Document:

Exhibit 10.1

Exhibit 10.1

CONFIDENTIAL SETTLEMENT AGREEMENT AND MUTUAL RELEASE

This Settlement Agreement and Mutual Release (“Agreement”), effective as of the date of the
last signature appearing below (“Effective Date”), is by and between LecTec Corporation, a
Minnesota corporation, having a principal place of business at 1407 South Kings Highway, Texarkana,
Texas 75501 (‘‘LecTec’’), and Chattem, Inc., a Tennessee corporation with its principal place of
business at 1715 W. 38th Street, Chattanooga, Tennessee 37409 (“Chattem”). LecTec and
Chattem are sometimes referred to herein individually as a “Party” and collectively as “Parties.”

RECITALS

WHEREAS LecTec filed suit against Chattem and four other defendants in the United States
District Court for the Eastern District of Texas, Civil Action Number 5:08-CV- 00130-DF (“the
Litigation”) claiming infringement of LecTec’s Re-Examined United States Patent Nos. 5,536,263 and
5,741,510 (“the ‘263 patent” and “the ‘510 patent,” respectively; collectively, the
“Patents-In-Suit”) by, in the case of Chattem, selling certain Icy Hot and Capzasin brand patches;

WHEREAS LecTec and Chattem now desire to resolve the Litigation, under the terms and
conditions hereof, without acknowledgement of liability by any Party.

 

 

 

AGREEMENTS

NOW THEREFORE, in consideration of the mutual promises and covenants contained herein, and for
such other and further consideration, the receipt and sufficiency of which is hereby acknowledged,
the Parties agree as follows:

1. Payment From Chattem to LecTec. Chattem shall pay LecTec the total sum of $3.6
million dollars ($3,600,000.00) in one payment (the “Settlement Payment”) within five (5) business
days of the execution of this Agreement by all Parties, and LecTec providing to
Chattem all necessary forms for payment, including, but not limited to, a W-9. The Settlement
Payment shall be due and owing irrespective of any further developments in the Litigation except
failure by LecTec to perform in accordance with this Agreement, including any possible
determination that either of the Patents In-Suit is invalid or unenforceable. Chattem shall make
the payment by wire transfer to LecTec and Rader, Fishman & Grauer PLLC, in accordance with wiring
instructions provided by Rader, Fishman & Grauer PLLC on behalf of LecTec.

2. Termination of The Litigation. Promptly upon LecTec’s receipt of an original
counterpart of this Agreement, and payment of the Settlement Payment pursuant to Section 1 herein,
LecTec and Chattem shall cause their representatives to file with the Court an Agreed Order of
Dismissal to terminate the Litigation as against Chattem with prejudice, and shall cooperate fully
to ensure entry by the Court.

3. Mutual General Release. LecTec, on behalf of itself and its officers, directors,
employees, investors, shareholders, administrators, predecessor and successor corporations,
attorneys, affiliates, agents, and assigns, HEREBY FULLY AND FOREVER RELEASES, ACQUITS AND
DISCHARGES CHATTEM, ITS OFFICERS, DIRECTORS, EMPLOYEES, INVESTORS, SHAREHOLDERS, ADMINISTRATORS,
ATTORNEYS, PREDECESSOR AND SUCCESSOR CORPORATIONS, AFFILIATES, PARENTS, RELATED ENTITIES, AGENTS,
AND ASSIGNS, of and from any claim, duty, obligation or cause of action relating to any matters of
any kind, whether presently known or unknown, suspected or unsuspected, arising from the beginning
of time to the date of this agreement, including but not limited to all claims related to the
matters alleged in the Lawsuit and any other matters connected in any way with patch products sold
by Chattem or any of its subsidiaries, parents, affiliates or related entities anywhere in the
world. LecTec further releases and forever discharges the direct and indirect
customers, distributors, and manufacturers of Chattem, and any subsidiaries, parents,
affiliates or related entities of either of them, of and from any claim, duty, obligation or cause
of action relating to any matters of any kind, whether presently known or unknown, suspected or
unsuspected, arising from the beginning of time to the date of this Agreement, related to any
matters connected in any way with patch products sold by Chattem or any of its subsidiaries,
parents, affiliates or related entities anywhere in the world. The foregoing release does not
extend to any prospective obligations incurred under this Agreement, if any.

 

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Chattem, on behalf of itself and its officers, directors, employees, investors, shareholders,
administrators, predecessor and successor corporations, attorneys, affiliates, agents, and assigns,
hereby fully and forever release, acquit and discharge LecTec, its officers, directors, employees,
investors, shareholders, administrators, attorneys, predecessor and successor corporations,
affiliates, agents, and assigns, of and from any claim, duty, obligation or cause of action
relating to any matters of any kind, whether presently known or unknown, suspected or unsuspected,
arising from the beginning of time to the date of this Agreement, including but not limited to all
claims related to the matters alleged in the Lawsuit and any other matters connected in any way
with patch products sold by Chattem or any of their subsidiaries, affiliates or related entities
anywhere in the world. Chattem further releases and forever discharges the direct and indirect
customers and distributors of LecTec, and any of its subsidiaries, affiliates, or related entities,
of and from any claim, duty, obligation or cause of action relating to any matters of any kind,
whether presently known or unknown, suspected or unsuspected, arising from the beginning of time to
the date of this Agreement, related to any matters connected in any way with patch products sold by
LecTec or any of its subsidiaries, affiliates, or related entities anywhere in the
world. The foregoing release does not extend to any prospective obligations incurred under
this Agreement, if any.

 

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4. Covenant Not to Sue. LecTec covenants not to sue Chattem, or any of its
subsidiaries, parents, affiliates or other related or controlled entities (“Chattem”) or any of
their direct or indirect customers, distributors or manufacturers of patch products, for any
infringement of (a) the Patents-In-Suit, (b) any patent that claims priority, directly or
indirectly, from the Patents-In-Suit (the “Family Patents”), including without limitation U.S.
Patent Nos. 6,096,333; 6,096,334, and 6,361,790, (c) any foreign counterparts of the
Patents-In-Suit or any of the Family Patents, or (d) any other patent owned by LecTec resulting
from a patent application filed before the Effective Date of this Agreement. Without limiting the
foregoing covenant in any way, the Parties agree that the foregoing covenant shall apply to any and
all products and processes now or hereafter made, have made, used, sold, offered for sale,
imported, or exported by Chattem, including but not limited to ICYHOT, and CAPZASIN. The foregoing
covenant shall not apply to sales by customers or manufacturers of Chattem of patch products that
were not sold to or purchased from Chattem. The foregoing covenant shall not apply to past sales
made by any entity that may be acquired by Chattem or which may become an affiliate of Chattem in
the future if such entity was in the business of making or selling patch products prior to being
acquired by Chattem or becoming an affiliate of Chattem, including without limitation any of the
other four defendants in the Litigation. Provided, however, that this covenant will apply to
future manufacture, import, export, use or sale of patch products by any entity which may be
acquired by Chattem or which may become an affiliate of Chattem. This covenant not to sue excludes
(i) “Vapor Patches,” over-the-counter patches which emit vapors, that when inhaled provide relief
from cough and cold symptoms; (ii) non-occlusive, medicated hydrogel patch
products for the application to the body of a human or animal to alleviate pain which include
a prescription pain medicine and which are sold under a prescription from a doctor; and (iii) hand
sanitizing patch technology including, but not limited to, the technology that is described in U.S.
Patent applications 61/038,958; 61/034862; 61/409,786; 61/308,820; and any foreign counterparts
that relate to these applications.

 

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5. License Grant. Limited by the exceptions described in this paragraph 5, LecTec
hereby grants to Chattem and any of its subsidiaries, parents, affiliates, related entities, direct
or indirect customers, distributors or manufacturers of patch products, a fully paid-up,
world-wide, non-exclusive and irrevocable license under the (a) the Patents-in-Suit; (b) the Family
Patents; or (c) any foreign counterparts of the Family Patents to make, have made, use, sell, offer
for sale, import, export, or otherwise dispose of any apparatus, method, product, component,
service, product by process or device associated with any patch products sold by Chattem or any of
its subsidiaries, affiliates, related entities, direct or indirect customers, distributors or
manufacturers of patch products for the past, present and future until the expiration of the last
patent described above. This license grant excludes (i) “Vapor Patches,” over-the-counter patches
which emit vapors, that when inhaled provide relief from cough and cold symptoms; and (ii)
non-occlusive, medicated hydrogel patch products for the application to the body of a human or
animal to alleviate pain which include a prescription pain medicine and which are sold under a
prescription from a doctor.

6. Agreement Regarding Transfer of Patents and Contingent License. LecTec agrees that
it will not assign or otherwise transfer the patents referred to in the Covenant Not to Sue and
License Grant set forth in Paragraphs 4 and 5 unless and until the transferee agrees in writing to
be bound by said Covenant Not to Sue and License Grant, and such writing is
provided to Chattem. In the event that any of the patents referred to in this Agreement are
assigned or otherwise transferred from LecTec (the “Transferred Patents”) without such a writing,
Chattem shall have, and LecTec does hereby grant, an immediate fully paid-up, non-exclusive,
irrevocable, worldwide license under the Transferred Patents to make, have made, use, sell, offer
for sale and import products covered by the Transferred Patents. In the event that LecTec files
for bankruptcy, Chattem shall have, and LecTec does hereby grant, an immediate fully paid-up,
non-exclusive, irrevocable, worldwide license under all of the patents referenced in this Agreement
to make, have made, use, sell, offer for sale and import products covered by any such patents.

 

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7. Agreement Not To Challenge Patents. Chattem covenants not to challenge or assist
in challenging the validity or enforceability of the patents identified in this Agreement, so long
as none of these patents identified in this Agreement are asserted against Chattem or any of its
subsidiaries, parents, affiliates, related entities, or direct or indirect customers, distributors
or manufacturers.

8. Costs. Each Party shall bear its own costs, expert fees, attorneys’ fees and other
fees incurred in connection with the Litigation and this Agreement.

9. Representations and Warranties. Each Party represents and warrants that (a) it has
the full right and power to enter into this Agreement and to grant the covenants and releases
referred to herein, (b) there are no outstanding agreements, assignments, options, liens or
encumbrances inconsistent with the provisions of this Agreement; and (c) the undersigned has the
authority to act on its behalf and on behalf of all who may claim through it to the terms and
conditions of this Agreement.

 

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10. Severability. In the event that any provision hereof, except for the Mutual
General Release and Covenant Not to Sue provisions, becomes or is declared by a court of competent
jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision.

11. Entire Understanding. This Agreement represents the entire agreement and
understanding between the Parties and supersedes and replaces any and all prior agreements and
understandings relating to these matters.

12. Amendments. This Agreement may only be amended by a written agreement signed by
both Parties.

 

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13. Confidentiality. This Agreement shall be confidential between the Parties.
However, if a party finds that the Agreement is material and needs to be disclosed to the
Securities and Exchange Commission (“SEC”), the disclosure in Form 8-K should be no broader than
necessary to achieve compliance. In making a 10-K or 10-Q filing with the SEC in which the
Agreement will be filled as an exhibit, the disclosing Party must file in accordance with the SEC
guidelines, and submit to the SEC at the time of filing the 10-K or 10-Q, a request for
confidential treatment of the Agreement, which may or may not be granted by the SEC. In connection
with the request for confidential treatment of the Agreement, the Party will submit a redacted
version of the Agreement that contains is no broader a disclosure than necessary to achieve
compliance. If the SEC does not grant the disclosing Party’s request for confidential treatment,
the disclosing Party will promptly inform the non-disclosing Party of that decision and the Parties
will cooperate to petition to the SEC for reconsideration. The Parties further agree that, except
as provided for in this Section, each will not make, issue or release any public announcement,
press release, statement or acknowledgment of the existence of, or reveal
publicly the terms, conditions and status of, the transactions contemplated herein without the
prior written consent of the other Party (which shall not be unreasonably withheld) as to the
content and time of release and the media in which such statement or announcement is to be made.
Provided, however, that (a) without such consent, a Party may issue a press release that only
includes information with respect to this Agreement that has already been made public in a Form
8-K, and (b) in the case of announcements, statements, acknowledgments or revelations which either
Party is required to make, issue or release by law or by regulatory requirements or by the
regulations of national stock exchanges, or by bona fide contractual requirements, the making,
issuing or releasing of any such announcement, statement, acknowledgment or revelation by the party
so required shall not constitute a breach of this Agreement if (i) the disclosure is no broader
than necessary to achieve compliance; and (ii) the disclosing Party shall have given sufficient
prior written notice (but not less than thirty (30) days) to the other Party, to enable the other
party to review and comment on the scope and content of the disclosure, and to intervene to protect
the confidentiality of the disclosure in such other party’s discretion. Neither Party shall use the
name of the other Party or its affiliates, subsidiaries, parents or related entities for
advertising or promotional purposes of any kind.

14. Governing Law and Jurisdiction. This Agreement shall be governed by and construed
in accordance with the laws of the State of Texas, without giving effect to any choice of law
provisions thereof. In the event of any dispute arising under this Agreement, LecTec and Chattem
agree to submit themselves to the exclusive jurisdiction of the state or federal courts located in
the Eastern District of Texas, and waive any objection on the grounds of lack of personal
jurisdiction or venue (forum non conveniens or otherwise) to the exercise of such jurisdiction over
either of them by these courts. Each party waives the right to a trial by jury.

 

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15. Binding Effect. This Agreement shall be binding upon any party to whom any of the
patents referred to in this Agreement may be assigned, licensed, or otherwise transferred.

16. No Assignment or Sublicense by Chattem. Chattem may not assign or transfer this
Agreement, including the rights and obligations thereunder, to any third-party, except in
connection with a sale to a third-party of substantially all of Chattem’s assets or the sale of
Chattem’s patch products business (“Acquisition”), in which case this Agreement may be assigned to
the third-party purchaser, but the provisions of Paragraphs 4 (Covenant Not to Sue), 5 (License
Grant) and 6 (Contingent License) shall only apply to the sale of patch products that were offered
for sale by Chattem prior to the date of the Acquisition, and to any new products developed or sold
after the date of the Acquisition. Provided, however, that the provisions of paragraphs 4, 5, and
6 shall not apply to past sales of any patch products that were offered for sale by the acquiring
entity prior to the date of the Acquisition. Chattem may not sublicense any license rights that
they may obtain under Paragraphs 5 and 6 of this Agreement to any third-party, except as provided
herein or in connection with an arrangement for the manufacture of patch products to be sold by or
to Chattem or its direct or indirect customers, distributors or manufacturers under a Chattem brand
or to be “private-labeled” by a customer of Chattem.

17. Counterparts. This Agreement shall be executed in two (2) counterparts, whereby
LecTec and Chattem shall each execute a duplicate original thereof, and each counterpart shall have
the same force and effect as an original and shall constitute an effective, binding agreement on
the part of each of the undersigned.

 

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IN WITNESS WHEREOF, LecTec and Chattem have caused this Agreement to be executed by their duly
authorized representatives, whose signatures appear below.

	 	 	 	 	 	 	 
	Chattem, Inc.	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ Robert Long
	 	 	 	Dated: March 23, 2011
	 

	 	 

Robert Long,
	 	 	 	 
	 

	 	Vice President and Chief Financial Officer	 	 	 	 
	 
	 	 	 	 	 	 
	LecTec Corporation	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ Greg Freitag
	 	 	 	Date: March 22, 2011
	 

	 	 

Greg Freitag
	 	 	 	 
	 

	 	Chief Executive Officer	 	 	 	 

 

10Exhibit 10.1

EXECUTION VERSION

PURCHASE AND SALE AGREEMENT

between

LEXINGTON HOTEL, LLC,

as SELLER,

and

DIAMONDROCK NY LEX OWNER, LLC,

as PURCHASER

Dated as of May 12, 2011

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	1. DEFINITIONS
	 	 	1	 
	2. PURCHASE AND SALE; PROPERTY NOT INCLUDED IN SALE
	 	 	1	 
	3. PURCHASE PRICE; DEPOSIT
	 	 	4	 
	4. RIGHTS OF INSPECTION AND CONFIDENTIALITY
	 	 	5	 
	5. ESCROW AGENT; ESCROW PROVISIONS
	 	 	9	 
	6. STATUS OF THE TITLE
	 	 	11	 
	7. TITLE INSURANCE, LIENS
	 	 	12	 
	8. APPORTIONMENTS
	 	 	15	 
	9. EMPLOYEES
	 	 	23	 
	10. COVENANTS OF SELLER; APPROVALS
	 	 	28	 
	11. CONDITIONS PRECEDENT TO CLOSING
	 	 	30	 
	12. FIRPTA COMPLIANCE
	 	 	31	 
	13. REPRESENTATIONS AND WARRANTIES
	 	 	31	 
	14. DAMAGE AND DESTRUCTION
	 	 	37	 
	15. CONDEMNATION
	 	 	39	 
	16. BROKERS AND ADVISORS
	 	 	40	 
	17. TRANSFER TAXES AND RECORDING CHARGES; OTHER COSTS
	 	 	41	 
	18. DELIVERIES TO BE MADE ON THE CLOSING DATE
	 	 	41	 
	19. CLOSING DATE
	 	 	45	 
	20. NOTICES
	 	 	46	 
	21. DEFAULT BY PURCHASER OR SELLER
	 	 	48	 
	22. MISCELLANEOUS
	 	 	53	 
	23. ESTOPPELS
	 	 	58	 
	24. PROPERTY CONVEYED “AS IS” AND DISCLAIMER OF REPRESENTATIONS AND WARRANTIES
	 	 	58	 
	25. EXCULPATION
	 	 	60	 
	26. FRANCHISE AGREEMENT
	 	 	60	 
	27. PRESS RELEASES
	 	 	62	 
	28. ASSIGNMENT OF MORTGAGE
	 	 	62	 
	29. TAX CONSIDERATIONS
	 	 	63	 

 

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TABLE OF CONTENTS

(continued)

Schedules

	 	 	 
	A

	 	Definitions
	B

	 	Legal Description of the Land
	C-1

	 	List of Contracts
	C-2

	 	List of Equipment Leases
	D

	 	Marked Title Commitment
	E-1

	 	List of Leases
	E-2

	 	Tenant Arrearages
	F

	 	Pending Litigation
	G

	 	List of Excluded Personalty
	H

	 	Environmental Reports

Exhibits

	 	 	 
	1

	 	Bargain and Sale Deed
	2

	 	Bill of Sale
	3

	 	FIRPTA Certificate
	4

	 	Title Affidavit
	5

	 	ERISA Letter
	6

	 	Assignment and Assumption of Contracts
	7

	 	General Assignment and Assumption Agreement
	8

	 	Assignment and Assumption of Collective Bargaining Agreement
	9

	 	Escrow Holdback Agreement
	10

	 	Escrow Agreement
	11

	 	Tenant / Contract Service Provider Direction Letter
	12

	 	Franchise Indemnity Agreement
	13

	 	Assignment and Assumption of Leases
	14

	 	Replacement Management Agreement
	15

	 	Representation Bring-Down Certificate
	16

	 	Radisson Consent

 

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PURCHASE AND SALE AGREEMENT

THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) is dated as of May 12, 2011 (the
“Effective Date”) by and between LEXINGTON HOTEL, LLC, a Delaware limited liability
company, having an address c/o Highgate Holdings, Inc., 870 Seventh Avenue, 2nd Floor, New York,
New York 10019 (“Seller”), and DIAMONDROCK NY LEX OWNER, LLC, a Delaware limited liability
company, having an address c/o DiamondRock Hospitality Company, 3 Bethesda Metro Center, Suite
1500, Bethesda, Maryland 20814 (“Purchaser”).

W I T N E S S E T H:

WHEREAS, Seller is the owner and holder of the fee estate in that certain plot, piece and
parcel of land (the “Land”) located at 511 Lexington Avenue, New York, New York, and more
particularly described in Schedule B attached hereto, together with the building and all
other improvements (collectively, the “Building”) located on the Land (the Building and the
Land being sometimes referred to hereinafter, collectively, as the “Premises”);

WHEREAS, a portion of the Premises is currently being operated as that certain hotel commonly
known as “The Radisson Lexington Hotel” (the “Hotel”), which Hotel includes, without
limitation, approximately 712 guest rooms, meeting facilities, conference rooms, restaurants, a
fitness center and retail facilities;

WHEREAS, subject to the terms and conditions set forth in this Agreement, Seller desires to
cause the sale, assignment and transfer of its interests in and to the Property to Purchaser on the
Closing Date, in accordance with the terms and provisions of this Agreement, and Purchaser desires
to purchase the Property from Seller on the Closing Date, upon the terms more particularly set
forth in this Agreement; and

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto covenant and agree as follows:

1. DEFINITIONS.

When used in this Agreement, the capitalized terms shall have the meanings as indicated on
Schedule A attached hereto.

2. PURCHASE AND SALE; PROPERTY NOT INCLUDED IN SALE.

(a) On the Closing Date, Seller shall sell, assign, transfer and convey to Purchaser, and
Purchaser shall purchase and assume from Seller, subject to the terms and conditions of this
Agreement, all of Seller’ right, title and interest in and to the following:

(i) the Premises;

(ii) all easements, licenses, rights of way, privileges and appurtenances and other rights
pertaining to the Premises;

 

 

 

(iii) all tangible personal property owned by Seller and located in the Premises and used
solely in connection with the operation of the Premises, including, without limitation, appliances,
furniture, furnishings, equipment, carpeting, draperies and curtains, tools and supplies,
decorations, china, glassware, linens, silver, utensils and other items of personal property
(excluding cash and deposit accounts), and all vehicles (if any) used in connection with the Hotel,
in all cases subject to depletion, resupply, substitution, replacement and disposition in the
ordinary course of business in accordance with the provisions of this Agreement (collectively, the
“Personalty”);

(iv) (A) to the extent transferable, all existing warranties and guaranties (express or
implied) issued or assigned to Seller in connection with the Premises or the Personalty; (B) all
transferable names, marks, logos and designs, used in the operation or ownership of the Premises or
the Personalty or any part thereof, if any, but specifically excluding any name including
“Radisson” and any and all names, marks and intellectual property licensed under the Franchise
Agreement or otherwise belonging to Franchisor or any of its affiliates, and all derivatives and
cognates thereof and any logos or other identification or trademarks relating thereto (and
Purchaser acknowledges that Seller expressly disclaims any representation or warranty, express or
implied, regarding (i) ownership, right to use or registration of any names, marks, logos, designs
or other intellectual property, or (ii) whether use of any intellectual property violates any
ownership or other rights of any third parties); (C) all transferable licenses, franchises (subject
to the provisions of Section 26 hereof) and permits owned by Seller and used in or relating
to the ownership, occupancy or operation of the Premises or the Personalty or any part thereof,
subject to Purchaser’s compliance with any limitations or restrictions on transfer or assignment of
any computer-related materials or software which are contained in any license or similar agreement;
(D) all assignable telephone numbers, TWX numbers, post office boxes, signage rights, utility and
development rights and privileges, general intangibles, business records, site plans, surveys,
environmental and other physical reports, plans and specifications pertaining to the Premises and
the Personalty; and (E) all assignable websites and domains used exclusively for the Hotel,
including access to the FTP files of the websites to obtain website information and content
pertaining to the Hotel (the property described in this clause (iii) of Section 2(a) being
herein referred to collectively as the “Intangibles”);

(v) all assignable service, maintenance, supply and other contracts relating to the operation
and maintenance of the Premises or the Personalty or other property used in connection with the
operation of the Premises or the Personalty (collectively, together with any amendments or
modifications thereto, the “Contracts”), which are (A) listed on Schedule C-1, but
excluding the Existing Management Agreement, the Franchise Agreement and any Contracts that are
terminated on or before the Closing in accordance with the provisions of this Agreement, (B) listed
on Schedule C-2 (the “Equipment Leases”), and (C) entered into after the Effective
Date in accordance with the provisions of this Agreement;

 

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(vi) (A) all food and beverages (subject to any legal restrictions pertaining to the sale or
transfer of alcoholic beverages); (B) inventory held for sale to Hotel guests and others in the
ordinary course of business including all opened and unopened retail inventory in any area at the
Hotel conducting retail sales (collectively, “Retail Inventory”); (C) engineering,
maintenance and housekeeping supplies, including soap and cleaning materials, fuel and materials;
stationery and printing items and supplies; and (D) other supplies of all kinds,
whether used, unused or held in reserve storage for future use in connection with the
maintenance and operation of the Premises or the Personalty, in each case to the extent located at
the Premises, together with any additions thereto prior to Closing and subject to depletion,
resupply, substitution, replacement and disposition in the ordinary course of business in
accordance with the provisions hereof (all of the foregoing described in sub-clauses (A) — (D)
being referred to as the “Consumable Inventory” and, to the extent contained in unopened
boxes, bottles, jars or containers of any type as of the Closing Date, shall collectively be
referred to, together with unopened packages of china, glass, silver and linens, as the
“Unopened Inventory”);

(vii) all leases for the lease and occupancy of space at the Premises (collectively, the
“Leases”) which are (A) listed and described on Schedule E attached hereto and made
a part hereof, but excluding any Leases that are terminated on or before the Closing in accordance
with the provisions of this Agreement, and (B) are entered into after the Effective Date in
accordance with the provisions of this Agreement, in each case, including any security deposits
relating to such Leases held by Seller and not applied to the tenant’s obligations as of the
Closing Date. For purposes of this Agreement, the term “Leases” does not include Bookings;

(viii) all accounts receivable of the Hotel and all related operations which are outstanding
and less than one hundred twenty (120) days past due as of the Closing Date (collectively, the
“Receivables”) (which receivables are not included in the Purchase Price and shall be
purchased by Purchaser at Closing for an amount equal to 98% of the amount of those accounts
receivable as set forth on the Hotel’s most current balance sheet);

(ix) subject to Section 8 hereof, all contracts or reservations for the use of guest
rooms, ballroom and banquet facilities, conference facilities, meeting rooms or other facilities of
the Hotel and located within the Premises (“Bookings”), and any deposits held by Seller in
connection with the Bookings not previously applied;

(x) subject to Section 8(j) hereof, Seller’s interest in the funds contained in “house
banks” for the Hotel as of the Cut-Off Time, whether held in the name of Seller, the Hotel or
Manager and owned by Seller (collectively, the “House Bank Funds”). Purchaser expressly
acknowledges and agrees that the Property to be transferred to Purchaser pursuant to this Agreement
does not include any reserve or other accounts created or maintained by or on behalf of Seller or
Manager in connection with the ownership or operation of the Premises; and

(xi) files and records in Seller’s possession or reasonable control and relating to the
Premises (including but not limited to all files and records relating to the Hotel and the
development, operation, management, maintenance, repair, marketing and promotion thereof, such as
financial records and statements, maintenance records, building plans, specifications and drawings,
group and individual guest history records and all reservation and booking records for rooms and
meeting space, regardless of whether such files and records are stored in paper form, on computer
hard drive, computer disk, CD Rom, DVD or other medium).

The items described in sub-clauses (i) through (xi) above shall be referred to
herein collectively as the “Property”.

 

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(b) Notwithstanding anything to the contrary contained in Section 2(a) above, it is
expressly agreed by the parties hereto that the following items are expressly excluded from the
Property to be sold to Purchaser hereunder:

(i) any tangible or intangible property (including, without limitation, fixtures, personal
property or intellectual property) owned or leased by (A) any supplier, vendor, licensor, lessor or
other party under any Contracts, (B) the tenants under any Leases, (C) Manager, (D) Franchisor, (E)
any employees, (F) any guest or customers of the Hotel, or (G) any other third party;

(ii) all cash on hand or on deposit in any operating account or other account or reserve,
except for security deposits held by Seller as landlord with respect to any Lease as of the Closing
Date and the House Bank Funds each of which are to be transferred at Closing subject to the terms
of this Agreement; and

(iii) all personal property listed on Schedule G attached hereto, if any
(collectively, “Excluded Personalty”).

3. PURCHASE PRICE; DEPOSIT.

(a) The purchase price to be paid by Purchaser to Seller for the Property (the “Purchase
Price”) is THREE HUNDRED THIRTY-FIVE MILLION and 00/100 DOLLARS ($335,000,000.00), subject to
apportionment as provided in Section 8 hereof, which shall be payable as follows:

(i) Simultaneously with the execution hereof, Purchaser is delivering to Commonwealth Land
Title Insurance Company, 140 East 45th Street, 22nd Floor, New York, New York
10017, Attention: Peter G. Doyle, as escrow agent (the “Escrow Agent”), via wire transfer
in immediately available federal funds the sum of THIRTY-THREE MILLION FIVE HUNDRED THOUSAND and
00/100 DOLLARS ($33,500,000.00) (the “Deposit”), to be held by Escrow Agent pursuant to the
escrow instructions set forth in Section 5 hereof (the “Escrow Instructions”). It
shall be a condition precedent to the effectiveness of this Agreement that Purchaser shall have
timely delivered the Deposit to Escrow Agent, as provided above.

(ii) At Closing, Seller shall be entitled to retain the Deposit and Purchaser shall deliver to
Seller the balance of the Purchase Price (i.e., the Purchase Price less the Deposit (and
without deduction for any interest accrued thereon), subject to apportionment as provided in
Section 8 hereof. All monies payable by Purchaser under this Agreement, unless otherwise
specified in this Agreement, shall be paid by Purchaser causing such monies to be wire transferred
in immediately available federal funds at such bank account or accounts designated by Seller in
accordance with wiring instructions delivered by Seller prior to Closing, and divided into such
amounts designated by Seller as may be required to facilitate the consummation of the transactions
contemplated by this Agreement.

 

4

 

(b) Seller and Purchaser shall use commercially reasonable efforts, based on the depreciated
book value of the Personalty as set forth in the books and records of Seller, to agree, no later
than three (3) Business Days prior to the Closing Date, upon an allocation of the Purchase Price
among the Real Property and various items of Personalty. If Seller and Purchaser
agree on such allocations, each party agrees to file federal, state and local tax returns
consistent with such allocations agreed upon between the parties. If Seller and Purchaser cannot
agree upon such allocations of the Purchase Price, each party shall file federal, state and local
tax returns based on each party’s own determination of the proper allocations of the Purchase
Price, each bearing its own consequences of any discrepancies.

4. RIGHTS OF INSPECTION AND CONFIDENTIALITY.

(a) Subject to the provisions of this Section 4, Purchaser and/or any of Purchaser’s
agents, employees, attorneys, accountants, consultants, advisors, lenders, investors, inspectors,
appraisers, engineers, contractors, experts, partners, prospective partners, prospective investors,
mortgage brokers and officers (collectively, “Purchaser’s Representatives”) shall have the
right, from time to time, upon reasonable advance notice, and subject to the rights of Manager
under the Existing Management Agreement, guests of the Hotel and the tenants under the Leases, to
enter upon and pass through the Premises during normal business hours to inspect the Premises and
examine the operations of Seller related thereto, including, without limitation, any operating
files maintained by or for the benefit of Seller in connection with the leasing, operation, current
maintenance and/or management of the Property (“Property Information”), including, without
limitation, the Leases, the Contracts, insurance policies, bills, invoices, receipts and other
general records relating to the income and expenses of the Hotel, correspondence, surveys, plans
and specifications, warranties for services and materials provided to the Hotel, environmental
audits and similar materials, materials related to Hotel Employees and the Union, to the extent
Seller is not prohibited by applicable contracts or law from disclosing such materials, and any
other documents relating to the Property in Seller’s or Manager’s possession or reasonable control,
but excluding materials not directly related to the current ownership, maintenance and/or
management of the Property such as, without limitation, Seller’s financial projections, forecasts,
budgets, appraisals, company tax records, internal memoranda, correspondence and reports and
similar proprietary or confidential information. Notwithstanding any such inspection, or anything
to the contrary herein contained, Purchaser’s obligations hereunder shall not be limited or
otherwise affected as a result of any fact, circumstance or other matter of any kind discovered
following the date hereof in connection with any such inspection, access or otherwise; it being
agreed that Seller is permitting Purchaser such right of inspection and access as a courtesy to
Purchaser in its preparation for taking title to the Property. Without limiting the generality of
the foregoing, (i) Purchaser agrees that it shall not have any so-called “due diligence period” and
that it shall have no right to terminate this Agreement or obtain a reduction of the Purchase Price
as a result of any such fact, circumstance or other matter so discovered (including, without
limitation, relating to the physical condition of the Premises, the operations of the Premises or
otherwise) and (ii) Purchaser shall have no right to terminate this Agreement or obtain a return of
the Deposit except as expressly provided in this Agreement.

 

5

 

(b) In conducting any inspection of the Premises, (i) Purchaser shall, and shall cause any of
Purchaser’s Representatives to, at all times comply with the terms and provisions of this Agreement
(if applicable) and all applicable governmental laws, rules and regulations, (ii) Purchaser and
Purchaser’s Representatives shall not enter the Premises unless there is a representative of Seller
present at all times during each such inspection; provided, however, that upon no
less than three (3) Business Days’ advance notice to Seller, Seller shall make a
representative available at reasonable times to accompany Purchaser and/or Purchaser’s
Representatives, (iii) neither Purchaser nor any of Purchaser’s Representatives shall take any of
the following actions: (A) contact or have any discussions with Manager’s on-site managers or
on-site employees, or any other employees working at the Hotel, any guests of the Hotel, any party
to any Contract (other than Seller or Manager), any tenants under the Leases, the Existing Mortgage
Lender (except as provided in Section 28 hereof) or any governmental authority (other than
(x) to perform customary municipal and public record searches, or (y) in connection with obtaining
a temporary or permanent liquor license or the transfer of the Existing Liquor License in
accordance with Section 10(d) below) without in each instance (I) obtaining Seller’s prior
written consent, which consent shall not be unreasonably withheld, and (II) providing Seller with
the option to either attend or participate in any meetings, conversations or communications between
Purchaser and such party or expressly waiving its right to do so in writing (which writing may be
in the form of an email), and Purchaser shall not communicate in any manner with any such party
without satisfying the foregoing, (B) interfere with the business of Seller (or any of its tenants)
or Manager conducted at the Premises or disturb the use or occupancy of any occupant of the
Premises, including any guest of the Hotel, or (C) cause physical damage to the Property or any
portion thereof. Purchaser and Purchaser’s Representatives shall not be permitted to conduct
borings of the Premises or drilling in or on the Premises, or any other invasive testing, in
connection with the preparation of an environmental audit or in connection with any other
inspection of the Property, without the consent of Seller, which consent may be withheld in
Seller’s sole discretion.

(c) Prior to entering the Premises to conduct any such inspection, (i) Purchaser shall obtain,
and during the period of such access shall maintain, at its expense (and shall require and cause
any Purchaser’s Representatives entering the Premises that are independent contractors to obtain
and maintain, at their expense), commercial general liability insurance, including a contractual
liability endorsement, and personal injury liability coverage, naming Seller, Manager and any other
parties that Seller may require to be named (together with each of their respective successors and
assigns), as additional insureds (provided, that Seller has previously furnished to Purchaser the
name and address of any such other party), on a primary and noncontributory basis, from an
Acceptable Purchaser Insurance Company, which insurance policies must have limits for bodily injury
and death of not less than Five Million Dollars ($5,000,000) for any one occurrence and not less
than Five Million Dollars ($5,000,000) for property damage liability for any one occurrence, and
(ii) Purchaser shall furnish to Seller a certificate of insurance evidencing the foregoing
coverages. Such insurance shall state that it shall not be suspended, voided and/or cancelled by
any party, reduced in coverage or in limits except after thirty (30) days’ prior written notice has
been delivered to Seller.

(d) Purchaser agrees to pay to Seller on demand, the reasonable cost of repairing and
restoring any damage to the Property (or portion thereof) caused by Purchaser or Purchaser’s
Representatives, provided that Seller shall have delivered reasonable evidence of such damage and
of the cost incurred by Seller in making such repairs. Any liens against the Premises (or any
portion thereof) arising from the performance of services by third-party contractors in connection
with Purchaser’s inspection of the Premises shall be removed by Purchaser as promptly as
practicable and in any event not later than ten (10) Business Days after Purchaser shall have been
notified of the filing of such liens. The provisions of this Section 4(d) shall survive
the Closing or any termination of this Agreement.

 

6

 

(e) If Purchaser fails to close upon the purchase contemplated by this Agreement in accordance
with the provisions hereof, Purchaser agrees to promptly deliver to Seller copies of any and all
third-party reports, studies, environmental audits, environmental assessments, or other documents
or information prepared for Purchaser or obtained by Purchaser or Purchaser’s Representatives with
respect to the Property, without any representation or warranty; provided, however, that
Purchaser shall not be required to deliver any of the foregoing materials to Seller to the extent
the same contain any information which is proprietary or confidential to third parties to whom
Purchaser owes a duty of confidentiality. The provisions of this Section 4(e) shall
survive any termination of this Agreement.

(f) All inspection fees, appraisal fees, engineering fees and other costs and expenses of any
kind incurred by Purchaser or Purchaser’s Representatives relating to such inspection of the
Property and its other due diligence shall be at the sole expense of Purchaser.

(g) (i) Purchaser acknowledges and agrees that any and all of the Property Information which
is delivered to (or is otherwise made available to) Purchaser or any of Purchaser’s
Representatives by, or at the direction of Seller, or any of its agents or affiliates, including,
without limitation, all information relating to the Property contained in the secure website to
which Purchaser has previously been granted access, or which is prepared by, or for Purchaser or
Purchaser’s Representatives, or which otherwise relates to the Property or is derived in connection
with Purchaser’s or Purchaser’s Representatives’ inspection of the Property, is deemed to be
confidential in nature (collectively, the “Property Confidential Information”). The parties
further acknowledge and agree that the terms and conditions of this Agreement are confidential in
nature (the “Agreement Confidential Information” and, together with the Property
Confidential Information, collectively, the “Confidential Information”). For the purpose of
clarity, each party acknowledges and agrees that there is no obligation to treat as confidential
all or any Confidential Information which was publicly known or available to the public at the time
of disclosure by such party (or such party’s representatives) except where such Confidential
Information was known publicly or available to the public as a result of such disclosure by such
party (or such party’s representatives) made in breach of any term of this Agreement.

(ii) Purchaser shall not disclose, and agrees to use commercially reasonable efforts, and to
act in good faith, to ensure that Purchaser’s Representatives shall not disclose, the contents of
the Confidential Information to any party outside of Purchaser’s organization or Purchaser’s
Representatives. Purchaser’s obligations under this Section 4(g) shall be subject to
Purchaser’s and/or Purchaser’s Representatives right to make disclosures (A) as may be required by
law or a court, (B) pursuant to or in connection with any filings with the Securities and Exchange
Commission or by any rules or regulations of any public stock exchange or stock quotation system,
that may be applicable to Purchaser or any of Purchaser’s direct or indirect constituent owners or
affiliates, and (C) as may be necessary or appropriate to disclose, in Purchaser’s reasonable
judgment, to direct or indirect investors or otherwise in connection with a proposed equity
offering to be made by Purchaser or an Affiliate of Purchaser; provided, that in the case
of sub-clause (A) above, Purchaser will provide Seller with prompt notice so that Seller
may, in its sole discretion, seek a protective order or other appropriate remedy. In the event that
such protective order or other remedy is not obtained, Purchaser will furnish (and Purchaser shall
cause Purchaser’s Representatives to furnish) only that portion of the Confidential Information
which said party is

 

7

 

required to disclose as determined by its counsel. In permitting Purchaser and the Purchaser’s Representatives to review the
Confidential Information, Seller has not waived any privilege or claim of confidentiality with
respect thereto, and no third party benefits or relationships of any kind, either express or
implied, have been offered, intended or created by Seller and any such claims are expressly
rejected by Seller and waived by Purchaser and Purchaser’s Representatives, for whom, by its
execution of this Agreement, Purchaser is acting as an agent with regard to such waiver. Purchaser
shall return to Seller or, with Seller’s prior written consent, destroy all originals and all
copies of the Confidential Information (including, without limitation, any materials prepared by
Purchaser or Purchaser’s Representatives incorporating the Confidential Information) at such time
as this Agreement is terminated, provided that, if this Agreement is terminated by reason of
Seller’s default, Purchaser shall not be required to return materials prepared by Purchaser or
Purchaser’s Representatives. Purchaser further acknowledges that Seller has not made and does not
make any warranty or representation regarding the truth, accuracy or completeness of the Property
Confidential Information or the source(s) thereof. Seller has not undertaken any independent
investigation as to the truth, accuracy or completeness of the Property Confidential Information.
The provisions of this Section 4(g)(ii) shall survive any termination of this Agreement for
a period of twenty-four (24) months.

(h) Purchaser and Principal, jointly and severally hereby agree to indemnify, defend and hold
Seller and its disclosed or undisclosed, direct and indirect shareholders, officers, directors,
trustees, partners, principals, members, employees, agents, contractors, attorneys, accountants,
consultants and any successors or assigns of the foregoing (collectively with Seller, the
“Seller Related Parties” or each a “Seller Related Party”) harmless from and
against any and all losses, costs, damages, liens, claims, liabilities or expenses (including, but
not limited to, reasonable attorneys’ fees, court costs and disbursements) incurred by any of
Seller Related Parties, to the extent they relate to, arise out of or are the result of (i)
Purchaser’s and/or Purchaser’s Representatives’ access to, or inspection of the Property, or any
tests, inspections or other due diligence activities conducted pursuant to this Agreement (except
to the extent any of the forgoing indemnified items are the result of (A) any Seller Related
Parties willful misconduct or gross negligence or (B) pre-existing physical conditions of the
Property which are not exacerbated by Purchaser and/or Purchaser Representatives), and/or (ii) the
breach by Purchaser or Purchaser’s Representatives of the confidentiality requirements and
inspection obligations described in this Section 4. Without limiting the foregoing
indemnity, if (1) Purchaser or Principal pays a Seller Related Party (and such Seller Related Party
actually receives) any amounts relating to the foregoing indemnity claim and (2) any such Seller
Related Party subsequently recovers insurance proceeds in connection with such indemnity claim,
then Seller shall promptly pay (or cause the applicable Seller Related Party to promptly pay) such
insurance proceeds to Purchaser or Principal, as applicable, up to the amount actually received by
any such Seller Related Party from Purchaser or Principal, as applicable, with respect to the
indemnity claim in question. Seller shall have the right (but not the obligation) to cure any of
Purchaser’s and/or Purchaser’s Representatives’ violations of this Section 4. The
provisions of this Section 4(h) shall survive the Closing or any termination of this
Agreement.

 

8

 

5. ESCROW AGENT; ESCROW PROVISIONS.

(a) Upon receipt by Escrow Agent of the Deposit, Escrow Agent shall (i) acknowledge to Seller
and Purchaser its receipt of the Deposit, (ii) cause the Deposit to be
deposited into an interest bearing account at JPMorgan Chase, N.A. or another national bank
selected by Seller and reasonably approved by Purchaser (the “Escrow Bank”), and (iii) hold
the Deposit (together with all interest accrued thereon) in accordance with the Escrow Instructions
as set forth in this Section 5.

(b) Escrow Agent shall deliver the Deposit to Seller or to Purchaser, as the case may be,
pursuant to the terms of this Agreement and under the following conditions:

(i) The Deposit shall be delivered to Seller at the Closing upon receipt by Escrow Agent of a
statement executed by Seller and Purchaser authorizing the release of the Deposit to Seller; or

(ii) The Deposit shall be delivered to Seller following receipt by Escrow Agent of written
demand therefor from Seller stating that Seller is entitled to the Deposit under this Agreement,
which demand shall specify the provision of this Agreement which entitles Seller to the Deposit;
provided, that Purchaser shall not have given written notice of objection in accordance
with the provisions set forth in Section 5(c) hereof; or

(iii) The Deposit shall be delivered to Purchaser following receipt by Escrow Agent of written
demand therefor from Purchaser stating that Purchaser is entitled to the return of the Deposit
under this Agreement, which demand shall specify the provision of this Agreement which entitles
Purchaser to the return of the Deposit; provided, that Seller shall not have given written
notice of objection in accordance with the provisions set forth in Section 5(c) hereof; or

(iv) The Deposit shall be delivered to Purchaser or Seller as directed by the joint written
instruction of Seller and Purchaser (which instruction may be delivered separately by each of
Seller and Purchaser).

(c) Upon the filing of a written demand for the Deposit by Seller or Purchaser, pursuant to
Section 5(b)(ii) or Section 5(b)(iii) hereof, Escrow Agent shall promptly give
notice thereof (including a copy of such demand) to the other party. The other party shall have the
right to object to the delivery of the Deposit, by giving written notice of such objection to
Escrow Agent at any time within ten (10) days after such party’s receipt of notice from Escrow
Agent, but not thereafter. Such notice shall set forth the basis (in reasonable detail) for
objecting to the delivery of the Deposit. Upon receipt of such notice of objection, Escrow Agent
shall promptly give a copy of such notice to the party who filed the written demand. If Escrow
Agent shall have timely received such notice of objection, Escrow Agent shall continue to hold the
Deposit, and the interest accrued thereon, until (i) Escrow Agent receives written joint notice
from Seller and Purchaser directing the disbursement of the Deposit (which notice may be delivered
separately by each of Seller and Purchaser), in which case Escrow Agent shall then disburse the
Deposit, and the interest accrued thereon, in accordance with said direction, or (ii) litigation is
commenced between Seller and Purchaser, in which case Escrow Agent shall deposit the Deposit, and
the interest accrued thereon, with the clerk of the court in which said litigation is pending, or
(iii) Escrow Agent takes such affirmative steps as Escrow Agent may elect, at Escrow Agent’s
option, in order to terminate Escrow Agent’s duties hereunder, including, but not limited to,
depositing the Deposit, and the interest accrued thereon, in court and commencing
an action for interpleader, the costs thereof to be borne by whichever of Seller or Purchaser
is the losing party in such interpleader action, as determined by a final non-appealable order of
such court.

 

9

 

(d) Escrow Agent may rely and act upon any instrument or other writing reasonably believed by
Escrow Agent to be genuine and purporting to be signed and presented by any person or persons
purporting to have authority to act on behalf of Seller or Purchaser, as the case may be, and shall
not be liable in connection with the performance of any duties imposed upon Escrow Agent by the
provisions of this Agreement, except for Escrow Agent’s own negligence, willful misconduct or
default. Escrow Agent shall have no duties or responsibilities except those set forth herein.
Escrow Agent shall not be bound by any modification, cancellation or rescission of this Agreement
unless the same is in writing and signed by Purchaser and Seller, and, if Escrow Agent’s duties
hereunder are affected, unless Escrow Agent shall have given prior written consent thereto. Escrow
Agent shall be reimbursed by Seller and Purchaser for any actual out-of-pocket expenses (including
reasonable legal fees and disbursements of outside counsel), including all of Escrow Agent’s fees
and expenses with respect to any interpleader action incurred in connection with this Agreement,
and such liability shall be joint and several; provided, however, that, as between
Purchaser and Seller, the prevailing party in any dispute over the Deposit shall be entitled to
reimbursement by the losing party of any such expenses paid to Escrow Agent. In the event that
Escrow Agent shall be uncertain as to Escrow Agent’s duties or rights hereunder, or shall receive
instructions from Purchaser or Seller that, in Escrow Agent’s opinion, are in conflict with any of
the provisions hereof, Escrow Agent shall be entitled to hold the Deposit, and the interest accrued
thereon, and may decline to take any other action. After delivery of the Deposit, and the interest
accrued thereon, in accordance herewith, Escrow Agent shall have no further liability or obligation
of any kind whatsoever.

(e) Escrow Agent shall have the right at any time to resign upon ten (10) Business Days’ prior
notice to Seller and Purchaser. Seller and Purchaser shall jointly select a successor Escrow Agent
and shall notify Escrow Agent of the name and address of such successor Escrow Agent within ten
(10) Business Days after receipt of notice of Escrow Agent of its intent to resign. If Escrow Agent
has not received notice of the name and address of such successor Escrow Agent within such period,
Escrow Agent shall have the right to select on behalf of Seller and Purchaser a bank or trust
company licensed to do business in the State of New York and having a branch located in New York
County to act as successor Escrow Agent hereunder. At any time after the ten (10) Business Day
period, Escrow Agent shall have the right to deliver the Deposit, and the interest accrued thereon,
to any successor Escrow Agent selected hereunder, provided such successor Escrow Agent shall
execute and deliver to Seller and Purchaser an assumption agreement whereby it assumes all of
Escrow Agent’s obligations hereunder. Upon the delivery of all such amounts and such assumption
agreement, the successor Escrow Agent shall become the Escrow Agent for all purposes hereunder and
shall have all of the rights and obligations of Escrow Agent hereunder, and the resigning Escrow
Agent shall have no further responsibilities or obligations hereunder.

 

10

 

(f) The interest earned on the Deposit shall be paid to the party entitled to receive the
Deposit as expressly provided in this Agreement. At the Closing, Seller shall be entitled to retain
the Deposit (together with all interest accrued thereon) and Purchaser shall
deliver the balance of the Purchase Price (i.e., the Purchase Price less the Deposit (but
without deduction for any interest accrued thereon)) to Seller, as adjusted pursuant to Section
8 hereof. At the Closing, Purchaser shall not be entitled to any credit against the Purchase
Price with respect to any such interest paid to Seller. The party receiving such interest shall pay
any income taxes thereon. The provisions of this Section 5(f) shall survive the Closing or
termination of this Agreement.

(g) At the Closing, Escrow Agent shall execute and deliver the Escrow Holdback Agreement and
the Escrow Agreement (if applicable pursuant to Section 21(c)(ii)(B) of this Agreement) to
Seller and Purchaser.

6. STATUS OF THE TITLE.

Subject to the terms and provisions of this Agreement, Seller’s interest in the Premises shall
be sold, assigned and conveyed by Seller to Purchaser, and Purchaser shall accept same, subject to
the following (collectively, the “Permitted Encumbrances”):

(a) those matters set forth in Schedule B-II of the Commitment attached hereto as Schedule
D, which are not marked as “Omit”;

(b) (i) any state of facts disclosed by that certain survey of the Land prepared by S.P.
Belcher and dated October 25, 1920, and most recently updated by visual examination on August 31,
2006 by Roland K. Link (the “Existing Survey”), and (ii) any matters disclosed in any
update to the Existing Survey or any future survey (for example, minor encroachments), that do not
affect the use, operations, or marketability of the Property and are otherwise immaterial;

(c) Non-Objectionable Encumbrances and any liens, encumbrances or other title exceptions
approved or waived by Purchaser as provided in Section 7;

(d) Property Taxes which are a lien but not yet due and payable;

(e) any laws, rules, regulations, statutes, ordinances, orders or other legal requirements
affecting the Premises, including, without limitation, those relating to zoning and land use;

(f) all violations of laws, rules, regulations, statutes, ordinances, orders or requirements
(“Violations”) now or hereafter issued or noted;

(g) any utility company rights, easements and franchises for electricity, water, steam, gas,
telephone or other service or the right to use and maintain poles, lines, wires, cables, pipes,
boxes, and other fixtures and facilities in, over, under and upon the Premises either shown on the
Existing Survey or consistent with the present use of the Premises;

(h) any matters that are (x) required by the Franchise Agreement or (y) otherwise permitted or
consented to by Purchaser in accordance with this Agreement;

(i) the rights of Franchisor under the Franchise Agreement;

 

11

 

(j) the rights of tenants under the Leases; and

(k) the rights of Hotel guests which occupy the Hotel or have a reservation for rooms, food
and beverages, meetings and other customary Hotel uses relating to periods subsequent to the
Closing Date to the extent such rights were granted or such reservations were made in the ordinary
course of business.

7. TITLE INSURANCE, LIENS.

(a) (i) Purchaser acknowledges that it has received and has reviewed (A) a title commitment or
title report for an owner’s policy of title insurance, dated April 29, 2011 (Reference No.
NY110378) (the “Commitment”) from Commonwealth Land Title Insurance Company, 140 East
45th Street, 22nd Floor, New York, New York 10017, Attention: Peter G. Doyle
((212) 973-6209; email: pdoyle@cltic.com) (the “Title Company”), and (B) the Existing
Survey. Purchaser agrees that its agreement to acquire the Property at Closing in its “AS IS”
condition as set forth in Section 24 hereof shall include its agreement to acquire the
Property subject to the Permitted Encumbrances and any other matters set forth in the Commitment
(which are not marked as “Omit” on the Commitment attached hereto as Schedule D), such
matters that are marked as “Omit” are referred to herein collectively as the “Omitted
Exceptions”). Seller acknowledges and agrees that, at or prior to the Closing, Seller shall
cure, or otherwise cause to be removed, the Omitted Exceptions such that the same shall not appear
as Schedule B exceptions on Purchaser’s title policy to be obtained in accordance with Section
7(a)(vi) hereof. After the Effective Date and prior to the Closing Date, Purchaser shall have
the right to object to any new title exception, encumbrance or lien on title which is reflected in
any updates to the Commitment (but not set forth in the Commitment) or any updates to the Existing
Survey (but not reflected in the Existing Survey) (each an “Update Notice”), by delivery
of written notice (“Purchaser’s Objection Notice”) to Seller and Seller’s attorneys, on or
prior to the date which is five (5) Business Days after Purchaser’s receipt of the Update Notice,
but only if same is not a Permitted Encumbrance (a “Title Objection”). If Purchaser shall
deliver a Purchaser’s Objection Notice, any Title Objection which is not objected to in such
Purchaser’s Objection Notice, but which was reflected in the Commitment, the Existing Survey, any
updates to the Commitment or any updates to the Existing Survey that was the subject of such
Purchaser’s Objection Notice, shall not constitute a Title Objection, but shall be deemed a
Permitted Encumbrance. If Purchaser receives an Update Notice of said new matter less than five (5)
Business Days prior to the then Scheduled Closing Date, then Purchaser must deliver any such
Purchaser’s Objection Notice prior to the then Scheduled Closing Date. Notwithstanding anything
herein to the contrary, Purchaser shall not be entitled to object to, and shall be deemed to have
approved, any liens, encumbrances or other title exceptions (and the same shall not constitute
Title Objections but shall be deemed Permitted Encumbrances) (x) over which the Title Company is
willing to insure (without additional cost to Purchaser or where Seller pays such cost for
Purchaser) or against which the Title Company is willing to provide affirmative insurance (without
additional cost to Purchaser or where Seller pays such cost for Purchaser), (y) which will be
extinguished upon the transfer of the Property to Purchaser, or (z) which cannot be cured or
removed by the payment of a liquidated sum of money or the use of commercially reasonable efforts
and do not materially adversely affect the value, use or operation or marketability of the title
to, the Premises, (collectively, the “Non-Objectionable Encumbrances”).

 

12

 

(ii) Except as set forth in Section 7(a)(iii) hereof, it is expressly understood that
in no event shall Seller be required to bring any action or institute any proceeding, or to
otherwise incur any costs or expenses, in order to attempt to eliminate any Title Objections or to
otherwise cause title in the Premises to be in accordance with the terms of this Agreement on the
Closing Date. Seller shall notify Purchaser (“Seller’s Response Notice”) within five (5)
Business Days of Seller’s receipt of Purchaser’s Objection Notice as to whether Seller is prepared
to cure the Title Objections identified in Purchaser’s Objection Notice. Seller’s failure to
furnish Seller’s Response Notice within said five (5) Business Day period shall be deemed to
constitute Seller’s election not to cure said Title Objections. In the event Seller notifies (or is
deemed to have notified) Purchaser that Seller is unable or unwilling to cure any of the Title
Objections, then Purchaser shall elect by providing written notice to Seller (a “Purchaser’s
Election Notice”) to either terminate this Agreement, in which case Purchaser shall receive a
refund of the Deposit (together with all interest accrued thereon), or to proceed to Closing and
accept title to the Premises subject to the Title Objections without any liability or obligation on
the part of Seller by reason of such Title Objections and without any abatement of the Purchase
Price. In the event Purchaser fails to furnish Purchaser’s Election Notice to Seller within five
(5) Business Days following Seller’s Response Notice (or within five (5) Business Days following
the date Seller is deemed to have elected not to cure said Title Objections, if Seller has not
timely furnished a Seller’s Response Notice), then Purchaser shall be deemed to have waived its
right to object to any such Title Objection (and the same shall no longer constitute a Title
Objection, but shall instead be deemed a Permitted Encumbrance).

(iii) Notwithstanding the foregoing, Seller shall, on or before the Closing, be obligated to
remove (A) all mortgages (collectively, “Mortgages”) which affect the Property, including,
without limitation, the Existing Mortgage to the extent the same is not assigned to Purchaser’s
lender(s) pursuant to and in accordance with Section 28 hereof; (B) all mechanics’,
laborers’ or materialmens’ liens affecting the Property which arise from work performed by or on
behalf of Seller or any other Seller Related Parties; (C) all judgment and tax liens affecting the
Property, which are against Seller (collectively, “Monetary Liens”); and (D) any Title
Objections which would not fall within the definition of sub-clauses (A), (B) or
(C) above and which can be removed by the payment of a liquidated sum of money,
provided, however, that with respect to such items set forth in this sub-clause
(D), in no event shall Seller be obligated to expend an amount in excess of the Pre-Closing
Claim Amount (in the aggregate for all matters under this Agreement to which the Pre-Closing Claim
Amount is applicable) pursuant to the provisions of this sentence. Notwithstanding the foregoing,
if a Monetary Lien is bonded over by Seller or others at Closing such that it is omitted from the
Commitment and Purchaser’s title policy (or is otherwise insured over by the Title Company), then
such Monetary Lien shall be deemed to be a Non-Objectionable Encumbrance.

(iv) Any liens or encumbrances (collectively, “Tenant Lien”) created by or against a
Tenant shall neither be a Monetary Lien nor a Title Objection. Notwithstanding anything to the
contrary contained in this Agreement, Seller shall have no obligation to pay, satisfy, discharge or
remove of record (or cause to be paid, satisfied, discharged or removed of record) any Tenant Lien;
provided, that Seller shall use commercially reasonable efforts to enforce its rights, as
landlord under its lease with a Tenant, to cause said Tenant to pay, satisfy, discharge or remove
of record a Tenant Lien promptly after Seller’s becoming apprised of the existence of such Tenant
Lien.

 

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(v) Subject to the express provisions of this Section 7(a), if Seller is unable to
eliminate the Title Objections by the Scheduled Closing Date, unless the same are waived by
Purchaser without any abatement in the Purchase Price, Seller may, upon prior notice (“Title
Cure Notice”) to Purchaser, adjourn the Scheduled Closing Date for up to sixty (60) days in
order to attempt, as expeditiously as possible, to eliminate such Title Objections.

