Document:

Exhibit 10.51

ASSIGNMENT OF PURCHASE CONTRACT

          THIS ASSIGNMENT (the “Assignment”)
is made effective as of this 8th day of December, 2011, by and between APPLE SUITES REALTY GROUP, INC., a Virginia
corporation (“Assignor”), and APPLE TEN HOSPITALITY OWNERSHIP, INC., a
Virginia corporation (“Assignee”).

RECITALS

          A.          Pursuant
to that certain Purchase Contract dated as of July 8, 2010 (the “Purchase
Contract”), between certain persons and entities set forth on Item
2(a) of Schedule 1 of the Purchase Contract (the “Interest Owners”), Sunbelt-FTH, LLC, an Alabama limited
liability company (the “Company”)
and Assignor, the Interest Owners agreed to sell all of their interests in the
Company to the Assignor.

          B.          Assignor
now desires to assign its rights under the Purchase Contract to Assignee. 

WITNESSETH

          FOR AND IN
CONSIDERATION of the sum of Ten Dollars ($10.00) cash in hand paid, other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

          1.          Assignment.
Assignor hereby assigns and conveys to Assignee all of its right, title, and
interest in, to, and under the Purchase Contract. This Assignment shall not relieve
Assignor of its obligations and liabilities under the Purchase Contract.

          2.          Assumption.
Assignee hereby assumes and agrees to perform all of Assignor’s obligations
under the Purchase Contract.

1

          3.          Reimbursement.
Assignee hereby agrees to reimburse Assignor the amount of the Earnest Money
Deposit paid by Assignor pursuant to Section 2.5 of the Purchase Contract.

          4.          The
rights and obligations of the parties hereunder shall extend to, be binding
upon and inure to the benefit of their respective successors and assigns.

          IN WITNESS
WHEREOF, the parties hereto have executed this Assignment as of the date first
above written.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
ASSIGNOR:

	
 

	
 

	
 

	
 

	
APPLE SUITES
REALTY GROUP, INC., a Virginia

corporation

	
 

	
 

	
 

	
 

	
 

	
By:

	
/s/ David P.
Buckley

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Name:

	
David P.
Buckley

	
 

	
 

	
 

	
Title:

	
Vice
President

	
 

	
 

	
 

	
ASSIGNEE:

	
 

	
 

	
 

	
 

	
APPLE TEN
HOSPITALITY OWNERSHIP, INC.

	
 

	
 

	
a Virginia
corporation

	
 

	
 

	
 

	
 

	
 

	
By:

	
/s/ David P.
Buckley

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Name:

	
David P.
Buckley

	
 

	
 

	
 

	
Title:

	
Vice
President

2Exhibit 10.52

Hotel: Nashville, (TN) TPS

PURCHASE CONTRACT

between

LARRY G. BLUMBERG

HAYNE HOLLIS

BARRY KRASELSKY

WATSON & DOWNS INVESTMENTS, LLC

BLUMBERG FAMILY – E&M, LLC

BLUMBERG FUTURES, LLC

HOLLIS & SPANN FUTURES, LLC

(“INTEREST OWNERS”),

SUNBELT – TNT, LLC

(“COMPANY”)

AND

APPLE SUITES REALTY GROUP, INC.

(“BUYER”)

Dated: July 8, 2010

 [CONSTRUCTION]

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

	
9

	
 

	
 

	
2.1

	
 

	
 

	
Purchase and Sale

	
9

	
 

	
 

	
2.2

	
 

	
 

	
Purchase Price

	
9

	
 

	
 

	
2.3

	
 

	
 

	
Allocation

	
9

	
 

	
 

	
2.4

	
 

	
 

	
Payment

	
9

	
 

	
ARTICLE III

	
 

	
Review Period

	
10

	
 

	
 

	
3.1

	
 

	
 

	
Review Period

	
10

	
 

	
 

	
3.2

	
 

	
 

	
Due Diligence Examination

	
12

	
 

	
 

	
3.3

	
 

	
 

	
Restoration

	
12

	
 

	
ARTICLE IV

	
 

	
SURVEY AND TITLE APPROVAL

	
12

	
 

	
 

	
4.1

	
 

	
 

	
Survey

	
12

	
 

	
 

	
4.2

	
 

	
 

	
Title

	
12

	
 

	
 

	
4.3

	
 

	
 

	
Survey or Title Objections

	
13

	
 

	
ARTICLE V

	
 

	
ASSIGNMENT OF MANAGEMENT AGREEMENT AND
FRANCHISE AGREEMENT

	
13

	
 

	
ARTICLE VI

	
 

	
BROKERS

	
14

	
 

	
ARTICLE VII

	
 

	
REPRESENTATIONS, WARRANTIES AND COVENANTS

	
14

	
 

	
 

	
7.1

	
 

	
 

	
Representations, Warranties and Covenants
of the Interest Owners

	
14

	
 

	
 

	
7.2

	
 

	
 

	
Representations, Warranties and Covenants
of Buyer

	
23

	
 

	
 

	
7.3

	
 

	
 

	
Survival

	
23

	
 

	
ARTICLE VIII

	
 

	
ADDITIONAL COVENANTS

	
24

	
 

	
 

	
8.1

	
 

	
 

	
Subsequent Developments

	
24

	
 

	
 

	
8.2

	
 

	
 

	
Obligations of the Company and Interest
Owners Before Closing

	
24

	
 

	
 

	
8.3

	
 

	
 

	
Third Party Consents

	
25

	
 

	
 

	
8.4

	
 

	
 

	
Estoppel Certificates

	
25

	
 

	
 

	
8.5

	
 

	
 

	
Access to Financial Information

	
25

ii

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
8.6

	
 

	
 

	
Bulk Sales

	
25

	
 

	
 

	
8.7

	
 

	
 

	
Indemnification

	
26

	
 

	
 

	
8.8

	
 

	
 

	
Limitation of Liability of Interest Owners

	
28

	
 

	
 

	
8.9

	
 

	
 

	
Tax Matters

	
28

	
 

	
 

	
8.10

	
 

	
 

	
Construction of Hotel

	
29

	
 

	
 

	
8.11

	
 

	
 

	
Commencement of Construction; Substantial
Completion

	
29

	
 

	
 

	
8.12

	
 

	
 

	
(Intentionally Omitted)

	
29

	
 

	
 

	
8.13

	
 

	
 

	
Inspections

	
29

	
 

	
 

	
8.14

	
 

	
 

	
Punch List

	
29

	
 

	
 

	
8.15

	
 

	
 

	
Pre-Opening Program

	
30

	
 

	
 

	
8.16

	
 

	
 

	
Construction Warranty

	
30

	
 

	
ARTICLE IX

	
 

	
CONDITIONS FOR CLOSING

	
31

	
 

	
 

	
9.1

	
 

	
 

	
Buyer’s Conditions for Closing

	
31

	
 

	
 

	
9.2

	
 

	
 

	
Interest Owner’s Conditions for Closing

	
32

	
 

	
ARTICLE X

	
 

	
CLOSING AND CONVEYANCE

	
32

	
 

	
 

	
10.1

	
 

	
 

	
Closing

	
32

	
 

	
 

	
10.2

	
 

	
 

	
Interest Owners’ Deliveries

	
33

	
 

	
 

	
10.3

	
 

	
 

	
Buyer’s Deliveries

	
34

	
 

	
 

	
10.4

	
 

	
 

	
Tax Matters

	
34

	
 

	
ARTICLE XI

	
 

	
COSTS

	
36

	
 

	
 

	
11.1

	
 

	
 

	
Interest Owner’s Costs

	
36

	
 

	
 

	
11.2

	
 

	
 

	
Buyer’s Costs

	
36

	
 

	
ARTICLE XII

	
 

	
ADJUSTMENTS

	
36

	
 

	
 

	
12.1

	
 

	
 

	
Adjustments

	
36

	
 

	
 

	
12.2

	
 

	
 

	
Reconciliation and Final Payment

	
37

	
 

	
 

	
12.3

	
 

	
 

	
Employees

	
37

	
 

	
ARTICLE XIII

	
 

	
CASUALTY AND CONDEMNATION

	
37

	
 

	
 

	
13.1

	
 

	
 

	
Risk of Loss; Notice

	
37

	
 

	
 

	
13.2

	
 

	
 

	
Buyer’s Termination Right

	
38

	
 

	
 

	
13.3

	
 

	
 

	
Procedure for Closing

	
38

	
 

	
ARTICLE XIV

	
 

	
DEFAULT REMEDIES

	
38

	
 

	
 

	
14.1

	
 

	
 

	
Buyer Default

	
38

	
 

	
 

	
14.2

	
 

	
 

	
Interest Owner/Company Default

	
38

iii

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
14.3
	
 
	
 
	
Attorney’s Fees
	
39

	
 

	
ARTICLE XV
	
 
	
NOTICES
	
39

	
 

	
ARTICLE XVI
	
 
	
MISCELLANEOUS
	
40

	
 

	
 
	
16.1
	
 
	
 
	
Performance
	
40

	
 

	
 
	
16.2
	
 
	
 
	
Binding Effect; Assignment
	
40

	
 

	
 
	
16.3
	
 
	
 
	
Entire Agreement
	
40

	
 

	
 
	
16.4
	
 
	
 
	
Governing Law
	
40

	
 

	
 
	
16.5
	
 
	
 
	
Captions
	
40

	
 

	
 
	
16.6
	
 
	
 
	
Confidentiality
	
40

	
 

	
 
	
16.7
	
 
	
 
	
Counterparts
	
41

	
 

	
 
	
16.8
	
 
	
 
	
Severability
	
41

	
 

	
 
	
16.9
	
 
	
 
	
Interpretation
	
41

	
 

	
 
	
16.10
	
 
	
 
	
Further Acts
	
41

	
 

	
 
	
16.11
	
 
	
 
	
Joint and Several Obligations
	
41

	
 

	
ARTICLE
XVIII
	
 
	
SUPPLEMENTAL PROVISIONS
	
41

	
 
	
 
	
 
	
 

	
SCHEDULES:
	
 

	
Schedule 1

	
 

	
Hotel
Specific Data

	
Schedule 2

	
 

	
Supplemental
Provisions

	
Schedule
7.1(k)

	
 

	
Leases

	
Schedule
7.1(l)

	
 

	
Company
Intellectual Property

	
Schedule
7.1(n)

	
 

	
Tax Returns

	
Schedule
7.1(o)

	
 

	
Insurance

	
Schedule
7.1(p)

	
 

	
Agreements

	
 

	
 

	
EXHIBITS:

	
 

	
 

	
Exhibit A

	
Legal
Description

	
Exhibit B

	
Management
Agreement

	
Exhibit C

	
Environmental
Reports

	
Exhibit D

	
Consents and
Approvals

	
Exhibit E

	
Construction
Warranty

iv

PURCHASE CONTRACT

          This
PURCHASE CONTRACT (this “Contract”) is made and entered into as of the
date set forth in Item 1 of Schedule 1 by and between the persons
and entities set forth in Item 2(a) of Schedule 1 (each, an “Interest
Owner” and, collectively, the “Interest Owners”), with an address
c/o Larry Blumberg & Associates, Inc., 2733 Ross Clark Circle, P.O. Box
5566, Dothan, Alabama 36302; the entity set forth in Item 2(b) of Schedule
1 (the “Company”), with its principal office c/o Larry Blumberg
& Associates, Inc., 2733 Ross Clark Circle, P.O. Box 5566, Dothan, Alabama
36302; and APPLE SUITES REALTY GROUP, INC., a Virginia corporation, with its
principal office at 814 East Main Street, Richmond, Virginia 23219, or its
affiliates or assigns (“Buyer”).

RECITALS

          A.     
The Company is the fee simple or leasehold owner of the land identified in
Exhibit A attached hereto and incorporated herein by this reference. The
Company is constructing on such land the hotel identified in Item 3 of Schedule
1 attached hereto and incorporated herein by reference.

          B.     
The Interest Owners are the sole owners of one hundred percent (100%) of the
limited liability company interests or stock, as applicable, in the Company.

          C.     
Buyer desires to purchase from the Interest Owners, and the Interest Owners desire
to sell to Buyer, all of Interest Owner’s interests in the Company 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 Agreement
shall have the meanings set forth below unless the context otherwise requires:

          “Additional
Deposit” shall mean $2,500.

          “Affiliate”
shall mean, with respect to the Company, any Interest Owner 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 the Company, any Interest Owner 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. 

1

          “Agreement”
means any agreement, contract, obligation, promise or undertaking (whether
written or oral and whether express or implied) that is or purports to be
legally binding.

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

          “Brand”
shall mean the hotel brand or franchise identified in Item 4 of Schedule
1 and under which the Hotel operates.

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

          “Closing”
shall mean the closing of the purchase and sale of the Interests 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 8.16.

          “Contractor”
shall mean the contractor for the Hotel identified in Item 12 of Schedule
1.

          “Code”
means the Internal Revenue Code of 1986, as amended.

          “Company
Intellectual Property” shall have the meaning set forth in Section
7.1(l).

          “Contemplated
Transactions” shall mean all of the transactions contemplated by this
Contract and the Exhibits hereto.

          “Contract”
shall mean this Purchase Contract, as amended from time to time pursuant to the
terms hereof.

