Exhibit 10.1

Execution Version

PURCHASE AND SALE AGREEMENT

between

DIG EH HOTEL LLC

as Seller

and

SHR ESSEX HOUSE LLC

as Purchaser

Relating to

The Essex House

in New York, New York

dated

August 13, 2012

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TABLE OF CONTENTS

 

     Page  

1.      Property Identification

     1   

1.1    Property Identification

     1   

1.2    Excluded Property

     2   

2.      Purchase Price

     3   

3.      Title and Survey Matters

     4   

3.1    Update of Title

     4   

3.2    Approval of Title and Existing Survey

     4   

3.3    Title Insurance

     5   

4.      Inspection; Covenants

     5   

4.1    Access

     5   

4.2    Liquor License

     7   

4.3    Activities Prior to Closing

     8   

4.4    Additional Condominium Units

     11   

5.      Casualty Damage or Condemnation

     11   

5.1    Casualty

     11   

5.2    Condemnation

     11   

5.3    NY General Obligations Law Section 5-1311

     12   

6.      Representations, Warranties and Covenants

     12   

6.1    Seller’s Representations

     12   

6.2    Indemnity; Survival; Limitation of Liability

     18   

6.3    Purchaser’s Representations

     19   

6.4    Property Conveyed “As Is”

     21   

6.5    Release

     21   

7.      Conditions Precedent

     22   

7.1    Conditions Precedent to Purchaser’s Obligations

     22   

7.2    Conditions Precedent to Seller’s Obligations

     23   

8.      Closing

     23   

8.1    Closing Date

     23   

8.2    Seller’s Deliveries

     23   

8.3    Purchaser’s Deliveries

     25   

8.4    Costs and Prorations

     26   

8.5    Guest Ledger Receivables

     28   

8.6    Other Receivables

     29   

8.7    Insurance Premiums

     29   

8.8    Unredeemed Gift Items

     29   

8.9    Records

     29   

8.10 Notice to Tenants under the Leases

     29   

8.11 Branded Inventory, Supplies and Materials

     30   

8.12 Liquor Inventory

     30   

9.      Real Estate Commissions

     30   

 

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TABLE OF CONTENTS

(continued)

 

     Page  

10.    Termination And Default

     30   

10.1   Termination by Purchaser

     30   

10.2   PURCHASER’S DEFAULT; LIQUIDATED DAMAGES – DEPOSIT

     30   

10.3   Seller’s Default

     31   

10.4   Break Up Fee

     31   

10.5   Survival

     31   

11.    Employment and Employee Benefit Matters

     31   

11.1   Bargaining Unit Employees

     31   

11.2   Non-Bargaining Unit Employees

     32   

11.3   WARN Act

     33   

11.4   Indemnification

     33   

11.5   Sale of Assets – ERISA

     33   

11.6   Cooperation

     34   

11.7   Release of Employee Personnel Records

     34   

11.8   Third Party Rights

     34   

11.9   Survival

     34   

12.    Miscellaneous

     35   

12.1   Entire Agreement

     35   

12.2   Binding On Successors and Assigns

     35   

12.3   Assignment by Purchaser

     35   

12.4   Waiver

     35   

12.5   Governing Law; Submission to Jurisdiction

     35   

12.6   Counterparts

     36   

12.7   Notices

     36   

12.8   Attorneys’ Fees

     37   

12.9   IRS Real Estate Sales Reporting

     37   

12.10 Time Periods

     37   

12.11 Modification of Agreement

     37   

12.12 Further Instruments

     37   

12.13 Descriptive Headings

     38   

12.14 Time of the Essence

     38   

12.15 Business Day

     38   

12.16 Construction of Agreement

     38   

12.17 JURY TRIAL WAIVER

     38   

12.18 Survival

     38   

12.19 Submission not an Offer or Option

     38   

12.20 Disclosure

     38   

12.21 Guest Baggage and Safe Deposit Boxes

     39   

13.    General Escrow Provisions

     39   

 

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Exhibits

 

Exhibit 1.1(a)   —      Description of Hotel Unit Exhibit 1.1(b)   —     
Description of Commercial Unit Exhibit 1.1(c)   —      Description of
Residential Units Exhibit 1.2(e)   —      Jumeriah Excluded Personalty
Exhibit 2.1(b)(i)   —      Wiring Instructions Exhibit 4.3(h)(1)   —      Form
of Affidavit of Offeree Exhibit 4.3(h)(2)   —      Form of Affidavit of Offeror
Exhibit 4.3(j)   —      Form of Request to Mortgage Lender Exhibit 6.2(e)   —  
   Post Closing Escrow Agreement Exhibit 8.2(a)   —      Form of Deed
Exhibit 8.2(b)   —      Form of Bill of Sale and General Assignment
Exhibit 8.2(c)   —      Form of Assignment and Assumption of Leases
Exhibit 8.2(d)   —      Form of Assignment of Bookings and Booking Deposits
Exhibit 8.2(e)   —      Form of Assignment of Trademark Exhibit 8.2(g)   —     
Form of Notice to Vendors Exhibit 8.2(i)   —      Form of FIRPTA Certificate
Exhibit 8.2(k)   —      Form of Seller’s Affidavit to Title Company
Exhibit 8.2(r)   —      Form of Condominium Estoppel Exhibit 8.2(w)   —     
Form of Assignment and Assumption of Condominium Declaration Exhibit 8.3(c)  
—      Form of Assumption of Union Contract

 

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DEFINITIONS

 

     

Reference

 

2006 Plan

     6.1(w)(i)   

Access and Exclusivity Agreement

     4.1(a)(iv)   

Affiliate

     12.3   

Agreement

     Introduction   

Allocation

     2(b)(i)   

Balance of the Purchase Price

     2(a)(iii)   

Bargaining Unit Employees

     11.1   

Bill of Sale and Assignment

     8.2(b)   

Board

     6.1(w)(i)   

Bookings

     4.3(a)   

Broker

     4.1(b)   

Business Day

     12.15   

Closing

     8.1(a)   

Closing Date

     8.1(a)   

Closing Statements

     8.4(b)   

Code

     2(b)(iii)   

Commercial Unit

     1.1(b)   

Comp Letters

     6.1(aa)   

Condominium Charges

     8.4(b)(viii)   

Condominium Declaration

     6.1(w)(i)   

Condominium Management Agreement

     6.1(w)(iii)   

Condominium Units

     1.1(c)   

Confidentiality Agreement

     4.1(b)   

Cut-Off Time

     8.5   

Data Site

     4.1(a)   

Departmental Searches

     6.1(g)   

Deposit

     2(a)(i)   

Depositors

     12.21(b)   

Employee Benefit Plans

     6.1(o)(i)   

Environmental Requirements

     4.1(a)(ii)   

ERISA

     6.1(o)(i)   

ERISA Affiliate

     11.4(a)   

Escrow Account

     2(a)(ii)   

Escrow Agent

     2(a)(i)   

Execution Date

     3.1   

Existing Lender

     4.3(j)(i)   

Existing Survey

     3.1   

Existing Title Policy

     3.1   

FATCO

     3.1   

FF&E Balance

     8.4(b)(ix)   

Final Closing Statement

     8.4(b)   

Gift Cards and Certificates

     6.1(aa)   

Gift Items

     6.1(aa)   

Gift Shop Lease

     1.1(k)   

Gift Shop Tenant

     1.1(k)   

Hazardous Materials

     4.1(a)(ii)   

Hotel Management Agreement

     8.2(t)   

Hotel Manager

     1.2   

Hotel-Related Units

     1.1(b)   

Hotel Unit

     1.1(a)   

 

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Hotel Unit IP, Books and Records

     1.1(h)   

Improvements

     1.1(d)   

Inspection Agreement

     4.1(b)   

Insurance Policies

     1.2   

Intangible Property

     1.1(f)   

Intellectual Property

     1.1(i)   

Interim Agreement

     4.2   

Interim Jumeirah Agreement

     7.1(g)   

Jewelry Lease

     1.1(k)   

Jewelry Shop Tenant

     1.1(k)   

Land

     1.1(a)   

Lease(s)

     1.1(k)   

Liquor License

     4.2   

Losses

     4.1(a)(ii)   

Material Adverse Effect

     6.1(f)   

Miscellaneous Accounts Receivable

     8.6   

Mortgage Assignment

     4.3(j)(i)   

Multiemployer Plan

     6.1(o)(ii)   

No-Action Application

     4.3(h)   

Non-Bargaining Unit Employees

     11.2   

OAG

     4.3(g)   

Permitted Exceptions

     3.2(a)   

Permits

     1.1(f)   

Person

     12.3   

Personal Property

     1.1(e)   

Preliminary Closing Statement

     8.4(b)   

Property

     1.1   

Property Contracts

     1.1(g)   

Purchaser

     Introduction   

Purchaser Access Party(ies)

     4.1(a)   

Purchaser Claims

     6.2   

Purchaser’s Lender Designee

     4.3(j)(i)   

Purchaser Party(ies)

     6.2   

Purchase Price

     2   

Real Property

     1.1   

Reservations

     1.1(j)   

Reservation Deposits

     1.1(j)   

Residential Units

     1.1(c)   

Retained Baggage

     12.21(a)   

Revised Allocation

     2(b)(i)   

Seller

     Introduction   

Seller Claims

     6.3   

Seller Encumbrance

     3.2(a)   

Seller Party(ies)

     6.3   

Seller’s Letter

     2(b)(i)   

Seller Verification Notices

     12.21(b)   

SLA

     4.2   

SOL Reps

     6.2(b)   

Surety Period

     11.5   

Tax Reps

     6.2(c)   

Tenant(s)

     1.1(k)   

Tenant Deposit(s)

     1.1(k)   

Terminable Contract

     4.3(a)   

Title Commitment

     3.1   

Title Company

     3.1   

Title IV Plan

     6.1(o)(i)   

 

v

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Title Policy

     3.3   

Transferred Employees

     11.2   

Union Benefit Plans

     11.1   

Union Contract

     11.1   

Union Pension Plan

     11.5(a)   

WARN Act

     11.3   

 

vi

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PURCHASE AND SALE AGREEMENT

THIS PURCHASE AND SALE AGREEMENT (as amended, supplemented or otherwise modified
from time to time, this “Agreement”) is entered into as of August 13, 2012, by
and between DIG EH HOTEL LLC, a Delaware limited liability company (“Seller”),
and SHR ESSEX HOUSE LLC, a Delaware limited liability company (together with its
successors and assigns, “Purchaser”).

1. Property Identification.

1.1 Property Identification. Subject to the terms and provisions hereof, Seller
agrees to sell to Purchaser, and Purchaser agrees to purchase from Seller,
subject to the Permitted Exceptions, and subject to the right, title and
interest of guests, the Tenants, licensees and concessionaires in and to the
Hotel Unit and the Commercial Unit and to all other terms, covenants and
conditions set forth herein, the following:

(a) All right, title and interest in and to the condominium unit described as
the “Hotel Unit” on Exhibit 1.1(a) attached hereto in the building commonly
known as the Jumeirah Essex House together with the aggregate undivided interest
allocable to such condominium unit in (i) that certain parcel of land having a
street address of 160 Central Park South, New York, New York (the “Land”),
(ii) all privileges, rights, easements and appurtenances belonging to the Land,
(iii) all streets, alleys, passages, and other rights-of-way or appurtenances
included in, adjacent to or used in connection with the Land and (iv) all
mineral and development rights appurtenant to the Land; together with all
privileges, rights, easements and appurtenances belonging to such condominium
units (collectively, the “Hotel Unit”).

(b) All right, title and interest in and to the condominium unit described as
the “Commercial Unit” on Exhibit 1.1(b) attached hereto in the building commonly
known as the Jumeirah Essex House together with the aggregate undivided interest
allocable to such condominium unit in (i) the Land, (ii) all privileges, rights,
easements and appurtenances belonging to the Land, (iii) all streets, alleys,
passages, and other rights-of-way or appurtenances included in, adjacent to or
used in connection with the Land and (iv) all mineral and development rights
appurtenant to the Land; together with all privileges, rights, easements and
appurtenances belonging to such condominium units (collectively, the “Commercial
Unit”; the Hotel Unit and the Commercial Unit, collectively, the “Hotel-Related
Units”).

(c) All right, title and interest in and to the condominium units described as
Units 2001, 1720, 1826, 1910, 1912, 1915, 26TR, 3005 and 3214 on Exhibit 1.1(c)
attached hereto, and each other condominium unit which Purchaser agrees to
acquire in accordance with Section 4.4, in the building commonly known as the
Jumeirah Essex House together with the aggregate undivided interest allocable to
such condominium units in (i) the Land, (ii) all privileges, rights, easements
and appurtenances belonging to the Land, (iii) all streets, alleys, passages,
and other rights-of-way or appurtenances included in, adjacent to or used in
connection with the Land and (iv) all mineral and development rights appurtenant
to the Land; together with all privileges, rights, easements and appurtenances
belonging to such condominium units (collectively, the “Residential Units”; the
Hotel Unit, the Commercial Unit and the Residential Units, collectively, the
“Condominium Units”).

(d) All right, title and interests in and to the buildings, structures, fixtures
and other improvements situated upon or being part of the Condominium Units
(collectively, the “Improvements”).

(e) All furniture, equipment, machinery, inventories, supplies, signs and other
tangible personal property of every kind and nature, if any, owned by Seller
whether located at the Real Property or off-site (collectively, the “Personal
Property”).

(f) All of Seller’s right, title and interest, if any, in (i) all warranties,
guaranties and indemnities by and claims against third parties relating to the
Real Property and Personal Property, if any, to the extent assignable or
transferable, (ii) all licenses, permits, approvals, development rights,
certificates, variances, consents, authorizations and similar documents
necessary for the current use, occupancy and operation of the Real Property, to
the extent assignable or transferable (the items referred to in clause (ii)

 

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herein collectively, the “Permits”), (iii) all plans, specifications, drawings
(including CAD drawings and plans), surveys, engineering and other design
products, soils (including borings) tests and reports, project budgets and
schedules, and other technical descriptions and documents relating to the Real
Property, if any, to the extent assignable or transferable, (iv) any unpaid
award for taking by condemnation or any damage to the Real Property and (v) all
software and other computer programs, data and databases, training materials and
related source codes and documentation, if any, to the extent assignable or
transferable, and all other intangible assets of any nature relating to the Real
Property to the extent assignable or transferable (the items referred to in
clauses (i) through (v) of this Section 1.1(e), collectively, the “Intangible
Property”).

(g) All of Seller’s rights, if any, in the maintenance, repair, utility,
service, club access, parking, supply and equipment rental contracts listed on
Exhibit 6.1(l) affecting the Real Property and presently used for the operation
of the Hotel-Related Units (collectively, the “Property Contracts”), to the
extent assignable or transferable.

(h) Solely with respect to the Hotel-Related Units, Seller’s rights, if any, in
any and all books, records, files, guest registers, rental and reservation
records, employment records, maintenance records, websites, domain names,
telephone numbers, and any customer or frequent guest list of the Property
maintained by Seller (including any e-mail or other electronic data) used in
connection with the ownership, use, operation, or maintenance of the
Hotel-Related Units (collectively, the “Hotel Unit IP, Books and Records”).

(i) (x) All right, title and interest in and to the “Essex House” trademark, and
any and all other tradenames, service marks, copyrights, domain names, menu and
design features associated therewith, and (y) all of Seller’s rights, title and
interest, in or to the trademarks, tradenames, service marks, copyrights or
domain names, menus and design features relating to the Condominium Units and
services thereat, together with all applications and rights, if any, to apply
for the protection of any of the foregoing, to the extent assignable or
transferable ((x) and (y), collectively, the “Intellectual Property”).

(j) The advance reservations and Bookings for the Hotel-Related Units, as the
same may be amended, canceled and renewed (the “Reservations”) and, except to
the extent a proration credit is received by Purchaser, advance deposits made in
respect thereof (the “Reservation Deposits”).

(k) Seller’s rights in and to that certain (i) Lease of Commercial Premises,
dated June 1, 2012, between Seller, as lessor, and Danielli Fine Jewelry, as
lessee (the “Jewelry Tenant”) (together with all amendments, modifications,
supplements, extensions and related agreements, if any, thereto, the “Jewelry
Lease”), and (ii) lease (the “Gift Shop Lease”; the Jewelry Lease and the Gift
Shop Lease, collectively , the “Leases” and individually a “Lease”) to Abeer
Corporation (the “Gift Shop Tenant”; the Jewelry Tenant and the Gift Shop
Tenant, collectively , the “Tenants” and individually a “Tenant”), as well as
all of Seller’s rights to the security deposit under the Leases (collectively,
the “Tenant Deposits” and individual a “Tenant Deposit”).

The Condominium Units, together with the Improvements relating thereto, are
referred to herein as the “Real Property”. The Real Property, together with the
Personal Property, the Intangible Property, the Property Contracts, the Hotel
Unit IP, Books and Records, the Intellectual Property, the Reservations, the
Reservation Deposits relating thereto, the Leases and the Tenant Deposits, are
referred to herein collectively as the “Property”.

1.2 Excluded Property. Notwithstanding the foregoing or anything to the contrary
herein, the following (collectively, “Excluded Property”) are expressly excluded
from the definition of Property (and each of the defined terms that make up the
definition of Property) under this Agreement: (a) all tangible and intangible
personal property owned by or leased by Tenants, concessionaires, or licensees
at the Property, owned by guests at the Property, or owned by employees of
Seller, (b) other than insurance proceeds or rights which may be assigned or
credited to Purchaser under Section 5.1, all insurance policies relating to the
Property, including, without limitation, general liability, operational
liability (including hotel and innkeepers’ liability and liquor liability),
business interruption, fire and casualty policies, and all proceeds and claims
thereunder (collectively, the “Insurance Policies”), subject to the terms of the
Interim Jumeirah Agreement, if applicable, (c) any asset management services

 

2

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provided for the benefit of Seller or the Property by any Affiliate of Seller or
by Silverpeak Real Estate Partners, (d) any refunds of real estate taxes to the
extent attributable to the period prior to the Closing Date, (e) the “Jumeirah
Excluded Personalty” listed on Exhibit 1.2(e) hereto which is owned by Jumeirah
Hospitality & Leisure (USA) Inc. (“Hotel Manager”) or its Affiliates, and,
(f) any building signage containing the word “Jumeirah”, subject to the terms of
the Interim Jumeirah Agreement, if applicable. Seller shall remove from the
Property all Excluded Property prior to Closing at Seller’s sole cost and
expense and in accordance with all applicable legal and insurance requirements
and shall promptly repair any damage caused by such removal.

2. Purchase Price. The aggregate purchase price for the Property (the “Purchase
Price”) is Three Hundred Sixty-Two Million Three Hundred Fifteen Thousand and
No/100 Dollars ($362,315,000.00), subject to adjustment as provided herein.

(a) The Purchase Price shall be paid by Purchaser as follows:

(i) Upon the execution of this Agreement by Purchaser and Seller, Purchaser
shall deliver to First American Title Insurance Company (in such capacity, the
“Escrow Agent”) Ten Million and No/100 Dollars ($10,000,000.00) (the “Deposit”)
in immediately available funds by a wire transfer to the Escrow Account; and

(ii) The Deposit shall be held by Escrow Agent in a segregated interest-bearing
account (of the type required pursuant to Section 13(h)) with a commercial bank
reasonably approved by Seller and Purchaser (the “Escrow Account”). In the event
that the Closing does not occur by the Closing Date, interest on the Deposit
shall be paid to the party entitled to receive the Deposit in accordance with
the terms of this Agreement. In the event that the Closing does occur, interest
on the Deposit shall be paid to Seller and credited against the Purchase Price
payable by Purchaser. Any taxes due on such interest income shall be the sole
responsibility of the party receiving such interest. Each of Purchaser and
Seller will provide to Escrow Agent a Form W-9 for the reporting of any such
interest income.

(iii) At the Closing, Purchaser shall deposit with Escrow Agent, by wire
transfer of immediately available funds (made in accordance with the wiring
instructions set forth on Exhibit 2.1(b)(i) attached hereto), the Balance of the
Purchase Price plus the amount of any sales tax for which Purchaser is liable
under Section 8.4. “Balance of the Purchase Price” means the amount equal to the
Purchase Price, as adjusted for the prorations provided for in this Agreement,
minus the Deposit and any interest accrued thereon.

(iv) The Purchase Price shall be paid without any deduction for withholding tax,
provided Seller delivers the documents listed in Sections 8.2(i) and 8.2(p).

(b) Allocation of Purchase Price.

(i) Within seven (7) days after the date hereof, Purchaser shall provide Seller
with a proposed allocation (the “Allocation”) of the consideration paid for the
Property among the acquired assets for federal income tax purposes. Seller shall
have seven (7) days after receiving the proposed Allocation from Purchaser to
accept such Allocation or provide a written explanation of the reasons for
Seller’s disagreement with such proposed Allocation (“Seller’s Letter”). Upon
Purchaser’s receipt of Seller’s Letter, Seller and Purchaser shall use their
commercially reasonable efforts to resolve their disagreements regarding the
Allocation. If Seller and Purchaser are unable to resolve their disagreements
within ten (10) days after Purchaser’s receipt of Seller’s Letter, then each
party shall, upon notice to the other, be entitled to utilize its own proposed
allocation. Seller and Purchaser shall also agree upon a revised Allocation (the
“Revised Allocation”) reflecting any adjustments to the consideration for the
Property occurring after the determination of the Allocation, using the same
procedures set forth in this section for determining the Allocation, or, if no
such agreement is reached, each party shall be entitiled to utilize its proposed
allocation.

 

3

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(ii) If the Allocations are agreed upon between Seller and Purchaser, then
(I) Seller, Purchaser and each of their Affiliates shall (x) be bound by the
Allocation or Revised Allocation, as applicable, for all relevant tax purposes,
(y) prepare and file all tax returns in a manner consistent with such allocation
and (z) take no position inconsistent with such allocation in any tax return or
any related proceeding before any taxing authority, and (II) in the event that
the allocation reported to a taxing authority by either party or any of their
Affiliates is disputed by such taxing authority, the party receiving notice of
such dispute shall promptly notify the other party and keep the other party
apprised of material developments concerning resolution of such dispute.

(iii) Either party hereto may report this transaction as a sale of a trade or
business under Section 1060 of the Internal Revenue Code of 1986 (as amended,
supplemented or modified through the Execution Date, the “Code”) by filing
Internal Revenue Code Form 8594 so long as prior to making such filing such
party has noticed the other party hereto in writing.

3. Title and Survey Matters.

3.1 Update of Title. Prior to the date hereof (the “Execution Date”), Seller has
provided Purchaser with a copy of the existing survey (the “Existing Survey”) of
the Real Property and the existing title insurance policy for the Real Property
(the “Existing Title Policy”). Purchaser, at its sole cost and expense, will
obtain a title report for the Property and a pro forma owner’s policy of title
insurance for the Property, including, without limitation, copies of all
documents referenced therein (the “Title Commitment”), in the amount of the
Purchase Price, issued by First American Title Insurance Company (“FATCO”), as
the lead title insurer on behalf of itself and the syndicate determined by
Purchaser in its sole discretion (provided that Purchaser agrees to include in
the syndicate at least $100,000,000 of coverage to Stewart Title Insurance
Company by and through Kensington Vanguard National Land Services) (FATCO, in
such capacity, the “Title Company”). The cost of ordering the Title Commitment
and obtaining a Title Policy or any endorsements thereto shall be borne entirely
by Purchaser (subject, however, to the provisions of Section 10.3).

3.2 Approval of Title and Existing Survey.

(a) As used herein, the term “Permitted Exceptions” with regard to the Real
Property means: (i) all exceptions, exclusions and other matters shown in the
Existing Title Policy, excluding any exceptions related to a Seller Encumbrance;
(ii) all exceptions, exclusions and other matters shown on Schedule B-2 of the
Title Commitment, other than matters constituting Seller Encumbrances; (iii) any
exceptions, exclusions and other matters waived in writing by Purchaser or
deemed waived by Purchaser in accordance with the terms hereof; (iv) all title
matters reflecting the existence or terms of the Leases; (v) liens for real
estate taxes that are not yet due and payable and that are apportioned as
provided in Section 8.4, including, without limitation, special assessments and
special improvement district or local improvement district bonds; (vi) any and
all present and future laws, ordinances, restrictions, requirements,
resolutions, orders, rules and regulations of any governmental authority, as now
or hereafter existing or enforced (including, without limitation, those related
to zoning and land use), and all notes or notices of violation of any such laws,
ordinances, rules or regulations to the extent same are set forth in the
Departmental Searches or in the Title Commitment or in any title reports,
commitments or updates delivered to Purchaser prior to the Execution Date;
(vii) any judgment or mechanics’ or suppliers’ liens that are the obligation of
a Tenant to discharge pursuant to the provisions of any Lease; (viii) such other
exceptions as Title Company shall commit to insure over in a manner reasonably
satisfactory to Purchaser, without any additional cost to Purchaser; (ix) any
other matters affecting title to the Property that have been approved or
accepted by Purchaser pursuant to the terms hereof and (x) all matters, whether
or not of record, to the extent caused by Purchaser or its agents,
representatives or contractors. As used herein, the term “Seller Encumbrance”
shall mean (1) any mortgage or deed of trust (and related ancillary security
instruments) or other monetary lien voluntarily granted or expressly assumed by
Seller and encumbering the Property (but not any liens that are the obligation
of any Tenant under any Lease to discharge), (2) any documents relating to the
Hotel Management Agreement (including, without limitation, any recorded
non-disturbance agreement or memorandum of the Hotel Management Agreement) or
(3) any and all judgments or mechanics’ or suppliers’ or tax liens encumbering
the Property or any lis pendens. In any event, Seller

 

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Encumbrances must be satisfied, discharged or removed by Seller (or, as to any
tax lien or lis pendens, bonded or otherwise removed as a lien on the Property)
on or prior to the Closing Date or, if not so satisfied, bonded or removed prior
to or on Closing, shall be satisfied at Closing out of the proceeds otherwise
payable to Seller. For the avoidance of doubt, any Seller Encumbrances relating
to the Hotel Management Agreement (including, without limitation, any recorded
non-disturbance agreement or memorandum of the Hotel Management Agreement) must
be satisfied, discharged or removed by Seller at or prior to Closing
notwithstanding the execution by Purchaser and Hotel Manager of the Interim
Jumeriah Agreement, if applicable.

(b) If Seller involuntarily suffers title to the Real Property to become
encumbered by any matter (including, without limitation, an attachment or any
other defect, objection or exception or issue raised by any update of the
Existing Survey) other than a Permitted Exception, and Seller does not remove or
cure any such matter on or prior to the Closing Date to the reasonable
satisfaction of Purchaser, then Purchaser shall have the option, exercisable by
written notice delivered to Seller, of either (y) waiving any such defects,
objections or exception and accepting title to the Property subject to such
matter(s), in which event Purchaser shall proceed to Closing or (z) terminating
this Agreement, in which event the Deposit will immediately be returned to
Purchaser, and thereupon Purchaser and Seller will have no further obligations
or liabilities under this Agreement, except as otherwise stated herein;
provided, however, that (i) the foregoing shall not apply to Seller
Encumbrances, which shall be governed by Section 3.2(a), and (ii) Seller shall
nonetheless use commercially reasonable efforts to remove any title matters
covered by this Section 3.2(b).

3.3 Title Insurance. It shall be a condition to Purchaser’s obligations
hereunder that Title Company shall have issued or shall have committed to issue,
upon payment of the applicable premium therefor, a 2006 ALTA Extended Coverage
Owner’s Policy of Title Insurance (the “Title Policy”) with the standard form
New York endorsements for purchase of condominium units and waiver of
arbitration, in the amount equal to the Purchase Price for the Real Property
(with separate policies being issued, at Purchaser’s election, for separate
components of the Condominium Units), insuring that title to the Real Property
is vested in Purchaser subject only to the Permitted Exceptions. If Purchaser
desires to procure any special coverages or any endorsements (or amendments) to
the Title Policy not identified above, it may do so at its own cost and expense,
provided that (a) such additional coverages shall be at no cost or additional
liability to Seller other than the provision of such affidavits, agreements or
certificates customarily provided by sellers of similar properties in Manhattan,
(b) Purchaser’s obligations hereunder shall not be conditioned upon Purchaser’s
ability to obtain such additional coverages, (c) if Purchaser is unable to
obtain such additional coverages with respect to the Property, Purchaser shall
nevertheless be obligated to proceed to the Closing without reduction of or set
off against the Purchase Price and (d) the Closing shall not be delayed as a
result of Purchaser’s efforts to obtain such additional coverages.

4. Inspection; Covenants.

4.1 Access.

(a) Subject to the following sentence, Purchaser and its Affiliates, agents,
contractors, or representatives shall have (collectively, the “Purchaser Access
Parties” and, individually, a “Purchaser Access Party”) shall have, and Seller
shall provide, physical access to the Real Property for purposes of
(i) inspection, investigation and/or testing of the Real Property,
(ii) interviewing any Bargaining Unit Employees or a Non-Bargaining Unit
Employees pursuant to Section 11.1 hereof, and (iii) review of such materials
and information relating to the Real Property (excluding projections and
analyses relating to the operation of the Real Property) which are located at
the Real Property and not reasonably able to be posted to the data site
maintained by Broker (the “Data Site”), in each case as Purchaser deems
necessary or appropriate, but subject to Seller’s right to redact any such
materials or information to the extent reasonably necessary in order to preserve
the confidentiality of information not relating to the Real Property (provided a
general description of the redacted information sufficient to confirm that it
does not relate to the Real Property is provided to Purchaser). No Purchaser
Access Party shall conduct any such inspection, investigation, testing or review
in a manner that will unreasonably interfere with the use or operation of the
Real Property by any occupant or guest thereof. If any Purchaser Access Party
desires access to the Real Property for purposes of inspection, investigation,
testing and/or review, Purchaser shall

 

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provide Seller with reasonable prior notice thereof, which notice shall include
the date and time of such proposed access, the scope of such access (including
any invasive testing proposed to be done), and the anticipated duration of such
access. Any inspection, investigation, testing and/or review shall be at
Purchaser’s sole cost and expense and Purchaser shall not conduct any invasive
testing or phase II environmental surveys without Seller’s prior written
consent. Purchaser shall promptly restore, at Purchaser’s sole cost and expense,
any physical damage to the Property caused by any such inspection,
investigation, testing and/or review of the Real Property.

(i) Purchaser agrees to indemnify, defend, and hold Seller, Hotel Manager and
their respective Affiliates harmless from any loss, injury, damage, claim, lien,
cost or expense, including, without limitation, reasonable attorneys’ fees and
costs (collectively, “Losses”), arising out of or in connection with the
exercise or performance by the Purchaser Access Parties during the term of this
Agreement of any of their respective rights or obligations under Section 4.1(a).
In no event shall Purchaser be liable hereunder for Losses (1) to the extent
arising from the negligence or willful misconduct of Seller or its Affiliates,
agents, contractors, representatives or employees, (2) resulting from Seller’s
or Hotel Manager’s compliance (or non-compliance) with Environmental
Requirements or any remedy of Hazardous Materials or any environmental condition
resulting from such compliance (or non-compliance) or (3) resulting from the
discovery or observation of pre-existing environmental or physical conditions at
the Real Property or any impact of the use of the Real Property or the value of
the Real Property from or as result of such discovery or observation. For
purposes of this Agreement, (A) “Environmental Requirements” means all laws,
ordinances, statutes, codes, rules, regulations, agreements, judgments, orders
and decrees now or hereafter enacted, promulgated, or amended, of the United
States, the states, the counties, the cities or any other political subdivisions
in which the Real Property is located and any other political subdivision,
agency or instrumentality exercising jurisdiction over Seller, the Real Property
or the use of the Real Property relating to pollution, the protection or
regulation of human health, natural resources or the environment, or the
emission, discharge, release or threatened release of pollutants, contaminants,
chemicals or industrial, toxic or hazardous substances or waste or Hazardous
Materials into the environment (including, without limitation, ambient air,
surface water, ground water or land or soil) and (B) “Hazardous Materials” means
any substance which is or contains: (1) any “hazardous substance” as now or
hereafter defined in Section 101(14) of the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C.
Section 9601 et seq.), or any regulations promulgated thereunder; (2) any
“hazardous waste” as now or hereafter defined in the Recourse Conservation and
Recovery Act (42 U.S.C. Section 6901 et seq.) or regulations promulgated
thereunder; (3) any substance regulated by the Toxic Substances Control Act
(15 U.S.C. Section 2601 et. seq.); (4) gasoline, diesel fuel or other petroleum
hydrocarbons; (5) asbestos and asbestos containing materials, in any form,
whether friable or nonfriable; (6) polychlorinated biphenyls; (7) radon gas,
(8) lead paint and urea formaldehyde insulation and (9) any additional
substances or materials which are now or hereafter classified or considered to
be hazardous or toxic under Environmental Requirements or the common law, or any
other applicable law related to the Real Property; and Hazardous Materials shall
include, without limitation, any substance, the presence of which on the Real
Property: (A) requires reporting, investigation or remediation under
Environmental Requirements; (B) causes or threatens to cause a nuisance on the
Real Property or adjacent property, or poses or threatens to pose a hazard to
health or safety of persons on the Real Property or adjacent property or
(C) which, if emanated or migrated from the Real Property, could constitute a
trespass. The terms and conditions of this Section 4.1(a)(i) shall survive the
Closing or any termination of this Agreement.