(vi) At the Closing, Purchaser shall obtain title insurance from the Title Company (on a
direct basis through Peter G. Doyle ((212) 973-6209; e-mail: pdoyle@cltic.com), with (x) Royal
Abstract of New York LLC, 500 Fifth Avenue, Suite 1540, New York, New York 10110, Attention: Martin
Kravet ((212) 376-0900; e-mail: mkravet@royalabstract.com), (y) National Land Tenure Company, LLC,
1122 Franklin Avenue, Suite 400, Garden City, New York 11530, Attention: Matthew M. Miller ((516)
227-0800; email: mmillernlt@hotmail.com), and (z) First American Title Insurance Company, 1801 K
Street NW, Suite 200-K, Washington, DC 20006 (collectively, the “Co-Insurers”) as
co-insurers with the Title Company, with respect to Purchaser’s acquisition of the Property and any
financing obtained in connection therewith. The Title Company and the Co-Insurers shall provide
title insurance (owner and mortgagee policies) for any of the transactions contemplated under this
Agreement in the following percentages: (i) the Title Company, 40%, (ii) Royal Abstract of New York
LLC, 25%, (iii) National Land Tenure Company, LLC, 25%, and (iv) First American Title Insurance
Company, 10%.

(vii) Purchaser, at its sole cost and expense, shall pay at the Closing all premiums, charges
and disbursements required by the Title Company in accordance with its rates for issuance of the
title insurance policies and issuance of any endorsements the Purchaser may request. The provisions
of this Section 7(a)(vii) shall survive Closing and delivery of the Deed.

(b) In no event shall any lien, encumbrance or other exception arising as a result of any act
or omission of Purchaser or anyone acting on behalf of Purchaser be deemed a Title Objection.

(c) Purchaser agrees to purchase the Premises subject to any and all Violations, or any
condition or state of repair or disrepair or other matter or thing, whether or not noted, which, if
noted, would result in a Violation being placed on the Premises. Seller shall have no duty to
remove or comply with or repair any condition, matter or thing whether or not noted, which, if
noted, would result in a violation being placed on the Premises. Seller shall have no duty to
remove or comply with or repair any of the aforementioned Violations, or other conditions, and
Purchaser shall accept the Premises subject to all such Violations, the existence of any conditions
at the Premises which would give rise to such Violations, if any, and any governmental claims
arising from the existence of such Violations, in each case without any abatement of or credit
against the Purchase Price.

 

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8. APPORTIONMENTS.

(a) The following shall be apportioned between Seller and Purchaser as of 11:59 p.m. (the
“Cut-Off Time”) on the day immediately preceding the Closing Date (the “Apportionment
Date”) on the basis of the actual number of days of the month which shall have elapsed as of
the Closing Date and based upon the actual number of days in the month and a 365
day year, such that Purchaser shall be treated as the owner of the Property for purposes of
prorations of income and expenses, on and after the day of Closing:

(i) Subject to Section 8(d), prepaid rents, fixed rents and additional rents payable
pursuant to Leases (including, without limitation, operating expense escalation payments, real
estate tax escalation payments and percentage rent, if any, payable under the Leases)
(collectively, “Rents”);

(ii) real estate taxes, sewer rents and taxes, water rates and charges (to the extent not
accounted for pursuant to sub-clause (iii) below), vault charges and taxes, business
improvement district taxes and assessments and any other governmental taxes, charges or assessments
levied or assessed against the Premises (collectively, “Property Taxes”), on the basis of
the respective periods for which each is assessed or imposed, are to be apportioned in accordance
with Section 8(b) below;

(iii) charges for all utilities and other due and unpaid operating expenses shall be paid by
Seller (and apportioned if necessary) in accordance with Section 8(c) hereof;

(iv) prepaid fees for licenses and other permits assigned to Purchaser at the Closing (which
cover any period after the Closing);

(v) any amounts prepaid or payable by Seller under Contracts (if any) which are to be assumed
by Purchaser at Closing;

(vi) administrative charges, if any, permitted under the Leases or applicable law, on security
deposits held pursuant to the Leases;

(vii) Subject to Section 8(e), wage and fringe benefits (including, without
limitation, vacation pay, sick days, health, welfare, pension and disability benefits) and other
compensation payable to all Hotel Employees.

(viii) all other operating expenses with respect to the Premises to the extent such matters
are customarily apportioned in connection with real estate closings of hotel properties located in
New York, New York.

(b) (i) Property Taxes shall be apportioned on the basis of the fiscal period for which
assessed. If the Closing Date shall occur either before an assessment is made or a tax rate is
fixed for the tax period in which the Closing Date occurs, the apportionment of such Property Taxes
based thereon shall be made at the Closing Date by applying the tax rate for the preceding year to
the latest assessed valuation, but promptly after the assessment and/or tax rate for the current
year are fixed, the apportionment thereof shall be recalculated and Seller or Purchaser, as the
case may be, shall make an appropriate payment to the other within five (5) Business Days based on
such calculation. If as of the Closing Date the Premises or any portion thereof shall be affected
by any special or general assessments which are or may become payable in installments of which the
first installment is then a lien or has become payable, Seller shall pay the unpaid installments of
such assessments which are due prior to the Closing Date and Purchaser shall pay the installments
which are due on or after the Closing Date.

 

15

 

(ii) Seller may file and/or prosecute an application for the reduction of the assessed
valuation of the Premises or any portion thereof for real estate taxes or a refund of Property
Taxes previously paid (a “Tax Certiorari Proceeding”) to the City of New York for any
fiscal year. Seller shall have the right to withdraw, settle or otherwise compromise Tax Certiorari
Proceedings affecting real estate taxes assessed against the Premises (A) for any fiscal period
prior to the fiscal year in which the Closing shall occur without the prior consent of Purchaser,
and (B) for the fiscal year in which the Closing shall occur or any fiscal year thereafter,
provided Purchaser shall have consented with respect thereto, which consent shall not be
unreasonably withheld or delayed. The amount of any tax refunds (net of attorneys’ fees and other
costs of obtaining such tax refunds) with respect to any portion of the Premises for the tax year
in which the Apportionment Date occurs shall be apportioned between Seller and Purchaser as of the
Apportionment Date. If, in lieu of a tax refund, a tax credit is received with respect to any
portion of the Premises for the tax year in which the Apportionment Date occurs, then (x) within
thirty (30) days after receipt by Seller or Purchaser, as the case may be, of evidence of the
actual amount of such tax credit (net of attorneys’ fees and other costs of obtaining such tax
credit), the tax credit apportionment shall be readjusted between Seller and Purchaser, and (y)
upon realization by Purchaser of a tax savings on account of such credit, Purchaser shall pay to
Seller an amount equal to the savings realized (as apportioned). All refunds, credits or other
benefits applicable to any fiscal period prior to the fiscal year in which the Closing shall occur
shall belong solely to Seller (and Purchaser shall have no interest therein) and, if the same shall
be paid to Purchaser or anyone acting on behalf of Purchaser, same shall be paid to Seller within
thirty (30) days following receipt thereof and, if not timely paid, with interest thereon from the
thirtieth (30th) day following such receipt until paid to Seller at a rate equal to ten percent
(10%) per annum. All refunds, credits or other benefits applicable to any fiscal period following
the fiscal year in which the Closing shall occur shall belong solely to Purchaser (and Seller shall
have no interest therein) and, if the same shall be paid to Seller or anyone acting on behalf of
Seller, same shall be paid to Purchaser within thirty (30) days following receipt thereof and, if
not timely paid, with interest thereon from the thirtieth (30th) day following such receipt until
paid to Purchaser at a rate equal to ten percent (10%) per annum. Purchaser agrees to reasonably
cooperate with Seller in all such Tax Certiorari Proceedings. To the extent received by either
party, sums payable to the other party hereunder shall be held by the receiving party as a trust
fund, and remitted to the other party within thirty (30) days of receipt. Purchaser shall assume
all liabilities under the property tax certiorari agreements with respect to the Property between
Ditchik & Ditchik LLP and Seller, including, without limitation any fees or other amounts payable
to Ditchik & Ditchik LLP thereunder, true, correct and complete copies of which have been provided
to Purchaser.

(c) Purchaser and Seller hereby acknowledge and agree that the amounts of all telephone,
electric, gas, steam, sewer, water bills, trash removal bills, janitorial and maintenance service
bills and other utility bills (collectively, “Utilities”) relating to the Premises and
allocable to the period prior to the Closing Date shall be determined and paid by Seller before
Closing, if possible, or shall be paid thereafter by Seller or adjusted between Purchaser and
Seller after the same have been determined. Seller shall attempt to have all utility meters read as
of the day immediately preceding the Closing Date. Seller shall promptly pay all unpaid bills,
which obligation shall survive Closing. At Closing, Seller shall receive a credit for all
refundable cash or other deposits posted with utility companies serving the Premises or any
governmental agencies or authorities or posted pursuant to any Contract, or, at Seller’s
option, Seller shall be entitled to receive and retain such refundable cash and deposits.

 

16

 

(d) (i) Monthly base rents (collectively, “Base Rents”) under the Leases shall be
adjusted and prorated on an if, as and when collected basis. Base Rents collected by Purchaser or
Seller after the Closing Date from tenants who owe Base Rents for periods prior to the Closing
Date, shall be applied, (A) first to rents due and payable for the calendar month in which the
Closing occurs, (B) next to all rents due and payable for the period after the calendar month in
which the Closing occurs, and (C) next to all rents due and payable for the period preceding the
calendar month in which the Closing occurs. Each such amount, less reasonable collection costs,
shall be adjusted and prorated as provided above, and the party receiving such amount shall, within
five (5) Business Days, pay to the other party the portion thereof to which it is so entitled.

(ii) Purchaser shall bill tenants owing Base Rents for periods prior to the Closing Date as
are set forth on such updated arrearage schedule, on a monthly basis and Purchaser shall use
commercially reasonable efforts to collect such past due Base Rents; provided, that
Purchaser shall have no obligation to commence any actions or proceedings to collect any such past
due Base Rents. Rents collected by Purchaser after the Closing Date to which Seller is entitled
shall be paid to Seller within five (5) Business Days after receipt thereof by Purchaser. Purchaser
shall provide Seller with monthly reports setting forth the status of such collection efforts.
With respect to tenants who are not, at the time in question, in occupancy of any portion of the
Premises, Seller may take all steps it deems appropriate, including litigation, to collect Base
Rents delinquent as of the Closing Date which are still uncollected, and Seller shall give
Purchaser written notice of any such actions taken to pursue such tenants. With respect to tenants
who are, at the time in question, in occupancy of any portion of the Premises, Seller shall not
take any action to pursue such tenants to collect such delinquencies (including, without
limitation, litigation, seeking eviction of any tenant or causing any Lease to be terminated).

(iii) With respect to any Lease that provides for the payment of additional or escalation rent
based upon (A) a percentage of a tenant’s gross sales during a specified annual or other period or
(B) increases in real estate taxes, operating expenses, labor costs, cost of living indices or
porter’s wages (collectively, “Overage Rent”), such Overage Rent shall be adjusted and
prorated on an if, as and when collected basis.

(iv) Purchaser shall (A) promptly render bills for any Overage Rent payable for any accounting
period that expired prior to the Closing Date, but which is to be paid after the Closing Date; (B)
bill tenants for such Overage Rent attributable to an accounting period that expired prior to the
Closing Date; and (C) use commercially reasonable efforts in the collection of such Overage Rent;
provided, that Purchaser shall have no obligation to commence any actions or proceedings to
collect any such Overage Rent. With respect to tenants who are not, at the time in question, in
occupancy of any portion of the Premises, Seller shall have the right to pursue tenants to collect
such delinquencies (including, without limitation, the prosecution of one or more lawsuits) and
Seller shall give Purchaser written notice of any such actions taken to pursue such tenants. With
respect to tenants who are, at the time in question, in occupancy of any portion of the Premises,
Seller shall not take any action to pursue such tenants
to collect such delinquencies (including, without limitation, litigation, seeking eviction of
any tenant or causing any Lease to be terminated). Seller shall furnish to Purchaser all
information relating to the period prior to the Closing Date necessary for the billing of such
Overage Rent, and Purchaser shall deliver to Seller, concurrently with delivery to tenants, copies
of all statements relating to Overage Rent for any period prior to the Closing Date, including the
aforementioned updated arrearage schedule. Purchaser shall bill tenants for Overage Rents for
accounting periods prior to the Closing Date in accordance with and on the basis of such
information furnished by Seller.

 

17

 

(v) Overage Rent payable for the accounting period in which the Closing Date occurs shall be
apportioned between Seller and Purchaser based upon the ratio that the portion of such accounting
period prior to the Closing Date bears to the entire such accounting period. If, prior to the
Closing Date, Seller receives any installments of Overage Rent attributable to Overage Rent for
periods from and after the Closing Date, such sums (less reasonable collection costs actually
incurred by Seller) shall be apportioned at the Closing Date. If Purchaser receives any
installments of Overage Rent attributable to Overage Rent for periods prior to the accounting
period in which the Closing Date occurs, such sums (less reasonable collection costs actually
incurred by Purchaser) shall be paid to Seller within five (5) Business Days after Purchaser
receives payment thereof.

(vi) Any payment by tenants of Overage Rent shall be applied to Overage Rent then due and
payable in the following order of priority: (A) first, in payment of Overage Rent for the
accounting period in which the Closing Date occurs (subject to apportionment pursuant to this
Section 8), (B) second, in payment of Overage Rent for the accounting period following the
one in which the Closing Date occurs, and (C) third, in payment of Overage Rent for the period
preceding the accounting period in which the Closing Date occurs.

(vii) To the extent any portion of Overage Rent is required to be paid monthly by tenants on
account of estimated amounts for the current period, and at the end of each calendar year (or, if
applicable, at the end of each lease year or tax year or any other applicable accounting period),
such estimated amounts are to be recalculated based upon the actual expenses, taxes and other
relevant factors for that calendar (lease or tax) year, with the appropriate adjustments being made
with such tenants, then such portion of the Overage Rent shall be prorated between Seller and
Purchaser on the Closing Date based on such estimated payments (i.e., with (x) Seller entitled to
retain all monthly installments of such amounts with respect to periods prior to the calendar month
in which the Closing Date occurs, to the extent such amounts are as of the Closing Date estimated
to equal the amounts ultimately due to Seller for such periods), (y) Purchaser entitled to receive
all monthly installments of such amounts with respect to periods following the calendar month in
which the Closing Date occurs, and (z) Seller and Purchaser apportioning all monthly installments
of such amounts with respect to the calendar month in which the Closing Date occurs). At the
time(s) of final calculation and collection from (or refund to) tenants of the amounts in
reconciliation of actual Overage Rent for a period for which estimated amounts have been prorated,
there shall be a re-proration between Seller and Purchaser, with the net credit resulting from such
re-proration, after accounting for amounts required to be refunded to tenants, being payable to the
appropriate party (i.e., to Seller if the
recalculated amounts exceed the estimated amounts and to Purchaser if the recalculated amounts
are less than the estimated amounts).

 

18

 

(viii) To the extent that any amounts are paid or payable to Seller by a tenant under a Lease
in advance of the period to which such expense applies, whether as a one-time payment or in
installments (e.g. for real property tax escalations), such amounts shall be apportioned as
provided above but based upon the period for which such payments were or are being made.

(ix) To the extent tenants pay items of Rent which are not Base Rents or Overage Rent, such as
charges for electricity, steam, water, cleaning, overtime services, sundry charges or other charges
of a similar nature (collectively, “Additional Rent”), such rent shall be applied based on
the period covered by such Additional Rent charge (i.e., the period the applicable work, utility or
service was provided). In the case of any Additional Rent payable for a period that expired prior
to the Closing Date, but which is to be paid after the Closing Date, Purchaser shall pay the entire
amount thereof to Seller within five (5) Business Days after receipt thereof, less any reasonable
collection costs actually incurred. Purchaser shall (A) promptly render bills for any Additional
Rent payable for any period that expired prior to the Closing Date, but which is to be paid after
the Closing Date; (B) bill tenants for such Additional Rent attributable to a period that expired
prior to the Closing Date, on a monthly basis, and (C) use commercially reasonable efforts in the
collection of such Additional Rent; provided, that Purchaser shall have no obligation to
commence any actions or proceedings to collect any Additional Rent. With respect to tenants who are
not, at the time in question, in occupancy of any portion of the Premises, Seller shall have the
right to pursue tenants to collect such delinquencies (including, without limitation, the
prosecution of one or more lawsuits) and Seller shall give Purchaser written notice of any such
actions taken to pursue such tenants. With respect to tenants who are, at the time in question, in
occupancy of any portion of the Premises, Seller shall not take any action to pursue such tenants
to collect such delinquencies (including, without limitation, litigation, seeking eviction of any
tenant or causing any Lease to be terminated). Seller shall furnish to Purchaser all information
relating to the period prior to the Closing Date necessary for the billing of such Additional Rent,
and Purchaser shall deliver to Seller, concurrently with delivery to tenants, copies of all
statements relating to Additional Rent for any period prior to the Closing Date, including the
aforementioned updated arrearage schedule. Purchaser shall bill tenants for Additional Rent
relating to periods prior to the Closing Date in accordance with and on the basis of such
information furnished by Seller. Additional Rent payable for the period in which the Closing Date
occurs shall be apportioned between Seller and Purchaser based upon the same method used to
apportion the underlying expense being billed to such tenant, or if such expense is not being
apportioned, then based upon the ratio that the portion of such accounting period prior to the
Closing Date bears to the entire such accounting period.

(x) To the extent any payment received from a tenant after Closing does not indicate whether
the payment is for an item of Base Rent, Overage Rent or Additional Rent, and the same cannot be
clearly determined from the context of such payment, then such payment will be applied (x) first to
payment of any Base Rent then due or delinquent, in accordance with paragraphs (i) and
(ii) above, (y) second to payment of any Additional Rent then
due or delinquent, in accordance with paragraph (x) above and (z) third to any Overage
Rent then due or delinquent, in accordance with paragraphs (iii)-(ix) above.

 

19

 

(e) All salaries, bonuses, other compensation and employment benefits for unused vacation,
holiday, sick leave and personal days if, and to the extent, that amounts are accrued and vested
and unused prior to the Closing Date, and contributions for retirement and welfare benefits,
together with F.I.C.A., unemployment and other payroll taxes and benefits due with respect to the
employment of all Hotel Employees, shall be prorated between Seller and Purchaser as of the Closing
Date, with accrued vacation and other benefits due to Bargaining Unit Employees being determined in
accordance with the Collective Bargaining Agreement and such matters for Non-Union Employees being
determined in accordance with past practices. Purchaser shall pay the salaries and related
benefits that are payable to any Hotel Employees for work performed at the Hotel on the Closing
Date, whether prior to or following the time of Closing, regardless of whether such persons are
employees of Seller or Purchaser.

(f) (i) At Closing, Seller shall receive one-half (1/2) of all revenues from the Hotel guest
rooms and facilities occupied on the Apportionment Date with respect to the one night during which
the Cut-Off Time occurs, including any sales taxes, room taxes, occupancy taxes and other taxes
charged to guests in such rooms, all parking charges, sales from mini-bars, in-room food and
beverage, telephone, facsimile and data communications, in-room movie, laundry, and other service
charges allocable to such rooms with respect to the Apportionment Date. All revenues from
restaurants, bars, lounges, vending machines and other service operations conducted at the Hotel
shall be allocated based on whether the same accrued before or after the Cut-Off Time, and Seller
shall cause the Manager to separately record sales occurring before and after the Cut-Off Time at
the Hotel. The foregoing amounts are referred to collectively as “Guest Revenues”.
Notwithstanding the foregoing, all revenues from any bars and lounges at the Hotel shall be
prorated based on the actual closing time for such bar or lounge. For example, if such bar or
lounge closes at 2 a.m. on the Closing Date, Seller shall retain the revenues from such services
and operations even though such revenues were generated two (2) hours after the Cut-Off Time.

(ii) Revenues from conferences, receptions, meetings, and other functions occurring in any
conference, banquet or meeting rooms in the Hotel, or in any adjacent facilities owned or operated
by Seller, including usage charges and related taxes, food and beverage sales, valet parking
charges, equipment rentals, and telecommunications charges, shall be allocated between Seller and
Purchaser, based on when the function therein commenced, with (i) one-day functions commencing
prior to the Cut-Off Time being allocable to Seller, (ii) functions commencing after the Cut-Off
Time being allocable to Purchaser, and (iii) multi-day functions that include periods from both
before and after the Cut-Off Time being allocated on a pro rata basis between Seller and Purchaser
according to when the event commences and is scheduled to end in relation to the Cut-Off Time. The
foregoing amounts are referred to collectively as “Conference Revenues.”

 

20

 

(iii) At Closing, all Receivables shall be assigned to Purchaser and Seller shall receive a
proration credit in an amount equal to 98% of face value (without further adjustment or allowance
for uncollectible accounts) of such receivables as set forth on Manager’s books including, without
limitation, receivables accrued in connection with hotel
reservations, the use of guest rooms, banquet and meeting room receivables (including any
cancellation fees due to Seller in connection with any of the foregoing) as reflected on the city
ledger, guest ledger or any other receivable ledger. Purchaser shall have no right to any
adjustment to the prorations with respect to the Receivables on or after Closing for inability to
collect outstanding Receivables or otherwise. All accounts receivable more than one hundred twenty
(120) days past due on the Closing Date (“Retained Receivables”) shall be retained by
Seller at Closing and (i) Purchaser shall cause its manager to endeavor to collect the Retained
Receivables in a manner consistent with its efforts to collect the accounts receivable due to
Purchaser, and (ii) Purchaser and its manager shall deliver to Seller any amounts received by them
after the Closing Date on account of the Retained Receivables reasonably promptly following receipt
by Purchaser or its manager.

(iv) Any Hotel operating revenues not otherwise provided for in this Section 8(f),
shall be prorated between Purchaser and Seller as of the Apportionment Date.

(g) At Closing, Purchaser shall receive a proration credit equal to the aggregate amount of
all outstanding accounts payable for the Hotel as of the Closing Date (“Hotel Payables”) as
set forth in a schedule attached to the Preliminary Closing Statement Statement and Purchaser shall
assume the obligation to satisfy all Hotel Payables for which Purchaser received such credit at
Closing. After Closing, before paying any amount invoiced or otherwise claimed by a third party due
with respect to the Hotel operations prior to Closing which is not included on such schedule (or is
claimed in an amount larger than that shown on such schedule), Purchaser shall first submit such
invoice or claim to Seller. Unless Seller, within fifteen (15) days after receiving such
submission, objects to such invoice or claim (thereby making it a “Seller Disputed
Payable”), Purchaser may pay the same and take a credit for such payment on the Final
Statement. Seller shall make commercially reasonable efforts to resolve any Seller Disputed
Payables in a timely manner; provided, that Purchaser shall have the right to pay any
invoice or claim the non-payment of which does or could, in Purchaser’s reasonable judgment (i)
result in the withholding of goods or services to the Hotel, or (ii) constitute a lien against the
Property (or any portion thereof). Notwithstanding the foregoing, upon Closing Purchaser shall
assume all obligations of Seller to pay for any (i) consumables or other items ordered by or for
the benefit of Seller in the ordinary course of business but which are not yet received as of the
Closing Date, and (ii) items or services listed on a purchase order log prepared by Manager which
are not yet received as of the Closing Date, which list shall be updated by Manager immediately
prior to Closing; provided, that there shall not be any adjustment to the Purchase Price in
connection with Purchaser’s assumption of the liabilities described in clauses (i) and (ii) of this
sentence.

(h) At Closing, Seller shall receive a credit in the amount of the fair market value of the
Consumable Inventory, the Unopened Inventories and the Retail Inventories.

(i) Purchaser shall receive a proration credit equal to the aggregate amount of advance
deposits that shall have been received by Seller prior to the Cut-Off Time on account of pending
reservations for use or occupancy of the Property after the Cut-Off Time.

(j) Seller shall receive a credit at Closing in an amount equal to all House Bank Funds.

 

21

 

(k) Seller shall receive a credit at Closing in an amount equal to any fees and other amounts
paid or advanced by Seller to Franchisor under the Franchise Agreement which relate to periods from
and after the Closing Date, to the extent that (a) such amounts may be applied to Purchaser’s
obligations under the New License, (b) Franchisor does not directly reimburse Seller for such fees
and other amounts at Closing, and (c) Purchaser receives a credit for such amounts from Franchisor.

(l) Unless this Section 8 expressly provides otherwise, all items of revenue and
expense with respect to the Hotel’s operations shall be classified and determined in accordance
with the Uniform System of Accounts for the Lodging Industry, as reasonably modified by Manager for
use at the Hotel consistent with past practices within the twelve (12) months preceding the
Closing, and otherwise in accordance with generally accepted accounting principles.

(m) At or prior to the Closing, Seller and Purchaser and/or their respective agents or
designees will jointly prepare a preliminary closing statement (the “Preliminary Closing
Statement”) which will show the net amount due either to Seller or to Purchaser as the result
of the adjustments and prorations provided for herein, and such net due amount will be added to or
subtracted from the cash balance of the Purchase Price to be paid to Seller at the Closing pursuant
to Section 3 hereof, as applicable. Within twelve (12) months following the Closing Date,
Seller and Purchaser will jointly prepare a final closing statement reasonably satisfactory to
Seller and Purchaser in form and substance (the “Final Closing Statement”) setting forth
the final determination of the adjustments and prorations provided for herein and setting forth any
items which are not capable of being determined at such time (and the manner in which such items
shall be determined and paid). The net amount due to Seller or Purchaser, if any, by reason of
adjustments to the Preliminary Closing Statement as shown in the Final Closing Statement, shall be
paid in cash by the party obligated therefor within ten (10) Business Days following that party’s
receipt of the approved Final Closing Statement. The adjustments, prorations and determinations
agreed to by Seller and Purchaser in the Final Closing Statement shall be conclusive and binding on
the parties hereto, except to the extent that any such determinations are not able to be finally
determined until a later date or are expressly subject to a longer survival period hereunder.
Seller and Purchaser agree that any items which are not capable of being determined at the time the
Final Closing Statement shall be determined as soon as feasible and paid promptly after such
determination. Prior to and following the Closing Date, each party shall provide the other with
such information and data as the other shall reasonably request (including, without limitation,
access to the books, records, files and ledgers) with respect to the Property during normal
business hours upon reasonable advance notice in order to make the preliminary and final
adjustments and prorations provided for herein.

(n) Purchaser and Seller shall each bear their own accounting costs to resolve all prorations
provided for under this Section 8.

(o) The provisions of this Section 8 shall survive the Closing.

 

22

 

(p) The rights and obligations of Purchaser under this Section 8 may be assigned to a
taxable REIT direct or indirect subsidiary (“TRS”) of DiamondRock Hospitality Company;
provided, that any such TRS shall at all times be a wholly owned direct or indirect
subsidiary of DiamondRock Hospitality Company and shall not be a Prohibited Person. Seller
acknowledges that (i) Purchaser will enter into a lease with the TRS, (ii) the operations of the
Hotel will be conducted on behalf of the TRS, and (iii) any debits or credits related to operations
will be solely at the expense of, or for the benefit of, the TRS; provided,
however, as between Purchaser and Seller, any such debits or credits will be included
within the adjustments to the Purchase Price as determined in accordance with this Agreement.
Nothing contained in this Section 8(p) shall affect or otherwise release Purchaser and/or
Principal from its obligations under this Agreement.

9. EMPLOYEES.

(a) For purposes of this Agreement, (i) “Hotel Employees” means, collectively, all
individuals employed at the Hotel by Manager or Seller as of the Closing Date, irrespective of
whether such individuals are active, on leaves of absence or otherwise inactive but still employed
at the Hotel, and (ii) “Bargaining Unit Employees” shall mean all employees of Seller who
work at the Hotel and are covered by the Collective Bargaining Agreement. The provisions of this
Agreement set forth in Sections 9(b) through Section 9(f) will apply to Purchaser
if and to the extent that Seller immediately before the Closing has a corresponding and direct
obligation to Hotel Employees or to Bargaining Unit Employees and to their Union. The provisions of
Section 9(f), and any obligation of Purchaser thereunder shall be to the same extent and
have the same nature as that of Seller immediately before the Closing. The provisions of
Section 9(h) will operate and be applied, if and only to the extent that Seller has an
obligation to contribute to the Retirement Plan that runs directly to such plan. Nothing in this
Section 9 is intended by its own force and without the consent of Purchaser to increase any
obligation or commitment of Purchaser beyond the obligation or commitment that Seller has
immediately before the Closing.

(b) Purchaser agrees that it will, or it will cause its manager to, extend offers to hire
effective at and upon Closing, a sufficient number of the Hotel Employees (“Rehired
Employees”) so that Seller shall not be required to give any layoff, closing or other
termination notices or otherwise incur any liability pursuant to the provisions of the Federal
Worker Adjustment and Retraining Notification Act. 29 U.S.C. 2101-2109 (the “Federal WARN
Act”), the New York State Worker Adjustment and Retraining Notification Act, N.Y. Labor Law
§860 et seq. and 12 NYCRR Part 921 (“New York WARN Act”), and the Displaced Building
Service Workers Act set forth in Section 22-505 of the Administrative Code of the City of New York
(the “Displaced Building Service Workers Act”). Purchaser further agrees that (i)
Bargaining Unit Employees shall be offered employment in accordance with Section 9(e)
below, (ii) Purchaser or, as the case may be, its manager shall be required to assume and
discharge, in accordance with their terms, all obligations and liabilities of Seller or Manager
with respect to costs of termination of any employees who are not Bargaining Unit Employees
(“Non-Union Employees”) incurred after the Closing including, without limitation, any
severance claim made after the Closing by any Non-Union Employee that is not offered employment by
Purchaser, or Purchaser’s manager.

 

23

 

(c) From and after the Closing, Purchaser (i) shall be solely responsible for complying or
causing compliance with all applicable provisions of federal, state and municipal laws and
regulations relating to Rehired Employees, including Purchaser’s covenants set forth in
this Section 9, including without limitation compliance with any applicable provisions
of the Federal WARN Act, the New York WARN Act or the Displaced Building Service Workers Act, and
(ii) hereby agrees to indemnify, defend, protect and hold Seller, Manager, and their respective
affiliates harmless from and against any and all claims, liabilities, debts, costs, expenses,
damages, attorneys’ fees and disbursements arising out of any violation of the Federal WARN Act,
the New York WARN Act or the Displaced Building Service Workers Act in connection with the
transaction contemplated by this Agreement. Seller agrees to indemnify, defend, protect and hold
Purchaser, Purchaser’s manager, and their respective affiliates harmless from and against any and
all claims, liabilities, debts, costs, expenses, damages, attorneys’ fees and disbursements arising
out of any violation of the Federal WARN Act, the New York WARN Act or the Displaced Building
Service Workers Act for any period prior to the Closing (excluding any matters arising from the
transaction contemplated by this Agreement).

(d) During the period prior to Closing, the parties agree to reasonably cooperate and also to
consult on a regular basis and coordinate their activities relating to employee matters so as to
facilitate a smooth transition of Hotel operations and the continued proper performance by the
Hotel Employees of their respective duties up to Closing. Other than in the ordinary course of
operations, Seller and/or Manager shall not replace, layoff or terminate any of the Hotel
Employees, without Purchaser’s prior written consent, which consent may not be unreasonably
withheld. Seller shall promptly deliver to Purchaser copies of any written materials delivered or
received relating to Union representation of Hotel Employees, and Seller shall keep Purchaser
updated with respect to the status of any discussions with respect thereto.

(e) Purchaser shall: (i) credit Rehired Employees with their original date of hire with the
Hotel for purposes of any length of service requirements, waiting periods, vesting periods, or
differential benefits based on length of service in any benefit plan established or maintained by
or on behalf of Purchaser (or Purchaser’s manager) for which such Hotel Employees may be eligible
after the Closing; (ii) provide, subject to the consent of any third-party insurer or other similar
third party having liability for benefit payments, that any pre-existing conditions, restrictions
or waiting periods under any benefit plan established by or on behalf of Purchaser providing
medical, dental, vision, or prescription drug coverage or benefits are waived to the extent
necessary and possible under the applicable plans to provide immediate coverage for Hotel employees
who are hired for the Hotel following termination of such Hotel Employees’ coverage under the
benefit plans maintained by or on behalf of Seller, such that Seller shall not have COBRA
obligations for any such Hotel Employees who are hired by Purchaser; and (iii) indemnify, defend
and hold Seller harmless from and against all loss, expense (including reasonable attorneys’ fees
and disbursements incurred to enforce this indemnity), damage and liability resulting from any
COBRA obligations arising in respect of Rehired Employees and any obligations respecting Rehired
Employees regarding employee benefits arising from and after the Closing Date.

 

24

 

(f) Without limiting any other provision of this Section 9, (i) Seller has informed
Purchaser that Seller is a party to and is bound by the terms of that certain Industry Wide
Agreement between Hotel Association of New York, Inc. and New York Hotel and Motel Trades Council,
AFL-CIO (“Union”) which is in effect through June 30, 2012, including any related written
memorandum of understanding and other related agreements, as provided by their terms (collectively,
the “Collective Bargaining Agreement”), (ii) a copy of the Collective
Bargaining Agreement had previously been delivered or made available to Purchaser for its
review, and (iii) Purchaser or Purchaser’s manager shall offer to retain all Bargaining Unit
Employees and, if they accept their offers, their employment will continue uninterrupted without
loss of seniority, compensation, benefits or other terms and conditions of employment subject to
the Collective Bargaining Agreement and applicable law, and (iii) the Purchaser will recognize the
Union and assume and be bound by the Collective Bargaining Agreement from and after the Closing
Date. Purchaser further agrees to an assumption agreement in the form of the IWA Assumption
Agreement attached hereto as Exhibit 8 and made a part hereof to effectuate an assumption
of the Collective Bargaining Agreement in its name (without modification or amendment). To the
extent required by the Collective Bargaining Agreement, Purchaser shall also cause its designated
manager that becomes the employer of the Bargaining Unit Employees to be a party to the IWA
Assumption Agreement.

(g) Under the Collective Bargaining Agreement, Seller currently contributes, on a monthly
basis, various amounts under the (i) New York Hotel Trades Council and Hotel Association of New
York City, Inc. Health Benefits Fund, (ii) New York Hotel Trades Council and Hotel Association of
New York City, Inc. Pension Fund, (iii) New York Hotel Trades Council and Hotel Association of New
York City, Inc. Prepaid Legal Services Fund, and (iv) New York Hotel Trades Council and Hotel
Association of New York City, Inc. Industry Training and Scholarship Fund (collectively, the
“Union Employee Benefit Funds”). At Closing, regular contributions paid or payable with
respect to the Union Employee Benefit Funds shall be prorated, with the appropriate party receiving
a credit or debit to the Purchase Price, on a pro rata basis based on the date Closing occurs.

(h) Retirement Plan.

(i) The Seller is not currently an “employer” with respect to the Hotel for purposes of Title
IV of ERISA, and subsequent to the Closing Date, the Purchaser will also not be an “employer” with
respect to the Hotel for purposes of Title IV of ERISA. The “employer” with respect to the Hotel
for purposes of Title IV of ERISA is, as to each of the parties, the manager of the Hotel. As a
result, neither the Seller has nor, subsequent to the Closing Date, the Purchaser shall have, an
obligation to contribute to the New York Hotel Trades Council and Hotel Association of New York
City, Inc. Pension Fund (the “Retirement Plan”) with respect to the Hotel. The parties
recognize, however, that the Retirement Plan may contend otherwise, and accordingly, the parties
have agreed to include provisions herein sufficient to comply with Section 4204 of ERISA as if the
Seller had an obligation to contribute to the Retirement Plan with respect to the Hotel. In doing
so, neither the Seller nor the Purchaser admits or acknowledges that it is an “employer” with
respect to the Hotel for purposes of Title IV of ERISA, or has an obligation to contribute to the
Retirement Plan with respect to the Hotel.

(ii) Seller and Purchaser agree that during the Contribution Period, Purchaser (to the extent
Seller has had an obligation to contribute) shall make contributions to the Retirement Plan in
accordance with the Collective Bargaining Agreement, for substantially the same number of
contribution base units, within the meaning of Section 4001(a)(11) of ERISA, for which Seller or
Manager had an obligation to contribute with respect to the Hotel. If, as a result of a failure to
comply with the foregoing requirements or as a result of any other action by Purchaser, Seller
incurs any withdrawal liability under the Retirement Plan with
respect to the Hotel, the Purchaser shall indemnify, defend, and hold Seller and any of its
ERISA affiliates harmless from and against any such liability and all related costs and expenses,
including reasonable attorneys’ fees.

 

25

 

(iii) Purchaser agrees to reasonably cooperate with Seller and/or Retirement Plan
representatives with respect to any inquiry or reasonable request for information and assistance in
order to facilitate the transfer of the contribution obligation with respect to the Retirement Plan
from Seller (or the manager of the Hotel) to Purchaser (or the manager of the Hotel). The parties
agree that they will notify the Retirement Plan of their intention that this transaction comply
with Section 4204 of ERISA.

(iv) Subject to Section 9(h)(vii), during the period commencing on the first day of
the plan year following the Closing Date and ending on the expiration of the fifth such plan year
(the “Contribution Period”), Purchaser shall provide to the Retirement Plan either a bond,
letter of credit, or an escrow in an amount and manner meeting the requirements of Section 4204 of
ERISA. The cost of any bond, letter of credit, or escrow provided under this Section 5.8(h)(iv)
shall be paid by Purchaser.

(v) To the extent required pursuant to Section 4204(a)(3) of ERISA, Seller shall provide to
the Retirement Plan a bond or escrow equal to the present value of the withdrawal liability Seller
would have had to the Retirement Plan with respect to the assets acquired by Purchaser pursuant to
this Agreement (but for the provisions of Section 4204 of ERISA), reduced to the extent provided
under Section 4204(a)(3) of ERISA in the event only a portion of Seller’ assets are distributed
during the Contribution Period.

(vi) If Purchaser at any time withdraws from the Retirement Plan in a complete or partial
withdrawal with respect to the assets acquired by Purchaser pursuant to this Agreement during the
Contribution Period, Purchaser shall be primarily liable and pay, and Seller shall be secondarily
liable for any withdrawal liability Seller would have had to the Retirement Plan with respect to
the Hotel (but for the provisions of Section 4204 of ERISA) if any withdrawal liability of
Purchaser with respect to such Retirement Plan is not paid. Purchaser shall indemnify and hold
Seller harmless for any withdrawal liability incurred by Seller pursuant to the preceding sentence.
Purchaser agrees to provide Seller with reasonable advance notice of any action or event which
could result in the imposition of any withdrawal liability contemplated by this Section
9(h)(vi), and in any event Purchaser shall immediately furnish Seller with a copy of any notice
including, but not limited to a notice of withdrawal liability, it may receive with respect to the
Retirement Plan, together with all the pertinent details. If any such withdrawal liability shall be
assessed against Purchaser, Purchaser further agrees to provide Seller with reasonable advance
notice of any intention on the part of Purchaser not to make full payment of any withdrawal
liability when the same shall become due. Any proposed notice or communication to the Retirement
Plan relating to Purchaser’s obligations under this Section shall be provided to Seller at least
ten (10) days before such notice is provided to the Retirement Plan, and the form of such notice
and communication shall be subject to Seller’s written approval, which approval shall not be
unreasonably withheld.

 

26

 

(vii) Notwithstanding anything contained in Section 9(h)(iv) to the contrary,
Purchaser shall not be obligated to provide any bond, letter of credit, or escrow in the
event and to the extent Purchaser obtains from the Retirement Plan or the Pension Benefit
Guaranty Corporation a proper variance or exemption under Section 4204(c) of ERISA and the
applicable regulations thereunder, provided any and all requirements of said variance or exemption
are met and Purchaser approves such exception. Upon Purchaser’s request, Seller agrees to
reasonably cooperate with Purchaser in providing the Retirement Plan with notice of the parties’
intention that this transaction be covered by Section 4204 of ERISA.

(i) Purchaser agrees to indemnify, defend and hold harmless Seller, Manager and any other
Seller Related Parties from and against any claim, liability, or judgment asserted against any of
the Seller Related Parties on account of or with respect to any of the following: (i) any causes of
action, damages, complaints, judgments, orders and/or claims, whatsoever, and all costs and
expenses (including, without limitation, reasonable attorneys’ fees and costs) incurred in
connection therewith, which may be asserted against any of the Seller Related Parties on account of
any violation of the National Labor Relations Act, Title VII of the Civil Rights Act, the Fair
Labor Standards Act, the Age Discrimination in Employment Act, the Americans with Disabilities Act,
the Family and Medical Leave Act, the Vocational Rehabilitation Act of 1973, the Federal WARN Act
and/or the New York WARN Act, the Displaced Building Service Workers Act, New York Labor Law, New
York State and City Human Rights Law, and/or any other applicable federal, state or city employment
statutes, laws, rules and regulations (collectively, “Employment Laws”) by Purchaser, or
any designee or management company engaged by Purchaser to employ Hotel personnel, except to the
extent such are based on the acts of any Seller Related Parties, and (ii) any claims or liabilities
arising (A) under the federal Employee Retirement Income Security Act, as amended, and/or any other
applicable federal or state law or regulation concerning employee benefit plans with respect to the
employment of employees by Purchaser or such designee or management company from and after the
Closing, or (B) from or under any employee benefit plan applicable to any Rehired Employee or any
other employee hired by Purchaser or such designee or management company to perform services at or
for the Hotel, to the extent that any such claim or liability relates to any period of employment
from and after the Closing.

(j) Seller agrees to indemnify, defend and hold harmless Purchaser, or any designee or
management company engaged by Purchaser to employ Hotel personnel and their respective officers,
directors, members, owners and affiliates (herein, the “Purchaser Related Parties”) from
and against any claim, liability, or judgment asserted against any of the Purchaser Related Parties
on account of or with respect to any of the following: (i) any causes of action, damages,
complaints, judgments, orders and/or claims, whatsoever, and all costs and expenses (including,
without limitation, reasonable attorneys’ fees and costs) incurred in connection therewith, which
may be asserted against any of the Purchaser Related Parties on account of any violation of the
Employment Laws occurring up to and including the Closing by Seller-Related Parties, except to the
extent such are based on the acts of any Purchaser-Related Parties and (ii) any claims or
liabilities arising (A) under the federal Employee Retirement Income Security Act, as amended,
and/or any other applicable federal or state law or regulation concerning employee benefit plans
with respect to the employment of employees by Seller-Related Parties up to and including the
Closing, or (B) from or under any employee benefit plan applicable to any Rehired Employee or any
other employee hired by Purchaser or such designee or management company to perform services at or
for the Hotel, to the extent that any such claim or liability relates to any period of employment
up to and including the Closing.

(k) Purchaser’s and Seller’s obligations under this Section 9 shall survive Closing.

 

27

 

10. COVENANTS OF SELLER; APPROVALS.

(a) Interim Covenants of Seller. During the period between the Effective Date and the
earlier of (x) the termination of this Agreement or (y) Closing, except as otherwise expressly set
forth to the contrary herein (or unless expressly required to comply with the Franchise Agreement
in which event Purchaser’s consent shall not be required), Seller hereby covenants as follows:

(i) Seller shall (and shall cause Manager to) operate and maintain the Hotel in a manner
generally consistent with the requirements of the Franchise Agreement and the manner in which
Seller and Manager have operated and maintained the Hotel during the twelve (12) month period
immediately prior to the date hereof, except that Seller shall not be required to make any capital
improvement or replacement to the Premises;

(ii) Seller shall not enter into any Lease or terminate, amend, modify (except as required
pursuant to its terms or other de minimis amendments or modifications), renew, grant any consent
rights relating to assignment, subletting or material alterations or knowingly waive any of its
rights under any Lease, or accept rental more than one (1) month in advance without first obtaining
written consent from Purchaser; provided, that any agreement entered into by Seller with a
tenant to confirm the terms of any right or option exercised by such tenants, or otherwise required
by the applicable Lease, shall not require Purchaser’s consent;

(iii) Seller shall not sell or assign, or enter into any agreement to sell or assign all or
any portion of the Property, except for the provision of hotel rooms and facilities in the ordinary
course;

(iv) Seller shall not enter into any new Contracts relating to the operation of the Premises
that will be binding on Purchaser or will affect the Premises following Closing without first
obtaining written consent from Purchaser, except for (A) utility service agreements (e.g.,
electricity, water, gas, telephone, cable and any other utility services necessary for the use and
operation of the Premises), (B) boiler and compressor service agreements relating to the operation
of the Premises, and (C) such other agreements that Seller reasonably determines are necessary or
advisable for the operation of the Premises (provided, that any such agreements are
terminable, without premium or penalty, on not more than ninety (90) days’ notice);

(v) Seller shall not amend or modify (other than non-material amendments or modifications, or
amendments and/or modifications which do not survive the Closing) or renew any of the Contracts
that will survive the Closing without first obtaining written consent from Purchaser;
provided, that such prior approval shall not be required with respect to any Contracts that
are terminable, without premium or penalty, on not more than ninety (90) days’ notice;

(vi) Seller shall not initiate or settle any litigation that will materially adversely affect
the Premises following Closing, without Purchaser’s prior written consent; and

 

28

 

(vii) Seller shall maintain (or shall cause Manager to maintain) in full force and effect the
insurance policies currently in effect with respect to the Premises (or replacements containing
similar coverage).

(b) Approvals. Except as otherwise expressly provided in this Agreement, whenever
Seller is required to obtain Purchaser’s approval with respect to any transaction, documents,
action or other matter provided for herein, Purchaser shall, (i) within five (5) Business Days
after receipt of Seller’s request therefor, notify Seller of its approval or disapproval of same
(and if a disapproval, said disapproval shall be accompanied by Purchaser’s reasonable basis
therefor), and (ii) not unreasonably withhold or condition such approval and if Purchaser fails to
notify Seller of its disapproval within said 5-Business Day period, TIME BEING OF THE ESSENCE,
Purchaser shall be deemed to have approved the same. For the avoidance of doubt, any such Seller
request or Purchaser notice to Seller as aforesaid shall be given in accordance with the terms of
Section 20 hereof.

(c) Management Agreement. Purchaser acknowledges that the Hotel is being operated and
managed by Highgate Oxford Management Company, LLC, a Delaware limited liability company (the
“Existing Manager”), pursuant to that certain Hotel Management Agreement dated as of
October 1, 2004, by and between Seller, Lexington Hotel Operating Lessee, LLC., a Delaware limited
liability company, and the Existing Manager (the “Existing Management Agreement”). At
Closing, (i) the Existing Management Agreement will be terminated effective as of the Closing Date
at Seller’s sole cost and expense, and (ii) as a condition to Seller’s obligation to close the
transaction contemplated under this Agreement, Purchaser shall enter into a replacement management
agreement with Highgate Hotels, L.P., a Delaware limited partnership (“Manager”) for the
operation and management of the Hotel in the form attached hereto as Exhibit 14 (the
“Replacement Management Agreement”).

(d) Alcoholic Beverage License. Purchaser acknowledges that Seller is the current
licensee under the existing alcoholic beverage license for the Hotel (the “Existing Liquor
License”). Seller shall reasonably cooperate with Purchaser in submitting documents to the New
York State Liquor Authority (the “NYSLA”) and obtaining all necessary approvals needed by
Purchaser in order to obtain all appropriate licenses and permits for the sale of alcoholic
beverages at the Hotel; provided, that such cooperation shall (i) not create any potential
liability for Seller, and (ii) be at no cost or expense to Seller. To that end, upon the issuance
of a temporary retail permit for the Hotel, Seller hereby agrees to deliver the Existing Liquor
License to the NYSLA for safekeeping and, upon the issuance of a liquor license for the Hotel,
Seller hereby agrees to cause the Existing Liquor License to be surrendered to the NYSLA and shall
provide the NYSLA with all necessary documentation, including, without limitation, a Petition for
Surrender of License, in connection therewith. In no event shall Seller be required to transfer to
Purchaser any unopened alcoholic beverage inventory which is located at or held for use in the
Hotel unless and until Seller has received a liquidators permit and Purchaser has obtained a valid
and effective license entitling Purchaser to sell alcoholic beverages at the Hotel and only to the
extent that Seller is permitted to transfer such inventories pursuant to applicable law. Promptly
following the Effective Date, Purchaser shall file all necessary applications and supporting
materials with the New York State Liquor Authority as may be required to obtain a temporary retail
permit and liquor license for the Hotel, and shall diligently pursue the issuance of such temporary
retail permit and liquor license. If Purchaser has not secured a temporary retail permit
or liquor license for the Hotel as of the Scheduled Closing Date, then Purchaser shall have
the one-time right to adjourn the Scheduled Closing Date to any Business Day occurring on or before
June 8, 2011 by giving notice to Seller at least three (3) Business Days prior to the then
Scheduled Closing Date; provided, that, the failure of Purchaser to secure a temporary
retail permit or liquor license by the Scheduled Closing Date (as the same may be adjourned
pursuant to the immediately preceding sentence) shall not excuse or in any other way affect
Purchaser’s obligation to consummate the transaction contemplated under this Agreement and the
Purchase Price shall not be reduced and Seller shall have no additional obligation as a result
thereof.

 

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11. CONDITIONS PRECEDENT TO CLOSING.

(a) Purchaser’s obligation to close the transactions hereunder shall be subject to the
satisfaction of the following conditions precedent, provided that Purchaser, at its election, upon
written notice delivered to Seller at or prior to the Closing, may waive all or any of such
conditions:

(i) Seller shall have executed, acknowledged (if applicable) and delivered to Purchaser all of
the documents required of Seller at Closing under this Agreement;

(ii) All of Seller’s representations and warranties set forth in Section 13(a) of this
Agreement shall be true and correct in all material respects on the Closing Date; provided,
however, that it shall not be deemed a failure of a condition to Closing under this
Section 11(a) (and shall also not be deemed a default by Seller) if, with respect to
Seller’s representations and warranties set forth in Section 13(a)(iv), Section
13(a)(v), Section 13(a)(vi) and Section 13(a)(ix) through Section
13(a)(xvii), (A) the facts relating to any such representation which has become untrue (other
than as a result of a Seller default) does not have a material adverse effect on the operations of
the Premises, or (B) any such representation was untrue when made but Seller has caused such
representation to be true at Closing in all material respects; and

(iii) Seller shall have caused Manager to enter into the Replacement Management Agreement at
Closing.

(b) Seller’s obligation to close the transactions hereunder shall be subject to the
satisfaction of the following conditions precedent, provided that Seller, at its election, upon
written notice delivered to Purchaser at or prior to the Closing, may waive all or any of such
conditions:

(i) Purchaser shall have executed, acknowledged (if applicable) and delivered to Seller all of
the documents required of Purchaser at Closing under this Agreement, including, without limitation
the Replacement Management Agreement;

(ii) Purchaser shall have delivered to Escrow Agent the Purchase Price and Escrow Agent shall
have been irrevocably authorized to deliver same to Seller; and

(iii) All of Purchaser’s representations and warranties set forth in Section 13(e) of
this Agreement shall be true and correct in all material respects on the Closing Date.

(c) Seller and Purchaser each covenant and agree to use commercially reasonable, diligent and
good faith efforts to satisfy (or cause the satisfaction of) the conditions precedent to the
Closing set forth in this Section 11 on or prior to the Closing Date.

 

30

 

12. FIRPTA COMPLIANCE.

Seller shall comply with the provisions of the Foreign Investment in Real Property Tax Act,
Section 1445 of the Internal Revenue Code of 1986 (as amended), as the same may be amended from
time to time, or any successor or similar law. Seller acknowledges that Section 1445 of the
Internal Revenue Code provides that a transferee of a United States real property interest must
withhold tax if the transferor is a foreign person. To inform Purchaser that withholding of tax is
not required upon the disposition of a United States real property interest by Seller, Seller
hereby represents and warrants that Seller is not a foreign person as that term is defined in the
Internal Revenue Code and Income Tax Regulations. On the Closing Date, Seller shall deliver to
Purchaser a certification as to Seller’s non-foreign status in substantially the form attached
hereto as Exhibit 3 and shall comply with any temporary or final regulations promulgated
with respect thereto and any relevant revenue procedures or other officially published
announcements of the Internal Revenue Service of the U.S. Department of the Treasury in connection
therewith.

13. REPRESENTATIONS AND WARRANTIES

(a) Seller hereby represents to Purchaser that the following are true and correct in all
material respects as of the date hereof:

(i) Seller is duly organized, validly existing, and in good standing under the laws of the
state of its formation, and has or will have at Closing all requisite power and authority to enter
into and carry out the transactions contemplated by this Agreement.

(ii) The execution and delivery of this Agreement and the performance by Seller of its
obligations hereunder do not and will not conflict with or violate any law, rule, judgment,
regulation, order, writ, injunction or decree of any court or governmental or quasi-governmental
entity with jurisdiction over Seller, including, without limitation, the United States of America,
the State of New York, or any political subdivision of any of the foregoing, or any decision or
ruling of any arbitrator to which Seller is a party, or by which Seller is bound or affected, which
conflict or violation would prevent Seller from performing its obligations pursuant to this
Agreement.

(iii) This Agreement has been duly authorized by all necessary action on the part of Seller,
constitutes the legal, valid and binding obligation of Seller, enforceable against Seller in
accordance with its terms. Neither the execution, delivery and performance of this Agreement nor
the consummation of the transactions contemplated hereby is prohibited by, or requires Seller to
obtain any consent, authorization or approval of (or registration with) any governmental authority
or any third-party under any law, statute, rule, regulation, judgment, order, writ, injunction,
decree, contract or agreement which is binding upon Seller, the failure of which would prevent
Seller from performing its obligations under this Agreement.

 

31

 

(iv) Except as set forth on Schedule F attached hereto and except for insured claims,
there is no pending or, to Seller’s knowledge, threatened action, suit, claim, investigation or
proceeding at law or in equity against Seller and/or Seller’s members, before or by any court or
federal, state, municipal or other governmental department, commission, board, bureau, agency or
instrumentality which is reasonably likely to materially and adversely affect the Property or which
otherwise would prevent Seller from performing its material obligations under this Agreement on the
Closing Date.

(v) To Seller’s knowledge, there are no condemnation or eminent domain proceedings pending or
threatened against the Premises.

(vi) Seller has no Plans (as that term is defined in Section 3(3) of ERISA) of which Seller is
a sponsor or to which it contributes or has contributed or in which it otherwise participates or
has participated.

(vii) Neither Seller, nor any person controlling or controlled by Seller is in violation of
any applicable anti-money laundering or anti-bribery laws and regulations (including funds being
derived from any person, entity, country or territory on a Government List or engaged in any
unlawful activity defined under Title 18 of the United States Code, Section 1956(c)(7)). Seller is
not a person or an entity described by Section 1 of the Executive Order (No. 13,224) Blocking
Premises and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support
Terrorism, 66 Fed. Reg. 49,079 (September 24, 2001) (the “Executive Order”) and does not
engage in any dealings or transactions and is not otherwise associated with any such persons or
entities.

(viii) None of Seller or its affiliates are acting, directly or indirectly, on behalf of
terrorists, terrorist organizations or narcotics traffickers, including those persons or entities
that appear on the Annex to the Executive Order, are included on any relevant lists maintained by
the Office of Foreign Assets Control of U.S. Department of Treasury, U.S. Department of State, or
other U.S. government agencies, all as may be amended from time to time.

(ix) Attached hereto as Schedule C-1 and Schedule C-2 is a complete list of
all Contracts which currently affect the Property and that may be in effect after Closing, and
Seller has delivered (or otherwise made available to Purchaser) true, correct and complete copies
of such Contracts and no uncured written notice of default has been delivered by Seller or received
by Seller with respect to any Contracts.

(x) Attached hereto as Schedule E-1 is a true, correct and complete list of all Leases
which currently affect the Premises, and Seller has delivered to Purchaser (or otherwise made
available to Purchaser) true, correct and complete copies of such Leases. To Seller’s knowledge,
attached hereto as Schedule E-2 is a true, correct and complete list of all outstanding
tenant arrearages under the Leases (the “Tenant Arrearages”), as of the date specified
thereon. As of the date hereof, except in connection with the Tenant Arrearages and the litigation
involving Habana Room Restaurant disclosed on Schedule F attached hereto, Seller has
neither given nor received any written notice of default under any Lease which default remains
uncured. No tenant under any Lease has delivered any notice to Seller or Manager
exercising any right of termination under its Lease. There are no construction allowances or
material brokerage commissions now due or payable in the future in connection with the Leases.

 

32

 

(xi) The Franchise Agreement is the only agreement between Seller and Franchisor regarding the
operation of the Hotel as one of Franchisor’s “System Hotels” (as defined in the Franchise
Agreement) under the Radisson brand. Seller has delivered (or otherwise made available to
Purchaser) a true, correct and complete copy of the Franchise Agreement and no uncured written
notice of default has been delivered by Seller or received by Seller from Franchisor. In the event
that Franchisor issues a Denial Notice, the provisions of this Section 13(a)(xi) shall
automatically cease to apply and the foregoing representation shall be of no further force or
effect.

(xii) There are no employees of the Hotel other than Hotel Employees.

(xiii) All Personalty (other than trade fixtures belong to tenants) are owned by Seller (other
than any leased Personalty under the Equipment Leases), free and clear of any liens or encumbrances
except for Permitted Encumbrances.

(xiv) Seller has not granted, and to Seller’s knowledge there do not exist in favor of any
person or party: (i) any option to buy all or any portion of the Property (other than to Purchaser
as contemplated by this Agreement), or (ii) any right of first offer or right of first refusal to
purchase all or any portion of the Property.

(xv) Seller is not the debtor under any bankruptcy proceedings, voluntary or involuntary, and
has not made an assignment for the benefit of creditors.

(xvi) There exist no actual or, to Seller’s knowledge, threatened in writing union strikes,
work stoppages or slow downs or any other labor disputes concerning individuals employed at the
Hotel which may materially and adversely affect the Property or which would otherwise prevent
Seller from performing its material obligations under this Agreement on the Closing Date, except as
set forth on Schedule F.

(xvii) Except as disclosed on Schedule H or in the environmental reports (and all
modifications thereto) listed on Schedule H, Seller has not received any written notice
from any governmental or regulatory authority of the presence or release of any Hazardous Substance
that is regulated under any Environmental Laws that would cause the Premises to be in material
violation of any applicable Environmental Laws, which material violation remains uncured.

(b) For the purposes of this Agreement the term “to Seller’s knowledge”, and similar terms,
shall be limited to the actual knowledge of Vann Avedisian (the “Seller Knowledge Party”).
The knowledge of others shall not be imputed to the Seller Knowledge Party. The parties hereby
agree that recourse under this Agreement is limited to Seller and no claim will be made against
Neil Luthra individually or in his capacity as the Seller Knowledge Party.

 

33

 

(c) Notwithstanding the foregoing, if to Purchaser’s knowledge, any of Seller’s
representations or warranties set forth in Section 13(a) hereof were untrue prior to
Closing and Purchaser nonetheless elects to close the purchase contemplated under this
Agreement, then Purchaser shall not be permitted to seek damages (or deliver a Claim Notice) with
respect to the breach of such representations or warranties following Closing (but the foregoing
shall not prohibit Purchaser from seeking a Purchase Price credit in respect thereof to the extent
permitted under Section 21(c)(ii) hereof).

