Document:

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EXHIBIT 10.3      1998  OFFICERS'  AND KEY  EMPLOYEES'  STOCK OPTION FOR HCB
                  BANCORP (AS ASSUMED BY FIRST CAPITAL, INC.)

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               1998 OFFICERS' AND KEY EMPLOYEES' STOCK OPTION PLAN
                                       OF
                                   HCB BANCORP

                                     ARTICLE

                                  INTRODUCTION

      1.1 PURPOSE.  The 1998 Officers' and Key  Employees'  Stock Option Plan of
          -------
HCB Bancorp  (the  "Plan") is designed to promote the  interests  of HCB Bancorp
(the  "Company")  and its  Subsidiaries  by  encouraging  their officers and key
employees,  upon whose  judgment,  initiative  and  industry the Company and its
Subsidiaries  are largely  dependent  for the  successful  conduct and growth of
their  business,  to  continue  their  association  with  the  Company  and  its
Subsidiaries  by providing  additional  incentive  and  opportunity  for unusual
industry  and  efficiency  through  stock  ownership,  and by  increasing  their
proprietary interest in the Company and their personal interest in its continued
success and  progress.  The Plan  provides for the  granting of incentive  stock
options ("ISOs").

      1.2  EFFECTIVE DATE AND DURATION.  The Effective of the Plan is January 1,
           ---------------------------
1998.  Options  may be  granted  under the Plan for a period  of ten (10)  years
commencing January 1, 1998;  however, no options may be exercised until the Plan
has been approved by a majority of the shares of the Company  represented at the
shareholders'  meeting at which approval of the Plan is  considered.  No options
shall be granted  under the Plan after  December 31, 2007.  Upon that date,  the
Plan shall expire except as to outstanding options which options shall remain in
effect until they have been  exercised or terminated  or have  expired.  Options
must be  granted  within  ten (10)  years of the date the Plan is adopted by the
Board of Directors or approved by the shareholders of the Company,  whichever is
earlier.

      1.3   ADMINISTRATION.
            --------------

            (a) The Plan shall be administered by the Committee.  The Committee,
from  time to time,  may  adopt  any rule or  procedure  it deems  necessary  or
desirable for the proper and efficient  administration of the Plan. No member of
the  Committee  shall be  eligible,  at any time  when he is such a  member,  to
receive an option  under the Plan.  The decision of a majority of the members of
the Committee  shall  constitute the decision of the  Committee.  Subject to the
provisions  of the Plan,  the  Committee  is  authorized  (i) to  determine  the
employees to be granted ISO's and to make grants thereof;  (ii) to determine the
option period, the option price and the number of shares subject to each option;
(iii) to determine the time or times at which  options will be granted;  (iv) to
determine  the  time or times  when  each  option  becomes  exercisable  and the
duration  of  the  exercise  period;  (v)  to  determine  other  conditions  and
limitations,  if any,  applicable  to the exercise of each  option;  and (vi) to
determine  the nature and  duration of the  restrictions,  if any, to be imposed
upon the sale or other  disposition  of shares  acquired  by any  optionee  upon
exercise of an option, and the nature of the events, if any, and the duration of
the period,  in which any optionee's  rights in respect of shares

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acquired upon exercise of an option may be forfeited.  Each option granted under
the Plan shall be evidenced by a written stock option agreement containing terms
and conditions  established by the Committee  consistent  with the provisions of
the Plan,  including  such terms as the Committee  shall deem advisable in order
the each ISO shall  constitute an "incentive stock option" within the meaning of
Section 422 of the Code.

            (b) Any notice or document required to be given to or filed with the
Committee  will be properly  given or filed if  delivered or mailed by certified
mail, postage prepaid, to the Committee of 710 Main Street, NE, Palmyra, Indiana
47164.

      1.4  DEFINITIONS. For purposes of this Plan, unless a different meaning is
           -----------
clearly  required by the context,  the following  terms shall have the following
meanings:

            (a)  "Board  of  Directors"  means  the  Board of  Directors  of the
Company.

            (b)  "Change  in  control  of the  Company"  means  (i) any  merger,
consolidation  or similar  transaction  which  involves the Company and in which
persons  who are the  shareholders  of the  Company  immediately  prior  to such
transaction own, immediately after such transaction,  shares of the surviving or
combined  entity which possess voting rights equal to or less than fifty percent
(50%) of the voting rights of all  shareholders of such entity,  determined on a
fully  diluted  basis;  (ii)  any  sale,  lease,  exchange,  transfer  or  other
disposition of all or any  substantial  part of the  consolidated  assets of the
Company'  (iii) any  tender,  exchange,  sale or other  disposition  (other than
disposition  of the stock of the Company or any  Subsidiary in  connection  with
bankruptcy, insolvency, foreclosure, receivership or other similar transactions)
or  purchases  (other than  purchases  by the  Company or any Company  sponsored
employee  benefit Plan, or purchases by members of the Board of Directors or any
Subsidiary) of shares which represent more than twenty-five percent (25%) of the
voting power of the Company or any Subsidiary; (iv) during any period of two (2)
consecutive  years,  individuals  who at the  date of the  adoption  of the Plan
constitute the Board of Directors  cease for any reason to constitute at least a
majority thereof,  unless the election of each director at the beginning of such
period has been  approved by directors  representing  at least a majority of the
directors  then in office who were  directors on the date of the adoption of the
Plan;  (v) a majority of the Board of Directors  recommends the acceptance of or
accept any agreement,  contract,  offer or other arrangement which provides for,
or any  series  of  transactions  which  results  in,  any  of the  transactions
described  above.  Notwithstanding  the  foregoing,  a Change in  Control of the
Company  shall not be deemed to have  occurred  with respect to any  transaction
unless such  transaction  has been  approved  or shares have been  tendered by a
majority of the shareholders who are not Section 16 Grantees.

            (c) "Code" means the Internal Revenue Code of 1986, as amended.

            (d)  "Committee"  means  the  committee  of the  Board of  Directors
appointed to administer the Plan.

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            (e) "Company" means HCB Bancorp.

            (f) "Effective Date" means January 1, 1998.

            (g)  "Exchange  Act"  means  the  Securities  Exchange  of 1934,  as
amended.

            (h) "Fair  Market  Value"  means the per share  market  value of the
Company's  common stock as  determined by the Committee in good faith based upon
such factors as the Committee shall determine to be relevant.

            (i) "For Cause"  means (i) the willful and  continued  failure of an
optionee to perform his required duties as an officer or employee of the Company
or any  Subsidiary,  (ii) any  action  by an  optionee  which  involves  willful
misfeasance  or gross  negligence,  (iii) the  requirement  of or direction by a
federal or state regulatory  agency which has  jurisdiction  over the Company or
any Subsidiary to terminate the  employment of an optionee,  (iv) the conviction
of an  optionee  of  the  commission  of any  criminal  offense  which  involves
dishonesty or breach of trust, or (v) any intentional breach by an optionee of a
material term,  condition or covenant of any agreement  between the optionee and
the Company or any Subsidiary.

            (j) "Permanent and Total  Disability"  or  "Permanently  and Totally
Disabled" means any disability that would qualify as a disability  under Section
22(e)(3) of the Code.

            (k) "Plan" means the stock option plan embodied  herein,  as amended
from time to time,  known as the 1998 Officers' and Key Employees'  Stock Option
Plan of HCB Bancorp.

            (l)  "Section  16  Grantee"  means a  person  subject  to  potential
liability  under Section 16(b) of the Exchange Act with respect to  transactions
involving equity securities of the Company.

            (m) "Subsidiary" or "Subsidiaries"  means a corporation,  a majority
of the  outstanding  voting stock of which is owned or  controlled,  directly or
indirectly,  by the Company or by one or more other Subsidiaries of the Company.
For the purposes of this  definition,  "voting  stock" means stock having voting
power for the election of directors,  whether at all times or only so long as no
senior class of stock has such voting power by reason of any contingency.

                                   ARTICLE II

                          ELIGIBILITY AND PARTICIPATION

      Officers and key  employees  of the Company or of any of its  Subsidiaries
shall be  eligible  to receive  grants of ISO's  under the Plan.  Members of the
Committee  shall not be  eligible  to receive  grants of options  under the Plan
while serving as members of the Committee.

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                                   ARTICLE III

                                    BENEFITS

      3.1  SHARES COVERED BY PLAN.  The stock to be subject to options under the
           ----------------------
Plan  shall be shares  of  authorized  common  stock of the  Company  and may be
unissued shares or reacquired  shares  (including  shares  purchased in the open
market),  or a  combination  thereof,  as the  Committee  may from  time to time
determine.  The maximum  number of shares to be delivered  upon  exercise of all
options  granted under the Plan shall not exceed four thousand  (4,000)  shares.
Shares  covered  by  an  option  that  remain  unpurchased  upon  expiration  or
termination of the option may be made subject to further options.

      3.2 OPTION PRICE. The option price per share of stock under each ISO shall
          ------------
be not less than one  hundred  percent  (100%) of the Fair  Market  Value of the
shares on the date on which the  option is  granted.  Provided,  however,  as to
officers and key employees who, at the time an ISO is granted,  own,  within the
meaning of Section 425(d) of the Code,  more than ten percent (10%) of the total
combined  voting  power of all  classes of stock of the Company or its parent or
any Subsidiary ("Shareholder-Employees"),  the purchase price per share of stock
under each ISO shall be not less than one hundred ten percent (110%) of the Fair
Market Value of the stock on the date on which the option is granted.

      3.3  OPTION  PERIOD.  No option  shall  exceed ten (10)  years;  provided,
           --------------
however,    the   option    period   with   respect   to   ISO's    granted   to
Shareholder-Employees shall not exceed five (5) years.

      3.4 SPECIAL  CALENDAR  YEAR  LIMITATION  ON SHARES  SUBJECT TO ISO'S.  The
          ----------------------------------------------------------------
aggregate  Fair Market Value  (determined at the time of the grant of the ISO's)
of the stock with respect to which ISO's are  exercisable  for the first time by
an eligible employee during any calendar year (under all plans providing for the
grant of  incentive  stock  options of the  Company or any of its  Subsidiaries)
shall not exceed One Hundred Thousand Dollars ($100,000.00).

      3.5  SEQUENCE OF EXERCISING INCENTIVE STOCK OPTIONS. Any option granted to
           ----------------------------------------------
an  employee  pursuant  to the Plan  shall  be  exercisable  even if  there  are
outstanding  previously  granted but  unexercised  options  with respect to such
employee.

      3.6 VESTING OF OPTIONS. All options granted under the Plan shall vest, and
          ------------------
thereby  become  exercisable,  at  such  time  or  times  and  subject  to  such
requirements as shall be determined by the Committee in its sole discretion. The
stock option  agreement  between the Company and the optionee  shall include the
schedule  under which the option shall vest and shall  specify any  requirements
which must be satisfied for the option to vest.

      3.7  VESTING ON CHANGE IN CONTROL OR DEATH, RETIREMENT  OR  DISABILITY  OF
           ---------------------------------------------------------------------
OPTIONEE.  Notwithstanding  the  provisions  of Section  3.6,  in the event of a
--------
Change  in  Control  of the  Company  or upon the  death,  Permanent  and  Total
Disability or retirement of the optionee after  attaining age

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sixty-five  (65),  any options  granted  under the Plan may be exercised in full
without regard to any  restrictions  on the vesting of the options  contained in
the option agreement between the Company and the optionee.

      3.8   EARLY TERMINATION OF OPTION.
            ---------------------------

            (A)  TERMINATION  OF  EMPLOYMENT.  All rights to  exercise an option
                 ---------------------------
shall  terminate  ninety (90) days after the  optionee's  employment  terminates
unless such  termination  is For Cause or on account of the  Permanent and Total
Disability  of the  optionee  (but not later  than the date the  option  expires
pursuant to its terms). Transfer of employment from the Company to a corporation
which is a Subsidiary of the Company,  or vice versa,  or from one Subsidiary to
another, shall not be deemed termination of employment. The Committee shall have
the  authority  to determine in each case whether a leave of absence on military
or government  service shall be deemed a termination  of employment for purposes
of this subsection (a).

            (B) FOR CAUSE TERMINATION. If an optionee's employment is terminated
                ---------------------
For Cause, no previously  unexercised option granted hereunder may be exercised.
Rather, all unexercised options,  including vested and non-vested options, shall
terminate  effective on the date the optionee receives notice of his termination
For Cause.

            (C) PERMANENT  AND TOTAL  DISABILITY.  If an  optionee's  employment
                --------------------------------
terminates due to Permanent and Total Disability, his option shall terminate one
(1) year after  termination  of his  employment  due to his  Permanent and Total
Disability  (but not later  than the date the  option  expires  pursuant  to its
terms).  During  such  period,  subject to the  limitations  of the Plan and the
option  agreement  between the  Company  and the  optionee,  the  optionee,  his
guardian or  attorney-in-fact,  as the case may be, may  exercise  the option in
full.

      3.9 PAYMENT FOR STOCK.  Full payment for shares purchased  hereunder shall
          -----------------
be made at the time the option is exercised. Such payment may be made either (a)
in cash or (b) at the discretion of the Committee, by delivering shares of stock
of the Company (the  "Delivered  Stock") or a combination  of cash and Delivered
Stock. Delivered Stock shall be valued by the Committee at its Fair Market Value
determined  as of the date of the  exercise  of the option.  No shares  shall be
issued  until full  payment for them has been made,  and an optionee  shall have
none of the  rights of a  shareholder  with  respect to such  shares  until such
shares are issued to him. Upon payment of the full purchase  price,  the Company
shall issue a  certificate  or  certificates  to the  optionee  which  evidences
ownership of the shares  purchased  pursuant to the exercise of the option which
contain(s)  such terms,  conditions and provisions as may be required and as are
consistent  with the terms,  conditions and provisions of the Plan and the stock
option agreement between the Company and the optionee.

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      3.10  INCOME AND EMPLOYMENT TAX WITHHOLDING.
            -------------------------------------

            (A) PAYMENT BY OPTIONEE.  The optionee  shall be solely  responsible
                -------------------
for paying to the  Company all  required  federal,  state,  city and local taxes
applicable to his disposition of shares acquired  pursuant to the exercise of an
ISO in a disqualifying  disposition of the shares under Section 422(a)(1) of the
Code.

            (B) ISO DISQUALIFYING  DISPOSITION TAX WITHHOLDING.  Notwithstanding
                ----------------------------------------------
the  provisions of subsection  (a), with respect to shares of stock to be issued
pursuant to the  exercise  of any ISO,  the  Committee,  in its  discretion  and
subject to such rules as it may adopt,  may permit the  optionee to satisfy,  in
whole or in part, any withholding  tax obligation  which may arise in connection
with the disqualifying  disposition of the shares under Section 422(a)(l) of the
Code by having the Company accept  delivery from the optionee of shares of stock
having a Fair Market  Value,  determined  as of the date of the delivery of such
shares,  equal to the  amount of the  withholding  tax to be  satisfied  by that
delivery.

      3.11 NOTICE OF DISQUALIFYING DISPOSITION.  Any ISO granted hereunder shall
           -----------------------------------
require the  optionee to notify the  Committee of any  disposition  of any stock
issued pursuant to the exercise of the ISO under the circumstances  described in
Section  421(b) of the Code  (relating to certain  disqualifying  dispositions),
within ten (10) days of such disposition.

                                   ARTICLE IV

                     PLAN ADMINISTRATION AND INTERPRETATION

      4.1  AMENDMENT  AND  TERMINATION.  The Board of Directors of the Committee
           ---------------------------
may,  at any time,  without  the  approval  of the  stockholders  of the Company
(except as otherwise  required by applicable law, rule or  regulations),  alter,
amend, modify, suspend or discontinue the Plan, but may not, without the consent
of the holder of an option,  make any alteration which would adversely affect an
option  previously  granted  under  the Plan or,  without  the  approval  of the
stockholders of the Company,  make any alteration  which would: (a) increase the
aggregate  numbers  of shares  subject  to  options  under  the Plan,  except as
provided in Section  4.2;  (b)  decrease  the minimum  option  price,  except as
provided  in Section  4.2;  (c) permit  any  member of the  Committee  to become
eligible for grants of options under the Plan;  (d) withdraw  administration  of
the Plan from the  Committee or the Board of  Directors;  (e) extend the term of
the Plan or the maximum  period  during which any option may be  exercised;  (f)
change the manner of  determining  the option price;  or (g) change the class of
individuals eligible for options under the Plan.

      4.2   CHANGES IN STOCK.
            ----------------

            (A)  SUBSTITUTION  OF STOCK AND  ASSUMPTION OF PLAN. In the event of
                 ----------------------------------------------
any  change  in  the  common  stock  of the  Company  through  stock  dividends,
split-ups,  recapitalizations,  reclassifications, or otherwise, or in the event
that other  stock  shall be  substituted  for the  present

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common  stock of the  Company as the  result of any  merger,  consolidation,  or
reorganization  or similar  transaction which constitutes a Change in Control of
the Company, then the Committee may make appropriate  adjustment or substitution
in the aggregate  number,  price and kind of shares available under the Plan and
in the number,  price and kind of shares covered under any options granted or to
be granted under the Plan. The Committee's  determination  in this respect shall
be final and  conclusive.  Provided,  however,  that the Company  shall not, and
shall not permit its Subsidiaries to, recommend,  facilitate or agree or consent
to a  transaction  or series of  transactions  which would result in a Change in
Control  of the  Company  unless  and until the  person or  persons or entity or
entities  acquiring or  succeeding to the assets or capital stock of the Company
or any of its  Subsidiaries  as a result  of such  transaction  or  transactions
agrees to be bound by the  terms of the Plan so far as it  pertains  to  options
theretofore  granted  but  unexercised  and  agrees to assume  and  perform  the
obligations of the Company hereunder. Notwithstanding the foregoing provision of
this subsection  (a), no adjustment  shall be made which would operate to reduce
the option price of any ISO below the Fair Market Value of the stock (determined
on the date the option was granted) which is subject to an ISO.

            (B) CONVERSION OF STOCK.  In the event of a Change in Control of the
                -------------------
Company  pursuant  to which  another  person or entity  acquires  control of the
Company (such other person or entity being the "Successor"),  the kind of shares
of common  stock  which  shall be  subject  to the Plan and to each  outstanding
option shall,  automatically by virtue of such Change in Control of the Company,
be converted into and replaced by shares of common stock, or such other class of
securities  having rights and preferences no less favorable than common stock of
the  Successor,  and the number of shares subject to the option and the purchase
price per share upon exercise of the option shall be  correspondingly  adjusted,
so that, by virtue of such Change in Control of the Company, each optionee shall
have the right to  purchase  (i) that  number  of shares of common  stock of the
Successor which have a Fair Market Value equal, as of the date of such Change in
Control of the Company,  to the Fair Market Value, as of the date of such Change
in  Control  of the  Company,  of the  shares  of  common  stock of the  Company
theretofore  subject  to his  option,  and (ii) for a  purchase  price per share
which,  when multiplied by the number of shares of common stock of the Successor
subject to the option,  shall equal the  aggregate  exercise  price at which the
optionee  could have  acquired  all of the shares of common stock of the Company
previously optioned to the optionee.

      4.3  INFORMATION  TO BE FURNISHED BY  OPTIONEES.  Optionees,  or any other
           ------------------------------------------
persons entitled to benefits under this Plan, must furnish to the Committee such
documents,  evidence,  data or  other  information  as the  Committee  considers
necessary or desirable for the purpose of  administering  the Plan. The benefits
under the Plan for each  optionee,  and each  other  person who is  entitled  to
benefits  hereunder,  are to be provided on the condition  that he furnish full,
true and complete data, evidence or other information, and that he will promptly
sign any document reasonable related to the administration of the Plan requested
by the Committee.

      4.4  EMPLOYMENT  RIGHTS.  Neither the plan nor any stock option  agreement
           ------------------
executed  under  the  Plan  shall   constitute  a  contract  of  employment  and
participation  in the Plan will not give

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an optionee  the right to be rehired or  retained in the employ of the  Company,
nor will  participation  in the Plan give any optionee any right or claim to any
benefit  under the Plan,  unless  such right or claim has  specifically  accrued
under the terms of the Plan.

      4.5  EVIDENCE.  Evidence  required  of  anyone  under  the  Plan may be by
           --------
certificate,  affidavit,  document or other information which the person relying
thereon considers  pertinent and reliable,  and signed, made or presented by the
proper party or parties.

      4.6 GENDER AND NUMBER.  Where the context  admits,  words in the masculine
          -----------------
gender shall include the feminine gender,  the plural shall include the singular
and the singular shall include the plural.

      4.7 ACTION BY COMPANY.  Any action required of or permitted by the Company
          -----------------
under the Plan shall be by  resolution  of the Board of Directors or by a person
or persons authorized by resolution of the Board of Directors.

      4.8  CONTROLLING  LAWS.  Except to the  extent  superseded  by laws of the
           -----------------
United States,  the laws of Indiana shall be controlling in all matters relating
to the Plan.

      4.9 MISTAKE OF FACT. Any mistake of fact or  misstatement of fact shall be
          ---------------
corrected when it becomes known and proper adjustment made by reason thereof.

      4.10  SEVERABILITY.  In the event any provisions of the Plan shall be held
            ------------
to be illegal or invalid for any reason, such illegality or invalidity shall not
affect the  remaining  parts of the Plan,  and the Plan shall be  construed  and
endorsed as if such illegal or invalid provisions had never been contained.

      4.11 EFFECT OF HEADINGS.  The descriptive headings of the sections of this
           ------------------
Plan are inserted for  convenience of reference and  identification  only and do
not constitute a part of this Plan for purposes of interpretation.

