Document:

Exhibit 10.21        

Wytheville, VA (FI&S) 

PURCHASE CONTRACT

between

KRISHNA HOTEL, INC. (“SELLER”)

 (“SELLER”)

AND

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

Dated: February 4, 2011

TABLE OF CONTENTS

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Page No.

 
	
  

 	
  

 	
  

 	

 
	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE I

 	
  

 	
 DEFINED TERMS

 	
 1

 
	
 1.1

 	
 Definitions

 	
 1

 
	
 ARTICLE II

 	
  

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

 	
 6

 
	
 2.1

 	
 Purchase and
 Sale

 	
 6

 
	
 2.2

 	
 Purchase
 Price

 	
 6

 
	
 2.3

 	
 Allocation

 	
 6

 
	
 2.4

 	
 Payment

 	
 7

 
	
 2.5

 	
 Earnest
 Money Deposit

 	
 7

 
	
 ARTICLE III

 	
  

 	
 REVIEW PERIOD

 	
 7

 
	
 3.1

 	
 Review
 Period

 	
 7

 
	
 3.2

 	
 Due
 Diligence Examination

 	
 9

 
	
 3.3

 	
 Restoration

 	
 9

 
	
 3.4

 	
 Seller
 Exhibits

 	
 9

 
	
 ARTICLE IV

 	
  

 	
 SURVEY AND
 TITLE APPROVAL

 	
 9

 
	
 4.1

 	
 Survey

 	
 9

 
	
 4.2

 	
 Title

 	
 9

 
	
 4.3

 	
 Survey or
 Title Objections

 	
 10

 
	
 ARTICLE V

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 FRANCHISE
 AGREEMENT

 	
 10

 
	
 ARTICLE VI

 	
  

 	
 BROKERS

 	
 11

 
	
 ARTICLE VII

 	
  

 	
 REPRESENTATIONS,
 WARRANTIES AND COVENANTS

 	
 11

 
	
 7.1

 	
 Seller’s
 Representations, Warranties and Covenants

 	
 11

 
	
 7.2

 	
 Buyer’s
 Representations, Warranties and Covenants

 	
 15

 
	
 7.3

 	
 Survival

 	
 15

 
	
 ARTICLE VIII

 	
  

 	
 ADDITIONAL
 COVENANTS

 	
 15

 
	
 8.1

 	
 Subsequent
 Developments

 	
 15

 
	
 8.2

 	
 Operations

 	
 15

 
	
 8.3

 	
 Third Party
 Consents

 	
 17

 
	
 8.4

 	
 Employees

 	
 17

 

i

	
  

 	
  

 	
  

 	
  

 
	
 8.5

 	
 Estoppel
 Certificates

 	
 17

 
	
 8.6

 	
 Access to
 Financial Information

 	
 17

 
	
 8.7

 	
 Bulk Sales

 	
 18

 
	
 8.8

 	
 Escrow Funds

 	
 18

 
	
 ARTICLE IX

 	
  

 	
 CONDITIONS
 FOR CLOSING

 	
 18

 
	
 9.1

 	
 Buyer’s
 Conditions for Closing

 	
 18

 
	
 9.2

 	
 Seller’s
 Conditions for Closing

 	
 19

 
	
 ARTICLE X

 	
  

 	
 CLOSING AND
 CONVEYANCE

 	
 19

 
	
 10.1

 	
 Closing

 	
 19

 
	
 10.2

 	
 Deliveries
 of Seller

 	
 20

 
	
 10.3

 	
 Buyer’s
 Deliveries

 	
 21

 
	
 ARTICLE XI

 	
  

 	
 COSTS

 	
 21

 
	
 11.1

 	
 Seller’s
 Costs

 	
 21

 
	
 11.2

 	
 Buyer’s
 Costs

 	
 22

 
	
 

 	
 

 
	
 ARTICLE XII

 	
  

 	
 ADJUSTMENTS

 	
 22

 
	
 12.1

 	
 Adjustments

 	
 22

 
	
 12.2

 	
 Reconciliation
 and Final Payment

 	
 23

 
	
 12.3

 	
 Employees

 	
 24

 
	
 ARTICLE XIII

 	
  

 	
 CASUALTY AND
 CONDEMNATION

 	
 24

 
	
 13.1

 	
 Risk of
 Loss; Notice

 	
 24

 
	
 13.2

 	
 Buyer’s
 Termination Right

 	
 24

 
	
 13.3

 	
 Procedure
 for Closing

 	
 25

 
	
 ARTICLE XIV

 	
  

 	
 DEFAULT
 REMEDIES

 	
 25

 
	
 14.1

 	
 Buyer Default

 	
 25

 
	
 14.2

 	
 Seller
 Default

 	
 25

 
	
 14.3

 	
 Attorney’s
 Fees

 	
 25

 
	
 ARTICLE XV

 	
  

 	
 NOTICES

 	
 25

 
	
 ARTICLE XVI

 	
  

 	
 MISCELLANEOUS

 	
 26

 
	
 16.1

 	
 Performance

 	
 26

 
	
 16.2

 	
 Binding
 Effect; Assignment

 	
 26

 
	
 16.3

 	
 Entire
 Agreement

 	
 27

 
	
 16.4

 	
 Governing
 Law

 	
 27

 
	
 16.5

 	
 Captions

 	
 27

 

ii

	
  

 	
  

 	
  

 	
  

 
	
 16.6  

 	
 Confidentiality

 	
 27

 
	
 16.7  

 	
 Closing
 Documents

 	
 27

 
	
 16.8  

 	
 Counterparts

 	
 27

 
	
 16.9  

 	
 Severability

 	
 27

 
	
 16.10

 	
 Interpretation

 	
 27

 
	
 16.11

 	
 Further Acts

 	
 28

 
	
 16.12

 	
 Joint and
 Several Obligations

 	
 28

 
	
 SCHEDULES:

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
 Schedule 3.1

 	
  

 	
 Due
 Diligence List

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
 EXHIBITS:

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
 Exhibit A

 	
  

 	
 Legal
 Description

 	
  

 
	
 Exhibit B

 	
  

 	
 List of
 FF&E

 	
  

 
	
 Exhibit C

 	
  

 	
 List of
 Hotel Contracts

 	
  

 
	
 Exhibit D

 	
  

 	
 Consents and
 Approvals

 	
  

 
	
 Exhibit E

 	
  

 	
 Environmental
 Reports

 	
  

 
	
 Exhibit F

 	
  

 	
 Claims or
 Litigation Pending

 	
  

 
	
 Exhibit G

 	
  

 	
 Escrow
 Agreement

 	
  

 

iii

PURCHASE CONTRACT

          This
PURCHASE CONTRACT (this “Contract”)
is made and entered into as of February 4, 2011, by and between KRISHNA HOTEL,
INC., a Virginia corporation (“Seller”)
with a principal office at 2011Veasely Street, Greensboro, North Carolina 27407
and APPLE TEN HOSPITALITY OWNERSHIP, INC., a Virginia corporation, with its
principal office at 814 East Main Street, Richmond, Virginia 23219, or its
affiliates or assigns (“Buyer.

RECITALS

          A.
Seller is the fee simple owner of that certain hotel property commonly known as
the Fairfield Inn & Suites Wytheville, located at 200 Marriott Way,
Wytheville, Virginia 24382 containing, among other things, 80 guestrooms and
suites (the “Hotel”)
identified in on Exhibit A
attached hereto and incorporated by reference. 

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

AGREEMENT:

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

ARTICLE I 

DEFINED TERMS

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

          “Additional
Deposit” shall mean $100,000. 

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

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

1

          
“Brand” shall mean Fairfield Inn & Suites, the hotel brand or
franchise under which the Hotel operates.

          “Business Day” shall mean any day
other than a Saturday, Sunday or legal holiday in the Commonwealth of Virginia
or the state in which the Property is located.

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

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

          “Contracts,
Plans and Specs” shall mean all construction and other contracts, plans,
drawings, specifications, surveys, soil reports, engineering reports,
inspection reports, and other technical descriptions and reports. 

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

          “Deposits”
shall mean, to the extent assignable, all prepaid rents and deposits
(including, without limitation, any reserves for replacement of FF&E and
for capital repairs and/or improvements), refundable security deposits and
rental deposits, and all other deposits for advance reservations, banquets or
future services, made in connection with the use or occupancy of the
Improvements; provided, however, that to the extent Seller has not received or
does not hold all of the prepaid rents and/or deposits attributable to the
Leases related to the Property, Buyer shall be entitled to a credit against the
cash portion of the Purchase Price allocable to the Property in an amount equal
to the amount of the prepaid rents and/or deposits attributable to the Leases
transferred at the Closing of such Property, and provided further, that
“Deposits” shall exclude (i) reserves for real property taxes and insurance, in
each case, to the extent pro rated on the settlement statement such that Buyer
receives a credit for (a) taxes and premiums in respect of any period prior to
Closing and (b) the amount of deductibles and other self-insurance and all
other potential liabilities and claims in respect of any period prior to
Closing, and (ii) utility deposits. 

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

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

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

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

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

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

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

2

          “FF&E”
shall mean all tangible personal property and fixtures of any kind (other than
personal property (i) owned by guests of the Hotel or (ii) leased by Seller
pursuant to an FF&E Lease) attached to, or located upon and used in
connection with the ownership, maintenance, use or operation of the Land or
Improvements as of the date hereof (or acquired by Seller and so employed prior
to Closing), including, but not limited to, all furniture, fixtures, equipment,
signs and related personal property; all heating, lighting, plumbing, drainage,
electrical, air conditioning, and other mechanical fixtures and equipment and
systems; all elevators, and related motors and electrical equipment and
systems; all hot water heaters, furnaces, heating controls, motors and
equipment, all shelving and partitions, all ventilating equipment, and all
disposal equipment; all spa, health club and fitness equipment; all equipment
used in connection with the use and/or maintenance of the guestrooms,
restaurants, lounges, business centers, meeting rooms, swimming pools, indoor
and/or outdoor sports facilities and other common areas and recreational areas;
all carpet, drapes, beds, furniture, televisions and other furnishings; all
stoves, ovens, freezers, refrigerators, dishwashers, disposals, kitchen
equipment and utensils, tables, chairs, plates and other dishes, glasses,
silverware, serving pieces and other restaurant and bar equipment, apparatus
and utensils. A current list of FF&E is attached hereto as Exhibit B. 

          “FF&E
Leases” shall mean all leases of any FF&E and other contracts
permitting the use of any FF&E at the Improvements that are assumed by
Buyer. 

          “Financial
Statements” shall have the meaning set forth in Section 3.1(b). 

          “Franchisor”
shall mean Marriott International, Inc. 

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

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

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

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

          “Leases”
shall mean all leases, franchises, licenses, occupancy agreements, “trade-out”
agreements, advance bookings, convention reservations, or other agreements
demising space in, providing for the use or occupancy of, or otherwise
similarly affecting or relating to the use or occupancy of, the Improvements or
Land, together with all amendments, modifications, renewals and extensions
thereof, and all guaranties by third parties of the obligations of the tenants,
licensees, franchisees, concessionaires or other entities thereunder. 

          “Legal
Action” shall have the meaning set forth in Section 8.8(c)(ii). 

          “Licenses”
shall mean all permits, licenses, franchises, utility reservations,
certificates of occupancy, and other documents issued by any federal, state, or
municipal authority or by any 

3

private party
related to the development, construction, use, occupancy, operation or
maintenance of the Hotel, including, without limitation, all licenses,
approvals and rights (including any and all existing waivers of any brand
standard) necessary or appropriate for the operation of the Hotel under the
Brand. 

          
“Manager” shall mean the management company selected by Buyer to manage
the Hotel. 

          “New
Franchise Agreement” shall mean the franchise license agreement to be
entered into between Buyer and the Franchisor, granting to Buyer a franchise to
operate the Hotel under the Brand on and after the Closing Date. 

          “New
Management Agreement” means the management agreement to be entered into
between Buyer and the Manager for the operation and management of the Hotel on
and after the Closing Date. 

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

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

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

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

          “Post-Closing
Agreement” shall have the meaning set forth in Section 8.9. 

          “Property”
shall mean, collectively, (i) all of the following with respect to the Hotel:
the Land, Improvements, Appurtenances, FF&E, Supplies, Leases, Deposits,
Records, Service Contracts, Warranties, Licenses, FF&E Leases, Contracts,
Plans and Specs, Tradenames, Utility Reservations, as well as all other real,
personal or intangible property of Seller related to any of the foregoing and
(ii) any and all of the following that relate to or affect in any way the
design, construction, ownership, use, occupancy, leasing, maintenance, service
or operation of the Real Property, FF&E, Supplies, Leases, Deposits or
Records: Service Contracts, Warranties, Licenses, Tradenames, Contracts, Plans
and Specs and FF&E Lease. 

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

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

          “Records”
shall mean all books, records, promotional material, tenant data, guest history
information, marketing and leasing material and forms (including but not
limited to any such records, data, information, material and forms in the form
of computerized files located at the Hotel), market studies prepared in
connection with Seller’s current annual plan and other materials, information, data,
legal or other documents or records (including, without limitation, all
documentation relating to any litigation or other proceedings, all zoning
and/or land use notices, relating to or affecting the Property, all business
plans and projections and all studies, plans, budgets and contracts related to
the development, construction and/or operation of the 

4

Hotel) owned
by Seller and/or in Seller’s possession or control, or to which Seller has
reasonable access to or may reasonably obtain, that are used in or relating to
the Property and/or the operation of the Hotel, including the Land, the
Improvements or the FF&E, and proforma budgets and projections and
construction budgets and contracts related to the development and construction
of the Hotel and a list of the general contractors, architects and engineers
providing goods and/or services in connection with the construction of the
Hotel, all construction warranties and guaranties in effect at Closing and
copies of the final plans and specifications for the Hotel. 

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

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

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

          “Seller
Liens” shall have the meaning set forth in Section 4.3. 

          “Seller
Parties” shall have the meaning set forth in Section 7.1(e). 

          “Service
Contracts” shall mean contracts or agreements, such as maintenance, supply,
service or utility contracts. 

          “Supplies”
shall mean all merchandise, supplies, inventory and other items used for the
operation and maintenance of guest rooms, restaurants, lounges, swimming pools,
health clubs, spas, business centers, meeting rooms and other common areas and
recreational areas located within or relating to the Improvements, including,
without limitation, all food and beverage (alcoholic and non-alcoholic)
inventory (opened or unopened), office supplies and stationery, advertising and
promotional materials, china, glasses, silver/flatware, towels, linen and
bedding (all of which shall be 2-par level for all suites or rooms in the
Hotel), guest cleaning, paper and other supplies, upholstery material, carpets,
rugs, furniture, engineers’ supplies, paint and painters’ supplies, employee
uniforms, and all cleaning and maintenance supplies, including those used in
connection with the swimming pools, indoor and/or outdoor sports facilities,
health clubs, spas, fitness centers, restaurants, business centers, meeting rooms
and other common areas and recreational areas. 

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

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

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

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

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

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

5

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

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

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

ARTICLE II

PURCHASE AND SALE; PURCHASE PRICE; PAYMENT; 

EARNEST MONEY DEPOSIT

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

          2.2
Purchase Price. Buyer agrees to pay, and Seller agrees to accept, as
consideration for the conveyance of the Property, subject to the adjustments
provided for in this Contract, the amount of SEVEN MILLION TWO HUNDRED FIFTY
THOUSAND and No/100 Dollars ($7,250,000.00) (the “Purchase Price”). 

          2.3
Allocation. Buyer and Seller shall attempt to agree, prior to the
expiration of the Review Period, on an allocation of the Purchase Price among
Real Property, tangible Personal Property and intangible property related to
the Property. In the event Buyer and Seller do not 

6

agree, each
party shall be free to allocate the Purchase Price to such items as they deem
appropriate, subject to and in accordance with applicable laws. 

          2.4
Payment. The portion of the Purchase Price, less the Earnest Money
Deposit and interest earned thereon, if any, which Buyer elects to have applied
against the Purchase Price (as provided below), less the Escrow Funds, shall be
paid to Seller in cash, certified funds or wire transfer, at the Closing of the
Property. At the Closing, the Earnest Money Deposit, together with interest
earned thereon, if any, shall, at Buyer’s election, be returned to Buyer or
shall be paid over to Seller by Escrow Agent to be applied to the portion of the
Purchase Price on behalf of Buyer, and the Escrow Funds shall be deposited into
an escrow account pursuant to the Post-Closing Agreement as contemplated by
Section 8.9. 

          2.5
Earnest Money Deposit. 

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

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

ARTICLE III 

REVIEW PERIOD

          3.1
Review Period. Buyer shall have a period through 6:00 p.m. Eastern Time
on the date that is thirty (30) days after the date of this Contract, unless a
longer period of time is otherwise provided for in this Contract and except as
otherwise agreed to by Buyer and Seller (the “Review Period”), to evaluate the legal, title, survey,
construction, physical condition, structural, mechanical, environmental,
economic, permit status, franchise status, financial and other documents and
information related to the Property. Within two (2) Business Days following the
date of this Contract, Seller, at Seller’s sole cost and expense, will deliver
to Buyer (or make available at the Hotel) for Buyer’s review, to the extent not
previously delivered to Buyer, true, correct and complete copies of the
following, together with all amendments, modifications, renewals or extensions
thereof: 

7

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

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

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

                    (d)
Engineering, mechanical, architectural and construction plans, drawings,
specifications and contracts, payment and performance bonds, title policies,
reports and commitments, zoning information and marketing and economic data
relating to the Hotel and the construction, development, installation and
equipping thereof, as well as copies of all environmental reports and
information, topographical, boundary or “as built” surveys, engineering
reports, subsurface studies and other Contracts, Plans and Specs relating to or
affecting the Hotel. If the Hotel is purchased by Buyer, all such documents and
information relating to the Hotel shall thereupon be and become the property of
Buyer without payment of any additional consideration therefor; 

                    (e)
All FF&E Leases, Services Contracts, Leases and, if applicable, a schedule
of such Leases of space in the Hotel, and all agreements for real estate
commissions, brokerage fees, finder’s fees or other compensation payable by
Seller in connection therewith; and 

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

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

          Seller
shall, upon request of Buyer, make available to Buyer and Buyer’s
representatives and agents, for inspection and copying during normal business
hours, Records located at Seller’s corporate offices, and Seller agrees to
provide Buyer copies of all other reasonably requested information that is
relevant to the management, operation, use, occupancy or leasing of or title to
the applicable Hotel and the plans specifications for development of the Hotel.
At any time during the Review Period, Buyer may, in its sole and absolute
discretion, elect not to proceed with the purchase of the Property for any
reason whatsoever by giving written notice thereof to Seller, in which event:
(i) the Earnest Money Deposit shall be promptly returned by Escrow Agent to
Buyer together with all accrued interest, if any, (ii) this Contract shall be
terminated automatically, (iii) all materials supplied by Seller to Buyer shall
be returned promptly to Seller, and (iv) both parties will be relieved of all
other rights, obligations and liabilities hereunder, except for the parties’
obligations pursuant to Sections 3.3 and 16.6 below. 

8

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

          3.3
Restoration. Buyer covenants and agrees not to damage or destroy any
portion of the Property in conducting its examinations and studies of the
Property during the Due Diligence Examination and, if closing does not occur,
shall repair any portion of the Property damaged by the conduct of Buyer, its
agents or employees, to substantially the condition such portion(s) of the
Property were in immediately prior to such examinations or studies. 

          3.4
Seller Exhibits. Buyer shall have until the end of the Review Period to
review and approve the information on Exhibits B, C, D, E and F. In the event
Buyer does not approve any such Exhibit or the information contained therein,
Buyer shall be entitled to terminate this Contract by notice to Seller and the
Earnest Money Deposit shall be returned to Buyer with all interest thereon and
both parties shall be relieved of all rights, obligations and liabilities
hereunder except for the parties’ obligations pursuant to Sections 3.3 and
16.6. 

ARTICLE IV

SURVEY AND TITLE APPROVAL

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

          4.2
Title. Seller has delivered to Buyer its existing title insurance policy,
including copies of all documents referred to therein, for its Real Property.
Buyer’s obligations under this Contract are conditioned upon Buyer being able
to obtain for the Property (i) a Commitment for Title Insurance (the “Title Commitment”) issued by Chicago
Title Company, Attn: Debby Moore, 5501 LBJ Freeway, Ste. 200, Dallas, Texas
75240 (the “Title Company”),
for the most recent standard form of owner’s policy of title insurance in the
state in which the Real Property is located, covering the Real Property,
setting forth the current status of the title to the Real Property, showing all
liens, claims, encumbrances, easements, rights of way, encroachments,
reservations, restrictions and any other matters affecting the Real Property
and pursuant to which the Title Company agrees to issue to Buyer at Closing an
Owner’s Policy of Title Insurance on the most recent form of ALTA (where
available) owner’s policy available in the state in which the Land is located,
with extended coverage and, to the extent applicable and available in such 

9

state,
comprehensive, access, single tax parcel, survey, contiguity, and such other
endorsements as may be required by Buyer (collectively, the “Title Policy”); and (ii) true,
complete, legible and, where applicable, recorded copies of all documents and
instruments (the “Exception Documents”)
referred to or identified in the Title Commitment, including, but not limited
to, all deeds, lien instruments, leases, plats, surveys, reservations,
restrictions, and easements affecting the Real Property. 