(d) The parties agree that under no circumstance will either party be entitled to
Consequential Damages as a result of a breach of a representation or warranty under this Agreement,
and each party hereby waives any rights to seek same. Purchaser shall notify Seller in writing
within five (5) Business Days after Purchaser’s knowledge of any default or breach hereunder by
Seller or that any of Seller’s representations was untrue when made or has subsequently become
untrue, and Seller shall not be liable for any claims or suits relating to a particular default or
breach if Purchaser fails to provide a Claim Notice in respect of same within said 3-Business Day
period. For the purposes of this Agreement the term “to Purchaser’s knowledge”, and similar terms,
shall be limited to the actual knowledge of any one or more of William Tennis and/or Chris King
(collectively, the “Purchaser Knowledge Party”). The knowledge of others shall not be
imputed to the Purchaser Knowledge Party. The parties hereby agree that recourse under this
Agreement is limited to Purchaser and no claim will be made against William Tennis or Chris King
individually or in each of his/her capacity as the Purchaser Knowledge Party.

(e) Purchaser represents and warrants to Seller as of the date hereof that:

(i) Purchaser is duly organized, validly existing and in good standing under the laws of the
state of its formation, and has the requisite power and authority to enter into and carry out the
transactions contemplated by this Agreement.

(ii) The execution and delivery of this Agreement and the performance by Purchaser of its
obligations hereunder do not and will not conflict with or violate any law, rule, judgment,
regulation, order, writ, injunction or decree of any court or governmental or quasi-governmental
entity with jurisdiction over Purchaser, including, without limitation, the United States of
America, the State of New York, or any political subdivision of either of the foregoing, or any
decision or ruling of any arbitrator to which Purchaser is a party or by which Purchaser is bound
or affected, as the case may be, which conflict or violation would prevent Purchaser from
performing its obligations pursuant to this Agreement.

(iii) This Agreement has been duly authorized by all necessary action on the part of
Purchaser, constitutes the legal, valid and binding obligation of Purchaser, enforceable against
Purchaser in accordance with its terms. Neither the execution, delivery and performance of this
Agreement nor the consummation of the transactions contemplated hereby is prohibited by, or
requires Purchaser to obtain any consent, authorization or approval of (or registration with) any
governmental authority or any third-party under any law, statute, rule, regulation, judgment,
order, writ, injunction, decree, contract or agreement which is binding upon Purchaser, the failure
of which would prevent Purchaser from performing its obligations under this Agreement.

 

34

 

(iv) No action, suit, claim, investigation or proceeding, whether legal or administrative or
in mediation or arbitration, is pending or, to Purchaser’s knowledge, threatened, at law or in
equity, against Purchaser before or by any court or federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality which may materially and adversely
affect Purchaser’s ability or which otherwise would prevent Purchaser from performing its
obligations pursuant to this Agreement, and there are no judgments, decrees or orders entered on a
suit or proceeding against Purchaser, an adverse decision in which might, or which judgment, decree
or order does, materially and adversely affect Purchaser’s ability or which otherwise would prevent
Purchaser from performing its obligations pursuant to, or Seller’s rights under, this Agreement, or
which seeks to restrain, prohibit, invalidate, set aside, rescind, prevent or make unlawful this
Agreement or the carrying out of this Agreement or the transactions contemplated hereby. There is
no material litigation or regulatory action pending or, to the Purchaser’s knowledge, threatened
against Purchaser, Purchaser’s Principals and/or Related Entities which may materially and
adversely affect Purchaser’s ability to perform under, or which otherwise would prevent Purchaser
from performing its obligations pursuant to, this Agreement. “Purchaser’s Principals” means
Purchaser’s (A) managing members, general partners or principal shareholders and (B) such other
members, partners or shareholders who directly or indirectly own a fifteen percent (15%) or greater
interest in Purchaser. “Related Entities” means all other entities which may be owned or
controlled directly or indirectly by Purchaser’s Principals.

(v) Neither Purchaser, nor any person controlling or controlled by Purchaser, is a country,
territory, individual or entity named on a Government List, and the monies used in connection with
this Agreement and amounts committed with respect thereto, were not and are not derived from any
activities that contravene any applicable anti-money laundering or anti-bribery laws and
regulations (including funds being derived from any person, entity, country or territory on a
Government List or engaged in any unlawful activity defined under Title 18 of the United States
Code, Section 1956(c)(7)). Purchaser is not a person or an entity described by Section 1 of the
Executive Order and does not engage in any dealings or transactions and is not otherwise associated
with any such persons or entities.

(vi) None of Purchaser or, to Purchaser’s knowledge, its affiliates are acting, directly or
indirectly, on behalf of terrorists, terrorist organizations or narcotics traffickers, including
those persons or entities that appear on the Annex to the Executive Order, are included on any
relevant lists maintained by the Office of Foreign Assets Control of U.S. Department of Treasury,
U.S. Department of State, or other U.S. government agencies, all as may be amended from time to
time.

(vii) Purchaser has not been a party to any bankruptcy proceedings, voluntary or involuntary,
made an assignment for the benefit of creditors or taken advantage of any insolvency act, or any
act for the benefit of debtors.

(viii) Purchaser is not acquiring the Property with the assets of an employee benefit plan as
defined in Section 3(3) of ERISA.

 

35

 

(f) Subject to Purchaser’s compliance with the requirements of Section 13(g) below,
Seller’s representations and warranties contained in (i) Section 13(a)(i) through
Section 
13(a)(iii) above, inclusive, shall survive the Closing as to any Claim asserted in a
Claim Notice in accordance with Section 13(g) below until the expiration of the statute of
limitations period applicable with respect thereto, and (ii) Section 13(a)(iv) through
Section 13(a)(xvii) above, inclusive, shall survive the Closing as to any Claim that is
asserted in a Claim Notice in accordance with Section 13(g) below within a period of one
hundred eighty (180) days after the Closing Date (such survival periods referred to in
sub-clauses (i) and (ii) immediately above, collectively or individually as the
context may require, the “Limitation Period”). Each such representation and/or warranty
shall automatically become null and void and of no further force and effect after the Limitation
Period unless, prior to the end of the Limitation Period, TIME BEING OF THE ESSENCE, Purchaser
shall have delivered a Claim Notice relating thereto to Seller. Subject to Section 21(c)
below, in no event will Seller be liable to Purchaser in excess of the Maximum Liability Amount, in
the aggregate, for actual damages pursuant to any Claim Notice(s).

(g) Subject to the terms of this Agreement (including, without limitation, Section
13(f) above and Section 21(c) below), if either party desires to make a claim that the
other was in breach of a representation or warranty contained in Section 13 of this
Agreement, then such claiming party shall deliver a written notice (in the case of Seller’s claim,
each such notice, a “Breach Notice” and in the case of Purchaser’s claim, each such notice,
a “Claim Notice”) thereof to the other party. Any such Breach Notice or Claim Notice, as
the case may be, in order to be effective, must allege that (i) the other party was in breach of
such representation or warranty either when initially made under this Agreement or when made at
Closing, (ii) the claiming party did not have actual knowledge of such breach at Closing (as and to
the extent such Breach Notice or Claim Notice is given after the Closing) and (iii) the claiming
party has suffered, or reasonably anticipates that it will suffer, actual damages as a direct
result thereof. If, following the Closing, a party shall have timely issued a Breach Notice or
Claim Notice, as the case may be, the parties shall endeavor in good faith to resolve such matter
within twenty (20) Business Days following the issuance of the Breach Notice or the Claim Notice,
as applicable (said 20-Business Day period is hereinafter referred to as the “Settlement
Period”). If the parties are unable to resolve such matter by the expiration of the Settlement
Period, the claiming party may commence a proceeding asserting its claim in a court of competent
jurisdiction, subject in all cases to the Limitation Period and the terms of Section 13(f)
above. From and after the date that is one hundred fifty (150) days following the expiration of the
Settlement Period, the non-claiming party may notify the claiming party in writing that the
claiming party must commence a proceeding asserting its claim with respect to the Breach Notice or
Claim Notice in question, within thirty (30) days of receipt of said notice. If the claiming party
fails to commence such a proceeding within said thirty (30) day period, the non-claiming party may
deliver a second notice which shall inform the claiming party, in capitalized type of at least 12
points in size on the top of the first page: “THIS NOTICE IS BEING DELIVERED PURSUANT TO
SECTION 13(g) OF THAT CERTAIN PURCHASE AND SALE AGREEMENT WITH [LEXINGTON HOTEL, LLC]
[DIAMONDROCK NY LEX OWNER, LLC]. IF YOU FAIL TO COMMENCE A PROCEEDING ASSERTING THE APPLICABLE
CLAIM WITHIN TEN (10) BUSINESS DAYS OF YOUR RECEIPT OF THIS NOTICE, YOU SHALL BE DEEMED TO HAVE
WAIVED SUCH CLAIM UNDER THE TERMS OF THE PURCHASE AND SALE AGREEMENT.” If the claiming party
thereafter fails to commence a proceeding with respect to such claim within said ten (10) Business
Day period, the claim in question shall be deemed waived by the claiming party under this
Agreement. In the event that a proceeding is
commenced: (A) the party so commencing the proceeding shall diligently prosecute its claim,
and (B) the prevailing party shall be entitled to recover its reasonable legal fees and all related
out-of-pocket expenses actually incurred from the other party.

 

36

 

(h) The provisions of this Section 13 shall (i) be subject to the provisions of
Section 21(c) and (ii) survive the Closing, but, in the case of the representations and
warranties set forth in Section 13(a) above, such survival shall be limited to the extent
set forth in Section 13(c) and Section 13(f) above.

14. DAMAGE AND DESTRUCTION.

(a) If all or any part of the Building is damaged by fire or other casualty occurring
following the date hereof and prior to the Closing Date (and not caused by Purchaser, Purchaser’s
Representatives, and/or any of their affiliates), whether or not such damage affects a material
part of the Building, then:

(i) If the estimated cost of repair or restoration is less than or equal to five percent (5%)
of the Purchase Price or if the estimated time to substantially complete such repair or restoration
is nine (9) months or less, neither party shall have the right to terminate this Agreement, (y) the
parties shall nonetheless consummate the transactions in accordance with this Agreement, without
any abatement of the Purchase Price or any liability or obligation on the part of Seller by reason
of such destruction or damage, and (z) Seller shall assign to Purchaser and Purchaser shall have
the right to make a claim for and to retain any casualty insurance proceeds received under the
casualty insurance policies in effect with respect to the Premises on account of such physical
damage or destruction as shall be necessary to perform repairs to the Building and/or to rebuild
the Building to substantially the same condition as it existed prior to the occurrence of such fire
or other casualty and Purchaser shall receive a credit against the balance of the Purchase Price
due at Closing for the amount of the deductible on such casualty insurance policy less any amounts
reasonably and actually expended by Seller to collect any such insurance proceeds or to remedy any
unsafe conditions at the Property or to repair or restore any damages to substantially the same
condition as existed prior to the occurrence of such fire or other casualty, in no event to exceed
the amount of the loss. In the event such amounts spent by Seller exceed the amount of the
deductible on such casualty insurance policy, then Purchaser shall deliver such excess amount to
Seller, within ten (10) Business Days of its receipt of any casualty insurance proceeds received on
account of such casualty.

(ii) If the estimated cost of repair or restoration exceeds five percent (5%) of the Purchase
Price and if the estimated time to substantially complete such repair or restoration exceeds nine
(9) months, Purchaser shall have the option, exercisable on or prior to the Casualty Election Date
(as defined below), to terminate this Agreement or to consummate the transactions in accordance
with this Agreement by delivering notice of such election to Seller; upon Purchaser’s election to
terminate this Agreement in accordance herewith, the Deposit (together with all interest accrued
thereon) shall be returned to Purchaser and this Agreement shall be deemed canceled and of no
further force or effect, and neither party shall have any further rights or liabilities against or
to the other except for such provisions which are expressly provided in this Agreement to survive
the termination hereof. If a fire or other casualty

 

37

 

described in this clause (ii) shall
occur and Purchaser shall not timely elect to consummate the transactions in accordance with this Agreement, then Purchaser shall be deemed to have elected
to consummate the transactions in accordance with this Agreement. If a fire or other casualty
described in this clause (ii) shall occur and Purchaser shall timely elect (or be deemed to
have elected) to consummate the transactions in accordance with this Agreement, (y) the parties
shall consummate the transactions in accordance with this Agreement, without any abatement of the
Purchase Price or any liability or obligation on the part of Seller by reason of such destruction
or damage and (z) Seller shall assign to Purchaser and Purchaser shall have the right to make a
claim for and to retain any casualty insurance proceeds received under the casualty insurance
policies in effect with respect to the Premises on account of such physical damage or destruction
as shall be necessary to perform repairs to the Building and/or to rebuild the Building to
substantially the same condition as it existed prior to the occurrence of such fire or other
casualty and Purchaser shall receive a credit against the balance of the Purchase Price due at
Closing for the amount of the deductible on such casualty insurance policy less any amounts
reasonably and actually expended by Seller to collect any such insurance proceeds or to remedy any
unsafe conditions at the Property or to repair or restore any damages to substantially the same
condition as existed prior to the occurrence of such fire or other casualty, in no event to exceed
the amount of the loss.

(b) The estimated cost to repair and/or restore and the estimated time to complete, as
contemplated in subsection (a) above, shall be established by estimates obtained by Seller
from independent contractors, subject to Purchaser’s review and reasonable approval of same and the
provisions of Section 14(c) below.

(c) Any disputes under this Section 14 as to the cost of repair or restoration or the
time for completion of such repair or restoration shall be resolved by expedited arbitration before
a single arbitrator acceptable to both Seller and Purchaser in their reasonable judgment in
accordance with the rules of the AAA; provided, that if Seller and Purchaser fail to agree
on an arbitrator within five (5) days after a dispute arises, then either party may request that
the AAA designate an arbitrator. Any dispute submitted to arbitration pursuant to the provisions of
this Section 14 shall be held in the City of New York before a single arbitrator under the
Expedited Procedures provisions of the Commercial Arbitration Rules of the AAA. The arbitrator
conducting any such arbitration shall be bound by the provisions of this Agreement and shall not
have the power to add to, subtract from or otherwise modify such provisions, and the arbitrator
shall consider only the specific issues submitted to it for resolution. Such arbitrator shall be an
independent general contractor having at least ten (10) years of experience in the construction of
high rise, first class hotel towers in New York, New York comparable to the standards set forth in
this Agreement. The determination of the arbitrator shall be conclusive and binding upon the
parties. The costs and expenses of such arbitrator shall be borne equally by Seller and Purchaser.

(d) For the avoidance of doubt, the provisions of Section 5-1311 of the General Obligations
Law shall not apply to this Agreement. The provisions of this Section 14 shall survive
Closing.

(e) “Casualty Election Date” means (x) the tenth (10th) Business Day
following Seller’s delivery of the estimates as described in clause (b) above or, (y) in the event
any dispute under this Section 14 as to the cost of repair or restoration or the time for
completion
of such repair or restoration, the tenth (10th) Business Day following final
resolution of such dispute by arbitration determination or agreement of the parties.

 

38

 

15. CONDEMNATION.

(a) If, prior to the Closing Date, any part of the Premises is taken (other than a temporary
taking), or if Seller shall receive an official notice from any governmental authority, having
eminent domain power over the Premises, of its intention to take, by eminent domain proceeding, any
part of the Premises (a “Taking”), then:

(i) if such Taking involves an area less than or equal to fifteen percent (15%) of the entire
Premises and does not materially adversely affect access to, or operations of, the Hotel (which
cannot be cured prior to, or in a reasonable period of time after, Closing), then neither party
shall have any right to terminate this Agreement and the parties shall nonetheless consummate this
transaction in accordance with this Agreement (it being understood that in the event that a portion
of the Premises is taken, Seller shall be relieved of its duty to convey the title to the portion
of the parcel so taken) without any abatement of the Purchase Price or any liability or obligation
on the part of Seller by reason of said Taking, provided, however, that Seller
shall, on the Closing Date (i) assign and remit to Purchaser, and Purchaser shall be entitled to
receive and keep, the net proceeds of any award or other proceeds of such Taking which may have
been collected by Seller as a result of such Taking less any amounts actually expended by Seller in
connection with such Taking, or (ii) if no award or other proceeds have been collected, deliver to
Purchaser an assignment of Seller’s right to any such award or other proceeds which may be payable
to Seller as a result of such Taking and Purchaser shall reimburse Seller for any amounts actually
expended by Seller in connection with such Taking.

(ii) if such Taking involves an area more than fifteen percent (15%) of the entire Premises or
materially adversely affects access to, or the operations of, the Hotel (which cannot be cured
prior to, or in a reasonable period of time after Closing), then both Purchaser and Seller shall
each have the option, exercisable within ten (10) days after receipt of notice of such Taking, TIME
BEING OF THE ESSENCE, to terminate this Agreement by delivering written notice thereof to the other
party, whereupon the Deposit (together with all interest accrued thereon) shall be returned to
Purchaser, and this Agreement shall be deemed canceled and of no further force or effect, and
neither party shall have any further rights or liabilities against or to the other except pursuant
to the provisions of this Agreement, which are expressly provided to survive the termination
hereof. If a Taking described in this clause (ii) shall occur and neither party hereunder
shall have timely elected to terminate this Agreement, then Purchaser and Seller shall consummate
the transactions contemplated by this Agreement (it being understood that in the event that a
portion of the Premises is taken, Seller shall be relieved of its duty to complete construction and
convey the title to the portion of the parcel so taken), without any abatement of the Purchase
Price or any liability or obligation on the part of Seller by reason of such Taking,
provided, however, that Seller shall, on the Closing Date, (i) assign and remit to
Purchaser, and Purchaser shall be entitled to receive and keep, the net proceeds of any award or
other proceeds of such Taking which may have been collected by Seller as a result of such Taking
less any amounts actually expended by Seller in connection with such Taking, or (ii) if no award or
other proceeds shall have been collected, deliver to Purchaser an assignment of Seller’s right to
any such award or other proceeds which may be payable to Seller as a result of
such Taking, and Purchaser shall reimburse Seller for any amounts actually expended by Seller
in connection with such Taking.

 

39

 

(b) Any disputes under this Section 15 as to whether the Taking involves more than
fifteen percent (15%) of the entire Premises, or whether such Taking materially adversely affects
access to, or the operations of, the Hotel, shall be resolved by expedited arbitration before a
single arbitrator acceptable to both Seller and Purchaser in their reasonable judgment in
accordance with the rules of the AAA; provided that if Seller and Purchaser fail to agree on an
arbitrator within five days after a dispute arises, then either party may request that the AAA
designate an arbitrator. Any dispute submitted to arbitration pursuant to the provisions of this
Section 15 shall be held in the City of New York before a single arbitrator under the
Expedited Procedures provisions of the Commercial Arbitration Rules of the AAA. The arbitrator
conducting any such arbitration shall be bound by the provisions of this Agreement and shall not
have the power to add to, subtract from or otherwise modify such provisions, and the arbitrator
shall consider only the specific issues submitted to it for resolution. Such arbitrator shall be an
independent architect having at least ten (10) years of experience in the construction of high
rise, first class hotel towers in New York, New York comparable to the standards set forth in this
Agreement. The determination of the arbitrator shall be conclusive and binding upon both parties.
The costs and expenses of such arbitrator shall be borne equally by Seller and Purchaser.

16. BROKERS AND ADVISORS.

(a) Purchaser represents and warrants to Seller that it has not dealt or negotiated with, or
engaged on its own behalf or for its benefit, any broker, finder, consultant, advisor, or
professional in the capacity of a broker or finder (each, a “Broker”) in connection with
this Agreement or the transactions contemplated hereby, other than Eastdil Secured, LLC. Purchaser
and Principal, jointly and severally, hereby agree to indemnify, defend and hold Seller and the
other Seller Related Parties harmless from and against any and all claims, demands, causes of
action, losses, costs and expenses (including reasonable attorneys’ fees, court costs and
disbursements) arising from any claim for commission, fees or other compensation or reimbursement
for expenses made by any Broker (other than Eastdil Secured, LLC) engaged by or claiming to have
dealt with Purchaser in connection with this Agreement or the transactions contemplated hereby.

(b) Seller represents and warrants to Purchaser that it has not dealt or negotiated with, or
engaged on its own behalf or for its benefit, any Broker in connection with this Agreement or the
transactions contemplated hereby, other than Eastdil Secured, LLC. Seller hereby agrees to
indemnify, defend and hold Purchaser and its direct and indirect shareholders, officers, directors,
partners, principals, members, employees, agents, contractors and any successors or assigns of the
foregoing, harmless from and against any and all claims, demands, causes of action, losses, costs
and expenses (including reasonable attorneys’ fees, court costs and disbursements) arising from any
claim for commission, fees or other compensation or reimbursement for expenses made by any Broker
(including Eastdil Secured, LLC) engaged by or claiming to have dealt with Seller in connection
with this Agreement or the transactions contemplated hereby. Upon the Closing, Eastdil Secured, LLC
shall be paid a commission by Seller pursuant to a separate written agreement.

(c) The provisions of this Section 16 shall survive the termination of this Agreement
or the Closing.

 

40

 

17. TRANSFER TAXES AND RECORDING CHARGES; OTHER COSTS.

(a) At the Closing, Seller and Purchaser shall execute, acknowledge, deliver and file all such
returns (or, if required by ACRIS E-tax procedures, an electronic version thereof) as may be
necessary to comply with any applicable city, county or state conveyance tax laws and/or New York
real estate conveyance tax laws (including, without limitation, Article 31 of the Tax Law of the
State of New York and the regulations applicable thereto, and the New York City Real Property
Transfer Tax Law (Admin. Code Chapter 21) and the regulations applicable thereto) (collectively, as
the same may be amended from time to time, the “Transfer Tax Laws”). The transfer taxes
payable pursuant to the Transfer Tax Laws shall collectively be referred to as the “Transfer
Taxes”. On the Closing Date, Seller shall pay (or cause to be paid) to the appropriate party
the Transfer Taxes payable under the Transfer Tax Laws, if any, in connection with the consummation
of the transactions contemplated by this Agreement.

(b) Seller shall be responsible for (i) the costs of its legal counsel, accountants, advisors
and other professionals employed by it in connection with the sale of the Property, and (ii)
one-half of all escrow fees, including, without limitation, Escrow Agent fees.

(c) Purchaser shall be responsible for (i) the costs and expenses associated with its
inspection of the Premises and its due diligence, (ii) the costs and expenses of its legal counsel,
accountants, advisors and other professionals employed by it in connection with the purchase of the
Property, (iii) all premiums and fees for title examination and title insurance and endorsements
obtained in connection with the transactions contemplated by this Agreement and all related charges
and survey costs in connection therewith, (iv) all costs and expenses incurred in connection with
any financing obtained by Purchaser, including without limitation, loan fees, mortgage recording
taxes, lender’s legal fees and any costs, expenses or fees incurred in connection with the Mortgage
Assignment, (v) all recording fees for the Deed and any documentation to be recorded in connection
with the purchase transaction contemplated by this Agreement, (vi) all fees, costs and expenses
incurred in connection with the transfer of the Existing Liquor License, (vii) all fees, costs and
expenses incurred in connection with the transfer of the Franchise Agreement and obtaining a New
License, and (viii) one-half of all escrow fees, including, without limitation, Escrow Agent fees.

(d) The provisions of this Section 17 shall survive the Closing.

18. DELIVERIES TO BE MADE ON THE CLOSING DATE.

(a) Seller’s Documents and Deliveries: On the Closing Date, if not previously
delivered to, or not in the possession or control of Purchaser, Seller shall deliver or cause to be
delivered to Purchaser and/or the Title Company (as applicable) the following:

(i) A duly executed and acknowledged Bargain and Sale Deed Without Covenants Against Grantor’s
Acts (the “Deed”), which shall be substantially in the form attached hereto as Exhibit
1;

 

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(ii) A duly executed Bill of Sale, which shall be substantially in the form attached hereto as
Exhibit 2;

(iii) A duly executed certification as to Seller’s non- foreign status, if appropriate, which
shall be substantially in the form attached hereto as Exhibit 3;

(iv) An owner’s affidavit (which need only be delivered to the Title Company), which shall be
substantially in the form attached hereto as Exhibit 4;

(v) Originals (or if originals are unavailable, copies) of the Leases and Contracts then in
effect to the extent in Seller’s possession, together with such leasing and property files and
records which are material in connection with the continued operation, leasing and maintenance of
the Property and any keys to security deposit boxes;

(vi) Originals or, if unavailable, copies, of all warranties and guaranties which Seller is
required to assign to Purchaser pursuant to and in accordance with the terms of this Agreement, to
the extent same are in Seller’s possession or control;

(vii) Originals or, if unavailable, copies, of all permits, licenses and approvals relating to
the ownership, use or operation of the Premises, to the extent in Seller’s possession or control;

(viii) Originals, or, if unavailable, copies, of plans and specifications, technical manuals
and similar materials for the Building to the extent same are in Seller’s possession or control;

(ix) The cash security deposits (together with interest accrued thereon less any permitted
administrative fee) and letters of credit held by Seller as security under the Leases, but only to
the extent the same have not been applied in accordance with the Leases or returned to tenants and
relate to tenants occupying space in the Building on the Closing Date pursuant to Leases then in
effect;

(x) Keys and combinations in Seller’s possession relating to the operation of the Premises;

(xi) Originals of the Estoppel Certificates, if any, obtained pursuant to Section 23;

(xii) A form of letter to all tenants under the Leases and counterparties to Contracts to be
delivered by Purchaser in the form of Exhibit 11;

(xiii) A copy of the termination agreement executed by Seller and Manager, which has the
effect of terminating the Existing Management Agreement effective as of the Closing Date;

(xiv) A. At the Closing, Purchaser shall deliver the sum of the Maximum Liability Amount
(which amount may be withheld from the Purchase Price at Closing) (the “Holdback Escrow”),
to the Escrow Agent to be held in escrow pursuant to an
Escrow Holdback Agreement substantially in the form attached hereto as Exhibit 9
(“Escrow Holdback Agreement”), to secure Seller’s obligations after Closing for a Claim;

 

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B. Unless Purchaser shall have delivered a Claim Notice to Seller prior to the date that is
one hundred eighty (180) days after the Closing Date (such period, the “Holdback Period”),
Escrow Agent shall be instructed to, and shall, on the first Business Day after the expiration of
the Holdback Period, deliver to Seller the Holdback Escrow;

C. Notwithstanding the forgoing, and as more particularly set forth in the Escrow Holdback
Agreement, provided Purchaser shall have delivered a Claim Notice to Seller prior to the expiration
of the Holdback Period, then, if the Claim asserted in such Claim Notice has not been resolved as
of the expiration of the Holdback Period, Escrow Agent shall continue to hold in escrow such
portion of the Holdback Escrow in an amount equal to the Claimed Damage set forth in such Claim
Notice until Escrow Agent is authorized to disburse the same in accordance with the terms of this
sub-paragraph C, and shall pay to Seller the balance of the Holdback Escrow on the first
Business Day following the expiration of the Holdback Period. Escrow Agent shall continue to hold
the Holdback Escrow until the earlier of (x) Escrow Agent’s receipt of joint instructions from
Purchaser and Seller, in which event Escrow Agent shall deliver the Holdback Escrow in accordance
with such instructions or (y) the entry of a final, non-appealable judgment with respect to the
applicable Claim in which event Escrow Agent shall deliver the Holdback Escrow in accordance with
the terms of said judgment;

D. Notwithstanding the forgoing, Seller shall be permitted to deliver to Purchaser at Closing,
in lieu of the Holdback Escrow and without the need to enter into the Escrow Holdback Agreement, an
indemnity from a creditworthy entity reasonably acceptable to Purchaser which indemnity will (x) be
used to secure Seller’s obligations after Closing in the same manner as was intended in
sub-paragraphs A, B, and C above and (y) have a maximum liability in the
amount of the Maximum Liability Amount;

E. Purchaser shall not be entitled to receive any damages for any Claim that is asserted
following the expiration of the applicable Limitation Period with respect to such claim. Further,
and notwithstanding anything to the contrary contained in this Agreement, under no circumstances
shall Purchaser be permitted to make a Claim for or receive Consequential Damages;

(xv) A duly executed original certificate of Seller in the form of Exhibit 15 updating
the representations and warranties of Seller contained herein to the Closing Date and noting any
changes thereto; and

(xvi) Any other documents required in connection with the transactions specified in this
Agreement, and any other documents reasonably required by the Title Company in connection with the
transactions contemplated by this Agreement as long as such documents reasonably required by the
Title Company do not require Seller to incur additional cost, take on any additional obligations or
expose Seller to any additional risks or liability.

 

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Seller shall be deemed to have delivered the items set forth in sub-clauses (a)(v),
(a)(vi), (a)(vii), (a)(viii) and (a)(x) above if the same are left in the
management office of the Premises on the Closing Date.

(b) Purchaser’s Documents and Deliveries: On the Closing Date, Purchaser, shall
deliver or cause to be delivered to Seller the following:

(i) The balance of the Purchase Price payable at the Closing by 2:00 P.M., New York time, on
the Closing Date (TIME BEING OF THE ESSENCE), as adjusted for apportionments under Section
8, and subject to Purchaser’s delivery of the Holdback Escrow pursuant to Section
18(a)(xiv)(A)(1), if applicable, in the manner required under this Agreement;

(ii) A letter of direction from Purchaser (the form of which shall be subject to Seller’s
reasonable approval) directing Escrow Agent to deliver the Deposit (together with all interest
accrued thereon) to Seller and to pay the balance of the Purchase Price, as adjusted for
apportionments under Section 8, and subject to Purchaser’s delivery of the Holdback Escrow
pursuant to Section 18(a)(xiv)(A), and all other amounts due at Closing, or thereafter in
accordance with the provisions of this Agreement, to Seller or any other person as Seller shall
designate;

(iii) A letter in the form of Exhibit 5 attached hereto duly executed by Purchaser,
confirming that Purchaser is not acquiring the Property with the assets of an employee benefit plan
as defined in Section 3(3) of ERISA and, in the event Purchaser is unable or unwilling to make such
a representation, Purchaser shall be deemed to be in default hereunder, and Seller shall have the
right to terminate this Agreement and to receive and retain the Deposit (together with all interest
accrued thereon);

(iv) Any other documents required in connection with the transactions specified in this
Agreement, and any other documents reasonably required by the Title Company;

(v) An original counterpart of the Replacement Management Agreement; and

(vi) A duly executed original certificate of Purchaser in the form of Exhibit 15
updating the representations and warranties of Purchaser contained herein to the Closing Date.

 

44

 

(c) Jointly Executed Documents: Seller and Purchaser shall, on or before the Closing
Date, each execute, acknowledge (as appropriate) and exchange the following documents:

(i) Any transfer tax returns required under any Transfer Tax Laws applicable to the
transactions contemplated under this Agreement;

(ii) An Assignment and Assumption of Contracts, which shall be substantially in the form
attached hereto as Exhibit 6;

(iii) A General Assignment and Assumption Agreement, which shall be substantially in the form
attached hereto as Exhibit 7;

(iv) An Assignment and Assumption of the Collective Bargaining Agreement, which shall be
substantially in the form attached hereto as Exhibit 8;

(v) The Franchise Indemnity Agreement (if applicable);

(vi) An Assignment and Assumption of Leases, which shall be substantially in the form attached
hereto as Exhibit 13.

(vii) Any other affidavit, document or instrument required to be delivered by Seller or
Purchaser pursuant to the terms of this Agreement.

19. CLOSING DATE.

The closing of the transactions contemplated hereunder (the “Closing”) shall occur,
and the documents referred to in Section 18 of this Agreement shall be delivered upon
Purchaser’s tender of the Purchase Price provided for in this Agreement, at 10:00 A.M., New York
time, on May 25, 2011 (such date, as it may be adjourned pursuant to this Agreement, the
“Scheduled Closing Date”; and the actual date of the Closing, the “Closing Date”),
at the offices of Seller’s attorneys, Fried, Frank, Harris, Shriver & Jacobson LLP, One New York
Plaza, New York, New York 10004 or, at Seller’s election, 375 Park Avenue, New York, New York
10152. TIME IS OF THE ESSENCE as to Purchaser’s and Seller’s obligation to close the transactions
contemplated under this Agreement on the Scheduled Closing Date (or, if either party shall have
extended the Scheduled Closing Date pursuant to the terms of this Agreement, on such Scheduled
Closing Date so designated by the applicable party; it being acknowledged and agreed that Purchaser
shall have no right to extend the Scheduled Closing Date except as expressly provided in
Section 10(d)).

 

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20. NOTICES.

(a) Except as otherwise expressly provided in this Agreement, all notices, demands, requests
or other communications hereunder (each a “Notice” and collectively, “Notices”)
required to be given or which may be given hereunder shall be in writing and shall be sent by (i)
certified or registered mail, return receipt requested, postage prepaid, or (ii) national overnight
delivery service, or (iii) facsimile transmission (provided that a copy shall be delivered by the
next Business Day, by a national overnight delivery service or personal delivery), or (iv) personal
delivery, addressed as follows:

If to Seller:

Lexington Hotel, LLC

c/o Highgate Holdings, Inc.

545 E. John Carpenter Fwy, Suite 1400

Irving, Texas 75062

Attention: Mahmood Khimji and Lynne A. Messina

Telephone No.: (972) 444-9700

Facsimile No.: (972) 401-2400

and

Lexington Hotel, LLC

c/o Highgate Holdings, Inc.

870 Seventh Avenue, 2nd Floor

New York, New York 10019

Attention: Neil Luthra

Telephone No.: (212) 707-5041

Facsimile No.: (212) 707-5555

and

Lexington Hotel, LLC

c/o Blackstone Real Estate Advisors

345 Park Avenue

New York, NY 10154

Attention: Bill Stein and Glenn Alba

Telephone No: (212) 583-5898

Facsimile No: (212) 583-5202

and

Lexington Hotel, LLC

c/o Goldman Sachs & Co.

200 West Street, 28th Floor

New York, New York 10282

Attention: Jeffrey M. Fine

Telephone No: (212) 902-4252

Facsimile No: (212) 357-5505

 

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with copies to:

Fried, Frank, Harris, Shriver & Jacobson LLP

One New York Plaza

New York, New York 10004

Attention: Ross Z. Silver, Esq.

Telephone No.: (212) 859-8078

Facsimile No.: (212) 859-4000

If to Purchaser:

DiamondRock NY Lex Owner, LLC

c/o DiamondRock Hospitality Company

3 Bethesda Metro Center

Suite 1500

Bethesda, Maryland 20814

Attention: General Counsel

Telephone No.: (240) 744-1188

Facsimile No.: (240) 477-1199

with copy to:

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, New York 10019-6099

Attention: Steven D. Klein, Esq.

Telephone: No. (212) 728-8221

Facsimile No.: (212) 728-9221

If to Escrow Agent or Title Company:

Commonwealth Land Title Insurance Company

140 East 45th Street, 22nd Floor

New York, New York 10017

Attention: Peter G. Doyle

Telephone No.: (212) 973-6207

Facsimile No.: (212) 986-3215

(b) Any Notice so sent by certified or registered mail, return receipt requested, postage
prepaid, shall be deemed given upon delivery (or at the time of refusal to accept delivery) as
indicated on the return receipt thereto. Any Notice so sent by national overnight delivery service
or personal delivery shall be deemed given on the next Business Day when sent (or at the time of
refusal to accept delivery) as indicated on the return receipt or the receipt of the national
overnight delivery service or personal delivery service. Any Notice sent by facsimile transmission
shall be deemed given when received as confirmed by the telecopier electronic
confirmation receipt (if followed by overnight delivery service as provided above). All
Notices delivered after 5:00 p.m. (New York time) shall be deemed delivered on the next Business
Day.

 

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(c) Notice may be given either by a party or by such party’s attorney. Seller or Purchaser may
designate, by not less than five (5) Business Days’ notice given to the other in accordance with
the terms of this Section 20, additional or substituted parties to whom Notices should be
sent hereunder. A party receiving a Notice which does not comply with the technical requirements
for notice under this Section 20 may elect to waive any deficiencies and treat the notice
as having been properly given.

21. DEFAULT BY PURCHASER OR SELLER.

(a) (i) If (1) Purchaser shall default in the payment of the Purchase Price, (2) Purchaser
shall default in the payment of the sums required to be paid by Purchaser under this Agreement at
Closing, (3) Purchaser shall default in delivering all Closing deliverables required of Purchaser
under this Agreement (executed where necessary or appropriate), and/or (4) Purchaser shall default
in the performance of any of its material obligations to be performed prior to the Closing Date and
such default shall continue for five (5) Business Days after notice to Purchaser specifying the
nature of such default, then Seller may, as its sole and exclusive remedy (except as provided in
Section 21(a)(ii)), terminate this Agreement by notice to Purchaser and thereafter
Purchaser and Seller shall have no further rights or obligations under this Agreement except for
those that are expressly provided in this Agreement to survive the termination hereof. If Seller
terminates this Agreement as described in this Section 21(a)(i), then Seller shall be
entitled, as its sole and exclusive remedy (except as provided in Section 21(a)(ii)), to
retain the Deposit (together with all interest accrued thereon) as liquidated damages for such
default, it being agreed that the damages to Seller by reason of such default are difficult, if not
impossible, to ascertain.

(ii) If Seller terminates this Agreement pursuant to a right given to it hereunder and
Purchaser takes any action which interferes with Seller’s ability to sell, exchange, transfer,
lease, dispose of or finance the Property or take any other actions with respect thereto
(including, without limitation, the filing of any lis pendens or other form of attachment against
the Property), then the named Purchaser (and any permitted assignee of Purchaser’s interest
hereunder) and, by its signature hereto, Principal shall be jointly and severally liable for all
losses, costs, damages (excluding Consequential Damages), liability or expense (including, without
limitation, reasonable attorneys’ fees, court costs and disbursements) (collectively, the
“Interference Damages”) incurred by Seller by reason of such action to contest by
Purchaser; provided, however, that in no event shall Seller be entitled to
Interference Damages beyond its retention of the Deposit (together with all interest accrued
thereon) upon a termination of this Agreement in accordance with Section 21(a)(i), except
to the extent a final non-appealable judgment has been entered whereby it is determined that
Purchaser’s interference or other acts (including, without limitation, any proceeding commenced by
Purchaser) were undertaken in bad faith and/or any such interference or Purchaser acts were
frivolous or wholly baseless in nature (that is, with no legal merit and/or no reasonable
expectation of prevailing) (any such judgment, “Bad Faith Finding”), in which case there
shall be no such limitation on the amount of the Interference Damages. Notwithstanding the
foregoing, none of the above liquidated damages shall be deemed to reduce or waive in any respect
the additional obligations of Purchaser and
Principal to indemnify Seller as provided in this Agreement. Nothing contained in this
Section 21(a)(ii) shall prevent Purchaser from commencing, or result in Purchaser or
Principal having any personal individual liability for commencing, a legal proceeding, in good
faith and based on a legitimate dispute, to determine whether Seller was entitled to terminate this
Agreement as aforesaid. Until such time as a Bad Faith Finding shall have been entered, neither
Purchaser nor Principal shall have any liability to Seller under this Section 21(a)(ii)
relating to any such dispute. The provisions of this Section 21(a)(ii) shall survive any
termination of this Agreement.

 

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(iii) Notwithstanding anything to the contrary set forth in this Agreement, (1) in no event
shall Purchaser or Principal be liable for any Consequential Damages with respect to any liability
of such parties to Seller under this Agreement, and (2) any liability of Purchaser or Principal to
Seller under this Agreement shall be net of any insurance proceeds and any indemnity, contribution
or other similar payment actually received by Seller from any insurance company (or other third
party in settlement of a claim relating thereto).

(b) (i) If Seller shall default in (1) any of its obligations to deliver the Property on the
Closing Date in the state (including state of title) required by this Agreement, (2) delivering all
Closing deliverables required of Seller under this Agreement (executed where necessary or
appropriate), (3) paying the sums required to be paid by Seller under this Agreement at Closing,
and/or (4) Seller shall default in the performance of any of its material obligations to be
performed prior to the Closing Date and Seller fails to cure such default within five (5) Business
Days after notice by Purchaser to Seller specifying the nature of such default, or if such default
is of a nature that it is not capable of being cured within such 5-Business Day period, Seller
fails to commence such cure within said 5-Business Day period and to thereafter diligently
prosecute the same to completion continuously and within such time as is reasonably necessary to
effectuate the same, but in no event more than sixty (60) days after Seller’s commencement of the
same, then Purchaser may elect, as its sole and exclusive remedy, either (A) subject to the other
provisions of this Section 21(b), to seek to obtain specific performance of such
obligations hereunder (it being expressly acknowledged by Purchaser that the remedy of specific
performance is an appropriate remedy in the event of a willful default by Seller under this
Agreement), provided, that any action for specific performance shall be commenced no later
than sixty (60) days after the Scheduled Closing Date it being understood that if Purchaser fails
to commence an action for specific performance on or prior to the expiration of said 60-day period,
Purchaser’s sole remedy shall be to receive a return of the Deposit (together with all interest
accrued thereon) and terminate this Agreement as described in sub-clause (B) of this
Section 21(b)(i); or (B) (in lieu of prosecuting an action for damages, specific
performance (as described in sub-clause (A) of this Section 21(b)(i)) or proceeding
with any other legal course of conduct, the right to bring such actions or proceedings being
expressly and voluntarily waived by Purchaser, to the extent legally permissible, following and
upon advice of counsel) shall have the right, subject to the other provisions of this Section
21(b), to terminate this Agreement and receive a refund of the Deposit (together with all
interest accrued thereon). If Purchaser elects to seek specific performance of this Agreement as
aforesaid, then as a condition precedent to any suit for specific performance, Purchaser shall on
or before the Scheduled Closing Date, TIME BEING OF THE ESSENCE, fully perform all of its
obligations hereunder which are capable of being performed (other than the payment of the Purchase
Price, which shall be paid as and when required by the court in the suit for specific performance).
Upon termination of this Agreement by Purchaser in accordance with sub-clause (B) of this
Section 21(b)(i) and the return and
delivery of the Deposit (together with all interest accrued thereon) hereunder to Purchaser,
this Agreement shall terminate and neither party hereto shall have any further obligations
hereunder except for those that are expressly provided in this Agreement to survive the termination
hereof.

 

49

 

(ii) In no event whatsoever shall Purchaser file any instrument of record (except for a lis
pendens filed in conjunction with an action for specific performance Purchaser timely commences in
accordance with this Section 21(b)) or (y) seek money damages of any kind as a result of
any default by Seller of this Agreement, except pursuant to those provisions of this Agreement that
expressly survive Closing or termination of this Agreement (subject to Section 21(c)
below).

(c) (i) Notwithstanding anything to the contrary set forth in this Agreement, and except for
(A) any Seller indemnity obligations pursuant to Section 16(b) (Brokerage) of this
Agreement (which shall be governed by the terms thereof) and (B) any costs and expenses related to
or arising in connection with any Purchaser action for specific performance or injunctive relief
against Seller pursuant to this Agreement and/or any costs and expenses incurred in connection with
Seller’s compliance with any order for specific performance and/or injunctive relief, all of which
items described in sub-clause (A) and sub-clause (B) above Seller acknowledges and
agrees shall not be subject to any cap on Seller’s liability (other than as provided in Section
25 of this Agreement) or any other Seller obligation to make any expenditure or incur any
expense hereunder, (1) Seller’s aggregate liability for breach or default of any covenant,
agreement, indemnity, representation or warranty under this Agreement (including, without
limitation, for all Claims and any Pre-Closing Claim Amount), or other obligation contained in this
Agreement (including, without limitation, any pre-Closing or post-Closing obligations which survive
the Closing) or in any document executed by Seller pursuant to this Agreement or in any other
instruments delivered at Closing shall not exceed the aggregate amount of Three Million and 00/100
Dollars ($3,000,000.00) (the “Maximum Liability Amount”), (2) Purchaser shall only be
entitled to make such a claim if Purchaser is reasonably and in good faith asserting that the
breach or default that is the basis for such a claim directly resulted in actual damages suffered
by Purchaser or that Purchaser reasonably anticipates that it will suffer, or a diminution in the
value of the Property in excess of One Hundred Fifty Thousand Dollars ($150,000.00) in the
aggregate (the “Threshold Amount”), (3) in no event shall Seller be liable for any
Consequential Damages with respect to any liability of Seller to Purchaser under this Agreement,
and (4) any liability of Seller to Purchaser under this Agreement shall be net of any insurance
proceeds and any indemnity, contribution or other similar payment actually received by Purchaser
from any insurance company (or other third party in settlement of a claim relating thereto).

(ii) If, prior to the Closing, Purchaser alleges that Seller was in breach of one or more of
Seller’s representations or warranties set forth in Section 13(a) of this Agreement, either
when initially made or when re-made (or to be re-made) at Closing (individually or collectively, as
applicable, a “Breach”) Purchaser may assert its claim therefor (a “Claim”) by
delivering to Seller a Claim Notice promptly after Purchaser has learned of such Breach, which
Claim Notice shall set forth (1) a description in reasonable detail of the claimed Breach
accompanied by reasonable back-up documentation supporting the Claim, (2) the section and
subsection of this Agreement under which the Claim is asserted, and (3) Purchaser’s reasonable
calculation of the actual damages suffered by

 

50

 

Purchaser or that Purchaser reasonably anticipates that it will suffer or the diminution in the value of the Property directly
resulting from such Breach (the “Claimed Damage”). As used in this Agreement, the term
“Material Adverse Effect” means that Purchaser’s Claimed Damage, in each case, is in an
amount equal to or greater than the Threshold Amount. The rights and remedies of Purchaser and
Seller in respect of any Claim asserted prior to the Closing shall, without limiting the foregoing,
be as hereinbelow provided:

A. If, prior to the Closing, there occurs or exists a Breach of which Purchaser has obtained
knowledge which does not have a Material Adverse Effect and Purchaser has delivered a Claim Notice
to Seller with respect to such Breach prior to the Closing, then Purchaser must proceed to the
Closing with no remedy therefor other than an adjustment not to exceed the Pre-Closing Claim Amount
(in the aggregate for all matters under this Agreement to which the Pre-Closing Claim Amount is
applicable), the amount of which adjustment may be subject to Dispute, and Seller shall have no
other liability therefor. If, prior to the Closing, there occurs or exists a Breach of which
Purchaser has obtained knowledge and Purchaser fails to deliver a Claim Notice to Seller prior to
the Closing, then Purchaser shall be deemed to have waived such Breach and shall not be entitled to
make any Claim with respect thereto. If, prior to the Closing, Purchaser shall deliver a Claim
Notice to Seller asserting a Claim which would have a Material Adverse Effect (a “Material
Claim”, and such Claim Notice a “Material Claim Notice”), Seller shall notify Purchaser
in writing within ten (10) Business Days of receipt of the Material Claim Notice as to whether
Seller intends to cure the Material Claim (“Seller’s Cure Notice”) by crediting the
Purchase Price in the amount of the Claimed Damage (the “Material Claim Credit”), subject
to Seller’s right to dispute the same as hereinafter provided. If Seller fails to deliver Seller’s
Cure Notice within ten (10) Business Days as aforesaid, Purchaser may send a second notice to
Seller, which notice shall state in capitalized, type of at least 12 points in size on the top of
the first page: “THIS NOTICE IS BEING DELIVERED PURSUANT TO SECTION 21(c)(ii)(A) OF THAT
CERTAIN PURCHASE AND SALE AGREEMENT WITH [DIAMONDROCK NY LEX OWNER, LLC]. IF YOU FAIL TO DELIVER
SELLER’S CURE NOTICE TO PURCHASER WITHIN THREE (3) BUSINESS DAYS OF YOUR RECEIPT OF THIS NOTICE,
THEN SUCH FAILURE SHALL BE DEEMED AN ELECTION BY SELLER NOT TO CURE THE MATERIAL CLAIM.” If Seller
thereafter fails to deliver Seller’s Cure Notice to Purchaser within said three (3) Business Day
period, then such failure to deliver Seller’s Cure Notice shall be deemed an election by Seller not
to cure the Material Claim. If Seller elects (or is deemed to elect) not to cure the Material
Claim, then Purchaser shall notify Seller in writing that it elects, as its sole and exclusive
remedy, to either (x) proceed to close title to the Property with no adjustment of the Purchase
Price (other than an adjustment not to exceed the Pre-Closing Claim Amount (in the aggregate for
all matters under this Agreement to which the Pre-Closing Claim Amount is applicable), which amount
of adjustment may be subject to Dispute) or (y) terminate this Agreement and receive a full refund
of the Deposit (together with all interest accrued thereon).

 

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B. If, prior to the Closing, Purchaser delivers a Material Claim Notice and Seller maintains
that either (1) no Breach has occurred or exists, (2) the asserted Breach is not a Material Claim
and/or (3) the amount of the Claimed Damage exceeds the loss, cost and expense to Purchaser
directly resulting from such Breach (each, a “Dispute”), then Seller may Dispute such
Material Claim Notice by delivering written notice to Purchaser in the manner herein provided (a
“Seller Notice of Dispute”). A Seller Notice of Dispute shall be given
on or prior to the earlier of (i) ten (10) Business Days following Seller’s delivery of
Seller’s Cure Notice and (ii) the Closing. If Seller fails to timely deliver a Seller Notice of
Dispute, then the parties shall proceed with the Closing as described in Section
21(c)(ii)(A) and the Purchase Price shall be reduced by the Material Claim Credit. If Seller
timely delivers a Seller Notice of Dispute, then Seller shall deposit with Escrow Agent at the
Closing an amount equal to the Material Claim Credit (the “Escrow Funds”), to be held in
escrow pending a resolution of the Dispute by the Arbiter in accordance with the terms set forth in
an escrow agreement to be entered into by the parties at the Closing, which agreement shall be in
substantially the form attached hereto as Exhibit 10 and made a part hereof (the
“Escrow Agreement”), until the earlier to occur of (1) written agreement of Seller and
Purchaser with respect to the disposition of the Escrow Funds, or (2) a resolution of the Dispute
made by the Arbiter pursuant to Section 21(c)(ii)(C) below. Seller may direct that a
portion of the Purchase Price to be paid at Closing be paid to Escrow Agent to serve as the Escrow
Funds. Provided Seller has deposited the Escrow Funds with Escrow Agent pending resolution of the
Dispute as hereinabove provided, Purchaser shall be required to close the transactions contemplated
by this Agreement without adjustment of the Purchase Price on account of the Breach in Dispute.

C. The Dispute as set forth in a Seller Notice of Dispute shall be resolved by the arbitration
procedure set forth below.

D. The parties shall attempt in good faith to agree upon an individual acceptable to each
party to act as arbiter (the “Arbiter”) of the Dispute. If, after expiration of twenty (20)
days following Seller’s delivery of a Seller Notice of Dispute, the parties are unable to agree
upon the selection of the Arbiter, either party may request that the President of the Real Estate
Board of New York select a retired jurist or other individual having substantial experience in
dispute resolution of commercial real estate matters (who is impartial and has no existing or
historical personal or professional relationship with Seller, Purchaser or their respective
Affiliates) to act as Arbiter. Within ten (10) days after selection of an Arbiter, Arbiter shall be
asked to determine whether a Breach has occurred or exists pursuant to the terms of this Agreement.
The Arbiter shall be bound by the provisions of this Agreement and shall not have the power to add
to, subtract from or otherwise modify such provisions, and the Arbiter shall consider only the
specific issues submitted to it for resolution under this Section 21(c)(ii). In connection
with said determination, Seller and Purchaser shall simultaneously deliver to the Arbiter all
instruments, documents and other materials forming the basis for the existence or non-existence of
a Breach. If the Arbiter determines that a Breach has occurred or exists, then both Seller and
Purchaser shall, within ten (10) Business Days after said determination that a Breach has occurred
or exists, each submit in writing to Arbiter the amount, if any, of actual damages that such party
reasonably believes Purchaser has suffered or will suffer, and/or the amount by which the total
value of the Property has been diminished by reason of the Breach claimed by Purchaser (each of the
estimated amounts of said damage as determined by Seller and Purchaser as aforesaid, the
“Estimated Claimed Damages”), which for the avoidance of doubt, may be equal to, greater
than or less than the amount of the Material Breach Credit initially asserted by Purchaser. Within
three (3) Business Days of receipt of the submission of said Estimated Claimed Damages from both
Seller and Purchaser, Arbiter shall simultaneously deliver a copy of the Seller’s Estimated Claimed
Damages to Purchaser and Purchaser’s Estimated Claimed Damages to Seller. Within twenty (20) days
of receipt of the submission of said Estimated Claimed Damages from both Seller and Purchaser, the
Arbiter shall select

 

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which of Seller’s or Purchaser’s Estimated Claimed Damages most closely reflects the actual damages
that Purchaser has suffered or will suffer, if any, or the actual diminution, if any, in the value
of the Property directly resulting from the alleged Material Claim (but such Arbiter shall not
select any other sum, i.e., the arbitration shall be “baseball” style arbitration). If based on the
selection of the Arbiter it is determined that there did not occur a Material Claim (as the case
may be), the Escrow Funds shall be paid to Seller in accordance with the Escrow Agreement (less, if
applicable, any portion below the Threshold Amount which Purchaser would be entitled to as a
Purchase Price adjustment under the first and last sentences of Section 21(c)(ii)(A)
above). If based on the selection of the Arbiter it is determined that a Material Claim exists,
then (i) if the Arbiter selected Purchaser’s Estimated Claim Damages, the Escrow Funds shall be
paid to Purchaser in accordance with the Escrow Agreement, and (ii) if the Arbiter selected
Seller’s Estimated Claim Damages, a portion of the Escrow Funds in the amount of Seller’s Estimated
Claim Damages shall be paid to Purchaser and the balance of the Escrow Funds shall be paid to
Seller, in each case in accordance with the Escrow Agreement. The determination of the Arbiter
hereunder shall be final and binding in all respects against all parties to this Agreement. The
costs and expenses of arbitration hereunder (including the fees and disbursements of the Arbiter)
shall be paid by the party whose calculation of the Estimated Claim Damages shall not have been
selected. Notwithstanding the foregoing, if interim payments are required to be made on account of
such costs prior to the determination by the Arbiter, such interim payments shall be funded equally
by Seller and Purchaser, subject to reimbursement of the prevailing party by the losing party upon
the Arbiter’s final determination hereunder.

E. Notwithstanding anything to the contrary contained in this Agreement, from and after the
date of Closing, with respect to any asserted Claims, (x) Seller shall have no liability to
Purchaser if Purchaser has received a credit against the Purchase Price or there is pending a
Dispute in respect of which there have been deposited Escrow Funds pursuant to Section
21(c)(ii)(A), Section 21(c)(ii)(B) and Section 21(c)(ii)(C) above on account of
such asserted Breach and (y) the aggregate liability of Seller arising by reason of or in
connection with all such alleged Breaches, whether asserted prior to or after the Closing, shall
not in any event exceed the Maximum Liability Amount, it being understood and agreed that the
Maximum Liability Amount in connection with all Breaches shall be reduced by (1) any damages
awarded by the Arbiter pursuant to Section 21(c)(ii)(C) above, plus (2) the aggregate
amount of credits against the Purchase Price granted by Seller at Closing in connection with a
Material Claim which is not the subject of a Dispute.

(d) In the event either party hereto is required to employ an attorney because any litigation
arises out of this Agreement between the parties hereto, the non-prevailing party shall pay the
prevailing party all actual and reasonable out-of-pocket fees and expenses, including attorneys’
fees and expenses, incurred in connection with such litigation.

(e) The provisions of this Section 21 shall survive the termination hereof.

22. MISCELLANEOUS.

(a) This Agreement may be executed in multiple counterparts, each of which shall be deemed an
original and together constitute one and the same instrument. To facilitate execution of this
Agreement, the parties may exchange signatory counterparts by telephone,
facsimile, electronic mail (e-mail) including, but not limited to, electronic attachments in
‘pdf’ or ‘tif’ formats containing counterparts of this signature page, and all of which shall be
effective as original signature pages for all purposes.

 

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(b) Any consent or approval to be given hereunder (whether by Seller or Purchaser) shall not
be effective unless the same shall be given in advance of the taking of the action for which
consent or approval is requested and shall be in writing. Except as otherwise expressly provided
herein, any consent or approval requested of Seller or Purchaser may be withheld by Seller or
Purchaser in its sole and absolute discretion.

(c) The following provisions govern any actions for indemnity under this Agreement. Promptly
after receipt by an indemnitee of notice of any claim, such indemnitee will, if a claim in respect
thereof is to be made against the indemnitor, deliver to the indemnitor written notice thereof (an
“Indemnitor Notice”) and the indemnitor shall have the right to participate in and, if the
indemnitor agrees in writing that it will be responsible for any costs, expenses, judgments,
damages, and losses incurred by the indemnitee with respect to such claim, to assume the defense
thereof, with counsel mutually satisfactory to the parties; provided, however, that an indemnitee
shall have the right to retain its own counsel, with the fees and expenses to be paid by the
indemnitee, if the indemnitee reasonably believes that representation of such indemnitee by the
counsel retained by the indemnitor would be inappropriate due to actual or potential differing
interests between such indemnitee and any other party represented by such counsel in such
proceeding. The failure of indemnitee to deliver an Indemnitor Notice to the indemnitor within a
reasonable time after indemnitee receives notice of any such claim shall relieve such indemnitor of
any liability to the indemnitee under this indemnity if and to the extent that such failure is
prejudicial to its ability to defend such action, and the omission so to deliver written notice to
the indemnitor will not relieve it of any liability that it may have to any indemnitee other than
under this indemnity. If an indemnitee settles a claim without the prior written consent of the
indemnitor, then the indemnitor shall be released from liability with respect to such claim unless
the indemnitor has unreasonably withheld such consent.

(d) Escrow Agent is hereby designated the “real estate reporting person” for purposes of
Section 6045 of Title 26 of the United States Code and Treasury Regulation 1.6045-4 and any
instructions or settlement statement prepared by Escrow Agent shall so provide. Upon the
consummation of the transaction contemplated by this Agreement, Escrow Agent shall file Form 1099
information return and send the statement to Seller as required under the aforementioned statute
and regulation. Seller and Purchaser shall promptly furnish their federal tax identification
numbers to Escrow Agent and shall otherwise reasonably cooperate with Escrow Agent in connection
with Escrow Agent’s duties as real estate reporting person.

(e) The delivery of the Deed by Seller, and the acceptance thereof by Purchaser shall be
deemed to be the full performance and discharge of every covenant and obligation on the part of
Seller to be performed under this Agreement except for those covenants or obligations that are
expressly provided in this Agreement to survive or to apply following the Closing.

(f) This Agreement contains all of the terms agreed upon between Seller and Purchaser with
respect to the subject matter hereof, and all prior agreements, understandings,
representations and statements, oral or written, between Seller and Purchaser are merged into
this Agreement.

