Exhibit 10.3

 

Conformed Copy

 

PURCHASE AND SALE AGREEMENT

BY AND BETWEEN

 

MARRIOTT INTERNATIONAL, INC.

 

and

 

WSRH HOLDINGS, LLC,

 

Dated as of April 27, 2005

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TABLE OF CONTENTS

 

          Page

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ARTICLE 1.

   DEFINITIONS    1

Section 1.1

   Certain Defined Terms    1

Accounting Firm

   1

Accounting Period

   1

Affiliate

   2

Ancillary Agreements

   2

Business Day

   2

Business Plan Side Letter

   2

Capital Expenditures

   2

Closing Interest Rate

   2

Code

   2

Commercially Reasonable Efforts

   2

Consent

   3

Contract

   3

Control

   3

CTF

   3

CTF Ancillary Agreements

   3

CTF Disclosure Schedules

   3

CTF Selling Entity

   3

CTF’s Knowledge

   3

Debt

   3

Employee Benefit Plan

   4

Encumbrance

   4

Environmental Law

   4

Equity Interests

   4

ERISA

   4

ERISA Affiliate

   5

GAAP

   5

Governmental Authority

   5

Governmental Authorization

   5

Hotel

   5

Hotel Interests

   5

Hotel Management Agreements

   5

Intellectual Property

   5

Intercompany Debt

   5

Intercreditor Claims Side Letter

   5

Interest Holder

   5

IRS

   6

Law

   6

Leased Real Property

   6

Leasehold Interest

   6

Leases

   6

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Legal Proceeding

   6

Lien

   6

Manager Intellectual Property

   6

Marriott’s Closing Deliveries

   6

Marriott/CTF Hotel Management Agreements

   6

Marriott’s Accounting Practices

   6

Marriott’s Knowledge

   7

Marriott Material Contract

   7

Material Contract

   7

Miscellaneous Operating Supplies

   7

Order

   7

Ordinary Course of Business

   8

Organizational Documents

   8

Owned Real Property

   8

Permits

   8

Permitted Encumbrances

   8

Person

   8

Personal Property

   9

PIP Expenditures

   9

Property

   9

Property Improvement Plans

   9

Property Tax

   9

Purchaser Material Adverse Effect

   9

Purchaser’s Closing Deliveries

   9

Purchaser’s Knowledge

   9

REOC Side Letter

   9

Disclosure Schedules

   10

Subsidiary

   10

Target

   10

Target Sale

   10

Tax or Taxes

   10

Tax Return

   10

Taxing Authority

   10

Title Company

   10

Transfer Tax

   10

Working Capital

   10

Section 1.2

   Table of Definitions.    12

ARTICLE 2.

   THE TRANSACTIONS    13

Section 2.1

   Transactions.    13

Section 2.2

   Certain Information.    15

Section 2.4

   Debt.    15

Section 2.5

   Intercompany Debt.    15

Section 2.6

   Property Improvement Plan Expenditures.    15

 

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ARTICLE 3.

   PURCHASE PRICE ADJUSTMENTS AND CLOSING    16

Section 3.1

   Purchase Price.    16

Section 3.2

   Deposit.    16

Section 3.3

   Estimated Working Capital, Capital Expenditure and PIP Expenditure
Adjustments.    16

Section 3.4

   Post-Closing Adjustments.    17

Section 3.5

   Currency of Payments    18

Section 3.6

   Certain Transaction Costs.    19

Section 3.7

   Structural and Environmental Consultants.    19

Section 3.8

   Purchase Price Allocation.    19

Section 3.9

   Closing.    20

ARTICLE 4.

  

INTENTIONALLY DELETED

   22

ARTICLE 5.

  

PASS THROUGH REPRESENTATIONS AND WARRANTIES OF MARRIOTT

   22

Section 5.1

   Organization, Existence; Records and Actions.    23

Section 5.2

   Authority, Approval and Enforceability.    23

Section 5.3

   Capitalization.    24

Section 5.4

   Lines of Business.    24

Section 5.5

   No Conflicts; Consents.    24

Section 5.6

   Balance Sheets.    25

Section 5.7

   Absence of Certain Changes.    26

Section 5.8

   Litigation and Related Matters.    27

Section 5.9

   Compliance with Laws; Governmental Authorizations.    28

Section 5.10

   Contracts and Commitments.    28

Section 5.11

   Hotel Properties.    29

Section 5.12

   Intellectual Property.    29

Section 5.13

   Employee Benefits.    29

Section 5.14

   Insurance.    29

Section 5.15

   Leases.    31

Section 5.16

   Taxes.    31

Section 5.17

   Limitations    33

ARTICLE 5A

  

MANAGER REPRESENTATIONS AND WARRANTIES

   33

Section 5.1A

   Organization, Existence; Records and Actions.    34

Section 5.2A

   Authority, Approval and Enforceability.    34

Section 5.3A

   Capitalization.    34

Section 5.4A

   Lines of Business.    35

Section 5.5A

   No Conflicts; Consents.    35

Section 5.6A

   Balance Sheets.    36

Section 5.7A

   Absence of Certain Changes.    36

Section 5.8A

   Litigation and Related Matters.    37

 

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Section 5.9A

   Compliance with Laws; Governmental Authorizations.    37

Section 5.10A

   Contracts and Commitments.    37

Section 5.11A

   Hotel Properties.    38

Section 5.12A

   Intellectual Property.    38

Section 5.13A

   Employee Benefits.    38

Section 5.14A

   INTENTIONALLY OMITTED.    39

Section 5.15A

   Leases.    39

Section 5.16A

   Taxes.    39

Section 5.17A

   Inaccuracy of Pass Through Representations    41

Section 5.18A

   Representations and Warranties with respect to Renaissance Vinoy    41
ARTICLE 6.   

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

   41

Section 6.1

   Organization.    41

Section 6.2

   Authority.    41

Section 6.3

   No Conflict; Required Filings and Consents.    42

Section 6.4

   Financing.    43 ARTICLE 7.   

COVENANTS.

   43

Section 7.1

   Management of the Hotels Prior to the Closing.    43

Section 7.2

   Conduct of Business of the Targets Prior to the Closing.    43

Section 7.3

   Risk of Loss.    43

Section 7.4

   Covenants Regarding Information.    45

Section 7.5

   Non-Waiver of Attorney-Client Privilege.    46

Section 7.6

   Notification of Certain Matters.    47

Section 7.7

   Resignations.    47

Section 7.8

   Confidentiality.    47

Section 7.9

   Consents and Estoppels.    48

Section 7.10

   Governmental Consents, Filings and Closing Deliveries.    49

Section 7.11

   Public Announcements.    49

Section 7.12

   Marriott Undertaking.    49

Section 7.13

   Security Deposits in the form of Letters of Credit    50 ARTICLE 8.   

TAX MATTERS.

   50

Section 8.1

   Tax Returns.    50

Section 8.2

   Marriott’s Obligations.    51

Section 8.3

   Purchaser’s Obligations.    51

Section 8.4

   Straddle Period.    51

Section 8.5

   Contests.    52

Section 8.6

   Cooperation on Tax Matters.    52

Section 8.7

   Price Adjustment.    53

Section 8.8

   After-Tax Basis.    53

Section 8.9

   Elections.    53

 

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Section 8.10

   Survival.    53 ARTICLE 9.   

TITLE COMMITMENT AND SURVEY REVIEW PROCESS; CONDITIONS TO CLOSING.

   53

Section 9.1

   Title Commitment and Survey Review Process    53

Section 9.2

   Lack of Consent for Certain Leasehold Interests    57

Section 9.3

   General Conditions.    58

Section 9.4

   Conditions to the Obligations of Marriott.    59 ARTICLE 10.   

INDEMNIFICATION

   60

Section 10.1

   Pass-Through Representations.    60

Section 10.2

   Survival of Representations, Warranties and Indemnities.    61

Section 10.3

   Indemnification by Marriott.    61

Section 10.4

   Indemnification by the Purchaser.    62

Section 10.5

   Procedures.    62

Section 10.6

   Limits on Indemnification.    64

Section 10.7

   Tax Matters.    66

Section 10.8

   Assignment of Claims.    66

Section 10.9

   Disclaimer of Implied Warranties.    66

ARTICLE 11.

   DEFAULT, REMEDIES.    67

Section 11.1

   Purchaser’s Default.    67

Section 11.2

   Marriott’s Default.    67

ARTICLE 12.

   TERMINATION.    68

Section 12.1

   Termination.    68

Section 12.2

   Effect of Termination.    69

ARTICLE 13.

   GENERAL PROVISIONS.    69

Section 13.1

   Fees and Expenses.    69

Section 13.2

   Amendment and Modification.    69

Section 13.3

   Waiver.    70

Section 13.4

   Notices.    70

Section 13.5

   Interpretation.    71

Section 13.6

   Restriction on Acquisitions.    71

Section 13.7

   Entire Agreement.    71

Section 13.8

   No Third-Party Beneficiaries.    72

Section 13.9

   Governing Law.    72

Section 13.10

   Submission to Jurisdiction.    72

Section 13.11

   Personal Liability.    73

Section 13.12

   Assignment; Successors.    73

Section 13.13

   Currency    73

Section 13.14

   No Brokers.    73

 

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Section 13.15

   Severability.    73

Section 13.16

   Counterparts.    73

Section 13.16

   Facsimile Signature.    74

 

 

Exhibits and Schedules

 

Schedule 1.1(a)

   Ancillary Agreements

Schedule 1.1(b)(i)

   Unopened Operating Supplies

Schedule 1.1(b)(ii)

   Miscellaneous Operating Supplies Budget

Schedule 1.1(c)

   Marriott's Knowledge

Schedule 2.1(a)

   Hotels (Fee Sale)

Schedule 2.1(b)

   Hotels (Lease Assignment & Sale)

Schedule 2.6

   Preliminary PIPs

Schedule 3.3(a)

   Target North American Capex

Schedule 3.3(b)

   Initial Required Working Capital

Schedule 3.6

   Transfer Taxes

Schedule 5.5A

   Conflicts

Schedule 5.9A

   Compliance with Laws

Schedule 5.10A

   Marriott Material Contracts

Schedule 5.16A

   Taxes

Schedule 9.4(b)

   Purchaser's Closing Deliveries

Schedule 9.5(c)

   Marriott's Closing Deliveries

Exhibit A

   Purchase and Sale Agreement – CTF/Marriott

Exhibit B

   Business Plan Side Letter

Exhibit C

   Hotel Management Agreements (US)

Exhibit D

   Intercreditor Claims Side Letter

Exhibit E

   REOC Side Letter

 

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PURCHASE AND SALE AGREEMENT

 

THIS PURCHASE AND SALE AGREEMENT is made as of the 27th day of April, 2005 by
and between MARRIOTT INTERNATIONAL, INC. (“Marriott”), and WSRH HOLDINGS, LLC, a
Delaware limited liability company, together with rights of assignment to
Affiliates (the “Purchaser”).

 

 

R E C I T A L S

 

(A) Pursuant to the terms of a Purchase and Sale Agreement dated April 27, 2005
(the “CTF Agreement”), a copy of which (as it relates to the Hotels which are
the subject of this Agreement) is attached hereto as Exhibit A, Marriott is the
contract purchaser of certain land, improvements and personal property
consisting of hotels in the United States and Europe, which are currently owned
by CTF Holdings Ltd., a British Virgin Islands company and its subsidiaries
(collectively, “CTF”), all of which are currently operated and managed by
Marriott under the Renaissance brand.

 

(B) The CTF Agreement grants to Marriott the right to designate persons or
entities to whom CTF has then agreed it will convey the Hotels as described in
the CTF Agreement. The parties hereto intend that Marriott shall designate the
Purchaser as a Designee under the CTF Agreement and Marriott shall cause CTF to
sell to the Purchaser as a Designee of Marriott, and the Purchaser shall acquire
directly from CTF, all of the interests as described in Recital (C) below.

 

(C) Marriott shall designate the Purchaser (or, at Purchaser’s election,
entities designated by Purchaser, each a “Designee”) with regard to eight (8) of
those hotels through (i) the sale of the land, improvements and personal
property comprising six (6) of such hotels listed on Schedule 2.1(a); and (ii)
the assignment of leasehold interests in two (2) of such hotel listed on
Schedule 2.1(b), together with the personal property with respect thereto, and
the Purchaser wishes to acquire such interests.

 

NOW, THEREFORE, in consideration of the mutual covenants herein contained and
other good and valuable consideration, the mutual receipt and legal sufficiency
of which are hereby acknowledged, Marriott and the Purchaser hereby agree as
follows:

 

ARTICLE 1. DEFINITIONS.

 

Section 1.1. Certain Defined Terms. For purposes of this Agreement:

 

“Accounting Firm” means BDO Seidman, LLP, or such other accounting firm as CTF
and Marriott shall agree. Marriott shall obtain Purchaser’s consent of the
selection of any accounting firm other BDO Seidman.

 

“Accounting Period” means the four (4) week accounting periods having the same
beginning and ending dates as Marriott’s four (4) week accounting periods,
except that an Accounting Period may occasionally contain five (5) weeks when
necessary to conform Marriott’s accounting system to the calendar.

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“Affiliate,” with respect to any specified Person, means any other Person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such specified Person.

 

“Ancillary Agreements” means the agreements listed on Schedule 1.1(a) and any
other Closing instruments or other transfer documents necessary or desirable to
effectuate the transactions contemplated hereby, including (i) those required
under the Laws of any local jurisdiction, (ii) all other agreements, documents
and instruments required to be delivered by any party pursuant to this
Agreement, and (iii) any other agreements, documents or instruments entered
into, at or prior to Closing in connection with this Agreement or the
transactions contemplated hereby including without limitation, the
acknowledgement to be signed and delivered by Purchaser as described in Section
12.12(a) of the CTF Agreement and the Intercreditor Claims Side Letter,
excluding, however, the Hotel Management Agreement, the REOC Side Letter and the
Business Plan Side Letter.

 

“Business Day” means any day that is not a Saturday, a Sunday or other day on
which banks are required or authorized by Law to be closed in The City of New
York.

 

“Business Plan Side Letter” means the side letter to be executed at Closing by
Purchaser as Owner and Marriott as Manager of the Hotels acquired by Purchaser
hereunder substantially in the form attached hereto as Exhibit B.

 

“Capital Expenditures” means any expenditure for property, plant, fixtures,
furnishings and equipment located at a Hotel, as determined to be a capital
expenditure under GAAP and the Uniform System of Accounts.

 

“Closing Interest Rate” means 3 month Libor (as quoted by Bloomberg Service for
3-month Libor or on any successor or substitute page of such service reasonably
satisfactory to CTF and the parties at approximately 10:00 a.m., New York City
time on any date of determination) plus 150 basis points, calculated on the
basis of a 365 day calendar year.

 

“Code” means the Internal Revenue Code of 1986, as amended through the date
hereof, and any Treasury Regulations promulgated thereunder.

 

“Commercially Reasonable Efforts” means the efforts that a prudent Person
desirous of achieving a result would use in similar circumstances to achieve
such result expeditiously and on commercially reasonable terms, without the
expenditure of funds; provided, however, (x) that in connection with its
assumption of the Renaissance Chicago Hotel, the Purchaser’s obligation is to
provide a party to become the assignee which meets the financial requirements
for acceptance by the landlord as set forth in the lease, and (y) that in
connection with its assumption of the Renaissance Vinoy Hotel, “Commercially
Reasonable Efforts” shall mean providing a party to be the assignee which (i)
has a minimum net worth of $6.5 million (including its investment in the
Renaissance Vinoy Hotel) and (ii) has a good business reputation which it shall
be deemed to have if such assignee is controlled by, or under common control
with, Walton Street Capital, L.L.C.

 

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“Consent” means any approval, consent, ratification, permission, waiver or
authorization (including any Governmental Authorization).

 

“Contract” means any legally binding written or oral agreement, contract,
subcontract, lease, understanding, option, warranty, purchase order, license,
sublicense, insurance policy or commitment or undertaking of any nature related
to any Hotel or Hotel Interest.

 

“Control,” including the terms “controlled by” and “under common control with,”
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, as trustee or executor, as general partner or
managing member, by contract or otherwise, including the ownership, directly or
indirectly, of securities having the power to elect a majority of the board of
directors or similar body governing the affairs of such Person.

 

“CTF” shall mean CTF Holdings Ltd. and those of its Subsidiaries identified as
Selling Entities and listed on Schedule 2.1(a), (b) and (c) of the CTF
Agreement.

 

“CTF Ancillary Agreements” shall mean the agreements listed on Schedule 1.1(a)
of the CTF Agreement and any other Closing instruments or other transfer
documents necessary or desirable to effectuate the transactions contemplated
thereby, including (i) those required under the Laws of any local jurisdiction,
(ii) all other agreements, documents and instruments required to be delivered by
CTF pursuant to the CTF Agreement, and (iii) any other agreements, documents or
instruments entered into, at, or prior to Closing, in connection with the CTF
Agreement or the transactions contemplated thereby.

 

“CTF Schedule” means each of those schedules referenced in, and attached to, the
copy of the CTF Agreement attached hereto. Each such CTF Schedule is considered
part of the CTF Agreement attached hereto. All disclosures made on any CTF
Schedule are deemed to be made for all CTF Schedules, to the extent it is
apparent or can be reasonably inferred from the nature and contents of the CTF
Schedule that such disclosure is applicable to other CTF Schedules.

 

“CTF Selling Entity” shall mean CTF and those entities identified as Selling
Entities on Schedules 2.1(a)-(e) of the CTF Agreement.

 

“CTF’s Knowledge” or derivations thereof, means the knowledge of any officer or
employee of CTF whose name is listed on Schedule 1.1(c) of the CTF Agreement
with respect to a particular fact or other matter of which such individual is
actually aware.

 

“Debt” means any debts for borrowed money (including any interest, fees and
penalties incurred in connection therewith) outstanding of any Target or that is
secured by a lien on any Hotel Interest.

 

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“Employee Benefit Plan” means an “employee benefit plan” as such term is defined
in Section 3(3) of ERISA or any other employee benefit plan, program or
arrangement, including, any pension, profit sharing, 401(k), deferred
compensation, retirement, bonus, incentive, stock option, stock appreciation
right, stock purchase or restricted stock plan, severance or “golden parachute”
arrangement, or any other compensation, perquisite, welfare or fringe benefit
plan, program or arrangement providing for benefits for, or for the welfare of,
any or all of the current or former employees, leased employees, independent
contractors, officers, directors, managers, managing members, members, trustees
or partners of any of the Targets or the beneficiaries of such persons.

 

“Encumbrance” means any lien, pledge, hypothecation, charge, mortgage, security
interest, encumbrance, claim, infringement, interference, option, right of first
refusal, right of first offer, preemptive right or community property interest
(including any restriction on the voting of any security, any restriction on the
transfer of any security or other asset, any restriction on the receipt of any
income derived from any asset, any restriction on the use of any asset and any
restriction on the possession, exercise or transfer of any other attribute of
ownership of any asset); provided, however, that the term Encumbrance shall not
be deemed to include (a) Liens for current Property Taxes not yet due and
payable or that are being contested in good faith, in each case, and for which
adequate accruals have been established on the books of the CTF Selling Entity
or Target, as applicable, (b) Liens for assessments or other governmental
charges established by statutory regulations, ordinance or other Law or, Liens
of landlords, carriers, warehousemen, mechanics or materialmen securing
obligations incurred in the Ordinary Course of Business that are not yet due and
payable or due but not delinquent or being contested in good faith, (c) Liens
incurred in CTF’s Ordinary Course of Business in connection with workers’
compensation, unemployment insurance and other types of social security or to
secure the performance of tenders, statute, obligations, surety and appeal
bonds, bids, leases, government contracts, performance and return of money bonds
and similar obligations, (d) purchase money or similar security interests
granted in connection with the purchase or capital or operating lease of
equipment or supplies used in the operation of a Hotel, and (e) Permitted
Encumbrances.

 

“Environmental Law” means any Law applicable to a Target or in connection with
the operation of a Hotel that relates to or otherwise imposes liability or
standards of conduct concerning the prevention and control of air, water and
ground pollution or otherwise relating to the manufacture, processing,
generation, distribution, use, treatment, storage, disposal, cleanup, transport
or handling of pollutants.

 

“Equity Interests” means all CTF’s and/or a CTF Selling Entity’s stock,
membership units, partnership interest and other equity interests, as
applicable, of a Target.

 

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

 

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“ERISA Affiliate” means any corporation or other entity which is treated as a
single employer with any of the Targets pursuant to the provisions of section
414(b), (c), (m) or (o) of the Code.

 

“GAAP” means United States generally accepted accounting principles as in effect
on the date hereof.

 

“Governmental Authority” means any United States or non-United States federal,
national, supranational, state, provincial, local or similar government,
governmental, regulatory or administrative authority, branch, agency or
commission or any court, tribunal, or arbitral or judicial body.

 

“Governmental Authorization” means any: (a) permit, license, certificate,
franchise, permission, variance, clearance, registration, qualification or
authorization issued, granted, given or otherwise made available by or under the
authority of any Governmental Authority or pursuant to any applicable Law; or
(b) right under any Contract with any Governmental Authority.

 

“Hotel” means each hotel identified on Schedules 2.1(a)-(c) to be transferred
pursuant to this Agreement.

 

“Hotel Interests” means the Fee Properties, Leasehold Properties and Equity
Interests being transferred by CTF to the Purchaser in accordance with this
Agreement, the Ancillary Agreement, and the CTF Agreement.

 

“Hotel Management Agreements” means each of the agreements to be executed at
Closing, by Designee, as Owner, and Marriott as Manager, of each of the Hotels
acquired by Purchaser hereunder substantially in the form attached hereto as
Exhibit C.

 

“Intellectual Property” means all proprietary rights of every kind and nature,
including copyrights, trademarks, tradenames, all applications for any of the
foregoing, and any license or agreements granting rights related to the
foregoing that relate to the business being conducted on each Hotel property, to
the extent of CTF’s right, title and interest therein, other than any software
licenses used by the Targets or CTF Selling Entities in the corporate offices of
CTF; provided, however, in no event shall Intellectual Property include Marriott
or Renaissance brand concepts or the Manager Intellectual Property.

 

“Intercompany Debt” means any debts outstanding of any Target to CTF or any of
its Affiliates.

 

“Intercreditor Claims Side Letter” means the side letter to be executed at
Closing by Marriott, Sunstone Hotel Investors, Inc., and the Purchaser hereunder
substantially in the form attached hereto as Exhibit D.

 

“Interest Holder” means any Target or, with respect to the Hotels being
transferred pursuant to the Fee Sale or the Lease Agreement & Sale, any CTF
Selling Entity that conveys a Hotel Interest at the Closing.

 

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“IRS” means the Internal Revenue Service of the United States.

 

“Law” means any statute, law, ordinance, regulation, rule, code, executive
order, injunction, judgment, decree or order of any Governmental Authority.

 

“Leased Real Property” means the real property leased by a CTF Selling Entity or
Target in each case, as tenant, together with, to the extent so leased, the
Hotel and all other structures, facilities or improvements currently or
hereafter located therein or thereon, and all easements, licenses, rights and
appurtenances relating to the foregoing.

 

“Leasehold Interest” means the leasehold interest created under the applicable
Leases for the Leased Real Property.

 

“Leases” means the leases identified on Schedule 2.1(b).

 

“Legal Proceeding” means any action, suit, litigation, arbitration, proceeding
(including any civil, criminal, administrative, investigative or appellate
proceeding), hearing, inquiry, audit, examination or investigation commenced,
brought, conducted or heard by or before, or otherwise involving, any court or
other Governmental Authority or any arbitrator or arbitration panel.

 

“Lien” shall mean a charge against or interest in property to secure payment of
a debt or performance of a liability, whether granted voluntarily or
involuntarily, including without limitation, any security interest, pledge,
mortgage or charge, except for any charge against or interest to secure any
purchase money obligation or any operating or capital leases of personal
property.

 

“Manager Intellectual Property” means “Intellectual Property” as defined in the
Hotel Management Agreements.

 

“Marriott’s Closing Deliveries” means the Ancillary Agreements and the other
documents to be delivered at Closing by Marriott as set forth in Schedule
9.5(c).

 

“Marriott/CTF Hotel Management Agreements” means each of the agreements, as
amended, between CTF or its Subsidiaries and Marriott or its Affiliates,
providing for the management and operation of the Hotels including (i) the
Master Management Agreement dated August 5, 1993, between CTF Hotel Holdings,
Inc. and Renaissance Hotel Operating Company, (ii) the HPI Master Management
Agreement dated as of June 30, 1995 between Renaissance Hotel Group N.V. and
Hotel Property Investments (B.V.I.) Ltd., (iii) the Agreement dated April 23,
1999 by and among Marriott International, Inc., Renaissance Hotel Operating
Company, Renaissance Hotel Group N.V., CTF Hotel Holdings, Inc., and Hotel
Property Investments (B.V.I.), Ltd., and (iv) the Hotel-specific agreements set
forth on Schedules 2.1(a)-(c) of the CTF Agreement.

 

“Marriott’s Accounting Practices” means the primary accounting treatment
(including the implicit contractual interpretations underlying such treatment)
that Marriott has given a particular issue on the books and records of the
Hotels, notwithstanding any objection that CTF has previously raised to such
practices. For

 

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avoidance of doubt, “Marriott’s Accounting Practices” shall not include the
rights or position that CTF has reserved or asserted, but rather only the
accounting treatment actually implemented by Marriott on the books and records
of the Hotels.