          4.3
Survey or Title Objections. If Buyer discovers any title or survey matter which
is objectionable to Buyer, Buyer may provide Seller with written notice of its
objection to same on or before the expiration of the Review Period (the “Title Review Period”). If Buyer fails
to so object in writing to any such matter set forth in the Survey or Title
Commitment, it shall be conclusively assumed that Buyer has approved same. If
Buyer disapproves any condition of title, survey or other matters by written
objection to Seller on or before the expiration of the Title Review Period,
Seller shall elect either to attempt to cure or not cure any such item by written
notice sent to Buyer within five (5) days after its receipt of notice from
Buyer, and if Seller commits in writing to attempt to cure any such item, then
Seller shall be given until the Closing Date to cure any such defect. In the
event Seller shall fail to cure a defect which Seller has committed in writing
to cure prior to Closing, or if a new title defect arises after the date of
Buyer’s Title Commitment or Survey, as applicable, but prior to Closing, then
Buyer may elect, in Buyer’s sole and absolute discretion: (i) to waive such
objection and proceed to Closing, or (ii) to terminate this Contract and
receive a return of the Earnest Money Deposit, and any interest thereon. The
items shown on the Title Commitment which are not objected to by Buyer as set
forth above (other than exceptions and title defects arising after the title
review period and other than those standard exceptions which are ordinarily and
customarily omitted in the state in which the applicable Hotel is located, so
long as Seller provides the appropriate owner’s affidavit, gap indemnity or
other documentation reasonably required by the Title Company for such omission)
are hereinafter referred to as the “Permitted
Exceptions.” In no event shall Permitted Exceptions include
liens, or documents evidencing liens, securing any indebtedness (including
vehicle or FF&E leases or financing arrangements) any mechanics’ or
materialmen’s liens or any claims or potential claims therefor covering the
Property or any portion thereof (“Seller
Liens”), each of which shall be paid in full by Seller and
released at Closing. If a vehicle or FF&E lease or other financing cannot
be released at Closing, Seller shall credit Buyer at Closing with the amount
necessary to fully pay off such lease or financing over its term. 

ARTICLE V 

FRANCHISE AGREEMENT

          At
or prior to the Closing, Seller shall the Existing Franchise Agreement, and
Seller shall be solely responsible for all claims and liabilities arising
thereunder on, prior to or following the Closing Date. As a condition to
Closing, Buyer shall enter into the New Management Agreement and the New
Franchise Agreement, effective as of the Closing Date, containing terms and
conditions acceptable to Buyer. Buyer shall be responsible for paying all
reasonable and actual costs of the Franchisor related to the assignment or
termination, as applicable, of the Existing Franchise Agreement; provided,
however, Seller shall be solely responsible for repayment of any Key Money or
other franchisor-provided incentives and for any other amounts owed pursuant to
the Existing Franchise Agreement. Seller shall use best efforts to promptly
provide all information required by the Franchisor in connection with the New
Franchise 

10

Agreement, and
Seller and Buyer shall diligently pursue obtaining each the same. As a
condition to Buyer’s and Seller’s obligation to close under this Contract,
Buyer and Manager shall agree, on or before the expiration of the Review
Period, on the form and substance of the New Management Agreement. 

ARTICLE VI 

BROKERS

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

ARTICLE VII 

REPRESENTATIONS, WARRANTIES AND COVENANTS

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

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

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

                    (c)
Bankruptcy. None of Seller or, to Seller’s knowledge, any of its or
their partners or members, is insolvent or the subject of any bankruptcy
proceeding, receivership proceeding or other insolvency, dissolution,
reorganization or similar proceeding. 

                    (d)
Property Agreements. A complete list of all FF&E Leases, Service
Contracts and Leases used in or otherwise relating to the operation and
business of the Hotel is attached hereto as Exhibit C-1, and, to
Seller’s knowledge, a complete list of all other FF&E Leases, Service
Contracts and Leases used in or otherwise relating to the operation and business

11

of the Hotel
is attached hereto as Exhibit C-2. The assets constituting the Property to be
conveyed to Buyer hereunder constitute all of the property and assets of Seller
used in connection with the operation and business of the Hotel. There are no
leases, license agreements, leasing agent’s agreements, equipment leases,
building service agreements, maintenance contracts, suppliers contracts,
warranty contracts, operating agreements, or other agreements (i) to which
Seller is a party or an assignee, or (ii) to Seller’s knowledge, binding upon
the Hotel, relating to the ownership, occupancy, operation, management or
maintenance of the Real Property, FF&E, Supplies or Tradenames, except for
those Service Contracts, Leases, Warranties and FF&E Leases disclosed on Exhibit
C or to be delivered to Buyer pursuant to Section 3.1. The Service
Contracts, Leases, Warranties and FF&E Leases disclosed on Exhibit C or to
be delivered to Buyer pursuant to Section 3.1 are in full force and effect, and
no default has occurred and is continuing thereunder and no circumstances exist
which, with the giving of notice, the lapse of time or both, would constitute
such a default. No party has any right or option to acquire the Hotel or any
portion thereof, other than Buyer.  

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

                    (f)
Environmental. With respect to environmental matters, to the best of
Seller’s knowledge and belief (i) there has been no Release or threat of
Release of Hazardous Materials in, on, under, to, from or in the area of the
Real Property, except as disclosed in the reports and documents set forth on
Exhibit E attached hereto and incorporated herein by reference, (ii) no portion
of the Property is being used for the treatment, storage, disposal or other
handling of Hazardous Materials or machinery containing Hazardous Materials
other than standard amounts of cleaning supplies and chlorine for the swimming
pool, all of which are stored on the Property in strict accordance with
applicable Environmental Requirements and do not exceed limits permitted under
applicable laws, including without limitation Environmental Requirements, (iii)
no underground storage tanks are currently located on or in the Real Property
or any portion thereof, (iv) no environmental investigation, administrative order,
notification, consent order, litigation, claim, judgment or settlement with
respect to the Property or any portion thereof is pending or threatened, (v)
there is not currently and, to Seller’s knowledge,  

12

never has been
any mold, fungal or other microbial growth in or on the Real Property, or
existing conditions within buildings, structures or mechanical equipment
serving such buildings or structures, that could reasonably be expected to
result in material liability or material costs or expenses to remediate the
mold, fungal or microbial growth, or to remedy such conditions that could
reasonably be expected to result in such growth, and (vi) except as disclosed
on Exhibit E, there are no reports or other documentation regarding the
environmental condition of the Real Property in the possession of Seller or
Seller’s Affiliates, consultants, contractors or agents. As used in this
Contract: “Hazardous Materials”
means (1) “hazardous wastes” as defined by the Resource Conservation and
Recovery Act of 1976, as amended from time to time (“RCRA”), (2) “hazardous
substances” as defined by the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (42 U.S.C. 9601 et seq.), as amended by
the Superfund Amendment and Reauthorization Act of 1986 and as otherwise
amended from time to time (“CERCLA”);
(3) “toxic substances” as defined by the Toxic Substances Control Act, as
amended from time to time (“TSCA”),
(4) “hazardous materials” as defined by the Hazardous Materials Transportation
Act, as amended from time to time (“HMTA”),
(5) asbestos, oil or other petroleum products, radioactive materials, urea
formaldehyde foam insulation, radon gas and transformers or other equipment
that contains dielectric fluid containing polychlorinated biphenyls and (6) any
substance whose presence is detrimental or hazardous to health or the
environment, including, without limitation, microbial or fungal matter or mold,
or is otherwise regulated by federal, state and local environmental laws
(including, without limitation, RCRA, CERCLA, TSCA, HMTA), rules, regulations
and orders, regulating, relating to or imposing liability or standards of
conduct concerning any Hazardous Materials or environmental, health or safety
compliance (collectively, “Environmental
Requirements”). As used in this Contract: “Release” means spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, dumping or disposing. 

                    (g)
Title and Liens. Except for Seller Liens to be released at Closing,
Seller has good and marketable fee simple absolute title to the Real Property,
subject only to the Permitted Exceptions. Except for the FF&E subject to
the FF&E Leases and any applicable Permitted Exceptions, Seller has good
and marketable title to the Personal Property, free and clear of all liens,
claims, encumbrances or other rights whatsoever (other than the Seller Liens
which must be released at Closing), and there are no other liens, claims,
encumbrances or other rights pending or of which any Seller Party has received
notice or which are otherwise known to any Seller Party related to any other
Personal Property. 

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

                    (i)
Licenses, Permits and Approvals. Seller has not received any written
notice, and Seller has no knowledge that the Property fails to comply with all
applicable licenses, permits and approvals and federal, state or local
statutes, laws, ordinances, rules, regulations, requirements and codes
including, without limitation, those regarding zoning, land use, building,
fire, health, safety, environmental, subdivision, water quality, sanitation
controls and the Americans with Disabilities Act, and similar rules and
regulations relating and/or applicable to 

13

the ownership,
use and operation of the Property as it is now operated. To the best of
Seller’s knowledge and belief, Seller has received all licenses, permits and
approvals required or needed for the lawful conduct, occupancy and operation of
the business of the Hotel, and each license and permit is in full force and
effect, and will be received and in full force and effect as of the Closing. No
licenses, permits or approvals necessary for the lawful conduct, occupancy or
operation of the business of the Hotel, to the best of Seller’s knowledge and
belief, requires any approval of a governmental authority for transfer of the
Property except as set forth in Exhibit D.  

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

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

                    (l)
Operations. To the best of Seller’s knowledge and belief, the Hotel has
at all times been operated in accordance with all applicable laws, rules,
regulations, ordinances and codes. 

                    (m)
Franchise Agreements. Seller has furnished to Buyer true and complete
copies of the Existing Franchise Agreement, which constitutes the entire
agreement of the parties thereto with respect to the subject matter thereof and
which have not been amended or supplemented in any respect. There is no
management agreement nor are there any other franchise agreements, license
agreements or similar agreements for the operation or management of the Hotel
or relating to the Brand, to which Seller is a party or which are binding upon
the Property, except for the Existing Franchise Agreement. To the best of
Seller’s knowledge and belief, the Improvements comply with, and the Hotel is
being operated in accordance with, all requirements of such Existing Franchise
Agreement and all other requirements of the Franchisor, including all “brand
standard” requirements of the Franchisor. The Existing Franchise Agreement are
in full force and effect, and shall remain in full force and effect until the
termination of the Existing Franchise Agreement at Closing, as provided in
Article V hereof. No default has occurred and is continuing under the Existing
Franchise Agreement, and no circumstances exist which, with the giving of
notice, the lapse of time or both, would constitute such a default. 

                    (n)
Construction of Hotel. To the best of Seller’s knowledge and belief: 

14

	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
                
 (iii) Necessary easements for ingress and egress, drainage, signage and
 utilities serving the Hotel have either been dedicated to the public,
 conveyed to the appropriate utility or will be conveyed to Buyer along with
 the Property. 

 

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

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

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

          7.3
Survival. All of the representations and warranties are true, correct
and complete in all material respects as of the date hereof and the statements
set forth therein (without qualification or limitation as to a party’s
knowledge thereof except as expressly provided for in this Article VII) shall
be true, correct and complete in all material respects as of the Closing Date.
All of the representations and warranties made herein shall survive Closing for
a period of two (2) years and shall not be deemed to merge into or be waived by
the Deed or any other closing documents. 

ARTICLE VIII 

ADDITIONAL COVENANTS

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

          8.2
Operations. From and after the date hereof through the Closing on the
Property, Seller shall comply with the Existing Franchise Agreement and keep
the same in full force and 

15

effect and
shall perform and comply with all of the following subject to and in accordance
with the terms of such agreements: 

                    (a)
Continue to maintain the Property generally in accordance with prudent business
practices and pursuant to and in compliance with the Existing Franchise
Agreement, including, without limitation, (i) using reasonable efforts to keep
available the services of all present employees at the Hotel and to preserve
its relations with guests, suppliers and other parties doing business with
Seller with respect to the Hotel, (ii) accepting booking contracts for the use
of the Hotel’s facilities retaining such bookings in accordance with the terms
of the Existing Franchise Agreement, (iii) maintaining the current level of advertising
and other promotional activities for the Hotel’s facilities, (iv) maintaining
the present level of insurance with respect to the Hotel in full force and
effect until the Closing Date for the Hotel and (v) remaining in compliance in
all material respects with all current Licenses; 

                    (b)
Keep, observe, and perform in all material respects all its obligations under
and pursuant to the Leases, the Service Contracts, the FF&E Leases, the
Existing Franchise Agreement, the Contracts, Plans and Specs, the Warranties
and all other applicable contractual arrangements relating to the Hotel; 

                    (c)
Not cause or permit the removal of FF&E from the Hotel except for the
purpose of discarding worn and valueless items that have been replaced with
FF&E of equal or better quality; timely make all repairs, maintenance, and
replacements to keep all FF&E and all other Personal Property and all Real
Property in good operating condition; keep and maintain the Hotel in a good
state of repair and condition, reasonable and ordinary wear and tear excepted;
and not commit waste of any portion of the Hotel; 

                    (d)
Maintain the levels and quality of the Personal Property generally at the
levels and quality existing on the date hereof and keep merchandise, supplies
and inventory adequately stocked, consistent with good business practice, as if
the sale of the Hotel hereunder were not to occur, including, without
limitation, maintaining linens and bath towels at least at a 2-par level for
all suites or rooms of the Hotel; 

                    (e)
Advise Buyer promptly of any litigation, arbitration, or administrative hearing
before any court or governmental agency concerning or affecting the Hotel which
is instituted or threatened after the date of this Contract or if any
representation or warranty contained in this Contract shall become false; 

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

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

                    (h)
Not sell or assign, or enter into any agreement to sell or assign, or create or
permit to exist any lien or encumbrance (other than a Permitted Exception) on,
the Property or any portion thereof; and 

16

                    (i)
Not allow any permit, receipt, license, franchise or right currently in
existence with respect to the operation, use, occupancy or maintenance of the
Hotel to expire, be canceled or otherwise terminated. 

          The
Seller shall not, without first obtaining the written approval of Buyer, which
approval shall not be unreasonably withheld, enter into any new FF&E
Leases, Service Contracts, Leases or other contracts or agreements related to
the Hotel, or extend any existing such agreements, unless such agreements (x)
can be terminated, without payment or penalty, upon thirty (30) days’ prior
notice or (y) will expire prior to the Closing Date. 

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

          8.4
Employees. Upon reasonable prior notice to Seller by Buyer, Buyer and
its employees, representatives and agents shall have the right to communicate
with Seller’s staff, and, subject to the approval of the Seller and the Hotel
staff, including without limitation the general manager, the director of sales,
the engineering staff and other key management employees of the Hotel, at any
time before Closing. Buyer shall not interfere with the operations of the Hotel
while engaging in such communication in a manner that materially adversely
affects the operation of the Property. 

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

          8.6
Access to Financial Information. Buyer’s representatives shall have
access to, and Seller and its Affiliates shall cooperate with Buyer and furnish
upon request, all financial and other information relating to the Hotel’s
operations to the extent necessary to enable Buyer’s representatives to prepare
audited financial statements in conformity with Regulation S-X of the Securities
and Exchange Commission (the “SEC”)
and other applicable rules and regulations of the SEC and to enable them to
prepare a registration statement, report or disclosure statement for filing
with the SEC on behalf of Buyer or its Affiliates, whether before or after
Closing and regardless of whether such information is included in the Records
to be transferred to Buyer hereunder. Seller shall also provide to Buyer’s
representative a signed representation letter in form and substance reasonably
acceptable to Seller sufficient to enable an independent public accountant to
render an opinion on the financial statements related to the Hotel. Buyer will
reimburse Seller for costs reasonably incurred by Seller to comply with the
requirements of the preceding sentence to the extent that Seller is required to
incur costs not in the ordinary course of business for third parties to provide
such representation letters. The provisions of this Section shall survive
Closing or termination of this Contract. 

17

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

          8.8
Escrow Funds. To provide for the timely payment of any post-closing
claims by Buyer against Seller hereunder, at Closing, Seller shall deposit an
amount equal to One Hundred Fifty Thousand and No/100 Dollars ($150,000.00)
(the “Escrow Funds”) which
shall be withheld from the Purchase Price payable to Seller and shall be
deposited for a period of one (1) years in an escrow account with the Title
Company pursuant to an escrow agreement reasonably satisfactory in form and
substance to Buyer and Seller (the “Post-Closing
Agreement”), which escrow and Post-Closing Agreement shall be
established and entered into at Closing and shall be a condition to Buyer’s
obligations under this Contract. If no claims have been asserted by Buyer
against Seller, or all such claims have been satisfied, within such 1-year
period, the Escrow Funds deposited by Seller shall be released to Seller. 

ARTICLE IX

CONDITIONS FOR CLOSING

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

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

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

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

                    (d)
[References to Liquor Licenses intentionally
deleted]

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

18

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

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

                    (h)
Buyer and the Manager shall have executed and delivered the New Management
Agreement and Buyer and the Franchisor shall have executed and delivered the
New Franchise Agreement, in each case upon terms and conditions acceptable to
Buyer in its sole and absolute discretion. Buyer shall diligently work to
obtain the New Management Agreement such that the execution and delivery shall
not unreasonably delay Closing, and in any event the New Management Agreement
shall be executed by Closing otherwise Buyer shall waive this condition. 

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

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

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

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

ARTICLE X

CLOSING AND CONVEYANCE

          10.1
Closing. Unless otherwise agreed by Buyer and Seller, the Closing on the
Property shall occur on a date selected by Buyer that is the later of (a)
fifteen (15) business days after expiration of the Review Period or (b) the
date Buyer receives the New Franchise Agreement executed by the Franchisor,
provided in either case that all conditions to Closing by Buyer hereunder have
been satisfied. The date on which the Closing is to occur as provided in this
Section 10.1, or such other date as may be agreed upon by Buyer and Seller, is
referred to in 

19

this Contract
as the “Closing Date” for the
Property. The Closing shall be held via escrow at the offices of the Title
Company, or as otherwise determined by Buyer and Seller. 

          10.2
Deliveries of Seller. At Closing, Seller shall deliver to Buyer the
following, and, as appropriate, all instruments shall be properly executed and
conveyance instruments to be acknowledged in recordable form (the terms,
provisions and conditions of all instruments not attached hereto as Exhibits
shall be mutually agreed upon by Buyer and Seller prior to such Closing): 

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

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

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

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

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

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

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

                    (h)
[References to Vehicle Titles intentionally
deleted]

                    (i)
Authority Documents. Certified copy of resolutions of the Board of
Directors of Seller authorizing the sale of the Property contemplated by this
Contract, and/or other evidence reasonably satisfactory to Buyer and the Title
Company that the person or persons 

20

executing the
closing documents on behalf of Seller have full right, power and authority to
do so, along with a certificate of good standing of Seller from the State in
which the Property is located. 

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

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

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

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

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

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

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

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

ARTICLE XI 

COSTS

          All
Closing costs shall be paid as set forth below: 

          11.1
Seller’s Costs. In connection with the sale of the Property contemplated
under this Contract, Seller shall be responsible for all transfer and
recordation taxes, including, without limitation, all transfer, mansion,
excise, sales, use or bulk transfer taxes or like taxes on or in 

21

connection
with the transfer of the Real Property and the Personal Property constituting
part of the Property pursuant to the Bill of Sale, and all accrued taxes of Seller
prior to Closing and income, sales and use taxes and other such taxes of Seller
attributable to the sale of the Property to Buyer. Seller shall be responsible
for all costs related to the termination of the Existing Management Agreement,
if any. Seller shall also be responsible for any costs and expenses of its
attorneys, accountants, appraisers and other professionals, consultants and
representatives. Seller shall also be responsible for payment of all prepayment
penalties and other amounts payable in connection with the pay-off of any liens
and/or indebtedness encumbering all or any portion of the Property. 

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

ARTICLE XII 

ADJUSTMENTS

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

                    (a)
Taxes. All real estate taxes, personal property taxes, or any other
taxes and special assessments (special or otherwise) of any nature upon the
Property levied, assessed or pending for the calendar year in which the Closing
occurs (including the period prior to Closing, regardless of when due and
payable) shall be prorated as of the Cutoff Time and, if no tax bills or
assessment statements for such calendar year are available, such amounts shall
be estimated on the basis of the best available information for such taxes and
assessments that will be due and payable on the Hotel for the calendar year in
which Closing occurs. Until final tax bills that cover the entire year during
which Closing occurred (such that tax liability can reasonably be determined),
Seller’s obligation to pay its share of taxes shall continue. 

                    (b)
Utilities. All suppliers of utilities shall be instructed to read meters
or otherwise determine the charges owing as of the Closing Date for services
prior thereto, which charges shall be allocated to Seller. Charges accruing
after Closing shall be allocated to Buyer. If elected by Seller, Seller shall
be given credit, and Buyer shall be charged, for any utility deposits
transferred to and received by Buyer at Closing. 

22

                    (c)
Income/Charges. All rents, income and charges receivable or payable
under any Leases and Hotel Contracts applicable to the Property, and any
deposits, prepayments and receipts thereunder, shall be prorated between Buyer
and Seller as of the Cutoff Time. 

                    (d)
Accounts. All working capital accounts, reserve accounts and escrow
accounts (including all FF&E accounts Franchisor escrows, but excluding
amounts held in tax and insurance escrow accounts and utility deposits to the
extent excluded from the definition of Deposits), shall become the property of
Seller, or Seller shall receive a credit at Closing for such accounts
transferred to Buyer. 

                    (e)
Guest Ledger. Subject to (f) below, all accounts receivable of
registered guests at the Hotel who have not checked out and were occupying
rooms as of the Cutoff Time, shall be prorated as provided herein. 

                    (f)
Room Rentals. All receipts from guest room rentals and other suite
revenues for the night in which the Cutoff Time occurs shall be split 50/50
between Buyer and Seller. 

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

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

                    (i)
Accounts Payable. To the extent not apportioned at Closing, any
indebtedness, accounts payable, liabilities or obligations of any kind or
nature related to Seller or the Property for the periods prior to and including
the Closing Date shall be retained by Seller and promptly allocated to Seller
and evidence thereof shall be provided to Buyer, and Buyer shall not be or
become liable therefor, except as expressly assumed by Buyer pursuant to this
Contract, and invoices received in the ordinary course of business prior to
Closing shall be allocated to Seller at Closing. 

                    (j)
Restaurants, Bars, Machines, Other Income. All monies received in
connection with bar, restaurant, banquet and similar and other services at the
Hotel (other than amounts due from any guest and included in room rentals)
prior to the close of business for each such operation for the night in which
the Cutoff Time occurs shall belong to Seller, and all other receipts and
revenues (not previously described in this Section 12.1) from the operation of
any department of the Hotel shall be prorated between Seller and Buyer at
Closing. 

          12.2
Reconciliation and Final Payment. Seller and Buyer shall reasonably
cooperate after Closing to make a final determination of the allocations and
prorations required under this Contract within one hundred eighty (180) days
after the Closing Date; provided, however, failure 

23

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

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

ARTICLE XIII

CASUALTY AND CONDEMNATION

          13.1
Risk of Loss; Notice. Prior to Closing and the delivery of possession of
the Property to Buyer in accordance with this Contract, all risk of loss to the
Property (whether by casualty, condemnation or otherwise) shall be borne by
Seller. In the event that (a) any loss or damage to the Hotel shall occur prior
to the Closing Date as a result of fire or other casualty, or (b) Seller
receives notice that a governmental authority has initiated or threatened to
initiate a condemnation proceeding affecting the Hotel, Seller shall give Buyer
immediate written notice of such loss, damage or condemnation proceeding (which
notice shall include a certification of (i) the amounts of insurance coverages
in effect with respect to the loss or damage and (ii) if known, the amount of
the award to be received in such condemnation). 

          13.2
Buyer’s Termination Right. If, prior to Closing and the delivery of
possession of the Property to Buyer in accordance with this Contract, (a) any
condemnation proceeding shall be pending against a substantial portion of the
Hotel or (b) there is any substantial casualty loss or damage to the Hotel,
Buyer shall have the option to terminate this Contract, provided Buyer delivers
written notice to Seller of its election within twenty (20) days after the date
Seller has delivered Buyer written notice of any such loss, damage or
condemnation as provided above, and in such event, the Earnest Money Deposit,
and any interest thereon, shall be delivered to Buyer and thereafter, except as
expressly set forth herein, no party shall have any further obligation or
liability to the other under this Contract. In the context of condemnation,
“substantial” shall mean condemnation of such portion of a Hotel (or access
thereto) as could, in Buyer’s reasonable judgment, render use of the remainder
impractical or unfeasible for the uses herein contemplated, and, in the context
of casualty loss or damage, “substantial” shall mean a loss or damage in excess
of One Hundred Thousand and No/100 Dollars ($100,000.00) in value. 

24

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

ARTICLE XIV 

DEFAULT REMEDIES

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

          14.2
Seller Default. If Seller defaults under this Contract, and such default
continues for thirty (30) days following written notice from Buyer, Buyer may
elect, as Buyer’s sole and exclusive remedy, either (i) to terminate this
Contract by written notice to Seller delivered to that Seller at any time prior
to the completion of such cure, in which event the Earnest Money Deposit,
including any interest thereon, shall be returned to the Buyer, Seller shall
reimburse Buyer for Buyer’s actual and verifiable due diligence costs and
expenses (not to exceed $75,000) and thereafter both the Buyer and Seller shall
thereupon be released from all obligations with respect to this Contract,
except as otherwise expressly provided herein; or (ii) to treat this Contract
as being in full force and effect by written notice to Seller delivered to
Seller at any time prior to the completion of such cure, in which event the
Buyer shall have the right to an action against the defaulting Seller for
damages, specific performance and all other rights and remedies available at
law or in equity. 

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

ARTICLE XV 

NOTICES

          All
notices required herein shall be deemed to have been validly given, as
applicable: (i) if given by fax, when the fax is transmitted to the party’s fax
number specified below and confirmation of complete receipt is received by the
transmitting party during normal business hours or on the next Business Day if
not confirmed during normal business hours, (ii) if hand 

25

delivered to a
party against receipted copy, when the copy of the notice is receipted or
rejected, (iii) if given by certified mail, return receipt requested, postage
prepaid, two (2) Business Days after it is posted with the U.S. Postal Service
at the address of the party specified below or (iv) on the next delivery day
after such notices are sent by recognized and reputable commercial overnight
delivery service marked for next day delivery, return receipt requested or
similarly acknowledged: 

	
  

 	
  

 
	
 If to Buyer:

 	
 Apple Ten
 Hospitality Ownership, Inc.

 
	
  

 	
 814 E. Main
 Street

 
	
  

 	
 Richmond,
 Virginia 23219

 
	
  

 	
 Attention:
 Sam Reynolds

 
	
  

 	
 Fax No.:
 (804) 344-8129

 
	
  

 	
  

 
	
 with a copy
 to:

 	
 Apple REIT
 Ten, Inc.

 
	
  

 	
 814 E. Main
 Street

 
	
  

 	
 Richmond,
 Virginia 23219

 
	
  

 	
 Attention:
 Legal Dept.

 
	
  

 	
 Fax No.:
 (804) 727-6349

 
	
  

 	
  

 
	
 If to
 Seller:

 	
 Krishna
 Hotel, Inc.

 
	
  

 	
 CN Hotels

 
	
  

 	
 2011 Veasley
 Street

 
	
  

 	
 Greensboro,
 NC 27407

 
	
  

 	
 Attention:
 Jayesh Patel

 
	
  

 	
 Fax No.:
 (336) 855-0078

 
	
  

 	
  

 
	
 with a copy
 to:

 	
 Allman Spry
 Leggett & Crumpler, P.A.

 
	
  

 	
 380
 Knollwood St., Suite 700

 
	
  

 	
 Winston-Salem,
 NC 27103-1862

 
	
  

 	
 Attn: Donald
 M. VonCannon

 
	
  

 	
 Fax No.:
 (336) 721-0414

 

          Addresses
may be changed by the parties hereto by written notice in accordance with this
Section. 

ARTICLE XVI 

MISCELLANEOUS

          16.1
Performance. Time is of the essence in the performance and satisfaction
of each and every obligation and condition of this Contract. 

          16.2
Binding Effect; Assignment. This Contract shall be binding upon and
shall inure to the benefit of each of the parties hereto, their respective
successors and assigns. 

26

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

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

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

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

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

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

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

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

27

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

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

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

[Signatures Begin on Following Page]

28

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

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 SELLER:

 
	
  

 	
  

 
	
  

 	
 KRISHNA
 HOTEL, INC., a Virginia corporation

 
	
  

 	
  

 
	
  

 	
 By: /s/
 Jayesh N. Patel

 
	
  

 	
  

 	

 

 	
  

 
	
  

 	
 Name: Jayesh
 N. Patel

 
	
  

 	
 Title: Vice
 President

 
	
  

 	
  

 
	
  

 	
 BUYER:

 
	
  

 	
  

 
	
  

 	
 APPLE TEN
 HOSPITALITY OWNERSHIP, INC.,

 
	
  

 	
 a Virginia
 corporation

 
	
  

 	
  

 
	
  

 	
 By: /s/
 David Buckley

 
	
  

 	
  

 	

 

 	
  

 
	
  

 	
 Name: David
 Buckley

 
	
  

 	
 Title: Vice
 President

 

29

EXHIBIT “A”

LEGAL DESCRIPTION OF LAND

          ALL that certain tract or parcel of real
estate, together with all the improvements thereon, and all the privileges and
appurtenances thereto belonging, situate in the Town of Wytheville Wythe
County, Virginia, more particularly bounded and described as follows, to-wit:

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 BEGINNING at a point in the southern right of way line of a 50 foot
 public right of way; thence leaving said right of way line S 21° 02’ 36” E
 166.23 feet to a point; thence S 21 ° 02’ 36” E 461.03 feet to a point;
 thence S 69° 02’ 11” W 201.14 feet to a point in the eastern line of a
 variable width public right of way; thence continuing with said right of way
 line N 21 ° 02’ 36” W 559.31 feet to a point; thence continuing with said
 right of way line along a curve having a chord of N 23° 57’24” E, an arc
 length of 43.98 feet and a radius of 28,00 feet to a point in the line of a
 50 foot right of way; thence continuing with said right of way line N 68° 57’
 24” E 173.14 feet to the point of BEGINNING, and being LOT 1, containing 2.124
 acres, according to a survey and plat by Koontz-Bryant, P.C., of record in
 the Wythe County Clerk’s Office in Plat Book 11, page 697, bearing the
 following legend, to-wit:

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
  “PEPPERS FERRY CROSSING 

 	
  

 
	
  

 	
 TOWN OF WYTHEVILLE, VIRGINIA

 	
  

 
	
  

 	
 DATE: MAY 31, 2007      SCALE: 1” = 100’

 	
  

 
	
  

 	
 Koontz-Bryant, P.C. 

 	
  

 
	
  

 	
 Site Development Solutions

 	
  

 
	
  

 	
 1703 N. Parham Road, Suite 202, Richmond, Virginia 23229

 	
  

 
	
  

 	
 (804)740-9200 kbpc@koontzbryant.com FAX (804)740-7338”

 	
  

 
	
  

 	
  

 	
  

 
	
           BEING the same property conveyed by Jay Laxmi,
 LLC, to Krishna Hotel, Inc., by Deed dated September 7, 2007, intended to be
 recorded immediately prior to this Deed of Trust.

 

EXHIBIT
B

LIST OF FF&E

Hotel Name: Fairfield Inn & Suites Wytheville

Guest Room Type: Queen - Queen Room

Total Guest Room Count for This Room
Type 32

	
 

 	
 

 	
 

 	
 

 
	
  

 	
Item 

 	
Qty. 

 	
Notes 

 
	
  

 	

	

	

	
1 

 	
Queen Mattress 

 	
2 

 	
  

 
	
2 

 	
Queen Box Spring 

 	
2 

 	
  

 
	
3 

 	
Dresser 

 	
1 

 	
  

 
	
4 

 	
Desk 

 	
1 

 	
  

 
	
5 

 	
Night Stand 

 	
2 

 	
  

 
	
6 

 	
Floor Lamp 

 	
1 

 	
  

 
	
7 

 	
Desk Chair 

 	
1 

 	
  

 
	
8 

 	
Microwave 

 	
1 

 	
  

 
	
9 

 	
Refrigerator 

 	
1 

 	
  

 
	
10 

 	
Night Stand Lamp 

 	
1 

 	
  

 
	
11 

 	
Hangers 

 	
6 

 	
  

 
	
12 

 	
Ironing Board 

 	
1 

 	
  

 
	
13 

 	
Iron 

 	
1 

 	
  

 
	
14 

 	
Television 

 	
1 

 	
  

 
	
15 

 	
Remote 

 	
1 

 	
  

 
	
16 

 	
Headboard 

 	
2 

 	
  

 
	
17 

 	
Desk Lamp 

 	
1 

 	
  

 
	
18 

 	
Internet Connector 

 	
1 

 	
  

 
	
19 

 	
Guest Room Directory 

 	
1 

 	
  

 
	
20 

 	
Bathroom Mirror 

 	
1 

 	
  

 
	
21 

 	
Bedroom Mirror 

 	
1 

 	
  

 
	
22 

 	
Queen Bed Frame 

 	
2 

 	
  

 
	
23 

 	
Soap/Shampoo Holder 

 	
1 

 	
  

 
	
24 

 	
Green vase 

 	
1 

 	
  

 
	
25 

 	
Trash Cans 

 	
2 

 	
  

 
	
26 

 	
Chair 

 	
1 

 	
  

 
	
27 

 	
Coffee Maker 

 	
1 

 	
  

 
	
28 

 	
Black Tray 

 	
2 

 	
  

 
	
30 

 	
Luggage Rack 

 	
1 

 	
  

 
	
31 

 	
Alarm Clock 

 	
1 

 	
  

 
	
32 

 	
Curtains 

 	
2 

 	
  

 
	
33 

 	
Sheers 

 	
2 

 	
  

 
	
34 

 	
Blackout Drapes 

 	
2 

 	
  

 
	
35 

 	
HVAC Unit 

 	
1 

 	
  

 
	
36 

 	
Phone 

 	
2 

 	
  

 
	
37 

 	
Bible 

 	
1 

 	
  

 

2

	
 

 	
 

 	
 

 	
 

 
	
38 

 	
Book Of Mormon 

 	
1 

 	
  

 
	
39 

 	
Towel Rack 

 	
1 

 	
  

 
	
40 

 	
Toilet 

 	
1 

 	
  

 
	
41 

 	
Tub 

 	
1 

 	
  

 
	
42 

 	
Ice Bucket Liner 

 	
1 

 	
  

 
	
43 

 	
Ice Bucket 

 	
1 

 	
  

 
	
44 

 	
Ice Bucket Lid 

 	
1 

 	
  

 
	
45 

 	
Sink 

 	
1 

 	
  

 
	
46 

 	
Shower Head 

 	
1 

 	
  

 
	
47 

 	
Shower Curtain 

 	
1 

 	
  

 
	
48 

 	
Shower Curtain Liner 

 	
1 

 	
  

 
	
49 

 	
Shower Curtain Hooks 

 	
12 

 	
  

 
	
50 

 	
Toilet Seat 

 	
1 

 	
  

 
	
51 

 	
Closet Shelf 

 	
1 

 	
  

 
	
52 

 	
Faucet 

 	
1 

 	
  

 
	
53 

 	
Bathroom Picture 

 	
1 

 	
  

 
	
54 

 	
Bath Room Counter 

 	
1 

 	
  

 

3

Hotel
Name: Fairfield Inn & Suites Wytheville

Guest Room Type: Queen / Queen
Suite Room

Total Guest Room Count for This Room Type 4

	
 

 	
 

 	
 

 	
 

 
	
  

 	
Item 

 	
Qty. 

 	
Notes 

 
	
   

 	

	

	

	
1 

 	
Queen Mattress 

 	
2 

 	
  

 
	
2 

 	
Queen Box Spring 

 	
2 

 	
  

 
	
3 

 	
Dresser 

 	
1 

 	
  

 
	
4 

 	
Desk 

 	
1 

 	
  

 
	
5 

 	
Night Stand 

 	
1 

 	
  

 
	
6 

 	
Floor Lamp 

 	
2 

 	
  

 
	
7 

 	
Desk Chair 

 	
1 

 	
  

 
	
8 

 	
Microwave 

 	
1 

 	
  

 
	
9 

 	
Refrigerator 

 	
1 

 	
  

 
	
10 

 	
Night Stand Lamp 

 	
1 

 	
  

 
	
11 

 	
Hangers 

 	
6 

 	
  

 
	
12 

 	
Ironing Board 

 	
1 

 	
  

 
	
13 

 	
Iron 

 	
1 

 	
  

 
	
14 

 	
Television 

 	
2 

 	
  

 
	
15 

 	
Remote 

 	
2 

 	
  

 
	
16 

 	
Headboard 

 	
2 

 	
  

 
	
17 

 	
Desk Lamp 

 	
1 

 	
  

 
	
18 

 	
Internet Connector 

 	
1 

 	
  

 
	
19 

 	
Guest Room Directory 

 	
1 

 	
  

 
	
20 

 	
Bathroom Mirror 

 	
1 

 	
  

 
	
21 

 	
Bedroom Mirror 

 	
1 

 	
  

 
	
22 

 	
Queen Bed Frame 

 	
2 

 	
  

 
	
23 

 	
Soap/Shampoo Holder 

 	
1 

 	
  

 
	
24 

 	
Green vase 

 	
1 

 	
  

 
	
25 

 	
Trash Cans 

 	
2 

 	
  

 
	
26 

 	
Chair 

 	
1 

 	
  

 
	
27 

 	
Coffee Maker 

 	
1 

 	
  

 
	
28 

 	
Black Tray 

 	
2 

 	
  

 
	
29 

 	
Orange Bench 

 	
1 

 	
  

 
	
30 

 	
Luggage Rack 

 	
1 

 	
  

 
	
31 

 	
Alarm Clock 

 	
1 

 	
  

 
	
32 

 	
Curtains 

 	
2 

 	
  

 
	
33 

 	
Sheers 

 	
2 

 	
  

 
	
34 

 	
Blackout Drapes 

 	
2 

 	
  

 
	
35 

 	
HVAC Unit 

 	
1 

 	
  

 
	
36 

 	
Phone 

 	
2 

 	
  

 

4

	
 

 	
 

 	
 

 	
 

 
	
37 

 	
Bible 

 	
1 

 	
  

 
	
38 

 	
Book Of Mormon 

 	
1 

 	
  

 
	
39 

 	
Towel Rack 

 	
1 

 	
  

 
	
40 

 	
Toilet 

 	
1 

 	
  

 
	
41 

 	
Tub 

 	
1 

 	
  

 
	
42 

 	
Ice Bucket Liner 

 	
1 

 	
  

 
	
43 

 	
Ice Bucket 

 	
1 

 	
  

 
	
44 

 	
Ice Bucket Lid 

 	
1 

 	
  

 
	
45 

 	
Sink 

 	
1 

 	
  

 
	
46 

 	
Shower Head 

 	
1 

 	
  

 
	
47 

 	
Shower Curtain 

 	
1 

 	
  

 
	
48 

 	
Shower Curtain Liner 

 	
1 

 	
  

 
	
49 

 	
Shower Curtain Hooks 

 	
12 

 	
  

 
	
50 

 	
Toilet Seat 

 	
1 

 	
  

 
	
51 

 	
Closet Shelf 

 	
1 

 	
  

 
	
52 

 	
Faucet 

 	
1 

 	
  

 
	
53 

 	
Bathroom Picture 

 	
1 

 	
  

 
	
54 

 	
I - Home Dock 

 	
1 

 	
  

 
	
55 

 	
I - Home Dock Remote 

 	
1 

 	
  

 
	
56 

 	
Stacking Table 

 	
1 

 	
  

 
	
57 

 	
Vase 

 	
2 

 	
  

 
	
58 

 	
Sofa 

 	
1 

 	
  

 
	
59 

 	
  

 	
  

 	
  

 
	
60 

 	
  

 	
  

 	
  

 
	
61 

 	
  

 	
  

 	
  

 
	
62 

 	
  

 	
  

 	
  

 
	
63 

 	
  

 	
  

 	
  

 
	
64 

 	
  

 	
  

 	
  

 
	
65 

 	
  

 	
  

 	
  

 
	
66 

 	
  

 	
  

 	
  

 
	
67 

 	
  

 	
  

 	
  

 
	
68 

 	
  

 	
  

 	
  

 
	
69 

 	
  

 	
  

 	
  

 
	
70 

 	
  

 	
  

 	
  

 
	
71 

 	
  

 	
  

 	
  

 
	
72 

 	
  

 	
  

 	
  

 

5

Hotel Name:
Fairfield Inn & Suites Wytheville

Guest Room Type: King Room

Total Guest Room Count for This Room
Type 25

	
 

 	
 

 	
 

 	
 

 
	
  

 	
Item 

 	
Qty. 

 	
Notes 

 
	
   

 	

	

	

	
1 

 	
King Mattress 

 	
1 

 	
  

 
	
2 

 	
King Box Spring 

 	
1 

 	
  

 
	
3 

 	
Dresser 

 	
1 

 	
  

 
	
4 

 	
Desk 

 	
1 

 	
  

 
	
5 

 	
Night Stand 

 	
2 

 	
  

 
	
6 

 	
Floor Lamp 

 	
1 

 	
  

 
	
7 

 	
Desk Chair 

 	
1 

 	
  

 
	
8 

 	
Microwave 

 	
1 

 	
  

 
	
9 

 	
Refrigerator 

 	
1 

 	
  

 
	
10 

 	
Night Stand Lamp 

 	
2 

 	
  

 
	
11 

 	
Hangers 

 	
6 

 	
  

 
	
12 

 	
Ironing Board 

 	
1 

 	
  

 
	
13 

 	
Iron 

 	
1 

 	
  

 
	
14 

 	
Television 

 	
1 

 	
  

 
	
15 

 	
Remote 

 	
1 

 	
  

 
	
16 

 	
Headboard 

 	
1 

 	
  

 
	
17 

 	
Desk Lamp 

 	
1 

 	
  

 
	
18 

 	
Internet Connector 

 	
1 

 	
  

 
	
19 

 	
Guest Room Directory 

 	
1 

 	
  

 
	
20 

 	
Bathroom Mirror 

 	
1 

 	
  

 
	
21 

 	
Bedroom Mirror 

 	
1 

 	
  

 
	
22 

 	
King Bed Frame 

 	
1 

 	
  

 
	
23 

 	
Soap/Shampoo Holder 

 	
1 

 	
  

 
	
24 

 	
Green vase 

 	
1 

 	
  

 
	
25 

 	
Trash Cans 

 	
2 

 	
  

 
	
26 

 	
Chair 

 	
1 

 	
  

 
	
27 

 	
Coffee Maker 

 	
1 

 	
  

 
	
28 

 	
Black Tray 

 	
2 

 	
  

 
	
29 

 	
Orange Bench 

 	
1 

 	
  

 
	
30 

 	
Luggage Rack 

 	
1 

 	
  

 
	
31 

 	
Alarm Clock 

 	
1 

 	
  

 
	
32 

 	
Curtains 

 	
2 

 	
  

 
	
33 

 	
Sheers 

 	
2 

 	
  

 
	
34 

 	
Blackout Drapes 

 	
2 

 	
  

 
	
35 

 	
HVAC Unit 

 	
1 

 	
  

 
	
36 

 	
Phone 

 	
2 

 	
  

 

6

	
 

 	
 

 	
 

 	
 

 
	
37 

 	
Bible 

 	
1 

 	
  

 
	
38 

 	
Book Of Mormon 

 	
1 

 	
  

 
	
39 

 	
Towel Rack 

 	
1 

 	
  

 
	
40 

 	
Toilet 

 	
1 

 	
  

 
	
41 

 	
Tub 

 	
1 

 	
  

 
	
42 

 	
Ice Bucket Liner 

 	
1 

 	
  

 
	
43 

 	
Ice Bucket 

 	
1 

 	
  

 
	
44 

 	
Ice Bucket Lid 

 	
1 

 	
  

 
	
45 

 	
Sink 

 	
1 

 	
  

 
	
46 

 	
Shower Head 

 	
1 

 	
  

 
	
47 

 	
Shower Curtain 

 	
1 

 	
  

 
	
48 

 	
Shower Curtain Liner 

 	
1 

 	
  

 
	
49 

 	
Shower Curtain Hooks 

 	
12 

 	
  

 
	
50 

 	
Toilet Seat 

 	
1 

 	
  

 
	
51 

 	
Closet Shelf 

 	
1 

 	
  

 
	
52 

 	
Faucet 

 	
1 

 	
  

 
	
53 

 	
Bathroom Picture 

 	
1 

 	
  

 
	
54 

 	
Bath Room Counter 

 	
1 

 	
  

 

7

Hotel
Name: Fairfield Inn & Suites Wytheville

Guest Room Type: King Suite Room

Total Guest Room Count for This Room Type 17

	
 

 	
 

 	
 

 	
 

 
	
  

 	
Item 

 	
Qty. 