 

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(g) This Agreement may not be amended, modified or terminated, except by an instrument
executed by Seller and Purchaser.

(h) No waiver by either party of any failure or refusal by the other party to comply with its
obligations shall be deemed a waiver of any other or subsequent failure or refusal to so comply.
Either party may waive any of the terms and conditions of this Agreement made for its benefit
provided such waiver is in writing and signed by the party waiving such term or condition.

(i) If any term or provision of this Agreement or the application thereof to any person or
circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Agreement, or
the application of such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of
this Agreement shall be valid and shall be enforced to the fullest extent permitted by law.

(j) The headings of the various sections of this Agreement have been inserted only for the
purposes of convenience and are not part of this Agreement and shall not be deemed in any manner to
modify, explain, expand or restrict any of the provisions of this Agreement.

(k) This Agreement shall be governed by the laws of the State of New York without giving
effect to conflict of laws principles thereof.

(l) This Agreement and the various rights and obligations arising hereunder shall inure to the
benefit of and be binding upon Seller and Purchaser and their respective successors and assigns
(subject, in the case of Purchaser, to clause (m) below), provided,
however, that none of the representations or warranties made by Seller hereunder shall
inure to the benefit of any person or entity that may succeed to Purchaser’s interest in the
Property or this Agreement after the Closing Date.

(m) Purchaser shall not directly or indirectly assign or otherwise transfer this Agreement or
any of its rights or obligations hereunder or any of the direct or indirect ownership interests in
Purchaser, without first obtaining Seller’s prior written consent thereto, which may be withheld in
Seller’s absolute discretion; provided, however, that Purchaser may assign this Agreement, without
Seller’s consent, to an Affiliate of DiamondRock Hospitality Company and/or DiamondRock Hospitality
Limited Partnership; provided, that (A) such transaction and assignment of this Agreement
is for a valid business purpose and not to circumvent the provisions of this Section 23(m)
and (B) such Affiliate is not a Prohibited Person at the time of any such assignment. Purchaser
shall provide written notice to Seller of any assignment of its interest in the Agreement no later
than five (5) Business Days after the consummation of the transaction in question, but Purchaser
shall remain liable following any such assignment for all obligations of “Purchaser” hereunder. Any
such assignment(s) shall be conditioned upon (1) Purchaser delivering to Seller an executed
original of the assignment and assumption agreement wherein said Affiliate assumes all of the
obligations of the Purchaser named herein and proof
reasonably satisfactory to Seller that said Affiliate is in fact an Affiliate, and (2)
Purchaser cooperating with Seller. The direct or indirect transfer of shares in Purchaser or in any
entity owning a direct or indirect interest in Purchaser shall be permitted without Seller’s
written consent thereto; provided, that in each such direct or indirect transfer of shares
is accomplished through the public “over-the-counter” securities market or through any recognized
stock exchange.

 

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(n) Neither this Agreement nor any memorandum hereof may be recorded without first obtaining
Seller’s prior written consent thereto which may be withheld in Seller’s sole discretion.

(o) This Agreement is an agreement solely for the benefit of Seller and Purchaser (and their
permitted successors and/or assigns). No other person, party or entity shall have any rights
hereunder nor shall any other person, party or entity be entitled to rely upon the terms, covenants
and provisions contained herein.

(p) The parties hereto agree to submit to personal jurisdiction in the State of New York in
any action or proceeding arising out of this Agreement and, in furtherance of such agreement, the
parties hereby agree and consent that without limiting other methods of obtaining jurisdiction,
personal jurisdiction over the parties in any such action or proceeding may be obtained within or
without the jurisdiction of any court located in New York and that any process or notice of motion
or other application to any such court in connection with any such action or proceeding may be
served upon the parties by registered or certified mail to or by personal service at the last known
address of the parties, whether such address be within or without the jurisdiction of any such
court. Any legal suit, action or other proceeding by one party to this Agreement against the other
arising out of or relating to this Agreement (other than any dispute which, pursuant to the express
terms of this Agreement, is to be determined by arbitration) shall be instituted only in the
Supreme Court of the State of New York, County of New York or the United States District Court for
the Southern District of New York, and each party hereby waives any objections which it may now or
hereafter have based on venue and/or forum non-conveniens of any such suit, action or proceeding
and submits to the jurisdiction of such courts.

(q) SELLER AND PURCHASER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, SUIT OR COUNTERCLAIM ARISING IN CONNECTION WITH, OUT OF OR OTHERWISE
RELATING TO THIS AGREEMENT.

(r) Seller and Purchaser each agree to take such further steps, and deliver such further
documents, as are reasonably necessary in order to implement the transactions contemplated hereby,
including the execution and delivery of supplemental escrow instructions to the extent reasonably
requested by the Escrow Agent. Notwithstanding the foregoing, neither party shall have any
obligations to take any such steps or execute or deliver any such further documents if the same
would be inconsistent in any material respect with the rights and obligations of the parties
contemplated by this Agreement.

 

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(s) Each party hereto hereby acknowledges and agrees that is has consulted legal counsel in
connection with the negotiation of this Agreement and that it has bargaining
power equal to that of the other parties hereto in connection with the negotiation and
execution of this Agreement. Accordingly, the parties hereto agree the normal rule of construction
which is that any ambiguities are to be resolved against the drafting party, shall not be employed
in the interpretation of this Agreement or any exhibits, schedules or amendments hereto.

(t) Seller and Purchaser will do, execute, acknowledge and deliver all and every such further
acts, deeds, conveyances, assignments, notices, transfers and assurances as may be reasonably
required by the other party for carrying out the intentions or facilitating the consummation of
this Agreement.

(u) Upon Closing, only those provisions of this Agreement that expressly by their terms
survive Closing or where the terms thereof are specifically applicable to obligations or
performance during the post-Closing period shall survive the delivery of the Deed and any other
document(s) to be delivered by the parties hereto at Closing, and all other provisions hereof shall
terminate.

(v) The parties hereto acknowledge and agree that, except as otherwise provided in this
Agreement, TIME IS OF THE ESSENCE for the performance of all actions (including, without
limitation, the giving of notices, the delivery of documents and the funding of money) required or
permitted to be taken by any party under this Agreement. Subject to Section 19 hereof,
whenever action must be taken (including, without limitation, the giving of notice or the delivery
of documents) by Purchaser or Seller under this Agreement, prior to the expiration of, by no later
than or on a particular date, such action must be completed by 5:00 p.m. (New York time) on such
date.

(w) In this Agreement, unless inconsistent with the context: (1) the singular includes the
plural and vice versa; (2) a gender includes each other gender; (3) a reference to any one of a
person, corporation, unincorporated body, trust, government body or other entity includes any other
of them; (4) reference to legislation or a provision of any legislation includes modifications or
re-enactments of the legislation, or any legislative provision substituted for, and all legislation
and statutory instruments and regulations issued under the legislation; (5) a reference to a party
which is a company includes a related body corporate of that company; (6) a different grammatical
form of a defined term has a corresponding meaning to the term; (7) a reference to this Agreement
includes its schedules, exhibits and all variations and amendments properly made from time to time;
(8) where a party consists of more than one person: (i) the liability imposed on such persons as
comprise that party to any other party is to be borne jointly and severally; and (ii) the benefit
conferred on such persons as comprise that party as against any other party is to be enjoyed
jointly and severally; and (9) where a provision: (i) imposes a liability on more than one party,
it binds such parties jointly and severally; and (ii) confers a benefit on more than one party, it
is to be enjoyed by such parties jointly and severally.

(x) The provisions of this Section 22 shall survive the Closing or the termination
hereof.

 

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23. ESTOPPELS.

Promptly following the Effective Date, Seller shall request and use its reasonable efforts to
obtain tenant estoppel certificates from each tenant under a Lease in the form required or
permitted under the terms of its Lease (or, if neither a form nor the contents of any estoppel is
specified therein, containing the date through which rent has been paid and the amount thereof and
an affirmation by the tenant that, to its knowledge, the Lease is in full force and effect, that no
event of default by Seller or the applicable tenant exists and no event exists which, with the
passage of time, the giving of notice, or both, would constitute an event of default thereunder (or
indentifying any such defaults or events, if applicable) and certifying as to the applicable Lease
documents) (each such estoppel, an “Estoppel Certificate”), dated as of a date not more
than sixty (60) days prior to the Closing Date; provided, that (a) the failure or inability
of Seller to obtain any such Estoppel Certificates shall not in any way affect Purchaser’s
obligations under this Agreement and obtaining any such Estoppel Certificate is not a condition to
Closing, and (b) Seller shall not be required to expend any money, provide any financial
accommodations or commence any litigation in connection with obtaining any such Estoppel
Certificates.

24. PROPERTY CONVEYED “AS IS” AND DISCLAIMER OF REPRESENTATIONS AND WARRANTIES.

Except as otherwise expressly provided in this Agreement:

(a) Seller has not made and does not make any warranty or representation regarding the truth,
accuracy, content, completeness, or suitability for any purpose, of the Confidential Information or
the source(s) thereof. Seller has not undertaken any independent investigation as to truth,
accuracy, content, completeness, or suitability for any purpose, of the Confidential Information,
and Purchaser shall not have any recourse against any Seller Related Parties in the event of any
errors therein or omissions therefrom.

(b) PURCHASER HEREBY ACKNOWLEDGES THAT, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,
NEITHER SELLER NOR ANY OTHER SELLER RELATED PARTIES, NOR ANY OTHER PERSON ACTING ON BEHALF OF
SELLER, NOR ANY PERSON OR ENTITY WHICH PREPARED OR PROVIDED ANY OF THE MATERIALS REVIEWED BY
PURCHASER IN CONDUCTING ITS DUE DILIGENCE (INCLUDING, WITHOUT LIMITATION, ANY CONFIDENTIAL
INFORMATION), NOR ANY SUCCESSOR OR ASSIGN OF ANY OF THE FOREGOING PARTIES, HAS MADE OR SHALL BE
DEEMED TO HAVE MADE ANY ORAL OR WRITTEN REPRESENTATIONS OR WARRANTIES, WHETHER EXPRESS OR IMPLIED,
BY OPERATION OF LAW OR OTHERWISE (INCLUDING, WITHOUT LIMITATION, WARRANTIES OF HABITABILITY,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE), WITH RESPECT TO THE PROPERTY, THE PERMITTED
USE OF THE PROPERTY OR THE ZONING AND OTHER LAWS, REGULATIONS AND RULES APPLICABLE THERETO OR THE
COMPLIANCE BY THE PROPERTY THEREWITH, THE REVENUES AND EXPENSES GENERATED BY OR ASSOCIATED WITH THE
PROPERTY, OR OTHERWISE RELATING TO THE PROPERTY OR THE TRANSACTIONS CONTEMPLATED HEREIN. PURCHASER
FURTHER ACKNOWLEDGES THAT ALL

 

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MATERIALS WHICH HAVE BEEN PROVIDED BY ANY OF THE SELLER RELATED PARTIES HAVE BEEN PROVIDED WITHOUT ANY WARRANTY OR REPRESENTATION, EXPRESSED OR IMPLIED AS TO
THEIR CONTENT, SUITABILITY FOR ANY PURPOSE, ACCURACY, TRUTHFULNESS OR COMPLETENESS AND PURCHASER
SHALL NOT HAVE ANY RECOURSE AGAINST ANY SELLER RELATED PARTIES IN THE EVENT OF ANY ERRORS THEREIN
OR OMISSIONS THEREFROM. PURCHASER REPRESENTS THAT IT IS A KNOWLEDGEABLE, EXPERIENCED AND
SOPHISTICATED PURCHASER OF REAL ESTATE, AND THAT IT IS RELYING SOLELY ON ITS OWN EXPERTISE AND THAT
OF PURCHASER’S CONSULTANTS IN PURCHASING THE PROPERTY. PURCHASER IS ACQUIRING THE PROPERTY BASED
SOLELY ON ITS OWN INDEPENDENT INVESTIGATION AND INSPECTION OF THE PROPERTY AND THE FRANCHISE
AGREEMENT, AND NOT IN RELIANCE ON ANY INFORMATION OR MATERIALS PROVIDED BY ANY SELLER RELATED
PARTIES, EXCEPT FOR THE REPRESENTATIONS EXPRESSLY SET FORTH HEREIN. PURCHASER EXPRESSLY DISCLAIMS
ANY INTENT TO RELY ON ANY SUCH MATERIALS PROVIDED TO IT BY ANY SELLER RELATED PARTIES IN CONNECTION
WITH ITS DUE DILIGENCE (INCLUDING, WITHOUT LIMITATION, ANY CONFIDENTIAL INFORMATION) AND AGREES
THAT IT SHALL RELY SOLELY ON ITS OWN INDEPENDENTLY DEVELOPED OR VERIFIED INFORMATION.

(c) Upon Closing, Purchaser shall assume the risk that adverse matters, including, but not
limited to, adverse physical and environmental conditions, may not have been revealed by
Purchaser’s inspections and investigations. Purchaser acknowledges and agrees that at Closing and
except as otherwise provided in this Agreement, (i) Seller shall sell and convey to Purchaser and
Purchaser shall accept the Property “AS IS, WHERE IS”, with all faults; and (ii) Purchaser shall be
deemed to have irrevocably and unconditionally waived, relinquished, released and discharged Seller
from any and all claims, demands, causes of action (including, without limitation, causes of action
sounding in tort), losses, damages, demands, obligations, liabilities, costs and expenses
(including attorneys’ fees and court costs) of any and every kind or character, whether at law or
in equity and whether known or unknown, which Purchaser asserted or alleged, or could have asserted
or alleged, or could assert or allege, at any time against Seller or any of its affiliates by
reason of or arising out of any latent or patent construction defects or physical conditions,
violations of Requirements (including, without limitation, zoning laws and Requirements relating to
Hazardous Substances) or the Franchise Agreement and any and all other acts, omissions, events,
circumstances or matters with respect to the Property, subject, however, to Purchaser’s rights and
remedies provided for in this Agreement in the event of the breach of any of Seller warranties or
representations contained herein or any provisions of this Agreement which are expressly provided
to survive Closing. Purchaser further acknowledges and agrees that there are no oral agreements,
warranties or representations, collateral to or affecting the Property by Seller. Seller is not
liable or bound in any manner by any oral or written statements, representations, or information
pertaining to the Property furnished by any real estate broker, agent, employee, servant or other
person, unless the same are specifically set forth or referred to herein. Purchaser has fully
reviewed the disclaimers and waivers set forth in this Agreement with its counsel and understands
the significance and effect thereof.

 

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(d) Purchaser acknowledges and agrees that the Purchase Price has been negotiated to take into
account that the Property is being sold pursuant to the provisions of this
Section 24 and that Seller would have charged a higher purchase price if the
provisions of this Section 24 were not agreed upon by Purchaser.

(e) Purchaser hereby acknowledges and agrees that its obligations under this Agreement shall
not be subject to any financing contingency or other contingencies or satisfaction of conditions,
except as expressly provided in Section 11 hereof, and Purchaser shall have no right to
terminate this Agreement or receive a return of the Deposit (including any interest accrued
thereon) except as expressly provided for in this Agreement.

(f) The provisions of this Section 24 shall survive the Closing or any termination of
this Agreement.

25. EXCULPATION.

(a) In no event shall any officer, director, limited partner, member, shareholder, agent or
employee of Purchaser or Seller or its respective partners be personally liable for any of the
obligations of Purchaser or Seller, respectively, under this Agreement or otherwise.

(b) Subject in all events to Section 21(c), Purchaser agrees to look solely to Seller
and Seller’s interest in the Property or, if the Closing has occurred, the net proceeds of the sale
for the satisfaction of any liability or obligation arising under this Agreement or the
transactions contemplated hereby, or for the performance of any of the covenants, warranties or
other agreements contained herein, and further agrees not to sue or otherwise seek to enforce any
personal obligation against any of Seller’s other assets or properties or any other Seller Related
Parties (or their assets or properties) with respect to any matters arising out of or in connection
with this Agreement or the transactions contemplated hereby.

(c) The provisions of this Section 25 shall survive the Closing or any termination of
this Agreement.

26. FRANCHISE AGREEMENT.

(a) Purchaser acknowledges and agrees that (i) the Hotel is subject to that certain Amended
and Restated License Agreement, effective as of February 1, 2002, as amended by that certain First
Amendment to Amended and Restated License Agreement, dated as of April 1, 2005, and as further
amended by that certain Second Amendment to Amended and Restated License Agreement, dated and
effective as of March 31, 2010 (as amended, the “Franchise Agreement”) by and between
Seller and Radisson Hotels International, Inc., a Delaware corporation (“Franchisor”), (ii)
with respect to the sale of the Property and the assignment of the Franchise Agreement, Purchaser
and Seller are required to abide by the terms of the Franchise Agreement, including without
limitation, Section 11 of that agreement which governs transfers of the Hotel, (iii) Purchaser has
advised Seller that Purchaser desires to continue to operate the Premises under the Radisson Hotel
brand as a “System Hotel” (as defined in the Franchise Agreement), and (iv) notwithstanding the
preceding clause (iii), Franchisor’s approval of Purchaser as a licensee and/or the operation of
the Hotel under the Franchise Agreement or replacement license is not a condition to Purchaser’s
obligations under this Agreement, including, without limitation, the obligation to purchase the
Property.

 

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(b) Promptly after the Effective Date, Seller and Purchaser shall each notify Franchisor of
the transaction contemplated by this Agreement and Purchaser shall submit an application on the
form prescribed by Franchisor pursuant to the Franchise Agreement. Following receipt by Franchisor
of such notice, Purchaser shall diligently take all commercially reasonable actions and promptly
provide all information and documentation reasonably requested by Franchisor, and otherwise
diligently pursue the consent of Franchisor to (i) the sale of the Property to Purchaser, and (ii)
the approval of Purchaser as successor to Seller as owner of the Hotel. It is desired that, at
Closing, Purchaser and Franchisor shall enter into a written agreement pursuant to which Purchaser
shall assume the obligations of “Licensee” (as defined in the Franchise Agreement) under the
Franchise Agreement, with any modifications thereto as may be reasonably acceptable to Purchaser
(the “New License”), and (B) Seller and Franchisor shall enter into an agreement whereby
Franchisor agrees that, at the Closing, Franchisor will terminate and release Seller from its
obligations under the Franchise Agreement and any other documents executed in connection therewith
to the extent accruing from and after Closing without payment of any penalty or termination amount
(Franchisor’s agreement to enter into a New License with Purchaser and to terminate the Franchise
Agreement and to release Seller from all obligations accruing from and after Closing is referred to
herein collectively as the “Radisson Consent”), it being acknowledged and agreed that the
Radisson Consent executed and delivered in substantially the form of Exhibit 16 attached
hereto shall be deemed acceptable to each of Seller and Purchaser. Purchaser shall bear all costs
and expenses of Purchaser and Franchisor in connection with the attempted transfer of the Hotel to
Purchaser under the Franchise Agreement, the Radisson Consent and the potential New License in
favor of Purchaser including, without limitation, all application fees and costs, franchise fees
and the reimbursement of Franchisor’s costs and expenses, provided that Purchaser shall have no
liability for any other fees, costs or expenses accrued or payable by Seller prior to Closing in
the ordinary course.

(c) In the event that at any time prior to Closing, either party receives written notice (the
“Denial Notice”) from Franchisor confirming that Franchisor will not approve the sale of
the Hotel to Purchaser or enter into the New License with Purchaser, such party will promptly
notify the other. In the event Franchisor issues a Denial Notice or the New License or the
Radisson Consent shall not be obtained by the Scheduled Closing Date, (i) this Agreement shall
remain in full force and effect without adjustment to the Purchase Price, and (ii) Seller shall
terminate the Franchise Agreement and Purchaser shall (1) acquire the Hotel at Closing without the
benefits or burdens of the Franchise Agreement, and (2) pay all termination fees due in connection
with the termination (the “Termination Amounts”).

(d) Seller agrees to cooperate in all reasonable respects with Purchaser in Purchaser’s
efforts to obtain the Radisson Consent and the New License. Seller further agrees that, so long as
(i) Purchaser proceeds diligently and in good faith in its efforts to enter into a New License, and
(ii) Franchisor has confirmed in writing its willingness to approve Purchaser as a franchisee for
the Hotel under terms consistent with this Agreement, then if Franchisor will not be able to enter
into the New License for the Hotel until after the Closing, Seller will not terminate the Franchise
Agreement until the effective date of the New License in order to permit the Hotel to continue to
be operated as a “Radisson Hotel” during the period between the Closing Date and the date Purchaser
and Franchisor enter into the New License (the “Interim Period”); provided,
however, that (A) Seller shall not be required to extend the

 

61

 

termination date of the Franchise
Agreement for the Hotel beyond the date which is twenty (20) days following the Closing Date, and (B) in the event that Purchaser is unable to obtain or enter into a New
License prior to expiration of the Interim Period, Seller may elect in its sole discretion to
terminate the Franchise Agreement effective at any time following expiration of the Interim Period
and Purchaser shall be liable for all Termination Amounts (and if any such amounts are paid by
Seller, Purchaser shall reimburse Seller for the Termination Amounts paid within 10 days following
Seller’s written request). At Closing, Seller shall deliver to Purchaser a copy of Seller’s
voluntary termination agreement with Franchisor or other evidence reasonably acceptable to
Purchaser evidencing that, subject to the provisions of this Section 26(d), the Franchise
Agreement shall not be terminated until the end of the Interim Period. In consideration of Seller’s
agreement not to terminate the Franchise Agreement during the Interim Period, Purchaser shall
indemnify Seller from and against any and all claims, losses, liabilities, costs and expenses
(including without limitation reasonable attorneys’ fees) incurred by Seller and arising and
accruing under the Franchise Agreement during the Interim Period (“Indemnified Claims”),
other than any such Indemnified Claims that are the result of the gross negligence or willful
misconduct of Seller, its agents, representatives or employees. The foregoing indemnity shall be
memorialized in indemnification agreement in the form attached hereto as Exhibit 12 (the
“Franchise Indemnity Agreement”) to be entered into by Purchaser and Seller at Closing.

27. PRESS RELEASES.

(a) Prior to the Closing Date, Purchaser and Seller shall confer and agree on a press release
to be issued jointly by Purchaser and Seller disclosing the transaction and the appropriate time
for making such release. Neither Purchaser nor Seller shall issue any other press releases (or
other public statements) with respect to the transaction contemplated in this Agreement without
approval of the other party except (i) as may be required by law or a court, (ii) pursuant to or in
connection with any filings with the Securities and Exchange Commission or by any rules or
regulations of any public stock exchange or stock quotation system, that may be applicable to
Purchaser or Seller or any of their direct or indirect constituent owners or Affiliates, or (iii)
as may be necessary or appropriate to disclose, in such party’s judgment, in connection with a
proposed equity offering to be made by Seller or Purchaser or their respective Affiliates, provided
that in any such event, prior notice thereof is furnished to the other party; provided,
however, that (A) any such approval shall not be unreasonably withheld or delayed and (B) except
with respect to any press releases (or other public statements) issued in accordance with
sub-clauses (i), (ii) and (iii) above, in no event shall any press release
(or other public statements) with respect to this transaction indicate the Purchase Price (or any
of the other terms hereof) or, at the request of either party, the identity of said party.

(b) The provisions of this Section 27 above shall survive the termination of this
Agreement and the Closing.

28. ASSIGNMENT OF MORTGAGE.

If requested by Purchaser, Seller shall use commercially reasonable efforts to cause its
current mortgage lender (the “Existing Mortgage Lender”) to assign (the “Mortgage
Assignment”) to Purchaser’s lending institution, at Closing, the lien of the Existing Mortgage
Lender’s mortgage (the “Existing Mortgage”). Notwithstanding the foregoing, (a) Seller
shall not be obligated to pay any fee or cost to the Existing Mortgage Lender, incur any expense in
respect
of the Mortgage Assignment or the recording thereof or incur any liability in connection
therewith, and (b) the failure of Purchaser to obtain the Mortgage Assignment shall not be deemed a
default or a failure of a condition to Closing and shall in no way alter Purchaser’s obligations
hereunder to acquire the Property for the full Purchase Price. In the event that the Existing
Mortgage Lender consents to the Mortgage Assignment, Purchaser shall pay to Seller at Closing, in
addition to the Purchase Price, an amount equal to one-half of the mortgage recording tax savings
available to Purchaser as a result of such Mortgage Assignment.

 

62

 

29. TAX CONSIDERATIONS.

(a) Section 1031 Transaction. (i) Notwithstanding anything to the contrary contained
in this Agreement, Seller and Purchaser each have the right to consummate the transactions
contemplated by this Agreement in a manner that qualifies as a tax-deferred exchange, in whole or
in part, under the provisions of Section 1031 of the Internal Revenue Code, the Treasury
Regulations thereunder, and IRS Revenue Procedure 2000-37 (a “1031 Transaction”). The party
seeking to effect a 1031 Transaction is referred to in this Section 1.7 as the “Exchanging
Party.”

(ii) The other party shall cooperate with the Exchanging Party with respect to any 1031
Transaction, including executing any and all documents reasonably requested in connection
therewith. The Exchanging Party herby agrees to pay or cause to be paid, and indemnify and hold
harmless the non-Exchanging Party from and against, any and all liability, claim, action, damage,
cost and expense (including reasonable attorneys’ fees), fine or penalty related to, arising out of
or in connection with the non-Exchanging Party’s cooperation in effectuating any 1031 transaction
requested by the Exchanging Party. All agreements and other documents necessary for an Exchanging
Party to effect its 1031 Transaction shall be prepared at the expense of the Exchanging Party, by
the Exchanging Party’s counsel. Each party acknowledges that the other party shall not be deemed
the other’s agent.

(iii) Without limiting the foregoing, an Exchanging Party shall have the right to assign or
transfer all or any portion of its rights under this Agreement to a qualified intermediary, an
exchange accommodation title holder or one or more single member limited liability companies that
are owned by any of the foregoing persons in accordance with the provisions of Section 1031 of the
Internal Revenue Code, the Treasury Regulations thereunder, and IRS Revenue Procedure 2000-37. No
such assignment or transfer of rights under this Agreement shall effect a release of the Exchanging
Party from its obligations under this Agreement or impose any additional obligation or liability
except to a de minimus extent on the non-Exchanging Party.

 

63

 

(iv) The terms and provisions of this Section 29(a) shall survive the Closing.

(b) If Seller requests, Purchaser shall consider structuring the transaction as a contribution
of the Property to Purchaser’s operating partnership in exchange either for units in Purchaser’s
operating partnership (the “Units”) or shares in Diamond Rock Hospitality Company (NYSE
Symbol DRH) (the “Shares”). Purchaser shall not be obligated to structure the transaction
in such a manner and the decision as to whether to do so, as well as the amount, if
any, of Units or Shares to be transferred to Seller as consideration for the Property, shall
be at Purchaser’s sole discretion. If Purchaser agrees to so structure the transaction as an
exchange, in whole or in part, for Units or Shares, Purchaser and Seller will work together in good
faith to negotiate standard tax protection provisions for Seller with respect to the Property and
the documentation effectuating such structuring should be mutually agreeable to the parties, each
acting reasonably.

[Signature Page Immediately Follows]

 

64

 

IN WITNESS WHEREOF, Seller has caused this Agreement to be executed the day and year first
above written.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	SELLER:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	LEXINGTON HOTEL, LLC, a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Lexington Hotel (Holdings), LLC, a Delaware limited liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Lex Intermediate Mezz, LLC, a Delaware limited liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	Lex Intermediate Mezz
(Holdings), LLC, a Delaware limited liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	By:	 	Lex Sub Mezz (Holdings), LLC, a Delaware limited	 	 
	 	 	 	 	 	 	 	 	 	 	liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	By:	 	WH/LEX, LLC, a Delaware limited	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	liability company, its managing member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 

Name:
	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	By:	 	MERISTAR LEXINGTON PARTNERS, LLC, a	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	Delaware limited liability company, its managing member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 

Name:
	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	Title:	 	 

[Signature Page Continues]

[Signature Page to the Purchase and Sale Agreement]

 

 

 

IN WITNESS WHEREOF, Purchaser has caused this Agreement to be executed the day and year first
above written.

	 	 	 	 	 	 	 	 	 
	 	 	PURCHASER:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	DIAMONDROCK NY LEX OWNER, LLC, a Delaware	 	 
	 	 	limited liability company	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	William Tennis	 	 
	 

	 	 	 	Title:
	 	Director	 	 

[Signature Page Continues]

[Signature Page to the Purchase and Sale Agreement]

 

 

 

By its signature below, the undersigned hereby acknowledges and consents
to the provisions of Sections 4(g), 16(a) and 21(a)(ii) of this Agreement:

Principal:

DIAMONDROCK HOSPITALITY LIMITED PARTNERSHIP,

a Delaware limited partnership

	 	 	 	 	 	 	 	 	 
	By:	 	DiamondRock Hospitality Company, its sole	 	 
	 	 	general partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	William Tennis	 	 
	 

	 	 	 	Title:
	 	Executive Vice President	 	 

[Signature Page to the Purchase and Sale Agreement]

 

 

 

By its signature below, the undersigned hereby acknowledges, agrees and consents
to the provisions of Sections 3(a), 5, 18(a)(ix), 21(c)(ii),
22(a), 22(d), 22(i), 22(j), 22(k), 22(p),
22(s), 22(u), 22(v), 22(w), and 22(x) of this Agreement:

Escrow Agent:

Commonwealth Land Title Insurance Company

	 	 	 
	 

Name:

	 	 
	Title:
	 	 

[Signature Page to the Purchase and Sale Agreement]

 

 

 

SCHEDULE A

Definitions

1. “1031 Transaction” shall have the meaning given to such term in Section 29(a)
hereof.

2. “AAA” shall mean the American Arbitration Association or its successor.

3. “Acceptable Purchaser Insurance Company” shall mean an insurer reasonably
acceptable to Seller; provided, however, that any of the foregoing insurers must be
an insurer of recognized responsibility that is qualified to do business in New York, rated by A.M.
Best, or any successor publication of comparable standing, as A- VIII or better or the then
equivalent of such rating.

4. “Additional Rent” shall have the meaning given to such term in Section 8(d) hereof.

5. “Affiliate” shall mean, as to any designated person or entity, any other person or
entity which controls, is controlled by, or is under common control with, such designated person or
entity. The term “controls” (and with correlative meaning, “controlled by” and
“under common control with”) means ownership or voting control, directly or indirectly, of
fifty (50%) percent or more of the voting stock, partnership interests or other beneficial
ownership interests of the entity in question, along with the power and authority to manage the
business and affairs of the entity in question.

6. “Agreement” shall have the meaning given to such term in Preamble hereof.

7. “Agreement Confidential Information” shall have the meaning given to such term in
Section 4(g) hereof.

8. “Apportionment Date” shall have the meaning given to such term in Section 8(a)
hereof.

9. “Arbiter” shall have the meaning given to such term in Section 21(c) hereof.

10. “Bad Faith Filing” shall have the meaning given to such term in Section 21(a)
hereof.

11. “Bargaining Unit Employees” shall have the meaning given to such term in Section
9(a) hereof.

12. “Base Rents” shall have the meaning given to such term in Section 8(d) hereof.

13. “Bookings” shall have the meaning given to such term in Section 2(a) hereof.

14. “Breach” shall have the meaning given to such term in Section 21(c) hereof.

 

Schedule A-1

 

15. “Breach Notice” shall have the meaning given to such term in Section 13(f) hereof.

16. “Broker” shall have the meaning given to such term in Section 16(a) hereof.

17. “Building” shall mean the meaning given to such term in the Recitals hereof.

18. “Business Day” shall mean a day other than Saturday, Sunday or any days on which
commercial banks in New York, New York are authorized or obligated to close. In the event any
period would begin or expire, or any action is required to be taken by any party hereunder, on a
day that is not a Business Day, such period will be deemed to commence or expire or the action will
not be required to be taken, as the case may be, until the next Business Day.

19. “Casualty Election Date” shall have the meaning given to such term in Section
14(e) hereof.

20. “CERCLA” shall mean the Comprehensive Environmental Response, Compensation and
Liability Act (codified in scattered sections of 26 U.S.C., 33 U.S.C., 42 U.S.C. and 42 U.S.C.
Section 9601 et seq.).

21. “Claim” shall have the meaning given to such term in Section 21(a) hereof.

22. “Claim Notice” shall have the meaning given to such term in Section 13(g) hereof.

23. “Claimed Damage” shall have the meaning given to such term in Section 21(c)
hereof.

24. “Closing” shall have the meaning given to such term in Section 19 hereof.

25. “Closing Date” shall have the meaning given to such term in Section 19 hereof.

26. “Co-Insurers” shall have the meaning given to such term in Section 7(a) hereof.

27. “Collective Bargaining Agreement” shall have the meaning given to such term in
Section 9(f) hereof.

28. “Commitment” shall have the meaning given to such term in Section 7(a) hereof.

29. “Conference Revenues” shall have the meaning given to such term in Section 8(f)
hereof.

30. “Confidential Information” shall have the meaning given to such term in Section
4(g) hereof.

31. “Consequential Damages” shall mean any incidental, consequential, indirect,
punitive, speculative, special or exemplary damages, or for lost profits, unrealized expectations
or other similar claims.

 

Schedule A-2

 

32. “Consumable Inventory” shall have the meaning given to such term in Section 2(a)
hereof.

33. “Contracts” has the meaning given to such term in Section 2(a) hereof.

34. “Contribution Period” shall have the meaning given to such term in Section 9(h)
hereof.

35. “Cut-Off Time” shall have the meaning given to such term in Section 8(a) hereof.

36. “Deed” shall have the meaning given to such term in Section 18(a) hereof.

37. “Denial Notice” shall have the meaning given to such term in Section 26(c) hereof.

38. “Deposit” shall have the meaning given to such term in Section 3(a) hereof.

39. “Diligence Confidential Information” shall have the meaning given to such term in
Section 4(e) hereof.

40. “Displaced Building Service Workers Act” shall have the meaning given to such term
in Section 9(b) hereof.

41. “Dispute” shall have the meaning given to such term in Section 21(c) hereof.

42. “Effective Date” shall have the meaning given to such term in the Preamble hereof.

43. “Employment Laws” shall have the meaning given to such term in Section 9(i)
hereof.

44. “Environmental Laws” shall mean any federal, state or local statute, regulation or
ordinance or rule of common law or any judicial, administrative or arbitral decree or decision,
whether now existing or hereinafter enacted, promulgated or issued, in any way relating to the
protection of the environment, including, inter alia, any hazardous materials, petroleum or any
fraction thereof, drinking water, groundwater, wetlands, landfills, open dumps, outdoor air
quality, indoor air quality, microbial matter, mycotoxins, storage tanks, underground storage
tanks, solid waste, waste water, storm water runoff, waste emissions or wells. Without limiting the
generality of the foregoing, the term shall encompass each of the following statutes, and
regulations, order, decrees, permits, licenses and deed restrictions now or hereafter promulgated
thereunder, and amendments and successors to such statutes and regulations as may be enacted and
promulgated from time to time: (i) CERCLA; (ii) RCRA; (iii) the Hazardous Materials Transportation
Act (49 U.S.C. Section 1801 et seq.); (iv) the Toxic Substances Control Act (15 U.S.C. Section 2061
et seq.); (v) the Clean Water Act (33 U.S.C. Section 1251 et seq.); (vi) the Clean Air Act (42
U.S.C. Section 7401 et seq.); (vii) the Safe Drinking Water Act (21 U.S.C. Section 349, 42 U.S.C.
Section 201 and Section 300f et seq.); (viii) the National Environmental Policy Act (42 U.S.C.
Section 4321 et seq.); (ix) the Superfund Amendments and Reauthorization Act of 1986 (codified in
scattered sections of 10 U.S.C., 29 U.S.C., 33 U.S.C.
and 42 U.S.C.); (x) Title III of the Superfund Amendment and Reauthorization Act (40 U.S.C.
Section 1101 et seq.); (xi) the Uranium Mill Tailings Radiation Control Act (42 U.S.C. Section 7901
et seq.); (xii) the Occupational Safety & Health Act (29 U.S.C. Section 651 et seq.); (xiii) the
Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. Section 136 et seq.); (xiv) the Noise
Control Act (42 U.S.C. Section 4901 et seq.); (xv) the Emergency Planning and Community Right to
Know Act (42 U.S.C. Section 1100 et seq.); and (xvi) the Oil Pollution Act of 1990 (33 U.S.C. 2701
et seq.), and (xvii) any analogous present or future state or local statutes or laws.

 

Schedule A-3

 

45. “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended.

46. “Escrow Agent” shall have the meaning given to such term in Section 3(a) hereof.

47. “Escrow Agreement” shall have the meaning given to such term in Section 21(c)
hereof.

48. “Escrow Holdback Agreement” shall have the meaning given to such term in Section
18(a) hereof.

49. “Escrow Bank” shall have the meaning given to such term in Section 5(a) hereof.

50. “Escrow Funds” shall have the meaning given to such term in Section 21(c) hereof.

51. “Escrow Instructions” shall have the meaning given to such term in Section 3(a)
hereof.

52. “Estimated Claimed Damages” shall have the meaning given to such term in Section
21(c) hereof.

53. “Estoppel Certificate” shall have the meaning given to such term in Section 23
hereof.

54. “Exchanging Party” shall have the meaning given to such term in Section 29(a)
hereof.

55. “Executive Order” shall have the meaning given to such term in Section 13(a)
hereof.

56. “Existing Liquor License” shall have the meaning given to such term in Section
10(d) hereof.

57. “Existing Management Agreement” shall have the meaning given to such term in
Section 10(c) hereof.

58. “Existing Manager” shall have the meaning given to such term in Section 10(c)
hereof.

 

Schedule A-4

 

59. “Existing Mortgage” shall have the meaning given to such term in Section 28
hereof.

60. “Existing Mortgage Lender” shall have the meaning given to such term in Section 28
hereof.

61. “Existing Survey” shall have the meaning given to such term in Section 6(b)
hereof.

62. “Excluded Personalty” shall have the meaning given to such term in Section 2(b)
hereof.

63. “Federal WARN Act” shall have the meaning given to such term in Section 9(b)
hereof.

64. “Final Closing Statement” shall have the meaning given to such term in Section
8(m) hereof.

65. “Franchise Agreement” shall have the meaning given to such term in Section 26(a)
hereof.

66. “Franchise Indemnity Agreement” shall have the meaning given to such term in
Section 26(d) hereof.

67. “Franchisor” shall have the meaning given to such term in Section 26(a) hereof.

68. “Government List” means any of (a) the two lists maintained by the United States
Department of Commerce (Denied Persons and Entities), (b) the list maintained by the United States
Department of Treasury (Specially Designated Nationals and Blocked Persons), and (c) the two lists
maintained by the United States Department of State (Terrorist Organizations and Debarred Parties).

69. “Guest Revenues” shall have the meaning given to such term in Section 8(f) hereof.

70. “Hazardous Substances” shall mean any hazardous, toxic or dangerous waste,
substance or material, pollutant or contaminant, as defined for purposes of the CERCLA, or the
RCRA, or any other federal, state or local law, ordinance, rule or regulation applicable to the
Premises, or any substance which is toxic, explosive, corrosive, flammable, infectious,
radioactive, carcinogenic, mutagenic or otherwise hazardous, or any substance which contains
gasoline, diesel fuel or other petroleum hydrocarbons, polychlorinated biphenyls (PCBs), radon gas,
urea formaldehyde, asbestos, lead, or electromagnetic waves.

71. “Holdback Escrow” shall have the meaning given to such term in Section 18(a)
hereof.

72. “Holdback Period” shall have the meaning given to such term in Section 18(a)
hereof.

 

Schedule A-5

 

73. “Hotel” shall have the meaning given to such term in the Recitals hereof.

74. “Hotel Employees” shall have the meaning given to such term in Section 9(a)
hereof.

75. “Hotel Payables” shall have the meaning given to such term in Section 8(g) hereof.

76. “House Bank Funds” shall have the meaning given to such term in Section 2(a)
hereof.

77. “Indemnified Claims” shall have the meaning given to such term in Section 26(d)
hereof.

78. “Indemnitor Notice” shall have the meaning given to such term in Section 23(c)
hereof.

79. “Intangibles” shall have the meaning given to such term in Section 2(a) hereof.

80. “Interference Damages” shall have the meaning given to such term in Section 21(a)
hereof.

81. “Interim Period” shall have the meaning given to such term in Section 26(d)
hereof.

82. “Land” shall have the meaning given to such term in the Recitals hereof.

83. “Leases” shall have the meaning given to such term in Section 2(a) hereof.

84. “Limitation Period” shall have the meaning given to such term in Section 13(f)
hereof.

85. “Manager” shall have the meaning given to such term in Section 10(c) hereof.

86. “Material Adverse Effect” shall have the meaning given to such term in Section
21(c) hereof.

87. “Material Claim” shall have the meaning given to such term in Section 21(c)
hereof.

88. “Material Claim Credit” shall have the meaning given to such term in Section 21(c)
hereof.

89. “Material Claim Notice” shall have the meaning given to such term in Section 21(c)
hereof.

90. “Maximum Liability Amount” shall have the meaning given to such term in Section
21(c) hereof.

 

Schedule A-6

 

91. “Monetary Lien” shall have the meaning given to such term in Section 7(a) hereof.

92. “Mortgage Assignment” shall have the meaning given to such term in Section 28
hereof.

93. “Mortgages” shall have the meaning given to such term in Section 7(a) hereof.

94. “New License” shall have the meaning given to such term in Section 26(b) hereof.

95. “New Title Objections” shall have the meaning given to such term in Section 7(a)
hereof.

96. “New York WARN Act” shall have the meaning given to such term in Section 9(b)
hereof.

97. “Non-Objectionable Encumbrances” shall have the meaning given to such term in
Section 7(a) hereof.

98. “Non-Union Employees” shall have the meaning given to such term in Section 9(b)
hereof.

99. “Notice” and “Notices” shall have the meaning given to such term in
Section 20(a) hereof.

100. “NYSLA” shall have the meaning given to such term in Section 10(d) hereof.

101. “Omitted Exceptions” shall have the meaning given to such term in Section 7(a)
hereof.

102. “Overage Rent” shall have the meaning given to such term in Section 8(d) hereof.

103. “Permitted Encumbrances” shall have the meaning given to such term in Section 6
hereof.

104. “Person” means an individual, partnership, corporation, limited liability
company, trust or other entity.

105. “Personalty” shall have the meaning given to such term in Section 2 hereof.

106. “Preliminary Closing Statement” shall have the meaning given to such term in
Section 8(m) hereof.

107. “Premises” shall have the meaning given to such term in the Recitals hereof.

108. “Pre-Closing Claim Amount” shall mean an aggregate amount of Three Hundred
Seventy-Five Thousand and 00/100 Dollars ($375,000.00).

 

Schedule A-7

 

109. “Principal” shall mean DiamondRock Hospitality Limited Partnership, a Delaware
limited partnership and its successors or assigns.

110. “Prohibited Person” shall mean any Person (including any Person directly or
indirectly controlling, controlled by or under common control with a Person) which: (i) has been
convicted of, or plead guilty to, a felony, (ii) entitled to sovereign immunity, (iii) is involved
(or has been involved within the preceding five (5) years) in a material litigation adverse to
Purchaser or Seller (as the case may be) or an Affiliate of Purchaser or Seller (as the case may
be), (iv) within the preceding five (5) years, has filed a petition under any insolvency statute,
made a general assignment for the benefit of its creditors, commenced a proceeding for the
appointment of a receiver, trustee, liquidator or conservator, filed a petition seeking
reorganization or liquidation or similar relief under any applicable law or statute, or has been
subject to any of foregoing, or (v) cannot truthfully and accurately make for itself the same
representations made by Seller in Section 13(a)(vii) and Section 13(a)(viii) of
this Agreement.

111. “Property” shall have the meaning given to such term in Section 2(a) hereof.

112. “Property Confidential Information” shall have the meaning given to such term in
Section 4(g) hereof.

113. “Property Information” shall have the meaning given to such term in Section 4(a)
hereof.

114. “Property Taxes” shall have the meaning given to such term in Section 8(a)
hereof.

115. “Purchase Price” shall have the meaning given to such term in Section 3(a)
hereof.

116. “Purchaser” shall have the meaning given to such term in the Preamble hereof.

117. “Purchaser Knowledge Party” shall have the meaning given to such term in Section
13(d) hereof.

118. “Purchaser Related Parties” shall have the meaning given to such term in Section
9(j) hereof.

119. “Purchaser’s Election Notice” shall have the meaning given to such term in
Section 7(a) hereof.

120. “Purchaser’s Objection Notice” shall have the meaning given to such term in
Section 7(a) hereof.

121. “Purchaser’s Principals” shall have the meaning given to such term in Section
13(e) hereof.

122. “Purchaser’s Representatives” shall have the meaning given to such term in
Section 4(a) hereof.

 

Schedule A-8

 

123. “Radisson Consent” shall have the meaning given to such term in Section 26(b)
hereof.

124. “RCRA” shall mean the Resource Conservation and Recovery Act (42 U.S.C. Section
6901 et seq.).

125. “Receivables” shall have the meaning given to such term in Section 2(a) hereof.

126. “Related Entities” shall have the meaning given to such term in Section 13(e)
hereof.

127. “Rents” shall have the meaning given to such term in Section 8(a) hereof.

128. “Replacement Management Agreement” shall have the meaning given to such term in
Section 10(c) hereof.

129. “Requirements” means (i) all applicable laws, ordinances, rules, regulations
(including, without limitation, the Americans With Disabilities Act of 1990, as amended, the
Resource Conservation and Recovery Act and CERCLA) and permits of governmental and other
appropriate authorities having jurisdiction over the Premises, (ii) all insurance requirements,
(iii) all Permitted Encumbrances and (iv) all requirements of the Franchisor pursuant to the
Franchise Agreement.

130. “Retail Inventory” shall have the meaning given to such term in Section 2(a)
hereof.

131. “Retained Receivables” shall have the meaning given to such term in Section 8(f)
hereof.

132. “Retirement Plan” shall have the meaning given to such term in Section 9(h)
hereof.

133. “Scheduled Closing Date” shall have the meaning given to such term in Section 19
hereof.

134. “Seller” shall have the meaning given to such term in the Preamble hereof.

135. “Seller Disputed Payable” shall have the meaning given to such term in Section
8(g) hereof.

136. “Seller Knowledge Party” shall have the meaning given to such term in Section
13(b) hereof.

137. “Seller Notice of Dispute” shall have the meaning given to such term in Section
21(c) hereof.

138. “Seller Related Party” and “Seller Related Parties” shall have the
meaning given to such term in Section 4(h) hereof.

 

Schedule A-9

 

139. “Seller’s Cure Notice” shall have the meaning given to such term in Section 21(c)
hereof.

140. “Seller’s Response Notice” shall have the meaning given to such term in Section
7(a) hereof.

141. “Settlement Period” shall have the meaning given to such term in Section 13(g)
hereof.

142. “Shares” shall have the meaning given to such term in Section 29(b).

143. “Taking” shall have the meaning given to such term in Section 15(a) hereof.

144. “Tax Certiorari Proceeding” shall have the meaning given to such term in Section
8(b) hereof.

145. “Tenant Arrearages” shall have the meaning given to such term in Section 13(a)
hereof.

146. “Tenant Lien” shall have the meaning given to such term in Section 7(a) hereof.

147. “Termination Amounts” shall have the meaning given to such term in Section 26(c)
hereof.

148. “Threshold Amount” shall have the meaning given to such term in Section 21(c)
hereof.

149. “Title Company” shall have the meaning given to such term in Section 7(a) hereof.

150. “Title Cure Notice” shall have the meaning given to such term in Section 7(a)
hereof.

151. “Title Objection” shall have the meaning given to such term in Section 7(a)
hereof.

152. “Transfer Tax Laws” shall have the meaning given to such term in Section 17(a)
hereof.

153. “Transfer Taxes” shall have the meaning given to such term in Section 17(a)
hereof.

154. “TRS” shall have the meaning given to such term in Section 8(p) hereof.

155. “Union” shall have the meaning given to such term in Section 9(f) hereof.

156. “Union Employee Benefit Funds” shall have the meaning given to such term in
Section 9(g) hereof.

 

Schedule A-10

 

157. “Units” shall have the meaning given to such term in Section 29(b) hereof.

158. “Unopened Inventory” shall have the meaning given to such term in Section 2(a)
hereof.

159. “Update Notice” shall have the meaning given to such term in Section 7(a) hereof.

160. “Utilities” shall have the meaning given to such term in Section 8(c) hereof.

161. “Violations” shall have the meaning given to such term in Section 6(f) hereof.

[No further text on this page.]

 

Schedule A-11

 

SCHEDULE B

Legal Description of the Land

ALL that certain plot, piece or parcel of land, situate, lying and being in the Borough of
Manhattan, County of New York, City and State of New York, bounded and described as follows:

BEGINNING at the corner formed by the intersection of the southerly side of East 48th Street with
the easterly side of Lexington Avenue;

RUNNING THENCE easterly along the southerly side of East 48th Street, 174 feet 6 inches;

THENCE southerly parallel with Lexington Avenue, 100 feet 5 inches to the center line of the block;

THENCE westerly along said center line of the block, 174 feet 6 inches to the easterly side of
Lexington Avenue; and

THENCE northerly along the easterly side of Lexington Avenue, 100 feet 5 inches to the point or
place of BEGINNING.

 

Schedule B-1

 

SCHEDULE C-1

Contracts

Union Agreements

Lexington Hotel & NY Hotel and Motel Trades Council, AFL-CIO — 02/16/2005

Latin Quarter & NY Hotel and Motel Trades Council, AFL-CIO — 03/05/2004

Alma Grill & NY Hotel and Motel Trades Council, AFL-CIO — 05/30/2007

Yetang Corp. & NY Hotel and Motel Trades Council, AFL-CIO — 06/29/2006

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	MAINTENANCE CONTRACTS	 	 	 	 	 	 	 	 	 
	VENDOR	 	PURPOSE	 	FREQUENCY	 	AMOUNT	 	 	DUE DATE	 	TERM
	10 BEST
	 	Web-Extra services	 	A	 	 	1,500.00	 	 	07/31/2011	 	Year to Year Renewal
	AAA
	 	Lodging Program-License Fee	 	A	 	 	1,640.00	 	 	04/30/2011	 	Awaiting 2011-12 Contract/Invoice
	AFA PROTECTIVE SYSTEMS
	 	FireAlarm & Backup System	 	A	 	 	2,395.08	 	 	04/30/2011	 	Year to Year Renewal
	ASSA ABLOY HOSPITALITY CORP.
	 	Guests door lock maintenance	 	A	 	 	1,306.50	 	 	 	 	 
	CORSICA TECHNOLOGIES
	 	Printer maintenance	 	Q	 	 	2,014.19	 	 	03/01/2012	 	 
	CROSS FIRE SECURITY
	 	Fire alarm system maintenance	 	Bi-Annual	 	 	3,063.21	 	 	05/01/2011	 	Year to Year Renewal
	DREW INDUSTRIAL /(ASHLAND)
	 	Cooling Tower/Domestic Water/Chiller Treatment	 	Q	 	 	4,106.00	 	 	 	 	Year to Year Renewal-Jun30
	HOMISCO
	 	Phone Call Accounting	 	A	 	 	2,400.00	 	 	02/28/2011	 	Year to Year Renewal
	LEC CONSULTING & INSP (LANELE)
	 	Elevator Consultant	 	M	 	 	816.57	 	 	 	 	 
	MBM BUSINESS SYSTEMS, INC.
	 	Copier maintenance	 	A	 	 	2,133.95	 	 	04/19/2012	 	Year to Year Renewal
	MICROS RETAIL SYSTEMS
	 	Micros C.C.Terminal Maintenance(Bar/Dynasty/Raffels)	 	A	 	 	3,715.03	 	 	12/31/2012	 	Year to Year Renewal
	MICROS RETAIL SYSTEMS
	 	Merchant Linl- Credit Card Help-Bar	 	A	 	 	433.50	 	 	01/01/2011	 	 
	MICROS SYSTEMS INC
	 	License & Support fee for Opera	 	Q	 	 	9,399.20	 	 	 	 	 
	NEOPOST USA INC.
	 	Postage meter maintenance & meter rental	 	A	 	 	688.08	 	 	01/16/2012	 	 
	NEW MARKET INT’L-DELPHI
	 	Delphi & OX Annual Maintenance	 	A	 	 	7,812.25	 	 	12/31/2011	 	 
	OTIS ELEVATOR
	 	Elevator Maintenance	 	Q	 	 	6,097.00	 	 	 	 	 
	REMCO MAINTENANCE
	 	Metal maintenance in lobby	 	M	 	 	1,573.42	 	 	 	 	 
	THE TRANE COMPANY
	 	HVAC Maint. - Chillar (Labour) Aircon	 	Q	 	 	6,097.00	 	 	 	 	 
	THYSSENKRUPP ELEVATOR (MAINCO)
	 	Elevator Maintenance - Service	 	Q	 	 	7,602.57	 	 	 	 	Year to Year Renewal
	VERSATECH
	 	PBX and telecommunication maintenance	 	Q	 	 	5,035.47	 	 	 	 	Year to Year Renewal

 

Schedule C-1-1

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	OTHERS-REGULAR & FIXED	 	 	 	 	 	 	 
	 	 	PAYMENTS	 	 	 	 	 	 	 
	VENDOR	 	PURPOSE	 	FREQUENCY	 	AMOUNT	 	 	TERM
	ELAVON, INC.
	 	Credit card gateway service (processing)	 	A	 	 	849.23	 	 	03/31/2012
	HOTEL REV UP
	 	Per Room Key Charge	 	M	 	$	2,848.00	 	 	 
	HOTWIRE
	 	Travel Ticker Ads	 	A	 	 	7,999.55	 	 	12/31/2011
	HRSMART (c/o Corp. office)
	 	Applicant tracking system, subscription fees	 	Bi-Annual	 	 	2,252.03	 	 	11/30/2011
	PRINTERON
	 	Online Guest Printing with 2 Printers	 	A	 	 	595.00	 	 	12/10/2011
	RADISSON HOTEL WORLWIDE
	 	Franchise/Marketing/Reservation and other fees	 	M	 	Varies	 	 	 
	RCN( RCN) A/C 6101-0234087-01
	 	Cable TV for Rooms	 	M	 	 	5,231.03	 	 	4 Yrs-Ending-10/22/2012
	XO COMMUNICATIONS
	 	T 1 Line-Guest Internet	 	M	 	 	3,042.75	 	 	2 Yrs Ending-12/31/2010
	YELP, INC. (c/o Corp. office)
	 	Directory ad listing	 	M	 	 	112.50	 	 	 
	Transbeam
	 	Hotel Internet	 	M	 	 	250.00	 	 	2 Yrs Ending-12/17/2011
	TIG
	 	Interactive Marketing Agreement	 	M	 	 	2167.00	 	 	1 Yrs Ending-4/30/2012
	Bookings.com
	 	T/A Commission	 	M	 	15% comm.	 	 	1 Year Ending-12/31/2011
	EZY Yield.com
	 	Web Site services	 	A	 	 	149.00	 	 	Renews yearly from 05/08 90 day cxl
	Flight Time TV LLC
	 	Flight Time TV in Business Center	 	A	 	 	1,075.00	 	 	1 year license 02/2012
	HIGHSPEED SYSTEMS
	 	Internet Access Mainteneance	 	M	 	 	1,995.00	 	 	12/31/2011
	Interior Foliage
	 	Floral Arrangement & Maint.	 	A	 	Varies	 	 	Renews yearly from 03/05 90 day cxl
	SWIFTRANK
	 	Cost per click advertising	 	M	 	 	84.00	 	 	08/31/11

Miscellaneous Revenue Generating Contracts

Hotelbeds — expires 03/31/12

Tourico — expires 03/31/12

 

Schedule C-1-2

 

SCHEDULE C-2

Equipment Leases

	 	 	 	 	 	 	 	 	 	 	 	 	 
	QUENCH MOBILITY
	 	Water coolers -HK	 	Q	 	 	150.25	 	 	Beginning of Qtr	 	36 Months
	QUENCH MOBILITY
	 	Water coolers -Acct.+PBX+Eng	 	Q	 	 	450.74	 	 	Beginning of Qtr	 	36 Months
	QUENCH MOBILITY
	 	Water coolers -FD+HK	 	Q	 	 	300.50	 	 	Beginning of Qtr	 	36 Months
	USPS
	 	P.O. Box Rental	 	A	 	 	1,090.00	 	 	03/31/2011	 	 

 

Schedule C-2-1

 

SCHEDULE D

Marked Title Commitment

(Follows immediately on the next page.)

 

Schedule D-1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SCHEDULE E-1

List of Leases

	 	 	 
	Tenant	 	Expiration Date
	 
	 	 
	Habana Room Restaurant
	 	10/31/2023
	Yetang Dynasty
	 	03/31/2015
	Raffles
	 	01/20/2013
	Starbucks
	 	11/30/2016
	Latin Quarter
	 	02/28/2022
	NYCS, LLC (Concierge)
	 	12/31/2014

 

Schedule E-1-1

 

EXHIBIT E-2

Tenant Arrearages

(see attached)

 

Schedule E-2-1

 

Radisson Lexington Hotel New York

A/R Tenants Aging

5/11/2011

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Account Name	 	Current	 	 	31-60	 	 	61-90	 	 	91-120	 	 	121 and Over	 	 	Total	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Habana Room Rent
	 	 	15,450.00	 	 	 	7,225.00	 	 	 	15,450.00	 	 	 	 	 	 	 	8,822.50	 	 	 	46,947.50	 
	Habana Room RE Tax
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 
	Habana Room Utilities
	 	 	2,200.00	 	 	 	2,200.00	 	 	 	3,309.35	 	 	 	3,642.77	 	 	 	1,200.00	 	 	 	12,552.12	 
	Habana Total:
	 	 	17,650.00	 	 	 	9,425.00	 	 	 	18,759.35	 	 	 	3,642.77	 	 	 	10,022.50	 	 	 	59,499.62	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	J Sung Dynasty Rent
	 	 	19,965.00	 	 	 	1,815.00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	21,780.00	 
	J Sung Dynasty RE Tax
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	4,663.17	 	 	 	—	 	 	 	4,663.17	 
	J Sung Dynasty Utilities
	 	 	3,750.72	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	3,750.72	 
	Dynasty Total:
	 	 	23,715.72	 	 	 	1,815.00	 	 	 	—	 	 	 	4,663.17	 	 	 	—	 	 	 	30,193.89	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Raffles Restaurant Rent
	 	 	38,665.06	 	 	 	38,668.33	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	77,333.39	 
	Raffles Restaurant RE Tax
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	27,588.63	 	 	 	24,734.50	 	 	 	52,323.13	 
	Raffles Restaurant Utilities
	 	 	500.00	 	 	 	500.00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1,000.00	 
	Raffles Total:
	 	 	39,165.06	 	 	 	39,168.33	 	 	 	—	 	 	 	27,588.63	 	 	 	24,734.50	 	 	 	130,656.52	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Starbucks Rent
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 
	Starbucks RE Tax
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	9,417.26	 	 	 	—	 	 	 	9,417.26	 
	Starbucks Utilities
	 	 	3,040.50	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	3,040.50	 
	Starbucks Total:
	 	 	3,040.50	 	 	 	—	 	 	 	—	 	 	 	9,417.26	 	 	 	—	 	 	 	12,457.76	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Latin Quarter Rent
	 	 	45,375.00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	45,375.00	 
	Latin Quarter RE Tax
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	50,579.13	 	 	 	68,237.20	 	 	 	118,816.33	 
	Latin Quarter Utilities
	 	 	10,804.21	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	10,804.21	 
	Latin Quarter Total:
	 	 	56,179.21	 	 	 	—	 	 	 	—	 	 	 	50,579.13	 	 	 	68,237.20	 	 	 	174,995.54	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Concierge Services Rent
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 
	Concierge Total:
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Grand Total
	 	 	139,750.49	 	 	 	50,408.33	 	 	 	18,759.35	 	 	 	95,890.96	 	 	 	102,994.20	 	 	 	407,803.33	 
	 
	 	 	34.27	%	 	 	12.36	%	 	 	4.60	%	 	 	23.51	%	 	 	25.26	%	 	 	100.00	%

 

 

SCHEDULE F

Pending Litigation

Worker’s Compensation

Micheline Augustine — Not Yet Litigated (slip and fall while cleaning)

General Liability 

	 	 	 
	Claimant Name	 	Index
	Vassell, Wayne
	 	19488
	Torres, Luis
	 	100174/07
	Grover, David
	 	115918/08
	Rodriguez, Ivelisse
	 	100174/07
	Mehta, Rungthip
	 	111624/08

	 	 	 
	*	 	All of the foregoing claims involve alleged injuries incurred at the Premises and are covered
under Seller’s general liability insurance policy.

