Document:

Exhibit
10.19

TownePlace Suites Columbia Southeast/Fort Jackson

250 East Exchange Blvd.

Columbia, South Carolina 29209

HOTEL
LEASE AGREEMENT

EFFECTIVE
MARCH 25, 2011

BETWEEN

APPLE TEN BUSINESS TRUST

A VIRGINIA BUSINESS TRUST

AS LESSOR

AND

APPLE
TEN HOSPITALITY MANAGEMENT, INC.

A VIRGINIA CORPORATION

AS LESSEE

TABLE
OF CONTENTS

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
PAGE

	
 

	
ARTICLE 1 LEASED PROPERTY; OTHER
DEFINITIONS

	
 

	
1

	
 

	
1.1 

	
Leased Property

	
 

	
1

	
 

	
1.2.

	
Definitions

	
 

	
2

	
ARTICLE 2 TERM; TERMINATION

	
 

	
14

	
 

	
2.1.

	
Term

	
 

	
14

	
 

	
2.2.

	
Lessor’s Option to Terminate Lease

	
 

	
15

	
 

	
2.3.

	
Transition Procedures

	
 

	
15

	
 

	
2.4.

	
Holding Over

	
 

	
17

	
ARTICLE 3 RENT; RENT ADJUSTMENTS

	
 

	
18

	
 

	
3.1.

	
Rent

	
 

	
18

	
 

	
3.2.

	
Confirmation of Percentage Rent

	
 

	
21

	
 

	
3.3.

	
Additional Charges

	
 

	
21

	
 

	
3.4.

	
Net Lease; No Termination, Abatement, Etc.

	
 

	
22

	
 

	
3.5.

	
Material Changes in Economic Climate

	
 

	
22

	
 

	
3.6.

	
Rent Adjustment: Basic Assumptions Incorrect

	
 

	
24

	
ARTICLE 4 ANNUAL BUDGETS; BOOKS
AND RECORDS

	
 

	
25

	
 

	
4.1.

	
Annual Budget

	
 

	
25

	
 

	
4.2.

	
Books and Records

	
 

	
25

	
ARTICLE 5 IMPOSITIONS; HOTEL COSTS

	
 

	
26

	
 

	
5.1.

	
Payment of Impositions

	
 

	
26

	
 

	
5.2.

	
Notice of Impositions

	
 

	
27

	
 

	
5.3.

	
Adjustment of Impositions

	
 

	
27

	
 

	
5.4.

	
Utility Charges

	
 

	
27

	
 

	
5.5.

	
Insurance Premiums

	
 

	
27

	
 

	
5.6.

	
Franchise Fees

	
 

	
27

	
 

	
5.7.

	
Ground Rent

	
 

	
27

	
ARTICLE 6 LEASED PROPERTY; LESSEE’S
PERSONAL PROPERTY

	
 

	
27

	
 

	
6.1.

	
Ownership of the Leased Property

	
 

	
27

	
 

	
6.2.

	
Lessee’s Personal Property

	
 

	
27

	
 

	
6.3.

	
Lessor’s Lien

	
 

	
28

	
 

	
6.4.

	
Lessor’s Option to Purchase Assets of Lessee

	
 

	
28

	
ARTICLE 7 CONDITION AND USE OF
LEASED PROPERTY

	
 

	
29

	
 

	
7.1.

	
Condition of the Leased Property

	
 

	
29

	
 

	
7.2.

	
Use of the Leased Property

	
 

	
29

	
 

	
7.3.

	
Lessor to Grant Easements, Etc.

	
 

	
30

	
ARTICLE 8 LESSEE’S COMPLIANCE WITH
LAW; ENVIRONMENTAL COVENANTS

	
 

	
30

	
 

	
8.1.

	
Compliance with Legal and Insurance Requirements,
Etc.

	
 

	
30

	
 

	
8.2.

	
Legal Requirement Covenants

	
 

	
31

	
 

	
8.3.

	
Environmental Covenants

	
 

	
32

	
ARTICLE 9 MAINTENANCE AND REPAIRS;
ENCROACHMENTS AND RESTRICTIONS

	
 

	
34

	
 

	
9.1.

	
Maintenance and Repairs

	
 

	
34

	
 

	
9.2.

	
Encroachments, Restrictions, Etc.

	
 

	
35

i

	
 

	
 

	
 

	
 

	
 

	
ARTICLE 10 ALTERATIONS AND IMPROVEMENTS;
FF&E RESERVE

	
 

	
36

	
 

	
10.1.

	
Alterations

	
 

	
36

	
 

	
10.2.

	
Salvage

	
 

	
36

	
 

	
10.3.

	
Joint Use Agreements

	
 

	
36

	
 

	
10.4.

	
[Reserved]

	
 

	
36

	
 

	
10.5.

	
Furniture, Fixture and Equipment Allowance

	
 

	
36

	
ARTICLE 11 COMPLIANCE WITH
FRANCHISE

	
 

	
37

	
 

	
11.1.

	
Compliance with Franchise Agreement and Management
Agreement

	
 

	
37

	
ARTICLE 12 PERMITTED LIENS AND
CONTESTS

	
 

	
37

	
 

	
12.1.

	
Liens

	
 

	
37

	
 

	
12.2.

	
Permitted Contests

	
 

	
38

	
ARTICLE 13 INSURANCE REQUIREMENTS

	
 

	
39

	
 

	
13.1.

	
General Insurance Requirements

	
 

	
39

	
 

	
13.2.

	
Replacement Cost

	
 

	
40

	
 

	
13.3.

	
Waiver of Subrogation

	
 

	
40

	
 

	
13.4.

	
Form Satisfactory, Etc.

	
 

	
40

	
 

	
13.5.

	
Increase in Limits

	
 

	
41

	
 

	
13.6.

	
Blanket Policy

	
 

	
41

	
 

	
13.7.

	
No Separate Insurance

	
 

	
41

	
 

	
13.8.

	
Reports On Insurance Claims

	
 

	
42

	
ARTICLE 14 CASUALTY INSURANCE
PROCEEDS; RECONSTRUCTION

	
 

	
42

	
 

	
14.1.

	
Insurance Proceeds

	
 

	
42

	
 

	
14.2.

	
Reconstruction in the Event of Damage or Destruction
Covered by Insurance

	
 

	
42

	
 

	
14.3.

	
Reconstruction in the Event of Damage or Destruction
Not Covered by Insurance

	
 

	
43

	
 

	
14.4.

	
Lessee’s Property

	
 

	
44

	
 

	
14.5.

	
Abatement of Rent

	
 

	
44

	
 

	
14.6.

	
Damage Near End of Term

	
 

	
44

	
 

	
14.7.

	
Waiver

	
 

	
44

	
ARTICLE 15 CONDEMNATION; AWARD
ALLOCATION

	
 

	
44

	
 

	
15.1.

	
Definitions

	
 

	
44

	
 

	
15.2.

	
Parties’ Rights and Obligations

	
 

	
45

	
 

	
15.3.

	
Total Taking

	
 

	
45

	
 

	
15.4.

	
Allocation of Award

	
 

	
45

	
 

	
15.5.

	
Partial Taking

	
 

	
45

	
 

	
15.6.

	
Temporary Taking

	
 

	
45

	
ARTICLE 16 DEFAULT BY LESSEE;
LESSOR’S REMEDIES

	
 

	
46

	
 

	
16.1.

	
Events of Default

	
 

	
46

	
 

	
16.2.

	
Surrender

	
 

	
47

	
 

	
16.3.

	
Damages

	
 

	
48

	
 

	
16.4.

	
Waiver

	
 

	
49

	
 

	
16.5.

	
Application of Funds

	
 

	
49

	
 

	
16.6.

	
Lessor’s Right to Cure Lessee’s Default

	
 

	
49

	
ARTICLE 17 DEFAULT BY LESSOR;
LESSEE’S REMEDIES

	
 

	
49

	
 

	
17.1.

	
Breach by Lessor

	
 

	
49

	
 

	
17.2.

	
Lessee’s Right to Cure

	
 

	
50

	
 

	
17.3.

	
Provisions Relating to Purchase of the Leased
Property by Lessee

	
 

	
50

ii

	
 

	
 

	
 

	
 

	
 

	
ARTICLE 18 INDEMNIFICATION

	
 

	
51

	
 

	
18.1.

	
Indemnification

	
 

	
51

	
ARTICLE 19 REIT REQUIREMENTS AND
RESTRICTIONS

	
 

	
52

	
 

	
19.1.

	
Personal Property Limitation

	
 

	
52

	
 

	
19.2.

	
Sublease Rent Limitation

	
 

	
52

	
 

	
19.3.

	
Sublease Tenant Limitation

	
 

	
52

	
 

	
19.4.

	
Lessee Ownership Limitations

	
 

	
52

	
 

	
19.5.

	
Lessee Officer and Employee Limitation

	
 

	
52

	
 

	
19.6.

	
Payments to Affiliates of Lessee

	
 

	
53

	
ARTICLE 20 SUBLETTING AND
ASSIGNMENT

	
 

	
53

	
 

	
20.1.

	
Subletting and Assignment

	
 

	
53

	
 

	
20.2.

	
Attornment

	
 

	
53

	
 

	
20.3.

	
Conveyance by Lessor

	
 

	
54

	
ARTICLE 21 QUIET ENJOYMENT; RISK
OF LOSS

	
 

	
54

	
 

	
21.1.

	
Quiet Enjoyment

	
 

	
54

	
 

	
21.2.

	
Risk of Loss

	
 

	
54

	
ARTICLE 22 LESSOR MORTGAGES;
SUBORDINATION OF LEASE

	
 

	
54

	
 

	
22.1.

	
Lessor May Grant Liens

	
 

	
54

	
 

	
22.2.

	
Subordination of Lease

	
 

	
55

	
ARTICLE 23 ESTOPPEL CERTIFICATES;
FINANCIAL STATEMENTS; INSPECTION RIGHTS

	
 

	
55

	
 

	
23.1.

	
Estoppel Certificates; Financial Statements

	
 

	
55

	
 

	
23.2.

	
Lessor’s Right to Inspect

	
 

	
56

	
ARTICLE 24 APPRAISERS

	
 

	
56

	
 

	
24.1.

	
Appraisers

	
 

	
56

	
ARTICLE 25 ARBITRATION AND DISPUTE
RESOLUTION PROCEDURES

	
 

	
57

	
 

	
25.1.

	
Arbitration

	
 

	
57

	
 

	
25.2.

	
Alternative Arbitration

	
 

	
57

	
 

	
25.3.

	
Arbitration Procedure

	
 

	
58

	
ARTICLE 26 NOTICES

	
 

	
58

	
 

	
26.1.

	
Notices

	
 

	
58

	
ARTICLE 27 MISCELLANEOUS

	
 

	
58

	
 

	
27.1.

	
No Waiver

	
 

	
58

	
 

	
27.2.

	
Remedies Cumulative

	
 

	
59

	
 

	
27.3.

	
Waiver of Trial by Jury

	
 

	
59

	
 

	
27.4.

	
Acceptance of Surrender

	
 

	
59

	
 

	
27.5.

	
No Merger of Title

	
 

	
59

	
 

	
27.6.

	
Waiver of Presentment, Etc.

	
 

	
59

	
 

	
27.7.

	
Action for Damages

	
 

	
59

	
 

	
27.8.

	
Lease Assumption in Bankruptcy Proceeding

	
 

	
59

	
 

	
27.9.

	
Enforceability

	
 

	
60

	
 

	
27.10.

	
Memorandum of Lease

	
 

	
60

iii

	
 

	
Exhibit A – Legal Description

	
Exhibit B – Space Leases

	
Schedule 2.1 – Commencement Dates

	
Schedule 3.1(a) – Base Rents

	
Schedule 3.1(b) – Suite Revenue Breakpoint

iv

HOTEL LEASE AGREEMENT

          THIS
HOTEL LEASE AGREEMENT (hereinafter called “Lease”), effective as of the 25th
day of March, 2011, by and between Apple Ten Business Trust, a Virginia
business trust (hereinafter called “Lessor”), and Apple Ten Hospitality
Management, Inc., a Virginia corporation (hereinafter called “Lessee”),
provides as follows:

AGREEMENT:

          Lessor,
for and in consideration of the payment of rent by Lessee to Lessor, the
covenants and agreements to be performed by Lessee, and upon the terms and
conditions hereinafter stated, does hereby rent and lease unto Lessee, and
Lessee does hereby rent and lease from Lessor, the Leased Property.

ARTICLE
1

LEASED PROPERTY; OTHER DEFINITIONS

          1.1. Leased Property. The Leased Property shall mean and is comprised of Lessor’s
interest in the following:

                    (a)
the land described in Exhibit A attached hereto and by reference
incorporated herein (the “Land”);

                    (b)
all buildings, structures and other improvements of every kind including, but
not limited to, alleyways and connecting tunnels, sidewalks, utility pipes,
conduits and lines (on-site and offsite), parking areas and roadways
appurtenant to such buildings and structures presently situated upon the Land
(collectively, the “Leased Improvements”);

                    (c)
all easements, rights and appurtenances relating to the Land and the Leased
Improvements;

                    (d)
all equipment, machinery, fixtures, and other items of property required for or
incidental to the use of the Leased Improvements as a hotel, including all
components thereof, now and hereafter permanently affixed to or incorporated
into the Leased Improvements, including, without limitation, all furnaces,
boilers, heaters, electrical equipment, heating, plumbing, lighting,
ventilating, refrigerating, incineration, air and water pollution control, waste
disposal, air-cooling and air-conditioning systems and apparatus, sprinkler
systems and fire and theft protection equipment, all of which to the greatest
extent permitted by law are hereby deemed by the parties hereto to constitute
real estate, together with all replacements, modifications, alterations and
additions thereto (collectively, the “Fixtures”);

                    (e)
all furniture and furnishings and all other items of personal property
(excluding Inventory and personal property owned by Lessee) located on, and
used in connection with, the operation of the Leased Improvements as a hotel,
together with all replacements, modifications, alterations and additions
thereto; and

          LESS
AND EXCEPT all portions of the foregoing that are leased under Space Leases and
all right, title and interest of Lessor under the Space Leases (including any
rents, security deposits or collateral held by or owing to Lessor pursuant
thereto).

THE LEASED PROPERTY IS DEMISED IN ITS PRESENT
CONDITION WITHOUT REPRESENTATION OR WARRANTY (EXPRESSED OR IMPLIED) BY LESSOR
AND SUBJECT TO THE RIGHTS OF PARTIES IN POSSESSION, AND TO THE EXISTING STATE
OF TITLE INCLUDING ALL COVENANTS, CONDITIONS, RESTRICTIONS, EASEMENTS AND OTHER
MATTERS OF RECORD INCLUDING ALL APPLICABLE LEGAL REQUIREMENTS AND OTHER MATTERS
WHICH WOULD BE DISCLOSED BY AN INSPECTION OF THE LEASED PROPERTY OR BY AN
ACCURATE SURVEY THEREOF.

          1.2.
Definitions. For all purposes of this Lease, except as otherwise
expressly provided or unless the context otherwise requires, (a) the terms
defined in this Article have the meanings assigned to them in this Article and
include the plural as well as the singular, (b) all accounting terms not
otherwise defined herein have the meanings assigned to them in accordance with
generally accepted accounting principles as are at the time applicable, (c) all
references in this Lease to designated “Articles,” “Sections” and other
subdivisions are to the designated Articles, Sections and other subdivisions of
this Lease and (d) the words “herein,” “hereof” and “hereunder” and other words
of similar import refer to this Lease as a whole and not to any particular
Article, Section or other subdivision:

                    Additional
Charges: As defined in Section 3.3.

                    Affiliate:
As used in this Lease the term “Affiliate” of a Person shall mean (a) any
Person that, directly or indirectly, controls or is controlled by or is under
common control with such Person, (b) any other Person that owns, beneficially,
directly or indirectly, ten percent (10%) or more of the outstanding capital
stock, shares or equity interests of such Person, or (c) any officer, director,
employee, partner, manager or trustee of such Person or any Person controlling,
controlled by or under common control with such Person or any Person that owns,
beneficially, directly or indirectly, ten percent (10%) or more of the
outstanding capital stock, shares or equity interests of such Person (excluding
trustees and Persons serving in similar capacities who are not otherwise an
Affiliate of such Person). For the purposes of this definition, “control”
(including the correlative meanings of the terms “controlled by” and “under
common control with”), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, through the ownership
of voting securities, partnership interests or other equity interests.

                    Annual
Budget: As used in this Lease, the term “Annual Budget” shall mean an
operating and capital budget prepared by Lessee and delivered to Lessor in
accordance with Section 4.1.

                    Annual
Revenues Computation: As defined in Subsection 3.1(b). 

                    Award:
As defined in Subsection 15.1(a).

2

                    Base
Rate: The rate of interest announced publicly by Citibank, N.A., in New
York, New York, from time to time, as such bank’s base rate. If no such rate is
announced or if such rate becomes discontinued, then such other rate as Lessor
may reasonably designate.

                    Base
Rent: As defined in Subsection 3.1(a).

                    Business
Day: Each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day
on which national banks in the City of New York, New York, or in the
municipality wherein the Leased Property is located are closed.

                    CERCLA:
The Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended.

                    Change
of Control: The sale, conveyance, assignment, encumbering, pledging,
hypothecation, granting a security interest in, granting of options with
respect to, or other disposition of (directly or indirectly, voluntarily or
involuntarily, by operation of law or otherwise, and whether or not for
consideration) of any class stock or other equity interests in a Person (other
than among existing holders of interests in such Person on the Commencement
Date and/or family members of such holders and/or trusts for the benefit of any
of the foregoing) that, upon a transfer of any portion thereof, will create in
the transferee thereof, directly or indirectly, a majority of any class of
stock or other equity interests of such Person.

                    Claims:
As defined in Section 12.2.

                    COBRA:
As defined in Subsection 8.2(b).

                    Code:
The Internal Revenue Code of 1986, as amended.

                    Commencement
Date: As defined in Section 2.1.

                    Competitive
Set: As defined in the STR Reports. Lessor and Lessee shall work in good
faith to determine any additions and deletions to the Hotel’s Competitive Set,
on or before November 15th of each year, with such changes to be applicable for
the following Fiscal Year. In the event Lessor and Lessee cannot agree to the
Hotel’s Competitive Set by November 15th of any year, such unagreed items shall
be determined by Smith Travel Research (or, if it refuses or is unable to do
so, by arbitration pursuant to Section 25.2). The costs of resetting the
Hotel’s Competitive Set shall be borne equally by the parties.

                    Comparison
Month: As defined in Subsection 3.1(d).

                    Condemnation,
Condemnor: As defined in Section 15.1

                    Consolidated
Financials: For any fiscal year or other accounting period for Lessee and
its consolidated subsidiaries, if any, statements of earnings and retained
earnings and of changes in financial position for such period and for the
period from the beginning of the respective fiscal year to the end of such
period and the related balance sheet as at the end of such period, 

3

together with the notes thereto, all in reasonable
detail and setting forth in comparative form the corresponding figures for the
corresponding period in the preceding fiscal year, and prepared in accordance
with generally accepted accounting principles and audited by independent
certified public accountants acceptable to Lessor in its sole discretion.

                    Consumer
Price Index: The “U.S. City Average, All Items” Consumer Price Index for
All Urban Consumers published by the Bureau of Labor Statistics of the United
States Department of Labor (Base: 1982-1984=100), or any successor index
thereto. If the Consumer Price Index is hereafter converted to a different
standard reference base or otherwise revised, any determination hereunder that
uses the Consumer Price Index shall be made with the use of such conversion
factor, formula or table for converting the Consumer Price Index as may be
published by the Bureau of Labor Statistics, or, if the Bureau shall no longer
publish the same, then with the use of such conversion factor, formula or table
as may be published by Prentice Hall, Inc., or, failing such publication, by
any other nationally recognized publisher of similar statistical information.

                    Date
of Taking: As defined in Subsection 15.1(d).

                    Encumbrance:
As defined in Section 22.1.

                    Environmental
Audit: As defined in Subsection 8.3(b).

                    Environmental
Authority: Any department, agency or other body or component of any
Government that exercises any form of jurisdiction or authority under any
Environmental Law.

                    Environmental
Authorization: Any license, permit, order, approval, consent, notice,
registration, filing or other form of permission or authorization required
under any Environmental Law.

                    Environmental
Laws: All applicable federal, state, local and foreign laws and regulations
relating to pollution of the environment (including without limitation, ambient
air, surface water, ground water, land surface or subsurface strata), including
without limitation laws and regulations relating to emissions, discharges,
Releases or threatened Releases of Hazardous Materials or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials. Environmental Laws include but
are not limited to CERCLA, FIFRA, RCRA, SARA and TSCA.

                    Environmental
Liabilities: Any and all obligations to pay the amount of any judgment or
settlement, the cost of complying with any settlement, judgment or order for
injunctive or other equitable relief, the cost of compliance or corrective
action in response to any notice, demand or request from an Environmental
Authority, the amount of any civil penalty or criminal fine, and any court
costs and reasonable amounts for attorney’s fees, fees for witnesses and
experts, and costs of investigation and preparation for defense of any claim or
any Proceeding, regardless of whether such Proceeding is threatened, pending or
completed, that may be or have been asserted against or imposed upon Lessor,
Lessee, any Predecessor, the Leased Property or any property used therein and
arising out of:

4

                    (a)
Failure of Lessee, Lessor, any Predecessor or the Leased Property to comply at
any time with all Environmental Laws;

                    (b)
Presence of any Hazardous Materials on, in, under, at or in any way affecting
the Leased Property;

                    (c)
A Release at any time of any Hazardous Materials on, in, at, under or in any
way affecting the Leased Property;

                    (d)
Identification of Lessee, Lessor or any Predecessor as a potentially
responsible party under CERCLA or under any Environmental Law similar to
CERCLA;

                    (e)
Presence at any time of any above-ground and/or underground storage tanks, as
defined in RCRA or in any applicable Environmental Law on, in, at or under the
Leased Property or any adjacent site or facility; or

                    (f)
Any and all claims for injury or damage to Persons or property arising out of
exposure to Hazardous Materials originating or located at the Leased Property,
or resulting from operation thereof or any adjoining property.

                    Event
of Default: As defined in Section 16.1.

                    Fair
Market Rental: The fair market rental of the Leased Property means the
rental which a willing tenant not compelled to rent would pay a willing
landlord not compelled to lease for the use and occupancy of such Leased
Property pursuant to the Lease for the term in question, (a) assuming that Lessee
is not in default thereunder and (b) determined in accordance with the
appraisal procedures set forth in Article 24 or in such other manner as shall
be mutually acceptable to Lessor and Lessee.

                    Fair
Market Value: The fair market value of the Leased Property means an amount
equal to the price that a willing buyer not compelled to buy would pay a
willing seller not compelled to sell for such Leased Property, (a) assuming the
same is unencumbered by this Lease, (b) determined in accordance with the
appraisal procedures set forth in Article 24 or in such other manner as shall
be mutually acceptable to Lessor and Lessee, (c) assuming that such seller must
pay customary closing costs and title premiums, and (d) taking into account the
positive or negative effect on the value of the Leased Property attributable to
the interest rate, amortization schedule, maturity date, prepayment penalty and
other terms and conditions of any encumbrance that is assumed by the
transferee. In addition, in determining the Fair Market Value with respect to
damaged or destroyed Leased Property such value shall be determined as if such
Leased Property had not been so damaged or destroyed.

                    FIFRA:
The Federal Insecticide, Fungicide, and Rodenticide Act, as amended.

                    Fiscal
Year: The twelve (12) month period from January 1 to December 31, or any
shorter period at the beginning or end of the Term.

5

                    Fixtures:
As defined in Section 1.1.

                    Force
Majeure: An Unavoidable Occurrence, generally affecting travel and/or the
hotel or lodging business in the market and/or submarket in which the Hotel is
located.

                    Franchise
Agreement: Any franchise agreement or license agreement with a franchisor
(such as TownePlace Suites) under which the Hotel is operated.

                    Furniture
and Equipment: For purposes of this Lease, the terms “furniture and
equipment” shall mean collectively all furniture, furnishings, wall coverings,
fixtures and hotel equipment and systems located at, or used in connection
with, the Hotel, together with all replacements therefor and additions thereto,
including, without limitation, (i) all equipment and systems required for the
operation of kitchens and bars, laundry and dry cleaning facilities, (ii)
office equipment, (iii) material handling equipment, cleaning and engineering
equipment, (iv) telephone and computerized accounting systems, and (v)
vehicles.

                    Government:
The United States of America, any state, district or territory thereof, any
foreign nation, any state, district, department, territory or other political
division thereof, or any agency or political subdivision of any of the
foregoing.