 

“Marriott’s Knowledge,” or derivations thereof, means in Marriott’s capacity as
manager of the Hotels under the Marriott/CTF Hotel Management Agreements, the
knowledge of any officer or employee of Marriott whose name is listed on
Schedule 1.1(c), and, even if not named on Schedule 1.1(c), each employee of
Marriott at each Hotel who holds the position at such Hotel of general manager
and those attorneys of Venable LLP who have given substantial legal attention to
the representation of Marriott in connection with the transactions contemplated
by this Agreement, subject, however, to the attorney-client privilege.

 

“Marriott Material Contract” means any Contract relating to any Hotel or Hotel
Interest to which Marriott is a party or entered into or administered by
Marriott on behalf of CTF other than (a) Contracts entered into in the Ordinary
Course of Business being those Contracts involving (i) an annual expense of less
than $50,000 or (ii) a space lease of less than 3,000 square feet, (b) group
sales Contracts, or (c) other Hotel Contracts with guests or customers.

 

“Material Contract” means (a) any Contract that (i) involves an annual expense
to an Interest Holder of more than $100,000 (or more than $100,000 on an
annualized basis) or (ii) is not terminable upon ninety (90) days notice or less
with damages or penalties of such termination not exceeding $10,000, other than
(A) those Contracts to which Marriott is a party, (B) those Contracts entered
into or administered by Marriott on behalf of CTF, (C) the Leases, and (D) the
Debt, and (b) any Contract between an Interest Holder and an Affiliate of CTF
other than those identified on Schedule 5.10 of the CTF Agreement.

 

“Miscellaneous Operating Supplies” means items in unopened packages in the
following categories: (i) linen; (ii) china, glass and silver; (iii)
miscellaneous serving equipment; (iv) uniforms; and (v) guest supplies. The
value of Miscellaneous Operating Supplies for the Hotels shall be conclusively
established as (1) the total of the amounts set forth on Schedule 1.1(b)(i),
less (2) the amounts set forth thereon with respect to any Hotels not
transferred by CTF to Purchaser at the Closing, plus (3) the amount, if any, by
which (a) the expense for Miscellaneous Operating Supplies for the Hotels
incurred in the aggregate at the Hotels transferred by CTF to Purchaser or
Purchaser’s Designees at the Closing, from January 1, 2005 to the Effective Date
exceeds (b) the total of the amounts set forth on Schedule 1.1(b)(ii) with
respect to such transferred Hotels (with the amounts set forth on Schedule
1.1(b)(ii) to be pro rated with respect to the Hotels if the Effective Date is
other than June 17, 2005, based on the number of actual days elapsed from
January 1, 2005).

 

“Order” means any: (a) order, judgment, injunction, edict, decree, ruling,
pronouncement, determination, decision, opinion, verdict, sentence, subpoena,
writ or award issued, made, entered, rendered or otherwise put into effect by or
under the authority of any court, administrative agency or other Governmental
Authority or any arbitrator or arbitration panel; or (b) Contract with any
Governmental Authority entered into in connection with any Legal Proceeding.

 

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“Ordinary Course of Business” means such action is consistent with the past
practices of such Person and is taken in the ordinary course of the normal
day-to-day operations of such Person.

 

“Organizational Documents” mean: (a) if a corporation, the articles or
certificate of incorporation and the bylaws; (b) if a general partnership, the
partnership agreement and any statement of partnership; (c) if a limited
partnership, the limited partnership agreement and the certificate of limited
partnership; (d) if a limited liability company, the articles of organization
and operating agreement; (e) any other charter or similar document adopted or
filed in connection with the creation, formation or organization of such entity;
(f) the minutes of each meeting or written consents of the board of directors or
other governing body, any committee of the board of directors or other governing
body, general partners, limited partners, managers or managing members, members,
trustees, stockholders or equity holders (g) all equity holders’ agreements,
voting agreements, voting trust agreements, joint venture agreements,
registration rights agreements or other agreements or documents relating to the
organization, management or operation of such entity, or relating to the rights,
duties and obligations of the equity holders of such entity; and (h) any
amendment or supplement to any of the foregoing.

 

“Owned Real Property” means the real property owned by a CTF Selling Entity or
Target together with the Hotel and all other structures, facilities or
improvements currently or hereafter located thereon, and all easements,
licenses, rights and appurtenances relating to the foregoing.

 

“Permits” means, with respect to each Hotel property as applicable, all
transferable or assignable permits (including liquor licenses), certificates of
occupancy, operating permits, sign permits, development rights and approvals
granted by any Governmental Authority or by any private party pursuant to any
applicable declaration of covenants or like instrument, instrument, licenses,
warranties and guarantees held by each Interest Holder which relate exclusively
to each Hotel, as applicable.

 

“Permitted Encumbrances” means with respect to each Hotel property, (a) all
matters shown on or disclosed by the Title Materials which are (i) not objected
to by the Purchaser pursuant to Section 9.1, or (ii) are deemed to have been
accepted or waived by the Purchaser pursuant to Section 9.1, provided, however,
that Permitted Encumbrances shall in no circumstance include Encumbrances
arising from any Debt, (b) Hotel Management Agreements, (c) applicable zoning
regulations and ordinances and other governmental laws, ordinances and
regulations provided the same do not prohibit or impair in any material respect
use of each Hotel property as currently operated, and (d) the occupancy rights
of transient lodging guests as transient lodging guests.

 

“Person” means an individual, corporation, partnership, limited liability
company, limited partnership, syndicate, person, trust, association,
organization or other entity, including any Governmental Authority, and
including any successor, by merger or otherwise, of any of the foregoing.

 

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“Personal Property” means all fixtures, furnishings, artwork, systems, equipment
and items of personal property (other than cash) used in the operation of a
Hotel or attached or appurtenant to a Hotel and intangible property with respect
to the Hotel and Manager Intellectual Property.

 

“PIP Expenditures” means expenditures of CTF and its Subsidiaries, in respect of
Property Improvement Plans listed on Schedule 3.2(b) of the CTF Agreement.

 

“Property” means the Leasehold Interests, the Owned Real Property and the
Personal Property.

 

“Property Improvement Plans” shall have the meaning given to that term in
Section 2.6 of this Agreement.

 

“Property Tax” means real estate or personal property taxes, assessments and
water and sewer charges.

 

“Purchaser Material Adverse Effect” means any event, change, circumstance,
effect or state of facts that is materially adverse to the ability of the
Purchaser to perform its obligations under this Agreement or the Ancillary
Agreements to which it will be a party or to consummate the transactions
contemplated hereby or thereby.

 

“Purchaser’s Closing Deliveries” means the Ancillary Agreements and the other
documents to be delivered at Closing by the Purchaser as set forth in Schedule
9.4(b).

 

“Purchaser’s Knowledge”, or derivations thereof, means the knowledge of Jeffrey
Quicksilver, Stephen Sotoloff, Semi Salmi and John Pappas, and those attorneys
of Pircher, Nichols and Meeks who have given substantive legal attention to the
representation of Purchaser in connection with the transactions contemplated by
this Agreement, subject, however, to the attorney-client privilege.

 

“REOC Side Letter” means the side letter to be executed at Closing by Purchaser
as Owner and Marriott as Manager of the Hotels acquired by Purchaser hereunder
substantially in the form attached hereto as Exhibit E.

 

“Representatives” means the officers, employees, agents, accountants, advisors,
bankers and other representatives of a Person.

 

“Sales, Use & Occupancy Tax Audit Liabilities” means any liabilities resulting
from audits by any Governmental Authority for sales, use and occupancy taxes
arising from the operations of the Hotels located with the United States,
regardless of the period in which such liabilities arose. For the avoidance of
doubt, Sales, Use & Occupancy Tax Audit Liabilities shall exclude any Transfer
Tax liability.

 

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“Schedule” means each of those schedules referenced in, and attached to, this
Agreement. Each such Schedule is considered part of this Agreement. All
disclosures made on any Schedule are deemed to be made for all Schedules, to the
extent that it is apparent or can be reasonably inferred from the nature and
contents of the Schedule that such disclosure is applicable to other Schedules.

 

“Subsidiary” or “Subsidiaries” of any Person means any other Person controlled
by such Person, directly or indirectly, through one or more intermediaries.

 

“Target” means those entities identified as such on Schedule 2.1(a) and 2.1(b),
and any Subsidiaries of those entities.

 

“Target Sale” means the transfer of the Equity Interests of the Targets by CTF
in accordance with Section 2.1(a) and 2.1(b).

 

“Tax or Taxes” shall mean any and all taxes, charges, fees, levies or other
assessments, including but not limited to income, gross receipts, excise, real
or personal property, sales, withholding, social security, retirement,
unemployment, occupation, use, goods and services, service use, license, value
added, capital, net worth, payroll, profits, withholding, franchise,
registration, transfer and recording taxes, fees and charges, and any other
taxes, assessment or similar charges whether computed on a separate,
consolidated, unitary, combined or any other basis; and such term shall include
any interest whether paid or received, fines, penalties or additional amounts
attributable to, or imposed upon, or with respect to, any such taxes, charges,
fees, levies or other assessments.

 

“Tax Return” shall mean any report, return, document, questionnaire, declaration
or other information or filing required to be supplied to any Taxing Authority
with respect to Taxes, including information returns, any documents with respect
to or accompanying payments of estimated Taxes, any claim or request for
refunds, or any documents with respect to or accompanying requests for the
extension of time in which to file any such report, return, document,
questionnaire, declaration or other information.

 

“Taxing Authority” means, with respect to any Tax, the IRS or any other United
States or non-United States Governmental Authority that imposes such Tax,
including any state, county, local, provincial or foreign government, or any
subdivision or taxing agency thereof (including a United States possession).

 

“Title Company” means First American Title Insurance Company.

 

“Transfer Tax” means any stamp, registration, real or personal property
transfer, sales, use, documentary, notary fee or other similar Tax or charge
related to the Fee Sale, Target Sale or the Lease Assignment & Sale.

 

“Working Capital” means the amount determined in accordance with Marriott’s
Accounting Practices to the extent used in the determination of any particular
item, being: (a) the sum of all (i) cash in Hotel operating accounts and petty
cash, (ii) accounts receivable (net of (xx) all write-offs determined by
Marriott made through the end of the

 

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Accounting Period prior to the Closing, and (yy) a reduction equal to 3% of the
trailing thirteen Accounting Period average of non-credit card receivables),
(iii) inventories of food and beverages and, under certain circumstances, goods
for sale at retail (but “inventories” shall in no event include furniture or
Miscellaneous Operating Supplies), (iv) prepaid expenses, (v) deposits (whether
classified as current or otherwise), (vi) prepaid Taxes and Taxes receivable
(excluding any United States federal, state, local, and foreign income taxes,
which are addressed in Article 8 of this Agreement), and (vii) Miscellaneous
Operating Supplies; minus (b) the sum of all: (1) accounts payable and other
current payables, (2) accrued payroll, benefits, and related expenses (including
bonuses), (3) accrued operating liabilities, (4) advance and security deposits
from customers and others, (5) unearned rental income, (6) Taxes payable
excluding any United States federal, state, local, and foreign income taxes
(which are addressed in Article 8 of this Agreement), (7) security deposits paid
by tenants as to leases of space in the Hotels in effect on the Effective Date,
(8) rent from leases of space in the Hotels received on or before the Effective
Date, to the extent allocable to any period after the Effective Date (and
accordingly, rents paid before the Effective Date for the month in which the
Effective Date occurs will be accounted for in this clause (b), based on the
number of days in such month after the Effective Date), and (9) one-half of the
room revenue of each Hotel acquired by Purchaser at the Closing in respect of
the room night that begins on the Effective Date and ends on the day after (it
being understood that the revenue for such room shall be for the account of the
CTF Selling Entity). Excluded in all cases from the definition of “Working
Capital” are (A) deferred Taxes resulting from an accounting convention to
reflect timing differences between book and tax accounting, (B) the current and
the long-term portion of any Debt and any accrued interest thereon, and (C)
Management Fees and Reimbursables, as defined in the CTF Agreement. For the
avoidance of doubt, no accruals shall be made to Working Capital with respect to
(i) any Sales, Use & Occupancy Tax Audit Liabilities, and (ii) any claims by or
liabilities to employees in respect of any employment practices of the Hotels
located within the United States (the “Employment Practices Liabilities”). The
calculation of “Taxes payable”, as part of Working Capital, includes a pro rata
share of the property taxes for the tax year in which the Effective Date occurs
(as estimated by Marriott), based on the number of days in the tax year on or
before the Effective Date, as well as any prior tax year, to the extent that
such property taxes allocable to the period on or before the Effective Date have
not been paid prior to the Effective Date. Similarly, the calculation of
“prepaid Taxes”, as part of Working Capital, includes a pro rata share of the
property taxes for the tax year in which the Effective Date occurs (as estimated
by Marriott), based on the number of days in the tax year after the Effective
Date, but only the extent that such property taxes allocable to the period after
the Effective Date have been paid prior to the Effective Date.

 

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Section 1.2. Table of Definitions. The following terms have the meanings set
forth in the pages set forth below:

 

Definition

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

   Location

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

Adjusted Estimated Total Working Capital

   18

Adjusted Purchase Price

   17

Adjusted Working Capital

   17

Alternate Target Sale

   14

Assumed Liabilities

   15

Balance Sheet

   26

Casualty Loss

   44

Claims Deadline

   66

Closing

   21

Closing Allocated Price

   21

Closing Date

   22

Contest

   53

CTF

   2

CTF Agreement

   2

CTF Level Data

   27

De Minimus Amount

   66

Deposit

   17

Designee

   2

Dispute Notice

   65

Effective Date

   22

Employment Practices Liabilities

   12

Estoppel Certificates

   50

Excluded Liabilities

   27

Fee Property

   14

Fee Sale

   14

Group A Hotels

   44

Group B Hotels

   45

Hotel Level Data

   26

Indemnification Limit

   66

Indemnified Party

   63

Indemnifying Party

   64

Information

   49

Initial Required Working Capital

   18

Intercompany Payables

   51

Lease Assignment & Sale

   15

Leasehold Property

   15

Liability Accruals

   51

Losses

   62

Mandatory Consent Hotel

   58

Marriott

   2

Marriott Covenants

   62

Marriott Created Liens

   37

Marriott Indemnified Parties

   63

Mirror Claim

   61

New Title Matters

   57

Objection Period

   55

Pass Through Covenants

   61

Pass Through Representations

   61

 

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PIP Amount

   16

Potential Contributor

   67

Pre-Closing Tax Period

   52

Preliminary Allocated Price

   16

Pro Forma

   55

Proposed Conveyance Documents

   58

Purchaser

   2

Purchaser Indemnified Parties

   62

Purchaser’s Objections

   55

Purchaser’s Out of Pocket Costs

   22

Real Properties

   54

Representatives

   46

Requirements

   55

SD Letters of Credit

   51

Straddle Period

   52

Structural and Environmental Consultants

   20

Surveyor

   54

Termination Date

   70

Third Party Claim

   63

Threshold Amount

   66

Title Cure Period

   56

Title Materials

   54

Tradenames

   30

Transaction

   16

Unadjusted Purchase Price

   17

Vinoy

   17

 

ARTICLE 2. THE TRANSACTIONS

 

Section 2.1. Transactions. Upon the terms and subject to the conditions of this
Agreement, at the Closing:

 

(a) With respect to the Hotels listed on Schedule 2.1(a), Marriott shall cause
CTF to (i) sell, transfer, convey and deliver the Owned Real Property, (ii)
sell, transfer, convey and deliver all of the Personal Property and Intellectual
Property, and (iii) assign or otherwise transfer and deliver the Permits and
Contracts related to such Hotels (for each Hotel, the “Fee Property”) to the
entity designated by Purchaser and the entity so designated by Purchaser shall
purchase and assume the Fee Properties from CTF (the “Fee Sale”); provided,
however, at Purchaser’s election (to be made no later than May 19, 2005) in lieu
of any specific Fee Sale, Marriott shall cause CTF to sell, transfer, convey and
deliver all of the Equity Interests of a Target to Purchaser, and Purchaser
shall purchase such Equity Interest of the Target from CTF in the same manner as
set forth in Schedule 2.1(c) of the CTF Agreement, and such sale shall be deemed
a Target Sale (each, an “Alternate Target Sale”);

 

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(b) With respect to the Hotels listed on Schedule 2.1(b), Marriott shall, as to
the Renaissance Vinoy (to the extent of Marriott’s interest) and as to all
Hotels on Schedule 2.1(b), cause CTF to (i) assign or otherwise transfer and
deliver the Leasehold Interests, (ii) sell, transfer, convey and deliver all of
the Personal Property and Intellectual Property, and (iii) assign or otherwise
transfer and deliver the Permits and Contracts related to such Hotels (for each
Hotel, the “Leasehold Property”) to the entity designated by Purchaser and the
entity so designated by Purchaser shall assume and purchase the Leasehold
Properties from CTF (the “Lease Assignment & Sale”);

 

(c) With respect to the Target listed on Schedule 2.1(b), Marriott shall and
shall cause CTF, to sell, transfer, convey and deliver all of the Equity
Interests in The Vinoy Club L.C. to the entity designated by Purchaser;

 

(d) In connection with the Fee Sale and the Lease Assignment & Sale, the entity
wholly-owned (directly or indirectly) by Purchaser designated by Purchaser as
the “Designee” (as that term is used in the CTF Agreement) of any such Fee Sale
or Lease Assignment & Sale, shall assume and pay, discharge, perform or
otherwise satisfy from and after the Closing Date (with effect as of the
Effective Date) the following liabilities and obligations of the CTF Selling
Entity relating to the ownership and operation of the applicable Hotel (the
“Assumed Liabilities”);

 

(i) all liabilities referred to in clause (b) of the definition of “Working
Capital” to the extent taken into account in the calculation of Working Capital;
and

 

(ii) all liabilities and obligations arising from all Contracts other than
Material Contracts not disclosed by CTF or Marriott Material Contracts not
disclosed by Marriott, Leases, Permitted Encumbrances and Permits subsequent to
the Closing Date (with effect as of the Effective Date); to the extent that a
Marriott Material Contract is not disclosed, and notwithstanding any other
provision herein or in the CTF Agreement to the contrary, such non-disclosure
shall not affect its inclusion as a Deduction under the applicable Hotel
Management Agreements and Marriott shall be liable to Purchaser for damages,
calculated as (i) the difference, if any, between the costs of Purchaser
pursuant to the undisclosed Contract and the costs which Purchaser would have
paid under a contract based on then current commercially reasonable terms or the
same product or services, and (ii) pre-Closing costs of such undisclosed
Contract not otherwise taken into account in the calculation of Working Capital.

 

provided, however, it is understood and agreed by the parties that neither the
Purchaser nor any Designee shall assume any Debt; and further provided that
nothing in this Section 2.1(d) shall be construed as limiting the Purchaser’s
recourse in respect of a representation, warranty or covenant contained in this
Agreement in accordance with Article 10. As used and described in this Agreement
and in the CTF Agreement, a Designee must be either the Purchaser or a
wholly-owned subsidiary of Purchaser.

 

(e) Marriott shall cause CTF to convey to Purchaser in connection with the
Esmeralda Hotel, the trade name and/or trademark “Esmeralda;” provided,

 

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however, the use of the tradename and/or trademark “Esmeralda” shall be subject
to the Term, rights and limitations set forth on the Hotel Management Agreement
to be executed between Purchaser and/or Purchaser’s Designee and Marriott at
Closing.

 

The transactions set forth in this Section 2.1 are collectively referred to as
the “Transaction.”

 

Section 2.2. Certain Information.

 

(a) Schedule 2.1(a) sets forth, for each Hotel being transferred through the Fee
Sale: (i) the name and location of the Hotel, (ii) the name and jurisdiction of
organization of the CTF Selling Entity, (iii) the name and jurisdiction of
organization of the Target(s), (iv) the portion of the Unadjusted Purchase Price
(the “Preliminary Allocated Price”) allocated to the Fee Property; and (v) the
permitted range of the Closing Allocated Price.

 

(b) Schedule 2.1(b) sets forth, for each Hotel being transferred through the
Lease Assignment & Sale: (i) the name and location of the Hotel; (ii) the name
and jurisdiction of organization of the CTF Selling Entity; (iii) title, date
and parties to the Leases; (iv) the Preliminary Allocated Price allocated to the
Leasehold Property; and (v) the permitted range of the Closing Allocated Price.

 

(c) Schedule 2.1(b) sets forth for the Club Vinoy LC (i) the name of the entity,
and (ii) the name and jurisdiction of organization of the entity.

 

Section 2.3. INTENTIONALLY OMITTED

 

Section 2.4. Debt. Schedule 2.4 of the CTF Agreement sets forth certain Debt as
of the date of this Agreement. Marriott shall cause CTF to take such action,
such that, at the Closing, all outstanding Debt shall have been repaid, defeased
or otherwise released.

 

Section 2.5. Intercompany Debt. Marriott shall cause CTF to take such action
such that at the Closing, there shall be no Intercompany Debt outstanding in
respect of any Target. Accordingly, all currently outstanding Intercompany Debt
with respect to each Target shall have been repaid, cancelled, forgiven,
contributed to capital or otherwise extinguished (the method of extinguishing
such Debt to be selected by CTF) such that no Target shall remain liable for the
payment of any principal, interest, fees or penalties on any Intercompany Debt
or bear any cost with respect to such extinguishment, and such that neither the
Purchaser nor any Designee shall be liable for any Taxes in connection
therewith. Marriott shall cause CTF to use Commercially Reasonable Efforts to
minimize the liability for Taxes to any Target in connection with canceling the
Intercompany Debt.

 

Section 2.6. Property Improvement Plan Expenditures. Purchaser shall fund a
total of $32,441,000 less, however, the PIP Expenditures of CTF prior to Closing
(the “PIP Amount”) for the preliminary Property Improvement Plans for the
Hotels, as further described on Schedule 2.6 attached hereto. Each wholly-owned
Designee of

 

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Purchaser formed to take title to a Hotel shall either fund the PIP Amount at
Closing, or will have the option to fund the PIP Amount as costs are incurred
provided that Marriott receives a guaranty of the PIP Amount from the Purchaser,
or, at Purchaser’s election, from another entity reasonably satisfactory to
Marriott. Purchaser may replace a guarantee of the PIP Amount as to any
individual Hotel through substitution of a cash escrow sufficient to complete
the PIP work.

 

Section 2.7. INTENTIONALLY OMITTED.

 

ARTICLE 3. PURCHASE PRICE ADJUSTMENTS AND CLOSING

 

Section 3.1. Purchase Price. In consideration for the Transaction, the Purchaser
shall pay into escrow at the Closing an aggregate purchase price of U.S.
$590,400,000 (the “Unadjusted Purchase Price”), which includes those amounts to
be paid to Marriott in its capacity as an owner of an equity interest in
Renaissance Vinoy Resort and Golf Club (“Renaissance Vinoy”) as shall be
adjusted as provided in this Article 3, Section 7.3 and Section 9.2 (the
“Adjusted Purchase Price”).

 

Section 3.2. Deposit. Upon execution of this Agreement, Purchaser shall deposit
into escrow $25,000,000 (the “Deposit”) with the Title Company. The Deposit will
be non-refundable, other than (a) for termination based on a failure of a
condition to Purchaser’s obligation to consummate the Transaction, or (b) as
otherwise expressly provided in this Agreement. If the Transaction is
consummated, the Deposit, and interest earned thereon, will be applied against
the Purchase Price.

 

Section 3.3. Estimated Working Capital, Capital Expenditure and PIP Expenditure
Adjustments.

 

(a) Section 3.2 of the CTF Agreement contemplates that, and provides a procedure
for, CTF and Marriott to determine certain items defined and described therein
as the Estimated Total Working Capital, the Estimated North American Capex and
the Estimated PIP Expenditures. Marriott and Purchaser shall recalculate the
Estimated Total Working Capital (including Seller Working Capital only to the
extent the same is both (x) properly allocated to Hotel Working Capital
utilizing the definition of Working Capital set forth in this Agreement and, (y)
an item that, in Marriott’s Ordinary Course of Business, would be accounted for
on the Hotel’s books and records) utilizing the definition of Working Capital
set forth in this Agreement, for all purposes and calculations contemplated in
this Section 3.3(a). At Closing, the Unadjusted Purchase Price shall be: (i)
increased (or decreased) by the amount by which the Estimated Total Working
Capital applicable to the Hotels is more (or less) than $0; (ii) increased (or
decreased) by the amount by which the Estimated North American Capex applicable
to the Hotels is more (or less) than the Target North American Capex Amount as
set forth on Schedule 3.3(a); and (iii) increased by the amount of the Estimated
PIP Expenditures.

 

(b) At Closing Purchaser shall provide to Marriott for each Hotel an amount
equal to the Adjusted Working Capital for such Hotel. Adjusted Working Capital
shall mean, for each Hotel, the amounts, if any, by which (i) the Adjusted
Estimated

 

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Total Working Capital for such Hotel, is less than (ii) the Initial Required
Working Capital for such Hotel. If the Adjusted Estimated Total Working Capital
for any Hotel is less than $0, Purchaser shall fund the amount of such Adjusted
Estimated Total Working Capital deficit at Closing and shall also fund the
applicable Initial Required Working Capital for such Hotel. If the Adjusted
Estimated Total Working Capital for any Hotel is less than $0 and the Initial
Required Working Capital for such Hotel is less than $0, and if the Adjusted
Estimated Total Working Capital is more negative than the Initial Required
Working Capital, Purchaser shall fund the amount equal to the difference between
the negative Adjusted Estimated Total Working Capital and the Negative Initial
Required Working Capital at Closing. Adjusted Estimated Total Working Capital
shall mean, for each Hotel, the amount equal to (i) the Estimated Total Working
Capital for such Hotel, minus (ii) the value of the Miscellaneous Operating
Supplies included in the calculation of the Estimated Total Working Capital for
such Hotel. Initial Required Working Capital shall mean, with respect to each
Hotel, the amount set forth on Schedule 3.3(b) for such Hotel. Marriott and
Purchaser shall recalculate the Estimated Total Working Capital, utilizing the
definition of Working Capital set forth in this Agreement for all purposes and
calculations contemplated in this Section 3.3(b).

 

(c) The receivable from the City of Palm Springs, California to the Esmeralda
Hotel in connection with the relocation of the 17th hole on the Esmeralda Hotel
golf course shall be reclassified from Seller’s Working Capital to Hotel Working
Capital as defined in the CTF Agreement and such item shall be treated as part
of Working Capital under this Agreement. The right to such receivable shall be
assigned to Purchaser.

 

Section 3.4. Post-Closing Adjustments.

 

(a) Section 3.3 of the CTF Agreement contemplates that, and provides a procedure
for, CTF and Marriott to arrive at certain post-closing adjustments to the
Unadjusted Purchase Price as at the Effective Date. Marriott, with the
assistance of Purchaser, shall prepare and submit the Closing Statements defined
and described in Section 3.3 of the CTF Agreement including information and
documentation provided by Purchaser within sufficient time in order for Marriott
to comply with the time requirements set forth in Section 3.3 of the CTF
Agreement. Upon receipt of the final report from the Accounting Firm as
described in Section 3.3(c) of the CTF Agreement, either Marriott shall cause
CTF to transfer to Purchaser, or Purchaser shall transfer to CTF, as the case
may be, by wire transfer as described in Section 3.3(c) of the CTF Agreement,
the difference between the adjustments made to the Unadjusted Purchaser Price
(pursuant to Section 3.3(a) above) and the amounts set forth in the Closing
Statements (as may be adjusted by the Accounting Firm), along with the interest
as set forth in Section 3.3(c) of the CTF Agreement. If such adjustments would
require Purchaser to pay an amount in excess of $1,000,000 to CTF, and if
Purchaser believes in good faith that at least $500,000 of such amount would be
payable to Purchaser by Marriott pursuant to the provisions of subsection (b)
below, and provides Marriott with reasonably detailed support of such assertion,
then Marriott shall pay, on behalf of Purchaser, fifty percent (50%) of such
disputed amount, subject to reconciliation and further adjustment pursuant to
the provision of subsection (b) below.

 

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(b) If Purchaser or Marriott believes that the post-closing adjustments to the
Unadjusted Purchase Price made pursuant to subsection (a) above are not
consistent with the definition of Working Capital used under this Agreement,
such party shall provide notice to the other party of such assertion within
thirty (30) days of receipt of the final report described in subsection (a)
above (an “Objection Notice”). If either or both parties provide such notice,
Marriott and Purchaser shall attempt to recalculate the Unadjusted Purchase
Price utilizing the definition of Working Capital set forth in this Agreement.
If Marriott and Purchaser are unable to agree upon such recalculation within
thirty (30) days of receipt of an Objection Notice, the parties shall provide
the Accounting Firm with a copy of this Agreement and instruct the Accounting
Firm to make a recalculation of the post-closing adjustments to the Unadjusted
Purchase Price based on the definition of Working Capital used in this Agreement
and not as that term is defined and used in the CTF Agreement, and to provide
the difference, if any, between what Purchaser paid (or received) pursuant to
the procedures described in subsection (a) above, and what the Purchaser would
have paid (or received) had the definition of Working Capital used in this
Agreement been used to calculate the adjustments to the Unadjusted Purchase
Price. The costs of the recalculation by the Accounting Firm shall be borne
equally by Marriott and Purchaser. If the report of the Accounting Firm
determines that Purchaser made an overpayment or received less than should have
been received had the definition of Working Capital in this Agreement been used,
Marriott shall pay Purchaser the amount of such overpayment or the deficit in
the received amount (net of any amounts previously paid by Marriott pursuant to
the terms of the last sentence of subsection (a)), or if the Accounting Firm
determines that Purchaser made an underpayment or received more than should have
been received had the definition of Working Capital in this Agreement been used,
Purchaser shall pay Marriott the amount of such underpayment or the excess of
such overpayment (plus any amounts previously paid by Marriott pursuant to the
terms of the last sentences of subsection (a)).

 

(c) The final reports contemplated by this Section 3.4, being that described in
(a) above if the procedures described in (b) are not used, or that described in
subsection (b) if the procedures described in (b) are used) shall be final and
binding on the parties for all purposes of this Agreement. Solely for purposes
of calculations under the Hotel Management Agreements, it is agreed that
accruals or estimates taken into account in connection with the post-closing
adjustments to the Unadjusted Purchase Price shall not be taken into account for
any purposes under the Hotel Management Agreements (for example, actual bonuses
paid in 2006 relating to 2005 performance may be higher or lower than the bonus
estimates used to calculate the accrual amounts of such bonuses for purposes of
this Agreement). However, payment of amounts relating to pre-closing matters by
the manager of the Hotels shall not effect Purchaser’s rights hereunder to seek
recourse for liabilities and obligations not assumed.

 

Section 3.5. Currency of Payments. Except as otherwise expressly set forth in
this Agreement, all payments to or from CTF or any party shall be made in United
States dollars. All translations from a foreign currency into United States
dollars shall be calculated at the average of the United States dollar closing
buy and sell bids for the subject foreign currency on the Effective Date (as
quoted by Bloomberg Service for Benchmark Currency Rates or on any successor or
substitute page of such service reasonably satisfactory to CTF and the parties
at approximately 10:00 a.m., New York City time on any date of determination),
regardless of the date actually made.

 

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Section 3.6. Certain Transaction Costs.

 

(a) Marriott shall cause CTF to be allocated one-half of the Transfer Taxes
which would be payable if the Hotels were transferred pursuant to the Target
Sale at the Preliminary Allocated Price. Schedule 3.6 sets forth the initial
estimate of the Transfer Taxes made by CTF and the parties hereto to be incurred
in connection with the Fee Sale, Target Sale and Lease Assignment & Sale as well
as the estimated amount thereof to be allocated to CTF and Purchaser. Schedule
3.6 shall be adjusted by CTF and Marriott at the direction of Purchaser from
time-to-time until the Closing to reflect calculations made by the Title Company
based upon the actual amount of Transfer Taxes due and payable in the applicable
jurisdictions as of the Closing Date.

 

(b) Regardless of Law or convention, it shall be the responsibility of Purchaser
to pay or cause to be paid all Transfer Taxes and otherwise complete and file
all Tax Returns in connection therewith in a timely manner. Marriott shall, and
shall cause CTF to, cooperate with Purchaser as reasonably requested by
Purchaser in connection with the preparation and filing of such Tax Returns. The
Unadjusted Purchase Price shall be reduced at Closing by the total amount of
Transfer Taxes allocated to CTF that are actually paid or payable by Purchaser,
and the Preliminary Allocated Price related to each Hotel Interest affected
thereby shall be reduced accordingly.

 

Section 3.7. Structural and Environmental Consultants. Marriott has retained
third party consultants (the “Structural and Environmental Consultants”) to
perform structural and environmental analyses of the Hotels and Marriott has
provided Purchaser with copies of all of the reports and work product prepared
by the Structural and Environmental Consultants with regard to the Hotels.
Marriott shall cause the Structural and Environmental Consultants to provide
letters authorizing the Purchaser and its lenders to rely upon the reports, work
product, representations and warranties provided by the Structural Environmental
Consultants. At Closing, in addition to payment of the Purchase Price, Purchaser
shall reimburse Marriott for the cost of all of the work performed by the
Structural and Environmental Consultants with respect to the Hotels.

 

Section 3.8. Purchase Price Allocation.

 

(a) The parties have agreed upon the amount of the Preliminary Allocated Price
for CTF’s interest in each of the Hotels, which amounts are set forth on
Schedules 2.1(a) and 2.1(b) and which shall include those amounts to be paid to
Marriott in its capacity as an owner of an interest in the Renaissance Vinoy and
Club Vinoy LC as described on Schedule 2.1(b). By written notice to Marriott
given not less than fourteen (14) Business Days prior to the Closing, Purchaser
may modify the Preliminary Allocated Price for any such interest other than the
Preliminary Allocated Price for Marriott’s interest in the Renaissance Vinoy
within the range permitted in Schedules 2.1(a) and 2.1(b), as applicable (each
such Preliminary Allocated Price as modified is the “Closing

 

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Allocated Price”), provided, however, that the total amount of all Closing
Allocated Prices shall at all times equal the Unadjusted Purchase Price, as it
may be adjusted pursuant to the terms of this Agreement. The Closing Allocated
Price of each property shall be delivered to Marriott by the Purchaser two (2)
Business Days prior to Closing, and to the extent such allocations result in a
change in the total amount of Transfer Taxes allocated to CTF as set forth on
Schedule 3.9 of the CTF Agreement, such difference shall be borne by the
Purchaser. In the event of any purchase price adjustment hereunder, Marriott and
Purchaser agree to adjust any previously agreed purchase price allocation to
reflect such purchase price adjustment and to file subsequent Tax Returns
consistent with such agreed allocation.

 

(b) The Purchaser and Marriott agree that the Closing Allocated Price for each
Hotel Interest shall be adjusted to reflect the Adjusted Purchase Price as
determined at the Closing. For each Hotel Interest, the purchase of which is
treated as an asset purchase for United States federal income tax purposes, the
Adjusted Purchase Price, as so adjusted, plus any liabilities attributable to
such Hotel Interest that are liabilities for United States tax purposes, shall
be allocated for federal income tax purposes among the assets acquired thereby
as agreed to by the parties and, if no agreement is reached, as reasonably
determined by each of the parties. Subject to the requirements of applicable
Law, the Purchaser and Marriott and each of their Affiliates, shall file all
Returns, consistent with the Closing Allocated Price adjusted to take into
account purchase price adjustments at the Closing and with any other allocation
that is agreed in respect of a particular Hotel Interest. In the event of any
purchase price adjustment hereunder, Marriott and the Purchaser agree to adjust
any previously agreed allocation to reflect such purchase price adjustment and
to file Tax Returns consistent with such agreed allocation.

 

Section 3.9. Closing.

 

(a) The closing of the Transactions shall take place at a closing (the
“Closing”) to be held at the offices of Gibson, Dunn & Crutcher LLP, 200 Park
Avenue, New York, New York 10166, at 10:00 A.M., or at such other place or
places as CTF, Marriott and Purchaser may agree in writing.

 

(b) The Closing shall occur on June 17, 2005, provided, however, that if the
conditions to Closing of Marriott or Purchaser have not been satisfied as of
that date, or upon notice given by Purchaser not later than June 8, 2005, or by
Marriott no later than June 11, 2005, then the Closing shall occur not later
than June 30, 2005, provided further, however, if all the conditions of both
parties to the Closing have been satisfied, except that CTF shall not have
received the requisite consent pursuant to the Offer and Solicitation to allow
for the release of the liens on the Property securing the Notes, as more fully
set forth in Article 4 of the CTF Agreement and as those terms are described and
defined in the CTF Agreement, and Marriott exercises its one-time option to
postpone the Closing to November 15, 2005 under Section 3.11 of the CTF
Agreement, then the Closing hereunder shall also be postponed until November 15,
2005; provided further still, however, if the Closing with respect to any Hotel
is delayed in accordance with the terms of this Agreement, the Closing for such
Hotel shall occur as soon as practicable following the satisfaction of the
conditions to Closing with respect to such Hotel. The day on which a Closing
takes place is referred to as the “Closing Date.”

 

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(c) If the Closing does not occur by June 30, 2005, because CTF did not receive
the requisite consent as described in Section 3.9(b), and after Purchaser
provides written notice to Marriott no later than July 6, 2005 of Purchaser’s
intention to postpone Closing to November 15, 2005, Marriott elects not to
exercise its one-time option to postpone the Closing to November 15, 2005
pursuant to Section 3.11 of the CTF Agreement and Marriott elects instead to
terminate the CTF Agreement, then Marriott will refund the Deposit and all
interest thereon to Purchaser. In such event if Purchaser is ready, willing and
able to close on June 30, 2005, Marriott shall pay to Purchaser, Purchaser’s Out
of Pocket Costs not to exceed Two Million and No/100 Dollars ($2,000,000).
Failure on the part of Purchaser to notify Marriott on or before July 6, 2005 of
its intention to postpone Closing, shall be deemed Purchaser’s election not to
postpone Closing and to terminate this Agreement in accordance with Article 12
hereof. Purchaser being ready, willing and able to close for the purposes of
this Section 3.9 shall mean that Purchaser shall have (i) satisfied the
condition to Marriott’s obligation to close set forth in Section 9.4(a), (ii)
tendered all of Purchaser’s Closing Deliveries, and (iii) shall have funding
commitments for the payment of the entire Purchase Price such that Purchaser
would have been in a position to pay the entire Purchase Price had the Closing
occurred on June 30, 2005 and all conditions under this Agreement to Purchaser’s
obligations had been satisfied. As used herein, “Purchaser’s Out of Pocket
Costs” means all Purchaser’s third party out-of-pocket costs and expenses,
including, but not limited to, all travel costs and expenses, all amounts
expended by Purchaser for its investigation of the Hotels, including consulting
fees and costs and legal fees and costs, all amounts expended by Purchaser,
including, but not limited to, legal fees and costs, in the negotiation of this
Agreement the CTF Agreement the management agreement with Marriott, and the
other documents and instruments in connection with this transaction, and all
fees and costs (including costs incurred to lock or cap rates of interest) paid
by Purchaser to its lenders and potential lenders, including all amounts
expended as liquidated damages to the lenders.

 

(d) If a Closing occurs after June 17, 2005 with respect to Hotels included in
such Closing:

 

(i) all of the Transactions shall be deemed to be effective as of Marriott’s
most recently ended Accounting Period prior to the Closing Date (for such
Closing, the “Effective Date”);

 

(ii) Purchaser shall pay daily interest on the sum of the Preliminary Allocated
Price of the Hotels from and including the Effective Date but not including the
Closing Date, at a rate equal to the Closing Interest Rate; and

 

(iii) with respect to the Hotels Marriott shall cause CTF to pay to Purchaser
(to the extent the amount in (i) below exceeds (ii) below), or the Purchaser
shall pay to CTF (to the extent the amount in (ii) below exceeds (i) below), as
the case may be, account and pay for the difference between (A) all deposits to
CTF’s bank

 

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accounts arising from Hotel operations from the close of business on the
Effective Date through the Closing Date, and (B) all checks issued, wire
transfers and other disbursements from CTF’s bank accounts arising from Hotel
operations from the close of business on the Effective Date through the Closing
Date, which would have been disbursed by Marriott under the Marriott/CTF Hotel
Management Agreements if the Closing had occurred on the Effective Date (the
“Cash True-Up”).

 

(e) On or before a Closing, (i) the Purchaser shall deliver to the Title Company
by wire transfer to a bank escrow account specified by the Title Company the
amount of the Adjusted Purchase Price for the Hotels included in the Closing
less the amount of Deposit and all interest accrued thereon in immediately
available funds in United States dollars (such amount to be shown on a
settlement memorandum detailing required adjustments to the Unadjusted Purchase
Price) and such other sums required to be paid by Purchaser hereunder, including
Transfer Taxes and other costs of Closing, (ii) Marriott shall deliver to the
Title Company Marriott’s Closing Deliveries provided, however, to the extent
that any of the Marriott Closing Deliveries include what are described as the
Seller Closing Deliveries pursuant to the CTF Agreement, Marriott shall not be
in default hereunder for any default by CTF in failing to provide the Seller
Closing Deliveries as defined in the CTF Agreement (provided, however, any
failure on the part of Marriott to deliver such Seller Closing Deliveries
remains a condition to Purchaser’s obligation to close as set forth in Section
9.5(b)) and all other documents required by the Purchaser of this Agreement or
any Ancillary Agreement to be delivered by Marriott and such other parties as
are necessary and appropriate, each such Deliveries and/or document to be
executed by Marriott and such other parties as are necessary and appropriate and
to be held in escrow by the Title Company, and (iii) the Purchaser shall deliver
to the Title Company the Purchaser’s Closing Deliveries and all other documents
required by the Purchaser of this Agreement or any Ancillary Agreement to be
delivered by the Purchaser, each such Deliveries and/or document to be executed
by the Designees and to be held in escrow by the Title Company following
completion of the matters specified in (e)(i)-(iii) above, and upon the joint
written direction of Marriott and Purchaser, the Adjusted Purchase Price and/or
documents so held in escrow shall be released from escrow and disbursed and/or
distributed to those Persons entitled thereto, including to those Persons
required pursuant to all Ancillary Agreements. In addition, Marriott and
Purchaser shall cooperate to develop procedures for the flow of funds at each
Closing.

 

ARTICLE 4. INTENTIONALLY DELETED

 

ARTICLE 5. PASS THROUGH REPRESENTATIONS AND WARRANTIES OF MARRIOTT

 

Subject to Section 5.17, Marriott represents and warrants, and to the extent
applicable covenants, to the Purchaser, as of the date hereof and as of the
Closing Date, that except as disclosed on the Disclosure Schedules set forth
herein and in the CTF Agreement:

 

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Section 5.1. Organization, Existence; Records and Actions.

 

(a) Schedules 2.1(a)-(e) of the CTF Agreement contain, with respect to each CTF
Selling Entity and Target, a complete and accurate list of the jurisdiction of
formation of such CTF Selling Entity and Target, and any other jurisdictions in
which such Target is qualified to do business as a foreign entity. Each CTF
Selling Entity and each Target is duly incorporated or formed and organized,
validly existing and in good standing under the laws of the jurisdiction in
which each was formed, with corporate power (or otherwise, as applicable) and
authority to conduct its business as it is now being conducted, to own or use
the properties and assets that it purports to own or use. Each Target is duly
qualified to do business as a foreign entity and is in good standing under the
laws of each jurisdiction in which either the ownership or use of the properties
owned or used by it, or the nature of the activities conducted by it, requires
such qualification, except where the failure to be so qualified would not have a
material adverse effect on the business or operations of the Target as presently
conducted.

 

(b) A true and complete copy of the Organizational Documents of each Target,
certified by the Secretary or Assistant Secretary of the Target has been
delivered to Marriott, and remain in full force and effect.

 

(c) The minute books of each Target contain accurate and complete records of all
meetings held, and actions taken by, the board of directors or other governing
body, any committees of the board of directors or other governing body, general
partners, limited partners, managers or managing members, members, trustees,
stockholders or equity holders of such Target.

 

(d) At the Closing, all of the books of account, minute books, equity interest
record books, and other records of a Target (including correspondence related to
the Leases) will be in the possession of such Target. As soon as reasonably
practicable, but in no event more than twenty (20) days following the Closing,
CTF shall physically deliver all such corporate minute books and other corporate
records to Marriott, and no more than sixty (60) days following the Closing, CTF
shall physically deliver all other such books and records to Marriott.

 

Section 5.2. Authority, Approval and Enforceability. The execution, delivery and
performance by CTF and the CTF Selling Entities of the CTF Agreement and the CTF
Ancillary Agreements, as applicable is within the corporate power (or otherwise,
as applicable) of CTF and the CTF Selling Entities and has been duly and validly
authorized by CTF and the CTF Selling Entities, and no other corporate
proceedings (or otherwise, as applicable) on the part of CTF and the CTF Selling
Entities are necessary to authorize the CTF Agreement, the CTF Ancillary
Agreements, or the transactions contemplated hereby and thereby. The CTF
Agreement has been, and the CTF Ancillary Agreements upon their execution at the
Closing will be, validly executed and delivered by CTF and the CTF Selling
Entities, and is or will be a valid and binding obligation of CTF and the CTF
Selling Entities enforceable against CTF in accordance with its respective
terms, subject to applicable bankruptcy, insolvency, moratorium, reorganization
and other similar laws affecting the rights of creditors generally, and to the
exercise of a court’s equitable powers.

 

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Section 5.3. Capitalization.

 

(a) Except as otherwise set forth on Schedules 2.1(a) and 2.1(c) of the CTF
Agreement, the Equity Interests constitute all of the outstanding stock,
membership interests or partnership interests of each Target. All of the
outstanding Equity Interests of each Target have been duly authorized and are
validly issued, fully paid and nonassessable and are owned beneficially and of
record by the CTF Selling Entity set forth on Schedules 2.1(a) and 2.1(c) of the
CTF Agreement. Except as set forth on Schedules 2.1(a) and 2.1(c) of the CTF
Agreement, the CTF Selling Entities will convey all of the outstanding Equity
Interests of each Target to Purchaser at the Closing free and clear of any and
all Encumbrances.

 

(b) Except as set forth on Schedules 2.1(a), (c) and (e) of the CTF Agreement,
there is no: (i) outstanding subscription, option, call, warrant or right
(whether or not currently exercisable or contingent) to acquire any equity
interest or security of any Target; (ii) outstanding security, instrument or
obligation that is or may become convertible into, or exchangeable for, any
equity interest or security of any Target; or (iii) Contract under which any
Target is or may become obligated to sell or otherwise issue any equity interest
or security.

 

(c) All outstanding equity or securities of each Target have been issued in
compliance with (i) applicable Law and (ii) all requirements set forth in
Contracts applicable to the issuance of equity or securities of each Target.

 

(d) Except as set forth on Schedules 2.1(a) and 2.1(c) of the CTF Agreement, no
Target has any Subsidiaries or any direct or indirect ownership interest in any
other Person.

 

(e) No CTF Selling Entity or Target has filed a voluntary petition in bankruptcy
or similar petition, nor has any order, judgment or action been taken or
suffered by any Interest Holder under any insolvency or bankruptcy law.

 

Section 5.4. Lines of Business. No Target is engaged in any business and no
Target located in the United States has, for the two (2) years prior to the date
of this Agreement, engaged in any business other than the ownership and
operation of the business of a Hotel and operations incidental thereto. Each
Target has conducted its business in all material respects in accordance with
its Organizational Documents.

 

Section 5.5. No Conflicts; Consents. Neither the execution and delivery of the
CTF Agreement or the CTF Ancillary Agreements nor the consummation or
performance of any of the transactions contemplated hereby or thereby will,
directly or indirectly (with or without notice or lapse of time):

 

(a) contravene, conflict with, or result in a violation of (A) any provision of
the Organizational Documents of the CTF Selling Entities, or any Target, or

 

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(B) any resolution or action adopted by the board of directors or other
governing body, any committee of the board of directors or other governing body,
general partners, limited partners, managers or managing members, members,
trustees, stockholders or equity holders of the CTF Selling Entities or Target;

 

(b) contravene, conflict with, or result in a violation of, or give any
Governmental Authority or other Person the right to challenge any transaction
contemplated by the CTF Agreement or the CTF Ancillary Agreements;

 

(c) except as set forth on Schedule 5.5 of the CTF Agreement, give any
Governmental Authority or other Person the right to exercise any remedy or
obtain any relief under, any applicable Law or any Order to which the CTF
Selling Entities or any Target, or any material assets owned or used by any
Interest Holder, may be subject;

 

(d) except as set forth on Schedule 5.5 of the CTF Agreement, contravene,
conflict with, or result in a material violation of any of the terms or
requirements of, or give any Governmental Authority the right to revoke,
withdraw, suspend, cancel, terminate, or modify, any material Governmental
Authorization that is held in the name of any Target other than Permits in
relation to the operations of any Hotel;

 

(e) except as set forth on Schedules 2.1(a)-(c) or 5.5 of the CTF Agreement,
contravene, conflict with, or result in a material violation or breach of any
provision of, or give any Person the right to declare a default or exercise any
remedy under, or to accelerate the maturity or performance of, or to cancel,
terminate, or modify, any Material Contract or Lease;

 

(f) result in the imposition or creation of any Encumbrance upon or with respect
to the Property; or

 

(g) except as set forth on Schedules 2.1(a)-(c) or 5.5 of the CTF Agreement,
require any Interest Holder to give any notice to, or obtain any Consent from,
any Person in connection with the execution and delivery of the CTF Agreement or
the consummation or performance of any of the transactions contemplated by the
CTF Agreement or the CTF Ancillary Agreements, except with respect to any
Permits in relation to the operations of any Hotel, and any antitrust Consents
from Governmental Authorities.

 

Section 5.6. Balance Sheets.

 

(a) Attached as Schedule 5.6 of the CTF Agreement is the consolidating unaudited
balance sheet of each Target and its Subsidiaries as at December 31, 2004 (the
“Balance Sheet”). With respect to such Target, the Balance Sheet constitutes a
compilation prepared by the CTF Selling Entities of (i) the assets and
liabilities of each Hotel owned or leased by such Target (excluding the CTF
Level Data) (the “Hotel Level Data”); and (ii) the other assets and liabilities,
if any, of the Target which either (A) are unrelated to the Hotel or (B) have
historically not been accounted for as Hotel Level Data and (C) adjustments made
by CTF to the Hotel Level Data (the “CTF

 

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Level Data”). The Hotel Level Data is maintained by and has been extracted from
the financial information supplied by Marriott under the Marriott/CTF Hotel
Management Agreements. The CTF Level Data has been compiled from the books and
records of each Target maintained by the CTF Selling Entities. The Balance Sheet
fairly presents the financial condition of the Target (and its consolidated
Subsidiaries as appropriate) as at December 31, 2004 in all material respects in
accordance with GAAP, except for any deferred income tax asset or liability and
any explanatory footnotes required under GAAP and except to the extent that any
Hotel Level Data is not complete and accurate.

 

(b) There are no liabilities or obligations of any nature (whether known or
unknown, absolute, contingent, or otherwise) of any Target (excluding (i) any
deferred tax liabilities resulting from an accounting convention to reflect
timing differences between book and tax accounting, (ii) liabilities in respect
of Sales, Use & Occupancy Tax Audit Liabilities, and (iii) liabilities in
respect of employee claims arising out of any Employment Practices Liabilities
(clauses (i)-(iii), collectively being the “Excluded Liabilities”)), except for
liabilities or obligations reflected on or reserved against in the Balance Sheet
with respect to such Target and except to the extent that the Hotel Level Data
is not complete and accurate. Since the date of the Balance Sheet through the
Closing Date, CTF has not caused and will not permit any Target to suffer or
incur any liability except for liabilities (A) pursuant to Contracts which are
not Material Contracts; (B) pursuant to executory Material Contracts disclosed
on Schedule 5.10 of the CTF Agreement; (C) for capital expenditures provided
under Section 2.6 of the CTF Agreement; (D) pursuant to any Lease; (E) that are
Intercompany Debt; (F) that are included within Working Capital for such Target;
or (G) that constitute Excluded Liabilities.

 

(c) Except as set forth on Schedule 7.12 of the CTF Agreement, no Target is the
guarantor of the obligations of a third party. No Target has contractually
indemnified any third party, except in respect of liabilities directly related
to the operations of a Target’s Hotel.

 

(d) Except as set forth on Schedule 2.4 of the CTF Agreement, as of the date of
this Agreement, no Target has any Debt.

 

(e) The CTF Level Data accounting records are maintained by and are in the
possession of the CTF Selling Entities.

 

Section 5.7. Absence of Certain Changes. Except as set forth on Schedules 2.1(a)
and 2.1(c) of the CTF Agreement, since December 31, 2004, no Target has:

 

(a) sold, transferred, or otherwise disposed of any of its Property except in
the Ordinary Course of Business;

 

(b) forgiven or canceled debts or waived any claims or rights of substantial
value other than Intercompany Debt; or

 

(c) incurred any debt or extended any credit other than in the Ordinary Course
of Business, except for Intercompany Debt; or

 

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(d) made any change in any method of accounting or accounting practice or
policy.

 

Section 5.8. Litigation and Related Matters.

 

(a) Except as set forth in Schedule 5.8 of the CTF Agreement, there is no
pending Legal Proceeding that has been commenced by or against any Interest
Holder or related to the Property other than routine litigation related to the
operations of a Hotel which is covered by insurance, and, to CTF’s Knowledge, no
Legal Proceeding has been threatened and no event has occurred or circumstance
exists that may give rise to or serve as a basis for the commencement of any
such Legal Proceeding. CTF has made available to Marriott copies of all
pleadings, correspondence, and other documents relating to each Legal Proceeding
set forth in Schedule 5.8 of the CTF Agreement.

 

(b) Except as set forth in Schedule 5.8 of the CTF Agreement, and with the
further exception that, with respect to the operations of any Hotel, the
following representations are made to CTF’s Knowledge only:

 

(i) there is no Order to which any Interest Holder, any of the assets owned or
used by any Target, is subject;

 

(ii) no Interest Holder is subject to any Order that relates to the business or
Property of any Interest Holder; and

 

(iii) no officer, director, manager, managing member, trustee, partner, agent,
or employee of any Target who is not under the control of Marriott is subject to
any Order that prohibits such Person from engaging in or continuing any conduct,
activity, or practice relating to the business of any Target.

 

(c) Except as set forth in Schedule 5.8 of the CTF Agreement and with the
further exception that, with respect to the operations of any Hotel the
following representations are made to CTF’s Knowledge only:

 

(i) each Target and Interest Holder is in compliance in all material respects
with the terms and requirements of each Order to which it is subject;

 

(ii) no event has occurred or circumstance exists that may constitute or result
in (with or without notice or lapse of time) a violation of or failure to
comply, in any material respect by an Interest Holder, with the terms or
requirements of any Order to which it is subject; and

 

(iii) no Interest Holder has received any written notice from any Governmental
Authority or any other Person regarding any actual, alleged, possible or
potential violation of, or failure to comply with the terms and requirements of
any Order to which it is subject.

 

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Section 5.9. Compliance with Laws; Governmental Authorizations.

 

(a) Each Target is presently or, at the Closing shall be, in compliance in all
material respects with all Governmental Authorizations necessary for the
continued operation of the business of each Target, other than any Permits. Each
Interest Holder has complied with, and is not in violation of, any applicable
Law affecting such Target, excluding any applicable Law relating to the
operations or business of any Hotel.

 

(b) Except as set forth on Schedule 2.1(a)-(d) of the CTF Agreement, the CTF
Selling Entities have not received written notice of any request, application,
proceeding, plan, study or effort including any condemnation proceeding,
proposed change of zoning or other proposed land use regulation or action, which
would have a material adverse effect on any Hotel or on any Permits. The CTF
Selling Entities have not received written notice that the present development,
improvement, use and operation of any Hotel are not in compliance with or
violate any applicable Law or any Permit.

 

Section 5.10. Contracts and Commitments.

 

(a) Other than (i) the Contracts set forth on Schedule 5.10 of the CTF
Agreement; (ii) the Leases; and (iii) the exceptions noted on any Title
Commitments (which shall be governed by Section 9.1 of the CTF Agreement), there
are no Material Contracts that will be binding on any Target, the Purchaser, any
Designee, the Owned Real Property or the Leased Real Property subsequent to the
Closing Date.

 

(b) (i) Schedule 5.10 of the CTF Agreement sets forth a true and complete list
of all Material Contracts, true and complete copies of which have been delivered
to Marriott; (ii) the Material Contracts are in full force and effect and no
Interest Holder, nor to CTF’s Knowledge any other party thereto, is in material
default in the performance of any of its obligations thereunder, nor, to CTF’s
Knowledge, has any event occurred which could give any party thereunder the
right to give a notice of default to any other party; (iii) the Material
Contracts have not been further modified, supplemented or amended in any
material respect; and (iv) all rent, charges or other payments due from any
Interest Holder under any Material Contract, as applicable, have either been
paid through the date of this Agreement or the Closing Date, as applicable, or
provision has been made for the payment thereof as and when the same shall
become due and payable.

 

(c) Except as set forth on Schedule 5.10 of the CTF Agreement, the CTF Selling
Entities have no equity or other economic interest in any supplier, landlord or
lessee of any Target. Except as set forth on Schedule 5.10 of the CTF Agreement,
there are no Contracts between CTF or any Affiliate of CTF, that will be binding
on any Target or the Purchaser subsequent to the Closing Date.

 

(d) To CTF’s Knowledge, no Target and no Person on behalf of a Target has made
any illegal or unrecorded payments, deposits or similar items.

 

(e) All Contracts related to PIP Expenditures have been, and those Contracts
related to PIP Expenditures after the date hereof will be, delivered to
Marriott.

 

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Section 5.11. Hotel Properties.

 

(a) With the exception of Encumbrances which will be satisfied and discharged at
Closing, each Interest Holder, as appropriate, owns the Property free and clear
of any Encumbrances as defined in the CTF Agreement.

 

(b) Except as set forth on Schedule 5.11 of the CTF Agreement, to CTF’s
Knowledge, since January 1, 2003, no Interest Holder has received written notice
by any Governmental Authority of any violation of an Environmental Law or
written notice by any Person of any breach by an Interest Holder of its
obligations under any Contract for the remediation of any condition at a Hotel
under an Environmental Law.

 

Section 5.12. Intellectual Property. To CTF’s Knowledge, Schedule 5.12 of the
CTF Agreement sets forth a true and complete list of all tradenames and
trademarks owned or used by each Interest Holder with respect to each Hotel
property (“Tradenames”). To CTF’s Knowledge, there has been no infringement by
any Interest Holder on the rights or interests of any third party with respect
to the Tradenames, nor any infringement upon any Interest Holder’s rights or
interests in any of the Tradenames. To CTF’s Knowledge, no Interest Holder has
received written notice that it is infringing the rights or interests of any
third party with respect to the Intellectual Property or that any third party is
infringing upon any Interest Holder’s rights or interests in any of the
Intellectual Property. The CTF Selling Entities and their Affiliates will not
retain any rights to the Intellectual Property used in connection with the
operation of a Hotel after the Closing.

 

Section 5.13. Employee Benefits.

 

(a) With respect to those Targets organized within the United States:

 

(i) no Interest Holder or ERISA Affiliate thereof has sponsored, maintained
and/or contributed to Employee Benefit Plan at any time within the past five (5)
years; and

 

(ii) Except as set forth on Schedule 5.13 of the CTF Agreement, no Target has
any employees, except employees under the control of Marriott who are employed
in connection with the business and operations of the Hotels.

 

(b) INTENTIONALLY OMITTED

 

Section 5.14. Insurance.

 

(a) Schedule 5.14 of the CTF Agreement lists:

 

(i) all of the policies of insurance that have been issued covering losses that
may have occurred during the past three (3) insurance policy years (including
the current year) preceding the date of the CTF Agreement to which any Target or
Interest Holder is a party or has been covered excluding any policies placed by
the landlords under the Leases, true and complete copies of which have been
provided to Marriott;

 

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(ii) a list of the policy numbers and names of insurance carriers for two (2)
policy years in addition to those covered by clause (i) above, excluding
casualty policies, excluding property and business interruption policies, as
well as property terrorism policies, and excluding any policies placed by the
landlords under the Leases;

 

(iii) all pending applications for policies of insurance, true and complete
copies of which have been provided to Marriott;

 

(iv) a schedule of all locations insured under the policies listed in subsection
5.14(a)(i) of the CTF Agreement, and

 

(v) all surety bonds placed directly by CTF to which any Target is a party or
has been covered within the current year, true and complete copies of which have
been provided to Marriott.

 

(b) Schedule 5.14 of the CTF Agreement describes any self-insurance arrangement
by or affecting any Target, including any reserves established thereunder.

 

(c) CTF has previously provided to Marriott by line of coverage, by policy year,
for each Interest Holder for each of the three (3) preceding policy years
(including the current policy year):

 

(i) a recent summary of the loss experience under each insurance policy; and

 

(ii) a statement describing the loss experience for all claims that were
self-insured, including the number and aggregate cost of such claims.

 

(d) Except as set forth on Schedule 5.14 of the CTF Agreement, all policies to
which any Target is a party:

 

(i) are valid, outstanding, and enforceable;

 

(ii) will continue in full force and effect until the Closing Date; and

 

(iii) do not provide for any retrospective premium adjustment or other
experience-based liability on the part of any Target.

 

(e) Within the past twelve (12) months, no Target has received (A) any notice of
a material increase in premiums, or (B) any notice of cancellation or any other
indication that any insurance policy is no longer in full force or effect or
that the issuer of any policy is not willing or able to perform its obligations
thereunder.

 

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(f) Each Target has paid all premiums due under each policy to which it is a
party.

 

(g) CTF shall be responsible for the payment of all brokers’ or insurance
service providers’ fees relating to insurance that is terminated at or prior to
Closing with respect to the Hotels.

 

Section 5.15. Leases. Schedules 2.1(b) and (c) of the CTF Agreement set forth a
complete and accurate list of the Leases, including the dates thereof and all
amendments thereto. Except as set forth on Schedule 5.15 of the CTF Agreement,
each Lease is in full force and effect and has not been modified, supplemented,
or amended in any respect and no default has occurred by the respective tenant
and is continuing under the Lease and no event has occurred and is continuing
which with the giving of notice or lapse of time or both would constitute a
default thereunder on the part of the respective tenant. Furthermore, to CTF’S
Knowledge, no default by the respective landlord under each Lease has occurred
and is continuing under such Lease and no event has occurred and is continuing
which with the giving of notice or lapse of time or both would constitute a
default thereunder on the part of such landlord.

 

Section 5.16. Taxes. Except for Taxes the reporting and payment of which is the
responsibility of Marriott pursuant to its management of the Hotel:

 

(a) Except as set forth on Schedule 5.16 of the CTF Agreement, each Target has
duly and timely filed all Tax Returns required to be filed with any Taxing
Authority (or has timely and properly filed valid extensions of time with
respect to the filing thereof) and CTF or CTF’s Affiliates have duly and timely
filed each Tax Return required to be filed with any Taxing Authority by CTF or
CTF’s Affiliates which include or are based upon the assets, operations,
ownership or activities of any of the Targets, including any consolidated,
combined, unitary, fiscal unity or similar Tax Return which includes or is based
upon the assets, operations, ownership or activities of any of the Targets (or
CTF or CTF’s Affiliates have timely and properly filed valid extensions of time
with respect to the filing thereof) and all such Tax Returns were correct and
complete in all material respects. The Targets (or CTF or CTF’s Affiliates on
behalf of the Targets) have paid all Taxes owing with respect to the assets,
ownership, operations and activities of the Targets (whether or not shown on any
Tax Return).

 

(b) There are no Liens on any of the assets of any of the Targets that arose in
connection with any failure (or alleged failure) to pay any Tax, other than
Liens for Taxes not yet due and payable.

 

(c) Except as set forth in Schedule 5.16 of the CTF Agreement, there are no
pending audits, assessments or claims from any Taxing Authority for
deficiencies, penalties or interest against any of the Targets or any of their
assets, operations or activities. Except as set forth in Schedule 5.16 of the
CTF Agreement, there are no pending claims for refund of any Tax of any Target
(including refunds of Taxes allocable to the Targets or with respect to
consolidated, combined, unitary, fiscal unity or similar Tax Returns).

 

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(d) Except as set forth in Schedule 5.16 of the CTF Agreement, there is no
pending investigation or other proceeding by any Taxing Authority for any
jurisdiction where any of the Targets does not file Tax Returns with respect to
a given Tax that may lead to an assertion by such Tax Authority that any of the
Targets is or may be subject to a given Tax in such jurisdiction.

 

(e) Except as set forth on Schedule 5.16 of the CTF Agreement, none of the
Targets has (i) waived any statute of limitations in respect of Taxes or, (ii)
agreed to any extension of time with respect to the filing of any Tax Return of
any of the Targets (including any Tax Return which includes or is based upon
their respective assets, ownership, operations or activities), the payment of
any Taxes of any of the companies, or any limitation period regarding the
assessment of any such Taxes or (iii) received approval to make or agreed to a
change in accounting method or has any application pending with any Taxing
Authority requesting permission for any such change.

 

(f) Except as set forth in Schedule 5.16 of the CTF Agreement, none of the
Targets has elected under Treasury Regulation Section 301.7701-3 to be taxed as
a corporation for United States Tax purposes. Except as set forth in Schedule
5.16 of the CTF Agreement, none of the Targets has elected under Treasury
Regulation Section 301.7701-3 to be taxed as a partnership or disregarded entity
for United States Tax purposes.

 

(g) Except as set forth in Schedule 5.16 of the CTF Agreement, there are no
outstanding rulings or determinations of, or requests for rulings or
determinations with, any state, local or foreign Taxing Authority expressly
addressed to any Target (or to an Affiliate of any Target) that are, or if
issued would be, binding upon any Target.

 

(h) Except as set forth in Schedule 5.16 of the CTF Agreement, none of the
Targets is a party to any Tax allocation, Tax reimbursement or Tax sharing
agreement.

 

(i) Except as set forth in Schedule 5.16 of the CTF Agreement, as to each year
or period for which the relevant limitation period for assessments has not yet
expired as to a given Tax, none of the Targets: (i) has been a member of an
affiliated, consolidated, unitary, fiscal unity, combined or similar Tax group
which files a consolidated, unitary, fiscal unity, combined or similar Tax
Return for purposes of that Tax other than the group of which it currently is a
member; or (ii) has any liability for the Taxes of any Person (other than any of
the members of the group of which it currently is a member) under Regulation
Section 1.1502-6 (or any similar provision of state, local or foreign law), as a
transferee or successor, by contract or otherwise.

 

(j) Except as set forth in Schedule 5.16 of the CTF Agreement, none of the
Targets is a party to any joint venture, partnership or other arrangement or
contract that could be treated as a partnership for US or Non-US Tax purposes.

 

(k) No Selling Entity that is selling a United States real property interest is
a “foreign person” within the meaning of Code Section 1445 (or, if a Selling

 

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Entity is a disregarded entity for US Tax purposes, the recognized Tax owner of
the Selling Entity that is treated as the seller of a real property interest for
US Tax purposes is not a “foreign person” within the meaning of Code Section
1445).

 

(l) Except as set forth in Schedule 5.16 of the CTF Agreement, none of the
Selling Entities or the Targets has given a power of attorney to any Person
(other than a Tax Matters Partner pursuant to Code Section 6231(a)(7)) on any
matters relating to Taxes.

 

(m) Except as set forth in Schedule 5.16 of the CTF Agreement, each asset with
respect to which any Target claims depreciation, amortization or similar expense
for Tax purposes is owned for Tax purposes by such Target under applicable Tax
Law.

 

(n) Except as set forth in Schedule 5.16 of the CTF Agreement, no Target will
have any taxable income or gain as a result of prior intercompany transactions
with Affiliates of the Targets that have been deferred and that will be subject
to Tax as a result of the changes in ownership of each of the Targets as
contemplated by this Agreement.

 

(o) Each Target has withheld from each payment made to any of its past and
present shareholders, directors, officers, employees and agents the amount of
all Taxes and other deductions required to be withheld and has paid or made
adequate provision for the payment of such amounts to the proper Taxing
Authority.

 

Section 5.17. Limitations. CTF’s representations, warranties, and to the extent
applicable, covenants set forth in Sections 5.4, 5.6(b)-(d), 5.7, 5.9, 5.10,
5.12 and 5.15 of the CTF Agreement are expressly made subject to any action of
Marriott or its Representatives or any failure of Marriott or its
Representatives to act in circumstances where Marriott is under a legal or
contractual duty to act, and in the event of such action or failure to act by
Marriott, CTF assumes no responsibility for the accuracy or completeness of such
representations and warranties or the performance of such covenants to the
extent of such inaccuracy, incompleteness or failure to perform is a result of
such action or failure to act by Marriott. In addition, CTF’s representations,
warranties, and to the extent applicable, covenants are qualified by reference
to any condition identified in the property condition reports that are listed in
Schedule 2.6(c) of the CTF Agreement.

 

ARTICLE 5A. MANAGER REPRESENTATIONS AND WARRANTIES

 

Marriott represents and warrants, and to the extent applicable covenants, to the
Purchaser, as of the date hereof and as of the Closing Date, that except as
disclosed on the Disclosure Schedules set forth herein and in the CTF Agreement.

 

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Section 5.1A Organization, Existence; Records and Actions.

 

(a) INTENTIONALLY OMITTED

 

(b) A true and complete copy of the Organizational Documents of each Target,
certified by the Secretary or Assistant Secretary of the Target, delivered by
CTF to Marriott has been delivered to Purchaser.

 

(c) INTENTIONALLY OMITTED

 

(d) As soon as reasonably practicable, but in no event more than sixty-five (65)
days following the Closing, Marriott shall physically deliver all corporate
minutes and other corporate records that it has received from CTF to Purchaser.

 

Section 5.2A Authority, Approval and Enforceability. The execution, delivery and
performance by Marriott of this Agreement and the Ancillary Agreements, as
applicable is within the corporate power (or otherwise, as applicable) of
Marriott and has been duly and validly authorized by Marriott, and no other
corporate proceedings (or otherwise, as applicable) on the part of Marriott are
necessary to authorize this Agreement, the Ancillary Agreements, or the
transactions contemplated thereby. This Agreement has been, and the Ancillary
Agreements upon their execution at the Closing will be, validly executed and
delivered by Marriott, and is or will be a valid and binding obligation of
Marriott enforceable against Marriott in accordance with its respective terms,
subject to applicable bankruptcy, insolvency, moratorium, reorganization and
other similar laws affecting the rights of creditors generally, and to the
exercise of a court’s equitable powers. Exhibit A is a true and correct copy of
the CTF Agreement (including Schedules and Exhibits thereto) as it relates to
the Hotels that are the subject of this Agreement. The CTF Agreement shall not
be modified or amended with respect to such Hotels. In addition to the
restrictions set forth in the preceding sentence, the CTF Agreement and the
documents delivered pursuant thereto (including security documents and
guarantees) shall not be modified or amended so as to materially adversely
affect Purchaser’s rights hereunder. Marriott shall cause its counsel, Venable
LLP, to deliver to Purchaser a legal opinion, in form and substance satisfactory
to Purchaser as to the lawful existence of Marriott and the due execution and
delivery of this Agreement by Marriott.

 

Section 5.3A Capitalization.

 

(a) INTENTIONALLY OMITTED

 

(b) INTENTIONALLY OMITTED

 

(c) INTENTIONALLY OMITTED

 

(d) INTENTIONALLY OMITTED

 

(e) INTENTIONALLY OMITTED

 

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(f) Marriott has not filed a voluntary petition in bankruptcy or similar
petition, nor has any order, judgment or action been taken or suffered by
Marriott under any insolvency or bankruptcy law.

 

Section 5.4A Lines of Business. Marriott, as manager under the Marriott/CTF
Hotel Management Agreements has not taken any action or failed to take any
action in circumstances where Marriott is under a legal or contractual duty to
act such as to cause any Target to become engaged in any business other than the
ownership and operation of the business of a Hotel and operations incidental
thereto.

 

Section 5.5A No Conflicts; Consents. Except as set forth on Schedule 5.5A,
neither the execution and delivery of this Agreement or the Ancillary Agreements
nor the consummation or performance of any of the transactions contemplated
hereby or thereby will, directly or indirectly (with or without notice or lapse
of time):

 

(a) contravene, conflict with, or result in a violation of (A) any provision of
the Organizational Documents of Marriott, or (B) any resolution or action
adopted by the board of directors or other governing body, any committee of the
board of directors or other governing body, general partners, limited partners,
managers or managing members, members, trustees, stockholders or equity holders
of Marriott;

 

(b) contravene, conflict with, or result in a violation of, or give any
Governmental Authority or other Person the right to challenge any transaction
contemplated by this Agreement or the Ancillary Agreements;

 

(c) give any Governmental Authority or other Person the right to exercise any
remedy or obtain any relief under, any applicable Law or any Order to which
Marriott may be subject;

 

(d) to Marriott’s Knowledge, except as set forth on Schedule 5.5 of the CTF
Agreement, contravene, conflict with, or result in a material violation of any
Permits in relation to the operations of the Hotel;

 

(e) except as set forth on Schedule 5.5A, contravene, conflict with, or result
in a material violation or breach of any provision of, or give any Person the
right to declare a default or exercise any remedy under, or to accelerate the
maturity or performance of, or to cancel, terminate, or modify, any Marriott
Material Contract.

 

(f) INTENTIONALLY OMITTED

 

(g) to Marriott’s Knowledge, except as set forth on Schedules 2.1(a)-(c) or 5.5
of the CTF Agreement, require Consent from any Person with respect to any
Permits in relation to the operations of any Hotel except as set forth below in
this subsection (g). Marriott is the holder of the liquor license with respect
to each Hotel (other than the Mayflower); each such liquor license is in full
force and effect (except as set forth in Schedule 5.5A). Prior to any transfer
of such liquor licenses to Purchaser, certain action (including filings with
governmental authorities) will be required to be taken in order for the Hotels,
after being purchased by Purchaser, to continue to have the

 

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benefit of such liquor licenses. Marriott covenants that all of the Hotels will
continue to serve alcoholic beverages before and after the Closing and subject
to Purchaser providing all necessary and appropriate information requested by
Marriott and executing all necessary petitions or applications requested by
Marriott for transfer, Marriott shall cause all liquor licenses with regard to
the Hotels not currently held by Marriott to be transferred to the Purchaser or
Marriott, as applicable.

 

Section 5.6A Balance Sheets.

 

(a) The Hotel Level Data is maintained by Marriott and has been extracted by CTF
from the financial information supplied by Marriott to CTF under the
Marriott/CTF Hotel Management Agreements, and such Hotel Level Data is complete
and accurate.

 

(b) (c) and (d) The Hotel Level Data is maintained by Marriott and has been
extracted by CTF from the financial information supplied by Marriott to CTF
under the Marriott/CTF Hotel Management Agreements, and such Hotel Level Data is
complete and accurate. Marriott, as Manager under the Marriott/CTF Hotel
Management Agreements, has not taken any action or failed to take any action,
where Marriott is under a legal or contractual duty to act:

 

(i) since the date of the Balance Sheet through the Closing Date, to cause any
Target to suffer or incur any liability described in Section 5.6(b) of this
Agreement;

 

(ii) to cause any Target to become a guarantor of the obligations of a third
party or to contractually indemnify any third party except in respect of
liabilities directly related to the operations of a Target’s Hotel; or

 

(iii) to cause any Target to incur any Debt.

 

(e) INTENTIONALLY OMITTED

 

Section 5.7A Absence of Certain Changes. The financial results reported in the
operating statements prepared by Marriott in its capacity as the manager of the
Hotels for the three (3) fiscal years preceding the date hereof and provided to
Purchaser by Marriott are fairly presented and are free of material error or
omission. Marriott, as Manager under the Marriott/CTF Hotel Management
Agreements, has not taken any action or failed to take any action where Marriott
is under a legal or contractual duty to act, to cause any Target to take any of
the actions prohibited in Section 5.7 of this Agreement. As of the Effective
Date to the Closing Date, Marriott has not and will not create by its acts or
omissions as manager of the Hotels, any liens, pledges, hypothecations, charges,
mortgages, security interests, encumbrances, claims, infringements,
interferences, options, rights of first refusal, preemptive rights or community
property interests as to the Hotel Interests (collectively, the “Marriott
Created Liens”) and shall take such action as may be necessary in order to
remove any such Marriott Created Lien at or prior to Closing if any such
Marriott Created Lien would have been designated as a Purchaser Objection but
for the inclusion of such Marriott Created Lien as a Permitted Encumbrance under
the terms of the CTF Agreement.

 

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Section 5.8A Litigation and Related Matters.

 

(a) Marriott has made available to the Purchaser copies of all pleadings,
correspondence, and other documents relating to each Legal Proceeding set forth
in Schedule 5.8 of the CTF Agreement provided by CTF to Marriott.

 

(b) Except as set forth in Schedule 5.8 of the CTF Agreement, with respect to
the operations of any Hotel, the following representations are made to
Marriott’s Knowledge only:

 

(i) there is no Order to which any Interest Holder, any of the assets owned or
used by any Interest Holder, is subject;

 

(ii) no Selling Entity is subject to any Order that relates to the business or
Property of any Interest Holder; and

 

(iii) no officer, director, manager, managing member, trustee, partner, agent,
or employee of any Target who is under the control of Marriott is subject to any
Order that prohibits such Person from engaging in or continuing any conduct,
activity, or practice relating to the business of any Target.

 

(c) INTENTIONALLY OMITTED

 

Section 5.9A Compliance with Laws; Governmental Authorizations.

 

(a) Except as set forth on Schedule 5.9A, Marriott, as Manager under the
Marriott/CTF Hotel Management Agreements has not taken any action or failed to
take any action in circumstances where Marriott is under a legal or contractual
duty to act to cause any Hotel not to be in compliance in all material respects
with all Governmental Authorizations necessary for the continued operation of
the business of each Hotel nor has Marriott received any written notice that any
Hotel is in violation of any applicable Law affecting the operation of such
Hotel.

 

(b) To Marriott’s Knowledge, except as set forth on Schedule 5.9A, Marriott has
not received written notice of any request, application, proceeding, plan, study
or effort, including any condemnation proceeding, proposed change of zoning or
other proposed land use regulation or action, which would have a material
adverse effect on any Hotel or any Permits. To Marriott’s Knowledge, Marriott
has not received written notice that the present development, improvement, use
and operation of any Hotel are not in compliance with or violate any applicable
Law or any Permit.

 

Section 5.10A Contracts and Commitments. True and complete copies of the
Material Contracts delivered to Marriott by CTF have been delivered to
Purchaser. True and complete copies of the Marriott Material Contracts have been
delivered by Marriott to Purchaser, and a true, complete and correct list of
Marriott Material Contracts is set

 

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forth as Schedule 5.10A. Marriott, as manager under the Marriott/CTF Hotel
Management Agreements, has not taken any action or failed to take any action in
circumstances where Marriott is under a legal or contractual duty to act other
than as set forth on Schedule 5.10 of the CTF Agreement:

 

(a) to create or enter into any contract other than (i) those Contracts set
forth on Schedule 5.10A; (ii) contracts entered into in the Ordinary Course of
Business; and (iii) Marriott Material Contracts that will be binding upon any
Target or the Owned Real Property or the Leased Real Property subsequent to the
Closing Date;

 

(b) to cause any Interest Holder to materially default in the performance of any
of its obligations under any Material Contract, or to modify, supplement or
amend in any material respect any Material Contract;

 

(c) INTENTIONALLY OMITTED

 

(d) to cause any Target to make any illegal or unrecorded payments, deposits or
similar items.

 

(e) All Contracts related to PIP Expenditures as of the date hereof, and those
Contracts related to PIP Expenditures after the date hereof, delivered to
Marriott have been, or will be, delivered to Purchaser.

 

Section 5.11A Hotel Properties.

 

(a) INTENTIONALLY OMITTED

 

(b) To Marriott’s Knowledge, except as set forth on Schedule 5.9A of the CTF
Agreement, as of the date hereof, no Interest Holder has received written notice
by any Governmental Authority of any violation of an Environmental Law or
written notice by any Person of any breach by a Hotel of its obligations under
any Contract for the remediation of any condition at a Hotel under an
Environmental Law.

 

Section 5.12A Intellectual Property. Marriott, as manager under the Marriott/CTF
Hotel Management Agreement, has not taken any action or failed to take any
action in circumstances where Marriott is under a legal or contractual duty to
act to cause any infringement by any Interest Holder on the rights or interests
of any third party with respect to the Tradenames nor any infringement upon any
Interest Holder’s rights or interests in any of the Tradenames. To Marriott’s
knowledge, no Interest Holder has received written notice that it is infringing
the rights or interests of any third party with respect to the Intellectual
Property or that any third party is infringing upon any Interest Holder’s rights
or interests in any of the Intellectual Property.

 

Section 5.13A Employee Benefits.

 

(a) To Marriott’s Knowledge with respect to those Targets organized within the
United States, no Hotel has any employees, except employees under the control of
Marriott who are employed in connection with the business and operation of the
Hotels pursuant to the Marriott/CTF Hotel Management Agreements.

 

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(b) INTENTIONALLY OMITTED

 

Section 5.14A Insurance. INTENTIONALLY OMITTED

 

Section 5.15A Leases. Except as set forth on Schedule 5.15 of the CTF Agreement,
Marriott, as manager under the Marriott/CTF Hotel Management Agreements, has not
taken any action nor failed to act in circumstances where Marriott is under a
legal or contractual duty to act:

 

(a) to modify, supplement or amend any Lease; or

 

(b) to cause a default by the respective tenant that is continuing under the
Lease, or to cause any event to occur and continue, which with the giving of
notice or lapse of time, or both, would constitute a default under the Lease on
the part of the respective tenant.

 

Section 5.16A Taxes. Solely as to Taxes the reporting, filing and payment of
which are the contractual obligation of Marriott or its Affiliates pursuant to
the management of the Hotel under the Marriott/CTF Management Agreements,
Marriott represents to the Purchaser:

 

(a) Marriott or its Affiliates have duly and timely filed each Tax Return
contractually required pursuant to the Marriott/CTF Management Agreements to be
filed with any Taxing Authority by Marriott or its Affiliates which include or
are based upon the assets, operations, ownership or activities of any of the
Hotels, including any consolidated, combined, unitary, fiscal unity or similar
Tax Return which includes or is based upon the assets, operations, ownership or
activities of any of the Hotels (or Marriott or its Affiliates have timely and
properly filed valid extensions of time with respect to the filing thereof) and
all such Tax Returns were correct and complete in all material respects. Except
as set forth on Schedule 5.16A, Marriott or its Affiliates on behalf of the
Hotels have paid all Taxes owing with respect to the assets, ownership,
operations and activities of the Hotels (whether or not shown on any Tax Return)
in accordance with their contractual obligations of the Marriott/CTF Management
Agreements.

 

(b) To Marriott’s Knowledge, there are no Liens on any of Hotels or the assets
of any of the Hotels that arose in connection with any failure (or alleged
failure) by Marriott or its Affiliates to pay, on behalf of the Hotels, any Tax
in accordance with the contractual terms of the Marriott/CTF Management
Agreements, other than Liens for Taxes not yet due and payable.

 

(c) Except as set forth in Schedule 5.16 of the CTF Agreement and Schedule
5.16A, to Marriott’s Knowledge, there are no pending audits, assessments or
claims from any Taxing Authority for deficiencies, penalties or interest against
any of the Hotels or any of their assets, operations or activities for Taxes
that are the contractual

 

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filing and payment obligation of Marriott or its Affiliates pursuant to the
Marriott/CTF Management Agreements. Except as set forth in Schedule 5.16 of the
CTF Agreement, there are no pending claims for refund of any Tax of any Hotel
(including refunds of Taxes allocable to the Hotel or with respect to
consolidated, combined, unitary, fiscal unity or similar Tax Returns) related to
any Taxes that are the contractual obligation of Marriott or its Affiliates
pursuant to the Marriott/CTF Management Agreements.

 

(d) INTENTIONALLY OMITTED.

 

(e) Except as set forth in Schedule 5.16 of the CTF Agreement, Marriott or its
Affiliates have not (i) agreed to any extension of time with respect to the
filing of any Tax Return for any of the Hotels contractually required to be
filed by Marriott or its Affiliates pursuant to the Marriott/CTF Management
Agreements (including any Tax Return which includes or is based upon the Hotels’
respective assets, ownership, operations or activities), or any limitation
period regarding the assessment of any such Taxes or (ii) received approval to
make or agreed to a change in accounting method with respect to such Taxes or
has any application pending with any Taxing Authority requesting permission for
any such change.

 

(f) INTENTIONALLY OMITTED.

 

(g) Except as set forth in Schedule 5.16 of the CTF Agreement, to Marriott’s
Knowledge, there are no outstanding rulings or determinations of, or requests
for rulings or determinations with, any state, local or foreign Taxing Authority
expressly addressed to any Hotel that are, or if issued would be, binding upon
any Hotels with respect to any Taxes that are the contractual obligation of
Marriott or its Affiliates pursuant to the Marriott/CTF Management Agreements.

 

(h) INTENTIONALLY OMITTED.

 

(i) INTENTIONALLY OMITTED.

 

(j) INTENTIONALLY OMITTED.

 

(k) INTENTIONALLY OMITTED.

 

(l) Except as set forth in Schedule 5.16 of the CTF Agreement, none of Marriott
or its Affiliates have given a power of attorney to any Person on any matters
relating to Taxes that are the contractual obligation of Marriott or its
Affiliates pursuant to the Marriott/CTF Management Agreements (other than a Tax
Matters Partner pursuant to Code Section 6231(a)(7)).

 

(m) INTENTIONALLY OMITTED.

 

(n) INTENTIONALLY OMITTED.

 

(o) To the extent contractually required pursuant to the Marriott/CTF Management
Agreements, Marriott or its Affiliates have withheld all Taxes and other
deductions required to be withheld and have paid or made adequate provision for
the payment of such amounts to the proper Taxing Authority.

 

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Section 5.17A Inaccuracy of Pass Through Representations. To Marriott’s
Knowledge, none of the representations made in Article 5 are inaccurate, false,
or misleading in any material respect. The pass through representations,
warranties and to the extent applicable covenants made in Article 5 and Article
5A, as to the physical condition and environmental status of the Hotels and the
Property are qualified by reference to reports prepared by the Structural and
Environmental Consultants listed in Schedule 2.6(c) of the CTF Agreement.

 

Section 5.18A Representations and Warranties with respect to Renaissance Vinoy.
As to the representations and warranties set forth in Sections 5.1(a), 5.1(c),
5.2, 5.3, 5.4, 5.5, 5.7, 5.8(c), 5.9, 5.10(a)-(d), 5.11(a), 5.13, 5.14, 5.15 and
5.16 of the CTF Agreement, Marriott, to Marriott’s Knowledge, hereby makes those
same representations and warranties with respect to Marriott’s ownership
interest in the Renaissance Vinoy as though Marriott were the CTF Selling Entity
of such interest.

 

ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

 

The Purchaser hereby represents and warrants to Marriott as follows:

 

Section 6.1. Organization.

 

(a) The Purchaser is a limited liability company duly organized, validly
existing and in good standing under the laws of Delaware and has all necessary
power and authority to own, lease and operate its properties and to carry on its
business as it is now being conducted. The Purchaser is duly qualified or
licensed as a foreign limited liability company to do business, and is in good
standing, in each jurisdiction where the character of the properties owned,
leased or operated by it or the nature of its business makes such qualification
or licensing necessary, except, in each case, for any such failures that would
not, individually or in the aggregate, reasonably be expected to have a
Purchaser Material Adverse Effect.

 

(b) The Purchaser has heretofore furnished to Marriott a complete and correct
certified copy of the Purchaser’s certificate of formation. Such articles of
organization are in full force and effect. Purchaser shall cause its counsel,
Pircher, Nichols and Meeks, to deliver to Marriott a legal opinion in form and
substance satisfactory to Marriott as to the existence of Purchaser, and the due
execution and delivery of this Agreement and the applicable documents executed
and delivered at Closing.

 

Section 6.2. Authority. The Purchaser has full limited liability company power
and authority to execute and deliver this Agreement and each of the Ancillary
Agreements to which it will be a party, to perform its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby.
The

 

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execution and delivery by the Purchaser of this Agreement and each of the
Ancillary Agreements and each of the CTF Ancillary Agreements to which it will
be a party and the consummation by the Purchaser of the transactions
contemplated hereby and thereby have been duly and validly authorized by all
necessary limited liability company action. This Agreement has been, and upon
their execution each of the Ancillary Agreements and each of the CTF Ancillary
Agreements to which the Purchaser will be a party will have been, duly and
validly executed and delivered by the Purchaser. This Agreement constitutes, and
upon their execution each of the Ancillary Agreements and each of the CTF
Ancillary Agreements to which the Purchaser will be a party will constitute, the
legal, valid and binding obligations of the Purchaser, enforceable against the
Purchaser in accordance with its and their respective terms, except as
enforcement may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors’ rights generally and by general
principles of equity (regardless of whether considered in a proceeding in equity
or at law).

 

Section 6.3. No Conflict; Required Filings and Consents.

 

(a) The execution, delivery and performance by the Purchaser of this Agreement
and each of the Ancillary Agreements and each of the CTF Ancillary Agreements to
which the Purchaser will be a party, and the consummation of the transactions
contemplated hereby and thereby, do not and will not:

 

(i) conflict with or violate the certificate of formation or operating agreement
of the Purchaser;

 

(ii) conflict with or violate any Law applicable to the Purchaser or by which
any property or asset of the Purchaser is bound or affected; or

 

(iii) conflict with, result in any breach of, constitute a default (or an event
that, with notice or lapse of time or both, would become a default) under,
require any consent of any Person pursuant to, or give to others any rights of
termination, acceleration or cancellation of, any material contract or agreement
to which the Purchaser is a party;

 

except, in the case of clause (ii) or (iii), for any such conflicts, violations,
breaches, defaults or other occurrences that would not, individually or in the
aggregate, reasonably be expected to have a Purchaser Material Adverse Effect.

 

(b) The Purchaser is not required to file, seek or obtain any notice,
authorization, approval, order, permit or consent of or with any Governmental
Authority in connection with the execution, delivery and performance by the
Purchaser of this Agreement and each of the Ancillary Agreements and each of the
CTF Ancillary Agreements to which it will be party or the consummation of the
transactions contemplated hereby or thereby or in order to prevent the
termination of any right, privilege, license or qualification of the Purchaser,
except where failure to obtain such consent, approval, authorization or action,
or to make such filing or notification, would not, individually or in the
aggregate, reasonably be expected to have a Purchaser Material Adverse Effect or
as may be necessary as a result of any facts or circumstances relating solely to
Marriott or any of its Affiliates.

 

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Section 6.4. Financing. The Purchaser shall have at the Closing sufficient funds
to permit the Purchaser to consummate the transactions contemplated by this
Agreement and the Ancillary Agreements and each of the CTF Ancillary Agreements
to which Purchaser will be a party. The parties acknowledge and agree that it
shall not be a condition to the obligations of the Purchaser to consummate the
transactions contemplated hereby that the Purchaser have sufficient funds for
payment of the Unadjusted Purchase Price and any post-closing adjustments
thereto.

 

ARTICLE 7. COVENANTS.

 

Section 7.1. Management of the Hotels Prior to the Closing. Between the date of
this Agreement and the Closing Date, except as set forth in this Agreement or in
the CTF Agreement, Marriott shall operate and manage the Hotels in accordance
with (i) the approved annual operating and Capital Expenditure budgets for each
Hotel and (ii) customary and prudent practices for hotels of similar size,
quality and standing and otherwise only in conformity with the Marriott/CTF
Hotel Management Agreements and the brand standards applicable to the operations
of Renaissance hotels. Between the date hereof and Closing, Marriott shall not
enter into any new Marriott Material Contracts other than (a) those entered into
with third parties (and not Affiliates of Marriott, except as set forth below)
consistent with past practices or (b) those entered into with MIDCS as to PIP
Amounts at the Hotels, provided that any new PIP work shall be subject to the
prior approval of Purchaser (not to be unreasonably withheld, delayed or
conditioned). To the extent that Marriott has the right, power or authority to
approve any PIP expenditures to be made by CTF, Marriott shall obtain the
consent of Purchaser before consenting itself to any such PIP expenditure.

 

Section 7.2. Conduct of Business of the Targets Prior to the Closing.
[INTENTIONALLY DELETED]

 

Section 7.3. Risk of Loss. The risk of loss or damage to the Owned Real Property
or the Leased Real Property, including without limitation, loss or damage
resulting from casualty, condemnation, eminent domain and any business
interruption therefrom attributable to any acts or occurrences prior to the
Closing (a “Casualty Loss”) shall be borne by CTF. In the event of a Casualty
Loss, the following shall apply:

 

(a) If the Casualty Loss relates to a Hotel listed on Schedule 7.3(a) of the CTF
Agreement (the “Group A Hotels”), and the casualty results in a loss of less
than Two Million Dollars ($2,000,000) as estimated by CTF and the Purchaser,
Purchaser will proceed to Closing with respect to such Hotel and at Closing
Marriott shall assign, or cause CTF to assign, all insurance proceeds to
Purchaser except to the extent such insurance is related to business
interruption or extraordinary expenses incurred prior to Closing. If insurance
proceeds in respect of such Casualty Loss that are available for the costs of
repair and restoration of the Fee Property or the Leasehold Property, as
applicable, are estimated to be insufficient to cover such costs, or if the
Casualty Loss is

 

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uninsured, the parties will reduce the Preliminary Allocated Price by the amount
of the estimated shortfall in insurance proceeds available for such costs. In
any case where the Casualty Loss is insured, at Closing the Preliminary
Allocated Price shall be reduced by any deductible applicable to the insurance
coverage; or

 

(b) If the Casualty Loss relates to a Hotel listed on Schedule 7.3(b) of the CTF
Agreement (the “Group B Hotels”) and the casualty results in a loss of less than
the lesser of Five Million Dollars ($5,000,000) or ten percent (10%) of the
Preliminary Allocated Price applicable to the affected Hotel as estimated by CTF
and the Purchaser, Purchaser will proceed to Closing with respect to such Hotel
and at Closing Marriott shall assign, or cause CTF to assign, all insurance
proceeds to Purchaser except to the extent such insurance is related to business
interruption or extraordinary expenses incurred prior to Closing. If insurance
proceeds in respect of such Casualty Loss that are available for the costs of
repair and restoration of the Fee Property or the Leasehold Property, as
applicable, are estimated to be insufficient to cover such costs, or if the
Casualty Loss is uninsured, the parties will reduce the Preliminary Allocated
Price by the amount of the estimated shortfall in insurance proceeds available
for such costs. In any case where the Casualty Loss is insured, at Closing the
Preliminary Allocated Price shall be reduced by any deductible applicable to the
insurance coverage; or

 

(c) If the Casualty Loss exceeds the amount set forth in Section 7.3(a) or (b),
as applicable, Purchaser, at its option, may either:

 

(i) proceed to Closing with respect to such Hotel and at Closing Marriott shall
assign, or cause CTF to assign, all insurance proceeds to Purchaser, except to
the extent such insurance is related to business interruption or extraordinary
expenses incurred prior to the Closing. If insurance proceeds in respect of such
Casualty Loss that are available for the costs of repair and restoration of the
Fee Property or the Leasehold Property, as applicable are estimated by the
Purchaser to be insufficient to cover such loss, or if the Casualty Loss is
uninsured, the parties will reduce the Preliminary Allocated Price by the amount
of the estimated shortfall in insurance proceeds available for such costs. In
any case where the Casualty Loss is insured, at Closing the Preliminary
Allocated Price shall be reduced by any deductible applicable to the insurance
coverage; or

 

(ii) elect not to close with respect to such Hotel (with a reduction in the
Unadjusted Purchase Price by the Preliminary Allocated Price for such Hotel) in
which event the Deposit as to such Hotel, and the interest earned thereon, will
be returned to Purchaser.

 

(d) In the event of a Casualty Loss, Marriott shall cause CTF to cooperate with
Purchaser, to promptly and diligently file and pursue recovery of, all
appropriate insurance claims and to the extent of any insurance proceeds
recovered, with Purchaser’s consent, apply such proceeds to the restoration of
the Property. In the event any lender on a Property damaged by a Casualty Loss
exercises any rights with respect to the insurance proceeds, such that they are
not available for restoration of the Property or assignment to Purchaser, the
Preliminary Allocated Price of the related Hotel shall be

 

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reduced by the amount of the proceeds taken by such lender. Insurance proceeds
for business interruption losses shall be applied to such losses and shall not
be counted against property casualty losses.

 

(e) All risk of loss or damage to the Owned Real Property and the Leased Real
Property, including without limitation, loss or damage resulting from casualty,
condemnation, eminent domain and any business interruption resulting therefrom
shall be borne by Purchaser upon the Closing of the Transaction.

 

(f) Notwithstanding any provision of this Agreement to the contrary, any
insurance proceeds received or receivable prior to or at the time of the Closing
with respect to a Casualty Loss (except to the extent that such insurance
proceeds are related to business interruption or extraordinary expenses incurred
prior to the Closing) shall not be included in the determination of Hotel
Working Capital or Seller Working Capital for any purpose under this Agreement.

 

Section 7.4. Covenants Regarding Information.

 

(a) From the date hereof until the Closing Date, upon reasonable notice, CTF and
its Subsidiaries have agreed in the CTF Agreement that they shall (i) afford
Marriott and the Purchaser and their respective officers, employees, agents,
accountants, lenders, investors, advisors, bankers and other representatives
(collectively, “Representatives”) reasonable access to the books and records of
the Targets and the Selling Entities related to the Targets; (ii) furnish
Marriott with such financial, operating and other data and information as
Marriott may reasonably request, and which Marriott shall furnish to Purchaser,
and (iii) furnish the Representatives usual and customary “management
representation letters” to a firm of certified public accountants necessary for
completion of an independent audit of the Target (it being understood that with
respect to the Hotel Level Data, such letter shall rely on an equivalent letter
from the Hotel’s manager); provided, however, that any such access or furnishing
of information shall be conducted at the Purchaser’s expense during normal
business hours upon reasonable notice, under the supervision of CTF’s personnel,
and in such a manner as to not unreasonably interfere with the normal operations
of CTF. Notwithstanding anything to the contrary in this Agreement, neither CTF
nor any of its Subsidiaries shall be required to disclose any information to the
Purchaser or its Representatives if such disclosure would (A) in CTF’s sole
discretion, jeopardize any attorney-client privilege, or (B) contravene any duty
imposed by applicable Laws.

 

(b) CTF has consented to the Purchaser engaging, at the Purchaser’s expense, the
independent registered public accounting firm that audited, reviewed or
otherwise advised CTF regarding the financial statements of any Target to audit
such financial statements for periods preceding the Closing Date and to access
the audit work papers relating to such prior period. Marriott shall cause CTF to
cooperate with Purchaser in responding to Purchaser’s reasonable requests for
other information relating to such financial statements.

 

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(c) For a period of seven (7) years after the Closing or, if shorter, the
applicable period specified in Purchaser’s document retention policy, the
Purchaser shall or shall cause its designees, as applicable, to (i) retain the
books and records relating to the Hotels or the Property relating to periods
prior to the Closing, and (ii) afford the Representatives of CTF reasonable
access (including the right to make, at the CTF’s expense, photocopies), during
normal business hours upon reasonable notice, to such books and records wherever
located in order to allow CTF to fulfill any pre-existing contractual obligation
which is binding upon CTF and disclosed to Purchaser or requirement of any Law
or defend any claim (other than a claim by an Indemnified Party), including any
litigation (civil, criminal or otherwise), governmental investigation, tax audit
or insurance claim.

 

(d) For a period of seven (7) years after the Closing or, if shorter, the
applicable period specified in CTF’s document retention policy, with respect to
any documents not previously delivered to Marriott, CTF has agreed in the CTF
Agreement to (i) retain the books and records relating to the CTF Level Data
with respect to the Targets, Hotels, Leased Real Property, Owned Real Property
or Personal Property relating to periods prior to the Closing to the extent not
delivered to the Purchaser at the Closing, and (ii) afford the Representatives
(as defined in Section 7.4(a)) reasonable access (including the right to make,
at the Purchaser’s expense, photocopies), during normal business hours upon
reasonable notice, to such books and records wherever located in order to allow
the Purchaser to fulfill any pre-existing contractual obligation or requirement
which is binding on Purchaser and disclosed to CTF or requirement of any Law or
to defend any claim (other than a claim by an Indemnified Party), including any
litigation (civil, criminal or otherwise), governmental investigation, tax or
insurance claim.

 

Section 7.5. Non-Waiver of Attorney-Client Privilege.

 

(a) The Purchaser agrees that CTF, the CTF Selling Entities, and their
respective Affiliates, by virtue of the transfer of the CTF Selling Entities’
interest in the Hotels or any other transaction contemplated by this Agreement
and the Ancillary Agreements and the CTF Ancillary Agreements, are not
surrendering, waiving or transferring any attorney-client, work product, or
other applicable privileges that exist with respect to any and all
attorney-client relationships that exist between CTF and/or the CTF Selling
Entities and the attorneys listed below, including any relationships related to:

 

(i) any matters arising out or related to the matters listed on Schedule 7.5 of
the CTF Agreement;

 

(ii) any advice provided by Gibson, Dunn & Crutcher LLP or any other law firm
retained by CTF in connection with the negotiation of the CTF Agreement and the
CTF Ancillary Agreements;

 

(iii) any other legal advice provided by Gibson Dunn and Crutcher to CTF and the
CTF Selling Entities;

 

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(iv) any legal advice provided by Skadden, Arps, Slate Meagher & Flom LLP to CTF
and the CTF Selling Entities;

 

(v) any legal advice provided by Weil Gotshal & Manges LLP; and

 

(vi) any legal advice provided by Daniel Heininger and Bradley Hornbacher.

 

(b) The Purchaser further agrees that: (i) CTF and the CTF Selling Entities and
their respective Affiliates have received and continue to receive legal
representation in various matters from all of the above referenced attorneys,
and (ii) the Purchaser shall not be entitled to receive or review any attorney
work product, information subject to attorney-client privilege or client files
relating to CTF, the CTF Selling Entities, or their respective Affiliates in the
possession of any counsel referred above; and (iii) that neither this Agreement,
the CTF Agreement, the Purchaser’s subsequent ownership of the Hotel Interests,
nor any transaction that arises out of or related to this Agreement, the CTF
Agreement or the Ancillary Agreements or the CTF Ancillary Agreements shall
provide any basis for the Purchaser, its Subsidiaries or any of its Affiliates
or their successors or assigns to: (a) except to the extent specifically agreed
in the Conflict Waiver Agreement dated November     , 2004 with respect to
Gibson, Dunn & Crutcher LLP or any similar agreements concerning law firms
retained by CTF in connection with this Agreement, seek to disqualify any of the
above referenced counsel’s representation of CTF, the CTF Selling Entities or
their respective Affiliates in any matter, including any matter adverse to the
Purchaser, its Subsidiaries or its Affiliates, whether or not related to the any
of the above referenced counsel’s prior representation of CTF, the CTF Selling
Entities or their respective Affiliates or any of the Hotels that are the
subject of this Agreement or the Ancillary Agreements, or (b) claim or assert
that any privilege has been waived between CTF, the CTF Selling Entities, and
their respective Affiliates and the above-referenced counsel.

 

Section 7.6. Notification of Certain Matters. Until the Closing, each party
hereto shall promptly notify the other party in writing of any fact, change,
condition, circumstance or occurrence or nonoccurrence of any event of which it
is aware that will or is reasonably likely to result in any of the conditions
set forth in Section 9.2 through Section 9.5 of this Agreement or in Section 9.2
through 9.5 of the CTF Agreement becoming incapable of being satisfied.

 

Section 7.7. Resignations. Marriott will cause CTF to deliver at the Closing the
written resignation of all of the directors, managers, general partners and
officers of the Targets, effective as of the Closing Date which Marriott shall
have delivered to Purchaser.

 

Section 7.8. Confidentiality. Until the Closing, each of the parties shall, and
shall cause its Affiliates and Representatives to keep confidential, disclose
only to its Affiliates and Representatives and use only in connection with the
transactions contemplated by this Agreement and the Ancillary Agreements, all
information and data

 

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obtained by them from the other party or its Affiliates and Representatives
relating to such other party in the course of due diligence (collectively, the
“Information”), unless disclosure of the information or data is required by
applicable Law. Notwithstanding the foregoing, the provisions of this Section
7.8 shall not apply to those portions of any Information that (a) are or become
generally available to the public other than as a result of a disclosure by CTF,
the other party or its Representatives; (b) become available on a
non-confidential basis from a source other than CTF, the other party or its
Representatives which to the knowledge of the party receiving such information,
is not bound by a confidentiality agreement or other obligation of
confidentiality prohibiting such disclosure; (c) were known on a
non-confidential basis prior to disclosure by the other party or its
Representatives; or (d) are independently developed without reference to the
Information in the event that the transactions contemplated hereby are not
consummated, each party shall, and shall use its Commercially Reasonable Efforts
to cause its Affiliates and Representatives to, promptly return to the other
party or destroy all documents (including all copies thereof) containing any
such Information.

 

Section 7.9. Consents and Estoppels.

 

(a) Each party shall use Commercially Reasonable Efforts to take, or cause to be
taken, all appropriate action to do, or cause to be done, all things necessary,
proper or advisable to obtain from any third party all consents necessary to
assign the Material Contracts to Purchaser. Notwithstanding the foregoing, if
there shall not be assigned to Purchaser any Material Contract or if an
attempted assignment thereof without the consent of the other party or parties
thereto would constitute a breach thereof or in any way adversely affect the
rights of Marriott or CTF and such consent is not obtained, or if an attempted
assignment would be ineffective or would affect the rights of Marriott or CTF
thereunder so that Purchaser, would not, in fact, receive the benefits thereof,
CTF has agreed that in such case, the beneficial interest in and to any such
Material Contract shall, to the extent permitted by the relevant Material
Contract and by Law, pass to Purchaser, and Marriott shall cause CTF, subject to
the provisions of Section 9.2 to: (i) hold all such Material Contracts in trust
for the benefit of Purchaser, its successors and assigns from and after the
Closing Date (with effect from the Effective Date), (ii) use Commercially
Reasonable Efforts to obtain and secure any and all consents and approvals that
may be necessary to effect such assignment or assignments of the same; and (iii)
make or complete such assignment or assignments as soon as reasonably possible.

 

(b) Subject to Section 9.2, Purchaser and Marriott shall each use Commercially
Reasonable Efforts to take, or cause to be taken, all appropriate action to do,
or cause to be done, all things necessary, proper or advisable to obtain from
any third party all consents sufficient to create a valid transfer of the Equity
Interests to Purchaser without causing the Purchaser or Marriott to incur
additional liabilities or limitation of rights.

 

(c) Subject to Section 9.2, Purchaser and Marriott shall each use Commercially
Reasonable Efforts to take, or cause to be taken, all appropriate action to do,
or cause to be done, all things necessary, proper or advisable to obtain
consents from

 

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the applicable lessors or landlords sufficient to create a valid assignment of
the Leasehold Interests to the Purchaser without causing Purchaser or Marriott
to incur additional liabilities or limitation of rights.

 

(d) Subject to Section 9.2, the parties agree that they shall use Commercially
Reasonable Efforts to obtain an estoppel certificate from the applicable lessors
or landlords under the Leases containing the information required by the terms
of the Leases or, in the event that no such requirements are set forth therein,
in a form reasonably acceptable to the Purchaser and addressed to (i) in the
case of a Lease Assignment & Sale, the Purchaser, or (ii) in the case of a
Target Sale, CTF (collectively, the “Estoppel Certificates”).

 

Section 7.10. Governmental Consents, Filings and Closing Deliveries. Each party
shall use Commercially Reasonable Efforts to take, or cause to be taken, all
appropriate action to do, or cause to be done, all things necessary, proper or
advisable under applicable Law or otherwise to consummate and make effective the
transactions contemplated by this Agreement and the Ancillary Agreements as
promptly as practicable, including to (i) obtain from Governmental Authorities
all consents, approvals, authorizations, qualifications and orders as are
necessary for the consummation of the transactions contemplated by this
Agreement and the Ancillary Agreements, (ii) promptly make all necessary
filings, and thereafter make any other required submissions, with respect to
this Agreement required under any applicable Law, and (iii) on the Closing Date,
deliver or cause to be delivered Marriott’s Closing Deliveries by Marriott, and
the Purchaser’s Closing Deliveries by the Purchaser and satisfying the other
conditions of Closing set forth in Sections 9.4 and 9.5.

 

Section 7.11. Public Announcements. The parties shall consult with each other
before issuing any press release with respect to this Agreement or the Ancillary
Agreements or the CTF Ancillary Agreements or the transactions contemplated
hereby or thereby, and neither party nor its Representatives shall criticize,
disparage, defame or otherwise make any statement which would reflect negatively
on (i) the other party, (ii) any current or former employees, officers,
directors, agents or other persons associated with the either party, (iii) any
of the services provided by either party or (iv) any of the current or past
business practices of either party and/or CTF. Furthermore, the Purchaser
specifically agrees that it will not file this Agreement or any Ancillary
Agreement with any Governmental Authority unless and until required to do so.
The Purchaser also agrees that it will give Marriott and CTF reasonable notice
of such filing, and, at the reasonable request of CTF and/or Marriott the
Purchaser shall use its Commercially Reasonable Efforts to seek confidential
treatment of any provisions herein or therein.

 

Section 7.12. Marriott Undertaking. As to any claims as to employment matter
(including, but not limited to, employee claims of discrimination and wrongful
termination, and failure or alleged failure to pay employment taxes and employee
withholding taxes) for any period or before the Effective Date with respect to
the Hotels, and as to liability that arises from sales, use and occupancy taxes,
business license and gross receipts taxes levied by any Governmental Authority
with respect to any of the Hotels relating to any period prior to the
Purchaser’s ownership (collectively, the

 

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“Liability Accruals”), Marriott shall be solely responsible for the payment
(with no right of reimbursement from Purchaser or any Designee) of the Liability
Accruals and Marriott does hereby agree to indemnify and hold harmless the
Purchaser from and against any loss, claim, damage or expense which the
Purchaser may suffer, incur or expend arising out of a failure on the part of
Marriott to pay the Liability Accruals. In addition, Marriott shall be
responsible for the payment (with no right of reimbursement from Purchaser or
any Designee) of Marriott’s intercompany payables (including payables from one
Marriott related entity to another Marriott related entity) that relate to any
period prior to Purchaser’s ownership (collectively, the “Intercompany
Payables”), and Marriott does hereby agree to indemnify and hold harmless the
Purchaser from and against any loss, claim, damage or expense which Purchaser
may suffer, incur or expend arising out of a failure on the part of Marriott to
pay the Intercompany Payables.

 

Section 7.13. Security Deposits in the form of Letters of Credit. Marriott shall
cause to be transferred to Purchaser any security deposits with respect to
tenant leases of the Hotels which are held in the form of letters of credit (the
“SD Letters of Credit”), including the SD Letter of Credit held by Mayflower
Hotel Investors, L.P. Notwithstanding the foregoing, if any of the SD Letters of
Credit are not transferable, Marriott shall request the tenants obligated under
such SD Letters of Credit to cause new letters of credit to be issued in favor
of Purchaser in replacement thereof and in the event such a new letter of credit
is not issued in favor of Purchaser by Closing, Marriott shall diligently pursue
such replacement after Closing.

 

ARTICLE 8. TAX MATTERS.

 

Section 8.1. Tax Returns.

 

(a) Marriott or its Affiliates shall prepare, or shall cause to be prepared, and
shall file or cause to be filed, all Tax Returns for any Hotel for taxable years
that end on or before the Closing Date (other than those Tax Returns that are
the contractual obligation of CTF under the CTF Agreement). Except as required
by applicable law, such Tax Returns shall be prepared in a manner that is
consistent with past practice.

 

(b) The Purchaser shall prepare or cause to be prepared and shall file or cause
to be filed all other Tax Returns for the Hotels (other than those Tax Returns
that are the contractual obligation of CTF under the CTF Agreement). Except as
required by applicable law, such Tax Returns shall be prepared in a manner that
is consistent with past practice. The Purchaser shall deliver to Marriott a copy
of any Tax Returns in respect of which Marriott is required to make a payment
pursuant to this Agreement, completed in draft form, at least twenty (20) days
before the due date thereof for the review and approval of Marriott, which
approval will not be unreasonably withheld or delayed, and a schedule, in
reasonable detail, of the amount of payment due to the Purchaser. If Marriott
approves such Tax Return, it shall pay the amount owed the Purchaser before the
due date of such Tax Return.

 

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Section 8.2. Marriott’s Obligations. Solely to the extent of (i) any Taxes
imposed as a result of the gross negligence or willful misconduct of Marriott;
(ii) any Transfer Taxes, and (iii) any Taxes (including real property taxes)
taken into account in the definition of Working Capital, Marriott shall be
responsible for and pay, and shall indemnify the Purchaser and its Affiliates
from, (a) any and all Taxes imposed on any of the Hotels, or for which an owner
of a Hotel is liable, for any taxable period ending on or before the Closing
Date and the portion through the end of the Closing Date for any taxable period
that includes but does not end on the Closing Date (the “Pre-Closing Tax
Period”); provided, however, that Marriott shall not be responsible for any
Taxes arising out of events outside the ordinary course of business and within
the control of the Purchaser occurring on the Closing Date after the Closing,
(b) any and all Taxes imposed on any of the Hotels, or for which an owner of a
Hotel becomes liable, for any taxable period ending after the Closing Date to
the extent that such Taxes result directly from a transaction or an event
occurring on or before the Closing Date, (c) any Taxes arising out of a breach
of the representations in Section 5.16 or 5.16A or both, and (d) any costs or
expenses with respect to Taxes indemnified hereunder. Marriott shall indemnify,
defend and hold the Purchaser harmless from, and shall be entitled to any refund
of, any and all Taxes that are Marriott’s responsibility pursuant to the
immediately preceding sentence. Any indemnity payment required to be made by
Marriott pursuant to this Section 8.2 shall be made within thirty (30) days of
written notice from the Purchaser

 

Section 8.3. Purchaser’s Obligations. Except as otherwise provided in Section
8.2, from and after the Effective Date, the Purchaser and its Affiliates shall
be solely responsible for the payment or discharge of all Taxes imposed on the
any of the Hotels and any costs or expenses with respect to taxes indemnified
hereunder. The Purchaser shall indemnify, defend and hold Marriott and its
Affiliates harmless from, and shall be entitled to any refund of, any and all
Taxes that are the Purchaser’s responsibility pursuant to the immediately
preceding sentence. Any indemnity payment required to be made by the Purchaser
pursuant to this Section 8.3 shall be made within thirty (30) days of written
notice from Marriott or any one of its Affiliates.

 

Section 8.4. Straddle Period. In the case of any taxable period that includes
(but does not end on) the Effective Date (a “Straddle Period”), the amount of
any Taxes based on or measured by income or receipts of a Hotel for the
Pre-Closing Tax Period shall be determined based on an interim closing of the
books as of the close of business on the Effective Date (and for such purpose,
the taxable period of any partnership or other pass-through entity in which the
Hotel’s owner holds a beneficial interest shall be deemed to terminate at such
time) and the amount of other Taxes of a Hotel for a Straddle Period that
relates to the Pre-Closing Tax Period shall be deemed to be the amount of such
Tax for the entire taxable period multiplied by a fraction the numerator of
which is the number of days in the taxable period ending on the Effective Date
and the denominator of which is the number of days in such Straddle Period. The
benefits of lower tax brackets and other similar benefits shall be apportioned
in making the calculation of such allocated portions on the basis of the number
of days in the Purchaser’s and CTF’s holding periods for the taxable period
beginning before and ending after the Effective Date.

 

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Section 8.5. Contests. For purposes of this Agreement, a “Contest” is any audit,
court proceeding or other dispute with respect to any tax matter that affects a
Hotel. Unless the Purchaser has previously received written notice from Marriott
of the existence of such Contest, the Purchaser shall give written notice to
Marriott of the existence of any Contest relating to a tax matter that is
Marriott’s responsibility under Section 8.2 within ten (10) days from the
receipt by the Purchaser of any written notice of such Contest, but no failure
to give such notice shall relieve Marriott of any liability hereunder. Unless
Marriott has previously received written notice from the Purchaser of the
existence of such Contest, Marriott shall give written notice to the Purchaser
of the existence of any Contest for which the Purchaser has responsibility
within ten (10) days from the receipt by Marriott of any written notice of such
Contest. Marriott shall, at its election, have the right to represent a Hotel’s
interests in any Contest relating to a Tax matter arising in a period ending on
or before the Closing Date, to employ counsel of its choice at its expense and
to control the conduct of such Contest, including settlement or other
disposition thereof; provided, however, that the Purchaser shall have the right
to consult with Marriott regarding any such Contest that may affect such Hotel
for any periods ending after the Closing Date at the Purchaser’s own expense and
provided, further, that any settlement or other disposition of any such Contest
may only be with the consent of the Purchaser, which consent will not be
unreasonably withheld or delayed.

 

Section 8.6. Cooperation on Tax Matters. The Purchaser, on the one hand, and
Marriott, on the other, agree, in each case at no cost to the other party, to
cooperate with the other and the other’s representatives in a prompt and timely
manner in connection with any Contest. Such cooperation shall include, but not
be limited to, making available to the other party, during normal business
hours, all books, records, Tax Returns, documents, files, other information
(including working papers and schedules), officers or employees (without
substantial interruption of employment) or other relevant information necessary
or useful in connection with any Contest requiring any such books, records and
files. The Purchaser, on the one hand, and Marriott, on the other, agree, in
each case at no cost to the other party, to cooperate fully in a prompt and
timely manner with the other and the other’s representatives, as and to the
extent reasonably requested by the other party, in connection with the filing of
Tax Returns pursuant to Section 8.1 and in connection with any Contest. Such
cooperation shall include the retention and (upon the other party’s request) the
provision of records and information which are reasonably relevant to any such
Tax Return or Contest and making employees available on a mutually convenient
basis to provide additional information and explanation of any material provided
hereunder. Marriott agrees (i) to retain all books and records with respect to
Taxes pertinent to the Hotels relating to any taxable period beginning before
the Closing Date until ninety (90) days following the expiration of the period
of limitations applicable to the related Tax, (ii) to abide by all record
retention agreements entered into with any Tax authority, other than those books
and records relating to the Hotels which the Purchaser shall provide to Marriott
on or before the Closing Date; and (iii) to give the Purchaser reasonable
written notice prior to transferring, destroying or discarding any such books
and records and, if the Purchaser so requests, Marriott shall allow the
Purchaser to take possession of such books and records. Marriott and the
Purchaser further agree, upon request, to use their commercially reasonable
efforts to obtain any certificate or other document from any governmental
authority as may be necessary to mitigate, reduce or eliminate any Tax that
could be imposed (including, but not limited to, with respect to the
transactions contemplated hereby).

 

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Section 8.7. Price Adjustment. All amounts paid pursuant to this Agreement by
one party to another party (other than interest payments and payments treated as
management fees) shall be treated by such parties as an adjustment to the
Unadjusted Purchase Price, to the extent appropriate and permitted by law.

 

Section 8.8. After-Tax Basis. All payments due in respect of Non-United States
Taxes under this Article 8 shall be fully adjusted to reflect (i) any net
increase in Taxes that the recipient of such payments will experience as a
result of receiving such payments, (ii) any net increase in Taxes such recipient
will experience as a result of receiving any gross-up payments under this
Section 8.8 and (iii) any net Tax benefits that the recipient will incur as a
result of the payment of the indemnified tax.

 

Section 8.9. Elections. Marriott and its Affiliates shall cause CTF to cooperate
fully with the Purchaser, to the extent necessary and to the extent reasonably
requested by the Purchaser, in connection with the filing of any elections
relating to Taxes which become available to the Purchaser or its Affiliates as a
result of the transactions described in this Agreement; provided, however, that
CTF, Marriott and its Affiliates shall not be obligated to consent to an
election if such election would increase the amount of Taxes it is required to
pay unless the parties otherwise agree.

 

Section 8.10. Survival. All obligations under this Article 8 shall survive the
Closing hereunder and continue until ninety (90) days following the expiration
of the period of limitations applicable to the related Tax. If a Tax claim that
is raised by one party during the survival period is disputed by the other
party, such claim shall survive until the dispute between the parties is
resolved. Notwithstanding any other provision contained in this Agreement,
Marriott’s liability under this Article 8 as to Renaissance Vinoy shall be
limited to Marriott’s percentage equity interest as an owner thereof.

 

ARTICLE 9. TITLE COMMITMENT AND SURVEY REVIEW PROCESS; CONDITIONS TO CLOSING.

 

Section 9.1. Title Commitment and Survey Review Process.

 

(a) Title Review Process. Purchaser and Marriott have each initiated the title
review process consisting of, with respect to the Leased Real Property and the
Owned Real Property (the “Real Properties”), (A) ordering from the Title Company
a Uniform Commercial Code financing statement search including a search on any
Target and any CTF Selling Entity and a commitment for owner’s title insurance,
on such policy form as is available in the applicable jurisdiction as selected
by Purchaser, and (B) ordering from Bock & Clark Corporation National Surveyors
Network (“Surveyor”) an ALTA survey with such instructions regarding information
to be shown and the scope of certification as Purchaser shall determine. The
Uniform Commercial Code financing statement search results and the title
commitments and surveys obtained by Purchaser, as revised or updated from time
to time, are herein referred to as “Title Materials.” Copies

 

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of all Title Materials shall be provided to Marriott’s and CTF’s counsel as and
when received, which copies shall not be required to be returned. During the
period from the date of this Agreement and ending at 9:00 a.m. EDT, May 6, 2005
(the “Objection Period”), Purchaser shall notify Marriott in writing of those
material matters relating to title disclosed to Purchaser in the Title Materials
or otherwise disclosed in materials received by Purchaser at least forty-eight
(48) hours prior to 9:00 a.m. EDT, May 6, 2005, to which Purchaser objects
(including, for example, the size or configuration of any Real Properties which
are not acceptable to Purchaser) and that are not Permitted Encumbrances set
forth in items (b)-(d) of the definition thereof (collectively, the “Purchaser’s
Objections”). As to matters relating to title disclosed in the Title Materials
or otherwise disclosed in materials received by Purchaser within forty-eight
(48) hours prior to 9:00 a.m. EDT, May 6, 2005, Purchaser shall notify Marriott
in writing of its Title Objections within forty-eight (48) hours of its receipt
of such materials but in no event later than 9:00 a.m. EDT, May 7, 2005.
Purchaser shall endeavor to deliver the Purchaser’s Objections in a reasonably
expeditious manner and on a property-by-property basis commencing no later than
the date hereof and thereafter as soon as reasonably practical after the date
Purchaser receives the applicable portion of the Title Materials. Purchaser
shall not be deemed to waive its right to make Purchaser’s Objections even if
Purchaser’s Objections are not made in a reasonably expeditious manner so long
as Purchaser’s Objections are made during the Objection Period. At Closing
Purchaser shall reimburse Marriott for all costs and expenses incurred or
expended by Marriott to the Title Company and/or the Surveyor in connection with
obtaining the Title Materials with regard to the Real Properties.

 

(b) Title Policies. Prior to the expiration of the Objection Period, Purchaser
shall obtain from the Title Company, with respect to the Leased Real Property
and the Owned Real Property, in all jurisdictions where available, a commitment
to insure accompanied by a Pro Forma title policy, in form acceptable to
Purchaser (each, a “Pro Forma”). Each Pro Forma shall be written on an ALTA Form
B (1970, amended 10/17/70, or if the 1970, amended 10/17/70 form is not
available, the 1992 form with no creditors’ rights exclusion (except in States
or jurisdictions where such form or deletion is not permitted)) or on such
similar forms as is available in the applicable jurisdictions, insuring extended
owner’s title coverage and shall evidence Title Company’s commitment, upon
compliance with the Title Company’s requirements as set forth in the Title
Company’s commitments to insure (the “Requirements”), to insure title to the
Real Property that is the subject of any Pro Forma, subject only to the
Permitted Encumbrances. The Pro Formas shall be in form and substance acceptable
to Purchaser, and shall include all endorsements reasonably required by
Purchaser. Purchaser shall deliver all Pro Formas and Requirements (including
the form of any affidavits or certifications required to be executed by CTF in
satisfaction of a Requirement) to Marriott’s counsel no later than the
expiration of the Objection Period.

 

(c) Title Cure Period. Upon the termination of the Objection Period, except for
the Purchaser’s Objections if the same are timely raised, the Purchaser shall be
deemed to have accepted the form and substance of all matters disclosed in the
Title Materials which shall become Permitted Encumbrances for all purposes under
the terms of this Agreement and the Ancillary Agreements. Following the
Objection Period, and

 

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without any obligation to do so, CTF shall have until May 16, 2005, or by
delivery of written notice to Purchaser by CTF or Marriott, until such later
date, but not beyond May 23, 2005 (as such date may have been extended, the
“Title Cure Period”) to elect to cure or elect not to cure any or all matters
raised in Purchaser’s Objections; provided, however, CTF agrees to have
released, by the Closing, any liens securing any Debt. If CTF elects to cure
such Title Objections, the cure must be sufficient for the Title Company to
remove the applicable Title Objection from the exceptions to title set forth in
the applicable Pro Forma.

 

(d) Termination of Title Cure Period. If, for any reason, CTF is unable or at
CTF’s sole election, unwilling to take such actions as may be required to cause
the matter identified in Purchaser’s Objections to be cured or removed so as to
convey title to the Real Properties consistent with the Pro Formas, or if CTF
objects to any Requirements or any other obligation which it may incur in
connection with the issuance of the Pro Forma title policies, Marriott shall
cause CTF to give Purchaser notice thereof prior to the expiration of the Title
Cure Period; it being understood and agreed that the failure of Marriott or CTF
to timely give such notice shall be deemed an election by CTF not to remedy such
matters. If CTF shall elect not (or be deemed to elect not) to remove any matter
identified in Purchaser’s Objections, Purchaser may, in the exercise of its sole
discretion either: (i) close the Transaction with respect to the Real Properties
subject to the Purchaser’s Objections (that CTF will not cure) without abatement
of the Unadjusted Purchase Price, in which event: (A) the Purchaser’s Objections
that CTF will not cure shall be, and be deemed to be, for all purposes,
Permitted Encumbrances; (B) the Purchaser shall close the Transactions
notwithstanding the existence of any of the Purchaser’s Objections that CTF will
not cure; and (C) CTF and Marriott shall have no obligation or liability
whatsoever after the Closing with respect to the CTF’s failure to cause any of
the Purchaser’s Objections to be eliminated; or (ii) terminate this Agreement by
written notice given to Marriott and CTF within four (4) calendar days
thereafter, in which event this Agreement shall terminate, the Deposit and all
interest accrued thereon shall be returned to Purchaser and neither party hereto
shall have any further obligations hereunder other than those obligations
expressly stated herein to survive the termination of this Agreement. In the
event Purchaser elects to proceed to Closing, the Pro Formas shall be revised to
(i) delete those Requirements objected to by CTF and (ii) add Purchaser’s
Objections that CTF will not cure so that the Pro Formas shall be consistent
with the quality of title accepted or deemed accepted by Purchaser pursuant to
this Section 9.1(d).

 

(e) Requirement to Eliminate Purchaser’s Objections; Requirement to Remove
Liens; Additional Title Matters. It is expressly understood that unless CTF
expressly agrees, in the exercise of its sole discretion, to remove a title
exception identified in Purchaser’s Objections prior to Closing, neither CTF nor
Marriott shall be required to bring any action, institute any proceeding, or
otherwise incur any costs or expenses in order to attempt to eliminate any of
the Purchaser’s Objections or to otherwise cause title to the Properties to
comport with the terms of this Agreement on the Closing Date; provided, however,
that Marriott shall use Commercially Reasonable Efforts to cause CTF to remove
(i) any liens that are filed against the Real Properties during the period after
the expiration of the Title Cure Period and before the Closing, but

 

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only if they are recorded by CTF or caused by CTF’s action or failure to act,
and (ii) any liens securing Debt. Should matters relative to title, other than
liens the CTF is obligated to remove pursuant to the preceding sentence, be
discovered from any update of the Title Materials received by Purchaser or
otherwise after the expiration of the Objection Period that were not disclosed
in the Title Materials received by Purchaser prior to the expiration of the
Objection Period (collectively the “New Title Matters”), Purchaser shall have
the right to notify Marriott in writing of any New Title Matters which are not
Permitted Encumbrances set forth in (b) – (d) of the definition thereof to which
Purchaser objects, provided that Purchaser notifies Marriott of its objection
within twenty-four (24) hours after such matter is disclosed to Purchaser.
Marriott shall use Commercially Reasonable Efforts to cause CTF to remove any
New Title Matters that are filed against any of the Real Properties during the
period after the expiration of the Title Cure Period and before Closing but only
if they are recorded by CTF or caused by CTF’s actions or failure to act in
circumstances where CTF is under a legal or contractual duty to act. With
respect to all other New Title Matters, Marriott shall cause CTF within five (5)
days after receipt of notice of the New Title Matters, to advise Marriott
whether CTF will cure such New Title Matters prior to the Closing Date and
Marriott will promptly notify Purchaser of CTF’s response. Should CTF fail to
cure or remove prior to the Closing Date any New Title Matter which is objected
to by the Purchaser, and should such New Title Matter materially and adversely
impair the value or use of any of the Real Properties to which such objection
relates, such failure shall constitute a failure of a condition to Purchaser’s
obligation to proceed to Closing with respect to such Real Properties affected
by such New Title Matters and the Purchaser may, at its election, determine not
to close with respect to such Real Properties. All other New Title Matters which
are not cured or removed by CTF shall be deemed waived by Purchaser and shall
constitute Permitted Encumbrances for all purposes under this Agreement and the
Ancillary Agreements. If Purchaser elects not to proceed to close with respect
to any Real Properties in accordance with this Section 9.1(e), in such case, the
Unadjusted Purchase Price shall be decreased by the Preliminary Allocated Price
applicable to any such Real Properties.

 

(f) Related Fees, Costs and Expenses. All the fees, costs and expenses
associated with the Purchaser’s procurement, preparation, delivery and review of
the Title Materials, the issuance of title policies and any endorsements related
thereto shall be for the account of the Purchaser pursuant to Section 13.1
herein.

 

(g) Marriott Assurance. Marriott covenants and agrees to cooperate with the
Purchaser in connection with the Title Materials and the title review process
and will cause CTF to provide such affidavits or other documents and information
as the Purchaser may reasonably require in order to obtain affirmative
endorsements or other assurances available under local practice as the Purchaser
may require, including non-imputation endorsements, where applicable, provided,
however, that (i) all of the foregoing requirements are commercially reasonable,
and (ii) Marriott shall not be obligated to cause CTF to provide any affidavit,
certification or indemnification to the Title Company that causes CTF to incur
any liability in excess of CTF’s liability under the CTF Agreement.

 

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(h) Form of Fee Sale Transfer and Conveyance Documents. Not later than the
expiration of the Objection Period, Purchaser shall prepare and forward to
Marriott the proposed form of the deeds, bills of sale, assignments,
certificates, affidavits and such other instruments and documents (excluding any
documents previously provided in connection with the Requirements) (collectively
the “Proposed Conveyance Documents”) as may be reasonably necessary in order to
consummate the Transactions and facilitate the issuance by the Title Company of
the title insurance policies reasonably requested by Purchaser and facilitate
the obtaining of other commercially reasonable assurances available under local
practice. Marriott and Purchaser shall negotiate in good faith to agree upon the
final form of the Proposed Conveyance Documents on or prior to the Closing Date.
Purchaser and Marriott acknowledge and agree that the warranty of title set
forth in the various deeds and other conveyancing documents shall be in
accordance with the commercially reasonable customary practices of the
applicable jurisdictions but in all cases sufficient to enable the Title Company
to issue the title policies in the forms of the Pro Formas. The warranties of
title contained in the various deeds shall not be subject to the provision of
Section 10.8(b) of this Agreement. Nothing herein shall be construed as
requiring CTF to make any representations, warranties or covenants in the
Proposed Conveyance Documents other than those contained in Article 5 and
Article 7 of the CTF Agreement.

 

Section 9.2. Lack of Consent or Estoppels for Certain Hotels.

 

(a) If any consent required for the assignment of the Leasehold Interest in the
Renaissance Chicago Hotel or the Renaissance Vinoy (the “Mandatory Consent
Hotel”) is not obtained on or before the Closing Date, in such case:

 

(i) the Leasehold Interest with respect to the Renaissance Chicago Hotel or the
Renaissance Vinoy, as the case may be, shall not be assigned to Purchaser at the
Closing;

 

(ii) The Unadjusted Purchase Price shall be decreased by the amount of the
Preliminary Allocated Price for the Renaissance Chicago Hotel or Renaissance
Vinoy, as the case may be; and

 

(iii) from and after the Closing through to December 31, 2005, Marriott and the
Purchaser shall use Commercially Reasonable Efforts to obtain and secure
consents and approvals that may be necessary to effect the assignment of the
Leasehold Interest for the Renaissance Chicago Hotel and the Renaissance Vinoy
and make or complete such assignment as soon as reasonably possible, with the
payment of additional consideration to CTF in the amount of the Preliminary
Allocated Price, it being understood that if such consent is not obtained on or
before December 31, 2005, this Agreement as to the Renaissance Chicago Hotel or
the Renaissance Vinoy, as applicable, shall terminate and neither party shall
have any further obligations or liabilities with regard thereto.

 

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(b) If any Estoppel Certificate satisfying the requirements of Section 7.9(d) is
not obtained prior to the Closing Date or if obtained, contains information
which is inconsistent with Marriott’s representations and warranties set forth
herein in Article 5 or 5A, then Purchaser shall elect to either: (i) proceed
with Closing with respect to the applicable Hotel or Hotels and waive any right
to require the receipt of an Estoppel Certificate and the right to make a claim
for indemnification under Article 10 based upon the facts or circumstances
disclosed by the applicable Estoppel Certificate, or (ii) elect not to proceed
with Closing with respect to the applicable Hotel or Hotels (in which case the
Unadjusted Purchase Price shall be decreased by the Preliminary Allocated Price
for such Hotel or Hotels) in order to permit Marriott a period of time during
which to attempt to obtain an Estoppel Certificate in the form required hereby.
In the event that Purchaser elects under clause (ii) above to permit Marriott
additional time to obtain an Estoppel Certificate and Marriott fails to deliver
an Estoppel Certificate satisfying the requirements of Section 7.9(d) to
Purchaser prior to December 31, 2005, then Purchaser shall either (A) elect not
to have the Leasehold Interest with respect to the applicable Hotel assigned to
Purchaser at the Closing and the Unadjusted Purchase Price shall be decreased by
the amount of the Preliminary Allocated Price for the applicable Hotel, or (B)
shall proceed to consummate the Transaction with respect to the applicable Hotel
and shall retain any rights it may have under the indemnification provisions of
Article 10.

 

Section 9.3. General Conditions. The respective obligations of the Purchaser and
Marriott to consummate the transactions contemplated by this Agreement shall be
subject to the fulfillment, at or prior to the Closing, of each of the following
conditions, any of which may, to the extent permitted by applicable Law, be
waived in writing by either party in its sole discretion:

 

(a) No Governmental Authority shall have enacted, issued, promulgated, enforced
or entered any Law (whether temporary, preliminary or permanent), that is then
in effect and that enjoins, restrains, makes illegal or otherwise prohibits the
consummation of the transactions contemplated by this Agreement or the Ancillary
Agreements.

 

(b) Any waiting period (and any extension thereof) under any antitrust laws
applicable to the transactions contemplated by this Agreement and the Ancillary
Agreements shall have expired or shall have been terminated. All other material
consents of, or registrations, declarations or filings with, any Governmental
Authority legally required for the consummation of the transactions contemplated
by this Agreement and the Ancillary Agreements shall have been obtained or filed
or (with respect to liquor licenses) shall be in the process of being obtained
and Marriott shall be responsible for the process with respect to liquor
licenses such that there will be no interruption in the sale of liquor at the
Hotels being purchased by Purchaser.

 

(c) Closing under the CTF Agreement with respect to the Hotels shall have
occurred or shall occur simultaneously with Closing hereunder.

 

 

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Section 9.4. Conditions to the Obligations of Marriott. The obligations of
Marriott to consummate the transactions contemplated by this Agreement shall be
subject to the fulfillment, at or prior to the Closing, of each of the following
conditions, any of which may be waived in writing by Marriott in its sole
discretion:

 

(a) The Purchaser shall have performed in all material respects all obligations
and agreements and complied in all material respects with all covenants and
conditions required by this Agreement to be performed or complied with by it
prior to or at the Closing and Marriott shall have received from the Purchaser a
certificate to such effect, signed by a duly authorized officer thereof.

 

(b) Marriott shall have received an executed counterpart of each of the
Purchaser’s Closing Deliveries as set forth on Schedule 9.4(b), signed by each
party thereto other than Marriott.

 

Section 9.5. Conditions to the Obligations of the Purchaser. The obligations of
the Purchaser to consummate the transactions contemplated by this Agreement
shall be subject to the fulfillment, at or prior to the Closing, of each of the
following conditions, any of which may be waived in writing by the Purchaser in
its sole discretion:

 

(a) There shall not have occurred any of the following:

 

(i) an event or matter which constitutes a breach of a representation and
warranty in Sections 5.2, 5.3(a)-(e), 5.11(a), 5.2A or 5.3A;

 

(ii) the entry against CTF of an Order which constitutes a breach of a
representation and warranty in Section 5.8(b) and, as of the Closing, prevents a
Hotel from operating in the Ordinary Course of Business in all material
respects; or

 

(iii) an event or matter, other than a Casualty Loss, that constitutes a breach
of any other of CTF’s representations, warranties or covenants contained in the
CTF Agreement or Marriott’s representations, warranties or covenants contained
in this Agreement that (A) with respect to any Group A Hotels, or the Hotel
Interests related thereto, adversely impacts the value of one or more of such
Hotels, or the Hotel Interests related thereto, by more than the Group A
Threshold Amount or (B) with respect to any Group B Hotels, or the Hotel
Interests related thereto, adversely impacts the value of one or more of such
Hotels, or the Hotel Interests related thereto, by more than the Group B
Threshold Amount,

 

provided, however, if Purchaser determines not to proceed with Closing with
respect to such Hotel, Purchaser’s sole remedy in event of such breach shall be
that: (1) Marriott shall not cause CTF to assign, transfer, convey or deliver
such Hotel Interest affected by such breach to the Purchaser at the Closing, and
(2) the Unadjusted Purchase Price shall be reduced by the Preliminary Allocated
Price for such Hotel Interest.

 

(b) Marriott shall have performed in all material respects all obligations and
agreements and complied in all material respects with all covenants and
conditions required by this Agreement to be performed or complied with by it
prior to or at the Closing and the Purchaser shall have received from Marriott a
certificate to such effect, signed by a duly authorized officer thereof.

 

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(c) Purchaser shall have received an executed counterpart of each of Marriott’s
Closing Deliveries as set forth on Schedule 9.5(c), signed by each party thereto
other than the Purchaser.

 

(d) At the Closing, issuance by the Title Company of a title policy identical in
all material respects to the Pro Formas for the Real Property related to the
Hotel Interests being transferred at the Closing as each such Pro Forma has been
modified in accordance with the provisions of Section 9.1(d), subject only to
changes required to incorporate a New Title Matter accepted by Purchaser in
accordance with Section 9.1(e).

 

ARTICLE 10. INDEMNIFICATION.

 

Section 10.1. Pass-Through Representations.

 

(a) The representations and warranties set forth in Section 5.1 through Section
5.17 hereof are substantially identical to those certain representations and
warranties made by CTF to Marriott in Sections 5.1 through 5.17 of the CTF
Agreement (the “Pass Through Representations”). Wherever in this Agreement
Marriott has made a covenant to perform, or to cause CTF to perform, an
obligation which CTF has undertaken to perform for the benefit of Marriott in
the CTF Agreement, such covenants shall be referred to herein as the “Pass
Through Covenants”. Purchaser acknowledges that Marriott may have no direct or
actual knowledge of the facts contained in certain of the Pass Through
Representations and except as set forth in Section 5.17A that Marriott is
relying exclusively on the correctness of the Pass Through Representations of
CTF in making the Pass Through Representations to Purchaser and that Marriott
has no independent capability to perform certain covenants of CTF. Purchaser
acknowledges and agrees that Marriott’s liability to Purchaser for any Breach of
the Pass Through Representations or any breach or failure to perform any of the
Pass Through Covenants shall be, and shall be limited to, the actual monetary
damages or other relief received by Marriott based on the breach of the Pass
Through Representations and/or Pass Through Covenants by CTF. Except as set
forth in this Section 10.1(a)-(b), Marriott shall have no liability or
obligation to Purchaser for any Breach by Marriott of the Pass Through
Representations or Pass Through Covenants.

 

(b) Upon the occurrence of a Breach of the Pass Through Representations and/or
Pass Through Covenants and upon Purchaser making a claim against Marriott,
Marriott shall exercise any and all rights and remedies available to Marriott
under the CTF Agreement or at law or in equity (i) to bring against CTF a claim
for indemnification and institute litigation to enforce such claim to the same
extent as made by Purchaser against Marriott (but only to, and in the manner
permitted by the CTF Agreement and subject to the limitations of Article 10 of
the CTF Agreement, which for the avoidance of doubt, exempts Tax matters from
any such limitations imposed by Article 10 of the CTF Agreement) (a “Mirror
Claim”); and (ii) to seek as damages in the

 

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Mirror Claim, all Losses of the Purchaser arising from the Mirror Claim (but
only to in the manner permitted by this Agreement and subject to the limitations
of Article 10 as aforesaid). In taking any action against CTF, Purchaser shall
have the right to select counsel and to manage any and all claims, actions,
causes of action and/or litigation which Marriott may pursue in order to enforce
its rights hereunder. Marriott shall cooperate fully with Purchaser in
Purchaser’s efforts to enforce its right based on a Breach of the Pass Through
Representations and/or Pass Through Covenants. Purchaser shall be responsible
for, and shall pay all of Purchaser’s reasonable expenses which Purchaser may
suffer, incur or expend in its efforts to enforce its rights against CTF,
including, without limitation, reasonable counsel fees, fees of experts, and
court costs and may include such costs as a part of its claim for damages.

 

Section 10.2. Survival of Representations, Warranties and Indemnities. The
representations, warranties and covenants of Marriott and the Purchaser
contained in this Agreement shall survive the Closing until April 30, 2007,
except as to Section 7.12 which shall survive until the applicable statute of
limitations, if longer; provided, however, that the representations and
warranties set forth in Sections 5.2, 5.3(a)-(e), 5.2A, 5.3A, 7.4 and 7.11 shall
survive indefinitely. Survival of the representations and warranties in Sections
5.16 and 5.16A shall be governed by the provisions of Section 8.9.

 

Section 10.3. Indemnification by Marriott. Subject to the terms and conditions
of this Article 10, Marriott shall save, defend, indemnify and hold harmless the
Purchaser (including the Targets and their Subsidiaries) and the respective
Representatives, successors and assigns of each of the foregoing (collectively,
the “Purchaser Indemnified Parties”) from and against any and all losses,
damages, liabilities, deficiencies, claims, interest, awards, judgments,
penalties, costs and expenses (including reasonable attorneys’ fees, costs and
other out-of-pocket expenses incurred in investigating, preparing or defending
the foregoing) (hereinafter collectively, “Losses”), incurred, sustained or
suffered by any of the foregoing to the extent arising out of or resulting from:

 

(a) any breach of any representation or warranty made by Marriott contained in
this Agreement other than the Pass Through Representations set forth in Section
5 of this Agreement and representations made in Section 5.18A;

 

(b) any breach of any representation or warranty made by Marriott contained in
Section 5.18A of this Agreement, provided, however, that Marriott’s liability in
connection therewith is limited to its proportionate share of any such Loss as
the seller of its twenty percent (20%) equity interest therein;

 

(c) any breach of any covenant or agreement by Marriott (hereinafter the
“Marriott Covenants”) contained in this Agreement other than a Pass Through
Covenant;

 

(d) any Third Party Claim that arises from an event occurring prior to Closing
regarding any Interest Holder other than (i) a liability reflected on the
Balance Sheet of such Target to the extent of the amount so reflected, or (ii)
any Assumed Liability and any other liability expressly assumed by Purchaser
under this Agreement to the extent of the amount so assumed;

 

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(e) any liability for any brokers’ or investment banking fees of Marriott or its
Affiliates in connection with this Agreement and the transactions contemplated
hereby; and

 

(f) arising other than from Marriott’s actions or failure to take actions where
required, all obligations, penalties, liabilities and expenses under the Worker
Adjustment and Retraining Notification Act of 1988, as amended, or other similar
state laws, arising from the Transactions.

 

Section 10.4. Indemnification by the Purchaser. The Purchaser shall save,
defend, indemnify and hold harmless Marriott and its Affiliates and the
respective Representatives, successors and assigns of each of the foregoing
(collectively, the “Marriott Indemnified Parties”) from and against any and all
Losses incurred, sustained or suffered by any of the foregoing to the extent
arising out of or resulting from:

 

(a) any breach of any representation or warranty made by the Purchaser contained
in this Agreement;

 

(b) any breach of any covenant or agreement by the Purchaser contained in this
Agreement;

 

(c) any Third Party Claim that arises from an event that occurs after the
Closing against any Seller Indemnified Party (as defined in the CTF Agreement)
with respect to the operations or ownership of the Hotels or Hotel Interest,
except to the extent that such claim or cause of action (i) was caused by a
breach of Marriott’s obligations and duties as manager under the Hotel
Management Agreements or with respect to which Marriott is otherwise responsible
pursuant to the terms and conditions of the Hotel Management Agreements (in
which event the terms and conditions of the Hotel Management Agreements shall
govern); (ii) was made by Marriott or an Affiliate of Marriott against a Seller
Indemnified Party, or (iii) would not have arisen if the representations,
warranties and covenants of CTF in the CTF Agreement and the representations,
warranties and covenants of Marriott in this Agreement were true, accurate and
fulfilled.

 

(d) any Assumed Liabilities; or

 

(e) any claim for any brokers’ or investment banking fees of the Purchaser in
connection with this Agreement and the transactions contemplated hereby.

 

Section 10.5. Procedures.

 

(a) In order for a Purchaser Indemnified Party or Marriott Indemnified Party
(the “Indemnified Party”) to be entitled to any indemnification provided for
under this Agreement in respect of, arising out of or involving a Loss or a
claim or demand made by any Person (other than Marriott and its Affiliates and
the Purchaser) against the Indemnified Party, including a Mirror Claim (a “Third
Party Claim”), such Indemnified

 

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Party shall deliver notice thereof to the party against whom indemnity is sought
(the “Indemnifying Party”) promptly after receipt by such Indemnified Party of
written notice of the Third Party Claim, but in no event later than the Claims
Deadline, describing in reasonable detail the facts giving rise to any claim for
indemnification hereunder, the amount or method of computation of the amount of
such claim (if known) and such other information with respect thereto as the
Indemnifying Party may reasonably request. The failure to provide as part of the
initial written notice of claim, the information set forth in the preceding
sentence shall not invalidate the effectiveness of the written notice provided
the information is delivered in a reasonable time period thereafter. The failure
to provide such notice, however, shall not release the Indemnifying Party from
any of its obligations under this Article 10 except to the extent that the
Indemnifying Party is prejudiced by such failure.

 

(b) The Indemnifying Party shall have the right, upon written notice to the
Indemnified Party within thirty (30) days of receipt of notice from the
Indemnified Party of the commencement of such Third Party Claim (except as may
be provided to the contrary as to a Mirror Claim, in which case Purchaser shall
bear all the costs associated therewith), to assume the defense thereof at the
expense of the Indemnifying Party with counsel selected by the Indemnifying
Party and reasonably satisfactory to the Indemnified Party. If the Indemnifying
Party assumes the defense of such Third Party Claim, the Indemnified Party shall
have the right to employ separate counsel and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
the Indemnified Party. If the Indemnifying Party assumes the defense of any
Third Party Claim, the Indemnified Party shall cooperate with the Indemnifying
Party in such defense and make available to the Indemnifying Party all
witnesses, pertinent records, materials and information in the Indemnified
Party’s possession or under the Indemnified Party’s control relating thereto as
is reasonably required by the Indemnifying Party. If the Indemnifying Party
assumes the defense of any Third Party Claim, the Indemnified Party shall not
admit any liability with respect to, or settle, compromise or discharge, or
offer to compromise, settle or discharge, such Third Party Claim without the
Indemnifying Party’s prior written consent unless the Indemnifying Party
withdraws from the defense of such Third Party Claim or unless a final judgment
from which no appeal may be taken by or on behalf of the Indemnifying Party is
entered against the Indemnified Party for such Third Party Claim. If the
Indemnifying Party does not assume the defense of any such claims or proceeding
pursuant to this Section 10.5 and the Indemnified Party proposes to settle such
claims or proceeding prior to a final judgment thereon or to forgo any appeal
with respect thereto, then the Indemnified Party shall give the Indemnifying
Party prompt written notice thereof and the Indemnifying Party shall have the
right to participate in the settlement or assume or reassume the defense of such
claims or proceeding. The Indemnifying Party and its counsel shall conduct such
defense or settlement in a manner reasonably satisfactory and effective to
protect the Indemnified Party fully. The Indemnifying Party and its counsel
shall keep the Indemnified Party fully advised as to its conduct of such defense
or settlement, and shall not compromise or settle such Third Party Claim without
the prior written consent of the Indemnified Party (not to be unreasonably
withheld or delayed) unless such settlement or compromise does not subject the
Indemnified Party to any monetary liability, includes a complete, unconditional
release of the Indemnified Party from all

 

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liability with respect to such Third Party Claim, and does not constitute an
acknowledgement or acceptance by the Indemnified Party of fault, culpability, or
responsibility of any kind. Notwithstanding the Indemnifying Party’s election to
defend against or settle the Third Party Claim, the Indemnified Party may, upon
written notice to the Indemnifying Party, elect to employ its own counsel and
assume control of such defense or settlement if (A) the Indemnifying Party is
also a Person against whom the Third Party Claim is made and the Indemnified
Person determines in good faith that joint representation would be
inappropriate; (B) the Indemnified Party determines in good faith that the
Indemnified Party may have available to its one or more defenses or
counterclaims that are inconsistent with, different from, or in addition to one
or more of those that may be available to the Indemnifying Party with respect to
such Third Party Claim; (C) the Indemnifying Party fails to provide reasonable
assurance to the Indemnified Party of its financial capacity to defend such
Third Party Claim; (D) the Indemnifying Party shall not in fact have employed
counsel reasonably satisfactory to the Indemnified Party for the defense or
settlement of such Third Party Claim; provided, however, that the assumption of
control of the defense or settlement of a Third Party Claim by the Indemnified
Party pursuant to this sentence shall not relieve the Indemnifying Party of its
obligation to indemnify and hold the Indemnified Party harmless.

 

(c) In the event any Indemnified Party should have a claim against any
Indemnifying Party hereunder that does not involve a Third Party Claim being
asserted against or sought to be collected from such Indemnified Party, the
Indemnified Party shall deliver notice of such claim to the Indemnifying Party
no later than the Claims Deadline, describing in reasonable detail the facts
giving rise to any claim for indemnification hereunder, the amount or method of
computation of the amount of such claim (if known) and such other information
with respect thereto as the Indemnifying Party may reasonably request. The
failure to provide as part of the initial written notice of claim, the
information set forth in the preceding sentence shall not invalidate the
effectiveness of the written notice provided the information is provided
subsequently. The failure to provide such notice, however, shall not release the
Indemnifying Party from any of its obligations under this Article 10 except to
the extent that the Indemnifying Party is prejudiced by such failure. The
Indemnifying Party shall have thirty (30) days after receipt of notice of any
claim pursuant to this Section 10.5(c) to (i) agree to the amount or method of
determination set forth in such claim and to pay such amount to such Indemnified
Party or (ii) provide the Indemnified Party with notice (a “Dispute Notice”)
that it disagrees with the amount or method of determination set forth in such
claim. If the Indemnifying Party has timely delivered a Dispute Notice, the
Indemnifying Party and the Indemnified Party shall, during a period thirty (30)
days from the Indemnified Party’s receipt of such Dispute Notice, negotiate to
achieve of resolution of such dispute and, if not resolved through negotiations,
such dispute shall be resolved as provided in Section 13.10.

 

Section 10.6. Limits on Indemnification.

 

(a) No claim may be asserted against any party for breach of any representation
or warranty contained in this Agreement, unless written notice of such

 

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claim is received by such party describing in reasonable detail the facts and
circumstances with respect to the subject matter of such claim on or prior to
May 30, 2007 (the “Claim Deadline”) in which case such representation, warranty
or covenant shall survive as to such claim until such claim has been finally
resolved. Notwithstanding the foregoing, there shall be no Claims Deadline
applicable to a claim raised with respect to a breach of Sections 5.2,
5.3(a)-(e), 5.2A, 5.3A, 7.4 and 7.11 hereof. In addition, no claim may be
asserted against Marriott for breach of any of CTF’s or Marriott’s
representations or warranties to the extent that (i) the Title Materials, or
(ii) the reports of the Structural and Environmental Consultants contain
information that is inconsistent with such representations or warranties.

 

(b) Notwithstanding anything to the contrary contained in this Agreement, with
respect to each Fee Property, Target or Leasehold Interest: (i) Marriott shall
not be liable for any claim for indemnification of $5,000.00 or less pursuant to
Section 10.1(a), 10.1(b), or 10.3 resulting from any single claim or aggregated
claims arising out of the same facts, events or circumstances (the “De Minimus
Amount”), (ii) Marriott shall not be liable unless and until the aggregate
amount of indemnifiable Losses which may be recovered from Marriott on account
of all claims equals or exceeds $50,000 (the “Threshold Amount”), at which time
Marriott shall be liable for all such Losses, (iii) the maximum aggregate amount
of indemnifiable Losses which may be recovered by Purchaser Indemnified Parties
arising out of or relating to the causes set forth in Section 10.3(a), 10.3(b),
10.3(c) or 10.3(d) in relation to any single Fee Property, Target or Leasehold
Interest shall equal fifty percent (50%) of the Preliminary Allocated Price in
respect of such Fee Property, Target or Leasehold Interest, as the case may be
(the “Indemnification Limit”), (iv) no party hereto shall have any liability
under any provision of this Agreement for any punitive, consequential,
incidental, special or indirect damages, relating to the breach or alleged
breach of this Agreement. Notwithstanding the foregoing, (A) the Indemnification
Limit applicable to Losses related to a breach of a representation, warranty or
covenant under Sections 5.2, 5.3(a)-(e), 5.2A and 5.3A shall be the Preliminary
Allocated Price of each Target and (B) the De Minimus Amount and the Threshold
Amount shall not be applicable to Losses related to a breach of a
representation, warranty or covenant under Section 5.13(b)(iv).

 

(c) For all purposes of this Article 10, “Losses” shall be net of (i) any
insurance (other than any self-insured retention program) or other recoveries
paid (subject to Section 10.8) by a third-party to the Indemnified Party or its
Affiliates in connection with the facts, events or circumstances giving rise to
the right of indemnification and (ii) any net Tax benefit available to such
Indemnified Party or its Affiliates arising in connection with the accrual,
incurrence or payment of any such Losses (including the net present value of any
Tax benefit arising in subsequent taxable years).

 

(d) The Purchaser and Marriott shall cooperate with each other with respect to
resolving any Third Party claim with respect to which one party is obligated to
indemnify the other party hereunder, including by making Commercially Reasonable
Efforts to mitigate such claim. In the event that the Purchaser or Marriott
shall fail to make such Commercially Reasonable Efforts to mitigate or resolve
any claim or liability,

 

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then notwithstanding anything else to the contrary contained herein, the other
party shall not be required to indemnify any person to the extent of any loss,
liability, claim, damage or expense that could reasonably be expected to have
been avoided if the Purchaser or Marriott, as the case may be, had made such
efforts.

 

(e) For purposes of this Article 10, “Losses” shall be determined in all cases
without regard to any qualification or limitation with respect to “materiality”
whether by reference to “in any material respect” or any other use of
“material.”

 

Section 10.7. Tax Matters. Anything in this Article 10 to the contrary
notwithstanding, the rights and obligations of the parties with respect to
indemnification for any and all Tax matters shall be governed by Article 8.

 

Section 10.8. Assignment of Claims. If any Purchaser Indemnified Party receives
any payment from Marriott in respect of any Losses pursuant to Section 10.3 and
the Purchaser Indemnified Party could have recovered all or a part of such
Losses from a third party (a “Potential Contributor”) based on the underlying
claim asserted against Marriott, the Purchaser Indemnified Party shall assign,
on a non-recourse basis and without any representation or warranty, such of its
rights to proceed against the Potential Contributor as are necessary to permit
Marriott to recover from the Potential Contributor the amount of such payment.
Any payment received in respect of such claim shall be distributed,(i) first to
the Purchaser Indemnified Party in the amount of any deductible or similar
amount required to be paid by the Purchaser Indemnified Party prior to Marriott
being required to make any payment to the Purchaser Indemnified Party,(ii)
second to Marriott in an amount equal to the aggregate payments made by Marriott
to the Purchaser Indemnified Party in respect of such claim, plus costs and
expenses incurred in investigating, defending or otherwise incurred in
connection with addressing such claim and (iii) the balance, if any, to the
Purchaser Indemnified Party.

 

Section 10.9. Disclaimer of Implied Warranties.

 

(a) It is the explicit intent and understanding of each party hereto that
neither party hereto or its Representatives is making any representation or
warranty whatsoever, oral or written, express or implied, as to the accuracy or
completeness of any information regarding the Property, except as expressly set
forth in this Agreement, and neither party hereto is relying on any statement,
representation or warranty, oral or written, express or implied, made by the
other party hereto or such other party’s Representatives, except for the
representations and warranties expressly set forth in this Agreement and the
conveyance documents contemplated hereunder.

 

(b) Each party hereto hereby agrees and acknowledges that each of the conveyance
documents contemplated hereunder and under the CTF Agreement shall explicitly
reflect the fact that the Purchaser is purchasing the applicable Owned Real
Property or Leased Real Property on an “as is” condition “with all faults” and
without any warranties, representations or guaranties of any kind, oral or
written, express or implied, concerning the Property from or on behalf of
Marriott or CTF, except as may be expressly set forth in the representations and
warranties in this Agreement as

 

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contemplated under Section 9.1(g). The Purchaser acknowledges that, except as
may be expressly set forth in this Agreement and the conveyance documents
contemplated hereunder and under the CTF Agreement, Marriott has not, does not,
and will not make any representations, warranties or guaranties, of any kind,
oral or written, express or implied, concerning the Property including, without
limitation (i) the quality, adequacy, state of repair or physical condition of
the Property, (ii) the habitability, merchantability or fitness, suitability or
adequacy of the Property or any portion thereof for any particular use or
purpose, (iii) the zoning or other legal status of the Property, (iv) the
compliance by the Property, or any portion thereof, with any applicable codes,
laws, regulations, statutes, ordinances, covenants, conditions or restrictions
of any governmental or quasi-governmental entity or of any Person, or (v) the
environmental condition of the Property, including its compliance with
environmental laws and the presence or non-presence of hazardous substances.

 

ARTICLE 11. DEFAULT, REMEDIES.

 

Section 11.1. Purchaser’s Default. Should Purchaser default on its obligation
under this Agreement to purchase (a) the Fee Properties or (b) the Leasehold
Properties, and all conditions to Purchaser’s obligations were timely satisfied
in each case, as applicable, then Marriott shall be entitled to retain the
Deposit as liquidated damages and terminate this Agreement (and the retention of
the Deposit shall be the sole and exclusive remedy of Marriott for such breach)
in which event Purchaser shall have no rights under this Agreement or the CTF
Agreement, and Marriott shall have the right, but not the obligation, to close
under the CTF Agreement.

 

Section 11.2. Marriott’s Default.

 

(a) If all other parties, including CTF and the other purchaser of Hotels under
contract with Marriott to acquire such Hotels, shall have fully performed their
respective obligations under this Agreement and any other applicable Purchase
and Sale Agreement with regard to the Hotels including the CTF Agreement, and
Marriott shall default hereunder, Purchaser shall be entitled to receive from
Marriott as its sole and exclusive remedy (i) a refund of its Deposit and all
interest earned thereon, (ii) Purchaser’s Out of Pocket Costs, and (iii) a
payment in the amount of Five Million Dollars ($5,000,000).

 

(b) If Marriott shall default under this Agreement as a result of a default by
the other purchaser of any of the Hotels under contract with Marriott pursuant
to the CTF Agreement under its applicable Purchase and Sale Agreement, and such
default shall not have been caused by a default by CTF under the CTF Agreement,
Purchaser shall be entitled to receive from Marriott (i) a refund of its Deposit
and (ii) all interest earned thereon and its reasonable Purchaser’s Out of
Pocket Costs not to exceed Two Million Dollars ($2,000,000).

 

(c) If Marriott’s default hereunder results from a default by CTF under the CTF
Agreement, Marriott shall determine which if any remedy it wishes to pursue
against CTF and shall provide to Purchaser notice of such determination.
Purchaser shall

 

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have a period of ten (10) days after receipt of Marriott’s determination within
which to elect to participate in such action or not to so participate. If
Purchaser elects not to participate in any such action, this Agreement shall
terminate, the Deposit and all interest earned thereon shall be returned to
Purchaser, and Purchaser shall not be entitled to any damages. In any event, all
decisions as to the pursuit of remedies and the prosecution of any litigation
shall be made solely by Marriott. In any action for damages in which Purchaser
remains a party, Purchaser shall be entitled to its pro rata share of any
damages in fact awarded to, and received by Marriott, less its pro rata share of
any costs incurred by Marriott in pursuing such action.

 

(d) If Marriott defaults under this Agreement, and such default shall not have
resulted from a default by CTF under the CTF Agreement, and if thereafter
Marriott either acquires one or more of the Hotels under the CTF Agreement or
otherwise transfers its right to acquire one or more of the Hotels under the CTF
Agreement to a third party, Purchaser shall have the right to specific
performance as to this Agreement; provided, however, Purchaser must (i)
institute such action for Specific Performance against Marriott within three (3)
months from the first date on which Purchaser first learns or discovers that
Marriott has so acquired the Hotels under the CTF Agreement or so transferred
its rights under the CTF Agreement and (ii) as a closing condition to the
purchaser of such Hotels, repay to Marriott a fraction of any sums previously
paid by Marriott to Purchaser for out-of-pocket expenses as provided in Sections
11.2(a) and (b) hereof as to the Hotels (other than sums paid by Purchaser to
lenders, to the extent such sums are not applied by such lenders to the
financing used by Purchaser to purchase the Hotels in such action of specific
performance), the numerator of which fraction is the Preliminary Allocated Price
of the Hotels being purchased in such action for specific performance and the
denominator of which is the Preliminary Allocated Price of all Hotels. In the
event that an action for specific performance is not available, Purchaser shall
be entitled to a refund of its Deposit and all interest earned thereon and
Purchaser’s Out of Pocket Costs as liquidated damages.

 

ARTICLE 12. TERMINATION.

 

Section 12.1. Termination. This Agreement may be terminated at any time prior to
the Closing:

 

(a) by mutual written consent of the Purchaser and Marriott;

 

(b) (i) by Marriott, if any of the material conditions set forth in Section 9.3
or 9.4 shall have become incapable of fulfillment prior to the Termination Date]
or (ii) by the Purchaser, if any of the conditions set forth in Section 9.3 or
Section 9.5 shall have become incapable of fulfillment prior to the Termination
Date; provided, however, that the right to terminate this Agreement pursuant to
this Section 12.1(b) shall not be available if the failure of the party so
requesting termination to fulfill any obligation under this Agreement shall have
been the cause of the failure of such condition to be satisfied on or prior to
such date;

 

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(c) (1) by either Marriott or the Purchaser if the Closing shall not have
occurred by June 30, 2005 unless Closing under the CTF Agreement has been
extended by Marriott pursuant to Section 3.11 of the CTF Agreement and Purchaser
has elected pursuant to Section 3.9(c) hereof to postpone Closing, in which
event Closing hereunder shall be extended until November 15, 2005, or (2) if the
Closing shall not have occurred by November 15, 2005, by either Marriott or
Purchaser; provided, however, that the right to terminate this Agreement this
Section 12.1(c) shall not be available if the failure of the party so requesting
termination to fulfill any obligation under this Agreement shall have been the
cause of the failure of the Closing to occur on or prior to such date (June 30,
2005 or November 15, 2005, as applicable, (the “Termination Date”); or

 

(d) by either Marriott or the Purchaser in the event that any Governmental
Authority shall have issued an order, decree or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the transactions contemplated by
this Agreement and such order, decree, ruling or other action shall have become
final and non-appealable; provided, that the party so requesting termination
shall have complied with Section 7.10.

 

The party seeking to terminate this Agreement pursuant to this Section 12.1
(other than Section 12.1(a)) shall give prompt written notice of such
termination to the other party.

 

Section 12.2. Effect of Termination.

 

(a) In the event of termination of this Agreement as provided in Section 12.1,
this Agreement shall forthwith become void, the Deposit and all interest earned
thereon shall be returned to Purchaser, and there shall be no liability on the
part of either party except (a) for the representations of both parties relating
to broker’s fees and finder’s fees, Section 7.8 relating to confidentiality,
Section 7.11 relating to public announcements, Section 12.1 relating to fees and
expenses, Section 13.4 relating to notices, Section 13.8 relating to third-party
beneficiaries, Section 13.9 relating to governing law, Section 13.10 relating to
submission to jurisdiction and this Section 12.2, and (b) that nothing in this
Section 12.2 shall relieve either party from liability for any breach of this
Agreement or any Ancillary Agreement.

 

ARTICLE 13. GENERAL PROVISIONS.

 

Section 13.1. Fees and Expenses. Except as otherwise provided herein, all fees
and expenses incurred in connection with or related to this Agreement and the
Ancillary Agreements and the transactions contemplated hereby and thereby shall
be paid by the party incurring such fees or expenses, whether or not such
transactions are consummated. In the event of termination of this Agreement, the
obligation of each party to pay its own expenses will be subject to any rights
of such party arising from a breach of this Agreement by the other. All fees,
expenses and premiums in connection with any title insurance policies shall be
for the account of the Purchaser.

 

Section 13.2. Amendment and Modification. This Agreement may not be amended,
modified or supplemented in any manner, whether by course of conduct or
otherwise, except by an instrument in writing signed on behalf of each party and
otherwise as expressly set forth herein.

 

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Section 13.3. Waiver. No failure or delay of either party in exercising any
right or remedy hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such right or power, or any course of
conduct, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the parties hereunder are
cumulative and are not exclusive of any rights or remedies which they would
otherwise have hereunder. Any agreement on the part of either party to any such
waiver shall be valid only if set forth in a written instrument executed and
delivered by a duly authorized officer on behalf of such party.

 

Section 13.4. Notices. All notices and other communications hereunder shall be
in writing and shall be deemed duly given (a) on the date of delivery if
delivered personally, or if by facsimile, upon written confirmation of receipt
by facsimile, e-mail or otherwise, (b) on the first Business Day following the
date of dispatch if delivered by a recognized next-day courier service or (c) on
the earlier of confirmed receipt or the fifth Business Day following the date of
mailing if delivered by registered or certified mail, return receipt requested,
postage prepaid. All notices hereunder shall be delivered to the addresses set
forth below, or pursuant to such other instructions as may be designated in
writing by the party to receive such notice:

 

if to Marriott, to:

 

Marriott International, Inc.

10400 Fernwood Road

Bethesda, MD 20817

Attention: Michael E. Dearing

Facsimile:

 

with copies (which shall not constitute notice, except for matters regarding
Section 9.1(a)) to:

 

Venable LLP

Two Hopkins Plaza

Suite 1800

Baltimore, MD 21201

Attention: Jan K. Guben, Esq.

Facsimile: (410) 244-7742

 

if the Purchaser, to:

 

WSRH Holdings, LLC

c/o Walton Street Capital, L.L.C.

 

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900 North Michigan Avenue

Suite 1900

Chicago, Illinois 60611

Attention:        Jeffrey S. Quicksilver and

Luke G. Massar

Facsimile:         312-915-2881

 

with a copy (which shall not constitute notice) to:

 

Pircher, Nichols & Meeks

1925 Century Park East

Suite 1925

Los Angeles, California 90067

Attention:        Real Estate Notices (PGN/JLB)

Facsimile:        310-201-8922

 

Section 13.5. Interpretation. When a reference is made in this Agreement to an
Article, Section, Schedule or Exhibit such reference shall be to an Article,
Section, Schedule or Exhibit of this Agreement unless otherwise indicated. The
table of contents and headings contained in this Agreement or in any Exhibit are
for convenience of reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. All disclosures made on every
Schedule to this Agreement shall be deemed made for all Schedules attached to
this Agreement. All words used in this Agreement will be construed to be of such
gender or number as the circumstances require. Any capitalized terms used in any
Schedule or Exhibit but not otherwise defined therein shall have the meaning as
defined in this Agreement. All Schedules and Exhibits attached hereto or
referred to herein are hereby incorporated in and made a part of this Agreement
as if set forth herein. The word “including” and words of similar import when
used in this Agreement will mean “including, without limitation,” unless
otherwise specified. This Agreement and the Ancillary Agreements shall be
construed without regard to any presumption or rule requiring construction or
interpretation against the party drafting or causing any instrument to be
drafted. Whenever in this Agreement Marriott undertakes to cause CTF to take any
action or to deliver any materials to Purchaser, if Marriott, itself, takes such
action or delivers such material to Purchaser, such action or delivery by
Marriott shall be deemed full performance as to such action or delivery as is
required under this Agreement.

 

Section 13.6. Restriction on Acquisitions. Purchaser agrees that for one (1)
year from termination of this Agreement, without any of the Hotels being
purchased hereunder, neither Purchaser nor any persons or entity controlled by
Purchaser shall consummate, negotiate, offer, solicit offers, discuss, or
arrange, directly or indirectly, the acquisition of any Hotel or Target which is
the subject of the purchase and sale described in the CTF Agreement.

 

Section 13.7. Entire Agreement. This Agreement and the Ancillary Agreements,
Exhibits, Schedules and other agreements and instruments delivered in connection
herewith constitutes the entire agreement, and supersedes all prior written

 

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agreements, arrangements, communications and understandings and all prior and
contemporaneous oral agreements, arrangements, communications and understandings
among the parties with respect to the subject matter of this Agreement.
Furthermore, to the extent this Agreement or Ancillary Agreements conflict with,
or provide for remedies different from, any prior agreements between Marriott
and the Purchaser, this Agreement and the Ancillary Agreements shall control.
Neither this Agreement nor any Ancillary Agreement shall be deemed to contain or
imply any restriction, covenant, representation, warranty, agreement or
undertaking of any party with respect to the transactions contemplated hereby or
thereby other than those expressly set forth herein or therein or in any
document required to be delivered hereunder or thereunder, and none shall be
deemed to exist or be inferred with respect to the subject matter hereof.

 

Section 13.8. No Third-Party Beneficiaries. This Agreement shall be binding upon
and inure solely to the benefit of each of the parties and their respective
successors and assigns, and nothing in this Agreement, express or implied, is
intended to or shall confer upon any other Person any legal or equitable right,
benefit or remedy of any nature under or by reason of this Agreement, except as
provided in Article 10.

 

Section 13.9. Governing Law. This Agreement and all disputes or controversies
arising out of or relating to this Agreement or the transactions contemplated
hereby shall be governed by, and construed in accordance with, the internal laws
of the State of New York, without regard to the laws of any other jurisdiction
that might be applied because of the conflicts of laws principles of the State
of New York other than Section 5-1401 of the New York General Obligations Law.

 

Section 13.10. Submission to Jurisdiction. Each of the parties irrevocably
agrees that any legal action or proceeding arising out of or relating to this
Agreement or for recognition and enforcement of any judgment in respect hereof
brought by the other party or its successors or assigns may be brought and
determined in any New York State or federal court sitting in the Borough of
Manhattan in The City of New York (or, if such court lacks subject matter
jurisdiction, in any appropriate New York State or federal court), and each of
the parties hereby irrevocably submits to the exclusive jurisdiction of the
aforesaid courts for itself and with respect to its property, generally and
unconditionally, with regard to any such action or proceeding arising out of or
relating to this Agreement and the transactions contemplated hereby. Each of the
parties further agrees to accept service of process in any manner permitted by
such courts. Each of the parties hereby irrevocably and unconditionally waives,
and agrees not to assert, by way of motion or as a defense, counterclaim or
otherwise, in any action or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby, (a) any claim that it is not
personally subject to the jurisdiction of the above-named courts for any reason
other than the failure lawfully to serve process, (b) that it or its property is
exempt or immune from jurisdiction of any such court or from any legal process
commenced in such courts (whether through service of notice, attachment prior to
judgment, attachment in aid of execution of judgment, execution of judgment or
otherwise) and (c) to the fullest extent permitted by law, that (i) the suit,
action or proceeding in any such court is brought in an inconvenient forum, (ii)
the venue of such suit, action or proceeding is improper or (iii) this
Agreement, or the subject matter hereof, may not be enforced in or by such
courts. This Section 13.10 supersedes any dispute resolution clause contained in
any agreement between Marriott and the Purchaser.

 

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Section 13.11. Personal Liability. This Agreement shall not create or be deemed
to create or permit any personal liability or obligation on the part of any
direct or indirect stockholder of Marriott or the Purchaser or any officer,
director, employee, Representative or investor of either party hereto.

 

Section 13.12. Assignment; Successors. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement may be assigned or
delegated, in whole or in part, by operation of law or otherwise, by either
party without the prior written consent of the other party, and any such
assignment without such prior written consent shall be null and void; provided,
however, that Purchaser may assign this Agreement to any of its Affiliates
without the prior consent of Marriott and; provided further, that Marriott may
assign any of its rights under this Agreement to one or more of its Affiliates
without the consent of the Purchaser and; provided still further, that no
assignment shall limit the assignor’s obligations hereunder. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit
of, and be enforceable by, the parties and their respective successors and
assigns.

 

Section 13.13. Currency. All references to “dollars” or “$” or “US$” in this
Agreement or any Ancillary Agreement refer to United States dollars, which,
except as explicitly set forth herein, is the currency used for all purposes in
this Agreement and any Ancillary Agreement. All references to “€” in this
Agreement or any Ancillary Agreement refer to the European Union euro.

 

Section 13.14. No Brokers. The parties hereto represent and warrant to each
other that neither has dealt with any broker or intermediary in connection with
the Transaction. Marriott and Purchaser do hereby indemnify and hold harmless
the other from and against any claims by any brokers with whom the indemnifying
party may have dealt or is alleged to have dealt in connection with the
Transaction.

 

Section 13.15. Severability. Whenever possible, each provision or portion of any
provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable Law, but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable Law or rule in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.

 

Section 13.16. Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same instrument and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party.

 

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Section 13.17. Facsimile Signature. This Agreement may be executed by facsimile
signature and a facsimile signature shall constitute an original for all
purposes.

 

[The remainder of this page is intentionally left blank.]

 

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IN WITNESS WHEREOF, Marriott and the Purchaser have caused this Agreement to be
executed as of the date first written above by their respective officers
thereunto duly authorized.

 

MARRIOTT INTERNATIONAL, INC. By:  

/s/ M. E. Dearing

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

Name:   Michael E. Dearing Title:   Executive Vice President

 

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WSRH HOLDINGS, L.L.C., a Delaware limited liability company By:   Walton
Acquisition REOC Holdings IV, L.L.C.,     a Delaware limited liability company
Managing Member     By:   Walton Street Real Estate Fund IV, L.P.,         a
Delaware limited partnership Managing Member         By:   Walton Street
Managers IV, L.P.,             a Delaware limited partnership General Partner  
          By:   WSC Managers IV, Inc.,                 a Delaware corporation
General Partner                 By:  

/s/ Jeff Quicksilver

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

                Name:   Jeffrey Quicksilver                 Title:   Principal

 

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