Apple REIT Seven, Inc. (Form: 425, Received: 08/08/2013 16:14:47)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): August 7, 2013

APPLE REIT NINE, INC.

(Exact Name of Registrant as Specified in Its Charter)

VIRGINIA

(State or Other Jurisdiction of Incorporation)

000-53603		26-1379210
(Commission File Number)		(IRS Employer Identification No.)

814 East Main Street Richmond, Virginia		23219
(Address of Principal Executive Offices)		(Zip Code)

(804) 344-8121

(Registrant’s Telephone Number, Including Area Code)

N/A

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

x	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Apple REIT Nine, Inc. (which is referred to below as “Apple Nine”) is filing this report in accordance with Items 1.01, 8.01 and 9.01 of Form 8-K.

Item 1.01

Entry into a Material Definitive Agreement.

The Agreement and Plan of Merger

On August 7, 2013, Apple REIT Seven, Inc. (“Apple Seven”), Apple REIT Eight, Inc. (“Apple Eight,” and together with Apple Seven and Apple Nine, the “Companies”), Apple Nine, Apple Seven Acquisition Sub, Inc. (“Seven Acquisition Sub”), a wholly-owned subsidiary of Apple Nine, and Apple Eight Acquisition Sub, Inc. (“Eight Acquisition Sub”), a wholly-owned subsidiary of Apple Nine, entered into an Agreement and Plan of Merger (the “Merger Agreement”). The Merger Agreement provides that, upon the terms and subject to the conditions set forth in the Merger Agreement, Seven Acquisition Sub and Eight Acquisition Sub will merge with and into Apple Seven and Apple Eight, respectively (the “Mergers”), with Apple Seven and Apple Eight surviving the Mergers as wholly-owned subsidiaries of Apple Nine. The Mergers and the transactions contemplated thereby were unanimously approved by the Board of Directors of each Company based on the unanimous recommendation of its special committee of two non-management directors (each, a “Special Committee”) that considered the transaction. Seven Acquisition Sub and Eight Acquisition Sub were formed solely for engaging in the Mergers and have not conducted any prior activities.

Pursuant to the terms of the Merger Agreement, at the effective time of the Mergers:

Each issued and outstanding Unit (Common Share and related Series A Preferred Share) of Apple Seven will be converted into the right to receive one (the “Apple Seven Exchange Ratio”) Apple Nine Common Share, and each issued and outstanding Unit of Apple Eight will be converted into the right to receive 0.85 (the “Apple Eight Exchange Ratio”) Apple Nine Common Shares. The current outstanding Apple Nine Common Shares will remain outstanding.

Each Apple Seven and Apple Eight option that is outstanding immediately prior to the effective time of the Mergers will be converted into an option to acquire Apple Nine Common Shares, in accordance with the terms of the Merger Agreement, with the number of Units subject to each option and the exercise price of each option adjusted by reference to the Apple Seven Exchange Ratio or Apple Eight Exchange Ratio, as the case may be.

If the transaction is approved, Apple Nine will become self-advised and each Company will terminate its advisory arrangements with its advisors. In accordance with the conversion formula set forth in the Articles of Incorporation of Apple Nine (the “Apple Nine Articles”), and as contemplated by the Merger Agreement, each outstanding Apple Nine Series B Convertible Preferred Share will be converted into the right to receive 24.17104 Apple Nine Common Shares and all Apple Nine Series A Preferred Shares will terminate at the effective time of the Mergers. Based on the Apple Seven Unit and Apple Eight Unit consideration and in accordance with the conversion formula set forth in the respective Articles of Incorporation of Apple Seven and Apple Eight, each issued and outstanding Series B Convertible Preferred Share of Apple Seven and Apple Eight will be converted in the Mergers into the right to receive Apple Nine Common Shares equal to 24.17104 multiplied by one or 0.85, as the case may be.

The Merger Agreement contains customary representations and warranties and covenants including, among others, the following:

The Companies agreed to prepare and file with the Securities and Exchange Commission (the “SEC”), as soon as practicable, a Registration Statement on Form S-4 with respect to the Apple Nine Common Shares issuable in the Mergers, a portion of which Registration Statement will also serve as the proxy statement with respect to the Apple Nine Amendments (as defined below) and a joint proxy statement with respect to the shareholder meeting of each of the Companies in connection with the Mergers.

Each Company is subject to customary “no-shop” restrictions on its ability to initiate, solicit, knowingly encourage or facilitate competing transactions from third parties or provide non-public information and engage in discussions with third parties with respect to competing transactions. However, in certain circumstances each Company may engage in these activities if such Company receives an unsolicited bona fide proposal from a third party and the Special Committee of such Company determines in good faith that such proposal is, or is reasonably likely to lead to, a superior competing transaction, and such Company has obtained a satisfactory confidentiality agreement from such third party.

The Merger Agreement contemplates the following amendments to the Apple Nine Articles and the Bylaws of Apple Nine (the “Apple Nine Bylaws”):

The Apple Nine Articles will be amended to increase the number of authorized Apple Nine Common Shares from 400 million to 800 million, to add a provision permitting the Board of Directors or shareholders of Apple Nine to amend the Apple Nine Bylaws in the event the Apple Nine Common Shares are to be listed on a national securities exchange and effective as of the date the Apple Nine Common Shares are first listed on a national securities exchange (the “Listing Date”), and to add restrictions on transfer and ownership of Apple Nine Common Shares to protect Apple Nine’s real estate investment trust (“REIT”) tax status (the “First Apple Nine Articles Amendment”). The foregoing description of the First Apple Nine Articles Amendment and the amendments contemplated thereby is only a summary, does not purport to be complete and is qualified in its entirety by reference to the full text of the form of First Apple Nine Articles Amendment, which is filed as Exhibit 99.1 hereto and is incorporated herein by reference.

In addition, Apple Nine will submit to its shareholders for approval a separate amendment to the Apple Nine Articles to permit the implementation of a 50% reverse stock split of Apple Nine Common Shares in the event the Apple Nine Common Shares are to be listed on a national securities exchange and effective as of the Listing Date (the “Second Apple Nine Articles Amendment,” and together with the First Apple Nine Articles Amendment, the “Apple Nine Articles Amendments”). If shareholder approval of the Second Apple Nine Articles Amendment is obtained, it may, in the discretion of the Board of Directors of Apple Nine, be filed with the State Corporation Commission of the Commonwealth of Virginia within one year after shareholder approval in order to implement the reverse stock split. The foregoing description of the Second Apple Nine Articles Amendment and the amendments contemplated thereby is only a summary, does not purport to be complete and is qualified in its entirety by reference to the full text of the form of Second Apple Nine Articles Amendment, which is filed as Exhibit 99.2 hereto and is incorporated herein by reference.

The Apple Nine Bylaws will be amended to eliminate provisions relating to restrictions on transfer and ownership to protect Apple Nine’s REIT tax status (which are, in effect, being replaced with provisions incorporated into the Apple Nine Articles as described above), to eliminate the provisions reflecting the external advisor arrangement and to enable the Board of Directors of Apple Nine to amend the Apple Nine Bylaws without shareholder approval upon the Listing Date (the “Apple Nine Bylaws Amendment,” and together with the Apple Nine Articles Amendments, the “Apple Nine Amendments”). The foregoing description of the Apple Nine Bylaws Amendment and the amendments contemplated thereby is only a summary, does not purport to be complete and is qualified in its entirety by reference to the full text of the form of Apple Nine Bylaws Amendment, which is filed as Exhibit 99.3 hereto and is incorporated herein by reference.

Under the terms of the Merger Agreement, the shareholders of Apple Seven and Apple Eight are entitled to exercise statutory dissenters’ rights of appraisal in connection with the Mergers. In addition, the Merger Agreement provides statutory dissenters’ rights of appraisal to the shareholders of Apple Nine in connection with the First Apple Nine Articles Amendment.

The consummation of the Mergers by the parties to the Merger Agreement is subject to various closing conditions, including, among others:

The approval of the Merger Agreement and the transactions contemplated thereby by the affirmative vote, in each case voting as a separate voting group, of the holders of at least a majority of (i) the issued and outstanding Apple Seven Common Shares, Apple Seven Series A Preferred Shares and Apple Seven Series B Convertible Preferred Shares, and (ii) the Apple Seven Common Shares and Apple Seven Series A Preferred Shares that are not owned by or voted under the control of any of Apple Seven’s directors.

The approval of the Merger Agreement and the transactions contemplated thereby by the affirmative vote, in each case voting as a separate voting group, of the holders of at least a majority of (i) the issued and outstanding Apple Eight Common Shares, Apple Eight Series A Preferred Shares and Apple Eight Series B Convertible Preferred Shares, and (ii) the Apple Eight Common Shares and Apple Eight Series A Preferred Shares that are not owned by or voted under the control of any of Apple Eight’s directors.

·	The approval of each of the Apple Nine Amendments by the vote of at least a majority of the Apple Nine Common Shares as required under the Apple Nine Articles and Apple Nine Bylaws, respectively.

The approval of the Merger Agreement and the transactions contemplated thereby and each of the Apple Nine Amendments by the affirmative vote, in each case voting as a separate voting group, of the holders of a majority of the Apple Nine Common Shares and Apple Nine Series A Preferred Shares that are not owned by or voted under the control of any of Apple Nine’s directors.

·	The number of Apple Nine Common Shares that would be issuable with respect to dissenting shares not exceeding five percent (5%) of the Apple Nine Common Shares to be issued and outstanding after the effective time of the Mergers assuming there were no dissenting shares.

·	The Registration Statement on Form S-4 being declared effective by the SEC.

·	Each of the Mergers being consummated concurrently.

In addition, the obligations of the parties to consummate the Mergers are subject to certain other customary closing conditions, including, among others, (i) subject to the standards set forth in the Merger Agreement, the accuracy of the parties’ representations and warranties and the performance of covenants and agreements by the parties, (ii) the receipt by the parties of third party consents and approvals, except where the failure to obtain such consents or approvals would not result in a material adverse effect on any of the Companies, (iii) the delivery of opinions from counsel relating to the U.S. federal income tax code treatment of the Mergers and the REIT qualification of each of the Companies, and (iv) the absence of any event, change, effect or circumstance occurring that would constitute a material adverse effect on any of the Companies.

The Merger Agreement contains certain termination rights for each Company, subject to the prior approval of the Special Committee of such Company. Each Company (each, a “Subject Company”) has agreed to pay each other Company an amount equal to $1.7 million plus the reasonable third party expenses of such other Company if the Merger Agreement is terminated:

By the Special Committee of the Subject Company before the required shareholder approvals are obtained, (i) if the Special Committee of the Subject Company makes an Adverse Recommendation Change (as defined in the Merger Agreement) as permitted by the Merger Agreement or (ii) in order for the Subject Company to enter into an agreement with respect to a Superior Competing Transaction (as defined in the Merger Agreement).

By any of the other Companies before the required shareholder approvals are obtained, if (i) the Special Committee or the Board of Directors of the Subject Company makes an Adverse Recommendation Change, (ii) the Subject Company enters into an agreement with respect to a Competing Transaction (as defined in the Merger Agreement) (other than a confidentiality agreement as contemplated by the Merger Agreement) or (iii) the Board of Directors of the Subject Company or the Special Committee thereof or any other committee thereof resolves to, or publicly attempts to, do any of the foregoing.

By (i) the Subject Company because the Mergers are not consummated by February 28, 2014 (unless such date is extended pursuant to the terms of the Merger Agreement, but in any event no later than April 30, 2014), or (ii) any of the other Companies because the required approvals of the Subject Company’s shareholders are not obtained or the Subject Company willfully or intentionally breaches any of its representations, warranties, covenants or agreements made in the Merger Agreement, and, in each case, (x) a competing proposal is made or proposed to the Subject Company or otherwise publicly announced and not publicly withdrawn prior to termination of the Merger Agreement and (y) within twelve (12) months of the termination of the Merger Agreement the Subject Company consummates, or executes a definitive agreement that is later consummated with respect to, any competing transaction.

The parties to the Merger Agreement intend that each of the Mergers will satisfy applicable requirements to qualify as a tax-free reorganization.

The foregoing description of the Merger Agreement is only a summary, does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement, which is filed as Exhibit 2.1 and is incorporated herein by reference.

The Merger Agreement has been attached as an exhibit to provide shareholders with information regarding its terms. It is not intended to provide any other factual or financial information about the Companies or any of their respective affiliates or businesses. The representations, warranties, covenants and agreements contained in the Merger Agreement were made only for the purposes of such agreement and as of specified dates, were solely for the benefit of the parties to such agreement, and may be subject to limitations agreed upon by the contracting parties. The representations and warranties have been qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Merger Agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Shareholders should not rely on the representations, warranties, covenants and agreements contained in the Merger Agreement or any descriptions thereof as characterizations of the actual state of facts or condition of any Company, or any of its respective affiliates or businesses. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in any Company’s respective public disclosures. The Merger Agreement should not be read alone, but should instead be read in conjunction with the other information regarding the Companies and their respective affiliates and the transactions contemplated by the Merger Agreement that will be contained in or attached as an annex to the Registration Statement on Form S-4 that the Companies will be filing in connection with the transactions contemplated by the Merger Agreement, as well as in the other filings that any of the Companies make with the SEC.

Voting Agreement

In order to induce the Companies to enter into the Merger Agreement, concurrently with the execution of the Merger Agreement, on August 7, 2013, Glade M. Knight (“Mr. Knight”) entered into a voting agreement (the “Voting Agreement”) with the Companies. Pursuant to the Voting Agreement, Mr. Knight is required (i) to vote all of his Common Shares, Series A Preferred Shares and Series B Convertible Preferred Shares of the respective Companies, together with any additional securities of the Companies acquired by Mr. Knight after August 7, 2013, (x) in favor of the Merger Agreement and the transactions contemplated thereby, including the Mergers, and (y) against any other competing acquisition proposal and any action or agreement that would reasonably be expected to frustrate the purposes of, impede, hinder, interfere with, or prevent or delay the consummation of the transactions contemplated by the Merger Agreement, (ii) to convert each Apple Nine Series B Preferred Share held by Mr. Knight into 24.17104 Apple Nine Common Shares effective immediately before the effective time of the Mergers, (iii) to waive, and prevent the execution of, any dissenters’ rights relating to the Mergers that Mr. Knight may have directly or indirectly and (iv) to not sell or transfer any securities of the respective Companies beneficially owned by Mr. Knight or grant any proxies or transfer any voting rights with respect to such securities that would impact the ability to comply with the Voting Agreement, prior to the consummation of the Mergers or termination of the Merger Agreement. Mr. Knight is the record holder and has the power to vote all of the outstanding Series B Convertible Preferred Shares of the respective Companies and 18,955 Apple Seven Units, 10,536 Apple Eight Units and 9,222 Apple Nine Units.

The foregoing description of the Voting Agreement and the transactions contemplated thereby is only a summary, does not purport to be complete and is qualified in its entirety by reference to the full text of the Voting Agreement, which is filed as Exhibit 99.4 hereto and is incorporated herein by reference.

Conversion Agreements

In order to induce the Companies to enter into the Merger Agreement, concurrently with the execution of the Merger Agreement, on August 7, 2013, Apple Nine entered into conversion agreements (each, a “Conversion Agreement”) with each person to whom Mr. Knight has assigned certain benefits associated with certain of his Apple Nine Series B Convertible Preferred Shares. Pursuant to the Conversion Agreements, each such person has agreed to convert each Apple Nine Series B Convertible Preferred Share held by such person into 24.17104 Apple Nine Common Shares effective immediately before the effective time of the Mergers.

The foregoing description of the Conversion Agreements and the transactions contemplated thereby is only a summary, does not purport to be complete and is qualified in its entirety by reference to the full text of the form of Conversion Agreement, which is filed as Exhibit 99.5 hereto and is incorporated herein by reference.

Termination Agreement

Concurrently with the execution of the Merger Agreement, on August 7, 2013, the Companies entered into a termination agreement (the “ Termination Agreement ”) with Apple Seven Advisors, Inc., Apple Eight Advisors, Inc., Apple Nine Advisors, Inc. (“ A9A ”) and Apple Suites Realty Group, Inc., effective immediately before the effective time of the Mergers. Pursuant to the Termination Agreement, the existing advisory agreements and property acquisition/disposition agreements with respect to the Companies will be terminated. The Termination Agreement does not provide for any separate payments to be made in connection with the termination of the existing advisory agreements and property acquisition/disposition agreements.

The foregoing description of the Termination Agreement and the transactions contemplated thereby is only a summary, does not purport to be complete and is qualified in its entirety by reference to the full text of the Termination Agreement, which is filed as Exhibit 99.6 hereto and is incorporated herein by reference.

Subcontract Agreement

Concurrently with the execution of the Merger Agreement, on August 7, 2013, Apple Nine entered into a subcontract agreement (the “ Subcontract Agreement ”) with Apple Ten Advisors, Inc. (“ A10A ”). Pursuant to the Subcontract Agreement, A10A will subcontract its obligations under the advisory agreement between A10A and Apple REIT Ten, Inc. (“ Apple Ten ”) to Apple Nine. The Subcontract Agreement provides that, from and after the effective time of the Mergers, Apple Nine will provide to Apple Ten the advisory services contemplated under the A10A advisory agreement and Apple Nine will receive fees and expenses payable under the A10A advisory agreement from Apple Ten. Apple Ten also signed the Subcontract Agreement to acknowledge the terms of the Subcontract Agreement.

The foregoing description of the Subcontract Agreement and the transactions contemplated thereby is only a summary, does not purport to be complete and is qualified in its entirety by reference to the full text of the Subcontract Agreement, which is filed as Exhibit 99.7 hereto and is incorporated herein by reference.

Assignment and Transfer Agreement

Concurrently with the execution of the Merger Agreement, on August 7, 2013, Apple Nine entered into an assignment and transfer agreement (the “ Transfer Agreement ”) with A9A and Apple Fund Management, LLC (“ AFM ”), a subsidiary of A9A. AFM provides employee personnel in connection with the existing advisory agreements for the Companies and Apple Ten. Pursuant to the Transfer Agreement, Apple Nine will acquire all of the membership interests in AFM effective as of immediately following the effective time of the Mergers. The Transfer Agreement provides that Apple Nine will assume all of the obligations of the predecessor owners under prior transfer agreements involving the transfer of the membership interests in AFM (including Apple Hospitality Two, Inc., Apple Hospitality Five, Inc., Apple REIT Six, Inc. and A9A) and relieve the predecessor owners and the other advisory companies of any liability with respect to AFM.

The foregoing description of the Transfer Agreement and the transactions contemplated thereby is only a summary, does not purport to be complete and is qualified in its entirety by reference to the full text of the Transfer Agreement, which is filed as Exhibit 99.8 hereto and is incorporated herein by reference.

Additional Information about the Mergers and Where to Find It:

In connection with the proposed Mergers whereby Apple Nine will acquire all of the outstanding shares of each of Apple Seven and Apple Eight, the Companies intend to file relevant materials with the SEC, including a registration statement on Form S-4 that will contain a joint proxy statement/prospectus. BEFORE MAKING ANY VOTING OR INVESTMENT DECISIONS, INVESTORS AND SECURITY HOLDERS OF EACH COMPANY ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND ALL OTHER MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT EACH COMPANY AND THE MERGERS. The registration statement, the joint proxy statement/prospectus and other materials (when they become available) containing information about the proposed transaction, and any other documents filed by any Company with the SEC, may be obtained free of charge at the SEC’s web site at www.sec.gov. In addition, investors and security holders may obtain free copies of the documents filed with the SEC by each Company by directing a written request to Apple Seven, Apple Eight or Apple Nine, respectively, at 814 East Main Street, Richmond, Virginia 23219, Attention: Investor Relations.

Each Company and its executive officers and directors may be deemed to be participants in the solicitation of proxies from the security holders of that Company in connection with the Mergers. Information about the executive officers and directors of each Company and its ownership of securities in that Company is set forth in the proxy statement for that Company’s 2013 Annual Meeting of Shareholders, which (for each of Apple Seven, Apple Eight and Apple Nine) was filed with the SEC on April 9, 2013. Investors and security holders may obtain additional information regarding the direct and indirect interests of any Company and its executive officers and directors in the Mergers by reading the proxy statement/prospectus regarding the Mergers when it becomes available.

This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

Forward Looking Statements:

This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements generally can be identified by use of statements that include phrases such as “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “foresee,” “looking ahead,” “is confident,” “should be,” “will,” “predicted,” “likely,” or other words or phrases of similar import. Such statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of any Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to, the ability of any Company to obtain required shareholder or other third-party approvals required to consummate the proposed Mergers; the satisfaction or waiver of other conditions in the Merger Agreement; a material adverse effect on any Company; the outcome of any legal proceedings that may be instituted against any Company and others related to the Merger Agreement; the ability of any Company to implement its operating strategy; any Company’s ability to manage planned growth; the outcome of current and future litigation and regulatory proceedings or inquiries; changes in economic cycles; and competition within the hotel industry. Although each Company believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore there can be no assurance that such statements included in this report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by any Company or any other person that the results or conditions described in such statements or the objectives and plans of any Company will be achieved. In addition, each Company’s qualification as a real estate investment trust involves the application of highly technical and complex provisions of the Internal Revenue Code. Certain factors that could cause actual results to differ materially from these forward-looking statements are listed from time to time in each Company’s SEC reports, including, but not limited to, in the section entitled “Item 1A. Risk Factors” in the Annual Report on Form 10-K filed by Apple Seven with the SEC on March 6, 2013 and the Annual Reports on Form 10-K filed by Apple Eight and Apple Nine, respectively, with the SEC on March 7, 2013. Any forward-looking statement speaks only as of the date of this report and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new developments or otherwise.

Item 8.01.

Other Events.

On August 8, 2013, the Companies issued a joint press release, which is filed as Exhibit 99.9 hereto and is incorporated herein by reference, announcing, among other things, the Companies’ entry into the Merger Agreement.

Item 9.01.

Financial Statements and Exhibits.

d. Exhibits.

2.1		Agreement and Plan of Merger, dated as of August 7, 2013, among Apple REIT Seven, Inc., Apple REIT Eight, Inc., Apple REIT Nine, Inc., Apple Seven Acquisition Sub, Inc. and Apple REIT Eight Acquisition Sub, Inc. (Apple Nine hereby agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request)

99.1		Form of First Apple Nine Articles Amendment

99.2		Form of Second Apple Nine Articles Amendment

99.3		Form of Apple Nine Bylaws Amendment

99.4		Voting Agreement, dated as of August 7, 2013, among Apple REIT Seven, Inc., Apple REIT Eight, Inc., Apple REIT Nine, Inc. and Glade M. Knight

99.5		Form of Conversion Agreement

99.6		Termination Agreement, dated as of August 7, 2013, among Apple Seven Advisors, Inc., Apple Eight Advisors, Inc., Apple Suites Realty Group, Inc., Apple REIT Seven, Inc., Apple REIT Eight, Inc. and Apple REIT Nine, Inc.

99.7		Subcontract Agreement, dated as of August 7, 2013, between Apple REIT Nine, Inc. and Apple Ten Advisors, Inc.

99.8		Assignment and Transfer Agreement, dated as of August 7, 2013, among Apple Fund Management, LLC, Apple Nine Advisors, Inc. and Apple REIT Nine, Inc.

99.9		Joint Press Release issued August 8, 2013

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


	APPLE REIT NINE, INC.

Date: August 8, 2013	By:	/s/ Glade M. Knight
		Glade M. Knight
		Chief Executive Officer

Exhibit 2.1

AGREEMENT AND PLAN OF MERGER

Dated as of August 7, 2013

Among

APPLE REIT SEVEN, INC.,

APPLE REIT EIGHT, INC.,

APPLE REIT NINE, INC.,

APPLE SEVEN ACQUISITION SUB, INC.,

and

APPLE EIGHT ACQUISITION SUB, INC.

TABLE OF CONTENTS

			Page
ARTICLE I The Mergers			2
	Section 1.1	The Mergers	2
	Section 1.2	Closing	2
	Section 1.3	Effective Time	2
	Section 1.4	Effects of the Mergers	3
	Section 1.5	Articles and By-Laws	3
	Section 1.6	Apple Nine Articles and Bylaw Amendments	3
	Section 1.7	Directors	4
	Section 1.8	Officers	4
	Section 1.9	Additional Directors of Apple Nine	4

ARTICLE II Effect of the Mergers on the Capital Stock of the Constituent Corporations			4
	Section 2.1	Effect on Capital Stock	4
	Section 2.2	Exchange Procedures	7
	Section 2.3	Appraisal Rights	8
	Section 2.4	Further Assurances	8

ARTICLE III Representations and Warranties			9
	Section 3.1	Representations and Warranties of the Companies	9
	Section 3.2	Representations and Warranties of Apple Nine and Acquisition Subsidiaries	28

ARTICLE IV Covenants			46
	Section 4.1	Conduct of Business by the Companies	46
	Section 4.2	Conduct of Business by Apple Nine and Acquisition Subsidiaries	49
	Section 4.3	Other Actions	52
	Section 4.4	Control of Other Party’s Business	52

ARTICLE V Additional Covenants			52
	Section 5.1	Preparation of the Registration Statement and the Proxy Statement; Shareholder Meetings	52
	Section 5.2	Access to Information; Confidentiality	54
	Section 5.3	Best Efforts; Notification	55
	Section 5.4	No Solicitation of Transactions	56

TABLE OF CONTENTS

(continued)

			Page
	Section 5.5	Public Announcements	58
	Section 5.6	Transfer Taxes	58
	Section 5.7	Certain Transactions	58
	Section 5.8	Indemnification of Directors, Officers, Employees or Agents of the Companies	58
	Section 5.9	Litigation	59
	Section 5.10	Section 16 Matters	59

ARTICLE VI Conditions Precedent			60
	Section 6.1	Conditions to Each Party’s Obligation to Effect the Merger	60
	Section 6.2	Conditions to Obligations of Apple Nine and Acquisition Subsidiaries	61
	Section 6.3	Conditions to Obligation of the Companies	62

ARTICLE VII Board Actions			64
	Section 7.1	Board Actions	64
	Section 7.2	Definition of Superior Competing Transaction	65

ARTICLE VIII Termination, Amendment and Waiver			65
	Section 8.1	Termination	65
	Section 8.2	Expenses	66
	Section 8.3	Effect of Termination	67
	Section 8.4	Escrow of Termination Fee	68
	Section 8.5	Amendment; Actions	69
	Section 8.6	Extension; Waiver	70

ARTICLE IX General Provisions			70
	Section 9.1	Nonsurvival of Representations and Warranties	70
	Section 9.2	Notices	70
	Section 9.3	Interpretation	72
	Section 9.4	Counterparts	72
	Section 9.5	Entire Agreement; No Third-Party Beneficiaries	72
	Section 9.6	Governing Law	72
	Section 9.7	Assignment	72
	Section 9.8	Enforcement	72

TABLE OF CONTENTS

(continued)

			Page
	Section 9.9	Incorporation	73
	Section 9.10	Non-Recourse	73
	Section 9.11	Severability	73

ARTICLE X Certain Definitions			73
	Section 10.1	Certain Definitions	73
	Section 10.2	Other Defined Terms	77

EXHIBITS

Exhibit A	-	Voting Agreement
Exhibit B	-	Apple Seven Plan of Merger
Exhibit C	-	Apple Eight Plan of Merger
Exhibit D-1	-	First Apple Nine Articles Amendment
Exhibit D-2	-	Second Apple Nine Articles Amendment
Exhibit E	-	Post Merger Capitalization
Exhibit F	-	List of Terminated Contracts
Exhibit G	-	Termination Agreement
Exhibit H	-	Subcontract Agreement
Exhibit I	-	Assignment and Transfer Agreement

iii

AGREEMENT AND PLAN OF MERGER (the “Agreement”), dated as of August 7, 2013, among APPLE REIT SEVEN, INC., a Virginia corporation (“Apple Seven”), APPLE REIT EIGHT, INC., a Virginia corporation (“Apple Eight”), (“Apple Eight,” and together with Apple Seven, the “Companies,” or individually a “Company”), APPLE REIT NINE, INC., a Virginia corporation (“Apple Nine,” and together with the Companies, the “Apple REITs,” or individually an “Apple REIT”), and APPLE SEVEN ACQUISITION SUB, INC. a Virginia corporation and wholly-owned subsidiary of Apple Nine (“Seven Acquisition Sub”), and APPLE EIGHT ACQUISITION SUB, INC., a Virginia corporation and wholly-owned subsidiary of Apple Nine (“Eight Acquisition Sub”, and together with Seven Acquisition Sub, the “Acquisition Subsidiaries,” or individually an “Acquisition Subsidiary”).

RECITALS

WHEREAS, the Board of Directors of each of the Apple REITs, based on the unanimous recommendation of a special transaction committee thereof consisting solely of non-employee directors of each Apple REIT (each, a “Special Committee”), has determined that it is advisable and in the best interest of its respective company and its respective shareholders to consummate the transactions described herein, pursuant to which Seven Acquisition Sub will merge with and into Apple Seven (the “Apple Seven Merger”), and Eight Acquisition Sub will merge with and into Apple Eight (the “Apple Eight Merger,” together with the Apple Seven Merger, the “Mergers,” or individually a “Merger”), and each of the Companies will be the surviving corporation (a “Surviving Corporation,” and collectively the “Surviving Corporations”) in such Mergers, each will become a wholly owned subsidiary of Apple Nine, and the issued and outstanding capital stock of each of the Companies will be converted into the right to receive the merger consideration provided herein.

WHEREAS, as an inducement to the Apple REITs to enter this Agreement, concurrent with the execution of this Agreement, Glade M. Knight (“Mr. Knight”) has entered into a voting agreement with each of the Apple REITs, attached hereto as Exhibit A (the “Voting Agreement”), pursuant to which Mr. Knight has agreed, among other things, to vote the Series B Convertible Preferred Shares, no par value, of each of the Apple REITs (the “Series B Convertible Shares”) held by Mr. Knight to approve this Agreement and the transactions contemplated hereby, including the Mergers.

WHEREAS, immediately before the Effective Time, pursuant to the Termination Agreement, among other things, the Advisory Agreement between Apple Nine and Apple Nine Advisors, Inc. will be terminated.

WHEREAS, pursuant to the terms of the Apple Nine Articles of Incorporation, the Voting Agreement and the conversion agreements, dated as of the date hereof (collectively, the “Conversion Agreements,” or individually a “Conversion Agreement”), between Apple Nine and the persons to whom Mr. Knight has assigned certain benefits associated with certain of his Series B Convertible Preferred Shares, no par value of Apple Nine (the “Apple Nine Series B Shares”), copies of which have been delivered to each of the Apple REITs, the Apple Nine Series B Shares will be converted into common shares, no par value, of Apple Nine (the “Apple Nine Common Shares”) immediately before the Effective Time.

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WHEREAS, the Apple REITs intend that for federal, and applicable state, income tax purposes the Mergers shall be treated as “reorganizations” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”) or alternatively as transactions defined in Section 351 of the Code. This Agreement shall constitute a plan of reorganization within the meaning of Treasury Regulation Section 1.368-2g.

Certain terms used herein shall have the meanings assigned to them in ARTICLE X .

NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements contained in this Agreement, the parties agree as follows:

ARTICLE I

THE MERGERS

Section 1.1 The Mergers . Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the Virginia Stock Corporation Act (the “VSCA”):

(a) Seven Acquisition Sub shall be merged with and into Apple Seven at the Effective Time in accordance with this Agreement and the Plan of Merger attached hereto as Exhibit B (the “Apple Seven Plan of Merger”).

(b) Eight Acquisition Sub shall be merged with and into Apple Eight at the Effective Time in accordance with this Agreement and the Plan of Merger attached hereto as Exhibit C (the “Apple Eight Plan of Merger”).

(c) Following each of the Mergers, the separate corporate existence of each of the Acquisition Subsidiaries shall cease and each Company shall continue as the Surviving Corporation of the Merger to which it is a party and shall succeed to and assume all the rights and obligations of the Acquisition Subsidiary party to such Merger, in accordance with the VSCA.

Section 1.2 Closing . The closing of the Mergers (the “Closing”) will take place at the offices of McGuireWoods LLP, 901 East Cary Street, Richmond, Virginia 23219 at 10:00 a.m., Eastern Time, as promptly as practicable (but no later than the second Business Day) after satisfaction or (to the extent permitted by applicable Law) waiver by the party or parties entitled to the benefits thereof of the conditions set forth in ARTICLE VI (other than those conditions that by their nature are to be satisfied by actions taken at the Closing, but subject to the satisfaction or waiver (to the extent permitted by applicable Law) of such conditions), or at such other place, time and date as shall be agreed in writing between the Apple REITs. The date on which the Closing occurs is referred to in this Agreement as the “Closing Date.”

Section 1.3 Effective Time . As soon as practicable on the Closing Date, the parties to each of the Mergers shall file articles of merger (the “Articles of Merger”) with respect to such Merger executed in accordance with Section 13.1-720 of the VSCA and shall make all other filings or recordings required under the VSCA to effect each such Merger. The Articles of Merger for each of the Mergers shall specify that such Merger shall become effective at such time and on such date as the Acquisition Subsidiaries and the Companies shall specify in the Articles of Merger with respect to the Mergers (the time on the date that the Mergers become

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effective being the “Effective Time”), it being understood that the parties to the Mergers shall cause the Effective Time to occur on the Closing Date.

Section 1.4 Effects of the Mergers . The Mergers shall have the effects set forth in the VSCA.

Section 1.5 Articles and By-Laws . The articles of incorporation and by-laws of each of the Acquisition Subsidiaries, in each case as in effect immediately prior to the Effective Time, shall become the articles of incorporation and by-laws of the applicable Surviving Corporation as of the Effective Time with the name of the Surviving Corporation changed to the name of the Company party to such Merger as of the Effective Time.

Section 1.6 Apple Nine Articles and Bylaw Amendments .

(a) Prior to or as of the Effective Time, the Articles of Incorporation of Apple Nine (the “Apple Nine Articles”) shall be amended, in accordance with Section 13.1-707 of the VSCA and the terms of the Apple Nine Articles, by the adoption of an amendment in accordance with Section 8.1 thereof to (1) increase the number of authorized Apple Nine Common Shares to 800,000,000, (2) add a provision permitting the Board of Directors or shareholders of Apple Nine to amend the Bylaws of Apple Nine in the event the Apple Nine Common Shares are to be listed on a national securities exchange and effective as of the date the Apple Nine Common Shares are first listed on a national securities exchange (the “Listing Date”), and (3) add restrictions on transfer and ownership of Apple Nine Common Shares to protect real estate investment trust (“REIT”) tax status, as set forth in the Articles of Amendment attached hereto as Exhibit D-1 (the “First Apple Nine Articles Amendment”). Pursuant to Section 13.1-730 A.5 of the VSCA, the Board of Directors of Apple Nine, based on the unanimous recommendation of its Special Committee, has provided that the holders of Apple Nine Common Shares shall be entitled to appraisal rights under Article 15 of the VSCA in the event the First Apple Nine Articles Amendment becomes effective.

(b) At the Shareholder Meeting (as defined in Section 5.1(c) ) of Apple Nine, Apple Nine shall submit for approval an amendment to the Apple Nine Articles providing for a 50% reverse stock split in the event the Apple Nine Common Shares are to be listed on a national securities exchange and effective as of the Listing Date, as set forth in the Articles of Amendment attached hereto as Exhibit D-2 (the “Second Apple Nine Articles Amendment” and together with the First Apple Nine Articles Amendment, the “Apple Nine Articles Amendments”), which amendment may, in the discretion of the Board of Directors of Apple Nine, be filed with the State Corporation Commission of the Commonwealth of Virginia within one year of the Shareholder Meeting of Apple Nine in order to implement such reverse stock split.

(c) As of the Effective Time, the Bylaws of Apple Nine (the “Apple Nine Bylaws”) shall be amended, in accordance with Section 13.1-714 of the VSCA and the terms of the Apple Nine Bylaws, by the adoption of an amendment in accordance with Section 12.1 thereof to (1) eliminate the provisions relating to restrictions on transfer and ownership to protect REIT tax status, and (2) enable the Board of Directors of Apple Nine to amend the Bylaws

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without shareholder approval upon a Listing Date (the “Apple Nine Bylaws Amendment,” and collectively with the Apple Nine Articles Amendments, the “Apple Nine Amendments”).

Section 1.7 Directors . The directors of each of the Acquisition Subsidiaries immediately prior to the Effective Time shall be the initial directors of the applicable Surviving Corporation and shall hold office until their respective successors are duly elected and qualified, or their earlier death, resignation or removal.

Section 1.8 Officers . The officers of each of the Acquisition Subsidiaries immediately prior to the Effective Time shall be the initial officers of the applicable Surviving Corporation and shall hold office until their respective successors are duly elected and qualified, or their earlier death, resignation or removal.

Section 1.9 Additional Directors of Apple Nine . Immediately following the Effective Time, the number of directors of Apple Nine shall be increased to seven and Glenn W. Bunting and Kent W. Colton shall be elected to serve as additional directors of Apple Nine and shall hold office until their respective successors are duly elected and qualified, or their earlier death, resignation or removal.

ARTICLE II

EFFECT OF THE MERGERS ON THE CAPITAL STOCK

OF THE CONSTITUENT CORPORATIONS

Section 2.1 Effect on Capital Stock .

(a) By virtue of the applicable Merger and without any action on the part of the holder of any outstanding capital stock of the Companies:

(i) Apple Seven Merger . At the Effective Time of the Apple Seven Merger, (a) each issued and outstanding common share, no par value, of Apple Seven (including any fractional shares) (the “Apple Seven Common Shares”) together with the related Series A Preferred Share, no par value, of Apple Seven (including any fractional shares) (the “Apple Seven Series A Shares,” and together with the Apple Seven Common Shares, the “Apple Seven Units”) (other than the Merger Dissenting Shares or any Shares to be cancelled pursuant to Section 2.1(a)(v) ) shall be converted into the right to receive 1.0 (the “Apple Seven Unit Ratio”) Apple Nine Common Shares (the “Apple Seven Unit Consideration”), and (b) each issued and outstanding Series B Convertible Preferred Share, no par value, of Apple Seven (the “Apple Seven Series B Shares”) shall be converted into the right to receive a number of Apple Nine Common Shares equal to (1) 24.17104 multiplied by (2) the Apple Seven Unit Ratio (the “Apple Seven Series B Consideration,” and together with the Apple Seven Unit Consideration, the “Apple Seven Consideration”).

(ii) Apple Eight Merger . At the Effective Time of the Apple Eight Merger, (a) each issued and outstanding common share, no par value, of Apple Eight (including fractional shares) (the “Apple Eight Common Shares”) together with the related Series A Preferred Share, no par value, of Apple Eight (including fractional shares) (the “Apple Eight Series A Shares,” and together with the Apple Eight Common

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Shares, the “Apple Eight Units”) (other than the Merger Dissenting Shares or any Shares to be cancelled pursuant to Section 2.1(a)(v) ) shall be converted into the right to receive .85 (the “Apple Eight Unit Ratio”) Apple Nine Common Shares (the “Apple Eight Unit Consideration”), and (b) each issued and outstanding Series B Convertible Preferred Share, no par value, of Apple Eight (the “Apple Eight Series B Shares”) shall be converted into the right to receive a number of Apple Nine Common Shares equal to (1) 24.17104 multiplied by (2) the Apple Eight Unit Ratio (the “Apple Eight Series B Consideration,” and together with the Apple Eight Unit Consideration, the “Apple Eight Consideration”). For purposes of this Agreement, “Merger Consideration” shall mean the aggregate of the Apple Seven Consideration and the Apple Eight Consideration.

(iii) Fractional Shares . Fractional Apple Nine Common Shares, rounded to three decimal places, shall be issued with respect to each Merger to the extent necessary.

(iv) Cancellation of Shares . Each Apple Seven Unit and Apple Eight Unit (including any fractional Units), issued and outstanding immediately prior to the Effective Time that is owned by any of the Apple REITs, the Acquisition Subsidiaries or any of their respective Subsidiaries shall no longer be outstanding and shall automatically be canceled and shall cease to exist, and no consideration shall be delivered in exchange therefor.

(v) All Shares converted pursuant to Section 2.1(a)(i) and (ii) , when so converted, shall no longer be outstanding and shall automatically be canceled and shall cease to exist, and each holder of a certificate that, immediately prior to the Effective Time, represented any such Shares shall cease to have any rights with respect thereto, except the right to receive the applicable Merger Consideration and any dividends or other distributions to which holders become entitled upon the surrender of such Shares in accordance with Section 2.2(d) , without interest.

(b) Surviving Corporations . By virtue of the Merger to which it is a party and without any action on the part of the holder thereof, each common share, no par value, of each Acquisition Subsidiary issued and outstanding immediately prior to the Effective Time shall automatically be converted into and thereafter represent one duly authorized, validly issued, fully paid and nonassessable common share, no par value, of the Surviving Corporation to such Merger, so that thereafter Apple Nine will be the sole and exclusive owner of the outstanding capital stock of each of the Surviving Corporations.

(c) Apple Nine Series B Shares . In accordance with the terms of the Apple Nine Articles of Incorporation as a result of termination of the Advisory Agreement between Apple Nine and Apple Nine Advisors, Inc. immediately before the Effective Time, and pursuant to the terms of the Voting Agreement and the Conversion Agreements, Mr. Knight and each person to whom Mr. Knight has assigned certain benefits with respect to a portion of his Apple Nine Series B Shares has agreed to convert each of the Apple Nine Series B Shares held by them into 24.17104 Apple Nine Common Shares immediately before the Effective Time.

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(d) Apple Nine Series A Shares . Upon the conversion of the Apple Nine Series B Shares into Apple Nine Common Shares, each Apple Nine Series A Preferred Share, no par value (the “Apple Nine Series A Shares”), associated with each issued and outstanding Apple Nine Common Share (collectively the “Apple Nine Units”) shall terminate automatically in accordance with Section 5.1(f) of the Apple Nine Articles and as a result each Apple Nine shareholder will only hold Apple Nine Common Shares.

(e) Stock Options .

(i) Apple Seven Options . Apple Seven shall take all requisite action so that at the Effective Time, each outstanding option issued by Apple Seven pursuant to any of its Stock Incentive Plans (an “Apple Seven Stock Option”) shall be converted into an option to acquire such number of Apple Nine Common Shares equal to the product of (x) the number of Apple Seven Units subject to such Apple Seven Stock Option multiplied by (y) the Apple Seven Unit Ratio, rounded down to the nearest whole share.

(ii) Apple Eight Options . Apple Eight shall take all requisite action so that at the Effective Time, each outstanding option issued by Apple Eight pursuant to any of its Stock Incentive Plans (an “Apple Eight Stock Option”) shall be converted into an option to acquire such number of Apple Nine Common Shares equal to the product of (x) the number of Apple Eight Units subject to such Apple Eight Stock Option multiplied by (y) the Apple Eight Unit Ratio, rounded down to the nearest whole share.

(iii) New Apple Nine Stock Options . The terms and conditions of each option to acquire Apple Nine Common Shares resulting from the provisions of Section 2.1(e)(i) and (ii) (a “New Apple Nine Stock Option”) shall otherwise generally remain the same as the terms and conditions of such original Apple Seven Stock Option or Apple Eight Stock Option, as the case may be, after giving effect to any acceleration, lapse or other vesting occurring by reason of the Mergers, except that the exercise price per share of each New Apple Nine Stock Option shall be equal to the quotient of (i) the exercise price per share of such original option divided by (ii) the Apple Seven Unit Ratio or the Apple Eight Unit Ratio, as the case may be, rounded up to the nearest whole cent, or except as shall be reasonably necessary to reflect the conversion to an option on Apple Nine Common Shares or as may be required by applicable Law.

(iv) Apple Nine shall take all requisite action to convert each of the options of each of the Companies pursuant to the provisions of this Section 2.1(e) , at the Effective Time, including taking all corporate actions necessary to reserve for issuance a sufficient number of Apple Nine Common Shares for issuance upon exercise of the New Apple Nine Stock Options, which, upon issuance pursuant to and in accordance with the terms thereof, shall be duly authorized, validly issued, fully paid and nonassessable.

(f) Certain Adjustments . If, before the Effective Time (and as permitted by ARTICLE IV ), the outstanding Shares or Apple Nine Common Shares shall have been changed into a different number of shares or a different class of shares by reason of any stock dividend, subdivision, reorganization, reclassification, recapitalization, stock split, reverse stock split, combination or exchange of shares, or any similar event shall have occurred, then the Merger

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Consideration shall be appropriately and proportionately adjusted to provide to the holders of Shares and Apple Nine Common Shares the same economic effect as contemplated by this Agreement prior to such event.

(g) Post Merger Capitalization . Exhibit E attached hereto sets forth in detail the capitalization of Apple Nine immediately following the completion of the Mergers and assumes the exercise of no appraisal rights.

Section 2.2 Exchange Procedures .