                    Gross
Operating Expenses: The term “Gross Operating Expenses” shall include (i)
all costs and expenses of operating the Hotel included within the meaning of
the term “Total Costs and Expenses” contained in the Uniform System and, (ii)
without duplication, the following: all salaries and employee expense and
payroll taxes (including salaries, wages, bonuses and other compensation of all
employees of the Hotel, and benefits including life, medical and disability
insurance and retirement benefits), expenditures described in Section 9.1,
operational supplies, utilities, insurance to be provided by Lessee under the
terms of this Lease, governmental fees and assessments, common area maintenance
costs and other common area fees and assessments, food, beverages, laundry
service expense, the cost of Inventories, license fees, advertising, marketing,
reservation systems and any and all other operating expenses as are reasonably
necessary for the proper and efficient operation of the Hotel and the Leased
Property incurred by Lessee in accordance with the provisions hereof
(excluding, however, (i) federal, state and municipal excise, sales and use
taxes collected directly from patrons and guests or as a part of the sales
price of any goods, services or displays, such as gross receipts, admissions,
cabaret or similar or equivalent taxes paid over to federal, state or municipal
governments, (ii) the cost of insurance to be provided under Article 13, (iii)
expenditures by Lessor pursuant to Article 13 and (iv) payments on any Mortgage
or other mortgage or security instrument on the Hotel); all determined in
accordance with generally accepted accounting principles. No part of Lessee’s
central office overhead or general or administrative expense (as opposed to
that of the Hotel), and no operating expenses paid or payable by tenants under
Space Leases, shall be deemed to be a part of Gross Operating Expenses, as
herein provided. Reasonable out-of-pocket expenses of Lessee incurred for the
account of or in connection with the Hotel operations, including but not
limited to postage, telephone charges and reasonable travel expenses of
employees, officers and other representatives and consultants of Lessee and its
Affiliates, shall be deemed to be a part of Gross Operating Expenses and such 

6

Persons shall be afforded reasonable accommodations,
food, beverages, laundry, valet and other such services by and at the Hotel
without charge to such Persons or Lessee.

                    Gross
Operating Profit: For any Fiscal Year, the excess of Gross Revenues for
such Fiscal Year over Gross Operating Expenses for such Fiscal Year.

                    Gross
Revenues: All revenues, receipts, and income of any kind derived directly
or indirectly by Lessee from or in connection with the Hotel (including rentals
or other payments from tenants, lessees, licensees or concessionaires but not
including their gross receipts receipts and not including rentals or other
payments under Space Leases) whether on a cash basis or credit, paid or
collected, determined in accordance with generally accepted accounting
principles, excluding, however: (i) funds furnished by Lessor, (ii) federal,
state and municipal excise, sales, and use taxes collected directly from
patrons and guests or as a part of the sales price of any goods, services or
displays, such as gross receipts, admissions, cabaret or similar or equivalent
taxes and paid over to federal, state or municipal governments, (iii) the
amount of all credits, rebates or refunds to customers, guests or patrons, and
all service charges, finance charges, interest and discounts attributable to
charge accounts and credit cards, to the extent the same are paid to Lessee by
its customers, guests or patrons, or to the extent the same are paid for by
Lessee to, or charged to Lessee by, credit card companies, (iv) gratuities or
service charges actually paid to employees, (v) proceeds of insurance and
condemnation, (vi) proceeds from sales other than sales in the ordinary course
of business, (vii) all loan proceeds from financing or refinancings of the
Hotel or interests therein or components thereof, (viii) judgments and awards,
except any portion thereof arising from normal business operations of the
Hotel, and (ix) items constituting “allowances” under the Uniform System.

                    Hazardous
Materials: All chemicals, pollutants, contaminants, wastes and toxic
substances, including without limitation:

                    (a)
Solid or hazardous waste, as defined in RCRA or any other Environmental Law;

                    (b)
Hazardous substances, as defined in CERCLA or any other Environmental Law;

                    (c)
Toxic substances, as defined in TSCA or any other Environmental Law;

                    (d)
Insecticides, fungicides, or rodenticides, as defined in FIFRA or any other
Environmental Law; and

                    (e)
Gasoline or any other petroleum product or byproduct, polychlorinated biphenyl,
asbestos and urea formaldehyde.

                    Hotel:
The hotel and/or other facility offering lodging and other services or
amenities being operated or proposed to be operated on the Leased Property.

7

                    Hotel
Market Decline: A period of six (6) consecutive calendar months during
which there is (i) a twenty percent (20%) decline in average hotel occupancy
for the Hotel from the average hotel occupancy levels for same period during
the prior calendar year and (ii) a twenty percent (20%) decline in average
hotel occupancy for the Hotel’s Competitive Set from the average hotel
occupancy levels for the same period during the prior calendar year, as
published in the applicable STR Reports.

                    Impositions:
Collectively, all taxes (including, without limitation, all ad valorem, sales
and use, single business, gross receipts, transaction, privilege, rent or
similar taxes as the same relate to or are imposed upon Lessee or its business
conducted upon the Leased Property), assessments (including, without
limitation, all assessments for public improvements or benefit, whether or not
commenced or completed prior to the date hereof and whether or not to be
completed within the Term), ground rents, water, sewer or other rents and
charges, excises, tax inspection, authorization and similar fees and all other
governmental charges, in each case whether general or special, ordinary or
extraordinary, or foreseen or unforeseen, of every character in respect of the
Leased Property or the business conducted thereon by Lessee (including all
interest and penalties thereon caused by any failure in payment by Lessee),
which at any time prior to, during or with respect to the Term hereof may be
assessed or imposed on or with respect to or be a lien upon (a) Lessor’s
interest in the Leased Property, (b) the Leased Property, or any part thereof
or any rent therefrom or any estate, right, title or interest therein, or (c)
any occupancy, operation, use or possession of, or sales from, or activity
conducted on or in connection with the Leased Property, or the leasing or use
of the Leased Property or any part thereof by Lessee. Nothing contained in this
definition of Impositions shall be construed to require Lessee to pay (1) any
tax based on net income (whether denominated as a franchise or capital stock or
other tax) imposed on Lessor or any other Person, or (2) any net revenue tax of
Lessor or any other Person, or (3) any tax imposed with respect to the sale,
exchange or other disposition by Lessor of any Leased Property or the proceeds
thereof, or (4) any single business, gross receipts (other than a tax on any
rent received by Lessor from Lessee), transaction, privilege or similar taxes
as the same relate to or are imposed upon Lessor, except to the extent that any
tax, assessment, tax levy or charge that Lessee is obligated to pay pursuant to
the first sentence of this definition and that is in effect at any time during
the Term hereof is totally or partially repealed, and a tax, assessment, tax
levy or charge set forth in clause (1) or (2) is levied, assessed or imposed
expressly in lieu thereof.

                    Indemnified
Party: Either of a Lessee Indemnified Party or a Lessor Indemnified Party.

                    Indemnifying
Party: Any party obligated to indemnify an Indemnified Party pursuant to
Sections 8.3 or 18.1.

                    Insurance
Requirements: All terms of any insurance policy required by this Lease and
all requirements of the issuer of any such policy.

                    Inventory:
All “Inventories of Merchandise” and “Inventories of Supplies” as defined in
the Uniform System, including without limitation linens, china, silver,
glassware and other non-depreciable personal property, and including any
property of the type described in Section 1221(1) of the Code. 

8

                    Land:
As defined in Section 1.1.

                    Lease:
This Lease.

                    Leased
Improvements; Leased Property: Each as defined in Section 1.1.

                    Legal
Requirements: All federal, state, county, municipal and other governmental
statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and
injunctions affecting either the Leased Property or the maintenance,
construction, use or alteration thereof (whether by Lessee or otherwise),
whether now in force or hereafter enacted and in force, including (a) all laws,
rules or regulations pertaining to the environment, occupational health and
safety and public health, safety or welfare, and (b) any laws, rules or
regulations that may (1) require repairs, modifications or alterations in or to
the Leased Property or (2) in any way adversely affect the use and enjoyment
thereof; and all permits, licenses and authorizations and regulations relating
thereto and all covenants, agreements, restrictions and encumbrances contained
in any instruments, either of record or known to Lessee (other than
encumbrances created by Lessor without the consent of Lessee), at any time in
force affecting the Leased Property.

                    Lending
Institution: Any insurance company, credit company, federally-insured
commercial or savings bank, national banking association, savings and loan
association, employees welfare, pension or retirement fund or system, corporate
profit sharing or pension trust, college or university, or real estate
investment trust, including any corporation qualified to be treated for federal
tax purposes as a real estate investment trust, such trust having a net worth
of at least $10,000,000.

                    Lessee:
The Lessee designated in this Lease and its respective permitted successors and
assigns.

                    Lessee
Indemnified Party: Lessee, any Affiliate of Lessee, any other Person
against whom any claim for indemnification may be asserted hereunder as a
result of a direct or indirect ownership interest (including a stockholder’s or
member’s interest) in Lessee, the officers, directors, stockholders, members,
managers, employees, agents and representatives of Lessee, and the respective
heirs, personal representatives, successors and assigns of any such officer,
director, stockholder, member, manager, employee, agent or representative.

                    Lessee’s
Personal Property: As defined in Section 6.2.

                    Lessor:
The Lessor designated in this Lease and its respective successors and assigns.

                    Lessor
Indemnified Party: Lessor, any Affiliate of Lessor, any other Person
against whom any claim for indemnification may be asserted hereunder as a
result of a direct or indirect ownership interest (including a stockholder’s or
partnership interest) in Lessor, the officers, directors, stockholders,
members, managers, employees, agents and representatives of the general partner
of Lessor and any partner, agent, or representative of Lessor, and the
respective heirs, 

9

personal representatives, successors and assigns of
any such officer, director, stockholder, partner, member, manager, employee,
agent or representative.

                    Licenses:
As defined in Subsection 2.3(a).

                    Management
Agreement: The agreement pursuant to which Manager operates the Hotel.

                    Manager:
Newport Columbia Management, LLC, a Virginia limited liability company, or any
successor manager that is retained by Lessee to operate the Hotel pursuant to
this Lease and the Franchise Agreement.

                    Minimum
Price: The sum of (a) the equity in the Leased Property at the time of
acquisition of the Leased Property by Lessor, plus (b) other capital
expenditures on the Leased Property by Lessor after the date hereof (less
depreciation and amortization thereof) plus (c) the unpaid principal balance of
all encumbrances against the Leased Property at the time of purchase of the
Leased Property by Lessee, less (x) all proceeds received by Lessor from any
financing or refinancing of the Leased Property after the date hereof (after
payment of any debt refinanced and net of any costs and expenses incurred in
connection with such financing or refinancing, including, without limitation,
loan points, commitment fees and commissions and legal fees) and (y) the net
amount (after deduction of all reasonable legal fees and other costs and
expenses, including without limitation expert witness fees, incurred by Lessor
in connection with obtaining any such proceeds or award) of all insurance
proceeds received by Lessor and awards received by Lessor from any partial
Taking of the Leased Property that are not applied to restoration.

                    Mortgage:
As defined in Section 22.2.

                    National
Economic Decline: A period of six (6) consecutive calendar months during
which there occurs or continues a ten percent (10%) decline in average hotel
occupancy, from average hotel occupancy levels for the same period during the
prior calendar year, for all open and operating hotels in the United States as
determined from the applicable STR Reports or, if the STR Reports are not
longer published, other reputable national economic data regarding the
hospitality industry.

                    Notice:
As defined in Article 26.

                    Officer’s
Certificate: A certificate of Lessee reasonably acceptable to Lessor,
signed by the chief financial officer or another officer authorized so to sign
by the board of directors or other governing body of Lessee, or bylaws or
limited liability company agreement of Lessee, or any other Person whose power
and authority to act has been authorized by delegation in writing by any such
officer.

                    Optional
Termination Date: As defined in Section 2.2.

                    Overdue
Rate: On any date, a rate equal to the Base Rate plus five percent (5%) per
annum, but in no event greater than the maximum rate then permitted under
applicable law.

10

                    Payment
Date: Any due date for the payment of any installment of Base Rent.

                    Percentage
Rent: As defined in Subsection 3.1(b).

                    Person:
Any Government, natural person, corporation, general or limited partnership,
limited liability company, stock company or association, joint venture,
association, company, trust, bank, trust company, land trust, business trust,
or other entity.

                    Personal
Property Taxes: All personal property taxes imposed on the furniture,
furnishings or other items of personal property located on, and used in
connection with, the operation of the Leased Improvements as a hotel (other
than Inventory and other personal property owned by Lessee), together with all
replacement, modifications, alterations and additions thereto.

                    Predecessor:
Any Person whose liabilities arising under any Environmental Law have or may
have been retained or assumed by Lessor or Lessee, either contractually or by
operation of law, relating to the Leased Property.

                    Primary
Intended Use: As defined in Subsection 7.2(b).

                    Proceeding:
Any judicial action, suit or proceeding (whether civil or criminal), any
administrative proceeding (whether formal or informal), any investigation by a
governmental authority or entity (including a grand jury), and any arbitration,
mediation or other non-judicial process for dispute resolution.

                    RCRA:
The Resource Conservation and Recovery Act, as amended.

                    Real
Estate Taxes: All real estate taxes, including general and special
assessments, if any, which are imposed upon the Land, and any improvements
thereon.

                    Regional
Market Decline: A period of six (6) consecutive calendar months during
which there is a twenty percent (20%) decline in average hotel occupancy from
hotel occupancy levels for the same period during the then prior calendar year,
for all open and operating hotels in the Smith Travel Research Region in which
the Hotel is located, as determined from applicable STR Reports or, if the STR
Reports are no longer published, other reputable regional economic data
regarding the hospitality industry.

                    Rejectable
Offer Price: An amount equal to the greater of (a) the Fair Market Value,
determined as of the applicable purchase date, or (b) the Minimum Price.

                    Release:
A “Release” as defined in CERCLA or in any Environmental Law, unless such
Release has been properly authorized and permitted in writing by all applicable
Environmental Authorities or is allowed by such Environmental Law without
authorizations or permits.

                    Rent:
Collectively, the Base Rent, Percentage Rent and Additional Charges.

11

                    Repositioning:
As defined in Section 3.6.

                    SARA:
The Superfund Amendments and Reauthorization Act of 1986, as amended.

                    Solvent:
As to any Person, (a) the sum of the assets of such Person exceeds its
liabilities and (b) such Person has sufficient capital with which to conduct
its business as presently conducted and as proposed to be conducted.

                    Space
Leases: With respect to the Land and Leased Improvements, all leases,
licenses, occupancy agreements, 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 Leased Improvements or Land, including
(without limitation) the leases described in Exhibit B attached hereto,
together with all amendments, modifications, renewals and extensions thereof,
and all guaranties by third parties of the obligations of the tenants
thereunder, and any successor leases for such space. Space Leases shall
specifically exclude hotel room or suite rental to hotel guests or convention
or meeting space rental, each conducted in the ordinary course of business in
the operation of a hotel.

                    State:
The state or commonwealth in which the Hotel is located.

                    STR
Reports: Reports compiled by Smith Travel Research, or its successor, which
contain historical supply and demand, occupancy, and average rate information
for the Hotel and hotels with which it competes (or, in the event that Smith
Travel Research discontinues providing such information, reports of similar
nature compiled by an authority recognized nationally in the hospitality
industry).

                    Subsidiaries:
Persons in which Lessee owns, directly or indirectly, more than fifty percent
(50%) of the voting stock or control, as applicable.

                    Suite
Revenue Breakpoint: As defined in Subsection 3.1(b).

                    Suite
Revenues: All revenues, receipts, and income of any kind derived directly
or indirectly by Lessee from or in connection with (i) the rental of guest
rooms or suites, whether to individuals, groups or transients, at the Hotel and
(ii) the Hotel’s meeting rooms, telephones, TV and movie rentals, check room,
washroom, laundry, valet, vending machines, and other sources (other than Space
Leases), in each case, whether on a cash basis or credit, paid or collected,
determined in accordance with generally accepted accounting principles, but, in
each case, excluding the following:

                    (a)
The amount of all credits, rebates or refunds to customers, guests or patrons,
and all service charges, finance charges, interest and discounts attributable
to charge accounts and credit cards, to the extent the same are paid to Lessee
by its customers, guests or patrons, or to the extent the same are paid for by
Lessee to, or charged to Lessee by, credit card companies;

12

                    (b)
All sales taxes or any other taxes imposed on the rental of such guest rooms or
suites or imposed in connection with the Hotel’s meeting rooms, telephones, TV
and movie rentals, check room, washroom, laundry, valet, vending machines, and
other sources of revenue;

                    (c)
Gratuities or service charges actually paid to employees; and

                    (d)
Proceeds of business interruption and other insurance.

                    Taking:
A taking or voluntary conveyance during the Term hereof of all or part of the
Leased Property, or any interest therein or right accruing thereto or use
thereof, as the result of, or in settlement of, any Condemnation or other
eminent domain Proceeding affecting the Leased Property whether or not the same
shall have actually been commenced.

                    Term:
As defined in Section 2.1.

                    TSCA:
The Toxic Substances Control Act, as amended.

                    Unavoidable
Delays: Delays due to strikes, lock-outs, labor unrest, inability to
procure materials, power failure, acts of God, governmental restrictions, enemy
action, civil commotion, fire, unavoidable casualty or other causes beyond the
control of the party responsible for performing an obligation hereunder,
provided that lack of funds shall not be deemed a cause beyond the control of
either party hereto unless such lack of funds is caused by the failure of the
other party hereto to perform any obligations of such party under this Lease or
any guaranty of this Lease.

                    Unavoidable
Occurrence. The occurrence of strikes, lockouts, labor unrest, gasoline and
other energy shortages, widespread disruption of air, auto or other travel,
inability to procure materials or services, power or other utility failure,
acts of God (such as hurricanes, tornadoes, earthquakes, floods and mud
slides), governmental restrictions, war or other enemy or terrorist action,
civil commotion, fire, casualty, condemnation or other similar causes, in each
case, if such cause is beyond the reasonable control of Lessee; provided that
(i) lack of funds shall not be deemed a cause beyond the reasonable control of
either party hereto unless such lack of funds is caused by the failure of the
other party hereto to perform any obligations of such party under this Lease or
any guaranty of this Lease, and (ii) any such occurrence is an extraordinary,
as opposed to a routine or cyclical, material event that was not reasonably
foreseeable when the then-applicable Annual Budget was prepared.

                    Uneconomic
for its Primary Intended Use: A state or condition of the Hotel such that,
in the good faith judgment of Lessee, reasonably exercised and evidenced by the
resolution of the board of directors or other governing body of Lessee, the
Hotel cannot be operated on a commercially practicable basis for its Primary
Intended Use, taking into account, among other relevant factors, the number of
usable rooms and projected revenues, such that Lessee intends to, and shall, complete
the cessation of operations from the Leased Hotel.

13

                    Uniform
System: The Uniform System of Accounts for Hotels (9th Revised Edition,
1996) as published by the American Hotel and Lodging Association, with such
later revisions as may be agreed to by both Lessor and Lessee.

                    Unsuitable
for its Primary Intended Use: A state or condition of the Hotel such that,
in the good faith judgment of Lessee, reasonably exercised and evidenced by the
resolution of the board of directors or other governing body of Lessee, due to
casualty damage or loss through Condemnation, the Hotel cannot function as an
integrated hotel facility consistent with standards applicable to a well
maintained and operated hotel.

                    WARN
Act: As defined in Subsection 8.2(b).

                    Working
Capital: Funds reasonably necessary for the day-to-day operation of the
Hotel’s business for a thirty (30) day period, including, without limitation,
amounts sufficient for the maintenance of change and petty cash funds,
operating bank accounts, payrolls, accounts payable, accrued current
liabilities, and funds required to maintain Inventories.

ARTICLE
2

TERM; TERMINATION

          2.1. Term.

                    (a)
The term of the Lease (the “Term”) shall commence on the date specified in Schedule
2.1 (the “Commencement Date”), and shall end on the tenth (10th)
anniversary of the Commencement Date, unless sooner terminated in accordance
with the provisions hereof or extended to an anniversary of the initial
expiration date pursuant to this Article 2.

                    (b)
Lessee is granted the option to extend the Term of this Lease for a period of
five (5) years (the “First Extension”), provided that Lessee is not in default
hereunder either at the time of deemed exercise of the option or at the end of
the original Term, which option must be exercised by written notice to Lessor
at least one hundred twenty (120) days prior to the expiration of the original
Term. The First Extension shall be upon the same terms, conditions and rentals
as set forth herein for the original Term.

                    (c)
Lessee is granted an option to extend the Term for a period commencing at the
expiration of the First Extension and ending on March 24, 2031 (the “Second
Extension”), provided that Lessee is not in default hereunder either at the
time of exercise of the option or at the end of the First Extension, which
option must be exercised by written notice to Lessor at least one hundred
twenty (120) days prior to the expiration of the First Extension. If such
option is exercised, Lessor and Lessee shall negotiate in good faith
modifications to the Rent for the Second Extension to adjust such Rent to
market rates for arms-length hotel REIT leases between unrelated parties for
similar hotel properties at that time. In the event Lessor and Lessee are
unable to agree upon Rent terms for the Second Extension at least ninety (90)
days prior to the expiration of the Term, the Rent terms for the Second
Extension shall be determined by a panel of three (3) persons who have
generally recognized expertise in evaluating hotel REIT leases and who are not
Affiliates 

14

of Lessor or Lessee. Lessee and the Lessor each shall
have the right to designate one panel member and the two (2) panel members so
designated will designate the third panel member. Rent terms approved by at
least two (2) of the three (3) panel members will be binding on Lessee and
Lessor for the Second Extension, which shall be otherwise on the terms set
forth herein. In determining the market rates for the Second Extension, the
panel members shall be instructed to consider hotel REIT lease terms with
respect to similar hotel property types. The Second Extension shall be
otherwise upon the same terms and conditions as set forth herein for the
original Term.

          2.2.
Lessor’s Option to Terminate Lease. In the event Lessor enters into a
bona fide contract to sell the Leased Property to a non-Affiliate, there is a
Change of Control of Lessor, or the provisions of the Code are amended to
permit Lessor to operate hotels or otherwise render the structure embodied by
this Lease to be obsolete, Lessor may terminate the Lease by giving not less
than thirty (30) days’ prior Notice to Lessee of Lessor’s election to terminate
the Lease effective upon, as appropriate, the closing under such contract, the
date of such Change of Control, or the effective date of such amendment to the
Code (or any other specified date within 30 days after such date) (the
“Optional Termination Date”). Effective upon the Optional Termination Date,
this Lease shall terminate and be of no further force and effect except as to
any obligations of the parties existing as of such date that survive
termination of this Lease. As compensation for the early termination of its
leasehold estate under this Section 2.2, Lessor shall within 12 months of the
Optional Termination Date either (a) pay to Lessee the fair market value of
Lessee’s leasehold estate hereunder plus interest thereon at the Base Rate as
of the Optional Termination Date or (b) offer to lease to Lessee one or more
substitute hotel facilities pursuant to one or more leases that would create
for Lessee leasehold estates that have an aggregate fair market value of no
less than the fair market value of the original leasehold estate, both such
values as determined as of the Optional Termination Date. Lessor also shall pay
to Lessee, or reimburse Lessee for any assignment fees, termination fees or
other liabilities arising under the Franchise Agreement or Management Agreement
solely as a result of the assignment or termination of such Franchise Agreement
or Management Agreement in connection with the termination of this Lease under
this Section 2.2. If Lessor elects and complies with the option described in
(b) above, regardless of whether Lessee enters into the lease(s) described
therein, Lessor shall have no further obligations to Lessee with respect to
compensation for the early termination of this Lease. In the event Lessor and
Lessee are unable to agree upon the fair market value of an original or
replacement leasehold estate, it shall be determined by appraisal using the
appraisal procedure set forth in Article 24.

          For
the purposes of this Article, fair market value of the leasehold estate means,
as applicable, an amount equal to the price that a willing buyer not compelled
to buy would pay a willing seller not compelled to sell for Lessee’s leasehold
estate under this Lease or an offered replacement leasehold estate, taking into
account that the leasehold estate is encumbered by the Franchise Agreement and
an arm’s-length Management Agreement.

          2.3.
Transition Procedures. Upon the expiration or termination of the Term of
this Lease, for whatever reason (other than a purchase of the Leased Property
by Lessee), Lessor and Lessee shall do the following (and the provisions of
this Section 2.3 shall survive the expiration or termination of this Lease
until they have been fully performed) and, in general, shall cooperate in good
faith to effect an orderly transition of the management and/or lease of the
Hotel:

15

                    (a)
Transfer of Licenses. Lessee shall use reasonable efforts (i) to
transfer to Lessor or Lessor’s nominee all licenses, operating permits and other
governmental authorizations and all contracts, including contracts with
governmental or quasi-governmental entities, that may be necessary for the
operation of the Hotel (collectively, “Licenses”), or (ii) if such transfer is
prohibited by law or Lessor otherwise elects, to cooperate with Lessor or
Lessor’s nominee in connection with the processing by Lessor or Lessor’s
nominee of any applications for, all Licenses; provided, in either case, that
the costs and expenses of any such transfer or the processing of any such
application shall be paid by Lessor or Lessor’s nominee.