Employee Grievances

Various employee grievances (7) which in all likelihood will be resolved in the normal course, but
in theory could turn into litigation. Issues ranging from back pay to vacation or scheduling
grievances.

Gonzalo Hernandez v. Habana Room Inc. and Lexington Hotel LLC, Case No. 11 CV 1264 southern
district of New York, class action employee litigation for failure to pay overtime

Tenant Litigation

Lexington Hotel LLC vs. Habana Room Inc., which is pending in the Civil Court of the City of New
York, County of New York, Index No. 11N055559. This case involves an attempt to terminate Habana’s
lease as a result of claimed violations of the lease involving failure to provide room service in a
first class manner, failure to operate the restaurant in a first class manner and failure to comply
with its union obligations. Habana Room Inc. has made a motion to dismiss the action, claiming
various technical defenses regarding service of the notice of default and the petition. That
motion is scheduled to be heard on May 16th.

 

Schedule F-1

 

SCHEDULE G

Excluded Personalty

Lexus 450L, 2010 model, Black, VIN JTHDL5EF1A5001423

 

Exhibit G-1

 

SCHEDULE H

Environmental Reports

Phase I Environmental Site Assessment: Radisson Lexington Hotel Prepared by Blackstone Consulting
LLC on 4/26/11

Asbestos Operations and maintenance Program prepare by Athenica Environmental Services dated
12/22/04

Phase I Environmental Site Assessment: Lexington Hotel Prepared by Clayton Group Services, Inc. on
5/20/04

Lead Based Pain Operations & Maintenance Plan prepared by PSI Environmental Geotechnical
Construction dated 7/29/99

28th & 29th Floors Asbestos Survey prepared by PSI Environmental Geotechnical
Construction dated 7/22/99

Asbestos Management Plan — V.2.1 dated 7/21/99

Phase I Environmental Site Assessment Update and Visual Limited Asbestos Survey Prepared by Law
Environmental Consultants, Inc. dated 6/16/99

Phase I Environmental Site Assessment Prepared by Law Environmental Consultants, Inc. dated 5/8/98

 

Exhibit H-1

 

EXHIBIT 1

BARGAIN AND SALE DEED

WITHOUT COVENANT AGAINST GRANTOR’S ACTS

THIS DEED (“Deed”), made the
 _____ 
day of May, 2011 by LEXINGTON HOTEL, LLC, a Delaware
limited liability company, having an address c/o Highgate Holdings, Inc., 870 Seventh Avenue, 2nd
Floor, New York, New York 10019 (“Grantor”) in favor of [                                        ], a
[                                        ], having an address c/o DiamondRock Hospitality Company, 3 Bethesda Metro
Center, Suite 1500, Bethesda, Maryland 20814 (“Grantee”).

WITNESSETH, that, in consideration of ten dollars ($10.00) and other valuable consideration
paid by Grantee, the receipt and sufficiency of which are hereby acknowledged, Grantor does hereby
grant and release unto Grantee, the heirs or successors and assigns of Grantee forever;

ALL that certain plot, piece or parcel of land with the building and improvements thereon
erected, situate, lying and being, more particularly described on Exhibit A attached hereto
and made a part hereof (the “Premises”);

TOGETHER with all right, title and interest, if any, of Grantor in and to any streets and
roads abutting the Premises to the center lines thereof;

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

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

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

Wherever in this instrument any party shall be designated or referred to by name or general
reference, such designation is intended to and shall have the same effect as if the words
“successors and assigns” had been inserted after each and every such designation.

[No further text on this page; the signature page follows.]

 

Exhibit 1-1

 

IN WITNESS WHEREOF, Grantor has caused this Deed to be executed by its duly authorized
representative on the day and year first above written.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	LEXINGTON HOTEL, LLC,
a Delaware limited liability company 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Lexington Hotel (Holdings), LLC, a Delaware
limited liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Lex Intermediate Mezz, LLC, a
Delaware limited liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	Lex Intermediate
Mezz (Holdings), LLC, a Delaware limited liability
company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	By:	 	Lex Sub Mezz (Holdings), LLC, a Delaware limited
liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	By:	 	WH/LEX, LLC, a Delaware limited
liability company, its managing member	 	 
	 
	 

	 	 	 	 	 	 	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 

Name:
	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	Title:	 	 

	 	 	 	 	 	 	 	 	 
	 	 	By:	 	MERISTAR LEXINGTON PARTNERS, LLC, a
Delaware limited liability company, its
managing member	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

Name:
	 	 
	 

	 	 	 	 	 	Title:	 	 

 

Exhibit 1-2

 

Uniform Certificate of Acknowledgment

(Within New York State)

	 	 	 	 	 	 	 
	STATE OF NEW YORK

	 	 	)	 	 	 
	 

	 	 	 	 	 	: ss.:
	COUNTY OF                     

	 	 	)	 	 	 

On this                      day of                     , in the year 201_____, before me, the undersigned, a Notary Public
in and for said State, personally appeared                                         , personally known to me or proved to
me on the basis of satisfactory evidence to be the                                          of           
                     
          and
acknowledged to me that he/she executed the same in his/her capacity, and that by his/her signature
on the instrument, the person, or the entity upon behalf of which the person acted, executed the
instrument.

	 	 	 
	 
	 	
Notary Public

Uniform Certificate of Acknowledgment

(Outside of the State of New York)

	 	 	 	 	 	 	 
	STATE OF                     

	 	 	)	 	 	 
	 

	 	 	 	 	 	: ss.:
	COUNTY OF                     

	 	 	)	 	 	 

On this                      day of                     , in the year 201_____, before me, the undersigned, a Notary Public
in and for said state, personally appeared                                         , personally known to me or
proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is (are)
subscribed to the within instrument and acknowledged to me that he/she/they executed the same in
his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument, and
that such individual made such appearance before the undersigned in the State of                     .

	 	 	 
	 
	 	Notary Public

 

Exhibit 1-3

 

	 	 	 	 	 	 	 
	Bargain and Sale Deed	 	PREMISES LOCATED ON:
	Without Covenant Against Grantor’s Acts
	 	 	 	 	 	 
	 

	 	SECTION:
	 	5	 	 
	 

	 	BLOCK:
	 	1302	 	 
	 

	 	LOTS:	 	51	 	 
	LEXINGTON HOTEL, LLC

	 	COUNTY:
	 	New York

	 
	 	 	 	 	 	 
	TO

[                    
                        
                        ]

	 	STREET 
ADDRESS:
	 	511 Lexington Avenue

New York, New York

	 
	 	 	 	 	 	 
	 

	 	RETURN BY MAIL TO:
	 
	 	 	 	 	 	 

 

Exhibit 1-4

 

Exhibit A to Bargain and Sale Deed

Legal Description of Land

ALL that certain plot, piece or parcel of land, situate, lying and being in the Borough of
Manhattan, County of New York, City and State of New York, bounded and described as follows:

BEGINNING at the corner formed by the intersection of the southerly side of East 48th Street with
the easterly side of Lexington Avenue;

RUNNING THENCE easterly along the southerly side of East 48th Street, 174 feet 6 inches;

THENCE southerly parallel with Lexington Avenue, 100 feet 5 inches to the center line of the block;

THENCE westerly along said center line of the block, 174 feet 6 inches to the easterly side of
Lexington Avenue; and

THENCE northerly along the easterly side of Lexington Avenue, 100 feet 5 inches to the point or
place of BEGINNING.

 

Exhibit 1-5

 

EXHIBIT 2

BILL OF SALE AND ASSIGNMENT

LEXINGTON HOTEL, LLC, a Delaware limited liability company, having an address c/o Highgate
Holdings, Inc., 870 Seventh Avenue, 2nd Floor, New York, New York 10019 (“Seller”), in
consideration of Ten Dollars ($10.00) and other good and valuable consideration paid to Seller by
[            
            
             
   ], a [      
             
            
         ], having an address c/o DiamondRock Hospitality
Company, 3 Bethesda Metro Center, Suite 1500, Bethesda, Maryland 20814 (“Purchaser”), the
receipt and sufficiency of which are hereby acknowledged, hereby sells, conveys, assigns,
transfers, delivers and sets over to Purchaser all Personalty other than the Excluded Personalty
(as both terms are defined in the Purchase Agreement) owned by Seller.

TO HAVE AND TO HOLD unto Purchaser and its successors and assigns to its and their own use and
benefit forever.

Reference is hereby made to that certain Purchase and Sale Agreement (the “Purchase
Agreement”), by and between Seller and Purchaser, dated May
 _____, 2011. Capitalized terms used
but not otherwise defined shall have the meanings ascribed to such terms in the Purchase Agreement.

Except as otherwise expressly provided for (and to the extent and duration provided for) in
the Purchase Agreement, Purchaser hereby acknowledges and agrees that the Personalty, Consumable
Inventory and all files and records in Seller’s possession or reasonable control and relating to
the Premises is being conveyed in “AS IS, WHERE IS, WITH ALL FAULTS”, and the provisions of Section
24 of the Purchase Agreement are incorporated herein by this reference.

Except as otherwise expressly provided for (and to the extent and duration provided for) in
the Purchase Agreement, this Bill of Sale and Assignment is made by Seller without recourse and
without any expressed or implied representation or warranty whatsoever.

This Bill of Sale and Assignment and the provisions herein contained shall be binding upon and
inure to the benefit of Purchaser and Seller and their respective successors and assigns.

This Bill of Sale and Assignment may be executed in several counterparts and all counterparts
so executed shall constitute one Bill of Sale and Assignment, binding on all parties hereto and
thereto, notwithstanding that all the parties are not signatories to the same counterpart.

[No further text on this page; the signature page follows.]

 

Exhibit 2-1

 

IN WITNESS WHEREOF, Seller has caused this Bill of Sale to be executed as of this
 _____ 
day of
May, 2011.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	LEXINGTON HOTEL, LLC, a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Lexington Hotel (Holdings), LLC, a Delaware
limited liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Lex Intermediate Mezz, LLC, a
Delaware limited liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	Lex Intermediate
Mezz (Holdings), LLC, a Delaware limited liability
company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	By:	 	Lex Sub Mezz (Holdings), LLC, a Delaware limited
liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	By:	 	WH/LEX, LLC, a Delaware limited
liability company, its managing member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 

Name:
	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	Title:	 	 

	 	 	 	 	 	 	 	 	 
	 	 	By:	 	MERISTAR LEXINGTON PARTNERS, LLC, a
Delaware limited liability company, its
managing member	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

Name:
	 	 
	 

	 	 	 	 	 	Title:	 	 

 

Exhibit 2-2

 

EXHIBIT 3

FIRPTA CERTIFICATE

Section 1445 of the Internal Revenue Code of 1986, as amended (the “Code”), provides
that a transferee of a U.S. real property interest must withhold tax if the transferor is a foreign
person. To inform the transferee, [                                        ], a [                                
        ]
(“Transferee”) that withholding of tax is not required upon the disposition of a U.S. real
property interest by LEXINGTON HOTEL, LLC, a Delaware limited liability company, having an address
c/o Highgate Holdings, Inc., 870 Seventh Avenue, 2nd Floor, New York, New York 10019
(“Transferor”), the undersigned hereby certifies the following to Transferee on behalf of
Transferor:

	1.	 	Transferor is not a foreign person, foreign corporation, foreign partnership, foreign trust,
or foreign estate (as those terms are defined in the Code and Treasury Regulations promulgated
thereunder);

	 
	2.	 	The U.S. employer identification number of Transferor is [                                        ];

	 
	3.	 	Transferor’s office address is c/o Highgate Holdings, Inc., 870 Seventh Avenue, 2nd Floor,
New York, New York 10019;

	 
	4.	 	Transferor is not a disregarded entity as defined in §1.1445-2(b)(2)(iii); and

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

(The remainder of this page is left intentionally blank.)

 

Exhibit 3-1

 

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

Dated as of May ___, 2011

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	LEXINGTON HOTEL, LLC, a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Lexington Hotel (Holdings), LLC, a Delaware
limited liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Lex Intermediate Mezz, LLC, a
Delaware limited liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	Lex Intermediate
Mezz (Holdings), LLC, a Delaware limited liability
company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	By:	 	Lex Sub Mezz (Holdings), LLC, a Delaware limited
liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	By:	 	WH/LEX, LLC, a Delaware limited
liability company, its managing member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 

Name:
	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	Title:	 	 

	 	 	 	 	 	 	 	 	 
	 	 	By:	 	MERISTAR LEXINGTON PARTNERS, LLC, a
Delaware limited liability company, its
managing member	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

Name:
	 	 
	 

	 	 	 	 	 	Title:	 	 

 

Exhibit 3-2

 

EXHIBIT 4

TITLE AFFIDAVIT

Commonwealth Land Title Insurance Company

COMMON EXCEPTIONS AFFIDAVIT

Title No.: NY110378

	Premises:	 	 The Radisson Lexington Hotel

511 Lexington Avenue, New York, NY

Block 1302 Lot 51

New York County

State of New York

County of New York

Lexington Hotel, LLC, a Delaware limited liability company (“Owner”), hereby certifies to
Commonwealth Land Title Insurance Company, as of the date hereof, as follows:

	1.	 	Owner is the fee owner of the above described premises (the “Premises”).

	 
	2.	 	That, to Owner’s knowledge, without inquiry or investigation, there has been no work done
upon the Premises by the City of New York nor has the City of New York made any demand made
for such work that may result in charges assessed by the Office of Rent and Housing
Maintenance, Emergency Repairs Division.

	 
	3.	 	That, to Owner’s knowledge, without inquiry or investigation, there have been no work
done upon the Premises by the City of New York, nor has the City of New York made any demand
for any such work that may result in charges assessed by the Department of Health.

	 
	4.	 	That, to Owner’s knowledge, without inquiry or investigation, there are no unpaid fees or
charges levied by the City of New York Department of Buildings for inspections,
reinspections, examinations, services or permits relating to the Premises.

	 
	5.	 	That there are no tenants or persons in possession of the Premises, except for those
tenants set forth on the rent roll attached hereto as Exhibit A, having rights as
tenants only, and hotel guests, and Owner has not granted any party any option to purchase
the Premises or right of first refusal to purchase the Premises either pursuant to written
leases or by separate agreements.

	 
	6.	 	This affidavit is being delivered to induce Commonwealth Land Title Insurance Company to
insure title to the aforesaid policy.

[Signature Page Immediately Follows]

 

Exhibit 4-1

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	LEXINGTON HOTEL, LLC, a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Lexington Hotel (Holdings), LLC, a Delaware
limited liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Lex Intermediate Mezz, LLC, a
Delaware limited liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	Lex Intermediate
Mezz (Holdings), LLC, a Delaware limited liability
company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	By:	 	Lex Sub Mezz (Holdings), LLC, a Delaware limited
liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	By:	 	WH/LEX, LLC, a Delaware limited
liability company, its managing member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 

Name:
	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	Title:	 	 

	 	 	 	 	 	 	 	 	 
	 	 	By:	 	MERISTAR LEXINGTON PARTNERS, LLC, a
Delaware limited liability company, its
managing member	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

Name:
	 	 
	 

	 	 	 	 	 	Title:	 	 

 

Exhibit 4-2

 

EXHIBIT A

Rent Roll

(see attached)

 

Exhibit 4-3

 

EXHIBIT 5

ERISA Letter

May  _____, 2011

	To:	 	 Lexington Hotel, LLC (“Seller”)

c/o Highgate Holdings, Inc.

870 Seventh Avenue, 2nd Floor

New York, New York 10019

	 
	Re:	 	 511 Lexington Avenue, New York, New York (Lot 51 in Block 1302 on
the Tax Map of the City of New York)

Ladies and Gentlemen:

The undersigned represents to you that [      
             
             
        ], a [   
               
             
         ] (“Purchaser”),
or any Affiliates thereof, or any firm, person or entity providing financing
for the purchase of the entire interest of Seller in the Property (as defined in the Purchase
Agreement) are not using the assets of an employee benefit plan as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and
covered under Title I, Part 4 of the ERISA or Section 4975 of the Internal Revenue
Code of 1986, as amended, in the performance or discharge of its obligations under that
certain Agreement of Purchase and Sale
Agreement, dated May  _____, 2011 (“Purchase Agreement”), with
respect to the Property by and
between Lexington Hotel, LLC, a Delaware limited liability company, as Seller, and the undersigned,
as Purchaser, including the acquisition of the Property. Capitalized terms used but not otherwise
defined shall have the meanings ascribed to such terms in the Purchase Agreement.

	 	 	 	 	 
	 	Very truly yours,

PURCHASER:

[                                        ],

a [                                        ],

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

Exhibit 5-1

 

EXHIBIT 6

ASSIGNMENT AND ASSUMPTION OF CONTRACTS

THIS ASSIGNMENT AND ASSUMPTION OF CONTRACTS (this “Assignment”), is made and entered
into this
 _____ 
day of May, 2011 by and between LEXINGTON HOTEL, LLC, a Delaware limited liability
company, having an address c/o Highgate Holdings, Inc., 870 Seventh Avenue, 2nd Floor, New York,
New York 10019 (“Assignor”), and [     
             
            
          ], a [ 
               
              
          ], having an
address c/o DiamondRock Hospitality Company, 3 Bethesda Metro Center, Suite 1500, Bethesda,
Maryland 20814 (“Assignee”).

WITNESSETH:

Reference is hereby made to that certain Purchase and Sale Agreement (the “Purchase
Agreement”), by and between Assignor and Assignee, dated May
 _____, 2011. Capitalized terms used
but not otherwise defined shall have the meanings ascribed to such terms in the Purchase Agreement.

Assignor hereby assigns to Assignee all of its right, title and interest in and to the
Contracts (as defined in the Purchase Agreement) which are listed on Schedule A attached
hereto.

Assignee hereby expressly assumes all of the obligations under the Contracts which accrue from
and after the date hereof.

Except as otherwise expressly provided for (and to the extent and duration provided for) in
the Purchase Agreement, this Assignment is made by Assignor without recourse and without any
expressed or implied representation or warranty whatsoever.

This Assignment shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.

Any inconsistency between the terms herein and the terms set forth in the Purchase Agreement
shall be resolved in favor of the terms of the Purchase Agreement.

This Assignment may be executed in any number of counterparts, each of which shall be deemed
to be an original and all of which shall constitute one and the same agreement.

[No further text on this page; the signature page follows.]

 

Exhibit 6-1

 

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

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	ASSIGNOR:

LEXINGTON HOTEL, LLC, a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Lexington Hotel (Holdings), LLC, a Delaware
limited liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Lex Intermediate Mezz, LLC, a
Delaware limited liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	Lex Intermediate
Mezz (Holdings), LLC, a Delaware limited liability
company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	By:	 	Lex Sub Mezz (Holdings), LLC, a Delaware limited
liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	By:	 	WH/LEX, LLC, a Delaware limited
liability company, its managing member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 

Name:
	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	Title:	 	 

	 	 	 	 	 	 	 	 	 
	 	 	By:	 	MERISTAR LEXINGTON PARTNERS, LLC, a
Delaware limited liability company, its
managing member	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

Name:
	 	 
	 

	 	 	 	 	 	Title:	 	 

 

Exhibit 6-2

 

	 	 	 	 	 
	ASSIGNEE:

[                                        ],

a [                                        ],	 	 
	 	 	 	 	 
	By:	 	 	 	 
	 	 	 

Name:
	 	 
	 	 	Title:	 	 

 

Exhibit 6-3

 

SCHEDULE A

Contracts

 

Exhibit 6-4

 

EXHIBIT 7

GENERAL ASSIGNMENT AND ASSUMPTION AGREEMENT

THIS GENERAL ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Assignment”), is made and
entered into this
 _____ 
day of May 2011 by and between LEXINGTON HOTEL, LLC, a Delaware limited
liability company, having an address c/o Highgate Holdings, Inc., 870 Seventh Avenue, 2nd Floor,
New York, New York 10019 (“Assignor”), and [   
               
              
        ], a [   
               
              
        ],
having an address c/o DiamondRock Hospitality Company, 3 Bethesda Metro Center, Suite 1500,
Bethesda, Maryland 20814 (“Assignee”).

WITNESSETH:

Reference is hereby made to that certain Purchase and Sale Agreement (the “Purchase
Agreement”) by and between Assignor and Assignee, dated May
 _____, 2011. Capitalized terms used
but not otherwise defined shall have the meanings ascribed to such terms in the Purchase Agreement.

Assignor for Ten Dollars ($10.00), and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, hereby assigns to Assignee all of Assignor’s right,
title and interest in, to and the Intangibles and the Bookings solely to the extent relating to the
Premises (as defined in the Purchase Agreement) that Seller is required to provide to Purchaser
pursuant to the Purchase Agreement.

TO HAVE AND TO HOLD unto Assignee and its successors and assigns to its and their own use and
benefit forever.

Assignee hereby expressly assumes the obligations of Assignor in respect of the Intangibles
and the Bookings accruing from and after the date hereof.

Except as otherwise expressly provided for (and to the extent and duration provided for) in
the Purchase Agreement, Assignee hereby acknowledges and agrees that the Intangibles, the Bookings
and, subject to Section 8 of the Purchase Agreement, the Receivables and House Bank Funds are being
conveyed in “AS IS, WHERE IS, WITH ALL FAULTS”, and the provisions of Section 24 of the Purchase
Agreement are incorporated herein by this reference.

Except as otherwise expressly provided for (and to the extent and duration provided for) in
the Purchase Agreement, this Assignment is made by Assignor without recourse and without any
expressed or implied representation or warranty whatsoever.

This Assignment shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.

Any inconsistency between the terms herein and the terms set forth in the Purchase Agreement
shall be resolved in favor of the terms of the Purchase Agreement.

 

Exhibit 7-1

 

This Assignment may be executed in any number of counterparts, each of which shall be deemed
to be an original and all of which shall constitute one and the same agreement.

[No further text on this page; the signature page follows.]

 

Exhibit 7-2

 

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

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	ASSIGNOR:

LEXINGTON HOTEL, LLC, a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Lexington Hotel (Holdings), LLC, a Delaware
limited liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Lex Intermediate Mezz, LLC, a
Delaware limited liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	Lex Intermediate
Mezz (Holdings), LLC, a Delaware limited liability
company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	By:	 	Lex Sub Mezz (Holdings), LLC, a Delaware limited
liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	By:	 	WH/LEX, LLC, a Delaware limited
liability company, its managing member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 

Name:
	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	Title:	 	 

	 	 	 	 	 	 	 	 	 
	 	 	By:	 	MERISTAR LEXINGTON PARTNERS, LLC, a
Delaware limited liability company, its
managing member	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

Name:
	 	 
	 

	 	 	 	 	 	Title:	 	 

[Signature Page Continues]

 

Exhibit 7-3

 

	 	 	 	 	 
	ASSIGNEE:	 	 
	 	 	 	 	 
	[                                        ],

a [                                        ]	 	 
	 	 	 	 	 
	By:	 	 	 	 
	 	 	 

Name:
	 	 
	 	 	Title:	 	 

 

Exhibit 7-4

 

EXHIBIT 8

FORM OF ASSIGNMENT AND ASSUMPTION 

OF THE COLLECTIVE BARGAINING AGREEMENT

IWA ASSUMPTION AGREEMENT

This IWA ASSUMPTION AGREEMENT (“IWAAA”) is made and entered into as of this
 _____ 
day of
May, 2011, by and between LEXINGTON HOTEL, LLC, a Delaware limited liability company, having an
address c/o Highgate Holdings, Inc., 870 Seventh Avenue, 2nd Floor, New York, New York 10019
(“Seller”), which owns the hotel located at 511 Lexington Avenue, New York, New York and
commonly known as “The Radisson Lexington Hotel” (“Hotel”), whose manager was the employer
of the bargaining unit employees employed at the Hotel (“Employees”); and
[              
              
            ],
a [            
             
               ], having an address c/o DiamondRock Hospitality
Company, 3 Bethesda Metro Center, Suite 1500, Bethesda, Maryland 20814 (“Purchaser”); and
HIGHGATE HOTELS, L.P., a Delaware limited partnership, as managing agent for Purchaser in
connection with the operation of the Hotel and the employer of the Employees (“Manager”);
and the New York Hotel and Motel Trades Council, AFL-CIO (“Union”).

RECITALS:

A. Purchaser has agreed to purchase the Hotel from Seller pursuant to that certain Purchase
and Sale Agreement, dated as of May
 _____, 2011 (“Purchase Agreement”) and Manager shall
operate the Hotel for Purchaser and shall employ the Employees;

B. Seller is bound to a collective bargaining agreement known as the Industry Wide Agreement,
which is in effect through June 30, 2012 (“IWA”);

C. Article 59 of the IWA requires that in the event of any transaction which transfers
majority ownership, management or operational control of the Hotel, Seller ensure that any party
assuming such majority ownership, management or control (“Transferee”) assume and be bound
by the IWA;

D. Purchaser and Manager are each a Transferee under Article 59 of the IWA;

AGREEMENTS:

It is now therefore agreed that:

1. The foregoing recitals are true and correct and are incorporated herein by reference.

2. Upon the closing of the sale of the Hotel from Seller to Purchaser (the “Closing”),
Purchaser and Manager hereby assume all of Seller’s obligations under the IWA. However, nothing
herein shall modify or limit the rights and obligations between Purchaser and Seller that survive
the Closing as set forth in the Purchase Agreement.

 

Exhibit 8-1

 

3. Purchaser and Manager agree that, effective at Closing, they have assumed, adopted, and are
bound by all terms and conditions, both economic and non-economic, of Seller under the IWA.
Purchaser and Manager further agrees that Manager shall offer to retain all current bargaining unit
employees, and if such offers are accepted, their employment will continue uninterrupted and
without loss of seniority, compensation, benefits, and all other terms and conditions of
employment, subject to the IWA and applicable law.

4. Effective immediately, any and all disputes between the Union and any party hereto
regarding this IWAAA shall be subject to Article 26 of the IWA, the entirety of which is
incorporated herein by reference herein.

5. This Agreement may be signed in counterparts, each of which shall be deemed an original.

[Signature Page Immediately Follows]

 

Exhibit 8-2

 

IN WITNESS WHEREOF, Seller, Purchaser and Manager have executed this IWA Assumption Agreement
as of the date first written above.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	SELLER:

LEXINGTON HOTEL, LLC, a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Lexington Hotel (Holdings), LLC, a Delaware
limited liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Lex Intermediate Mezz, LLC, a
Delaware limited liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	Lex Intermediate
Mezz (Holdings), LLC, a Delaware limited liability
company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	By:	 	Lex Sub Mezz (Holdings), LLC, a Delaware limited
liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	By:	 	WH/LEX, LLC, a Delaware limited
liability company, its managing member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 

Name:
	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	Title:	 	 

	 	 	 	 	 	 	 	 	 
	 	 	By:	 	MERISTAR LEXINGTON PARTNERS, LLC, a
Delaware limited liability company, its
managing member	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

Name:
	 	 
	 

	 	 	 	 	 	Title:	 	 

[Signature Page Continues]

 

Exhibit 8-3

 

	 	 	 	 	 	 	 	 	 
	 	 	PURCHASER:

[                                        ],

a [                                        ]	 	 
	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	MANAGER:

HIGHGATE HOTELS, L.P., a Delaware limited partnership	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Norwich GP LLC, a Delaware limited liability

company, its general partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

Name:
	 	 
	 

	 	 	 	 	 	Title:	 	 

 

Exhibit 8-4

 

EXHIBIT 9

ESCROW HOLDBACK AGREEMENT

THIS ESCROW HOLDBACK AGREEMENT (this “Agreement”), dated as of May
_____, 2011, is made
by and between LEXINGTON HOTEL, LLC, a Delaware limited liability company, having an address c/o
Highgate Holdings, Inc., 870 Seventh Avenue, 2nd Floor, New York, New York 10019
(“Seller”), [       
              
               
    ], a [       
              
               
    ], having an address c/o
DiamondRock Hospitality Company, 3 Bethesda Metro Center, Suite 1500, Bethesda, Maryland 20814
(“Purchaser”), and COMMONWEALTH LAND TITLE INSURANCE COMPANY, 140 East 45th
Street, 22nd Floor, New York, New York 10017, Attention: Peter G. Doyle, in its capacity
as escrow agent hereunder (the “Escrow Agent”).

RECITALS:

A. Reference is made to that certain Purchase and Sale Agreement, dated as of May
 _____, 2011
(the “Purchase Agreement”), by and between Seller and Purchaser.

B. Seller agreed to a Holdback Escrow to secure Seller’s obligations after Closing for a Claim
pursuant to Section 18(a)(xiv) of the Purchase Agreement.

C. Escrow Agent is willing to hold the Holdback Escrow in escrow on the terms and conditions
hereinafter set forth.

AGREEMENTS:

NOW, THEREFORE, in consideration of the foregoing, of the covenants, promises and undertakings
set forth herein, and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Seller, Purchaser and Escrow Agent covenant and agree as follows:

1. Capitalized Terms. Capitalized terms used in this Agreement and not otherwise
defined herein shall have the meaning set forth in the Purchase Agreement.

2. Engagement of Escrow Agent. Seller and Purchaser hereby appoint Escrow Agent, and
Escrow Agent hereby accepts such appointment, to act and serve as the escrow agent under and
pursuant to this Agreement.

3. Acknowledgement of Receipt of Escrow. Escrow Agent hereby acknowledges receipt of
the Holdback Escrow to be held in escrow in accordance with the terms and conditions of this
Agreement. Escrow Agent agrees that it shall hold, maintain and disburse the Holdback Escrow, and
any interest accrued thereon, pursuant to and in accordance with the terms of this Agreement.

 

Exhibit 9-1

 

4. Holding of Holdback Escrow.

(a) The Holdback Escrow shall be held by Escrow Agent in an interest-bearing escrow account
established by Escrow Agent at JP Morgan Chase or another national bank selected by both Seller and
Purchaser. Interest earned on any such amount or on any cash placed in the Escrow by Seller shall
be become part of Holdback Escrow.

(b) The Holdback Escrow, together with the interest earned thereon, shall be held and
delivered by Escrow Agent subject to and in accordance with the terms and conditions of Section
18(a)(xiv) of the Purchase Agreement. If Escrow Agent receives a written notice signed by both
Seller and Purchaser that this Agreement has been terminated or canceled, Escrow Agent shall
deliver the Escrow Funds as directed therein.

(c) Pursuant to Section 18(a)(xiv)(B) of the Purchase Agreement, unless Purchaser shall have
delivered a Claim Notice to Seller prior to the expiration of the Holdback Period, Escrow Agent
shall be instructed to, and shall, on the first Business Day after the expiration of the Holdback
Period, deliver to Seller the Holdback Escrow.

(d) Pursuant to Section 18(a)(xiv)(C) of the Purchase Agreement, provided Purchaser shall have
delivered a Claim Notice to Seller prior to the expiration of the Holdback Period, then, if the
Claim asserted in such Claim Notice has not been resolved as of the expiration of the Holdback
Period, Escrow Agent shall continue to hold in escrow such portion of the Holdback Escrow in an
amount equal to the Claimed Damage set forth in such Claim Notice until Escrow Agent is authorized
to disburse the same in accordance with the terms of this sub-paragraph (d), and shall pay to
Seller the balance of the Holdback Escrow on the first Business Day following the expiration of the
Holdback Period. Escrow Agent shall continue to hold the Holdback Escrow until the earlier of (i)
Escrow Agent’s receipt of joint instructions from Purchaser and Seller, in which event Escrow Agent
shall deliver the Holdback Escrow in accordance with such instructions or (ii) the entry of a
final, non-appealable judgment with respect to the applicable Claim in which event Escrow Agent
shall deliver the Holdback Escrow in accordance with the terms of said judgment.

(e) If Escrow Agent receives (i) a written request signed by Seller or Purchaser (the
“Noticing Party”) stating that the Noticing Party is entitled to the Holdback Escrow or
(ii) a written request signed by Purchaser stating that it is entitled to the Holdback Escrow or
any portion thereof pursuant to the terms and conditions of Section 18(a)(xiv) of the Purchase
Agreement, Escrow Agent shall mail (by certified mail, return receipt requested) a copy of such
request to the other party hereto (the “Non-Noticing Party”). The Non-Noticing Party shall
have the right to object to such request for the Holdback Escrow by written notice of objection
delivered to and received by Escrow Agent ten (10) Business Days after the date of Escrow Agent’s
mailing of such copy to the Non-Noticing Party, but not thereafter. If Escrow Agent shall not have
so received a written notice of objection from the Non-Noticing Party, Escrow Agent shall deliver
the Holdback Escrow to the Noticing Party. If Escrow Agent shall have received a written notice of
objection within the time herein prescribed, Escrow Agent shall refuse to comply with any requests
or demands on it and shall continue to hold the Holdback Escrow, together with any interest earned
thereon, until Escrow Agent receives either (A) a written notice signed by both Seller and
Purchaser, stating who is entitled to the Holdback
Escrow, or (B) a final order of a court of competent jurisdiction directing disbursement of
the Holdback Escrow in a specific manner, in either of which events Escrow Agent shall then
disburse the Holdback Escrow in accordance with such notice or order.

 

Exhibit 9-2

 

(f) Any notice to Escrow Agent shall be sufficient only if received by Escrow Agent within the
applicable time period set forth herein. All mailings and notices from Escrow Agent to Seller
and/or Purchaser, or from Seller and/or Purchaser to Escrow Agent, provided for in this Agreement
shall be addressed to the party to receive such notice at its notice address set forth in Paragraph
7 hereof (with copies to be similarly sent to the additional parties therein indicated).

5. Escrow Agent.

(a) Except as expressly contemplated by this Agreement or by joint written instructions from
the Purchaser and the Seller, the Escrow Agent shall not sell, transfer or otherwise dispose of in
any manner the Holdback Escrow, and any interest accrued thereon, except pursuant to an order of a
court of competent jurisdiction.

(b) The duties and obligations of the Escrow Agent shall be determined solely by this
Agreement.

(c) Escrow Agent is acting hereunder without charge as an accommodation to Seller and
Purchaser, it being understood and agreed that Escrow Agent shall not be liable for any error in
judgment or any act done or omitted by it in good faith or pursuant to court order, or for any
mistake of fact or law. Escrow Agent may rely and act upon any instrument or other writing
reasonably believed by Escrow Agent to be genuine and purporting to be signed and presented by any
person or persons purporting to have authority to act on behalf of Seller or Purchaser, as the case
may be, and shall not be liable in connection with the performance of any duties imposed upon
Escrow Agent by the provisions of this Agreement, except for Escrow Agent’s own negligence, willful
misconduct or default. Escrow Agent shall have no duties or responsibilities except those set forth
herein. Escrow Agent shall not be bound by any modification, cancellation or rescission of this
Agreement unless the same is in writing and signed by Purchaser and Seller, and, if Escrow Agent’s
duties hereunder are affected, unless Escrow Agent shall have given prior written consent thereto.
Escrow Agent shall be reimbursed by Seller and Purchaser for any actual out-of-pocket expenses
(including reasonable legal fees and disbursements of outside counsel), including all of Escrow
Agent’s fees and expenses with respect to any interpleader action incurred in connection with this
Agreement, and such liability shall be joint and several; provided, however, that,
as between Purchaser and Seller, the prevailing party in any dispute over the Holdback Escrow shall
be entitled to reimbursement by the losing party of any such expenses paid to Escrow Agent. In the
event that Escrow Agent shall be uncertain as to Escrow Agent’s duties or rights hereunder, or
shall receive instructions from Purchaser or Seller that, in Escrow Agent’s opinion, are in
conflict with any of the provisions hereof, Escrow Agent shall be entitled to hold the Holdback
Escrow, and any interest accrued thereon, and may decline to take any other action. After delivery
of the Holdback Escrow, and any interest accrued thereon, in accordance herewith, Escrow Agent
shall have no further liability or obligation of any kind whatsoever.

 

Exhibit 9-3

 

(d) Escrow Agent shall have the right at any time to resign upon ten (10) Business Days’ prior
notice to Seller and Purchaser. Seller and Purchaser shall jointly select a successor Escrow Agent
and shall notify Escrow Agent of the name and address of such successor Escrow Agent within ten
(10) Business Days after receipt of notice of Escrow Agent of its intent to resign. If Escrow Agent
has not received notice of the name and address of such successor Escrow Agent within such period,
Escrow Agent shall have the right to select on behalf of Seller and Purchaser a bank or trust
company licensed to do business in the State of New York and having a branch located in New York
County to act as successor Escrow Agent hereunder. At any time after the ten (10) Business Day
period, Escrow Agent shall have the right to deliver the Holdback Escrow, and any interest accrued
thereon, to any successor Escrow Agent selected hereunder, provided such successor Escrow Agent
shall execute and deliver to Seller and Purchaser an assumption agreement whereby it assumes all of
Escrow Agent’s obligations hereunder. Upon the delivery of all such amounts and such assumption
agreement, the successor Escrow Agent shall become the Escrow Agent for all purposes hereunder and
shall have all of the rights and obligations of Escrow Agent hereunder, and the resigning Escrow
Agent shall have no further responsibilities or obligations hereunder.

6. Termination. This Agreement shall terminate on the earlier of: (a) the date on
which Escrow Agent has disbursed all cash, if any, held by it pursuant to this Agreement, (b)
Escrow Agent has refunded any cash portion of the Holdback Escrow to Seller pursuant to the
Purchase Agreement, and (c) written notice of termination executed by Seller and Purchaser and
Escrow Agent has released the Holdback Escrow in accordance with the such written notice.

7. Notices.

(a) Except as otherwise expressly provided in this Agreement, all notices, demands, requests
or other communications hereunder (each a “Notice” and collectively, “Notices”)
required to be given or which may be given hereunder shall be in writing and shall be sent by (i)
certified or registered mail, return receipt requested, postage prepaid, or (ii) national overnight
delivery service, or (iii) facsimile transmission (provided that a copy shall be delivered by the
next Business Day, by a national overnight delivery service or personal delivery), or (iv) personal
delivery, addressed as follows:

If to Seller:

Lexington Hotel, LLC

c/o Highgate Holdings, Inc.

545 E. John Carpenter Fwy, Suite 1400

Irving, Texas 75062

Attention: Mahmood Khimji and Lynne A. Messina

Telephone No.: (972) 444-9700

Facsimile No.: (972) 444-9700

and

Lexington Hotel, LLC

c/o Highgate Holdings, Inc.

870 Seventh Avenue, 2nd Floor

New York, New York 10019

Attention: Neil Luthra

Telephone No.: (212) 707-5041

Facsimile No.: (212) 707-5555

 

Exhibit 9-4

 

with a copy to:

Fried, Frank, Harris, Shriver & Jacobson LLP

One New York Plaza

New York, New York 10004

Attention: Ross Z. Silver, Esq.

Telephone No.: (212) 859-8078

Facsimile No.: (212) 859-4000

If to Purchaser:

[                                        ]

c/o DiamondRock Hospitality Company

3 Bethesda Metro Center

Suite 1500

Bethesda, Maryland 20814

Attention: General Counsel

Telephone No.: (240) 744-1188

Facsimile No.: (240) 477-1199

with copy to:

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, New York 10019-6099

Attention: Steven D. Klein, Esq.

Telephone: No. (212) 728-8221

Facsimile No.: (212) 728-9221

If to Escrow Agent or Title Company:

Commonwealth Land Title Insurance Company

140 East 45th Street, 22nd Floor

New York, New York 10017

Attention: Peter G. Doyle

Telephone No.: (212) 973-6207

Facsimile No.: (212) 986-3215

(b) Any Notice so sent by certified or registered mail, return receipt requested, postage
prepaid, shall be deemed given upon delivery (or at the time of refusal to accept delivery) as
indicated on the return receipt thereto. Any Notice so sent by national overnight
delivery service or personal delivery shall be deemed given on the next Business Day when sent
(or at the time of refusal to accept delivery) as indicated on the return receipt or the receipt of
the national overnight delivery service or personal delivery service. Any Notice sent by facsimile
transmission shall be deemed given when received as confirmed by the telecopier electronic
confirmation receipt (if followed by overnight delivery service as provided above). All Notices
delivered after 5:00 p.m. (New York time) shall be deemed delivered on the next Business Day.

 

Exhibit 9-5

 

(c) Notice may be given either by a party or by such party’s attorney. Seller or Purchaser may
designate, by not less than five (5) Business Days’ notice given to the other in accordance with
the terms of this Paragraph 7, additional or substituted parties to whom Notices should be sent
hereunder. A party receiving a Notice which does not comply with the technical requirements for
notice under this Paragraph 7 may elect to waive any deficiencies and treat the notice as having
been properly given.

8. Governing Law. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York applicable to contracts executed and to be performed
entirely within that State. The parties hereto hereby submit to personal jurisdiction in the State
of New York for all matters, if any, which shall arise with respect to this Agreement, and waive
any and all rights under the law of any other state or country to object to jurisdiction within the
State of New York or to institute a claim of forum non conveniens with respect to any court in the
State of New York for the purposes of litigation with respect to this Agreement.

9. Amendments. This Agreement may not be amended or modified except by an instrument
in writing signed by, or on behalf of, the Seller, the Purchaser and the Escrow Agent.

10. Waiver. Any party hereto may (i) extend the time for the performance of any
obligation or other act of any other party hereto or (ii) waive compliance with any agreement or
condition contained herein. Any such extension or waiver shall be valid only if set forth in an
instrument in writing signed by the party or parties to be bound thereby. Any waiver of any term
or condition shall not be construed as a waiver of any subsequent breach or a subsequent waiver of
the same term or condition, or a waiver of any other term or condition, of this Agreement. The
failure of any party to assert any of its rights hereunder shall not constitute a waiver of any of
such rights.

11. Severability. If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule of law or public policy, all other conditions
and provisions of this Agreement shall nevertheless remain in full force and effect so long as the
economic and legal substance of the transactions contemplated by this Agreement is not affected in
any manner materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the parties as closely
as possible in a mutually acceptable manner in order that the transactions contemplated by this
Agreement be consummated as originally contemplated to the fullest extent possible.

12. Entire Agreement. This Agreement and the Contract constitute the entire agreement
of the parties hereto with respect to the subject matter hereof and supersede all prior
agreements and undertakings, both written and oral, among the Seller, the Purchaser and the
Escrow Agent with respect to the subject matter hereof.

 

Exhibit 9-6

 

13. No Third Party Beneficiaries. This Agreement is for the sole benefit of the
parties hereto and their permitted assigns and nothing herein, express or implied, is intended to
or shall confer upon any other person or entity any legal or equitable right, benefit or remedy of
any nature whatsoever under or by reason of this Agreement.

14. Headings. The descriptive headings contained in this Agreement are included for
convenience of reference only and shall not affect in any way the meaning or interpretation of this
Agreement.

15. Counterparts. This Agreement may be executed in one or more counterparts, and by
different parties hereto in separate counterparts, each of which when executed shall be deemed to
be an original but all of which when taken together shall constitute one and the same agreement. To
facilitate execution of this Agreement, the parties may exchange by facsimile or electronic mail
(e-mail) (which shall include but not be limited to electronic attachments in `pdf or `tif formats
containing counterparts of this signature page) which shall be effective as original signature
pages for all purposes.

16. No Conflict. Nothing herein is intended to modify or amend the provisions of
Section 18(a)(xiv) of the Purchase Agreement, and in the event of a conflict between the provisions
hereof and the provisions of Section 18(a)(xiv) as to rights or obligations of Purchaser and
Seller, the provisions of Section 18(a)(xiv) shall govern. Seller and Purchaser each agrees that it
will not give any notice or require or make any demands or objections in respect of the Holdback
Escrow or any part thereof which is contrary to or inconsistent with the provisions of Section
18(a)(xiv) of the Purchase Agreement.

[No further text on this page; the signature page follows.]

 

Exhibit 9-7

 

IN WITNESS WHEREOF, Seller, Purchaser and Escrow Agent have executed this Escrow Holdback
Agreement as of the date first written above.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	SELLER:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	LEXINGTON HOTEL, LLC, a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Lexington Hotel (Holdings), LLC, a Delaware
limited liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Lex Intermediate Mezz, LLC, a
Delaware limited liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	Lex Intermediate
Mezz (Holdings), LLC, a Delaware limited liability
company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	By:	 	Lex Sub Mezz (Holdings), LLC, a Delaware limited
liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	By:	 	WH/LEX, LLC, a Delaware limited
liability company, its managing member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	By:	 	MERISTAR LEXINGTON PARTNERS, LLC, a
Delaware limited liability company, its
managing member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

	 	 

[Signature Page Continues]

 

Exhibit 9-8 

 

	 	 	 	 	 	 	 	 	 
	 	 	PURCHASER:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	[                                        ],

a [                                        ]	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 
	 	 	ESCROW AGENT:	 	 
	 
	 	 	Commonwealth Land Title Insurance Company	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 

 

Exhibit 9-9 

 

EXHIBIT 10

ESCROW AGREEMENT

(Material Breach Credit Dispute)

THIS ESCROW AGREEMENT (this “Agreement”), dated as of May                     , 2011, is made by and
between LEXINGTON HOTEL, LLC, a Delaware limited liability company, having an address c/o Highgate
Holdings, Inc., 870 Seventh Avenue, 2nd Floor, New York, New York 10019 (“Seller”),
[              
              
            ], a [  
                
               
       ], having an address c/o DiamondRock Hospitality Company,
3 Bethesda Metro Center, Suite 1500, Bethesda, Maryland 20814 (“Purchaser”) and
COMMONWEALTH LAND TITLE INSURANCE COMPANY, 140 East 45th Street, 22nd Floor,
New York, New York 10017, Attention: Peter G. Doyle, in its capacity as escrow agent hereunder (the
“Escrow Agent”).

RECITALS:

A. Reference is made to that certain Purchase and Sale Agreement, dated as of May
 _____, 2011
(the “Purchase Agreement”), by and between Seller and Purchaser.

B. Section 21(c)(ii) of the Purchase Agreement contemplates that, in the event of a Dispute
with respect to a Material Breach Credit, an amount equal to the Material Breach Credit shall be
deposited by Seller into escrow.

C. Escrow Agent is willing to hold the Escrow Funds in escrow on the terms and conditions
hereinafter set forth.

AGREEMENTS:

NOW, THEREFORE, in consideration of the foregoing, of the covenants, promises and undertakings
set forth herein, and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Seller, Purchaser and Escrow Agent covenant and agree as follows:

1. Capitalized Terms. Capitalized terms used in this Agreement and not otherwise
defined herein shall have the meaning set forth in the Purchase Agreement.

2. Engagement of Escrow Agent. Seller and Purchaser hereby appoint Escrow Agent, and
Escrow Agent hereby accepts such appointment, to act and serve as the escrow agent under and
pursuant to this Agreement.

3. Acknowledgement of Receipt of Escrow. Escrow Agent hereby acknowledges that it has
received from Seller the Material Claim Credit in the amount of [                                        
($                                        )] (the “Escrow Funds”). Escrow Agent agrees that it shall hold,
maintain and disburse the Escrow Funds, and any interest accrued thereon, pursuant to and in
accordance with the terms of this Agreement.

 

Exhibit 10-1

 

4. Release of Escrow. Escrow Agent shall continue to hold the Escrow Funds until (a)
Escrow Agent receives written notice from Purchaser and Seller agreeing on the disposition
of the Escrow Funds, in which event Escrow Agent will deliver the Escrow Funds in accordance
with such instructions or (b) the entry of a determination by the Arbiter pursuant to the
arbitration procedures set forth in Section 21(c)(ii) of the Purchase Agreement, in which event
Escrow Agent will deliver the Escrow Funds in accordance with the terms of said determination.

5. Holding of Funds.

(a) The Escrow Funds shall be held by Escrow Agent in an interest-bearing escrow account
established by Escrow Agent at JP Morgan Chase or another national bank selected by both Seller and
Purchaser. Interest earned on any such amount or on any cash placed in the Escrow by Seller shall
be become part of Escrow Funds.

(b) The Escrow Funds, together with the interest earned thereon, shall be held and delivered
by Escrow Agent subject to and in accordance with the terms and conditions of 21(c)(ii) of the
Purchase Agreement. If Escrow Agent receives a written notice signed by both Seller and Purchaser
that this Agreement has been terminated or canceled, Escrow Agent shall deliver the Escrow Funds as
directed therein.

6. Escrow Agent.

(a) Except as expressly contemplated by this Agreement or by joint written instructions from
the Purchaser and the Seller, the Escrow Agent shall not sell, transfer or otherwise dispose of in
any manner the Escrow Funds, and any interest accrued thereon, except pursuant to an order of a
court of competent jurisdiction.

(b) The duties and obligations of the Escrow Agent shall be determined solely by this
Agreement.

(c) Escrow Agent is acting hereunder without charge as an accommodation to Seller and
Purchaser, it being understood and agreed that Escrow Agent shall not be liable for any error in
judgment or any act done or omitted by it in good faith or pursuant to court order, or for any
mistake of fact or law. Escrow Agent may rely and act upon any instrument or other writing
reasonably believed by Escrow Agent to be genuine and purporting to be signed and presented by any
person or persons purporting to have authority to act on behalf of Seller or Purchaser, as the case
may be, and shall not be liable in connection with the performance of any duties imposed upon
Escrow Agent by the provisions of this Agreement, except for Escrow Agent’s own negligence, willful
misconduct or default. Escrow Agent shall have no duties or responsibilities except those set forth
herein. Escrow Agent shall not be bound by any modification, cancellation or rescission of this
Agreement unless the same is in writing and signed by Purchaser and Seller, and, if Escrow Agent’s
duties hereunder are affected, unless Escrow Agent shall have given prior written consent thereto.
Escrow Agent shall be reimbursed by Seller and Purchaser for any actual out-of-pocket expenses
(including reasonable legal fees and disbursements of outside counsel), including all of Escrow
Agent’s fees and expenses with respect to any interpleader action incurred in connection with this
Agreement, and such liability shall be joint and several; provided, however, that,
as between Purchaser and Seller, the prevailing party in any dispute over the Escrow Funds shall be
entitled to reimbursement by the losing party of any such expenses paid to Escrow Agent. In the
event that Escrow Agent shall be
uncertain as to Escrow Agent’s duties or rights hereunder, or shall receive instructions from
Purchaser or Seller that, in Escrow Agent’s opinion, are in conflict with any of the provisions
hereof, Escrow Agent shall be entitled to hold the Escrow Funds, and any interest accrued thereon,
and may decline to take any other action. After delivery of the Escrow Funds, and any interest
accrued thereon, in accordance herewith, Escrow Agent shall have no further liability or obligation
of any kind whatsoever.

 

Exhibit 10-2

 

(d) Escrow Agent shall have the right at any time to resign upon ten (10) Business Days’ prior
notice to Seller and Purchaser. Seller and Purchaser shall jointly select a successor Escrow Agent
and shall notify Escrow Agent of the name and address of such successor Escrow Agent within ten
(10) Business Days after receipt of notice of Escrow Agent of its intent to resign. If Escrow Agent
has not received notice of the name and address of such successor Escrow Agent within such period,
Escrow Agent shall have the right to select on behalf of Seller and Purchaser a bank or trust
company licensed to do business in the State of New York and having a branch located in New York
County to act as successor Escrow Agent hereunder. At any time after the ten (10) Business Day
period, Escrow Agent shall have the right to deliver the Escrow Funds, and any interest accrued
thereon, to any successor Escrow Agent selected hereunder, provided such successor Escrow Agent
shall execute and deliver to Seller and Purchaser an assumption agreement whereby it assumes all of
Escrow Agent’s obligations hereunder. Upon the delivery of all such amounts and such assumption
agreement, the successor Escrow Agent shall become the Escrow Agent for all purposes hereunder and
shall have all of the rights and obligations of Escrow Agent hereunder, and the resigning Escrow
Agent shall have no further responsibilities or obligations hereunder.

7. Termination. This Agreement shall terminate on the earlier of: (a) the date on
which the Escrow Agent has disbursed all of the Escrow Funds, and any interest accrued thereon,
held by it pursuant to this Agreement, and (b) written notice of termination executed by Seller and
Purchaser and Escrow Agent has released the Escrow Funds in accordance with the such written
notice.

8. Notices.

(a) Except as otherwise expressly provided in this Agreement, all notices, demands, requests
or other communications hereunder (each a “Notice” and collectively, “Notices”)
required to be given or which may be given hereunder shall be in writing and shall be sent by (i)
certified or registered mail, return receipt requested, postage prepaid, or (ii) national overnight
delivery service, or (iii) facsimile transmission (provided that a copy shall be delivered by the
next Business Day, by a national overnight delivery service or personal delivery), or (iv) personal
delivery, addressed as follows:

If to Seller:

Lexington Hotel, LLC

c/o Highgate Holdings, Inc.

545 E. John Carpenter Fwy, Suite 1400

Irving, Texas 75062

Attention: Mahmood Khimji and Lynne A. Messina

Telephone No.: (972) 444-9700

Facsimile No.: (972) 444-9700

 

Exhibit 10-3

 

and

Lexington Hotel, LLC

c/o Highgate Holdings, Inc.

870 Seventh Avenue, 2nd Floor

New York, New York 10019

Attention: Neil Luthra

Telephone No.: (212) 707-5041

Facsimile No.: (212) 707-5555

with a copy to:

Fried, Frank, Harris, Shriver & Jacobson LLP

One New York Plaza

New York, New York 10004

Attention: Ross Z. Silver, Esq.

Telephone No.: (212) 859-8078

Facsimile No.: (212) 859-4000

If to Purchaser:

[                                        ]

c/o DiamondRock Hospitality Company

3 Bethesda Metro Center

Suite 1500

Bethesda, Maryland 20814

Attention: General Counsel

Telephone No.: (240) 744-1188

Facsimile No.: (240) 477-1199

with copy to:

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, New York 10019-6099

Attention: Steven D. Klein, Esq.

Telephone: No. (212) 728-8221

Facsimile No.: (212) 728-9221

 

Exhibit 10-4

 

If to Escrow Agent or Title Company:

Commonwealth Land Title Insurance Company

140 East 45th Street, 22nd Floor

New York, New York 10017

Attention: Peter G. Doyle

Telephone No.: (212) 973-6207

Facsimile No.: (212) 986-3215

(b) Any Notice so sent by certified or registered mail, return receipt requested, postage
prepaid, shall be deemed given upon delivery (or at the time of refusal to accept delivery) as
indicated on the return receipt thereto. Any Notice so sent by national overnight delivery service
or personal delivery shall be deemed given on the next Business Day when sent (or at the time of
refusal to accept delivery) as indicated on the return receipt or the receipt of the national
overnight delivery service or personal delivery service. Any Notice sent by facsimile transmission
shall be deemed given when received as confirmed by the telecopier electronic confirmation receipt
(if followed by overnight delivery service as provided above). All Notices delivered after 5:00
p.m. (New York time) shall be deemed delivered on the next Business Day.

(c) Notice may be given either by a party or by such party’s attorney. Seller or Purchaser may
designate, by not less than five (5) Business Days’ notice given to the other in accordance with
the terms of this Paragraph 8, additional or substituted parties to whom Notices should be sent
hereunder. A party receiving a Notice which does not comply with the technical requirements for
notice under this Paragraph 8 may elect to waive any deficiencies and treat the notice as having
been properly given.

9. Governing Law. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York applicable to contracts executed and to be performed
entirely within that State. The parties hereto hereby submit to personal jurisdiction in the State
of New York for all matters, if any, which shall arise with respect to this Agreement, and waive
any and all rights under the law of any other state or country to object to jurisdiction within the
State of New York or to institute a claim of forum non conveniens with respect to any court in the
State of New York for the purposes of litigation with respect to this Agreement.

10. Amendments. This Agreement may not be amended or modified except by an instrument
in writing signed by, or on behalf of, the Seller, the Purchaser and the Escrow Agent.

11. Waiver. Any party hereto may (i) extend the time for the performance of any
obligation or other act of any other party hereto or (ii) waive compliance with any agreement or
condition contained herein. Any such extension or waiver shall be valid only if set forth in an
instrument in writing signed by the party or parties to be bound thereby. Any waiver of any term
or condition shall not be construed as a waiver of any subsequent breach or a subsequent waiver of
the same term or condition, or a waiver of any other term or condition, of this Agreement. The
failure of any party to assert any of its rights hereunder shall not constitute a waiver of any of
such rights.

12. Severability. If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule of law or public policy, all other conditions
and provisions of this Agreement shall nevertheless remain in full force and effect so long as the
economic and legal substance of the transactions contemplated by this Agreement is not affected in
any manner materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original intent of the parties
as closely as possible in a mutually acceptable manner in order that the transactions contemplated
by this Agreement be consummated as originally contemplated to the fullest extent possible.

 

Exhibit 10-5

 

13. Entire Agreement. This Agreement and the Contract constitute the entire agreement
of the parties hereto with respect to the subject matter hereof and supersede all prior agreements
and undertakings, both written and oral, among the Seller, the Purchaser and the Escrow Agent with
respect to the subject matter hereof.