(ii) Prior to any entry on the Real Property by any Purchaser Access Party,
Purchaser shall cause the activities of such Purchaser Access Party on and about
the Real Property to be covered by comprehensive general liability insurance for
Purchaser and each of the other Purchaser Access Parties entering onto the Real
Property insuring all activity and conduct of each Purchaser Access Party while
exercising such right of access. Such insurance shall have limits of not less
than $2,000,000.00 per occurrence for bodily injury to any one person and
property damage, and $4,000,000.00 in the aggregate. Seller and Hotel Manager
shall be named as

 

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additional insureds on all policies and such policies shall be considered
primary insurance without recourse to or contribution from any similar insurance
carried by Seller. Purchaser shall deliver to Seller a certificate evidencing
the existence of the foregoing insurance coverage prior to any entry on the Real
Property by any Purchaser Access Party, and Purchaser shall keep such insurance
in effect for at least one (1) year following the last date that any Purchaser
Access Party enters the Real Property prior to the Closing Date. All insurance
certificates shall contain the standard ACORD provision concerning cancellation
or material change of the coverage afforded under the policies evidenced by such
certificates. All liability insurance required to be carried by Purchaser shall
contain broad form contractual liability insurance coverage insuring Purchaser’s
insurable indemnity obligations to Seller as provided for in Section 4.1(a)(i).

(iii) Notwithstanding the termination of this Agreement, (1) the obligation to
restore the Real Property contained in Section 4.1(a) shall survive such
termination indefinitely, (2) the obligations of Purchaser contained in the
third-to-last sentence of Section 4.1(a)(ii) shall survive for the one-year
period referred to therein and (3) the indemnity contained in Section 4.1(a)(i)
shall survive such termination for a period of one hundred eighty (180) days, it
being agreed that any claim for indemnification submitted to Purchaser in
writing prior to the expiration of such one hundred eighty (180) day period
shall not be precluded by the foregoing of this clause (3) if actual suit is
then brought within ninety (90) days of such claim notice.

(iv) Section 7, and the modifications to the Confidentiality Agreement set forth
in Section 5, of that certain Access and Exclusivity Agreement, dated as of
July 31, 2012, between Seller and Purchaser (the “Access and Exclusivity
Agreement”) are hereby incorporated into this Agreement as if fully set forth
herein and the Access and Exclusivity Agreement is hereby superseded by the
terms and conditions of this Agreement.

(b) Seller has, prior to the date hereof and subject to the terms and conditions
of the Confidentiality Agreement effective as of March 30, 2012 (as modified by
the terms of the Access and Exclusivity Agreement, the “Confidentiality
Agreement”), provided to Purchaser by way of posting to the Data Site maintained
by Jones Lang LaSalle Hotels (“Broker”), or by way of making such items
available for review at the Real Property or offices of the Board, certain due
diligence items. Additionally, Seller and Purchaser have entered into an
Inspection Agreement of even date herewith (the “Inspection Agreement”) pursuant
to which Seller has disclosed to Purchaser certain facts regarding the Property.
All due diligence items provided to Purchaser or disclosed in the Inspection
Agreement are referred to collectively as the “Inspection Records”. Purchaser
acknowledges and agrees that Seller may redact the Inspection Records to the
extent reasonably necessary in order to preserve the confidentiality of
information not relating to the Property (but with a general description of the
redacted information sufficient to confirm that it does not relate to the
Property). If additional Inspection Records are requested, they may be examined
at all reasonable times during normal business hours upon prior reasonable
notice to Seller and may be photocopied by Purchaser at Purchaser’s sole cost
and expense. Except as otherwise provided in this Agreement or in any other
document contemplated by Section 8.2, Seller does not make any representations
or warranties as to the content or accuracy of any Inspection Records.

(c) In the event the Closing does not occur for any reason, Purchaser shall
handle the Inspection Records in accordance with the terms of the
Confidentiality Agreement, which shall be deemed to continue for a period of
three hundred sixty-five (365) days notwithstanding anything to the contrary
contained therein.

4.2 Liquor License. Seller and Purchaser shall reasonably cooperate in obtaining
the transfer of the existing liquor license (or liquor licenses) or the issuance
of a new liquor license(s) (such transferred or new liquor licenses, the “Liquor
License”) for the Hotel-Related Units. If necessary, at or prior to Closing, or
at or prior to the expiration of the Interim Jumeriah Agreement if Purchaser
enters into the Interim Jumeirah Agreement, Seller and Purchaser shall execute
and deliver to one another an Interim Agreement (the “Interim Agreement”)
pursuant to which the Manager (as defined therein) shall continue to operate all
liquor related operations in the Hotel-Related Units until the date on which
Purchaser, its management company or other designee, receives a Liquor License
for the Hotel-Related Units. Such Interim Agreement shall, among other things,
provide that all expenses and liabilities

 

 

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associated with liquor related operations in the Hotel-Related Units shall be
borne solely by Purchaser, Purchaser shall carry “dram shop” and other customary
insurance reasonably acceptable to Seller and such Manager, and Purchaser shall
indemnify Seller and such Manager for any and all losses, costs, expenses,
claims, demands, and other liabilities arising from Purchaser’s or its
designee’s liquor related operations in the Hotel-Related Units. Promptly
following the Closing, Purchaser shall or shall cause Purchaser’s operator to
file an application with the New York State Liquor Authority (the “SLA”) for the
transfer of, or issuance of a new Liquor License for the Hotel-Related Units.
Seller shall reasonably cooperate, with all out of pocket costs incurred by
Seller reimbursed promptly by Purchaser, with Purchaser’s efforts to obtain such
transfer of, or issuance of a new, Liquor License for the Hotel-Related Units
(including, without limitation, by executing all documents required by the SLA
or by any other governmental authority in connection therewith). Seller’s
obligations under this Section 4.2 shall survive the Closing.

4.3 Activities Prior to Closing.

(a) (i) Seller shall not, from and after the Execution Date, enter into
amendments, modifications, extensions, renewals or terminations of any existing
Property Contracts, agreements related to Bookings, the Leases or the Union
Contract (except for Property Contracts which may be entered into to the extent
set forth in clause (ii) below, modifications to existing Bookings so long as
such Bookings remain at market rates and terms and cancellations of Bookings at
any guest’s request) or enter into any new lease or contract (other than
reservations for the use of any guest rooms that are in the ordinary course of
business and at market rates and terms, and including any commitments or
reservations for the use of any meeting rooms, banquet facilities, convention
facilities or other facilities in the Hotel-Related Units in the ordinary course
of business and on market rates and terms; reservations for the use of any guest
rooms and commitments or reservations for the use of any meeting rooms, banquet
facilities, convention facilities or other facilities in the Hotel-Related
Units, together with the rent and/or other considerations, if any, owed by
guests, tenants, licensees or concessionaires for such use, the “Bookings”), in
each case that would affect the Property after the Closing Date.

(ii) Purchaser agrees to assume the Property Contracts, subject to the
provisions set forth herein. Purchaser shall notify Seller at least ten
(10) Business Days prior Closing as to which Property Contracts Purchaser wishes
Seller (or Hotel Manager on behalf of Seller) to terminate in accordance with
their terms (each such contracts, a “Terminable Contract”). Seller agrees that
Purchaser shall have the right to terminate (or request the termination of) any
Property Contract even if Purchaser elects to retain Hotel Manager pursuant to
the Interim Jumeirah Agreement. Notwithstanding anything to the contrary
contained herein, Seller shall have no liability to Purchaser for the refusal by
any counterparty under a Property Contract to consent to the assignment of such
Property Contract to Seller, and in such event, any such Property Contract (for
which such counterparty’s consent is required by the terms of such Property
Contract and not given) and any liabilities thereunder shall not be assumed by
Purchaser. Seller may enter into any Property Contract (new and amendments)
after the date hereof (x) in the ordinary course of business and provided such
Property Contract is terminable without penalty or payment of a fee on no more
than thirty (30) days’ notice or (y) with the prior written consent of Purchaser
in accordance with Section 4.3(c).

(b) At all times prior to the Closing, Seller shall continue to (i) operate the
Hotel-Related Units in a prudent manner, substantially consistent with past
practice using its reasonable efforts to preserve intact the goodwill of the
Hotel-Related Units with its existing clientele, subject to Seller’s obligations
under Section 4.3(i), (ii) maintain the Property in its existing condition and
state of repair, ordinary wear and tear excepted, subject to the occurrence of
any casualty and condemnation, (iii) replenish and maintain Personal Property
and any other consumables, inventory, operating supplies and equipment necessary
to operate the Hotel-Related Units in a manner consistent with past practices
and maintain substantially the same levels of consumables, operating supplies,
inventory and furniture, fixtures and equipment as in existence at the Property
on the Execution Date; provided Seller shall have no obligation to replenish
branded materials, and (iv) maintain insurance with respect to the Hotel-Related
Units with the coverages as set forth in the existing insurance policies
covering the Hotel-Related Units, provided, however, that a breach of this
clause (iv) shall have no consequence unless a casualty occurs prior to Closing
or the earlier termination of this Agreement.

 

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(c) When Purchaser’s consent is required pursuant to Section 4.3(a) or
Section 4.3(g), Purchaser shall have ten (10) Business Days after receipt from
Seller of a written request for consent to proposed Property Contracts (new and
amendments) within which to grant or withhold consent, which consent may be
given or withheld in Purchaser’s sole and absolute discretion. If Purchaser
fails or refuses to act within such ten (10) Business Day period, Purchaser
shall be deemed to have withheld its consent; provided, that Purchaser shall be
deemed to have granted such consent after failing or refusing to act within such
ten (10) Business Day period if such new or amended Property Contract is
terminable without charge or penalty upon sale or on thirty (30) days’ or less
notice.

(d) Seller shall not sell, mortgage, pledge, hypothecate, or otherwise transfer
or dispose of all or any part of the Property or any interest therein at any
time after the date hereof and prior to the Closing Date, other than (i) with
respect to replacement of depleted Personal Property and the expiration of
Property Contracts in the ordinary course of business or upon termination in
accordance with the terms of this Agreement, (ii) reservations of transient
guests of the Hotel-Related Units in the Premises in accordance with the
provisions of this Agreement, (iii) Permitted Exceptions and (iv) the
maintenance of the liens or assignments as required by any existing mortgage and
mezzanine financing with respect to the Property which exist on the Execution
Date (and all of which shall be terminated as of the Closing unless Purchaser
has elected to have Seller’s lender(s) assign such liens or assignments to
Purchaser’s lender or lenders pursuant to Section 4.3(j) below).

(e) Except for (i) emergency repairs and replacements, and (ii) capital
expenditures permitted hereunder to restore the Property after a casualty or
condemnation, Seller shall not commit to, make or pay for any capital
expenditure, without the written consent of Purchaser. All such work shall be
undertaken in a first-class workmanlike manner, lien-free and in accordance with
all applicable legal requirements and insurance requirements.

(f) During the period prior to Closing and for the six (6) month period after
Closing, the parties agree to reasonably cooperate and also to consult on a
regular basis and coordinate their activities, including, without limitation,
those relating to employee matters, Bookings and Reservations, and changing the
branding of the Condominium Units so as to facilitate a smooth transition of the
operations of the Condominium Units and the continued proper performance by the
employees of the Condominium Units of their respective duties up to Closing. To
the extent Purchaser requests that any executive or managerial-level employees
of the Hotel Manager remain at the Property to assist with the transition during
the twenty-four (24) hour periods immediately prior to and immediately following
the Cut-Off Time, Purchaser shall arrange for each such employee to be lodged in
the Hotel-Related Units on a complimentary basis with complimentary food and
beverage (excluding alcoholic beverages) and laundry services. Seller shall
reasonably cooperate with Purchaser to effectuate the transfer of all Intangible
Property, Hotel Unit IP, Books and Records and such other data with respect to
past, present and future guests of the Hotel-Related Units in the possession of
Seller or any of Seller’s Affiliates as may be reasonably necessary in order to
permit Purchaser to honor Bookings and Reservations in place as of the Closing
with respect to the period from and after Closing. In addition, Seller shall use
commercially reasonable efforts to maintain all Bookings and Reservations and
shall not affirmatively relocate any Bookings or Reservations in effect from
time to time with respect to the period from and after the Closing Date to any
other hotels owned or operated by Seller or any of Seller’s Affiliates.

(g) Seller shall not (i) vote for any material increase in any common charges in
respect of the Essex House Condominium, (ii) agree to amend any Condominium
Documents, (iii) call a meeting of unit owners or (iv) otherwise take any action
with respect to the operation of the Essex House Condominium which is reasonably
likely to result in a Material Adverse Effect, in each case without Purchaser’s
consent in accordance with Section 4.3(c); provided, however, no such consent
shall be required to take any action imposed by applicable law or that is
necessary to provide or maintain essential operations at the Property. Seller
shall (A) exercise all rights and comply with all obligations under the
Condominium Declaration in substantially the same manner as it generally did
prior to the date hereof; (B) forward copies of all correspondence, email and
other documents received by any governmental agency including, but not limited
to, the Office of the Attorney General of the State of New York (the “OAG”); and
(C) make available to Purchaser at the Condominium Board’s office all minutes of
Condominium Board meetings held after the execution of this Agreement provided
Purchaser shall have no right to copy or retain such minutes.

 

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(h) Seller shall expeditiously, after the mutual execution and delivery of this
Agreement, and at Seller’s sole cost and expense, request a “no-action letter”
from the OAG stating that the OAG shall take no action and not require the
filing of an offering plan or an amendment to the 2006 Plan, with respect to the
transactions contemplated herein (the “No-Action Application”). In connection
with Seller’s No-Action Application, Purchaser shall execute and deliver an
“Affidavit of Offeree,” substantially in the form annexed hereto as Exhibit
4.3(h)(1) and Seller shall execute and deliver an “Affidavit of Offeror,”
substantially in the form annexed hereto as Exhibit 4.3(h)(2). Seller shall
simultaneously with its submission of its No-Action Application to the OAG
deliver a copy of such No-Action Application (together with all attachments
thereto and related documents) to Purchaser or its representatives. Seller and
Purchaser hereby agree to cooperate with each other and each party’s respective
counsel to provide additional information and execute any additional documents
in connection with the No-Action Application if required by the OAG. Purchaser
shall promptly, upon Seller’s request and to the extent reasonably necessary,
review and join in any application, submission or other form or documentation
reasonably required. The parties hereto acknowledge and agree that prior to the
Closing, Seller does not intend to file an amendment with the OAG extending the
term of the 2006 Plan (as hereinafter defined).

(i) Seller shall cause Hotel Manager to stop (i) accepting Bookings and
Reservations under the Hotel Manager’s awards programs from and after the
Execution Date, and (ii) issuing vouchers, certificates, or other forms of
script for free or discounted hotel rooms or food and beverage at the
Hotel-Related Units from and after the Execution Date.

(j) (i) Not later than ten (10) Business Days prior to the Closing Date (with
evidence thereof concurrently being provided to Purchaser), Seller shall deliver
to the lender under the existing mortgage loan encumbering the Property (the
“Existing Lender”) a written request, in the form attached hereto as Exhibit
4.3(j), asking the Existing Lender to assign the existing mortgage or mortgages
(or to sever the same and deliver documentation of a portion thereof) (a
“Mortgage Assignment”) to one or more Persons designated by Purchaser (a
“Purchaser’s Lender Designee”) provided that Seller’s obligation under this
Section 4.3(j)(i) shall be limited to: (A) depositing with a reputable overnight
courier such written request, (B) subsequently designating to the Existing
Lender the Purchaser’s Lender Designee, and (C) at Closing, satisfying all
outstanding indebtedness secured by such mortgage or mortgages and any mezzanine
debt reflected in such mortgage or mortgages in accordance with the provisions
of such mortgage or mortgages providing for such assignment.

(ii) Purchaser’s counsel, at the sole cost and expense of Purchaser, shall
prepare the documentation for such assignment, except to the extent that the
Existing Lender requires that its counsel prepare such documentation (in which
event Purchaser shall reimburse such Existing Lender upon request the cost of
such preparation) and Purchaser shall be responsible for any expense which the
Existing Lender incurs, and seeks to recover from Seller, arising from the
preparation or review of mortgage assignment documentation.

(iii) If at or prior to Closing: (A) Purchaser has paid the reasonable
attorneys’ fees of the Existing Lender with respect to the preparation, delivery
and performance of such an Mortgage Assignment; (B) Purchaser shall have
executed and delivered to the Existing Lender and/or the Title Company an
executed Affidavit under Section 275 of the New York Real Property Law; and
(C) a Mortgage Assignment is not then prohibited by any federal, state or local
law, rule, regulation, order, or by any other governmental authority, and the
Existing Lender fails to execute and deliver the Mortgage Assignment, Purchaser
may withhold from the Balance of the Purchase Price at Closing fifty percent
(50%) of the amount of any mortgage recording tax Purchaser is required to pay
as a consequence of such failure by the Existing Lender. Additionally, if Seller
elects to pursue a claim against the Existing Lender for failure to deliver the
Mortgage Assignment, Purchaser shall pay for (or reimburse Seller for) fifty
percent (50%) of the costs and expenses incurred by Seller in pursuing such
claim.

 

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4.4 Additional Condominium Units. If any additional condominium unit in the
Essex House Condominium is offered for purchase to Seller or its Affiliates
following the Execution Date, Seller shall give prompt written notice to
Purchaser indicating, in reasonable detail, the terms and timing of such offer,
and Seller’s election with respect to such offer as provided in the following
sentence. Seller shall, at its election, either (i) purchase such condominium
unit, in which case Purchaser shall be entitled, at its sole discretion, to
acquire such purchased condominium unit from the Seller at the Seller’s cost
(including its closing costs) on the Closing Date, or (ii) assign its rights
under such offer to Purchaser and cooperate with Purchaser in the event
Purchaser elects, in Purchaser’s sole discretion, to acquire such offered
condominium unit. Seller will receive a credit at Closing for any down payment
delivered by Seller in respect of the purchase of such condominium unit which
Purchaser elects to purchase. For avoidance of doubt, Purchaser is under no
obligation to purchase any such additional unit.

5. Casualty Damage or Condemnation.

5.1 Casualty.

(a) In the event that all or a portion of any Condominium Unit is damaged or
destroyed by fire or other casualty prior to the Closing Date such that the
reasonably estimated cost to repair the same exceeds an amount that is equal to
$18,000,000, then Purchaser may, at Purchaser’s sole option, elect to either:

(i) terminate this Agreement, in which event the Deposit will promptly be
returned to Purchaser and thereupon Seller and Purchaser will have no further
obligations or liabilities to each other under this Agreement, except as
otherwise provided herein; or

(ii) proceed to close the transactions contemplated by this Agreement.

(b) If Purchaser elects to proceed to Closing pursuant to Section 5.1(a)(ii) or
if the reasonably estimated cost to repair the damage or destruction to the
Improvements caused by fire or other casualty prior to the Closing Date does not
exceed an amount that is equal to $18,000,000, then Purchaser shall purchase the
Property in accordance with the terms hereof except that (y) the Purchase Price
shall be reduced by the amount of any applicable insurance deductible with
respect to any damage or destruction of the Improvements by fire or other
casualty (or such lesser amount as Purchaser and Seller reasonably agree to be
necessary to repair the damage) and (z) Seller shall assign to Purchaser at the
Closing all insurance proceeds payable on account of such damage (less Seller’s
reasonable cost to secure the same and less repair costs incurred by Seller with
respect to such damage), provided, that the Purchase Price shall be further
reduced by the amount of any insurance proceeds previously paid to Seller on
account of such damage and not already expended toward Seller’s reasonable cost
of securing the same or restoration of the Improvements. Purchaser shall be
deemed to have elected to proceed under Section 5.1(b) unless, within
fifteen (15) days from receipt by Purchaser of written notice of such casualty
from Seller accompanied by Seller’s repair estimate and evidence of the
insurance coverages maintained by Seller and written confirmation from the
insurer of the amount of insurance proceeds which the insurer has determined is
available under the policy in respect of such casualty, Purchaser provides
Seller with written notice that Purchaser elects to terminate this Agreement
pursuant to Section 5.1(a).

5.2 Condemnation. In the event that all or a portion of any Condominium Unit is
condemned or becomes the subject of condemnation proceedings prior to the
Closing such that either (i) the reasonably estimated loss of value as a result
thereof exceeds an amount that is equal to $18,000,000 or (ii) the condemnation
in question would cause a Material Adverse Effect, then Purchaser may elect to:

(a) terminate this Agreement, in which event the Deposit will promptly be
returned to Purchaser and thereupon Seller and Purchaser shall have no further
obligations or liabilities to each other under this Agreement, except as
otherwise provided herein; or

(b) proceed to close the transactions contemplated by this Agreement.

 

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If Purchaser elects to proceed to Closing under Section 5.2(b) or if the
reasonably estimated loss of value as a result of a condemnation or condemnation
proceedings affecting all or portion of any Condominium Unit does not exceed an
amount that is equal to $18,000,000 or the condemnation in question would not
cause a Material Adverse Effect, then Purchaser shall purchase the Property in
accordance with the terms hereof (without reduction in the Purchase Price) and
Seller shall assign to Purchaser at the Closing all condemnation proceeds
payable and still outstanding as a result of such condemnation (less Seller’s
reasonable cost to secure the same) and the Purchase Price shall be reduced by
the amount of any condemnation proceeds previously paid to Seller on account of
such condemnation (less Seller’s reasonable cost to secure the same and less
repair costs incurred by Seller with respect to such taking). Purchaser shall be
deemed to have elected to proceed under Section 5.2(b) unless, within
fifteen (15) days of receipt by Purchaser of written notice from Seller of the
condemnation or condemnation proceedings, Purchaser provides Seller with written
notice that Purchaser elects to terminate this Agreement pursuant to
Section 5.2(a).

5.3 NY General Obligations Law Section 5-1311. The provisions of Section 5-1311
of the New York General Obligations Law shall not be applicable to this
Agreement.

6. Representations, Warranties and Covenants.

6.1 Seller’s Representations. Seller makes the following representations and
warranties, all of which (except for those representations and warranties made
as of the Execution Date, which shall not be remade as of the Closing) shall be
true and correct as of the Closing. If Purchaser has actual knowledge or,
pursuant to the next sentence is deemed to have knowledge, as of the Execution
Date, that any of these representations and warranties are inaccurate, untrue or
incorrect in any way, Purchaser, to the extent of such actual or deemed
knowledge, shall not have (i) any Purchaser Claim against Seller, Seller’s
Affiliates or the other Seller Parties or (ii) the right to terminate this
Agreement based on a failure of the condition set forth in Section 7.1(b), in
each case, to the extent based on the inaccuracy, untruth or incorrectness of
such representations and warranties. Purchaser shall be “deemed to have
knowledge” or have “deemed knowledge” that a representation or warranty is
untrue, inaccurate or incorrect if anything in the Inspection Agreement contains
information which is clearly inconsistent with such representation or warranty
or otherwise discloses information that clearly demonstrates that such
representation or warranty is untrue, inaccurate or incorrect.

(a) Legal Existence. Seller is a limited liability company duly created, validly
existing and in good standing under the laws of the State of Delaware.

(b) Authority. Seller has full right, power and authority and is duly authorized
to enter into this Agreement, to perform each of the covenants and obligations
on its part to be performed hereunder and to execute and deliver, and to perform
its obligations under all documents required to be executed and delivered by it
pursuant to this Agreement, and this Agreement constitutes the valid and legally
binding obligation of Seller enforceable against Seller in accordance with its
terms.

(c) Conflicts. Neither the execution, delivery or performance of this Agreement
nor compliance herewith (a) conflicts or will conflict with, or results or will
result in a material breach of or constitutes or will constitute a default under
(1) the organizational documents of Seller, (2) in any material respect with any
judgment, statute, law or any order, writ, injunction or decree of any court or
governmental authority applicable to Seller or the Property, or (3) in any
material respect with any material agreement or instrument to which Seller is a
party or by which it or the Property is bound or (b) results in the creation or
imposition of any lien, charge or encumbrance upon its property pursuant to any
such agreement or instrument.

(d) Government Approvals. No authorization, acceptance, consent or approval of
any governmental authority (including courts) is required for the execution and
delivery by Seller of this Agreement or the performance of its obligations
hereunder.

(e) FIRPTA. Seller is not a “foreign person” within the meaning of
Section 1445(f)(3) of the Code.

 

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(f) Litigation. Except as set forth in the Inspection Agreement, there are no
litigations, actions, suits, arbitrations, formal government investigations or
proceedings (including, but not limited to, bankruptcy) pending or, to the
knowledge of Seller, threatened against Seller or affecting Seller or the
Property which, if determined adversely to Seller, would be reasonably likely to
have, either individually or in the aggregate, a Material Adverse Effect. As
used herein, “Material Adverse Effect” means a material adverse effect on the
value of, the title to, or the use or operation of, the Property, provided that
the following, individually and in the aggregate, shall be excluded from the
definition of Material Adverse Effect: (i) any change, event or effects arising
out of or resulting from changes in or affecting the (x) travel or hospitality
generally, (y) travel or hospitality in The City of New York or (z) the
financial, banking, currency or capital markets in general, (ii) any change,
event or effect resulting from the entering into or public announcement of the
transactions contemplated by this Agreement, and (iii) any change, event or
effect resulting from any act of terrorism, commencement or escalation of armed
hostilities in the U.S. or internationally or declaration of war by the U.S, or
the consequences of the foregoing.

(g) Violations of Law. Except for (i) violations shown in or disclosed by the
departmental searches performed by the Title Company and delivered prior to the
Execution Date (“Departmental Searches”), (ii) violations disclosed in a formal
governmental notice which is included in the Inspection Agreement, and
(iii) provided the same do not result in a Material Adverse Effect, violations
disclosed or learned of after the date hereof, Seller has not received any
written notice from any governmental or public authority that (x) the Property
is in violation of any applicable fire, health, building, use, occupancy,
environmental or zoning laws, codes or regulations where such violation remains
outstanding and, if unaddressed, would be reasonably likely to, individually or
in the aggregate, have a Material Adverse Effect, (y) any work is required to be
done upon or in connection with the Property, where such work remains
outstanding and, if unaddressed, would be reasonably likely to have a Material
Adverse Effect or (z) the Property is in material violation of any zoning, land
use, landmark, signage, façade or similar laws, regulations or orders.

(h) Condemnation. As of the Execution Date, Seller has not received any written
notice from any governmental or public authority of any, and to the Seller’s
knowledge, there are no existing, pending or threatened, condemnation, eminent
domain or similar proceedings in connection with the Property or any portion
thereof.

(i) Rights to Purchase. Seller has not granted any options or rights of first
refusal, rights of first offer or other similar rights with respect to the
purchase of the Property or any interest therein nor do any other unexpired
rights exist in favor of third persons to purchase or otherwise acquire the
Property or any interest in the Property.

(j) Agreements with Governmental Authorities. Seller (or its Affiliates) has not
entered into any unrecorded commitments or agreements with any governmental or
public authority affecting the Property that would be reasonably likely to have,
either individually or in the aggregate, a Material Adverse Effect.

(k) Tenant Deposits. The Tenant Deposit under the Jewelry Lease is $5,000 and
the Tenant Deposit under the Gift Shop Lease is $7,800. Seller and its agents
have held the Tenant Deposits in material compliance with law and the terms of
the applicable Lease.

(l) Property Contracts. Other than the Property Contracts disclosed in the
Inspection Agreement, and Property Contracts hereafter entered into, amended,
modified or extended in accordance with Section 4.3, there are no service,
maintenance, repair, utility, management, marketing, sales, supply or equipment
rental contracts affecting the Property. All Property Contracts are in full
force and effect. To Seller’s knowledge, there is no default notice outstanding
and no material default existing under any of the Property Contracts.

 

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(m) Leases. Other than the Leases, there are no leases, subleases, licenses,
concession agreements or other agreements granting use or occupancy rights
affecting the Property presently in effect or to take effect in the future and
in either case binding upon Seller or with respect to the Condominium Units.
There are no leasing commissions owed or becoming due with respect to any
activities at the Property prior to Closing. The Leases are in full force and
effect and neither Seller nor the tenant under any Lease is in default under any
Lease (the foregoing does not apply to delinquencies in the payment of monthly
rent that have existed for less than thirty (30) days).

(n) Permits. As of the Execution Date, Seller has not received written notice
alleging any material breach or violation of any provision, condition or
limitation of any of the Permits. The Inspection Agreement contains a true and
correct list of all open items necessary to obtain a permanent certificate of
occupancy for the Property.

(o) Employee Benefit Plans.

(i) Disclosed in the Inspection Records is each “welfare” plan, fund or program
(within the meaning of Section 3(1) of the Employee Retirement Income Security
Act of 1974, as amended from time to time (“ERISA”)) and each profit-sharing,
stock bonus or other “pension” plan, fund or program (within the meaning of
Section 3(2) of ERISA), in each case, that is sponsored, maintained or
contributed to or required to be contributed to by Seller, or to which Seller is
party, for the benefit of any employee of Seller who is a Bargaining Unit
Employee or a Non-Bargaining Unit Employee (the “Employee Benefit Plans”). Each
of the Employee Benefit Plans that is subject to Section 302 or Title IV of
ERISA or Section 412 of the Code is hereinafter referred to in this
Section 6.1(o) as a “Title IV Plan.” Seller has no commitment or formal plan,
whether legally binding or not, to create any additional employee benefit plan
or modify or change any existing Employee Benefit Plan.

(ii) Except as disclosed in the Inspection Records, no Title IV Plan is a
“multiemployer pension plan,” as defined in Section 3(37) of ERISA (a
“Multiemployer Plan”), nor is any Title IV Plan a plan described in
Section 4063(a) of ERISA. As of the Execution Date, Seller has not made or
suffered a “complete withdrawal” or a “partial withdrawal,” as such terms are
respectively defined in Sections 4203 and 4205 of ERISA (or any liability
resulting therefrom has been satisfied in full).

(iii) To Seller’s knowledge, all Employee Benefit Plans are in substantial
compliance with ERISA. Each Employee Benefit Plan which is intended to be
qualified under Section 401(a) of the Code has received a favorable
determination letter from the Internal Revenue Service, and Seller is not aware
of any circumstances likely to result in revocation of any such favorable
determination letter.

(p) Equipment Leases. Except as disclosed in the Inspection Agreement, no
furniture, equipment, machinery, inventories, supplies, signs or other tangible
personal property installed or located at the Real Property is leased or
financed by Seller or its Affiliates.

(q) Insurance. Seller is maintaining the insurance described in the insurance
certificate attached to the Inspection Agreement, and the premiums therefor have
been paid through April 1, 2013. Seller has not received any written notice from
any insurance company or board of fire underwriters of any defects or
inadequacies in or on the Condominium Units or any part or component thereof
that would be reasonably likely to have a Material Adverse Effect on the
insurability of the Condominium Units or cause any material increase in the
premiums for insurance for the Condominium Units that have not been cured or
repaired. Except as set forth in the Inspection Agreement, Seller has not
received written notice that any insurance company has reserved rights or has or
will deny coverage under insurance policies applicable to active cases involving
the Property.

(r) Intellectual Property. Seller has not received written notice alleging that
the Intellectual Property or the operation of the Real Property (or any portion
thereof) infringes upon or otherwise violates the intellectual property rights
of any third party. No settlement agreements, consent agreements, or similar
agreements, or judgments, court orders, or similar obligations to which Seller
or its

 

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Affiliates is a party, limit Seller’s rights to own, use, or possess any of the
Intellectual Property. The Inspection Agreement contains a true, correct and
complete list of all registered trademarks used in the operation or ownership of
the Real Property or any part thereof, other than Excluded Property. Seller is
the sole owner of the Intellectual Property, including, without limitation, the
“Essex House” trademark. The trademark “Essex House” is valid, is a federally
registered trademark and is in full force and effect and transferable to
Purchaser.

(s) Personal Property. The Personal Property is owned free and clear by Seller.
Upon payment in full of the Purchase Price, the execution and delivery of the
Bill of Sale and Assignment, and, if applicable, Seller’s payment or assignment
of the existing mortgage financing in respect of the Property, all of Seller’s
right, title and interest in and to the Personal Property will be transferred to
Purchaser free and clear of all liens and encumbrances and rights of third
parties, except for Permitted Exceptions and for any liens approved by Purchaser
in writing.

(t) Operating Statements. The Inspection Records contains true and complete
copies of Seller’s operating statements for the calendar months January 2012
through June 2012, prepared in accordance with the current edition of the
Uniform System of Accounts for Hotels of the Hotel Association of New York City,
Inc., as adopted by the American Hotel Association of the United States and
Canada.

(u) Labor Matters.

(i) As of the Execution Date, except with respect to the Union Contract, no
employees of Seller, Hotel Manager or an Affiliate of Seller or Hotel Manager
are represented by any labor union or other labor organization with respect to
their employment at the Hotel-Related Units, and, to the knowledge of Seller,
there are no organizing activities, representation proceedings or demands for
recognition or certification pending with regard to such persons.

(ii) Except for the Union Contract, neither Seller nor an Affiliate of Seller is
a party to, bound by or in the process of negotiating any collective bargaining
agreement, memorandum of understanding or other labor-related contract,
arrangement or understanding with any labor union or other labor organization
applicable to persons employed by Seller or its Affiliate working at the
Hotel-Related Units.

(iii) Except for the Union Contract, neither Seller nor an Affiliate of Seller
is a party to, bound by or in the process of negotiating any employee leasing,
shared labor or potential joint employer contracts, arrangements or
understandings involving the Hotel-Related Units.

(iv) Except as set forth in the Inspection Records, there has been no strike,
boycott, slowdown, walkout, work stoppage, or lockout at the Hotel-Related Units
within the past six (6) months and there is no such labor action pending or, to
Seller’s knowledge, threatened against Seller or an Affiliate of Seller with
respect to employees who work at the Hotel-Related Units.

(v) Except as described in the Inspection Agreement, there are no grievances,
demands or arbitrations pending against Seller or an Affiliate of Seller under
any collective bargaining agreement, memorandum of understanding or other
labor-related contract, arrangement or understanding with respect to employees
who work at the Hotel-Related Units.

(vi) Except as described in the Inspection Agreement, neither Seller nor its
Affiliates have been the subject of or named in any unfair labor practice charge
or complaint under the National Labor Relations Act or similar law, or any other
charge or complaint (such as discrimination, harassment or retaliatory action)
before the EEOC, any state or city equivalent agency, or any workers
compensation board, and are not obligated by, or subject to, any order of

 

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the National Labor Relations Board or other labor board or administration, or
any unfair labor practice decision, or any order, consent decree or other
agreement with the EEOC, any state of city equivalent, or any workers
compensation board, with respect to current or former employees at the
Hotel-Related Units.

(vii) Seller and its Affiliates are in material compliance with all laws,
material agreements, contracts, and policies respecting employment and
employment practices with respect to employees of Seller or its Affiliates who
work at the Hotel-Related Units except for any non-compliance that would not be
reasonably likely to have, either individually or in the aggregate, a Material
Adverse Effect.

(viii) as of the Closing, not more than twenty-five (25) employees of Seller or
its Affiliates at the Hotel Unit will have experienced an “employment loss” (as
defined in the WARN Act) in the past ninety (90) days.

(v) Tax. Seller has duly and timely withheld and remitted or paid all sales,
use, excise, gross receipts, payroll, occupancy and similar taxes required to
have been withheld and remitted or paid in connection with the operation of the
hotel business to the extent that failure to withhold and remit or pay such
taxes would result in Purchaser being liable for such taxes or would give rise
to a lien on the Property. There are no pending real estate tax certiorari
proceedings other than as set forth in the Inspection Agreement.

(w) Condominium.

(i) Contained in the Inspection Records are true and complete copies of (A) the
condominium declaration for the Essex House Condominium and the by-laws annexed
thereto (collectively, the “Condominium Declaration”) and (B) the Amended and
Restated Offering Plan dated August 18, 2006, as amended through the date hereof
(the “2006 Plan”). The minutes of the meetings of the Board of Managers of the
Essex House Condominium (the “Board”) and the minutes of the meetings of unit
owners of the Essex House Condominium for the period of time from June 2010 to
August 2012 have been made available to Purchaser for inspection at the offices
of the Essex House Condominium. None of the foregoing documents have been
amended, modified or supplemented, except as set forth in the Inspection
Records.

(ii) Neither Seller nor, to Seller’s knowledge, the Board is in default under
Condominium Declaration and, except as set forth in the Inspection Agreement, no
claim has been made against Seller or the Essex House Condominium under the
Condominium Declaration. Except for the claims described in the Inspection
Agreement, there are no claims against Seller under the 2006 Plan.

(iii) Attached to the Inspection Agreement is a true and complete copy of the
Management Agreement dated January 15, 2006, between Essex House Condominium and
Jumeirah Hospitality & Leisure (USA) Inc. and includes all amendments and
modifications thereto, including, without limitation, that certain Settlement
Agreement and Release dated as of June 29, 2012 between Essex House Condominium
and Jumeirah Hospitality & Leisure (USA) Inc. (the “Condominium Management
Agreement”). There are no agreements with Jumeirah Hospitality & Leisure (USA)
Inc. which affect the management of the Essex House Condominium other than the
Condominium Management Agreement and other than any agreement entered after the
date hereof in accordance with Section 4.3. To Seller’s knowledge, there is no
default by Jumeirah Hospitality & Leisure (USA) Inc. under the Condominium
Management Agreement.

(iv) Seller has not received any written communications from the OAG or from any
purchasers or prospective purchasers of any unit sold by Seller at the Essex
House Condominium with respect to disclosures contained in the 2006 Plan or
under the Martin Act.

 

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(v) As of October 31, 2011, the 2006 Plan has expired and accordingly, Seller
had not marketed or entered into any contracts of sale for the Residential Units
since October 31, 2011.

(vi) To Seller’s knowledge, Seller and its Affiliates have performed all of
their material obligations under the 2006 Plan and Condominium Declaration, and
other than any obligation to pursue a permanent certificate of occupancy for the
Property, there remain no material unfulfilled obligations of Seller or any of
its Affiliates under the 2006 Plan and Condominium Declaration.

(x) Financial Statements. Contained in the Inspection Records are true,
complete, and correct copies of, the financial statements of Seller and the
Property as of, and for the year ended, December 31, 2011. No representation or
warranty is being provided by Seller as to the accuracy of such financial
statements.

(y) Compliance with Anti-Terrorism Laws. Neither Seller nor any person who owns
a controlling interest in or otherwise controls Seller is (i) listed on the
Specially Designated Nationals and Blocked Persons List or any other similar
list maintained by the Office of Foreign Assets Control, Department of the
Treasury, pursuant to any authorizing statute, Executive Order or regulation,
(ii) a “specially designated global terrorist” or other person listed in
Appendix A to Chapter V of 31 C.F.R., as the same has been from time to time
updated and amended, or (iii) a person either (A) included within the term
“designated national” as defined in the Cuban Assets Control Regulations, 31
C.F.R. Part 515 or (B) designated under Sections 1(a), 1(b), 1(c) or 1(d) of
Executive Order No. 13224, 66 Fed. Reg. 49079 (published September 25, 2001) or
a person similarly designated under any related enabling legislation or any
other similar Executive Orders.

(z) Compliance with Anti-Money Laundering Measures. Seller has taken measures as
required by law to assure that, with respect to each holder of a direct or
indirect interest in Seller, funds invested by such holders directly or
indirectly in Seller, are derived from legal sources and such measures have been
undertaken in accordance with the Bank Secrecy Act, 31 U.S.C. §§ 5311 et seq.,
and all applicable laws, regulations and government guidance on compliance
therewith and on the prevention and detection of money laundering violations
under 18 U.S.C. §§ 1956 and 1957.

(aa) Gift Cards, Gift Certificates and “Comp” Letters. The Inspection Agreement
sets forth a list of (I) each (x) letter issued to a guest of the Hotel-Related
Units providing such guest with a free or discounted night’s stay or free or
discounted food and beverage at the Hotel-Related Units (collectively, the “Comp
Letters”) that has not expired or been redeemed as of the date hereof, and
(y) gift certificate and gift card issued by the Hotel Manager (collectively,
the “Gift Cards and Certificates” and together with the Comp Letters, the “Gift
Items”) that has not been redeemed as of the date hereof, and (II) all tour and
travel commissions paid prior to the date hereof for future Bookings. The Gift
Items that have not expired or been redeemed as of the date hereof have an
approximate value of $111,205 in the aggregate.

Whenever a representation or warranty is made “to Seller’s knowledge,” or a term
of similar import, the accuracy of such representation or warranty shall be
based solely on the actual knowledge of Dinky Puri, Tojo John and Will
Armstrong, and Seller represents that such Persons are, in the ordinary course
of business, knowledgeable about the matters covered in this Section 6.1
(provided that, in no event shall any such person have any personal liability
arising under this Agreement) and the knowledge of Seller shall expressly
exclude the knowledge of any other shareholder, partner, member, trustee,
beneficiary, director, officer, manager, employee, agent or representative of
Seller or Hotel Manager or any of their respective Affiliates and “actual
knowledge” means, with respect to any person, the conscious awareness of such
person at the time in question, and expressly excludes any constructive or
implied knowledge of such person. This Section 6.1 shall survive the Closing
Date for the period and subject to the limitations set forth in Section 6.2 and
shall not be deemed merged into any instrument of conveyance delivered at the
Closing.

 

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6.2 Indemnity; Survival; Limitation of Liability.

(a) Subject to the provisions of this Section 6.2, Seller hereby agrees to
indemnify, defend and hold harmless Purchaser and Purchaser’s Affiliates and the
directors and officers of each of them, and their respective heirs, successors,
personal representatives and assigns (each, a “Purchaser Party” and
collectively, the “Purchaser Parties”) with respect to any and all suits,
actions, proceedings, investigations, demands, claims, liabilities, fines,
penalties, liens, judgments, losses, injuries, damages, expenses or costs,
including, without limitation, attorneys’ and experts’ fees (but only to the
extent reasonable) and costs of investigation and remediation costs
(collectively, “Purchaser Claims”), whether direct or indirect, known or
unknown, foreseen or unforeseen, that may exist or hereafter arise on account of
or in any way be connected with a breach of any of Seller’s representations and
warranties contained in this Agreement.

(b) The indemnifications and the representations and warranties of Seller set
forth in Sections 6.1(a), (b), (c), (d), (e) and (i) shall survive the Closing
Date indefinitely and shall not be deemed merged into any instrument of
conveyance delivered at the Closing (the “SOL Reps”).

(c) The indemnifications and the representations and warranties of Seller set
forth in Section 6.1(v) (the “Tax Reps”) shall survive the Closing Date for a
period of three hundred and sixty-five (365) days and shall not be deemed merged
into any instrument of conveyance delivered at the Closing, but no action or
proceeding thereon shall be valid or enforceable, at law or in equity, if notice
of intent to commence a legal proceeding is not delivered on or before such date
and if a legal proceeding is not then commenced within ninety (90) days after
such date.

(d) The indemnifications and the representations and warranties of Seller set
forth in all other subsections of Section 6.1 shall survive the Closing Date for
a period of three hundred and sixty-five (365) days and shall not be deemed
merged into any instrument of conveyance delivered at the Closing, but no action
or proceeding thereon shall be valid or enforceable, at law or in equity, if
notice of intent to commence a legal proceeding is not delivered on or before
such date and if a legal proceeding is not then commenced within ninety
(90) days after such date.

(e) In no event shall the total liability of Seller under the aforesaid
indemnity for any breach of a representation and/or warranty set forth in all
subsections of Section 6.1 by Seller (other than with respect to SOL Reps or the
Tax Reps), in the aggregate, exceed $15,000,000. At Closing, Seller and
Purchaser shall instruct the Escrow Agent to withhold from the proceeds due
Seller the sum of $7,000,000 (the “Post Closing Escrow Amount”), and to deposit
the Post Closing Escrow Amount into a separate interest-earning escrow account
(the “Post Closing Escrow Account”) to be held in escrow by Escrow Agent and
disbursed in accordance with the terms and conditions set forth in the escrow
agreement attached as Exhibit 6.2(e) (the “Post Closing Escrow Agreement”) Any
Purchaser Claims or claims arising under Section 6.2(h) shall be satisfied first
from the Post Closing Escrow Amount and then to the extent the Post Closing
Escrow Amount is exhausted from Seller, subject to the limitation set forth in
this Section 6.2(e).

(f) Seller’s liability for SOL Reps and Tax Reps shall not be capped.

(g) Seller shall have no liability for consequential, exemplary or punitive
damages resulting from any such breach. Seller shall have no liability for any
Purchaser Claims resulting from any breach of any representation or warranty set
forth herein except for the portion, if any, of such Purchaser Claims which, in
the aggregate, are in excess of $1,000,000. Notwithstanding the foregoing, if,
prior to the Closing, Purchaser obtains actual knowledge, or is deemed to have
knowledge, that any representation and/or warranty of Seller is inaccurate,
untrue or incorrect and Purchaser nonetheless proceeds with the Closing, Seller
shall have no liability for any such inaccurate, untrue or incorrect
representation or warranty to the extent of Purchaser’s actual or deemed
knowledge.

(h) Notwithstanding any other provision of this Agreement to the contrary,
Purchaser expressly does not assume, and Seller shall retain, and shall
indemnify, defend and hold harmless Purchaser from and against, all direct or
indirect liabilities, and such obligations shall survive Closing with no minimum
or maximum amounts and with no time limitation other than the relevant statute
of limitations, for or with respect to:

 

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(i) the payment of any amounts due and payable or accrued but not yet due or
payable prior to the Closing under the Property Contracts, the Leases, the Union
Contract, the Hotel Management Agreement and the Permits, except to the extent
Purchaser has received a credit for such liabilities,

(ii) the payment of all taxes due and payable or accrued but not yet due or
payable prior to the Closing Date, except to the extent Purchaser has received a
credit for such taxes,

(iii) the employment of any Bargaining Unit Employees and Non-Bargaining Unit
Employees to the extent arising or accruing prior to the Closing Date, including
the payment of any compensation due to such Bargaining Unit Employees and
Non-Bargaining Unit Employees and including but not limited to any liabilities
to any Bargaining Unit Employees and Non-Bargaining Unit Employees under any of
Seller’s employee plans, except to the extent Purchaser has received a credit
for such liabilities,

(iv) the employment of any Non-Bargaining Unit Employees that are not
Transferred Employees, whether arising or accruing prior to or following the
Closing,

(v) payment or resolution of mechanics’ or materialmens’ lien(s) filed against
the Property relating to periods prior to the Closing (except to the extent such
lien(s) are required to be cured or discharged by the Tenant under any Lease),
including, without limitation, Seller Encumbrances,

(vi) any claim arising from events at the Property or the Essex House
Condominium during the period of Seller’s ownership of the Hotel Unit relating
to: (A) personal injury, wrongful death, or property damage; (B) the 2006 Plan;
and (C) the sale or condition of any real property described in the 2006 Plan;
provided that Seller shall have no obligation to retain, or indemnify Purchaser
against, liabilities arising out of claims described in this Section 6.2(h)(vi)
to the extent such liabilities are covered by insurance maintained by Purchaser
(and Seller hereby agrees that any statute of limitations with respect to such
claims shall be tolled while Purchaser pursues payment under such insurance) nor
shall Seller have any obligation to retain, or indemnify Purchaser against,
liabilities arising out of this Section 6.2(h)(vi) to the extent such
liabilities do not exceed $5,000 per claim and $35,000 for all claims in the
aggregate.

6.3 Purchaser’s Representations. Purchaser warrants and represents to Seller as
follows:

(a) Legal Existence. Purchaser is a corporation duly formed, validly existing
and in good standing under the laws of the State of Maryland.

(b) Authority. Purchaser has full right, power and authority and is duly
authorized to enter into this Agreement, to perform each of the covenants and
obligations on its part to be performed hereunder and to execute and deliver,
and to perform its obligations under all documents required to be executed and
delivered by it pursuant to this Agreement, and this Agreement constitutes the
valid and legally binding obligation of Purchaser enforceable against Purchaser
in accordance with its terms; each of the individuals executing this Agreement
on Purchaser’s behalf is authorized to do so.

(c) Litigation. There are no actions, suits or proceedings (including, but not
limited to, bankruptcy) pending or, to the knowledge of Purchaser, threatened
against Purchaser or affecting Purchaser which, if determined adversely to
Purchaser, would adversely affect its ability to perform its obligations
hereunder.

 

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(d) Conflicts. Neither the execution, delivery or performance of this Agreement
nor compliance herewith (a) conflicts or will conflict with or results or will
result in a breach of or constitutes or will constitute a default under (1) the
organizational documents of Purchaser, (2) any judgment, statute, law or any
order, writ, injunction or decree of any court or governmental authority
applicable to Purchaser, or (3) any agreement or instrument to which Purchaser
is a party or by which it is bound, or (b) results in the creation or imposition
of any lien, charge or encumbrance upon its property pursuant to any such
agreement or instrument.

(e) Governmental Approvals. No authorization, consent or approval of any
governmental authority or public (including courts) is required for the
execution and delivery by Purchaser of this Agreement or the performance of its
obligations hereunder.

(f) Taxpayer I.D. Purchaser’s taxpayer identification number is 30-0746146.

(g) Compliance with Anti-Terrorism Laws. Neither Purchaser nor any person who
owns a controlling interest in or otherwise controls Purchaser is (i) listed on
the Specially Designated Nationals and Blocked Persons List or any other similar
list maintained by the Office of Foreign Assets Control, Department of the
Treasury, pursuant to any authorizing statute, Executive Order or regulation,
(ii) a “specially designated global terrorist” or other person listed in
Appendix A to Chapter V of 31 C.F.R., as the same has been from time to time
updated and amended, or (iii) a person either (A) included within the term
“designated national” as defined in the Cuban Assets Control Regulations, 31
C.F.R. Part 515 or (B) designated under Sections 1(a), 1(b), 1(c) or 1(d) of
Executive Order No. 13224, 66 Fed. Reg. 49079 (published September 25, 2001) or
a person similarly designated under any related enabling legislation or any
other similar Executive Orders.

(h) Compliance with Anti-Money Laundering Measures. Purchaser has taken measures
as required by law to assure that (i) funds to be used to pay the Purchase Price
and (ii) with respect to each holder of a direct or indirect interest in
Purchaser, funds invested by such holders directly or indirectly in Purchaser,
are derived from legal sources and such measures have been undertaken in
accordance with the Bank Secrecy Act, 31 U.S.C. §§ 5311 et seq., and all
applicable laws, regulations and government guidance on compliance therewith and
on the prevention and detection of money laundering violations under 18 U.S.C.
§§ 1956 and 1957.

(i) Purchaser Reliance. Purchaser is experienced in and knowledgeable about the
ownership, management, leasing and purchase of commercial real estate and hotel
properties, and has relied and will rely exclusively on its own consultants,
advisors, counsel, employees, agents, principals and/or studies, investigations
and/or inspections with respect to the Property, its tax or legal status,
condition, value and potential, except solely for the representations and
warranties in this Agreement and in the other documents delivered in connection
with the Closing hereunder. Purchaser agrees that, notwithstanding the fact that
it has received certain information from Seller or its agents or consultants or
brokers, Purchaser has relied solely upon and will continue to rely solely upon
its own analysis and will not rely on any information provided by Seller or its
agents or consultants or brokers, except solely for the representations and
warranties in this Agreement and in the other documents delivered in connection
with the Closing hereunder.

Subject to the provisions of this Section 6.3, Purchaser hereby agrees to
indemnify, defend and hold harmless Seller and Seller’s Affiliates and the
members, directors and officers of each of them, and their respective heirs,
successors, personal representatives and assigns (each, a “Seller Party” and
collectively, the “Seller Parties”) with respect to any and all suits, actions,
proceedings, investigations, demands, claims, liabilities, fines, penalties,
liens, judgments, losses, injuries, damages, expenses or costs, including,
without limitation, attorneys’ and experts’ fees (but only to the extent
reasonable) and costs of investigation and remediation costs (collectively,
“Seller Claims”), whether direct or indirect, known or unknown, foreseen or
unforeseen, that may exist or hereafter arise on account of or in any way be
connected with a breach of any of Purchaser’s representations and warranties
contained in this Agreement.

 

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The representations and warranties of Purchaser as set forth in or made pursuant
to this Agreement shall survive the Closing Date for a period of two hundred
seventy (270) days and shall not be deemed merged into any instrument of
conveyance delivered at the Closing, and no action or proceeding thereon shall
be valid or enforceable, at law or in equity, if a legal proceeding is not
commenced within that time. Purchaser shall have no liability for consequential,
indirect, exemplary or punitive damages resulting from any breach of any
representation or warranty.

6.4 Property Conveyed “As Is”. Other than as expressly set forth in Section 6.1
or elsewhere in this Agreement, Seller specifically disclaims any warranty,
guaranty or representation of any kind or character, express or implied, with
respect to the Property, including, but not limited to, warranties or
representations as to matters of title, zoning, tax consequences, physical or
environmental conditions, availability of access, ingress or egress, operating
history or projections, valuation, governmental approvals, governmental
regulations or any other matter or thing relating to or affecting the Property.
Purchaser acknowledges it is a knowledgeable purchaser of real estate and that,
except for Seller’s representations set forth in Section 6.1 and elsewhere in
this Agreement, it is purchasing the Property solely in reliance on its own
expertise and investigations and those of Purchaser’s agents and that, Purchaser
has had a full and complete opportunity to conduct such investigations,
examinations, inspections and analysis of the Property as Purchaser, in its sole
and absolute discretion, may determine, and will rely upon same. In
consideration of the agreements of Seller herein, Purchaser expressly
acknowledges that, other than as expressly set forth in this Agreement, Seller
makes no representations or warranties, express or implied, or arising by
operation of law, including, but not limited to, any warranty of value,
condition, habitability, merchantability, marketability, profitability,
suitability or fitness for a particular purpose or use of the Property. In
consideration of the agreements of Seller in this Agreement, Purchaser
(i) acknowledges that, other than as set forth in this Agreement or in any other
documents delivered pursuant to Section 8.2, it has not relied upon, either
directly or indirectly, any representation or warranty of or any statements,
information or other material provided by Seller or any agent of Seller,
(ii) assumes the risk that adverse matters, including, but not limited to,
adverse physical, financial and environmental conditions, may not have been
revealed by Purchaser’s inspections and investigations, (iii) acknowledges that,
other than as set forth in this Agreement, Seller is conveying to Purchaser and
Purchaser is accepting the Property “AS IS, WHERE IS, WITH ALL FAULTS”,
(iv) acknowledges and agrees that there are no oral agreements, warranties, or
representations, collateral to or affecting the Property by Seller, any agent of
Seller or any third party and (v) acknowledges that, except as expressly set
forth in this Agreement, Seller has not made an independent investigation or
verification of the accuracy or completeness of any documents, studies, surveys,
information or materials which were prepared by parties other than Seller and
which were provided, or made available, to Purchaser or the methods employed by
the preparers of such items. The provisions of this Section 6.4 shall survive
(i) the Closing and shall not be deemed merged into any instrument of conveyance
delivered at the Closing or (ii) earlier termination of this Agreement. The
parties acknowledge and agree that all understandings and agreements heretofore
made between them or their respective agents or representatives regarding the
purchase and sale of the Property are merged into this Agreement and the
Exhibits attached hereto, which alone fully and completely express their
agreement, and that neither party is relying upon any statement, promise or
representation by any other party unless such statement, promise or
representation is specifically and expressly set forth in this Agreement or the
Exhibits attached hereto, or is subsequently expressly made by Seller in the
closing documents or any other documents executed by Seller and delivered to
Purchaser hereunder.

6.5 Release.

(a) Except solely for actions commenced during the survival period applicable
thereto as set forth in Section 6.2 following the Closing Date for a breach of
Seller’s representations and warranties set forth in this Agreement or in any
other documents delivered pursuant to Section 8.2 (and subject to the provisions
of Section 6.2), Purchaser hereby waives and agrees not to commence any action,
legal proceeding, cause of action or suits in law or equity, of whatever kind or
nature, directly or indirectly, against any of Seller, Seller’s Affiliates or
Seller Parties or their agents in connection with the Purchaser Claims for a
breach of Seller’s representations and warranties set forth in this Agreement.
Purchaser elects to and does assume all risk for such claims heretofore and
hereafter arising, whether now known or unknown by Purchaser. To the extent
permitted by law, Purchaser hereby agrees, represents and warrants that
Purchaser realizes and acknowledges that factual matters now unknown to it may
have given or may hereafter give rise to causes of action, claims, demands,
debts, controversies, damages, costs, losses and expenses which are presently
unknown, unanticipated and unsuspected, and Purchaser further agrees,

 

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represents and warrants that the waivers and releases herein have been
negotiated and agreed upon in light of that realization and that, except for a
breach of Seller’s representations and warranties on which action is commenced
within the applicable survival period hereunder, Purchaser nevertheless hereby
intends to release, discharge and acquit Seller from any such unknown causes of
action, claims, demands, debts, controversies, damages, costs, losses and
expenses which might in any way be included as a material portion of the
consideration given to Seller by Purchaser in exchange for Seller’s performance
hereunder.

(b) Without limitation of the foregoing, if Purchaser as of the Closing has
actual knowledge or deemed knowledge of (i) a default in any of the covenants,
agreements or obligations to be performed by Seller under this Agreement prior
to the Closing and/or (ii) any breach of or inaccuracy in any representation or
warranty of Seller made in this Agreement, and Purchaser nonetheless elects to
proceed to Closing, then, upon the consummation of the Closing, Purchaser shall
be deemed to have waived any such default and/or breach or inaccuracy and shall
have no Purchaser Claim against Seller, Seller’s Affiliates or the other Seller
Parties with respect thereto to the extent of Purchaser’s actual or deemed
knowledge.

(c) The provisions of this Section 6.5 shall survive (i) the Closing and shall
not be deemed merged into any instrument of conveyance delivered at the Closing
or (ii) earlier termination of this Agreement.

7. Conditions Precedent.

7.1 Conditions Precedent to Purchaser’s Obligations. Purchaser’s obligations
under this Agreement are expressly subject to the timely fulfillment of the
conditions set forth in this Section 7.1 on or before the Closing Date. Each
condition may be waived in whole or in part only by written notice of such
waiver from Purchaser to Seller. Seller shall use commercially reasonable
efforts to satisfy such conditions as are within Seller’s reasonable control.

(a) Seller performing and complying with all of the terms of this Agreement to
be performed and complied with by Seller prior to or at the Closing.

(b) All of the representations and warranties of Seller set forth in this
Agreement shall be true, accurate and complete as of the Closing Date, except
for those representations and warranties expressly made only as of the Execution
Date (which shall nonetheless be true as of such date).

(c) The Title Company’s issuance of a Title Policy or commitment to issue a
Title Policy complying with the requirements of Section 3.3.

(d) Richard Siegler, Herbert Teitelbaum and Chris Mander shall have resigned
from the Board of Managers of Essex House Condominium.

(e) The receipt by Seller of the “no-action letter” from the OAG described in
Section 4.3(h).

(f) At Purchaser’s sole election, to be made not less than ten (10) Business
Days prior to the Closing Date, Seller shall cause Hotel Manager to enter into
an agreement (the “Interim Jumeirah Agreement”) with Purchaser allowing
Purchaser the right to have the Hotel-Related Units operated by Hotel Manager as
a Jumeirah-branded hotel for up to sixty (60) days following the Closing Date in
accordance with the terms and conditions of the Hotel Management Agreement;
provided, however, that the Interim Jumeirah Agreement, shall specify, at a
minimum, that (i) Purchaser shall not be obligated to pay (or repay) to Hotel
Manager or any Affiliate of Hotel Manager any management fees (including,
without limitation, any base or incentive fees, whether accrued prior to the
Closing or attributable to the period following the Closing), termination fees,
key money, loans, marketing charges and centralized service charges, in each
case, as set forth in the Hotel Management Agreement, but Purchaser shall pay
reimbursable expenses incurred in accordance with the Hotel Management Agreement

 

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during the term of the Interim Jumeirah Agreement; (ii) Purchaser shall not be
obligated to fund any reserves with Hotel Manager during the term of the Interim
Jumeirah Agreement; and (iii) Hotel Manager shall assist with any transition to
a management company designated by Purchaser. In the event that Purchaser makes
the election to retain Hotel Manager as the operator for the Hotel-Related Units
as provided above, Jumeirah Hospitality & Leisure (USA) Inc. shall also continue
to manage the Essex House Condominium pursuant to the Condominium Management
Agreement.

7.2 Conditions Precedent to Seller’s Obligations. Seller’s obligations under
this Agreement are expressly subject to the timely fulfillment by Purchaser of
the conditions set forth in this Section 7.2 on or before the Closing Date. Each
condition may be waived in whole or part only by written notice of such waiver
from Seller to Purchaser.

(a) Purchaser paying the Balance of the Purchase Price.

(b) Purchaser performing and complying with all of the terms of this Agreement
to be performed and complied with by Purchaser prior to or at the Closing.

(c) On the Closing Date, all of the representations and warranties of Purchaser
set forth in this Agreement shall be true, accurate and complete in all material
respects.

(d) The receipt by Seller of the “no-action letter” from the OAG described in
Section 4.3(h).

8. Closing.

8.1 Closing Date.

(a) Closing. The closing shall take place at the office of Morrison & Foerster
LLP, 1290 Avenue of the Americas, New York, New York 10104 at 1:00 P.M. (New
York City time) or through customary closing arrangements reasonably acceptable
to Seller and Purchaser (the “Closing”), on August 31, 2012 (as extended
pursuant to the proviso of this sentence, the “Closing Date”); provided,
however, Purchaser shall have the right, upon written notice to Seller and the
Escrow Agent at least three (3) Business Days prior to the originally scheduled
Closing Date, to extend the Closing Date for up to but not beyond September 7,
2012. Time shall be of the essence with respect to the parties’ obligations to
consummate the transactions contemplated by this Agreement on the Closing Date.

8.2 Seller’s Deliveries. At or prior to the Closing, Seller shall deliver or
cause to be delivered, at Seller’s sole expense (except where expressly provided
to the contrary below) pursuant to customary closing escrow arrangements
reasonably satisfactory to Seller and Purchaser, each of the following items
with respect to the Property:

(a) A bargain and sale deed with covenants against grantor’s acts duly executed
and acknowledged by Seller, in the form attached hereto as Exhibit 8.2(a),
subject only to the Permitted Exceptions.

(b) Two (2) duly executed and acknowledged original counterparts of a Bill of
Sale and General Assignment (the “Bill of Sale and Assignment”) in the form
attached hereto as Exhibit 8.2(b).

(c) Two (2) duly executed and acknowledged original counterparts of the
Assignment and Assumption of Lease (including an assignment of all of Seller’s
rights, if any, in the Tenant Deposits) in the form attached hereto as
Exhibit 8.2(c).

(d) Two (2) duly executed and acknowledged original counterparts of the
Assignment of Bookings and Booking Deposits in the form attached hereto as
Exhibit 8.2(d).

 

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(e) Two (2) duly executed and acknowledged original counterparts of the
Assignment of Intellectual Property in the form attached hereto as
Exhibit 8.2(e).

(f) A duly executed notice of termination to each counterparty to a Terminable
Contract advising such counterparty that such Terminable Contract is terminated
effective as of the end of the notice period required under such Terminable
Contract to terminate such Terminable Contract.

(g) A duly executed copy of a letter to each counterparty to the Property
Contracts, in the form attached hereto as Exhibit 8.2(g) or as otherwise
required pursuant to the terms of such Property Contract, advising them of the
sale of the Property to Purchaser, which letter shall be delivered by Purchaser
to each of such counterparties.

(h) All keys and combinations to all locks on the Property (including, without
limitation. those used by Seller) and all documents, instruments or records in
the possession of Seller (or to which Seller is otherwise entitled) which are
necessary for the ownership and operation of the Property. Delivery of such
keys, documents, instruments and records may be effected by leaving them at the
Property.

(i) Two (2) duly executed copies of a non-foreign person affidavit in the form
attached hereto as Exhibit 8.2(i) sworn to by Seller as required by Section 1445
of the Code.

(j) [intentionally omitted];

(k) An affidavit to the Title Company in the form of Exhibit 8.2(k) hereto
relating to certain title, survey and lien matters and such evidence,
certificates or documents relating to the status and capacity of Seller and the
authority of the person or persons who are executing the various documents on
behalf of Seller in connection with the purchase of the Property as may be
reasonably required by the Title Company in order to issue the Title Policy.

(l) A duly executed copy of a 1099-S form required by the Internal Revenue
Service.

(m) (i) Originals, or if originals are unavailable, copies of all the Property
Contracts all Permits, and all other documents in the possession of Seller or
the Hotel Manager required for the operation of the Property and including all
permits, licenses, approvals, plans, specifications, surveys, guaranties and
warranties (but excluding Excluded Property and projections and analyses
relating to the operation of the Property), it being agreed that delivery of the
Property Contracts may be effected by leaving them at the Property; (ii) data
and materials (including IP, IT, software, websites and phone numbers)
constituting or relating to the Hotel Unit IP, Books and Records and the
Intellectual Property that are required for the operation of the Property, but
excluding Excluded Property and projections and analyses relating to the
operation of the Property; (iii) information as to all Bookings, advance room
reservations, functions and the like, in reasonable detail, and (iv) information
regarding each employee whose employment is to be continued by Hotel Manager or
Purchaser’s designated management company (or Affiliate) upon Closing, as to
salaries and duties and length of service, the date to which such employee has
been paid, accrued but unpaid sick leave, vacation pay, salary, wages, bonuses,
profit sharing, pension, health and welfare benefits, employee severance
payments and other compensation and fringe benefits, and whether such employee
is participating in a group health plan maintained by Seller, Hotel Manager or
any of their Affiliates through the exercise of COBRA benefits or otherwise.

(n) Two (2) duly executed original counterparts of the Preliminary Closing
Statement in accordance herewith.

(o) Two (2) duly executed and acknowledged original counterparts of a New York
City Real Property Transfer Tax Return, including Property Owner’s Registration
Form.

 

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(p) Two (2) duly executed original counterparts of an Affidavit in Lieu of
Registration Statement.

(q) Two (2) duly executed original counterparts of a New York State Combined
Real Estate Transfer Tax Return, Credit Line Mortgage Certificate and
Certificate of Exemption from the Payment of Estimated Personal Income Tax,
properly completed.

(r) The estoppel certificate from the Board in the form of Exhibit 8.2(r)
attached hereto.

(s) Two (2) duly executed original counterparts of a New York State Real
Property Transfer Report for New York City, properly completed.

(t) To the extent applicable, two (2) duly executed original counterparts of the
Interim Jumeirah Agreement.

(u) [intentionally omitted]

(v) Unless Purchaser has made the election to require the Interim Jumeirah
Agreement in accordance with Section 7.1(f), one or more written agreements from
Jumeirah Hospitality & Leisure (USA) Inc. to Seller pursuant to which Hotel
Manager confirms the termination of the Hotel Management Agreement dated
January 15, 2006 between Hotel Manager and Seller (as amended, supplemented or
otherwise modified, the “Hotel Management Agreement”) and Jumeirah Hospitality &
Leisure (USA) Inc. confirms the termination of the Condominium Management
Agreement, in each case, effective as of the Closing Date; provided, however,
upon Purchaser’s request made at least five (5) Business Days prior to the
Closing Date, Seller shall instead cause Jumeirah Hospitality & Leisure (USA)
Inc. to assign its interest in the Condominium Management Agreement at Closing
to a first class hotel operator designated by Purchaser.