                    (b)
Leases and Concessions. Lessee shall assign to Lessor or Lessor’s
nominee simultaneously with the termination of this Lease, and the assignee
shall assume, all leases and concession agreements in effect with respect to
the Hotel then in Lessee’s name.

                    (c)
Books and Records. All books and records for the Hotel kept by Lessee
pursuant to Section 4.2 shall be delivered promptly to Lessor or Lessor’s
nominee, simultaneously with the termination of this Lease, but such books and
records shall thereafter be available to Lessee at all reasonable times for
inspection, audit, examination, and transcription for a period of one (1) year
and Lessee may retain (on a confidential basis) copies or computer records
thereof.

                    (d)
Receivables and Payables. Lessee shall be entitled to retain all cash,
bank accounts and house banks, and to collect all Gross Revenues and accounts
receivable accrued through the termination date. Lessee shall be responsible
for the payment of Rent, all Gross Operating Expenses and all other obligations
of Lessee accrued under this Lease as of the termination date, and Lessor or
Lessor’s nominee shall be responsible for all Gross Operating Expenses of the
Hotel accruing after the termination date.

                    (e)
Final Accounting. Lessee shall, within forty five (45) days after the
expiration or termination of the Term, prepare and deliver to Lessor a final
accounting statement, dated as of the date of the expiration or termination,
along with a statement of any sums due from Lessee to Lessor pursuant hereto
and payment of such funds. 

                    (f)
Inventory. Lessee shall insure that the Leased Property, at the date of
such termination or expiration, has Inventory of a substantially equivalent
nature and amount as exists at the Leased Property on the Commencement Date,
and Lessor or its designee shall acquire such Inventory from Lessee for a sale
price equal to the fair market value of such Inventory.

                    (g)
Surrender. Lessee will, upon the expiration or prior termination of the
Term, vacate and surrender the Leased Property to Lessor in the condition in
which the Leased Property was originally received from Lessor, except as
repaired, rebuilt, restored, altered or added to as permitted or required by
the provisions of this Lease and except for ordinary wear and tear (subject to
the obligation of Lessee to maintain the Leased Property in good order and
repair, as would a prudent owner, during the entire Term of the Lease), or
damage by casualty or Condemnation (subject to the obligations of Lessee to
restore or repair as set forth in the Lease)

16

          The
provisions of this Section 2.3 shall survive the expiration or termination of
this Lease until they have been fully performed. Nothing contained herein shall
limit Lessor’s rights and remedies under this Lease if such termination occurs
as the result of an Event of Default.

          2.4.
Holding Over. If Lessee for any reason remains in possession of the
Leased Property after the expiration or earlier termination of the Term, such
possession shall be as a tenant at sufferance during which time Lessee shall
pay as rental each month 150% of the aggregate of (a) one-twelfth of the
aggregate Base Rent and Percentage Rent payable with respect to the last Fiscal
Year of the Term, (b) all Additional Charges accruing during the applicable
month and (c) all other sums, if any, payable by Lessee under this Lease with
respect to the Leased Property. During such period, Lessee shall be obligated
to perform and observe all of the terms, covenants and conditions of this
Lease, but shall have no rights hereunder other than the right, to the extent
given by law to tenancies at sufferance, to continue its occupancy and use of
the Leased Property. Nothing contained herein shall constitute the consent,
express or implied, of Lessor to the holding over of Lessee after the
expiration or earlier termination of this Lease.

17

ARTICLE
3

RENT; RENT ADJUSTMENTS

          3.1.
Rent. Lessee will pay to Lessor in lawful money of the United States of
America which shall be legal tender for the payment of public and private
debts, in immediately available funds, at Lessor’s address set forth in Article
26 hereof or at such other place or to such other Person as Lessor from time to
time may designate in a Notice, all Base Rent, Percentage Rent and Additional
Charges, during the Term, as follows:

                    (a)
Base Rent: The annual sum specified in Schedule 3.1(a) (prorated
for fiscal year 2011), as adjusted pursuant to Subsection 3.1(d) hereof,
payable in advance in equal, consecutive monthly installments, on or before the
tenth day of each calendar month of the Term (“Base Rent”); provided, however,
that the first monthly payment of Base Rent shall be payable during the second
calendar month of the Term, and that the first and last monthly payments of
Base Rent shall be pro rated as to any partial month (subject to adjustment as
provided in Sections 14.5, 15.3 and 15.5).

                    (b)
Percentage Rent: For each fiscal year during the Term commencing with
the fiscal year in which the Commencement Date falls and ending with the fiscal
year in which the Term (including any applicable extensions) ends, Lessee shall
pay percentage rent (“Percentage Rent”).

          Percentage
Rent for the applicable Fiscal Year shall be an amount equal to the applicable Annual Revenues Computation
(as defined below) less an amount equal to the Base Rent paid with respect to
such Fiscal Year.

For the purpose of the foregoing calculation:

          The
annual revenues computation (“Annual Revenues Computation”) is equal to the
amount obtained by adding, for the applicable Fiscal Year, an amount equal to
the sum of (i) seventeen percent (17%) of all Suite Revenues for the applicable
Fiscal Year up to the applicable suite revenue breakpoint (the “Suite Revenue
Breakpoint”) described in Schedule 3.1(b), attached hereto, (prorated
for the first and last Fiscal Year of the Term (including any applicable
extensions)) and fifty-five percent (55%) of all Suite Revenues for the
applicable Fiscal Year in excess of the applicable Suite Revenue Breakpoint. At
the beginning of each Fiscal Year, the Suite Revenue Breakpoints shall be
adjusted by the same percentage that the Base Rent is adjusted pursuant to
Subsection 3.1(d).

The Percentage Rent shall be payable as follows:

	
 

	
 

	
 

	
 

	
(i)

	
with respect to each calendar month of the Term,
Lessee shall pay on or before the last day of the calendar month an amount
equal to the excess, if any, of (A) seventy-five percent (75%) of the amount
of Lessee’s budgeted Percentage Rent payable with respect to the then current
calendar month (which budgeted amount shall be equal to one-twelfth (1/12) of
the annual estimate of Percentage Rent included in the 

18

	
 

	
 

	
 

	
 

	
 

	
Annual Budget for the Fiscal Year in which the
calendar month occurs) over (B) Base Rent for such calendar month; and

	
 

	
 

	
 

	
 

	
(ii)

	
with respect to each Fiscal Year of the Term, Lessee
shall pay on or before the 15th day following the end of the Fiscal Year an
amount equal to the amount by which the aggregate amount of all payments
pursuant to Section 3.1(b)(i) in respect of Percentage Rent for such Fiscal
Year shall be less than one hundred percent (100%) of the estimated
Percentage Rent included in the Annual Budget for such Fiscal Year.

In no event will the amount of Percentage Rent payable
for any Fiscal Year or the result of any Annual Revenues Computation be less
than zero, and there shall be no reduction in the Base Rent regardless of the
result of any Annual Revenues Computation. 

                    (c)
Officer’s Certificates. On or before March 1 of each year, commencing
with March 1, 2012, Lessee shall deliver to Lessor an Officer’s Certificate
reasonably acceptable to Lessor setting forth the computation of the actual
Percentage Rent that accrued for the Fiscal Year that ended on the immediately
preceding December 31. If the annual Percentage Rent due and payable for any
Fiscal Year (as shown in the applicable Officer’s Certificate) exceeds the
amount actually paid as Percentage Rent by Lessee for such year, Lessee shall
pay such excess to Lessor at the time such certificate is delivered. If the
Percentage Rent actually due and payable for such Fiscal Year is shown by such
certificate to be less than the amount actually paid as Percentage Rent for the
applicable Fiscal Year, Lessor, at its option, shall reimburse such amount to
Lessee or credit such amount against subsequent months’ Base Rent, and with
respect to Percentage Rent, to the extent necessary, subsequent months’
Percentage Rent payments. Any such credit to Base Rent shall not be applied for
purposes of calculating Percentage Rent payable for any subsequent month.

          Any
difference between the annual Percentage Rent due and payable for any Fiscal
Year (as shown in the applicable Officer’s Certificate or as adjusted pursuant
to Section 3.3) and the total amount of monthly payments for such Fiscal Year
actually paid by Lessee as Percentage Rent, whether in favor of Lessor or
Lessee, shall bear interest at the Overdue Rate, which interest shall accrue
from the due date of the last monthly payment for the Fiscal Year until the amount
of such difference shall be paid or otherwise discharged. Any such interest
payable to Lessor shall be deemed to be and shall be payable as Additional
Charges.

          The
obligation to pay Percentage Rent shall survive the expiration or earlier termination
of the Term, and a final reconciliation, taking into account, among other
relevant adjustments, any adjustments which are accrued after such expiration
or termination date but which related to Percentage Rent accrued prior to such
termination date, and Lessee’s good faith best estimate of the amount of any
unresolved contractual allowances, shall be made not later than two (2) years
after such expiration or termination date, but Lessee shall advise Lessor
within sixty (60) days after such expiration or termination date of Lessee’s
best estimate at that time of the approximate amount of such adjustments, which
estimate shall not be binding on Lessee or have any legal effect whatsoever.

19

                    (d)
CPI Adjustments to Base Rent and Percentage Rent. For each year of the
Term beginning on or after January 1, 2012, the Base Rent shall be adjusted
from time to time as follows:

	
 

	
 

	
 

	
          (1)
If the most recently published Consumer Price Index as of the last day of the
last month (the “Comparison Month”) of any Fiscal Year is different than the
average Consumer Price Index for the twelve (12) month period prior thereto,
the Base Rent for the next Fiscal Year shall be adjusted by the percentage
change in the Consumer Price Index calculated as follows:

	
 

	
 

	
 

	
                    (A)
The difference between the Consumer Price Index for the most recent
Comparison Month and the average Consumer Price Index for the twelve (12)
month period prior thereto shall be divided by the average Consumer Price
Index for the twenty four (24) month period prior thereto.

	
 

	
 

	
 

	
                    (B)
The Base Rent shall be multiplied by the lesser of (i) seven percent (7%) or
(ii) the quotient obtained in subparagraph (d)(1)(A) above.

	
 

	
 

	
 

	
                    (C)
The product obtained in subparagraph (d)(1)(B) above shall be added to the
Base Rent.

          Adjustments
in the Base Rent shall be effective on the first day of the first calendar
month of the Fiscal Year to which such adjusted Base Rent applies. The Suite
Revenue Breakpoint then included in the Annual Revenues Computation pursuant to
Subsection 3.1(b) shall be similarly adjusted, effective with any such
adjustment in the Base Rent.

	
 

	
 

	
 

	
          (2)
If (i) a significant change is made in the number or nature (or both) of
items used in determining the Consumer Price Index, or (ii) the Consumer
Price Index shall be discontinued for any reason, the Bureau of Labor
Statistics shall be requested to furnish a new index comparable to the
Consumer Price Index, together with information which will make possible a
conversion to the new index in computing the adjusted Base Rent hereunder. If
for any reason the Bureau of Labor Statistics does not furnish such an index
and such information, the parties will instead mutually select, accept and
use such other index or comparable statistics on the cost of living in
Washington, D.C. that is computed and published by an agency of the United
States or a responsible financial periodical of recognized authority.

                    (e)
Manager Fund-up Cure Payments. If and to the extent that Manager pays
amounts to Lessee pursuant to the Management Agreement in order to avoid
termination of the Management Agreement by Lessee for Manager’s failure to meet
certain performance hurdles described therein, such amounts shall be treated as
additional Suite Revenues for purposes of the Percentage Rent calculation
hereunder.

                    (f)
Allocation of Rent. The parties hereto acknowledge and agree that the
Base Rent paid or payable by Lessee to Lessor hereunder shall, to the extent
relevant, be allocated between the personal property and real property
constituting Leased Property hereunder in direct 

20

proportion to the then recognizable fair market value
of such personal property and real property. Percentage Rent in excess of Base
Rent shall be allocated solely to real property.

          3.2.
Confirmation of Percentage Rent. Lessee shall utilize, or cause to be
utilized, an accounting system for the Leased Property in accordance with its
usual and customary practices, and in accordance with generally accepted
accounting principles, that will accurately record all data necessary to
compute Percentage Rent, and Lessee shall retain, for at least four (4) years
after the expiration of each Fiscal Year (and in any event until the
reconciliation described in Subsection 3.1(c) for such Fiscal Year has been
made), reasonably adequate records conforming to such accounting system showing
all data necessary to compute Percentage Rent for the applicable Fiscal Years.
Lessor, at its expense (except as provided hereinbelow), shall have the right
from time to time, upon prior written notice to Lessee and Manager, by its
accountants or representatives to audit the information that formed the basis
for the data set forth in any Officer’s Certificate provided under Subsection
3.1(d) and, in connection with such audits, to examine all Lessee’s records
(including supporting data and sales and excise tax returns) reasonably
required to verify Percentage Rent, subject to any prohibitions or limitations
on disclosure of any such data under Legal Requirements; provided, however that
Lessor may only inspect or audit records in Manager’s possession subject to the
terms of Lessee’s access thereto under the Management Agreement. If any such
audit discloses a deficiency in the payment of Percentage Rent, and either
Lessee agrees with the result of such audit or the matter is otherwise
determined or compromised, Lessee shall forthwith pay to Lessor the amount of
the deficiency, as finally agreed or determined, together with interest at the
Overdue Rate from the date when said payment should have been made to the date
of payment thereof; provided, however, that as to any audit that is commenced
more than two (2) years after the date Percentage Rent for any Fiscal Year is
reported by Lessee to Lessor, the deficiency, if any, with respect to such
Percentage Rent shall bear interest at the Overdue Rate only from the date such
determination of deficiency is made unless such deficiency is the result of
gross negligence or willful misconduct on the part of Lessee, in which case
interest at the Overdue Rate will accrue from the date such payment should have
been made to the date of payment thereof. If any such audit discloses that the
Percentage Rent actually due from Lessee for any Fiscal Year exceed those
reported by Lessee by more than three percent (3%), Lessee shall pay the cost
of such audit and examination. Any proprietary information obtained by Lessor
pursuant to the provisions of this Section shall be treated as confidential,
except that such information may be used, subject to appropriate
confidentiality safeguards, in any litigation between the parties and except
further that Lessor may disclose such information to prospective lenders. The
obligations of Lessee contained in this Section shall survive the expiration or
earlier termination of this Lease.

          3.3.
Additional Charges. In addition
to the Base Rent and Percentage Rent, (a) Lessee also will pay and discharge as
and when due and payable all other amounts, liabilities, obligations and
Impositions that Lessee assumes or agrees to pay under this Lease, and (b) in
the event of any failure on the part of Lessee to pay any of those items
referred to in clause (a) of this Section 3.3, Lessee also will promptly pay
and discharge every fine, penalty, interest and cost that may be added for
non-payment or late payment of such items (the items referred to in clauses (a)
and (b) of this Section 3.3 being additional rent hereunder and being referred
to herein collectively as the “Additional Charges”), and Lessor shall have all
legal, equitable and contractual rights, powers and remedies provided either in
this Lease or by statute or otherwise in the case of non-payment of the
Additional Charges as in the case of non-payment of the Base Rent. If any
installment of Base Rent 

21

and Percentage Rent or Additional Charges (but only as
to those Additional Charges that are payable directly to Lessor) shall not be
paid on its due date, Lessee will pay Lessor on demand, as Additional Charges,
a late charge (to the extent permitted by law) computed at the Overdue Rate on
the amount of such installment, from the due date of such installment to the
date of payment thereof. To the extent that Lessee pays any Additional Charges
to Lessor pursuant to any requirement of this Lease, Lessee shall be relieved
of its obligation to pay such Additional Charges to the entity to which they
would otherwise be due and Lessor shall pay same from monies received from
Lessee.

          3.4.
Net Lease; No Termination, Abatement, Etc.

                    (a)
The Rent shall be paid absolutely net to Lessor, so that this Lease shall yield
to Lessor the full amount of the installments of Base Rent, Percentage Rent and
Additional Charges throughout the Term, all as more fully set forth in Article
5, but subject to any other provisions of this Lease that expressly provide for
adjustment or abatement of Rent or other charges or expressly provide that
certain expenses or maintenance shall be paid or performed by Lessor.

                    (b)
Except as otherwise specifically provided in this Lease, and except for loss of
the Franchise Agreement solely by reason of any action or inaction by Lessor,
Lessee, to the extent permitted by law, shall remain bound by this Lease in
accordance with its terms and shall neither take any action without the written
consent of Lessor (which shall not be unreasonably withheld or delayed) to
modify, surrender or terminate the same, nor seek nor be entitled to any
abatement, deduction, deferment or reduction of the Rent, or setoff against the
Rent, nor shall the obligations of Lessee be otherwise affected by reason of
(a) any damage to, or destruction of, any Leased Property or any portion
thereof from whatever cause or any Taking of the Leased Property or any portion
thereof, (b) the lawful or unlawful prohibition of, or restriction upon,
Lessee’s use of the Leased Property, or any portion thereof, or the interference
with such use by any Person other than Lessor, (c) any claim which Lessee has
or might have against Lessor by reason of any default or breach of any warranty
by Lessor under this Lease or any other agreement between Lessor and Lessee, or
to which Lessor and Lessee are parties, (d) any bankruptcy, insolvency,
reorganization, composition, readjustment, liquidation, dissolution, winding up
or other proceedings affecting Lessor or any assignee or transferee of Lessor,
or (e) for any other cause whether similar or dissimilar to any of the
foregoing other than a discharge of Lessee from any such obligations as a
matter of law. Lessee hereby specifically waives all rights, arising from any
occurrence whatsoever, which may now or hereafter be conferred upon it by law
to (1) modify, surrender or terminate this Lease or quit or surrender the
Leased Property or any portion thereof, or (2) entitle Lessee to any abatement,
reduction, suspension or deferment of the Rent or other sums payable by Lessee
hereunder, except as otherwise specifically provided in this Lease. The
obligations of Lessee hereunder shall be separate and independent covenants and
agreements and the Rent and all other sums payable by Lessee hereunder shall
continue to be payable in all events unless the obligations to pay the same
shall be terminated pursuant to the express provisions of this Lease or by
termination of this Lease other than by reason of an Event of Default.

          3.5. Material Changes in Economic Climate. 

22

                    (a)
In the event of the occurrence of a Force Majeure or a Hotel Market Decline,
Lessor and Lessee shall, in good faith, negotiate possible modifications to the
Base Rent and Percentage Rent to reduce such Base Rent and Percentage Rent to
recent market rates for hotel REIT leases for similar hotel properties in the
Hotel’s Competitive Set, retroactively effective as of the first calendar month
of the Term following the last day of the six-month period during which such
Hotel Market Decline has occurred with the excess of Base Rent and Percentage
Rent actually paid for such period over the reduced Base Rent and Percentage
Rent, plus interest thereon at the Base Rate, to be credited to the next
payments of Rent due and owing hereunder. If Lessor and Lessee are unable to
agree that a Force Majeure or a Hotel Market Decline has occurred, within
thirty (30) days after the date of written certification from Lessee to Lessor
that a Force Majeure and Hotel Market Decline has occurred (accompanied by
reasonably detailed computations and documentation to support such assertion),
the matter may be submitted by either party to arbitration under Section 25.2
hereof for resolution (during which period Lessee shall continue to pay Base
Rent and Percentage Rent as required under Section 3.1 of this Lease). If,
within ninety (90) days (during which period Lessee shall continue to pay Base
Rent and Percentage Rent as required under Section 3.1 of this Lease) following
the date of such written certification from Lessee (or the date of a decision
of an arbitrator if required hereunder to determine that a Force Majeure and
Hotel Market Decline has occurred), Lessor and Lessee are unable to agree upon
the amount of reduction in Base Rent and Percentage Rent contemplated hereby,
Lessee shall have the option to terminate this Lease upon not less than thirty
(30) days prior written notice to Lessor.

                    (b)
In the event of the occurrence of a National Economic Decline or a Regional
Market Decline, Lessor and Lessee shall, in good faith, negotiate (i) possible
modifications to the Base Rent and Percentage Rent to reduce such Base Rent and
Percentage Rent to recent market rates for hotel REIT leases for similar hotel
properties in the Hotel’s Competitive Set, and (ii) possible modifications to
the Base and Percentage Rent payable under each of the Other Leases for Other
Hotels in the same Region (as defined in the STR Reports) as the Hotel to
reduce such Base Rent and Percentage Rent to recent market rates for hotel REIT
leases for similar hotel properties in the Hotel’s Competitive Set, in each
case retroactively effective as of the first calendar month of the Term
following the last day of the six month period during which such Regional
Market Decline has occurred with the excess of Base Rent and Percentage Rent
actually paid for such period over the reduced Base Rent and Percentage Rent,
plus interest thereon at the Base Rent, to be credited to the next payments of
Rent due and owing hereunder. If, within thirty (30) days after the date of
written certification from Lessee to Lessor that a National Economic Decline
and Regional Market Decline has occurred (accompanied by reasonably detailed
computations and documentation to support such assertion), Lessor and Lessee
are unable to agree that a National Economic Decline or Regional Market Decline
has occurred, the matter may be submitted by either party to arbitration under
Section 25.2 hereof for resolution (during which period Lessee shall continue
to pay Base Rent and Percentage Rent as required under Section 3.1 of this
Lease). If, within ninety (90) days (during which period Lessee shall continue
to pay Base Rent and Percentage Rent as required under Section 3.1 of this
Lease) following the date of such initial written certification from Lessee (or
the date of a decision of an arbitrator if required hereunder to determine that
a National Economic Decline and Regional Market Decline has occurred), Lessor
and Lessee are unable to agree upon the amount of reduction in Base Rent and
Percentage Rent contemplated hereby, Lessee shall have the option, upon not
less than sixty (60) days prior written notice to Lessor, to terminate all (but
not less than all) of the Existing Leases of hotels in the same 

23

Region as the Hotel, including this Lease. Any
downward adjustment in Base Rent or Percentage Rent that results in total
monthly rent that is less than the total monthly loan payment (including
reserves) payable by Lessor to Lessor’s primary lender (i.e., the lender having
a first lien position on the Hotel) shall be subject to the prior written
approval of Lessor’s primary lender or its designee.

          3.6.
Rent Adjustment: Basic Assumptions Incorrect. Except to the extent that
doing so would cause Lessor to recognize income other than “rents from real
property” as defined in Section 856(d) of the Code, notwithstanding anything
herein (other than Article 19) to the contrary, if (i) the facts and
circumstances underlying the documented, basic assumptions upon which both
Lessor and Lessee have relied in determining the Base Rent, the Suite Revenue
Breakpoint, and the Percentage Rent payable hereunder become materially
incorrect solely as a result of (A) a decision to re-brand the Hotel that is
made after the Commencement Date, (B) the scope or cost of substantial
renovations or other capital improvements to the Hotel, or (C) the
implementation of any other hotel repositioning strategies (that were not
planned as of the Commencement Date) resulting in significant disruption of the
operations of the Hotel (collectively, a “Repositioning”), and (ii) Lessor and
Lessee so agree in writing, then Lessor and Lessee shall, in good faith,
negotiate modifications to the Base Rent, Suite Revenue Breakpoint and
Percentage Rent to adjust (i.e., increase, decrease or reallocate among revenue
categories) such Base Rent, Suite Revenue Breakpoint and Percentage Rent to
reflect such change in basic assumptions for the affected periods, using the
same methodology and other basic assumptions as were initially utilized in
determining the Base Rent, Suite Revenue Breakpoint and Percentage Rent
hereunder. If Lessor and Lessee are unable to agree, within thirty (30) days
after the date of written certification from either Lessee or Lessor to the
other party that a good faith dispute exists, as to the existence of the
occurrence of a Repositioning or the adjustments to be made to the amounts or
percentages for the Base Rent, Suite Revenue Breakpoint and Percentage Rent
hereunder as a result of any repositioning, the dispute may be submitted by
either party to arbitration under Section 25.2 hereof for resolution (during
which period Lessee shall continue to pay Base Rent and Percentage Rent as
required under Section 3.1 of this Lease); provided, however, that for purposes
of applying the procedures in Section 25.3 to such arbitration, the target
deadline therein for concluding the arbitration shall be shortened from ninety
(90) days to thirty (30) days.