14. No Third Party Beneficiaries. This Agreement is for the sole benefit of the
parties hereto and their permitted assigns and nothing herein, express or implied, is intended to
or shall confer upon any other person or entity any legal or equitable right, benefit or remedy of
any nature whatsoever under or by reason of this Agreement.

15. Headings. The descriptive headings contained in this Agreement are included for
convenience of reference only and shall not affect in any way the meaning or interpretation of this
Agreement.

16. Counterparts. This Agreement may be executed in one or more counterparts, and by
different parties hereto in separate counterparts, each of which when executed shall be deemed to
be an original but all of which when taken together shall constitute one and the same agreement. To
facilitate execution of this Agreement, the parties may exchange by facsimile or electronic mail
(e-mail) (which shall include but not be limited to electronic attachments in `pdf or `tif formats
containing counterparts of this signature page) which shall be effective as original signature
pages for all purposes.

17. No Conflict. Nothing herein is intended to modify or amend the provisions of
Section 21(c)(ii) of the Purchase Agreement, and in the event of a conflict between the provisions
hereof and the provisions of Section 21(c)(ii) as to rights or obligations of Purchaser and Seller,
the provisions of Section 21(c)(ii) shall govern. Seller and Purchaser each agrees that it will not
give any notice or require or make any demands or objections in respect of the Escrow Funds or any
part thereof which is contrary to or inconsistent with the provisions of Section 21(c)(ii)of the
Purchase Agreement.

[No further text on this page; the signature page follows.]

 

Exhibit 10-6

 

IN WITNESS WHEREOF, Seller, Purchaser and Escrow Agent have executed this Escrow Agreement as
of the date first written above.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	SELLER:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	LEXINGTON HOTEL, LLC, a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Lexington Hotel (Holdings), LLC, a Delaware
limited liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Lex Intermediate Mezz, LLC, a
Delaware limited liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	Lex Intermediate
Mezz (Holdings), LLC, a Delaware limited liability
company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	By:	 	Lex Sub Mezz (Holdings), LLC, a Delaware limited
liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	By:	 	WH/LEX, LLC, a Delaware limited
liability company, its managing member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	By:	 	MERISTAR LEXINGTON PARTNERS, LLC, a
Delaware limited liability company, its
managing member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

	 	 

[Signature Page Continues]

 

Exhibit 10-7

 

	 	 	 	 	 	 	 	 	 
	 	 	PURCHASER:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	[                                        ],

a [                                        ]	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 
	 	 	ESCROW AGENT:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Commonwealth Land Title Insurance Company	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 

 

Exhibit 10-8

 

EXHIBIT 11

TENANT / CONTRACT SERVICE PROVIDER DIRECTION LETTER

[SELLER LETTERHEAD]

May __, 2011

[TENANT / CONTRACT SERVICE PROVIDER NAME AND ADDRESS]

	 	 	 	 	 
	 

	 	Re:
	 	The Radisson Lexington Hotel, 511 Lexington Avenue, New York, New York (the
“Property”)

Dear Sir or Madam:

This letter is to advise you that, on May
 _____, 2011, [            
              
              ],
a [              
               
           ]
(“Purchaser”), purchased the Property from Lexington Hotel, LLC, a Delaware limited
liability company.

Your [lease and your security deposit (if any)] [contract] [have] [has] been assigned to
Purchaser. Purchaser is now the [landlord under your lease] [owner under your contract] and is
responsible for performing the [landlord’s] [owner’s] obligations under your lease.

[Please immediately commence to make all rental and other payments under your lease as
follows:]

	 	 	 	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 

Please make all inquiries and send all notices to the [landlord under your lease] [owner under
your contract] to:

	 	 	 	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 

[Signature Page Immediately Follows]

 

Exhibit 11-1

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	LEXINGTON HOTEL, LLC, a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Lexington Hotel (Holdings), LLC, a Delaware
limited liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Lex Intermediate Mezz, LLC, a
Delaware limited liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	Lex Intermediate
Mezz (Holdings), LLC, a Delaware limited liability
company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	By:	 	Lex Sub Mezz (Holdings), LLC, a Delaware limited
liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	By:	 	WH/LEX, LLC, a Delaware limited
liability company, its managing member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	By:	 	MERISTAR LEXINGTON PARTNERS, LLC, a
Delaware limited liability company, its
managing member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

	 	 

 

Exhibit 11-2

 

EXHIBIT 12

FRANCHISE INDEMNITY AGREEMENT

THIS INDEMNITY AGREEMENT (this “Agreement”), dated as of May
 _____, 2011, is made by and
between [             
              
             ],
a [             
              
             ] having an address c/o DiamondRock Hospitality
Company, 3 Bethesda Metro Center, Suite 1500, Bethesda, Maryland 20814 (“Indemnitor”), and
LEXINGTON HOTEL, LLC, a Delaware limited liability company, having an address c/o Highgate
Holdings, Inc., 870 Seventh Avenue, 2nd Floor, New York, New York 10019 (“Indemnitee”).

RECITALS:

A. On the date hereof, pursuant to that certain Purchase and Sale Agreement, dated as of May

 _____, 2011, Indemnitor acquired from Indemnitee that certain hotel known as the “Radisson Lexington
Hotel” located at 511 Lexington Avenue, New York, New York (the “Hotel”).

B. During Indemnitee’s ownership of the Hotel, the Hotel was operated as a “Radisson”
franchise pursuant to that certain Amended and Restated License Agreement, effective as of February
1, 2002, as amended by that certain First Amendment to Amended and Restated License Agreement,
dated as of April 1, 2005, and as further amended by that certain Second Amendment to Amended and
Restated License Agreement, dated and effective as of March 31, 2010 (as amended, the
“Franchise Agreement”) by and between Indemnitee, as franchisee, and Radisson Hotels
International, Inc., a Delaware corporation, as franchisor (“Franchisor”).

B. In connection with Indemnitor’s acquisition of the Hotel, Indemnitor has made application
and been approved for a license from Franchisor for the continued operation of the Hotel as a
“Radisson” from and after the closing of Indemnitor’s acquisition of the Hotel; however, although
approved by Franchisor, such license is not going to be issued by Franchisor until after such
closing.

C. Indemnitor has requested, and Indemnitee has agreed, to extend the term of the Franchise
Agreement until the date that Indemnitor enters into a new franchise license with Franchisor
relating to the Hotel, but in any event, no later than twenty (20) days following the date hereof,
in order to permit the operation of the Hotel as a “Radisson” during the period between the date of
the closing of the sale to Indemnitor and the date Indemnitor and Franchisor have entered into a
new franchise license agreement concerning the Hotel (the “Interim Period”).

D. Indemnitee is requiring the execution and delivery of this Agreement as a condition to
extending the term of its Franchise Agreement to cover the Interim Period and would not be willing
to do so in the absence of the execution and delivery by Indemnitor of this Agreement.

NOW, THEREFORE, as an inducement to have Indemnitee extend the term of its Franchise Agreement
with Franchisor, Indemnitor covenants and agrees to and for the benefit of Indemnitee as follows:

 

Exhibit 12-1

 

AGREEMENTS:

1. Recitals. The foregoing recitals are true and correct and are incorporated herein
by reference.

2. Indemnification. In consideration of Indemnitee’s extension of the term of the
Franchise Agreement to cover the Interim Period, Indemnitor hereby agrees to indemnify, defend and
hold Indemnitee harmless from and against any and all claims, demands, actions, causes of action,
suits, judgments, debts, damages, losses, liabilities, costs and expenses (including without
limitation reasonable attorneys’ fees), which Indemnitee may incur or sustain, or which may be
asserted against Indemnitee or the Hotel, arising and accruing from the Franchise Agreement during
the Interim Period only (“Indemnified Claims”), other than any such Indemnified Claims that
are the result of the gross negligence or willful misconduct of Indemnitee, its agents,
representatives or employees. Upon the execution and delivery by Franchisor and Indemnitor of a
new franchise license agreement concerning the Hotel (“New Franchise Agreement”; the date
of execution and delivery of same, the “Termination Date”), Indemnitor’s obligations under
this Agreement shall automatically expire without any further action by either party hereto;
provided, that Indemnitor’s obligation to indemnify Indemnitee as provided in this
Agreement shall remain with respect to any claim which arose and accrued during the Interim Period,
but is asserted after the Termination Date. Indemnitee hereby agrees that upon the execution of the
New Franchise Agreement and Indemnitor’s request, Indemnitee shall execute and deliver to
Indemnitor written confirmation of the termination of this Agreement.

3. Indemnification Procedure.

a. Indemnitee agrees to notify Indemnitor promptly upon receipt of any inquiry, notice, claim,
charge, cause of action or demand pertaining to the matters indemnified hereunder, stating the
nature and basis of such inquiry or notification, the amount thereof and Indemnitee’s reasonable
best estimate of the amount of Indemnitor’s liability to Indemnitee in connection therewith.
Indemnitee shall promptly deliver to Indemnitor any and all documentation or records as Indemnitor
may request in connection with such notice or inquiry and shall keep Indemnitor advised of any
subsequent developments.

b. If any action shall be brought against Indemnitee, then after Indemnitee notifies
Indemnitor thereof, Indemnitor shall be entitled to participate therein, and assume the defense
thereof at the expense of Indemnitor with counsel reasonably satisfactory to Indemnitee and to
settle and compromise any such claim or action; provided, however, that Indemnitee may elect to be
represented by separate counsel at Indemnitee’s expense and if Indemnitee so elects, such
settlement or compromise shall be effected only with the consent of Indemnitor, which consent shall
not be unreasonably withheld.

 

Exhibit 12-2

 

4. Notices. All notices, demands or other communications required or permitted to be
given hereunder shall be in writing and shall be deemed to have been duly delivered (a) upon the
delivery (or refusal to accept delivery) by messenger or overnight express delivery service (or, if
such date is not on a business day, on the business day next following such date), or (b) on the
third (3rd) business day next following the date of its mailing by certified mail, postage prepaid,
at a post office maintained by the United States Postal Service, or (c) upon the receipt by
facsimile transmission as evidenced by a receipt transmission report (followed by delivery by one
of the other means identified in (a)-(b)), addressed as follows:

If to Indemnitee, to:

Lexington Hotel, LLC

c/o Highgate Holdings, Inc.

545 E. John Carpenter Fwy, Suite 1400

Irving, Texas 75062

Attention: Mahmood Khimji and Lynne A. Messina

Telephone No.: (972) 444-9700

Facsimile No.: (972) 401-2400

and

Lexington Hotel, LLC

c/o Highgate Holdings, Inc.

870 Seventh Avenue, 2nd Floor

New York, New York 10019

Attention: Neil Luthra

Telephone No.: (212) 707-5041

Facsimile No.: (212) 707-5555

with copies to:

Fried, Frank, Harris, Shriver & Jacobson LLP

One New York Plaza

New York, New York 10004

Attention: Ross Z. Silver, Esq.

Telephone No.: (212) 859-8078

Facsimile No.: (212) 859-4000

If to Indemnitor, to:

[                                        ]

c/o DiamondRock Hospitality Company

3 Bethesda Metro Center

Suite 1500

Bethesda, Maryland 20814

Attention: General Counsel

Telephone No.: (240) 744-1188

Facsimile No.: (240) 477-1199

 

Exhibit 12-3

 

with a copy to:

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, New York 10019-6099

Attention: Steven D. Klein, Esq.

Telephone: No. (212) 728-8221

Facsimile No.: (212) 728-9221

Each party may, by notice given as aforesaid, change the address or addresses, or designate an
additional address or additional addresses, for its notices, provided, however, that no notice of a
change of address shall be effective until actual receipt of such notice.

5. Successors, etc. This Agreement is for the benefit of the parties hereto, and shall
be binding upon them, together with their respective heirs, executors, administrators, successors,
and assigns.

6. Governing Law; Jurisdiction. The validity, interpretation, and performance of this
Agreement shall be governed by the laws of the State of New York, without giving effect to the
principles of comity or conflicts of laws thereof. Each party hereto agrees to submit to the
personal jurisdiction and venue of the courts located in the State of New York, for a resolution of
all disputes between the parties arising in connection with this Agreement, and hereby waives the
claim or defense therein that such courts constitute an inconvenient forum.

7. Entire Agreement. This Agreement sets forth all the promises, covenants,
agreements, conditions and understandings between the parties hereto with respect to the
Indemnified Claims, and supersedes all prior and contemporaneous agreements and understandings,
inducements or conditions, express or implied, oral or written, except as herein contained, as to
the Indemnified Claims. No amendment, modification or variation of the terms of this Agreement
shall be valid unless made in writing and signed by the parties hereto.

8. Costs of Enforcement. In the event a party initiates legal action (including both
trial and appellate proceedings) to enforce its rights hereunder, the prevailing party in such
action shall recover from the non-prevailing party in such action its reasonable litigation
expenses (including, but not limited to reasonable attorneys’ fees and court costs) of all such
proceedings.

9. Construction. The captions are used for convenience only and shall not be resorted
to for interpretation of this Agreement.

10. Counterparts. This Agreement may be executed in several counterparts and all so
executed shall constitute one Agreement, binding on all the parties hereto, notwithstanding that
all the parties are not signatories to the original or same counterpart.

[Signature Page Immediately Follows]

 

Exhibit 12-4

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the day and
year first above written.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	INDEMNITEE:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	LEXINGTON HOTEL, LLC, a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Lexington Hotel (Holdings), LLC, a Delaware
limited liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Lex Intermediate Mezz, LLC, a
Delaware limited liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	Lex Intermediate
Mezz (Holdings), LLC, a Delaware limited liability
company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	By:	 	Lex Sub Mezz (Holdings), LLC, a Delaware limited
liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	By:	 	WH/LEX, LLC, a Delaware limited
liability company, its managing member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	By:	 	MERISTAR LEXINGTON PARTNERS, LLC, a
Delaware limited liability company, its
managing member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

	 	 

[Signature Page Continues]

 

Exhibit 12-5

 

	 	 	 	 	 	 	 	 	 
	 

	 	INDEMNITOR:
	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	                                        ,

a                                         	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By: 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 

 

Exhibit 12-6

 

EXHIBIT 13

ASSIGNMENT AND ASSUMPTION OF LEASES

THIS ASSIGNMENT AND ASSUMPTION OF LEASES (this “Assignment”) is made as of May
 _____,
2011 (the “Effective Date”), by and between LEXINGTON HOTEL, LLC, a Delaware limited
liability company, having an address c/o Highgate Holdings, Inc., 870 Seventh Avenue, 2nd Floor,
New York, New York 10019 (“Seller”), and [________________], a [___________], having
an address c/o DiamondRock Hospitality Company, 3 Bethesda Metro Center, Suite 1500, Bethesda,
Maryland 20814 (“Purchaser”)

R E C I T A L S :

A. Seller is the owner of certain property commonly known as “The Radisson Lexington Hotel”
New York located at 511 Lexington Avenue, New York, New York.

B. Seller and Purchaser have entered into that certain Purchase and Sale Agreement dated as of
May
 _____, 2011 (as amended, the “Purchase Agreement”), pursuant to which Seller has agreed to
sell and Purchaser has agreed to purchase the real property described in Exhibit A attached
thereto and the improvements located thereon, on the terms and conditions stated in the Purchase
Agreement. All terms not otherwise defined herein shall have the meaning assigned to them in the
Purchase Agreement.

C. Pursuant to the Purchase Agreement, Seller has agreed to assign to Purchaser all of
Seller’s right, title and interest to those certain leases described in Exhibit A attached
hereto (collectively, the “Leases”).

NOW, THEREFORE, Seller and Purchaser agree as follows:

A G R E E M E N T S :

1. Assignment. Seller hereby sells, assigns, transfers and conveys to Purchaser,
without recourse and without representation or warranty (except to the extent expressly provided in
the Purchase Agreement), all of Seller’s right, title and interest in and to the Leases.

2. Assumption. Purchaser hereby assumes the benefits of Seller and assumes and agrees
to be bound by all of the covenants, obligations, liabilities, and burdens of Seller under the
Leases that arise or accrue from and after the date of this Assignment. Seller shall remain liable
for its covenants, obligations, liabilities and burdens of Seller under the Leases to the extent
that they arose and were to be performed by Seller prior to the date of this Assignment.

3. Successors. This Assignment shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, legal representatives, successors and assigns.

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

 

Exhibit 13-1

 

5. Attorneys’ Fees. If any action or proceeding is commenced by either party to
enforce their rights under this Assignment or to collect damages as a result of the breach of any
of the provisions of this Assignment, the prevailing party in such action or proceeding, including,
without limitation, any bankruptcy, insolvency or appellate proceedings, shall be entitled to
recover all reasonable costs and expenses, including, without limitation, reasonable attorneys’
fees and court costs actually incurred, in addition to any other relief awarded by the court.

6. Counterparts. This Assignment may be executed in counterparts, each of which shall
be deemed an original, and both of which together shall constitute one and the same instrument.

[Signature Page Immediately Follows]

 

Exhibit 13-2

 

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

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	SELLER:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	LEXINGTON HOTEL, LLC, a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Lexington Hotel (Holdings), LLC, a Delaware
limited liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Lex Intermediate Mezz, LLC, a Delaware limited
liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	Lex Intermediate Mezz (Holdings), LLC,
a Delaware limited liability company,
its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	By:	 	Lex Sub Mezz (Holdings), LLC, a Delaware limited
liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	By:	 	WH/LEX, LLC, a Delaware limited
liability company, its managing member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 

Name:
	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	By:
	 	MERISTAR LEXINGTON PARTNERS, LLC, a Delaware limited liability company, its managing member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 

Name:
	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	Title:	 	 

[Signature Page Continues]

 

Exhibit 13-3

 

	 	 	 	 	 	 	 	 	 
	 	 	PURCHASER:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	                                        ,
	 	 
	 	 	a                                         	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 

 

Exhibit 13-4

 

EXHIBIT 14

REPLACEMENT MANAGEMENT AGREEMENT

(attached)

 

Exhibit 14-1

 

HOTEL MANAGEMENT AGREEMENT

between

DIAMONDROCK NY LEX TENANT, LLC

as Owner

and

HIGHGATE HOTELS, L.P.

as Manager

for

The Radisson Lexington Hotel, New York, New York

May      , 2011

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	ARTICLE I DEFINITIONS
	 	 	1	 
	 
	 	 	 	 
	ARTICLE II TERM
	 	 	16	 
	 
	 	 	 	 
	2.1. Initial Term
	 	 	16	 
	2.2. Extension Terms
	 	 	16	 
	 
	 	 	 	 
	ARTICLE III USE AND MANNER OF OPERATION OF THE HOTEL
	 	 	16	 
	 
	 	 	 	 
	3.1. Exclusivity
	 	 	16	 
	3.2. Standard of Care
	 	 	17	 
	3.3. Authority and Duties of Manager
	 	 	17	 
	3.4. Limitations on Manager’s Authority
	 	 	19	 
	3.5. Transactions with Affiliates
	 	 	19	 
	3.6. Permitted Uses
	 	 	19	 
	3.7. Employees
	 	 	20	 
	3.8. Legal Actions
	 	 	24	 
	3.9. Intellectual Property
	 	 	24	 
	3.10. Reservations
	 	 	24	 
	3.11. Discounts
	 	 	24	 
	3.12. Licenses and Permits
	 	 	25	 
	3.13. Centralized Services
	 	 	25	 
	3.14. Quiet Enjoyment
	 	 	25	 
	3.15. Permitted Encumbrances
	 	 	26	 
	3.16. Impositions
	 	 	26	 
	3.17. Material Contracts
	 	 	26	 
	3.18. Compliance with Applicable Laws
	 	 	26	 
	3.19. Environmental Matters
	 	 	26	 
	3.20. Prior Claims and Prior Conditions
	 	 	27	 
	3.21. Rebates
	 	 	27	 
	 
	 	 	 	 
	ARTICLE IV MANAGEMENT FEES
	 	 	27	 
	 
	 	 	 	 
	4.1. Base Management Fee
	 	 	27	 
	4.2. Calculation and Payment of Base Management Fee/Incentive Management Fee
	 	 	27	 
	4.3. Adjustments to Base Management Fee/Incentive Management Fee
	 	 	28	 
	4.4. Major Capital Management Fee
	 	 	28	 
	4.5. Centralized Services Fees
	 	 	28	 
	4.6. Accounting Fee
	 	 	28	 
	4.7 Owner’s Responsibility
	 	 	29	 

 

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TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	ARTICLE V ANNUAL BUDGETS
	 	 	29	 
	 
	 	 	 	 
	5.1. Annual Budget
	 	 	29	 
	5.2. Annual Budget Process
	 	 	30	 
	5.3. Carryover Annual Budget
	 	 	30	 
	5.4. Compliance with Annual Budget
	 	 	30	 
	5.5. Expense Variances
	 	 	31	 
	5.6. Uncontrollable Expenses
	 	 	31	 
	5.7. Emergency Expenditures
	 	 	31	 
	5.8. Compliance with Applicable Laws
	 	 	31	 
	 
	 	 	 	 
	ARTICLE VI BANK ACCOUNTS; PAYMENT OF OPERATING EXPENSES
	 	 	32	 
	 
	 	 	 	 
	6.1. Operating Account
	 	 	32	 
	6.2. Ownership of Accounts
	 	 	32	 
	6.3. Distributions to Owner
	 	 	32	 
	6.4. Exculpation of Manager
	 	 	33	 
	6.5. Reimbursement of Manager
	 	 	33	 
	6.6. Reserve Fund
	 	 	33	 
	6.7. Working Capital Funds
	 	 	34	 
	 
	 	 	 	 
	ARTICLE VII BOOKS AND RECORDS
	 	 	34	 
	 
	 	 	 	 
	7.1. Books of Account
	 	 	34	 
	7.2. Monthly Financial Information
	 	 	34	 
	7.3. Annual Financial Information
	 	 	34	 
	7.4. Location of Books and Records
	 	 	34	 
	7.5. Sarbanes Oxley
	 	 	35	 
	7.6. Other Reports and Information
	 	 	35	 
	 
	 	 	 	 
	ARTICLE VIII CAPITAL EXPENDITURES
	 	 	35	 
	 
	 	 	 	 
	8.1. Routine Capital Expenditures and Acquisitions of FF&E
	 	 	35	 
	8.2. Capital Expenditures
	 	 	36	 
	8.3. Additional Capital Expenditure Requirements
	 	 	36	 
	8.4. Capital Expenditure Fee
	 	 	36	 
	8.5. Technical Advice
	 	 	36	 
	8.5 Competitive Bidding
	 	 	37	 

 

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TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	ARTICLE IX INSURANCE
	 	 	37	 
	 
	 	 	 	 
	9.1. Insurance Coverage
	 	 	37	 
	9.2. Insurance Policies
	 	 	38	 
	9.3. Manager’s Blanket Insurance Coverage
	 	 	38	 
	9.4. Notice of Claims
	 	 	39	 
	9.5. Settlement of Claims
	 	 	39	 
	9.6. Occurrence Basis
	 	 	39	 
	9.7. Waiver of Subrogation
	 	 	39	 
	 
	 	 	 	 
	ARTICLE X DAMAGE OR DESTRUCTION AND CONDEMNATION
	 	 	39	 
	 
	 	 	 	 
	10.1. Partial Destruction
	 	 	39	 
	10.2. Complete Destruction
	 	 	40	 
	10.3. Condemnation
	 	 	40	 
	10.4. Reinstatement
	 	 	40	 
	10.5 Operating Expenses Following Casualty
	 	 	41	 
	 
	 	 	 	 
	ARTICLE XI REPRESENTATIONS AND WARRANTIES OF OWNER AND MANAGER
	 	 	41	 
	 
	 	 	 	 
	11.1. By Owner
	 	 	41	 
	11.2. By Manager
	 	 	42	 
	 
	 	 	 	 
	ARTICLE XII TRANSFERS
	 	 	42	 
	 
	 	 	 	 
	12.1. Restrictions on Transfers
	 	 	42	 
	12.2 Transfers by Owner
	 	 	43	 
	12.3. Collateral Assignments by Owner
	 	 	43	 
	 
	 	 	 	 
	ARTICLE XIII EVENTS OF DEFAULT AND TERMINATION
	 	 	44	 
	 
	 	 	 	 
	13.1. Events of Default
	 	 	44	 
	13.2. Notice of Termination
	 	 	45	 
	13.3. No Waiver
	 	 	45	 
	13.4. Termination by Owner
	 	 	45	 
	13.5. Obligations Upon Termination
	 	 	47	 
	13.6. Transition Upon Termination
	 	 	47	 
	13.7. Termination Liability
	 	 	49	 
	 
	 	 	 	 
	ARTICLE XIV RIGHT OF FIRST NEGOTIATION
	 	 	49	 

 

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TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	ARTICLE XV INDEMNIFICATION
	 	 	50	 
	 
	 	 	 	 
	15.1. Indemnification by Manager
	 	 	50	 
	15.2. Indemnification by Owner
	 	 	50	 
	15.3. Indemnification Process
	 	 	50	 
	15.4. Survival
	 	 	50	 
	 
	 	 	 	 
	ARTICLE XVI NOTICES
	 	 	51	 
	 
	 	 	 	 
	ARTICLE XVII MISCELLANEOUS
	 	 	52	 
	 
	 	 	 	 
	17.1. Relationship of Parties
	 	 	52	 
	17.2. Intentionally Omitted
	 	 	52	 
	17.3. No Waiver
	 	 	52	 
	17.4. Successors and Assigns
	 	 	52	 
	17.5. Time of the Essence
	 	 	52	 
	17.6. Governing Law
	 	 	52	 
	17.7. Partial Invalidity
	 	 	52	 
	17.8. Interpretation
	 	 	52	 
	17.9. Entire Agreement
	 	 	53	 
	17.10. Inspection by Owner or Lender
	 	 	53	 
	17.11. Counterparts/Facsimiles
	 	 	53	 
	17.12. Force Majeure Events
	 	 	53	 
	17.13. WAIVER OF JURY TRIAL CERTAIN DAMAGES
	 	 	53	 
	17.14. ARBITRATION
	 	 	54	 
	17.15. Expert Resolution
	 	 	54	 
	17.16. Interest
	 	 	55	 
	17.17. Confidentiality
	 	 	55	 
	17.18. Approvals and Recommendations
	 	 	56	 
	17.19. LIMITATION ON FIDUCIARY DUTIES
	 	 	56	 
	17.20. Further Assurances
	 	 	58	 
	17.21. Amendments
	 	 	59	 
	17.22. Owner’s and Manager’s Limited Liability
	 	 	59	 
	17.23. Estoppel Certificate
	 	 	59	 
	17.24. REIT Compliance
	 	 	59	 
	17.25 Owner Agreement
	 	 	60	 

	 

	Exhibits and Schedules

	 	 	 	 	 
	Exhibit A — Legal Description of Property
	 	 	 	 
	 
	 	 	 	 
	Exhibit B — Owner Agreement
	 	 	 	 
	 
	 	 	 	 
	Exhibit C — Insurance Coverages and Limits
	 	 	 	 
	 
	 	 	 	 
	Schedule 1 — Centralized Services
	 	 	 	 
	 
	 	 	 	 
	Schedule 2 — Permitted Encumbrances
	 	 	 	 

 

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HOTEL MANAGEMENT AGREEMENT

THIS HOTEL MANAGEMENT AGREEMENT (this “Agreement”) is made and entered into as of May
     , 2011 (the “Effective Date”), by and between DIAMONDROCK NY LEX TENANT, LLC, a Delaware
limited liability company (“Owner”), and HIGHGATE HOTELS, L.P., a Delaware limited
partnership (“Manager”). Owner and Manager are individually referred to herein as a
“Party” and collectively as the “Parties.”

A. DiamondRock NY Lex Owner, LLC (“Fee Owner”) is the purchaser under that certain Purchase
and Sale Agreement dated as of even date herewith (the “Purchase Agreement”), pursuant to
which Fee Owner or its designee has agreed to acquire the hotel commonly known as the Radisson
Lexington (the “Property”) located at 511 Lexington Avenue at 48th Street, New York, NY.
The Property includes (i) 712 rentable guestrooms; (ii) FF&E; (iii) food and beverage facilities,
and (iv) other supporting facilities (collectively, the “Hotel”). The legal description of the
Property is set forth in Exhibit A attached hereto.

B. Owner and Fee Owner are parties to that certain Lease Agreement, dated as of even date
herewith (the “Operating Lease”), pursuant to which Landlord leases to Owner, and Owner leases from
Landlord, the Hotel.

C. Manager is qualified and experienced in the supervision, operation and management of
hotels, and Owner, in reliance thereon, desires to retain Manager to operate and manage the Hotel
and to perform certain other functions, in each case subject to the terms and conditions of this
Agreement and the Franchise Agreement.

NOW, THEREFORE, for and in consideration of the mutual covenants, conditions, stipulations,
agreements and obligations hereinafter set forth and other good and valuable consideration, the
receipt whereof and sufficiency of which being hereby acknowledged by the Parties, the Parties
agree as follows:

ARTICLE I

DEFINITIONS

All capitalized terms used in this Agreement which are not otherwise defined shall have the
meanings assigned to such terms in this Article I.

1.1 Accounting Fee shall have the meaning given to such term in Section 4.6.

1.2 ADA shall mean the Americans with Disabilities Act (42 USC 12181 et seq.) or any
equivalent state or local law or ordinance.

1.3 Affiliate shall mean, with respect to any Person, (i) another Person, directly or
indirectly, through one or more intermediaries, Controlling, Controlled by, or under common Control
with the Person in question, including, without limitation, any partner, member, shareholder,
officer or director of such Person, as the case may be, and (ii) with respect to any Person who is
an individual, such individual’s parents, spouse, direct lineal or adoptive
descendants, siblings, nieces, nephews and/or first cousins and/or one or more trusts created
solely for the benefit of such individual or any such family members.

 

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1.4 Annual Budget shall have the meaning given to such term in Section 5.1. For
purposes of this Agreement, references to Annual Budget (other than the Annual Budget proposed by
Manager pursuant to the process set forth in Section 5.1) shall mean the Annual Budget approved by
Owner in writing for the applicable Contract Year.

1.5 Applicable Law(s) shall mean all laws, statutes, regulations, codes, bylaws,
ordinances, treaties, orders, judgments, decrees, directives, rules, guidelines, policies and other
requirements of any Governmental Authority having jurisdiction, including, without limitation, the
Environmental Laws and the ADA.

1.6 Baggage shall have the meaning given to such term in Section 13.6(i).

1.7 Bankruptcy/Dissolution Event shall mean, with respect to a Person, the
commencement or occurrence of any of the following with respect to such Person: (i) a case under
Title 11 of the U.S. Code, as now constituted or hereafter amended, or under any other applicable
federal or state bankruptcy law or other similar law; (ii) the appointment of (or a proceeding to
appoint) a trustee or receiver of such Person or of any substantial part of the property interest
of such Person (iii) an attachment, execution or other judicial seizure of (or a proceeding to
attach, execute or seize) a substantial property interest of such Person or such Person shall file
an answer admitting the material allegations of a petition filed against such Person in any
bankruptcy, reorganization or insolvency proceeding; (iv) a general assignment for the benefit of
creditors of such Person; or (v) insolvency, dissolution or liquidation of such Person; provided,
however, that an event described in clause (i), (ii) or (iii) shall not be included if the same is
(a) involuntary and not at any time consented to by such Person, (b) contested within thirty (30)
days of commencement and thereafter diligently and continuously contested by such Person, and (c)
dismissed or set aside, as the case may be, within sixty (60) days of commencement.

1.8 Base Management Fee shall have the meaning given to such term in Section 4.1.

1.9 Business Day shall mean a day, other than a Saturday, Sunday or statutory holiday,
on which banks are open for the transaction of business in both the City of New York, New York and
the City of Dallas, Texas.

1.10 Capital Expenditures shall mean all hard and soft costs associated with any
repairs, alterations, improvements, renewals and replacements to the Property which are normally
capitalized under GAAP.

1.11 Centralized Services shall mean the services provided to the Hotel by Manager and
its Home Office Employees through Manager’s corporate headquarters in accordance with Section 3.13.
The Centralized Services in effect as of the Commencement Date are listed on Schedule 1
attached hereto.

 

2

 

1.12 Centralized Services Fees shall have the meaning given such term in Section 4.5.

1.13 CPI shall mean the Consumer Price Index-All Urban Consumers (CPI-U)/All Items,
Not Seasonably Adjusted, 1982-84=100, for the market area that includes the Hotel, as published by
the United States Department of Labor Statistics, for the applicable comparison period. If the CPI
shall cease to use 1982-84 as the base year, the CPI shall be converted in accordance with the
conversion factor, if any, published by the United States Department of Labor, Bureau of Labor
Statistics. If the CPI is discontinued or revised during the Term, such other governmental index
or computation, if any, with which it is replaced shall be used. If no conversion factor is
supplied by the United States Department of Labor, Bureau of Statistics, either for a new base year
or a new index, the Parties shall reasonably agree upon a replacement for the CPI.

1.14 Commencement Date shall mean the date Owner obtains title to the Hotel.

1.15 Competitive Set shall mean the five (5) hotels within the Hotel’s market area
that are most closely comparable to the Hotel in quality, price and market (with due consideration
given to age, quality, size, location, amenities, amount of meeting space and business mix). As of
the Commencement Date, the Competitive Set is: (i) Marriott New York East Side; (ii) Doubletree
Metropolitan New York; (iii)T he Roosevelt Hotel; (iv) Hilton Manhattan East; and (v) Courtyard New
York Manhattan Midtown East. If Manager or Owner determines that change in the Competitive Set is
warranted, based on the commencement of operations of one or more new comparable hotels in the
Hotel’s market area or on any cessation of operations or significant change in operations (such as
a change in manager or a change in market positioning) of any of the Competitive Set, Manager or
Owner, as the case may be, shall notify the other party in writing of such request. In the event
that the Parties have not reached agreement on such change within thirty (30) days after the notice
of such request has been given, such dispute shall be submitted to an Expert as provided in Section
17.15 for determination in accordance with the standards outlined in the initial sentence of this
definition.

1.16 Complete Destruction shall mean the destruction of or damage to the Hotel
resulting from fire, casualty or any other cause whereby the destruction of or damage to the Hotel
is such that the Replacement Value reasonably estimated by Owner is greater than $7,500,000.

1.17 Contract Year shall mean the calendar year except that (i) the First Contract
Year shall begin on the Commencement Date and end on December 31, 2011 and (ii) if this Agreement
expires or otherwise terminates on any day other than December 31 of any given calendar year, the
last Contract Year shall terminate on the date of such expiration or sooner termination.

1.18 Controlling, Controlled and Control shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of management and policies of a Person,
whether through ownership of voting securities or a partnership or membership interest, by contract
or otherwise.

 

3

 

1.19 Debt Service shall have the meaning given to such term in Section 4.2(a).

1.20 Defaulting Party shall have the meaning given to such term in Section 13.1(a).

1.21 Distribution Amount shall have the meaning given to such term in Section 6.3.

1.22 Effective Date shall mean the date set forth in the first paragraph of this
Agreement.

1.23 Emergency Fund shall have the meaning given such term in Section 5.7.

1.24 Environmental Laws shall mean applicable federal, state, local and foreign laws
and regulations relating to the pollution of the environment (including, without limitation,
ambient air, surface water, ground water, land surface or subsurface strata), including laws and
regulations relating to emissions, discharges, releases or threatened releases of Hazardous
Materials or otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials. Environmental Laws shall include,
without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of
1980, the Federal Insecticide, Fungicide, and Rodenticide Act, the Resource Conservation and
Recovery Act, the Toxic Substances Control Act, and the Superfund Amendments and Reauthorization
Act of 1986, all as amended from time to time.

1.25 ERISA shall have the meaning given to such term in Section 3.7(f).

1.26 Event of Default shall have the meaning given to such term in Section 13.1.

1.27 Expert shall mean a third party individual selected pursuant to Section 17.15
having not less than ten (10) years’ experience in the hospitality industry; (b) not having had
any direct relationship with either party in the preceding twenty-four (24) months, except to the
extent disclosed and accepted by the other party; (c) having demonstrated knowledge of the hotel
market in which the Hotel is located; and (d) having demonstrated knowledge of the operation and
marketing of hotels in the Hotel’s market segment.

1.28 Extension Term(s) shall have the meaning given to such term in Section 2.2

1.29 External Audit Fee shall have the meaning given to such term in Section 7.3.

1.30 Fee Owner shall have the meaning given to such term in Section 12.2.

 

4

 

1.31 FF&E shall mean all furniture, furnishings, fixtures and equipment required for
the proper and efficient operation of the Hotel, including, without limitation, lobby furniture,
carpeting and floor coverings, draperies, wall coverings, artwork, bedspreads, television sets,
radios, office furniture and equipment such as safes, cash registers and
accounting, computer, duplicating and communication equipment, telephone equipment, guest room
furniture, specialized hotel equipment such as equipment required for the operation of kitchens,
laundries, the front desk, dry cleaning facilities, bars and cocktail lounges and decorative
lighting, material handling equipment and cleaning and engineering equipment and all other
furniture, furnishings, fixtures, equipment, apparatus and personal property needed for such
purposes or for the operation of the Hotel.

1.32 Fixed Charges shall mean (i) Replacement Reserves; (ii) Impositions; (iii)
premiums for insurance coverage set forth on Exhibit C, or such other insurance as the parties deem
necessary or desirable for the Hotel.

1.33 Force Majeure Event shall mean any one or more of the following events or
circumstances that, alone or in combination, materially and adversely affects the operation of the
Hotel: fire, earthquake, storm or other casualty; strikes, lockouts, or other labor interruptions;
war, rebellion, riots, acts of terrorism, or other civil unrest or commotion; shortage of critical
materials or supplies; action or inaction of governmental authorities having jurisdiction over the
Hotel; or any other similar event beyond the reasonable control of Owner or Manager; provided,
however, that general economic conditions, including, without limitation, a recession or a decline
in tourism in the New York City area, which are not the result of any of the above events, shall
not constitute a Force Majeure Event.

1.34 Franchise Agreement shall mean any franchise or license agreement under which the
Hotel is branded and operated, and any and all documents delivered pursuant thereto, as the same
may be modified, amended, restated, supplemented, substituted and/or replaced from time to time in
accordance with the terms hereof and thereof. Owner and Manager anticipate that Owner will enter
into a Franchise Agreement with Radisson Hotels International, Inc. to brand the Hotel as a
Radisson.

1.35 Franchisor shall mean the entity that owns a hotel brand and licenses such brand
pursuant to the Franchise Agreement, and its successors and assigns. Owner and Manager anticipate
that the Franchisor initially will be Radisson Hotels International, Inc.

1.36 GAAP shall mean generally accepted accounting principles, as consistently applied
for the Hotel and as interpreted by the Uniform System. Except as expressly provided otherwise,
any financial or accounting terms not otherwise defined herein shall be construed and applied
according to GAAP, as interpreted by the Uniform System.

1.37 Governmental Authority shall mean any governmental authority or any subdivision
thereof, whether national, federal, provincial, regional, state, county, municipal, local or other,
and any ministry, department, agency, entity or other body exercising executive, legislative,
regulatory or administrative functions of government, including, without limitation, any board of
fire underwriters or any other body which may exercise similar functions.

 

5

 

1.38 Gross Revenue shall mean (when used with respect to any period) all operating
revenue received or accrued, directly or indirectly, from the operation of the Hotel (or any
portion thereof) attributable to such period, calculated on an accrual basis and determined in
accordance with the Uniform System and GAAP; provided that Gross Revenue shall include
without limitation the following:

(a) revenues from rentals of guest rooms and suites;

(b) revenues from the sale of food, liquor, soft drinks or other beverages;

(c) revenues from the sale of all meeting and catering services, meeting areas and other hotel
facilities;

(d) revenues from sales of cigars, cigarettes, candy, merchandise and any and all other goods,
services or merchandise;

(e) revenues from charges for closed-circuit television or other audio-visual services;

(f) revenues from charges for internet service and in room television and movies;

(g) revenues derived in connection with the operation of any vending machines located in the
Hotel, but including only revenues payable to Manager on behalf of Owner (rather than the gross
revenues of such vending machines);

(h) rents from any tenant, subtenant, concessionaire (including without limitation, any
concierge service), licensee or other Person, but only to the extent of the amounts payable to
Owner or to Manager on behalf of Owner (rather than gross revenues of such tenants, subtenants,
concessionaire, licensee or other Person); and

(i) Proceeds from business interruption insurance.

Gross Revenue shall not include (i) proceeds from the sale, financing or refinancing of the
Property (or any portion thereof) or of capital assets or FF&E (other than sales of Inventories in
the ordinary course of business), (ii) condemnation awards, proceeds from sales in lieu of
condemnation, casualty insurance proceeds and similar extraordinary receipts (other than business
interruption proceeds and any other portion of such awards or receipts representing compensation
for loss of items of Gross Revenue), (iii) the initial operating funds contributed by Owner and any
Working Capital Amount contributed by Owner, (iv) any funds provided by Owner to Manager whether
for Operating Expenses, Capital Expenditures, Fixed Charges, Owner’s Expense or otherwise, (v)
common area maintenance reimbursements, (vi) other income or proceeds resulting other than from the
use or occupancy of the Property, or any part thereof, or other than from the sale of goods,
service or other items sold on or provided from the Property in the ordinary course of business,
(vii) any gratuities received by Hotel Employees or received by Owner or Manager at the Hotel which
are subsequently paid out to Hotel Employees, (viii) any excise, sales, value added, use or
occupancy taxes or similar government charges which are collected directly from patrons or guests,
or as a part of the sales price of any goods, services or displays, such as gross receipts,
admission, cabaret or similar or equivalent taxes, (ix)
proceeds from property tax abatements or refunds, (x) interest earned on any Replacement
Reserves and (xi) the value of complimentary or discounted rooms, for food and beverage.

 

6

 

1.39 Guarantor(s) shall have the meaning given to such term in the “Limited Guaranty”
provision set forth on the signature pages hereto.

1.40 Hazardous Materials shall mean all chemicals, pollutants, contaminants, wastes
and toxic substances, including, without limitation (i) “solid or hazardous wastes”, “hazardous
substances,” “toxic substances,” or “insecticides,” “fungicides,” or “rodenticides,” in each case
as defined in any Environmental Law, and (ii) gasoline or any other petroleum product or byproduct,
polychlorinated biphenyl, asbestos and urea formaldehyde.

1.41 Home Office Employees shall mean certain employees of Manager or its Affiliates
who are engaged by and through the corporate headquarters of Manager and not working directly at
the Hotel.

1.42 Home Office Senior Management shall mean Home Office Employees at the level of
vice-president or higher.

1.43 Hotel shall have the meaning given to such term in Recital A.

1.44 Hotel Guest Data shall mean any guest profiles, contact information, histories,
preferences and other guest information obtained in the ordinary course of business from guests of
the Hotel during such guests’ stay at the Hotel or during such guests’ use of the facilities
associated with the Hotel.

1.45 Hotel Employees shall mean all individuals who perform services in the name of
the Hotel at the Hotel (including without limitation Senior Managers) or who perform services for
the Hotel and for other Managed Hotels which employees shall be employed by Manager or an Affiliate
of Manager. Hotel Employees shall not include Home Office Employees.

1.46 Implied Fiduciary Duties shall have the meaning given to such term in Section
17.18.

1.47 Impositions shall mean all real estate and personal property taxes and similar
levies, assessments, special assessments and charges on or relating to the Hotel or the Property.

1.48 Incentive Management Fee shall have the meaning given to such term in Section
4.1.

1.49 Inventory shall mean Inventory of Supplies as defined in the Uniform System,
including soap, stationery goods and merchandise to be sold on behalf of Owner in the ordinary
course of business in any gift shop or food and beverage outlet operated within the Hotel,
including without limitation, food and beverages, cigars, cigarettes, candy and all other goods,
wares, merchandise and property sold in or from the Hotel or in such manner that the amounts
received therefor are included in Gross Revenue.

 

7

 

1.50 Lender shall mean any lender providing financing to Owner or an Affiliate of
Owner which is secured in whole or in part by a Mortgage.

1.51 Major Capital Management Fee shall have the meaning given to such term in Section
4.4.

1.52 Managed Hotels shall mean all hotels and resorts in the United States that are
managed or owned by Manager or its Affiliates.

1.53 Management Fees shall mean, collectively, the Base Management Fee, the Incentive
Management Fee, the Accounting Fee and the Major Capital Management Fee.

1.54 Manager shall have the meaning given it in the first paragraph of this Agreement
and shall include its permitted successors and assigns

1.55 Manager Guest Records shall mean all guest profiles, contact information, guest
histories, guest preferences and other guest information in the customer database of Manager or its
Affiliates which are maintained, obtained or derived by Manager or its Affiliates, from (i) guests
of any hotel or similar facility (other than the Hotel) which Manager or its Affiliates own, lease,
license, manage or franchise, including the Managed Hotels, (ii) Manager’s sales and reservation
operations, if any, for such hotels, (iii) Manager’s websites (other than the Hotel’s website),
(iv) Manager’s frequent guest or rewards programs, if any, and (v) any other sources or databases
maintained by Manager or its Affiliates at a system-wide level (as opposed to sources or databases
maintained at the Hotel) but excluding from such sources or databases information obtained at or
from the Hotel and uploaded into such sources and databases. For the purposes of this definition,
“guest” shall include customers of any hotels or similar facilities owned, leased, operated, or
franchised by Manager or its Affiliates (including Managed Hotels other than the Hotel), and any
customers of any of the facilities associated with such hotels (e.g. restaurants, golf courses,
spas, etc.). In no event shall any Hotel Guest Data be included in Manager Guest Records.

1.56 Manager Marks shall mean (i) the principal registration marks “Highgate Hotels”
and all derivatives thereof, (ii) any rights to the name “Highgate Hotels” or any derivatives
thereof, in each case, including all rights, trademarks, trademark registrations, trademark
applications, copyrights, copyright registrations and copyright applications using or including
such names, and all other service marks, trademarks, trade names, insignias and logos used for
hotel services, for other related goods and services and for the hotel business associated
therewith that contain the “Highgate” name and (iii) any other principal registration marks and
derivatives thereof and all rights, trademarks, trademark registrations, trademark applications,
copyrights, copyright registrations and copyright applications using or including such names, and
all other service marks, trademarks, trade names, insignias and logos used for hotel services, for
other related goods and services and for the hotel business associated therewith that contain any
name of any service or business provided by Manager,

 

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1.57 Manager Proprietary Information shall mean, collectively, (i) the Manager Marks,
(ii) the Manager Guest Records, and (iii) all trade secrets and other information, materials and
copyrightable or patentable subject matter of a proprietary nature that are developed,
acquired or licensed by Manager or any of its Affiliates for use in the operation of the
Managed Hotels and that contain or describe Manager’s internal policies, procedures and standards.
Manager Proprietary Information shall not include any Hotel Guest Data or any information relating
to the employment history, training, performance, discipline, compensation, benefits or contact
data for the Hotel Employees.

1.58 Manager’s Grossly Negligent or Willful Acts shall mean any gross negligence,
willful misconduct, or fraud committed by the Home Office Senior Management or any Senior Manager
in the performance of Manager’s duties under this Agreement. The acts or omissions (including
grossly negligent, knowingly willful misconduct or fraudulent acts or omissions) of Hotel Employees
(other than the Senior Managers) shall not be imputed to Manager or the Home Office Senior
Management or be deemed to constitute Manager’s Grossly Negligent or Willful Acts, unless such acts
or omissions resulted directly from the gross negligence, willful misconduct or fraud, of the Home
Office Senior Management or Senior Manager in supervising such Hotel Employees.

1.59 Mandatory Balance shall have the meaning given to such term in Section 6.3.

1.60 Marketing Plan shall mean the annual marketing plan prepared by Manager and
submitted to Owner as part of the Annual Budget, which Marketing Plan shall include marketing,
advertising, promotion, sales, public relations, publicity and related activities conducted for the
purpose of promoting the name and business of the Hotel and a competitive market analysis for the
Hotel.

1.61 Material Contract shall mean (i) any contract for goods or services that is
reasonably expected to result in an Operating Expense for any given Contract Year in excess of
$100,000, and (ii) any contract or agreement (including without limitation, leases, licenses or
other occupancy agreements for use of space at the Hotel) that is for a term in excess of one (1)
year and is not terminable by Owner or Manager on thirty (30) days notice. Material Contract shall
not include any contract or other agreement relating to Utilities.

1.62 MEPPA shall have the meaning given to such term in Section 3.7(f).

1.63 Mortgage shall mean, collectively, each of the documents evidencing or securing
the indebtedness on the Property in favor of Lender and shall include any documents evidencing or
securing mezzanine financing secured by a pledge of the direct or indirect ownership interests in
Owner

1.64 Net Operating Income shall mean Gross Revenue minus Operating Expenses, Base
Management Fees, Accounting Fee, and Fixed Charges.

1.65 Non-Defaulting Party shall have the meaning given to such term in Section
13.1(a).

1.66 Offering Notice shall have the meaning given to such term in Section 14.2.

 

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1.67 Operating Account shall have the meaning given to such term in Section 6.1.

1.68 Operating Expenses shall mean (when used with respect to any period) all
operating costs and expenses of the Property and the Hotel, determined in accordance with the
Uniform System and GAAP, including, without limitation, the following:

(a) the cost of wages, salaries, incentives and bonuses, payroll taxes, social security taxes
and other necessary employee costs, fringe benefits and other usual and customary incidental
employee benefits paid to or for Hotel Employees, including, without limitation, pension, profit
sharing or other employee retirement, disability, health and welfare or other benefit plans or
insurance provisions, including without limitation workers compensation insurance (excluding such
employment costs of Home Office Employees, except as provided in Section 3.7(d));

(b) the cost of any goods and merchandise sold on behalf of Owner in the ordinary course of
business in any gift shop or food and beverage outlet operated within the Hotel, including without
limitation, food and beverages, cigars, cigarettes, candy and all other goods, wares, merchandise
and property sold in or from the Hotel or in such manner that the amounts received therefor are
included in Gross Revenue.

(c) the cost of Operating Supplies;

(d) the cost for repairs to FF&E and the Property as permitted or required under Article VIII;

(e) the cost of Utilities;

(f) the cost of goods and services necessary or advisable in connection with the operation of
the Hotel, including, without limitation, extermination, vending, security, cleaning, laundry,
landscaping, maintenance, trash collection and other similar services;

(g) advertising, promotion, publicity, revenue management and public relations expenses in
accordance with the Marketing Plan;

(h) the Out-of-Pocket Expenses and Travel Expenses;

(i) the reasonable relocation costs (for moving company, air fare and meals during relocation)
incurred in connection with the relocation of Senior Managers to and from employment at the Hotel;
provided that relocation costs for no more than two relocations per year may be included in
Operating Expenses; and

(j) the franchise fees and other amounts payable by Owner under the Franchise Agreement;

 

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Operating Expenses shall not include (i) depreciation and amortization except as otherwise
provided in this Agreement, (ii) the cost of any other things specified herein to be done or
provided at Owner’s or Manager’s sole expense, (iii) Debt Service, (iv) Capital Expenditures,
(v) any excise, sales, value added, use or occupancy taxes or similar government charges which
are collected directly from patrons or guests, or as a part of the sales price of any goods,
services or displays, such as gross receipts, admission, cabaret or similar or equivalent taxes,
(vi) those expenses, if any, specified in the immediately preceding paragraphs which are not
usually and customarily considered operating expenses of hotel properties under customary hotel
accounting practices, GAAP and the Uniform System, (vii) the Management Fees; (viii) Fixed Charges,
(ix)Owner Expenses; and (x) any costs and expenses incurred by Manager or its Affiliates (including
Home Office Employees) at its corporate or regional headquarters (including the costs and expenses
of Home Office Employees), except to the extent such costs and expenses are expressly included as
an Operating Expense pursuant to Sections 3.7(d) or 3.13.

1.69 Operating Lease shall have the meaning given to such term in Section Recital B.

1.70 Operating Standard shall mean the standard required by the franchise agreement
and brand standards manual promulgated by Radisson Hotels International (or its successor) for the
Radisson brand or such other standard promulgated by another franchisor determined by Owner to be
the franchisor for the Hotel.

1.71 Operating Supplies shall mean all blankets, linens, uniforms, glassware,
silverware, china, crockery and other items of a similar nature necessary for the operation of the
Hotel, all such items being of a class or grade corresponding with the Operating Standard.

1.72 Out-of-Pocket Expenses shall mean the actual and reasonable out-of-pocket
expenses of Manager and its Affiliates (without any mark up or profit to Manager or its Affiliates)
incurred for the account of or in connection with the Hotel’s operation, including, without
limitation, document reproduction, printing, promotional materials, postage, courier services,
computer system charges, long-distance telephone calls, facsimiles and similar expenses, and
reasonable entertainment expenses, in each case to the extent incurred in accordance with the terms
of this Agreement and the Annual Budget. Out-of-Pocket Expenses shall not include Manager’s or
Manager’s Affiliates’ corporate and regional office expenses or overhead.

1.73 Owner shall have the meaning given to such term in the first paragraph of this
Agreement and shall include its permitted successors and assigns

1.74 Owner’s Expense shall mean the External Audit Fee.

1.75 Owner’s Priority shall mean with respect to each Contract year during the Term
(prorated for any partial year) an amount equal to eight percent (8%) of Owner’s Total Investment.

1.76 Owner’s Total Investment shall mean shall mean the sum of (i) Owner’s or Fee
Owner’s total investment to acquire the Hotel, including the purchase price paid by Owner or Fee
Owner, due diligence and closing costs, and costs necessary to complete the initial Franchisor
product improvement plan plus (ii) Capital Expenditures funded by Owner plus (iii) working capital
funded by Owner to cover Operating Expenses. Owner and Manager will finalize and agree upon the
dollar amount of Owner’s total investment to acquire the Hotel as
soon as practicable following the Commencement Date. Any cash distributed to Owner by Manager
in excess of Owner’s Priority in any Contract Year shall be deemed to be a return of working
capital funded by Owner, thereby reducing Owner’s Total Investment, but only up to the amount of
working capital funded by Owner and for which Owner’s Total Investment was increased as provided in
clause (iii) above.

 

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1.77 Partial Destruction shall mean any destruction of or damage to the Hotel by fire,
casualty or any other cause that does not constitute a Complete Destruction.

1.78 Performance Test shall have the meaning given to such term in Section 13.4(b).

1.79 Permitted Encumbrances shall mean those matters set forth on Schedule 2 attached
hereto, together with Mortgages permitted under Section 12.2 and any other encumbrances existing
from time to time which do not materially and adversely affect the operation of the Hotel or
Manager’s exclusive right to manage and operate the Hotel during the Term.

1.80 Person shall mean any individual, firm, corporation, partnership, limited
liability company, joint stock company, business trust, voluntary association or government or any
department or agency thereof.

1.81 Prime Rate shall mean, on any day, the base rate of interest per annum
established from time to time by CitiBank, New York, New York, or its successors, if any, and
designated as its prime rate as in effect on such day.

1.82 Prior Claims shall mean any claims relating to the Hotel which have accrued as of
the Commencement Date, whether or not such Prior Claims are asserted, pending or known or unknown
as of the Commencement Date, including, without limitation, (i) any claims relating to violation or
alleged violation of Applicable Laws, (ii) any claims relating to construction, land use or
operating permits or licenses relating to the Hotel, (iii) any claims for breach of contract or
tort, (iv) any claims relating to the liquor licensee or the liquor license for the Hotel, and (v)
all other claims, lawsuits, actions (administrative or judicial) or unasserted claims arising out
of the operation of the Hotel or the ownership of the Property prior to the Commencement Date.

1.83 Prior Conditions shall mean, whether or not such Prior Conditions are known or
unknown as of the Commencement Date, all conditions in existence at the Property and the Hotel as
of the Commencement Date, including, without limitation, (i) any defects in design, construction or
installation of the Hotel, (ii) any conditions representing violations of Applicable Laws or
presenting health, safety or privacy risks, including water intrusion and related air quality risks
and data security breach risks, (iii) the state of repair or completion of the Hotel as of the
Commencement Date, and (iv) the state and condition of all books and records for the Hotel Owner.

1.84 Property shall have the meaning given to such term in Recital A, and shall
include, without limitation, all portions thereof, external and internal, including, without
limitation, sidewalks, signs, mechanical, electrical and other systems, parking lots and
landscaping.

 

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1.85 Property Documents shall mean, collectively, this Agreement and the Franchise
Agreement, as the same may be modified, amended, restated, substituted and/or supplemented from
time to time in accordance with their respective terms, together with any and all documents
delivered pursuant thereto.

1.86 Qualified Transferee shall mean a Person who is not directly or indirectly (i) a
Person convicted of an indictable offense, (ii) a Person any of whose owners or officers,
directors, or executive employees or officers, directors or executive employees of such owners are
named as a “Specially Designated National and Blocked Persons” as designated by the United States
Department of the Treasury’s Office of Foreign Assets control (a listing of which is currently
published under the internet website address www.ustres.gov/terrorism.html), or (iii) a Person or
nation designated in Presidential Executive Order 13224 as a Person or Nation who commits,
threatens to commit, or supports terrorism.

1.87 Rejection Limit shall have the meaning given to such term in Section 3.7(b).

1.88 Renovations shall mean any Capital Expenditures that are not Routine Capital
Expenditures and shall consist of Capital Expenditures for major repairs, alterations,
improvements, renewals and additions to the Hotel, including without limitation, to the structure,
exterior façade and the mechanical, electrical, heating, ventilating, air conditioning, plumbing or
vertical transportation elements of the Hotel building, and shall include any property improvement
plan required by any Franchisor. .

1.89 Renovations Budget shall mean the budget prepared by Manager setting forth the
estimated cost and expenses of Owner for any Renovations, in such detail as Owner shall reasonably
require. The Renovations Budget shall be part of the Annual Budget.

1.90 Replacement Value shall mean the cost of repairing, rebuilding or replacing the
Hotel or any portion thereof with materials and construction of like kind and quality on the same
site without deduction for physical, accounting or any other depreciation.

1.91 Replacement Reserves shall have the meaning given to such term in Section 6.6.

1.92 Reserve Fund shall have the meaning given to such term in Section 6.6.

1.93 Restore or Restoration shall have the meaning given to such terms in Section
10.1.

1.94 REVPAR shall mean, with respect to the Hotel and to each hotel that is a member
of the Competitive Set, the “Revenue Per Available Room” for the hotel for the Contract Year in
question, as defined in the Uniform System and as measured and reported in the STAR Report or, if
Smith Travel Research shall cease to publish such data in a form usable by the Parties for purposes
of this Agreement, as measured and reported by such other reputable
independent third party market research firm as may be mutually and reasonably approved by
Owner and Manager.

 

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1.95 REVPAR Failure shall mean, with respect to the any Contract Year, the Hotel’s
failure to achieve a REVPAR Index for such Contract Year equal to or in excess of eighty-seven and
five-tenths percent percent (87.5%).

