Exhibit 10.21

AGREEMENT OF PURCHASE AND SALE

OF

REAL PROPERTY COMMONLY KNOWN AS

HOMEWOOD SUITES SEATTLE

SEATTLE, WASHINGTON

and

Joint Escrow Instructions

among

AEW SBCO SEATTLE, LLC, a Delaware limited liability company

(“Seller”),

and

CHSP Seattle LLC, a Delaware limited liability company

(“Buyer”).

Effective Date: November 2, 2010

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Table of Contents

 

1.    DEFINITIONS.      1    2.    COVENANT OF PURCHASE AND SALE      10    3.
   PURCHASE PRICE AND DEPOSIT.      10    4.    TITLE AND DUE DILIGENCE
CONDITIONS.      10    5.    REPRESENTATIONS.      12    6.    OPERATION OF THE
HOTEL PENDING CLOSING      17    7.    OTHER AGREEMENTS.      18    8.   
PRORATIONS, CREDITS AND OTHER ADJUSTMENTS      21    9.    CONDITIONS TO
CLOSING.      24    10.    CLOSING.      25    11.    POST CLOSING ADJUSTMENTS.
     30    12.    THIRD PARTY CLAIMS AND OBLIGATIONS.      30    13.    HOTEL
RECORDS      32    14.    ASSIGNMENT      32    15.    NOTICES      32    16.   
GENERAL PROVISIONS.      33    17.    EXHIBITS      35    18.    SIGNERS’
WARRANTY      36    19.    LIMITATION ON SELLER’S LIABILITY.      36    20.   
LIQUIDATED DAMAGES AND LIMITATIONS OF REMEDIES FOR BUYER’S BREACH      37   

 

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EXHIBITS:

 

A    Legal Description of Hotel Parcel    B    Form of Deed    C    Form of Bill
of Sale    D    Allocation of Purchase Price    E    Form of Assignment and
Assumption of Assumed Contracts    E-1 F    Form of General Assignment and
Assumption    F-1 G    Form of FIRPTA Certificate    H    Exceptions to Seller
Representations    I    Intentionally Omitted.    J    Schedule of Contracts   
K    Schedule of Environmental Report and Existing Survey    L    Schedule of
Existing Loan Documents    M    List of Insurance Policies   

 

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AGREEMENT FOR PURCHASE AND SALE

OF REAL PROPERTY

AND

JOINT ESCROW INSTRUCTIONS

THIS AGREEMENT OF PURCHASE AND SALE OF REAL PROPERTY AND JOINT ESCROW
INSTRUCTIONS (“this Agreement”) is made as of November 2, 2010 (the “Effective
Date”) among AEW SBCO SEATTLE, LLC, a Delaware limited liability company
(“Seller”),

and

CHSP Seattle LLC, a subsidiary of Chesapeake Lodging, L.P., a Delaware limited
liability company (“Buyer”).

IN CONSIDERATION OF the mutual covenants and conditions contained herein,
parties hereto (together, the “Parties” and each, sometimes, a “Party”) do
hereby agree and covenant with each other as follows:

1. DEFINITIONS.

1.1 Affiliate. “Affiliate” means, with respect to an indicated person, any other
person which controls, is controlled by or is under common control with such
indicated person. For the purposes of this definition, the term “control” means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of the person in question, whether by
the ownership of voting securities, contract or otherwise.

1.2 Approval Date. “Approval Date” means November 5, 2010.

1.3 Assumed Contracts. “Assumed Contracts” means the Equipment Leases and
Service Contracts identified on the Schedule of Contracts attached hereto as
Exhibit J.

1.4 Bill of Sale. “Bill of Sale” means a bill of sale in the form attached
hereto as Exhibit C, together conveying the FF&E and Inventory to Buyer or
Buyer’s nominee(s).

1.5 Broker. “Broker” means Eastdil Secured.

1.6 Business Day. “Business Day” means a day other than Saturday, Sunday or
other day when commercial banks in Washington are authorized or required by Law
to close.

1.7 Cash Bank. “Cash Bank” means, with respect to the Hotel, cash on hand in
house banks and petty cash as of Closing.

1.8 Casualty. “Casualty” means damage, destruction or loss of the Hotel Premises
or any portion thereof by a casualty event or a taking under power of eminent
domain.

 

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1.9 Claim. “Claim” means any claim, demand, liability, legal action or
proceeding, investigation, fine or other penalty, and loss, cost or expense
related thereto but expressly (including, without limitation, attorneys’ fees
and disbursements actually and reasonably incurred) excluding any consequential
and punitive damages.

1.10 Closing. “Closing” means the concurrent delivery, in accordance with this
Agreement, (A) by Seller to Buyer of the Transfer Instruments and (B) by Buyer
to Seller of the Purchase Price.

1.11 Closing Date. “Closing Date” means December 1, 2010, as the same may be
extended as specified in Section 7.3.

1.12 Closing Documents. “Closing Documents” means the Transfer Instruments, the
FIRPTA Certificate, and all the other documents to be delivered hereunder at, or
for purposes of effecting, Closing.

1.13 Continuing Employees. “Continuing Employees” means all of the Hotel
Employees who are employed by Buyer or Buyer’s Hotel manager or operator upon
Closing.

1.14 Contract Assignment. “Contract Assignment” means an assignment and
assumption of Assumed Contracts substantively in the form attached hereto as
Exhibit E.

1.15 Counsel. “Counsel” means each Party’s respective legal counsel for the
transaction contemplated by this Agreement: with respect to Seller, the law firm
of Seyfarth Shaw LLP; and, with respect to Buyer, Tracy M.J. Colden, Esq.

1.16 Day. The term “day” means a calendar day.

1.17 Deed. “Deed” means a special warranty deed in the form attached hereto as
Exhibit B, conveying the Hotel Premises to Buyer subject only to Permitted
Exceptions.

1.18 Deposit. “Deposit” has the meaning specified in Section 3.3.1.

1.19 Disputed Payable. “Disputed Payable” means any amount that a third party
claims to be due or accrued as of Closing with respect to the operation of the
Hotel, but that Seller or Hotel Manager disputes (including the disputed portion
of any bill, invoice or claim that Seller or Hotel Manager otherwise
acknowledges to be due and payable).

1.20 Effective Date. “Effective Date” means the date specified in the initial
paragraph of this Agreement.

1.21 Eligible Employees. “Eligible Employees” means a sufficient number of Hotel
Employees offered employment by Buyer or Buyer’s hotel manager effective as of
the Closing Date as is necessary to prevent Seller or Hotel Manager from
violating the WARN Act with respect to the Hotel Employees.

1.22 Employee Leave. “Employee Leave” means vacation, sick leave and any other
paid leave accrued or accruing with respect to Hotel Employees.

 

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1.23 Employee Liabilities. “Employee Liabilities” means all obligations and
liabilities, actual or contingent with respect to Hotel Employees, whether
accruing before or after Closing, including, without limitation, any and all
obligations or liabilities: for (A) wages, salaries, Employee Leave, fringe
benefits, and payroll taxes; (B) employer contributions and other required
employer payments to Hotel Employee Plans, (C) worker’s compensation claims
based on any real or alleged occurrence prior to Closing; and (D) claims or
penalties under applicable Laws governing employer/employee relations (including
the National Labor Relations Act and other labor relations laws, fair employment
standards Laws, fair employment practices and anti-discrimination Laws, the
Worker Adjustment and Retraining Notification Act of 1988, ERISA, the
Multi-Employer Pension Plan Amendments Act, and the Consolidated Omnibus Budget
Reconciliation Act of 1985).

1.24 Environmental Report. “Environmental Report” means the “Phase 1” site
assessment report(s) and any other reports regarding the environmental condition
of the Hotel Premises that are identified on Exhibit K.

1.25 Equipment Lease. “Equipment Lease” means a personal property lease covering
any item(s) of FF&E that are identified as such in the schedule attached hereto
as Exhibit J.

1.26 ERISA. “ERISA” means the Employee Retirement Income Security Act of 1974,
as amended.

1.27 Escrow. “Escrow” means the escrow established pursuant to this Agreement
for purposes of holding the Deposit and, pending Closing, the balance of the
Purchase Price and the Transfer Instruments to be recorded at Closing.

1.28 Escrow Agent. “Escrow Agent” means Terrance Miklas of Stewart Title
Guaranty Company, acting through its office at 99 Summer Street, Boston,
Massachusetts, whenever acting in the capacity of an escrow holder pursuant
hereto.

1.29 Existing Guarantor. “Existing Guarantor” means AEW Partners V, L.P.

1.30 Existing Guaranty. “Existing Guaranty” means the guaranty or guaranties
executed by Existing Guarantor in connection with the Existing Loan.

1.31 Existing Lender. “Existing Lender” means Wells Fargo Bank, N.A., as trustee
for the registered Holders of Credit Suisse First Boston Mortgage Securities
Corp., Commercial Mortgage Pass-Through Certificates, Series 2007-C1, successor
to Capmark Bank.

1.32 Existing Loan. “Existing Loan” means the loan evidenced by that certain
Deed of Trust Note, made as of June 12, 2006, by Seller to Existing Lender in
the original principal amount of $28,400,000 secured by that certain Deed of
Trust, Assignment of Leases and Profits, Security Agreement and Fixture Filing
dated as of June 12, 2006, and recorded under King County Auditor No.
20060612001764 on June 12, 2006 and the other Existing Loan Documents.

 

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1.33 Existing Loan Assumption Consent. “Existing Loan Assumption Consent” means
the Existing Lender’s consent to the assumption of the Existing Loan by Buyer or
its Affiliate, the full, final, and unconditional release of Seller, Existing
Guarantor, and any other guarantors from all obligations under the Existing Loan
and the assumption agreement and/or other documents evidencing or effecting such
assumption upon such terms and conditions as are mutually acceptable to Seller
and Buyer.

1.34 Existing Loan Documents. “Existing Loan Documents” means the documents and
instruments identified in the Schedule of Existing Loan Documents listed on
Exhibit L attached hereto.

1.35 Existing Survey. “Existing Survey” means the ALTA/ACSM Survey of the Hotel
Parcel identified on Exhibit K.

1.36 Extended Coverage. “Extended Coverage” means the deletion from the Title
Policy of general exceptions for survey matters, unrecorded easements,
mechanics’ liens, unrecorded liens for taxes and assessments and rights of
parties in possession (to the extent such deletions are customarily offered by
the Title Company in the jurisdiction where the Hotel is located) and any
special endorsements required by Buyer.

1.37 FF&E. “FF&E” means machinery, equipment, appliances, furniture, fittings,
removable fixtures, tools and other articles of durable personal property of
every kind and nature, including spare parts and reserve stock, which are owned
or leased by or for the account of Seller and are used or useable in the
operation of the Hotel, including, without limitation and subject to depletion
and replacement in the Ordinary Course: (1) office furniture and equipment,
including without limitation any Leased Equipment, (2) room furnishings, (3) art
work and other decorative items, (4) televisions, radios, VCRs and other
consumer electronic equipment, (5) telecommunications equipment, (6) computer
equipment and software, (7) blankets, pillows, linens, towels and other bed
clothing, (8) china, crystal, dishware, glassware, silverware, flatware and
other “operating inventory” as that term is used in the Uniform System of
Accounts, (9) kitchen appliances, cookware and other cooking utensils,
(10) automobiles, vans, trucks and other vehicles and (11) manuals, schematics,
plans and other written materials pertaining to the use, operation, maintenance
or repair of any item of FF&E; but excluding (a) personal property owned by any
Hotel guest, tenant, concessionaire, licensee or other third party (unless such
person owns such property for the account or benefit of Seller), and
(b) manuals, records and other like materials owned by (and proprietary to) the
Hotel Manager and/or Hilton or its Affiliate, unless prepared or maintained
solely for the Hotel, and (c) computer software licensed to Seller or Hotel
Manager, unless (A) such license is by its terms transferable in connection with
the sale of the Hotel to Buyer and (B) Buyer pays any fee or other charge
imposed by the licensor in connection with such a transfer.

1.38 Final Statement. “Final Statement” has the meaning specified in Section
11.1.

1.39 FIRPTA Certificate. “FIRPTA Certificate” means a certificate with respect
to Seller, substantively in the form attached as Exhibit G, confirming to Buyer
that Seller is not a foreign person or entity for purposes of § 1445 of the
Internal Revenue Code of 1986, as

 

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amended (with such supplemental statements as may be required to exempt the
transactions contemplated hereby from any withholding tax requirements under
applicable state Laws).

1.40 Franchise Agreement. “Franchise Agreement” means that certain Franchise
License Agreement having an effective date of June 12, 2006 by and between
Promus Hotels, Inc., a subsidiary of Hilton Hotels Corporation (“Hilton”), as
Licensor, and Seller, as Licensee.

1.41 General Assignment. “General Assignment” means a general assignment and
assumption agreement substantively in the form attached hereto as Exhibit F.

1.42 Governmental Authority. “Governmental Authority” means any of the United
States Government, the government of any of the United States or any county or
municipality therein, and any executive department, legislative body,
administrative or regulatory agency, court, officer (whether elected, appointed
or otherwise designated) or other authority thereof, whenever purporting to act
in an official capacity.

1.43 Hazardous Substance. “Hazardous Substance” means any substance defined as
“waste”, “hazardous waste”, “hazardous substance”, “hazardous material”, “toxic
substance”, “pollutant”, “contaminant” in, or which are otherwise specifically
subject to regulation under, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act of 1986, 42 U.S.C. § 9601 et seq.; the Toxic Substance
Control Act, 15 U.S.C. § 2601 et seq.; the Hazardous Materials Transportation
Act, 49 U.S.C. § 1802; or the Resource Conservation and Recovery Act, 42 U.S.C.
§ 6901 et seq., or any friable asbestos containing materials (but excluding
non-friable asbestos-containing materials), PCBs or formaldehyde foam
insulation.

1.44 Hotel. “Hotel” means all of the Hotel Premises, FF&E,, the Inventory, the
Assumed Contracts, Cash Banks and Intangibles comprising the “Homewood Suites
Seattle”, located at 1011 Pike Street in Seattle, Washington.

1.45 Hotel Employees. “Hotel Employees” means all persons employed at the Hotel
by Hotel Manager.

1.46 Hotel Employee Plan. “Hotel Employee Plan” means an employee benefit plan
(as defined in ERISA) to which any of Seller, Hotel Manager or an Affiliate of
Seller or Hotel Manager currently makes contributions on account of any Hotel
Employees.

1.47 Hotel Improvements. “Hotel Improvements” means all of the buildings, other
immovable structures and improvements and fixtures on the Hotel Parcel.

1.48 Hotel Manager. “Hotel Manager” means Stonebridge Realty Advisors, Inc.

1.49 Hotel Management Agreement. “Hotel Management Agreement” means that certain
management agreement dated June 9, 2006 between Seller and Hotel Manager.

 

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1.50 Hotel Parcel. “Hotel Parcel” means (A) those certain parcels described in
Exhibit A hereto, together with (B) all appurtenant rights , including, without
limitation: (i) easements and rights-of-way, (ii) licenses and other privileges,
(iii) rights in and to land underlying adjacent highways, streets and other
public rights-of-way and rights of access thereto, (iv) rights in and to strips
and gores of land within or adjoining any such parcel, (v) air rights, excess
floor area rights and other transferable development rights belonging to or
useable with respect to any such parcel, (vi) rights to utility connections and
hook-ups, (vii) water rights, (viii) riparian rights, and (ix) any other rights
which any of Seller may have in or with respect to land adjoining any such
parcel (including land which is separated from any such parcel only by public
highway, street or other right-of-way).

1.51 Hotel Party. “Hotel Party” means, with respect to a Service Contract or
Equipment Lease, the owner and/or manager of the Hotel (as applicable) obligated
as vendee or lessee under such contract or lease.

1.52 Hotel Payable. “Hotel Payable” means any account payable outstanding as of
Closing for the Hotel, other than Disputed Payables.

1.53 Hotel Premises. “Hotel Premises” means the Hotel Parcel and the Hotel
Improvements.

1.54 Hotel Records. “Hotel Records” means all of the books, records,
correspondence and other files, both paper and electronic (and including any
accounting, database or other record-keeping software used in connection with
such books and records which Seller owns or otherwise has the right freely to
transfer) which have been received or generated and maintained in the course of
operation of the Hotel and which are in Seller’s possession or control,
excluding records, manuals and other like materials owned by (and proprietary
to) the Hotel Manager and/or Hilton or its Affiliate(s) and personnel files of
Hotel Employees.

1.55 Indemnify. “Indemnify” means to hold harmless and indemnify an indemnified
party from and against a Claim and, where applicable, to defend such party by
counsel reasonably satisfactory to it, all at the sole expense and liability of
the indemnifying party.

1.56 Intangibles. “Intangibles” means Seller’s rights, title and interest, if
any, in (A) trade names, trademarks, service marks, logs and other forms of
identification used to identify the Hotel or any of its facilities or
operations, including but not limited to the “vanity website” for the Hotel,
(B) the Hotel Records, (C) plans and specifications for the Hotel Improvements,
(D) the Permits, (E) Repair Warranties, to the extent assignable in connection
with a sale of the Hotel, and (F) studies, analyses, reports and other written
materials pertaining to the condition of the Hotel Premises, all to the extent
assignable in connection with a sale of the Hotel and subject to the Franchise
Agreement.

1.57 Inventory. “Inventory” means (i) all goods held for sale to Hotel guests
and others in the Ordinary Course and (ii) the stock of supplies and other food
and beverage consumables used in the operation and maintenance of the Hotel in
the Ordinary Course but excluding “operating inventory” as that term is used in
the Uniform System of Accounts.

 

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1.58 Laws. “Laws” means any and all:

1.58.1 Statutes, ordinances, rules, regulations, orders, rulings, decrees or
other legal requirements of any Governmental Authority.

1.58.2 Agreements with or covenants or commitments to any Government Authority
which are binding upon Seller or any of the elements of the Hotel (including,
without limitation, any requirements or conditions for the use or enjoyment of
any license, permit, approval, authorization or consent legally required for the
operation of the Hotel).

1.59 Leased Equipment. “Leased Equipment” means any item of FF&E that is leased
rather than owned by Seller.

1.60 Material Contract. “Material Contract” means a Service Contract or
Equipment Lease for which scheduled payments due to the vendor or lessor
thereunder during any 12-month period occurring after Closing will exceed
$12,000 . Material Contracts do not include any contracts (a) that do not impose
any obligation on the Hotel Party to make any payments after Closing, or (b) for
which payment will be due from the Hotel Party only if such party orders or
otherwise requests goods or services under such contract or (c) which obligate
the Hotel Party to make payments solely out of, and as a percentage of, services
performed by the other party for Hotel guests that impose no out-of-pocket cost
on the Hotel Party.

1.61 Objectionable Title Matters. “Objectionable Title Matters” has the meaning
specified in Section 4.2.

1.62 Ordinary Course. “Ordinary Course” means the course of day to day operation
of the Hotel in accordance with its current operating budget and in a manner
which does not materially vary from the policies, practices and procedures in
effect as of the Effective Date.

1.63 Original. “Original” means any of (A) an original counterpart of any
Assumed Contract, (B) the Hotel Records or (C) other documents which comprise or
evidence the Intangibles, to the extent within Seller’s possession or control;
and “the Originals” means all such items.

1.64 Outside Closing Date. “Outside Closing Date” has the meaning specified in
Section 7.3.

1.65 Permit. “Permit” means any permit, certificate, license or other form of
authorization or approval issued by a government agency or authority and legally
required for the proper operation and use of the Hotel (including, without
limitation, any certificates of occupancy with respect to the Hotel
Improvements, elevator permits, conditional use permits, zoning variances and
business licenses, but excluding liquor licenses) to the extent held and
assignable by Seller or otherwise transferable in connection with the sale of
the Hotel.

1.66 Permitted Exceptions. “Permitted Exceptions” means (A) liens for real
property taxes and assessments not yet delinquent, (B) liens or encumbrances
arising out of any

 

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activity of Buyer, (C) the Assumed Contracts, (D) the Existing Loan and Existing
Loan Documents, and (F) any other matter deemed to be a Permitted Exception
pursuant to Section 4.2 or 4.4.

1.67 Place of Closing. “Place of Closing” has the meaning specified in Section
10.1.

1.68 Preliminary Statement. “Preliminary Statement” has the meaning specified in
Section 8.

1.69 Proceeds. “Proceeds” means all insurance proceeds, condemnation awards or
other amounts paid or payable to Seller in connection with any Casualty,
including any amounts recoverable under rent loss or business interruption
insurance to the extent allocable to periods after Closing.

1.70 Purchase Price. “Purchase Price” means the gross purchase price being paid
by Buyer to Seller for the Hotel, as set forth in Section 3.1.

1.71 Repair Warranties. “Repair Warranties” means contractors’, manufacturers’
and vendors’ written guaranties, warranties and other obligations (if any) for
the repair or maintenance of any component of the Hotel Improvements or the
FF&E.

1.72 Replacement Guarantor. “Replacement Guarantor” means a person or entity
acceptable to the Existing Lender.

1.73 Replacement Guaranty. “Replacement Guaranty” means a guaranty executed and
delivered to the Existing Lender by the Replacement Guarantor under which the
Replacement Guarantor shall assume the obligations of the Existing Guarantor
with respect to the extent such obligations arise and accrue after Closing.

1.74 Reservation. “Reservation” means any reservation, commitment or agreement
for the use of guest rooms, conference rooms, or other facilities in the Hotel,
to the extent pertaining to periods from and after Closing.

1.75 Reservation Deposit. “Reservation Deposit” means any deposit or advance
payment received by Seller or the Hotel Manager in connection with a
Reservation.

1.76 Seller’s Knowledge. “Seller’s Knowledge” means the actual present (and not
the constructive) knowledge of James Luchars and Greg Dietl, and does not imply
that said individual (A) has or should have conducted any inspection,
examination or other inquiry to determine the accuracy of any representation,
warranty or other statement made “to Seller’s Knowledge” in this Agreement or in
any other document delivered by Seller prior to or at Closing or (B) has any
personal liability with respect to any such representation, warranty or other
statement.

1.77 Service Contract. “Service Contract” means any of the contracts or other
written arrangements for the continuing provision of services relating to the
improvement,

 

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maintenance, repair, protection or operation of the Hotel, excluding the Hotel
Management Agreement and the Franchise Agreement.

1.78 Survey. “Survey” means a survey of the Hotel Premises, certified by a duly
licensed surveyor as of date no earlier than the Effective Date, meeting the
minimum requirements of the American Land Title Association/American Congress of
Surveying and Mapping.

1.79 Taxes. “Taxes” has the meaning specified in Section 8.1.

1.80 Title Company. “Title Company” means Stewart Title Guaranty Company,
together with any agent through which it may act in issuing the Title Policy.

1.81 Title Documents. “Title Documents” has the meaning specified in
Section 4.1.

1.82 Title Report. “Title Report” means a preliminary title commitment
describing the condition of title to the Hotel Premises, issued by the Title
Company as of a date no earlier than 60 days prior to the Effective Date and
delivered by Seller.

1.83 Title Policy. “Title Policy” means an ALTA (Form 2006 or its local
equivalent) owner’s policy of title insurance for the amount of the Purchase
Price, insuring or committing to insure fee title to the Hotel Premises in
Buyer.

1.84 Transactor. “Transactor” means, with respect to each Party, the person(s)
authorized by such Party to execute and deliver Transfer Instruments and other
Closing Documents on behalf of such Party.

1.85 Transfer Instruments. “Transfer Instruments” means all the instruments by
which Seller will convey the Hotel to Buyer and/or Buyer’s nominees hereunder,
including (without limitation) the Deed, the Bill of Sale, the Contract
Assignment, and the General Assignment.

1.86 Uniform System of Accounts. “Uniform Systems of Accounts” means the most
current edition of the Uniform System of Accounts for the Lodging Industry,
published by the Educational Institute of the American Hotel and Motel
Association.

1.87 Other Definitions. Terms defined in any other part of this Agreement
(including, without limitation, “Seller,” “Buyer,” “Party” and “Parties,” and
“this Agreement,” defined in the initial paragraph hereof) shall have the
defined meanings wherever capitalized herein. As used in this Agreement, (i) the
terms “herein,” “hereof” and “hereunder” refer to this Agreement in its entirety
and are not limited to any specific sections; (ii) the term “person” means any
natural person, other legal entity, or combination of natural persons and/or
other legal entities acting as a unit and (iii) the term “including” shall be
read as “including without limitation.” Wherever appropriate in this Agreement,
the singular shall be deemed to refer to the plural and the plural to the
singular, and pronouns of certain genders shall be deemed to comprehend either
or both of the other genders.

 

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2. COVENANT OF PURCHASE AND SALE. On and subject to the terms and conditions set
forth in this Agreement, Seller shall sell, convey, assign and transfer to
Buyer, and Buyer shall purchase and accept from Seller, all of the real and
personal property comprising the Hotel and, except as otherwise expressly
provided herein, assume from and after Closing all obligations and liabilities
appertaining to such property (including, without limitation, Seller’s
obligations and liabilities under and with respect, the Assumed Contracts, the
Permits and any Permitted Exceptions).

3. PURCHASE PRICE AND DEPOSIT.

3.1 Amount of Purchase Price. The Purchase Price shall be Fifty Three Million
Dollars ($53,000,000.00), but the net amount thereof payable to Seller shall be
subject to credits, prorations and other adjustments as provided in Sections 8
and 11.

3.2 Allocation of Price. Seller and Buyer shall allocate the Purchase Price
among the Hotel Premises, FF&E, tangible and intangible property comprising the
Hotel in accordance with Exhibit D attached hereto. Allocations made pursuant to
this Section shall be used by the Parties for title insurance and all tax and
other government reporting purposes.

3.3 Deposit.

3.3.1 Amount and Delivery. Within two (2) Business Days after the Effective
Date, Buyer shall deliver into Escrow cash in the amount of One Million Dollars
($1,000,000.00) (the “Initial Deposit”), as a good faith deposit. Within one
(1) Business Day after the Approval Date, if Buyer elects to proceed with the
purchase of the Hotel, Buyer shall deliver into Escrow an additional cash
deposit of One Million Dollars ($1,000,000.00) (the “Additional Deposit”). The
Initial Deposit, together with the Additional Deposit when and if made, and all
interest earned on the deposited funds while in Escrow, shall comprise the
“Deposit.” The Deposit shall be non-refundable except as expressly provided in
this Agreement.

3.3.2 Investment. The Deposit, while held in Escrow, shall be held by the Escrow
Agent in a federally-insured, interest-bearing account with a national banking
association.

3.3.3 Disposition. If Buyer, in breach of its obligations under this Agreement,
fails to purchase the Hotel on or before the Closing Date, Seller upon
termination of this Agreement shall be entitled to receive and retain the
Deposit as liquidated damages, in accordance with Section 20. At Closing, the
Deposit shall, together with interest earned thereon, shall be applied against
the Purchase Price. In the event of a termination of this Agreement in
accordance with the terms hereof, the Deposit shall be returned to Buyer less
Buyer’s proportionate share of any Escrow cancellation charges.

4. TITLE AND DUE DILIGENCE CONDITIONS.

4.1 Title Report and Survey. Buyer hereby acknowledges that it has received a
copy of the Title Report and the Existing Survey, together with copies of all
documents referenced in the Title Report (the “Title Documents”). If Buyer
desires Extended

 

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Coverage, Buyer may, at its sole expense, update or supplement the Existing
Survey or replace it with a new Survey, so long as it obtains such updated,
supplemental Survey, and delivers a copy of it to Seller, on or before the
Approval Date.

4.2 Objectionable Title Matters and Permitted Exceptions. Except for any
exceptions to or defects in Seller’s title (“Objectionable Title Matters”) with
respect to which Buyer gives Seller and Escrow Agent written notice of objection
(each a “Title Objection Notice”) on or before the Approval Date or as otherwise
provided herein, Buyer shall be deemed to have approved the state of Seller’s
title to the Hotel Premises as disclosed by the Title Report or the Title
Documents or would be disclosed on the Effective Date by a Survey and inspection
of the Hotel Premises. All exceptions and other defects that are disclosed by
the Title Report or the Title Documents, or would be disclosed by such a Survey
and inspection, to which Buyer makes no timely objection in accordance with the
provisions of this Section 4, and all such exceptions and other defects to which
Buyer timely objects but later waives such objection as provided in this Section
4, shall be deemed Permitted Exceptions.

4.3 Cure of Objectionable Title Matters. Seller shall have no obligation to cure
Objectionable Title Matters, unless hereafter created by Seller in breach of its
covenants under this Agreement. If Seller elects to cure any Objectionable Title
Matter, then Seller may extend the Closing Date as necessary to provide at least
30 days for Seller to effectuate such cure. Such extension shall be effected by
Seller giving written notice thereof to Buyer at least five (5) Business Days
before the date otherwise specified herein as the Closing Date.

4.4 Termination for Objectionable Title Matter. If, after giving Seller timely
written notice under this Section 4 of any Objectionable Title Matter, Buyer
does not receive within ten (10) days after the date Seller receives the Title
Objection Notice from Buyer (the “Seller’s Response Date”) Seller’s
unconditional written undertaking to take, at or before Closing, such steps as
the Title Company specifies in its written confirmation are required for it
either to omit such Objectionable Title Matter as an exception in the Title
Policy or to affirmatively insure Buyer against loss resulting from such
Objectionable Title Matter by an endorsement to the Title Policy in a form
reasonably satisfactory to Buyer and Existing Lender, as the case may be, then
Buyer shall have the right to terminate the Escrow and this Agreement by written
notice of termination given to Seller and Escrow Agent no later than the five
(5) days after the Seller’s Response Date, whereupon Escrow Agent shall cancel
Escrow, disburse the Deposit to Buyer in accordance with Section 3.3.3 above and
return every other item in Escrow to the Party which deposited the same. If
Buyer does not so elect to terminate this Agreement, Buyer shall be deemed to
have waived its objection to the Objectionable Title Matter(s) in question and
such title matter(s) shall then become Permitted Exceptions.

4.5 Access to Property and Records. During the period from the Effective Date to
Closing, Seller shall provide to Buyer, its agents, consultants and counsel,
upon reasonable advance notice but not less that two (2) Day’s prior notice,
access during the hours of 9:00 a.m. and 5:00 p.m. Pacific Time on all Business
Days to:

4.5.1 The Hotel Records (excluding software and electronic data, but including
print-outs of such data).

 

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4.5.2 The Hotel Premises, for purposes of conducting (at Buyer’s sole expense
and liability) any inspections, observations, examinations, surveys and tests
that Buyer may reasonably require (but Buyer shall not conduct any borings,
drilling or other invasive or destructive testing without Seller’s prior written
consent and without first evidencing to Seller liability insurance coverage for
such activity reasonably satisfactory in scope and amount to Seller).

Such right of access, however, shall be subject to the rights of guests, tenants
and licensees of the Hotel, and Buyer in its activities under this Section 4.5
shall conduct its inspections so as not to interfere with such rights or the
operation of the Hotel in any respect. In no event shall Buyer communicate with
any employees of or at the Hotel other than (A) the Hotel’s general manager and
(B) such other executive Hotel Employees, if any, as Seller designates in
writing from time-to-time (“Designees”), nor shall Buyer disclose or permit to
be disclosed to any Hotel Employees, other than the general manager and any
Designees, the nature or reason for Buyer’s presence on or about the Hotel
Premises, without Seller’s prior written approval.

4.6 Indemnification. Buyer shall Indemnify Seller and Hotel Manager from and
against any and all Claims (including Claims by Seller for damage to the Hotel
as well as third-party Claims) arising or asserted to arise out of any activity
of Buyer or Buyer’s representatives conducted at or about the Hotel Premises,
except to the extent resulting from Seller’s gross negligence or willful
misconduct. Buyer shall, with reasonable promptness, repair in a good and
workmanlike manner any damage to the Hotel caused by any such activity.

4.7 Buyer’s Right of Termination. In addition to the right of termination
provided in Section 4.4, Buyer shall have the right, in its sole discretion, to
terminate this Agreement unless Buyer is satisfied as to all matters related to
the Hotel and bearing upon the suitability of the Hotel for Buyer’s purposes;
but Buyer shall be conclusively deemed to have waived such right unless by 5:00
p.m., Eastern Time, on the Approval Date Buyer has given Seller and Escrow Agent
written notice of termination of this Agreement.

5. REPRESENTATIONS.

5.1 By Seller.

5.1.1 Regarding the Hotel. Seller hereby represents to Buyer that, as of the
Effective Date, except as disclosed in Exhibit H or any other Exhibit to this
Agreement, in the Title Report, the Existing Survey or in any new Survey, third
party report or other written document or notice relating to the Hotel obtained
by or furnished to Buyer prior to the Approval Date:

5.1.1.1 To Seller’s Knowledge, Seller has not received written notice from any
Governmental Authority (a) that the current condition, occupancy or use of the
Hotel violates or will require correction under any applicable Law or
(b) revoking, canceling or denying renewal of any Permit.

5.1.1.2 There are no lawsuits filed and served upon Seller or, to Seller’s
Knowledge, otherwise pending or threatened, whose outcome could adversely

 

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affect title to or the use, occupancy or operation of the Hotel or Seller’s
ability to convey the Hotel under this Agreement (including, without limitation,
actions for condemnation).

5.1.1.3 The Schedule of Contracts attached hereto as Exhibit J identifies all of
the existing Material Contracts and, to Seller’s Knowledge, neither the Hotel
Party nor any other party to any Material Contract is currently in material
breach thereof and all such Material Contracts are in full force and effect.

5.1.1.4 To Seller’s Knowledge, there is no default under the Existing Loan or
Existing Loan Documents on the part of Seller or, to Seller’s Knowledge on the
part of the Existing Lender. Exhibit L attached hereto identifies the Existing
Loan Documents pertaining to the Existing Loan. To Seller’s Knowledge, based
upon the latest information provided by the Existing Lender, the outstanding
principal amount of the Existing Loan is $27,700,533.69 as of the date hereof.

5.1.1.5 To Seller’s Knowledge, Seller has not filed any notice of protest or
appeal against, or commenced proceedings to recover, real property tax
assessments against the Hotel Premises.

5.1.1.6 To Seller’s Knowledge, there are no employees of the Hotel other than
the Hotel Employees and none of the Hotel Employees is covered by a collective
bargaining agreement or within any bargaining unit certified under the National
Labor Relations Act or any similar state Law.

5.1.1.7 There are no existing management or franchise agreements relating to the
Hotel other than the Hotel Management Agreement and the Franchise Agreement.

5.1.1.8 Exhibit M sets forth a correct and complete list of each insurance
policy maintained by Seller with respect to the Hotel.

5.1.1.9 Exhibit K sets forth a list of environmental assessments, reports and
studies relating to the Hotel in Seller’s possession.

5.1.2 Regarding Seller. Seller hereby represents to Buyer that:

5.1.2.1 Seller is duly organized, validly existing and in good standing under
the laws of its State of incorporation; has full power to enter into this
Agreement and to fulfill its obligations hereunder; has authorized its
execution, delivery and performance of this Agreement by all necessary corporate
action; and has caused this Agreement to be duly executed and delivered on its
behalf to Buyer.

5.1.2.2 Seller has full right and power to convey and deliver possession of the
Hotel Premises and to transfer all of the other property comprising the Hotel in
accordance with this Agreement. This Agreement constitutes a valid and binding
obligation of Seller, enforceable against Seller in accordance with its terms.

 

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5.1.2.3 As of the Effective Date, (i) no government, internal or other third
party approval or consent that has not already been obtained is required for
Seller’s execution and delivery of, or performance of obligations under, this
Agreement and (ii) Seller’s execution, delivery and performance of this
Agreement do not and will not violate, and are not restricted by, any other
contractual obligation or any Law to which Seller is a party or by which Seller
or any of the property comprising the Hotel is bound.

5.1.2.4 As of the Effective Date, there are no lawsuits filed and served against
Seller or, to Seller’s Knowledge, otherwise pending or threatened against
Seller, whose outcome could adversely affect Seller’s ability to perform its
obligations under this Agreement.

5.1.2.5 Except for the Broker, Seller has not engaged or dealt with any broker,
finder or similar agent in connection with the transactions contemplated by this
Agreement.

5.1.2.6 Seller is not the subject debtor under any federal, state or local
bankruptcy or insolvency proceeding, or any other proceeding for dissolution,
liquidation or winding up of its assets, and no attachments, execution
proceedings, assignments for the benefit of creditors, insolvency, bankruptcy,
or similar proceedings are pending or, to Seller’s Knowledge, threatened against
Seller.

5.2 By Buyer. Buyer hereby represents to Seller that:

5.2.1 Buyer is a limited liability company, duly formed, validly existing and in
good standing under the laws of the state of its formation, is in good standing
and qualified to do business in every other jurisdiction in which such
qualification is legally required; has full power and authority to enter into
this Agreement and to fulfill its obligations hereunder; has authorized the
execution, delivery and performance of this Agreement by all necessary company
action; and has caused this Agreement to be duly executed and delivered to
Seller.

5.2.2 No government, internal or other third party approval or consent that has
not already been obtained are required for Buyer’s execution and delivery of, or
performance of obligations under, this Agreement, and Buyer’s execution and
performance of this Agreement do not and will not violate, and are not
restricted by, any other contractual obligation or applicable Law to which Buyer
is a party or by which Buyer is otherwise bound.

5.2.3 As of the Effective Date, there are no lawsuits filed and served against
Buyer or, to Buyer’s knowledge, otherwise pending or threatened whose outcome
could adversely affect Buyer’s ability to purchase the Hotel and otherwise
perform its obligations under this Agreement.

5.2.4 Except for Broker engaged by Seller, Buyer has not engaged or dealt with
any broker, finder or similar agent in connection with the transaction
contemplated by this Agreement.

 

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5.2.5 Buyer is experienced in the acquisition, ownership and operation of hotels
similar to the Hotel and is fully competent to assess and evaluate the Hotel.

PRIOR TO THE APPROVAL DATE, BUYER WILL CONDUCT ITS OWN INVESTIGATION OF THE
HOTEL AND MAKE ALL INQUIRIES, INSPECTIONS, TESTS, AUDITS, STUDIES AND ANALYSES
(“INQUIRIES”) IN CONNECTION WITH PURCHASING THE HOTEL THAT BUYER DEEMS NECESSARY
OR ADVISABLE AND BUYER WILL RELY ON SUCH INSPECTIONS AND TESTS IN DETERMINING IF
THE HOTEL IS SUITABLE FOR BUYER’S PURPOSES. IF FOR ANY REASON BUYER IS UNABLE ON
OR BEFORE THE APPROVAL DATE TO MAKE ANY INQUIRY THAT IT DESIRED TO MAKE, OR THAT
IS CUSTOMARILY MADE IN TRANSACTIONS OF THIS SORT, OR OTHERWISE FAILS TO OBTAIN
INFORMATION SUFFICIENT TO ANSWER ANY QUESTION REGARDING THE CONDITION AND
SUITABILITY OF THE HOTEL, AND YET NONETHELESS PROCEEDS WITH THE PURCHASE OF THE
HOTEL, BUYER SHALL ASSUME ALL RISKS THAT, HAD IT PERFORMED SUCH INQUIRY OR
OBTAINED SUCH INFORMATION, IT WOULD HAVE ELECTED NOT TO PROCEED WITH THE
PURCHASE OF THE HOTEL ON THE TERMS CONTAINED HEREIN.

5.2.6 EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT OR ANY TRANSFER
INSTRUMENT, BUYER IS BUYING THE HOTEL “AS IS, WHERE-IS AND WITH ALL FAULTS” AND
WITHOUT ANY REPRESENTATIONS OR WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, OF ANY
KIND WHATSOEVER, WHETHER BY SELLER OR BY ANY ONE ACTING ON SELLER’S BEHALF
(INCLUDING, WITHOUT LIMITATION, AGENTS, BROKERS, CONSULTANTS, COUNSEL,
EMPLOYEES, OFFICERS, DIRECTORS, SHAREHOLDERS, PARTNERS, TRUSTEES OR
BENEFICIARIES).

5.3 WAIVER AND RELEASE. AS A MATERIAL PART OF THE CONSIDERATION TO SELLER FOR
THE SALE OF THE HOTEL HEREUNDER, EXCEPT (A) FOR A CLAIM MADE UNDER THIS SECTION
5 FOR MONETARY DAMAGES DUE TO A BREACH OF A REPRESENTATION OF SELLER EXPRESSLY
SET FORTH IN THIS AGREEMENT OR (B) FOR A BREACH OF A COVENANT OF SELLER
EXPRESSLY SET FORTH IN THIS AGREEMENT BUYER HEREBY WAIVES AND RELINQUISHES, AND
RELEASES SELLER AND ALL OF SELLER’S OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES
AND AGENTS (COLLECTIVELY, “SELLER RELEASEES”) FROM, ANY AND ALL CLAIMS AND
REMEDIES (INCLUDING, WITHOUT LIMITATION, ANY RIGHT OF RESCISSION) AGAINST SELLER
RELEASEES OR ANY OF THEM BASED DIRECTLY OR INDIRECTLY ON (A) ANY PAST, PRESENT
OR FUTURE CONDITION OF THE HOTEL, INCLUDING, WITHOUT LIMITATION, THE RELEASE OR
PRESENCE OF ANY HAZARDOUS SUBSTANCES OR (B) ANY MISREPRESENTATION, OR FAILURE TO
DISCLOSE TO BUYER ANY INFORMATION, REGARDING THE HOTEL (INCLUDING, WITHOUT
LIMITATION, ANY DEFECTIVE, HAZARDOUS OR UNLAWFUL CONDITION WHICH SELLER SHOULD
BE AWARE, WHETHER OR NOT SUCH CONDITION REASONABLY COULD HAVE BEEN DISCOVERED BY
BUYER THROUGH AN INSPECTION OF THE HOTEL OR THE PROPERTY RECORDS), OTHER THAN
SUCH A MISREPRESENTATION CONSTITUTING WILLFUL FRAUD. BUYER UNDERSTANDS THAT SUCH
WAIVER

 

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AND RELEASE INCLUDES STATUTORY AS WELL AS “COMMON LAW” AND EQUITABLE RIGHTS AND
REMEDIES AND THAT IT COVERS POTENTIAL CLAIMS OF WHICH BUYER MAY BE CURRENTLY
UNAWARE OR UNABLE TO DISCOVER. BUYER ACKNOWLEDGES THAT THE FOREGOING WAIVER AND
RELEASE IS OF MATERIAL CONSIDERATION TO SELLER IN ENTERING INTO THIS AGREEMENT,
THAT BUYER’S COUNSEL HAS ADVISED BUYER OF THE POSSIBLE LEGAL CONSEQUENCES OF
MAKING SUCH WAIVER AND RELEASE AND THAT BUYER HAS TAKEN INTO ACCOUNT, IN
AGREEING TO PURCHASE THE HOTEL AT THE PURCHASE PRICE SPECIFIED HEREIN, SELLER’S
DISCLAIMER OF ANY WARRANTIES AND REPRESENTATIONS REGARDING THE HOTEL OTHER THAN
THOSE EXPRESSLY SET FORTH HEREIN.

BUYER FURTHER AGREES AND ACKNOWLEDGES THAT, IN GIVING THE FOREGOING WAIVER AND
RELEASE, IT HAS WITH ITS LEGAL COUNSEL, CONSIDERED ANY STATUTE OR OTHER LAW THAT
MIGHT APPLY TO AND LIMIT THE EFFECT OF BUYER’S WAIVER AND RELEASE HEREIN AND
HEREBY KNOWINGLY WAIVES THE BENEFITS OF ANY SUCH LAW AND INTENDS THAT IT NOT BE
APPLICABLE HERE.

BUYER REPRESENTS AND WARRANTS TO SELLER THAT NEITHER BUYER OR ANY OF ITS
AFFILIATES IS (OR WILL BE) A PERSON WITH WHOM SELLER IS RESTRICTED FROM
TRANSACTING BUSINESS UNDER REGULATIONS OF THE OFFICE OF FOREIGN ASSET CONTROL
(“OFAC”) OF THE DEPARTMENT OF THE TREASURY OF THE UNITED STATES OF AMERICAN
(INCLUDING, THOSE PERSONS NAMED ON OFAC’S SPECIALLY DESIGNATED AND BLOCKED
PERSONS LIST) OR UNDER ANY STATUTE, EXECUTIVE ORDER (INCLUDING, THE SEPTEMBER
23, 2001 EXECUTIVE ORDER BLOCKING PROPERTY AND PROHIBITING TRANSACTIONS WITH
PERSONS WHO COMMIT, THREATEN TO COMMIT, OR SUPPORT TERRORISM), OR OTHER
GOVERNMENTAL ACTION.

5.4 Survival and Limitations. The Parties’ representations set forth in this
Section 5 (and their respective liability for any breach thereof) shall survive
Closing and shall not be deemed to merge into any of the Transfer Instruments;
provided, however, that after Closing Seller shall have no liability to Buyer
for any breach of such representations unless:

5.4.1 The facts constituting such breach have not been disclosed to, discovered
by or otherwise become known to Buyer prior to Closing;

5.4.2 Buyer has given Seller written notice claiming such breach, and stating in
reasonable detail the factual basis for such claim, within 120 days after the
Closing Date; and

5.4.3 Buyer’s actual out-of-pocket loss from such breach exceeds $50,000; and

 

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5.4.4 Buyer commences a legal action on such claim, and serves Seller with
notice thereof in accordance with the applicable Law, within 180 days after the
Closing Date.

5.5 Notice of Subsequent Event or Discovery. Prior to Closing, each Party shall
give the other prompt notice of its discovery of any event or condition which
has the effect of making any of Seller’s representations contained in Section 5
materially inaccurate. If it is reasonably likely that such event or condition
can be remedied within 30 days, so as to remove such material inaccuracy, and if
Seller undertakes in writing to Buyer, within ten (10) Days after receiving such
notice, to use all commercially reasonable efforts to effect such remedy, then
so long as it is making such efforts Seller shall have the right to extend the
Closing Date by no more than thirty (30) days to complete such remedy and Buyer
shall not be entitled, prior to the Closing Date (as so extended) or (if
earlier) the cessation of such efforts, to terminate this Agreement by reason of
such inaccuracy.

6. OPERATION OF THE HOTEL PENDING CLOSING. From the Effective Date until
Closing, except for emergencies, Seller shall use commercially reasonable
efforts to cause Hotel Manager to operate the Hotel in the Ordinary Course
(including, without limitation, maintaining insurance policies equivalent in all
material respects to those maintained as of the Effective Date) and, subject to
the terms of the Hotel Management Agreement, shall not cause, approve or
voluntarily permit any material change in the operations of the Hotel without
Buyer’s prior written approval (which shall not be unreasonably withheld,
conditioned or delayed), which would:

6.1 Cancel or surrender of any existing Permit for the Hotel.

6.2 Create any lease, mortgage, deed of trust or other encumbrance on Seller’s
title to the Hotel.

6.3 Material alterations or other material changes in the Hotel Improvements
except for (i) alterations or improvements required to avoid or cure a violation
of applicable Law, and (ii) alterations or improvements to repair any damage
caused by an emergency or a Casualty.

6.4 Significantly alter or revise the accounting principles, procedures, methods
or practices in place at the Hotel.

6.5 Material reductions in current levels of service, sales and marketing
efforts, maintenance or staff.

6.6 Remove or permit to be removed from the Hotel any material FF&E or similar
personal property, unless such item is replaced by a substitute of equal or
greater value.

If Buyer proceeds to Closing with knowledge of any breach by Seller of this
Section 6, Buyer shall be deemed to have waived such breach and shall have no
claim against Seller after Closing on account of such breach.

 

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7. OTHER AGREEMENTS.

7.1 Property Management Agreement; Franchise Agreement.

7.1.1 Notwithstanding any other provision of this Agreement, Buyer shall not
assume any obligations under the Hotel Management Agreement. Seller shall cause
the Hotel Management Agreement to be terminated at Seller’s sole cost and
expense as of Closing and shall deliver possession of the Hotel to Buyer free
and clear of any possession by or rights of the Hotel Manager; provided,
however, Buyer acknowledges that the De-Flagging Activities (defined below) may
have to be performed by Seller pursuant to Section 7.1.3. Seller shall remain
responsible for all amounts due under the Hotel Management Agreement as of
Closing. It is the intent for Buyer to negotiate a new franchise, license or
agreement with Hilton to permit the Hotel to maintain the “Hilton” brand after
Closing (the “New Hilton Agreement”). Promptly following the Effective Date,
Buyer shall submit application to Hilton for the New Hilton Agreement, and shall
pay any and all applicable application fees or deposits in connection therewith.
The New Hilton Agreement shall be effective upon Closing. Simultaneously with
the New Hilton Agreement taking effect, Seller shall cause the Franchise
Agreement to be terminated. In the event that Buyer is unable to obtain the New
Hilton Agreement on or before the tenth (10th) Business Day prior to Closing,
then (i) Seller shall make the termination of the Franchise Agreement effective
as of, and conditioned upon, Closing; and (ii) Buyer acknowledges that the
De-Flagging Activities (defined below) may have to be performed by Seller
pursuant to Section 7.1.2. If, in connection with the termination of the
Franchise Agreement hereunder, Seller is required to pay to Hilton liquidated
damages in connection with Seller’s termination thereof in the event that Buyer
is unable to obtain the New Hilton Agreement then at Closing Buyer shall pay to
Seller a sum equal to the amount of such liquidated damages paid by or due from
Seller.

7.1.2 In connection with the termination of the Franchise Agreement, except as
otherwise provided in this Section 7.1.2, certain activities (“De-Flagging
Activities”) must be performed, including (without limitation), disconnecting
the Hotel from the Hilton reservation system, termination of the Hilton website
for the Hotel and removal from the Hotel Premises of all Hilton marks and
protected designs. If the Franchise Agreement is terminated at Closing, during
the period beginning immediately after Closing and ending ten (10) Business Days
after Closing, Seller shall have access to the Hotel to perform the De-Flagging
Activities. Buyer shall not operate the Hotel in violation of Hilton’s marks.
Buyer shall Indemnify Seller from and against any Claim against Seller caused by
or arising out of Buyer’s breach of the immediately preceding sentence of this
Section 7.1.2. If Buyer obtains the New Hilton Agreement, which includes consent
of Hilton to the sale of the Hotel pursuant to this Agreement without
termination of the right to use the Hilton brand and system in its operation of
the Hotel after Closing, and if Buyer at Closing enters into the New Hilton
Agreement, Seller shall not be responsible for the De-Flagging Activities under
this Section 7.1.2, and Buyer shall be responsible for performing, at Buyer’s
sole cost and expense, any de-flagging activities required of Buyer under the
New Hilton Agreement (or other license to use the Hilton Brand and System) upon
the expiration of the term thereof.

7.2 Property of Guests. All baggage or other items checked or left in the care
of Seller, and any items in the “Lost and Found Bin” will be listed in an
inventory, prepared

 

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in duplicate and signed by representatives of Seller and Buyer on the Closing
Date. Buyer will be responsible from and after the Closing for all property so
listed and shall hold harmless, indemnify and defend Seller, from and against
any and all Claims arising out of the subsequent loss of or damage to such
listed property. Seller shall indemnify Buyer from and against any and all
Claims arising out of any loss of or damage to property of guests at the Hotel
prior to the Closing or not so listed in such inventory. Seller and Buyer shall
use reasonable efforts to have Hotel guests who have left items in any of the
Hotel’s safe deposit boxes (not including in-room safes) confirm on the Closing
Date that no such items are missing, but Seller shall not be deemed liable for
any guest Claim made after the Closing Date with respect to items allegedly left
in a Hotel safe deposit box before Closing merely because such items could not
be listed on the above-described inventory.

7.3 Assumption of Existing Loan. Buyer agrees to purchase the Hotel subject to
the Existing Loan and shall, within five (5) Business Days of the Effective
Date, submit application to Existing Lender for the Existing Loan Assumption
Consent and shall simultaneously provide copies of all application materials and
ongoing correspondence between Buyer and Existing Lender to Seller specifically
relating to the Existing Loan Assumption Consent; provided that such
correspondence is not otherwise privileged or proprietary. In connection with
such application, Buyer shall provide to Lender all information customarily or
reasonably required in connection with such a loan assumption and deliver to
Lender all documentation reasonably required of Buyer and Replacement Guarantor
in connection with such loan assumption. Buyer shall use commercially reasonable
efforts to satisfy Lender’s requirements for the Existing Loan Assumption
Consent before the Closing Date. Seller agrees to reasonably cooperate with
Buyer’s efforts to obtain the Existing Loan Assumption Consent. Buyer shall
Indemnify Seller and Existing Guarantor from and against any and all Claims that
Seller incurs by reason of any alleged default on the part of Buyer under the
Existing Loan and the Existing Loan Documents, where the allegation of such
default is based on an event or condition which occurred or arose (or is alleged
to have occurred or arisen) after Closing. Seller shall Indemnify Buyer and
Replacement Guarantor from and against any and all Claims that Buyer incurs by
reason of any alleged default on the part of Seller under the Existing Loan and
the Existing Loan Documents, where the allegation of such default is based on an
event or condition which occurred or arose (or is alleged to have occurred or
arisen) before Closing. The indemnification set forth in the immediately
preceding sentence shall not be limited by the provisions of Section 19.2 below.
If the Parties are unable to obtain the Existing Loan Assumption Consent before
the Closing Date, either Party shall have the right to extend the Closing Date
by delivering one or more written notices to the other at least ten
(10) Business Days prior to the then scheduled Closing Date to a date not later
than March 31, 2011 (the “Outside Closing Date”). If after any extended time,
the Parties have been unable to obtain the Existing Loan Assumption Consent,
then Buyer shall be obligated to proceed to Closing, the Existing Loan shall be
paid off in full at Closing and Buyer shall be responsible for an amount not to
exceed the loan assumption fee that Buyer would have paid Existing Lender in
connection with the Existing Loan Assumption Consent (but in no event more than
a sum equal to 1% of the outstanding balance of the Existing Loan), which amount
shall be paid to Seller to be applied towards any prepayment and/or yield
maintenance fee Seller must pay to Existing Lender in connection therewith (the
“Prepayment Fee”). In the event that the Closing Date is extended pursuant to
the provisions of this Section 7.3 and Buyer elects by written notice to Seller
to complete the transaction contemplated hereunder prior to the Outside Closing
Date

 

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notwithstanding that the Existing Loan Assumption Consent has not been obtained
(an “Early Closing”), then Buyer shall pay the entire Prepayment Fee due and
payable under the Existing Loan Documents.

7.4 Right to Audit. Buyer may, at its sole cost and expense, engage a
third-party certified public accountant to perform audits of the books and
records (the “Audit”) of the Hotel for the immediate two calendar years prior to
the Closing Date, including the historical financial statements of the Hotel,
which audits shall include all disclosures required by generally accepted
accounting principles and the Securities and Exchange Commission regulations,
specifically in accordance with Rule 3-05 of Regulation S-X and all related
rules and regulations thereof. Seller shall, at no cost to Seller, request Hotel
Manager’s cooperation in connection with the performance of such audits, and
shall provide, or request Hotel Manager to provide, all information reasonably
requested by such accountants (except any information that Seller or Hotel
Manager deem confidential), at no cost or expense to Seller or Hotel Manager. In
connection with such audits, Seller shall request Hotel Manager to provide the
accountants performing such audits with a commercially reasonable representation
letter, in form and substance acceptable to Seller and Hotel Manager, at no cost
or expense to Seller or Hotel Manager. The failure of the Hotel Manager to so
cooperate, or provide such representation letter, shall not constitute a failure
to perform by Seller hereunder and Buyer shall have no recourse to Seller in
such event. The agreements of Seller and Hotel Manager set forth in this
Section 7.4 shall survive Closing for a period of one (1) year.

Notwithstanding the foregoing, in no event shall the exercise of Buyer’s rights
under this Section 7.4:

(i) affect Buyer’s obligations and agreements under this Agreement, including,
without limitation, Buyer’s obligation to Close in accordance with the terms of
this Agreement;

(ii) provide Buyer with the right to terminate this Agreement; or

(iii) affect the Purchase Price, any pro-rations, credits or other adjustments
set forth in Section 8 or otherwise under this Agreement.

Furthermore, the Buyer, its employees, agents, consultants and any other person
or entity claiming by, through or under Buyer (a) shall have no Claims against
Seller Releasees and/or Hotel Manager as a result of the Audit, and (b) hereby
waive and release any Claims against Seller Releasees and/or Hotel Manager that
may arise from, or as a result of, the Audit.

7.5 Cooperation. Seller shall, at no cost or expense to Seller, and shall
request Hotel Manager to, at no cost or expense to Hotel Manager, reasonably
assist and cooperate with Buyer in Buyer’s efforts to obtain a liquor license
for the same category of liquor consumption as presently offered at the
Premises.

 

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8. PRORATIONS, CREDITS AND OTHER ADJUSTMENTS. At Closing, the Parties shall make
the prorations and other adjustments provided below, and the net amount
consequently owing to Seller or Buyer shall be added to or subtracted from the
proceeds of the Purchase Price payable to Seller at Closing. Beginning as close
to the anticipated Closing Date as practicable, Seller shall, in consultation
with Buyer and with Buyer’s reasonable cooperation, cause to be prepared a
prorations and credits statement (the “Preliminary Statement”) which shall
reflect all of the prorations, credits and other adjustments in payment at
Closing required under this Section 8 or under any other provision of this
Agreement. As soon as the Parties have agreed upon the Preliminary Statement,
they shall jointly deliver a mutually signed copy thereof to Escrow Agent. To
the extent the Parties are unable to agree by Closing on any item on the
Preliminary Statement, Seller’s estimation of such item shall be used and such
item shall be finally resolved on the Final Statement pursuant to Section 11.

8.1 Proration of Taxes. All real estate ad valorem taxes, general assessments
and special assessments and all personal property ad valorem taxes assessed
against the Hotel (generically, “Taxes”) and payable during the tax year in
which Closing occurs shall be prorated between Buyer and Seller as of the
Closing Date. Taxes, which become due and payable during any following tax year,
even if assessed with respect to the current tax year, shall be the
responsibility of Buyer. Taxes shall be subject to readjustment to reflect the
agreed upon proration provided herein in the event any abatement for the tax
year in which Closing occurs has not been settled, provided that neither party
shall have the obligation to pursue any abatement of Taxes.

8.2 Proration of Expenses. The following items of expense with respect to any
portion or aspect of the Hotel shall be prorated between Seller and Buyer as of
the Closing Date:

8.2.1 Periodic charges under Assumed Contracts (such as monthly rents or fixed
periodic charges), but not charges made on a per-order or per-call basis.

8.2.2 Utility charges (but excluding any utility deposits). To the extent
reasonably practicable, though, in lieu of prorating the charges for any metered
utility service, the Parties shall endeavor to have the utility read the meter
as early as possible on the Closing Date, render a final bill to Seller based on
such reading and bill all subsequent service to Buyer.

8.2.3 Employee Liabilities for wages, salary, benefit payments and payroll taxes
for the pay period(s) in which Closing occurs and for accrued Employee Leave,
except to the extent that Seller is required by applicable Law or otherwise
elects to determine and itself pay such liabilities accrued through the day
preceding Closing.

8.2.4 All other Hotel operating expenses of a strictly periodic nature (and not
based upon specific orders for goods or services).

8.2.5 Accrued interest on the Existing Loan.

 

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8.3 Proration of Hotel Revenues.

8.3.1 Guest Ledger. The open account (“Guest Ledger Account”) for each person
who is a guest at the Hotel as of midnight on the day immediately preceding
Closing (“Closing Eve”) shall be closed and settled as follows:

8.3.1.1 Room and service charges (including, without limitation, room service
charges and in-house movie fees) and parking charges (collectively, the
“Charges”) through Closing Eve shall be retained by Seller. Buyer shall receive
a credit equal to Twenty Dollars ($20.00) for each guest room that is occupied
on the morning of Closing. The Charges accruing from and after the Closing Date
shall belong to Buyer.

8.3.1.2 Gift shop revenues through Closing Eve shall be retained by Seller.
Commencing on the Closing Date, gift shop revenues shall belong to Buyer.

8.3.1.3 Other charges shall be allocated between Seller and Buyer as of the
Closing Date, based on the time such charges were actually incurred.

8.3.1.4 From the amounts apportioned to Seller or Buyer, as the case may be,
under the foregoing clauses shall be deducted all applicable taxes, travel and
tour agent commissions, license, reservation and franchise fees, and similar
expenses.

8.3.2 Other Operating Revenues. Other operating revenues not otherwise provided
for in this Section 8, shall be prorated between Buyer and Seller as of Closing.

8.3.3 Other Receivables. This sale does not include any accounts receivable for
room, food and beverage and other sales and services at or from the Hotel for
the period through the Closing Date (the “Accounts Receivable”), which remains
the sole property of Seller. Seller shall have the right to receive, collect,
discharge and compromise all Accounts Receivable. Buyer shall cause its hotel
manager to use commercially reasonable good faith efforts to collect the
Accounts Receivable and agrees that any Accounts Receivable received by Buyer or
its hotel manager after the Closing from any party owing any portion thereof
(including credit card sales when payment thereon is received by Buyer), net of
any reasonable collection costs, credit card service fees or travel agent’s
commissions which may be owed in connection therewith, shall be promptly
remitted to Seller . Any payment at or relating to the Hotel which is received
or recovered after Closing from a person who then owes amounts both on such a
Seller-retained receivable and on an account to the Hotel accruing after Closing
shall be applied to the invoice(s) specified by the payor (and, if the payor
makes such payment without reference to a specific invoice, then such payment
shall then be applied first to the latest accruing accounts).

8.4 Hotel Payables. At Closing, Buyer shall receive a proration credit equal to
the excess of (A) the aggregate estimated amount of all Hotel Payables in the
Preliminary Statement over (B) Buyer’s prorated share of such Hotel Payables
under this Section 8, and Buyer shall assume the obligation to satisfy Hotel
Payables (1) included in such estimate (as evidenced by a schedule which Seller
shall prepare and submit to Buyer as part of the Preliminary Statement) and
(2) which otherwise are identified within the 90-day period

 

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following Closing. After Closing, before paying any amount invoiced or otherwise
claimed by a third party due with respect to the Hotel operations prior to
Closing which is not included on such schedule (or is claimed in an amount
larger than that shown on such schedule), Buyer shall first submit such invoice
or claim to Seller. Unless Seller, within 15 days after receiving such
submission, objects to such invoice or claim (thereby making it a Disputed
Payable), Buyer may pay the same and take a credit for such payment on the Final
Statement. Seller shall remain responsible for all Disputed Payables and for all
Hotel Payables that are neither included on such schedule nor identified within
the 90-day period following Closing.

8.5 Other Credits to Buyer.

8.5.1 Credit for Reservation Deposits. Buyer shall receive a proration credit
equal to the aggregate amount of all outstanding Reservation Deposits.

8.5.2 Principal Balance on Existing Loan. Buyer shall receive a credit equal to
the outstanding principal balance on the Existing Loan to be assumed by Buyer,
as certified or agreed to by Existing Lender under the Existing Loan Assumption
Consent.

8.6 Other Credits to Seller.

8.6.1 Credits for Cash Banks. Seller shall receive a proration credit equal to
the aggregate balance of all Cash Banks as of Closing.

8.6.2 Credit for Prepaid Expenses. Seller shall receive a proration credit equal
to the amount Seller actually paid with respect to all prepaid expenses, except
to the extent that the goods, services or other items for which such expenses
were incurred are not usable by Buyer.

8.6.3 Credit for Certain Inventories. Seller shall receive a proration credit
equal to Seller’s cost of all (i) goods then held by Seller for sale to Hotel
guests and others in the Ordinary Course, (ii) unopened food and beverage
Inventories, to the extent allowed by law and (iii) gift shop Inventories.

8.6.4 Credit for Impound and Reserve Accounts. Seller shall receive a proration
credit equal to the amount of all impound and/or reserve accounts to the extent
not returned to Seller by Existing Lender and still required by Existing Lender
to be maintained by Buyer.

8.7 Regarding Hotel Prorations Generally. Unless this Section 8 expressly
provides otherwise: (A) all prorations hereunder with respect to the Hotel shall
be made as of the Closing Date, (B) all prorations shall be made on an actual
daily basis, and (C), for purposes of such prorations, all items of revenue and
expense with respect to the Hotel’s operations shall be classified and
determined in accordance with generally accepted accounting principles and the
Uniform System of Accounts.

8.8 Utility Deposits. Notwithstanding any other provision of this Agreement, no
prorations shall be made or credits allowed with respect to any utility
deposits, which shall remain the sole property of Seller.

 

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9. CONDITIONS TO CLOSING.

9.1 In Buyer’s Favor. In addition to the conditions specified in Section 4,
Buyer’s obligation to close shall be subject to timely satisfaction of each of
the following conditions:

9.1.1 Performance of Seller’s Obligations. Performance by Seller in all material
respects of its obligations under this Agreement to be performed at or before
Closing.

9.1.2 Accuracy of Representations. The accuracy in all material respects, as of
Closing, of each of the representations set forth in Section 5.1.

9.1.3 Satisfactory Title Policy. Issuance at Closing of the Title Policy (with
Extended Coverage, to the extent reasonably available from title insurers in the
jurisdiction where the Hotel is located and if Buyer timely requests such
coverage and furnishes the Title Company with the Survey; but, otherwise, the
availability of Extended Coverage or any other endorsement to the Title Policy
shall not be a condition to Buyer’s obligation to close unless Seller has
undertaken in writing to obtain such endorsement to cure an Objectionable Title
Matter).

If any of the conditions specified in this Section 9.1 is not timely satisfied
(or waived by Buyer in writing), Buyer shall have the right to terminate this
Agreement by giving written notice of such termination to Seller and Escrow
Agent by the Closing Date (but, in any event, before Closing actually occurs).
After Closing, Buyer shall not have any right to terminate this Agreement or
rescind its purchase of the Hotel by reason of the failure of any such
condition, whether or not such failure was known to or discoverable by Buyer
prior to Closing.

9.2 In Seller’s Favor. The obligation of Seller to close Escrow shall be subject
to timely satisfaction of each of the following conditions:

9.2.1 Performance of Buyer’s Obligations. Performance by Buyer in all material
respects of Buyer’s obligations under this Agreement to be performed at or
before Closing.

9.2.2 Accuracy of Representations. The accuracy in all material respects, as of
Closing, of each of the representations of Buyer set forth in Section 5.2.

If any condition specified in this Section 9.2 is not satisfied (or waived by
Seller in writing) by the Closing Date, Seller shall have the right to terminate
this Agreement by giving written notice of such termination to Buyer and Escrow
Agent by the Closing Date (but, in any event, before Closing actually occurs).
After Closing, Seller shall not have any right to terminate this Agreement or
rescind its purchase of the Hotel by reason of the failure of any such
condition, whether or not such failure was known to or discoverable by Seller
prior to Closing.

 

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9.3 Pre Closing Damage or Destruction.

9.3.1 Termination Rights. Seller agrees to give Buyer prompt notice of any
Casualty occurring at the Hotel between the Effective Date and the Closing Date;
provided, however, that Seller shall not be deemed to be in default under this
Section 9.3.1 for failure to report minor incidents causing insignificant
damage. If, prior to Closing, a material Casualty occurs, Buyer shall have the
right, at its election, to terminate this Agreement, by written notice given to
the Seller prior to the Closing Date. If a material Casualty occurs fewer than
ten (10) Business Days before the Closing Date, Buyer shall have the right to
extend the Closing Date until the tenth (10th) Business Day after the occurrence
of such Casualty in order to make the election permitted by this Section.

9.3.2 If No Termination. If a Casualty occurs and Buyer either does not have or
elects not to exercise the right under Section 9.3.1 to terminate this
Agreement, this Agreement shall continue in force and, upon Closing, Buyer shall
receive:

(i) a credit against the Purchase Price equal to (A) the amount, if any, of
Proceeds received by Seller prior to Closing in connection with such Casualty,
plus (B) the lesser of the “deductible” or self retained limit under the
property hazard insurance covering the Hotel Premises or the reasonably
estimated cost of repairing, restoring or replacing the portion of the Hotel
Premises damaged or destroyed by such Casualty, minus (C) the amount (if any)
actually expended by Seller to repair, restore or replace the damaged portions
of the Hotel Premises; and

(ii) an assignment of Seller’s rights to all Proceeds which may then be or
thereafter become payable.

If the credit formula specified in subparagraph (i) above results in a negative
number, then Seller (rather than Buyer) shall be entitled to a credit, in the
amount by which (i) the amount actually expended by Seller to repair, restore or
replace the damaged portions of the Hotel Premises exceeds (ii) the Proceeds
received by Seller; but if such credit to Seller would exceed the amount of
Proceeds assigned to Buyer at Closing (or if there are no Proceeds to assign),
then Seller shall instead retain the right to receive such Proceeds (if any) and
receive no credit.

9.3.3 Material Part. For purposes of this Section 9.3, a Casualty shall be
deemed material if the extent of the damage, destruction or taking (measured by
the cost of repairing or replacing the damaged or destroyed portion of the Hotel
Premises or the fair market value of the taken portion of the Hotel Premises)
exceeds fifteen percent (15%) of the Purchase Price.

10. CLOSING.

10.1 Time, Place and Manner. Closing shall occur on or before the Closing Date,
through Escrow, at the offices of the Escrow Agent (the “Place of Closing”). In
order to confirm concurrent delivery of the Purchase Price and delivery of title
to the Hotel Premises,

 

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Buyer’s funds for Closing and the Transfer Instruments to be recorded shall be
delivered into Escrow for Closing, in accordance with this Agreement.

10.2 Seller’s Deliveries.

10.2.1 At least one (1) Business Day prior to the Closing Date, Seller shall
deliver to Escrow Agent the following documents (“Seller’s Closing Documents”):

10.2.1.1 The Deed and two counterparts of every other Transfer Instruments (if
any) to be recorded at Closing, each duly executed and acknowledged by Seller,
for recording at Closing in the official land records of the county where the
Hotel is located.

10.2.1.2 A counterpart of the FIRPTA Certificate, duly executed.

10.2.1.3 Such other documents as the Escrow Agent or the Title Company may
reasonably require from Seller (provided the same do not require any
indemnification from Seller or otherwise causes Seller to incur any cost or
liability in order to effect Closing in accordance with this Agreement.

10.2.1.4 If the Existing Loan Assumption Consent is obtained in accordance with
the provisions of Section 7.3, the Existing Loan Assumption Consent documents
reasonably required by Existing Lender to be executed by Seller or Existing
Guarantor and reasonably approved by Seller, for delivery to Existing Lender
upon Closing.

10.3 Buyer’s Deliveries:

10.3.1 At least one (1) Business Day prior to the Closing Date (except as
otherwise indicated), Buyer shall deliver to Escrow Agent the following funds
and documents (“Buyer’s Closing Documents”):

10.3.1.1 By no later than 11:00 A.M. Pacific Time on the Business Day that is
before the Closing Date (the “Funds Deadline”), good and immediately available
funds in an amount (when added to the Deposit) equal at least to the sum of
(A) the Purchase Price, plus (B) Buyer’s share of Closing costs to be paid
through Escrow, plus or minus (C) the net amount owing Seller or Buyer (as the
case may be) under Section 8, as shown by the Preliminary Statement. Time is of
the essence with respect to Buyer’s delivery of such funds by the Funds
Deadline.

10.3.1.2 Such documents as the Escrow Agent or the Title Company may reasonably
require (provided the same do not cause Buyer to incur any cost or liability)
from Buyer in order to effect Closing in accordance with this Agreement.

10.3.1.3 If the Existing Loan Assumption Consent is obtained in accordance with
the provisions of Section 7.3, the Existing Loan Assumption Consent documents,
including but not limited to the Replacement Guaranty, required by Existing
Lender to be executed and delivered by Buyer (or Buyer’s nominee), in form and
substance consistent

 

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with Section 9.1.4 and otherwise reasonably approved by Buyer, to be delivered
to Existing Lender upon Closing.

10.3.1.4 Two counterparts duly executed of each Transfer Instrument to be
executed by Buyer.

10.4 Closing Costs.

10.4.1 Paid By Seller. Seller shall pay:

10.4.1.1 One half of Escrow Agent’s fees and expenses for administering Escrow.

10.4.1.2 The commission owed to Broker pursuant to a separate agreement between
Seller and Broker.

10.4.1.3 The Prepayment Fee if Seller is obligated to pay the same pursuant to
Section 7.3.

10.4.1.4 All other fees and other costs owing to Existing Lender under the
Existing Loan, except for (i) the Existing Lender’s assumption fee, (ii) any
Prepayment Fee in the event of an Early Closing, and (iii) reasonable
reimbursable costs and expenses (including reasonable attorney’s fees) in
connection with the Existing Loan Assumption Consent.

10.4.1.5 All charges for the Title Report and the premiums for the Title Policy,
excluding the cost of any Extended Coverage.

10.4.2 Paid by Buyer. Buyer shall pay:

10.4.2.1 All transfer taxes, stamp taxes, documenting taxes, sales taxes, use
taxes and similar excises imposed on the sale, conveyances and transfers under
this Agreement, including the realty transfer tax imposed by King County, City
of Seattle and/or Washington State.

10.4.2.2 The charge for Extended Coverage.

10.4.2.3 The cost of up-dating, supplementing or obtaining a Survey.

10.4.2.4 All recording and filing fees and charges incurred in connection with
the recording or other filing of the Transfer Instruments.

10.4.2.5 One half of Escrow Agent’s fees and expenses for administering Escrow.

10.4.2.6 The Existing Lender’s assumption fee or payment to Seller in lieu
thereof as provided in Section 7.3, the Prepayment Fee in the event of an Early

 

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Closing, and reimbursable costs and expenses (including reasonable attorney’s
fees) actually incurred in connection with the Existing Loan Assumption Consent.

10.4.2.7 All Transfer Taxes due and payable on the Existing Loan Assumption
Consent.

10.4.3 Any other charges and expenses incurred in effecting Closing shall be
allocated between the Parties in accordance with the custom for commercial real
estate transactions in the county where the Hotel is located.

10.5 Completion of Closing. Closing shall be effected as follows:

10.5.1 At such time as the Transactors and Counsel have confirmed the delivery
to Escrow Agent of each of the items specified in Sections 10.2.1 and 10.3.1,
(and provided Escrow Agent has not advised the Parties of any apparent obstacle
to issuing the Title Policy as of Closing), the Parties through their respective
Transactors or Counsel shall instruct Escrow Agent to record the Deed (and any
other Transfer Instruments to be recorded) in the appropriate place and to
complete Closing by disbursing funds in accordance with Sections 10.5.2.1
through 10.5.2.3 and, as appropriate, delivering Seller’s Closing Documents to
Buyer and Buyer’s Closing Documents to Seller.

10.5.2 As soon as Escrow Agent confirms to the Parties that the Title Company is
irrevocably committed to issue the Title Policy to Buyer, the Parties through
their respective Transactors or Counsel shall instruct Escrow Agent to disburse
funds from Escrow as follows:

10.5.2.1 Disburse to Seller, in such respective amounts as Seller shall
designate to Escrow Agent in writing before Closing, the sum of (A) the Purchase
Price, minus (B) Seller’s share of Closing costs to be paid through Escrow, plus
or minus (C) the net amount owing to Seller or Buyer (as the case may be) under
Section 8, as shown by the Preliminary Statement.

10.5.2.2 Pay the closing costs specified in Section 10.4.

10.5.2.3 Disburse any excess funds as directed by Buyer.

Disbursements to a Party shall be made by wire transfer of current funds to an
account at a commercial bank within the United States, as designated to Escrow
Agent by such Party or its Counsel.

10.5.3 So long as the Title Company is irrevocably committed to issue the Title
Policy as of Closing, it shall not be a condition to disbursement of funds at
Closing that the Deed or any other Transfer Instrument have first been recorded.

10.6 Escrow and Recording Instructions. This Agreement shall also serve as
instructions to Escrow Agent regarding the recording of instruments and
disbursement of funds from Escrow subject to any supplementary or general
instructions delivered by either party to Escrow Agent, or as may be required
under any other provision of this Agreement or reasonably

 

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requested by Escrow Agent. If there is any conflict between such supplementary
general instructions and the provisions of this Agreement, the latter shall
control as between the Parties.

10.7 Delivery of Possession. Seller shall cause possession of the Hotel to be
delivered to Buyer immediately upon Closing, free and clear of all leases,
tenancies and occupancies except for (A) Hotel guests, (B) the Assumed
Contracts, and (C) possessory rights and interests included among the Permitted
Exceptions.

10.8 Failure of Closing. If Closing fails to occur by the Closing Date, any
Party, if not then in default of its obligations under this Agreement, shall
have the right to terminate this Agreement at any time until Closing actually
occurs, by giving written notice of such termination to the other Parties and to
Escrow Agent.

10.9 Procedure for Termination of Escrow. Upon any termination of this
Agreement, Seller and Buyer shall each promptly give Escrow Agent written
instructions to cancel Escrow and disburse the Deposit and all other funds and
items (if any) then held in Escrow in accordance with the provisions of this
Agreement. If, following termination of this Agreement, the Parties give Escrow
Agent conflicting instructions or one of the Parties fails to give Escrow Agent
instructions:

10.9.1 Escrow Agent shall promptly notify each Party in writing of such
conflicting instructions or of one Party’s failure to give instructions, and
request that such conflict or omission be promptly resolved.

10.9.2 Where one Party has failed to give instruction, unless Escrow Agent
receives written instructions from such Party within five (5) Business Days
after giving notice of such failure, Escrow Agent shall be free to comply with
the instructions given by the other Party and both Parties shall hold harmless,
indemnify and defend Escrow Agent from any claim or liability resulting from
such compliance.

10.9.3 Where the Parties have given conflicting instructions, Escrow Agent shall
take no action to cancel Escrow or deliver funds or items out of Escrow except
pursuant to further, joint written instructions from the Parties or a final
court order or judgment. If the Parties fail, within sixty (60) days after
Escrow Agent has made requested such joint instructions, to deliver to Escrow
Agent joint written instructions resolving such disputed matter, Escrow Agent
shall have the right to file an action in interpleader against all the Parties
in any court of competent jurisdiction and to deposit with such court all of the
funds and other items held in Escrow, whereupon Escrow Agent shall be discharged
from any further obligations or liability with respect to Escrow. The Parties,
jointly and severally, shall hold harmless and indemnify Escrow Agent from and
against any claim, liability and expenses resulting from such interpleader
action (but, as between Seller and Buyer, the costs of such interpleader action
shall be assessed in accordance with Section 16.9).

10.10 Maintenance of Confidentiality by Escrow Agent. Except as may be otherwise
required by applicable Law, Escrow Agent shall maintain the existence, terms and
nature of this transaction and the identities of the Parties in strictest
confidence and shall not

 

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disclose any thereof to any third party (including, without limitation, any
broker) without the prior written consent of all the Parties.

11. POST CLOSING ADJUSTMENTS.

11.1 Final Closing Statement. No later than ninety (90) days after Closing,
Buyer shall prepare and deliver to Seller a final Closing statement (the “Final
Statement”), which shall correct the estimates and (if necessary) other amounts
used in the Preliminary Statement, based on the Hotel’s operating reports for
the month immediately preceding Closing and the month in which Closing occurred,
on Buyer’s own post Closing examination of the books and records of the Hotel
and on other relevant facts discovered after Closing.

11.2 Disputes. If Seller gives timely and proper notice of objection to any
item(s) on the Final Statement, and Seller and Buyer are unable between
themselves to resolve each such item within thirty (30) days after Buyer
delivers the Final Statement to Seller, then any Party may submit the unresolved
items to a mutually agreeable national accounting firm (or, if the Parties are
unable to agree on such firm within forty (40) days after Buyer delivers the
Final Statement to Seller or such firm is unwilling to handle the dispute, to a
qualified neutral party designated by the American Arbitration Association
office located in Seattle, Washington) for a determination which shall be
binding and conclusive upon all Parties and shall be deemed incorporated into
the Final Statement. Seller and Buyer shall pay in equal shares the fees and
other expenses of such accounting firm or other designated neutral party for
making such determination.

11.3 Settlement. Within ten (10) Business Days after the Final Statement has
been agreed (or deemed agreed) between Seller and Buyer or after the last timely
objection by Seller has been resolved under Section 11.2, Buyer or Seller (as
the case may be) shall pay to the other the net amount shown to be due to such
Party on the Final Statement, as agreed or as modified by the resolution of such
objections. Except for mathematical error manifest on the face of the Final
Statement, no further adjustments or payments shall be required with respect to
such prorations, credits and other adjustments.

12. THIRD PARTY CLAIMS AND OBLIGATIONS.

12.1 Assumed and Retained Liabilities. Buyer shall Indemnify Seller from and
against any and all Claims that Seller incurs by reason of any obligation or
liability assumed by Buyer pursuant to this Agreement, including, without
limitation (A) Employee Liabilities assumed by Buyer expressly hereunder,
(B) the Assumed Contracts, (C) the Hotel Payables, and (D) Reservations. Seller
shall Indemnify Buyer from and against any and all Claims that Buyer incurs by
reason of any obligation or liability retained by Seller pursuant to this
Agreement, including, without limitation (i) Employee Liabilities retained by
Seller and (ii) Disputed Payables.

 

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12.2 Employee Liabilities.

12.2.1 Buyer’s Obligations. Upon Closing Buyer shall:

12.2.1.1 Offer (or cause the manager selected by Buyer to offer) employment at
the Hotel in the same position or job classification and at no less than the
same wage rate or salary as such Hotel Employee held and enjoyed immediately
prior to Closing, and with reasonably equivalent benefits to a sufficient number
of Hotel Employees as is necessary to prevent the Seller from incurring any
indemnification loss under the WARN Act with respect to the Hotel Employees.
Buyer shall cause each such offer to be expressly conditioned upon the Hotel
Employee’s signing a written application form, in which such employee accepts
the offer of new employment and concurrently gives Hotel Manager notice that he
or she is termination employment with Hotel Manger, effective as of Closing.

12.2.1.2 Assume (A) all Employee Liabilities with respect to the Continuing
Employees accruing or first arising on and after the Closing Date, or triggered
by a termination of employment after Closing (except to the extent that such
Employee Liabilities arise under or relate to any Hotel Employee Plan sponsored
or maintained by Seller or Hotel Manager), (B) all Employee Liabilities accrued
as of Closing for which Buyer has received a proration credit under Section 8.

12.2.2 Seller’s Obligations. Seller shall cause Hotel Manager to terminate the
employment of all Hotel Employees effective as of Closing. Seller Indemnifies
Buyer from and against any and all Claims arising out of any and all
(A) Employee Liabilities with respect to Continuing Employees accruing prior to
Closing (except those which are triggered by a termination of employment after
Closing or for which Buyer has received a credit under Section 8) and
(B) Employee Liabilities with respect to Hotel Employees who are not Continuing
Employees.

12.2.3 WARN Act Liability. Buyer acknowledges that, in light of Buyer’s
intention to continue operation of the Hotel with substantially the same staff
after Closing and the Parties’ desire for a prompt Closing, it is Buyer’s
interest that Seller not take the precautionary step of giving Hotel Employees
notice of possible termination of employment at the Hotel under the Worker
Adjustment and Retraining Notification Act of 1988 (the “WARN Act”).
Accordingly, Seller shall not give such notice with respect to the sale of the
Hotel to Buyer, and Buyer shall Indemnify Seller from and against any and all
Claims arising out of real or alleged violation of the WARN Act for failure to
give such notice to the extent based on Buyer’s failure, on and after the
Closing Date, to offer employment at the Hotel to Eligible Employees in
accordance with Section 12.2.1.

12.3 Indemnification of Related Persons. Any indemnification of a Party against
third person Claims contained herein shall also run in favor of such Party’s
partners, shareholders, beneficial owners, directors, officers, employees,
Affiliates, agents and managers (including, without limitation, Hotel Manager),
all of whom are intended by the Parties to be third party beneficiaries of this
Section 12.

 

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12.4 Survival. The Parties’ indemnities set forth in this Section 12 and
elsewhere in this Agreement shall survive Closing and shall not be deemed to
merge into any of the Transfer Instruments; provided, however, Seller’s
liability shall be subject to the limitations set forth in Section 19.2.

13. HOTEL RECORDS. As reasonably required for tax filings, preparation and
auditing of financial statements, other reporting and similar purposes, Seller
shall have the right to make and retain copies of the Hotel Records which are
transferred to Buyer at Closing and to disclose information contained therein.
Buyer shall also make the Hotel Records available to Seller and its authorized
representatives at the Hotel, at reasonable times and upon reasonable prior
notice, and allow Seller to make copies thereof; and Buyer shall not dispose of
any Hotel Records prior to the fifth anniversary of Closing without giving
Seller at least thirty (30) days’ prior written notice and opportunity to
recover the same.

14. ASSIGNMENT. Neither this agreement nor any of Buyer’s rights hereunder may
be assigned, encumbered or transferred without Seller’s prior written consent.
Notwithstanding the foregoing, prior to Closing, Buyer shall have the right to
assign or transfer its rights under this Agreement to a corporation,
partnership, limited liability company or other entity which is wholly owned and
controlled, directly or indirectly, by Buyer, provided Buyer gives Seller at
least five (5) days’ prior written notice of such assignment and that such
assignee concurrently with such assignment assumes, in a written instrument
delivered and satisfactory in form to Seller, all of the obligations and
liabilities of Buyer hereunder. Buyer shall remain fully and primarily liable
for all its obligations under this Agreement notwithstanding any such
assignment.

15. NOTICES. Except in the case (if any) where this Agreement expressly provides
for an alternate form of communication, any notice, consent, demand or other
communication to be delivered to a Party hereunder shall be deemed delivered and
received when made in writing and transmitted to the applicable Party either by
receipted courier service, or by the United States Postal Service, first class
registered or certified mail, postage prepaid, return receipt requested, by
electronic facsimile transmission (“Fax”), at the address or addresses indicated
for such party below (and/or to such other address as such party may from time
to time by written notice designate to the other):

 

If to Seller:   

AEW Capital Management, L.P.

Two Seaport Lane, Suite 300

Boston, Massachusetts 02210

Attention: James Luchars

   Fax: 617-261-9555 and a copy to:   

Seyfarth Shaw LLP

Two Seaport Lane, Suite 300

Boston, Massachusetts 02210

Attention: Andrew Pearlstein

                 Catherine Burns

 

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   Fax: 617-946-4801 If to Buyer:   

c/o Chesapeake Lodging Trust

1997 Annapolis Exchange Parkway, Suite 410

Annapolis, Maryland 21401

Attention: SVP and Chief Accounting Officer

Fax: 410-972-4180

and a copy to:   

c/o Chesapeake Lodging Trust

1997 Annapolis Exchange Parkway, Suite 410

Annapolis, Maryland 21401

Attention: SVP and Chief Investment Officer

Fax: 410-972-4180

and shall be deemed delivered and received (A), if delivered or transmitted
before 5:00 p.m. recipient’s local time on a Business Day, or if tendered for
delivery between the hours 9:00 a.m. and 5:00 p.m. recipient’s local time on a
Business Day and refused, then on the date of actual (or refused) delivery or
actual transmission as evidenced by postal or courier receipt (or by a completed
transmission log sheet generated by the sending telecopier) and (B), otherwise,
on the Business Day next following the date of actual delivery or transmission;
provided, however, that any communication delivered by Fax must be confirmed
within three (3) Business Days by duplicate notice delivered as otherwise
provided herein and any refused delivery must re-tendered within two
(2) Business Days.

16. GENERAL PROVISIONS.

16.1 Confidentiality. Except for Permitted Disclosures (defined below), (A) each
Party shall keep confidential the terms of this Agreement, and (B) until and
unless the Closing occurs, Buyer shall keep confidential all information
regarding the Hotel. In addition, except as required by Law, neither Party shall
issue press release or communication with the public prior to, or after, Closing
without the prior written consent of the other Party, which prohibition shall
survive the Closing or termination of this Agreement. As used herein, “Permitted
Disclosures” include only (i) disclosures by a Party to its attorneys,
accountants and other consultants as reasonably necessary in negotiation of this
Agreement, the conduct of due diligence, the consummation of the transactions
contemplated hereby and the exercise of Buyer’s rights and the performance its
duties hereunder, (ii) disclosure by any Party to its parent entity or entities,
trustees, directors and investors therein, (iii) disclosure to any government
regulatory agency which requests the information in question in the course of
its regulatory functions, and (iv) any other disclosure required by Law
(including, without limitation, in response to any subpoena). In the case of any
Permitted Disclosure described in clause (i) above, the disclosing Party shall
advise the person to whom such disclosure is made of the confidential nature of
any information disclosed and obtain from such person an undertaking to respect
such confidentiality. Any confidentiality agreement regarding the Hotel or the
transaction contemplated by this Agreement previously made between the Parties
or their agents shall continue in full force and effect and shall not be deemed
to have merged into, or been superseded by, this Agreement.

 

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16.2 Effect of Termination. Upon any termination of this Agreement, neither
Party shall have any further obligation or liability to the other hereunder
except (i) as provided below (regarding Buyer’s return or destruction of
materials received from Seller), (ii) any liability which a Party may have
hereunder by reason of the fact that termination either (A) was wrongfully made
by it or (B) resulted from a breach of its covenants or other obligations
hereunder and (iii) any obligation under Sections 4.6 or 16.10. Within ten
(10) Business Days after termination of this Agreement without Closing, Buyer
shall either return to Seller all materials of a confidential nature which Buyer
has received from Seller pursuant to this Agreement or confirm to Seller in
writing that Buyer has destroyed all such materials. Within ten (10) Business
Days after Seller’s request following the termination of this Agreement without
Closing, Buyer shall deliver to Seller all reports, studies and analyses
prepared by third parties at Buyer’s request or direction relating to the Hotel
Premises, other than Buyer’s internal documents containing proprietary or
privileged information and to the extent permitted pursuant to agreements with
parties preparing such reports (unless this Agreement has been terminated due to
the default of Seller). Such delivery shall be made without representation or
warranty by Buyer as to the contents of such items and Seller shall not be
entitled to rely on such items.

16.3 Construction; Participation in Drafting. Each Party acknowledges that it
and its Counsel have participated substantially in the drafting of this
Agreement and agree that, accordingly, in the interpretation and construction of
this Agreement, no ambiguity, real or apparent, in any provision hereof shall be
construed against a Party by reason of the role of such Party or its Counsel in
the drafting of such provision.

16.4 No Third Party Beneficiaries. Except as expressly provided in Section 12.3,
nothing in this Agreement is intended or shall construed to confer any rights or
remedies on any person other than the Parties and their active successors and
assigns, or to relieve, discharge or alter the obligations of any third person
to either Party or to give any third person any right of subrogation or action
over against Party. Without limiting the generality of the foregoing, no Hotel
Employee shall be deemed a third party beneficiary of any provision of this
Agreement.

16.5 Integration and Binding Effect. This Agreement constitutes the entire
agreement among the Parties pertaining to the subject matter hereof and
supersedes all prior agreements, understandings and representations of the
Parties with respect to the subject matter hereof (including, without
limitation, any letter of intent, offer sheet, broker’s set-up, disclosure
materials, offering circular or other such written materials of any kind). This
Agreement may not be modified, amended, supplemented or otherwise changed,
except by a writing executed by all Parties. Except as otherwise expressly
provided herein, this Agreement shall bind and inure to the benefit of the
Parties and their respective successors and assigns.

16.6 Computation of Time. Any time period specified in this Agreement which
would otherwise end on a non Business Day shall automatically be extended to the
immediately following Business Day.

16.7 Captions. Article and Section headings used herein are for convenience of
reference only and shall not affect the construction of any provision of this
Agreement.

 

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16.8 Further Assurances. The Parties shall cooperate with each other as
reasonably necessary to effect the provisions of this Agreement, shall use
reasonable and good faith efforts to satisfy conditions to Closing and, at and
after Closing, shall each execute and deliver such additional instruments or
other documents as the other Party may reasonably request to accomplish the
purposes and intent of this Agreement; provided, however, that nothing in this
Section shall be deemed to enlarge the obligations of the Parties hereunder or
to require any to incur any material expense or liability not otherwise required
of it hereunder.

16.9 Consents and Approvals. Wherever this Agreement requires a Party’s consent
or approval, then unless expressly provided otherwise, such consent of approval
(i) may be given or withheld in such Party’s sole and absolute discretion and
(ii) to be effective, must be given in a writing signed by such Party and
expressly identifying the specific matter to which such consent or approval
applies.

16.10 Enforcement Costs. Should either Buyer or Seller institute any action or
proceeding to enforce any provision of this Agreement or for damages by reason
of any alleged breach of any provision hereof, the prevailing Party shall be
entitled to recover from the other Party all costs and expenses (including
reasonable attorneys’ fees) incurred by such prevailing Party in connection with
such action or proceeding. A Party also shall be entitled to recover all costs
and expenses (including reasonable attorneys’ fees) incurred in the enforcement
of any judgment or settlement in its favor obtained in such action or proceeding
(and in any such judgment provision shall be made for the recovery of such post
judgment costs and expenses.)

16.11 Governing Law. This Agreement shall be deemed to be an agreement made
under the Laws of the State where the Hotel Premises are located and for all
purposes shall be governed by and construed in accordance with such Laws.

16.12 Counterparts, Electronic Delivery. This Agreement, and any amendment
hereto, may be executed in any number of counterparts and by each Party on
Separate counterparts, each of which when executed and delivered shall be deemed
an original and all of which taken together shall constitute but one and the
same instrument. A Party may deliver this Agreement by electronically
transmitting to the other Party (either by Fax or email) a facsimile copy of its
executed counterpart, but such Party shall also promptly deliver to the other
Party an original executed counterpart hereof.

17. EXHIBITS. Each of the following exhibits is hereby incorporated into and
made an integral of this agreement:

 

A    Legal Description of Hotel Parcel B    Form of Deed C    Form of Bill of
Sale D    Allocation of Purchase Price E    Form of Assignment and Assumption of
Assumed Contracts F    Form of General Assignment and Assumption G    Form of
FIRPTA Certificate H    Exceptions to Seller Representations I    Intentionally
Omitted

 

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J    Schedule of Material Contracts K    Schedule of Environmental Report and
Existing Survey L    Schedule of Existing Loan Documents M    List of Insurance
Policies

Seller shall have until (and including) ten (10) Days after the Effective Date
to prepare or modify, and deliver to Buyer, Exhibits H and J. Any modification
of such Exhibits that Seller timely delivers shall supplement or supersede (as
the case may be) the prior version of such Exhibit for all purposes of this
Agreement.

18. SIGNERS’ WARRANTY. Each individual executing and delivering this agreement
on behalf of a corporate party hereby warrants and represents to the other
parties that he or she is duly authorized and empowered to do so.

19. LIMITATION ON SELLER’S LIABILITY.

19.1 Seller’s Breach of Obligation to Close. In the event Seller in breach of
this Agreement fails to close, and such failure is not due to Buyer’s default,
Buyer, as its sole and exclusive remedy may either (a) terminate this Agreement
and receive a refund of the Deposit and neither party shall have any further
right or obligation hereunder other than obligations which expressly survive
termination of this Agreement, or (b) pursue the remedy of specific performance
of Seller’s obligations under this Agreement; provided, however, that (i) Buyer
shall only be entitled to such remedy if (A) any such suit for specific
performance is filed within sixty (60) days after Buyer becomes aware of the
default by Seller, (B) Buyer is not in default under this Agreement, (C) Buyer
has tendered an amount equal to twenty five percent (25%) of the Purchase Price
to the Escrow Agent in immediately available funds and the Escrow Agent has
acknowledged receipt of same, in writing, to Seller, and (D) Buyer has furnished
five (5) Business Days’ prior written notice to Seller of its intent and
election to seek specific enforcement of this Agreement; and
(ii) notwithstanding anything to the contrary contained herein, Seller shall not
be obligated to expend any sums to cure any defaults under this Agreement and if
Buyer seeks specific performance under this Agreement, Buyer agrees to accept
the Hotel in its “AS IS, WHERE IS” condition as set forth in this Agreement.
Buyer hereby agrees that prior to its exercise of any rights or remedies as a
result of any defaults by Seller as provided in this Section 19.1, Buyer will
first deliver written notice of said default to Seller, and if Seller so elects,
Seller shall have the opportunity, but not the obligation, to cure such default
within ten (10) days after Seller’s receipt of such notice. In no event
whatsoever shall Buyer file any lis pendens or other instrument of record
against title to the Hotel Premises, or otherwise creates any cloud on Seller’s
title to the Hotel Premises. Buyer shall Indemnify Seller from and against all
costs, expenses (including attorneys’ fees) and losses which Seller incurs by
reason of Buyer’s violation of the immediately preceding sentence.
Notwithstanding any of the foregoing to the contrary, in no event whatsoever
shall Buyer have the right to seek money damages of any kind as a result of any
default by Seller under any of the terms of this Agreement except as expressly
set forth in this Agreement. In no event shall Seller be liable to Buyer for any
punitive, speculative or consequential damages.

19.2 Other Seller’s Breaches. Seller shall have no liability to Buyer under the
indemnities contained in Section 12 or elsewhere, or for breach of any covenant,
representation

 

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or warranty contained in Section 5.1 or elsewhere, or otherwise, unless Buyer
has given Seller written notice of a specific indemnity claim or claim of
breach, stating in reasonable detail the factual basis for such claim, within
120 days after the Closing Date, and unless Buyer commences legal action on such
claim, and serves Seller with notice of such claim in accordance with applicable
Law, within 180 days after the Closing Date. Further, and notwithstanding
anything to the contrary herein, (i) Seller shall in no event be liable to Buyer
for any such claim unless and until the aggregate amount of Buyer’s actual
out-of-pocket losses from all such valid claims exceeds $50,000, and (ii) in no
event shall the aggregate amount of Seller’s liability exceed two percent of the
Purchase Price. The limitations in clauses (i) and (ii) of this Section 19.2 are
in addition to, and not in derogation of, the limitations in Section 5.4.3 with
respect to Seller’s liability for breaches of its representations and
warranties. The limitations in this Section 19.2 shall not apply to the Seller’s
liability under Sections 7.3, 11 and 12.

20. LIQUIDATED DAMAGES AND LIMITATIONS OF REMEDIES FOR BUYER’S BREACH. If Buyer
in breach of this Agreement fails to close, then upon written notice of
termination (a “Termination Notice”) from Seller to Buyer and Escrow Agent, this
Agreement shall terminate (except for this section and Buyer’s obligations
pursuant to Sections 4.6, 16.2 and 16.10). The parties acknowledge and agree by
initialing this Section 20 that:

20.1 IF BUYER FAILS TO CLOSE IN BREACH OF THIS AGREEMENT, SELLER WILL INCUR
CERTAIN COSTS AND OTHER DAMAGES IN AN AMOUNT THAT WOULD BE EXTREMELY DIFFICULT
OR IMPRACTICAL TO ASCERTAIN.

20.2 THE DEPOSIT, TOGETHER WITH ALL INTEREST EARNED THEREON, BEARS A REASONABLE
RELATIONSHIP TO THE DAMAGES WHICH THE PARTIES ESTIMATE MAY BE SUFFERED BY SELLER
BY REASON OF SUCH A FAILURE OF CLOSING TO OCCUR, AND THE DEPOSIT AND INTEREST IS
NOT AN AMOUNT WHICH IS UNREASONABLE UNDER THE CIRCUMSTANCES EXISTING AT THE TIME
THIS AGREEMENT IS MADE (BUYER ACKNOWLEDGING AND AGREEING THAT BUYER HAS FULLY
CONSIDERED THE PROVISIONS OF THIS SECTION 20 AND SUCH CIRCUMSTANCES PRIOR TO
ENTERING INTO THIS AGREEMENT AND HAS CONSULTED WITH BUYER’S COUNSEL WITH RESPECT
THERETO).

20.3 UPON DELIVERY TO ESCROW AGENT BY SELLER OF A PROPERLY GIVEN TERMINATION
NOTICE, SELLER SHALL BE ENTITLED TO RECEIVE AND RETAIN THE DEPOSIT, TOGETHER
WITH ALL INTEREST EARNED THEREON, AS LIQUIDATED DAMAGES, WHICH DAMAGES SHALL BE
SELLER’S SOLE REMEDY HEREUNDER IF BUYER IN BREACH OF THIS AGREEMENT FAILS TO
CLOSE, AND BUYER SHALL FORTHWITH INSTRUCT ESCROW AGENT TO RELEASE THE DEPOSIT
AND ALL INTEREST EARNED THEREON TO SELLER AND TO RETURN TO SELLER ALL DOCUMENTS
AND INSTRUMENTS THERETOFORE DEPOSITED INTO THE ESCROW BY OR ON BEHALF OF THEM;
PROVIDED, HOWEVER, THAT THE DEPOSIT SHALL BE IN ADDITION TO AND NOT IN LIEU OF
ANY AMOUNTS OWED TO SELLER BY BUYER AS A RESULT OF BUYER’S OBLIGATIONS PURSUANT
TO SECTIONS 4.6, 16.2 AND 16.10; AND PROVIDED FURTHER THAT SELLER SHALL BE
ENTITLED TO RECOVER FROM BUYER ATTORNEYS’ FEES AND OTHER DIRECT

 

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OUT OF POCKET COSTS INCURRED BY THEM IN CONNECTION WITH THE ENFORCEMENT OR
DEFENSE OF OBLIGATIONS CONTAINED IN THIS SECTION 20.

IN FURTHER EVIDENCE OF THEIR AGREEMENT TO THIS LIQUIDATED DAMAGES PROVISION,
SELLER AND BUYER HAVE INITIALED BELOW:

 

SELLER:    MD                BUYER:    GJW                         

[Remainder of Page Intentionally Blank]

 

Page 38

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed and
delivered, each by its own representative thereunto duly authorized, as of the
date first above written.

 

SELLER:   AEW SBCO SEATTLE, LLC, a Delaware limited liability company   By:  

/s/ Marc Davidson

  Name:  

Marc Davidson

  Title:  

   Vice President

 

BUYER:   CHSP SEATTLE LLC, a Delaware limited liability company   By:  

/s/ Graham J. Wootten

    Graham J. Wootten     Its Vice President

{ESCROW AGENT’S SIGNATURE ON THE FOLLOWING PAGE

--------------------------------------------------------------------------------

The undersigned hereby accepts this Agreement as its escrow instructions and
agrees to act as Escrow Agent hereunder, in accordance with the terms and
conditions hereof.

 

STEWART TITLE GUARANTY COMPANY By:  

      /s/ Mark Anderson

Name:  

Mark Anderson

Title:  

Underwriting Counsel

Date:   November 2, 2010

--------------------------------------------------------------------------------

DESCRIPTION OF HOTEL PARCEL

Exhibit A

LEGAL DESCRIPTION

Parcel A:

Lots 6, 7, 8 And 9, Block 46, Second Addition To The Town Of Seattle As Laid Off
By The Heirs Of Sarah A. Bell, Deceased (Commonly Known As Heirs Of Sarah A.
Bell’s 2nd Addition To The City Of Seattle). According To The Plat Recorded In
Volume 1 Of Plats At Page 121, In King County, Washington;

Together With Vacated Alley Adjoining Said Lots, As Vacated By City Of Seattle
Ordinance No. 89797, Which Attached Thereto By Operation Of Law, And;

Lots 1, 3, 4, And 6, Block 113, A. A. Denny’s Broadway Addition To The City Of
Seattle. According To The Plat Recorded In Volume 6 Of Plats At Page 40, In King
County, Washington;

Except The Northwesterly 10 Feet Thereof Condemned In King County Superior Court
Cause No. 41394 For Street Purposes, As Provided By Ordinance No. 10051 Of The
City Of Seattle And;

Except That Portion Of Said Lot 6, A. A. Denny’s Broadway Addition To The City
Of Seattle And Of Said Lot 9, Of Heirs Of Sarah A. Bell’s 2nd Addition To The
City Of Seattle, Lying Southeasterly Of A Line Which Begins At The Intersection
Of The Southwesterly Extension Of The Northwesterly Face Of An 8 Inch Thick
Concrete Building Wall With The Southwesterly Line Of Said Lot 6, At A Point
16.67 Feet Southeasterly Of The Most Westerly Corner Thereof. And Runs Thence
Northeasterly Along Said Extension, Northwesterly Face And Its Extension To The
Southwesterly Margin Of Boren Avenue;

(Also Know As Parcel A Of City Of Seattle Lot Line Adjustment No. 9001610, As
Recorded Under Recording No. 9008300712, In King County, Washington).

Parcel B:

Unit 502, Avanti, A Condominium, According To The Declaration Thereof Recorded
Under Recording No. 9006280979, And Amendment(S) Thereto; Said Unit Is Located
On Survey Map And Plans Filed In Volume 96 Of Condominiums. At Pages 17 Through
27, Amended In Volume 101 At Pages 58 Through 68, Records Of King County,
Washington.

(Said Condominium Being A Subdivision Of Parcel B Of City Of Seattle Lot Line
Adjustment No. 9001610, As Recorded Under Recording No. 9008300712, In King
County, Washington).

Parcel C:

Easements For Footings, Foundations, Supports, Utilities, Access And Parking As
Declared Under Recording No. 9003290567, And As Amended Under Recording
No. 9011210516, In King County, Washington.

EXHIBIT A TO PURCHASE AND SALE AGREEMENT

--------------------------------------------------------------------------------

Special Warranty Deed

RECORDING REQUESTED BY AND

WHEN RECORDED RETURN TO:

 

 

 

 

 

DEED

 

GRANTOR:    AEW SBCO Seattle, LLC, a Delaware limited liability company GRANTEE:
   CHSP Seattle LLC, a Delaware limited liability company ABBREVIATED LEGAL
DESCRIPTION:    Parcel A of Lot Line Adjustment No. 9001610, AF    No.
9008300712; and Unit No. 502, Avanti, AF    No. 9006280979    Full legal
description on Exhibit A ASSESSORS’ TAX    066000-1832-03 PARCEL ID NO.:   
032280-0020-00    032280-0020-00

--------------------------------------------------------------------------------

DEED

FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which is hereby
acknowledged, the Grantor, AEW SBCO Seattle, LLC, a Delaware limited liability
company, does hereby convey and warrant to the Grantee, CHSP Seattle LLC, a
Delaware limited liability company the real property in the County of King,
State of Washington, more particularly described on Exhibit A attached hereto
and made a part hereof (the “Property”).

This conveyance is made subject to real estate taxes for the year             
and subsequent years, not yet due and payable, covenants, conditions,
restrictions, easements, rights of way and other matters of record, applicable
zoning, land use, and similar laws and regulations, and any and all matters
which would be disclosed by an accurate survey of the real estate.

DATED effective this      day of                     , 2010.

 

GRANTOR: AEW SBCO Seattle, LLC, a Delaware limited liability company By:  

 

Name:   Title:  

--------------------------------------------------------------------------------

STATE OF        )      ) COUNTY OF   

 

  )

On this      day of                     , 201    , before me personally appeared
                    , to me known to me to be                      of AEW SBCO
Seattle, LLC, a Delaware limited liability company, that executed the within and
foregoing instrument, and acknowledged that said instrument to be the free and
voluntary act and deed of said company, for uses and purposes therein mentioned,
and on oath stated that he/she was authorized to execute said instrument and
that the seal affixed is the seal of said company.

In witness whereof, I have hereunto set my hand and affixed my official seal the
day and year first above written.

 

           

 

            Notary Public in and for the State of            

 

  residing at   

 

My Commission Expires:        

 

            Notary’s Printed Name

 

         

--------------------------------------------------------------------------------

Exhibit A to Deed

Exhibit A

LEGAL DESCRIPTION

Parcel A:

Lots 6, 7, 8 And 9, Block 46, Second Addition To The Town Of Seattle As Laid Off
By The Heirs Of Sarah A. Bell, Deceased (Commonly Known As Heirs Of Sarah A.
Bell’s 2nd Addition To The City Of Seattle). According To The Plat Recorded In
Volume 1 Of Plats At Page 121, In King County, Washington;

Together With Vacated Alley Adjoining Said Lots, As Vacated By City Of Seattle
Ordinance No. 89797, Which Attached Thereto By Operation Of Law, And;

Lots 1, 3, 4, And 6, Block 113, A. A. Denny’s Broadway Addition To The City Of
Seattle. According To The Plat Recorded In Volume 6 Of Plats At Page 40, In King
County, Washington;

Except The Northwesterly 10 Feet Thereof Condemned In King County Superior Court
Cause No. 41394 For Street Purposes, As Provided By Ordinance No. 10051 Of The
City Of Seattle And;

Except That Portion Of Said Lot 6, A. A. Denny’s Broadway Addition To The City
Of Seattle And Of Said Lot 9, Of Heirs Of Sarah A. Bell’s 2nd Addition To The
City Of Seattle, Lying Southeasterly Of A Line Which Begins At The Intersection
Of The Southwesterly Extension Of The Northwesterly Face Of An 8 Inch Thick
Concrete Building Wall With The Southwesterly Line Of Said Lot 6, At A Point
16.67 Feet Southeasterly Of The Most Westerly Corner Thereof. And Runs Thence
Northeasterly Along Said Extension, Northwesterly Face And Its Extension To The
Southwesterly Margin Of Boren Avenue;

(Also Know As Parcel A Of City Of Seattle Lot Line Adjustment No. 9001610, As
Recorded Under Recording No. 9008300712, In King County, Washington).

Parcel B:

Unit 502, Avanti, A Condominium, According To The Declaration Thereof Recorded
Under Recording No. 9006280979, And Amendment(S) Thereto; Said Unit Is Located
On Survey Map And Plans Filed In Volume 96 Of Condominiums. At Pages 17 Through
27, Amended In Volume 101 At Pages 58 Through 68, Records Of King County,
Washington.

(Said Condominium Being A Subdivision Of Parcel B Of City Of Seattle Lot Line
Adjustment No. 9001610, As Recorded Under Recording No. 9008300712, In King
County, Washington).

Parcel C:

Easements For Footings, Foundations, Supports, Utilities, Access And Parking As
Declared Under Recording No. 9003290567, And As Amended Under Recording
No. 9011210516, In King County, Washington.

EXHIBIT B TO PURCHASE AND SALE AGREEMENT

--------------------------------------------------------------------------------

[Form of]

BILL OF SALE

THIS BILL OF SALE, for Ten Dollars ($10.00) cash and other good and valuable
consideration, receipt of which is hereby acknowledged, AEW SBCO SEATTLE, LLC, a
Delaware limited liability company (“Seller”), does hereby sell, assign, convey,
transfer and set over to                     , a              (“Buyer”), all of
the “FF&E” and “Inventory,” as those terms are defined in that certain Agreement
of Purchase and Sale for the Homewood Suites Seattle, dated as of ***, between
Seller, and Buyer, without warranty, express or implied, except that Seller
shall warrant and defend unto Buyer and Buyer’s successors and assigns title to
such property against all persons claiming by, through or under Seller (other
than the lessor of the Leased Equipment), but no others.

Seller further hereby covenants to execute and deliver such further
instrument(s) as Buyer may hereafter request to evidence or confirm any of the
sales made herein, in such form as Buyer may reasonably request and promptly
upon Buyer’s request therefor.

 

Dated:                     , 20        

AEW SBCO SEATTLE, LLC, a Delaware limited liability company

    By:  

 

    Name:  

 

    Title:  

 

EXHIBIT C TO PURCHASE AND SALE AGREEMENT

--------------------------------------------------------------------------------

ALLOCATION OF

PURCHASE PRICE

PURCHASE PRICE ALLOCATION

 

Land, Building & Improvements

   $ 51,839,722   

Personal Property

   $ 1,160,278   

EXHIBIT D TO PURCHASE AND SALE AGREEMENT

--------------------------------------------------------------------------------

[Form of]

ASSIGNMENT AND ASSUMPTION OF CONTRACTS

THIS ASSIGNMENT AND ASSUMPTION OF CONTRACTS (this “Assignment”) is made as of
***, by and between AEW SBCO SEATTLE, LLC, a Delaware limited liability company
(“Assignor”), and ***, a *** (“Assignee”), on the other.

RECITALS

A. Assignor has entered into that certain Agreement of Purchase and Sale (the
“Purchase Agreement”), dated as of ***, between Assignor, as “Seller,” and
Assignee {or, if initial Buyer has assigned the Agreement, insert name of
initial Buyer***}, as “Buyer,” for purchase of the land described in Exhibit A
attached hereto, together with the improvements, fixtures, furnishings,
equipment, inventories and other real and personal property comprising the hotel
known as the Homewood Suites Seattle, in Seattle, Washington (the “Hotel”). {If
initial Buyer has assigned Agreement: Buyer has assigned all of its rights,
title and interest under the Agreement to Assignee.}

B. In conjunction with the sale and purchase of the Hotel, the Purchase
Agreement obligates Assignor to assign to Assignee, and Assignee to assume, all
of the contracts and equipment leases (the “Assumed Contracts”) identified in
the Schedule of Contracts attached hereto as Exhibit B, subject to the terms and
conditions set forth in this Assignment.

NOW, THEREFORE, in consideration of the foregoing, and of the mutual covenants
and conditions herein contained, the parties hereto (together, the “Parties,”
and each sometimes a “Party”) hereby act and agree as follows:

1. Assignment. Assignor hereby assigns, sets over and transfers to Assignee, and
Assignee hereby takes and accepts from Assignor, all of Assignor’s rights in,
under and to each of the Assumed Contracts and to all benefits and privileges
hereafter accruing to Assignor thereunder.

2. Assumption of Obligations and Liabilities by Assignee. Assignee hereby
assumes all of the obligations and liabilities of Assignor under each of the
Assumed Contracts accruing from and after the date hereof.

3. No Impairment of Purchase Agreement Provisions. Nothing contained in this
Assignment shall be deemed to limit, waive or otherwise derogate from any
warranty, representation, covenant or indemnification made in the Purchase
Agreement by either Party, or to waive or abrogate any limits on liability
specified in the Purchase Agreement, and none of such provisions in the Purchase
Agreement shall be deemed to have merged into the assignment made by this
Assignment.

EXHIBIT E TO PURCHASE AND SALE AGREEMENT

 

Page E-1

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4. Further Assurances. Assignor shall promptly execute and deliver to Assignee
any additional instrument or other document which Assignee reasonably requests
to evidence or better effect the assignment contained herein.

5. Counterparts. This Assignment may be executed in any number of counterparts
and by each Party on a separate counterpart or counterparts, each of which when
so executed and delivered shall be deemed an original and all of which taken
together shall constitute but one and the same instrument.

6. Governing Law. This Assignment shall be deemed to be an agreement made under
the laws of the state where the Hotel is located and for all purposes shall be
governed by and construed in accordance with such laws.

7. Binding Effect. This Assignment shall be binding upon and inure to the
benefit of each of the Parties and its successors and assigns.

8. Warranty of Signers. Each individual executing and delivering this Assignment
on behalf of a Party hereby represents and warrants to the other Party that such
individual has been duly authorized and empowered to make such execution and
delivery.

IN WITNESS WHEREOF, the Parties have caused this Assignment to be executed and
delivered by their respective representatives, thereunto duly authorized, as of
the date first above written.

[SIGNATURES ON FOLLOWING PAGE]

 

EXHIBIT E TO PURCHASE AND SALE AGREEMENT

Page E-2

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ASSIGNOR:    

AEW SBCO SEATTLE, LLC, a Delaware limited liability company

    By:  

 

    Name:  

 

    Title:  

 

ASSIGNEE:    

[***Insert Assignee name/jurisdiction/entity]

    By:  

 

    Name:  

 

    Title:  

 

 

EXHIBIT E TO PURCHASE AND SALE AGREEMENT

Page E-3

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[Form of]

GENERAL ASSIGNMENT AND ASSUMPTION AGREEMENT

THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Assignment”) is made as of
                    ,     , 200    , by and between AEW SBCO SEATTLE, LLC, a
Delaware limited liability company (“Assignor”), and ***, a ***, (“Assignee”).

RECITALS

A. Assignor has entered into that certain Agreement of Purchase and Sale (the
“Purchase Agreement”), dated as of                     , 20    , between
Assignor, as “Seller,” and Assignee, {or, if initial Buyer has assigned the
Agreement, insert name of initial Buyer***}, as “Buyer,” for purchase of the
land described in Exhibit A attached hereto, together with the improvements,
fixtures, furnishings, equipment, inventories and other real and personal
property comprising the hotel known as the Homewood Suites Seattle, in Seattle,
Washington (the “Hotel”). {If initial Buyer has assigned Agreement: Buyer has
assigned all of its rights, title and interest under the Agreement to Assignee.}

B. In conjunction with the sale and purchase of the Hotel, the Purchase
Agreement obligates Assignor to assign to Assignee certain intangible rights
with respect to the Hotel and Assignee to assume all of Assignor’s obligations
with respect thereto, subject to the terms and conditions set forth in this
Assignment.

NOW, THEREFORE, in consideration of the foregoing, and of the mutual covenants
and conditions herein contained, the parties hereto (together, the “Parties,”
and each sometimes a “Party”) hereby act and agree as follows:

1. Assignment. Assignor hereby assigns, sets over and transfers to Assignee all
of Assignor’s rights, if any, in, under and to the following:

(a) Marks. Each trademark, trade name, service mark, logo or other proprietary
name, number (including telephone numbers), address, mark or design which is
assignable in conjunction with a sale of the Hotel and which is used by Seller
exclusively in connection with the Hotel, together with all the good will
associated with the use of such name, mark or design in connection the Hotel
(altogether, the “Marks”).

(b) Permits. Each permit, certificate, license or other form of authorization or
approval issued by a government agency or authority and legally required for the
proper operation and use of the Hotel (including, without limitation, any
certificates of occupancy with respect to the Hotel improvements, elevator
permits, conditional use permits, zoning variances and business licenses, but
excluding liquor licenses) to the extent transferable with the Hotel
(altogether, the “Permits”).

(c) Warranties. Each written guaranty, warranty or other such obligation from
any contractor, manufacturer or vendor, with respect to any of the

 

EXHIBIT F TO PURCHASE AND SALE AGREEMENT

Page F-1

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Hotel Improvements, furnishings, fixtures or equipment, to the extent assignable
in connection with a sale of the Hotel (altogether, the “Warranties”).

(d) Records. On-site records, files and other written materials pertaining to
the operation of the Hotel (“Records”).

(e) Plans and Studies. Seller’s rights in and to the plans and specifications
for the Hotel improvements (“Plans”) and any studies, analyses, reports and
other written materials pertaining to the condition of the Hotel improvements
and the Hotel Parcel.

(f) Reservations. Each reservation, commitment or agreement for the use of guest
rooms, conference rooms, dining rooms or other facilities in the Hotel, to the
extent pertaining to periods from and after the date hereof (“Reservations”).

(g) Accounts. The account receivable for each person who is a guest at the Hotel
for the room night immediately preceding the date hereof (the “Guest Accounts”).

2. Assumption of Obligations and Liabilities by Assignee. Assignee hereby
assumes all of the obligations and liabilities of Assignor accruing from and
after the date hereof with respect to each of the Marks, Permits, Warranties,
Records, Plans, Reservations and Guest Accounts.

3. No Impairment of Purchase Agreement Provisions. Nothing contained in this
Assignment shall be deemed to limit, waive or otherwise derogate from any
warranty, representation, covenant or indemnification made in the Purchase
Agreement by either Party, or to waive or abrogate any limits on liability
specified in the Purchase Agreement, and none of such provisions in the Purchase
Agreement shall be deemed to have merged into the assignment made by this
Assignment.

4. Further Assurances. Assignor shall promptly execute and deliver to Assignee
any additional instrument or other document which Assignee reasonably requests
to evidence or better effect the assignment contained herein.

5. Counterparts. This Assignment may be executed in any number of counterparts,
each of which when so executed and delivered shall be deemed an original and all
of which taken together shall constitute but one and the same instrument.

6. Governing Law. This Assignment shall be deemed to be an agreement made under
the laws of the state where the Hotel is located and for all purposes shall be
governed by and construed in accordance with such laws.

7. Binding Effect. This Assignment shall be binding upon and inure to the
benefit of, respectively, Assignor and Assignee and their respective successors
and assigns.

 

EXHIBIT F TO PURCHASE AND SALE AGREEMENT

Page F-2

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8. Warranty of Signers. Each individual executing and delivering this Assignment
on behalf of Assignor hereby represents and warrants to Assignee that such
individual has been duly authorized and empowered to make such execution and
delivery.

IN WITNESS WHEREOF, Assignor has caused this Assignment to be executed and
delivered by their respective representatives, thereunto duly authorized, as of
the date first above written.

 

ASSIGNOR:    

AEW SBCO SEATTLE, LLC, a Delaware limited liability company

    By:  

 

    Name:  

 

    Title:  

 

ASSIGNEE:    

[***Insert Assignee name/jurisdiction/entity]

    By:  

 

    Name:  

 

    Title:  

 

 

EXHIBIT F TO PURCHASE AND SALE AGREEMENT

Page F-3

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[Form of]

TRANSFEROR’S CERTIFICATION OF NON-FOREIGN STATUS

Section 1445 of the Internal Revenue Code provides that a transferee of a U.S.
real property interest must withhold tax if the transferor is a foreign person.

[Use if Seller is a disregarded entity: For U.S. tax purposes (including section
1445), the owner of a disregarded entity (which has legal title to a U.S. real
property interest under local law) will be the transferor of the property and
not the disregarded entity. The disregarded entity is [                    ]
(the “Disregarded Entity”). [                    , a                     ]
(“Transferor”), is the sole owner of the Disregarded Entity. To inform
                    , a                      (“Transferee”), that withholding of
tax under Section 1445 of the Internal Revenue Code of 1954, as amended (the
“Code”), will not be required upon the transfer of certain real property to
Transferee by the Disregarded Entity, the undersigned hereby certifies the
following on behalf of Transferor:]

[Use if Seller is not a disregarded entity: To inform                     , a
                     (“Transferee”), that withholding of tax under Section 1445
of the Internal Revenue Code of 1954, as amended (the “Code”), will not be
required upon the transfer of certain real property by [                    , a
                    ] (“Transferor”), the undersigned hereby certifies the
following on behalf of Transferor:]

1. Transferor is not a foreign corporation, foreign partnership, foreign trust,
or foreign estate (as those terms are defined in the Code and the Income Tax
Regulations promulgated thereunder);

2. Transferor is not a disregarded entity as defined in §1.1445-2(b)(2)(iii);

3. Transferor’s U.S. employer identification number is [                    ];
and

4. Transferor’s office address is [                                         ].

Transferor understands that this Certification may be disclosed to the Internal
Revenue Service by Transferee and that any false statement contained herein
could be punished by fine, imprisonment, or both.

Under penalty of perjury the undersigned declares that he or she has examined
this Certification and to the best of his/her knowledge and belief it is true,
correct and complete, and the undersigned further declares that he/she has
authority to sign this document on behalf of Transferor.

 

EXHIBIT G TO PURCHASE AND SALE AGREEMENT

Page G-1

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Dated: ____________ ____, 2010

 

[       ], a   [  

 

  ]

 

By:  

 

Name:

 

Title:

 

 

EXHIBIT G TO PURCHASE AND SALE AGREEMENT

G-2

--------------------------------------------------------------------------------

FURTHER EXCEPTIONS

TO

SELLERS’ WARRANTIES AND REPRESENTATIONS

The following conditions, events or facts constitute exceptions to Sellers’
Warranties and Representations set forth in Section 5.1 of this Agreement:

NONE.

EXHIBIT H TO PURCHASE AND SALE AGREEMENT

--------------------------------------------------------------------------------

[INTENTIONALLY OMITTED]

EXHIBIT I TO PURCHASE AND SALE AGREEMENT

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SCHEDULE OF CONTRACTS

 

1.    SERVICE CONTRACTS    {See Attached Schedule J-1}    2.    EQUIPMENT LEASES
   {See Attached Schedule J-2}   

EXHIBIT J TO PURCHASE AND SALE AGREEMENT

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SCHEDULE OF ENVIRONMENTAL REPORT AND EXISTING SURVEY

 

A. Environmental Report:

{Identify each report by title, consultant, job number and date}

 

B. Existing Survey:

{Identify survey by surveying firm, individual certifying surveyor, job number
and date}

EXHIBIT K TO PURCHASE AND SALE AGREEMENT

--------------------------------------------------------------------------------

SCHEDULE OF EXISTING LOAN DOCUMENTS

 

1. Deed of Trust Note

 

2. Deed of Trust

 

3. Completion Guaranty Agreement

 

4. Guaranty of Recourse Obligations

 

5. Environmental Indemnity Agreement

 

6. Assignment of Leases, Rents and Profits

 

7. Assignment of Contracts, Licenses, Permits, Agreements, Warranties and
Approvals

 

8. Renovation Escrow Agreement

 

9. Replacement Reserve Agreement

 

10. Consent, Subordination and Recognition Agreement

 

11. Patriot Act Certificate of Borrower’s Authorized Person

 

12. Deposit Account Control Agreement

 

13. Restricted Account Agreement

EXHIBIT L TO PURCHASE AND SALE AGREEMENT

--------------------------------------------------------------------------------

LIST OF INSURANCE POLICIES

The following insurance coverages are provided for Homewood Suites Seattle under
the Hotel Manager’s insurance program . All policy terms are 12/31/09 -
12/31/10.

 

  •  

General Liability; Phoenix Insurance Company (Travelers)

 

  •  

Automobile; Charter Oak Fire Insurance Company (Travelers)

 

  •  

Excess/Umbrella Liability; National Union Fire Insurance Company of Pittsburgh,
PA (Chartis/AIG)

 

  •  

Excess/Umbrella Liability; Fireman’s Fund Insurance Company

 

  •  

Crime; Philadelphia Indemnity Insurance Company

 

  •  

Excess Crime; National Union Fire Insurance Company of Pittsburgh, PA
(Chartis/AIG)

 

  •  

Employment Practices and Fiduciary Liability; Philadelphia Indemnity Insurance
Company

EXHIBIT M TO PURCHASE AND SALE AGREEMENT