10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

(Mark One)
þ	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended December 31, 2004
or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from           to

Commission file number 001-11975

Boykin Lodging Company

(Exact Name of Registrant as Specified in Its Charter)

Ohio	34-1824586
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
Guildhall Building, Suite 1500, 45 W. Prospect Avenue, Cleveland, Ohio (Address of Principal Executive Office)	44115 (Zip Code)

(216) 430-1200

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Class	Name of Exchange on Which Registered
Common Shares, without Par Value	New York Stock Exchange
Depositary Shares, each representing1/10 of a share of 101/2% Class A Cumulative Preferred Shares, Series 2002-A, without par value	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

None

          Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes þ          No o

          Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

          Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).     Yes þ          No o

          The aggregate market value of the voting shares held by non-affiliates of the registrant as of June 30, 2004 was approximately $131 million. The aggregate market value was calculated by using the closing price of the shares as of that date, on the New York Stock Exchange.

          As of March 2, 2005, the registrant had 17,534,081 common shares issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE:

          Portions of the Definitive Proxy Statement for the Annual Meeting of Shareholders to be held May 24, 2005 are incorporated by reference into Part III, Items 10, 11, 12, 13 and 14 of this report.

TABLE OF CONTENTS

PART I
	Item 1. Business
	Item 3. Legal Proceedings
	Item 4. Submission of Matters to a Vote of Security Holders
PART II
	Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities
	Item 6. Selected Financial Data
	Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 7A. Quantitative and Qualitative Disclosures About Market Risk
	Item 8. Consolidated Financial Statements and Supplemental Data
	Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
	Item 9A. Controls and Procedures
	Item 9B. Other Information
PART III
	Item 10. Directors and Executive Officers of the Registrant
	Item 11. Executive Compensation
	Item 12. Security Ownership of Certain Beneficial Owners and Management
	Item 13. Certain Relationships and Related Transactions
	Item 14. Principal Accounting Fees and Services
PART IV
	Item 15. Exhibits, Financial Statement Schedules
INDEX TO FINANCIAL STATEMENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
SIGNATURES
EXHIBIT INDEX
EX-10.22 HOTEL PURCHASE & SALE AGREEMENT
EX-10.23 MODIFICATION LETTER
EX-10.24 MODIFICATION OF EMPLOYMENT AGREEMENT
EX-12 COMPUTATION OF RATIOS
EX-21 SUBSIDIARIES OF THE REGISTRANT
EX-23.1 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCT FIRM
EX-23.2 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCT FIRM
EX-31.1 302 CERTIFICATION CEO
EX-31.2 302 CERTIFICATION CFO
EX-32.1 906 CERTIFICATION CEO
EX-32.2 906 CERTIFICATION CFO

FORWARD LOOKING STATEMENTS

This Form 10-K and the documents incorporated by reference herein contain statements that constitute forward-looking statements. Those statements appear in a number of places in this Form 10-K and the documents incorporated by reference herein and include statements regarding our intent, belief or current expectations or those of our directors or officers with respect to:

•  Leasing, management or performance of the hotels;

•  Our plans for expansion, conversion or renovation of the hotels;

•  Adequacy of reserves for renovation and refurbishment;

•  Our financing plans;

•  Our continued qualification as a REIT under applicable tax laws;

•  Our policies and activities regarding investments, acquisitions, dispositions, financings, conflicts of interest and other matters;

•  National and international economic, political or market conditions; and

•  Trends affecting us or any hotel’s financial condition or results of operations.

You can identify the forward-looking statements by their use of forward-looking words, such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “intends,” “plans,” “estimates,” or “anticipates,” or the negative of those words or similar words. You are cautioned that any such forward-looking statement is not a guarantee of future performance and involves risks and uncertainties, and that actual results may differ materially from those in the forward-looking statement as a result of various factors. The factors that could cause actual results to differ materially from those expressed in a forward-looking statement include, among other factors, financial performance, real estate conditions, execution of hotel acquisition or disposition programs, changes in local or national economic conditions and their impact on the occupancy of our hotels, military action, terrorism, hurricanes, changes in interest rates, changes in local or national supply and construction of new hotels, changes in profitability and margins and the financial condition of our operators and lessee and other similar variables.

The information contained in this Form 10-K, in the documents incorporated by reference herein and in Boykin’s periodic filings with the Securities and Exchange Commission also identifies important factors that could cause such differences.

With respect to any such forward-looking statement that includes a statement of its underlying assumptions or bases, we caution that, while we believe such assumptions or bases to be reasonable and have formed them in good faith, assumed facts or bases almost always vary from actual results, and the differences between assumed facts or bases and actual results can be material depending on the circumstances. When, in any forward-looking statement, we or our management express an expectation or belief as to future results, that expectation or belief is expressed in good faith and is believed to have a reasonable basis, but there can be no assurance that the stated expectation or belief will result or be achieved or accomplished.

PART I

Item 1. Business

(a) General Development of Business

About Boykin Lodging Company

Boykin Lodging Company (“Boykin”), an Ohio corporation, is a real estate investment trust (“REIT”) that as of March 11, 2005 owned interests in 24 hotels located throughout the United States. Boykin was formed and completed an initial public offering in 1996 to continue and expand the nearly 40-year history of hotel ownership, acquisition, redevelopment and repositioning activities of its predecessors, Boykin Management Company and its affiliates (the “Boykin Group”). Boykin Hotel Properties, L.P., an Ohio limited partnership (the “Partnership”), is the operating partnership that transacts business and holds the direct and indirect ownership interests in our hotels. As of December 31, 2004, Boykin had an 85.3% ownership interest in, is the sole general partner of and conducts all of its business through the Partnership.

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Business and Growth Strategy

Our primary business objectives are to maximize current returns to our shareholders by increasing cash flow available for distribution and long-term total returns to shareholders through appreciation in value of our common shares. We seek to achieve these objectives through the following key business strategies relating to the ownership and operation of our hotels:

•  Maximizing operating cash flows of our hotels through:

•  Aggressive asset management to maximize revenue and control expenses;

•  Reinvestment in our hotels; and

•  Strategic brand positioning.

•  Identifying opportunities to enhance returns on our hotels by investing in new initiatives such as:

•  Developing ancillary conference centers meeting International Association of Conference Centers (“IACC”) standards within certain of our existing hotels and in newly acquired properties; and

•  Expanding and redeveloping our properties to improve asset performance.

•  Managing our hotel portfolio mix to enhance its potential for growth in RevPAR, meaning room revenue per available room, and operating income by:

•  Identifying key markets with high barriers to entry for future acquisitions;

•  Acquiring upscale commercial and resort hotels located in these key markets;

•  Acquiring assets with repositioning and rebranding opportunities; and

•  Selling assets that we believe have lower long-term growth prospects because of their physical characteristics or market location.

Our management has substantial hotel operating, development, acquisition and transactional experience. Our executives have over 100 years of combined experience in the hotel industry and have directly overseen the acquisition, disposition, recapitalization, development and repositioning of billions of dollars of hotel assets throughout the United States.

Highlights from 2004 and Recent Developments

•  We sold or otherwise divested of five hotels during 2004, generating gross proceeds of $86.4 million. These hotels included the Doubletree Portland Downtown, Marriott’s Hunt Valley Inn, the Holiday Inn Minneapolis West, the Radisson Hotel Mount Laurel and the Ramada Inn Bellevue Center.

•  In late March 2004, we held the grand opening of the White Sand Villas hotel condominium tower at our Pink Shell Beach Resort & Spa (the “Pink Shell”). The sales of all 91 available units were closed by April. The profit realized from this development project was approximately $12.5 million. Additionally, all unit owners have entered into agreements with the resort to put their units back to the resort for use as hotel rooms.

•  Our next condominium hotel project is currently being marketed for sale. This project, Captiva Villas, is the final component to the redevelopment of the Pink Shell. It will contain 43 beach-front units. Similar to White Sand Villas, the units in the new building will be sold as condominiums, with the anticipation that the owners will put their unused room nights back to the resort by contract. Zoning for the new building has been approved. Buildings previously located on the site were demolished in February 2005 and construction of the new building is set to commence once a sufficient level of pre-sales have been achieved.

•  In April 2004, we completed our third ancillary conference center project, located at our Doubletree Portland Lloyd Center hotel. The physical characteristics and the service standards within the facility were designed to meet criteria established by IACC. Upon completion of the project, the facilities were inspected by, and awarded membership to, IACC.

•  In July 2004, the Indiana Gaming Commission (the “Commission”) selected Trump Hotels & Casino Resorts (“Trump”) to develop and operate a casino in French Lick, Indiana. In March 2005, the Commission announced that they would seek a replacement for the Trump group which is attempting to reorganize in bankruptcy court. The Commission has indicated that they intend to move quickly to

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	reinstitute a selection process for a new operator. The other two final applicants to develop and operate the casino have each expressed their intent to make new proposals. The process to choose a new operator could take several months. Once a new operator is chosen, the development and opening of a casino remains subject to many items, including the operator’s ability to raise financing to fund construction of a casino.
•	Five of our hotels were impacted by hurricanes in Florida in August and September. Two hotels, the Best Western Fort Myers Island Gateway Hotel and the Radisson Suite Beach Resort – Marco Island, were evacuated for several days, suffered minimal damage and were reopened. The Pink Shell was evacuated for approximately one week. The hurricane damaged the 43 units in the Useppa and Captiva buildings, which were subsequently demolished to make way for the new Captiva Villas building, while the remainder of the resort reopened. At the beginning of September, Hurricane Frances hit the east coast of Florida, where the Melbourne Hilton Oceanfront and the Melbourne Quality Suites are located. Both hotels were evacuated prior to the storm and both hotels remain closed due to the damage from the storm. The hotels in Melbourne are not expected to resume normal operations until late 2005 or early 2006, subject to the availability of labor and materials. We expect that a substantial portion of the costs to repair the properties will be covered under our insurance policies. Additionally, we also maintain business interruption insurance to partially offset the effects of the closure on our operating results.
•	Boykin Chicago, L.L.C., a joint venture between AEW Partners III, L.P., and us, has entered into an agreement to sell Hotel 71 in Chicago, Illinois. The completion of the sale, which is subject to customary closing conditions, is expected to occur during the first quarter of 2005.

(b) Financial Information About Industry Segments

All of Boykin Lodging Company’s operations are in the hotel industry.

(c) Narrative Description of Business

Boykin Lodging Company’s Hotel Portfolio

As of March 11, 2005, our hotel portfolio included 23 full-service and one limited-service hotel, all of which compete in the upscale to moderate price segment of the hospitality market. All but one of our properties are operated by taxable REIT subsidiaries of Boykin. Refer to Item 2(a) “Hotel Properties” for a current listing of our hotels. Also refer to Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for discussion surrounding the results of the hotels’ operations.

Application of Business Strategies

Maximizing Operating Cash Flow

Aggressive Asset Management

We closely monitor revenue generation, including rates, group pacing and yield management, and recommend improvements to managers’ initiatives to improve hotel performance. We also utilize Smith Travel Research reports to evaluate the performance of each of our hotels relative to their competitive set (the hotels in their market that compete for the same business). We work closely with the respective management companies to manage and improve cost control initiatives.

Reinvestment in Hotel Properties

We believe that our regular program of capital improvements at our hotels, including replacement and refurbishment of furniture, fixtures, and equipment, helps maintain and enhance their competitiveness and maximizes their profitability. Consistent with this strategy, we have made significant renovations at several of our hotels in recent years. In 2004, 2003 and 2002 we spent $30.8 million, $25.8 million and $13.5 million, respectively, on renovations, excluding the redevelopment of our Pink Shell Beach Resort & Spa and projects at the Chicago, Illinois and Lyndhurst, New Jersey hotels which are owned by unconsolidated joint ventures. This represented 13%, 11% and 5% of 2004, 2003 and 2002 consolidated hotel revenues, respectively.

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Strategic Brand Positioning

We maximize our market share and revenue by taking advantage of our sales and marketing orientation to identify the most effective branding strategy for each hotel and to further leverage the selected brands with effective direct sales strategies. Factors we consider in determining the most effective branding strategy are:

•  Brand strengths and their current presence in the specific market;

•  Expected contribution to revenues;

•  Expected capital requirements and ongoing costs of the franchise; and

•  Strengthening strategic franchisor relationships.

Our portfolio contains properties that are currently operated under franchise license agreements with premier nationally-recognized hotel chains including, but not limited to, Doubletree®, Marriott®, Radisson®, Hilton®, Embassy Suites®, Holiday Inn®, Hampton Inn® and Quality Suites®. In certain circumstances, we have concluded that operating a hotel independent of a franchise affiliation is the best branding strategy. Such is the case with the French Lick Springs Resort and Spa in French Lick, Indiana, Hotel 71 in Chicago, Illinois, and our Pink Shell Beach Resort & Spa in Ft. Myers Beach, Florida.

Initiatives to Enhance Returns on Hotels

IACC Ancillary Conference Centers

We identified a strategic opportunity to enhance revenues from certain of our hotels by developing ancillary conference centers meeting IACC standards within those hotels. Each conference center is a business unit inside an existing full-service hotel, designed to complement the existing transient and group business.

The conference center strategy is attractive to us because it creates demand for our guest and meeting rooms from a new client base, those who prefer to hold meetings at conference centers that meet IACC standards or who otherwise need the types of services provided at IACC conference centers. IACC requires facilities to meet certain technical standards regarding technology, telecommunications, lighting, sound transmission and other items, which standards appeal particularly to corporate and institutional training programs. Further, the conference center services and pricing are designed on a complete meeting package basis, meaning that the users pay a fixed daily price per person on an all-inclusive basis (rooms, meals, breaks, telephone services, etc.), regardless of utilization, thus making the cost of the services predictable for the planner and the hotel.

The benefit of this pricing structure to us is that we anticipate a higher RevPOR, meaning revenue per occupied room, because these guests purchase meals and other services at the hotel as a part of their packages. Additionally, we expect higher operating margins from this business because predictable utilization of these services results in the achievement of greater operational efficiency.

We currently have such centers at our Berkeley, Omaha and Portland properties.

Property Redevelopment and Expansion

We have undertaken a series of projects at our Pink Shell Beach Resort & Spa in Ft. Myers Beach, Florida to elevate this resort’s position to a four-star level and to take advantage of the opportunity to sell portions of the property while retaining long term cash flow. In 2001, we completed a $2.7 million renovation of the Sanibel View Villas, a 60-unit tower, which we sold as condominium units. The units were sold and all of the owners put their unused room nights back to the resort by contract for use as a hotel room. Therefore, in addition to the cash flow generated from selling the units, we receive continuing income from the units placed in the rental program. During 2002, we demolished and removed cottages to commence construction of a new 92-unit tower, the White Sand Villas. The units within the new tower were also being sold as condominium units with the prospect that the owners would put their unit back to us for use as hotel rooms. The tower opened in March 2004, and similar to Sanibel View, all buyers signed agreements to allow us to use their units as hotel rooms. The final stage of the redevelopment of the property, the Captiva Villas, is currently in the marketing phase. Two low-rise buildings at the property were demolished during the first quarter of 2005 and are expected to be replaced with a new 43-unit tower called Captiva Villas. Again, the new building will be sold as condominium units with the expectation that the unit owners will put their unused room nights back to the resort for use as hotel rooms.

We are actively exploring the option of converting the Melbourne Quality Suites to a condominium hotel. We are currently in the process of preparing condominium documents and the prospectus and anticipate marketing the

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units beginning in mid-2005. The conversion would be contingent upon the pre-sale of a minimum number of units. Additionally, we may convert other hotels which we own in Florida into condominium hotels.

Managing Our Hotel Portfolio Mix

Acquiring Upscale Commercial and Resort Hotels in Key Markets

Our acquisition criteria focuses on hotels in the upper upscale and upscale segments located in major metropolitan markets and destination beach markets. These markets have historically outperformed other markets because of their high barriers to entry and diversified demand generators. Our current targets include Boston, New York, Washington, D.C. as well as selected beachfront and other resort markets. Our success in implementing this strategy is illustrated by our most recent acquisition, the Radisson Suite Beach Resort on Marco Island, Florida. Prior to Marco Island, our other recent acquisitions included the Meadowlands-Lyndhurst Courtyard by Marriott in the New York City metropolitan area. We continue to identify and evaluate potential acquisition candidates.

Funds for future acquisitions or development of hotels are expected to be derived, in whole or in part, from the proceeds of the sale of non-strategic hotels, from capital obtained from borrowings, from additional issuances of common shares, preferred shares, or other securities, from potential joint venture partners and from cash flows from operations.

Disposing of Assets to Provide Capital for Better Investment Opportunities

We have been selling assets that we believe have lower long-term growth prospects because of physical characteristics or market location. In 2004 we divested five hotels not located within our target markets for total gross proceeds of $86.4 million. Those properties included the Doubletree Portland Downtown, Marriott’s Hunt Valley Inn, the Holiday Inn Minneapolis West, the Radisson Hotel Mount Laurel and the Ramada Inn Bellevue Center.

We intend to maintain a geographically diversified hotel portfolio and may also cluster hotels within certain primary markets in order to take advantage of operational and managerial economies of scale. We will acquire or develop additional hotel properties only as suitable opportunities arise, and will not undertake acquisition or development of properties unless adequate sources of capital and financing are available.

Hotel Managers

In selecting operators, we seek hotel managers with demonstrated full-service hotel expertise, a stable operating and financial performance history and an excellent reputation in the hospitality industry.

As of March 11, 2005, the hotels in our portfolio were managed by the following entities:

	Number
Manager	of Hotels
Boykin Management Company Limited Liability Company (“BMC”)		21
Concord Hospitality Enterprises (“Concord”)		1
Chambers Group		1
Outrigger Lodging Services (“Outrigger”)		1
		24

BMC. Robert W. Boykin (our Chairman of the Board and Chief Executive Officer) and his brother, John E. Boykin, control BMC. BMC has continued the over 40-year hotel operation and management business of the Boykin Group. The Boykin Group has capabilities in all phases of development and management of hotel and resort properties. BMC currently manages 29 hotel properties located throughout the United States, including 21 hotels owned by us. BMC’s subsidiaries include an award-winning hotel interior design business and a hotel and restaurant food, beverage, supply and equipment purchasing business.

BMC and its owners, who have a substantial interest in the Partnership, have interests that conflict with our interests in connection with the structuring and enforcement of the management agreements and other agreements between us and BMC and in connection with activities that may maximize profits for BMC without

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necessarily benefiting us. The following factors align the interests of BMC and its owners with our interests to address these conflicts of interest:

•  BMC’s owners have retained their equity interests in the Partnership;

•  Our corporate charter documents require that our independent directors shall make all determinations to be made on behalf of Boykin Lodging Company with respect to the relationships or opportunities that represent a conflict of interest for any officer or director of Boykin Lodging Company;

•  Any affiliate of the Boykin Group, including Robert W. Boykin and John E. Boykin, will conduct all hotel acquisition, development and ownership activities only through Boykin Lodging Company, other than the acquisition through inheritance of the Miami Hampton Inn by Robert W. Boykin and John E. Boykin, for which the initial development by William J. Boykin, their father, was approved by our Board of Directors;

•  BMC is entitled to receive incentive management fees with respect to certain hotels it manages for us if the hotel operating performance exceeds benchmarks set forth in the terms of each management agreement;

•  A portion of BMC’s corporate-level senior executive team’s compensation is based upon the performance of our hotels; and

•  BMC has a deferred compensation plan for its corporate-level senior executives under which the value of each award is based on, and fluctuates with, the value of our common shares.

Concord. Concord is a privately owned hotel investment and management company based in Raleigh, North Carolina. Concord was formed to acquire, develop and manage both full and limited-service hotel properties. Concord owns and operates hotels under franchise agreements with such franchisors as Marriott®, Radisson®, Hilton®, Residence Inn® and Hampton Inn®.

Chambers Group. Chambers Group is a privately held regional hotel management company based in Seattle, Washington. The Company provides consulting services to the hospitality industry in all aspects of development, financial analysis, and operations. Chambers Group has operated a variety of mid-market hotels in the Northwestern United States.

Outrigger. Outrigger is a privately held hotel management company based in Encino, California. Outrigger has operated or currently operates a full range of hotel products, including Marriott®, Sheraton®, Hilton®, Residence Inn®, Holiday Inn®, Radisson®, and many limited service products. In addition to branded hotels, Outrigger operates upscale boutique hotels.

Terms of the Management Agreements

BMC manages 21 of the 24 hotels that we currently have an ownership interest in. The following is a summary of the material terms of the BMC management agreements (the “Management Agreements”) and is qualified in its entirety by reference to the Form of Management Agreement, which was filed as an exhibit to our Current Report on Form 8-K, filed on January 14, 2002.

The Management Agreements have the material terms described below:

•  Duration/ Termination. As of December 31, 2004, the Management Agreements have remaining terms ranging from one to eight years. We have the right to terminate 19 of the BMC agreements upon 90 days advance written notice without having to pay any damages or a termination fee or penalty.

•  Management Fees. Most of the Management Agreements provide for base and incentive management fees. The Management Agreements have base fees which range from 1.5% to 3% of total revenues. All of the Management Agreements have incentive management fees payable to BMC based upon the applicable hotel reaching specified financial performance standards.

•  Operating and Other Expenses. All of the Management Agreements provide that we are responsible for all operating expenses associated with the hotels. In addition, we are responsible to either pay directly or reimburse the operator for all other expenses relating to the hotel including, without limitation, real estate taxes, insurance premiums and debt service.

•  Indemnification. All of the Management Agreements provide that we will hold the operator harmless from and against all liabilities, losses, claims, damages, costs and expenses that arise from or in connection with (a) the performance of the operator’s services under the agreement, (b) any act or omission (whether

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or not willful, tortious, or negligent) of us or any third party, or (c) any other occurrence related to the hotel, except for events that result from (i) the fraud, willful misconduct or gross negligence of the operator or (ii) the breach by the operator of any provision of the agreement.

•  Events of Default. Events of default include (a) failure to make any payment required by the agreement, (b) failure to observe or perform any term or provision after 30 days’ notice to cure, and (c) failure of either party to perform in accordance with an applicable franchise agreement.

Joint Ventures with Third Party Hotel Operators

We have formed joint ventures with third party operators to align the hotel operator’s economic interests with our economic interests. In one of these joint ventures, the joint venture partner’s right to receive cash flow and equity capital distributions is subordinated to our receipt of specified minimum distributions. In one of the joint ventures, the operator leases the hotel from the joint venture and must maintain a specified net worth to support its lease payment obligations and has pledged its joint venture interest as security for the lease payment obligations. We are permitted to subject any majority-owned joint venture’s hotel to a mortgage or to sell the hotel or its interest in the joint venture without obtaining the affected joint venture partner’s consent.

As of December 31, 2004, we had joint ventures formed with the following companies or their affiliates who operated and/or leased the following hotels:

		Boykin Ownership			JV Ownership
Name of Joint Venture	JV Partner	Percentage			Percentage			Hotel Owned Under Joint Venture
Boykin San Diego, L.L.C	Outrigger(a)		91	%		9	%	Hampton Inn San Diego Airport/ Sea World
BoyCon, L.L.C	Concord		50	%		50	%	Meadowlands-Lyndhurst Courtyard by Marriott

(a)
Outrigger leases the property from the joint venture.

Risk Factors

If any of the following risks occur, our business, financial condition, operating results and cash flows could be materially adversely affected. Additional risks and uncertainties not discussed herein may also impair our operations.

Risks Related to the Hotel Industry

Public reaction to acts of terrorism or military action could affect our cash flow. We are subject to disruptions in the lodging industry that would likely result from terrorist attacks (actual or threatened) or military action affecting the United States. The uncertainty that would result from these events would likely increase the public’s reluctance to travel, which could adversely affect our operations.

Competition, economic conditions and similar factors affecting us and the hotel industry generally could affect our performance. Our hotels are subject to all operating risks common to the hotel industry. These risks include:

•  Competition for guests from other hotels based upon brand affiliations, room rates offered including those via internet wholesalers and distributors, customer service, location and the condition and upkeep of each hotel in general and in relation to other hotels in their local market;

•  Adverse effects of general and local economic conditions;

•  Dependence on demand from business and leisure travelers, which may fluctuate and be seasonal;

•  Increases in energy costs, airline fares, and other expenses related to travel, which may deter travel;

•  Impact of financial difficulties of the airline industry and potential reduction in service on the demand for our hotel rooms and the collectibility of our outstanding receivables from the airlines;

•  Increases in operating costs attributable to inflation and other factors; and

•  Overbuilding in the hotel industry, especially in individual markets.

The need to make unexpected capital expenditures could adversely affect our cash flow. Hotels require ongoing renovations and other capital improvements, including periodic replacement or refurbishment of furniture, fixtures

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and equipment. If necessary capital expenditures exceed expectations, there can be no assurance that sufficient sources of financing will be available to fund such expenditures. We may also acquire hotels in the future that require significant renovation.

Hotel investments are generally illiquid, and we may not be able to sell our hotels when it is economically advantageous to do so. Hotel investments generally cannot be sold quickly. We may not be able to vary our portfolio promptly in accordance with our strategies or in response to economic or other conditions. In addition, provisions of the Internal Revenue Code of 1986, as amended, limit a REIT’s ability to sell its properties in some situations when it may be economically advantageous to do so.

Risks Related to Our Operations

The profitability of our hotels depends on the performance of the hotel management companies. The profitability of our hotels depends largely upon the ability of the management companies to generate revenues at our hotels in excess of their operating expenses. The failure of the management companies to manage the hotels effectively would adversely affect our cash flow received from hotel operations. Before January 1, 2002, our cash flow consisted primarily of lease payments from lessees. Our lessees were legally bound to make minimum lease payments even when such payments exceeded the cash flow from the hotel. Since implementing our taxable REIT subsidiary (“TRS”) structure on January 1, 2002, the responsibility and risks associated with making the minimum lease payments has shifted to lessees owned by the Partnership. Therefore, we have effectively assumed the risks associated with operating shortfalls at our hotels operating under the TRS structure.

Our performance is dependent upon the performance of BMC. BMC currently manages 21 of our hotels. We are therefore dependent to a large degree on the operating performance of BMC. Changes in management at these hotels or at other hotels in the future could result in temporary service disruptions at the affected hotels, which could in turn affect their operating and financial performance.

We are subject to conflicts of interest involving our Chairman and Chief Executive Officer. Our Chairman and Chief Executive Officer, Robert W. Boykin, and his brother, John E. Boykin, own BMC and therefore derive benefits from BMC’s management of 21 of our hotels. Accordingly, Mr. Boykin has and will continue to have conflicts of interest with us. He had conflicts of interest in connection with our January 2002 TRS transaction and in connection with the structuring of the management agreements for the hotels currently managed by BMC. He will have similar conflicts on renewal of those agreements and in connection with future management agreements and other transactions that we may enter into with BMC. Conflicts of interest may also arise in connection with BMC’s management of our hotels. Under certain circumstances, actions taken and decisions made by BMC to maximize its profits will not necessarily benefit us. Additionally, a subsidiary of BMC provides design services to us for a fee and also receives a portion of the fees we pay to an independent purchasing agent. Mr. Boykin may have conflicts of interest with respect to our procurement of design services and capital goods. Additionally, the sale of certain of our hotels may result in different and more adverse tax consequences to Mr. Boykin than would be experienced by Boykin and our public shareholders, and he could seek to influence us not to sell a hotel even though that sale might otherwise be financially advantageous to us and our public shareholders. Our articles of incorporation provide that our independent directors are to make all determinations to be made on our behalf with respect to the relationships or opportunities that represent a conflict of interest for any of our officers or directors.

The covenants in our credit agreements may restrict our range of operating activities, and we are subject to refinancing risks. We have a senior secured credit facility that enables us to borrow up to $60.0 million based upon borrowing base availability and term loans with original balances of $130.0 million and $108.0 million, respectively, each of which is secured by certain of our hotel properties. Our secured credit facility requires us, among other things, to maintain a minimum net worth, a coverage ratio of EBITDA to debt service, a coverage ratio of EBITDA to debt service and fixed charges, and a maximum leverage ratio, and places limitations on our common share distributions and acquisitions. There is no assurance that we will be able to continue to meet the financial covenants of the secured credit facility. In addition, our secured loans limit our ability to sell certain hotel properties. These credit arrangements may limit our ability to sell certain hotels whose disposition might be desirable for strategic or financial purposes. The initial term of the $108.0 million term loan expired in July 2003; however, management utilized both of the two one-year extension options available under the terms of the agreement, therefore the current maturity date is July 2005.

There can be no assurance that we will be able to renew our credit arrangements upon maturity on favorable terms or at all. Further, if we are unable to make payments on or to refinance indebtedness secured by our properties, the properties could be foreclosed upon with a consequent loss to us of income and asset value.

8

A portion of our borrowings bear interest at a variable rate, as may other indebtedness we incur in the future. Accordingly, increases in market interest rates could increase our debt service requirements, which could adversely affect our cash flow.

We are subject to risks associated with development, redevelopment and acquisitions of hotels. New and continued development projects and hotel acquisitions are subject to a number of risks, including:

•  the availability of acceptable financing;

•  competition with other entities for investment opportunities;

•  acquired properties’ failure to achieve anticipated operating results;

•  construction costs of a property exceeding original estimates;

•  delays in construction and renovation projects;

•  overruns with respect to the cost of improvements to bring acquired properties to the requisite standards; and

•  the expenditure of funds on, and the devotion of management time to, transactions that may not come to fruition.

We are subject to the risks associated with investments through joint ventures. One of our consolidated hotels is owned by a joint venture in which we have a controlling interest. We may enter into similar joint ventures in the future. Any joint venture investment involves risks such as the possibility that the co-venturer may seek relief under federal or state insolvency laws, or have economic or business interests or goals that are inconsistent with our business interests or goals. While the bankruptcy or insolvency of our co-venturer generally should not disrupt the operations of the joint venture, we could be forced to purchase the co-venturer’s interest in the joint venture or the interest could be sold to a third party. Additionally, we have joint ventures in which we have non-controlling interests and we may enter into similar joint ventures in the future. If we do not have control over a joint venture, the value of our investment may be affected adversely by a third party that may have different goals and capabilities than ours. It may also be difficult for us to exit a joint venture that we do not control after an impasse. In addition, a joint venture partner may be unable to meet its economic or other obligations and we may be required to or find it necessary to fulfill those obligations.

Obligations imposed by our franchise agreements could affect us adversely. Most of our hotels are subject to franchise or license agreements. The continuation of a franchise or license agreement is generally subject to specified operating standards. Action or inaction on our part or by any of our hotel managers could result in our failure to meet those standards, which could result in the loss of the franchise. A franchisor also could condition the continuation of a franchise on the completion of capital improvements that we determine are too expensive or otherwise unwarranted in light of general economic conditions or the operating results or prospects of the affected hotel. In that event, we may elect to allow the franchise agreement to lapse. In any case, the loss of a franchise agreement could have a material adverse effect upon the operations or the underlying value of the hotel covered by the agreement because of the loss of associated name recognition, marketing support and centralized reservation systems provided by the franchisor, or because of penalties payable upon early termination of the agreement. Additionally, the franchise agreements may place restrictions on the transfer or sale of assets or make such transfers or sales economically infeasible.

Our insurance may not be adequate to cover certain risks. We continue to carry comprehensive liability, fire, flood, earthquake, terrorism and business interruption policies that insure us against losses within policy specification and insurance limits that we believe are reasonable. There are certain types of risks, generally of a catastrophic nature, that may be uninsurable or are not economically insurable or certain coverages that we currently carry may become uneconomical or unavailable in the future. Should an uninsured loss or a loss in excess of insured limits occur, we could lose our investment in the affected hotel as well as the anticipated future cash flow from that hotel, while remaining obligated for any mortgage indebtedness or other financial obligations related to that hotel.

The costs of complying with laws and regulations could adversely affect our cash flow. Our hotels must comply with Title III of the Americans with Disabilities Act (the “ADA”) to the extent that they are “public accommodations” or “commercial facilities” as defined in the ADA. Noncompliance with the ADA could result in the imposition of fines or an award of damages to private litigants. If changes in these laws involve substantial expenditures or must be made on an accelerated basis, our cash flow could be adversely affected.

9

Under various federal, state and local laws, an owner or operator of real estate may be liable for the costs of removal or remediation of certain hazardous or toxic substances on, under, or in the property. This liability may be imposed without regard to whether the owner or operator knew of, or was responsible for, the presence of the substances. Other laws impose on owners and operators certain requirements regarding conditions and activities that may affect human health or the environment. Failure to comply with applicable requirements could complicate our ability to operate or sell an affected property and could subject us to monetary penalties, costs required to achieve compliance and potential liability to third parties. We may be potentially liable for such costs or claims in connection with the ownership and operation of our current hotels and hotels we may acquire in the future. We have not been notified by any governmental authority of, nor are we aware of, any material noncompliance, liability or claim relating to hazardous or toxic substances or other environmental matters in connection with any of our hotels. Nonetheless, it is possible that material environmental contamination or conditions exist, or could arise in the future, in the hotels or on the land upon which they are located.

We have and will continue to incur additional costs for systems, staffing and third party services in maintaining compliance with federal laws and regulations addressing corporate governance issues, including the Sarbanes-Oxley Act of 2002, and with the listing requirements of the New York Stock Exchange.

We bear the risk factors common to real estate development as a result of our projects at the Pink Shell Beach Resort & Spa. Common risk factors related to development include, but are not limited to competition from other condominium projects, construction delays due to weather, reliance on contractors and subcontractors, construction cost overruns, the ability of condominium purchasers to secure financing and completion of the development in accordance with our agreements.

Employees

As of March 11, 2005, we had 18 employees. These employees perform, directly or through the Partnership, various acquisition, development, redevelopment and corporate management functions. All persons employed in the daily operations of the hotels are employees of the management companies that the lessees have contracted with to operate the hotels.

Executive Officers of the Registrant

Our executive officers are elected and serve at the discretion of the Board of Directors until their successors are duly chosen and qualified, and are as follows:

Name	Age		Position
Robert W. Boykin		55	Chairman of the Board and Chief Executive Officer
Richard C. Conti		54	President and Chief Operating Officer
Shereen P. Jones		43	Executive Vice President, Chief Financial and Investment Officer
Russ C. Valentine		59	Senior Vice President, Acquisitions
Andrew C. Alexander		41	Senior Vice President and General Counsel

The following is a biographical summary of the business experience of our executive officers.

Robert W. Boykin has served as our Chief Executive Officer since our formation. He served as the President and Chief Executive Officer of Boykin Management Company from 1985 until November 1996. He served as Boykin Management Company’s Executive Vice President from 1981 until 1985.

Richard C. Conti has served as our Chief Operating Officer since May 1998. In January 2001, Mr. Conti was promoted to President and Chief Operating Officer. Prior to joining us, Mr. Conti was a Principal and Director with Coopers & Lybrand L.L.P. Mr. Conti was responsible for Coopers & Lybrand L.L.P.’s hospitality consulting practice in the Midwest and has been involved in the hospitality industry for over 25 years. Mr. Conti has worked closely with many of the leaders in the industry and brings significant industry knowledge and contacts.

Shereen P. Jones has served as our Executive Vice President, Chief Financial and Investment Officer since February 2002. She also serves as our Treasurer. Prior to joining Boykin, she was with Credit Suisse First Boston in New York where she was Director and Global Head of Hospitality Investment Banking, spearheading the development of its lodging investment banking practice. Previously, she spent seven years with Lehman Brothers, serving most recently as Senior Vice President and head of its Real Estate, Lodging and Gaming Mergers &

10

Acquisitions practice. Prior to joining Lehman, she was Vice President, Corporate Finance, for Oppenheimer & Co. and Kidder, Peabody & Co.

Russ C. Valentine joined us in June 1999 as our Senior Vice President, Acquisitions. Prior to joining us, Mr. Valentine served as Senior Vice President of Acquisitions for American General Hospitality, a real estate investment trust that was based in Dallas, Texas. Mr. Valentine played a significant role in American General’s successful acquisition program from 1990 to 1998. For over 25 years, Mr. Valentine has worked for major consulting, investment banking, and hotel organizations.

Andrew C. Alexander became our Vice President-Corporate Counsel in July 1997 and was promoted to Senior Vice President and General Counsel in June 1999. From July 1995 until July 1997, Mr. Alexander served as Vice President-Corporate Counsel of Renaissance Hotel Group, N.V., a publicly traded hotel company. From September 1989 until July 1995, Mr. Alexander was an attorney at the law firm of Calfee, Halter & Griswold, LLP.

There are no arrangements or understandings known to us between any executive officer and any other person pursuant to which any executive officer was elected to office. There is no family relationship between any of our directors or executive officers and any other director or executive officer.

Corporate Governance

We believe that the composition, structure and performance of our Board of Directors provide us a strong corporate governance function and the partnership interest and share ownership of our officers and directors serve to align the interests of our management with our shareholders’ interests. In addition, the terms of our arrangements with BMC serve to minimize conflicts of interest and to align the interests of BMC with the interests of Boykin and its shareholders.

Our articles of incorporation and corporate governance guidelines require that a majority of our directors be independent. Under the New York Stock Exchange’s listing standards, a majority of our Board qualifies as independent. Our articles of incorporation also require that any determination to be made by our Board in connection with any matter presenting a conflict of interest for any officer of Boykin, or for any Boykin director who is not an independent director, be made by our independent directors.

We have made available on our website at www.boykinlodging.com copies of the charters of the audit, compensation and corporate governance and nominating committees of the Board of Directors, our code of ethics and our corporate governance guidelines. Copies of these documents are available in print to any shareholder who requests them. Requests should be sent to Boykin Lodging Company, Guildhall Building, Suite 1500, 45 W. Prospect Avenue, Cleveland, Ohio, 44115, Attn: Investor Relations.

(d) Financial Information About Foreign and Domestic Operations and Export Sales

All of our operations are conducted in the United States.

(e) Available Information

We maintain a website at www.boykinlodging.com. We make available free of charge on our website our filings with the Securities and Exchange Commission, including our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities and Exchange Act of 1934, as amended, as soon as reasonably practicable after we electronically file such material with the Securities and Exchange Commission.

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Item 2. Properties

(a) Hotel Properties

As of March 11, 2005, we own interests in the following 24 hotel properties:

	Number
Property	of Rooms		Location
Doubletree Portland, Lloyd Center		476	Portland, OR
Doubletree Sacramento		448	Sacramento, CA
Doubletree Omaha Downtown		414	Omaha, NE
Doubletree Kansas City		388	Kansas City, MO
Doubletree Hotel & Executive Meeting Center – Berkeley Marina		369	Berkeley, CA
Doubletree Boise Riverside		304	Boise, ID
Doubletree Colorado Springs		299	Colorado Springs, CO
Doubletree San Antonio		290	San Antonio, TX
Cleveland Airport Marriott		375	Cleveland, OH
Buffalo Marriott		356	Buffalo, NY
Columbus North Marriott		300	Columbus, OH
Meadowlands-Lyndhurst Courtyard by Marriott		227	Lyndhurst, NJ
High Point Radisson		251	High Point, NC
Radisson Suite Beach Resort – Marco Island		233	Marco Island, FL
Holiday Inn Crabtree		176	Raleigh, NC
Embassy Suites Southfield		239	Southfield, MI
Hampton Inn San Diego Airport/ Sea World		199	San Diego, CA
Melbourne Hilton Oceanfront		118	Melbourne, FL
Clarion Hotel & Conference Center		208	Yakima, WA
Melbourne Quality Suites		208	Melbourne, FL
French Lick Springs Resort and Spa		485	French Lick, IN
Hotel 71		454	Chicago, IL
Pink Shell Beach Resort & Spa		192	Fort Myers, FL
Best Western Fort Myers Island Gateway Hotel		157	Fort Myers, FL
		7,166

(b) Office Space

Pursuant to a shared services and office space agreement, we were reimbursed approximately $12,100 per month in 2004 from BMC and its subsidiaries for the right to use certain office space located in Cleveland, Ohio and receive certain related services.

Item 3. Legal Proceedings

We are subject to various legal proceedings and claims that arise in the ordinary course of business. In our opinion, the amount of any ultimate liability with respect to these actions will not materially affect our financial statements.

Item 4. Submission of Matters to a Vote of Security Holders

There were no matters submitted to a vote of security holders during the fourth quarter of the fiscal year covered by this Annual Report on Form 10-K.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities

(a) Market Information

Our common shares are traded on the New York Stock Exchange under the symbol “BOY.” The following table sets forth for the indicated periods the high and low sales prices for the common shares and the cash distributions declared per share:

		Price Range				Cash Distributions
		High		Low		Declared Per Share
Year Ended December 31, 2003:
	First Quarter	$	9.42	$	6.65	$	.18
	Second Quarter	$	8.58	$	7.03		—
	Third Quarter	$	8.47	$	7.44		—
	Fourth Quarter	$	9.53	$	7.82		—
Year Ended December 31, 2004:
	First Quarter	$	9.86	$	9.03		—
	Second Quarter	$	9.52	$	7.00		—
	Third Quarter	$	8.74	$	7.38		—
	Fourth Quarter	$	9.19	$	8.17		—

(b) Shareholder Information

As of March 2, 2005, there were 866 record holders of our common shares, including shares held in “street name” by nominees who are record holders, and approximately 8,200 beneficial owners.

In order to comply with certain requirements related to our qualification as a REIT, our charter limits the number of common shares that may be owned by any single person or affiliated group to 9% of the outstanding common shares.

(c) Dividend and Distribution Information

The declaration and payment of future dividends related to our common shares is at the discretion of our Board of Directors and depends on, among other things, our receipt of cash distributions from the Partnership, our results of operations, level of indebtedness and restrictions imposed by our lenders, any contractual restrictions, the annual dividend requirements under the REIT provisions of the Internal Revenue Code, economic conditions and other factors considered relevant by our Board. The level of our cash dividends is determined by the Board of Directors in light of our cash needs, including our requirements for investing and financing activities and other anticipated cash needs.

As a result of the economic downturn in the hotel industry that was exacerbated by the terrorist attacks on September 11, 2001, and its adverse impact on our cash flow from operations, our Board of Directors suspended our fourth-quarter 2001 and first and second-quarter 2002 dividends. In August 2002, our Board of Directors reinstated a dividend on our common shares by declaring a dividend of $0.18 per common share for the third quarter of 2002. Dividends were also declared for the fourth quarter of 2002 and first quarter of 2003 at the same level. The fourth quarter dividend was paid in January and the first quarter dividend was paid in May 2003. No further common share dividends were declared or paid for the remainder of 2003 or in 2004. Based upon the improving performance of the hotels anticipated in 2005, we will continue to review our cash flow and taxable income projections throughout the year and may consider recommending to the Board the reinstatement of a common share dividend during 2005.

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(d) Securities Authorized for Issuance Under Equity Compensation Plans

The following sets forth the securities authorized for issuance under our equity compensation plans as of December 31, 2004:

								Number of securities
								remaining available for
								future issuance under
		Number of securities to			Weighted-average			equity compensation plans
		be issued upon exercise of			exercise price of			(excluding securities
		outstanding options,			outstanding options,			reflected in column (a))
		warrants and rights			warrants and rights
Plan category		(a)			(b)			(c)
Equity compensation plans approved by security holders			839,139	*	$	11.24	**		196,149
Equity compensation plans not approved by security holders			None			None			None
	Total		839,139		$	11.24			196,149

*	Includes 613,006 options which are exercisable as of December 31, 2004.
**	The weighted-average exercise price of the 613,006 exercisable options as of December 31, 2004 is $12.21.

(e) Sales of Unregistered Securities

Not applicable.

(f) Use of Proceeds from Sales of Registered Securities

Not applicable.

(g) Purchases of Equity Securities by the Issuer and Affiliated Purchasers

Not applicable.

Item 6. Selected Financial Data

The following tables set forth selected historical operating and financial data for Boykin Lodging Company.

The following selected financial data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and all of the financial statements and notes thereto included elsewhere in this Form 10-K. The financial data related to 2004, 2003 and 2002 is not directly comparable to the prior years as a result of our implementation of TRS structures in 2002. Subsequent to the transactions, our financial results include the operating results of the hotels under the TRS structure whereas in prior years, only lease revenue was recorded for the properties.

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BOYKIN LODGING COMPANY

SELECTED HISTORICAL OPERATING AND FINANCIAL DATA

(AMOUNTS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)

			Year Ended December 31,
			2004			2003			2002			2001			2000
OPERATING DATA:
		Hotel, lease and other operating revenue	$	212,843		$	194,672		$	205,037		$	57,247		$	67,857
		Revenues from condominium development and unit sales		7,541			36,883			8,715			—			—
		Total revenues		220,384			231,555			213,752			57,247			67,857
		Property taxes, insurance, hotel operations, general and other		183,032			168,430			164,997			14,472			14,152
		Cost of condominium development and unit sales		5,509			24,645			6,474			—			—
		Real estate related depreciation and amortization		24,017			26,085			23,377			22,309			22,781
		Impairment of real estate		—			—			—			13,613			3,600
		Costs associated with termination of leases		—			—			—			14,575			—
		Gain on property insurance recovery		—			—			—			—			(407	)
		Operating income (loss)		7,826			12,395			18,904			(7,722	)		27,731
		Other income		8			39			80			137			410
		Interest income		387			602			126			312			315
		Interest expense		(13,629	)		(14,923	)		(18,068	)		(19,639	)		(22,380	)
		Amortization of deferred financing costs		(1,367	)		(1,906	)		(2,105	)		(1,129	)		(1,146	)
		Minority interest in (earnings) loss of joint ventures and operating partnership		1,738			1,813			847			2,291			(220	)
		Equity in income (loss) of unconsolidated joint ventures		(814	)		(870	)		(2,040	)		589			68
		Income (loss) before gain (loss) on sale/disposal of assets, discontinued operations and cumulative effect of change in accounting principle		(5,851	)		(2,850	)		(2,256	)		(25,161	)		4,778
		Gain (loss) on sale/disposal of assets		3,157			954			(16	)		240			—
		Income (loss) before discontinued operations and cumulative effect of change in accounting principle		(2,694	)		(1,896	)		(2,272	)		(24,921	)		4,778
		Discontinued operations, net of minority interest		2,534			(1,530	)		1,901			(4,276	)		2,952
		Income (loss) before cumulative effect of change in accounting principle		(160	)		(3,426	)		(371	)		(29,197	)		7,730
		Cumulative effect of change in accounting principle, net of minority interest		—			—			—			(373	)		—
		Net income (loss)		(160	)		(3,426	)		(371	)		(29,570	)		7,730
		Preferred dividends		(4,751	)		(4,751	)		(1,109	)		—			—
	Net income (loss) attributable to common shareholders		$	(4,911	)	$	(8,177	)	$	(1,480	)	$	(29,570	)	$	7,730

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			Year Ended December 31,
			2004			2003			2002			2001			2000
EARNINGS PER SHARE:
	Net income (loss) attributable to common shareholders before discontinued operations and cumulative effect of change in accounting principle:
		Basic	$	(0.43	)	$	(0.38	)	$	(0.20	)	$	(1.45	)	$	0.28
		Diluted	$	(0.43	)	$	(0.38	)	$	(0.20	)	$	(1.45	)	$	0.28
	Discontinued operations:
		Basic	$	0.15		$	(0.09	)	$	0.11		$	(0.25	)	$	0.17
		Diluted	$	0.14		$	(0.09	)	$	0.11		$	(0.25	)	$	0.17
	Net income (loss) attributable to common shareholders before cumulative effect of change in accounting principle:
		Basic	$	(0.28	)	$	(0.47	)	$	(0.09	)	$	(1.70	)	$	0.45
		Diluted	$	(0.28	)	$	(0.47	)	$	(0.09	)	$	(1.70	)	$	0.45
	Net income (loss) attributable to common shareholders:
		Basic	$	(0.28	)	$	(0.47	)	$	(0.09	)	$	(1.72	)	$	0.45
		Diluted	$	(0.28	)	$	(0.47	)	$	(0.09	)	$	(1.72	)	$	0.45
	Weighted average number of common shares outstanding:
		Basic		17,426			17,336			17,248			17,176			17,137
		Diluted		17,553			17,470			17,383			17,281			17,305
HISTORICAL BALANCE SHEET DATA:
	Investment in hotel properties, net		$	410,795		$	409,876		$	376,003		$	399,954		$	432,037
	Assets of discontinued operations, net			—			82,784			119,133			122,151			135,156
	Total assets			477,380			591,292			575,531			559,218			600,593
	Total debt			199,985			282,019			241,082			285,226			277,696
	Liabilities of discontinued operations			—			19,772			40,725			36,413			37,086
	Minority interest			10,989			12,462			15,176			16,933			14,709
	Shareholders’ equity			227,448			231,541			240,291			202,646			253,266
OTHER DATA:
	Funds from operations attributable to common shareholders (FFO)(a)(c)		$	9,742		$	18,275		$	25,391		$	(2,635	)	$	35,579
	Earnings before interest, taxes, depreciation and amortization (EBITDA)(b)(c)		$	32,807		$	45,629		$	54,099		$	21,639		$	65,837
	Net cash provided by operating activities		$	42,640		$	2,173		$	39,188		$	34,043		$	43,400
	Net cash provided by (used in) investing activities		$	63,527		$	(23,783	)	$	(11,985	)	$	(14,798	)	$	(23,109	)
	Net cash provided by (used in) financing activities		$	(106,659	)	$	10,170		$	(5,360	)	$	(19,810	)	$	(20,087	)
	Cash dividends declared — common shares			—		$	3,174		$	6,297		$	19,030		$	28,889
	Weighted average number of common shares and units outstanding:
		Basic		20,144			20,055			19,966			18,467			18,428
		Diluted		20,271			20,188			20,101			18,572			18,596

(a) The White Paper on Funds From Operations approved by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”) in April 2002 defines FFO as net income (loss)

16

(computed in accordance with GAAP), excluding gains (or losses) from sales of properties, plus real estate related depreciation and amortization, and after comparable adjustments for our portion of these items related to unconsolidated entities and joint ventures. We believe that FFO is helpful as a measure of the performance of an equity REIT because it provides investors and management with another indication of the Company’s performance prior to deduction of real estate related depreciation and amortization.

We compute FFO in accordance with our interpretation of standards established by NAREIT which may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that interpret the NAREIT definition differently than us. FFO does not represent cash generated from operating activities as determined by GAAP and should not be considered as an alternative to GAAP net income as an indication of our financial performance or to cash flow from operating activities as determined by GAAP as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to make cash distributions.

The following is a reconciliation between net income (loss) and FFO (in thousands):

	2004			2003			2002			2001			2000
Net income (loss)	$	(160	)	$	(3,426	)	$	(371	)	$	(29,570	)	$	7,730
Minority interest		803			(3,319	)		(507	)		(2,999	)		860
Real estate related depreciation and amortization		24,017			26,085			23,377			22,309			22,781
Real estate related depreciation and amortization included in discontinued operations		2,602			5,632			6,797			6,165			7,593
(Gain) loss on sale/disposal of assets		(13,065	)		(1,724	)		16			(240	)		—
(Gain) loss on sale/disposal of assets included in discontinued operations		(15	)		(550	)		2			—			—
Cumulative effect of change in accounting principle		—			—			—			373			—
Gain on property insurance recovery		—			—			—			—			(407	)
Equity in (income) loss of unconsolidated joint ventures		814			870			2,040			(589	)		(68	)
FFO adjustment related to joint ventures		1,016			2,324			(852	)		1,718			(229	)
Preferred dividends declared		(4,751	)		(4,751	)		(1,109	)		—			—
Funds from operations after preferred dividends		11,261			21,141			29,393			(2,833	)		38,260
Less: Funds from operations related to minority interest		1,519			2,866			4,002			(198	)		2,681
Funds from operations attributable to common shareholders	$	9,742		$	18,275		$	25,391		$	(2,635	)	$	35,579

(b)
We believe that EBITDA is helpful to investors and management as a measure of the performance of the Company because it provides an indication of the operating performance of the properties within the portfolio and is not impacted by the capital structure of the REIT.

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The following is a reconciliation between operating income (loss) and EBITDA (in thousands):

			2004			2003		2002			2001			2000
Operating income (loss)			$	7,826		$	12,395	$	18,904		$	(7,722	)	$	27,731
	Other income			8			39		80			137			410
	Interest income			387			602		126			312			315
	Real estate related depreciation and amortization			24,017			26,085		23,377			22,309			22,781
	EBITDA attributable to discontinued operations			(1,959	)		2,783		11,060			3,534			13,354
	Company’s share of EBITDA of unconsolidated joint ventures			2,713			2,667		724			2,784			1,428
	EBITDA applicable to joint venture minority interest			(185	)		1,058		(172	)		285			(182	)
		EBITDA	$	32,807		$	45,629	$	54,099		$	21,639		$	65,837

(c)
Neither FFO nor EBITDA represent cash generated from operating activities as determined by GAAP and neither should be considered as an alternative to GAAP net income as an indication of the Company’s financial performance or to cash flow from operating activities as determined by GAAP as a measure of liquidity, nor is either indicative of funds available to fund cash needs, including the ability to make cash distributions. FFO and EBITDA may include funds that may not be available for the Company’s discretionary use due to functional requirements to conserve funds for capital expenditures and property acquisitions, and other commitments and uncertainties.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

Boykin Lodging Company (“Boykin”), an Ohio corporation, is a real estate investment trust (“REIT”) that was formed and completed an initial public offering in 1996 to continue and expand the nearly 40-year history of hotel ownership, acquisition, redevelopment and repositioning activities of its predecessors, Boykin Management Company and its affiliates. Boykin Hotel Properties, L.P., an Ohio limited partnership (the “Partnership”), is the operating partnership that transacts business and holds the direct and indirect ownership interests in Boykin’s hotels. As of March 2, 2005, Boykin has an 85.4% ownership interest in, is the sole general partner of and does all its business through the Partnership.

Since our initial public offering, we have raised capital through a combination of common and preferred share issuances, various debt financings, capital from strategic joint venture partners and cash flow generated from operations.

At the end of 2004, we owned interests in 24 hotels containing a total of 7,209 guestrooms located in 16 different states. During February 2005, 43 units comprised of the two-low rise buildings at the Pink Shell Beach Resort & Spa were demolished to make way for Captiva Villas. Therefore, as of March 11, 2005, we owned interests in 24 hotels containing 7,166 guestrooms located in 16 different states.

Critical Accounting Policies

The critical accounting policies which we believe are the most significant to fully understand and evaluate our reported financial results include the following:

•  Investment in Hotel Properties – Hotel properties are stated at cost, net of any impairment charges, and are depreciated using the straight-line method over estimated useful lives ranging from ten to 35 years for buildings and improvements and three to 20 years for furniture, fixtures and equipment.

We review our hotel properties for impairment whenever events or changes in circumstances indicate the carrying value of the hotel properties may not be recoverable. Events or circumstances that may cause a review include, but are not limited to, adverse changes in the demand for lodging at the properties due to declining national or local economic conditions, new hotel construction in markets where the hotels are located or changes in the expected holding period of the property. When such conditions exist, management performs an analysis to determine if the estimated undiscounted future cash flows from operations and the proceeds from the ultimate disposition of a hotel property are equal to or exceed its carrying value. If the estimated undiscounted future cash flows are less than the carrying amount of the asset, an adjustment to reduce the carrying amount to the related hotel property’s estimated fair market value is recorded and an impairment loss recognized.

In 2004, we recorded a charge of $4.3 million for the impairment of real estate on the Ramada Inn Bellevue Center due to a change in the intended holding period of the property. In 2003, we recorded a charge of $2.8 million for impairment of real estate on our Holiday Inn Minneapolis West, as a result of a change in management’s intended holding period of the property. Pursuant to the terms of the joint venture which owned the property, over 40% of this charge was allocable to the joint venture’s minority interest partner. There were no charges recorded for impairment of real estate in 2002. As of December 31, 2004, we did not believe that there were any factors or circumstances indicating impairment of any other of our investments in hotel properties.

We estimate the fair market values of our properties through a combination of comparable property sales, replacement cost and cash flow analysis taking into account each property’s expected cash flow generated from operations, holding period and ultimate proceeds from disposition. In projecting the expected cash flows from operations of the asset, we base our estimates on future projected earnings before interest expense, income taxes, depreciation and amortization, or EBITDA, and deduct expected capital expenditure requirements. We then apply growth assumptions to project these amounts over the expected holding period of the asset. Our growth assumptions are based on estimated changes in room rates and expenses and the demand for lodging at our properties, as impacted by local and national economic conditions and estimated or known future new hotel supply. The estimated proceeds from disposition are judgmentally determined based on a combination of anticipated cash flow in the year of disposition, terminal capitalization rate, ratio of selling price to gross hotel revenues and selling price per room.

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If actual conditions differ from those in our assumptions, the actual results of each asset’s future operations and fair market value could be significantly different from the estimated results and value used in our analysis. Our operating results are also subject to the risks set forth under Items 1(c) and 7 of this Form 10-K.

•  Revenue recognition

Hotel revenues – Hotel revenues, including room, food, beverage and other hotel revenues, are recognized as the related services are delivered. Ongoing credit evaluations are performed and an allowance for potential credit losses is provided against the portion of accounts receivable that is estimated to be uncollectible.

Lease revenue – Percentage lease revenue is based upon the room, food and beverage and other revenues of our hotels.

Hotel Condominium revenues–

Percentage of completion – In 2003, we began recognizing revenue related to the White Sand Villas project under the percentage of completion method. Condominium project revenues and expenses are recognized on the percentage of completion method upon satisfaction of the following criteria: (a) construction is determined to be beyond a preliminary stage, (b) the buyer is not entitled to a refund except for nondelivery of the unit, (c) sufficient units are under binding contract to assure the entire property will not revert to rental property, (d) sales prices have been determined to be collectible, and (e) aggregate sales proceeds and costs can be reasonably estimated. In 2003 and 2004, revenue was recognized under percentage of completion accounting as the project had satisfied the criteria outlined above. Percentage of completion accounting involves the use of estimates for the relation of revenues on sold units to total revenues of the project and for total cost of the project. The sales of all of the 91 available units closed in 2004, and the proceeds had been collected; therefore, all project revenues have been recognized as of December 31, 2004. White Sand Villas unit owners contract with the resort to allow their unused room nights to be rented out by the resort as hotel rooms.

Sales of condominium units – During 2001, we completed a renovation of a 60-unit tower at the Pink Shell Beach Resort. These renovated units were sold as Sanibel View Villas Condominiums; the revenue related to the sales was recorded upon closing of the sales. As of December 31, 2003, we had closed on the sale of all 59 of the available units within the tower and all of the unit owners have contracted with us to allow their unused room nights to be rented out as hotel rooms.

The related gross rental income generated by the units put back to the resort by contract is recorded by the resort and included in hotel revenues within the consolidated financial statements. Under the terms of their contracts, a percentage of the gross rental income of each unit is to be remitted to the respective unit owner. The remitted amounts are recorded as expenses within the property taxes, insurance and other line of the consolidated financial statements.

Insurance Recoveries – In 2003, we disposed of certain assets due to water infiltration remediation activities. Property insurance proceeds received in 2003 and 2004 in excess of the net book value of the disposed assets are recorded within the gain (loss) on sale/disposal of assets within the consolidated financial statements. Advances on our business interruption insurance claim related to the period in which the remediation activities occurred are recorded as other hotel revenues within the consolidated financial statements.

Since September 2004, our two hotels located in Melbourne, Florida have been closed due to damage sustained from Hurricane Frances. We have recorded estimated business interruption insurance recoveries in the amount of the loss sustained by the hotels since the storm. These estimates are recorded as other hotel revenues within the consolidated financial statements. Estimated property insurance recoveries have been recorded as gain on sale/disposal of assets within the consolidated financial statements to the extent we experienced a loss on the writeoff of the damaged or destroyed assets.

As other property insurance claims are filed for repair work done at the properties, we record estimated recoveries to offset the costs incurred, less appropriate deductibles.

•  Income Tax Valuation Allowance. Upon the effective date of the establishment of Boykin’s taxable REIT subsidiaries (“TRSs”), the subsidiaries became subject to federal and state income taxes. Boykin’s TRSs

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account for income taxes in accordance with the provisions of SFAS No. 109, “Accounting for Income Taxes.” As of December 31, 2004, Boykin’s TRSs have a deferred tax asset of approximately $10.2 million, prior to any valuation allowance, related to the assumption of the retained deficit of Westboy as well as the operating losses of the TRSs and their subsidiaries. Boykin’s TRSs have recorded a 100% valuation allowance against this asset due to the uncertainty of realization of the deferred tax asset thus no provision or benefit from income taxes is reflected in the accompanying consolidated statements of operations.

Our significant accounting policies are more fully described in Note 2 to Boykin Lodging Company’s Notes to Consolidated Financial Statements included within this Annual Report on Form 10-K.

Financial Condition

December 31, 2004 Compared to December 31, 2003

In accordance with the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” the assets and liabilities of the Doubletree Portland Downtown Hotel, Marriott’s Hunt Valley Inn, the Holiday Inn Minneapolis West, the Radisson Hotel Mount Laurel and the Ramada Inn Bellevue Center as of December 31, 2003 have been classified as discontinued operations in the accompanying financial statements. As such, the only material changes in our financial condition as a result of the disposal of the hotels in 2004 has been the removal of these segregated assets and liabilities and the receipt of the cash in excess of the paydown of the related debt instruments, of which a portion was used to fund restricted cash balances.

As a result of the completion of the White Sand Villas and the closing of the sale of the 91 available units during 2004, outstanding accounts receivable related to the recognition of revenue for the units based upon the percentage of completion method decreased by more than $32.1 million. Release of restricted cash related to deposits made on the pre-sales (approximately $4.7 million at December 31, 2003) and the remaining proceeds from the closing of the sale of the 91 units were used to repay the construction loan related to the project ($13.2 million outstanding as of December 31, 2003) as well as to provide cash for general corporate purposes. Additionally, approximately $7.8 million of payables related to deposits received for pre-sales (whether or not used to fund construction) were released upon closing of the units.

Included in accounts receivable as of December 31, 2004 is $4.7 million of property damage and business interruption insurance recoveries related to the two Melbourne properties closed since Hurricane Frances struck the area in September 2004.

Results of Operations

The operating results of the properties sold in 2004 and 2003 are reflected in the financial statements as discontinued operations for all periods presented.

Results of Operations Year Ended December 31, 2004 Compared to 2003

Total revenues from continuing operations decreased to $220.4 million in 2004 from $231.6 million in 2003.

•  Hotel revenues increased $18.0 million from $192.4 million in 2003 to $210.4 million in 2004 as a result of the following:

•  An increase of $10.8 million related to the inclusion of the hotel revenue of the Marco Island property for a full year in 2004 versus a partial year in 2003, as it was acquired in August 2003;

•  A $3.3 million decrease in revenue contribution from the two Melbourne, Florida properties as a result of their closure after Hurricane Frances struck in early September;

•  The inclusion of approximately $2.3 million of business interruption insurance recoveries within other hotel revenues related to (a) a remediation project at a property which left rooms out of service during 2003 and 2004 and (b) the closure of the two Melbourne properties; and

•  An approximate 3.3% increase in revenue per available room (“RevPAR”) from 2003 for the 18 consolidated hotels which were open and operated under the TRS structure for both full years of 2004 and 2003. The increase in RevPAR was the result of an increase in occupancy levels of 1.9 points combined with a 0.1% increase in the average daily rate.

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•  Revenues from condominium development and unit sales decreased to $7.5 million in 2004 versus $36.9 million in 2003 as a result of the completion of the White Sand Villas development project in 2004 and the completion of sales of Sanibel View Villas units during 2003.

Hotel operating expenses

•  In 2004, we incurred total hotel operating expenses, which include hotel departmental expenses, indirect expenses and management fees, of $159.1 million. The gross operating profit of these hotels for the periods owned and operated under a TRS totaled 24.4% in 2004 versus 24.2% for 2003. The hotels experienced decreases in general and administrative expenses as a percentage of revenues, offset by increases in franchise fees.

Property Taxes, Insurance and Other

•  Total expenses related to property taxes, insurance and other of $15.1 million recorded for 2004 increased $0.6 million over 2003. The increase is primarily due to increased contractual payments to owners of the condominiums at the Pink Shell for use of their units as hotel rooms as a result of the sellout of Sanibel View Villas in 2003 and the completion and sales of the White Sand Villas tower in 2004. All unit owners in each building contractually put their units back to the resort for use as hotel rooms. In addition, a full year of taxes and insurance expenses related to the Marco Island property are recorded in 2004, as opposed to a partial year in 2003.

Corporate general and administrative

•  Total expenses recorded for 2004 were $8.8 million compared with 2003 expenses of $8.1 million primarily as a result of additional staffing and third party services in maintaining compliance with new federal laws and regulations addressing corporate governance issues, including the Sarbanes-Oxley Act of 2002, and with the new listing requirements of the New York Stock Exchange.

Cost of condominium development and unit sales

•  Total expenses recorded for 2004 were $5.5 million compared with $24.6 million in 2003

•  Amounts expensed under the percentage of completion method of accounting for the White Sand Villas totaled $5.5 million during 2004 versus $21.6 million in 2003.

•  2003 costs include $3.0 million related to the sale of 19 Sanibel View Villas units.

Real estate related depreciation and amortization

•  Depreciation and amortization decreased approximately $2.1 million in 2004 from 2003 as a result of:

•  The inclusion of $3.4 million of accelerated depreciation related to pending demolition and removal of two existing buildings at the Pink Shell to make way for the new Captiva Villas in 2003,

•  An additional $0.5 million of depreciation in 2004 related to a full year of ownership of the Marco Island property, and

•  Increases in depreciation related to recent capital expenditures.

Interest expense

•  Interest expense decreased approximately $1.3 million in 2004 from 2003 as a result of:

•  A decrease in the weighted average interest rate due to the expiration of a previously existing swap in 2003 which fixed $83.0 million of our debt at 7.32% during the first six months of 2003; and

•  An approximate 4% decline in our weighted average outstanding debt during 2004. The decline was due to the application of proceeds from property sales to reduce borrowings on the credit facility as well as the scheduled amortization of the $130.0 million term loan.

Amortization of deferred financing costs

•  Amortization of deferred financing costs decreased approximately $0.5 million to $1.4 million in 2004 primarily as a result of the replacement of the previously existing credit facility and a $45.0 million term loan with a new credit facility in October 2003. The new facility had approximately $2.0 million less of deferred costs to be amortized.

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Gain (loss) on sale/disposal of assets

•  Gain on sale/disposal of assets increased to $3.2 million in 2004 from $1.0 million in 2003 primarily as a result of additional property insurance recoveries received.

Discontinued operations

•  Please refer to Note 4 of Boykin Lodging Company’s Notes to Consolidated Financial Statements included within this Annual Report on Form 10-K for a summary of discontinued operations. Discontinued operations reflect the operations of the properties disposed of during 2004 prior to their sale/disposal. Included in 2004 discontinued operations is a $4.3 million impairment charge related to the Ramada Inn Bellevue Center and $2.1 million of minority interest expense related to the joint venture partner as a result of the sale of Marriott’s Hunt Valley Inn. Also included in 2004 discontinued operations is the net gain on sale/disposal of the five properties of $8.4 million.

Based upon the above, 2004 had a net loss attributable to common shareholders of $4.9 million compared to the $8.2 million loss for 2003.

Our FFO for 2004 was $9.7 million compared to $18.3 million in 2003. For a detailed definition of FFO, a reconciliation of net loss to FFO and a discussion of why we believe FFO is a useful measure of a REIT’s financial performance, please see Item 6 “Selected Financial Data.”

Results of Operations Year Ended December 31, 2003 Compared to 2002

Total revenues from continuing operations increased to $231.6 million in 2003 from $213.8 million in 2002.

•  Hotel revenues decreased $10.3 million from $202.7 million in 2002 to $192.4 million in 2003 as a result of the following:

•  Increase of $2.7 million related to the inclusion of the hotel revenue of the Marco Island property subsequent to its acquisition in August 2003; offset by

•  An approximate 5.9% decrease in revenue per available room (“RevPAR”) from 2002 for the 20 consolidated hotels which were operated under the TRS structure for both full years of 2003 and 2002. Comprising the decline in RevPAR was a drop in occupancy levels of 2.8 points combined with a decrease in the average daily rate of approximately 1.6%, primarily as a result of the weak economy.

•  Revenues from condominium development and unit sales increased to $36.9 million in 2003 versus $8.7 million in 2002 as we started recognizing revenue under the percentage of completion method in 2003 related to the White Sand Villas project as certain thresholds regarding number of pre-sales and progress on construction were met. Total revenue recognized in 2003 totaled $32.2 million. Additionally, 2003 revenues include $4.7 million related to the sales of the remaining 19 Sanibel View Villas units whereas in 2002 there were revenues of approximately $8.7 million related to the sales of 40 Sanibel View Villas units.

Hotel operating expenses

•  In 2003, we incurred total hotel operating expenses, which include hotel departmental expenses, indirect expenses and management fees, of $145.8 million. This is related to the costs associated with operating the 21 hotels under the TRS structure for the full year 2003 as well as the expenses related to the Marco Island property subsequent to acquisition. The gross operating profit of these hotels for the periods owned and operated under a TRS totaled 24.2% for 2003 versus 28.1% in 2002. The main drivers for the loss of gross profit margins include increases in payroll and related employee costs and benefits, insurance, food and energy.

Property Taxes, Insurance and Other

•  Total expenses related to property taxes, insurance and other of $14.5 million recorded for 2003 increased $1.6 million over 2002. The addition of Marco Island accounted for $0.3 million of this increase. Additionally, the portfolio experienced an increase in insurance costs.

Corporate general and administrative

•  Total expenses recorded for 2003 were $8.1 million compared with 2002 expenses of $6.4 million as a result of increased legal and professional fees, costs related to the exchange of collateral for the $130.0 million loan and increased directors and officers insurance costs.

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Cost of condominium development and unit sales

•  Total expenses recorded for 2003 were $24.6 million compared with $6.5 million in 2002

•  Due to progress made on the White Sand Villas, amounts expensed under the percentage of completion method of accounting totaled $21.6 million

•  2003 costs include $3.0 million related to the sale of 19 Sanibel View Villas units where in 2002 costs totaled $6.5 million. The decline in cost per unit was due to depreciation taken on the units prior to sale.

Real estate related depreciation and amortization

•  Depreciation and amortization in 2003 of $26.1 million included $3.4 million of accelerated depreciation related to pending demolition and removal of two existing buildings at the Pink Shell to make way for the new Captiva Villas.

•  Depreciation and amortization in 2002 of $23.4 million included $1.7 million of accelerated depreciation related to the demolition and removal of the cottages at the Pink Shell to make way for the new White Sand Villas building.

•  Disregarding these events, the depreciation and amortization for 2003 increased approximately $1.0 million as a result of recent capital expenditures and the acquisition of the Marco Island property in August 2003.

Interest expense

•  Interest expense decreased approximately $3.1 million in 2003 from 2002 as a result of:

•  A significant decrease in the weighted average outstanding balance on our applicable secured credit facilities;

•  Approximately $42.0 million on the previously existing $45.0 million term note was outstanding for just over 9 months during 2003 versus being outstanding at $45.0 million for the first nine months of 2002 and $42.0 million for the remaining months of 2002;

•  An average interest rate decline on the outstanding balance of our $108.0 million term loan of approximately 60 basis points; and

•  A declining outstanding principal balance on our $130.0 million term loan as a result of the loan’s amortization schedule.

Equity in income (loss) of unconsolidated joint ventures

•  Our share of loss related to our unconsolidated joint ventures totaled $0.9 million in 2003 versus $2.0 million in 2002 as both of the hotels we owned and accounted for as unconsolidated joint ventures were in their ramp up periods after major guestroom renovations. The primary driver behind this change relates to our share of the joint venture which owns Hotel 71. The hotel experienced a significant number of room nights out of service related to its renovation in 2002; subsequent to completion, these rooms were back in service and due to the upgrade of the hotel, the property experienced higher average daily room rates. Similarly, the total operating costs of the property increased as a result of the increased number of rooms occupied in 2003 compared with 2002. The depreciation related to Hotel 71 in 2003 increased significantly over 2002 levels as the costs related to the renovation, which were in excess of $20.0 million, began depreciating in late 2002 in conjunction with the completion of the renovation.

Discontinued operations

•  Please refer to Note 4 of Boykin Lodging Company’s Notes to Consolidated Financial Statements included within this Annual Report on Form 10-K for a summary of discontinued operations. Discontinued operations reflect the operations of the properties disposed of during 2003 and 2004 prior to their sale. Included in 2003 discontinued operations is the $2.8 million impairment charge related to the Holiday Inn Minneapolis West and the offsetting $1.2 million of the charge that was allocated to the joint venture partner. Also included in 2003 discontinued operations is the net gain on sale of the five properties of $0.7 million.

Distribution to preferred shareholders

•  Approximately $4.8 million of dividends related to the outstanding preferred depositary shares were declared in 2003; those dividends reduced net income attributable to common shareholders. The preferred

24

shares were issued during the fourth quarter of 2002 and there was approximately one quarter of this amount declared for 2002.

Based upon the above, 2003 had a net loss attributable to common shareholders of $8.2 million compared to the $1.5 million loss for 2002.

Our FFO for 2003 was $18.3 million compared to $25.4 million in 2002. For a detailed definition of FFO, a reconciliation of net loss to FFO and a discussion of why we believe FFO is a useful measure of a REIT’s financial performance, please see Item 6 “Selected Financial Data.”

Liquidity and Capital Resources

Our principal source of cash to meet our cash requirements, including dividends to shareholders, is our share of the Partnership’s cash flow from the operations of the hotels and condominium sales. Cash flow from hotel operations is subject to all operating risks common to the hotel industry, including, but not limited to:

•  Competition for guests from other hotels;

•  Adverse effects of general and local economic conditions;

•  Dependence on demand from business and leisure travelers, which may be seasonal and which may be adversely impacted by health and safety-related concerns;

•  Increases in energy costs, airline fares, and other expenses related to travel, which may deter traveling;

•  Impact of the financial difficulties of the airline industry;

•  Increases in operating costs related to inflation and other factors, including wages, benefits, insurance and energy;

•  Overbuilding in the hotel industry, especially in particular markets; and

•  Actual or threatened acts of terrorism and actions taken against terrorists that cause public concern about travel safety.

The cash flow from condominium development is subject to risk factors common to real estate sales and development, including, but not limited to:

•  Competition from other condominium projects;

•  Construction delays;

•  Reliance on contractors and subcontractors;

•  Construction cost overruns; and

•  The ability of the condominium purchasers to secure financing.

As of December 31, 2004, we had $13.5 million of unrestricted cash and cash equivalents and $13.0 million of restricted cash for the payment of capital expenditures, real estate taxes, interest and insurance. There were outstanding borrowings at year end totaling $193.5 million against our two term notes payable.

We have a $60.0 million credit facility ($6.4 million outstanding as of December 31, 2004) to fund acquisitions of additional hotels, renovations and capital expenditures, and for our working capital needs, subject to limitations contained in the credit agreement. The borrowing base availability under the credit facility was approximately $47.0 million at December 31, 2004.

For information relating to the terms of our credit facility and our term notes, please see Notes 5 and 6, respectively, of the Notes to Consolidated Financial Statements of Boykin Lodging Company included in this Annual Report on Form 10-K.

Our $130.0 million and $108.0 million term notes payable are property-specific mortgages and have only financial reporting covenants. The credit facility contains covenants regarding overall leverage and debt service coverage. As of December 31, 2004, we are in compliance with such covenants.

The remaining balance of the $108.0 million term note matures in July 2005. We anticipate refinancing this obligation by utilizing a combination of increased borrowing availability under the credit facility and proceeds from additional secured debt facilities.

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We may seek to negotiate additional credit facilities, replacement credit facilities, or we may issue debt instruments. Any debt incurred or issued by us may be secured or unsecured, long-term, medium-term or short-term, bear interest at a fixed or variable rate, and be subject to such other terms as the Board of Directors considers prudent. The availability of borrowings under the credit facility is restrained by borrowing base and loan-to-value limits, as well as other financial performance covenants contained in the agreement. There can be no assurance that funds will be available in anticipated amounts from the credit facility.

Currently, we expect to continue to pay a regular quarterly dividend on our preferred shares. The resumption of a common dividend will depend upon the improving performance of our hotels and other factors that our Board of Directors considers relevant.

In 2005, we expect to spend approximately $18.0 million related to capital expenditures at our consolidated hotels, excluding the Pink Shell Beach Resort & Spa project discussed below as well as the restoration of the Melbourne, Florida properties. This amount includes planned refurbishments and replacements at selected existing hotels. We expect to use cash available from operations and restricted capital expenditure reserves, as well as borrowings under our line of credit, to fund our 2005 renovations. Current estimates are that the aggregate cost of the repairs from the damage caused by the hurricanes at our two Melbourne, Florida properties may exceed $30 million.

We expect to commence construction of Captiva Villas at the Pink Shell in mid-2005. We are currently talking to various lenders regarding our financing options for the construction of Captiva Villas.

We have considered our short-term (defined as one-year or less) liquidity needs and the adequacy of our estimated cash flow from operations and other expected liquidity sources to meet these needs. We expect our principal short-term liquidity needs will be to fund normal recurring expenses, debt service requirements, scheduled debt maturities, distributions on the preferred shares and any minimum distribution required to maintain our REIT status. We anticipate that these needs will be met with cash flows provided by operating activities, using availability under the credit facility, proceeds from dispositions of non-core assets and proceeds from additional financings. We also consider capital improvements and property acquisitions as short-term needs that can be funded either with cash flows provided by operating activities, by utilizing availability under our credit facility, or from proceeds from additional financings.

We expect to meet long-term (defined as greater than one year) liquidity requirements such as property acquisitions, scheduled debt maturities, major renovations, development projects and other nonrecurring capital improvements utilizing cash flow from operations, proceeds from dispositions of non-core assets, additional debt financings and preferred or common equity offerings. We expect to acquire or develop additional hotel properties only as suitable opportunities arise, and we will not undertake acquisition or development of properties unless stringent criteria have been met.

Off Balance Sheet Arrangements

We believe that neither Boykin nor its unconsolidated entities have entered into any off balance sheet arrangements which would have a current or future impact on our financial condition, changes in financial condition, results of operations, liquidity or capital resources in ways which would be considered material to our investors.

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Tabular Disclosure of Contractual Obligations

The following is a summary of Boykin’s obligations and commitments as of December 31, 2004, excluding unconsolidated joint ventures (in thousands):

	Payments due by period
			Less than						More than
Contractual Obligations	Total		1 year		1-3 years		3-5 years		5 years
Long-Term Debt Obligations	$	193,539	$	95,010	$	8,614	$	9,922	$	79,993
Capital Lease Obligations	$	0	$	0	$	0	$	0	$	0
Operating Lease Obligations	$	27,080	$	1,793	$	1,639	$	1,060	$	22,588
Purchase Obligations	$	2,763	$	2,206	$	368	$	100	$	89
Other Long-Term Liabilities Reflected on the Registrant’s Balance Sheet under GAAP	$	6,235	$	258	$	253	$	335	$	5,389
Total	$	229,617	$	99,267	$	10,874	$	11,417	$	108,059

In addition to the amounts disclosed above, Boykin and its subsidiaries are subject to various franchise, management, lease and other agreements with parties that have ongoing fees that are contingent upon future results of operations of the hotels in its portfolio as well as a potential for termination fees dependent upon the timing and method of termination of such agreements.

Included in long-term liabilities above are liabilities relating to Boykin Kansas City, LLC. These liabilities were assumed in connection with the acquisition of the Doubletree Kansas City in November of 1997. Please refer to Note 13 of Boykin Lodging Company’s Notes to Consolidated Financial Statements included within this Annual Report on Form 10-K for a discussion of our obligations related to the tax increment financing of the Doubletree Kansas City.

Inflation

Operators of hotels in general can change room rates quickly, but competitive pressures may limit operators’ ability to raise rates to keep pace with inflation.

Our general and administrative costs as well as real estate and personal property taxes, property and casualty insurance and ground rent are subject to inflation.

Seasonality

Our hotels’ operations historically have been seasonal. The five hotels located in Florida experience their highest occupancy in the first quarter, while the remaining hotels maintain high occupancy rates during the second and third quarters. This seasonality pattern can be expected to cause fluctuations in our quarterly operating results and cash flow received from hotel operations.

Competition and Other Economic Factors

Our hotels are located in developed areas that contain other hotel properties. The future occupancy, average daily rate and RevPAR of any hotel could be materially and adversely affected by an increase in the number of or quality of the competitive hotel properties in its market area. Competition could also affect the quality and quantity of future investment opportunities, or our ability to sell existing properties.

As a portion of the lodging industry’s sales are based upon business, commercial and leisure travel, changes in general economic conditions, demographics, or changes in local business economics, could affect these and other travel segments. This may affect demand for rooms, which would affect hotel revenues.

Please refer to Item 1(c) of this Form 10-K for further discussion regarding Competition.

New Accounting Pronouncements

In November 2002, the Financial Accounting Standard Board (“FASB”) issued Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others,” which addresses the disclosure to be made by a guarantor in its interim and annual

27

financial statements about its obligations under guarantees. Interpretation No. 45 also requires the recognition of a liability by a guarantor at the inception of certain guarantees. Interpretation No. 45 requires the guarantor to recognize a liability for the non-contingent component of the guarantee, this is the obligation to stand ready to perform in the event that specified triggering events or conditions occur. The initial measurement of this liability is the fair value of the guarantee at inception. The recognition of the liability is required even if it is not probable that payments will be required under the guarantee or if the guarantee was issued with a premium payment or as part of a transaction with multiple elements. We have adopted the disclosure requirements of Interpretation No. 45 and will apply the recognition and measurement provisions for all guarantees entered into prior to January 1, 2003. There are no guarantees which require recognition under this Interpretation as of December 31, 2004.

In December 2002, the FASB issued Statement No. 148, “Accounting for Stock-Based Compensation-Transition and Disclosure – an amendment of FASB Statement No. 123.” Statement No. 148 amends FASB Statement No. 123, “Accounting for Stock-Based Compensation,” to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, Statement No. 148 amends the disclosure requirements of Statement No. 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. Adoption did not have a material effect on the financial condition or results of operations of Boykin.

In January 2003, the FASB issued Interpretation No. 46, “Consolidation of Variable Interest Entities,” which addresses consolidation by business enterprises of variable interest entities. In general, a variable interest entity is a corporation, partnership, trust, or any other legal structure used for business purposes that either (a) does not have equity investors with voting rights or (b) has equity investors that do not provide sufficient financial resources for the entity to support its activities. Interpretation No. 46 requires a variable interest entity to be consolidated by a company if that company is subject to a majority of the risk of loss from the entity’s activities or is entitled to receive a majority of the entity’s residual returns or both. The consolidation requirements of Interpretation No. 46 apply immediately to variable interest entities created after January 31, 2003 and apply to older entities in the fourth quarter of 2003. In December 2003, the FASB issued a revised Interpretation which modifies and clarifies various aspects of the original Interpretation. We do not believe that we have any unconsolidated variable interest entities as of December 31, 2004.

On April 30, 2003 the FASB issued Statement No. 149 (“SFAS 149”), “Amendment of Statement 133 on Derivative Instruments and Hedging Activities.” SFAS 149 amends and clarifies accounting for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities under Statement 133. In particular, this Statement clarifies under what circumstances a contract with an initial net investment meets the characteristic of a derivative as discussed in Statement 133 and it clarifies when a derivative contains a financing component that warrants special reporting in the statement of cash flows. SFAS 149 is effective for contracts entered into or modified after December 31, 2003 and for hedging relationships designated after December 31, 2003 and is to be applied prospectively. This statement has not had and is not expected to have a material impact on our financial position or results of operations.

In May 2003, the FASB issued Statement No. 150 (“SFAS 150”), “Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity,” which establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability. The effective date of a portion of the Statement has been indefinitely postponed by the FASB. We did not enter into new financial instruments subsequent to May 2003 which would fall within the scope of this statement. This statement has not had and is not expected to have a material impact on our financial position or results of operations.

As of December 31, 2004, Boykin had a Long-Term Incentive Plan (“LTIP”). Boykin has adopted the disclosure only provisions of SFAS No. 123, “Accounting for Stock-Based Compensation,” and applies Accounting Principles Board Opinion No. 25 and related interpretations in accounting for its employee share option plan. If Boykin had elected to recognize compensation costs for the LTIP based on the fair value at the grant dates for option awards consistent with the method prescribed by SFAS No. 123, reported amounts of net loss and net loss per share would have been changed to the pro forma amounts indicated below.

28

(IN THOUSANDS, EXCEPT FOR PER SHARE DATA)

		Year Ended December 31,
		2004			2003
		Pro Forma			Pro Forma
Net loss attributable to common shareholders		$	(4,911	)	$	(8,177	)
Stock-based employee compensation expense			(126	)		(126	)
Proforma net loss attributable to common shareholders		$	(5,037	)	$	(8,303	)
Proforma net loss attributable to common shareholders per share:
	Basic	$	(0.29	)	$	(0.48	)
	Diluted	$	(0.29	)	$	(0.48	)

In December 2004, the FASB issued revised SFAS No. 123 (Statement 123(R)), Share-Based Payment (“SFAS No. 123R”). SFAS No. 123R requires all entities to recognize the fair value of share-based payment awards (stock compensation) classified in equity, unless they are unable to reasonably estimate the fair value of the award. Boykin will adopt the provisions of SFAS No. 123R on July 1, 2005, using the modified prospective approach permitted by the literature. This approach requires that any unvested portion of options at the time of adoption be expensed in the earnings statement over the remaining service period of those options. We expect adoption of this approach to result in an immaterial impact on net income.

In December 2004, the FASB decided to defer the issuance of their final standard on earnings per share (EPS) entitled “Earnings per Share – an Amendment to FAS 128.” The final standard will be effective in 2005 and will require retrospective application for all prior periods presented. The significant proposed changes to the EPS computation are changes to the treasury stock method and contingent share guidance for computing year-to-date diluted EPS, removal of the ability to overcome the presumption of share settlement when computing diluted EPS when there is a choice of share or cash settlement and inclusion of mandatorily convertible securities in basic EPS. We are currently evaluating the proposed provisions of this amendment to determine the impact on our consolidated financial statements.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

Our primary market risk exposure consists of changes in interest rates on borrowings under our debt instruments that bear interest at variable rates that fluctuate with market interest rates. These debt instruments include the secured credit facility, the $108.0 million secured term loan and our share of floating rate debt under our unconsolidated joint ventures of $25.0 million at year end.

We have entered into both variable and fixed rate debt arrangements to allow us to optimize the balance of using variable rate debt versus fixed rate debt. Our variable rate debt allows us to maximize financial flexibility when selling properties and minimize potential prepayment penalties typical of fixed rate loans. Our $130.0 million, 6.9% fixed rate term note allows us to minimize our interest rate risk exposure. Approximately 51% of our outstanding debt at December 31, 2004 was fixed-rate in nature, compared with 41% at the end of 2003, primarily as a result of the paydown of outstanding debt with proceeds from the 2004 property sales. The weighted average interest rate of our variable rate debt and total debt as of December 31, 2004 was 4.7% and 5.8%, respectively. The weighted average interest rate of our variable rate debt and total debt as of December 31, 2003 was 4.1% and 5.2%, respectively.

We review interest rate exposure continuously in an effort to minimize the risk of interest rate fluctuations. It is our policy to manage our exposure to fluctuations in market interest rates on our borrowings through the use of fixed rate debt instruments, to the extent that reasonably favorable rates are obtainable with such arrangements, and after considering the need for financial flexibility related to our debt arrangements. We may enter into forward interest rate agreements, or similar agreements, to hedge our variable rate debt instruments where we believe the risk of adverse changes in market rates is significant. Under a forward interest rate agreement, if the referenced interest rate increases, we would be entitled to a receipt in settlement of the agreement that economically would offset the higher financing cost of the debt issued. If the referenced interest rate decreases, we would make payments in settlement of the agreement, creating an expense that economically would offset the reduced financing cost of the debt issued. As of December 31, 2004, we do not have any material market-sensitive financial instruments.

29

We do not believe that changes in market interest rates will have a material impact on the performance or fair value of our hotel portfolio as the value of our hotel portfolio is based primarily on the operating cash flow of the hotels, before interest expense charges. However, a change of 1/4% in the index rate to which our variable rate debt is tied would change our annual interest incurred by $0.2 million, based upon the balances outstanding on our variable rate instruments at December 31, 2004.

Using sensitivity analysis to measure the potential change in fair value of financial instruments based on changes in interest rates, we have determined that a hypothetical increase of 1% in the interest rates for instruments with similar maturities would decrease the fair value of our fixed rate debt by $3.0 million as compared with the fair value at December 31, 2004, which approximated $105,000.

Item 8. Consolidated Financial Statements and Supplemental Data

See Index to the Financial Statements on page F-1.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

On April 14, 2004, the Audit Committee of the Board of Directors voted to approve the engagement of Grant Thornton LLP (“Grant”) as the Company’s independent auditor for the year ending December 31, 2004, to be effective upon Grant’s acceptance of the engagement to act as the Company’s independent auditor. On April 16, 2004, Grant accepted the engagement. As such, on April 16, 2004, Deloitte & Touche, LLP (“D&T”), was dismissed as Boykin’s independent auditor.

The reports of D&T on the Company’s financial statements for the two fiscal years ended December 31, 2003 and 2002 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles.

In connection with the audits of the Company’s financial statements for each of the two fiscal years ended December 31, 2003 and 2002, and during the interim period through April 16, 2004, there were no disagreements with D&T on any matters of accounting principles or practices, financial statement disclosure, or auditing scope and procedures which, if not resolved to the satisfaction of D&T would have caused D&T to make reference to the matter in their report. During the two fiscal years ended December 31, 2003 and 2002, and the subsequent interim period through April 16, 2004, there were no reportable events as defined in Item 304(a)(1)(v) of Regulation S-K. D&T has furnished the Company a letter addressed to the Securities and Exchange Commission stating that it agrees with the above statements. A copy of that letter, dated April 19, 2004, was filed as Exhibit 16.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 20, 2004.

During the two fiscal years ended December 31, 2003 and 2002 and their subsequent interim period through April 16, 2004, neither the Company nor anyone on behalf of the Company consulted with Grant regarding either the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on the Company’s financial statements; or on any matter considered important by the Company in reaching a decision as to any accounting, auditing or financial reporting issue or any matter that was either the subject of a disagreement as defined in Item 304(a)(1)(v)(iv) of Regulation S-K, or any reportable event, as defined in Item 304(a)(1)(v) of Regulation S-K.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and our principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Exchange Act Rules 13a – 15(e) and 15d – 15(e). Based upon this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Annual Report.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a – 15(f) and 15d – 15(f). Management assessed the effectiveness of our internal control as of December 31, 2004. In making this assessment, management used the criteria set forth in Internal Control – Integrated Framework issued by the Committee of Sponsoring

30

Organizations of the Treadway Commission. Based on our assessment, management concluded that our internal control over financial reporting was effective as of December 31, 2004. Grant Thornton LLP, an independent registered public accounting firm, has audited and issued their report on management’s assessment of its internal control over financial reporting, which is included herein.

Changes in Internal Control Over Financial Reporting

There have not been any changes in our internal control over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

None.

PART III

Item 10. Directors and Executive Officers of the Registrant

The information required by this Item 10 is incorporated by reference to the information under the headings “Election of Directors” and “Section 16(a) Beneficial Ownership Reporting Compliance” contained in Boykin’s Proxy Statement in connection with its Annual Meeting of Shareholders to be held on May 24, 2005, and the information under the headings “Executive Officers of the Registrant” and “Corporate Governance” in Part I of this Annual Report on Form 10-K.

Item 11. Executive Compensation

The information required by this Item 11 is incorporated by reference to the information under the heading “Executive Compensation” contained in Boykin’s Proxy Statement in connection with its Annual Meeting of Shareholders to be held on May 24, 2005.

Item 12. Security Ownership of Certain Beneficial Owners and Management

The information required by this Item 12, other than the information required by Item 201(d) of Regulation S-K, is incorporated by reference to the information under the heading “Security Ownership of Certain Beneficial Owners and Management” contained in Boykin’s Proxy Statement in connection with its Annual Meeting of Shareholders to be held on May 24, 2005. The information required by Item 201(d) of Regulation S-K is set forth in section (d) of Item 5 of this Annual Report on Form 10-K.

Item 13. Certain Relationships and Related Transactions

The information required by this Item 13 is incorporated by reference to the information under the heading “Certain Relationships and Related Transactions” contained in Boykin’s Proxy Statement in connection with its Annual Meeting of Shareholders to be held on May 24, 2005.

Item 14. Principal Accounting Fees and Services

The information required by this Item 14 is incorporated by reference to the information under the heading “Principal Accounting Fees and Services” contained in Boykin’s Proxy Statement in connection with its Annual Meeting of Shareholders to be held on May 24, 2005.

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PART IV

Item 15. Exhibits, Financial Statement Schedules

                 (a) See page F-1 for an index to financial statements and required schedules. All other financial statement schedules within the provisions of Regulation S-X that are not listed in the index are either not required to be included under the related instructions or are not applicable or the appropriate information is included in the notes to the consolidated financial statements and therefore, have been omitted.

Exhibits
	3.1	(a)	Amended and Restated Articles of Incorporation, as amended
	3.2	(b)	Code of Regulations
	4.1	(b)	Specimen Share Certificate
	4.2	(a)	Dividend Reinvestment and Optional Share Purchase Plan
	4.3	(d)	Shareholder Rights Agreement, dated as of May 25, 1999 between Boykin Lodging Company and National City Bank as rights agent
	4.3a	(g)	Amendment to Shareholder Rights Agreement, dated as of December 31, 2001
	10.1	(i)	Third Amended and Restated Agreement of Limited Partnership of Boykin Hotel Properties, L.P.
	10.2	(b)	Form of Registration Rights Agreement
	10.3	(b)	Long-Term Incentive Plan*
	10.4	(b)	Directors’ Deferred Compensation Plan*
	10.5	(b)	Employment Agreement between the Company and Robert W. Boykin*
	10.6	(b)	Form of Percentage Lease
	10.7	(b)	Intercompany Convertible Note
	10.8	(b)	Agreements with General Partners of the Contributed Partnerships
	10.9	(b)	Form of Noncompetition Agreement
	10.10	(b)	Alignment of Interests Agreement
	10.11	(c)	Description of Employment Arrangement between the Company and Richard C. Conti*
	10.12	(d)	Limited Liability Company Agreement of Boykin/ AEW LLC dated as of February 1, 1999
	10.13	(e)	Stock Purchase Option Agreement by and among Boykin Lodging Company, Boykin Hotel Properties, L.P. and AEW Partners III, L.P. dated as of February 1, 1999
	10.14	(e)	Warrant to Purchase Class A Cumulative Preferred Stock, Series 1999-A of Boykin Lodging Company dated as of February 1, 1999
	10.15	(e)	Registration Rights Agreement by and among Boykin Lodging Company and AEW Partners III, L.P. dated as of February 1, 1999
	10.16	(f)	Key Employee Severance Plan*
	10.17	(f)	Form of Severance Agreement*
	10.18	(g)	Master Contribution Agreement between BMC, JABO LLC, the Company and the Partnership dated as of December 31, 2001
	10.19	(g)	Form of Hotel Management Agreement*
	10.20	(g)	Registration Rights Agreement between the Company and JABO LLC dated January 1, 2002
	10.21	(j)	Description of Employment Arrangement between the Company and Shereen P. Jones*
	10.22		Hotel Purchase and Sale Agreement; Hotel 71 Chicago, Illinois, By and Between Boykin Chicago L.L.C., as Seller and the Falor Companies, Inc., as Purchaser
	10.23		Modification Letter – Stock Purchase Option Agreement by and among Boykin Lodging Company, Boykin Hotel Properties, L.P. and AEW Partners III, L.P. dated as of February 1, 1999
	10.24		Modification of Employment Agreement between the Company and Robert W. Boykin*
	12		Statement re Computation of Ratios
	16.1	(h)	Letter of Deloitte & Touche LLP required by Item 304 of Regulation S-K
	21		Subsidiaries of the Registrant
	23.1		Consent of Independent Registered Public Accounting Firm
	23.2		Consent of Independent Registered Public Accounting Firm
	31.1		Certification Pursuant to Rule 13a-14(a), in Accordance with Section 302 of the Sarbanes-Oxley Act of 2002
	31.2		Certification Pursuant to Rule 13a-14(a), in Accordance with Section 302 of the Sarbanes-Oxley Act of 2002
	32.1		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	32.2		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(a)	Incorporated by reference from Boykin’s Form 10-Q for the quarter ended June 30, 1999.
(b)	Incorporated by reference from Amendment No. 3 to Boykin’s Registration Statement on Form S-11 (Registration No. 333-6341) (the “Form S-11”) filed on October 24, 1996. Each of the above exhibits has the same exhibit number in the Form S-11.
(c)	Incorporated by reference from Boykin’s Form 10-Q for the quarter ended June 30, 1998.
(d)	Incorporated by reference from Boykin’s Form 10-Q for the quarter ended March 31, 1999.
(e)	Incorporated by reference from Boykin’s Form 10-Q for the quarter ended March 31, 1999.
(f)	Incorporated by reference from Boykin’s Form 10-K for the year ended December 31, 1999.

32

(g)	Incorporated by reference from Boykin’s Form 8-K filed on January 14, 2002.
(h)	Incorporated by reference from Boykin’s Form 8-K filed on April 20, 2004.
(i)	Incorporated by reference from Boykin’s Form 8-K filed on October 4, 2002.
(j)	Incorporated by reference from Boykin’s Form 10-K for the year ended December 31, 2002.
*	Management contract or compensatory plan or arrangement.

33

INDEX TO FINANCIAL STATEMENTS

BOYKIN LODGING COMPANY:
Reports of Independent Registered Public Accounting Firms	F-2
Consolidated Balance Sheets as of December 31, 2004 and 2003	F-5
Consolidated Statements of Operations for the Years Ended December 31, 2004, 2003 and 2002	F-6
Consolidated Statements of Shareholders’ Equity and Comprehensive Income (Loss) for the Years Ended December 31, 2004, 2003 and 2002	F-7
Consolidated Statements of Cash Flows for the Years Ended December 31, 2004, 2003 and 2002	F-8
Notes to Consolidated Financial Statements	F-9
Schedule III – Real Estate and Accumulated Depreciation as of December 31, 2004	F-30
BOYKIN/ AEW, LLC AND SUBSIDIARIES:
Reports of Independent Registered Public Accounting Firms	F-32
Consolidated Balance Sheets as of December 31, 2004 and 2003	F-34
Consolidated Statements of Operations for the Years Ended December 31, 2004, 2003 and 2002	F-35
Consolidated Statements of Members’ Equity for the Years Ended December 31, 2004, 2003 and 2002	F-36
Consolidated Statements of Cash Flows for the Years Ended December 31, 2004, 2003 and 2002	F-37
Notes to Consolidated Financial Statements	F-38
Schedule III – Real Estate and Accumulated Depreciation as of December 31, 2004	F-42

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Shareholders of Boykin Lodging Company

We have audited management’s assessment, included in the accompanying Management’s Report on Internal Control over Financial Reporting included in Item 9a of the Form 10K, that Boykin Lodging Company (an Ohio Corporation) and subsidiaries maintained effective internal control over financial reporting as of December 31, 2004, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Boykin Lodging Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, management’s assessment that Boykin Lodging Company maintained effective internal control over financial reporting as of December 31, 2004, is fairly stated, in all material respects, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Also in our opinion, Boykin Lodging Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2004, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of Boykin Lodging Company as of December 31, 2004, and the related statements of operations, shareholders’ equity, and cash flows for the year ended December 31, 2004 and our report dated March 1, 2005 expressed an unqualified opinion on those financial statements.

/s/ Grant Thornton LLP

Cleveland, Ohio

March 1, 2005

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

Boykin Lodging Company

We have audited the accompanying consolidated balance sheet of Boykin Lodging Company (an Ohio corporation) and subsidiaries as of December 31, 2004, and the related consolidated statements of operations, shareholders’ equity and cash flows for the year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Boykin Lodging Company and subsidiaries as of December 31, 2004, and the results of their operations and their cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. Schedule III is presented for purposes of additional analysis and is not a required part of the basic financial statements. This schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

We also have audited, in accordance with the standards of the Public Accounting Oversight Board (United States), the effectiveness of Boykin Lodging Company’s internal control over financial reporting as of December 31, 2004, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated March 1, 2005 expressed an unqualified opinion thereon.

/s/ Grant Thornton LLP

Cleveland, Ohio

March 1, 2005

F-3

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

Boykin Lodging Company:

Cleveland, Ohio

We have audited the accompanying consolidated balance sheet of Boykin Lodging Company (an Ohio corporation) and subsidiaries (the “Company”) as of December 31, 2003, and the related consolidated statements of operations, shareholders’ equity, and cash flows for each of the two years in the period ended December 31, 2003. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Boykin Lodging Company and subsidiaries as of December 31, 2003, and the results of their operations and their cash flows for each of the two years in the period ended December 31, 2003, in conformity with accounting principles generally accepted in the United States of America.

/s/ Deloitte & Touche LLP

Cleveland, Ohio

March 25, 2004 (March 2, 2005 as to the effects of the discontinued operations in fiscal 2004 described in Note 4)

F-4

BOYKIN LODGING COMPANY

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2004 AND 2003

(DOLLAR AMOUNTS IN THOUSANDS)

			2004			2003
ASSETS
Investment in hotel properties			$	545,142		$	534,475
	Accumulated depreciation			(134,347	)		(124,599	)
Investment in hotel properties, net				410,795			409,876
Cash and cash equivalents				13,521			14,013
Restricted cash				13,022			15,365
Accounts receivable, net of allowance for doubtful accounts of $87 and $144 as of December 31, 2004 and 2003, respectively				12,170			39,988
Receivables from lessee				10			254
Inventories				1,709			1,591
Deferred financing costs and other, net				2,014			2,948
Investment in unconsolidated joint ventures				14,048			16,158
Other assets				10,091			8,315
Assets related to discontinued operations, net				—			82,784
			$	477,380		$	591,292
LIABILITIES AND SHAREHOLDERS’ EQUITY
Borrowings against credit facility			$	6,446		$	71,945
Term notes payable				193,539			210,074
Accounts payable and accrued expenses				36,707			43,273
Accounts payable to related party				1,063			873
Dividends/distributions payable				1,188			1,188
Due to lessees				—			164
Minority interest in joint ventures				927			967
Minority interest in operating partnership				10,062			11,495
Liabilities related to discontinued operations				—			19,772
SHAREHOLDERS’ EQUITY:
	Preferred shares, without par value; 10,000,000 shares authorized; 181,000 shares issued and outstanding as of December 31, 2004 and 2003 (liquidation preference of $45,250)			—			—
	Common shares, without par value; 40,000,000 shares authorized; 17,450,314 and 17,344,380 shares outstanding at December 31, 2004 and 2003, respectively			—			—
	Additional paid-in capital			358,688			357,290
	Distributions in excess of income			(129,232	)		(124,321	)
	Unearned compensation – restricted shares			(2,008	)		(1,428	)
		Total shareholders’ equity		227,448			231,541
			$	477,380		$	591,292

See notes to consolidated financial statements.

F-5

BOYKIN LODGING COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002

(AMOUNTS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)

			2004			2003			2002
Revenues:
	Hotel revenues:
		Rooms	$	133,597		$	122,821		$	129,341
		Food and beverage		62,407			58,268			61,728
		Other		14,414			11,314			11,632
	Total hotel revenues			210,418			192,403			202,701
	Other lease revenue			2,045			1,958			1,885
	Other operating revenue			380			311			451
	Revenues from condominium development and unit sales			7,541			36,883			8,715
		Total revenues		220,384			231,555			213,752
Expenses:
	Hotel operating expenses:
		Rooms		33,772			30,850			31,432
		Food and beverage		43,045			40,877			42,984
		Other direct		8,181			7,142			7,342
		Indirect		68,256			61,672			57,912
		Management fees to related party		5,801			4,339			3,741
		Management fees – other		59			882			2,261
	Total hotel operating expenses			159,114			145,762			145,672
	Property taxes, insurance and other			15,117			14,530			12,921
	Cost of condominium development and unit sales			5,509			24,645			6,474
	Real estate related depreciation and amortization			24,017			26,085			23,377
	Corporate general and administrative			8,801			8,138			6,404
		Total operating expenses		212,558			219,160			194,848
		Operating income		7,826			12,395			18,904
	Interest income			387			602			126
	Other income			8			39			80
	Interest expense			(13,629	)		(14,923	)		(18,068	)
	Amortization of deferred financing costs			(1,367	)		(1,906	)		(2,105	)
	Minority interest in earnings of joint ventures			(141	)		(133	)		(133	)
	Minority interest in loss of operating partnership			1,879			1,946			980
	Equity in loss of unconsolidated joint ventures			(814	)		(870	)		(2,040	)
Loss before gain (loss) on sale/disposal of assets and discontinued operations				(5,851	)		(2,850	)		(2,256	)
	Gain (loss) on sale/disposal of assets			3,157			954			(16	)
Loss before discontinued operations				(2,694	)		(1,896	)		(2,272	)
	Discontinued operations:
	Operating income (loss) from discontinued operations, net of operating partnership minority interest income (expense) of $1,038, $387 and $(340), for the years ended December 31, 2004, 2003 and 2002, respectively			(5,890	)		(2,184	)		1,901
	Gain on sale of assets, net of operating partnership minority interest expense of $1,484 and $116 for the years ended December 31, 2004 and 2003, respectively			8,424			654			—
Net loss			$	(160	)	$	(3,426	)	$	(371	)
	Preferred dividends			(4,751	)		(4,751	)		(1,109	)
Net loss attributable to common shareholders			$	(4,911	)	$	(8,177	)	$	(1,480	)
Net loss per share attributable to common shareholders before discontinued operations
	Basic		$	(0.43	)	$	(0.38	)	$	(0.20	)
	Diluted		$	(0.43	)	$	(0.38	)	$	(0.20	)
Discontinued operations per share
	Basic		$	0.15		$	(0.09	)	$	0.11
	Diluted		$	0.14		$	(0.09	)	$	0.11
Net loss per share attributable to common shareholders(a)
	Basic		$	(0.28	)	$	(0.47	)	$	(0.09	)
	Diluted		$	(0.28	)	$	(0.47	)	$	(0.09	)
Weighted average number of common shares outstanding
	Basic			17,426			17,336			17,248
	Diluted			17,553			17,470			17,383

(a)
Per share amounts may not add due to rounding

See notes to consolidated financial statements.

F-6

BOYKIN LODGING COMPANY

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

AND COMPREHENSIVE INCOME (LOSS)

FOR THE YEARS ENDED DECEMBER 31, 2004, 2003, AND 2002

(DOLLAR AMOUNTS IN THOUSANDS)

								Additional			Distributions			Other
			Preferred		Common			Paid-In			In Excess of			Comprehensive			Unearned
			Shares		Shares			Capital			Income			Gain/(Loss)			Compensation			Total
Balance at January 1, 2002				—		17,191,954		$	312,171		$	(105,193	)	$	(2,838	)	$	(1,494	)	$	202,646
	Issuance of common shares, net of offering expenses of $3			—		104,461			1,126			—			—			(692	)		434
	Issuance of preferred shares, net of offering expenses of $2,016			181,000		—			43,234			—			—			—			43,234
	Common share purchases for treasury			—		(20,008	)		(303	)		—			—			—			(303	)
	Dividends declared
		– $0.36 per common share		—		—			—			(6,297	)		—			—			(6,297	)
		– $6.125 per Class A preferred share		—		—			—			(1,109	)		—			—			(1,109	)
	Amortization of unearned compensation			—		—			—			—			—			992			992
	Net loss			—		—			—			(371	)		—			—			(371	)
		Other comprehensive income
		– net unrealized gain on interest rate swap		—		—			—			—			1,065			—			1,065
	Total comprehensive income			—		—			—			—			—			—			694
Balance at December 31, 2002				181,000		17,276,407			356,228			(112,970	)		(1,773	)		(1,194	)		240,291
	Issuance of common shares, net of offering expenses of $4			—		77,528			1,143			—			—			(990	)		153
	Common share purchases for treasury			—		(9,555	)		(81	)		—			—			—			(81	)
	Dividends declared
		– $0.18 per common share		—		—			—			(3,174	)		—			—			(3,174	)
		– $26.25 per Class A preferred share		—		—			—			(4,751	)		—			—			(4,751	)
	Amortization of unearned compensation			—		—			—			—			—			756			756
	Net loss			—		—			—			(3,426	)		—			—			(3,426	)
	Other comprehensive income
		– net unrealized gain on interest rate swap		—		—			—			—			1,773			—			1,773
	Total comprehensive loss			—		—			—			—			—			—			(1,653	)
Balance at December 31, 2003				181,000		17,344,380			357,290			(124,321	)		—			(1,428	)		231,541
	Issuance of common shares			—		128,745			—			—			—			—			—
	Restricted common share grants			—		—			1,589			—			—			(1,589	)		—
	Common share purchases for treasury			—		(22,811	)		(191	)		—			—			—			(191	)
	Dividends declared
		– $26.25 per Class A preferred share		—		—			—			(4,751	)		—			—			(4,751	)
	Amortization of unearned compensation			—		—			—			—			—			1,009			1,009
	Net loss			—		—			—			(160	)		—			—			(160	)
Balance at December 31, 2004				181,000		17,450,314		$	358,688		$	(129,232	)	$	—		$	(2,008	)	$	227,448

See notes to consolidated financial statements.

F-7

BOYKIN LODGING COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002

(AMOUNTS IN THOUSANDS)

				2004			2003			2002
Cash flows from operating activities:
	Net loss			$	(160	)	$	(3,426	)	$	(371	)
	Adjustments to reconcile net loss to net cash flow provided by operating activities –
		(Gain) loss on sale/disposal of assets			(13,080	)		(2,274	)		18
		Impairment of real estate			4,300			2,800			—
		Depreciation and amortization			28,073			33,822			32,356
		Amortization of unearned compensation			1,009			756			992
		Equity in loss of unconsolidated joint ventures			814			870			2,040
		Minority interests			803			(3,319	)		(507	)
		Changes in assets and liabilities –
			Accounts receivable and inventories		28,808			(31,083	)		266
			Restricted cash		2,343			(1,851	)		(4,069	)
			Accounts payable and accrued expenses		(9,118	)		1,902			1,321
			Amounts due to/from lessees		80			(217	)		3,092
			Other		(1,232	)		4,193			4,050
Net cash flow provided by operating activities					42,640			2,173			39,188
Cash flows from investing activities:
	Cash assumed in connection with termination of leases				—			—			5,765
	Investment in unconsolidated joint ventures				(438	)		(481	)		(4,408	)
	Distributions received from unconsolidated joint ventures				1,698			572			148
	Improvements and additions to hotel properties, net				(30,834	)		(54,210	)		(13,490	)
	Net proceeds from sale of assets				93,101			30,336			—
Net cash flow provided by (used in) investing activities					63,527			(23,783	)		(11,985	)
Cash flows from financing activities:
	Payments of dividends and distributions				(4,751	)		(11,485	)		(3,638	)
	Net borrowings (repayments) against credit facilities				(65,500	)		71,946			(39,000	)
	Term note borrowings				14,133			13,222			—
	Repayment of term notes				(47,537	)		(61,106	)		(5,144	)
	Payment of deferred financing costs				(327	)		(2,339	)		(830	)
	Net proceeds from issuance of preferred shares				—			—			43,234
	Net proceeds from issuance of common shares				—			153			434
	Cash payment for common share purchases				(191	)		(81	)		(172	)
	Distributions to joint venture minority interest partners, net				(2,486	)		(140	)		(244	)
Net cash flow provided by (used in) financing activities					(106,659	)		10,170			(5,360	)
Net change in cash and cash equivalents				$	(492	)	$	(11,440	)	$	21,843
Cash and cash equivalents, beginning of year					14,013			25,453			3,610
Cash and cash equivalents, end of year				$	13,521		$	14,013		$	25,453

See notes to consolidated financial statements.

F-8

BOYKIN LODGING COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002

(DOLLAR AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)

1. Background:

Boykin Lodging Company, an Ohio Corporation (together with its subsidiaries “Boykin”), is a real estate investment trust (“REIT”) that owns hotels throughout the United States of America. As of December 31, 2004, Boykin owned interests in 24 hotels containing a total of 7,209 guestrooms located in 16 states, 21 of which were affiliated with nationally-recognized franchisors. Boykin’s largest franchise affiliation is with Doubletree®. As of December 31, 2004, Boykin owned eight Doubletree hotels in seven states, which accounted for approximately 41% of the total rooms in Boykin’s portfolio. Other brands that Boykin is affiliated with include Hilton®, Marriott® and Radisson®.

The operations of the hotels have historically been seasonal. The five hotels located in Florida have historically experienced their highest occupancy in the first quarter, while the remaining hotels have historically maintained higher occupancy rates during the second and third quarters.

Formation

Boykin was formed and completed an initial public offering (the “IPO”) in 1996 to continue and expand the nearly 40-year history of hotel ownership, acquisition, redevelopment and repositioning activities of its predecessors, Boykin Management Company and its affiliates. Boykin Hotel Properties, L.P., an Ohio limited partnership (the “Partnership”), is the operating partnership that transacts business and holds the direct and indirect ownership interest in Boykin’s hotels. As of December 31, 2004, Boykin had an 85.3% ownership interest in and is the sole general partner of the Partnership.

Since the IPO, Boykin has raised capital through a combination of common and preferred share issuances, various debt financings, capital from strategic joint venture partners and cash flow generated from operations.

As of December 31, 2004, Boykin Management Company Limited Liability Company (“BMC”) and certain of its subsidiaries managed 21 of the 24 hotels in which Boykin had ownership interests. BMC is owned by Robert W. Boykin, Chairman and Chief Executive Officer of Boykin (53.8%) and his brother, John E. Boykin (46.2%).

Consolidated Joint Ventures

During the three year period ended December 31, 2004, Boykin was a party to the following joint ventures for the purposes of owning hotels. In 2004, the joint ventures which owned the Holiday Inn Minneapolis West and Marriott’s Hunt Valley Inn, sold their respective hotels.

		Boykin		JV
		Ownership		Ownership			Hotel		Date of Hotel
Name of Joint Venture	JV Partner	Percentage		Percentage		Hotel Owned Under Joint Venture	Manager		Sale
BoyStar Ventures, L.P.	Interstate Hotels and Resorts		91%		9%	Holiday Inn Minneapolis West		BMC		August 2004
Shawan Road Hotel L.P.	Davidson Hotel Company		91%		9%	Marriott’s Hunt Valley Inn		Davidson		July 2004
Boykin San Diego LLC	Outrigger Lodging Services		91%		9%	Hampton Inn San DiegoAirport/Sea World		Outrigger		N/A

Unconsolidated Joint Ventures

In 1999, Boykin formed a joint venture with AEW Partners III, L.P. (“AEW”), an investment partnership managed by AEW Capital Management, L.P., a Boston-based real estate investment firm. Boykin has a 25% ownership interest in the joint venture. In the same year, the Boykin/ AEW venture formed and acquired a 75% ownership interest in Boykin Chicago, L.L.C., which purchased a hotel in downtown Chicago, now named Hotel 71. In 2000, Boykin purchased the remaining 25% ownership interest in Boykin Chicago, L.L.C. from a private investor thereby increasing Boykin’s total ownership percentage in the hotel to 43.75%. Boykin Chicago, L.L.C. entered into a contract to sell Hotel 71 in 2004.

F-9

In July 2001, Boykin formed a joint venture with Concord Hospitality Enterprises (“Concord”), a privately owned hotel investment and management company based in Raleigh, North Carolina. Boykin has a 50% ownership interest in the joint venture, which acquired a full-service hotel in Lyndhurst, New Jersey.

Because of the non-controlling nature of Boykin’s ownership interests in these joint ventures, Boykin accounts for these investments using the equity method. Refer to Note 9 for further discussions of the aforementioned joint venture with AEW.

Boykin’s carrying value of its investments in these joint ventures differs from its share of the partnership equity reported in the balance sheets of the unconsolidated joint ventures due to Boykin’s cost of its investment in excess of the historical net book values related to the direct investment in Boykin Chicago, L.L.C. Boykin’s additional basis is allocated to depreciable assets and is recognized on a straight line basis over 30 years.

The following table sets forth the total assets, liabilities, revenues and net income (loss), including Boykin’s share, related to the unconsolidated joint ventures discussed above as of December 31, 2004 and 2003 and for each of the three years in the period ended December 31, 2004:

	Boykin/AEW				Boykin/Concord
	December 31,				December 31,
	2004		2003		2004		2003
Total assets	$	65,975	$	68,601	$	21,069	$	22,272
Accrued expenses		2,593		2,884		485		469
Outstanding debt		36,116		37,236		18,398		16,728
Total liabilities		38,709		40,120		18,883		17,197
Minority interest		6,781		7,081		—		—
Equity		20,485		21,400		2,186		5,075
Boykin’s share of equity and minority interest		11,999		12,627		1,093		2,537
Boykin’s additional basis in Boykin Chicago, L.L.C.		956		994		—		—
Investment in unconsolidated joint venture	$	12,955	$	13,621	$	1,093	$	2,537

	Boykin/AEW									Boykin/Concord
	December 31,									December 31,
	2004			2003			2002			2004			2003			2002
Revenues	$	16,093		$	14,942		$	10,049		$	7,437		$	6,709		$	5,529
Hotel operating expenses		(10,698	)		(9,836	)		(8,752	)		(4,297	)		(3,856	)		(3,495	)
Management fees – related parties		(483	)		(446	)		(75	)		—			—			—
Real estate related depreciation		(3,102	)		(3,099	)		(1,938	)		(1,114	)		(1,139	)		(1,011	)
Property taxes, insurance and other		(1,710	)		(1,245	)		(1,360	)		(554	)		(537	)		(493	)
Operating income (loss)		100			316			(2,076	)		1,472			1,177			530
Interest and other income		35			14			26			5			13			2
Amortization		(289	)		(282	)		(334	)		(151	)		(88	)		(87	)
Interest expense		(1,760	)		(1,716	)		(1,648	)		(926	)		(792	)		(799	)
Other		(1	)		(5	)		(107	)		(156	)		(578	)		(94	)
Net income (loss) before minority interest		(1,915	)		(1,673	)		(4,139	)		244			(268	)		(448	)
Boykin’s share of net income (loss)		(936	)		(736	)		(1,816	)		122			(134	)		(224	)

Taxable REIT Subsidiary Transactions

The Work Incentives Improvement Act of 1999 (“REIT Modernization Act”) amended the tax laws to permit REITs, like Boykin, to lease hotels to a subsidiary that qualifies as a taxable REIT subsidiary (“TRS”) as long as the TRS engages an independent hotel management company to operate those hotels under a management contract. Boykin implemented this structure for certain properties previously leased to the hotel management companies effective January 1, 2002.

In conjunction with the transaction, the Partnership acquired 16 subsidiaries of BMC for consideration comprised of limited partnership units (Note 8) and the assumption of working capital liabilities in excess of assets relating to Westboy LLC (“Westboy”), one of the subsidiaries (Note 14).

F-10

The Partnership then contributed the acquired subsidiaries to Bellboy, Inc. (“Bellboy”), a wholly owned subsidiary of the Partnership, or terminated the existing lease agreement with the hotel managers and re-leased the properties to subsidiaries of Bellboy. Bellboy has elected to be treated as a TRS.

Effective September 1, 2002, Shawan Road Hotel L.P. formed a TRS, Hunt Valley Leasing, Inc. (“Hunt Valley”), to lease the Marriott’s Hunt Valley Inn. Davidson continued to manage the property until Shawan Road Hotel L.P. sold the hotel in 2004.

As Boykin Chicago, L.L.C. and the Boykin/ Concord joint venture each also have TRS entities which lease their properties, 71 E. Wacker Leasing, Inc. and BoyCon Leasing, Inc., respectively, as of December 31, 2004, all hotels Boykin had an ownership interest in, other than the Hampton Inn San Diego Airport/Sea World, were operated under the TRS structure.

As a result of the TRS transactions discussed above, from the effective date of each transaction going forward, the consolidated financial statements of Boykin include the operating results of the consolidated hotels under the TRS structure. Previously, revenues recorded on the consolidated financial statements were derived primarily from lease payment obligations which were made out of the net operating income of the properties; now reported revenues reflect total operating revenues from the properties with the related operating expenses also being reported.

Hilton Modification Agreement

Westboy, a subsidiary of Bellboy subsequent to the TRS transaction, historically leased from Boykin ten Doubletree branded hotels which were managed by a subsidiary of Hilton Hotels Corporation (“Hilton”) under a long-term management agreement. On April 30, 2003, Boykin entered into an agreement (the “Modification Agreement”) with Hilton to terminate the long-term management agreement. Six of the hotels continued to be Doubletree hotels under license agreements which became effective in May 2003, and Boykin then engaged BMC to manage the properties. One of these properties, the Doubletree Portland Downtown, was subsequently divested in 2004. Of the remaining four properties, three were subsequently sold and one property, the Yakima hotel was managed by Hilton until February 2004, at which point it became a Clarion hotel and Boykin entered into an agreement with the Chambers Group to manage the property.

The terms of the Modification Agreement included a discounted payoff of $3,600 on a $6,000 deferred incentive management fee which had been expensed by Boykin but was not yet payable to Hilton, a $2,100 termination fee and other professional fees related to the transaction. The approximate gain of $150 recorded on the transaction is reflected in property taxes, insurance and other expenses in 2003.

2. Summary of Significant Accounting Policies:

Basis of Presentation

The separate financial statements of Boykin, the Partnership, Bellboy, Hunt Valley and the consolidated joint ventures discussed above are consolidated because Boykin exercises unilateral control over these entities. All significant intercompany transactions and balances have been eliminated. Boykin believes that the results of operations contained within the consolidated financial statements reflect all costs of Boykin doing business.

Investment in Hotel Properties

Hotel properties are stated at cost, net of any impairment charges, and are depreciated using the straight-line method over estimated useful lives ranging from ten to 35 years for buildings and improvements and three to 20 years for furniture, fixture and equipment.

F-11

Investment in hotel properties as of December 31, 2004 and 2003 consisted of the following:

	2004			2003
Land	$	55,009		$	55,009
Buildings and improvements		416,563			409,393
Furniture and equipment		68,893			64,659
Construction in progress		4,677			5,414
		545,142			534,475
Less – Accumulated depreciation		(134,347	)		(124,599	)
	$	410,795		$	409,876

Boykin reviews the hotel properties for impairment whenever events or changes in circumstances indicate the carrying value of the hotel properties may not be recoverable. Events or circumstances that may cause a review include, but are not limited to, adverse changes in the demand for lodging at the properties due to declining national or local economic conditions, new hotel construction in markets where the hotels are located or changes in the expected holding period of the property. When such conditions exist, management performs an analysis to determine if the estimated undiscounted future cash flows from operations and the proceeds from the ultimate disposition of a hotel property exceed its carrying value. If the estimated undiscounted future cash flows are less than the carrying amount of the asset, an adjustment to reduce the carrying amount to the related hotel property’s estimated fair market value is recorded and an impairment loss recognized.

In 2004, Boykin identified changes in circumstances, namely the intended holding period of the property, which indicated that the carrying value of the Ramada Inn Bellevue Center was impaired and accordingly recorded an impairment charge of $4,300. In 2003, management identified changes in circumstances, namely the intended holding period of the property, which indicated that the carrying value of one of its properties, the Holiday Inn Minneapolis West, was impaired and accordingly recorded an impairment charge of $2,800. Both of these properties were sold in 2004. Boykin noted no such circumstances in 2002. Boykin does not believe that there are any factors or circumstances indicating impairment of any other investments in hotel properties at this time.

Fair market values of hotel properties are estimated through a combination of comparable property sales, replacement cost and a discounted cash flow analysis taking into account each property’s expected cash flow generated from operations, holding period and ultimate proceeds from disposition. In projecting the expected cash flows from operations of the asset, the estimates are based on future projected earnings before interest expense, income taxes, depreciation and amortization, or EBITDA, and deduct expected capital expenditure requirements. Growth assumptions are applied to project these amounts over the expected holding period of the asset. The growth assumptions are based on estimated inflationary increases in room rates and expenses and the demand for lodging at the properties, as impacted by local and national economic conditions and estimated or known future new hotel supply. The estimated proceeds from disposition are judgmentally determined based on a combination of anticipated cash flow in the year of disposition, capitalization rate, ratio of selling price to gross hotel revenues and selling price per room.

If actual conditions differ from the assumptions, the actual results of each asset’s future operations and fair market value could be significantly different from the estimated results and value used in the analysis.

There were no consolidated properties held for sale at December 31, 2004 and 2003, as defined within the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets.” Boykin considers assets to be “held for sale” when they are under contract, significant non-refundable deposits have been made by the potential buyer and the assets are immediately available to be sold.

Cash and Cash Equivalents

Cash and cash equivalents are defined as cash on hand and in banks plus short-term investments with an original maturity of three months or less.

Restricted Cash

Restricted cash consists of cash held in escrow reserves under the terms of the term notes payable discussed in Note 6 and deposits on the White Sand Villas condominium sales as discussed further below. The escrow reserves

F-12

relate to the payment of capital expenditures, real estate taxes, interest and insurance as well as reserves relating to the financing of Boykin Chicago L.L.C.

Accounts Receivable

Accounts receivable, consisting primarily of recognition of revenue related to projects accounted for under the percentage of completion method and hotel guest receivables, is stated at fair value. Bad debt expense for the hotels owned as of December 31, 2004 was $67, $93 and $733 for 2004, 2003 and 2002, respectively.

Inventories

Inventories consisting primarily of food and beverages and gift store merchandise are stated at the lower of first-in, first-out cost or market.

Deferred Financing Costs and Other, net

Included in deferred financing costs and other at December 31, 2004 and 2003 were the following:

	2004			2003
Financing costs	$	5,269		$	5,092
Franchise fees		352			272
		5,621			5,364
Accumulated amortization		(3,607	)		(2,416	)
	$	2,014		$	2,948

Deferred financing costs are being amortized using the straight-line method over the terms of the related financing agreements, including extension options where it is the intent of Boykin to exercise such options. In 2004, additional financing costs amounted to $554 and write offs due to repayments or maturities of underlying agreements amounted to $377. Additionally, financing costs for 2003 have been restated to reflect the removal of costs related to the debt collateralized by the properties sold during 2004 of $198. Accumulated amortization at December 31, 2004 and 2003 was $3,491 and $2,324, respectively.

Deferred franchise fees are being amortized on a straight-line basis over the terms of the related franchise agreements. In 2004, additional franchise fees amounted to $80. Franchise fees for 2003 have been restated to reflect amounts related to properties sold during 2004 of $199. Accumulated amortization at December 31, 2004 and 2003 was $116 and $92, respectively.

Officers Life Insurance

Pursuant to our Chairman and Chief Executive Officer’s employment agreement, Boykin was obligated to provide certain split-dollar life insurance benefits to him. During 2004, Boykin amended its agreement with Mr. Boykin to provide that Mr. Boykin would surrender one policy (along with the cash surrender value of such policy) to Boykin and the split dollar feature would be removed from the other policy. In consideration of Mr. Boykin’s agreement to surrender one policy and remove the split dollar features from the other, the Compensation Committee of the Board of Directors agreed to make a one-time payment of $416 to Mr. Boykin and increase his annual base compensation by $40 to compensate for the current value and lost future benefit that the Company would otherwise be required to provide. Amounts recorded for the two policies totaled $924 and $478 as of December 31, 2004 and 2003, respectively, and are reflected in the consolidated balance sheets as other assets. As of December 31, 2004 and 2003, there were loans against the cash surrender value of the policies related to the 2004 and 2003 premiums totaling $244 and $121, respectively, which are reflected in the consolidated balance sheets as accounts payable and accrued expenses.

Deferred Compensation Plans

As of December 31, 2004, Boykin had nonqualified deferred compensation programs which permitted certain employees to annually elect (via individual contracts) to defer a portion of their compensation on a pre-tax basis. To assist in the funding of these programs, Boykin has purchased shares of mutual funds as directed by the participants and placed them in rabbi trusts. The market value of the mutual fund shares included in other assets totaled $2,634 and $1,858 at December 31, 2004 and 2003, respectively. A liability of the equal amount is

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recorded within accounts payable and accrued expenses within the consolidated financial statements as of each period.

Dividends

The payment of dividends on Boykin’s common shares is dependent upon the receipt of distributions from the Partnership. The declaration of a common dividend and at what rate is subject to the discretion of Boykin’s Board of Directors.

Dividends on the preferred shares (Note 7) are cumulative from the date of issue at the rate of 10¹/2% of the liquidation preference per year and are payable quarterly in arrears based upon authorization of the Board of Directors. Dividends will accrue whether or not Boykin has earnings, whether or not there are funds legally available for the payment of such dividends and whether or not such dividends are declared.

Revenue Recognition

          Hotel revenues – Hotel revenues, including room, food, beverage and other hotel revenues, are recognized as the related services are delivered. Ongoing credit evaluations are performed and an allowance for potential credit losses is provided against the portion of accounts receivable that is estimated to be uncollectible.

          Lease revenue – Boykin recognizes lease revenue for interim and annual reporting purposes on an accrual basis pursuant to the terms of the respective percentage leases once all terms have been satisfied and certain thresholds have been met. Boykin recognizes the revenue in accordance with Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) No. 101 “Revenue Recognition in Financial Statements.” The adoption of SAB No. 101 impacts the interim reporting of revenues related to Boykin’s leases for properties not operated under the TRS structure, but has no impact on its interim cash flow or year-end results of operations.

          Percentage of Completion – The revenue and expenses of condominium projects under construction are recognized on the percentage of completion method upon satisfaction of the following criteria: (a) construction is determined to be beyond a preliminary stage, (b) the buyer is not entitled to a refund except for nondelivery of the unit, (c) sufficient units are under binding contract to assure the entire property will not revert to rental property, (d) sales prices have been determined to be collectible, and (e) aggregate sales proceeds and costs can be reasonably estimated. Beginning in 2003, Boykin recognized revenue under percentage of completion accounting as the White Sand Villas project had satisfied the criteria outlined above. Percentage of completion accounting involves the use of estimates for the relation of revenues on sold units to total revenues of the project and for total cost of the project.

Condominium Units

The related gross rental income generated by the units put back to the resort by contract for use as hotel rooms and the units owned by Boykin is recorded by the resort and included in hotel revenues within the consolidated financial statements. Under the terms of the contract, a percentage of the gross rental income of each unit is to be remitted to the respective unit owner.

White Sand Villas

During 2002, Boykin began construction of a 92-unit tower at the Pink Shell Beach Resort. In order to prepare the site for construction of the tower, Boykin paid for the removal of cottages occupying the space. Depreciation of the cottages was accelerated through the period of disposal resulting in an additional $1,700 charge in 2002, recorded in accordance with the provisions of SFAS No. 144 as it relates to asset abandonment. The costs of removing the cottages and preparing the site for construction of the new building were capitalized to the extent that total expected costs did not exceed the expected net realizable value for the project.

Deposits totaling $7,864 at December 31, 2003 received for the purchase of units in the White Sand Villas are included in accounts payable and accrued expenses on the balance sheet. A portion of the deposits was available for use as payment of construction costs. The portion that was not available was reflected in restricted cash.

The amount of costs in excess of the revenue recognized on the White Sand Villas project was $518 as of December 31, 2003 and is reflected in other assets within the consolidated balance sheet. The outstanding

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accounts receivable related to the recognition of revenue for the White Sand Villas units totaled $32,173 as of December 31, 2003.

The sales of all of the 91 available units closed in 2004, the proceeds had been collected and the contractors had completed their obligations; therefore, all project revenues and related costs have been recognized as of December 31, 2004.

Boykin reported $7,541 and $32,173 in revenues and $5,509 and $21,629 in costs under the percentage of completion method of accounting for the years ended December 31, 2004 and 2003.

All of the White Sand Villas unit owners have contracted with the resort to allow their unused room nights to be rented out as hotel rooms. For the year ended December 31, 2004, $1,188 was remitted to third party unit owners and is included within property taxes, insurance and other in the consolidated financial statements.

Sanibel View Villas

During 2001, Boykin completed a $2,700 renovation of a 60-unit tower at the Pink Shell Beach Resort. These renovated studio units were sold as Sanibel View Villas Condominiums. The revenue related to the sale of the units was recorded upon satisfaction of the following two criteria: (a) the profit is determinable and (b) the earnings process is virtually complete. These criteria are generally met at the closing of the sale. Through December 31, 2002, 40 of the units were sold, generating revenues of $8,715 and costs of $6,474.

As of December 31, 2003, all of the 59 available units were sold. Revenues from condominium development and unit sales for 2003 include $4,710 of revenue related to the sale of 19 Sanibel View Villas condominium units. Costs of the Sanibel View unit sales totaled $3,016 during 2003.

All of the Sanibel View unit owners have contracted with the resort to allow their unused room nights to be rented out as hotel rooms. For the years ended December 31, 2004 and 2003, $882 and $923 was remitted to third party unit owners and is included within property taxes, insurance and other in the consolidated financial statements.

Captiva Villas

During 2003, Boykin made the decision to move forward with the plans for the final phase of redevelopment of the Pink Shell Beach Resort; which includes the demolition of two existing low-rise buildings and the construction of a new 43-unit building. Similar to the other projects at the resort, the units in the new building will be sold as condominiums with the prospect that the owners will put their unused room nights back to the resort by contract for use as hotel rooms. In conjunction with the pending demolition of the existing buildings, in accordance with the provisions of SFAS No. 144 as it relates to asset abandonment, depreciation on the existing buildings was accelerated, resulting in an additional $3,456 of depreciation in 2003. Through December 31, 2004 and 2003, costs incurred in preparing for the construction totaling $1,015 and $554, respectively, as well as the original $900 basis in the land on which the new building will be constructed are reflected in the consolidated balance sheets as other assets.

Insurance Recoveries

In 2003, Boykin disposed of certain assets due to water infiltration remediation activities. Property insurance proceeds received in 2003 in excess of the net book value of the disposed assets were $913 and are recorded within the gain (loss) on sale/ disposal of assets within the consolidated financial statements. Additional property insurance proceeds of $3,383 received in 2004 are recorded as a gain on sale/ disposal of assets within the consolidated financial statements. During 2004, Boykin received a $750 advance on its business interruption insurance claim related to the period in which the remediation activities occurred. These proceeds are recorded as other hotel revenues within the consolidated financial statements.

Since September 2004, Boykin’s two hotels located in Melbourne, Florida have been closed due to damage sustained from Hurricane Frances. Boykin has recorded estimated business interruption insurance recoveries in the amount of the loss sustained by the hotels since the storm. These estimates, totaling $1,514, are recorded as other hotel revenues within the consolidated financial statements. Estimated property insurance recoveries totaling $5,656 have been recorded as gain on sale/disposal of assets within the consolidated financial statements to the extent Boykin experienced a loss on the writeoff of the damaged or destroyed assets. Included in accounts receivable as of December 31, 2004 is $4,669 of property damage and business interruption insurance recoveries related to these properties.

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As other property insurance claims are filed for repair work done at the properties, Boykin records estimated recoveries to offset the costs incurred, less appropriate deductibles.

Minority Interests

Minority interest in the Partnership represents the limited partners’ proportionate share of the equity in the Partnership. Income is allocated to minority interest based on the weighted average limited partnership percentage ownership throughout the period.

Minority interest in joint ventures represents the joint venture partners’ proportionate share of the equity in the joint ventures. Income and losses are allocated to minority interest based on the joint venture partners’ percentage ownership throughout the period and flow of cash distributions, subject to minimum returns to the Partnership, as defined in the joint venture agreements.

Income Taxes

Boykin qualifies as a REIT under Sections 856-860 of the Internal Revenue Code. As a REIT, Boykin generally will not be subject to federal corporate income tax on that portion of its net income that relates to non-TRS subsidiaries. Accordingly, no provision for income taxes has been reflected in the accompanying consolidated financial statements for the corporate level entities.

Upon the effective date of the establishment of Boykin’s TRSs, Bellboy and Hunt Valley, the subsidiaries became subject to federal and state income taxes. Boykin’s TRSs account for income taxes in accordance with the provisions of SFAS No. 109, “Accounting for Income Taxes.” As of December 31, 2004 and 2003, Boykin’s TRSs have a deferred tax asset of $10,155 and $5,735, respectively, prior to any valuation allowance, related to the assumption of the retained deficit of Westboy as well as the net operating losses of the TRSs and their subsidiaries. Boykin’s TRSs have recorded a 100% valuation allowance against these assets due to the uncertainty of realization of the deferred tax asset and therefore, no provision or benefit from income taxes is reflected in the accompanying consolidated statements of operations. As of December 31, 2004, the net operating loss carryforwards have remaining lives of 17 to 19 years.

Boykin’s earnings and profits, as defined by federal income tax law, will determine the taxability of distributions to shareholders. Earnings and profits will differ from income reported for financial reporting purposes primarily due to the differences in the estimated useful lives and methods used to compute depreciation, differences in timing of certain revenue recognition, and differences in the timing of when certain expenses are deductible for tax purposes. For federal income tax purposes, dividends to shareholders applicable to 2004, 2003 and 2002 operating results represented the following allocations of ordinary taxable income, qualified, return of capital, and 20% capital gain:

Common Shares
Year	Ordinary Income			Return of Capital			20% Capital Gain			Total
2004		N/A			N/A			N/A			N/A
2003		—			100.0	%		—			100.0%
2002		90.8	%		—			9.2	%		100.0%

Preferred Shares
Year	Ordinary Income		Qualified			Return of Capital			20% Capital Gain			Total
2004		89.9%		8.1	%		2.0	%		—			100.0	%
2003		92.9%		—			7.1	%		—			100.0	%
2002		90.8%		—			—			9.2	%		100.0	%

Earnings Per Share

Basic earnings per share is based on the weighted average number of common shares outstanding during the period whereas diluted earnings per share adjusts the weighted average shares outstanding for the effect of all

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dilutive securities. For the years ended December 31, 2004, 2003 and 2002, the weighted average basic and diluted common shares outstanding were as follows:

		Year Ended December 31,
		2004		2003		2002
Basic			17,426,458		17,336,258		17,248,173
Effect of dilutive securities:
	Common stock options		28,213		18,332		51,523
	Restricted share grants		98,530		115,062		83,063
Diluted			17,553,201		17,469,652		17,382,759

There are no adjustments to the reported amounts of income in computing diluted per share amounts.

Partnership Units/ Minority Interests

A total of 2,718,256 limited partnership units (Note 8) were issued and outstanding at December 31, 2004 and 2003. The weighted average number of limited partnership units outstanding for each of the periods ended December 31, 2004, 2003 and 2002 was also 2,718,256.

Fair Value of Financial Instruments

Fair values are determined by using available market information and appropriate valuation methodologies. Boykin’s principal financial instruments are cash, cash equivalents, restricted cash, accounts receivable, borrowings against the credit facility, the term notes payable and interest rate protection instruments.

Cash, cash equivalents, restricted cash and accounts receivable, due to their short maturities, are carried at amounts which reasonably approximate fair value. As borrowings against the credit facility (Note 5) bear interest at variable market rates, its carrying value approximates market value at December 31, 2004.

At December 31, 2004, the fair value of the $130,000 term note payable (Note 6) approximated $105,000 versus the carrying value of $102,414 as the interest rate associated with the note exceeds market rates currently offered for debt with similar risk factors, terms and maturities.

At December 31, 2004, the fair value of the $91,125 remaining balance of the $108,000 term loan (Note 6) approximates the carrying value due to its short-term nature.

Boykin has adopted the provisions of SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities.” This statement requires companies to carry all derivative instruments, including embedded derivatives, in the balance sheet at fair value. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, if so, on the reason for holding it. For financial reporting purposes, the change in market value of the effective portion of an instrument defined as a cash flow hedge flows through the other comprehensive income component of equity. All other changes will flow through earnings.

Subject to the terms of the $108,000 term loan, Boykin is required to maintain interest rate protection on the outstanding balance to cap the interest rate at no more than 10.25%. Changes in the fair value of the interest rate cap are recorded through the statement of operations. The interest rate cap is with a third party and had no value at December 31, 2004 based upon estimated market valuations. In March 2001, Boykin entered into an interest rate swap, which fixed the overall interest rate at 7.32% on $83,000 of Boykin’s $108,000 term note. Changes in the contract’s fair value, if applicable, were recorded through the statement of operations. The swap expired in July 2003, and Boykin did not renew the swap or purchase a replacement instrument.

Comprehensive Income

Comprehensive income is defined as changes in shareholders’ equity from non-owner sources, which for Boykin consisted of the difference between the cost basis and fair market value of its interest rate swap. For the years ended December 31, 2003 and 2002, the difference between net income (loss) and comprehensive income (loss) was due to the change in the market value of the swap.

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New Accounting Pronouncements

In November 2002, the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others,” which addresses the disclosure to be made by a guarantor in its interim and annual financial statements about its obligations under guarantees. Interpretation No. 45 also requires the recognition of a liability by a guarantor at the inception of certain guarantees. Interpretation No. 45 requires the guarantor to recognize a liability for the non-contingent component of the guarantee, this is the obligation to stand ready to perform in the event that specified triggering events or conditions occur. The initial measurement of this liability is the fair value of the guarantee at inception. The recognition of the liability is required even if it is not probable that payments will be required under the guarantee or if the guarantee was issued with a premium payment or as part of a transaction with multiple elements. Boykin has adopted the disclosure requirements of Interpretation No. 45 for all guarantees entered into prior to January 1, 2003. There are no guarantees which require recognition under this Interpretation as of December 31, 2004.

In December 2002, the FASB issued Statement No. 148, “Accounting for Stock-Based Compensation-Transition and Disclosure – an amendment of FASB Statement No. 123.” Statement No. 148 amends FASB Statement No. 123, “Accounting for Stock-Based Compensation,” to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, Statement No. 148 amends the disclosure requirements of Statement No. 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. Adoption did not have a material effect on the financial condition or results of operations of Boykin.

In January 2003, the FASB issued Interpretation No. 46, “Consolidation of Variable Interest Entities,” which addresses consolidation by business enterprises of variable interest entities. In general, a variable interest entity is a corporation, partnership, trust, or any other legal structure used for business purposes that either (a) does not have equity investors with voting rights or (b) has equity investors that do not provide sufficient financial resources for the entity to support its activities. A variable interest entity often holds financial assets, including loans or receivables, real estate or other property. A variable interest entity may be essentially passive or it may engage in research and development or other activities on behalf of another company. The objective of Interpretation No. 46 is not to restrict the use of variable interest entities but to improve financial reporting by companies involved with variable interest entities. Until now, a company generally has included another entity in its consolidated financial statements only if it controlled the entity through voting interests. Interpretation No. 46 changes that by requiring a variable interest entity to be consolidated by a company if that company is subject to a majority of the risk of loss from the variable interest entity’s activities or is entitled to receive a majority of the entity’s residual returns or both. The consolidation requirements of Interpretation No. 46 apply immediately to variable interest entities created after January 31, 2003. In December 2003, the FASB issued a revised Interpretation which modifies and clarifies various aspects of the original Interpretation. The consolidation requirements apply to older entities in the first fiscal year or interim period beginning after December 15, 2003 for those entities which may be defined as special purpose entities. Certain of the disclosure requirements apply in all financial statements issued after January 31, 2003, regardless of when the variable interest entity was established. Boykin does not have any unconsolidated variable interest entities as of December 31, 2004.

On April 30, 2003 the FASB issued Statement No. 149 (“SFAS 149”), “Amendment of Statement 133 on Derivative Instruments and Hedging Activities.” SFAS 149 amends and clarifies accounting for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities under Statement 133. In particular, this Statement clarifies under what circumstances a contract with an initial net investment meets the characteristic of a derivative as discussed in Statement 133 and it clarifies when a derivative contains a financing component that warrants special reporting in the statement of cash flows. SFAS 149 is effective for contracts entered into or modified after December 31, 2003 and for hedging relationships designated after December 31, 2003 and is to be applied prospectively. This Statement has not had and is not expected to have a material impact on Boykin’s financial position or results of operations.

In May 2003, the FASB issued Statement No. 150 (“SFAS 150”), “Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity,” which establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability. The effective date of a portion of the Statement has been indefinitely postponed by the FASB. Boykin did not enter into new financial

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instruments subsequent to May 2003 which would fall within the scope of this statement. This statement has not had and is not expected to have a material impact on our financial position or results of operations.

At December 31, 2004, Boykin had a Long-Term Incentive Plan, which is described more fully in Note 11. Boykin has adopted the disclosure only provisions of SFAS No. 123, “Accounting for Stock-Based Compensation,” and applies Accounting Principles Board Opinion No. 25 and related interpretations in accounting for its employee share option plan. If Boykin had elected to recognize compensation costs for the LTIP based on the fair value at the grant dates for option awards consistent with the method prescribed by SFAS No. 123, reported amounts of net loss and loss per share would have been changed to the pro forma amounts indicated below.

		Year Ended December 31,
		2004			2003			2002
		Pro Forma			Pro Forma			Pro Forma
Net loss attributable to common shareholders		$	(4,911	)	$	(8,177	)	$	(1,480	)
Stock-based employee compensation expense			(126	)		(126	)		(151	)
Proforma net loss attributable to common shareholders		$	(5,037	)	$	(8,303	)	$	(1,631	)
Proforma net loss attributable to common shareholders per share:
	Basic	$	(0.29	)	$	(0.48	)	$	(0.09	)
	Diluted	$	(0.29	)	$	(0.48	)	$	(0.09	)

In December 2004, the FASB issued revised SFAS No. 123 (Statement 123(R)), Share-Based Payment (“SFAS No. 123R”). SFAS No. 123R requires all entities to recognize the fair value of share-based payment awards (stock compensation) classified in equity, unless they are unable to reasonably estimate the fair value of the award. Boykin will adopt the provisions of SFAS No. 123R on July 1, 2005, using the modified prospective approach permitted by the literature. This approach requires that any unvested portion of options at the time of adoption be expensed in the earnings statement over the remaining service period of those options. Boykin expects adoption of this approach to result in an immaterial impact on net income.

In December 2004, the FASB decided to defer the issuance of their final standard on earnings per share (EPS) entitled “Earnings per Share – an Amendment to FAS 128.” The final standard will be effective in 2005 and will require retrospective application for all prior periods presented. The significant proposed changes to the EPS computation are changes to the treasury stock method and contingent share guidance for computing year-to-date diluted EPS, removal of the ability to overcome the presumption of share settlement when computing diluted EPS when there is a choice of share or cash settlement and inclusion of mandatorily convertible securities in basic EPS. Boykin is currently evaluating the proposed provisions of this amendment to determine the impact on its consolidated financial statements.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications

Certain reclassifications have been made to the prior year financial statements to conform with the current year presentation.

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3. Hotel Transactions:

The following table summarizes Boykin’s hotel acquisition and dispositions in 2004, 2003 and 2002:

						Percentage
		Acquisition/	Number of	Purchase/		owned by
Hotel	Location	Disposition Date	Rooms	Sale Price		Partnership	Manager
Acquisition:
Radisson Suite Beach Resort	Marco Island, FL	August 2003	233	$	27,250	100%	BMC
Dispositions:
Ramada Inn Bellevue Center	Bellevue, WA	November 2004	208	$	9,800	100%	BMC
Radisson Hotel Mount Laurel	Mount Laurel, NJ	September 2004	283	$	14,250	100%	BMC
Holiday Inn Minneapolis West	Minneapolis, MN	August 2004	196	$	9,325	91%	BMC
Marriott’s Hunt Valley Inn	Hunt Valley, MD	July 2004	392	$	31,000	91%	Davidson
Doubletree Portland Downtown	Portland, OR	March 2004	235	$	22,000	100%	BMC
Doubletree Spokane Valley	Spokane, WA	August 2003	237	$	5,400	100%	Hilton
Springfield	Springfield, OR	July 2003	234	$	6,500	100%	Hilton
Holiday Inn Lake Norman	Charlotte, NC	June 2003	119	$	2,550	100%	BMC
Hampton Inn Lake Norman	Charlotte, NC	February 2003	117	$	3,700	100%	BMC
Knoxville Hilton	Knoxville, TN	February 2003	317	$	11,500	100%	BMC

The operating results of the Radisson Suite Beach Resort are included in the consolidated operating results of Boykin starting on the date of acquisition.

4. Discontinued Operations:

The provisions of SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” require that hotels sold or held for sale be treated as discontinued operations. Boykin considers assets to be “held for sale” when they are under contract, significant non-refundable deposits have been made by the potential buyer and the assets are immediately available to be sold.

During 2004, Boykin disposed of the Doubletree Portland Downtown, Marriott’s Hunt Valley Inn, the Holiday Inn Minneapolis West, the Radisson Hotel Mount Laurel and the Ramada Inn Bellevue Center for aggregate proceeds of $86,375. The proceeds from the acquisition of the Doubletree Portland Downtown by the City of Portland through its power of eminent domain, were used to reduce the outstanding balance on the $130,000 term loan and for general corporate purposes. The proceeds from the sales of Marriott’s Hunt Valley Inn and the Holiday Inn Minneapolis West were used to reduce the outstanding balance on the credit facility. The proceeds from the sales of the Radisson Hotel Mount Laurel and the Ramada Inn Bellevue Center were used to reduce the outstanding balance on the credit facility and for general corporate purposes.

During 2003, Boykin sold the Knoxville Hilton, the Hampton Inn Lake Norman, the Holiday Inn Lake Norman, a hotel in Springfield, Oregon and the Doubletree Spokane Valley for aggregate proceeds of $29,650. The net proceeds of the Knoxville Hilton, Hampton Inn Lake Norman and Holiday Inn Lake Norman were applied to the $108,000 term loan in connection with a release of the assets as security for the loan. Net proceeds from the sale of the Springfield hotel and the Doubletree Spokane Valley were used to pay off outstanding amounts on Boykin’s previously existing credit facility as well as for general corporate purposes.

The assets and liabilities of the five properties sold in 2004 as of December 31, 2003 and the results of operations of the properties through the 2004 disposal/sale date and for years ended December 31, 2003, and 2002, have been reclassified as discontinued operations in the accompanying financial statements. The operating results of the five properties sold during 2003 have also been reclassified as discontinued operations in the accompanying financial statements. Interest expense and deferred loan costs have been attributed to the properties, as applicable, based upon the term loan amounts that were repaid with the proceeds of the sales.

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The results of operations and the financial position related to the applicable properties were as follows:

		Year Ended December 31,
		2004			2003			2002
Lease revenue		$	—		$	—		$	2,845
Hotel revenues			20,169			44,745			50,258
Hotel operating expenses			(16,281	)		(35,422	)		(38,153	)
Management fees to related party			(261	)		(419	)		(598	)
Management fees – other			(193	)		(672	)		(798	)
Property taxes, insurance and other			(1,076	)		(2,674	)		(2,979	)
Other expenses			(71	)		(35	)		(96	)
Interest income			14			18			17
Other income			40			42			564
Interest expense			(200	)		(1,307	)		(1,943	)
Real estate related depreciation and amortization			(2,602	)		(5,632	)		(6,797	)
Impairment of real estate			(4,300	)		(2,800	)		—
Amortization of deferred financing costs			(87	)		(200	)		(77	)
Minority interest in (earnings) loss of joint ventures			(2,095	)		1,235			—
Gain (loss) on sale of individual assets			15			550			(2	)
	Income (loss) from discontinued operations	$	(6,928	)	$	(2,571	)	$	2,241

		December 31,
		2003
Accounts receivable, net		$	879
Inventories			229
Other assets			669
Deferred financing costs, net			158
Investment in hotel properties, net			80,849
	Total assets	$	82,784
Accounts payable and accrued expenses		$	2,574
Accounts payable to related party			118
Term notes payable			16,870
Minority interest			210
	Total liabilities	$	19,772

5. Credit Facility:

In October 2003, Boykin entered into a new secured, revolving credit facility with a financial institution which enabled Boykin to borrow up to $78,000, subject to borrowing base and loan-to-value limitations. The credit facility was reduced from $78,000 to $60,000 in 2004. Boykin had borrowed $6,446 and $71,945 as of December 31, 2004 and 2003, respectively. The facility expires in October 2006 and bears interest at a floating rate of LIBOR plus 3.75% (6.19% at December 31, 2004). Boykin is required to pay a fee of 0.375% on the unused portion of the credit facility. The new facility is secured by five hotel properties with a net carrying value of $53,655 at December 31, 2004 and seven hotel properties with a carrying value of $90,518 at December 31, 2003.

The credit facility requires Boykin, among other things, to maintain a minimum net worth, a coverage ratio of EBITDA to debt service, a coverage ratio of EBITDA to debt service and fixed charges and a maximum leverage ratio. Further, Boykin is required to maintain the franchise agreement at each hotel and to maintain its REIT status. The terms of the agreement provide certain restrictions on common share dividends; however, Boykin is entitled to distribute sufficient dividends to maintain its REIT status. Boykin was in compliance with its covenants at December 31, 2004.

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6. Term Notes Payable:

Red Lion Inns Operating L.P. (“OLP”), a wholly-owned subsidiary of the Partnership, has a $130,000 term loan agreement that expires in June 2023 and may be prepaid without penalty after May 21, 2008. The outstanding balance as of December 31, 2004 and 2003 was $102,414 and $122,597, respectively. The loan bears interest at a fixed rate of 6.9% until May 2008, and at a new fixed rate to be determined thereafter. The loan was secured by six Doubletree hotels with a net carrying value of $189,333 at December 31, 2004 and seven Doubletree hotels with a net carrying value of $209,123 at December 31, 2003. The loan requires principal repayments based on a 25-year amortization schedule. Under covenants in the loan agreement, assets of OLP are not available to pay the creditors of any other Boykin entity, except to the extent of permitted cash distributions from OLP to Boykin. Likewise, the assets of other Boykin entities are not available to pay the creditors of OLP. The loan agreement also requires OLP to hold funds in escrow for the payment of capital expenditures, insurance and real estate taxes and requires OLP to maintain certain financial reporting requirements. OLP was in compliance with these requirements at December 31, 2004 and 2003.

Boykin Holding, LLC (“BHC”), a wholly-owned subsidiary of the Partnership, has a $108,000 term loan agreement. In connection with the sale of the Knoxville Hilton, the Hampton Inn Lake Norman and the Holiday Inn Lake Norman in 2003, the loan balance was reduced to $91,125. The loan had an initial maturity date of July 2003. Boykin exercised its options to extend the maturity date to July 2005. As of December 31, 2004 and 2003, the loan was secured by six hotel properties with a net carrying value of $65,916 and $61,273, respectively. The term loan bears interest at a rate that fluctuates at LIBOR plus 2.35% (4.63% at December 31, 2004). Under covenants in the loan agreement, assets of BHC are not available to pay the creditors of any other Boykin entity, except to the extent of permitted cash distributions from BHC to Boykin. Likewise, the assets of other entities are not available to pay the creditors of BHC. The loan agreement also requires BHC to hold funds in escrow for the payment of capital expenditures, insurance, interest and real estate taxes and requires BHC to maintain certain financial reporting requirements. BHC was in compliance with these requirements at December 31, 2004 and 2003.

In 2001, the Partnership entered into an interest rate swap which fixed the overall interest rate at 7.32% on $83,000 of debt designated to BHC’s $108,000 term note. The swap expired in July 2003, and Boykin did not renew the swap or purchase a replacement instrument. BHC also had interest rate protection on the remaining $25,000 original principal to cap the overall loan interest rate at no more than 10.25%. The initial cap matured in July 2003, at which time BHC purchased interest rate protection on the entire outstanding balance of $91,125, to cap the interest rate at no more than 10.25% for a period of one year. In conjunction with the extension of the maturity date of the loan to July 2005, BHC purchased another one-year cap. The cap had no value at December 31, 2004.

Boykin previously had an outstanding term loan which had an original balance of $45,000 and was secured by three hotel properties. Boykin used a portion of the net proceeds from the preferred stock offering in October 2002 (Note 7) to reduce the outstanding loan balance to $41,967. The loan bore interest at a rate that fluctuated at LIBOR plus 2.0% to LIBOR plus 4.0%. In October 2003, Boykin used a portion of the proceeds from the new credit facility to repay the entire outstanding balance of $41,967.

In 2003, White Sand Villas Development LLC, a wholly-owned subsidiary of Bellboy, closed on a $23,300 construction loan with a bank. The loan, which had an outstanding balance of $13,222 at December 31, 2003, required principal payments based upon the closing of White Sand Villas unit sales and was repaid during the first quarter of 2004. The loan bore interest at a rate that fluctuated at LIBOR plus 2.50%.

As a part of normal business activities, Boykin issues letters of credit through major banking institutions as required by certain debt and insurance agreements. As of December 31, 2004 and 2003, there were no letters of credit outstanding. As of December 31, 2004, Boykin has not entered into any significant other off-balance sheet financing arrangements.

F-22

Maturities of long-term debt at December 31, 2004 were as follows:

2005	$	95,010
2006		4,166
2007		4,448
2008		4,788
2009		5,134
2010 and thereafter		79,993
	$	193,539

7. Description of Capital Shares:

Common Shares

Holders of Boykin’s common shares are entitled to receive dividends, as and if declared by the Board of Directors, out of funds legally available therefore. The holders of common shares, upon any liquidation, dissolution or winding-up of Boykin, are entitled to share ratably in any assets remaining after payment in full of all liabilities of Boykin and all preferences of the holders of any outstanding preferred shares. The common shares possess ordinary voting rights, each share entitling the holder thereof to one vote. Holders of common shares do not have cumulative voting rights in the election of directors and do not have preemptive rights.

Preferred Shares

The Board of Directors is authorized to provide for the issuance of two classes of preferred shares, each in one or more series, to establish the number of shares in each series and to fix the designation, powers, preferences and rights (other than voting rights) of each series and the qualifications, limitations or restrictions thereon. Because the Board of Directors has the power to establish the preferences and rights of each series of preferred shares, the Board of Directors may afford the holders of any series of preferred shares preferences, powers and rights. The issuance of preferred shares could have the effect of delaying or preventing a change in control of Boykin. As a result of the preferred offering in October 2002 as discussed below, there were 181,000 preferred shares issued and outstanding at December 31, 2004 and 2003.

In October 2002, Boykin completed an underwritten public offering of 1,800,000 preferred depositary shares. Each depositary share represents a 1/10 interest in one share of Boykin’s 10¹/2% Class A Cumulative Preferred Shares, Series 2002-A, and has a liquidation preference of $25 per share. Dividends on the depositary shares are payable quarterly, upon authorization by the Board of Directors, beginning on January 15, 2003 at an annual rate of $2.625 per depositary share and are senior to the common shares. The shares are listed and traded on the New York Stock Exchange. The shares do not have a stated maturity and are not subject to any sinking fund or mandatory redemption provisions. Net proceeds from the offering were used to repay the outstanding balance on the previously existing credit facility and pay down $3,033 on the previously existing $45,000 term note (Note 6). An additional 10,000 depositary shares were later issued to cover over-allotments.

8. Limited Partnership Interests:

Pursuant to the Partnership Agreement, the minority interest limited partners of the Partnership have exchange rights which enable them to cause the Partnership to pay cash for their interests in the Partnership or, at Boykin’s election, to exchange common shares for such interests. The exchange rights may be exercised in whole or in part. As of December 31, 2004 and 2003, there were 2,718,256 minority interest limited partnership units outstanding. The number of shares issuable upon exercise of the exchange rights will be adjusted upon the occurrence of stock splits, mergers, consolidations or similar pro rata share transactions, which otherwise would have the effect of diluting the ownership interests of the limited partners or the shareholders of Boykin.

Boykin owns a corresponding Series A Preferred equity interest in the Partnership that entitles it to income and distributions in amounts equal to the dividends payable on the Series A Preferred shares discussed in Note 7.

9. Joint Venture with AEW:

In February 1999, Boykin formed a joint venture with AEW. Pursuant to the joint venture agreement, AEW has contributed $22,396 of equity capital into the joint venture. Boykin has contributed $7,465, has served as the operating partner of the joint venture for which it receives compensation from the joint venture, and has the right

F-23

to receive incentive returns based on the performance of acquired assets. Because of the non-controlling nature of its ownership interest in the joint venture, Boykin accounts for its investment utilizing the equity method.

In August 1999, the Boykin/AEW venture partnered with a private investor, forming Boykin Chicago, L.L.C., in which Boykin/AEW has a 75% interest. Boykin Chicago, L.L.C. purchased Hotel 71, located in Chicago, Illinois for cash consideration of $48,000. The acquisition was accounted for as a purchase and was funded with proceeds from a $30,000 secured mortgage note with the remainder in cash from the partners. In September 2000, Boykin purchased the 25% interest in Boykin Chicago, L.L.C. from the private investor for $6,270, thereby increasing Boykin’s total ownership interest in the hotel from 18.75% to 43.75%. A subsidiary of BMC leased the property pursuant to a long-term percentage lease agreement, which was terminated on June 30, 2001. Subsequently, a TRS of Boykin Chicago, L.L.C. entered into a management agreement with the subsidiary of BMC to manage the property.

10. Percentage Lease Agreements:

Rent due under percentage leases is the greater of minimum rent, as defined, or percentage rent. Percentage rent applicable to room and other hotel revenues varies by lease and is calculated by multiplying fixed percentages by the total amounts of such revenues over specified threshold amounts. Both the minimum rent and the revenue thresholds used in computing percentage rents applicable to room and other hotel revenues are subject to annual adjustments based on increases in the United States Consumer Price Index (“CPI”). Effective January 1, 2002, the majority of Boykin’s hotels were leased to consolidated subsidiaries under the TRS structure (Note 1).

Percentage lease revenues related to the hotel owned as of December 31, 2004 that is not operated under the TRS structure were $2,045, $1,958 and $1,885 respectively, for the years ended December 31, 2004, 2003 and 2002, of which approximately $673, $611 and $569, respectively, was in excess of minimum rent. As of December 31, 2004, the lease related to this hotel has a noncancelable remaining term of approximately three years, subject to earlier termination on the occurrence of certain contingencies, as defined. The net book value of the hotel subject to this lease was $7,739 and $7,997 as of December 31, 2004 and 2003, respectively. Future minimum rentals (excluding future CPI increases) to be received by Boykin from this lease for each of the years in the period 2005 to 2007 are as follows:

2005	$	1,418
2006		1,418
2007		1,209
	$	4,045

11. Share Compensation Plans:

Boykin has a Long-Term Incentive Plan (“LTIP”) which provides for the granting to officers and eligible employees of incentive or nonqualified share options, restricted shares, deferred shares, share purchase rights and share appreciation rights in tandem with options, or any combination thereof. Boykin has reserved 1,700,000 common shares for issuance under the LTIP.

F-24

Share Option Plan

The following summarizes information related to share option activity in 2004, 2003 and 2002:

					Weighted Average Per
		Number of Options			Share Exercise Price
Outstanding at January 1, 2002			594,139		$	12.84
	Options granted (officers and employees)		353,000		$	8.30
	Options exercised/ forfeited/expired		(108,000	)	$	10.48
Outstanding at December 31, 2002			839,139		$	11.24
	Options granted		—			—
	Options exercised/ forfeited/expired		—			—
Outstanding at December 31, 2003			839,139		$	11.24
	Options granted		—			—
	Options exercised/ forfeited/expired		—			—
Outstanding at December 31, 2004			839,139		$	11.24

					Exercisable Options
			Weighted Average
	Options		Fair Value of				Weighted Average Per
Year	Granted		Options Granted		Options Outstanding		Share Exercise Price
2004		—		—		613,006	$	12.21
2003		—		—		518,539	$	12.87
2002		353,000	$	1.05		422,405	$	13.72

As of December 31, 2004, information related to outstanding options was as follows:

	Total Options						Exercisable Options
			Weighted Average		Weighted Average				Weighted Average
Range of	Options		Per Share		Remaining		Options		Per Share
Exercise Prices	Outstanding		Exercise Price		Contractual Life		Outstanding		Exercise Price
$7.295 – $8.40		479,000	$	8.00		7.0 years		272,667	$	7.72
$10.938 – $13.75		235,139	$	12.36		4.5 years		215,339	$	12.49
$20.00 – $25.626		125,000	$	21.52		2.1 years		125,000	$	21.52
		839,139	$	11.24		5.6 years		613,006	$	12.21

Options vest over various periods ranging from one to nine years from the date of grant. In addition, certain outstanding options are also subject to vesting based upon financial performance targets. The term of each option granted will not exceed ten years from date of grant, and the exercise price may not be less than 100% of the fair market value of Boykin’s common shares on the grant date.

The fair value of employee share options used to compute the pro forma amounts of net income (loss) and basic earnings per share presented in Note 2 was estimated using the Black-Scholes option pricing model with the following weighted average assumptions:

	Options Issued In:
	2004		2003		2002
Dividend yield		—		—		10.00%
Expected volatility		—		—		34.30%
Risk-free interest rate		—		—		4.40%
Expected holding period		—		—		5.0  years

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Restricted Share Grant Plan

The following table summarizes Boykin’s restricted share grant activity related to its officers, eligible employees and non-employee directors.

	2004			2003
Restricted shares outstanding – beginning of year		288,740			219,352
New share grants		174,789			132,000
Shares cancelled		—			(3,481	)
Shares vested		(128,745	)		(59,131	)
Restricted shares outstanding – end of year		334,784			288,740

The restricted shares vest over various periods ranging from one to five years from the date of grant. The value of shares granted has been calculated based on the average of the high and low share price on the date of grant and is being amortized as compensation expense over the respective vesting periods. For the years ended December 31, 2004, 2003 and 2002, Boykin’s compensation expense related to these restricted shares was $1,009, $756 and $992, respectively. As of December 31, 2004, the unearned compensation related to restricted share grants was $2,008 and has been classified as a component of shareholders’ equity in the accompanying balance sheet.

12. Employee Benefit Plans:

Boykin maintains two employee benefit plans, the Boykin Lodging Company Money Purchase Pension Plan and the Boykin Lodging Company Profit Sharing Plan. Both plans are defined contribution plans which were established to provide retirement benefits to eligible employees. Boykin’s contributions to these plans for the years ended December 31, 2004, 2003 and 2002 totaled $292, $290 and $219, respectively.

13. Commitments:

Portions of land related to five of the hotels owned by Boykin as of December 31, 2004 are subject to land leases which expire at various dates through 2068. All leases require minimum annual rentals, and one lease requires percentage rent based on hotel revenues. The other four leases are adjusted for increases in CPI every one to ten years. Rental expense charged to operations related to these leases for the years ended December 31, 2004, 2003 and 2002 was $877, $889 and $942, respectively for continuing operations. Rental expense charged to operations related to discontinued operations for the years ended December 31, 2004, 2003 and 2002 totaled $6, $31 and $45, respectively.

Boykin entered into a lease agreement which expires in January 2008 for the office space currently used by Boykin and BMC and its subsidiaries. Pursuant to a shared services and office space agreement, BMC reimburses Boykin for its proportionate share of the cost of the space used under the lease agreement. Boykin’s expense charged to operations related to its proportionate share of the utilized space for the years ended December 31, 2004, 2003 and 2002 was $71, $75 and $64, respectively. Amounts reimbursed from BMC for the years ended December 31, 2004, 2003 and 2002 was $146, $147 and $119, respectively.

As a part of normal operations, Boykin has numerous operating leases related to the hotels in its portfolio or its corporate office. Additionally, as a part of ongoing capital improvement projects at the hotels and corporate offices, purchase obligations are often entered into.

Boykin’s annual obligations to make future minimum payments under the land lease agreements (excluding future CPI increases), the office space lease, other operating leases and purchase obligations which are not required to be reflected in the balance sheet as of December 31, 2004 are as follows:

2005	$	3,999
2006		1,075
2007		932
2008		624
2009		536
2010 and thereafter		22,677
	$	29,843

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In addition to the amounts disclosed above, as of December 31, 2004 Boykin has also entered into various franchise, management and other lease agreements that are contingent upon future results of operations of the hotels in its portfolio and provide for potential termination fees dependent upon the timing and method of termination of such agreements.

Upon purchasing the Doubletree Kansas City in 1997, Boykin assumed certain obligations related to a tax increment financing (“TIF”). The hotel is subject to a lease (the “Lease”) with the City of Kansas City (the “City”), which provides for rent payments equal to the debt service related to the Taxable Lease Revenue Bonds (Municipal Auditorium and the 13th and Wyandotte Hotel Redevelopment Projects), Series 1996 (the “Bonds”), issued by the Land Clearance for Redevelopment Authority of Kansas City, Missouri (the “Authority”), offset by incremental tax and parking revenues received by the City which are generated by the project, including real estate tax revenues and special assessments paid by the hotel and parking rental payments made by the hotel plus a credit enhancement fee. Revenues received by the City have, and are expected to continue to, fully offset rent payments which would otherwise be due pursuant to the Lease other than the credit enhancement fee. The present value of the fixed and determinable payments to be made pursuant to a special assessment, credit enhancement fees and a garage management agreement have been reflected as liabilities totaling $6,077 and $6,106 in Boykin’s financial statements as of December 31, 2004 and 2003, respectively, in accordance with the provisions of Emerging Issues Task Force 91-10, “Accounting for Special Assessments and Tax Increment Financing Entities.”

The City and the Authority have the right, commencing in 2006 and upon no less than 12 months notice, to require Boykin Kansas City LLC, owner of the hotel and wholly-owned subsidiary of the Partnership, to purchase certain property (including the land under the hotel and parking areas) at a price based primarily on the redemption price of the Bonds (the “Purchase”). The balance on the Bonds as of December 31, 2004 was $14,120. Under certain circumstances, this Purchase may be delayed by Boykin Kansas City LLC for up to two years. In the event the City requires Boykin Kansas City LLC to complete the Purchase and redeem the Bonds, the City has indicated that it will continue to make the incremental tax revenues available to support a refinancing of the Bonds. The hotel serves as collateral for the Lease and certain other obligations of Boykin Kansas City LLC.

14. Related Party Transactions:

The Chairman and Chief Executive Officer of Boykin is the majority shareholder of BMC.

As a result of the TRS transaction discussed in Note 1, Boykin acquired 16 subsidiaries of BMC whose primary assets were leasehold interests in 25 hotel properties owned by Boykin for consideration comprised of 1,427,142 limited partnership units valued at approximately $11,400 (based upon the average closing price of the common shares for the five-day period prior to the closing of the transaction), and the assumption of $1,600 of working capital liabilities in excess of assets relating to Westboy. In connection with these events, Boykin’s Board of Directors established a special committee (the “Special Committee”), consisting only of independent directors, to evaluate and negotiate the transactions with BMC. In determining the amount of the consideration paid to BMC, the Special Committee considered, among other things, the expected profitability of the entities acquired offset by the expected costs of management fees and income taxes to be incurred by the TRS following the transaction. The Special Committee also took into account the benefits of expected operational efficiencies as well as the elimination of potential lease termination fees upon the sale of hotels. The Special Committee was advised by independent counsel and financial advisors. Boykin believes that the methodology used to determine the consideration paid to BMC was reasonable.

Also in conjunction with the TRS transaction, effective January 1, 2002, BMC assumed management of 16 of the consolidated properties in which Boykin owned an interest. Additionally, during October 2002, BMC assumed management of the Doubletree Kansas City and the Pink Shell Beach Resort after Boykin terminated the previously existing management agreements with Interstate Hotels and Resorts (“Interstate”). During 2003, BMC assumed management of seven other hotels in conjunction with the Hilton Modification Agreement as discussed in Note 1 and assumed management of the Holiday Inn Minneapolis West after Boykin terminated the previously existing management agreement with Interstate. Management fees earned by BMC related to the continuing operations of these hotels during the years ended December 31, 2004, 2003 and 2002 totaled $5,801, $4,339 and $3,741, respectively. Management fees earned by BMC related to discontinued operations totaled $261, $419 and $598 for 2004, 2003 and 2002, respectively. An additional $25 and $12 was paid during 2004 and 2003, respectively, for other services provided pursuant to the management agreements.

F-27

The management agreements between Boykin and BMC were approved by the independent members of Boykin’s Board of Directors.

As of December 31, 2004 and 2003, Boykin had related party payables to BMC related to continuing operations of $1,063 and $873, primarily related to management fees and reimbursements of expenses on behalf of the hotel properties.

Boykin Chicago L.L.C. has entered into a management agreement with a wholly-owned subsidiary of BMC to manage Hotel 71. Management and other fees earned by the subsidiary was $483, $446 and $75 during 2004, 2003 and 2002, respectively. An additional $1 was paid for other services provided pursuant to the management agreement for each of the years ended 2004 and 2003. During 2004 and 2003, fees of $1 and $12 were paid to a wholly-owned subsidiary of BMC for design services related to capital improvements at the hotel.

During the years ended December 31, 2004, 2003 and 2002, Boykin paid a wholly-owned subsidiary of BMC $329, $630 and $192, respectively, for design and project management services and for reimbursement of expenses related to capital improvements at its consolidated hotels. During 2001, a subsidiary of BMC sold a portion of its business to an unrelated third party. A portion of the sales price is payable contingent upon future revenues of the business, including revenues from Boykin. During 2004, 2003 and 2002, an additional $53, $59 and $78 of sales proceeds was provided to BMC as a result of purchases made by Boykin.

Fees paid to BMC and its subsidiaries for services which are not subject to management agreements are at market prices as determined by the independent members of the Board of Directors. The Board’s market price determinations are based from time to time on market checks performed by management and outside consultants, comparative information provided by BMC and industry publications.

Boykin believes that the methodologies used for determining amounts to be paid to BMC and its subsidiaries for management and other services are reasonable.

15. Statements of Cash Flows, Supplemental Disclosures:

As of both December 31, 2004 and 2003, there were $1,188 of dividends and Partnership distributions which were declared but not paid.

Interest paid during the years ended December 31, 2004, 2003, and 2002 was $13,922, $16,743 and $20,240, respectively.

16. Quarterly Operating Results (Unaudited):

Boykin’s unaudited consolidated quarterly operating data for the years ended December 31, 2004 and 2003 follows. In the opinion of management, all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of quarterly results have been reflected in the data. Quarterly operating results are not necessarily indicative of the results to be achieved in succeeding quarters or years.

		For the 2004 Quarter Ended
		March 31			June 30			September 30			December 31
Total revenues		$	54,627		$	56,563		$	58,902		$	50,292
Loss attributable to common shareholders before discontinued operations			(1,546	)		(910	)		(191	)		(4,798	)
Discontinued operations, net of minority interest			(2,964	)		543			4,912			43
Net income (loss) attributable to common shareholders			(4,510	)		(367	)		4,721			(4,755	)
Loss attributable to common shareholders before discontinued operations per share:
	Basic		(0.09	)		(0.05	)		(0.01	)		(0.28	)
	Diluted		(0.09	)		(0.05	)		(0.01	)		(0.28	)
Net income (loss) attributable to common shareholders per share:
	Basic		(0.26	)		(0.02	)		0.27			(0.27	)
	Diluted		(0.26	)		(0.02	)		0.27			(0.27	)
Weighted average number of common shares outstanding (in thousands):
	Basic		17,397			17,412			17,447			17,450
	Diluted		17,574			17,446			17,529			17,587

F-28

		For the 2003 Quarter Ended
		March 31			June 30			September 30			December 31
Total revenues		$	55,638		$	58,940		$	61,721		$	55,256
Loss attributable to common shareholders before discontinued operations			(2,260	)		(1,975	)		(156	)		(2,256	)
Discontinued operations, net of minority interest			(466	)		345			(21	)		(1,388	)
Net loss attributable to common shareholders			(2,726	)		(1,630	)		(177	)		(3,644	)
Loss attributable to common shareholders before discontinued operations per share:
	Basic		(0.13	)		(0.11	)		(0.01	)		(0.13	)
	Diluted		(0.13	)		(0.11	)		(0.01	)		(0.13	)
Net loss attributable to common shareholders per share:
	Basic		(0.16	)		(0.09	)		(0.01	)		(0.21	)
	Diluted		(0.16	)		(0.09	)		(0.01	)		(0.21	)
Weighted average number of common shares outstanding (in thousands):
	Basic		17,317			17,339			17,344			17,344
	Diluted		17,413			17,420			17,445			17,509

17. Subsequent Event:

During February 2005, the two low-rise buildings at the Pink Shell Beach Resort & Spa, were demolished to make way for the new Captiva Villas tower.

F-29

BOYKIN LODGING COMPANY

SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION

AS OF DECEMBER 31, 2004

(IN THOUSANDS)

									Costs Capitalized						Gross Amounts at Which
					Initial Cost				Subsequent to Acquisition						Carried at Close of Period
							Buildings and					Building and					Building and
Description		Encumbrances			Land		Improvements		Land			Improvements			Land		Improvements		Total(f)(g)
Corporate Offices Cleveland, Ohio			—		$	—	$	—	$	—		$	35		$	—	$	35	$	35
Doubletree Berkeley Marina Berkeley, California			—	(c)		—		10,807		—			15,408			—		26,215		26,215
Buffalo Marriott Buffalo, New York			—	(c)		1,164		15,174		—			4,002			1,164		19,176		20,340
Cleveland Airport Marriott Cleveland, Ohio			—	(c)		1,175		11,441		—			9,136			1,175		20,577		21,752
Columbus North Marriott Columbus, Ohio			—	(a)		1,635		12,873		—			2,920			1,635		15,793		17,428
Melbourne Quality Suites Melbourne, Florida			—	(a)		3,092		7,819		—			(1,866	)		3,092		5,953		9,045
Best Western Fort Myers Island Gateway Hotel Ft. Myers, Florida			—	(c)		718		2,686		—			886			718		3,572		4,290
Holiday Inn Crabtree Raleigh, North Carolina			—	(c)		725		6,542		—			1,484			725		8,026		8,751
Melbourne Hilton Oceanfront Melbourne, Florida			—	(a)		852		7,699		—			(2,040	)		852		5,659		6,511
French Lick Springs Resort and Spa French Lick, Indiana			—			2,000		16,000		(3	)		1,843			1,997		17,843		19,840
Hampton Inn San Diego Airport/Sea World San Diego, California			—	(c)		1,000		7,400		—			702			1,000		8,102		9,102
Doubletree Kansas City Kansas City, Missouri			—	(d)		1,500		20,958		3,664			(5,717	)		5,164		15,241		20,405
High Point Radisson High Point, North Carolina			—	(a)		450		25,057		—			(1,944	)		450		23,113		23,563
Pink Shell Beach Resort & Spa Ft. Myers, Florida			—	(e)		6,000		13,445		(1,800	)		(9,596	)		4,200		3,849		8,049
Radisson Suite Beach Resort Marco Island, Florida			—			14,570		12,605		—			33			14,570		12,638		27,208
Doubletree Sacramento Sacramento, California			—	(b)		4,400		41,884		—			4,952			4,400		46,836		51,236
Doubletree Colorado Springs Colorado Springs, Colorado			—	(b)		3,340		31,296		—			1,831			3,340		33,127		36,467
Doubletree Boise Boise, Idaho			—	(b)		2,470		23,998		—			4,292			2,470		28,290		30,760
Doubletree Omaha Omaha, Nebraska			—	(b)		1,100		19,690		—			9,571			1,100		29,261		30,361
Doubletree Portland, Lloyd Center Portland, Oregon			—	(b)		3,900		61,633		—			5,673			3,900		67,306		71,206
Clarion Hotel & Conference Center Yakima, Washington			—			1,140		6,188		—			(3,023	)		1,140		3,165		4,305
Embassy Suites Southfield Southfield, Michigan			—	(a)		777		7,639		—			3,374			777		11,013		11,790
Doubletree Hotel San Antonio San Antonio, Texas			—	(b)		1,140		11,203		—			570			1,140		11,773		12,913
	Total				$	53,148	$	374,037	$	1,861		$	42,526		$	55,009	$	416,563	$	471,572

[Additional columns below]

[Continued from above table, first column(s) repeated]

										Life on Which
		Accumulated		Net Book						Depreciation in
		Depreciation		Value Land and						Statement of
		Buildings and		Buildings and		Date of		Date of		Operations is
Description		Improvements(h)		Improvements		Construction		Acquisition		Computed
Corporate Offices Cleveland, Ohio		$	24	$	11				1998		10 years
Doubletree Berkeley Marina Berkeley, California			6,434		19,781		1972		1996		20 years
Buffalo Marriott Buffalo, New York			5,510		14,830		1981		1996		25 years
Cleveland Airport Marriott Cleveland, Ohio			7,691		14,061		1970		1996		20 years
Columbus North Marriott Columbus, Ohio			4,850		12,578		1981		1996		25 years
Melbourne Quality Suites Melbourne, Florida			1,592		7,453		1986		1996		30 years
Best Western Fort Myers Island Gateway Hotel Ft. Myers, Florida			865		3,425		1986		1996		30 years
Holiday Inn Crabtree Raleigh, North Carolina			2,190		6,561		1974		1997		30 years
Melbourne Hilton Oceanfront Melbourne, Florida			1,251		5,260		1986		1997		35 years
French Lick Springs Resort and Spa French Lick, Indiana			4,669		15,171		1903		1997		30 years
Hampton Inn San Diego Airport/Sea World San Diego, California			1,844		7,258		1989		1997		30 years
Doubletree Kansas City Kansas City, Missouri			4,920		15,485		1969		1997		30 years
High Point Radisson High Point, North Carolina			5,531		18,032		1982		1998		30 years
Pink Shell Beach Resort & Spa Ft. Myers, Florida			576		7,473		1989		1998		30 years
Radisson Suite Beach Resort Marco Island, Florida			561		26,647		1986		2003		30 years
Doubletree Sacramento Sacramento, California			9,757		41,479		1974		1998		30 years
Doubletree Colorado Springs Colorado Springs, Colorado			7,151		29,316		1986		1998		30 years
Doubletree Boise Boise, Idaho			5,674		25,086		1968		1998		30 years
Doubletree Omaha Omaha, Nebraska			5,336		25,025		1970/81		1998		30 years
Doubletree Portland, Lloyd Center Portland, Oregon			13,999		57,207		1964/81		1998		30 years
Clarion Hotel & Conference Center Yakima, Washington			1,088		3,217		1968		1998		30 years
Embassy Suites Southfield Southfield, Michigan			1,458		10,332		1978		2000		30 years
Doubletree Hotel San Antonio San Antonio, Texas			1,693		11,220		1987		2000		30 years
	Total	$	94,664	$	376,908

(a)	These hotels are collateral for the line of credit.
(b)	These hotels are collateral for the $130,000 term note payable.

F-30

(c)	These hotels are collateral for the $108,000 term note payable.
(d)	Effective November 30, 2001, Interstate assigned their 20% minority interest in the joint venture which owns the hotel to the Partnership. The elimination of the minority interest in the hotel ($5,129) was accounted for as a reduction in the value of the building as of November 30, 2001. The hotel serves as collateral for certain obligations of Boykin Kansas City LLC related to a tax increment financing.
(e)	This activity includes the reclassification of the net book value of the Sanibel View Villas to other assets for their eventual sales, the disposal of cottages at the Pink Shell Beach Resort to make way for the construction of White Sand Villas, both of which occurred in 2002, and the 2003 transfer of certain land underlying the Captiva and Useppa buildings at the Pink Shell to other assets as the land will eventually be sold with the new Captiva Villas condominium units.
(f)	Aggregate cost for federal income tax reporting purposes at December 31, 2004 is as follows:

Land	$	51,763
Buildings and improvements		441,746
	$	493,509

(g) Reconciliation of Gross Amounts of Land, Buildings and Improvements

Balance as of December 31, 2003	$	558,036
Disposals		(107,926	)
Improvements and other additions		21,462
Balance as of December 31, 2004	$	471,572

(h) Reconciliation of Accumulated Depreciation of Buildings and Improvements

Balance at December 31, 2003	$	102,915
Disposals		(24,790	)
Depreciation expense		16,539
Balance at December 31, 2004	$	94,664

F-31

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Members of

Boykin/AEW, LLC and Subsidiaries

We have audited the accompanying consolidated balance sheet of Boykin/AEW, LLC and Subsidiaries (“Boykin/AEW”) as of December 31, 2004, and the related consolidated statements of operations, members’ equity and cash flows for the year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Boykin/AEW as of December 31, 2004, and the results of their operations and their cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. Schedule III is presented for purposes of additional analysis and is not a required part of the basic financial statements. This schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

/s/ Grant Thornton LLP

Cleveland, Ohio

March 1, 2005

F-32

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Members of

Boykin/AEW, LLC and Subsidiaries

We have audited the accompanying consolidated balance sheet of Boykin/AEW, LLC and Subsidiaries (“Boykin/AEW”) as of December 31, 2003, and the related consolidated statements of operations, members’ equity, and cash flows for each of the two years in the period ended December 31, 2003. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material respects, the financial position of Boykin/AEW as of December 31, 2003, and the results of their operations and their cash flows for each of the two years in the period ended December 31, 2003, in conformity with accounting principles generally accepted in the United States of America.

/s/ Deloitte & Touche LLP

Cleveland, Ohio

March 12, 2004

F-33

BOYKIN/ AEW, LLC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2004 AND 2003

(AMOUNTS IN THOUSANDS)

		2004			2003
ASSETS
Investment in hotel property		$	75,160		$	75,042
	Accumulated depreciation		(11,489	)		(8,882	)
Investment in hotel property – net			63,671			66,160
Cash and cash equivalents			1,646			1,145
Accounts receivable, net of allowance of $13 as of December 31, 2003			404			882
Deferred expenses – net			33			69
Other assets			221			345
		$	65,975		$	68,601
LIABILITIES AND MEMBERS’ EQUITY
Mortgage note payable		$	36,116		$	37,236
Accounts payable and accrued expenses			2,593			2,884
Minority interest in joint venture			6,781			7,081
MEMBERS’ EQUITY
Contributed capital			29,476			28,726
Distributions in excess of income			(8,991	)		(7,326	)
Total members’ equity			20,485			21,400
		$	65,975		$	68,601

See notes to consolidated financial statements.

F-34

BOYKIN/ AEW, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002

(AMOUNTS IN THOUSANDS)

			2004			2003			2002
Revenues:
	Hotel revenues:
		Rooms	$	14,131		$	12,929		$	8,629
		Food and beverage		973			1,301			1,167
		Other		989			712			253
	Total revenues			16,093			14,942			10,049
Expenses:
	Hotel operating expenses:
		Rooms		4,129			3,475			2,562
		Food and beverage		894			1,378			1,329
		Other		387			338			213
		General and administrative		1,783			1,258			1,240
		Marketing and franchise		1,785			1,862			1,945
		Utilities and maintenance		1,720			1,525			1,463
		Management fees – related party		483			446			75
	Total hotel operating expenses			11,181			10,282			8,827
	Property taxes and insurance and other			1,514			1,054			1,188
	Real estate related depreciation and amortization			3,102			3,099			1,938
	Asset management fees			196			191			172
		Total operating expenses		15,993			14,626			12,125
		Operating income (loss)		100			316			(2,076	)
	Investment income and other			35			14			26
	Interest expense			(1,760	)		(1,716	)		(1,648	)
	Amortization of deferred financing costs			(167	)		(277	)		(334	)
	Other amortization			(122	)		(5	)		—
	Minority interest in loss of joint venture			475			414			1,031
Loss before loss on disposal of assets				(1,439	)		(1,254	)		(3,001	)
	Loss on disposal of assets			(1	)		(5	)		(107	)
Net loss			$	(1,440	)	$	(1,259	)	$	(3,108	)

See notes to consolidated financial statements.

F-35

BOYKIN/AEW, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF MEMBERS’ EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002

(AMOUNTS IN THOUSANDS)

				Distributions
		Contributed		in Excess
		Capital		of Income			Total
Balance at January 1, 2002		$	20,390	$	(2,526	)	$	17,864
	Capital contributions		7,511		—			7,511
	Distributions paid to members		—		(246	)		(246	)
	Net loss		—		(3,108	)		(3,108	)
Balance at December 31, 2002			27,901		(5,880	)		22,021
	Capital contributions		825		—			825
	Distributions paid to members		—		(187	)		(187	)
	Net loss		—		(1,259	)		(1,259	)
Balance at December 31, 2003			28,726		(7,326	)		21,400
	Capital contributions		750		—			750
	Distributions paid to members		—		(225	)		(225	)
	Net loss		—		(1,440	)		(1,440	)
Balance at December 31, 2004		$	29,476	$	(8,991	)	$	20,485

See notes to consolidated financial statements.

F-36

BOYKIN/AEW, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002

(AMOUNTS IN THOUSANDS)

				2004			2003			2002
Cash flows from operating activities:
	Net loss			$	(1,440	)	$	(1,259	)	$	(3,108	)
	Adjustments to reconcile net loss to net cash flow provided by (used in) operating activities:
		Depreciation and amortization			3,391			3,381			2,272
		Loss on disposal of assets			1			5			107
		Minority interest			(475	)		(414	)		(1,031	)
		Changes in operating assets and liabilities -
			Accounts receivable		478			(59	)		(168	)
			Accounts payable and accrued expenses		(291	)		(401	)		273
			Other		2			21			(298	)
Net cash flow provided by (used in) operating activities					1,666			1,274			(1,953	)
Cash flows from investing activities:
	Improvements and additions to hotel property, net				(614	)		(1,946	)		(16,828	)
Net cash flow used in investing activities					(614	)		(1,946	)		(16,828	)
Cash flows from financing activities:
	Distributions to members				(225	)		(187	)		(246	)
	Borrowings of term note				—			1,344			6,656
	Payment of term note				(1,120	)		(764	)		—
	Payment of deferred financing costs				(131	)		—			(100	)
	Net contributions from joint venture partner				175			212			2,432
	Capital contributions				750			825			7,511
Net cash flow provided by financing activities					(551	)		1,430			16,253
Net change in cash and cash equivalents					501			758			(2,528	)
Cash and cash equivalents, beginning of year					1,145			387			2,915
Cash and cash equivalents, end of year				$	1,646		$	1,145		$	387

See notes to consolidated financial statements.

F-37

BOYKIN/ AEW, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002

(DOLLAR AMOUNTS IN THOUSANDS)

1. Background:

In February 1999, Boykin Lodging Company (“Boykin”), a publicly held real estate investment trust (“REIT”), through its operating partnership Boykin Hotel Properties, L.P., formed a joint venture with AEW Partners III, L.P. (“AEW”), an investment partnership managed by AEW Capital Management, L.P., a Boston-based real estate investment firm. The joint venture, Boykin/ AEW, LLC (“Boykin/ AEW”), is owned 75% by AEW while Boykin owns the remaining 25% interest.

In August 1999, Boykin/ AEW partnered with a private investor forming Boykin Chicago, L.L.C. (“Boykin Chicago”), in which Boykin/ AEW has a 75% interest. Boykin Chicago purchased the 421-room Executive Plaza hotel located in Chicago, Illinois for cash consideration of $48,000. The acquisition was accounted for as a purchase and was funded with proceeds from a $30,000 secured mortgage note (see Note 3) with the remainder in cash contributions from the partners. In September 2000, Boykin purchased the remaining 25% ownership interest in Boykin Chicago from the private investor thereby increasing Boykin’s total ownership interest in the hotel from 18.75% to 43.75%.

Boykin Chicago has entered into a management agreement with Boykin Management Company Limited Liability Company (“BMC”), an affiliated entity of Boykin, to manage the property.

The hotel is located at 71 East Wacker Drive, one block from Michigan Avenue in downtown Chicago and includes such amenities as meeting space and banquet facilities. The hotel also offers valet service, a health and fitness center and a business center.

In 2001, Boykin Chicago commenced a renovation of the hotel’s guestrooms, meeting rooms and food and beverage facilities. During 2002, Boykin Chicago completed the guestroom portion of the renovation and renamed the property “Hotel 71” to reflect its new position in the market as a four-star quality independent hotel. The renovation increased the number of rooms at the property by 33 units, bringing the total number of rooms to 454. The remaining portions of the renovation were completed in 2003.

In 2004, Boykin Chicago entered into a contract to sell Hotel 71.

2. Summary of Significant Accounting Policies:

Principles of Consolidation – The accompanying consolidated financial statements of Boykin/ AEW include Boykin/ AEW, Boykin Chicago and its wholly-owned TRS, 71 E. Wacker Leasing, Inc. All material intercompany transactions and balances have been eliminated. The results of operations contained within the consolidated financial statements reflect all costs of Boykin/ AEW doing business.

Investment in Hotel Property – Hotel property is stated at cost and is depreciated using the straight-line method over estimated useful lives ranging from ten to 30 years for building and improvements and three to ten years for furniture and equipment.

Investment in the hotel property as of December 31, 2004 and 2003 consisted of the following:

	2004			2003
Land	$	9,100		$	9,100
Buildings and improvements		58,387			57,813
Furniture and equipment		7,423			7,863
Construction in progress		250			266
		75,160			75,042
Less accumulated depreciation		(11,489	)		(8,882	)
Total	$	63,671		$	66,160

F-38

Boykin Chicago reviews the hotel property for impairment when events or changes in circumstances indicate that the carrying value of the hotel property may not be recoverable. Events or circumstances that may cause a review include, but are not limited to, adverse changes in the demand for lodging at the property due to declining national or local economic conditions, new hotel construction in the market where the hotel is located or changes in the expected holding period of the property. When such conditions exist, management performs an analysis to determine if the estimated undiscounted future cash flows from operations and the proceeds from the ultimate disposition of the hotel property exceeds its carrying value. If the estimated undiscounted future cash flows are less than the carrying amount of the asset, an adjustment to reduce the carrying amount to the hotel property’s estimated fair market value would be recorded and an impairment loss would be recognized. Boykin Chicago does not believe that there are any factors or circumstances indicating impairment of its investment in the hotel property at this time.

Cash and Cash Equivalents – Cash and cash equivalents are defined as cash on hand and in banks, plus short-term investments with an original maturity of three months or less.

Inventories – Inventories consisting primarily of food and beverages and gift store merchandise are stated at the lower of first-in, first-out cost or market.

Accounts Receivable – Accounts receivable, consisting primarily of hotel guest receivables, is stated at fair value. Bad debt expense for the years ended December 31, 2004, 2003 and 2002 was $13, $12 and $2, respectively.

Deferred Expenses — Net – Included in deferred expenses at December 31, 2004 and 2003 are the following:

	2004			2003
Financing costs	$	130		$	986
Accumulated amortization		(97	)		(917	)
Total	$	33		$	69

Deferred financing costs of the mortgage note are being amortized over the initial term of the related credit agreement, excluding any available extension terms. In 2004, additional financing costs amounted to $130 and write offs due to maturities of underlying agreements amounted to $986.

Minority Interest – Minority interest in joint venture represents Boykin’s direct 25% ownership in Boykin Chicago. Income and losses are allocated to minority interest based upon the joint venture partner’s percentage ownership throughout the period as defined in the joint venture agreement.

Hotel Revenues – Hotel revenues including room, food, beverage and other hotel revenues are recognized as the related services are delivered. Ongoing credit evaluations are performed and an allowance for potential credit losses is provided against the portion of accounts receivable that is estimated to be uncollectible.

Fair Value of Financial Instruments – Fair value is determined by using available market information and appropriate valuation methodologies. Boykin Chicago’s principal financial instruments are cash, cash equivalents, accounts receivable and the mortgage note payable. Cash, cash equivalents and accounts receivable, due to their short maturities, are carried at amounts which reasonably approximate fair value. The mortgage note payable (see Note 3) bears interest at variable market rates and its carrying value approximates market value at December 31, 2004.

Income Taxes – As Boykin/ AEW and Boykin Chicago are limited liability companies, no related provision has been made in the accompanying consolidated financial statements for income taxes for these entities since these taxes are the responsibility of the members. Upon formation on July 1, 2001, the TRS became subject to federal, state and local income taxes. The TRS accounts for income taxes in accordance with the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 109, Accounting for Income Taxes. During 2004, the TRS recorded income as a result of forgiveness of certain obligations in anticipation of the sale of the hotel, resulting in taxable income. The TRS has a deferred tax asset generated by net operating losses sufficient to offset the current year income. The TRS had previously recorded a 100% valuation allowance against the deferred tax asset, and therefore, no provision or benefit from income taxes is reflected in the accompanying consolidated statements of operations.

New Accounting Pronouncements – In November 2002, the FASB issued Interpretation No. 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others, which addresses the disclosure to be made by a guarantor in its interim and annual financial statements

F-39

about its obligations under guarantees. Interpretation No. 45 also requires the recognition of a liability by a guarantor at the inception of certain guarantees. Interpretation No. 45 requires the guarantor to recognize a liability for the non-contingent component of the guarantee, this is the obligation to stand ready to perform in the event that specified triggering events or conditions occur. The initial measurement of this liability is the fair value of the guarantee at inception. The recognition of the liability is required even if it is not probable that payments will be required under the guarantee or if the guarantee was issued with a premium payment or as part of a transaction with multiple elements. Boykin/ AEW has adopted the disclosure requirements of Interpretation No. 45 and will apply the recognition and measurement provisions for all guarantees entered into or modified after December 31, 2002. To date, Boykin/ AEW has not entered into guarantees.

In January 2003, the FASB issued Interpretation No. 46, “Consolidation of Variable Interest Entities,” which addresses consolidation by business enterprises of variable interest entities. In general, a variable interest entity is a corporation, partnership, trust, or any other legal structure used for business purposes that either (a) does not have equity investors with voting rights or (b) has equity investors that do not provide sufficient financial resources for the entity to support its activities. Interpretation No. 46 requires a variable interest entity to be consolidated by a company if that company is subject to a majority of the risk of loss from the entity’s activities or is entitled to receive a majority of the entity’s residual returns or both. In December 2003, the FASB issued a revised Interpretation which modified and clarifies various aspects of the original Interpretation. The consolidation requirements of Interpretation No. 46 apply immediately to variable interest entities created after January 31, 2003 and apply to older entities in the fourth quarter of 2003. Boykin/ AEW does not have any unconsolidated variable interest entities as of December 31, 2004.

In May 2003, the FASB issued Statement No. 150 (“SFAS 150”), “Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity,” which establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability. The effective date of a portion of the Statement has been indefinitely postponed by the FASB. Based upon the FASB’s deferral of this provision, the adoption of SFAS 150 did not have an impact on the consolidated financial statements.

Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

3. Mortgage Note Payable:

In 2001, Boykin Chicago obtained a $38,000 mortgage note from Corus Bank, N.A. (“Corus”) to refinance the initial $30,000 note obtained for the acquisition of the hotel and to provide $8,000 of funding related to the renovation of the hotel. Corus advanced $30,000 upon closing of the loan. An additional $6,656 was advanced during 2002, and the remaining $1,344 was funded in 2003. The loan had an original maturity date of March 2004 and contained two one-year extension options. In February 2004, Boykin Chicago exercised the first of the available options to extend the maturity date by one year; the loan is now scheduled to mature in March 2005. The loan is secured by the hotel property and bears interest at a rate that fluctuates at LIBOR plus 3.25% (5.27% at December 31, 2004). Principal payments commenced in April 2003 based upon a twenty-two year amortization schedule from the origination of the note. Principal payments of $1,120 and $764 were made in 2004 and 2003, respectively. The mortgage loan agreement contains certain financial reporting covenants and Boykin Chicago was in compliance with such covenants as of December 31, 2004 and 2003.

Subject to the provisions of the loan, additional funds of $4,000 are required to be posted to support the loan. The loan agreement allows for Boykin Chicago to defer this requirement to the members of Boykin/ AEW.

4. Percentage Lease Agreements:

Effective October 1, 2003, 71 E. Wacker Leasing, Inc. subleased space to MRG Enterprises, L.L.C. (“MRG”) to operate a restaurant within Hotel 71. The lease had an initial term of five years with three five year options to renew, subject to earlier termination in accordance with certain provisions. The rent due under the percentage lease agreement is the greater of minimum rent, as defined, or percentage rent. Percentage rent applicable to banquet, catering and all other gross sales is calculated by multiplying fixed percentages by the total amounts of such revenues over specified threshold amounts. Percentage lease revenues to 71 E. Wacker Leasing, Inc. were $216 and $159 for the years ended December 31, 2004 and 2003, respectively, of which none was in excess of

F-40

minimum rent. The lease agreement also requires reimbursements by MRG of certain expenses incurred by both 71 E. Wacker Leasing, Inc. and Boykin Chicago. Reimbursements for expenses received by Boykin Chicago and the hotel for the years ended December 31, 2004 and 2003 were $119 and $26, respectively. Percentage lease revenues and reimbursements for expenses were included in other income.

MRG was obligated under the lease to complete a build-out of the restaurant space. In September 20004, MRG filed for bankruptcy protection. Several of the contractors and the architect for the improvement of MRG’s leased premises were not paid in full by MRG prior to its filing for bankruptcy; therefore, mechanics liens were filed against the property. The total of the mechanics liens outstanding as of December 31, 2004 approximated $1,800. As a result, if the liens prove valid, are properly perfected, and are not corrected through MRG’s bankruptcy proceedings, the ultimate responsibility for the outstanding liens may be that of 71 E. Wacker Leasing, Inc. If 71 E. Wacker Leasing, Inc. were required to satisfy the liens, it is anticipated that ownership of the related assets would transfer to the hotel.

In May 2003, 71 E. Wacker Leasing, Inc. subleased space to Ampco System Parking to operate a parking garage. The lease has a term of five years. The rent due under the percentage lease agreement is base rent plus percentage rent. Percentage rent applicable to gross parking receipts, as defined, is calculated by multiplying fixed percentages by the total amounts of such revenues over specified threshold amounts. Percentage lease revenues to 71 E. Wacker Leasing, Inc. was $141 and $73 for the years ended December 31, 2004 and 2003, respectively, of which none was in excess of minimum rent.

Percentage lease revenues are reflected within other hotel revenues in the financial statements.

5. Related Party Transactions:

BMC is owned 53.8% by the Chairman and Chief Executive Officer of Boykin. Pursuant to the management agreement entered into effective July 1, 2001, Boykin Chicago paid BMC management fees of $483, $446 and $75 during 2004, 2003 and 2002, respectively.

Pursuant to the operating agreements of Boykin/ AEW and Boykin Chicago, asset management fees of $196, $191 and $172 were paid to Boykin for the years ended December 31, 2004, 2003 and 2002, respectively, for its role as the operating member. These fees are calculated based upon factors applied to aggregate contributions made by the members, as defined in the agreements.

There were outstanding payables to Boykin of $16 at both December 31, 2004 and 2003, primarily related to asset management fees. At December 31, 2004 and 2003, 71 E. Wacker Leasing, Inc. had outstanding payables to BMC of $5 and $58, respectively primarily related to management fees and reimbursements of expenses on behalf of the hotel.

6. Statements of Cash Flows, Supplemental Disclosures:

Interest paid during the years ended December 31, 2004, 2003 and 2002 was $1,902, $1,737 and $1,636 respectively.

F-41

BOYKIN/ AEW, LLC

SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION

AS OF DECEMBER 31, 2004

(IN THOUSANDS)

Costs Capitalized

Gross Amounts

Subsequent to

at Which Carried

Initial Cost

Acquisition

at Close of Period

Buildings and

Building and

Building and

Total

Description

Encumbrances

Land

Improvements

Land

Improvements

Land

Improvements

(b)(c)

Hotel 71, Chicago, Illinois

(a)

$

9,100

$

40,392

$

—

$

17,995

$

9,100

$

58,387

$

67,487

[Additional columns below]

[Continued from above table, first column(s) repeated]

	Accumulated								Life on Which
	Depreciation		Net Book						Depreciation in
	Buildings and		Value Land and						Statement of
	Improvements		Buildings and		Date of		Date of		Operations
Description	(d)		Improvements		Construction		Acquisition		is Computed
Hotel 71, Chicago, Illinois	$	8,779	$	58,708		1958		1999		30 years

(a)	This hotel is collateral for the $38,000 mortgage note payable.
(b)	Aggregate cost for federal income tax reporting purposes at December 31, 2004 is as follows:

Land	$	9,100
Buildings and improvements		58,198
	$	67,298

(c)
Reconciliation of Gross Amounts of Land, Buildings and Improvements

Balance as of December 31, 2003	$	66,913
Disposals		—
Improvements and other additions		574
Balance as of December 31, 2004	$	67,487

(d)
Reconciliation of Accumulated Depreciation of Buildings and Improvements

Balance at December 31, 2003	$	6,723
Disposals		—
Depreciation expense		2,056
Balance at December 31, 2004	$	8,779

F-42

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

March 15, 2005

BOYKIN LODGING COMPANY

By: /s/ Robert W. Boykin

Robert W. Boykin

Chairman of the Board and

Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

March 15, 2005	/s/ Robert W. Boykin ----------------------------------------------- Robert W. Boykin Chairman of the Board and Chief Executive Officer (Principal Executive Officer)
March 15, 2005	/s/ Shereen P. Jones ----------------------------------------------- Shereen P. Jones Executive Vice President, Chief Financial and Investment Officer (Principal Accounting Officer)
March 15, 2005	/s/ Ivan J. Winfield ----------------------------------------------- Ivan J. Winfield Director
March 15, 2005	/s/ Lee C. Howley, Jr. ----------------------------------------------- Lee C. Howley, Jr. Director
March 15, 2005	/s/ William H. Schecter ----------------------------------------------- William H. Schecter Director
March 15, 2005	/s/ Albert T. Adams ----------------------------------------------- Albert T. Adams Director
March 15, 2005	/s/ James B. Meathe ----------------------------------------------- James B. Meathe Director
March 15, 2005	/s/ Mark J. Nasca ----------------------------------------------- Mark J. Nasca Director

EXHIBIT INDEX

3.1	(a)	Amended and Restated Articles of Incorporation, as amended
3.2	(b)	Code of Regulations
4.1	(b)	Specimen Share Certificate
4.2	(a)	Dividend Reinvestment and Optional Share Purchase Plan
4.3	(d)	Shareholder Rights Agreement, dated as of May 25, 1999 between Boykin Lodging Company and National City Bank as rights agent
4.3a	(g)	Amendment to Shareholder Rights Agreement, dated as of December 31, 2001
10.1	(i)	Third Amended and Restated Agreement of Limited Partnership of Boykin Hotel Properties, L.P.
10.2	(b)	Form of Registration Rights Agreement
10.3	(b)	Long-Term Incentive Plan*
10.4	(b)	Directors’ Deferred Compensation Plan*
10.5	(b)	Employment Agreement between the Company and Robert W. Boykin*
10.6	(b)	Form of Percentage Lease
10.7	(b)	Intercompany Convertible Note
10.8	(b)	Agreements with General Partners of the Contributed Partnerships
10.9	(b)	Form of Noncompetition Agreement
10.10	(b)	Alignment of Interests Agreement
10.11	(c)	Description of Employment Arrangement between the Company and Richard C. Conti*
10.12	(d)	Limited Liability Company Agreement of Boykin/ AEW LLC dated as of February 1, 1999
10.13	(e)	Stock Purchase Option Agreement by and among Boykin Lodging Company, Boykin Hotel Properties, L.P. and AEW Partners III, L.P. dated as of February 1, 1999
10.14	(e)	Warrant to Purchase Class A Cumulative Preferred Stock, Series 1999-A of Boykin Lodging Company dated as of February 1, 1999
10.15	(e)	Registration Rights Agreement by and among Boykin Lodging Company and AEW Partners III, L.P. dated as of February 1, 1999
10.16	(f)	Key Employee Severance Plan*
10.17	(f)	Form of Severance Agreement*
10.18	(g)	Master Contribution Agreement between BMC, JABO LLC, the Company and the Partnership dated as of December 31, 2001
10.19	(g)	Form of Hotel Management Agreement*
10.20	(g)	Registration Rights Agreement between the Company and JABO LLC dated January 1, 2002
10.21	(j)	Description of Employment Arrangement between the Company and Shereen P. Jones*
10.22		Hotel Purchase and Sale Agreement; Hotel 71 Chicago, Illinois, By and Between Boykin Chicago L.L.C., as Seller and the Falor Companies, Inc., as Purchaser
10.23		Modification Letter – Stock Purchase Option Agreement by and among Boykin Lodging Company, Boykin Hotel Properties, L.P. and AEW Partners III, L.P. dated as of February 1, 1999
10.24		Modification of Employment Agreement between the Company and Robert W. Boykin*
12		Statement re Computation of Ratios
16.1	(h)	Letter of Deloitte & Touche LLP required by Item 304 of Regulation S-K
21		Subsidiaries of the Registrant
23.1		Consent of Independent Registered Public Accounting Firm
23.2		Consent of Independent Registered Public Accounting Firm
31.1		Certification Pursuant to Rule 13a-14(a), in Accordance with Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification Pursuant to Rule 13a-14(a), in Accordance with Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(a)	Incorporated by reference from Boykin’s Form 10-Q for the quarter ended June 30, 1999.
(b)	Incorporated by reference from Amendment No. 3 to Boykin’s Registration Statement on Form S-11 (Registration No. 333-6341) (the “Form S-11”) filed on October 24, 1996. Each of the above exhibits has the same exhibit number in the Form S-11.
(c)	Incorporated by reference from Boykin’s Form 10-Q for the quarter ended June 30, 1998.
(d)	Incorporated by reference from Boykin’s Form 10-Q for the quarter ended March 31, 1999.
(e)	Incorporated by reference from Boykin’s Form 10-Q for the quarter ended March 31, 1999.
(f)	Incorporated by reference from Boykin’s Form 10-K for the year ended December 31, 1999.
(g)	Incorporated by reference from Boykin’s Form 8-K filed on January 14, 2002.
(h)	Incorporated by reference from Boykin’s Form 8-K filed on April 20, 2004.
(i)	Incorporated by reference from Boykin’s Form 8-K filed on October 4, 2002.
(j)	Incorporated by reference from Boykin’s Form 10-K for the year ended December 31, 2002.
*	Management contract or compensatory plan or arrangement.

EX-10.22

                                                                   Exhibit 10.22

                        HOTEL PURCHASE AND SALE AGREEMENT

                                    HOTEL 71

                                CHICAGO, ILLINOIS

                                 BY AND BETWEEN

           BOYKIN CHICAGO L.L.C., A DELAWARE LIMITED LIABILITY COMPANY

                                    AS SELLER

                                       AND

               THE FALOR COMPANIES, INC., AN ILLINOIS CORPORATION
                                  AS PURCHASER

                        HOTEL PURCHASE AND SALE AGREEMENT

                                Table of Contents



Article                                                                 Page No.
- -------                                                                 --------
                                                                     
ARTICLE I DEFINITIONS AND REFERENCES.................................       1
    1.01   DEFINITIONS...............................................       1
    1.02   REFERENCES................................................       6

ARTICLE II SALE AND PURCHASE; "AS-IS" SALE...........................       6
    2.01   SALE AND PURCHASE.........................................       6
    2.02   PROPERTY SOLD "AS IS".....................................       9
    2.03   LIMITS OF ASSUMPTIONS AND ASSIGNMENTS.....................      11

ARTICLE III PURCHASE PRICE and DEPOSIT...............................      12
    3.01   PURCHASE PRICE............................................      12
    3.02   ALLOCATION OF PURCHASE PRICE..............................      13
    3.03   DEPOSIT ESCROW............................................      13

ARTICLE IV INSPECTION PERIOD.........................................      13
    4.01   INSPECTION PERIOD.........................................      13
    4.02   REVIEW AND INSPECTION.....................................      13
    4.03   TESTING...................................................      14
    4.04   ACCEPTANCE OR REJECTION...................................      14
    4.05   CONFIDENTIALITY...........................................      14
    4.06   TITLE AND SURVEY..........................................      15
    4.07   RELEASE AND INDEMNIFICATION...............................      16

ARTICLE V REPRESENTATIONS AND WARRANTIES.............................      16
    5.01   REPRESENTATIONS AND WARRANTIES OF SELLER..................      16
    5.02   REPRESENTATIONS AND WARRANTIES OF PURCHASER...............      23
    5.03   BROKERAGE.................................................      24
    5.04   DURATION OF REPRESENTATIONS AND WARRANTIES................      24
    5.05   SELLER'S INDEMNIFICATION..................................      25
    5.06   LIMITATION OF SELLER'S REPRESENTATIONS....................      25
    5.07   GUARANTY OR REPRESENTATIONS AND WARRANTIES................      26

ARTICLE VI CLOSING AND CLOSING DELIVERIES............................      26
    6.01   CLOSING...................................................      26
    6.02   ESCROW....................................................      26
    6.03   SELLER'S DELIVERIES.......................................      26
    6.04   PURCHASER'S DELIVERIES....................................      27
    6.05   EXPENSES..................................................      28
    6.06   CONCURRENT TRANSACTIONS...................................      28
    6.07   POSSESSION................................................      29
    6.08   RESTAURANT SPACE..........................................      29

ARTICLE VII ADJUSTMENTS AND PRORATIONS-CLOSING STATEMENTS............      30
    7.01   ADJUSTMENTS AND PRORATIONS................................      30


                                                                        
    7.02   PAYMENT...................................................      32
    7.03   CLOSING STATEMENTS........................................      32

ARTICLE VIII CONDITIONS TO SELLER'S OBLIGATIONS......................      33
    8.01   CONDITIONS................................................      33
    8.02   FAILURE OF SELLER CLOSING CONDITION.......................      34

ARTICLE IX CONDITIONS TO PURCHASER'S OBLIGATIONS.....................      34
    9.01   CONDITIONS................................................      34
    9.02   FAILURE OF PURCHASER CLOSING CONDITION....................      34

ARTICLE X ACTIONS AND OPERATIONS PENDING CLOSING.....................      34
   10.01   ACTIONS AND OPERATIONS PENDING CLOSING....................      34

ARTICLE XI CASUALTIES AND TAKINGS....................................      36
   11.01   CASUALTIES................................................      36
   11.02   TAKINGS...................................................      36

ARTICLE XII ADDITIONAL COVENANTS.....................................      37
   12.01   LIQUOR LICENSE; OTHER PERMITS; CONSENTS AND CLOSING
              CONDITIONS.............................................      37
   12.02   GUEST BAGGAGE.............................................      38
   12.03   SAFE DEPOSITS.............................................      38
   12.04   TAX APPEAL PROCEEDINGS....................................      38
   12.05   TERMINATION OF MANAGEMENT AGREEMENT.......................      39

ARTICLE XIII DEFAULTS AND REMEDIES...................................      39
   13.01   SELLER'S REMEDIES.........................................      39
   13.02   PURCHASER'S REMEDIES......................................      39

ARTICLE XIV EMPLOYEES................................................      39

ARTICLE XV MISCELLANEOUS.............................................      40
   15.01   NOTICES...................................................      40
   15.02   SURVIVAL..................................................      41
   15.03   CONSTRUCTION..............................................      41
   15.04   PUBLICITY.................................................      41
   15.05   ASSIGNMENT................................................      41
   15.06   COUNTERPARTS; FACSIMILE EXECUTION; INTEGRATION............      42
   15.07   GOVERNING LAW; JURISDICTION AND VENUE.....................      42
   15.08   FURTHER ASSURANCES........................................      43
   15.09   CONFIDENTIALITY...........................................      43
   15.10   ATTORNEYS' FEES...........................................      43
   15.11   PREVAILING PARTY..........................................      43
   15.12   DELIVERY OF DRAFTS NOT AN OFFER...........................      44
   15.13   SEVERABILITY..............................................      44

ARTICLE XVI GENERAL ESCROW PROVISIONS................................      44
   16.01   GENERAL ESCROW PROVISIONS.................................      44




                                      iii

                        HOTEL PURCHASE AND SALE AGREEMENT

     THIS HOTEL PURCHASE AND SALE AGREEMENT (this "AGREEMENT") is made this 5th
day of November, 2004, by and between Boykin Chicago L.L.C., a Delaware limited
liability company ("SELLER"), and The Falor Companies, Inc., an Illinois
corporation ("PURCHASER").

                                    RECITALS:

     A. Seller is the owner of the hotel and related facilities known as the
Hotel 71 located at 71 East Wacker Drive, Chicago, Illinois.

     B. Seller desires to sell, and Purchaser desires to purchase, such hotel
property and related facilities upon and subject to the terms and conditions set
forth in this Agreement.

                                   AGREEMENTS:

     NOW, THEREFORE, in consideration of the representations, warranties,
agreements, covenants, and conditions contained in this Agreement, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Seller and Purchaser agree as set forth below:

                                   ARTICLE I

                           DEFINITIONS AND REFERENCES

     1.01 DEFINITIONS. As used in this Agreement, the following terms shall have
the meanings indicated below:

          ACCOUNT CASH: The balances of all cash and securities and other
     instruments held by Seller or by Manager or for the benefit of Seller or
     the Property and deposited, held, or contained in any account, bank, or
     vault.

          ACCOUNTS RECEIVABLE: All accounts receivable with regard to the Hotel
     other than accounts receivable for room revenues for guests of the Hotel as
     of the Cut-off Time.

          ADDITIONAL DEPOSIT: Shall have the meaning given to it in Section
     3.01(b).

          AFFILIATE: With respect to a specific entity, any natural person or
     any firm, corporation, partnership, association, trust, or other entity
     which, directly or indirectly, controls or is under common control with the
     subject entity, and with respect to any specific entity or person, any
     firm, corporation, partnership, association, trust, or other entity which
     is controlled by the subject entity or person. For purposes hereof, the
     term "control" shall mean the possession, directly or indirectly, of the
     power to direct or cause the direction of the management and policies of
     any such entity or the power to veto major policy decisions of any such
     entity, whether through the ownership of voting securities, by contract, or
     otherwise.

          AGREEMENT: This Hotel Purchase and Sale Agreement, including the
     exhibits attached hereto and made a part hereof.

          ASSUMED LIABILITIES: Shall have the meaning given to it in Section
     2.03(a).

          BOOKINGS: Shall have the meaning given to it in Section 2.01(m).

          BOOKS AND RECORDS: Shall have the meaning given to it in Section
     2.01(k).

          BROKER: Shall have the meaning given to it in Section 5.03.

          BUSINESS DAY: Shall mean all days of the year except Saturdays,
     Sundays, and holidays recognized by the Federal Reserve Bank of New York.
     If any deadline provided in this Agreement falls on a day other than a
     Business Day, such deadline shall be extended until the first Business Day
     thereafter.

          CODE: Shall have the meaning given to it in Section 5.01(n)(iii).

          CONSUMABLES: Shall have the meaning given to it in Section 2.01(e).

          CLOSING: The consummation of the transaction contemplated by this
     Agreement.

          CLOSING DATE: A date that is mutually agreeable to Seller and
     Purchaser which is not later than forty-five (45) days after the expiration
     of the Inspection Period (or the next Business Day if such day falls on a
     date that is not a Business Day), subject to the right of Seller to extend
     the Closing Date pursuant to Section 6.08(b) of this Agreement.

          COLLECTIVE BARGAINING AGREEMENTS: These contracts listed in Exhibit
     C-5 under the heading "Collective Bargaining Agreements."

          COMPENSATION: The direct salaries and wages paid to, or accrued for
     the benefit of, any Employee, incentive compensation, vacation pay,
     severance pay, employer's contributions under F.I.C.A. or COBRA,
     unemployment compensation, workmen's compensation or other employment
     taxes, payments under Employee Benefit Plans, or benefits; to the extent
     Seller is responsible for the aforementioned at law.

          CUT-OFF TIME: 11:59 P.M. (Central Standard or Daylight Savings Time,
     as applicable) on the date prior to the Closing Date.

          DEED: Shall have the meaning given to it in Section 6.03(a).

          DEPOSIT: Shall have the meaning given to it in Section 3.01(b).

          DOCUMENTS: All plans, specifications, drawings, blueprints, surveys,
     environmental reports, and other documents in Seller's possession that
     relate to the Property.

          DILIGENCE: Shall have the meaning given to it in Section 4.01.


                                      U-2

          EMPLOYEE(S): All persons employed by Manager, or an Affiliate of
     Manager pursuant to Management Agreement or employment contracts or
     otherwise.

          EMPLOYEE BENEFIT PLANS: All "EMPLOYEE BENEFIT PLANS," as that term is
     defined in Section 3(3) of ERISA, and each other employee benefit plan or
     program to which Seller contributes on behalf of any of the Employees.

          ENVIRONMENTAL LAWS: Any federal, state and local laws, statutes,
     ordinances, rules, regulations (including the Comprehensive Environmental
     Response, Compensation, and Liability Act of 1980, as amended from time to
     time (42 U.S.C. Section 9601 et seq.) and the applicable provisions of all
     applicable state and local statutes, as amended from time to time, and
     rules and regulations promulgated thereunder), authorizations, judgments,
     decrees, administrative orders, concessions, grants, franchises, agreements
     and other governmental restrictions and requirements relating to the
     environment.

          ERISA: The Employee Retirement Income Security Act of 1974, as
     amended, and the rules and regulations promulgated thereunder.

          ESCROW: The escrow, if any, created for the purpose of facilitating
     the transactions contemplated by this Agreement pursuant to the escrow
     instructions with the Escrow Company.

          ESCROW COMPANY: Stewart Title Guaranty Company.

          EXCLUDED ASSETS: Those assets, if any, listed on Exhibit A to this
     Agreement, the Account Cash and reserve for replacement of fixtures,
     furnishings and equipment, the Management Agreement, the Accounts
     Receivable and the Employee Benefit Plans.

          EXCLUDED PERMITS: Those permits and licenses required for the
     ownership and operation of the Hotel which, under applicable law, are
     nontransferable.

          FINAL CLOSING STATEMENT: The Final Closing Statement required under
     Section 7.03(a).

          FIXTURES AND TANGIBLE PERSONAL PROPERTY: Shall have the meaning given
     to it in Section 2.01(c).

          GENERAL ASSIGNMENT: Shall have the meaning given to it in Section
     6.03(c).

          HOTEL: The hotel known as the Hotel 71 located at 71 East Wacker
     Drive, Chicago, Illinois and all related facilities and the lodging, food
     and beverage, and other businesses and activities related thereto and
     conducted at such hotel.

          HOTEL CONTRACTS: Shall have the meaning given to it in Section
     2.01(i).

          IMPROVEMENTS: Shall have the meaning given to it in Section 2.01(b).


                                      U-3

          INDEMNIFIED PARTIES: With respect to an entity, such entity's
     partners, trustees, officers, directors, employees, beneficiaries,
     shareholders, members, managers, advisors, and other agents and each of
     their respective partners, trustees, beneficiaries, employees, officers,
     directors, members, managers and shareholders.

          INITIAL DEPOSIT: Shall have the meaning given to it in Section
     3.01(a).

          INSPECTION PERIOD: Shall have the meaning given to it in Section 4.01.

          INVENTORY: Shall have the meaning given to it in Section 2.01(g).

          IT SYSTEMS: Shall have the meaning given to it in Section 2.01(f).

          LAND: Shall have the meaning given to it in Section 2.01(a).

          LEGAL REQUIREMENTS: All laws, statutes, codes, acts, ordinances,
     orders, judgments, decrees, injunctions, rules, regulations, permits,
     licenses, authorizations, directions, and requirements of all governments
     and governmental authorities having jurisdiction of the Property
     (including, for purposes of this Agreement, any local Board of Fire
     Underwriters), and the operation of the Hotel.

          LIABILITIES: All liabilities, demands, liens, interest, claims,
     actions or causes of action, assessments, losses, fines, penalties, costs
     (including, without limitation, response and/or remedial costs), damages
     and expenses including, without limitation, those asserted by any Federal,
     state or local governmental or quasi-governmental agency, third party, or
     former or present employee, including attorneys', consultants' and expert
     witness fees and expenses.

          LIQUOR LICENSE: Any and all licenses and permits required by any
     applicable governmental authorities for the sale and consumption of
     alcoholic beverages at the Hotel solely or jointly held by Seller.

          MANAGEMENT AGREEMENT: That certain Management Agreement between Seller
     and Manager pursuant to which Manager manages the Hotel.

          MANAGER: Chiboy LLC, an Ohio limited liability company.

          MATERIAL CONTRACTS: All Hotel Contracts which cannot be cancelled by
     thirty (30) days' or less written notice without penalty or premium
     payment.

          MISCELLANEOUS HOTEL ASSETS: Shall have the meaning given to it in
     Section 2.01(o).

          MONETARY EXCEPTION: Shall have the meaning given to it in Section
     4.06.

          NEW EXCEPTION: Shall have the meaning given to it in Section 4.06.

          NOTICE AND NOTICES: Shall have the meanings given to them in Section
     15.01.


                                      U-4

          OBLIGATIONS: All payments required to be made and all representations,
     warranties, covenants, agreements, and commitments required to be performed
     under the provisions of this Agreement by Seller or Purchaser, as
     applicable.

          OPENING OF ESCROW: Shall mean the earliest date on which Escrow
     Company has received both a fully executed copy of this Agreement and the
     Initial Deposit.

          PERMITS: Shall have the meaning given to it in Section 2.01(j).

          PERSONAL PROPERTY: All of the Property other than the Real Property.

          PRELIMINARY CLOSING STATEMENT: The Preliminary Closing Statement
     required by Section 7.03(a).

          PRESENT STANDARDS: The standards to which Seller and the Manager have
     generally operated and maintained the Hotel during the period prior to the
     execution of this Agreement.

          PROPERTY: Shall have the meaning given to it in Section 2.01.

          PROPRIETARY INFORMATION: Shall have the meaning given to it in Section
     15.09.

          PURCHASE PRICE: Shall have the meaning given to it in Section 3.01.

          REAL PROPERTY: The Land together with the Improvements located on the
     Land.

          RESTAURANT LEASE: That certain Restaurant Lease dated November 20,
     2002 between 71 East Wacker Leasing, Inc., a Delaware corporation, the
     landlord thereunder and an affiliate of Seller, and MRG Enterprises,
     L.L.C., an Illinois limited liability company, the tenant thereunder, with
     regard to the restaurant in the Hotel, together with all Exhibits thereto,
     including without limitation, the Ancillary Food Service Operating
     Agreement, a copy of which has been provided to Purchaser.

          RESTAURANT SPACE: The portion of the Real Property subject to the
     Restaurant Lease.

          RETAINED LIABILITIES: Shall have the meaning given to it in Section
     2.03(b).

          SELLER ENCUMBRANCE: Any mortgage or deed of trust or other monetary
     lien voluntarily granted or assumed by Seller and encumbering the Property
     or any portion thereof and any and all judgments or mechanic's or
     supplier's liens encumbering the Property or any portion thereof arising
     from work performed or materials furnished at the Property by or on behalf
     of Seller.

          SPACE LEASES: Shall have the meaning given to it in Section 2.01(h).

          SPACE LESSEE: Any person or entity entitled to occupancy of any
     portion of the Real Property under a Space Lease.


                                      U-5

          SUPPLIES: Shall have the meaning given to it in Section 2.01(d).

          SURVEY: Shall have the meaning given to it in Section 4.06.

          TERMINATION NOTICE: Shall have the meaning given to it in Section
     4.04.

          TITLE COMMITMENT: Shall have the meaning given to it in Section 4.06.

          TITLE COMPANY: Stewart Title Guaranty Company.

          TITLE DEFECTS: Shall have the meaning given to it in Section 4.06.

          TITLE POLICY: An ALTA Owner's Title Insurance Policy, Form B-1992,
     issued by the Title Company pursuant to the Title Commitment, in favor of
     Purchaser and in the amount of the portion of the Purchase Price allocated
     to the Real Property, showing good and marketable fee simple title in the
     Real Property to be vested in Purchaser, subject to only the title
     exceptions listed in the Title Policy.

          TRANSFER: Shall have the meaning given to it in Section 15.05.

          UCC: The Uniform Commercial Code in effect in the jurisdiction where
     the Real Property is located.

          UCC SEARCH: A search of the filings (at the state and county levels)
     pursuant to the UCC with regard to the Personal Property.

          WARN ACTS: Shall have the meaning given to them in Section 14.01.

          WARRANTIES: Shall have the meaning given to it in Section 2.01(l).

     1.02 REFERENCES. Except as otherwise specifically indicated, all references
to Section and Subsection numbers refer to Sections and Subsections of this
Agreement, and all references to Exhibits refer to the Exhibits attached to this
Agreement. The words "hereby," "hereof," "herein," "hereto," "hereunder,"
"hereinafter," and words of similar import refer to this Agreement as a whole
and not to any particular section or subsection of this Agreement. Captions are
for convenience only and shall not be used to construe the meaning of any part
of this Agreement.

                                   ARTICLE II

                         SALE AND PURCHASE; "AS-IS" SALE

     2.01 SALE AND PURCHASE. Seller hereby agrees to sell to Purchaser, and
Purchaser hereby agrees to purchase from Seller, on the terms and subject to the
conditions set forth in this Agreement, the following assets (collectively, the
"PROPERTY"):

          (a) LAND. The fee simple interest in the parcel of real estate
     described in Exhibit B, together with all right, title, and interest, if
     any, of Seller in and to all land


                                      U-6

     lying in any street, alley, road, or avenue, open or proposed, in front of
     or adjoining such land, and all easements, development rights, air rights,
     mineral rights, water rights, rights under restrictive covenants and other
     rights appurtenant to such land (collectively, the "LAND").

          (b) IMPROVEMENTS. The buildings, structures (surface and sub-surface,
     including underground parking), and other improvements, including such
     fixtures as shall constitute real property, located on the Land
     (collectively, the "IMPROVEMENTS").

          (c) FIXTURES AND TANGIBLE PERSONAL PROPERTY. All fixtures, furniture,
     furnishings, fittings, equipment, cars, trucks, machinery, tools,
     apparatus, signage, art work, appliances, draperies, carpeting, rugs, keys,
     and other articles of personal property now located on the Real Property
     and used or usable in connection with any part of the Hotel including,
     without limitation, those listed on Exhibit C-1, subject to such
     depletions, resupplies, substitutions, and replacements as shall occur and
     be made in the normal course of business but in accordance with Present
     Standards excluding, however: (i) Consumables; (ii) Supplies; (iii)
     equipment and other property leased pursuant to Hotel Contracts; (iv)
     property owned by Space Lessees, Manager, guests, employees, or other
     persons (other than Seller or any Affiliate of Seller, unless specifically
     denominated as an Excluded Asset) furnishing goods or services to the
     Hotel; (v) Improvements; and (vi) IT systems (collectively, the "FIXTURES
     AND TANGIBLE PERSONAL PROPERTY").

          (d) SUPPLIES. All china, glassware, linens, silverware, and uniforms,
     whether in use or held in reserve storage for future use, in connection
     with the operation of the Hotel, which are on hand on the date of this
     Agreement including, without limitation, those listed on Exhibit C-2,
     subject to such depletion and restocking as shall be made in the normal
     course of business but in accordance with Present Standards (collectively,
     the "SUPPLIES").

          (e) CONSUMABLES. All engineering, maintenance, and housekeeping
     supplies, including soap, cleaning materials and matches; stationery and
     printing; and other supplies of all kinds, whether unused or held in
     reserve storage for future use in connection with the maintenance and
     operation of the Hotel, which are on hand on the date of this Agreement
     including, without limitation, those listed on Exhibit C-3, subject to such
     depletion and restocking as shall occur and be made in the normal course of
     business but in accordance with Present Standards, excluding, however, (i)
     Supplies and (ii) all items of personal property owned by Space Lessees,
     Manager, guests, employees, or persons (other than Seller or any Affiliate
     of Seller, unless denominated as an Excluded Asset under this Agreement)
     furnishing food or services to the Hotel (collectively, the "CONSUMABLES").

          (f) IT SYSTEMS. All computer hardware, telecommunications and
     information technology systems located at the Hotel, and all computer
     software used at the Hotel (subject to the terms of any applicable third
     party license agreement) including, without limitation, those listed on
     Exhibit C-4, to the extent such IT Systems are transferable if they are the
     subject of a third party license agreement, or the parties obtain any
     consent necessary to effectuate such transfer (the "IT SYSTEMS");


                                      U-7

          (g) INVENTORY. All articles of personal property now located on the
     Real Property and used, usable, or salable in connection with any part of
     the Hotel, subject to such depletions, substitutions and replacements as
     shall occur and be made in the normal course of business, but in accordance
     with Present Standards including, without limitation, any inventory held
     for sale in any gift shop or newsstand operated by Seller or by Manager,
     but excluding: (i) Fixtures and Tangible Personal Property; (ii)
     Consumables; (iii) Supplies; (iv) equipment and other property leased
     pursuant to Hotel Contracts; (v) property owned by Manager, guests,
     employees, or other persons (other than Seller or any Affiliate of Seller,
     unless denominated as an Excluded Asset) furnishing goods or services to
     the Hotel; (vi) Improvements; and (vii) IT Systems (collectively, the
     "INVENTORY").

          (h) SPACE LEASES. All of Seller's right title of interest, if any, in
     leases, subleases, licenses, concessions, and other agreements for the use
     or occupancy of any portion of the Real Property (including any guarantee
     with respect to any obligation thereunder and all security and other
     deposits held by or on behalf of Seller) to the extent assignable
     excluding, however, Bookings and the Management Agreement (collectively,
     the "SPACE LEASES").

          (i) HOTEL CONTRACTS. All assignable service contracts, maintenance
     contracts, purchase orders, leases, and other contracts or agreements,
     including equipment leases capitalized for accounting purposes, booking and
     reservation agreements (credit card service agreements, and any amendments
     thereto and including all deposits made thereunder, with respect to the
     ownership, maintenance, operation, provisioning, or equipping of the Hotel,
     or any of the Property, as well as written warranties and guaranties
     relating thereto, if any, including, but not limited to, those relating to
     heating and cooling equipment and/or mechanical equipment including,
     without limitation, those listed on Exhibit C-5, but exclusive, however, of
     (i) insurance policies, (ii) the Bookings (iii) the Collective Bargaining
     Agreements, (iv) the Employee Benefit Plans; and (v) the Space Leases
     (collectively, the "HOTEL CONTRACTS").

          (j) PERMITS. All licenses, permits, certificates, authorizations,
     registrations, and approvals issued by any governmental authority used in
     or relating to the construction, ownership, occupancy, or operation of any
     part of the Property, including, without limitation, all of Seller's right,
     title and interest in those necessary for the sale and on-premises
     consumption of food, liquor, and other alcoholic beverages including,
     without limitation, those listed on Exhibit C-6, together with any deposits
     made by Seller or for the benefit of Seller thereunder (collectively, the
     "PERMITS").

          (k) BOOKS AND RECORDS. All of Seller's right, title and interest in
     and to (a) all Space Lessee and Material Contract counterparty
     correspondence, billing and other files, (b) all property surveys,
     structural reviews, environmental assessments or audits, architectural
     drawings and engineering, geophysical, soils, seismic, geologic,
     environmental (including with respect to the impact of materials used in
     the construction or renovation of the Improvements) and architectural
     reports, studies and certificates pertaining to the Property, and (c) all
     accounting, tax, financial, and other books and records relating to the
     use, maintenance, leasing and operation of the Property including,


                                      U-8

     without limitation, profiles, contact information, histories, preferences,
     and other information obtained in the ordinary course of business from
     guests of the Hotel, but excluding Seller's internal appraisals,
     valuations, projections and similar internal records and excluding items
     that are legally privileged or that constitute attorney work product as
     long as such privileged is not utilized for the primary purpose of avoiding
     disclosure of Purchaser, and documents that are subject to a bona fide
     confidentiality agreement with a third party that prohibits their
     disclosure by Seller to Purchaser (collectively, the "BOOKS AND RECORDS").

          (l) WARRANTIES. All of Seller's right, title and interest in and to
     all presently effective and assignable warranties, guaranties,
     representations or covenants given to or made in favor of Seller in
     connection with the acquisition, development, construction, maintenance,
     repair, renovation, operation or inspection of any of the Property,
     including any made under any construction contracts and the service or
     maintenance contracts (collectively, the "WARRANTIES").

          (m) BOOKINGS. Agreements for the use or occupancy of guest rooms and
     meeting and banquet facilities or other facilities of the Hotel, including
     any off-site catering, for any time after the Cut-Off Time, including all
     deposits held by or on behalf of Seller with respect thereto (collectively,
     the "BOOKINGS").

          (n) MISCELLANEOUS HOTEL ASSETS. All contract rights, tradenames,
     trademarks, logos, copyrights, goodwill, website, and other items of
     intangible personal property relating to the ownership of the Property or
     the operation of the Hotel owned by Seller, but excluding (i) Bookings;
     (ii) Hotel Contracts; (iii) the Management Agreement; (iv) Space Leases;
     (v) Permits; (vi) Books and Records; (vii) refunds, rebates, or other
     claims, or any interest thereon, for periods or events occurring prior to
     the Cut-off Time; (viii) utility and similar deposits; (ix) prepaid
     insurance or other prepaid items; or (xi) prepaid license and permit fees;
     except to the extent that Seller receives a credit on the Final Closing
     Statement for any such excluded item or matter (collectively, the
     "MISCELLANEOUS HOTEL ASSETS").

     Notwithstanding anything to the contrary set forth above, the Property
     shall not include any of the Excluded Assets, all of which shall be
     retained by Seller.

     2.02 PROPERTY SOLD "AS IS".

          (a) Purchaser acknowledges, represents and warrants that, except as
     expressly provided in this Agreement, (i) any information ("Information")
     supplied or made available by Seller, whether written or oral, or in the
     form of maps, surveys, plats, soil reports, engineering studies,
     environmental studies, inspection reports, plans, specifications, or any
     other information whatsoever, without exception, pertaining to the
     Property, any and all records, rent rolls, and other documents pertaining
     to the use and occupancy of the Property, income thereof, the cost and
     expenses of maintenance thereof, and any and all other matters concerning
     the condition, suitability, integrity, marketability, compliance with law,
     or other attributes or aspects of the Property, or a part thereof, is
     furnished to Purchaser solely as a courtesy; (ii) THE INFORMATION IS


                                      U-9

     PROVIDED, AND THE PROPERTY IS PURCHASED, ON AN AS-IS-WHERE-IS BASIS AND
     EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT SELLER MAKES NO
     REPRESENTATION, EXPRESS OR IMPLIED, OR ARISING BY OPERATION OF LAW OR
     OTHERWISE, INCLUDING, BUT IN NO WAY LIMITED TO, ANY WARRANTY OF CONDITION,
     MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE AS TO THE INFORMATION
     OR THE PROPERTY; and (iii) no representations, whether written or oral,
     have been made by Seller, or its agents or employees in order to induce
     Purchaser to enter into this Agreement. Without limiting the generality of
     the foregoing, Purchaser acknowledges, warrants and represents to Seller
     that neither Seller nor its agents or employees have made any
     representations or statements, whether written or oral, to Purchaser
     concerning the investment potential, operation or resale of the Property at
     any future date, at a profit or otherwise, nor has Seller or its agents or
     employees rendered any advice or expressed any opinion to Purchaser
     regarding any tax consequences of ownership of the Property.

          (b) Purchaser acknowledges, represents and warrants that as of the
     Closing Date, Purchaser will be familiar with the Property and will have
     made such independent investigations as Purchaser deems necessary or
     appropriate concerning the Property. If Purchaser elects to proceed with
     the purchase of the Property, any objections which Purchaser may have with
     respect to the Property shall be waived by Purchaser. Except as expressly
     provided in this Agreement, Seller makes no representations or warranties
     and specifically disclaims any representation, warranty, or guaranty oral
     or written, past, present or future with respect to the physical condition
     or any other aspect of the Property, including, without limitation, the
     structural integrity of the Improvements, the manner, construction,
     condition, and state of repair or lack of repair of any of the
     Improvements, the conformity of the Improvements to any plans or
     specifications for the Property, including, but not limited to, any plans
     and specifications that may have been or which may be provided to
     Purchaser, the conformity of the Property to past, current or future
     applicable zoning or building code requirements or the compliance with any
     other laws, rules, ordinances, or regulations of any government or other
     body, the financial earning capacity or history or expense history of the
     operation of the Property, the nature and extent of any right-of-way,
     lease, possession, lien encumbrance, license, reservation, condition, or
     otherwise, the existence of soil instability, past soil repairs, soil
     additions or conditions of soil fill, susceptibility to landslides,
     sufficiency of undershoring, sufficiency of drainage, whether the Property
     is located wholly or partially in a flood plain or a flood hazard boundary
     or similar area, the existence or non-existence of hazardous waste or other
     toxic materials of any kind (including, without limitation, asbestos) or
     any other matter affecting the stability or integrity of the Land and/or
     the Improvements.

          (c) Seller shall not be responsible for any failure to investigate the
     Property on the part of Seller, any real estate broker or sales agent, or
     any other agent or employee of Seller or any third party.

          (d) Except as expressly provided in this Agreement, including but not
     limited to Section 5.05, as part of Purchaser's agreement to purchase and
     accept the Property AS-IS-WHERE-IS, and not as limitation on such
     agreement, PURCHASER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES AND
     RELEASES ANY


                                      U-10

     AND ALL CLAIMS PURCHASER MIGHT HAVE REGARDING ANY FORM OF WARRANTY, EXPRESS
     OR IMPLIED, OF ANY KIND OR TYPE, RELATING TO THE PROPERTY AND THE
     INFORMATION. SUCH WAIVER AND RELEASE IS ABSOLUTE, UNCONDITIONAL,
     IRREVOCABLE, COMPLETE, TOTAL AND UNLIMITED IN ANY WAY. SUCH WAIVER AND
     RELEASE INCLUDES, BUT IS NOT LIMITED TO, A WAIVER AND RELEASE OF EXPRESS
     WARRANTIES, IMPLIED WARRANTIES, WARRANTIES OF FITNESS FOR A PARTICULAR USE,
     WARRANTIES OF MERCHANTABILITY, WARRANTIES OF HABITABILITY, STRICT LIABILITY
     RIGHTS AND CLAIMS OF EVERY KIND AND TYPE, INCLUDING BUT NOT LIMITED, TO
     CLAIMS REGARDING DEFECTS WHICH WERE NOT OR ARE NOT DISCOVERABLE, PRODUCT
     LIABILITY CLAIMS, PRODUCT LIABILITY TYPE CLAIMS, ANY RIGHTS AND CLAIMS
     RELATING TO OR ATTRIBUTABLE TO ENVIRONMENTAL CONDITIONS, ALL OTHER EXTANT
     OR LATER CREATED OR CONCEIVED OF STRICT LIABILITY OR STRICT LIABILITY TYPE
     CLAIMS AND RIGHTS, SUBJECT TO THE EXPRESS PROVISIONS OF THIS AGREEMENT

     2.03 LIMITS OF ASSUMPTIONS AND ASSIGNMENTS.

          (a) ASSUMPTION OF CERTAIN LIABILITIES. Purchaser shall assume and be
     responsible for the timely satisfaction or performance, as the case may be,
     of all liabilities or obligations arising under or in connection with the
     Property and the business related to the Property to the extent such
     liabilities or obligations arise or are incurred and are first required to
     be performed after the Closing Date (collectively, the "ASSUMED
     LIABILITIES").

          (b) LIABILITIES NOT ASSUMED. With the exception of the Assumed
     Liabilities and as stated otherwise herein, Purchaser shall not by
     execution and performance of this Agreement or otherwise, assume or
     otherwise be responsible for any liability or obligation of any nature of
     Seller or claims of such liability or obligation, whether arising out of
     occurrences prior to, at, or after the date hereof (collectively, the
     "RETAINED LIABILITIES").

          (c) ASSIGNMENT OF HOTEL CONTRACTS. Not later than ten (10) days prior
     to the end of the Inspection Period, Purchaser shall notify Seller of any
     Hotel Contract that Purchaser does not elect to assume. Any such Hotel
     Contract not assumed by Purchaser shall be deemed a part of the Retained
     Liabilities; provided, however, that in the event Purchaser elects not to
     assume all of the Hotel Contracts, then Seller may terminate this Agreement
     without liability by providing Purchaser with written notice of termination
     within ten (10) days of receipt of Purchaser's election not to assume all
     of the Hotel Contracts.

          (d) NON-ASSIGNMENT OF CERTAIN PROPERTY. To the extent that the
     assignment hereunder of any of the Hotel Contracts, any of the Space Leases
     or the Restaurant Lease shall require the consent of the other party (or in
     the event that any of the same shall be non-assignable), neither this
     Agreement nor any action taken pursuant to its provisions shall constitute
     an assignment or an agreement to assign if such


                                      U-11

     assignment or attempted assignment would constitute a breach thereof or
     result in the loss or diminution in value thereof. Seller and Purchaser
     agree to each use reasonable efforts to obtain any assignments where
     necessary; provided, however, the failure to obtain any such assignments
     shall not effect Purchaser's assumption of the liabilities under such Hotel
     Contracts, Space Leases or Restaurant Lease in accordance with Section
     2.03(a) hereof.

                                  ARTICLE III

                           PURCHASE PRICE AND DEPOSIT

     3.01 PURCHASE PRICE. The purchase price (the "PURCHASE PRICE") for the
Property to be paid by Purchaser to Seller at the Closing shall be NINETY-TWO
MILLION FIVE HUNDRED THOUSAND AND 00/100 Dollars ($92,500,000.00). The Purchase
Price shall be payable by Purchaser as follows:

          (a) Purchaser has previously deposited in an interest bearing account,
     with the Escrow Company, as escrow agent, the amount of One Million and
     00/100 Dollars ($1,000,000.00) by a certified check or wire transfer of
     immediately available funds as a deposit (the "INITIAL DEPOSIT"). Purchaser
     shall have the right to cancel this Agreement and the Escrow for any reason
     or no reason prior to the expiration of the Inspection Period. Subject to
     the provisions of Section 3.01(d) and 3.01(e), if Purchaser terminates this
     Agreement prior to the expiration of the Inspection Period the Initial
     Deposit shall be fully refundable to Purchaser without off-set.

          (b) Unless Purchaser has terminated this Agreement as provided in
     Section 4.04, on or before the expiration of the Inspection Period,
     Purchaser shall deposit with the Escrow Company, as escrow company, the
     additional amount of One Million and 00/100 Dollars ($1,000,000.00) by a
     certified check or wire transfer of immediately available funds as an
     additional deposit (together with interest earned thereon, the "ADDITIONAL
     DEPOSIT", and together with the Initial Deposit, and interest earned on the
     Initial Deposit or Additional Deposit, the "DEPOSIT").

          (c) On the date of Closing, Purchaser shall pay the balance of the
     Purchase Price, less the amount of the Deposit and subject to the
     prorations and adjustments provided for in this Agreement, including,
     without limitation, a possible reduction pursuant to Section 6.08(b), in
     cash by certified check or wire transfer of immediately available funds to
     the Escrow Company, as escrow company, in accordance with the terms and
     conditions of this Agreement. Purchaser shall be responsible for any income
     taxes payable with respect to any interest and/or dividends earned with
     respect to the Deposit and shall deliver a form W-9 to Escrow Company in
     connection therewith.

          (d) If Purchaser or its agents issue a press release or hold a press
     conference about the proposed transaction or otherwise disclose non-public
     information traceable to Purchaser without the prior written consent of
     Seller after September 9, 2004, the Deposit shall become non-refundable and
     shall immediately be released to Seller (but shall be applied against the
     Purchase Price in the event Purchaser performs its obligations under


                                      U-12

     the Agreement). Notwithstanding the foregoing, Purchaser shall have the
     right to commence efforts to market sales of to be formed condominium units
     comprising part of the Hotel on the later of (a) the expiration of the
     Inspection Period and (b) November 25, 2004, provided that in no event
     shall Purchaser (i) disclose the terms or timing of the transaction
     contemplated by this Agreement; (ii) represent that they own the Hotel;
     (iii) commence the process of creating a condominium; or (iv) purport to
     bind the Seller or otherwise enter into any binding contract with respect
     to the sale of such units prior to the Closing.

          (e) Purchaser and Seller acknowledge and agree that a portion of the
     Initial Deposit equal to $250,000 is not refundable to the Purchaser if the
     Purchaser terminates this Agreement prior to the expiration of the
     Inspection Period. Purchaser acknowledges that if Purchaser terminates this
     Agreement prior to the expiration of the Inspection Period, Purchaser shall
     be entitled to $750,000 plus interest accrued on such $750,000 and Seller
     shall be entitled to $250,000 plus interest accrued on the $250,000.

     3.02 ALLOCATION OF PURCHASE PRICE. Seller and Purchaser hereby agree that
the Purchase Price shall be allocated among the Land, the Improvements and
Personal Property as set forth in Exhibit C for federal, state and local tax
purposes. The parties shall file all federal, state and local tax returns and
related documents consistent with the allocations set forth in Exhibit C.

     3.03 DEPOSIT ESCROW. The Deposit shall be held and disbursed by the Escrow
Company acting as escrow company. The Deposit shall be invested in a federally
issued or insured interest bearing instrument and shall be paid to the party to
which the Deposit is paid pursuant to the provisions of this Agreement. If the
sale of the Property is consummated in accordance with the terms of this
Agreement, the Deposit shall be applied to the Purchase Price to be paid by
Purchaser at the Closing. In the event of a default under this Agreement by
Purchaser or Seller, the Deposit shall be applied as provided in this Agreement.

                                   ARTICLE IV

                                INSPECTION PERIOD

     4.01 INSPECTION PERIOD. The "INSPECTION PERIOD" shall be the period from
the date of this Agreement through 6:00 P.M. (Eastern Daylight Savings Time) on
November 19, 2004, subject to extension by the Seller pursuant to Section
5.01(n)(vii)(A). Purchaser and its representatives shall be permitted to enter
upon the Property at any reasonable time and from time to time during the
Inspection Period to examine, inspect, and shall be provided with reasonable
access to the books and records and other records and documentation with respect
to the Property for its review of the same and shall have access to key
Employees responsible for the management and maintenance of the Hotel
(collectively, "DILIGENCE"). The Diligence shall be subject to the terms,
conditions, and limitations set forth in this Article IV. As part of the
Diligence, Seller shall provide to Purchaser the diligence items listed on the
attached Exhibit D.

     4.02 REVIEW AND INSPECTION. Purchaser shall have a right, subject to the
rights of tenants, to enter upon the Property for the purpose of conducting its
Diligence provided that in


                                      U-13

each such instance (i) Purchaser notifies Seller of its intent to enter the
Property to conduct its Diligence not less than twenty-four (24) hours prior to
such entry and (ii) the date and approximate time period are scheduled with
Seller or the Manager. At Seller's election, a representative of Seller shall be
present during any entry by Purchaser or its representatives upon the Property
for Diligence. Purchaser shall take all necessary actions to ensure that neither
it nor any of its representatives unreasonably interfere with the Space Lessees
or guests of the Hotel or ongoing operations occurring at the Property.
Purchaser shall not cause or permit any mechanic liens, materialmen's liens, or
other liens to be filed against the Property as a result of its Diligence.

     4.03 TESTING. Purchaser shall have the right to conduct, at its sole cost
and expense, any inspections, studies or tests that Purchaser deems appropriate
in determining the condition of the Property, provided, however, Purchaser is
not permitted to perform any sampling, boring, drilling or other physically
intrusive testing into the structures or ground comprising the Property,
including, without limitation, a so-called "PHASE II" environmental assessment,
without (i) submitting to Seller the scope and inspections for such testing; and
(ii) obtaining the prior written consent of Seller for such testing.

     4.04 ACCEPTANCE OR REJECTION. Purchaser shall have until the expiration of
the Inspection Period to conduct its Diligence to determine whether the Property
is acceptable to Purchaser. Purchaser may, for any or no reason in its sole and
absolute discretion, terminate this Agreement by giving written notice of
termination (the "TERMINATION NOTICE") to Seller and the Escrow Company on or
before the expiration of the Inspection Period. Upon receipt by Seller and the
Escrow Company of the Termination Notice on or prior to the expiration of the
Inspection Period, (i) this Agreement shall automatically terminate, and the
parties shall have no further obligations to or recourse against each other
(except for any provisions of this Agreement which are expressly stated to
survive the termination of this Agreement, including, without limitation, the
indemnification obligations set forth in Section 4.07) and (ii) subject to
provisions of Sections 3.01(d) and 3.01(e), the Escrow Company shall promptly
return to Purchaser the Deposit. If Purchaser does not timely give a Termination
Notice on or before the expiration of the Inspection Period: (i) Purchaser shall
be deemed to have fully and knowingly waived its right to terminate this
Agreement pursuant to this Section 4.04 and (ii) the Deposit shall become
non-refundable, subject to the provisions of this Agreement.

     4.05 CONFIDENTIALITY. Prior to Closing, Purchaser agrees and covenants with
Seller (i) not to disclose to any third party (other than its investors,
lenders, accountants, attorneys, and other professionals and consultants in
connection with the transaction contemplated in this Agreement) without Seller's
prior written consent, unless Purchaser is obligated by law to make such
disclosure, any of the reports or any other documentation or information
obtained by Purchaser which relates to the Property or Seller in any way, all of
which shall be used by Purchaser and its agents solely in connection with the
transaction contemplated by this Agreement and (ii) not to issue a press release
or hold a press conference about the proposed transaction or otherwise disclose
non-public information about the Property or the transaction contemplated
hereunder without the prior written consent of Seller. If this Agreement is
terminated, Purchaser agrees that all such information will continue to be held
in strict confidence and, to the extent possible, all such information that was
provided by Seller to Purchaser shall be returned or delivered to Seller or
destroyed.


                                      U-14

     4.06 TITLE AND SURVEY. Within three (3) business days of the execution by
Purchaser and Seller of this Agreement, Seller shall order from, and, upon
completion, cause the Title Company to deliver to Purchaser a commitment for
title insurance (the "TITLE COMMITMENT") for the Property together with copies
(to the extent recorded) of each of the underlying documents listed as an
exception on the Title Commitment, as well as copies of any surveys or easement
plats that Seller or Title Company may have in their possession with respect to
the Real Property (together with an update of same to paid for by Seller, the
"SURVEY"). Within seven (7) days after receipt by Purchaser of the Title
Commitment, the Survey and all underlying documents of record, Purchaser will
notify Seller and the Title Company of any restrictions, reservations,
limitations, easements, conditions, defects or encumbrances disclosed in the
Title Commitment that are objectionable to Purchaser (together herein called
"TITLE DEFECTS" ). All exceptions shown on the Title Commitment not objected to
by Purchaser in its notice to Seller shall be deemed acceptable to Purchaser.
Seller shall have a period of seven (7) days following Seller's receipt of
Purchaser's objection to any Title Defects in which to notify Purchaser which of
such Title Defects Seller will cure or have removed. If Seller will not cure or
remove all such Title Defects, Purchaser shall elect either to (i) waive its
objection to those Title Defects that Seller will not cure or remove, in which
case this Agreement will continue, and Seller shall have until expiration of the
Inspection Period to use its commercially reasonable efforts to cure or remove
those Title Defects identified in its notice to Purchaser as Title Defects that
Seller will cure or remove; or (ii) terminate this Agreement, in which case, the
Escrow Company shall thereupon return to Purchaser the funds and documents
previously paid or deposited by it, including, but not limited to, the Deposit,
and the parties shall be fully released and discharged from any obligation
hereunder. Purchaser shall notify Seller of its election in writing within three
(3) days after receipt of Seller's notice, and Purchaser's failure to provide
such timely notice in response to Seller's notice shall constitute Purchaser's
election to waive its objection to the Title Defects that Seller will not cure
or remove and proceed as provided in (i) above. Notwithstanding anything to the
contrary contained in this Section 4.06, prior to the Closing Date, Seller shall
remove and discharge from record any and all deeds of trust, mortgages,
mechanic's liens for work performed on or material delivered to the Property,
delinquent taxes and delinquent assessments (collectively, the "MONETARY
EXCEPTIONS") encumbering title to the Real Property regardless of whether
Purchaser has objected thereto or not. Seller acknowledges and agrees that in
the event that Seller fails or refuses to remove and discharge any Monetary
Exception from title on or prior to the Closing Date, Purchaser may instruct the
Escrow Company to use and apply Purchase Price at the Closing Date to remove
such Monetary Exceptions.

     Notwithstanding anything to the contrary contained herein, if any new lien,
covenant, condition, restriction, reservation, easement, right of way or other
encumbrance affecting the Real Property (each, a "NEW EXCEPTION") becomes of
record after the date of the Title Commitment (other than an exception caused by
Purchaser or consented to in writing by Purchaser), then (i) if the New
Exception was caused or consented to by Seller or any of its affiliates, then
Seller shall cause such New Exception to be removed prior to the Closing Date;
or (ii) if the New Exception was not caused or consented to by Seller or any of
its affiliates, then Seller may, but shall not be obligated to, remove such new
title exception within five (5) days after receipt of notice of such New
Exception.


                                      U-15

     If Seller elects or is obligated to remove a New Exception, then, if
necessary, the Seller may extend the Closing Date by up to five (5) Business
Days to permit or arrange for any such removal. In the event that, pursuant to
clause (ii) in the previous paragraph, Seller elects not to remove such New
Exception within such period, then Purchaser shall have the right, by written
notice to Seller and the Escrow Company given within five (5) Business Days
after receipt of written notice from Seller that Seller has elected not to
remove such New Exception, to (A) accept such New Exception or (B) terminate
this Agreement, in which case Purchaser shall be refunded the Deposit, this
Agreement shall become null and void and of no further force or effect and the
parties shall thereafter have no further rights or obligations hereunder. If
such New Exception was caused by or consented to in writing by Purchaser, then
Purchaser shall take title to the Property subject to such New Exception.

     4.07 RELEASE AND INDEMNIFICATION Except with respect to any loss, cost,
damage or claim arising from the Purchaser's discovery of the existence of any
adverse conditions of any nature existing at the Real Property, the Purchaser
shall indemnify and defend the Seller against any loss, damage or claim arising
from the Diligence activities of the Purchaser or any agents, contractors or
employees of the Purchaser or from the entry upon the Real Property by the
Purchaser or any agents, contractors or employees of the Purchaser (including
any loss, damage or claim arising from the exercise of inspection rights by
Purchaser hereunder). The Purchaser, at its own expense, shall restore any
damage to the Real Property caused by any of the tests or studies made by the
Purchaser. Purchaser shall return the Property to the same condition as prior to
any tests or studies. This indemnification shall survive any termination of this
Agreement or any closing of the transaction contemplated herein.

                                   ARTICLE V

                         REPRESENTATIONS AND WARRANTIES

     5.01 REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby represents and
warrants the following matters to Purchaser. Whenever a representation or
warranty or other reference is made in this Agreement on the basis of the actual
knowledge of Seller or words of similar import, such representation, warranty or
reference is made solely on the basis of the actual, as distinguished from
implied, imputed and constructive, knowledge on the date that such
representation or warranty is made, of Richard Conti, President and Chief
Operating Officer of Boykin Lodging Company, or James Luchars, Vice President of
AEW Capital Management, L.P., without inquiry or investigation or duty.

          (a) DUE ORGANIZATION AND AUTHORIZATION. Seller is a limited liability
     company duly formed, validly existing and in good standing under the laws
     of Delaware and qualified to do business in Illinois. Seller has full power
     and authority, and has taken all corporate and other action necessary to
     authorize Seller to make, execute, deliver, and perform this Agreement. The
     person executing this Agreement on behalf of Seller has been duly
     authorized to do so. Except as provided in Article 8, this Agreement is a
     binding and legal agreement of Seller, enforceable against Seller in
     accordance with its terms, except as such may be subject to or limited by
     the effect of any bankruptcy, reorganization, moratorium, insolvency, or
     other laws affecting the rights of creditors generally


                                      U-16

          (b) NO CONFLICT. The execution and delivery of this Agreement and the
     closing documents to be executed in connection herewith and the
     consummation of the transactions contemplated hereby and thereby, except as
     otherwise provided herein, do not require the consent or approval of any
     governmental authority, nor shall such execution and delivery result in a
     breach or violation of any Legal Requirement or Permit, or conflict with,
     breach, result in a default (or an event which with notice and passage of
     time or both will constitute a default) under, or violate any contract or
     agreement to which Seller is a party or by which it or the Property is
     bound or any Permit.

          (c) PENDING LITIGATION. To Seller's actual knowledge, except as
     described in Exhibit E, there are no actions, suits, or proceedings,
     pending or threatened against Seller related to the Property or the Hotel
     or otherwise affecting the Property or any of Seller's rights therein or
     Seller's ability to perform its obligations under this Agreement and which,
     if decided adversely against Seller, would have a materially adverse effect
     on the Hotel or the Property. To Seller's actual knowledge, except as noted
     in Exhibit F, there is no violation of any Legal Requirement with regard to
     the Property and Seller has not received any notice of any violation of a
     Legal Requirement or a Permitted Exception which has not been corrected and
     which, if decided adversely against Seller, would have a materially adverse
     effect on the Hotel or the Property.

          (d) CONDEMNATION. To Seller's actual knowledge, there are no pending,
     or threatened, condemnation proceedings, or condemnation actions against
     the Property.

          (e) EMPLOYEES.

               (i) Except as set forth in Exhibit G, to Seller' actual knowledge
          (a) there is no labor strike, picketing of any nature, labor dispute,
          slowdown or any other concerted interference with normal operations,
          stoppage or lockout in effect, pending against or affecting the
          Manager or any Affiliate of the Manager with respect to the operation
          of the Hotel and neither the Manager or any Affiliate of the Manager
          has received any written notice specifically threatening any of the
          foregoing; (b) neither the Manager or any Affiliate of Manager is
          delinquent in any payments to any Employee for any Compensation due
          with respect to any services performed or amounts required to be
          reimbursed to such Employees; (c) there are no formal material
          grievances, complaints or charges with respect to employment or labor
          matters pending in any judicial, regulatory or administrative forum,
          or under any private dispute resolution procedure (and neither Manager
          nor any Affiliate of Manager has received any notice threatening any
          of the foregoing); (d) there are no audits or investigations of any of
          Manager's or any Affiliate of Manager's employment practices or
          policies by any governmental entity pending or threatened, and (e)
          neither the Manager nor any Affiliate of Manager is subject to any
          order, consent decree, judgment or injunction in respect of any matter
          relating to the Employees.


                                      U-17

               (ii) Neither Seller, Manager nor any Affiliate of Manager have
          made any representation, express or implied, concerning the terms or
          conditions on which Purchaser or its Manager may offer to employ any
          Employees.

               (iii) Except as set forth in Exhibit G, there are no pending or
          threatened demands for settlement or other resolution of employment or
          labor claims or disputes.

          (f) TITLE TO PERSONAL PROPERTY; EQUIPMENT LEASES. Except as set forth
     in Exhibit I, Seller has good and valid title to all of the tangible
     Personal Property, which shall be free and clear of all liens and
     encumbrances as of the Closing. Exhibit I sets forth a correct and complete
     list of equipment and other Personal Property leased by Seller pursuant to
     Hotel Contracts and requiring aggregate annual payments in excess of Two
     Thousand Five Hundred Dollars ($2,500.00) for any year during the term of
     such lease after the Closing.

          (g) TAXES. Except as listed on Exhibit J Seller has not received any
     written notice of any audit of any taxes payable with respect to the
     Property which has not been resolved or completed, and Seller is not
     currently contesting any such taxes or seeking an abatement or rollback of
     any taxes.

          (h) BOOKS AND RECORDS. Seller has made available to Purchaser complete
     copies of the Books and Records in Seller's possession.

          (i) SPACE LEASES.

               (i) Exhibit K sets forth a correct and complete list of the Space
          Leases, and the Seller has made available to Purchaser correct and
          complete copies of the Space Leases.

               (ii) Except as set forth in Exhibit K, the Seller has neither
          given nor received any written notice of any breach or default under
          any of the Space Leases which has not been cured and, to the Seller's
          actual knowledge, no event has occurred or circumstance exists which,
          with notice or the passage of time, would result in a breach or
          default by the Seller or the Space Lessee thereunder. Seller has fully
          reconciled all operating expenses and other additional rent and
          percentage rent for calendar year 2003 with all Space Lessees under
          the Space Leases, and neither Seller nor any Space Lessee owes any
          payments pursuant to such reconciliation that has not been paid.

               (iii) Exhibit K lists all security or other deposits made by any
          Space Lessee under the Space Leases, and except as set forth in such
          Exhibit K, no security or other deposit made by any Space Lessee under
          the Space Leases has been applied towards the obligations of such
          party in accordance with the Space Leases. No security or other
          deposit is in the form of a letter of credit or any other form other
          than cash. Except as set forth in Exhibit K, no rent has been paid by
          any Space Lessee more than one month in advance.


                                      U-18

               (iv) Except as set forth in Exhibit K, (A) no leasing or similar
          commissions are payable with respect to any of the Space Leases,
          either for the term currently in effect or for any renewal,
          substitution, extension or expansion thereunder, and (B) Seller has no
          unperformed obligation to construct or pay or reimburse the costs of
          any improvements, to pay relocation costs, or any similar obligation
          pursuant to the Space Leases.

          (j) HOTEL CONTRACTS. Seller has made available to Purchaser correct
     and complete copies of all Hotel Contracts to the extent available to
     Seller. To Seller's actual knowledge, Seller has neither given nor received
     any written notice of any breach or default under any Hotel Contract which
     has not been cured and no event has occurred or circumstance exist which,
     with notice of the passage of time, would result in a breach or default by
     Seller or the other party thereunder.

          (k) FINANCIAL STATEMENTS; ACCRUED LIABILITIES. The annual income and
     expense statements for the Property provided to Purchaser for calendar
     years 2001, 2002 and 2003 and "year-to-date" through July 31, 2004 with
     respect to the Property are correct and complete copies of the financial
     statements prepared by Seller or the Manager and have been prepared in
     accordance with US Generally Accepted Accounting Principals and present
     fairly, in all material respects, the operating results of the Property for
     the periods covered by such statements, subject to standard year-end
     adjustments for the "year-to-date" statement which shall be updated to the
     Closing Date hereof. Exhibit S attached hereto is a correct and complete
     list of all accrued liabilities related to the Property and the Hotel as of
     the date indicated in such Exhibit S.

          (l) HAZARDOUS SUBSTANCES. To Seller's actual knowledge and except as
     set forth in the Books and Records and Exhibit L (i) Seller has not
     received any written notice from any governmental authority or neighboring,
     upgradient or downgradient property owner or other third party regarding
     any non-compliance with or violation of any Environmental Laws with respect
     to the Real Property or the presence or release of hazardous substances in,
     on, under, or from, the Real Property, and (ii) during the Seller's
     ownership of the Property, Seller has not made or been requested in writing
     to make or, to the Seller's actual knowledge, been advised by legal counsel
     or its environmental consultant to make, any report or disclosure to any
     governmental authority relating to a release or a threatened release of
     hazardous substances to or from the Real Property.

          (m) AGREEMENTS WITH GOVERNMENTAL AUTHORITIES. Seller has not entered
     into any unrecorded commitment or agreement with any governmental authority
     affecting the Property and which could reasonably be expected to have a
     material adverse effect on the ownership, value or operation of the
     Property.

          (n) EMPLOYEE BENEFIT PLANS.

               (i) As used in this Section 5.01(n), the term "Employee Benefit
          Plan" includes any pension, retirement, savings, disability, medical,
          dental, health, life, death benefit, group insurance, profit sharing,
          deferred compensation, stock option, bonus, incentive, vacation pay,
          tuition reimbursement, severance pay, or


                                      U-19

          other employee benefit plan, trust, agreement, contract, policy or
          commitment (including, without limitation, any pension plan, as
          defined in Section 3(2) of ERISA ("Pension Plan"), and any welfare
          plan as defined in Section 3(1) of ERISA ("Welfare Plan")), whether
          any of the foregoing is funded, insured or self-funded (1) sponsored
          or maintained by Seller, or any of its affiliates, to the extent such
          affiliate is described in Code Section 414(b), (c) or (m) and
          corresponding Treasury Regulations (each a "Controlled Group Member")
          and covering any Controlled Group Member's active or former employees
          (or their beneficiaries), (ii) to which any Controlled Group Member is
          a party or by which any Controlled Group Member (or any of the rights,
          properties or assets thereof) is bound, or (iii) with respect to which
          any Controlled Group Member has made any payments, contributions or
          commitments or may otherwise have any liability (whether or not such
          Controlled Group Member still maintains such Employee Benefit Plan).

               (ii) Exhibit M provides a complete list of all Employee Benefit
          Plans maintained or contributed to by Seller for the Employees or
          former Employees.

               (iii) There is no pending litigation or governmental
          administrative proceeding (or investigation) or other proceeding
          (other than those relating to routine claims for benefits) relating to
          any Employee Benefit Plan.

               (iv) No Welfare Plan provides for continuing benefits or coverage
          for any employee or any beneficiary of an employee after such
          employee's termination of employment, except as may be required by
          Code Section 4980B or Section 601 (et seq.) of ERISA ("COBRA"), or
          under any applicable state law, and at the expense of the employee or
          the beneficiary of the employee.

               (v) Except as otherwise specified in Exhibit N, Seller does not
          contribute to, sponsor or otherwise maintain any Employee Benefit Plan
          which provides benefits or compensation to any Employee.

               (vi) With respect to the multiemployer plan listed on Exhibit N
          as Hotel Employees and Restaurant Employees International Union
          Pension Plan (the "Multiemployer Plan"), all contributions required by
          law or by a collective bargaining or other agreement to be made under
          such plan with respect to eligible Employees for all periods through
          the Closing Date will have been made by the Closing Date.

               (vii) (A) With respect to the Multiemployer Plan, Seller has
          delivered to Purchaser true and complete copies of the collective
          bargaining agreement pursuant to which Manager is obligated to
          contribute and has requested and prior to the expiration of the
          Inspection Period will deliver a written estimate of the amount of
          potential withdrawal liability of Manager calculated as of the last
          valuation date by the Multiemployer Plan. In the event Manager has not
          received such a written estimate prior to the expiration of the
          Inspection Period, Seller shall have the right to extend the
          expiration of the Inspection Period in


                                      U-20

               order to obtain such written estimate and the Inspection Period
               shall thereafter expire on the day after the date upon which
               Manager delivers such written estimate to Purchaser.

                    (B) Seller and the Controlled Group Members have not
               received notice from the Multiemployer Plan that such plan is in
               reorganization or is insolvent, that increased contributions may
               be required to avoid a reduction in plan benefits or the
               imposition of any excise tax, or that such plan intends to
               terminate or has terminated.

                    (C) To Seller's knowledge, the Multiemployer Plan is not a
               party to any pending merger or asset or liability transfer or is
               subject to any proceeding brought by the PBGC.

               (viii) With respect to the Multiemployer Plan, Seller and
          Purchaser intend to comply with the requirements of Section 4204 of
          ERISA in order that there shall not be a complete or partial
          withdrawal from such Multiemployer Plan as a result of the sale under
          this Agreement. In accordance therewith and notwithstanding anything
          in this Agreement to the contrary, Seller and Purchaser agree to the
          following:

                    (A) After the Closing Date Purchaser shall contribute to the
               Multiemployer Plan with respect to the Hotel substantially the
               same number of "contribution base units" for which the Seller had
               an "obligation to contribute" to the Multiemployer Plan (as those
               terms are defined in Sections 4001(a)(ii) and 4212 of ERISA,
               respectively) pursuant to the collective bargaining agreement
               applicable to the Multiemployer Plan;

                    (B) Seller agrees that if Purchaser withdraws from the
               Multiemployer Plan in a complete or partial withdrawal during the
               first five plan years beginning after the Closing, Seller shall
               be secondarily liable for any withdrawal liability it would have
               had to the Multiemployer Plan (but for this Section 5.01(n) and
               Section 4204 of ERISA) if the liability of Purchaser with respect
               to the Multiemployer Plan is not paid;

                    (C) Subject to subsection (C)(1) hereof, (1) Purchaser shall
               provide to the Multiemployer Plan for a period of five
               consecutive plan years commencing with the first plan year
               beginning after the Closing, a bond, if required, issued by a
               corporate surety company that is an acceptable surety for
               purposes of Section 412 of ERISA, or a letter of credit or an
               amount held in escrow, if required, by a bank or similar
               financial institution acceptable to the Multiemployer Plan, in an
               amount satisfying the requirements of ERISA Section
               4204(a)(1)(B);

                         (2) Purchaser may apply for a variance or exemption
               from the bond or escrow requirements of this Subsection (C) and
               Section


                                      U-21

               4204(a)(1)(B) of ERISA in accordance with the applicable rules of
               the Pension Benefit Guaranty Corporation ("PBGC").

                    (D) Seller and Purchaser further agree:

                         (1) If Purchaser withdraws from the Multiemployer Plan
                    before the last day of the fifth consecutive plan year
                    beginning after the Closing and fails to make any withdrawal
                    liability payment when due, then Seller shall pay to the
                    Multiemployer Plan an amount equal to the payment that would
                    have been due from Seller but for the provisions of ERISA
                    Section 4204;

                         (2) If all, or substantially all, of Seller's assets
                    are distributed, or if Seller is liquidated before the end
                    of the five year plan period described in (B) above, then
                    Purchaser shall provide to the Multiemployer Plan on behalf
                    of Seller to satisfy Seller's obligations under Section
                    4204(a)(3) of ERISA a bond or letter of credit or an amount
                    in escrow held in a reputable bank or similar financial
                    institution acceptable to the Multiemployer Plan, if
                    required, equal to the present value of the withdrawal
                    liability Seller would have had but for this Section
                    5.01(n). If only a portion of Seller's assets are
                    distributed during such period, then a bond or letter of
                    credit or an amount in escrow shall be provided to the
                    Multiemployer Plan by Purchaser on behalf of Seller to
                    satisfy Seller's obligations under Section 4204(a)(3) of
                    ERISA in accordance with applicable regulations prescribed
                    by the PBGC.

                         (3) Purchaser shall indemnify and hold Seller harmless
                    for any loss, cost or expense incurred by Seller in the
                    event Seller has to make payments to the Multiemployer Plan
                    as a result of Purchaser's withdrawal.

                    (E) Notwithstanding Seller's and Purchaser's intent to
               comply with ERISA Section 4204, if any exemption, limitation or
               variance is found to apply to Seller's or Purchaser's withdrawal
               liability or the requirements of Section 4204, the agreements of
               this Section 5.01(n) may be modified or terminated as mutually
               agreed to by Seller and Purchaser; and

                    (F) Seller and Purchaser are unrelated within the meaning of
               ERISA Section 4204.

               As used in this Section 5.01(n)(viii) and to the extent
appropriate to comply with the requirements of Section 4204 of ERISA in order
that there shall not be a complete or partial withdrawal from the Multiemployer
Plan as a result of the sale under this Agreement,


                                      U-22

                    (A) the term "Seller" shall include the Manager, and

                    (B) the term "Purchaser" shall include the employer of the
               Hotel employees after the closing ("Purchaser's Manager").
               Purchaser's Manager shall be an entity under common control and
               treated as a single employer with Purchaser as determined under
               Section 414(b) or (c) of the Code.

               (ix) Each Employee Benefit Plan complies in all material respects
          with the applicable requirements of ERISA, the Code and any other
          applicable law governing such Employee Benefit Plan, and each Employee
          Benefit Plan has at all times been properly administered in all
          material respects in accordance with all such requirements of law, and
          in accordance with its terms and the terms of any applicable
          collective bargaining agreement to the extent consistent with all such
          requirements of law. Each Employee Benefit Plan which is intended to
          be qualified is qualified under Code Section 401(a), has received a
          favorable determination letter from the Internal Revenue Service
          ("IRS") stating that such Employee Benefit Plan meets the requirements
          of Code Section 401(a) and that the trust associated with such
          Employee Benefit Plan is tax-exempt under Code Section 501(a) and no
          event has occurred which would jeopardize the qualified status of any
          such plan or the tax exempt status of any such trust under Section
          401(a) and 501(a) of the Code, respectively.

               (x) No Employee Benefit Plan is subject to Title IV of ERISA,
          Code Section 412 or ERISA Section 302, or is a multiemployer plan (as
          defined in Section 4001(a)(3) of ERISA) except as indicated on Exhibit
          M.

               (xi) No Controlled Group Member or any organization which is a
          successor or parent corporation of such entities, within the meaning
          of ERISA Section 4069(b), has engaged in a transaction described in
          ERISA Section 4069.

               (xii) The consummation of the transactions contemplated by this
          Agreement will not: (A) entitle any current or former Employee of
          Seller to severance pay, unemployment compensation or any similar
          payment; (B) accelerate the time of payment or vesting, or increase
          the amount of any compensation due to, or in respect of, any current
          or former Employee of Seller; or (C) result in or satisfy a condition
          to the payment of compensation that would, in combination with any
          other payment, result in an "excess parachute payment" within the
          meaning of Code Section 280(G).

          (o) RIGHTS TO PURCHASE. Subject to any renewal, expansion or similar
     rights of Space Lessees under the Space Leases, Seller has not granted any
     option, right of first refusal or similar right in favor of any person or
     entity to purchase or otherwise acquire the Property or any portion thereof
     or interest therein.

     5.02 REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser hereby
represents and warrants the following to Seller:


                                      U-23

          (a) DUE ORGANIZATION AND AUTHORIZATION. Purchaser is a corporation
     duly formed, validly existing and in good standing under the laws of
     Illinois. Purchaser has full power and authority to enter into and perform
     this Agreement and the transactions contemplated by this Agreement, and
     Purchaser has taken all corporate and other action necessary to authorize
     Purchaser to make, execute, deliver, and perform this Agreement and the
     transactions contemplated by this Agreement.

          (b) NO CONFLICT. The execution and delivery of this Agreement and the
     closing documents to be executed in connection herewith and the
     consummation of the transactions contemplated hereby and thereby, except as
     otherwise provided herein, do not require the consent or approval of any
     governmental authority, nor shall such execution and delivery result in a
     breach or violation of any Legal Requirement or conflict with, breach,
     result in a default (or an event which with notice and passage of time or
     both will constitute a default) under, or violate any contract or agreement
     to which Purchaser or an Affiliate of Purchaser is a party or by which it
     or its property is bound.

          (c) PENDING LITIGATION. To Purchaser's actual knowledge, except as
     described in Exhibit N, there are no actions, suits, or proceedings,
     pending or threatened against Purchaser or otherwise affecting the
     Purchaser's ability to perform its obligations under this Agreement; which,
     if adversely determined might have a material adverse effect on the
     Purchaser's ability to perform its obligations under this Agreement. To
     Purchaser's actual knowledge, except as noted in Exhibit O, there is no
     violation of any Legal Requirement with regard to the Purchaser's
     activities.

     5.03 BROKERAGE. Seller and Purchaser each represent and warrant to the
other that it has not had any dealings with any broker, agent, or finder
relating to the sale of the Property or the transactions contemplated hereby
other than CB Richard Ellis (the "BROKER"). Each party agrees to indemnify and
hold the other and its Indemnified Parties harmless against and from any and all
Liabilities incurred by the other party arising out of or resulting from any
breach of the foregoing representation and warranty. Seller shall be responsible
for the Broker's commission in an amount of $125,000 when the Property is sold
and Purchaser receives the Purchase Price, and Seller shall indemnify, defend
and hold Purchaser harmless from any claim made by the Broker with respect to
such commission. The provisions of this Section 5.03 shall survive any
termination of this Agreement.

     5.04 DURATION OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties contained in this Agreement shall survive the Closing for a period of
one (1) year and shall not merge into any of the closing documents. Any party
seeking to assert liability under representation or warranty set forth in this
Agreement must give notice to the other party in writing prior to the expiration
to such one (1) year period, which notice shall set forth specifically the
representation or warranty allegedly breached and a detailed description of the
alleged breach. In addition, Purchaser shall only be entitled to maintain an
action or claim with respect to a breach of representation or warranty hereunder
if Purchaser has initiated legal proceedings with respect to such claims on or
before the date which is three (3) months after the expiration of such one (1)
year period. All liabilities and obligations of both parties under any
representation or warranty shall lapse and be of no further force or effect with
respect to any


                                      U-24

matter not contained in such a written notice delivered as contemplated above on
or prior to the date that is one (1) year after the Closing Date.
Notwithstanding anything to the contrary contained in this Agreement, in no
event shall any party have any liability under this Agreement for any
prospective or speculative profits or special, consequential or punitive
damages, whether based upon contract, tort, or negligence or in any other manner
arising from this Agreement or the transactions contemplated by this Agreement.
Purchaser will not have any right to bring any action against Seller as a result
of any breach, untruth or inaccuracy of a representation or warranty, unless and
until the aggregate amount of all liability and losses arising out of such
breaches, untruths and/or inaccuracies exceeds $25,000.00 whereupon Seller shall
be liable for such breaches, untruths or inaccuracies to the extent the same
exceed $25,000.00, but the liability of Seller for such representation and
warranty shall not exceed, in the aggregate $1,000,000.00. Purchaser assumes the
risk of liability or losses attributable to any such breaches, untruths or
inaccuracies up to and including $25,000.00.

     5.05 SELLER'S INDEMNIFICATION. Seller hereby agrees to indemnify, hold
harmless and defend Purchaser, its members, directors, officers, employees,
agents and representatives from and against any and all loss, damage, claim,
cost and expense and any other liability including, without limitation,
reasonable accountants' and attorneys' fees, charges and costs, incurred by
Purchaser by reason of, or with respect to (i) any material inaccuracy in or
breach of any of the representations, warranties or agreements made by Seller in
the Agreement, (ii) the non-performance of any covenant or obligation to be
performed by Seller hereunder; (iii) Seller's failure to comply with the bulk
transfer laws of any locality or state or its misapplication of the proceeds of
the Purchase Price in fraud of its creditor; or (iv) any liability imposed upon
Purchaser as transferee of the business or operations of Seller or the assets
being transferred under the Agreement, or otherwise relating to the conduct of
the business and operations of Seller prior to the Closing.

     5.06 LIMITATION OF SELLER'S REPRESENTATIONS.

          (a) In the event Purchaser obtains actual knowledge of any breach of
     Seller's representations or warranties under Article 5 prior to Closing,
     Purchaser shall give written notice thereof to Seller at or prior to the
     Closing. Upon receipt of such notice, Seller may elect to extend the
     Closing for as long as sixty (60) days to enable Seller to attempt to cure
     the condition that gives rise to such breach or otherwise provide evidence
     to Purchaser that the same does not exist. If Seller either does not elect
     to extend or, at or prior to the extended Closing, shall be unable to cure
     such condition or provide such evidence to Purchaser, then Purchaser shall
     elect either (a) to terminate this Agreement on account thereof or (b) to
     close the purchase of the Property and pay the Purchase Price in accordance
     with the terms of this Agreement, but in the case of an election under
     clause (b), Purchaser shall be entitled to indemnification under Section
     5.05 on account of such breach subject to the limitations on Seller's
     liability under Section 2.03. The provisions of this Section 5.06(a) shall
     survive the closing of the purchase of the Property.

          (b) Notwithstanding the foregoing, if during the course of Purchaser's
     tests and studies during the Inspection Period Purchaser obtains knowledge
     based upon review of written information from any reports, documents, test
     results, or other written


                                      U-25

     materials or written information provided to Purchaser by Purchaser's
     consultants, by Seller or any other party, that contain facts or disclosure
     of circumstances that are at variance with any of Seller's representations
     or warranties, and if Purchaser thereafter consummates Closing, Purchaser
     shall be deemed to have accepted such variant facts and circumstances and
     Seller's representations and warranties shall be deemed excised or modified
     to comport with such variant facts and circumstances.

     5.07 GUARANTY OR REPRESENTATIONS AND WARRANTIES.At closing, AEW Partners
III, L.P. and Boykin Hotel Properties, L.P. shall execute a guaranty, limited to
each party's proportionate interest in the Seller, for Seller's obligations
under this Article 5.

                                   ARTICLE VI

                         CLOSING AND CLOSING DELIVERIES

     6.01 CLOSING. The Closing shall take place at the offices of Escrow Company
on the Closing Date, or through customary closing escrow arrangements reasonably
acceptable to Seller and Purchaser by the delivery of documents and funds to
Escrow Company on or prior to the Closing Date.

     6.02 ESCROW. This Agreement shall not be merged into any closing escrow
instructions, but any closing escrow instructions shall be deemed auxiliary to
this Agreement and, as between Purchaser and Seller, the provisions of this
Agreement shall govern and control.

     6.03 SELLER'S DELIVERIES. At Closing, Seller shall execute (to the extent
required) and deliver, or cause to be delivered, to Purchaser or the Escrow
Company as appropriate:

          (a) a special warranty deed (the "DEED") from Seller to Purchaser, or
     Purchaser's designee, conveying Seller's interest in the Real Property
     subject to only the encumbrances listed in the Title Policy in the form
     attached to this Agreement as Exhibit P;

          (b) a Bill of Sale transferring to Purchaser all of Seller's right,
     title, and interest in and to each and every item of Personal Property to
     be transferred in the form attached to this Agreement as Exhibit Q;

          (c) an assignment and assumption (the "GENERAL ASSIGNMENT") of all of
     Seller's right, title, and interest in, to, and under the Space Leases,
     Bookings, Hotel Contracts, Permits (other than Excluded Permits), Books and
     Records, Warranties and Miscellaneous Hotel Assets, in the form of Exhibit
     R;

          (d) the certificate referred to in Section 9.01(b);

          (e) an affidavit of Seller in customary form stating that Seller is
     not a "foreign person" within the meaning of Section 1445 of the Code in
     the form of Exhibit T;

          (f) notices to Space Lessees and parties to Hotel Contracts of change
     in ownership of the Hotel, if requested by Purchaser;


                                      U-26

          (g) the Preliminary Closing Statement;

          (h) any required real estate transfer tax declarations or similar
     documentation required to evidence the payment of any tax imposed by any
     state, county, or municipality together with any change of ownership
     statements required under applicable law;

          (i) copies of such articles of incorporation, organization, or
     formation; agreements or certificates of partnership; resolutions;
     authorizations; bylaws; certifications; or other corporate, partnership,
     limited liability company, or trust documents or agreements relating to
     Seller as the Title Company or Purchaser shall reasonably require in
     connection with this transaction;

          (j) a certificate or registration of title for any owned motor vehicle
     or other Personal Property which requires such certification or
     registration, conveying such vehicle or such other Personal Property to
     Purchaser;

          (k) evidence satisfactory to Purchaser that the Management Agreement
     has been terminated and that there are no continuing obligations
     thereunder;

          (l) to the extent not previously delivered to Purchaser, all originals
     (or copies if originals are not available), of the Space Leases, Books and
     Records, Permits, written employment contracts, hotel contracts, keys and
     lock combinations in the Seller's possession or control;

          (m) the original of any estoppel certificate obtained in connection
     with any Space Lease or reciprocal easement agreement;

          (n) certificate updating all Exhibits to this Agreement;

          (o) the guaranty described in Section 5.07; and

          (p) an assignment and assumption (the "Collective Bargaining Agreement
     Assumption") of the right, title and interest in, to and liability under,
     the Collective Bargaining Agreements.

     6.04 PURCHASER'S DELIVERIES. At the Closing, Purchaser shall execute (to
the extent required) and deliver, or cause to be delivered, to Seller or the
Escrow Company as appropriate:

          (a) the Purchase Price required to be paid pursuant to Section 3.01;

          (b) the Bill of Sale;

          (c) the General Assignment;

          (d) the certificate referred to in Section 8.01(b);

          (e) the Collective Bargaining Assignment;


                                      U-27

          (f) the Preliminary Closing Statement;

          (g) copies of such articles of incorporation, organization, or
     formation; agreements or certificates of partnership; resolutions;
     authorizations; bylaws; certifications; or other corporate, partnership, or
     trust documents or agreements relating to Purchaser as Seller or the Title
     Company shall reasonably require in connection with this transaction; and

          (h) any required real estate transfer tax declarations or similar
     documentation required to evidence the payment of any tax imposed by any
     state, county, or municipality together with any change of ownership
     statements required under applicable law.

     6.05 EXPENSES.

          (a) Seller shall pay the following expenses: (i) state and county
     transfer taxes, deed stamps, sale taxes and similar taxes and charges
     payable to any governmental authority in the connection with the transfer
     of the Property, (ii) fifty percent (50%) of all closing Escrow fees; (iii)
     Seller's legal fees and expenses, (iv) the cost of the Survey, (v) charges
     for an extended coverage Title Policy (but not endorsements) and (vi) the
     fees for the recording of any discharge of Seller Encumbrances and any
     other encumbrances required to be discharged by Seller at or before
     Closing.

          (b) Purchaser shall pay the following expenses: (i) the cost of any
     endorsements to the Title Policy; (ii) the cost of any reinsurance of, and
     endorsements to, the Title Policy; (iii) City of Chicago transfer taxes,
     (iv) fifty percent (50%) of all closing Escrow fees; (v) all costs and
     expenses incurred in connection with the transfer of any transferable
     Permits, warranties, or licenses in connection with the ownership or
     operation of the Property; (vi) all costs and expenses associated with
     Purchaser's financing including but not limited to, all recordation tax
     therein, if any; (vii) the recordation tax and fee for the recording of the
     Deed; and (viii) Purchaser's legal fees and expenses.

          (c) Any other ordinary and usual closing costs and expenses, except as
     expressly provided in this Agreement, in connection shall be allocated
     between Purchaser and Seller in accordance with the customary practice in
     the county where the Property is located.

          (d) Purchaser shall receive a credit of $500,000 for the removal of
     asbestos related materials that Purchaser discovered during its diligence.

     6.06 CONCURRENT TRANSACTIONS. All documents or other deliveries required to
be made by Purchaser or Seller at Closing, and all transactions required to be
consummated concurrently with Closing, shall be deemed to have been delivered
and to have been consummated simultaneously with all other transactions and all
other deliveries, and no delivery shall be deemed to have been made, and no
transaction shall be deemed to have been consummated, until all deliveries
required by Purchaser and Seller shall have been made, and all concurrent or
other transactions shall have been consummated.


                                      U-28

     6.07 POSSESSION.

Possession of the Property shall be delivered at Closing. Excluded Assets shall
be removed from the Hotel by Seller, at its expense, on or before the Closing
Date. Seller, at its sole cost and expense, shall repair all damage caused by
such removal but shall have no obligation to replace any Excluded Asset so
removed.

     6.08 RESTAURANT SPACE.

          (a) Subject to the provisions of 6.08(b) below, it shall be a
     condition to the obligation of Purchaser and Seller to perform hereunder
     that at Closing the Restaurant Space is delivered (x) with all mechanics
     liens discharged or bonded over and (y) either:

               (i) free and clear of the Restaurant Lease and any other
          leasehold interest; or

               (ii) subject to a lease with an Approved Operator (as defined
          below), as lessee, having economic terms, operating standards and
          other material provisions consistent with or no less favorable than
          the Restaurant Lease, provided that such Approved Operator must have
          commenced operation of a restaurant in the Restaurant Space on or
          before the Closing Date.

     As used herein, the term an Approved Operator shall mean an operator that
     does not operate any other restaurant or establishment within a six block
     radius of the Hotel with the same concept as contemplated for the
     Restaurant Space (unless accepted specifically by Buyer) and is: (i) an
     entity controlled by any one of the operators, or the principal(s) of one
     of the operators listed on Exhibit V attached hereto and that meets the
     operating standards set forth in the Restaurant Lease; (ii) an operator
     that can meet the operating standards set forth in the Restaurant Lease and
     has sufficient financial capacity and strength, as acceptable to Buyer; or
     (iii) any other operator proposed by Seller, subject to Buyer's consent,
     not to be unreasonably withheld or delayed.

          (b) Seller shall have the right to extend the Closing Date for a
     period of up to ninety (90) days to enable Seller to satisfy the condition
     precedent set forth in Section 6.08(a). In the event that (i) Seller
     extends the Closing for such period and at the expiration of such period is
     unable to satisfy the condition in Section 6.08(a) or (ii) Seller is unable
     to satisfy the conditions set forth in Section 6.08(a) above and does not
     elect to extend the Closing Date, in either event, (x) the Closing shall
     take place on the Closing Date, (y) the Purchase Price shall be reduced by
     $2,400,000 and (z) Purchaser shall accept the Property with the Restaurant
     Space in such condition as Seller can deliver at Closing and shall
     indemnify Seller for any loss, expense, cost or liability associated in
     connection with the Restaurant Space and the Restaurant Lease including,
     without limitations any employee or union matters related thereto.


                                      U-29

                                  ARTICLE VII

                  ADJUSTMENTS AND PRORATIONS-CLOSING STATEMENTS

     7.01 ADJUSTMENTS AND PRORATIONS. The following matters and items shall be
apportioned between the parties or, where appropriate, credited in total to a
particular party, as of the Cut-off Time as provided below:

          (a) ACCOUNTS RECEIVABLE; ACCOUNTS PAYABLE; ROOM REVENUES. Purchaser is
     not acquiring Accounts Receivable, and all Accounts Receivable shall remain
     the property of Seller. Purchaser shall promptly remit any funds received
     by Purchaser in payment of such Accounts Receivable arising prior to the
     Cut-off Time. Seller shall pay at or prior to Closing all accounts payable
     that are more than thirty (30) days old as of Closing and all other
     accounts payable shall be apportioned and prorated and adjusted as of the
     Cut-off Time. At Closing Seller shall receive a (i) credit in an amount
     equal to all charges accrued to the open accounts of any guests or
     customers staying at the Hotel as of the Cut-off Time for all room nights
     up to (but not including) the night during which the Cut-off Time occurs
     and (ii) fifty percent (50%) of all charges for the room night which
     includes the Cut-off Time, in each case less amounts payable on account of
     third party collection costs (e.g. fees retained by credit card companies,
     banks or other collection companies, travel agent commissions and other
     third party commissions), and Purchaser shall be entitled to retain all
     deposits made and amounts collected with respect to such charges. Revenue
     from the Hotel attributable to food and beverage (including alcoholic
     beverages), if any, and other sales or services through the close of
     business on the night immediately preceding the Closing Date shall belong
     to Seller (such revenue to be determined based on completion of the night
     auditor's run on the night of the Cut-Off Time). Thereafter, revenue from
     the Hotel attributable to food and beverage and other sales or services
     shall belong to Purchaser. Each of Purchaser and Seller shall be
     responsible for the payment of any sales and/or hotel/motel occupancy taxes
     collected or otherwise due and payable in connection with the revenue
     allocated to such party under this Section 7.01(a) and shall indemnify,
     defend and hold the other party harmless from and against any and all
     Liabilities suffered or incurred as a result of the failure to pay such
     taxes.

          (b) TAXES AND ASSESSMENTS. All ad valorem taxes, special or general
     assessments and real estate taxes, assessments under the exceptions listed
     in the Title Policy, personal property taxes, water and sewer rents, rates
     and charges, vault charges, canopy permit fees, and other permit fees shall
     be prorated (accrual basis) as of the Cut-off Time provided, however, that
     if any taxes or assessments relating to the period prior to the Closing are
     paid in installments, then Seller shall pay on or before Closing Date any
     remaining installments thereof. If the amount of any such item is not
     ascertainable on the Closing, the adjustment therefor shall be based on the
     most recent available bill and assessment notice and shall be reprorated
     upon receipt of the actual bill, as provided in this subsection (b), which
     obligation shall survive the Closing Date and not be extinguished as of the
     Cut-Off Time.


                                      U-30

          (c) UTILITY CONTRACTS. Telephone and telex contracts and contracts for
     the supply of heat, steam, electric power, gas, lighting and any other
     utility service shall be prorated as of the Cut-off Time, with Seller
     receiving a credit for each deposit, if any, made by Seller as security
     under any such public service contracts if the same is transferable and
     provided such deposit remains on account for the benefit of Purchaser.
     Where possible, readings as of the Cut-off Time (or as close thereto as
     practicable) will be secured for all utilities on the Closing Date.

          (d) HOTEL CONTRACTS. Subject to Section 7.01(a) with respect to
     accounts payable, any amounts prepaid, payable or accrued under any Hotel
     Contracts shall be prorated as of the Cut-off Time. Notwithstanding the
     foregoing, Purchaser shall pay or credit Seller only for those Hotel
     Contract prepaid expenses that are in the categories listed in Exhibit U
     attached hereto, which Exhibit U lists prepaid expenses as of the date
     hereof and there shall be no proration on account of any other prepaid
     expenses.

          (e) SPACE LEASES. Any rents and other amounts payable under the Space
     Leases, in each case as and when actually received, shall be prorated as of
     the Cut-off Time between Seller and Purchaser. Purchaser shall receive a
     credit for all prepaid rents and other amounts for periods from and after
     the Closing Date and all security deposits held by Seller under the Space
     Leases which are not transferred to Purchaser, and Purchaser thereafter
     shall be obligated to refund or apply such deposits in accordance with the
     terms of such Space Leases. Rents and other amounts payable under the Space
     Leases which are delinquent as of the Closing Date shall not be pro rated
     as of the Cut-off Time. To the extent that Purchaser receives rents or
     other payments payable under the Space Leases on or after the Closing Date,
     such payments shall be applied first towards the payment in full of all
     rents and other amounts due to Purchaser with respect to periods following
     the Cut-off Time, with the balance applied to delinquent rents or other
     amounts due to Seller for the period prior to the Cut-off Time, with
     Seller's share thereof being promptly delivered to Seller by Purchaser.
     Purchaser shall use commercially reasonable efforts to collect any such
     delinquent rents after the Closing. With respect to any Space Leases which
     provide for the payment of percentage rent by the tenant thereunder, the
     parties shall use good faith efforts to prorate such percentage rent as of
     the Closing and, within twenty (20) days after Purchaser completes the
     annual reconciliation of such percentage rent payments with each such
     tenant, the parties agree to reprorate percentage rent based on the actual
     percentage rent paid by such tenant, and the Party in whose favor such
     original proration was made shall refund such difference to the other Party
     promptly thereafter.

          (f) LICENSE FEES. Fees paid or payable for Permits (other than
     Excluded Permits) shall be prorated as of the Cut-off Time.

          (g) BOOKINGS DEPOSITS AND MISCELLANEOUS HOTEL MATTERS. Purchaser shall
     receive a credit for advance payments or deposits, if any, made pursuant to
     any Bookings that relate to a period after the Cut-Off Time.


                                      U-31

          (h) EMPLOYMENT. Except as provided herein below, Seller shall be
     responsible for, and when due and payable as required by law, shall pay all
     Compensation to any Hotel Employee through the Cut-Off Time.

          (i) SUPPLIES AND CONSUMABLES. Seller shall receive a credit at Closing
     to the extent of the value of all unopened Supplies and Consumables at the
     Hotel as of Closing (valued at Seller's actual cost).

          (j) OTHER. Such other items as are expressly provided to be prorated
     or otherwise adjusted or credited for in other this Agreement shall be so
     prorated, adjusted or credited.

     7.02 PAYMENT. Any net credit due to Seller as a result of the adjustments
and prorations under Section 7.01 shall be paid to Seller in cash at the time of
Closing. Any net credit due to Purchaser as a result of the adjustments and
prorations under Section 7.01 shall be credited against the Purchase Price at
the time of Closing.

     7.03 CLOSING STATEMENTS.

          (a) PREPARATION. Each party shall cause its designated representatives
     to enter the Hotel only at reasonable times and without unreasonably
     interfering with operations, both before and after the Closing Date, for
     the purpose of making such inventories, examinations, and audits of the
     Hotel, and of the Books and Records, as they deem necessary to make the
     adjustments and prorations required under this Article VII, or under any
     other provisions of this Agreement. Based upon such inventories,
     examinations, and audits, two (2) Business Days prior to the Closing, the
     representatives of the parties shall jointly prepare a preliminary closing
     statement (the "PRELIMINARY CLOSING STATEMENT") which shall show the net
     amount due either to Seller or Purchaser as a result thereof, and such net
     amount will be added to, or subtracted from the payment of the Purchase
     Price to be paid to Seller pursuant to Section 3.01 hereof. Within thirty
     (30) days following the Closing Date, Seller and Purchaser shall agree on a
     final closing statement (the "FINAL CLOSING STATEMENT") setting forth the
     final determination of all items to be included on the Closing Statement
     (subject to any subsequent adjustments for percentage rent under any Space
     Lease pursuant to Section 7.01(e)). The net amount due Seller or Purchaser,
     if any, by reason of adjustments to the Preliminary Closing Statement as
     shown in the Final Closing Statement, shall be paid in cash by the party
     obligated therefor within ten (10) days following the date of the Final
     Closing Statement.

          (b) DISPUTES. In the event the representatives of the parties are
     unable to reach agreement with respect to preparation of the Preliminary
     Closing Statement then, except as hereinafter provided, the disputed amount
     shall be held in a joint order Escrow, pending agreement of the parties or
     a determination pursuant to Section 7.03(b), and the Closing shall occur as
     scheduled. Purchaser shall be required to deposit in the Escrow any
     additional sum of the disputed amount which it may be required to pay and
     Seller shall be required to deposit in the Escrow any sum of the disputed
     amount which it may be required to credit or pay to Purchaser. Any such
     dispute shall survive and be subject


                                      U-32

     to later resolution pursuant to this Section 7.03. In the event the
     representatives of the parties are unable to reach agreement with respect
     to either the Preliminary Closing Statement or the Final Closing Statement,
     the parties shall submit their dispute to a firm of independent certified
     public accountants of recognized standing in the hotel industry mutually
     acceptable to Seller and Purchaser. If Seller and Purchaser cannot agree on
     such firm of independent certified public accounts within five (5) Business
     Days after notice from either party requesting such agreement, then such
     dispute shall be resolved by binding arbitration, and either party may
     request that the then president or managing director of the New York Office
     of the American Arbitration Association (or any successor organization, or
     if no successor organization exists, an organization composed of persons of
     similar qualifications) to appoint an independent individual arbitrator
     with a minimum of ten (10) years' personal experience directly relevant to
     the purchase and sale of assets similar to the Hotel, and the determination
     of such arbitrator shall be final and binding on Seller and Purchaser and
     shall be enforceable in any court of competent jurisdiction. The fees and
     expenses of the arbitrator shall be borne by the non-prevailing party, as
     determined by the arbitrator.

          (c) PERIOD FOR RECALCULATION. Notwithstanding the foregoing, if at any
     time within six (6) months following the Closing Date, either party
     discovers any items which should have been included in the Final Closing
     Statement but were omitted therefrom, or discovers any items that were
     improperly prorated in the Final Closing Statement, then such items shall
     be adjusted in the same manner as if their existence or such improper
     proration had been known at the time of the preparation of the Final
     Closing Statement. The foregoing limitations shall not apply to any items
     which, by their nature, cannot be finally determined within the periods
     specified including, without limitation, real estate taxes and adjustments
     following such six (6) month period pursuant to Section 7.01(e) with
     respect to percentage rent under Space Leases.

                                  ARTICLE VIII

                       CONDITIONS TO SELLER'S OBLIGATIONS

     8.01 CONDITIONS. Seller's obligation to close the transaction contemplated
by this Agreement shall be subject to the satisfaction of each of the following
conditions, any one or more of which may be waived by Seller in writing:

          (a) PURCHASER'S COMPLIANCE WITH OBLIGATIONS. Purchaser shall have
     complied with all material Obligations required by this Agreement to be
     complied with by Purchaser.

          (b) TRUTH OF PURCHASER'S REPRESENTATIONS AND WARRANTIES. The
     representations and warranties of Purchaser contained in this Agreement
     were true in all material respects when made, and are true in all material
     respects on the Closing Date, and Seller shall have received a certificate
     to that effect signed by Purchaser. In the event any of the Purchaser's
     representations become untrue during the term of the Agreement, Seller may
     terminate this Agreement without thereby waiving any right or remedy.


                                      U-33

     8.02 FAILURE OF SELLER CLOSING CONDITION. Subject to the provisions of
Section 12.01, if any closing condition set forth in Section 8.01(a) and Section
8.01(b) is not satisfied at Closing and provided all conditions of Article IX
have been satisfied by Seller, then Seller shall have the right either (i) to
terminate this Agreement by providing written notice to such effect to
Purchaser, in which case the Deposit shall be disbursed to Seller in accordance
with Article XVI as Seller's sole remedy at law or in equity, and the parties
shall have no further rights or obligations under this Agreement, or (ii) to
waive such closing condition at or prior to Closing.

                                   ARTICLE IX

                      CONDITIONS TO PURCHASER'S OBLIGATIONS

     9.01 CONDITIONS. Purchaser's obligation to close the transaction
contemplated by this Agreement shall be subject to the satisfaction of each of
the following conditions, any one or more of which may be waived by Purchaser in
writing:

          (a) SELLER'S COMPLIANCE WITH OBLIGATIONS. Seller shall have complied
     with all material Obligations required by this Agreement to be complied
     with by Seller.

          (b) TRUTH OF SELLER'S REPRESENTATIONS AND WARRANTIES. The
     representations and warranties of Seller contained in this Agreement were
     true in all material respects when made, and continue to be true in all
     material respects on the Closing Date, and Purchaser shall have received a
     certificate to that effect signed by Seller. If the representations and
     warranties of Seller contained in this Agreement are no longer true in all
     material respects as of Closing due to changes in fact since the date of
     this Agreement, then Seller shall so indicate in its update certificate
     provided at Closing, and any such changes shall be subject to the approval
     of Purchaser in its reasonable discretion.

     9.02 FAILURE OF PURCHASER CLOSING CONDITION. Subject to the provisions of
Section 12.01, if any closing condition set forth in Section 9.01 is not
satisfied at Closing, then Purchaser shall have the right either (i) to
terminate this Agreement by providing written notice to such effect to Seller,
in which case, subject to the provisions of Section 3.01(d), the Deposit shall
be refunded to Purchaser or (ii) to waive such closing condition at or prior to
Closing. Notwithstanding the foregoing, if the failed closing condition is
reasonably susceptible to cure by Seller, then Seller shall have the one time
right to extend the Closing Date for up to thirty (30) days in order to allow
such cure by giving notice to such effect to Purchaser on or before the
scheduled Closing Date, which notice shall include a covenant of Seller to use
all commercially reasonable diligent efforts to effect such cure.

                                   ARTICLE X

                     ACTIONS AND OPERATIONS PENDING CLOSING

     10.01 ACTIONS AND OPERATIONS PENDING CLOSING. Seller agrees that at all
times prior to the Closing Date:

          (a) Subject to conditions beyond Seller's reasonable control (which
     the parties agree shall not include the unavailability of funds), during
     the pendency of this


                                      U-34

     Agreement the Hotel will continue to be operated and maintained
     substantially in accordance with Present Standards including, without
     limitation, (i) maintaining the inventories of Fixtures and Tangible
     Personal Property, Inventory, Consumables, Supplies and Miscellaneous Hotel
     Assets, (ii) performing maintenance and repairs to the Improvements and
     tangible Personal Property; (iii) implementing the current marketing
     program for the Hotel; (v) maintaining the level of customer service at the
     Hotel; (vi) maintaining the level of security at the Real Property; and
     (vii) continuing to take all Bookings in the ordinary course of business.
     Without limiting the foregoing, Seller shall perform its obligations under,
     and otherwise comply with, the Space Leases, the Hotel Contracts, the
     Permits, any license agreements for IT Systems, the Liquor License, the
     Management Agreement, the Bookings and Legal Requirements, in each case in
     all material respects; provided, however, that the Seller shall have the
     right to exercise any of its rights under any of the foregoing. From the
     date of this Agreement until the Closing or earlier termination of this
     Agreement, Seller shall promptly provide Purchaser of any written notices
     or complaints Seller receives concerning the presence of toxic mold or
     fungi at the Real Property or other written claims made with respect to
     environmental matters at the Real Property.

          (b) From and after the Opening of Escrow, Seller will not enter into
     any new Hotel Contract or Space Lease, or cancel, modify, or renew any
     existing Hotel Contract or Space Lease or Permitted Exception, without the
     prior written consent of Purchaser, which Purchaser shall not unreasonably
     withhold, condition or delay prior to the expiration of the Inspection
     Period but which Purchaser may withhold in its sole and absolute discretion
     after the expiration of the Inspection Period; provided, however, that
     Purchaser's consent shall not be required for any Hotel Contract entered
     into with a third party prior to the expiration of the Inspection Period as
     long as (i) such Hotel Contract is cancelable upon not more than thirty
     (30) days notice without penalty or premium payment and (ii) Seller
     promptly gives notice to Purchaser of such Hotel Contract. If Purchaser
     fails to respond to a request for consent within ten (10) days after
     receipt of such request, such consent shall be deemed given.

          (c) Seller shall have the right, without notice to or consent of
     Purchaser, to make Bookings in the ordinary course of business, at no less
     than the Hotel's standard rates (including customary discounted rates as
     long as such discounted rates are bona fide third party Bookings).

          (d) Seller shall use commercially reasonable efforts to preserve in
     force all existing Permits and to cause all those expiring on or before the
     Closing Date to be renewed prior to the Closing Date. If any such Permit
     shall be suspended or revoked, Seller shall promptly notify Purchaser and
     shall take commercially reasonable measures to cause the reinstatement of
     such Permit.

          (e) Seller will maintain in effect all policies of casualty and
     liability insurance, or similar policies of insurance, with the same limits
     of coverage which it now carries with respect to the Hotel.


                                      U-35

          (f) Seller shall not remove any Fixtures and Tangible Personal
     Property from the Property (other than in the ordinary course of business
     in which case adequate replacements shall have been made).

          (g) Seller shall not alter the terms and conditions of the employment
     of any Employees, except in accordance with past practice consistently
     applied.

          (h) Seller shall not (i) create or allow any lien or similar
     encumbrance to be placed against the Property, and shall use commercially
     reasonable efforts to promptly discharge any such encumbrance that may
     arise, (ii) grant or enter into any easement, restrictive covenant or
     similar agreement affecting title to the Real Property without Purchaser's
     prior written consent in its sole but good faith discretion, or (iii)
     cancel, modify, or renew any existing Permitted Exception without
     Purchaser's prior written consent in its sole but good faith discretion.

                                   ARTICLE XI

                             CASUALTIES AND TAKINGS

     11.01 CASUALTIES.

          (a) If any damage to the Property shall occur prior to the Closing
     Date by reason of fire, windstorm, earthquake, hail, explosion or other
     casualty, and if the cost of repairing such damage will equal or exceed Two
     Million Dollars ($2,000,000), Purchaser may elect to (i) terminate this
     Agreement by giving written notice to Seller, in which event, subject to
     the provisions of Section 3.01(d), the Deposit shall be returned to
     Purchaser and neither party shall have any further Obligations or liability
     whatsoever to the other hereunder or (ii) receive an assignment of all of
     Seller's rights to any insurance proceeds and claims (including business
     interruption proceeds for the period after Closing) relating to such damage
     and acquire the Property without any adjustment in the Purchase Price in
     connection therewith.

          (b) If the cost of repairing such damage will not exceed Two Million
     Dollars ($2,000,000), the transactions contemplated hereby shall close
     without any adjustment in the Purchase Price in connection therewith and
     Purchaser shall receive an assignment of all of Seller's rights to any
     insurance proceeds or claims (including business interruption proceeds for
     any period after the Closing Date) except those proceeds allocable to costs
     incurred by, and lost profits of Seller for the period prior to Closing;
     provided, however, that the Purchaser shall receive a credit against the
     Purchase in the amount of any deductible or other uninsured amount with
     respect to any such damage.

     11.02 TAKINGS. If, prior to the Closing Date, all or any portion of the
Real Property is taken by eminent domain or by an act of governmental authority,
Seller shall promptly give Purchaser written notice thereof, and the following
shall apply:

          (a) If a material part of the Real Property is taken, either party
     may, within five (5) days after the giving of Seller's notice, by written
     notice to the other, elect to terminate this Agreement. In the event that
     either party shall so elect, subject to the


                                      U-36

     provisions of Section 3.01(d), the Deposit shall be returned to Purchaser
     whereupon this Agreement shall terminate and neither party hereto shall
     have any further rights or obligations hereunder.

          (b) If a material part of the Real Property is taken but neither party
     elects to terminate this Agreement pursuant to paragraph (a) above, or if
     an immaterial part of the Real Property is taken by an act of governmental
     authority, neither party shall have any right to terminate this Agreement,
     and the parties shall nonetheless proceed to the Closing in accordance with
     this Agreement, without any abatement of the Purchase Price or any
     liability or obligation on the part of Seller by reason of such taking,
     provided, however, that Seller shall, at the Closing, (i) assign and turn
     over, and Purchaser shall be entitled to receive and keep, the net proceeds
     of any award or other proceeds of such taking which may have been collected
     by Seller as a result of such taking, less any portion thereof applied to
     the cost of repairs necessitated by such taking and made by Seller prior to
     the Closing, or (ii) if no award or other proceeds shall have been
     collected, deliver to Purchaser an assignment of Seller's right to any such
     award or other proceeds which may be payable to Seller as a result of such
     taking and all claims related thereto, less an amount equal to the cost of
     any repairs necessitated by such taking and made by Seller prior to the
     Closing, which amount shall be paid to Seller by Purchaser at the Closing.

          (c) For the purposes hereof, a "material part" shall be deemed to mean
     any taking (i) which causes a reduction in the size of any of the buildings
     comprising the Real Property or materially interferes with the present use
     and operation of any of the buildings comprising the Real Property (ii)
     which results in the elimination of the sole or any required means of legal
     ingress and/or egress from the Real Property, to public roads, with no
     comparable, convenient, legal substitute ingress and/or egress being
     available, or (iii) which results in the elimination of any parking on the
     Land unless Purchaser concludes in its sole but good faith discretion that
     such parking is not required for the continued operation of the Hotel.

                                  ARTICLE XII

                              ADDITIONAL COVENANTS

     12.01 LIQUOR LICENSE; OTHER PERMITS; CONSENTS AND CLOSING CONDITIONS.
Purchaser and Seller shall use diligent, good faith efforts to effect the
transfer of the existing Liquor License to Purchaser or its designee on the
Closing Date or to enable Purchaser or its designee to obtain a new Liquor
License effective on the Closing Date. Purchaser agrees to pay all fees and
other amounts payable to any governmental authority in connection with the
transfer of the existing Liquor License. If Seller engages counsel in connection
with the transfer of the existing Liquor License, Purchaser shall be responsible
for the fees of such counsel. As promptly as practicable following the date of
this Agreement, Purchaser or its designee shall complete, execute and file with
the applicable liquor licensing authority all necessary applications for
transfer of the Liquor License or the issuance of a new Liquor License.
Purchaser specifically acknowledges and agrees that the transfer of the Liquor
License to Purchaser on the Closing Date shall not be a condition to Purchaser's
obligation to close the transaction contemplated under this Agreement. Purchaser
and Seller shall use diligent, good faith efforts to effect the


                                      U-37

transfer of the other Permits to Purchaser (other than the Excluded Permits) and
to enable Purchaser to obtain new Permits to replace any Excluded Permits.
Purchaser agrees to pay all out-of-pocket third party fees, charges, and related
costs in connection with the transfer of such Permits. Seller and Purchaser
shall use diligent, good faith efforts to obtain any other consent required to
be obtained from any third party in order to effect the transactions
contemplated by this Agreement including, without limitation, any consent
required for the assignment of any license for the use of any of the IT Systems
or any Hotel Contract; provided, however, that Seller shall not be required to
incur any unreimbursed material out-of-pocket costs in connection with obtaining
any such consent. It is understood that, except as otherwise provided in this
Agreement, obtaining any such consent is not a condition precedent to the
Closing and the failure to obtain any such consent shall not entitle Purchaser
to terminate this Agreement or defer the Closing Date or seek any other remedy.
Each of Seller and Purchaser agrees to act in good faith and to use commercially
reasonable efforts to satisfy all conditions to Closing set forth in Article
VIII and IX, as applicable.

     12.02 GUEST BAGGAGE. All baggage, boxes and similar items of guests who are
still in the Hotel on the Closing Date, which has been checked with or left in
the care of Seller shall be inventoried, sealed, and tagged jointly by Seller
and Purchaser on the Closing Date. Purchaser shall be responsible for and hereby
indemnifies Seller and its Indemnified Parties against any Liabilities in
connection with such baggage arising out of the acts of omissions of Purchaser
or its Affiliates (or any of their employees or agents) after the Closing Date.
Seller hereby indemnifies Purchaser and its Indemnified Parties against any
Liabilities in connection with baggage arising out of the acts or omissions of
Seller or its Affiliates (or any of their employees or agents) prior to the
Closing Date. The provisions of this Section 12.02 shall survive Closing.

     12.03 SAFE DEPOSITS. Immediately after the Closing, Seller shall send
written notice to guests or tenants or other persons who have safe deposit
boxes, if any, advising of the sale of the Hotel to Purchaser and requesting
immediate removal of the contents thereof or the removal thereof and concurrent
re-deposit of such contents pursuant to new safe deposit agreements with
Purchaser. Seller shall have a representative present when the boxes are opened,
in the presence of a representative of the Purchaser. Any property contained in
the safe deposit boxes after such re-deposit shall be the responsibility of
Purchaser, and Purchaser agrees to indemnify and hold harmless Seller and its
Indemnified Parties from and against any Liabilities arising out of or with
respect to such property. Upon Closing, Seller shall deliver to Purchaser all
keys in Seller's possession or control for all safe deposit boxes not then in
use and a list of all safe deposit boxes which are then in use but where the
contents have not been removed and re-deposited as set forth above, including
the name and room number of such depositor. Seller and Purchaser shall continue
to use reasonable efforts to cause such depositors to remove the contents and
re-deposit such contents pursuant to new safe deposit agreements with Purchaser
as set forth above. Seller shall continue to be responsible for, and shall
indemnify and hold harmless Purchaser and its Indemnified Parties from and
against any Liabilities arising out of or with respect to the contents of any
safe deposit box prior to the time that the contents thereof are removed and
re-deposited pursuant to a new safe deposit agreement with Purchaser as set
forth above.

     12.04 TAX APPEAL PROCEEDINGS. Seller shall be entitled to receive and
retain the proceeds from any tax appeals or protests for tax fiscal years ending
prior to the tax fiscal year ending in which the Closing Date occurs. Seller
shall continue to process any pending appeals or


                                      U-38

protests with respect to the tax fiscal year in which the Closing Date occurs,
and Purchaser shall have the right to participate therein with counsel of its
choosing at Purchaser's cost and expense. Seller shall have no right after the
date of this Agreement to file or otherwise initiate any appeal or protest with
respect to the property taxes on the Property for the tax fiscal year in which
the Closing Date occurs, and only Purchaser shall have the right to file or
otherwise initiate any such appeal or protest after the date hereof. Any net
proceeds obtained from any such proceeding with the respect to the tax fiscal
year in which the Closing Date occurs, after payment of attorneys' fees and
other costs associated with such process, will be prorated between the parties,
when received, as of the Closing Date.

     12.05 TERMINATION OF MANAGEMENT AGREEMENT. Seller shall terminate the
Management Agreement on or before Closing at its sole cost and expense.

                                  ARTICLE XIII

                              DEFAULTS AND REMEDIES

     13.01 SELLER'S REMEDIES. If Purchaser fails to perform its material
obligations under this Agreement for any reason except a default by Seller or
the failure of any condition precedent to Purchaser's obligations, Seller shall
be entitled as its sole remedy at law or in equity to terminate this Agreement
and receive the Deposit and interest thereon as liquidated damages and not as a
penalty, in full satisfaction of any claims against Purchaser. Seller and
Purchaser agree that the Seller's damages resulting from Purchaser's default are
difficult to determine, and the amount of the Deposit is a fair estimate of
those damages.

     13.02 PURCHASER'S REMEDIES. If Seller fails to perform its obligations
under this Agreement for any reason except the failure of any condition
precedent to Seller's obligations under this Agreement or Purchaser's default of
its material obligations, then Purchaser's sole remedies shall be: (a) to
terminate this Agreement by giving Seller written notice of such election prior
to or at Closing, whereupon (i) subject to the provisions of Section 3.01(d),
the Escrow Company shall promptly return to Purchaser the Deposit, and (ii)
Purchaser shall be entitled to payment by Seller of all actual out-of-pocket
costs incurred by Purchaser in connection with the transaction contemplated by
this Agreement; (b) to obtain a court order for specific performance; or (c) to
waive the default and close.

                                   ARTICLE XIV

                                    EMPLOYEES

     At Closing, Seller or Seller's Manager shall terminate or cause to be
terminated the employment of all Employees. Purchaser shall employ from and
after the Closing Date such of the Employees as Purchaser determines, in its
sole and absolute discretion, on such terms and conditions as Purchaser may
determine ("NEW HIRES"). Nothing in this provision shall be construed to limit
Purchaser's right to terminate, at Purchaser's sole cost and expense, the New
Hires subsequent to the Closing Date, subject to the requirements of applicable
law and the Collective Bargaining Agreements that Purchaser has agreed to
assume. Purchaser agrees to indemnify and hold Seller harmless from and against
any violations of the Worker Adjustment


                                      U-39

and Retraining Notification Act, 29 USC Section 2101 et seq., ("WARN ACT") or
the Illinois Worker Adjustment and Retraining Notification Act, 820 ILCS65
("ILLINOIS WARN") arising as a result of its actions subsequent to the Closing
Date. No employees shall be transferred. Any New Hires hired by the Purchaser
shall in all respects be and remain "at will" employees, and Purchaser shall
have the right to dismiss such employees at any time in its sole discretion and
Seller and Seller's Manager each hereby acknowledges and agrees that none of its
respective employee benefit programs are being assumed or continued by
Purchaser. Nothing in this Section 14.01 is intended to, or shall, confer on any
person or entity not a party of this Agreement any rights or benefits. Seller
shall, upon termination of the New Hires as set forth above, cause Seller's
Manager to pay the employees all earned wages, vacation pay, if any, or any
other compensation payable to the New Hires under federal and Illinois wage and
hour laws, that is due and payable.

                                   ARTICLE XV

                                  MISCELLANEOUS

     15.01 NOTICES. Except as otherwise provided in this Agreement, all notices,
demands, requests, consents, approvals, and other communications (each a
"NOTICE", collectively "NOTICES") required or permitted to be given under this
Agreement, or which are to be given with respect to this Agreement, shall be in
writing and shall be personally delivered, sent by registered or certified mail,
postage prepaid and return receipt requested, by overnight express courier,
postage prepaid, or by facsimile transmission with a confirming copy sent by
registered or certified mail or overnight express courier as set forth above, in
each case addressed to the party as designated below:

          If intended for Seller, to:      Boykin Chicago L.L.C.
                                           c/o AEW Capital Management, L.P.
                                           World Trade Center East
                                           Two Seaport Lane

                                           Attention: James Luchars
                                           Facsimile No.: (617) 261-9555

          with a copy to:                  Boykin Lodging Company
                                           Guildhall Building
                                           45 West Prospect Avenue
                                           Suite 1500
                                           Cleveland, Ohio 44115
                                           Attention: Andrew C. Alexander, Esq.
                                           Facsimile No.: (216) 430-1201

          With a copy to:                  Goodwin Procter, LLP
                                           Exchange Place
                                           Boston, Massachusetts 02109
                                           Attention: Samuel L. Richardson, Esq.
                                           Facsimile No.: (617) 227-8591


                                      U-40

          If intended for Purchaser, to:   The Falor Companies, Inc.
                                           980 North Michigan Avenue
                                           Suite 1400
                                           Chicago, Illinois 60611
                                           Attention:  Robert D. Falor
                                           Facsimile No.: (312) 214-4905

          with a copy to:                  Piper Rudnick LLP
                                           203 North LaSalle Street
                                           Suite 1800
                                           Chicago, Illinois 60601
                                           Attention:  Donald A. Shindler, Esq.
                                           Facsimile No.: (312) 630-5344

Notice mailed by registered or certified mail shall be deemed received by the
addressee three (3) days after mailing thereof. Notice personally delivered
shall be deemed received when delivered or refused. Notice mailed by overnight
express courier shall be deemed received by the addressee on the next Business
Day after mailing thereof. Notice transmitted by facsimile shall be deemed
received by the addressee upon sender's receipt of confirmation thereof. Either
party may at any time change the address for notice to such party by mailing a
Notice as aforesaid.

     15.02 SURVIVAL. Subject to Section 5.03, all of the representations,
warranties, obligations, covenants, agreements, undertakings, and
indemnifications of Seller and Purchaser contained in this Agreement and in any
closing documents delivered in connection with this Agreement shall survive the
Closing.

     15.03 CONSTRUCTION. This Agreement shall not be construed more strictly
against one party than against the other, merely by virtue of the fact that it
may have been prepared primarily by counsel for one of the parties, it being
recognized that both Purchaser and Seller have contributed substantially and
materially to the preparation of this Agreement.

     15.04 PUBLICITY. Unless required by law or necessary securities filings,
subject to Purchaser's right to perform certain marketing activities pursuant to
Section 3.01(d) of this Agreement, all notices to third parties and all other
publicity prior to Closing concerning the transactions contemplated by this
Agreement shall be jointly planned and coordinated by and between Purchaser and
Seller. Neither party shall act unilaterally in this regard without the prior
written approval of the other; however, this approval shall not be unreasonably
withheld or delayed. Purchaser may issue press releases after the Closing,
provided that such press releases do not contain references to either Boykin
Lodging Company or AEW Capital Management, L.P.

     15.05 ASSIGNMENT. Neither all nor any portion of Purchaser's interest under
this Agreement may be sold, assigned, encumbered, conveyed, or otherwise
transferred, whether directly or indirectly, voluntarily or involuntarily, or by
operation of law or otherwise including, without limitation, by a transfer of
all or substantially all of the interest in Purchaser (collectively, a
"TRANSFER"), without the prior written consent of Seller, which consent may be
granted or denied in Seller's sole and absolute discretion. Any attempted
Transfer without


                                      U-41

Seller's consent shall be null and void. Any request by Purchaser for Seller's
consent to a Transfer shall set forth in writing the details of the proposed
Transfer, including, without limitation, the name, ownership, and financial
condition of the prospective transferee and the financial details of the
proposed Transfer. Notwithstanding the foregoing, Purchaser, upon prior written
notice to Seller given not less than three (3) Business Days prior to the
Closing (which time period is agreed to be material and is required to permit
Seller properly to prepare, execute and deliver the items required to be
delivered by it pursuant to this Agreement) which notice specifies the exact
legal name, address and any other information necessary for the preparation of
the closing documents to be delivered under this Agreement, may assign its
rights and delegate its duties under this Agreement to an entity which is owned
or controlled by or under common control with, directly or indirectly,
Purchaser, the principals of Purchaser and/or investors with Purchaser or the
principals of Purchaser, for the purposes of closing on the transaction provided
that such assignment shall not delay the Closing and shall not require Seller to
obtain any additional or revised third party consents, certificates or
approvals. In the event Purchaser so assigns and delegates its rights and duties
under this Agreement, it shall deliver to Seller at or prior to Closing an
instrument of assignment and assumption evidencing such assignment and
delegation. In addition, Purchaser shall provide Seller with copies of all
Transfer documentation, certified by Purchaser to be true, correct, and
complete, and with all other information which Seller may reasonably request. No
transfer, whether with or without Seller's consent: (i) shall operate to release
Purchaser or alter Purchaser's primary liability to perform the obligations of
Purchaser under this Agreement or (ii) shall cause Seller to incur any cost or
other economic detriment in connection with such Transfer. Purchaser shall pay
any and all additional costs and expenses (including, without limitation,
reasonable attorneys' fees, charges, and disbursements) incurred by Seller that
would not otherwise have been incurred by Seller had Purchaser not caused a
Transfer. Subject to the foregoing, this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective permitted
successors and assigns.

     15.06 COUNTERPARTS; FACSIMILE EXECUTION; INTEGRATION. This Agreement may be
executed in any number of counterparts, each of which shall constitute an
original but all of which, taken together, shall constitute but one and the same
instrument. A party may deliver executed signature pages to this Agreement by
facsimile transmission to the other party, which facsimile copies shall be
deemed to be an original executed signature page binding on the party that so
delivered the executed signature page by facsimile. This Agreement (including
all exhibits) contains the entire agreement between the parties with respect to
the subject matter hereof, supersedes all prior letters of intent,
understandings, or other agreement, whether written or oral, if any, with
respect thereto and may not be amended, supplemented, or terminated, nor shall
any Obligation hereunder or condition hereof be deemed waived, except by a
written instrument to such effect signed by the party to be charged.

     15.07 GOVERNING LAW; JURISDICTION AND VENUE. This Agreement shall be
governed by and construed in accordance with the laws of the State of Illinois,
without giving effect to any principles regarding conflict of laws. Any
litigation or other court proceeding with respect to any matter arising from or
in connection with this agreement shall be conducted in the Illinois State
Superior Court in Cook County or The United States District Court for the
Northern District Court in the State of Illinois, and each of Seller (for itself
and its Indemnified Parties)


                                      U-42

and Purchaser (for itself and its Indemnified Parties) hereby submit to
jurisdiction and consent to venue in such courts, and waive any defense based on
forum non conveniens.

     15.08 FURTHER ASSURANCES. From the date of this Agreement until the Closing
or termination of this Agreement, Seller and Purchaser shall use commercially
reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper or advisable to consummate the
transaction described in this Agreement, including, without limitation, (a)
effecting all registrations and filings required under this Agreement or Legal
Requirements, and (c) satisfying the Closing Conditions set forth in this
Agreement. After the Closing, Seller and Purchaser shall use commercially
reasonable efforts (at no cost or expense to such Party, other than any de
minimis cost or expense or any cost or expense which the requesting Party agrees
in writing to reimburse) to further effect the transaction contemplated in this
Agreement.

     15.09 CONFIDENTIALITY. Unless the other party specifically and expressly
otherwise agrees in writing, each party hereby agrees that all information
regarding the Property or this transaction, of whatsoever nature made available
to it ("PROPRIETARY INFORMATION") is confidential and shall not be disclosed to
any other person except those reasonably assisting such party with the
transaction, Purchaser's investors or Purchaser's lender, if any (and then only
upon Purchaser making such person aware of the confidentiality restriction and
procuring such person's agreement to be bound thereby). In the event that the
transaction contemplated by this Agreement fails to close for any reason
whatsoever, Purchaser agrees to return to Seller, or cause to be returned to
Seller, all Proprietary Information that was provided to Purchaser by Seller and
Purchaser agrees not to retain any copy of such Proprietary Information provided
to it by Seller and to instruct all persons and entities that have received a
copy or copies of such Proprietary Information to immediately destroy such
Proprietary Information. Further, Purchaser agrees not to use or allow to be
used any Proprietary Information for any purpose other than to determine whether
to proceed with the transaction contemplated by this Agreement, or if the same
is consummated, in connection with the operation of the Property post-Closing.
The provisions of this Section 15.09 shall survive the Closing or the
termination of this Agreement.

     15.10 ATTORNEYS' FEES. If any action or proceeding is commenced by either
party to enforce their rights under this Agreement or to collect damages as a
result of the breach of any of the provisions of this Agreement, the prevailing
party in such action or proceeding, including any bankruptcy, insolvency or
appellate proceedings, shall be entitled to recover all reasonable costs and
expenses, including, without limitation, reasonable attorneys' fees and court
costs, in addition to any other relief awarded by the court.

     15.11 PREVAILING PARTY. If any litigation or other court action,
arbitration or similar adjudicatory proceeding is commenced by any party to
enforce its rights under this Agreement or any document delivered pursuant to
this Agreement against any other party, all fees, costs and expenses, including,
without limitation, reasonable attorneys fees and court costs, incurred by the
prevailing party in such litigation, action, arbitration or proceeding shall be
reimbursed by the losing party; provided, that if a party to such litigation,
action, arbitration or proceeding prevails in part, and loses in part, the
court, arbitrator or other adjudicator presiding over such litigation, action,
arbitration or proceeding shall award a reimbursement of the fees, costs and
expenses incurred by such party on an equitable basis.


                                      U-43

     15.12 DELIVERY OF DRAFTS NOT AN OFFER. The preparation and/or delivery of
unsigned drafts of this Agreement shall not create any legally binding rights in
the Property and/or obligations of the parties, and Purchaser and Seller
acknowledge that this Agreement shall be of no effect until it is duly executed
and delivered by both Purchaser and Seller.

     15.13 SEVERABILITY. This Agreement is intended to be performed in
accordance with, and only to the extent permitted by, all applicable laws,
ordinances, rules, and regulations. If any provision of this Agreement, or the
application thereof to any person or circumstance, shall, for any reason and to
any extent be invalid or unenforceable, the remainder of this Agreement and the
application of such provision to other persons or circumstances shall not be
affected thereby but rather shall be enforced to the greatest extent permitted
by law.

                                  ARTICLE XVI

                            GENERAL ESCROW PROVISIONS

     16.01 GENERAL ESCROW PROVISIONS. The obligations and rights of the Escrow
Company under this Agreement shall be subject to the following terms and
conditions:

          (a) The duties and obligations of Escrow Company shall be determined
     solely by the express provisions of this Agreement and no implied duties or
     obligations shall be implied against Escrow Company. Further, Escrow
     Company shall be under no obligation to refer to any other document between
     or among Purchaser and Seller referred to in or related to this Agreement,
     unless Escrow Company is provided with a copy of such document and consents
     thereto in writing.

          (b) Escrow Company shall not be liable to anyone by reason of any
     error of judgment, or for any act done or step taken or omitted by Escrow
     Company in good faith, or for any mistake of fact or law, or for anything
     which Escrow Company may do or refrain from doing in connection herewith,
     unless caused by or arising out of Escrow Company's actual and intentional
     misconduct or gross negligence.

          (c) Escrow Company shall be entitled to rely, and shall be protected
     in acting in reliance, upon any writing furnished to Escrow Company by
     either Purchaser or Seller and shall be entitled to treat as genuine, and
     as the document it purports to be, any letter, paper or other document
     furnished to Escrow Company. Escrow Company may rely on any affidavit of
     either Purchaser or Seller or any other person as to the existence of any
     facts stated therein to be known by the affiant.

          (d) If Seller shall become entitled to retain or receive the Deposit
     or other amount paid under this Agreement, Escrow Company shall pay the
     same to Seller together with all interest earned thereon and if Purchaser
     shall become entitled to a return of the Deposit or other amount paid under
     this Agreement, Escrow Company shall pay the same to Purchaser together
     with all interest earned thereon; provided, however, that no disbursement
     pursuant to this subsection shall be made by Escrow Company until the third
     (3rd) Business Day following the receipt or deemed receipt of notice by
     Seller and Purchaser from Escrow Company of its intention to so disburse,
     and disbursement made


                                      U-44

     by Escrow Company after the passage of such three (3) Business Day period
     shall relieve Escrow Company from all liability in connection with such
     disbursement unless such disbursement is proscribed by order of a court of
     competent jurisdiction or objected to in writing by Seller or Purchaser. If
     such disbursement is objected to in writing by Seller or Purchaser within
     such three (3) Business Day period, then Escrow Company shall not make such
     disbursement until unanimously instructed in writing by Purchaser and
     Seller, or is directed to make such disbursement by a court of competent
     jurisdiction. Notwithstanding anything to the contrary set forth above, no
     such notice by Escrow Company shall be given and no notice of objection may
     or shall be given by Seller in the event Purchaser terminates this
     Agreement as set forth in Section 4.04, and in such event Escrow Company
     shall promptly pay the Deposit together with all interest thereon to
     Purchaser.

          (e) In the event of any disagreement between Purchaser and Seller
     resulting in adverse claims and demands being made in connection with or
     against the funds held in escrow, Escrow Company shall refuse to comply
     with the claims or demands of either party until such disagreement is
     finally resolved (i) by a court of competent jurisdiction (in proceedings
     which Escrow Company or any other party may initiate, it being understood
     and agreed by Purchaser and Seller that Escrow Company has authority (but
     not the obligation) to initiate such proceedings), or (ii) by an arbitrator
     in the event that Purchaser and Seller mutually and jointly determine to
     submit the dispute to arbitration pursuant to the rules of the American
     Arbitration Association, and in so doing Escrow Company shall not be or
     become liable to a party, or (iii) by written settlement between Purchaser
     and Seller.

          (f) Purchaser and Seller each agree to jointly and severally indemnify
     and hold harmless Escrow Company against any and all losses, liabilities,
     costs (including legal fees) and other expenses in any way incurred by
     Escrow Company (except to the extent the Escrow Company willfully
     disregards any provision of this Agreement to which it is bound) in
     connection with or as a result of any disagreement between Purchaser and
     Seller under this Agreement or otherwise incurred by Escrow Company in any
     way on account of its role as Escrow Company.

          (g) Escrow Company in its sole discretion shall have the right to
     resign as Escrow Company under this Agreement, provided that it shall
     provide both Purchaser and Seller with at least thirty (30) days written
     notice of such resignation pursuant to the notice provisions of this
     Agreement. Upon any such resignation, Escrow Company shall transfer the
     Deposit and any interest earned thereon to a successor Escrow Company
     jointly approved by Purchaser and Seller, whereupon the original Escrow
     Company shall have no further obligation or liability whatsoever as Escrow
     Company under this Agreement.

          (h) The parties hereby acknowledge and agree that Federal Deposit
     Insurance for the Deposit, if any, is limited to a cumulative maximum
     amount of $100,000 for each individual depositor for all of the depositor's
     accounts at the same or related institution. The parties further hereby
     acknowledge and agree that certain banking instruments such as, but not
     limited to, repurchase agreements and letters of credit, are not covered at
     all


                                      U-45

     by Federal Deposit Insurance. The parties acknowledge and agree that Escrow
     Company shall have no obligation or liability with respect to insuring the
     Deposit or with respect to the solvency of the depository institution, or
     otherwise with respect to the appropriateness of the depository institution
     for purposes of the Deposit. Further, the parties understand that Escrow
     Company assumes no responsibility for, nor will the parties hold the same
     liable for, any loss occurring which arises from the fact that (x) the
     amount of the account or accounts contemplated hereby may cause the
     aggregate amount of any individual depositor's account or accounts to
     exceed $100,000, (y) that this excess amount is not insured by the Federal
     Deposit Insurance Corporation, or (z) that Federal Deposit Insurance is not
     available on certain types of bank instruments.

          (i) Escrow Company may pay the Deposit into a court of competent
     jurisdiction upon commencement by the Escrow Company of an interpleader
     action in such court. The reasonable out-of-pocket costs and attorneys'
     fees of the Escrow Company for such interpleader action shall be paid by
     the losing party in such interpleader action.

          (j) The rights and immunities of Escrow Company hereunder shall apply
     equally to its partners, of counsel, associates, employees, affiliates and
     agents.

          (k) All of Escrow Company's obligations under this Agreement shall
     automatically terminate upon disbursing the Deposit as set forth above.

                          [The signature page follows]


                                      U-46

     IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be executed, all as of the day and year first above written.

                                        SELLER:

                                        BOYKIN CHICAGO L.L.C., a Delaware
                                        limited liability company

                                        By: Boykin/AEW LLC, its Manager

                                        By: Boykin Hotel Properties, L.P., its
                                        Operating Member

                                        By: Boykin Lodging Company, its General
                                        Partner


                                        By: /s/ Robert W. Boykin
                                            ------------------------------------
                                            Name: Robert W. Boykin
                                                  ------------------------------
                                            Title: Chief Executive Officer
                                                  ------------------------------
                                                   and Chairman
                                                  ------------------------------


                                        PURCHASER:

                                        THE FALOR COMPANIES, INC., an
                                        Illinois corporation


                                        By: /s/ Robert Falor
                                            ------------------------------------
                                            Name: Robert Falor
                                                  ------------------------------
                                            Title: President
                                                  ------------------------------

     IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written solely with respect to their respective obligations set
forth in Section 5.01(n)(vi).

                                        MANAGER:

                                        CHIBOY LLC, an Ohio limited liability
                                        company


                                        By: /s/ John E. Boykin
                                            ------------------------------------
                                            Name: John E. Boykin
                                                  ------------------------------
                                            Title: President
                                                  ------------------------------


                                      U-47

                                        ESCROW COMPANY:

                                        STEWART TITLE GUARANTY COMPANY


                                        By:
                                            ------------------------------------
                                            Name:
                                                  ------------------------------
                                            Title:
                                                  ------------------------------


                                      U-48

              FIRST AMENDMENT TO HOTEL PURCHASE AND SALE AGREEMENT

     This First Amendment to Hotel Purchase and Sale Agreement (the "Amendment")
is made and entered into as of December 20, 2004 by and between Boykin Chicago
L.L.C. ("Seller") and the Falor Companies, Inc. ("Purchaser").

                                    RECITALS

     A. Seller and Purchaser are parties to that certain Hotel Purchase and Sale
Agreement dated as of November 5, 2004 (the "Purchase Agreement") concerning the
hotel and related facilities known as the Hotel 71 located at 71 East Wacker
Drive, Chicago, IL.

     B. Seller and Purchaser desire to enter into this Amendment for the
purposes of amending certain terms and provisions of the Purchase Agreement.

                                    AGREEMENT

     NOW THEREFOR, in consideration of the mutual promises and covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Seller and Purchaser agree as
follows:

     1. Defined Terms.  All capitalized terms used herein and not otherwise
defined shall have the meaning set forth in the Purchase Agreement.

     2. MRG Personal Property.  Pursuant to Section 6.07 of the Purchase
Agreement, Seller is obligated to remove Excluded Assets, including assets owned
by MRG Enterprises, LLC, the previous tenant at the restaurant space, on or
before the Closing Date. The assets of MRG Enterprises LLC which Seller is
obligated to remove are more particularly described on Exhibit A attached hereto
(the "MRG Personal Property"). Purchaser and Seller agree that notwithstanding
the provisions of Section 6.7 of the Purchase Agreement, Seller shall not be
obligated to remove the MRG Personal Property on or before the Closing Date.
Notwithstanding the foregoing, in the event that Purchaser gives Seller notice
on or before January 31, 2005 to remove the MRG Personal Property, Purchaser
shall remove the MRG Personal Property at its expense, on or before fourteen
(14) days after receipt of such notice, and shall repair all damage caused by
such removal, but shall have not obligation to replace any MRG Personal Property
so removed.

     3. Miscellaneous.  A telecopied facsimile of a duly executed counterpart of
this Amendment shall be sufficient to evidence the binding agreement of each
party to the terms hereof. Except as amended hereby, all terms and conditions of
the Purchase Agreement are, and remain in full force and effect. In the event of
a conflict between the terms of the Purchase Agreement and the terms of this
Amendment, the terms of this Amendment shall control.

IN WITNESS WHEREOF, the parties have executed this Amendment effective as of the
date set forth above.

                          SELLER:

                          BOYKIN CHICAGO L.L.C., a Delaware
                          limited liability company

                          By: Boykin/AEW LLC, its manager

                              By: Boykin Hotel Properties, L.P.,
                                  its operating member

                                  By: Boykin Lodging Company,
                                      its general partner


                                      By: /s/ Richard C. Conti
                                          --------------------------------------
                                          Name: Richard C. Conti
                                                --------------------------------
                                          Title: President
                                                 -------------------------------


                              PURCHASER:

                              THE FALOR COMPANIES, INC., an Illinois corporation


                              By: /s/ Robert Falor
                                  ----------------------------------------------
                                  Name: Robert Falor
                                        ----------------------------------------
                                  Title: President
                                         ---------------------------------------

              SECOND AMENDMENT TO HOTEL PURCHASE AND SALE AGREEMENT

     This Second Amendment to Hotel Purchase and Sale Agreement (the
"Amendment") is made and entered into as of December 27, 2004 by and between
Boykin Chicago L.L.C. ("Seller") and the Falor Companies, Inc. ("Purchaser").

                                    RECITALS

     A. Seller and Purchaser are parties to that certain Hotel Purchase and Sale
Agreement dated as of November 5, 2004 as amended by First Amendment to Hotel
Purchase and Sale Agreement dated as of December 20, 2004 (as amended, the
"Purchase Agreement") concerning the hotel and related facilities known as the
Hotel 71 located at 71 East Wacker Drive, Chicago, IL.

     B. Seller and Purchaser desire to enter into this Amendment for the
purposes of amending certain terms and provisions of the Purchase Agreement.

                                    AGREEMENT

     NOW THEREFOR, in consideration of the mutual promises and covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Seller and Purchaser agree as
follows:

     1. Defined Terms.  All capitalized terms used herein and not otherwise
defined shall have the meaning set forth in the Purchase Agreement.

     2. Closing Date.  The Closing Date is hereby extended to Tuesday, February
1, 2005. Notwithstanding the foregoing, Purchaser shall have the right to
accelerate the Closing Date to a date earlier than February 1, 2005 by providing
Seller with fourteen (14) days prior written notice.

     3. Purchase Price.  The Purchase Price is hereby increased by Five Hundred
Thousand Dollars to Ninety-Three Million Dollars ($93,000,000).

     Notwithstanding the foregoing, in the event that the Closing Date occurs
prior to February 1, 2005, the Purchase Price shall be reduced by $18,520 for
each day prior to February 1, 2005 that the Closing occurs. For example, if the
closing occurs on January 27, 2005, Purchaser shall be entitled to a reduction
in the Purchase Price in an amount equal to $92,600 (e.g. $18,520 x 5).

     4. Second Additional Deposit.  On or before Thursday, December 30,
Purchaser shall deposit with the Escrow Company, as escrow company, the
additional amount of $1,000,000 by certified check or wire transfer of
immediately available funds as an additional

deposit (the "Second Additional Deposit"). The Second Additional Deposit,
together with interest earned thereon, shall constitute part of the Deposit.

     5. Waiver of Contingencies.  Notwithstanding anything to the contrary
contained in the Purchase Agreement, including without limitation, the
provisions of Section 9.01 and 9.02 of the Purchase Agreement, Purchaser waives
any right to terminate the Purchase Agreement for any reason other than (i) the
failure of the Seller to deliver the items set forth in Section 6.03 of the
Purchase Agreement (other than the certificate referenced in Section 6.03(d)
which Purchaser agrees Seller no longer has to deliver) and (ii) the failure of
Seller to comply with the provisions of Section 6.08 of the Purchase Agreement.

     6. Miscellaneous.  A telecopied facsimile of a duly executed counterpart of
this Amendment shall be sufficient to evidence the binding agreement of each
party to the terms hereof. Except as amended hereby, all terms and conditions of
the Purchase Agreement are, and remain in full force and effect. In the event of
a conflict between the terms of the Purchase Agreement and the terms of this
Amendment, the terms of this Amendment shall control.

IN WITNESS WHEREOF, the parties have executed this Amendment effective as of the
date set forth above.

                          SELLER:

                          BOYKIN CHICAGO L.L.C., a Delaware
                          limited liability company

                          By: Boykin/AEW LLC, its manager

                              By: Boykin Hotel Properties, L.P.,
                                  its operating member

                                  By: Boykin Lodging Company,
                                      its general partner


                                      By: /s/ Shereen P. Jones
                                          --------------------------------------
                                          Name: Shereen P. Jones
                                                --------------------------------
                                          Title: Executive Vice President,
                                                 -------------------------------
                                                 Chief Financial and Investment
                                                 -------------------------------
                                                 Officer
                                                 -------------------------------


                              PURCHASER:

                              THE FALOR COMPANIES, INC., an Illinois corporation


                              By: /s/ Robert Falor
                                  ----------------------------------------------
                                  Name: Robert Falor
                                        ----------------------------------------
                                  Title: President
                                         ---------------------------------------

              ASSIGNMENT AND ASSUMPTION OF HOTEL PURCHASE AND SALE
              ----------------------------------------------------
                              AGREEMENT (HOTEL 71)
                              --------------------

         THIS ASSIGNMENT AND ASSUMPTION OF HOTEL PURCHASE AND SALE AGREEMENT
(this "ASSIGNMENT") is made as of this 28th day of January, 2005, by THE FALOR
COMPANIES, INC., an Illinois corporation ("ASSIGNOR"), to CHICAGO H&S HOTEL
PROPERTY, LLC, a Delaware limited liability company ("ASSIGNEE").

                                    RECITALS:
                                    ---------

         A.      Assignor, as buyer, and Boykin Chicago, L.L.C., a Delaware
                 limited liability company ("SELLER"), as seller, have entered
                 into a Hotel Purchase and Sale Agreement dated as of November
                 5, 2004, as amended by the First Amendment to Hotel Purchase
                 and Sale Agreement dated as of December 20, 2004, the Second
                 Amendment to Hotel Purchase and Sale agreement dated as of
                 December 27, 2004 (as so amended and as further amended from
                 time to time, the "AGREEMENT"). Under the Agreement Seller has
                 agreed to sell to Assignor, and Assignor has agreed to purchase
                 from Seller, the Property (as defined in the Agreement); and

         B.      Assignor desires to assign to Assignee, and Assignee desires
                 to accept from Assignor, all of Assignor's interest in the
                 Agreement.

         Assignor and Assignee agree:

         1.      Assignor hereby assigns to Assignee all of Assignor's
                 interest in the Agreement.

         2.      Assignee, for itself and its successors and assigns, hereby
                 accepts the assignment identified above, and assumes each of
                 Assignor's obligations as "Buyer" under the Agreement.

                         [signatures on following page]






Assignor and Assignee have executed this Assignment and Assumption of Hotel
Purchase and Sale Agreement as of the date first written above.

         ASSIGNOR:
         ---------

         THE FALOR COMPANIES, INC.

         By: /s/ Robert Falor
             ----------------
                 Name: Robert Falor
                 Title: President

         ASSIGNEE:
         ---------

         CHICAGO H&S HOTEL PROPERTY, LLC

         By:      Chicago H&S Investors, LLC, a Delaware limited liability
                  company, its manager

                  By:      Chicago H&S Manager, LLC, a Delaware limited
                           liability company, its manager

                           By:      Chicago H&S Senior Investors, LLC, a
                                    Delaware limited liability company,
                                    its manager

                                    By: /s/ Robert Falor
                                        ----------------
                                            Name: Robert Falor, its Manager







              THIRD AMENDMENT TO HOTEL PURCHASE AND SALE AGREEMENT

     This Third Amendment to Hotel Purchase and Sale Agreement (the "Amendment")
is made and entered into as of February 1, 2005 by and between Boykin Chicago
L.L.C. ("Seller") and the Falor Companies, Inc. ("Purchaser").

                                    RECITALS

     A. Seller and Purchaser are parties to that certain Hotel Purchase and Sale
Agreement dated as of November 5, 2004 as amended by First Amendment to Hotel
Purchase and Sale Agreement dated as of December 20, 2004 and Second Amendment
to Hotel Purchase and Sale Agreement dated as of December 27, 2004 (as amended,
the "Purchase Agreement") concerning the hotel and related facilities known as
the Hotel 71 located at 71 East Wacker Drive, Chicago, IL.

     B. Seller and Purchaser desire to enter into this Amendment for the
purposes of amending certain terms and provisions of the Purchase Agreement.

                                    AGREEMENT

     NOW THEREFORE, in consideration of the mutual promises and covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Seller and Purchaser agree as
follows:

     1. Defined Terms.  All capitalized terms used herein and not otherwise
defined shall have the meaning set forth in the Purchase Agreement.

     2. Closing Date.  The Closing Date is hereby extended to Tuesday, March 1,
2005. Notwithstanding the foregoing, Purchaser shall have the right to
accelerate the Closing Date to a date earlier than March 1, 2005 by providing
Seller with fourteen (14) days prior written notice.

     3. Purchase Price.  The Purchase Price is hereby increased by One Million
Two Hundred Thousand Dollars to Ninety-Four Million Two Hundred Thousand Dollars
($94,200,000). The Purchase Price is also be increased by the amount of the
Corus Extension Fee, if any.

     Notwithstanding the foregoing, in the event that the Closing Date occurs
prior to March 1, 2005, the Purchase Price shall be reduced by $21,425.00 for
each day prior to March 1, 2005 that the Closing occurs. For example, if the
Closing occurs on February 24, 2005, Purchaser shall be entitled to a reduction
in the Purchase Price in an amount equal to $107,125 (e.g. $21,425 x 5).

     4. Deposit.  Purchaser and Seller hereby authorize the Escrow Company to
release the entire Deposit to Seller pursuant to the wire instructions attached
as Exhibit A (as the same may be changed by Seller by notice to Purchaser, the
"Wire Instructions"). Purchaser acknowledges that the Deposit has been fully
earned by Seller and is completely non-refundable,

but shall be applied to the Purchase Price at Closing. In addition, on or before
one Business Day after the execution by Seller of this Amendment, Purchaser
shall wire to Seller pursuant to the Wire Instructions an additional amount of
$300,000 (the "First Extension Fee"). On or before February 20, 2005, Purchaser
shall wire to Seller pursuant to the Wire Instructions a second additional
amount of $300,000 (the "Second Extension Fee"). The First Extension Fee and the
Second Extension Fee have been fully earned by Seller and are completely
non-refundable, but shall be applied to the Purchase Price at Closing. In the
event that Purchaser fails to wire to Seller the First Extension Fee or the
Second Extension Fee within the time frame set forth herein, Seller shall have
the right to terminate the Purchase Agreement and shall have a claim against
Purchaser for the amount of the unfunded First Extension Fee and Second
Extension Fee.

     5. Corus Extension Fee.  Purchaser acknowledges that in order to extend the
maturity date of the existing mortgage loan encumbering the property, Seller is
required to pay its lender an extension fee of $250,000 on or before February
12, 2005 (as the same may be reduced or eliminated by Seller's lender in its
sole discretion, the "Corus Extension Fee"). Seller shall request that the
lender eliminate and/or reduce the Corus Extension Fee but can give Purchaser no
assurances that such fee will be reduced or eliminated. On or before February
10, 2005, Purchaser shall wire to Seller an amount equal to the Corus Extension
Fee.

     6. MRG Personal Property.  Pursuant to the First Amendment to Hotel
Purchase and Sale Agreement, Purchaser agreed that Seller has no obligation to
remove the MRG Personal Property on or before the Closing Date unless Purchaser
gave Seller notice on or before January 31, 2005. Purchaser acknowledges that
Purchaser did not deliver such notice and waives any claim it may have against
Seller as a result of Seller failing to remove the MRG Personal Property on or
before the Closing Date.

     7. Remedies.  Notwithstanding anything contrary contained in the Purchase
Agreement, Purchaser acknowledges that its sole remedy in the event Seller fails
to perform its obligations under, or otherwise breaches, the Agreement shall be
to obtain a court order for specific performance compelling Seller to convey the
Property to Purchaser in accordance with the terms of the Purchase Agreement .
Except for Purchaser's right to initiate such process to obtain a court order
for a specific performance, Purchaser, on behalf of itself, its agents and
successors and assigns, covenants not to sue Seller with respect to any matter
relating to the Property, the Purchase Agreement or the transaction described
therein and releases Seller and its members, officers, directors and agents from
any liability with respect thereto.

     8. Miscellaneous.  A telecopied facsimile of a duly executed counterpart of
this Amendment shall be sufficient to evidence the binding agreement of each
party to the terms hereof. Except as amended hereby, all terms and conditions of
the Purchase Agreement are, and remain in full force and effect. In the event of
a conflict between the terms of the Purchase Agreement and the terms of this
Amendment, the terms of this Amendment shall control.

     IN WITNESS WHEREOF, the parties have executed this Amendment effective as
of the date set forth above.

                          SELLER:

                          BOYKIN CHICAGO L.L.C., a Delaware
                          limited liability company

                          By: Boykin/AEW LLC, its manager

                              By: Boykin Hotel Properties, L.P.,
                                  its operating member

                                  By: Boykin Lodging Company,
                                      its general partner


                                      By: /s/ Shereen P. Jones
                                          --------------------------------------
                                          Name: Shereen P. Jones
                                          Title: Executive Vice President and
                                          Chief Financial and Investment Officer


                          PURCHASER:

                          THE FALOR COMPANIES, INC., an Illinois corporation


                          By: /s/ Robert D. Falor
                              --------------------------------------------------
                              Name: Robert D. Falor
                                    --------------------------------------------
                              Title: President and CEO
                                     -------------------------------------------

                   FOURTH AMENDMENT TO HOTEL PURCHASE AND SALE
                                    AGREEMENT

     This Fourth Amendment to Hotel Purchase and Sale Agreement (the
"Amendment") is made and entered into as of March 1, 2005 by and between Boykin
Chicago L.L.C. ("Seller") and Chicago H&S Hotel Property, LLC ("Purchaser").

                                    RECITALS

     A. Seller and Purchaser are parties to that certain Hotel Purchase and Sale
Agreement dated as of November 5, 2004 as amended by First Amendment to Hotel
Purchase and Sale Agreement dated as of December 20,2004, Second Amendment to
Hotel Purchase and Sale Agreement dated as of December 27, 2004 and Third
Amendment dated February 1, 2005 (as amended, the "Purchase Agreement")
concerning the hotel and related facilities known as the Hotel 71 located at 71
East Wacker Drive, Chicago, IL.

     B. Seller and Purchaser desire to enter into this Amendment for the
purposes of amending certain terms and provisions of the Purchase Agreement.

                                    AGREEMENT

     NOW THEREFORE, in consideration of the mutual promises and covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Seller and Purchaser agree as
follows:

     1. Defined Terms.  All capitalized terms used herein and not otherwise
defined shall have the meaning set forth in the Purchase Agreement.

     2. Closing Date.  The Closing Date is hereby extended to noon Eastern
Standard Time, Friday, March 11, 2005.

     3. Purchase Price.  The Purchase Price is hereby increased by Three Hundred
and Fifty Thousand Dollars ($350,000) to Ninety-Four Million Five Hundred Fifty
Thousand Dollars ($94,550,000). One Hundred Thousand Dollars ($100,000) (the
"Cost Coverage Amount") of such Purchase Price increase shall be wired to Seller
pursuant to the wire instructions attached hereto as Exhibit A (the "Wire
Instructions") on or before 5:00 pm on March 1, 2005 and shall be applied by
Seller, at Seller's sole and absolute discretion, to cover Seller's costs with
respect to the fourth extension of the Closing Date. The Cost Coverage Amount
shall be applied to the Purchase Price at Closing.

     4. Additional Payment.  Purchaser acknowledges that the Deposit, the First
Extension Fee, the Second Extension Fee and the Third Extension Fee have been
fully earned by Seller and are completely non-refundable, but shall be applied
to the Purchase Price at Closing. In addition, on or before 5:00 pm on March 2,
2005, Purchaser shall wire to Seller pursuant to the Wire Instructions an
additional amount of Seven Hundred Fifty Thousand Dollars ($750,000). The Fourth
Extension Fee has been fully earned by Seller and is completely non-

refundable, but shall be applied to the Purchase Price at Closing. In the event
that Purchaser fails to wire to Seller the Fourth Extension Fee and/or the Cost
Coverage Amount within the time fiame set forth herein, Seller shall have the
right to terminate the Purchase Agreement and shall have a claim against
Purchaser for the amount of the unfunded Fourth Extension Fee and the Cost
Coverage Amount.

     5. Collective Bargaining Assignment.  The Collective Bargaining Assignment
referred to in Section 6.04(e) of the Purchase Agreement and attached hereto as
Exhibit B shall be executed and delivered by Purchaser or Purchaser's management
company designated by Purchaser to operate the Hotel on or before one (1)
Business Day after the date hereof.

     6 . Remedies.  Notwithstanding anything contrary contained in the Purchase
Agreement, Purchaser acknowledges that its sole remedy in the event Seller fails
to perform its obligations under, or otherwise breaches, the Agreement shall be
to obtain a court order for specific performance compelling Seller to convey the
Property to Purchaser in accordance with the terms of the Purchase Agreement .
Except for Purchaser's right to initiate such process to obtain a court order
for a specific performance, Purchaser, on behalf of itself, its agents and
successors and assigns, covenants not to sue Seller with respect to any matter
relating to the Property, the Purchase Agreement or the transaction described
therein and releases Seller and its members, officers, directors and agents from
any liability with respect thereto.

     7. Miscellaneous.  A telecopied facsimile of a duly executed counterpart of
this Amendment shall be sufficient to evidence the binding agreement of each
party to the terms hereof. Except as amended hereby, all terms and conditions of
the Purchase Agreement are, and remain in full force and effect. In the event of
a conflict between the terms of the Purchase Agreement and the terms of this
Amendment, the terms of this Amendment shall control.

IN WITNESS WHEREOF, the parties have executed this Amendment effective as of the
date set forth above.

                          SELLER:

                          BOYKIN CHICAGO L.L.C., a Delaware
                          limited liability company

                          By: Boykin/AEW LLC, its manager

                              By: Boykin Hotel Properties, L.P.,
                                  its operating member

                                  By: Boykin Lodging Company,
                                      its general partner


                                  By: /s/ Richard C. Conti
                                      ------------------------------------------
                                      Name: Richard C. Conti
                                      Title: President and Chief
                                      Operating Officer


                          PURCHASER:

                          CHICAGO H&S HOTEL PROPERTY, LLC, a
                          Delaware limited liability Company


                          By: /s/ Robert D. Falor
                              --------------------------------------------------
                              Robert D. Falor, Authorized Signatory


              FIFTH AMENDMENT TO HOTEL PURCHASE AND SALE AGREEMENT


         This Fifth Amendment to Hotel Purchase and Sale Agreement (the
"Amendment") is made and entered into as of March 11, 2005 by and between Boykin
Chicago L.L.C. ("Seller") and Chicago H&S Property, LLC ("Purchaser").

                                    RECITALS

         A.       Seller and Purchaser are parties to that certain Hotel
Purchase and Sale Agreement dated as of November 5, 2004 as amended by First
Amendment to Hotel Purchase and Sale Agreement dated as of December 20, 2004,
Second Amendment to Hotel Purchase and Sale Agreement dated as of December 27,
2004, Third Amendment dated February 1, 2005 and Fourth Amendment dated March 1,
2005 (as amended, the "Purchase Agreement") concerning the hotel and related
facilities known as the Hotel 71 located at 71 East Wacker Drive, Chicago, IL.

         B.       Seller and Purchaser desire to enter into this Amendment for
the purposes of amending certain terms and provisions of the Purchase Agreement.

                                    AGREEMENT

         NOW THEREFORE, in consideration of the mutual promises and covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Seller and Purchaser agree as
follows:

         1.       Defined Terms. All capitalized terms used herein and not
otherwise defined shall have the meaning set forth in the Purchase Agreement.

         2.       Closing Date. The Closing Date is hereby extended to noon
Eastern Standard Time on Wednesday, March 23, 2005.


         3.       Purchase Price. The Purchase Price is hereby increased by Five
Hundred Thousand Dollars ($500,000) to Ninety-Five Million Fifty Thousand
Dollars ($95,050,000).

         4.       Additional Payment. On or before 5:00 pm on Monday, March 14,
2005, Purchaser shall wire to Seller pursuant to the wire instructions attached
hereto as Exhibit A (the "Wire Instructions") an additional amount of Three
Hundred Thousand Dollars ($300,000) (the "Fifth Extension Fee"). The Fifth
Extension Fee has been fully earned by Seller and is completely non-refundable,
but shall be applied to the Purchase Price at Closing. In the event that
Purchaser fails to wire to Seller the Fifth Extension Fee within the time frame
set forth herein, Seller shall have the right to terminate the Purchase
Agreement and shall have a claim against Purchaser for the amount of the
unfunded Fifth Extension Fee.

         5.       Collective Bargaining Assignment. Purchaser agrees not to, and
to cause its management agent not to, attempt to negotiate any provisions of the
Collective Bargaining



Agreements hereafter up to and through the date of closing and to execute or
cause such management agent to execute the assignment attached as Exhibit B.

         6.       Remedies.


                  (a)      Notwithstanding anything contrary contained in the
         Purchase Agreement, Purchaser hereby waives any and all claims against
         Seller under the Purchase Agreement and acknowledges that its sole
         remedy in the event Seller fails to perform its obligations under, or
         otherwise breaches, the Agreement shall be to obtain a court order for
         specific performance compelling Seller to convey the Property to
         Purchaser in accordance with the terms of the Purchase Agreement .
         Except for Purchaser's right to initiate such process to obtain a court
         order for a specific performance, Purchaser, on behalf of itself, its
         agents and successors and assigns, covenants not to sue Seller with
         respect to any matter relating to the Property, the Purchase Agreement
         or the transaction described therein and releases Seller and its
         members, officers, directors and agents from any liability with respect
         thereto.

                  (b)      Notwithstanding anything to the contrary contained in
         the Purchase Agreement, in addition to all remedies which Seller may
         have against Purchaser pursuant to the Purchase Agreement, Purchaser
         agrees that in the event that Purchaser fails to perform its obligation
         to close the transaction contemplated by the Purchase Agreement on the
         Closing Date, Purchaser shall pay Seller additional liquidated damages
         in the amount of $3,000,000. Seller and Purchaser agree that the
         Seller's damages resulting from Purchaser's default are difficult to
         determine, and the amount of the additional liquidated damages, in
         addition to Seller's remedies pursuant to Section 13.01 of the Purchase
         Agreement, is a fair estimate of those damages. Robert Falor and Guy
         Mitchell (collectively "Guarantor") jointly and severally agree to
         guarantee the obligation of the Purchaser to pay the liquidated damages
         set forth in this Section 6(b). Such guarantee is unconditional and
         Robert Falor and Guy Mitchell waive any and all defenses to such claim
         and acknowledge that Seller shall have no obligation to pursue action
         against any other party, including Purchaser, prior to enforcing its
         rights against Guarantor. Guarantor agrees that their obligation under
         this Section 6(b) shall be governed by the laws of the Commonwealth of
         Massachusetts and any litigation in connection therewith shall be
         conducted in the Commonwealth of Massachusetts and each of Robert Falor
         and Guy Mitchell submit to jurisdiction and consent to venue in such
         courts and waive any defense based on forum non conveniens.

         7.       Acceleration of Closing Date: Release of Guaranty.

                  (a)      Purchaser shall have the right to accelerate the
         Closing Date to Friday, March 18, 2005 by providing Seller with written
         notice thereof on or before 12:00 noon eastern standard time on
         Tuesday, March 15. Such acceleration shall only be effective in the
         event that Purchaser wires to Seller an additional $1,000,000 pursuant
         to the Wiring Instructions on or before 5:00 p.m. eastern standard time
         on Tuesday, March 15, 2005. Upon receipt, such $1,000,000 will have
         been fully earned by Seller and is completely non-refundable, but shall
         be applied to the Purchase Price at Closing. In the event that
         Purchaser validly exercise its right to accelerate the Closing Date and
         delivers the $1,000,000 in accordance with the provisions set forth in
         this Paragraph 7, (i) the provisions of Section 6(b) of this Amendment
         shall be of no further force and effect (e.g. Seller shall not be
         entitled to the additional $3,000,000 as liquidated damages in the
         event Purchaser defaults and Robert Falor and Guy Mitchell shall be
         released from any liability with respect to the guaranty and (ii) the
         Purchase Price shall be reduced by $200,000.00.

                  (b)      In the event that Purchaser wires to Seller an
         additional $1,000,000 pursuant to the Wiring Instructions on or before
         5:00 p.m. eastern standard time on Tuesday, March 15, 2005, but does
         not accelerate the Closing Date as provided in subsection (a) above,
         the provisions of Section 6(b) of this Amendment shall be of no further
         force and effect (e.g. Seller shall not be entitled to the additional
         $3,000,000 as liquidated damages in the event Purchaser defaults and
         Robert Falor and Guy Mitchell shall be released from any liability with
         respect to the guaranty). There shall be no reduction in the Purchase
         Price if the Closing Date is not accelerated. Upon receipt, such
         $1,000,000 will have been fully earned by Seller and is completely
         non-refundable, but shall be applied to the Purchase Price at Closing.




                                       2


         8.       Miscellaneous. A telecopied facsimile of a duly executed
counterpart of this Amendment shall be sufficient to evidence the binding
agreement of each party to the terms hereof. Except as amended hereby, all terms
and conditions of the Purchase Agreement are, and remain in full force and
effect. In the event of a conflict between the terms of the Purchase Agreement
and the terms of this Amendment, the terms of this Amendment shall control.

         IN WITNESS WHEREOF, the parties have executed this Amendment effective
as of the date set forth above.

                                SELLER:

                                BOYKIN CHICAGO L.L.C., a Delaware
                                limited liability company

                                By: Boykin/AEW LLC, its manager

                                     By: Boykin Hotel Properties, L.P.,
                                          its operating member

                                          By: Boykin Lodging Company,
                                               its general partner

                                               By:/s/ Richard C. Conti
                                                  ------------------------------
                                                   Name: Richard C. Conti
                                                   Title: President and Chief
                                                   Operating Officer


                                PURCHASER:

                                CHICAGO H&S HOTEL PROPERTY, LLC

                                By: /s/ Robert Falor
                                    ----------------------------
                                Name: Robert Falor
                                Title: Authorized Signer


By executing below, subject to Section 7 of this Amendment, the undersigned
jointly and severally agree to guaranty Purchaser's obligations under Section
6(b) of this Amendment to pay Seller an additional $3,000,000 in the event
Purchaser fails to close the transaction contemplated by the Purchase Agreement
on the Closing Date.


                                       3



/s/ Robert Falor
- ----------------------------
Robert Falor

/s/ Guy Mitchell
- ----------------------------
Guy Mitchell


                                       4

EX-10.23

                                                                   EXHIBIT 10.23


                             AEW Partners III, L.P.
                         c/o AEW Capital Management L.P.
                             World Trade Center East
                                Two Seaport Lane
                        Boston, Massachusetts 02210-2021

                                                              December 31, 2004

Boykin Lodging Company
Guild Hall Building
45 West Prospect Avenue
Suite 1500
Cleveland, OH 44115
Attention: Robert W. Boykin, Chief Executive Officer

Dear Bob:

         Reference is hereby made to that Stock Purchase Option Agreement by and
among Boykin Lodging Company, Boykin Hotel Properties, L.P. and AEW Partners
III, L.P. dated as of February 1, 1999 (the "Option Agreement"). Capitalized
terms used in this letter and not otherwise defined shall have the meaning set
forth in the Option Agreement.

         Purchaser hereby waives any right it may have to exercise the Exchange
Option and acknowledges that notwithstanding anything in the contrary contained
in the Option Agreement, Purchaser has no right, now or in the future, to
exercise the Exchange Option.

         Please feel free to call with any questions.

                                        Sincerely,

                                        AEW Partners III, L.P.

                                        By: AEW III, L.L.C.,
                                        its general partner

                                        By: AEW Partners III, Inc.:
                                        its managing member

                                        By: /s/  Marc L. Davidson
                                            -----------------------
                                            Name: Marc L. Davidson
                                            Title: Vice President

EX-10.24

                                                                   EXHIBIT 10.24

                     FIRST AMENDMENT TO EMPLOYMENT AGREEMENT

         This First Amendment to Employment Agreement, dated as of November 29,
2004 (this "AMENDMENT"), amends the Employment Agreement (the "Agreement"),
dated as of November 4, 1996, between Robert W. Boykin ("RWB") and Boykin
Lodging Company ("BLC").

         WHEREAS, Section 4(a) of the Agreement provides that BLC will arrange
for certain split dollar life insurance on behalf of RWB;

         WHEREAS, BLC has procured two split dollar life insurance policies in
the name of RWB;

         WHEREAS, the Sarbanes-Oxley Act, enacted in July of 2002, prohibited
the company from making loans to its executive officers;

         WHEREAS, a split dollar life insurance policy procured for an executive
by his employer may be considered to be a loan;

         WHEREAS, RWB and BLC have agreed to amend the Agreement to provide RWB
with compensation and benefits in lieu of the original split dollar insurance
features of the Agreement;

         NOW THEREFORE, RWB and BLC agree as follows:

         1. Amendment to Section 4(a) of the Agreement. BLC shall no longer be
obligated, pursuant to Section 4(a) of the Agreement, to arrange for the life
insurance benefits described therein and on Exhibit B to the Agreement. RWB will
cause the holder of the Metropolitan Life Insurance Co. Policy (the "ML Policy")
to surrender the policy and BLC shall be entitled to the cash surrender value
with respect thereto. RWB will cause the Guardian Insurance Company Policy (the
"Guardian Policy") to be transferred to BLC or its designee and BLC shall
maintain and pay the premiums for such cash value policy(s) or like policy(s)
for RWB with a minimum death benefit in the amount of $4,000,000 (the
"Replacement Policy(s)"). Following transfer to BLC, BLC will repay the
outstanding loans against the Guardian Policy. RWB shall have the right to
require BLC to surrender or cancel the Replacement Policy(s) at any time. BLC
shall have the right to surrender or cancel the Replacement Policy(s) at any
time following RWB's cessation of his employment with the Company. In the event
the Replacement Policy(s) is surrendered or canceled, RWB will be entitled to
receive the excess of the surrender value of the Replacement Policy(s) less
premiums paid by BLC with respect to the Replacement Policy(s) and BLC shall
have no future obligation to fund premiums for any insurance policy.




         2. BLC Agreements. In consideration of RWB's agreement to cause the
transfer of the cash surrender value of the ML Policy to BLC, to modify the
terms relating to the Guardian Policy and the other agreements made hereunder,
BLC agrees to (i) make a one-time payment to RWB in the amount of $416,000 and
(ii) increase RWB's annual base salary, effective as of January 1, 2005, by
$40,000.

         3. Entire Agreement. This Amendment shall be valid upon signature by
both of the parties hereto and, when combined with the Agreement, including
Exhibits thereto, shall constitute the entire Agreement, and fully supersedes
all prior agreements and understandings between the parties pertaining to such
subject matter.

         4. Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of Ohio.

         5. Counterparts; Effectiveness. This Amendment may be signed in any
number of counterparts, each of which shall be an original with the same effect
as if the signatures thereto and hereto are upon the same instrument, and shall
be effective as of the date first above written.

                  IN WITNESS WHEREOF, this Amendment has been duly executed as
of the date first above written.

Robert W. Boykin                          Boykin Lodging Company

                                          By:      Richard C. Conti
                                          Its:     President


/s/ Robert W. Boykin                      /s/ Richard C. Conti
- ---------------------------------         ----------------------------------

EX-12

                                                                      EXHIBIT 12

                             BOYKIN LODGING COMPANY
                              COMPUTATION OF RATIOS
           OF EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
                (AMOUNTS IN THOUSANDS, EXCEPT FOR RATIO AMOUNTS)



                                                                                     YEAR ENDED DECEMBER 31,
                                                                ----------------------------------------------------------------
                                                                  2004          2003          2002          2001          2000
                                                                --------      --------      --------      --------      --------
                                                                                                         
Computation of earnings:
    Income (loss) before gain (loss) on sale/disposal of
       assets, discontinued operations and cumulative
       effect of change in accounting principle                 $ (5,851)     $ (2,850)     $ (2,256)     $(25,161)     $  4,778
    Plus: Equity in (income) loss of unconsolidated joint
       ventures                                                      814           870         2,040          (589)          (68)
    Plus: Minority interest                                       (1,738)       (1,813)         (847)       (2,291)          220
                                                                --------      --------      --------      --------      --------
     Pretax income from continuing operations before
       adjustment for minority interest in consolidated
       subsidiaries or income or loss from equity                 (6,775)       (3,793)       (1,063)      (28,041)        4,930
       investees:
     Plus: Fixed charges                                          15,744        17,820        20,837        21,138        23,942
     Plus: Amortization of capitalized interest                       29           706            --            --            --
     Plus: Distributed income of equity investees                  1,698           572           148         1,380           405
     Less: Capitalized interest                                     (213)         (448)          (74)           --            --
     Less: Minority interest in pre-tax income of
       subsidiaries that have not incurred fixed charges            (141)         (133)         (133)         (151)         (146)
                                                                --------      --------      --------      --------      --------
Earnings and fixed charges:                                     $ 10,342      $ 14,724      $ 19,715      $ (5,674)     $ 29,131
                                                                ========      ========      ========      ========      ========

Computation of fixed charges:
     Consolidated interest expense and capitalized interest     $ 13,842      $ 15,371      $ 18,142      $ 19,639      $ 22,380
     Consolidated amortization of deferred financing costs         1,367         1,906         2,105         1,129         1,146
     Plus: estimated interest element of rentals on
        consolidated entities                                        535           543           590           370           416
                                                                --------      --------      --------      --------      --------
Fixed charges:                                                  $ 15,744      $ 17,820      $ 20,837      $ 21,138      $ 23,942
                                                                --------      --------      --------      --------      --------
     Plus: preferred dividend                                      4,751         4,751         1,109            --            --
                                                                --------      --------      --------      --------      --------
Fixed charges and preferred stock dividends:                    $ 20,495      $ 22,571      $ 21,946      $ 21,138      $ 23,942
                                                                ========      ========      ========      ========      ========

Ratio of earnings to fixed charges                                   0.7           0.8           0.9          (0.3)          1.2

Ratio of earnings to fixed charges and preferred stock
  dividends                                                          0.5           0.7           0.9          (0.3)          1.2

Deficiency of earnings to fixed charges                         $  5,402      $  3,096      $  1,122      $ 26,812           $--
Deficiency of earnings to fixed charges and preferred stock
  dividends                                                     $ 10,153      $  7,847      $  2,231      $ 26,812           $--

EX-21

                                                                      EXHIBIT 21

                             BOYKIN LODGING COMPANY
             SUBSIDIARIES OF THE REGISTRANT AS OF DECEMBER 31, 2004


NAME                                        STATE       OWNERSHIP PERCENT
- ----                                        -----       -----------------

Boykin Hotel Properties, L.P. ("BHPLP")     Ohio        85%

West Doughboy LLC                           Delaware    100% (by BHPLP)

Red Lion Inns Operating, L.P.               Delaware    99% (by BHPLP)

Red Lion Inns Operating, L.P.               Delaware    1% (by West
                                                        Doughboy LLC)

BoyStar Ventures, L.P.                      Ohio        91% (by BHPLP)

Boykin Hunt Valley, L.L.C.                  Delaware    100% (by BHPLP)

Shawan Road Hotel Limited Partnership       Maryland    91% (by Boykin Hunt
                                                        Valley, L.L.C.)

Hunt Valley Leasing, Inc.                   Delaware    100% (by Shawan Road
                                                        Hotel Limited
                                                        Partnership)

RadBoy Mt. Laurel, L.L.C.                   Ohio        100% (by BHPLP)

Boykin Kansas City, L.L.C.                  Ohio        100% (by BHPLP)

Boykin/AEW LLC ("BOYAEW")                   Delaware    25% (by BHPLP)

Boykin Chicago, L.L.C. ("Boykin Chicago")   Ohio        75% (by BOYAEW)

Boykin Chicago, L.L.C.                      Ohio        25% (by BHPLP)

71 E. Wacker Leasing, Inc.                  Delaware    100% (by Boykin Chicago)

Boykin San Antonio L.L.C.                   Delaware    100% (by BHPLP)

Boykin Southfield L.L.C.                    Delaware    100% (by BHPLP)

Boykin Marco LLC                            Delaware    100% (by BHPLP)

Boykin Washington I LLC                     Delaware    100% (by BHPLP)

Boykin Holding, LLC ("Boykin Holding")      Delaware    100% (by BHPLP)

Boykin Berkeley, LLC                        Delaware    100% (by Boykin Holding)




NAME                                      STATE       OWNERSHIP PERCENT
- ----                                      -----       -----------------

Boykin Buffalo, LLC                       Delaware    100% (by Boykin Holding)

Boykin Cleveland, LLC                     Delaware    100% (by Boykin Holding)

Boykin Crabtree, LLC                      Delaware    100% (by Boykin Holding)

Boykin Fort Myers, LLC                    Delaware    100% (by Boykin Holding)

Boykin San Diego, L.L.C.                  Ohio        91% (by Boykin Holding)

BoyCon Manager LLC                        Delaware    100% (by BHPLP)

BoyCon L.L.C. ("BoyCon")                  Delaware    49% (by BHPLP)
                                                      1% (by BoyCon Manager LLC)

BoyCon Leasing, Inc.                      Ohio        100% (by BoyCon)

BellBoy, Inc. ("BellBoy")                 Delaware    100% (by BHPLP)

White Sands Villas Development, LLC       Delaware    100% (by BellBoy)

BeachBoy, LLC                             Delaware    100% (by BellBoy)

Sanibel View Development, LLC             Delaware    100% (by BellBoy)

Captiva Villas Development LLC            Delaware    100% (by BellBoy)

Minneapolis Leasing LLC                   Delaware    100% (by BellBoy)

Kansas City Leasing LLC                   Delaware    100% (by BellBoy)

Berkeley Leasing  I LLC                   Delaware    100% (by BellBoy)

Buffalo Leasing LLC                       Delaware    100% (by BellBoy)

Cleveland Leasing LLC                     Delaware    100% (by BellBoy)

Crabtree Leasing LLC                      Delaware    100% (by BellBoy)

Fort Myers Leasing LLC                    Delaware    100% (by BellBoy)

Westboy LLC                               Delaware    100% (by BellBoy)

Highpoint Leasing LLC                     Delaware    100% (by BellBoy)

Columbus Leasing LLC                      Delaware    100% (by BellBoy)



NAME                                        STATE       OWNERSHIP PERCENT
- ----                                        -----       -----------------

Melbourne Q Leasing LLC                     Delaware    100% (by BellBoy)

Melbourne H Leasing LLC                     Delaware    100% (by BellBoy)

French Lick Leasing LLC                     Delaware    100% (by BellBoy)

Mt. Laurel Leasing LLC                      Delaware    100% (by BellBoy)

Southfield Leasing LLC                      Delaware    100% (by BellBoy)

Marco Leasing LLC                           Delaware    100% (by BellBoy)

Lodging I.T. LLC                            Delaware    100% (by BellBoy)

Pink Shell Realty LLC                       Delaware    100% (by BellBoy)

Melbourne Beach Suites Development LLC      Delaware    100% (by BellBoy)

EX-23.1

                                                                    EXHIBIT 23.1

            CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


We have issued our reports dated March 1, 2005, accompanying the consolidated
financial statements and schedules included in the Annual Report of Boykin
Lodging Company and subsidiaries and Boykin/AEW, LLC on Form 10-K for the year
ended December 31, 2004. We have also issued our report dated March 1, 2005 on
the effectiveness of Boykin Lodging Company and subsidiaries internal control
over financial reporting. We hereby consent to the incorporation by reference of
said reports in the Registration Statements of Boykin Lodging Company and
subsidiaries on Form S-8 (File No. 333-39259, effective October 31, 1997) on
Form S-3 (File No. 333-39369, effective November 14, 1997).


/s/ GRANT THORNTON LLP

Cleveland, Ohio
March 15, 2005

EX-23.2

                                                                    EXHIBIT 23.2

            CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement No.
333-39369 on Form S-8 of our report dated March 25, 2004 (March 2, 2005 as to
the effects of the discontinued operations in fiscal 2004 described in Note 4),
relating to the financial statements of Boykin Lodging Company and our report
dated March 12, 2004, relating to the financial statements of Boykin/AEW, LLC
and subsidiaries appearing in this Annual Report on Form 10-K of Boykin Lodging
Company for the year ended December 31, 2004.


/s/ Deloitte & Touche LLP

Cleveland, Ohio
March 14, 2005

EX-31.1

                                                                    EXHIBIT 31.1

          CERTIFICATION PURSUANT TO RULE 13A-14(a), IN ACCORDANCE WITH
                 SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002


I, Robert W. Boykin, Chairman of the Board and Chief Executive Officer, certify
that:

     1.   I have reviewed this annual report on Form 10-K of Boykin Lodging
          Company;

     2.   Based on my knowledge, this report does not contain any untrue
          statement of a material fact or omit to state a material fact
          necessary to make the statements made, in light of the circumstances
          under which such statements were made, not misleading with respect to
          the period covered by this report;

     3.   Based on my knowledge, the financial statements, and other financial
          information included in this report, fairly present in all material
          respects the financial condition, results of operations and cash flows
          of the registrant as of, and for, the periods presented in this
          report;

     4.   The registrant's other certifying officers and I are responsible for
          establishing and maintaining disclosure controls and procedures (as
          defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
          control over financial reporting (as defined in Exchange Act Rules
          13a-15(f) and 15d-15(f)) for the registrant and have:

          a.   Designed such disclosure controls and procedures, or caused such
               disclosure controls and procedures to be designed under our
               supervision, to ensure that material information relating to the
               registrant, including its consolidated subsidiaries, is made
               known to us by others within those entities, particularly during
               the period in which this report is being prepared;

          b.   Designed such internal control over financial reporting, or
               caused such internal control over financial reporting to be
               designed under our supervision, to provide reasonable assurance
               regarding the reliability of financial reporting and the
               preparation of financial statements for external purposes in
               accordance with generally accepted accounting principles;

          c.   Evaluated the effectiveness of the registrant's disclosure
               controls and procedures and presented in this report our
               conclusions about the effectiveness of the disclosure controls
               and procedures, as of the end of the period covered by this
               report based on such evaluation; and

          d.   Disclosed in this report any change in the registrant's internal
               control over financial reporting that occurred during the
               registrant's most recent fiscal quarter (the registrant's fourth
               fiscal quarter in the case of an annual report) that has
               materially affected, or is reasonably likely to materially
               affect, the registrant's internal control over financial
               reporting; and

     5.   The registrant's other certifying officers and I have disclosed, based
          on our most recent evaluation of internal control over financial
          reporting, to the registrant's auditors and the audit committee of
          registrant's board of directors (or persons performing the equivalent
          function):

          a.   All significant deficiencies and material weaknesses in the
               design or operation of internal control over financial reporting
               which are reasonably likely to adversely affect the registrant's
               ability to record, process, summarize and report financial
               information; and

          b.   Any fraud, whether or not material, that involves management or
               other employees who have a significant role in the registrant's
               internal control over financial reporting.

Date: March 15, 2005

                                        By:  /s/ Robert W. Boykin
                                             -----------------------------------
                                             Robert W. Boykin
                                             Chairman of the Board
                                             and Chief Executive Officer

EX-31.2

                                                                    EXHIBIT 31.2

          CERTIFICATION PURSUANT TO RULE 13A-14(a), IN ACCORDANCE WITH
                 SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002


I, Shereen P. Jones, Executive Vice President, Chief Financial and Investment
Officer, certify that:

     1.   I have reviewed this annual report on Form 10-K of Boykin Lodging
          Company;

     2.   Based on my knowledge, this report does not contain any untrue
          statement of a material fact or omit to state a material fact
          necessary to make the statements made, in light of the circumstances
          under which such statements were made, not misleading with respect to
          the period covered by this report;

     3.   Based on my knowledge, the financial statements, and other financial
          information included in this report, fairly present in all material
          respects the financial condition, results of operations and cash flows
          of the registrant as of, and for, the periods presented in this
          report;

     4.   The registrant's other certifying officers and I are responsible for
          establishing and maintaining disclosure controls and procedures (as
          defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
          control over financial reporting (as defined in Exchange Act Rules
          13a-15(f) and 15d-15(f)) for the registrant and have:

          a.   Designed such disclosure controls and procedures, or caused such
               disclosure controls and procedures to be designed under our
               supervision, to ensure that material information relating to the
               registrant, including its consolidated subsidiaries, is made
               known to us by others within those entities, particularly during
               the period in which this report is being prepared;

          b.   Designed such internal control over financial reporting, or
               caused such internal control over financial reporting to be
               designed under our supervision, to provide reasonable assurance
               regarding the reliability of financial reporting and the
               preparation of financial statements for external purposes in
               accordance with generally accepted accounting principles;

          c.   Evaluated the effectiveness of the registrant's disclosure
               controls and procedures and presented in this report our
               conclusions about the effectiveness of the disclosure controls
               and procedures, as of the end of the period covered by this
               report based on such evaluation; and

          d.   Disclosed in this report any change in the registrant's internal
               control over financial reporting that occurred during the
               registrant's most recent fiscal quarter (the registrant's fourth
               fiscal quarter in the case of an annual report) that has
               materially affected, or is reasonably likely to materially
               affect, the registrant's internal control over financial
               reporting; and

     5.   The registrant's other certifying officers and I have disclosed, based
          on our most recent evaluation of internal control over financial
          reporting, to the registrant's auditors and the audit committee of
          registrant's board of directors (or persons performing the equivalent
          function):

          a.   All significant deficiencies and material weaknesses in the
               design or operation of internal control over financial reporting
               which are reasonably likely to adversely affect the registrant's
               ability to record, process, summarize and report financial
               information; and

          b.   Any fraud, whether or not material, that involves management or
               other employees who have a significant role in the registrant's
               internal control over financial reporting.

Date: March 15, 2005

                                     By:  /s/ Shereen P. Jones
                                          --------------------------------------
                                          Shereen P. Jones
                                          Executive Vice President,
                                          Chief Financial and Investment Officer

EX-32.1

                                                                    EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Boykin Lodging Company (the "Company")
on Form 10-K for the year ended December 31, 2004 as filed with the Securities
and Exchange Commission on the date hereof (the "Report"), I, Robert W. Boykin,
Chairman of the Board and Chief Executive Officer of the Company, certify,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:

     (1) The Report fully complies with the requirements of section 13(a) or
     15(d) of the Securities Exchange Act of 1934; and

     (2) The information contained in the Report fairly presents, in all
     material respects, the financial condition and results of operations of the
     Company.


/s/ Robert W. Boykin
- --------------------------------
Robert W. Boykin
Chairman of the Board and Chief Executive Officer
March 15, 2005

EX-32.2

                                                                    EXHIBIT 32.2

    CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Boykin Lodging Company (the "Company")
on Form 10-K for the year ended December 31, 2004 as filed with the Securities
and Exchange Commission on the date hereof (the "Report"), I, Shereen P. Jones,
Executive Vice President, Chief Financial and Investment Officer of the Company,
certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that:

     (1) The Report fully complies with the requirements of section 13(a) or
     15(d) of the Securities Exchange Act of 1934; and

     (2) The information contained in the Report fairly presents, in all
     material respects, the financial condition and results of operations of the
     Company.


/s/ Shereen P. Jones
- --------------------------------
Shereen P. Jones
Executive Vice President, Chief Financial and Investment Officer
March 15, 2005