1.96 REVPAR Index shall mean the ratio, expressed as a percentage, of the Hotel’s
REVPAR for any Contract Year of the REVPAR achieved at each of the hotels in the Competitive Set
for such Contract Year.

1.97 Routine Capital Expenditures shall mean routine, non-major Capital Expenditures
to be funded from the FF&E Reserve pursuant to Section 8.1, rather than pursuant to Section 8.2.
Routine Capital Expenditures include the following types of Capital Expenditures: exterior and
interior repainting, resurfacing building walls and floors, replacing folding walls; replacement of
items of FF&E due to obsolescence or wear and tear; and similar expenditures.

1.98 Senior Managers shall mean, collectively, the General Manager, the Controller,
and Sales and Marketing Director of the Hotel or the individuals serving in such capacities
regardless of title.

1.99 Shortfall shall mean, with respect to any Contract Year, the amount, if any, by
which Net Operating Income for such Contract Year fails to equal or exceed nine percent (9%) of
Owner’s Total Investment for such Contract Year.

1.100 Term shall have the meaning given to such term in Section 2.1.

1.101 Termination Fee shall mean a payment pursuant to Section 12.2 calculated in the
following manner: (i) prior to the expiration of the sixth Contract Year, an amount equal to the
average of the annualized Base Management Fees and any Incentive Fees earned by Manager during the
immediately preceding two Contract Years multiplied by two (2); and (ii) during the seventh and
eighth Contract Years, an amount equal to the average of the annualized Base Management Fees and
any Incentive Fees earned by Manager during the immediately preceding two Contract Years.

1.102 Termination Notice shall have the meaning given to such term in Section
13.4(c)(1).

1.103 Termination Test Period shall have the meaning given to such term in Section
13.4(b).

1.104 Transfer and similar expressions shall mean any transaction whereby an interest,
whether legal or beneficial, in a Party, in the Hotel or in any part of this Agreement may be sold,
granted, conveyed, leased, assigned, exchanged, transferred, disposed of, encumbered, pledged,
charged, mortgaged, hypothecated, given, devised, bequeathed or otherwise dealt with, voluntarily
or involuntarily, directly or indirectly, by operation of law or otherwise, and includes the
creation of or an assignment by a fixed, specific or floating charge whereby the interest of a
Party is mortgaged or pledged as security for, or otherwise secured against in respect of any
indebtedness or other obligation.

 

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1.105 Travel Expenses shall mean airfare, lodging, meals and other travel related
expenses incurred by Manager and its Affiliates for the account of or in connection with the
Hotel’s operation; provided, however, that if any such travel involves more than one Managed Hotel
such costs and expenses shall be fairly allocated among the Hotel and such other hotels.

1.106 Uniform System shall mean the 10th Revised Edition of the Uniform System of
Accounts for the Lodging Industry, published by the American Hotel and Motel Association of New
York City, Inc., as amended or replaced from time to time.

1.107 Union Contracts shall mean that certain Collective Bargaining Agreement between
the Hotel Association of New York City, Inc. and the New York Hotel & Motel Trades Council, AFL-CIO
(the “Union”) dated as of July 1, 2006; that certain Me Too Agreement dated February 16, 2005
between the Union and Highgate Holdings and Oxford Lodging Metropolitan Hotel, LLC; that certain
Met Too agreement between LQ 511 d/b/a Latin Quarter Restaurant and the Union; that certain
Agreement dated May 30, 2007, among Alma Grill LLC, Radisson Lexington Hotel and the Union; that
certain Successor Me Too Agreement dated June 29, 2006 between Yetang Corp, d/b/a J. Sung Dynasty
and the Union; that certain letter agreement dated November 10, 2004 between Radisson Lexington
Hotel and Local 758 of the Union; that certain Radisson East Side agreement between Radisson East
Side and Local 6 of the Union; that certain Agreement dated March 4, 2007 between the Union and
Radisson East Side Hotel; that certain Letter agreement dated May 30, 2002 between the Union and
Radisson East Side Hotel; that certain letter to Miguel Castaneda from Radisson Lexington Hotel
dated August 15, 2007; that certain Agreement dated October 1, 2009 among Radisson Lexington Hotel,
the Union and Habana Room Inc. , as all of the same may be amended or modified from time to time
in accordance with its terms.

1.108 Uncontrollable Expenses shall have the meaning given to such term in Section
5.6.

1.109 Utilities shall mean all utility services for the Property, including, without
limitation, gas, electricity, hot water, steam, heating, air conditioning and ventilation and
telecommunications (including Internet service).

1.110 WARN Act shall mean the Work Adjustment and Retraining Notification Act, 29
U.S.C. §§ 201 et seq. (or any applicable comparable state law), and any regulations
promulgated thereunder from time to time.

1.111 Working Capital Amount means as of the Commencement Date, $500,000 and
thereafter $500,000 as adjusted in Manager’s reasonable judgment to provide sufficient cash for the
next three months based on the amount of cash Manager estimates to be generated from Gross Revenues
and other cash receipts and the amount of cash Manager estimates to be required for Fixed Charges,
Operating Expenses and custodial payments, such as sales and occupancy taxes, tips, movie rentals
and similar charges.

 

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ARTICLE II

TERM

2.1. Initial Term. This Agreement shall be effective from and after the Effective
Date. The initial term shall commence on the Commencement Date and shall continue through the tenth
annual anniversary of the Commencement Date unless earlier terminated as provided herein (the
“Initial Term” and, as may be extended by any Extension Term pursuant to Section 2.2, the
“Term”).

2.2. Extension Terms. Manager shall be entitled to renew this Agreement for one (1)
additional period of five (5) years (the “Extension Term”) if (a) the average of (i) Net
Operating Income attributable to the twelve (12) month period ending fifteen (15) months prior to
the end of the Initial Term and (ii) the Net Operating Income attributable to the twelve (12) month
period ending three (3) months prior to the end of the Initial Term exceeds (b) twelve percent
(12%) of Owner’s Total Investment. Manager shall exercise such right by giving Owner written notice
of such renewal at least sixty (60) days prior to the expiration of the Initial Term. The
Extension Term shall be upon all of the same terms and conditions contained in this Agreement.

2.3. Franchise Agreement. Owner and Manager anticipate that the Hotel will be
operated as a Radisson pursuant to a Franchise Agreement entered into between Owner and with
Radisson Hotels International, Inc. as Franchisor prior to the Commencement Date. If Owner elects,
to operate the Hotel as a brand other than Radisson, Owner shall give Manager prompt written notice
of such election (but in no event later than execution of a Franchise Agreement for such alternate
brand), identifying the alternative brand. Manager or Owner may, within thirty (30) days after
receipt of notification of Owner’s election of an alternate brand, submit to Owner a written
proposal to amend the provisions of this Agreement relating to termination by Owner pursuant to
Section 13.4, including without limitation, the definitions of Competitive Set, REVPAR Failure,
Shortfall, Operating Standard and related definitions. Owner or Manager, as the case may be, shall
use its reasonable judgment in deciding whether to approve such amendments. If Owner or Manager, as
the case may be, does not approve such amendments within thirty (30) days after receipt of the
proposed amendments, such party may elect to refer such amendments to the determination of the
Expert in accordance with Section 17.15, such election to be made within fifteen (15) days after
the expiration of such thirty (30) day period.

ARTICLE III

USE AND MANNER OF OPERATION OF THE HOTEL

3.1. Exclusivity. Subject to obtaining Owner’s approval when required to be obtained
under the terms of this Agreement, Owner hereby grants to Manager the sole and exclusive right to
manage and operate the Hotel during the Term, subject to and in accordance with the terms of this
Agreement and, subject to Section 3.3(z), the Franchise Agreement. Fee Owner, Owner and Manager
shall on the Commencement Date execute and deliver the Owner Agreement in the form attached hereto
as Exhibit B and made a part hereof for all purposes.

 

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3.2. Standard of Care. Manager shall use commercially reasonable efforts to
diligently and efficiently manage, operate, maintain and repair the Hotel to the Operating Standard
and provide all services, amenities and activities so as to operate the Hotel in accordance with
the Operating Standard. Notwithstanding the foregoing, Manager’s obligations under this Agreement
shall be subject to Owner’s provision of funds as and when required under this Agreement.

3.3. Authority and Duties of Manager. Without limiting the foregoing and subject to
Owner’s contribution of funds as and when required under this Agreement, and subject to Manager
obtaining Owner’s approval where required under this Agreement, Manager shall:

(a) use commercially reasonable efforts consistent with prudent hotel management to maximize
the profitability of the Hotel;

(b) develop, institute and implement financial, accounting and other programs and policies to
facilitate the diligent and efficient operation of the Hotel as required hereunder;

(c) subject to (a) above, establish all prices, price schedules, rates and rate schedules,
rents, lease charges and concession charges (including, without limitation, rebates and refunds),
and, in connection therewith, supervise, direct and control the collection, receipt and giving of
receipts for all services or income of any nature from the Hotel’s operations and use those funds,
as well as funds from other sources as may be available to the Hotel, in accordance with the terms
of this Agreement;

(d) pay all operating, capital and other expenses of the Property (including, without
limitation, Operating Expenses, Fixed Charges, Owner’s Expense, and payments for such services as
valet and parking, movie and internet service, audio visual services, food and beverage services
provided by tenants), as provided in the Annual Budget or otherwise permitted or required by this
Agreement, from funds in the accounts established for the Hotel or as otherwise furnished by Owner
in accordance with the terms of this Agreement;

(e) pay all excise, sales, value added, use or occupancy taxes or similar government charges
which are collected directly from patrons or guests, or as a part of the sales price of any goods,
services or displays, such as gross receipts, admission, cabaret or similar or equivalent taxes,
other than such taxes or similar government charges which are collected by tenants, licensees and
concessionaries occupying retail space at the Hotel;

(f) make commercially reasonable arrangements, negotiate and execute contracts on behalf of
Owner for all Utilities necessary or advisable in connection with the operation of the Hotel;

(g) make commercially reasonable arrangements, negotiate and execute contracts on behalf of
Owner for goods and services necessary or advisable in connection with the operation of the Hotel,
including, without limitation, extermination, vending, security, data security (including without
limitation, such arrangements as shall be necessary or advisable to ensure the Hotel’s compliance
with the Payment Card Industry Data Security Standards promulgated from time to time by the Payment
Card Industry Data Security Standards Council), cleaning, laundry, landscaping, maintenance, trash
collection and other similar services;

 

17

 

(h) make commercially reasonable arrangements, negotiate and execute on behalf of Owner
leases, licenses and other occupancy agreements necessary or advisable in connection with the
operation of the Hotel;

(i) when desirable or necessary, cause notices to be served on Hotel guests, patrons, tenants,
sub-tenants and concessionaires to quit and surrender space occupied or used by them;

(j) settle disputes between the Hotel and Hotel guests, patrons, tenants, sub-tenants and
concessionaires on a commercially reasonable basis;

(k) purchase, arrange for the purchase of and maintain Inventory and Operating Supplies
necessary or advisable in connection with the operation of the Hotel;

(l) subject to Article VIII, maintain or cause to be maintained the Hotel in good and clean
condition and repair;

(m) apply for, use commercially reasonable efforts to obtain and/or timely renew all licenses,
permits and certificates required in connection with the operation of the Hotel;

(n) institute and implement the Marketing Plan approved by Owner as part of the Annual Budget;

(o) maintain and keep all books of accounts, ledgers and other written records, room
reservations systems and other information systems required under this Agreement or as otherwise
reasonably requested by Owner or as may be recommended by Manager from time to time for the
operation of the Hotel in accordance with the Operating Standard;

(p) subject to Section 3.7, recruit, hire, pay, promote, discharge and supervise the work of
the Hotel Employees;

(q) provide, or arrange through licenses, lessees, tenants or concessionaires, restaurant and
bar facilities at the Hotel consistent with the Operating Standard, with the hours of operation and
the items served to be as determined by Manager; provided, however, that Manager shall have no
liability for the acts or omissions of any licensee, lessee, tenant or concessionaire unless such
acts or omissions are caused by or result from Manager’s Grossly Negligent or Willful Acts;

(r) institute and implement reasonably prudent energy management and utilize utility
conservation techniques;

(s) maintain security adequate for the needs of the Hotel as reasonably determined necessary
or desirable by Manager from time to time;

(t) obtain, verify and pay bills for Impositions prior to the same becoming liens against any
portion of the Property;

 

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(u) subject to Section 3.7(d), make the Home Office Employees available, as needed, for
consultation, advice and support for the Hotel, including, without limitation, in connection with
the provision of the Centralized Services;

(v) subject to Section 3.13, provide or cause to be provided the Centralized Services;

(w) provide administrative and accounting services necessary for the operation of the Hotel in
accordance with the terms of this Agreement;

(x) institute and implement a preventative maintenance program;

(y) subject to Section 3.8, institute and defend all legal claims and proceedings relating to
the operation of the Hotel; and

(z) subject to Owner’s provision of funds sufficient to comply with any requirements of the
Franchise Agreement which require the expenditure of money, (i) use commercially reasonable efforts
to comply with the terms and conditions of the Franchise Agreement and (ii) perform such other
duties as may be required under the Franchise Agreement on the part of Owner thereunder; provided,
however, if there is any conflict between this Agreement and the Franchise Agreement, the Franchise
Agreement shall prevail.

3.4. Limitations on Manager’s Authority. Manager shall not, and nothing herein shall
be deemed to authorize Manager to, execute any notes, guarantees, loan agreements or other
evidences of indebtedness or borrow any money on behalf of Owner or the Hotel (other than, subject
to the terms of this Agreement and the Annual Budget, with respect to equipment leases and other
similar ordinary course of business credit transactions). Manager shall have no power or authority
to enter into any mortgage, deed of trust, security agreement or any other instrument encumbering
all or any part of the Property or any accounts or other personal property arising from or
attributable to the Hotel or its operations (other than, subject to the terms of this Agreement,
with respect to equipment leases and other similar ordinary course of business credit
transactions). This Section 3.4 shall not prohibit Manager from incurring indebtedness on behalf
of Owner to suppliers of goods and services to the Hotel which are required in the operation of the
Hotel in accordance with the terms of this Agreement and the Annual Budget.

3.5. Transactions with Affiliates. Notwithstanding anything to the contrary in this
Agreement, Manager shall not enter into any contract or other agreement on behalf of Owner or
otherwise in connection with the Hotel with any Affiliate of Manager without Owner’s prior written
consent, which consent shall not be unreasonably withheld, conditioned or delayed so long as the
terms of such contract or other agreement are no less favorable, taken as a whole, than those that
can be obtained on an arms-length basis from third parties. At the end of each Contract Year,
Manager will provide a summary of each such contract entered into in such year.

3.6. Permitted Uses. Manager shall use the Property solely for the operation of the
Hotel and activities consistent with customary hotel operations or management in accordance with
the terms and conditions of the Property Documents. Except as otherwise required by the Property
Documents, Manager shall not establish or permit at the Hotel any other activities
except to the extent approved by Owner, which approval may be withheld, conditioned or delayed
in Owner’s sole discretion.

 

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3.7. Employees.

(a) Employment of Hotel Employees. All Hotel Employees shall be employees of Manager
and not the employees of Owner or any Affiliate of Owner. Subject to Section 3.7(b), the Annual
Budget and the Union Contracts, Manager shall have the exclusive right to make all decisions
regarding the determination of labor policies, appropriate staffing levels and the selection,
employment, training, termination of employment, supervision, direction, training, compensation and
assigning of the duties of Hotel Employees. Owner shall not contact Hotel Employees directly,
other than the General Manager and Controller, but Owner may provide comments or complaints to the
General Manager regarding the Hotel Employees and Manager shall in good faith consider all
complaints and shall undertake additional training or other corrective action if Manager determines
in good faith that such training or other action is warranted. Manager shall supervise and monitor
compliance with all Applicable Laws relating to workers’ compensation, social security,
unemployment insurance, hours of labor, wages, working conditions and other employer/employee
related subjects. Owner shall be responsible for the salaries and other costs and financial
liabilities of Hotel Employees (including, without limitation, incentive and bonus plans and
accrued vacation and sick pay, severance pay, employment taxes and withholding) and shall provide
Manager with the funds to pay or otherwise satisfy such salaries and other costs and financial
liabilities of Hotel Employees.

(b) Hotel Senior Managers. Owner acknowledges that Manager intends to engage Don
Sheneman as General Manager, Vanessa Sperber as Director of Sales and Marketing and Natalya
Starkova as Contoller/Director of Finance for the Hotel and hereby approves such appointments.
[Notwithstanding anything to the contrary contained in Section 3.7(a), Owner shall have the right
to interview and approve, prior to his or her appointment, any other individual selected by Manager
for any Senior Manager position, which approval shall not be unreasonably withheld or conditioned
and shall be solicited by Manager as set forth in this Section 3.7(b). Prior to appointing any
other Senior Manager, Manager shall provide Owner with a written summary of the individuals’
professional experience and qualifications reasonably necessary for Owner to evaluate each
candidate. Manager shall offer Owner the opportunity to interview each candidate at the Hotel or
another mutually acceptable location. Owner will forego its right to interview any such individual
and be deemed to have approved such individual if Owner or its authorized representative is
unwilling or unable to participate in the interview within fifteen (15) Business Days following
receipt of Manager’s written summary of qualifications. Owner shall also be deemed to have
approved the appointment of any such individual unless Owner delivers notice of its disapproval of
such appointment within five (5) Business Days after Owner interviews such candidate. Owner
acknowledges that it may not reject more than three (3) candidates (the “Rejection Limit”)
proposed by Manager for the General Manager position; it being agreed and understood that if the
Rejection Limit has been reached by Owner, Manager may hire one of such three (3) such candidates
that were rejected by Owner.

 

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(c) Collective Bargaining Agreements. Subject to this Section 3.7, Manager shall have
the exclusive right to engage in collective bargaining with the bargaining
representative or representatives of Hotel Employees and to enter into collective bargaining
agreements for the Hotel. Manager shall meet with Owner prior to commencing collective bargaining
agreement negotiations and prior to commencing any efforts to modify existing collective bargaining
agreements for the purpose of consulting with Owner concerning proposed negotiating aims in the
context of the Annual Budget. Manager may not enter into any collective bargaining agreement (or
modification thereto), recognition agreement, or neutrality agreement without Owner’s prior
approval, which may be withheld, conditioned or delayed in Owner’s sole discretion. Manager shall
(i) supervise and direct compliance with any applicable collective bargaining agreement, (ii)
notify Owner of any collective bargaining grievances which may have a material adverse impact upon
the Annual Budget, (iii) process through applicable grievance procedures any such grievances up to
and including arbitration, and (iv) use commercially reasonable efforts to comply in all material
respects with the terms of any collective bargaining agreement affecting the Hotel.

(d) Use of Home Office Employees and Managed Hotel Employees. Manager shall have the
right to utilize personnel from other Managed Hotels and Home Office Employees (i) in connection
with the operation of the Hotel to the extent the scope of work covered is comprised of services
that would otherwise be performed by a Hotel Employee, and (ii) on a routine basis to provide
services to the Hotel and other Managed Hotels, in each case to the extent such use of personnel
from other Managed Hotels and/or Home Office Employees was contemplated in the Annual Budget or was
otherwise approved by Owner in writing, which approval shall not be unreasonably withheld,
conditioned or delayed. In such events, the employee related costs and expenses for such personnel
shall be allocated to the Hotel as an Operating Expense in a fair and equitable manner.

(e) WARN Act. Upon timely receipt of notice of any termination of this Agreement (but
not including the expiration of this Agreement due to the expiration of the Term), Manager shall be
responsible for determining whether the provisions of the WARN Act (or any other applicable
employee notice requirements under Applicable Laws) will require the delivery of notices to Hotel
Employees as a result of such termination and for delivering to all Hotel Employees whose
employment may be terminated as a result of such termination all notices under, pursuant to, and in
accordance with the WARN Act (or any other applicable employee notice requirements under Applicable
Laws), specifying therein the applicable date of termination. Notwithstanding anything to the
contrary in this Agreement, all time periods specified herein with respect to the termination of
this Agreement may be extended to the extent necessary to comply with the WARN Act (or any other
applicable employee notice requirements under Applicable Laws), unless Owner elects to ensure that
a sufficient number of Hotel Employees will be retained such that the notice requirement is not
necessary or agrees to provide an indemnity to Manager and its Affiliates which shall be from a
party reasonably acceptable to Manager in light of the credit risk involved, pursuant to which such
party indemnifies and agrees to hold harmless Manager and its Affiliates against any and all claims
by Hotel Employees whose employment is terminated. The provisions of this Section 3.7(e) shall
survive any expiration or sooner termination of this Agreement.

 

21

 

(f) ERISA Matters. Notwithstanding anything to the contrary contained in this
Agreement, the following shall cover liability arising out of the Employee Retirement
Income Security Act of 1974 (“ERISA”) and the Multi-employer Pension Plan Amendments
Acts of 1980 (“MEPPA”), respectively, as from time to time amended.

(1) Hotel Employees who are not represented by a collective bargaining representative
shall participate in the incentive programs and in the profit sharing and/or other employee
retirement, disability, health, welfare or other benefit plan or plans now or hereafter made
available by Manager to similarly situated employees of other Managed Hotels in accordance
with their respective terms. Manager shall have the right to charge the Hotel with its
allocable share of the cost of any such plan or plans and any contributions to be made
thereunder provided that such charges and contributions shall be determined by Manager on a
uniform basis with respect to charges and contributions imposed for the same or similar
plans at other Managed Hotels. Manager’s rights under this Section 3.7(f) shall be subject
to the condition that Manager shall not put into effect any amendment to any existing plan,
or adopt any additional plan, which is not imposed upon all other Managed Hotels.

(2) Upon termination of this Agreement, the sale of the Hotel or other similar event,
Manager and Owner shall cooperate with respect to disposition of such plan or plans (or plan
assets) in a mutually satisfactory manner, all in compliance with then applicable regulatory
requirements, with the objective of assuring that the amounts charged to Owner with respect
to such plan or plans are proportionate to the amounts charged to other Managed Hotels for
similarly situated plan participants.

(3) Manager does not now sponsor or maintain a defined benefit pension plan for any of
its employees, and Manager shall not adopt any type of defined benefit pension plan for
Hotel Employees without Owner’s prior written consent, which may be withheld, conditioned or
delayed in Owner’s sole discretion, provided that Manager may participate in any defined
benefit pension plan for any employees covered by any collective bargaining agreement to the
extent required by such agreement.

(4) Manager and Owner agree that with respect to any withdrawal liability arising under
any “multi-employer plan” (as defined in Section 3(37) of ERISA), the obligations of the
Parties shall be determined as follows:

(i) Any multi-employer plan withdrawal liability arising with respect to Hotel Employees shall
be the responsibility of Owner, and Owner shall either pay the amount of such withdrawal liability
directly to such plan or reimburse Manager for withdrawal liability payments made to such plan by
Manager with respect to Hotel Employees. To the extent permitted under Applicable Laws, Manager
and Owner shall cooperate in structuring transactions and transferring actual or contingent
withdrawal liability to a successor in ownership or purchaser of the Hotel in accordance with
“relief” provisions of ERISA, such as ERISA Section 4204 or then applicable statutory or regulatory
provisions of a similar nature. For purpose of this Section 3.7(f)(4)(i), the term “withdrawal
liability” shall mean the actual amount assessed by and payable to a multi-employer pension fund
upon a complete or partial withdrawal of the Hotel or Hotel Employees from such fund. Manager and
Owner shall cooperate in challenging a plan’s assessment of such liability, provided that all costs
of litigation, arbitration
or other procedures shall be at the sole expense of Owner (including any bonds that must be
posted).

 

22

 

(ii) Upon any expiration or sooner termination of this Agreement, Owner shall pay, and shall
indemnify and hold harmless Manager, its Affiliates and their respective directors, officers,
employees and agents from and against, any and all liability, loss, damages, costs and expenses
arising out of, or incurred in connection with, (x) Manager’s and its employees (including Hotel
Employees) participation in multi-employer plans (including, without limitation, any withdrawal
liability), and (y) all costs of severance and accrued but unpaid vacation and sick pay for Hotel
Employees as of the date of such expiration or sooner termination. The provisions of this Section
3.7(f)(4)(ii) shall survive any expiration or sooner termination of this Agreement.

(g) Manager hereby represents and warrants and agrees as follows:

(1) Prior to the Commencement Date, all Hotel Employees were employees of Highgate
Oxford Management Company, LLC, Seller’s hotel manager (“HOMC”) and not of Lexington Hotel,
LLC (the “Seller”) and, as a result, the Seller did not have any direct obligation to any
Hotel Employee or to the New York Hotel and Motel Trades Council, AFL-CIO, except as
otherwise provided in the Union Contracts.

(2) Following the Commencement Date, none of the Seller, Fee Owner or Owner will have,
and the Seller did not prior to the Commencement Date have, any obligation to contribute to
the New York Hotel Trades Council and Hotel Association of New York City, Inc. Pension Fund
(the “Retirement Plan”) with respect to the Hotel that runs directly to the Retirement Plan
(as opposed to any requirement to reimburse or fund any such contribution by the Manager or
as the Union Contracts may otherwise be construed). It is Manager’s position that the
“employer” (as defined in Section 3(5) of ERISA) of any and all Hotel Employees for purposes
of Title IV of ERISA was HOMC prior to the Commencement Date, and will be during the Term,
the Manager.

(3) Manager agrees that it will extend offers to hire effective on the Commencement
Date, a sufficient number of Hotel Employees so that no layoff, closing or other termination
notices will be required to be given pursuant to the WARN Act.

 

23

 

3.8. Legal Actions. Except as set forth in this Section 3.8, Manager shall be
responsible for the filing, prosecution and defense of all legal proceedings (including the
selection, retention and direction of legal counsel) arising out of the operation of the Hotel
other than litigation between Owner and Manager. Except as otherwise set forth in this Section
3.8, Owner’s approval, which approval shall not be unreasonably withheld, conditioned or delayed,
shall be required to (i) retain legal counsel in any matter for which the aggregate legal fees are
reasonably anticipated to exceed $10,000, or (ii) institute or settle any legal action involving an
amount in excess of $25,000 per action. Notwithstanding the foregoing to the contrary, Manager may
direct the course of action and designate counsel with respect to legal actions or proceedings that
relate to (a) legal actions involving more than one Managed Hotel, unless such other hotels are
also owned by Owner or its Affiliate, or (b) policies, procedures or business practices of

Manager or its Affiliates, including without limitation, employment matters. If any such
matter involves another Managed Hotel, then the costs of such litigation shall be fairly allocated
among the Hotel and such other hotels. Each Party shall promptly give notice to the other Party of
the commencement of any action, suit or proceeding against Owner or against Manager with respect to
the operations of the Hotel or otherwise affecting the Property. Manager shall reasonably
cooperate (without incurring any unreimbursed expense or being subject to liability), and, to the
extent of Manager’s ability, shall endeavor to cause all Hotel Employees to reasonably cooperate,
in connection with the prosecution or defense of all legal proceedings affecting the Hotel or the
Property.

3.9. Intellectual Property. Owner hereby acknowledges that the Manager Proprietary
Information and the goodwill associated therewith are the sole and exclusive property of Manager
and may be used by Manager and its Affiliates for any purpose. Owner shall not acquire any right,
title or interest of any kind or nature whatsoever in or to the Manager Proprietary Information or
the goodwill associated therewith and may not itself use the Manager Proprietary Information or
apply for registration rights in the Manager Marks. Additionally, Owner shall not contest or
otherwise challenge the ownership and use rights of Manager or its Affiliates with respect to the
Manager Proprietary Information, including any additions or improvements thereto, by whomever
developed. Owner shall be the owner of all Hotel Guest Data and Manager shall have the right to
use such Hotel Guest Data in connection with the operation of the Hotel.

3.10. Reservations. All booking of reservations for the use of the guest rooms,
dining and catering facilities, conference rooms or any other facility of the Hotel shall be made
by or through Manager and the reservation systems of Franchisor during the term of the Franchise
Agreement.

3.11. Discounts. Manager shall be authorized to make available to the employees of
Owner, Manager and their Affiliates free or discounted room use at the Hotel in the event that such
employees have traveled to the location of the Hotel for business directly related to Owner or the
Hotel. In addition, Manager shall be authorized to (i) make available to the employees of Owner,
Manager and their Affiliates certain benefits in the form of discounted room use at the Hotel, and
(ii) offer other complimentary and discount rooms and services in accordance with standard hotel
industry practices; provided, that Manager shall only offer complimentary rooms for marketing
purposes or to resolve disputes with guests and shall offer no more than twenty (20) complimentary
room nights in any calendar month; provided further, in each case, that Manager shall not provide
complimentary or discounted rooms on any night that the Hotel is projected to be more than
ninety-five percent (95%) occupied. Further, Senior Managers may be afforded temporary
complimentary use of guest rooms in connection with any relocation and commencement of employment
at the Hotel provided that the same not exceed thirty (30) days. Owner hereby approves such
benefits and acknowledges that it has no claim against Manager with respect thereto.

 

24

 

3.12. Licenses and Permits.

(a) Manager shall send to Owner a copy of all material initial or renewal license
applications. All such licenses, permits and other instruments shall be obtained in
Owner’s name whenever practical, and Manager shall notify Owner if Manager intends to obtain
any such license, permit or other instrument in any name other than Owner’s. All such licenses,
permits or other instruments held in the name of Manager (or an Affiliate of Manager) shall be held
by Manager (or an Affiliate of Manager) on behalf of Owner.

(b) In accordance with Legal Requirements related to alcoholic beverage licenses, Manager
shall obtain in Owner’s name or if directed by Owner and/or the Legal Requirements, in Manager’s
name on behalf of Owner, all alcoholic beverage licenses and shall maintain such alcoholic beverage
licenses in good standing and effect, free of all liens (with the exception of any lien granted to
Owner therein) and in strict compliance with any conditions imposed by Legal Requirements related
to such alcoholic beverage licenses. Manager further covenants and agrees that: (i) any alcoholic
beverage license issued for use upon the Premises, including any renewals thereof, shall remain
upon the Premises and shall not be transferred or assigned for use at any other place at any time
without the prior written consent of Owner, and (ii) upon termination of this Agreement, whether
upon its expiration or at any sooner termination thereof, Manager shall execute or cause to be
executed such documentation, if any, and performed such other acts, if any, as may be reasonably
required to effect the transfer or issuance of any existing, temporary or new alcoholic beverage
license as may be necessary or permissible under Applicable Law. Owner covenants and agrees to pay
any and all reasonable and direct costs (including reasonable attorney’s fees) incurred by Manager
in effecting such transfer and/or obtaining and maintaining such license.

(c) Manager shall operate the Hotel in substantial compliance with all of the terms and
conditions set forth in any license and/or permit procured with respect to the Hotel.

3.13. Centralized Services. Subject to this Section 3.13, Manager shall provide, or
shall cause its Affiliates to provide, the Centralized Services to the Hotel in a manner consistent
with the provision of Centralized Services that are provided to other Managed Hotels. The
Centralized Services and Centralized Services Fees applicable to the Hotel as of the Commencement
Date are set forth on Schedule 1 hereto. Such Centralized Services may change from time to
time consistent with changes in such services to the system of Managed Hotels; provided, however,
any additional Centralized Services or any increase in the Centralized Services Fees set forth on
Schedule 1 hereto shall be subject to Owner’s reasonable approval as part of the Annual
Budget process set forth in Article V; provided, further, (i) to the extent such Centralized
Services are provided by third parties, the costs incurred will be passed through without any
mark-up or profit component for the benefit of Manager and (ii) with respect to the costs for all
other Centralized Services, Manager will not earn any profit and such charges will be charged to
the Owner on a basis consistent with, and no less favorable than, 75% of other Managed Hotels.

3.14. Quiet Enjoyment. Subject to the provisions of this Agreement and the Franchise
Agreement, Owner warrants, represents and covenants that Manager shall and may peaceably and
quietly manage and operate the Hotel throughout the Term, free from interruption or disturbance,
and Manager, the Hotel Employees and the guests of the Hotel shall have the right of use of the
Hotel during the Term.

 

25

 

3.15. Permitted Encumbrances. Owner and Manager each covenant to maintain the title
to the Hotel and the Property, respectively, free and clear of any liens, charges and encumbrances
of any nature or kind other than Permitted Encumbrances; provided, however, that either Party may
contest in good faith the validity of any such unpermitted liens, charges or encumbrances as long
as such contest is prosecuted in a diligent manner.

3.16. Impositions. Unless any Impositions are paid pursuant to a cash management
agreement or tax escrow arrangement with any Lender, Owner shall make funds available to pay and,
subject to the availability of funds, Manager shall (i) cause to be paid, prior to the dates the
same become delinquent, with the right to pay the same in installments to the extent permitted by
Applicable Law, all Impositions, and (ii) furnish Owner, before the respective dates on which such
Impositions will become delinquent, proof of payment thereof. Owner may contest the validity or
the amount of any Impositions and shall be responsible for any negotiations with or appeals to the
applicable Governmental Authority. Manager shall cooperate with Owner and execute any documents or
pleadings reasonably required for such purpose. The costs and expenses of any such contest shall
constitute an Owner’s Expense.

3.17. Material Contracts. Manager shall not enter into any Material Contract except
for Material Contracts which are (i) set forth in the Annual Budget, (ii) otherwise approved by
Owner, which approval shall not be unreasonably withheld, conditioned or delayed, or (iii)
otherwise permitted or required by this Agreement. Manager shall not terminate any Material
Contract or modify any Material Contract in any material respects or in a manner that waives any
substantive right of Owner without the approval of Owner, which approval shall not be unreasonably
withheld, conditioned or delayed.

3.18. Compliance with Applicable Laws. Manager, on behalf of Owner, shall comply with
all Applicable Laws affecting the operation of the Hotel, including, without limitation, those of
any alcoholic beverage control board or board of fire underwriters, the requirements of any
insurance companies covering any of the risks against which the Hotel is insured, the Environmental
Laws and the ADA. The costs and expenses of such compliance shall be treated as Fixed Charges,
Operating Expenses or Capital Expenditures, as applicable. Manager may contest by proper legal
proceedings the validity or application of any such Applicable Laws with the approval by Owner,
which approval may be withheld, conditioned or delayed in Owner’s sole discretion. The costs of
such contest shall be treated as Owner’s Expense.

3.19. Environmental Matters. Manager shall not take any action in respect of the
Property relating to environmental matters other than to obtain environmental studies and reports
requested by Owner, conduct (or arrange for) evaluations and analysis thereof and obtain
appropriate permits; provided, however, that Manager is hereby authorized to take such action as
may be reasonably required to mitigate or eliminate any material environmental condition that poses
imminent danger to human health and safety so long as Manager uses commercially reasonable efforts
to obtain Owner’s advance approval and, in any event, notifies Owner as soon as practical (but in
no event later than forty-eight (48) hours of taking such action) explaining the reasons therefore;
provided further, that such emergency expenses referred to in the preceding clause shall not exceed
$25,000 in the aggregate in any Contract Year.

 

26

 

3.20.  Prior Claims and Prior Conditions. Notwithstanding anything contained herein to
the contrary, Owner shall not bring a claim against Manager under this Management Agreement
alleging that Manager is responsible for any Prior Claims or Prior Conditions. The foregoing shall
not affect Owner’s rights and remedies against, or any liability of, the seller under the Purchase
Agreement.

3.21. Rebates. If Manager receives any rebate, payment or other form of enrichment
(“Rebate’), with respect to the purchase, sale, lease or procurement of goods or services for or to
the Hotel, Manager shall reimburse such Rebate to the Hotel.

ARTICLE IV

MANAGEMENT FEES

4.1. Base Management Fee. As compensation for the services to be rendered by Manager
pursuant to this Agreement, Owner shall pay to Manager a management fee (the “Base Management
Fee”) in an annual amount equal to two and one-half percent (2.5%) of Gross Revenue from the
Commencement Date to the first anniversary of the Commencement Date and three percent (3%) of Gross
Revenue thereafter, and an incentive management fee (the “Incentive Management Fee”) in an
amount equal to twenty percent (20%) of the amount by which Net Operating Income exceeds Owner’s
Priority, provided that in no event will the Base Management Fee and Incentive Management Fee paid
with respect to any Contract Year exceed four percent (4%) of Gross Revenue. The Base Management
Fee and Incentive Management Fee shall be calculated and paid in accordance with Sections 4.2 and
4.3.

4.2. Calculation and Payment of Base Management Fee/Incentive Management Fee.

(a) The Base Management Fee shall be calculated on the Gross Revenue for the preceding month
and shall be paid monthly in arrears on or before the fifth (5th) Business Day after Manager
delivers to Owner (which delivery may be by facsimile or electronic mail) a statement of Gross
Revenue and calculation of the Base Management Fee for such month. Subject to the terms of this
Agreement, Manager is authorized to pay to itself the Base Management Fee from the Operating
Account. The Base Management Fee shall be payable to Manager regardless of whether all amounts
then due and payable to a Lender under any Mortgage (collectively, “Debt Service”) have
been paid in full. In the event that Owner or Manager subsequently determines that any payment of
the Base Management Fee is incorrect, such amount shall be subject to adjustment as set forth in
Section 4.3.

(b) The Incentive Management Fee shall be calculated at the end of each Contract Year and
shall be paid annually in arrears on or before the twentieth (20th) Business Day after
Manager delivers to Owner (which delivery may be by facsimile or electronic mail) a statement of
Net Operating Income and calculation of the Incentive Management Fee for such Contract Year.
Subject to the terms of this Agreement, Manager is authorized to pay to itself the Incentive
Management Fee from the Operating Account. The Incentive Management Fee shall be payable to Manager
regardless of whether all then due and payable Debt Service has been paid in full. In the event
that Owner or Manager subsequently determines that any payment of the
Incentive Management Fee is incorrect, such amount shall be subject to adjustment as set forth
in Section 4.3.

 

27

 

4.3. Adjustments to Base Management Fee/Incentive Management Fee. Owner shall have
the right to reasonably confirm Manager’s calculation of the Base Management Fee and Incentive
Management Fee following receipt of the annual financial statements for the Hotel pursuant to
Section 7.3. If the Base Management Fee or the Incentive Management Fee payable to Manager for a
Contract Year is greater than the total of the Base Management Fee or Incentive Management Fee
previously paid during such Contract Year, any additional Base Management Fee or Incentive
Management Fee due to Manager shall be paid within thirty (30) days following Owner’s receipt of
the annual financial statements for the Hotel. Conversely, if the Base Management Fee or Incentive
Management Fee payable to Manager for a Contract Year is less than the total Base Management Fee or
Incentive Management Fee previously paid for such Contract Year, any such excess Base Management
Fee or Incentive Management Fee paid during any Contract Year shall be refunded to Owner by Manager
within thirty (30) days following Owner’s receipt of the annual financial statements for the Hotel.
Any such excess Management Fees not repaid within such thirty (30) days shall bear interest from
the expiration of such thirty (30) day period until paid at the Prime Rate plus five percent (5%).

4.4. Major Capital Management Fee. In addition to the other fees described in this
Article IV, if, in any Contract Year, Owner requests that Manager provide project management
oversight of Capital expenditures in accordance with Section 8.4, Owner shall pay to Manager a
construction management fee (the “Major Capital Management Fee”) with respect to the
applicable Renovations in an amount equal to four percent (4%) of the Capital Expenditures incurred
by Owner in connection with such Renovations. Subject to the terms of this Agreement, Manager is
authorized to pay to itself the Major Capital Management Fee from the Operating Account. The Major
Capital Management Fee shall be payable to Manager monthly, in arrears, on or before the fifth
(5th) Business Day after Manager delivers to Owner (which delivery may be by facsimile or
electronic mail) a statement of the Capital Expenditures incurred in connection with such
Renovations during the preceding calendar month, together with reasonable supporting documentation.

4.5. Centralized Services Fees. In addition to the other fees described in this
Article IV, Owner shall pay to Manager centralized services fees (the “Centralized Services
Fees”) determined in accordance with Schedule 1 attached hereto, as such Centralized
Services Fees may be modified from time to time in accordance with Section 3.13. Each Annual Budget
will set forth the projected Centralized Services Fees for the applicable Contract Year. Manager is
authorized to pay to itself the Centralized Services Fees from the Operating Account. The
Centralized Services Fees shall be payable to Manager monthly in arrears contemporaneously with
each payment of the Base Management Fee.

4.6. Accounting Fee. In addition to the other fees described in this Article IV,
Owner shall pay to Manager an accounting fee (the “Accounting Fee”) in the amount of $16
per key per month, payable in arrears contemporaneously with each payment of the Base Management
Fee, for accounting services for the Hotel provided by Manager and the Home Office Employees.
Subject to the terms of this Agreement, Manager is authorized to pay to itself the Accounting Fee
from the Operating Account.

 

28

 

4.7. Owner’s Responsibility. Owner acknowledges that the Management Fees and other
fees described in this Article IV are obligations of Owner and that Owner shall be required to pay
all such fees regardless of whether Gross Revenues are sufficient to cover such fees.

ARTICLE V

ANNUAL BUDGETS

5.1. Annual Budget. The Annual Budget for the first Contract Year (or partial
Contract Year) shall be the budget proposed and approved prior to the Commencement Date. On or
before November 15 of each year beginning with the first November after the Commencement Date,
Manager shall prepare and submit to Owner for Owner’s approval, which approval shall not be
unreasonably withheld or conditioned, a reasonably detailed budget in a form reasonably acceptable
to Owner which shall include the estimated costs and expenses of Hotel Operations for the following
year (the “Annual Budget”), covering:

(a) property operation and maintenance;

(b) the Marketing Plan;

(c) Capital Expenditures (including the Renovations Budget and a 5-year capital plan);

(d) FF&E purchases, replacements and repair;

(e) Operating Supplies;

(f) all other material categories of Operating Expenses, Fixed Charges and Owner’s Expense;

(g) a staffing plan;

(h) a month by month forecast of income and expenses and cash flow for such year in the form
of the statement of profit and loss and cash flow statement recommended by the Uniform System; and

(i) such other matters reasonably required by Lender and Franchisor.

 

29

 

5.2. Annual Budget Process. Not later than thirty (30) days after receipt by Owner of
the proposed annual budget (the “Annual Budget”), Owner may deliver a written notice to
Manager stating that Owner objects to any information contained in or omitted from such Annual
Budget and setting forth the nature of such objection. Any failure by Owner to deliver such
written notice within such thirty (30) day period shall be deemed to constitute Owner’s approval of
the Annual Budget. Upon timely receipt of any such written notice, Manager shall within five (5)
Business Days (or such longer period, not to exceed ten (10) Business Days, as shall be reasonably
required to modify the proposed Annual Budget to address the objection of Owner) modify the Annual
Budget and resubmit it to Owner for its approval.

Any failure by Manager to resubmit the Annual Budget within the time periods as aforesaid
shall be deemed to constitute Manager’s approval of Owner’s objections. Within five (5) Business
Days of receipt of the resubmitted Annual Budget, Owner may deliver a further objection notice (in
which event the resubmission and review process described above shall continue until the Annual
Budget in question is approved by Owner). Any failure by Owner to deliver such written notice
within such five (5) Business Day period shall be deemed to constitute Owner’s approval of the
resubmitted Annual Budget. If Owner has not approved an Annual Budget for any calendar year by
March 31 of such calendar year, either Owner or Manager may submit the Annual Budget to an Expert
in accordance with Section 17.15 hereof.

5.3. Carryover Annual Budget. To the extent that an Annual Budget is not yet approved
for the current Contract Year, Manager may not incur any capital, operating or other expenditures
(including, without limitation, any Operating Expenses, Fixed Charges, Owner’s Expense or Capital
Expenditures) in respect of the Hotel that (i) have not been previously approved in writing by
Owner, which approval shall not be unreasonably withheld, conditioned or delayed, (ii) are not
authorized under any portion of the prior year’s Annual Budget, as adjusted by CPI, or (iii) are
not otherwise required or permitted pursuant to the provisions of this Agreement, including,
without limitation, pursuant to Sections 5.5, 5.6, 5.7 and 5.8.

5.4. Compliance with Annual Budget. Manager shall use commercially reasonable efforts
to operate the Hotel in accordance with the Annual Budget. The Parties acknowledge that the Annual
Budget is an estimate only and that unforeseen circumstances during the course of the applicable
Contract Year, including, without limitation, Force Majeure Events, the costs of labor, material,
services and supplies, operation of law or economic and market conditions, may make adherence to
the Annual Budget impracticable. Manager shall be entitled to revise any Annual Budget, subject to
Owner’s prior approval in accordance with Section 5.2, in the event of significant changes in
facilities availability, operating conditions, sales outlook or economic conditions for the
remainder of the Contract Year. Without limiting Owner’s approval rights set forth in this
Agreement, the Parties acknowledge that any failure or inability of the Hotel to meet the income or
expense projections of the Annual Budget shall not constitute a default by Manager under this
Agreement or impose any liability on Manager. Except as otherwise provided herein, Manager may not
deviate from, or incur any expenditure inconsistent with, the Annual Budget (or enter into any
agreement requiring such deviation or expenditure) without the prior written approval of Owner,
which approval may be withheld, conditioned or delayed in Owner’s sole discretion; provided,
however, that Owner’s approval shall not be required if: (i) such expenditure would not (a) cause
any departmental total in the Annual Budget to which such expenditure relates to exceed one hundred
ten percent (110%) of the budgeted amount of such department total in the Annual Budget (taking
into account the amounts expended to date and reasonably anticipated expenses for the remainder of
the Contract Year), or (b) cause the aggregate amount of departmental totals (excluding the
expenses described in clause (ii) below) within the Annual Budget to exceed one hundred five
percent (105%) of the entire amount of the Annual Budget (taking into account the amounts expended
to date and reasonably anticipated expenses for the remainder of the Contract Year); or (ii)
expenditures for items pursuant to Sections 5.5, 5.6, 5.7 and 5.8. Manager shall notify Owner of
each permitted Annual Budget deviation made pursuant to this Section 5.4 and shall supply Owner
with such information with respect thereto as Owner may reasonably request.

 

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5.5. Expense Variances. Certain expenses provided for in the Annual Budget for any
Contract Year will vary based on the occupancy of the Hotel and, accordingly, to the extent that
occupancy of the Hotel for any Contract Year exceeds or is less than the occupancy projected in
the Annual Budget for such Contract Year, such Annual Budget shall be deemed to include
corresponding increases or decreases in such variable expenses that are reasonably attributable
thereto. In the event occupancy exceeds or is less than the projected levels set forth in the
Annual Budget, Manager shall use commercially reasonable efforts to manage the variable expenses
that are reasonably attributable thereto in a manner intended to optimize the financial performance
of the Hotel’s operations, and in connection with the foregoing, Manager shall only be authorized
to increase such variable expenses up to an amount that is reasonable to the extent to which
occupancy exceeds or is reasonably anticipated to exceed the occupancy set forth in the Annual
Budget based upon existing advance reservations and bookings and forecasted reservations and
bookings reasonably determined by Manager.

5.6. Uncontrollable Expenses. The amount of certain Operating Expenses, Fixed Charges
and Owner’s Expense are not within the ability of Manager to control, including, without
limitation, Impositions, Utilities, insurance premiums, license and permit fees and charges
provided for in contracts and leases entered into pursuant to this Agreement (“Uncontrollable
Expenses”). Manager shall have the right to pay from the Operating Account all Uncontrollable
Expenses without reference to the amounts provided for in respect thereof in the Annual Budget for
any Contract Year. Manager shall notify Owner as soon as practicable of the making of any such
expenditures in an amount greater than the line item in the Annual Budget relating thereto.

5.7. Emergency Expenditures. If any expenditures are required on an emergency basis
to avoid imminent damage to the Hotel or injury to Persons, Manager may make such expenditures,
whether or not provided for or within the amounts provided for in the Annual Budget for the
Contract Year in question, as may reasonably be required to avoid or mitigate such imminent damage
or injury; provided, however, that Manager shall obtain Owner’s approval prior to making any such
expenditure that exceeds $10,000 for any one occurrence, which approval shall not be unreasonably
withheld, conditioned or delayed and, if the emergency situation in question could reasonably be
expected to result in such immediate damage or injury or a closing the Hotel or otherwise
materially and adversely interfere with the operation of the Hotel, shall be deemed approved if not
expressly rejected within one (1) Business Day following request therefore.

5.8. Compliance with Applicable Laws. If any expenditures are required to comply with
any Applicable Laws or to cure or prevent any violation thereof that imposes an imminent threat of
liability, Manager may propose to make such expenditures, whether or not provided for or within the
amounts provided for in the Annual Budget for the year in question, as may be necessary to comply
with such Applicable Laws or to remove or prevent the violation thereof for Owner’s approval, which
approval shall not be unreasonably withheld, conditioned or delayed. Such expenditures, if and
when approved or deemed approved by Owner, shall be treated as Fixed Charges, Owner’s Expense,
Operating Expenses or Capital Expenditures, as applicable; provided, however, that Manager may
initially make such expenditure out of the Operating Account and/or Reserve Fund to the extent
funds in the Operating Account are insufficient.

 

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ARTICLE VI

BANK ACCOUNTS; PAYMENT OF OPERATING EXPENSES

6.1. Operating Account. Manager shall establish and maintain one or more separate
segregated operating accounts (collectively, the “Operating Account”) at a FDIC insured
bank designated by Manager (except to the extent any Lender requires that the Operating Account be
held with Lender as part of a cash management system) and approved by Owner for the collection and
disbursement of monies in connection with the management and operation of the Hotel. All Gross
Revenue and other funds (exclusive of funds deposited in the Reserve Fund or the Emergency Fund)
received by Manager in the operation of the Hotel or otherwise relating to the Property, and funds
for the Working Capital Amount provided by Owner or retained by Manager from Gross Revenue, shall
be deposited in the Operating Account. From the Operating Account, Manager shall pay all Operating
Expenses, Fixed Charges, External Audit Fees (which shall be deducted from distributions to Owner)
and Management Fees, and other costs and expenses relating to the operation of the Hotel as
permitted or required to be paid by Manager in accordance with this Agreement before any penalty or
interest accrues thereon. The Operating Account shall be a segregated account and at all times
shall be in Owner’s name; provided that Hotel Employees and Home Office Employees designated by
Manager from time to time which shall be bonded or otherwise insured shall be the sole and
exclusive authorized signatories of such account. All interest earned or accrued on amounts
invested from the Operating Account shall be added to the Operating Account.

6.2. Ownership of Accounts. Owner shall furnish information necessary for the
printing of all Operating Account checks, which will bear the name of the Hotel. All bank accounts
(including the Operating Account), bank balances, bank statements, advice, paid checks, blank
checks and other related records established in connection with operation of the Hotel or the
ownership of the Property shall be the sole property of Owner and/or any designee of Owner.

6.3. Distributions to Owner. Along with the monthly financial information delivered
pursuant to Section 7.2, Manager shall remit to Owner out of the Operating Account an amount (the
“Distribution Amount”) equal to the Net Operating Income earned in the preceding calendar
month; provided however, in no event will Manager be required to make a distribution to Owner to
the extent distribution would reduce the balance of the Operating Account below the Working Capital
Amount. Each distribution shall be paid (by check, wire transfer or such other method designated by
Owner) to Owner at Owner’s address then in effect hereunder for receipt of notices hereunder by
Owner or at such other place as Owner may designate in writing to Manager. In the event that
Manager distributes more or less than is required under this Section 6.3 in any month, Manager
shall correct such over or under payment by adjusting the Distribution Amount for the following
month or months, as necessary, and shall notify Owner in writing of any such adjustment.
Notwithstanding the foregoing, in the event that any Lender requires a cash management system that
is inconsistent with the terms of this Section 6.3 but consistent with the terms of Section 12.2,
the cash management system required by such Lender shall control, and Manager shall comply in all
respects with the cash management system required by such Lender.

 

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6.4. Exculpation of Manager. All expenses incurred by Manager in performing its
obligations under this Agreement, other than overhead costs for Manager’s corporate and regional
offices (except for Travel Expenses and personnel costs as permitted by this Agreement), shall be
borne by Owner and, to the extent funds are available, paid out of the Operating Account by
Manager. All debts and liabilities to third parties which Manager incurs as Manager under this
Agreement, whether incurred in the name of Owner, Manager or the name of the Hotel or any variation
of such name used as a trade name, are and shall be the obligations of Owner, and Manager shall not
be liable for any such obligations by reason of its management, supervision and operation of the
Hotel except in the case of Manager’s Grossly Negligent or Willful Acts.

6.5. Reimbursement of Manager. Manager shall be reimbursed for all Out-of-Pocket
Expenses and Travel Expenses incurred in rendering services to the Hotel or Owner to the extent
such Out-of-Pocket Expenses and Travel Expenses are provided for in the Annual Budget, required or
permitted by this Agreement or otherwise approved by Owner, which approval shall not be
unreasonably withheld, conditioned or delayed. Nothing in this Agreement, however, shall require
Manager to advance or otherwise expend any of its own funds in connection with the operation of the
Hotel or ownership of the Property. If Manager pays any amount for which Owner is responsible
under this Agreement, Manager shall be entitled to reimbursement thereof by Owner. Manager may pay
to itself the Out-of-Pocket Expenses and Travel Expenses or other reimbursements from the Operating
Account. The Out-of-Pocket Expenses and Travel Expenses shall be payable to Manager monthly, in
arrears.

6.6. Reserve Fund. (a) Subject to Section 6.6(b) Manager shall, at the discretion of
Owner, establish and maintain either in the operating account or in a separate reserve account, (in
either case, the “Reserve Fund”) reserves in the name of and for the benefit of Owner, for
the purpose of funding routine Capital Expenditures and the replacement of and additions to FF&E on
an annual basis in accordance with the Franchise Agreement and the Mortgage (for avoidance of
doubt, there shall be only one Reserve Fund, and such Reserve Fund shall be subject to the
Franchise Agreement and the Mortgage). All interest earned or accrued, if any, on amounts invested
from the Reserve Fund shall be added to the Reserve Fund (but shall not be credited against Owner’s
obligations to fund the Reserve Fund in accordance with this Section 6.6). If the Reserve Fund is
maintained in a separate account, Hotel Employees and Home Office Employees designated by Manager
from time to time, which shall be bonded or otherwise insured, shall be the sole and exclusive
authorized signatories of such account. The amount deposited in or imputed to the Reserve Fund in
each year shall be specified in the Annual Budget; provided, however, that unless Manager and Owner
otherwise agree, or unless a greater amount is required by the Lender, the amount of the Reserve
Fund shall be four percent (4%) of the total Gross Revenue derived from the operation of the Hotel
during each Contract Year (“Replacement Reserves”). Manager shall comply with any
requirements imposed by any Lender relating to the Reserve Fund. Notwithstanding Section 6.6(a),
if the Franchise Agreement and the Mortgage do not require a reserve for funding Capital
Expenditures and the replacement of and additions to FF&E, then Manager shall not deposit funds
into a Reserve Fund, but for purposes of calculating Net Operating Income, an amount equal to four
percent (4%) of total Gross Revenues for each Contract Year through the end of the Term shall be
treated as Replacement Reserves.

 

33

 

6.7. Working Capital Funds. Owner further agrees to provide funds to Manager
sufficient to maintain a cash balance in the Operating Account equal to or greater than the Working
Capital Amount upon submission by Manager to Owner of a cash flow statement and such other
information as Owner shall reasonably request demonstrating that the Hotel does not have sufficient
cash flow to pay the costs of operations of the Hotel for the succeeding three-month period, which
amount shall be used by Manager solely in connection with operation of the Hotel and performance of
the responsibilities of Manager under this Agreement.

ARTICLE VII

BOOKS AND RECORDS

7.1. Books of Account. The books of account for the Hotel shall be kept and
maintained by Manager on an accrual basis and in accordance with GAAP and the Uniform System,
applied on a consistent basis, subject to year-end adjustments and disclosures. All books of
account for the Hotel shall be closed on a monthly basis.

7.2. Monthly Financial Information. Manager shall provide, or cause to be provided,
in a written format and an electronic file format its standard monthly financial reporting package
to Owner at the earliest practicable time (with Manager using commercially reasonable efforts to
provide the following within twenty (20) days after the end of each calendar month), but in no
event later than thirty (30) days after the end of each calendar month (commencing not later than
thirty (30) days after the first full calendar month after the Commencement Date) and containing
the following:

(A) a balance sheet, (B) an income statement, (C) a comparison of the actual monthly results with
the Annual Budget and prior Contract Years, (D) a statement of cash flow (i.e., reconciling net
income to distributable cash), (E) a group booking pace report, and (F) to the extent available, a
“STAR” report.

7.3. Annual Financial Information. At Owner’s request, at the earliest practicable
time, but in no event later than April 30th of each year, Manager shall provide annual audited
financial statements for the Property including, as supplementary schedules, a consolidated balance
sheet, cash flow statement and income statement for the Hotel. Such annual financial statements
shall be audited by PricewaterhouseCoopers or any of the other so called “Big Four” accounting
firms, or such other independent firm of certified public accountants selected by Manager and
reasonably approved by Owner. The costs of such audit (the “External Audit Fee”) shall be
paid from the Operating Account.

7.4. Location of Books and Records. The books and records of the Property shall be
kept at all times at the offices of Manager located at 545 East John Carpenter Freeway, Suite 1400,
Irving, Texas 75062, and shall, during ordinary business hours and upon reasonable advance notice,
along with any bookkeeping or accounting equipment used by Manager, be open to examination for the
purposes of inspection or audits by Owner or its representatives. Any such inspection or audit
shall be at Owner’s sole expense, unless such inspection or audit reveals a discrepancy in excess
of five percent (5%) adverse to Owner in a Distribution Amount, the Management Fees or other
calculation made by Manager, in which case Manager shall bear the
cost of such audit. Manager shall cooperate with Owner or its representatives in such
inspection or audit. Manager shall ensure such control over accounting and financial transactions
as shall be reasonably required to protect Owner’s assets from loss or diminution due to error,
negligence or willful misconduct on the part of employees of the Property or its Affiliates.

 

34

 

7.5. Sarbanes Oxley. In connection with Owner’s responsibility to maintain effective,
internal controls over financial reporting and to comply with the requirements of the
Sarbanes-Oxley Act of 2002, as amended (“Sarbanes-Oxley”), Manager hereby agrees to provide
reasonable access to the Hotel, including the Hotel’s books and records, and such reasonable
assistance that Owner may require in order to conduct the activities necessary to satisfy such
responsibility, including but not limited to activities stipulated by the Public Company Accounting
Oversight Board in its release 2004-1, or other similarly promulgated guidance by other regulatory
agencies. Manager shall use commercially reasonable efforts in its design and execution of
internal controls to avoid any significant deficiencies that could adversely affect the Hotel’s
ability to record, process, summarize and report financial data, as such terms are interpreted by
Sarbanes-Oxley. However, at Manager’s expense, Manager may instead elect to pay for substantive
audit procedures designed to confirm the accuracy of financial data which could be adversely
affected by any significant deficiency in the internal controls. In addition to any other fees and
expenses paid to Manager pursuant to this Agreement, Manager shall be reimbursed by Owner for any
reasonable expenses that Manager may incur in providing such assistance requested by Owner pursuant
to this Section 7.5 to the extent such expenses are not paid as part of the Centralized
Services or some other allocation. Owner agrees to provide Manager with appropriate notice
regarding the timing of the conduct of the activities anticipated in this Section 7.5.