 	
Notes 

 
	
   

 	

	

	

	
1 

 	
King Mattress 

 	
1 

 	
  

 
	
2 

 	
King Box Spring 

 	
1 

 	
  

 
	
3 

 	
Dresser 

 	
1 

 	
  

 
	
4 

 	
Desk 

 	
1 

 	
  

 
	
5 

 	
Night Stand 

 	
1 

 	
  

 
	
6 

 	
Floor Lamp 

 	
2 

 	
  

 
	
7 

 	
Desk Chair 

 	
1 

 	
  

 
	
8 

 	
Microwave 

 	
1 

 	
  

 
	
9 

 	
Refrigerator 

 	
1 

 	
  

 
	
10 

 	
Night Stand Lamp 

 	
1 

 	
  

 
	
11 

 	
Hangers 

 	
6 

 	
  

 
	
12 

 	
Ironing Board 

 	
1 

 	
  

 
	
13 

 	
Iron 

 	
1 

 	
  

 
	
14 

 	
Television 

 	
2 

 	
  

 
	
15 

 	
Remote 

 	
2 

 	
  

 
	
16 

 	
Headboard 

 	
1 

 	
  

 
	
17 

 	
Desk Lamp 

 	
1 

 	
  

 
	
18 

 	
Internet Connector 

 	
1 

 	
  

 
	
19 

 	
Guest Room Directory 

 	
1 

 	
  

 
	
20 

 	
Bathroom Mirror 

 	
1 

 	
  

 
	
21 

 	
Bedroom Mirror 

 	
1 

 	
  

 
	
22 

 	
King Bed Frame 

 	
1 

 	
  

 
	
23 

 	
Soap/Shampoo Holder 

 	
1 

 	
  

 
	
24 

 	
Green vase 

 	
1 

 	
  

 
	
25 

 	
Trash Cans 

 	
2 

 	
  

 
	
26 

 	
Chair 

 	
1 

 	
  

 
	
27 

 	
Coffee Maker 

 	
1 

 	
  

 
	
28 

 	
Black Tray 

 	
2 

 	
  

 
	
29 

 	
Orange Bench 

 	
1 

 	
  

 
	
30 

 	
Luggage Rack 

 	
1 

 	
  

 
	
31 

 	
Alarm Clock 

 	
1 

 	
  

 
	
32 

 	
Curtains 

 	
2 

 	
  

 
	
33 

 	
Sheers 

 	
2 

 	
  

 
	
34 

 	
Blackout Drapes 

 	
2 

 	
  

 
	
35 

 	
HVAC Unit 

 	
1 

 	
  

 
	
36 

 	
Phone 

 	
2 

 	
  

 

8

	
 

 	
 

 	
 

 	
 

 
	
37 

 	
Bible 

 	
1 

 	
  

 
	
38 

 	
Book Of Mormon 

 	
1 

 	
  

 
	
39 

 	
Towel Rack 

 	
1 

 	
  

 
	
40 

 	
Toilet 

 	
1 

 	
  

 
	
41 

 	
Tub 

 	
1 

 	
  

 
	
42 

 	
Ice Bucket Liner 

 	
1 

 	
  

 
	
43 

 	
Ice Bucket 

 	
1 

 	
  

 
	
44 

 	
Ice Bucket Lid 

 	
1 

 	
  

 
	
45 

 	
Sink 

 	
1 

 	
  

 
	
46 

 	
Shower Head 

 	
1 

 	
  

 
	
47 

 	
Shower Curtain 

 	
1 

 	
  

 
	
48 

 	
Shower Curtain Liner 

 	
1 

 	
  

 
	
49 

 	
Shower Curtain Hooks 

 	
12 

 	
  

 
	
50 

 	
Toilet Seat 

 	
1 

 	
  

 
	
51 

 	
Closet Shelf 

 	
1 

 	
  

 
	
52 

 	
Faucet 

 	
1 

 	
  

 
	
53 

 	
Bathroom Picture 

 	
1 

 	
  

 
	
54 

 	
I Home Dock 

 	
1 

 	
  

 
	
55 

 	
I Home Dock Remote 

 	
1 

 	
  

 
	
56 

 	
Stacking Table 

 	
1 

 	
  

 
	
57 

 	
Vase 

 	
2 

 	
  

 
	
58 

 	
Sofa 

 	
1 

 	
  

 
	
59 

 	
  

 	
  

 	
  

 
	
60 

 	
  

 	
  

 	
  

 
	
61 

 	
  

 	
  

 	
  

 
	
62 

 	
  

 	
  

 	
  

 
	
63 

 	
  

 	
  

 	
  

 
	
64 

 	
  

 	
  

 	
  

 
	
65 

 	
  

 	
  

 	
  

 
	
66 

 	
  

 	
  

 	
  

 
	
67 

 	
  

 	
  

 	
  

 
	
68 

 	
  

 	
  

 	
  

 
	
69 

 	
  

 	
  

 	
  

 
	
70 

 	
  

 	
  

 	
  

 
	
71 

 	
  

 	
  

 	
  

 
	
72 

 	
  

 	
  

 	
  

 

9

Hotel
Name: Fairfield Inn & Suites Wytheville

Guest Room Type: King Spa Room

Total Guest Room Count for This Room
Type 2

	
 

 	
 

 	
 

 	
 

 
	
  

 	
Item 

 	
Qty. 

 	
Notes 

 
	
   

 	

	

	

	
1 

 	
King Mattress 

 	
1 

 	
  

 
	
2 

 	
King Box Spring 

 	
1 

 	
  

 
	
3 

 	
Dresser 

 	
1 

 	
  

 
	
4 

 	
Desk 

 	
1 

 	
  

 
	
5 

 	
Night Stand 

 	
2 

 	
  

 
	
6 

 	
Floor Lamp 

 	
1 

 	
  

 
	
7 

 	
Desk Chair 

 	
1 

 	
  

 
	
8 

 	
Microwave 

 	
1 

 	
  

 
	
9 

 	
Refrigerator 

 	
1 

 	
  

 
	
10 

 	
Night Stand Lamp 

 	
2 

 	
  

 
	
11 

 	
Hangers 

 	
6 

 	
  

 
	
12 

 	
Ironing Board 

 	
1 

 	
  

 
	
13 

 	
Iron 

 	
1 

 	
  

 
	
14 

 	
Television 

 	
1 

 	
  

 
	
15 

 	
Remote 

 	
1 

 	
  

 
	
16 

 	
Headboard 

 	
1 

 	
  

 
	
17 

 	
Desk Lamp 

 	
1 

 	
  

 
	
18 

 	
Internet Connector 

 	
1 

 	
  

 
	
19 

 	
Guest Room Directory 

 	
1 

 	
  

 
	
20 

 	
Bathroom Mirror 

 	
1 

 	
  

 
	
21 

 	
Bedroom Mirror 

 	
1 

 	
  

 
	
22 

 	
King Bed Frame 

 	
1 

 	
  

 
	
23 

 	
Soap/Shampoo Holder 

 	
1 

 	
  

 
	
24 

 	
Green Vase 

 	
1 

 	
  

 
	
25 

 	
Trash Cans 

 	
2 

 	
  

 
	
26 

 	
Chair 

 	
1 

 	
  

 
	
27 

 	
Coffee Maker 

 	
1 

 	
  

 
	
28 

 	
Black Tray 

 	
2 

 	
  

 
	
29 

 	
Orange Bench 

 	
1 

 	
  

 
	
30 

 	
Luggage Rack 

 	
1 

 	
  

 
	
31 

 	
Alarm Clock 

 	
1 

 	
  

 
	
32 

 	
Curtains 

 	
2 

 	
  

 
	
33 

 	
Sheers 

 	
2 

 	
  

 
	
34 

 	
Blackout Drapes 

 	
2 

 	
  

 
	
35 

 	
HVAC Unit 

 	
1 

 	
  

 
	
36 

 	
Phone 

 	
2 

 	
  

 

10

	
 

 	
 

 	
 

 	
 

 
	
37 

 	
Bible 

 	
1 

 	
  

 
	
38 

 	
Book Of Mormon 

 	
1 

 	
  

 
	
39 

 	
Towel Rack 

 	
1 

 	
  

 
	
40 

 	
Toilet 

 	
1 

 	
  

 
	
41 

 	
Tub 

 	
1 

 	
  

 
	
42 

 	
Ice Bucket Liner 

 	
1 

 	
  

 
	
43 

 	
Ice Bucket 

 	
1 

 	
  

 
	
44 

 	
Ice Bucket Lid 

 	
1 

 	
  

 
	
45 

 	
Sink 

 	
1 

 	
  

 
	
46 

 	
Shower Head 

 	
1 

 	
  

 
	
47 

 	
Shower Curtain 

 	
1 

 	
  

 
	
48 

 	
Shower Curtain Liner 

 	
1 

 	
  

 
	
49 

 	
Shower Curtain Hooks 

 	
12 

 	
  

 
	
50 

 	
Toilet Seat 

 	
1 

 	
  

 
	
51 

 	
Closet Shelf 

 	
1 

 	
  

 
	
52 

 	
Faucet 

 	
1 

 	
  

 
	
53 

 	
Bathroom Picture 

 	
1 

 	
  

 
	
54 

 	
Stand Up Shower 

 	
1 

 	
  

 
	
55 

 	
Spa Tub 

 	
1 

 	
  

 
	
56  

 	
Bath Room Counter 

 	
1 

 	
  

 

11

EXHIBIT C

LIST OF HOTEL CONTRACTS

	
  

 	
  

 
	
 •

 	
 Elevator Contract (Otis
 Elevator) 

 
	
  

 	
  

 
	
 •

 	
 Telephone Contract (Shentel) 

 
	
  

 	
  

 
	
 •

 	
 Cable (Shentel) 

 
	
  

 	
  

 
	
 •

 	
 Billboard #1 Contract (M&M
 Consulting Service) 

 
	
  

 	
  

 
	
 •

 	
 Billboard #2 Contract (Lamar
 Company) 

 
	
  

 	
  

 
	
 •

 	
 Music On Hold Service Contract
 (BCS Communications) 

 
	
  

 	
  

 
	
 •

 	
 Yellow Page Advertising Contract
 (DEX) 

 
	
  

 	
  

 
	
 •

 	
 Landscaping Contract (Litton
 Landscape) 

 

12

EXHIBIT D

CONSENTS AND APPROVALS

	
  

 	
  

 
	
 A.

 	
 Consents
 Under Hotel Contracts - NONE 

 
	
  

 	
  

 
	
 B.

 	
 Consents
 Under Other Contracts - NONE 

 
	
  

 	
  

 
	
 C.

 	
 Governmental
 Approvals and Consents - NONE 

 

EXHIBIT E

ENVIRONMENTAL REPORTS

Phase I
Environmental Site Assessment Report, Project No. 12-5917, dated January 31,
2011, prepared by ECS Mid-Atlantic, LLC 

EXHIBIT F

CLAIMS OR LITIGATION PENDING

NONE

-i-

EXHIBIT G

ESCROW AGREEMENT

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

R E C I T A L S

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

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

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

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

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

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

                              B.
If at any time after the expiration of the Review Period, Buyer claims
entitlement to all or any portion of the Deposit, Buyer shall give written
notice to Escrow Agent stating that Seller has defaulted in the performance of
its obligations under the Contract beyond the applicable grace period, if any,
or that Buyer is otherwise entitled to the return of the Deposit or applicable
portion thereof and shall direct Escrow Agent to return the Deposit or
applicable portion thereof to Buyer (the “Buyer’s
Notice”). Escrow Agent shall promptly deliver a copy of Buyer’s
Notice to Seller. Seller shall have ten (10) business days after receipt 

-ii-

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

                               C.
If, at any time after the expiration of the Review Period, Seller claims
entitlement to the Deposit or applicable portion thereof, Seller shall give
written notice to Escrow Agent stating that Buyer has defaulted in the
performance of its obligations under the Contract, and shall direct Escrow
Agent to release the Deposit or applicable portion thereof to Seller (the “Seller’s Notice”). Escrow Agent shall
promptly deliver a copy of Seller’s Notice to Buyer. Buyer shall have ten (10)
business days after receipt of the copy of Seller’s Notice to deliver written
notice to Escrow Agent and Seller objecting to the release of the Deposit or
applicable portion thereof to Seller (“Buyer’s
Objection Notice”). If Escrow Agent does not receive a timely
Buyer’s Objection Notice, Escrow Agent shall release the Deposit or applicable
portion thereof to Seller. If Escrow Agent does receive a timely Seller’s
Objection Notice, Escrow Agent shall release the Deposit or applicable portion
thereof only upon receipt of, and in accordance with, written instructions signed
by Buyer and Seller, or the final order of a court of competent jurisdiction. 

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

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

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

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

-iii-

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

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

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

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

	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 If addressed
 to Seller or Indemnitor, to: 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Krishna
 Hotel, Inc. 

 
	
  

 	
  

 	
 c/o CN
 Hotels 

 
	
  

 	
  

 	
 2011 Veasley
 Street 

 
	
  

 	
  

 	
 Greensboro,
 NC 27407 

 
	
  

 	
  

 	
 Attention: 

 
	
  

 	
  

 	
 Fax No.:
 (336) 855-0078 

 

-iv-

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 with a copy
 to: 

 
	
  

 
	
  

 	
  

 	
 Allman Spry
 Leggett & Crumpler, P.A.

 
	
  

 	
  

 	
 380
 Knollwood St., Suite 700 

 
	
  

 	
  

 	
 Winston-Salem,
 NC 27103-1862 

 
	
  

 	
  

 	
  

 
	
  

 	
 (ii)

 	
 If addressed
 to Buyer, to:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Apple Ten
 Hospitality Ownership, Inc.

 
	
  

 	
  

 	
 814 E. Main
 Street

 
	
  

 	
  

 	
 Richmond,
 Virginia 23219

 
	
  

 	
  

 	
 Attn: 

 
	
  

 	
  

 	
 Fax No.:
 (804) 344-8129 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 with a copy
 to: 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Apple REIT
 Ten, Inc.

 
	
  

 	
  

 	
 814 E. Main
 Street 

 
	
  

 	
  

 	
 Richmond,
 Virginia 23219 

 
	
  

 	
  

 	
 Attn: Legal
 Dept. 

 
	
  

 	
  

 	
 Fax No.:
 (804) 727-6349 

 
	
  

 	
  

 	
  

 
	
  

 	
 (iii)

 	
 If addressed
 to Escrow Agent, to: 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Chicago
 Title Company 

 
	
  

 	
  

 	
 5501 LBJ
 Freeway, Suite 200 

 
	
  

 	
  

 	
 Dallas,
 Texas 75240 

 
	
  

 	
  

 	
 Attn: Debby
 Moore 

 
	
  

 	
  

 	
 Fax No.:
 (214) 570-0210 

 

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

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

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

-v-

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

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 SELLER:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 KRISHNA
 HOTEL, INC.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 By:

 	
  

 
	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Title:

 	
  

 
	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 BUYER:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 APPLE TEN
 HOSPITALITY OWNERSHIP, INC.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 By:

 	
  

 
	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Title:

 	
  

 
	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 ESCROW AGENT:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 CHICAGO
 TITLE COMPANY

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 By:

 	
  

 
	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Title:

 	
  

 
	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 

-vi-

SCHEDULE 3.1

DUE DILIGENCE LIST

Due Diligence

Documents Required

[electronic versions preferred]

Property Name:

Date Opened:

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 Date

 Sent

 	
  

 	
 Comments

 
	
  

 	
  

 	
  

 	
  

 	

 

 	
  

 	

 

 
	
 1

 	
  

 	
 Y-T-D
 Detailed Operating Statements

 	
  

 	
  

 	
  

 	
  

 
	
 2

 	
  

 	
 Prior 5
 Years Detailed P&L’s by month

 	
  

 	
  

 	
  

 	
  

 
	
 3

 	
  

 	
 2011
 Detailed Budget (Operating)

 	
  

 	
  

 	
  

 	
  

 
	
 4

 	
  

 	
 2011 Budget
 (Capital Expenditures)

 	
  

 	
  

 	
  

 	
  

 
	
 5

 	
  

 	
 STAR Report
 (previous 5 years)

 	
  

 	
  

 	
  

 	
  

 
	
 6

 	
  

 	
 2011
 Marketing Plan

 	
  

 	
  

 	
  

 	
  

 
	
 7

 	
  

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

 	
  

 	
  

 	
  

 	
  

 
	
 8

 	
  

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

 	
  

 	
  

 	
  

 	
  

 
	
 9

 	
  

 	
 Real Estate
 Tax Bills (last 2 years)

 	
  

 	
  

 	
  

 	
  

 
	
 10

 	
  

 	
 Personal
 Property Tax Bills (last 2 years)

 	
  

 	
  

 	
  

 	
  

 
	
 11

 	
  

 	
 Notices of
 Current Tax Assessments or Increases

 	
  

 	
  

 	
  

 	
  

 
	
 12

 	
  

 	
 Schedule of
 Insurance Coverage and Claims

 	
  

 	
  

 	
  

 	
  

 
	
 13

 	
  

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

 	
  

 	
  

 	
  

 	
  

 
	
 14

 	
  

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

 	
  

 	
  

 	
  

 	
  

 
	
 15

 	
  

 	
 Copies of
 Service Contracts and Equipment Leases

 	
  

 	
  

 	
  

 	
 There are no
 equipment leases

 
	
 16

 	
  

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

 	
  

 	
  

 	
  

 	
 NONE

 

-vii-

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 Date

 Sent

 	
  

 	
 Comments

 
	
  

 	
  

 	
  

 	
  

 	

 

 	
  

 	

 

 
	
 17

 	
  

 	
 Vehicle
 Title/Leases

 	
  

 	
  

 	
  

 	
 NONE

 
	
 18

 	
  

 	
 Copies and
 Schedules of all Warranties and Guaranties

 	
  

 	
  

 	
  

 	
  

 
	
 19

 	
  

 	
 Existing
 Management Agreement

 	
  

 	
  

 	
  

 	
 NONE

 
	
 20

 	
  

 	
 Existing
 Franchise/License Agreement

 	
  

 	
  

 	
  

 	
  

 
	
 21

 	
  

 	
 Loan
 Documents (Promissory Note, Mortgage, etc.)

 	
  

 	
  

 	
  

 	
  

 
	
 22

 	
  

 	
 Most current
 Franchise Property Improvement Plan or QA Assessment

 	
  

 	
  

 	
  

 	
  

 
	
 23

 	
  

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

 	
  

 	
  

 	
  

 	
 No Liquor
 License

 
	
 24

 	
  

 	
 Certificate
 of Occupancy

 	
  

 	
  

 	
  

 	
  

 
	
 25

 	
  

 	
 Most Recent
 Property Payroll

 	
  

 	
  

 	
  

 	
  

 
	
 26

 	
  

 	
 Copy of
 Employment Contracts, if any

 	
  

 	
  

 	
  

 	
 NONE

 
	
 27

 	
  

 	
 Construction
 docs and Plans & Specs (electronically if available)

 	
  

 	
  

 	
  

 	
  

 
	
 28

 	
  

 	
 Appraisal

 	
  

 	
  

 	
  

 	
  

 
	
 29

 	
  

 	
 Structural
 Engineering Audit

 	
  

 	
  

 	
  

 	
  

 
	
 30

 	
  

 	
 Environmental
 Site Assessment (Phase I)

 	
  

 	
  

 	
  

 	
  

 
	
 31

 	
  

 	
 Property
 Condition Report

 	
  

 	
  

 	
  

 	
  

 
	
 32

 	
  

 	
 Schedule of
 Utility Providers and Utility Deposits

 	
  

 	
  

 	
  

 	
  

 
	
 33

 	
  

 	
 Copies of
 Utility Bills (previous 3 months)

 	
  

 	
  

 	
  

 	
  

 
	
 34

 	
  

 	
 Zoning,
 compliance, and violation docs

 	
  

 	
  

 	
  

 	
  

 
	
 35

 	
  

 	
 Title
 Insurance Commitment, Title Search or Title Certificate

 	
  

 	
  

 	
  

 	
 PROBABLY
 ONLY THE FINAL POLICY

 
	
 36

 	
  

 	
 Copies of
 Title Exceptions

 	
  

 	
  

 	
  

 	
 PROBABLY DO
 NOT HAVE

 
	
 37

 	
  

 	
 ALTA Survey

 	
  

 	
  

 	
  

 	
 ONLY REGULAR
 SURVEY

 
	
 38

 	
  

 	
 Service
 Contract Summary Completed

 	
  

 	
  

 	
  

 	
  

 
	
 39

 	
  

 	
 Property
 Data Sheet Completed

 	
  

 	
  

 	
  

 	
  

 
	
 40

 	
  

 	
 Other

 	
  

 	
  

 	
  

 	
  

 

-viii-

Due Diligence

Service Contract Summary

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Brand:

 Location:

 # Rooms:

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Service

 Contract

 	
  

 	
 Term

 	
  

 	
 Annual

 Amount

 	
  

 	
 Cancellation

 	
  

 	
 Company

 	
  

 	
 Assignment

 
	
  

 	
  

 	

 

 	
  

 	

 

 	
  

 	

 

 	
  

 	

 

 	
  

 	

 

 	
  

 	

 

 
	
 EXAMPLE

 Kone Elevator

 Service

 	
  

 	
 Quarterly

 Inspection

 & Service

 	
  

 	
 5yrs;
 beg

 2/12/04

 	
  

 	
 $4,942

 	
  

 	
 90-day
 notice

 prior to

 expiration

 	
  

 	
 Hotel

 Properties,

 LLC

 	
  

 	
 w/ written consent

 
	

 

 	
  

 	

 

 	
  

 	

 

 	
  

 	

 

 	
  

 	

 

 	
  

 	

 

 	
  

 	

 

 
	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 
	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 
	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 
	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 
	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 
	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 
	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 
	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 
	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 
	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 
	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 
	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 
	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 
	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 
	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 
	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 
	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 
	
 LEASE

CONTRACTS 

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 
	
 Name

 	
  

 	
 Equipment

 	
  

 	
 Term

 	
  

 	
 Annual

 Amount

 	
  

 	
 Cancellation

 	
  

 	
 Company

 	
  

 	
 Assignment

 
	

 

 	
  

 	

 

 	
  

 	

 

 	
  

 	

 

 	
  

 	

 

 	
  

 	

 

 	
  

 	

 

 
	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 
	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 
	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 
	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 
	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 	

 

 

-ix-

Due Diligence

Property Data Survey

[To Be Completed Electronically]

-x-

-xi-

-xii-Exhibit 10.22

North Charleston, SC (Home2)

PURCHASE CONTRACT

between

THE
GENERATION COMPANIES, LLC (“SELLER”)

AND

APPLE SUITES REALTY GROUP, INC.
(“BUYER”)

Dated: November 5, 2010

TABLE OF CONTENTS

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 Page No.

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	

 

 
	
 ARTICLE I

 	
  

 	
  

 	
 DEFINED TERMS

 	
  

 	
 1

 
	
  

 	
 1.1

 	
  

 	
 Definitions

 	
  

 	
 1

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE II

 	
  

 	
  

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

 	
  

 	
 8

 
	
  

 	
 2.1

 	
  

 	
 Purchase and Sale

 	
  

 	
 8

 
	
  

 	
 2.2

 	
  

 	
 Purchase Price

 	
  

 	
 8

 
	
  

 	
 2.3

 	
  

 	
 Allocation

 	
  

 	
 8

 
	
  

 	
 2.4

 	
  

 	
 Payment

 	
  

 	
 8

 
	
  

 	
 2.5

 	
  

 	
 Earnest Money Deposit

 	
  

 	
 8

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE III

 	
  

 	
  

 	
 REVIEW PERIOD

 	
  

 	
 9

 
	
  

 	
 3.1

 	
  

 	
 Review Period

 	
  

 	
 9

 
	
  

 	
 3.2

 	
  

 	
 Due Diligence Examination

 	
  

 	
 10

 
	
  

 	
 3.3

 	
  

 	
 Restoration

 	
  

 	
 11

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE IV

 	
  

 	
  

 	
 SURVEY AND TITLE APPROVAL

 	
  

 	
 11

 
	
  

 	
 4.1

 	
  

 	
 Survey

 	
  

 	
 11

 
	
  

 	
 4.2

 	
  

 	
 Title

 	
  

 	
 11

 
	
  

 	
 4.3

 	
  

 	
 Survey or Title Objections

 	
  

 	
 11

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE V

 	
  

 	
  

 	
 MANAGEMENT AGREEMENT AND FRANCHISE AGREEMENT

 	
  

 	
 12

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE VI

 	
  

 	
  

 	
 BROKERS

 	
  

 	
 13

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE VII

 	
  

 	
  

 	
 REPRESENTATIONS, WARRANTIES AND COVENANTS

 	
  

 	
 13

 
	
  

 	
 7.1

 	
  

 	
 Seller’s and Indemnitor’s Representations,
 Warranties and Covenants

 	
  

 	
 13

 
	
  

 	
 7.2

 	
  

 	
 Buyer’s Representations, Warranties and Covenants

 	
  

 	
 17

 
	
  

 	
 7.3

 	
  

 	
 Survival

 	
  

 	
 17

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE VIII

 	
  

 	
  

 	
 ADDITIONAL COVENANTS

 	
  

 	
 17

 
	
  

 	
 8.1

 	
  

 	
 Subsequent Developments

 	
  

 	
 17

 
	
  

 	
 8.2

 	
  

 	
 Construction of Hotel

 	
  

 	
 18

 
	
  

 	
 8.3

 	
  

 	
 Plans and Specifications

 	
  

 	
 18

 
	
  

 	
 8.4

 	
  

 	
 Commencement of Construction; Substantial Completion

 	
  

 	
 18

 
	
  

 	
 8.5

 	
  

 	
 Inspections

 	
  

 	
 19

 
	
  

 	
 8.6

 	
  

 	
 Punch List

 	
  

 	
 19

 
	
  

 	
 8.7

 	
  

 	
 Pre-Opening Program

 	
  

 	
 19

 
	
  

 	
 8.8

 	
  

 	
 Construction Warranty

 	
  

 	
 20

 
	
  

 	
 8.9

 	
  

 	
 Other Obligations of Seller Before Closing

 	
  

 	
 20

 
	
  

 	
 8.10

 	
  

 	
 Third Party Consents

 	
  

 	
 20

 
	
  

 	
 8.11

 	
  

 	
 Access to Financial Information

 	
  

 	
 21

 

i

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 8.12

 	
  

 	
 Bulk Sales

 	
  

 	
 21

 
	
  

 	
 8.13

 	
  

 	
 Indemnification

 	
  

 	
 21

 
	
  

 	
 8.14

 	
  

 	
 Escrow Funds

 	
  

 	
 23

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE IX

 	
  

 	
  

 	
 CONDITIONS FOR CLOSING

 	
  

 	
 24

 
	
  

 	
 9.1

 	
  

 	
 Buyer’s Conditions for Closing

 	
  

 	
 24

 
	
  

 	
 9.2

 	
  

 	
 Seller’s Conditions for Closing

 	
  

 	
 25

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE X

 	
  

 	
  

 	
 CLOSING AND CONVEYANCE

 	
  

 	
 25

 
	
  

 	
 10.1

 	
  

 	
 Closing

 	
  

 	
 25

 
	
  

 	
 10.2

 	
  

 	
 Deliveries of Seller

 	
  

 	
 26

 
	
  

 	
 10.3

 	
  

 	
 Buyer’s Deliveries

 	
  

 	
 27

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE XI

 	
  

 	
  

 	
 COSTS

 	
  

 	
 28

 
	
  

 	
 11.1

 	
  

 	
 Seller’s Costs

 	
  

 	
 28

 
	
  

 	
 11.2

 	
  

 	
 Buyer’s Costs

 	
  

 	
 28

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE XII

 	
  

 	
  

 	
 ADJUSTMENTS

 	
  

 	
 28

 
	
  

 	
 12.1

 	
  

 	
 Adjustments

 	
  

 	
 28

 
	
  

 	
 12.2

 	
  

 	
 Reconciliation and Final Payment

 	
  

 	
 29

 
	
  

 	
 12.3

 	
  

 	
 Employees

 	
  

 	
 30

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE XIII

 	
  

 	
  

 	
 CASUALTY AND CONDEMNATION

 	
  

 	
 30

 
	
  

 	
 13.1

 	
  

 	
 Risk of Loss; Notice

 	
  

 	
 30

 
	
  

 	
 13.2

 	
  

 	
 Buyer’s Termination Right

 	
  

 	
 30

 
	
  

 	
 13.3

 	
  

 	
 Procedure for Closing

 	
  

 	
 31

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE XIV

 	
  

 	
  

 	
 DEFAULT REMEDIES

 	
  

 	
 31

 
	
  

 	
 14.1

 	
  

 	
 Buyer Default

 	
  

 	
 31

 
	
  

 	
 14.2

 	
  

 	
 Seller Default

 	
  

 	
 31

 
	
  

 	
 14.3

 	
  

 	
 Attorney’s Fees

 	
  

 	
 31

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE XV

 	
  

 	
  

 	
 NOTICES

 	
  

 	
 32

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE XVI

 	
  

 	
  

 	
 MISCELLANEOUS

 	
  

 	
 33

 
	
  

 	
 16.1

 	
  

 	
 Performance

 	
  

 	
 33

 
	
  

 	
 16.2

 	
  

 	
 Binding Effect; Assignment

 	
  

 	
 33

 
	
  

 	
 16.3

 	
  

 	
 Entire Agreement

 	
  

 	
 33

 
	
  

 	
 16.4

 	
  

 	
 Governing Law

 	
  

 	
 33

 
	
  

 	
 16.5

 	
  

 	
 Captions

 	
  

 	
 33

 
	
  

 	
 16.6

 	
  

 	
 Confidentiality

 	
  

 	
 33

 
	
  

 	
 16.7

 	
  

 	
 Closing Documents

 	
  

 	
 34

 
	
  

 	
 16.8

 	
  

 	
 Counterparts

 	
  

 	
 34

 
	
  

 	
 16.9

 	
  

 	
 Severability

 	
  

 	
 34

 
	
  

 	
 16.10

 	
  

 	
 Interpretation

 	
  

 	
 34

 
	
  

 	
 16.11

 	
  

 	
 (Intentionally Omitted)

 	
  

 	
 34

 
	
  

 	
 16.12

 	
  

 	
 Further Acts

 	
  

 	
 34

 

ii

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 16.13

 	
  

 	
 Joint and Several Obligations

 	
  

 	
 34

 
	
  

 	
 16.14

 	
  

 	
 Notice of Proposed Listing

 	
  

 	
 34

 
	
  

 	
 16.15

 	
  

 	
 Construction Loan

 	
  

 	
 35

 
	
  

 	
 16.16

 	
  

 	
 Title to Land

 	
  

 	
 35

 

SCHEDULES:

EXHIBITS:

	
  

 	
  

 
	
 Exhibit A

 	
 Legal Description

 
	
 Exhibit B

 	
 List of FF&E

 
	
 Exhibit C

 	
 List of Hotel Contracts

 
	
 Exhibit D

 	
 Consents and Approvals

 
	
 Exhibit E

 	
 Environmental Reports

 
	
 Exhibit F

 	
 Claims or Litigation Pending

 
	
 Exhibit G

 	
 Escrow Agreement

 
	
 Exhibit H

 	
 Construction Warranty

 
	
 Exhibit I

 	
 Pre-Opening Budget

 

iii

PURCHASE CONTRACT

This PURCHASE CONTRACT (this “Contract”) is made and
entered into as of November 5, 2010, by and between THE GENERATION COMPANIES,
LLC, a North Carolina limited liability company (“Seller”) with a
principal office at 1822 N.C. Highway 54 East, Suite 300, Durham, North
Carolina 27713, and APPLE SUITES REALTY GROUP, INC., a Virginia corporation,
with its principal office at 814 East Main Street, Richmond, Virginia 23219, or
its affiliates or assigns as permitted under Section 16.2 herein (“Buyer”).

RECITALS

          A.
Seller is or will become the fee simple owner of the land located in the City
of North Charleston, County of Charleston, South Carolina, identified in on Exhibit
A attached hereto and incorporated herein by reference. Seller intends to
construct a hotel on such land containing 122 suites to be operated as a Home2
by Hilton hotel.

          B.
Buyer is desirous of purchasing such land and the hotel to be constructed
thereon from Seller upon completion of the hotel, and Seller is desirous of
selling such land and hotel to Buyer, for the purchase price and upon terms and
conditions hereinafter set forth.

AGREEMENT:

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

ARTICLE
I
DEFINED TERMS

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

“Additional Deposit” shall mean $100,000.

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

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

1

alleys, easements and rights-of-way, if any, abutting,
adjacent, contiguous to or adjoining the Land. If Seller owns contiguous
parcels of land, “Appurtenances” shall apply only to the Land and not any such
contiguous parcels.

“Architect” shall mean the architect for the
Hotel, The Neil Luton Planning Group.

          “Brand”
shall mean Home2 by Hilton, the hotel brand or franchise under which the Hotel
will operate.

          “Business
Day” shall mean any day other than a Saturday, Sunday or legal holiday in
the Commonwealth of Virginia or the state in which the Real Property is
located.

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

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

“Construction Lender” shall mean RBC Bank
(USA).

“Construction Warranty” shall have the meaning
set forth in Section 8.8.

“Contractor” shall mean the contractor for the
Hotel, Tri Construction Associates, Inc.

“Contracts, Plans and Specs” shall mean all
construction and other contracts, plans, drawings, specifications, surveys,
soil reports, engineering reports, inspection reports, and other technical
descriptions and reports in the possession or control of Seller at the time of
mutual acceptance of this Contract and those created during the term of this
Contract.

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

“Deposits” shall mean, to the extent
assignable, all prepaid rents and deposits, refundable security deposits and
rental deposits, and all other deposits for advance reservations, banquets or
future services, made in connection with the use or occupancy of the
Improvements; provided, however, that to the extent Seller has not received or
does not hold all of the prepaid rents and/or deposits attributable to the
Leases related to the Property, Buyer shall be entitled to a credit against the
cash portion of the Purchase Price allocable to the Property in an amount equal
to the amount of the prepaid rents and/or deposits attributable to the Leases
transferred at the Closing of such Property, and provided further, that
“Deposits” shall exclude (i) reserves for real property taxes and insurance, in
each case, to the extent pro rated on the settlement statement such that Buyer
receives a credit for (a) taxes and premiums in respect of any period prior to
Closing and (b) the amount of deductibles and other self-insurance and all
other potential liabilities and claims in respect of any period prior to
Closing, and (ii) utility deposits.

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

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

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

2

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

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

“Escrow Funds” shall have the meaning set forth
in Section 8.14.

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

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

“FF&E” shall mean all tangible personal
property and fixtures of any kind (other than personal property (i) owned by
guests of the Hotel or (ii) leased by Seller pursuant to an FF&E Lease)
attached to, or located upon and used in connection with the ownership,
maintenance, use or operation of the Land or Improvements as of the date hereof
(or acquired by Seller and so employed prior to Closing), including, but not
limited to, all furniture, fixtures, equipment, signs and related personal
property; all heating, lighting, plumbing, drainage, electrical, air
conditioning, and other mechanical fixtures and equipment and systems; all
elevators, and related motors and electrical equipment and systems; all hot
water heaters, furnaces, heating controls, motors and equipment, all shelving
and partitions, all ventilating equipment, and all disposal equipment; all spa,
health club and fitness equipment; all equipment used in connection with the
use and/or maintenance of the guestrooms, restaurants, lounges, business
centers, meeting rooms, swimming pools, indoor and/or outdoor sports facilities
and other common areas and recreational areas; all carpet, drapes, beds, furniture,
televisions and other furnishings; all stoves, ovens, freezers, refrigerators,
dishwashers, disposals, kitchen equipment and utensils, tables, chairs, plates
and other dishes, glasses, silverware, serving pieces and other restaurant and
bar equipment, apparatus and utensils. A current list of FF&E will be
attached hereto as Exhibit B at least 15 days prior to Closing.

“FF&E Leases” shall mean all leases of any
FF&E and other contracts permitting the use of any FF&E at the
Improvements that are assumed by Buyer.

“Financial Statements” shall have the meaning
set forth in Section 3.1(b).

“Force Majeure” shall mean (i) strikes, lockouts or
labor disputes, (ii) the inability through no fault of the Seller to obtain
labor or materials or reasonable substitutes therefor, (iii) acts of God and
adverse weather conditions, (iv) enemy or hostile governmental action or acts
of terrorism, (v) governmental restrictions such as embargoes, (vi) civil
commotion, (vii) fire or other casualty or (viii) other conditions similar to
those enumerated above that are beyond the control of Seller, but in each case
excluding any such events or conditions that merely result in increased costs
to Seller.

“Franchise Agreement” shall mean the franchise
license agreement, in form reasonably acceptable to Buyer, between Franchisor
and Buyer.

“Franchisor” shall mean Hilton Worldwide, Inc.
or its affiliate.

3

“Hotel” shall mean the hotel to be constructed
on the Land, including all Improvements and Personal Property associated
therewith, to be known generally as the “North Charleston Home2 Suites by
Hilton”.

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

“Improvements” shall mean all buildings,
structures, fixtures, parking areas and other improvements now existing or to
be constructed on the Land, and all related facilities, provided, however, that
the term “Improvements” shall not include any buildings, structures, fixtures,
parking areas and other improvements that are or will be demolished or removed
in connection with the construction and development of the Hotel.

“Indemnified Party” shall have the meaning set
forth in Section 8.13(c)(i).

“Indemnifying Party” shall have the meaning set
forth in Section 8.13(c)(i).

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

“Knowledge”, “knowledge” or “known to” or similar
statements shall mean, with respect to Seller, the actual knowledge of H. Mark
Daley, III or Jeffrey P. Castleberry, and with respect to Buyer, the actual
knowledge of Nelson Knight.

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

“Leases” shall mean all leases, franchises,
licenses, occupancy agreements, “trade-out” agreements, advance bookings,
convention reservations, or other agreements demising space in, providing for
the use or occupancy of, or otherwise similarly affecting or relating to the
use or occupancy of, the Improvements or Land, together with all amendments,
modifications, renewals and extensions thereof, and all guaranties by third
parties of the obligations of the tenants, licensees, franchisees,
concessionaires or other entities thereunder.

“Legal Action” shall have the meaning set forth
in Section 8.13(c)(ii).

“Legal Requirements” shall mean any and all
statutes, laws, ordinances, zoning and other codes, rules, regulations and
requirements of any governmental authority applicable to the Property or any of
the parties to this Contract.

“Licenses” shall mean all permits, licenses,
franchises, utility reservations, certificates of occupancy, and other
documents issued by any federal, state, or municipal authority or by any
private party related to the development, construction, use, occupancy,
operation or maintenance of the Hotel, including, without limitation, all
licenses, approvals and rights (including any and all existing waivers of any
brand standard) necessary or appropriate for the operation of the Hotel under
the Brand.

4

“Management Agreement” means the management
agreement to be entered into between Buyer and the Manager for the operation
and management of the Hotel on and after the Closing Date.

“Manager” shall mean the management company
chosen by Buyer to operate the Hotel from and after Closing.

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

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

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

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

“Plans and Specifications” shall have the
meaning set forth in Section 8.3.

“Pre-Opening Costs” shall have the meaning set
forth in Section 8.7.

“Pre-Opening Program” shall have the meaning
set forth in Section 8.7.

“Post-Closing Agreement” shall have the meaning
set forth in Section 8.14.

“Property” shall mean, collectively (i) all of
the following with respect to the Hotel: the Land, Improvements, Appurtenances,
FF&E, Supplies, Leases, Deposits, Records, Service Contracts, Warranties,
Licenses, FF&E Leases, Contracts, Plans and Specs, Tradenames, the
Franchise Agreement, Utility Reservations, as well as all other real, personal
or intangible property of Seller related to any of the foregoing and (ii) any
and all of the following that relate to or affect in any way the design,
construction, ownership, use, occupancy, leasing, maintenance, service or
operation of the Real Property, FF&E, Supplies, Leases, Deposits or
Records: Service Contracts, Warranties, Licenses, Tradenames, Contracts, Plans
and Specs and FF&E Lease. 

“Punch List Items” shall mean such items (i) as
are reasonably necessary or appropriate to fully complete the construction,
equipping and furnishing of the Hotel in accordance with this Contract and (ii)
that, unless otherwise agreed by Buyer in its sole discretion, (a) individually
and in the aggregate do not and will not prohibit, cause a delay in or
otherwise adversely affect, under applicable Legal Requirements, the Franchise
Agreement or otherwise, the opening of the Hotel for business to the public or
the continued occupancy and operation of the Hotel as contemplated under the
Brand and (b) may be corrected or completed, subject to delays caused by Force
Majeure, within not more than sixty (60) days after Substantial Completion of
the Hotel.

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

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

“Records” shall mean all books, records,
promotional material, tenant data, guest history information (other than any
such information owned exclusively by the Franchisor), marketing 

5

and leasing material and forms (including but not
limited to any such records, data, information, material and forms in the form
of computerized files located at the Hotel), market studies prepared in
connection with Seller’s current annual plan and other materials, information,
data, legal or other documents or records (including, without limitation, all
documentation relating to any litigation or other proceedings, all zoning
and/or land use notices, relating to or affecting the Property, all business
plans and projections and all studies, plans, budgets and contracts related to
the development, construction and/or operation of the Hotel) owned by Seller
and/or in a Seller’s possession or control, or to which a Seller has access or
may obtain from the Franchisor, that are used in or relating to the Property
and/or the operation of the Hotel, including the Land, the Improvements or the
FF&E, and proforma budgets and projections and construction budgets and
contracts related to the development and construction of the Hotel and a list
of the general contractors, architects and engineers providing goods and/or
services in connection with the construction of the Hotel, all construction
warranties and guaranties in effect at Closing and copies of the final Plans
and Specifications for the Hotel.

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

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

“SEC” shall have the meaning set forth in
Section 8.11.

“Seller Liens” shall have the meaning set forth
in Section 4.3.

“Seller Parties” shall have the meaning set
forth in Section 7.1(e).

“Service Contracts” shall mean contracts or
agreements, such as maintenance, supply, service or utility contracts.

          “Substantial
Completion,” including variations thereof such as “Substantially Complete”
and “Substantially Completed” shall mean: (i) the Architect and the Contractor
have issued a certificate of substantial completion in form and substance
satisfactory to Buyer certifying that the Hotel has been constructed
substantially in accordance with the Plans and Specifications and the Legal
Requirements, (ii) at least a temporary certificate of occupancy authorizing
the opening of the Hotel for business to the public and for operation under the
Brand has been issued by the local governing authority and is in full force and
effect, (iii) all other final and unconditional consents, approvals, licenses
and operating permits necessary or appropriate for the Hotel to open for
business to the public and to operate under the Brand have been issued by and
obtained from all applicable governmental and regulatory authorities, subject
to Punch List Items; (iv) the Hotel is fully furnished, fitted and equipped and
ready to open for business to the public and operate under the Brand, subject
to Punch List Items; (v) all contractors, subcontractors, suppliers, mechanics,
materialmen and other persons or entities providing labor or materials for the
construction and development of the Hotel shall have been paid in full (or
adequate provision for payment of such persons or entities has been made to Buyer’s
satisfaction), subject to Punch List Items and (vi) the Franchisor has approved
the completion, furnishing and equipping of the Hotel and is prepared to
commence (or authorize the commencement of) operation of the Hotel, and all of
the other conditions set forth in the Franchise Agreement have been satisfied,
subject to Punch List Items.

6

“Supplies” shall mean all merchandise,
supplies, inventory and other items used for the operation and maintenance of
guest rooms, restaurants, lounges, swimming pools, health clubs, spas, business
centers, meeting rooms and other common areas and recreational areas located
within or relating to the Improvements, including, without limitation, all food
and beverage (alcoholic and non-alcoholic) inventory, office supplies and
stationery, advertising and promotional materials, china, glasses,
silver/flatware, towels, linen and bedding (all of which shall be 2-par level
for all suites or rooms in the Hotel), guest cleaning, paper and other
supplies, upholstery material, carpets, rugs, furniture, engineers’ supplies,
paint and painters’ supplies, employee uniforms, and all cleaning and
maintenance supplies, including those used in connection with the swimming
pools, indoor and/or outdoor sports facilities, health clubs, spas, fitness
centers, restaurants, business centers, meeting rooms and other common areas
and recreational areas.

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

“Third Party Consents” shall have the meaning
set forth in Section 8.10.

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

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

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

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

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

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

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

7

installation, equipping and furnishing of the Hotel,
and all indemnities, bonds and claims of Seller related thereto.

ARTICLE
II

PURCHASE AND SALE; PURCHASE PRICE; PAYMENT;

EARNEST MONEY DEPOSIT

          2.1
Purchase and Sale. Seller agrees to sell and convey to Buyer or
its affiliates and/or assigns (as permitted under Section 16.2 below), and
Buyer or its assigns agrees to purchase from Seller, the Property, in
consideration of the Purchase Price and upon the terms and conditions hereof.
All of the Property shall be conveyed, assigned, and transferred to Buyer at
Closing, free and clear of all mortgages, liens, encumbrances, licenses,
franchises (other than any hotel franchises assumed by Buyer), concession
agreements, security interests, prior assignments or conveyances, conditions,
restrictions, rights-of-way, easements, encroachments, claims and other matters
affecting title or possession, except for the Permitted Exceptions and FF&E
Leases.

          2.2
Purchase Price. Buyer agrees to pay, and Seller agrees to accept,
as consideration for the conveyance of the Property, subject to the adjustments
provided for in this Contract, the amount of Thirteen Million Nine Hundred
Eight Thousand and No/100 Dollars ($13,908,000.00) (the “Purchase Price”) based
upon a room count of 122. The purchase price shall be reduced by (i) an amount
equal to twenty percent (20%) of the amount $10,401,898.00 exceeds the actual
construction costs and (ii) an amount equal to forty percent (40%) of the
amount $2,031,676.00 exceeds FF&E costs.

          2.3
Allocation. Buyer and Seller shall attempt to agree on an
allocation of the Purchase Price among Real Property, tangible Personal
Property and intangible property related to the Property. In the event Buyer
and Seller do not agree, each party shall be free to allocate the Purchase
Price to such items as they deem appropriate, subject to and in accordance with
applicable laws.

          2.4
Payment. The portion of the Purchase Price, less: (a) the Earnest
Money Deposit and interest earned thereon, if any, which Buyer elects to have
applied against the Purchase Price (as provided below) and (b) the Escrow
Funds, shall be paid to Seller in cash, certified funds or wire transfer, at
the Closing of the Property. At the Closing, the Earnest Money Deposit,
together with interest earned thereon, if any, shall, at Buyer’s election, be
returned to Buyer or shall be paid over to Seller by Escrow Agent to be applied
to the portion of the Purchase Price on behalf of Buyer, and the Escrow Funds
shall be deposited into an escrow account pursuant to the Post-Closing
Agreement as contemplated by Section 8.14.

          2.5
Earnest Money Deposit.

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

8

Review Period, then the Escrow Agent shall return the
Earnest Money Deposit to Buyer promptly upon written notice to that effect from
Buyer. If Buyer does not elect to terminate this Contract on or before the
expiration of the Review Period, Buyer shall subject to Section 16.16
below, within three (3) Business Days after the later to occur of (a) the
expiration of the Review Period or (b) the date Seller closes the Construction
Loan (defined below), deposit the Additional Deposit with the Escrow Agent. The
Initial Deposit and the Additional Deposit, and all interest accrued thereon,
shall hereinafter be referred to as the “Earnest Money Deposit.”

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

ARTICLE
III

REVIEW PERIOD

          3.1
Review Period. Buyer shall have a period through 6:00 p.m. Eastern Time
on the date that is thirty (30) days following the date of this Contract,
unless a longer period of time is otherwise provided for in this Contract and
except as otherwise agreed to by Buyer and Seller (the “Review Period”), to
evaluate the legal, title, survey, construction, physical condition,
structural, mechanical, environmental, economic, permit status, franchise
status, financial and other documents and information related to the Property.
Within two (2) Business Days following the date of this Contract, Seller, at
Seller’s sole cost and expense, will deliver to Buyer (or make available at the
Hotel) for Buyer’s review, to the extent not previously delivered to Buyer,
true, correct and complete copies of the following, together with all
amendments, modifications, renewals or extensions thereof:

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

                    (b)
If there is an existing Hotel, income and expense statements and budgets for
the Hotel, for the current year to date (the “Financial Statements”),
and the Seller shall provide to Buyer copies of all income and expense
statements generated by the Seller or any third party that relate to the
operations of the Hotel and that contain information not included in the
financial statements, if any, provided to Buyer by the Manager, provided that
Seller also agrees to provide to Buyer’s auditors and representatives all
financial and other information necessary or appropriate for preparation of
audited financial statements for Buyer and/or its Affiliates as provided in
Section 8.11, below;

                    (c)
To the extent existing, all real estate and, if applicable, personal property
tax statements, with respect to the Hotel and notices of appraised value for
the Real Property for the current year (if available) and each of the three (3)
calendar years prior to the current year, or for such years as Seller has owned
the Property;

9

                    (d)
Engineering, mechanical, architectural and construction plans, drawings,
specifications and contracts, payment and performance bonds, title policies,
reports and commitments, zoning information and marketing and economic data
relating to the Land or the Hotel and the construction, development,
installation and equipping thereof, as well as copies of all environmental
reports and information, topographical, boundary or “as built” surveys,
engineering reports, subsurface studies and other Contracts, Plans and Specs
relating to or affecting the Hotel. If the Hotel is purchased by Buyer, all
such documents and information relating to the Hotel shall thereupon be and become
the property of Buyer without payment of any additional consideration therefor;

                    (e)
To the extent existing, all FF&E Leases, Services Contracts, Leases and, if
applicable, a schedule of such Leases of space in the Hotel, and all agreements,
if any, for real estate commissions, brokerage fees, finder’s fees or other
compensation payable by Seller in connection therewith; and

                    (f)
All notices received from governmental authorities in connection with the Land
for the current year and each of the two(2) calendar years prior to the current
year (or for such years as Seller has owned the Property) and all other notices
received from governmental authorities received at any time during Seller’s
ownership of the Property that relate to any noncompliance or violation of law
that has not been corrected.

Seller shall, upon request of Buyer, make available to
Buyer and Buyer’s representatives and agents, for inspection and copying during
normal business hours, Records located at Seller’s corporate offices, and
Seller agrees to provide Buyer copies of all other reasonably requested
information that is relevant to the management, operation, use, occupancy or
leasing of or title to the Property and the Plans and Specifications for development
of the Hotel. At any time during the Review Period, Buyer may, in its sole and
absolute discretion, elect not to proceed with the purchase of the Property for
any reason whatsoever by giving written notice thereof to Seller, in which
event: (i) the Earnest Money Deposit shall be promptly returned by Escrow Agent
to Buyer together with all accrued interest, if any, (ii) this Contract shall
be terminated automatically, (iii) all materials supplied by Seller to Buyer
shall be returned promptly to Seller, and (iv) both parties will be relieved of
all other rights, obligations and liabilities hereunder, except for the
parties’ obligations pursuant to Sections 3.3 and 16.6 below.

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

10

the Improvements, and pay the costs of all such
inspections. Buyer shall perform any physical inspections of the Property at
its own risk. Buyer may not conduct a Phase II environmental site assessment or
any other invasive environmental procedure without the prior written consent of
Seller.

          3.3
Restoration. Buyer covenants and agrees not to damage or destroy
any portion of the Property in conducting its examinations and studies of the
Property during the Due Diligence Examination and, if closing does not occur,
shall repair any portion of the Property damaged by the conduct of Buyer, its
agents or employees, to substantially the condition such portion(s) of the
Property were in immediately prior to such examinations or studies. 

ARTICLE
IV

SURVEY AND TITLE APPROVAL

          4.1
Survey. Seller has delivered to Buyer true, correct and complete
copies of the most recent surveys of the Real Property. In the event that an
update of a survey or a new survey (such updated or new surveys being referred
to as the “Surveys”) are desired by Buyer, then Buyer shall be
responsible for all costs related thereto; provided, however, Seller shall
provide, at its sole cost and expense, an as-built survey when the Hotel is
substantially complete.

          4.2
Title. Seller has delivered to Buyer Seller’s existing title
insurance policy, including copies of all documents referred to therein, for
the Real Property. Buyer’s obligations under this Contract are conditioned upon
Buyer being able to obtain for the Property (i) a Commitment for Title
Insurance (each, a “Title Commitment”) issued by Chicago Title Company,
Attn: Debby Moore, 5501 LBJ Freeway, Suite 200, Dallas, Texas 75240 (the “Title Company”), for
the most recent standard form of owner’s policy of title insurance in the state
in which the Real Property is located, covering the Real Property, setting
forth the current status of the title to the Real Property, showing all liens,
claims, encumbrances, easements, rights of way, encroachments, reservations,
restrictions and any other matters affecting the Real Property and pursuant to
which the Title Company agrees to issue to Buyer at Closing an Owner’s Policy
of Title Insurance on the most recent form of ALTA (where available) owner’s
policy available in the state in which the Land is located, with extended
coverage and, to the extent applicable and available in such state,
comprehensive, access, single tax parcel, contiguity, and such other
endorsements as may be required by Buyer (collectively, the “Title Policy”);
and (ii) true, complete, legible and, where applicable, recorded copies of all
documents and instruments (the “Exception Documents”) referred to or
identified in the Title Commitment, including, but not limited to, all deeds,
lien instruments, leases, plats, surveys, reservations, restrictions, and
easements affecting the Real Property. If requested by Seller, Buyer shall
promptly provide Seller with a copy of the Title Commitment issued by the Title
Company.

          4.3
Survey or Title Objections. If Buyer discovers any title or
survey matter which is objectionable to Buyer, Buyer may provide Seller with
written notice of its objection to same on or before the expiration of the
Review Period (the “Title Review Period”). If Buyer fails
to so object in writing to any such matter set forth in the Survey or Title
Commitment, it shall be conclusively assumed that Buyer has approved same,
except as otherwise provided in Section 9.1. If Buyer disapproves any condition
of title, survey or other matters by written objection to Seller on or before
the expiration of the Title Review Period, Seller shall elect either to attempt

11

to cure or not cure any such item by written notice
sent to Buyer within five (5) days after Seller’s receipt of notice from Buyer,
and if Seller commits in writing to attempt to cure any such item, then Seller
shall be given until the Closing Date to cure any such defect. In the event
Seller shall fail to cure a defect which Seller has committed in writing to
cure prior to Closing, or if a new title defect arises after the date of
Buyer’s Title Commitment or Survey, as applicable, but prior to Closing, then
Buyer may elect, in Buyer’s sole and absolute discretion: (i) to waive such
objection and proceed to Closing, or (ii) to terminate this Contract and
receive a return of the Earnest Money Deposit, and any interest thereon. The
items shown on the Title Commitment which are not objected to by Buyer as set
forth above (other than exceptions and title defects arising after the Title
Review Period and other than those standard exceptions which are ordinarily and
customarily omitted in the state in which the Hotel is located, so long as
Seller provides the appropriate owner’s affidavit, gap indemnity or other
documentation reasonably required by the Title Company for such omission) and
all Leases showing on the Title Commitment are hereinafter referred to as the “Permitted
Exceptions.” In no event shall Permitted Exceptions include
liens, or documents evidencing liens, securing any indebtedness or any
mechanics’ or materialmen’s liens or any claims or potential claims therefor
covering the Property or any portion thereof (“Seller Liens”), each
of which shall be paid in full by Seller and released at Closing. 

ARTICLE
V

MANAGEMENT AGREEMENT AND FRANCHISE AGREEMENT

At or prior to the Closing, Seller shall terminate any
existing management agreement and the Existing Franchise Agreement, and Seller
shall be solely responsible for all claims and liabilities arising thereunder
on, prior to or following the Closing Date. As a condition to Closing, Buyer
shall enter into the Franchise Agreement, effective as of the Closing Date,
containing terms and conditions acceptable to Buyer (including, without
limitation, such terms and conditions as may be required to accommodate Buyer’s
and/or Buyer’s Affiliates’ REIT structure), provided, however, that Buyer shall
use its commercially reasonable efforts to obtain such Franchise Agreement, and
provided, further, that Buyer shall not be entitled, as a condition to Closing,
to require a new Franchise Agreement containing economic terms more favorable
to the owner or franchisee than the economic terms of the Existing Franchise
Agreement or that differ in any other material respect from the form of
franchise agreement which Buyer and Franchisor have negotiated previously as
their standard form of franchise agreement. Seller shall negotiate a one-time
free right of transfer in the Existing Franchise Agreement which shall permit
Buyer to obtain a new Franchise Agreement at no cost to Buyer (other than
Buyer’s costs of review), and Buyer shall cooperate with Seller in this respect
and shall make good faith efforts to obtain a waiver of all fees from
Franchisor. In the event Seller is unable to secure this one-time free right of
transfer, Seller shall reimburse Buyer at Closing for any franchise/application
fees imposed by Franchisor on Buyer. Seller shall be responsible for paying all
costs related to the termination of any existing management agreement and shall
indemnify and hold Buyer harmless from and against any and all claims from any
persons claiming under any management agreement other than the management
agreement entered into between Buyer and Manager. Seller shall be responsible
for paying all reasonable and actual costs of the Franchisor related to the
termination of the Existing Franchise Agreement. Seller shall use best efforts
to promptly provide all information required by the Franchisor in connection
with the new Franchise Agreement, and Seller and Buyer shall diligently pursue
obtaining each the same. 

12

ARTICLE
VI

BROKERS

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

ARTICLE
VII

REPRESENTATIONS, WARRANTIES AND COVENANTS

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

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

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

                    (c)
Bankruptcy. None of Seller, or, to Seller’s knowledge, any of its or
their partners or members, is insolvent or the subject of any bankruptcy
proceeding, receivership proceeding or other insolvency, dissolution,
reorganization or similar proceeding.

                    (d)
Property Agreements. The assets constituting the Property to be conveyed
to Buyer hereunder shall constitute all of the property and assets to be used
in connection with the operation and business of the Hotel. There are no, and
as of the Closing there shall be no, leases, license agreements, leasing
agent’s agreements, equipment leases, building service agreements, maintenance
contracts, suppliers contracts, warranty contracts, operating agreements, or
other agreements (i) to which Seller is a party or an assignee, or (ii) binding
upon the Property, relating to the ownership, occupancy, operation, management
or maintenance of the Real Property, FF&E, Supplies or Tradenames, except
for those Service Contracts, Leases, Warranties and FF&E Leases to which
Seller becomes a party with the approval of Buyer or 

13

which Buyer may enter into before the Closing. As of
the Closing, any Service Contracts, Leases, Warranties and FF&E Leases to
which Seller has become a party with the approval of Buyer shall be in full
force and effect, and no default shall have occurred and be continuing
thereunder and no circumstances shall exist which, with the giving of notice, the
lapse of time or both, would constitute such a default. No party has, and as of
the Closing no party shall have, any right or option to acquire the Property or
any portion thereof, other than Buyer.

                    (e)
Pending Claims. Seller has not received written notice of: (i) claims,
demands, litigation, proceedings or governmental investigations pending or
threatened against Seller, the Manager or any Affiliate of any of them
(collectively, “Seller Parties”) or related to the
business or assets of the Hotel, except as set forth on Exhibit F
attached hereto and incorporated herein by reference, (ii) special assessments
or extraordinary taxes except as set forth in the Title Commitment or (iii)
pending or threatened condemnation or eminent domain proceedings which would
affect the Property or any part thereof. There are no: pending arbitration
proceedings or unsatisfied arbitration awards, or judicial proceedings or
orders respecting awards, which might become a lien on the Property or any
portion thereof, pending unfair labor practice charges or complaints,
unsatisfied unfair labor practice orders or judicial proceedings or orders with
respect thereto, pending charges or complaints with or by city, state or
federal civil or human rights agencies, unremedied orders by such agencies or
judicial proceedings or orders with respect to obligations under city, state or
federal civil or human rights or antidiscrimination laws or executive orders
affecting the Hotel, or other pending, actual or, to Seller’s knowledge,
threatened litigation claims, charges, complaints, petitions or unsatisfied
orders by or before any administrative agency or court which affect the Hotel
or might become a lien on the Hotel (collectively, the “Pending Claims”).

                    (f)
Environmental. With respect to environmental matters, to Seller’s
knowledge and except as otherwise disclosed in the environmental reports and
documents identified in Exhibit E, (i) there has been no Release or
threat of Release of Hazardous Materials in, on, under, to or from the Real
Property, except as disclosed in the reports and documents set forth on Exhibit
E attached hereto and incorporated herein by reference, (ii) no portion of
the Property is being used for the treatment, storage, disposal or other
handling of Hazardous Materials or machinery containing Hazardous Materials
other than standard amounts of cleaning supplies and chlorine for the swimming
pool, all of which are stored on the Property in strict accordance with
applicable Environmental Requirements and do not exceed limits permitted under
applicable laws, including without limitation Environmental Requirements, (iii)
no underground storage tanks are currently located on or in the Real Property
or any portion thereof, (iv) no environmental investigation, administrative
order, notification, consent order, litigation, claim, judgment or settlement
with respect to the Property or any portion thereof is pending or threatened,
(v) there is not currently and, to Seller’s actual knowledge, never has been
any mold, fungal or other microbial growth in or on the Real Property, or
existing conditions within buildings, structures or mechanical equipment
serving such buildings or structures, that could reasonably be expected to
result in material liability or material costs or expenses to remediate the
mold, fungal or microbial growth, or to remedy such conditions that could
reasonably be expected to result in such growth, and (vi) except as disclosed
on Exhibit E, there are no reports or other documentation regarding the
environmental condition of the Real Property in the possession of Seller or
Seller’s Affiliates, consultants, contractors or agents. As used in this 

14

Contract: “Hazardous Materials” means (1)
“hazardous wastes” as defined by the Resource Conservation and Recovery Act of
1976, as amended from time to time (“RCRA”), (2) “hazardous substances” as
defined by the Comprehensive Environmental Response, Compensation and Liability
Act of 1980 (42 U.S.C. 9601 et seq.), as amended by the Superfund
Amendment and Reauthorization Act of 1986 and as otherwise amended from time to
time (“CERCLA”);
(3) “toxic substances” as defined by the Toxic Substances Control Act, as
amended from time to time (“TSCA”), (4) “hazardous materials” as
defined by the Hazardous Materials Transportation Act, as amended from time to
time (“HMTA”),
(5) asbestos, oil or other petroleum products, radioactive materials, urea
formaldehyde foam insulation, radon gas and transformers or other equipment
that contains dielectric fluid containing polychlorinated biphenyls and (6) any
substance whose presence is detrimental or hazardous to health or the
environment, including, without limitation, microbial or fungal matter or mold,
or is otherwise regulated by federal, state and local environmental laws
(including, without limitation, RCRA, CERCLA, TSCA, HMTA), rules, regulations
and orders, regulating, relating to or imposing liability or standards of
conduct concerning any Hazardous Materials or environmental, health or safety
compliance (collectively, “Environmental Requirements”). As used
in this Contract: “Release” means spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, dumping or disposing.

                    (g)
Title and Liens. Except for Seller Liens to be released at Closing,
Seller has good and marketable fee simple absolute title to the Real Property,
subject only to the Permitted Exceptions. Except for the FF&E subject to
the FF&E Leases and any applicable Permitted Exceptions, Seller has good
and marketable title to the Personal Property, free and clear of all liens,
claims, encumbrances or other rights whatsoever (other than the Seller Liens to
be released at Closing), and there are no other liens, claims, encumbrances or other
rights pending or of which any Seller Party has received notice or which are
otherwise known to any Seller Party related to any other Personal Property.

                    (h)
Utilities. All appropriate utilities, including sanitary and storm
sewers, water, gas, telephone, cable and electricity, are available at the
boundaries of the Land and Seller is entitled to connect the Hotel thereto, and
upon connection to the Hotel and payment of all connection or “tap on”,
usage and similar fees to be paid by Seller, which Seller hereby agrees to pay,
such utilities shall be sufficient and available to service the Hotel.

                    (i)
Licenses, Permits and Approvals. Seller has not received any written
notice, and Seller has no Knowledge that the Property fails to comply with all
applicable licenses, permits and approvals and federal, state or local
statutes, laws, ordinances, rules, regulations, requirements and codes
including, without limitation, those regarding zoning, land use, building,
fire, health, safety, environmental, subdivision, water quality, sanitation
controls and the Americans with Disabilities Act, and similar rules and
regulations relating and/or applicable to the ownership, use and operation of
the Property as it is now operated. Seller has or by Closing shall have
received all licenses, permits and approvals required or needed for the lawful
conduct, occupancy and operation of the business of the Hotel, and each license
and permit is in full force and effect, and will be received and in full force
and effect as of the Closing. Subject to Section 8.10 below, no licenses,
permits or approvals necessary for the 

15

lawful conduct, occupancy or operation of the business
of the Hotel, to Seller’s knowledge requires any approval of a governmental
authority for transfer of the Property.

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

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

                    (l)
Operations. If the Property consists of an existing hotel, the Hotel has
at all times been operated by Manager in accordance with all applicable laws,
rules, regulations, ordinances and codes.

                    (m)
Existing Management and Franchise Agreements. If the Property consists
of an existing hotel, Seller has furnished to Buyer true and complete copies of
the any existing management agreement and the Existing Franchise Agreement,
which constitutes the entire agreement of the parties with respect to the
subject matter thereof and which have not been amended or supplemented in any
respect. There are no other management agreements, franchise agreements,
license agreements or similar agreements for the operation or management of the
Hotel or relating to the Brand, to which Seller is a party or which are binding
upon the Property, except for any Existing management agreement and the
Existing Franchise Agreement. If the Property consists of an existing hotel,
the Improvements comply with, and the Hotel is being operated in accordance
with, all requirements of the Existing Franchise Agreement and all other
requirements of the Franchisor, including all “brand standard” requirements of
the Franchisor. The Existing Franchise Agreement is in full force and effect,
and shall remain in full force and effect until the termination of the Existing
Franchise Agreement at Closing, as provided in Article V hereof. No default has
occurred and is continuing under any existing management agreement or the
Existing Franchise Agreement, and no circumstances exist which, with the giving
of notice, the lapse of time or both, would constitute such a default. 

16

                    (n)
Architect and Contractor. The Franchisor has approved the Architect to
design the Hotel and the Contractor to serve as the general contractor for the
construction of the Hotel.

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

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

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

                    (c)
Financial Ability. Buyer has the financial ability to perform its
obligations under this Contract and to close the transaction contemplated by
this Contract. Buyer is not now insolvent and will not be rendered insolvent by
the transaction contemplated by this Contract. As used in this section,
“insolvent” means that the sum of the debts and other probable liabilities of
Buyer exceeds the present fair saleable value of Buyer’s assets.

                    (d)
Actions, Suits, Proceedings, Investigations. There is no pending or, to the
Knowledge of Buyer, threatened action, suit, proceeding or investigation before
or by any court, governmental body or agency to restrain or prevent the
consummation of the transactions contemplated under this Contract or that might
affect the right of Buyer to perform its obligations under this Contract.

          7.3
Survival. All of the representations and warranties are true,
correct and complete in all material respects as of the date hereof and the
statements set forth therein (without qualification or limitation as to a
party’s knowledge thereof except as expressly provided for in this Article VII)
shall be true, correct and complete in all material respects as of the Closing
Date. All of the representations and warranties made herein shall survive
Closing for a period of one (1) year and shall not be deemed to merge into or
be waived by any Seller’s Deed or any other closing documents.

ARTICLE
VIII

ADDITIONAL COVENANTS

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

17

          8.2
Construction of Hotel.

                    (a)
Subject to the terms and conditions of this Contract, Seller shall (i)
construct the Hotel on the Land (a) in a good, workmanlike and diligent manner,
(b) in accordance with development standards for comparable projects, (c) in
compliance in all material respects with the Plans and Specifications approved
by Franchisor and with all Legal Requirements and (d) in accordance with all
requirements of the Franchise Agreement and (ii) cause the Hotel to be fully
equipped with the FF&E and otherwise fully furnished and stocked with merchandise,
supplies, inventory and other Personal Property as required by the Franchise
Agreement, including, without limitation, linens, bath towels and other
supplies at least at a 2-par level for all suites or rooms of the Hotel, in
each case such that the Hotel can be opened for business to the public and
operated to full capacity under the Brand. All expenses of constructing,
equipping and furnishing the Hotel in accordance with this Contract shall be
the sole responsibility of Seller, and Buyer shall have no obligation
whatsoever to adjust the Purchase Price or pay any additional costs as a result
of unforeseen events or circumstances affecting the cost of constructing,
equipping or furnishing the Hotel.

          8.3
Plans and Specifications. Prior to the expiration of the Review Period,
Seller shall submit to Buyer and Franchisor the then-current versions of the
plans and specifications for the construction of the Hotel prepared by the
Architect. When finalized by the Architect, but no later than sixty (60) days
after the date of this Contract, Seller shall submit such plans and
specifications to Buyer and Franchisor for approval. Buyer’s approval of such
plans and specifications shall not be unreasonably withheld, conditioned or
delayed, provided such plans and specifications comply with the schematic
design drawings approved by Buyer during the Review Period, comply with all
applicable building codes and comply with Franchisor’s requirements for the
Home2 Suites brand. Buyer shall have thirty (30) days after receipt thereof in
which to approve of such plans and specifications. If Buyer objects to any part
of such plans and specifications, Buyer may provide Seller with written notice
of its objection to same within such thirty (30) day period and Buyer shall
deliver a copy of such written notice simultaneously to Construction Lender. If
Buyer fails to so object in writing to any such matter within such time, it
shall be conclusively assumed that Buyer has approved same and at such time,
Seller shall provide notice of the same to Construction Lender. If Buyer
disapproves any part of the plans and specifications by written objection to
Seller within such thirty (30) day period, Seller shall have the opportunity to
cure such item within thirty (30) days of receiving Buyer’s written notice of
objection. In the event Seller shall fail to cure such item within such thirty
(30) day period, then Buyer may elect: (i) to waive such objection and proceed
to Closing, or (ii) to terminate this Contract and receive a return of the
Earnest Money Deposit, and any interest thereon and Buyer shall notify
Construction Lender in writing of its decision, if applicable. Seller shall
obtain the approval of the Franchisor and Buyer with respect to all subsequent
material changes to such plans and specifications, such approval by Buyer not
to be unreasonably withheld, conditioned or delayed. Such plans and
specifications and all revisions thereto, as approved by the Franchisor and
Buyer, shall constitute the “Plans and Specifications” for purposes of this
Contract.

          8.4
Commencement of Construction; Substantial Completion. Seller shall use
commercially reasonable efforts to obtain, or cause the Contractor to obtain, a
building permit and all other permits, licenses and approvals of governmental
authorities required for the 

18

construction, equipping and furnishing of the Hotel in
accordance with the Plans and Specifications and this Contract, and, if
construction has not already commenced, shall cause the Contractor to commence
construction of the Hotel not later than December 31, 2010. Thereafter, Seller
shall diligently pursue construction of the Hotel in accordance with this
Contract and shall cause the Contractor to Substantially Complete the Hotel no
later than March 31, 2012, subject only to delays caused by Force Majeure.
Seller shall promptly notify Buyer of each event or condition of Force Majeure
and the anticipated delay caused thereby. 

          8.5
Inspections. Buyer shall have the right to inspect the Property to monitor
and observe the development and construction of the Hotel. All such inspections
shall require reasonable prior notice to Seller and shall be conducted in a
manner that will minimize any interference with the development and
construction of the Hotel. Buyer shall indemnify, defend and hold Seller
harmless from and against any and all expenses, costs and liabilities
(including but not limited to reasonable attorneys’ fees) for damage or injury
to persons or property arising out of or relating to its entry onto the Land
for any such inspections.

          8.6
Punch List. Upon notification from the Contractor that the Hotel is
Substantially Completed and ready for inspection, Seller shall prepare a “punch
list” with the assistance of the Architect and the Franchisor. Seller
acknowledges that final acceptance of the work on the Hotel shall be made only
with the approval of Buyer and the Franchisor. The costs of completing the
Punch List Items that are not completed as of the date of Closing, as
reasonably estimated by the Seller with the approval of Buyer, such approval
not to be unreasonably withheld, plus fifty percent (50%) of such costs, shall
be retained by the Title Company from the Purchase Price and shall be disbursed
to Seller only upon Buyer’s reasonable determination that all of the Punch List
Items have been satisfactorily completed. Seller shall correct or complete all
Punch List Items, or cause the same to be corrected or completed, at Seller’s
expense, with all diligence and in any event within sixty (60) days after
Substantial Completion of the Hotel.

          8.7
Pre-Opening Program. It is contemplated that certain activities must be
undertaken prior to the Closing Date so that the Hotel can function in an
orderly and businesslike manner at the Effective Time (“Pre-Opening Program”),
which Pre-Opening Program shall be developed by Buyer and Buyer’s proposed
manager. Seller shall cooperate in good faith with and be responsible for the
costs of the Pre-Opening Program (subject to the limitation contained below)
and shall provide the Franchisor and Buyer reasonable access to the Property at
least six (6) months in advance of the Closing in order to conduct their
activities related to the Pre-Opening Program; provided that the Pre-Opening
Program shall not be permitted to interfere with or delay the activities of
Seller in completing the Hotel. Seller shall pay in a timely manner all costs
associated with the Pre-Opening Program or otherwise related to the pre-opening
operations of the Property, in accordance with the Pre-Opening Budget attached
hereto as Exhibit “I”, up to but not including the Effective Time, regardless
of when such costs are payable, provided, however, that in no event shall
Seller be responsible for such costs in excess of Two Hundred Forty-One
Thousand Eight Hundred Dollars ($241,800.00) (the “Pre-Opening Costs”). Seller
shall also fund all working capital accounts, reserve accounts and other
accounts required under the Management Agreement or the Franchise Agreement, to
be funded before the Effective Time. Notwithstanding the foregoing, at the
Closing, Seller shall receive a credit in an amount equal to all such accounts
funded by Seller before the Closing Date, provided that (i) 

19

such accounts were required by the Franchisor or
otherwise approved by Buyer (which approval shall not be unreasonably
withheld), and (ii) Seller shall not receive a credit for any account to the
extent that the same is intended to cover Pre-Opening Costs.

          8.8
Construction Warranty. At the Closing, to the extent assignable, Seller
shall assign to Buyer all construction warranties with respect to the Hotel,
which assignment shall be in form and substance reasonably satisfactory to
Buyer, including a warranty by the Contractor, for the period ending not sooner
than one (1) year after the date the Hotel is Substantially Completed, in the
form of the warranty attached hereto as Exhibit H (the “Construction
Warranty”). 

          8.9
Other Obligations of Seller Before Closing. From and after the date
hereof through the Closing on the Property Seller shall comply with the
existing management agreement and the Existing Franchise Agreement and keep the
same in full force and effect and shall perform and comply with all of the
following subject to and in accordance with the terms of such agreements:

                    (a)
Advise Buyer promptly of any litigation, arbitration, or administrative hearing
before any court or governmental agency concerning or affecting the Hotel which
is instituted or threatened after the date of this Contract or if any
representation or warranty contained in this Contract shall become false;

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

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

                    (d)
Except with respect to utility and related easements and agreements that do not
interfere with the operation of the Hotel and do not affect the marketability
of title to the Real Property, not sell or assign, or enter into any agreement
to sell or assign, or create or permit to exist any lien or encumbrance (other
than a Permitted Exception) on, the Property or any portion thereof; and

                    (e)
Not allow any permit, receipt, license, franchise or right currently in
existence with respect to the construction, use, occupancy or maintenance of
the Hotel to expire, be canceled or otherwise terminated.

                    (f)
Seller shall not, without first obtaining the written approval of Buyer, which
approval shall not be unreasonably withheld, enter into any FF&E Leases,
Service Contracts, Leases or other contracts or agreements related to the
Hotel, or extend any existing such agreements, unless such agreements (x) can
be terminated, without penalty, upon thirty (30) days’ prior notice or (y) will
expire prior to the Closing Date.

          8.10 Third Party Consents. Prior to the Closing Date, Seller shall,
at its expense, (i) obtain any and all third party consents and approvals (x)
required in order to transfer the Hotel to 

20

Buyer, or (y) which, if not obtained, would materially
adversely affect the operation of the Hotel and (ii) use best efforts to obtain
all other third party consents and approvals (all of such consents and
approvals in (i) and (ii) above being referred to collectively as, the “Third
Party Consents”).

          8.11 Access to Financial Information. Buyer’s representatives
shall have access to, and Seller and its affiliates shall cooperate with Buyer
and furnish upon request, all financial and other information relating to the
Hotel’s operations to the extent necessary to enable Buyer’s representatives to
prepare audited financial statements in conformity with Regulation S-X of the
Securities and Exchange Commission (the “SEC”) and other applicable rules and
regulations of the SEC and to enable them to prepare a registration statement,
report or disclosure statement for filing with the SEC on behalf of Buyer or
its Affiliates, whether before or after Closing and regardless of whether such
information is included in the Records to be transferred to Buyer hereunder.
Seller shall also provide to Buyer’s representative a signed representation
letter in form and substance reasonably acceptable to Seller sufficient to
enable an independent public accountant to render an opinion on the financial
statements related to the Hotel. Buyer will reimburse Seller for costs
reasonably incurred by Seller to comply with the requirements of the preceding
sentence to the extent that Seller is required to incur costs not in the
ordinary course of business for third parties to provide such representation
letter. The provisions of this Section shall survive Closing or termination of
this Contract.

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

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

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

	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 

21

	
  

 	
  

 
	
  

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

 

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

	
  

 	
  

 
	
  

 	
                     (i)
 the breach of any representation, warranty, covenant or agreement of Buyer
 contained in this Contract; 

 
	
  

 	
  

 
	
  

 	
                     (ii)
 the conduct and operation by or on behalf of Buyer of the Hotel or the
 ownership, use or operation of the Property after the Closing; and

 
	
  

 	
  

 
	
  

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

 

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

	
  

 	
  

 
	
  

 	
                     (i)
 The party seeking indemnification (the “Indemnified Party”) shall give prompt
 written notice to the party or parties from which it is seeking
 indemnification (the “Indemnifying Party”) of any assertion of liability by a
 third party which might give rise to a claim for indemnification based on the
 foregoing provisions of this Section 8.13, which notice shall state the
 nature and basis of the assertion and the amount thereof, to the extent
 known; provided, however, that no delay on the part of the Indemnified Party
 in giving notice shall relieve the Indemnifying Party of any obligation to
 indemnify unless (and then solely to the extent that) the Indemnifying Party
 is prejudiced by such delay.

 
	
  

 	
  

 
	
  

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

 

22

	
  

 	
  

 
	
  

 	
 request from time to time. If the Indemnifying Party
 undertakes to settle, compromise or defend any such asserted liability, it
 shall notify such Indemnified Party in writing of its intention to do so
 within thirty (30) days of notice from such Indemnified Party provided above.

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 

          8.14
Escrow Funds. To provide for the timely payment of any
post-closing claims by Buyer against Seller hereunder, at Closing, an amount
equal to Two Hundred Thousand and No/100 Dollars ($200,000.00) (the “Escrow
Funds”) shall be withheld from the Purchase Price payable to a
Seller and shall be deposited for a period of one (1) year in an escrow account
with the Title Company pursuant to an escrow agreement reasonably satisfactory
in form and 

23

substance to Buyer and Seller (the “Post-Closing
Agreement”), which escrow and Post-Closing Agreement shall be
established and entered into at Closing and shall be a condition to Buyer’s
obligations under this Contract. If no claims have been asserted by Buyer
against Seller, or all such claims have been satisfied, within such one-year
period, the Escrow Funds deposited by the Seller shall be released to the
Seller. 

ARTICLE
IX

CONDITIONS FOR CLOSING

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

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

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

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

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

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

                    (f)
The Hotel shall be Substantially Completed.

                    (g)
Any existing management agreement and the Existing Franchise Agreement shall
have been terminated

                    (h)
The Franchisor shall have executed and delivered the Franchise Agreement as
provided in Article V.

24

                    (i)
Buyer shall have obtained an as-built plat of survey of the Property completed,
dated within 30 days of the Closing Date and prepared in compliance with the
then-current ALTA/ACSM standards for urban properties, and such plat of survey
shall not disclose any encroachments, boundary line discrepancies or other
survey matters that, in Buyer’s reasonable judgment, would materially adversely
affect the use, operation or value of the Property and did not exist as of the
date that Buyer first received such survey.

                    (j)
Buyer shall have obtained an ALTA owner’s title insurance policy (or, if an
ALTA form of policy is not customarily issued in the state in which the Real
Property is located, in the form customarily issued in such state), issued by
the Title Company pursuant to the Title Commitment, insuring Buyer’s fee simple
ownership in the Real Property (i) with an effective date as of the Closing
Date, (ii) with no exceptions for filed or unfiled mechanics’ and materialmen’s
liens, (iii) with no exceptions for encroachments or other matters of survey
unless existing as of the date that Buyer first received the Title Commitment
and disclosed by the Title Commitment or approved by Buyer and (iv) with no
other exceptions to title other than the Permitted Exceptions and normal and
customary utility and similar easements and agreements.

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

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

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

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

ARTICLE
X

CLOSING AND CONVEYANCE

          10.1
Closing. Unless otherwise agreed by Buyer and Seller, the Closing
on the Property shall occur on the date on which the Hotel opens for business
to the public in accordance with the Franchise Agreement, or as soon as
practical thereafter, but in no event later 

25

than fifteen (15) Business Days after Substantial
Completion of the Hotel, provided that all conditions to Closing by Buyer
hereunder have been satisfied. Buyer will provide Seller at least five (5) days
prior written notice of the Closing Date selected by Buyer. The date on which
the Closing is to occur as provided in this Section 10.1, or such other date as
may be agreed upon by Buyer and Seller, is referred to in this Contract as the
“Closing
Date” for the Property. The Closing shall be held at 10:00 a.m.
at the offices of the Title Company, or as otherwise determined by Buyer and
Seller. Regardless of the Closing Date, the Closing shall be effective as of
12:01 a.m. on the date which is the later of (i) the Substantial Completion
Date or (ii) the date on which the Hotel opens for business to the public in
accordance with the Franchise Agreement (the “Effective Time”).

          10.2
Deliveries of Seller. At Closing, Seller shall deliver to Buyer
the following, and, as appropriate, all instruments shall be properly executed
and conveyance instruments to be acknowledged in recordable form (the terms,
provisions and conditions of all instruments not attached hereto as Exhibits
shall be mutually agreed upon by Buyer and Seller prior to such Closing):

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

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

                    (c)
Existing Management and Franchise Agreement. The termination of the
existing management agreement and the Existing Franchise Agreement.

                    (d)
General Assignments. Assignments of all of Seller’s right, title and
interest in and to all FF&E Leases, Service Contracts and Leases identified
on Exhibit C hereto (the “Hotel Contracts”). The assignment shall
also be a general assignment and shall provide for the assignment of all of
Seller’s right, title and interest in all Records, Warranties, Licenses,
Tradenames, Contracts, Plans and Specs and all other intangible Personal
Property applicable to the Hotel.

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

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

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

26

and estoppel certificates from tenants under Leases
and the lessors under FF&E Leases in form and substance acceptable to
Buyer.

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

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

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

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

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

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

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

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

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

27

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

ARTICLE
XI

COSTS

All Closing costs
shall be paid as set forth below:

          11.1
Seller’s Costs. In connection with the sale of the Property
contemplated under this Contract, Seller shall be responsible for all transfer
and recordation taxes, including, without limitation, all transfer, sales, use
and bulk transfer taxes or like taxes on or in connection with the transfer of
the Real Property and the Personal Property constituting part of the Property
pursuant to the Bill of Sale, in each case except as otherwise provided in
Section 12, and all accrued taxes of Seller prior to Closing and income, sales
and use taxes and other such taxes of Seller attributable to the sale of the
Property to Buyer. Seller shall be responsible for all costs related to the
termination of any existing management agreement and the Existing Franchise
Agreement as provided in Article V. Seller shall also be responsible for any
costs and expenses of its attorneys, accountants, appraisers and other
professionals, consultants and representatives. Seller shall also be
responsible for payment of all prepayment penalties and other amounts payable
in connection with the pay-off of any liens and/or indebtedness encumbering the
Property. Seller shall also be responsible for all Pre-Opening Costs to the
extent provided in Section 8.7. Seller shall pay the sales/use taxes attributed
to the transfer of the Personal Property.

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

ARTICLE
XII

ADJUSTMENTS

          12.1
Adjustments. Unless otherwise provided herein, at Closing,
adjustments between the parties of the income and expenses related to the
Property shall be made as of the Effective Time, all as set forth below. All of
such adjustments and allocations shall be made in cash at Closing and shall be
collected through and/or adjusted in accordance with the terms of the existing
management agreement. Except as otherwise expressly provided herein, all
apportionments and adjustments shall be made on an accrual basis in accordance
with generally accepted accounting principles. 

                    (a)
Taxes. All real estate taxes, personal property taxes, or any other
taxes and special assessments (special or otherwise) of any nature upon the
Property levied, assessed or pending for the calendar year in which the Closing
occurs (including the period prior to Closing, regardless of when due and
payable) shall be prorated as of the Effective Time and, if no tax bills or
assessment statements for such calendar year are available, such amounts shall
be 

28

estimated on the basis of the best available
information for such taxes and assessments that will be due and payable on the
Hotel for the calendar year in which Closing occurs.

                    (b)
Utilities. All suppliers of utilities shall be instructed to read meters
or otherwise determine the charges owing as of the Effective Time for services
prior thereto, which charges shall be allocated to Seller. Charges accruing
after the Effective Time shall be allocated to Buyer. If elected by Seller,
Seller shall be given credit, and Buyer shall be charged, for any utility
deposits transferred to and received by Buyer at Closing.

                    (c)
Income/Charges. All rents, income and charges receivable or payable
under any Leases and Hotel Contracts applicable to the Property, and any
deposits, prepayments and receipts thereunder, shall be prorated between Buyer
and Seller as of the Effective Time.

                    (d)
Accounts. All working capital accounts, reserve accounts and escrow
accounts (including all FF&E accounts), petty cash, cash in cash registers
and cash in vending machines but excluding amounts held in tax and insurance
escrow accounts and utility deposits to the extent excluded from the definition
of Deposits) held by or on behalf of Seller, the Manager or the Franchisor with
respect to the Hotel shall become the property of Buyer at Closing without
Buyer being required to fund the same. Notwithstanding the foregoing, at the
Closing, Seller shall receive a credit in an amount equal to all such accounts
funded by Seller before the Closing Date, provided that (i) such accounts were
required by the Franchisor or otherwise approved by Buyer (which approval shall
not be unreasonably withheld), and (ii) Seller shall not receive a credit for
any account to the extent the same is intended to cover Pre-Opening Costs for
which Seller is responsible and which have not been paid as of the Closing.

                    (e)
Advance Deposits, etc. All income generated by the Hotel, including
receipts from guest room or suite rentals, all prepaid rentals, room rental
deposits, and all other deposits for advance registration, banquets or services,
whether attributable to the period before the Effective Time or to the period
after the Effective Time, shall be credited to Buyer. 

                    (f)
Other Costs. All other costs attributable to the period before the
Effective Time, including the cost of property and liability insurance and all
Pre-Opening Costs, shall be allocated to Seller (subject to the limitations
provided in Section 8.7), and all costs attributable to the period after the
Effective Time shall be allocated to Buyer. 