(w) Two (2) duly executed and acknowledged original counterparts of the
Assignment and Assumption of Sponsor’s Rights with respect to the Condominium
Declaration in the form attached hereto as Exhibit 8.2(w).

(x) To the extent required at Closing in accordance with Section 4.2, Two
(2) original counterparts of the Interim Agreement, fully executed by Seller and
Manager (as defined therein) and any of their necessary Affiliates.

(y) Such other documents as may be reasonably necessary or appropriate to effect
the consummation of the transaction which is the subject of this Agreement or
which are otherwise required or contemplated by this Agreement.

8.3 Purchaser’s Deliveries. At or prior to the Closing (unless expressly set
forth below), Purchaser shall deliver the following items to be transferred at
the Closing pursuant to customary closing escrow arrangements reasonably
satisfactory to Seller and Purchaser:

(a) By wire transfer (as adjusted in accordance with the provisions of this
Agreement) of immediately available federal funds, the Balance of the Purchase
Price.

(b) Two (2) duly executed and acknowledged original counterparts of each of
Seller’s deliveries set forth in Sections 8.2(a), (b), (c), (d), (e), (j), (n),
(t), (w) and (x) (if applicable).

(c) No later than fifteen (15) Business Days prior to the Closing Date, two
(2) duly executed and acknowledged original counterparts of the Assumption
Agreement in the form attached hereto as Exhibit 8.3(c), which Assumption
Agreement and counterparts shall be delivered to the labor union associated with
the Hotel-Related Units together with a letter, in form and substance reasonably
acceptable to Seller, signed by Purchaser and identifying the Purchaser as the
successor owner of the Real Property and enclosing the applicable provisions
from this Agreement that require Purchaser to assume the Union Contract.

 

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(d) Such evidence, certificates or documents as may be reasonably required by
the Title Company relating to the status and capacity of Purchaser and the
authority of the person or persons who are executing the various documents on
behalf of Purchaser in connection with the purchase of the Property.

(e) Such other documents as may be reasonably necessary or appropriate to effect
the consummation of the transaction which is the subject of this Agreement or
which are otherwise required or contemplated by this Agreement.

8.4 Costs and Prorations.

(a) Closing Costs. Purchaser, on the one hand, and Seller, on the other hand,
shall each pay their own legal fees related to the negotiation and preparation
of this Agreement and all documents required to consummate the transaction
contemplated hereby. Seller shall pay (i) the costs to remove, discharge or
insure over any Seller Encumbrances and all recording fees associated with
Seller Encumbrances, (ii) all fees and charges due and payable to Hotel Manager
under the Hotel Management Agreement, including any termination fees associated
with the termination of said agreement (notwithstanding the execution of the
Interim Jumeirah Agreement, if applicable), and any related de-identification
costs and expenses (including any such expenses incurred after the Closing Date)
and (iii) any prepayment penalties on mortgage debt encumbering the Property and
costs related to the repayment or release of such debt, subject to the
provisions of Section 4.3(j). Purchaser shall pay (i) all costs associated with
its due diligence, including, without limitation, the cost of appraisals,
architectural, engineering, credit and environmental reports, (ii) all mortgage
taxes, if any, (iii) all recording fees (other than to discharge Seller
Encumbrances), (iv) all sales and use taxes applicable to the sale of the
Personal Property, (v) the premium for any title insurance including the Title
Policy, (vi) all new survey or update costs and (vii) the costs of title search
and examination with respect to the Property ordered by Purchaser. Seller shall
pay all city, state and county transfer taxes and similar amounts relating to
the conveyance of the Real Property from Seller to Purchaser. Purchaser, on the
one hand, and Seller, on the other hand, shall each pay fifty percent (50%) of
any escrow charges of Escrow Agent related to the Deposit and the Closing. All
other customary purchase and sale closing costs shall be paid by Seller or
Purchaser in accordance with the custom in the jurisdiction of New York.

(b) Prorations. The following shall be prorated between Seller and Purchaser as
of the Cut-Off Time:

(i) All real estate taxes, water or sewer charges and general or special
assessments on the Real Property, or any other governmental tax or charge levied
or assessed against the Property. If the Closing shall occur before the actual
amounts payable are known, then apportionment shall be based on the most
recently ascertainable tax rates and assessed value of the Property. Seller
shall be responsible for all such taxes that are allocable to any period prior
to the Closing Date and Purchaser shall be responsible for all such taxes
allocable to any period from and after the Closing Date. If any taxes or
assessments relating to the period prior to the Closing are paid in
installments, then Seller shall pay on or before the Closing Date any remaining
installments with respect to such taxes or assessments that are allocable to any
period prior to the Closing Date. Seller and Purchaser agree that to the extent
the actual taxes for the current year differ from the amount so apportioned at
Closing, the parties hereto will within thirty (30) days after receipt of a
request from Purchaser or Seller, as applicable, make all necessary adjustments
by appropriate payments between themselves promptly following the Closing. At
Closing, Seller shall transfer to Purchaser control of all pending real estate
tax certiorari proceedings which would or could affect post-Closing periods.
After Closing, Purchaser shall pay over to Seller any sums realized through such
certiorari proceedings which are allocable to periods prior to Closing (after
recovery of a reasonable allocation of the legal expense and other costs
incurred in realizing such sums).

 

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(ii) All rent for the month in which the Closing occurs with respect to the
Leases shall be prorated at Closing. There shall be no credit for delinquent
rent, which shall be paid over by Purchaser to Seller if collected by Purchaser
after the Closing.

(iii) With respect to Property Contracts assumed by Purchaser in accordance with
this Agreement, (1) Seller shall be credited for sums prepaid by Seller under
the Property Contracts, (2) Purchaser shall be credited for any amounts under
the Property Contracts which as of Closing are due or accrued and relate to the
period prior to Closing and (3) Purchaser and Seller shall prorate any amounts
prepaid by the counterparty to any Property Contract (including, without
limitation, prepaid bonuses or decorating allowances paid to Seller with respect
to laundry or other similar ancillary agreements) over the term of the Property
Contract.

(iv) Seller shall perform, or cause to be performed, an accounting of cash on
hand at the Property (i.e., in-house banks and petty cash, including till money,
and, to the extent same are the property of Seller, vending machines and pay
telephones) in the presence of a representative of Purchaser and Purchaser shall
retain such amounts and Seller shall be credited with a like amount at Closing.

(v) All tour and travel agent commissions paid prior to Closing by Seller in
respect of Bookings relating to a period after the Closing shall be credited to
Seller at Closing. All advance deposits received by Seller prior to Closing in
respect of Bookings relating to a period after the Closing shall be credited to
Purchaser at Closing. Purchaser shall have no obligation to honor any reward
stays occurring after Closing and accordingly Purchaser shall receive no credit
for any such reward stay it elects to honor after Closing.

(vi) All accrued compensation (including without limitation, accrued severance
and vacation benefits and any other benefits) payable to Transferred Employees
and Bargaining Unit Employees (including, without limitation, compensation and
benefits provided for under the Union Contract with respect to employees covered
by the Union Contract) and any applicable employment and withholding taxes of
such employees, attributable to the period prior to Closing, shall be credited
to Purchaser.

(vii) To the extent that with respect to electricity, telephone, television,
gas, water and sewer services which are metered and other utilities, Seller
shall use reasonable efforts to have the respective companies providing such
utilities read the meters on or immediately prior to the Cut-Off Time. Seller
shall be responsible for all charges based on such final meter readings and
Purchaser shall be responsible for all charges thereafter. To the extent such
meters are not read and final bills rendered as of the Cut-Off Time, such
charges with respect to the Property shall be prorated effective as of the
Cut-Off Time utilizing an estimate of such charges reasonably approved by both
Purchaser and Seller based on prior utility bills, unless Seller elects to close
its own applicable account as of the Cut-Off Time, in which event Purchaser
shall open its own account as of the Closing Date and the respective charges
shall not be prorated, and, if Seller does not close its own applicable account,
any deposits or credits with respect to the foregoing services will be credited
to Seller if Purchaser receives full credit therefor from the utility. Upon the
taking of a subsequent actual reading, such apportionment shall be adjusted to
reflect the actual rate for the billing period in which the date of Closing
falls, and Seller, or Purchaser, as the case may be, shall promptly deliver to
the other the amount determined to be due upon such adjustment.

(viii) Seller shall be responsible for all condominium charges, including
without limitation Common Charges and Special Assessments, if any (as such terms
are defined in the Condominium Documents) and such other charges as may be due
under the Condominium Documents (collectively, the “Condominium Charges”), in
respect of the Essex House Condominium that are allocable to any period prior to
the Closing Date and Purchaser shall be

 

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responsible for all such Condominium Charges allocable to any period from and
after the Closing Date. If any such Condominium Charges relating to the period
prior to the Closing are paid in installments, then Seller shall pay on or
before the Closing Date any remaining installments with respect to such
Condominium Charges that are allocable to any period prior to the Closing Date
and same shall be adjusted between Seller and Purchaser as of the Cut-Off Time.
Seller and Purchaser agree that to the extent the actual Condominium Charges
differ from the amount so apportioned at Closing, the parties hereto will within
thirty (30) days after receipt of a request from Purchaser or Seller, as
applicable, make all necessary adjustments by appropriate payments between
themselves promptly following the Closing.

(ix) As of the date hereof the balance of the FF&E reserve held for Seller’s
benefit for the Hotel-Related Units is $7,065,390.25 (the “FF&E Balance”). At
Closing, Purchaser shall receive a credit in an amount equal to the FF&E Balance
on the date hereof. Notwithstanding the foregoing, between the date hereof
through and including the Closing Date, Seller may use any portion of the FF&E
Balance or increase the FF&E Balance; provided, however, (x) no increase in the
FF&E Balance over the FF&E Balance on the date hereof shall be credited to
Purchaser at Closing and (y) no reduction in the FF&E Balance below the FF&E
Balance on the date hereof shall result in a credit to Purchaser at Closing of
less than the FF&E Balance on the date hereof.

Representatives of Seller and Purchaser shall make such inventories,
examinations and audits of Seller, and of the books and records of Seller, as
may be necessary to make the adjustments and prorations required under this
Agreement. Prior to Closing, representatives of Purchaser and Seller shall
jointly prepare a statement (the “Preliminary Closing Statement”) based upon
such preliminary inventories, audits and examinations which will show the net
amount due to Seller or Purchaser as the result thereof, and that net amount
will be added to, or deducted from, the Purchase Price. Within ninety (90) days
following the Closing, representatives of Purchaser and Seller shall prepare a
revised statement (the “Final Closing Statement”, and together with the
Preliminary Closing Statement, collectively, the “Closing Statements”) setting
forth the final determination of all items to be included in the Closing
Statements, and any necessary payment shall be made within thirty (30) days
after completion of such Final Closing Statement. Any item which cannot be
finally prorated because of the unavailability of information shall be
tentatively prorated on the basis of the best data then available and
re-prorated when the information is available. The provisions of this
Section 8.4 shall survive the Closing for a period of twelve (12) months and
shall not be deemed merged into any instrument of conveyance delivered at the
Closing.

Purchaser and Seller acknowledge and agree that, except as otherwise expressly
provided herein, the purpose and intent of the provisions set forth in this
Section 8.4 and elsewhere in this Agreement as to prorations and apportionments
is that Seller shall bear all expenses of the ownership and operation of the
Property (for which buyers and sellers of hotels in The City of New York would
customarily prorate or apportion) and shall receive all income therefrom
accruing through the Cut-Off Time and Purchaser shall bear all such expenses and
receive all income accruing thereafter. Any revenues and/or expenses affecting
the Property that are not otherwise specifically addressed in Section 8.4(b)
shall be apportioned consistently with the foregoing provisions. Purchaser and
Seller further acknowledge and agree that the apportionments as to the
Hotel-Related Units in this Section 8.4(b) shall be prepared, to the extent
applicable, in accordance with the current edition of the Uniform System of
Accounts for Hotels of the Hotel Association of New York City, Inc., as adopted
by the American Hotel Association of the United States and Canada.

8.5 Guest Ledger Receivables. Seller shall receive a credit for fifty percent
(50%) of all guest ledger receivables for guest room rates and applicable taxes
from transient guests then in occupancy for their then period of occupancy, as
of 11:59 p.m. on the day preceding the Closing (the “Cut-Off Time”) and the
other fifty percent (50%) of such guest room rates and applicable taxes shall
belong to Purchaser. Other guest ledger receivables before the Cut-Off Time
shall belong one hundred percent (100%) to Seller. All guest ledger receivables
after the Cut-Off Time shall belong one hundred percent (100%) to Purchaser.
Seller shall also receive such income and shall be charged the expenses
attributable to any other revenue sources at the Hotel-Related Units, including,
without limitation, telephone, parking, restaurant and bar revenue, until the
Cut-Off Time, and Purchaser shall receive a credit for the income and expenses
attributable to such other revenue sources which remain open after the Cut-Off
Time.

 

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8.6 Other Receivables. All Miscellaneous Accounts Receivable of Seller shall
remain Seller’s property. Purchaser shall cooperate, at Seller’s expense, with
Seller’s efforts (using Purchaser’s commercially reasonable efforts, but
provided that Purchaser shall not be required to institute any litigation or to
spend any money or incur any expense in order to do so) to collect Seller’s
Miscellaneous Accounts Receivable after Closing, and Purchaser shall deliver any
amounts due to Seller with respect to any such accounts receivable in accordance
with the provisions hereof less Purchaser’s reasonable third party collection
costs, if any. Any collections shall be applied first to the newest outstanding
invoice, unless (a) such invoice is in dispute, in which case, subject to clause
(b) below, the collection shall be applied to the next newest invoice not in
dispute, or (b) the payor has designated the invoice against which the
collection should be applied, in which case, such collection shall be applied to
the invoice so designated. For a period of one (1) year after Closing, Seller
shall be entitled to reasonable access, on the basis of not more than once per
calendar quarter, to Purchaser’s management employees and accountants, as well
as all relevant records and working papers prepared by or for Purchaser, to aid
in Seller’s collection of its Miscellaneous Accounts Receivable and Seller shall
have the right to audit Purchaser’s books and records with respect thereto. If,
at the conclusion of any such audit, Seller’s audit reveals that Purchaser
collected and retained the benefit of any of Seller’s accounts receivable,
Purchaser shall remit such amount to Seller upon demand. Should Purchaser
disagree with the results of Seller’s audit, Seller and Purchaser shall refer
the matter to a mutually acceptable independent certified public accountant, who
shall work in good faith with Seller and Purchaser to resolve the dispute. The
fees and costs of such independent accountant to which such dispute is referred
shall be borne by the unsuccessful party and shall be shared pro rata to the
extent each party is unsuccessful as determined by such independent certified
public account, whose decision shall be final and binding. For the purpose of
this Agreement, “Miscellaneous Accounts Receivable” shall mean all accounts
receivable other than the guest ledger receivables, rentals and charges
described in Sections 8.4 and 8.5. All account receivable amounts payable to
Seller under this Agreement shall be paid by Purchaser within thirty (30) days
of Purchaser’s receipt thereof. In addition, the parties shall cooperate with
each other and conduct a true-up accounting on or about the one hundred
eightieth (180th) day and again on or about the three hundred sixtieth
(360th) day after the Closing Date in order to true-up any amounts owed.

8.7 Insurance Premiums. Subject to Section 5.1, the Insurance Policies shall not
be assigned to Purchaser, and there shall be no apportionment with respect to
any insurance premiums due thereunder.

8.8 Unredeemed Gift Items.

(a) From and after the Closing Date, Purchaser shall honor all Gift Cards and
Certificates that have not been redeemed as of the Closing Date at their full
value. At Closing, Purchaser shall be credited for seventy percent (70%) of the
first $25,000 of the Gift Cards and Certificates that have not been redeemed as
of the Closing Date and one hundred percent (100%) of any additional Gift Cards
and Certificates that have not been redeemed as of the Closing Date.

(b) From and after the Closing Date, Purchaser shall honor all Comp Letters that
have not expired or been redeemed as of the Closing Date. At Closing, Purchaser
shall be credited for seventy percent (70%) of the Comp Letters that have not
expired or been redeemed as of the Closing Date which credit shall be equal to
seventy percent (70%) of the value of the Comp Letters as set forth on Exhibit
6.1(aa).

8.9 Records. For a period of three (3) years following the Closing Date,
Purchaser shall retain, and allow Seller and its representatives reasonable
access once per quarter to review, all documents relating to the Property for
the period of Seller’s ownership or operation thereof reasonably requested by
Seller and which Seller was not able to copy prior to the Closing, provided,
that any such review shall take place at the Property or such other site in New
York City as designated by Purchaser and in the presence of a representative of
Purchaser. The provisions of this Section 8.9 shall survive the Closing and
shall not be deemed merged into any instrument of conveyance delivered at the
Closing.

8.10 Notice to Tenants under the Leases. Seller covenants and agrees to execute,
at the Closing, a written notice of the acquisition of the Property by Purchaser
for transmittal to each Tenant under a Lease and properly addressed to such
Tenant. Such notice shall be prepared by Seller in the form attached hereto as
Exhibit 8.8 or as otherwise required pursuant to the terms of the applicable
Lease, shall notify such Tenant of the

 

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sale and transfer and shall contain appropriate instructions relating to the
payment of future rentals, the giving of future notices, and other matters
reasonably required by Purchaser or required by law. Unless a different
procedure is required by applicable law, in which event such laws shall be
controlling, Purchaser agrees to transmit or otherwise deliver such letter to
such Tenant, with a copy thereof to Seller, promptly after such Closing.

8.11 Branded Inventory, Supplies and Materials. From the Closing until the
sixtieth (60th) day following the Closing Date, Purchaser shall be permitted to
use any Jumeirah branded inventory, supplies and materials transferred to
Purchaser pursuant to this Agreement; provided, however, such inventory,
supplies and materials shall be used solely in connection with the operation of
the Hotel-Related Units and shall not be used or discarded in a manner that is
disparaging to the Jumeirah brand or brings about liabilities to Hotel Manager
or its Affiliates.

8.12 Liquor Inventory. Seller shall receive a credit at Closing for Seller’s
unopened inventory of liquor on the Closing Date. Such credit shall be
calculated at fifty percent (50%) of the unit cost of each unopened bottle of
liquor.

9. Real Estate Commissions. If and when, but only if and when, the Closing is
completed and the Purchase Price is paid in full, Seller shall be obligated to
pay a real estate commission and/or brokerage fee to Broker pursuant to a
separate agreement between Seller and Broker. Such commissions shall be paid in
full at the Closing. Purchaser shall have no obligation whatsoever to make any
payment to Broker in connection with the purchase and sale of the Property.
Seller and Purchaser represent and warrant to each other that no other brokerage
fee or real estate commission is or shall be due or owing to any party other
than Broker in connection with this transaction based on any action or contact
by such party, and Seller and Purchaser hereby agree to indemnify, defend and
hold harmless the other from any and all loss, liability, claim, cause of
action, damage, cost or other expense of any nature whatsoever, including,
without limitation, attorneys’ fees and expenses (but only to the extent
reasonable), resulting from a breach of such representation and warranty. The
provisions of this Section 9 shall survive (i) the Closing and shall not be
deemed merged into any instrument of conveyance delivered at the Closing or
(ii) earlier termination of this Agreement.

10. Termination And Default.

10.1 Termination by Purchaser. If this Agreement is terminated by Purchaser
pursuant to its rights to terminate as expressly provided elsewhere in this
Agreement or if a condition to Purchaser’s obligation to close in accordance
with the terms of this Agreement is not satisfied or waived, then the Deposit
shall, in accordance with the procedures set forth in Section 13, promptly be
returned to Purchaser by Escrow Agent and, except as provided for in
Section 10.3 or elsewhere in this Agreement, Purchaser and Seller shall have no
further obligations or liabilities hereunder.

10.2 PURCHASER’S DEFAULT; LIQUIDATED DAMAGES – DEPOSIT. NOTWITHSTANDING ANYTHING
TO THE CONTRARY CONTAINED IN THIS AGREEMENT, IF THE CLOSING AND THE TRANSACTION
CONTEMPLATED HEREBY ARE NOT CONSUMMATED AS RESULT OF PURCHASER’S DEFAULT
HEREUNDER, WHICH DEFAULT IS NOT CURED WITHIN TEN (10) BUSINESS DAYS AFTER NOTICE
FROM SELLER IN THE CASE OF A MONETARY DEFAULT (PROVIDED THE FOREGOING NOTICE AND
CURE PERIOD SHALL NOT APPLY TO PURCHASER’S FAILURE TO MAKE THE DEPOSIT AS AND
WHEN REQUIRED PURSUANT TO SECTION 2(a)(i)) OR PRIOR TO CLOSING IN THE CASE OF
ANY NON-MONETARY DEFAULT (PROVIDED THAT IN NO EVENT SHALL THE FOREGOING OF THIS
SECTION 10.2 BE DEEMED TO OPERATE AS AN EXTENSION OF THE CLOSING DATE AND ANY
CURE PERIOD GRANTED TO PURCHASER HEREUNDER FOR A MONETARY DEFAULT OR A
NON-MONETARY DEFAULT (WHETHER OR NOT NOTICE OF SAME IS GIVEN TO PURCHASER) THAT
WOULD EXTEND PAST THE CLOSING DATE SHALL BE AUTOMATICALLY SHORTENED TO EXPIRE AS
OF THE TIME AND DATE SET FOR CLOSING IN ACCORDANCE WITH SECTION 8.1(a)), AND
PROVIDED THAT ALL CONDITIONS TO PURCHASER’S OBLIGATIONS TO CONSUMMATE THE
TRANSACTIONS HEREIN CONTEMPLATED EITHER HAVE BEEN SATISFIED OR SELLER
DEMONSTRATES THAT THE SAME WOULD HAVE BEEN SATISFIED BUT FOR PURCHASER’S
DEFAULT, SELLER SHALL BE ENTITLED TO RETAIN THE DEPOSIT AS SELLER’S LIQUIDATED
DAMAGES AND SUCH AMOUNT SHALL, SUBJECT TO THE

 

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PROCEDURES SET FORTH IN SECTION 13, PROMPTLY BE PAID TO SELLER BY ESCROW AGENT
AND NEITHER PARTY SHALL HAVE ANY FURTHER OBLIGATIONS HEREUNDER TO THE OTHER OR
ANY RIGHT TO ANY OTHER REMEDIES AGAINST THE OTHER. SELLER HEREBY WAIVES ITS
RIGHT TO COLLECT ALL OTHER DAMAGES, RIGHTS AND REMEDIES, AND AGREES THAT THE
FOREGOING SHALL BE SELLER’S SOLE AND EXCLUSIVE REMEDY IN THE EVENT OF ANY
DEFAULT BY PURCHASER HEREUNDER. THE PARTIES AGREE THAT IT WOULD BE EXTREMELY
IMPRACTICABLE AND DIFFICULT TO ASCERTAIN THE ACTUAL DAMAGES SUFFERED BY SELLER
AS A RESULT OF PURCHASER’S DEFAULT HEREUNDER, AND THAT UNDER THE CIRCUMSTANCES
EXISTING AS OF THE EXECUTION DATE, THE LIQUIDATED DAMAGES PROVIDED FOR IN THIS
SECTION REPRESENT A REASONABLE ESTIMATE OF THE DAMAGES WHICH SELLER WILL INCUR
AS A RESULT OF SUCH DEFAULT, PROVIDED, HOWEVER, THAT THIS PROVISION SHALL NOT
WAIVE OR AFFECT SELLER’S RIGHTS AND PURCHASER’S INDEMNITY OBLIGATIONS UNDER
SECTIONs 4.1(a) OR 11.7 OF THIS AGREEMENT.

10.3 Seller’s Default. In the event the Closing and the transaction contemplated
hereby is not consummated as a result of Seller’s default hereunder, Purchaser
may, at its election and as its sole and exclusive remedy at law or in equity,
either (a) terminate this Agreement by giving written notice to Seller, in which
case the Deposit shall, subject to the procedures set forth in Section 13,
promptly be returned to Purchaser by Escrow Agent, and Seller shall pay
Purchaser on demand an amount equal to Purchaser’s out-of-pocket costs and
expenses for Purchaser’s diligence, entering into this Agreement, undertaking
efforts to close and matters relating to all of the foregoing, not to exceed
$300,000 in the aggregate; or (b) sue for specific performance of this Agreement
and file a lis pendens in connection therewith, provided that (i) all conditions
to Seller’s obligation to consummate the transactions herein contemplated shall
have been satisfied or Purchaser demonstrates that the same would have been
satisfied but for Seller’s default and (ii) Purchaser shall have commenced such
suit within sixty (60) days following the later of the Closing Date and the date
on which the period for Seller’s cure has lapsed in accordance with clause
(x) of this Section 10.3. Purchaser hereby waives its right to collect all other
damages, rights and remedies, and agrees that the foregoing shall be Purchaser’s
sole and exclusive remedy in the event of any default by Seller hereunder,
provided, however, the foregoing waiver in this sentence shall not apply in the
event Seller has defaulted in its obligation to transfer the Real Property to
Purchaser and Purchaser is unable to obtain specific performance because Seller
has transferred the Real Property to a third party that is not an Affiliate of
Purchaser. Seller shall not be considered to be in default for purposes of this
Section 10.3 (x) unless Seller has failed to cure such default for a period of
thirty (30) days after written notice thereof from Purchaser; provided that if
such failure cannot be cured with reasonable diligence within such thirty
(30) day period, then such thirty (30) day period shall be extended for an
additional sixty (60) days and (y) by reason of Seller’s failure to comply with
any deliveries or conditions to Closing where such deliveries or conditions
require the performance by third parties. The terms and provisions of this
Section 10.3 shall not waive or affect Purchaser’s rights and Seller’s indemnity
obligations under other sections of this Agreement.

10.4 Break Up Fee. Notwithstanding anything to the contrary in this Agreement,
if: (a) prior to Closing, or prior to or during the exercise of any remedy
afforded to Purchaser hereunder Seller files a voluntary petition or has a
petition filed against it under Chapter 7 or Chapter 11 of Title 11 of the
United States Code, and (b) Purchaser is prevented by the Bankruptcy Court
overseeing the estate from consummating the purchase of the Property for the
Purchase Price contemplated in Section 2 of this Agreement prior to the date
that is one hundred twenty (120) days following the scheduled Closing Date, then
Seller shall pay to Purchaser a fee (the “Break Up Fee”) on demand in the amount
of Twenty Million and No/100 Dollars ($20,000,000).

10.5 Survival. The provisions of this Section 10 shall survive (i) the Closing
and shall not be deemed merged into any instrument of conveyance delivered at
the Closing or (ii) earlier termination of this Agreement.

11. Employment and Employee Benefit Matters.

11.1 Bargaining Unit Employees. Seller shall assign and Purchaser shall assume,
and cause its hotel manager, if any, to assume, the Union Contract in accordance
with its terms. Seller shall deliver, as and when required under the Union
Contract, any notices required thereunder in connection with the transactions
contemplated hereby (and shall concurrently provide a copy of such notices to
Purchaser). Seller shall retain all liabilities and

 

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obligations (a) related to any Bargaining Unit Employees incurred in connection
with their employment with Seller or with any management company retained to
provide services at the Property, including, but not limited to, all severance
and related costs incurred in connection with the termination of a Bargaining
Unit Employee’s employment with the Seller or with any management company
retained to provide services at the Property, and (b) arising or accruing under
the Union Contract and the Union Benefit Plans or any other agreement or
predecessor agreement or plan with any labor union or labor organization arising
on or prior to the Closing Date. Seller shall make available to Purchaser, for
interview by Purchaser, all Bargaining Unit Employees (to the extent permitted
under the Union Contract) and Non-Bargaining Unit Employees at the Property. In
accordance with Article 59 of the Union Contract, Purchaser agrees to retain all
current bargaining unit employees subject to the terms of the Union Contract and
applicable law. Seller shall be responsible for amounts and benefits payable or
accrued under the Union Contract as of the Closing Date, including, but not
limited to, any accrued but unpaid wages, vacation or other accrued
compensation, benefits or contributions (such liability to survive the Closing);
provided, however, that Seller receives an invoice for such amounts no later
than six (6) months after the Closing, or in the case of amounts unknown as of
that time, as soon thereafter as reasonably practicable under the applicable
circumstances. For purposes of this Agreement, the “Union Contract” shall mean
the collective bargaining agreement with respect to the Hotel-Related Units, as
more particularly described in the Inspection Agreement. “Bargaining Unit
Employees” shall mean all employees of Seller, or any management company
retained to provide services at the Property, who work at the Hotel-Related
Units and are covered by the Union Contract. “Union Benefit Plans” shall mean
all Employee Benefit Plans required to be contributed to as set forth in the
Union Contract, except for any 401(k) plan, and, including, without limitation,
all Multiemployer Plans. Seller also agrees to comply with its obligations under
any collective bargaining agreement or applicable labor law with respect to the
transaction contemplated by this Agreement, including, but not limited to, any
applicable duty to bargain with or requirement of notification to any union
regarding this sale.

11.2 Non-Bargaining Unit Employees.

(a) At least ten (10) days prior to the Closing, Purchaser or a designee of
Purchaser shall make a written offer of employment to such number of
Non-Bargaining Unit Employees as will avoid triggering liability under the
Worker Adjustment and Retraining Notification Act, or any similar state or local
law (the “WARN Act”) (on such terms as Purchaser determines in its sole and
absolute discretion, provided that such offers do not trigger liability under
the WARN Act), all such offers to be effective upon Closing; provided, however,
that all Non-Bargaining Unit Employees who, prior to Closing, accept Purchaser’s
or its designee’s offer of employment (“Transferred Employees”) will be at-will
unless otherwise specified in a written agreement signed by Purchaser or such
designee in its sole and absolute discretion. For purposes of this Agreement,
“Non-Bargaining Unit Employees” shall mean all employees of Seller or Seller’s
Affiliates or any management company retained to provide services at the
Property who work at the Hotel Unit and are not covered by the Union Contract.
Except as hereinafter provided in this Section 11.2, Seller shall be solely
responsible for all liabilities related to any Non-Bargaining Unit Employees,
who are not Transferred Employees, incurred on or prior to the Closing in
connection with their employment at the Property, including, but not limited to,
all severance and related costs and all amounts and benefits accrued with
respect to the Transferred Employees as of the Closing Date, including, but not
limited to, any accrued but unpaid wages, vacation, sick days, personal time off
or other accrued compensation or benefits (such liability to survive the
Closing). As of the Closing, and to the extent Purchaser receives a credit
therefor, Purchaser will assume and discharge any obligation with respect to the
accrued but unused vacation of Transferred Employees. Purchaser shall be solely
responsible for any and all obligations incurred with respect to Transferred
Employees after the Closing.

(b) Seller shall be responsible for perpetuating the group health plan
continuation coverage pursuant to Code section 4980B and ERISA sections 601
through 609 for all employees of Seller or Seller’s Affiliates, or any
management company retained to provide services at the Property who work at the
Hotel Unit, and their eligible spouses and dependents, including providing all
required notices with respect to any “qualifying event” (within the meaning of
Code section 4980B) occurring in connection with this transaction or on or
before the Closing Date. Seller shall indemnify and hold Purchaser, its
designee, Purchaser’s Affiliates, the Purchaser Parties and any ERISA Affiliate
of Purchaser or its designee harmless for any liability Purchaser, its designee,
Purchaser’s Affiliates, the Purchaser Parties or any ERISA Affiliate of
Purchaser or its designee incurs at any time on or after the Closing Date under
the provisions of

 

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Code section 4980B or ERISA sections 601 through 609 with respect to providing
COBRA notices or group health plan coverage to any such employees, or a
dependent or spouse of any such employee, who had or has a “qualifying event”
(within the meaning of Code section 4980B) in connection with this transaction
or on or before the Closing Date.

11.3 WARN Act. Prior to the Closing Date, Seller and its Affiliates shall
refrain from engaging in any “mass layoff” or “plant closing,” as defined in the
WARN Act, of employees working at the Hotel Unit. Purchaser agrees that
Purchaser shall be solely liable and responsible for any and all damages which
may be claimed or be payable by reason of, or arising out of, or resulting from
the application of the WARN Act in connection with the termination of any
employees after the Closing or the termination of any employees by Seller
pursuant to Purchaser’s request.

11.4 Indemnification.

(a) Purchaser agrees to indemnify, defend and hold Seller, Seller’s Affiliates,
and the Seller Parties and any Person that, together with such party, would be
treated as a single employer under Section 414 of the Code or Section 4001 of
ERISA and the regulations thereunder (“ERISA Affiliate”) harmless from and
against any and all damages which any of them may sustain by reason of, or
arising out of, or resulting from Purchaser’s failure to discharge any of the
obligations and liabilities of Purchaser under Sections 11.1, 11.2, 11.3, 11.4,
11.5, 11.6 and 11.7 of this Agreement.

(b) Seller agrees to indemnify, defend and hold Purchaser, Purchaser’s
Affiliates, the Purchaser Parties and any ERISA Affiliate harmless from and
against any and all damages which any of them may sustain by reason of, or
arising out of, or resulting from Seller’s failure to discharge any of the
obligations and liabilities of Seller under Sections 11.1, 11.2, 11.3, 11.4,
11.5, 11.6 and 11.7 of this Agreement.

11.5 Sale of Assets – ERISA.

(a) Upon the Closing, Purchaser, an Affiliate of Purchaser, Purchaser’s
designated management company or other designee shall during the Surety Period
(defined below) make contributions to each and every Union Benefit Plan that is
a pension plan (“Union Pension Plan”) with respect to the operations of the
Hotel-Related Units for substantially the same number of contribution base units
for which Seller has an obligation to contribute with respect to each such Union
Pension Plan immediately prior to the Closing; provided, however, such
undertaking shall not render Purchaser liable for any contributions to any Union
Benefit Plan or Union Pension Plan arising or relating to the period of time
prior to Closing. Purchaser agrees to cooperate with Seller to comply with
Section 4204 of ERISA, including, without limitation, to either (i) provide to
the Union Pension Plan, for a period (the “Surety Period”) of five consecutive
plan years commencing with the first plan year beginning after the Closing Date,
either a bond issued by a surety company that is an acceptable surety for
purposes of Section 412 of ERISA (with Purchaser to be the sole obligor
thereunder) or an amount held in escrow (such bond or escrow, a “Surety
Instrument”) by a bank or similar financial institution satisfactory to each
Union Pension Plan in an amount equal to the greater of (A) the average annual
contribution that Seller was required to make under the Multiemployer Plan with
respect to the operations of the Hotel-Related Units for the three plan years
immediately preceding the plan year in which the Closing Date occurs, or (B) the
annual contribution that Seller was required to make under the Union Pension
Plan with respect to the operations of the Hotel-Related Units for the last plan
year immediately preceding the plan year in which the Closing Date occurs; or
(ii) timely make a sufficient request for a variance from the bond or escrow
requirement of ERISA Section 4204(a)(I)(B) in accordance with the regulations
under ERISA. If Purchaser requests a variance in accordance with this Section
and the request is denied, Purchaser shall provide the bond or amount in escrow
in accordance with Section 11.5(a)(i) within the time limit necessary to satisfy
Section 4204 of ERISA. The full cost of such Surety Instrument shall be borne by
Purchaser and shall be in addition to all amounts due Seller under this
Agreement. Unless waived by the Union Pension Plan sponsor, Seller recognizes
its secondary liability to the Union Benefit Plan for withdrawal liability it
might have incurred but for application of this Agreement and Section 4204 of
ERISA in the event Purchaser should withdraw from the Union Benefit Plan or
fails to make any contribution when due to the Union

 

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Benefit Plan. Purchaser and Seller shall cooperate in taking such steps and
executing such documents as are necessary to carry out the provisions of this
Section 11.5 , or to otherwise qualify the instant sale under the provisions of
Section 4204 of ERISA so that a complete or partial withdrawal within the
meaning of Section 4201 of ERISA shall not thereby occur. Purchaser shall notify
Seller of any event which might cause Seller to have any obligation to the Union
Benefit Plan or Purchaser described in this Section 11.5 and, in addition,
Purchaser shall timely notify and deliver to Seller all documentation relating
to any claim of withdrawal liability (but in no event shall Purchaser deliver to
Seller any Notice and Demand for Payment described in Section 4219 of ERISA
later than thirty (30) days after its receipt by Purchaser) and Purchaser shall
consult with Seller and afford Seller an opportunity to assert defenses to any
such claims for withdrawal liabilities. Seller reserves the right to pay any
claim for withdrawal liability in full and to collect thereafter from Purchaser
any of the withdrawal liability that is attributable to Purchaser on account of
Purchaser’s participation in the Union Benefit Plan after the Closing Date. If,
at any time a bond is required for any of the Union Pension Plans pursuant to
Section 4204(a)(3) of ERISA, Seller at Seller’s sole cost and expense shall post
such bond in an amount and in a form which complies with Section 4204(a)(3) or
obtain a variance from such bonding requirement from the applicable Union
Pension Plan or the Pension Benefit Guaranty Corporation.

(b) Upon the Closing, Purchaser shall adopt and assume all of Seller’s
obligations under (including, without limitation, the obligation to make
contributions to) each and every Union Benefit Plan that is a health or welfare
plan (“Union Health Plan”). Purchaser agrees to make contributions to each Union
Health Plan with respect to the operations of the Real Property for the amounts
set forth in the Union Contract.

(c) This Section 11.5 shall be rendered null and void and of no further force
and effect whatsoever if the transaction contemplated by this Agreement the sale
of the Property would not constitute a withdrawal under the 1980 Multiemployer
Pension Benefit Act Amendments of ERISA regardless of the above provisions which
reference, and are intended to comply with, Section 4204 of ERISA, or
Section 4204 of ERISA is otherwise inapplicable to the transactions contemplated
by this Agreement.

11.6 Cooperation. Purchaser and Seller agree to cooperate reasonably with each
other to the extent legally permissible in the defense of any claims brought by
or on behalf of employees or former employees against Seller or Purchaser. Such
cooperation shall include but not be limited to, providing: (i) workers
compensation claims processing; (ii) access to and copying of personnel and I-9
records to the extent legally permissible; and (iii) for the availability of
employees for such matters as interviews and depositions.

11.7 Release of Employee Personnel Records. No later than fifteen (15) days
prior to Closing, Purchaser or an Affiliate of Purchaser shall identify to
Seller, in writing, the employee personnel records that Purchaser or its
Affiliate intends to access, copy, or obtain from Seller. Subject to applicable
law, Seller shall permit Purchaser or its Affiliate to access or copy, or shall
transfer to Purchaser or its Affiliate, as applicable, the employee personnel
records so identified by Purchaser, or its Affiliate in a manner so as to
preserve the confidentiality of such records. Purchaser and its Affiliates shall
maintain the privacy of such records in accordance with applicable laws.
Notwithstanding anything to the contrary contained in this Agreement, Purchaser
agrees to indemnify, defend and hold Seller, Seller’s Affiliates and the Seller
Parties harmless from and against any and all damages, which Seller may sustain
at any time relating to Purchaser’s use of such records in violation of
applicable law, other than Seller’s permitting access to or copying of any such
employee personnel record by Purchaser. The provisions of this Section 11.6
shall survive (i) the Closing and shall not be deemed merged into any instrument
of conveyance delivered at the Closing or (ii) the termination of this
Agreement.

11.8 Third Party Rights. Nothing in this Article XI shall create any third-party
beneficiary rights for the benefit of any Bargaining Unit Employees or
Non-Bargaining Unit Employees.

11.9 Survival. This Article XI shall survive the Closing and shall not be deemed
merged into any instrument of conveyance delivered at the Closing.

 

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12. Miscellaneous.

12.1 Entire Agreement. This Agreement and the Inspection Agreement constitute
the entire agreement between the parties hereto with respect to the transactions
contemplated herein, and this Agreement and the Inspection Agreement supersede
all prior discussions, understandings or agreements between the parties or their
respective Affiliates, each of which remains in full force and effect, shall
survive the Closing Date and shall not be deemed merged into any instrument of
conveyance delivered at the Closing. All Exhibits and Schedules attached hereto
are a part of this Agreement and are incorporated herein by reference.

12.2 Binding On Successors and Assigns. Subject to Section 12.3, this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns and designees.

12.3 Assignment by Purchaser. Upon notice to Seller at least three (3) Business
Days prior to the Closing Date, Purchaser may assign its rights under this
Agreement without Seller’s consent to any Affiliate of Purchaser, but such
Affiliate shall make no further assignment of this Agreement without Seller’s
prior written consent, and such Affiliate shall expressly assume all obligations
of Purchaser under this Agreement. Purchaser shall provide a copy of the
instrument effecting such assignment to Seller. Notwithstanding any such
assignment of this Agreement by Purchaser, Purchaser shall remain jointly and
severally liable under the terms of this Agreement. As used in this Agreement,
(i) “Affiliate” means, with respect to a Person, any entity controlled by,
controlling, or under common control with such Person, and the various uses of
the word “control” mean the ability to direct the decisions or actions of the
entity in question and (ii) “Person” means an individual, partnership,
corporation, limited liability company, business trust, joint stock company,
trust, unincorporated association, joint venture or other entity of whatever
nature.

12.4 Waiver. The excuse or waiver of the performance by a party of any
obligation of the other party under this Agreement shall only be effective if
evidenced by a written statement signed by the party so excusing or waiving. No
delay in exercising any right or remedy shall constitute a waiver thereof, and
no waiver by Seller or Purchaser of the breach of any covenant of this Agreement
shall be construed as a waiver of any preceding or succeeding breach of the same
or any other covenant or condition of this Agreement.

12.5 Governing Law; Submission to Jurisdiction.

(a) This Agreement shall be governed by and construed under the internal laws of
the State of New York, without regard to the principles of conflicts of law.

(b) The parties hereto acknowledge and agree that all disputes arising, directly
or indirectly, out of or relating to this Agreement, and all actions to enforce
this Agreement, shall be dealt with and adjudicated only in the state courts of
the State of New York sitting in the County of New York or the Federal courts
sitting in the County of New York, State of New York. The parties hereto hereby
expressly and irrevocably submit to the jurisdiction of such courts in any suit,
action or proceeding arising, directly or indirectly, out of or relating to this
Agreement. To the extent permitted under the applicable law, this consent to
personal jurisdiction shall be self-operative and no further instrument or
action, other than service of process in one of the manners specified in this
Agreement, or as otherwise permitted by law, shall be necessary in order to
confer jurisdiction upon the parties hereto in any such court.

(c) Provided that service of process is effected upon a party in one of the
manners hereafter specified in this Agreement or as otherwise permitted by law,
that party irrevocably waives, to the fullest extent permitted by law, and
agrees not to assert, by way of motion, as a defense or otherwise, (i) any
objection which it may have or may hereafter have to the laying of the venue of
any such suit, action or proceeding brought in such a court as is mentioned in
Section 12.5(b), (ii) any claim that any such suit, action or proceeding brought
in such a court has been brought in an inconvenient forum, or (iii) any claim
that it is not personally subject to the jurisdiction of the above-named courts.
Provided that service of process is effected upon a party in one of the manners
specified in this Agreement or as otherwise permitted by law, that party agrees
that a final non-appealable judgment of any such court of competent jurisdiction
shall be conclusive and binding upon that party and may, so far as it permitted
under the applicable law, be enforced in the courts of any state or any Federal
court and in any other courts to the

 

 

 

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jurisdiction of which that party is subject, including, without intending any
limitation as to that party, the courts of the State of New York by a suit upon
such judgment and that party will not assert any defense, counterclaim, or set
off in any such suit upon such judgment.

(d) The provisions of Sections 5-1401 and 5-1402 of the New York General
Obligations Law are deemed incorporated into this Agreement.

(e) The parties hereto agree to execute, deliver and file all such further
instruments as may be necessary under the laws of the State of New York, in
order to make effective the consent of the parties hereto to jurisdiction of the
courts of the State of New York sitting in the County of New York or the Federal
courts sitting in the County of New York, State of New York.

(f) Provided that service is made in accordance with this Section or otherwise
as permitted by law, each of Purchaser and Seller irrevocably waives, to the
fullest extent permitted by law, all claim of error by reason of any such
service and agrees that such service (a) shall be deemed in every respect
effective service of process upon Purchaser and Seller in any such suit, action
or proceeding and (b) shall, to the fullest extent permitted by law, be taken
and held to be valid personal service upon and personal delivery to Purchaser
and Seller.

(g) Nothing in this Agreement shall affect the right of the parties hereto to
serve process in any manner permitted by law.

12.6 Counterparts. This Agreement may be executed in any number of counterparts,
all of which taken together shall constitute one and the same instrument and any
of the parties hereto may execute this Amendment by signing any such
counterpart. Delivery of an executed signature page of this Agreement by
facsimile or email transmission shall be effective as manual delivery of an
executed counterpart hereof.

12.7 Notices. All notices, demands and other communications required or
permitted hereunder shall be in writing, personally delivered or delivered by
Federal Express or another nationally recognized overnight commercial courier
against receipt, or sent by facsimile providing that a confirming copy is
simultaneously sent by Federal Express or other nationally recognized overnight
commercial courier:

if to Seller at:

DIG EH Hotel LLC

c/o Silverpeak Real Estate Partners

1330 Avenue of the Americas

Suite 1200

New York, New York 10019

Attention: Anthony Juliano

Facsimile: (212) 716-2065

with a copy to:

Morrison & Foerster LLP

1290 Avenue of the Americas

New York, New York 10104

Attention: Jeffrey J. Temple, Esq.

Facsimile: (212) 468-7900

if to Purchaser at:

c/o Strategic Hotels & Resorts, Inc.

200 West Madison Street

Suite 1700

Chicago, Illinois 60606

 

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Attention: General Counsel

Facsimile: (312) 658-5794

and to:

Perkins Coie LLP

131 S. Dearborn Street

Suite 1700

Chicago, Illinois 60603-5559

Attention: Phillip Gordon

Facsimile: (312) 324-9600

if to Escrow Agent at:

First American Title Insurance Company

30 North LaSalle Street

Suite 2700

Chicago, Illinois 60602

Attention: James W. McIntosh

Facsimile: (312) 553-0480

Such notice shall be deemed given on the date of receipt by the addressee or the
date receipt would have been effectuated if delivery were not refused. Each
party may designate a new or additional address by written notice to the other
in accordance with this Section 12.7. The inability to deliver a notice because
of a changed address of which proper notice was not given shall be deemed a
refusal of such notice.

12.8 Attorneys’ Fees. In the event of a judicial or administrative proceeding or
action by Seller against Purchaser or Purchaser against Seller with respect to
the interpretation or enforcement of this Agreement, the prevailing party shall
be entitled to recover reasonable costs and expenses including, without
limitation, attorneys’ fees and expenses (but only to the extent reasonable),
whether at the investigative, pretrial, trial or appellate level. The prevailing
party shall be determined by the court based upon an assessment of which party’s
major arguments or position prevailed. The provisions of this Section 12.8 shall
survive (i) the Closing, and shall not be deemed merged into any instrument of
conveyance delivered at the Closing or (ii) earlier termination of this
Agreement.

12.9 IRS Real Estate Sales Reporting. Purchaser, Seller and Escrow Agent hereby
agree and acknowledge that Escrow Agent shall act as “the real estate reporting
person” with respect to the transaction which is the subject of this Agreement
pursuant to the Code Section 6045(e) and shall prepare, if not prepared by
Seller or Purchaser, and file all informational returns, including without
limitation, IRS Form 1099-S, and shall otherwise comply with the provisions of
the Code Section 6045(e). The Escrow Agent shall also remit to the proper
authority all state and local transfer taxes required in connection with the
transaction which is the subject of this Agreement. Purchaser and Seller shall
reasonably cooperate in connection with such filings.

12.10 Time Periods. In the event the time for performance of any obligation
hereunder expires on a day that is not a Business Day, the time for performance
shall be extended to the next Business Day.

12.11 Modification of Agreement. No modification of this Agreement shall be
deemed effective unless in writing and signed by the party to be charged.
Without limiting the foregoing, the written consent of Escrow Agent shall not be
necessary to change any provision of this Agreement that does not affect the
responsibilities of Escrow Agent.

12.12 Further Instruments. Each party, promptly upon the request of the other,
shall execute and have acknowledged and delivered to the other or to Escrow
Agent, as may be appropriate, any and all further instruments reasonably
requested or appropriate to evidence or give effect to the provisions of, and
the transactions described in, this Agreement and which are consistent with the
provisions of this Agreement, and shall otherwise cooperate with the other to
more fully assure to the other the performances contemplated by this Agreement.
This Section 12.12 shall survive closing.

 

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12.13 Descriptive Headings. The descriptive headings of the paragraphs of this
Agreement are inserted for convenience only and shall not control or affect the
meaning or construction of any provisions of this Agreement.

12.14 Time of the Essence. Time is of the essence with respect to each of the
provisions of this Agreement.

12.15 Business Day. As used herein, the term “Business Day” means any day other
than Saturday, Sunday and any day which is a legal holiday in the State of New
York.

12.16 Construction of Agreement. This Agreement shall not be construed more
strictly against one party than against the other merely by virtue of the fact
that it may have been prepared primarily by counsel for one of the parties, it
being recognized that both Purchaser, on the one hand, and Seller, on the other
hand, have contributed substantially and materially to the preparation of this
Agreement.

12.17 JURY TRIAL WAIVER. THE PARTIES HERETO HEREBY WAIVE TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER IN CONTRACT OR TORT) BROUGHT BY
EITHER PURCHASER, ON THE ONE HAND, OR SELLER, ON THE OTHER HAND, AGAINST THE
OTHER IN RESPECT OF ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT.

12.18 Survival.

(a) The terms and conditions of this Article 12 shall survive the Closing Date
or termination of this Agreement. Any other obligations or liabilities of Seller
or Purchaser hereunder shall survive the Closing Date or termination of this
Agreement only to the extent expressly provided herein.

(b) Unless expressly stated otherwise, all terms and provisions contained herein
shall not survive Closing and instead shall be deemed merged into the deed
delivered at Closing.

12.19 Submission not an Offer or Option. The submission of this Agreement or a
summary of some or all of its provisions for examination or negotiation by
Purchaser or Seller does not constitute an offer by Seller or Purchaser to enter
into an agreement to sell or purchase any Property, and neither party shall be
bound to the other with respect to any such purchase and sale until a definitive
agreement satisfactory to Purchaser and Seller in their sole discretion is
executed and delivered by each of Seller and Purchaser.

12.20 Disclosure. Each of Seller and Purchaser hereby covenants for itself and
its Affiliates that prior to the Closing it shall not issue any press release or
public statement with respect to this Agreement or the transactions contemplated
by this Agreement without the prior consent of Seller and Purchaser (which
consent shall not be unreasonably delayed or withheld); provided, however, that
except as otherwise provided below no such announcement shall (i) be made unless
the Closing has occurred or (ii) make any reference to the Purchase Price or
other material terms of this Agreement except to the extent that the same are a
matter of public record or available to the public generally. Notwithstanding
anything to the contrary in the foregoing, Seller acknowledges that Purchaser is
required by the rules and regulations of the Securities and Exchange Commission
and the New York Stock Exchange to disclose the terms of this Agreement and
Seller consents to such disclosure. Otherwise, if Seller or Purchaser is
required by law to issue such a press release or public statement, such party
shall, at least two (2) Business Days prior to the issuance of the same, deliver
a copy of the proposed release or statement to the other party for its review.
The parties shall cooperate in good faith at and after the Closing to issue
coordinated or joint press statements concerning the transaction, but nothing
shall prevent either party from issuing its own press release.

 

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12.21 Guest Baggage and Safe Deposit Boxes.

(a) Property of Guests. All baggage, parcels of property of guests or tenants
being retained by Seller as security for unpaid accounts receivable shall be
removed from the Property prior to the Closing (“Retained Baggage”). All other
baggage, parcels or property checked or left in the care of Seller by current
guests or tenants at Closing, or by those formerly staying at the Property, or
others, shall be sealed and listed in an inventory prepared jointly by
representatives of Seller and Purchaser on the date of the Closing and initialed
and exchanged by such representatives. Possession and control of all such other
baggage, parcels or property listed on such inventory shall be delivered to
Purchaser at Closing and Purchaser shall be responsible from and after the
Closing for the liability of all items listed in such inventory, but only in the
condition actually delivered by Seller. Seller shall remain liable for any acts
or omissions with respect to such baggage which occurred prior to the date of
Closing as well as for claimed omissions from said inventory, and Seller hereby
agrees to indemnify and hold Purchaser harmless from and against any liability
therefor.

(b) Notice to Persons With Safe Deposit Boxes. On the Closing Date, Seller shall
give written notices (“Seller Verification Notices”) to guests, tenants, and
other persons who have safe deposit boxes at the Hotel-Related Units or who have
deposited items in the house safe at the Hotel-Related Units (the “Depositors”),
if any, advising them of the sale of the Property to Purchaser and requesting,
within 48 hours, verification of the contents of in their safe deposit boxes
and/or the house safe and either (i) removal of such contents, or (ii) if such
Depositors desire to have the continued use of the safe deposit boxes and/or the
house safe, the execution of a new agreement with Purchaser for such continued
use. Copies of Seller’s Verification Notices shall be given to Purchaser. During
said 48-hour period, each safe deposit box and/or the house safe shall be opened
and the items therein recorded only in the presence of representatives of both
Seller and Purchaser. If the Depositors desire to continue to use a safe deposit
box and/or the house safe, Purchaser shall make arrangements for such continued
use. The contents of all safe deposit boxes and/or the house safe of Depositors
not responding to Seller’s Verification Notices shall be opened promptly after
the expiration of the 48-hour period, but only in the presence of both Seller
and Purchaser. The contents of all boxes so opened shall be listed in an
inventory at the time such safe deposit boxes or house safe are opened, each
such list shall be signed by the representatives of Seller and Purchaser, the
keys and/or combinations to the boxes shall be delivered to Purchaser, and the
boxes shall then be relocked, sealed and left in the possession of Purchaser.
Seller hereby agrees to indemnify and hold Purchaser harmless from and against
any liability based on damage occurring prior to the date of Closing which is
verified and recorded on the date of Closing.

13. General Escrow Provisions. The obligations and rights of Escrow Agent under
this Agreement shall be subject to the following terms and conditions:

(a) The duties and obligations of Escrow Agent shall be determined solely by the
express provisions of this Agreement and no implied duties or obligations shall
be implied against Escrow Agent. Further, Escrow Agent shall be under no
obligation to refer to any other document between or among Purchaser and Seller
referred to in or related to this Agreement, unless Escrow Agent is provided
with a copy of such document and consents thereto in writing.

(b) Escrow Agent shall not be liable to anyone by reason of any error of
judgment, or for any act done or step taken or omitted by Escrow Agent in good
faith, or for any mistake of fact or law, or for anything which Escrow Agent may
do or refrain from doing in connection herewith, unless caused by or arising out
of Escrow Agent’s actual and intentional misconduct, fraud or gross negligence.

(c) Escrow Agent shall be entitled to rely, and shall be protected in acting in
reliance, upon any writing furnished to Escrow Agent by either Purchaser or
Seller and shall be entitled to treat as genuine, and as the document it
purports to be, any letter, paper or other document furnished to Escrow Agent.
Escrow Agent may rely on any affidavit of either Purchaser or Seller or any
other person as to the existence of any facts stated therein to be known by the
affiant.

 

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(d) If Seller shall become entitled to retain or receive the Deposit or other
amount paid under this Agreement, Escrow Agent shall pay the same to Seller
together with all interest earned thereon and if Purchaser shall become entitled
to a return of the Deposit or other amount paid under this Agreement, Escrow
Agent shall pay the same to Purchaser together with all interest earned thereon;
provided, however, that no disbursement pursuant to this subsection shall be
made by Escrow Agent until the fifth (5th) Business Day following the receipt or
deemed receipt of notice by Seller and Purchaser from Escrow Agent of its
intention to so disburse, and disbursement made by Escrow Agent after the
passage of such five (5) Business Day period shall relieve Escrow Agent from all
liability in connection with such disbursement unless such disbursement is
proscribed by order of a court of competent jurisdiction or objected to in
writing by Seller or Purchaser. If such disbursement is objected to in writing
by Seller or Purchaser within such five (5) Business Day period, then Escrow
Agent shall not make such disbursement until unanimously instructed in writing
by Purchaser and Seller, or is directed to make such disbursement by a court of
competent jurisdiction. Notwithstanding anything to contrary contained herein,
the five (5) Business Day requirement referred to above in this Section 13(d)
shall not apply to a disbursement of the Deposit at Closing.

(e) In the event of any disagreement between Purchaser and Seller resulting in
adverse claims and demands being made in connection with or against the funds
held in escrow, Escrow Agent shall refuse to comply with the claims or demands
of either party until such disagreement is finally resolved (i) by a court of
competent jurisdiction (in proceedings which Escrow Agent or any other party may
initiate, it being understood and agreed by Purchaser and Seller that Escrow
Agent has authority (but not the obligation) to initiate such proceedings)
(ii) by an arbitrator in the event that Purchaser and Seller mutually and
jointly determine to submit the dispute to arbitration pursuant to the rules of
the American Arbitration Association, and in so doing Escrow Agent shall not be
or become liable to a party or (iii) by written settlement between Purchaser and
Seller.

(f) Purchaser and Seller each agree to jointly and severally indemnify and hold
harmless Escrow Agent against any and all losses, liabilities, costs (including
legal fees) and other expenses in any way incurred by Escrow Agent (except to
the extent Escrow Agent willfully disregards any provision of this Agreement to
which it is bound or engages in fraudulent acts) in connection with or as a
result of any disagreement between Purchaser and Seller under this Agreement or
otherwise incurred by Escrow Agent in any way on account of its role as Escrow
Agent, except that neither Purchaser nor Seller shall have any obligation to pay
Escrow Agent any fee for escrow services hereunder.

(g) Escrow Agent in its sole discretion shall have the right to resign as the
Escrow Agent under this Agreement, provided that it shall provide both Purchaser
and Seller with at least thirty (30) days written notice of such resignation
pursuant to the notice provisions of Section 12.7. Upon any such resignation,
Escrow Agent shall transfer the Deposit and any interest earned thereon to a
successor Escrow Agent jointly approved by Purchaser and Seller, whereupon the
original Escrow Agent shall have no further obligation or liability whatsoever
as Escrow Agent under this Agreement.

(h) The Deposit shall be invested in a money market account or federally-insured
savings account selected by Purchaser and reasonably approved by Seller. The
parties hereby acknowledge and agree that Federal Deposit Insurance for the
Deposit, if any, is limited to a cumulative maximum amount of $250,000.00 for
each individual depositor for all of the depositor’s accounts at the same or
related institution. The parties further hereby acknowledge and agree that
certain banking instruments such as, but not limited to, repurchase agreements
and letters of credit, are not covered at all by Federal Deposit Insurance. The
parties acknowledge and agree that Escrow Agent shall have no obligation or
liability with respect to insuring the Deposit or with respect to the solvency
of the depository institution, or otherwise with respect to the appropriateness
of the depository institution for purposes of the Deposit. Further, the parties
understand that Escrow Agent assumes no responsibility for, nor will the parties
hold the same liable for, any loss occurring which arises from the fact that
(x) the amount of the account or accounts contemplated hereby may cause the
aggregate amount of any individual depositor’s account or accounts to exceed
$250,000.00, (y) that this excess amount is not insured by the Federal Deposit
Insurance Corporation or (z) that Federal Deposit Insurance is not available on
certain types of bank instruments.

 

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(i) Escrow Agent may pay the Deposit into a court of competent jurisdiction upon
commencement by Escrow Agent of an interpleader action in such court. The
reasonable out-of-pocket costs and attorneys’ fees of Escrow Agent for such
interpleader action shall be paid by the losing party in such interpleader
action.

(j) The rights and immunities of Escrow Agent hereunder shall apply equally to
its partners, of counsel, associates, employees, Affiliates and agents.

(k) All of Escrow Agent’s obligations under this Agreement other than those in
Section 12.9 shall automatically terminate upon disbursing the Deposit as set
forth above.

[Remainder of page intentionally blank]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.

 

SELLER:

DIG EH HOTEL LLC, a Delaware limited liability company By:  

/s/ Gerard Hobby

  Name: Gerard Hobby   Title: Director

[signatures continue on following pages]

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

PURCHASER:

SHR ESSEX HOUSE LLC, a Delaware limited liability

company

By:  

/s/ Cory P. Warning

  Name: Cory P. Warning   Title: Vice President

[signatures continue on following page]

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

RECEIPT BY ESCROW AGENT

This Agreement, fully executed by Seller and Purchaser, has been received by
Escrow Agent this 13th day of August, 2012 and by its execution hereof, Escrow
Agent hereby covenants and agrees to be bound by the terms of this Agreement
that are applicable to Escrow Agent in its role as escrow agent pursuant to
Articles 2, 10, 12 and 13 of this Agreement.

 

ESCROW AGENT: FIRST AMERICAN TITLE INSURANCE COMPANY By:  

/s/ Deanna Wilkie

 

Name: Deanna Wilkie

Title: Escrow Officer

[end of signatures]

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

JOINDER TO PURCHASE AND SALE AGREEMENT

This Joinder to Purchase and Sale Agreement (this “Joinder”) is executed by the
undersigned as of the 13th day of August, 2012.

WHEREAS, the undersigned is affiliated with Seller and will benefit from Seller
entering into the Purchase and Sale Agreement to which this Joinder is attached
(the “Agreement”);

WHEREAS, Purchaser is not willing to enter into the Agreement with Seller unless
the undersigned executes this Joinder to acknowledge its agreement to be jointly
and severally liable with Seller for certain matters described below; and

WHEREAS, the undersigned desires to induce Purchaser to enter into the Agreement
with Seller.

NOW THEREFORE, in consideration of the above recitals and for other good and
valuable consideration, receipt and sufficient of which are hereby acknowledged,
the undersigned agrees as follows:

The undersigned hereby agrees unconditionally and irrevocably to be held jointly
and severally liable with Seller for Seller’s indemnity obligations as set forth
in Section 6.2 of the Agreement (for the purposes of this Joinder, the
“Obligations”), subject to and in accordance with the terms of Section 6.2 of
the Agreement. The undersigned’s liability (or that of its successor hereunder)
for such obligations and damages shall be coterminous with the liability of
Seller for such matters and shall survive for so long as Seller’s liability
therefor survives, as more particularly set forth in the Agreement.

In connection with this Joinder, the undersigned hereby waives and agrees not to
assert or take advantage of the following defenses:

1. Any defense that may arise by reason of the incapacity, lack of authority,
death or disability of any person or entity, or revocation hereof by any person
or entity, or the failure of Seller to file or enforce a claim against the
estate (either in administration, bankruptcy, or any other proceeding) of any
other person or entity;

2. Diligence, presentment, notice of acceptance, notice of dishonor, notice of
presentment, or demand for payment of or performance of the Obligations and
other suretyship defenses generally;

3. Protest and notice of dishonor or of default to the undersigned or to any
other person or entity with respect to the performance of the Obligations;

4. Any action required by any statute to be taken against Seller;

5. The dissolution or termination of the existence of Seller;

6. The voluntary or involuntary liquidation, sale, or other disposition of all
or substantially all of the assets of Seller;

7. The voluntary or involuntary receivership, insolvency, bankruptcy, assignment
for the benefit of creditors, reorganization, assignment, composition, or
readjustment of, or any similar proceeding affecting, Seller or any of Seller’s
assets;

8. Until payment in full of the Obligations, any right of subrogation, indemnity
or reimbursement against Seller or any right to enforce any remedy which
Purchaser may have against Seller;

9. Any and all rights and defenses arising out of an election of remedies by
Purchaser, even though that election of remedies might impair or destroy any
right, if any, of the undersigned of subrogation, indemnity or reimbursement
against Seller;

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

10. Any defense based upon Seller’s failure to disclose to the undersigned any
information concerning Seller’s financial condition or any other circumstances
bearing on Seller’s ability to pay all sums payable under or in respect of this
Joinder; and

11. Any defense based upon any statute or rule of law which provides that the
obligation of a surety must be neither larger in amount nor in any other
respects more burdensome than that of a principal.

The undersigned’s liability under this Joinder is primary, direct and
unconditional and may be enforced in full or in part, from time to time, after
nonpayment or nonperformance of any of the Obligations by Seller, in each case
without requiring Purchaser to resort to any other person or entity, including,
without limitation, Seller, or any other right, remedy or collateral.

This Joinder constitutes a guaranty of payment and performance and not of
collection only.

This Joinder is a continuing, absolute and unconditional guaranty of the
Obligations, and liability hereunder shall in no way be affected or diminished
by any renewal, extension, amendment or modification of the Agreement or any
waiver of any of the provisions thereof. The undersigned agrees that any act
which tolls any statute of limitations applicable to the Agreement shall
similarly operate to toll the statute of limitations applicable to the
undersigned’s liability under the Joinder.

At all times during the twenty-four (24) consecutive month period following the
date hereof, the undersigned shall maintain a Net Worth (defined below) in
excess of $25,000,000.00. For the six (6) consecutive month period immediately
following the expiration of such twenty-four (24) month period, the undersigned
shall maintain a Net Worth in excess of $10,000,000.00.

The undersigned shall not, at any time during the thirty (30) consecutive month
period immediately following the date hereof, enter into or effectuate any
transaction with any Affiliate which would reduce the Net Worth of the
undersigned below the level required in the immediately preceding paragraph.

For the purposes of this Joinder, “Net Worth” shall mean, as of a given date,
(i) the total assets of the undersigned as of such date less (ii) the
undersigned’s total liabilities as of such date, determined in accordance with
GAAP. “GAAP” shall mean generally accepted accounting principles, consistently
applied. Not later than forty-five (45) days following the end of each of the
first three calendar quarters, and ninety (90) days following the end of the
fourth calendar quarter, the undersigned shall deliver financial statements to
Purchaser confirming the undersigned’s compliance with the Net Worth
requirements set forth herein. Purchaser shall have the right to audit the
financial statements of the undersigned to verify such compliance. Such audits
may be conducted not more frequently than one (1) time each calendar quarter and
shall be performed at Purchaser’s sole cost and expense, unless the undersigned
is found to be non compliant with such Net Worth requirements, in which event
the undersigned shall be solely responsible for the cost of such audit.

The undersigned shall pay to Purchaser on demand any and all expenses paid or
incurred by Purchaser, including, without limitation, attorneys’ fees and
disbursements (but only to the extent reasonable), in connection with the
enforcement of this Joinder but only if Purchaser is successful on its claim
pursuant to which it is enforcing this Joinder.

The undersigned represents and warrants that (i) it has full power and authority
to execute and deliver this Joinder and to perform all obligations required of
it hereunder, (ii) the execution and delivery by the signer on behalf of the
undersigned, and the performance by the undersigned of its obligations
hereunder, have been duly and validly authorized by all necessary action by the
undersigned, and (iii) this Joinder constitutes the legal, valid and binding
obligations of the undersigned, and is enforceable against the undersigned in
accordance with its terms.

This Joinder shall be binding upon and shall inure to the benefit of the
successors and permitted assigns of the undersigned and Purchaser.

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

THIS JOINDER SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO ANY PRINCIPLES REGARDING CONFLICT OF LAWS. ANY LITIGATION OR
OTHER COURT PROCEEDING WITH RESPECT TO ANY MATTER ARISING FROM OR IN CONNECTION
WITH THIS JOINDER SHALL BE CONDUCTED IN THE NEW YORK STATE SUPREME COURT IN NEW
YORK COUNTY OR THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK, IN THE STATE OF NEW YORK, AND THE UNDERSIGNED (AND PURCHASER, BY ACCEPTING
THIS JOINDER) HEREBY SUBMITS TO JURISDICTION AND CONSENT TO VENUE IN SUCH
COURTS, AND WAIVES ANY DEFENSE BASED ON FORUM NON CONVENIENS.

THE UNDERSIGNED (AND PURCHASER, BY ACCEPTING THIS JOINDER) HEREBY WAIVES ITS
RIGHT TO A TRIAL BY JURY IN ANY LITIGATION OR OTHER COURT PROCEEDING WITH
RESPECT TO ANY MATTER ARISING FROM OR IN CONNECTION WITH THIS JOINDER.

[signature page follows]

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

LONGWING INCORPORATED, a Delaware corporation By:  

/s/ Fadel Al Ali

  Name: Fadel Al Ali   Title: Director

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

EXHIBIT 1.1(a)

DESCRIPTION OF HOTEL UNIT

Title No. NCS-557963-CHI2

SCHEDULE “A”

THE UNITS DESCRIBED IN SCHEDULE 1 ATTACHED HERETO, IN THE BUILDING KNOWN AS THE
ESSEX HOUSE CONDOMINIUM AND BY THE STREET NUMBER 160 CENTRAL PARK SOUTH, CITY,
COUNTY AND STATE OF NEW YORK, WHICH ARE THE SAME UNITS AND UNIT NUMBERS FOR SUCH
UNITS ACCORDING TO THE DECLARATION ESTABLISHING A PLAN FOR CONDOMINIUM OWNERSHIP
OF SAID BUILDING AND THE LAND ON WHICH IT IS ERECTED (HEREINAFTER CALLED THE
“PROPERTY”) UNDER THE CONDOMINIUM ACT OF THE STATE OF NEW YORK (ARTICLE 9-B OF
THE REAL PROPERTY LAW OF THE STATE OF NEW YORK), DATED 7/24/1974 AND RECORDED IN
THE OFFICE OF THE REGISTER OF THE CITY OF NEW YORK, IN THE COUNTY OF NEW YORK,
ON 9/27/1974 IN REEL 325 PAGE 479 AND AMENDED BY 1ST SUPPLEMENTAL DECLARATION
DATED 12/8/1975 RECORDED 2/5/1976 IN REEL 361 PAGE 1526, 2ND SUPPLEMENTAL
DECLARATION DATED 12/6/1977 RECORDED 2/3/1978 IN REEL 427 PAGE 1455, 3RD
SUPPLEMENTAL DECLARATION DATED 12/18/1980 RECORDED 2/5/1981 IN REEL 553 PAGE
1758, 4TH SUPPLEMENTAL DECLARATION DATED 12/18/1980 RECORDED 2/5/1981 IN REEL
553 PAGE 1762, 5TH SUPPLEMENTAL DECLARATION DATED 6/12/1981 RECORDED 7/10/1981
IN REEL 573 PAGE 1461, 6TH SUPPLEMENTAL DECLARATION DATED 9/3/1981 RECORDED
9/23/1981 IN REEL 584 PAGE 8, 7TH SUPPLEMENTAL DECLARATION DATED 11/9/1981
RECORDED 11/24/1981 IN REEL 592 PAGE 1861, 8TH SUPPLEMENTAL DECLARATION DATED
1/29/1982 RECORDED 2/8/1982 IN REEL 605 PAGE 910, 9TH SUPPLEMENTAL DECLARATION
DATED 4/19/1984 RECORDED 8/21/1984 IN REEL 825 PAGE 1228, 10TH SUPPLEMENTAL
DECLARATION DATED 10/22/1984 RECORDED 11/15/1984 IN REEL 848 PAGE 201, 11TH
SUPPLEMENTAL DECLARATION DATED 9/13/1985 RECORDED 10/30/1985 IN REEL 978 PAGE
825, 12TH SUPPLEMENTAL DECLARATION DATED 10/31/1985 RECORDED 10/31/1985 IN REEL
979 PAGE 1083 AND 13TH SUPPLEMENTAL DECLARATION DATED 12/28/94 AND RECORDED
1/13/95 IN REEL 2173 PAGE 2096, 14TH SUPPLEMENTAL DECLARATION DATED 3/31/95
RECORDED 7/14/95 IN REEL 2224 PAGE 1329, 15th SUPPLEMENTAL DECLARATION DATED
12/6/2002 RECORDED 2/25/2003 IN CRFN 2003000026521, 16TH SUPPLEMENTAL
DECLARATION DATED 11/20/2006 RECORDED 1/5/2007 IN CRFN 2007000010782, 17TH
SUPPLEMENTAL DECLARATION DATED 4/7/2009 RECORDED 6/3/2009 IN CRFN 2009000166673
AND CORRECTION TO 17TH SUPPLEMENTAL DECLARATION DATED 8/11/2009 RECORDED
8/19/2009 IN CRFN 2009000261899 (HEREINAFTER CALLED THE “DECLARATION”), AND
DESIGNATED AS TAX LOTS (SEE SCHEDULE 1) ON THE TAX MAP OF THE REAL PROPERTY
ASSESSMENT DEPARTMENT OF THE CITY OF NEW YORK FOR THE BOROUGH OF MANHATTAN AND
ON THE FLOOR PLANS OF THE BUILDING CERTIFIED BY EDWARD J. HURLEY, ON THE 15TH
DAY OF JUNE, 1973 AND FILED IN THE OFFICE OF THE REGISTER OF THE CITY OF NEW
YORK, COUNTY OF NEW YORK, ON THE 27TH DAY OF SEPTEMBER, 1974 AS CONDOMINIUM PLAN
NO. 11, WHICH PLANS WERE SUPPLEMENTED BY REVISED PLANS CERTIFIED TO BY HURLEY
AND FARINELLA, ARCHITECTS, FILED IN THE OFFICE OF THE REGISTER OF THE CITY OF
NEW YORK, COUNTY OF NEW YORK ON THE 23RD DAY OF JANUARY, 1976 AND PLANS FILED IN
THE CITY REGISTER’S OFFICE ON 10/30/1985 AS CONDOMINIUM PLAN NO. 11A THROUGH 11F
AND PLANS FILED IN THE CITY REGISTER’S OFFICE ON 7/14/1995 AS CONDOMINIUM PLAN
NO. 11G AND AS SAID PLANS MAY HAVE BEEN FURTHER AMENDED AND SUPPLEMENTED.

TOGETHER WITH THE UNDIVIDED INTERESTS IN THE COMMON ELEMENTS OF THE PROPERTY
(HEREINAFTER CALLED THE “COMMON ELEMENTS”) APPURTENANT THERETO AS SHOWN ON
SCHEDULE 1 ATTACHED HERETO.

THE LAND ON WHICH THE BUILDING IS LOCATED IS DESCRIBED AS FOLLOWS:

ALL THAT CERTAIN PLOT, PIECE OR PARCEL OF LAND, SITUATE, LYING AND BEING IN THE
BOROUGH OF MANHATTAN, COUNTY, CITY AND STATE OF NEW YORK, BOUNDED AND DESCRIBED
AS FOLLOWS:

BEGINNING AT A POINT ON THE SOUTHERLY SIDE OF CENTRAL PARK SOUTH (FORMERLY KNOWN
AS 59TH STREET), DISTANT 100 FEET EASTERLY FROM THE CORNER FORMED BY THE
INTERSECTION OF THE EASTERLY SIDE OF SEVENTH AVENUE WITH THE SOUTHERLY SIDE OF
CENTRAL PARK SOUTH;

RUNNING THENCE SOUTHERLY AND PARALLEL WITH SEVENTH AVENUE, 200 FEET 10 INCHES TO
THE NORTHERLY SIDE OF 58TH STREET;

THENCE EASTERLY, ALONG THE NORTHERLY SIDE OF 58TH STREET, 206 FEET 4 INCHES;

THENCE NORTHERLY AND AGAIN PARALLEL WITH SEVENTH AVENUE, 200 FEET 10 INCHES TO
THE SOUTHERLY SIDE OF CENTRAL PARK SOUTH;

THENCE WESTERLY ALONG THE SOUTHERLY SIDE OF CENTRAL PARK SOUTH, 206 FEET 4
INCHES TO THE POINT OR PLACE OF BEGINNING.

THE policy to be issued under this report will insure the title to such
buildings and improvements erected on the premises, which by law constitute real
property.

FOR CONVEYANCING ONLY: TOGETHER with all the right, title and interest of the
party of the first part, of in and to the land lying in the street in front of
and adjoining said premises.

Title No. NCS-557963-CHI2

SCHEDULE 1

 

Unit Number

   Tax Lot      Percentage of Common
Elements  

Hotel Unit

     1001         49.67063 % 

Commercial Unit

     2001         11.51997 % 

2001

     1610         0.26391 % 

1720

     2025         0.27523 % 

1826

     2032         0.18117 % 

1910

     2035         0.06887 % 

1912

     2036         0.10312 % 

1915

     2037         0.11081 % 

26TR

     2038         0.12634 % 

3005

     2042         0.12108 % 

3214

     2043         0.08918 % 

 

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

EXHIBIT 1.1(b)

DESCRIPTION OF COMMERCIAL UNIT

Title No. NCS-557963-CHI2

SCHEDULE “A”

THE UNITS DESCRIBED IN SCHEDULE 1 ATTACHED HERETO, IN THE BUILDING KNOWN AS THE
ESSEX HOUSE CONDOMINIUM AND BY THE STREET NUMBER 160 CENTRAL PARK SOUTH, CITY,
COUNTY AND STATE OF NEW YORK, WHICH ARE THE SAME UNITS AND UNIT NUMBERS FOR SUCH
UNITS ACCORDING TO THE DECLARATION ESTABLISHING A PLAN FOR CONDOMINIUM OWNERSHIP
OF SAID BUILDING AND THE LAND ON WHICH IT IS ERECTED (HEREINAFTER CALLED THE
“PROPERTY”) UNDER THE CONDOMINIUM ACT OF THE STATE OF NEW YORK (ARTICLE 9-B OF
THE REAL PROPERTY LAW OF THE STATE OF NEW YORK), DATED 7/24/1974 AND RECORDED IN
THE OFFICE OF THE REGISTER OF THE CITY OF NEW YORK, IN THE COUNTY OF NEW YORK,
ON 9/27/1974 IN REEL 325 PAGE 479 AND AMENDED BY 1ST SUPPLEMENTAL DECLARATION
DATED 12/8/1975 RECORDED 2/5/1976 IN REEL 361 PAGE 1526, 2ND SUPPLEMENTAL
DECLARATION DATED 12/6/1977 RECORDED 2/3/1978 IN REEL 427 PAGE 1455, 3RD
SUPPLEMENTAL DECLARATION DATED 12/18/1980 RECORDED 2/5/1981 IN REEL 553 PAGE
1758, 4TH SUPPLEMENTAL DECLARATION DATED 12/18/1980 RECORDED 2/5/1981 IN REEL
553 PAGE 1762, 5TH SUPPLEMENTAL DECLARATION DATED 6/12/1981 RECORDED 7/10/1981
IN REEL 573 PAGE 1461, 6TH SUPPLEMENTAL DECLARATION DATED 9/3/1981 RECORDED
9/23/1981 IN REEL 584 PAGE 8, 7TH SUPPLEMENTAL DECLARATION DATED 11/9/1981
RECORDED 11/24/1981 IN REEL 592 PAGE 1861, 8TH SUPPLEMENTAL DECLARATION DATED
1/29/1982 RECORDED 2/8/1982 IN REEL 605 PAGE 910, 9TH SUPPLEMENTAL DECLARATION
DATED 4/19/1984 RECORDED 8/21/1984 IN REEL 825 PAGE 1228, 10TH SUPPLEMENTAL
DECLARATION DATED 10/22/1984 RECORDED 11/15/1984 IN REEL 848 PAGE 201, 11TH
SUPPLEMENTAL DECLARATION DATED 9/13/1985 RECORDED 10/30/1985 IN REEL 978 PAGE
825, 12TH SUPPLEMENTAL DECLARATION DATED 10/31/1985 RECORDED 10/31/1985 IN REEL
979 PAGE 1083 AND 13TH SUPPLEMENTAL DECLARATION DATED 12/28/94 AND RECORDED
1/13/95 IN REEL 2173 PAGE 2096, 14TH SUPPLEMENTAL DECLARATION DATED 3/31/95
RECORDED 7/14/95 IN REEL 2224 PAGE 1329, 15th SUPPLEMENTAL DECLARATION DATED
12/6/2002 RECORDED 2/25/2003 IN CRFN 2003000026521, 16TH SUPPLEMENTAL
DECLARATION DATED 11/20/2006 RECORDED 1/5/2007 IN CRFN 2007000010782, 17TH
SUPPLEMENTAL DECLARATION DATED 4/7/2009 RECORDED 6/3/2009 IN CRFN 2009000166673
AND CORRECTION TO 17TH SUPPLEMENTAL DECLARATION DATED 8/11/2009 RECORDED
8/19/2009 IN CRFN 2009000261899 (HEREINAFTER CALLED THE “DECLARATION”), AND
DESIGNATED AS TAX LOTS (SEE SCHEDULE 1) ON THE TAX MAP OF THE REAL PROPERTY
ASSESSMENT DEPARTMENT OF THE CITY OF NEW YORK FOR THE BOROUGH OF MANHATTAN AND
ON THE FLOOR PLANS OF THE BUILDING CERTIFIED BY EDWARD J. HURLEY, ON THE 15TH
DAY OF JUNE, 1973 AND FILED IN THE OFFICE OF THE REGISTER OF THE CITY OF NEW
YORK, COUNTY OF NEW YORK, ON THE 27TH DAY OF SEPTEMBER, 1974 AS CONDOMINIUM PLAN
NO. 11, WHICH PLANS WERE SUPPLEMENTED BY REVISED PLANS CERTIFIED TO BY HURLEY
AND FARINELLA, ARCHITECTS, FILED IN THE OFFICE OF THE REGISTER OF THE CITY OF
NEW YORK, COUNTY OF NEW YORK ON THE 23RD DAY OF JANUARY, 1976 AND PLANS FILED IN
THE CITY REGISTER’S OFFICE ON 10/30/1985 AS CONDOMINIUM PLAN NO. 11A THROUGH 11F
AND PLANS FILED IN THE CITY REGISTER’S OFFICE ON 7/14/1995 AS CONDOMINIUM PLAN
NO. 11G AND AS SAID PLANS MAY HAVE BEEN FURTHER AMENDED AND SUPPLEMENTED.

TOGETHER WITH THE UNDIVIDED INTERESTS IN THE COMMON ELEMENTS OF THE PROPERTY
(HEREINAFTER CALLED THE “COMMON ELEMENTS”) APPURTENANT THERETO AS SHOWN ON
SCHEDULE 1 ATTACHED HERETO.

THE LAND ON WHICH THE BUILDING IS LOCATED IS DESCRIBED AS FOLLOWS:

ALL THAT CERTAIN PLOT, PIECE OR PARCEL OF LAND, SITUATE, LYING AND BEING IN THE
BOROUGH OF MANHATTAN, COUNTY, CITY AND STATE OF NEW YORK, BOUNDED AND DESCRIBED
AS FOLLOWS:

BEGINNING AT A POINT ON THE SOUTHERLY SIDE OF CENTRAL PARK SOUTH (FORMERLY KNOWN
AS 59TH STREET), DISTANT 100 FEET EASTERLY FROM THE CORNER FORMED BY THE
INTERSECTION OF THE EASTERLY SIDE OF SEVENTH AVENUE WITH THE SOUTHERLY SIDE OF
CENTRAL PARK SOUTH;

RUNNING THENCE SOUTHERLY AND PARALLEL WITH SEVENTH AVENUE, 200 FEET 10 INCHES TO
THE NORTHERLY SIDE OF 58TH STREET;

THENCE EASTERLY, ALONG THE NORTHERLY SIDE OF 58TH STREET, 206 FEET 4 INCHES;

THENCE NORTHERLY AND AGAIN PARALLEL WITH SEVENTH AVENUE, 200 FEET 10 INCHES TO
THE SOUTHERLY SIDE OF CENTRAL PARK SOUTH;

THENCE WESTERLY ALONG THE SOUTHERLY SIDE OF CENTRAL PARK SOUTH, 206 FEET 4
INCHES TO THE POINT OR PLACE OF BEGINNING.

THE policy to be issued under this report will insure the title to such
buildings and improvements erected on the premises, which by law constitute real
property.

FOR CONVEYANCING ONLY: TOGETHER with all the right, title and interest of the
party of the first part, of in and to the land lying in the street in front of
and adjoining said premises.

Title No. NCS-557963-CHI2

SCHEDULE 1

 

Unit Number

   Tax Lot      Percentage of Common
Elements  

Hotel Unit

     1001         49.67063 % 

Commercial Unit

     2001         11.51997 % 

2001

     1610         0.26391 % 

1720

     2025         0.27523 % 

1826

     2032         0.18117 % 

1910

     2035         0.06887 % 

1912

     2036         0.10312 % 

1915

     2037         0.11081 % 

26TR

     2038         0.12634 % 

3005

     2042         0.12108 % 

3214

     2043         0.08918 % 

 

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

EXHIBIT 1.1(c)

DESCRIPTION OF RESIDENTIAL UNITS

Title No. NCS-557963-CHI2

SCHEDULE “A”

THE UNITS DESCRIBED IN SCHEDULE 1 ATTACHED HERETO, IN THE BUILDING KNOWN AS THE
ESSEX HOUSE CONDOMINIUM AND BY THE STREET NUMBER 160 CENTRAL PARK SOUTH, CITY,
COUNTY AND STATE OF NEW YORK, WHICH ARE THE SAME UNITS AND UNIT NUMBERS FOR SUCH
UNITS ACCORDING TO THE DECLARATION ESTABLISHING A PLAN FOR CONDOMINIUM OWNERSHIP
OF SAID BUILDING AND THE LAND ON WHICH IT IS ERECTED (HEREINAFTER CALLED THE
“PROPERTY”) UNDER THE CONDOMINIUM ACT OF THE STATE OF NEW YORK (ARTICLE 9-B OF
THE REAL PROPERTY LAW OF THE STATE OF NEW YORK), DATED 7/24/1974 AND RECORDED IN
THE OFFICE OF THE REGISTER OF THE CITY OF NEW YORK, IN THE COUNTY OF NEW YORK,
ON 9/27/1974 IN REEL 325 PAGE 479 AND AMENDED BY 1ST SUPPLEMENTAL DECLARATION
DATED 12/8/1975 RECORDED 2/5/1976 IN REEL 361 PAGE 1526, 2ND SUPPLEMENTAL
DECLARATION DATED 12/6/1977 RECORDED 2/3/1978 IN REEL 427 PAGE 1455, 3RD
SUPPLEMENTAL DECLARATION DATED 12/18/1980 RECORDED 2/5/1981 IN REEL 553 PAGE
1758, 4TH SUPPLEMENTAL DECLARATION DATED 12/18/1980 RECORDED 2/5/1981 IN REEL
553 PAGE 1762, 5TH SUPPLEMENTAL DECLARATION DATED 6/12/1981 RECORDED 7/10/1981
IN REEL 573 PAGE 1461, 6TH SUPPLEMENTAL DECLARATION DATED 9/3/1981 RECORDED
9/23/1981 IN REEL 584 PAGE 8, 7TH SUPPLEMENTAL DECLARATION DATED 11/9/1981
RECORDED 11/24/1981 IN REEL 592 PAGE 1861, 8TH SUPPLEMENTAL DECLARATION DATED
1/29/1982 RECORDED 2/8/1982 IN REEL 605 PAGE 910, 9TH SUPPLEMENTAL DECLARATION
DATED 4/19/1984 RECORDED 8/21/1984 IN REEL 825 PAGE 1228, 10TH SUPPLEMENTAL
DECLARATION DATED 10/22/1984 RECORDED 11/15/1984 IN REEL 848 PAGE 201, 11TH
SUPPLEMENTAL DECLARATION DATED 9/13/1985 RECORDED 10/30/1985 IN REEL 978 PAGE
825, 12TH SUPPLEMENTAL DECLARATION DATED 10/31/1985 RECORDED 10/31/1985 IN REEL
979 PAGE 1083 AND 13TH SUPPLEMENTAL DECLARATION DATED 12/28/94 AND RECORDED
1/13/95 IN REEL 2173 PAGE 2096, 14TH SUPPLEMENTAL DECLARATION DATED 3/31/95
RECORDED 7/14/95 IN REEL 2224 PAGE 1329, 15th SUPPLEMENTAL DECLARATION DATED
12/6/2002 RECORDED 2/25/2003 IN CRFN 2003000026521, 16TH SUPPLEMENTAL
DECLARATION DATED 11/20/2006 RECORDED 1/5/2007 IN CRFN 2007000010782, 17TH
SUPPLEMENTAL DECLARATION DATED 4/7/2009 RECORDED 6/3/2009 IN CRFN 2009000166673
AND CORRECTION TO 17TH SUPPLEMENTAL DECLARATION DATED 8/11/2009 RECORDED
8/19/2009 IN CRFN 2009000261899 (HEREINAFTER CALLED THE “DECLARATION”), AND
DESIGNATED AS TAX LOTS (SEE SCHEDULE 1) ON THE TAX MAP OF THE REAL PROPERTY
ASSESSMENT DEPARTMENT OF THE CITY OF NEW YORK FOR THE BOROUGH OF MANHATTAN AND
ON THE FLOOR PLANS OF THE BUILDING CERTIFIED BY EDWARD J. HURLEY, ON THE 15TH
DAY OF JUNE, 1973 AND FILED IN THE OFFICE OF THE REGISTER OF THE CITY OF NEW
YORK, COUNTY OF NEW YORK, ON THE 27TH DAY OF SEPTEMBER, 1974 AS CONDOMINIUM PLAN
NO. 11, WHICH PLANS WERE SUPPLEMENTED BY REVISED PLANS CERTIFIED TO BY HURLEY
AND FARINELLA, ARCHITECTS, FILED IN THE OFFICE OF THE REGISTER OF THE CITY OF
NEW YORK, COUNTY OF NEW YORK ON THE 23RD DAY OF JANUARY, 1976 AND PLANS FILED IN
THE CITY REGISTER’S OFFICE ON 10/30/1985 AS CONDOMINIUM PLAN NO. 11A THROUGH 11F
AND PLANS FILED IN THE CITY REGISTER’S OFFICE ON 7/14/1995 AS CONDOMINIUM PLAN
NO. 11G AND AS SAID PLANS MAY HAVE BEEN FURTHER AMENDED AND SUPPLEMENTED.

TOGETHER WITH THE UNDIVIDED INTERESTS IN THE COMMON ELEMENTS OF THE PROPERTY
(HEREINAFTER CALLED THE “COMMON ELEMENTS”) APPURTENANT THERETO AS SHOWN ON
SCHEDULE 1 ATTACHED HERETO.

THE LAND ON WHICH THE BUILDING IS LOCATED IS DESCRIBED AS FOLLOWS:

ALL THAT CERTAIN PLOT, PIECE OR PARCEL OF LAND, SITUATE, LYING AND BEING IN THE
BOROUGH OF MANHATTAN, COUNTY, CITY AND STATE OF NEW YORK, BOUNDED AND DESCRIBED
AS FOLLOWS:

BEGINNING AT A POINT ON THE SOUTHERLY SIDE OF CENTRAL PARK SOUTH (FORMERLY KNOWN
AS 59TH STREET), DISTANT 100 FEET EASTERLY FROM THE CORNER FORMED BY THE
INTERSECTION OF THE EASTERLY SIDE OF SEVENTH AVENUE WITH THE SOUTHERLY SIDE OF
CENTRAL PARK SOUTH;

RUNNING THENCE SOUTHERLY AND PARALLEL WITH SEVENTH AVENUE, 200 FEET 10 INCHES TO
THE NORTHERLY SIDE OF 58TH STREET;

THENCE EASTERLY, ALONG THE NORTHERLY SIDE OF 58TH STREET, 206 FEET 4 INCHES;

THENCE NORTHERLY AND AGAIN PARALLEL WITH SEVENTH AVENUE, 200 FEET 10 INCHES TO
THE SOUTHERLY SIDE OF CENTRAL PARK SOUTH;

THENCE WESTERLY ALONG THE SOUTHERLY SIDE OF CENTRAL PARK SOUTH, 206 FEET 4
INCHES TO THE POINT OR PLACE OF BEGINNING.

THE policy to be issued under this report will insure the title to such
buildings and improvements erected on the premises, which by law constitute real
property.

FOR CONVEYANCING ONLY: TOGETHER with all the right, title and interest of the
party of the first part, of in and to the land lying in the street in front of
and adjoining said premises.

Title No. NCS-557963-CHI2

SCHEDULE 1

 

Unit Number

   Tax Lot      Percentage of Common
Elements  

Hotel Unit

     1001         49.67063 % 

Commercial Unit

     2001         11.51997 % 

2001

     1610         0.26391 % 

1720

     2025         0.27523 % 

1826

     2032         0.18117 % 

1910

     2035         0.06887 % 

1912

     2036         0.10312 % 

1915

     2037         0.11081 % 

26TR

     2038         0.12634 % 

3005

     2042         0.12108 % 

3214

     2043         0.08918 % 

 

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

EXHIBIT 1.2(e)

JUMEIRAH EXCLUDED PERSONALTY

 

ESSEX HOUSE - EXCLUDED PROPERTY

 

#

 

Property Description

 

Location

 

Comments

SERVERS

 

1   JEH-BES - Blackberry   JEH   Decommission from Jumeirah Exchange 2  
NA-AD-01 - Active Directory   JEH   Decommission and extract the server hardware
3   JEH-TS-02 - Terminal Services   JEH   Decommission 4   BOTANICA - Exchange
Front end   JEH   Decommission and extract hardware 5   NA-AD-02 - Active
Directory Backup   JEH   Decommission and extract hardware 6   JEH-APP-01 -
Solomon   JEH   Take historical data and backup tapes 7   JEH-EXCH - Exchange
Server   JEH   Decommission and extract hardware 8   JEH-HOME-01 - File server  
JEH   Extract data only 9   JEH-DELPHI - Delphi   JEH   Extract data 10  
JEH-APP-03 - Sun Financials   JEH   Decommission and extract hardware 11  
JEH-HIS-APP2 - Old PMS   JEH   Extract data 12   JEH-OPMS-DB - Opera DB   JEH  
Extract data and leave future bookings 13   JEH-OPMS-APP - Opera APP   JEH  
Decommission 14   JEH-OPMS-OXI - Opera OXI   JEH   Decommission 15   JEH-OPMS-DR
- Opera Dataguard   JEH   Decommission 16   NA-RSO-01 - RSO File server   JEH  
Transfer to the regional office 17   JEH-SIEM - Security logs   JEH  
Decommission 18   WAN Optimizer - Riverbed network appliance   JEH  
Decommission and extract hardware 19   Juniper Appliances - Firewall and VPN
appliance   JEH   Decommission 20   BT MPLS network - Routers and appliances  
JEH   Decommission and extract hardware JUMEIRAH MARKETING COLLATERAL

 

    1  

Jumeirah Marketing Collateral (including but not

limited to photos of the Essex House procured by

and/or used by Jumeirah marketing)

 

Throughout the Hotel, Guest

Rooms, Offices, Back-of the

House, marketing

 

 

ESSEX HOUSE - EXCLUDED PROPERTY

 

#

  

Property Description

   Location   

Comments

FINANCIAL AND GUEST DATA

 

1    Jumeirah Financial Statements, Records, Documents   
Finance Office & Other Offices    All documents related to Jumeirah Management
of Essex House except those documents absolutely required for the operation of
the Property 2    Guest credit card information    JEH    JUMEIRAH GUEST LOYALTY
DATA

 

      1    Guest loyalty data    JEH    Further to terms of the Management
Agreement between DIG EH Hotel LLC and Jumeirah Hospitality & Leisure (USA) Inc.
INTELLECTUAL PROPERTY

 

      1    Trademarks, trade names, service marks, copyrights or domain names,
menus and design features belonging to Jumeirah Hospitality & Leisure (USA) Inc
or Jumeirah International LLC relating to the Hotel and/or the Condominium Units
and services thereat, together with all applications and rights, if any, to
apply for the protection of any of the foregoing    N/A    WEBSITES

 

      1    www.jumeirahessexhouse.com    N/A    Post closing, a statement will
appear on the site stating Jumeirah no longer manages the hotel and a phone
number for the new operator will be provided

 

ESSEX HOUSE - EXCLUDED PROPERTY

 

#

  

Property Description

   Location   

Comments

EMPLOYEE PERSONAL PROPERTY

 

1    Employee - Personal Property    Throughout the
Hotel/Lockers/Offices    Pictures, paintings and other personal property brought
in by employees 2    A Marque Print—Hirschfeld    Dir. Of HR Office    Personal
Property - HR Director 3    Tight Rope Walker—Charcoal Drawing    Dir. Of HR
Office    Personal Property - HR Director 4    Brooklyn Bridge—Photograph   
Dir. Of HR Office    Personal Property - HR Director 5    Police
Officer—Photograph    Dir. Of HR Office    Personal Property - HR Director 6   
NYC Harbor—Print    Dir. Of HR Office    Personal Property - HR Director 7   
NYC 59th Street—Print    Dir. Of HR Office    Personal Property - HR Director 8
   Japanese Toys—Print    Dir. Of HR Office    Personal Property - HR Director

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

EXHIBIT 2.1(b)(i)

WIRING INSTRUCTIONS

First American Title Insurance Company

NCS Chicago

30 North LaSalle Street, Suite 2700, Chicago, Illinois 60602

(312) 553-0471 (800) 333-3993 (Fax) 553-0480

WIRE TRANSFER INSTRUCTIONS

 

  Wire to:    First American Trust, FSB        5 First American Way       

Santa Ana, CA 92707

 

       ABA Number:          Account Name:        Account Number:         
Reference:   Escrow No:        Attention:    

IMPORTANT:

PLEASE REFERENCE THE ESCROW NUMBER IN THE WIRE TRANSMITTAL

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

EXHIBIT 4.3(h)(1)

FORM OF AFFIDAVIT OF OFFEREE

OFFEREE’S AFFIDAVIT IN SUPPORT OF NO-ACTION LETTER

ESSEX HOUSE CONDOMINIUM – PURCHASE OF HOTEL UNIT, COMMERCIAL UNIT, UNSOLD

RESIDENTIAL UNITS

 

STATE OF NEW YORK   )   ) ss.: COUNTY OF NEW YORK   )

                    , being duly sworn deposes and says upon information and
belief:

1. I am the                     of                     a
                    (“Offeree”). I make this affidavit (“Affidavit”) in the
foregoing capacity.

2. Offeree submits this Affidavit in support of the application (the
“Application”) made by DIG EH HOTEL LLC, a Delaware limited liability company
(the “Offeror”), requesting the issuance of a no-action letter or similar advice
(collectively, a “No-Action Letter”) in connection with the sale of the
condominium units more particularly described on Schedule A annexed hereto (the
“Condominium Units”), each located in the City, County and State of New York,
designated in Block 1011 on the tax map of the Borough of Manhattan (the
“Contemplated Transaction”).

3. Offeree is in the process of negotiating a contract of sale for the purchase
of the Condominium Units with Offeror.

4. On information and belief, Offeree has been advised that Offeror is the fee
owner of the Condominium Units in the property located at 160 Central Park
South, New York, New York (the “Property”) in the condominium known as the
“Essex House Condominium” (the “Condominium”).

5. Offeree has been advised that: (i) pursuant to the terms of an offering plan
dated July 27, 1974, as amended the Property was submitted to a condominium
regime pursuant to a declaration dated July 27, 1974 and recorded in the Office
of the Register of the State, County and City of New York (the “City Register’s
Office”) on September 27, 1974 in reel 325 and page 479, as amended by those
amendments more particularly described on Schedule B annexed hereto and (ii) the
building constructed on the Property contains two (2) below-grade levels and
forty three (43) stories above grade (the “Building”).

6. Offeree has retained legal counsel to assist in the review of the
Contemplated Transaction and has therefore been adequately represented and
advised with respect to the Contemplated Transaction.

7. Offeree: (i) is fully familiar with the Property and the Condominium; and
(ii) has through itself or its employees, professionals and affiliates great
sophistication in real estate development and operation and has the financial
wherewithal to appreciate and bear the risk of the Contemplated Transaction.

8. Offeree understands that no condominium offering literature other than as
required by a No-Action Letter will be provided in connection with the
Contemplated Transaction.

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

9. Offeree acknowledges that if the Contemplated Transaction had been effected
as part of a public offering within the meaning of the New York General Business
Law Article 23-A (and any regulations promulgated thereunder) (the “Article”)
and not pursuant to a No-Action Letter, Offeree would be entitled to certain
rights and protections of the Article with respect to certain disclosures,
procedures, filings, remedies, etc. that would be applicable thereto.

10. Based upon the foregoing and as otherwise set forth in the Application, the
Owner’s request for the issuance of a No-Action Letter or similar relief should
be granted.

[SIGNATURE PAGE ON FOLLOWING PAGE]

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

OFFEREE:

By:

 

 

  Name:   Title:

Sworn to before me this

            day of                     , 2012

 

 

Notary Public

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

SCHEDULE A

LIST OF CONDOMINIUM UNITS

 

Unit

   tax lot

HOTEL UNIT

   1001

COMMERCIAL UNIT

   2001

RESIDENTIAL UNITS: 2001, 1720, 1826, 1910, 1912, 1915, 26TR, 3005 and 3214

   1610, 2025, 2032, 2035, 2036,

2037, 2038, 2042, 2043

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

SCHEDULE B

SCHEDULE OF AMENDMENTS TO CONDOMINIUM DECLARATION

 

1. The First Supplemental Declaration which was recorded in the Office of the
Register of the City of New York on the 5th day of February, 1976, in Reel 361
at page 1526 (the “First Supplement”) and

 

2. The Second Supplemental Declaration, which was recorded in the Office of the
Register of the City of New York on the 3rd day of February, 1978; in Reel 427
at page 1455 (the “Second Supplement”); and

 

3. The Third Supplemental Declaration, which was recorded in the Office of the
Register of the City of New York on the 5th day of February, 1981, in Reel 553
at page 1758 (the “Third Supplement”); and

 

4. The Fourth Supplemental Declaration, which was recorded in the Office of the
Register of the City of New York on the 5th day of February, 1981, in Reel 553
at page 1762 (the “Fourth Supplement”); and

 

5. The Fifth Supplemental Declaration, which was recorded in the Office of the
Register of the City of New York on the 10th day of July, 1981, in Reel 573 at
page 1461 (the “Fifth Supplement”); and

 

6. The Sixth Supplemental Declaration, which was recorded in the Office of the
Register of the City of New York on the 23rd day of September, 1981, in Reel 584
at page 8 (the “Sixth Supplement”); and

 

7. The Seventh Supplemental Declaration, which was recorded in the Office of the
Register of the City of New York on the 24th day of November, 1981, in Reel 592
at page 1861 (the “Seventh Supplement”); and

 

8. The Eighth Supplemental Declaration, which was recorded in the Office of the
Register of the City of New York on the 8th day of February, 1982, in Reel 605
at page 910 (the “Eighth Supplement”); and

 

9. The Ninth Supplemental Declaration, which was recorded in the Office of the
Register of the City of New York on the 21st day of August, 1984, in Reel 825 at
page 1228 (the “Ninth Supplement”); and

 

10. The Tenth Supplemental Declaration, which was recorded in the Office of the
Register of the City of New York on the 15th day of November, 1984, in Reel 848
at page 201 (the “Tenth Supplement”); and

 

11. The Eleventh Supplemental Declaration, which was recorded in the Office of
the Register of the City of New York on the 30th day of October, 1985, in Reel
978 at page 825 (the “Eleventh Supplement”); and

 

12. The Twelfth Supplemental Declaration which was recorded in the Office of the
Register of the City of New York on the 31st day of October, 1985 in Reel 979 at
page 1083 (the “Twelfth Supplement”); and

 

13. The Thirteenth Supplemental Declaration which was recorded in the Office of
the Register of the City of New York on the 13th day of January, 1995 in Reel
2173 at page 2096 (the “Thirteenth Supplement”); and

 

14. The Amended and Restated Declaration (the “Amended and Restated
Declaration”) and the Fourteenth Supplemental Declaration, which was recorded in
the Office of the Register of the City of New York on the 14th day of July, 1995
in Reel 2224 at page 1329; the First Supplement through and including the
Fourteenth Supplemental Declaration being hereafter collectively referred to as
the “Supplements”; and

 

15. The Fifteenth Supplemental Declaration which was recorded in the Office of
the Register of the City of New York on the 25th day of February, 2003 as City
Register File Number (“CRFN”) 2003000026521 (the “Fifteenth Supplement”); and

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

16. The Sixteenth Supplemental Declaration which was recorded in the Office of
the Register of the City of New York on the 5th day of January, 2007 as City
Register File Number (“CRFN”) 2007000010782 (the “Sixteenth Supplement”); and

 

17. The Seventeenth Supplemental Declaration which was recorded in the Office of
the Register of the City of New York on the 3rd day of June, 2009 as City
Register File Number (“CRFN”) 2009000166673 (the “Seventeenth Supplement”); and

 

18. The Correction to Seventeenth Supplemental Declaration which was recorded in
the Office of the Register of the City of New York on the 19th day of August,
2009 as City Register File Number (“CRFN”) 2009000261899.

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

EXHIBIT 4.3(h)(2)

FORM OF AFFIDAVIT OF OFFEROR

OFFEROR’S AFFIDAVIT IN SUPPORT OF NO-ACTION LETTER

ESSEX HOUSE CONDOMINIUM – SALE OF HOTEL UNIT, COMMERCIAL UNIT, UNSOLD

RESIDENTIAL UNITS

 

   )    ) ss.:    )

                    , being duly sworn, deposes and says upon information and
belief:

1. I am the                     of DIG EH HOTEL LLC, a Delaware limited
liability company (“Offeror”), having an office at 160 Central Park South, New
York, New York. I make this affidavit (“Affidavit”) in the foregoing capacity.

2. Offeror is the fee owner of the condominium units more particularly described
on Schedule A annexed hereto (the “Condominium Units”), each located in the
City, County and State of New York, designated in Block 1011 on the tax map of
the Borough of Manhattan.

3. Offeror is the sponsor under that certain Amended and Restated Condominium
Offering Plan for the Condominium (hereinafter defined), dated as of August 18,
2006 as amended (the “Plan”).

4. Offeror submits this Affidavit in support of its application for a “No-Action
Letter” (the “Application”) requesting the issuance of a no-action letter or
similar advice (all referred to in this Application as a “No-Action Letter”) in
connection with the sale of the Condominium Units in the condominium known as
“Essex House Condominium” (the “Condominium”) having an address of 160 Central
Park South, New York, New York (the “Property”).

5. In accordance with the terms of the Plan, the Property was submitted to a
condominium regime pursuant to a declaration dated July 27, 1974 and recorded in
the Office of the Register of the State, County and City of New York (the “City
Register’s Office”) on September 27, 1974 in reel 325 and page 479, as amended
by those amendments more particularly described on Schedule B annexed hereto.
The building constructed on the Property contains two (2) below-grade levels and
forty three (43) stories above grade (the “Building”).

6. Offeror is in the process of negotiating a contract of sale to sell the
Condominium Units to                     , a                      (“Offeree”).

7. Upon the closing of sale of the Condominium Units, the Condominium Units will
be owned by Offeree and Offeror will cease to have any ownership interest in the
Condominium Units.

8. The Application is being filed in order to permit Offeror to sell the
Condominium Units located in the Condominium as described herein.

9. Due to the sophistication of the parties involved, and the nature of the
proposed transaction, it is the belief of the Applicant that:

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

(i) the relationship between Offeror and Offeree is of such a nature that
Offeree does not require the protection of an offering plan; and

(ii) the relationship between Offeror and Offeree is such that Offeree is aware
of the condition of the Condominium Units which are the subject of the proposed
transaction and the requested No-Action Letter.

10. The Building has been constructed in accordance with the requirements of
applicable law and the Condominium was formed in conformity with applicable law,
including the New York State Condominium Act.

11. Offeror will make no transfer of the Condominium Units to members of the
public unless pursuant to the procedures outlined in this Application and this
Affidavit.

12. To the best of Offeror’s knowledge, neither Offeror nor any of its
principals have participated, within the preceding five years, in any other
Application for a no-action letter, nor have they made any other offerings which
are not pursuant to an offering plan filed with the Department of Law.

[SIGNATURE PAGE ON FOLLOWING PAGE]

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

DIG EH HOTEL LLC

By:

   

 

  Name:   Title:

Sworn to before me this

            day of                     , 2012

   Notary Public

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

SCHEDULE A

LIST OF CONDOMINIUM UNITS

 

UNIT

   TAX LOT

HOTEL UNIT

   1001

COMMERCIAL UNIT

   2001

RESIDENTIAL UNITS: 2001, 1720, 1826, 1910, 1912, 1915, 26TR, 3005 and 3214

   1610, 2025, 2032, 2035, 2036,

2037, 2038, 2042, 2043

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

SCHEDULE B

SCHEDULE OF AMENDMENTS TO CONDOMINIUM DECLARATION

 

1. The First Supplemental Declaration which was recorded in the Office of the
Register of the City of New York on the 5th day of February, 1976, in Reel 361
at page 1526 (the “First Supplement”) and

 

2. The Second Supplemental Declaration, which was recorded in the Office of the
Register of the City of New York on the 3rd day of February, 1978; in Reel 427
at page 1455 (the “Second Supplement”); and

 

3. The Third Supplemental Declaration, which was recorded in the Office of the
Register of the City of New York on the 5th day of February, 1981, in Reel 553
at page 1758 (the “Third Supplement”); and

 

4. The Fourth Supplemental Declaration, which was recorded in the Office of the
Register of the City of New York on the 5th day of February, 1981, in Reel 553
at page 1762 (the “Fourth Supplement”); and

 

5. The Fifth Supplemental Declaration, which was recorded in the Office of the
Register of the City of New York on the 10th day of July, 1981, in Reel 573 at
page 1461 (the “Fifth Supplement”); and

 

6. The Sixth Supplemental Declaration, which was recorded in the Office of the
Register of the City of New York on the 23rd day of September, 1981, in Reel 584
at page 8 (the “Sixth Supplement”); and

 

7. The Seventh Supplemental Declaration, which was recorded in the Office of the
Register of the City of New York on the 24th day of November, 1981, in Reel 592
at page 1861 (the “Seventh Supplement”); and

 

8. The Eighth Supplemental Declaration, which was recorded in the Office of the
Register of the City of New York on the 8th day of February, 1982, in Reel 605
at page 910 (the “Eighth Supplement”); and

 

9. The Ninth Supplemental Declaration, which was recorded in the Office of the
Register of the City of New York on the 21st day of August, 1984, in Reel 825 at
page 1228 (the “Ninth Supplement”); and

 

10. The Tenth Supplemental Declaration, which was recorded in the Office of the
Register of the City of New York on the 15th day of November, 1984, in Reel 848
at page 201 (the “Tenth Supplement”); and

 

11. The Eleventh Supplemental Declaration, which was recorded in the Office of
the Register of the City of New York on the 30th day of October, 1985, in Reel
978 at page 825 (the “Eleventh Supplement”); and

 

12. The Twelfth Supplemental Declaration which was recorded in the Office of the
Register of the City of New York on the 31st day of October, 1985 in Reel 979 at
page 1083 (the “Twelfth Supplement”); and

 

13. The Thirteenth Supplemental Declaration which was recorded in the Office of
the Register of the City of New York on the 13th day of January, 1995 in Reel
2173 at page 2096 (the “Thirteenth Supplement”); and

 

14. The Amended and Restated Declaration (the “Amended and Restated
Declaration”) and the Fourteenth Supplemental Declaration, which was recorded in
the Office of the Register of the City of New York on the 14th day of July, 1995
in Reel 2224 at page 1329; the First Supplement through and including the
Fourteenth Supplemental Declaration being hereafter collectively referred to as
the “Supplements”; and

 

15. The Fifteenth Supplemental Declaration which was recorded in the Office of
the Register of the City of New York on the 25th day of February, 2003 as City
Register File Number (“CRFN”) 2003000026521 (the “Fifteenth Supplement”); and

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

16. The Sixteenth Supplemental Declaration which was recorded in the Office of
the Register of the City of New York on the 5th day of January, 2007 as City
Register File Number (“CRFN”) 2007000010782 (the “Sixteenth Supplement”); and

 

17. The Seventeenth Supplemental Declaration which was recorded in the Office of
the Register of the City of New York on the 3rd day of June, 2009 as City
Register File Number (“CRFN”) 2009000166673 (the “Seventeenth Supplement”); and

 

18. The Correction to Seventeenth Supplemental Declaration which was recorded in
the Office of the Register of the City of New York on the 19th day of August,
2009 as City Register File Number (“CRFN”) 2009000261899.

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

EXHIBIT 4.3(j)

FORM OF REQUEST TO MORTGAGE LENDER

DIG EH HOTEL LLC

c/o Silverpeak Real Estate Partners

1330 Avenue of the Americas, Suite 1200

New York, New York 10019

VIA OVERNIGHT COURIER

August     , 2012

Berkadia Commercial Mortgage LLC

118 Welsh Road

Horsham, Pennsylvania 19044

Attention: Christie M. Robbins

Re: Essex House

Dear Ms. Robbins:

Reference is made to that certain Mortgage Loan Agreement (the “Loan
Agreement”), dated as of August 9, 2007, between DIG EH Hotel LLC (“Borrower”)
and UBS Real Estate Securities Inc. (“Lender”). Each initially capitalized term
used herein without definition has the meaning ascribed to such term in the Loan
Agreement.

In connection with Borrower’s repayment of the Loan and pursuant to Section 2.6
of the Loan Agreement, Borrower hereby requests that Lender assign the Mortgage
to a lender to be designated by Borrower on a date to be designated by Borrower
which date will be on or prior to the Maturity Date. Please advise whether
Lender wishes for Borrower to arrange for the drafting of the documents required
to effect such assignment or if Lender will arrange for such documents to be
drafted.

Respectfully,

Anthony Juliano, Managing Director

Silverpeak Real Estate Partners

(Owner’s Representative for DIG EH Hotel LLC)

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

EXHIBIT 6.2(e)

FORM OF POST CLOSING ESCROW AGREEMENT

POST CLOSING ESCROW AGREEMENT

THIS ESCROW AGREEMENT (“Escrow Agreement”), dated the         day of
                    , 2012 (the “Post Closing Escrow Agreement Effective Date”),
is by and between DIG EH HOTEL, LLC, a Delaware limited liability company
(“Seller”), SHR ESSEX HOUSE LLC, a Delaware limited liability company
(“Purchaser”), and FIRST AMERICAN TITLE INSURANCE COMPANY (“Escrow Agent”).

R E C I T A L S:

WHEREAS, pursuant to that certain Purchase and Sale Agreement dated August
        , 2012 (as amended and/or assigned, “PSA”), a copy of which has been
provided to Escrow Agent, Seller agreed to sell to Purchaser and Purchaser
agreed to acquire from Seller, certain Property (as defined in the PSA) commonly
known as The Essex House located at 160 Central Park South, New York, New York;

WHEREAS, the parties are entering into this Escrow Agreement pursuant to the
provisions of the PSA and to fulfill its obligations under the PSA, Seller is
depositing with the Escrow Agent pursuant to Section 6.2(e) of the PSA the sum
of $7,000,000.00 (together with any interest, the “Deposit”), to be held and
disbursed in accordance with the provisions of this Escrow Agreement.

NOW, THEREFORE, in consideration of Ten and No/100 ($10.00) Dollars and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Seller, Purchaser, and Escrow Agent hereby agree as follows:

 

1. Upon receipt of the Deposit into Escrow Agent’s escrow account (as set forth
on Exhibit A attached hereto), Escrow Agent agrees to hold the Deposit in escrow
and disburse the Deposit in accordance with the terms of this Escrow Agreement.

 

2. Escrow Agent shall disburse the Deposit as follows:

 

  (a) Escrow Agent shall promptly deliver all or any portion of the Deposit to
Purchaser as directed in writing by Seller.

 

  (b) Escrow Agent shall promptly deliver all or any portion of the Deposit as
directed by a joint direction from Seller and Purchaser.

 

  (c) Escrow Agent shall deliver all or any portion of the Deposit:

 

  (i) as directed by the Purchaser in the event that Purchaser makes a written
demand therefor to Seller and Escrow Agent (a “Claims Notice”) certifying the
basis of such demand pursuant to the PSA,

 

  (ii) in the amount claimed in the Claims Notice (the “Claimed Amount”), and

 

  (iii) on the fifth (5th) business day after Escrow Agent’s receipt of said
Claims Notice.

 

  (d) Notwithstanding the forgoing provisions of Section 2(c), if Escrow Agent
receives written notice from Seller with a copy to Purchaser (a “Dispute
Notice”) within such five (5) business day period, stating that Seller disputes
Purchaser’s right to receive the Claimed Amount and directing Escrow Agent not
to make the foregoing payment, then upon receipt of a Dispute Notice, Escrow
Agent shall not deliver the Claimed Amount to Purchaser, but shall instead
retain it pending instruction in accordance with Section 2(a) or Section 2(b)
hereof, or pursuant to a final order of a court of competent jurisdiction, or,
if appropriate, interplead a portion of the Deposit equal to the Claimed Amount
in a court of competent jurisdiction.

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

  (e)

At 5:00 p.m. Central time on the tenth (10th) day following the first
(1st) anniversary of the Post Closing Agreement Effective Date Escrow Agent,
without need for further notice to either party shall disburse to Seller such
amounts held in respect of the Claims Deposit, minus any Claimed Amount
disbursed to Purchaser, and minus any amount which is subject to an outstanding
dispute under a Claims Notice or Dispute Notice as of such date, any such
disputed amount to be disbursed upon the written direction of the parties or
pursuant to a final order of a court of competent jurisdiction.

 

3. Escrow Agent shall invest the Deposit in an interest bearing F.D.I.C. insured
account at a bank determined by Escrow Agent. All interest will be reported to
the applicable taxing authorities and accrue for income tax purposes to the
account of Seller; Seller shall be responsible for paying all taxes on any
interest earned on the Deposit, which obligation shall survive the expiration of
this Agreement. Seller shall provide Escrow Agent with its Federal
Identification Number and shall fill out and submit a Form W-9 or W-8BEN as
required by Escrow Agent.

 

4. Escrow Agent may not commingle the Deposit with other funds held in any
“trustees account.”

 

5. In the event that a dispute shall arise as to the disposition of the Deposit
or any other funds held hereunder in escrow, Escrow Agent shall have the right,
at its option, to either hold the same or deposit the same with a court of
competent jurisdiction pending decision of such court, and Escrow Agent shall be
entitled to rely upon the decision of such court.

 

6. Escrow Agent shall have no liability whatsoever arising out of or in
connection with its activity as escrow agent provided it does not act in bad
faith or willful disregard of the terms of this Agreement and Seller and
Purchaser jointly and severally agree to indemnify and hold harmless Escrow
Agent from all loss, cost, claim, damage, liability and expenses (including
reasonable attorneys’ fees) which may be incurred by reason of its acting as
escrow agent unless caused by Escrow Agent’s bad faith or willful disregard of
the terms of this Escrow Agreement.

 

7. Escrow Agent shall be entitled to rely upon any judgment, certification,
demand or other writing delivered to it hereunder without being required to
determine the authenticity or the correctness of any fact stated therein, the
propriety or validity thereof, or the jurisdiction of a court issuing any such
judgment. Escrow Agent may act in reliance upon (x) any instrument or signature
believed to be genuine and duly authorized, and (y) advice of counsel in
reference to any matter or matters connected therewith.

 

8. In the event of a dispute concerning disposition of the Deposit, the party to
whom the Deposit is finally awarded by a court of competent jurisdiction shall
be entitled to be reimbursed by the other party for its reasonable legal fees
incurred in the dispute.

 

9. Notices given under this Escrow Agreement shall be given to the parties at
the addresses and in the manner set forth in Section 12.7 of the PSA.

 

10. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK. SIGNATURE PAGES FOLLOW.]

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the Post
Closing Escrow Agreement Effective Date

 

SELLER: DIG EH HOTEL LLC, a Delaware limited liability company

By:

 

 

  Name:   Title: PURCHASER: SHR ESSEX HOUSE LLC, a Delaware limited liability
company

By:

 

 

  Name:   Title: ESCROW AGENT: FIRST AMERICAN TITLE INSURANCE COMPANY

By:

 

 

  Name:   Title:

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

EXHIBIT 8.2(a)

FORM OF DEED

DEED

THIS DEED, made the 7th day of September 2012, between DIG EH HOTEL LLC, a
Delaware limited liability company, having an office at c/o Silverpeak Real
Estate Partners, 1330 Avenue of the Americas, Suite 1200, New York, New York
10019 (the “Grantor”) and SHR ESSEX HOUSE LLC, a Delaware limited liability
company (the “Grantee”), having an address at c/o Strategic Hotels & Resorts,
Inc., 200 W. Madison Street, Suite 1700, Chicago, Illinois 60606.

WITNESSETH:

WHEREAS, on the 27th day of July, 1974, Essex House Condominium Corporation, a
Delaware corporation (“EHCC”), a predecessor in interest to Sponsor, executed a
Declaration establishing a plan of condominium ownership to be known as the
Essex House Condominium (herein so-called) covering premises located at 160
Central Park South, New York, New York, which was recorded in the Office of the
Register of the City of New York, County of New York (the “Register’s Office”)
on the 27th day of September, 1974, in Reel 325 at page 479 (the “Original
Declaration”); and

WHEREAS, on the 8th day of December, 1975, EHCC executed a First Supplemental
Declaration, which was recorded in the Register’s Office on the 5th day of
February, 1976, in Reel 361 at page 1526 (the “First Supplement”); and

WHEREAS, on the 6th day of December, 1977, EHCC executed a Second Supplemental
Declaration, which was recorded in the Register’s Office on the 3rd day of
February, 1978, in Reel 427 at page 1455 (the “Second Supplement”); and

WHEREAS, on the 18th day of December, 1980, EHCC executed a Third Supplemental
Declaration, which was recorded in the Register’s Office on the 5th day of
February, 1981, in Reel 553 at page 1758 (the “Third Supplement”); and

WHEREAS, on the 18th day of December, 1980, EHCC executed a Fourth Supplemental
Declaration, which was recorded in the Register’s Office on the 5th day of
February, 1981, in Reel 553 at page 1762 (the “Fourth Supplement”); and

WHEREAS, on the 12th day of June, 1981, EHCC executed a Fifth Supplemental
Declaration, which was recorded in the Register’s Office on the 10th day of
July, 1981, in Reel 573 at page 1461 (the “Fifth Supplement”); and

WHEREAS, on the 3rd day of September, 1981, EHCC executed a Sixth Supplemental
Declaration, which was recorded in the Register’s Office on the 23rd day of
September, 1981, in Reel 584 at page 8 (the “Sixth Supplement”); and

WHEREAS, on the 9th day of November, 1981, EHCC executed a Seventh Supplemental
Declaration, which was recorded in the Register’s Office on the 24th day of
November, 1981, in Reel 592 at page 1861 (the “Seventh Supplement”); and

WHEREAS, on the 29th day of January, 1982, EHCC executed an Eighth Supplemental
Declaration, which was recorded in the Register’s Office on the 8th day of
February, 1982, in Reel 605 at page 910 (the “Eighth Supplement”); and

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

WHEREAS, on the 19th day of April, 1984, EHCC executed a Ninth Supplemental
Declaration, which was recorded in the Register’s Office on the 21st day of
August, 1984, in Reel 825 at page 1228 (the “Ninth Supplement”); and

WHEREAS, on the 22nd day of October, 1984, EHCC executed a Tenth Supplemental
Declaration, which was recorded in the Register’s Office on the 15th day of
November, 1984, in Reel 848 at page 201 (the “Tenth Supplement”); and

WHEREAS, on the 13th day of September, 1985, EHCC executed an Eleventh
Supplemental Declaration, which was recorded in the Register’s Office on the
30th day of October, 1985, in Reel 978 at page 825 (the “Eleventh Supplement”);
and

WHEREAS, on the 31st day of October, 1985, EHCC executed a Twelfth Supplemental
Declaration, which was recorded in the Register’s Office on the 31st day of
October, 1985 in Reel 979 at page 1083 (the “Twelfth Supplement”); and

WHEREAS, on the 28th day of December, 1994, the Essex House Condominium executed
a Thirteenth Supplemental Declaration, which was recorded in the Register’s
Office on the 13th day of January, 1995 in Reel 2173 at page 2096; and

WHEREAS, on the 31st day of March, 1995, the Essex House Condominium executed an
Amended and Restated Fourteenth Supplemental Declaration, which was recorded in
the Register’s Office on the 14th day of July, 1995 in Reel 2224 at page 1329
(the “Amended and Restated Fourteenth Supplement”) (the Original Declaration
through and including the Amended and Restated Fourteenth Supplement, and as
further amended through the Corrective Seventeenth Supplement, is hereinafter
referred to as the “Amended and Restated Declaration”); and

WHEREAS, on the 25th day of February 25, 2003, the Fifteenth Supplemental
Declaration dated December 6, 2002 was recorded in the Register’s Office in City
Register File No. (CRFN) 2003000026521 (the “Fifteenth Supplement”); and

WHEREAS, on the 5th day of January, 2007, the Sixteenth Supplemental Declaration
dated November 20, 2006 was recorded in the Register’s Office in City Register
File No. (CRFN) 2007000010782 (the “Sixteenth Supplement”); and

WHEREAS, on the 3rd day of June, 2009, the Seventeenth Supplemental Declaration
dated April 7, 2009 was recorded in the Register’s Office in City Register File
No. (CRFN) 2009000166673 (the “Seventeenth Supplement”); and

WHEREAS, on the 19th day of August, 2009, the Correction to Seventeenth
Supplemental Declaration was recorded in the Register’s Office in City Register
File No. (CRFN) 2009000261899 (the “Corrective Seventeenth Supplement”).

That the Grantor, in consideration of Ten and 00/100 ($10.00) Dollars and other
good and valuable consideration paid by the Grantee, does hereby grant and
release unto the Grantee, the heirs or successors and assigns of the Grantee,
forever:

The units described on Schedule 1 attached hereto (collectively, the “Units”) in
the Amended and Restated Declaration, together with the furnishings, fixtures,
and appliances therein in their existing condition, in the building (the
“Building”) known as the Essex House and by the street number 160 Central Park
South, Borough of Manhattan, City, County and State of New York and the land on
which it is erected (the “Property”), made under the Condominium Act of the
State of New York (Article 9-B of the Real Property Law of the State of New
York) and designated as the Tax Lot Nos. described on Schedule 1 attached hereto
in Block No. 1011 of the Borough of Manhattan on the Tax Map of the Land Records
Division of the City of New York and on the floor plans of the Building
certified by Brennan Beer Gorman/Architects and filed in the Register’s Office
as Condominium Plan No.

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

11G as the same is amended, restated, or supplemented at any time. The land on
which the Building is located is described as follows:

Beginning at a point on the southerly side of Central Park South (formerly known
as 59th Street), distance 100 feet easterly from the corner formed by the
intersection of the easterly side of Seventh Avenue with the southerly side of
Central Park South; running thence southerly and parallel with Seventh Avenue,
200 feet 10 inches to the northerly side of 58th Street; thence easterly, along
the northerly side of 58th Street, 206 feet 4 inches; thence northerly and again
parallel with Seventh Avenue, 200 feet 10 inches to the southerly side of
Central Park South; thence westerly along the southerly side of Central Park
South, 206 feet 4 inches to the point or place of BEGINNING.

TOGETHER with the buildings, structures, fixtures and other improvements
situated upon or being part of the Property;

TOGETHER with an undivided interest in the common elements of the Property as
more particularly set forth on Schedule 1 attached hereto (the “Common
Elements”);

TOGETHER with an easement for the continuance of all encroachments by the unit
on any adjoining Units or Common Elements now existing as a result of
construction of the Building, or which may come into existence hereafter as a
result of settling or shifting of the Building, or as a result of repair or
restoration of the Building or of the Units after damage or destruction by fire
or other casualty, or after a taking in condemnation or eminent domain
proceedings, or by reason of an alteration to the Common Elements, so that any
such encroachments may remain so long as the Building shall stand;

TOGETHER with an easement in common with the owners of other units to use any
pipes, wires, ducts, cables, conduits, public utility lines, and other Common
Elements located in any of the other units or elsewhere on the Property, and
serving the Units;

TOGETHER with the appurtenances and all the estate and rights of the Grantor in
and to the Units;

TOGETHER with and subject to all easements of necessity in favor of the Units or
in favor of other units or the Common Elements;

TOGETHER with an easement for the exclusive use of any terrace to which the
Units have sole access;

TOGETHER with an easement, which easement shall constitute one of the Common
Elements, for ingress and egress over and upon the hotel facilities areas
included within the commercial unit to be retained by Grantor.

SUBJECT to easements in favor of adjoining units and in favor of the Common
Elements for the continuance of all encroachments of such adjoining units or
Common Elements on the Units now existing as a result of construction of the
Building, or which may come into existence hereafter as a result of settling or
shifting of the Building, or as a result of repair or restoration of the
Building or of any adjoining unit or of the Common Elements after damage or
destruction by fire or other casualty, or after a taking in condemnation or
eminent domain proceedings, or by reason of an alteration to the Common
Elements, so that any such encroachments may remain so long as the Building
shall stand;

SUBJECT also to an easement in favor of the other units to use the pipes, wires,
ducts, conduits, cables, public utility lines and other Common Elements located
in the Units or elsewhere on the Property and serving such other units;

SUBJECT also to easements in favor of any unit having sole access to a terrace,
for the exclusive use of such terrace;

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

SUBJECT also to the provisions of the Amended and Restated Declaration and of
the By-Laws, as amended, of the Essex House Condominium recorded simultaneously
with and as part of the Amended and Restated Declaration, as the same may be
further amended from time to time by instruments recorded in the Register’s
Office, which provisions, together with any amendments thereto, shall constitute
covenants running with the land and shall bind any person having at any time any
interest or estate in the Units, as though such provisions were recited and
stipulated at length herein;

SUBJECT also to those matters listed on Schedule B attached hereto;

TO HAVE AND TO HOLD the same unto the Grantee, the heirs or successors and
assigns of the Grantee, forever.

The use for which the Units is intended is for accommodation or dwelling
purposes by the Grantee, Grantee’s family, guests, tenants, or employees, or as
part of a full-service transient hotel operation.

The Grantor, in compliance with Section 13 of the Lien Law of the State of New
York, covenants that the Grantor will receive the consideration for this
conveyance and will hold the right to receive such consideration as a trust fund
for the purpose of paying the cost of the improvement and will apply the same
first to the payment of the cost of the improvement before using any part of the
same for any other purposes.

The Grantor also covenants that it has not done or suffered anything whereby the
Units have been encumbered in any way whatsoever.

The Grantee accepts and ratifies the provisions of the Amended and Restated
Declaration and the By-Laws and the Rules and Regulations of the Essex House
Condominium recorded simultaneously with and as part of the Amended and Restated
Declaration and agrees to comply with all the terms and provisions thereof as
the same may be amended from time to time by instruments recorded in the
Register’s Office.

The terms “Grantor” and “Grantee” shall be read as “Grantors” and “Grantees”
whenever the sense of this deed so requires.

[remainder of page intentionally left blank]

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

IN WITNESS WHEREOF, the Grantor and the Grantee have duly executed this deed the
day and year first above written.

 

GRANTOR: DIG EH HOTEL LLC, a Delaware limited liability company By:  

 

  Name:   Title: GRANTEE:

SHR ESSEX HOUSE LLC, a Delaware limited liability

company

By:  

 

  Name:   Title:

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

STATE OF NEW YORK   )   )

COUNTY OF NEW YORK

  )

On the             day of                     in the year 2012, before me, the
undersigned, personally appeared                     , personally known to me or
proved to me on the basis of satisfactory evidence to be the individual whose
name is subscribed to the within instrument and acknowledged to me that he
executed the same in his capacity, and that by his signature on the instrument,
the individual, or the person upon behalf of which the individual acted,
executed the instrument.

 

 

Notary Public

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

STATE OF NEW YORK   )   )

COUNTY OF NEW YORK

  )

On the             day of                     in the year 2012, before me, the
undersigned, personally appeared                     , personally known to me or
proved to me on the basis of satisfactory evidence to be the individual whose
name is subscribed to the within instrument and acknowledged to me that he
executed the same in his capacity, and that by his signature on the instrument,
the individual, or the person upon behalf of which the individual acted,
executed the instrument.

 

 

Notary Public

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

SCHEDULE 11

DESCRIPTION OF UNITS

 

Unit No.

   Tax Lot No.    Percentage Interest in the  Common
Elements

HOTEL UNIT

   1001    [            ]%

COMMERCIAL UNIT

   2001    [            ]%

RESIDENTIAL UNIT: 2001

   1610    [            ]%

RESIDENTIAL UNIT: 1720

   2025    [            ]%

RESIDENTIAL UNIT: 1826

   2032    [            ]%

RESIDENTIAL UNIT: 1910

   2035    [            ]%

RESIDENTIAL UNIT: 1912

   2036    [            ]%

RESIDENTIAL UNIT: 1915

   2037    [            ]%

RESIDENTIAL UNIT: 26TR

   2038    [            ]%

RESIDENTIAL UNIT: 3005

   2042    [            ]%

RESIDENTIAL UNIT: 3214

   2043    [            ]%

 

1 

Subject to confirmation by title company.

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

SCHEDULE B

PERMITTED ENCUMBRANCES

[TO BE COMPLETED IN ACCORDANCE WITH SECTION 3.2 OF THE AGREEMENT]

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

EXHIBIT 8.2(b)

FORM OF BILL OF SALE AND GENERAL ASSIGNMENT

BILL OF SALE AND GENERAL ASSIGNMENT

This BILL OF SALE AND GENERAL ASSIGNMENT (this “Assignment”) is made as of this
7th day of September 2012 from DIG EH HOTEL LLC, a Delaware limited liability
company, having an office at c/o Silverpeak Real Estate Partners, 1330 Avenue of
the Americas, Suite 1200, New York, New York 10019 (“Seller”) to and for the
benefit of SHR ESSEX HOUSE LLC, a Delaware limited liability company, having an
address at c/o Strategic Hotels & Resorts, Inc., 200 W. Madison Street, Suite
1700, Chicago, Illinois 60606 (“Purchaser”).

WHEREAS, in connection with the conveyance of the condominium unit commonly
known as The Essex House Hotel described on Exhibit A attached hereto (the “Real
Property”), Seller hereby conveys, transfers, sets over and assigns to Purchaser
all of Seller’s right, title and interest in and to all (i) furniture,
equipment, machinery, inventories, supplies, signs and other tangible personal
property of every kind and nature owned by Seller whether located at the Real
Property or off-site (collectively, the “Personal Property”); (ii) intangible
assets of any nature relating to the Real Property or improvements located
thereon (the “Improvements”), including, without limitation, all of Seller’s
right, title and interest, if any, in and to all (a) warranties and guaranties
relating to the Personal Property and the Improvements, (b) all licenses,
permits, development rights, and approvals relating to the Real Property and the
Improvements and (c) all plans and specifications relating to the Real Property
and the Improvements that are in Seller’s possession, in each case to the extent
that Seller is entitled to transfer or assign the same (collectively, the
“Intangible Property”); and (iii) all service, supply, and equipment rental
contracts affecting or executed in connection with the Real Property and the
Improvements and to the extent that Seller is entitled to assign them. Seller
represents and warrants to Purchaser that Seller has not pledged, hypothecated
or collaterally assigned any of the Personal Property, Intangible Property or
Property Contracts and has not granted any lien, security interest or other
encumbrance on any of the Personal Property, except in each case for pledges,
hypothecations, collateral assignments and liens that will be released
contemporaneous with this Assignment.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, Seller does hereby sell, deliver, transfer,
set-over and assign unto Purchaser the Personal Property in its “AS IS”
condition without express or implied warranty of any kind or nature except as
expressly set forth in that certain Purchase and Sale Agreement between Seller
and Purchaser dated August             , 2012 (the “Purchase Agreement”), to
have and to hold the same unto Purchaser and Purchaser’s successors and assigns,
forever.

Seller hereby agrees to indemnify, defend and save harmless Purchaser, its
successors and assigns from and against all costs, expenses and liabilities of
the owner/lessor under the Property Contracts first arising or accruing through
the day immediately preceding the Closing Date, and Purchaser hereby agrees to
indemnify and hold Seller, its successors and assigns harmless against all
costs, expenses and liabilities of Seller under the Property Contracts arising
with respect to the period from and including the Closing Date. This Assignment
is made without recourse to Seller except as expressly set forth in the Purchase
Agreement.

By its execution of this Assignment, Purchaser hereby accepts the assignment of
the Property Contracts and assumes and agrees to perform timely and discharge
all of Seller’s obligations, covenants, and agreements under the Property
Contracts accruing from and after the date hereof.

This Assignment shall be governed by the laws of the State of New York.

All terms of this Assignment shall be binding upon, inure to the benefit of and
be enforceable by the parties hereto and their respective legal representatives,
successors and assigns.

No modification, waiver, amendment, discharge, change or termination of this
Assignment shall be valid unless the same is in writing and signed by the party
against which the enforcement of such modification, waiver, amendment,
discharge, change or termination is or may be sought.

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

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

IN WITNESS WHEREOF, Purchaser and Seller have duly executed this Assignment as
of the date first above written.

 

SELLER: DIG EH HOTEL LLC, a Delaware limited liability company By:  

 

  Name:   Title: PURCHASER:

SHR ESSEX HOUSE LLC, a Delaware limited liability

company

By:  

 

  Name:   Title:

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

Exhibit A

Property Description

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

EXHIBIT 8.2(c)

FORM OF ASSIGNMENT AND ASSUMPTION OF LEASES

ASSIGNMENT AND ASSUMPTION OF LEASES

THIS ASSIGNMENT AND ASSUMPTION OF LEASES (this “Assignment”) is made as of this
7th day of September 2012 (the “Effective Date”), from DIG EH HOTEL LLC, a
Delaware limited liability company, having an office at c/o Silverpeak Real
Estate Partners, 1330 Avenue of the Americas, Suite 1200, New York, New York
10019 (“Assignor”) to and for the benefit of SHR ESSEX HOUSE LLC, a Delaware
limited liability company, having an address at c/o Strategic Hotels & Resorts,
Inc., 200 W. Madison Street, Suite 1700, Chicago, Illinois 60606 (“Assignee”).

R E C I T A L S

1. Assignor is the owner of the condominium units in the building commonly known
as the Jumeirah Essex House located at 160 Central Park South, New York, New
York and more particularly described on Exhibit A attached hereto (together with
the buildings, structures, fixtures and other improvements situated thereon or
being part thereof, the “Property”).

2. Concurrently with this Assignment, Assignor is conveying the Property to
Assignee in accordance with that certain Purchase and Sale Agreement between
Assignor and Assignee dated as of August             , 2012 (the “Purchase
Agreement”; each capitalized term used herein without definition has the meaning
ascribed to such term in the Purchase Agreement).

3. Assignor is party to that certain (i) Lease of Commercial Premises, dated
June 1, 2012, between Assignor, as lessor, and Danielli Fine Jewelry, as lessee
(together with all amendments, modifications, supplements, extensions and
related agreements, if any, thereto, the “Jewelry Lease”), and (ii) lease (the
“Gift Shop Lease”; the Jewelry Lease and the Gift Shop Lease, collectively , the
“Leases” and individually a “Lease”) to Abeer Corporation.

A G R E E M E N T

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, Assignor hereby transfers, sets over and
assigns to Assignee all of Assignor’s right, title and interest in, to and under
the Leases, including, without limitation, the right to receive payments due and
to become due thereunder from and after the Effective Date and all rights of
Assignor in and to the Tenant Deposits.

Assignor represents and warrants that it is the owner of each Lease free and
clear of any claims and has not granted any lien, security interest or other
encumbrance on its interest in any Lease, except for liens, security interests
and other encumbrances that will be released contemporaneous with this
Assignment.

Assignor hereby agrees to indemnify, defend and save harmless Assignee, its
successors and assigns from and against all costs, expenses and liabilities of
the lessor under each Lease arising with respect to the period before and
through the day immediately preceding the Closing Date, and Assignee hereby
agrees to indemnify, defend and hold Assignor, its successors and assigns
harmless against all costs, expenses and liabilities of the lessor under each
Lease arising with respect to the period from and including the Closing Date. It
is expressly agreed that Assignor shall not be responsible to the lessee under
any Lease for the discharge and performance of any and all duties and
obligations hereafter accruing and to be performed and/or discharged by the
lessor thereunder from and after the Effective Date, including, without
limitation, any duty or obligation to return the Tenant Deposits to lessee.

By its execution of this Assignment, Assignee hereby accepts the assignment of
the Leases and assumes and agrees to perform all of Assignor’s obligations,
covenants, and agreements under the Leases accruing from and after the Effective
Date.

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

This Assignment shall be governed by the laws of the State of New York.

Except as expressly set forth in the Assignment or as expressly set forth in
Purchase Agreement, Assignor makes no representation or warranty in connection
with this Assignment and this Assignment is made without recourse to Assignor.

All terms of this Assignment shall be binding upon, inure to the benefit of and
be enforceable by the parties hereto and their respective legal representatives,
successors and assigns.

No modification, waiver, amendment, discharge, change or termination of this
Assignment shall be valid unless the same is in writing and signed by the party
against which the enforcement of such modification, waiver, amendment,
discharge, change or termination is or may be sought.

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

IN WITNESS WHEREOF, Assignor and Assignee have duly executed this Assignment as
of the Effective Date.

 

ASSIGNOR: DIG EH HOTEL LLC, a Delaware limited liability company By:  

 

  Name:   Title: ASSIGNEE:
SHR ESSEX HOUSE LLC, a Delaware limited liability company By:  

 

  Name:   Title:

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

Exhibit A

Property Description

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

EXHIBIT 8.2(d)

FORM OF ASSIGNMENT OF BOOKINGS AND BOOKING DEPOSITS

ASSIGNMENT OF BOOKINGS AND BOOKING DEPOSITS

THIS ASSIGNMENT OF BOOKINGS AND BOOKING DEPOSITS (this “Assignment”) is made as
of this 7th day of September 2012, from DIG EH HOTEL LLC, a Delaware limited
liability company, having an office at c/o Silverpeak Real Estate Partners, 1330
Avenue of the Americas, Suite 1200, New York, New York 10019 (“Assignor”) to and
for the benefit of SHR ESSEX HOUSE LLC, a Delaware limited liability company,
having an address at c/o Strategic Hotels & Resorts, Inc., 200 W. Madison
Street, Suite 1700, Chicago, Illinois 60606 (“Assignee”).

R E C I T A L S

1. Assignor is the owner of the condominium unit commonly known as The Essex
House Hotel located at 160 Central Park South, New York, New York, more
particularly described in Exhibit A attached hereto and incorporated herein (the
“Property”).

2. Assignor has on the date hereof (the “Closing Date”) delivered a deed to the
Property to Assignee pursuant to a certain Purchase and Sale Agreement between
Assignor and Assignee dated as of August             , 2012 (the “Purchase
Agreement”).

3. For good and valuable consideration, Assignor has agreed to transfer and
assign to Assignee all of Assignor’s right, title and interest, if any, in and
to any commitments or reservations for the use of any guest rooms, banquet
facilities, convention facilities or meeting rooms in the Hotel-Related Units
(as defined in the Purchase Agreement) scheduled to occur on or after the date
hereof (the “Bookings”), together will all deposits, if any, under the Bookings
(the “Booking Deposits”).

NOW, THEREFORE, Assignor hereby transfers, sets over and assigns to Assignee as
additional consideration with respect to the Purchase Agreement, all right,
title and interest of Assignor in and to the Bookings, without limitation, the
right to receive payments due and to become due thereunder after the Closing
Date and any of Assignor’s rights in the Booking Deposits, if any, but subject
to the terms of the Purchase Agreement which survive such assignment and the
conveyance of the Property to Assignee.

Assignor represents and warrants that it is the owner of the Bookings free and
clear of any claims except valid claims, if any, of the guests to the return of
the Bookings Deposits; and

Assignor hereby agrees to indemnify, defend and save harmless Assignee, its
successors and assigns from and against all costs, expenses and liabilities
regarding the Bookings arising with respect to the period before and through the
day immediately preceding the Closing Date, and Assignee hereby agrees to
indemnify, defend and hold Assignor, its successors and assigns harmless against
all costs, expenses and liabilities regarding the Bookings arising with respect
to the period from and including the Closing Date. It is expressly agreed that
Assignor shall not be responsible to the guests under the Bookings for the
discharge and performance of any and all duties and obligations hereafter
accruing and to be performed and/or discharged by the hotel from and after the
date hereof, including, without limitation, Assignee’s duty and obligation to
return the Booking Deposits to guests.

By its execution of this Assignment, Assignee hereby accepts the assignment of
the Bookings and assumes and agrees to perform timely and discharge all of
Assignor’s obligations, covenants, and agreements under the Bookings accruing
from and after the date hereof.

This Assignment shall be governed by the laws of the State of New York.

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

Except as expressly set forth in this Assignment or as expressly set forth in
the Purchase Agreement, Assignor makes no representation or warranty in
connection with this Assignment and this Assignment is made without recourse to
Assignor.

All terms of this Assignment shall be binding upon, inure to the benefit of and
be enforceable by the parties hereto and their respective legal representatives,
successors and assigns.

No modification, waiver, amendment, discharge, change or termination of this
Assignment shall be valid unless the same is in writing and signed by the party
against which the enforcement of such modification, waiver, amendment,
discharge, change or termination is or may be sought.

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

IN WITNESS WHEREOF, Assignor and Assignee have duly executed this Assignment as
of the date first above written.

 

ASSIGNOR: DIG EH HOTEL LLC, a Delaware limited liability company By:  

 

  Name:   Title: ASSIGNEE:
SHR ESSEX HOUSE LLC, a Delaware limited liability company By:  

 

  Name:   Title:

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

Exhibit A

Property Description

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

EXHIBIT 8.2(e)

FORM OF ASSIGNMENT OF INTELLECTUAL PROPERTY

In the United States Patent and Trademark Office

Trademark Assignment Agreement

WHEREAS, DIG EH Hotel LLC, a Delaware limited liability company, with offices at
160 Central Park South, c/o Essex House Hotel, New York, New York 10019
(“ASSIGNOR”) owns the trademark ESSEX HOUSE for hotel services (the “MARK”) and
U.S. Registration No. 1750657 for the MARK (the “REGISTRATION”); and

WHEREAS, SHR ESSEX HOUSE LLC, a Delaware limited liability company, having an
address at c/o Strategic Hotels & Resorts, Inc., 200 W. Madison Street, Suite
1700, Chicago, Illinois 60606 (“ASSIGNEE”), desires to acquire all of the right,
title and interest of ASSIGNOR in, to and under the MARK, together with the
goodwill associated therewith;

WHEREAS, ASSIGNOR and ASSIGNEE have entered into a certain Purchase and Sale
Agreement dated August             , 2012, assigning, among other things, all
right, title and interest in and to the MARK and in and to the REGISTRATION from
ASSIGNOR to ASSIGNEE;

NOW, THEREFORE, in consideration of the sum of One Dollar ($1.00) and other good
and valuable consideration paid by ASSIGNEE to ASSIGNOR, the receipt and
sufficiency of which hereby is acknowledged, ASSIGNOR does hereby sell, assign,
transfer and convey unto ASSIGNEE its entire right, title and interest in and to
the MARK, and to the REGISTRATION, including without limitation, all related
common law rights, together with the goodwill appurtenant thereto, all rights of
action resulting from prior infringement or other unauthorized use of the MARK,
and all rights in any adversarial proceedings.

ASSIGNOR agrees (a) not to use or apply to register any trade name, domain name,
trademark or service mark which is the same as or confusingly similar to the
MARK anywhere in the world, (b) not to challenge ASSIGNEE’s use of or future
application or registration of the MARK or the existing REGISTRATION; and (c) to
timely execute all necessary documents to give effect to this Assignment.

IN WITNESS WHEREOF, ASSIGNOR has caused this Assignment to be duly executed by
an authorized officer on this             day of             , 2012.

 

DIG EH HOTEL LLC, a Delaware limited liability company
By:                                                                       
                                       Name:                             
                                                                           
Title:                                                                      
                                    

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

EXHIBIT 8.2(g)

FORM OF NOTICE TO VENDORS

DIG EH HOTEL LLC

c/o Silverpeak Real Estate Partners

1330 Avenue of the Americas, Suite 1200

New York, New York 10019

                    , 2012

CERTIFIED MAIL

 

 

 

 

Ladies and Gentlemen:

You are hereby informed that, as of the date hereof, DIG EH Hotel LLC sold the
Essex House, and has assigned its interest as a party under the agreement
between it, or its predecessor, and you, or your predecessor, regarding certain
services, maintenance or licenses, as applicable, provided for the benefit of
the Essex House, in each case to:

SHR ESSEX HOUSE LLC (the “Buyer”)

c/o Strategic Hotels & Resorts, Inc.

200 W. Madison Street, Suite 1700

Chicago, Illinois 60606

From and after the date hereof, you are instructed to deliver all invoices and
notices under such agreement to the Buyer at the Essex House to the attention of
the general manager, with a copy to the address set forth above to the attention
of the general counsel .

 

Very truly yours,

 

DIG EH HOTEL LLC, a Delaware limited liability

company

By:                                                                     
                           Name:                           
                                                              
Title:                                                                     
                       

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

EXHIBIT 8.2(i)

FORM OF FIRPTA CERTIFICATE

FIRPTA CERTIFICATE

This Certificate of Non-Foreign Status (this “Certificate”) is made as of the
            day of             , 2012, by DIG HOSPITALITY SERVICES INC., a
Delaware corporation (the “Transferor”).

This Certificate is made pursuant to Section 1445 of the Internal Revenue Code,
which provides that a transferee of a U.S. real property interest must withhold
tax if the transferor is a foreign person. For U.S. tax purposes (including
Section 1445), the owner of a disregarded entity (which has title to a U.S. real
property interest under local law) will be the transferor of the property and
not the disregarded entity. To inform the transferee that withholding of tax is
not required on the disposition of a U.S. real property interest by the
Transferor, the undersigned hereby certifies the following on behalf of the
Transferor:

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

2. the Transferor is not a disregarded entity, as defined in Income Tax
Regulations Section 1.1445-2(b)(2)(iii);

3. the Transferor’s U.S. employer identification number is 32-0153-239; and

4. the Transferor’s office address is:

c/o Silverpeak Real Estate Partners

1330 Avenue of the Americas, Suite 1200

New York, New York 10019

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

Under penalties of perjury, I declare that I have examined this Certificate and,
to the best of my knowledge and belief, it is true, correct, and complete, and I
further declare that I have authority to sign this document on behalf of the
Transferor.

 

 

Name:

Title:

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

EXHIBIT 8.2(k)

FORM OF SELLER’S AFFIDAVIT TO TITLE COMPANY

SELLER’S AFFIDAVIT TO TITLE COMPANY

AFFIDAVIT

 

STATE OF NEW YORK    )    ) ss: COUNTY OF NEW YORK    )

 

 

                    , being the                     of DIG EH Hotel LLC, a
Delaware limited liability company (“DIG EH”), and solely in such capacity as
authorized signatory of DIG EH, in consideration of                     (the
“Title Company”) issuing its title insurance policy (the “Title Policy”)
insuring an interest in the real estate described on Schedule A annexed to such
Title Policy (the “Premises”), and being first duly sworn on oath, deposes and
states to the best of my knowledge as follows:

1. That the only tenants occupying the Premises are the tenants under (i) that
certain Lease of Commercial Premises, dated June 1, 2012, between DIG EH, as
lessor, and Danielli Fine Jewelry, as lessee, and (ii) the lease to Abeer
Corporation.

2. That no inspection fees, permit fees, elevator, sign or boiler fees, or other
charges have been levied, charged, created or incurred against the Premises,
that may become a tax or other lien pursuant to Section 26-128 (formerly
Section 643a-14.0) of the Administrative Code of the City of New York, as
amended by Local Laws 10 of 1981 and 25 of 1984, and Section 27-4029.1 of the
Administrative Code of the City of New York, as amended by L.L. 43, 1988 or any
other section of the Law.

3. That no work has been done upon the Premises by the City of New York nor has
any demand been made by the City of New York for any such work that may result
in charges by the New York City Department of Emergency Services or charges by
the New York City Department of Environmental Protection for water tap closings
or any related work.

 

DIG EH HOTEL LLC By:                                     

Sworn to before me this

        day of             , 2012.

  

(Notary Public)

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

EXHIBIT 8.2(r)

FORM OF CONDOMINIUM ESTOPPEL

THE ESSEX HOTEL CONDOMINIUM

            , 2012

SHR ESSEX HOUSE LLC

c/o Strategic Hotels & Resorts, Inc.

200 W. Madison Street, Suite 1700

Chicago, Illinois 60606

 

Re: Purchase and Sale Agreement between DIG EH Hotel LLC, as seller (“Seller”),
and SHR Essex House LLC, as purchaser (“Purchaser”), dated as of August
            , 2012 (the “Purchase Agreement”).

Ladies and Gentlemen:

The Board of Managers of the Essex House Condominium (the “Condominium Board”)
is writing this letter to you at your request with respect to certain matters
concerning the Essex House Condominium and hereby certifies the following:

1. Attached hereto as Exhibit A is a true, complete and correct copy of (i) the
Amended and Restated Declaration establishing a plan for condominium ownership
of the premises known as the Essex House Condominium and located at 160 Central
Park South, in the Borough of Manhattan, City, County and State of New York,
pursuant to the Condominium Act of the State of New York (Article 9-B of the
Real Property Law of the State of New York) dated March 31, 1995 and recorded in
the Office of the City Register, New York County, on July 14, 1995 in Reel 2224
at page 1329, as amended (the “Declaration”) and (ii) the Amended and Restated
By-Laws of the Essex House Condominium, as amended (together with the
Declaration, the “Condominium Documents”). The Condominium Documents are in full
force and effect and have not been amended or supplemented, except as set forth
on Exhibit B annexed hereto. Any terms not otherwise defined herein shall have
the meaning ascribed thereto in the Condominium Documents.

2. To the best of the Condominium Board’s knowledge, the Seller is not in
default under the Condominium Documents.

3. Upon the resignation of Richard Siegler, Herbert Teitelbaum and Chris Mander
in accordance with the Purchase Agreement, Purchaser shall have the immediate
right to appoint three replacements to the Condominium Board.

4. To the best knowledge of the Condominium Board, there are no common charges
due and owing by the Seller with respect to the condominium units more
particularly described on Exhibit C annexed hereto (the “Units”).

5. Pursuant to the terms of the Condominium Documents, the Condominium Board has
no right of first refusal with respect to the sale of the Units from Seller to
Purchaser.

The Condominium Board acknowledges that you will rely on this letter in making
the purchase referenced above. This letter and the information contained herein
shall be for the benefit of you and your successors and assigns, and for the
benefit of your lenders and their respective successors and assigns.

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

The undersigned is a duly appointed agent of the Condominium Board, is the
incumbent in the office indicated under his name, and is duly authorized to
execute this Condominium Board Estoppel Certificate.

 

Very truly yours, THE BOARD OF MANAGERS OF THE ESSEX HOUSE CONDOMINIUM By:  

 

  Name:   Title:

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

EXHIBIT A

Copy of Amended and Restated Declaration and By-Laws

[see attached]

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

EXHIBIT B

Amendments to the Amended and Restated Declaration and By-Laws

 

1. The Fifteenth Supplemental Declaration which was recorded in the Office of
the Register of the City of New York on the 25th day of February, 2003 as City
Register File Number (“CRFN”) 2003000026521 (the “Fifteenth Supplement”); and

 

2. The Sixteenth Supplemental Declaration which was recorded in the Office of
the Register of the City of New York on the 5th day of January, 2007 as City
Register File Number (“CRFN”) 2007000010782 (the “Sixteenth Supplement”); and

 

3. The Seventeenth Supplemental Declaration which was recorded in the Office of
the Register of the City of New York on the 3rd day of June. 2009 as City
Register File Number (“CRFN”) 2009000166673 (the “Seventeenth Supplement”); and

 

4. The Correction to Seventeenth Supplemental Declaration which was recorded in
the Office of the Register of the City of New York on the 19th day of August,
2009 as City Register File Number (“CRFN”) 2009000261899.

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

EXHIBIT C

UNITS

 

Unit

   Tax Lot

Hotel Unit

   1001

Commercial Unit

   2001

Residential Units: 2001, 1720, 1826, 1910, 1912, 1915, 26TR, 3005 and 3214

   1610, 2025, 2032, 2035, 2036,
2037, 2038, 2042, 2043

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

EXHIBIT 8.2(w)

FORM OF ASSIGNMENT AND ASSUMPTION OF CONDOMINIUM DECLARATION

ASSIGNMENT AND ASSUMPTION OF CONDOMINIUM DECLARATION

THIS ASSIGNMENT AND ASSUMPTION OF CONDOMINIUM DECLARATION (this “Assignment”) is
made as of this     day of             , 2012, from DIG EH HOTEL LLC, a Delaware
limited liability company, having an office at c/o Silverpeak Real Estate
Partners, 1330 Avenue of the Americas, Suite 1200, New York, New York 10019
(“Assignor”) to and for the benefit of SHR ESSEX HOUSE LLC, a Delaware limited
liability company, having an address at c/o Strategic Hotels & Resorts, Inc.,
200 W. Madison Street, Suite 1700, Chicago, Illinois 60606 (“Assignee”).

R E C I T A L S

WHEREAS, Assignor is the owner of the condominium units in the building commonly
known as the Jumeirah Essex House located at 160 Central Park South, New York,
New York and more particularly described on Exhibit A attached hereto (together
with the buildings, structures, fixtures and other improvements situated thereon
or being part thereof, the “Property”);

WHEREAS, concurrently with this Assignment, Assignor is conveying the Property
to Assignee in accordance with that certain Purchase and Sale Agreement between
Assignor and Assignee dated as of August             , 2012 (the “Purchase
Agreement”; each capitalized term used herein without definition has the meaning
ascribed to such term in the Purchase Agreement); and

WHEREAS, Assignor is the sponsor under the Declaration and the by-laws and any
other exhibits or schedules annexed thereto establishing a plan of condominium
ownership known as the Essex House Condominium covering the premises located at
160 Central Park South, New York, New York, which was recorded in the Office of
the Register of the City of New York, County of New York on the 27th day of
September, 1974, in Reel 325 at Page 479, as amended by those supplemental
declarations more particularly described on Exhibit A annexed hereto.
(collectively, the “Declaration”).

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, Assignor hereby transfers, sets over and
assigns to Assignee all of Assignor’s rights and privileges, if any (the
“Assignor’s Rights”) arising under the Declaration.

By its execution of this Assignment, Assignee hereby accepts the assignment of
the Assignor’s Rights and assumes and agrees to perform all of the Assignor’s
Rights from and after the Effective Date.

Assignee hereby agrees to indemnify, defend and hold Assignor, its successors
and assigns harmless against all costs, expenses and liabilities of Assignor
first arising from and after the Effective Date. It is expressly agreed that
Assignor shall not be responsible for the discharge and performance of any of
the Assignor’s Rights to be performed and/or discharged from and after the
Effective Date.

This Assignment shall be governed by the laws of the State of New York.

Except as expressly set forth in the Purchase Agreement, Assignor makes no
representation or warranty in connection with this Assignment and this
Assignment is made without recourse to Assignor.

All terms of this Assignment shall be binding upon, inure to the benefit of and
be enforceable by the parties hereto and their respective legal representatives,
successors and assigns.

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

No modification, waiver, amendment, discharge, change or termination of this
Assignment shall be valid unless the same is in writing and signed by the party
against which the enforcement of such modification, waiver, amendment,
discharge, change or termination is or may be sought.

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

[remainder of page intentionally left blank]

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

IN WITNESS WHEREOF, Assignor and Assignee have duly executed this Assignment as
of the Effective Date.

 

ASSIGNOR: DIG EH HOTEL LLC, a Delaware limited liability company By:  

 

  Name:   Title: ASSIGNEE:

SHR ESSEX HOUSE LLC, a Delaware limited liability

company

By:  

 

  Name:   Title:

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

Exhibit A

SCHEDULE OF AMENDMENTS TO CONDOMINIUM DECLARATION

 

1. The First Supplemental Declaration which was recorded in the Office of the
Register of the City of New York on the 5th day of February, 1976, in Reel 361
at page 1526 (the “First Supplement”) and

 

2. The Second Supplemental Declaration, which was recorded in the Office of the
Register of the City of New York on the 3rd day of February, 1978; in Reel 427
at page 1455 (the “Second Supplement”); and

 

3. The Third Supplemental Declaration, which was recorded in the Office of the
Register of the City of New York on the 5th day of February, 1981, in Reel 553
at page 1758 (the “Third Supplement”); and

 

4. The Fourth Supplemental Declaration, which was recorded in the Office of the
Register of the City of New York on the 5th day of February, 1981, in Reel 553
at page 1762 (the “Fourth Supplement”); and

 

5. The Fifth Supplemental Declaration, which was recorded in the Office of the
Register of the City of New York on the 10th day of July, 1981, in Reel 573 at
page 1461 (the “Fifth Supplement”); and

 

6. The Sixth Supplemental Declaration, which was recorded in the Office of the
Register of the City of New York on the 23rd day of September, 1981, in Reel 584
at page 8 (the “Sixth Supplement”); and

 

7. The Seventh Supplemental Declaration, which was recorded in the Office of the
Register of the City of New York on the 24th day of November, 1981, in Reel 592
at page 1861 (the “Seventh Supplement”); and

 

8. The Eighth Supplemental Declaration, which was recorded in the Office of the
Register of the City of New York on the 8th day of February, 1982, in Reel 605
at page 910 (the “Eighth Supplement”); and

 

9. The Ninth Supplemental Declaration, which was recorded in the Office of the
Register of the City of New York on the 21st day of August, 1984, in Reel 825 at
page 1228 (the “Ninth Supplement”); and

 

10. The Tenth Supplemental Declaration, which was recorded in the Office of the
Register of the City of New York on the 15th day of November, 1984, in Reel 848
at page 201 (the “Tenth Supplement”); and

 

11. The Eleventh Supplemental Declaration, which was recorded in the Office of
the Register of the City of New York on the 30th day of October, 1985, in Reel
978 at page 825 (the “Eleventh Supplement”); and

 

12. The Twelfth Supplemental Declaration which was recorded in the Office of the
Register of the City of New York on the 31st day of October, 1985 in Reel 979 at
page 1083 (the “Twelfth Supplement”); and

 

13. The Thirteenth Supplemental Declaration which was recorded in the Office of
the Register of the City of New York on the 13th day of January, 1995 in Reel
2173 at page 2096 (the “Thirteenth Supplement”); and

 

14. The Amended and Restated Declaration (the “Amended and Restated
Declaration”) and the Fourteenth Supplemental Declaration, which was recorded in
the Office of the Register of the City of New York on the 14th day of July, 1995
in Reel 2224 at page 1329; the First Supplement through and including the
Fourteenth Supplemental Declaration being hereafter collectively referred to as
the “Supplements”; and

 

15. The Fifteenth Supplemental Declaration which was recorded in the Office of
the Register of the City of New York on the 25th day of February, 2003 as City
Register File Number (“CRFN”) 2003000026521 (the “Fifteenth Supplement”); and

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

16. The Sixteenth Supplemental Declaration which was recorded in the Office of
the Register of the City of New York on the 5th day of January, 2007 as City
Register File Number (“CRFN”) 2007000010782 (the “Sixteenth Supplement”); and

 

17. The Seventeenth Supplemental Declaration which was recorded in the Office of
the Register of the City of New York on the 3rd day of June, 2009 as City
Register File Number (“CRFN”) 2009000166673 (the “Seventeenth Supplement”); and

 

18. The Correction to Seventeenth Supplemental Declaration which was recorded in
the Office of the Register of the City of New York on the 19th day of August,
2009 as City Register File Number (“CRFN”) 2009000261899.

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

EXHIBIT 8.3(c)

ASSUMPTION AGREEMENT

Agreement made as of this    day of                    2012, by and between SHR
ESSEX HOUSE LLC and [MANAGER/ OPERATOR NAME, IF DIFFERENT] its managing agent,
on their own behalf and on behalf of any affiliated or related entity and any
current or future owner, manager or operator, and their respective successors or
assigns (collectively, “Purchaser”), and the NEW YORK HOTEL AND MOTEL TRADES
COUNCIL, AFL-CIO (“Union”).

Whereas, Purchaser has agreed to purchase the Essex House (“Hotel”) from the
current owner, DIG EH Hotel LLC (“Seller”);

Whereas, the Seller is bound to, inter alia, Article 59 of a collective
bargaining agreement known as the Industry Wide Agreement between the Union and
the Hotel Association of New York City, Inc. known as the Industry Wide
Collective Bargaining Agreement (“IWA”);

Whereas, Article 59 of the IWA requires successors, assigns and transferees
(“successor”) to be bound to the IWA;

Whereas, the Purchaser agrees that it is a successor to the obligations under
the IWA;

Now, therefore it is agreed:

1. Purchaser agrees that it shall retain all current bargaining unit employees,
whose employment will continue uninterrupted and without loss of seniority,
compensation, benefits or fringe benefits, and with no adverse effect on other
terms and conditions of employment, subject to the IWA and applicable law.

2. Purchaser agrees that, effective as of the date of the closing, it has
assumed, adopted and is bound by all of the terms, both economic and
non-economic, of the IWA and those agreements and practices supplementing the
IWA.

3. By virtue of the closing, Purchaser acknowledges that no new verification of
currently valid I-9 forms will be necessary.

4. Effective immediately any and all disputes between the parties or regarding
the interpretation or application of this Agreement shall be subject to the
grievance arbitration provisions of the IWA, the entirety of which is
incorporated herein by reference.

 

FOR THE UNION By:  

 

  Name:   Title: Authorized to Sign

Dated:

 

FOR THE PURCHASER (on behalf of each owner, operator and manager) By:  

 

  Name:   Title: Authorized to Sign

Dated:

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

EXHIBIT 8.8

FORM OF NOTICE TO TENANT

DIG EH HOTEL LLC

c/o Silverpeak Real Estate Partners

1330 Avenue of the Americas, Suite 1200

New York, New York 10019

                    , 2012

CERTIFIED MAIL

 

 

  

 

  

 

  

Ladies and Gentlemen:

You are hereby informed that, as of the date hereof, DIG EH HOTEL LLC sold the
Essex House, and has assigned its interest as lessor under the lease between it,
or its predecessor, and you, or your predecessor, covering certain space in the
said Essex House, in each case to:

SHR ESSEX HOUSE LLC (the “Buyer”)

c/o Strategic Hotels & Resorts, Inc.

200 W. Madison Street, Suite 1700

Chicago, Illinois 60606

The security deposit, if any, held by the undersigned under your lease (be it in
cash or letter of credit or a combination of the two) has been turned over to
the Buyer.

You will be receiving a separate notice from the Buyer concerning future
payments due under your lease, new notice addresses and other matters.

 

Very truly yours, DIG EH HOTEL LLC, a Delaware limited liability company
By:                                                                       
                                             Name:                             
                                                                               
Title: