AGREEMENT FOR SALE AND PURCHASE OF PROPERTY

Seller owns and operates the Crowne Plaza Marina Hotel of Hampton (the “Hotel”) located at 700 and 702 Settlers Landing Road, Hampton, Virginia.

Seller desires to sell to Buyer and Buyer desires to purchase from Seller, on the following terms and conditions and for the price herein set forth, the Hotel and all related assets used in the operation of the Hotel.

Definitions.  As used herein, the following terms shall have the following meanings:

“Additional Deposit” means the amount of Two Hundred Thousand and No/100 Dollars ($200,000.00) paid by Buyer in accordance with Section 3.2 and Section 5.1.  

“Agreement” has the meaning set forth in the opening paragraph.

“Bill of Sale” shall mean the bill of sale conveying title to the Personal Property to Buyer.

“Business Day” shall mean any day on which business is conducted by national banking institutions in Hampton, Virginia.

“Closing” shall mean the consummation of the transactions contemplated in this Agreement.

“Closing Date” shall mean the date which is not more than forty-five (45) days after the Feasibility Date, unless extended by Buyer pursuant to Section 5.1.

“City” shall mean the City of Hampton, Virginia.

“Contract” shall mean any written service, maintenance, supply, management, operating, or employment contract or other agreement, however termed, written or oral, affecting the use, ownership, management, maintenance, or operation of all or any part of the Property as listed on Schedule 1.1(i).

“Deed” shall mean the special warranty deed conveying fee title to the Real Property to Buyer, duly executed by Seller and acknowledged and in proper form for recordation.

“Deposit” shall mean the amount from time to time held by Escrow Agent as Buyer’s earnest money deposit. The Deposit shall be paid in accordance with Section 3.2 and 5.1, respectively, and shall be increased to the extent that interest accrues thereon.  All accrued interest shall belong to Buyer up to and through the Feasibility Date.  Thereafter the Deposit, with interest, shall belong to Seller, subject to the provisions set forth herein concerning the disposition of the Deposit, provided that such Deposit and interest thereon shall be credited against the Purchase Price at Closing.

“Due Diligence Reports” shall mean all reports, documents, studies, analyses, and other written information obtained by Buyer with respect to the Property, including results of physical inspections, engineering studies, engineering drawings and specifications, surveys, Hazardous Materials Reports, soil tests, site plans, feasibility studies, market studies, architectural plans, specifications and drawings, title reports, permits, approvals and authorizations (whether obtained from governmental authorities or third parties); and all other work product generated by or for Buyer in connection with the Property.

“Effective Date” has the meaning set forth in the opening paragraph of this Agreement.

“Escrow Agent” shall mean Willcox & Savage, P.C., 440 Monticello Avenue, Suite 2200, Norfolk, Virginia 23510.

“Feasibility Date” shall mean 5:00 PM EDT on the date that is forty-five (45) days after the Effective Date.

“Feasibility Period” shall mean the period of time beginning on the Effective Date and ending on the Feasibility Date.

“Franchise Agreement” shall mean that certain franchise agreement by and between Buyer and Franchisor for the operation of the Hotel as a Crowne Plaza Hotel and Resort franchise.

“Franchisor” shall mean InterContinental Hotels Group PLC.

“Hazardous Materials” shall mean any toxic, radioactive, caustic or otherwise hazardous substance, including petroleum, its derivatives, by-products and other hydrocarbons, or any substance having any constituent elements displaying any of the foregoing characteristics.  The term “Hazardous Materials” includes, without limitation, any substance regulated under any and all federal, state and local statutes, laws (including case law), regulations, ordinances, rules, judgments, orders, decrees, codes, plans, injunctions, permits, concessions, grants, franchises, licenses, agreements and other governmental restrictions, whether now or hereafter

in effect, relating to human health, the environment or to emissions, discharges or releases of pollutants, contaminants, toxic substances, hazardous substances or wastes into the environment including, without limitation, ambient air, surface water, ground water, or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, Hazardous Materials or wastes or the clean-up or other remediation thereof.

“Hazardous Materials Reports” shall mean any and all studies, reports, analyses, information, or other written records regarding the presence of Hazardous Materials at, on, in, under or relating to the Land.

“Hotel” has the meaning set forth in the Recitals.

“Initial Deposit” shall mean the amount of Two Hundred Thousand and No/100 Dollars ($200,000.00) paid by Buyer in accordance with Section 3.2.

“Intangibles” shall mean all trademarks, trade names, service marks, franchises, domain names, website and other intangible rights, owned or licensed and used or held for use by Seller as of the date of this Agreement.

“Land” shall mean that certain parcel of real property located in the City as more particularly described on EXHIBIT A, attached hereto and made a part hereof.

“Leases” shall mean all leases and/or occupancy rights (other than occupancy rights of Hotel guests) with respect to the Real Property as listed on Schedule 1.1(w).

“Personal Property” shall mean (i) all tangible personal property and fixtures owned by Seller and located on or attached to the Real Property as more specifically described on the attached Schedule 1.1(x), including, without limitation, Supply Inventories, (ii) Seller’s interest in all transferable licenses or permits with respect to the Real Property and the Hotel, (iii) Seller’s interest in all transferable Contracts relating to the ownership or operation of the Real Property and the Hotel (iv) Seller’s interest in all transferable warranties or guaranties relating to the Real Property and the Hotel, and (v) Intangibles.  Personal Property does not include property owned by others such as hotel guests, Tenants under Leases or parties to Contracts.  Personal Property shall not include insurance policies, utility deposits, bank accounts, cash on hand, cash equivalents or cash on deposit.

“Property” shall mean, collectively, the Real Property and the Personal Property not excluded from this Agreement.

“Real Property” shall mean the Land together with Seller’s interest in the buildings and other improvements and fixtures located on the Land.

“Security Deposits” shall mean the security deposits, if any, in Seller’s possession with respect to the Leases and which have not been forfeited by Tenants before Closing.  Security Deposits shall not include any security deposits, whether or not

provided for in the Leases, that were paid to Seller’s predecessor(s) in interest to the Property and that were not delivered to Seller and are not in Seller’s possession.

“Seller Group” shall mean Seller and its past, present, and future officers, directors, shareholders, agents, representatives, successors, and assigns and their respective heirs, successors, and assigns.

“Seller’s Knowledge” shall mean the knowledge, information and belief of Seller based upon the knowledge, information and belief of its officers, directors, employees and agents.

“Supply Inventories” shall mean all of Seller’s right, title, and interest in and to all china, glassware, silverware, cutlery, linens, uniforms, works of art, materials and supplies existing as of the Closing Date and used in connection with the operation of the Real Property and the Hotel, including (i) reserve stocks of operating supplies not in use, (ii) engineering supplies, (iii) guest supplies, (iv) housekeeping supplies and (v) office supplies.  Supply Inventories shall mean only such items as exist on the Closing Date and shall not include any such items owned by hotel guests, Tenants, or other third parties.

“Tenants” shall mean those persons or entities holding rights of tenants under the Leases.

“Title Commitment” shall mean the commitment for the issuance of an owner’s title insurance policy to be issued by the Title Company in favor of Buyer in the full amount of the Purchase Price and obtained by Buyer pursuant to Section 4.1.

“Title Company” shall mean a nationally recognized title insurance company selected by Buyer to issue the Title Commitment and the owner’s title insurance policy to Buyer in accordance with the terms hereof.

Other Defined Terms.  Other capitalized terms contained in this Agreement shall have the meanings ascribed to them herein.

Information Regarding Property.  Seller has or will provide to Buyer within five (5) Business Days of the Effective Date the documents and information on attached Schedule 2.1 pertaining to the Property, all of which Buyer agrees shall be used only for conducting due diligence hereunder and kept confidential except to the extent such information must be shared with third parties such as Buyer’s title insurance company, engineers, surveyors, etc. in furtherance of its due diligence investigations.  

Buyer’s Inspection Rights.  

Buyer shall have until the Feasibility Date to determine whether the Property is acceptable to Buyer with respect to any and all matters that Buyer desires to

investigate including, but not limited to, title, survey, financing, physical, electrical, mechanical and environmental matters and zoning.  

If Buyer finds the Property to be unacceptable and elects not to proceed with the transaction contemplated hereby, Buyer shall give, on or before the Feasibility Date, written notice of termination to Seller.  If Buyer shall give written notice of termination to Seller before the Feasibility Date, this Agreement shall be terminated.  Upon such termination, Escrow Agent shall disburse the Deposit in accordance with 3.2(a) and any other applicable sections of this Agreement, and neither party shall have any further rights or obligations hereunder, except, however, that Buyer shall remain obligated with respect to the indemnities and obligations contained in Sections 2.4 and 2.5 and any other provisions that expressly survive termination or expiration of this Agreement.  

If Buyer fails to give written notice of termination to Seller on or before the Feasibility Date, Buyer shall be deemed to have found the Property acceptable in all respects and this Agreement shall remain in full force and effect and the Deposit shall be applied as provided in this Agreement.

Seller shall thereafter, in accordance with the provisions of this Agreement, convey to Buyer (i) title to the Real Property in fee simple, free and clear of all liens and encumbrances and (ii) the Personal Property, free and clear of all liens and encumbrances.

Access and Liability Insurance.  Buyer and Buyer’s agents and contractors shall be entitled to enter the Property at all reasonable times as agreed on by Buyer and Seller in advance, which agreement shall not be unreasonably withheld or delayed, but only for the purpose of conducting tests and making site inspections and investigations during this Agreement.  Buyer shall give Seller not less than forty-eight hours’ advance notice of any proposed entry so that Seller’s general manager can be present during the exercise of any such right of entry.  In exercising any such right of entry, Buyer agrees that Buyer and Buyer’s agents and contractors shall conduct all communications relating to the Property through Buyer’s general manager and shall not contact or communicate with other employees of Seller.  In doing so, however, Buyer agrees not to cause any damage or make any physical changes to the Property or interfere with the rights of Tenants or others who may have a legal right to use or occupy the Property.  Under no circumstances shall the right of entry granted herein be interpreted as delivery of possession of the Property before Closing.  Buyer shall maintain at all times during its entry on the Property, comprehensive general liability insurance with limits of not less than One Million Dollars combined single limit, bodily injury, death and property damage insurance per occurrence and provide to Seller proof thereof.

Indemnification.  Buyer shall protect, defend, indemnify, save and hold harmless Seller Group against any and all claims, demands, fines, suits, actions, proceedings, orders, decrees, judgments, damage or liability (including reasonable attorneys’ fees incurred by Seller with respect thereto) of any kind or nature, by or in favor of anyone whomsoever, resulting from, arising from, or occasioned in whole or in part by any act or omission by

Buyer, its agents, contractors, employees, representatives or invitees in, on, or at the Property before Closing from Buyer’s inspection, examination and inquiry of or on the Property; provided, however, that Buyer shall not have any duty to protect, defend, indemnify, save and hold harmless Seller Group from any such claims, demands, fines, suits, actions, proceedings, orders, decrees, judgments, damage or liability that arise from the gross negligence or willful misconduct of Seller Group.  

Buyer’s Obligations with Respect to Inspections.  Buyer shall restore the Property to its original condition promptly after Buyer’s factual, physical and legal examinations and inspections of the Property.  Buyer shall promptly pay for all inspections and Due Diligence Reports on the rendering of statements therefor.  Buyer shall not suffer or permit the filing of any liens against the Property and if any such liens are filed, Buyer shall promptly cause them to be released or otherwise eliminated from being a lien on the Property.  If the transaction contemplated by this Agreement is not closed for any reason whatsoever, Buyer shall remain obligated with respect to the indemnities and other obligations contained in Sections 2.4 and 2.5 of this Agreement.  

Franchise Agreement for Hotel.  

Notwithstanding the provisions of Section 2.2 above, Buyer shall have a period of sixty (60) days from the Effective Date to obtain the approval of Franchisor for Buyer to assume the Franchise Agreement or to obtain a new franchise agreement for the Hotel in form and substance acceptable to Buyer.  

If Buyer is unable to obtain such approval from Franchisor or to obtain such new franchise agreement, Buyer shall have the right to terminate this Agreement by giving written notice to Seller on or before the expiration of such sixty (60) day period.  Upon such termination, Escrow Agent shall disburse the Deposit in accordance with 3.2(a) and any other applicable sections of this Agreement, and neither party shall have any further rights or obligations hereunder, except, however, that Buyer shall remain obligated with respect to the indemnities and obligations contained in Sections 2.4 and 2.5 and any other provisions that expressly survive termination or expiration of this Agreement.

In the alternative, if Buyer is unable obtain such approval from Franchisor or to obtain such new franchise agreement before the expiration of such sixty (60) day period, Buyer shall have the right to extend for an additional thirty (30) days the period of time in which Buyer may obtain a franchise agreement for the Hotel by depositing with Escrow Agent an additional deposit in the amount of One Hundred Fifty Thousand Dollars ($150,000.00), which amount shall thereupon become part of the Deposit and be held and disbursed by Escrow Agent in accordance with the provisions of this Agreement.

If Buyer fails to give written notice of termination to Seller on or before the expiration of such sixty (60) day period, Buyer shall be deemed to have obtained the approval of Franchisor for Buyer to assume the Franchise Agreement or a new franchise agreement for the Hotel in form and substance acceptable to Buyer, and

this Agreement shall remain in full force and effect and the Deposit shall be applied as provided in this Agreement.

Purchase Price.  The total purchase price (“Purchase Price”) of the Property shall be Five Million Six Hundred Fifty Thousand and No/100 Dollars ($5,650,000.00). The parties agree to allocate the Purchase Price, and report such allocation on their tax returns, in accordance with Internal Revenue Code § 1060 as set forth on Schedule 3.1.

Payment of Purchase Price.  The Purchase Price shall be paid as follows:

Initial Deposit.  Upon execution of this Agreement, Buyer, within one (1) Business Day of the Effective Date, shall deliver in escrow to the Escrow Agent the Initial Deposit by wire transfer. The Initial Deposit is consideration for the rights granted to Buyer to purchase the Property and shall be deemed non-refundable after the Feasibility Date, unless notice is given in accordance with Section 2.2 or Seller default.  Notwithstanding the preceding sentence, the amount of One Hundred Thousand Dollars ($100,000.00) of the Initial Deposit shall be non-refundable on the Effective Date unless Buyer, during the Feasibility Period, shall elect to terminate this Agreement because of the discovery of survey, title, or zoning matters or environmental issues that are not acceptable to Buyer in its sole discretion.  

Interest-Bearing Account.  Provided that Buyer executes all necessary forms required by the Escrow Agent, the Deposit shall be held in an interest-bearing account with a federally insured banking institution.  Any interest accrued thereon shall become a part of the Deposit to be applied or disposed of in the same manner as the Deposit.  

Additional Deposit.  If Buyer does not terminate this Agreement on or before the Feasibility Date, Buyer shall deliver in escrow to the Escrow Agent the Additional Deposit which shall become part of the Deposit upon delivery, shall be non-refundable, and shall be held by the Escrow Agent in accordance with the provisions of this Agreement.  At the Closing, Buyer shall receive a credit against the Purchase Price in the amount of the Deposit, and the Deposit shall be delivered to Seller.  

Payment at Closing.  The balance of the Purchase Price, shall be paid by Buyer by wire transfer at the time of Closing.

Prorations; Adjustments; Closing Costs.  The following adjustments and prorations shall be computed as of the Closing Date and the Purchase Price shall be adjusted at Closing to reflect such prorations.  All items of revenue, cost, and expense of the Property with respect to the period before the Closing Date shall be for the account of Seller.  All items of revenue, cost, and expense of the Property with respect to the period on and after the Closing Date shall be for the account of Buyer.  All prorations shall be based on a 30-day month.  Buyer acknowledges that it shall be solely responsible for liabilities expressly

assumed by Buyer in this Agreement and any expense related to the Hotel and Leases, and to Contracts, if any, assumed by Buyer with respect to the period on and after the Closing Date (the “Assumed Liabilities”) and shall also be entitled to all revenues with respect to the period on and after the Closing Date specifically excluding revenues related to lodging the night before the Closing Date, which shall be the property of Seller.

Payables.  Seller shall pay on or before the Closing Date all of Seller’s accounts payable incurred in the ordinary course of business in connection with the ownership and operation of the Hotel including, but not limited to, amounts payable to vendors and other trade payables, amounts payable under the Contracts (collectively, the “Payables”) attributable to Seller’s ownership and operation of the Property before the Closing Date except those Payables that are not due and payable as of the Closing Date (the “Outstanding Payables”) which Seller and Buyer agree to prorate as of the Closing Date.  Seller agrees that between the Effective Date and the Closing Date all payables shall be paid and discharged in the ordinary course of business.  Any Payables as of the Closing Date relating to the operation of the Hotel before the Closing Date and not discovered until after the Closing Date but in no event more than ninety (90) days after the Closing Date shall be paid by Seller at such time as they are discovered or due as the case may be, and Buyer shall have no responsibility therefor.  

Cash, Accounts Receivable, and Unopened Inventories.

Seller shall receive a credit for any and all cash in the cash registers, vaults, safes, (other than that belonging to guests) and/or “petty cash boxes” or similar cash receptacles as of the Closing Date that is transferred to Buyer.

All of Seller’s accounts receivable incurred in the ordinary course of business in connection with the ownership and operation of the Hotel, including net amounts subject to collection from credit card operations and other trade receivables as of the Closing Date and relating to periods before the Closing Date, except lodging the night before the Closing Date, are called the “Accounts Receivable.”  All Accounts Receivable shall remain the property of Seller.  Seller shall use its best efforts to collect all Accounts Receivable before the Closing Date.  Seller shall deliver to Buyer on the Closing Date a list of all uncollected Accounts Receivable balances originating before the Closing Date and owed to Seller from Tenants, guests or patrons of the Hotel as Schedule 3.3(b)(ii).  Seller shall use its best efforts to cause the Accounts Receivable to be paid directly to Seller after the Closing.  If, after the Closing, any Accounts Receivable are nevertheless paid to Buyer, such Accounts Receivable will remain the property of Seller, and Buyer shall forward such Accounts Receivable to Seller within fifteen (15) days of receipt thereof.  Buyer shall cooperate with Seller in connection with the collection of the Accounts Receivable and shall provide Seller with reasonable access to Buyer’s books and records with regard to any Accounts Receivable collected by Buyer.

Seller shall receive a credit for the value of any and all inventory and supplies consisting of unopened containers of alcoholic beverages. Foodstuffs, etc.

Deposits and Rents.  All collected rents, deposits and other payments from Tenants under the Leases (excluding Advance Booking Deposits which are addressed in Section 3.3(j) below) that have been delivered to Seller shall be prorated between Seller and Buyer as of the Closing Date.  The balance remaining from any security deposits or prepaid rent held by Seller after deductions previously made by Seller shall be transferred to Buyer.  If any rent or other payments under the Leases are in arrears as of the Closing Date (“Delinquent Rents”), the amount of any such Delinquent Rents that are attributable to any period before the Closing Date shall be paid by Buyer to Seller after the Closing if received by Buyer.  Buyer shall be entitled to deduct from any payments received by Buyer from any Tenants who owe Delinquent Rents (i) first, Buyer’s reasonable costs of collection incurred with respect to such payments (including reasonable attorneys’ fees); (ii) second, rents due for the month in which such payment is received by Buyer; and (iii) third, rents from such Tenant attributable to any period after the Closing Date that are past due on the date of receipt.  Notwithstanding the foregoing, percentage rents, if any, under the Leases shall be equitably prorated as agreed by Seller and Buyer.  

Taxes and Assessments.  Taxes and assessments for the year of Closing shall be prorated as of the Closing Date if the amount of such taxes is known at the time of Closing.  If such amount cannot be then ascertained, proration shall be based on the amount of the taxes for the preceding year.  If any tax proration shall be based on the amount of taxes for the year preceding the year of Closing, such taxes, at the request of either party, shall be re-prorated and adjusted between the parties as soon as reasonably practicable after the tax bills for the year of Closing are received.  Public liens, if any, certified or for which the work has been substantially completed on the date of Closing shall be paid by Seller and any other such liens shall be assumed by Buyer.

[Intentionally deleted.]  

Fuel, Water, and Utility Charges.  Fuel, water and utility charges shall be estimated, adjusted and apportioned on the basis of the last meter reading as of the Closing Date.  If there are meters on the Real Property, Seller shall furnish readings to date not more than three (3) days before the Closing Date, and the unread meter charges, if any, based thereon for the intervening time shall be apportioned on the basis of such last reading.  Readings will be secured for all utilities as close as practicable to the Closing Date.

Sewer and Stormwater Charges.  Sewer and stormwater charges, if any, shall be estimated, adjusted and apportioned as per custom as of the Closing Date.

Income and Deposits.  Income from telephone, vending machines and other coin-operated devices on the Real Property, if any, shall be adjusted and apportioned as

of the Closing Date.  Deposits, if any, made by Seller, the manager of the hotel on behalf of Seller, or any predecessor in title as security under any utility or public service contract shall be credited to Seller to the extent that the same remains on deposit and is verified by the holder thereof for the benefit, and in the name of, Buyer.  If such deposits cannot remain on deposit for the benefit of Buyer, Buyer shall place new deposits with the utility company(ies) and the existing deposits shall be released to Seller.

Fees for Licenses and Permits.  Fees paid or payable, if any, for licenses and permits shall be adjusted and apportioned as of the Closing Date to the extent such licenses and permits are assumed by Buyer.

Advance Booking Deposits.  Deposits in connection with advance bookings for future occupancy or use, after the Closing Date, of hotel rooms, suites, banquet and meeting rooms, and convention or restaurant facilities in the Hotel by any person, organization or group, are herein called “Advance Booking Deposits” and shall be revised and re-certified by Seller as of the Closing Date.  The aggregate amount of deposits in connection with the Advance Booking Deposits and any other deposits, advances or advance payments in connection with the operation of the Hotel shall be credited to Buyer.

Contracts.  All prepayments made under any continuing Contracts affecting the Real Property, if any, shall be adjusted and apportioned as of the Closing Date to the extent such agreements are assumed by Buyer which assumption, if any, shall be in Buyer’s sole discretion.

Other Customary Prorations.  All other verifiable charges and fees customarily prorated and adjusted in similar transactions shall be adjusted and apportioned as of the Closing Date.  If accurate prorations and other adjustments cannot be made at Closing because current bills or statements are not obtainable (as, for example, utility bills), the parties shall prorate on the best available information or as otherwise provided herein.

Intent of Prorations Provisions.  The intent of the prorations and adjustments provided for herein is that Seller shall bear all expenses of operation of the Real Property and shall receive all income therefrom accruing before the Closing Date, and Buyer shall bear all expenses of operation and receive all income therefrom accruing on and after the Closing Date, excluding room rents for the night’s lodging incurred before the Closing Date.  Notwithstanding anything to the contrary set forth herein, with respect to meeting or function room revenues, it is specifically agreed that revenues allocable to the night commencing immediately before the Closing Date shall be for the account of Seller and revenues for meeting or function rooms commencing with the night of the Closing Date shall be for the account of Buyer.

Costs and Expenses.  Buyer shall pay all documentary stamp taxes, recording taxes and other transfer taxes on the Deed, all costs of recording and the title insurance premium for

the owner’s title insurance policy to be obtained by Buyer and the costs of any of Buyer’s lender requirements, if any.  Seller shall pay the cost of preparation of all documents required under Section 5.2, and the Virginia Grantor’s Tax and any other taxes or fees to be paid by or on behalf of the grantor under Virginia law.  Attorneys’ fees, consulting fees, and other due diligence expenses shall be borne by the party incurring such expense.  

Evidence of and Encumbrances on Title.  As soon as is reasonably practicable, Buyer shall obtain the Title Commitment and promptly deliver a copy thereof to Seller.  Buyer may file written objections to exceptions contained in the Title Commitment on or before the Feasibility Date, provided, however, that the following shall be deemed “Acceptable Encumbrances” and Buyer shall not have the right to object to Acceptable Encumbrances:

Real property taxes and assessments for the year in which the sale and purchase shall be closed, which shall be prorated as provided for herein;

The standard printed exceptions contained in owner’s title insurance policies; and

Any matters which are approved in writing by Buyer or deemed approved by Buyer in accordance with this Agreement.

Time and Place.  Closing shall take place at 10:00 A.M. on the Closing Date; provided, however, that pursuant to Section 4.1 Seller, at Seller’s option, may extend the Closing

Date for purposes of curing objections to the status of title that were timely and properly raised by Buyer. Buyer may extend the Closing Date an additional thirty (30) days by giving written notice to the Seller on or before the Closing Date and by delivering in escrow the Additional Deposit by wire transfer to the Escrow Agent.  Closing shall be held at the Hotel, or at such other place as the Buyer and Seller may mutually agree.  Failure to close as set forth above shall constitute a breach hereunder.

Seller’s Deliveries.  At Closing, Seller shall deliver or cause to be delivered to Buyer the following items (executed on behalf of the appropriate entities and by the appropriate individuals, where applicable):

The Deed in the form of attached EXHIBIT B;

A Seller’s Affidavit related to the Real Property in a form as is reasonably required by Buyer’s attorney or the Title Company;

A Bill of Sale with respect to the Personal Property, licenses and permits, in the form of attached EXHIBIT C;

An Assignment and Assumption Agreement (“Assignment and Assumption Agreement”), in the form of attached EXHIBIT D;

Form letter reasonably satisfactory to Buyer’s attorney executed by Seller to advise all Tenants under Leases and all contractors under Contracts of the sale to Buyer;

Unforfeited Security Deposits in Seller’s possession, if any, shall be transferred to Buyer unless credited to Buyer against the Purchase Price;

Closing Statement (“Closing Statement”) reflecting all financial aspects of the transaction;

All keys and security codes in Seller’s actual possession with respect to the Property;

Duly adopted resolutions or a consent in writing of Seller authorizing Seller to consummate the transaction contemplated hereby and to perform all of Seller’s obligations hereunder;

Certificate of Good Standing from the State of Delaware showing Seller as duly organized, validly existing and in good standing as a Delaware limited liability company under the laws of the State of Delaware;

Incumbency Certificate as to the existing managers of Seller;

A Certificate recertifying the representations, warranties and covenants of Seller contained herein as of the Closing Date;

A list of Outstanding Payables;

Such other usual and customary documentation or deliveries as may be reasonably requested by Buyer; and

An interim beverage management agreement between Seller and Buyer substantially in the form attached hereto as EXHIBIT E allowing Buyer to use Seller’s ABC license for the Hotel for a period of ninety (90) days from the date of Closing.

Buyer’s Deliveries.  At Closing, Buyer shall deliver or cause to be delivered to Seller the following items (executed on behalf of the appropriate entities and by the appropriate individuals, where applicable):

Cash to close in the amount required by Article III, together with any other amounts as required herein, by wire transfer to Seller’s account;

Assignment and Assumption Agreement;

Closing Statement;

A Certificate recertifying the representations, warranties and covenants of Buyer contained herein as of the Closing Date;

Duly adopted resolutions or consent in writing of Buyer authorizing Buyer to consummate the transaction contemplated hereby and to perform all of Buyer’s obligations hereunder;

Incumbency Certificate as to the existing officers and directors of Buyer;

The Franchise Agreement (if applicable);

Certified rent toll; and

Such other usual and customary documentation or deliveries as may be reasonably requested by Seller.

Possession.  Possession of the Property shall be surrendered to Buyer at Closing.  

Contingencies.  Notwithstanding anything to the contrary contained herein, Buyer’s and Seller’s obligation to proceed to Closing is specifically contingent on Seller and Buyer, respectively, having performed all obligations required to be performed by each such party under this Agreement on or before the Closing Date.

Crowne Plaza Franchise.  If Buyer does not assume the existing Franchise Agreement or obtain a new Franchise Agreement to replace and supersede the existing Franchise Agreement, Buyer shall deposit into escrow, at Closing, an amount, as determined by Intercontinental Hotels Group, LLC, that is sufficient to cover all costs and expenses that may be incurred by Seller in terminating the Franchise Agreement and de-identifying the

Hotel in accordance with the provisions of the Franchise Agreement and any standard operating procedures established by the franchisor under the Franchise Agreement in connection therewith, and Buyer shall indemnify Seller for any liability that Seller may incur as a result of the decision of Buyer to refrain from assuming the Franchise Agreement or obtaining a new Franchise Agreement to replace and supersede the Franchise Agreement.

Licenses and Permits.

Buyer acknowledges that it is the responsibility of Buyer to obtain the approval of the applicable governmental authorities for issuance of such licenses and permits as shall be necessary or desirable in Buyer’s opinion to operate the Hotel.  Buyer shall file any and all applications and supporting documents with the appropriate governmental agencies, at Buyer’s cost, and expense.  Seller agrees to cooperate with Buyer (but without cost to Seller) in the filing of such applications, to the extent such cooperation may be required by governmental agencies issuing or approving the licenses and permits.

Buyer hereby assumes the risk of failing to obtain any licenses and permits relating to the Hotel, and the refusal of any governmental authority to grant said licenses and permits shall not give Buyer any rights, remedies or causes of action against Seller for damages, for termination of this Agreement or any other relief whatsoever.

Seller’s Covenants. Seller covenants and agrees that between the Effective Date and the Closing Date, Seller shall:

continue to operate the Hotel substantially in accordance with Seller’s past practices;

not intentionally terminate, breach or amend, without Buyer’s prior written consent, any existing Leases, licenses and permits or Contracts except that termination will be permitted in the event of default by the other party or, in the case of Contracts, if replaced by a comparable Contract;

not intentionally injure or damage the business reputation of the Hotel or divert business therefrom;

not intentionally damage the Real Property;

maintain the insurance coverage that is presently in effect; and

maintain food, beverage, inventory and supply levels that are currently maintained.

Buyer’s Covenants. Buyer covenants and agrees that, within fifteen (15) days of the Effective Date, Buyer, at its cost and expense, will apply for a franchise to operate the Hotel as a Crowne Plaza Hotel and Resort.  In the alternative, if Buyer does not desire to operate the Hotel as a Crowne Plaza Hotel, Buyer, at its cost and expense, will take all necessary actions and steps to terminate the current Crowne Plaza franchise for the Hotel and to de-identify the Property as a Crowne Plaza Hotel.  Any discussions or negotiations regarding any termination or assignment of the Franchise Agreement shall be initiated by Buyer. and Buyer covenants and agrees to provide timely updates regarding such discussions and negotiations with Franchisor to Seller.

Buyer’s Representations and Warranties. Buyer represents and warrants that:

Buyer has the full right, power and authority to purchase the Property from Seller as provided in this Agreement and to carry out Buyer’s obligations hereunder;

all requisite action necessary to authorize Buyer to enter into this Agreement and to carry out Buyer’s obligations has been obtained;

this Agreement has been duly authorized, executed and delivered by Buyer;

the execution of this Agreement and the Closing to occur hereunder do not and will not violate any contract, covenant or other agreement to which Buyer may be a party or by which Buyer may be bound; and

Buyer is a Virginia limited liability company, duly organized and validly existing under the laws of the Commonwealth of Virginia, and duly qualified to transact business in the Commonwealth of Virginia.

Seller’s Representations and Warranties. Seller represents and warrants that:

Seller has the full right, power and authority to sell the Property to Buyer as provided in this Agreement and to carry out Seller’s obligations hereunder;

All requisite action necessary to authorize Seller to enter into this Agreement and to carry out Seller’s obligations has been obtained;

This Agreement has been duly authorized, executed and delivered by Seller;

The execution of this Agreement and the Closing to occur hereunder do not and will not violate any contract, covenant or other agreement to which Seller may be a party or by which Seller may be bound.

Seller is a limited liability company duly formed, validly existing and in good standing under the laws of the State of Delaware, duly qualified to transact business in the Commonwealth of Virginia, and has all requisite power and authority to own its interests in the Property and to operate the Hotel, and to carry on its business as now being conducted.

Seller, to Seller’s Knowledge, has not received any written or oral notification from any governmental authority concerning the Property for any violation of federal, state, county or municipal laws, ordinances or regulations, expressly including any violations concerning health, fire, building, sanitation, safety code violations, zoning, Hazardous Materials or any other environmental problems.  Seller agrees to forward to Buyer copies of any notices described in the preceding sentence immediately on receipt by Seller.  To Seller’s Knowledge, Seller is not in violation of any governmental laws, ordinances, rules, and regulations applicable to the use and occupation of the Property, including, without limitation, health, fire, sanitation and safety codes.  To Seller’s Knowledge, Seller is not in violation of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. §§ 9601 et seq., the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et seq., the Toxic Substances Control Act, 15 U.S.C. §§ 2601 et seq., or any modifications or amendments thereto, or applicable state law and other federal, state and local laws and the regulations implementing such laws now in force relating to hazardous waste disposal and/or toxic substances (the above laws are collectively referred to as “Environmental Laws”).  Seller represents and warrants that it has disclosed to Buyer all pending or threatened litigation known to Seller and orders, rulings, notices, permits or investigations known to Seller regarding Hazardous Materials, as such terms are defined in applicable Environmental Laws.  

To Seller’s Knowledge, Seller has not received any written or oral notification of a breach of any Contracts, any licenses and permits or any Lease and there are no defaults or conditions which with the passage of time or the giving of notice would constitute defaults thereunder.  There are no persons with a right to use or occupy the Property other than the tenants under the Leases and the guests of the Hotel.  Each of the Contracts, licenses and permits and Leases being assumed by Buyer are in full force and effect and have not been amended, modified or supplemented in any way that is not expressly disclosed to the Buyer in writing.

To Seller’s Knowledge, there are no actual or threatened conditions or circumstances which would adversely affect the current use of the Property, or Seller’s ability to use the Property to operate the Hotel.  

To Seller’s Knowledge, the Real Property is not subject to special assessment levies or any roll back taxes.

Seller has not made any commitment to any governmental or quasi-governmental authority, or to any third person to dedicate or grant any portion of the Real Property for roads, easements, rights of way, park lands, or other public or private purposes,

or to grant any restrictions, or to incur any other expense or obligation relating to the Real Property.

There are no currently effective employment agreements, collective bargaining agreements, or pensions, retirement or profit sharing plans, with or covering any of the employees of the Hotel, except as set forth on Schedule 8.2(k).

To Seller’s Knowledge, there are no unrecorded easements that adversely affect the use and operation of the Real Property as a Hotel.  Prior to the Closing Date, Seller will not grant any easement that will affect title to the Real Property or Seller’s right to transfer its property interest hereunder.

There are no other agreements, written or oral, other than the Contracts, licenses, permits and Leases, which affect the use or operations of the Hotel.

To Seller’s Knowledge, Seller has not received any notice from any insurance company that has issued a policy with respect to the Hotel or from any board of fire underwriters (or other body exercising similar functions) claiming any defects or deficiencies or requesting the performance of any repairs, alterations, or other work to the Property, which, if not corrected, would result in termination of insurance coverage.

To Seller’s Knowledge, there are no pending suits, litigation, or administrative proceedings relating to Seller, or to the Hotel, including, without limitation, pending labor grievances or arbitrations or suits.

All tangible Personal Property is in good working order.

There are no parties in possession of the Property pursuant to any leases effecting the Property except those specifically disclosed on Schedule 1.1(w).

All taxes in connection with the Property, including but not limited to, sales, occupancy, hotel/motel, ad valorem, personal property, and real property taxes, have been paid and no such taxes remain unpaid as of the date hereof.

All Personal Property located at the Property is owned by the Seller and Seller has no equipment leases or other financing arrangements affecting title to such personal property, except those disclosed in this Agreement.

Except as disclosed in writing to Buyer, all Leases are in full force and effect, and no defaults by Seller or any tenant exist under the Leases.

Except as disclosed in writing to Buyer, no leasing commissions are due to any leasing agent or broker in connection with the Leases.

Seller is not currently obligated under any of the Leases to make any tenant improvements.

Buyer’s Default.  If Buyer shall fail to close the transaction contemplated hereby as and when required or if Buyer shall otherwise be in default of its obligations hereunder before Closing, the Deposit shall be paid over to Seller as agreed as liquidated damages, it being acknowledged by Buyer and Seller that in such event Seller will suffer substantial damages but such damages are incapable of exact ascertainment.  After payment to Seller of the Deposit, neither Seller nor Buyer shall have any further rights or obligations hereunder except that Buyer shall remain obligated pursuant to Sections 2.4 and 2.5 and any other provisions of this Agreement that expressly survive termination or expiration of this Agreement.  If subsequent to Closing, Buyer shall fail to comply with its obligations contained herein which survive Closing, Seller, in addition to any rights and remedies provided herein, shall be entitled to any and all remedies available at law or in equity.

Seller’s Default.  If this transaction shall not be closed because of default of Seller, Buyer shall be entitled to an immediate and full refund of the Deposit to Buyer on demand, and shall be entitled to pursue specific performance.  In the event that specific performance is obtained by Buyer, Buyer and Seller shall close on the terms herein contained.  If subsequent to Closing, Seller shall fail to comply with its obligations contained herein which survive Closing, Buyer, in addition to any rights and remedies provided herein, shall be entitled to pursue all rights and remedies at law or in equity including, but not limited to, the right to pursue specific performance.

Survival.  The covenants and agreements of the parties (including, without limitation, the covenants and agreements of the parties set forth in this Article XII) contained in this Agreement shall survive the Closing.  The representations and warranties of the parties contained in this Agreement or in any certificate or other writing delivered pursuant to this Agreement shall survive the Closing until the expiration of twelve (12) months after the Closing Date.  Notwithstanding the preceding sentence, any representation or warranty in respect of which indemnity may be sought under this Agreement shall survive the time at which it would otherwise terminate pursuant to the preceding sentence, if notice of the inaccuracy of such representation or warranty giving rise to such right of indemnity shall have been given to the party against whom such indemnity may be sought before such time, and such period of survival shall continue until the indemnification claim related to such inaccuracy of such representation or warranty shall have been finally resolved pursuant to this Article XII.  

Indemnification by Buyer.  Buyer agrees to indemnify and hold harmless the Seller Group from and against any and all losses, claims, demands, damages, costs and expenses of whatsoever kind or nature including reasonable attorneys’ fees related to or arising as a result of (i) the Assumed Liabilities and Buyer’s ownership or operation of the Hotel and the Property after Closing, (ii) any misrepresentation or breach of any warranty made by Buyer in this Agreement or (iii) any breach of any covenant or agreement made or to be performed by Buyer pursuant to this Agreement (collectively, the “Deficiencies”).

Indemnification by Seller.  Seller agrees to indemnify and hold harmless Buyer from and against any and all losses, claims, demands, damages, costs, and expenses of whatsoever kind or nature including reasonable attorney’s fees related to or arising as a result of (i) liabilities of Seller other than the Assumed Liabilities, (ii) any misrepresentation or breach of any warranty made by Seller in this Agreement or (iii) any breach of any covenant or agreement made or to be performed by Seller pursuant to this Agreement (collectively, the “Deficiencies”).

Limitation on Deficiencies.  Notwithstanding any other provision of this Agreement (a) no party shall have any obligation to indemnify the other party from and against any Deficiencies resulting from, arising out of, relating to, in the nature of, or caused by the breach (or alleged breach) of any representation or warranty until such party has suffered Deficiencies by reason of all such breaches (or alleged breaches) in excess of a $5,000.00

aggregate deductible (at which point such party will be obligated to indemnify the other party from and against all further Deficiencies) and (b) there will be a $565,000.00 aggregate ceiling on the obligation of a party to indemnify the other party from and against Deficiencies resulting from the breach of any warranties or representations by a party.  The provisions of this Section shall not apply to the Closing pro rations made pursuant to Section 3.3.

Risk of Loss.  Seller agrees to give Buyer prompt notice of any fire or other casualty affecting the Property or of any actual or threatened (to the extent that Seller has current actual knowledge thereof) taking or condemnation of all or any portion of the Property.  If before Closing, there shall occur:

damage to the Property caused by fire or other casualty if damaged to the extent of more than ten percent (10%) of the Purchase Price; or

the taking or condemnation of all or any portion of the Property; which would materially interfere with the present use of such Property as determined by Buyer in its reasonable business discretion;

Construction.  The terms “Seller” and “Buyer” whenever used in this Agreement shall include the permitted assigns of the respective parties hereto.  Whenever used, the singular number shall include the plural and the plural the singular, and the use of any gender shall include all genders.  The term “including” as used herein shall in all instances mean “including, but not limited to.”  The headings in this Agreement are intended solely for convenience of reference and shall be given no effect in the interpretation of this Agreement.  This Agreement and any related instruments shall not be construed more strictly against one party than against the other by virtue of the fact that initial drafts may have been prepared by counsel for one of the parties, it being recognized that this Agreement and any related instruments are the product of extensive negotiations between the parties.

Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which will constitute the same agreement.

Severability and Waiver.  Invalidation of any one section or provision of this Agreement by judgment or court order shall in no way affect any other section or provision.  Failure of any party to this Agreement to insist on the full performance of any of its provisions by the other party (or parties) shall not constitute a waiver of such performance unless the party failing to insist on full performance of the provision declares in writing signed by it that it is waiving such performance.  A waiver of any breach under this Agreement by any party, unless otherwise expressly declared in writing, shall not be a continuing waiver or waiver of any subsequent breach of the same or other provision of this Agreement.  

Governing Law; Venue.  The laws of the Commonwealth of Virginia (without regard to conflicts of law) shall govern the validity, construction, enforcement and interpretation of this Agreement.  On any litigation arising out of or under this Agreement and/or out of Buyer’s ownership, operation of or other activities on the Property, the prevailing party shall be entitled to collect from the non-prevailing party reasonable attorneys’ fees and costs.  Buyer and Seller hereby submit to the jurisdiction of the United States District Court for the Eastern District of Virginia, Norfolk Division, as the exclusive jurisdiction and venue for any suit or other proceeding brought in connection with or arising out of this Agreement.  

Further Assurances.  In addition to the acts and deeds recited in this Agreement and contemplated to be performed, executed, and/or delivered under this Agreement, Seller and Buyer agree to perform, execute and/or deliver or cause to be delivered, executed and/or delivered at Closing or after Closing all further acts, deeds, and assurances reasonably necessary to consummate the transactions contemplated hereby.

Notices.  All notices, demands, requests, and other communications required or permitted hereunder shall be in writing.  All such notices, demands, requests and other communications (and copies thereof) shall be deemed to be delivered: (a) if sent by messenger, on receipt or refusal to the party to whom the notice is directed; (b) on receipt or refusal if sent by overnight courier, with request for next Business Day delivery; or (c) on receipt or refusal after deposit in a regularly maintained receptacle for the United States mail, registered or certified, return receipt requested, postage prepaid, addressed as follows (or to such other address as the parties may specify by notice given pursuant to this section):

Subordination.  This Agreement is subordinate to any financing now or hereafter granted or assumed by Seller with respect to the Property.  

Entire Agreement and Amendment.  This Agreement contains the entire understanding between Buyer and Seller with respect to the subject matter hereof.  Neither this Agreement nor any provision hereof may be modified, amended, changed, waived, discharged or terminated orally.  Any such action may occur only by an instrument in writing signed by the party against whom enforcement of the modification, change, waiver, discharge or termination is sought.

Recording.  This Agreement shall not be recorded and Buyer agrees that recording same by Buyer constitutes a default by Buyer.

Exhibits.  The Exhibits referenced in and attached to this Agreement are incorporated in, and made a part of, this Agreement for all purposes.

Calculation of Dates.  If the final day of any period or any date of performance under this Agreement falls on a date which is not a Business Day, then the final day of the period or the date of performance, as applicable, shall be extended to the next day which is a Business Day.

No Third Party Beneficiary.  This Agreement is solely between Seller and Buyer and no other party shall be entitled to rely on any provision hereof for any purpose whatsoever.

Back Up Contract(s).  Buyer understands that Seller may actively negotiate with other parties and may enter into back up contracts for the sale of the Property.  The backup contracts will be subject and subordinate to this Agreement so long as this Agreement is in full force and effect and Buyer is not in default hereunder.

Limitation on Liability.  Buyer expressly agrees that the obligations and liabilities of Seller under this Agreement and any document referenced herein shall not constitute personal obligations of the officers, directors, employees, agents, trustees, partners, members, representatives, stockholders or other principals and representatives of Seller.  The limitations of liability contained in this paragraph shall apply equally and inure to the benefit of Seller’s present and future officers, directors, trustees, shareholders, agents and employees, and their respective heirs, successors, and assigns.

WAIVER OF JURY TRIAL.  THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE, TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT AND ANY DOCUMENT EXECUTED IN CONNECTION HEREWITH OR RELATED HERETO, OR ANY COURSE OR CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF EITHER PARTY.  THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES TO ENTER INTO THIS TRANSACTION.

Confidentiality.  Seller and Buyer each covenant that (i) prior to Closing it shall not issue any press release or public statement (a “Release”) with respect to the transactions contemplated by this Agreement without the prior consent of the other, and (ii) after Closing, any Release issued by Seller or Buyer shall be subject to the review and approval of the other (which approval shall not be unreasonably withheld).  If Seller or Buyer is required by law to issue a Release, such party shall, at least two (2) Business Days prior to the issuance of the same, deliver a copy of the proposed Release to the other for review. Notwithstanding the foregoing however, Buyer shall have the right to issue and file such documents as are required by federal and state securities laws and regulations.

Exhibits and Schedules.

HAMPTON HOTEL ASSOCIATES LLC,

a Delaware limited liability company

all equipment, fixtures, furniture, furnishings, supplies and other personal property of every description, if any, owned by Assignor and located in or on, or attached to, or used in connection with the Property (the “Tangible Personal Property”);

all of Assignor’s right, title and interest in, all contract rights related to the Property or the Tangible Personal Property, including, without limitation, the Assignor’s interest in the following:  maintenance, construction, commission, architectural, engineering, parking, supply or service contracts, warranties, guarantees and other agreements related to the Property or the Tangible Personal Property that will remain in existence after the date hereof (collectively, the “Service Contracts”);

all of Assignor’s right, title and interest in, to and under any licenses, certificates of occupancy, permits and approvals issued by any governmental authority and relating to the Property, the Tangible Personal Property or Service Contracts (the “Permits”);

all of Assignor’s right, title and interest, if any, in and to all other intangible rights, titles, interests, privileges and appurtenances owned by Assignor and related to or used exclusively in connection with the ownership, use or operation of the Property (the “Intangible Personal Property” and, with the Tangible Personal Property, the Service Contracts and the Permits, the “Personal Property”).

Assignment and Assumption.  Assignor hereby assigns, conveys, transfers, grants and sets over unto Assignee, its successors and assigns, as of the Effective Date, all of Assignor’s right, title and interest in and to the Leases.  Assignee hereby accepts the foregoing assignment.

Security Deposits. Assignor hereby assigns conveys, transfers, grants and sets over unto Assignee, its successors and assigns, as of the Effective Date, all of Assignor’s right, title and interest in any security or other deposits required to be paid pursuant to the terms of the Leases.

Indemnification.  

Assignor hereby agrees to indemnify, defend and hold harmless Assignee from and against any and all liability, loss, damage and expense, including without limitation reasonable attorneys’ fees, which Assignee may or shall incur under the Leases by reason of any failure of the Assignor to have complied with or to have fully performed, before the Effective Date, all obligations on its part to have been performed, complied with or discharged under any of the terms and conditions contained in the Leases which were to be performed before the Effective Date.

Assignee hereby agrees to indemnify, defend and hold harmless Assignor from and against any and all liability, loss, damage and expense, including without limitation reasonable attorneys’ fees, which Assignor may or shall incur under the Leases by reason of any

failure of Assignee to have complied with or to have fully performed, on or after the Effective Date, all obligations on its part to have been performed, complied with or discharged under any of the terms and conditions contained in the Leases which were to be performed on or after the Effective Date.

Miscellaneous.  The terms and conditions of this Assignment shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors and assigns.  This Assignment may be executed in multiple counterparts, each of which shall be deemed an original Assignment, but all of which, taken together, shall constitute one and the same Assignment, binding on the parties hereto.  The signature of any party hereto to any counterpart hereof shall be deemed a signature to, and may be appended to, any other counterpart hereof.  This Assignment shall be governed by the laws of the Commonwealth of Virginia, without regard to principles of conflicts of laws.

Appointment.  Licensee hereby appoints Owner, and Owner hereby accepts the appointment, as the sole and exclusive interim manager of the Beverage Operations.  Licensee hereby ratifies and confirms the current and continuing authority of Owner, under the Licenses as described therein above to provide certain services with respect to the Beverage Operations as described herein.

Inventory and Supplies.  Owner, at its expense, shall provide during the Term (as defined below) hereof all operating equipment and supplies (including glassware and other supplies, “Operating Supplies”) necessary to manage the Beverage Operations in a manner consistent with past operating practices and in a professional manner consistent with the

management of hotels of a quality and type similar to the Hotel.  Owner shall bear all risk of loss with respect to Operating Supplies.

Fixtures and Equipment; Maintenance; Surrender.  Owner shall provide all fixtures, equipment, furnishings, and furniture necessary for managing the Beverage Operations in a manner consistent with past operating practices.

Pursuit of Transfer of Licenses.  Owner, at its own expense and efforts, shall immediately commence all actions required to obtain the New Licenses in Owner’s name and in any event shall file such application no later than ten (10) days from the date of this Agreement and shall provide evidence of such filing to Licensee.  Owner’s failure to file an application within this time period shall allow Licensee to terminate this Agreement upon notice without further obligation.  Owner shall provide to Licensee copies of the New Licenses immediately upon issuance of same.

Term.  Unless terminated sooner under another provision of this Agreement, the term of this Agreement (the “Term”) shall commence on the date hereof and terminate immediately upon the date on which the applicable licensing authority approves the issuance of the New Licenses to Owner or ninety (90) days after the date hereof, whichever is earlier.  

Revenues.  All gross revenue and receipts derived from management of the Beverage Operations are the exclusive property of Licensee.  However, during the Term hereof, said revenues and receipts shall be collected and retained by Owner for as long as Owner shall perform, in all material respects, its duties and obligations under this Agreement.

Expenses.  Licensee shall not be responsible for any expenses arising from or relating to the Beverage Operations from and after the date hereof. Owner, as a part of its services, shall pay in a timely manner all expenses, incurred in operating the Beverage Operations including, but not limited to, any and all taxes associated with the Beverage Operations, from the revenues and receipts that Owner collects.  In the event that expenses exceed revenues and receipts, Owner shall have the obligation or liability for such shortfall, and Licensee shall have no obligation or liability for the shortfall. Owner agrees to file any and all tax returns associated with the Beverage Operations and provide copies of any and all such tax returns to Licensee within five (5) days of filing such returns.

Authority and Duties.

Owner, at the direction and on behalf of Licensee, will perform or cause to be performed, all duties required or desirable in the management and operation of the Beverage Operations to maintain the Beverage Operations in compliance with the laws and regulations of the City of Hampton and the Commonwealth of Virginia, which duties shall include, but not be limited to, the arrangement by Owner for the

employment of a sufficient number of adequately trained staff and the supervision by Owner of such staff.  Licensee grants Owner the authority, subject to the terms herein, to make all purchases necessary for the operation of the Beverage Operations, except that all liquor, wine and beer purchases must and shall be made by or at the direction of Licensee under the Licenses.

During the Term of this Agreement, Owner agrees that Licensee shall have the authority to supervise all activities in the Beverage Operations until such time as the New Licenses are issued to Owner.  All sales and service of alcoholic beverages and the conduct of all Beverage Operations by Owner will be as the agent and servant of Licensee in order to further the purposes of this Agreement.  The services provided by Owner hereunder shall be provided in accordance with the supervision of Licensee.  Owner agrees that Licensee shall have the right to inspect the Beverage Operations at any time during the Term hereof.  Owner agrees to cooperate fully with Licensee during any such inspection.

Owner agrees that the Beverage Operations shall be operated according to Licensee’s customary standards and policies in a lawful manner in compliance with all laws and regulations of the City of Hampton and the Commonwealth of Virginia, and that the final decision regarding permitted activities, methods of operation, and all issues or matters relating to compliance with such laws and regulations shall be made by Licensee; and Owner, and its employees, shall strictly comply with all such final decisions made by Licensee.  In the event that Owner or its employees shall not comply with any such final decision, Licensee shall have the right to terminate this Agreement upon written notice to Owner.

Employees.  Owner shall arrange for the employment, direction, control and discharge, as the case may be, of all personnel employed in the Beverage Operations.  Owner will not knowingly employ any person who is disqualified from being employed on an alcoholic beverage licensed premises.  All such employees shall be employees of Owner and not of Licensee.

Records.  Owner shall arrange for the keeping of full and adequate books of account and other records reflecting the operation of the Beverage Operations, which it shall make available to Licensee for inspection at the request of Licensee.

Licenses.  Subject to Section 2.2 hereof, Owner shall exercise all commercially reasonable efforts to keep the Licenses in full force and effect throughout the Term of this Agreement, and Licensee shall cooperate with Owner and exercise all commercially reasonable efforts in that regard, all at Owner’s expense, which expense shall be paid from the revenues and receipts received from the Beverage Operations.  Licensee shall also exercise all commercially reasonable efforts, but without being required to spend money or incur liability, to cooperate with Owner in its efforts to obtain the New Licenses for the Hotel.  Licensee shall cooperate in, but shall not be responsible for, filing all required renewal forms and the obtaining of any required tax clearances needed to ensure that there is no cessation of operation pending issuance of the New Licenses to Owner, and Owner shall reimburse Licensee for the cost of filing fees related to such filing.

Maintenance of Insurance.

During the Term of this Agreement, Owner agrees to maintain, with a company satisfactory to Licensee, at the cost and expense of Owner, a policy of general liability insurance, including liquor liability coverage, on an occurrence basis, with liability limits of at least $2,000,000.00 per occurrence, that names the Licensee and its subsidiaries and affiliates, and their respective shareholders, partners, members, directors, officers, managers, agents, and employees (collectively, “License Parties”) and the employees of Licensee who supervise, inspect and/or assist Owner in the Beverage Operations as additional insureds, including coverage for damages arising out of the acts or negligence of any Licensee Party and that provides that such policy is primary insurance and not excess over or contributory with any other valid, existing and applicable insurance in force for or on behalf of Licensee.  Owner also agrees to maintain property insurance, written on an all risk policy form, in an amount equal to or greater than current replacement cost value, providing business interruption, extra expense, boiler and machinery, flood (if applicable due to the location of the property) and earthquake coverage (if applicable due to the location of the property) from incidents that may arise in the operation of the Hotel or the Beverage Operation.  Certificates evidencing coverage described herein shall be delivered to Licensee prior to the commencement of the Term.

The policies of insurance maintained by Owner shall only be cancelable following at least thirty (30) days written notice to Licensee.

Waiver of Subrogation.  Owner shall cause all policies of insurance maintained pursuant to the terms hereof to provide that the insurance company will have no right to subrogation against Licensee or any of its affiliates, officers or shareholders.

Indemnity.  Owner shall defend, indemnify and hold the Licensee Parties harmless from any and all liabilities, damages or claims, costs, unpaid operating expenses, penalties, citations, enforcement actions, losses, or expenses including, without limitation, reasonable attorney’s fees (collectively, “Losses”) incurred by any of the Licensee Parties in connection with this Agreement or the operation of the Hotel or Beverage Operations by Owner from and after the date hereof, including Losses arising from any breach by Owner of the terms of this Agreement, except to the extent such Losses arise from the gross negligence or willful misconduct of the Licensee Parties.

Events of Default.  Each of the following shall constitute an “Event of Default” under this Agreement:

The failure of any party to pay when due any amount payable by such party to or on behalf of any other party under this Agreement (including, but not limited to, expenses incurred in connection with the Beverage Operations regardless of which party may bear the liability for such expenses under applicable law in the absence of this Agreement) for a period of five (5) days after written notice from the other party that such payment is due and payable; or

Owner or Licensee fails to remedy any other breach of its obligations under this Agreement within fifteen (15) days (or such longer time as the other party may in writing allow), after receipt of written notice from the other party; or

Owner’s actions in connection with the Hotel or the Beverage Operations expose Licensee (or threatens to expose Licensee) to liability or damages.

Remedies.  Upon the occurrence and during the continuation of an Event of Default, in addition to and cumulative of any and all rights and remedies available to the non-defaulting party under this Agreement, at law or in equity, the non-defaulting party may terminate this Agreement upon written notice to the other party and except as to liabilities or claims which shall have accrued or arisen prior to or on account of such termination, and except as otherwise provided in Section 6.2 hereof, all obligations hereunder shall cease.  In any judicial proceeding in which the validity of termination is at issue, neither party will be limited to the reasons for default set forth in any notice sent pursuant to this Agreement.

Notices.  Any notice, statement or demand required to be given under this Agreement shall be in writing and shall be deemed to have been given if delivered personally or upon receipt by overnight courier or by registered or certified mail, return receipt requested, addressed, if to Licensee at 410 West Frances Street, Williamsburg, Virginia 23185, Attention:  David R. Folsom and, if to Owner, at _____________ Attention:  _________ or to such other addresses as Licensee or Owner shall designate in the manner herein provided.  

Survival.  Unless expressly stated to the contrary, all obligations for any payment or reimbursement by one party to the other shall survive the end of the Term.  The provisions of Article 2 and Section 4.2 and 4.3 of this Agreement shall survive the end of the Term.

Partial Invalidity.  If any of the phrases, sentences, clauses or paragraphs contained in this Agreement shall be declared invalid by the final and unappealable order, decree, or judgment of any court, this Agreement shall be construed as if such phrases, sentences, clauses or paragraphs had not been inserted, provided that the economic basis of this Agreement is not hereby altered.

Modifications; Waivers.  This Agreement may not be changed, modified or terminated, nor may any provision hereof be waived, except by a writing signed by the party to be charged with any such change, modification, termination or waiver.  The waiver of any of the terms and conditions of this Agreement on any occasion or occasions shall not be deemed a waiver of such terms and conditions on any future occasion.  

Governing Law.  This Agreement shall be governed by, interpreted under, construed and enforced in accordance with the laws of the Commonwealth of Virginia and the courts of the Commonwealth of Virginia shall have jurisdiction over any matters arising hereunder.  Owner agrees to comply with all laws and regulations of the Commonwealth of Virginia and all ordinances of the City of Hampton.  

Assignment.  No party hereto may assign or transfer any of its rights or delegate any of its obligations under this Agreement to any other person, firm or company without the written consent of the others.  Any such consent may be withheld in a party’s sole and absolute discretion.

No Joint Venture.  Nothing in this Agreement creates a joint venture or partnership and, except as may be expressly set forth herein, no party is given the authority to bind or obligate any other party.

Counterparts.  This Agreement may be executed in counterparts, all of which together shall form a single document.  Counterparts may be exchanged by facsimile, which shall be considered binding.

Entire Agreement.  This Agreement contains the entire agreement of the parties hereto with respect to the subject matter hereof and supersedes any discussions, offers, proposals, agreements or promises with respect thereto.

OWNER:

LICENSEE: