Document:

exv10w3

Exhibit 10.3

Execution Form

MEMBERSHIP INTEREST PURCHASE AGREEMENT

by and among

PLATINUM OWNERCO, LLC,

PLATINUM LEASECO, LLC,

and

SOUTH 17TH STREET INTERMEZZCO, LLC

as

THE SELLER PARTIES,

and

SPARTANS OWNER LLC,

and

SPARTANS LESSEE LLC,

as

THE PURCHASER PARTIES

Dated as of October 13, 2010

for the

Sofitel Philadelphia

 

 

MEMBERSHIP INTEREST PURCHASE AGREEMENT

THIS MEMBERSHIP INTEREST PURCHASE AGREEMENT (the “Agreement”) is made and entered into as of the
13th day of October, 2010, by and among PLATINUM OWNERCO, LLC, a Delaware limited liability
company (“Platinum OwnerCo”), PLATINUM LEASECO, LLC, a Delaware limited liability company
(“Platinum LeaseCo”), SOUTH 17TH STREET INTERMEZZCO, LLC, a Delaware limited liability company
(“MezzCo” and together with Platinum LeaseCo and Platinum OwnerCo, individually a “Seller Party”
and collectively, the “Seller Parties”), SPARTANS OWNER LLC, a Delaware limited liability company
(“Spartans Owner”), and SPARTANS LESSEE LLC, a Delaware limited liability company (“Spartans
Lessee” and together with Spartans Owner, individually a “Purchaser Party” and collectively, the
“Purchaser Parties”).

RECITALS

     A. Platinum OwnerCo owns all of the outstanding membership interests (the “Mezz OwnerCo
Interests”) in South 17th Street OwnerCo Mezzanine, LLC, a Delaware limited liability company (the
“Mezz OwnerCo LLC”) (subject to the agreement to transfer certain of such Mezz OwnerCo Interests to
MezzCo as hereinafter set forth), which in turn owns all of the outstanding membership interests in
South 17th Street OwnerCo, LLC, a Delaware limited liability company (“OwnerCo LLC”), which in turn
owns the hotel facility located at 120 South 17th Street, Philadelphia, Pennsylvania, and commonly
known as Sofitel Philadelphia (the “Hotel”), as more specifically described in this Agreement.

     B. Platinum LeaseCo owns all of the outstanding membership interests (the “Mezz LeaseCo
Interests” and, together with Mezz OwnerCo Interests, the “Target Interests”) in South 17th Street
LeaseCo Mezzanine, LLC, a Delaware limited liability company (“Mezz LeaseCo LLC” and, together with
Mezz OwnerCo LLC, individually a “Target Party” and collectively, the “Target Parties”), which in
turn owns all of the outstanding membership interests in South 17th Street LeaseCo, LLC, a Delaware
limited liability company (“LeaseCo LLC” or “Operating Tenant”), which in turn leases the Hotel
from OwnerCo LLC pursuant to the Operating Lease (as defined herein).

     C. The Seller Parties desire to sell the Target Interests to the Purchaser Parties, and the
Purchaser Parties desire to purchase from the Seller Parties, the Target Interests, on the terms
set forth in this Agreement.

AGREEMENT

     NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises,
representations, warranties, and covenants hereinafter set forth and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound hereby, the Parties hereto agree as follows:

     1. DEFINITIONS.

     Capitalized terms used in this Agreement shall have the meanings set forth below.

 

     “Accor Member” means ABL Platinum, LLC, a Delaware limited liability company.

     “Accountant” shall mean KPMG LLP, a U.S. limited liability partnership.

     “Additional Deposit” has the meaning set forth in Section 2(c)(ii) hereof.

     “Adjustment Time” has the meaning set forth in Section 7(a) hereof.

     “Affiliate” means a Person that, directly or indirectly, controls, is controlled by, or is
under common control with, such Person. For purposes of this Agreement, “control”, when used with
respect to any Person, means the power to direct or cause the direction of the management and
policies of such Person, affirmatively (by direction) and negatively (by veto), directly or
indirectly, whether through the ownership of voting securities, by contract or otherwise, and the
terms “controlling” and “controlled” have meanings correlative to the foregoing.

     “Agreement” has the meaning set forth in the preface above.

     “Applicable Law” means (i) all statutes, laws, common law, rules, regulations, ordinances,
codes or other legal requirements of any Governmental Authority, stock exchange, board of fire
underwriters and similar quasi governmental authority, and (ii) any judgment, injunction, order or
other similar requirement of any court or other adjudicatory authority, in effect at the time in
question and in each case to the extent the Person or property in question is subject to the same.

     “Asset Management Agreement” means that certain Asset Management Agreement dated as of January
5, 2007, between Operating Tenant and SCS Hotels, Inc., an Arizona corporation.

     “Audited Financial Statements” means audited annual financial statements for Platinum OwnerCo
redacted to include only information related to the Hotel for 2008 and 2009 to be prepared by the
Accountant.

     “Base Management Fee” has the meaning given in the Management Agreement.

     “Bookings” has the meaning set forth in Section 2(a)(xviii) hereof.

     “Books and Records” has the meaning set forth in Section 2(a)(xv) hereof.

     “Business Day” means a day, other than a Saturday or Sunday, on which commercial banks in the
Commonwealth of Pennsylvania are open for the transaction of business.

     “Capital Improvements” has the meaning given in the Management Agreement.

     “Cash on Hand” means all cash on hand at the Hotel, including any cash on deposit in the
Operating Account, but in any event excluding any Owner Cash or cash on deposit in the Replacement
Reserve.

     “Capital Budget” has the meaning given in the Management Agreement.

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     “Capped Claim” has the meaning set forth in Section 14(e) hereof.

     “Closing” has the meaning set forth in Section 2(g)hereof.

     “Closing Date” has the meaning set forth in Section 2(g) hereof.

     “Closing Documents” has the meaning set forth in Section 5(b)hereof.

     “Closing Escrow” has the meaning set forth in Section 2(g) hereof.

     “Code” means the Internal Revenue Code of 1986, as amended from time to time or any successor
or federal income tax code.

     “Competitor” has the meaning given in the Management Agreement.

     “Confidential Information” has the meaning set forth in Section 18(n)(ii).

     “Contract” or “Contracts” means, individually, an Equipment Lease or Operating Agreement and,
collectively, the Equipment Leases and the Operating Agreements.

     “Deposit” has the meaning set forth in Section 2(c)(ii).

     “Due Diligence Period” has the meaning set forth in Section 3(a)(i).

     “Due Diligence Contingency” has the meaning set forth in Section 3(a)(i).

     “Effective Date” means the date of this Agreement.

     “Employees” means all persons currently employed by Manager for work in or about the Hotel.

     “Equipment Leases” has the meaning set forth in Section 2(a)(xi) hereof.

     “Escrow Agent” means the Title Company.

     “Excluded Property” shall mean those assets set forth in Section 2(b) hereof.

     “Existing Survey” means that certain ALTA/ACSM Survey prepared by Millman Surveying, Inc.,
dated November 14, 2006, as identified as MSI Site No. 10016.

     “F&B” has the meaning set forth in Section 2(a)(vi) hereof.

     “FF&E” shall mean those assets set forth in Section 2(a)(iii) hereof.

     “Governmental Authority” means any federal, state or local government or other political
subdivision thereof, including, without limitation, any Person exercising executive, legislative,
judicial, regulatory or administrative governmental powers or functions, in each case to the extent
the same has jurisdiction over the Person or property in question.

     “Gross Revenues” has the meaning given in the Management Agreement.

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     “Hazardous Substances” means any hazardous or toxic substances, materials or waste, pollution,
contamination or radiation, whether in solid, semisolid, liquid or gaseous form, including, without
limitation, asbestos, petroleum or petroleum by-products, toxic mold or fungi and polychlorinated
biphenyls.

     “Hotel” has the meaning given in the above Recitals.

     “Improvements” has the meaning set forth in Section 2(a)(ii) hereof.

     “Incentive Management Fee” has the meaning given in the Management Agreement.

     “Indemnification Loss” means, with respect to any Indemnified Party, any actual (and not
contingent) liability, damage, loss, cost or expense, including, without limitation, reasonable
attorneys fees and expenses and court costs, incurred by such Indemnified Party as a result of the
act, omission or occurrence in question.

     “Indemnified Party” has the meaning set forth in Section 14(c) hereof.

     “Indemnifying Party” has the meaning set forth in Section 14(c)hereof.

     “Indemnity Cap” has the meaning set forth in Section 14(e) hereof.

     “Indemnity Threshold” has the meaning set forth in Section 14(e) hereof.

     “Initial Deposit” has the meaning set forth in Section 2(c)(i) hereof.

     “Inspections” has the meaning set forth in Section 3(a)(ii) hereof.

     “Intangible Property” means the accounting and business records and books relating to the
operation of the Hotel; telephone numbers and post office boxes for the Hotel; all software used in
connection with the operation of the Hotel (except for Excluded Property), and all other
non-proprietary items owned by OwnerCo LLC or Operating Tenant and used in connection with the
operation of the Hotel, including, without limitation, all correspondence, hotel guest and mailing
lists, guest histories (but only to the extent such guest histories relate to the Hotel and do not
include guest histories for other hotels owned or operated by OwnerCo LLC or Operating Tenant or
their Affiliates) and other marketing information, reservation lists, keys and lock and safe
combinations, in all instances to the extent same is not property of the Manager pursuant to the
Management Agreement or otherwise; all trade names, domain names and websites, to the extent owned
by OwnerCo LLC or Operating Tenant; all trade names, domain names and websites, to the extent owned
by OwnerCo LLC or Operating Tenant.

     “IT Systems” has the meaning set forth in Section 2(a)(v) hereof.

     “Land” has the meaning set forth in Section 2(a)(i) hereof.

     “LeaseCo LLC” has the meaning given in the above Recitals.

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     “Liability” means any 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.

     “Licenses and Permits” has the meaning set forth in Section 2(a)(xiii) hereof.

     “Losses” has the meaning set forth in Section 14(a) hereof.

     “Manager’s Estoppel Certificate” has the meaning set forth in Section 3(c).

     “Management Agreement” means that certain Management Agreement dated January 5, 2007 between
Operating Tenant and Manager, as amended by that certain First Amendment dated February 2009, and
that certain Second Amendment dated as of September 24, 2010.

     “Manager” means Accor Business and Leisure Management LLC, a Delaware limited liability
company as “Manager” under and as defined in the Management Agreement.

     “Material Contract” means any Contract requiring aggregate annual payments in excess of Ten
Thousand and 00/100 Dollars ($10,000.00) for any year during the term of such Contract after the
Closing and/or any Contract with a term exceeding one year in duration as of the Effective Date.

     “Mezz LeaseCo Interests” has the meaning given in the above Recitals.

     “Mezz LeaseCo LLC” has the meaning given in the above Recitals.

     “Mezz OwnerCo Interests” has the meaning given in the above Recitals.

     “Mezz OwnerCo LLC” has the meaning given in the above Recitals.

     “Minimum Equity Investment” has the meaning given in the Management Agreement.

     “Mortgage Loan” means that certain mortgage loan in the original principal amount of Fifty-Six
Million Seventy Thousand and 00/100 Dollars ($56,070,000.00) evidenced by the Mortgage Loan
Agreement.

     “Mortgage Loan Agreement” means that certain Loan Agreement dated January 5, 2007, between
OwnerCo LLC, as Borrower, and Greenwich Capital Financial Products, Inc., as Lender, as amended
from time to time.

     “Net Operating Income” has the meaning given in the Management Agreement.

     “Net Worth Amount” has the meaning set forth in Section 12(l) hereof.

     “MezzCo” has the meaning given in the above preface.

     “New Survey Defect” has the meaning set forth in Section 4(c)(iii) hereof.

     “New Title Exception” has the meaning set forth in Section 4(c)(iii) hereof.

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     “New Title and Survey Election Notice” has the meaning set forth in Section 4(c)(iii)
hereof.

     “New Title and Survey Objection Notice” has the meaning set forth in Section 4(c)(iii)
hereof.

     “New Title and Survey Response Notice” has the meaning set forth in Section 4(c)(iii)
hereof.

     “Non-Foreign Affidavit” means an affidavit duly executed by OwnerCo LLC pursuant to Section
1445 of the Code.

     “OFAC” has the meaning set forth in Section 9(a)(xxxii) hereof.

     “Operating Account” has the meaning given in the Management Agreement.

     “Operating Agreements” means all maintenance, repair, improvement, service and supply
contracts, booking and reservation agreements, credit card service agreements, and all other
agreements for goods or services which are held by OwnerCo LLC or Operating Tenant in connection
with the Hotel, other than the Tenant Leases, Equipment Leases, and Licenses and Permits, together
with all deposits made or held by OwnerCo LLC or Operating Tenant thereunder.

     “Operating Budget” has the meaning given in the Management Agreement.

     “Operating Expenses” has the meaning given in the Management Agreement.

     “Operating Lease” means that certain Hotel Lease dated January 5, 2007, between OwnerCo LLC,
as landlord, and Operating Tenant, as tenant, with respect to the Hotel.

     “Operating Tenant” has the meaning given in the above Recitals.

     “Operating Year” has the meaning given in the Management Agreement.

     “Ordinary Course of Business” means, with respect to any Person, the ordinary course of
business of such Person, consistent with past custom and practice, taking into account the facts
and circumstances in existence from time to time.

     “OwnerCo LLC” has the meaning given in the above Recitals.

     “Owner Cash” means all cash held by the Target Parties, OwnerCo LLC, and LeaseCo LLC other
than at the Hotel, but in any event excluding any Cash on Hand or cash on deposit in the
Replacement Reserve.

     “Parties” means collectively the Seller Parties and the Purchaser Parties.

     “Permitted Exceptions” has the meaning set forth in Section 4(c)(ii) hereof.

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     “Person” means an individual, a partnership, a corporation, a limited liability company, an
association, a joint stock company, a trust, a joint venture, an unincorporated organization, any
other business entity or a governmental entity (or any department, agency or political subdivision
thereof), or other entity of any kind, or any combination of the foregoing.

     “Personal Property” means the Property other than the Real Property.

     “Plans and Specifications” has the meaning set forth in Section 2(a)(xvi) hereof.

     “Platinum LeaseCo” has the meaning given in the above Recitals.

     “Platinum OwnerCo” has the meaning given in the above Recitals.

     “Platinum OwnerCo LLC Agreement” has the meaning set forth in Section 2(e) hereof.

     “Post-Closing Net Worth Period” has the meaning set forth in Section 12(l) hereof.

     “Property” has the meaning set forth in Section 2(a) hereof.

     “Purchase Price” has the meaning set forth in Section 2(c) hereof.

     “Purchaser Parties Board Approval” has the meaning set forth in Section 3(b)(ii)
hereof.

     “Purchaser Parties Closing Condition” has the meaning set forth in Section 6(b)
hereof.

     “Purchaser Parties Closing Condition Failure” has the meaning set forth in Section
15(b) hereof.

     “Purchaser Parties Closing Documents” has the meaning set forth in Section 5(b)
hereof.

     “Purchaser Parties Due Diligence Reports” has the meaning set forth in Section
3(a)(iv) hereof.

     “Purchaser Parties Indemnitees” means the Purchaser Parties and their respective Affiliates,
their respective members, officers, directors and shareholders (past and present) (and expressly
including the Target Parties, OwnerCo LLC, and Operating Tenant from and after Closing).

     “Purchaser Parties’ Inspectors” has the meaning set forth in Section 3(a)(ii) hereof.

     “Purchaser Parties Liabilities” means, subject to the Seller Parties’ indemnification
obligations with respect to breaches of their express representations and warranties and covenants
set forth herein, all Liabilities (i) with respect to the Target Interests, Target Parties, OwnerCo
LLC, LeaseCo LLC, the Property or the Hotel to the extent first arising or accruing on or after the
Closing Date including, without limitation, Liabilities to the extent accruing on or

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after the Closing Date under the Tenant Leases, the Management Agreement (including
obligations in respect of Employees thereunder), the Contracts, the Permitted Exceptions, the
Licenses and Permits, the third-party license agreements for the IT Systems, and the Bookings, and
Liabilities resulting from any Third-Party Claim based on events or circumstances to the extent
first arising or accruing on or after the Closing Date; (ii) with respect to or arising from the
physical condition of the Property (regardless of whether such condition existed prior to or exists
after the Closing Date), including, without limitation, any Liabilities arising from the design,
construction, engineering, or maintenance and repair of the Property, whether arising prior to or
after the Closing Date; (iii) with respect to or arising from any actual or potential spill, leak,
emission, discharge or release of any Hazardous Substances, pollution, contamination or radiation
into any water, soil, sediment, air or other environmental media over, on, in or under the Real
Property, whether first arising prior to or after the Closing Date; (iv) with respect to Taxes to
the extent first arising or accruing on or after the Closing Date; and (v) with respect to the
Target Interests, Target Parties, OwnerCo LLC, LeaseCo LLC, the Property or the Hotel to the extent
first arising or accruing prior to the Closing Date to the extent that the Purchaser Parties
received a credit therefor pursuant to this Agreement.

     “Purchaser Parties Monetary Cure Period” has the meaning set forth in Section 16(c)
hereof.

     “Purchaser Parties Non-Monetary Cure Period” has the meaning set forth in Section
16(b) hereof.

     “Purchaser Party” has the meaning given in the above Recitals.

     “Real Property” has the meaning set forth in Section 2(a)(ii) hereof.

     “Released Parties” has the meaning set forth in Section 10(d) hereof.

     “Replacement Reserve” has the meaning given in the Management Agreement.

     “Restricted Person” has the meaning given in the Platinum OwnerCo LLC Agreement.

     “Retail Merchandise” has the meaning set forth in Section 2(a)(vii) hereof.

     “Roll-Over Offer Notice” has the meaning given in the Platinum OwnerCo LLC Agreement.

     “Roll-Over Right” has the meaning set forth in Section 2(e) hereof.

     “Sales Tax” has the meaning set forth in Section 7(d)(ii) hereof.

     “SEC” has the meaning set forth in Section 18(n) hereof.

     “Seller Party” has the meaning given in the above Recitals.

     “Seller Parties Board Approval” has the meaning set forth in Section 3(b)(i) hereof.

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     “Seller Parties Board Approval Period” has the meaning set forth in Section 3(b)(i)
hereof.

     “Seller Parties Closing Condition” has the meaning set forth in Section 6(a).

     “Seller Parties Closing Documents” has the meaning set forth in Section 5(a)hereof.

     “Seller Parties Cure Period” has the meaning set forth in Section 15(b) hereof.

     “Seller Parties Due Diligence Materials” has the meaning set forth in Section
3(a)(iii) hereof.

     “Seller Parties Indemnitees” means the Seller Parties, each Target Party, OwnerCo LLC and
Operating Tenant and their respective Affiliates, their respective members, officers, directors and
shareholders (past and present) (but expressly excluding the Target Parties, OwnerCo LLC and
Operating Tenant from and after Closing).

     “Seller Parties Liabilities” means all Liabilities (i) with respect to the Target Interests,
Target Parties, OwnerCo LLC, LeaseCo LLC, the Property or the Hotel to the extent first arising or
accruing prior to the Closing Date, including, without limitation, Liabilities to the extent
accruing prior to the Closing Date under the Tenant Leases, the Mortgage Debt, the Management
Agreement (including obligations in respect of Employees thereunder), the Contracts, the Permitted
Exceptions, the Licenses and Permits, the third-party license agreements for the IT Systems and the
Bookings, and Liabilities resulting from any Third-Party Claim based on events or circumstances to
the extent first arising or accruing prior to the Closing Date; and (ii) with respect to Taxes
first arising or accruing prior to the Closing Date; but in all events expressly excluding all
Liabilities (A) that are included in Purchaser Parties Liabilities under clauses (ii) or (iii) of
the definition thereof; and (B) first arising or accruing prior to the Closing Date to the extent
that the Purchaser Parties received a credit therefor pursuant to this Agreement.

     “Spartans Lessee” has the meaning given in the above Recitals.

     “Spartans Owner” has the meaning given in the above Recitals.

     “Specially Designated National Blocked Person” has the meaning set forth in Section
9(a)(xxxii) hereof.

     “Supplies” has the meaning set forth in Section 2(a)(iv) hereof.

     “Surplus Replacement Reserve” means (i) the balance in the Replacement Reserve as of the
Adjustment Time, plus (ii) four percent (4%) of the amount budgeted for Gross Revenues for
the Hotel in the Operating Budget for the Operating Year in which Closing occurs for the balance of
such Operating Year after the Adjustment Time, and minus (iii) the amount of unfunded
Capital Improvements obligations for the Hotel under the Capital Budget for the Operating Year in
which Closing occurs as of the Adjustment Time.

     “Survey Defects” has the meaning set forth in Section 4(c)(i) hereof.

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     “Target Interests” has the meaning given in the above Recitals.

     “Target Party” has the meaning given in the above Recitals.

     “Taxes” means any federal, state, local or foreign, income, capital gain, gross receipts,
capital stock, franchise, profits, estate, gift or generation skipping tax, real property, personal
property, sales, use, room, occupancy, ad valorem or similar taxes, assessments, levies, charges or
fees imposed by any Governmental Authority on any Target Party, OwnerCo LLC or Operating Tenant
with respect to the Property or the Hotel, including, without limitation, any interest, penalty or
fine with respect thereto, but expressly excluding any transfer, documentary stamp, recording or
similar tax, levy, charge or fee incurred with respect to the transactions described in this
Agreement.

     “Tenant Leases” has the meaning set forth in Section 2(a)(x) hereof.

     “Third-Party Claim” means, with respect to the Person in question, any claim, demand, lawsuit,
arbitration or other legal or administrative action or proceeding against the Person in question by
any other Person which is not an Affiliate of the Person in question including, without limitation,
by a Governmental Authority.

     “Title and Survey Side Letter” has the meaning set forth in Section 4(c)(i) hereof.

     “Title Commitment” has the meaning set forth in Section 4(a) hereof.

     “Title Company” means Chicago Title Insurance Company, National Business Unit, Two Gateway
Center, 603 Stanwix Street, 19th Floor, Pittsburgh, Pennsylvania 15222-1402, Attention William
Weinheimer, but not any agent thereof.

     “Title Documents” has the meaning set forth in Section 5(a)(iv) hereof.

     “Title Exceptions” has the meaning set forth in Section 4(c)(i) hereof.

     “Title Policy” has the meaning set forth in Section 4(d)hereof.

     “Trade Payables” has the meaning set forth in Section 7(b)hereof.

     “Unpermitted Exceptions” has the meaning set forth in Section 4(c)(i) hereof.

     “Updated Survey” means an updated Existing Survey (or any new survey) ordered and paid for
solely by the Purchaser Parties and completed and obtained by the Purchaser Parties during the Due
Diligence Period.

     “Warranties” has the meaning set forth in Section 2(a)(xvii) hereof.

     “Work-in-Progress” has the meaning set forth in Section 9(a)(xxiv) hereof.

     (a) Construction. As used in this Agreement, (i) each term defined in this
Agreement has the meaning assigned to it, (ii) each accounting term not otherwise defined in
this Agreement has the meaning assigned to it in accordance with U.S.

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Treasury Regulations, (iii) as the context may require, words in the singular include
the plural and words in the plural include the singular, (iv) as the context may require,
words in the masculine or neuter gender include the masculine, feminine and neuter genders,
(v) except as the context may require, all references to Schedules or Exhibits refer to
Schedules or Exhibits delivered herewith or attached hereto (each of which is deemed to be a
part of this Agreement), (vi) all references to Sections or Articles refer to Sections or
Articles of this Agreement, (vii) all references to “$” or “dollars” refer to U.S. dollars
legal currency, (viii) any amount to be paid in “$” or “dollars” shall be paid in U.S.
dollars, and (ix) the terms “herein”, “hereunder”, “hereby”, “hereto” and terms of similar
import refer to this Agreement in its entirety, and not to any particular Article, Section,
paragraph or subparagraph. No provision of this Agreement will be construed in favor of, or
against, any of the Parties hereto by reason of the extent to which such Party or its
counsel participated in its drafting or by reason of the extent to which this Agreement or
any provision hereof is inconsistent with any prior draft hereof or thereof.

     2. THE PROPERTY AND OTHER CLOSING EVENTS.

     (a) Purchase and Sale of the Property. Subject to the terms set forth in this
Agreement, at the Closing, the Seller Parties shall sell, convey, transfer, assign and
deliver to the Purchaser Parties, and the Purchaser Parties shall purchase and accept
indirectly from the Seller Parties (by the sale and purchase of the Target Interests) the
property and assets set forth in this Section, but expressly excluding the Excluded Property
(collectively, the “Property”):

     (i) Land. The land described in Schedule 2(a)(i), together with all
appurtenant easements and any other rights and interests appurtenant thereto (the
“Land”);

     (ii) Improvements. All buildings, structures (including parking decks
and garages) and other improvements located on or affixed to the Land and all
fixtures on the Land which constitute real property under Applicable Law (the
“Improvements”; the Land and the Improvements are referred to collectively herein as
the “Real Property”);

     (iii) FF&E. All fixtures (other than those which constitute
Improvements), building and construction materials, furniture, furnishings,
equipment, machinery, tools, vehicles, appliances, art work and other items of
tangible personal property located at the Hotel, other than the Supplies, IT
Systems, F&B, Retail Merchandise, Books and Records and Plans and Specifications
(the “FF&E”);

     (iv) Supplies. All china, glassware and silverware, linens, uniforms,
stationary, materials and supplies (whether in inventory or opened or unopened)
located at the Hotel and used or intended for use but not for sale in connection
with the operating of the Hotel at normal operating levels and all fuel stored on
site (the “Supplies”);

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     (v) IT Systems. All right, title and interest of OwnerCo LLC or
Operating Tenant, as the case may be, in and to all computer hardware,
telecommunications and information technology systems located at the Hotel, and all
computer software used at the Hotel (subject to the terms of the applicable license
agreement), to the extent the same are transferable (by change of control as
contemplated hereby) or the Parties obtain any consent necessary to effectuate such
a transfer (the “IT Systems”);

     (vi) Food and Beverage. All merchandise, food and beverages (whether
in inventory or opened or unopened) located at the Hotel and held for sale in
connection with the operation of the Hotel at normal operating levels, but expressly
excluding any alcoholic beverages to the extent the sale or transfer of the same (by
change of control as contemplated hereby) is not permitted under Applicable Law (the
“F&B”);

     (vii) Retail Merchandise. All inventory (whether opened or unopened),
if any, located at the Hotel and held for sale in any gift shop, pro shop or
newsstand, expressly excluding the F&B (the “Retail Merchandise”);

     (viii) Management Agreement. All right, title and interest of OwnerCo
LLC or Operating Tenant, as the case may be, in and to the Management Agreement for
the Hotel;

     (ix) Operating Lease. All right, title and interest of OwnerCo LLC or
Operating Tenant, as the case may be, in and to the Operating Lease for the Hotel.

     (x) Tenant Leases. All right, title and interest of OwnerCo LLC or
Operating Tenant, as the case may be, in and to all leases, subleases, licenses,
concessions and similar agreements granting to any other Person the right to use or
occupy any portion of the Real Property, together with all security deposits held by
OwnerCo LLC or Operating Tenant thereunder, to the extent the same and such security
deposits are transferable (by change of control as contemplated hereby) or the
Parties obtain any consent necessary to effectuate such a transfer (the “Tenant
Leases”);

     (xi) Equipment Leases. All right, title and interest of OwnerCo LLC or
Operating Tenant, as the case may be, in and to all leases and purchase money
security agreements for any equipment, machinery, vehicles, furniture or other
personal property located at the Hotel which are held by OwnerCo LLC or Operating
Tenant, together with all deposits made by OwnerCo LLC or Operating Tenant
thereunder, to the extent the same and such deposits are transferable (by change of
control as contemplated hereby) or the Parties obtain any consent necessary to
effectuate such a transfer (the “Equipment Leases”);

     (xii) Operating Agreements. All right, title and interest of OwnerCo
LLC or Operating Tenant, as the case may be, in and to all Operating Agreements to
the extent the same and the deposits held thereunder are transferable (by

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change of control as contemplated hereby) or the Parties obtain any consent
necessary to effectuate such a transfer (the “Operating Agreements”);

     (xiii) Licenses and Permits. All right, title and interest of OwnerCo
LLC or Operating Tenant, as the case may be, in and to all licenses (including the
liquor license), permits, consents, authorizations, approvals, registrations and
certificates issued by any Governmental Authority which are held by OwnerCo LLC or
Operating Tenant with respect to the Hotel, including, without limitation, the
construction, use or occupancy of the Hotel, together with any deposits made by
OwnerCo LLC or Operating Tenant thereunder, to the extent the same and such deposits
are transferable (by change of control as contemplated hereby) or the Parties obtain
any consent necessary to effectuate such a transfer (the “Licenses and Permits”);

     (xiv) Intellectual Property. All right, title and interest of OwnerCo
LLC or Operating Tenant, as the case may be, in and to all trademarks, trade names,
service marks, websites, domain names and other intellectual property rights set
forth in Schedule 2(a)(xiv), to the extent the same are transferable (by change of
control as contemplated hereby) or the Parties obtain any consent necessary to
effectuate such a transfer (the “Intellectual Property”);

     (xv) Books and Records. All right, title and interest of OwnerCo LLC
or Operating Tenant, as the case may be, in and to all books and records located at
the Hotel which relate exclusively to the Hotel (the “Books and Records”);

     (xvi) Plans and Specifications. All right, title and interest of
OwnerCo LLC or Operating Tenant, as the case may be, in and to all plans and
specifications, blue prints, architectural plans, engineering diagrams, operating
manuals, maintenance records and similar items located at the Hotel which relate
exclusively to the Hotel, to the extent the same are transferable (by change of
control as contemplated hereby) or the Parties obtain any consent necessary to
effectuate such a transfer (the “Plans and Specifications”);

     (xvii) Warranties. All right, title and interest of OwnerCo LLC or
Operating Tenant, as the case may be, in and to all warranties and guaranties held
by OwnerCo LLC or Operating Tenant with respect to any Improvements or Personal
Property, to the extent the same are transferable (by change of control as
contemplated hereby) or the Parties obtain any consent necessary to effectuate such
a transfer (the “Warranties”);

     (xviii) Bookings. All bookings and reservations for guest, conference
and banquet rooms, restaurants, bars and other food service establishments or other
facilities at the Hotel as of the Closing, together with all deposits held by
OwnerCo LLC or Operating Tenant with respect thereto (the “Bookings”); and

     (xix) Accounts Receivable. The accounts receivable which are less than
or equal to ninety (90) days old and arise with respect to any prior guest or then-

13

 

current guest of the Hotel as of the applicable Adjustment Time, as set forth
in Section 7(a)(ii)(1).

     (b) Excluded Assets. Notwithstanding anything to the contrary in Section
2(a), the property, assets, rights and interests set forth in this Section 2(b)
(the “Excluded Property”) are excluded from the Property to be acquired by the Purchaser
Parties indirectly from the Target Parties (by the sale and purchase of the Target
Interests, as the case may be):

     (i) Third-Party Property. Any Personal Property owned by (1) Manager
or any agent or employee thereof which, in either instance either constitute their
personal effects or are listed on Schedule 2(b)(i) attached hereto, (2) the lessor
under any Equipment Leases, (3) the supplier, vendor, licensor or other party under
any Operating Agreements or Licenses and Permits, (4) any guests or customers of the
Hotel which constitute their personal effects, or (5) without limiting the
foregoing, any Personal Property (other than FF&E, Supplies, F&B and Retail
Merchandise) to the extent neither any Target Party, OwnerCo LLC, nor Operating
Tenant have any right, title or interest therein.

     (ii) Asset Management Agreement. The Asset Management Agreement, which
shall be terminated by OwnerCo LLC and/or Operating Tenant at or prior to Closing.

     (c) Purchase Price. Subject to adjustment as expressly provided herein, the
Purchaser Parties shall pay Eighty-Eight Million Nine Hundred Eight-Six Thousand Two Hundred
Forty and 00/100 Dollars ($88,986,240.00) as the purchase price for the Target Interests
(the “Purchase Price”) to the Seller Parties as follows:

     (i) Within two (2) Business Days after the Effective Date, the Purchaser
Parties shall deposit the sum of One Million and 00/100 Dollars ($1,000,000.00) (the
“Initial Deposit”) with Escrow Agent by wire transfer to be held in escrow by Escrow
Agent pursuant to the terms and conditions of Section 2(d)(i) hereof.
Should the Purchaser Parties fail to deliver the Initial Deposit to Escrow Agent as
set forth in this Agreement and for so long thereafter as the Purchaser Parties
shall have failed to deliver the Initial Deposit, the Seller Parties, as their sole
and exclusive remedy, may elect to terminate this Agreement by providing written
notice to the Purchaser Parties, whereupon the Parties shall have no further rights
or obligations under this Agreement, except those which expressly survive such
termination.

     (ii) If the Purchaser Parties terminate this Agreement pursuant to the Due
Diligence Contingency (or the same is deemed terminated) in accordance with
Section 3(a)(i), the Initial Deposit shall be refunded to the Purchaser
Parties in accordance with Section 2(d)(ii). If the Purchaser Parties do
not terminate this Agreement pursuant to the Due Diligence Contingency or if this
Agreement is not deemed terminated as provided below, then the Purchaser Parties
shall, within two (2) Business Days after the expiration of the Due Diligence
Period, deposit with Escrow Agent an additional amount of Three Million and 00/100
Dollars

14

 

($3,000,000.00) (the “Additional Deposit” and, together with the Initial
Deposit and any interest earned collectively thereon, the “Deposit”), which shall be
held by Escrow Agent in escrow pursuant to Section 2(d)(i). Should the
Purchaser Parties fail to deliver the Additional Deposit to Escrow Agent to the
extent required to be delivered as set forth in this Agreement and for so long
thereafter as the Purchaser Parties shall have failed to deliver the Additional
Deposit, the Seller Parties, as their sole and exclusive remedy, may elect to
terminate this Agreement by providing written notice to the Purchaser Parties, in
which case the Initial Deposit shall be disbursed to the Seller Parties in
accordance with Section 2(d)(ii), and the Parties shall have no further
rights or obligations under this Agreement, except those which expressly survive
such termination

     (iii) At the Closing, the Deposit shall be released to the Seller Parties and
the Purchaser Parties shall deliver the balance of the Purchase Price in immediately
available funds.

     (iv) The Purchase Price (prior to any adjustments for prorations herein
described) shall be allocated to the Personal Property in the manner set forth on
Schedule 2(c)(iv). Only that portion of the Purchase Price allocated to adjustments
for prorations herein described shall be allocated to the sale of the Mezz LeaseCo
Interests.

     (d) Escrow of the Deposit.

     (i) The Deposit shall be held Escrow Agent until the Closing, or earlier
termination of this Agreement, or earlier direction of the Parties. Escrow Agent
shall pay or apply the Deposit in accordance with this Section 2(d)(i). Any
interest earned on the Deposit shall become a part of the Deposit and the Purchaser
Parties shall receive a credit for such interest against the Purchase Price if it is
paid to the Seller Parties at Closing, and the Party receiving such interest or the
credit for such interest, as the case may be, shall pay any income taxes thereon.
At the Closing, the Deposit shall be paid by Escrow Agent to the Seller Parties, or
otherwise at the direction of such Parties, as set forth below.

     (ii) Escrow Agent shall release or disburse the Deposit pursuant to the
following provisions: (1) to the notifying Party upon receipt of written demand
therefor, stating that this Agreement has been terminated by the notifying Party and
as a result of such termination the notifying Party is entitled under this Agreement
to such Deposit; provided, however, that Escrow Agent shall not
honor such demand until more than ten (10) days after the Escrow Agent has sent a
copy of such demand to the other Party, nor thereafter if the Escrow Agent shall
have received written notice of objection from the other Party in accordance with
the provisions of this Section 2(d)(ii), (2) upon receipt by Escrow Agent of
a written demand for such Deposit by the notifying Party pursuant to this
Section 2(d)(ii), Escrow Agent shall promptly send a copy thereof to the
other Party. The other Party shall have the right to object to the delivery of such
Deposit by filing written notice of such objection with Escrow Agent at any time
within seven (7) days of its receipt of such notice, but not thereafter. Such
notice shall set forth

15

 

the basis for objecting to the delivery of such Deposit. Upon receipt of such
notice, Escrow Agent shall promptly send a copy thereof to the Party who filed the
written demand, (3) in the event Escrow Agent shall have received the above-provided
notice of objection within the time therein prescribed, the Escrow Agent shall
continue to hold such Deposit until (x) the Escrow Agent receives written notice
signed by all Parties directing the disbursement of such Deposit, in which case
Escrow Agent shall then disburse such Deposit in accordance with such direction, or
(y) in the event of litigation between the Parties, Escrow Agent shall deposit such
Deposit with the clerk of the court in which such litigation is pending, or (z) the
Escrow Agent shall be entitled to take such affirmative steps as the Escrow Agent
may, at the Escrow Agent’s option, elect in order to terminate the Escrow Agent’s
duties as Escrow Agent with respect to the Deposit, including, but not limited, to
deposit such Deposit in court and an action in interpleader, the costs thereof to be
borne by whichever is the losing Party, (4) in the event that Escrow Agent shall be
uncertain as to the Escrow Agent’s duties or rights hereunder, or shall receive
instructions from the Parties which, in the Escrow Agent’s opinion, are in conflict
with any of the provisions hereof, the Escrow Agent shall be entitled to hold and
disburse such Deposit as set forth above and may decline to take any other action.

     (iii) The Parties acknowledge that Escrow Agent: (x) is acting solely as a
stakeholder at their request and for their convenience, (y) shall not be deemed to
be the agent of any of the Parties hereto and (z) other than with respect to any
policy of title insurance Escrow Agent may issue in connection with the transaction
contemplated hereby, shall not be liable to any of the Parties hereto for any act or
omission on its part unless taken or suffered in bad faith, or willful disregard of
this Agreement or involving gross negligence. The Parties and their Affiliates
shall severally, and not jointly, indemnify and hold Escrow Agent harmless from and
against all costs, claims and expenses, including reasonable attorneys’ fees and
disbursements, incurred in connection with the performance of the Escrow Agent’s
duties hereunder, except with respect to actions or omissions taken or suffered by
Escrow Agent in bad faith, or willful disregard of this Agreement or involving gross
negligence on the part of Escrow Agent.

     (iv) Escrow Agent shall invest the Deposit in savings accounts, United States
Treasury Bills, certificates of deposit and/or other money market instruments in the
manner jointly directed by the Parties. In the event such joint directions are not
issued, Escrow Agent shall invest such Deposit in United States Treasury Bills.
Escrow Agent shall not be liable for any losses suffered in connection with any such
investment and shall have no obligation to obtain the best, or otherwise seek to
maximize, the rate of interest earned on any such investment. Any fees or charges
in connection with such investment shall be paid out of the amounts held in escrow
before any other payments shall be required to be made from such accounts.

     (v) Upon any delivery of Deposit in accordance with this Section
2(d)(v), Escrow Agent shall be relieved of all liability, responsibility or

16

 

obligation with respect to, or arising out of, such Deposit and the escrow
relating thereto. Following the earlier or (1) the delivery of the Initial Deposit
after a termination of this Agreement or (2) the delivery of the Additional Deposit,
Escrow Agent shall be relieved of all liability, responsibility or obligation under
this Agreement. Escrow Agent shall not be bound by any modification to this Section
unless Escrow Agent shall have agreed to such modification in writing.

     (vi) Escrow Agent shall be entitled to rely or act upon any notice, instrument
or document believed by Escrow Agent to be genuine and to be executed and delivered
by the proper person, and shall have no obligation to verify any statements
contained in any notice, instrument or document or the accuracy or due authorization
of the execution of any notice, instrument or document.

     (vii) Escrow Agent shall be entitled to retain attorneys of its choice in
connection with this escrow or any dispute which may arise hereunder.

     (viii) Escrow Agent has acknowledged agreement to the foregoing provisions of
this Section by signing the place indicated on the signature page of this Agreement.

     (e) Accor Member Roll-Over Right. The Parties acknowledge that, pursuant to
the Limited Liability Company Agreement (the “Platinum OwnerCo LLC Agreement”) of Platinum
OwnerCo, the Accor Member, as a member of Platinum OwnerCo, has the right to retain or
acquire a twenty-five percent (25%) interest in the Hotel through a joint venture with the
Purchaser Parties pursuant to a joint venture agreement comparable to the terms of the
Platinum OwnerCo LLC Agreement (the “Roll-Over Right”). This Agreement and the Parties’
obligations hereunder are subject to such Roll-Over Right. On or prior to the Effective
Date, Platinum OwnerCo shall (i) provide the Accor Member the Roll-Over Offer Notice, and
(ii) provide to the Purchaser Parties a copy of the Platinum OwnerCo LLC Agreement that may
be redacted at Platinum OwnerCo’s discretion with respect to provisions that would be
ineffective with respect to the Hotel after giving effect to the transaction contemplated
herein. Platinum OwnerCo shall also promptly provide the Purchaser Parties with a copy of
any notice from the Accor Member waiving or exercising the Roll-Over Right. If the Accor
Member exercises its Roll-Over Right, then the Purchaser Parties shall meet and confer with
the Accor Member and shall otherwise use its commercially reasonable efforts to agree upon a
joint venture agreement comparable to the terms of the Platinum OwnerCo LLC Agreement on or
prior to November 22, 2010. If the Accor Member exercises such Roll-Over Right but,
notwithstanding such commercially reasonable efforts, the Purchaser Parties are unable to
reach agreement on the joint venture agreement as aforesaid on or prior to November 22,
2010, then either Party shall have the right to terminate this Agreement by providing
written notice to the other Party on or prior to November 22, 2010, whereupon the Deposit
shall be refunded to the Purchaser Parties in accordance with Section 2(d)(ii), and
the Parties shall have no further rights or obligations under this Agreement, except those
which expressly survive such termination. Notwithstanding the foregoing, if the Accor
Member exercises such Roll-

17

 

Over Right but, notwithstanding such commercially reasonable efforts, the Purchaser
Parties are unable to reach agreement on the joint venture agreement as aforesaid on or
prior to November 22, 2010, then unless this Agreement has been validly terminated pursuant
to this or any other provision of this Agreement, either Party shall have the right to
postpone the Closing (and, hence, the references to November 22, 2010 in the preceding
sentences shall be likewise extended) from time to time for any amount of time, but in any
event not later than December 22, 2010, in each instance by providing written notice to the
other Party thereof prior to the then scheduled Closing Date; provided,
however, that (i) the Purchaser Parties’ right to extend is subject to their having
employed and their continuing to employ commercially reasonable efforts as aforesaid, and
(ii) if the Purchaser Parties postpone the Closing to a date that is not the first Business
Day of a month, then the Seller Parties shall have the right to further extend the Closing
to the next day that is a first Business Day of a calendar month. If the Accor Member
exercises its Roll-Over Right, then upon execution of such joint venture agreement with
respect to such joint venture, the Purchaser Parties shall (i) assign and such joint venture
shall assume, all rights and obligations of the Purchaser Parties under this Agreement by
written instrument reasonably satisfactory to Platinum OwnerCo (which instrument shall
provide that the Purchaser Parties shall not be released of their pre-Closing obligations
hereunder), (ii) cause such joint venture to consummate the transaction contemplated hereby,
and (iii) execute and deliver such other instruments as may be reasonably required to
effectuate the Accor Member’s Roll-Over Right; provided, however, in no
event shall the Purchaser Parties have any liability if the Accor Member fails to perform
any of its obligations in connection with the Accor Member’s Roll-Over Right. If the Accor
Member does not exercise the Roll-Over Right, then the Purchaser Parties’ obligations
hereunder shall be unaffected and the Purchaser Parties shall proceed with the consummation
of the transaction contemplated hereby subject to the terms hereof. The Purchaser Parties
acknowledge that the Seller Parties make no representations as to whether the Roll-Over
Right may be exercised or the manner in which same is solicited or received. So long as the
Seller Parties shall have complied in all material respects with its obligations under this
Section 2(e), the Seller Parties shall have no liability to the Purchaser Parties on
account of any exercise or non-exercise of the Roll-Over Right by the Accor Member, any act
or solicitation taken or not taken by the Seller Parties with respect thereto, or the
inability of the Accor Member to reach agreement with the Purchaser Parties on any matter
contemplated herein or to otherwise perform its obligations with respect thereto.

     (f) Transfers of Licenses, Permits and Liquor License. Operating Tenant
currently holds the liquor license included on Schedule 2(f) attached hereto with respect to
the operation of the restaurants, lounges, and bars presently located within the Hotel.
After the expiration of the Due Diligence Period, (i) the Purchaser Parties shall, at the
Purchaser Parties’ sole expense, file all necessary forms, disclosures, applications,
notices of transfer and documents required to be filed by the Purchaser Parties with
appropriate governmental authorities to effectuate the transfer (by change of control as
contemplated hereby) or reissuance (if required) of the Licenses and Permits or such other
licenses and permits as may be required for the Purchaser Parties to own and operate the
Hotel in the manner contemplated by the Management Agreement, all to the extent required by
Applicable Law, and (ii) Seller shall cooperate with the Purchaser

18

 

Parties in all reasonable respects in filing any such documents, including, without
limitation, any notices required in reflecting a change of control of Operating Tenant with
respect to the liquor license, provided that Seller shall not be required to incur any costs
in respect thereof. Notwithstanding anything to the contrary in this Section 2(e),
the Purchaser Parties shall not communicate, file any application or otherwise commence any
procedure or proceeding with any Governmental Authority for the transfer (by change of
control as contemplated hereby) of the Licenses or Permits or issuance or new licenses and
permits (if required), or post any notices at the Hotel or publish any notices required for
the transfer (by change of control as contemplated hereby) of the Licenses or Permits or
issuance of new licenses and permits (if required), including, without limitation, any
liquor license, prior to the expiration of the Due Diligence Period. If this Agreement is
terminated and the Purchaser Parties have filed an application or otherwise commenced the
processing of obtaining new licenses and permits, the Purchaser Parties shall withdraw all
such applications and cease all other activities with respect to such new licenses and
permits. This Section shall survive the Closing.

     (g) Closing. The closing of the transaction described in this Agreement (the
“Closing”) shall occur on November 22, 2010, (as such date may be postponed pursuant to this
Agreement) (the date on which the Closing occurs is referred to herein as the “Closing
Date”). The Closing shall be effected through the Escrow Agent, shall take place by means
of a so called “New York style” escrow (the “Closing Escrow”) as described herein, with each
Party making its respective deliveries to the Escrow Agent as required herein.

     3. CONTINGENCIES.

     (a) Due Diligence.

     (i) Due Diligence Contingency. For the period commencing on the
Effective Date and expiring upon Closing, the Purchaser Parties shall have the right
to perform their due diligence review of the Property and all matters related
thereto which the Purchaser Parties deem advisable, including, without limitation,
any engineering, zoning, environmental, title, survey, financial, operational and
legal compliance matters relating to the Property. The Purchaser Parties shall have
the right, if the Purchaser Parties, in their sole discretion, are satisfied with
the results of their due diligence review of the Property, to notify the Seller
Parties thereof on or before expiration of the period (the “Due Diligence Period”)
expiring at 11:59 p.m. (Eastern Time) on November 12, 2010, in which event, the
Parties shall, subject to the other terms and conditions hereof, proceed to Closing
and the Purchaser Parties shall be deemed to have waived their right to terminate
this Agreement pursuant to the Due Diligence Contingency (defined below). In the
event the Purchaser Parties shall fail to provide such notice on or before the
expiration of the Due Diligence Period, this Agreement shall be deemed terminated.
In addition, the Purchaser Parties shall have the right to terminate this Agreement
by providing written notice to the Seller Parties at any time prior to the
expiration of the Due Diligence Period (the Purchaser Parties’ right to provide such
notice of satisfaction, such notice of termination and/or to

19

 

allow this Agreement to
terminate on account of the Purchaser Parties’ failure to
provide any such notice is herein referred to as the “Due Diligence
Contingency”). If the Purchaser Parties terminate this Agreement and/or this
Agreement terminates automatically, as provided above, pursuant to the Due Diligence
Contingency in accordance with this Section 3(a)(i), then the Deposit shall
be refunded to the Purchaser Parties in accordance with Section 2(d)(ii),
and the Parties shall have no further rights or obligations under this Agreement,
except those which expressly survive such termination.

     (ii) Due Diligence Inspections. The Purchaser Parties shall have the
right to perform such examinations, tests, investigations and studies of the
Property (the “Inspections”) as the Purchaser Parties reasonably deem advisable, in
accordance with this Section 3(a)(ii). The Purchaser Parties may conduct
the Inspections with their officers, employees, contractors, consultants, agents or
representatives (“Purchaser Parties’ Inspectors”); provided,
however, that the Purchaser Parties shall cause the Purchaser Parties’
Inspectors to comply with the provisions regarding Confidential Information set
forth in Section 18(n)(ii). The Seller Parties shall cause OwnerCo LLC and
Operating Tenant to provide reasonable access to the Property for Purchaser Parties’
Inspectors to perform the Inspections; provided, however, that (1)
the Purchaser Parties shall provide the Seller Parties or Manager with at least
twenty four (24) hours’ prior notice (via e-mail or telephone being acceptable for
such purpose, anything herein contained to the contrary notwithstanding) of each of
the Inspections; (2) Purchaser Parties’ Inspectors shall be accompanied by an
employee, agent or representative of the Seller Parties, Manager or Broker; (3) the
Inspections shall be conducted by Purchaser Parties’ Inspectors on a Business Day
between 8:00 a.m. and 6:00 p.m. (local time); (4) Purchaser Parties’ Inspectors
shall not perform any drilling, coring or other invasive testing, without the Seller
Parties’ prior written consent, which consent shall not be unreasonably withheld;
(5) the Purchaser Parties’ right to perform the Inspections shall be subject to the
rights of Manager and the tenants, guests and customers at the Hotel; and (6) the
Inspections shall not unreasonably interfere with the operation of the Hotel, and
Purchaser Parties’ Inspectors shall comply with the Seller Parties’ requests with
respect to the Inspections to minimize such interference.

     (iii) Seller Parties’ Due Diligence Materials.

     (1) On or prior to the Effective Date, the Seller Parties shall provide
to the Purchaser Parties those documents, records and other information set
forth in “part 1” of Schedule 3(a)(iii)(1) and, from and after the Effective
Date, the Seller Parties shall provide or make available to the Purchaser
Parties as part of its Inspections the documents, records and other
information set forth in “part 2” of Schedule 3(a)(iii)(1) to the extent in
the Seller Parties’, OwnerCo LLC’s or Operating Tenant’s possession or
reasonable control (collectively, “Seller Parties Due Diligence Materials”),
provided that the failure to provide any such Seller Parties Due Diligence
Materials timely shall not give rise to any

20

 

right of the Purchaser Parties
to extend the Due Diligence Period or
constitute a default by the Seller Parties hereunder. The Seller
Parties Due Diligence Materials shall constitute Confidential Information
and shall be subject to the obligations of confidentiality set forth in
Section 18(n).

     (2) If this Agreement is terminated, the Purchaser Parties promptly
shall (a) return all original Seller Parties Due Diligence Materials
provided to the Purchaser Parties, and destroy all other Seller Parties Due
Diligence Materials, (b) cause all Persons to whom the Purchaser Parties
have provided any Seller Parties Due Diligence Materials to return any
original Seller Parties Due Diligence Materials to the Purchaser Parties,
and destroy all other Seller Parties Due Diligence Materials, and (c)
certify to the Seller Parties that all original Seller Parties Due Diligence
Materials have been returned to the Seller Parties and all other Seller
Parties Due Diligence Materials have been destroyed.

     (iv) Purchaser Parties’ Due Diligence Reports. If this Agreement is
terminated, the Purchaser Parties shall provide a copy to the Seller Parties of all
studies, reports and assessments prepared by any Person for or on behalf of the
Purchaser Parties (other than any internal studies, reports and assessments prepared
by any of the Purchaser Parties’ employees, attorneys or accountants) in connection
with the Inspections (the “Purchaser Parties Due Diligence Reports”). If requested
by the Seller Parties, the Purchaser Parties shall use commercially reasonable
efforts to obtain an original of any such Purchaser Parties Due Diligence Reports
for the Seller Parties, together with a reliance letter in favor of the Seller
Parties (and/or OwnerCo LLC and/or Operating Tenant, as may be designated by Seller
Parties) from the Person who prepared such Purchaser Parties Due Diligence Reports;
provided, however, that the Seller Parties shall pay or cause to be
paid any fees, costs or expenses charged by such Person for such original Purchaser
Parties Due Diligence Report and/or reliance letter.

     (v) Schedules. The Parties acknowledge that in the interest of time
the Parties have executed and delivered this Agreement in advance of the delivery of
the Schedules hereto (other than Schedules 2(a)(i), 2(c)(iv), and 2(f)).
Notwithstanding anything herein to the contrary, the Seller Parties shall (and shall
be permitted to) deliver and append to this Agreement such Schedules by October 20,
2010, whereupon such Schedules shall form a part of this Agreement. The foregoing
shall be self-operative; however, the Parties agree to execute and deliver to one
another a letter agreement confirming the incorporation of such Schedules into this
Agreement. If the Seller Parties shall fail to deliver such Schedules by October
20, 2010, then the Seller Parties shall not be deemed in default hereunder but the
Due Diligence Period and the date set for Closing shall be extended day-for-day for
each day after such date that Seller Parties shall have failed to deliver such
Schedules.

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     (vi) Release and Indemnification. The Purchaser Parties (for
themselves and all Purchaser Parties Indemnitees) hereby releases the Seller Parties
Indemnitees for any Indemnification Loss incurred by any Purchaser Parties
Indemnitee arising from or in connection with the Inspections (including, without
limitation, any liens placed on the Property or any other property owned by a Person
other than the Purchaser Parties (including any Excluded Property) as a result of
such Inspections), except to the extent resulting from the Seller Parties’
negligence or willful misconduct. The Purchaser Parties shall defend, indemnify and
hold harmless the Seller Parties Indemnitees in accordance with Section 14 from and
against any Indemnification Loss incurred by any Seller Parties Indemnitee arising
from or in connection with the Inspections. At the Seller Parties’ request, the
Purchaser Parties, at their cost and expense, shall repair any damage to the
Property or any other property owned by a Person other than the Purchaser Parties
(including any Excluded Property) caused from the Inspections. This Section
3(a)(vi) shall survive the termination of this Agreement.

     (vii) Insurance. Prior to commencing any Inspections, the Purchaser
Parties shall provide to OwnerCo LLC and Operating Tenant certificates of insurance,
in form and substance reasonably satisfactory to the Seller Parties, evidencing that
the Purchaser Parties maintain commercial general liability insurance in an amount
no less than Two Million and 00/100 Dollars ($2,000,000.00), with an insurance
company with a Best’s rating of no less than A/VIII, insuring the Purchaser Parties
against their indemnification obligations under Section 3(a)(vi), and naming
OwnerCo LLC, Operating Tenant, and such other Persons designated by the Seller
Parties as an additional insured thereunder. The Purchaser Parties’ maintenance of
such insurance policies shall not release or limit the Purchaser Parties’
indemnification obligations under Section 3(a)(vi).

     (b) Board Approval.

     (i) Seller Parties’ Board Approval. The Purchaser Parties acknowledge
and agree that the Seller Parties’ obligations under this Agreement shall be subject
to obtaining the approval of the board(s) of directors, member(s), and/or investment
committee(s) of one or more of Platinum OwnerCo LLC and/or Platinum LeaseCo LLC
and/or any parent entity respectively thereof (the “Seller Parties Board Approval”)
not later than the expiration of the Due Diligence Period (the “Seller Parties Board
Approval Period”). If the Seller Parties (and/or applicable parent entities) shall
have made the presentation(s) for Seller Parties Board Approval, but shall have
failed to obtain Seller Parties Board Approval within the Seller Parties Board
Approval Period, then the Seller Parties shall have the right to terminate this
Agreement by providing written notice to the Purchaser Parties prior to the
expiration of the Seller Parties Board Approval Period, whereupon the Deposit shall
be refunded to the Purchaser Parties in accordance with Section 2(d)(ii),
and the Parties shall have no further rights or obligations under this Agreement,
except those which expressly survive such termination. If the Seller Parties
terminate this Agreement pursuant to this

22

 

Section 3(b)(i), the Seller Parties shall reimburse the Purchaser
Parties for the all actual, out-of-pocket expenses incurred by the Purchaser Parties
in connection with the Inspections, but not to exceed the amount of Two Hundred
Fifty Thousand and 00/100 Dollars ($250,000.00) provided the Purchaser Parties
provide documentation reasonably satisfactory to the Seller Parties evidencing the
nature and amount of such out-of-pocket expenses. Notwithstanding anything herein
to the contrary, if the Seller Parties do not terminate this Agreement prior to
expiration of the Seller Parties Board Approval Period, then the Seller Parties
shall be deemed to have obtained the Seller Parties Board Approval and the Seller
Parties shall not have any further right to terminate this Agreement on account of
the failure to obtain the Seller Parties Board Approval.

     (ii) Purchaser Parties Board Approval. The Seller Parties acknowledge
and agree that the Purchaser Parties’ obligations under this Agreement (other than
their obligation to make the Deposit and all other obligations of the Purchaser
Parties which survive the termination of this Agreement) shall be subject to the
Purchaser Parties’ obtaining the approval from the Board of Trustees of the
Purchaser Parties (the “Purchaser Parties Board Approval”) not later than the
expiration of the Due Diligence Period. If the Purchaser Parties shall have made
the presentation for Purchaser Parties Board Approval, but shall have failed to
obtain Purchaser Parties Board Approval within the Due Diligence Period, then the
Purchaser Parties shall have the right to terminate this Agreement by providing
written notice to the Seller Parties prior to the expiration of the Due Diligence
Period, whereupon the Deposit shall be refunded to the Purchaser Parties in
accordance with Section 2(d)(ii), and the Parties shall have no further
rights or obligations under this Agreement, except those which expressly survive
such termination. Notwithstanding anything herein to the contrary, if the Purchaser
Parties do not terminate this Agreement prior to expiration of the Due Diligence
Period, then the Purchaser Parties shall be deemed to have obtained the Purchaser
Parties Board Approval and the Purchaser Parties shall not have any further right to
terminate this Agreement on account of the failure to obtain the Purchaser Parties
Board Approval.

     (c) Manager’s Estoppel Certificate. The Seller Parties shall use commercially
reasonable efforts to cause to be obtained and delivered to the Purchaser Parties an
estoppel certificate from the Manager substantially in the form of Exhibit A attached
hereto, with conforming changes to reflect the completion of the matters therein requiring
completion, any other disclosures to the extent not materially adverse to the ownership and
use of the Hotel, and dated not more than thirty (30) days prior to the Closing (“Manager’s
Estoppel Certificate”). The Parties acknowledge that the delivery of the Manager’s Estoppel
Certificate by the Seller Parties to the Purchaser Parties at Closing is a Purchaser Parties
Closing Condition.

     4. TITLE TO THE PROPERTY

     (a) Title Commitment. The Seller Parties shall deliver or cause to be
delivered to the Purchaser Parties, at the Purchaser Parties’ sole expense, no later than

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ten (10) days after the Effective Date, a commitment for an ALTA owner’s title
insurance policy (form 2006) from the Title Company for the Real Property (the “Title
Commitment”), together with a copy of all documents referenced therein obtained from the
Title Company, naming OwnerCo LLC as the intended insured thereunder and being in the amount
of the Purchase Price.

     (b) Survey. The Purchaser Parties acknowledge their receipt of the Existing
Survey. The Purchaser Parties shall have the right, at the Purchaser Parties’ sole expense,
during the Due Diligence Period to obtain an Updated Survey. Any Updated Survey obtained by
the Purchaser Parties shall be prepared by a duly licensed surveyor, in accordance with the
ALTA/ACSM Minimum Standard Detail Requirements for Land Title Surveys, certified to OwnerCo
LLC, the Purchaser Parties and the Title Company, and shall otherwise be in accordance with
such standards as are required by the Title Company in order to issue the Title Policy. In
the event the Purchaser Parties do not obtain an Updated Survey prior to the expiration of
the Due Diligence Period and the Title Company determines that the Existing Survey is
insufficient to permit the Title Company to remove or insure over any survey exception in
the Title Commitment, then the Seller Parties shall have no obligation to cause the Title
Company to remove or insure over any such survey exception, and such exception shall
constitute a Permitted Exception.

     (c) Exceptions to Title.

     (i) Unpermitted Exceptions. If the Purchaser Parties object to any (1)
liens, encumbrances or other exceptions to title (the “Title Exceptions”) disclosed
in the Title Commitment, or (2) encroachments by improvements on adjoining
properties onto or over the Land, any encroachments of the Improvements onto or over
adjoining properties, setback lines or easements (to the extent in violation
thereof) or other survey defects (the “Survey Defects”) disclosed in the Existing
Survey or Updated Survey (if any), the Purchaser Parties shall confer with the Title
Company and the Seller Parties to attempt to agree on which shall constitute
“unpermitted exceptions” to title to the Real Property (the “Unpermitted
Exceptions”) prior to the expiration of the Due Diligence Period; provided,
however, that (A) the Management Agreement, and (B) all liens and
encumbrances caused or created by any Purchaser Parties Indemnitee shall in no event
constitute Unpermitted Exceptions. Notwithstanding the foregoing, the Seller
Parties agree that the following shall constitute Unpermitted Exceptions: (I) the
Mortgage Loan and any other mortgages, deeds of trust or other security interests
for any financing incurred by any Target Party, OwnerCo LLC or Operating Tenant
prior to Closing (unless the Purchaser Parties are entitled to a credit therefor
pursuant to this Agreement), (II) Taxes which constitute Title Exceptions which
would be delinquent if unpaid at Closing; provided, however, that if
any such Taxes are payable in installments, such obligation shall apply only to the
extent such installments would be delinquent if unpaid at Closing, and (III) any
other Title Exceptions objected to by the Purchaser Parties which may be removed in
accordance with its terms by payment of a liquidated amount which in the aggregate
do not exceed One Hundred Thousand and 00/100 Dollars

24

 

($100,000.00) (the items set
forth in (I), (II) and (III) above being referred to
herein as “Automatic Unpermitted Exceptions”). If the Parties agree on which
Title Exceptions and Survey Defects shall constitute the Unpermitted Exceptions, the
Parties shall enter into a side letter agreement with the Title Company setting
forth which Title Exceptions and Survey Defects shall constitute the Unpermitted
Exceptions (the “Title and Survey Side Letter”). If the Parties cannot agree on
which Title Exceptions and Survey Defects shall constitute the Unpermitted
Exceptions prior to the expiration of the Due Diligence Period, other than those
which the Seller Parties are obligated to cure hereunder, this Agreement shall
automatically terminate and the Deposit shall be refunded to the Purchaser Parties.

     (ii) Permitted Exceptions. All Title Exceptions and Survey Defects
other than those expressly set forth in the Title and Survey Side Letter or in
Section 4(c)(i)shall constitute “permitted exceptions” to title to the Real
Property (the “Permitted Exceptions”).

     (iii) Updated Title Commitment or Survey. If any update of the Title
Commitment delivered to the Purchaser Parties after the expiration of the Due
Diligence Period discloses any Title Exception which is not disclosed in a Title
Commitment provided to the Purchaser Parties prior to the expiration of the Due
Diligence Period (a “New Title Exception”), or any update of the Existing Survey (or
any Updated Survey if the Purchaser Parties obtain one prior to the expiration of
the Due Diligence Period) delivered to the Purchaser Parties after the expiration of
the Due Diligence Period discloses any Survey Defect which is not disclosed in the
Existing Survey or any Updated Survey obtained by Purchaser prior to the expiration
of the Due Diligence Period (a “New Survey Defect”), and (1) the Purchaser Parties
otherwise did not have knowledge of such New Title Exception or New Survey Defect
prior to the expiration of the Due Diligence Period, (2) such New Title Exception or
New Survey Defect would, in Purchaser’s sole and absolute discretion, have a
materially adverse effect on the ownership of the Property or operation of the Hotel
after the Closing, and (3) such New Title Exception or New Survey Defect was not
caused by the Purchaser Parties or any Person on behalf of the Purchaser Parties,
then the Purchaser Parties shall have the right to request the Seller Parties to
remove or cure such New Title Exception or New Survey Defect at or prior to Closing
by providing written notice to the Seller Parties within the earlier of: (A) five
(5) Business Days after receiving such update of the Title Commitment or the
Existing Survey (or Updated Survey if the Purchaser Parties obtains one prior to the
expiration of the Due Diligence Period), or (B) the Closing (the “New Title and
Survey Objection Notice”). If Purchaser provides a New Title and Survey Objection
Notice to the Seller Parties, the Seller Parties may elect, by providing written
notice (the “New Title and Survey Election Notice”) to the Purchaser Parties within
the earlier of five (5) Business Days after the Seller Parties’ receipt of such New
Title and Survey Objection Notice or the Closing, (I) to accept such New Title
Exception or New Survey Defect as an additional Unpermitted Exception to be removed
or cured at or prior to Closing, or (II) not to remove or

25

 

cure such New Title
Exception or New Survey Defect; provided, however, that if
the Seller Parties or any Person on behalf of the Seller Parties caused such
New Title Exception or New Survey Defect with the intention with the purpose of not
consummating the transaction described in this Agreement or if the New Title
Exception or New Survey Defect is an Automatic Unpermitted Exception, then such New
Title Exception or New Survey Defect shall constitute an “Unpermitted Exception” and
the Seller Parties shall remove or cure such New Title Exception or New Survey
Defect at or prior to Closing. If the Seller Parties do not provide a New Title and
Survey Election Notice to the Purchaser Parties within such time period, then the
Seller Parties shall be deemed to have elected not to remove or cure such New Title
Exception or New Survey Defect as an Unpermitted Exception pursuant to clause (II)
of the preceding sentence. If the Seller Parties elect or is deemed to have elected
not to remove or cure a New Title Exception or New Survey Defect, then the Purchaser
Parties shall have the right to elect, by providing written notice (the “New Title
and Survey Response Notice”) to the Seller Parties within the earlier of ten (10)
Business Days after the Purchaser Parties’ receipt of the New Title and Survey
Election Notice or the Closing to (a) terminate this Agreement, in which case the
Deposit shall be refunded to the Purchaser Parties in accordance with Section
2(d)(ii) and the Parties shall have no further rights or obligations under this
Agreement, except those which expressly survive such termination, or (b) proceed to
Closing pursuant to this Agreement and accept title to the Real Property subject to
such New Title Exception or New Survey Defect which thereafter shall be deemed to
constitute a Permitted Exception, without any credit against the Purchase Price for
such New Title Exception or New Survey Defect. If the Purchaser Parties do not
provide a New Title and Survey Response Notice to the Seller Parties within such
time period, the Purchaser Parties shall be deemed to have elected to terminate this
Agreement pursuant to clause (a) of the preceding sentence.

     (iv) Removal of Unpermitted Exceptions. The Seller Parties shall have
no obligation to cure any Title Exceptions or Survey Defects other than Automatic
Unpermitted Exceptions and other than the Unpermitted Exceptions as set forth in the
Title and Survey Side Letter or any New Title and Survey Election Notice. The
Seller Parties may cure any Unpermitted Exception by removing such Unpermitted
Exception from title or causing the Title Company to commit to remove or insure over
in a manner acceptable to the Purchaser Parties in their sole discretion such
Unpermitted Exception in the Title Policy at any time prior to or at Closing. If
the Title Company does not agree to remove or insure over any Unpermitted Exception
in the Title Policy, but another nationally recognized title insurance company
reasonably approved by the Purchaser Parties is willing to issue the Title Policy
without such Unpermitted Exception in the Title Policy, then the Seller Parties
shall have the right to obtain, and the Purchaser Parties shall accept, a Title
Policy from such other title insurance company which otherwise shall satisfy the
requirements of Section 4(d), in which case the term “Title Company” shall
be deemed to refer to such other title insurance company for all purposes in this
Agreement; provided, however, the Seller Parties shall pay any
incremental costs incurred in substituting the other title insurance company

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as the Title Company, including any additional premium charges by the other title
insurance company, any cancellation charges by the original title insurance
company and any costs to have the Updated Survey certified to the other title
insurance company.

     (v) Extension of Closing Date. If the Seller Parties determine that
they will be unable to remove or cure any Unpermitted Exceptions prior to Closing,
the Seller Parties shall have the right, but not the obligation, to postpone the
Closing to a date not later thirty-one (31) days after the originally scheduled
Closing Date by providing written notice to the Purchaser Parties thereof at least
three (3) Business Days prior to the then scheduled Closing Date.

     (d) Title Policy. At Closing, the Seller Parties shall use commercially
reasonable efforts to cause the Title Company to issue an owner’s title insurance policy to
the Purchaser Parties (which may be in the form of a mark up of the Title Commitment or a
proforma policy) in accordance with the Title Commitment, insuring in the amount of the
Purchase Price OwnerCo LLC’s title to the Real Property as of the date and time of Closing
Date, subject only to the Permitted Exceptions, and containing such endorsements as the
Title Company has agreed to issue during the Due Diligence Period (it being acknowledged
that same may be effectuated by issuance of a non-imputation endorsement thereto, as may be
customary for entity-interest transfers, at Purchaser’s sole election) (the “Title Policy”).
The Parties acknowledge that the delivery of the Title Policy by the Seller Parties to the
Purchaser Parties at Closing is a Purchaser Parties Closing Condition.

     (e) Conveyance of the Target Interests. At Closing, (i) the Seller Parties
shall convey the Target Interests free and clear of all liens and encumbrances, (ii) the
Real Property shall be subject only to (1) all Permitted Exceptions, and (2) all Unpermitted
Exceptions which are cured by causing the Title Company to remove or insure over in a manner
satisfactory to the Purchaser Parties in their sole discretion such Unpermitted Exceptions
in the Title Policy, but which otherwise are not removed from title, and (iii) the Personal
Property shall be free and clear of all liens and encumbrances, except for the Equipment
Leases which shall be subject only to the ownership interest of the lessor thereunder.

     5. CLOSING DOCUMENTS.

     (a) Seller Parties Closing Documents. At the Closing, the Seller Parties shall
deliver or cause to be delivered to the Purchaser Parties or deposited with Escrow Agent in
the Closing Escrow to be delivered to the Purchaser Parties at Closing, all of the (i)
documents set forth in this Section 5(a), each of which shall have been duly
executed by the applicable Seller Party and/or Manager, each as applicable, and acknowledged
(if required), and (ii) other items set forth in this Section 5(a) (the “Seller
Parties Closing Documents”), as follows:

     (i) Reasonable evidence of authority of the Seller Parties to consummate the
transactions contemplated by this Agreement;

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     (ii) An Assignment and Assumption of Membership Interests in the form of
Exhibit B, for each Target Interest from each applicable Seller Party assigning all
of the respective Target Interests to the applicable Purchaser Party on the terms
set forth therein;

     (iii) The Title Policy and such title affidavits, undertakings, and similar
instruments in form and substance reasonably acceptable to the Title Company as may
be necessary in order to cause the Title Company to issue the Title Policy;

     (iv) State, County and Municipal Transfer Tax Declarations and other documents
as required by law or as reasonably required by the Title Company (collectively,
“Title Documents”) with respect to transfer of the Target Interests;

     (v) Any sales tax and real estate transfer tax, notice of sale of assets,
inventory resale certificate or like governmental report required by any
Governmental Authority having jurisdiction over the Property;

     (vi) Non-Foreign Affidavit;

     (vii) The settlement statement prepared pursuant to Section 8(b);

     (viii) A certificate, executed by the Seller Parties, certifying to the
Purchaser Parties that all of the Seller Parties’ representations and warranties set
forth herein are true and correct in all material respects as of the Closing as if
made on the Closing Date;

     (ix) A letter of direction to Escrow Agent directing Escrow Agent to release
the Seller Parties’ Closing Documents, subject to the terms of this Agreement; and

     (x) Such other documents and instruments as may be reasonably requested by the
Purchaser Parties in order to consummate the transaction described in this
Agreement.

     (b) Purchaser Parties Closing Documents. At the Closing, the Purchaser Parties
shall deliver or cause to be delivered to the Seller Parties or deposited with Escrow Agent
in the Closing Escrow to be delivered to the Seller Parties all of the (i) documents set
forth in this Section 5(b), each of which shall have been duly executed by the
applicable Purchaser Party and acknowledged (if required), and (ii) other items set forth in
this Section 5(b) (the “Purchaser Parties Closing Documents” and together with the
Seller Parties Closing Documents, the “Closing Documents”), as follows:

     (i) Reasonable evidence of authority of the Purchaser Parties to consummate the
transaction contemplated in this Agreement;

     (ii) A letter of direction to Escrow Agent directing Escrow Agent to disburse
the Deposit to the Seller Parties, subject to the terms of this Agreement;

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     (iii) A counterpart of each of the documents and instruments to be delivered by
the Seller Parties under Section 5(a) which require execution by the
Purchaser Parties, including, but not limited to, an Assignment and Assumption of
Membership Interests for each Target Interest from each applicable Purchaser Party;

     (iv) A certificate, executed by the Purchaser Parties, certifying to the Seller
Parties that all of the Purchaser Parties’ representations and warranties set forth
herein are true and correct in all material respects as of the Closing as if made on
the Closing Date; and

     (v) Such other reasonable assumption agreements, instruments, and other
documents, in each case duly executed by the Purchaser Parties, as the Seller
Parties or the Title Company, may reasonably require in order to complete the
transactions contemplated hereunder or to evidence compliance by the Purchaser
Parties with the covenants, agreements, representations and warranties made by the
Purchaser Parties hereunder.

     (c) Closing Costs. In addition to the other costs and expenses to be paid by
the Seller Parties set forth elsewhere in this Agreement, the Seller Parties shall pay for
the following items in connection with this transaction: (i) one half (1/2) of the fees and
expenses for the Escrow Agent; and (ii) the fees and expenses of its own attorneys,
accountants and consultants. In addition to the other costs and expenses to be paid by the
Purchaser Parties as set forth elsewhere in this Agreement, the Purchaser Parties shall pay
for the following items in connection with this transaction: (1) any transfer taxes payable
in connection with the conveyance of the Target Interests; (2) the fees and expenses
incurred by the Purchaser Parties for Purchaser Parties’ Inspectors or otherwise in
connection with the Inspections; (3) the premium, fees and expenses for the Title
Commitment, Title Policy and Survey; (4) any sales or similar tax (other than transfer tax,
which is addressed above) payable in connection with the conveyance of the Target Interests;
(5) any recording charges; (6) any fees or expenses payable for the assignment, transfer or
conveyance (by change of control as contemplated hereby) of any Contracts, Licenses and
Permits, IT Systems, Intellectual Property, Plans and Specifications and Warranties, (7) one
half (1/2) of the fees and expenses for the Escrow Agent; (8) any mortgage tax, title
insurance fees and expenses for any loan title insurance policies, recording charges or
other amounts payable in connection with any financing obtained by the Purchaser Parties;
and (9) the fees and expenses of its own attorneys, accountants and consultants. All other
fees, costs and expenses not expressly addressed in this Section 5(c) or elsewhere
in this Agreement shall be allocated between the Seller Parties and the Purchaser Parties in
accordance with applicable local custom for similar transactions.

     6. CONDITIONS PRECEDENT

     (a) Conditions to Seller Parties’ Obligations for the Closing. The obligations
of the Seller Parties pursuant to this Agreement with regard to the Closing are subject to
the satisfaction of each of the following conditions precedent prior to or at the Closing

29

 

(unless specifically waived by the Seller Parties in writing) (each a “Seller Parties
Closing Condition”):

     (i) The Seller Parties shall have obtained Seller Parties Board Approval;

     (ii) The Purchaser Parties shall have delivered the Purchase Price to the
Seller Parties or deposited the Purchase Price with Escrow Agent in the Closing
Escrow to be delivered to the Seller Parties at Closing;

     (iii) The covenants and obligations of the Purchaser Parties in this Agreement
shall have been performed in all material respects;

     (iv) The representations and warranties of the Purchaser Parties set forth
herein shall be true and correct as of the Closing Date in all material respects;

     (v) No consent of any Governmental Authority shall be required for the Closing
and the consummation of the transactions contemplated by this Agreement;

     (vi) All instruments and documents required on the part of the Purchaser
Parties to be executed and delivered to effect the Closing shall be in form and
substance required herein or otherwise reasonably satisfactory to the Seller
Parties;

     (vii) No order of any court of competent jurisdiction shall have been issued in
any action commenced by parties other than the Seller Parties or their Affiliates
declaring the illegality or invalidity of, or enjoining, the transactions
contemplated hereby;

     (viii) All of the Purchaser Parties Closing Documents shall have been delivered
to the Seller Parties or deposited with Escrow Agent in the Closing Escrow to be
delivered to the Seller Parties at Closing; and

     (ix) If any of the Seller Parties Closing Conditions is not satisfied at
Closing, subject to the Purchaser Parties’ right to cure under Sections
16(b) and 16(c), then, in addition to any other right or remedy that the
Seller Parties may have hereunder, the Seller Parties shall have the right to (1)
terminate this Agreement by providing written notice to the Purchaser Parties, in
which case the Deposit shall be disbursed to the Seller Parties or the Purchaser
Parties in accordance with Section 2(d)(ii) and the other terms of this
Agreement, and the Parties shall have no further rights or obligations under this
Agreement, except those which expressly survive such termination, or (2) waive any
of the Seller Parties Closing Conditions at or prior to Closing.

     (b) Conditions to the Purchaser Parties Obligations for Closing. The
obligations of the Purchaser Parties pursuant to this Agreement with regard to the

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Closing are subject to the satisfaction of each of the following conditions precedent
prior to or at Closing (unless specifically waived by the Purchaser Parties in writing)
(each a “Purchaser Parties Closing Condition”):

     (i) The Purchaser Parties shall have obtained or have been deemed to have
obtained the Purchaser Parties Board Approval;

     (ii) The Seller Parties shall have caused (or made arrangements to cause at
Closing (including the use of the Purchase Price therefor)) the prepayment of the
Debt (as defined in the Mortgage Loan Agreement) in whole;

     (iii) The Purchaser Parties shall have received the Manager’s Estoppel
Certificate;

     (iv) The covenants and obligations of the Seller Parties in this Agreement
shall have been performed in all material respects;

     (v) The representations and warranties of the Seller Parties contained herein
shall be true and correct as of the Closing Date in all material respects as if made
on the Closing Date (subject to the Seller Parties’ right to update the
representations and warranties contained herein set forth in Sections 12(j)
and 12(k));

     (vi) No consent of any Governmental Authority shall be required for the Closing
and the consummation of the transactions contemplated by this Agreement;

     (vii) All instruments and documents required on the part of the Seller Parties
to be executed and delivered to effect the Closing shall be in form and substance
required herein or otherwise reasonably satisfactory to the Purchaser Parties;

     (viii) Issuance of the Title Policy;

     (ix) No order of any court of competent jurisdiction shall have been issued in
any action commenced by parties other than the Purchaser Parties or their Affiliates
declaring the illegality or invalidity of, or enjoining, the transactions
contemplated hereby;

     (x) All of the Seller Parties Closing Documents shall have been delivered to
the Purchaser Parties or deposited with Escrow Agent in the Closing Escrow to be
delivered to the Purchaser Parties at Closing;

     (xi) If any of the Purchaser Parties Closing Conditions is not satisfied at
Closing, then, in addition to any other right or remedy that the Purchaser Parties
may have hereunder, the Purchaser Parties shall have the right (1) subject to the
Seller Parties’ right to cure under Section 15(b), to terminate this
Agreement by providing written notice to the Seller Parties, in which case the

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Deposit shall be refunded to the Purchaser Parties or the Seller Parties in
accordance with Section 2(d)(ii) and the other terms of this Agreement, and
the Parties shall have no further rights or obligations under this Agreement, except
those which expressly survive such termination, or (2) to waive any of the Purchaser
Parties Closing Conditions at or prior to Closing.

     (c) Frustration of Closing Conditions. The Seller Parties and the Purchaser
Parties may not rely on the failure of the Seller Closing Conditions or Purchaser Parties
Closing Conditions, respectively, if such failure was caused by such Party’s failure to act
in good faith or to use its commercially reasonable efforts to cause the Closing to occur.

     7. APPORTIONMENTS.

     (a) The matters and items listed in this Section 7(a) shall be apportioned
between the Seller Parties and the Purchaser Parties as of the Adjustment Time. For
purposes hereof, the term “Adjustment Time” means 12:01 a.m. eastern time on the day of the
Closing.

     (i) Generally. Except as otherwise expressly provided herein, all
income and expenses of the Property with respect to the period prior to the
applicable Adjustment Time shall be for the account of the Seller Parties, and all
income and expenses of the Property with respect to the period from and after the
applicable Adjustment Time shall be for the account of the Purchaser Parties.

     (ii) Revenue; Accounts Receivable. All revenue, sales and income of
any kind resulting from the ownership or operation of the Hotel, including, but not
limited to, revenue, sales and income from the rental of rooms, suites and meeting
and banquet facilities, food and beverage sales, parking charges, laundry (including
coin operated equipment, if any) charges, telephone charges, vending machines,
checkrooms, rental and other payments from licensees and concessionaires occupying
space or rendering services at the Hotel, shall be apportioned as of the applicable
Adjustment Time, subject to the following provisions of this Section
7(a)(ii).

     (1) Accounts Receivable. The Purchaser Parties shall pay to the Seller
Parties an amount equal to any accounts receivable (including, without
limitation, credit card sales and all items that are entered as accounts
receivable on the books and records for the Hotel) that are less than or
equal to ninety (90) days old with respect to the ownership or operation of
the Hotel and which arise with respect to any prior guest or then-current
guest of the Hotel as of the applicable Adjustment Time. The Purchaser
Parties shall be entitled to all amounts collected for such accounts
receivable. The Seller Parties shall not receive any payment from the
Purchaser Parties for any accounts receivable (including, without
limitation, credit card sales and all items that are entered as accounts
receivable on the books and records for the Hotel) that are greater than
ninety (90) days old with respect to the ownership or operation of the
Hotel, and such accounts receivable shall be assigned to the Seller Parties

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at Closing. The Seller Parties shall be entitled to all amounts
collected for such accounts receivable.

     (2) Management Agreement. Without duplication of any other amounts
prorated hereunder, the Base Management Fee and the Incentive Management Fee
shall be prorated and apportioned as of the Adjustment Time (which, with
respect to the Incentive Management Fee, shall be prorated on straight-line
basis for the Operating Year in which Closing occurs without regard to
seasonality) with the Seller Parties responsible for any Base Management Fee
or Incentive Management Fee for the period prior to the Closing Date and the
Purchaser Parties responsible for any Base Management Fee or the Incentive
Management Fee for the period from and after the Closing Date.

     (3) Bookings; Night Commencing Prior to Closing. All amounts paid or
payable in respect of Bookings shall be apportioned as of the applicable
Adjustment Time. Upon Closing, the Purchaser Parties shall cause OwnerCo
LLC and/or Operating Tenant (as applicable) to perform their respective
obligations under any Bookings for events occurring after the applicable
Adjustment Time, including obligations with respect to any prepaid room
charges, rents and other consideration, all security deposits and other
deposits and all other liabilities for actions taking place after the
Closing with respect to Bookings for events taking place after Closing, and
the Purchaser Parties shall receive a credit for all prepaid room charges,
rents and other consideration, all security deposits and other deposits and
all other liabilities with respect to Bookings that were received by OwnerCo
LLC or Operating Tenant for events that were to take place after the
Closing, even if such Bookings are terminated or forfeited prior to the
Closing. Notwithstanding anything herein to the contrary, the Seller
Parties and the Purchaser Parties agree that all revenue from charges to
transient guests of the Hotel for lodging and other items for the night
commencing immediately prior to the Closing Date, including any parking
charges, and all accounts receivable (including credit card sales) with
respect to such one-night room charge, shall be credited fifty percent (50%)
to the account of the Seller Parties less any excise, sales, use or
occupancy taxes as applicable, the amount of which shall be retained in
OwnerCo LLC or Operating Tenant (as applicable) and the Purchaser Parties
shall cause the same to be paid to the applicable Governmental Authority in
accordance with Section 7(d); and the Purchaser Parties shall have
the right to the other fifty percent (50%) of such revenue for the night
commencing immediately prior to the Closing Date.

     (4) Owner Cash. All Owner Cash shall be counted by the Seller Parties
and the Purchaser Parties as of the applicable Adjustment Time, and the
Purchase Price shall be increased by the amount thereof.

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     (5) Cash on Hand. All Cash on Hand shall be counted by the Seller
Parties and the Purchaser Parties as of the applicable Adjustment Time, and
the Purchase Price shall be increased by the amount thereof. Subject to
Manager’s right to operate the Hotel in the ordinary course under the
Management Agreement, all Cash on Hand shall not be removed by or on behalf
of the Seller Parties or any Affiliate thereof and shall become the property
of the Purchaser Parties upon the Closing of the Hotel.

     (6) Replacement Reserve. The balance in the Replacement Reserve shall
be counted by the Seller Parties and the Purchaser Parties as of the
Adjustment Time, and the Purchase Price shall be increased by the amount of
any Surplus Replacement Reserve as of the Adjustment Time.

     (7) Vending Machines, Etc. Without double counting for any funds that
constitute Cash on Hand, all vending machine revenues, and pay telephone and
washroom and checkroom revenues as of the applicable Adjustment Time for the
Closing shall be counted by the Seller Parties (with representatives of the
Purchaser Parties present, if so desired) as of the applicable Adjustment
Time, and the Purchase Price shall be increased in the amount thereof to the
extent the owner or operator of the Hotel is entitled to such revenues.
Subject to Manager’s right to operate the Hotel in the ordinary course under
the Management Agreement, all such revenues shall not be removed from the
Hotel by or on behalf of the Seller Parties or any Affiliate thereof and
shall become the property of the Purchaser Parties upon the Closing. If the
owner of the Hotel is entitled to only a portion of the revenues from the
vending machines or pay telephones or if the owner of the Hotel is entitled
to some other compensation in connection therewith instead, such as fees
payable by the vendor for maintaining its machines or telephones in the
Hotel, such portion of the revenues or such other compensation shall be
prorated between the Seller Parties and the Purchaser Parties instead.

     (8) Gift Certificates. The Seller Parties shall give the Purchaser
Parties a credit at Closing for the value of all unexpired gift certificates
or coupons outstanding as of the Closing which are specific to the Hotel and
entitle guests to use Hotel rooms or facilitates for no consideration or at
discounted rates.

     (b) Trade Payables. The Purchaser Parties shall receive a credit for the
amount of all amounts payable to vendors or other suppliers of goods or services for the
Hotel (the “Trade Payables”) for which goods or services have been delivered to the Hotel
prior to Closing which have accrued, and the Purchaser Parties shall, from and after
Closing, cause OwnerCo LLC and/or Operating Tenant to pay the Trade Payables as and when
same become due and payable. The Seller Parties shall receive a credit for all advance
payments or deposits made with respect to FF&E, Supplies, F&B and Retail Merchandise
ordered, but not delivered to the Hotel prior to the Closing Date, and the

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Purchaser Parties shall cause OwnerCo LLC and/or Operating Tenant to pay the amounts as
and when same become due and payable for such FF&E, Supplies, F&B and Retail Merchandise
which were ordered prior to Closing. This Section 7(b)shall survive the Closing.

     (c) Contracts. All charges, fees and expenses under the Contracts shall be
apportioned as of the applicable Adjustment Time.

     (d) Taxes. All Taxes shall be apportioned as of the applicable Adjustment
Time, subject to the following provisions of this Section 7(d). The Seller Parties
shall be charged with such proration prior to the Adjustment Time and the Purchaser Parties
shall be charged with such proration for the period from and after the Adjustment Time.

     (i) All Taxes that are not based upon or related to income, receipts or meters
shall be prorated for the tax year in which the Closing Date occurs. If the amount
of any such item is unascertainable prior to the Closing Date, (1) the credit
therefor shall be based on the most recently available bill therefor or, if
unavailable, the Seller Parties’ good faith estimate thereof, approved by the
Purchaser Parties (which approval shall not be unreasonably withheld or delayed),
and (2) the Parties shall re-prorate such Taxes based upon the actual tax bills
within thirty (30) days after such tax bills are received. Notwithstanding anything
to the contrary contained herein, the Seller Parties shall be entitled to the full
amount of all refunds and rebates resulting from any property tax appeals or
requests for reassessments filed by the Seller Parties or any Affiliate thereof for
tax years prior to the tax year in which the Closing occurs, and if either Party has
filed a tax appeal or request for reassessment for the tax year in which the Closing
occurs, the Seller Parties and the Purchaser Parties shall share the amount of any
rebate or refund resulting therefrom (after first paying to the applicable Party all
reasonable costs and expenses incurred by such Party in pursuing such appeal or
reassessment) in proportion to their respective periods of ownership of the Property
for such tax year. For purposes of determining the rebate or refund resulting from
a reassessment of the tax year in which the Closing occurs, all reasonable costs and
expenses of either Party incurred in connection with the filing and prosecution of
such claim shall be deducted and paid to such Party before making the allocation set
forth in the preceding sentence.

     (ii) The Seller Parties shall pay or cause to be paid (under the terms of the
Management Agreement) (1) all sales, revenue and excise taxes (and any surtax,
interest and penalties thereon) (collectively, “Sales Tax”) payable with respect to
OwnerCo LLC’s and Operating Tenant’s operation of the Property for periods prior to
the applicable Adjustment Time, (2) all room occupancy and use taxes, entertainment
taxes and gaming taxes due and payable with respect to the Hotel for the periods
prior to the Adjustment Time. The Purchaser Parties shall pay or cause to be paid
(under the terms of the Management Agreement) (A) all Sales Tax payable with respect
to the Purchaser Parties’ operation of the Hotel for periods from and after the
Adjustment Time, (B) all room occupancy and use taxes, entertainment taxes and
gaming taxes due and payable with respect to the

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Hotel for the periods from and after the Adjustment Time, and (C) any Sales
Taxes due in connection with the sale to the Purchaser Parties of those items of
Personal Property for which Sales Tax is payable. Notwithstanding anything to the
contrary contained in the foregoing, each Party shall cause to be paid fifty percent
(50%) of all room occupancy and use taxes due and payable with respect to the Hotel
for the night commencing immediately prior to the Closing Date.

     (e) Insurance. Notwithstanding anything herein to the contrary, there shall be
no apportionment of amounts paid or payable for OwnerCo LLC’s or Operating Tenant’s
insurance relating to the Property, which insurance the Seller Parties shall cause to be
cancelled as of Closing, and the Seller Parties shall be entitled to any refunds and
payments with respect to such cancelled policies. At Closing, the Purchaser Parties shall
cause to be issued replacement insurance in the coverages and amounts required under the
Management Agreement.

     (f) Utilities. Utilities and fuel, including, without limitation, steam,
water, electricity, gas and oil shall be prorated as of Adjustment Time. The Seller Parties
shall cause the meters, if any, for utilities to be read on the Closing Date and the bills
rendered on the basis of such readings to be paid. If any such meter reading for any
utility is not available, then adjustment therefor shall be made on the basis of the most
recently issued bills therefor which are based on meter readings no earlier than thirty (30)
days prior to the Closing Date; and such adjustment shall be re-prorated when the next
utility bills are received. Notwithstanding anything herein to the contrary, the Purchase
Price shall be increased by an amount equal to the value of any refundable pre-paid deposits
made to utility companies.

     (g) Employee Expenses. The Purchaser Parties shall receive a credit at Closing
for any wages or benefits accrued prior to the Closing which are payable or owed to the
Employees, including any accrued sick, personal and vacation days and any unfunded or
underfunded pension obligation; provided, however, the Parties shall
re-prorate the amount of the credit to reflect the actual amount paid, or unfunded, as
applicable, by the Purchaser Parties (or Manager) in regards to the applicable employees
after Closing in accordance with the reconciliation procedures set forth in Section
8(c) below. This Section 7(g) shall survive the Closing.

     (h) Other Items. The Parties shall apportion as of the applicable Adjustment
Time such other items as are provided for in this Agreement or as are customarily prorated
and adjusted in the sale of a hotel.

     8. Apportionment Procedures.

     (a) Draft Settlement Statement. Not later than five (5) Business Days prior to
the Closing Date, the Seller Parties shall prepare, or cause to be prepared, and deliver to
the Purchaser Parties a draft settlement statement setting forth amounts to be prorated
between the Seller Parties and the Purchaser Parties at the Closing pursuant to this
Section 8(a), together with reasonable documentation supporting the information set
forth in such settlement statement. The draft settlement statement shall contain the Seller
Parties’ good faith estimate of the amounts (based on facts and circumstances then

36

 

known to the Seller Parties), as of the anticipated applicable Adjustment Time, of the
items to be prorated between the Parties, or to be credited to either Party, pursuant to
this Section 8(a). The Purchaser Parties shall review the draft settlement
statement and, not later than three (3) Business Days prior to the Closing Date, the
Purchaser Parties shall furnish to the Seller Parties any comments which the Purchaser
Parties may have with respect thereto, or any objection it may have to the amounts shown
thereon, together with its reasons for such objection. Thereafter, the Parties (each acting
reasonably and in good faith) shall attempt to resolve, prior to the Closing Date, any
disagreement with respect to such draft settlement statement.

     (b) Apportionment at Closing. The Parties shall cause the information set
forth in the draft settlement statement to be updated with actual information available as
of the applicable Adjustment Time. Not later than the Closing Date, the Seller Parties
shall deliver to the Purchaser Parties and the Title Company, acting as closing escrow
agent, a settlement statement for purposes of the respective Closing, which statement shall
include the matters on which the Parties have agreed pursuant to Section 8(a)
hereof, as updated with actual information as of the applicable Adjustment Time. With
respect to any matter on which the Parties still disagree as of such time, the Seller
Parties’ good faith determination of the amount in question as of the applicable Adjustment
Time will be used for purposes of such Closing, subject to reconciliation after such Closing
pursuant to Section 8(c) hereof. The amounts shown in such settlement statement
shall be used in determining the amounts due to the Seller Parties at such Closing, and the
closing escrow agent shall rely conclusively thereon in settling the accounts of the Parties
at such Closing.

     (c) Reconciliation. As soon as reasonably practicable after Closing (but in no
event later than one hundred eighty (180) days after Closing, or such later date with
respect to real estate taxes depending upon the availability of final bills for such taxes),
the Seller Parties and the Purchaser Parties, acting reasonably and in good faith, shall
reconcile between themselves, outside of escrow, the amounts to be prorated pursuant to
Section 7, using any updated information with respect to such matters then
available. Each Party shall provide to the other reasonable access to the books, records,
computer runs and other documents relating to the Property which contain information
relevant to completing the final reconciliation. If the final reconciliation of prorations,
as agreed to between the Parties, shows any amount due from the Seller Parties to the
Purchaser Parties, or vice versa, the Parties shall make the appropriate payments on account
thereof within five (5) Business Days after reaching agreement on the final reconciliation.

     (d) Representatives. Each Party has the right to have their representatives
present prior to, at or after the applicable Adjustment Time for the purpose of observing
the taking of any inventories (including the counting of house funds), or for any other
matters to be performed pursuant to this Section 8(d), and such representatives
shall be given reasonable access at reasonable times to the books and records of the Hotel
being transferred which are relevant to the preparation of the closing apportionments in
accordance herewith. The Parties shall each be liable for the charges of their own
respective representatives in conducting and supervising such audits and inventories.

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     (e) Calculations. All prorations shall be made on the basis of the actual
number of days in the year and month in which the Closing occurs or in the period of
computation. Except as otherwise expressly provided herein, all apportionments and
adjustments shall be made on an accrual or cash basis as set forth herein.

     (f) Post-Closing Access. After the Closing, the Seller Parties shall have
reasonable access to the books and records of the Hotel to enable the Seller Parties to
audit the same with respect to the period of ownership or operation of the Hotel by the
Seller Parties; provided, that (i) the Seller Parties shall not unreasonably
interfere with the operation of the Hotel, and (ii) a representative of the Purchaser
Parties shall have the right, upon request, to accompany the Seller Parties during such
access. The Purchaser Parties shall reasonably cooperate with the Seller Parties in
connection with such audit.

     (g) Survival. The provisions of this Section 8 shall survive each
Closing or earlier termination of this Agreement.

     9. REPRESENTATIONS AND WARRANTIES.

     (a) Representations and Warranties of the Seller Parties. Subject to
Section 9(b) and Section 11(b)hereof, each of the Seller Parties hereby
represents and warrants to the Purchaser Parties that, as of the Effective Date:

     (i) The Seller Parties are each a limited liability company, duly organized and
validly existing under the laws of the State of Delaware;

     (ii) Subject to Seller Parties Board Approval, the Seller Parties each have the
limited liability company power and authority to execute and deliver, and perform
the Seller Parties’ obligations under this Agreement;

     (iii) No voluntary or involuntary actions are pending against the Seller
Parties under the bankruptcy laws of the United States or any state thereof, and the
Seller Parties have not made any general assignment for the benefit of creditors or
permitted the appointment of a receiver of its business or assets;

     (iv) Subject to Seller Parties Board Approval, the Seller Parties’ execution
and delivery of this Agreement, and the performance of the Seller Parties’
obligations hereunder, have been authorized by all necessary limited liability
company action on the part of applicable Seller Party;

     (v) Subject to Seller Parties Board Approval, the execution, delivery and
performance of this Agreement and the consummation of the transactions contemplated
hereby by Seller (1) do not violate any provision of, or cause a default under, or
result in the acceleration of any obligation under, any material agreement which
will be in effect on and after the respective Closing Date to which the Seller
Parties are a party or any Applicable Law by which the Seller Parties or the
properties, assets, business or operations of the Seller Parties may be bound or
affected, and which in any event would have a material adverse effect on the ability
of each Seller Party to perform its obligations hereunder,

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(2) do not require the consent or approval of any Governmental Authority, and (3)
do not result in the creation or imposition of any lien or equity of any kind
whatsoever upon, or give to any other person any interest or right (including any
right of termination or cancellation) in or with respect to, the Transfer Interests,
or any agreement to which the Seller Parties are a party or the business or
operations of the Seller Parties;

     (vi) This Agreement constitutes, and all other documents required by this
Agreement to be executed by the Seller Parties shall constitute when so executed,
the valid and binding obligation of the Seller Parties, enforceable against the
Seller Parties in accordance with their respective terms, except to the extent that
enforcement may be limited by applicable bankruptcy, insolvency, moratorium and
other principles relating to or limiting the rights of contracting parties
generally;

     (vii) Neither Seller Party is a “foreign person” as defined in Section
1445(f)(3) of the Code;

     (viii) Mezz OwnerCo LLC, Mezz LeaseCo LCC, OwnerCo LLC and LeaseCo LLC are each
classified for federal income tax purposes as a disregarded entity pursuant to
Treasury Regulations Section 301.7701-3.

     (ix) Platinum OwnerCo has good and valid title to all of the outstanding
membership interests in Mezz OwnerCo (subject to the agreement to transfer certain
of such Mezz OwnerCo Interests to MezzCo as hereinafter set forth), which shall be
free and clear of all liens and encumbrances as of the Closing;

     (x) Mezz OwnerCo LLC is validly existing and in good standing in the State of
Delaware;

     (xi) Mezz OwnerCo LLC has good and valid title to all of the outstanding
membership interests in OwnerCo LLC, which shall be free and clear of all liens and
encumbrances as of the Closing;

     (xii) OwnerCo LLC is validly existing, in good standing in the State of
Delaware, and is qualified to do business in the Commonwealth of Pennsylvania;

     (xiii) Platinum LeaseCo has good and valid title to all of the outstanding
membership interests in Mezz LeaseCo, which shall be free and clear of all liens and
encumbrances as of the Closing;

     (xiv) Mezz LeaseCo LLC is validly existing and in good standing in the State of
Delaware;

     (xv) Mezz LeaseCo LLC has good and valid title to all of the outstanding
membership interests in LeaseCo LLC, which shall be free and clear of all liens and
encumbrances as of the Closing;

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     (xvi) LeaseCo LLC is validly existing, in good standing in the State of
Delaware, and is qualified to do business in the Commonwealth of Pennsylvania;

     (xvii) Except as set forth on Schedule 9(a)(xvii) to the Seller Parties’
knowledge, neither the Seller Parties nor any Affiliate thereof has received written
notice from any Governmental Authority of (1) any pending violation of any
Applicable Law, including, but not limited to, environmental laws, fire and building
codes and the Americans with Disabilities Act, with respect to the Hotel, the Real
Property or the Improvements, which in any event would reasonably likely have a
material adverse effect on the ownership and use of the Hotel, or (2) any pending
violation, suspension, revocation, or non-renewal of any license or permit with
respect to the Hotel, which in any event would reasonably likely have a material
adverse effect on the ownership and use of the Hotel;

     (xviii) Except as set forth on Schedule 9(a)(xviii), to the Seller Parties’
knowledge, neither the Seller Parties nor any of their Affiliates are a party to any
pending or threatened action, suit, condemnation or eminent domain proceeding, or
other litigation or proceeding with respect to the Hotel, or which would be
reasonably likely to have a material adverse effect on the Seller Parties’ ability
to consummate the transactions contemplated herein;

     (xix) The Management Agreement has not been further modified or amended and is
in full force and effect. The Seller Parties have delivered a true, correct and
complete copy of the Management Agreement to the Purchaser Parties. All fees and
other amounts due and payable under the Management Agreement have been paid; and, to
Seller Parties’ knowledge, there are no material defaults, disputes, claims, rights
of offset or events which, with the giving of notice or the passage of time or both,
could become material defaults under the Management Agreement. Neither OwnerCo LLC
nor Operating Tenant has given or received any written notice of any breach or
default under the Management Agreement which has not been cured;

     (xx) None of the Target Parties, OwnerCo LLC, or Operating Tenant have any
employees;

     (xxi) The Seller Parties have delivered a true, correct and complete copy of
the Operating Lease to the Purchaser Parties;

     (xxii) There are no Tenant Leases at the Hotel;

     (xxiii) Except as set listed on Schedule 9(a)(xxiii), neither the Seller
Parties nor any subsidiary thereof is subject to any pending Tax audit by any
Governmental Authority, and to the Seller Parties’ knowledge, there are no proposed
Tax audits of the Seller Parties or any subsidiary thereof;

     (xxiv) Except for in the “Work-in-Progress” as set forth on Schedule
9(a)(xxiv), no construction, repair, remodeling or renovation work

40

 

(other than day-to-day repairs and cosmetic refurbishments) is in progress with respect to
the Hotel;

     (xxv) Except as set listed on Schedule 9(a)(xxv), (i) OwnerCo LLC, LeaseCo LLC,
and each Target Party have each filed all Tax returns required by law to be filed by
it, (ii) all Taxes for which OwnerCo LLC, LeaseCo LLC, or either Target Party is
liable and that are due on or before the Closing Date have been paid or will be paid
in full on or before the Closing Date, and (iii) no written claim has been received
by OwnerCo LLC, LeaseCo LLC, or either Target Party from any Tax authority in any
jurisdiction where such party does not file Tax returns that it is, or may be,
subject to taxation by that jurisdiction.

     (xxvi) The financial statements listed on Schedule 9(a)(xxvi) including without
limitation, the operating statements, general ledger and reconciliations, (1) were
prepared in accordance with the Uniform System of Accounts as modified according to
the schedule attached to Schedule 9(a)(xxvi), and (2) fairly present in all material
respects the financial performance of the Hotel for the periods reflected therein,
except as may be reflected on any footnotes to such statements or supplemental
materials relating thereto, and (3) are true, accurate and complete in all material
respects;

     (xxvii) Attached hereto as Schedule 9(a)(xxvii) is a list of all material
Licenses and Permits, and the Seller Parties have delivered true, correct and
complete copies thereof to the Purchaser Parties;

     (xxviii) Attached hereto as Schedule 9(a)(xxviii) is a list of all Material
Contracts and, to the Seller Parties’ knowledge, all other Contracts, including all
amendments and modifications respectively thereto; and the Seller Parties have
delivered true, correct and complete copies respectively thereof to the Purchaser
Parties. Except as set forth on Schedule 9(a)(xxviii), to the Seller Parties’
knowledge, neither OwnerCo LLC nor Operating Tenant has given or received any
written notice of any breach or default under any Contracts, which has not been
cured and there are no material defaults or disputes under the Contracts;

     (xxix) To the Seller Parties’ knowledge, there are no union contracts or other
labor agreements in effect with respect to the Employees;

     (xxx) To the Seller’s Parties’ knowledge, the Hotel is zoned C-5.

     (xxxi) To the Seller Parties’ knowledge, OwnerCo LLC and/or Operating Tenant
own the Personal Property, other than any leased Personal Property under the
Equipment Leases, free of all liens and encumbrances;

     (xxxii) Neither the Seller Parties nor any Person controlling the Seller
Parties is (1) identified on the list of “Specially Designated Nationals or Blocked
Persons” maintained by the U.S. Department of the Treasury’s Office of Foreign
Assets Control (“OFAC”), (2) a “Specially Designated National or Blocked Person”,
(3) controlled by the government of any country that is subject to an

41

 

embargo or economic or trade sanctions by the United States government, (4)
acting on behalf of a government of any country that is subject to such an embargo,
and (5) involved in business arrangements or otherwise engaged in transactions with
countries subject to economic or trade sanctions imposed by the United States
government. For the purposes of this Agreement, “Specially Designated National
Blocked Person” means: (x) a person or entity designated by OFAC from time to time
as a “specially designated national or blocked person” or similar status, (y) a
person or entity described in Section 1 of U.S. Executive Order 13224, issued on
September 23, 2001, or (z) a person or entity otherwise identified by government or
legal authority as a person with whom either this firm or the foundation is
prohibited from transacting business. A list of such designations and the text of
the Executive Order are published under the Internet website address
www.ustreas.gov/offices/enforcement/ofac; and

     (xxxiii) The Seller Parties are not acting on behalf of an “employee benefit
plan” within the meaning of Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended (“ERISA”), that is subject to Title I of ERISA, a “plan”
within the meaning of Section 4975 of the Internal Revenue Code of 1986, as amended
(the “Code”), that is subject to Section 4975 of the Code, or an entity deemed to
hold “plan assets” within the meaning of 29 C.F.R. § 2510.3-101 (as modified by
Section 3(42) of ERISA) of any such employee benefit plan or plans.

     (b) Knowledge. The term “Seller Parties’ knowledge” and words of similar
import as used herein shall mean the actual present knowledge of Robert Springer, a board
member of each Platinum OwnerCo and Platinum LeaseCo. The Seller Parties are making the
foregoing representations and warranties based upon the actual, current knowledge of the
foregoing individuals and shall not be construed to impose upon such individual any duty to
investigate the matter to which he or she has actual, current knowledge.

     (c) Qualification of Seller Parties’ Representations and Warranties.
Notwithstanding the foregoing, if the Purchaser Parties have notice or knowledge of a breach
of any representation or warranty made by the Seller Parties in this Agreement (except to
the extent related to updates to the representations and warranties upon a transfer of any
Target Interests to any other Seller Party or any wholly-owned subsidiary of a Seller Party,
as permitted by Section 12(j), or a transfer of any Target Interests to MezzCo or
any termination of the agreement to transfer same, each as permitted pursuant to Section
12(k)) prior to (i) the expiration of the Due Diligence Period, and the Purchaser
Parties nevertheless elect not to terminate this Agreement pursuant to the Due Diligence
Contingency, or (ii) Closing, and the Purchaser Parties nevertheless proceed to close the
transaction described in this Agreement, such representation or warranty by the Seller
Parties shall be deemed to be qualified or modified to reflect the Purchaser Parties’ notice
or knowledge of such breach. The term “Purchaser Parties’ knowledge” and words of similar
import as used herein shall mean the actual present knowledge of Thomas C. Fisher, and shall
not be construed to impose upon such individual any duty to investigate the matter for which
he has knowledge.

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     (d) Purchaser Parties’ Representations and Warranties. The Purchaser Parties
hereby represent and warrant to the Seller Parties that, as of the Effective Date:

     (i) The Purchaser Parties are limited liability companies duly organized and
validly existing under the laws of the State of Delaware;

     (ii) Subject to Purchaser Parties Board Approval, the Purchaser Parties have
the limited liability company power and authority to execute and deliver, and
perform the Purchaser Parties’ obligations under, this Agreement;

     (iii) No voluntary or involuntary actions are pending against the Purchaser
Parties under the bankruptcy laws of the United States or any state thereof and the
Purchaser Parties have not made any general assignment for the benefit of creditors
or permitted the appointment of a receiver of its business or assets;

     (iv) Subject to Purchaser Parties Board Approval, the Purchaser Parties’
execution and delivery of this Agreement, and the performance of the Purchaser
Parties’ obligations hereunder, have been authorized by all necessary limited
liability company action on the part of the Purchaser Parties;

     (v) Subject to Purchaser Parties Board Approval, all necessary consents for the
Purchaser Parties to enter into this Agreement and perform its obligations hereunder
have been obtained and there are no pending actions or investigations the outcome of
which could adversely affect the Purchaser Parties’ ability to perform the Purchaser
Parties’ obligations hereunder;

     (vi) Neither the Purchaser Parties nor any Person controlling the Purchaser
Parties are (1) identified on the list of “Specially Designated Nationals or Blocked
Persons” maintained by OFAC, (2) Specially Designated National or Blocked Person,
(3) controlled by the government of any country that is subject to an embargo or
economic or trade sanctions by the United States government, (4) acting on behalf of
a government of any country that is subject to such an embargo, and (5) involved in
business arrangements or otherwise engaged in transactions with countries subject to
economic or trade sanctions imposed by the United States government.

     (vii) Each of the Purchase Parties (1) is not a Competitor, (2) is not
generally recognized in the community as being a Person of ill repute or a Person
with whom a prudent business Person would not wish to associate in a commercial
venture, (3) has, together with any other Person having a direct or indirect
ownership interest in Operating Tenant (after giving effect to the Closing), a net
worth of no less than twice the amount of the Minimum Equity Investment, and (4) is
not a Restricted Person.

     (viii) Subject to Purchaser Parties Board Approval, the execution, delivery and
performance of this Agreement and the consummation of the transactions contemplated
hereby by the Purchaser Parties (x) do not violate any

43

 

provision of, or cause a default under, or result in the acceleration of any
obligation under, any material agreement which will be in effect on and after the
Closing to which the Purchaser Parties is a party or any Applicable Law by which the
Purchaser Parties or the properties, assets, business or operations of the Purchaser
Parties may be bound or affected, and which in any event would have a material
adverse effect on the ability of the Purchaser Parties to perform it obligations
hereunder, (y) do not require the consent or approval of any Governmental Authority,
and (z) do not result in the creation or imposition of any lien or equity of any
kind whatsoever upon, or give to any other person any interest or right (including
any right of termination or cancellation) in or with respect to, any agreement to
which the Purchaser Parties are a party or the business or operations of the
Purchaser Parties or any of its properties or assets; and

     (ix) This Agreement constitutes, and all other documents required by this
Agreement to be executed by the Purchaser Parties shall constitute when so executed,
the valid and binding obligation of the Purchaser Parties, enforceable against the
Purchaser Parties in accordance with their respective terms, except to the extent
that enforcement may be limited by applicable bankruptcy, insolvency, moratorium and
other principles relating to or limiting the rights of contracting parties
generally.

     (e) Qualification of Purchaser Parties’ Representations and Warranties
Notwithstanding the foregoing, if the Seller Parties have notice or knowledge prior to
Closing of a breach of any representation or warranty made by the Purchaser Parties in this
Agreement and the Seller Parties nevertheless elect to close the transaction described in
this Agreement, such representation or warranty by the Purchaser Parties shall be deemed to
be qualified or modified to reflect the Seller Parties’ notice or knowledge of such breach.

     10. “As Is” Sale; Release.

     (a) The Purchaser Parties acknowledge, represent, warrant and agree that (i) the Seller
Parties have granted the Purchaser Parties the opportunity to examine the Target Interests
and the Property to become familiar with the physical condition thereof, and the Purchaser
Parties have had the opportunity to conduct such investigation of the condition and affairs
of the Property as the Purchaser Parties consider appropriate, and the Purchaser Parties
acknowledge that the Purchase Price has been negotiated based on the Purchaser Parties’
express agreement that there would be no contingencies to each Closing other than the
conditions set forth in Section 3 hereof, (ii) except as expressly contained in this
Agreement (including, without limitation, Section 9(a) hereof) or in any of the
Closing Documents, neither the Seller Parties nor any of their agents, employees,
representatives, accountants, attorneys, consultants, managers and Affiliates have made any
verbal or written representations, warranties, promises or guaranties whatsoever to the
Purchaser Parties, whether express or implied, (iii) except for the express representations,
warranties and covenants set forth in this Agreement, no representations, warranties,
promises or guaranties have been made with respect to the Target Interests or

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physical condition (including, without limitation the environmental condition) or
operation of the Property, the actual or projected revenue and expenses of the
Property, the zoning and other laws, regulations and rules applicable to the Property or the
compliance of the Property therewith (including, without limitation, compliance with any
applicable environmental or hazardous wastes law), the quantity, quality or condition of the
articles of Personal Property and fixtures included in the transactions contemplated hereby,
the use or occupancy of the Property or any part thereof or any other matter or thing
affecting or related to the Property or the transactions contemplated hereby, except as, and
solely to the extent, herein specifically set forth, and (iv) except for the express
representations, warranties and covenants set forth in this Agreement, the Purchaser Parties
have not relied on any statements, representations, warranties, promises or guaranties or
upon any statements made in any informational brochure with respect to the Property.

     (B) EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN THE CLOSING DOCUMENTS, THE
PURCHASER PARTIES ARE BUYING THE TARGET INTERESTS AND THE PROPERTY WITHOUT ANY
REPRESENTATIONS OR WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, OF ANY KIND WHATSOEVER, BY
MANAGER, OWNERCO LLC, OPERATING TENANT, THE TARGET PARTIES, THE SELLER PARTIES OR THEIR
RESPECTIVE AGENTS, BROKERS, ADVISORS, CONSULTANTS, COUNSEL, EMPLOYEES, OFFICERS, DIRECTORS,
SHAREHOLDERS, OR AFFILIATES (PAST OR PRESENT). SUBJECT TO THE EXPRESS REPRESENTATIONS,
WARRANTIES AND COVENANTS OF THE SELLER PARTIES CONTAINED HEREIN, THE PURCHASER PARTIES AGREE
TO ACCEPT THE TARGET INTERESTS AND THE PROPERTY “AS IS”, “WHERE IS” AND “WITH ALL FAULTS” IN
ITS PRESENT CONDITION (INCLUDING ANY LATENT OR PATENT DEFECTS), SUBJECT TO ORDINARY USE,
WEAR, TEAR AND NATURAL DETERIORATION OF THE PROPERTY BETWEEN THE EFFECTIVE DATE AND THE
CLOSING DATE. WITHOUT LIMITING THE FOREGOING, (I) THE PURCHASER PARTIES HEREBY WAIVE, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL IMPLIED WARRANTIES, AND (II) THE PURCHASER
PARTIES ACKNOWLEDGE THAT, EXCEPT AS EXPRESSLY SET FORTH HEREIN, THE SELLER PARTIES EXPRESSLY
DISCLAIM AND NEGATE, AS TO PERSONAL PROPERTY, FIXTURES, AND ALL OF THE OTHER PROPERTY: (A)
ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY; (B) ANY IMPLIED OR EXPRESS WARRANTY OF
FITNESS FOR A PARTICULAR PURPOSE; (C) ANY IMPLIED OR EXPRESS WARRANTY OF CONFORMITY TO
MODELS OR SAMPLES OF MATERIALS; AND (D) ANY IMPLIED OR EXPRESS WARRANTY WITH RESPECT TO THE
CONDITION OF THE PROPERTY OR ANY PART THEREOF, ITS COMPLIANCE WITH ANY LEGAL REQUIREMENTS,
THE PAST OR PROJECTED FINANCIAL CONDITION, PERFORMANCE, AND OPERATING RESULTS OF THE HOTELS
(INCLUDING INCOME OR EXPENSES THEREOF OR OCCUPANCY RATES THEREFOR) OR THE USES PERMITTED ON,
THE DEVELOPMENT REQUIREMENTS FOR, OR ANY OTHER MATTER OR THING RELATING TO THE PROPERTY OR
ANY PORTION THEREOF.

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     (c) The Purchaser Parties acknowledge that they have, through its agents, employees,
accountants, attorneys, consultants, and other representatives, been given the opportunity
to review all of the documents that constitute Seller Parties Due Diligence Materials and
that the Purchaser Parties expressly ratify each and every document to the full extent.

     (d) Except as expressly set forth herein and except with respect to any representation,
warranty or obligation or indemnification in this Agreement or in any of Seller Parties’
Closing Documents that survives Closing, each Purchaser Party and any Person claiming by,
through or under the Purchase Parties hereby waives its right to recover from and fully and
irrevocably releases the Seller Parties and their respective Affiliates, their respective
members, officers, directors and shareholders (past and present) (“Released Parties”) from
any and all claims that it may now have or hereafter acquire against any of the Released
Parties for any Losses arising from or related to any matters affecting the Target Interests
and the Property, or any portion thereof, including without limitation, (i) the physical
condition of the Property and/or (ii) the compliance or lack of compliance of the Property
with any Applicable Laws. This release includes claims of which the Purchaser Parties are
presently unaware or which the Purchaser Parties do not presently suspect to exist which, if
known by the Purchaser Parties, would materially affect the Purchaser Parties’ release to
the Released Parties. Without limiting the generality of the foregoing, but subject to the
exception set forth in the first sentence of this Section 10(d), the Purchaser
Parties expressly waive any and all rights conferred upon them by any Applicable Law which
provides that a release does not extend to claims which the claimant does not know or
suspect to exist in his favor at the time of executing the release, which if known by him
must have materially affected his settlement with the released Party, including, without
limitation, any provisions similar to the following: “A general release does not extend to
claims which the creditor does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have materially affected his settlement
with the debtor.” In this connection and to the extent permitted by Applicable Law, the
Purchaser Parties hereby agree, represent and warrant, which representation and warranty
shall survive Closing, that the Purchaser Parties realize and acknowledge that factual
matters now unknown to them may have given or may hereafter give rise to causes of action,
claims, demands, debts, controversies, damages, costs, losses and expenses which are
presently unknown, unanticipated and unsuspected, and the Purchaser Parties further agree,
represent and warrant, which representation and warranty shall survive Closing, that the
waivers and releases herein have been negotiated and agreed upon in light of that
realization and that the Purchaser Parties nevertheless hereby intend to release, discharge
and acquit the Seller Parties from any such unknown causes of action, claims, demands,
debts, controversies, damages, costs, losses and expenses which might in any way be included
as a material portion of the consideration given to the Seller Parties by the Purchaser
Parties in exchange for the Seller Parties’ performance hereunder.

     (e) The Purchaser Parties acknowledge that, to the extent required to be operative, the
disclaimers of warranties contained in this Section 10 are “conspicuous” disclaimers
for purposes of any Applicable Law.

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     (f) The terms of this Section 10shall survive Closing.

     11. SURVIVAL

     (a) Merger. Except as expressly set forth in Section 11(b), all
representations, warranties, covenants, liabilities and obligations shall be deemed if this
Agreement is terminated, not to survive such termination, unless such termination is the
result of claims made thereon.

     (b) Survival of Certain Representations and Warranties. If this Agreement is
terminated, the representations and warranties in Section 9(a)(xxxii) and
Section 9(d)(vi) shall survive such termination until the expiration of the
applicable statute of limitations. If the Closing occurs, (i) the representations and
warranties of the Seller Parties in Sections 9(a)(i)-9(a)(vii), inclusive, and
Sections 9(a)(xxxii) — 9(a)(xxxiii), inclusive, and the representations and
warranties of the Seller Parties in Section 9(d) shall survive the Closing until the
expiration of the applicable statute of limitations, and (ii) all other representations and
warranties of the Seller Parties in Section 9(a) shall survive the Closing for a
period commencing on the Closing Date and expiring at 5:00 p.m. (Eastern Time) on the date
which is one (1) year after the Closing Date.

     (c) Survival of Covenants and Obligations. If this Agreement is terminated,
only those covenants and obligations to be performed by the Parties under this Agreement
which expressly survive the termination of this Agreement shall survive such termination.
If the Closing occurs, only those covenants and obligations to be performed by the Parties
under this Agreement which expressly survive the Closing shall survive the Closing.

     12. CONDUCT OF BUSINESS AND OTHER COVENANTS.

     (a) Hotel Operation. Except with prior written consent of the Purchaser
Parties which shall not be unreasonably withheld, conditioned or delayed and except as may
be expressly permitted by this Agreement, prior to the Closing, the Seller Parties shall
cause OwnerCo LLC and/or Operating Tenant to (i) use commercially reasonable efforts to
cause Manager to operate the Hotel in the Ordinary Course of Business (including, but not
limited to, with respect to the depletion, supply and re-supply of the F&B, Retail
Merchandise, FF&E, and Supplies) and otherwise in accordance in all material respects with
the Management Agreement, (ii) perform its obligations under the Management Agreement in all
material respects, and (iii) not give any approvals requested by Manager under the
Management Agreement, without the prior written consent of the Purchaser Parties, which
consent shall not be unreasonably withheld, conditioned or delayed and shall be deemed given
if not denied if the Seller Parties, OwnerCo LLC and/or Operating Tenant make a written
request therefor from the Purchaser Parties within one (1) Business Day after Manager’s
request and the Purchaser Parties fail to respond to such request in writing within the
earlier to occur of five (5) Business Days after written request therefor or the time within
which any response would be required under the Management Agreement.

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     (b) Notices of Parties to certain Contracts. The Seller Parties shall cause
OwnerCo LLC and/or Operating Tenant to use commercially reasonable efforts to obtain
consents to the non-Affiliated parties to all Material Contracts and all other Contracts of
which the Seller Parties have knowledge, in each event to the extent consent is necessary to
effectuate a transfer (by change of control as contemplated hereby) provided that neither
OwnerCo LLC nor Operating Tenant shall be required to exercise any of its remedies under
such contracts to obtain such consents and provided further that the Closing shall not be
conditioned on OwnerCo LLC or Operating Tenant obtaining any such consents;
provided, however, if any Contract requires the consent of the other party
for any change in control of OwnerCo LLC or Operating Tenant and OwnerCo LLC or Operating
Tenant (as applicable) does not obtain such consent prior to the Closing, then upon the
Purchaser Parties’ election, the Seller Parties shall use commercially reasonable efforts to
cause such Contract to be terminated at Closing.

     (c) Pre-Closing Access. Subject to the rights of Manager and any tenants or
occupants, the Seller Parties shall cause OwnerCo LLC and Operating Tenant to grant to the
Purchaser Parties the right and license to enter upon the Hotel property upon reasonable
notice prior to Closing for the purpose of facilitating the consummation of the transactions
contemplated hereby; provided, however, that (i) the Purchaser Parties shall
provide the Seller Parties, OwnerCo LLC and Operating Tenant with reasonable advance notice
(via e-mail or telephone, anything herein contained to the contrary notwithstanding) of any
such access, (ii) such access shall be subject to the escort of a representative of the
Seller Parties, OwnerCo LLC, Operating Tenant, Manager, or Broker; and (iii) such access
shall not unreasonably interfere with the operation of the Hotel. Prior to entering the
Property to perform any physical non-invasive tests or studies (except as may have been
approved by the Seller Parties in the Seller Parties’ sole discretion), the Purchaser
Parties shall procure and maintain commercial general liability insurance covering the
Seller Parties and their applicable Affiliates in form and in such amounts as shall be
acceptable to the Seller Parties.

     (d) Tax Contests.

     (i) Pending Proceedings and Proceedings for Taxable Period Terminating
Prior to Closing Date. The Seller Parties shall retain the right (i) to
continue and settle any pending proceeding, and (ii) to commence, continue and
settle any new proceeding to contest any Taxes for any taxable period which
terminates prior to the Closing Date, and shall be entitled to any refunds or
abatements of Taxes awarded in such proceedings. This Section 12(d)(i)
shall survive the Closing.

     (ii) Taxable Period Including the Closing Date. The Seller Parties
shall not commence any new proceeding to contest any Taxes for any taxable period
which includes the Closing Date. Notwithstanding the foregoing, if (i) the Closing
shall be extended beyond the deadline for the appeal of any real estate taxes, and
(ii) the Purchaser Parties make a written request to the Seller Parties not less
than five (5) Business Days prior to such deadline, then the Seller Parties shall
commence and thereafter diligently prosecute a proceeding to contest such

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real
estate taxes until Closing. Except in the case that this Agreement is terminated by
reason of a Seller Parties Default, the Purchaser Parties shall reimburse the Seller
Parties for all costs and expenses incurred by the Seller Parties in commencing and
prosecuting any such contest (subject to the next succeeding sentence). Any refunds
or abatements awarded in such proceedings shall be used first to reimburse the Party
contesting such taxes for the reasonable costs and expenses incurred by such Party
in contesting such taxes, and the remainder of such refunds or abatements shall be
prorated between the Parties as of the Adjustment Time, and the Party receiving such
refunds or abatements promptly shall pay such prorated amount due to the other
Party. This Section 12(d)(ii) shall survive the Closing.

     (iii) Taxable Period Commencing After Closing Date. The Purchaser
Parties shall have the right to commence, continue and settle any proceedings to
contest Taxes for any taxable period which commences on or after the Closing Date,
and shall be entitled to any refunds or abatements of Taxes awarded in such
proceedings. This Section 12(d)(iii) shall survive the Closing.

     (iv) Cooperation. The Parties shall use commercially reasonable
efforts to cooperate with the Party contesting the Taxes (at no cost or expense to
the Party not contesting the Taxes other than any de minimis cost or expense or any
cost or expense which the requesting Party agrees in writing to reimburse) and to
execute and deliver any documents and instruments reasonably requested by the Party
contesting the Taxes in furtherance of the contest of such Taxes. This Section
12(d)(iv) shall survive the Closing.

     (e) Tax Returns. The Parties acknowledge that Mezz OwnerCo LLC will no longer
be a disregarded entity as of the date of the transfer described in Section 12(k)
and expect that Mezz OwnerCo LLC will be required to file a final Philadelphia Business
Privilege Tax return as of the Closing Date. If for any reason Mezz OwnerCo LLC is required
to file a Philadelphia Business Privilege Tax return that includes the Closing Date or any
post-Closing period, then the Parties shall cooperate in the preparation and filing of such
tax return. Spartans Owner shall prepare or cause to be prepared the return and submit it
to Platinum OwnerCo at least forty-five (45) days prior to the due date thereof, including
extensions. Platinum OwnerCo shall have fifteen (15) days to approve such return’s form and
content, which approval shall not be unreasonably withheld, conditioned or delayed. In the
event of a disagreement between the Parties as to the form and/or content of such return,
the matters in dispute shall be submitted to a mutually acceptable law or accounting firm
with expertise in the Philadelphia Business Privilege Tax whose determination will be
binding upon the Parties. Other than the Philadelphia Business Privilege Tax return which
shall be filed in accordance with this Section 12(e), the Seller Parties shall
prepare and file any returns for Taxes for any taxable period prior to the Closing Date that
are due after the Closing Date. This Section 12(e) shall survive the Closing.

     (f) Notices and Filings. The Parties shall use commercially reasonable efforts
to cooperate with each other (at no cost or expense to the Party whose cooperation

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is requested, other than any de minimis cost or expense or any cost or expense which the
requesting Party agrees in writing to reimburse) to provide written notice to any Person
under any Tenant Leases, Material Contracts, and Licenses and Permits, and to effect any
registrations or filings with any Governmental Authority or other Person, regarding the
change in ownership of Target Interests and the Property. This Section 12(f) shall
survive the Closing.

     (g) Audited Financial Statements. Within ten (10) days after the Effective
Date, the Seller Parties shall provide to the Purchaser Parties the Audited Financial
Statements. In addition, throughout the period expiring on the date three (3) years from
and after Closing, the Seller Parties shall make all of the books and records of the Target
Parties, OwnerCo LLC, Operating Tenant and the Hotel for the years ended December 31, 2007,
2008 and 2009 and interim periods as required by the rules and regulations of the SEC
available to the Purchaser Parties and the Purchaser Parties’ independent accountants for
inspection, copying and audit at the expense of the Purchaser Parties. The Seller Parties
shall provide the Purchaser Parties and/or their independent accountant with copies of, or
access to, such factual information, accounting records and financial information as may be
reasonably requested by the Purchaser Parties or their auditors, and in the possession or
control of the Seller Parties, to enable the Purchaser Parties or their affiliates to file
reports or registration statements in compliance with the rules and regulations of the SEC.
The Seller Parties shall also, upon request, supply to the Purchaser Parties letters of
representation to such accountants, in form and substance reasonably satisfactory to the
Purchaser Parties. This Section 12(g) shall survive the Closing

     (h) Access to Information. After Closing, the Purchaser Parties shall provide
to the officers, employees, agents and representatives of any Seller Parties Indemnitees
reasonable access to (i) the Books and Records with respect to the Target Parties, OwnerCo
LLC, Operating Tenant and the Hotel for the period prior to the Closing Date, (ii) the
Property, and (iii) the Manager solely to prepare any documents required to be filed by
OwnerCo LLC or Operating Tenant under Applicable Law or to investigate, evaluate and defend
any claim, charge, audit, litigation or other proceeding made by any Person or insurance
company involving any Seller Parties Indemnitee or any Affiliate respectively thereof;
provided, however, that (A) such Seller Parties Indemnitees shall provide
reasonable prior notice to the Purchaser Parties; (B) the Purchaser Parties shall not be
required to provide such access during non-business hours; (C) the Purchaser Parties shall
have the right to accompany the officer, employees, agents or representatives of such Seller
Parties Indemnitees in providing access to the Books and Records, the Property or Manager as
provided in this Section 12(h); and (D) the Seller Parties shall defend, indemnify
and hold harmless the Purchaser Parties Indemnitees in accordance with Section 14(c)
from and against any Indemnification Loss incurred by any Purchaser Parties Indemnitees
arising from any examinations, tests, investigations or studies of the Property conducted by
the Seller Parties Indemnitees, its employees, agents or representatives pursuant to this
Section 12(h). The Purchaser Parties, at their cost and expense, shall retain all
Books and Records with respect to the Hotel for a period of seven (7) years after the
Closing. This Section 12(h) shall survive the Closing.

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     (i) Guest Property. The Parties shall arrange for guests at the Hotel to sign
new deposit box or other appropriate receipts on the day before the Closing Date with
respect to baggage, personal property, laundry, valet packages and other property of guests
at the Hotel checked or left in the care of OwnerCo LLC, Operating Tenant or the Manager by
transient hotel guests; and, to the extent such receipts are not obtained, such property
shall be sealed, listed in an inventory prepared and signed jointly by the parties as of the
Closing Date, and the Purchaser Parties shall be responsible from and after the Closing Date
for all such property listed in said inventory. The Seller Parties shall be responsible for
all items allegedly left at the Hotel by guests prior to Closing and not listed on said
inventory.

     (j) No Transfer of Interests. From and after the Effective Date and until
Closing or any earlier termination of this Agreement, provided that no Purchaser Parties
Default shall be continuing, the Seller Parties shall not, except as permitted under
Section 2(e) in connection with the Roll-Over Option and under Section
12(k) in connection with a transfer of Target Interests to MezzCo, transfer, sell,
pledge or assign any Target Interests held by the Seller Parties and shall cause the Target
Parties to not transfer, sell, pledge or assign any membership interests in OwnerCo LLC or
LeaseCo LLC held by the Target Parties; provided, however, that any Seller
Party shall be permitted to transfer, sell or assign all or any portion of the Target
Interests held by it to any other Seller Party or any wholly-owned subsidiary of a Seller
Party, provided that no such transfer, sale or assignment shall relieve the transferring,
selling or assigning Seller Party from its obligations hereunder. In the event any such
transfers described in this Section 12(j) are completed, the Seller Parties shall be
permitted to update the representations and warranties herein set forth as appropriate to
give effect to such transfer.

     (k) Transfer to MezzCo. Prior to the Effective Date, Platinum OwnerCo agreed
to transfer a 0.01% interest in Mezz OwnerCo LLC to MezzCo prior to the Closing Date.
Platinum OwnerCo agrees that if for any reason the transfer is not completed, Platinum
OwnerCo shall assume MezzCo’s obligation to sell such interests hereunder. In the event
such transfer described in this Section 12(k) is completed, the Seller Parties shall
be permitted to update the representations and warranties herein set forth as appropriate to
give effect to such transfer. In addition, in the event such transfer described in this
Section 12(k) is not completed, the Seller Parties shall be permitted to update the
representations and warranties herein set forth as appropriate to give effect to the
termination of the agreement to transfer.

     (l) Post-Closing Net Worth Requirement. For the period of fifteen (15) months
after the Closing Date (the “Post-Closing Net Worth Period”), the Seller Parties shall
maintain, in the aggregate among all Seller Parties, a net worth of not less than Six
Million and 00/100 Dollars ($6,000,000.00) (the “Net Worth Amount”); provided,
however, that the Seller Parties shall be permitted to satisfy all or any portion of
such Net Worth Amount, from time to time, by delivering to the Purchaser Parties any
combination of a letter of credit from any financial institution securing the Seller
Parties’ post-Closing obligations hereunder during all or the applicable portion of the
Post-Closing Net Worth Period and/or a guaranty from any other Person guaranteeing the

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Seller Parties’ post-Closing obligations hereunder during all or the applicable portion of
the Post-Closing Net Worth Period, whereupon and during which the face amount of such letter
of credit and/or the net worth of the guarantor shall be counted dollar for dollar towards
the Net Worth Amount independent of any negative net worth of the Seller Parties for
purposes of determining the collective Net Worth Amount hereunder. For example, if the
Seller Parties have a negative net worth of One Million and 00/100 Dollars
(($1,000,000.00)), then the Net Worth Amount may be satisfied by the Seller Parties
delivering to the Purchaser Parties a letter of credit in the face amount of Three Million
and 00/100 Dollars ($3,000,000.00) and a guaranty from a guarantor with a net worth of Three
Million and 00/100 Dollars ($3,000,000.00).

     (m) Further Assurances. From the Effective Date until the Closing or earlier
termination of this Agreement, the Parties shall use commercially reasonable efforts to
take, or cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable to consummate the transaction described in this Agreement,
including, without limitation, (i) obtaining all necessary consents, approvals and
authorizations required to be obtained from any Governmental Authority or other Person under
this Agreement or Applicable Law, and (ii) effecting all registrations and filings required
under this Agreement or Applicable Law. After the Closing, the Parties shall use
commercially reasonable efforts (at no cost or expense to such Party, other than any de
minimis cost or expense or any cost or expense which the requesting Party agrees in writing
to reimburse) to further effect the transaction contemplated in this Agreement so long as
the same do not increase the burdens upon or decrease the benefits to the parties under this
Agreement. The immediately preceding sentence of this Section 12(m) shall survive
the Closing.

     13. LOSS BY FIRE, OTHER CASUALTY OR CONDEMNATION.

     (a) Material Damage or Condemnation. If prior to the Closing, the Hotel is
permanently taken or materially damaged by casualty or condemnation (as material is defined
in Section 13(b) below) the Seller Parties shall promptly give the Purchaser Parties
written notice thereof. The Purchaser Parties shall then have the right, provided any such
material casualty was not caused by the Purchaser Parties or Purchaser Parties’ Inspectors,
or their respective employees or agents, exercisable by giving written notice to the Seller
Parties within ten (10) Business Days after receiving written notice from the Seller Parties
of such casualty or condemnation either to: (i) terminate this Agreement, in which case the
Deposit shall be refunded to the Purchaser Parties in accordance with Section
2(d)(ii), and the Parties shall have no further rights or obligations under this
Agreement, except those which expressly survive such termination, or (ii) accept the
Property in its then condition and proceed with Closing without an abatement of the Purchase
Price (but with OwnerCo LLC and/or Operating Tenant (as applicable) retaining their
respective interests in and to any insurance proceeds which may be payable to OwnerCo LLC
and/or Operating Tenant on account of any such casualty or condemnation as well as any
proceeds theretofore paid and the Purchaser Parties receiving a credit for any deductible
under the applicable insurance policy). If the Purchaser Parties elect to accept the
Property in its then condition under clause (ii) of the preceding sentence, then the terms
and conditions and the rights and obligations of the

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Seller Parties and the Purchaser
Parties with respect to the repair of the Property shall be governed by the terms of the
Management Agreement. If the Purchaser Parties shall fail to deliver the written notice set
forth above, then (y) the Purchaser Parties shall have no right to terminate this Agreement,
and (z) the Parties shall proceed to the applicable Closing with the Purchaser Parties
accepting the Hotel in its then condition without abatement of the Purchase Price.

     (b) Non-Material Damage or Condemnation. If prior to a Closing, there is any
non-material damage as a result of casualty or condemnation to the Hotel, the Parties shall
proceed to such Closing accepting the Hotel in its then condition and proceed with the
Closing in which case the Seller Parties shall give the Purchaser Parties a credit at
Closing for the cost to repair the Hotel and the Seller Parties shall retain the right to
any insurance proceeds which may be payable on account of any such casualty or condemnation
(and OwnerCo LLC and Operating Tenant shall assign their rights therein to the Seller
Parties). For purposes of this Agreement, damage to the Hotel or a taking of a portion
thereof shall be deemed to involve a material portion thereof if either (i) the estimated
cost of restoration or repair of such damage or the amount of the condemnation award with
respect of such taking exceeds One Million and 00/100 Dollars ($1,000,000.00) or (ii) any
portion of the common areas of the Hotel cannot be used, which has a material impact on the
operation of the Hotel.

     14. INDEMNIFICATION.

     (a) Indemnification by Seller Parties. Subject to the limitations expressly
set forth in this Agreement, the Seller Parties hereby agree to indemnify, defend and hold
harmless the Purchaser Parties Indemnitees from, against and in respect of any and all
actual loss, liability, damage or expense (including reasonable attorneys’ fees and
expenses) (“Losses”) suffered or incurred arising from, by reason of or in connection with
(i) the breach of any express representations or warranties of the Seller Parties in this
Agreement which expressly survives the Closing or termination of this Agreement (as the case
may be), (ii) the breach by the Seller Parties of any of their covenants or obligations
under this Agreement which expressly survives the Closing or termination of this Agreement
(as the case may be), and (iii) any Seller Parties Liabilities.

     (b) Indemnification by Purchaser Parties. Subject to the limitations expressly
set forth in this Agreement, the Purchaser Parties hereby agree to indemnify, defend and
hold harmless the Seller Parties Indemnitees from, against and in respect of any and all
Losses suffered or incurred arising from, by reason of or in connection with (i) any breach
of any express representations or warranties of the Purchaser Parties in this Agreement
which expressly survives the Closing or termination of this Agreement (as the case may be),
(ii) any breach by the Purchaser Parties of any of their covenants or obligations under this
Agreement which expressly survives the Closing or termination of this Agreement (as the case
may be), and (iii) any Purchaser Parties Liabilities.

     (c) Indemnification Procedure. If any claim shall be asserted, or any action,
suit or other proceeding shall be instituted, by a third party against (i) any Seller
Parties Indemnitee, or (ii) any Purchaser Parties Indemnitee (each of any Seller Parties
Indemnitee and Purchaser Parties Indemnitee being an “Indemnified Party”), with

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respect to
any occurrence as to which either the Seller Parties or the Purchaser Parties (each an
“Indemnifying Party”) shall have any indemnity obligation, respectively, such Indemnified
Party shall promptly notify such Indemnifying Party of the assertion of such claim, or the
institution of such action, suit or proceeding, and tender the defense and settlement or
compromise of any such claim, action, suit or proceeding to such Indemnifying Party for
conduct thereof by such Indemnifying Party (provided that such Indemnifying Party shall
timely commence and diligently continue such defense, settlement or compromise) at such
Indemnifying Party’s sole expense. Indemnifying Party shall have the right to select
counsel, subject to Indemnified Party’s prior written approval, which approval shall not be
unreasonably withheld or delayed. Should any such claim, action, suit or proceeding result
in a final and unappealable judgment, Indemnifying Party shall promptly pay the same.
Indemnified Party agrees to cooperate with Indemnifying Party to the extent Indemnifying
Party may reasonably request such cooperation. Indemnified Party shall have the right (but
shall not have the obligation), at any time and at its own cost and expense, to participate
in the defense of any such claim, action, suit or proceeding, to be represented by counsel
of its choice and to assert in any such action, suit or proceeding any counterclaims or
cross claims Indemnified Party may have. In the event Indemnifying Party fails to timely
commence the defense, settlement or compromise of any such claim, action, suit or proceeding
or thereafter to diligently prosecute the defense, settlement or compromise thereof,
Indemnified Party shall have the right (but shall not have the obligation) to defend,
settle, compromise or take such other action as Indemnified Party shall deem necessary in
connection with any such claim, action, suit or proceeding and to be indemnified for the
entire cost thereof from Indemnifying Party, including without limitation, attorneys’ and
experts’ fees and expenses (including those incurred in connection with appellate
proceedings). Indemnifying Party shall have the right to settle or compromise any such
claim, action, suit or proceeding without the prior written consent of Indemnified Party
provided that, at the time of such settlement or compromise, Indemnifying Party shall
satisfy and discharge any and all liability of Indemnified Party resulting therefrom or
shall post security satisfactory to the Indemnified Party to assure the ultimate
satisfaction and discharge of such liability and such settlement shall not include any
restrictions on operations of the Indemnified Party or Property. Except as provided in the
preceding sentence, Indemnifying Party shall not settle or compromise any such claim,
action, suit or proceeding without the prior written consent of the Indemnified Party. The
failure or delay of Indemnified Party to notify Indemnifying Party of the institution of any
claim, action, suit or other proceeding shall not negate or otherwise affect the
indemnification obligation of Indemnifying Party except to the extent that Indemnifying
Party shall be prejudiced by the failure or delay of Indemnified Party to give Indemnifying
Party notice of such action, suit or proceeding. Indemnified Party may not settle any claim
covered by this indemnity without Indemnifying Party’s consent, not to be unreasonably
withheld.

     (d) Time Bar on Indemnity Claims. Notwithstanding anything herein to the
contrary, any claim by any Purchaser Parties Indemnitee made subsequent to the Closing, to
the extent permitted hereunder, shall be effective and valid only if made in writing against
the Seller Parties within: (i) with respect to the representations and warranties of the
Seller Parties in Sections 9(a)(i)-9(a)(vii), inclusive, and

54

 

 Sections
9(a)(xxxii) — 9(a)(xxxiii), inclusive, the expiration of the applicable statute
of limitations, and (ii) with respect to all other representations and warranties of the
Seller Parties in Section 9(a), one (1) year after the Closing Date.

     (e) Indemnity Limitations. Notwithstanding anything herein to the contrary,
the Seller Parties’ liability for all Capped Claims (as hereinafter defined) shall not
exceed an amount equal to Three Million and 00/100 Dollars ($3,000,000.00) in the aggregate
(the “Indemnity Cap”). In addition, notwithstanding anything herein to the contrary, no
Purchaser Parties Indemnitee shall make any Capped Claim and shall not be entitled to any
damages or remedies against the Seller Parties unless and until the aggregate Losses with
respect to all Capped Claims, as determined by a final, unappealable decision of a competent
court that are the basis for any Capped Claims exceed an amount equal to One Hundred
Thousand and 00/100 Dollars ($100,000.00) (the “Indemnity Threshold”), in the aggregate. In
the event the Purchaser Parties Indemnitees’ Losses with respect to any Capped Claims are
determined to exceed the Indemnity Threshold, the Purchaser Parties Indemnitees shall be
entitled to make a claim with respect thereto for the full amount of its Losses (but subject
to the Indemnity Cap). The Purchaser Parties Indemnitees’ remedies pursuant to this
Section 14 shall be the sole remedy of the Purchaser Parties Indemnitees with
respect to Capped Claims. The term “Capped Claim” shall mean any claim by any Purchaser
Parties Indemnitee, to the extent permitted hereunder, for any breach by the Seller Parties
with respect to the representations and warranties set forth in
Sections 9(a)(viii) —
Section 9(a)(xxxi), inclusive.

     (f) WAIVER OF CERTAIN DAMAGES. NOTWITHSTANDING ANYTHING HEREIN TO THE
CONTRARY, THE PARTIES HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVE AND RELEASE ANY RIGHT,
POWER OR PRIVILEGE EITHER MAY HAVE TO CLAIM OR RECEIVE FROM THE OTHER PARTY ANY PUNITIVE,
EXEMPLARY, STATUTORY OR TREBLE DAMAGES OR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES WITH
RESPECT TO ANY BREACH OF ITS OBLIGATIONS UNDER THIS AGREEMENT, ACKNOWLEDGING AND AGREEING
THAT THE REMEDIES HEREIN PROVIDED, WILL IN ALL CIRCUMSTANCES BE ADEQUATE. THE FOREGOING
WAIVER AND RELEASE SHALL APPLY IN ALL ACTIONS OR PROCEEDINGS BETWEEN THE PARTIES.

     (g) This Section 14 shall survive Closing.

     15. DEFAULT.

     (a) Seller Parties Default.

     (i) If the Seller Parties default in their obligations to consummate the
Closing in accordance with the terms of this Agreement, in the performance of any
other material obligation of the Seller Parties hereunder (of which default the
Purchaser Parties shall notify the Seller Parties and the Seller Parties shall have
the right to cure such default pursuant to Section 15(b)) (a “Seller Parties
Default”), and no Purchaser Parties Default has occurred which remains uncured

55

 

then
the Purchaser Parties as their sole and exclusive remedy shall have the right to
elect one (1) (but not more than one) of the following remedies:

     (1) Accept such title to Target Interests at Closing as the Seller
Parties are able to cause to be conveyed without abatement of the Purchase
Price;

     (2) Terminate this Agreement by written notice to the Seller Parties,
whereupon the giving of such notice by the Purchaser Parties this Agreement
will terminate and be null and void and of no further force and effect,
except that the Purchaser Parties shall be entitled to the Deposit and the
Parties hereto will have no further liability or obligation hereunder,
except for such liabilities or obligations which are expressly stated herein
to survive the termination of this Agreement; or

     (3) Compel specific performance hereunder by the Seller Parties of the
Seller Parties’ material obligations hereunder, provided that, to the extent
that specific performance shall be unavailable to the Purchaser Parties on
account of the nature of the default hereunder by the Seller Parties, the
Purchaser Parties shall have the right to damages in reimbursement of all
third-party, out-of-pocket costs and expenses incurred by the Purchaser
Parties in connection with the transaction contemplated hereby, but not
exceeding $250,000.00 in any event.

     (b) Seller Parties’ Right to Cure. Notwithstanding anything to the contrary in
this Agreement, the Purchaser Parties shall not have the right to exercise their remedies
under Section 15(a) for a Seller Parties Default or Section 6(b)(xi) for a
failure of a Purchaser Parties Closing Condition (“Purchaser Parties Closing Condition
Failure”), unless the Purchaser Parties have provided written notice to the Seller Parties
specifying in reasonable detail the nature of the Seller Parties Default or Purchaser
Parties Closing Condition Failure (as the case may be), and the Seller Parties have not
cured such Seller Parties Default or Purchaser Parties Closing Condition Failure (as the
case may be) within thirty (30) days after the Seller Parties’ receipt of such notice (the
“Seller Parties Cure Period”), in which case the Closing shall be postponed until the date
which is five (5) Business Days after the expiration of the Seller Parties Cure Period.

     (c) Limited Recourse. The Purchaser Parties agree that they shall not look to
the Seller Parties’ or any their Affiliate’s directors, officers, employees, shareholders,
members, partners or agents, to enforce the Purchaser Parties’ rights hereunder, and that
none of the directors, officers, employees, shareholders, members, partners, or agents of
the Seller Parties or any their Affiliates (past or present) shall have any personal
obligation or liability hereunder, and that the Purchaser Parties shall not seek to assert
any claim or enforce any of the Purchaser Parties’ rights hereunder against any directors,
officers, employees, shareholders, members, partners, or agents of the Seller Parties or any
of their Affiliates or against any other person, partnership, limited liability company,
corporation or trust, as principal of the Seller Parties or any of their Affiliates, whether
disclosed or undisclosed.

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     (d) Survival. The terms of this Section 15 shall survive each Closing
or earlier termination of this Agreement.

     16. PURCHASER PARTIES’ DEFAULT; LIQUIDATED DAMAGES.

     (a) Purchaser Parties Default. If at any time prior to Closing, the Purchaser
Parties fail to perform any of their covenants or obligations under this Agreement in any
material respect which breach or default is not caused by a Seller Parties Default (a
“Purchaser Parties Default”), then the Seller Parties, as their sole and exclusive remedy,
may elect to (A) terminate this Agreement by providing written notice to the Purchaser
Parties, in which case the Deposit shall be disbursed to the Seller Parties in accordance
with Section 2(d)(ii), and the Parties shall have no further rights or obligations
under this Agreement, except those which expressly survive such termination, or (B) proceed
to Closing pursuant to this Agreement, in which case the Seller Parties shall be deemed to
have waived such Purchaser Parties Default.

     (b) Purchaser Parties’ Right to Cure Non-Monetary Defaults. Notwithstanding
anything to the contrary in this Agreement, the Seller Parties shall not have the right to
exercise their remedies under Section 16(a) for a non-monetary Purchaser Parties
Default or Section 6(a)(ix) for a failure of any non-monetary Seller Parties Closing
Condition, unless the Seller Parties have provided written notice to the Purchaser Parties
specifying in reasonable detail the nature of the non-monetary Purchaser Parties Default or
non-monetary Seller Parties Closing Condition failure (as the case may be), and the
Purchaser Parties have not cured such non-monetary Purchaser Parties Default or non-monetary
Seller Parties Closing Condition failure (as the case may be) within thirty (30) days after
the Purchaser Parties’ receipt of such notice (the “Purchaser Parties Non-Monetary Cure
Period”), in which case the Closing shall be postponed until the date which is five (5)
Business Days after the expiration of the Purchaser Parties Non-Monetary Cure Period or, if
such date is not the first Business Day of a month, then the Seller Parties shall have the
right to further extend the Closing to the next day that is a first Business Day of a
calendar month.

     (c) Purchaser Parties’ Right to Cure Monetary. Notwithstanding anything to the
contrary in this Agreement, the Seller Parties shall not have the right to exercise their
remedies under Section 16(a) for a monetary Purchaser Parties Default or Section
6(a)(ix) for a failure of any monetary Seller Parties Closing Condition, unless both (i)
the Seller Parties have provided written notice to the Purchaser Parties specifying in
reasonable detail the nature of the monetary Purchaser Parties Default or monetary Seller
Parties Closing Condition failure (as the case may be), the Purchaser Parties have not cured
such monetary Purchaser Parties Default or monetary Seller Parties Closing Condition failure
(as the case may be) within three (3) Business Days after the Purchaser Parties’ receipt of
such notice (the “Purchaser Parties Monetary Cure Period”), and (ii) the Purchaser Parties
have not reimbursed the Seller Parties within the Purchaser Parties Monetary Cure Period for
all expenses, including, but not limited to, interest expense related to the Mortgage Loan,
incurred by the Seller Parties, the Target Parties, OwnerCo LLC or Operating Tenant due to
such monetary Purchaser Parties Default or monetary Seller Parties Closing Condition
failure, in which case the Closing shall be

57

 

postponed until the date which is one (1)
Business Day after the expiration of the Purchaser Parties Monetary Cure Period or, if such
date is not the first Business Day of a month, then the Seller Parties shall have the right
to further extend the Closing to the next day that is a first Business Day of a calendar
month.

     (d) Liquidated Damages. THE PARTIES HERETO EXPRESSLY AGREE AND ACKNOWLEDGE
THAT IN THE EVENT OF A DEFAULT BY THE PURCHASER PARTIES IN THEIR OBLIGATIONS HEREUNDER ON OR
BEFORE THE A CLOSING DATE IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT, THE SELLER
PARTIES’ ACTUAL DAMAGES WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO ASCERTAIN, THAT THE
DEPOSIT REPRESENTS THE PARTIES’ REASONABLE ESTIMATE OF SUCH DAMAGES, AND THAT SUCH AMOUNT IS
NOT UNREASONABLE UNDER THE CIRCUMSTANCES EXISTING AT THE TIME THIS AGREEMENT WAS MADE.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING: (i) THE SELLER PARTIES OR THEIR
AFFILIATES WILL INCUR ADMINISTRATIVE COSTS IN THE NEGOTIATION AND REVIEW OF THIS AGREEMENT
AND OTHER DOCUMENTS RELATING TO THE TRANSACTIONS, AND WILL INCUR DAMAGES BY WITHDRAWING THE
HOTELS FROM THE OPEN MARKET; (ii) THERE ARE IMPORTANT ECONOMIC AND TAX REASONS FOR THE
SELLER PARTIES’ DESIRE TO SELL THE TARGET INTERESTS, BY THE DATE SPECIFIED FOR CLOSING IN
SECTION 2(c)(iii) HEREOF, AND IT WAS THE PURCHASER PARTIES’ WILLINGNESS TO MEET THIS
DEADLINE WHICH, IN PART, CAUSED THE SELLER PARTIES TO SELECT THE SELLER PARTIES OVER OTHER
POTENTIAL PURCHASERS, AND IT IS UNLIKELY THAT A SALE TO ANOTHER PERSON COULD BE EFFECTED BY
SUCH DATE, AT A PRICE REFLECTING THE TRUE VALUE OF THE TARGET INTERESTS IN THE EVENT OF A
DEFAULT UNDER THIS AGREEMENT BY THE PURCHASER PARTIES; (iii) CERTAIN COSTS AND OTHER DAMAGES
IN AN AMOUNT SUBSTANTIALLY IN EXCESS OF THE DEPOSIT MAY BE INCURRED BY THE SELLER PARTIES IF
THE TRANSACTION CONTEMPLATED HEREBY IS NOT COMPLETED BY SUCH DATE; AND (iv) THE SELLER
PARTIES ARE ENTERING INTO THIS AGREEMENT WITH THE PURCHASER PARTIES IN RELIANCE UPON THE
PURCHASER PARTIES’ COMMITMENT TO CONSUMMATE THE TRANSACTION CONTEMPLATED HEREIN ON OR BEFORE
THE CLOSING DATE. THE PAYMENT OF SUCH AMOUNTS AS LIQUIDATED DAMAGES IS NOT INTENDED AS A
FORFEITURE OR PENALTY.

     (e) Survival. The terms of this Section 16 shall survive each Closing
or earlier termination of this Agreement.

     17. NOTICES.

     (a) Notices. All notices required or permitted hereunder shall be in writing
and shall be deemed effectively given: (i) upon personal delivery to the Party to be
notified, (ii) when sent by confirmed facsimile or e-mail if sent during normal business
hours of the recipient, if not, then on the next Business Day, (iii) upon receipt if sent by

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registered or certified mail, return receipt requested, postage prepaid, or with a
nationally recognized overnight courier. All communications shall be sent to the respective
Party at the following addresses:

If to the Purchaser Parties to:

c/o Pebblebrook Hotel Trust

2 Bethesda Metro Center, Suite 1530

Bethesda, Maryland 20814

Attn: Mr. Thomas C. Fisher

Facsimile No. (240) 396-5763

E-Mail: tfisher@pebblebrookhotels.com

with a required copy to:

Honigman Miller Schwartz and Cohn LLP

38500 Woodward Avenue, Suite 100

Bloomfield Hills, MI 48304

Attention: J. Adam Rothstein, Esq.

Facsimile No. (248) 566-8479

E-mail: jrothstein@honigman.com

If to the Seller Parties to:

c/o GEM Realty Capital, Inc.

900 N. Michigan Ave., Suite 1450

Chicago, IL 60611

Attn: Craig Caffarelli

Facsimile No. 312-915-2901

c/o Whitehall Street Real Estate Funds

Goldman Sachs

85 Broad Street, 10th Floor

New York, NY 10004

Attn: Robert Springer

         Peter Weidman

Facsimile No. 212-357-5505

with a required copy to:

Kirkland & Ellis LLP

300 N. LaSalle

Chicago, IL 60654

Attn: Brian E. Davis, Esq.

Facsimile No. 312-862-2200

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or to such other address as the person to whom notice is to be given may have specified in a notice
duly given to the sender as provided herein.

     18. MISCELLANEOUS.

     (a) Governing Law. This Agreement was drawn and negotiated in the Commonwealth
of Pennsylvania, and the Parties hereto agree that the Commonwealth of Pennsylvania has a
substantial relationship to the Parties and to the underlying transaction embodied by this
Agreement. Accordingly, the Parties hereto have elected that this Agreement shall be
governed by, interpreted under and construed and enforced in accordance with the laws of the
Commonwealth of Pennsylvania applicable to contracts made and performed in the Commonwealth
of Pennsylvania, without regard to the principles thereof regarding conflict of laws, and
any applicable laws of the United States of America. To the fullest extent permitted by
Applicable Law, each of the Parties unconditionally and irrevocably waives any claim to
assert that the law of any other jurisdiction governs this Agreement, the Closing Documents
executed and delivered by the Parties hereunder or title matters. Any legal suit, action or
proceeding arising out of or relating to this Agreement shall be instituted solely in any
Federal or State court in the Commonwealth of Pennsylvania and each Party to this Agreement
waives any objections which it may now or hereafter have based on venue and/or forum non
conveniens of any such suit, action or proceeding, and hereby irrevocably submits to the
jurisdiction of any such court in any suit, action or proceeding. Each party does hereby
designate and appoint the Persons set forth opposite such party in the notice provisions of
Section 17(a) as (collectively) the authorized agent to accept and acknowledge on
its behalf service of any and all process which may be served in any such suit, action or
proceeding in any Federal or State court in the Commonwealth of Pennsylvania and agrees that
service of process upon said agent at said address and written notice of said service mailed
or delivered to such party in the manner provided herein shall be deemed in every respect
effective service of process upon such party in any such suit, action or proceeding in the
Commonwealth of Pennsylvania. Each Party (x) shall give prompt notice to the other Party of
any changed address of itself or its authorized agent hereunder, (y) may at any time and
from time to time designate a substitute authorized agent (which substitute agent and office
shall be designated as the person and address for service of process).

     (b) Possession. OwnerCo LLC and Operating Tenant shall remain in possession of
the Real Property, subject to the Permitted Exceptions, and tangible Personal Property upon
completion of the Closing.

     (c) Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the successors and assigns of the Parties hereof. Notwithstanding
the foregoing, the Purchaser Parties shall not assign their rights, or any part thereof,
under this Agreement or delegate the Purchaser Parties’ duties hereunder, without the prior
written consent of the Seller Parties, which consent may be withheld, delayed and
conditioned by the Seller Parties, in their sole and absolute discretion; provided,
however, the Purchaser Parties may assign their rights under this Agreement to any
entity controlled by Pebblebrook Hotel Trust, a Maryland real estate investment trust,
without the Seller Parties’ consent. The Seller Parties may assign their rights, or any
part

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thereof, to an Affiliate of the Seller Parties, without the prior consent of the
Purchaser Parties. No assignment of this Agreement by a Party shall relieve such Party of
its obligations hereunder.

     (d) Entire Agreement. This Agreement, together with the exhibits hereto, and
the Closing Documents, constitute the entire agreement of the Parties regarding the subject
matter of this Agreement and all prior or contemporaneous agreements, understandings,
representations and statements, oral or written, are hereby merged herein, including,
without limitation, the Letter of Intent.

     (e) Severability. If any term or provision of this Agreement or the
application thereof to any Persons or circumstances shall, to any extent, be invalid or
unenforceable, the remainder of this Agreement or the application of such term or provision
to Persons or circumstances other than those as to which it is held invalid or unenforceable
shall not be affected thereby and each remaining term and provision of this Agreement shall
be valid and enforceable to the fullest extent permitted by Applicable Law.

     (f) Amendment and Waiver. This Agreement may not be modified, amended,
altered, extended or supplemented except by written agreement executed and delivered by the
Parties.

     (g) Delays or Omissions. The failure of any Party hereto to enforce at any
time any of the provisions of this Agreement shall in no way be construed as a waiver of any
of such provisions, or the right of any Party thereafter to enforce each and every such
provision. No waiver of any breach of this Agreement shall be held to be a waiver of any
other or subsequent breach.

     (h) Consent. All consents required herein shall not be unreasonably withheld,
delayed or conditioned unless specifically stated otherwise herein.

     (i) Recordation of Agreement. The Parties shall not record this Agreement or
any memorandum or notice hereof (subject to filings required to be made with the SEC
(defined below) as described below).

     (j) Headings; Article, Section and Exhibit and Schedule References. The
Article and Section headings used herein are for reference purposes only and do not control
or affect the meaning or interpretation of any term or provision hereof. All references in
this Agreement to Articles, Sections and Schedules are to the Articles and Sections hereof
and the Schedules annexed hereto, unless otherwise expressly stated.

     (k) No Other Parties. The representations, warranties and agreements of the
Parties contained herein are intended solely for the benefit of the Parties to whom such
representation, warranties or agreements are made (and their permitted assigns), and shall
confer no rights hereunder, whether legal or equitable, in any other party, and no other
party shall be entitled to rely thereon; provided, however, that the
Indemnified Parties which are not Parties are intended third-party beneficiaries with
respect to, and

61

 

shall have the right to enforce the provisions relating to, any express
indemnification set forth herein in favor of such Indemnified Parties.

     (l) Third-Party Beneficiaries. This Agreement shall not confer any third-party
beneficiary status to any Person other than (i) the Target Parties, OwnerCo LLC, and
Operating Tenant, which shall be express beneficiaries of all covenants, representations and
warranties, and obligations owing by the Purchaser Parties hereunder, and (ii) any Seller
Parties Indemnitee, and any Purchaser Parties Indemnitee, any in such case solely to the
extent expressly provided herein.

     (m) Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall constitute an original, and all of which taken together shall constitute
but one agreement.

     (n) Confidentiality.

     (i) Except as required by law, including the regulations of the Securities and
Exchange Commission (“SEC”), neither the Purchaser Parties nor their Affiliates
shall issue any press release or public disclosure regarding the Seller Parties or
the Hotel that includes a reference to, or uses the name of the Seller Parties, the
Target Parties, OwnerCo LLC, Operating Tenant or Manager or any Affiliate
respectively thereof, or the Hotel, without the prior written consent of the Seller
Parties. Neither the Seller Parties nor their Affiliates shall issue any press
release regarding the Purchaser Parties or any Affiliate thereof that includes a
reference to, or uses the name of the Purchaser Parties or any such Affiliate,
without the prior written consent of the Purchaser Parties. In addition, neither
Party nor their respective Affiliates may make a filing or other public disclosure
with any Governmental Authority that includes a disclosure that is inconsistent with
or outside the scope of this Agreement or any of the transactions contemplated
hereby without the prior written consent of the other Party. Notwithstanding the
foregoing or anything herein contained to the contrary, at any time following the
Effective Date, the Purchaser Parties may file with the SEC in its 8-K and 10-Q and
other required filings information regarding the transaction contemplated by this
Agreement (including a copy of this Agreement), without the prior written consent of
the Seller Parties.

     (ii) The Purchaser Parties represent, warrant and agree that the Purchaser
Parties have and shall maintain all information received or obtained by the
Purchaser Parties regarding the Seller Parties and their Affiliates, the Property
and the transaction contemplated by this Agreement (including, without limitation,
the Seller Parties Due Diligence Materials) in strict confidence (the “Confidential
Information”) and, prior to the Closing, shall not disclose any such Confidential
Information to third parties or use such Confidential Information for any purpose
other than to evaluate the Purchaser Parties’ interest in their acquisition of the
Hotel and the transaction contemplated hereby to the extent provided for in this
Agreement. The Seller Parties represent, warrant and agree that the Seller Parties
have and shall maintain all information received or obtained by the Seller Parties
regarding the Purchaser Parties, their Affiliates and

62

 

the transactions contemplated
by this Agreement in strict confidence and shall not disclose any such Confidential
Information to third parties or use such Confidential Information for any purpose
other than to evaluate the transaction contemplated hereby to the extent provided
for in this Agreement. Notwithstanding the foregoing, each Party may provide such
information to (a) its stockholders, partners, investors, lenders, members,
directors, officers, employees, agents, attorneys, accountants and Affiliates (to
the extent such disclosure reasonably relates to the transaction contemplated by
this Agreement and such Persons agree to comply with the terms of this Section
18(n)(ii) or (b) its financial advisors and other professional advisors who
agree to comply with the terms of this Section 18(n)(ii). The foregoing
agreements shall not apply to any Confidential Information that (1) is or becomes
publicly available through no fault of a Party, or any Person with whom such Party
shared Confidential Information, (2) is received from a third-party and not, to the
knowledge of the disclosing Party, through violation of any confidentiality
agreement, (3) is independently obtained by such Party without reference to the
Confidential Information, or (4) such Party is legally required to disclose;
provided, however, that if any Party is requested or ordered to
disclose any such information pursuant to any court or other government order or in
connection with any other applicable legal procedure, it shall provide the other
Party with prompt notice of any such request or order so that the other Party may
seek an appropriate protective order. Each Party acknowledges that any use or
disclosure of the Confidential Information would cause irreparable injury to the
other Party, and that in the event of a violation by any other Party of the
provisions of this Section 18(n)(ii) the other Party’s remedies at law would
not be adequate. Accordingly, in such event, any aggrieved Party may proceed and
protect its rights by an action in equity for specific performance or for injunction
against the violation hereof. If the Closing fails to occur for any reason, each
Party promptly shall return to the other Party (and shall cause the other Party’s
Affiliates, agents, representatives, consultants, lenders, prospective investors and
attorneys to return to such other Party) all documents and other materials delivered
to such Party by or on behalf of such Party, together with all copies thereof.
Notwithstanding the foregoing or anything herein contained to the contrary, at any
time following the Effective Date, the Purchaser Parties may file with the SEC in
its 8-K and 10-Q and other required filings information regarding the transaction
contemplated by this Agreement (including a copy of this Agreement), and the same
shall not be deemed a violation of the foregoing.

     (o) Waiver of Trial by Jury. NO PARTY SHALL HAVE THE RIGHT TO SEEK A TRIAL BY
JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND EACH WAIVES ANY RIGHT TO TRIAL BY JURY FULLY
TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THE TERMS OF
THIS AGREEMENT OR ANY CLOSING DOCUMENT, THE TRANSACTIONS CONTEMPLATED HEREBY, OR ANY CLAIM,
COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL
BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY EACH PARTY, AND IS INTENDED TO

63

 

ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD
OTHERWISE ACCRUE. ANY PARTY IS HEREBY AUTHORIZED TO FILE A COPY OF THIS SECTION IN ANY
PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY EACH PARTY HERETO.

     (p) Time of the Essence. Time shall be of the essence with respect to the
Parties’ obligations to consummate the transactions contemplated by this Agreement.

     (q) Attorneys’ Fees. In the event that any suit or action is instituted to
enforce any provision in this Agreement the prevailing Party in such dispute shall be
entitled to recover from the losing Party all fees, costs and expenses of enforcing any
right of such prevailing Party under or with respect to this Agreement, including without
limitation, such reasonable fees and expenses of attorneys and accountants, which shall
include, without limitation, all fees, costs and expenses of appeals.

     (r) Broker.

     (i) The Seller Parties represent and warrant to the Purchaser Parties that
neither the Seller Parties nor any of their Affiliates have hired, retained or dealt
with any broker, finder, consultant or intermediary in connection with the
negotiation, execution or delivery of this Agreement or the transactions
contemplated hereby, other than Hodges Ward Elliott. The Seller Parties shall
indemnify the Purchaser Parties Indemnitees from and against any claim of any
broker, finder, consultant or intermediary made in connection with the negotiation,
execution or delivery of this Agreement or the transactions contemplated hereby to
the extent claiming by or through the Seller Parties or any of their Affiliates.
The Seller Parties shall be solely responsible for any commission or fees due Hodges
Ward Elliott in connection with the transactions set forth herein.

     (ii) The Purchaser Parties represent and warrant to the Seller Parties that
neither the Purchaser Parties nor any Affiliate thereof has hired, retained or dealt
with any broker other than Hodges Ward Elliott (who shall be paid a commission
pursuant to a separate agreement between the Seller Parties and Hodges Ward
Elliott), finder, consultant or intermediary in connection with the negotiation,
execution or delivery of this Agreement or the transactions contemplated hereby.
The Purchaser Parties shall indemnify the Seller Indemnities from and against any
claim of any broker, finder, consultant or intermediary made in connection with the
negotiation, execution or delivery of this Agreement or the transactions
contemplated hereby to the extent claiming by or through the Purchaser Parties or
any Affiliate thereof.

     (iii) The provisions of this Section 18(r) shall survive each Closing
and any termination of this Agreement.

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     (s) Closing on Business Day. Notwithstanding anything herein to the contrary,
if the date set for Closing is not a Business Day, then the Closing shall occur on the
Business Day immediately following such day.

     (t) Real Estate Recovery Fund. A Real Estate Recovery Fund exists to reimburse
a person who has obtained a final civil judgment against a Commonwealth real estate licensee
owing to fraud, misrepresentations or deceit in a real estate transaction and who has been
unable to collect the judgment after exhausting legal and equitable remedies. Details about
the Fund may be obtained by calling the State Real Estate Commission at (717) 783-3658.

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     IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the Effective
Date.

	 	 	 	 	 
	 	SELLER PARTIES

PLATINUM OWNERCO, LLC, a Delaware 

limited liability company

 	 
	 	By:  	/s/ Barry Malkin
 	 
	 	 	Name:  	Barry Malkin                 	 
	 
	 	PLATINUM LEASECO, LLC, a Delaware 

limited liability company

 	 
	 	By:  	/s/ Barry Malkin
 	 
	 	 	Name:  	Barry Malkin                  	 
	 
	 	SOUTH 17TH STREET INTERMEZZCO,

LLC, a Delaware limited liability company

By: Platinum OwnerCo, LLC, a Delaware

limited liability company, its sole member
	 

	 	 	 	 	 
	 	By:  	/s/ Barry Malkin
 	 
	 	 	Name:  	Barry Malkin              	 
	 

[Seller Parties Signature Page to Membership Interest Purchase Agreement]

 

 

	 	 	 	 	 
	 	PURCHASER PARTIES

SPARTANS OWNER LLC, a Delaware

limited liability company

 	 
	 	By:  	/s/ Thomas C. Fisher
 	 
	 	 	Name:  	Thomas C. Fisher            	 
	 
	 	SPARTANS LESSEE LLC, a Delaware 

limited liability company

 	 
	 	By:  	/s/ Thomas C. Fisher
 	 
	 	 	Name:  	Thomas C. Fisher             	 
	 

[Purchaser Parties Signature Page to Membership Interest Purchase Agreement]exv10w4

Exhibit 10.4

SECOND AMENDMENT TO MEMBERSHIP INTEREST PURCHASE AGREEMENT

     This SECOND AMENDMENT TO MEMBERSHIP INTEREST PURCHASE AGREEMENT (the “Amendment”) is made and
entered into as of the 15th day of November, 2010, by and among PLATINUM OWNERCO, LLC, a Delaware
limited liability company (“Platinum OwnerCo”), PLATINUM LEASECO, LLC, a Delaware limited liability
company (“Platinum LeaseCo”), SOUTH 17TH STREET INTERMEZZCO, LLC, a Delaware limited liability
company (“MezzCo” and together with Platinum LeaseCo and Platinum OwnerCo, individually a “Seller
Party” and collectively, the “Seller Parties”), SPARTANS OWNER LLC, a Delaware limited liability
company (“Spartans Owner”), and SPARTANS LESSEE LLC, a Delaware limited liability company
(“Spartans Lessee” and together with Spartans Owner, individually a “Purchaser Party” and
collectively, the “Purchaser Parties”). The Seller Parties and the Purchaser Parties are
collectively referred to herein as the “Parties”.

     WHEREAS, the Parties entered into a certain Membership Interest Purchase Agreement dated on
October 13, 2010, as amended by the certain First Amendment to Membership Interest Purchase
Agreement dated November 12, 2010 (the “Purchase Agreement”), concerning the purchase and sale of
the membership interests in South 17th Street OwnerCo Mezzanine, LLC, a Delaware limited liability
company, and South 17th Street LeaseCo Mezzanine, LLC, a Delaware limited liability company
(defined therein as the Target Interests); and

     WHEREAS, the Parties desire to amend the Purchase Agreement as set forth herein.

     NOW, THEREFORE, in consideration of good and valuable consideration, the receipt of which is
hereby acknowledged, and intending to be legally bound hereby the Parties agree to amend the
Purchase Agreement as follows:

     1. Definitions. All initial capitalized terms used, but not defined, in this
Amendment shall have the meanings set forth in the Purchase Agreement.

     2. Amendment to Section 1. The Parties hereby agree that the following definitions
are added to Section 1 of the Purchase Agreement in alphabetical order:

     “Debt” has the meaning given in the Mortgage Loan Agreement.

     “Debt Assumption” has the meaning set forth in Section 2(h) hereof.

     “Guarantor” has the meaning given in the Mortgage Loan Agreement.

     “Guaranty” has the meaning given in the Mortgage Loan Agreement.

     “Mortgage Lender” means the Lender, as defined in the Mortgage Loan Agreement.

     “Mortgage Loan Documents” means the Loan Documents, as defined in the Loan Agreement.

 

 

     “Mortgage Loan Transfer Fees” has the meaning set forth in Section 5(c) hereof.

     Furthermore, the Parties hereby agree that clause (i) of the definition of Purchaser Parties
Liabilities is hereby deleted and replaced with the following:

“(i) with respect to the Target Interests, Target Parties, OwnerCo LLC, LeaseCo LLC, the
Property or the Hotel to the extent first arising or accruing on or after the Closing Date
including, without limitation, (A) Liabilities to the extent accruing on or after the
Closing Date under the Tenant Leases, the Management Agreement (including obligations in
respect of Employees thereunder), the Contracts, the Permitted Exceptions, the Licenses and
Permits, the third-party license agreements for the IT Systems, the Bookings, and, in the
event of the consummation of the Debt Assumption as part of the consummation of the
transactions contemplated hereby, the Mortgage Loan and Mortgage Loan Documents, and (B)
Liabilities resulting from any Third-Party Claim based on events or circumstances to the
extent first arising or accruing on or after the Closing Date;”

     Furthermore, the Parties hereby agree that clause (i) of the definition of Seller Parties
Liabilities is hereby deleted and replaced with the following:

“(i) with respect to the Target Interests, Target Parties, OwnerCo LLC, LeaseCo LLC, the
Property or the Hotel to the extent first arising or accruing prior to the Closing Date,
including, without limitation, (A) Liabilities to the extent accruing prior to the Closing
Date under the Tenant Leases, the Management Agreement (including obligations in respect of
Employees thereunder), the Contracts, the Permitted Exceptions, the Licenses and Permits,
the third-party license agreements for the IT Systems, the Bookings, and, in the event that
the Purchaser Parties do not timely make an election for the Debt Assumption (as provided in
Section 2(h)) or the Debt Assumption is not otherwise consummated as part of the
consummation of the transactions contemplated hereby, the Mortgage Loan, and (B) Liabilities
resulting from any Third-Party Claim based on events or circumstances to the extent first
arising or accruing prior to the Closing Date;”

     3. Amendment to Section 2(c). The Parties hereby agree that the first clause (prior
to the colon) of the first sentence of Section 2(c) of the Purchase Agreement is hereby deleted and
replaced with the following:

“Subject to adjustment as expressly provided herein, the Purchaser Parties shall pay
Eighty-Eight Million Four Hundred Eight-Six Thousand Two Hundred Forty and 00/100 Dollars
($88,486,240.00) as the purchase price for the Target Interests (the “Purchase Price”) to
the Seller Parties as follows:”

     Furthermore, the Parties hereby agree that Section 2(c)(iii) of the Purchase Agreement is
hereby deleted and replaced with the following:

“At the Closing, the Deposit shall be released to the Seller Parties and the Purchaser
Parties shall deliver the balance of the Purchase Price in immediately available funds;
provided, however, in the event of the consummation of the Debt Assumption
as part of

 

 

the consummation of the transactions contemplated hereby, the Purchaser Parties shall
receive a credit to the Purchase Price for the amount of the Debt outstanding as of the
Closing Date (but excluding any Mortgage Loan Transfer Fees), and the Purchaser Parties
shall deliver the balance of the Purchase Price in immediately available funds.”

     4. Addition of Section 2(h). The Parties hereby agree that Section 2(h) is added to
the Purchase Agreement as follows:

Debt Assumption and Release. The Purchaser Parties shall have the right to
elect, by providing the Seller Parties with written notice of such election no later than
three (3) Business Days prior to the date set for Closing, to retain the Debt in place and
not to require its payoff and discharge as of Closing (the “Debt Assumption”) (the failure
to make such election timely being deemed an election to not pursue such Debt Assumption),
provided that, at or prior to Closing, (i) the Purchaser Parties shall have received and
delivered to the Seller Parties all required approvals of the Mortgage Lender and/or any
other Person under and/or contemplated by the Mortgage Loan in conjunction with such Debt
Assumption, (ii) the Purchaser Parties shall cause each Guarantor under each Guaranty to be
fully released and all other Mortgage Loan Documents amended so as to release each Guarantor
of all Liabilities under the Mortgage Loan Documents, all in form and substance acceptable
to the Seller Parties and each Guarantor in their respective reasonable discretion, and
(iii) the Purchaser Parties shall (A) cause the Mortgage Lender to provide an estoppel
certificate to the Seller Parties setting forth the matters described in Section 5.1.15 of
the Mortgage Loan Agreement, and (B) use commercially reasonable efforts to cause the
Mortgage Lender to additionally state in such estoppel certificate that it has no
outstanding claims against, and that there are no outstanding defaults by, any of the Target
Parties, OwnerCo LLC or LeaseCo LLC under the Mortgage Loan Documents as of the Closing
Date, all in form and substance acceptable to the Seller Parties in their reasonable
discretion. If the Purchaser Parties timely elect to pursue the Debt Assumption, then (y)
the date set for Closing shall be December 1, 2010 (instead of November 22, 2010), and (z)
the Purchaser Parties shall have the additional option to extend the date set for Closing to
December 15, 2010, upon prior written notice thereof delivered by the Purchaser Parties to
the Seller Parties on or before December 1, 2010, and the deposit by the Purchaser Parties
with the Escrow Agent on or before December 1, 2010, of an additional amount of SIX MILLION
and 00/100 DOLLARS ($6,000,000.00), which shall be added to and become a part of the
“Deposit” hereunder. If the Purchaser Parties timely elect to pursue the Debt Assumption,
then the Purchaser Parties shall use commercially reasonable efforts to cause the
satisfaction of the foregoing conditions for Debt Assumption and the Seller Parties shall
use commercially reasonable efforts in cooperating with the Purchaser Parties in connection
therewith; provided, however, the Parties agree that in no event shall the
foregoing conditions for Debt Assumption be a Purchaser Parties Closing Condition. For
the avoidance of doubt, in the event that any condition for the Debt Assumption shall fail
to have been satisfied for any reason at or prior to the date set for Closing (as extended
and as may have been further extended pursuant hereto), then the Purchaser Parties shall
nevertheless proceed with the consummation of the transaction contemplated hereby without
such Debt Assumption, subject to the terms hereof. If the Purchaser Parties timely elect to
pursue the Debt

 

 

Assumption, and any condition for the Debt Assumption shall fail to have been satisfied for
any reason at or prior to the date set for Closing (as extended and as may have been further
extended pursuant hereto), then the Seller Parties shall have the right, from time to time
and in each instance upon written notice thereof to the Purchaser Parties, to extend the
date set for Closing (as extended and as may have been further extended pursuant hereto) by
any number of days, not in excess of three (3) Business Days as the Seller Parties deem
necessary (in their sole and absolute discretion) to prepare for the consummation of the
transactions contemplated hereby without such Debt Assumption.

     5. Addition of Section 4(c)(i). The Parties hereby agree that the first two
sentences of Section 4(c)(i) are hereby deleted and replaced by the following:

Unpermitted Exceptions. If the Purchaser Parties object to any (1) liens,
encumbrances or other exceptions to title (the “Title Exceptions”) disclosed in the Title
Commitment, or (2) encroachments by improvements on adjoining properties onto or over the
Land, any encroachments of the Improvements onto or over adjoining properties, setback lines
or easements (to the extent in violation thereof) or other survey defects (the “Survey
Defects”) disclosed in the Existing Survey or Updated Survey (if any), the Purchaser Parties
shall confer with the Title Company and the Seller Parties to attempt to agree on which
shall constitute “unpermitted exceptions” to title to the Real Property (the “Unpermitted
Exceptions”) prior to the expiration of the Due Diligence Period; provided,
however, that (A) the Management Agreement, (B) all liens and encumbrances caused or
created by any Purchaser Parties Indemnitee, and (C) in the event that the Debt Assumption
is consummated as part of the consummation of the transactions contemplated hereby, the
mortgage and related lien and recorded security documents securing the Mortgage Loan, shall
in no event constitute Unpermitted Exceptions. Notwithstanding the foregoing, the Seller
Parties agree that the following shall constitute Unpermitted Exceptions: (I) if the
Purchaser Parties do not timely make an election for the Debt Assumption (as provided in
Section 2(h)) or the Debt Assumption is not otherwise consummated as part of the
consummation of the transactions contemplated hereby, the Mortgage Loan, (II) any other
mortgages, deeds of trust or other security interests for any financing (other than the
Mortgage Loan) incurred by any Target Party, OwnerCo LLC or Operating Tenant prior to
Closing (unless the Purchaser Parties are entitled to a credit therefor pursuant to this
Agreement), (III) Taxes which constitute Title Exceptions which would be delinquent if
unpaid at Closing; provided, however, that if any such Taxes are payable in
installments, such obligation shall apply only to the extent such installments would be
delinquent if unpaid at Closing, and (IV) any other Title Exceptions objected to by the
Purchaser Parties which may be removed in accordance with its terms by payment of a
liquidated amount which in the aggregate do not exceed One Hundred Thousand and 00/100
Dollars ($100,000.00) (the items set forth in (I), (II), (III) and (IV) above being referred
to herein as “Automatic Unpermitted Exceptions”).

     6. Amendment to Section 5(c). The Parties hereby agree that clause (8) of the second
sentence of Section 5(c) of the Purchase Agreement is hereby deleted and replaced with the
following:

 

 

“(8) any mortgage tax, title insurance fees and expenses for any loan title insurance
policies, recording charges or other amounts payable in connection with any financing
obtained by the Purchaser Parties, and any transfer, assumption or other fees and expenses
charged by the Mortgage Lender or any other Person, including the lender’s attorney’s fees
(the “Mortgage Loan Transfer Fees”), with respect to any Debt Assumption and/or the
satisfaction of the conditions therefor; and”

     7. Amendment to Section 6(b)(ii). The Parties hereby agree that Section 6(b)(ii) of
the Purchase Agreement is hereby deleted and replaced with the following:

“The Seller Parties shall have caused (or made arrangements to cause at Closing (including
the use of the Purchase Price therefor)) the prepayment of the Debt in whole;
provided, however, the Seller Parties shall not be required to cause the
prepayment of the Debt if the Debt Assumption is consummated as part of the consummation of
the transactions contemplated hereby;”

     8. Addition to Section 9(a). The Parties hereby agree that Section 9(a)(xxxiv) is
added to the Purchase Agreement as follows:

“Subject to the Purchaser Parties’ timely election to pursue the Debt Assumption, (i) the
Seller Parties have delivered a true, correct and complete copy of the Mortgage Loan
Documents to the Purchaser Parties, (ii) to Seller Parties’ knowledge, there are no material
defaults, disputes, claims, rights of offset or events which, with the giving of notice or
the passage of time or both, could become material defaults under the Mortgage Loan
Documents, and (iii) neither OwnerCo LLC nor Operating Tenant has given or received any
written notice of any breach or default under the Mortgage Loan Documents which has not been
cured;”

     9. Amendment to Section 12(a). The Parties hereby agree that the words “and the
Mortgage Loan Documents (subject to the Purchaser Parties’ timely election to pursue the Debt
Assumption)” are hereby inserted into clause (ii) of the first sentence of Section 12(a) of the
Purchase Agreement immediately after the words “Management Agreement” and before the words “in all
material respects.”

     10. Amendment to Section 14(e). The words “, and Section 9(a)(xxxiv)” shall be added
after the word “inclusive” in Section 14(e).

     11. Amendment to Section 18(c). The Parties hereby agree that the words “, and the
Purchaser Parties may assign eighty-nine percent (89%) of their right to acquire the Mezz OwnerCo
Interests to Pebblebrook Hotel, L.P., a Delaware limited partnership” are hereby inserted at the
end of the second sentence of Section 18(c) of the Purchase Agreement.

     12. Seller Parties Due Diligence Satisfaction. Pursuant to Section 3(a)(i) of the
Purchase Agreement, the Purchaser Parties hereby provide notice to the Seller Parties of their
satisfaction with the result of their due diligence review of the Property and hereby waives their
right to

 

 

terminate the Purchase Agreement pursuant to the Due Diligence Contigency. The Seller Parties
hereby acknowledge receipt of the foregoing waiver.

     13. No Other Amendments. Except as otherwise expressly amended by this Amendment, (i)
this Amendment shall not otherwise operate to waive, modify, release, consent to or in any manner
affect any rights or obligations of the Parties under the Purchase Agreement, and (ii) the Purchase
Agreement (as amended by this Amendment) shall remain in full force and effect.

     14. Conflict. Any conflict between the terms of the Purchase Agreement and the terms
of this Amendment shall be resolved in favor of the terms of this Amendment.

     15. Incorporation of Recitals and Schedules. The recitals to this Amendment are
incorporated herein by such reference and made a part of this Amendment.

     16. Execution of Amendment. Any Party may deliver executed signature pages to this
Amendment by facsimile or other electronic transmission to any other Party, which facsimile or
electronic copy shall be deemed to be an original executed signature page. This Amendment may be
executed in any number of counterparts, each of which shall be deemed an original and all of which
counterparts together shall constitute one agreement with the same effect as if the Parties had
signed the same signature page.

[Remainder of page intentionally left blank;

Signatures on following pages.]

 

 

     In witness hereof, each party has caused this Amendment to be executed and delivered in its
name by a duly authorized officer or representative.

	 	 	 	 	 
	 	SELLER PARTIES

PLATINUM OWNERCO, LLC, a Delaware limited liability company

 	 
	 	By:  	/s/  Eric Siegel
 	 
	 	 	Name:  	Eric Siegel 	 
	 	 	 	 
	 
	 	PLATINUM LEASECO, LLC, a Delaware limited liability company

 	 
	 	By:  	/s/ Eric Siegel
 	 
	 	 	Name:  	Eric Siegel 	 
	 	 	 	 
	 	SOUTH 17TH STREET INTERMEZZCO, LLC, a Delaware limited liability company

 	 
	 	By:  	Platinum OwnerCo, LLC, a Delaware limited liability company, its sole member
 	 
	 	 	 	 
	 	 	 
	 	By:  	/s/ Eric Siegel
 	 
	 	 	Name:  	Eric Siegel 	 

 

 

	 	 	 	 	 
	 	PURCHASER PARTIES

SPARTANS OWNER LLC, a Delaware limited liability company

 	 
	 	By:  	/s/  Thomas C. Fisher
 	 
	 	 	Name:  	Thomas C. Fisher 	 
	 	 	 	 

	 	 	 	 	 
	 	SPARTANS LESSEE LLC, a Delaware limited liability company

 	 
	 	By:  	/s/ Thomas C. Fisher
 	 
	 	 	Name:  	Thomas C. Fisher

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