Exhibit 10.5
PURCHASE AND SALE AGREEMENT
BETWEEN
615 2ND AVENUE SOUTH – MINNEAPOLIS LLC,
AS SELLER
AND
GATOR OWNER LLC,
AS PURCHASER
DATED: May 27, 2010

 

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TABLE OF CONTENTS

              Page No.
ARTICLE 1 BASIC INFORMATION
    1  
1.1 Certain Basic Terms
    1  
1.2 Closing Costs
    2  
1.3 Notice Addresses
    3  
ARTICLE 2 PROPERTY
    3  
2.1 Property
    3  
2.2 Excluded Property
    5  
2.3 Assumed Liabilities
    5  
ARTICLE 3 DEPOSIT
    5  
3.1 Deposit
    5  
3.2 Purchase Price
    7  
ARTICLE 4 DUE DILIGENCE
    7  
4.1 Due Diligence Materials To Be Delivered
    7  
4.2 Due Diligence Materials To Be Made Available
    8  
4.3 Physical Due Diligence
    9  
4.4 Estoppels
    10  
4.5 Conditions Precedent; Notice of Satisfaction
    10  
4.6 Return of Documents and Reports
    11  
4.7 No Representation or Warranty by Seller
    11  
4.8 Purchaser’s Responsibilities
    12  
4.9 Purchaser’s Agreement to Indemnify
    12  
ARTICLE 5 TITLE AND SURVEY
    12  
5.1 Title Commitment
    12  
5.2 Survey
    13  
5.3 Title Review
    13  
5.4 Delivery of Title Policy at Closing
    14  
ARTICLE 6 ADDITIONAL AGREEMENTS
    14  
6.1 Casualty
    14  
6.2 Condemnation
    14  
6.3 New Contracts
    14  
6.4 Existing Service Contracts
    14  
6.5 Leasing
    15  
6.6 Liquor License and Liquor Inventory
    15  
6.7 Current Operations; Communications
    15  
6.8 Continuing Books and Records Access
    16  
ARTICLE 7 CLOSING
    16  
7.1 Closing
    16  
7.2 Conditions to Parties’ Obligation to Close
    16  
7.3 Seller’s Deliveries in Escrow
    18  
7.4 Purchaser’s Deliveries in Escrow
    19  
7.5 Closing Statements
    20  

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              Page No.
7.6 Possession
    20  
7.7 Safety Deposit Boxes
    20  
7.8 Baggage
    21  
7.9 Employees
    21  
7.10 Existing Reservations
    22  
7.11 Notice to Tenants
    22  
ARTICLE 8 CLOSING COSTS, PRORATIONS, AND ADJUSTMENTS
    22  
8.1 Closing Costs
    22  
8.2 Adjustments
    23  
8.3 Real Estate Taxes
    23  
8.4 Utilities
    24  
8.5 Income/Charges
    24  
8.6 Accounts Receivable
    24  
8.7 Accounts
    24  
8.8 Room Rentals
    24  
8.9 Tenant Receivables
    24  
8.10 Food, Beverage and Other Sales
    25  
8.11 Conference Revenues
    25  
8.12 Advance Deposits
    26  
8.13 Income and Other Taxes
    26  
8.14 Employees
    26  
8.15 Accounts Payable
    26  
8.16 Inventory
    27  
8.17 Gift Certificates
    27  
8.18 Closing Statement
    27  
ARTICLE 9 REPRESENTATIONS AND WARRANTIES
    27  
9.1 Seller’s Representations and Warranties
    27  
9.2 Purchaser’s Representations and Warranties
    29  
9.3 Survival of Representations and Warranties
    30  
9.4 Holdback Escrow
    30  
ARTICLE 10 DEFAULT AND REMEDIES
    31  
10.1 Seller’s Remedies
    31  
10.2 Purchaser’s Remedies
    32  
10.3 Attorneys’ Fees
    32  
10.4 Other Expenses
    32  
ARTICLE 11 DISCLAIMERS, RELEASE AND INDEMNITY
    32  
11.1 Disclaimers By Seller
    32  
11.2 Sale “As Is, Where Is”
    33  
11.3 Seller Released from Liability
    34  
11.4 “Hazardous Materials” Defined
    34  
11.5 Release and Waiver
    35  
11.6 Indemnity
    35  
11.7 Survival
    35  
11.8 Acknowledgement
    35  

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              Page No.
ARTICLE 12 MISCELLANEOUS
    35  
12.1 Parties Bound; Assignment
    35  
12.2 Headings
    36  
12.3 Invalidity and Waiver
    36  
12.4 Governing Law
    36  
12.5 Survival
    36  
12.6 Entirety and Amendments
    36  
12.7 Time
    36  
12.8 Confidentiality
    36  
12.9 No Electronic Transactions
    37  
12.10 Notices
    37  
12.11 Construction
    37  
12.12 Calculation of Time Periods; Business Day
    37  
12.13 Execution in Counterparts
    38  
12.14 Recordation
    38  
12.15 Further Assurances
    38  
12.16 Discharge of Obligations
    38  
12.17 ERISA
    38  
12.18 Third Party Beneficiary
    38  
12.19 Reporting Person
    39  
12.20 Severability
    39  
12.21 Commissions
    39  
12.22 Minnesota Provisions
    39  
12.23 Non-Disparagement
    39  

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PURCHASE AND SALE AGREEMENT
The Grand Hotel, Minneapolis, MN
     This Purchase and Sale Agreement (this “Agreement”) is made and entered
into by and between Purchaser and Seller.
RECITALS
     A. Defined terms are indicated by initial capital letters. Defined terms
shall have the meaning set forth herein, whether or not such terms are used
before or after the definitions are set forth.
     B. 679 East Third Street Investors Company, a Minnesota corporation (“679
Company”), Columbia Park Business Center Corporation, a Minnesota corporation
(“Columbia Park”), and Purchaser previously entered into a Purchase and Sale
Agreement dated as of May 24, 2010 (the “679/Columbia PSA”), pursuant to which
679 Company and Columbia Park agreed to sell to Purchaser, and Purchaser agreed
to purchase, the Property, upon the terms and conditions set forth therein.
     C. Subsequently to the execution of the 679/Columbia PSA, 679 Company and
Columbia Park conveyed all of their respective right, title and interest in and
to the Property to Seller, and the 679/Columbia PSA has been terminated.
     D. Purchaser now desires to purchase the Property and Seller desires to
sell the Property, all upon the terms and conditions set forth in this
Agreement.
     NOW, THEREFORE, in consideration of the mutual terms, provisions, covenants
and agreements set forth herein, as well as the sums to be paid by Purchaser to
Seller, and for other good and valuable consideration, the receipt and
sufficiency of which are acknowledged, Purchaser and Seller agree as follows:
ARTICLE 1
BASIC INFORMATION
     1.1 Certain Basic Terms. The following defined terms shall have the
meanings set forth below:
          1.1.1 Seller: 615 2nd Avenue South – Minneapolis LLC, a Delaware
limited liability company.
          1.1.2 Purchaser: Gator Owner LLC, a Delaware limited liability
company.
          1.1.3 Purchase Price: $36,000,000 plus the sum of the Closing Costs
described in Section 1.2, subject to any adjustments and prorations provided for
herein.

 

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          1.1.4 Deposit: $500,000 (the “Initial Deposit”), including interest
thereon, to be deposited in accordance with Section 3.1 below, to be increased
by $1,300,000 (the “Additional Deposit”) to $1,800,000, plus interest thereon,
to be deposited in accordance with Section 3.1 below. The Initial Deposit and
the Additional Deposit, and the interest thereon, are collectively defined
herein as the “Deposit”.

     
          1.1.5 Title Company:
  Chicago Title Insurance Company
 
  171 North Clark Street
 
  Chicago, IL 60601
 
   
          1.1.6 Escrow Agent:
  Chicago Title Insurance Company
 
  171 North Clark Street
 
  Chicago, IL 60601
 
   
          1.1.7 Effective Date:
  May 27, 2010.
 
   
          1.1.8 Broker:
  Jones Lang LaSalle Hotels.

          1.1.9 Inspection Period: The period beginning on the Effective Date
and ending at 5:00 p.m. CDT on June 30, 2010.
          1.1.10 Closing Date: The date which is ten (10) calendar days after
the expiration of the Inspection Period, as the Closing Date may be extended
pursuant to Section 7.2.5 below.
     1.2 Closing Costs. “Closing Costs” shall be allocated and paid as follows:

      Cost   Responsible Party
Cost of Title Commitment
  Seller
 
   
Premium for Title Policy, including extended coverage
  Purchaser 1/2
Seller 1/2
 
   
Premium for all endorsements to Title Policy (excluding extended coverage)
  Purchaser
 
   
Costs of Survey and/or any revisions, modifications or recertifications thereto
  Purchaser
 
   
Costs for UCC Searches
  Purchaser
 
   
Recording Fees
  Purchaser
 
   
Any deed taxes, documentary stamps or transfer taxes
  Seller
 
   
Any sales tax relating to personal property, if any
  Purchaser
 
   
Any mortgage taxes or similar taxes
  Purchaser
 
   
Any escrow fee charged by Escrow Agent for holding the Deposit or conducting the
Closing
  Purchaser 1/2
Seller 1/2

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     1.3 Notice Addresses:

     
          Purchaser:
  Gator Owner LLC
 
  c/o Pebblebrook Hotels Trust
 
  2 Bethesda Metro Center, Suite 1530
 
  Bethesda, Maryland 20184
 
  Attention: Thomas C. Fisher
 
  Facsimile: 240-396-5763
 
  E-mail: tfisher@pebblebrookhotels.com
 
   
          With a copy to:
  Honigman Miller Schwartz and Cohn LLP
 
  38500 Woodward Avenue, Suite 100
 
  Bloomfield Hills, Michigan 48304-5048
 
  Attention: J. Adam Rothstein, Esq.
 
  Facsimile: 248-566-8479
 
  E-mail: arothstein@honigman.com
 
   
          Seller:
  iStar Financial Inc.
 
  180 Glastonbury Blvd., Suite 201
 
  Glastonbury, Connecticut 06033
 
  Attention: Cynthia Tucker
 
  Facsimile: 860-815-5901
 
  E-mail: ctucker@istarfinancial.com
 
   
          With a copy to:
  Katten Muchin Rosenman LLP
 
  525 West Monroe Street
 
  Chicago, Illinois 60661
 
  Attention: David P. Cohen, Esq.
 
  Facsimile: 312-577-8751
 
  E-mail: david.cohen@kattenlaw.com

ARTICLE 2
PROPERTY
     2.1 Property. Subject to the terms and conditions of this Agreement, Seller
agrees to sell to Purchaser, and Purchaser agrees to purchase from Seller, the
following property (collectively, the “Property”):
          2.1.1 Real Property. The land described in Exhibit A hereto (the
“Land”), together with (a) all improvements located thereon, but expressly
excluding improvements and structures owned by any tenant or other third party
(“Improvements”), (b) without warranty, all right, title and interest of Seller,
if any, in and to the rights, benefits, privileges, easements, tenements,
hereditaments, and appurtenances thereon or in anywise appertaining thereto, and
(c) without warranty, all right, title, and interest of Seller, if any, in and
to all strips and gores and any land lying in the bed of any street, road or
alley, open or proposed, adjoining the Land (collectively, the “Real Property”).
The Real Property includes a hotel (the “Hotel”).

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          2.1.2 Leases. All of Seller’s right, title and interest, in all leases
of the Real Property (collectively, the “Leases”), including leases which may be
made by Seller after the Effective Date and prior to Closing as permitted by
this Agreement, but excluding that certain Lease of Hotel Space dated as of
November 16, 1999 by and between 679 Company, as landlord, and Columbia Park, as
tenant, as assigned by 679 Company to Seller and as assigned by Columbia Park to
Seller (the “Hotel Lease”).
          2.1.3 Tangible Personal Property. All of Seller’s right, title and
interest, without warranty, except as set forth in Section 9.1.10, in the
equipment, machinery, furniture, furnishings and fixtures, including all china,
glassware, silverware, linens, uniforms, works of art, computers, computer
equipment and manuals and, to the extent assignable, computer software, programs
and databases, Operating Statements (as hereinafter defined) and other tangible
personal property, if any, owned by Seller and now or hereafter located in or
used in connection with the operation, ownership or management of the Real
Property (collectively, the “FFE”), supplies and inventory, including materials
and supplies used or intended for use but not for sale in connection with the
operation of the Hotel, all fuel stored on site, all inventory, if any, held for
sale in the Hotel’s gift shop or other retail outlets owned by Seller, and,
subject to Section 7.3.2 hereof, all merchandise, food and beverages held for
sale in connection with the operation of the Hotel to the extent owned by Seller
(collectively, “Supplies and Inventory”, and collectively with the FFE, the
“Tangible Personal Property”). However, notwithstanding the foregoing, the
Tangible Personal Property specifically excludes (collectively, the “Excluded
Tangible Personal Property”): (i) any items of personal property owned or leased
by The Wirth Companies and located in the portion of the Improvements occupied
by The Wirth Companies; (ii) any items of personal property owned or leased by
tenants under Leases and located in the portion of the Improvements leased by
such tenants under their Leases; and (iii) any items of personal property owned
by third parties and leased to Seller. The Tangible Personal Property includes,
without limitation, the items set forth on Schedule 2.1.3 attached hereto. The
Supplies and Inventory shall be subject to depletion, resupply, substitution,
replacement and disposition in the ordinary course of business such that the
Supplies and Inventory to be conveyed at Closing shall be such Supplies and
Inventory that exists as of the Closing Date, subject to the terms of Section
7.2.4 below.
          2.1.4 Intangible Personal Property. All of Seller’s right, title and
interest, if any, without warranty, except as set forth in Section 9.1.10, and
only to the extent assignable, in all intangible personal property related to
the Real Property and the Improvements, including, without limitation (i) all
trade names and trade marks associated with the Real Property and the
Improvements, and any sales and marketing materials relating to the Property;
(ii) all websites and domain names associated with the Hotel; (iii) contract
rights related to the operation, ownership or management of the Real Property,
including maintenance, service, construction, supply and equipment rental
contracts, if any, but not including Leases (collectively, the “Service
Contracts”) (but only to the extent assignable without cost to Seller and
Seller’s obligations thereunder are expressly assumed by Purchaser pursuant to
this Agreement); (iv) warranties (to the extent assignable without cost to
Seller); (v) governmental permits, approvals and licenses, if any (to the extent
assignable without cost to Seller); and (vi) telephone exchange numbers (to the
extent assignable without cost to Seller) all of the items described in this
Section 2.1.4 collectively referred to as the “Intangible Personal Property”).
Tangible Personal Property and Intangible Personal Property shall not include
(a) any appraisals or other economic

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evaluations of, or projections with respect to, all or any portion of the
Property, including, without limitation, budgets prepared by or on behalf of
Seller or any affiliate of Seller, (b) any documents, materials or information
which are subject to attorney/client, work product or similar privilege, which
constitute attorney communications with respect to the Property and/or Seller,
or which are subject to a confidentiality agreement, and (c) any trade name,
mark or other identifying material that includes the name “iStar” or any
derivative thereof.
     2.2 Excluded Property. Notwithstanding anything to the contrary in this
Article 2, the following items are expressly excluded from the Property: (i) all
cash on hand or on deposit (including without limitation funds contained in any
“house banks”) in connection with the Hotel, and any funds in any operating
account or other account or reserve created or maintained by Seller, Lender or
The Wirth Companies, a Minnesota corporation (“The Wirth Companies”); (ii) the
Excluded Tangible Personal Property; (iii) any intangible property owned by The
Wirth Companies or its employees; and (iv) any fixtures, personal property or
intellectual property owned by (A) any supplier, vendor, or licensor, or (B) any
guests or customers of the Hotel.
     2.3 Assumed Liabilities. At Closing, Purchaser shall assume all liability,
obligation, damage, loss, diminution in value, cost or expense of any kind or
nature whatsoever, whether accrued or unaccrued, actual or contingent, known or
unknown, foreseen or unforeseen (collectively, the “Liabilities”), arising from,
relating to, or otherwise in connection with the Property to the extent either
(a) arising on or after the Closing Date or (b) for which Purchaser receives a
credit to the Purchase Price. Purchaser shall indemnify and hold harmless Seller
and Lender and each of their respective shareholders, members, consultants,
representatives, officers, employees and affiliates (collectively, the
“Seller-Lender Indemnified Parties”) from any and all claims, liens, costs,
causes of action, damages, expenses, losses or other liabilities, including,
without limitation, reasonable attorneys’ fees (collectively, the “Indemnified
Claims”), arising out of Purchaser’s failure to pay or discharge the Liabilities
assumed by Purchaser as set forth above. Seller shall retain all Liabilities
arising from, relating to, or otherwise in connection with the Property to the
extent arising prior to the Closing Date other than such Liabilities for which
Purchaser receives a credit to the Purchase Price. Seller shall indemnify and
hold harmless Purchaser and its shareholders, members, consultants,
representatives, officers, employees and affiliates (collectively, the
“Purchaser Indemnified Parties”) from any and all Indemnified Claims arising out
of Seller’s failure to pay or discharge the Liabilities retained by Seller as
set forth above. The parties’ rights and obligations under this Section 2.3
shall survive the Closing.
ARTICLE 3
DEPOSIT
     3.1 Deposit.
          3.1.1 Deposit and Investment. Within two (2) Business Days after the
Effective Date, Purchaser shall deposit with Escrow Agent the Initial Deposit
and deliver a completed, executed Form W-9 to Escrow Agent and Seller. If
Purchaser timely delivers a Notice of Satisfaction (defined below), Purchaser
shall, no later than two (2) Business Days after the last day of the Inspection
Period, deposit with Escrow Agent the Additional Deposit. Escrow Agent shall
hold the Deposit in accordance with this Agreement. Upon written direction from
Purchaser, Escrow Agent shall invest the Deposit as set forth in such written
direction. In the

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absence of any such written direction to invest the Deposit, the parties hereto
agree that Escrow Agent shall be under no duty to invest or reinvest the Deposit
and that Escrow Agent may commingle the Deposit with other deposits or with
Escrow Agent’s own funds in the manner provided for the administration of funds
under Section 2-8 of the Corporate Fiduciary Act. The Deposit shall be in the
form of a wire transfer to Escrow Agent of immediately available U.S. federal
funds. If Purchaser fails to deposit the Initial Deposit within two (2) Business
Days after the Effective Date, Seller may, until the same is so deposited,
terminate this Agreement by written notice to Purchaser and Escrow Agent, in
which event the parties hereto shall have no further rights or obligations
hereunder, except for rights and obligations which, by their terms, survive the
termination hereof.
          3.1.2 Disposition of Deposit. If Purchaser elects to terminate this
Agreement prior to the expiration of the Inspection Period by delivering a Due
Diligence Termination Notice pursuant to Section 4.5.2 or if this Agreement is
deemed terminated on account of Purchaser’s failure to timely deliver a Notice
of Satisfaction in accordance with Section 4.5.2, Escrow Agent shall pay the
entire Deposit to Purchaser on or before the second (2nd) Business Day following
the earlier to occur of (i) Escrow Agent’s receipt of the Due Diligence
Termination Notice from Purchaser or (ii) written notice from Purchaser to
Seller and Escrow Agent stating that Purchaser has elected to terminate the
Agreement. From and after the date on which Purchaser shall deliver to Seller
and Escrow Agent a Notice of Satisfaction, the Deposit shall be non-refundable
to Purchaser, except in the event of a termination of this Agreement due to
(v) a Material Adverse Change (defined below) in accordance with the terms of
Section 7.2.4, (w) failure of Seller to deliver the Estoppels (defined below) in
accordance with the terms of Section 7.2.5, (x) a casualty in accordance with
the terms of Section 6.1, (y) a condemnation in accordance with the terms of
Section 6.2 or (z) a default by Seller beyond the applicable notice and cure
period under Section 10.2, and, in the event of any such termination, the
Deposit shall be handled as set forth in such Sections 7.2.4, 6.1, 6.2 or 10.2,
as applicable. In the event that Closing shall occur, the Deposit shall be
applied to the Purchase Price at Closing. In the event of a termination of this
Agreement by either Seller or Purchaser in accordance with this Agreement after
the Inspection Period, Escrow Agent is authorized and is hereby directed to
deliver the Deposit to the party hereto entitled to same pursuant to the terms
hereof on or before the second (2nd) Business Day following written demand from
such party entitled thereto, such written demand to be sent to Escrow Agent and
the other party hereto in accordance with the notice provisions of Section
12.10. In the event that Escrow Agent incurs any attorneys’ fees and costs in
connection with a dispute between Purchaser and Seller hereunder, such costs
shall be paid by the non-prevailing party in such dispute.
          3.1.3 Escrow Provisions. In the event Escrow Agent is required to
invest the Deposit hereunder, Escrow Agent shall not be held responsible for any
loss of principal or interest which may be incurred as a result of making such
investment or redeeming such investment in accordance herewith. Purchaser and
Seller authorize Escrow Agent to accept, comply with and obey any writs, orders,
judgments or decrees entered or issued by any court with jurisdiction, and
Escrow Agent shall not be liable to Purchaser or Seller or any other person by
reason of such compliance, notwithstanding that such writ, order, judgment or
decree be subsequently reversed, modified, annulled, set aside or vacated. If
Escrow Agent is made a party defendant to any suit or proceedings regarding the
escrow of the Deposit, Purchaser and Seller agree to pay Escrow Agent, upon
written demand, all reasonable costs, attorney’s fees, and

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expenses incurred with respect to such suit or proceeding, except to the extent
arising from Escrow Agent’s gross negligence, willful misconduct or breach of
this Agreement.
     3.2 Purchase Price. Purchaser shall pay the purchase price set forth in
Section 1.1.3 hereinabove (the “Purchase Price”) in immediately available funds
at Closing. Purchaser and Seller shall, on or before the expiration of the
Inspection Period, agree in good faith upon an allocation of the Purchase Price
as among the Real Property, the Tangible Personal Property and the Intangible
Personal Property for federal, state and local tax purposes. Purchaser and
Seller agree to report the federal, state and local income and other tax
consequences of the transactions contemplated by this Agreement and in
particular, to report the information required by Section 1060(b) of the
Internal Revenue Code of 1986, as amended (the “Code”), and to file all tax
returns and related tax documents, in a manner consistent with such allocation,
and neither Purchaser nor Seller shall take any position inconsistent with such
agreed upon allocation of the Purchase Price in any tax return or otherwise. The
provisions of this Section 3.2 shall survive the Closing.
ARTICLE 4
DUE DILIGENCE
     4.1 Due Diligence Materials To Be Delivered. Seller has delivered, or
caused to be delivered, or promptly after the Effective Date shall deliver, or
cause to be delivered, to Purchaser the following (the “Property Information”):
          4.1.1 Rent Roll. The rent roll for the Property set forth on Exhibit H
attached hereto (“Rent Roll”);
          4.1.2 Financial Information. Copies of operating statements and a
summary of capital expenditures pertaining to the Property for the three most
recent fiscal years preceding the Effective Date and any interim period between
the end of the most recently completed fiscal year and the calendar month
immediately preceding the Effective Date, or such lesser period as Seller has
owned the Property (“Operating Statements”), to the extent in Seller’s
possession;
          4.1.3 Environmental Reports. (i) A copy of that certain Report of
Phase I Environmental Site Assessment, dated July 22, 2009, prepared by
Bradburne, Briller & Johnson, LLC, with respect to the Property, and (ii) a copy
of any environmental report related to the Property prepared for the benefit of
Lender in connection with the making of Lender’s initial loan with respect to
the Property;
          4.1.4 Tax Statements. A copy of ad valorem tax statements relating to
the Property for the three years preceding the Effective Date and correspondence
relating to any tax appeals filed relating to that period;
          4.1.5 Lender’s Bank Statements. Copies of Lender’s bank statements
with respect to reserve accounts and collection accounts in the name of, or for
the benefit of, Lender with respect to funds exclusively related to the
Property, for the period from and after cash began to be deposited in such
accounts until the Effective Date;

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          4.1.6 Title and Survey. A copy of Lender’s most current title
insurance policy and a copy of Seller’s most current title insurance policy (or,
if a final policy has not yet been issued to Seller, Seller’s pro forma policy,
with delivery of a copy of Seller’s final policy to follow upon receipt of same
by Seller) and survey, if any, of the Property; and
          4.1.7 Service Contracts. A list, together with copies, of the Service
Contracts.
     Except for the Rent Roll contemplated in Section 4.1.1, Seller’s
obligations to deliver the items listed in this Section 4.1 shall be limited to
the extent such items are in the possession of Seller and to the extent Seller
is legally or contractually permitted to provide such items.
     4.2 Due Diligence Materials To Be Made Available. To the extent such items
are in Seller’s possession, Seller shall make available to Purchaser for
Purchaser’s review during the Inspection Period, at the Property, the following
items and information (the “Additional Property Information”), and Purchaser at
its expense shall have the right to make copies of same:
          4.2.1 Financial Information. Copies of the general ledger for the
Property for the year to date period and the immediately preceding three year
period and copies of utilities bills for the most recent three year period with
respect to the utilities supplied to the Property;
          4.2.2 Lease Files. Copies of the lease files for all tenants,
including the Leases, amendments, guaranties, any letter agreements and
assignments which are then in effect (“Lease Files”);
          4.2.3 Equipment Leases. A schedule of all equipment leases and
licenses (“Equipment Leases and Licenses”), together with copies of all of the
same;
          4.2.4 Licenses, Permits and Certificates of Occupancy. Copies of all
licenses, permits and certificates of occupancy relating to the Property;
          4.2.5 Property Insurance. Copies of certificates evidencing existing
insurance coverage relating to the Property, and copies of all correspondence
relating to insurance claims made within the three year period preceding the
Effective Date, if any;
          4.2.6 Reservations Schedule. A schedule of all reservations for rooms,
conference, banquet, or meeting space or any other facilities that shall occur
in whole or in part on or after the Cutoff Time (defined below), such schedule
to include a listing of all deposits taken and prices quoted;
          4.2.7 Schedule of Employees. A schedule (“Schedule of Employees”) of
all employees of the Hotel, their terms of employment, wages, benefits and
accrued vacation and sick days; and any and all collective bargaining agreements
and employment contracts with such employees.
In addition to the foregoing, during the Inspection Period, to the extent such
items are available to Seller, Seller shall make all of its documents, books,
records and other information related to the Property that are not of a
proprietary nature, however stored or maintained, available to

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Purchaser for Purchaser’s review at the Property during normal business hours
upon reasonable prior written notice. Furthermore, if and to the extent any
items required to be delivered or made available by Seller to Purchaser under
Sections 4.1 or 4.2 above are reasonably susceptible to being transmitted by
Seller via email, Seller shall, upon Purchaser’s written request (which may be
via email), transmit such items to Purchaser via email.
     4.3 Physical Due Diligence. Commencing on the Effective Date and continuing
until the Closing, subject to the terms of any Leases and guests of the Hotel,
Purchaser and its contractors, agents, consultants and representatives shall
have reasonable access to the Property at all reasonable times during normal
business hours, upon appropriate notice to tenants and Hotel guests as permitted
or required under the Leases or any applicable occupancy agreements, for the
purpose of conducting, at Purchaser’s sole cost and expense, tests, studies and
investigations, including surveys and architectural, engineering, geotechnical
and environmental inspections and tests, provided that (a) Purchaser must give
Seller at least one (1) Business Day’s prior written notice delivered via e-mail
of any such tests, studies or investigations, and with respect to any intrusive
test, study or investigation (e.g., core sampling) must obtain Seller’s prior
written consent (which consent may be given, withheld or conditioned in Seller’s
sole discretion), (b) prior to performing any test, study or investigation,
Purchaser must deliver a certificate of insurance to Seller evidencing that
Purchaser and its contractors, agents, consultants and representatives have in
place (and Purchaser and its contractors, agents, consultants and
representatives shall maintain during the pendency of this Agreement)
(1) commercial general liability insurance with limits of at least Two Million
Dollars ($2,000,000) for bodily injury or death and property damage insurance
including coverage for contractual liability and personal and advertising injury
with respect to Purchaser’s obligations hereunder, and (2) workers’ compensation
and employers’ liability insurance with limits of at least $100,000 each
accident, $100,000 each employee and $500,000 policy limit, all covering any
accident arising in connection with the presence of Purchaser, its contractors,
agents and representatives on the Property, which insurance, except for workers’
compensation and employers’ liability, shall (A) name as additional insureds
thereunder Seller and such other parties holding insurable interests as Seller
may designate, and (B) be written by a reputable insurance company having a
rating of at least “A+:VII” by Best’s Rating Guide (or a comparable rating by a
successor rating service), and (C) otherwise be subject to Seller’s prior
approval, and (c) all such tests shall be conducted by Purchaser in compliance
with Purchaser’s responsibilities set forth in Section 4.8 below. Purchaser
shall bear the cost of all such inspections or tests and shall be responsible
for and act as the generator with respect to any wastes generated by those
tests, which obligation shall survive the termination of this Agreement. Subject
to the provisions of Sections 4.8 and 12.8 hereof, Purchaser or Purchaser’s
representatives may communicate with any tenant of the Real Property; provided,
however, Purchaser shall give Seller reasonable prior written notice delivered
via e-mail of Purchaser’s intended communication with any tenant. Subject to the
provisions of Sections 4.8 and 12.8 hereof, Purchaser or Purchaser’s
representatives may communicate with any governmental authority for the sole
purpose of gathering information regarding then current zoning or permit
compliance of the Real Property, the environmental condition of the Real
Property and the Improvements (but only to the extent such communication is
reasonably and customarily required in order for Purchaser’s environmental
consultant to be able to prepare a Phase I environmental site assessment for the
Property) and then current entitlements with respect to the Real Property in
connection with the transaction contemplated by this Agreement; provided,
however, Purchaser must give Seller at least 24 hours’ prior written

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notice delivered via e-mail of Purchaser’s intended communication with any
governmental authority and allow Seller or its representatives the opportunity
participate in such communication if Seller desires. As used in this
Section 4.3, “communicate” and “communication” shall mean the initiation of,
response to, or sharing or exchange of information, knowledge or messages,
whether by oral, written or electronic methods or media, or by any other means.
     4.4 Estoppels. Prior to the expiration of the Inspection Period, Seller
shall request the tenants of the Property to provide estoppel letters
(“Estoppels”) in the forms attached hereto as Exhibits J-1 and J-2, and,
thereafter, Seller shall pursue, in good faith and with due diligence, the
return of the same as duly executed by the applicable tenants; provided,
however, that Seller shall not be obligated to (i) declare a default under any
Leases or (ii) commence a legal action for enforcement of any Leases. Seller
shall deliver to Purchaser the Estoppels it receives back from the tenants
promptly after the same are received by Seller. Notwithstanding anything herein
to the contrary, as long as Seller has timely requested the Estoppels, Seller’s
inability to deliver any Estoppel due to the failure of a tenant to provide an
Estoppel shall not constitute a default hereunder.
     4.5 Conditions Precedent; Notice of Satisfaction.
          4.5.1 The following conditions precedent (collectively, the
“Inspection Period Conditions”) shall be either satisfied or waived by Purchaser
during the Inspection Period (except that Purchaser may elect to designate the
Estoppel Condition as a condition to Closing as set forth in Section 4.5.2
below):
               (1) (a) Purchaser’s satisfaction in its sole and absolute
discretion, with all physical aspects of the Property, including, but not
limited to, its environmental condition, structural condition, the condition of
the roof and the HVAC system and the condition of all parking, drive, walkway
and landscaped areas and off-site improvements, if any, appurtenant thereto, and
(b) Purchaser’s satisfaction, in its sole and absolute discretion, with the
revenue generated or to be generated from the Property and the expenses incurred
and to be incurred in the operation and maintenance of the Property (the
“Physical/Financial Review Condition”);
               (2) Approval by Purchaser’s board of trustees and/or investment
committee of the transaction contemplated hereby (the “Board Approval
Condition”);
               (3) Purchaser’s satisfaction with the state of title to the
Property, in accordance with Article 5 below (the “Title Condition”);
               (4) Seller providing to Purchaser Estoppels from the tenants
under the Leases, in accordance with Section 7.2.5, which Estoppels shall be
dated no earlier than 45 days prior to Closing; (the “Estoppel Condition”); and
               (5) Purchaser shall be satisfied that all governmental
authorities with jurisdiction over the issuance to Purchaser or its designee or
designees of the requisite liquor licenses to be used at the Property will be in
a position at or before Closing to issue such licenses to Purchaser or its
designee or designees (the “Liquor License Condition”).

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          4.5.2 Purchaser shall have the right, on or before the expiration of
the Inspection Period, to notify Seller and Escrow Agent (such notice being a
“Notice of Satisfaction”) of its satisfaction with or waiver of all of the
following: the Physical/Financial Review Condition; the Board Approval
Condition; the Title Condition; and the Liquor License Condition. In addition,
the Notice of Satisfaction shall specify whether, as of the date of such Notice
of Satisfaction, the Estoppel Condition has been satisfied or has been waived by
Purchaser, or, if such condition has not been satisfied or waived, whether
Purchaser elects to designate the Estoppel Condition as a condition to Closing
as set forth in Section 7.2.5. If Purchaser so delivers a Notice of Satisfaction
on or before the expiration of the Inspection Period, this Agreement shall
continue in full force and effect, Purchaser shall be deemed to have waived its
right to terminate this Agreement pursuant to this Section 4.5.2, and such
issuance of the Notice of Satisfaction shall be conclusive evidence that
Purchaser has received or had access to all Property Information and Additional
Property Information (collectively, the “Property Documents”) and conducted all
inspections and tests of the Property that it considers important and that all
of the aforementioned conditions precedent have been satisfied (except the
Estoppel Condition if so specified in the Notice of Satisfaction), and the
Deposit shall become non-refundable to Purchaser except as set forth under
Section 3.1.2. If Purchaser fails to deliver a Notice of Satisfaction to Seller
on or before expiration of the Inspection Period, this Agreement shall
automatically terminate on the last day of the Inspection Period, the Initial
Deposit shall be promptly returned to Purchaser and neither party shall
thereafter have any further liability or obligation hereunder, except for such
liability and obligation expressly set forth herein to survive such termination.
Notwithstanding anything to the contrary in this Agreement, Purchaser may
terminate this Agreement for any reason or no reason prior to the expiration of
the Inspection Period by giving written notice of termination to Seller and
Escrow Agent (the “Due Diligence Termination Notice”) on or before the last day
of the Inspection Period. If Purchaser so delivers a Due Diligence Termination
Notice to Seller on or before expiration of the Inspection Period, this
Agreement shall be deemed terminated, the Initial Deposit shall be promptly
returned to Purchaser and neither party shall thereafter have any further
liability or obligation hereunder, except for such liability and obligation
expressly set forth herein to survive such termination.
     4.6 Return of Documents and Reports. As additional consideration for the
transaction contemplated herein, Purchaser shall provide to Seller, if requested
by Seller, promptly following receipt of same by Purchaser, copies of all
“Reports”. “Reports” mean (a) third-party reports, tests, investigations and
studies that pertain to contamination of, or environmental concerns regarding,
the Property and (b) all other third party reports, investigations and studies,
other than economic analyses in each case under (a) and (b) prepared for
Purchaser in connection with its due diligence review of the Property,
including, without limitation, any and all Reports involving structural or
geological conditions of the Property, if any, at no cost to Seller. The Reports
shall be delivered to Seller without any representation or warranty as to the
completeness or accuracy of the Reports or any other matter relating thereto.
Upon any termination of this Agreement prior to Closing, Purchaser shall
promptly return all Property Documents (and copies thereof) to Seller.
Purchaser’s obligation to deliver the Property Documents and the Reports to
Seller shall survive the termination of this Agreement.
     4.7 No Representation or Warranty by Seller. Purchaser acknowledges that,
except as expressly set forth in this Agreement, (a) Seller has not made and
does not make any warranty or representation regarding the truth, accuracy or
completeness of the Property

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Documents or the source(s) thereof, (b) Seller expressly disclaims any and all
liability for representations or warranties, express or implied, statements of
fact and other matters contained in such information, or for omissions from the
Property Documents, or in any other written or oral communications transmitted
or made available to Purchaser, (c) Purchaser shall rely solely upon its own
investigation with respect to the Property, including, without limitation, the
Property’s physical, environmental or economic condition, compliance or lack of
compliance with any ordinance, order, permit or regulation or any other
attribute or matter relating thereto, and (d) Seller has not undertaken any
independent investigation as to the truth, accuracy or completeness of the
Property Documents and is providing the Property Documents solely as an
accommodation to Purchaser.
     4.8 Purchaser’s Responsibilities. In conducting any inspections,
investigations or tests of the Property and/or Property Documents, Purchaser and
its agents and representatives shall: (a) not disturb the tenants or Hotel
guests or interfere with their use of the Property pursuant to their respective
Leases or occupancy agreements; (b) not interfere with the operation and
maintenance of the Property; (c) not damage any part of the Property or any
personal property owned or held by any tenant or any third party; (d) not injure
or otherwise cause bodily harm to Seller or its agents, guests, invitees,
contractors and employees or any tenants or their agents, guests, invitees,
contractors and employees; (e) comply with all applicable laws; (f) promptly pay
when due the costs of all tests, investigations, and examinations done with
regard to the Property; (g) not permit any liens to attach to the Real Property
by reason of the exercise of its rights hereunder; (h) repair any damage to the
Real Property resulting directly or indirectly from any such inspection or
tests; and (i) not reveal or disclose prior to Closing any information obtained
during the Inspection Period concerning the Property and the Property
Information to anyone other than as set forth in Section 12.8 below, in
accordance with the confidentiality standards set forth in Section 12.8 below.
Purchaser’s obligations under this Section 4.8 shall survive the termination of
this Agreement.
     4.9 Purchaser’s Agreement to Indemnify. Purchaser hereby agrees to
indemnify, defend and hold harmless the Seller-Lender Indemnified Parties from
and against any and all Indemnified Claims arising out of Purchaser’s
inspections or tests (whether performed by Purchaser or its contractors,
consultants or representatives) permitted under this Agreement or any violation
of the provisions of Sections 4.3 and 4.8; provided, however, the indemnity
shall not extend to protect Seller from any pre-existing liabilities for matters
merely discovered by Purchaser (i.e., latent environmental contamination) so
long as Purchaser’s actions do not aggravate or exacerbate any pre-existing
liability of Seller. Purchaser also hereby agrees to indemnify, defend and hold
harmless any tenant from and against any and all Indemnified Claims which such
tenant may suffer or incur due to Purchaser’s breach of its obligation under
Sections 4.3 and 4.8 above to maintain the confidential nature of any Property
Information or other information relative to such tenant. Purchaser’s
obligations under this Section 4.9 shall survive the termination of this
Agreement and shall survive the Closing.
ARTICLE 5
TITLE AND SURVEY
     5.1 Title Commitment. Seller has previously delivered to Purchaser (and
Purchaser acknowledges receipt thereof) a commitment for an ALTA 2006 owner’s
policy of title

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insurance with an effective date of March 22, 2010 (the “Title Commitment”)
issued by the Title Company. Seller has directed the Title Company to make
available to Purchaser copies of all documents of record referred to in the
Title Commitment as exceptions to title to the Real Property (other than any of
the same relating to liens and security interests securing monetary obligations
of Seller to be paid and/or discharged at Closing).
     5.2 Survey. Seller has previously delivered to Purchaser a copy of the
most-current survey of the Real Property in Seller’s possession (“Existing
Survey”). Purchaser at its sole cost, may elect to obtain a new survey or
revise, modify or recertify the Existing Survey (“Survey”) as necessary in order
for the Title Company to delete the survey exception from the Title Policy or
otherwise satisfy Purchaser’s objectives.
     5.3 Title Review. During the Inspection Period, Purchaser shall review
title to the Property as disclosed by the Title Commitment and the Survey.
Purchaser shall have the right, commencing on the Effective Date and expiring on
the date ten (10) days prior to the expiration of the Inspection Period (the
“Objection Period”), to notify Seller in writing (“Objection Notice”) of any
objections Purchaser may have to the status of title to the Real Property.
Seller shall have no obligation to cure title objections except financing liens
of an ascertainable amount created by, under or through Seller or that are held
by Seller or an affiliate of Seller, which liens Seller shall cause to be
released at or prior to Closing (with Seller having the right to apply the
Purchase Price or a portion thereof for such purpose), and Seller shall deliver
the Property free and clear of any such financing liens. Seller further agrees
to remove any exceptions or encumbrances to title which are voluntarily created
by, under or through Seller after the Effective Date without Purchaser’s consent
(if requested, such consent shall not be unreasonably withheld or delayed). To
the extent Seller shall not cure any such objections on or before the expiration
of the Inspection Period or to the extent Seller shall not commit in writing to
cure the same as of Closing, Purchaser shall have the right, upon notice to
Seller on or before expiration of the Inspection Period, to terminate this
Agreement, in which event the Initial Deposit shall be promptly returned to
Purchaser and neither party shall thereafter have any further liability or
obligation hereunder, except for such liability and obligation expressly set
forth herein to survive such termination. The term “Permitted Exceptions” shall
mean: (i) the exceptions in the Title Commitment (x) to which Purchaser does not
object in the Objection Notice, or (y) to which Purchaser does object in the
Objection Notice but which Seller does not agree, by written notice to Purchaser
given within ten (10) days after Seller’s receipt of Purchaser’s Objection
Notice, to cure at or prior to Closing; (ii) exceptions that the Title Company
has not agreed to remove from the Title Commitment as of the end of the
Inspection Period and that Seller is not required to remove as provided above;
(iii) matters created by, through or under Purchaser; (iv) matters shown on the
Survey which have not been removed as of the end of the Inspection Period (or if
Purchaser does not obtain a Survey, all matters that a current, accurate survey
of the Property would show); (v) real estate taxes and installments of
assessments not yet due and payable; (vi) rights of tenants under any Leases;
and (vii) any and all provisions of law or municipal ordinances, orders or
requirements constituting a lien against or otherwise encumbering real property
issued by the departments of buildings, fire, labor, health or other Federal,
State, County, Municipal or other departments and governmental agencies having
jurisdiction against or affecting the Real Property or any portion thereof.

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     5.4 Delivery of Title Policy at Closing. In the event that, due to no fault
of Purchaser or Seller, Title Company does not issue at Closing, or
unconditionally commit at Closing to issue, to Purchaser, an ALTA 2006 owner’s
policy of title insurance (including the pre-printed exclusions from coverage
contained in such policy) in accordance with the Title Commitment (as the same
may have been updated during the Inspection Period), insuring Purchaser’s fee
simple title to the Real Property in the amount of the Purchase Price, subject
only to the Permitted Exceptions and dated as of the time and date of Closing or
a subsequent date (the “Title Policy”), Purchaser shall have the right to
terminate this Agreement, in which case the Deposit shall be immediately
returned to Purchaser and the parties hereto shall have no further rights or
obligations, other than those that by their terms survive the termination of
this Agreement.
ARTICLE 6
ADDITIONAL AGREEMENTS
     6.1 Casualty. In the event of any damage or destruction of the Improvements
prior to Closing, Seller shall, unless such damage or destruction is de minimis
in nature, promptly thereafter notify Purchaser thereof. In the event that the
reasonably estimated cost to repair such damage or destruction shall exceed
$2,000,000, Purchaser may terminate this Agreement upon written notice given to
Seller within five (5) Business Days after Purchaser receives notice thereof
from Seller. In the event Purchaser elects not to terminate (or such damage or
destruction is of such a nature that Purchaser does not have a right to
terminate this Agreement), Purchaser shall, subject to the other terms and
conditions hereof, proceed to close in accordance with this Agreement and Seller
shall assign to Purchaser at Closing all of Seller’s rights to any proceeds from
casualty insurance resulting from such damage or destruction and Purchaser shall
receive a credit against the Purchase Price in the amount of any deductible.
     6.2 Condemnation. If proceedings in eminent domain are instituted with
respect to the Property or any portion thereof, Seller shall promptly thereafter
notify Purchaser thereof. In such event, Purchaser may terminate this Agreement
upon written notice to Seller within five (5) Business Days after Purchaser
receives notice thereof from Seller. If Purchaser chooses not to terminate and
proceeds to close in accordance with the Agreement, Purchaser shall be entitled
to receive any and all condemnation proceeds. In such case, Seller shall
cooperate with Purchaser in good faith, and shall execute such documents or
instruments as Purchaser may reasonably require to evidence Seller’s assignment
of its rights with respect to such condemnation, subject to the closing of the
transaction contemplated by this Agreement.
     6.3 New Contracts. Except as provided in Section 6.5, from the Effective
Date through Closing, Seller will not enter into any contract that will be an
obligation affecting the Property subsequent to the Closing, except contracts
entered into in the ordinary course of business that are terminable without
cause and without the payment of any termination penalty on not more than thirty
(30) days’ prior notice and contracts required for compliance with applicable
law. Seller shall furnish to Purchaser copies of any such new contracts promptly
after Seller’s execution and delivery thereof.
     6.4 Existing Service Contracts. Purchaser shall provide one or more written
notices (each, a “Contract Notice”) to Seller identifying which, if any, of the
Service Contracts

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Purchaser desires to assume at Closing, as follows: (i) with respect to any
Service Contracts which can be terminated by Seller upon less than ten (10) days
notice at a cost of less than $5,000, Purchaser shall deliver a Contract Notice
to Seller no later than two (2) Business Days prior to the expiration of the
Inspection Period; and (ii) with respect to all other Service Contracts,
Purchaser shall deliver a Contract Notice to Seller no later than thirty
(30) days prior to Closing. If Purchaser fails, by the applicable deadline as
set forth in the preceding sentence, to elect to assume any Service Contract by
providing Seller with a Contract Notice with respect to such Service Contract,
then Seller shall terminate such Service Contract at or prior to Closing at
Seller’s sole expense. If Purchaser does, by the applicable deadline as set
forth above, elect to assume any Service Contract by providing Seller with a
Contract Notice with respect to such Service Contract, then Purchaser shall
assume such Service Contract at Closing, to the extent assignable. If Purchaser
fails to provide Seller with any Contract Notice at all, Purchaser shall assume
all assignable Service Contracts at Closing. The Service Contracts that
Purchaser elects to assume or is deemed to have elected to assume are referred
to herein as the “Assumed Service Contracts”.
     6.5 Leasing. Seller will not amend or terminate any existing Lease or enter
into any new Lease without (a) providing Purchaser all relevant supporting
documentation, as reasonably determined by Seller, including, without
limitation, tenant financial information to the extent in Seller’s possession,
and (b) as to any such amendment or termination of a Lease or new Lease which is
to be executed after the expiration of the Inspection Period, obtaining
Purchaser’s written consent thereto. If Purchaser’s consent is requested by
Seller as to any amendment or termination of a Lease, or as to a new Lease,
Purchaser agrees to give Seller written notice of approval or disapproval of a
proposed amendment or termination of a Lease or new Lease within three (3)
Business Days after Purchaser’s receipt of the items in clause (a) above. If
Purchaser does not respond to Seller’s request within such time period, then
Purchaser will be deemed to have approved such amendment, termination or new
Lease.
     6.6 Liquor License and Liquor Inventory. After the Effective Date,
Purchaser shall be permitted, at Purchaser’s sole cost and expense, to submit
with the appropriate governmental authority an application for a liquor license
with respect to the Property; provided, however, that if this Agreement is
terminated and the Closing does not occur, Purchaser shall promptly revoke such
application. Such obligation shall survive the termination of this Agreement.
All liquor inventory will be sold to Purchaser in accordance with applicable
law, such that no liquor inventory will be conveyed until Purchaser receives a
buyer’s card.
     6.7 Current Operations; Communications. From the Effective Date until the
Closing or earlier termination of this Agreement, Seller shall conduct the
business of the Property in the ordinary course, and will not: (a) transfer or
convey the Property or any interest in Seller (or enter into any agreement to do
so), except for transfers or conveyances to Lender or any affiliate thereof
(provided that, in the event of any such transfer or conveyance to Lender or any
affiliate thereof, Lender or such affiliate shall be bound by the obligations of
Seller under this Agreement); (b) create or agree to any easements, liens,
mortgages, encumbrances or other interests that would affect the Property or
Seller’s ability to comply with this Agreement; (c) fail to maintain and repair
the Property in a manner substantially similar to the manner in which Seller has
done so previously; (d) change Seller’s existing policies of public liability
and hazard and extended coverage insurance insuring the Property; (e) fail to
comply promptly with any

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written notices of violation of laws or municipal ordinances, regulations,
orders or requirements of departments of housing, building, fire, labor, health,
or other state, city or municipal departments or other governmental authorities
having jurisdiction against or affecting the Property or the use or operation
thereof, without the prior written consent of Purchaser, which consent may be
granted or denied in Purchaser’s sole discretion; (f) terminate any tax appeals,
condemnation awards proceedings, insurance settlement negotiations or
proceedings, zoning changes, public roadway or traffic realignment negotiations
with public authorities, or storm water management agreements benefiting the
Property; (g) deplete or dispose of the Supplies and Inventory except in the
ordinary course of business; or (h) fail to resupply and replace any Supplies
and Inventory that otherwise would have been resupplied and replaced in the
ordinary course of business. Seller shall promptly deliver to Purchaser copies
of any notices of default sent by Seller to, or received by Seller from, any
tenants of the Property or service or materials providers to the Property sent
or received from and after the Effective Date until the Closing or earlier
termination of this Agreement.
     6.8 Continuing Books and Records Access. From the Effective Date until the
date two (2) years after the Closing, Seller shall, to the extent such items are
in Seller’s possession or control, make all of its property-level books and
records for the years ended December 31, 2007, 2008 and 2009 and interim periods
as required by the rules and regulations of the Securities and Exchange
Commission (“SEC”) available to Purchaser and Purchaser’s independent
accountants for inspection, copying and audit at the sole expense of the
Purchaser. Seller shall, at no expense to Seller, provide Purchaser with copies
of, or access to, such factual information, accounting records and financial
information as may be reasonably requested by Purchaser or its auditors, and in
the possession or control of Seller, to enable Purchaser or its affiliates to
file reports or registration statements in compliance with the rules and
regulations of the SEC. Seller also shall, upon request, at no expense to
Seller, supply to Purchaser letters of representation to such accountants, in
form and substance satisfactory to Purchaser in its sole discretion. This
Section 6.8 shall survive the Closing.
ARTICLE 7
CLOSING
     7.1 Closing. The consummation of the transaction contemplated herein
(“Closing”) shall occur on the Closing Date at or through the offices of Escrow
Agent (or such other location as may be mutually agreed upon by Seller and
Purchaser). Funds shall be deposited into and held by Escrow Agent in a closing
escrow account with a bank satisfactory to Purchaser and Seller. Upon
satisfaction or completion of all closing conditions and deliveries, the parties
shall direct Escrow Agent to immediately record and deliver the closing
documents to the appropriate parties and make disbursements according to the
closing statements executed by Seller and Purchaser.
     7.2 Conditions to Parties’ Obligation to Close. Seller and Purchaser
acknowledge that the Inspection Period Conditions (other than the Estoppel
Condition if Purchaser has elected to designate it as a condition to Closing in
accordance with Section 4.5.2) shall be either satisfied or waived prior to the
expiration of the Inspection Period such that after the expiration of the
Inspection Period the obligation of Purchaser to consummate the transactions
contemplated hereunder no longer shall be conditioned upon the satisfaction of
the Inspection Period

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Conditions (other than the Estoppel Condition if Purchaser has elected to
designate it as a condition to Closing in accordance with Section 4.5.2), all as
set forth in Section 4.5. However, the obligation of Seller, on the one hand,
and Purchaser, on the other hand, to consummate the transactions contemplated
hereunder are conditioned upon, in addition to all other conditions to Closing
set forth herein, the following (any of which such conditions may be waived in
writing by the beneficiary thereof):
          7.2.1 Representations and Warranties. The other party’s
representations and warranties contained herein shall be true and correct in all
material respects as of the Effective Date and the Closing Date; provided that,
with respect to any matters of which Seller acquires knowledge after the
Effective Date and before the Closing Date which would cause Seller’s
representations set forth in Sections 9.1.2 and 9.1.9 to be untrue or incorrect
in any material respects as of the Closing Date, Seller may, in its sole
discretion without obligation to do so, satisfy this condition by causing the
Title Company to provide affirmative title insurance coverage in favor of
Purchaser with respect to such matter reasonably satisfactory to Purchaser, or
providing an indemnity or guaranty with respect to such matter in favor of
Purchaser reasonably satisfactory to Purchaser, in which events this condition
shall be deemed to be satisfied with respect to such matter.
          7.2.2 Deliveries. As of the Closing Date, the other party shall have
tendered all deliveries to be made at Closing, including without limitation
Purchaser’s delivery of the Purchase Price via wire transfer in readily
available funds.
          7.2.3 Actions, Suits, etc. There shall exist no pending or threatened
actions, suits, arbitrations, claims, attachments, proceedings, assignments for
the benefit of creditors, insolvency, bankruptcy, reorganization or other
proceedings, against the other party or involving the Property that would
materially and adversely affect that party’s ability to perform its obligations
under this Agreement; provided that, with respect to any such matter affecting
Seller or the Property, Seller may, in its sole discretion without obligation to
do so, satisfy this condition by causing the Title Company to provide
affirmative title insurance coverage in favor of Purchaser with respect to such
matter reasonably satisfactory to Purchaser, or providing an indemnity or
guaranty with respect to such matter in favor of Purchaser reasonably
satisfactory to Purchaser, in which events this condition shall be deemed to be
satisfied with respect to such matter.
          7.2.4 Absence of Material Adverse Change. For purposes hereof, a
“Material Adverse Change” shall mean the depletion or disposition of the
Supplies and Inventory as of Closing below the level of the Supplies and
Inventory which existed as of the Effective Date. If prior to the Closing Date a
Material Adverse Change occurs, Purchaser may, at its option, promptly upon
Purchaser obtaining knowledge of such Material Adverse Change (but in any event
prior to Closing), deliver written notice thereof to Seller (with a copy to
Lender) requesting that Seller cure such Material Adverse Change by replenishing
the Supplies and Inventory to the level of the Supplies and Inventory which
existed as of the Effective Date. Seller shall have a period of ten
(10) Business Days after receipt of such written notice from Purchaser to so
replenish the Supplies and Inventory, and if the Closing Date otherwise would
occur during such ten (10) Business Day period, the Closing Date shall be
extended to the first Business Day following the expiration of such ten
(10) Business Day period, or such earlier date as Seller and

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Purchaser may agree in writing. Notwithstanding anything herein contained to the
contrary, in the event that there has been a Material Adverse Change during the
period between the date Purchaser sent the Notice of Satisfaction to Seller and
the date of Closing, which Material Adverse Change is not cured by Seller within
ten (10) Business Days after Seller’s receipt of written notice thereof from
Purchaser as set forth above, Purchaser shall have the right, upon written
notice thereof to Seller on or prior to the Closing Date, to terminate this
Agreement and thereupon to receive an immediate refund of the Deposit, and
neither party shall thereafter have any further liability or obligation
hereunder except for such liabilities and obligations that are expressly stated
herein to survive termination of this Agreement.
          7.2.5 Estoppels. If Purchaser has elected to designate the Estoppel
Condition as a condition to Closing in accordance with Section 4.5.2, and if
Seller has not delivered the Estoppels to Purchaser at or prior to the Closing
Date, Seller shall have the right, upon written notice to Purchaser on or prior
to the Closing Date, to extend the Closing for a period up to sixty (60) days,
so long as Seller is continuing to pursue, in good faith and with due diligence,
the return of the Estoppels as duly executed by the applicable tenants, and,
upon delivery to Purchaser of the executed Estoppels, the Estoppel Condition
shall be satisfied and the parties shall proceed to Closing no later than five
(5) Business Days thereafter. If Purchaser has elected to designate the Estoppel
Condition as a condition to Closing in accordance with Section 4.5.2, and if
Seller has not delivered the Estoppels to Purchaser at or prior to Closing (as
it may be extended pursuant to the preceding sentence), Purchaser shall have the
right to waive such condition and proceed to Closing or, upon written notice
thereof to Seller on or prior to the Closing Date, to terminate this Agreement
and thereupon to receive an immediate refund of the Deposit, and neither party
shall thereafter have any further liability or obligation hereunder except for
such liabilities and obligations that are expressly stated herein to survive
termination of this Agreement. Notwithstanding anything in this Agreement to the
contrary, if the information set forth in any Estoppel is modified by the tenant
executing such Estoppel such that it deviates from the form attached hereto as
Exhibit J-1 or J-2 (as applicable), such Estoppel nevertheless shall be deemed
sufficient for purposes of satisfying the Estoppel Condition under Section 4.5.2
or this Section 7.2.5 (as applicable), provided that such deviations do not
materially adversely alter the information set forth in the Estoppel.
     7.3 Seller’s Deliveries in Escrow. As of or prior to the Closing Date,
Seller shall deliver in escrow to Escrow Agent the following:
          7.3.1 Deed. A limited warranty deed in the form of Exhibit B hereto,
including a list of Permitted Exceptions to which the conveyance shall be
subject, executed by Seller, conveying Seller’s interest in the Real Property
(the “Deed”);
          7.3.2 Bill of Sale. A Bill of Sale and Assignment and Assumption of
Leases and Contracts, in the form of Exhibit C hereto (the “Bill of Sale”),
executed by Seller, conveying to Purchaser, without warranty (except as set
forth in Section 9.1.10), Seller’s right, title and interest in and to the
Tangible Personal Property, Leases and Assumed Service Contracts.
Notwithstanding anything herein to the contrary, food and beverage inventory
shall only be transferred to the extent permitted by law.

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          7.3.3 General Assignment. An Assignment and Assumption Agreement in
the form of Exhibit D hereto (the “Assignment”), executed by Seller, assigning
to Purchaser, without warranty (except as set forth in Section 9.1.10), Seller’s
right, title and interest in and to the Intangible Personal Property, to the
extent assignable, and pursuant to which Purchaser shall assume (i) all
Liabilities arising from and after Closing and (ii) all Liabilities for which
Purchaser received a credit against the Purchase Price.
          7.3.4 Conveyancing or Transfer Tax Forms or Returns. Such conveyancing
or transfer tax forms or returns, if any, as are required to be delivered or
signed by Seller by applicable state and local law in connection with the
conveyance of the Real Property, including but not limited to a Minnesota
Certificate of Real Estate Value (“CREV”);
          7.3.5 FIRPTA. A Foreign Investment in Real Property Tax Act affidavit
in the form of Exhibit E hereto;
          7.3.6 Tenant Notices. The Tenant Notices (hereinafter defined),
executed by Seller;
          7.3.7 Authority Documents. Evidence of the existence, organization and
authority of Seller and of the authority of the persons executing documents on
behalf of Seller reasonably satisfactory to the underwriter for the Title
Policy; and
          7.3.8 Additional Documents. Any additional documents that Escrow Agent
or the Title Company may reasonably require for the proper consummation of the
transaction contemplated by this Agreement (provided, however, no such
additional document shall expand any obligation, covenant, representation or
warranty of Seller or result in any new or additional obligation, covenant,
representation or warranty of Seller under this Agreement beyond those expressly
set forth in this Agreement).
          7.3.9 Lease Terminations. Evidence of termination of the Hotel Lease.
     7.4 Purchaser’s Deliveries in Escrow. On or before the Closing Date,
Purchaser shall deliver in escrow to Escrow Agent the following:
          7.4.1 Purchase Price. Purchaser shall, on or before noon CDT on the
Closing Date, deposit the Purchase Price less the Deposit, plus or minus
applicable prorations, in immediate, same-day U.S. federal funds wired for
credit into Escrow Agent’s escrow account, which funds must be delivered in a
manner to permit Escrow Agent to deliver good funds to Seller or its designee on
the Closing Date (and, if requested by Seller, by wire transfer);
          7.4.2 Bill of Sale. The Bill of Sale, executed and acknowledged by
Purchaser;
          7.4.3 Assignment. The Assignment, executed and acknowledged by
Purchaser.
          7.4.4 ERISA Letter. A letter to Seller in the form of Exhibit F hereto
duly executed by Purchaser, confirming that Purchaser is not acquiring the
Property with the assets of an employee benefit plan as defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974 (“ERISA”) and, in the
event Purchaser is unable or unwilling to make such a

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representation, Purchaser shall be deemed to be in default hereunder, and Seller
shall have the right to terminate this Agreement and to receive and retain the
Deposit;
          7.4.5 Conveyancing or Transfer Tax Forms or Returns. Such conveyancing
or transfer tax forms or returns, if any, as are required to be delivered or
signed by Purchaser by applicable state and local law in connection with the
conveyance of the Real Property, including but not limited to a CREV;
          7.4.6 Authority Documents. Evidence of the existence, organization and
authority of Purchaser and of the authority of the persons executing documents
on behalf of Purchaser reasonably satisfactory to the underwriter for the Title
Policy;
          7.4.7 Tenant Notices. The Tenant Notices, executed by Purchaser;
          7.4.8 Additional Documents. Any additional documents that Seller,
Escrow Agent or the Title Company may reasonably require for the proper
consummation of the transaction contemplated by this Agreement (provided,
however, no such additional document shall expand any obligation, covenant,
representation or warranty of Purchaser or result in any new or additional
obligation, covenant, representation or warranty of Purchaser under this
Agreement beyond those expressly set forth in this Agreement).
     7.5 Closing Statements. As of or prior to the Closing Date, Seller and
Purchaser shall deposit with Escrow Agent executed closing statements consistent
with this Agreement in the form required and prepared by Escrow Agent.
     7.6 Possession. At Closing, Seller shall deliver possession of the Property
to Purchaser at the Closing subject only to the Permitted Exceptions.
     7.7 Safety Deposit Boxes. On the Closing Date, Seller shall deliver to
Purchaser all keys to the safe deposit boxes and room safes located at the
Hotel, to the extent in Seller’s possession, and all receipts and agreements
relating to such safe deposit boxes, which shall contain the name and room
number of each depositor. Each safe deposit box in use by a Hotel guest shall
then be sealed by a representative of Purchaser and Seller. On the Closing Date,
Seller shall send written notice to guests at the Hotel who have safe deposit
boxes, advising them of the sale of the Hotel to Purchaser and the procedures to
be followed pursuant to this Section 7.7 and requesting the removal and
verification of the contents thereof within three (3) Business Days after the
Closing Date. Safe deposit box of guests who have not responded to such written
notice shall be listed at the end of such three (3) Business Day period. All
safe deposit boxes shall be opened in the presence of the guest and
representatives of Purchaser and Seller and the contents recorded; if the guest
is not available, such safe deposit boxes shall be opened in the presence of
Seller and Purchaser only in accordance with Minnesota Statute § 345.32(d). Any
property remaining in safe deposit boxes as of the Cutoff Time (as defined
below) shall be the responsibility of Purchaser, and Purchaser shall give Seller
a copy of such record and shall indemnify, defend and hold harmless the
Seller-Lender Indemnified Parties and The Wirth Companies (and its shareholders,
members, consultants, representatives, officers, employees and affiliates)
(collectively, the “Wirth Indemnified Parties”) from and against any and all
Indemnified Claims related to the foregoing, including without limitation any
liability pursuant

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to Minnesota law. Seller shall be responsible for and shall indemnify, defend
and hold harmless the Purchaser Indemnified Parties from and against any
Indemnified Claims pertaining to any property allegedly deposited in a safe
deposit box prior to the Closing Date and not recorded pursuant to the
procedures of this Section 7.7. Such indemnities shall survive the Closing.
     7.8 Baggage. All baggage and other property of guests of the Hotel checked
or left in the care of Seller as of the Cutoff Time shall be listed in an
inventory to be prepared in duplicate and signed by Seller and Purchaser, and
Purchaser shall give Seller a copy of such inventory. Purchaser shall be
responsible for such baggage and property after the Cutoff Time and shall
indemnify, defend and hold harmless the Seller-Lender Indemnified Parties and
Wirth Indemnified Parties from and against any and all Indemnified Claims
related to the foregoing. Seller shall indemnify, defend and hold harmless the
Purchaser Indemnified Parties from and against any and all Indemnified Claims
for such baggage and property not listed in such inventory but alleged to have
been left in custody at the Hotel prior to the Cutoff Time. Such indemnities
shall survive the Closing.
     7.9 Employees.
          7.9.1 On or before the Closing Date, Purchaser shall cause the
property management company retained by Purchaser to manage the Real Property
(“Purchaser’s Manager”) to offer employment to the greater of (i) the number of
employees of the Hotel that is necessary for Seller not to incur any liability
under the federal Worker Adjustment and Retraining Notification Act (the “WARN
Act”) or any applicable state or local equivalent or any other similar law, or
(ii) such of the employees at the Real Property as of the Closing Date as
Purchaser determines in good faith are reasonably necessary to continue
operating the Real Property, on sufficiently similar terms of employment
applicable to each such employee as of the Closing Date so as not to trigger the
WARN Act, with such employment to commence immediately upon Closing. Those
employees who accept an offer of employment from Purchaser’s Manager are
referred to herein as “Transferring Employees”. Purchaser shall cause
Purchaser’s Manager to retain a sufficient number of Transferring Employees
after Closing so as not to trigger the WARN Act; provided, however, that
Purchaser’s Manager may terminate any employee for cause at any time. Seller
represents and warrants to Purchaser that Schedule 7.9 reflects employees
terminated by Seller within the 90 day period prior to the date hereof.
          7.9.2 From and after the Closing, Purchaser shall indemnify, defend
and hold harmless the Seller-Lender Indemnified Parties and the Wirth
Indemnified Parties from and against any and all Indemnified Claims arising
from: (i) the failure of Purchaser’s Manager to pay any and all obligations with
respect to payment of accrued wages or benefits of Transferring Employees after
the Closing Date; (ii) any violation of, or liability accruing under or in
connection with, the WARN Act or any applicable state or local equivalent or any
other similar law, arising from (A) the sale of the Property, (B) Purchaser or
Purchaser’s Manager’s breach of the covenants set forth in Section 7.9.1, or
(C) the actions of Purchaser’s Manager from and after the Closing Date
(including, without limitation, any closure of the Property after the Closing
Date or any post-Closing reduction in the work force at the Property); or
(iii) any violation by Purchaser or Purchaser’s Manager of employment laws
applicable to the Hotel, including, without limitation, all provisions of
federal, state and local laws with respect to Transferring Employees retained
under this Agreement, including, without limitation, the Immigration

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Reform and Control Act, the Occupational Safety and Health Act, the Employee
Retirement Income Security Act of 1974, National Labor Relations Act, the Fair
Labor Standards Act, the Family and Medical Leave Act, the WARN Act, the
Consolidated Omnibus Budget Reconciliation Act, Title VII of the Civil Rights
Act of 1964, the Americans with Disabilities Act, the Age Discrimination in
Employment Act, all applicable wrongful discharge and discrimination laws, all
applicable wage-and-hour, unemployment and workers’ compensation laws, and all
other applicable federal, state or local laws, or common law, governing or
relating to the employment of employees (collectively, “Employment Laws”).
          7.9.3 Seller shall indemnify, defend and hold harmless the Purchaser
Indemnified Parties from and against any and all Indemnified Claims arising from
events or transactions occurring solely prior to the Closing Date (and through
no act or omission of Purchaser) and relating to or concerning: (i) the failure
of Seller or The Wirth Companies to pay any and all obligations with respect to
payment of accrued employee wages or benefits due on or prior to the Closing
Date; or (ii) any violation of Employment Laws.
          7.9.4 The provisions of this Section 7.9 shall survive the Closing.
     7.10 Existing Reservations. Purchaser shall honor (and shall cause
Purchaser’s Manager to honor) all reservations at the Hotel, or for any related
conference, banquet, or meeting space or any other facilities, made through or
in connection with the Hotel prior to the Cutoff Time for periods on or after
the date of Closing. Seller shall not, without Purchaser’s prior written
consent, materially discount its prices (as against its typical pricing in
accordance with past practices) for any such reservations, conference, banquet
or meeting space or other facilities with respect to periods subsequent to the
Cutoff Time. Purchaser shall indemnify, defend and hold harmless the
Seller-Lender Indemnified Parties and he Wirth Indemnified Parties from and
against any and all Indemnified Claims arising from a breach by Purchaser of its
obligations under this Section 7.10. Seller shall indemnify, defend and hold
harmless the Purchaser Indemnified Parties from and against any and all
Indemnified Claims arising from a breach by Seller of its obligations under this
Section 7.10. The provisions of this Section 7.10 shall survive the Closing.
     7.11 Notice to Tenants. Seller and Purchaser shall each execute, and
Purchaser shall deliver to each tenant immediately after the Closing, a notice
regarding the sale in substantially the form of Exhibit G hereto (the “Tenant
Notices”), or such other form as may be required by applicable state law. This
obligation on the part of Purchaser shall survive the Closing.
ARTICLE 8
CLOSING COSTS, PRORATIONS, AND ADJUSTMENTS
     8.1 Closing Costs. Seller shall pay (i) one hundred percent (100%) of all
state, county and local transfer taxes relating to the conveyance of the Real
Property pursuant to this Agreement (including but not limited to Minnesota
state deed tax), (ii) the cost of the title commitment for the Title Policy,
(iii) fifty percent (50%) of the title premium for the Title Policy, including
extended coverage but excluding any other endorsements, and (iv) fifty percent
(50%) of any escrow fee charged by Escrow Agent for holding the Deposit or
conducting the Closing. Purchaser shall pay (i) fifty percent (50%) of the title
premium (including the cost of

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any title endorsements other than extended coverage) for the Title Policy,
(ii) recording taxes and fees for recording the Deed, (iii) survey revision and
modification costs, (iv) all costs and expenses incurred by Purchaser in
connection with any financing obtained by Purchaser, including without
limitation any mortgage registry tax, and (v) fifty percent (50%) of any escrow
fee charged by Escrow Agent for holding the Deposit or conducting the Closing.
In addition, if the transaction contemplated hereby, or any portion thereof, is
subject to the Minnesota state sales tax, Purchaser shall pay the same in full.
Purchaser and Seller shall each pay its own legal fees. Any other closing costs
which are not specifically provided in this Agreement shall be paid by the party
incurring such costs.
     8.2 Adjustments. Unless otherwise provided herein, adjustments between the
parties shall be made as of 12:01 a.m. on the date Closing is effective (the
“Cutoff Time”), with the income and expenses accrued prior to the Cutoff Time
being allocated to Seller and the income and expenses accruing on and after the
Cutoff Time being allocated to Purchaser, all as set forth in more detail below.
All of such adjustments and allocations shall be made in cash at Closing and
shall be shown on the closing statement to the extent possible. The computation
of the adjustments for the closing statement shall be jointly prepared by
Purchaser and Seller using actual calculations through the Cutoff Time and,
where necessary, estimated amounts. Representatives of both Purchaser and Seller
shall participate in conducting any necessary inventories and compiling and
verifying any necessary information as of the Cutoff Time. Except for real
estate taxes, which shall be prorated in accordance with Section 8.3, and except
as otherwise expressly provided herein, all prorations, apportionments and
adjustments hereunder shall be made on an accrual basis in accordance with the
Uniform System of Accounts (10th Edition, 2006). Within sixty (60) days
following the Closing Date, Purchaser shall cause the then property manager to
prepare and issue the final accounting for the period prior to the Closing
(“Final Accounting”). Purchaser and Seller shall each have the right to have
their respective accountants review drafts of the Final Accounting such that the
Final Accounting accurately reflects the operations of the Property. Within
thirty (30) days following the Final Accounting, Seller and Purchaser shall
agree in good faith on a final determination of all income and expenses (the
“True-up”), and within five (5) days of the True-up, Seller or Purchaser, as the
case may be, shall pay to the other the amount as may be required by the
True-up. At the True-up, Seller and Purchaser shall recalculate and reapportion
any income and expenses (i) which were not apportioned on the settlement
statement because of the unavailability of information, (ii) which were
apportioned on the settlement statement based upon estimated or incomplete
information, or (iii) for which errors exist on the settlement statement. The
True-up shall be final and except as otherwise expressly set forth in this
Agreement there shall be no further adjustment between Seller and Purchaser for
income and expenses.
     8.3 Real Estate Taxes. General, special, ad valorem, and any other property
taxes and assessments imposed by governmental authorities (collectively,
“Taxes”) that are payable in the calendar year in which the Closing occurs shall
be prorated as of the Cutoff Time as follows: (i) if the Closing occurs on or
before June 30, 2010, Seller shall pay Taxes for the first half of 2010 (if it
has not done so already) and Seller shall receive a credit based on the number
of days elapsed from the Closing Date until and including June 30, 2010; (ii) if
the Closing occurs after June 30, 2010 and Seller has not paid Taxes for the
second half of 2010, Purchaser shall pay Taxes for the second half of 2010 and
Purchaser shall receive a credit based on the number of days elapsed from and
including July 1, 2010 until the Closing Date; or (iii) if the Closing occurs

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after June 30, 2010 and Seller has paid Taxes for the second half of 2010,
Seller shall receive a credit based on the number of days elapsed from the
Closing Date until and including December 31, 2010. If the Closing Date occurs
prior to the receipt by Seller of all statements for such amounts for the
applicable tax period in which the Closing occurs, Purchaser and Seller shall
prorate Taxes based upon the most recent tax bill (or if applicable, on the most
recent ascertainable assessed values and tax rates and assessments).
     8.4 Utilities. All suppliers of utilities shall be instructed to read
meters or otherwise determine the charges owing for services prior to and until
the Cutoff Time, which charges shall be paid by Seller. Purchaser shall pay
charges accruing after the Cutoff Time. If the amount of the charges owing as of
the Cutoff Time cannot be reasonably determined, the apportionment shall be
estimated at Closing based upon the amount of such charges for the immediately
preceding billing period. If elected by Seller, Seller shall be given credit,
and Purchaser shall be charged, for any utility deposits transferred to
Purchaser at Closing. A schedule of all utility deposits is to be delivered by
Seller to Purchaser prior to the expiration of the Inspection Period.
     8.5 Income/Charges. All income and charges receivable or payable under any
Assumed Service Contracts, and any prepayments and receipts thereunder, shall be
prorated between Purchaser and Seller as of the Cutoff Time. Seller shall be
given credit and Purchaser shall be charged, for any contract deposits actually
transferred to Purchaser at Closing.
     8.6 Accounts Receivable. Seller shall retain all accounts receivable (other
than the Guest Ledger (hereinafter defined) and Tenant Receivables (hereinafter
defined), for which Seller shall receive credits as set forth in Sections 8.8
and 8.9 below, respectively) applicable to the period prior to the Cutoff Time
and there shall not be any adjustment to the Purchase Price for such accounts
receivable. Any amounts received by Purchaser after the Closing Date on account
of such accounts receivable shall be immediately remitted by Purchaser to
Seller.
     8.7 Accounts. All bank accounts, operating accounts and reserve funds as of
the Cutoff Time shall be the property of Seller. All petty cash, cash in cash
registers, cash in vending machines or other equipment or machines, and any cash
in any house banks as of the Cutoff Time shall be delivered to Purchaser at
Closing and Purchaser shall give Seller a credit at Closing for any and all such
items.
     8.8 Room Rentals. All accounts receivable of registered guests for the
night in which the Cutoff Time occurs (the “Guest Ledger”) shall be divided
equally between Purchaser and Seller. All accounts receivable of registered
guests at the Hotel who have not checked out and were occupying rooms as of the
Cutoff Time for the period up to the night in which the Cutoff Time occurs,
shall be allocated to Seller.
     8.9 Tenant Receivables. Rents (including any percentage rent) due from
tenants under Leases and operating expenses, taxes or other amounts payable by
tenants under Leases (collectively, “Tenant Receivables”) shall be prorated
between Seller and Purchaser at Closing as of the Cutoff Time. Tenant
Receivables received from tenants under Leases after Closing shall be applied in
the following order of priority: (1) first, to payment of current Tenant
Receivables then due for the month in which received, which amount shall be
retained by Purchaser; (2) second, to payment of any delinquent Tenant
Receivables first coming due after Closing and,

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which amount shall be retained by Purchaser; (3) third, to payment of any
delinquent Tenant Receivables applicable to the period of time before Closing
and not collected by Seller (“Uncollected Delinquent Tenant Receivables”), which
amount shall be delivered to Seller. Notwithstanding the foregoing, Seller shall
have the right to pursue the collection of Uncollected Delinquent Tenant
Receivables for a period of one year after Closing without prejudice to Seller’s
rights or Purchaser’s obligations hereunder, provided, however, Seller shall
have no right to cause any such tenant or licensee to be evicted or to exercise
any other “landlord” remedy (as set forth in such tenant’s Lease) against such
tenant other than to sue for collection. Any sums received by Purchaser to which
Seller is entitled shall be held in trust for Seller on account of such past due
rents payable to Seller, and Purchaser shall remit to Seller any such sums
received by Purchaser to which Seller is entitled within ten (10) Business Days
after receipt thereof less reasonable, actual costs and expenses of collection,
including reasonable attorneys’ fees, court costs and disbursements, if any.
Seller expressly agrees that if Seller receives any amounts after the Closing
Date which are attributable, in whole or in part, to any period from and after
the Closing Date, Seller shall remit to Purchaser that portion of the monies so
received by Seller to which Purchaser is entitled within ten (10) Business Days
after receipt thereof. With respect to any Tenant Receivables which are billed
after Closing but applicable to a period of time prior to Closing (for example,
any reconciliation of operating expenses and taxes), Purchaser covenants and
agrees to (A) bill the same when billable, and (B) reasonably cooperate with
Seller to determine the correct amount of operating expenses and/or taxes due to
Seller for the period of time prior to Closing and upon receipt of such Tenant
Receivables, Purchaser shall prorate such amount between Purchaser and Seller as
of the Cutoff Time and deliver to Seller such amount applicable to the period of
time prior to Closing. The provisions of this Section 8.9 shall survive the
Closing.
     8.10 Food, Beverage and Other Sales.
          8.10.1 Other revenue not specifically addressed elsewhere in this
Article 8 (including without limitation revenue for telephone, facsimile, data
communication, in-room movie, valet, laundry and other services ordered by
guests) shall be allocated based on whether the applicable service occurred
before or after the Cutoff Time. All revenues from service operations conducted
at the Real Property shall be allocated based on whether the same was fulfilled
before or after the Cutoff Time.
          8.10.2 Food and beverage revenues and expenses shall be allocated
based on whether the applicable meal or other food and beverage service occurred
before or after 2:00 a.m. All revenues and expenses from restaurants and other
food and beverage service operations conducted at the Real Property shall be
allocated based on whether the same was fulfilled before or after 2:00 a.m.
Notwithstanding the foregoing, all revenues and expenses from any bars and
lounges at the Property shall be prorated based on the actual closing time for
such bar or lounge. For example, if such bar or lounge closes at 3 a.m. on the
Closing Date, Seller shall retain the revenues and pay the expenses from such
services and operations even though such revenues and expenses were generated
one (1) hour after the cutoff time for other food and beverage revenues and
expenses.
     8.11 Conference Revenues. Revenue from conferences, receptions, meetings,
and other functions occurring in any conference, banquet or meeting rooms at the
Property and

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adjacent facilities including usage charges and related taxes, food and beverage
sales, valet parking charges, equipment rentals, and telecommunication charges
in connection therewith shall be allocated between Seller and Purchaser, based
on when the function therein commenced, with (i) one-day functions commencing
prior to the Cutoff Time being allocable to Seller, (ii) functions commencing
after the Cutoff Time being allocable to Purchaser, and (ii) multi-day functions
being allocated between Seller and Purchaser accordingly, i.e., any day of a
multi-day function which commences prior to the Cutoff Time shall be allocated
to Seller and any day of a multi-day function which commences after the Cutoff
Time shall be allocated to Purchaser. The foregoing amounts are referred to
collectively as “Conference Revenues.”
     8.12 Advance Deposits. All prepaid rentals, room rental deposits, and all
other deposits for advance registration, conferences, meetings, banquets or
future services to be provided on and after the Cutoff Time shall be credited to
Purchaser. All commissions already paid by Seller shall be credited to Seller.
Seller shall indemnify and hold harmless the Purchaser Indemnified Parties from
and against all Indemnified Claims resulting from Seller’s failure to credit to
Purchaser any prepaid rentals or deposits paid to Seller. The provisions of this
Section 8.12 shall survive the Closing.
     8.13 Income and Other Taxes. Except as otherwise set forth in this
Article 8, the Seller shall be responsible for, and shall indemnify and hold
harmless the Purchaser Indemnified Parties from and against any Indemnified
Claims incurred by any of the Purchaser Indemnified Parties arising out of, any
federal or local income, franchise, sales, personal property, room, occupancy,
use or other tax liability relating to periods up to the Cutoff Time. Purchaser
shall be responsible for, and shall indemnify and hold harmless the
Seller-Lender Indemnified Parties from and against any Indemnified Claims
incurred by any of the Seller-Lender Indemnified Parties arising out of, any
federal or local income, franchise, sales, personal property, room, occupancy,
personal property use or other tax liability relating to periods after the
Cutoff Time. The provisions of this Section 8.13 shall survive the Closing.
     8.14 Employees. With respect to any Transferring Employees who become
employed by Purchaser or Purchaser’s Manager in accordance with Section 7.9,
wages, salaries, accrued vacation pay and all other costs associated with any
and all employee benefits related to such Transferring Employees, together with
F.I.C.A., unemployment and other taxes due with respect to such Transferring
Employees, shall be prorated as of the Cutoff Time; provided however that
Purchaser shall cause Purchaser’s Manager to assume all liability for all
employee benefits, including, without limitation, accrued vacation pay, sick
leave, required contributions to health, pension or other benefit plan, bonuses,
COBRA rights, and other benefits accrued or earned by and due to employees at
the Property after the Closing Date. Purchaser shall cause Purchaser’s Manager
to be responsible for all severance pay for discharged employees after the
Cutoff Time. Purchaser shall cause Purchaser’s Manager to be responsible for all
continuation coverage and notice requirements with respect to each individual
who is or becomes an “M & A Qualified Beneficiary” (as such term is defined in
Treas. Reg. Section 35-4980B-9) as a result of the consummation of the
transaction contemplated hereby. This Section shall survive the Closing.
     8.15 Accounts Payable. Purchaser shall receive a credit for all accounts
payable owing for goods and services furnished prior to the Cutoff Time.
Accounts payable shall include all items which are customarily included as a
current liability on an accrual-method balance

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sheet. For the avoidance of doubt, accounts payable under this paragraph shall
exclude any items which are separately addressed in this Article 8, it being
understood that payables shall be prorated without duplication. Purchaser shall
pay all accounts payable relating to goods and services for which orders have
been placed but, as of the Cutoff Time, such goods and services have not yet
been delivered or provided. Notwithstanding the foregoing, in no event shall
Purchaser have any obligation to pay accounts payable related to any Service
Contracts that are not Assumed Service Contracts hereunder.
     8.16 Inventory. The Purchase Price shall be deemed to include payment for
all Supplies and Inventory, the same being subject to depletion, resupply,
substitution, replacement and disposition in the ordinary course of business
between the Effective Date and Closing and subject to Sections 6.6 and 7.3.2
hereof, and there shall be no adjustment to the Purchase Price based thereon.
     8.17 Gift Certificates. Purchaser shall receive a credit for the face
amount of unexpired Hotel gift certificates or vouchers, if any, issued by
Seller or The Wirth Companies prior to, but not redeemed as of, the Cutoff Time.
     8.18 Closing Statement. Seller shall be responsible for preparing for
Purchaser’s review and approval a preliminary closing statement (the
“Preliminary Closing Statement”) which will show the net amount due either to
Seller or to Purchaser as a result of the adjustments and prorations provided
for herein. A draft of the Preliminary Closing Statement will be prepared and
circulated to Purchaser no later than three (3) days prior to the Closing Date,
and thereafter Purchaser and Seller shall reasonably cooperate with each other
(acting in good faith) to finalize the closing statement prior to Closing.
ARTICLE 9
REPRESENTATIONS AND WARRANTIES
     9.1 Seller’s Representations and Warranties. Seller represents and warrants
to Purchaser that:
          9.1.1 Organization and Authority. Seller is validly existing, and is
in good standing in the state in which it was formed. Seller is the sole owner
of the Property and has the full right and authority and has obtained any and
all consents required to enter into this Agreement and to consummate or cause to
be consummated the transactions contemplated hereby. This Agreement has been,
and all of the documents to be delivered by Seller at the Closing will be,
authorized and executed and constitute, or will constitute, as appropriate, the
valid and binding obligation of Seller, enforceable in accordance with their
terms.
          9.1.2 Conflicts and Pending Action. There is no agreement to which
Seller is a party or to Seller’s knowledge binding on Seller which is in
conflict with this Agreement. There is no action or proceeding pending or, to
Seller’s knowledge, threatened against Seller which challenges or impairs
Seller’s ability to execute or perform its obligations under this Agreement.

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          9.1.3 Tenant Leases. To Seller’s knowledge, the Rent Roll attached
hereto as Exhibit H lists all tenants of the Property as of the Effective Date.
          9.1.4 Equipment Leases and Current Licenses. To Seller’s knowledge,
there are no oral understandings or side agreements with respect to the rental
of any equipment that has not been reduced to a writing and which is not set
forth on the schedule of Equipment Leases and Licenses provided by Seller. To
Seller’s knowledge, no written notice of default has been given or received by
Seller under any of the Equipment Leases and Licenses which remains uncured,
and, to Seller’s knowledge, no event or omission has occurred which but for the
passing of time or the giving of notice or both would be a default by either
party thereunder. To Seller’s knowledge, there are no outstanding defenses,
counterclaims or offsets against the payment of rent or any other amount payable
or against the performance of any other obligation under any of the Equipment
Leases or Licenses.
          9.1.5 Service Contracts. To Seller’s knowledge, (i) the list of
Service Contracts provided to Purchaser pursuant to this Agreement is correct
and complete in all material respects as of the date of its delivery, (ii) no
written notice of default has been given or received by Seller under any Service
Contract which remains uncured, and (iii) no event or omission has occurred
which but for the passing or time or the giving of notice or both would be a
default by either party thereunder. To Seller’s knowledge, the Service Contracts
are the only written agreements or contracts relating to the operation and
maintenance of the Property and Seller has not contracted for any other services
or employment and has made no other commitments or obligations therefor which
will bind Purchaser as a successor in interest with respect to the Property.
          9.1.6 Notices from Governmental Authorities. To Seller’s knowledge,
except as may be reflected by the Property Information or otherwise disclosed in
writing to Purchaser, Seller has not received from any governmental authority
written notice of (i) any material violation of any laws, zoning ordinances or
building rules or regulations applicable (or alleged to be applicable) to the
Real Property, the Hotel or any part thereof, that has not been corrected or
(ii), any existing or threatened condemnation involving the Property.
          9.1.7 Foreign Person. Seller is not a “foreign person” nor a “U.S.
real property holding corporation” for purposes of Section 1445 of the Internal
Revenue Code or any applicable regulations promulgated thereunder.
          9.1.8 Bankruptcy. No attachments, execution proceedings, assignments
for the benefit of creditors, insolvency, bankruptcy, or other similar
proceedings are pending or, to Seller’s knowledge, threatened against Seller,
nor is Seller contemplating commencing any such proceedings. Seller has not been
a debtor under any case commenced under the United States Bankruptcy Code.
          9.1.9 Litigation. To Seller’s knowledge, except as set forth on
Schedule 9.1.9, (i) there is no litigation instituted and served against Seller
or the Hotel, and (ii) Seller has not received written notice of any proposed or
threatened litigation against Seller or the Hotel that would adversely affect
the Hotel or the use and operation thereof.

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          9.1.10 Personal Property. To Seller’s knowledge, Seller owns, free and
clear of all liens and encumbrances, all Tangible Personal Property, except such
items thereof as may be subject to the Equipment Leases and Licenses, and all
Intangible Personal Property. The Tangible Personal Property being sold by
Seller hereunder constitutes substantially all of the tangible personal property
owned by Seller.
          9.1.11 Prohibited Persons and Transactions. Neither Seller nor, to
Seller’s knowledge, any of its affiliates, nor any of their respective partners,
members, shareholders or other equity owners, and none of their respective
employees, officers, directors, representatives or agents is, nor will they
become, a person or entity with whom U.S. persons or entities are restricted
from doing business under regulations of the Office of Foreign Asset Control
(“OFAC”) of the Department of the Treasury (including those named on OFAC’s
Specially Designated and Blocked Persons List) or under any statute, executive
order (including the September 24, 2001, Executive Order Blocking Property and
Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support
Terrorism), or other governmental action and is not engaging and will not engage
in any dealings or transactions or be otherwise associated with such persons or
entities.
          9.1.12 Schedule of Employees. To Seller’s knowledge, the schedule of
employees previously provided to Purchaser pursuant to Article 4 is true,
accurate and complete in all material respects.
     9.2 Purchaser’s Representations and Warranties. Purchaser represents and
warrants to Seller that:
          9.2.1 Organization and Authority. Purchaser is validly existing as a
limited liability company in good standing in the State of Delaware and is
qualified to do business in the State of Minnesota. Purchaser has the full right
and authority and has obtained any and all consents required to enter into this
Agreement and to consummate or cause to be consummated the transactions
contemplated hereby. This Agreement has been, and all of the documents to be
delivered by Purchaser at the Closing will be, authorized and properly executed
and constitute, or will constitute, as appropriate, the valid and binding
obligation of Purchaser, enforceable in accordance with their terms.
          9.2.2 Conflicts and Pending Action. There is no agreement to which
Purchaser is a party or to Purchaser’s knowledge binding on Purchaser which is
in conflict with this Agreement. There is no action or proceeding pending or, to
Purchaser’s knowledge, threatened against Purchaser which challenges or impairs
Purchaser’s ability to execute or perform its obligations under this Agreement.
          9.2.3 ERISA. Purchaser is not an employee benefit plan (a “Plan”)
subject to Part 4 of Title I of ERISA or Section 4975 of the Internal Revenue
Code of 1986, as amended (the “Code”) or any similar provision of state or local
law, and assets of a Plan are not being used to acquire the Property, Purchaser
is not a “party in interest” (as that term is defined in Section 3(14) of ERISA)
with respect to any Plan that is an investor in Seller, and Purchaser’s
acquisition of the Property will not constitute or result in a prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code or any
similar provision of state or local law.

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          9.2.4 Prohibited Persons and Transactions. Neither Purchaser nor any
of its affiliates, nor any of their respective partners, members, shareholders
or other equity owners, and none of their respective employees, officers,
directors, representatives or agents is, nor will they become, a person or
entity with whom U.S. persons or entities are restricted from doing business
under regulations of OFAC (including those named on OFAC’s Specially Designated
and Blocked Persons List) or under any statute, executive order (including the
September 24, 2001, Executive Order Blocking Property and Prohibiting
Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism),
or other governmental action and is not engaging and will not engage in any
dealings or transactions or be otherwise associated with such persons or
entities.
     9.3 Survival of Representations and Warranties. The representations and
warranties set forth in this Article 9 are made as of the Effective Date and are
remade as of the Closing Date and shall not be deemed to be merged into or
waived by the instruments of Closing, but shall survive the Closing for a period
of six (6) months following the Closing Date (the “Survival Period”); provided,
however, that such representations and warranties shall automatically terminate
if (a) prior to the Closing, Purchaser assigns this Agreement in violation of
Section 12.1 or (b) following the Closing, any direct or indirect transfer,
assignment, conveyance or sale of the Property or any ownership interest in
Purchaser occurs; and provided, further, that the representations and warranties
in Section 9.2.3 and 9.2.4 shall survive the Closing forever. Terms such as “to
Seller’s knowledge,” “to the best of Seller’s knowledge” or like phrases mean
the actual present and conscious awareness or knowledge of Cynthia Tucker
(“Seller’s Representative”), without any duty of inquiry or investigation;
provided that so qualifying Seller’s knowledge shall in no event give rise to
any personal liability on the part of Seller’s Representative, or any of them,
or any other officer or employee of Seller, on account of any breach of any
representation or warranty made by Seller herein. Said terms do not include
constructive knowledge, imputed knowledge, or knowledge Seller or such persons
do not have but could have obtained through further investigation or inquiry. No
broker, agent, or party other than Seller is authorized to make any
representation or warranty for or on behalf of Seller. Each party shall have the
right to bring an action against the other on the breach of a representation or
warranty or covenant hereunder or in the documents delivered by Seller at the
Closing, but only if the party bringing the action for breach first learns of
the breach after Closing and commences the action prior to the end of the
Survival Period. In addition to the limitations set forth above in this
Section 9.3, Seller shall have no liability to Purchaser or any Purchaser
Indemnified Parties for any claims, including, without limitation, Indemnified
Claims, under this Agreement unless the same collectively aggregate more than
$25,000, in which event the full amount of such claims shall be actionable, up
to the amount of $400,000 (the “Cap”). Recovery by Purchaser and the Purchaser
Indemnified Parties against Seller for any claims hereunder, including, without
limitation, Holdback Claims (as defined below) paid out of the Holdback Escrow
(as defined below) shall be limited in the aggregate to the Cap. This
Section 9.3 shall survive Closing.
     9.4 Holdback Escrow.
          9.4.1 At Closing, a portion of the Purchase Price in the amount of
$400,000 (together with interest thereon, the “Holdback Funds”) shall be
deposited into an escrow account (the “Holdback Escrow”) established with Escrow
Agent pursuant to a Holdback

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Escrow Agreement in the form attached hereto as Exhibit I (the “Holdback
Agreement”). The Holdback Funds shall be disbursed by Escrow Agent only as
follows:
               (a) In the event Purchaser becomes aware of a claim with respect
to a breach by Seller of a representation or warranty set forth in Section 9.1
hereof or with respect to an Indemnified Claim for which Seller has expressly
agreed to indemnify Purchaser under this Agreement (a “Holdback Claim”),
Purchaser shall promptly (and in any event prior to the expiration of the
Survival Period) give written notice thereof to Seller and Escrow Agent.
Purchaser shall commence litigation in a court of competent jurisdiction with
respect to a Holdback Claim, if at all, prior to the later of (i) the expiration
of the Survival Period or (ii) twenty-one (21) days after Purchaser’s delivery
to Seller and Escrow Agent of written notice of such Holdback Claim in
accordance with the preceding sentence. In the event of the entry of a final,
non-appealable judgment by a court of competent jurisdiction in favor of
Purchaser with respect to a Holdback Claim of which Purchaser delivered written
notice to Seller and Escrow Agent prior to the expiration of the Survival
Period, Purchaser and Seller shall jointly direct Escrow Agent in writing to
disburse to Purchaser Holdback Funds from the Holdback Escrow in the amount of
Seller’s liability pursuant to such judgment.
               (b) Subject to disbursements of Holdback Funds to pay Holdback
Claims in accordance with the preceding subsection, Escrow Agent shall continue
to hold the Holdback Funds in the Holdback Escrow until, and the Holdback Escrow
shall terminate upon: (i) if Escrow Agent and Seller have not theretofore
received written notice from Purchaser of a Holdback Claim, the expiration of
the Survival Period, or (ii) if, prior to the expiration of the Survival Period,
Escrow Agent and Seller have received written notice from Purchaser of a
Holdback Claim and Purchaser commences litigation in a court of competent
jurisdiction with respect to such Holdback Claim within the time period required
under subsection (a) above, the later to occur of (x) the date on which a final
judgment has been entered, and the expiration of all appeal periods, in any such
litigation, or (y) the expiration of the Survival Period. Upon such termination
of the Holdback Escrow, Escrow Agent shall, without the requirement of receiving
additional notice from Seller or Purchaser, promptly disburse from the Holdback
Escrow to Seller all remaining Holdback Funds, if any.
          9.4.2 This Section 9.4 shall survive Closing.
ARTICLE 10
DEFAULT AND REMEDIES
     10.1 Seller’s Remedies. If Purchaser fails to consummate the purchase of
the Property pursuant to this Agreement or otherwise defaults on its obligations
hereunder at or prior to Closing for any reason except failure by Seller to
perform hereunder, or if prior to Closing any one or more of Purchaser’s
representations or warranties are breached in any material respect, and such
default or breach is not cured by the earlier of the third (3rd) Business Day
after written notice thereof from Seller or the Closing Date (except no notice
or cure period shall apply if Purchaser fails to consummate the purchase of the
Property hereunder), Seller shall be entitled to terminate this Agreement and
receive the Deposit as liquidated damages as Seller’s sole and exclusive remedy
hereunder. It is agreed that the Deposit is a reasonable estimate of just
compensation for the harm that would be caused by Purchaser’s failure to perform
any of its

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obligations hereunder and that such harm is one that is incapable or very
difficult to accurately estimate or calculate, that such amount is not intended
as a penalty. Subject to the indemnity obligations of Purchaser which survive
termination of this Agreement hereunder, receipt by Seller of the Deposit in the
event Purchaser fails to perform any of its obligations hereunder shall
constitute full satisfaction of any and all of Purchaser’s obligations
hereunder.
     10.2 Purchaser’s Remedies. If Seller fails to consummate the sale of the
Property pursuant to this Agreement or otherwise defaults on its obligations
hereunder at or prior to Closing for any reason except failure by Purchaser to
perform hereunder, and such default or breach is not cured by the earlier of the
third (3rd) Business Day after written notice thereof from Purchaser or the
Closing Date (except no notice or cure period shall apply if Seller fails to
consummate the sale of the Property hereunder), Purchaser shall have the right
to elect one of the following remedies as its sole and exclusive remedy: (i) to
terminate this Agreement, receive a refund of the Deposit and sue for damages,
(ii) specific performance of Seller’s obligations under this Agreement, or
(iii) to waive such breach and close this transaction subject to such breach.
Notwithstanding anything herein to the contrary, Purchaser shall not be entitled
to damages in excess of Purchaser’s out of pocket costs and expenses in
connection with this Agreement and the Property, not to exceed $200,000. IN NO
EVENT SHALL SELLER’S DIRECT OR INDIRECT PARTNERS, SHAREHOLDERS, MEMBERS, OWNERS,
OR AFFILIATES, ANY OFFICER, DIRECTOR, EMPLOYEE OR AGENT OF THE FOREGOING, OR ANY
AFFILIATE OR CONTROLLING PERSON THEREOF HAVE ANY LIABILITY FOR ANY CLAIM, CAUSE
OF ACTION OR OTHER LIABILITY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
PROPERTY, WHETHER BASED ON CONTRACT, COMMON LAW, STATUTE, EQUITY OR OTHERWISE.
     10.3 Attorneys’ Fees. In the event either party hereto employs an attorney
in connection with claims by one party against the other arising from the
operation of this Agreement, the non-prevailing party shall pay the prevailing
party all reasonable fees and expenses, including attorneys’ fees, incurred in
connection with such claims.
     10.4 Other Expenses. If this Agreement is terminated due to the default of
a party, then the defaulting party shall pay any fees or charges due to Escrow
Agent, including, without limitation, any escrow cancellation fees or charges
and any fees or charges due to the Title Company for preparation and/or
cancellation of the Title Commitment.
ARTICLE 11
DISCLAIMERS, RELEASE AND INDEMNITY
     11.1 Disclaimers By Seller. Except as expressly set forth in this
Agreement, it is understood and agreed that Seller and Seller’s agents or
employees have not at any time made and are not now making, and they
specifically disclaim, any warranties, representations or guaranties of any kind
or character, express or implied, with respect to the Property, including, but
not limited to, warranties, representations or guaranties as to (a) matters of
title (other than Seller’s limited warranty of title to be contained in the
Deed), (b) environmental matters relating to the Property or any portion
thereof, including, without limitation, the presence of Hazardous Materials in,
on, under or in the vicinity of the Property, (c) geological conditions,
including, without limitation, subsidence, subsurface conditions, water table,
underground water reservoirs,

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limitations regarding the withdrawal of water, and geologic faults and the
resulting damage of past and/or future faulting, (d) whether, and to the extent
to which the Property or any portion thereof is affected by any stream (surface
or underground), body of water, wetlands, flood prone area, flood plain,
floodway or special flood hazard, (e) drainage, (f) soil conditions, including
the existence of instability, past soil repairs, soil additions or conditions of
soil fill, or susceptibility to landslides, or the sufficiency of any
undershoring, (g) the presence of endangered species or any environmentally
sensitive or protected areas, (h) zoning or building restrictions or
entitlements to which the Property or any portion thereof may be subject,
(i) the availability of any utilities to the Property or any portion thereof
including, without limitation, water, sewage, gas and electric, (j) usages of
adjoining property, (k) access to the Property or any portion thereof, (l) the
value, compliance with the plans and specifications, size, location, age, use,
design, quality, description, suitability, structural integrity, operation,
title to, or physical or financial condition of the Property or any portion
thereof, or any revenue, income, expenses, charges, liens, encumbrances, rights
or claims on or affecting or pertaining to the Property or any part thereof,
(m) the condition or use of the Property or compliance of the Property with any
or all past, present or future federal, state or local ordinances, rules,
regulations or laws, building, fire or zoning ordinances, codes or other similar
laws, (n) the existence or non-existence of underground storage tanks, surface
impoundments, or landfills, (o) any other matter affecting the stability and
integrity of the Property, (p) the potential for further development of the
Property, (q) the merchantability of the Property or fitness of the Property for
any particular purpose, (r) the truth, accuracy or completeness of the Property
Documents, (s) tax consequences, or (t) any other matter or thing with respect
to the Property.
     11.2 Sale “As Is, Where Is”. Purchaser acknowledges and agrees that upon
Closing, Seller shall sell and convey to Purchaser and Purchaser shall accept
the Property “AS IS, WHERE IS, WITH ALL FAULTS.” Except as expressly set forth
in this Agreement, Purchaser has not relied and will not rely on, and Seller has
not made and is not liable for or bound by, any express or implied warranties,
guarantees, statements, representations or information pertaining to the
Property or relating thereto (including specifically, without limitation,
Property information packages distributed with respect to the Property) made or
furnished by Seller, or any property manager, real estate broker, agent or third
party representing or purporting to represent Seller, to whomever made or given,
directly or indirectly, orally or in writing. Purchaser represents that it is a
knowledgeable, experienced and sophisticated purchaser of real estate and that,
except as expressly set forth in this Agreement, it is relying solely on its own
expertise and that of Purchaser’s consultants in purchasing the Property and
shall make an independent verification of the accuracy of any documents and
information provided by Seller. Purchaser has conducted or will conduct such
inspections and investigations of the Property as Purchaser deems necessary,
including, but not limited to, the physical and environmental conditions
thereof, and shall rely upon same. By failing to terminate this Agreement prior
to the expiration of the Inspection Period, Purchaser acknowledges that Seller
has afforded Purchaser a full opportunity to conduct such investigations of the
Property as Purchaser deemed necessary to satisfy itself as to the condition of
the Property and the existence or non-existence or curative action to be taken
with respect to any Hazardous Materials on or discharged from the Property, and
will rely solely upon same and not upon any information provided by or on behalf
of Seller or its agents or employees with respect thereto, other than such
representations, warranties and covenants of Seller as are expressly set forth
in this Agreement. Upon Closing, Purchaser shall assume the risk that adverse
matters, including, but not limited to, adverse physical or

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construction defects or adverse environmental, health or safety conditions, may
not have been revealed by Purchaser’s inspections and investigations. Purchaser
hereby represents and warrants to Seller that: (a) Purchaser is represented by
legal counsel in connection with the transaction contemplated by this Agreement;
and (b) Purchaser is purchasing the Property for business, commercial,
investment or other similar purpose and not for use as Purchaser’s residence.
Purchaser waives any and all rights or remedies it may have or be entitled to,
deriving from disparity in size or from any significant disparate bargaining
position in relation to Seller. EXCEPT AS SET FORTH HEREIN, SELLER HEREBY
SPECIFICALLY DISCLAIMS ANY WARRANTY, GUARANTY, ORAL OR WRITTEN, EXPRESS OR
IMPLIED OR ARISING BY OPERATION OF LAW OR OTHERWISE, WITH RESPECT TO THE
PROPERTY.
     11.3 Seller Released from Liability. Purchaser acknowledges that it has had
or will during the Inspection Period have ample opportunity to inspect the
Property and observe its physical characteristics and existing conditions and
the opportunity to conduct such investigation and study on and of the Property
and adjacent areas as Purchaser deems necessary, and, except as otherwise
expressly set forth in this Agreement, Purchaser hereby FOREVER RELEASES AND
DISCHARGES Seller and Lender from all responsibility and liability, including
without limitation, liabilities and responsibilities, including the landlord’s
obligations under the Leases, relating to the physical, environmental or legal
compliance status of the Property, whether arising before or after the Effective
Date, and liabilities under the Comprehensive Environmental Response,
Compensation and Liability Act Of 1980 (42 U.S.C. Sections 9601 et seq.), as
amended (“CERCLA”), regarding the condition, valuation, salability or utility of
the Property, or its suitability for any purpose whatsoever (including, but not
limited to, with respect to the presence in the soil, air, structures and
surface and subsurface waters, of Hazardous Materials or other materials or
substances that have been or may in the future be determined to be toxic,
hazardous, undesirable or subject to regulation and that may need to be
specially treated, handled and/or removed from the Property under current or
future federal, state and local laws, regulations or guidelines, and any
structural and geologic conditions, subsurface soil and water conditions and
solid and hazardous waste and Hazardous Materials on, under, adjacent to or
otherwise affecting the Property). Except as otherwise expressly set forth in
this Agreement, Purchaser further hereby WAIVES (and by Closing this transaction
will be deemed to have WAIVED) any and all objections and complaints (including,
but not limited to, federal, state and local statutory and common law based
actions, and any private right of action under any federal, state or local laws,
regulations or guidelines to which the Property is or may be subject, including,
but not limited to, CERCLA) concerning the physical characteristics and any
existing conditions of the Property, including, without limitation, the
landlord’s obligations under the Leases relating to the physical, environmental
or legal compliance status of the Property, whether arising before, on or after
the Effective Date. Purchaser further hereby assumes the risk of changes in
applicable laws and regulations relating to past, present and future
environmental conditions on the Property and the risk that adverse physical
characteristics and conditions, including, without limitation, the presence of
Hazardous Materials or other contaminants, may not have been revealed by its
investigation.
     11.4 “Hazardous Materials” Defined. For purposes hereof, “Hazardous
Materials” means “Hazardous Material,” “Hazardous Substance,” “Pollutant or
Contaminant,” and “Petroleum” and “Natural Gas Liquids,” as those terms are
defined or used in Section 101 of CERCLA, and any other substances regulated
because of their effect or potential effect on public

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health and the environment, including, without limitation, PCBs, lead paint,
asbestos, urea formaldehyde, radioactive materials, mold, radon, putrescible
materials, and infectious materials.
     11.5 Release and Waiver. Purchaser hereby waives any and all claims,
counterclaims, defenses, actions, causes of action, suits, liabilities, damages,
costs and expenses, including attorneys’ fees, of every kind and character,
whether existing by statute or at common law, whether arising at law, in equity
or otherwise, accrued or unaccrued, known or unknown, direct or contingent,
whether arising before, on or after the date hereof, in connection with this
Agreement, the Property or otherwise (collectively, “Claims”), against iStar
Tara LLC, a Delaware limited liability company (“Lender”), and all of its
principals, present and former officers, directors, shareholders, partners,
members, representatives, employees, agents, assignees, affiliates,
subsidiaries, attorneys, insurers, successors, predecessors, heirs, assigns and
any other persons or entities acting on behalf of Lender, including, without
limitation, iStar Financial Inc., a Maryland corporation (collectively, the
“Lender Parties”, and each individually, a “Lender Party”). Purchaser further
hereby releases and discharges each of the Lender Parties from any and all
Claims and covenants not to sue any Lender Party in connection with any Claim.
The provisions of this Section 11.5 shall survive the Closing or termination of
this Agreement.
     11.6 Indemnity.
          11.6.1 Purchaser agrees to indemnify, defend and hold harmless the
Seller-Lender Indemnified Parties from and against any Indemnified Claims of any
kind or nature which arise or accrue after Closing (through no act or omission
of Seller) and which are in any way related to the ownership, maintenance, or
operation of the Property by Purchaser and its successors and assigns,
including, without limitation, in connection with Hazardous Materials.
          11.6.2 Notwithstanding anything herein to the contrary, in each
instance in this Agreement and the agreements and instruments contemplated
hereby where Seller agrees to indemnify any of the Purchaser Indemnified Parties
with respect to any Indemnified Claim, such indemnification obligation shall not
apply to any Indemnified Claim incurred by any Purchaser Indemnified Party
arising from or relating to a matter for which Purchaser received a credit
against the Purchase Price.
     11.7 Survival. The terms and conditions of this Article 11 shall expressly
survive the Closing, and shall not merge with the provisions of the Deed or any
other closing documents.
     11.8 Acknowledgement. Purchaser acknowledges and agrees that the
disclaimers and other agreements set forth herein are an integral part of this
Agreement and that Seller would not have agreed to sell the Property to
Purchaser for the Purchase Price without the disclaimers and other agreements
set forth above.
ARTICLE 12
MISCELLANEOUS
     12.1 Parties Bound; Assignment. This Agreement, and the terms, covenants,
and conditions herein contained, shall inure to the benefit of and be binding
upon the heirs, personal

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representatives, successors, and assigns of each of the parties hereto. Neither
party shall assign any right, title or interest hereunder without the written
consent of the other party. Notwithstanding the foregoing, (i) Purchaser shall
have the right, without obtaining Seller’s consent thereto, to assign its
interest herein to any entity owned in whole or in part, and controlled, by
Purchaser, in which event Purchaser shall promptly (and in any event prior to
Closing) deliver to Seller a copy of the document or documents evidencing any
such assignment, and (ii) Seller shall have the right, without obtaining
Purchaser’s consent thereto, to assign its interest herein to Lender or any
affiliate thereof in connection with a conveyance of the Property to Lender or
such affiliate, in which event Seller shall promptly (and in any event prior to
Closing) deliver to Purchaser a copy of the document or documents evidencing any
such assignment. No assignment permitted under this Agreement shall relieve the
assigning party of any liability hereunder, whether arising before or after the
date of such assignment.
     12.2 Headings. The article, section, subsection, paragraph and/or other
headings of this Agreement are for convenience only and in no way limit or
enlarge the scope or meaning of the language hereof.
     12.3 Invalidity and Waiver. If any portion of this Agreement is held
invalid or inoperative, then so far as is reasonable and possible the remainder
of this Agreement shall be deemed valid and operative, and, to the greatest
extent legally possible, effect shall be given to the intent manifested by the
portion held invalid or inoperative. The failure by either party to enforce
against the other any term or provision of this Agreement shall not be deemed to
be a waiver of such party’s right to enforce against the other party the same or
any other such term or provision in the future.
     12.4 Governing Law. This Agreement shall, in all respects, be governed,
construed, applied, and enforced in accordance with the law of the State of New
York.
     12.5 Survival. The provisions of this Agreement that contemplate
performance after the Closing and the obligations of the parties not fully
performed at the Closing (other than any unfulfilled closing conditions which
have been waived or deemed waived by the other party) shall survive the Closing
and shall not be deemed to be merged into or waived by the instruments of
Closing.
     12.6 Entirety and Amendments. This Agreement embodies the entire agreement
between the parties and supersedes all prior agreements and understandings
relating to the Property. This Agreement may be amended or supplemented only by
an instrument in writing executed by the party against whom enforcement is
sought. All Schedules and Exhibits hereto are incorporated herein by this
reference for all purposes.
     12.7 Time. Time is of the essence in the performance of this Agreement.
     12.8 Confidentiality. All information disclosed to Purchaser or its agents
in connection with the Property (whether prior to, on or after the Effective
Date) or pursuant to this Agreement is confidential and Purchaser agrees to keep
such information confidential and not to disclose such information to any other
person or entity whatsoever until the Closing under this Agreement has been
consummated, except as required by law or by regulatory or judicial process

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(it being expressly acknowledged that Purchaser shall have the right to disclose
the terms hereof in connection with, and to attach a copy of this Agreement to,
any Current Report on Form 8-K, Quarterly Report on Form 10-Q, Annual Report on
Form 10-K and any other report required to be filed or furnished by the
Purchaser or its owner pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Securities Exchange Act of 1934, as amended, or the applicable rules and
regulations of any exchange on which the shares of Purchaser’s owner are
listed), and except that Purchaser may disclose such information to its
employees, agents, attorneys, accountants and consultants in connection with the
transaction contemplated in this Agreement. The provisions of this Section 12.8
shall survive termination of this Agreement.
     12.9 No Electronic Transactions. The parties hereby acknowledge and agree
this Agreement shall not be executed, entered into, altered, amended or modified
by electronic means, except that signature pages may be exchanged by pdf
attachments to emails. Without limiting the generality of the foregoing, the
parties hereby agree the transactions contemplated by this Agreement shall not
be conducted by electronic means, except as specifically set forth in the
“Notices” section of this Agreement.
     12.10 Notices. All notices required or permitted hereunder shall be in
writing and shall be served on the parties at the addresses set forth in
Section 1.3. Any such notices shall, unless otherwise provided herein, be given
or served (a) by depositing the same in the United States mail, postage paid,
certified and addressed to the party to be notified, with return receipt
requested, (b) by overnight delivery using a nationally recognized overnight
courier, (c) by personal delivery or (d) by facsimile or e-mail transmission
during normal business hours with a confirmation copy delivered by another
method permitted under this Section 12.10. Notice given in accordance herewith
for all permitted forms of notice shall be effective upon posting to the
applicable delivery method or service. In no event shall this Agreement be
altered, amended or modified by electronic mail or electronic record. A party’s
address may be changed by written notice to the other party; provided, however,
that no notice of a change of address shall be effective until actual receipt of
such notice. Copies of notices are for informational purposes only, and a
failure to give or receive copies of any notice shall not be deemed a failure to
give notice. Notices given by counsel to the Purchaser shall be deemed given by
Purchaser and notices given by counsel to the Seller shall be deemed given by
Seller.
     12.11 Construction. The parties acknowledge that the parties and their
counsel have reviewed and revised this Agreement and agree that the normal rule
of construction to the effect that any ambiguities are to be resolved against
the drafting party shall not be employed in the interpretation of this Agreement
or any exhibits or amendments hereto.
     12.12 Calculation of Time Periods; Business Day. Unless otherwise
specified, in computing any period of time described herein, the day of the act
or event after which the designated period of time begins to run is not to be
included and the last day of the period so computed is to be included, unless
such last day is not a Business Day, in which event the period shall run until
the end of the next day which is a Business Day. The last day of any period of
time described herein shall be deemed to end at 5:00 p.m. local time in the
state in which the Real Property is located. As used herein, the term “Business
Day” means any day that is not a Saturday, Sunday or legal holiday for national
banks in the city in which the Real Property is located.

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     12.13 Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, and all
of such counterparts shall constitute one Agreement. To facilitate execution of
this Agreement, the parties may execute and exchange, by telephone facsimile or
pdf attachments to emails, counterparts of the signature pages, provided that
executed originals thereof are forwarded to the other party on the same day by
any of the delivery methods set forth in Section 12.10 other than facsimile or
electronic mail.
     12.14 Recordation. Without the prior written consent of Seller, but subject
to the filings with the SEC permitted under Section 12.8, there shall be no
recordation of either this Agreement or any memorandum hereof, or any affidavit
pertaining hereto, and any such recordation of this Agreement or memorandum or
affidavit by Purchaser without the prior written consent of Seller shall
constitute a default hereunder by Purchaser, whereupon Seller shall have the
remedies set forth in Section 10.1 hereof. In addition to any such remedies,
Purchaser shall be obligated to execute an instrument in recordable form
releasing this Agreement or memorandum or affidavit, and Purchaser’s obligations
pursuant to this Section 12.14 shall survive any termination of this Agreement
as a surviving obligation.
     12.15 Further Assurances. In addition to the acts and deeds recited herein
and contemplated to be performed, executed and/or delivered by either party at
Closing, each party agrees to perform, execute and deliver, but without any
obligation to incur any additional liability or expense, on or after the Closing
any further deliveries and assurances as may be reasonably necessary to
consummate the transactions contemplated hereby or to further perfect the
conveyance, transfer and assignment of the Property to Purchaser.
     12.16 Discharge of Obligations. The acceptance of the Deed by Purchaser
shall be deemed to be a full performance and discharge of every representation
and warranty made by Seller herein and every agreement and obligation on the
part of Seller to be performed pursuant to the provisions of this Agreement,
except those which are herein specifically stated to survive Closing.
     12.17 ERISA. Under no circumstances shall Purchaser have the right to
assign this Agreement to any person or entity owned or controlled by an employee
benefit plan if Seller’s sale of the Property to such person or entity would, in
the reasonable opinion of Seller’s ERISA advisors or consultants, create or
otherwise cause a “prohibited transaction” under ERISA. In the event Purchaser
assigns this Agreement or transfers any ownership interest in Purchaser, and
such assignment or transfer would make the consummation of the transaction
hereunder a “prohibited transaction” under ERISA and necessitate the termination
of this Agreement then, notwithstanding any contrary provision which may be
contained herein, Seller shall have the right to terminate this Agreement.
     12.18 Third Party Beneficiary. Lender shall be a third-party beneficiary of
this Agreement and of the documents to be executed and delivered at Closing.
Except as set forth in the preceding sentence, the provisions of this Agreement
and of the documents to be executed and delivered at Closing are and will be for
the benefit of Seller and Purchaser only and are not for the benefit of any
third party, and accordingly, no third party shall have the right to enforce the
provisions of this Agreement or of the documents to be executed and delivered at
Closing. The designation of Lender as a third-party beneficiary of this
Agreement and the documents to

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be executed and delivered at Closing shall not alter, amend or otherwise affect
the provisions of Section 11.5 hereof.
     12.19 Reporting Person. Purchaser and Seller hereby designate the Title
Company as the “reporting person” pursuant to the provisions of Section 6045(e)
of the Internal Revenue Code of 1986, as amended.
     12.20 Severability. If any provision of this Agreement shall be prohibited
or invalid under applicable law, the Agreement shall be ineffective only to such
extent, without invalidating the remainder of this Agreement.
     12.21 Commissions. Seller shall be responsible to Broker for a real estate
sales commission at Closing (but only in the event of a Closing in strict
accordance with this Agreement) in accordance with a separate agreement between
Seller and Broker. Under no circumstances shall Seller owe a commission or other
compensation directly to any agent or person. Any cooperating broker shall not
be an affiliate, subsidiary or related in any way to Purchaser. Other than as
stated above in this Section 12.21, Seller and Purchaser each represent and
warrant to the other that no real estate brokerage commission is payable to any
person or entity in connection with the transaction contemplated hereby, and
each agrees to and does hereby indemnify and hold the other harmless against the
payment of any commission to any other person or entity claiming by, through or
under Seller or Purchaser, as applicable. This indemnification shall extend to
any and all claims, liabilities, costs and expenses (including reasonable
attorneys’ fees and litigation costs) arising as a result of such claims and
shall survive the Closing.
     12.22 Minnesota Provisions. Seller has disclosed to Purchaser in writing,
and Purchaser acknowledges receipt prior to execution of this Agreement of
Seller’s disclosures, that: (i) Seller does not know of any wells on the
Property; and (ii) sewage from the Property goes to a facility permitted by the
Minnesota Pollution Control Agency.
     12.23 Non-Disparagement. Purchaser shall not, and shall cause its agents
and affiliates not to, make any comments or disclose any information that is
disparaging toward Seller, its affiliates or its principals. Seller shall not,
and shall cause its agents and affiliates not to, make any comments or disclose
any information that is disparaging toward Purchaser, its affiliates or its
principals.
[SIGNATURE PAGES AND EXHIBITS TO FOLLOW]

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SIGNATURE PAGE TO PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
615 2ND AVENUE SOUTH – MINNEAPOLIS LLC
AND
PEBBLEBROOK OWNER LLC
     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year written below.

                  SELLER:    
 
                615 2nd Avenue South – Minneapolis LLC, a Delaware limited
liability company    
 
           
Date executed by Seller
  By:   /s/ Cynthia Tucker
 
   
 
  Name:   Cynthia Tucker    
May 26, 2010
  Title:   Senior Vice President    
 
                PURCHASER:    
 
                Gator Owner LLC, a Delaware limited liability company    
 
           
Date executed by Purchaser
  By:   /s/ Thomas C. Fisher
 
   
 
  Name:   Thomas C. Fisher    
May 27, 2010
  Title:   Vice President    

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JOINDER BY ESCROW AGENT
Escrow Agent has executed this Agreement in order to confirm that Escrow Agent
has received and shall hold the Deposit required to be deposited under this
Agreement and the interest earned thereon, in escrow, and shall disburse the
Deposit, and the interest earned thereon, pursuant to the provisions of this
Agreement.

                  ESCROW AGENT:    
 
                Chicago Title Insurance Company    
 
           
Date executed by Escrow Agent
  By:
Name:   /s/ Linda Tyrrell
 
Linda Tyrrell    
May 27, 2010
  Title:   AVP/Senior Escrow Officer    

 

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LIST OF EXHIBITS AND SCHEDULES

         
Schedule 2.1.3
  –   Tangible Personal Property
 
       
Schedule 7.9
  –   Terminated Employees
 
       
Schedule 9.1.9
  –   Litigation
 
       
Exhibit A
  –   Legal Description of Land
 
       
Exhibit B
  –   Form of Limited Warranty Deed
 
       
Exhibit C
  –   Form of Bill of Sale
 
       
Exhibit D
  –   Form of FIRPTA Certificate
 
       
Exhibit E
  –   Form of ERISA Letter
 
       
Exhibit F
  –   Form of Assignment and Assumption Agreement
 
       
Exhibit G
  –   Form of Tenant Notices
 
       
Exhibit H
  –   Rent Roll
 
       
Exhibit I
  –   Form of Holdback Agreement
 
       
Exhibit J-1
  –   Form of Athletic Space Estoppel
 
       
Exhibit J-2
  –   Form of Restaurant Space Estoppel