(a) Exchange Agent . Prior to the Effective Time, Apple Nine shall appoint a bank or trust company, which shall be reasonably acceptable to each of the Companies, to act as exchange agent (the “Exchange Agent”) for the exchange of the issued and outstanding Shares for the Merger Consideration.

(b) Provision of Shares . Apple Nine shall provide to the Exchange Agent on or before the Effective Time, for the benefit of the holders of Shares, certificates representing a sufficient number of Apple Nine Common Shares to be exchanged for the issued and outstanding Shares pursuant to Section 2.1 . Apple Nine shall also make available from time to time after the Effective Time as necessary, cash in an amount sufficient to pay any dividends or distributions to which holders of Shares may be entitled pursuant to Section 2.2(d) .

(c) Exchange Procedures . As promptly as practicable after the Effective Time and in no event later than two Business Days following the Effective Time, the Exchange Agent shall mail to each holder of record of outstanding Shares that were converted into the right to receive the Merger Consideration pursuant to Section 2.1(a) a letter of notification (which shall be in a form and have such other provisions as reasonably agreed upon by the Apple REITs prior to the Effective Time) describing the applicable Merger Consideration issued to each such holder as a consequence of the Mergers.

(d) No Further Ownership Rights in Capital Stock of the Companies . The Merger Consideration issued upon exchange of the respective Shares of each of the Companies in accordance with the terms of this ARTICLE II shall be deemed to have been issued in full satisfaction of all rights pertaining to the Shares of each of the Companies, subject, however, to the obligation of each of the Companies to pay, without interest and not more than 60 days following the Effective Time, any dividends or make any other distributions with a record date prior to the Effective Time that may have been made by it on its Shares in accordance with the terms of this Agreement or prior to the date of this Agreement and which remain unpaid at the Effective Time and have not been paid prior to such exchange, and there shall be no further registration of transfers on the stock transfer books of the Companies of the Shares that were outstanding immediately prior to the Effective Time.

(e) No Liability . None of the Apple REITs, Acquisition Subsidiaries or the Exchange Agent shall be liable to any Person in respect of any Merger Consideration delivered to a public official pursuant to any applicable abandoned property, escheat or similar law. Any portion of the Merger Consideration delivered to the Exchange Agent pursuant to this Agreement that remains unclaimed for 12 months after the Effective Time shall be redelivered by the

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Exchange Agent to Apple Nine, upon demand, and any holders of Shares that have not been surrendered as contemplated by this Section 2.2 shall thereafter look only to Apple Nine for delivery of the Merger Consideration, subject to applicable abandoned property, escheat and other similar laws.

(f) Withholding Rights . Apple Nine, the Surviving Corporations and the Exchange Agent shall be entitled to deduct and withhold from the Merger Consideration otherwise payable pursuant to this Agreement to any holder of Shares such amounts as Apple Nine or the Exchange Agent as the case may be, is required to deduct and withhold with respect to the making of such payment under the Code or any provision of state, local or foreign tax law. To the extent that amounts are so withheld by Apple Nine, the Surviving Corporations or the Exchange Agent, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of Shares in respect of which such deduction and withholding was made by Apple Nine, the Surviving Corporations or the Exchange Agent as the case may be.

Section 2.3 Appraisal Rights .

(a) The Mergers . Notwithstanding anything in this Agreement to the contrary, holders of Shares who have properly exercised, perfected and not subsequently withdrawn or lost their appraisal rights with respect thereto in accordance with Article 15 of the VSCA (the “Merger Dissenting Shares”) shall not have any of such Merger Dissenting Shares converted into the right to receive, or become exchangeable for, the Merger Consideration. The holders of such Merger Dissenting Shares shall be entitled to obtain payment of the fair value of such Merger Dissenting Shares in accordance with the provisions of such Article 15 of the VSCA unless and until such holders fail to perfect or shall have effectively withdrawn or lost their dissenters’ rights under Article 15 of the VSCA. If, after the Effective Time, any such holder fails to perfect or shall have effectively withdrawn or lost such right, each of such holder’s Merger Dissenting Shares shall thereupon be treated as if it had been converted into the right to receive, and become exchangeable for, at the Effective Time, the Merger Consideration, as provided in Section 2.1 hereof. Apple Nine shall be responsible for all payments to be made under Article 15 of the VSCA in respect of Merger Dissenting Shares.

(b) The First Apple Nine Articles Amendment . Notwithstanding anything in this Agreement to the contrary, holders of Apple Nine Common Shares who have properly exercised, perfected and not subsequently withdrawn or lost their appraisal rights with respect thereto in accordance with Article 15 of the VSCA (the “Apple Nine Dissenting Shares” and together with the Merger Dissenting Shares, the “Dissenting Shares”) shall be entitled to obtain payment of the fair value of such Apple Nine Common Shares in accordance with the provisions of such Article 15 of the VSCA unless and until such holders fail to perfect or shall have effectively withdrawn or lost their dissenters’ rights under Article 15 of the VSCA. Apple Nine shall be responsible for all payments to be made under Article 15 of the VSCA in respect of Apple Nine Dissenting Shares.

Section 2.4 Further Assurances . If, at any time before or after the Effective Time, any of the parties hereto reasonably believes or is advised that any further instruments, deeds, assignments or assurances are reasonably necessary or desirable to consummate the Mergers or to carry out the purposes and intent of this Agreement at or after the Effective Time, then each of

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the Apple REITs, the Acquisition Subsidiaries and the Surviving Corporations and their respective officers and directors shall execute and deliver all such proper instruments, deeds, assignments or assurances and do all other things reasonably necessary or desirable to consummate the Mergers and to carry out the purposes and intent of this Agreement.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

Section 3.1 Representations and Warranties of the Companies . Except as disclosed in the Disclosure Letter of such Company, each of the Companies, as to itself and its Subsidiaries only, represents and warrants to Apple Nine, the Acquisition Subsidiaries and the other Company as follows:

(a) Organization, Standing and Corporate Power . Such Company is a corporation duly organized, validly existing and in good standing under the laws of the Commonwealth of Virginia and has the requisite corporate power and authority to operate its assets and properties and to carry on its business as it is now being conducted. Such Company is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the nature of its business or the ownership, operations or leasing of its properties makes such qualification, licensing or good standing necessary, other than in such jurisdictions where the failure to be so qualified, licensed or in good standing, individually or in the aggregate, would not have a Material Adverse Effect on such Company.

(b) Company Subsidiaries . Schedule 3.1(b) of the Disclosure Letter of such Company sets forth each Subsidiary of such Company and its respective jurisdiction of formation, each owner and the respective amount of such owner’s equity interest in such Subsidiary, and a list of each jurisdiction in which such Subsidiary is qualified or licensed to do business and each assumed name under which such Subsidiary conducts business in any jurisdiction. All the outstanding shares of capital stock of each Subsidiary of such Company that is a corporation have been duly authorized and validly issued, are fully paid and nonassessable and are owned by such Company, by another Subsidiary of such Company or by such Company and another Subsidiary of such Company, free and clear of all pledges, claims, liens, charges, encumbrances and security interests of any kind or nature whatsoever (collectively, “Liens”) and free of any preemptive rights or any other limitation or restriction (including any limitation or restriction on the right to vote, sell, transfer, register or otherwise dispose of the shares), and all equity interests in each Subsidiary of such Company that is a partnership, limited liability company or business trust are owned by such Company, by another Subsidiary of such Company, or by such Company and another Subsidiary of such Company, free and clear of all Liens and free of any preemptive rights or any other limitation or restriction (including any limitation or restriction on the right to vote, sell, transfer, register or otherwise dispose of the equity interests). There are no outstanding options, warrants or other rights to acquire ownership interests of or from any Subsidiary of such Company. Each Subsidiary of such Company that is a corporation is duly incorporated and validly existing under the laws of its jurisdiction of incorporation and has the requisite corporate power and authority to carry on its business as now being conducted and each Subsidiary of such Company that is a partnership, limited liability company or business trust is duly organized and validly existing and in good standing under the laws of its jurisdiction of organization and has the requisite power and authority to carry on its

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business as now being conducted. Each Subsidiary of such Company is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the nature of its business or the ownership, operation or leasing of its properties makes such qualification, licensing or good standing necessary, other than in such jurisdictions where the failure to be so qualified, licensed or in good standing, individually or in the aggregate, would not have a Material Adverse Effect on such Company. Except for interests in the Subsidiaries of such Company and investments in short-term investment securities, neither such Company nor any Subsidiary of such Company owns directly or indirectly any capital stock or other interest (equity or debt) in any other Person.

(c) Capital Structure . Schedule 3.1(c) of the Disclosure Letter of such Company is a true and complete list of (i) the authorized capital stock of such Company, (ii) the issued and outstanding shares of capital stock of such Company, and (iii) the number of shares of capital stock of such Company reserved for issuance upon exercise of the outstanding stock options of such Company under the Stock Incentive Plans of such Company. All outstanding shares of capital stock of such Company are, and all shares of capital stock reserved for issuance by such Company will be upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any preemptive right, purchase option, call option, right of first refusal, subscription or any other similar right. Schedule 3.1(c) of the Disclosure Letter of such Company is a true and complete list, as of the date hereof, of all outstanding stock options to purchase capital stock of such Company under the Stock Incentive Plans of such Company, the number of shares of capital stock subject to each such option, the exercise price, date of grant and the names and of holders thereof. Each such option was granted in compliance in all material respects with all applicable Laws and all of the terms and conditions of the Stock Incentive Plans of such Company pursuant to which it was issued. On the date of this Agreement, except as set forth on Schedule 3.1(c) of the Disclosure Letter of such Company, no shares of capital stock or other voting securities of such Company were issued, reserved for issuance or outstanding. Except (i) for the shares of capital stock and the options as set forth on Schedule 3.1(c) of the Disclosure Letter of such Company, and (ii) as otherwise permitted under Section 4.1 , there are no outstanding securities, options, stock appreciation rights, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any kind to which such Company or any Subsidiary of such Company is a party or by which such entity is bound, obligating such Company or any Subsidiary of such Company to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock, voting securities or other ownership interests of such Company or any Subsidiary of such Company or obligating such Company or any Subsidiary of such Company to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. Except as set forth on Schedule 3.1(c) of the Disclosure Letter, Mr. Knight is the sole record owner of the Series B Convertible Shares of each of the Companies. All dividends or distributions on securities of such Company or any Subsidiary of such Company that have been declared or authorized prior to the date of this Agreement have been paid in full. There are no outstanding bonds, debentures, notes or other Indebtedness of such Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matter on which holders of shares of such Company may vote. Other than the Voting Agreement, there are no outstanding agreements to which such Company or any Subsidiary of such Company or any of their respective officers or directors is a party concerning

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the voting, sale, transfer or registration of any capital stock or other equity securities of the Company or any Subsidiary of such Company.

(d) Authority; Noncontravention; Consents .

(i) (A) Such Company has the requisite corporate power and authority to enter into this Agreement and, subject to the Shareholder Approval of such Company to consummate the Merger to which it is a party and the other transactions contemplated by this Agreement. The execution and delivery of this Agreement by such Company and the consummation by such Company of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of such Company and no other corporate proceedings on the part of such Company are necessary to authorize this Agreement or to consummate such transactions, subject to receipt of the Shareholder Approval of such Company. This Agreement has been duly executed and delivered by such Company and constitutes valid and binding obligations of such Company, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium or other similar laws relating to creditors’ rights and general principles of equity, whether considered in a proceeding at law or in equity.

(B) The Special Committee of such Company, at a meeting duly called and held, has by unanimous vote of all its members recommended that the Board of Directors of such Company approve and adopt this Agreement, the applicable Plan of Merger and the Ancillary Agreements to which such Company is a party and determined that the transactions contemplated hereby, including the Mergers, are advisable and in the best interests of, the shareholders of such Company. The Board of Directors of such Company, based on the unanimous recommendation of the Special Committee, has (i) determined that the transactions contemplated by this Agreement are advisable, and in the best interests of such Company and the shareholders of such Company, and (ii) approved and adopted this Agreement, the applicable Plan of Merger and the Ancillary Agreements to which such Company is a party and the transactions contemplated hereby and thereby, including the Mergers, and directed that this Agreement and the applicable Plan of Merger be submitted to a vote by such Company’s shareholders. The Board of Directors of such Company has not subsequently rescinded or modified, in any way, its determinations and approvals discussed above.

(ii) The execution and delivery of this Agreement by such Company do not, and the consummation of the transactions contemplated hereby and compliance by it with the provisions of this Agreement will not, conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time, or both) under, or require any consent, approval or notice under, or give rise to a right of termination, cancellation or acceleration of any material obligation or loss of a material benefit under, or result in the creation of any Lien upon any of the properties or assets of such Company or any Subsidiary of such Company under, or result in the triggering of any payments pursuant to, (A) the Organizational Documents of such Company, (B) any loan or credit agreement, note, bond, mortgage, indenture, lease, franchise agreement, license agreement, Permit or other agreement or instrument applicable to such Company or any Subsidiary of such Company or their respective properties or assets, (C) subject to the

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governmental filings and other matters referred to in the following sentence, any Laws applicable to such Company or any Subsidiary of such Company, or their respective properties or assets, other than, in the case of clause (B) or (C) , any such conflicts, violations, defaults, rights or Liens that, individually or in the aggregate would not (1) have a Material Adverse Effect on such Company or (2) reasonably be expected to otherwise prevent such Company from performing its obligations under this Agreement or the transactions contemplated hereby.

(iii) No material consent, approval, order or authorization of, or registration, declaration or filing with, any federal, state or local government or any court, administrative or regulatory agency or commission, governmental arbitrator or other governmental authority, instrumentality or agency, domestic or foreign (a “Governmental Entity”), is required by or with respect to such Company or any Subsidiary of such Company in connection with the execution and delivery of this Agreement by such Company or the consummation by it of any of the transactions contemplated hereby and thereby, except for (A) the filings with the Securities and Exchange Commission (the “SEC”) of (1) the preliminary and definitive Proxy Statement/Prospectus relating to the Shareholder Meeting for the Shareholder Approval of such Company and (2) such reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as may be required in connection with this Agreement, the Merger to which such Company is a party and the other transactions contemplated by this Agreement, (B) the filing of Articles of Merger for the Merger to which such Company is a party with the State Corporation Commission of the Commonwealth of Virginia, (C) such filings with Governmental Entities to satisfy the applicable requirements of the laws of states in which such Company and any Subsidiary of such Company are qualified or licensed to do business, as set forth on Schedule 3.1(d)(iii) of the Disclosure Letter of such Company and (D) such other consents, approvals, orders, authorizations, registrations, declarations and filings (1) as are set forth on Schedule 3.1(d)(iii) of the Disclosure Letter of such Company or (2) which, if not obtained or made, would not reasonably be expected to prevent or delay in any material respect the consummation of such Merger or the other transactions contemplated hereby or otherwise prevent such Company from performing its obligations under this Agreement in any material respect.

(e) SEC Documents; Financial Statements .

(i) Such Company has filed with the SEC all reports, schedules, forms, statements and other documents required to be filed by such Company since January 1, 2010 (as amended through the date hereof, the “SEC Documents of such Company”). All of the SEC Documents of such Company (other than preliminary material), as of their respective filing dates, were prepared in accordance with, in all material respects, and complied in all material respects with all applicable requirements of the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, as the case may be, and the rules and regulations of the SEC thereunder applicable to such SEC Documents of such Company. None of the SEC Documents of such Company, at the time of filing, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, except

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to the extent such statements have been modified or superseded by SEC Documents of such Company later filed by such Company. Such Company does not have any outstanding and unresolved comments from the SEC with respect to any of the SEC Documents of such Company. No Subsidiary of such Company is subject to the periodic reporting requirements of the Exchange Act or is otherwise required to file any forms, reports, schedules statements or other documents with the SEC, any foreign Governmental Entity that performs a similar function to that of the SEC or any securities exchange or quotation service. Such Company has made available to the other Apple REITs copies of all material correspondence between the SEC, on the one hand, and such Company and any of the Subsidiaries of such Company, on the other hand, since January 1, 2010 through the date of this Agreement. At all applicable times, such Company has complied in all material respects with the applicable certification requirements of the Sarbanes-Oxley Act of 2002 and rules and regulations promulgated thereunder, as amended from time to time (the “Sarbanes-Oxley Act”).

(ii) The audited consolidated financial statements and unaudited consolidated interim financial statements of such Company and its Subsidiaries included or incorporated by reference in the SEC Documents of such Company (including, in each case, any notes thereto) complied, as of their respective dates of filing with the SEC, in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto (including, without limitation, Regulation S-X), were prepared in accordance with United States generally accepted accounting principles (“GAAP”) (except, in the case of unaudited interim financial statements, as permitted by Forms 10-Q or 8-K of the SEC) applied on a consistent basis during the periods and at the dates involved (except as may be indicated in the notes thereto) and fairly present the consolidated financial condition of such Company and its Subsidiaries taken as a whole as of the dates thereof and consolidated results of operations and cash flows for the periods then ended (subject, in the case of unaudited interim financial statements, to the absence of notes and normal year-end adjustments). The books of account and other financial records of such Company and its Subsidiaries are accurately reflected in all material respects in the financial statements included in the SEC Documents of such Company. Such Company has no Subsidiary which is not consolidated for accounting purposes.

(iii) There are no material weaknesses in the design or operation of internal controls over financial reporting that are reasonably likely to adversely affect such Company’s ability to record, process, summarize and report financial data. Such Company has established and maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) designed to ensure that material information relating to such Company, including its consolidated Subsidiaries, is made known to its principal executive officer and principal financial officer. Such Company has evaluated the effectiveness of such Company’s disclosure controls and procedures and, to the extent required by applicable Law, presented in any applicable SEC Documents of such Company that is a report on Form 10-K or Form 10-Q, or any amendment thereto, its conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by such report or amendment based on such evaluation. To such Company’s Knowledge, such disclosure controls and

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procedures are effective in timely alerting such Company’s principal executive officer and principal financial officer to information required to be included in such Company’s periodic reports required under the Exchange Act. Since the enactment of the Sarbanes-Oxley Act, neither such Company nor any Subsidiary of such Company has made any prohibited loans to any director or executive officer of such Company (as defined in Rule 3b-7 under the Exchange Act).

(iv) Neither such Company nor any of its Subsidiaries is a party to, or has any commitment to become a party to, any joint venture, off-balance sheet partnership or any similar contract (including any contract or arrangement relating to any transaction or relationship between or among such Company or any of its Subsidiaries, on the one hand, and any unconsolidated Affiliate, including any structured finance, special purpose or limited purpose entity or Person, on the other hand), or any “off-balance sheet arrangements” (as defined in Item 303(a) of Regulation S-K of the Securities Act), where the result, purpose or effect of such contract is to avoid disclosure of any material transaction involving, or material liabilities of, such Company or any of its Subsidiaries in such Company’s or the Subsidiaries’ published financial statements or any of the SEC Documents of such Company.

(f) Absence of Certain Changes or Events . Except as disclosed in the SEC Documents of such Company, since December 31, 2012 (the “Financial Statement Date”) and through the date of this Agreement, such Company and its Subsidiaries have conducted their respective businesses only in the ordinary course consistent with past practices and there has not been (i) a Material Adverse Effect on such Company, nor has there been any occurrence or circumstance that, individually or in the aggregate, has had, or would with the passage of time reasonably be expected to result in, a Material Adverse Effect on such Company, (ii) except for regular monthly distributions (in the case of such Company) not in excess of the per share amount as set forth on Schedule 3.1(f) of the Disclosure Letter of such Company with customary record and payment dates, any declaration, setting aside or payment of any dividend or other distribution (whether in cash, stock or property) with respect to any outstanding security of such Company or any Subsidiary of such Company, (iii) any split, combination or reclassification of any capital stock of such Company or any issuance or the authorization of any issuance of any other securities of such Company in respect of, in lieu of or in substitution for, or giving the right to acquire by exchange or exercise, shares of beneficial interest of such Company or any issuance of an ownership interest in, any Subsidiary of such Company except as contemplated by this Agreement, (iv) any issuance of options of such Company except in the ordinary course of business or restricted shares of the capital stock of such Company, (v) any amendment of any term of any outstanding security of such Company or any Subsidiary of such Company, (vi) any repurchase, redemption or other acquisition by such Company or any Subsidiary of such Company of any outstanding shares, stock or other securities of, or other ownership interests in, such Company or any Subsidiary of such Company, (vii) any damage or destruction to or loss of the Property of such Company, not covered by insurance, that, individually or in the aggregate, has or would have a Material Adverse Effect on such Company, (viii) any change in accounting methods, principles or practices or any change in any tax method or election, that, individually or in the aggregate, has or would have a Material Adverse Effect on such Company, by such Company or any Subsidiary of such Company materially affecting its assets, liabilities or business, except insofar as may have been required by a change in GAAP or regulatory

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accounting principles, (ix) the entering into or amendment of any employment, consulting, severance, retention, change in control, tax gross-up, deferred compensation, special or stay bonus, or any other agreement between such Company and any officer or any director of a Subsidiary of such Company or other employee or contractor of such Company, (x) any increase in the amount of compensation, bonus or other benefits payable to any current or former director, trustee, officer or other employee (other than in the ordinary course of business consistent with past practices), of such Company or its Subsidiaries, (xi) any grant of severance or termination pay or benefits (or any increase in the amount of such pay or benefits) to any current or former director, trustee, officer or other employee of such Company or the Subsidiaries of such Company that would be payable at or after the Effective Time, (xii) any material incurrence, assumption or guarantee by such Company or any Subsidiary of such Company of any indebtedness, (xiii) any creation or assumption by such Company or any Subsidiary of such Company of any Lien in an amount, individually or in the aggregate, in excess of $500,000 on any asset, (xiv) any material commitment, contractual obligation (including any Franchise Agreement of such Company or any Management Agreement Documents of such Company, any lease (capital or otherwise) or any letter of intent), borrowing, guaranty, capital expenditure (outside the ordinary course) or transaction entered into by such Company or by any Subsidiary of such Company, or (xv) any making of any material loan, advance or capital contribution to or investment in any Person.

(g) Litigation . There is no pending or, to the Knowledge of such Company, threatened material Legal Action or material investigation pending by a Governmental Entity against or affecting (i) such Company or any Subsidiary of such Company or any asset of such Company or any Subsidiary of such Company or (ii) any director, officer or employee of such Company or any Subsidiary of such Company or other Person for whom such Company or any Subsidiary of such Company may be liable, nor is there any judgment, decree, injunction, rule or order of any Governmental Entity or arbitrator outstanding against such Company or any Subsidiary of such Company. Other than pursuant to the Organizational Documents of such Company, no Contract between such Company or any Subsidiary of such Company and any current or former director, officer, employee or shareholder (or equivalent interest holder) exists that provides for indemnification.

(h) Taxes .

(i) Such Company and each Subsidiary of such Company have timely filed all material Tax Returns and reports required to be filed by it (after giving effect to any filing extension properly granted by a Governmental Entity having authority to do so). All such Tax Returns are true, correct and complete in all material respects. Such Company and each Subsidiary of such Company have paid (or such Company has paid on their behalf), within the time and manner prescribed by law, all material Taxes shown as due and payable on such Tax Returns. The most recent financial statements contained in the SEC Documents of such Company filed with the SEC prior to the date of this Agreement reflect an adequate reserve or accrued liabilities or expenses for all Taxes due and payable by such Company and its Subsidiaries as a group for all taxable periods and portions thereof through the date of such financial statements, except for failures to reflect adequate reserves that would not in the aggregate be material. Such Company and its Subsidiaries (as a group) have established on their books and records (which may, but

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are not required to, be reflected only on the books and records of such Company) reserves or accrued liabilities or expenses that are adequate for the payment of all material Taxes for which such Company or any Subsidiary of such Company is liable but which are not yet due and payable. Such Company has incurred no liability for any Taxes under Sections 857(b), 860(c) or 4981 of the Code or Treasury Regulation Sections 1.337(d)-5, 1.337(d)-6 or 1.337(d)-7 (other than built-in gain to Apple Eight in connection with the purchase of its Subsidiaries interest in Apple Hospitality Air LLC from a subsidiary of Apple Six), including, without limitation, any Tax arising from a prohibited transaction described in Section 857(b)(6) of the Code and the excise tax on redetermined rents, redetermined deductions, and excess interest under Section 857(b)(7) of the Code; and neither such Company nor any of its Subsidiaries has incurred any material liability for Taxes other than in the ordinary course of business and other than transfer or similar Taxes arising in connection with the sale of property. No material deficiencies for Taxes have been asserted or assessed in writing by a Governmental Entity against such Company or any of its Subsidiaries, and no requests for waivers of the time to assess any such Taxes have been granted and remain in effect or are pending. No material claim is pending or proposed by any Governmental Entity in any jurisdiction where such Company or any Subsidiary of such Company do not file Tax Returns that such Company or any Subsidiary of such Company is or may be subject to taxation by such jurisdiction, nor are there any facts that could reasonably be expected to give rise to such a claim. Copies of all material Tax Returns with respect to taxable years commencing on or after the taxable year ending December 31, 2008 have been delivered to or made available to representatives of the other Apple REITs. For purposes of this Agreement, “Taxes” shall mean any U.S. federal, state, local or foreign income, gross receipts, license, payroll, employment withholding, property, sales, excise or other tax or governmental charges of any nature whatsoever, together with any penalties, interest or additions thereto and “Tax Return” shall mean any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

(ii) Such Company (A) for all of its taxable years beginning either (i) upon formation or (ii) upon the commencement of the first taxable year following the year of its formation through the most recent December 31, has been subject to taxation as a REIT under the Code within the meaning of Section 856 of the Code and has satisfied the requirements to qualify as a REIT for such years, (B) has operated, and intends to continue to operate, in such a manner as to qualify as a REIT upon closing of the transactions contemplated hereby, and (C) has not taken or omitted to take any action which could reasonably be expected to result in a challenge by the Internal Revenue Service (“IRS”) to its status as a REIT, and, to the Knowledge of such Company, no such challenge is pending or threatened in writing. Each Subsidiary of such Company that files Tax Returns as a partnership (or is a disregarded entity), for U.S. federal income tax purposes has, since inception, been classified for federal income tax purposes as a partnership (or as a disregarded entity) and not as a corporation or as an association taxable as a corporation, or a “publicly traded partnership” within the meaning of Section 7704(b) of the Code that is treated as a corporation for U.S. federal income tax purposes under Section 7704(a) of the Code. Each Subsidiary of such Company which is a corporation has been since its formation classified as a qualified REIT subsidiary under

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Section 856(i) of the Code, a taxable REIT subsidiary under Section 856(l) of the Code or as a REIT.

(iii) (A) Neither such Company nor any Subsidiary of such Company is a party to any material pending action or proceeding, including any audit or contest, by any Governmental Entity with regard to Taxes or Tax Returns of such Company or any Subsidiary of such Company; (B) no material written claim for assessment or collection of Taxes has been asserted against such Company or any Subsidiary of such Company; (C) there are no audits pending with or proposed in writing by any taxing authority with respect to any material Taxes or Tax Returns of such Company or any Subsidiary of such Company; and (D) neither such Company nor any Subsidiary of such Company has requested, received or is subject to any written ruling of a taxing authority or has entered into any written agreement with a taxing authority with respect to any Taxes.

(iv) Such Company does not have any earnings and profits attributable to such Company or any other corporation for any non-REIT year within the meaning of Section 857 of the Code.

(v) Neither such Company nor any Subsidiary of such Company has made any payments, or is obligated to make any payments, or is a party to an agreement that could obligate it to make any payments that will not be deductible under Section 280G of the Code.

(vi) Neither such Company nor its Subsidiaries is or has been a party to any Tax allocation or sharing agreement.

(vii) Neither such Company nor its Subsidiaries has any liability for the Taxes of any Person other than such Company and its Subsidiaries (A) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign Law) or (B) as a transferee or successor.

(viii) There are no Tax Protection Agreements for such Company.

(ix) All material amounts of Taxes which such Company or its Subsidiaries are required by Law to withhold or collect, including material Taxes required to have been withheld in connection with amounts paid or owing to any employee, independent contractor, creditor, shareholder or other third party and sales, gross receipts and use taxes, have been duly withheld or collected and, to the extent required, have been paid over to the proper Governmental Entities or, if not yet due, are held in separate bank accounts for such purpose. There are no Encumbrances for material Taxes upon the assets of such Company or its Subsidiaries except for statutory Liens for Taxes not yet due.

(x) None of the Company or any of its Subsidiaries has either been a “distributing corporation” or a “controlled corporation” in a distribution occurring during the last five years in which the parties to such distribution treated the distribution as one to which Section 355 of the Code is applicable.

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(i) Related Party Transactions . There is no (i) loan outstanding from or to any employee, officer or director of such Company or any Subsidiary of such Company, (ii) employment or severance contract or other arrangement with respect to severance with respect to any employee, officer or director of such Company or any Subsidiary of such Company, or (iii) any agreement to appoint or nominate any person as a director of such Company or any Subsidiary of such Company. Except for compensation, benefits and advances received in the ordinary course of business by employees, directors or consultants of such Company or its Subsidiaries, there are no arrangements, agreements or contracts which continue in effect as of the date hereof entered into by such Company or any of its Subsidiaries, on the one hand, and any Person who is an officer, director or affiliate of such Company or any Subsidiary of such Company, any member of the “immediate family” (as such term is defined in Item 404 of Regulation S-K promulgated under the Securities Act) of the foregoing or an entity of which any of the foregoing is an Affiliate, on the other hand. True and materially complete copies of all such documents have been made available to the other Apple REITs prior to the date hereof and each such document is listed on Schedule 3.1(i) of the Disclosure Letter of such Company. Except as set forth on Schedule 3.1(i) of the Disclosure Letter or as contemplated by this Agreement, neither such Company nor any of its Subsidiaries is a party to any agreement or arrangement with Mr. Knight or his Affiliates.

(j) Opinion of Financial Advisor; No Brokers . The financial advisor identified on Schedule 3.1(j) of the Disclosure Letter of such Company has delivered its opinion, addressed to the Special Committee of such Company to the effect that, as of the date of such opinion and subject to the qualifications, assumptions and limitations set forth therein, the applicable Unit Ratio is fair, from a financial point of view, to the holders of Units of such Company (other than the other Apple REITs and their respective Affiliates). It is agreed and understood that each such opinion is for the Special Committee to whom it is addressed and may not be relied upon by Apple Nine or the Acquisition Subsidiaries. As of the date of this Agreement, such opinion has not been withdrawn, revoked or modified in any material respect. Such Company will provide to the other Apple REITs, solely for informational purposes, a photocopy of the written version of the opinion described in this Section 3.1(j) after receipt thereof by such Company. Except for the financial advisor identified on Schedule 3.1(j) of the Disclosure Letter of such Company, no broker, investment banker, financial advisor or other Person is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with the transactions contemplated hereby based upon arrangements made by or on behalf of such Company or any Subsidiary of such Company. Such Company has provided or made available to the other Apple REITs true and correct copies of any and all contracts and agreements pursuant to which any financial advisor would be entitled to receive any brokerage, finder’s or other fee or commission from such Company or any Subsidiary of such Company in connection with this Agreement, the Mergers or any of the transactions contemplated hereby.

(k) Permits; Compliance with Laws .

(i) Such Company and its Subsidiaries, or the management companies for the Properties of such Company, own and/or possess all franchises, grants, easements, consents, certificates, permits, licenses (including liquor licenses), variances, authorizations, exemptions, orders, registrations and approvals of all Governmental Entities (the “Permits”) necessary for it to own, lease and operate the properties and

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assets of such Company or to carry on the business of such Company as it is now being conducted by such Company, except where the failure to have such Permits, individually or in the aggregate, would not have a Material Adverse Effect on such Company. All such Permits of such Company are in full force and effect. Neither such Company nor any Subsidiary of such Company has received notice that any suspension, modification or revocation of any Permit is pending or, to the Knowledge of such Company, threatened nor, to the Knowledge of such Company, do grounds exist for any such action, except for such suspensions, modifications or revocations, individually or in the aggregate, as would not have a Material Adverse Effect on such Company.

(ii) Neither such Company nor any of its Subsidiaries has violated or failed to comply with any such Permit, or any statute, law, ordinance, regulation, rule, judgment, decree or order of any Governmental Entity applicable to its business, properties or operations, except for violations and failures to comply that would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect on such Company.

(iii) To the Knowledge of such Company, neither such Company nor any Subsidiary of such Company nor any director, officer, agent or employee of such Company or any Subsidiary of such Company has taken any action, directly or indirectly, that would constitute a violation in any material respect by such Persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”), including making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any “foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA.

(l) Contracts .

(i) Except for Contracts which are entered into by a third-party manager on behalf of such Company pursuant to any Management Agreement Document of such Company or Contracts which such Company was required to enter into pursuant to the terms of a Management Agreement Document of such Company, none of which are material to such Company, Schedule 3.1(l)(i) of the Disclosure Letter of such Company contains a list of the following Contracts such Company or any Subsidiary of such Company is party thereto as of the date hereof:

(A) any lease of personal property with third parties other than such Company or any Subsidiary of such Company, providing for annual rentals of $500,000 or more;

(B) any lease, sublease, license or occupancy agreement of real property with third parties other than such Company or any Subsidiary of such Company, providing for annual rentals of $500,000 or more;

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(C) any partnership, limited liability company agreement, joint venture or other similar agreement or arrangement relating to the formation, creation, operation, management or control of any partnership or joint venture, which is not a wholly-owned Subsidiary of such Company;

(D) any Contract under which indebtedness for borrowed money is outstanding in an amount in excess of $500,000 (including guarantees) or may be incurred or pursuant to which any property or asset of such Company or any Subsidiary of such Company is mortgaged, pledged or otherwise subject to a Lien, or any Contract restricting the incurrence of indebtedness or the incurrence of Liens or restricting the payment of dividends or the transfer of any Property of such Company or a Subsidiary of such Company;

(E) any Contract with current or ongoing obligations (as to such Company) currently required to be filed as an exhibit to the Annual Report of such Company on Form 10−K pursuant to Item 601(b)(10) of Regulation S−K under the Securities Act;

(F) any Contract that purports to limit in any respect the right of such Company or its Subsidiaries or any Affiliate of such Company (1) to engage in any line of business, or (2) to compete with any person or operate in any location;

(G) any Contract providing for the sale or exchange of, or option, right of first refusal or offer, or similar right, to sell or exchange, any of the Properties of such Company, or for the purchase or exchange of, or option, right of first refusal or offer, or similar right to purchase or exchange, any real estate entered into in the past two years or in respect of which the applicable transaction had not been consummated;

(H) any Contract entered into in the past two years or in respect of which the applicable transaction had not been consummated for the acquisition or disposition, directly or indirectly (by merger or otherwise), of assets (other than Contracts referenced in clause (G) of this Section 3.1(l)(i) ) or capital stock or other equity interests of another Person for aggregate consideration in excess of $500,000, in each case other than in the ordinary course of business and in a manner consistent with past practice;

(I) any Contract pursuant to which such Company, any Subsidiary of such Company or any other Person manages any real property;

(J) other than Contracts for ordinary repair and maintenance, any Contract relating to the development or construction of, or additions or expansions to, the Properties of such Company, under which such Company or any Subsidiary of such Company has, or expects to incur, an obligation in excess of $1,000,000 in the aggregate that has not been satisfied as of the date hereof;

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(K) any Contract to which such Company or any Subsidiary of such Company has continuing indemnification obligations relating to the settlement or proposed settlement of any Legal Action, which involves the issuance of equity securities or the payment of an amount, in any such case, having a value of more than $1,000,000;

(L) any Contract that provides for any unpaid settlement or proposed settlement of any Legal Action in which the amount to be paid in settlement is in excess of $500,000;

(M) any license, royalty or other Contract concerning Intellectual Property the absence of which would have, individually or in the aggregate, a Material Adverse Effect on such Company and its Subsidiaries;

(N) any Contract that is material to such Company and any Subsidiary of such Company, taken as a whole, and contains any so-called “most favored nations” or similar provisions requiring such Company or any Subsidiary of such Company to offer a Person any terms or conditions that are at least as favorable as those offered to any other Person;

(O) any Contract that provides for a guarantee in an amount in excess of $500,000 of the obligations of any Person that is not such Company or any Subsidiary of such Company; and

(P) any Contract (other than Contracts referenced in clauses (A) through (O) of this Section 3.1(l)(i) ) which by its terms calls for payments by or liability of such Company or any Subsidiary of such Company in excess of $500,000 other than any Contract under this clause (P) that, by its terms, is terminable within six months of this Agreement (without termination fee or penalty). The Contracts described in clauses (A) through (P) and those required to be identified on Schedule 3.1(l)(i) of the Disclosure Letter of such Company, the Franchise Agreements of such Company and the Management Agreement Documents of such Company, in each case together with all exhibits and schedules thereto being, the “Material Contracts of such Company.”

(ii) Except for such breaches and defaults as, individually or in the aggregate, would not result in a Material Adverse Effect on such Company, (A) neither such Company nor any Subsidiary of such Company is and, to such Company’s Knowledge, no other party is in breach or violation of, or default under, any Material Contract of such Company, (B) none of such Company or any of its Subsidiaries has received any claim of default under any such Material Contract of such Company, and (C) no event has occurred which would result in a breach or violation of, or a default under, any Material Contract of such Company (in each case, with or without notice or lapse of time or both). Each Material Contract of such Company is valid, binding and enforceable in accordance with its terms and is in full force and effect. Such Company has made available to the other Apple REITs true and complete copies of all Material Contracts of such Company, including any amendments or supplements thereto.

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(iii) There are no Contracts or material transactions between such Company or any Subsidiary of such Company, on the one hand, and any (A) officer or director of such Company or any Subsidiary of such Company, (B) record or beneficial owner of 5% or more of the voting securities of such Company, or (C) associate (as defined in Rule 12b-2 under the Exchange Act) or affiliate of any such officer, director or record or beneficial owner of such Company, on the other hand.

(m) Environmental Matters .

(i) Such Company and each Subsidiary of such Company has obtained all licenses, permits, authorizations, approvals and consents from Governmental Entities which are required in respect of its business, operations, assets or properties under any applicable Environmental Laws and such Company and each Subsidiary of such Company is in compliance in all material respects with the terms and conditions of all such licenses, permits, authorizations, approvals and consents and with any applicable Environmental Laws except where failure to be in compliance would not, individually or in the aggregate, have a Material Adverse Effect on such Company, and there are no past or present actions, activities, circumstances, conditions, events or incidents that may prevent or interfere with such compliance in all material respects in the future except where failure to be in compliance would not, individually or in the aggregate, have a Material Adverse Effect on such Company;

(ii) there is no Environmental Claim pending or threatened against such Company or any Subsidiary of such Company or, to the Knowledge of such Company, against any person or entity whose liability for any Environmental Claim the Company and each Subsidiary of such Company has or may have retained or assumed either contractually or by operation of Law, except for such Environmental Claims that would not, individually or in the aggregate, have a Material Adverse Effect on such Company;

(iii) neither such Company nor any Subsidiary of such Company nor, to the Knowledge of such Company, any other person has placed, stored, deposited, discharged, buried, dumped, disposed of or released any Hazardous Substances produced by, or resulting from any of such Company’s or any of such Company’s Subsidiaries’ operations, at any Properties of such Company, except for inventories of such substances to be used, and wastes generated therefrom, in the ordinary course of business of such Company and the Subsidiaries of such Company (which inventories and wastes, if any, were and are stored or disposed of in accordance with applicable Environmental Laws), and except as would not, individually or in the aggregate, have a Material Adverse Effect on such Company; and

(iv) neither such Company nor any Subsidiary of such Company has entered into or agreed to any consent decree or order or is subject to any outstanding judgment, decree or judicial order relating to compliance with Environmental Laws or the investigation, sampling, monitoring, treatment, remediation, removal or cleanup of Hazardous Substances with any Governmental Entity, except with regard to pre-existing contamination or remediation efforts for which such Company was and is not a

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responsible party (“Prior Contamination”) and, to the Knowledge of such Company, no investigation, litigation or other proceeding is pending or threatened with respect thereto, except as may be related to the Prior Contamination. For purposes of this Agreement, “Hazardous Substance” shall mean any element, pollutant, contaminant, waste, compound, substance or material of any nature whatsoever (including, without limitation, any product) that is listed, classified, defined in or regulated pursuant to any Environmental Law or the subject of regulatory action by any Governmental Entity pursuant to any Environmental Law, including, without limitation, any petroleum and petroleum derivatives, by-product or additive (including crude oil and any fraction thereof), asbestos, radon gas, urea formaldehyde, asbestos or asbestos-containing material, lead or lead-based paints or materials, pesticides, polychlorinated biphenyls, radioactive materials, toxic mold, volatile organic compound or hazardous air pollutant. To the Knowledge of such Company, such Company has made available to the other Apple REITs true and complete copies of all environmental reports and audits that are within the possession of such Company or within the possession or control of its Subsidiaries, and to the Knowledge of such Company, no other environmental reports or audits exist with respect to such Company, any Subsidiary of such Company or any Property of such Company.

(n) The Company Properties .

(i) Schedule 3.1(n)(i) of the Disclosure Letter of such Company lists each hotel (collectively, the “Owned Hotels of such Company”), and other parcels of real property currently owned or ground leased by such Company or any Subsidiary of such Company, and sets forth such Company or applicable Subsidiary of such Company owning such property (the “Properties of such Company”). Except as disclosed in title insurance policies and reports (and the documents or surveys referenced in such policies and reports) copies of which policies and reports were made available for review to the other Apple REITs: (A) such Company or a Subsidiary of such Company owns fee simple title to each of the Properties of such Company, free and clear of Liens, mortgages or deeds of trust, claims against title, charges which are liens, security interests or other encumbrances on title (“Encumbrances”) except for Encumbrances securing obligations disclosed in the consolidated balance sheets included in the SEC Documents of such Company, mechanics and materialmen’s liens for amounts incurred in the ordinary course of business and which are not yet due and payable or are being contested in good faith, Encumbrances for Taxes not yet due and payable or which are being contested in good faith and for which such Company has made adequate provision in accordance with GAAP, and easements, rights of way, restrictive covenants and other non-monetary Encumbrances which, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect on such Company; (B) except as would not have a Material Adverse Effect on such Company, neither such Company nor any Subsidiary of such Company has received written notice of any violation of any federal, state or municipal law, ordinance, order, regulation or requirement affecting any portion of any of the Properties of such Company issued by any Governmental Entity; and (C) except as would not have a Material Adverse Effect on such Company, neither such Company nor any Subsidiary of such Company has received notice to the effect that there are (1) condemnation or rezoning proceedings that are pending or threatened with respect to any

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of the Properties of such Company or (2) zoning, building or similar laws, codes, ordinances, orders or regulations that are or will be violated by the continued maintenance, operation or use of any buildings or other improvements on any of the Properties of such Company or by the continued maintenance, operation or use of the parking areas.

(ii) Schedule 3.1(n)(ii) of the Disclosure Letter of such Company lists each franchise, license or other similar agreement providing the right to utilize a brand name or other rights of a hotel chain or system at any of the Properties of such Company or any Subsidiary of such Company and sets forth such Company or any Subsidiary of such Company party to such agreement, the date of such agreement and each amendment, guaranty, or other agreement binding on such Company or any Subsidiary of such Company and relating thereto (collectively, “Franchise Agreements of such Company”). True, correct and complete copies of each of the Franchise Agreements of such Company have been made available to the other Apple REITs. Each Franchise Agreement of such Company is valid, binding and in full force and effect as against such Company or its Subsidiaries and, to the Knowledge of such Company, as against the other party thereto. Neither such Company nor any Subsidiary of such Company owes any termination, cancellation or other similar fees or any liquidated damages to any third party franchisor.

(iii) Schedule 3.1(n)(iii) of the Disclosure Letter of such Company lists each management agreement pursuant to which any third party manages or operates any of the Properties of such Company on behalf of such Company or any Subsidiary of such Company, and describes the property that is subject to such management agreement, such Company or Subsidiary of such Company that is a party, the date of such management agreement and each material amendment, guaranty or other agreement binding on such Company or any Subsidiary of such Company and relating thereto (collectively, the “Management Agreement Documents of such Company”). True, correct and complete copies of all Management Agreement Documents of such Company have been made available to the other Apple REITs. Each of the Management Agreement Documents of such Company is valid, binding and in full force and effect as against such Company or its Subsidiaries and, to the Knowledge of such Company, as against the other party thereto. Neither such Company nor any Subsidiary of such Company owes any termination, cancellation or other similar fees or any liquidated damages to any third party manager or operator.

(iv) Such Company has not received written notice of, nor does such Company have any Knowledge of, any latent defects or adverse physical conditions affecting any of the Properties of such Company or the improvements thereon, except as would not have a Material Adverse Effect on such Company.