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

          “Deposits”
shall mean, to the extent assignable, all prepaid rents and deposits
(including, without limitation, any reserves for capital repairs and/or
improvements), including, but not limited to, 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, all reserves for replacement of FF&E, reserves for real
property taxes and insurance and utility deposits, credit for which shall be
given to the Interest Owners to the extent hereinafter provided.

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

2

          “Earnest Money Deposit” shall mean both the
Initial Deposit defined below and described in Section 2.5(a) hereof and the
Additional Deposit defined above and described in Section 2.5(a) hereof.

          “Effective
Date” shall mean the date this Contract
is fully executed by all of the parties hereto, and an original of the executed
document (which may be in the form of counterparts, in which case the last
counterpart) is deposited with the Title Company.

          “Effective
Time” shall have the meaning set forth in Section 10.1.

          “Environment”
means soil, land surface or subsurface strata, surface waters (including
navigable waters and ocean waters), groundwaters, drinking water supply, stream
sediments, ambient air (including indoor air), plant and animal life and any
other environmental medium or natural resource.

          “Environmental
Requirements” shall have the meaning set forth in Section 7.1(t)(iii).

          “Escrow
Agent” shall mean Chicago Title Company, the Person serving as escrow
agent for purposes of the Closing and the Earnest Money Deposit.

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

          “Existing
Franchise Agreement” shall mean the franchise agreement identified in Item
6 of Schedule 1.

          “Existing
Management Agreement” shall mean the management agreement identified in Item
5 of Schedule 1. 

          “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 the
Company pursuant to an FF&E Lease), 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. 

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

          “Force
Majeure” shall mean (i) strikes, lockouts or labor disputes, (ii) the
inability through no fault of the Company to obtain labor or materials or
reasonable substitutes therefor,

3

(iii) acts of
God and adverse weather conditions, (iv) enemy or hostile governmental action
or acts of terrorism, (v) governmental restrictions such as embargoes, (vi)
civil commotion, (vii) fire or other casualty or (viii) other conditions
similar to those enumerated above that are beyond the reasonable control of the
Company, but in each case excluding any such events or conditions that merely
result in increased costs to the Company.

          “Franchisor”
shall mean the franchisor identified in Item 6 of Schedule 1.

          “Governmental
Body” means any (i) nation, state, county, city, town, borough, village,
district or other jurisdiction; (ii) federal, state, local, municipal, foreign
or other government; (iii) governmental or quasi–governmental authority of any
nature (including any agency, branch, department, board, commission, court,
tribunal or other entity exercising governmental or quasi–governmental powers);
(iv) multinational organization or body; (v) body exercising, or entitled or
purporting to exercise, any administrative, executive, judicial, legislative,
police, regulatory or taxing authority or power; or (vi) any official of any of
the foregoing.

          “Hazardous
Material” shall have the meaning set forth in Section 7.1(t)(iii).

          “Hotel”
shall mean the hotel being constructed on the Land, including all Improvements
and Personal Property associated therewith, known generally by the name and/or
identification set forth in Item 3(a) of Schedule 1.

          “Improvements”
shall mean all buildings, structures, fixtures, parking areas and other
improvements now existing or to be constructed on the Land, including, without
limitation, all improvements and amenities described in Item 3 of Schedule
1 and all related facilities.

          “Indemnified
Party” shall have the meaning set forth in Section 8.7(c)(i).

          “Indemnifying
Party” shall have the meaning set forth in Section 8.7(c)(i).

          “Initial Deposit” shall mean the sum of $2,500
as set forth in Section 2.5(a) hereof

          “Interest”
shall mean the limited liability company interest or corporate stock, as
applicable, owned by each Interest Owner in the Company, and “Interests”
shall mean all of such limited liability company interests or corporate stock.

          “Interest
Lien” shall mean any claim, lien, pledge, charge, security interest,
equitable interest, option, warrant, right of first refusal, restriction on
use, voting, transfer, receipt of income or other attribute of ownership, or
other encumbrance of any kind, affecting any Interest.

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

          “Leased
Premises” shall have the meaning set forth in Section 7.1(k).

4

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

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

          “Legal
Requirement” means any federal, state, local, municipal, foreign,
international, multinational or other constitution, law, ordinance, principle
of common law, code, regulation, rule, order, injunction, judgment, decree,
ruling, assessment or arbitration award of any Governmental Body or arbitrator.

          “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 LBAM-Investors Group, L.L.C., an Alabama limited liability company
and an Affiliate of the Company as of the date of this Contract.

          “New
Franchise Agreement” shall mean the franchise agreement to be entered into
by the Company and the Franchisor at the Closing.

          “New
Management Agreement” shall mean the management agreement to be entered
into by the Company and the Manager at the Closing, in the form of the
agreement attached hereto as Exhibit B.

          “Organizational
Documents” means (a) the articles or certificate of incorporation and the
bylaws of a corporation; (b) the partnership agreement and the certificate of
partnership of a partnership; (c) the articles of organization or certificate
of formation and any operating or limited liability company agreement of a
limited liability company; (d) any charter or similar document adopted or filed
in connection with the creation, formation, or organization of a Person, and
(e) any amendment to any of the foregoing.

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

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

          “Person”
means an individual or any entity, including a corporation, partnership, joint
venture, limited liability company, trust, estate or other unincorporated
association, whether or not a legal entity.

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

5

          “Plans
and Specifications” shall have the meaning set forth in Section
7.1(t)(viii), as the same may be revised during construction with the
approval of the Franchisor (to the extent such approval is required), provided
that any material revisions also shall be subject to the approval of Buyer,
which approval shall not be unreasonably withheld or delayed.

          “Pre-Closing
Tax Period” shall have the meaning set forth in Section 10.4(a).

          “Pre-Opening Costs” shall have the meaning set
forth in Section 8.15.

          “Pre-Opening Program” shall have the meaning
set forth in Section 8.15.

          “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 the Company 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 currently in effect, Licenses,
Tradenames, Contracts, Plans and Specs and FF&E Leases.

          “Property
Lien” means any deed of trust or mortgage, lien, security interest,
easement, right of way, encroachment, lease, purchase contract, option to
purchase, right of first refusal, servitude, restrictive covenant, limitation
on use or other encumbrance or title defect of any kind.

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

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

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

          “Records”
shall mean all books, records, promotional material, tenant data, guest history
information (other than any such information owned exclusively by the
Franchisor), marketing 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 the Company’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, and all
Tax Returns and work papers and filings related to Taxes for the current tax
year and the previous 

6

three (3) tax
years) owned by the Company and/or in the Company’s possession or control, or
to which the Company has access or may obtain from the Franchisor, that are
used in or relating to the Property and/or the operation of the Hotel,
including the Land, the Improvements or the FF&E, and the Company shall
furnish to Buyer (and the term “Records” shall include) 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 currently in effect and copies of the final plans and specifications
for the Hotel, it being understood that the Company may not have in its
possession all change orders and other modifications to the original plans and
specifications.

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

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

          “SEC”
shall have the meaning set forth in Section 8.5.

          “Securities
Act” means the Securities Act of 1933, as amended.

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

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

          “Straddle
Period” shall have the meaning set forth in Section 10.4(b).

          “Substantial
Completion” including variations thereof such as “Substantially Complete”
and “Substantially Completed” shall mean: (i) the Company 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) a 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 (or adequate provision for
payment of such persons or entities, which is not required to be an actual
escrow of funds, has been made to Buyer’s reasonable 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, and all of the other conditions
set forth in the Management Agreement and the Franchise Agreement have been
satisfied, subject to Punch List Items.

          “Supplemental
Provisions” shall have the meaning set forth in Article XVII.

7

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

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

          “Tax”
or “Taxes” means any income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, property, environmental,
windfall profit, customs, vehicle, airplane, boat, vessel or other title or
registration, capital stock, franchise, employees’ income withholding, foreign
or domestic withholding, social security, unemployment, disability, real
property, personal property, sales, use, transfer, value added, alternative,
add-on minimum and other tax, fee, assessment, levy, tariff, charge or duty of
any kind whatsoever and any interest, penalty, addition or additional amount
thereon imposed, assessed or collected by or under the authority of any
Governmental Body or payable under any tax-sharing agreement or any other
Contract, including any interest, penalty, or addition thereto, whether
disputed or not and including any obligations to indemnify or otherwise assume
or succeed to the Tax liability of any other Person.

“Tax
Return” means any return (including any information return), report,
statement, schedule, notice, form, declaration, claim for refund or other
document or information filed with or submitted to, or required to be filed
with or submitted to, any Governmental Body in connection with the
determination, assessment, collection or payment of any Tax or in connection
with the administration, implementation or enforcement of or compliance with
any Legal Requirement relating to any Tax.

          “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 all
franchise, license, management and other agreements granting a right to use the
name of such hotel chain or any other trademark or trade 

8

name and all
waivers of any brand standard shall remain in full force and effect after the
acquisition of the Interests by Buyer).

          “Utility
Reservations” shall mean the Company’s interest in the right to receive
and continuously consume (including, without limitation, from and after
Closing) 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. 

          “Warranties”
shall mean all warranties, guaranties, indemnities and claims, currently in
effect, for the benefit of the Company 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
the Company related thereto.

ARTICLE II

PURCHASE AND SALE; PURCHASE PRICE; PAYMENT;

EARNEST MONEY DEPOSIT

          2.1          Purchase
and Sale. Each Interest Owner agrees to sell and convey to Buyer or its
Affiliates and/or assigns, and Buyer or its assigns agrees to purchase from the
Interest Owners, all of the Interests, in consideration of the Purchase Price,
subject to and upon the terms and conditions hereof. All of the Interests shall
be conveyed, assigned, and transferred to Buyer at Closing, free and clear of
all Interest Liens.

          2.2          Purchase
Price. Buyer agrees to pay, and the Interest Owners agree to accept, as
consideration for the conveyance of all of the Interests, subject to the
adjustments provided for in this Contract, the amount set forth in Item 7
of Schedule 1; provided, however, that if the actual cost of
construction of the Hotel is less than the amount set forth in Item 14
of Schedule 1, the purchase price shall be reduced by an amount equal to
twenty percent (20%) of the difference between such actual construction costs
and the amount set forth in Item 14 of Schedule 1 (the “Purchase
Price”).

          2.3          Allocation.
The Purchase Price shall be allocated among the Interest Owners in accordance
with their percentage interest in the Company as set forth in Item 2(a)
of Schedule 1.

          2.4          Payment.
The Purchase Price, plus any positive adjustments under Section 12.1,
less (i) the Earnest Money Deposit and interest earned thereon, if any, which
Buyer elects to have applied against the Purchase Price (as provided below),
(ii) any reserves, if any, provided in this Purchase Agreement and any
applicable reserve for Punch List Items as provided in Section 8.14 hereof and
(iii) any negative adjustments under Section 12.1, shall be paid to the
Interest Owners in cash, certified funds or wire transfer, at the Closing of
the purchase and sale of the Interests. At the Closing, the Earnest Money
Deposit, together with interest earned thereon, if 

9

any, shall, at
Buyer’s election, be returned to Buyer or shall be paid over to the Interest
Owners by Escrow Agent to be applied to the Purchase Price on behalf of Buyer. 

          2.5          Earnest
Money Deposit.

                    
    (a)          Upon
the full execution and delivery of this Contract, Buyer shall deposit the sum
of Two Thousand Five Hundred and No/100 Dollars ($2,500.00) in cash, certified
bank check or by wire transfer of immediately available funds (the “Initial
Deposit”) with the Title Company, as escrow agent (“Escrow
Agent”), which sum shall be held by Escrow Agent as earnest
money. If, pursuant to the provisions of Section 3.1 of this Contract, Buyer
elects to terminate this Contract at any time prior to the expiration of the
Review Period, then the Escrow Agent shall return the Earnest Money Deposit to
Buyer promptly upon written notice to that effect from Buyer. If Buyer does not
elect to terminate this Contract on or before the expiration of the Review
Period, Buyer shall, within three (3) Business Days after the expiration of the
Review Period deposit the Additional Deposit with the Escrow Agent. The Initial
Deposit and the Additional Deposit, and all interest accrued thereon, shall
hereinafter be referred to as the “Earnest Money Deposit.”

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

ARTICLE III

REVIEW PERIOD

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

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

                    
    (b)          All
real estate and personal property tax statements with respect to the Real
Property and notices of appraised value for the Real Property for the current
year (if 

10

available) and
for the lesser of the time period the Real Property was owned or leased by the
Company or each of the three (3) calendar years prior to the current year;

                    
    (c)          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
Real Property or the Hotel and the construction, development, installation and
equipping thereof, as well as copies of all environmental reports and
information, topographical, boundary or “as built” surveys, engineering
reports, subsurface studies and other Contracts, Plans and Specs relating to or
affecting the Hotel, which the Company has in its possession or control. Buyer
acknowledges that the Contracts, Plans and Specs in the Company’s possession
may not include all change orders and other modifications made during the course
of construction of the Hotel, but in such case the Company will cause the
general contractor for the Hotel to furnish copies of such change orders and
other modifications upon Buyer’s request at any time during the Review Period;

                    
    (d)          All
agreements for real estate commissions, brokerage fees, finder’s fees or other
compensation payable by the Company in connection therewith; and

                    
    (e)          All
notices received from governmental authorities in connection with the Real
Property for the current year and for the lesser of the time period the Real
Property was owned or leased by the Company or each of the three (3) calendar
years prior to the current year 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.

          The
Company 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 the Company’s corporate offices, and the Company
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 Real Property and the plans and specifications for development of
the Hotel. At any time during the Review Period, Buyer may, in its sole and
absolute discretion, elect not to proceed with the purchase of the Property for
any reason whatsoever by giving written notice thereof to the Company, in which
event: (i) the Initial 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, (ii) all materials supplied by the
Company to Buyer shall be returned promptly to the Company, and (iii) the
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. Upon expiration of the Review Period, Buyer may not
terminate this Contract and receive a refund of the Earnest Money Deposit for
any reason except the failure of any of the conditions set forth in Section
9.1.

          Buyer
acknowledges and agrees that certain of the items requested to be delivered to
Buyer in this Section 3.1 have been delivered to and received by Buyer.
The Company agrees to cooperate with Buyer and to provide any documents or
instruments described herein which have not been delivered by the Company for
Buyer’s due diligence and review.

11

          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 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 advance (not less than 24 hours) notice to the
Company unless otherwise agreed to by Buyer and the Company (the “Due
Diligence Examination”). The Company shall have the right to have its
representative present during Buyer’s physical inspections of the Property,
provided that failure of the Company 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 completion or operation of the
Property. Buyer may not conduct a Phase II environmental site assessment or any
other invasive environmental procedure without the prior written consent of the
Company.

          3.3          Restoration
and Indemnity. 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. Buyer
further hereby indemnifies and holds the Company and the Interest Owners
harmless from and against any damage, personal injury or death caused by or
arising from any action or omission by Buyer, its agents or employees in the
examination and study of the Property.

ARTICLE IV

SURVEY AND TITLE APPROVAL

          4.1          Survey.
The Company and the Interest Owners, at the Interest Owners’ sole cost and
expense, prior to the execution hereof have delivered to Buyer, true, correct
and complete copies of the most recent survey of the Real Property. In the
event that an update of the survey or a new survey (such updated or new survey
being referred to as the “Survey”) are desired by Buyer, then Buyer
shall be responsible for all costs related thereto.

          4.2          Title.
The Company, at the Interest Owners’ sole cost and expense, prior to the
execution hereof have delivered to Buyer, within two (2) Business Days after
the execution in full of this Contract, the Company’s existing title insurance
policy, including copies of all documents referred to therein, for the Real
Property. Buyer’s obligations under this Contract are conditioned upon Buyer
being able to obtain (i) a Commitment for Title Insurance (the “Title
Commitment”) issued by Chicago Title Company, 5501 LBJ Freeway, Ste. 200,
Dallas, Texas 75240, Attention: Debby Moore (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 Property
Liens and pursuant to which the Title Company agrees to issue at Closing an
Owner’s Policy of Title Insurance on the most recent form of ALTA (where
available) owner’s policy 

12

available in
the state in which the Land is located, with extended coverage and, to the
extent applicable and available in such state, comprehensive, access, single
tax parcel, contiguity, Fairway 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, plats, surveys and
Property Liens affecting the Real Property. Buyer shall promptly provide the
Company with a copy of the Title Commitment issued by the Title Company.

          4.3          Survey
or Title Objections. If Buyer discovers any title or survey matter which is
objectionable to Buyer, Buyer may provide the Company and the Interest Owners
with written notice of its objection to same within fifteen (15) Business Days
after Buyer’s receipt of both the Survey and the Title Commitment, together
with copies of all exceptions noted therein (the “Title Review Period”).
If Buyer fails to so object in writing to any such matter set forth in the
Survey or Title Commitment, it shall be conclusively assumed that Buyer has
approved same, except as otherwise provided in Section 9.1(g). If Buyer
disapproves any condition of title, survey or other matters by written
objection to the Company and the Interest Owners on or before the expiration of
the Title Review Period, the Company and the Interest Owners shall elect either
to attempt to cure, at the Interest Owners’ sole cost and expense, or not cure
any such item by written notice sent to Buyer within five (5) days after
receipt by the Company and the Interest Owners of notice from Buyer, and if the
Company and the Interest Owners commit in writing to attempt to cure any such
item, the Company and the Interest Owners shall be given until the Closing Date
to cure any such defect. In the event the Company and the Interest Owners shall
fail to cure a defect which they have committed in writing to cure prior to
Closing, or if a new title defect arises after the date of Buyer’s Title
Commitment or Survey, as applicable, but prior to Closing, then Buyer may
elect, in Buyer’s sole and absolute discretion: (i) to waive such objection and
proceed to Closing, or (ii) to terminate this Contract, if the Interest Owners
are unable to cure said defect prior to Closing and receive a return of the
Earnest Money Deposit, and any interest thereon. The items shown on the Survey
or the Title Commitment or which are apparent by physical inspection of the
Property and which are not objected to by Buyer as set forth above (other than
(x) exceptions and title defects arising after the Title Review Period, (y)
those standard exceptions which are ordinarily and customarily omitted in the
state in which the Hotel is located, so long as the Company and/or the Interest
Owners, as the case may be, provide, at the Interest Owners’ sole cost and
expense, the appropriate owner’s affidavit, gap indemnity or other
documentation reasonably required by the Title Company for such omission, and
(z) as provided in Section 9.1(h)) are hereinafter referred to as the “Permitted
Exceptions.” In no event shall Permitted Exceptions include mortgages or
other documents evidencing or securing indebtedness or any mechanics’ or
materialmen’s lens 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 the Interest Owners, at the Interest Owners’ sole cost and
expense, and released at Closing. 

ARTICLE V

MANAGEMENT AGREEMENT AND FRANCHISE AGREEMENT

          The
Company has entered into the Existing Management Agreement and the Existing
Franchise Agreement for the operation and management of the Hotel. At the
Closing, subject to the approval of the Franchisor, (i) the Company and the
Existing Manager shall terminate the

13

Existing
Management Agreement, (ii) the Company and the Franchisor shall terminate the
Existing Franchise Agreement, (iii) the Company and the Manager shall enter into
the New Management Agreement and (iv) the Company and the Franchisor shall
enter into the New Franchise Agreement. The Interest Owners shall be solely
responsible for all claims and liabilities arising under the Existing
Management Agreement and the Existing Franchise Agreement, whether accruing
before or after the Closing. The Company and the Interest Owners shall obtain
the Existing Manager’s consent to the termination of the Existing Management
Agreement, and the Company and the Interest Owners shall cause the Manager to
enter into the New Management Agreement. Before the Closing, the Company and
Buyer shall request the Franchisor to approve the transfer of the Interests to
Buyer, the termination of the Existing Management Agreement, the execution of the
New Management Agreement and the execution of the New Franchise Agreement. The
Company and the Interest Owners shall use their best efforts to promptly
provide all information required by the Franchisor in connection with the
foregoing request for approval, and the Company, the Interest Owners and Buyer
shall diligently pursue obtaining the Franchisor’s approval. The Interest
Owners understand that Buyer expects the New Franchise Agreement to be upon
financial terms and conditions no less favorable to the Company than the
Existing Franchise Agreement. 

ARTICLE VI

BROKERS

          Each
Interest Owner, the Company and Buyer 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. Each Interest Owner agrees to save
and hold harmless Buyer from any and all losses, damages, liabilities, costs
and expenses (including, without limitation, attorneys’ fees) involving claims
made by any agent, broker, or other person by or through the acts of any
Interest Owner or the Company, as the case may be, in connection with the
Contemplated Transactions. Buyer agrees to save and hold harmless each Interest
Owner and the Company from any and all losses, damages, liabilities, costs and
expenses (including, without limitation, attorneys’ fees) involving claims made
by any agent, broker, or other person by or through the acts of Buyer in
connection with the Contemplated Transactions.

ARTICLE VII

REPRESENTATIONS, WARRANTIES AND COVENANTS

          7.1          Representations,
Warranties and Covenants of Interest Owners. Each Interest Owner
represents, warrants and covenants to Buyer as follows:

                    
    (a)          Organization
and Existence of the Company. The Company is a limited liability company or
corporation duly organized or incorporated and validly existing under the laws
of the state indicated in Item 2(b) of Schedule 1, and the
Company has the full power and authority to own all of its property and assets
and to carry on its business as presently conducted. The Company is not
required to qualify to transact business in any jurisdiction other than the
state is which it is organized or incorporated. The copies of the Company’s
Organizational Documents that the Company has delivered to Buyer or delivers to
Buyer during the Review Period are or will be true, correct and complete copies
of the Organizational Documents of the Company as in effect as of the date
hereof and have not been amended or supplemented further. 

14

The Company is
not a general or limited partner of, or a party to any joint venture with, any
other entity and does not, directly or indirectly, own any interest in any
other Person.

                    
    (b)           Authorization
and Validity. Each Interest Owner and the Company have the power and
authority to execute and deliver this Contract and the other agreements
contemplated hereby and to consummate the Contemplated Transactions. This
Contract has been duly executed and delivered by and constitutes a valid and
binding agreement of the Company, each Interest Owner, enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency or
similar laws. The execution and delivery hereof by the Company and each
Interest Owner and the consummation by the Company and each Interest Owner of
such transactions have been fully authorized by the Company and each Interest
Owner.

                    
    (c)          Ownership
of Interests. The Interest Owners are the owners of all of the Interests,
each owning the percentage set forth in Item 2(a) of Schedule 1,
and have good and valid title thereto, with no restrictions on, or any
agreements with respect to, voting rights or any other incidents of ownership
thereof, except as set forth in the Company’s Organizational Documents. The
Interests represent one hundred percent (100%) of the record and beneficial
interests in the Company and all other right, title and interest in and to the
equity of the Company. The Interest Owners have the absolute right to sell and
transfer all of the Interests to Buyer free and clear of all Interest Liens.
Each Interest Owner acquired its Interest in compliance with all applicable
laws. On consummation of the Contemplated Transactions, in accordance with the
terms hereof, Buyer will acquire good and marketable title to the Interests
free and clear of all Interest Liens.

                    
    (d)          Related
Party Transactions. No Interest Owner has any direct or indirect interest
in any property used by, or relating to, the Company, except through the
ownership of its Interest.

                    
    (e)          Non-Contravention.
The execution and delivery by each Interest Owner and the Company of this
Contract and the other agreements contemplated hereby do not, and the
consummation by each Interest Owner and the Company of the transactions
contemplated hereby or thereby will not (i) violate any provision of the any
Organizational Documents of any Interest Owner or the Company, (ii) violate, or
result with the passage of time in a violation of, any provision of, or result
in the acceleration of or entitle any party to accelerate any obligation under,
or result in the creation or imposition of any Property Lien upon, any of the
property of any Interest Owner or the Company pursuant to any provision of any
mortgage, deed of trust, lease, agreement, license or instrument to which any
Interest Owner or the Company is a party or to which any of them is subject
(collectively, the “Restrictive Documents”) except to the extent
consents, waivers, satisfactions or terminations therefor will be delivered on
or before Closing, (iii) constitute an event permitting termination of any
mortgage, deed of trust, lease, agreement, license or instrument to which any
Interest Owner or the Company is a party, except for those Restrictive
Documents which represent obligations to be satisfied or for which consents to
assignment or waivers of termination will be delivered on or before Closing or
(iv) violate any judgment, order, writ, injunction, decree, regulation or rule
of any court or governmental authority applicable to any Interest Owner or the
Company or the assets of any of them.

15

                    (f)          Consents
and Approvals. No consent, approval, notification, authorization or order
of, or declaration, filing or registration with, any governmental agency, is
required to be obtained or made by the Company or any Interest Owner in
connection with the consummation by the Company and each Interest Owner of the
Contemplated Transactions.

                    (g)         No
Undisclosed Liabilities. The Company does not have, as of the date of this
Contract, any debts, liabilities or obligations, whether accrued, absolute,
contingent or otherwise, that are material to the financial condition, assets,
liabilities, income or prospects of the business of the Company except as
disclosed in this Contract or otherwise disclosed in writing to Buyer on or
before the date of this Contract.

                    (h)         Litigation.
There are no actions, suits, claims, investigations or proceedings (legal,
administrative or arbitrative) pending or, to the knowledge of any of the
Interest Owners or the Company, threatened against any of the Interest Owners
or the Company, whether at law or in equity and whether civil or criminal in
nature, before or by any federal, state, municipal or other court, arbitrator,
governmental department, commission, agency or instrumentality, domestic or
foreign. There are no judgments, decrees or orders of any such court,
arbitrator, governmental department, commission, agency or instrumentality
outstanding against any of the Interest Owners or the Company, (i) which relate
to the Company or any Interest Owner and which have or could reasonably be expected
to have an adverse effect on the financial condition, assets, liabilities,
income or prospects of the business of the Company, or (ii) which seek
specifically to prohibit, restrict or delay consummation of the transactions
contemplated hereby or fulfillment of any of the conditions of this Contract.

                    (i)          Title
to Properties. The Company has good and marketable title to all of the
Property (whether real, fee or leasehold, personal or mixed, tangible or
intangible) and enjoys quiet possession of all such properties and interests,
free and clear of all mortgages and other encumbrances (except for Seller Liens
to be paid off at Closing, Permitted Exceptions and current taxes and liens
which arise by operation of law with respect to obligations not yet due and
payable). The Property includes all real estate, intangible assets and physical
assets of the Company and all of the property reasonably required to own and
operate the Hotel as it is contemplated to be operated and in accordance with
the Existing Franchise Agreement.

                    (j)          Condemnation
and Special Assessments. There are no pending or, to the knowledge of the
Company or any Interest Owner, threatened proceedings for condemnation or the
exercise of the right of eminent domain as to any part of the Real Property or
for limiting or denying any right of access thereto. None of the Interest
Owners or the Company has any knowledge of any special taxes or assessments
relating to any part of the Real Property or any planned public improvements
that may result in a special assessment against any part of the Real Property.

                    (k)         Lease
of Real and Personal Property. Schedule 7.1(k) sets forth a list of
(a) all leases pursuant to which the Company leases, as lessee, real property
(the “Leased Premises”), (b) all leases pursuant to which the Company
leases, as lessor, real property, (c) all leases pursuant to which the Company
leases, as lessee, personal property and (d) all prepaid expenses, rents and
security deposits paid by or to the Company with respect to any of the
foregoing leases. The Company has performed all material obligations required
to be performed 

16

by it to date
under all leases set forth in Schedule 7.1(k) and is not in default nor,
to the best knowledge of the Company and any Interest Owner, alleged to be in
default in any material respect under any thereof. To the best knowledge of
[the Company and any Interest Owner, there exists no default, or any event
which upon the giving of notice or passage of time would give rise to any
default, in the performance of any obligation to be performed by any other
party to any of such leases. Immediately after the Closing, Buyer will possess
all right, title and interest of each Interest Owner and the Company will
continue to possess its right, title and interest, as the case may be, in and
to the leases set forth in Schedule 7.1(k). 

                    (l)          Trade
Names, Trade Marks, Etc. Subject to the terms of the Existing Franchise
Agreement with respect to trade names, trademarks and service marks licensed
thereunder, the Company owns or has the right to use all trade marks, trade
names and/or business names used or useful in the business of the Company (the
“Company Intellectual Property”). There are no claims or proceedings
pending or, to the knowledge of the Interest Owners or the Company, threatened
against the Company asserting that its use of any Company Intellectual Property
infringes the rights of any other person. None of the Interest Owners or the
Company has knowledge of any use by the Company that may, with notice or
passage of time, give rise to such a claim. The Company has not licensed or
otherwise assigned any Company Intellectual Property to any third party, and
there are no existing infringing uses of the Company Intellectual Property by
any third parties. Other than the terms of the Existing Franchise Agreement,
there are no restrictions or other obligations of the Company with respect to
the ownership or use of the Company Intellectual Property. The trade marks,
trade names, service marks and/or business names described on Schedule
7.1(l) include all of the Company Intellectual Property.

                    (m)        Governmental
Authorization and Compliance with Laws. Since the Company was organized,
its business has been and is strictly limited to acquisition of the Land and
construction and equipping of the Hotel. In addition, the Company has been
operated at all times in compliance with all laws, orders, regulations,
policies and guidelines of all governmental entities (including, without
limitation, those relating to building codes and zoning, environmental and
safety matters), (ii) the Company has all permits, certificates, licenses,
approvals and other authorizations required in connection with the operation of
its business as now conducted, such licenses, permits and approvals are in full
force and effect, and there is no reason to believe that any such license,
permit or approval will be recalled, and (iii) each Interest Owner and the
Company have complied in all material respects with all applicable laws,
regulations and restrictions relating to the business of the Company.

                    (n)         Taxes.

	
  

 	
  

 
	
  

 	
                 
       (i)          Tax
 Status. At all times during its existence as a limited liability company,
 the Company has been treated as a partnership for Tax purposes or, if the
 Company is a corporation, the Company made an S election under Section 1362
 of the Code and, at the time of making such election and at all times
 thereafter, it qualified as a “small business corporation” within the meaning
 of Section 1361(b) of the Code.

 
	
  

 	
  

 
	
  

 	
                        (ii)          Tax
 Returns. Each Interest Owner and the Company have filed all Tax Returns
 that they were required to file under applicable laws and regulations. All 

 

17

	
  

 	
  

 
	
  

 	
 such Tax
 Returns were correct and complete in all respects and were prepared in
 substantial compliance with all applicable laws and regulations. All Taxes due
 and owing by each Interest Owner and the Company (if any), whether or not
 shown on any Tax Return, have been paid. Neither the Company nor any of the
 Interest Owners currently is the beneficiary of any extension of time within
 which to file any Tax Return. No claim has ever been made by an authority in
 a jurisdiction where Company or any of the Interest Owners does not file Tax
 Returns that Company or any of the Interest Owners is or may be subject to
 taxation by that jurisdiction. There are no liens for Taxes (other than Taxes
 not yet due and payable) upon any of the assets of the Company or upon any
 Interest of any of the Interest Owners.

 
	
  

 	
  

 
	
  

 	
                     (iii)          Withholding.
 The Company withheld and paid all Taxes required to have been withheld and
 paid in connection with any amounts paid or owing to any employee,
 independent contractor, creditor, stockholder, or other third party

 
	
  

 	
  

 
	
  

 	
                     (iv)          No
 Expected Assessments. No Interest Owner or manager or officer (or employee
 responsible for Tax matters) of the Company expects any authority to assess
 any additional Taxes for any period for which Tax Returns have been filed. No
 foreign, federal, state, or local tax audits or administrative or judicial
 Tax proceedings are pending or being conducted with respect to the Company or
 any of the Interest Owners with respect to any item of income, gain, loss,
 deduction, or credit from the Company. Neither the Company nor any of the
 Interest Owners has received from any foreign, federal, state, or local
 taxing authority (including jurisdictions where the Company or the Interest
 Owners have not filed Tax Returns) any (i) notice indicating an intent to
 open an audit or other review, (ii) request for information related to Tax
 matters, or (iii) notice of deficiency or proposed adjustment for any amount
 of Tax proposed, asserted, or assessed by any taxing authority against the
 Company or any of the Interest Owners with respect to any item of income,
 gain, loss, deduction, or credit from the Company. Schedule 7.1(n)
 attached hereto lists all federal, state, local, and foreign income Tax
 Returns filed with respect to the Company or any Interest Owner for taxable
 periods ended on or after December 31, 2007 indicates those Tax Returns that
 have been audited, and indicates those Tax Returns that currently are the
 subject of audit. The Company has delivered to Buyer correct and complete
 copies of all federal income Tax Returns, examination reports, and statements
 of deficiencies assessed against or agreed to by the Company or the Interest
 Owner filed or received since December 31, 2007; provided, however, that an
 Interest Owner is required to deliver such information only for a Tax Return
 for which there has been a notice of deficiency or proposed adjustment for
 any amount of Tax proposed, asserted, or assessed by any taxing authority
 against the Interest Owner with respect to any item of income, gain, loss,
 deduction, or credit from the Company.

 
	
  

 	
  

 
	
  

 	
                    
 (v)           No
 Extension of Statute of Limitations. Neither the Company nor any of the
 Interest Owners has waived any statute of limitations in respect of Taxes or
 agreed to any extension of time with respect to any Tax assessment or
 deficiency with respect to any item of income, gain, loss, deduction, or
 credit from the Company.

 
	
  

 	
  

 
	
  

 	
                     (vi)          Post
 Closing Inclusion of Income. Neither the Company nor any of the Interest
 Owners will be required to include any item of income in, or exclude any 

 

18

	
  

 	
  

 	
  

 
	
  

 	
 item of
 deduction from, taxable income for any taxable period (or portion thereof)
 ending after the Closing Date as a result of any:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
               
(A)          change
 in method of accounting for a taxable period ending on or prior to the
 Closing Date;

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
               
 (B)          “closing
 agreement” as described in Code § 7121 (or any corresponding or similar
 provision of state, local, or foreign income Tax law);

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
               (C)          installment
 sale or open transaction disposition made on or prior to the Closing Date; or

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
               (D)          prepaid
 amount received on or prior to the Closing Date.

 

                    (o)          Insurance.
Schedule 7.1(o) is a true and complete list, showing company, type and
amount of coverage, of all insurance policies carried by the Company for the
benefit of the Company or third parties. To the best of the knowledge of the
Interest Owners and the Company, the Company is not in default with respect to
any provision of any of its insurance policies and has not failed to give any
notice or present any claim thereunder in due or timely fashion or as required
by any of such insurance policies which would result in failure to recover in
full under such policies. To the best of the knowledge of the Interest Owners
and the Company, the Company has complied with the insurance requirements of
all leases and other Agreements to which it is a party.

                    (p)          Agreements.
Except (i) as listed on Schedule 7.1(p) and Schedule 7.1(k) and
(ii) for the Franchise Agreement, the Permitted Exceptions and the Seller Liens
to be released at Closing, the Company is not a party to and neither the
Company nor the Property is otherwise bound by any Agreements. No Interest
Owner has any interest in any of the Property other than the interest of a
member or shareholder under the provisions of the Company’s Organizational
Documents. All Agreements to which the Company is a party or by which it or any
of its assets or properties are bound or affected are in full force and effect
and binding obligations of the parties thereto. No event or condition has
occurred or exists, or is alleged by any of the other parties thereto to have
occurred or existed, which constitutes, or with lapse of time or giving of
notice or both might constitute, default or a basis for acceleration of any
obligations, force majeure or other claim of excusable delay or non-performance
thereunder or in respect thereof, whether on the part of the Company or any
other party. The Company is not a party to any Agreement or any arrangement
(whether or not in writing) with any of Interest Owners.

                    (q)          Full
Disclosure. To the best knowledge of the Company and the Interest Owners,
no statement contained in any document, certificate or other writing furnished
or to be furnished by the Company or any of the Interest Owners to Buyer
pursuant to the provisions of this Contract contains or shall contain any
untrue statement of a material fact or shall omit to state any material fact
necessary, in the light of the circumstances under which it was made, to make
the statements therein not misleading.

19

                    (r)          FIRPTA.
No Interest Owner is a foreign corporation, foreign partnership, foreign trust
or foreign estate (as those items are defined in the Code and Income Tax
Regulations).

                    (s)          Bankruptcy.
Neither the Company nor any Interest Owner is insolvent or the subject of any
bankruptcy proceeding, receivership proceeding or other insolvency,
dissolution, reorganization or similar proceeding.

                    (t)          Representations
as to the Hotel, Etc. 

	
  

 	
  

 
	
  

 	
               
       
 (i)          
 Property Agreements. There are no, and as of the Closing there shall
 be no, leases, license agreements, leasing agent’s agreements, equipment
 leases, building service agreements, maintenance contracts, suppliers
 contracts, warranty contracts, operating agreements, or other Agreements
 relating to the ownership, occupancy, operation, management or maintenance of
 the Real Property, FF&E, Supplies or Tradenames, (A) to which the Company
 is a party or an assignee, or (B) binding upon the Real Property, except
 for (x) those Service Contracts, Leases, Warranties and FF&E Leases to
 which the Company becomes a party with the approval of Buyer, (y) those which
 Buyer may enter into before the Closing, or (z) those which are disclosed on Schedule
 7.1(k) and Schedule 7.1(p). As of the Closing, any Service
 Contracts, Leases, Warranties and FF&E Leases to which the Company has
 become a party with the approval of Buyer shall be in full force and effect,
 and no default shall have occurred and be continuing thereunder and no
 circumstances shall exist which, with the giving of notice, the lapse of time
 or both, would constitute such a default. No party has, and as of the Closing
 no party shall have, any right or option to acquire the Real Property, the
 Hotel or any portion thereof, or any interest therein or in the Company,
 other than Buyer.

 
	
  

 	
  

 
	
  

 	
                     
  (ii)          
 Pending Claims. To the knowledge of any of the Interest Owners, there
 are not (A) any claims, demands, litigation, proceedings or governmental
 investigations pending or threatened related to the Real Property, (B) any
 special assessments or extraordinary taxes except as set forth in the Title
 Commitment or (C) any pending or threatened condemnation or eminent domain
 proceeding 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
 Property 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 Real Property, or
 other pending, actual or, to the knowledge of the Company or any Interest
 Owner, threatened litigation claims, charges, complaints, petitions or
 unsatisfied orders by or before any administrative agency or court which
 affect the Real Property or might become a Property Lien on the Real Property
 or any portion thereof (collectively, the “Pending Claims”).

 

20

	
  

 	
  

 
	
  

 	
                     (iii)          Environmental.
 With respect to environmental matters, except as otherwise disclosed in the
 environmental reports and documents identified in Exhibit C, (i) to
 the Company’s and each of the Interest Owner’s knowledge, 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, (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, gas-fired maintenance equipment and chlorine
 for the swimming pool to be constructed on the Land, all of which shall be
 stored on the Property in strict accordance with applicable Environmental
 Requirements and shall 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, to the
 knowledge of the Company and each of the Interest Owners, threatened, and (v)
 there are no reports or other documentation regarding the environmental
 condition of the Real Property in the possession of the Company, any Interest
 Owner or their Affiliates, consultants, contractors or agents except for
 those which have been or during the Review Period will be delivered to Buyer.
 Buyer acknowledges that the Property is located in a high humidity belt of
 the southern United States and that mold and mildew are common. The Company
 has treated, and until Closing will treat, the Property for mold and mildew
 as needed in the ordinary course of business to protect the health of guests
 and employees of the Hotel and so as to comply with applicable law. 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, or is otherwise regulated by federal, state and local
 environmental laws (including, without limitation, RCRA, CERCLA, TSCA, HMTA),
 rules, regulations and orders, regulating, relating to or imposing liability
 or standards of conduct concerning any Hazardous Materials or environmental,
 health or safety compliance (collectively, “Environmental Requirements”).
 As used in this Contract: “Release” means spilling, leaking,
 pumping, pouring, emitting, emptying, discharging, injecting, escaping,
 leaching, dumping or disposing.

 
	
  

 	
  

 
	
  

 	
                     (iv)          Title
 and Liens. The Company has good and marketable fee simple absolute title
 to the Real Property (or, if so indicated in Item 4 of Schedule 1,
 leasehold title to the Land pursuant to the ground lease described therein
 and fee simple absolute title to the Improvements during the term of such
 ground lease), subject only to 

 

21

	
  

 	
  

 
	
  

 	
 the
 Permitted Exceptions. Except for the FF&E subject to the FF&E Leases
 and any applicable Permitted Exceptions, the Company has good and marketable
 title to the Personal Property, free and clear of all encumbrances except for
 the Permitted Exceptions, and there are no other encumbrances or other rights
 pending or of which the Company or any Interest Owner has received notice or
 which are otherwise known to the Company or any Interest Owner related to any
 other Personal Property.

 
	
  

 	
  

 
	
  

 	
                     (v)          Utilities.
 All appropriate utilities, including sanitary and storm sewers, water, gas,
 telephone, cable and electricity, are available at the boundaries of the Land
 and the Company is entitled to connect the Hotel thereto, and upon connection
 to the Hotel and payment of all connection or “tap-on”, usage and similar
 fees to be paid by the Interest Owners or the Company, as applicable, such
 utilities shall be sufficient to and available to service the Hotel.

 
	
  

 	
  

 
	
  

 	
                     (vi)          Licenses.
 To the knowledge of the Company and each of the Interest Owners the Real
 Property complies with, and upon construction of the Hotel the Real Property
 shall comply with, all applicable Licenses and Legal Requirements 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 contemplated to be operated. The Company has received, or
 by Closing shall have received, all Licenses required or needed for the
 lawful conduct, occupancy and operation of the business of the Hotel, and
 each License is in full force and effect, and will be received and in full
 force and effect as of the Closing. No Licenses necessary for the lawful
 conduct, occupancy or operation of the business of the Hotel shall require
 any approval of a Governmental Body for transfer of Interests except as set
 forth in Exhibit D.

 
	
  

 	
  

 
	
  

 	
                   
  (vii)         Management
 Agreement and Franchise Agreement. The Company has furnished to Buyer
 true and complete copies of the Existing Management Agreement and the
 Existing Franchise Agreement, which constitute the entire agreement of the
 parties with respect to the subject matter thereof and which have not been
 amended or supplemented in any respect except as provided in Item 5
 and Item 6 of Schedule 1. 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 the Company is a party or which are binding upon the Property, except
 for the Existing Management Agreement and the Existing Franchise Agreement.
 The Existing Management Agreement and the Existing Franchise Agreement are in
 full force and effect. No default has occurred and is continuing under the
 Existing Management Agreement or the Existing Franchise Agreement, and no
 circumstances exist which, with the giving of notice, the lapse of time or
 both, would constitute such a default. 

 
	
  

 	
  

 
	
  

 	
                   
  (viii)        Plans
 and Specifications. The plans and specifications for the construction of
 the Hotel that were submitted to Buyer before the execution of this Contract
 (the “Plans and Specifications”) have been approved by the Franchisor
 and have not been modified in any material respect except as approved by the
 Franchisor.

 

22

                   
     (u)          Hart
Scott Rodino Filing. All of the assets owned by or in which the Company or
any of its Affiliates have an interest are hotels or motels, related
improvements such as golf, swimming, tennis, restaurant, health club or parking
facilities (but excluding ski facilities), and assets incidental to the
ownership and operation of hotels or motels (e.g., prepaid taxes or insurance,
management contracts and licenses to use trademarks associated with the hotel
or motel being acquired), as contemplated by the regulations promulgated under
the Hart Scott Rodino Act, except that the Company and its Affiliates each may
own other assets but the aggregate value thereof is less than $50,000,000.

                   
     (v)          Employees.
Except as may be provided in the Supplemental Provisions, the Company has never
had, does not currently have, and shall not have on the Closing Date, (i) any
employees, (ii) any employee benefit plans or (iii) any other trusts, escrows,
agreements, liabilities or other arrangements related to any type of employee
benefits or plans, whether for any past, existing or future employees, members,
stockholders, officers, directors or other party affiliated in any way with the
Company.

          7.2          Representations,
warranties and covenants of Buyer. Buyer represents, warrants and
covenants: 

                   
     (a)          Authority.
Buyer is a corporation duly incorporated, 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 consents of the Board of Directors of
Buyer and is fully authorized 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, subject to the effect of bankruptcy and other laws applicable to
creditors generally and to equitable principles.

                   
     (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 one year (i.e., 12 months) expiring on the first anniversary date of the
Closing; provided, however, that the representations and warranties set forth
in Section 7.1(n) shall survive Closing for a period ending on the later
of (i) three (3) years following the date on which the Company files its Tax
Return for the tax period ending December 31st of the year of Closing or (ii)
the expiration of any applicable statute of limitations that may be extended.

23

ARTICLE VIII

ADDITIONAL COVENANTS

          8.1          Subsequent
Developments. After the date of this Contract and until the Closing Date,
the Company shall keep Buyer fully informed of all subsequent developments (“Subsequent
Developments”) which would cause any of the representations or warranties
of the Company or the Interest Owners contained in this Contract to be no
longer accurate in any material respect.

          8.2          Obligations
of the Company and the Interest Owners Before Closing. From and after the
date hereof the Company and/or the Interest Owners, as applicable, shall:

                          (a)          Continue
to maintain the Property generally in accordance with past practices and
pursuant to and in compliance with the Existing Management Agreement and the
Existing Franchise Agreement, including, without limitation, (i) accepting
booking contracts for the use of the Hotel’s facilities and retaining such
bookings in accordance with the terms of the Existing Franchise Agreement, (ii)
maintaining the current level of advertising and other promotional activities
for the Hotel’s facilities, (iii) maintaining the present level of insurance
with respect to the Property in full force and effect until the Closing Date
and (iv) remaining in compliance in all material respects with all current
Licenses;

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

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

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

                         (e)          Pay
or cause to be paid all taxes, assessments and other impositions levied or
assessed on the Property or any part thereof prior to the delinquency date, and
comply with all Legal Requirements relating to the Property;

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

                         (g)          Not
allow any License currently in existence with respect to the construction,
operation, use, occupancy or maintenance of the Property to expire, be canceled
or otherwise terminated;

24

                         (h)          Not
incur any indebtedness that will not be paid on or prior to the Closing Date;
and 

                         (i)          Not
take any other action other than in the ordinary course of business consistent
with past practice.

          The
Company shall not, and the Interest Owners shall not permit the Company to,
without first obtaining the written approval of Buyer, which approval shall not
be unreasonably withheld, enter into any FF&E Leases, Service Contracts,
Leases or other contracts or agreements related to the Hotel other than those
leases and agreements listed on Schedule 7.1(k) and Schedule 7.1(p),
or extend any existing such agreements, unless such agreements (x) can be
terminated, without penalty, upon thirty (30) days’ prior notice or (y) will
expire prior to the Closing Date.

          8.3          Third
Party Consents. Prior to the Closing Date, Interest Owners, at their
expense unless otherwise provided in Section 11.2, shall obtain any and
all other third party consents and approvals (x) required in order to transfer
all of the Interests to Buyer or (y) which, if not obtained, would materially
adversely affect the operation of the Hotel or the value of the Company,
including, without limitation, all consents and approvals referred to on Exhibit
D and (iii) use best efforts to obtain all other third party consents and
approvals (all of such consents and approvals in (i) and (ii) above being
referred to collectively as, the “Third Party Consents”).

          8.4          Estoppel
Certificates. It shall be a condition to Buyer’s obligations under this
Contract that the Company obtain, and the Interest Owners shall cause the
Company to obtain, from (i) each tenant under any Lease affecting the Hotel
(but not from current or prospective occupants of hotel rooms and suites within
the Hotel) and (ii) each lessor under each 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 the Company during the Review
Period, and deliver to Buyer not less than five (5) days before the Closing.

          8.5          Access
to Financial Information. Buyer’s representatives shall have access to, and
the Company and the Interest Owners and their Affiliates shall cooperate with
Buyer and furnish upon request, all financial and other information relating to
the Property 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. Each Interest Owner shall also provide to Buyer’s representative a
signed representation letter in form and substance reasonably acceptable to
Buyer sufficient to enable an independent public accountant to render an
opinion on the financial statements related to the Property. The provisions of
this Section shall survive Closing or termination of this Contract.

          8.6          Bulk
Sales. The Interest Owners, at their expense, 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. 

25

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

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

	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
                           (iii)        any
 liability or obligation of the Company assumed or incurred prior to the
 Closing Date; and

 
	
  

 	
  

 
	
  

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

 

          The
indemnification under this Section 8.7(a) shall terminate and be of no
further force and effect, as to the matters described in clauses (i) through
(iv) above, on and after the first anniversary date of the Closing; provided,
however, that (A) to the extent any of the representations and warranties
survive for a longer period pursuant to Section 7.3, the foregoing
indemnification relating to such representations and warranties shall terminate
and be of no further force and effect on and after the expiration of such
longer period and (B) the indemnification shall not terminate as to claims
asserted in writing by Buyer or the Company before such first anniversary date
or longer period, as the case may be. Any other indemnification by Interest
Owners under this Agreement also shall terminate and be of further force and
effect on and after the first anniversary date of the Closing, except as to
claims asserted in writing by Buyer or the Company before such anniversary
date.

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

	
  

 	
  

 
	
  

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

 

26

	
  

 	
  

 
	
  

 	
                             (ii)         the
 conduct and operation by the Company of its business at the Hotel after the
 Closing; and 

 
	
  

 	
  

 
	
  

 	
                             (iii)        the
 failure of the Company after the Closing to pay any rent or otherwise comply with
 its obligations under the ground lease, if any, identified in Item 4
 of Schedule 1.

 

          The
indemnification under this Section 8.7(b) shall terminate and be of no
further force and effect on and after the first anniversary date of the Closing
except as to claims asserted in writing by an Interest Owner before such date.

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

	
  

 	
  

 
	
  

 	
                             (i)          The
 party seeking indemnification (the “Indemnified Party”) shall give
 prompt written notice to the party or parties from which it is seeking
 indemnification (the “Indemnifying Party”) of any assertion of
 liability by a third party which might give rise to a claim for
 indemnification based on the foregoing provisions of this Section 8.7,
 which notice shall state the nature and basis of the assertion and the amount
 thereof, to the extent known; provided, however, that no delay on the part of
 the Indemnified Party in giving notice shall relieve the Indemnifying Party
 of any obligation to indemnify unless (and then solely to the extent that)
 the Indemnifying Party is prejudiced by such delay.

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
                             (iii)        Notwithstanding
 the provisions of the previous subsection of this Contract, until the
 Indemnifying Party shall have assumed the defense of the Legal Action, the
 defense shall be handled by the Indemnified Party. Furthermore, (x) if the
 Indemnified Party shall have reasonably concluded that there are likely to be
 defenses 

 

27

	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 

             8.8             Limitations
on Liability of Interest Owners. Notwithstanding anything contained herein
to the contrary the liability of each Interest Owner with respect to its
representations, warranties, covenants and indemnifications contained in this
Contract shall be limited to a percentage of the total liability of the
Interest Owners with respect thereto equal to such Interest Owner’s percentage
interest in the Company.

             8.9             Tax
Matters. Without the prior written consent of Buyer, neither the Company nor
any of the Interest Owners shall make or change any election, change an annual
accounting period, adopt or change any accounting method, file any amended Tax
Return, enter into any closing agreement, settle any Tax claim or assessment
relating to the Company, surrender any right to claim a refund of Taxes,
consent to any extension or waiver of the limitation period applicable to any
Tax claim or assessment relating to the Company, or take any other similar
action relating to the filing of any Tax Return or the payment of any Tax, if
such election, adoption, change, amendment, agreement, settlement, surrender,
consent or other action would

28

have the
effect of increasing the Tax liability of the Company for any period ending
after the Closing Date or decreasing any Tax attribute of the Company existing
on the Closing Date. 

          8.10          Construction
of the Hotel. Subject to the terms and conditions of this Contract, the
Company shall, and the Interest Owners shall cause the Company to, (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 and with
all Legal Requirements and (d) in accordance with all requirements of the
Existing Franchise Agreement and (ii) cause the Hotel to be fully equipped with
the FF&E and otherwise fully furnished and stocked with merchandise,
supplies, inventory and other Personal Property as required by the Existing
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 the Interest Owners, 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.

          8.11          Commencement
of Construction; Substantial Completion. The Company 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. The
Company 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 the date set forth in Item 10 of Schedule 1
attached hereto, subject only to delays caused by Force Majeure. The Company
shall promptly notify Buyer of each event or condition of Force Majeure and the
anticipated delay caused thereby.

          8.12          (Intentionally
Omitted)

          8.13          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 the Interest Owners 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 the Interest
Owners 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.

          8.14          Punch
List. Upon notification from the Contractor that the Hotel is Substantially
Completed and ready for inspection, the Company shall prepare a “punch list”
with the assistance of a representative of Buyer and the Franchisor. The
Company and the Interest Owners 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 Interest Owners with the
approval of Buyer, such approval not to be unreasonably withheld, plus fifty
percent (50%) of 

29

such costs, shall be reserved by Buyer from the Purchase Price and
shall be disbursed to the Interest Owners only upon Buyer’s reasonable
determination that all of the Punch List Items have been satisfactorily
completed. The Interest Owners shall correct or complete all Punch List Items,
or cause the same to be corrected or completed, at their expense, with all
diligence and in any event within sixty (60) days after Substantial Completion
of the Hotel.

          8.15          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”). The Company and
the Interest Owners shall cooperate in good faith with the Pre-Opening Program
and shall provide the Franchisor and Buyer reasonable access to the Property 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 the Interest Owners or
the Company in completing the Hotel. The Interest Owners 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”). The Interest Owners shall also fund all reserve accounts and other
accounts required under the Franchise Agreement, as applicable, to be funded
before the Effective Time. Notwithstanding the foregoing, at the Closing, the
Interest Owners shall receive a credit in an amount equal to all such accounts
funded by the Interest Owners before the Closing Date, provided that (i) such
accounts were required by the Franchisor or otherwise approved by Buyer (which
approval shall not be unreasonably withheld), and (ii) the Interest Owners
shall not receive a credit for any account to the extent the same is intended
to cover Pre-Opening Costs.

          8.16          Construction
Warranty. At the Closing, the Company shall be the named beneficiary of all
construction warranties with respect to the Hotel, 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 E (the “Construction Warranty”).

          8.17          Contingent
Reserve for Claims. Contingent reserves shall be established for the
purposes and in the amounts specified below:

                           (a)          Notwithstanding
anything contained in this Contract to the contrary, at the Closing, Buyer
shall be entitled to hold in reserve from the Purchase Price the sum of One
Hundred Thousand Dollars ($100,000.00) (the “Post-Closing Reserve”) to
pay for any Post-Closing Claims (as hereinafter defined) under this Contract,
as such sum may be reduced as hereinafter provided. For purposes of this
Section 8.17, “Post-Closing Claims” shall mean any post-Closing claim by
Buyer under this Contract, including (i) all claims under Section 8.7(a)
hereof, (ii) all adjustments under Article XII thereof and (iii) all other
obligations of the Interest Owners thereunder that survive Closing, but only if
such claim is asserted by Buyer within six (6) months after the Closing under
this Purchase Contract (the “Post-Closing Claim Period”). Except to the
extent any Post-Closing Claims remain outstanding, any funds remaining in the
Post-Closing Reserve shall be paid to the Interest Owners upon expiration of
the Post-Closing Claim Period.

30

                          (b)          Nothing
contained in this Section 8.17 shall limit the personal liability of the
Interest Owners for Post-Closing Claims under this Purchase Contract to the
extent the same may exceed in the aggregate the Post-Closing Reserve or to the
extent the same may be asserted to Buyer after any applicable Post-Closing
Claim Period, subject to any other limitations and conditions set forth in this
Contract.

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. Notwithstanding this Section
9.1 or any other provision of this Contract which may be otherwise
construed to the contrary.

                          (a)          All
representations and warranties of the Company and each Interest Owner 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 listed in Section 10.2.

                         (c)          The
Company and each Interest Owner 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 the Company and each Interest Owner, as and when required
hereunder.

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

                         (e)          The
Existing Management Agreement and the Existing Franchise Agreement shall have
been terminated. The Manager and the Company shall have entered into the New
Management Agreement. The Franchisor and the Company shall have entered into
the New Franchise Agreement on terms and conditions acceptable to Buyer in its
sole discretion and in any event upon financial terms that are no less
favorable than the Existing Franchise Agreement.

                         (f)          The
Hotel shall be Substantially Completed.

                         (g)          Buyer
shall have obtained an as-built plat of survey of the Property as completed,
dated within 30 days of the Closing Date and prepared in compliance with the
then

31

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 and adversely affect the
use, operation or value of the Property.

                         (h)          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          Interest
Owners’ Conditions for Closing. Unless otherwise waived in writing, and
without prejudice to the Interest Owners’ right to cancel this Contract during
the Review Period, the duties and obligations of the Interest Owners 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 the Interest Owners, the Interest Owners
shall have the right at their option to declare this Contract terminated and
null and void in which case (except for a failure of (c) below) the remaining
Earnest Money Deposit and any interest thereon shall be immediately returned to
Buyer or to compel specific performance as set forth in Section 14.1
below. In the event this Contract is terminated, 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)          The
Interest Owners shall have received all of the money, instruments and
conveyances listed in Section 10.3.

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

                         (d)          Buyer
shall have received the consents of the Franchisor to the termination of the
Existing Management Agreement and the Existing Franchise Agreement.

ARTICLE X

CLOSING AND CONVEYANCE

          10.1         Closing.
Unless otherwise agreed by Buyer and the Interest Owners, the Closing on the
Property shall occur on the date on which the Hotel opens for business to the
public in 

32

accordance
with the Franchise Agreement, or as soon as practicable thereafter, but in no
event later than fifteen (15) Business Days after Substantial Completion of the
Hotel, provided that all conditions to Closing hereunder have been satisfied.
Buyer will provide Interest Owners at least five (5) days prior written notice
of the Closing Date selected by Buyer. The date on which the Closing is to
occur as provided in this Section 10.1, or such other date as may be agreed
upon by Buyer and the Interest Owners, 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 the Interest Owners. 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          Interest
Owners’ Deliveries. At Closing, the Interest Owners or the Company, as
applicable, shall deliver to Buyer the following, and, as appropriate, all
instruments shall be properly executed and conveyance instruments shall 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 the Interest Owners prior to such Closing).

                           (a)          An
assignment or assignments duly executed and acknowledged transferring to Buyer
all of the Interests, free and clear of Interest Liens, in form and substance
acceptable to Buyer; 

                           (b)          Resignations
of all officers, managers, directors and other agents of the Company;

                           (c)          The
original Organizational Documents of the Company, including the articles of
organization or articles of incorporation certified by the appropriate official
of the state in which the Company is organized or incorporated, and a
certificate issued by such official that the Company is in valid existence and
good standing as of the Closing Date;

                           (d)          Certified
copies of resolutions and/or other evidence reasonably satisfactory to Buyer
that the person or persons executing the closing documents on behalf of the
Company and the Interest Owners have full right, power and authority to do so,
along with a certificate of good standing of each Interest Owner that is an
entity from the state in which Interest Owner is organized or incorporated;

                           (e)          To
the extent not previously delivered to and in the possession of Buyer, all
Contracts, Plans and Specs, all Warranties and all keys for the Hotel (which
keys shall be properly tagged for identification);

                           (f)          A
closing statement to evidence the parties’ agreement regarding the allocations,
pro-rations and hold-backs relating to the Property, the payment of closing
costs as allocated hereunder, and any resulting adjustment of the Purchase
Price;

                           (g)         Evidence
satisfactory to Buyer of the termination of the Existing Management Agreement
and the Existing Franchise Agreement and execution and delivery by the Manager
of the New Management Agreement;

33

                           (h)          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 for issuance of an
Owner’s Policy of Title Insurance to the Company insuring good and marketable
fee simple absolute title (or leasehold title if so identified in Item 4
of Schedule 1) to the Real Property constituting part of the Property,
subject only to the Permitted Exceptions in the amount of the Purchase Price,
together with an nonimputation endorsement; and

                           (i)          Such
other instruments as are contemplated by this Contract to be executed or
delivered by the Company or any Interest Owner, or reasonably required by Buyer
or the Title Company, or customarily executed in the jurisdiction in which the
Hotel is located, to effectuate the assignment of all of the Interests to Buyer
and the other Contemplated Transactions, with the effect that, after the
Closing, Buyer will have succeeded to all of the rights, titles, and interests
in the Company and the Company will own good and marketable fee simple title to
the Land and the Hotel in accordance with this Contract.

          10.3          Buyer’s
Deliveries. On or prior to the Closing Date, Buyer shall pay the Interest
Owners the Purchase Price, as adjusted pursuant to this Contract, and shall
deliver or cause to be delivered to the Interest Owners the following
agreements, documents and other items, which shall be in form and substance
reasonably satisfactory to the Interest Owners:

                           (a)          a
closing statement to evidence the parties’ agreement regarding the allocations,
pro-rations and hold-backs relating to the Property, the payment of closing
costs as allocated hereunder, and any resulting adjustment of the Purchase
Price; and

                           (b)          such
additional documents as might be reasonably requested by the Interest Owners to
evidence Buyer’s authority to consummate the purchase of the Interests from the
Interest Owners.

          10.4          Tax
Matters. The following provisions shall govern the allocation of
responsibility as between Buyer and the Interest Owners for certain tax matters
following the Closing Date:

                           (a)
Tax Indemnification. Each of the Interest Owners shall
indemnify Buyer, and hold it harmless from and against (without duplication),
any loss, claim, liability, expense, or other damage attributable to (i) all
Taxes (or the non-payment thereof) of the Company for all taxable periods
ending on or before the Closing Date and the portion through the end of the
Closing Date for any taxable period that includes (but does not end on) the
Closing Date (“Pre-Closing Tax Period”), and (ii) any and all Taxes of any
person (other than the Company) imposed on the Company as a transferee or
successor, by contract or pursuant to any law, rule, or regulation, which Taxes
relate to an event or transaction occurring before the Closing. 

                           (b)
Straddle Period. In the case of any taxable period that includes (but
does not end on) the Closing Date (a “Straddle Period”), the amount of any
Taxes based on or measured by income or receipts of the Company for the
Pre-Closing Tax Period shall be determined based on an interim closing of the
books as of the close of business on the Closing Date (and for such purpose,
the taxable period of any partnership or other pass-through entity in which the

34

Company holds
a beneficial interest shall be deemed to terminate at such time) and the amount
of other Taxes of the Company for a Straddle Period that relates to the
Pre-Closing Tax Period shall be deemed to be the amount of such Tax for the
entire taxable period multiplied by a fraction the numerator of which is the
number of days in the taxable period ending on the Closing Date and the
denominator of which is the number of days in such Straddle Period.

                       (c)
Responsibility for Filing Tax Returns. Buyer shall prepare or
cause to be prepared and file or cause to be filed all Tax Returns for the
Company that are filed after the Closing Date. Buyer shall permit the Interest
Owners to review and comment on each such Tax Return described in the preceding
sentence prior to filing.

	
  

 	
  

 
	
  

 	
           (d)
 Cooperation on Tax Matters.

 
	
  

 	
  

 
	
  

 	
           (i)
 Buyer, the Company, and the Interest Owners shall cooperate fully, as and to
 the extent reasonably requested by the other Party, in connection with the
 filing of Tax Returns pursuant to this section and any audit, litigation or
 other proceeding with respect to Taxes. Such cooperation shall include the
 retention and (upon the other Party’s request) the provision of records and
 information that are reasonably relevant to any such audit, litigation or
 other proceeding and making employees available on a mutually convenient
 basis to provide additional information and explanation of any material
 provided hereunder. The Interest Owners agree (A) to retain all books and
 records with respect to Tax matters pertinent to the Company relating to any
 taxable period beginning before the Closing Date until the expiration of the
 statute of limitations (and, to the extent notified by Buyer or the Company
 or Interest Owners, any extensions thereof) of the respective taxable
 periods, and to abide by all record retention agreements entered into with
 any taxing authority, and (B) to give Buyer reasonable written notice prior
 to transferring, destroying or discarding any such books and records and, if
 Buyer so requests, the Interest Owners shall allow Buyer to take possession
 of such books and records.

 
	
  

 	
  

 
	
  

 	
           (ii)
 Buyer, the Company, and the Interest Owners further agree, upon request, to
 use their best efforts to obtain any certificate or other document from any
 governmental authority or any other Person as may be necessary to mitigate,
 reduce or eliminate any Tax that could be imposed (including, but not limited
 to, with respect to the transactions contemplated hereby).

 
	
  

 	
  

 
	
  

 	
           (iii)
 Buyer, the Company, and the Interest Owners further agree, upon request, to
 provide the other Party with all information that either Party may be
 required to report pursuant to Code §6043 and all Treasury Regulations
 promulgated thereunder.

 
	
  

 	
  

 
	
                        (e)          Survival.
 The provisions of this Section 10.4 shall survive the Closing for a
 period ending on the later of (i) three (3) years after the date on which the
 Company files its Tax Returns for the tax period ending December 31st of the
 year of Closing, or (ii) the expiration of any applicable statute of
 limitations that may be extended.

 

35

ARTICLE XI

COSTS

          All
Closing costs shall be paid as set forth below:

          11.1          Interest
Owner’s Costs. Interest Owners shall be responsible for all transfer,
recordation, sales, use, income, bulk transfer taxes or like taxes in connection
with the sale of the Interests hereunder and for all sales and use, hotel
occupancy and other taxes of the Company or the Hotel for the period prior to
Closing. Interest Owners shall be responsible for all costs related to the
termination of the Existing Management Agreement and the Existing Franchise
Agreement. Interest Owners shall also be responsible for the costs and expenses
of their and the Company’s attorneys, accountants, appraisers and other
professionals, consultants and representatives. Interest Owners shall also be
responsible for payment of all prepayment penalties, premiums and other charges
or amounts payable in connection with the pay-off of any Property Liens
encumbering the Property. Interest Owners shall be responsible for all Pre-Opening
Costs as provided in Section 8.15.

          11.2          Buyer’s
Costs. In connection with the purchase of the Interests contemplated under
this Contract, Buyer shall be responsible for the costs and expenses of its
attorneys, accountants and other professionals, consultants and
representatives. Buyer shall also be responsible for the costs and expenses in
connection with the preparation of any environmental report, any update to the
survey and the costs and expenses of preparation of the title insurance
commitment and the issuance of the title insurance policy contemplated by Article
IV. Buyer shall be responsible for costs related to the execution of the
New Franchise Agreement. Buyer shall also be responsible for the costs incurred
after the Effective Time as provided in Section 12.1. 

ARTICLE XII

ADJUSTMENTS

          12.1          Adjustments.
Unless otherwise provided herein, at Closing, adjustments between the parties
of income and expenses related to the Property shall be made as of the Effective
Time, with the income and expenses accrued prior to the Effective Time being
allocated to the Interest Owners and the income and expenses accruing on and
after the Effective Time being allocated to Buyer, as if the Contemplated
Transactions were a transfer of the Hotel rather than a transfer of the
Interests, all as set forth below. Subject to the foregoing and except as
otherwise expressly provided herein, all apportionments and adjustments shall
be made on an accrual basis in accordance with the Uniform System of Accounts
for the Lodging Industry (9th Revised Edition) published by the
American Hotel & Lodging Association. 

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

36

                           (b)          Utilities.
All suppliers of utilities shall be instructed to read meters or otherwise
determine the charges owing as of the Effective Time for services prior
thereto, which charges shall be allocated to the Interest Owners. Charges
accruing after the Effective Time shall be allocated to Buyer. 

                           (c)          Accounts.
The Interest Owners shall be entitled to retain the Hotel’s working capital
account, if any, and to withdraw all funds contained therein as of the
Effective Time. The Interest Owners shall receive a credit in the amount of the
aggregate balance as of the Effective Time in the FF&E reserve account and
similar accounts, if any, and utility deposits, petty cash and cash in
registers, all of which shall remain with the Company after the Closing. All
other accounts, reserves and escrows, if any, held by the Company or any other
Person on the Company’s behalf shall remain the property of the Company and be
credited to Buyer, without additional charge to Buyer and without Buyer being
required to fund the same. 

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

                           (e)          Accounts
Payable. Any indebtedness, accounts payable, liabilities or obligations of
any kind or nature related to the Company or the Property for the periods prior
to the Effective Time shall be allocated to the Interest Owners, 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 the Interest Owners at Closing.

                           (f)          Other
Costs. All other costs attributable to the period before the Effective
Time, including the cost of property and liability insurance and all
Pre-Opening Costs, shall be allocated to the Interest Owners, and all costs
attributable to the period after the Effective Time shall be allocated to
Buyer.

          12.2          Reconciliation
and Final Payment. The Interest Owners and Buyer shall reasonably cooperate
after Closing to make a final determination of the allocations and prorations
required under this Contract within sixty (60) days after the Closing Date.
Upon the final reconciliation of the allocations and prorations under this
Section, the party which owes the other party any sums hereunder shall pay such
party such sums within ten (10) days after the reconciliation of such sums. The
obligations to calculate such prorations, make such reconciliations and pay any
such sums shall survive the Closing.

ARTICLE XIII

CASUALTY AND CONDEMNATION

          13.1          Risk
of Loss; Notice. Prior to Closing and the sale of the Interests to Buyer in
accordance with this Contract, all risk of loss to the Property (whether by
casualty, condemnation or otherwise) shall be borne by the Interest Owners. 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) the Company receives
notice that a governmental authority has initiated or threatened to initiate a 

37

condemnation
proceeding affecting the Hotel, the Interest Owners 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 sale of the Interests 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 the
Company of its election within twenty (20) days after the date the Interest
Owners have delivered to Buyer written notice of any such loss, damage or
condemnation as provided above, and in such event, the Earnest Money Deposit,
and any interest thereon, shall be delivered to Buyer and thereafter, except as
expressly set forth herein, no party shall have any further obligation or
liability to the other under this Contract. In the context of condemnation,
“substantial” shall mean condemnation of such portion of the Hotel (or access
thereto) as could, in Buyer’s reasonable judgment, render use of the remainder
impractical or unfeasible for the uses herein contemplated, and, in the context
of casualty loss or damage, “substantial” shall mean a loss or damage in
excess of Three Hundred Thousand and No/100 Dollars ($300,000.00) in value.

          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, all insurance proceeds or condemnation awards which the Company
has received as a result of the same, plus an amount equal to the insurance
deductible shall be paid or credited to Buyer, and all insurance proceeds and
condemnation awards payable as a result of the same shall be paid or credited
to Buyer, in which event the Closing shall occur without replacing or repairing
such damage. In the case of damage or casualty, at Buyer’s election, the
Property shall be repaired and restored to its condition immediately prior to
such damage or casualty, and all excess insurance proceeds shall be credited to
Buyer.

ARTICLE XIV

DEFAULT REMEDIES

          14.1          Buyer
Default. If Buyer defaults under this Contract after the Review Period, and
such default continues for ten (10) days following written notice from the Company
(provided no notice shall extend the time for Closing), then at the election of
a majority of the Interest Owners by written notice to Buyer, (i) this Contract
shall be terminated and of no effect, in which event the Earnest Money Deposit,
including any interest thereon, shall be paid to and retained by the Interest
Owners as the sole and exclusive remedy of the Interest Owners and the Company
hereunder, as liquidated damages for Buyer’s default or failure to close, and
both Buyer and the Interest Owners shall thereupon be released from all
obligations hereunder or (ii) compel specific performance without prejudice to
any other remedy it may have a law or in equity.

          14.2          Interest
Owner/Company Default. If any Interest Owner or (before the Closing) the
Company defaults under this Contract, and such default continues for ten (10)
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
the Company delivered at any time prior to the 

38

completion of
such cure, in which event the Earnest Money Deposit, including any interest
thereon, shall be returned to the Buyer, and thereafter both the Buyer and the
Interest Owners 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 the
Company delivered at any time prior to the completion of such cure, in which
event the Buyer shall have the right to an action against the Interest Owners
and/or the Company 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 the Interest Owners 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 telecopy, when the telecopy is transmitted to the
party’s telecopy number specified below and confirmation of complete receipt is
received by the transmitting party during normal business hours or on the next
Business Day if not confirmed during normal business hours, (ii) if hand
delivered to a party against receipted copy, when the copy of the notice is
receipted or rejected, (iii) if given by certified mail, return receipt
requested, postage prepaid, two (2) Business Days after it is posted with the
U.S. Postal Service at the address of the party specified below or (iv) on the
next delivery day after such notices are sent by recognized and reputable
commercial overnight delivery service marked for next day delivery, return
receipt requested or similarly acknowledged:

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 If to Buyer:

 	
  

 	
 Apple Suites
 Realty Group, Inc.

 
	
  

 	
  

 	
  

 	
 814 East
 Main Street

 
	
  

 	
  

 	
  

 	
 Richmond,
 Virginia 23219

 
	
  

 	
  

 	
  

 	
 Attention:
 Justin G. Knight

 
	
  

 	
  

 	
  

 	
 Fax No.:
 (804) 727-6350

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 with a copy
 to:

 	
  

 	
 Apple
 Hospitality

 
	
  

 	
  

 	
  

 	
 814 East
 Main Street

 
	
  

 	
  

 	
  

 	
 Richmond,
 Virginia 23219

 
	
  

 	
  

 	
  

 	
 Attention:
 Legal Dept.

 
	
  

 	
  

 	
  

 	
 Fax No.:
 (804) 727-6349

 

39

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 If to the
 Company, 

 the Interest Owners:

 	
  

 	
 c/o Larry
 Blumberg & Associates, Inc.

 
	
  

 	
  

 	
  

 	
 2733 Ross
 Clark Circle

 
	
  

 	
  

 	
  

 	
 P.O. Box
 5566, Dothan, Alabama 36302

 
	
  

 	
  

 	
  

 	
 Attn: Barry
 Kraselsky

 
	
  

 	
  

 	
  

 	
 Fax No.:
 (334) 671-1356

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 with a copy
 to:

 	
  

 	
 Johnston,
 Hinesley, Flowers, Clenney & Turner, P.C.

 
	
  

 	
  

 	
  

 	
 Post Office
 Box 2246 (36302)

 
	
  

 	
  

 	
  

 	
 291 North
 Oates Street

 
	
  

 	
  

 	
  

 	
 Dothan, Alabama
 36303

 
	
  

 	
  

 	
  

 	
 Attn:
 William W. Hinesley

 
	
  

 	
  

 	
  

 	
 Fax No.:
 (334) 793-6603

 

          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 the parties hereto with respect to the subject matter hereof.
No modification of this Contract shall be binding unless signed by the parties
hereto.

          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 Commonwealth of Virginia (without regard to conflicts of law
principles).

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

          16.6          Confidentiality.
Except as either party may reasonably determine is required by law (including
without limitation laws and regulations applicable to Buyer or its Affiliates
who may be public companies): (i) prior to Closing, none of Buyer, any Interest
Owner or the Company shall 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 those Persons necessary for a party to meet its obligations
hereunder, including their respective legal counsel, consultants and agents,
the Manager, the Franchisor and the Title Company and except as necessitated by
Buyer’s Due Diligence Examination and/or 

40

shadow
management, unless both Buyer and the Company agree in writing 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. Closing Documents. To the extent any Closing
documents are not attached hereto at the time of execution of this Contract,
Buyer and the Company shall negotiate in good faith with respect to the form
and content of such Closing documents prior to Closing.

          16.7          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.

          16.8          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 the Interest
Owners or Buyer or would constitute a substantial deviation from the general
intent of the parties as reflected in this Contract.

          16.9          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.

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

          16.11          Joint
and Several Obligations. If any Interest Owner 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 such Interest Owner under this
Contract. 

ARTICLE XVII

SUPPLEMENTAL PROVISIONS

          All
of the terms, conditions, representations, warranties, covenants and other
provisions, if any, set forth in the supplemental provisions attached hereto as
Schedule 2 (the “Supplemental Provisions”) are hereby
incorporated into this Contract and shall be considered a part hereof. In the
event of any conflict or inconsistency between the Supplemental Provisions and
the other provisions of this Contract, the Supplemental Provisions shall
control.

41

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

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 INTEREST OWNERS:

 
	
  

 	
  

 	
  

 
	
  

 	
 /s/ Larry G.
 Blumberg

 
	
  

 	 

 	
  

 
	
  

 	
 Larry G.
 Blumberg

 

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 /s/ Hayne
 Hollis

 
	
  

 	 

 	
  

 
	
  

 	
 Hayne Hollis

 

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 /s/ Barry
 Kraselsky

 
	
  

 	 

 	
  

 
	
  

 	
 Barry
 Kraselsky

 

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Watson &
 Downs Investments, LLC

 
	
  

 	
  

 	
  

 
	
  

 	
 /s/ John H.
 Watson 

 
	
  

 	 

 	
  

 
	
  

 	
 By:

 	
 John H.
 Watson, Its Managing Member

 

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Blumberg
 Family – E&M, LLC

 
	
  

 	
  

 
	
  

 	
 /s/ Larry G.
 Blumberg

 
	
  

 	 

 	
  

 
	
  

 	
 By:

 	
 Larry G.
 Blumberg, Its Managing Member

 

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Blumberg
 Futures, LLC

 
	
  

 	
  

 
	
  

 	
 /s/ Larry G.
 Blumberg

 
	
  

 	 

 	
  

 
	
  

 	
 By:

 	
 Larry G.
 Blumberg, Its Managing Member

 

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Hollis &
 Spann Futures, LLC

 
	
  

 	
  

 	
  

 
	
  

 	
 /s/ Hayne
 Hollis

 
	
  

 	 

 	
  

 
	
  

 	
 By:

 	
 Hayne
 Hollis, Its Managing Member

 

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 SUNBELT –
 TNT, LLC, an Alabama limited 

 liability company

 
	
  

 	
  

 	
  

 
	
  

 	
 /s/ Larry G.
 Blumberg

 
	
  

 	 

 	
  

 
	
  

 	
 By:

 	
 Larry G.
 Blumberg, Its Managing Member

 

42

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 BUYER:

 
	
  

 	
  

 
	
  

 	
 APPLE SUITES
 REALTY GROUP, INC., a
Virginia corporation

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Justin
 G. Knight

 
	
  

 	
  

 	 

 	
  

 
	
  

 	
 Name:

 	
 Justin G.
 Knight

 
	
  

 	
 Title:

 	
 Vice
 President

 

43

SCHEDULE 1

HOTEL SPECIFIC DATA

	
  

 	
  

 
	
 1.

 	
 Date of Purchase Contract: July 8,
 2010

 
	
 

	
 2.

 	
 Interest Owners:

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Name

 	
  

 	
 % Interest

 
	
  

 	
 (a)

 	
 Larry G. Blumberg

 	
  

 	
 23%

 	
  

 
	
  

 	
  

 	
 Hayne Hollis

 	
  

 	
 23%

 	
  

 
	
  

 	
  

 	
 Barry Kraselsky

 	
  

 	
 18%

 	
  

 
	
  

 	
  

 	
 Watson & Downs Investments, LLC

 	
  

 	
 23%

 	
  

 
	
  

 	
  

 	
 Blumberg Family – E&M, LLC

 	
  

 	
   5%

 	
  

 
	
  

 	
  

 	
 Blumberg Futures, LLC

 	
  

 	
   5%

 	
  

 
	
  

 	
  

 	
 Hollis & Spann Futures, LLC

 	
  

 	
   3%

 	
  

 

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Company: Sunbelt – TNT, LLC, an
 Alabama Limited Liability Company

 
	
  

 	
  

 	
  

 
	
 3.       Description
 of Hotel:

 
	
  

 
	
  

 	
 (a)

 	
  

 	
 Name/Identification of Hotel:
 TownePlace Suites by Marriott, Nashville, TN

 
	
  

 	
 (b)

 	
  

 	
 Number of Rooms: 102

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
  

 	
 Other Improvements/Amenities:
 indoor swimming pool, exercise room, business center

 

	
  

 	
  

 
	
 4.

 	
 Hotel Brand/Franchise: TownePlace
 Suites by Marriott

 

5.       
Manager and Management Agreement: Management Agreement between Sunbelt –
TNT, LLC and LBAM – Investor Group, LLC dated ___________________.

6.       
Franchisor and Franchise Agreement: Franchise Agreement between Marriott
International, Inc. and Sunbelt – TNT, LLC dated ___________________.

44

	
  

 	
  

 
	
 7.

 	
 Purchase Price: Nine Million Eight
 Hundred Forty Eight Thousand Four Hundred Thirteen and 00/100 Dollars
 ($9,848,413.00), allocated as follows:

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (a) 

 	
 Land:

 	
  

 	
 $

 	
 800,000.00

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Building & Improvements:

 	
  

 	
 $

 	
 7,791,930.23

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Equipment &
 Personal

           Property:

 	
  

 	
 $

 	
 1,256,482.77

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Total Purchase Price:

 	
  

 	
 $

 	
 9,848,413.00

 	
  

 

	
  

 	
  

 	
  

 	
  

 
	
 8.

 	
 Interest Owners’ Tax Identification Numbers:

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 Federal: 

 	
 27-2574959

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 State: 

 	
 N/A

 

	
  

 	
  

 	
  

 
	
 9.

 	
 Construction Commencement Date:
 August, 2010

 
	
  

 	
  

 
	
 10.

 	
 Substantial Completion Date:
 August, 2011

 
	
  

 	
  

 
	
 11.

 	
 Architect:

 	
 Bradley Architecture, PLLC

 
	
  

 	
  

 	
 P. O. Box 1663

 
	
  

 	
  

 	
 Dothan, AL 36302

 
	
  

 	
  

 	
  

 
	
 12.

 	
 Contractor:

 	
 Hollis & Spann, Inc.

 
	
  

 	
  

 	
 P. O. Box 1530

 
	
  

 	
  

 	
 Dothan, AL 36302

 
	
  

 	
  

 	
  

 
	
 13.

 	
 End of Review Period: 30 days
 after the date of this Contract

 
	
  

 	
  

 	
  

 
	
 14.

 	
 Construction Budget: $
 8,937,500.00

 

45

SCHEDULE
2

SUPPLEMENTAL
PROVISIONS

None

EXHIBIT A

LEGAL
DESCRIPTION

Tract I:

A tract of land in
the 3rd Civil District of Davidson County, Tennessee, known as Lot 1 Parrish
Commercial Park Section 9
as of record in Book 4715, Page 163, Register’s Office for Davidson Country,
Tennessee.

Said Lot No. 1 of Section
9 begins at a concrete monument on the northeasterly margin of the proposed New
Elm Hill Pike at a point which is 873.25 feet to the northwest of the westerly margin of
Donelson Pike: thence with a curve to the right with a radius of 914.95 ft.
and with the northeasterly margin of said proposed New Elm Hill Pike a
distance of 74.76 ft. to a concrete monument;
thence continuing with said margin North 33 deg. 37’ West 187.92 ft. to a concrete
monument on said margin; thence continuing with said margin and a curve to the left with a radius of
994.93 ft., a distance of 141.97 ft. to a concrete monument at the beginning of
a curve with a radius of 25 ft.: thence with
said curve a distance of 39.27 ft. to a concrete monument; thence continuing
North 46 deg. 46’ East 11.37 ft to a
concrete monument; thence with a curve to the right with a radius of 147.20
ft., a distance of 144.69 ft. to a concrete monument; thence South 76
deg. 55’ the southerly margin of Old Elm Hill Pike: thence with said southerly margin of Old
Elm Hill Pike South 79 deg. 33’ East 50 ft. to a concrete monument on said margin; thence leaving
said margin South 10 deg. 27’ West 80 ft. to a concrete monument; thence South
13 deg. 58’ 28’ East 110.97 ft. to a
concrete monument; thence South 40 deg. 16’ East 169.19 ft. to a concrete monument: thence South 51 deg. 41’ 41’ West
147.62 ft. to
the point of beginning and containing 82,959 square feet more or less.

Being
the same property conveyed to Charles J. Resha, III and Roger K. Garner by Deed from Mark
Parrish et ux, Jeanne Parrish, of record in Book 4856, page 595, Register’s Office for Davidson
Country, Tennessee. the said Roger K. Garner having subsequently conveyed
his 1/2 undivided interest in and to said property unto Mary F. King Family
Partnership, a Tennessee Limited Partnership, by Quitclaim Deed of record in
Book 10749. page 622. said Register’s Office. The said Mary P. King Family
Limited Partnership subsequently conveyed their one-half undivided interest in
and to said property unto Michael
Gigandet as the Chapter 7 Bankruptcy Trustee, by
Quitclaim Deed of record in Instrument No. 20061106-0137892, said Register’s Office. Michael Gigandet, Chapter 7 Bankruptcy Trustee, subsequently
conveyed his one-half undivided interest in and to said property unto Radley
Hendrixson, by Trustee’s Deed of record in
Instrument No. 20061106-0137893, said Register’s Office. 

The foregoing property is
the same property conveyed in Instrument No. 20080201-0010422, in the Register’s Office of Davidson County,
Tennessee.

LESS AND EXCEPT any
portion of the Property conveyed of record by Grantor to third parties.

TOGETHER WITH:

	
  

 	
  

 
	
  

 	
 Tract I:

 
	
  

 	
  

 
	
  

 	
 Land in Davidson County, Tennessee, being an irregular shaped tract
 of land bounded on the north by Old Elm Hill Pike, on the southwest by New
 Elm Hill Pike and on the cat by Section 9 of Parrish Commercial Park and being
 more particularly described as follows:

 
	
  

 	
  

 
	
  

 	
 Beginning at a concrete monument on New Elm Hill Pike at the corner
 with Section 9 Parrish Commercial Park: thence with a curve to the left with
 a radius of 994.95 ft. and the northeasterly margin of New Elm Hill Pike
 141.88 ft. to a concrete monument; thence with a curve to the right with a
 radius of 15 ft. 32.85 ft. to a concrete monument; thence with a curve to the
 right with a radius of 70 ft. 32.09 ft. to a concrete monument; thence with the
 southerly margin of Old Elm Hill Pike S 76 deg. 55’ E 91.2 ft. to a concrete
 monument; thence N 13 deg. 05’ E 13.5 ft. to a concrete monument; thence S 76
 deg. 55’ E 158.03 ft. to a concrete monument; thence leaving Old Elm Hill Pike S
 7 deg. 45’ 07’ W 18.64 ft. to a concrete monument; thence S 76 deg. 55’ W 37.5
 ft. to a concrete monument; thence with a curve to the left with a radius of
 147.2 ft. 144.69 ft. to a concrete monument; thence S 46 deg. 46’ W 11.37
 ft. to a concrete monument; thence with a curve to the left with a radius of 25
 ft. 39.27 ft. to the point of beginning.

 
	
  

 	
  

 
	
  

 	
 Being the same property conveyed to Charles J. Resha, III by deed
 from Mark A Parrish and wife, Jeanne Parrish of record in Book 5230, Page
 249, dated September 29, 1977, Register’s Office for Davidson County, Tennessee.

 
	
  

 	
  

 
	
  

 	
 Tract II:

 
	
  

 	
  

 
	
  

 	
 Land in Davidson County, Tennessee, being Lot No. 2 on the Final Plat
 of Gowda Property, which plan is of record in Plat Book 9700, Page 616,
 Register’s Office for said County, to which reference is hereby made to said
 plan for a more complete and accurate description of said property

 
	
  

 	
  

 
	
  

 	
 Being the same property conveyed to Charles J. Resha, III, a married
 man, by deed from C.K. Hiranya Gowda, M.D. and Saraswathi Devi Gowda, husband
 and wife, of record in Book 10849, page 521, Register’s Office for Davidson
 County, Tennessee.

 

The foregoing property is the same property conveyed in Instrument No.
20080129-0009016, in the Register’s Office of Davidson County, Tennessee.

LESS AND EXCEPT any portion of the Property conveyed of record by
Grantor to third parties.

LEGAL
DESCRIPTION OF THE QUITCLAIMED PROPERTY

Land in the Fifthteenth Councilmanic District of
Nashville, Davidson County, Tennessee, being Lot I on the Plan of the
Consolidation Plat of Hendrixson and Resha Properties, which plat is of record
in Instrument No. 20071219-014551, said Register’s Office, as amended in
Surveyors Certificate of Amendment to the Consolidation Plat “Hendrixson &
Resha” Properties, which is recorded in lnstrument No. 20080111-0003378, said
Register’s Office. Reference is hereby made to said plat for a more complete
and accurate description of said lot.

A portion of said lot being the same property conveyed
to Charles J. Resha, III, and Roger K. Gamer by Deed from Mark Parrish a et ux,
Jeanne Parrish, of record in Book 4856, page 595, Register’s Office for
Davidson County. Tennessee. The said Roger K. Gamer subsequently conveyed his
1⁄2 undivided interest in and to said property unto Mary F. King Family
Partnership, a Tennessee Limited Partnership, by Quitclaim Deed of record in Book
10742, page 622, said Register’s Office. The said Mary F. King Family Limited
Partnership subsequently conveyed their undivided 1⁄2 interest in and to said property unto Michael Gigandet as
the Chapter 7 Bankruptcy Trustee, by Quitclaim Deed of record in Instrument
No. 20061106-0137892, said Register’s Office. Michael Gigandet, Chapter 7
Bankruptcy Trustee, subsequently conveyed his 1⁄2 undivided interest in and to
said property unto Radley Hendrixson, by Trustee’s Deed of record in Instrument
No. 20061106-0137893. . Charles J. Resha
III, and Radley Hendrixson subsequently conveyed said property unto Wachovia
Bank, National Association, by Warranty Deed of record in Instrument No.
  20080201-0010422        , said Register’s Office. 

The remaining portion of said lot also being the same property conveyed
to Charles J. Resha, III, by Deed from Mark A. Parrish and wife, Jeanne
Parrish, of record in Book 5230, page 249, and from C.K. Hiranya Gowda, M.D. and Saraswathi Devi Gowda,
husband and wife, of record in Book 10849, page 521, Register’s Office for
Davidson County, Tennessee. Charles J. Resha, III, subsequently conveyed said
property unto Wachovia Bank. National Association, by Warranty Deed of record
in Instrument No. 20080129-0009016     , said Register’s Office. 

LESS AND EXCEPT
any portion of the Property conveyed of record by Grantor to third parties.  

EXHIBIT B

 (Intentionally Omitted)

EXHIBIT C

EXISTING CONTRACTS AND LICENSES

None

EXHIBIT D

CONSENTS AND APPROVALS

Franchisor – Marriott International, Inc.

EXHIBIT E

ENVIRONMENTAL REPORTS

Phase I Environmental Site Assessment Report

Dated April 9, 2010

Prepared by ECS Southeast, LLC

EXHIBIT F

 (Intentionally Omitted)

EXHIBIT G

 (Intentionally Omitted)

EXHIBIT H

CONSTRUCTION WARRANTY

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