      4.12  NONTRANSFERABILITY.  No option shall be transferable,  except by the
            ------------------
optionee's will or the laws of descent and  distribution.  During the optionee's
lifetime,  his option shall be exercisable (to the extent  exercisable)  only by
him. The option and any rights and  privileges  pertaining  thereto shall not be
transferred,  assigned,  pledged or hypothecated  by him in any way,  whether by
operation of law or otherwise and shall not be subject to execution,  attachment
or similar process.

      4.13  LIABILITY.  No member of the Board of Directors or the  Committee or
            ---------
any officer or employee of the Company or its  Subsidiaries  shall be personally
liable  for  any  action,  omission  or  determination  made in  good  faith  in
connection with the Plan. Each optionee,  in the stock option agreement  between
him and the Company,  shall agree to release and hold harmless the Company,  the
Board of Directors,  the Committee and all officers and employees of the Company
and its

<PAGE> 10

Subsidiaries from and against any tax liability,  including  without  limitation
interest  and  penalties,  incurred  by the  optionee  in  connection  with  his
participation in the Plan.

      4.14  INVESTMENT  REPRESENTATIONS.  Unless the shares subject to an option
            ---------------------------
are registered  under the Securities  Act of 1933,  each optionee,  in the stock
option agreement  between the Company and the optionee,  shall agree for himself
and his legal  representatives that any and all shares of common stock purchased
upon the exercise of the option shall be acquired for  investment and not with a
view to, or for sale in connection with, any  distribution of those shares.  Any
share issued  pursuant to the exercise of an option  subject to this  investment
representation shall bear a legend evidencing this restriction.

      4.15 USE OF PROCEEDS.  The proceeds  received by the Company from the sale
           ---------------
of stock pursuant to the Plan will be used for general corporate purposes.

                                               HCB BANCORP

Dated: _________________                        By:_________________________<PAGE>

                       PURCHASE AND SALE AGREEMENT

                             BY AND BETWEEN

                THE WESTIN ST. FRANCIS LIMITED PARTNERSHIP,
                      a Delaware limited partnership

                                   AND

                          BRE/ST. FRANCIS L.L.C.
                  a Delaware limited liability company

                       DATED AS OF JANUARY 18, 2000
                       THE WESTIN ST. FRANCIS HOTEL
                         SAN FRANCISCO, CALIFORNIA

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                                                         PAGE
                                                                                         ----
<S>                                                                                       <C>
ARTICLE I          DEFINITIONS..............................................................1
    Section 1.1.   Definitions..............................................................1

ARTICLE II         DESCRIPTION OF THE PROPERTY; EXCLUDED PROPERTY..........................10
    Section 2.1    Description of the Property.............................................10
    Section 2.2    Excluded Property.......................................................13

ARTICLE III        PURCHASE PRICE; EARNEST MONEY...........................................13
    Section 3.1    Purchase Price..........................................................13
    Section 3.2    Allocation of Purchase Price............................................13
    Section 3.3    Earnest Money...........................................................14
    Section 3.4    Payment of Purchase Price...............................................14

ARTICLE IV         DUE DILIGENCE; TITLE AND SURVEY.........................................15
    Section 4.1    Due Diligence...........................................................15
    Section 4.2    Title and Survey........................................................16
    Section 4.3    Starwood Board Approval.................................................17

ARTICLE V          SELLER'S REPRESENTATIONS AND WARRANTIES.................................18
    Section 5.1    Representations and Warranties..........................................18
    Section 5.2    Limitation on Seller's Representations and Warranties...................23
    Section 5.3    Amendment to Schedules..................................................23
    Section 5.4    Effect of Purchaser's Knowledge.........................................24

ARTICLE VI         PURCHASER'S REPRESENTATIONS AND WARRANTIES..............................24
    Section 6.1    Representations and Warranties..........................................24
    Section 6.2    Effect of Seller's Knowledge............................................25

ARTICLE VII        COVENANTS...............................................................25
    Section 7.1    Confidentiality.........................................................25
    Section 7.2    Operation of the Hotel Prior to Closing.................................26
    Section 7.3    Licenses and Permits....................................................26
    Section 7.4    Employee Matters........................................................27
    Section 7.5    Bookings................................................................27
    Section 7.6    Tax Contests............................................................28
    Section 7.7    Notices and Filings.....................................................28
    Section 7.8    Access to Information...................................................29
    Section 7.9    Further Assurances......................................................29
    Section 7.10   Seller Approval.........................................................30
    Section 7.11   Non-Solicitation........................................................31

                                       -ii-

<PAGE>

                               TABLE OF CONTENTS

<CAPTION>
                                                                                         PAGE
                                                                                         ----
ARTICLE VIII       CONDITIONS PRECEDENT....................................................32
    Section 8.1    Conditions Precedent to the Obligations of Both Seller and Purchaser....33
    Section 8.2    Additional Conditions to Purchaser's Obligations........................32
    Section 8.3    Additional Conditions to Seller's Obligations...........................34
    Section 8.4    Frustration of Closing Conditions.......................................34

ARTICLE IX         CLOSING.................................................................34
    Section 9.1    Closing Date............................................................34
    Section 9.2    Closing Escrow..........................................................34
    Section 9.3    Seller's Deliveries.....................................................35
    Section 9.4    Purchaser's Deliveries..................................................36
    Section 9.5    Possession..............................................................36

ARTICLE X          PRORATIONS; ACCOUNTS RECEIVABLE; TRANSACTION
                   COSTS...................................................................37
    Section 10.1   Prorations..............................................................37
    Section 10.2   Accounts Receivable.....................................................39
    Section 10.3   Transaction Costs.......................................................40

ARTICLE XI         TRANSITION PROCEDURES...................................................40
    Section 11.1   Settlement Statement....................................................40

ARTICLE XII        TERMINATION;  EFFECT OF TERMINATION.....................................41
    Section 12.1   Seller's Right of Termination...........................................41
    Section 12.2   Purchaser's Right of Termination........................................41
    Section 12.3   Effect of Termination...................................................41

ARTICLE XIII       CASUALTY; CONDEMNATION..................................................43
    Section 13.1   Casualty................................................................43
    Section 13.2   Condemnation............................................................44

ARTICLE XIV        INDEMNIFICATION.........................................................44
    Section 14.1   Indemnification by Seller...............................................44
    Section 14.2   Indemnification by Purchaser............................................45
    Section 14.3   Limitations on Indemnification Obligations..............................45
    Section 14.4   Indemnification Procedure...............................................45
    Section 14.5   Exclusive Remedy........................................................46
    Section 14.6   Indemnification Obligations.............................................46
    Section 14.7   Release of Seller for Environmental Liabilities.........................46

ARTICLE XV         MISCELLANEOUS PROVISIONS................................................47
    Section 15.1   Notices.................................................................47
    Section 15.2   Time is of Essence......................................................48
    Section 15.3   Assignment..............................................................48
    Section 15.4   Successors and Assigns; Third Party Beneficiaries.......................49
    Section 15.5   Prevailing Party........................................................49

                                       -iii-
<PAGE>

                               TABLE OF CONTENTS

<CAPTION>
                                                                                         PAGE
                                                                                         ----
    Section 15.6   No Recordation..........................................................49
    Section 15.7   Rules of Construction...................................................49
    Section 15.8   Governing Law; Severability.............................................50
    Section 15.9   Recitals, Exhibits and Schedules........................................50
    Section 15.10  Entire Agreement; Amendments to Agreement...............................50
    Section 15.11  Facsimile; Counterparts.................................................50

</TABLE>

                                       -iv-
<PAGE>

                                LIST OF EXHIBITS
                                ----------------
<TABLE>

<S>          <C>
Exhibit A     Earnest Money Escrow Agreement
Exhibit B     Interim Lease Agreement
Exhibit C     Management Agreement Subodination, Non-Disturbance and Attornment
              Agreement
Exhibit D     Trademark License Agreement
Exhibit E     Closing Certificate (Seller)
Exhibit F     Grant Deed
Exhibit G     Assignment and Assumption of Management Agreement
Exhibit H     Bill of Sale
Exhibit I     Assignment and Assumption of Leases and Contracts
Exhibit J     Assignment and Assumption of Union Contracts
Exhibit K     General Assignment and Assumption Agreement
Exhibit L     Closing Certificate (Purchaser)

</TABLE>

                                       -v-
<PAGE>

                                LIST OF SCHEDULES
                                -----------------
<TABLE>

<S>                    <C>
Schedule 2.1(a)         Legal Description of the Land
Schedule 5.1(c)         Consents and Approvals; No Conflicts
Schedule 5.1(d)         Title to Personal Property
Schedule 5.1(f)         Compliance with Applicable Law
Schedule 5.1(g)         Litigation
Schedule 5.1(h)         Employment Claims
Schedule 5.1(h)(iii)    Employee Plans
Schedule 5.1(i)         Taxes
Schedule 5.1(j)         Environmental Matters
Schedule 5.1(k)         Licenses and Permits
Schedule 5.1(l)         Tenant Leases
Schedule 5.1(m)         Contracts
Schedule 5.1(o)         Bookings
Schedule 5.1(p)         Insurance
Schedule 5.1(t)         Equipment Leases
Schedule 5.1(v)         Construction Disputes
Schedule 5.1(x)         Prepaid Fees
Schedule 5.1(y)         Trade Associations
Schedule 10.1(m)        2000 Cap Ex Budget

</TABLE>

                                       -vi-
<PAGE>

                           PURCHASE AND SALE AGREEMENT

      THIS PURCHASE AND SALE AGREEMENT (this "AGREEMENT") is made and entered
into as of this 18th day of January, 2000, by and between THE WESTIN ST.
FRANCIS LIMITED PARTNERSHIP, a Delaware limited partnership ("Seller"), and
BRE/ST. FRANCIS L.L.C., a Delaware limited liability company ("PURCHASER").
(Seller and Purchaser are sometimes referred to herein individually as a
"PARTY", and collectively as the "PARTIES").

                                    RECITALS

      WHEREAS, Seller is the owner of the Property (as defined herein)
relating to the hotel facility located at 335 Powell Street, San Francisco,
California, and commonly known as The Westin St. Francis (the "HOTEL").

      WHEREAS, Seller desires to sell the Property to Purchaser, and
Purchaser desires to purchase the Property from Seller, on the terms set
forth in this Agreement.

      NOW, THEREFORE, in consideration of the mutual covenants set forth in
this Agreement and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller and Purchaser hereby
agree as follows:

                                   ARTICLE I

                                  DEFINITIONS

      Section 1.1  DEFINITIONS. In addition to the terms defined above in the
introduction and recitals to this Agreement, the following terms when used in
this Agreement shall have the meanings set forth in this Section 1.1.

      "ACCOUNTS RECEIVABLE" means all amounts which Seller is entitled to
receive from the operation of the Hotel, but are not paid as of the Closing,
including, without limitation, charges for the use or occupancy of any guest,
conference, meeting or banquet rooms or other facilities at the Hotel, any
restaurant, bar or banquet services, or any other goods or services provided
by or on behalf of Seller at the Hotel, but expressly excluding any credit
card charges and checks which Seller has submitted for payment as of the
Closing.

      "ACCRUED BENEFITS" means those items set forth in clauses (ii), (iii)
and (iv) of the definition of Compensation.

      "ACQUISITION PROPOSAL" has the meaning set forth in Section 7.11 of
this Agreement.

      "ADDITIONAL DEPOSIT" has the meaning set forth in Section 3.3(a) of
this Agreement

      "AFFILIATE" means, with respect to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common control
with, the Person in question. For the purposes of this definition, the term
"control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of the Person in
question, whether by the ownership of voting securities, contract or
otherwise.

<PAGE>

      "APPLICABLE LAW" means all statutes, laws, common law, rules,
regulations, ordinances, codes or other legal requirements of any
Governmental Authority, the New York Stock Exchange, Board of Fire
Underwriters and similar quasi-governmental agencies or entities, and any
judgment, injunction, order, directive, decree or other judicial or
regulatory requirement of any court or Governmental Authority of competent
jurisdiction affecting or relating to the Person or property in question.

      "BOOKINGS" has the meaning set forth in Section 2.1(n) of this
Agreement.

      "BOOKS AND RECORDS" has the meaning set forth in Section 2.1(m) of this
Agreement.

      "BREAK-UP FEE" has the meaning set forth in Section 12.3 of this
Agreement.

      "BROKER" shall mean Sonnenblick-Goldman Company.

      "BUSINESS DAY" means any day other than Saturday, Sunday or any federal
legal holiday.

      "CASUALTY" has the meaning set forth in Section 13.1(a) of this
Agreement.

      "CLOSING" has the meaning set forth in Section 9.1 of this Agreement.

      "CLOSING DATE" has the meaning set forth in Section 9.1 of this
Agreement.

      "CLOSING ESCROW" has the meaning set forth in Section 9.2 of this
Agreement.

      "CLOSING ESCROW AGREEMENT" has the meaning set forth in Section 9.2 of
this Agreement.

      "CODE" means the Internal Revenue Code of 1986, as amended from time to
time, and any regulations, rulings and guidance issued by the Internal
Revenue Service.

      "COMPENSATION" means all (i) salaries and wages which the Employees are
entitled to receive at the time in question, together with all employment
taxes with respect thereto, including, without limitation, any withholding or
employer contributions under the Federal Insurance Contribution Act and
Federal Unemployment Taxes Act; (ii) bonus and incentive compensation; (iii)
accrued vacation days, sick days and personal days; and (iv) any health,
welfare and other benefits provided to the Employees, and employer
contributions to, and amounts paid or accrued under, any employee plans for
the benefit of the Employees.

      "COMPETING PROPOSAL" has the meaning set forth in Section 7.11 of this
Agreement.

      "CONDEMNATION" has the meaning set forth in Section 13.2(a) of this
Agreement.

      "CONFIDENTIAL INFORMATION" has the meaning set forth in Section 7.1(a)
of this Agreement.

      "CONSENT SOLICITATION" has the meaning set forth in Section 7.10 of
this Agreement.

                                      -2-
<PAGE>

      "CONTRACTS" means, collectively, the Equipment Leases and Operating
Agreements.

      "CURRENT ACCOUNTS RECEIVABLE" has the meaning set forth in Section
10.2(b) of this Agreement.

      "CUT-OFF TIME" has the meaning set forth in Section 10.1 of this
Agreement.

      "DEFINITION AGREEMENT" has the meaning set forth in Section 12.3(a) of
this Agreement.

      "DEED" has the meaning set forth in Section 9.3(a) of this Agreement.

      "DELINQUENT ACCOUNTS RECEIVABLES" has the meaning set forth in Section
10.2(b) of this Agreement.

      "DUE DILIGENCE CONTINGENCY" has the meaning set forth in Section 4.1(a)
of this Agreement.

      "DUE DILIGENCE PERIOD" has the meaning set forth in Section 4.1(a) of
this Agreement.

      "EARNEST MONEY" has the meaning set forth in Section 3.3(a) of this
Agreement.

      "EARNEST MONEY ESCROW" has the meaning set forth in Section 3.3(a) of
this Agreement.

      "EARNEST MONEY ESCROW AGREEMENT" has the meaning set forth in Section
3.3(a) of this Agreement.

      "EMPLOYEE PLAN" means any employment, severance or similar contract or
arrangement (whether or not written) or any plan, policy, fund, program or
contract or arrangement (whether or not written) providing for compensation,
bonus, profit-sharing, stock option, or other stock related rights or other
forms of incentive or deferred compensation, vacation benefits, insurance
coverage (including any self-insured arrangements) health or medical
benefits, disability benefits, worker's compensation, supplemental
unemployment benefits, workers' compensation, supplemental unemployment
benefits, severance benefits and post-employment or retirement benefits
(including compensation, pension, health, medical or life insurance or other
benefits) that (i) is entered into, maintained, administered or directly or
indirectly contributed to, as the case may be, by Seller, any of its
Affiliates and (ii) covers any current Employee, or any former or current
Employee under the Union Contracts.

      "EMPLOYEES" means all individuals who are employed full-time or
part-time at, or otherwise perform services with respect to, the Hotel at the
time in question (other than employees of tenants).

      "ENVIRONMENTAL CLAIMS" means any claim for reimbursement or remediation
expense, contribution, personal injury, property damage or damage to natural
resources made by any Governmental Authority or other Person arising from or
in connection with the presence or

                                      -3-
<PAGE>

release of any Hazardous Substances over, on, in or under the Real Property,
or the violation of any Environmental Laws with respect to the Hotel.

      "ENVIRONMENTAL LAWS" means any Applicable Laws which regulate or
control (i) Hazardous Substances, pollution, contamination, noise, radiation,
water, soil, sediment, air or other environmental media, or (ii) an actual or
potential spill, leak, emission, discharge, release or disposal of any
Hazardous Substances or other materials, substances or waste into water,
soil, sediment, air or any other environmental media, including, without
limitation, (A) the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. Sections 9601 et seq. ("CERCLA"), (B) the Resource
Conservation and Recovery Act, 42 U.S.C. Sections 6901 et seq. ("RCRA"), (C)
the Federal Water Pollution Control Act, 33 U.S.C. Sections 2601 et seq., (D)
the Toxic Substances Control Act, 15 U.S.C. Sections 2601 et seq., (E) the
Clean Water Act, 33 U.S.C. Sections 1251 et seq., (F) the Clean Air Act, 42
U.S.C. Sections 7401 et seq., (G) the Hazardous Materials Transportation Act,
49 U.S.C. Sections 1801 et seq., (H) the Occupational Safety and Health Act,
29 U.S.C. Sections 651 et seq. and similar state and local Applicable Law, as
amended from time to time, and all regulations, rules and guidance issued
pursuant thereto.

      "ENVIRONMENTAL LIABILITIES" means any liabilities or obligations of any
kind or nature imposed on the Person in question pursuant to any
Environmental Laws, including, without limitation, any (i) obligations to
manage, control, contain, remove, remedy, respond to, clean up or abate any
actual or potential release of Hazardous Substances or other pollution or
contamination of any water, soil, sediment, air or other environmental media,
whether or not located on the Real Property and whether or not arising from
the operations or activities with respect to the Hotel, and (ii) liabilities
or obligations with respect to the manufacture, generation, formulation,
processing, use, treatment, handling, storage, disposal, distribution or
transportation of any Hazardous Substances.

      "ENVIRONMENTAL REPORTS" has the meaning set forth in Section 5.1(j) of
this Agreement.

      "EQUIPMENT LEASES" has the meaning set forth in Section 2.1(h) of this
Agreement.

      "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended and the rules and regulations promulgated thereunder.

      "ERISA AFFILIATE" of any entity means any other entity which, together
with such entity, would be treated as a single employer under Section 414 of
the Code.

      "ESCROW AGENT" shall mean Fidelity National Title Insurance Company,
through its offices at Two Park Avenue, Suite 300, New York, NY 10016.

      "EXCHANGE ACT" has the meaning set forth in Section 7.10 of this
Agreement.

      "EXCLUDED PROPERTY" has the meaning set forth in Section 2.2 of this
Agreement.

      "F&B" has the meaning set forth in Section 2.1(e) of this Agreement.

                                      -4-
<PAGE>

      "FAILURE TO CURE NOTICE" has the meaning set forth in Section 4.2(d) of
this Agreement.

      "FF&E" has the meaning set forth in Section 2.1(c) of this Agreement.

      "GENERAL PARTNER" means the general partner of WHLP.

      "GOVERNMENTAL AUTHORITY" means any federal, state or local government
or other political subdivision thereof, including, without limitation, any
agency or entity 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.

      "GP RECOMMENDATION" has the meaning set forth in Section 7.10 of this
Agreement.

      "GUEST LEDGER" means any all charges accrued to the open accounts of
any guests or customers at the Hotel as of the Cut-Off Time for the use and
occupancy of any guest, conference, meeting or banquet rooms or other similar
facilities at the Hotel, any restaurant, bar or banquet services, or any
other goods or services provided in the Ordinary Course of Business by or on
behalf of Seller.

      "HAZARDOUS SUBSTANCES" means any hazardous or toxic substances,
materials or waste, whether solid, semisolid, liquid or gaseous, including,
without limitation, asbestos, polychlorinated biphenyls, petroleum or
petroleum by-products, radioactive materials, radon gas and any other
material or substance which is defined as or included in the definition of a
"hazardous substance", "hazardous waste", "toxic waste" "hazardous material",
"toxic pollutant", "contaminant", "pollutant" or "toxic substance", or words
of similar import, under any Environmental Laws or that could result in the
imposition of liability under any Environmental Laws.

      "HOTEL GP" means St. Francis Hotel Corporation, a Delaware Corporation,
in its capacity as the sole general partner of Seller.

      "IMPROVEMENTS" has the meaning set forth in Section 2.1(b) of this
Agreement.

      "INDEMNIFICATION CAP" has the meaning set forth in Section 14.3(b) of
this Agreement.

      "INDEMNIFICATION CLAIM" has the meaning set forth in Section 14.4(a) of
this Agreement.

      "INDEMNIFICATION DEDUCTIBLE" has the meaning set forth in Section
14.3(b) of this Agreement.

      "INDEMNITEE" has the meaning set forth in Section 14.4(a) of this
Agreement.

      "INDEMNITOR" has the meaning set forth in Section 14.4(a) of this
Agreement.

      "INITIAL DEPOSIT" has the meaning set forth in Section 3.3(a) of this
Agreement.

                                      -5-
<PAGE>

      "INSPECTIONS" has the meaning set forth in Section 4.1(b) of this
Agreement.

      "INTANGIBLE PROPERTY" has the meaning set forth in Section 2.1(1) of
this Agreement.

      "INTENTIONAL SELLER DEFAULT" means an act or failure to act by Seller
with the intent to, and resulting in, (I) a material breach or default by
Seller in any of its covenants and obligations under this Agreement, (ii) the
frustration of one or more Purchaser Closing Conditions, and (iii) the
termination of this Agreement, which breach, default or failure is not cured
within ten (10) Business Days after Seller's receipt of written notice of
such default from Purchaser.

      "KNOWLEDGE" means (i) with respect to Seller, the actual knowledge of
Joseph D. Long, William Reis or Michael Cassidy and expressly excluding the
knowledge of any other shareholder, trustee, partner, member, director,
officer, manager, employee, agent or representative of Seller or any of its
Affiliates, and (ii) with respect to Purchaser, (A) the actual knowledge of
Jonathan D. Gray or Andrew Farbman and expressly excluding the knowledge of
any other shareholder, trustee, partner, member, director, officer, manager,
employee, agent or representative of Purchaser or any of its Affiliates, (B)
any matter disclosed in any exhibits or schedules to this Agreement, and (C)
any matter disclosed in any Seller Due Diligence Materials or any other
documents or materials provided by Seller to Purchaser prior to Closing, and
(D) any matter disclosed in the Purchaser Due Diligence Reports.

      "LAND" has the meaning set forth in Section 2.1(a) of this Agreement.

      "LETTER OF INTENT" means that certain letter, dated December 6, 1999,
between Seller and an affiliate of Purchaser outlining the general terms of
the transaction contemplated in this Agreement.

      "LICENSES AND PERMITS" has the meaning set forth in Section 2.1(k) of
this Agreement.

      "LIMITED PARTNERS" means the limited partners of WHLP.

      "LIMITED PARTNERS APPROVAL" has the meaning set forth in Section 7.10
of this Agreement.

      "LIQUOR LICENSE" has the meaning set forth in Section 7.3 of this
Agreement.

      "LOSSES" means any liability, damage, loss, cost or expense, including,
without limitation, reasonable attorneys' fees and expenses and court costs,
incurred by the Person in question.

      "MANAGEMENT AGREEMENT" has the meaning set forth in Section 2.1(p) of
this Agreement.

      "MANAGER" means St. Francis Hotel Corporation, a Delaware corporation,
in its capacity as manager under the Management Agreement.

      "MATERIAL CASUALTY" has the meaning set forth in Section 13.1(a) of
this Agreement.

                                      -6-
<PAGE>

      "MATERIAL CONDEMNATION" has the meaning set forth in Section 13.2(a) of
this Agreement.

      "MATERIAL CONTRACT" means any Contract requiring aggregate annual
payments in excess of Fifty Thousand Dollars ($50,000) for any year during
the term of such Contract.

      "MULTIEMPLOYER PLAN" means each Employee Plan that is a multiemployer
plan, as defined in Section 3(37) of ERISA.

      "MUTUAL CLOSING CONDITIONS" has the meaning set forth in Section 8.1 of
this Agreement.

      "NEW TRANSACTION AGREEMENT" has the meaning set forth in Section
12.3(a) of this Agreement.

      "NOTICE" has the meaning set forth in Section 15.1(a) of this Agreement.

      "OPERATING AGREEMENTS" has the meaning set forth in Section 2.1(i) of
this Agreement.

      "ORDINARY COURSE OF BUSINESS" means the ordinary course of business
consistent with Seller's past custom and practices for the operation,
maintenance and repair of the Hotel.

      "OUT-OF-POCKET EXPENSES" has the meaning set forth in Section 12.3 of
this Agreement.

      "PERMITTED EXCEPTIONS" has the meaning set forth in Section 4.2(c) of
this Agreement.

      "PERSON" means any natural person, corporation, general or limited
partnership, limited liability company, association, joint venture, trust,
estate, Governmental Authority or other legal entity in its own or a
representative capacity.

      "PERSONAL PROPERTY" means the Property other than the Real Property.

      "PBGC" means the Pension Benefit Guaranty Corporation.

      "PROPERTY" has the meaning set forth in Section 2.1 of this Agreement.

      "PRORATIONS" has the meaning set forth in Section 10.1 of this
Agreement.

      "PURCHASE PRICE" has the meaning set forth in Section 3.1 of this
Agreement.

      "PURCHASER CLOSING CONDITIONS" has the meaning set forth in Section 8.2
of this Agreement.

      "PURCHASER DEFAULT" means: (i) Purchaser's failure to deposit the
Earnest Money within the time period provided in Section 3.3(a); or (ii) a
material breach or default by Purchaser in any of its representations,
warranties, covenants or obligations under this Agreement which breach or
default is not caused by a Seller Default and which breach or default causes
Purchaser to fail to purchase the Property in accordance with the terms of
this Agreement.

                                      -7-
<PAGE>

      "PURCHASER DUE DILIGENCE REPORTS" has the meaning set forth in Section
4.1(d) of this Agreement.

      "PURCHASER INDEMNITEES" means Purchaser and its Affiliates, and each of
their respective shareholders, directors, officers, members, partners,
trustees, employees and agents, and the successors, assigns, heirs and legal
representatives of each of the foregoing.

      "PURCHASER'S INSPECTORS" has the meaning set forth in Section 4.1(b) of
this Agreement.

      "REAL PROPERTY" has the meaning set forth in Section 2.1(b) of this
Agreement.

      "RESPONSE PERIOD" has the meaning set forth in Section 7.11 of this
Agreement.

      "RETAIL MERCHANDISE" has the meaning set forth in Section 2.1(f) of
this Agreement.

      "SAP NOTICE" has the meaning set forth in Section 7.11 of this
Agreement.

      "SEC" has the meaning set forth in Section 7.10 of this Agreement.

      "SELLER ACCESS" has the meaning set forth in Section 7.8 of this
Agreement.

      "SELLER APPROVAL" has the meaning set forth in Section 7.10 of this
Agreement.

      "SELLER APPROVAL DATE" has the meaning set forth in Section 7.10 of
this Agreement.

      "SELLER APPROVAL NOTICE" has the meaning set forth in Section 7.10 of
this Agreement.

      "SELLER CLOSING CONDITIONS" has the meaning set forth in Section 8.3 of
this Agreement.

      "SELLER DEFAULT" means a material breach or default by Seller in any of
its representations, warranties, covenants or obligations under this
Agreement, which default is not caused by a Purchaser Default and which
default is not cured within ten (10) Business Days after Seller's receipt of
written notice of such default from Purchaser.

      "SELLER DUE DILIGENCE MATERIALS" has the meaning set forth in Section
4.1(c) of this Agreement.

      "SELLER INDEMNITEES" means Seller, Starwood, Manager, and their
respective Affiliates, and each of their respective shareholders, directors,
officers, members, partners, trustees, employees and agents, and the
successors, assigns, heirs and legal representatives of each of the foregoing.

      "SELLER'S POSSESSION" means in the actual possession of any officer or
employee of Seller or any of its Affiliates who has direct or supervisory
responsibility for the operation of the Hotel.

                                      -8-
<PAGE>

      "SETTLEMENT STATEMENT" has the meaning set forth in Section 11.1 of
this Agreement.

      "STARWOOD" means Starwood Hotels & Resorts Worldwide, Inc., a Maryland
corporation.

      "STARWOOD BOARD APPROVAL NOTICE" has the meaning set forth in Section
4.3(a) of this Agreement.

      "STARWOOD BOARD APPROVAL PERIOD" has the meaning set forth in Section
4.3(a) of this Agreement.

      "STARWOOD BOARD APPROVAL" has the meaning set forth in Section 4.3(a)
of this Agreement.

      "STARWOOD PROPRIETARY MARKS" has the meaning set forth in Section
2.2(b) of this Agreement.

      "SUPPLIES" has the meaning set forth in Section 2.1(d) of this
Agreement.

      "SURVEY" has the meaning set forth in Section 4.2(b) of this Agreement.

      "SURVEY DEFECTS" has the meaning set forth in Section 4.2(c) of this
Agreement.

      "SURVIVAL PERIOD" has the meaning set forth in Section 14.3(a) of this
Agreement.

      "TAXES" means any federal, state, local or foreign, real property,
personal property, sales, use, room, occupancy, excise, severance, stamp,
payroll, employment, withholding, social security, unemployment, disability,
vault, ad valorem, assessments, value added or other tax, assessments,
levies, charges or fees of any kind whatsoever imposed on Seller or the
Property or any portion thereof by any Governmental Authority, including,
without limitation, any interest, penalty, or addition thereto, but expressly
excluding any (i) federal, state, local or foreign income, capital gain,
capital stock, franchise, profits, estate or gift tax, or (ii) transfer or
similar taxes incurred with respect to the transaction contemplated in this
Agreement.

      "TENANT LEASES" has the meaning set forth in Section 2.1(g) of this
Agreement.

      "TITLE COMMITMENT" has the meaning set forth in Section 4.2(a) of this
Agreement.

      "TITLE COMPANY" means Fidelity National Title Insurance Company,
through its offices at Two Park Avenue, Suite 300, New York, NY 10016.

      "TITLE EXCEPTIONS" has the meaning set forth in Section 4.2(c) of this
Agreement.

      "TITLE OBJECTION LETTER" has the meaning set forth in Section 4.2(c) of
this Agreement.

      "TITLE POLICY" has the meaning set forth in Section 8.2(d) of this
Agreement.

                                      -9-
<PAGE>

      "TITLE IV PLAN" means an Employee Plan subject to Title IV of ERISA
other than any Multiemployer Plan.

      "TRADE PAYABLES" has the meaning set forth in Section 10.1(j) of this
Agreement.

      "2000 CAP EX BUDGET" has the meaning set forth in Section 10.1(m) of
this Agreement.

      "UNION CONTRACTS" has the meaning set forth in Section 2.1(j) of this
Agreement.

      "UNION EMPLOYEES" means any Employees whose employment is subject to
the terms of the Union Contracts.

      "UNPERMITTED EXCEPTIONS" has the meaning set forth in Section 4.2(c) of
this Agreement.

      "WHLP" means Westin Hotels Limited Partnership, a Delaware limited
partnership, the sole limited partner of Seller.

      "WHLP APPROVAL" has the meaning given in Section 7.10 of this Agreement.

      "WHLP PARTNERSHIP AGREEMENT" means the Amended and Restated Agreement
of Limited Partnership of WHLP.

                                 ARTICLE II

                DESCRIPTION OF THE PROPERTY; EXCLUDED PROPERTY

      Section 2.1 DESCRIPTION OF THE PROPERTY. Subject to the terms set forth
in this Agreement, at the Closing, Seller shall sell, convey, transfer,
assign and deliver to Purchaser, and Purchaser shall purchase and accept from
Seller, the property and assets set forth in this Section 2.1, but expressly
excluding the Excluded Property (collectively, the "PROPERTY"):

      (a) LAND. Fee simple title to the land described in SCHEDULE 2.1(a),
together with (i) all appurtenant easements, rights of way, privileges,
licenses and any other rights and interests appurtenant thereto, (ii)
Seller's right, title and interest, if any, in any land in the bed of any
streets or other public ways adjacent to the land described in Schedule
2.1(a) to the center line thereof, and (iii) Seller's right, title and
interest in (A) any condemnation award made with respect to such real
property and (B) any award for damages to such real property by reason of
change of grade of any street or public way adjoining such real property (the
"LAND");

      (b) IMPROVEMENTS. All buildings, structures and improvements located on
or affixed to the Land and all fixtures on the Land which constitute real
property under Applicable Law including, without limitation, those certain
buildings, structures, improvements and fixtures presently situated on, in,
under or hereafter erected, installed or used on, in or under the Land (the
"IMPROVEMENTS" the Land and the Improvements are referred to collectively
herein as the "REAL PROPERTY");

                                      -10-
<PAGE>

      (c) FF&E. All fixtures (other than those which constitute
Improvements), furniture, furnishings, equipment, machinery, vehicles,
appliances, computer hardware, art work and other items of tangible personal
property owned by Seller which are located at the Hotel and used in the
operation of the Hotel (and all replacements thereof purchased prior to the
Closing), or ordered for future use at the Hotel as of the Closing, other
than the Supplies, F&B and Retail Merchandise (the "FF&E");

      (d) SUPPLIES. All china, glassware, silverware; linens; uniforms;
engineering, maintenance, cleaning and housekeeping supplies; matches and
ashtrays; soap and other toiletries; stationery, menus and other printed
materials; and all other similar materials and supplies, which are located at
the Hotel or ordered for future use at the Hotel as of the Closing (the
"SUPPLIES");

      (e) FOOD AND BEVERAGE. All food and beverages (alcoholic and
non-alcoholic) which are located at the Hotel (whether opened or unopened),
or ordered for future use at the Hotel as of the Closing, but expressly
excluding any alcoholic beverages to the extent the sale or transfer of the
same is not permitted under Applicable Law (the "F&B");

      (f) RETAIL MERCHANDISE. All merchandise located at the Hotel,
including, without limitation, the gift shop, pro shop or newsstand
maintained by Seller, and held for sale to guests and customers of the Hotel,
or ordered for future sale at the Hotel as of the Closing (the "RETAIL
MERCHANDISE");

      (g) TENANT LEASES. All leases, subleases, licenses, concessions and
similar agreements granting a real property interest to any other Person for
the use or occupancy of any portion of the Real Property, other than the
Management Agreement and Bookings (the "TENANT LEASES"), together with all
security deposits held by Seller thereunder;

      (h) EQUIPMENT LEASES. All leases and purchase money security agreements
for any equipment, machinery, vehicles, furniture or other personal property
located at the Hotel and used in the operation of the Hotel which are held by
or on behalf of Seller (the "EQUIPMENT LEASES"), together with all deposits
made thereunder, to the extent such Equipment Leases and deposits are
transferable;

      (i) OPERATING AGREEMENTS. All maintenance, service and supply
contracts, credit card service agreements, booking and reservation
agreements, and all other contracts and agreements which are held by Seller
in connection with the operation of the Hotel, other than the Tenant Leases,
Equipment Leases, Licenses and Permits (the "OPERATING AGREEMENTS"), together
with all deposits made or held by Seller thereunder, to the extent such
Operating Agreements and deposits are transferable;

      (j) UNION CONTRACTS. The following union contracts: 1) Garage and
Parking Lot Agreement by and between Westin St. Francis Hotel and Teamster
Automotive Employees Local Union No. 665, effective December 1, 1995 to
November 30, 2000; 2) Collective Bargaining agreement by and between
Operating Engineers Local 39 and San Francisco Hotels Multiemployer Group
through The Westin St. Francis Hotel, effective August 1, 1997 to July 31,
2000; 3) Agreement by and between the International Union of Security
Officers and The Westin

                                      -11-
<PAGE>

St. Francis, effective July 1, 1997 to June 30, 2000; 4) Collective Bargaining
Agreement by and between The Westin St. Francis Hotel and Bay Counties
District Counties District Council of Painters No. 8 and Painters Local Union
No. 4., Effective August 1, 1998 to July 31, 2003; 5) Agreement by and
between The Westin St. Francis and the Textile Processors, Service Trades,
Health Care, Professional and Technical Employees' International Union, Local
#75, effective December 1, 1997 to November 30, 2000; 6) Clerical Agreement
by and between the San Francisco Hotels Multiemployer Group through The
Westin St. Francis and the Professional and Clerical Employees Division of
Freight Checkers, Clerical Employees and Helpers, Local No. 856,
International Brotherhood of Teamsters, effective January 1, 1996 to December
31, 1999 and 7) Collective Bargaining Agreement between Hotels Employees and
Restaurant Employees Union Local 2 and the San Francisco Hotels Multiemployer
Group comprised of the Westin St. Francis Hotels, effective from August 14,
1994 to August 2004, as amended by the Memorandum of Understanding, dated
September 17, 1999 (the "UNION CONTRACTS");

      (k) LICENSES AND PERMITS. All licenses, permits, consents,
authorizations, approvals, registrations and certificates of any Governmental
Authority held by Seller and used in connection with the construction,
ownership, occupancy or operation of the Hotel, to the extent transferable
(the "LICENSES AND PERMITS"), together with any deposits made by Seller
thereunder, to the extent such Licenses and Permits and deposits are
transferable;

      (l) INTANGIBLE PROPERTY. All of the following (A) owned by Seller or
(B) exclusively issued or licensed to Seller and used in connection with the
operation of the Hotel to the extent Seller's rights and interests therein
are transferable: (i) trademarks, trade names, service marks and other
intellectual property rights; (ii) warranties and guaranties held by Seller
pursuant to any Contracts or with respect to any Improvements or Personal
Property; (iii) computer software used in connection with any computer
systems located at the Hotel; (iv) direct dial telephone numbers for the
Hotel; and (v) all goodwill in connection with the ownership, operation and
maintenance of the Hotel, but excluding any name, trademark, servicemark or
logo relating to Starwood Proprietary Marks (as hereinafter defined) (the
"INTANGIBLE PROPERTY");

      (m) BOOKS AND RECORDS. All books and records in Seller's Possession
which relate to the Hotel, other than any legally privileged materials and
attorney work product (the "BOOKS AND RECORDS");

      (n) BOOKINGS. All bookings and reservations for guest, conference,
meeting and banquet rooms or other facilities at the Hotel (the "BOOKINGS"),
together with all deposits held by Seller with respect thereto;

      (o) ACCOUNTS RECEIVABLE. All Current Accounts Receivable (including the
Guest Ledger) as set forth in Section 10.2; and

      (p) MANAGEMENT AGREEMENT. That certain Amended and Restated Management
Agreement, dated August 21, 1986, by and among Seller, Hotel GP and WHLP,
collectively as owner, and Westin Hotel Company, predecessor in interest to
Manager, as manager, as amended by that certain First Amendment to Amended
and Restated Management Agreement dated as of June 2, 1994, as further
amended by that certain Second Amendment to Amended and Restated Management
Agreement dated as of September 1, 1999, as assigned to Manager pursuant to
that

                                      -12-
<PAGE>

certain Assignment of Management Agreement dated as of August 21, 1986 (as so
amended and assigned, the "MANAGEMENT AGREEMENT"), which shall be assumed by
Purchaser at Closing.

      SECTION 2.2 EXCLUDED PROPERTY. Notwithstanding anything to the contrary
in Section 2.1, the property, assets, rights and interests set forth in this
Section 2.2 (the "EXCLUDED PROPERTY") are excluded from the Property:

      (a) CASH. Except for deposits expressly included in Section 2.1, all
cash on hand or on deposit in any house bank, operating account or other
account maintained in connection with the ownership or operation of the Hotel;

      (b) STARWOOD PROPRIETARY PROPERTY. All: (i) trademarks, trade names,
service marks, symbols, logos and other intellectual property rights held by
Starwood, Manager or any of its Affiliates (other than Seller), (the
"STARWOOD PROPRIETARY MARKS"); (ii) Manager's or Starwood's internal
employee, operational and similar manuals; and, (iii) computer hardware and
software pertaining specifically to, and all other rights and interests in,
(a) any Starwood centralized system, including, without limitation, the
Starwood reservation system, property management system and e-mail, internet
and internal computer network systems, and (b) the Starwood Preferred Guest
program and other marketing and advertising programs, except, in each case,
for such rights to use Starwood Proprietary Property as may be granted under
the Management Agreement; and

      (c) THIRD-PARTY PROPERTY. Any fixtures or personal property owned by
(i) the lessor under any Equipment Leases, (ii) the supplier or vendor under
any other Contracts, (iii) the tenant under any Tenant Leases, (iv) any
Employees, or (v) any guests or customers of the Hotel.

                               ARTICLE III

             PURCHASE PRICE; EARNEST MONEY; LIKE-KIND EXCHANGE

      Section 3.1 PURCHASE PRICE. The purchase price for the Property is Two
Hundred Forty-Three Million and no/100 Dollars ($243,000,000.00) (the
"PURCHASE PRICE"), which shall be adjusted at Closing for the Prorations and
the Accounts Receivable pursuant to Sections 10.1 and 10.2, respectively.

      Section 3.2 ALLOCATION OF PURCHASE PRICE. Seller and Purchaser will
agree to an allocation of the Purchase Price among the Land, Improvements and
Personal Property at Closing for federal, state and local tax purposes.
Seller and Purchaser acknowledge and agree that the allocation at Closing
shall represent an arm's length agreement based on the Parties' good faith
judgment as to the fair market value of the Property. Seller and Purchaser
shall file all federal, state and local tax returns, in accordance with such
allocation, as the same may be adjusted pursuant to Sections 10.1 and 10.2
and in accordance with Section 1060 and the regulations promulgated
thereunder. This Section 3.2 shall survive the Closing.

                                  -13-
<PAGE>

      Section 3.3 EARNEST MONEY.

      (a) EARNEST MONEY. Purchaser has deposited with Escrow Agent the amount
of Two Million and no/100 Dollars ($2,000,000.00) (the "INITIAL DEPOSIT"). If
Purchaser does not terminate this Agreement pursuant to the Due Diligence
Contingency, Purchaser shall deposit with Escrow Agent the additional amount
of Eighteen Million and no/100 Dollars ($18,000,000.00) within two (2) days
of the date hereof (the "ADDITIONAL DEPOSIT"; the term "EARNEST MONEY" shall
refer to the Initial Deposit from the date of this Agreement until the date
on which the Additional Deposit is made or required to have been made by
Purchaser, and thereafter shall refer to the Initial Deposit and Additional
Deposit, collectively. The Earnest Money shall be non-refundable to
Purchaser, except as otherwise expressly provided in this Agreement. The
Earnest Money shall be held by Escrow Agent in an escrow (the "EARNEST MONEY
ESCROW") established pursuant to an escrow agreement in the form attached
hereto as EXHIBIT A, (the "EARNEST MONEY ESCROW AGREEMENT") entered into
among Seller and Purchaser (or their respective counsel) and Escrow Agent,
and delivered to Escrow Agent concurrently with the Initial Deposit.

      (b) INVESTMENT OF EARNEST MONEY. The Earnest Money shall be invested in
a federally insured interest-bearing account pursuant to the Earnest Money
Escrow Agreement, and all interest earned on the Earnest Money shall be
deemed additional Earnest Money. All fees, costs and expenses of the Earnest
Money Escrow shall be shared equally between Seller and Purchaser, except
that Purchaser shall pay any fees, costs or expenses with respect to the
investment of the Earnest Money and Purchaser shall bear the risk of loss of
the Earnest Money.

      (c) DISBURSEMENT OF EARNEST MONEY. At Closing, Purchaser shall cause
Escrow Agent to disburse the Earnest Money to Seller, and Purchaser shall
receive a credit against the Purchase Price in the amount of the Earnest
Money disbursed to Seller, or if this Agreement is terminated, the Earnest
Money shall be disbursed by Escrow Agent to Seller or Purchaser in accordance
with the terms of this Agreement.

      (d) LETTER OF CREDIT. Notwithstanding the foregoing, the Earnest Money
may, at Purchaser's option, be in the form of an irrevocable standby letter
of credit having an expiration date of not earlier than December 31, 2000,
issued by The Chase Manhattan Bank in favor of Seller and deposited with
Escrow Agent in accordance with Section 3.3(a). If Purchaser elects to
deposit the Earnest Money in the form of a letter of credit pursuant to this
Section 3.3(d), Purchaser shall cause any such letter(s) of credit to be
replaced with cash at or prior to the Closing.

      Section 3.4 PAYMENT OF PURCHASE PRICE. At Closing, Purchaser shall pay
to Seller by wire transfer of immediately available funds an amount equal to
the Purchase Price, PLUS or MINUS the Prorations (as the case may be)
pursuant to Section 10.1, PLUS the Current Accounts Receivables pursuant to
Section 10.2, and LESS the Earnest Money disbursed to Seller. Purchaser shall
cause the wire transfer of funds to be received by Seller no later than 4:00
p.m. (Eastern Time) on the Closing Date. If Seller receives the wire transfer
of funds from Purchaser after 4:00 p.m. (Eastern Time) and is unable to
reinvest such funds on the Closing Date, then as a condition to the
completion of the Closing, Purchaser shall pay interest on the amount of such

                                    -14-
<PAGE>

funds from the Closing Date until the next Business Day at the "Prime Rate"
charged by Seller's bank.

                                 ARTICLE IV

                       DUE DILIGENCE; TITLE AND SURVEY

      Section 4.1 DUE DILIGENCE.

      (a) DUE DILIGENCE CONTINGENCY. Purchaser shall have the period from the
date of the Letter of Intent until 5:00 p.m. (Eastern Time) on January 18,
2000 (the "DUE DILIGENCE PERIOD"), to perform its due diligence review of the
Property and all matters related thereto which Purchaser deems advisable,
including, without limitation, with respect to engineering, environmental,
title, survey, financial, operational and legal compliance matters. If
Purchaser, in its sole discretion, is not satisfied with the results of its
due diligence review of the Property for any reason whatsoever, Purchaser
shall have the right to terminate this Agreement in accordance with Sections
12.2 and 12.3 by providing written notice to Seller prior to the expiration
of the Due Diligence Period (the "DUE DILIGENCE CONTINGENCY"). If Purchaser
does not terminate this Agreement pursuant to the Due Diligence Contingency
prior to the expiration of the Due Diligence Period in accordance with this
Section 4.1(a), Purchaser shall be deemed to have waived its rights to
terminate this Agreement pursuant to the Due Diligence Contingency, in which
case the Earnest Money shall be non-refundable to Purchaser, except as
otherwise expressly provided in this Agreement.

      (b) DUE DILIGENCE INSPECTIONS. Purchaser, through its employees, agents
and representatives ("PURCHASER'S INSPECTORS"), shall have the right to
perform such examinations, tests, investigations and studies of the Property
(the "INSPECTIONS") as Purchaser reasonably deems advisable, in accordance
with this Section 4.1, and Seller shall provide reasonable access to the
Property for Purchaser's Inspectors to perform the Inspections; provided,
however, that (i) Purchaser shall provide Seller with at least twenty-four
(24) hours prior notice of each of the Inspections; (ii) Purchaser's
Inspectors shall be accompanied by an employee, agent or representative of
Seller; provided, however, that Seller shall be deemed to have waived its
right to have an employee, agent or representative present if Seller fails to
make such person available to Purchaser within twenty-four (24) hours after
receipt from Purchaser of the notice required pursuant to clause (i)
immediately preceeding; (iii) the Inspections shall be conducted by
Purchaser's Inspectors during normal business hours; (iv) Purchaser's
Inspectors shall not perform any drilling, coring or other invasive testing,
without Seller's prior written consent, which consent may be withheld in
Seller's sole discretion; and (v) the Inspections shall not unreasonably
interfere with the operations of the Hotel, and Purchaser's Inspectors shall
comply with Seller's requests with respect to the Inspections to minimize
such interference.

      (c) SELLER'S DUE DILIGENCE MATERIALS. Purchaser acknowledges receipt of
the due diligence materials set forth in SCHEDULE A of the Letter of Intent.
Seller shall provide to Purchaser promptly upon request by Purchaser such
additional due diligence materials in Seller's Possession relating to the
Property which are reasonably requested by Purchaser. (All due diligence
documents and materials provided by Seller to Purchaser pursuant to the
Letter of

                                      -15-
<PAGE>

Intent or this Agreement are referred to collectively herein as the "SELLER
DUE DILIGENCE MATERIALS"). This Section 4.1(c) shall survive the Closing.

      (d) PURCHASER'S DUE DILIGENCE REPORTS. If requested by Seller,
Purchaser shall provide a copy to Seller of all non-privileged, final
environmental, engineering and other physical condition studies, reports, and
assessments prepared by any Person for or on behalf of Purchaser in
connection with the Inspections (the "PURCHASER DUE DILIGENCE REPORTS").

      (e) RELEASE AND INDEMNIFICATION. Purchaser shall, at its cost and
expense, repair any damage to the Property or any other property owned by a
Person other than Purchaser arising from or in connection with the
Inspections, and restore the Property or such other third-party property to
the same condition as existed prior to such Inspections. Purchaser hereby
releases the Seller Indemnitees for any Losses incurred by any of the
Purchaser Indemnitees directly arising from or in connection with the
Inspections, except for Seller's gross negligence or intentional misconduct.
Purchaser shall defend, indemnify and hold harmless the Seller Indemnitees
from and against any Losses incurred by any Seller Indemnitees arising from
or in connection with the Inspections. This Section 4.1(e) shall survive the
termination of this Agreement and the Closing.

      Section 4.2 TITLE AND SURVEY.

      (a) TITLE COMMITMENT. Seller shall obtain and deliver to Purchaser no
later than ten (10) days prior to the expiration of the Due Diligence Period,
a commitment for a CLTA owner's title insurance policy from the Title Company
for the Real Property, showing Seller as the owner in fee simple of the Real
Property (the "TITLE COMMITMENT"), together with a copy of all documents
referenced therein obtained by the Title Company.

      (b) SURVEY. Seller shall obtain and deliver to Purchaser, no later than
five (5) days prior to the expiration of the Due Diligence Period, a survey
of the Real Property, dated no earlier than the date of this Agreement,
prepared by a duly licensed surveyor, in accordance with the ALTA/ACSM
Minimum Standard Detail Requirements for Land Title Surveys, certified to
Purchaser and the Title Company (the "SURVEY").

      (c) IDENTIFICATION OF UNPERMITTED EXCEPTIONS. If (i) the Title
Commitment discloses any exceptions to title (the "TITLE EXCEPTIONS") not
acceptable to Purchaser, or (ii) the Survey discloses any 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 matters (the "SURVEY
DEFECTS") not acceptable to Purchaser, Purchaser shall provide written notice
to Seller of Purchaser's objections to Title Exceptions and Survey Defects
(the "TITLE OBJECTION LETTER") promptly after determining that such matters
are not acceptable, but in no event later than the expiration of the Due
Diligence Period. (The Title Exceptions and Survey Defects set forth in any
Title Objection Letter are referred to collectively herein as the
"UNPERMITTED EXCEPTIONS". All (i) Title Exceptions disclosed in the Title
Commitment and all matters disclosed on the Survey in each case not objected
to by Purchaser in any Title Objection Letter, (ii) rights of tenants under
the Tenant Leases, as tenants only without any purchase options or rights of
first refusal with respect to the Property, and (iii) all liens and
encumbrances created by Purchaser are referred to

                                      -16-
<PAGE>

collectively herein as the "PERMITTED EXCEPTIONS".) If Purchaser does not
provide a Title Objection Letter to Seller prior to the expiration of the Due
Diligence Period, Purchaser shall be deemed to have waived all objections to
any Title Exceptions and all Survey Defects, in which case all such Title
Exceptions and Survey Defects shall be deemed Permitted Exceptions.

      (d) REMOVAL OF UNPERMITTED EXCEPTIONS. Seller shall have no obligation
to cure any Unpermitted Exceptions, except for (i) any mortgages, deeds of
trust or other security interests for any financing incurred by Seller which
is not assumed by Purchaser under this Agreement, (ii) Taxes which would
delinquent if unpaid at Closing, and (iii) any other Unpermitted Exceptions
which may be removed by payment of a liquidated amount which in the aggregate
does not exceed One Million and no/100 Dollars ($1,000,000.00). Seller may
cure any Unpermitted Exceptions by removing such Unpermitted Exceptions from
title or causing the Title Company to waive or commit to insure over such
Unpermitted Exception on the Title Policy in a manner reasonably acceptable
to Purchaser and its lenders. If Seller (i) elects not to cure any
Unpermitted Exception(s) (other than the Unpermitted Exceptions Seller is
required to cure under this Section 4.2(d)) or (ii) determines, in its sole
discretion, that it will not be able to cure any Unpermitted Exception(s)
prior to Closing, Seller shall provide written notice to Purchaser of any
such uncured Unpermitted Exception(s) (the "FAILURE TO CURE NOTICE") within
ten (10) Business Days of receipt of a Title Objection Letter, in which case
Purchaser shall have the option, to be exercised by delivery of written
notice to Seller within five (5) Business Days after delivery of the Failure
to Cure Notice, to (i) terminate this Agreement, in accordance with Sections
12.2 and 12.3, or (ii) proceed to Closing under this Agreement and accept
title to the Real Property, subject to such uncured Unpermitted Exception(s)
(which shall thereafter be deemed to be Permitted Exceptions), without any
credit against the Purchase Price for any such uncured Unpermitted
Exception(s). If Purchaser does not terminate this Agreement under clause (i)
of the preceding sentence within such five (5) Business Day period, Purchaser
shall be deemed to have elected the option in clause (ii) of the preceding
sentence.

      (e) OTHER TITLE COMPANY. If the Title Company does not agree to remove,
waive or insure over any Unpermitted Exception(s), but another nationally
recognized title insurance company reasonably acceptable to Purchaser and its
lenders is willing to issue the Title Policy without such Unpermitted
Exception(s), then Seller shall have the right to obtain, and Purchaser shall
accept, a Title Policy from such other title insurance company which
otherwise shall satisfy the requirements of Section 8.2(d) (in which case the
term "Title Company" shall be deemed to refer to such other title insurance
company, and term "Escrow Agent" shall be deemed to refer to the escrow agent
of such other title insurance company for all purposes in this Agreement).

      (f) EXTENSION OF CLOSING DATE. If Seller is unable to cure any
Unpermitted Exceptions prior to Closing, Seller shall have the right to
postpone the Closing and extend the Closing Date for up to thirty (30) days
by providing written notice to Purchaser no later than five days prior to the
originally scheduled closing date; PROVIDED, HOWEVER, that in no event may
the Closing Date be extended beyond June 26, 2000.

      Section 4.3 Starwood Board Approval

      (a) STARWOOD'S BOARD APPROVAL. Purchaser acknowledges and agrees that
Seller's obligations under this Agreement shall be subject to Seller
obtaining the approval of Starwood's

                                      -17-
<PAGE>

board of directors or a duly authorized executivecommittee (the "STARWOOD
BOARD APPROVAL"). Seller shall provide written notice to Purchaser promptly
upon obtaining the Starwood Board Approval (the "STARWOOD BOARD APPROVAL
NOTICE"). If Seller does not provide the Starwood Board Approval Notice to
Purchaser on or before January 21, 2000 (the "STARWOOD BOARD APPROVAL
PERIOD"), Seller shall be deemed not to have obtained the Starwood Board
Approval, and Purchaser and Seller shall have the right to terminate this
Agreement after the expiration of the Starwood Board Approval Period and
prior to receipt thereafter of the Starwood Board Approval Notice, by
providing written notice to the other, in which case Escrow Agent shall
refund the Earnest Money to Purchaser, and Seller and Purchaser shall have no
further rights or obligations under this Agreement, except those which
expressly survive such termination.

                                   ARTICLE V

                     SELLER'S REPRESENTATIONS AND WARRANTIES

      Section 5.1 REPRESENTATIONS AND WARRANTIES. To induce Purchaser to
enter into this Agreement and to consummate the transaction contemplated
herein, Seller hereby makes the representations and warranties in this
Section 5.1, subject to the limitations set forth in Sections 5.2, 5.3 and
5.4, upon which Seller acknowledges and agrees that Purchaser is entitled to
rely.

      (a) ORGANIZATION AND POWER. Seller is duly formed or organized, validly
existing, in good standing in the jurisdiction of its formation or
organization, and is qualified to do business in the jurisdiction in which
the Hotel is located, and has all requisite power and authority to own and
operate the Hotel as currently owned and operated.

      (b) AUTHORITY AND BINDING OBLIGATION. Subject to the Seller Approval
and Starwood Board Approval, (i) Seller has full power and authority to
execute and deliver this Agreement and all documents now or hereafter to be
executed and delivered by Seller under this Agreement, and to perform all
obligations arising under this Agreement and such other documents, (ii) the
execution by the undersigned on behalf of Seller, and the delivery and
performance of this Agreement by Seller has been duly and validly authorized
by all necessary action on the part of Seller, and (iii) this Agreement and
such other documents now or hereafter to be executed and delivered by Seller
under this Agreement, when executed and delivered, will each constitute the
legal, valid and binding obligations of Seller enforceable against Seller in
accordance with its terms.

      (c) CONSENTS AND APPROVALS; NO CONFLICTS. Subject to receipt of the
Seller Approval and the recordation of the Deed and except as disclosed in
SCHEDULE 5.1(c), (i) no filing with, and no permit, authorization, consent or
approval of, any Governmental Authority or other Person is necessary for the
consummation by Seller of the transaction contemplated by this Agreement,
except to the extent the failure to obtain such permit, authorization,
consent or approval would not have a material adverse effect on the ownership
or operation of the Hotel, and (ii) neither the execution and delivery of
this Agreement by Seller, nor the consummation by Seller of the transaction
contemplated under this Agreement, nor compliance by Seller with any of the
terms of this Agreement will: (A) violate any provision of Seller's
organizational or governing documents; (B) violate any Applicable Law to
which Seller is subject; or (C) result in a violation

                                      -18-
<PAGE>

or breach of, or constitute a default under any of the Material Contracts, or
(D) result in the creation or imposition of any lien or encumbrance on the
Property or any portion thereof.

      (d) TITLE TO PERSONAL PROPERTY. Except as set forth in SCHEDULE 5.1(d),
Seller has not pledged, assigned, hypothecated or transferred any of its
right, title or interest in any Personal Property, and Seller has good and
valid title to all tangible Personal Property, which in each case shall be
free and clear of all liens and encumbrances as of the Closing.

      (e) CONDEMNATION. Seller has not received any written notice of any
condemnation or other proceedings in eminent domain, and to Seller's
Knowledge, no such condemnation or eminent domain proceedings are threatened
or pending against Seller or the Property or any portion thereof.

      (f) COMPLIANCE WITH APPLICABLE LAW. Except as set forth in Section
5.1(j) and SCHEDULE 5.1(f), Seller has not received any written notice of a
violation of any Applicable Law with respect to the Hotel which has not been
cured or dismissed.

      (g) LITIGATION. Except as set forth in Section 5.1(h) and 5.1(j) and in
SCHEDULE 5.1(g), Seller has not (i) been served with any court filing in any
litigation with respect to the Hotel in which Seller is named a party, or
(ii) received written notice of any charge or complaint from any Governmental
Authority or other Person pursuant to any administrative, arbitration or
similar adjudicatory proceeding with respect to the Hotel which has not been
settled or dismissed and to Seller's Knowledge, there are no actions, suits
or proceedings pending against Seller or the Property or affecting any of
Seller's rights with respect to all or any portion of the Property, before or
by any federal, state, municipal or other governmental agency or
instrumentality, nor has Seller received any written notice of any such
action, suit or proceeding.

      (h)   EMPLOYEES/BENEFIT PLANS.

            (i)   Except for the Union Contracts, Seller is not a party to any
      collective bargaining agreement with any labor union. None of the
      Employees are employed by Seller. Seller has made available to Purchaser a
      correct and complete copy of the Union Contracts (including all
      amendments, modifications and other agreements with respect thereto).

           (ii) Except as set forth in SCHEDULE 5.1(h), Seller has not (i) been
      served with any court filing in any litigation with respect to the
      Employees in which Seller is a named party, or (ii) received written
      notice from any Employee, Governmental Authority or other Person making a
      formal charge, complaint, or request for a grievance or arbitration
      proceeding against Seller alleging a breach or default under the Union
      Contracts or a violation of any Applicable Law relating to the employment
      or service relationship of the Employees.

           (iii) Schedule 5.1(h)(iii) identifies each Employee Plan.

           (iv)  No Employee Plan is a Title IV Plan.

                                      -19-
<PAGE>

            (v) The assets of the Seller are not now, nor will they after the
      passage of time be, subject to any lien imposed under code Section
      412(m) by reason of a failure of any of the Seller, or its Affiliates
      to make timely installments or other payments required under Code
      Section 412.

            (vi) Each Employee Plan has been maintained in substantial
      compliance with its terms and with the requirements prescribed by any
      and all applicable statutes, orders and regulations, including but not
      limited to ERISA and the Code.

            (vii) Neither the Seller nor any of its Affiliate has any current
      or projected liability in respect of post-employment or post-retirement
      health or medical or life insurance benefits for retired, Employees,
      except as required to avoid excise tax under Section 4980B of the Code.

            (viii) There is no contract, plan or arrangement (written or
      otherwise) covering any Employee that, individually or collectively,
      could give rise to the payment of any amount that would not be
      deductible pursuant to the terms of Section 280G of the Code.

            (ix) No Employee will become entitled to any bonus, retirement,
      severance, job security or similar benefit or enhanced such benefit
      (including acceleration of vesting or exercise of an incentive award)
      as a result of the transactions contemplated hereby.

      (i) TAXES. Except as disclosed in SCHEDULE 5.1(i), (i) all Taxes
imposed on Seller which would be delinquent if unpaid are paid in full or
will be prorated at Closing as part of the Prorations pursuant to Section
10.1, (ii) Seller has not received any written notice for an audit of any
Taxes which is pending, and (iii) Seller is not currently contesting any
Taxes.

      (j) ENVIRONMENTAL MATTERS. SCHEDULE 5.1(j) sets forth a correct and
complete list of all non-privileged environmental assessments, reports and
studies relating to the Hotel in Seller's Possession or Seller's control (the
"ENVIRONMENTAL REPORTS"), and Seller has made available to Purchaser a true
and complete copy of the Environmental Reports. Seller has not received any
written notice from any Governmental Authority or other Person of any
Environmental Claims, Environmental Liabilities or violation of any
Environmental Laws with respect to the Hotel or any other Property. To
Seller's Knowledge, there has been no material violation of any Environmental
Laws at or relating to the Property, except to the extent, if any, described
in the Environmental Reports.

      (k) PERMITS. SCHEDULE 5.1(k) sets forth all of the Licenses and Permits
held by Seller which are necessary for the ownership, use, maintenance and
operation of the Hotel as currently owned and operated and, as applicable, to
the other Property and, except as specifically set forth in SCHEDULE 5.1(k),
Seller has made available to Purchaser a true and complete copy of each of
the Licenses and Permits. Seller has not received any written notice from any
Governmental Authority or other Person of (i) any violation, non-renewal,
suspension or revocation of any Licenses and Permits with respect to the
Hotel that has not been dismissed or cured, or (ii) any failure by Seller to
obtain any License or Permit required for the ownership, maintenance, use,
occupancy or operation of the Hotel or, as applicable, other Property, that
has not been dismissed

                                      -20-
<PAGE>

or cured. To Seller's Knowledge, each License and Permit set forth in
Schedule 5.1(k) is in good standing and in full force and effect

      (l) TENANT LEASES. SCHEDULE 5.1(l) sets forth a correct and complete
list of the Tenant Leases and Seller has delivered to Purchaser a true and
complete copy of the Tenant Leases (including all amendments, modifications
and other agreements with respect thereto). Except as set forth in SCHEDULE
5.1(l): (i) Seller has neither given nor received any written notice of any
breach or default under any of the Tenant Leases and, to Seller's Knowledge,
there are no material defaults under any of the Tenant Leases by any of the
parties thereunder; (ii) no tenant under any Tenant Lease has paid rent for
more than one month in advance or claims or is entitled to any offset against
rent; (iii) Seller is not required to perform any decorating or alterations
or any other work in any tenant's space or furnish any equipment for any
tenant under any Tenant Lease; (iv) no tenant under any Tenant Lease has an
option to purchase the Property or any portion thereof; (v) there are no
security deposits under any Tenant Leases; (vi) Seller has not assigned any
of its rights under any of the Tenant Leases; (vii) there are no brokerage
commissions or finder's fees payable with respect to the current or renewal
term of any of the Tenant Leases or the negotiation of any new Tenant Lease;
and (viii) there are no pending actions or proceedings instituted against
Seller by any tenant under any Tenant Lease.

      (m) CONTRACTS. SCHEDULE 5.1(m) sets forth a correct and complete list
of the Material Contracts and Seller, to Seller's Knowledge, has made
available to Purchaser a true and complete copy of each of the Contracts
(including all amendments, modifications and other agreements with respect
thereto). Except as set forth on SCHEDULE 5.1(m), Seller has neither given
nor received any written notice of any breach or default under any of the
Material Contracts which has not been cured and, to Seller's Knowledge, there
are no defaults under any of the Material Contracts by any of the parties
thereunder.

      (n) MANAGEMENT AGREEMENTS. Except for the Management Agreement, Seller
is not a party to any management, franchise, license, concession or other
agreement for the management or operation of the Hotel.

      (O) BOOKINGS. SCHEDULE 5.1(o) sets forth a correct list of all Bookings
for the Hotel as of a date which is not earlier than ten (10) Business Days
prior to the date of this Agreement, which shall be updated at Closing to a
date which is not earlier than ten (10) Business Days prior to Closing;
provided, however, that such list of Bookings shall be redacted to exclude
all information identifying the particular Persons holding such Bookings.

      (p) INSURANCE. SCHEDULE 5.1(p) sets forth a correct and complete list
of each insurance policy maintained by Seller with respect to the Hotel.

      (q) FINDERS AND INVESTMENT BROKERS. Except for the Broker, Seller has
not dealt with any Person who has acted, directly or indirectly, as a broker,
finder, financial adviser or in such other capacity for or on behalf of
Seller in connection with the transaction contemplated by this Agreement in a
manner which would entitle such Person to any fee or commission in connection
with this Agreement or the transaction contemplated in this Agreement.

                                      -21-
<PAGE>

      (r) FOREIGN PERSON. Seller is not a "foreign partnership" for purposes
of the withholding provisions of Section 1445 of the Code.

      (s) REAL PROPERTY AND IMPROVEMENTS. The Real Property and the
Improvements constitute all of the real property and improvements owned by
Seller. Except as provided in this Agreement, the Real Property is not
subject to any outstanding contract of sale or purchase option in favor of
any Person.

      (t) EQUIPMENT LEASES. Other than the equipment leases set forth in
SCHEDULE 5.1(t), there are no other equipment leases to which Seller is a
party affecting the ownership, use, operation or maintenance of the Property
or affecting the existence, use, ownership, occupancy, operation and/or
maintenance of any personal property used in the operation of the Hotel.

      (u) BANKRUPTCY. No insolvency proceeding of any character (including
bankruptcy, receivership, reorganization, composition or arrangement with
creditors (including any assignment for the benefit of creditors)), voluntary
or involuntary, relating to Seller or the Property is pending, or, to
Seller's Knowledge, is being threatened against Seller by any Person.

      (v) CONSTRUCTION DISPUTES. Except as set forth on Schedule 5.1(v), to
Seller's Knowledge, there are no disputes pending between Seller and any
mechanic or materialman with respect to work or materials furnished to the
Hotel, and to Seller's Knowledge no work which has been performed or
materials which have been supplied is likely to give rise to such a dispute.
At the Closing, there will be no unpaid bills with respect to any work or
materials furnished to the Hotel under any Material Contract which, if
unpaid, could result in a mechanics' or materialmen's lien being filed on the
Hotel.

      (w) TRANSIENT GUESTS. As of the date hereof, there are no guests at the
Hotel who have maintained occupancy at the Hotel for a period in excess of
thirty (30) consecutive days.

      (x) PREPAID FEES AND DEPOSITS. SCHEDULE 5.1(x) sets forth a list of
each prepaid fee, reservation, advanced payment and deposit in excess of
$10,000.00 relating to the Hotel.

      (y) TRADE ASSOCIATIONS. SCHEDULE 5.1(y) sets forth all trade
associations to which Seller or Manager belongs and the respective dues and
fees therefor.

      (z) FINANCIAL AND OPERATING STATEMENTS. Seller has furnished Purchaser
with true, correct and complete copies of the annual financial statements for
the Hotel for the year ended December 31, 1998 (collectively, the "FINANCIAL
STATEMENTS"), and unaudited monthly operating statements of the Hotel for
January through December 31, 1999 (collectively, the "OPERATING STATEMENTS").
The Financial Statements and Operating Statements fairly present the
financial condition and results from operations of the Hotel. To Seller's
Knowledge, no event, act or condition has occurred which has had (or could
reasonably be expected to result in) a material adverse change in the
financial condition of the Hotel, since the date of the most recent Financial
Statements and Operating Statements delivered to Purchaser.

      (aa) TAXES. Seller has paid, or by the Closing date will pay, all Taxes
due and payable in connection with the ownership and operation of the
Property on or before the Closing Date.

                                      -22-
<PAGE>

Seller (i) is not a party to any action orproceeding to abate any Taxes, nor
is aware of any proceeding by any governmental authority for enforcement of
collection of Taxes, and (ii) has not granted any waiver of any statute of
limitation with respect to, or any extension of a period for, the assessment
of any Taxes.

      Section 5.2 LIMITATION ON SELLER'S REPRESENTATIONS AND WARRANTIES.
PURCHASER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS OTHERWISE EXPRESSLY SET
FORTH IN THIS AGREEMENT OR ANY CLOSING DOCUMENT, (I) THE PURCHASE OF THE
PROPERTY SHALL BE ON AN "AS IS", "WHERE IS", "WITH ALL FAULTS BASIS", SUBJECT
TO REASONABLE WEAR AND TEAR FROM THE DATE OF THIS AGREEMENT UNTIL CLOSING,
AND (II) NEITHER SELLER, STARWOOD, MANAGER OR ANY OF THEIR AFFILIATES, NOR
ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, MANAGERS, EMPLOYEES, AGENTS OR
REPRESENTATIVES, NOR ANY PERSON PURPORTING TO REPRESENT ANY OF THE FOREGOING,
HAVE MADE ANY REPRESENTATION, WARRANTY, GUARANTY, PROMISE, PROJECTION OR
PREDICTION WHATSOEVER WITH RESPECT TO THE HOTEL OR ANY ASPECT THEREOF OR THE
PROPERTY OR ANY PORTION THEREOF, WRITTEN OR ORAL, EXPRESS OR IMPLIED, ARISING
BY OPERATION OF LAW OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR ANY REPRESENTATION
OR WARRANTY AS TO (A) THE CONDITION, QUANTITY, QUALITY, USE, OCCUPANCY OR
OPERATION OF THE PROPERTY OR ANY PORTION THEREOF, (B) THE PAST, PRESENT OR
FUTURE REVENUES OR EXPENSES WITH RESPECT TO THE HOTEL, (C) THE COMPLIANCE OF
THE PROPERTY OR ANY PORTION THEREOF OR THE OPERATION OF THE HOTEL WITH ANY
ZONING REQUIREMENTS, BUILDING CODES OR OTHER APPLICABLE LAW, OR (D) THE
ACCURACY OF ANY ENVIRONMENTAL REPORTS OR OTHER INFORMATION SET FORTH IN THE
SELLER DUE DILIGENCE MATERIALS PROVIDED TO PURCHASER WHICH WERE PREPARED FOR
OR ON BEHALF OF SELLER. PURCHASER ACKNOWLEDGES AND AGREES THAT PURCHASER IS
NOT RELYING ON ANY STATEMENT MADE OR INFORMATION PROVIDED TO PURCHASER BY
SELLER, STARWOOD, MANAGER OR ANY OF THEIR AFFILIATES, OR ANY OF THEIR
RESPECTIVE DIRECTORS, MANAGERS, OFFICERS, EMPLOYEES, AGENTS OR
REPRESENTATIVES, OR ANY PERSON PURPORTING TO REPRESENT ANY OF THE FOREGOING,
EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY MADE BY SELLER IN
THIS AGREEMENT.

                        Purchaser's Initials  ________________

      Section 5.3 AMENDMENT TO SCHEDULES. Notwithstanding anything to the
contrary in this Agreement, Seller shall have the right to amend and
supplement the schedules to this Agreement from time to time prior to Closing
to the extent Seller did not have Knowledge as of the date of this Agreement
of the matter being disclosed in such amendment or supplement by providing a
written copy of such amendment or supplement to Purchaser; provided, however,
that any amendment or supplement to the schedules to this Agreement made
after the expiration of the Due Diligence Period shall have no effect for the
purposes of determining whether the

                                      -23-
<PAGE>

Purchaser Closing Conditions, including, without limitation, Sections 8.2(b)
and 8.2(c), have been satisfied, but shall have effect only for the purposes
of limiting the defense and indemnification obligations of Seller for the
inaccuracy or untruth of the representation or warranty qualified by such
amendment or supplement.

      Section 5.4 EFFECT OF PURCHASER'S KNOWLEDGE. If Purchaser has Knowledge
prior to Closing of a breach of any representation or warranty made by Seller
in this Agreement and Purchaser nevertheless elects to close this
transaction, such representation or warranty by Seller with respect to such
matter shall be deemed to be modified to reflect such Purchaser's Knowledge.

                                   ARTICLE VI

                   PURCHASER'S REPRESENTATIONS AND WARRANTIES

      Section 6.1 REPRESENTATIONS AND WARRANTIES. To induce Seller to enter
into this Agreement and to consummate the transaction contemplated hereby,
Purchaser hereby makes the representations and warranties in this Section
6.1, subject to the limitation in Section 6.2, upon which Purchaser
acknowledges and agrees that Seller is entitled to rely.

      (a) ORGANIZATION AND POWER. Purchaser is duly organized, validly
existing and in good standing under the laws of the State of Delaware, and
has all requisite power and authority to own, lease and operate its
properties and to carry on its business as now being conducted.

      (b) AUTHORITY AND BINDING OBLIGATION. (i) Purchaser has full power and
authority to execute and deliver this Agreement and all documents now or
hereafter to be executed and delivered by Purchaser under this Agreement, and
to perform all obligations arising under this Agreement and such other
documents, (ii) the execution by the undersigned on behalf of Purchaser, and
the delivery and performance of this Agreement by Purchaser has been duly and
validly authorized by all necessary partnership action on the part of
Purchaser, and (iii) this Agreement and such other documents now or hereafter
to be executed and delivered by Purchaser under this Agreement, when executed
and delivered, will each constitute the legal, valid and binding obligations
of Purchaser enforceable against Purchaser in accordance with its terms,
except to the extent Seller itself is in default hereunder.

      (c) CONSENTS AND APPROVALS; NO CONFLICTS. (i) no filing with, and no
permit, authorization, consent or approval of, any Governmental Authority or
other Person is necessary for the consummation by Purchaser of its
obligations under this Agreement, and (ii) neither the execution and delivery
of this Agreement by Purchaser, nor the consummation by Purchaser of the
transaction contemplated under this Agreement, nor compliance by Purchaser
with any of the terms of this Agreement will: (A) violate any provision of
the organizational or governing documents of Purchaser; (B) violate any
Applicable Law to which Purchaser is subject; or (C) result in a violation or
breach of or constitute a default under any contract, agreement or other
instrument or obligation to which Purchaser is a party or by which any of
Purchaser's properties are subject.

                                      -24-
<PAGE>

      (d) FINDERS AND INVESTMENT BROKERS. Except for Broker, Purchaser has
not dealt with any Person who has acted, directly or indirectly, as a broker,
finder, financial adviser or in such other capacity for or on behalf of
Purchaser in connection with the transaction contemplated by this Agreement
in any manner which would entitle such Person to any fee or commission in
connection with this Agreement or the transaction contemplated in this
Agreement.

      Section 6.2 EFFECT OF SELLER'S KNOWLEDGE. If Seller has Knowledge prior
to Closing of a breach of any representation or warranty made by Purchaser in
this Agreement and Seller nevertheless elects to close this transaction, such
representation or warranty by Purchaser with respect to such matter shall be
deemed to be modified to reflect such Seller's Knowledge.

                                  ARTICLE VII

                                   COVENANTS

      Section 7.1 CONFIDENTIALITY.

      (a) DISCLOSURE OF CONFIDENTIAL INFORMATION; PUBLIC ANNOUNCEMENTS.
Seller and Purchaser shall keep confidential and not make any public
announcement or disclose to any Person the existence or any terms of this
Agreement, any information disclosed by the Inspections or in the Seller Due
Diligence Materials or Purchaser Due Diligence Reports, and any other
documents, materials, data or other information with respect to the Hotel
which is not generally known to the public (the "CONFIDENTIAL INFORMATION")
provided, however, that Seller and Purchaser shall be permitted to (i)
disclose any Confidential Information to the extent required by court order
or under Applicable Law, (ii) make a public announcement regarding the
transaction contemplated in this Agreement after the expiration of the Due
Diligence Period, provided that Seller and Purchaser shall approve the form
and substance of any such public announcement, which approval shall not be
unreasonably withheld, conditioned or delayed, or (iii) disclose any
Confidential Information to any Person on a "need-to-know" basis, such as
their respective directors, officers, partners, members, employees,
attorneys, accountants, engineers, surveyors, consultants, lenders,
investors, managers, franchisors and such other Persons whose assistance is
required to consummate the transactions contemplated in this Agreement;
provided, however, that Seller or Purchaser (as the case may be) shall (a)
advise such Person of the confidential nature of such Confidential
Information, and (b) use commercially reasonable efforts to cause such Person
to maintain the confidentiality of such information; provided, however, that
except for the obligations of Seller and Purchaser to use such commercially
reasonable efforts, neither Seller nor Purchaser shall be liable for any
breach of confidentiality by such Person. If this Agreement is terminated,
Purchaser promptly shall return all Seller Due Diligence Materials to Seller,
and if requested by Seller, Purchaser shall provide a copy of all Purchaser
Due Diligence Reports to Seller. This Section 7.1(a) shall survive the
Closing.

      (b) COMMUNICATION WITH EMPLOYEES. Purchaser shall not, through its
employees, agents, representatives or any other Person, directly or
indirectly, initiate or pursue any communication with any Employees or any
employees of Starwood, or their respective Affiliates involving any matter
with respect to the Hotel, such employees, the Letter of Intent or this

                                      -25-
<PAGE>

Agreement, other than Joseph D. Long and Michael Cassidy and such additional
employees as may be approved by either of them, without Seller's prior
consent, which consent may be withheld in Seller's sole discretion, unless
such communication is arranged by Seller. If Purchaser breaches its covenants
in this Section 7.1(b), Seller shall have the right to terminate this
Agreement, in which case Escrow Agent shall refund the Earnest Money to
Purchaser, and Seller and Purchaser shall have no further rights or
obligations under this Agreement, except those which expressly survive such
termination.

      Section 7.2 OPERATION OF THE HOTEL PRIOR TO CLOSING.

      (a) OPERATION IN ORDINARY COURSE OF BUSINESS. From the date of this
Agreement until the Closing or earlier termination of this Agreement, Seller
shall operate the Hotel in the Ordinary Course of Business, including,
without limitation, (i) maintaining all existing insurance coverages as set
forth in SCHEDULE 5.1(p), (ii) maintaining the inventories of Supplies, F&B
and Retail Merchandise and any other consumables in the Ordinary Course of
Business, and (iii) performing maintenance and repairs for the Hotel in the
Ordinary Course of Business. Notwithstanding the foregoing, Seller will not,
without the consent of Purchaser, which consent shall not be unreasonably
withheld, (i) undertake capital improvements or expenditures costing in the
aggregate in excess of Twenty-Five Thousand and no/100 Dollars ($25,000.00)
and which are not contemplated under the 2000 Cap Ex Budget (as defined
below), (ii) amend, modify or extend or renew or terminate any existing
Tenant Lease or (iii) enter into any leases or lease amendments or
modifications with respect to the Hotel prior to the Closing. After the
expiration of the Due Diligence Period and until the Closing or earlier
termination of this Agreement, Seller and Purchaser shall have meetings at
the Hotel at reasonable times and upon reasonable notice no less frequently
than monthly, and Seller shall provide Purchaser with (i) monthly reports
relating to the ownership and operation of the Hotel and (ii) copies of all
notices received by Seller relating to the ownership and operation of the
Hotel, including those received under the Management Agreement. After the
expiration of the Due Diligence Period and until the Closing or earlier
termination of this Agreement, Purchaser shall have the right to solicit
estoppel certificates in form and substance reasonably satisfactory to
Purchaser from tenants under the Tenant Leases.

      (b) CONTRACTS. From the date of this Agreement until the Closing or
earlier termination of this Agreement, Seller shall not, without Purchaser's
consent, which shall not be unreasonably withheld (i) amend, modify or extend
or renew or terminate any existing Material Contracts, nor (ii) enter into
any new Material Contracts, unless such new Contracts are terminable by
Purchaser, without any termination fee, upon not more than thirty (30) days
notice.

      Section 7.3 LICENSES AND PERMITS. Subject to Section 8.1(c) and this
Section 7.3, Purchaser shall be responsible for obtaining the transfer of all
Licenses and Permits (to the extent transferable) or the issuance of new
licenses and permits, including, without limitation, the licenses and permits
required for the sale and service of alcoholic beverages at the Hotel (the
"LIQUOR LICENSE"). Purchaser, at its cost and expense, shall submit all
necessary applications and other materials to the appropriate Governmental
Authority and take such other actions to effect the transfer of Licenses and
Permits or issuance of new licenses and permits, including, without
limitation, the Liquor License, as of the Closing, and Seller shall use
commercially reasonable efforts (at no cost or expense to Seller other than
any de minimis cost or expense or any cost or

                                      -26-
<PAGE>

expense which Purchaser agrees in writing to reimburse) to cooperate with
Purchaser to cause the Licenses and Permits to be transferred or new licenses
and permits to be issued to Purchaser. Notwithstanding anything to the
contrary in this Section 7.3, Purchaser shall not post any notices at the
Hotel or publish any notices required for the transfer of the Licenses or
Permits or issuance of new licenses and permits, including, without
limitation, the Liquor License, prior to the expiration of the Due Diligence
Period. Purchaser will use all commercially reasonable efforts (i) to file
with the appropriate Governmental Authority the necessary application or
documentation in order to obtain the transfer of the Liquor License or
issuance of a temporary liquor license on the Closing Date within ninety (90)
days after the expiration of the Due Diligence Period and (ii) to cause the
appropriate Governmental Authority to transfer the Liquor License to
Purchaser or issue a temporary Liquor License to Purchaser on the Closing
Date. A portion of the Purchase Price equal to Twenty-five Thousand Dollars
($25,000.00) shall be allocated to the sale of the Liquor License. To the
extent at the Closing such transfer of the Liquor License or issuance of a
temporary liquor license has not occurred, Seller shall cause the holder of
the Liquor License, an Affiliate of Seller, to enter into an agreement with
Purchaser in the form attached as Exhibit B. This Section 7.3 shall survive
the Closing.

      Section 7.4 EMPLOYEE MATTERS.

      (a) UNION EMPLOYEES; ASSUMPTION OF UNION CONTRACTS. Upon the assignment
of Seller's obligations under the Union Contracts to Purchaser at Closing,
Purchaser shall assume all liabilities and obligations of Seller arising or
accruing under the Union Contracts on or after the Closing Date, and
Purchaser shall (and shall cause its manager to) comply with the terms of the
Union Contracts, including, without limitation, hiring or continuing the
employment of the Union Employees upon Closing to the extent required
thereunder, on such terms and with such compensation, health, welfare and
other benefits for the Union Employees as required thereunder; PROVIDED,
HOWEVER, Seller shall retain all liability in connection with the assignment
of the Union Contracts.

      (b) EMPLOYMENT CLAIMS. Seller shall retain all liabilities and
obligations in connection with any employment claims, charges or grievances
by any Employees based on events or occurrences through and including the
Closing Date. Purchaser shall assume all liabilities and obligations in
connection with any employment claims, charges or grievances by any Employees
based on events or occurrences after the Closing Date.

      (c) EMPLOYEE PLAN OBLIGATIONS. Notwithstanding any other provision of
this Agreement to the contrary, except for obligations and liabilities
expressly assumed by Purchaser under the Union Contract relating to events
occurring after the Closing Date, Seller and its Affiliates shall retain and
assume all obligations and liabilities arising under, or in respect of, any
Employee Plan, regardless of when incurred.

      (d) SURVIVAL. The provisions of this Section 7.4 shall survive the
Closing.

      Section 7.5 BOOKINGS. Purchaser shall honor all Bookings for any period
on or after the Closing Date. This Section 7.5 shall survive the Closing.

                                      -27-
<PAGE>

      Section 7.6 TAX CONTESTS.

      (a) TAXABLE PERIOD TERMINATING PRIOR TO CLOSING DATE. Seller shall
retain the right to commence, continue and settle any 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.

      (b) TAXABLE PERIOD INCLUDING THE CLOSING DATE. Seller shall have the
right to commence, continue and settle any proceeding to contest any Taxes
for any taxable period which includes the Closing Date. Notwithstanding the
foregoing, if Purchaser desires to contest any Taxes for such taxable period
and Seller has not commenced any proceeding to contest any such Taxes for
such taxable period, Purchaser shall provide written notice requesting that
Seller contest such Taxes. If Seller desires to contest such Taxes, Seller
shall provide written notice to Purchaser within thirty (30) days after
receipt of Purchaser's request confirming that Seller will contest such
Taxes, in which case Seller shall proceed to contest such Taxes, and
Purchaser shall not have the right to contest such Taxes. If Seller fails to
provide such written notice confirming that Seller will contest such Taxes
within such thirty (30) day period, Purchaser shall have the right to contest
such Taxes. 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 Seller and
Purchaser as of the Cut-Off Time, and the Party receiving such refunds or
abatements promptly shall pay such prorated amount due to the other Party.

      (c) TAXABLE PERIOD COMMENCING ON OR AFTER CLOSING DATE. Purchaser 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.

      (d) COOPERATION. Seller and Purchaser 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.

      (e) SURVIVAL. The provisions of this Section 7.6 shall survive the
Closing.

      Section 7.7 NOTICES AND FILINGS. Seller shall send an announcement to
all tenants under any Tenant Lease as of the Closing in form and substance
reasonably acceptable to Purchaser, informing such tenants of the change in
ownership and operation of the Hotel to Purchaser. Seller and Purchaser shall
use commercially reasonable efforts to cooperate with each other (at no cost
or expense to the Party whose cooperation 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, Contracts, Licenses and Permits, and to effect any
registrations or filings with any Governmental Authority or other

                                      -28-
<PAGE>

Person, regarding the change in ownership or operation of the Hotel. This
Section 7.7 shall survive the Closing.

      Section 7.8 ACCESS TO INFORMATION. After the Closing, Purchaser shall
provide reasonable access to the officers, employees, agents and
representatives of Seller or any of its Affiliates to (i) Purchaser's books
and records for the Hotel to facilitate the preparation of any documents
required to be filed by Seller under Applicable Law or the resolution of any
audit, litigation or other proceeding, claim or charge made by any Person or
insurance claim involving Seller or any of its Affiliates; (ii) the Property
to conduct any examination, tests, investigations or studies of the Property
required for the resolution of any litigation or other proceeding, claim or
charge made by any Person involving Seller or any of its Affiliates; and
(iii) the employees of Purchaser (or Purchaser's manager) whose assistance or
testimony is reasonably deemed necessary or advisable by Seller to assist
Seller in evaluating or defending any audit, litigation or other proceeding,
claim or charge made by any Person or insurance claim involving any Seller
Indemnitees; provided, however, that (A) such Seller or Affiliate thereof
shall provide reasonable prior notice to Purchaser; (B) Purchaser shall not
be required to provide such access during non-business hours; (C) Purchaser
shall have the right to have to accompany the officer, employees, agents or
representatives of such Seller or Affiliate thereof in providing access to
its books and records, the Property or the employees of Purchaser (or
Purchaser's manager) as provided in this Section 7.8. Seller shall, at its
cost and expense, repair any damage to the Property or any other property
owned by a Person other than Seller arising from or in connection with Seller
exercising its right to access the Property in accordance with this Section
7.8 ("SELLER ACCESS"), and restore the Property or such other third-party
property to the same condition as existing prior to Seller Access. Seller
hereby releases the Purchaser Indemnitees for any Losses incurred by any of
the Seller Indemnitees directly arising from or in connection with Seller
Access, except for Purchaser's gross negligence or intentional misconduct.
Seller shall defend, indemnify and hold harmless the Purchaser Indemnitees
from and against any Losses incurred by any Purchaser Indemnitees arising
from or in connection with Seller Access. This Section 7.8 shall survive the
Closing.

      Section 7.9 FURTHER ASSURANCES. Seller and Purchaser 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 take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable (i) prior to Closing to consummate the transaction
contemplated in this Agreement, including, without limitation, (A) 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 (B) effecting all registrations and filings required
under this Agreement or Applicable Law, and (ii) after the Closing to further
effect the transaction contemplated in this Agreement. Seller and Purchaser
shall cooperate and keep each other informed regarding all filings with the
SEC made by either party. If any claim, action, suit, investigation or other
proceeding by any Governmental Authority or other Person is commenced which
questions the validity or legality of the transactions contemplated by this
Agreement or seeks damages in connection therewith, the Parties shall
cooperate and use all reasonable efforts to defend against such claim,
action, suit, investigation or other proceeding and, if an injunction or
other order is issued in any such action, suit or other proceeding, to use
commercially reasonable efforts to

                                      -29-
<PAGE>

have such injunction or other order lifted, and to cooperate reasonably
regarding any other impediment to the consummation of the transactions
contemplated by this Agreement. This Section 7.9 shall survive the Closing.

      Section 7.10 SELLER APPROVAL. Purchaser acknowledges and agrees that
Seller's obligations under this Agreement shall be subject to Seller
obtaining approval by WHLP of the transactions contemplated hereby (the "WHLP
APPROVAL"), which approval requires that WHLP obtain the approval of the sale
of the Hotel to Purchaser pursuant to the terms of this Agreement by not less
than fifty-one percent (51%) by interest of the Limited Partners (the
"LIMITED PARTNERS APPROVAL" and collectively with the WHLP Approval, the
"SELLER APPROVAL") not later than one hundred and fifty (150) days following
the expiration of the Due Diligence Period (the "SELLER APPROVAL DATE").
Seller shall provide written notice to Purchaser promptly upon obtaining the
Seller Approval (the "SELLER APPROVAL NOTICE"). If Seller does not provide
the Seller Approval Notice to Purchaser on or prior to 5:00 P.M. Eastern Time
on the Seller Approval Date, Seller shall be deemed to have failed to obtain
the Seller Approval, and Purchaser and Seller shall each thereafter have the
right to terminate this Agreement after the Seller Approval Date and prior to
receipt thereafter by Purchaser of the Seller Approval Notice, by providing
written notice to the other, in which case Escrow Agent shall refund the
Earnest Money to Purchaser.

      As promptly as reasonably practicable after execution of this
Agreement, WHLP shall prepare and file with the Securities and Exchange
Commission (the "SEC") under the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT"), a proxy statement relating to the solicitation by the
General Partner of the consent of the Limited Partners required under the
WHLP Partnership Agreement in connection with obtaining the Seller Approval
(the "CONSENT SOLICITATION"). WHLP shall provide Purchaser with a copy of the
Consent Solicitation as promptly as practicable and, in any event, at least
five (5) Business Days prior to its filing with the SEC. WHLP will cause all
filings made with the SEC in connection with the Consent Solicitation to
comply as to form in all material respects with the applicable provisions of
the Exchange Act and the rules and regulations thereunder. WHLP shall
promptly notify Purchaser of the receipt of any comments from the SEC and of
any requests by the SEC for amendments or supplements to the Consent
Solicitation or for additional information and will supply Purchaser with
copies of all material correspondence between WHLP or any of its
representatives and the SEC with respect to the Consent Solicitation.
Following the satisfaction of all SEC requirements with respect to the
Consent Solicitation, WHLP shall cause the Consent Solicitation to be mailed
to the Limited Partners as promptly as practicable and shall in good faith
otherwise use its commercially reasonable efforts to obtain the Seller
Approval. The General Partner shall recommend to the Limited Partners
approval of this Agreement and the transactions contemplated by the Agreement
and include such recommendation in the Consent Solicitation (the "GP
RECOMMENDATION") provided, however, that prior to the Seller Approval Date
(as the same may be extended and subject to the General Partner's compliance
with Section 7.11 below), such recommendation may be withdrawn, modified or
amended if the General Partner determines in good faith, based on advice of
its financial advisors and outside counsel, that in the absence of such
action the General Partner would not be in compliance with its duties to the
Limited Partners imposed by the WHLP Partnership Agreement or applicable law.

                                      -30-
<PAGE>

      Section 7.11 NON-SOLICITATION. Each of the General Partner and Seller
agrees that, except for transfers of limited partnership interests in WHLP
made in accordance with the terms of the WHLP Partnership Agreement (which
transfers will not exceed five (5) percent of the aggregate limited
partnership interests in WHLP in any calendar year), from the date of this
Agreement until the termination of this Agreement (if terminated), neither
Seller nor the General Partner will (or permit any of its agents,
representatives, employees, members, partners, principals or affiliates to)
solicit or knowingly encourage any proposals or offers to sell or otherwise
dispose of the Hotel or any interest (directly or indirectly, debt or equity)
in the Hotel, Seller or WHLP (any such proposal or offer being referred to as
an "ACQUISITION PROPOSAL") or negotiate or otherwise enter into discussions
for, or provide confidential information relating to, any Acquisition
Proposal. Each of the General Partner and Seller shall immediately cease and
cause to be terminated any existing activities, discussions or negotiations
with any parties conducted heretofore with respect to any Acquisition
Proposal and shall promptly notify the Purchaser if Seller receives any
Acquisition Proposal after the date of this Agreement, including a
description of the terms and conditions of such Acquisition Proposal, the
identity of the parties involved and a copy of such Acquisition Proposal (if
in writing). The foregoing shall not limit Seller's right to dispose of
personal property in the ordinary course of the operation of the Hotel
without the consent of the Purchaser.

      Notwithstanding anything to the contrary in this Section 7.11, nothing
contained in Section 7.11 shall prohibit Seller from furnishing information
to or entering into discussions or negotiations with any Person that makes a
bona fide, written unsolicited Acquisition Proposal after the date of this
Agreement (a "COMPETING PROPOSAL"), if each of Seller and the General Partner
believe that the Competing Proposal is reasonably likely to be a Superior
Acquisition Proposal (taking into consideration the terms and conditions of
the Competing Proposal, including the presence or absence of any financing
contingencies) and prior to furnishing such information to, or entering into
discussions with, such Person, the Seller provides written notice to the
Purchaser to the effect that it is furnishing information to, or entering
into discussions or negotiations with, such Person with regard to a Competing
Proposal and keeps Purchaser promptly informed of the status of any such
discussions or negotiations. If the General Partner determines in good faith,
based upon the advice of its financial advisers and outside counsel, that in
the absence of such action the General Partner would not be in compliance
with its duties to the Limited Partners imposed by the WHLP Partnership
Agreement or applicable law, the Seller and the General Partner may terminate
this Agreement by written notice thereof delivered to Purchaser so as to
approve or recommend (and, in connection therewith, withdraw or modify the GP
Recommendation), a Superior Acquisition Proposal (as defined below).

      Prior to accepting or recommending a Superior Acquisition Proposal,
entering into an agreement with respect to the transaction contemplated by
any such Superior Acquisition Proposal or withdrawing, materially modifying
or amending the GP Recommendation, the Seller shall (i) notify the Purchaser
in writing of its intention to take any such action (the "SAP NOTICE"), (ii)
identify the third party making such Superior Acquisition Proposal and (iii)
attach the most current version of such agreement to such notice, all of
which information will be kept confidential by the Purchaser in accordance
with the terms of this Agreement. The Purchaser shall have the opportunity,
which may be exercised, if at all, not later than the expiration of the five
business day period following receipt by Purchaser of the SAP Notice (the
"RESPONSE

                                      -31-
<PAGE>

PERIOD"), to amend this Agreement to provide for the sale of the Hotel on
terms and conditions that the General Partner determines, in good faith after
consultation with its financial advisors: (1) are at least as favorable, from
a financial point of view; and (2) are at least as likely to result in
consummation of a sale of the Hotel within substantially the same time frame
as, the terms and conditions of the Superior Acquisition Proposal. If: (a)
Purchaser fails to so amend this Agreement in the manner and within the time
frame required by the preceding sentence; or (b) the General Partner
determines that the terms and conditions offered by the Purchaser in any such
amendment are not as favorable as the terms of the Superior Acquisition
Proposal, then Purchaser's opportunity to so amend this Agreement shall
terminate, in either event, not later than 5:00 p.m. E.S.T. on the fifth
(5th) Business Day following Purchaser's receipt of the SAP Notice. The
Seller shall not enter into an agreement regarding the transactions
contemplated by a Superior Acquisition Proposal prior to the sixth business
day after it has provided the SAP Notice to the Purchaser. In addition, the
Seller shall keep the Purchaser reasonably informed of the status and details
of the Superior Acquisition Proposal (including amendments or proposed
amendments thereto) during the Response Period and notify the Purchaser
promptly if its intention to enter into a binding, written agreement for the
Superior Acquisition Proposal shall change. For all purposes of this
Agreement, "Superior Acquisition Proposal" means a bona fide written proposal
made by a third party to acquire the Hotel on terms and conditions which, in
the aggregate, the General Partner determines, after consultation with its
financial advisors and outside counsel: (i) are at least as favorable, from a
financial point of view, as the terms of this Agreement; and (ii) are at
least as likely to result in consummation of the sale of the Hotel within
substantially the same time frame, as the terms of this Agreement,

Any disclosure that the General Partner or the Seller may be compelled to
make with respect to the receipt of an Acquisition Proposal in order to
comply with its duties imposed by applicable law or Rule 14d-9 or 14e-2 of
the Exchange Act will not constitute a violation of this Section 7.11.

                                ARTICLE VIII

                            CONDITIONS PRECEDENT

      Section 8.1 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BOTH SELLER AND
PURCHASER. The respective obligations of Seller and Purchaser to close the
transaction contemplated under this Agreement are subject to the satisfaction
at or prior to the Closing Date of the following conditions precedent (the
"MUTUAL CLOSING CONDITIONS"):

      (a) ADVERSE PROCEEDINGS. No preliminary or permanent injunction or
other order, decree or ruling shall have been issued by a court of competent
jurisdiction or by any Governmental Authority, and no Applicable Law shall
have been enacted (or passed which upon enactment) would make illegal or
invalid or otherwise prevent the consummation of the transaction contemplated
under this Agreement.

      (b) SELLER APPROVAL. Seller shall have obtained the Seller Approval.

                                      -32-
<PAGE>

      Section 8.2 ADDITIONAL CONDITIONS TO PURCHASER'S OBLIGATIONS.
Purchaser's obligations to close the transactions contemplated under this
Agreement also are subject to the satisfaction at or prior to Closing of the
following conditions precedent (the "PURCHASER CLOSING CONDITIONS"):

      (a) SELLER'S DELIVERIES. Seller shall have delivered to Purchaser or
deposited with Escrow Agent in the Closing Escrow for the benefit of
Purchaser, all of the closing documents and other items set forth in Section
9.3.

      (b) REPRESENTATIONS AND WARRANTIES. Each of Seller's representations
and warranties made in this Agreement shall be true and correct in all
material respects as of the Closing (unless such representation or warranty
is made expressly as of another date).

      (c) COVENANTS AND OBLIGATIONS. Seller shall have performed in all
material respects all of its covenants and obligations under this Agreement.

      (d) TITLE POLICY. The Title Company shall have committed to issue an
owner s title insurance policy to Purchaser (which may be in the form of a
mark-up of the Title Commitment) in accordance with the Title Commitment,
insuring Purchaser's fee simple interest in the Real Property as of the
Closing Date, with gap coverage from the Closing through the date of
recording, subject only to the Permitted Exceptions, with extended coverage
(the "TITLE POLICY").

      (e) Purchaser shall have received an estoppel certificate from Manager
duly executed by Manager in the form required pursuant to Section 6.5 of the
Management Agreement and containing such additional information as reasonably
requested by Purchaser.

      (f) Purchaser shall have received a subordination, non-disturbance and
attornment agreement in the form attached hereto as Exhibit C, duly executed
by Manager.

      (g) The Property shall be in the same condition as of the date hereof,
normal wear and tear excluded, subject to Article XIII hereof.

      (h) Seller shall have caused Manager to establish a new bank account
with a banking institution designated by Purchaser for the purpose of
maintaining the Fund (as defined in the Management Agreement).

      (i) Manager shall have accepted the insurance procured by Purchaser
fulfilling the requirements of Section 5.1 of the Management Agreement and
shall have waived the six (6) month notice requirement set forth in Section
5.1(b) of the Management Agreement.

      (j) The Affiliate of Manager which is the registered owner of the
trademark or tradename "St. Francis" shall have executed a trademark license
agreement in favor of Purchaser in the form attached hereto as Exhibit D.

      The Purchaser Closing Conditions are for the benefit of Purchaser, and
Purchaser shall have the right, except as expressly provided in Section 8.4,
to waive any of the Purchaser Closing Conditions at or prior to Closing.

                                      -33-
<PAGE>

      Section 8.3 ADDITIONAL CONDITIONS TO SELLER'S OBLIGATIONS. Seller's
obligations to close the transactions contemplated under this Agreement are
subject to the satisfaction at or prior to Closing of the following
conditions precedent (the "SELLER CLOSING CONDITIONS"):

      (a) RECEIPT OF THE PURCHASE PRICE. Purchaser shall have paid the
Purchase Price to Seller pursuant to Section 3.4, and Escrow Agent shall have
disbursed the Earnest Money to Seller.

      (b) PURCHASER'S DELIVERIES. Purchaser shall have delivered to Seller or
deposited with Escrow Agent in the Closing Escrow for the benefit of Seller,
all of the closing documents and other items set forth in Section 9.4.

      (c) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties of Purchaser made in this Agreement shall be true and correct in
all material respects as of the Closing (unless such representation or
warranty is made expressly as of another date).

      (d) COVENANTS AND OBLIGATIONS. Purchaser shall have performed in all
material respects all of its covenants and obligations under this Agreement.

      (e) APPROVALS. Seller shall have obtained Seller Approval and Starwood
Board Approval.

      The Seller Closing Conditions are for the benefit of Seller, and Seller
shall have the right, except as expressly provided in Section 8.4, to waive
any of the Seller Closing Conditions at or prior to Closing.

      Section 8.4 FRUSTRATION OF CLOSING CONDITIONS. Seller and Purchaser may
not rely on the failure of the Seller Closing Conditions or Purchaser Closing
Conditions, respectively, if such failure was caused by such Party's failure
to act in good faith or to use its best efforts to cause the Closing to occur.

                                ARTICLE IX

                                 CLOSING

      Section 9.1 CLOSING DATE. The closing of the transaction contemplated
under this Agreement (the "CLOSING") shall occur on the tenth (10th) Business
Day after the date on which Seller shall have delivered the Seller Approval
Notice, or such other date as agreed to in writing between Seller and
Purchaser (the date on which the Closing occurs is referred to herein as the
"CLOSING DATE"), at the offices of Seller's counsel or such other place as
agreed to in writing between Seller and Purchaser; PROVIDED, HOWEVER, that in
no event shall the Closing occur later than June 26, 2000.

      Section 9.2 CLOSING ESCROW. The Closing shall take place by means of a
so-called "New York-style" escrow (the "CLOSING ESCROW"). On or prior to the
Closing Date, Seller and Purchaser shall enter into a closing escrow
agreement with the Escrow Agent with respect to the

                                   -34-
<PAGE>

Closing Escrow in form and substance reasonably acceptable to Seller,
Purchaser and the Escrow Agent (the "CLOSING ESCROW AGREEMENT") pursuant to
which (i) all of the documents required to be delivered by Seller and
Purchaser pursuant to this Agreement shall be deposited with Escrow Agent
unless otherwise agreed by the Parties; (ii) the Purchase Price to be paid by
Purchaser pursuant to Section 3.4 shall be deposited with Escrow Agent, and
(iii) at Closing, the closing documents shall be delivered to Seller and
Purchaser (as the case may be) and the Purchase Price shall be disbursed to
Purchaser pursuant to the Closing Escrow Agreement.

      Section 9.3 SELLER'S DELIVERIES. At the Closing, Seller shall deliver
or cause to be delivered to Purchaser or deposited with Escrow Agent in the
Closing Escrow for the benefit of Purchaser all of the (i) documents, each of
which shall have been duly executed by Seller and acknowledged (if required),
and (ii) other items, set forth in this Section 9.3, as follows:

      (a) A closing certificate in the form of EXHIBIT E, together with a
copy of all appropriate resolutions, consents and approvals evidencing the
Seller Approval.

      (b) A grant deed in the form of EXHIBIT F, conveying the Real Property
to Purchaser, subject only to the Permitted Exceptions (the "DEED");

      (c) An Assignment and Assumption of Management Agreement in the form of
EXHIBIT G, assigning the Management Agreement to Purchaser, with the
assumption by Purchaser of the liabilities and obligations thereunder;

      (d) A Bill of Sale in the form of EXHIBIT H, transferring the FF&E,
Supplies, F&B, Retail Merchandise, Books and Records and Accounts Receivable
to Purchaser, free and clear of all liens and encumbrances;

      (e) An Assignment and Assumption of Leases and Contracts in the form of
EXHIBIT I, assigning the Tenant Leases, Equipment Lease and Operating
Agreements to Purchaser, with the assumption by Purchaser of the liabilities
and obligations thereunder from and after the Closing Date;

      (f) An Assignment and Assumption of Union Contracts in the form of
EXHIBIT J, assigning the Union Contracts to Purchaser, with the assumption by
Purchaser of the liabilities and obligations of Seller thereunder from and
after the Closing Date;

      (g) A General Assignment and Assumption Agreement in the form of
EXHIBIT K, assigning the Licenses and Permits, Intangible Property and
Bookings, with the assumption by Purchaser of the liabilities and obligations
thereunder from and after the Closing Date;

      (h) A certificate or registration of title for any vehicle owned by
Seller, duly executed by Seller, conveying such vehicle to Purchaser;

      (i) Such agreements, affidavits or other documents as may be reasonably
required by the Title Company from the Seller to issue the Title Policies;

                                      -35-
<PAGE>

      (j) Any required real estate transfer tax declaration or similar
documents required in connection with any tax imposed by any Governmental
Authority in connection with the transaction contemplated hereunder;

      (k) A FIRPTA affidavit in the form set forth in the regulations under
Section 1445 of the Code;

      (l) All originals (or copies if originals are not available) of the
Leases, Contracts, Licenses and Permits, Books and Records, keys and lock
combinations in Seller's Possession, which shall be located at the Hotel on
the Closing Date and deemed to be delivered to Purchaser upon delivery of
possession of the Hotel; provided, however, that Seller shall have the right
to redact and reformat any Books and Records which include data or other
information pertaining to any other hotels owned, managed or franchised by
Seller, Starwood, Manager or their Affiliates;

      (m) The Settlement Statement prepared pursuant to Section 11.1; and

      (n) Such other documents and instruments as may be reasonably requested
by Purchaser in order to consummate or better effectuate the transaction
contemplated in this Agreement.

      Section 9.4 PURCHASER'S DELIVERIES. At the Closing, Purchaser shall
deliver or cause to be delivered to Seller or deposited with Escrow Agent in
the Closing Escrow for the benefit of Seller all of the (i) documents, each
of which shall have been duly executed by Purchaser and acknowledged (if
required), and (ii) other items, set forth in this Section 9.4, as follows:

      (a) A closing certificate in the form of EXHIBIT L, together with a
copy of all appropriate resolutions, consents and approvals evidencing the
Purchaser Board Approval.

      (b) The Purchase Price to be paid by Purchaser pursuant to Section 3.4.

      (c) A letter of direction to Escrow Agent directing Escrow Agent to
disburse the Earnest Money to Seller; and

      (d) A counterpart of each of the documents and instruments to be
delivered by Seller under Section 9.3 which require execution by Purchaser;
and

      (e) Such other documents and instruments as may be reasonably requested
by Seller or the Title Company in order to consummate or better effectuate
the transaction contemplated in this Agreement.

      Section 9.5 POSSESSION. Seller shall deliver the Property and
possession of the Hotel to Purchaser as of the Closing, subject to the
Permitted Exceptions.

                                      -36-
<PAGE>

                                   ARTICLE X

               PRORATIONS; ACCOUNTS RECEIVABLE; TRANSACTION COSTS

      Section 10.1 PRORATIONS. The items of revenue and expense with respect
to the Hotel set forth in this Section 10.1 shall be prorated between Seller
and Purchaser (the "PRORATIONS") as of 11:59 p.m. on the day preceding the
Closing Date, or such other time expressly provided in this Section 10.1 (the
"CUT-OFF TIME"), so that the Closing Date is a day of income and expense for
Purchaser. Without duplication, Purchaser shall receive a credit for any
items of expense in this Section 10.1 to the extent the same are accrued or
due and payable but unpaid as of the Cut-Off Time in which case Purchaser
shall be obligated to pay such expense, and Seller shall receive a credit for
any of the items of expense in this Section 10.1 which have been paid prior
to or at the Closing or will be paid by Seller after the Closing to the
extent such payment relates to any period of time after the Cut-Off Time. Any
errors and omissions in computing the Prorations shall be corrected not later
than One Hundred and Eighty (180) days following the Closing Date; PROVIDED,
HOWEVER, that any errors or omissions which are incapable of discovery within
such period shall be corrected as soon as possible after the Closing. This
Section 10.1 shall survive the Closing.

      (a) TAXES. All Taxes shall be prorated as of the Cut-Off Time between
Purchaser and Seller. If the amount of any such Taxes is not ascertainable on
the Closing Date, the proration for such Taxes shall be based on the most
recent available bill; provided, however, that after the Closing, Seller and
Purchaser shall reprorate the Taxes and pay any deficiency in the original
proration to the other Party promptly upon receipt of the actual bill for the
relevant taxable period.

      (b) TENANT LEASES. Any rents and other amounts prepaid, accrued or due
and payable under the Tenant Leases with respect to periods not in excess of
thirty (30) days from the Closing shall be prorated as of the Cut-Off Time
between Purchaser and Seller. Purchaser shall receive a credit for all
security deposits previously paid (and not applied against obligations) under
the Tenant Leases which are transferred to Purchaser, and Purchaser
thereafter shall be obligated to refund or apply such deposits in accordance
with the terms of such Tenant Leases.

      (c) CONTRACTS. Any amounts prepaid, accrued or due and payable under
the Contracts (other than for utilities which proration is addressed
separately in this Section 10.1(e)) shall be prorated as of the Cut-Off Time
between Seller and Purchaser. Purchaser shall receive a credit for all
deposits held by Seller under the Contracts which are transferred to
Purchaser, and Purchaser thereafter shall be obligated to refund or apply
such deposits in accordance with the terms of such Contracts. Seller shall
receive a credit for all deposits made by Seller under the Contracts which
are transferred to Purchaser or remain on deposit for the benefit of
Purchaser.

      (d) LICENSES AND PERMITS. All amounts prepaid, accrued or due and
payable under any Permits (other than utilities which are separately prorated
under Section 10.1(e)) transferred to Purchaser shall be prorated as of the
Cut-Off Time between Seller and Purchaser. Seller shall receive a credit for
all deposits made by Seller under the Permits which are transferred to
Purchaser or which remain on deposit for the benefit of Purchaser.

                                      -37-
<PAGE>

      (e) UTILITIES. All utility services shall be prorated as of the Cut-Off
Time between Purchaser and Seller. To the extent possible, readings shall be
obtained for all utilities as of the Cut-Off Time. If not possible, the cost
of such utilities shall be prorated between Seller and Purchaser by
estimating such cost on the basis of the most recent bill for such service;
provided, however, that after the Closing, Seller and Purchaser shall
reprorate the amount for such utilities and pay any deficiency in the
original proration to the other Party promptly upon receipt of the actual
bill for the relevant billing period. Seller shall receive a credit for all
deposits transferred to Purchaser or which remain on deposit for the benefit
of Purchaser with respect to such utility contracts, otherwise such deposits
shall be refunded to Seller.

      (f) COMPENSATION. If the payroll period for the Employees ends on the
date prior to the Closing Date, Seller shall (or shall cause Manager or
employer to) pay all Compensation due to the Employees for such payroll
period, and Purchaser shall not receive a credit for such Compensation. If
the payroll period for the Employees does not end on the date prior to the
Closing Date, Purchaser shall receive a credit for all Compensation which is
earned by the Employees as of the Cut-Off Time for the payroll period which
includes the Closing Date, and Purchaser shall pay all Compensation due to
the Employees for such payroll period.

      (g) ACCRUED BENEFITS. Purchaser shall receive a credit in an amount
equal to the Accrued Benefits for all Employees.

      (h) DEPOSITS FOR BOOKINGS. Purchaser shall receive a credit for all
prepaid deposits for Bookings scheduled for accommodations or events on or
after the Closing Date which Purchaser is obligated to honor pursuant to this
Agreement, except to the extent such deposits are transferred to Purchaser.

      (i) RESTAURANTS AND BARS. Seller shall close out the transactions in
the restaurants and bars in the Hotel as of the regular closing time for such
restaurants and bars during the night in which the Cut-Off Time occurs and
retain all monies collected as of such closing, and Purchaser shall be
entitled to any monies collected from the restaurants and bars thereafter.

      (j) TRADE PAYABLES. Except to the extent an adjustment or proration is
made under another subsection of this Section 10.1, (i) Seller shall pay in
full prior to the Closing all amounts payable to vendors or other suppliers
of goods or services to the Hotel (the "TRADE PAYABLES") which are due and
payable as of the Closing Date for which goods or services have been
delivered to the Hotel prior to Closing, and (ii) Purchaser shall receive a
credit for the amount of such Trade Payables which have accrued, but are not
yet due and payable as of the Closing Date, and Purchaser shall pay all such
Trade Payables accrued as of the Closing Date when such Trade Payables become
due and payable up to the amount of such credit; provided, however, Seller
and Purchaser shall reprorate the amount of credit for any Trade Payables and
pay any deficiency in the original proration to the other Party promptly upon
receipt of the actual bill for such goods or services. Seller shall receive a
credit for all advance payments or deposits made by Seller with respect to
FF&E, Supplies, F&B and Retail Merchandise ordered, but not delivered to the
Hotel prior to the Closing Date, and Purchaser shall pay the balance of any
amounts which become due and payable for such FF&E, Supplies, F&B and Retail
Merchandise which were ordered prior to Closing.

                                      -38-
<PAGE>

      (k) CASH. Seller shall receive a credit for all cash on hand or on
deposit in any house bank at the Hotel which shall be transferred to
Purchaser.

      (l) MANAGEMENT FEES. Seller shall pay all fees and expenses, including
without limitation, all deferred management fees and expenses due under the
Management Agreement through the Closing Date. Seller shall be responsible
for its pro rata share of the incentive management fee earned or accrued
under the Management Agreement for the 2000 calendar year. At Closing,
Purchaser shall receive a credit equal to the estimate of such prorata share
and a re-adjustment shall be made between Seller and Purchaser post-closing
upon determination of the 2000 calendar year incentive management fee. The
reproration obligation under this Section 10.1(l) shall survive the Closing.

      (m) 2000 CAP EX BUDGET. Seller shall be responsible for paying the cost
of all capital expenditures incurred prior to the Closing. Purchaser (or
Seller) will receive a credit at Closing in an amount equal to the shortfall
(or excess) between (x) the pro rata portion (based on the number of days
elapsed in the calendar year 2000 prior to Closing) of the aggregate capital
expenditures set forth in the 2000 Cap Ex Budget attached as SCHEDULE 10.1(m)
hereto (the "2000 CAP EX BUDGET") and (y) the actual capital expenditures
paid by Seller during the calendar year of 2000 under the 2000 Cap Ex Budget.
Notwithstanding anything to the contrary above, Seller shall be solely
responsible for the line item in the 2000 Cap Ex Budget relating to the
Heavenly Beds, and to the extent such costs have not been paid at Closing,
Purchaser shall receive a credit equal to the unpaid portion.

      (n) FINANCING COMMITMENT FEES. Purchaser shall receive a credit at
Closing for up to Five Hundred Thousand and no/l00 Dollars ($500,000.00), for
hedging fees and costs incurred by Purchaser to provide interest rate
protection in connection with Purchaser's contemplated debt financing and
financing commitment fees; provided, however, Purchaser provides
documentation reasonably satisfactory to Seller evidencing the nature and
amount of hedging fees and costs incurred by Purchaser to provide interest
rate protection and financing and commitment fees.

      (o) Other Adjustments and Prorations. All other items of income and
expense as are customarily adjusted or prorated upon the sale and purchase of
a hotel property similar to the Hotel shall be adjusted and prorated between
Seller and Purchaser accordingly.

      Section 10.2 ACCOUNTS RECEIVABLE.

      (a) GUEST LEDGER. At Closing, Seller shall receive a credit in an
amount equal to: (i) all amounts charged to the Guest Ledger for all room
nights up to (but not including) the night during which the Cut-Off Time
occurs, and (ii) one-half (1/2) of all amounts charged to the Guest Ledger
for the room night which includes the Cut-Off Time (other than any restaurant
or bar charges for such room night which are otherwise prorated under Section
10.1) and Purchaser shall be entitled to retain all deposits made and amounts
collected for such Guest Ledger.

      (b) ACCOUNTS RECEIVABLE (OTHER THAN GUEST LEDGER). At Closing, Seller
shall receive a credit for all Accounts Receivable (other than the Guest
Ledger which is addressed in Section 10.2(a)) in an amount equal to one
hundred percent (100%) of all Accounts Receivable which are

                                      -39-
<PAGE>

unpaid for not more than thirty (30) days ("CURRENT ACCOUNTS RECEIVABLE") and
Purchaser shall be entitled to all amounts collected for such Current
Accounts Receivable. Seller shall retain the right to collect all Accounts
Receivable (other than the Guest Ledger which is addressed in Section
10.2(a)) which are unpaid for more than thirty (30) days ("DELINQUENT
ACCOUNTS RECEIVABLE") and Seller shall not receive a credit for the
Delinquent Accounts Receivable. Purchaser shall cooperate with Seller in
collecting the Delinquent Accounts Receivable, at no cost or expense to
Purchaser other than any de minimis cost and expense or any cost or expense
which Seller agrees in writing to reimburse. If any Delinquent Accounts
Receivable are paid to Purchaser after the Closing, Purchaser shall pay to
Seller the amounts received by Purchaser within ten (10) days after receipt
of such amounts, without any commission or deduction for Purchaser.

      Section 10.3 TRANSACTION COSTS.

      (a) SELLER'S TRANSACTION COSTS. In addition to the other costs and
expenses to be paid by Seller set forth elsewhere in this Agreement, Seller
shall pay for the following costs in connection with this transaction: (i)
transfer and sales taxes; (ii) title insurance premiums for the Title Policy;
(iii) the fees and expenses for the Survey; (iv) the commission due to
Broker; (v) one-half of the fees and expenses of the Escrow Agent (but
excluding any fee for the investment of the Earnest Money); and (vi) the fees
and expenses of its own attorneys and accountants.

      (b) PURCHASER'S TRANSACTION COSTS. In addition to the other costs and
expenses to be paid by Purchaser set forth elsewhere in this Agreement,
Purchaser shall pay for the following costs in connection with this
transaction: (i) the fees and expenses of its own attorneys and accountants;
(ii) the fees and expenses incurred by Purchaser for Purchaser's Inspectors
or otherwise in connection with the Inspections; (iii) any recording charges
payable in connection with the conveyance of the Real Property; (iv) 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 Purchaser; (v) one-half of the fees and expenses for
the Escrow Agent; and (vi) any fees for the investment of the Earnest Money.

      (c) OTHER TRANSACTION COSTS. All other fees, costs and expenses not
expressly addressed in this Section 10.3 or elsewhere in this Agreement shall
be allocated between Seller and Purchaser in accordance with local custom for
similar transactions.

                                   ARTICLE XI

                              TRANSITION PROCEDURES

      Section 11.1 SETTLEMENT STATEMENT. On the day prior to Closing, Seller
and Purchaser, through their respective employees, agents or representatives,
jointly shall make such examinations, audits and inventories of the Hotel as
may be necessary to make the adjustments and prorations to the Purchase Price
as set forth in Section 10.1 and 10.2 or any other provisions of this
Agreement. Based upon such examinations, audits and inventories, Seller and
Purchaser jointly shall prepare prior to Closing a settlement statement (the
"SETTLEMENT STATEMENT"), which shall set forth Seller's and Purchaser's best
estimate of the amounts of the items to be adjusted

                                      -40-
<PAGE>

and prorated under this Agreement. Subject to the reproration provided in
Section 10.1, the Settlement Statement shall be approved and executed by
Seller and Purchaser, and shall be binding and conclusive on Seller and
Purchaser with respect to the items set forth in the Settlement Statement.

                                  ARTICLE XII

                       TERMINATION; EFFECT OF TERMINATION

      Section 12.1 SELLER'S RIGHT OF TERMINATION. This Agreement may be
terminated by Seller (i) upon the acceptance of a Superior Acquisition
Proposal by Seller in accordance with Section 7.11 of this Agreement
following the payment of any money required by Section 12.3, (ii) if any of
the Mutual Closing Conditions set forth in Section 8.1 has not been satisfied
on or before the Closing Date, (iii) if any of the Seller Closing Conditions
set forth in Section 8.3 has not been satisfied on or before the Closing
Date, (iv) upon a Purchaser Default, (v) as set forth in Section 7.10; or
(vi) as set forth in Section 4.3.

      Section 12.2 PURCHASER'S RIGHT OF TERMINATION. This Agreement may be
terminated by Purchaser (i) in accordance with the terms and conditions of
Sections 4.1(a), 4.2(d), 7.10, 13.1(a) or 13.2(a) of this Agreement, (ii) if
any of the Mutual Closing Conditions in Section 8.1 has not been satisfied on
or before the Closing Date, (iii) if any of the Purchaser Closing Conditions
in Section 8.2 has not been satisfied on or before the Closing Date, (iv)
upon a Seller Default, or (v) if the General Partner has withdrawn, amended
or modified the GP Recommendation or approved or recommended any Superior
Acquisition Proposal.

      Section 12.3 EFFECT OF TERMINATION. In the event of the termination of
this Agreement pursuant to Section 12.1 or Section 12.2, this Agreement shall
thereafter become void and have no effect, without any liability on the part
of any Party other than the provisions of this Section 12.3 and such
provisions in this Agreement which expressly survive termination of this
Agreement.

      (a) BREAK-UP FEE. If this Agreement is terminated, and, if, and only
if: (i) the General Partner has withdrawn the GP Recommendation (except as a
result of a Purchaser Default); (ii) Seller, the General Partner or WHLP
shall have terminated or caused to be terminated this Agreement pursuant to
Section 7.11; or (iii) (x) this Agreement is terminated as a result of
Seller's failure or inability to obtain the Seller Approval prior to the
Seller Approval Date, (y) within six (6) months after such termination
Seller, the General Partner or WHLP shall have executed an agreement relating
to a transaction contemplated by any Acquisition Proposal made by any Person
or Affiliate thereof who had disclosed to Seller, WHLP or the General Partner
any Acquisition Proposal made after the date of the Letter of Intent but
prior to the termination of this Agreement ("a NEW TRANSACTION AGREEMENT"),
and (z) Seller, the General Partner or WHLP shall have entered into a binding
definitive agreement (a "DEFINITIVE AGREEMENT") with the other party to such
New Transaction Agreement as to which Definitive Agreement all contingencies
shall have been satisfied or waived (other than customary closing conditions
relating to Seller's performance) within twelve (12) months after such
termination, then Seller shall pay to

                                      -41-
<PAGE>

Purchaser a fee in the amount of Six Million Two Hundred and Fifty Thousand
Dollars ($6,250,000.00) (the "BREAK-UP FEE"); provided, however, in no event
shall the sum of the Break-up Fee and the Out of Pocket Expenses reimbursed
to Purchaser pursuant to Section 12.3(b) exceed an aggregate amount of Eight
Million Two Hundred and Fifty Thousand Dollars ($8,250,000.00) ("Fee Cap").

      (b) REIMBURSABLE EXPENSES. If Seller or Purchaser terminates this
Agreement under any of the circumstances described in clause (i), (ii),
(iii)(x) of Section 12.3(a) above, then, subject to the Fee Cap, Seller shall
reimburse Purchaser for the reasonable out-of-pocket expenses incurred by
Purchaser solely in connection with the transactions contemplated by this
Agreement, including without limitation, reasonable legal fees and
disbursements, the cost of physical, environmental and other inspections and
non-recoverable fees and expenses actually paid to proposed financing sources
and hedging counterparties (the "OUT-OF-POCKET EXPENSES"), up to an amount
not to exceed Four Million Dollars and no/l00 ($4,000,000.00); provided that
Purchaser provides documentation reasonably satisfactory to Seller evidencing
the nature and amount of such Out-of-Pocket Expenses.

      (c) PURCHASER DEFAULT. Upon termination of this Agreement by Seller
upon a Purchaser Default, Purchaser shall cause Escrow Agent to disburse the
Earnest Money to Seller within two (2) Business Days after such termination,
and Seller and Purchaser shall have no further rights or obligations under
this Agreement, except those which expressly survive such termination.
Purchaser's obligation to cause Escrow Agent to disburse the Earnest Money to
Seller shall survive such termination.

SELLER AND PURCHASER AGREE THAT IF THIS AGREEMENT IS TERMINATED PURSUANT TO
THIS SECTION 12.3 (c), THE DAMAGES THAT SELLER WOULD SUSTAIN AS A RESULT OF
SUCH TERMINATION WOULD BE DIFFICULT IF NOT IMPOSSIBLE TO ASCERTAIN.
ACCORDINGLY, SELLER AND PURCHASER AGREE THAT SELLER SHALL RETAIN THE EARNEST
MONEY AS FULL AND COMPLETE LIQUIDATED DAMAGES AND AS SELLER'S SOLE AND
EXCLUSIVE REMEDY FOR SUCH TERMINATION; PROVIDED, HOWEVER, THAT SELLER SHALL
RETAIN ALL RIGHTS AND REMEDIES UNDER THIS AGREEMENT WITH RESPECT TO THOSE
OBLIGATIONS WHICH EXPRESSLY SURVIVE SUCH TERMINATION.

          Seller's Initials                 Purchaser's Initials
                           --------------                        -------------

      (d) EARNEST MONEY If this Agreement is terminated by Purchaser pursuant
to Section 12.2(i), Escrow Agent shall refund the Earnest Money to Purchaser,
and Seller and Purchaser shall have no further rights or obligations under
this Agreement, except those which expressly survive such termination.

      (e) SELLER DEFAULT. If Purchaser terminates this Agreement upon a
Seller Default, Escrow Agent shall refund the Earnest Money to Purchaser, and
Seller and Purchaser shall have no further rights or obligations under this
Agreement, except those which expressly survive such termination. Purchaser
and Seller agree that Purchaser's sole and exclusive remedies upon a Seller
Default shall be to: (i) terminate this Agreement pursuant to Section
12.2(iv); (ii) proceed

                                      -42-
<PAGE>

to Closing without any reduction in or setoff against the Purchase Price; or
(iii) obtain an injunction for specific performance or other equitable remedy
available to Purchaser; or (iv) if such Seller Default is an Intentional
Seller Default, sue for damages; PROVIDED, HOWEVER, that in no event shall
Purchaser be entitled to damages in excess of Six Million Two Hundred and
Fifty Thousand Dollars ($6,250,000.00) as a result of such Seller Default.

                                  ARTICLE XIII

                             CASUALTY; CONDEMNATION

      Section 13.1 CASUALTY.

      (a) MATERIAL CASUALTY. If the Property or any portion thereof is
damaged or destroyed by fire or any other casualty prior to Closing (a
"CASUALTY"), Seller shall give written notice of such Casualty to Purchaser
promptly after the occurrence of such Casualty. If the amount of the repair,
restoration or replacement required by a Casualty equals or exceeds One
Million and no/100 Dollars ($1,000,000.00) (a "MATERIAL CASUALTY") and the
Casualty was not caused by Purchaser or Purchaser's Inspectors, or their
respective employees or agents, then Purchaser shall have the right, in its
sole discretion, to (i) terminate this Agreement, in which case Escrow Agent
shall refund the Earnest Money to Purchaser, and Seller and Purchaser shall
have no further rights or obligations under this Agreement, except those
which expressly survive such termination, or (ii) proceed to Closing, without
terminating this Agreement, in which case Seller shall (A) credit the amount
of the applicable insurance deductible against the Purchase Price, and (B)
transfer and assign to Purchaser all of Seller's right, title and interest in
and to all proceeds from all casualty and lost profits insurance policies
maintained by Seller with respect to the Hotel, except those proceeds
allocable to lost profits for the period prior to the Closing. Purchaser
shall make an election under this Section 13.1(a) by giving written notice to
Seller on or before ten (10) days after Seller's delivery to Purchaser of
written notice of such Casualty. If Purchaser fails to make an election under
Section 13.1(a) within such time period, Purchaser shall be conclusively
deemed to have elected to proceed to Closing pursuant to clause (B) of this
Section 13.1(a). If the Closing Date is scheduled to occur within Purchaser's
ten (10) day election period, the Closing Date shall be extended until the
tenth (10th) day after the expiration of such ten (10) day election period.

      (b) NON-MATERIAL CASUALTY. In the event of any (i) Casualty which is
not a Material Casualty, or (ii) Material Casualty which is caused by
Purchaser or Purchaser's Inspectors, or their respective employees or agents,
then Purchaser shall not have the right to terminate this Agreement, but
shall proceed to Closing, in which case Seller shall (A) credit the amount of
the applicable insurance deductible against the Purchase Price, and (B)
transfer and assign to Purchaser all of Seller's right, title and interest in
and to all proceeds from all casualty and lost profits insurance policies
maintained by Seller with respect to the Hotel, except those proceeds
allocable to lost profits for the period prior to the Closing.

                                      -43-
<PAGE>

  Section 13.2 CONDEMNATION.

      (a) MATERIAL CONDEMNATION. If the event of any actual or threatened
condemnation or taking pursuant to the power of eminent domain of all or any
portion of the Real Property, or any proposed sale in lieu thereof (a
"CONDEMNATION"), Seller shall give written notice of such Condemnation to
Purchaser as soon as possible after Seller receives notice of such
Condemnation. If the Condemnation would (i) result in the loss of more than
ten percent (10%) of the Land or Improvements, (ii) result in any material
reduction or restriction in access to the Land or Improvements, (iii) have a
materially adverse effect on the operation of the Hotel as operated prior to
such Condemnation or (iv) reduces the value of the Land or Improvement by
more than One Million and no/100 Dollars ($1,000,000.00) (a "MATERIAL
CONDEMNATION"), then Purchaser shall have the right, in its sole discretion,
to (A) terminate this Agreement, in which case Escrow Agent shall refund the
Earnest Money to Purchaser, and Seller and Purchaser shall have no further
rights or obligations under this Agreement, except those which expressly
survive such termination, or (B) proceed to Closing, without terminating this
Agreement, in which case Seller shall assign to Purchaser all of Seller's
right, title and interest in all proceeds and awards from such Condemnation.
Purchaser shall make an election under this Section 13.2(a) by giving written
notice to Seller within ten (10) days after Seller's delivery to Purchaser of
written notice of such Condemnation. If Purchaser fails to make an election
under Section 13.2(a) within such time period, Purchaser shall be
conclusively deemed to have elected to terminate this Agreement pursuant to
clause (B) of Section 13.2(a). If the Closing Date is scheduled to occur
within Purchaser's ten (10) day election period, the Closing Date shall be
extended until the tenth (10th) day after the expiration of such ten (10) day
election period.

      (b) NON-MATERIAL CONDEMNATION. In the event of any Condemnation of any
Real Property other than a Material Condemnation, Purchaser shall not have
the right to terminate this Agreement, but shall proceed to Closing, in which
case Seller shall assign to Purchaser all of Seller's right, title and
interest in all proceeds and awards from such Condemnation.

                                  ARTICLE XIV

                                INDEMNIFICATION

      Section 14.1 INDEMNIFICATION BY SELLER. Subject to the limitations set
forth in Sections 5.2, 5.3, 5.4, 14.3, 14.4, 14.5 and 14.7, from and after
the Closing, Seller shall defend, indemnify and hold harmless the Purchaser
Indemnitees from and against any Losses incurred by any Purchaser Indemnitees
(i) as a result of (a) any inaccuracy or untruth of any representations or
warranties made by Seller in this Agreement, (b) the breach by Seller of any
of its covenants or obligations under this Agreement which expressly survive
the Closing, (ii) after the termination of this Agreement based on the breach
by Seller of any of its covenants or obligations under this Agreement which
expressly survive such termination or (iii) except to the extent prorated
pursuant to the provisions of this Agreement or expressly agreed to be paid
by Purchaser, any and all liabilities relating to the ownership, operation or
business of the Hotel with respect to the period prior to the Closing.

                                      -44-
<PAGE>

      Section 14.2 INDEMNIFICATION BY PURCHASER. Subject to the limitations
set forth in Section 6.2 and 14.3, 14.4 and 14.5, Purchaser shall defend,
indemnify and hold harmless the Seller Indemnitees from and against any
Losses incurred by any Seller Indemnitees (i) after the Closing as a result
of (a) any inaccuracy or breach of any representations or warranties made by
Purchaser in this Agreement, or (b) the breach by Purchaser of any of its
covenants or obligations under this Agreement which expressly survive the
Closing, (ii) after the termination of this Agreement based on the breach by
Purchaser of any of its covenants or obligations under this Agreement which
expressly survive such termination or (iii) except to the extent prorated
pursuant to the provisions of this Agreement or expressly agreed to be paid
by Seller, any and all liabilities relating to the ownership, operation or
business of the Hotel with respect to the period from and after the Closing.

      Section 14.3 LIMITATIONS ON INDEMNIFICATION OBLIGATIONS.

      (a) SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Seller under Sections 5.1(a), 5.1(b), 5.1(c), 5.1(i), 5.1(q),
5.1(r) and 5.1(aa), and the representations and warranties of Purchaser under
this Agreement shall survive the Closing until the expiration of the
applicable statute of limitations, and all other representations and
warranties of Seller under this Agreement 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 Three Hundred and Sixty (360) days after the
Closing Date (the "SURVIVAL PERIOD"). To the extent any Indemnitee is seeking
the defense of, or indemnification for, a breach of any representations or
warranties, the Indemnitee shall be entitled to indemnification only for
those matters as to which the Indemnitee has given written notice to the
Indemnitor prior to the expiration of the expiration of the applicable
Survival Period.

      (b) INDEMNIFICATION DEDUCTIBLE AND CAP. Notwithstanding anything to the
contrary in this Agreement, Seller shall be not be required to provide
defense or indemnification to the Purchaser Indemnitees pursuant to Section
14.1(i)(a) to the extent that the aggregate amount of all Losses incurred by
the Purchaser Indemnitees for which Purchaser otherwise would be entitled to
indemnification: (i)(a) does not exceed Five Hundred Thousand Dollars
($500,000) (the "INDEMNIFICATION DEDUCTIBLE"), and (b) if such Losses exceed
the Indemnification Deductible, Purchaser shall not be entitled to defense or
indemnification for any amount up to the Indemnification Deductible, or (ii)
exceeds Six Million Two Hundred Fifty Thousand and no/100 Dollars
($6,250,000.00) ("INDEMNIFICATION CAP").

      (c) EFFECT OF TAXES AND INSURANCE. The amount of any Losses for which
defense or indemnification is provided to any Indemnitee under this Article
XIV shall be net of any tax benefits realized or insurance proceeds received
by such Indemnitee in connection with the Indemnification Claim.

      Section 14.4 INDEMNIFICATION PROCEDURE.

      (a) NOTICE OF INDEMNIFICATION CLAIM. In the case of any indemnification
sought by any of the Seller Indemnitees or Purchaser Indemnitees (as the case
may be) (each, an "INDEMNITEE"), or any claim asserted by a third party which
if adversely determined would entitle any Indemnitee to indemnification or
defense under this Agreement (each, an "INDEMNIFICATION

                                      -45-
<PAGE>

CLAIM"), the Indemnitee shall provide written notice to the Party required to
provide indemnification or defense for such Indemnification Claim under this
Agreement (the "INDEMNITOR") promptly after such Indemnitee has actual
knowledge of any facts or circumstances or third-party claim as to which such
Indemnification Claim may be sought, describing in reasonable detail the
facts and circumstances or third-party claim giving rise to such
Indemnification Claim.

      (b) DEFENSE AND RESOLUTION OF INDEMNIFICATION CLAIM. If the
Indemnification Claim does not involve a third-party claim and is disputed by
the Indemnitor, the dispute shall be resolved by litigation or other means as
the Parties otherwise may agree. If the Indemnification Claim involves a
third-party claim, the Indemnitor shall have the right (but shall not be
obligated) to assume the defense of such claim or any litigation resulting
therefrom, at its cost and expense, and shall use good faith efforts
consistent with prudent business judgment to defend such third-party claim in
an effective and cost-efficient manner, provided that (i) the counsel for the
Indemnitor who shall conduct the defense of the third-party claim or
litigation shall be reasonably satisfactory to the Indemnitee (unless
selected by Indemnitor's insurance company), (ii) the Indemnitee, at its cost
and expense, may participate in, but shall not control, the defense of such
third-party claim, (iii) the failure by any Indemnitee to give notice as
provided herein shall not relieve the Indemnitor of its indemnification
obligation under this Agreement, except to the extent that such failure to
provide notice increases the amount of the indemnification obligation of
Indemnitor or otherwise prejudices the Indemnitor's ability to defend against
such third-party claim, and (iv) the Indemnitor shall not enter into any
settlement or other agreement which requires any performance by the
Indemnitee, other than the payment of money which shall be paid by the
Indemnitor. The Indemnitee shall not enter into any settlement agreement with
respect to the Indemnification Claim, without the Indemnitor's prior written
consent. If the Indemnitor elects not to assume the defense of such
third-party claim, the Indemnitee shall retain the defense of such
third-party claim and shall use good faith efforts consistent with prudent
business judgment to defend such third-party claim in an effective and
cost-efficient manner.

      (c) ACCRUAL OF INDEMNIFICATION OBLIGATION. Notwithstanding anything to
the contrary in this Agreement, the Indemnitee shall have no right to
indemnification against the Indemnitor for any Indemnification Claim which
does not involve a third-party claim, but is disputed by Indemnitor, until
such time as such dispute or litigation is concluded, including any appeals
with respect thereto.

      Section 14.5 EXCLUSIVE REMEDY. Except for claims based on fraud, the
indemnification provisions of this Article XIV shall be the sole and
exclusive remedy of any Indemnitee with respect to any claim for Losses
arising from or in connection with this Agreement.

      Section 14.6 INDEMNIFICATION OBLIGATIONS. So long as Seller has
indemnification obligations under Section 14.1 of this Agreement, WHLP shall
guaranty Seller's indemnification obligations and WHLP shall maintain
sufficient net worth from and after the Closing to satisfy such obligations.

      Section 14.7 RELEASE OF SELLER FOR ENVIRONMENTAL LIABILITIES.
Notwithstanding any indemnification or defense obligation of Seller under
this Agreement, Purchaser does hereby

                                      -46-
<PAGE>

forever release and discharge the Seller Indemnitees from any and all
Environmental Claims and Environmental Liabilities, whether now known or
unknown to Purchaser; provided, however, that such release and discharge
shall not apply to any defense or indemnification obligation of Seller based
on a breach of Seller's representation or warranty set forth in Section 5.1;
and PROVIDED, FURTHER, that the foregoing release shall not be effective with
respect to (i) any action, cause of action, suit, claim or liability that
Purchaser may have or incur relating to or arising out of third party claims
brought against Purchaser or the Hotel based upon and to the extent of any
condition(s), event(s) or occurrence(s) existing on or prior to the Closing,
including without limitation, lawsuits and claims similar in substance to
those set forth in Schedule 5.1(g) or (ii) the litigation matters referred to
on Schedule 5.1(g).

                                  ARTICLE XV

                            MISCELLANEOUS PROVISIONS

      Section 15.1 NOTICES.

      (a) METHOD OF DELIVERY. All notices, requests, demands and other
communications (each, a "NOTICE") required to be provided to the other Party
pursuant to this Agreement shall be in writing and shall be delivered (i) in
person, (ii) by certified U.S. mail, with postage prepaid and return receipt
requested, (iii) by overnight courier service, or (iv) by facsimile
transmittal, with a verification copy sent on the same day by any of the
methods set forth in clauses (i), (ii) and (iii), to the other Party to this
Agreement at the following address or facsimile number (or to such other
address or facsimile number as Seller or Purchaser may designate from time to
time pursuant to Section 15.1(c)):

        IF TO SELLER:
        -------------

                Starwood Hotels & Resorts Worldwide, Inc.
                777 Westchester Avenue
                White Plains, New York 10604
                Attn:  Thomas Janson, Esq., Executive Vice President and
                       General Counsel
                       Matthew Coe, Esq., Vice President and Associate General
                       Counsel
                Facsimile No.: (914) 640-8260

                WITH A COPY TO:
                ---------------

                Stephen G. Tomlinson, Esq.
                Kirkland & Ellis
                200 E. Randolph
                Chicago, IL 60601
                Facsimile No.: (312) 861-2200

                                      -47-
<PAGE>

       IF TO PURCHASER:
       ----------------

                BRE/St. Francis L.L.C.
                345 Park Avenue
                32nd Floor
                New York, NY 10154
                Attn:    Jonathan D. Gray
                Facsimile No.: (212) 583-5573

                WITH A COPY TO:
                ---------------

                Gregory Ressa, Esq.
                Simpson Thacher & Bartlett
                425 Lexington Avenue
                New York, NY 10017
                Facsimile No.: (212) 455-2502

      (b) RECEIPT OF NOTICES. All Notices sent by Seller or Purchaser (or
their respective counsel pursuant to Section 15.1(d)) under this Agreement
shall be deemed to have been received by the Party to whom such Notice is
sent upon (i) delivery to the address or facsimile number of the recipient
Party, provided that such delivery is made prior to 5:00 p.m. (local time for
the recipient Party) on a Business Day, otherwise the following Business Day,
or (ii) the attempted delivery of such Notice if (A) such recipient Party
refuses delivery of such Notice, or (B) such recipient Party is no longer at
such address or facsimile number, and such recipient Party failed to provide
the sending Party with its current address or facsimile number pursuant to
this Section 15.1(c).

      (c) CHANGE OF ADDRESS. Seller and Purchaser and their respective
counsel shall have the right to change their respective address and/or
facsimile number for the purposes of this Section 15.1 by providing a Notice
of such change in address and/or facsimile as required under this Section
15.1(c).

      (d) DELIVERY BY PARTY'S COUNSEL. Seller and Purchaser agree that the
attorney for such Party shall have the authority to deliver Notices on such
Party's behalf to the other Party hereto.

      Section 15.2 TIME IS OF THE ESSENCE. Time is of the essence of this
Agreement; provided, however, that notwithstanding anything to the contrary
in this Agreement, if the time period for the performance of any covenant or
obligation, satisfaction of any condition or delivery of any notice or item
required under this Agreement shall expire on a day other than a Business
Day, such time period shall be extended automatically to the next Business
Day.

      Section 15.3 ASSIGNMENT. Purchaser shall not assign this Agreement or
any interest therein to any Person, without the prior written consent of
Seller, which consent may be withheld in Seller's sole discretion.
Notwithstanding the foregoing, Purchaser shall have the right to designate
any Affiliate as its nominee to receive title to the Property, or assign all
of its right, title and interest in this Agreement to any Affiliate or any
Person with whom Purchaser will enter into a joint venture to purchase the
Hotel; provided, however, that (i) Purchaser shall not be

                                      -48-
<PAGE>

released from any of its liabilities and obligations under this Agreement by
reason of such designation or assignment; and (ii) such designation or
assignment shall not be effective until Purchaser has provided Seller with a
fully executed copy of such designation or assignment and assumption
instrument, which shall (A) provide that such designee or assignee shall be
jointly and severally liable for all liabilities and obligations of Purchaser
under this Agreement, (B) provide that Purchaser and its designee or assignee
agree to pay any additional transfer tax as a result of such designation or
assignment, and (iii) include a representation and warranty in favor of
Seller that all representations and warranties made by Purchaser in this
Agreement are true and correct with respect to such designee or assignee as
of the date of such designation or assignment, and will be true and correct
as of the Closing, and (iv) otherwise be in form and substance reasonably
satisfactory to Seller.

      Section 15.4 SUCCESSORS AND ASSIGNS; THIRD PARTY BENEFICIARIES. This
Agreement shall be binding upon and inure to the benefit of Seller and
Purchaser, and their respective successors and permitted assigns pursuant to
Section 15.3. Except for any Indemnitee to the extent such Indemnitee is
expressly granted certain rights of defense and indemnification in this
Agreement and for any successors and permitted assignee pursuant to Section
15.3, this Agreement shall not confer any rights or remedies upon any third
party.

      Section 15.5 PREVAILING PARTY. If any litigation or other court action,
arbitration or similar adjudicatory proceeding is sought, taken, instituted
or brought by Seller or Purchaser to enforce its rights under this Agreement,
all fees, costs and expenses, including, without limitation, reasonable
attorneys fees and court costs, of the prevailing Party in such action, suit
or proceeding shall be borne by the Party against whose interest the judgment
or decision is rendered. This Section shall survive the termination of this
Agreement and the Closing.

      Section 15.6 NO RECORDATION. Neither this Agreement, nor any memorandum
or other notice of this Agreement, shall be recorded without Seller's prior
written consent, which consent may be withheld in Seller's discretion.

      section 15.7 RULES OF CONSTRUCTION. The following rules shall apply to
the construction and interpretation of this Agreement:

      (a) Singular words shall connote the plural as well as the singular,
and plural words shall connote the singular as well as the plural, and the
masculine shall include the feminine and the neuter.

      (b) All references in this Agreement to particular articles, sections,
subsections or clauses (whether in upper or lower case) are references to
articles, sections, subsections or clauses of this Agreement. All references
in this Agreement to particular exhibits or schedules (whether in upper or
lower case) are references to the exhibits and schedules attached to this
Agreement, unless otherwise expressly stated or clearly apparent from the
context of such reference.

      (c) The headings contained herein are solely for convenience of
reference and shall not constitute a part of this Agreement nor shall they
affect its meaning, construction or effect.

                                      -49-
<PAGE>

      (d) Each Party hereto and its counsel have reviewed and revised (or
requested revisions of) this Agreement and have participated in the
preparation of this Agreement, and therefore any usual rules of construction
requiring that ambiguities are to be resolved against a particular Party
shall not be applicable in the construction and interpretation of this
Agreement or any exhibits hereto.

      (e) The terms "hereby," "hereof," "hereto," "herein," "hereunder" and
any similar terms shall refer to this Agreement, and not solely to the
provision in which such term is used.

      (f) The terms "include," "including" and similar terms shall be
construed as if followed by the phrase "without limitation."

      Section 15.8 GOVERNING LAW; SEVERABILITY. This Agreement shall be
governed by the laws of the State of New York. If any term or provision of
this Agreement is held to be or rendered invalid or unenforceable at any time
in any jurisdiction, such term or provision shall not affect the validity or
enforceability of any other terms or provisions of this Agreement, or the
validity or enforceability of such affected terms or provisions at any other
time or in any other jurisdiction.

      Section 15.9 RECITALS, EXHIBITS AND SCHEDULES. The recitals to this
Agreement, and all exhibits and schedules (as amended and supplemented from
time to time pursuant to Section 5.3) referred to in this Agreement are
incorporated herein by such reference and made a part of this Agreement.

      Section 15.10 ENTIRE AGREEMENT; AMENDMENTS TO AGREEMENT. This Agreement
sets forth the entire understanding and agreement of the Parties hereto, and
shall supersede the Letter of Intent and any other agreements and
understandings (written or oral) between Seller and Purchaser on or prior to
the date of this Agreement with respect to the transaction contemplated in
this Agreement. No amendment or modification to any terms of this
Agreement(other than amendments and supplements to the schedules made by
Seller pursuant to Section or cancellation of this Agreement, shall be valid
unless in writing and executed and delivered by Seller and Purchaser.

      Section 15.11 FACSIMILE; COUNTERPARTS. Seller and Purchaser may deliver
executed signature pages to this Agreement by facsimile transmission to the
other Party, which facsimile copy shall be deemed to be an original executed
signature page; provided, however, that such Party shall deliver an original
signature page to the other Party promptly thereafter. This Agreement 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]

                                   -50-
<PAGE>

         IN WITNESS WHEREOF, Seller and Purchaser have caused this Agreement
to be executed in their names by their respective duly authorized officers or
representatives.

                                         SELLER:
                                         -------

                                         THE WESTIN ST. FRANCIS LIMITED
                                         PARTNERSHIP, a Delaware limited
                                          Partnership

                                         By:   ST. FRANCIS HOTEL CORP.,
                                               a Delaware corporation,
                                               General Partner

                                         By:
                                             --------------------------------
                                         Name:
                                              -------------------------------
                                         Title:
                                               ------------------------------

                                         PURCHASER:
                                         ----------

                                         BRE/ST. FRANCIS  L.L.C., a Delaware
                                         limited liability company

                                         By:
                                             --------------------------------
                                         Name:
                                              -------------------------------
                                         Title:
                                               ------------------------------

Westin Hotel Limited Partnership executes this Agreement solely for the
purposes of acknowledging and agreeing to its obligations under Section 7.10
and Section 14.6 of this Agreement.

WESTIN HOTELS LIMITED PARTNERSHIP:

By:      Westin Realty Corporation,
         Its General Partner

         By:
             ---------------------------
         Its:
              --------------------------

<PAGE>

      St. Francis Hotel Corporation executes this Agreement solely for the
purposes of acknowledging and agreeing to its obligations under Section 7.11
of this Agreement.

ST. FRANCIS HOTEL CORP.

         By:
             ---------------------------
         Its:
              --------------------------

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