24

ARTICLE
4

ANNUAL BUDGETS; BOOKS AND RECORDS

          4.1.
Annual Budget. Not later than thirty (30) days prior to the commencement
of each Fiscal Year, Lessee shall submit the Annual Budget to Lessor. The
Annual Budget shall contain the following, to the extent included in the
operating budgets and capital budgets provided to Lessee by Manager under the
management agreement for the Hotel:

                    (a)
Lessee’s reasonable estimate of Gross Revenues (including room rates and Suite
Revenues), Gross Operating Expenses, and Gross Operating Profits for the forthcoming
Fiscal Year itemized on schedules on a quarterly basis as approved by Lessor
and Lessee, as same may be revised or replaced from time to time by Lessee and
approved by Lessor, together with the assumptions, in narrative form, forming
the basis of such schedules.

                    (b)
An estimate of the amounts to be dedicated to the repair, replacement, or
refurbishment of Furniture and Equipment.

                    (c)
An estimate of any amounts Lessor will be required to provide for required or
desirable capital improvements to the Hotel or any of its components.

                    (d)
A cash flow projection.

                    (e)
A business plan, which shall describe business objectives and strategies for
the forthcoming Fiscal Year, and shall include without limitation an analysis
of the market area in which the Hotel competes, a comparison of the Hotel and
its business with competitive hotels, an analysis of categories of potential
guests, and a description of sales and marketing activities designed to achieve
and implement identified objectives and strategies.

          4.2.
Books and Records. Lessee shall keep full and adequate books of account
and other records reflecting the results of operation of the Hotel on an
accrual basis, all in accordance with generally accepted accounting principles
and the obligations of Lessee under this Lease. The books of account and all
other records relating to or reflecting the operation of the Hotel shall be
kept either at the Hotel or at Lessee’s offices in Richmond, Virginia or at
Manager’s central offices, and shall be available to Lessor and its
representatives and its auditors or accountants, at all reasonable times, upon
prior written notice to Lessee and Manager, for examination, audit, inspection,
and transcription; provided, however that Lessor may only inspect or audit
records in Manager’s possession subject to the terms of Lessee’s access thereto
under the Management Agreement. All of such books and records pertaining to the
Hotel including, without limitation, books of account, guest records and front
office records, at all times shall be the property of Lessor and shall not be
removed from the Hotel or Lessee’s offices or Manager’s central offices (but
may be moved among any of the foregoing) by Lessee without Lessor approval.

25

ARTICLE
5

IMPOSITIONS; HOTEL COSTS

          5.1.
Payment of Impositions. Subject to Section 12.2 (relating to permitted
contests), Lessee will pay, or cause to be paid, all Impositions (other than
Real Estate Taxes and Personal Property Taxes, which shall be paid by Lessor)
before any fine, penalty, interest or cost may be added for non-payment, such
payments to be made directly to the taxing or other authorities where feasible,
and will promptly furnish to Lessor copies of official receipts or other
satisfactory proof evidencing such payments. Lessee’s obligation to pay such
Impositions shall be deemed absolutely fixed upon the date such Impositions
become a lien upon the Leased Property or any part thereof. If any such
Imposition may, at the option of the taxpayer, lawfully be paid in installments
(whether or not interest shall accrue on the unpaid balance of such
Imposition), Lessee may exercise the option to pay the same (and any accrued
interest on the unpaid balance of such Imposition) in installments and in such
event, shall pay such installments during the Term hereof (subject to Lessee’s
right of contest pursuant to the provisions of Section 12.2) as the same
respectively become due and before any fine, penalty, premium, further interest
or cost may be added thereto. Lessor, at its expense, shall, to the extent
required or permitted by applicable law, prepare and file all tax returns in
respect of Lessor’s net income, gross receipts, sales and use, single business,
transaction privilege, rent, ad valorem, franchise taxes, Real Estate Taxes,
Personal Property Taxes and taxes on its capital stock, and Lessee, at its
expense, shall, to the extent required or permitted by applicable laws and
regulations, prepare and file all other tax returns and reports in respect of
any Imposition as may be required by governmental authorities. If any refund
shall be due from any taxing authority in respect of any Imposition paid by
Lessee, the same shall be paid over to or retained by Lessee if no Event of
Default shall have occurred hereunder and be continuing. If an Event of Default
shall have occurred and be continuing, any such refund shall be paid over to or
retained by Lessor. Any such funds retained by Lessor due to an Event of
Default shall be applied as provided in Article 16. Lessor and Lessee shall,
upon request of the other, provide such data as is maintained by the party to
whom the request is made with respect to the Leased Property as may be
necessary to prepare any required returns and reports. Lessee shall file all
Personal Property Tax returns in such jurisdictions where it is legally
required so to file. Lessor, to the extent it possesses the same, and Lessee,
to the extent it possesses the same, will provide the other party, upon
request, with cost and depreciation records necessary for filing returns for
any property classified as personal property. Where Lessor is legally required
to file Personal Property Tax returns, Lessee shall provide Lessor with copies
of assessment notices in sufficient time for Lessor to file a protest. Lessor
may, upon Notice to Lessee, at Lessor’s option and at Lessor’s sole expense,
protest, appeal, or institute such other proceedings (in its or Lessee’s name)
as Lessor may deem appropriate to effect a reduction of real estate or personal
property assessments for those Impositions to be paid by Lessor, and Lessee, at
Lessor’s expense as aforesaid, shall fully cooperate with Lessor in such
protest, appeal, or other action. Lessor hereby agrees to indemnify, defend,
and hold harmless Lessee from and against any claims, obligations, liabilities
and loss against or incurred by Lessee in connection with such cooperation.
Billings for reimbursement of Personal Property Taxes by Lessee to Lessor shall
be accompanied by copies of a bill therefor and payments thereof which identify
the personal property with respect to which such payments are made. Lessor,
however, reserves the right to effect any such protest, appeal or other action
and, upon 

26

Notice to Lessee, shall control any such activity,
which shall then go forward at Lessor’s sole expense. Upon such Notice, Lessee,
at Lessor’s expense, shall cooperate fully with such activities.

          5.2.
Notice of Impositions. Lessor shall give prompt Notice to Lessee of all
Impositions payable by Lessee hereunder of which Lessor at any time has
knowledge, provided that Lessor’s failure to give any such Notice shall in no
way diminish Lessee’s obligations hereunder to pay such Impositions, but such failure
shall obviate any default hereunder for a reasonable time after Lessee receives
Notice of any Imposition which it is obligated to pay during the first taxing
period applicable thereto.

          5.3.
Adjustment of Impositions.
Impositions imposed in respect of the tax-fiscal period during which the
Term terminates shall be adjusted and prorated between Lessor and Lessee,
whether or not such Imposition is imposed before or after such termination, and
Lessee’s obligation to pay its prorated share thereof after termination shall
survive such termination.

          5.4.
Utility Charges. Lessee will be solely responsible for obtaining and
maintaining utility services to the Leased Property and will pay or cause to be
paid all charges for electricity, gas, oil, water, sewer and other utilities
used in the Leased Property during the Term.

          5.5.
Insurance Premiums. Lessee will pay or cause to be paid all premiums for
the insurance coverage’s required to be maintained by it under Article 13.

          5.6.
Franchise Fees. Lessee will maintain in full force and effect, and pay
or cause to be paid all fees and other charges payable pursuant to, any
Franchise Agreement with respect to the Hotel.

          5.7.
Ground Rent. In the event that Lessor’s interest in the Land is pursuant
to a Ground Lease or sublease, Lessor shall be solely responsible for the
payment of any ground rent, building rent or subrent, as the case may be, due
with respect to the Leased Property.

ARTICLE
6

LEASED PROPERTY; LESSEE’S PERSONAL PROPERTY

          6.1.
Ownership of the Leased Property. Lessee acknowledges that the Leased
Property is the property of Lessor and that Lessee has only the right to the
possession and use of the Leased Property upon the terms and conditions of this
Lease.

          6.2.
Lessee’s Personal Property. Lessee will acquire and maintain throughout
the Term such Inventory as is required to operate the Leased Property in the
manner contemplated by this Lease. Lessee may (and shall as provided
hereinbelow), at its expense, install, affix or assemble or place on any
parcels of the Land or in any of the Leased Improvements, any items of personal
property (including Inventory) owned by Lessee. Lessee, at the commencement of
the Term, and from time to time thereafter, shall provide Lessor with an
accurate list of all such items of Lessee’s personal property (collectively,
the “Lessee’s Personal Property”). Lessee may, subject to the first sentence of
this Section 6.2 and the conditions set forth below, remove any of Lessee’s
Personal 

27

Property set forth on such list at any time during the
Term or upon the expiration or any prior termination of the Term. All of
Lessee’s Personal Property, other than Inventory, not removed by Lessee within
ten (10) days following the expiration or earlier termination of the Term shall
be considered abandoned by Lessee and may be appropriated, sold, destroyed or
otherwise disposed of by Lessor without first giving Notice thereof to Lessee,
without any payment to Lessee and without any obligation to account therefor.
Lessee will, at its expense, restore the Leased Property to the condition
required by Subsection 2.3(g), including repair of all damage to the Leased
Property caused by the removal of Lessee’s Personal Property, whether effected
by Lessee or Lessor. Upon the expiration or earlier termination of the Term,
Lessor or its designee shall have the option to purchase all Inventory on hand
at the Leased Property at the time of such expiration or termination for a sale
price equal to the fair market value of such Inventory. Lessee may make such
financing arrangements, title retention agreements, leases or other agreements
with respect to Lessee’s Personal Property as it sees fit provided that Lessee
first advises Lessor of any such arrangement and such arrangement expressly
provides that in the event of Lessee’s default thereunder, Lessor (or its
designee) may assume Lessee’s obligations and rights under such arrangement.

          6.3.
Lessor’s Lien. To the fullest
extent permitted by applicable law, Lessor is granted a lien and security
interest on all Lessee’s personal property now or hereinafter placed in or upon
the Leased Property, and such lien and security interest shall remain attached
to such Lessee’s personal property until payment in full of all Rent and
satisfaction of all of Lessee’s obligations hereunder; provided, however,
Lessor shall subordinate its lien and security interest to that of any
non-Affiliate of Lessee which finances such Lessee’s personal property or any
non-Affiliate conditional seller of such Lessee’s personal property, the terms
and conditions of such subordination to be satisfactory to Lessor in the
exercise of reasonable discretion. Lessee shall, upon the request of Lessor,
execute such financing statements or other documents or instruments reasonably
requested by Lessor to perfect the lien and security interests herein granted.
Lessee hereby authorizes Lessor to execute and file financing statements signed
only be a representative of Lessor covering the security interest of Lessor in
Lessee’s personal property.

          6.4.
Lessor’s Option to Purchase Assets of Lessee. Effective on not less than
ninety (90) days’ prior Notice given at any time within one hundred eighty
(180) days before the expiration of the Term, but not later than ninety (90)
days prior to such expiration, or upon such shorter Notice period as shall be
appropriate if this Lease is terminated prior to its expiration date, Lessor
shall have the option to purchase all (but not less than all) of the assets of
Lessee, tangible and intangible, relating to the Leased Property (other than
this Lease), at the expiration or termination of this Lease for an amount
(payable in cash on the expiration date of this Lease) equal to the fair market
value thereof as appraised in conformity with Article 24, except that the
appraisers need not be members of the American Institute of Real Estate
Appraisers, but rather shall be appraisers having at least ten (10) years’
experience in valuing similar assets. Notwithstanding any such purchase, Lessor
shall obtain no rights to any trade name or logo used in connection with the
Franchise Agreement unless separate agreement as to such use is reached with
the applicable franchisor.

28

ARTICLE
7

CONDITION AND USE OF LEASED PROPERTY

          7.1.
Condition of the Leased Property. Lessee acknowledges receipt and
delivery of possession of the Leased Property. Lessee has examined and
otherwise has knowledge of the condition of the Leased Property and has found
the same to be satisfactory for its purposes hereunder. Lessee is leasing the
Leased Property “as is” in its present condition. Lessee waives any claim or
action against Lessor in respect of the condition of the Leased Property.
LESSOR MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, IN RESPECT OF
THE LEASED PROPERTY, OR ANY PART THEREOF, EITHER AS TO ITS FITNESS FOR USE,
DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE OR OTHERWISE, AS TO THE
QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, LATENT OR PATENT, IT BEING
AGREED THAT ALL SUCH RISKS ARE TO BE BORNE BY LESSEE. LESSEE ACKNOWLEDGES THAT
THE LEASED PROPERTY HAS BEEN INSPECTED BY LESSEE AND IS SATISFACTORY TO IT.
Provided, however, to the extent permitted by law, Lessor hereby assigns to Lessee
all of Lessor’s rights to proceed against any predecessor in title (other than
any Affiliate of Lessee, which conveyed the Property to Lessor) for breaches of
warranties or representations or for latent defects in the Leased Property.
Lessor shall fully cooperate with Lessee in the prosecution of any such claim,
in Lessor’s or Lessee’s name, all at Lessee’s sole cost and expense. Lessee
hereby agrees to indemnify, defend and hold harmless Lessor from and against
any claims, obligations and liabilities against or incurred by Lessor in
connection with such cooperation.

          7.2.
Use of the Leased Property.

                    (a)
Lessee covenants that it will proceed with all due diligence and will exercise
reasonable efforts to obtain and to maintain all Licenses and other approvals
needed to use and operate the Leased Property and the Hotel under applicable
local, state and federal law.

                    (b)
Lessee shall use or cause to be used the Leased Property only as a TownePlace Suites hotel facility, and for such other uses as may be necessary or
incidental to such use or such other use as otherwise approved by Lessor (the
“Primary Intended Use”). Lessee shall not use the Leased Property or any
portion thereof for any other use without the prior written consent of Lessor,
which consent may be granted, denied or conditioned in Lessor’s sole
discretion. No use shall be made or permitted to be made of the Leased
Property, and no acts shall be done, which will cause the cancellation or increase
the premium of any insurance policy covering the Leased Property or any part
thereof (unless another adequate policy satisfactory to Lessor is available and
Lessee pays any premium increase), nor shall Lessee sell or permit to be kept,
used or sold in or about the Leased Property any article which may be
prohibited by law or fire underwriter’s regulations. Lessee shall, at its sole
cost, comply with all of the requirements pertaining to the Leased Property of
any insurance board, association, organization or company necessary for the
maintenance of insurance, as herein provided, covering the Leased Property and
Lessee’s Personal Property.

29

                    (c)
Subject to the provisions of Articles 14, 15, 18 and 21, Lessee covenants and
agrees that during the Term it will (1) operate continuously the Leased
Property as a hotel facility, (2) keep in full force and effect and comply with
all the provisions of the Franchise Agreement and the Management Agreement, (3)
not terminate or amend the Franchise Agreement or the Management Agreement
without the consent of Lessor (which shall not be unreasonably withheld or
delayed), (4) maintain appropriate certifications and Licenses for such use and
(5) seek to maximize the Gross Revenues generated therefrom consistent with
sound business practices.

                    (d)
Lessee shall not commit or suffer to be committed any waste on the Leased
Property, or in the Hotel, nor shall Lessee cause or permit any nuisance
thereon.

                    (e)
Lessee shall neither suffer nor permit the Leased Property or any portion
thereof, or Lessee’s Personal Property, to be used in such a manner as (1)
might reasonably tend to impair Lessor’s (or Lessee’s, as the case may be)
title thereto or to any portion thereof, or (2) may reasonably make possible a
claim or claims of adverse usage or adverse possession by the public, as such,
or of implied dedication of the Leased Property or any portion thereof, except
as necessary in the ordinary and prudent operation of the Hotel on the Leased
Property.

          7.3.
Lessor to Grant Easements, Etc. Lessor will, from time to time, so long
as no Event of Default has occurred and is continuing, at the request of Lessee
and at Lessee’s cost and expense (but subject to the approval of Lessor, which
approval shall not be unreasonably withheld or delayed), (a) grant easements
and other rights in the nature of easements with respect to the Leased Property
to third parties, (b) release existing easements or other rights in the nature
of easements which are for the benefit of the Leased Property, (c) dedicate or
transfer unimproved portions of the Leased Property for road, highway or other
public purposes, (d) execute petitions to have the Leased Property annexed to
any municipal corporation or utility district, (e) execute amendments to any
covenants and restrictions affecting the Leased Property and (f) execute and
deliver to any Person any instrument appropriate to confirm or effect such
grants, releases, dedications, transfers, petitions and amendments (to the
extent of its interests in the Leased Property), but only upon delivery to
Lessor of an Officer’s Certificate stating that such grant, release,
dedication, transfer, petition or amendment does not interfere with the proper
conduct of the business of Lessee on the Leased Property and does not
materially reduce the value of the Leased Property.

ARTICLE
8

LESSEE’S COMPLIANCE WITH LAW; ENVIRONMENTAL COVENANTS

          8.1.
Compliance with Legal and Insurance Requirements, Etc. Subject to
Subsection 8.3(b) below and Section 12.2 (relating to permitted contests),
Lessee, at its expense, will promptly (a) comply with all applicable Legal
Requirements and Insurance Requirements in respect of the use, operation,
maintenance, repair and restoration of the Leased Property (excluding any
repair or restoration of any portion of the Leased Property required to be made
by Lessor pursuant to Subsection 9.1(b) below, which repair shall be made by
Lessor), and (b) procure, maintain and comply with all appropriate Licenses and
other authorizations required for any use of the Leased Property and Lessee’s
Personal Property then being made, and for the proper erection, installation,
operation and maintenance of the Leased Property or any part thereof.

30

          8.2.
Legal Requirement Covenants. 

                    (a)
Subject to Subsection 8.3(b) and Subsection 9.1(b) below, Lessee covenants and
agrees that the Leased Property and Lessee’s Personal Property shall not be
used for any unlawful purpose, and that Lessee shall not permit or suffer to
exist any unlawful use of the Leased Property by others. Lessee shall acquire
and maintain all appropriate licenses, certifications, permits and other
authorizations and approvals needed to operate the Leased Property in its
customary manner for the Primary Intended Use, and any other lawful use
conducted on the Leased Property as may be permitted from time to time
hereunder. Lessee further covenants and agrees that Lessee’s use of the Leased
Property and maintenance, alteration, and operation of the same, and all parts
thereof, shall at all times conform to all Legal Requirements, unless the same
are finally determined by a court of competent jurisdiction to be unlawful (and
Lessee shall cause all sub-tenants, invitees or others within its control so to
comply with all Legal Requirements). Lessee may, however, upon prior Notice to
Lessor, contest the legality or applicability of any such Legal Requirement or
any licensure or certification decision if Lessee maintains such action in good
faith, with due diligence, without prejudice to Lessor’s rights hereunder, and
at Lessee’s sole expense. If by the terms of any such Legal Requirement
compliance therewith pending the prosecution of any such proceeding may legally
be delayed without the occurrence of any charge or liability of any kind, or
the filing of any lien, against the Hotel or Lessee’s leasehold interest
therein and without subjecting Lessee or Lessor to any liability, civil or
criminal, for failure so to comply therewith, Lessee may delay compliance
therewith until the final determination of such proceeding. If any lien, charge
or civil or criminal liability would be incurred by reason of any such delay,
Lessee, on the prior written consent of Lessor, which consent shall not be
unreasonably withheld or delayed, may nonetheless contest as aforesaid and
delay as aforesaid provided that such delay would not subject Lessor to
criminal liability and Lessee both (a) furnishes to Lessor security reasonably
satisfactory to Lessor against any loss or injury by reason of such contest or
delay and (b) prosecutes the contest with due diligence and in good faith.

                    (b)
As between Lessor and Lessee, Lessee is solely responsible for all liabilities
or obligations of any kind with respect to employees at the Leased Property
during the Term. Without limiting the generality of the foregoing sentence,
Lessee is solely responsible for any required compliance with the Worker
Adjustment, Retraining and Notification Act of 1988 (the “WARN Act”) or any
similar state law applicable to the Leased Property; any required compliance
with the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
(“COBRA”); and all alleged and actual obligations and claims arising from or
relating to any employment agreement, collective bargaining agreement or
employee benefit plans, any grievances, arbitration’s, or unfair labor practice
charges, and relating to compliance with any applicable state or federal labor
employment law, including but not limited to all laws pertaining to
discrimination, workers’ compensation, unemployment compensation, occupational
safety and health, unfair labor practices, family and medical leave, and wages,
hours or employee benefits. Lessee agrees to indemnify and defend and hold
harmless Lessor from and against any claims relating to any of the foregoing
matters. Lessee further agrees to reimburse Lessor for any and all losses,
damages, costs, expenses, liabilities and obligations of any kind, including
without limitation reasonable attorney’s fees and other legal costs and
expenses, incurred by Lessor in connection with any of the foregoing matters.

31

                    (c)
Notwithstanding the Lessee’s obligations under Section 8.1 to obtain and maintain
all permits and licenses required for the use of the Leased Property, and
without limiting any obligations of Lessee hereunder, if (i) applicable law
requires that the owner (rather than a lessee) of a hotel be the licensee under
the required liquor license for the Hotel or (ii) the former owner of the Hotel
is holding the liquor license and continuing to exercise management and
supervision of the liquor services at the Hotel pending transfer of the license
to Lessor or Lessee, the Lessee shall indemnify and hold Lessor harmless from
any liability, damages or claims (a) arising in connection with liquor
operations at the Hotel during such period of time following the Commencement
Date, except to the extent caused by Lessor’s gross negligence or willful
misconduct or (b) made by or through the former owner with respect to liquor
operations at the Hotel following the Commencement Date. 

          8.3.
Environmental Covenants. Lessor and Lessee (in addition to, and not in
diminution of, Lessee’s covenants and undertakings in Sections 8.1 and 8.2
hereof) covenant and agree as follows:

                    (a)
At all times hereafter until the later of (i) such time as all liabilities,
duties or obligations of Lessee to Lessor under the Lease have been satisfied
in full and (ii) such time as Lessee completely vacates the Leased Property and
surrenders possession of the same to Lessor, Lessee shall fully comply with all
Environmental Laws applicable to the Leased Property and the operations
thereon. Lessee agrees to give Lessor prompt Notice of (1) all Environmental
Liabilities; (2) all pending, threatened or anticipated Proceedings, and all
notices, demands, requests or investigations, relating to any Environmental
Liability or relating to the issuance, revocation or change in any
Environmental Authorization required for operation of the Leased Property; (3)
all Releases at, on, in, under or in any way affecting the Leased Property, or
any Release known by Lessee at, on, in or under any property adjacent to the
Leased Property; and (4) all facts, events or conditions that could reasonably
lead to the occurrence of any of the above-referenced matters.

                    (b)
Lessor hereby agrees to defend, indemnify and save harmless any and all Lessee
Indemnified Parties from and against any and all Environmental Liabilities
other than (i) Environmental Liabilities resulting from conditions disclosed in
any environmental audit obtained by Lessor and provided to Lessee prior to the
execution of this Lease (the “Environmental Audit”), and (ii) Environmental
Liabilities which were caused by the acts or negligent failures to act of
Lessee.

                    (c)
Lessee hereby agrees to defend, indemnify and save harmless any and all Lessor
Indemnified Parties from and against any and all Environmental Liabilities
which were (i) resulting from conditions disclosed in the Environmental Audit,
and (ii) caused by the acts or negligent failures to act of Lessee.

                    (d)
If any Proceeding is brought against any Indemnified Party in respect of an
Environmental Liability with respect to which such Indemnified Party may claim
indemnification under either Subsection 8.3(b) or (c), the Indemnifying Party,
upon request, shall at its sole expense resist and defend such Proceeding, or
cause the same to be resisted and defended by counsel designated by the
Indemnified Party and approved by the Indemnifying Party, which approval shall 

32

not be unreasonably withheld or delayed; provided,
however, that such approval shall not be required in the case of defense by
counsel designated by any insurance company undertaking such defense pursuant
to any applicable policy of insurance. Each Indemnified Party shall have the
right to employ separate counsel in any such Proceeding and to participate in
the defense thereof, but the fees and expenses of such counsel will be at the
sole expense of such Indemnified Party unless such counsel has been approved by
the Indemnifying Party, which approval shall not be unreasonably withheld or
delayed. The Indemnifying Party shall not be liable for any settlement of any
such Proceeding made without its consent, which shall not be unreasonably
withheld or delayed, but if settled with the consent of the Indemnifying Party,
or if settled without its consent (if its consent shall be unreasonably
withheld or delayed), or if there be a final, nonappealable judgment for an
adversary party in any such Proceeding, the Indemnifying Party shall indemnify
and hold harmless the Indemnified Parties from and against any liabilities and
loss incurred by such Indemnified Parties by reason of such settlement or
judgment.