(o) Personal Property . Such Company and its Subsidiaries have good and marketable title to, or a valid and enforceable leasehold interest in, all personal assets owned, used or held for use by them. Neither such Company’s nor its Subsidiaries’ ownership of any such personal property is subject to any Liens, other than Liens that, individually or in the aggregate, would not have a Material Adverse Effect on such Company.

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(p) Insurance . There is no claim by such Company or any Subsidiary of such Company pending under any material insurance policies owned or held by such Company and any Subsidiary of such Company which (i) has been denied or disputed by the insurer other than denials and disputes in the ordinary course of business consistent with past practice or (ii) if not paid, would have, individually or in the aggregate, a Material Adverse Effect on such Company. With respect to each such insurance policy, to the Knowledge of such Company, (A) the policy is legal, valid, binding and enforceable in accordance with its terms and is in full force and effect; (B) neither such Company nor any Subsidiary of such Company is in breach or default (including any such breach or default with respect to the payment of premiums or the giving of notice), and no event has occurred which, with notice or the lapse of time, would constitute such a breach or default, or permit termination or modification, under the policy; (C) as of the date hereof no insurer on the policy has been declared insolvent or placed in receivership, conservatorship or liquidation; (D) as of the date hereof no notice of cancellation or termination has been received; and (E) the policy is sufficient for compliance with all material requirements of Law and the express requirements of all Material Contracts of such Company to which such Company or its Subsidiaries are parties or otherwise bound. Such Company and its Subsidiaries maintain policies or binders of insurance covering risks and events and in amounts adequate for their respective businesses and operations to the extent customary in the industry in which they operate, and no such policies will terminate as a result of the consummation of the transactions contemplated by this Agreement.

(q) Information Supplied . None of the information provided or to be provided by such Company or any Subsidiary of such Company for inclusion or incorporation by reference in the Form S-4 will, at the time the Form S-4 is filed with the SEC, at any time it is amended or supplemented or at the time it becomes effective under the Securities Act, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading. None of the information provided by such Company or any Subsidiary of such Company for inclusion or incorporation by reference in the Proxy Statement/Prospectus will, at the date it is first mailed to such Company’s shareholders or at the time of such Company’s Shareholder Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Notwithstanding the foregoing provisions of this Section 3.1(q) , no representation or warranty is made by such Company with respect to information or statements made or incorporated by reference in the Form S-4 or the Proxy Statement/Prospectus that were not supplied by or on behalf of such Company.

(r) Books and Records .

(i) The books of account and other financial records of such Company and each Subsidiary of such Company are in all material respects true, complete and correct, have been maintained in accordance with good business practices, and are accurately reflected in all material respects in the financial statements included in the SEC Documents of such Company.

(ii) Such Company has made available to the other Apple REITs true, correct and complete copies of the Organizational Documents of such Company. Neither

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such Company nor any Subsidiary of such Company is, nor has such Company or any Subsidiary of such Company been, in violation of any of the Organizational Documents of such Company applicable to it in any material respect.

(iii) True, correct and complete copies of the minutes of all meetings of the shareholders, members, partners, the boards of directors or managers, as applicable, and each committee of the boards of directors or managers, as applicable, of such Company and each Subsidiary of such Company have been made available to the other Apple REITs.

(s) Labor Matters . Neither such Company nor any Subsidiary of such Company is a party to, or bound by, any collective bargaining agreement, contract or other agreement or understanding with a labor union or labor union organization. There is no unfair labor practice or labor arbitration proceeding pending or, to the Knowledge of such Company, threatened against such Company or any Subsidiary of such Company relating to their business, except for any such proceeding as would not have a Material Adverse Effect on such Company. To the Knowledge of such Company, there are no organizational efforts with respect to the formation of a collective bargaining unit presently being made or threatened involving employees of such Company or any Subsidiary of such Company. Since January 1, 2008, such Company and each Subsidiary of such Company has been in compliance in all material respects with all applicable Laws relating to employment of labor, including all applicable Laws relating to wages, hours, collective bargaining, employment discrimination, civil rights, safety and health, workers’ compensation, pay equity, classification of employees, and the collection and payment of withholding and/or social security taxes.

(t) Vote Required . The only vote of the holders of any class or series of such Company’s capital stock necessary (under applicable Law or otherwise) to approve, on behalf of such Company, the Merger to which such Company is a party, this Agreement, the Apple Seven Merger Plan or the Apple Eight Plan of Merger, as applicable, and the other transactions contemplated hereby is the Shareholder Approval of such Company.

(u) No Undisclosed Material Liabilities . Except as disclosed in the SEC Documents of such Company, and except for additional borrowings under such Company’s line of credit disclosed on Schedule 3.1(u) of the Disclosure Letter of such Company, there are no Liabilities of such Company or any of its Subsidiaries, and there is no existing condition, situation or set of circumstances that could reasonably be expected to result in such a Liability, other than: (i) Liabilities reserved for on the most recent balance sheet contained in the audited financial statements of such Company for the period ended December 31, 2012; (ii) Liabilities incurred in the ordinary course of business consistent with past practice of such Company subsequent to December 31, 2012 and (iii) such other Liabilities as would not, individually or in the aggregate, have a Material Adverse Effect on such Company.

(v) Intellectual Property . To the Knowledge of such Company (i) the conduct of the business of such Company and its Subsidiaries as currently conducted does not infringe upon or misappropriate the Intellectual Property rights of any third party, and no claim has been asserted to such Company or any Subsidiary of such Company that the conduct of the business of such Company and its Subsidiaries as currently conducted infringes upon or may infringe upon

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or misappropriates the Intellectual Property rights of any third party except for any such infringement, misappropriation or claim that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on such Company; and (ii) such Company or a Subsidiary of such Company owns or is licensed to use or otherwise has the right to use all Intellectual Property as currently used in the operation of its respective business, in accordance with the terms of any applicable license agreement except where the failure to possess or have adequate rights to use such properties individually or in the aggregate would not reasonably be expected to have a Material Adverse Effect on such Company.

(w) Benefit Plans; ERISA Compliance

(i) Other than the Stock Incentive Plans, neither such Company nor any Subsidiary of such Company has any bonus, pension, profit sharing, deferred compensation, incentive compensation, stock ownership, stock purchase, stock option, phantom stock, retirement, vacation, severance, disability, death benefit, hospitalization, medical or other employee benefit plan, arrangement or understanding (whether or not legally binding), including any “employee benefit plans,” within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), providing benefits to any current or former employee, officer or director of such Company or any Subsidiary of such Company or any person affiliated with such Company under Section 414(b), (c), (m) or (o) of the Code.

(ii) No director, officer, or employee of such Company will become entitled to retirement, severance or similar benefits or to enhanced or accelerated benefits (including any acceleration of vesting or lapsing of restrictions with respect to equity-based awards) as a result of consummation of the transactions contemplated by this Agreement.

(iii) No stock option granted by such Company under its respective Stock Incentive Plans (whether currently outstanding or previously exercised) has been granted with an exercise price that is less than the fair market value of the underlying stock on the date of grant, and no such stock option has been or would be, as applicable, subject to any Tax, penalty or interest under Section 409A of the Code.

(x) Antitakeover Statutes . Such Company and the Board of Directors of such Company have taken all action required to be taken by them to exempt this Agreement, the Mergers and the transactions contemplated hereby and thereby from the requirements of any “moratorium”, “control share”, “fair price”, “affiliate transaction”, “business combination” or other antitakeover laws and regulations of any state, including, without limitation, each of the provisions of Article 14 (Affiliated Transactions) and Article 14.1 (Control Share Acquisitions) of the VSCA.

(y) No Other Representations or Warranties . Except for the representations and warranties made by such Company in this Section 3.1 , such Company makes no representations or warranties, and such Company hereby disclaims any other representations or warranties, with respect to such Company and its Subsidiaries.

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Section 3.2 Representations and Warranties of Apple Nine and Acquisition Subsidiaries . Except as disclosed in the Disclosure Letter of Apple Nine, Apple Nine and each of the Acquisition Subsidiaries represent and warrant to each of the Companies as follows:

(a) Organization, Standing and Corporate Power . Apple Nine and each Acquisition Subsidiary is a corporation duly organized, validly existing and in good standing under the laws of the Commonwealth of Virginia and has the requisite corporate power and authority to operate its assets and properties and to carry on its business as it is now being conducted. Apple Nine and each Acquisition Subsidiary is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the nature of its business or the ownership, operations or leasing of its properties makes such qualification or licensing or good standing necessary, other than in such jurisdictions where the failure to be so qualified or licensed or in good standing, individually or in the aggregate, would not have a Material Adverse Effect on Apple Nine.

(b) Apple Nine Subsidiaries . Schedule 3.2(b) of the Apple Nine Disclosure Letter sets forth each Apple Nine Subsidiary and its respective jurisdiction of formation, each owner and the respective amount of such owner’s equity interest in each Apple Nine Subsidiary, and a list of each jurisdiction in which each Apple Nine Subsidiary is qualified or licensed to do business and each assumed name under which each such Apple Nine Subsidiary conducts business in any jurisdiction. All the outstanding shares of capital stock of each Apple Nine Subsidiary that is a corporation have been duly authorized, validly issued, are fully paid and nonassessable and are owned by Apple Nine, by another Apple Nine Subsidiary or by Apple Nine and another Apple Nine Subsidiary, free and clear of all Liens, and free of any preemptive rights or any other limitation or restriction (including any limitation or restriction on the right to vote, sell, transfer, register or otherwise dispose of the shares), and all equity interests in each Apple Nine Subsidiary that is a partnership, limited liability company or business trust are owned by Apple Nine, by another Apple Nine Subsidiary or by Apple Nine and another Apple Nine Subsidiary, free and clear of all Liens, and free of any preemptive rights or any other limitation or restriction (including any limitation or restriction on the right to vote, sell, transfer, register or otherwise dispose of the equity interests). There are no outstanding options, warrants or other rights to acquire ownership interests of or from any Apple Nine Subsidiary. Each Apple Nine Subsidiary that is a corporation is duly incorporated and validly existing under the laws of its jurisdiction of incorporation and has the requisite corporate power and authority to carry on its business as now being conducted and each Apple Nine Subsidiary that is a partnership, limited liability company or business trust is duly organized and validly existing under the laws of its jurisdiction of organization and has the requisite power and authority to carry on its business as now being conducted. Each Apple Nine Subsidiary is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the nature of its business or the ownership, operation or leasing of its properties makes such qualification, licensing or good standing necessary, other than in such jurisdictions where the failure to be so qualified, licensed or in good standing, individually or in the aggregate, would not have a Material Adverse Effect on Apple Nine. Except for interests in the Apple Nine Subsidiaries and investments in short-term investment securities, neither Apple Nine nor any Apple Nine Subsidiary owns directly or indirectly any capital stock or other interest (equity or debt) in any other Person.

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(i) The authorized capital stock of Apple Nine consists of 400,000,000 Apple Nine Common Shares, 400,000,000 Apple Nine Series A Shares, 480,000 Apple Nine Series B Shares and 30,000,000 other Preferred Shares (collectively the “Apple Nine Shares”). On the date hereof, (A) 182,784,131 Apple Nine Common Shares, 182,784,131 Apple Nine Series A Shares, 480,000 Apple Nine Series B Shares and no other Preferred Shares were issued and outstanding, and (B) 590,781 Apple Nine Units were reserved for issuance upon exercise of outstanding stock options to purchase Apple Nine Units granted under the Stock Incentive Plans (the “Apple Nine Stock Options”) and 7,727,065 Apple Nine Units were reserved for issuance under the Dividend Reinvestment Plan. All outstanding Apple Nine Shares and all Apple Nine Shares reserved for issuance will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any preemptive right, purchase option, call option, right of first refusal, subscription or any other similar right. Schedule 3.2(c) of the Apple Nine Disclosure Letter is a true and complete list, as of the date hereof, of all outstanding Apple Nine Stock Options under the Apple Nine Stock Incentive Plans, the number of Apple Nine Units subject to each such Apple Nine Stock Option, the exercise price, date of grant, and the names of holders thereof. Each such option was granted in compliance in all material respects with all applicable Laws and all of the terms and conditions of the Stock Incentive Plans of Apple Nine pursuant to which it was issued. On the date of this Agreement, except as set forth above in this Section 3.2(c) , no shares of capital stock or other voting securities of Apple Nine were issued, reserved for issuance or outstanding. All outstanding shares of capital stock of Apple Nine are duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. Except (A) for the Apple Nine Shares and the Apple Nine Stock Options as set forth on Schedule 3.2(c) of the Apple Nine Disclosure Letter, and (B) as otherwise permitted under Section 4.2 , there are no outstanding securities, options, stock appreciation rights, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any kind to which Apple Nine or any Apple Nine Subsidiary is a party or by which such entity is bound, obligating Apple Nine or any Apple Nine Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock, voting securities or other ownership interests of Apple Nine or any Apple Nine Subsidiary or obligating Apple Nine or any Apple Nine Subsidiary to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. Except as set forth on Schedule 3.2(c) of the Apple Nine Disclosure Letter, Mr. Knight is the sole record owner of the Apple Nine Series B Shares. There are no outstanding bonds, debentures, notes or other Indebtedness of Apple Nine having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matter on which holders of Apple Nine Shares of may vote. Other than the Voting Agreement, there are no outstanding agreements to which Apple Nine or any Apple Nine Subsidiary or any of their respective officers or directors is a party concerning the voting, sale, transfer or registration of any capital stock or other equity securities of Apple Nine or any Apple Nine Subsidiary. All dividends or distributions on securities of Apple Nine or any

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Apple Nine Subsidiary that have been declared or authorized prior to the date of this Agreement have been paid in full.

(ii) The Apple Nine Common Shares to be issued in exchange for the Shares in the Mergers, when issued in accordance with the terms of this Agreement, will be duly authorized, validly issued, fully paid and nonassessable, with no personal liability attaching to the ownership thereof and subject to no preemptive rights.

(iii) Pursuant to the terms of the Voting Agreement and the Conversion Agreements, the holders of Apple Nine Series B Shares have agreed to convert each Apple Nine Series B Share into 24.17104 Apple Nine Common Shares immediately before the Effective Time. Upon such conversion of the Apple Nine Series B Shares to Apple Nine Common Shares, the Apple Nine Series A Shares will terminate in accordance with Section 5.1(f) of the Apple Nine Articles and as a result each Apple Nine shareholder will only hold Apple Nine Common Shares.

(d) Authority; Noncontravention; Consents .

(i)

(A) Apple Nine has the requisite corporate power and authority to enter into this Agreement and, subject to the Apple Nine Shareholder Approval to consummate the Mergers and the other transactions contemplated by this Agreement. The execution and delivery of this Agreement by Apple Nine and the consummation by Apple Nine of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of Apple Nine and no other corporate proceedings on the part of Apple Nine are necessary to authorize this Agreement or to consummate such transactions, subject to receipt of the Apple Nine Shareholder Approval. This Agreement has been duly executed and delivered by Apple Nine and constitutes valid and binding obligations of Apple Nine, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium or other similar laws relating to creditors’ rights and general principles of equity, whether considered in a proceeding at law or in equity.

(B) The Special Committee of Apple Nine, at a meeting duly called and held, has by unanimous vote of all its members recommended that the Board of Directors of Apple Nine approve and adopt this Agreement, the Apple Nine Amendments and the Ancillary Agreements to which it is a party and determined that this Agreement and the transactions contemplated hereby, including the Mergers and the Apple Nine Amendments are advisable and in the best interests of the shareholders. The Board of Directors of Apple Nine, based on the unanimous recommendation of the Special Committee, has (i) determined that the transactions contemplated by this Agreement are advisable and in the best interests of Apple Nine and the shareholders of Apple Nine, and (ii) approved and adopted this Agreement, the Apple Nine Amendments and the Ancillary Agreements to which Apple Nine is a party and the transactions contemplated

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hereby and thereby, including the Mergers and the Article Nine Amendments, and directed that this Agreement and the Apple Nine Amendments be submitted to a vote by the shareholders of Apple Nine. The Board of Directors of Apple Nine has not subsequently rescinded or modified, in any way, its determinations and approvals discussed above.

(ii) Each Acquisition Subsidiary has the requisite corporate power and authority to enter into this Agreement and to consummate the Merger to which it is a party and the other transactions contemplated by this Agreement. The execution and delivery of this Agreement by each Acquisition Subsidiary and the consummation by each Acquisition Subsidiary of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of such Acquisition Subsidiary and no other corporate proceedings on the part of any Acquisition Subsidiary are necessary to authorize this Agreement or to consummate such transactions. This Agreement has been duly executed and delivered by each Acquisition Subsidiary and constitutes valid and binding obligations of each Acquisition Subsidiary, enforceable against such Acquisition Subsidiary in accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium or other similar laws relating to creditors’ rights and general principles of equity, whether considered in a proceeding at law or in equity.

(iii) The execution and delivery of this Agreement by Apple Nine and each Acquisition Subsidiary do not, and the consummation of the transactions contemplated hereby and compliance by it with the provisions of this Agreement will not, conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time, or both) under, or require any consent, approval or notice under, or give rise to a right of termination, cancellation or acceleration of any material obligation or loss of a material benefit under, or result in the creation of any Lien upon any of the properties or assets of Apple Nine or any Apple Nine Subsidiary under, or result in the triggering of any payments pursuant to, (A) the Apple Nine Organizational Documents, (B) any loan or credit agreement, note, bond, mortgage, indenture, lease, franchise agreement, license agreement, Permit or other agreement or instrument applicable to Apple Nine or any Apple Nine Subsidiary or their respective properties or assets, (C) subject to the governmental filings and other matters referred to in the following sentence, any Laws applicable to Apple Nine or any Apple Nine Subsidiary, or their respective properties or assets, other than, in the case of clause (B) or (C), any such conflicts, violations, defaults, rights or Liens that, individually or in the aggregate would not (1) have a Material Adverse Effect on Apple Nine or (2) reasonably be expected to otherwise prevent Apple Nine or any Acquisition Subsidiary from performing its obligations under this Agreement or the transactions contemplated hereby.

(iv) No material consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Entity, is required by or with respect to Apple Nine or any Apple Nine Subsidiary in connection with the execution and delivery of this Agreement by Apple Nine or the Acquisition Subsidiaries or the consummation by Apple Nine or the Acquisition Subsidiaries of any of the transactions contemplated hereby and thereby, except for (A) the filings with the SEC of (1) the preliminary and definitive Proxy Statement/Prospectus relating to the Shareholder

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Meeting for the Apple Nine Shareholder Approval, (2) the Form S-4 relating to the issuance of the Merger Consideration, and (3) such reports under the Exchange Act as may be required in connection with this Agreement, the Mergers and the other transactions contemplated by this Agreement, (B) the filing of Articles of Merger for the Mergers with the State Corporation Commission of the Commonwealth of Virginia, (C) such filings with Governmental Entities to satisfy the applicable requirements of the laws of states in which Apple Nine and any Apple Nine Subsidiary are qualified or licensed to do business, as set forth on Schedule 3.2(d)(iv) of the Apple Nine Disclosure Letter and (D) such other consents, approvals, orders, authorizations, registrations, declarations and filings (1) as are set forth on Schedule 3.2(d)(iii) of the Apple Nine Disclosure Letter or (2) which, if not obtained or made, would not reasonably be expected to prevent or delay in any material respect the consummation of the Mergers or the other transactions contemplated hereby or otherwise prevent Apple Nine from performing its obligations under this Agreement in any material respect.

(e) SEC Documents; Financial Statements .

(i) Apple Nine has filed with the SEC all reports, schedules, forms, statements and other documents required to be filed by Apple Nine since January 1, 2010 (as amended through the date hereof, the “Apple Nine SEC Documents”). All of the Apple Nine SEC Documents (other than preliminary material), as of their respective filing dates, were prepared in accordance with, in all material respects, and complied in all material respects with all applicable requirements of the Securities Act or the Exchange Act, as the case may be, and the rules and regulations of the SEC thereunder applicable to such Apple Nine SEC Documents. None of the Apple Nine SEC Documents, at the time of filing, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, except to the extent such statements have been modified or superseded by later filed Apple Nine SEC Documents. Apple Nine does not have any outstanding and unresolved comments from the SEC with respect to any of the Apple Nine SEC Documents. No Apple Nine Subsidiary is subject to the periodic reporting requirements of the Exchange Act or is otherwise required to file any forms, reports, schedules statements or other documents with the SEC, any foreign Governmental Entity that performs a similar function to that of the SEC or any securities exchange or quotation service. Apple Nine has made available to the other Apple REITs copies of all material correspondence between the SEC, on the one hand, and Apple Nine and any of the Apple Nine Subsidiaries, on the other hand, since January 1, 2010 through the date of this Agreement. At all applicable times, Apple Nine has complied in all material respects with the applicable certification requirements of the Sarbanes-Oxley Act.

(ii) The audited consolidated financial statements and unaudited consolidated interim financial statements of Apple Nine and its Subsidiaries included or incorporated by reference in the Apple Nine SEC Documents (including, in each case, any notes thereto) complied, as of their respective dates of filing with the SEC, in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto (including, without limitation, Regulation S-

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X), were prepared in accordance with GAAP (except, in the case of unaudited interim financial statements, as permitted by Forms 10-Q or 8-K of the SEC) applied on a consistent basis during the periods and at the dates involved (except as may be indicated in the notes thereto) and fairly present the consolidated financial condition of Apple Nine and its Subsidiaries taken as a whole as of the dates thereof and consolidated results of operations and cash flows for the periods then ended (subject, in the case of unaudited interim financial statements, to the absence of notes and normal year-end adjustments). The books of account and other financial records of Apple Nine and its Subsidiaries are accurately reflected in all material respects in the financial statements included in the Apple Nine SEC Documents. Apple Nine has no Apple Nine Subsidiary which is not consolidated for accounting purposes.

(iii) There are no material weaknesses in the design or operation of internal controls over financial reporting that are reasonably likely to adversely affect Apple Nine’s ability to record, process, summarize and report financial data. Apple Nine has established and maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) designed to ensure that material information relating to Apple Nine, including its consolidated Subsidiaries, is made known to its principal executive officer and principal financial officer. Apple Nine has evaluated the effectiveness of Apple Nine’s disclosure controls and procedures and, to the extent required by applicable Law, presented in any applicable SEC Documents of Apple Nine that is a report on Form 10-K or Form 10-Q, or any amendment thereto, its conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by such report or amendment based on such evaluation. To the Knowledge of Apple Nine, such disclosure controls and procedures are effective in timely alerting Apple Nine’s principal executive officer and principal financial officer to information required to be included in Apple Nine’s periodic reports required under the Exchange Act. Since the enactment of the Sarbanes-Oxley Act, neither Apple Nine nor any Acquisition Subsidiary has made any prohibited loans to any director or executive officer of Apple Nine (as defined in Rule 3b-7 under the Exchange Act).

(iv) Neither Apple Nine nor any of its Subsidiaries is a party to, or has any commitment to become a party to, any joint venture, off-balance sheet partnership or any similar contract (including any contract or arrangement relating to any transaction or relationship between or among Apple Nine or any of its Subsidiaries, on the one hand, and any unconsolidated Affiliate, including any structured finance, special purpose or limited purpose entity or Person, on the other hand), or any “off-balance sheet arrangements” (as defined in Item 303(a) of Regulation S-K of the Securities Act), where the result, purpose or effect of such contract is to avoid disclosure of any material transaction involving, or material liabilities of, Apple Nine or any of its Subsidiaries in Apple Nine’s or its Subsidiaries’ published financial statements or any of the Apple Nine SEC Documents.

(f) Absence of Certain Changes or Events . Except as disclosed in the Apple Nine SEC Documents, since the Financial Statement Date and through the date of this Agreement, Apple Nine and its Subsidiaries have conducted their respective businesses only in the ordinary course consistent with past practices and there has not been (i) a Material Adverse

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Effect on Apple Nine, nor has there been any occurrence or circumstance that, individually or in the aggregate, has had, or would with the passage of time reasonably be expected to result in, a Material Adverse Effect on Apple Nine, (ii) except for regular monthly distributions (in the case of Apple Nine) not in excess of the per share amount as set forth on Schedule 3.2(f) of the Apple Nine Disclosure Letter with customary record and payment dates, any declaration, setting aside or payment of any dividend or other distribution (whether in cash, stock or property) with respect to any outstanding security of Apple Nine or any Apple Nine Subsidiary, (iii) any split, combination or reclassification of any of Apple Nine’s capital stock or any issuance or the authorization of any issuance of any other securities in respect of, in lieu of or in substitution for, or giving the right to acquire by exchange or exercise, shares of its beneficial interest or any issuance of an ownership interest in, any Apple Nine Subsidiary except as contemplated by this Agreement, (iv) any issuance of Apple Nine Stock Options except in the ordinary course of business or restricted shares of the capital stock of Apple Nine, (v) any amendment of any term of any outstanding security of Apple Nine or any Apple Nine Subsidiary, (vi) any repurchase, redemption or other acquisition by Apple Nine or any Apple Nine Subsidiary of any outstanding shares, stock or other securities of, or other ownership interests in, Apple Nine or any Apple Nine Subsidiary, (vii) any damage or destruction to or loss of any of Apple Nine Properties, not covered by insurance, that, individually or in the aggregate, has or would have a Material Adverse Effect on Apple Nine, (viii) any change in accounting methods, principles or practices or any change in any tax method or election that, individually or in the aggregate, has or would have a Material Adverse Effect on Apple Nine by Apple Nine or any Apple Nine Subsidiary materially affecting its assets, liabilities or business, except insofar as may have been required by a change in GAAP or regulatory accounting principles, (ix) the entering into or amendment of any employment, consulting, severance, retention, change in control, tax gross-up, deferred compensation, special or stay bonus, or any other agreement between Apple Nine and any officer or any Apple Nine Subsidiary director or other employee or contractor of Apple Nine, (x) any increase in the amount of compensation, bonus or other benefits payable to any current or former director, trustee, officer or other employee (other than in the ordinary course of business consistent with past practices), of Apple Nine or its Subsidiaries, (xi) any grant of severance or termination pay or benefits (or any increase in the amount of such pay or benefits) to any current or former director, trustee, officer or other employee of Apple Nine or its Subsidiaries that would be payable at or after the Effective Time, (xii) any material incurrence, assumption or guarantee by Apple Nine or Apple Nine Subsidiary of any indebtedness, (xiii) any creation or assumption by Apple Nine or any Apple Nine Subsidiary of any Lien in an amount, individually or in the aggregate, in excess of $500,000 on any asset, (xiv) any material commitment, contractual obligation (including any Apple Nine Franchise Agreement or any Apple Nine Management Agreement Documents, any lease (capital or otherwise) or any letter of intent), borrowing, guaranty, capital expenditure (outside the ordinary course) or transaction entered into by Apple Nine or by any Apple Nine Subsidiary, or (xv) any making of any material loan, advance or capital contribution to or investment in any Person.

(g) Litigation . There is no pending or, to the Knowledge of Apple Nine, threatened material Legal Action or material investigation pending by a Governmental Entity against or affecting (i) Apple Nine or any Apple Nine Subsidiary or any asset of Apple Nine or any Apple Nine Subsidiary or (ii) any director, officer or employee of Apple Nine or any Apple Nine Subsidiary or other Person for whom Apple Nine or any Apple Nine Subsidiary may be liable, nor is there any judgment, decree, injunction, rule or order of any Governmental Entity or

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arbitrator outstanding against Apple Nine or any Apple Nine Subsidiary. Other than pursuant to the Apple Nine Organizational Documents, no Contract between Apple Nine or any Apple Nine Subsidiary and any current or former director, officer, employee or shareholder (or equivalent interest holder) exists that provides for indemnification.

(h) Taxes .

(i) Apple Nine and each Apple Nine Subsidiary have timely filed all material Tax Returns and reports required to be filed by it (after giving effect to any filing extension properly granted by a Governmental Entity having authority to do so). All such Tax Returns are true, correct and complete in all material respects. Apple Nine and each Apple Nine Subsidiary have paid (or Apple Nine has paid on their behalf), within the time and manner prescribed by law, all material Taxes shown as due and payable on such Tax Returns. The most recent financial statements contained in the Apple Nine SEC Documents filed with the SEC prior to the date of this Agreement reflect an adequate reserve or accrued liabilities or expenses for all Taxes due and payable by Apple Nine and the Apple Nine Subsidiaries as a group for all taxable periods and portions thereof through the date of such financial statements, except for failures to reflect adequate reserves that would not in the aggregate be material. Apple Nine and its Subsidiaries (as a group) have established on their books and records (which may, but are not required to, be reflected only on the books and records of Apple Nine) reserves or accrued liabilities or expenses that are adequate for the payment of all material Taxes for which Apple Nine or any Apple Nine Subsidiary is liable but which are not yet due and payable. Apple Nine has incurred no liability for any Taxes under Sections 857(b), 860(c) or 4981 of the Code or Treasury Regulation Sections 1.337(d)-5, 1.337(d)-6 or 1.337(d)-7 (other than built-in gain to Apple Nine in connection with the purchase of its Subsidiary’s interest in Apple Hospitality Air, LLC from a subsidiary of Apple Six), including, without limitation, any Tax arising from a prohibited transaction described in Section 857(b)(6) of the Code and the excise tax on redetermined rents, redetermined deductions, and excess interest under Section 857(b)(7) of the Code; and neither Apple Nine nor any of its Subsidiaries has incurred any material liability for Taxes other than in the ordinary course of business and other than transfer or similar Taxes arising in connection with the sale of property. No material deficiencies for Taxes have been asserted or assessed in writing by a Governmental Entity against Apple Nine or any of the Apple Nine Subsidiaries, and no requests for waivers of the time to assess any such Taxes have been granted and remain in effect or are pending. No material claim is pending or proposed by any Governmental Entity in any jurisdiction where Apple Nine or any Apple Nine Subsidiary do not file Tax Returns that Apple Nine or any Apple Nine Subsidiary is or may be subject to taxation by such jurisdiction, nor are there any facts that could reasonably be expected to give rise to such a claim. Copies of all material Tax Returns with respect to taxable years commencing on or after the taxable year ending December 31, 2008 have been delivered to or made available to representatives of the Companies.

(ii) Apple Nine (A) for all of its taxable years beginning upon the commencement of the first taxable year following the year of its formation through the most recent December 31, has been subject to taxation as a REIT under the Code within

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the meaning of Section 856 of the Code and has satisfied the requirements to qualify as a REIT for such years, (B) has operated, and intends to continue to operate, in such a manner as to qualify as a REIT upon closing of the transactions contemplated hereby, and (C) has not taken or omitted to take any action which could reasonably be expected to result in a challenge by the IRS to its status as a REIT, and, to Apple Nine’s Knowledge, no such challenge is pending or threatened in writing. Each Apple Nine Subsidiary that files Tax Returns as a partnership (or is a disregarded entity), for U.S. federal income tax purposes has, since inception, been classified for federal income tax purposes as a partnership (or as a disregarded entity) and not as a corporation or as an association taxable as a corporation, or a “publicly traded partnership” within the meaning of Section 7704(b) of the Code that is treated as a corporation for U.S. federal income tax purposes under Section 7704(a) of the Code. Each Apple Nine Subsidiary which is a corporation has been since its formation classified as a qualified REIT subsidiary under Section 856(i) of the Code, a taxable REIT subsidiary under Section 856(l) of the Code or as a REIT.

(iii) (A) Neither Apple Nine nor any Apple Nine Subsidiary is a party to any material pending action or proceeding, including any audit or contest, by any Governmental Entity with regard to Taxes or Tax Returns of Apple Nine or any Apple Nine Subsidiary; (B) no material claim for assessment or collection of Taxes has been asserted against Apple Nine or any Apple Nine Subsidiary; (C) there are no audits pending with or proposed in writing by any taxing authority with respect to any material Taxes or Tax Returns of Apple Nine or any Apple Nine Subsidiary; and (D) neither Apple Nine nor any Apple Nine Subsidiary has requested, received or is subject to any written ruling of a taxing authority or has entered into any written agreement with a taxing authority with respect to any Taxes.

(iv) Apple Nine does not have any earnings and profits attributable to Apple Nine or any other corporation for any non-REIT year within the meaning of Section 857 of the Code.

(v) Neither Apple Nine nor any Apple Nine Subsidiary has made any payments, or is obligated to make any payments, or is a party to an agreement that could obligate it to make any payments that will not be deductible under Section 280G of the Code.

(vi) Neither Apple Nine nor its Subsidiaries is or has been a party to any Tax allocation or sharing agreement.

(vii) Neither Apple Nine nor any Apple Nine Subsidiary has any liability for the Taxes of any Person other than Apple Nine and its Subsidiaries (A) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign Law) or (B) as a transferee or successor.

(viii) There are no Apple Nine Tax Protection Agreements.

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(ix) All material amounts of Taxes which Apple Nine or its Subsidiaries are required by Law to withhold or collect, including material Taxes required to have been withheld in connection with amounts paid or owing to any employee, independent contractor, creditor, shareholder or other third party and sales, gross receipts and use taxes, have been duly withheld or collected and, to the extent required, have been paid over to the proper Governmental Entities or, if not yet due, are held in separate bank accounts for such purpose. There are no Liens for material Taxes upon the assets of Apple Nine or its Subsidiaries except for statutory Encumbrances for Taxes not yet due.

(x) None of Apple Nine or any of its Subsidiaries has either been a “distributing corporation” or a “controlled corporation” in a distribution occurring during the last five years to which the parties to such distribution treated the distribution as one to which Section 355 of the Code is applicable.

(i) Related Party Transactions . There is no (i) loan outstanding from or to any employee, officer or director of Apple Nine or any Subsidiary of Apple Nine, (ii) employment or severance contract or other arrangement with respect to severance with respect to any employee, officer or director of Apple Nine or any Apple Nine Subsidiary, or (iii) except as provided by this Agreement, agreement to appoint or nominate any person as a director of Apple Nine or any Subsidiary of Apple Nine. Except for compensation, benefits and advances received in the ordinary course of business by employees, directors or consultants of Apple Nine or its Subsidiaries, there are no arrangements, agreements or contracts which continue in effect as of the date hereof entered into by Apple Nine or any of its Subsidiaries, on the one hand, and any Person who is an officer, director or affiliate of Apple Nine or any Apple Nine Subsidiary, any member of the “immediate family” (as such term is defined in Item 404 of Regulation S-K promulgated under the Securities Act) of the foregoing or an entity of which any of the foregoing is an Affiliate, on the other hand. True and materially complete copies of all such documents have been made available to the other Apple REITs prior to the date hereof and each such document is listed on Schedule 3.2(i) of the Disclosure Letter of Apple Nine. Except as set forth on Schedule 3.2(i) of the Disclosure Letter of Apple Nine or as contemplated by this Agreement, neither Apple Nine nor any of the Apple Nine Subsidiaries is a party to any agreement or arrangement with Mr. Knight or his Affiliates.

(j) Opinion of Financial Advisor; No Brokers . The financial advisor identified on Schedule 3.2(j) of the Apple Nine Disclosure Letter has delivered its opinion, addressed to the Special Committee of Apple Nine with regard to the fairness, from a financial point of view and as of the date of such opinion and subject to the qualifications, assumptions and limitations set forth therein, to Apple Nine of the aggregate consideration to be paid pursuant to the Mergers. It is agreed and understood that such opinion is for the Special Committee of Apple Nine and may not be relied upon by Apple Seven or Apple Eight. As of the date of this Agreement, such opinion has not been withdrawn, revoked or modified in any material respect. Apple Nine will provide to the other Apple REITs, solely for informational purposes, a photocopy of the written version of the opinion described in this Section 3.2(j) after receipt thereof by Apple Nine. Except for the financial advisor identified on Schedule 3.2(j) of the Apple Nine Disclosure Letter, no broker, investment banker, financial advisor or other Person is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in

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connection with the transactions contemplated hereby based upon arrangements made by or on behalf of Apple Nine or any Acquisition Subsidiary. Apple Nine has provided or made available to the other Apple REITs true and correct copies of any and all contracts and agreements pursuant to which any financial advisor would be entitled to receive any brokerage, finder’s or other fee or commission from Apple Nine or any Acquisition Subsidiary in connection with this Agreement, the Mergers or any of the transactions contemplated hereby.

(k) Permits; Compliance with Laws .

(i) Apple Nine and the Apple Nine Subsidiaries, or the management companies for Apple Nine Properties, own and/or possess all Permits except where the failure to have such Permits, individually or in the aggregate, would not have a Material Adverse Effect on Apple Nine. All such Permits are in full force and effect. Neither Apple Nine nor any Apple Nine Subsidiary has received notice that any suspension, modification or revocation of any Permit is pending or, to the Knowledge of Apple Nine, threatened nor, to the Knowledge of Apple Nine, do grounds exist for any such action, except for such suspensions, modifications or revocations, individually or in the aggregate, as would not have a Material Adverse Effect on Apple Nine.

(ii) Neither Apple Nine nor any of its Subsidiaries has violated or failed to comply with any Permit, or any statute, law, ordinance, regulation, rule, judgment, decree or order of any Governmental Entity applicable to its business, properties or operations, except for violations and failures to comply that would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect on Apple Nine.

(iii) To the Knowledge of Apple Nine, neither Apple Nine nor any Acquisition Subsidiary nor any director, officer, agent, or employee of Apple Nine or any Acquisition Subsidiary has taken any action, directly or indirectly, that would constitute a violation in any material respect by such Persons of the FCPA, including making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any “foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA.

(l) Contracts .

(i) Except for Contracts which are entered into by a third-party manager on behalf of Apple Nine pursuant to any Apple Nine Management Agreement Document or Contracts which Apple Nine was required to enter into pursuant to the terms of an Apple Nine Management Agreement Document, none of which are material to Apple Nine, Schedule 3.2(l)(i) of the Apple Nine Disclosure Letter contains a list of the following Contracts Apple Nine or any Apple Nine Subsidiary is party thereto as of the date hereof:

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(A) any lease of personal property with third parties other than Apple Nine or any Apple Nine Subsidiary, providing for annual rentals of $500,000 or more;

(B) any lease, sublease, license or occupancy agreement of real property with third parties other than Apple Nine or any Apple Nine Subsidiary, providing for annual rentals of $500,000 or more;

(C) any partnership, limited liability company agreement, joint venture or other similar agreement or arrangement relating to the formation, creation, operation, management or control of any partnership or joint venture which is not a wholly-owned Apple Nine Subsidiary;

(D) any Contract under which indebtedness for borrowed money is outstanding in an amount in excess of $500,000 (including guarantees) or may be incurred or pursuant to which any property or asset of Apple Nine or any Apple Nine Subsidiary is mortgaged, pledged or otherwise subject to a Lien, or any Contract restricting the incurrence of indebtedness or the incurrence of Liens or restricting the payment of dividends or the transfer of any of the Apple Nine Properties;

(E) any Contract with current or ongoing obligations (as to Apple Nine) currently required to be filed as an exhibit to Apple Nine’s Annual Report on Form 10−K pursuant to Item 601(b)(10) of Regulation S−K under the Securities Act;

(F) any Contract that purports to limit in any respect the right of Apple Nine or its Subsidiaries or any Affiliate of Apple Nine (1) to engage in any line of business, or (2) to compete with any person or operate in any location;

(G) any Contract providing for the sale or exchange of, or option, right of first refusal or offer, or similar right, to sell or exchange, any of the Apple Nine Properties, or for the purchase or exchange of, or option, right of first refusal or offer, or similar right, to purchase or exchange, any real estate entered into in the past two years or in respect of which the applicable transaction had not been consummated;

(H) any Contract entered into in the past two years or in respect of which the applicable transaction had not been consummated for the acquisition or disposition, directly or indirectly (by merger or otherwise), of assets (other than Contracts referenced in clause (G) of this Section 3.2(l)(i) ) or capital stock or other equity interests of another Person for aggregate consideration in excess of $500,000, in each case other than in the ordinary course of business and in a manner consistent with past practice;

(I) any Contract pursuant to which Apple Nine, any Apple Nine Subsidiary or any other Person manages any real property;

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(J) other than Contracts for ordinary repair and maintenance, any Contract relating to the development or construction of, or additions or expansions to, the Apple Nine Properties, under which Apple Nine or any Apple Nine Subsidiary has, or expects to incur, an obligation in excess of $1,000,000 in the aggregate that has not been satisfied as of the date hereof;

(K) any Contract to which Apple Nine or any Apple Nine Subsidiary has continuing indemnification obligations relating to the settlement or proposed settlement of any Legal Action, which involves the issuance of equity securities or the payment of an amount, in any such case, having a value of more than $1,000,000;

(L) any Contract that provides for any unpaid settlement or proposed settlement of any Legal Action in which the amount to be paid in settlement is in excess of $500,000;

(M) any license, royalty or other Contract concerning Intellectual Property the absence of which would have, individually or in the aggregate, a Material Adverse Effect on Apple Nine and its Subsidiaries;

(N) any Contract that is material to Apple Nine and any Apple Nine Subsidiary, taken as a whole, and contains any so-called “most favored nations” or similar provisions requiring Apple Nine or any Apple Nine Subsidiary to offer a Person any terms or conditions that are at least as favorable as those offered to any other Person;

(O) any Contract that provides for a guarantee in an amount in excess of $500,000 of the obligations of any Person that is not Apple Nine or any Apple Nine Subsidiary; and

(P) any Contract (other than Contracts referenced in clauses (A) through (O) of this Section 3.2(l)(i) ) which by its terms calls for payments by or liability of Apple Nine or any Apple Nine Subsidiary in excess of $500,000 other than any Contract under this clause (P) that, by its terms, is terminable within six months of this Agreement (without termination fee or penalty). The Contracts described in clauses (A) through (P) and those required to be identified on Schedule 3.2(l)(i) of the Apple Nine Disclosure Letter, the Apple Nine Franchise Agreements and the Apple Nine Management Agreement Documents, in each case together with all exhibits and schedules thereto being, the “Apple Nine Material Contracts.”

(ii) Except for such breaches and defaults as, individually or in the aggregate, would not result in a Material Adverse Effect on Apple Nine, (A) neither Apple Nine nor any Apple Nine Subsidiary is and, to Apple Nine’s Knowledge, no other party is in breach or violation of, or default under, any Apple Nine Material Contract, (B) none of Apple Nine or its Subsidiaries has received any claim of default under any such Apple Nine Material Contract, and (C) no event has occurred which would result in a

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breach or violation of, or a default under, any Apple Nine Material Contract (in each case, with or without notice or lapse of time or both). Each Apple Nine Material Contract is valid, binding and enforceable in accordance with its terms and is in full force and effect. Apple Nine has made available to the Companies true and complete copies of all Apple Nine Material Contracts, including any amendments or supplements thereto.

(iii) There are no Contracts or material transactions between Apple Nine or any Apple Nine Subsidiary, on the one hand, and any (A) officer or director of Apple Nine or any Apple Nine Subsidiary, (B) record or beneficial owner of 5% or more of the voting securities of Apple Nine, or (C) associate (as defined in Rule 12b-2 under the Exchange Act) or affiliate of any such officer, director or record or beneficial owner, on the other hand.

(m) Environmental Matters .

(i) Apple Nine and each Apple Nine Subsidiary has obtained all licenses, permits, authorizations, approvals and consents from Governmental Entities which are required in respect of its business, operations, assets or properties under any applicable Environmental Laws and Apple Nine and each Apple Nine Subsidiary is in compliance in all material respects with the terms and conditions of all such licenses, permits, authorizations, approvals and consents and with any applicable Environmental Laws except where failure to be in compliance would not, individually or in the aggregate, have a Material Adverse Effect on Apple Nine, and there are no past or present actions, activities, circumstances, conditions, events or incidents that may prevent or interfere with such compliance in all material respects in the future except where failure to be in compliance would not, individually or in the aggregate, have a Material Adverse Effect on Apple Nine;

(ii) there is no Environmental Claim pending or threatened against Apple Nine and each Apple Nine Subsidiary, or, to the Knowledge of Apple Nine, against any person or entity whose liability for any Environmental Claim Apple Nine and each Apple Nine Subsidiary has or may have retained or assumed either contractually or by operation of Law, except for such Environmental Claims that would not, individually or in the aggregate, have a Material Adverse Effect on Apple Nine;

(iii) neither Apple Nine, any Apple Nine Subsidiary nor, to the Knowledge of Apple Nine, any other person has placed, stored, deposited, discharged, buried, dumped, disposed of or released any Hazardous Substances produced by, or resulting from any of Apple Nine’s or any of Apple Nine’s Subsidiaries’ operations, at any Apple Nine Property, except for inventories of such substances to be used, and wastes generated therefrom, in the ordinary course of business of Apple Nine and the Apple Nine Subsidiaries (which inventories and wastes, if any, were and are stored or disposed of in accordance with applicable Environmental Laws), and except as would not, individually or in the aggregate, have a Material Adverse Effect on Apple Nine; and

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(iv) neither Apple Nine nor any Apple Nine Subsidiary has entered into or agreed to any consent decree or order or is subject to any outstanding judgment, decree or judicial order relating to compliance with Environmental Laws or the investigation, sampling, monitoring, treatment, remediation, removal or cleanup of Hazardous Substances with any Governmental Entity, except with regard to pre-existing contamination or remediation efforts for which Apple Nine was and is not a responsible party (“Apple Nine Prior Contamination”) and, to the Knowledge of Apple Nine, no investigation, litigation or other proceeding is pending or threatened with respect thereto, except as may be related to the Apple Nine Prior Contamination. To the Knowledge of Apple Nine, Apple Nine has made available to the other Apple REITs true and complete copies of all environmental reports and audits that are within the possession of Apple Nine or within the possession or control of its Subsidiaries, and to the Knowledge of Apple Nine, no other environmental reports or audits exist with respect to Apple Nine, any Subsidiary of Apple Nine or any Property of Apple Nine.

(n) Apple Nine Properties .

(i) Schedule 3.2(n)(i) of the Apple Nine Disclosure Letter lists each hotel (collectively, the “Apple Nine Owned Hotels”), and other parcels of real property currently owned or ground leased by Apple Nine or any Apple Nine Subsidiary, and sets forth Apple Nine or applicable Apple Nine Subsidiary owning such property (the “Apple Nine Properties”). Except as disclosed in title insurance policies and reports (and the documents or surveys referenced in such policies and reports) copies of which policies and reports were made available for review to the Companies: (A) Apple Nine or an Apple Nine Subsidiary owns fee simple title to each of the Apple Nine Properties, free and clear of Encumbrances, except for Encumbrances securing obligations disclosed in the consolidated balance sheets included in the Apple Nine SEC Documents, mechanics and materialmen’s liens for amounts incurred in the ordinary course of business and which are not yet due and payable or are being contested in good faith, Encumbrances for Taxes not yet due and payable or which are being contested in good faith and for which Apple Nine has made adequate provision in accordance with GAAP, and easements, rights of way, restrictive covenants and other non-monetary Encumbrances which, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect on Apple Nine; (B) except as would not have a Material Adverse Effect on Apple Nine, neither Apple Nine nor any Apple Nine Subsidiary has received written notice of any violation of any federal, state or municipal law, ordinance, order, regulation or requirement affecting any portion of any of the Apple Nine Properties issued by any Governmental Entity; and (C) except as would not have a Material Adverse Effect on Apple Nine, neither Apple Nine nor any Apple Nine Subsidiary has received notice to the effect that there are (1) condemnation or rezoning proceedings that are pending or threatened with respect to any of the Apple Nine Properties or (2) zoning, building or similar laws, codes, ordinances, orders or regulations that are or will be violated by the continued maintenance, operation or use of any buildings or other improvements on any of the Apple Nine Properties or by the continued maintenance, operation or use of the parking areas.

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(ii) Schedule 3.2(n)(ii) of the Apple Nine Disclosure Letter lists each franchise, license or other similar agreement providing the right to utilize a brand name or other rights of a hotel chain or system at any of the Apple Nine Properties of Apple Nine or any Apple Nine Subsidiary and sets forth Apple Nine or any such Apple Nine Subsidiary party to such agreement, the date of such agreement and each amendment, guaranty, or other agreement binding on Apple Nine or any Apple Nine Subsidiary and relating thereto (collectively, the “Apple Nine Franchise Agreements”). True, correct and complete copies of each Apple Nine Franchise Agreement have been made available to the Companies. Each Apple Nine Franchise Agreement is valid, binding and in full force and effect as against Apple Nine or its Subsidiaries and, to Apple Nine’s Knowledge, as against the other party thereto. Neither Apple Nine nor any Apple Nine Subsidiary owes any termination, cancellation or other similar fees or any liquidated damages to any third party franchisor.

(iii) Schedule 3.2(n)(iii) of the Apple Nine Disclosure Letter lists each management agreement pursuant to which any third party manages or operates any of the Apple Nine Properties on behalf of Apple Nine or any Apple Nine Subsidiary, and describes the property that is subject to such management agreement, Apple Nine or Apple Nine Subsidiary that is a party, the date of such management agreement and each material amendment, guaranty or other agreement binding on Apple Nine or any Apple Nine Subsidiary and relating thereto (collectively, the “Apple Nine Management Agreement Documents”). True, correct and complete copies of all Apple Nine Management Agreement Documents have been made available to the Companies. Each of the Apple Nine Management Agreement Documents is valid, binding and in full force and effect as against Apple Nine or its Subsidiaries and, to Apple Nine’s Knowledge, as against the other party thereto. Neither Apple Nine nor any Apple Nine Subsidiary owes any termination, cancellation or other similar fees or any liquidated damages to any third party manager or operator.

(iv) Apple Nine has not received written notice of, nor does Apple Nine have any Knowledge of, any latent defects or adverse physical conditions affecting any of the Apple Nine Properties or the improvements thereon, except as would not have a Material Adverse Effect on Apple Nine.

(o) Personal Property . Apple Nine and its Subsidiaries have good and marketable title to, or a valid and enforceable leasehold interest in, all personal Apple Nine and Apple Nine Subsidiary assets owned, used or held for use by them. Neither Apple Nine’s nor its Subsidiaries’ ownership of in any such personal property is subject to any Liens, other than Liens that, individually or in the aggregate, would not have a Material Adverse Effect on Apple Nine.

(p) Insurance . There is no claim by Apple Nine or any Apple Nine Subsidiary pending under any material insurance policies owned or held by Apple Nine or any Apple Nine Subsidiary which (i) has been denied or disputed by the insurer other than denials and disputes in the ordinary course of business consistent with past practice or (ii) if not paid, would have, individually or in the aggregate, a Material Adverse Effect on Apple Nine. With respect to each such insurance policy, to the Knowledge of Apple Nine, (A) the policy is legal, valid, binding and enforceable in accordance with its terms and is in full force and effect; (B) neither Apple

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Nine nor any Apple Nine Subsidiary is in breach or default (including any such breach or default with respect to the payment of premiums or the giving of notice), and no event has occurred which, with notice or the lapse of time, would constitute such a breach or default, or permit termination or modification, under the policy; (C) as of the date hereof no insurer on the policy has been declared insolvent or placed in receivership, conservatorship or liquidation; (D) as of the date hereof no notice of cancellation or termination has been received; and (E) the policy is sufficient for compliance with all material requirements of Law and the express requirements of all Apple Nine Material Contracts to which Apple Nine or its Subsidiaries are parties or otherwise bound. Apple Nine and its Subsidiaries maintain policies or binders of insurance covering risks and events and in amounts adequate for their respective businesses and operations to the extent customary in the industry in which they operate, and no such policies will terminate as a result of the consummation of the transactions contemplated by this Agreement.

(q) Information Supplied . None of the information provided or to be provided by Apple Nine or any Apple Nine Subsidiary for inclusion or incorporation by reference in the Form S-4 will, at the time the Form S-4 is filed with the SEC, at any time it is amended or supplemented or at the time it becomes effective under the Securities Act, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading. None of the information provided by Apple Nine or any Apple Nine Subsidiary for inclusion or incorporation by reference in the Proxy Statement/Prospectus will, at the date it is first mailed to Apple Nine’s shareholders or at the time of Apple Nine’s Shareholder Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Notwithstanding the foregoing provisions of this Section 3.2(q) , no representation or warranty is made by Apple Nine with respect to information or statements made or incorporated by reference in the Form S-4 or the Proxy Statement/Prospectus that were not supplied by or on behalf of Apple Nine.

(r) Books and Records .

(i) The books of account and other financial records of Apple Nine and each Apple Nine Subsidiary are in all material respects true, complete and correct, have been maintained in accordance with good business practices, and are accurately reflected in all material respects in the financial statements included in the Apple Nine SEC Documents.

(ii) Apple Nine has made available to each of the Companies true, correct and complete copies of the Apple Nine Organizational Documents, as amended to date, and the articles of incorporation, by-laws, partnership agreements or other organizational documents, as the case may be, of each Apple Nine Subsidiary, each as amended or supplemented to the date of this Agreement (all such organizational documents of Apple Nine and its Subsidiaries collectively, the “Apple Nine Organizational Documents”). Neither Apple Nine nor any Apple Nine Subsidiary is, nor has Apple Nine or any Apple Nine Subsidiary been, in violation of any of the Apple Nine Organizational Documents in any material respect.

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(iii) True, correct and complete copies of the minutes of all meetings of the shareholders, members, partners, the boards of directors or managers, as applicable, and each committee of the boards of directors or managers, as applicable, of Apple Nine and each Apple Nine Subsidiary have been made available to the Companies.

(s) Labor Matters . Neither Apple Nine nor any Apple Nine Subsidiary is a party to, or bound by, any collective bargaining agreement, contract or other agreement or understanding with a labor union or labor union organization. There is no unfair labor practice or labor arbitration proceeding pending or, to the Knowledge of Apple Nine, threatened against Apple Nine or any Apple Nine Subsidiary relating to their business, except for any such proceeding as would not have a Material Adverse Effect on Apple Nine. To the Knowledge of Apple Nine, there are no organizational efforts with respect to the formation of a collective bargaining unit presently being made or threatened involving employees of Apple Nine or any Apple Nine Subsidiary. Since January 1, 2008, Apple Nine and each Apple Nine Subsidiary has been in compliance in all material respects with all applicable Laws relating to employment of labor, including all applicable Laws relating to wages, hours, collective bargaining, employment discrimination, civil rights, safety and health, workers’ compensation, pay equity, classification of employees, and the collection and payment of withholding and/or social security taxes.

(t) Vote Required . The only vote of the holders of any class or series of Apple Nine’s capital stock necessary (under applicable Law or otherwise) to approve, on behalf of Apple Nine, the Apple Nine Amendments, the Mergers, this Agreement and the other transactions contemplated hereby is the Apple Nine Shareholder Approval.

(u) No Undisclosed Material Liabilities . Except as disclosed in the Apple Nine SEC Documents, and except for additional borrowings under Apple Nine’s line of credit disclosed on Schedule 3.2(u) of the Apple Nine Disclosure Letter, there are no Liabilities of Apple Nine or any of its Subsidiaries, and there is no existing condition, situation or set of circumstances that could reasonably be expected to result in such a Liability, other than: (i) Liabilities reserved for on the most recent balance sheet contained in the audited financial statements of Apple Nine for the period ended December 31, 2012; (ii) Liabilities incurred in the ordinary course of business consistent with past practice of Apple Nine subsequent to December 31, 2012 and (iii) such other Liabilities as would not, individually or in the aggregate, have a Material Adverse Effect on Apple Nine.

(v) Intellectual Property . To the Knowledge of Apple Nine (i) the conduct of the business of Apple Nine and its Subsidiaries as currently conducted does not infringe upon or misappropriate the Intellectual Property rights of any third party, and no claim has been asserted to Apple Nine or any Apple Nine Subsidiary that the conduct of the business of Apple Nine and its Subsidiaries as currently conducted infringes upon or may infringe upon or misappropriates the Intellectual Property rights of any third party except for any such infringement, misappropriation or claim that individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Apple Nine; and (ii) Apple Nine or an Apple Nine Subsidiary owns or is licensed to use or otherwise has the right to use all Intellectual Property as currently used in the operation of its respective business, in accordance with the terms of any applicable license agreement except where the failure to possess or have adequate rights to use

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such properties individually or in the aggregate would not reasonably be expected to have a Material Adverse Effect on Apple Nine.

(w) Benefits Plans; ERISA Compliance .

(i) Other than the Apple Nine Stock Incentive Plans, neither Apple Nine nor any Subsidiary of Apple Nine has any bonus, pension, profit sharing, deferred compensation, incentive compensation, stock ownership, stock purchase, stock option, phantom stock, retirement, vacation, severance, disability, death benefit, hospitalization, medical or other employee benefit plan, arrangement or understanding (whether or not legally binding), including any “employee benefit plans,” within the meaning of Section 3(3) of ERISA, providing benefits to any current or former employee, officer or director of Apple Nine or any Apple Nine Subsidiary or any person affiliated with Apple Nine under Section 414(b), (c), (m) or (o) of the Code.

(ii) No director, officer, or employee of Apple Nine will become entitled to retirement, severance or similar benefits or to enhanced or accelerated benefits (including any acceleration of vesting or lapsing of restrictions with respect to equity-based awards) as a result of consummation of the transactions contemplated by this Agreement.

(iii) No stock option granted by Apple Nine under the Apple Nine Stock Incentive Plans (whether currently outstanding or previously exercised) has been granted with an exercise price that is less than the fair market value of the underlying stock on the date of grant, and no such stock option has been or would be, as applicable, subject to any Tax, penalty or interest under Section 409A of the Code.

(x) Antitakeover Statutes . Apple Nine and the Board of Directors of Apple Nine have taken all action required to be taken by them to exempt this Agreement, the Mergers and the transactions contemplated hereby and thereby from the requirements of any “moratorium”, “control share”, “fair price”, “affiliate transaction”, “business combination” or other antitakeover laws and regulations of any state, including, without limitation, each of the provisions of Article 14 (Affiliated Transactions) and Article 14.1 (Control Share Acquisitions) of the VSCA.

(y) No Other Representations or Warranties . Except for the representations and warranties made by Apple Nine and the Acquisition Subsidiaries in this Section 3.2 , Apple Nine and the Acquisition Subsidiaries make no representations or warranties, and Apple Nine and the Acquisition Subsidiaries hereby disclaim any other representations or warranties, with respect to Apple Nine and its Subsidiaries.

ARTICLE IV

COVENANTS

Section 4.1 Conduct of Business by the Companies . During the period from the date of this Agreement to the Effective Time, each Company agrees, as to itself, that it shall, and shall cause each of its Subsidiaries to, carry on its businesses in the usual, regular and ordinary course in substantially the same manner as heretofore conducted and, to the extent consistent therewith,

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use commercially reasonable efforts (i) to preserve intact its current business organization, goodwill, ongoing businesses and its status as a REIT within the meaning of the Code, (ii) to preserve its current beneficial relationships with any Person with which such Company has material business relationships (including, without limitation, customers, suppliers, directors, officers and other employees if any), and (iii) to keep available the services of its officers and key employees, if any. Without limiting the generality of the foregoing, the following additional restrictions shall apply during the period from the date of this Agreement to the Effective Time, except as set forth on Schedule 4.1 of the Disclosure Letter of such Company, or as otherwise contemplated by this Agreement, each Company agrees, as to itself, that it shall not, and shall cause each of its Subsidiaries, not to (and not to authorize or commit or agree to), unless each of the other Apple REITs, with the approval of their respective Special Committees, shall otherwise consent in writing:

(a) (i) except for regular monthly dividends as set forth on Schedule 4.1(a) of the Disclosure Letter of such Company, declare, set aside or pay any dividends on, or make any other distributions in respect of, any shares of capital stock of such Company, (ii) split, combine or reclassify any capital stock, partnership interests or other equity interests or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of such capital stock, partnership interests or other equity interests, or (iii) purchase, redeem or otherwise acquire any shares of capital stock, partnership interests or other equity interests of such Company or any of its Subsidiaries;

(b) amend the Organizational Documents of such Company;

(d) acquire or agree to acquire (by merger, consolidation or acquisition of stock or assets, or by lease or license) any real property, corporation, partnership or other business organization or division thereof (except of or from any Subsidiary of such Company), or acquire other assets, other than (i) supplies, equipment and investment securities or other assets in bona fide transactions, on arm’s-length terms in the ordinary course of business of such Company and its Subsidiaries in a manner that is consistent with past practice, and/or (ii) acquisitions set forth on Schedule 3.1(l)(i)(G) to the Disclosure Letter of such Company;

(e) except as provided in clause (n) below, issue, deliver or sell, or grant any option or other right in respect of, any shares of capital stock or debt securities, any other voting or redeemable securities of such Company or any Subsidiary of such Company or any securities convertible into, or any rights, warrants or options to acquire, any such shares (“Equity Equivalents”), voting securities or redeemable or convertible securities except to such Company or a Subsidiary of such Company and other than the issuance of any shares of capital stock upon the exercise of stock options that are outstanding on the date of this Agreement in accordance with the terms of the Stock Incentive Plans on the date of this Agreement;

(f) amend any term of any Shares or Equity Equivalents of such Company;

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(g) sell, pledge, lease, dispose of, exclusively license or encumber or grant any third party any rights with respect to any property or assets, other than sales of assets, securities, properties, interests or businesses, other than in the ordinary course of business and where the assets which did not, individually or in the aggregate, contribute more than 10% of such Company’s earnings before interest, taxes, depreciation and amortization for the fiscal year ending December 31, 2012;

(h) other than in the ordinary course of business and, for each Company, consistent with past practice (i) incur, create or assume any Indebtedness or issue or amend the terms of any debt securities, (ii) assume, guarantee or endorse, or otherwise become responsible for the obligations of any other Person or entity (other than any Subsidiary of such Company) for borrowed money, or (iii) pledge, encumber or otherwise subject to an Encumbrance any Properties of such Company;

(i) make any loans, advances or capital contributions to, or investments in, any other Person, other than in the ordinary course of business consistent with past practice or loans, advances or capital contributions to, or investments in, wholly owned Subsidiaries of such Company;

(j) (i) make, modify or rescind any tax election (unless required by Law or necessary to preserve such Company’s status as a REIT or the partnership status of any Subsidiary of such Company that is a partnership for federal tax purposes); (ii) change any annual tax accounting period, (iii) adopt or change any method of tax accounting except as required by applicable Law, (iv) materially amend any Tax Returns, (v) enter into any material closing agreement, (vi) settle any material Tax claim, audit or assessment or (vii) surrender any right to claim a material Tax refund, offset or other reduction in Tax liability;

(k) (i) change in any material manner any of its methods, principles or practices of accounting in effect at the Financial Statement Date, (ii) settle or compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, except in the case of settlements or compromises in an amount not to exceed, individually or in the aggregate, $1,000,000, or (iii) change any of its methods of reporting income or deductions for federal income tax purposes from those employed in the preparation of its most recently filed federal income Tax Return, except, in the case of clause (i) or (iii) , as may be required by the SEC, applicable Law or GAAP and with notice thereof to the other Apple REITs;

(l) incur any capital expenditures or any obligations or liabilities in respect thereof, except for (i) those in an amount not to exceed the total amount of the capital expenditure budget for such Company set forth in Schedule 4.1(l) of the Disclosure Letter of such Company and (ii) any unbudgeted capital expenditures not to exceed $2,000,000 individually or $2,000,000 in the aggregate;

(m) adopt or enter or make any commitment to adopt or enter into any employee benefit plan, program, policy or agreement that would be a “employee benefit plan” as defined in Section 3(3) of the ERISA if it were in existence as of the date of this Agreement;

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(n) grant any awards under any Stock Incentive Plan (including any severance plan) except awards to the directors of such Company in the ordinary course of business consistent with past practice;

(o) take any action or exercise any discretion to accelerate the vesting or payment of, or to fund or in any other way secure the payment of, any compensation or benefit under any Stock Incentive Plan;

(p) settle any material Legal Action involving or against such Company or any of its Subsidiaries, including any shareholder derivative or class action claims, including any arising out of or in connection with the Mergers or the other transactions contemplated hereby;

(q) amend or modify in any material respect or terminate (excluding terminations upon expiration of the term thereof in accordance with their terms) any Material Contracts of such Company or waive, release or assign any material rights, claims or benefits of it or its Subsidiaries under any Material Contract of such Company, or enter into any contract or agreement that would have been a Material Contract of such Company had it been entered into prior to this Agreement, except in the ordinary course of business consistent with past practice;

(r) enter into or amend or otherwise modify any material agreement or arrangement with Persons that are Affiliates or, as of the date hereof, are officers, directors or employees of such Company or any Subsidiary of such Company;

(s) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of such Company or any Subsidiary thereof (other than the applicable Merger); or

(t) agree, resolve or commit to (i) do any action restricted by this Section 4.1 or (ii) accept any restriction that would prevent such Company or any of its Subsidiaries from taking any action required by this Section 4.1 .

Section 4.2 Conduct of Business by Apple Nine and Acquisition Subsidiaries . During the period from the date of this Agreement to the Effective Time, Apple Nine and each Acquisition Subsidiary shall, and shall cause each such entity’s Subsidiaries to, carry on its businesses in the usual, regular and ordinary course in substantially the same manner as heretofore conducted and, to the extent consistent therewith, use commercially reasonable efforts (i) to preserve intact its current business organization, goodwill, ongoing businesses and its status as a REIT within the meaning of the Code, (ii) to preserve its current beneficial relationships with any Person with which Apple Nine has material business relationships (including, without limitation, customers, suppliers, directors, officers and other employees if any), and (iii) to keep available the services of its officers and key employees. Without limiting the generality of the foregoing, the following additional restrictions shall apply during the period from the date of this Agreement to the Effective Time, except as set forth on Schedule 4.2 of the Apple Nine Disclosure Letter, or as otherwise contemplated by this Agreement, Apple Nine and each Acquisition Subsidiary shall not, and shall cause each such entity’s Subsidiaries, not to (and not to authorize or commit or agree to), unless each of the other Apple REITs, with the approval of their respective Special Committees, shall otherwise consent in writing:

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(a) (i) except for regular monthly dividends as set forth on Schedule 4.2(a) of Apple Nine Disclosure Letter, declare, set aside or pay any dividends on, or make any other distributions in respect of, any shares of capital stock of Apple Nine or any Acquisition Subsidiary, (ii) split, combine or reclassify any capital stock, partnership interests or other equity interests or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of such capital stock, partnership interests or other equity interests, or (iii) purchase, redeem or otherwise acquire any shares of capital stock, partnership interests of other equity interests of Apple Nine or any Acquisition Subsidiary of Apple Nine;

(b) amend the Apple Nine Organizational Documents, except for the Apple Nine Amendments;

(d) acquire or agree to acquire (by merger, consolidation or acquisition of stock or assets, or by lease or license) any real property, corporation, partnership or other business organization or division thereof (except of or from any Subsidiary of Apple Nine), or acquire other assets, other than (i) supplies, equipment and investment securities or other assets in bona fide transactions, on arm’s-length terms in the ordinary course of business of Apple Nine, each Acquisition Subsidiary and any such entity’s Subsidiaries in a manner that is consistent with past practice and/or (ii) acquisitions set forth on Schedule 3.2(l)(i)(G) of the Apple Nine Disclosure Letter;

(e) except as provided in clause (n) below, issue, deliver or sell, or grant any option or other right in respect of, any shares of capital stock or debt securities, any other voting or redeemable securities of Apple Nine or of any Acquisition Subsidiary or any such entity’s Subsidiary or any Equity Equivalents, voting securities or redeemable or convertible securities except to Apple Nine or any Acquisition Subsidiary or any such entity’s Subsidiary, and other than the issuance of any shares of capital stock upon the exercise of stock options that are outstanding on the date of this Agreement in accordance with the terms of the Apple Nine Stock Incentive Plans on the date of this Agreement;

(f) amend any term of any Apple Nine Shares or Equity Equivalents of Apple Nine;

(g) sell, pledge, lease, dispose of, exclusively license or encumber or grant any third party any rights with respect to any property or assets, other than sales of assets, securities, properties, interests or businesses, other than in the ordinary course of business and where the assets which did not, individually or in the aggregate, contribute more than 10% of Apple Nine’s earnings before interest, taxes, depreciation and amortization for the fiscal year ending December 31, 2012;

(h) other than in the ordinary course of business consistent with past practice (i) incur, create or assume any Indebtedness or issue or amend the terms of any debt securities, (ii) assume, guarantee or endorse, or otherwise become responsible for the obligations of any other Person or entity (other than any Subsidiary of Apple Nine) for borrowed money, or (iii) pledge, encumber or otherwise subject to an Encumbrance any Properties of Apple Nine;

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(j) (i) make, modify or rescind any tax election (unless required by Law or necessary to preserve Apple Nine’s status as a REIT or the partnership status of any Apple Nine Subsidiary that is a partnership for federal tax purposes) (ii) change any annual tax accounting period, (iii) adopt or change any method of tax accounting except as required by applicable Law, (iv) materially amend any Tax Returns, (v) enter into any material closing agreement, (vi) settle any material Tax claim, audit or assessment or (vii) surrender any right to claim a material Tax refund, offset or other reduction in Tax liability;

(l) incur any capital expenditures or any obligations or liabilities in respect thereof, except for (i) those in an amount not to exceed the total amount of the capital expenditure budget for Apple Nine set forth in Schedule 4.2(l) of the Apple Nine Disclosure Letter and (ii) any unbudgeted capital expenditures not to exceed $2,000,000 individually or $2,000,000 in the aggregate;

(m) adopt or enter or make any commitment to adopt or enter into any employee benefit plan, program, policy or agreement that would be an “employee benefit plan” as defined in Section 3(3) of the ERISA if it were in existence as of the date of this Agreement;

(n) grant any awards under any Apple Nine Stock Incentive Plan (including any severance plan) except awards to the directors of Apple Nine in the ordinary course of business consistent with past practice;

(o) take any action or exercise any discretion to accelerate the vesting or payment of, or to fund or in any other way secure the payment of, any compensation or benefit under any Apple Nine Stock Incentive Plan;

(p) settle any material Legal Action involving or against Apple Nine, any Acquisition Subsidiary or any such entity’s Subsidiary, including any shareholder derivative or class action claims arising out of or in connection with the Mergers or the other transactions contemplated hereby;

(q) amend or modify in any material respect or terminate (excluding terminations upon expiration of the term thereof in accordance with their terms) any Material Contract of Apple Nine or waive, release or assign any material rights, claims or benefits of it or

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its Subsidiaries under any Material Contract of Apply Nine, or enter into any contract or agreement that would have been a Material Contract of Apple Nine had it been entered into prior to this Agreement, except in the ordinary course of business consistent with past practice;

(s) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Apple Nine, any Acquisition Subsidiary or any such entity’s Subsidiary thereof (other than the applicable Merger); or

(t) agree, resolve or commit to (i) do any action restricted by this Section 4.2 or (ii) accept any restriction that would prevent Apple Nine, any Acquisition Subsidiary or any such entity’s Subsidiary from taking any action required by this Section 4.2 .

Section 4.3 Other Actions . Apple Nine and each of the Companies shall not and shall cause its respective Subsidiaries not to take any action that would result in (i) any of the representations and warranties of such party (without giving effect to any “Knowledge” qualification) set forth in this Agreement that are qualified as to materiality becoming untrue in any respect, (ii) any of such representations and warranties (without giving effect to any “Knowledge” qualification) that are not so qualified becoming untrue in any material respect or (iii) except as contemplated by Section 7.1 , any of the conditions to the Mergers set forth in ARTICLE VI not being satisfied.

Section 4.4 Control of Other Party’s Business . Nothing contained in this Agreement will give Apple Nine, directly or indirectly, the right to control any of the Companies or any of their respective Subsidiaries or direct the business or operations of any of the Companies or any of their respective Subsidiaries prior to the Effective Time. Nothing contained in this Agreement will give any Company, directly or indirectly, the right to control Apple Nine or any of its Subsidiaries or direct the business or operations of Apple Nine or any of its Subsidiaries prior to the Effective Time. Prior to the Effective Time, each of the Apple REITs will exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its respective operations and the operations of its respective Subsidiaries. Nothing in this Agreement, including any of the actions, rights or restrictions set forth herein, will be interpreted in such a way as to place any of the Apple REITs in violation of any applicable Law.

ARTICLE V

ADDITIONAL COVENANTS

Section 5.1 Preparation of the Registration Statement and the Proxy Statement; Shareholder Meetings .

(a) Each of the Companies and Apple Nine shall cooperate and use commercially reasonable efforts to promptly prepare and Apple Nine shall file with the SEC, as soon as practicable, a Registration Statement on Form S-4 (the “Form S-4”) under the Securities Act with respect to the Apple Nine Common Shares issuable in the Mergers, a portion of which

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Form S-4 shall also serve as the proxy statement with respect to the Apple Nine Amendments and a joint proxy statement with respect to the Shareholder Meeting of each of the Apple REITs in connection with the Mergers (the “Proxy Statement/Prospectus”). Each of the Companies and Apple Nine shall furnish all information concerning such party and its Affiliates to the others (including the respective Special Committees), and provide such other assistance, as may be reasonably requested by the Apple REITs (including the respective Special Committees) in connection with the preparation, filing and distribution of the Form S-4 and Proxy Statement/Prospectus. The Form S-4 and Proxy Statement/Prospectus shall include all information reasonably requested by such other party to be included therein. The respective parties will cause the Proxy Statement/Prospectus and the Form S-4 to comply as to form in all material respects with the applicable provisions of the Securities Act, the Exchange Act and the rules and regulations promulgated thereunder. Each of the Companies and Apple Nine shall use commercially reasonable efforts to have the Form S-4 declared effective under the Securities Act as promptly as reasonably practicable and to keep the Form S-4 effective as long as necessary to the consummate the transactions contemplated herein. Apple Nine will cause the Proxy Statement/Prospectus to be mailed to Apple Nine’s shareholders, and each Company will cause the Proxy Statement/Prospectus to be mailed to its respective shareholders, in each case, as promptly as reasonably practicable after the Form S-4 is declared effective under the Securities Act. Apple Nine shall use its best efforts to obtain, prior to the effective date of the Form S-4, all necessary state securities law or “Blue Sky” permits or approvals required to carry out the transactions contemplated by this Agreement. Except for annual, quarterly and current reports filed or furnished with the SEC under the Exchange Act, which may be incorporated by reference therein (but subject to Section 5.5 ), no filing of, or amendment or supplement to, the Form S-4 or the Proxy Statement/Prospectus will be made by Apple Nine or the Companies, as applicable, without the other’s prior consent (which shall not be unreasonably withheld, delayed or conditioned) and without providing the other the opportunity to review and comment thereon. Apple Nine will advise each of the Companies, promptly after it receives notice thereof, of the time when the Form S-4 has become effective or any supplement or amendment has been filed, the issuance of any stop order, the suspension of the qualification of the Apple Nine Common Shares issuable in connection with the Mergers for offering or sale in any jurisdiction, or any oral or written request by the SEC for amendment of the Proxy Statement/Prospectus or the Form S-4 or comments thereon and responses thereto or requests by the SEC for additional information, and will promptly provide the others with copies of any written communication from the SEC or any state securities commission. Each of the Companies and Apple Nine shall use its reasonable best efforts to respond as promptly as practicable to any comments from the SEC with respect to the Proxy Statement/Prospectus and Form S-4. If at any time prior to the Effective Time any information relating to Apple Nine or the Companies, or any of their respective affiliates, officers or directors, should be discovered by Apple Nine or any Company which should be set forth in an amendment or supplement to (i) the Form S-4 so that it would not include any misstatement of a material fact or omit to state any material fact necessary to make the statements therein not misleading or (ii) the Proxy Statement/Prospectus, so that any of such documents would not include any misstatement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, the party which discovers such information shall promptly notify the other parties hereto and an appropriate amendment or supplement describing such information shall be promptly filed with the SEC and, to the extent required by law, disseminated to the

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respective shareholders of Apple Nine and the Companies. All filings by each of the Apple REITs with the SEC in connection with the transactions contemplated hereby, including all mailings to any of the Apple REITs’ shareholders in connection with the Mergers and transactions contemplated by this Agreement, shall be subject to the reasonable prior review and comment from each of the other Apple REITs (including the respective Special Committees).

(b) In connection with the preparation of the Proxy Statement/Prospectus, Apple Nine shall cause to be delivered to the Companies, prior to the mailing of such Proxy Statement/Prospectus, the opinion dated the date of the Proxy Statement/Prospectus of McGuireWoods LLP (“MW”), counsel to Apple Nine, subject to certificates, letters and assumptions, reasonably satisfactory to Apple Nine, that the Mergers will qualify as a tax-free reorganization for each Company’s shareholders under Section 368(a) of the Code.

(c) Each of the Apple REITs shall take all action necessary in accordance with applicable Law and such entity’s articles of incorporation and by-laws to convene a meeting of its shareholders (each a “Shareholder Meeting”) as promptly as practicable to consider and vote upon or otherwise to obtain the consent of its shareholders, as required, to the transactions contemplated hereby. Subject to Section 5.4(c) and Section 7.1(b) , each of the Apple REITs shall take all lawful action to solicit such consent, including, without limitation, timely mailing the Proxy Statement/Prospectus. Each of the Apple REITs shall coordinate and cooperate with respect to the timing of such meetings and shall hold such meetings sequentially on the same day.

Section 5.2 Access to Information; Confidentiality . Subject to the requirements of confidentiality agreements with third parties, upon 24 hours prior written notice, each of the Apple REITs shall, and shall cause each of its respective Subsidiaries to, afford to the other parties and to the officers, employees, accountants, counsel, financial advisors and other representatives of such other party, reasonable access during normal business hours during the period after the execution of this Agreement through the Effective Time, to all their respective properties, books, contracts, commitments, personnel and records and, during such period, each of the Apple REITs shall, and shall cause each of its respective Subsidiaries to, furnish promptly to the other parties (a) a copy of each report, schedule, registration statement and other document filed by it during such period pursuant to the requirements of federal or state securities laws, (b) a copy of each debt agreement, ground lease, owner’s or leasehold title insurance policy, existing survey, financial report of each of such party’s properties, current Smith Travel Research report, property improvement plan for such party’s properties and existing environmental audit for the such party’s properties, and (c) all other information concerning its business, properties and personnel as such other party may reasonably request, including financial statements, Tax Returns, leases, certificates of occupancy, tax statements, service agreements, license or franchise agreements and Permits. Apple Nine and each Company shall hold any nonpublic information concerning the other parties in confidence in accordance with the Confidentiality Agreement, which shall remain in full force and effect pursuant to the terms thereof, notwithstanding the execution and delivery of this Agreement or the termination hereof. Each of the Apple REITs shall comply with the terms of the Confidentiality Agreement with respect to any nonpublic information concerning the other parties provided to their respective officers, employees, accountants, counsel, financial advisors and other representatives and affiliates. No investigation pursuant to this Section 5.2 or information provided, made available or delivered to

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any of the Apple REITs pursuant to this Section 5.2 or otherwise shall affect any representations or warranties or conditions or rights of any of the Apple REITs contained in this Agreement.

Section 5.3 Best Efforts; Notification .

(a) Upon the terms and subject to the conditions set forth in this Agreement, each of the Apple REITs agrees to use its reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other in doing, all things necessary, proper or advisable to fulfill all conditions applicable to such party pursuant to this Agreement and to consummate and make effective, in the most expeditious manner practicable, the Mergers and the other transactions contemplated hereby, including (i) the obtaining of all necessary actions or nonactions, waivers, consents and approvals from Governmental Entities and the making of all necessary registrations and filings and the taking of all reasonable steps as may be necessary to obtain an approval, waiver or exemption from, or to avoid an action or proceeding by, any Governmental Entity, (ii) the defending of any lawsuits or other legal proceedings, whether judicial or administrative, challenging the Mergers, this Agreement or the consummation of any of the other transactions contemplated hereby, including seeking to have any stay or temporary restraining order entered by any court or other Governmental Entity vacated or reversed, and (iii) the execution and delivery of any additional instruments necessary to consummate the transactions contemplated by and to fully carry out the purposes of this Agreement. In connection with and without limiting the foregoing, each of the Apple REITs shall (i) take all action necessary so that no “fair price,” “business combination,” “moratorium,” “control share acquisition” or any other anti-takeover statute or similar statute enacted under state or federal laws of the United States or similar statute or regulation (a “Takeover Statute”) is or becomes applicable to the Mergers, this Agreement or any of the other transactions contemplated hereby and (ii) if any Takeover Statute becomes applicable to the Mergers, this Agreement, or any of the other transactions contemplated hereby, take all action necessary so that the Mergers may be consummated as promptly as practicable on the terms contemplated by this Agreement and otherwise to minimize the effect of such Takeover Statute on the Mergers or the consummation of any of the other transactions contemplated hereby.

(b) Each of the Apple REITs shall give prompt notice to the other Apple REITs, if (i) any representation or warranty made by it contained in this Agreement that is qualified as to materiality becomes untrue or inaccurate in any material respect or any such representation or warranty that is not so qualified becomes untrue or inaccurate in any respect or (ii) it fails to comply with or satisfy in any material respect any covenant, condition or agreement to be complied with or satisfied by it under this Agreement; provided, however, that no such notification shall affect the representations, warranties, covenants or agreements of the parties or the conditions to the obligations of the parties under this Agreement.

(c) Subject to applicable Law and the instructions of any Governmental Entity, each of the Apple REITs shall keep each other reasonably apprised of the status of matters relating to the completion of the transactions contemplated hereby, including promptly furnishing the others with copies of notices or other written communications received by any of the Apple REITs or any of their respective subsidiaries, from any Governmental Entity and/or third party with respect to such transactions, and, to the extent practicable under the circumstances, shall provide the other Apple REITs and their respective counsel with the

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opportunity to participate in any meeting with any Governmental Entity in respect of any filing, investigation or other inquiry in connection with the transactions contemplated hereby.

Section 5.4 No Solicitation of Transactions .

(a) Subject to Section 7.1 , each of the Apple REITs agrees that it shall not directly or indirectly, through any officer, director, employee, agent, investment banker, financial advisor, attorney, accountant, broker, finder or other representative, (i) initiate, solicit or knowingly encourage or facilitate (including by way of furnishing nonpublic information or assistance) any inquiries or the making of any proposal that constitutes, or may reasonably be expected to lead to, any Competing Transaction (an “Acquisition Proposal”), or authorize any of its officers, directors, employees, agents, attorneys, investment bankers, financial advisors, accountants, brokers, finders or other representatives to take any such action or (ii) enter into any letter of intent, memorandum of understanding, agreement in principle, acquisition agreement, merger agreement, option agreement, joint venture agreement, partnership agreement or other agreement regarding, or that is intended to result in, or would reasonably be expected to lead to, any Competing Transaction (an “Acquisition Agreement”). For purposes of this Agreement, “Competing Transaction” shall mean any of the following (other than the transactions contemplated by this Agreement) with respect to an Apple REIT that is the subject of an Acquisition Proposal (as applicable, the “Target Party”): (i) any merger, reorganization, consolidation, share exchange, business combination, or similar transaction involving such Target Party (or any of its Subsidiaries) pursuant to which any Person or group of Persons party thereto, or the shareholders of such Person or Persons, beneficially owns or would beneficially own 25% or more of the outstanding common shares or the outstanding voting power of such Target Party, or, if applicable, any surviving entity or the parent entity resulting from any such transaction, immediately upon consummation thereof; (ii) a recapitalization of such Target Party (or any of its Subsidiaries) or any transaction similar to a transaction referred to in clause (i) involving such Target Party (or any of its Subsidiaries) pursuant to which any Person or group of Persons party thereto, or its shareholders, beneficially owns or would beneficially own 25% or more of the outstanding common shares or the outstanding voting power of such Target Party or such Subsidiary or, if applicable, the parent entity resulting from any such transaction immediately upon consummation thereof; (iii) any sale, lease, exchange, mortgage, pledge, transfer or other disposition of 25% or more (based upon the depreciated carrying cost of the assets on the books of such Target Party) of the consolidated assets of such Target Party and its Subsidiaries taken as a whole in a single transaction or series of related transactions; or (iv) any transaction, including any tender offer, exchange offer or share exchange, in which any Person or “group” (as defined in Rule 13d-3 of the Exchange Act) shall acquire or have the right to acquire beneficial ownership of 25% or more of the outstanding common shares of such Target Party (or any Subsidiary of such Target Party) or of the outstanding voting power of such Target Party (or any Subsidiary of such Target Party), or options, rights or warrants to purchase, or securities convertible into or exchangeable for, such common shares or other securities representing such voting power, whether from such Target Party (or Subsidiary of such Target Party) or pursuant to a tender offer or exchange offer or otherwise; provided, however, that no transaction involving solely the acquisition of capital stock or assets of any Subsidiary of such Target Party by such Target Party will be deemed to be a Competing Transaction.

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(b) The Target Party shall notify the other Apple REITs (the “Non-Target Parties”) promptly after receipt of any Acquisition Proposal, or any material modification of or material amendment to any Acquisition Proposal, or any inquiry or request for non-public information relating to the Target Party or any of its Subsidiaries or for access to the properties, books or records of the Target Party or any of its Subsidiaries by any Person that is reasonably likely to lead to or contemplate an Acquisition Proposal. Such notice to the Non-Target Parties shall be made orally and in writing and shall include a written summary of the material terms of any such Acquisition Proposal, inquiry or request or modification or amendment to an Acquisition Proposal except to the extent that the Special Committee or the Board of Directors of the Target Party determines, in good faith, after consultation with outside counsel, that such action would be inconsistent with its fiduciary duties to the shareholders of such Apple REIT under applicable Law. The Target Party shall (i) keep the Non-Target Parties informed, on a current basis, of any material changes in the status of, and any material changes or modifications in the terms of, any such Acquisition Proposal, inquiry or request and (ii) provide to the Non-Target Parties, as soon as practicable after receipt or delivery thereof, summaries of the material terms of all correspondence and other written material sent or provided to the Target Party from any third party in connection with any Acquisition Proposal or sent or provided by the Target Party to any third party in connection with any Acquisition Proposal. No Apple REIT shall enter into any agreement on or after the date hereof that would prevent such party from providing any information required by this Section 5.4(b) to the other parties.

(c) Except as permitted by this Section 5.4(c) , neither the Special Committee nor the Board of Directors of any of the Apple REITs shall (i) (A) withdraw (or modify or qualify in any manner adverse to the other Apple REITs) the approval or declaration of advisability by such Special Committee or Board of Directors of this Agreement and the Mergers or any of the other transactions contemplated hereby, (B) adopt, approve, recommend, endorse or otherwise declare advisable the adoption of any Acquisition Proposal or (C) resolve, agree or publicly propose to take any such actions (each such action set forth in this Section 5.4(c) (i) being referred to herein as an “Adverse Recommendation Change”) or (ii) cause or permit such Apple REIT to enter into, or resolve, agree or propose publicly to do so with respect to, any Acquisition Agreement (other than a confidentiality agreement as referred to in Section 7.1(a) ). Notwithstanding anything to the contrary in this Section 5.4(c) , at any time prior to obtaining the Required Shareholder Approval for such Apple REIT, the Special Committee or Board of Directors of any Apple REIT may make an Adverse Recommendation Change, if such Special Committee or Board of Directors determines in good faith, after consultation with outside counsel, that failure to do so would be inconsistent with its fiduciary duties to the shareholders of such Apple REIT under applicable Law.

(d) Nothing contained in this Section 5.4 shall prohibit an Apple REIT or its Subsidiaries from taking and disclosing to its shareholders a position required by Rule 14e-2(a) or Rule 14d-9 promulgated under the Exchange Act and no disclosure that the Special Committee may determine (after consultation with counsel) that it or such Apple REIT is required to make under applicable Law shall constitute a violation of this Agreement; provided, however, that in any event the Special Committee shall not make an Adverse Recommendation Change except in accordance with Section 5.4(c) .

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Section 5.5 Public Announcements . Except (a) with respect to any Adverse Recommendation Change made in accordance with the terms of this Agreement and (b) with respect to disclosures that are consistent with prior disclosures made in compliance with this Section 5.5 , each of the Apple REITs will consult with the other Apple REITs (including the Special Committees thereof) before issuing, and provide executive officers and the Special Committee of the other Apple REITs the opportunity to review and comment upon, any press release or other public statements with respect to the Mergers or the other transactions contemplated hereby, and shall not issue any such press release or make any such public statement prior to such consultation, except as may be required by applicable Law or court process. The parties agree that the initial press release to be issued with respect to the execution of this Agreement will be in the form agreed to by the parties hereto and approved by each of the Special Committees.

Section 5.6 Transfer Taxes . Each of the Apple REITs shall cooperate in the preparation, execution and filing of all returns, questionnaires, applications or other documents regarding any real property transfer or gains, sales, use, transfer, value added stock transfer and stamp taxes, any transfer, recording, registration and other fees, any similar taxes and any related interests, penalties and additions to tax which become payable in connection with the Mergers.

Section 5.7 Certain Transactions .

(a) Termination of Advisory and Related Party Contracts . On or prior to the Closing Date, each of the Apple REITs shall terminate, without liability to such Apple REIT, each of the contracts listed on Exhibit F attached hereto pursuant to a termination agreement entered into on the date hereof, a copy of which is attached hereto as Exhibit G (the “Termination Agreement”).

(b) DRIP and Redemption Program . Between the date of this Agreement and the earlier of the termination of this Agreement or the Effective Time, each of the Apple REITs shall continue the suspension of its Dividend Reinvestment Plan and its Unit Redemption Program.

Section 5.8 Indemnification of Directors, Officers, Employees or Agents of the Companies .

(a) Indemnification Rights . From and after the Effective Time, Apple Nine shall indemnify the present and former directors, officers, employees or agents of each of the Companies and its Subsidiaries who at any time prior to the Effective Time were entitled to indemnification under the articles of incorporation or by-laws of such Company or employment agreements between such Company and its officers existing on the date hereof to the same extent as such directors, officers, employees or agents are entitled to indemnification under such articles of incorporation or by-laws or existing employment agreements in respect of actions or omissions occurring at or prior to the Effective Time (including, without limitation, the transactions contemplated by this Agreement).

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(b) Liability Coverage . Each of the Surviving Corporations shall obtain and maintain for a period of six years from and after the Effective Time “run-off” or “tail” director and officer liability coverage to the directors and officers of such Company and its Subsidiaries without reduction of existing coverage under, and having terms not less favorable to the insured persons, than the director and officer liability insurance coverage presently maintained by such Company.

(c) Articles of Incorporation and By-laws . The articles of incorporation and by-laws of each Surviving Corporation shall contain provisions no less favorable with respect to indemnification, advancement of expenses and exculpation of present and former directors, officers, employees or agents of such Company and any of its Subsidiaries than are presently set forth in the articles of incorporation and by-laws of such Company.

(d) Successors and Assigns . The provisions of this Section 5.8 are intended to be for the benefit of, and shall be enforceable by, each indemnified party, his or her heirs and his or her personal representatives and shall be binding on all successors and assigns of Apple Nine and the Surviving Corporations. Apple Nine agrees to pay all costs and expenses (including fees and expenses of counsel) that may be incurred by any indemnified party or his or her heirs or his or her personal representatives in successfully enforcing the indemnity or other obligations of Apple Nine or the Surviving Corporations under this Section 5.8 . The provisions of this Section 5.8 shall survive the Mergers and are in addition to any other rights to which an indemnified party may be entitled. In the event that Apple Nine, the Surviving Corporations or any of their respective successors or assigns (i) consolidates with or merges into any other Person and shall not be the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers all or substantially all of its business, properties or assets to any Person, then, and in each such case, to the extent necessary, a proper provision should be made so that the successors and assigns of Apple Nine, the Surviving Corporations or any of their respective successors or assigns, as the case may be, shall assume the obligations set forth in this Section 5.8 , which obligations are expressly intended to be for the irrevocable benefit of, and shall be enforceable by, each indemnified party covered hereby.

Section 5.9 Litigation . Each Apple REIT shall give the other Apple REITs the opportunity to participate in the defense or settlement of any shareholder litigation against such Apple REIT and/or its directors relating to the Mergers and the other transactions contemplated by this Agreement, and no such settlement shall be agreed to without the prior written consent of the other Apple REITs (with the prior approval of the Special Committees thereof), which consent shall not be unreasonably withheld, conditioned or delayed. For purposes of this paragraph, “participate” means that the non-litigating party will be kept apprised of proposed strategy and other significant decisions with respect to the litigation by the litigating party, consistent with the common interest of the Apple REITs in these matters and the applicable privileges and protections provided therein, and the non-litigating party may offer comments or suggestions with respect to the litigation, but will not be afforded any decision making power or other authority over the litigation except for the settlement consent set forth above.

Section 5.10 Section 16 Matters . Prior to the Effective Time, each of the parties shall take all such steps as may be required to cause (a) any dispositions of Shares (including derivative securities with respect to Shares) resulting from the Mergers and the other transactions

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contemplated by this Agreement, by each individual who will be subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to any of the Companies immediately prior to the Effective Time to be exempt under Rule 16b-3 promulgated under the Exchange Act and (b) any acquisitions of Apple Nine Common Shares (including derivative securities with respect to Apple Nine Common Shares) resulting from the Mergers and the other transactions contemplated by this Agreement, by each individual who may become subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to Apple Nine to be exempt under Rule 16b-3 promulgated under the Exchange Act.

ARTICLE VI

CONDITIONS PRECEDENT

Section 6.1 Conditions to Each Party’s Obligation to Effect the Merger . The respective obligation of each of the Apple REITs to effect the Merger to which it is a party and to consummate the other transactions contemplated hereby is subject to the satisfaction or waiver (as determined by the Special Committee of each respective Apple REIT) on or prior to the Effective Time of the following conditions:

(a) Shareholder Approval . The Shareholder Approval of each Company and the Apple Nine Shareholder Approval (collectively, the “Required Shareholder Approvals”) shall each have been obtained.

(b) No Injunctions or Restraints . No temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of any of the Mergers or any of the other transactions contemplated hereby shall be in effect.

(c) Certain Actions and Consents . All material actions by or in respect of or filings with any Governmental Entity required for the consummation of the Mergers or any of the other transactions contemplated hereby as set forth on Schedule 6.1(c) of the Disclosure Letter of each Apple REIT shall have been obtained or made, and any waiting period under applicable Laws shall have expired or been terminated.

(d) Termination of Advisory and Related Party Contracts . The Termination Agreement entered into on the date hereof shall remain in effect and shall not have been amended or modified, or any of the Apple REITs’ rights thereunder waived, except in each case to the extent each of the Apple REITs (acting at the direction of the Special Committee of such respective Apple REITs) has approved in writing prior thereto such amendment, modification or waiver.

(e) Apple Ten Subcontract Agreement . The subcontract agreement entered into on the date hereof between Apple Nine and Apple Ten Advisors, Inc., a Virginia corporation (“Apple Ten Advisors”), attached hereto as Exhibit H (the “Subcontract Agreement”) shall remain in effect and shall not have been amended or modified, or any of Apple Nine’s rights thereunder waived, except in each case to the extent each of the Apple REITs (acting at the direction of the Special Committee of such respective Apple REITs) has approved in writing prior thereto such amendment, modification or waiver.

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(f) Form S-4 . The Form S-4 shall have been declared effective by the SEC under the Securities Act and no stop order suspending the effectiveness of the Form S-4 shall have been issued by the SEC and no proceedings for that purpose shall have been initiated or threatened by the SEC.

(g) Tax Opinion Relating to the Merger . The Apple REITs shall receive an opinion of MW, or other counsel to Apple Nine reasonably satisfactory to each of the Companies, dated as of the date of the Closing Date, opining with respect to the matters set forth in Section 5.1(b) hereof. Such opinion shall be based upon customary assumptions and customary representations made by Apple Nine and its Subsidiaries, and such opinion shall be subject to such changes or modifications as may be deemed necessary or appropriate by MW (or such counsel rendering the opinion and as shall be reasonably satisfactory to each of the Companies).

(h) Dissenting Shares . The number of Apple Nine Common Shares that would be issuable with respect to Dissenting Shares shall not exceed five percent (5%) of the Apple Nine Common Shares to be issued and outstanding after the Effective Time assuming there were no Dissenting Shares.

(i) Other Mergers . Each of the Mergers (other than in the case of a Company, the Merger to which it is a party) shall have been consummated concurrently with the Merger to which it is a party.

(j) Apple Fund Management Assignment and Transfer Agreement . The assignment and transfer agreement entered into on the date hereof between Apple Nine, Apple Fund Management, LLC, a Virginia Limited Liability Company and Apple Nine Advisors, Inc., a Virginia corporation (“Apple Nine Advisors”), attached hereto as Exhibit I (the “Assignment and Transfer Agreement”) shall not have been amended or modified, or any of Apple Nine’s rights thereunder waived, except in each case to the extent each of the Apple REITs (acting at the direction of the Special Committee of such respective Apple REITs) has approved in writing prior thereto such amendment, modification or waiver.

Section 6.2 Conditions to Obligations of Apple Nine and Acquisition Subsidiaries . The obligations of Apple Nine and each Acquisition Subsidiary to effect the Mergers to which they are a party and to consummate the other transactions contemplated hereby are further subject to the following conditions, any one or more of which may be waived by Apple Nine (acting at the direction of the Special Committee thereof):

(a) Representations and Warranties . (i) Each of the representations and warranties of each Company set forth in Section 3.1(a) , Section 3.1(c) , Section 3.1(d)(i) and Section 3.1(j) of this Agreement shall be true and correct in all material respects as of the Closing Date, as though made on and as of the Closing Date, except to the extent the representation or warranty is expressly limited by its terms to another date and (ii) the other representations and warranties of each Company set forth in this Agreement shall be true and correct as of the Closing Date, as though made on and as of the Closing Date, except to the extent the representation or warranty is expressly limited by its terms to another date, and Apple Nine shall have received a certificate (which certificate may be qualified by knowledge to the

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same extent as such representations and warranties are so qualified) signed on behalf of each Company by such Company’s chief executive officer or chief financial officer to such effect. This condition shall be deemed satisfied notwithstanding any failure of a representation or warranty of any Company set forth in clause (ii) above to be true and correct as of the Closing Date if such failure (without giving effect to any “materiality” or “Material Adverse Effect” qualification or standard contained in any such representation or warranty), either individually or in the aggregate with any other such failures, would not be reasonably likely to result in a Material Adverse Effect on such Company.

(b) Performance of Obligations of the Companies . Each Company shall have performed in all material respects all obligations required to be performed by it under this Agreement at or prior to the Effective Time, and Apple Nine shall have received a certificate signed on behalf of each Company by such Company’s chief executive officer or the chief financial officer to such effect.

(c) Consents . All consents and waivers from third parties as set forth on Schedule 6.2(c) of the Disclosure Letter of each of the Companies shall have been obtained, other than such consents and waivers from third parties, which, if not obtained, would not result, individually or in the aggregate, in a Material Adverse Effect on any Company.

(d) Absence of Changes . From the date of this Agreement through the Effective Time, there shall have been no Material Adverse Effect on either Company.

(e) Tax Opinions Relating to REIT Status . Each of the Companies shall provide Apple Nine an opinion of MW, or other counsel to such Company reasonably satisfactory to Apple Nine, dated as of the date of the Closing Date, opining that such Company has been organized and has operated in conformity with the requirements for qualification as a REIT under the Code commencing with such Company’s taxable year ended as set forth on Schedule 6.2(e) of the Disclosure Letter of such Company and through such Company’s taxable year ended December 31, 2012 and that such Company’s organization and proposed method of operation will enable it to continue to meet the requirements for qualification and taxation as a REIT for subsequent taxable years. Such opinion shall be based upon customary assumptions and customary representations made by such Company and its Subsidiaries, and such opinion shall be subject to such changes or modifications as may be deemed necessary or appropriate by MW (or such counsel rendering the opinion and as shall be reasonably satisfactory to Apple Nine).

Section 6.3 Conditions to Obligation of the Companies . The obligations of each of the Companies to effect the Merger to which it is a party and to consummate the other transactions contemplated hereby are further subject to the following conditions, any one or more of which may be waived by each Company (acting at the direction of the Special Committee thereof):

(a) Representations and Warranties . (i) Each of the representations and warranties of Apple Nine and the Acquisition Subsidiaries set forth in Section 3.2(a) , Section 3.2(c) , Section 3.2(d)(i) and Section 3.2(j) of this Agreement shall be true and correct in all material respects as of the Closing Date, as though made on and as of the Closing Date, except to the extent the representation or warranty is expressly limited by its terms to another date,

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(ii) each of the representations and warranties of the other Company set forth in Section 3.1(a) , Section 3.1(c) , Section 3.1(d)(i) and Section 3.1(j) of this Agreement shall be true and correct in all material respects as of the Closing Date, as though made on and as of the Closing Date, except to the extent the representation or warranty is expressly limited by its terms to another date and (iii) the other representations and warranties of Apple Nine and the Acquisition Subsidiaries, and the other Company, set forth in this Agreement shall be true and correct as of the Closing Date, as though made on and as of the Closing Date, except to the extent the representation or warranty is expressly limited by its terms to another date, and each of the Companies shall have received a certificate (which certificate may be qualified by knowledge to the same extent as such representations and warranties are so qualified) signed on behalf of the other Apple REITs by the chief executive officer or the chief financial officer of the other Apple REITs to such effect with regard to its own representations and warranties, and for Apple Nine, the representations and warranties of itself and the Acquisition Subsidiaries. This condition shall be deemed satisfied notwithstanding any failure of a representation or warranty of each of the other Apple REITs set forth in clause (iii) above to be true and correct as of the Closing Date if such failure (without giving effect to any materiality qualification or standard contained in any such representation or warranty), either individually or in the aggregate with any other such failures, would not be reasonably likely to result in a Material Adverse Effect on Apple Nine or a Material Adverse Effect on the other Company, as the case may be.

(b) Performance of Obligations of Other Apple REITs and Acquisition Subsidiaries . Each of the other Apple REITs and Acquisition Subsidiaries shall have performed in all material respects all obligations required to be performed by it under this Agreement at or prior to the Effective Time, and each Company shall have received a certificate of the other Apple REITs signed on behalf of the other Apple REITs by the chief executive officer or the chief financial officer of such party to such effect with regard to itself and for Apple Nine, itself and the Acquisition Subsidiaries.

(c) Consents . All consents and waivers from third parties as set forth on Schedule 6.3(c) of the Disclosure Letter of Apple Nine and as set forth on Schedule 6.2(c) of the other Company shall have been obtained, other than such consents and waivers from third parties, which, if not obtained, would not result, individually or in the aggregate, in a Material Adverse Effect on Apple Nine or a Material Adverse Effect on the other Company, as the case may be.

(d) Absence of Changes . From the date of this Agreement through the Effective Time, there shall have been no Material Adverse Effect on Apple Nine or the other Company.

(e) Tax Opinion Relating to REIT Status . Apple Nine shall provide the Companies an opinion of MW, or other counsel to Apple Nine reasonably satisfactory to the Companies, dated as of the date of the Closing Date, opining that Apple Nine has been organized and has operated in conformity with the requirements for qualification as a REIT under the Code commencing with Apple Nine’s taxable year ended December 31, 2008 and through Apple Nine’s taxable year ended December 31, 2012 and that Apple Nine’s organization and proposed method of operation will enable it to continue to meet the requirements for qualification and taxation as a REIT for subsequent taxable years. Such opinion shall be based upon customary

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assumptions and customary representations made by Apple Nine and its Subsidiaries, and such opinion shall be subject to such changes or modifications as may be deemed necessary or appropriate by MW (or such counsel rendering the opinion and as shall be reasonably satisfactory to the Companies).

ARTICLE VII

BOARD ACTIONS

Section 7.1 Board Actions .

(a) Notwithstanding anything to the contrary in Section 5.4 , at any time prior to obtaining the Required Shareholder Approval for the Target Party, the Target Party may furnish or cause to be furnished information to, and enter or cause to be entered into discussions with, and only with, a Person (and its representatives) who has made a bona fide written Acquisition Proposal that was not solicited on or after the date of this Agreement and that did not otherwise result from a breach of Section 5.4(a) , if the Target Party’s Special Committee (the “Target Special Committee”) has (i) determined in good faith that such Acquisition Proposal constitutes or is reasonably likely to lead to a Superior Competing Transaction, and (ii) obtained from such Person an executed confidentiality agreement containing terms that are determined in good faith by the Target Special Committee to be substantially similar to and not less favorable to the Target Party and the Non-Target Parties, in the aggregate, than those contained in the Confidentiality Agreement (other than those relating to any standstill provisions contained therein) (it being understood that such confidentiality agreement and any related agreements shall not include any provision calling for any exclusive right to negotiate with such Person or having the effect of prohibiting the Target Party from satisfying its obligations under this Agreement). Unless such information has been previously provided to the Non-Target Parties, all information that is provided by the Target Party to the Person making such Acquisition Proposal shall be provided to the Non-Target Parties.

(b) Notwithstanding anything to the contrary in Section 5.4 , at any time prior to obtaining the Required Shareholder Approval for the Target Party, if the Target Party receives an unsolicited written Acquisition Proposal that did not result from a breach of Section 5.4 and that the Target Special Committee determines in good faith (after consultation with its outside legal counsel and its financial advisor or advisors) constitutes a Superior Competing Transaction, the Target Party may terminate this Agreement to enter into a definitive agreement with respect to such Superior Competing Transaction if its Special Committee determines in good faith, after consultation with outside counsel, that the failure to do so would be inconsistent with its fiduciary duties to the shareholders of such Target Party under applicable Law; provided that concurrently with such termination the Target Party pays the applicable Termination Fee payable pursuant to Section 8.3 ; and provided, further, that the Target Party may not terminate this Agreement pursuant to this Section 7.1(b) unless (i) the Target Party shall have provided prior written notice (a “Termination Notice”) to the Non-Target Parties (including the Special Committees thereof), at least five Business Days in advance of taking such action (the “Notice Period”), of its intention to terminate this Agreement to enter into a definitive agreement with respect to such Superior Competing Transaction, which notice shall specify the material terms and conditions of the Superior Competing Transaction (including the identity of the party making the Superior Competing Transaction), and shall be accompanied by a copy of a draft of

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the definitive agreement proposed to be entered into with respect to the Superior Competing Transaction, and (ii) during the Notice Period, the Target Party shall negotiate in good faith with the Non-Target Parties (to the extent the Non-Target Parties desire to do so) to make such adjustments to the terms and conditions of this Agreement such that such Acquisition Proposal would no longer constitute a Superior Competing Transaction and provided further, however, that after the expiration of such five Business Day period and prior to the termination of this Agreement pursuant to this Section 8.1(f) , the Target Special Committee shall have confirmed (after taking into account any such adjustments to the terms and conditions of this Agreement) that the Acquisition Proposal continues to be a Superior Competing Transaction.

Section 7.2 Definition of Superior Competing Transaction . For purposes of this Agreement, “Superior Competing Transaction” shall mean a bona fide Acquisition Proposal (for the purposes of this definition, all references to “25%” in the definition of “Competing Transaction” shall be deemed references to “50%”) made by a third Person (or group of Persons) (and not obtained in breach of this Agreement, including, without limitation, Section 5.4 ) on terms which the Special Committee of the Target Party determines (after consultation with its outside legal counsel and its financial advisor or advisors) in good faith to be more favorable to the Target Party’s shareholders than the Mergers, taking into account all relevant factors, including value and other financial considerations, legal and regulatory considerations and any conditions to, and expected timing and risks of, completion, as well as any changes to the terms of the Mergers proposed by the Non-Target Parties in response to such Superior Competing Transaction.

ARTICLE VIII

TERMINATION, AMENDMENT AND WAIVER

Section 8.1 Termination . This Agreement may be terminated at any time prior to the filing of the Articles of Merger for each Merger with the State Corporation Commission of the Commonwealth of Virginia, whether before or after the Required Shareholder Approvals are obtained:

(a) by mutual written consent duly authorized by the respective Boards of Directors of each Apple REIT (with the prior approval of the Special Committee of each Apple REIT);

(b) by any Apple REIT (with the prior approval of the Special Committee of such Apple REIT), upon a breach of any representation, warranty, covenant or agreement on the part of any of the other Apple REITs set forth in this Agreement, or if any representation or warranty of any of the other Apple REITs shall have become untrue, in either case such that the conditions set forth in Section 6.2(a) , Section 6.2(b) , Section 6.3(a) or Section 6.3(b) as the case may be, would be incapable of being satisfied by the Outside Date (as otherwise extended);

(c) by any Apple REIT (with the prior approval of the Special Committee of such Apple REIT), if any judgment, injunction, order, decree or action by any Governmental Entity of competent authority preventing the consummation of the Mergers shall have become final and nonappealable, provided, however, that a party that has willfully and materially breached a representation, warranty or covenant of such party set forth in this Agreement that has

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proximately contributed to the occurrence of such judgment, injunction, order, decree or action shall not be entitled to exercise its right to terminate under this Section 8.1(c) ;

(d) by any Apple REIT (with the prior approval of the Special Committee of such Apple REIT), if the Mergers shall not have been consummated before the Outside Date; provided, however, that a party that has willfully and materially breached a representation, warranty or covenant of such party set forth in this Agreement shall not be entitled to exercise its right to terminate under this Section 8.1(d) ;

(e) by any Apple REIT if, upon a vote at a duly held Shareholder Meeting or any adjournment thereof, one of the Required Shareholder Approvals has not been obtained;

(f) by the Special Committee of any Apple REIT before the Required Shareholder Approvals are obtained, (i) if the Special Committee of such Apple REIT makes an Adverse Recommendation Change as permitted by Section 5.4(c) or (ii) in order to enter into any agreement with respect to any Superior Competing Transaction (other than a confidentiality agreement as contemplated by Section 7.1(a) ); provided such Apple REIT has complied with the provisions of Section 5.4 and Section 7.1 in connection with such Competing Transaction; or

(g) by any Apple REIT (with the prior approval of the Special Committee of such Apple REIT) before the Required Shareholder Approvals are obtained, if (i) the Special Committee or Board of Directors of any other Apple REIT makes an Adverse Recommendation Change, (ii) any other Apple REIT enters into any agreement with respect to any Competing Transaction (other than a confidentiality agreement as contemplated by Section 7.1(a) ), or (iii) the Board of Directors of any other Apple REIT or the Special Committee of any other Apple REIT or any other committee thereof resolves to, or publicly attempts to, do any of the foregoing.

For purposes of this Section 8.1 , the term “Outside Date” shall mean February 28, 2014; provided that if, prior to January 1, 2014, (i) the Form S-4 has not been declared effective by the SEC or (ii) the parties have not received all necessary consents as set forth on Schedule 6.2(c) of each Company’s Disclosure Letter and as set forth on Schedule 6.3(c) of Apple Nine’s Disclosure Letter, then the Outside Date shall be extended on a daily basis until the Form S-4 has been declared effective by the SEC and such consents have been received; provided, further, that the Outside Date shall be no later than April 30, 2014.

Section 8.2 Expenses .

(a) Except as otherwise specified in this Agreement, on Schedule 8.2 to each Apple REIT’s Disclosure Letter, or agreed in writing by the parties, all out-of-pocket costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such cost or expense.

(b) In the event that Apple Nine or any Company is required to file suit to seek all or a portion of the amounts payable under this Section 8.2 , and such party prevails in such litigation, such party shall be entitled to receive, in addition to all amounts that it is otherwise entitled to receive under this Section 8.2 all expenses, including attorney’s fees and expenses which it has incurred in enforcing its rights hereunder.

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Section 8.3 Effect of Termination .

(a) In the event of termination of this Agreement by either Company or Apple Nine as provided in Section 8.1 , this Agreement shall forthwith become void and have no effect, without any liability or obligation on the part of Apple Nine, or the Companies, other than Section 8.2 , this Section 8.3 and ARTICLE IX , as provided in Section 5.2 and except to the extent that such termination results from a willful and material breach by a party of any of its representations, warranties, covenants or agreements set forth in this Agreement.

(b) Subject to the provisions of Section 8.4 , Apple Seven shall pay to each of the other Apple REITs by wire transfer of immediately available funds an amount equal to $1.7 million plus the reasonable third party expenses of such other Apple REIT, including legal fees and expenses (it being understood that this reimbursement of expenses shall be without duplication) (the “Apple Seven Termination Fee”) if this Agreement is terminated: (i) by Apple Seven pursuant to Section 8.1(f) , in which case the Apple Seven Termination Fee shall be paid before or concurrently with such termination and shall be a condition to the effectiveness of such termination; (ii) by any other Apple REIT pursuant to Section 8.1(g) as a result of the actions by the Board of Directors of Apple Seven (with the prior approval of the Special Committee of Apple Seven), the Special Committee of Apple Seven or any other committee thereof, in which case the Apple Seven Termination Fee shall be paid within two Business Days of such termination, or (iii) (A) by Apple Seven pursuant to Section 8.1(d) , (B) by any other Apple REIT if the Shareholder Approval of Apple Seven is not obtained as contemplated by Section 8.1(e) or (C) by any other Apple REIT pursuant to a willful or intentional breach by Apple Seven under Section 8.1(b) , in either case such that the conditions to closing set forth in Section 6.2(a) and Section 6.3(a) , as applicable, cannot be satisfied, if (x) a Competing Transaction shall have been made or proposed to Apple Seven or otherwise publicly announced and has not been publicly withdrawn prior to such termination, and (y) within 12 months following the date of such termination, Apple Seven enters into an agreement providing for the implementation of a Competing Transaction which is consummated or shall consummate a Competing Transaction (whether or not such Competing Transaction was the same Competing Transaction as that referred to in clause (x) above), in which case the Apple Seven Termination Fee shall be paid within two Business Days of Apple Seven consummating such Competing Transaction, as applicable.

(c) Subject to the provisions of Section 8.4 , Apple Eight shall pay to each of the other Apple REITs by wire transfer of immediately available funds an amount equal to $1.7 million plus the reasonable third party expenses of such other Apple REIT, including legal fees and expenses (it being understood that this reimbursement of expenses shall be without duplication) (the “Apple Eight Termination Fee”) if this Agreement is terminated: (i) by Apple Eight pursuant to Section 8.1(f) , in which case the Apple Eight Termination Fee shall be paid before or concurrently with such termination and shall be a condition to the effectiveness of such termination; (ii) by any other Apple REIT pursuant to Section 8.1(g) as a result of the actions by the Board of Directors of Apple Eight (with the prior approval of the Special Committee of Apple Eight), the Special Committee of Apple Eight or any other committee thereof, in which case the Apple Eight Termination Fee shall be paid within two Business Days of such termination, or (iii) (A) by Apple Eight pursuant to Section 8.1(d) , (B) by any other Apple REIT if the Shareholder Approval of Apple Eight is not obtained as contemplated by Section 8.1(e) or

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(C) by any other Apple REIT pursuant to a willful or intentional breach by Apple Eight under Section 8.1(b) , in either case such that the conditions to closing set forth in Section 6.2(a) and Section 6.3(a) , as applicable, cannot be satisfied, if (x) a Competing Transaction shall have been made or proposed to Apple Eight or otherwise publicly announced and has not been publicly withdrawn prior to such termination, and (y) within 12 months following the date of such termination, Apple Eight enters into an agreement providing for the implementation of a Competing Transaction which is consummated or shall consummate a Competing Transaction (whether or not such Competing Transaction was the same Competing Transaction as that referred to in clause (x) above), in which case the Apple Eight Termination Fee shall be paid within two Business Days of Apple Eight consummating such Competing Transaction, as applicable.

(d) Subject to the provisions of Section 8.4 , Apple Nine shall pay to each of the Companies by wire transfer of immediately available funds an amount equal to $1.7 million plus the reasonable third party expenses of such Company, including legal fees and expenses (it being understood that this reimbursement of expenses shall be without duplication) (the “Apple Nine Termination Fee”) if this Agreement is terminated: (i) by Apple Nine pursuant to Section 8.1(f) , in which case the Apple Nine Termination Fee shall be paid before or concurrently with such termination and shall be a condition to the effectiveness of such termination; (ii) by any Company pursuant to Section 8.1(g) as a result of the actions by the Board of Directors of Apple Nine (with the prior approval of the Special Committee of Apple Nine), the Special Committee of Apple Nine or any other committee thereof, in which case the Apple Nine Termination Fee shall be paid within two Business Days of such termination, or (iii) (A) by Apple Nine pursuant to Section 8.1(d) , (B) by any Company if the Shareholder Approval of Apple Nine is not obtained as contemplated by Section 8.1(f) or (C) by any Company pursuant to a willful or intentional breach by Apple Nine under Section 8.1(b) , in either case such that the conditions to closing set forth in Section 6.3(a) cannot be satisfied, if (x) a Competing Transaction shall have been made or proposed to Apple Nine or otherwise publicly announced and has not been publicly withdrawn prior to such termination, and (y) within 12 months following the date of such termination, Apple Nine enters into an agreement providing for the implementation of a Competing Transaction which is consummated or shall consummate a Competing Transaction (whether or not such Competing Transaction was the same Competing Transaction as that referred to in clause (x) above), in which case the Apple Nine Termination Fee shall be paid within two Business Days of Apple Nine consummating such Competing Transaction, as applicable.

Section 8.4 Escrow of Termination Fee .

(a) In the event that an Apple REIT is obligated to pay a Termination Fee set forth in Section 8.3 , such Apple REIT shall pay to each of the other Apple REITs from the Termination Fee deposited into escrow in accordance with the next sentence, an amount equal to the lesser of (i) the Termination Fee and (ii) the sum of (1) the maximum amount that can be paid to each of the other Apple REITs without causing such Apple REIT to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code determined as if the payment of such amount did not constitute income described in Sections 856(c)(2)(A)(H) or 856(c)(3)(A)(I) of the Code (“Qualifying Income”), as determined by such Apple REIT’s independent certified public accountants, plus (2) in the event such Apple REIT receives either (A) a letter from the its

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counsel indicating that such Apple REIT has received a ruling from the IRS described in Section 8.4(b) or (B) an opinion from such Apple REIT’s outside counsel as described in Section 8.4(b) , an amount equal to the Termination Fee less the amount payable under clause (1) above. To secure the Apple REIT’s obligation to pay these amounts, it shall deposit into escrow an amount in cash equal to the Termination Fee with an escrow agent selected by all the Apple REITs and on such terms (subject to Section 8.4(b) ) as shall be mutually agreed upon by the Apple REITs and the escrow agent. The payment or deposit into escrow of an Apple REIT pursuant to this Section 8.4(a) shall be made at the time such Apple REIT is obligated to pay each of the other Apple REITs such amount pursuant to Section 8.3 by wire transfer.

(b) The escrow agreement shall provide that the Termination Fee in escrow or any portion thereof shall not be released to each of the other Apple REITs unless the escrow agent receives any one or combination of the following: (i) a letter from such Apple REIT’s independent certified public accountants indicating the maximum amount that can be paid by the escrow agent to it without causing it to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code determined as if the payment of such amount did not constitute Qualifying Income or a subsequent letter from such Apple REIT’s accountants revising that amount, in which case the escrow agent shall release such amount to such Apple REIT, or (ii) a letter from such Apple REIT’s counsel indicating that such Apple REIT received a ruling from the IRS holding that the receipt by it of the Termination Fee would either constitute Qualifying Income or would be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code (or alternatively, such Apple REIT’s outside counsel has rendered a legal opinion to the effect that the receipt by such Apple REIT of the Termination Fee would constitute Qualifying Income, would be excluded from gross income within the meaning of Sections 856(c)(2) and (3) of the Code or would not otherwise disqualify such Apple REIT as a REIT), in which case the escrow agent shall release the remainder of the Termination Fee to such Apple REIT. The parties hereto agree to amend this Section 8.4 at the request of any Apple REIT in order to (x) maximize the portion of the Termination Fee that may be distributed to any Apple REIT hereunder without causing such Apple REIT to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code, (y) improve such Apple REIT’s chances of securing a favorable ruling described in this Section 8.4(b) or (z) assist such Apple REIT in obtaining a favorable legal opinion from its outside counsel as described in this Section 8.4(b) . The escrow agreement shall also provide that any portion of the Termination Fee held in escrow for five years shall be released by the escrow agent to such Apple REIT.

Section 8.5 Amendment; Actions . This Agreement may be amended by the parties in writing (following the approval of such action by the Special Committees of the respective Apple REITs) at any time before or after the Required Shareholder Approvals are obtained and prior to the Effective Time; provided, however, that, after the Required Shareholder Approvals are obtained, no such amendment, modification or supplement shall change (i) the amount or kind of consideration to be delivered to each Company’s shareholders, (ii) the articles of incorporation of the Surviving Corporations except for changes permitted by Section 13.1-706 of the VSCA or (iii) any of the other terms or conditions of this Agreement that would adversely affect the shareholders of the Companies in any material respect. From and after the date hereof, the Board of Directors of each Apple REIT shall act solely with the prior approval of the Special Committee thereof with respect to any actions of such Apple REIT to be taken with respect to this Agreement, including any amendment, modification, or waiver of this Agreement.

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Section 8.6 Extension; Waiver . At any time prior to the Effective Time, the Apple REITs (following approval of such action by the Special Committees of the respective Apple REITs) may (a) extend the time for the performance of any of the obligations or other acts of a party to this Agreement, (b) waive any inaccuracies in the representations and warranties of the other parties contained in this Agreement or in any document delivered pursuant to this Agreement or (c) subject to the proviso of Section 8.5 , waive compliance with any of the agreements or conditions of the other parties contained in this Agreement. Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party, and agreed to in writing by each of the Apple REITs (acting with the prior approval of the Special Committees of each respective Apple REIT). The failure of any party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of those rights.

ARTICLE IX

GENERAL PROVISIONS

Section 9.1 Nonsurvival of Representations and Warranties . None of the representations and warranties in this Agreement or in any instrument delivered pursuant to this Agreement shall survive the Effective Time. This Section 9.1 shall not limit any covenant or agreement of the parties which by its terms contemplates performance after the Effective Time.

Section 9.2 Notices . All notices, requests, claims, demands and other communications under this Agreement shall be in writing and shall be deemed given if delivered personally, sent by overnight courier (providing proof of delivery) to the parties or sent by telecopy (providing confirmation of transmission) at the following addresses or telecopy numbers (or at such other address or telecopy number for a party as shall be specified by like notice):

(a) if to Apple Nine or the Acquisition Subsidiaries to:

Apple REIT Nine, Inc.

814 East Main Street

Richmond, VA 23219

Attn: Glade M. Knight

Fax: (804) 344-8129

with a copy to:

McGuireWoods LLP

901 East Cary Street

One James Center

Richmond, VA 23219

Attn: David W. Robertson, Esq.

Fax: (804) 775-1061

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and to:

Hogan Lovells US LLP

Columbia Square

555 Thirteenth Street, NW

Washington, DC 20004

Attn: Paul D. Manca, Esq.

David W. Bonser, Esq.

Fax: (202) 637-5910

(b) if to Apple Seven to:

Apple REIT Seven, Inc.

814 East Main Street

Richmond, VA 23219

Attn: David Buckley

Fax: (804) 344-8129

with a copy to:

Foley & Lardner LLP

One Independent Drive

Suite 1300

Jacksonville, Florida 32202-5017

Attn: Michael B. Kirwan, Esq.

Fax: (904) 359-8700

Apple REIT Eight, Inc.

814 East Main Street

Richmond, VA 23219

Attn: David Buckley

Fax: (804) 344-8129

with a copy to:

Kaufman & Canoles

1021 East Cary Street, Suite 1400

Two James Center

Richmond, VA 23219

Attn: Elizabeth Hester, Esq.

Fax: (804) 771-5777

All notices shall be deemed given only when actually received.

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Section 9.3 Interpretation . When a reference is made in this Agreement to a Section, such reference shall be to a Section of this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.”

Section 9.4 Counterparts . This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties.

Section 9.5 Entire Agreement; No Third-Party Beneficiaries . This Agreement and the other agreements entered into in connection with the transactions contemplated hereby (a) constitute the entire agreement and supersedes all prior agreements and understandings, both written and oral, between the parties hereto with respect to the subject matter of this Agreement and, (b) except for the provisions of ARTICLE II and Section 5.8 , are not intended to confer upon any person other than the parties hereto any rights or remedies.

Section 9.6 Governing Law . This Agreement shall be governed by, and construed in accordance with, the laws of the Commonwealth of Virginia, regardless of the laws that might otherwise govern under applicable principles of conflict of laws thereof.

Section 9.7 Assignment . Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned or delegated, in whole or in part, by operation of law or otherwise by any party without the prior written consent of the other parties (with the prior approval of the Special Committee of such party). Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns.

Section 9.8 Enforcement . The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any court of the United States located in the Commonwealth of Virginia or in any Virginia state court, this being in addition to any other remedy to which they are entitled at law or in equity. The parties further agree not to assert that a remedy of specific enforcement is unenforceable, invalid, contrary to Law or inequitable for any reason, nor to object to a remedy of specific performance on the basis that a remedy of monetary damages would provide an adequate remedy for any such breach. Each party further acknowledges and agrees that the agreements contained in this Section 9.8 are an integral part of the transactions contemplated by this Agreement and that, without these agreements, the other parties would not enter into this Agreement. Each party further agrees that no other party hereto or any other Person shall be required to obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in this Section 9.8 , and each party hereto irrevocably waives any right it may have to require the obtaining, furnishing or posting of any such bond or similar instrument. In addition, each of the parties hereto (a)

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consents to submit itself (without making such submission exclusive) to the personal jurisdiction of any federal court located in the Commonwealth of Virginia or any Virginia state court in the event any dispute arises out of this Agreement or any of the transactions contemplated by this Agreement and (b) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 9.9 Incorporation . Each Disclosure Letter of a Company, the Apple Nine Disclosure Letter and all Exhibits attached hereto and thereto and referred to herein and therein are hereby incorporated herein and made a part hereof for all purposes as if fully set forth herein.

Section 9.10 Non-Recourse . None of the officers, directors or shareholders of the Apple REITs or the officers or directors of the Acquisition Subsidiaries shall be personally bound or have any personal liability hereunder. The parties hereto shall look solely to the assets of any other party or parties of this Agreement for satisfaction of any liability of such party or other parties with respect to this Agreement. The parties hereto will not seek recourse or commence any action against any of the shareholders of any other party to this Agreement or any of their personal assets, and will not commence any action for money judgments against any of the directors or officers of any other party to this Agreement or seek recourse against any of their personal assets, for the performance or payment of any obligation of any other party.

Section 9.11 Severability . Whenever possible, each provision or portion of any provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable Law, but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable Law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or portion of any provision in such jurisdiction, and this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained herein.

ARTICLE X

CERTAIN DEFINITIONS

Section 10.1 Certain Definitions . For purposes of this Agreement:

An “Affiliate” of any person means another person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities, by contract or otherwise.

“Ancillary Agreements” means the Voting Agreement, the Termination Agreement and the Subcontract Agreement.

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“Apple Nine Disclosure Letter” means the letter, dated the date hereof, previously delivered to the Companies by Apple Nine disclosing certain information regarding Apple Nine in connection with this Agreement.

“Apple Nine Shareholder Approval” means (i) the vote of the holders of a majority of the issued and outstanding Apple Nine Common Shares is required to approve each of the Apple Nine Articles Amendments pursuant to Section 8.1 of the Apple Nine Articles, (ii) the vote of the holders of a majority of the issued and outstanding Apple Nine Common Shares is required to approve the Apple Nine Bylaws Amendment pursuant to Section 12.1 of the Apple Nine Bylaws, and (iii) in addition to the approvals required under Section 8.1 of the Apple Nine Articles and Section 12.1 of the Apple Nine Bylaws, the affirmative vote of the holders of a majority of the Apple Nine Common Shares and Apple Nine Series A Shares (each voting as a separate voting group) that are not owned by or voted under the control of Apple Nine’s directors is required to approve each of (A) this Agreement and the other transactions contemplated hereby, (B) the Apple Nine Articles Amendments and (C) the Apple Nine Bylaws Amendment.

“Apple Nine Stock Incentive Plans” means those plans listed on Schedule 10.1(a) of the Apple Nine Disclosure Letter.

“Apple Six” means Apple REIT Six, Inc., a Virginia corporation.

“Business Day” means any day other than a Saturday, a Sunday or a day on which banks in New York, New York are authorized or obligated by law or executive order to close.

“Confidentiality Agreement” means that certain confidentiality agreement among the Apple REITs dated as of June 19, 2013.

“Contract” means any contract, agreement, license, note, bond, mortgage, indenture, commitment, lease, purchase order or other instrument or obligation.

“Disclosure Letter” means the letter, dated the date hereof, previously delivered by a Company pursuant to this Agreement disclosing certain information regarding such Company in connection with this Agreement.

“Environmental Claim” means any claim, action, cause of action, investigation or written notice by any person or entity alleging potential liability (including, without limitation, potential liability for investigatory costs, cleanup costs, governmental response costs, natural resources damages, property damages, personal injuries, or penalties) arising out of, based on or resulting from (a) the presence or Release of any Hazardous Substances at any location, whether or not owned or operated by the Seller, or (b) circumstances forming the basis of any violation of or noncompliance with any Environmental Law.

“Environmental Laws” means all federal, state, local, foreign and common Laws and regulations relating to pollution or protection of human health or the environment, including without limitation, laws relating to the exposure to, or Releases or threatened Releases of, Hazardous Substances or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, Release, transport or handling of Hazardous Substances and all laws and

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regulations with regard to recordkeeping, notification, disclosure and reporting requirements respecting Hazardous Substances.

“Intellectual Property” means all U.S., state and foreign (i) patents, patent applications and statutory invention registrations, (ii) trademarks, service marks, trade dress, logos, trade names, corporate names, domain names and other source identifiers, and registrations and applications for registration thereof, (iii) copyrightable works, copyrights, and registrations and applications for registration thereof and (iv) trade secrets under applicable law, including confidential and proprietary information and know-how.

“Knowledge” where used herein with respect to (i) a Company shall mean the actual knowledge of any of the persons named on Schedule 10.1(b) of the Disclosure Letter of such Company and (ii) Apple Nine shall mean the actual knowledge of any of the persons named on Schedule 10.1(b) of the Apple Nine Disclosure Letter. “Knowledge” shall not include the “constructive” or deemed knowledge of any such persons, or the existence of facts or circumstances which might constitute “reason to know” by such person or which might lead to the conclusion that such person “should have known” unless, in any such case, such person has actual knowledge of the matter in question.

“Law” means any federal, state, local or foreign statute, law, regulation, permit, license, approval, authorization, rule, ordinance or code of any Governmental Entity, including any judicial or administrative interpretation thereof.

“Legal Action” means any legal action, claim, demand, arbitration, hearing, charge, complaint, investigation, examination, indictment, litigation, suit or other civil, criminal, administrative or investigative proceeding.

“Liabilities” means any and all debts, liabilities and obligations of any nature whatsoever, whether accrued or fixed, absolute or contingent, including those arising under any Law, those arising under any contract, agreement, commitment, instrument, permit, license, franchise or undertaking and those arising as a result of any act or omission.

“Material Adverse Effect” means any circumstance, development, effect, event, Liability or change that individually or in the aggregate with all other circumstances, developments, effects, events, Liabilities or changes, is or is likely to become materially adverse to (A) the business, properties, assets, liabilities, condition (financial or otherwise) or results of the operations of such Apple REIT or the Subsidiaries of such Apple REIT, on a consolidated basis taken as a whole, other than circumstances, developments, effects, events, Liabilities or changes arising out of or resulting from (i) changes in economic, market or business conditions generally in the United States or any other jurisdiction in which such Apple REIT or its Subsidiaries operate or in the United States or global financial markets generally, including changes in interest or exchange rates, (ii) changes, circumstances or events that, in each case, generally affect the hospitality industry in the jurisdictions in which such Apple REIT or its Subsidiaries operate, (iii) changes in any Law or GAAP following the date hereof, (iv) the negotiation, execution or announcement of this Agreement or the consummation of the transactions contemplated by this Agreement, including the impact thereof on relationships, contractual or otherwise, with customers, suppliers, licensors, distributors, lenders, partners or employees,

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(v) acts of war, sabotage or terrorism, or any escalation or worsening of any such acts of war, sabotage or terrorism threatened or underway as of the date of this Agreement, (vi) earthquakes or other natural disasters, which circumstance, development, effect, event, Liability or change, in the case of each of clause (i) , (ii) , (v) and (vi) , does not affect such Apple REIT or the Subsidiaries of such Apple REIT in a materially disproportionate manner relative to other participants in the hotel industry or (B) the ability of such Apple REIT to perform its obligations under this Agreement.

“National securities exchange” means a securities exchange registered with the SEC under Section 6 of the Exchange Act.

“Organizational Documents” means the articles of incorporation and by-laws of a Company and the articles of incorporation, by-laws, partnership agreements or other organizational documents of each of its Subsidiaries collectively.

“Person” means an individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization or other entity.

“Release” means any release, spill, emission, discharge, leaking, pumping, injection, deposit, disposal, dispersal, leaching or migration into the indoor or outdoor environment (including, without limitation, ambient air, surface water, groundwater and surface or subsurface strata) or into or out of any property, including the movement of Hazardous Substances through or in the air, soil, surface water, groundwater or property.

“Shareholder Approval” means the affirmative vote of the shareholders of a Company as follows:

In the case of Apple Seven, (i) the affirmative vote of the holders of at least a majority of the issued and outstanding Apple Seven Common Shares, Apple Seven Series A Shares and Apple Seven Series B Shares (each voting as a separate voting group) to approve the Apple Seven Merger, the Apple Seven Plan of Merger and the other transactions contemplated by this Agreement, and (ii) the affirmative vote of the holders of a majority of the Apple Seven Common Shares and Apple Seven Series A Shares (each voting as a separate voting group) that are not owned by or voted under the control of any of Apple Seven’s directors to approve this Agreement and the transactions contemplated hereby.

In the case of Apple Eight, (i) the affirmative vote of the holders of at least a majority of the issued and outstanding Apple Eight Common Shares, Apple Eight Series A Shares and Apple Eight Series B Shares (each voting as a separate voting group) to approve the Apple Eight Merger, the Apple Eight Plan of Merger and the other transactions contemplated by this Agreement, and (ii) the affirmative vote of the holders of a majority of the Apple Eight Common Shares and Apple Eight Series A Shares (each voting as a separate voting group) that are not owned by or voted under the control of any of Apple Eight’s directors to approve this Agreement and the transactions contemplated hereby.

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“Shares” mean all Apple Seven Units, Apple Seven Series B Shares, Apple Eight Units, Apple Eight Series B Shares, Apple Nine Units and Apple Nine Series B Shares (other than Dissenting Shares).

“Stock Incentive Plans” means those plans listed on Schedule 10.1(c) to a Disclosure Letter.

“Subsidiary” or “Subsidiaries” means any other Person or Persons that a Person directly or indirectly owns or has the power to vote or control 50% or more of any class or series of capital stock or equity interests of such Person or Persons.

“Tax Protection Agreement” means any agreement, oral or written, to which such Apple REIT or any Subsidiary of such Apple REIT is a party in connection with the deferral of income Taxes of such Apple REIT or any Subsidiary of such Apple REIT has agreed to (i) maintain a minimum level of debt or continue a particular debt or (ii) retain or not dispose of assets for a period of time that has not since expired.

“Termination Fee” means any of the Apple Nine Termination Fee, the Apple Seven Termination Fee, the Apple Eight Termination Fee or the Apple Nine Termination Fee, as the case may be.

“Unit Ratio” means each of the Apple Seven Unit Ratio and Apple Eight Unit Ratio, respectively.

“Units” means each of the Apple Seven Units, Apple Eight Units and Apple Nine Units, respectively.

Section 10.2 Other Defined Terms . For purposes of this Agreement, the following terms have the respective meanings set forth in the section referenced opposite such term:

Defined Term	Section

Acquisition Agreement	Section 5.4(a)
Acquisition Proposal	Section 5.4(a)
Acquisition Subsidiaries	Heading
Acquisition Subsidiary	Heading
Adverse Recommendation Change	Section 5.4(c)
Agreement	Heading
Apple Eight	Heading
Apple Eight Common Shares	Section 2.1(a)(ii)
Apple Eight Consideration	Section 2.1(a)(ii)
Apple Eight Merger	Recitals
Apple Eight Plan of Merger	Section 1.1(b)
Apple Eight Series A Shares	Section 2.1(a)(ii)
Apple Eight Series B Consideration	Section 2.1(a)(ii)
Apple Eight Series B Shares	Section 2.1(a)(ii)
Apple Eight Stock Option	Section 2.1(e)(ii)

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Defined Term	Section

Apple Eight Termination Fee	Section 8.3(c)
Apple Eight Unit Consideration	Section 2.1(a)(ii)
Apple Eight Unit Ratio	Section 2.1(a)(ii)
Apple Eight Units	Section 2.1(a)(ii)
Apple Nine	Heading
Apple Nine Advisors	Section 6.1(g)
Apple Nine Amendments	Section 1.6(b)
Apple Nine Articles	Section 1.6(a)
Apple Nine Articles Amendments	Section 1.6(b)
Apple Nine Bylaws	Section 1.6(c)
Apple Nine Bylaws Amendment	Section 1.6(c)
Apple Nine Common Shares	Recitals
Apple Nine Dissenting Shares	Section 2.3(b)
Apple Nine Franchise Agreements	Section 3.2(n)(ii)
Apple Nine Management Agreement Documents	Section 3.2(n)(iii)
Apple Nine Material Contracts	Section 3.2(l)(i)(P)
Apple Nine Organizational Documents	Section 3.2(r)(ii)
Apple Nine Owned Hotels	Section 3.2(n)(i)
Apple Nine Prior Contamination	Section 3.2(m)(iv)
Apple Nine Properties	Section 3.2(n)(i)
Apple Nine SEC Documents	Section 3.2(e)(i)
Apple Nine Series A Shares	Section 2.1(d)
Apple Nine Series B Shares	Recitals
Apple Nine Shares	Section 3.2(c)(i)
Apple Nine Stock Options	Section 3.2(c)(i)
Apple Nine Termination Fee	Section 8.3(e)
Apple Nine Units	Section 2.1(d)
Apple REIT	Heading
Apple REITs	Heading
Apple Seven	Heading
Apple Seven Common Shares	Section 2.1(a)(i)
Apple Seven Consideration	Section 2.1(a)(i)
Apple Seven Merger	Recitals
Apple Seven Plan of Merger	Section 1.1(a)
Apple Seven Series A Shares	Section 2.1(a)(i)
Apple Seven Series B Consideration	Section 2.1(a)(i)
Apple Seven Series B Shares	Section 2.1(a)(i)
Apple Seven Stock Option	Section 2.1(e)(i)
Apple Seven Termination Fee	Section 8.3(b)
Apple Seven Unit Consideration	Section 2.1(a)(i)
Apple Seven Unit Ratio	Section 2.1(a)(i)
Apple Seven Units	Section 2.1(a)(i)
Apple Ten	Recitals
Apple Ten Advisors	Section 6.1(e)
Articles of Merger	Section 1.3

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Defined Term	Section

Assignment and Transfer Agreement	Section 6.1(j)
Closing	Section 1.2
Closing Date	Section 1.2
Code	Recitals
Companies	Heading
Company	Heading
Competing Transaction	Section 5.4(a)
Conversion Agreements	Recitals
Dissenting Shares	Section 2.3(b)
Effective Time	Section 1.3
Eight Acquisition Sub	Heading
Encumbrances	Section 3.1(n)(i)
Equity Equivalents	Section 4.1(e)
ERISA	Section 3.1(w)(i)
Exchange Act	Section 3.1(d)(iii)
Exchange Agent	Section 2.2(a)
FCPA	Section 3.1(k)(iii)
Financial Statement Date	Section 3.1(f)
First Apple Nine Articles Amendment	Section 1.6(a)
Form S-4	Section 5.1(a)
Franchise Agreements of such Company	Section 3.1(n)(ii)
GAAP	Section 3.1(e)(ii)
Governmental Entity	Section 3.1(d)(iii)
Hazardous Substance	Section 3.1(m)(iv)
IRS	Section 3.1(h)(ii)
Liens	Section 3.1(b)
Listing Date	Section 1.6(a)
Management Agreement Documents of such Company	Section 3(n)(iii)
Material Contracts of such Company	Section 3.1(l)(i)(P)
Merger	Recitals
Mergers	Recitals
Merger Consideration	Section 2.1(a)(ii)
Merger Dissenting Shares	Section 2.3(a)
Mr. Knight	Recitals
MW	Section 5.1(b)
New Apple Nine Stock Option	Section 2.1(e)(iv)
Nine Acquisition Sub	Heading
Non-Target Parties	Section 5.4(b)
Notice Period	Section 7.1(b)
Option Agreement	Recitals
Outside Date	Section 8.1
Owned Hotels of such Company	Section 3.1(n)(i)
Permits	Section 3.1(k)(i)
Plans of Merger	Section 1.1(c)
Prior Contamination	Section 3.1(m)(iv)

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Defined Term	Section

Properties of such Company	Section 3.1(n)(i)
Proxy Statement/Prospectus	Section 5.1(a)
Qualifying Income	Section 8.4(a)
REIT	Section 1.6(a)
Required Shareholder Approvals	Section 6.1(a)
Sarbanes-Oxley Act	Section 3.1(e)(i)
SEC	Section 3.1(d)(iii)
SEC Documents of such Company	Section 3.1(e)(i)
Second Apple Nine Articles Amendment	Section 1.6(b)
Securities Act	Section 3.1(e)(i)
Series B Convertible Shares	Recitals
Seven Acquisition Sub	Heading
Shareholder Meeting	Section 5.1(c)
Special Committee	Recitals
Subcontract Agreement	Section 6.1(i)
Superior Competing Transaction	Section 7.2
Surviving Corporation	Recitals
Surviving Corporations	Recitals
Takeover Statute	Section 5.3(a)
Target Party	Section 5.4(a)
Target Special Committee	Section 7.1(a)
Taxes	Section 3.1(h)(i)
Tax Return	Section 3.1(h)(i)
Termination Agreement	Section 5.7(a)
Termination Notice	Section 7.1(b)
Voting Agreement	Recitals
VSCA	Section 1.1

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IN WITNESS WHEREOF, Apple Nine, each of the Acquisition Subsidiaries and each of the Companies have caused this Agreement to be signed by their respective officers thereunto duly authorized, all as of the date first written above.

APPLE REIT SEVEN, INC.

By:

/s/ Glade M. Knight

Name:

Glade M. Knight

Title:

Chief Executive Officer

APPLE REIT EIGHT, INC.

By:

/s/ Glade M. Knight

Name:

Glade M. Knight

Title:

Chief Executive Officer

APPLE REIT NINE, INC.

By:

/s/ Glade M. Knight

Name:

Glade M. Knight

Title:

Chief Executive Officer

SEVEN ACQUISITION SUB, INC.

By:

/s/ Glade M. Knight

Name:

Glade M. Knight

Title:

Chief Executive Officer

EIGHT ACQUISITION SUB, INC.

By:

/s/ Glade M. Knight

Name:

Glade M. Knight

Title:

Chief Executive Officer

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Exhibit 99.1

ARTICLES OF AMENDMENT OF

ARTICLES OF INCORPORATION

APPLE REIT NINE, INC.

1. The name of the Corporation is Apple REIT Nine, Inc. (the “Corporation”).

2. The Articles of Incorporation of the Corporation (the “Articles”) are hereby amended as follows; provided, that the amendments set forth in paragraphs 2(a), 2(b), 2(c), 2(d) and 2(e) below shall become effective as of [TIME] on [DATE], 2013:

(a) Article I of the Articles shall be amended by deleting such Article in its entirety and inserting in lieu thereof, the following:

ARTICLE I

NAME

The name of the corporation (the “Corporation”) is Apple Hospitality REIT, Inc.

(b) Section 3.1 of the Articles shall be amended by deleting such Section in its entirety and inserting in lieu thereof, the following:

3.1 Number and Designation; Issuance in Classes and Series .

The number and designation of shares that the Corporation shall have authority to issue are as follows:

Class	Number of Shares
Common	800,000,000
Preferred	430,480,000

The Common Shares and the Preferred Shares shall have no par value per share. The Preferred Shares may be issued from time to time in one or more series. Notwithstanding anything to the contrary in these Articles of Incorporation, the Board of Directors, by adoption of an amendment of these Articles of Incorporation (“Articles of Amendment”), may fix in whole or in part the preferences, limitations, and relative rights, within the limits set forth in the Virginia Stock Corporation Act, of any series within the Preferred Shares prior to the issuance of any shares of that series.

(d) Article VIII of the Articles shall be amended by inserting a new Section 8.3, as follows:

8.3 Amendment of Bylaws . From and after the effectiveness of the initial listing of Common Shares on a national securities exchange, the Bylaws of the Corporation may be amended or repealed, or new bylaws adopted, at any time, and from time to time, (i) by the Board of Directors or (ii) upon the vote of the holders of a majority of the issued and outstanding Common Shares of the Corporation, and the shareholders in amending, repealing or adopting a bylaw may, except as prohibited by applicable law, expressly provide that the Board of Directors may not amend, repeal or reinstate that bylaw.

(e) Article X of the Articles shall be amended by deleting such Article in its entirety and inserting in lieu thereof, the following:

ARTICLE X

RESTRICTIONS ON TRANSFER AND OWNERSHIP OF SHARES

10.1 Definitions . For the purpose of this Article X, the following terms shall have the following meanings:

“Beneficial Ownership” The term “Beneficial Ownership” shall mean ownership of Shares (as defined below) by a Person, whether the interest in the Shares is held directly or indirectly (including by a nominee) by such Person, and shall include interests that would be treated as owned by any Person through the application of Section 544 of the Code, as modified by Sections 856(h)(1)(B) and 856(h)(3) of the Code. The terms “Beneficial Owner,” “Beneficially Owns” and “Beneficially Owned” shall have the correlative meanings.

“Business Day” The term “Business Day” shall mean any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions in New York, New York are authorized or required by law, regulation or executive order to close.

“Charitable Beneficiary” The term “Charitable Beneficiary” shall mean one or more beneficiaries of the Charitable Trust as determined pursuant to Section 10.3.(g), provided that each such organization must be described in Sections 501(c)(3), 170(b)(1)(A) and 170(c)(2) of the Code.

“Charitable Trust” The term “Charitable Trust” shall mean any trust provided for in Section 10.2.(b)(i) and Section 10.3.

“Charitable Trustee” The term “Charitable Trustee” shall mean the Person unaffiliated with both the Corporation and the relevant Prohibited Owner that is appointed by the Corporation to serve as trustee of the Charitable Trust.

“Common Share Ownership Limit” The term “Common Share Ownership Limit” shall mean not more than 9.8% (or such lower amount designated by the Board of Directors pursuant to Section 10.2.(j)) (in value or in number of Shares, whichever is more restrictive) of the aggregate of the outstanding Common Shares.

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“Constructive Ownership” The term “Constructive Ownership” shall mean ownership of Shares by a Person who is or would be treated as an owner of such Shares either actually or constructively through the application of Section 318 of the Code, as modified by Section 856(d)(5) of the Code. The terms “Constructive Owner,” “Constructively Own,” “Constructively Owns” and “Constructively Owned” shall have the correlative meanings.

“Initial Date” The term “Initial Date” shall mean the date of the consummation of the initial public offering of the Corporation (but only, with respect to such date, from and after such consummation).

“Market Price” The term “Market Price” on any date shall mean, with respect to any class or series of outstanding Shares, the Closing Price for such Shares on such date. The “Closing Price” on any date shall mean the last sale price for such Shares, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, for such Shares, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trade on the NYSE or, if such Shares are not listed or admitted to trade on the NYSE, as reported on the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which such Shares are listed or admitted to trading or, if such Shares are not listed or admitted to trade on any national securities exchange, the last quoted price, or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the principal automated quotation system that may then be in use or, if such Shares are not quoted by any such system, the average of the closing bid and asked prices as furnished by a professional market maker making a market in such Shares selected by the Board of Directors or, in the event that no trading price is available for such Shares, the fair market value of Shares, as determined in good faith by the Board of Directors.

“Non-Transfer Event” The term “Non-Transfer Event” shall mean any event or other changes in circumstances other than a purported Transfer, including, without limitation, any change in the value of any Shares and any redemption of any Shares.

“NYSE” The term “NYSE” shall mean the New York Stock Exchange.

“Person” The term “Person” shall mean an individual, corporation, partnership, limited liability company, estate, trust (including, without limitation, a trust qualified under Sections 401(a) or 501(c)(17) of the Code), a portion of a trust permanently set aside for or to be used exclusively for the purposes described in Section 642(c) of the Code, association, private foundation within the meaning of Section 509(a) of the Code, joint stock company or other entity and also includes a group as that term is used for purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

“Preferred Share Ownership Limit” The term “Preferred Share Ownership Limit” shall mean, with respect to any class or series of Preferred Shares, not more than 9.8% (in value or in number of Shares, whichever is more restrictive) of the aggregate of the outstanding Shares of such class or series of Preferred Shares.

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“Prohibited Owner” The term “Prohibited Owner” shall mean, with respect to any purported Transfer or Non-Transfer Event, any Person who, but for the provisions of Section 10.2., would Beneficially Own or Constructively Own Shares, and if appropriate in the context, shall also mean any Person who would have been the record owner of Shares that the Prohibited Owner would have so owned.

“REIT” The term “REIT” shall mean a real estate investment trust within the meaning of Sections 856 through 859 of the Code.

“Shares” The term “Shares” shall mean all shares of capital stock that the Corporation is authorized to issue under these Articles.

“Transfer” The term “Transfer” shall mean any issuance, sale, transfer, gift, assignment, devise or other disposition, as well as any other event that causes any Person to acquire or have Beneficial Ownership or Constructive Ownership, or any agreement to take any such actions or cause any such events, of Shares or the right to vote or receive dividends or distributions on Shares, including (a) a change in the capital structure of the Corporation, (b) a change in the relationship between two or more Persons which causes a change in ownership of Shares by application of Section 544 of the Code, as modified by Section 856(h) of the Code, (c) the granting or exercise of any option or warrant (or any acquisition or disposition of any option or warrant), pledge, security interest, or similar right to acquire Shares, (d) any acquisition or disposition of any securities or rights convertible into or exchangeable for Shares or any interest in Shares or any exercise of any such conversion or exchange right and (e) Transfers of interests in other entities that result in changes in Beneficial Ownership or Constructive Ownership of Shares; in each case, whether voluntary or involuntary, whether owned of record, Constructively Owned or Beneficially Owned and whether by operation of law or otherwise. The terms “Transferring” and “Transferred” shall have the correlative meanings.

10.2 Share Ownership Limitations .

(a) Basic Restrictions .

(i) No Person shall Beneficially Own or Constructively Own Common Shares in excess of the Common Share Ownership Limit unless, as provided in Section 10.2(i), the Board of Directors, in its sole and absolute discretion, increases the Common Share Ownership Limit, in which case no Person shall Beneficially Own or Constructively Own Common Shares in excess of such modified Common Share Ownership Limit.

(ii) No Person shall Beneficially Own or Constructively Own Preferred Shares in excess of the Preferred Share Ownership Limit unless, as provided in Section 10.2(i), the Board of Directors, in its sole and absolute discretion, increases the Preferred Share Ownership Limit, in which case no Person shall Beneficially Own or Constructively Own Preferred Shares in excess of such modified Preferred Share Ownership Limit.

(iii) No Person shall Beneficially Own or Constructively Own Shares to the extent that:

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(1) such Beneficial Ownership or Constructive Ownership of Shares would result in the Corporation being “closely held” within the meaning of Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year);

(2) such Beneficial Ownership or Constructive Ownership of Shares would result in (a) the Corporation owning (directly or indirectly) an interest in a tenant that is described in Section 856(d)(2)(B) of the Code if the income derived by the Corporation (either directly or indirectly through one or more partnerships or limited liability companies) from such tenant for the taxable year of the Corporation during which such determination is being made would reasonably be expected to equal or exceed the lesser of (I) one percent (1%) of the Corporation’s gross income (as determined for purposes of Section 856(c) of the Code), or (II) an amount that would cause the Corporation to fail to satisfy any of the gross income requirements of Section 856(c) of the Code or (b) any manager or operator of a “qualified lodging facility,” within the meaning of Section 856(d)(9)(D) of the Code, leased by the Corporation (or any subsidiary of the Corporation) to one of its taxable REIT subsidiaries with respect to the Corporation failing to qualify as an “eligible independent contractor,” within the meaning of Section 856(d)(9)(A) of the Code, in either case if the income derived by the Corporation from such tenant or such taxable REIT subsidiary, taking into account any other income of the Corporation that would not qualify under the gross income requirements of Section 856(c) of the Code, would (or in the sole judgment of the Board of Directors, could) cause the Corporation to fail to satisfy any of such gross income requirements; or

(3) such Beneficial Ownership or Constructive Ownership of Shares would result in the Corporation otherwise failing to qualify as a REIT.

(iv) No Person shall Transfer any Shares if, as a result of the Transfer, the Shares would be Beneficially Owned by fewer than 100 Persons (determined without reference to the rules of attribution under the Code). Subject to Section 10.4 and notwithstanding any other provisions contained herein, any Transfer of Shares (whether or not such Transfer is the result of a transaction entered into through the facilities of the NYSE or any other national securities exchange or automated inter-dealer quotation system) that, if effective, would result in Shares being Beneficially Owned by fewer than 100 Persons (determined under the principles of Section 856(a)(5) of the Code) shall be void ab initio , and the intended transferee shall acquire no rights in such Shares.

(b) Transfer in Trust .

(i) If any Transfer of Shares (whether or not such Transfer is the result of a transaction entered into through the facilities of the NYSE or any other national securities exchange or automated inter-dealer quotation system) or Non-Transfer Event occurs which, if effective, would result in any Person Beneficially Owning or Constructively Owning Shares in violation of Section 10.2(a)(i), (ii), or (iii), then that number of Shares the Beneficial Ownership or Constructive Ownership of which otherwise would cause

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such Person to violate Section 10.2(a)(i), (ii), or (iii) (rounded up to the nearest whole Share) shall be automatically transferred to a Charitable Trust for the benefit of a Charitable Beneficiary, as described in Section 10.3, effective as of the close of business on the Business Day prior to the date of such Transfer or Non-Transfer Event, and such Person shall acquire no rights in such Shares.

(ii) If the transfer to the Charitable Trust described in clause (i) of this subparagraph would not be effective for any reason to prevent the violation of Section 10.2(a)(i), (ii) or (iii), or would not prevent the Corporation from failing to qualify as a REIT, then the Transfer of that number of Shares that otherwise would cause any Person to violate Section 10.2(a)(i), (ii) or (iii) shall be void ab initio , and the intended transferee shall acquire no rights in such Shares.

(iii) In determining which Shares are to be transferred to a Charitable Trust in accordance with this Section 10.2.(b) and Section 10.3 hereof, Shares shall be so transferred to a Charitable Trust in such manner as minimizes the aggregate value of the Shares that are transferred to the Charitable Trust (except as provided in Section 10.2.(g)) and, to the extent not inconsistent therewith, on a pro rata basis.

(iv) To the extent that, upon a transfer of Shares pursuant to this Section 10.2.(b), a violation of any provision of Section 10.2.(a) would nonetheless be continuing (as, for example, where the ownership of Shares by a single Charitable Trust would result in the Shares being Beneficially Owned (determined under the principles of Section 856(a)(5) of the Code) by fewer than 100 persons), then Shares shall be transferred to that number of Charitable Trusts, each having a Charitable Trustee and a Charitable Beneficiary or Charitable Beneficiaries that are distinct from those of each other Charitable Trust, such that there is no violation of any provision of Section 10.2.(a) hereof.

(c) Remedies for Breach . If the Board of Directors or any duly authorized committee thereof shall at any time determine in good faith that a Transfer or Non-Transfer Event has taken place that results in a violation of Section 10.2(a) or that a Person intends to acquire or has attempted to acquire Beneficial Ownership or Constructive Ownership of any Shares in violation of Section 10.2(a) (whether or not such violation is intended), the Board of Directors or a committee thereof shall take such action as it deems advisable to refuse to give effect to or to prevent such Transfer or Non-Transfer Event, including, without limitation, causing the Corporation to redeem Shares, refusing to give effect to such Transfer or Non-Transfer Event on the books of the Corporation or instituting proceedings to enjoin such Transfer or Non-Transfer Event; provided, however, that any Transfer or attempted Transfer or Non-Transfer Event in violation of Section 10.2(a) shall automatically result in the Transfer to the Charitable Trust described above, and, where applicable, such Transfer (or other event) shall be void ab initio as provided above irrespective of any action (or non-action) by the Board of Directors or a committee thereof.

(d) Notice of Restricted Transfer . Any Person who acquires or attempts or intends to acquire Beneficial Ownership or Constructive Ownership of Shares that will or may violate Section 10.2.(a), or any Person who would have owned Shares that resulted in a transfer to the

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Charitable Trust pursuant to the provisions of Section 10.2.(b), shall immediately give written notice to the Corporation of such event or, in the case of such a proposed or attempted transaction, shall give at least fifteen (15) days prior written notice, and shall provide to the Corporation such other information as the Corporation may request in order to determine the effect, if any, of such acquisition or ownership on the Corporation’s status as a REIT.

(e) Holders Required To Provide Information .

(i) Every holder of more than five percent (5%) (or such lower percentage as required by the Code or the Treasury Regulations promulgated thereunder) of the outstanding Shares, within thirty (30) days after the end of each taxable year, shall give written notice to the Corporation stating the name and address of such owner, the number of Shares Beneficially Owned and a description of the manner in which such Shares are held; provided, that a holder of record who holds outstanding Shares as nominee for another Person, which other Person is required to include in gross income the dividends or distributions received on such Shares (an “Actual Owner”), shall give written notice to the Corporation stating the name and address of such Actual Owner and the number of Shares of such Actual Owner with respect to which the holder of record is nominee. Each holder shall provide to the Corporation such additional information as the Corporation may request in order to determine the effect, if any, of such Beneficial Ownership on the Corporation’s status as a REIT and to ensure compliance with the Common Share Ownership Limit or the Preferred Share Ownership Limit.

(ii) Each Person who is a Beneficial Owner or Constructive Owner of Shares and each Person (including the holder of record) who is holding Shares for a Beneficial Owner or Constructive Owner shall provide to the Corporation such information as the Corporation may request, in good faith, in order to determine the Corporation’s status as a REIT and to comply with requirements of any taxing authority or governmental authority or to determine such compliance and to ensure compliance with the Common Share Ownership Limit and the Preferred Share Ownership Limit.

(f) Remedies Not Limited . Subject to 10.4 of these Articles, nothing contained in this Section 10.2 shall limit the authority of the Board of Directors to take such other action as it deems necessary or advisable to protect the Corporation and the interests of its holders in preserving the Corporation’s status as a REIT.

(g) Ambiguity . In the case of an ambiguity in the application of any of the provisions of this Section 10.2, Section 10.3 or any definition contained in Section 10.1, the Board of Directors shall have the power to determine the application of the provisions of this Section 10.2 or Section 10.3 with respect to any situation based on the facts known to it. If Section 10.2 or 10.3 requires an action by the Board of Directors and these Articles fail to provide specific guidance with respect to such action, the Board of Directors shall have the power to determine the action to be taken so long as such action is not contrary to the provisions of Sections 10.1, 10.2 or 10.3.

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(h) Exemptions .

(i) Subject to Section 10.2.(a)(iii), the Board of Directors may exempt, prospectively or retroactively, a Person from the Common Share Ownership Limit or the Preferred Share Ownership Limit for purposes of the application of Section 10.2.(a)(i) or (ii), as applicable, if:

(1) the Board of Directors determines, in its sole discretion, based on representations and undertakings provided by such Person to the Board of Directors and/or other information submitted by such Person to the Board of Directors, that such Person is not an individual for purposes of Section 542(a)(2) of the Code (determined taking into account Section 856(h)(3)(A) of the Code);

(2) such Person submits to the Board of Directors information satisfactory to the Board of Directors, in its reasonable discretion, demonstrating that no Person who is an individual for purposes of Section 542(a)(2) of the Code (determined taking into account Section 856(h)(3)(A) of the Code) would be considered to Beneficially Own Common Shares in excess of the Common Share Ownership Limit or, Preferred Shares in excess of the Preferred Share Ownership Limit by reason of such Person’s ownership of Common Shares in excess of the Common Share Ownership Limit or Preferred Shares in excess of the Preferred Share Ownership Limit pursuant to the exemption granted under this subparagraph (h)(i);

(3) such Person submits to the Board of Directors information satisfactory to the Board of Directors, in its reasonable discretion, demonstrating that clauses (2) and (3) of subparagraph (a)(iii) of this Section 10.2. will not be violated by reason of such Person’s ownership of Common Shares in excess of the Common Share Ownership Limit or Preferred Shares in excess of the Preferred Share Ownership Limit pursuant to the exemption granted under this subparagraph (h)(i); and

(4) such Person provides to the Board of Directors such representations and undertakings, if any, as the Board of Directors may, in its reasonable discretion, require to ensure that the conditions in clauses (1), (2) and (3) hereof are satisfied and will continue to be satisfied throughout the period during which such Person owns Common Shares in excess of the Common Share Ownership Limit or Preferred Shares in excess of the Preferred Share Ownership Limit pursuant to any exemption thereto granted under this subparagraph (h), and such Person agrees that any violation of such representations and undertakings or any attempted violation thereof will result in the application of the remedies set forth in this Section 10.2 (including, without limitation, Section 10.2.(f) with respect to Common Shares in excess of the Common Share Ownership Limit or Preferred Shares in excess of the Preferred Share Ownership Limit with respect to

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such Person (determined without regard to the exemption granted such Person under this subparagraph (h)(i).

(ii) Prior to granting any exemption pursuant to subparagraph (h)(i), the Board of Directors, in its sole and absolute discretion, may require a ruling from the Internal Revenue Service or an opinion of counsel, in either case in form and substance satisfactory to the Board of Directors, in its sole and absolute discretion as it may deem necessary or advisable in order to determine or ensure the Corporation’s status as a REIT; provided, however, that the Board of Directors shall not be obligated to require obtaining a favorable ruling or opinion in order to grant an exception hereunder. In addition, notwithstanding the receipt of any ruling or opinion, the Board of Directors may impose such conditions or restrictions as it deems appropriate in connection with granting such exception.

(iii) Subject to Section 10.2.(a)(iii), an underwriter that participates in a public offering or a private placement of Shares (or securities convertible into or exchangeable for Shares, if any) may Beneficially Own or Constructively Own Shares (or securities convertible into or exchangeable for Shares) in excess of the Common Share Ownership Limit or the Preferred Share Ownership Limit, but only to the extent necessary to facilitate such public offering or private placement.

(i) Increase in Common Share Ownership Limit or the Preferred Share Ownership Limit .

(i) Subject to the limitations provided in Section 10.2.(a)(iii) and this Section 10.2.(i), the Board of Directors may, in its sole and absolute discretion, from time to time increase the Common Share Ownership Limit or the Preferred Share Ownership Limit for any one or more Persons; provided, however, that:

(1) The Common Share Ownership Limit or the Preferred Share Ownership Limit may not be increased if, after giving effect to such change, either (x) five Persons who are considered individuals pursuant to Section 542 of the Code, as modified by Section 856(h)(3) of the Code, could Beneficially Own, in the aggregate, more than 49.9% of the value of the outstanding Shares (determined taking into account any reduction in the Common Share Ownership Limit or the Preferred Share Ownership Limit for other Persons being made contemporaneously pursuant to Section 10.2.(j)), or (y) either clause (2) or clause (3) of subparagraph (a)(iii) of Section 10.2.could be violated by any Person for whom the Common Share Ownership Limit or the Preferred Share Ownership Limit is increased by reason of such Person’s ownership of Common Shares in accordance with the increased Common Share Ownership Limit or ownership of Preferred Shares in accordance with the increased Preferred Share Ownership Limit.

(2) Prior to the modification of the Common Share Ownership Limit or the Preferred Share Ownership Limit pursuant to this Section 10.2.(i), the Board of Directors, in its sole and absolute discretion, may require such opinions

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of counsel, affidavits, undertakings or agreements as it may deem necessary or advisable in order to determine or ensure the Corporation’s status as a REIT if the modification of the Common Share Ownership Limit or the Preferred Share Ownership Limit were to be made.

(j) Decrease in Common Share Ownership Limit or the Preferred Share Ownership Limit . The Board of Directors may from time to time decrease the Common Share Ownership Limit or the Preferred Share Ownership Limit for some or all Persons (including in connection with an increase of the Common Share Ownership Limit or the Preferred Share Ownership Limit pursuant to Section 10.2.(i) for some Persons); provided, however, that any such decreased Ownership Limit will not be effective for any Person whose percentage ownership in Common Shares or Preferred Shares, as the case may be, is in excess of the decreased Ownership Limit until such time as such Person’s percentage ownership of Common Shares or Preferred Shares, as the case may be, equals or falls below the decreased Ownership Limit, but any further acquisition of Common Shares or Preferred Shares, as the case may be, in excess of such percentage ownership of Common Shares or Preferred Shares, as the case may be, as decreased, will be in violation of the Ownership Limits.

(k) Legend . Each certificate for Shares shall bear substantially the following legend:

The Shares represented by this certificate are subject to restrictions on Beneficial Ownership, Constructive Ownership and Transfer. Subject to certain further restrictions and except as expressly provided in the Corporation’s Articles of Incorporation, (i) no Person may Beneficially Own or Constructively Own Common Shares of the Corporation in excess of 9.8% (in value or number of Shares, whichever is more restrictive) of the outstanding Common Shares of the Corporation; (ii) no Person may Beneficially Own or Constructively Own Preferred Shares of the Corporation in excess of 9.8% (in value or number of Shares, whichever is more restrictive) of the total outstanding Preferred Shares of the Corporation of such class or series; (iii) no Person may Beneficially Own or Constructively Own Shares of the Corporation that would result in the Corporation being “closely held” under Section 856(h) of the Code or otherwise cause the Corporation to fail to qualify as a REIT; (iv) no Person may Beneficially Own or Constructively Own Shares of the Corporation that would result in (a) the Corporation owning (directly or indirectly) an interest in a tenant that is described in Section 856(d)(2)(B) of the Code if the income derived by the Corporation (either directly or indirectly through one or more partnerships or limited liability companies) from such tenant for the taxable year of the Corporation during which such determination is being made would reasonably be expected to equal or exceed the lesser of (I) one percent (1%) of the Corporation’s gross income (as determined for purposes of Section 856(c) of the Code), or (II) an amount that would cause the Corporation to fail to satisfy any of the gross income requirements of Section 856(c) of the Code or (b) any manager or operator of a “qualified lodging facility,” within the meaning of Section 856(d)(9)(D) of the Code, leased by the Corporation (or any subsidiary of the Corporation) to one of its taxable REIT subsidiaries with respect to the Corporation failing to qualify as an “eligible independent contractor,” within the

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meaning of Section 856(d)(9)(A) of the Code, in either case if the income derived by the Corporation from such tenant or such taxable REIT subsidiary, taking into account any other income of the Corporation that would not qualify under the gross income requirements of Section 856(c) of the Code, would cause the Corporation to fail to satisfy any of such gross income requirements; and (v) no Person may Transfer Shares of the Corporation if such Transfer would result in Shares of the Corporation being owned by fewer than 100 Persons (as determined under the principles of Section 856(a)(5) of the Code). Any Person who Beneficially Owns or Constructively Owns, Transfers or attempts to Beneficially Own or Constructively Own Shares of the Corporation which causes or will cause a Person to Beneficially Own or Constructively Own Shares of the Corporation in excess or in violation of the above limitations must immediately notify the Corporation. If certain of the restrictions on Transfer or ownership above are violated, the Shares of the Corporation represented hereby will be automatically Transferred to a Charitable Trustee of a Charitable Trust for the benefit of one or more Charitable Beneficiaries. In addition, the Corporation may take other actions, including redeeming Shares upon the terms and conditions specified by the Board of Directors in its sole and absolute discretion if the Board of Directors determines that ownership or a Transfer or other event may violate the restrictions described above. Furthermore, upon the occurrence of certain events, attempted Transfers in violation of the restrictions described above may be void ab initio . A Person who attempts to Beneficially Own or Constructively Own Shares in violation of the ownership limitations described above shall have no claim, cause of action or any recourse whatsoever against a transferor of such Shares. All capitalized terms in this legend have the meanings defined in the Articles of Incorporation of the Corporation, as the same may be amended from time to time, a copy of which, including the restrictions on Transfer and ownership, will be furnished to each holder of Shares of the Corporation on request and without charge. Requests for such a copy may be directed to the Secretary of the Corporation.

Instead of the foregoing legend, the certificate may state that the Corporation will furnish a full statement about certain restrictions on transferability to a holder on request and without charge.

10.3 Transfer of Shares in Trust .

(a) Ownership in Trust . Upon any purported Transfer or other event described in Section 10.2.(b) that would result in a transfer of Shares to a Charitable Trust, such Shares shall be deemed to have been transferred to the Charitable Trustee as trustee of a Charitable Trust for the exclusive benefit of one or more Charitable Beneficiaries. Such transfer to the Charitable Trustee shall be deemed to be effective as of the close of business on the Business Day prior to the purported Transfer or other event that results in the Transfer to the Charitable Trust pursuant to Section 10.2.(b). The Charitable Trustee shall be appointed by the Corporation and shall be a Person unaffiliated with the Corporation and any Prohibited Owner. Each Charitable Beneficiary shall be designated by the Corporation as provided in Section 10.3.(g).

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(b) Status of Shares Held by the Charitable Trustee . Shares held by the Charitable Trustee shall be issued and outstanding Shares of the Corporation. The Prohibited Owner shall have no rights in the Shares held by the Charitable Trustee. The Prohibited Owner shall not benefit economically from ownership of any Shares held in trust by the Charitable Trustee, shall have no rights to dividends or other distributions and shall not possess any rights to vote or other rights attributable to the Shares held in the Charitable Trust. The Prohibited Owner shall have no claim, cause of action, or any other recourse whatsoever against the purported transferor of such Shares.

(c) Dividend and Voting Rights . The Charitable Trustee shall have all voting rights and rights to dividends or other distributions with respect to Shares held in the Charitable Trust, which rights shall be exercised for the exclusive benefit of the Charitable Beneficiary. Any dividend or other distribution paid prior to the discovery by the Corporation that Shares have been transferred to the Charitable Trustee shall be paid with respect to such Shares to the Charitable Trustee by the Prohibited Owner upon demand and any dividend or other distribution authorized but unpaid shall be paid when due to the Charitable Trustee. Any dividends or distributions so paid over to the Charitable Trustee shall be held in trust for the Charitable Beneficiary. The Prohibited Owner shall have no voting rights with respect to Shares held in the Charitable Trust and, subject to Virginia law, effective as of the date that Shares have been transferred to the Charitable Trustee, the Charitable Trustee shall have the authority (at the Charitable Trustee’s sole discretion) (i) to rescind as void any vote cast by a Prohibited Owner prior to the discovery by the Corporation that Shares have been transferred to the Charitable Trustee and (ii) to recast such vote in accordance with the desires of the Charitable Trustee acting for the benefit of the Charitable Beneficiary; provided, however, that if the Corporation has already taken irreversible action, then the Charitable Trustee shall not have the authority to rescind and recast such vote. Notwithstanding the provisions of this Article X, until the Corporation has received notification that Shares have been transferred into a Charitable Trust, the Corporation shall be entitled to rely on its share transfer and other holder records for purposes of preparing lists of holders entitled to vote at meetings, determining the validity and authority of proxies and otherwise conducting votes of holders.

(d) Rights Upon Liquidation . Upon any voluntary or involuntary liquidation, dissolution or winding up of or any distribution of the assets of the Corporation, the Charitable Trustee shall be entitled to receive, ratably with each other holder of Shares of the class or series of Shares that is held in the Charitable Trust, that portion of the assets of the Corporation available for distribution to the holders of such class or series (determined based upon the ratio that the number of Shares of such class or series of Shares held by the Charitable Trustee bears to the total number of Shares of such class or series of Shares then outstanding). The Charitable Trustee shall distribute any such assets received in respect of the Shares held in the Charitable Trust in any liquidation, dissolution or winding up of, or distribution of the assets of the Corporation, in accordance with Section 10.3.(e).

(e) Sale of Shares by Charitable Trustee . Within twenty (20) days of receiving notice from the Corporation that Shares have been transferred to the Charitable Trust, the Charitable Trustee shall sell the Shares held in the Charitable Trust to a person, designated by the Charitable Trustee, whose ownership of the Shares will not violate the ownership limitations set forth in Section 10.2.(a). In connection with any such sale, the Charitable Trustee shall use good faith

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efforts to sell such Shares at a fair market price. Upon such sale, the interest of the Charitable Beneficiary in the Shares sold shall terminate and the Charitable Trustee shall distribute the net proceeds of the sale to the Prohibited Owner and to the Charitable Beneficiary as provided in this Section 10.3.(e). The Prohibited Owner shall receive the lesser of (1) the price paid by the Prohibited Owner for the Shares or, if the Prohibited Owner did not give value for the Shares in connection with the event causing the Shares to be held in the Charitable Trust (e.g., in the case of a gift, devise or other such transaction), the Market Price of the Shares on the day of the event causing the Shares to be held in the Charitable Trust and (2) the price per share received by the Charitable Trustee (net of any commissions and other expenses of sale) from the sale or other disposition of the Shares held in the Charitable Trust. The Charitable Trustee may reduce the amount payable to the Prohibited Owner by the amount of dividends and distributions which have been paid to the Prohibited Owner and are owed by the Prohibited Owner to the Charitable Trustee pursuant to Section 10.3.(c) of this Article X. Any net sales proceeds in excess of the amount payable to the Prohibited Owner shall be immediately paid to the Charitable Beneficiary. If, prior to the discovery by the Corporation that Shares have been transferred to the Charitable Trustee, such Shares are sold by a Prohibited Owner, then (i) such Shares shall be deemed to have been sold on behalf of the Charitable Trust and (ii) to the extent that the Prohibited Owner received an amount for such Shares that exceeds the amount that such Prohibited Owner was entitled to receive pursuant to this Section 10.3.(e), such excess shall be paid to the Charitable Trustee by the Prohibited Owner upon demand. The Charitable Trustee shall have the right and power (but not the obligation) to offer any Shares held in trust for sale to the Corporation on such terms and conditions as the Charitable Trustee shall deem appropriate.

(f) Purchase Right in Shares Transferred to the Charitable Trustee . Shares transferred to the Charitable Trustee shall be deemed to have been offered for sale to the Corporation, or its designee, at a price per share equal to the lesser of (i) the price per share in the transaction that resulted in such transfer to the Charitable Trust (or, in the case of a devise or gift, the Market Price at the time of such devise or gift) and (ii) the Market Price on the date the Corporation, or its designee, accepts such offer. If the Corporation, or its designee, accepts such offer, the Corporation may reduce the amount payable to the Prohibited Owner by the amount of dividends and distributions which have been paid to the Prohibited Owner and are owed by the Prohibited Owner to the Charitable Trustee pursuant to Section 10.3.(c) of this Article X and, if the Corporation, or its designee, elects to do so, the Corporation shall pay the amount of such reduction to the Charitable Trustee for the benefit of the Charitable Beneficiary. The Corporation shall have the right to accept such offer until the Charitable Trustee has sold the Shares held in the Charitable Trust pursuant to Section 10.3.(e). Upon such a sale to the Corporation, the interest of the Charitable Beneficiary in the Shares sold shall terminate and the Charitable Trustee shall distribute the net proceeds of the sale to the Prohibited Owner and any dividends or other distributions held by the Charitable Trustee will be paid to the Charitable Beneficiary, each as provided in Section 10.3.(e).

(g) Designation of Charitable Beneficiaries . By written notice to the Charitable Trustee, the Corporation shall designate one or more nonprofit organizations to be the Charitable Beneficiary of the interest in the Charitable Trust such that (i) Shares held in the Charitable Trust would not violate the restrictions set forth in Section 10.2.(a) in the hands of such Charitable Beneficiary and (ii) each such organization must be described in Sections 501(c)(3), 170(b)(1)(A) or 170(c)(2) of the Code.

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10.4 NYSE Transactions . Nothing in this Article X shall preclude the settlement of any transaction entered into through the facilities of the NYSE or any other national securities exchange or automated inter-dealer quotation system. The fact that the settlement of any transaction takes place shall not negate the effect of any other provision of this Article X and any transferee in such a transaction shall be subject to all of the provisions and limitations set forth in this Article X.

10.5 Enforcement . The Corporation is specifically authorized to seek equitable relief, including injunctive relief, to enforce the provisions of this Article X.

10.6 Non-Waiver . No delay or failure on the part of the Corporation or the Board of Directors in exercising any right hereunder shall operate as a waiver of any right of the Corporation or the Board of Directors, as the case may be, except to the extent specifically waived in writing.

3. The amendments were adopted on [DATE].

4. The amendments were proposed by the Board of Directors and submitted to the shareholders of the Corporation entitled to vote thereon in accordance with the Virginia Stock Corporation Act at a special meeting of shareholders held [DATE]. There were no voting groups, including without limitation the Corporation’s Series A Preferred Shares, no par value, and Series B Convertible Preferred Shares, no par value, entitled to vote separately on the amendments. The designation, number of outstanding shares, the number of votes entitled to be cast and the undisputed votes cast FOR the amendments are set forth below.

Designation	Shares Outstanding	Votes Entitled to be Cast	Undisputed Votes Cast FOR
Common Shares	[ Number of Shares ]	[ Number of Shares ]	[ Number of Shares ]

5. The number of votes cast FOR the amendments by outstanding shares entitled to vote thereon was sufficient for approval of the amendments.

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IN WITNESS WHEREOF, the Corporation has caused these Articles of Amendment to be signed by its [Secretary], on [DATE].

APPLE REIT NINE, INC.

By:

Name:

Title: [Secretary]

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Exhibit 99.2

ARTICLES OF AMENDMENT OF

ARTICLES OF INCORPORATION

APPLE REIT NINE, INC.

1. The name of the Corporation is Apple REIT Nine, Inc. (the “Corporation”).

2. The Articles of Incorporation of the Corporation (the “Articles”) are hereby amended by inserting the following Article IVA immediately before Article V:

ARTICLE IVA

RECLASSIFICATION OF COMMON SHARES UPON LISTING

Immediately prior to, but subject to the effectiveness of, the initial listing of Common Shares on a national securities exchange (the “Listing”), all Common Shares issued and outstanding immediately prior to the date of the Listing (the “Listing Date”) shall be reclassified into a smaller number of such shares on the Listing Date in accordance with the following provisions of this Article IVA:

4.1A Reclassification to Reduce Outstanding Common Shares . Each Common Share issued and outstanding immediately prior to the Listing Date shall, on the Listing Date, automatically and without any action on the part of the holder thereof, be reclassified into one-half (½) of such Common Share. Such reclassified Common Shares shall have the same respective voting rights, preferences and relative, participating, optional or other rights, and qualifications, limitations or restrictions set forth in these Articles of Incorporation immediately prior to the Listing Date with respect to Common Shares issued and outstanding immediately prior to the Listing Date. Such reclassified Common Shares shall be issued in fractions of one-thousandth of a share (rounded to integral multiples thereof). For the avoidance of doubt, the reclassification of Common Shares under this Section 4.1A shall not affect the total number of Common Shares the Corporation is authorized to issue under Section 3.1 of these Articles of Incorporation.