                    (g)
Accounts Payable. Any indebtedness, accounts payable, liabilities or obligations of any kind or
nature related to the Seller or the Property for the periods prior to the
Effective Time shall be allocated to the Seller.

          12.2
Reconciliation and Final Payment. Seller and Buyer shall
reasonably cooperate after Closing to make a final determination of the
allocations and prorations required under this Contract within one hundred
twenty (120) days after the Closing Date. Upon the final reconciliation of the
allocations and prorations under this Section, the party which owes the other
party any sums hereunder shall pay such party such sums within ten (10) days
after the reconciliation of such sums. The obligations to calculate such prorations,
make such reconciliations and pay any such sums shall survive the Closing.

29

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

ARTICLE
XIII

CASUALTY AND CONDEMNATION

          13.1
Risk of Loss; Notice. Prior to Closing and the delivery of
possession of the Property to Buyer in accordance with this Contract, all risk
of loss to the Property (whether by casualty, condemnation or otherwise) shall
be borne by Seller. In the event that (a) any loss or damage to the Hotel shall
occur prior to the Closing Date as a result of fire or other casualty, or (b)
Seller receives notice that a governmental authority has initiated or
threatened to initiate a condemnation proceeding affecting the Hotel, Seller
shall give Buyer immediate written notice of such loss, damage or condemnation
proceeding (which notice shall include a certification of (i) the amounts of
insurance coverages in effect with respect to the loss or damage and (ii) if
known, the amount of the award to be received in such condemnation).

          13.2
Buyer’s Termination Right. If, prior to Closing and the delivery
of possession of the Property to Buyer in accordance with this Contract, (a)
any condemnation proceeding shall be pending against a substantial portion of
the Hotel or (b) there is any substantial casualty loss or damage to the Hotel,
Buyer shall have the option to terminate this Contract, provided Buyer delivers
written notice to Seller of its election within twenty (20) days after the date
Seller has delivered Buyer written notice of any such loss, damage or
condemnation as provided above, and in such event, the Earnest Money Deposit,
and any interest thereon, shall be delivered to Buyer and thereafter, except as
expressly set forth herein, no party shall have any further obligation or
liability to the other under this Contract. In the context of condemnation,
“substantial” shall mean condemnation of such portion of the Hotel (or access
thereto) as could, in Buyer’s reasonable judgment, render use of the remainder
impractical or unfeasible for the uses herein contemplated, and, in the context
of casualty loss or damage, “substantial” shall mean a loss or damage in excess
of Three Hundred Thousand and No/100 Dollars ($300,000.00) in value, provided,
however, that no casualty loss or damage shall be “substantial” if such
casualty loss or damage is capable of being cured by Seller prior to Closing.

30

          13.3
Procedure for Closing. If Buyer shall not timely elect to
terminate this Contract under Section 13.2 above, or if the loss, damage or
condemnation is not substantial, Seller agrees to pay to Buyer at the Closing
all insurance proceeds or condemnation awards which Seller has received as a
result of the same, plus an amount equal to the insurance deductible (if such
amount shall not have already been paid to the insurer) and assign to Buyer all
insurance proceeds and condemnation awards payable as a result of the same
(subject to Construction Lender’s approval), in which event the Closing shall
occur without Seller replacing or repairing such damage. In the case of damage
or casualty, at Buyer’s election, Seller shall repair and restore the Property
to its condition immediately prior to such damage or casualty and shall assign
to Buyer all excess insurance proceeds. Notwithstanding anything to the
contrary in this Section 13.3, all insurance proceeds and condemnation awards
shall be paid to Construction Lender pursuant to the Construction Loan
documents, until such time as the Construction Loan has been paid in full.

ARTICLE
XIV

DEFAULT REMEDIES

          14.1
Buyer Default. If Buyer defaults under this Contract after the
Review Period, and such default continues for fifteen (15) days following
written notice from Seller (provided no notice shall extend the time for
Closing), then at Seller’s election by written notice to Buyer, (i) this
Contract shall be terminated and of no effect, in which event the Earnest Money
Deposit, including any interest thereon, shall be paid to and retained by the
Seller as Seller’s sole and exclusive remedy hereunder, and as liquidated
damages for Buyer’s default or failure to close, and both Buyer and Seller
shall thereupon be released from all obligations hereunder or (ii) Seller may
treat this Contract as being in full force and effect by written notice to
Buyer delivered to Buyer at any time prior to the completion of such cure, in
which event the Seller shall have the right to an action against Buyer for
specific performance.

          14.2
Seller Default. If Seller defaults under this Contract, and such
default continues for thirty (30) days following written notice from Buyer to
Seller and Construction Lender, Buyer may elect, as Buyer’s sole and exclusive
remedy, either (i) to terminate this Contract by written notice to Seller and
Construction Lender, delivered to Seller and Construction Lender at any time
prior to the completion of such cure, in which event the Earnest Money Deposit,
including any interest thereon, shall be returned to the Buyer, and thereafter
both the Buyer and Seller shall thereupon be released from all obligations with
respect to this Contract, except as otherwise expressly provided herein; or
(ii) to treat this Contract as being in full force and effect by written notice
to Seller and Construction Lender, delivered to Seller and Construction Lender
at any time prior to the completion of such cure, in which event the Buyer
shall have the right to an action against Seller for specific performance and
all other rights and remedies available at law or in equity.

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

31

ARTICLE
XV

NOTICES

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

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 If to Buyer:

 	
  

 	
 Apple Suites Realty Group, Inc.

 814 E. Main Street

 Richmond, Virginia 23219

 Attention: Sam Reynolds

 Fax No.: (804) 344-8129

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 with a copy to:

 	
  

 	
 Apple Suites Realty Group, Inc.

 814 E. Main Street

 Richmond, Virginia 23219

 Attention: Legal Dept.

 Fax No.: (804) 344-8129

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 AND

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 RBC Bank (USA)

 131 N. Church Street

 Rocky Mount, NC 27807

 Attention: W. Mahler Thorp

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 If to Seller:

 	
  

 	
 The Generation Companies, LLC

 1822 N.C. Highway 54 East, Suite 300

 Durham, North Carolina 27713

 Attention: H. Mark Daley, III

 Fax No.: (919) 361-9009

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 with a copy to:

 	
  

 	
 Poyner Spruill LLP

 301 Fayetteville Street, Suite 1900

 Raleigh, North Carolina 27601

 Attention: Joseph B. Dempster, Jr.

 Fax No.: (919) 783-1075

 

32

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 AND

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 RBC Bank (USA)

 131 N. Church Street

 Rocky Mount, NC 27807

 Attention: W. Mahler Thorp 

 

Addresses may be changed by the parties hereto by
written notice in accordance with this Section. Any notice allowed hereunder
may be given by a party’s legal counsel.

ARTICLE
XVI

MISCELLANEOUS

          16.1
Performance. Time is of the essence in the performance and
satisfaction of each and every obligation and condition of this Contract.

          16.2
Binding Effect; Assignment. This Contract shall be binding upon
and shall inure to the benefit of each of the parties hereto, their respective
successors and assigns. Notwithstanding the foregoing, neither Buyer nor Seller
may assign its interest in this Contract or any of its rights or duties
hereunder without the prior written consent of the other party, which consent
shall not be unreasonably withheld, conditioned or delayed, except as follows

                    (a)
Seller may assign, and Buyer’s consent shall not be required in connection
with: (i) an assignment of Seller’s interests hereunder to a newly-formed
entity in which Seller has an ownership interest and is the controlling officer
or member, and (ii) an assignment of Seller’s interests hereunder to
Construction Lender (as defined below).

                    (b)
Buyer may assign, and neither Seller’s nor Construction Lender’s consent shall
be required in connection with an assignment of Buyer’s interests hereunder to
a newly-formed entity in which Buyer or its upstream affiliates has a 100%
ownership interest; provided, however, no assignment shall relieve Buyer of its
obligations hereunder.

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

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

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

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

33

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

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

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

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

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

          16.11
(Intentionally Omitted)

          16.12
Further Acts. In addition to the acts, deeds, instruments and
agreements recited herein and contemplated to be performed, executed and
delivered by Buyer and Seller, Buyer and Seller shall perform, execute and
deliver or cause to be performed, executed and delivered at the Closing or
after the Closing, any and all further acts, deeds, instruments and agreements
and provide such further assurances as the other party or the Title Company may
reasonably require to consummate the transaction contemplated hereunder
provided that such acts, deeds, instruments or agreements are at no expense to
the parties hereto, do not waive any right or remedy of the parties hereto and
do not submit the parties hereto to liability.

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

          16.14
Notice of Proposed Listing. In the event that the sale of the
Property contemplated by this Contract is consummated, if at any time during
the five (5) year period commencing on the date of execution of this Contract
by Buyer and Seller, Seller or any of its 

34

Affiliates propose to list for sale any Hilton or
Marriott-branded hotel property or properties owned, acquired, constructed or
developed by Seller or its Affiliates and located within a ten (10)-mile radius
of the Hotel (any such other hotel property being referred to as an “Other
Property”), Seller shall promptly deliver to Buyer written
notice thereof and Buyer shall have the right to see and participate in the
offering and/or otherwise make an offer to purchase any such Other Property.

          16.15
Construction Loan.

                    (a)
As a condition to Closing in favor of Buyer and Seller, Seller shall have
secured financing sufficient for the construction of the Hotel (the “Construction
Loan”) on terms and conditions acceptable to Seller in its sole
and absolute discretion. Should Seller be unable to secure such financing on
terms acceptable to Seller in its sole and absolute discretion, on or before
December 31, 2010, then any time prior to January 31, 2011 Buyer or Seller may
terminate this Contract by written notice to the other, whereupon: (i) the
Earnest Money Deposit shall be promptly returned by Escrow Agent to Buyer
together with all accrued interest, if any, (ii) Seller shall reimburse Buyer
for its out of pocket diligence costs in an amount not to exceed $25,000, (iii)
this Contract shall be terminated automatically, (iv) all materials supplied by
Seller to Buyer shall be returned promptly to Seller, and (v) both parties will
be relieved of all other rights, obligations and liabilities hereunder, except
for the parties’ respective obligations pursuant to Sections 3.3 and 16.6
above.

          16.16
No Third Party Beneficiary. No agreement or funding arrangement
between Seller and Construction Lender shall be construed as existing for the
benefit of Buyer or be enforceable by Buyer. 

          16.17
Title to Land. Buyer acknowledges that as of the date of this
Contract, Seller does not own legal title to the Land; however, Seller warrants
that it has entered into a contract to acquire the Land on or about December
31, 2010 (the “Land Agreement”). If this Contract has not been earlier
terminated, Seller shall provide Buyer with not more than 10 days prior notice
of imminent closing on the Land pursuant to the Land Agreement whereupon Buyer
shall within two (2) business days prior to the closing under the Land
Agreement, deposit the Additional Deposit with Escrow Agent. Notwithstanding
anything contained herein to the contrary, if Seller does not acquire legal
title to the Land on or before December 31, 2010, then any time prior to
January 31, 2011(but in any event before Seller acquires legal title to the
Land), Buyer may terminate this Contract by written notice to Seller,
whereupon: (i) the Earnest Money Deposit shall be promptly returned by Escrow
Agent to Buyer together with all accrued interest, if any, (ii) Seller shall
reimburse Buyer for its out of pocket diligence costs in an amount not to
exceed $50,000, (iii) this Contract shall be terminated automatically, (iv) all
materials supplied by Seller to Buyer shall be returned promptly to Seller, and
(v) both parties will be relieved of all other rights, obligations and
liabilities hereunder, except for the parties’ respective obligations pursuant
to Sections 3.3 and 16.6 above.

[Signatures Begin
on Following Page]

35

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

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 BUYER:

 
	
  

 	
  

 	
  

 
	
  

 	
 APPLE SUITES REALTY GROUP, INC., a Virginia
 corporation

 
	
  

 	
  

 	
  

 
	
  

 	
 By: 

 	
 /s/ David Buckley

 	
  

 
	
  

 	
  

 	

 

 	
  

 
	
  

 	
 Name: David Buckley

 
	
  

 	
 Title: Vice President

 
	
  

 	
  

 	
  

 
	
  

 	
 SELLER:

 
	
  

 	
  

 	
  

 
	
  

 	
 THE GENERATION COMPANIES, LLC, 

 
	
  

 	
 a North Carolina limited liability company

 
	
  

 	
  

 	
  

 
	
  

 	
 By: 

 	
 /s/ H. Mark Daley III

 	
  

 
	
  

 	
  

 	

 

 	
  

 
	
  

 	
 Name: H. Mark Daley III

 
	
  

 	
 Title: President

 

36

EXHIBIT “A”

LEGAL
DESCRIPTION OF LAND

EXHIBIT B

LIST OF FF&E

To be provided by
Seller at least 15 Business Days prior to Closing

EXHIBIT C

LIST OF HOTEL CONTRACTS

EXHIBIT C-1 - Seller’s Hotel Contracts

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

EXHIBIT C-2 - Other Hotel Contracts

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

EXHIBIT D

CONSENTS AND APPROVALS

          A.
Consents Under Hotel Contracts

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

          B.
Consents Under Other Contracts

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

          C.
Governmental Approvals and Consents

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

EXHIBIT E

ENVIRONMENTAL REPORTS

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

EXHIBIT F

CLAIMS OR LITIGATION PENDING

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

EXHIBIT G

ESCROW AGREEMENT

	
  

 	
  

 
	
  

 	
           THIS ESCROW AGREEMENT
 (this “Agreement”) made the ___ day of _______, 2010 by and among THE
 GENERATION COMPANIES, LLC, a North Carolina limited liability company
 (“Seller”), APPLE __________________________, a Virginia corporation, or its
 assigns (“Buyer”), and CHICAGO TITLE COMPANY (“Escrow Agent”).

 
	
  

 	
 R E C I T A L S

 
	
  

 	
  

 
	
  

 	
           WHEREAS,
 pursuant to the provisions of Section 2.5 of that certain Purchase Contract
 dated _______ ___, 2010 (the “Contract”) between Seller and Buyer (the
 “Parties”), the Parties have requested Escrow Agent to hold in escrow in
 accordance with the provisions, upon the terms, and subject to the
 conditions, of this Agreement, the Earnest Money Deposit as defined in the
 Contract (the “Deposit”); and

 
	
  

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

 
	
  

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

 

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

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

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

                         B.
If at any time after the expiration of the Review Period, Buyer claims
entitlement to all or any portion of the Deposit, Buyer shall give written
notice to Escrow Agent stating that Seller has defaulted in the performance of
its obligations under the Contract beyond the applicable grace period, if any,
or that Buyer is otherwise entitled to the return of the Deposit or applicable
portion thereof and shall direct Escrow Agent to return the Deposit or applicable
portion thereof to Buyer (the “Buyer’s Notice”). Escrow Agent shall promptly
deliver a copy of Buyer’s Notice to Seller. Seller shall have five (5) business
days after receipt of the copy of Buyer’s Notice to deliver written notice to
Escrow Agent and Buyer objecting to the 

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

                         C.
If, at any time after the expiration of the Review Period, Seller claims
entitlement to the Deposit or applicable portion thereof, Seller shall give
written notice to Escrow Agent stating that Buyer has defaulted in the
performance of its obligations under the Contract, and shall direct Escrow
Agent to release the Deposit or applicable portion thereof to Seller (the
“Seller’s Notice”). Escrow Agent shall promptly deliver a copy of Seller’s
Notice to Buyer. Buyer shall have five (5) business days after receipt of the
copy of Seller’s Notice to deliver written notice to Escrow Agent and Seller
objecting to the release of the Deposit or applicable portion thereof to Seller
(“Buyer’s Objection Notice”). If Escrow Agent does not receive a timely Buyer’s
Objection Notice, Escrow Agent shall release the Deposit or applicable portion
thereof to Seller. If Escrow Agent does receive a timely Seller’s Objection
Notice, Escrow Agent shall release the Deposit or applicable portion thereof
only upon receipt of, and in accordance with, written instructions signed by
Buyer and Seller, or the final order of a court of competent jurisdiction.

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

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

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

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

2

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

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

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

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

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 If addressed to Seller, to:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 The Generation Companies, LLC

 1822 N.C. Highway 54 East, Suite 300

 Durham, North Carolina 27713

 Attention: H. Mark Daley, III

 Fax No.: (919) 361-9009

 

3

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 with a copy to:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Poyner Spruill LLP

 301 Fayetteville Street, Suite 1900

 Raleigh, North Carolina 27601

 Attention: Joseph B. Dempster, Jr.

 Fax No.: (919) 783-1075

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (ii)

 	
 If addressed to Buyer, to:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Apple Suites Realty Group, Inc.

 
	
  

 	
  

 	
 814 E. Main Street

 
	
  

 	
  

 	
 Richmond, Virginia 23219

 
	
  

 	
  

 	
 Attn: Nelson Knight

 
	
  

 	
  

 	
 Fax No.: (804) 344-8129

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 with a copy to:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Apple Suites Realty Group, Inc.

 
	
  

 	
  

 	
 814 E. Main Street

 
	
  

 	
  

 	
 Richmond, Virginia 23219

 
	
  

 	
  

 	
 Attn: Legal Dept.

 
	
  

 	
  

 	
 Fax No.: (804) 344-8129

 
	
  

 	
  

 	
  

 
	
  

 	
 (iii)

 	
 If addressed to Escrow Agent, to:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Chicago Title Company

 
	
  

 	
  

 	
 Attn: Debby Moore

 
	
  

 	
  

 	
 5501 LBJ Freeway, Ste. 200

 
	
  

 	
  

 	
 Dallas, Texas 75240

 
	
  

 	
  

 	
 Fax No.: (214) 570-0210

 

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

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

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

[Signature on Next
Page]

4

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

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 SELLER:

 
	
  

 	
  

 
	
  

 	
 THE GENERATION COMPANIES, LLC

 
	
  

 	
  

 
	
  

 	
 By: 

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
 Name: 

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
 Title: 

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
  

 
	
  

 	
 BUYER:

 
	
  

 	
  

 
	
  

 	
 APPLE SUITES REALTY GROUP, INC.

 
	
  

 	
  

 
	
  

 	
 By: 

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
 Name: 

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
 Title: 

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
  

 
	
  

 	
 ESCROW
 AGENT:

 
	
  

 	
  

 
	
  

 	
 CHICAGO TITLE COMPANY

 
	
  

 	
  

 
	
  

 	
 By: 

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
 Name: 

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
 Title: 

 	
  

 
	
  

 	
  

 	

 

 

5

EXHIBIT H

CONSTRUCTION WARRANTY

          The
Contractor hereby warrants to Seller and Buyer that all materials and equipment
furnished with respect to the Property are new and the work performed by the
Contractor with respect to the Property is of good and workmanlike quality,
free from faults and defects, and in conformance with all contract documents.
Work not conforming to these requirements, including substitutions not properly
approved and authorized, may be considered defective. The foregoing warranty
excludes remedy for damage or defect caused by abuse, modifications not
executed by the Contractor, improper or insufficient maintenance, improper
operation, or normal wear and tear and normal usage. If required by Seller or
Buyer, the Contractor shall furnish satisfactory evidence as to the kind and
quality of materials and equipment.

          The
Contractor hereby guarantees to Seller and Buyer all work performed and
materials and equipment furnished with respect to the Property against defects
in materials and workmanship for a period of one year from the date of
substantial completion of the entire Property, or for a longer period if so
specified in the contract documents.

          The
Contractor shall, within a reasonable time after receipt of written notice
thereof, and without reimbursement under the construction contract, make good
any defects in materials, equipment and workmanship which may develop within
periods for which said material, equipment and workmanship are guaranteed and
make good any damage to other work caused by the repairing of such defects.

1

EXHIBIT I

PRE-OPENING BUDGET

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 BUDGET

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	

 

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Guest Supply--Rooms

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 40,000

 	
  

 
	
 Guest Room & Pool Linen

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 55,000

 	
  

 
	
 Restaurant/ Displayware/Flatware/Small Wares

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 15,000

 	
  

 
	
 P & G--Laundry & Housekeeping Supplies

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 2,800

 	
  

 
	
 Rising Signs/Focus Services

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 5,000

 	
  

 
	
 Snack Shop Supplies

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 2,300

 	
  

 
	
 Business Center Computers/Printer

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 2,200

 	
  

 
	
 Sysco--Breakfast food

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 2,500

 	
  

 
	
 HD Supply-Maintenance

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 9,000

 	
  

 
	
 Staff Uniforms

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 5,000

 	
  

 
	
 Front Desk

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 7,000

 	
  

 
	
 Memberships & Promotional items

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 4,000

 	
  

 
	
 Pre-Opening Advertising/Sales

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 6,000

 	
  

 
	
 Hilton Training

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 22,000

 	
  

 
	
 Preopening Payroll **

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 60,000

 	
  

 
	
 Pre-Opening Travel

 	
  

 	
  

 	
  

 	
  

 	
 $

 	
 4,000

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	

 

 	

 

 	
  

 
	
  

 
	
 Total

 	
  

 	
  

 	
 Total

 	
  

 	
 $

 	
 241,800

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	

 

 	

 

 	
  

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ** Pre
 Opening Payroll

 	
  

 	
 Budget

 	
  

 
	

 

 	

 

 	

 

 	

 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 General Manager

 	
  

 	
 $

 	
 23,000

 	
  

 
	
 Director of Sales

 	
  

 	
 $

 	
 13,300

 	
  

 
	
 Guest Service Manager

 	
  

 	
 $

 	
 3,500

 	
  

 
	
 House Keeping Manager

 	
  

 	
 $

 	
 2,500

 	
  

 
	
 Maintenance Engineer

 	
  

 	
 $

 	
 2,500

 	
  

 
	
 Front Desk& Audit

 	
  

 	
 $

 	
 7,200

 	
  

 
	
 Room Attendant & Laundry

 	
  

 	
 $

 	
 7,000

 	
  

 
	
 Houseman

 	
  

 	
 $

 	
 1,000

 	
  

 
	
 Total

 	
  

 	
 $

 	
 60,000

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