escrow Holder shall not be concerned with the
provisions of this Article VI.

     6.6 Property Improvement Plans. As soon as possible following the Effective Date,
Sellers shall arrange with the Franchisor for each Hotel for the inspection and creation of a
Product Improvement Plans (each, a “PIP”) for each Hotel and shall endeavor to have each
such PIP completed as promptly as possible. Purchaser shall be responsible for paying or
reimbursing Seller for any fees or expenses charged by the Franchisor for completing such
inspections and preparing the PIPs. To the extent permitted by the Franchisor, the PIP inspections
shall be scheduled in coordination with Purchaser, and Purchaser shall have the right to attend
such inspections, provided that Purchaser shall not have the right to modify the Franchisor’s
inspection schedule or otherwise change the timing of such inspections. In that regard, Sellers
hereby agree to request that Franchisor allow Purchaser to attend any such inspections and Sellers
shall provide Purchaser notice of any such inspections promptly after receiving notice thereof from
Franchisor. Purchaser shall be responsible for completing the work required by each PIP following
Closing and for paying all costs associated with any PIP (the “PIP Costs”), provided that,
if the aggregate of such PIP Costs exceed Nine Million Dollars ($9,000,000), then Purchaser and
Seller shall bear equally the next One Million Dollars ($1,000,000) in PIP Costs. Thereafter, all
PIP Costs shall be the sole responsibility of Purchaser.

     6.7 Defeasance of Existing Indebtedness. Seller shall use commercially reasonable
efforts to cause the defeasances of any existing defeasance to occur on the initially scheduled
Closing Date; provided, however, if Seller is unable to cause the defeasance to occur on or before
the Closing Date, Seller shall have the right, by written notice to Purchaser, given not later than
the third (3rd) business day prior to the Closing Date to postpone the Closing Date for
up to ten (10) business days. Furthermore, Purchaser agrees to cooperate in all reasonable
respects with Seller in order to permit Seller to defease any existing indebtedness on a Property
so as to minimize the cost and time for effecting such defeasance, using the proceeds of the sale
of the Property to effectuate such defeasance, including by depositing such proceeds in an
appropriate escrow in advance of Closing in accordance with the usual and customary procedures for
similar defeasances, provided that Purchaser is not required to incur any additional liability or
material expense.

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     6.8 Independent Audit. From the Effective Date until two (2) years after the Closing,
Seller shall make the books and records of the Property available to Purchaser for
inspection, copying and audit by Purchaser’s designated accountants, and at Purchaser’s
expense. Seller shall provide Purchaser, but without third-party expense to Seller, with copies
of, or access to, such factual information as may be reasonably requested by Purchaser, and in the
possession or control of Seller, to enable Purchaser or any of its constituent members to file a
registration statement and otherwise comply with applicable filing requirements of the SEC.
Without limiting the foregoing, (x) Purchaser or its designated independent or other accountants
may audit the operating statements of the Property, and Seller shall supply such documentation in
its possession or control as Purchaser or its accountants may reasonably request in order to
complete such audit, and (y) Seller shall furnish Purchaser with such financial and other
information within Seller’s possession or control as may be reasonably required by Purchaser to
make any required filings with the SEC or other governmental authority. This Section 6.8 shall
survive the Closing.

     6.9 Bulk Transfers. Seller and Purchaser specifically waive compliance with the
applicable provisions of the Uniform Commercial Code — Bulk Transfers and with any similar
provision under the laws of the state, county and city in which any Property is located. Seller
shall indemnify Purchaser for any claims made by creditors under the applicable bulk sales laws
relating solely to any pre-Closing payment obligations to such creditors and only in the amount of
the payments due to or claimed to be due to such creditors.

VII.

REPRESENTATIONS AND WARRANTIES

     7.1 Purchaser’s Representations and Warranties. Purchaser represents and warrants to
Seller that as of the date hereof and the Close of Escrow:

          7.1.1 Organization and Standing. Purchaser is a real estate investment trust, duly
organized, validly existing, and in good standing under the laws of the State of Maryland and has
the full power and authority to enter into this Agreement and to carry out the transactions
contemplated hereby to be carried out by it.

          7.1.2 Due Authorization. The performance of this Agreement and the transactions
contemplated hereunder by Purchaser have been duly authorized by all necessary action on the part
of Purchaser, and this Agreement is binding on and enforceable against Purchaser in accordance with
its terms. Purchaser shall, on or prior to the Closing Date, furnish Seller with certified
resolutions evidencing that Purchaser has been duly authorized to enter into and perform this
Agreement and the transactions contemplated hereunder. No further consent of any shareholder,
creditor, board of directors, governmental authority or other party to such execution, delivery and
performance hereunder is required. The person(s) signing this Agreement, and any document pursuant
hereto on behalf of Purchaser, has full power and authority to bind Purchaser.

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          7.1.3 Lack of Conflict. Neither the execution of this Agreement nor the consummation
of the transactions contemplated hereby will violate any restriction, court order, judgment, law,
regulation, charter, bylaw, instrument or agreement to which Purchaser is subject.

          7.1.4 Solvency/Bankruptcy. Purchaser has not (i) made any general assignment for the
benefit of creditors, (ii) filed any voluntary petition in bankruptcy or suffered the filing of an
involuntary petition in bankruptcy by Purchaser’s creditors, (iii) suffered the appointment of a
receiver to take possession of all, or substantially all, of Purchaser’s assets, (iv) suffered the
attachment or other judicial seizure of all, or substantially all, of Purchaser’s assets, (v)
admitted in writing its inability to pay its debts as they come due, or (vi) made any offer of
settlement, extension or compromise to its creditors generally, and has not considered doing or
undertaking, and has no current plans to do or undertake, any of the foregoing. Furthermore,
Purchaser has not taken, and does not contemplate taking, against it any such actions.

     7.2 Sellers’ Representations and Warranties. Each Seller represents and warrants (but
solely for itself and its own Property, and not for any other Seller or any other Property) to
Purchaser that as of the date hereof and, subject to the provisions of the paragraph following
Section 7.2.16 hereof, Close of Escrow:

          7.2.1 Organization and Standing. Each Seller is a limited liability company or
limited partnership, as reflected on “Exhibit “A” to this Agreement, duly organized under
the laws of the State of Delaware, is validly existing, and in good standing under the laws of the
State of Delaware, and has the full power and authority to enter into this Agreement and to carry
out the transactions contemplated hereby to be carried out by it.

          7.2.2 Due Authorization. The performance of this Agreement and the transactions
contemplated hereunder by Seller have been duly authorized by all necessary action on the part of
Seller, and this Agreement is binding on and enforceable against Seller in accordance with its
terms. Seller shall, on or prior to the Closing Date, furnish Purchaser with certified resolutions
evidencing that Seller has been duly authorized to enter into and perform this Agreement and the
transactions contemplated hereunder. No further consent of any member, manager, creditor,
governmental authority or other party to such execution, delivery and performance hereunder is
required. The person(s) signing this Agreement, and any document pursuant hereto on behalf of
Seller, has full power and authority to bind Seller.

          7.2.3 Lack of Conflict. Neither the execution of this Agreement nor the consummation
of the transactions contemplated herein will violate any restriction, court order, judgment, law,
regulation, charter, bylaw, instrument, or agreement to which Seller or the Property (or any
portion thereof) are subject.

          7.2.4 Non-Foreign Seller. Seller is not a foreign seller as defined in the “Foreign
Investment in Real Property Tax Act.”

          7.2.5 Solvency/Bankruptcy. Seller has not (i) made any general assignment for the
benefit of creditors, (ii) filed any voluntary petition in bankruptcy or suffered the filing of an
involuntary petition in bankruptcy by Seller’s creditors, (iii) suffered the appointment of a
receiver to take possession of all, or substantially all of Seller’s assets, (iv) suffered the

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attachment or other judicial seizure of all or substantially all, of Seller’s assets, (v) admitted
in writing its inability to pay its debts as they come due, or (vi) made an offer of settlement,
extension or composition to its creditors generally, and has not considered doing or undertaking,
and has no current plans to do or undertake any of the foregoing. Furthermore, Seller has not
and does not contemplate taking or having taken against it, any such actions.

          7.2.6 Litigation. As of the date hereof, except as set forth on Exhibit “H” hereto,
Seller has not been served with any pending actions, suits, arbitrations, governmental
investigations or other proceedings, and to its best knowledge, none of the foregoing are pending
or threatened against Seller or affecting the Property before any court or governmental authority.

          7.2.7 Condemnation. As of the date hereof, Seller has not been served with notice of
any pending or threatened condemnation actions or special assessments of any nature with respect to
the Property or any part thereof, and has no knowledge of any of the foregoing being contemplated.

          7.2.8 Contracts. All Material Contracts to which Seller is currently a party (except
for Bookings, gift certificates and similar promotional arrangements), and all amendments thereto,
are listed on Exhibit “C” attached hereto. Seller has or will make available to Purchaser
true copies of all such Contracts. All such Contracts are in full force and effect, and to the
best of Seller’s knowledge, there are no material defaults or events that with notice or the
passage of time or both, would constitute a material default by Seller under any such Contracts,
nor by any other party thereto.

          7.2.9 Licenses and Permits. All authorizations have been obtained and are in full
force and effect. Seller has made or will make available to Purchaser true copies of each such
authorization. Seller has not received a written notice from any applicable governmental authority
(A) of any violation, default, intended or threatened non-renewal, suspension or revocation of any
of the authorizations, the loss of which would have a material adverse effect on the present use
and occupancy of the Real Property or (B) that it lacks any permits or licenses necessary for the
present use and occupancy of the Real Property.

          7.2.10 Real Property Tax Assessments. Seller has received no written notice from any
tax assessor of any proposed increase in real estate taxes with respect to the Hotel, other than
normal fiscal year increases.

          7.2.11 Employee Agreements. There are no agreements to which Seller is a party
relating to any labor or collective bargaining agreement affecting the Hotel. Seller has not
received any written notice from any labor union or group of employees that such union or group
represents or believes or claims it represents or intends to represent any of the employees of
Seller nor has it received any notice of any claim of unfair labor practices. Seller has and shall
maintain through the Closing Date a level of employment at the Hotel that is sufficient for the
normal business operations of the Hotel at standards required by the Franchise Agreement.

          7.2.12 Insurance. Seller has and shall maintain through the Closing Date insurance
policies equivalent in all material respects to those currently maintained by Seller, which
policies are consistent with the requirements of the lender under the existing financing and

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under the Franchise Agreement. Seller has not received any notice of cancellation or threatened
cancellation of any insurance policy applicable to any Property.

          7.2.13 Ownership of Personal Property. Except as may otherwise be provided in any
Contracts, Seller is the sole owner of all Personal Property and, at Closing, none of the Personal
Property shall be encumbered by any lien or claim of any other person or entity, except for the
Existing Indebtedness.

          7.2.14 Food and Beverage Inventory. Except as may otherwise be provided in any
Contracts, all Food and Beverage Inventory is free and clear of any lien or claim, except for the
Existing Indebtedness.

          7.2.15 Violations. Seller has received no written notice of any violation of any
laws, including environmental laws with respect to any Property that has not been cured as required
by law.

          7.2.16 No Offers. Seller has not granted any right to purchase, option or other right
with respect to any Property.

Wherever the phrase “to Seller’s knowledge” or any similar phrase stating or implying a limitation
on the basis of knowledge appears in this Agreement, unless specifically otherwise qualified, such
phrase shall mean only the present actual knowledge of Thomas J. Baltimore, Jr. and of Howard
Isaacson, Senior Vice President, Asset Management, without any duty of inquiry, any imputation of
the knowledge of another to him, or independent investigation of the relevant matter by any of such
individual(s), and without any personal liability. Wherever the phrase “in Seller’s possession”,
“in the possession of Seller” or similar phrase appears in this Agreement, such phrase shall be
deemed to mean only to the extent the material or other item referred to by such phrase is located
at the Hotel or in Seller’s offices in Bethesda, Maryland. Notwithstanding any provision of this
Agreement to the contrary, should any of the foregoing representations and warranties of Seller
become false or inaccurate prior to the Close of Escrow (provided, however, that Seller shall have
the right to update such representations and warranties as a consequence of operating the
Properties in accordance with the provisions of this Agreement) and provided Seller discloses the
same to Purchaser, in writing, prior to the Close of Escrow, and provided any such representation
or warranty was not knowingly false when made or made to be false or inaccurate through acts or
omissions of Seller prior to Closing, then Purchaser’s sole recourse shall be to either (i)
terminate this Agreement and cancel the Escrow, in which case the Earnest Money Deposit shall be
returned to Purchaser and neither Seller nor Purchaser will have any further liability or
obligation under this Agreement (except for those obligations which survive in accordance with
their terms), or (ii) proceed with the closing, without reservation, in which case Purchaser shall
be deemed to have waived all claims against Sellers with respect to such false or inaccurate
representation and warranty. If any such representation or warranty was knowingly false when made
or made to be false or inaccurate through intentional acts or omissions of Seller prior to Closing,
then Purchaser shall be entitled to all damages (and subject to all limitations) available to
Purchaser as provided in this Agreement for a default of Seller hereunder.

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VIII.

CONDITIONS PRECEDENT TO CLOSE OF ESCROW

     8.1 Conditions to Seller’s Obligations. The obligation of Sellers to close the Escrow
shall be subject to the satisfaction or Notice of its waiver (delivered to Purchaser and Escrow
Holder), in whole or in part, by Sellers of each of the following conditions precedent:

          (a) Except by reason of a default by Sellers, Escrow Holder is in a position to and will
deliver to Sellers the instruments and funds accruing to Sellers pursuant to the provisions of this
Agreement;

          (b) There is no existing uncured material breach of any of the covenants, representations,
warranties or obligations of Purchaser set forth in this Agreement that has not been waived by
Seller;

          (c) The IPO Condition has been satisfied; and

          (d) With respect to each Property, Seller has been released from all obligations under the
Franchise Agreement by the franchisor thereunder, provided, Seller covenants to take all steps
reasonably required by the franchisor for such release and, to the extent this condition fails due
to Seller’s failure to execute and deliver franchisors’ customary termination agreements (which may
include, but not be limited to, a general release of the applicable franchisor by the applicable
Seller) and perform customary obligations thereunder (which may include, but not be limited, paying
any fees accrued under the franchise agreements through the date of closing), Seller shall be
deemed to be in default under this Agreement, unless Seller otherwise waives this condition.

The foregoing conditions contained in this Section 8.1 are intended solely for the benefit of
Sellers. Sellers shall at all times have the right to waive any condition precedent, provided that
such waiver is in writing and delivered to Purchaser and Escrow Holder. In the event that the IPO
Condition has not been fully satisfied and Close of Escrow has not occurred by March 31, 2010,
Seller shall have the right, in its sole discretion, to terminate this Agreement by written notice
to Purchaser at any time. If Sellers elect to terminate this Agreement as a result of Purchaser’s
failure to satisfy the IPO Condition, Purchaser shall reimburse Sellers for all reasonable
out-of-pocket costs and expenses, including reasonable legal fees, incurred by Sellers in
connection with the negotiation of, and the performance of Sellers’ obligations under, this
Agreement in an aggregate amount not to exceed Seventy Five Thousand Dollars ($75,000) and, in the
event of any such termination, the Earnest Money Deposit shall be delivered to Purchaser.
Notwithstanding any provision herein to the contrary, in the event that Close of Escrow has not
occurred by June 30, 2010, then either party, other than a party in default of its obligations
hereunder, may elect to terminate this Agreement by giving notice thereof to the other, whereupon
Purchaser shall reimburse Sellers for all reasonable out-of-pocket costs and expenses, including
reasonable legal fees, incurred by Sellers in connection with the negotiation of, and the
performance of Sellers’ obligations under, this Agreement in an aggregate amount not to exceed
Seventy Five Thousand Dollars ($75,000) and the Earnest Money Deposit shall be delivered to
Purchaser.

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     8.2 Conditions to Purchaser’s Obligations. The obligations of Purchaser to close the
Escrow shall be subject to the satisfaction or Notice of its waiver (delivered to Sellers and
Escrow Holder), in whole or in part, by Purchaser of each of the following condition precedent:

     (a) Except by reason of a default by Purchaser, Escrow Holder is in a position to and
will deliver to Purchaser the instruments and funds, if any, accruing to Purchaser pursuant
to the provisions of this Agreement;

     (b) If Purchaser is entering into new franchise agreements, the Franchise Agreements
have been terminated, effective as of the Closing Date, at no cost or expense to Purchaser;

     (c) There is no existing uncured material breach of any of the covenants,
representations, warranties or obligations of Sellers set forth in this Agreement that has
not been waived by Purchaser; and.

     (d) Purchaser shall have received proceeds of not less than $100,000,000 from the
closing of the public offering of securities contemplated by the draft registration
statement (the “Registration Statement”) on Form S-11 provided by Purchaser to
Seller prior to the date hereof (the “IPO Condition”).

The foregoing conditions contained in this Section 8.2 are intended solely for the benefit of
Purchaser. Purchaser shall at all times have the right to waive any condition precedent, provided
that such waiver is in writing and delivered to Seller and Purchaser.

     8.3 Failure of Conditions to Close of Escrow. Escrow Holder shall be responsible for
confirming, on or before the Close of Escrow, that the conditions to the Close of Escrow set forth
in Sections 8.1 and 8.2 hereof, and as set forth elsewhere in this Agreement, have been satisfied.
Purchaser and Sellers hereby agree to deliver their Notices to Escrow Holder, on or before the
Close of Escrow, of the satisfaction or waiver of all other conditions to the Close of Escrow
hereunder, and, in the event that both Purchaser and Sellers specifically notify and instruct
Escrow Holder, in writing, to proceed to the Close of Escrow hereunder, all such other conditions
to the Close of Escrow hereunder that are not otherwise satisfied shall be deemed to have been
waived by both Purchaser and Sellers Escrow Holder shall not proceed to the Close of Escrow
hereunder unless both Purchaser and Sellers specifically notify and instruct Escrow Holder to do
so.

IX.

LIQUIDATED DAMAGES

     9.1 Default by Purchaser. IN THE EVENT THE CLOSING AND THE CONSUMMATION OF THE
TRANSACTION HEREIN CONTEMPLATED DOES NOT OCCUR AS HEREIN PROVIDED BY REASON OF ANY MATERIAL DEFAULT
OF PURCHASER, PURCHASER AND SELLERS AGREE THAT IT WOULD BE IMPRACTICAL AND EXTREMELY DIFFICULT TO
ESTIMATE THE DAMAGES WHICH SELLER MAY SUFFER. THEREFORE, PURCHASER AND SELLERS DO HEREBY AGREE
THAT IN THE EVENT OF SUCH DEFAULT, IN ADDITION TO ATTORNEYS’

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FEES AND COSTS PURSUANT TO SECTION 12.2 HEREOF, SELLERS MAY, AS ITS SOLE RECOURSE AND REMEDY
(AT LAW OR IN EQUITY), RETAIN THE EARNEST MONEY DEPOSIT, WHICH PURCHASER AND SELLERS AGREE IS A
REASONABLE ESTIMATE OF THE TOTAL DAMAGES THAT SELLERS WOULD SUFFER IN THE EVENT THAT PURCHASER
DEFAULTS AND FAILS TO COMPLETE THE PURCHASE OF THE PROPERTY SAID AMOUNT SHALL BE THE FULL, AGREED
AND LIQUIDATED DAMAGES FOR THE DEFAULT OF PURCHASER UNDER THIS AGREEMENT. ALL OTHER CLAIMS TO
DAMAGES OR OTHER REMEDIES IN CONNECTION WITH ANY DEFAULT BY PURCHASER UNDER THIS AGREEMENT ARE
EXPRESSLY WAIVED BY SELLERS (PROVIDED THIS LIMITATION SHALL NOT APPLY TO ANY INDEMNITY OF PURCHASER
THAT EXPRESSLY SURVIVES THIS AGREEMENT). THE PAYMENT OF SUCH AMOUNT AS LIQUIDATED DAMAGES IS NOT
INTENDED AS A FORFEITURE OR PENALTY, BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER.
UPON DEFAULT BY PURCHASER, IF THIS AGREEMENT IS TERMINATED BY SELLERS, NEITHER PARTY SHALL HAVE ANY
FURTHER RIGHTS OR OBLIGATIONS HEREUNDER, EACH TO THE OTHER, EXCEPT ANY INDEMNIFICATION OBLIGATIONS,
THE RIGHTS OF SELLER RESERVED HEREIN, AND FOR THE RIGHT OF SELLERS TO COLLECT SUCH LIQUIDATED
DAMAGES FROM PURCHASER AND ESCROW HOLDER. IN THE EVENT PURCHASER WRONGFULLY FAILS TO AUTHORIZE
ESCROW HOLDER TO RELEASE THE EARNEST MONEY DEPOSIT WITHIN FIVE (5) BUSINESS DAYS OF THE DEMAND OF
SELLERS WHEN PURCHASER HAS DEFAULTED AND SELLERS ARE ENTITLED TO LIQUIDATED DAMAGES HEREUNDER, THE
PROVISIONS OF THIS ARTICLE IX SHALL BE VOIDABLE AT THE ELECTION OF SELLERS.

	 	 	 	 	 	 	 
	 

	 	 

SELLERS’ INITIALS
	 	 

PURCHASER’S INITIALS
	 	 

     9.2 Default by Sellers. IN THE EVENT THE CLOSING AND THE CONSUMMATION OF THE
TRANSACTION HEREIN CONTEMPLATED DOES NOT OCCUR AS HEREIN PROVIDED BY REASON OF ANY DEFAULT OF
SELLERS, PURCHASER AND SELLERS AGREE THAT IT WOULD BE IMPRACTICAL AND EXTREMELY DIFFICULT TO
ESTIMATE THE DAMAGES WHICH PURCHASER MAY SUFFER. THEREFORE, PURCHASER AND SELLERS DO HEREBY AGREE
THAT, IN THE EVENT OF SUCH DEFAULT, IN ADDITION TO ATTORNEYS’ FEES AND COSTS PURSUANT TO SECTION
12.2 HEREOF, PURCHASER MAY, AS ITS SOLE RECOURSE AND REMEDY (AT LAW OR IN EQUITY), EITHER: (a)
PURSUE AN ACTION AGAINST SELLER FOR SPECIFIC PERFORMANCE; OR (b) RECEIVE (i) THE RETURN OF THE
EARNEST MONEY DEPOSIT AND (ii) REIMBURSEMENT OF OUT OF POCKET EXPENSES ACCORDING TO PROOF NOT TO
EXCEED AN AGGREGATE OF TWO HUNDRED THOUSAND DOLLARS ($200,000). ALL OTHER CLAIMS TO DAMAGES OR
OTHER REMEDIES IN CONNECTION WITH SELLERS’ FAILURE TO CLOSE AND CONSUMMATE THE TRANSACTIONS
CONTEMPLATED HEREIN (OTHER THAN AS SPECIFIED IN (a) AND (b) HEREOF) ARE EXPRESSLY WAIVED BY
PURCHASER. THE REFUND OF THE EARNEST MONEY DEPOSIT AS LIQUIDATED DAMAGES IS NOT INTENDED AS A
FORFEITURE OR PENALTY, BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO PURCHASER. UPON DEFAULT
BY SELLERS, IF THIS AGREEMENT IS TERMINATED BY PURCHASER, NEITHER PARTY SHALL HAVE

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ANY FURTHER RIGHTS OR OBLIGATIONS HEREUNDER, EACH TO THE OTHER, EXCEPT ANY INDEMNIFICATION
OBLIGATIONS, THE RIGHTS OF PURCHASER RESERVED HEREIN, AND FOR THE RIGHT OF PURCHASER TO COLLECT
SUCH LIQUIDATED DAMAGES FROM SELLERS.

	 	 	 	 	 	 	 
	 

	 	 

	 	 

	 	 
	 

	 	SELLERS’ INITIALS
	 	PURCHASER’S INITIALS	 	 

X.

BROKERS

     Sellers and Purchaser each agree to indemnify, protect, defend and hold the other harmless
from and against any claims, actions, suits or demands for payment of any commission, finder’s fee
or other sum initiated by any other broker, commission agent or other person which such party or
its representatives has engaged or retained or with which it has had discussions concerning, in
connection with the transaction contemplated by this Agreement or the sale of the Property by
Sellers.

XI.

NOTICES

     Except as otherwise expressly provided in this Agreement, all notices, requests, demands and
other communications hereunder (“Notice”) shall be in writing and shall be deemed delivered
by (i) hand delivery upon receipt, (ii) registered mail or certified mail, return receipt
requested, postage prepaid, upon delivery to the address indicated in the Notice, (iii) by
confirmed telecopy or facsimile transmission when sent, and (iv) overnight courier (next business
day delivery) on the next business day at 12:00 noon, whichever shall occur first, as follows:

	 	 	 	 
	 	To Sellers:

	 	c/o RLJ DEVELOPMENT, LLC
	 	 

	 	Attention: Thomas J. Baltimore, Jr.
	 	 

	 	3 Bethesda Metro Center, Suite 1000
	 	 

	 	Bethesda, Maryland 20814
	 	 

	 	Telecopier: (301) 280-7782
	 
	 	 
	 	With a copy to:

	 	Gerard Leval, Esq.
	 	 

	 	Arent Fox, LLP
	 	 

	 	1050 Connecticut Avenue, N.W.
	 	 

	 	Washington D.C. 20036-5339
	 	 

	 	Telecopier: (202) 857-6395
	 
	 	 
	 	To Purchasers:

	 	CHATHAM LODGING TRUST.
	 	 

	 	50 Cocoanut Row, Suite 211
	 	 

	 	Palm Beach, FL 33480
	 	 

	 	Attention: Jeffrey H. Fisher
	 	 

	 	Telecopier: (561) 659-7318

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	 	With a copy to:

	 	HUNTON & WILLIAMS LLP
	 	 

	 	1900 K Street, NW
	 	 

	 	Washington, DC 20006
	 	 

	 	Attention: John M. Ratino, Esq.
	 	 

	 	Telecopier: 202-778-2201

Any correctly addressed Notice that is refused, unclaimed or undelivered because of an act or
omission of the party to be notified shall be considered to be effective as of the first day that
the Notice was refused, unclaimed or considered undeliverable by the postal authorities, messenger
or overnight delivery service. The parties hereto shall have the right from time to time, and at
any time, to change their respective addresses and each shall have the right to specify as its
address any other address within the United States of America, by giving to the other party at
least thirty (30) days prior Notice thereof, in the manner prescribed herein; provided, however,
that to be effective, any such change of address must be actually received (as evidenced by a
return receipt). Telephone numbers and email addresses, if listed, are listed for convenience
purposes only and not for the purposes of giving Notice pursuant to this Agreement.

XII.

MISCELLANEOUS

     12.1 Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Maryland. If any legal action is necessary to enforce the terms and
conditions of this Agreement, the parties hereby agree that the courts located in Montgomery
County, Maryland shall be the sole jurisdiction and venue for the bringing of the action.

     12.2 Professional Fees and Costs. If a lawsuit, arbitration or other proceedings are
instituted by any party to enforce any of the terms or conditions of this Agreement against any
other party hereto, the prevailing party in such litigation, arbitration or proceedings shall be
entitled, as an additional item of damages, to such reasonable attorneys’ and other professional
fees and costs (including, but not limited to, witness fees), court costs, arbitrators’ fees,
arbitration administrative fees, travel expenses, and other out-of pocket expenses or costs of such
other proceedings, as may be fixed by any court of competent jurisdiction, arbitrator or other
judicial or quasi-judicial body having jurisdiction thereof, whether or not such litigation or
proceedings proceed to a final judgment or award. For the purposes of this section, any party
receiving an arbitration award or a judgment for damages or other amounts shall be deemed to be the
prevailing party, regardless of amount of the damage awarded or whether the award or judgment was
based on all or some of such party’s claims or causes of action, and any party against whom a
lawsuit, arbitration or other proceeding is instituted and later voluntarily dismissed by the
instituting party shall be deemed to be the prevailing party.

     12.3 Exhibits and Schedules a Part of This Agreement. The Exhibits and Schedules
attached hereto are incorporated in this Agreement by reference and are hereby made a part hereof.

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     12.4 Executed Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages are physically
attached to the same document. This Agreement shall become effective upon the due execution and
delivery of this Agreement to the parties hereto.

     12.5 Assignment. Purchaser may not assign, convey and otherwise transfer all or any
part of its interest or rights herein without the prior written consent of Sellers, which consent
may be withheld in Sellers’ sole discretion. Notwithstanding the foregoing, however, Purchaser
may, not later than five (5) business days prior to the Closing Date, assign and transfer all of
its rights and obligations under this Agreement to one (1) or more wholly owned subsidiary(ies)
thereof, or to an Affiliate(s) thereof, or to any entity controlled (directly or indirectly,
through voting or equity ownership) by Purchaser or any Affiliate thereof; provided, however, that
Purchaser shall not be released of its obligations under this Agreement as a result of any such
assignment. Any assignment as permitted in the preceding sentence shall be conditioned upon
Purchaser delivering to Sellers and Escrow Holder, not later than five (5) days prior to the
Closing Date Notice thereof, together with a copy of such assignee’s organizational and formation
documents and instruments, a Certificate of Good Standing for such assignee, and copies of the
resolutions of Purchaser and such assignee authorizing such assignment. As a further condition to
any such permitted assignment, Purchaser shall cause its assignee to execute an assignment and
assumption agreement of Purchaser’s obligations under this Agreement (in form and content
reasonably and mutually acceptable), and such other documents and instruments as Escrow Holder may
reasonably request. “Affiliate” shall mean an entity that is majority-owned and controlled by
Purchaser or the members or partners of Purchaser or in which Purchaser is the general partner or
managing member.

     12.6 IRS — Form 1099-S. For purposes of complying with Section 6045 of the
Internal Revenue Code of 1986, as amended, Escrow Holder shall be deemed the “person
responsible for closing the transaction” and shall be responsible for obtaining the information
necessary to file with the Internal Revenue Service Form 1099-S, “Statement for Recipients of
Proceeds from Real Estate, Broker and Barter Exchange Transactions.”

     12.7 Successors and Assigns. Subject to the provisions of Section 12.5 hereof, this
Agreement shall be binding upon and inure to the benefit of the parties’ respective successors and
permitted assigns.

     12.8 Time is of the Essence. Time is of the essence of this Agreement.

     12.9 Entire Agreement. This Agreement, and Exhibits and Schedules and other documents
and instruments attached to or referenced herein, contain all representations and the entire
understanding and agreement between the parties hereto with respect to the purchase and sale of the
Property, and all prior and contemporaneous understandings, letters of intent, agreements and
representations, whether oral or written, are entirely superseded. In executing this Agreement,
Sellers and Purchaser each expressly disclaim any reliance on any oral or written representations,
warranties, comments, statements or assurances made by Sellers,

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Purchaser, and any of their respective affiliates, and their respective agents, employees,
representatives, attorneys or brokers, as an inducement or otherwise, to Purchaser’s and Sellers’
respective execution hereof. No amendment of this Agreement shall be binding unless in writing and
executed by the parties hereto.

     12.10 Further Assurances. Whenever and so often as requested by a party, the other
party will promptly execute and deliver or cause to be executed and delivered all such other and
further instruments, documents or assurances, and promptly do or cause to be done all such other
and further things as may be necessary and reasonably required in order to further and more fully
vest in such requesting party all rights, interests, powers, benefits, privileges and advantages
conferred or intended to be conferred upon it by this Agreement, or to effectuate the termination
of this Agreement and cancellation of the Escrow (if otherwise permitted hereunder). The terms of
this section shall survive the Close of Escrow and/or termination of this Agreement.

     12.11 Waiver. Failure or delay by either party to insist on the strict performance of
any covenant, term, provision or condition hereunder, or to exercise any option herein contained,
or to pursue any claim or right arising herefrom, shall not constitute or be construed as a waiver
of such covenant, term, provision, condition, option, claim or right. Any waiver by either party
shall be effective only if in a writing delivered to the other party hereto and setting forth, with
specificity, the covenant, term, provision or condition so waived. Any such waiver shall not
constitute or be construed as a continuing waiver of any subsequent default.

     12.12 Headings. The headings of this Agreement are for purposes of convenience only
and shall not limit or define the meaning of the provisions of this Agreement.

     12.13 Risk of Loss. With respect to each Property, the risk of loss shall be as
follows:

          12.13.1 Risk of Loss. Until the Closing Date, Seller shall bear the risk of loss
should there be damage to any of the Improvements by fire or other casualty (collectively
“Casualty”). If, prior to the Closing Date, any of the Improvements shall be damaged by
any Casualty, Seller shall promptly deliver to Purchaser a Notice (“Casualty Notice”) of
such event. Upon Purchaser’s receipt of a Casualty Notice, Seller and Purchaser shall meet
promptly to estimate the cost to repair and restore the Improvements to good condition and to
replace the damaged Personal Property (“Casualty Renovation Cost”). If the parties are
unable to agree on the cost of restoration, the matter will be submitted to an engineer designated
by Seller and an engineer designated by Purchaser, each licensed to practice in the state in which
the Land is located, and the engineers shall resolve the dispute. Each party hereto shall bear the
costs and expenses of its own engineer.

          12.13.2 Material Loss. If the Casualty Renovation Cost exceeds in the aggregate (i)
One Million Five Hundred Thousand Dollars ($1,500,000.00) in the event the Casualty is insured
against, or (ii) Seven Hundred Fifty Thousand Dollars ($750,000.00) in the event the Casualty is
not insured against, either party hereto may, at its option, elect to terminate this Agreement by
Notice to the other party within five (5) days after the date that the Casualty Renovation Cost is
determined, in which case the Earnest Money Deposit shall be delivered to Purchaser, and neither
party shall have any further rights or obligations hereunder, except for any continuing
confidentially and indemnity obligations as provided in this Agreement. If both

39

 

parties hereto fail to timely make its election to terminate this Agreement, then the Close of
Escrow shall take place as provided herein without reduction of the Purchase Price, and Seller
shall assign the insurance proceeds to Purchaser in the event the Casualty is insured against and
shall pay to Purchaser the amount of any deductible, under applicable insurance policies, or have
the Purchase Price reduced by the Casualty Renovation Cost in the event the Casualty is not insured
against.

          12.13.3 Nonmaterial Loss. If the Casualty Renovation Cost is in the aggregate (i) One
Million Five Hundred Thousand Dollars ($1,500,000.00) or less in the event the Casualty is insured
against, or (ii) Seven Hundred Fifty Thousand Dollars ($750,000.00) or less in the event the
Casualty is not insured against, then, in any such event, neither party hereto shall have any right
to terminate this Agreement, but the Closing shall take place as provided herein without reduction
of the Purchase Price, and Seller shall assign the insurance proceeds to Purchaser and shall pay to
Purchaser the amount of any deductible in the event the Casualty is insured against or have the
Purchase Price reduced by the Casualty Renovation Cost in the event the Casualty is not insured
against.

          12.13.4 Eminent Domain. If, prior to the Close of Escrow, (i) all or substantially
all (or so much thereof so as to substantially and materially interfere with the operation of the
Hotel) of the Real Property, (ii) any portion of the parking areas on the Real Property which
results in there being insufficient parking for the operation of the Hotel as established by
applicable governmental codes and regulations, or (iii) any access-way to the Real Property or to
any part of any building with guest rooms is taken by condemnation or eminent domain, at the
election of Purchaser this Agreement shall, upon the giving of Notice of such event or of the
condemning authorities’ intention so to take the Real Property, terminate, and Purchaser shall
receive a full and prompt refund of all sums deposited by them with Escrow Holder and/or Seller.
If, prior to the Close of Escrow, less than all or substantially all of the Real Property shall be
taken by condemnation or eminent domain, then, if any of the foregoing, in Purchaser’s reasonable
opinion, materially impairs the value of the Real Property or any significant interest therein,
then Purchaser shall have the option to (A) accept title to the Real Property subject to such
taking, in which event at the Close of Escrow all of the proceeds of any award or payment made or
to be made by reason of such taking shall be assigned by Seller to Purchaser, and any money
theretofore received by Seller in connection with such taking shall be paid over to Purchaser,
whereupon Purchaser shall pay the Purchase Price without abatement by reason of such taking, or (B)
receive a full and prompt refund of all sums deposited by Purchaser with Escrow Holder and/or
Seller. Seller shall not settle, agree to, or accept any award or payment in connection with a
taking of less than all of the Real Property without obtaining Purchaser’s prior written consent in
each case, which consent shall not be unreasonably withheld or delayed.

     12.14 Construction of Agreement. The parties hereto have negotiated this Agreement at
length, and have had the opportunity to consult with, and be represented by, their own competent
counsel. This Agreement is, therefore, deemed to have been jointly prepared. In determining the
meaning of, or resolving any ambiguity with respect to, any word, phrase or provision of this
Agreement, no uncertainty or ambiguity shall be construed or resolved against any party under any
rule of construction, including the party primarily responsible for the drafting and preparation of
this Agreement. The words “herein,” “hereof,” “hereunder” and words of similar reference shall mean
this Agreement. The words “this Agreement” include the

40

 

exhibits, schedules addenda and any future written modifications, unless otherwise indicated
by the context. All words in this Agreement shall be deemed to include any number or gender as the
context or sense of the Agreement requires. The words “will,” “shall” and “must” in this Agreement
indicate a mandatory obligation. The use of the words “include,” “includes” and “including”
followed by one or more examples is intended to be illustrative and is not a limitation on the
scope of the description or term for which the examples are provided. All dollar amounts set forth
in this Agreement are stated in United States Dollars, unless otherwise specified. The words “day”
and “days” refer to calendar days unless otherwise stated. The words “business day” refer to a day
other than a Saturday, Sunday or legal holiday on which banking institutions are closed. The words
“month” and “months” refer to calendar months unless otherwise stated. The words “year” and
“years” refer to calendar years unless otherwise stated.

     12.15 Tax Deferred Exchange. The following provisions shall apply with respect to
each Property:

          12.15.1 Seller and Purchaser (“Cooperating Party”) each agree to fully cooperate with
the other (and any owner of such other party) (“Exchangor”) (including cooperation with any
Intermediary (as defined herein) selected by Exchangor) to structure the acquisition of the
Property and/or the Real Property as an exchange of property held for productive use in a trade or
business or for investment within the meaning of Section 1031 of the Internal Revenue Code of
1986 (as amended), and upon request, Cooperating Party agrees to execute additional escrow
instructions, documents, agreements or instruments to effect the exchange; provided, however, that
Cooperating Party shall incur no additional costs or expenses in this transaction, or be required
to incur any additional liability, acquire, accept or hold title to any property (other than the
Property), as a result of or in connection with any such exchange, unless because of Cooperating
Party’s default hereunder or under any agreement executed by reason of this Section 12.15.

          12.15.2 Exchangor agrees to indemnify, defend or hold Cooperating Party harmless from and
against any and all additional costs, expenses, claims, demands, liabilities, losses, obligations,
damages, recoveries, and deficiencies (such categories being collectively referred to herein as
“Liabilities”) in excess of those Liabilities that Cooperating Party would otherwise have
if the transaction contemplated in this Agreement closes as a sale transaction, and that
Cooperating Party may incur or suffer, as a result of or in connection with (i) the structuring of
the transaction contemplated in this Agreement as an exchange under Internal Revenue Code
Section 1031 and/or (ii) the execution of any documents in connection with the exchange.
Exchangor’s foregoing indemnity shall not indemnify Cooperating Party for any Liabilities arising
as a result of or in connection with any default by Cooperating Party under this Agreement or any
default by Cooperating Party under any of the documents or agreements entered into by Cooperating
Party in connection with the exchange or for any negligence or willful misconduct on the part of
Cooperating Party. Implementation of the exchange(s) contemplated in this Section 12.15 shall not
be a condition to the Close of Escrow.

          12.15.3 Exchangor, at its election, may substitute for any one or more of them, one or more
persons or entities (“Intermediary”) as a party(ies) to the Escrow and this Agreement, in
which event the Intermediary shall assume and perform the obligations of

41

 

Exchangor under this Agreement (but without the release of liability of Exchangor for such
performance), and Cooperating Party agrees to accept the performance by Intermediary and shall
tender its performance to Intermediary.

     12.16 Covenants, Representations and Warranties. Except as otherwise set forth in
this Agreement, all of the covenants, representations and agreements of Sellers and Purchaser set
forth in this Agreement shall survive the Close of Escrow, except that all representations and
warranties shall survive only for a period of nine (9) months after the Close of Escrow. By
proceeding with the closing of the sale transaction, Sellers and Purchaser shall be deemed to have
waived, and so covenant to waive, any claims of defaults or breaches by the other party existing on
or as of the Close of Escrow whether under this Agreement or any other document or instrument
executed by the other party in connection with this transaction, of which the waiving party has
actual knowledge of prior to the Close of Escrow for which the other party shall have no liability.

     12.17 Confidentiality. Other than as required or permitted by the terms of this
Agreement, no party hereto shall release or cause or permit to be released any press notices or
releases or publicity (oral or written) or advertising promotion relating to, or otherwise announce
or disclose or cause or permit to be announced or disclosed, in any manner whatsoever, the terms
and conditions of the purchase and sale transaction for the Properties, nor shall Purchaser or its
agents or representatives disclose, in any manner whatsoever, (a) the information provided to
Purchaser by any Seller or its representatives, or (b) any analyses, compilations, studies or other
documents or records prepared by or on behalf of Purchaser, in connection with Purchaser’s due
diligence investigation of the Property, without first obtaining the written consent of Sellers
(collectively, “Proprietary Information”). The foregoing shall not preclude Purchaser (i)
from discussing the Proprietary Information with any person who is employed by Purchaser or who, on
behalf of Purchaser, is actively and directly participating in the purchase and sale of the
Property, including, without limitation, to Purchaser’s existing or prospective investors,
shareholders, partners, members, existing or prospective lenders, attorneys, accountants and other
consultants and advisors, or (ii) from complying with all laws, rules, regulations and court
orders, including, without limitation, governmental regulatory, disclosure, tax and reporting
requirements. Seller acknowledges that, in connection with the Public Offering and the future
operation of a public company, Purchaser shall be permitted to disclose to its underwriter and
prospective investors any and all information regarding the term of terms of this transaction and
the Properties that Purchaser determines in its sole, but reasonable, discretion to be material or
otherwise necessary or advisable in order to comply with its disclosure requirements.

     12.18 Limitation on Liability. In consideration of the benefits accruing hereunder,
Sellers and Purchaser agree that, in the event of any actual or alleged failure, breach or default
of this Agreement by Sellers or Purchaser:

     (a) The sole and exclusive remedy shall be against the defaulting party and its assets;

     (b) No owner of the defaulting party shall be sued or named as a party in any suit or
action;

42

 

     (c) No service of process shall be made against any owner or employee of the defaulting
party (except as may be necessary to secure jurisdiction of the defaulting party);

     (d) No owner or employee of the defaulting party shall be required to answer or
otherwise plead to any service of process;

     (e) No judgment may be taken against any owner or employee of the defaulting party;

     (f) Any judgment taken against any owner or employee of the defaulting party may be
vacated and set-aside at any time without hearing;

     (g) No writ of execution will ever be levied against the assets of any owner or
employee of the defaulting party; and

     (h) These covenants and agreements are enforceable both by the defaulting party and
also by any owner or employee of the defaulting party.

In addition to the foregoing, and notwithstanding any other term or provision of this Agreement to
the contrary, except as to any Seller’s fraud, Sellers shall have no liability for the breach of
any representation, warranty, covenant, indemnity or other obligation expressly stated to survive
the Close of Escrow (collectively, “Sellers’ Post-Closing Obligations”), unless and until
the aggregate amount of Purchaser’s out-of-pocket damages and third party expenses directly
resulting from such breaches shall exceed, and then only to the extent the same exceeds, Twenty
Five Thousand Dollars ($25,000). Furthermore, Sellers’ aggregate liability under this Agreement
(or otherwise) for the breach of any and all of Sellers’ Post-Closing Obligations shall, in no
event individually or in the aggregate, exceed two and one-half percent (2.5%) of the Purchase
Price. In no event shall Seller have any liability for punitive damages, consequential damages, or
damages for diminution-in-value, but shall only be liable for Purchaser’s actual out-of-pocket
damages and third party expenses.

     12.19 No Third-Party Beneficiaries. Sellers and Purchaser agree that there are no
third parties who are intended to benefit from or who are entitled to rely on any of the provisions
of this Agreement. No third party shall be entitled to assert any claims or to enforce any rights
whatsoever pursuant to this Agreement. The covenants and agreements provided in this Agreement are
solely for the benefit of Sellers and Purchaser and their permitted successors and assigns
respectively.

     12.20 Facsimile Signatures. The execution of this Agreement and all Notices given
hereunder and all amendments hereto, may be effected by facsimile signatures, all of which shall be
treated as originals; provided, however, that the party receiving a document with a facsimile
signature may, by Notice to the other, require the prompt delivery of an original signature to
evidence and confirm the delivery of the facsimile signature. Purchaser and Sellers each intend to
be bound by its respective facsimile transmitted signature, and is aware that the other party will
rely thereon, and each party waives any defenses to the enforcement of the Agreement, and
documents, and any Notices delivered by facsimile transmission.

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[Signatures on following page]

44

 

XIII.

EXECUTION

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the
16th day of November, 2009.

	 	 	 	 	 	 	 
	 	 	SELLERS:	 	 
	 
	 	 	 	 	 	 
	 	 	RLJ BILLERICA HOTEL, L.L.C.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Thomas J. Baltimore, Jr.
 

	 	 
	 	 	Thomas J. Baltimore, Jr.

President	 	 
	 
	 	 	 	 	 	 
	 

	 	RLJ
	 	BLOOMINGTON HOTEL, L.L.C.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Thomas J. Baltimore, Jr.
 

	 	 
	 	 	Thomas J. Baltimore, Jr.	 	 
	 	 	President	 	 
	 
	 	 	 	 	 	 
	 	 	RLJ BRENTWOOD HOTEL, L.L.C.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Thomas J. Baltimore, Jr.
 

	 	 
	 	 	Thomas J. Baltimore, Jr.	 	 
	 	 	President	 	 
	 
	 	 	 	 	 	 
	 	 	RLJ DALLAS HOTEL LIMITED PARTNERSHIP	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	RLJ Dallas Hotel Gen-Par, L.L.C.	 	 
	 

	 	 	 	General Partner	 	 

	 	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Thomas J. Baltimore, Jr.
 

	 	 
	 	 	Thomas J. Baltimore, Jr.	 	 
	 	 	President	 	 

[Signatures continued on next page.]

45

 

	 	 	 	 	 	 	 
	 	 	RLJ FARMINGTON HOTEL, L.L.C.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Thomas J. Baltimore, Jr.
 

	 	 
	 	 	Thomas J. Baltimore, Jr.

President	 	 
	 
	 	 	 	 	 	 
	 

	 	RLJ
	 	MAITLAND HOTEL, L.L.C.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Thomas J. Baltimore, Jr.
 

	 	 
	 	 	Thomas J. Baltimore, Jr.

President	 	 
	 
	 	 	 	 	 	 
	 	 	PURCHASER:	 	 
	 
	 	 	 	 	 	 
	 	 	CHATHAM LODGING TRUST	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jeffrey H. Fisher
 

	 	 
	 	 	Name: Jeffrey H. Fisher

Title: Chief Executive Officer	 	 

ESCROW HOLDER HEREBY ACKNOWLEDGES

AND AGREES TO THE ESCROW INSTRUCTIONS

SET FORTH IN THIS AGREEMENT.

CHICAGO TITLE INSURANCE COMPANY

	 	 	 	 	 
	BY:

	 	/s/ R. Eric Taylor
 

	 	 
	Name: R. Eric Taylor	 	 
	Title: Vice President and Senior Counsel	 	 

Dated: November 16, 2009

46

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