4.2A Surrender of Certificates . From and after the Listing Date, a holder of Common Shares in certificated form that were issued and outstanding immediately prior to the Listing Date shall not be entitled to receive distributions or to vote or to exercise any other rights as a shareholder until the holder’s certificate(s) representing such Common Shares are surrendered in exchange for one or more certificates representing the new number of Common Shares into which such Common Shares were reclassified. Upon such surrender, all distributions not paid because of this provision shall be paid without interest.

3. The amendment was adopted on [DATE].

4. The amendment was proposed by the Board of Directors and submitted to the shareholders of the Corporation entitled to vote thereon in accordance with the Virginia Stock Corporation Act at a special meeting of shareholders held [DATE]. There were no voting groups,

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including without limitation the Corporation’s Series A Preferred Shares, no par value, and Series B Convertible Preferred Shares, no par value, entitled to vote separately on the amendment. The designation, number of outstanding shares, the number of votes entitled to be cast and the undisputed votes cast FOR the amendment are set forth below.

Designation	Shares Outstanding	Votes Entitled to be Cast	Undisputed Votes Cast FOR
Common Shares	[ Number of Shares ]	[ Number of Shares ]	[ Number of Shares ]

5. The number of votes cast FOR the amendment by outstanding shares entitled to vote thereon was sufficient for approval of the amendment.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Corporation has caused these Articles of Amendment to be signed by its [Secretary], on [DATE].

APPLE REIT NINE, INC.

By:

Name:

Title: [Secretary]

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Exhibit 99.3

AMENDMENT NO. 1

TO THE BYLAWS OF

APPLE REIT NINE, INC.

The Bylaws (the “Bylaws”) of Apple REIT Nine, Inc. (the “Company”) are hereby amended as follows:

1. The first sentence of Section 1.1 of the Company’s Bylaws is hereby deleted and the following inserted in lieu thereof:

“The name of the corporation is Apple Hospitality REIT, Inc. and is referred to in these Bylaws as the “ Company .” ”

2. Clause (d) defining “Advisor” of Section 1.3 of the Company’s Bylaws is hereby amended to insert the following at the end thereof:

“At any time the Company has no Advisor, all provisions in these Bylaws that otherwise purport to confer rights or benefits on the Advisor, or that otherwise purport to impose obligations or liabilities on the Advisor, or that otherwise assume the existence of a Company Advisor shall have no force and effect and these Bylaws shall be construed and applied as if any and all such provisions were not contained in these Bylaws.”

3. Article VII of the Company’s Bylaws is amended by adding the following Section 7.9 at the end thereof.

“7.9 Applicability of Certain Sections of Article VII . Sections 7.2, 7.3, 7.4 and 7.5 of the Company’s Bylaws shall apply only to Shares (as defined in Section 7.5(g) of these Bylaws) as to which the provisions of Article X of the Articles of Incorporation do not apply because the provisions of Article X of the Articles of Incorporation do not meet the requirements of Section 13.1-649 of the Virginia Stock Corporation Act as to such Shares.”

4. Article VIII of the Company’s Bylaws is hereby deleted in its entirety, and the following is inserted in lieu thereof.

“ARTICLE VIII

[RESERVED]”

5. Section 12.2 of the Company’s Bylaws is hereby deleted in its entirety, and the following is inserted in lieu thereof:

“12.2 Amendments (After Listing) . Notwithstanding anything to the contrary in these Bylaws (including Section 12.1), immediately prior to, but subject to the effectiveness of, the listing of the Common Shares, including any class thereof, of the Company on a national securities exchange, Section 12.1 of these Bylaws shall cease to be effective, and from and after that time, the Bylaws of the Corporation may be amended or repealed, or new bylaws adopted, at any time, and from time to time, (i) by the Board of Directors or (ii) upon the vote of the holders

of a majority of the issued and outstanding Common Shares of the Corporation, and the shareholders in amending, repealing or adopting a bylaw may, except as prohibited by applicable law, expressly provide that the Board of Directors may not amend, repeal or reinstate that bylaw.”

****

Capitalized terms not defined herein shall have the meaning set forth in the Company’s Bylaws.

This Amendment No. 1 to the Bylaws shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia without regard to the principles thereof relating to conflicts of law or choice of law.

Exhibit 99.4

VOTING AGREEMENT

THIS VOTING AGREEMENT (this “Agreement”) is entered into as of August 7, 2013 by and among Apple REIT Seven, Inc., a Virginia corporation (“Apple Seven”), Apple REIT Eight, Inc., a Virginia corporation (“Apple Eight”), and Apple REIT Nine, Inc., a Virginia corporation (“Apple Nine,” and collectively with Apple Seven and Apple Eight, the “Apple REITs” or individually, an “Apple REIT”), and Glade M. Knight (a “Company Securityholder”).

WHEREAS, the Apple REITs are entering into an Agreement and Plan of Merger, dated as of the date hereof (the “Merger Agreement”), pursuant to which Seven Acquisition Sub, a wholly owned subsidiary of Apple Nine, will merge with and into Apple Seven (the “Apple Seven Merger”) and Eight Acquisition Sub, a wholly owned subsidiary of Apple Nine, will merge with and into Apple Eight (the “Apple Eight Merger,” and together with the Apple Eight Merger, the “Mergers,” or individually a “Merger”), with Apple Seven and Apple Eight as the Surviving Corporations in the Mergers (all capitalized terms used but not defined herein shall have the meanings set forth in the Merger Agreement);

WHEREAS, as the date hereof, the Company Securityholder is the beneficial and record owner of, and has the sole or shared right to vote and dispose of, all the issued and outstanding Series B Convertible Preferred Shares, no par value, of Apple Seven (the “Apple Seven Series B Convertible Preferred Shares”), Series B Convertible Preferred Shares, no par value, of Apple Eight (the “Apple Eight Series B Convertible Shares”), and Series B Convertible Preferred Shares, no par value, of Apple Nine (the “Apple Nine Series B Convertible Shares,” and together with the Apple Seven Series B Convertible Shares and the Apple Eight Series B Convertible Shares the “Series B Convertible Shares”), in each case as more particularly described on Schedule 1 hereto; and

WHEREAS, as a condition to its willingness to enter into the Merger Agreement, each of the Apple REITs has required that the Company Securityholder agree, and the Company Securityholder is willing to agree, to the matters set forth herein.

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree, intending to be legally bound hereby, as follows:

SECTION 1. Disposition of Series B Shares

During the period from the date hereof through the earlier of (i) the date on which each Merger is consummated or (ii) the date on which the Merger Agreement is terminated according to its terms (such period hereinafter referred to as the “Term”), the Company Securityholder shall not, directly or indirectly, (a) sell, sell short, transfer (including by gift), pledge, encumber, assign or otherwise dispose of, or enter into any contract, option or other agreement or understanding with respect to the sale, transfer, pledge, encumbrance, assignment or other disposition of, any Series B Convertible Shares or any other Shares, Apple Nine Shares or Apple Nine Units that the Company Securityholder may beneficially own during the Term (collectively with the Series B Convertible Shares, the “Subject Shares”), (b) grant any proxies or

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powers of attorney for any Subject Shares with respect to any matters described in paragraphs (a) and (b) of Section 2 hereof (other than a proxy directing the holder thereof to vote the Subject Shares in a manner required by paragraphs (a) and (b) of Section 2 hereof), (c) deposit any Subject Shares into a voting trust or enter into a voting agreement or other arrangement with respect to any Subject Shares with respect to any of the matters described in paragraphs (a) and (b) of Section 2 hereof, or tender any Subject Shares in a transaction other than a transaction contemplated by the Merger Agreement, or (d) take any action which is intended to have the effect of preventing or disabling the Company Securityholder from performing his obligations under this Agreement; provided , however , that nothing herein shall prevent (i) the sale, transfer, pledge, encumbrance, assignment or other disposition of any of such Subject Shares, provided that the purchaser, transferee, pledgee or assignee thereof agrees in writing with the Apple REITs, prior to such sale, transfer, pledge, encumbrance, assignment or other disposition, to be bound by the terms of this Agreement or (ii) the assignment of certain benefits by the Company Securityholder pursuant to agreements entered into before the date hereof with respect to Series B Convertible Shares as to which the Company Securityholder is not the sole beneficial owner.

SECTION 2. Voting

During the Term, the Company Securityholder shall:

(a) be present, in person or represented by proxy, at each meeting (whether annual or special and whether or not an adjourned or postponed meeting) of the shareholders of any Apple REIT, however called, so that all of such Company Securityholder’s Subject Shares may be counted for purposes of determining the presence of a quorum at each such Apple REIT shareholders’ meeting; and

(b) cast or cause to be cast all votes attributable to the Subject Shares at any annual or special meeting of shareholders of any Apple REIT, including any adjournments or postponements thereof, or in connection with any written consent or other vote of the shareholders of an Apple REIT, in favor of (i) approval and adoption of the Merger Agreement (including any amendments or modifications of the terms of the Merger Agreement approved by the boards of directors of each Apple REIT, upon the recommendation of its Special Committee, that would not materially adversely affect the Company Securityholder in his capacity as beneficial owner of the Subject Shares), the related Plan(s) of Merger, approval of the Mergers, each of the other actions contemplated in the Merger Agreement and the other transactions contemplated by the Merger Agreement and any actions required in furtherance thereof, including the Apple Nine Articles Amendment and Apple Nine Bylaws Amendment, (ii) approval and adoption of any proposal to adjourn or postpone such Apple REIT shareholders’ meeting to a later date if there are not sufficient votes for approval and adoption of the Merger Agreement, the related Plan(s) of Merger or any of the other actions contemplated in the Merger Agreement including the Apple Nine Articles Amendment and Apple Nine Bylaws Amendment, on the date on which the Apple REIT shareholders’ meetings are held and (iii) at each such meeting, and at any adjournment or postponement thereof, vote against: (A) any action or agreement that would reasonably be expected to frustrate the purposes of, impede, hinder,

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interfere with, or prevent or delay the consummation of the transactions contemplated by the Merger Agreement and (B) any Acquisition Proposal (other than the Mergers) and any action required in furtherance thereof.

(c) The Company Securityholder will retain the right to vote his Subject Shares, in his sole discretion, on all matters other than those described in paragraphs (a) and (b) of this Section 2, and the Company Securityholder may grant proxies and enter into voting agreements or voting trusts for his Subject Shares in respect of such other matters, in each case so long as such other arrangements do not interfere with or prevent the Company Securityholder from complying with its obligations under this Agreement.

(d) The Company Securityholder constitutes and appoints each Apple REIT, from and after the date hereof until the earlier to occur of the Effective Time and the termination of this Agreement pursuant to Section 17 (at which point such constitution and appointment shall automatically be revoked), as such Company Securityholder’s attorney, agent and proxy (each such constitution and appointment, an “Irrevocable Proxy”), with full power of substitution, to vote and otherwise act with respect to all of the Subject Shares of such Apple REIT at any annual, special or other meeting of the shareholders of such Apple REIT, and at any adjournment or adjournments or postponement thereof, and in any action by written consent of the shareholders of such Apple REIT, on the matters and in the manner specified in Section 2(b); provided, however, the foregoing shall only be effective if the Company Securityholder fails to be counted as present and to vote all of the Subject Shares of each such Apple REIT in accordance with paragraphs (a) and (b) of this Section 2. EACH SUCH PROXY AND POWER OF ATTORNEY IS IRREVOCABLE AND COUPLED WITH AN INTEREST AND, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, SHALL BE VALID AND BINDING ON ANY PERSON TO WHOM THE COMPANY SECURITYHOLDER MAY TRANSFER ANY OF HIS SUBJECT SHARES IN BREACH OF THIS AGREEMENT. The Company Securityholder hereby revokes all other proxies and powers of attorney with respect to any or all of the Subject Shares that may have heretofore been appointed or granted with respect to the matters covered by Section 2(b), and no subsequent proxy or power of attorney shall be given (and if given, shall not be effective) by the Company Securityholder with respect thereto on the matters covered by Section 2(b). All authority herein conferred or agreed to be conferred by the Company Securityholder shall survive the death or incapacity of the Company Securityholder and any obligation of the Company Securityholder under this Agreement shall be binding upon the heirs, personal representatives, successors and assigns of the Company Securityholder. It is agreed that no Apple REIT will use the Irrevocable Proxy granted by the Company Securityholder unless the Company Securityholder fails to comply with Section 2(a) or (b) and that, to the extent an Apple REIT uses any such Irrevocable Proxy, it will only vote the Subject Shares subject to such Irrevocable Proxy with respect to the matters specified in, and in accordance with the provisions of, Section 2(b).

SECTION 3. Conversion

The Company Securityholder agrees to convert each Apple Nine Series B Convertible Share held by Company Securityholder into 24.17104 common shares, no par value, of

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Apple Nine (the “Apple Nine Common Shares”) effective immediately before the Effective Time, pursuant to Section 5.2(e) of the Articles of Incorporation of Apple Nine.

SECTION 4. Waiver of Appraisal Rights

The Company Securityholder hereby waives any rights of appraisal or rights to dissent from the Mergers, and agrees to prevent the execution of, any rights of appraisal and dissenters’ rights relating to the Mergers that the Company Securityholder may have directly or indirectly by virtue of the ownership of the Subject Shares.

SECTION 5. Additional Shares

Without limiting any provisions of the Merger Agreement, in the event of any stock dividend, stock split, recapitalization, reclassification, combination or exchange of shares of capital stock of any Apple REIT on, of or affecting any Subject Shares, then the terms of this Agreement shall apply to the shares of capital stock or other such securities of such Apple REIT held by the Company Securityholder immediately following the effectiveness of such event.

SECTION 6. Representations and Warranties of the Company Securityholder

The Company Securityholder represents and warrants to the Apple REITs as follows:

(a) The Company Securityholder has the legal capacity, power, authority and right (contractual or otherwise) to execute and deliver this Agreement and to perform his obligations hereunder.

(b) This Agreement has been duly executed and delivered by the Company Securityholder and constitutes a valid and binding obligation of the Company Securityholder enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium or other similar laws relating to creditors’ rights and general principles of equity.

(c) The execution and delivery of this Agreement does not, and the consummation of the transactions herein contemplated will not, conflict with or violate any law, regulation, court order, judgment or decree applicable to the Company Securityholder or the Subject Shares, or conflict with or result in any breach of or constitute a default (or an event which with notice or lapse of time or both would become a default) or give rise to any right of termination, cancellation or acceleration under any contract or agreement to which the Company Securityholder is a party or by which the Company Securityholder is bound or affected or under which the Subject Shares are bound by are otherwise subject to, which conflict, violation, breach or default would materially and adversely affect the Company Securityholder’s ability to perform any of his obligations under this Agreement.

(d) Subject to any required filings under the Securities Exchange Act of 1934, as amended (the “1934 Act”), the Company Securityholder is not required to give any notice or

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make any report or other filing with any governmental or regulatory authority in connection with the execution or delivery of this Agreement or the performance of the Company Securityholder’s obligations hereunder and no waiver, consent, approval or authorization of any governmental or regulatory authority or any other person or entity is required to be obtained by the Company Securityholder for the performance of the Company Securityholder’s obligations hereunder, other than where the failure to make such filings, give such notices or obtain such waivers, consents, approvals or authorizations would not materially and adversely affect the Company Securityholder’s ability to perform his obligations under this Agreement.

(e) The Series B Convertible Shares and Units set forth opposite the name of the Company Securityholder on Schedule 1 hereto are, as of the date hereof, the only Subject Shares owned beneficially or of record by the Company Securityholder or over which the Company Securityholder exercises voting control. The Company Securityholder is the sole record and beneficial owner of the Subject Shares as set forth on Schedule 1 hereto.

SECTION 7. Further Assurances

During the Term, the Company Securityholder shall make such filings as may be required under the 1934 Act and, upon the request of any Apple REIT, execute and deliver such documents and take such actions as such Apple REIT may reasonably deem necessary to effectuate the purposes of this Agreement.

SECTION 8. Descriptive Headings

The descriptive headings herein are inserted for convenience only and are not intended to be part of or to affect the meaning or interpretation of this Agreement.

SECTION 9. Counterparts

This Agreement may be executed in counterparts, each of which when so executed and delivered shall be an original, but all of such counterparts shall together constitute one and the same instrument.

SECTION 10. Entire Agreement; Assignment

This Agreement (i) constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the parties hereto with respect to the subject matter hereof and (ii) shall not be assigned by the Company Securityholder, by operation of law or otherwise. The Company Securityholder agrees that this Agreement and the obligations of the Company Securityholder hereunder shall attach to any Subject Shares and shall be binding upon any Person to which legal or beneficial ownership of such Subject Shares shall pass, whether by operation of law or otherwise, including in breach of this Agreement.

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SECTION 11. Governing Law; Consent to Jurisdiction; Waiver of Jury Trial

(a) This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia without regard to the principles of conflicts of laws thereof.

(b) The Company Securityholder hereby submits and consents to non-exclusive personal jurisdiction in any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby in a federal court located in the Commonwealth of Virginia or in a Virginia state court. Any process, summons, notice or document delivered by mail to the address set forth on Schedule 1 hereto shall be effective service of process for any action, suit or proceeding in any Virginia state court or any federal court located in the Commonwealth of Virginia with respect to any matters to which the Company Securityholder has submitted to jurisdiction in this Section 11. The Company Securityholder irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby in any Virginia state court or any federal court located in the Commonwealth of Virginia, and hereby irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum. THE COMPANY SECURITYHOLDER IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING WITH RESPECT TO THIS AGREEMENT .

SECTION 12. Specific Performance

The parties hereto agree that if any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached, irreparable damage would occur, no adequate remedy at law would exist and damages would be difficult to determine, and that the parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy at law or equity.

SECTION 13. Parties in Interest

This Agreement shall be binding upon and inure solely to the benefit of each party hereto, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other person or persons any rights, benefits or remedies of any nature whatsoever under or by reason of this Agreement.

SECTION 14. Amendment; Waivers

This Agreement shall not be amended, altered or modified except by an instrument in writing duly executed by each of the parties hereto; provided that no such written agreement shall be binding on an Apple REIT unless approved by the Special Committee of such Apple REIT. No delay or failure on the part of any party hereto in exercising any right, power or privilege under this Agreement shall impair any such right, power or privilege or be construed as a waiver of any default or any acquiescence thereto. No single or partial exercise of any such right, power or privilege shall preclude the further exercise of such right, power or privilege, or

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the exercise of any other right, power or privilege. No waiver shall be valid against any party hereto, unless made in writing and signed by the party against whom enforcement of such waiver is sought, and then only to the extent expressly specified therein.

SECTION 15. Severability

Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable.

SECTION 16. Capacity of Company Securityholder

The Company Securityholder has executed this Agreement solely in his capacity as a securityholder of each Apple REIT and not in his capacity as an officer, director, employee or manager of any Apple REIT. Without limiting the foregoing, nothing in this Agreement shall limit or affect any actions taken by the Company Securityholder in such person’s capacity as an officer, director, employee or manager of any Apple REIT in connection with the exercise of any Apple REIT’s rights under the Merger Agreement.

SECTION 17. Termination

This Agreement shall terminate immediately upon the expiration of the Term. None of the representations, warranties, covenants or agreements in this Agreement shall survive the termination of this Agreement; provided , however , that nothing contained herein shall release the Company Securityholder from any liability arising from any willful and material breach of any of his representations, warranties, covenants or agreements in this Agreement.

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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Voting Agreement, or have caused this Voting Agreement to be duly executed and delivered in their names and on their behalf, as of the date first written above.

APPLE REIT SEVEN, INC.

By: /s/ Justin G. Knight

Name: Justin G. Knight

Title: President

APPLE REIT EIGHT, INC.

By: /s/ Justin G. Knight

Name: Justin G. Knight

Title: President

APPLE REIT NINE, INC.

By: /s/ Justin G. Knight

Name: Justin G. Knight

Title: President

/s/ Glade M. Knight __________________________

GLADE M. KNIGHT

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Schedule 1

	Number of Series B Convertible Shares	Number of Series B Convertible Shares as to which Glade M. Knight is Sole Beneficial Owner	Units*
Apple REIT Seven, Inc.
Name of Record and Beneficial Owner
Glade M. Knight	240,000	162,611	18,955
Apple REIT Eight, Inc.
Name of Record and Beneficial Owner
Glade M. Knight	240,000	170,649	10,536
Apple REIT Nine, Inc.
Name of Record and Beneficial Owner
Glade M. Knight	480,000	348,797	9,222

_____________________

*Sole record and beneficial owner

Any process, summons, notice or document delivered by mail pursuant to Section 11 hereof to the beneficial or record holder set forth on this Schedule 1 , shall be delivered to:

Apple Hospitality Companies

814 E. Main Street

Richmond, Virginia 23219

Attention: Glade M. Knight

Tel: (xxx) xxx-xxxx

Fax: (xxx) xxx-xxxx

With a copy to :

McGuireWoods

901 East Cary Street

Richmond, VA 23219

Attention: David W. Robertson

Tel: (xxx) xxx-xxxx

Fax: (xxx) xxx-xxxx

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Exhibit 99.5

CONVERSION AGREEMENT

THIS CONVERSION AGREEMENT (this “Agreement”) is entered into as of August 7, 2013 by and among Apple REIT Nine, Inc, a Virginia corporation (“Apple Nine”), and [__________________] (a “Company Securityholder”).

WHEREAS, Apple Nine, Apple REIT Seven, Inc., a Virginia corporation (“Apple Seven”), and Apple REIT Eight, Inc., a Virginia corporation (“Apple Eight,” and collectively with Apple Nine and Apple Seven, the “Apple REITs,” or individually an “Apple REIT”), are entering into an Agreement and Plan of Merger, dated as of the date hereof (the “Merger Agreement”), pursuant to which Seven Acquisition Sub, a wholly-owned subsidiary of Apple Nine, will merge with and into Apple Seven (the “Apple Seven Merger”) and Eight Acquisition Sub, a wholly-owned subsidiary of Apple Nine, will merge with and into Apple Eight (the “Apple Eight Merger,” and together with the Apple Seven Merger, the “Mergers,” or individually a “Merger”), with Apple Seven and Apple Eight as the Surviving Corporations in the Mergers (all capitalized terms used but not defined herein shall have the meanings set forth in the Merger Agreement);

WHEREAS, Glade M. Knight (“Mr. Knight”) is the beneficial and record owner of issued and outstanding Apple Nine Series B Shares and has assigned to the Company Securityholder certain benefits associated with certain of his Apple Nine Series B Shares, including the right of conversion of such outstanding Apple Nine Series B Shares upon the happening of certain events, as more particularly described on Schedule 1 hereto.

SECTION 1. Disposition of Apple Nine Series B Shares

During the period from the date hereof through the earlier of (i) the date on which each Merger is consummated or (ii) the date on which the Merger Agreement is terminated according to its terms (such period hereinafter referred to as the “Term”), the Company Securityholder shall not, directly or indirectly, sell, sell short, transfer (including by gift), pledge, encumber, assign or otherwise dispose of, or enter into any contract, option or other agreement or understanding with respect to the sale, transfer, pledge, encumbrance, assignment or other disposition of, any Apple Nine Series B Shares or benefits relating thereto that the Company Securityholder may beneficially own or hold during the Term; provided , however , that nothing herein shall prevent the sale, transfer, pledge, encumbrance, assignment or other disposition of any of such Apple Nine Series B Shares or benefits relating thereto, provided that the purchaser, transferee, pledgee or assignee thereof agrees in writing with Apple Nine, prior to such sale,

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transfer, pledge, encumbrance, assignment or other disposition, to be bound by the terms of this Agreement.

SECTION 2. Conversion

The Company Securityholder agrees to convert each Series B Convertible Share held by the Company Securityholder into 24.17104 common shares, no par value, of Apple Nine effective immediately before the Effective Time, pursuant to Section 5.2(e) of the Articles of Incorporation of Apple Nine.

SECTION 3. Representations and Warranties of the Company Securityholder

The Company Securityholder represents and warrants to Apple Nine as follows:

(a) The Company Securityholder has the legal capacity, power, authority and right (contractual or otherwise) to execute and deliver this Agreement and to perform the Company Securityholder’s obligations hereunder.

(c) The execution and delivery of this Agreement does not, and the consummation of the transactions herein contemplated will not, conflict with or violate any law, regulation, court order, judgment or decree applicable either to the Company Securityholder or the Apple Nine Series B Shares which the Company Securityholder holds or with respect to which the Company Securityholder has been assigned benefits, or conflict with or result in any breach of or constitute a default (or an event which with notice or lapse of time or both would become a default) or give rise to any right of termination, cancellation or acceleration under any contract or agreement to which the Company Securityholder is a party or by which the Company Securityholder is bound or affected or under which the Apple Nine Series B Shares which the Company Securityholder holds or with respect to which the Company Securityholder has been assigned benefits are bound by or otherwise subject to, which conflict, violation, breach or default would materially and adversely affect the Company Securityholder’s ability to perform any of the Company Securityholder’s obligations under this Agreement.

(d) Subject to any required filings under the Securities Exchange Act of 1934, as amended (the “1934 Act”), the Company Securityholder is not required to give any notice or make any report or other filing with any governmental or regulatory authority in connection with the execution or delivery of this Agreement or the performance of the Company Securityholder’s obligations hereunder and no waiver, consent, approval or authorization of any governmental or regulatory authority or any other person or entity is required to be obtained by the Company Securityholder for the performance of the Company Securityholder’s obligations hereunder, other than where the failure to make such filings, give such notices or obtain such waivers, consents,

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approvals or authorizations would not materially and adversely affect the Company Securityholder’s ability to perform the Company Securityholder’s obligations under this Agreement.

(e) The Apple Nine Series B Shares set forth on Schedule 1 hereto are, as of the date hereof, the only Apple Nine Series B Shares which such Company Securityholder holds or with respect to which such Company Securityholder has been assigned any benefits.

SECTION 4. Descriptive Headings

The descriptive headings herein are inserted for convenience only and are not intended to be part of or to affect the meaning or interpretation of this Agreement.

SECTION 5. Counterparts

This Agreement may be executed in counterparts, each of which when so executed and delivered shall be an original, but all of such counterparts shall together constitute one and the same instrument.

SECTION 6. Entire Agreement; Assignment

This Agreement (i) constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the parties hereto with respect to the subject matter hereof and (ii) shall not be assigned by the Company Securityholder, by operation of law or otherwise. The Company Securityholder agrees that this Agreement and the obligations of the Company Securityholder hereunder shall attach to any Apple Nine Series B Shares held by such Company Securityholder or with respect to which the Company Securityholder has been assigned benefits and shall be binding upon any Person to which legal or beneficial ownership of such Apple Nine Series B Shares or certain benefits relating thereto shall pass, whether by operation of law or otherwise, including in breach of this Agreement.

SECTION 7. Governing Law; Consent to Jurisdiction; Waiver of Jury Trial

(a) This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia without regard to the principles of conflicts of laws thereof.

(b) The Company Securityholder hereby submits and consents to non-exclusive personal jurisdiction in any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby in a federal court located in the Commonwealth of Virginia or in a Virginia state court. Any process, summons, notice or document delivered by mail to the address set forth on Schedule 1 hereto shall be effective service of process for any action, suit or proceeding in any Virginia state court or any federal court located in the Commonwealth of Virginia with respect to any matters to which the Company Securityholder has submitted to jurisdiction in this Section 7. The Company Securityholder irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby in any Virginia state court or any federal

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court located in the Commonwealth of Virginia, and hereby irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum. THE COMPANY SECURITYHOLDER IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING WITH RESPECT TO THIS AGREEMENT .

SECTION 8. Specific Performance

SECTION 9. Parties in Interest

SECTION 10. Amendment; Waivers

This Agreement shall not be amended, altered or modified except by an instrument in writing duly executed by each of the parties hereto; provided that no such written agreement shall be binding on an Apple Nine unless approved by the Special Committee of Apple Nine. No delay or failure on the part of any party hereto in exercising any right, power or privilege under this Agreement shall impair any such right, power or privilege or be construed as a waiver of any default or any acquiescence thereto. No single or partial exercise of any such right, power or privilege shall preclude the further exercise of such right, power or privilege, or the exercise of any other right, power or privilege. No waiver shall be valid against any party hereto, unless made in writing and signed by the party against whom enforcement of such waiver is sought, and then only to the extent expressly specified therein.

SECTION 11. Severability

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SECTION 12. Termination

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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Conversion Agreement, or have caused this Conversion Agreement to be duly executed and delivered in their names and on their behalf, as of the date first written above.

APPLE REIT NINE, INC.

By:

Name: Justin G. Knight

Title: President

__________________________________________

[Company Securityholder]

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Schedule 1

Apple Nine Series B Shares

_____________________

Any process, summons, notice or document delivered by mail pursuant to Section 8 to the beneficial or record holder set forth on this Schedule 1 , shall be delivered to:

[Company Securityholder]

[Address]

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Exhibit 99.6

TERMINATION AGREEMENT

This Termination Agreement (“Agreement”) is entered into as of August 7, 2013 by and among Apple Seven Advisors, Inc., a Virginia corporation (“Seven Advisors”), Apple Eight Advisors, Inc., a Virginia corporation (“Eight Advisors”), Apple Nine Advisors, Inc., a Virginia corporation (“Nine Advisors”), Apple Suites Realty Group, Inc. (“ASRG,” and collectively with Seven Advisors, Eight Advisors and Nine Advisors, the “Advisors,” or individually, an “Advisor”), Apple REIT Seven, Inc., a Virginia corporation (“Apple Seven”), Apple REIT Eight, Inc., a Virginia corporation (“Apple Eight”), and Apple REIT Nine, Inc., a Virginia corporation (“Apple Nine,” and collectively with Apple Seven and Apple Eight, the “Companies,” or individually a “Company”).

WHEREAS, the Companies, Seven Acquisition Sub and Eight Acquisition Sub are entering into an Agreement and Plan of Merger, dated as of the date hereof, (the “Merger Agreement”) pursuant to which wholly-owned subsidiaries of Apple Nine will merge with and into Apple Seven and Apple Eight and, as a result of the mergers, Apple Seven and Apple Eight will become wholly-owned subsidiaries of Apple Nine (all capitalized terms used but not defined herein shall have the meanings set forth in the Merger Agreement).

WHEREAS, certain of the Companies and certain of the Advisors are parties to the agreements set forth on Schedule 1 hereto (the “Related Party Agreements”).

WHEREAS, pursuant to Section 6.1(d) of the Merger Agreement, the respective obligation of each Company to effect the Mergers is partially conditioned upon the effectiveness of this Agreement as of the Effective Time.

1. Termination of Related Party Agreements . As of immediately before the Effective Time, the Related Party Agreements shall be terminated and shall be of no further force or effect, except as provided herein. The termination of the Related Party Agreements immediately before the Effective Time shall not affect any of the rights or obligations of any party to any such Related Party Agreement accruing prior to the Effective Time; provided, however, each Advisor and each Company acknowledges that no fees shall be payable as a result of the termination of the Related Party Agreements.

2. Representations and Warranties from the Companies . Each of the Companies, as to itself only, represents and warrants to each of the Advisors as follows:

(a) Such Company has the legal capacity, power, authority and right (contractual or otherwise) to execute and deliver this Agreement and to perform his obligations hereunder.

(b) This Agreement has been duly executed and delivered by such Company and constitutes a valid and binding obligation of such Company enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium or other similar laws relevant to creditors’ rights and general principles of equity.

(c) The execution and delivery of this Agreement and the consummation of the transactions herein contemplated will not (i) conflict with or violate the Articles of Incorporation or Bylaws of such Company, (ii) conflict with or violate any court order, judgment or decree applicable to such Company, or (iii) conflict with or result in any breach of or constitute a default (or an event which with notice or lapse of time or both would become a default) under any contract or agreement to which such Company is a party or by which such Company is bound or affected, which conflict, violation, breach or default in the case of (ii) or (iii) would materially and adversely affect such Company’s ability to perform any of its obligations under this Agreement.

3. Representations and Warranties from the Advisors . Each Advisor, as to itself only, represents and warrants to each of the Companies as follows:

(a) Such Advisor has the legal capacity, power, authority and right (contractual or otherwise) to execute and deliver this Agreement and to perform its obligations hereunder.

(b) This Agreement has been duly executed and delivered by such Advisor and constitutes a valid and binding obligation of such Advisor enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium or other similar laws relevant to creditors’ rights and general principles of equity.

(c) The execution and delivery of this Agreement and the consummation of the transactions herein contemplated will not (i) conflict with or violate the Articles of Incorporation or Bylaws of such Advisor, (ii) conflict with or violate any court order, judgment or decree applicable to such Advisor, or (iii) conflict with or result in any breach of or constitute a default (or an event which with notice or lapse of time or both would become a default) under any contract or agreement to which such Advisor is a party or by which such Advisor is bound or affected, which conflict, violation, breach or default in the case of (ii) or (iii) would materially and adversely affect such Advisor’s ability to perform any of its obligations under this Agreement.

4. Descriptive Headings . The descriptive headings herein are inserted for convenience only and are not intended to be part of or to affect the meaning or interpretation of this Agreement.

5. Amendment; Waivers . This Agreement shall not be amended, altered or modified except by an instrument in writing duly executed by each of the parties hereto and, with respect to Apple Seven, Apple Eight and Apple Nine, with the prior approval of each Special Committee thereof. No delay or failure on the part of any party hereto in exercising any right, power or privilege under this Agreement shall impair any such right, power or privilege or be construed as a waiver of any default or any

acquiescence thereto. No waiver shall be valid against any party hereto, unless made in writing and signed by the party against whom enforcement of such waiver is sought, and then only to the extent expressly specified therein.

6. Counterparts . This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties.

7. Entire Agreement; No Third-Party Beneficiaries . This Agreement (a) constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, between the parties with respect to the subject matter of this Agreement and, (b) is not intended to confer upon any person other than the parties hereto any rights or remedies.

8. Governing Law . This Agreement shall be governed by, and construed in accordance with, the laws of the Commonwealth of Virginia, regardless of the laws that might otherwise govern under applicable principles of conflict of laws thereof.

9. Assignment . Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned or delegated, in whole or in part, by operation of law or otherwise by any party without the prior written consent of the other party. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns.

10. Enforcement . The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any court of the United States located in the Commonwealth of Virginia or in any Virginia state court, this being in addition to any other remedy to which they are entitled at law or in equity. In addition, each of the parties hereto (a) consents to submit itself (without making such submission exclusive) to the personal jurisdiction of any federal court located in the Commonwealth of Virginia or any Virginia state court in the event any dispute arises out of this Agreement or any of the transactions contemplated by this Agreement and (b) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING WITH RESPECT TO THIS AGREEMENT.

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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Termination Agreement, or have caused this Termination Agreement to be duly executed and delivered in their names and on their behalf, all as of the date first written above.

APPLE REIT SEVEN ADVISORS, INC.

By: /s/ Glade M. Knight ______________

Name: Glade M. Knight

Title: President

APPLE REIT EIGHT ADVISORS, INC.

By: /s/ Glade M. Knight ______________

Name: Glade M. Knight

Title: President

APPLE REIT NINE ADVISORS, INC.

By: /s/ Glade M. Knight ______________

Name: Glade M. Knight

Title: President

APPLE SUITES REALTY GROUP, INC.

By: /s/ Glade M. Knight ______________

Name: Glade M. Knight

Title: President

APPLE REIT SEVEN, INC.

By: /s/ Justin G. Knight ______________

Name: Justin G. Knight

Title: President

APPLE REIT EIGHT, INC.

By: /s/ Justin G. Knight ______________

Name: Justin G. Knight

Title: President

APPLE REIT NINE, INC.

By: /s/ Justin G. Knight ______________

Name: Justin G. Knight

Title: President

Schedule 1

1.	Advisory Agreement between Apple REIT Seven, Inc. and Apple Seven Advisors, Inc. dated as of March 2, 2006.

2.	Property Acquisition/Disposition Agreement between Apple REIT Seven, Inc. and Apple Suites Realty Group, Inc., dated as of March 2, 2006.

3.	Advisory Agreement between Apple REIT Eight, Inc. and Apple Eight Advisors, Inc. dated as of May 24, 2007.

4.	Property Acquisition/Disposition Agreement between Apple REIT Eight, Inc. and Apple Suites Realty Group, Inc., dated as of May 24, 2007.

5.	Advisory Agreement between Apple REIT Nine, Inc. and Apple Nine Advisors, Inc. dated as of April 23, 2008.

6.	Property Acquisition/Disposition Agreement between Apple REIT Nine, Inc. and Apple Suites Realty Group, Inc., dated as of April 23, 2008.

Exhibit 99.7

SUBCONTRACT AGREEMENT

This Subcontract Agreement (the “Agreement”) is entered into as of August 7, 2013 by and among Apple REIT Nine, Inc., a Virginia corporation (“Apple Nine”), and Apple Ten Advisors, Inc., a Virginia corporation (“Apple Ten Advisors”).

WHEREAS, Apple Seven, Apple Eight, Apple Nine, Seven Acquisition Sub and Eight Acquisition Sub are entering into an Agreement and Plan of Merger, dated as of the date hereof (the “Merger Agreement”), whereby wholly-owned subsidiaries of Apple Nine will merge with and into Apple Seven and Apple Eight such that, as a result of the mergers, Apple Seven and Apple Eight will become wholly-owned subsidiaries of Apple Nine (all capitalized terms used but not defined herein shall have the meanings set forth in the Merger Agreement).

WHEREAS, Apple REIT Ten, Inc., a Virginia corporation (“Apple Ten”), and Apple Ten Advisors are parties to an Advisory Agreement, dated as of December 20, 2010, as amended, whereby Apple Ten has engaged Apple Ten Advisors to perform specified services to Apple Ten for specified fees (as the same may be amended from time to time in accordance with the terms thereof and this Agreement, the “Advisory Agreement”).

WHEREAS, pursuant to Section 6.1(e) of the Merger Agreement, the respective obligation of each of the Apple REITs to effect the Mergers is partially conditioned upon the effectiveness of this Agreement as of the Effective Time.

Now, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree, intending to be legally bound, as follows:

1. The Subcontract . Effective as of the Effective Time, Apple Ten Advisors agrees to transfer all of its right, title and interest to, and Apple Nine hereby agrees to accept, all fees, expenses or other payments Apple Ten is obligated to pay under the Advisory Agreement, and Apple Nine, directly or through its Subsidiaries, agrees to perform the obligations and duties of Apple Ten Advisors under the Advisory Agreement, arising on or after the Effective Time, when and as each such performance shall be required of Apple Ten Advisors under the Advisory Agreement.

2. Further Duties of Apple Ten Advisors . Apple Ten Advisors hereby agrees that at the reasonable direction of Apple Nine it shall use its commercially reasonable efforts to perform or take such action under the Advisory Agreement, including, without limitation, demanding payment or performance from Apple Ten under the Advisory Agreement; provided, however, that Apple Ten Advisors shall not be required to (a) perform or take any action that could extend or increase its obligations under the Advisory Agreement (unless such obligations are to be performed solely by Apple Nine in connection with this Agreement), (b) incur any costs or expenses in connection with this Agreement or under the Advisory Agreement (unless reimbursed by Apple Nine), or (c) terminate the Advisory Agreement, through Section 22(c) of the Advisory Agreement or otherwise. In addition, Apple Ten Advisors agrees to deliver to

Apple Nine any payments, received after the Effective Time from Apple Ten under the Advisory Agreement, as promptly as practicable (and in no event later than 5 business days) following receipt of such payments, and to keep separate from Apple Ten Advisors’ other assets such amounts until paid to Apple Nine hereunder. Apple Ten Advisors also agrees to forward any notices, documents or instruments or other information relating to the Advisory Agreement to Apple Nine promptly (and in no event later than 5 business days) after receiving such information.

3. Other Agreements . Apple Ten Advisors shall not, without the prior written consent of Apple Nine (acting at the direction of a majority of the non-management directors of Apple Nine), enter into any amendment, modification or supplement of the Advisory Agreement (including, without limitation, agreeing to any other services pursuant to Section 14 thereof) or grant any consent, waiver or release, which amendment, modification, supplement, consent, waiver or release would reasonably be expected to in any manner, directly or indirectly, enlarge, extend or prolong Apple Nine’s obligations or liabilities hereunder, release Apple Ten or its affiliates of any of its obligations or liabilities thereunder or diminish any of Apple Ten Advisors’ rights thereunder. The parties agree that Apple Ten Advisors’ right to terminate the Advisory Agreement pursuant to Section 22 thereof is not affected by the foregoing and that Apple Ten Advisors retains the right, in its sole discretion, to exercise its rights under Section 22 of the Advisory Agreement; provided, however, Apple Ten Advisors shall not terminate the Advisory Agreement unless the Property Acquisition/Disposition Agreement, dated December 10, 2010 and effective January 19, 2011 between Apple Ten and Apple Suites Realty Group, Inc. is concurrently terminated. During the term of this Agreement, Apple Ten Advisors shall not assign any of its rights under the Advisory Agreement or enter into any other subcontract arrangement with respect to the Advisory Agreement.

4. Representations and Warranties of Apple Ten Advisors . Apple Ten Advisors represents and warrants that:

(a) Apple Ten Advisors has the legal capacity, power, authority and right (contractual or otherwise) to execute and deliver this Agreement and to perform its obligations hereunder.

(b) This Agreement has been duly executed and delivered by Apple Ten Advisors and constitutes a valid and binding obligation of Apple Ten Advisors enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium or other similar laws relevant to creditors’ rights and general principles of equity.

(c) The execution and delivery of this Agreement and the consummation of the transactions herein contemplated will not (i) conflict with or violate the Articles of Incorporation or Bylaws of Apple Ten Advisors, (ii) conflict with or violate any court order, judgment or decree applicable to Apple Ten Advisors, or (iii) conflict with or result in any breach of or constitute a default (or an event which with notice or lapse of time or both would become a default) under any contract or agreement to which Apple Ten Advisors is a party or by which Apple Ten Advisors is bound or affected, which conflict, violation,

breach or default in the case of (ii) or (iii) would materially and adversely affect Apple Ten Advisor’s ability to perform any of its obligations under this Agreement.

(d) To the Knowledge of Apple Ten Advisors, neither Apple Ten Advisors nor Apple Ten is in breach or violation of, or default under, the Advisory Agreement. For purposes of this Agreement, “Knowledge of Apple Ten Advisors” shall mean the actual knowledge of the persons listed on Schedule 10.1(b) of the Apple Nine Disclosure Letter.

5. Representations and Warranties of Apple Nine . Apple Nine represents and warrants that:

(a) Apple Nine has the legal capacity, power, authority and right (contractual or otherwise) to execute and deliver this Agreement and to perform its obligations hereunder and under the Advisory Agreement.

(b) This Agreement has been duly executed and delivered by Apple Nine and constitutes a valid and binding obligation of Apple Nine enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium or other similar laws relevant to creditors’ rights and general principles of equity.

(c) The execution and delivery of this Agreement, the consummation of the transactions herein contemplated, and the performance required under the Advisory Agreement by Apple Nine will not (i) conflict with or violate the Articles of Incorporation or Bylaws of Apple Nine, (ii) conflict with or violate any court order, judgment or decree applicable to Apple Nine, or (iii) conflict with or result in any breach of or constitute a default (or an event which with notice or lapse of time or both would become a default) under any contract or agreement to which Apple Nine is a party or by which Apple Nine is bound or affected, which conflict, violation, breach or default in the case of (ii) or (iii) would materially and adversely affect Apple Nine’s ability to perform any of its obligations under this Agreement or the Advisory Agreement.

6. Termination . In the event the Merger Agreement is terminated in accordance with its terms, this Agreement shall also terminate immediately upon the date on which the Merger Agreement is terminated. In addition, this Agreement and the rights and duties of the parties under this Agreement (except for outstanding payments to be made pursuant to Section 1 hereof or any indemnification claims made pursuant to Section 7 hereof) shall terminate upon the termination or expiration of the Advisory Agreement.

7. Indemnification .

(a) Apple Nine shall indemnify, defend and hold harmless Apple Ten Advisors and its affiliates and their respective officers, directors, members, employees, agents, representatives, successors and assigns from and against any liabilities, losses or damages asserted against or suffered by Apple

Ten Advisors relating to, resulting from or arising out of any breach by Apple Nine of any of its covenants or agreements under this Agreement, or (ii) the Advisory Agreement on or after the Effective Time (provided such breach results primarily from a breach by Apple Nine of any of its covenants or agreements under this Agreement).

(b) Apple Ten Advisors shall indemnify, defend and hold harmless Apple Nine and its affiliates and their respective officers, directors, members, employees, agents, representatives, successors and assigns from and against any liabilities, losses or damages asserted against or suffered by Apple Nine relating to, resulting from or arising out of any breach by Apple Ten Advisors of (i) any of its covenants or agreements under this Agreement or (ii) the Advisory Agreement on or after the Effective Time (provided such breach does not result primarily from a breach by Apple Nine of any of its covenants or agreements under this Agreement). In addition, Apple Ten Advisors agrees to seek indemnification on behalf of Apple Nine under Section 18 of the Advisory Agreement for any liabilities and losses arising from the operations of Apple Ten (including Apple Nine’s costs and expenses, including legal fees and expenses, incurred in connection with investigating and defending itself against such liabilities and losses) if the conditions set forth under Section 18 of the Advisory Agreement could be met and agrees to transfer to Apple Nine any indemnification payments made to Apple Ten Advisors pursuant to Section 18 of the Advisory Agreement upon receipt.

8. Further Assurances . The parties shall, upon the reasonable request of the other party, execute and deliver such documents and take such actions as the other party may reasonably deem necessary to effectuate the purposes of this Agreement.

9. Descriptive Headings . The descriptive headings herein are inserted for convenience only and are not intended to be part of or to affect the meaning or interpretation of this Agreement.

10. Amendment; Waivers . This Agreement shall not be amended, altered or modified except by an instrument in writing duly executed by each of the parties hereto and, with respect to Apple Nine, with the approval of the Special Committee thereof (prior to the Effective Time) or a majority of the non-management directors of the board of directors thereof (after the Effective Time). No delay or failure on the part of any party hereto in exercising any right, power or privilege under this Agreement shall impair any such right, power or privilege or be construed as a waiver of any default or any acquiescence thereto. No waiver shall be valid against any party hereto, unless made in writing and signed by the party against whom enforcement of such waiver is sought, and then only to the extent expressly specified therein.

11. Counterparts . This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall

become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties.

12. Entire Agreement; No Third-Party Beneficiaries . This Agreement (a) constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, between the parties with respect to the subject matter of this Agreement and, (b) is not intended to confer upon any person other than the parties hereto any rights or remedies.

13. Governing Law . This Agreement shall be governed by, and construed in accordance with, the laws of the Commonwealth of Virginia, regardless of the laws that might otherwise govern under applicable principles of conflict of laws thereof.

14. Assignment . Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned or delegated, in whole or in part, by operation of law or otherwise by any party without the prior written consent of the other party. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns.

15. Enforcement . The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any court of the United States located in the Commonwealth of Virginia or in any Virginia state court, this being in addition to any other remedy to which they are entitled at law or in equity. In addition, each of the parties hereto (a) consents to submit itself (without making such submission exclusive) to the personal jurisdiction of any federal court located in the Commonwealth of Virginia or any Virginia state court in the event any dispute arises out of this Agreement or any of the transactions contemplated by this Agreement and (b) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court. APPLE NINE AND APPLE TEN ADVISORS IRREVOCABLY WAIVE TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING WITH RESPECT TO THIS AGREEMENT.

16. Apple Ten Acknowledgement . Apple Ten acknowledges the terms of this Agreement and agrees that, as a result of this Agreement, the provisions of the Advisory Agreement for the benefit of Apple Ten Advisors (specifically excluding any rights of Apple Ten Advisors under Section 22 of the Advisory Agreement), to the extent that any such provisions relate to the subcontract effectuated by this Agreement, shall extend to Apple Nine.

[Rest of page intentionally left blank]

IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Subcontract Agreement, or have caused this Subcontract Agreement to be duly executed and delivered in their names and on their behalf, all as of the date first written above.

APPLE REIT NINE, INC.

By: /s/ Justin G. Knight

Name: Justin G. Knight

Title: President

APPLE TEN ADVISORS, INC.

By: /s/ Glade M. Knight

Name: Glade M. Knight

Title: President

APPLE REIT TEN, INC.

(For purposes of Section 16 only)

By: /s/ Justin G. Knight

Name: Justin G. Knight

Title: President

Exhibit 99.8

ASSIGNMENT AND TRANSFER AGREEMENT

This Assignment and Transfer Agreement (the “ Agreement ”), dated as of August 7, 2013, by and among APPLE FUND MANAGEMENT, LLC, a Virginia limited liability company (“ Apple Fund ”), Apple Nine Advisors, Inc., a Virginia corporation (“ Advisors ”) APPLE REIT NINE, INC., a Virginia corporation (“ Apple Nine ”).

INTRODUCTION

A. Advisors owns all of the membership interests (the “ Interest ”) in Apple Fund.

B. Apple Nine, Apple REIT Seven, Inc., a Virginia corporation (“ Apple Seven ”), Apple REIT Eight, Inc., a Virginia corporation (“ Apple Eight ” and together with Apple Seven and the Apple Nine, the “ Apple REITs ”), and Apple Seven Acquisition Sub, Inc. a Virginia corporation and wholly-owned subsidiary of Apple Nine (“ Seven Acquisition Sub ”), and Apple Eight Acquisition Sub, Inc., a Virginia corporation and wholly-owned subsidiary of Apple Nine (“ Eight Acquisition Sub ”), have entered into the Agreement and Plan of Merger dated as of the date hereof (as it may be amended or otherwise modified from time to time, the “ Merger Agreement ”), pursuant to which Seven Acquisition Sub will merge with and into Apple Seven (the “ Apple Seven Merger ”), and Eight Acquisition Sub will merge with and into Apple Eight (the “ Apple Eight Merger ,” together with the Apple Seven Merger, the “ Mergers ,”) and in such Mergers, each will become wholly-owned subsidiary of Apple Nine.

C. In order to induce the Apple REITs to enter into the Merger Agreement and proceed with the Mergers, Advisors and Apple Fund desire to enter into this Agreement.

D. Advisors desires to assign the Interest to Apple Nine and Apple Nine desires to accept the assignment of the Interest.

NOW, THEREFORE , in consideration of the foregoing and the representations, warranties and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

ASSIGNMENT OF THE INTEREST

1.1 Assignment of Interest. Advisors hereby assigns, transfers and delivers to Apple Nine, and Apple Nine hereby accepts, effective as of the Transfer Time and without further action by any party hereto or any other Person, all right, title and interest in and to the Interest, and in exchange Apple Nine shall, at the Transfer Time, pay to Advisors the cash consideration described in Section 2.1 and, in the capacity of a member (within the meaning of the Virginia Limited Liability Company Act, as amended), execute and deliver to Apple Fund a counterparty signature page to the Amended and Restated Operating Agreement of Apple Fund, dated as of October 5, 2007 (the “ Joinder Signature Page ”).

1.2 Acknowledgment of Apple Fund’s Assets and Liabilities . The parties hereto acknowledge that Apple Fund’s assets and liabilities as of the date of this Agreement include, but are not limited to:

(a) all rights, interests, duties and obligations under the Transfer Agreement, dated as of May 23, 2007, by and between Apple Hospitality Two, Inc., a Virginia corporation, and Apple Hospitality Five, Inc., a Virginia corporation (the “ Apple Two Transfer Agreement ”);

(b) all rights, interests, duties and obligations under the Assignment and Transfer Agreement, dated as of October 5, 2007, by and among Apple Fund, Apple Hospitality Five, Inc., a Virginia corporation, and Apple REIT Six, Inc., a Virginia corporation, and, solely for the purposes of Articles III, IV and V thereof, Inland American Real Estate Trust, Inc., a Maryland corporation, and Apple Six Advisors, Inc., a Virginia corporation (the “ Apple Five Transfer Agreement ”); and

(c) all rights, interests, duties and obligations under the Assignment and Transfer Agreement, dated as of November 29, 2012, by and among Apple Fund, Apple REIT Six, Inc., a Virginia corporation (“Apple Six”), Advisors, and, solely with respect to Sections 2.2 and 2.6 thereof, Apple Seven Advisors, Inc., Apple Eight Advisors, Inc. and Apple Ten Advisors, Inc. (the “ Apple Six Transfer Agreement ”; and, together with the Apple Two Transfer Agreement and the Apple Five Transfer Agreement, the “ Transfer Agreements ”).

1.3 Acknowledgement and Guarantee of Apple Five Transfer Agreement . To relieve Advisors of its liabilities and obligations under the Apple Five Transfer Agreement, Apple Nine (i) formally acknowledges and unconditionally and irrevocably guarantees, from and after the Transfer Time, all liabilities and obligations of Apple Fund under the Apple Five Transfer Agreement, if any, and (ii) shall, at the Transfer Time, execute and deliver the Acknowledgement and Guarantee set forth on Exhibit A hereto.

1.4 Assignment, Acknowledgement and Guarantee of Apple Six Transfer Agreement . Advisors, effective as of the Transfer Time or at such later time as Buyer (as defined in the Apple Six Transfer Agreement) and Acquisition Sub (as defined in the Apple Six Transfer Agreement), as successor by merger to Apple Six, have consented to such assignment if such consent has not been provided at or before the Transfer Time (“Consent Time”) and without further action by any party hereto or any other Person, fully assigns to Apple Nine all of its right, interests, duties and obligations under the Apple Six Transfer Agreement and Apple Nine hereby, effective as of the later of the Transfer Time or the Consent Time and without further action by any party hereto or any other Person, accepts the foregoing assignment of the Apple Six Transfer Agreement and hereby assumes, and agrees to pay, perform and discharge when due from and after the later of the Transfer Time or the Consent Time, all obligations and liabilities (of any nature whatsoever) of Advisors arising under or relating to the Apple Six Transfer Agreement. To relieve (i) Advisors and (ii) Apple Seven Advisors, Inc., Apple Eight Advisors, Inc. and Apple Ten Advisors, Inc. (collectively, the “ Other Apple Entities ”) of their liabilities and obligations under the Apple Six Transfer Agreement, Apple Nine (i) formally acknowledges and unconditionally and irrevocably guarantees, from and after the later of the Transfer Time or the Consent Time, all liabilities and obligations of Apple Fund, Advisors and the Other Apple Entities under the Apple Six Transfer Agreement, if any, and (ii) shall, at the later of the

Transfer Time or the Consent Time, execute and deliver the Acknowledgement and Guarantee in substantially the form set forth on Exhibit B hereto (together with Exhibit A hereto and the Joinder Signature Page, collectively the “Ancillary Documents”) with such changes as Advisors may reasonably request provided such changes are approved by the Special Committee of Apple Nine (prior to the Effective Time) or a majority of the non-management directors of the board of directors of Apple Nine (after the Effective Time). Advisors and Apple Fund hereby consent to the assignment of the Apple Six Transfer Agreement pursuant to the provisions of this Section 1.4.

ARTICLE II

TRANSFER AGREEMENT

2.1 Consideration. At the Transfer Time, Apple Nine shall pay to Advisors a total of $1.00 in cash consideration. Additional consideration for the transactions contemplated by this Agreement is provided as described in the Introduction to this Agreement.

2.2 Advisors Representations . Advisors hereby represents and warrants to Apple Nine that:

(a) Advisors is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, and has corporate power and authority to own, lease and operate all of its properties and assets and to carry on its business as now being conducted.

(b) Advisors has corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by Advisors, and the consummation by it of the transactions contemplated hereby, have been duly authorized by the board of directors of Advisors and no other corporate proceedings on the part of Advisors are necessary with respect thereto. This Agreement has been duly executed and delivered by Advisors and, assuming that the other parties hereto have duly authorized, executed and delivered this Agreement, this Agreement constitutes a valid and binding obligation of Advisors, enforceable in accordance with its terms except as such enforceability may be limited by (1) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights generally or (2) general principles of equity (regardless whether enforceability is considered in a proceeding at law or in equity).

(c) The execution and delivery of this Agreement by Advisors does not, and the consummation of the transactions contemplated hereby and compliance by Advisors with the provisions of this Agreement will not, conflict with, or result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration or other rights or obligations or loss of a benefit under, or result in the creation of any pledge, claim, lien, charge, encumbrance or security interest of any kind or nature whatsoever (each, a “ Lien ”) upon any of the properties or assets of Advisors or any of its Subsidiaries under (A) the Articles of Incorporation, bylaws or similar organizational documents of Advisors, (B) any agreement, contract, note, loan, evidence of indebtedness, purchase order, letter of credit indenture, security or pledge agreement, mortgage, franchise agreement, undertaking, covenant not to compete, employment agreement, license, lease, instrument,

obligation or commitment (whether written or oral and whether express or implied) (each, a “ Contract ”) or other instrument applicable to Advisors or its properties or assets or (C) any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to Advisors, other than, in the case of clause (B) or (C), any such conflicts, violations or defaults that would not, individually or in the aggregate, materially impair the ability of Advisors to perform its obligations under this Agreement.

(d) No consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Entity is required by or with respect to Advisors in connection with the execution or delivery of this Agreement by Advisors or the consummation by Advisors of any of the transactions contemplated hereby.

(e) No claims for indemnification or otherwise has been made by any party to any of the Transfer Agreements. Advisors is not in material breach of or material default under any such Transfer Agreement. Advisors has not received any written claim or notice of material breach of or material default under any such Transfer Agreement. To Advisor’s Knowledge, no event has occurred which individually or together with other events, would reasonably be expected to result in a material breach of or material default under any such Transfer Agreement by Advisors, the Other Apple Entities or the other parties thereto (in each case with or without notice or lapse of time or both).

(f) Advisors owns the Interest free and clear of any Lien and any other limitation or restriction on the right to sell, transfer or otherwise dispose of the Interest.

2.3 Apple Fund Representations . Apple Fund hereby represents and warrants to Apple Nine that:

(a) Apple Fund is a limited liability company duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, and has limited liability company power and authority to own, lease and operate all of its properties and assets and to carry on its business as now being conducted. Apple Fund has no Subsidiaries.

(b) Apple Fund has limited liability company power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by Apple Fund, and the consummation by it of the transactions contemplated hereby, have been duly authorized by the governing body of Apple Fund and no other limited liability company proceedings on the part of Apple Fund are necessary with respect thereto. This Agreement has been duly executed and delivered by Apple Fund and, assuming that the other parties hereto have duly authorized, executed and delivered this Agreement, this Agreement constitutes a valid and binding obligation of Apple Fund, enforceable in accordance with its terms except as such enforceability may be limited by (1) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights generally or (2) general principles of equity (regardless whether enforceability is considered in a proceeding at law or in equity).

(c) The execution and delivery of this Agreement by Apple Fund does not, and the consummation of the transactions contemplated hereby and compliance by Apple Fund

with the provisions of this Agreement will not, conflict with, or result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration or other rights or obligations or loss of a benefit under, or result in the creation of any Lien upon any of the properties or assets of Apple Fund under (A) the certificate of formation, limited liability company agreement or similar organizational documents of Apple Fund, (B) any contract or other instrument applicable to Apple Fund or its properties or assets or (C) any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to Apple Fund, other than, in the case of clause (B) or (C), any such conflicts, violations or defaults that would not, individually or in the aggregate, materially impair the ability of Apple Fund to perform its obligations under this Agreement.

(d) No consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Entity is required by or with respect to Apple Fund in connection with the execution or delivery of this Agreement by Apple Fund or the consummation by Apple Fund of any of the transactions contemplated hereby.

(e) No claims for indemnification or otherwise has been made by any party to any of the Transfer Agreements. To Apple Fund’s Knowledge, there are no pending or threatened Actions before or by any Governmental Entity against Apple Fund or any of its assets.

(f) To Apple Fund’s Knowledge, Schedule 2.3(f) hereto contains a true, complete and accurate list of all employee benefit plans, programs, policies or arrangements maintained or contributed to by Apple Fund or with respect to which Apple Fund has at any time had any Liability or potential Liability (the “ Apple Fund Benefit Plans ”).

(g) To Apple Fund’s Knowledge, Apple Fund has no liabilities whatsoever, whether direct or indirect, primary or secondary, or contingent, with respect to (i) any employee benefit plan, program, policy or arrangement other than the Apple Fund Benefit Plans or (ii) any prior business activities performed by Apple Fund that are unrelated to the performance of advisory services of the same type currently performed by Apple Fund. Apple Fund is not engaged in any business activities other than with respect to the performance of advisory services for Apple Seven, Apple Eight, Apple Nine and Apple REIT Ten, Inc.

2.4 Apple Nine Representations . Apple Nine hereby represents and warrants to Advisors that:

(a) Apple Nine is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, and has corporate power and authority to own, lease and operate all of its properties and assets and to carry on its business as now being conducted.

(b) Apple Nine has corporate power and authority to execute and deliver this Agreement and the Ancillary Documents and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and the Ancillary Documents by Apple Nine, and the consummation by it of the transactions contemplated hereby and thereby, have been duly authorized by the board of directors of Apple Nine and no other corporate proceedings on the part of Apple Nine are necessary with respect thereto. This Agreement has

been, and the Ancillary Documents will be, duly executed and delivered by Apple Nine and, assuming that the other parties hereto have duly authorized, executed and delivered this Agreement and will duly authorize, execute and deliver the Ancillary Documents, this Agreement constitutes, and the Ancillary Documents will constitute, valid and binding obligations of Apple Nine, enforceable in accordance with their terms, except as such enforceability may be limited by (1) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights generally or (2) general principles of equity (regardless whether enforceability is considered in a proceeding at law or in equity).

(c) The execution and delivery of this Agreement by Apple Nine does not, and the execution and delivery of the Ancillary Documents will not, and the consummation of the transactions contemplated hereby and thereby and compliance by Apple Nine with the provisions of this Agreement and the Ancillary Documents will not, conflict with, or result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration or other rights or obligations or loss of a benefit under, or result in the creation of any Lien upon any of the properties or assets of Apple Nine or any of its Subsidiaries under (A) the articles of incorporation, bylaws or similar organizational documents of Apple Nine, (B) any Contract or other instrument applicable to Apple Nine or its properties or assets or (C) any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to Apple Nine, other than, in the case of clause (B) or (C), any such conflicts, violations or defaults that would not, individually or in the aggregate, materially impair the ability of Apple Nine to perform its obligations under this Agreement or the Ancillary Documents.

(d) No consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Entity is required by or with respect to Apple Nine in connection with the execution or delivery of this Agreement and the Ancillary Documents by Apple Nine or the consummation by Apple Nine of any of the transactions contemplated hereby and thereby.

2.5 Indemnification.

(a) From and after the Transfer Time, Apple Fund and Apple Nine shall jointly and severally defend, protect and indemnify Advisors and its Subsidiaries, each of the Other Apple Entities and each of their respective officers, directors, shareholders, partners, Affiliates, employees, agents, managers, members, representatives, successors and assigns or any officer, director, shareholder, partner, Affiliate, employee, agent, manager, member, representative, successor and assign of any of the foregoing and save and hold each of them harmless from and against, and pay on behalf of or reimburse each such indemnified party on demand as and when incurred, any and all Liabilities incurred by such indemnified parties or any of them as a result of, or arising out of, or relating to (i) the Apple Two Transfer Agreement, the Apple Five Transfer Agreement or the Apple Six Transfer Agreement including, without limitation, any Liabilities of Advisors or the Other Apple Entities under Section 2.6 of the Apple Six Transfer Agreement, (iii) any employee benefit plan, program, policy or arrangement maintained or contributed to by Apple Fund or with respect to which Apple Fund has at any time had any Liability or potential Liability, including (without limitation) the Apple Fund Benefit

Plans, (iv) the breach or inaccuracy of any of the representations or warranties of Apple Nine set forth herein, and (vi) any breach by Apple Nine of any of its covenants or agreements contained herein.

(b) From and after the Transfer Time, Advisors shall defend, protect and indemnify Apple Nine and its officers, directors, shareholders, partners, Affiliates, employees, agents, managers, members, representatives, successors and assigns or any officer, director, shareholder, partner, Affiliate, employee, agent, manager, member, representative, successor and assign of any of the foregoing and save and hold each of them harmless from and against, and pay on behalf of or reimburse each such indemnified party on demand as and when incurred, any and all Liabilities incurred by such indemnified parties or any of them as a result of, or arising out of, or relating to the breach or inaccuracy of any of the representations or warranties of Advisors and/or Apple Fund set forth herein, and any breach by Advisors of any of its covenants or agreements contained herein.

(c) Whenever a claim shall arise for indemnification hereunder or upon receipt by an indemnified party of a written threat of a claim which such indemnified party reasonably believes may give rise to a claim for indemnification hereunder, such indemnified party shall give prompt written notice to the indemnifying parties of the claim for indemnification and the facts, in reasonable detail, constituting the basis for such claim (a “ Claim Notice ”); provided that failure of an indemnified party to give a prompt Claim Notice shall not release, waive or otherwise affect an indemnifying party’s obligations with respect thereto except to the extent that such indemnifying party is materially adversely affected in its ability to defend against such claim or is otherwise materially prejudiced thereby.

(d) The obligations and liabilities of the indemnifying parties to an indemnified party under this Agreement with respect to claims resulting from the assertion of Liabilities by Persons other than an indemnified party under Section 2.5(a) or (b) (including claims of a Governmental Entity for penalties, fines and assessments) (a “ Third-Party Claim ”) shall be subject to the following conditions:

(i) The indemnified party shall give a prompt Claim Notice to the indemnifying parties of the nature of the Third-Party Claim and the amount thereof to the extent known; provided that failure of an indemnified party to give a prompt Claim Notice shall not release, waive or otherwise affect an indemnifying party’s obligations with respect thereto except to the extent that such indemnifying party is materially adversely affected in its ability to defend against such claim or is otherwise materially prejudiced thereby.

(ii) The indemnifying parties shall be entitled to participate in the defense of such Third Party Claim. If the indemnifying parties acknowledge in writing their obligation to indemnify the indemnified party hereunder against any Liability that may result from such Third-Party Claim, then the indemnifying parties shall be entitled to assume the defense of such Third-Party Claim at their expense and through counsel selected by the indemnifying parties (which counsel shall be reasonably acceptable to the indemnified party) within 30 days of the receipt of a Claim Notice with respect to such Third-Party Claim from the indemnified party. If a Claim Notice is given to the

indemnifying parties with respect to a Third-Party Claim and the indemnifying parties do not, within such 30-day period, assume the defense of such Third-Party Claim in accordance with this Section 2.5(d), the indemnifying parties will be bound by any determination made in such Third-Party Claim or any commercially reasonable compromise or settlement effected by the indemnified party. If the indemnifying parties have assumed the defense of a Third-Party Claim in accordance with this Section 2.5(d), then no compromise or settlement of such Third-Party Claim may be effected by the indemnifying parties without the indemnified party’s prior written consent unless (A) such compromise or settlement (i) includes as an unconditional term thereof the delivery by the Person(s) asserting such claim to the indemnified party of a written unconditional release from all Liabilities in respect of such Third-Party Claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party and (B) the sole relief provided for in such compromise or settlement is monetary damages which will be paid in full by the indemnifying parties. No Third-Party Claim which is being defended in good faith by the indemnifying parties in accordance with the terms of this Agreement shall be settled by the indemnified party without the prior written consent of the indemnifying parties (which shall not be unreasonably withheld).

(iii) In any suit, action, claim, arbitration or proceeding relating to a Third-Party Claim the defense of which has been assumed by the indemnifying parties in accordance with this Section 2.5(d): (A) the indemnified party shall have the right to be represented by advisory counsel and accountants of its own choosing at the indemnified party’s sole cost and expense, except the indemnified party shall be entitled to retain its own counsel at the expense of the indemnifying parties if (x) the indemnified party shall have been advised by counsel that there are one or more legal or equitable defenses available to it that are different from or in addition to those available to the indemnifying parties, and, in the reasonable judgment of the indemnified party, counsel for the indemnifying parties could not adequately represent the interests of the indemnified party because such interests could be in conflict with those of the indemnifying parties, (y) such Third-Party Claim involves, or is reasonably likely to have a material effect on, any matter beyond the scope of the indemnification obligation of the indemnifying parties, or (z) the indemnifying parties shall not have assumed the defense of the Third-Party Claim in a timely fashion; and (B) the indemnifying parties shall keep the indemnified party fully informed as to the status of such Third-Party Claim at all stages thereof, whether or not the indemnified party is represented by its own counsel. With respect to any Third-Party Claim (1) the indemnifying parties shall make available to the indemnified party, and its attorneys, accountants and other representatives, all books and records of the indemnifying parties relating to such Third-Party Claim; and (2) the indemnifying parties and the indemnified party, as the case may be, shall render to each other such assistance as may be reasonably required of each other and cooperate in good faith with each other in order to ensure the proper and adequate defense of any Third-Party Claim.

(e) Notwithstanding anything in this Agreement or any applicable law to the contrary, it is understood and agreed by the parties hereto that no director, officer, employee, agent, shareholder or Affiliate of the indemnifying parties shall have (i) any personal liability to

an indemnified party as a result of the breach of any representation, warranty, covenant or agreement of the indemnifying parties contained herein or otherwise arising out of or in connection with the transactions contemplated hereby or (ii) any personal obligation to indemnify an indemnified party for any claims pursuant to this Agreement, and the indemnified parties will not seek recourse or commence any action against any director, officer, employee, agent, shareholder or Affiliate of the indemnifying parties or any of their personal assets as a result of the breach of any representation, warranty, covenant or agreement of the indemnifying parties contained herein or otherwise arising out of or in connection with the transactions contemplated hereby or thereby.

(f) To the extent that the undertakings in Section 2.5(a) or (b) by the indemnifying parties may be unenforceable for any reason, such indemnifying parties shall make the maximum contribution to the payment and satisfaction of each of the Liabilities which is permissible under applicable law.

(g) For purposes of this Agreement, the term “ Liabilities ” shall mean any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, except as set forth in Section 3.9 below, liabilities and damages and expenses (irrespective of whether any such indemnified party is a party to the action for which indemnification hereunder is sought), including reasonable attorneys’ fees and disbursements, interest and penalties and all amounts paid in investigation, defense or settlement of any of the foregoing.

ARTICLE III

GENERAL PROVISIONS

3.1 Assignment. This Agreement shall not be assigned by any party hereto by operation of law or otherwise without the prior written consent of each of the other parties hereto. Subject to the foregoing, all covenants and agreements contained in this Agreement by or on behalf of any of the parties hereto shall bind and inure to the benefit of permitted successors and permitted assigns of the parties hereto.

3.2 Termination . This Agreement shall automatically terminate upon the termination of the Merger Agreement in accordance with its terms.

3.3 Governing Law . This Agreement shall be governed by, and construed in accordance with, the laws of the Commonwealth of Virginia regardless of the laws that might otherwise govern under the principals of conflict of laws thereof.

3.4 Enforcement . The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any court of the United States located in the Commonwealth of Virginia or in any Virginia state court, this being in addition to any other remedy to which they are entitled at law or in equity. In addition, each of the parties hereto (a) consents to submit itself (without making such submission exclusive) to the personal jurisdiction of any federal court located in the Commonwealth of Virginia or any Virginia state

court in the event any dispute arises out of this Agreement or any of the transactions contemplated by this Agreement and (b) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING WITH RESPECT TO THIS AGREEMENT.

3.5 Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

3.6 Services; Access; Cooperation; Further Assurances . From and after the Transfer Time, each of Apple Fund and Apple Nine (the “ Cooperating Parties ”) shall (and shall cause its Affiliates and representatives to) provide (or cause to be provided) to Advisors (including, for purposes of this Agreement, any successor in interest to Advisors) and its Subsidiaries and their respective representatives reasonable access to the employees of each Cooperating Party and to all books and records (including any accounting work papers, subject to the execution and delivery, if requested by outside accountants, by Advisors, as applicable, of customary confidentiality agreements relating to the access to such accounting work papers) and any other information or data relating to Apple REIT Six, a Virginia corporation (now BRE Select Hotels Corp., a Delaware corporation) that is available to a Cooperating Party, its Affiliates or representatives, to the extent reasonably requested by Advisors for any reasonable business purpose including complying with its obligations under the Apple Six Transfer Agreement, and only to the extent that Advisors pays for any reasonable third party costs and expenses incurred by a Cooperating Party in connection with providing such access; provided , however , that the Cooperating Parties shall not have any obligation to provide such access if (i) doing so would require the Cooperating Party to incur any material third party cost or expense which Advisors will not agree to reimburse, or (ii) doing so would involve a material amount of time from any employee, Affiliate or representative of the Cooperating Party, and Advisors are unwilling to pay the Cooperating Party or such Affiliate or representative of the Cooperating Party a reasonable amount to adequately compensate it for such time. Each of the parties hereto shall cooperate with each other and use its reasonable best efforts to take, or cause to be taken, all appropriate actions, and do, or cause to be done, and assist and cooperate with the other parties hereto in doing, all things, necessary, proper or advisable (including by executing any other documents or providing any further materials and documentation) in order to fulfill the provisions of or the purpose of this Agreement, the Apple Six Transfer Agreement and the transactions contemplated hereby.

3.7 Severability . If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of this Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.

3.8 Entire Agreement; No Third-Party Beneficiaries . This Agreement and the transactions contemplated hereby (a) constitute the entire agreement and supersede all prior agreements and understandings, both written and oral, between the parties hereto and their respective Affiliates with respect to the subject matter hereof, and (b) except as set forth in the immediately following sentence, are not intended to and shall not confer upon any Person other

than the parties hereto any rights or remedies hereunder, including the right to rely upon the representations and warranties set forth herein. Notwithstanding the foregoing, each Person indemnified pursuant to Section 2.5(a) or (b) of this Agreement shall be an express third party beneficiary under this Agreement with respect to Section 2.5 of this Agreement.

3.9 No Consequential Damages . No party to this Agreement, nor any indemnified party, shall seek or be entitled to incidental, indirect or consequential damages or damages for lost profits in any claim under this Agreement, including but not limited to claims for indemnification (except to the extent such incidental, indirect or consequential damages or damages for lost profits are awarded to any third party).

3.10 Certain Definitions . For purposes of this Agreement:

(a) “ Action ” means any claim, action, suit, audit, assessment, arbitration or inquiry, proceeding or investigation.

(b) “ Advisor’s Knowledge ” shall mean the actual knowledge of Glade M. Knight .

(c) “ Affiliates ” means any other Person that, directly or indirectly, controls, is controlled by, or is under common control with, such first Person. For purposes of this definition, the term “control” (including the correlative terms “controlling,” “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, as a trustee or executor, by contract, credit agreement or otherwise.

(d) “ Apple Fund’s Knowledge ” shall mean the actual knowledge of any of Glade M. Knight, David S. McKenney, Justin G. Knight, Bryan Peery, Kristian Gathright and David Buckley .

(e) “ Closing Date ” shall mean the date of the closing of the Mergers;

(f) “ Effective Time ” shall have the same meaning as in the Merger Agreement.

(g) “ Governmental Entity ” shall mean any governmental body, whether federal, state, local, municipal, foreign or other government, or governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official or entity and any court or other tribunal), any self-regulatory organization and any arbitral or similar forum;

(h) “ Person ” shall mean an individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization or other entity;

(i) “ Subsidiary ” of a Person shall mean any corporation, partnership, limited liability company, joint venture or other legal entity of which such Person (either directly or

through or together with another Subsidiary) owns any capital stock or other equity interests of such entity;

(j) “ Special Committee ” shall have the same meaning as in the Merger Agreement; and

(k) “ Transfer Time ” shall mean the time the assignments and other actions contemplated by Sections 1.1, 1.3, and 1.4 shall become effective, which time shall be on the Closing Date immediately following the Effective Time (as defined in the Merger Agreement).

3.11 Amendments and Waivers . This Agreement may not be amended except by an instrument in writing signed by each of the parties hereto and, with respect to Apple Nine, with the prior approval of the Special Committee thereof (prior to the Effective Time) or a majority of the non-management directors of the board of directors thereof (after the Effective Time). No failure or delay of any party hereto in exercising any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the parties hereto hereunder are cumulative and are not exclusive of any rights or remedies which they would otherwise have hereunder. Any agreement on the part of a party hereto to any such waiver shall be valid only if set forth in a written instrument executed and delivered by such party.

[Remainder of page intentionally left blank.]

IN WITNESS WHEREOF , Apple Fund, Advisors and Apple Nine have caused this Agreement to be signed by their respective officers thereunto duly authorized, all as of the date first written above.

APPLE FUND MANAGEMENT, LLC

By: /s/ Justin G. Knight ______________

Name: Justin G. Knight

Title: Manager

APPLE NINE ADVISORS, INC.

By: /s/ Glade M. Knight ______________

Name: Glade M. Knight

Title: President

APPLE REIT NINE, INC.

By: /s/ Justin G. Knight ______________

Name: Justin G. Knight

Title: President

Signature Page to Assignment and Transfer Agreement

Schedule 2.3(f)

Apple Fund Benefit Plans

1.	Group Benefit Insurance Plan from the Unum Life Insurance Company of America for Short Term Disability, Long Term Disability, Life and Accidental Death and Dismemberment for Apple Fund Management, LLC.

2.	Dental Plan from Anthem Blue Cross and Blue Shield for Apple Fund Management, LLC.

3.	Group Medical and Hospital Services Agreement from Southern Health Services, Inc. for Apple Fund Management, LLC.

4.	Health Savings Account Administration for Apple Fund Management, LLC from Health Savings Administrators LLC.

5.	Apple Fund Management, LLC Profit Sharing Plan administered by Employee Fiduciary Corporation and investment advisors by Mid Atlantic Management Inc. (401(k) Plan)

6. Employee Benefits in Team Member Handbook:

·	Hotel Discounts

·	Internet Allowance

Vacation

·	Sick Leave

·	Personal Days

·	Volunteer Service Hours

·	Holiday Time Off

·	Continuation Health Care (COBRA) Coverage

·	529 Plan – Virginia College Savings Plan

·	Section 125 Cafeteria Plan

·	Flexible Spending Accounts (FSA’s)

·	Workers Compensation Insurance

·	Employee Assistance Program (EAP) from Reliance Standard

·	Educational Opportunities and Educational Reimbursement

·	Industry Related Classes/Seminars

·	Industry Participation (in trade and professional associations)

·	Leaves of Absence including Military Leave, Family and Medical Leave, Personal Leave, Jury Duty/Serving as a Witness, Bereavement Leave and Workers Compensation Leave

7. Bonus Program

8.	Vision insurance from Eye Med Vision Care LLC for Apple Fund Management, LLC.

9.	Flexible benefit administration by Benefit Solutions, Inc./Your Flex for Apple Fund Management, LLC.

10.	Severance Agreement dated October 16, 2012 between Apple Fund Management LLC and Lisa Little-Adams.

11. Apple Hospitality Two, Inc. Executive Severance Plan dated August 23, 2005.

12. Apple Hospitality Two, Inc. Severance Plan dated August 23, 2005.

13. 2003 Incentive Plan of Apple Hospitality Five, Inc.

14. 2003 Non-Employee Directors Stock Option Plan of Apple Hospitality Five, Inc.

15.	Apple Fund Management, LLC Executive Severance Pay Plan, amended and restated as of January 1, 2009.

16.	Apple Fund Management, LLC Severance Pay Plan, amended and restated as of January 1, 2009.

17.	Apple REIT Six, Inc. 2004 Incentive Plan.

18.	Apple REIT Six, Inc. 2004 Non-Employee Directors Stock Option Plan.

EXHIBIT A

Acknowledgment and Guarantee

For valuable consideration, the sufficiency of which is hereby acknowledged, the undersigned hereby unconditionally and irrevocably guarantees all obligations of Apple Fund Management, LLC, a Virginia limited liability company (“ Apple Fund ”), under Article II of the Assignment and Transfer Agreement (the “ Agreement ”), dated as of October 5, 2007, by and among Apple Fund, Apple Hospitality Five, Inc., a Virginia corporation, and Apple REIT Six, Inc., a Virginia corporation, and, and, solely for the purposes of Articles III, IV and V of the Agreement, Inland American Real Estate Trust, Inc., a Maryland corporation, and Apple Six Advisors, Inc., a Virginia corporation. The undersigned hereby expressly waives any right to contest, notice, presentment or any other equitable or legal defense other than the satisfaction of Apple Fund’s obligations guaranteed hereby.

APPLE REIT NINE, INC.

By:

Name:

Title:

EXHIBIT B

Acknowledgment and Guarantee

For valuable consideration, the sufficiency of which is hereby acknowledged, the undersigned hereby unconditionally and irrevocably guarantees all obligations of Apple Fund Management, LLC, a Virginia limited liability company (“ Apple Fund ”), and Apple Nine Advisors, Inc., a Virginia corporation (“ Apple Nine Advisors ”), under the Assignment and Transfer Agreement (the “ Agreement ”), dated as of November 29, 2012, by and among Apple Fund and Apple REIT Six, Inc., a Virginia corporation, Apple Nine Advisors, and, solely with respect to Sections 2.2 and 2.6 of the Agreement, Apple Seven Advisors, Inc., Apple Eight Advisors, Inc. and Apple Ten Advisors, Inc. The undersigned hereby expressly waives any right to contest, notice, presentment or any other equitable or legal defense other than the satisfaction of Apple Fund’s and Apple Nine Advisors’ obligations guaranteed hereby.

APPLE REIT NINE, INC.

By:

Name:

Title:

Exhibit 99.9



FOR IMMEDIATE RELEASE August 8, 2013		For information contact: Kelly C. Clarke (804) 727-6321

Apple REIT Seven, Apple REIT Eight and Apple REIT Nine

Sign a Definitive Merger Agreement

RICHMOND, VA, August 8, 2013 – Apple REIT Seven, Inc. (“Apple Seven”), Apple REIT Eight, Inc. (“Apple Eight”) and Apple REIT Nine, Inc. (“Apple Nine,” and together with Apple Seven and Apple Eight, the “Companies,” or individually, a “Company”), each of which is a real estate investment trust (REIT), announced today that they have entered into a definitive merger agreement pursuant to which Apple Seven and Apple Eight will combine with Apple Nine in two merger transactions. The Board of Directors of each Company unanimously approved the merger agreement based on the unanimous recommendation of its special committee of two non-management directors that considered the transaction.

In addition to certain customary closing conditions including the filing of a Registration Statement on Form S-4, the merger agreement is subject to the approval by the shareholders of each Company. The Companies will provide additional information in a joint proxy statement/prospectus relating to the proposed transaction. The Companies anticipate that the joint proxy statement/prospectus will be distributed to shareholders during the fourth quarter of 2013 and do not expect to comment further until that time. Each merger is conditioned on the concurrent consummation of the other merger. As a result, there can be no assurance that the mergers will occur.

If the required shareholder approvals are received, in the mergers, each issued and outstanding Unit (Common Share and related Series A Preferred Share) of Apple Seven will be converted into the right to receive one Apple Nine Common Share, and each issued and outstanding Unit of Apple Eight will be converted into the right to receive 0.85 Apple Nine Common Shares. The current outstanding Apple Nine Common Shares will remain outstanding.

If the transaction is approved, Apple Nine will become self-advised and each Company will terminate its advisory arrangements with its advisors. Therefore, in accordance with the conversion formula set forth in the Apple Seven, Apple Eight and Apple Nine articles of incorporation, and pursuant to provisions of the merger agreement, each outstanding Apple Seven, Apple Eight and Apple Nine Series B Convertible Preferred Share will convert into Apple Nine Common Shares and all Series A Preferred and Series B Shares of the Companies will terminate in connection with the mergers.

Glade M. Knight, Chairman and Chief Executive Officer of each of the Companies, said, “Today I am proud to announce the proposal to combine Apple Seven, Apple Eight and Apple Nine. If approved by our shareholders, the combined company will be one of the largest hospitality REITs in the U.S. with 191 hotels with 23,711 guestrooms in 33 states. Due to the increased size and scale of the combined company, we believe that it will be better positioned to pursue enhanced avenues of liquidity for our shareholders through the exploration of certain strategic alternatives such as possibly listing the combined company on an exchange, a sale of the combined company or a merger with a third party company and to have access to more attractive financing. I would like to thank our teams of advisors in assisting us in developing this merger strategy.”

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McGuireWoods LLP is acting as corporate counsel to each Company in connection with this transaction. Foley & Lardner LLP is acting as legal advisor, and BofA Merrill Lynch is acting as financial advisor, to the Special Committee of the Board of Directors of Apple Seven in connection with this transaction. Kaufman & Canoles, P.C. is acting as legal advisor, and KeyBanc Capital Markets Inc. is acting as financial advisor, to the Special Committee of the Board of Directors of Apple Eight in connection with this transaction. Hogan Lovells US LLP is acting as legal advisor, and Citigroup Global Markets Inc. is acting as financial advisor, to the Special Committee of the Board of Directors of Apple Nine in connection with this transaction.

About Apple REIT Seven, Inc., Apple REIT Eight, Inc. and Apple REIT Nine, Inc.:

Apple REIT Seven, Apple REIT Eight and Apple REIT Nine are REIT’s focused on the ownership of hotels that generate attractive returns for our shareholders. The Companies’ hotels operate under the Courtyard ® by Marriott ® , Fairfield Inn ® by Marriott ® , Fairfield Inn & Suites ® by Marriott ® , Renaissance ® Hotels, Residence Inn ® by Marriott ® , SpringHill Suites ® by Marriott ® , TownePlace Suites ® by Marriott ® , Marriott ® Hotels & Resorts, Embassy Suites Hotels ® , Home2 Suites by Hilton ® , Homewood Suites by Hilton ® , Hilton ® , Hilton Garden Inn ® , Hampton Inn ® , and Hampton Inn & Suites ® brands. The Apple REIT Seven portfolio consists of 51 hotels, containing a total of 6,426 guestrooms in 18 states. The Apple REIT Eight portfolio consists of 51 hotels, containing a total of 5,914 guestrooms in 19 states. The Apple REIT Nine portfolio consists of 89 hotels, containing a total of 11,371 guestrooms in 27 states. Additional information about the Companies can be found online at www.applereitseven.com , www.applereiteight.com and www.applereitnine.com.

F orward Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements generally can be identified by use of statements that include phrases such as “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “foresee,” “looking ahead,” “is confident,” “should be,” “will,” “predicted,” “likely,” or other words or phrases of similar import. Such statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of any Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to, the ability of any Company to obtain required shareholder or other third-party approvals required to consummate the proposed mergers; the satisfaction or waiver of other conditions in the merger agreement; a material adverse effect on any Company; the outcome of any legal proceedings that may be instituted against any Company and others related to the merger agreement; the ability of any Company to implement its operating strategy; any Company’s ability to manage planned growth; the outcome of current and future litigation and regulatory proceedings or inquiries; changes in economic cycles; and competition within the hotel industry. Although each Company believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore there can be no assurance that such statements included in this press release will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by any Company or any other person that the results or conditions described in such statements or the objectives and plans of any Company will be achieved. In addition, each Company’s qualification as a real estate investment trust involves the application of highly technical and complex provisions of the Internal Revenue Code. Certain factors that could cause actual results to differ materially from these forward-looking statements are listed from time to time in each Company’s SEC reports, including, but not limited to, in the section entitled “Item 1A. Risk Factors” in the Annual Report on Form 10-K filed by Apple Seven with the SEC on March 6, 2013 and the Annual Reports on Form 10-K filed by Apple Eight and Apple Nine, respectively, with the SEC on March 7, 2013. Any forward-looking statement speaks only as of the date of this press release and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new developments or otherwise.

Additional Information about the Mergers and Where to Find It

In connection with the proposed mergers whereby Apple Nine will acquire all of the outstanding shares of each of Apple Seven and Apple Eight, the Companies intend to file relevant materials with the Securities and Exchange Commission, including a registration statement on Form S-4 that will contain a joint proxy statement/prospectus. BEFORE MAKING ANY VOTING OR INVESTMENT DECISIONS, INVESTORS AND SECURITY HOLDERS OF EACH COMPANY

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ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND ALL OTHER MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT EACH COMPANY AND THE MERGERS. The registration statement, the joint proxy statement/prospectus and other materials (when they become available) containing information about the proposed transaction, and any other documents filed by any Company with the SEC, may be obtained free of charge at the SEC’s web site at www.sec.gov. In addition, investors and security holders may obtain free copies of the documents filed with the SEC by each Company by directing a written request to Apple REIT Seven, Inc., Apple REIT Eight, Inc. or Apple REIT Nine, Inc., respectively, at 814 East Main Street, Richmond, Virginia 23219, Attention: Investor Relations.

Each Company and its executive officers and directors may be deemed to be participants in the solicitation of proxies from the security holders of that Company in connection with the mergers. Information about the executive officers and directors of each Company and its ownership of securities in that Company is set forth in the proxy statement for that Company’s 2013 Annual Meeting of Shareholders, which (for each of Apple Seven, Apple Eight and Apple Nine) was filed with the SEC on April 9, 2013. Investors and security holders may obtain additional information regarding the direct and indirect interests of any Company and its executive officers and directors in the mergers by reading the proxy statement/prospectus regarding the mergers when it becomes available.

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