                    (e)
At any time any Indemnified Party has reason to believe circumstances exist
which could reasonably result in an Environmental Liability, upon reasonable
prior Notice to Lessee and Manager stating such Indemnified Party’s basis for
such belief, an Indemnified Party shall be given immediate access to the Leased
Property (including, but not limited to, the right to enter upon, investigate,
drill wells, take soil borings, excavate, monitor, test, cap and use available
land for the testing of remedial technologies), Lessee’s employees, and to all
relevant documents and records regarding the matter as to which a
responsibility, liability or obligation is asserted or which is the subject of
any Proceeding; provided that such access may he conditioned or restricted as
may be reasonably necessary to ensure compliance with law and the safety of
personnel and facilities or to protect confidential or privileged information.
All Indemnified Parties requesting such immediate access and cooperation shall
endeavor to coordinate such efforts to result in as minimal interruption of the
operation of the Leased Property as practicable.

                    (f)
The indemnification rights and obligations provided for in this Article 8 shall
be in addition to any indemnification rights and obligations provided for
elsewhere in this Lease.

                    (g)
The indemnification rights and obligations provided for in this Article 8 shall
survive the termination of this Lease.

          For
purposes of this Section 8.3, all amounts for which any Indemnified Party seeks
indemnification shall be computed net of (a) any actual income tax benefit
resulting therefrom to such Indemnified Party, (b) any insurance proceeds
received (net of tax effects) with respect thereto, and (c) any amounts
recovered (net of tax effects) from any third parties based on claims the
Indemnified Party has against such third parties which reduce the damages that
would otherwise be sustained; provided that in all cases, the timing of the
receipt or realization of insurance proceeds or income tax benefits or
recoveries from third parties shall be taken into account in determining the
amount of reduction of damages. Each Indemnified Party agrees to use its
reasonable efforts to pursue, or assign to Lessee or Lessor, as the case may
be, any claims or rights it may have against any third party that would
materially reduce the amount of damages otherwise incurred by such Indemnified
Party.

33

          Notwithstanding
anything to the contrary contained in this Lease, if Lessor shall become
entitled to the possession of the Leased Property by virtue of the termination
of the Lease or repossession of the Leased Property, then Lessor may assign its
indemnification rights under this Section 8.3 (but not any other rights under
this Section 8.3) to any Person to whom Lessor subsequently transfers the
Leased Property, subject to the following conditions and limitations, each of
which shall be deemed to be incorporated into the terms of such assignment,
whether or not specifically referred to therein:

	
 

	
 

	
 

	
          (i)
The indemnification rights referred to in this section may be assigned only
if a known Environmental Liability then exists or if a Proceeding is then
pending or, to the knowledge of Lessee or Lessor, then threatened with
respect to the Leased Property;

	
 

	
 

	
 

	
          (ii)
Such indemnification rights shall be limited to Environmental Liabilities
relating to or specifically affecting the Leased Property; and

	
 

	
 

	
 

	
          (iii)
Any assignment of such indemnification rights shall be limited to the
immediate transferee of Lessor, and shall not extend to any such transferee’s
successors or assigns.

ARTICLE
9

MAINTENANCE AND REPAIRS; ENCROACHMENTS AND RESTRICTIONS

          9.1.
Maintenance and Repairs.

                    (a)
Lessee, at its sole expense, will keep the Leased Property, and all private
roadways, sidewalks and curbs appurtenant thereto that are under Lessee’s
control, including windows and plate glass, mechanical, electrical and plumbing
systems and equipment (including conduit and ductware), and non-load bearing
interior walls, and parking lot surfaces, in good order and repair, except (i)
for ordinary wear and tear (whether or not the need for such repairs occurred
as a result of Lessee’s use, any prior use, the elements or the age of the
Leased Property, or any portion thereof) and (ii) to the extent of damage
caused by Lessor’s gross negligence or willful misconduct or that of its
employees or agents, and, except as otherwise provided in Subsection 9.1(b),
Article 14 or Article 15, with reasonable promptness, make all necessary and
appropriate repairs replacements, and improvements thereto of every kind and
nature, whether interior or exterior ordinary or extraordinary, foreseen or
unforeseen or arising by reason of a condition existing prior to the
commencement of the Term of this Lease (concealed or otherwise), or required by
any governmental agency having jurisdiction over the Leased Property, except as
to the structural elements of the Leased Improvements. Lessee, however, shall
be permitted to prosecute claims against Lessor’s predecessors in title for
breach of any representation or warranty or for any latent defects in the
Leased Property to be maintained by Lessee unless Lessor is already diligently
pursuing such a claim. All repairs shall, to the extent reasonably achievable,
be at least equivalent in quality to the original work. Lessee will not take or
omit to take any action, the taking or omission of which might materially
impair the value or the usefulness of the Leased Property or any part thereof
for its Primary Intended Use.

34

                    (b)
Notwithstanding Lessee’s obligations under Subsection 9.1(a) above, except to
the extent of damage caused by Lessee’s negligence or willful misconduct or
that of its employees or agents, Lessor shall be required to bear the cost of
maintaining any underground utilities and the structural elements of the Leased
Improvements, including exterior walls and the roof of the Hotel (but excluding
windows and plate glass, mechanical, electrical and plumbing systems and
equipment, including conduit and ductware, and non-load bearing walls, and
parking lot surfaces). Except as set forth in the preceding sentence and in
Section 10.5, Lessor shall not under any circumstances be required to build or
rebuild any improvement on the Leased Property, or to make any repairs, replacements,
alterations, restorations or renewals of any nature or description to the
Leased Property, whether ordinary or extraordinary, foreseen or unforeseen, or
to make any expenditure whatsoever with respect thereto, in connection with
this Lease, or to maintain the Leased Property in any way. Lessee hereby
waives, to the extent permitted by law, the right to make repairs at the
expense of Lessor, pursuant to any law in effect at the time of the execution
of this Lease or hereafter enacted, except following default by Lessor under
this Lease, to the extent of repairs (for which Lessor is obligated hereunder)
required to be made in order for the Hotel, and Lessee’s use thereof, to comply
with Lessee’s obligations under the Franchise Agreement and the Management
Agreement. Lessor shall have the right to give, record and post, as
appropriate, notices of nonresponsibility under any mechanic’s lien laws now or
hereafter existing.

                    (c)
Nothing contained in this Lease and no action or inaction by Lessor shall be
construed as (1) constituting the request of Lessor, expressed or implied, to
any contractor, subcontractor, laborer, materialman or vendor to or for the
performance of any labor or services or the furnishing of any materials or
other property for the construction, alteration, addition, repair or demolition
of or to the Leased Property or any part thereof, or (2) giving Lessee any
right, power or permission to contract for or permit the performance of any
labor or services or the furnishing of any materials or other property in such
fashion as would permit the making of any claim against Lessor in respect
thereof or to make any agreement that may create, or in any way be the basis
for any right, title, interest, lien, claim or other encumbrance upon the
estate of Lessor in the Leased Property, or any portion thereof.

          9.2.
Encroachments, Restrictions, Etc. Lessor represents and warrants that
the Leased Improvements do not materially encroach upon any property, street or
right-of-way adjacent to the Leased Property, or violate the agreements or
conditions contained in any lawful restrictive covenant or other agreement
affecting the Leased Property, or any part thereof, or impair the rights of
others under any easement or right-of-way to which the Leased Property is
subject. Except to the extent that such representation and warranty is breached
by Lessor, if any of the Leased Improvements, at any time hereafter, materially
encroach upon any property, street or right-of-way adjacent to the Leased
Property, or violate the agreements or conditions contained in any lawful
restrictive covenant or other agreement affecting the Leased Property, or any
part thereof, or impair the rights of others under any easement or right-of-way
to which the Leased Property is subject, then promptly upon the request of
Lessor or at the behest of any Person affected by any such encroachment,
violation or impairment, Lessee shall, at its expense, subject to its right to
contest the existence of any encroachment, violation or impairment and in such
case, in the event of an adverse final determination, either (a) obtain valid
and effective waivers or settlements of all claims, liabilities and damages
resulting from each such encroachment, violation or impairment, 

35

whether the same shall affect Lessor or Lessee or (b)
make such changes in the Leased Improvements, and take such other actions, as
Lessee in the good faith exercise of its judgment deems reasonably practicable
to remove such encroachment, and to end such violation or impairment,
including, if necessary, the alteration of any of the Leased Improvements, and
in any event take all such actions as may be necessary in order to be able to
continue the operation of the Leased Improvements for the Primary Intended Use
substantially in the manner and to the extent the Leased Improvements were
operated prior to the assertion of such violation, impairment or encroachment.
Any such alteration shall be made in conformity with the applicable
requirements of Article 10. Lessee’s obligations under this Section 9.2 shall
be in addition to and shall in no way discharge or diminish any obligation of
any insurer under any policy of title or other insurance held by Lessor.

ARTICLE
10

ALTERATIONS AND IMPROVEMENTS; FF&E RESERVE

          10.1.
Alterations. After receiving approval of Lessor, which approval shall
not be unreasonably withheld or delayed, Lessee shall have the right to make
such additions, modifications or improvements to the Leased Property from time
to time as Lessee deems desirable for its permitted uses and purposes, provided
that such action will not significantly alter the character or purposes or
significantly detract from the value or operating efficiency thereof and will
not significantly impair the revenue-producing capability of the Leased
Property or adversely affect the ability of Lessee to comply with the
provisions of this Lease. The cost of such additions, modifications or
improvements to the Leased Property shall be paid by Lessee, and all such additions,
modifications and improvements shall, without payment by Lessor at any time, be
included under the terms of this Lease and upon expiration or earlier
termination of this Lease shall pass to and become the property of Lessor.

          10.2.
Salvage. All materials which are scrapped or removed in connection with
the making of repairs required by Articles 9 or 10 shall be or become the
property of Lessor or Lessee depending on which party is paying for or
providing the financing for such work.

          10.3.
Joint Use Agreements. If Lessee constructs additional improvements that
are connected to the Leased Property or share maintenance facilities, HVAC,
electrical, plumbing or other systems, utilities, parking or other amenities,
the parties shall enter into a mutually agreeable cross-easement or joint use
agreement, the form of which has been approved in advance by Lessor, to make
available necessary services and facilities in connection with such additional
improvements, to protect each of their respective interests in the properties
affected, and to provide for separate ownership, use, and/or financing of such
improvements.

          10.4.
[Reserved]. 

          10.5.
Furniture, Fixture and Equipment Allowance. Lessor shall be obligated to
pay Lessee, when and as required to meet the requirements of the Franchise
Agreement and the Management Agreement for a reserve for periodic repair,
replacement or refurbishing of furniture, fixtures and equipment that
constitute Leased Property, an amount equal up to five percent (5%) of Suite
Revenues monthly. Upon written request by Lessee to Lessor stating the specific
use to be 

36

made and the reasonable approval thereof by Lessor (or
as otherwise required by the franchisor under the Franchise Agreement or Manager
under the Management Agreement), such reserve funds (and additional funds of
Lessor, if necessary) shall be made available by Lessor for use by Lessee for
replacement or refurbishing of furniture, fixtures and equipment that
constitute Leased Property in connection with the Primary Intended Use;
provided, however, that no amounts made available under this Article shall be
used to purchase property (other than “real property” within the meaning of
Treasury Regulations Section 1.856-3(d)), to the extent that doing so would
cause Lessor to recognize income other than “rents from real property” as
defined in Section 856(d) of the Code. Lessor’s obligation shall be cumulative,
but not compounded, and any amounts that have accrued hereunder shall be payable
in future periods for such uses and in accordance with the procedure set forth
herein. Lessee shall have no interest in any accrued obligation of Lessor
hereunder after the termination of this Lease.

ARTICLE
11

COMPLIANCE WITH FRANCHISE

          11.1.
Compliance with Franchise Agreement and Management Agreement. To the
extent any of the provisions of the Franchise Agreement or Management Agreement
impose a greater obligation on Lessee than the corresponding provisions of the
Lease, then Lessee shall be obligated to comply with, and to take all
reasonable actions necessary to prevent breaches or defaults under, the
provisions of the Franchise Agreement and the Management Agreement. It is the
intent of the parties hereto that Lessee shall comply in every respect with the
provisions of the Franchise Agreement and the Management Agreement so as to
avoid any material default thereunder during the term of this Lease. Lessee
shall not terminate, extend or enter into any material modification of the
Franchise Agreement or the Management Agreement without in each instance first
obtaining Lessor’s prior written consent, which shall not be unreasonably
withheld. Lessor and Lessee agree to cooperate with each other in the event it
becomes necessary to obtain a franchise extension or modification (or, at
Lessor’s option, a new franchise) for the Leased Property, and in any transfer
of the Franchise Agreement or Management Agreement to Lessor or any designee of
Lessor or any successor to Lessee upon the termination of this Lease. In the
event of expiration or termination of a Franchise Agreement or Management
Agreement, for whatever reason, Lessor will have the right, in the exercise of
its sole discretion, to approve any new Franchise Agreement or Management
Agreement for the Hotel.

ARTICLE
12

PERMITTED LIENS AND CONTESTS

          12.1.
Liens. Subject to the provisions of Section 12.2 relating to permitted
contests, Lessee will not directly or indirectly create or allow to remain and
will promptly discharge at its expense any lien, encumbrance, attachment, title
retention agreement or claim upon the Leased Property or any attachment, levy,
claim or encumbrance in respect of the Rent, not including, however, (a) this
Lease, (b) the matters included as exceptions in the title policy insuring
Lessor’s interest in the Leased Property, (c) restrictions, liens and other
encumbrances which are consented to in writing by Lessor or any easements
granted pursuant to the provisions of Section 7.3 of this Lease, (d) liens for
those taxes upon Lessor or the Leased Property which Lessee is not required to
pay hereunder, (e) subleases permitted by Article 20 hereof, (f) liens for
Impositions or for sums 

37

resulting from noncompliance with Legal Requirements
so long as (1) the same are not yet payable or are payable without the addition
of any fine or penalty or (2) such liens are in the process of being contested
as permitted by Section 12.2, (g) liens of mechanics, laborers, materialmen,
suppliers or vendors for sums either disputed or not yet due provided that (1)
the payment of such sums shall not be postponed under any related contract for
more than sixty (60) days after the completion of the action giving rise to
such lien and such reserve or other appropriate provisions as shall be required
by law or generally accepted accounting principles shall have been made
therefor or (2) any such liens are in the process of being contested as
permitted by Section 12.2 hereof, and (h) any liens which are the
responsibility of Lessor pursuant to the provisions of Article 22 of this
Lease.

          12.2.
Permitted Contests. Lessee shall have the right to contest the amount or
validity of any Imposition to be paid by Lessee or any Legal Requirement or
Insurance Requirement or any lien, attachment, levy, encumbrance, charge or
claim (“Claims”) not otherwise permitted by Section 12.1, by appropriate legal
proceedings in good faith and with due diligence (but this shall not be deemed
or construed in any way to relieve, modify or extend Lessee’s covenants to pay
or its covenants to cause to be paid any such charges at the time and in the
manner as in this Section provided), on condition, however, that such legal
proceedings shall not operate to relieve Lessee from its obligations hereunder
and shall not cause the sale or risk the loss of any portion of the Leased
Property, or any part thereof, or cause Lessor or Lessee to be in default under
any mortgage, deed of trust, security deed or other agreement encumbering the
Leased Property or any interest therein. Upon the request of Lessor, Lessee
shall either (a) provide a bond or other assurance reasonably satisfactory to
Lessor that all Claims which may be assessed against the Leased Property
together with interest and penalties, if any, thereon will be paid, or (b)
deposit within the time otherwise required for payment with a bank or trust
company as trustee upon terms reasonably satisfactory to Lessor, as security
for the payment of such Claims, money in an amount sufficient to pay the same,
together with interest and penalties in connection therewith, as to all Claims
which may be assessed against or become a Claim on the Leased Property, or any
part thereof, in said legal proceedings. Lessee shall furnish Lessor and any
lender of Lessor with reasonable evidence of such deposit within five (5) days
of the same. Lessor agrees to join in any such proceedings if the same be
required legally to prosecute such contest of the validity of such Claims;
provided, however, that Lessor shall not thereby be subjected to any liability
or loss for the payment of any costs or expenses in connection with any
proceedings brought by Lessee; and Lessee covenants to indemnify and save
harmless Lessor from any such liabilities, losses, costs or expenses. Lessee
shall be entitled to any refund of any Claims and such charges and penalties or
interest thereon which have been paid by Lessee or paid by Lessor and for which
Lessor has been fully reimbursed. In the event that Lessee fails to pay any
Claims when due or to provide the security therefor as provided in this Section
and diligently to prosecute any contest of the same, Lessor may, upon ten (10)
days’ advance Notice to Lessee, and Lessee’s failure to correct the same within
such ten (10) day period, pay such charges together with any interest and
penalties and the same shall be repayable by Lessee to Lessor as Additional
Charges at the next Payment Date provided for in this Lease; provided, however,
that should Lessor reasonably determine that the giving of such Notice would
risk loss to the Leased Property or cause damage to Lessor, then Lessor shall
give such Notice as is practical under the circumstances. Lessor reserves the
right to contest any of the Claims at its expense not pursued by Lessee. Lessor
and Lessee agree to cooperate in coordinating the contest of any Claims.

38

ARTICLE
13

INSURANCE REQUIREMENTS

          13.1.
General Insurance Requirements. During the Term of this Lease, Lessor
and Lessee shall at all times keep the Leased Property insured with the kinds
and amounts of insurance described below, or such other insurance coverage(s)
as may be required by the Franchise Agreement. This insurance shall be written
by companies authorized to issue insurance in the State. The policies must name
Lessor and/or Lessee, as applicable, as the insured or as an additional named
insured, as the case may be. Losses shall be payable to Lessor or Lessee as
provided in this Lease. Any loss adjustment shall require the written consent
of Lessor and Lessee, each acting reasonably and in good faith. Evidence of
insurance shall be deposited with Lessor. The policies on the Leased Property,
including the Leased Improvements, Fixtures and Lessee’s Personal Property,
shall include the following:

                    (a)
Lessor shall obtain and maintain, at its own expense:

	
 

	
 

	
 

	
          (i)
Building insurance on the “Special Form” (formerly “All Risk” form)
(including earthquake and flood in reasonable amounts as determined by
Lessor) in an amount not less than 100% of the then full replacement cost
thereof (as defined in Section 13.2) or such other amount which is acceptable
to Lessor and Lessee, and personal property insurance (on other than Lessee’s
Personal Property) on the “Special Form” in the full amount of the
replacement cost thereof;

	
 

	
 

	
 

	
          (ii)
Insurance for loss or damage (direct and indirect) from steam boilers,
pressure vessels or similar apparatus, now or hereafter installed in the
Hotel, in the minimum amount of $5,000,000 or in such greater amounts as are
then customary; and

	
 

	
 

	
 

	
          (iii)
Loss of income insurance on the “Special Form”, in the amount of one year of
Base Rent and Additional Charges (to the extent quantifiable) for the benefit
of Lessor.

                    (b)
Lessee shall obtain and maintain, at its own expense:

	
 

	
 

	
 

	
          (i)
Personal property insurance on Lessee’s Personal Property on the “Special
Form” in the full amount of the replacement cost thereof;

	
 

	
 

	
 

	
          (ii)
Comprehensive general liability insurance, with amounts not less than
$10,000,000 covering each of the following: bodily injury, death, or property
damage liability per occurrence, personal and advertising injury, general
aggregate, products and completed operations, with respect to Lessor, and
“all risk legal liability” (including liquor law or “dram shop” liability, if
liquor or alcoholic beverages are served on the Leased Property) with respect
to Lessor and Lessee;

39

	
 

	
 

	
 

	
          
(iii) Insurance covering such other hazards and in such amounts as may be
customary for comparable properties in the area of the Leased Property and is
available from insurance companies, insurance pools or other appropriate
companies authorized to do business in the State at rates which are
economically practicable in relation to the risks covered, as may be
reasonably requested by Lessor;

	
 

	
 

	
 

	
          (iv)
Fidelity bonds with limits and deductibles as may be reasonably requested by
Lessor, covering Lessee’s employees in job classifications normally bonded
under prudent hotel management practices in the United States or otherwise
required by law;

	
 

	
 

	
 

	
          (v)
Worker’s compensation insurance coverage for all persons, if any, employed by
Lessee on the Leased Premises, to the extent necessary to protect Lessor and
the Leased Property against Lessee’s worker’s compensation claims, such
worker’s compensation insurance to be in accordance with the requirements of
applicable local, state and federal law;

	
 

	
 

	
 

	
          (vi)
Vehicle liability insurance for owned, non-owned, and hired vehicles, in the
amount of $5,000,000; and

	
 

	
 

	
 

	
          (vii)
Such other insurance as Lessor may reasonably request for facilities such as
the Leased Property and the operation thereof.

          13.2.
Replacement Cost. The term “full replacement cost” as used herein shall
mean the actual replacement cost of the Leased Property requiring replacement
from time to time including an increased cost of construction endorsement, if
available, and the cost of debris removal. In the event either party believes
that full replacement cost (the then-replacement cost less such exclusions) has
increased or decreased at any time during the Lease Term, it shall have the
right to have such full replacement cost re-determined.

          13.3.
Waiver of Subrogation. All insurance policies carried by Lessor or
Lessee covering the Leased Property, the Fixtures, the Hotel or Lessee’s
Personal Property, including, without limitation, contents, fire and casualty
insurance, shall expressly waive any right of subrogation on the part of the
insurer against the other party. The parties hereto agree that their policies
will include such waiver clause or endorsement so long as the same are
obtainable without extra cost, and in the event of such an extra charge the
other party, at its election, may pay the same, but shall not be obligated to
do so.

          13.4.
Form Satisfactory, Etc.

                    (a)
All of the policies of insurance referred to in this Article 13 to be
maintained by Lessee shall be written in a form, with deductibles and by
insurance companies satisfactory to Lessor. Lessee shall pay all of the
premiums therefor, and deliver such policies or certificates thereof to Lessor
prior to their effective date (and, with respect to any renewal policy, thirty
(30) days prior to the expiration of the existing policy), and in the event of
the failure of Lessee either to effect such insurance as herein called for or
to pay the premiums therefor, or to deliver such 

40

policies or certificates thereof to Lessor at the
times required, Lessor shall be entitled, but shall have no obligation, to
effect such insurance and pay the premiums therefor, and Lessee shall reimburse
Lessor for any premium or premiums paid by Lessor for the coverages required of
Lessee under this Article 13 upon written demand therefor, and Lessee’s failure
to repay the same within thirty (30) days after Notice of such failure from
Lessor shall constitute an Event of Default within the meaning of Section 16.1.
Each insurer mentioned in this Article 13 shall agree, by endorsement to the
policy or policies issued by it, or by independent instrument furnished to
Lessor, that it will give to Lessor thirty (30) days’ written notice before the
policy or policies in question shall be materially altered, allowed to expire or
canceled.

                    (b)
All of the policies of insurance referred to in this Article 13 to be
maintained by Lessor shall be written in a form, with deductibles and by
insurance companies satisfactory to Lessee. Lessor shall pay all of the premiums
therefor, and deliver such policies or certificates thereof to Lessee prior to
their effective date (and, with respect to any renewal policy, thirty (30) days
prior to the expiration of the existing policy), and in the event of the
failure of Lessor either to effect such insurance as herein called for or to
pay the premiums therefor, or to deliver such policies or certificates thereof
to Lessee at the times required, Lessee shall be entitled, but shall have no
obligation, to effect such insurance and pay the premiums therefor, and Lessor
shall reimburse Lessee for any premium or premiums paid by Lessee for the
coverages required under this Section upon written demand therefor. Each
insurer mentioned in this Article 13 shall agree, by endorsement to the policy
or policies issued by it, or by independent instrument furnished to Lessee,
that it will give to Lessee thirty (30) days’ written notice before the policy
or policies in question shall be materially altered, allowed to expire or
canceled.

          13.5.
Increase in Limits. If either Lessor or Lessee at any time deems the
limits of the personal injury or property damage under the comprehensive public
liability insurance then carried to be either excessive or insufficient, Lessor
and Lessee shall endeavor in good faith to agree on the proper and reasonable
limits for such insurance to be carried and such insurance shall thereafter be
carried with the limits thus agreed on until further change pursuant to the
provisions of this Article 13.

          13.6.
Blanket Policy. Notwithstanding anything to the contrary contained in
this Article 13. Lessee or Lessor may bring the insurance provided for herein
within the coverage of a so-called blanket policy or policies of insurance
carried and maintained by Lessee (or Manager) or Lessor; provided, however,
that the coverage afforded to Lessor and Lessee will not be reduced or
diminished or otherwise be different from that which would exist under a
separate policy meeting all other requirements of this Lease by reason of the
use of such blanket policy of insurance, and provided further that the
requirements of this Article 13 are otherwise satisfied.

          13.7.
No Separate Insurance. Lessee shall not, on Lessee’s own initiative or
pursuant to the request or requirement of any third party, take out separate
insurance concurrent in form or contributing in the event of loss with that
required in this Article to be furnished, or increase the amount of any then
existing insurance by securing an additional policy or additional policies,
unless all parties having an insurable interest in the subject matter of the
insurance, including in all cases Lessor, are included therein as additional
insured, and the loss is payable under such additional separate insurance in
the same manner as losses are payable under this Lease. Lessee 

41

shall immediately notify Lessor of any such separate
insurance that Lessee has obtained or of the increase of any of the amounts of
the then existing insurance.

          13.8.
Reports On Insurance Claims. Lessee shall promptly investigate and make
a complete and timely written report to the appropriate insurance company as to
all accidents, claims for damage relating to the ownership, operation, and
maintenance of the Hotel, any damage or destruction to the Hotel and the
estimated cost of repair thereof and shall prepare any and all reports required
by any insurance company in connection therewith. All such reports shall be
timely filed with the insurance company as required under the terms of the
insurance policy involved, and a final copy of such report shall be furnished
to Lessor. Lessee shall be authorized to adjust, settle, or compromise any
insurance loss, or to execute proofs of such loss, in the aggregate amount of
$25,000 or less, with respect to any single casualty or other event.

ARTICLE
14

CASUALTY INSURANCE PROCEEDS; RECONSTRUCTION

          14.1.
Insurance Proceeds. Subject to the provisions of Section 14.4, all
proceeds payable by reason of any loss or damage to the Leased Property, or any
portion thereof, insured under any policy of insurance required by Article 13
of this Lease, shall be paid to Lessor and held in trust by Lessor in an
interest-bearing account, shall be made available, if applicable, for
reconstruction or repair, as the case may be, of any damage to or destruction
of the Leased Property, or any portion thereof, and, if applicable, shall be
paid out by Lessor from time to time for the reasonable costs of such
reconstruction or repair upon satisfaction of reasonable terms and conditions
specified by Lessor. Any excess proceeds of insurance (and accrued interest)
remaining after the completion of the restoration or reconstruction of the
Leased Property, as hereinafter set forth, shall be paid to Lessee. If neither
Lessor nor Lessee is required or elects to repair and restore, and the Lease is
terminated without purchase by Lessee as described in Section 14.2, all such
insurance proceeds shall be retained by Lessor. All salvage resulting from any
risk covered by insurance shall belong to Lessor.

          14.2.
Reconstruction in the Event of Damage or Destruction Covered by Insurance.

                    (a)
Except as provided in Section 14.6, if during the Term the Leased Property is
totally or partially destroyed by a risk covered by the insurance described in
Article 13 and the Hotel thereby is rendered Unsuitable for its Primary
Intended Use, Lessee shall, at Lessee’s option, either (1) restore the Hotel to
substantially the same condition as existed immediately before the damage or
destruction and otherwise in accordance with the terms of the Lease, or (2)
offer to acquire the Leased Property from Lessor for a purchase price equal to
the Rejectable Offer Price of the Leased Property. If Lessee restores the
Hotel, the insurance proceeds shall be paid out by Lessor from time to time for
the reasonable costs of such restoration upon satisfaction of reasonable terms
and conditions, and any excess proceeds remaining after such restoration shall
be paid to Lessee. If Lessee acquires the Leased Property, Lessee shall receive
the insurance proceeds. If Lessor does not accept Lessee’s offer so to purchase
the Leased Property within ninety (90) days, Lessee may withdraw its offer to
purchase the Leased Property and, if so withdrawn, Lessee may terminate the
Lease with respect to the Leased Property without further liability hereunder
and Lessor shall be entitled to retain all insurance proceeds.

42

                    (b)
Except as provided in Section 14.6, if during the Term the Leased Property is
partially destroyed by a risk covered by the insurance described in Article 13,
but the Hotel is not thereby rendered Unsuitable for its Primary Intended Use,
Lessee shall restore the Hotel to substantially the same condition as existed
immediately before the damage or destruction and otherwise in accordance with
the terms of the Lease. Such damage or destruction shall not terminate this
Lease; provided, however, that if Lessee cannot within a reasonable time obtain
all necessary government approvals, including building permits, licenses and
conditional use permits, after diligent efforts to do so, to perform all
required repair and restoration work and to operate the Hotel for its Primary
Intended Use in substantially the same manner as that existing immediately
prior to such damage or destruction and otherwise in accordance with the terms
of the Lease, Lessee may offer to purchase the Leased Property for a purchase
price equal to the Rejectable Offer Price of the Leased Property, determined
without regard to such damage or destruction if insurance proceeds are
available to restore the Hotel. If Lessee makes such offer and Lessor does not
accept the same, Lessee shall withdraw such offer, in which event this Lease
shall remain in full force and effect and Lessee shall immediately proceed to
restore the Hotel to substantially the same condition as existed immediately
before such damage or destruction and otherwise in accordance with the terms of
the Lease. If Lessee restores the Hotel, the insurance proceeds shall be paid
out by Lessor from time to time for the reasonable costs of such restoration
upon satisfaction of reasonable terms and conditions specified by Lessor, and
any excess proceeds remaining after such restoration shall be paid to Lessee.

                    (c)
If the cost of the repair or restoration exceeds the amount of proceeds
received by Lessor from the insurance it maintains as required under Article
13, Lessee shall be obligated to contribute any excess amounts needed to restore
the Hotel. Such difference shall be paid by Lessee to Lessor promptly after
Lessee receives Lessor’s written invoice therefor, to be held in trust in an
interest-bearing account, together with any other insurance proceeds, for
application to the cost of repair and restoration.

                    (d)
If Lessor accepts Lessee’s offer to purchase the Leased Property under this
Article, this Lease shall terminate as to the Leased Property upon payment of
the purchase price, and Lessor shall remit to Lessee all insurance proceeds
pertaining to the Leased Property being held in trust by Lessor.

          14.3.
Reconstruction in the Event of Damage or Destruction Not Covered by
Insurance. Except as provided in Section 14.6, if during the Term the Hotel
is totally or materially destroyed by a risk not covered by the insurance
described in Article 13, whether or not such damage or destruction renders the
Hotel Unsuitable for its Primary Intended Use, Lessee at its option shall
either, (a) at Lessee’s sole cost and expense, restore the Hotel to
substantially the same condition it was in immediately before such damage or
destruction and such damage or destruction shall not terminate this Lease, or
(b) offer to purchase the Leased Property for a purchase price equal to the
Rejectable Offer Price of the Leased Property without regard to such damage or
destruction. If such damage or destruction is not material, Lessee shall
restore the Hotel to substantially the same condition as existed immediately
before the damage or destruction and otherwise in accordance with the terms of
the Lease. If Lessor does not accept Lessee’s offer so to purchase the Leased
Property within ninety (90) days, Lessee may withdraw its offer to purchase the
Leased Property 

43

and, if so withdrawn, Lessee may terminate the Lease
with respect to the Leased Property without further liability hereunder.

          14.4.
Lessee’s Property. All insurance proceeds payable by reason of any loss
of or damage to any of Lessee’s Personal Property shall be paid to Lessee;
provided, however, no such payments shall diminish or reduce the insurance
payments otherwise payable to or for the benefit of Lessor hereunder.

          14.5.
Abatement of Rent. Any damage or destruction due to casualty
notwithstanding, this Lease shall remain in full force and effect and Lessee’s
obligation to make rental payments and to pay all other charges required by
this Lease shall remain unabated during the first three (3) months of any
period required for the applicable repair and restoration. Thereafter, Base
Rent shall be equitably abated.

          14.6.
Damage Near End of Term. Notwithstanding any provisions of Section 14.2
or 14.3 appearing to the contrary, if damage to or destruction of the Hotel
rendering it unsuitable for its Primary Intended Use occurs during the last
twenty-four (24) months of the Term, then Lessor or Lessee shall have the right
to terminate this Lease by giving Notice, respectively, to Lessee or Lessor
within thirty (30) days after the date of damage or destruction, whereupon all
accrued Rent shall be paid immediately, and this Lease shall automatically
terminate five (5) days after the date of such Notice.

          14.7.
Waiver. Lessee hereby waives any statutory rights of termination that
may arise by reason of any damage or destruction of the Hotel that Lessor is
obligated to restore or may restore under any of the provisions of this Lease.

ARTICLE
15

CONDEMNATION; AWARD ALLOCATION

          15.1.
Definitions.

                    (a)
“Award” means all compensation,
sums or anything of value awarded, paid or received on a total or partial
Condemnation.

                    (b)
“Condemnation” means a Taking
resulting from (1) the exercise of any governmental power, whether by legal
proceedings or otherwise, by a Condemnor, and (2) a voluntary sale or transfer
by Lessor to any Condemnor, either under threat of condemnation or while legal
proceedings for condemnation are pending.

                    (c)
“Condemnor” means any public or
quasi-public authority, or private corporation or individual, having the power
of Condemnation.

                    (d)
“Date of Taking” means the date
the Condemnor has the right to possession of the property being condemned.

44

          15.2.
Parties’ Rights and Obligations. If during the Term there is any
Condemnation of all or any part of the Leased Property or any interest in this
Lease, the rights and obligations of Lessor and Lessee shall be determined by
this Article 15.

          15.3.
Total Taking. If title to the fee of the whole of the Leased Property is
condemned by any Condemnor, this Lease shall cease and terminate as of the Date
of Taking by the Condemnor. If title to the fee of less than the whole of the
Leased Property is so taken or condemned, which nevertheless renders the Leased
Property Unsuitable or Uneconomic for its Primary Intended Use, Lessee and
Lessor shall each have the option, by Notice to the other, at any time prior to
the Date of Taking, to terminate this Lease as of the Date of Taking. Upon such
date, if such Notice has been given, this Lease shall thereupon cease and
terminate. All Base Rent, Percentage Rent and Additional Charges paid or
payable by Lessee hereunder shall be apportioned as of the Date of Taking, and
Lessee shall promptly pay Lessor such amounts.

          15.4.
Allocation of Award. The total Award made with respect to the Leased
Property or for loss of rent, or for Lessor’s loss of business beyond the Term,
shall be solely the property of and payable to Lessor. Any Award made for loss
of Lessee’s business during the remaining Term, if any, for the taking of
Lessee’s Personal Property, or for removal and relocation expenses of Lessee in
any such proceedings shall be the sole property of and payable to Lessee. In
any Condemnation proceedings Lessor and Lessee shall each seek its Award in
conformity herewith, at its respective expense; provided, however, Lessee shall
not initiate, prosecute or acquiesce in any proceedings that may result in a
diminution of any Award payable to Lessor.

          15.5.
Partial Taking. If title to less than the whole of the Leased Property
is condemned, and the Leased Property is not Unsuitable for its Primary
Intended Use, and not Uneconomic for its Primary Intended Use, or if Lessee or
Lessor is entitled but neither elects to terminate this Lease as provided in
Section 15.3, Lessee at its cost shall with all reasonable dispatch restore the
untaken portion of any Leased Improvements so that such Leased Improvements
constitute a complete architectural unit of the same general character and
condition (as nearly as may be possible under the circumstances) as the Leased
Improvements existing immediately prior to the Condemnation. Lessor shall
contribute to the cost of restoration that part of its Award specifically
allocated to such restoration, if any, together with severance and other
damages awarded for the taken Leased Improvements; provided, however, that the
amount of such contribution shall not exceed such cost. In the event of such a
partial Taking, this Lease shall not terminate, but the Base Rent shall be
abated in the manner and to the extent that is fair, just and equitable to both
Lessee and Lessor, taking into consideration, among other relevant factors, the
number of usable rooms, the amount of square footage, or the revenues affected
by such partial Taking. If Lessor and Lessee are unable to agree upon the
amount of such abatement within thirty (30) days after such partial Taking, the
matter may be submitted by either party to a court of competent jurisdiction
for resolution.

          15.6.
Temporary Taking. If the whole or any part of the Leased Property (other
than the fee) or of Lessee’s interest under this Lease is condemned by any
Condemnor for its temporary use or occupancy (which shall mean a period not to
exceed two years), this Lease shall not terminate by reason thereof, and Lessee
shall continue to pay, in the manner and at the terms herein specified, the
full amounts of Base Rent and Additional Charges. In addition, Lessee shall pay
Percentage Rent at a rate equal to the average Percentage Rent during the last
three (3) preceding Fiscal Years 

45

(or if three (3) Fiscal Years shall not have elapsed,
the average during the preceding Fiscal Years). Except only to the extent that
Lessee may be prevented from so doing pursuant to the terms of the order of the
Condemnor, Lessee shall continue to perform and observe all of the other terms,
covenants, conditions and obligations hereof on the part of Lessee to be
performed and observed, as though such Condemnation had not occurred. In the
event of any Condemnation as in this Section 15.6 described, the entire amount
of any Award made for such Condemnation allocable to the Term of this Lease,
whether paid by way of damages, rent or otherwise, shall be paid to Lessee.
Lessee covenants that upon the termination of any such period of temporary use
or occupancy it will, at its sole cost and expense (subject to Lessor’s
contribution as set forth below), restore the Leased Property as nearly as may be
reasonably possible to the condition in which the same was immediately prior to
such Condemnation, unless such period of temporary use or occupancy extends
beyond the expiration of the Term, in which case Lessee shall not be required
to make such restoration. If restoration is required hereunder, Lessor shall
contribute to the cost of such restoration that portion of its entire Award
that is specifically allocated to such restoration in the judgment or order of
the court, if any, and Lessee shall fund the balance of such costs in a manner
reasonably satisfactory to Lessor.

ARTICLE
16

DEFAULT BY LESSEE; LESSOR’S REMEDIES

          16.1.
Events of Default. If any one or more of the following events
(individually, an “Event of Default”) occurs:

                    (a)
if an Event of Default occurs under any other lease between Lessor or any
Affiliate of Lessor and Lessee or any Affiliate of Lessee; or

                    (b)
if Lessee fails to make payment of the Base Rent within five (5) days after the
same becomes due and payable; or

                    (c)
if Lessee fails to make payment of Percentage Rent when the same becomes due
and payable and such condition continues for a period of thirty (30) days after
the end of the applicable quarter; or

                    (d)
if Lessee fails to observe or perform any other term, covenant or condition of
this Lease and such failure is not cured by Lessee within a period of thirty
(30) days after receipt by Lessee of Notice thereof from Lessor, unless such
failure cannot with due diligence be cured within a period of thirty (30) days,
in which case it shall not be deemed an Event of Default if Lessee proceeds
promptly and with due diligence to cure the failure and diligently completes
the curing thereof provided, however, in no event shall such cure period extend
beyond ninety (90) days after such Notice; or

                    (e)
if Lessee shall file a petition in bankruptcy or reorganization for an
arrangement pursuant to any federal or state bankruptcy law or any similar
federal or state law, or shall be adjudicated a bankrupt or shall make an
assignment for the benefit of creditors or shall admit in writing its inability
to pay its debts generally as they become due, or if a petition or answer
proposing the adjudication of Lessee as a bankrupt or its reorganization
pursuant to any federal or 

46

state bankruptcy law or any similar federal or state
law shall be filed in any court and Lessee shall be adjudicated a bankrupt and
such adjudication shall not be vacated or set aside or stayed within sixty (60)
days after the entry of an order in respect thereof, or if a receiver of Lessee
or of the whole or substantially all of the assets of Lessee shall be appointed
in any proceeding brought by Lessee or if any such receiver, trustee or
liquidator shall be appointed in any proceeding brought against Lessee and
shall not be vacated or set aside or stayed within sixty (60) days after such
appointment; or

                    (f)
if Lessee is liquidated or dissolved, or begins proceedings toward such
liquidation or dissolution, or, in any manner, permits the sale or divestiture
of substantially all of its assets; or

                    (g)
if, except as expressly permitted herein, the estate or interest of Lessee in
the Leased Property or any part thereof is voluntarily or involuntarily
transferred, assigned, conveyed, levied upon or attached in any proceeding
(unless Lessee is contesting such lien or attachment in good faith in
accordance with Section 12.2 hereof) or there is a Change of Control of Lessee;
or

                    (h)
if, except as a result of damage, destruction or a partial or complete
Condemnation as contemplated by this Lease, Lessee voluntarily ceases
operations on the Leased Property for a period in excess of thirty (30) days;
or

                    (i)
if an event of default has been declared by the franchisor under the Franchise
Agreement with respect to the Hotel as a result of any action or failure to act
by Lessee or any Person with whom Lessee contracts for management services at
the Hotel, and such default is not cured by the earlier of (A) ten (10) days
following notice from Lessor or (B) such earlier date as is required for Lessee
to avoid termination of the Franchise Agreement by the franchisor; 

then, and in any such event, Lessor may exercise one
or more remedies available to it herein or at law or in equity, including but
not limited to its right to terminate this Lease by giving Lessee not less than
ten (10) days’ Notice of such termination. 

                    If
litigation is commenced with respect to any alleged default under this Lease,
the prevailing party in such litigation shall receive, in addition to its
damages incurred, such sum as the court shall determine as its reasonable
attorneys’ fees, and all costs and expenses incurred in connection therewith.

                    No
Event of Default (other than a failure to make a payment of money) shall be
deemed to exist under clause (d) during any time the curing thereof is
prevented by an Unavoidable Delay, provided that upon the cessation of such
Unavoidable Delay, Lessee remedies such default or Event of Default without
further delay.

          16.2.
Surrender. If an Event of Default occurs (and the event giving rise to
such Event of Default has not been cured within the curative period relating
thereto as set forth in Section 16.1) and is continuing, whether or not this
Lease has been terminated pursuant to Section 16.1, Lessee shall, if requested
by Lessor so to do, immediately surrender to Lessor the Leased Property
including, without limitation, any and all books, records, files, licenses,
permits and keys relating 

47

thereto, and quit the same and Lessor may enter upon
and repossess the Leased Property by summary proceedings, ejectment or
otherwise, and may remove Lessee and all other Persons and any and all personal
property from the Leased Property, subject to rights of any hotel guests and to
any requirement of law. Lessee hereby waives any and all requirements of
applicable laws for service of notice to re-enter the Leased Property. Lessor
shall be under no obligation to, but may if it so chooses, relet the Leased
Property or otherwise mitigate Lessor’s damages.

          16.3.
Damages. Neither (a) the termination of this Lease, (b) the repossession
of the Leased Property, (c) the failure of Lessor to relet the Leased Property,
nor (d) the reletting of all or any portion thereof, shall relieve Lessee of
its liability and obligations hereunder, all of which shall survive any such termination,
repossession or reletting. In the event of any such termination, Lessee shall
forthwith pay to Lessor all Rent due and payable with respect to the Leased
Property to and including the date of such termination.

                    Lessee
shall forthwith pay to Lessor, at Lessor’s option, as and for liquidated and
agreed current damages for Lessee’s default, either:

	
 

	
 

	
 

	
          (i)
Without termination of Lessee’s right to possession of the Leased Property,
each installment of Rent (including Percentage Rent as determined below) and
other sums payable by Lessee to Lessor under the Lease as the same becomes
due and payable, which Rent and other sums shall bear interest at the Overdue
Rate, and Lessor may enforce, by action or otherwise, any other term or
covenant of this Lease; or

	
 

	
 

	
 

	
          (ii)
the sum of:

	
 

	
 

	
 

	
                    (A)
the unpaid Rent which had been earned at the time of termination,
repossession or reletting, and

	
 

	
 

	
 

	
                    (B)
the worth at the time of termination, repossession or reletting of the amount
by which the unpaid Rent for the balance of the Term after the time of
termination, repossession or reletting, exceeds the amount of such rental
loss that Lessee proves could be reasonably avoided and as reduced for rentals
received after the time of termination, repossession or reletting, if and to
the extent required by applicable law, and

	
 

	
 

	
 

	
                    (C)
any other amount necessary to compensate Lessor for all the detriment
proximately caused by Lessee’s failure to perform its obligations under this
Lease or which in the ordinary course of things, would be likely to result
therefrom.

                    The
worth at the time of termination, repossession or reletting of the amount
referred to in subparagraph (B) is computed by discounting such amount at the
discount rate of the Federal Reserve Bank of New York at the time of award plus
one percent (1%). Percentage Rent for the purposes of this Section 16.3 shall
be a sum equal to (i) the average of the annual amounts of the Percentage Rent
for the three (3) Fiscal Years immediately preceding the Fiscal Year in 

48

which the termination, re-entry or repossession takes
place, or (ii) if three (3) Fiscal Years shall not have elapsed, the average of
the Percentage Rent during the preceding Fiscal Years during which the Lease
was in effect, or (iii) if one Fiscal Year has not elapsed, the amount derived
by annualizing the Percentage Rent from the effective date of this Lease.

          16.4.
Waiver. If this Lease is terminated pursuant to Section 16.1, Lessee
waives, to the extent permitted by applicable law, (a) any right to a trial by
jury in the event of summary proceedings to enforce the remedies set forth in
this Article 16, and (b) the benefit of any laws now or hereafter in force
exempting property from liability for rent or for debt and Lessor waives any
right to “pierce the corporate veil” of Lessee other than to the extent funds
shall have been fraudulently paid by Lessee to any Affiliate of Lessee following
a default resulting in an Event of Default.

          16.5.
Application of Funds. Any payments received by Lessor under any of the
provisions of this Lease during the existence or continuance of any Event of
Default shall be applied to Lessee’s obligations in the order that Lessor may
determine or as may be prescribed by the laws of the State.

          16.6.
Lessor’s Right to Cure Lessee’s Default. If Lessee fails to make any
payment or to perform any act required to be made or performed under this Lease,
including, without limitation, Lessee’s failure to comply with the terms of any
Franchise Agreement, and fails to cure the same within the relevant time
periods provided in Section 16.1, Lessor, without waiving or releasing any
obligation of Lessee, and without waiving or releasing any obligation or
default, may (but shall be under no obligation to) at any time thereafter make
such payment or perform such act for the account and at the expense of Lessee,
and may, to the extent permitted by law, enter upon the Leased Property for
such purpose and, subject to Section 16.4, take all such action thereon as, in
Lessor’s opinion, may be necessary or appropriate therefor. No such entry shall
be deemed an eviction of Lessee. All sums so paid by Lessor and all costs and
expenses (including, without limitation, reasonable attorneys’ fees and
expenses, in each case to the extent permitted by law) so incurred, together
with a late charge thereon (to the extent permitted by law) at the Overdue Rate
from the date on which such sums or expenses are paid or incurred by Lessors,
shall be paid by Lessee to Lessor on demand. The obligations of Lessee and
rights of Lessor contained in this Article shall survive the expiration or
earlier termination of this Lease.

ARTICLE
17

DEFAULT BY LESSOR; LESSEE’S REMEDIES

          17.1.
Breach by Lessor. It shall be a breach of this Lease if Lessor fails to
observe or perform any term, covenant or condition of this Lease on its part to
be performed and such failure continues for a period of thirty (30) days after
Notice thereof from Lessee, unless such failure cannot with due diligence be
cured within a period of thirty (30) days, in which case such failure shall not
be deemed to continue if Lessor, within such thirty (30) day period, proceeds
promptly and with due diligence to cure the failure and diligently completes
the curing thereof; provided, however, that such default shall be cured by
Lessor in any event prior to the date on which the default becomes an event of
default under the terms of the Franchise Agreement for the Hotel. The time
within which Lessor shall be obligated to cure any such failure also shall be
subject to 

49

extension of time due to the occurrence of any
Unavoidable Delay. If Lessor fails to cure any such breach within the grace
period described above, Lessee, without waiving or releasing any obligations
hereunder, and in addition to all other remedies available to Lessee at law or
in equity, may purchase the Leased Property from Lessor for a purchase price equal
to the then Fair Market Value. If Lessee elects to purchase the Leased Property
it shall deliver a Notice thereof to Lessor specifying a settlement date to
occur not less than ninety (90) days subsequent to the date of such Notice on
which it shall purchase the Leased Property, and the same shall be thereupon
conveyed in accordance with the provisions of Section 17.3; provided, however,
that Lessor shall pay the cost of Lessee’s title insurance and all closing
costs associated with such purchase by Lessee following default by Lessor.

          17.2.
Lessee’s Right to Cure. Subject to the provisions of Section 17.1, if
Lessor breaches any covenant to be performed by it under this Lease, Lessee,
after Notice to and demand upon Lessor, without waiving or releasing any
obligation hereunder, and in addition to all other remedies available to
Lessee, may (but shall be under no obligation at any time thereafter to) make
such payment or perform such act for the account and at the expense of Lessor.
All sums so paid by Lessee and all costs and expenses (including, without
limitation, reasonable attorneys’ fees) so incurred, together with interest
thereon at the Overdue Rate from the date on which such sums or expenses are
paid or incurred by Lessee, shall be paid by Lessor to Lessee on demand or,
following entry of a final, nonappealable judgment against Lessor for such
sums, may be offset by Lessee against the Base Rent and/or Percentage Rent
payments next accruing or coming due. The rights of Lessee hereunder to cure
and to secure payment from Lessor in accordance with this Section 17.2 shall
survive the termination of this Lease with respect to the Leased Property.

          17.3.
Provisions Relating to Purchase of the Leased Property by Lessee. If
Lessee purchases the Leased Property from Lessor pursuant to any of the terms
of this Lease, Lessor shall, upon receipt from Lessee of the applicable
purchase price, together with full payment of any unpaid Rent due and payable
with respect to any period ending on or before the date of the purchase,
deliver to Lessee an appropriate limited or special warranty deed or other
conveyance conveying the entire interest of Lessor in and to the Leased
Property to Lessee free and clear of all encumbrances other than (a) those that
Lessee has agreed hereunder to pay or discharge, (b) those mortgage liens, if
any, that Lessee has agreed in writing to accept and to take title subject to,
(c) those liens and encumbrances subject to which the Leased Property was
conveyed to Lessor, to the extent not released in connection with the
transactions contemplated by this Lease, (d) encumbrances, easements, licenses
or rights of way required to be imposed on the Leased Property under Section
7.3, and (e) any other encumbrances permitted to be imposed on the Leased
Property under the provisions of Article 22 that are assumable at no cost to
Lessee or to which Lessee may take subject without cost to Lessee. The
difference between the applicable purchase price and the total of the
encumbrances assumed or taken subject to shall be paid in cash to Lessor or as
Lessor may direct, in federal or other immediately available funds, except as
otherwise mutually agreed by Lessor and Lessee. All expenses of such
conveyance, including, without limitation, the cost of title examination or
title insurance, if desired by Lessee, Lessee’s attorneys’ fees incurred in
connection with such conveyance and release, and one-half of any transfer taxes
and recording fees, shall be paid by Lessee. Lessor shall pay one-half of any
transfer taxes and recording fees and its attorney’s fees.

50

ARTICLE
18

INDEMNIFICATION

          18.1.
Indemnification.

                    (a)
Notwithstanding the existence of any insurance, and without regard to the
policy limits of any such insurance or self-insurance, but subject to Section
13.3 and Section 8.3, Lessee will protect, indemnify, hold harmless and defend
Lessor from and against all liabilities, losses, obligations, claims, damages,
penalties, causes of action, costs and expenses (including, without limitation,
reasonable attorneys’ fees and expenses), to the extent permitted by law,
imposed upon or incurred by or asserted against Lessor Indemnified Parties by
reason of: (a) any accident, injury to or death of persons or loss of or damage
to property occurring on or about the Leased Property or adjoining sidewalks,
including without limitation any claims under liquor liability, “dram shop” or
similar laws, (b) any use, misuse, non-use, condition, management, maintenance
or repair by Lessee or any of its agents, employees or invitees of the Leased
Property or Lessee’s Personal Property during the Term or any litigation,
proceeding or claim by governmental entities or other third parties to which a
Lessor Indemnified Party is made a party or participant related to such use,
misuse, non-use, condition, management, maintenance, or repair thereof by
Lessee or any of its agents, employees or invitees, including any failure of
lessee or any of its agents, employees or invitees to perform any obligations
under this Lease or imposed by applicable law (other than arising out of
Condemnation proceedings), (c) any Impositions that are the obligations of
Lessee pursuant to the applicable provisions of this Lease, (d) any failure on
the part of Lessee to perform or comply with any of the terms of this Lease,
and (e) the non-performance of any of the terms and provisions of any and all
existing and future subleases of the Leased Property to be performed by the
landlord thereunder.

                    (b)
Notwithstanding the existence of any insurance, and without regard to the
policy limits of any such insurance or self-insurance, but subject to Section
13.3 and Section 8.3, Lessor shall indemnify, save harmless and defend Lessee
Indemnified Parties from and against all liabilities, obligations, claims,
damages, penalties, causes of action, costs and expenses imposed upon or
incurred by or asserted against Lessee Indemnified Parties as a result of (a)
the gross negligence or willful misconduct of Lessor arising in connection with
this Lease or (b) any failure on the part of Lessor to perform or comply with
any of the terms of this Lease. Any amounts that become payable by an
Indemnifying Party under this Section shall be paid within ten (10) days after
liability therefor on the part of the Indemnifying Party is determined by
litigation or otherwise, and if not timely paid, shall bear a late charge (to
the extent permitted by law) at the Overdue Rate from the date of such
determination to the date of payment. An Indemnifying Party, at its expense,
shall contest, resist and defend any such claim, action or proceeding asserted
or instituted against the Indemnified Party. The Indemnified Party, at its
expense, shall be entitled to participate in any such claim, action, or
proceeding, and the Indemnifying Party may not compromise or otherwise dispose
of the same without the consent of the Indemnified Party, which may not be
unreasonably withheld or delayed. Nothing herein shall be construed as
indemnifying a Lessor Indemnified Party against its own (or Lessor’s) grossly
negligent acts or omissions or willful misconduct.

51

                    (c)
Lessee’s or Lessor’s liability for a breach of the provisions of this Article
shall survive any termination of this Lease.

ARTICLE
19

REIT REQUIREMENTS AND RESTRICTIONS

          19.1.
Personal Property Limitation. Anything contained in this Lease to the
contrary notwithstanding, the average of the adjusted tax bases of the items of
personal property that are leased to Lessee under this Lease at the beginning
and at the end of any Fiscal Year shall not exceed fifteen percent (15%) of the
average of the aggregate adjusted tax bases of the Leased Property at the
beginning and at the end of such Fiscal Year. This Section 19.1 is intended to
ensure that the Rent qualifies as “rents from real property,” within the
meaning of Section 856(d) of the Code, or any similar or successor provisions
thereto, and shall be interpreted in a manner consistent with such intent.

          19.2.
Sublease Rent Limitation. Anything contained in this Lease to the
contrary notwithstanding, Lessee shall not sublet the Leased Property on any
basis such that the rental to be paid by the sublessee thereunder would be
based, in whole or in part, on either (a) the income or profits derived by the
business activities of the sublessee, or (b) any other formula such that any
portion of the Rent would fail to qualify as “rents from real property” within
the meaning of Section 856(d) of the Code, or any similar or successor
provision thereto.

          19.3.
Sublease Tenant Limitation. Anything contained in this Lease to the
contrary notwithstanding, Lessee shall not sublease the Leased Property to any
Person in which Lessor owns, directly or indirectly, a ten percent (10%) or
more interest, within the meaning of Section 856(d)(2)(B) of the Code, or any
similar or successor provisions thereto.

          19.4.
Lessee Ownership Limitations. 

                    (a)
Anything contained in this Lease to the contrary notwithstanding, neither
Lessee nor an Affiliate of Lessee shall acquire, directly or indirectly, a ten
percent (10%) or more interest in Lessor within the meaning of Section
856(d)(2)(B) of the Code, or any similar or successor provision thereto.

                    (b)
Lessee shall not own, operate, manage or have any interest in any hotel or
motel property in which Lessor or an Affiliate of Lessor does not have an
interest, pursuant to this Lease or another lease, agreement or arrangement
with Lessor or an Affiliate of Lessor. Lessor agrees to notify Lessee promptly
of the location of any hotel or motel property in which Lessor or an Affiliate
of Lessor has an interest.

          19.5.
Lessee Officer and Employee Limitation. If a Person serves as both (a) a
director of Lessee (or any Person who furnishes or renders services to the
tenants of the Leased Property, or manages or operates the Leased Property) and
(b) an officer (or employee) of the Lessor that Person shall not receive any
compensation for serving as a director of Lessee (or any Person who furnishes
or renders services to the tenants of the Leased Property, or manages or
operates the 

52

Leased Property). Furthermore, if a Person serves as
both (a) a director of the Lessor and (b) an officer (or employee) of Lessee
(or any Person who furnishes or renders services to the tenants of the Leased
Property, or manages or operates the Leased Property), that Person shall not
receive any compensation for serving as a director of the Lessor. No Person, other
than Justin G. Knight, shall serve as an officer (or employee) of both Lessor
and Lessee.

          19.6.
Payments to Affiliates of Lessee. During the Term, Lessee shall not pay,
or become obligated to pay, any fees to any Affiliate of Lessee in connection
with the Hotel, other than fees that are subordinated to the payments that are
required to be made to Lessor pursuant to this Lease.

ARTICLE
20

SUBLETTING AND ASSIGNMENT

          20.1.
Subletting and Assignment. Subject to the provisions of Article 19 and
Section 20.2 and any other express conditions or limitations set forth herein,
Lessee may, but only with the consent of Lessor (which shall not be
unreasonably withheld or delayed), (a) assign this Lease or sublet all or any
part of the Leased Property to an Affiliate of Lessee, or (b) sublet any retail
or restaurant portion of the Leased Improvements in the normal course of the
Primary Intended Use; provided that any subletting to any party other than an
Affiliate of Lessee shall not individually as to any one such subletting, or in
the aggregate, materially diminish the actual or potential Percentage Rent
payable under this Lease. In the case of a subletting, the sublessee shall
comply with the provisions of Section 20.2, and in the case of an assignment,
the assignee shall assume in writing and agree to keep and perform all of the
terms of this Lease on the part of Lessee to be kept and performed and shall
be, and become, jointly and severally liable with Lessee for the performance
thereof. Notwithstanding the above, Lessee may assign the Lease to an Affiliate
without the consent of Lessor; provided that any such assignee assumes in
writing and agrees to keep and perform all of the terms of the Lease on the
part of Lessee to be kept and performed and shall be and become jointly and
severally liable with Lessee for the performance thereof. In case of either an
assignment or subletting made during the Term, Lessee shall remain primarily
liable, as principal rather than as surety, for the prompt payment of the Rent
and for the performance and observance of all of the covenants and conditions
to be performed by Lessee hereunder. An original counterpart of each such
sublease and assignment and assumption, duly executed by Lessee and such
sublessee or assignee, as the case may be, in form and substance satisfactory
to Lessor, shall be delivered promptly to Lessor.

          20.2.
Attornment. Lessee shall insert in each sublease permitted under Section
20.1 provisions to the effect that (a) such sublease is subject and subordinate
to all of the terms and provisions of this Lease and to the rights of Lessor
hereunder, (b) if this Lease terminates before the expiration of such sublease,
the sublessee thereunder will, at Lessor’s option, attorn to Lessor and waive
any right the sublessee may have to terminate the sublease or to surrender
possession thereunder as a result of the termination of this Lease, and (c) if
the sublessee receives a Notice from Lessor or Lessor’s assignees, if any,
stating that an uncured Event of Default exists under this Lease, the sublessee
shall thereafter be obligated to pay all rentals accruing under said sublease
directly to the party giving such Notice, or as such party may direct. All
rentals received from the sublessee by Lessor or Lessor’s assignees, if any, as
the case may be, shall be credited against the amounts owing by Lessee under
this Lease.

53

          20.3.
Conveyance by Lessor. Lessor may assign this Lease to any purchaser of
the Leased Property. If Lessor or any successor owner of the Leased Property
conveys the Leased Property in accordance with the terms hereof other than as
security for a debt, and the grantee or transferee of the Leased Property
expressly assumes all obligations of Lessor hereunder arising or accruing from
and after the date of such conveyance or transfer, Lessor or such successor
owner, as the case may be, shall thereupon be released from all future
liabilities and obligations of Lessor under this Lease arising or accruing from
and after the date of such conveyance or other transfer as to the Leased
Property and all such future liabilities and obligations shall thereupon be
binding upon the new owner.

ARTICLE
21

QUIET ENJOYMENT; RISK OF LOSS

          21.1.
Quiet Enjoyment. So long as Lessee pays all Rent as the same becomes due
and complies with all of the terms of this Lease and performs its obligations
hereunder, in each case within the applicable grace periods, if any, Lessee
shall peaceably and quietly have, hold and enjoy the Leased Property for the
Term hereof, free of any claim or other action by Lessor or anyone claiming by,
through or under Lessor, but subject to all liens and encumbrances subject to
which the Leased Property was conveyed to Lessor, to the extent not released in
connection with the transactions contemplated by this Lease, or hereafter
consented to by Lessee or provided for herein. Notwithstanding the foregoing,
Lessee shall have the right by separate and independent action to pursue any
claim it may have against Lessor as a result of a breach by Lessor of the
covenant of quiet enjoyment contained in this Section.

          21.2.
Risk of Loss. During the Term, the risk of loss or of decrease in the
enjoyment and beneficial use of the Leased Property in consequence of the
damage or destruction thereof by fire, the elements, casualties, thefts, riots,
wars or otherwise, or in consequence of foreclosures, attachments, levies or
executions (other than those caused by Lessor and those claiming from, through
or under Lessor) is assumed by Lessee, and, in the absence of gross negligence,
willful misconduct or breach of this Lease by Lessor pursuant to Section 17.1,
Lessor shall in no event be answerable or accountable therefor, nor shall any
of the events mentioned in this Section entitle Lessee to any abatement of Rent
except as specifically provided in this Lease.

ARTICLE
22

LESSOR MORTGAGES; SUBORDINATION OF LEASE

          22.1.
Lessor May Grant Liens. Without the consent of Lessee, Lessor may,
subject to the terms and conditions set forth below in this Section 22.1, from
time to time, directly or indirectly, create or otherwise cause to exist any
lien, encumbrance or title retention agreement (“Encumbrance”) upon the Leased
Property, or any portion thereof or interest therein, whether to secure any
borrowing or other means of financing or refinancing. Upon the request of
Lessor, Lessee shall subordinate this Lease to the lien of a new mortgage on
the Leased Property, on the condition that the proposed mortgagee executes a
non-disturbance agreement recognizing this Lease in accordance with the
provisions of Section 22.2, and agreeing, for itself and its successors and
assigns, to comply with the provisions of this Article 22.

54

          22.2.
Subordination of Lease. This Lease and Lessee’s interest hereunder shall
at all times be subject and subordinate to the lien and security title of any
deeds to secure debt, deeds of trust, mortgages, or other Encumbrances
heretofore or hereafter granted by Lessor or which otherwise encumber or affect
the Leased Property and to any and all advances to be made thereunder and to
all renewals, modifications, consolidations, replacements, substitutions, and
extensions thereof (all of which are herein called the “Mortgage”); provided,
however, that with respect to any Mortgage hereafter granted, such
subordination is conditioned upon delivery to Lessee of a non-disturbance
agreement which provides that Lessee shall not be disturbed in its possession
of the Leased Property hereunder following a foreclosure of such Mortgage (or
delivery of a deed-in-lieu-of-foreclosure) and that the holder of such Mortgage
or the purchaser at a foreclosure sale (or grantee under such
deed-in-lieu-of-foreclosure) shall perform all obligations of Lessor under this
Lease. In confirmation of such subordination, however, Lessee shall, at
Lessor’s request, promptly execute, acknowledge and deliver any instrument
which may be required to evidence subordination to any Mortgage and to the
holder thereof. In the event of Lessee’s failure to deliver such subordination
and if the Mortgage does not change any term of the Lease, Lessor may, in
addition to any other remedies for breach of covenant hereunder, execute,
acknowledge, and deliver the instrument as the agent or attorney-in-fact of
Lessee, and Lessee hereby irrevocably constitutes Lessor its attorney-in-fact
for such purpose, Lessee acknowledging that the appointment is coupled with an
interest and is irrevocable.

ARTICLE
23

ESTOPPEL CERTIFICATES; FINANCIAL STATEMENTS; INSPECTION RIGHTS

          23.1.
Estoppel Certificates; Financial Statements.

                    (a)
At any time and from time to time upon not less than ten (10) days Notice by
Lessor, Lessee will furnish to Lessor an Officer’s Certificate certifying that
this Lease is unmodified and in full force and effect (or that this Lease is in
full force and effect as modified and setting forth the modifications), the
date to which the Rent has been paid, whether to the knowledge of Lessee there
is any existing default or Event of Default exists thereunder by Lessor or
Lessee, and such other information as may be reasonably requested by Lessor.
Any such certificate furnished pursuant to this Section may be relied upon by
Lessor, any lender and any prospective purchaser of the Leased Property.

                    (b)
Lessee will furnish the following statements to Lessor:

	
 

	
 

	
 

	
          (i)
with reasonable promptness, such information respecting the financial
condition and affairs of Lessee including audited financial statements
prepared by the same certified independent accounting firm that prepares the
returns for Lessor or such other accounting firm as may be approved by
Lessor, as Lessor may request from time to time; and

	
 

	
 

	
 

	
          (ii)
the most recent Consolidated Financials of Lessee within forty-five (45) days
after each quarter of any Fiscal Year (or, in the case of the final quarter
in 

55

	
 

	
 

	
 

	
any Fiscal Year, the most recent audited
Consolidated Financials of Lessee within ninety (90) days); and

	
 

	
 

	
 

	
          (iii)
on or about the 20th day of each month, a detailed profit and loss statement
for the Leased Property for the preceding month, a balance sheet for the
Leased Property as of the end of the preceding month, and a detailed
accounting of revenues for the Leased Property for the preceding month, each
in form acceptable to Lessor.

Lessee will permit the inclusion of such statements in
any filings required to be made by Lessor under the Securities Act of 1933 and
the Securities Exchange Act of 1934.

                    (c)
At any time and from time to time upon not less than ten (10) days Notice by
Lessee, Lessor will furnish to Lessee or to any Person designated by Lessee an
estoppel certificate certifying that this Lease is unmodified and in full force
and effect (or that this Lease is in full force and effect as modified and
setting forth the modifications), the date to which Rent has been paid, whether
to the knowledge of Lessor there is any existing default or Event of Default on
Lessee’s part hereunder, and such other information as may be reasonably
requested by Lessee.

                    (d)
Lessee shall at all times be Solvent. Furthermore, as of the date of this
Agreement, Lessee agrees to establish and maintain, in a form satisfactory to
Lessor, a funding commitment in an amount equal to $2,000,000 upon which Lessee
may draw upon to pay to Lessor Base Rent, Percentage Rent and Additional
Charges. Repayment of the funding commitment shall be subordinated to all
payments of Base Rent, Percentage Rent and additional charges under all Leases
between Lessor and Lessee.

          23.2.
Lessor’s Right to Inspect. Lessee shall permit Lessor and its authorized
representatives as frequently as reasonably requested by Lessor to inspect the
Leased Property and Lessee’s accounts and records pertaining thereto and make
copies thereof, during usual business hours upon reasonable advance Notice,
subject only to any business confidentiality requirements reasonably requested
by Lessee.

ARTICLE
24
 APPRAISERS

          24.1.
Appraisers. If it becomes necessary to determine the Fair Market Value
or Fair Market Rental of the Leased Property for any purpose of this Lease, the
party required or permitted to give Notice of such required determination shall
include in the Notice the name of a Person selected to act as appraiser on its
behalf. Within ten (10) days after Notice, Lessor (or Lessee, as the case may
be) shall by Notice to Lessee (or Lessor, as the case may be) appoint a second
Person as appraiser on its behalf. The appraisers thus appointed, each of whom
must be a member of the American Institute of Real Estate Appraisers (or any
successor organization thereto) with at least five (5) years’ experience in the
State appraising property similar to the Leased Property, shall, within
forty-five (45) days after the date of the Notice appointing the first
appraiser, proceed to appraise the Leased Property to determine the Fair Market
Value or Fair Market Rental thereof as of the relevant date (giving effect to
the impact, if any, of inflation from the date of their decision to 

56

the relevant date); provided, however, that if only
one appraiser shall have been so appointed, then the determination of such
appraiser shall be final and binding upon the parties. To the extent consistent
with sound appraisal practice as then existing at the time of any such
appraisal, such appraisal shall be made on a basis consistent with the basis on
which the Leased Property was appraised for purposes of determining its Fair
Market Value at the time the Leased Property was acquired by Lessor. If two (2)
appraisers are appointed and if the difference between the amounts so
determined does not exceed five percent (5%) of the lesser of such amounts,
then the Fair Market Value or Fair Market Rental shall be an amount equal to
fifty percent (50%) of the sum of the amounts so determined. If the difference
between the amounts so determined exceeds five percent (5%) of the lesser of
such amounts, then such two appraisers shall have twenty (20) days to appoint a
third appraiser. If no such appraiser shall have been appointed within such
twenty (20) days or within ninety (90) days of the original request for a
determination of Fair Market Value or Fair Market Rental, whichever is earlier,
either Lessor or Lessee may apply to any court having jurisdiction to have such
appointment made by such court. Any appraiser appointed by the original
appraisers or by such court shall be instructed to determine the Fair Market
Value or Fair Market Rental within forty-five (45) days after appointment of
such appraiser. The determination of the appraiser which differs most in the
terms of dollar amount from the determinations of the other two appraisers
shall be excluded, and fifty percent (50%) of the sum of the remaining two
determinations shall be final and binding upon Lessor and Lessee as the Fair
Market Value or Fair Market Rental of the Leased Property, as the case may be.
This provision for determining by appraisal shall be specifically enforceable
to the extent such remedy is available under applicable law, and any
determination hereunder shall be final and binding upon the parties except as
otherwise provided by applicable law. Lessor and Lessee shall each pay the fees
and expenses of the appraiser appointed by it and each shall pay one-half of
the fees and expenses of the third appraiser and one-half of all other costs
and expenses incurred in connection with each appraisal.

ARTICLE
25
 ARBITRATION AND DISPUTE RESOLUTION
PROCEDURES

          25.1.
Arbitration. Except as set forth in Section 25.2, in each case specified
in this Lease in which it shall become necessary to resort to arbitration, such
arbitration shall be determined as provided in this Section 25.1. The party
desiring such arbitration shall give Notice to that effect to the other party,
and an arbitrator shall be selected by mutual agreement of the parties, or if
they cannot agree within thirty (30) days of such notice, by appointment made
by the American Arbitration Association (“AAA”) from among the members of its
panels who are qualified and who have experience in resolving matters of a
nature similar to the matter to be resolved by arbitration.

          25.2.
Alternative Arbitration. In each case specified in this Lease for a
matter to be submitted to arbitration pursuant to the provisions of this
Section 25.2, Lessor and Lessee will agree upon a nationally recognized
accounting firm with a hospitality division of which neither party nor their
Affiliates of Lessor is a significant client to serve as arbitrator of such
dispute within fifteen (15) days after written demand for arbitration is
received or sent by either party. In the event the parties fail to make such
designation within such fifteen (15) day period, Lessor shall be entitled to
designate any nationally recognized accounting firm with a hospitality division
of which Lessor or an Affiliate of Lessor is not a significant client to serve
as arbitrator of such dispute within fifteen (15) days after the parties fail
to timely make such designation. In the event Lessor 

57

fails to make such designation within such fifteen
(15) day period, Lessee shall be entitled to designate any nationally
recognized accounting firm with hospitality division of which Lessee or an
Affiliate of Lessee is not a significant client to serve as arbitrator of such
dispute within fifteen (15) days after the parties fail to timely make such
designation. In the event no nationally recognized accounting firm satisfying
such qualifications is available and willing to serve as arbitrator, the
arbitrator shall instead be administered as set forth in Section 25.1.

          25.3.
Arbitration Procedure. In any arbitration commenced pursuant to Sections
25.1 or 25.2, a single arbitrator shall be designated and shall resolve the
dispute. The arbitrator’s decision shall be binding on all parties, shall not
be subject to further review or appeal except as otherwise allowed by
applicable law and may be filed in and enforced by a court of competent
jurisdiction. Upon the failure of either party (the “non-complying party”) to
comply with his decision, the arbitrator shall be empowered, at the request of
the other party, to order such compliance by the non-complying party and to
supervise or arrange for the supervision of the non-complying party’s
obligation to comply with the arbitrator’s decision, all at the expense of the
non-complying party. To the maximum extent practicable, the arbitrator and the
parties, and the AAA if applicable, shall take any action necessary to insure
that the arbitration shall be concluded within ninety (90) days of the filing
of such dispute. The fees and expenses of the arbitrator shall be shared
equally by Lessor and Lessee except as otherwise specified above in this
Section 25.3. Unless otherwise agreed in writing by the parties or required by
the arbitrator or AAA, if applicable, arbitration proceedings hereunder shall
be conducted in the State. Notwithstanding formal rules of evidence, each party
may submit such evidence as each party deems appropriate to support its
position and the arbitrator shall have access to and right to examine all books
and records of Lessee and Lessor regarding the Hotel during the arbitration. 

ARTICLE
26

NOTICES

          26.1.
Notices. All notices, demands, requests, consents approvals and other
communications (“Notice” or “Notices”) hereunder shall be in writing and
hand-delivered, sent by FedEx or other nationally recognized overnight courier
service, or mailed (by registered or certified mail, return receipt requested
and postage prepaid), if to Lessor at 814 East Main Street, Richmond, Virginia
23219, Attn: Krissy Gathright and if to Lessee at 814 East Main Street,
Richmond, Virginia 23219, Attn: Krissy Gathright or to such other address or
addresses as either party may hereafter designate. Personally delivered Notice
shall be effective upon receipt, and Notice given by overnight courier service
or by mail shall be complete at the time of deposit with the courier service or
in the U.S. Mail system, respectively, but any prescribed period of Notice and
any right or duty to do any act or make any response within any prescribed
period or on a date certain after the service of such Notice given by overnight
courier service shall be extended one (1) day and by mail shall be extended five
(5) days.

ARTICLE
27

MISCELLANEOUS

          27.1.
No Waiver. No failure by Lessor or Lessee to insist upon the strict
performance of any term hereof or to exercise any right, power or remedy
consequent upon a breach thereof, and 

58

no acceptance of full or partial payment of Rent
during the continuance of any such breach, shall constitute a waiver of any
such breach or of any such term. To the extent permitted by law, no waiver of
any breach shall affect or alter this Lease, which shall continue in full force
and effect with respect to any other then existing or subsequent breach.

          27.2.
Remedies Cumulative. To the extent permitted by law and unless otherwise
provided herein to the contrary, each legal, equitable or contractual right,
power and remedy of Lessor or Lessee now or hereafter provided either in this
Lease or by statute or otherwise shall be cumulative and concurrent and shall
be in addition to every other right, power and remedy and the exercise or
beginning of the exercise by Lessor or Lessee of any one or more of such
rights, powers and remedies shall not preclude the simultaneous or subsequent
exercise by Lessor or Lessee of any or all of such other rights, powers and
remedies.

          27.3.
Waiver of Trial by Jury. LESSOR AND LESSEE EACH WAIVE, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO A TRIAL BY JURY IN THE EVENT
OF A PROCEEDING WITH RESPECT TO THIS LEASE, INCLUDING, WITHOUT LIMITATION,
SUMMARY PROCEEDINGS TO ENFORCE THE REMEDIES SET FORTH IN ARTICLE 16.

          27.4.
Acceptance of Surrender. No surrender to Lessor of this Lease or of the
Leased Property or any part thereof, or of any interest therein, shall be valid
or effective unless agreed to and accepted in writing by Lessor and no act by
Lessor or any representative or agent of Lessor, other than such a written
acceptance by Lessor, shall constitute an acceptance of any such surrender.

          27.5.
No Merger of Title. There shall be no merger of this Lease or of the
leasehold estate created hereby by reason of the fact that the same Person may
acquire, own or hold, directly or indirectly: (a) this Lease or the leasehold
estate created hereby or any interest in this Lease or such leasehold estate
and (b) the fee estate in the Leased Property.

          27.6.
Waiver of Presentment, Etc. Lessee waives all presentments, demands for
payment and for performance, notices of nonperformance, protests, notices of
protest, notices of dishonor, and notices of acceptance and waives all notices
of the existence, creation, or incurring of new or additional obligations,
except as expressly granted herein.

          27.7.
Action for Damages. Except as otherwise expressly provided herein, in
any suit or other claim brought by either party seeking damages against the other
party for breach of its obligations under this Lease, the party against whom
such claim is made shall be liable to the other party only for actual damages
and not for consequential, punitive or exemplary damages.

          27.8.
Lease Assumption in Bankruptcy Proceeding. If an Event of Default occurs
and Lessee has filed or has had filed against it a petition in bankruptcy or
for reorganization or other relief pursuant to the federal bankruptcy code,
Lessee shall promptly move the court presiding over the proceeding to assume
this Lease pursuant to 11 U.S.C. §365, without seeking an extension of the time
to file said motion. 

59

          27.9.
Enforceability. Anything contained in this Lease to the contrary
notwithstanding, all claims against, and liabilities of, Lessee or Lessor
arising prior to any date of termination of this Lease shall survive such
termination. If any term or provision of this Lease or any application thereof
is invalid or unenforceable, the remainder of this Lease and any other application
of such term or provisions shall not be affected thereby. If any late charges
or any interest rate provided for in any provision of this Lease are based upon
a rate in excess of the maximum rate permitted by applicable law, the parties
agree that such charges shall be fixed at the maximum permissible rate. Neither
this Lease nor any provision hereof may be changed, waived, discharged or
terminated except by a written instrument in recordable form signed by Lessor
and Lessee. All the terms and provisions of this Lease shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns. The headings in this Lease are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof. This
Lease shall be governed by and construed in accordance with the laws of the
State, but not including its conflicts of laws rules.

          27.10.
Memorandum of Lease. Neither this Lease, nor any short form memorandum
thereof, shall be recorded in any land records. 

 [SIGNATURES
ON NEXT PAGE]

60

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

	
 

	
 

	
 

	
 

	
 

	
“LESSOR”

	
 

	
 

	
 

	
 

	
 

	
 

	
APPLE TEN BUSINESS TRUST, a Virginia
business trust

	
 

	
 

	
 

	
 

	
 

	
By:

	
Apple Ten Hospitality Ownership, Inc., Trustee

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
/s/ David P. Buckley

	
 

	
 

	
 

	

	
 

	
 

	
Name:

	
David P. Buckley

	
 

	
 

	
Title:

	
Vice President

	
 

	
 

	
 

	
 

	
 

	
“LESSEE”

	
 

	
 

	
 

	
 

	
 

	
APPLE TEN HOSPITALITY MANAGEMENT,
INC., a Virginia corporation

	
 

	
 

	
 

	
 

	
 

	
By:

	
/s/ Justin G. Knight

	
 

	
 

	

	
 

	
Name:

	
Justin G. Knight

	
 

	
Title:

	
President

EXHIBIT
A

LEGAL DESCRIPTION

All that certain, piece,
parcel or lot of land, lying, being and situate on the eastern side of East
Exchange Boulevard, in the City of Columbia, County of Richland,
State of South Carolina, containing 2.27
acres, more or less, the same being designated as “Vacant Lot”, on a plat prepared for Mitul Patel,
plat prepared by Baxter Land Surveying Co.,
Inc., Rosser W. Baxter, Jr. SCPLS No. 7613, dated October 1, 2006, approved for
recording on March 28, 2007, and recorded March 28, 2007, in the Register of
Deeds Office in Record Book R1296 at
page 2769, reference being made to said plat for a more complete description, all measurements being
a little more or less.

Being a portion of the
property conveyed to Columbia East Investments, LLC by deed of Sun NLF Limited Partnership dated March 3,
2005, recorded March 16, 2005 in Record Book 1032 at page 3851.

TMS No.: 16308-07-01 (portion of)

EXHIBIT B

SPACE LEASES

None

SCHEDULE
2.1

COMMENCEMENT DATE

March 25, 2011

SCHEDULE
3.1(a)

BASE RENT

	
 

	
 

	
 

	
Prorated 2011:

	
$650,749

	
 

	
2011:

	
$842,281

	
 

SCHEDULE
3.1(b)

SUITE REVENUE BREAKPOINT

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Prorated 

2011

	
 

	
Full Year 

2011

	
 

	
 

	
 

	

	
 

	

	
 

	
Yearly Breakpoint

	
 

	
$

	
185,389

	
 

	
$

	
239,954Exhibit
 10.20

 
	
  

 	
  

 
	
  

 	
Jacksonville, NC (Home2)

 

PURCHASE CONTRACT

between

ONSLOW HOSPITALITY, 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

 	
  

 	
 7

 
	
  

 
	
  

 	
 2.1

 	
 Purchase and
 Sale

 	
  

 	
 7

 
	
  

 
	
  

 	
 2.2

 	
 Purchase
 Price

 	
  

 	
 7

 
	
  

 
	
  

 	
 2.3

 	
 Allocation

 	
  

 	
 7

 
	
  

 
	
  

 	
 2.4

 	
 Payment

 	
  

 	
 7

 
	
  

 
	
  

 	
 2.5

 	
 Earnest
 Money Deposit

 	
  

 	
 7

 
	
  

 
	
 ARTICLE III

 	
 REVIEW PERIOD

 	
  

 	
 8

 
	
  

 
	
  

 	
 3.1

 	
 Review
 Period

 	
  

 	
 8

 
	
  

 
	
  

 	
 3.2

 	
 Due
 Diligence Examination

 	
  

 	
 9

 
	
  

 
	
  

 	
 3.3

 	
 Restoration

 	
  

 	
 9

 
	
  

 
	
  

 	
 3.4

 	
 Seller
 Exhibits

 	
  

 	
 10

 
	
  

 
	
 ARTICLE IV

 	
 SURVEY AND TITLE APPROVAL

 	
  

 	
 10

 
	
  

 
	
  

 	
 4.1

 	
 Survey

 	
  

 	
 10

 
	
  

 
	
  

 	
 4.2

 	
 Title

 	
  

 	
 10

 
	
  

 
	
  

 	
 4.3

 	
 Survey or
 Title Objections

 	
  

 	
 10

 
	
  

 
	
 ARTICLE V

 	
 FRANCHISE AGREEMENT

 	
  

 	
 11

 
	
  

 
	
 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

 	
  

 	
 16

 
	
  

 
	
  

 	
 8.1

 	
 Subsequent
 Developments

 	
  

 	
 16

 
	
  

 
	
  

 	
 8.2

 	
 Construction of the Hotel

 	
  

 	
 16

 
	
  

 
	
  

 	
 8.3

 	
 Plans and Specifications

 	
  

 	
 16

 
	
  

 
	
  

 	
 8.4

 	
 Commencement
of Construction; Substantial Completion

 	
  

 	
 16

 

i

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 8.5

 	
 Inspections

 	
  

 	
 17

 
	
  

 
	
  

 	
 8.6

 	
 Punchlist

 	
  

 	
 17

 
	
  

 
	
  

 	
 8.7

 	
 Pre-opening
Program

 	
  

 	
 17

 
	
  

 
	
  

 	
 8.8

 	
 Construction
Warranty

 	
  

 	
 17

 
	
  

 
	
  

 	
 8.9

 	
 Other
Obligations of Seller Before Closing

 	
  

 	
 17

 
	
  

 
	
  

 	
 8.10

 	
 Third
Party Consents

 	
  

 	
 18

 
	
  

 
	
  

 	
 8.11

 	
 Access
to Financial Information

 	
  

 	
 19

 
	
  

 
	
  

 	
 8.12

 	
 Bulk
Sales

 	
  

 	
 19

 
	
  

 
	
  

 	
 8.14

 	
 Escrow
Funds

 	
  

 	
 19

 
	
  

 
	
 ARTICLE IX

 	
 CONDITIONS FOR CLOSING

 	
  

 	
 20

 
	
  

 
	
  

 	
 9.1

 	
 Buyer’s
 Conditions for Closing

 	
  

 	
 20

 
	
  

 
	
  

 	
 9.2

 	
 Seller’s
 Conditions for Closing

 	
  

 	
 21

 
	
  

 
	
 ARTICLE X

 	
 CLOSING AND CONVEYANCE

 	
  

 	
 22

 
	
  

 
	
  

 	
 10.1

 	
 Closing

 	
  

 	
 22

 
	
  

 
	
  

 	
 10.2

 	
 Deliveries
 of Seller

 	
  

 	
 22

 
	
  

 
	
  

 	
 10.3

 	
 Buyer’s
 Deliveries

 	
  

 	
 24

 
	
  

 
	
 ARTICLE XI

 	
 COSTS

 	
  

 	
 24

 
	
  

 
	
  

 	
 11.1

 	
 Seller’s
 Costs

 	
  

 	
 24

 
	
  

 
	
  

 	
 11.2

 	
 Buyer’s
 Costs

 	
  

 	
 24

 
	
  

 
	
 ARTICLE XII

 	
 ADJUSTMENTS

 	
  

 	
 25

 
	
  

 
	
  

 	
 12.1

 	
 Adjustments

 	
  

 	
 25

 
	
  

 
	
  

 	
 12.2

 	
 Reconciliation
 and Final Payment

 	
  

 	
 26

 
	
  

 
	
  

 	
 12.3

 	
 Employees

 	
  

 	
 26

 
	
  

 
	
 ARTICLE XIII

 	
 CASUALTY AND CONDEMNATION

 	
  

 	
 27

 
	
  

 
	
  

 	
 13.1

 	
 Risk of
 Loss; Notice

 	
  

 	
 27

 
	
  

 
	
  

 	
 13.2

 	
 Buyer’s
 Termination Right

 	
  

 	
 27

 
	
  

 
	
  

 	
 13.3

 	
 Procedure
 for Closing

 	
  

 	
 27

 
	
  

 
	
 ARTICLE XIV

 	
 DEFAULT REMEDIES

 	
  

 	
 28

 
	
  

 
	
  

 	
 14.1

 	
 Buyer
 Default

 	
  

 	
 28

 
	
  

 
	
  

 	
 14.2

 	
 Seller
 Default

 	
  

 	
 28

 
	
  

 
	
  

 	
 14.3

 	
 Attorney’s
 Fees

 	
  

 	
 28

 
	
  

 
	
 ARTICLE XV

 	
 NOTICES

 	
  

 	
 28

 

 ii

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 
	
 ARTICLE XVI

 	
 MISCELLANEOUS

 	
  

 	
 29

 
	
  

 
	
  

 	
 16.1

 	
 Performance

 	
  

 	
 29

 
	
  

 
	
  

 	
 16.2

 	
 Binding
 Effect; Assignment

 	
  

 	
 29

 
	
  

 
	
  

 	
 16.3

 	
 Entire
 Agreement

 	
  

 	
 29

 
	
  

 
	
  

 	
 16.4

 	
 Governing
 Law

 	
  

 	
 29

 
	
  

 
	
  

 	
 16.5

 	
 Captions

 	
  

 	
 30

 
	
  

 
	
  

 	
 16.6

 	
 Confidentiality

 	
  

 	
 30

 
	
  

 
	
  

 	
 16.7

 	
 Closing
 Documents

 	
  

 	
 30

 
	
  

 
	
  

 	
 16.8

 	
 Counterparts

 	
  

 	
 30

 
	
  

 
	
  

 	
 16.9

 	
 Severability

 	
  

 	
 30

 
	
  

 
	
  

 	
 16.10

 	
 Interpretation

 	
  

 	
 30

 
	
  

 
	
  

 	
 16.12

 	
 Further Acts

 	
  

 	
 31

 
	
  

 
	
  

 	
 16.13

 	
 Joint and
 Several Obligations

 	
  

 	
 31

 
	
  

 
	
 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

 	
  

 	
  

 
	
 Exhibit H

 	
 Construction Warranty

 	
  

 	
  

 

iii

PURCHASE CONTRACT

          
This PURCHASE CONTRACT (this “Contract”) is made and
entered into as of February, 4 2011, by and between ONSLOW HOSPITALITY, INC., a
North Carolina corporation (“Seller”) with a principal office at
2011 Veasley St., Greensboro, NC 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 parcel of land located in the City of
Jacksonville, Onslow County, North Carolina, identified in on Exhibit A
attached hereto and incorporated by reference.
Seller intends to construct a hotel on such land containing 105 suites
to be operated as a Home2 Suites by Hilton hotel. 

          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 Home2 by Hilton, 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.

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

          “Contractor” shall mean the contractor for the
Hotel, Centerpointe Construction Corp.

          “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 Agreement 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
(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.

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.

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

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

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

          “Franchisor” shall mean Hilton Hotels Corp. or
its affiliate.

          “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 “Home2 Suites Jacksonville”.

          “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

3

occupancy of, the Improvements or
Land, together with all amendments, modifications, renewals and extensions
thereof, and all guaranties by third parties of the obligations of the tenants,
licensees, franchisees, concessionaires or other entities thereunder.

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

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

          
“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.

4

          
“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 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.

          “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; (iii) 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 (iv) 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,

5

and all of the other conditions set forth in the Franchise Agreement
have been satisfied, subject to Punch List Items.

          “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.

          “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. 

6

          “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 TWELVE MILLION and
No/100 Dollars ($12,000,000.00) (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 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

7

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:

                    (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

8

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.

          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. 

9

          3.4
Seller Exhibits. Buyer shall have until the end of the Review Period to
review and approve the information on Exhibits B, C, D, E and F. In the event
Buyer does not approve any such Exhibit or the information contained therein,
Buyer shall be entitled to terminate this Contract 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 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

10

(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 terminate 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 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:

11

                    (a)
Authority; No Conflicts. Seller is a corporation 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, 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 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

12

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 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, 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,

13

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 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

14

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 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 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) 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.

          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.

15

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 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, (d) in
accordance with all requirements of the Franchise Agreement, and (e) free of
all liens and claims, 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. Seller represents and warrants to Buyer that (i) the plans and
specifications that Seller has delivered to Buyer for its review before the
date of this Contract and/or during the Review Period are and shall be a true
and complete copy of the plans and specifications for the construction of the
Hotel, (ii) such plans and specifications have not been amended or supplemented
in any material respect and (iii) such plans and specifications have been
prepared by or otherwise approved by the Franchisor. Seller shall obtain the approval of the Franchisor and Buyer with
respect to all material changes to such plans and specifications after the date
hereof. Such plans and specifications
and all revisions thereto, as approved by the 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
construction, equipping and furnishing of the Hotel in accordance with the
Plans and Specifications and this Contract.
Construction of the Hotel has already commenced and 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 November 15, 2011, 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. 

16

          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 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 up to but not including the Effective Time, regardless of when
such costs are payable (the “Pre-Opening Costs”). Seller shall also fund all working capital accounts, reserve
accounts and other accounts required under the Franchise Agreement, to be
funded before the Effective Time.

          8.8 Construction Warranty. At the Closing, 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, if any, 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:

17

          8.10
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 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 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;

18

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

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

          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.

          8.11
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”).

          8.12
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 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. 

          8.13
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.

          8.14
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

19

preceding
sentence to the extent that Seller is required to incur costs not in the
ordinary course of business for third parties to provide such representation letters.
The provisions of this Section shall survive Closing or termination of this
Contract.

          8.15
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. 

          8.16
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) year 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]

20

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

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

                    
(g) The Existing 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 to Closing.

                    
(i) The Hotel shall be Substantially Completed.

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

                    
(k) The Franchisor shall have executed and delivered the
Franchise Agreement upon terms and conditions acceptable to Buyer in its sole
and absolute discretion.

                    
(l) 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 of value of the
Property.

                    
(m) 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 approved by Buyer and (iv) with
no other exceptions to title other than the Permitted Exceptions.

          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

21

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 than fifteen (15) business
days after Substantial Completion of the Hotel, provided 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 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 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.

22

                    
(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.
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 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.

23

          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 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. 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

24

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.

                    
(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. 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 in writing by Buyer (which approval shall not be
unreasonably withheld), (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 and (iii) at
Closing Buyer shall receive a credit for the working capital account in the
amount of $20,000.

25

                    
(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 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.

26

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.

          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

27

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 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:

28

	
  

 	
  

 	
  

 
	
  

 	
 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:

 	
 ONSLOW HOSPITALITY, 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.

          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 North Carolina (without regard to conflicts
of law principles).

29

          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.

          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.

30

          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]

31

	
  

 	
  

 
	
  

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

 

	
  

 	
  

 	
  

 
	
  

 	
 SELLER:

 
	
  

 	
  

 
	
  

 	
 ONSLOW
 HOSPITALITY, INC., a North Carolina corporation

 
	
  

 	
  

 	
  

 
	
  

 	
 By: 

 	
 /s/ Javesh
 N. Patel

 
	
  

 	
  

 	

 

 

	
  

 	
  

 	
  

 
	
  

 	
 Name: 

 	
 Javesh N
 Patel

 
	
  

 	
  

 	

 

 

	
  

 	
  

 	
  

 
	
  

 	
 Title: 

 	
 Vice
 President

 
	
  

 	
  

 	

 

 

	
  

 	
  

 	
  

 
	
  

 	
 BUYER:

 
	
  

 	
  

 
	
  

 	
 APPLE TEN
 HOSPITALITY OWNERSHIP, INC., a Virginia corporation

 
	
  

 	
  

 	
  

 
	
  

 	
 By: 

 	
 /s/ David Buckley

 
	
  

 	
  

 	

 

 

	
  

 	
  

 	
  

 
	
  

 	
 Name: 

 	
 David Buckley

 
	
  

 	
  

 	

 

 

	
  

 	
  

 	
  

 
	
  

 	
 Title: 

 	
 Vice President

 
	
  

 	
  

 	

 

 

32

EXHIBIT “A”

LEGAL DESCRIPTION OF LAND

WITNESSETH, that the Grantor, for a valuable consideration paid by the Grantee, the receipt and sufficiency of which is hereby
acknowledged, has and by these presents does grant, bargain, sell, and convey unto the Grantee, in fee simple, all that certain
tract, lot or parcel of land, situated in Jacksonville Township, Onslow County, North Carolina and more particularly described as
follows:

Being all of Lot 2, containing 2.63 acres, as shown and described on a map entitled, “Division of Lot 2-B Walnut Plaza, Prepared for
Delta Investors”, dated November 29, 2004, prepared by John L. Pierce & Associates, P.A. and recorded in Map Book 47, Page 126, in
the office of the Register of Deeds of Onslow County, North Carolina.

Together with and subject to a non-exclusive, perpetual fifty (50) feet wide Ingress, Egress, Drainage & Utility Easement (now
commonly known as Circuit Lane), as shown on the map recorded in Map Book 47, Page 126, Onslow County Registry.

EXHIBIT B

LIST OF FF&E

Provide at Closing

EXHIBIT C

LIST OF HOTEL CONTRACTS

EXHIBIT C-1 - Seller’s Hotel Contracts

              
                     NONE

EXHIBIT C-2 - Other Hotel Contracts

              
                     NONE

2

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, Project No. 09-14177, prepared by ECS
Carolinas, LLP and dated April 20, 2007.

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 ONSLO HOSPITALITY, INC., a North Carolina
corporation (“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:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 ONSLOW HOSPITALITY, Inc.

 
	
  

 	
  

 	
 c/o CN
 Hotels

 
	
  

 	
  

 	
 2011 Veasley
 Street

 
	
  

 	
  

 	
 Greensboro,
 NC 27407

 
	
  

 	
  

 	
 Attention:  Jayesh Patel

 
	
  

 	
  

 	
 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
Attention:
Donald M. VonCannon
Fax No:. (336)
721-0414

 
	
  

 	
  

 	
  

 
	
  

 	
 (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:

 
	
  

 	
  

 
	
  

 	
 ONSLOW HOSPITALITY, INC.

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 
	
  

 	
  

 	

 

 

	
  

 	
  

 	
  

 
	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	

 

 

	
  

 	
  

 	
  

 
	
  

 	
 Title:

 	
  

 
	
  

 	
  

 	

 

 

	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 BUYER:

 
	
  

 	
  

 
	
  

 	
 APPLE TEN
 HOSPITALITY OWNERSHIP, INC.

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 
	
  

 	
  

 	

 

 

	
  

 	
  

 	
  

 
	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	

 

 

	
  

 	
  

 	
  

 
	
  

 	
 Title:

 	
  

 
	
  

 	
  

 	

 

 

	
  

 	
  

 	
  

 
	
  

 	
  

 
	
  

 	
 ESCROW AGENT:

 
	
  

 	
  

 
	
  

 	
 CHICAGO
 TITLE COMPANY

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 
	
  

 	
  

 	

 

 

	
  

 	
  

 	
  

 
	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	

 

 

	
  

 	
  

 	
  

 
	
  

 	
 Title:

 	
  

 
	
  

 	
  

 	

 

 

-vi-

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.

-vii-

SCHEDULE 3.1

DUE DILIGENCE LIST

Due
Diligence

Documents Required

[electronic
versions preferred]

Property Name:

Date Opened:

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 Date 

 Sent

 	
  

 	
 Comments

 
	
  

 	
  

 	

 

 	
  

 	

 

 	
  

 	

 

 
	
 1

 	
  

 	
 Y-T-D Detailed Operating Statements

 	
  

 	
  

 	
  

 	
  

 
	
 2

 	
  

 	
 Prior 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

 	
  

 	
  

 	
  

 	
 No equipment leases

 
	
 16

 	
  

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

 	
  

 	
  

 	
  

 	
  

 

-viii-

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 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

 	
  

 	
  

 	
  

 	
  

 
	
 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 A REGULAR SURVEY 

 
	
 38

 	
  

 	
 Service Contract Summary Completed

 	
  

 	
  

 	
  

 	
  

 
	
 39

 	
  

 	
 Property Data Sheet Completed

 	
  

 	
  

 	
  

 	
  

 
	
 40

 	
  

 	
 Other

 	
  

 	
  

 	
  

 	
  

 

-ix-

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

 	
  

 	
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-x-

Due
Diligence

Property Data Survey

[To
Be Completed Electronically]

-xi-

-xii-

-xiii-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00189-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00189-of-00352.parquet"}]]