7.6. Other Reports and Information. Manager shall prepare and promptly deliver such
other reports and financial information as Owner may reasonably request from time to time, and the
cost of any such additional reports shall be paid by Owner as an Owner’s Expense.

ARTICLE VIII

CAPITAL EXPENDITURES

8.1. Routine Capital Expenditures and Acquisitions of FF&E. Manager shall use the
funds in the Reserve Fund for (i) new or replacement FF&E when Manager reasonably believes such
purchase to be necessary or desirable and as required under the Property Documents and as set forth
in the Annual Budget, (ii) Routine Capital Expenditures as are set forth in the Annual Budget,
(iii) such purposes as are otherwise permitted or required in accordance with this Agreement, and
(iv) such purposes as are otherwise approved by Owner, which approval shall not be unreasonably
withheld, conditioned or delayed. Manager shall recommend that Owner purchase major items of new
or replacement FF&E when Manager reasonably believes such purchase to be necessary or desirable and
as required under the Franchise Agreement or to maintain the Operating Standard. All items of FF&E
replaced or added at the Hotel shall be and become the property of Owner.

 

35

 

8.2. Capital Expenditures. Manager shall make all approved Capital Expenditures that
are (i) included in the Renovations Budget, (ii) otherwise approved by Owner, which approval shall
not be unreasonably withheld, conditioned or delayed, (iii) subject to Section 3.3(z), required
under the Franchise Agreement, or (iv) permitted as emergency expenditures pursuant to Section 5.7.
Notwithstanding the foregoing or anything to the contrary herein, if Manager makes, undertakes,
supervises or oversees any Capital Expenditures in excess of $1,000,000 in the aggregate in
accordance with this Agreement, Manager shall receive the Capital Expenditure Fee in connection
with such Capital Expenditures. Manager shall not incur any Capital Expenditures except in
accordance with the preceding sentence. Manager shall notify Owner of the amount of any Capital
Expenditures required in connection with any renovations to be performed under this Agreement, and
within ten (10) Business Days after such notice, Owner shall provide sufficient amounts to Manager
for such Capital Expenditures.

8.3. Additional Capital Expenditure Requirements. Owner may arrange to purchase and
install items constituting Renovations by itself or by third parties hired by Owner or may
authorize Manager to do so subject to reasonable supervision and specification requirements and
conditions prescribed by Owner. Unless otherwise excused from the following requirements by Owner,
Manager shall obtain at least three (3) written estimates from qualified bidders for any Renovation
included in the Renovations Budget or otherwise approved by Owner or permitted by this Agreement if
the cost of such project is reasonably expected to exceed $50,000. All Renovations shall, at
Owner’s election, be planned and supervised by an architect, designer, inspector or general
contractor recommended by Manager and approved by Owner, which approval shall not be unreasonably
withheld, conditioned or delayed. Manager shall coordinate and supervise all construction
activities (including, without limitation, tenant improvements, tenant refurbishment, common area
refurbishment, maintenance and repairs) on the Property.

8.4. Capital Expenditure Fee. All Capital Expenditures (including, without
limitation, alterations required for the occupancy of new tenants) requiring expenditures in excess
of $100,000 shall, at Owner’s election, be planned and supervised by an architect, designer,
inspector or general contractor recommended by Manager and approved in writing by Owner. If Owner
approves any Capital Expenditure project which is projected to cost in excess of $1,000,000 then
Owner may, but shall not be obligated to, engage Manager or an Affiliate of Manager, to be the
project manager for such project, in which case Manager shall be entitled to be paid the Major
Capital Management Fee for such project.

8.5. Technical Advice. Owner acknowledges that any review, advice, assistance,
recommendation or direction provided by Manager after the Commencement Date with respect to the
design, construction, equipping, furnishing, decoration, alteration, improvement, renovation or
refurbishing of the Hotel (i) is intended solely to assist Owner in the development, construction,
maintenance, repair and upgrading of the Hotel and Owner’s compliance with its obligations under
this Agreement, and (ii) does not constitute any representation, warranty or guaranty of any kind
whatsoever that (a) there are no errors in the plans and specifications, and (b) there are no
defects in the design or construction of the Hotel or installation of any building systems of FF&E,
or (c) the plans, specifications, construction and installation work will comply with all
Applicable Laws (including the ADA). Accordingly, neither Manager nor its Affiliates shall have
any liability whatsoever to Owner or any other
person for any (1) errors in the plans and specifications, (2) defects in the design or
construction of the Hotel or installation of any building systems or FF&E, or (3) noncompliance
with any engineering and structural design standards or Applicable Laws, except in each cast to the
extent such liability arises from Manager’s Grossly Negligent and Willful Acts.

 

36

 

8.6. Competitive Bidding. All contracts for FF&E and Capital Improvements in excess
of $50,000 shall be awarded on the basis of competitive bidding, solicited in the following manner:

(a) A minimum of three (3) written bids shall be obtained for each purchase or contract over
$50,000.

(b) Each bid will be solicited in a uniform format.

(c) Manager may accept a low bid without prior approval from Owner if the expenditure is
provided in the applicable approved Annual Budget or is an approved Capital Expenditure.

(d) If Manager desires to accept a bid other than the lowest bid, then Manager shall so advise
Owner in writing and recommend that such bid be accepted with support for such recommendation.

(e) Owner shall have the right to accept or reject any and all bids for repair or capital
expenditures that are not the lowest bid; such acceptance shall not be unreasonably withheld or
delayed.

(f) Manager may request in writing that Owner waive competitive bidding rules.

In its operation of the Hotel under this Agreement, Manager may not purchase goods or supplies
from itself, or any of its Affiliated or subsidiary companies or individuals without the prior
written consent of Owner.

ARTICLE IX

INSURANCE

9.1. Insurance Coverage. Manager shall procure and maintain, such commercial general
liability, and other insurance coverage as is set forth on Exhibit C attached hereto. Owner
shall procure and maintain such property insurance coverage as set forth on Exhibit C;
provided, however, that Owner may direct Manager to obtain such property insurance coverage. In
connection with any significant construction at the Hotel, Manager shall cause the general
contractor to maintain, with a reputable insurer, Builder’s Risk and General Liability insurance as
set forth on Exhibit C attached hereto. Owner or Manager may increase or decrease the
limits of the required insurance coverage and may carry other or additional reasonable and
customary insurance. All premiums of for insurance coverage obtained pursuant to this Agreement
shall constitute Fixed Expenses or Operating Expenses, as applicable. In no event
shall insurance coverage be less than that required by any Lender, if applicable, or less than
necessary to comply with Applicable Laws.

 

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9.2. Insurance Policies.

(a) All insurance coverages provided for under this Article IX shall be effected by policies
issued by insurance companies (i) that are authorized to do business in the state in which the
Hotel is located, and (ii) that are of good reputation and of sound and adequate financial
responsibility, having a Best Rating A-VII or better, or a comparable rating if Best ceases to
publish its ratings or materially changes its rating standards or procedures. Subject to Section
9.3, insurance may be carried under blanket policies covering the Hotel and other locations,
provided such policies otherwise comply with the requirements of Exhibit C attached hereto.

(b) All Certificates of Insurance shall be delivered on or before the Commencement Date by the
Party procuring such insurance in accordance with this Article IX to Owner and Manager and to any
Lender at such address as such Lender shall designate. All insurance policies shall be renewed and
proof of such renewals shall be delivered to Owner, Manager and any Lender at least ten (10) days
prior to their respective expiration dates or as otherwise required under any Mortgage.

(c) All insurance policies procured by either Owner or Manager shall be written in the name of
Owner or Manager, as applicable, with Owner, Manager, Lender and any other appropriate parties
designated by Owner or Manager being named thereon as additional insureds (as their respective
interests may appear), as applicable, except for worker’s compensation insurance and other
insurance which shall name Manager as the insured party as it is impractical and inappropriate to
name other parties as additional insureds.

(d) All casualty insurance policies shall be endorsed specifically to the effect that the
proceeds of any building, contents or business interruption losses shall be made payable to Owner.
All such policies of insurance shall also be endorsed specifically to the effect that such policies
shall not be canceled or materially changed without at least thirty (30) days prior written notice
to Owner, any Lender and Manager. Neither Party shall have any claim against the other Party with
respect to the failure of any insurance carrier to provide the coverage or protection placed with
such carrier as contemplated by this Agreement.

(e) All coverage limits and deductible amounts set forth in Exhibit C attached hereto
shall be reviewed by the Parties from time to time for the purpose of determining the coverage
limits and deductible amounts then appropriate for properties similar in type and construction to
the Hotel and for the nature of the business being conducted. The Parties shall cooperate
reasonably to arrive at an agreement on such matters.

9.3. Manager’s Blanket Insurance Coverage. Manager may, at its option (but shall not
be obligated to), make available to Owner the opportunity to participate in blanket insurance
policies carried by Manager for other properties including, without limitation, the Managed Hotels,
and which cover all or any portion of the insurance coverage specified in Exhibit C
attached hereto, which coverage amounts shall apply to the Hotel on a per property
basis. In such event, notwithstanding the provisions of Section 9.1 and Exhibit C
attached hereto, Manager shall be responsible for procuring and maintaining as an Operating Expense
all insurance coverage represented by such blanket policies.

 

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9.4. Notice of Claims. Each Party shall each give prompt notice to the other Party of
any claims made against either Party, both Parties or the Hotel and shall cooperate fully with the
other Party and with any insurance carrier to the end that all such claims will be properly
investigated and defended. Manager shall use commercially reasonably efforts to cause all Hotel
Employees to cooperate with the investigation and defense of such claims. Neither Owner nor
Manager shall hire any attorneys to defend any such claim against the other without the other’s
consent, which shall not be unreasonably withheld or delayed.

9.5. Settlement of Claims. Manager may settle any insurance claim; provided, that any
such settlement which results in uninsured liability to Owner or the Hotel in excess of $10,000
shall require the approval of Owner, which approval may be withheld, conditioned or delayed in
Owner’s sole discretion.

9.6. Occurrence Basis. All policies of insurance procured under this Article IX or as
set forth on Exhibit C attached hereto shall be written on an “occurrence” basis to the extent
obtainable.

9.7. Waiver of Subrogation. The public liability and “all risk” property insurance
policies required to be carried hereunder shall, to the extent obtainable, contain an agreement by
the insurers insuring such policies waiving any and all rights of subrogation against any Party in
case of such Party’s negligence or default in connection with any loss or damage covered by such
insurance policy.

ARTICLE X

DAMAGE OR DESTRUCTION AND CONDEMNATION

10.1. Partial Destruction. If the Hotel experiences a Partial Destruction at any time
or times during the Term, then Owner shall with due diligence repair, rebuild or replace the
damaged or destroyed portions of the Hotel (such repairing, rebuilding or replacing being herein
called “Restore” or “Restoration”) so that after such Restoration the Hotel shall
be substantially the same as prior to the occurrence of such Partial Destruction; provided,
however, that if the insurance proceeds actually received by Owner plus any deductible amount are
insufficient to restore the Hotel to the same condition as prior to such Partial Destruction, then
Owner will not be obligated to Restore the Hotel. If Owner does not commence such Restoration
(including the planning, retention of architects and other consultants and other similar work
necessary to repair, rebuild or replace the Hotel) within ninety (90) days after the occurrence of
such Partial Destruction, or fails to complete the work diligently, Manager may, at its option and
as its sole and exclusive remedy, terminate this Agreement by written notice to Owner and, ten (10)
days after the giving of such notice (or such longer period as may be required to protect against
liability under the WARN Act as required pursuant to Section 3.7(e)), this Agreement shall
terminate. Subject to the provisions of this Article X, Owner shall use its reasonable efforts to
obtain all consents necessary to make insurance proceeds available for application to such
repairing, rebuilding or replacing.

 

39

 

10.2. Complete Destruction. If the Hotel experiences a Complete Destruction at any
time during the Term, regardless of whether the proceeds of any insurance policies actually
received by Owner are sufficient or insufficient to Restore the damaged or destroyed portions of
the Hotel, Owner will, at its election, either (a) with due diligence Restore the damaged or
destroyed portions of the Hotel so that after such Restoration the Hotel shall be substantially the
same as prior to such damage or destruction, or (b) terminate this Agreement. If Owner elects to
pursue the repair, rebuilding and replacement of the Hotel pursuant to clause (a) of this Section
10.2, and thereafter fails to either commence such work (including the planning, retention of
architects and other consultants and other similar work necessary to repair, rebuild or replace the
Hotel) or terminate this Agreement within ninety (90) days after the occurrence of a Complete
Destruction, or fails to complete the work diligently, Manager, as its sole and exclusive remedy,
may terminate this Agreement by written notice to Owner and, ten (10) days after the giving of such
notice (or such longer period as may be required to protect against liability under the WARN Act as
required pursuant to Section 3.7(e)), this Agreement shall terminate. Subject to the provisions of
this Article X, Owner shall use reasonable efforts to obtain all consents necessary to make
insurance proceeds available for application to such Restoration if Owner elects not to terminate
this Agreement.

10.3. Condemnation. If at any time during the Term the whole or any part of the
Property shall be taken by any lawful power or authority by means of condemnation, taking of
property, down-zoning, or other compulsory acquisition, and such condemnation, taking of property,
down-zoning or other compulsory acquisition renders it unreasonable or imprudent, in the opinion of
Manager and Owner each acting reasonably, to use and operate the remaining portion of the Hotel in
accordance with the Operating Standard, then either Owner or Manager may, within thirty (30) days
of the occurrence of such condemnation, taking of property, down-zoning or other compulsory
acquisition, terminate this Agreement and, ten (10) days after the giving of such notice (or such
longer period as may be required to protect against liability under the WARN Act as required
pursuant to Section 3.7(e)), this Agreement shall terminate. In any condemnation proceeding, each
of Owner and Manager shall, to the extent permitted by Applicable Laws, claim separately for any
award to which it is entitled and cooperate with the other to enable the other to pursue its claim.

10.4. Reinstatement. If Owner terminates this Agreement in accordance with this
Article X, but notwithstanding such termination, Owner commences Restoring the Property as a Hotel
within twelve (12) months after such termination, then at the option of Manager exercised in
writing within thirty (30) days following Manager’s awareness that such Restoration has commenced,
such termination shall be of no further force or effect, this Agreement shall be reinstated
(subject to any other termination rights contained in this Agreement) and Manager shall be entitled
to recover the Base Management Fee that would have been payable during the period between such
termination and reinstatement had this Agreement been in effect, based on the actual Gross Revenue
received by Owner during such period (including business interruption insurance proceeds received
by Owner during such period).

 

40

 

10.5. Operating Expenses following Casualty. If the Property suffers damage or loss
that results in an interruption in the operation of the Property, then (a) Owner shall nevertheless
be obligated to pay all expenses of operating and maintaining the Property (at the level that is
reasonably determined by Manager and Owner to be practicable given the damage or loss that has
occurred) regardless of whether there are available to Owner any business interruption insurance
proceeds to cover such amounts unless and until this Agreement is terminated in accordance with
this Article X and (b) if Owner does not terminate this Agreement in accordance with this Article
X, Owner shall pay to Manager all amounts that would be due to Manager hereunder had such damage or
loss not occurred, including the Management Fees and Out of Pocket Expenses for the period of the
business interruption, provided that such payments shall be based upon the actual proceeds received
by Owner under any business interruption insurance or condemnation award which are specifically
attributable to such amounts.

ARTICLE XI

REPRESENTATIONS AND WARRANTIES OF OWNER AND MANAGER

11.1. By Owner. Owner hereby makes the following representations and warranties, each
of which is material and is being relied upon by Manager:

(a) Owner is a Delaware limited liability company, validly existing, and in good standing
under the laws of the State of Delaware and is qualified to do business in the State of New York;

(b) Owner has the full legal right, power and authority to enter into this Agreement (and all
other agreements and instruments to be executed by Owner hereunder) on its behalf, as applicable,
and as purchaser under the Purchase Agreement, to perform its obligations hereunder (and
thereunder) and to consummate the transactions contemplated hereby. The execution, delivery and
performance of this Agreement (and all such other agreements and instruments) have been duly and
validly authorized by all necessary organizational action on the part of Owner, and no other action
is requisite to the valid and binding execution, delivery and performance of this Agreement (and
all such other agreements and instruments) by Owner, except as otherwise expressly set forth
herein. The execution and delivery by Owner of this Agreement (and all such other agreements and
instruments) and the consummation by Owner of the transactions contemplated hereunder, do not
violate (i) any agreement or instrument to which Owner is a party, (ii) any Applicable Laws, or
(iii) any laws, rules, regulations or orders of Governmental Authorities binding upon Owner;

(c) Except as expressly herein otherwise provided, the representations and warranties of Owner
set forth in this Agreement shall be true in all material respects on and as of the Commencement
Date as if those representations and warranties were made on and as of such time;

(d) As of the Commencement Date, Owner has delivered a true and complete copy of the Franchise
Agreement, if any, to Manager and shall promptly deliver copies of any amendments or other
modifications to Manager upon execution thereof;

 

41

 

(e) As of the Commencement Date, the Franchise Agreement, if any, is in full force and effect
and neither Franchisor nor Owner is in default thereunder and Owner has not received or delivered
any written notice of default thereunder; and

(f) As of the Commencement Date, there are no other management agreements in effect (other
than this Agreement) providing for the management and operation of the Hotel.

11.2. By Manager. Manager hereby makes the following representations and warranties,
each of which is material and is being relied upon by Owner:

(a) Manager is a Delaware limited partnership, validly existing, and in good standing under
the laws of the State of Delaware and is qualified to do business in the State of New York;

(b) Manager has the full legal right, power and authority to enter into this Agreement (and
all other agreements and instruments to be executed by Manager hereunder), to perform its
obligations hereunder (and thereunder) and to consummate the transactions contemplated hereby. The
execution, delivery and performance of this Agreement (and all such other agreements and
instruments) have been duly and validly authorized by all necessary organizational action on the
part of Manager, and no other action is requisite to the valid and binding execution, delivery and
performance of this Agreement (and all such other agreements and instruments) by Manager, except as
otherwise expressly set forth herein. The execution and delivery by Manager of this Agreement (and
all such other agreements and instruments) and the consummation by Manager of the transactions
contemplated hereunder, do not violate (i) any agreement or instrument to which Manager is a party,
(ii) any Applicable Laws, or (iii) any laws, rules, regulations or orders of Governmental
Authorities binding upon Manager;

(c) Except as expressly herein otherwise provided, the representations and warranties of
Manager set forth in this Agreement shall be true in all material respects on and as of the
Commencement Date as if those representations and warranties were made on and as of such time.

ARTICLE XII

TRANSFERS

12.1. Restrictions on Transfers.

(a) Except as expressly provided herein, neither Party may effect a Transfer without the prior
written consent of the other Party; provided that:

(1) So long as no Event of Default attributable to Manager has occurred and remains
uncured, Manager shall have the right, without Owner’s consent, to effect a Transfer to: (i)
any Affiliate of Manager, or (ii) any Person that acquires, whether by merger,
consolidation, reorganization or purchase of assets, all or substantially all of the
business and assets of the hotel management operations of Manager and its Affiliates;
provided, however, that such Person must have experience and expertise commensurate
to the expertise of Manager and its Affiliates in the operation of hotels comparable to
the Hotel. The assignee must assume and agree to be bound by all of the terms and provisions
of this Agreement pertaining to Manager accruing from and after the date of such Assignment.
At Owner’s request, Manager shall deliver to Owner an executed counterpart of the instrument
effecting any Transfer by Manager and assumption by the assignee.

 

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12.2. Transfer By Owner

(a) So long as no Event of Default attributable to Owner has occurred and remains uncured,
Owner shall have the right, without Manager’s consent, to effect a Transfer to: (i) any Affiliate
of Owner, or (ii) a Qualified Transferee. The assignee must assume and agree to be bound by all of
the terms and provisions of this Agreement pertaining to Owner accruing from and after the date of
such Assignment. At Manager’s request, Owner shall deliver to Manager an executed counterpart of
the instrument effecting any Transfer by Owner and assumption by the assignee.

(b) If either Party desires to effect a Transfer, such Party shall deliver to the other Party
no less than thirty (30) days advance written notice of its intention, which notice shall identify
in reasonable detail the proposed transferee and the owners of the proposed transferee.

(c) Notwithstanding anything to the contrary contained in this Agreement (including, without
limitation, Section 12.1(a) hereof), but subject to the provisions of Article 14 hereof, Owner
shall be permitted, from and after the fifth anniversary of the Commencement Date, to sell the
Hotel to any unaffiliated third party and to terminate this Agreement in connection with such sale;
provided that if such sale occurs prior to the ninth anniversary of the Commencement Date, Owner
shall pay Manager, as Manager’s sole and exclusive remedy, the Termination Fee contemporaneously
with such termination, which Termination Fee shall constitute reasonable liquidated damages and not
a penalty, together with all other amounts payable to Manager under this Agreement, including,
without limitation, the Management Fees, Centralized Services Fees, the Out-Of-Pocket Expenses and
Travel Expenses accrued but unpaid through the effective date of such termination. Owner’s right to
terminate the Agreement pursuant to this Section 12.2(c) shall only be exercised by written notice
not less than thirty (30) days prior to the date such Transfer is to occur (or such longer period
as may be required to protect against liability under the WARN Act as required pursuant to Section
3.7(e)). Notwithstanding anything to the contrary contained in this Agreement, and for the
avoidance of doubt, Owner shall not be obligated to pay Manager the Termination Fee upon a
termination of this Agreement except as expressly provided by this Section 12.2(c).

12.3. Collateral Assignments by Owner. Owner shall have the right to assign its
interest in this Agreement to any Lender without the consent of Manager. Owner shall have the
right to encumber the Property, all related personal property and any part thereof or any interest
therein, including all FF&E and hotel equipment and operating supplies placed in or used in
connection with the operation of the Property and all accounts, receivables and other personal
property relating to the Property, as contemplated in any mortgage that is entered into by or on
behalf of Owner, and to assign to any Lender as collateral security for any loan, all of Owner’s

 

43

 

right, title, and interest in and to this Agreement and this Agreement shall be automatically subordinate to any such secured financing. On request at any time and from time to time
during the term of this Agreement, Manager shall execute, acknowledge and deliver to Owner or any
Lender a subordination agreement and/or an estoppel certificate that confirms the subordination
described in this Section 12.3. Owner shall provide Manager with the name and address of any
Lender. The subordination agreement shall confirm the provisions of Section 4.2 that provides that
the Base Management Fee are not subordinated to Debt Service. Manager shall execute and deliver
the subordination agreement and/or estoppel certificate within ten (10) Business Days of receiving
a request from Owner or Lender, as the case may be. Any estoppel certificate executed and
delivered in accordance with this Section 12.3 shall (i) certify that this Agreement has not been
modified and is in full force and effect (or if there have been modifications, that the same is in
full force and effect as modified and specifying the modifications), (ii) state whether, any
default exists, including any Event of Default, and if so, specifying each Event of Default of
which the signatory has actual knowledge, and (iii) provide any additional information reasonably
requested by Owner or Lender

ARTICLE XIII

EVENTS OF DEFAULT AND TERMINATION

13.1. Events of Default. An event of default (“Event of Default”) under this
Agreement is defined as the occurrence of any of the following:

(a) the failure by a Party (the “Defaulting Party”) to perform, keep or fulfill any
covenant or agreement set forth in this Agreement in any material respect (other than the failure
to make any payments required hereunder), and the continuance of such failure for the longer of (i)
a period of thirty (30) days after receipt by the Defaulting Party of notice thereof from the other
Party hereto (the “Non-Defaulting Party”) specifying such failure, or (ii) in the event
such failure is of a nature that it cannot, with due diligence and in good faith, be cured within
such thirty (30) day period, for so long a period of time as reasonably necessary to prosecute the
curing of such failure with due diligence and in good faith, provided such Defaulting Party shall
commence the curing of such failure within such thirty (30) day period and shall thereafter proceed
with due diligence and good faith and shall cure the same within 60 days of receiving the notice
from the Non-Defaulting Party;

(b) the failure by a Party to make any payments required to be made hereunder to the other
Party and such default is not cured within five (5) days after written notice thereof is given to
the Defaulting Party by the Non-Defaulting Party;

(c) the occurrence of a Bankruptcy/Dissolution Event by or with respect to either Party; or

(d) with respect to Manager only, if, because of any act or omission on the part of Manager,
there shall occur a default under the Franchise Agreement, other than any default which could have
been avoided if Owner had provided Manager with funds requested by Manager to prevent or cure such
default, which may, if uncured, permit Franchisor to terminate the Franchise Agreement and such
default shall continue beyond applicable grace periods, if any;

 

44

 

(e) with respect to Manager only, the fraud, gross negligence, willful misconduct, criminal
conduct or misappropriation of funds of or by, or under the direction of, Manager’s Home Office
Employees or Senior Managers; or

(f) with respect to Manager only, if any act or omission on the part of Manager results in a
violation of Manager’s obligations under Section 17.24 and such violation is not cured
within thirty (30) days after written notice specifying such violation is given by Owner to
Manager.

13.2. Notice of Termination. Upon the occurrence and during the continuation of an
Event of Default, the Non-Defaulting Party may, at its option, terminate this Agreement by giving
the Defaulting Party written notice of such termination. The notice of termination shall specify a
date of termination that shall be at least ten (10) days following the date of delivery of such
notice (or such longer period as may be required to protect against liability under the WARN Act as
required pursuant to Section 3.7(e)). If the Defaulting Party is Manager and Owner elects to
terminate this Agreement in accordance with this Section 13.2, Manager shall not be entitled to a
Termination Fee. In addition to its right of termination, but subject to Sections 17.13 and 17.14,
the Non-Defaulting Party shall be entitled to pursue all other remedies available to it under
Applicable Laws as a result of such Event of Default.

13.3. No Waiver. No waiver by either Party of any Event of Default on the part of the
other Party in the performance, keeping or fulfillment of any covenant, promise, term, condition,
undertaking or obligation of this Agreement shall be construed to be a waiver by such Party of any
other or subsequent Event of Default in performance, keeping or fulfillment of the same or any
other covenant, promise, term, condition, undertaking or obligation of this Agreement.

13.4. Termination by Owner.

(a) Except as expressly provided in this Agreement, including without limitation Article X and
Article XII, neither Party shall have any right to terminate this Agreement.

(b) Notwithstanding anything herein to the contrary, Owner shall have the absolute right to
terminate this Agreement, without payment of any Termination Fee, upon the failure of the following
performance test (the “Performance Test”): if, in any twelve (12) month period beginning on
July 1 of one calendar year and ending on June 30 of the immediately succeeding calendar year
(each a “Termination Test Period”) commencing with the twelve (12) month period beginning July 1,
2015, the Hotel suffers (i) a Shortfall, and (ii) a REVPAR Failure (it being understood that both a
Shortfall and a REVPAR Failure must occur in the same Termination Test Period in order for a
failure of the Performance Test to occur).

 

45

 

(c) Notwithstanding the provisions of subsection (b) above:

(1) On or before each September 1, commencing with September 1, 2016, Manager shall
provide Owner with a statement of REVPAR and Net Operating Income and Owner’s Total
Investment for the immediately preceding Termination Test Period. Owner’s right to terminate
the Agreement with respect to any Termination Test
Period shall only be exercised by written notice (a “Termination Notice”) given
by Owner to Manager within one hundred eighty (180) days following receipt by Owner of such
statements from Manager and shall specify a date of termination not less than thirty (30)
days after the date such notice is delivered (or such longer period as may be required to
protect against liability under the WARN Act as required pursuant to Section 3.7(e));

(2) Owner shall not have the right to terminate this Agreement with respect to any
Termination Test Period if, during the Termination Test Period (A) material renovation or
construction takes place in the Hotel in such year and as a result of such renovation or
construction the Performance Test is failed in such Termination Test Period, or (B) an Event
of Default by Owner has occurred and is continuing and as a result of such Event of Default,
the Performance Test is failed;

(3) If, during any Termination Test Period, one or more Force Majeure Events occurred
that, in the aggregate, after giving effect to the proceeds received from any applicable
business interruption insurance or condemnation award or other compensation payable in
connection with any casualty or condemnation, materially and adversely affects Gross Revenue
or REVPAR in such Termination Test Period, then the Performance Test for such Termination
Test Period shall be equitably adjusted to the extent of such Force Majeure Event.
Notwithstanding the foregoing, the occurrence of any adverse changes in general economic or
market conditions that would otherwise constitute a Force Majeure Event under this Agreement
shall not apply for purposes of this Section 13.4(c)(3); and

(4) Owner shall not have the right to terminate this Agreement under this Section 13.4
with respect to any Termination Test Period if Manager or any of its Affiliates pays to
Owner, within thirty (30) days after Manager’s receipt of a Termination Notice, the amount
of the Shortfall for the Termination Test Period. If Manager or any of its Affiliates
exercises its right to make a Shortfall payment under this Section 13.4(c)(4), then there
shall not be deemed to be a Shortfall for the Termination Test Period for which Manager or
its Affiliates has made such payment. Manager may not exercise the foregoing cure right on
more than one (1) occasion during the Term.

(d) Owner may also terminate this Agreement at any time that (i) Mehdi Khimji, Mahmood Khimji
or trusts for the benefit of either of them or their immediate family members no longer own,
directly or indirectly, at least fifty percent (50%) of the ownership interests in Manager; (ii)
neither Mehdi Khimji nor Mahmood Khimji Controls Manager; or (iii) Manager and/or its Affiliates,
collectively, do not manage at least 1,500 guest rooms in upper-upscale, upscale or luxury hotels
in Manhattan (excluding the Hotel) that each contain at least 100 guest rooms. The market segment
and number of guest rooms of such hotels shall be determined in accordance with Smith Travel
Research definitions. Owner’s right to terminate the Agreement pursuant to this Section 13.4(d)
shall be exercised by Termination Notice given by Owner to Manager which Termination Notice shall
specify a date of termination not less than thirty (30) days after the date such notice is
delivered (or such longer period as may be required to protect against liability under the WARN Act
as required pursuant to Section 3.7(e)). If, prior to Owner’s giving such Termination Notice or, if
Owner gives such Termination Notice, prior to the date specified for such termination, the
circumstances giving rise to Owner’s right to
terminate this Agreement pursuant to this Section 13.4(d) cease to exist, then Owner’s right
to terminate this Agreement pursuant to this Section 13.4(d) shall terminate unless and until such
circumstances re-occur. Notwithstanding anything to the contrary contained in this Agreement, and
for the avoidance of doubt, Owner shall not be required to pay Manager the Termination Fee upon a
termination of this Agreement in accordance with this Section 13.4(d).

(e) This Agreement shall terminate if the Purchase Agreement is terminated prior to closing
thereunder for any reason or fails to close for any reason. Notwithstanding anything to the
contrary contained in this Agreement, and for the avoidance of doubt, Owner shall not be required
to pay Manager the Termination Fee upon a termination of this Agreement in accordance with this
Section 13.4(e).

 

46

 

13.5. Obligations Upon Termination. Upon the termination of this Agreement for any
reason, all assets acquired hereunder, including all cash in the Operating Account or the Reserve
Fund or otherwise, shall be the property of Owner; provided, however, that Owner shall pay Manager
all Management Fees, Centralized Services Fees, Travel Expenses and Out-of-Pocket Expenses payable
through the date of termination. Any obligations incurred in the operation of the Hotel in
accordance with the provisions of this Agreement shall be assumed by Owner following the
termination of this Agreement.

13.6. Transition Upon Termination. Except as otherwise expressly provided herein or
in a written notice to Manager from Owner, on the termination of this Agreement for any reason:

(a) Manager shall have five (5) Business Days after such termination in which Manager shall
remove all personal property owned by Manager from the Property;

(b) Manager shall leave the Hotel in a clean and orderly condition;

(c) Manager shall surrender to Owner all property, documents and any other information (other
than the Manager Proprietary Information) held by Manager on behalf of Owner in connection with
Manager’s operation of the Property and the Hotel including, without limitation, all Hotel Guest
Data, vendor lists, and advance bookings;

(d) Manager shall comply with Section 3.12;

(e) Manager shall otherwise reasonably cooperate with Owner to effect the orderly transition
of management of the Property to a successor manager and shall cooperate with such successor
manager, and the Operating Account, the Reserve Fund shall be immediately transferred as directed
by Owner. Manager shall execute all documents or instruments reasonably requested by Owner in
connection with the management transition, all without consideration therefor, to Owner or its
nominee;

 

47

 

(f) Manager shall execute all documents and instruments reasonably necessary to transfer (if
transferable) and/or assign to Owner or its nominee all licenses, permits and approvals held by
Manager in connection with the operation of the Hotel at no expense to
Manager. With respect to any non-transferable licenses or permits, Manager shall surrender or
agree to surrender corresponding licenses or permits to the extent applicable solely to the Hotel
that are then carried in Manager’s name. Subject to Applicable Law and at Owner’s cost and
expense, Manager shall reasonably cooperate with Owner to continue to hold each liquor license (or
cause an Affiliate of Manger to continue to hold the liquor license, if applicable) for Owner’s
benefit until such liquor licenses can be transferred to Owner, the new manager or Owner’s designee
for a period not to exceed one hundred eighty (180) days following such termination of this
Agreement but only to the extent any such arrangement is permitted by Applicable Law and Manager
receives a creditworthy indemnity in form and substance reasonably acceptable to Manager;

(g) Manager shall assign to Owner or its nominee, if any, and Owner or its nominee, if any,
shall assume, all leases and concession agreements in effect with respect to the Hotel then in
Manager’s name;

(h) Manager shall deliver to Owner or, as Owner may direct, to Owner’s designee, all keys to
the safe deposit boxes in the Hotel, all receipts and agreements relating to such safe deposit
boxes and a complete list of such safe deposit boxes which list shall contain the name and room
number of each depositor. One (1) day prior to the termination date of this Agreement, Manager
will send written notice to guests at the Hotel who have safe deposit boxes advising of the change
of Hotel management and requesting the removal and verification of the contents thereof before the
termination date of this Agreement. All such removals shall be under the supervision of a
representative of Manager and Owner;

(i) All baggage, valises, trunks and other items (collectively, “Baggage”) of guests
and others which have been checked with or left in the care of Manager, and all “lost and found”
items, shall be inventoried, sealed and tagged jointly by Manager and Owner (or Owner’s designee)
on the termination date of this Agreement On such date Manager will deliver to Owner or, as Owner
may direct, to Owner’s designee, all records and books as to the Baggage and any keys to the
Baggage; provided, however, that no Baggage shall be opened. After the termination date of this
Agreement, Owner shall be responsible for all Baggage listed in such inventory;

(j) All books and records for the Hotel that are maintained by Manager pursuant to Article VII
(including Hotel guest records) shall be turned over to Owner so as to ensure the orderly
continuance of the operation of the Hotel. Manager shall deliver, and assign to Owner where
applicable, all maintenance and equipment warranties;

(k) Manager shall prepare and deliver to Owner, within ninety (90) days after such termination
of this Agreement, a final accounting statement with respect to the Hotel (which shall include,
without limitation, any reports required to be delivered by Manager pursuant to this Agreement),
along with a statement of any sums due and payable from Owner to Manager (or Manager to Owner)
pursuant hereto, which statement shall be subject to the approval of Owner, such approval not to be
unreasonably withheld, conditioned or delayed. Within thirty (30) days following the approval by
Owner of such final accounting statement, the Parties shall make whatever cash adjustments are
necessary pursuant to such final accounting statement. Manager and Owner acknowledge that there
may be certain adjustments for which the information may not be available at the time of the final accounting and the Parties agree
to readjust such amounts and make the necessary cash adjustments when such information becomes
available; provided, however, that all accounts shall be deemed final as of the first (1st)
anniversary of the effective date of such termination of this Agreement except in the case of an
ongoing dispute about the accounts in which case the accounts will not be deemed final until such
dispute is resolved;

 

48

 

(l) Manager shall peacefully vacate and surrender the Hotel to Owner on the effective date of
such termination of this Agreement;

(m) Manager shall provide reasonable cooperation and assistance to Owner (i) in facilitating
the orderly transfer of Owner’s records and data contained in any software owned or operated by
Manager, and (ii) to provide for an orderly transition of management functions; and

13.7. Termination Liability. Contemporaneous with and as a condition to any such
termination of this Agreement by Owner, Owner shall (i) comply in all respects, and make all
payments required under, Section 3.7(f)(4)(ii), and (ii) deliver any indemnity agreement required
pursuant to Section 3.7(e).

ARTICLE XIV

RIGHT OF FIRST NEGOTIATION

14.1. Ownership Interest. Owner shall not list the Hotel for sale or otherwise engage
in any active and consistent effort to solicit offers for a sale of all or any part of the Hotel
except that Owner may solicit such an offer if Owner has first complied with the procedures set
forth in this Article XIV.

14.2. Right of First Negotiation. If Owner (or any Affiliate of Owner, as the case
may be) desires to sell all or any portion of Owner’s (or any such Affiliate’s) interest in the
Hotel (or any portion thereof) to an unrelated third party, then Manager (or any Affiliate of
Manager) shall have a fifteen (15) day exclusivity period to negotiate with Owner (or any Affiliate
of Owner) for the acquisition of the Hotel; provided, that Owner (or any Affiliate of
Owner) shall have no obligation to sell the Property to Manager (or any Affiliate of Manager) and
Owner (or any Affiliate of Owner) shall be free to sell the Property on any terms and with any
person or entity.

14.3. Continuing Applicability of Right of First Negotiation. Notwithstanding any
provision of this Agreement to the contrary, other than in connection with a sale or transfer of
the Hotel in accordance with Section 12.2(c) hereof, if Owner sells or transfers the Hotel in
accordance with this Agreement and the buyer or transferee assumes Owner’s obligations under this
Agreement, the provisions of this Article XIV shall be applicable to such buyer or transferee.
Manager shall continue to enjoy the rights granted in Article XIV for so long as this Agreement
remains in full force and effect.

 

49

 

14.4. No Right of First Refusal. This Article XIV shall not be construed as a right
of first refusal or in any way limit or prohibit Owner from responding to and accepting offers to
purchase the Hotel or all or a portion of the Ownership Interests as long as such transaction was
not solicited by Owner without first complying with this Article XIV.

ARTICLE XV

INDEMNIFICATION

15.1. Indemnification by Manager. Manager shall indemnify, defend and hold harmless
Owner and its Affiliates and any of their respective directors, officers, employees, consultants,
agents and representatives from and against any and all claims, demands, losses, costs, expenses,
obligations, liabilities, damages, recoveries and deficiencies, including, without limitation,
interest, penalties and reasonable attorneys fees (collectively, “claims’), which arise, result
from or relate to Manager’s Grossly Negligent and Willful Acts.

15.2. Indemnification by Owner. Owner shall indemnify, defend and hold harmless
Manager and its Affiliates from and against any and all Claims which arise, result from or relate
to (i) the ownership of the Property except to the extent any such Claim arises out of, results
from or relates to Manager’s Grossly Negligent and Willful Acts, and (ii) any other claim or matter
which is expressly made subject to indemnification by Owner under the terms of this Agreement
except to the extent any such Claim arises out of, results from or relates to Manager’s Grossly
Negligent and Willful Acts.

15.3. Indemnification Process. Upon the occurrence of an event giving rise to
indemnification under this Agreement, the Party seeking indemnification shall notify the other
Party hereto and provide the other Party hereto with copies of any documents reflecting the claim,
damage, loss or expense. The Party providing such indemnification is entitled to engage such
attorneys and other persons to defend against the claim, damage, loss or expense as it may choose.
The Party providing indemnification shall pay the reasonable charges and expenses of such attorneys
and other persons on a current basis within twenty (20) days of submission of invoices or bills.

15.4. Survival. The provisions of this Article XV shall survive the expiration or
sooner termination of this Agreement. Notwithstanding any contrary provision of this Article XV,
Owner and Manager mutually agree for the benefit of each other to look first to the appropriate
insurance coverages in effect pursuant to this Agreement in the event any claim or liability occurs
as a result of injury to person or damage to property or as otherwise covered by the insurance to
be maintained hereunder, regardless of the cause of such claim or liability.

 

50

 

ARTICLE XVI

NOTICES

All notices to be given hereunder shall be given in writing and shall be deemed given when
delivered by messenger, by facsimile with confirmed transmission, by over-night courier, or by the
U.S. mail (and, if mailed, shall be deemed received four (4) Business Days after the post-marked
date thereof), with postage prepaid, registered or certified, addressed to the Parties at their
respective addresses referenced below:

	 	 	 	 	 
	 

	 	If to Owner:
	 	c/o DiamondRock Hospitality Company
	 

	 	 	 	3 Bethesda Metro Center
	 

	 	 	 	Suite 1500
	 

	 	 	 	Bethesda, Maryland 20814
	 

	 	 	 	Attention: General Counsel
	 

	 	 	 	Facsimile: 240-744-1199
	 

	 	 	 	Telephone: 240-744-1188
	 

	 	 	 	Email: btennis@drhc.com
	 
	 	 	 	 
	 

	 	with a copy to	 	 
	 

	 	 	 	Willkie Farr & Gallagher LLP
	 

	 	 	 	787 Seventh Avenue
	 

	 	 	 	New York, New York 10019
	 

	 	 	 	Attention: Steven D. Klein, Esq.
	 

	 	 	 	Facsimile: 212-728-9221
	 

	 	 	 	Telephone: 212-728-8221
	 

	 	 	 	Email: sklein@willkie.com
	 
	 	 	 	 
	 

	 	If to Manager:
	 	c/o Highgate Holdings, Inc.
	 

	 	 	 	545 East John Carpenter Freeway
	 

	 	 	 	Irving, Texas 75062
	 

	 	 	 	Attention: Lynne Messina, Esq.
	 

	 	 	 	Facsimile: 972-401-2400
	 

	 	 	 	Telephone: 972-501-5525
	 

	 	 	 	Email: lmessina@highgateholdings.com

The Parties may change their addresses for notices hereunder by such Parties giving notice of
such changes to the other Parties in the manner hereinabove provided. If Manager is given the name
and address of any Lender, Manager shall provide copies of all notices given to Owner to such in
the manner set forth in this Article XVI.

 

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ARTICLE XVII

MISCELLANEOUS

17.1. Relationship of Parties. Manager and Owner hereby agree that this Agreement
creates an agency relationship and nothing contained in this Agreement shall constitute or be
construed to be or to create a partnership, joint venture or lease between Owner, on the one hand,
and Manager, on the other hand, with respect to the Hotel, the Property or the operation thereof.

17.2. Intentionally Omitted.

17.3. No Waiver. Failure on the part of either Party to complain of any action or
non-action on the part of the other Party, no matter how long the same may continue, shall not be
deemed to be a waiver by such Party of any of its rights hereunder. The consent or approval by
either Party to or of any action of the other Party requiring such consent or approval shall not be
deemed to waive or render unnecessary such consent or approval to or of any subsequent similar act.

17.4. Successors and Assigns. Except as herein otherwise expressly provided, the
terms and provisions hereof shall be binding upon and shall inure to the benefit of the respective
permitted successors and assigns of Owner and Manager. Nothing in this Section 17.4 shall be
construed to waive the conditions elsewhere contained in this Agreement applicable to Transfers.

17.5. Time of the Essence. Time is and shall be of the essence of this Agreement and
of each term and provision hereof.

17.6. Governing Law. This Agreement shall be governed exclusively by the provisions
hereof and by the laws of the State of New York, as the same may from time to time exist.

17.7. Partial Invalidity. If any term or provision of this Agreement or the
application thereof to any Person or circumstance shall to any extent be invalid or unenforceable,
the remainder of this Agreement, or the application of such term or provision to Persons or
circumstances other than those to which it is held invalid or unenforceable, shall not be affected
thereby, and each term and provisions of this Agreement shall be valid and enforceable to the
fullest extent permitted by Applicable Laws.

17.8. Interpretation. Words of any gender used in this Agreement shall be held and
construed to and include any other gender, and words singular shall be held to include the plural,
unless the context otherwise requires. The captions or headings used in this Agreement are
inserted and included solely for convenience and shall never be considered or given any effect in
construing the provisions hereof if any question of intent should arise.

 

52

 

17.9. Entire Agreement. No verbal or parole agreements pertaining to this Agreement
shall be binding on Owner or Manager, the entire agreement to be such as is written into this Agreement, and Owner and Manager hereby agree that each has carefully read this
instrument and that the same terms and conditions herein set out are satisfactory.

17.10. Inspection by Owner or Lender. On reasonable advance notice from Lender or
Owner, Manager shall accord to such Person and its agents the right to enter on any part of the
Property at any reasonable time for the purposes of examining, inspecting or making extracts from
the books of account and financial records of the Hotel, which inspection shall be performed in a
manner which minimizes to the greatest extent possible any disruption in the operations of the
Hotel.

17.11. Counterparts/Facsimiles. This Agreement may be executed in counterparts, each
of which when taken together shall constitute one complete agreement. Facsimile or “pdf” signatures
shall be acceptable as if originals, but the Parties agree to deliver an original signature to the
other Parties within two (2) Business Days by reputable courier service.

17.12. Force Majeure Events. In the event that Owner or Manager shall be prevented
from the performance of any act required hereunder (other than the payment of money) by one or more
Force Majeure Events, then performance of such act shall be excused for the period of the delay
resulting therefrom. Manager shall promptly notify Owner following the occurrence of a Force
Majeure Event and the reasonably estimated duration of such event.

17.13. WAIVER OF JURY TRIAL CERTAIN DAMAGES. TO THE EXTENT PERMITTED BY LAW, EACH OF
MANAGER AND OWNER HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVES THE RIGHT WHICH ANY OF
THE UNDERSIGNED MAY HAVE TO A TRAIL BY JURY AND THE RIGHT TO CLAIM OR RECEIVE CONSEQUENTIAL,
INCIDENTAL, SPECIAL, OR PUNITIVE DAMAGES WITH RESPECT TO ANY LITIGATION BETWEEN THE PARTIES,
INCLUDING, WITHOUT LIMITATION, WITH RESPECT TO ANY AND ALL CAUSE OR CAUSES OF ACTION, DEFENSES,
COUNTERCLAIMS, CROSS-CLAIMS, THIRD PARTY CLAIMS, AND INTERVENOR’S CLAIMS, WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT, EQUITY OR OTHERWISE, REGARDLESS OF THE
CAUSE OR CAUSES OF ACTION, DEFENSES OR COUNTERCLAIMS ALLEGED OR THE RELIEF SOUGHT BY ANY PARTY, AND
REGARDLESS OF WHETHER SUCH CAUSES OF ACTION, DEFENSES OR COUNTERCLAIMS ARE BASED ON, OR ARISE OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ITS SUBJECT MATTER, OUT OF ANY ALLEGED CONDUCT OR
COURSE OF CONDUCT, DEALING OR COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR
OTHERWISE. ANY PARTY HERETO MAY FILE A COPY OF THIS AGREEMENT WITH ANY COURT AS CONCLUSIVE EVIDENCE
OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY
AND THE RIGHT TO CLAIM OR RECEIVE CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES.

 

53

 

17.14. ARBITRATION. EXCEPT WITH RESPECT TO MATTERS OR DISPUTES FOR WHICH THIS
AGREEMENT PERMITS THE PARTIES TO REFER THE SAME TO AN EXPERT FOR DETERMINATION (IN WHICH CASE THE PROVISIONS OF SECTION 17.15 HEREOF
SHALL CONTROL) AND WITH RESPECT TO ANY EVENT OF DEFAULT BY OWNERDUE TO FAILURE TO COMPLY WITH
ARTICLE 14, IN THE EVENT OF ANY DISPUTE RELATING TO OR ARISING FROM THIS AGREEMENT, INCLUDING THE
INTERPRETATION OR ENFORCEMENT OF ANY PROVISION CONTAINED IN THIS AGREEMENT, THE DISPUTE SHALL BE
SUBMITTED TO BINDING ARBITRATION PURSUANT TO THE COMMERCIAL ARBITRATION RULES OF THE AMERICAN
ARBITRATION ASSOCIATION, EXCEPT AS OTHERWISE MODIFIED BY THIS SECTION 17.14. THE ARBITRATION SHALL
BE CONDUCTED BY A SINGLE ARBITRATOR, SHALL TAKE PLACE IN NEW YORK, NEW YORK, AND SHALL BE CONDUCTED
IN THE ENGLISH LANGUAGE. THE ARBITRATOR SHALL BE SELECTED BY THE PARTIES WITHIN TEN (10) DAYS OF
THE SUBMISSION OF THE DISPUTE TO THE AMERICAN ARBITRATION ASSOCIATION, EXCEPT THAT IF THE PARTIES
ARE UNABLE TO AGREE UPON AN ARBITRATOR, THE AMERICAN ARBITRATION ASSOCIATION SHALL SELECT THE
ARBITRATOR. THE ARBITRATOR SHALL BE A RETIRED JUDGE OF THE FEDERAL OR STATE COURT OF NEW YORK, NEW
YORK. DISCOVERY SHALL BE ALLOWED BY THE PARTIES PURSUANT TO THE LAWS OF THE STATE OF NEW YORK.
THE ARBITRATION AWARD SHALL BE FINAL AND BINDING UPON THE PARTIES HERETO AND SUBJECT TO NO APPEAL,
AND SHALL DEAL WITH THE QUESTION OF COSTS OF ARBITRATION AND ALL MATTERS RELATED THERETO. JUDGMENT
UPON THE AWARD RENDERED MAY BE ENTERED INTO ANY COURT HAVING JURISDICTION, OR APPLICATIONS MAY BE
MADE TO SUCH COURT FOR AN ORDER OF ENFORCEMENT.

17.15. Expert Resolution. Where this Agreement calls for a matter to be referred to
an Expert for determination, the following provisions shall apply:

A. In the event that either party calls for a determination by Expert pursuant to the terms
hereof, the parties shall have 10 days to agree on an Expert. Each party agrees that it may not
appoint an individual as an Expert if the individual is, as of the date of appointment or within 3
years prior to such date, employed by such party, either directly or as a consultant, advisor, or
representative. If the parties cannot agree within such 10-day period, then each party shall have
an additional ten (10) days to select a firm or individual and, within ten (10) days after such
respective selections, the two (2) respective firms and/or individuals so selected shall select the
Expert. If a party fails to make its respective selection of a firm or individual within the ten
(10) day period provided for above, then the Expert selected by the other party shall select the
Expert. Also, if the two (2) respective firms of individuals selected by the parties shall fail to
select a third firm or individual to be an Expert, then such Expert shall be appointed by the
American Arbitration Association. With respect to any issue hereunder to be referred to an Expert
for determination, the use of the Expert shall be the exclusive remedy of the parties and neither
party shall attempt to adjudicate any dispute in any other forum. The decision of the Expert shall
be final and binding on the parties and shall not be capable of challenge, whether by arbitration,
in court or otherwise;

 

54

 

B. Each party shall be entitled to make written submissions to the Expert, and if a party
makes any submission it shall also provide a copy to the other party and the other party shall have the right to comment on such submission (all within the time periods established
pursuant to Section 11.20.D below). The parties shall make available to the Expert all books and
records relating to the issue in dispute and shall render to the Expert any assistance requested of
the parties. The costs of the Expert and the proceedings shall be borne as directed by the Expert
unless otherwise provided for herein. The Expert may direct that such costs be treated as an
Operating Expense;

C. The Expert shall make its decision with respect to the matter referred for determination by
applying the standard set forth in this Agreement regarding such matter. If this Agreement does
not contain a specific standard regarding such matter, then the Expert shall apply the standards
applicable to first-class hotels in accordance with the Operating Standard, taking into
consideration the long-term profitability of the Hotel and the requirement that the Hotel be
managed, operated and maintained in accordance with the Operating Standard; and

D. The terms of engagement of the Expert shall include an obligation on the part of the Expert
to: (i) notify the parties in writing of its decision within forty-five (45) days from the date on
which the Expert has been selected (or such other period as the parties may agree or as set forth
herein); and (ii) establish a timetable for the making of submissions and replies.

17.16. Interest. Unless otherwise required herein, all payments which are required or
permitted to be made by one Party to another Party pursuant to this Agreement (including, without
limitation, the Management Fees, Centralized Services Fees, Travel Expenses and any Out-of-Pocket
Expenses) and that are not made on the due date of payment shall, unless the sole cause of the
failure to make such payments is the failure of Manager to transfer funds from the Operating
Account to itself (but not to Owner) on a timely basis as authorized in this Agreement, bear
interest at the Prime Rate plus six percent (6%) per annum (the “Interest Rate”) from the
due date of payment to the date that payment is made compounded annually and calculated on the
basis of a three-hundred-sixty (360) day year.

17.17. Confidentiality. The Parties agree that the matters set forth in this
Agreement and all statements, reports, projections and other information relating to the operation
of the Hotel are strictly confidential. Except as disclosure may be required to obtain the advice
of professionals or consultants, or financing for the Hotel from prospective lenders, buyers and
investors, or in furtherance of a Transfer or Mortgage permitted by this Agreement, or as may be
required by Applicable Law or by the order of any Governmental Authority, or as may be recommended
by Owner’s counsel in connection with any public filing made by Owner, or as may be reasonably
necessary to obtain licenses, permits and other public approvals necessary for the refurbishment or
operation of the Hotel, each Party shall make every effort to ensure that such information is not
disclosed to the press or to any other third person or entity without the prior consent of the
other Party, which consent may be withheld, conditioned or delayed in such Party’s sole discretion.
The obligations set forth in this Section 17.16 shall survive any expiration or sooner termination
of this Agreement. The Parties shall coordinate with one another on all public statements, whether
written or oral and no matter how disseminated, regarding their contractual relationship as set
forth in this Agreement, or the performance by either of them of their respective obligations under
this Agreement. Notwithstanding the foregoing, the Parties hereby acknowledge that Manager shall
have the authority to release the information regarding the operation of the Hotel to Smith Travel
Research, Inc. (or a similar organization mutually agreed upon by the Parties) and other owners and managers of comparable
properties in the ordinary course of mutual exchange of hotel data as long as such other owners and
managers are advised of the confidential nature of such information.

 

55

 

17.18. Approvals and Recommendations. (a) Owner acknowledges if Manager grants any
consents, approvals or authorizations under this Agreement, or provides any advice, assistance,
recommendation, comments or direction under this Agreement, then neither Manager nor its Affiliates
guarantee success or a satisfactory result from the subject of such consent, approval,
authorization, advice, assistance, recommendation, comments or direction. Accordingly, neither
Manager nor its Affiliates shall have any liability whatsoever to Owner or any other person by
reason of (i) any consent, Approval or authorization, or advice, assistance, recommendation,
comments or direction, given or withheld by Manager or an Affiliate, or (ii) any delay or failure
by Manager or an Affiliate to provide any consent, approval or authorization, or advice,
assistance, recommendation, comments or direction except in the case of Manager’s Grossly Negligent
or Willful Acts.

(b) Manager acknowledges if Owner grants any consents, approvals or authorizations under this
Agreement, or provides any advice, assistance, recommendation, comments or direction under this
Agreement, then neither Owner nor its Affiliates guarantee success or a satisfactory result from
the subject of such consent, approval, authorization, advice, assistance, recommendation, comments
or direction. Accordingly, neither Owner nor its Affiliates shall have any liability whatsoever to
Manager or any other person by reason of (i) any consent, Approval or authorization, or advice,
assistance, recommendation, comments or direction, given or withheld by Owner or an Affiliate, or
(ii) any delay or failure by Owner or an Affiliate to provide any consent, approval or
authorization, or advice, assistance, recommendation, comments or direction except in the case of
Owner’s gross negligent or willful misconduct.

17.19. LIMITATION ON FIDUCIARY DUTIES. OWNER AND MANAGER ACKNOWLEDGE AND AGREE AS
FOLLOWS: THE RELATIONSHIP BETWEEN THE PARTIES SHALL BE THAT OF PRINCIPAL, IN THE CASE OF OWNER, AND
AGENT, IN THE CASE OF MANAGER. NOTHING CONTAINED IN THIS AGREEMENT SHALL CONSTITUTE, OR BE
CONSTRUED TO CONSTITUTE OR CREATE, A PARTNERSHIP, JOINT VENTURE OR LEASE BETWEEN OWNER AND MANAGER
WITH RESPECT TO THE HOTEL. THIS AGREEMENT IS FOR THE BENEFIT OF OWNER AND MANAGER AND SHALL NOT
CREATE THIRD PARTY BENEFICIARY RIGHTS.

THIS AGREEMENT SHALL BE INTERPRETED IN ACCORDANCE WITH GENERAL PRINCIPLES OF CONTRACT
INTERPRETATION, AND ANY LIABILITY BETWEEN THE PARTIES SHALL BE BASED SOLELY ON PRINCIPLES OF
CONTRACT LAW AND THE EXPRESS PROVISIONS OF THIS AGREEMENT. TO THE EXTENT ANY FIDUCIARY DUTIES
EXIST OR MAY BE IMPLIED FOR ANY REASON WHATSOEVER, INCLUDING WITHOUT LIMITATION THOSE RESULTING
FROM THE RELATIONSHIP BETWEEN THE PARTIES OR OTHERWISE (COLLECTIVELY, THE “IMPLIED FIDUCIARY
DUTIES”), THAT ARE INCONSISTENT WITH, OR WOULD HAVE THE EFFECT OF MODIFYING, THE EXPRESS
PROVISIONS OF THIS AGREEMENT, THE TERMS OF THIS AGREEMENT SHALL PREVAIL AND OWNER AGREES THAT
MANAGER MAY TAKE OR REFRAIN FROM TAKING ANY ACTION WITHOUT REGARD TO ANY SUCH IMPLIED FIDUCIARY DUTY. THE FOREGOING PROVISION SHALL NOT BE CONSTRUED AS
A WAIVER OF SUCH DUTIES EXCEPT AND ONLY IN THE CASE WHERE SUCH DUTIES ARE INCONSISTENT WITH, OR
WOULD HAVE THE EFFECT OF MODIFYING, THE EXPRESS PROVISIONS OF THIS AGREEMENT.

 

56

 

FOR THE PURPOSES OF ASSESSING MANAGER’S DUTIES AND OBLIGATIONS UNDER THIS AGREEMENT, THE
PARTIES ACKNOWLEDGE THAT THE TERMS AND PROVISIONS OF THIS AGREEMENT AND THE DUTIES AND OBLIGATIONS
SET FORTH HEREIN ARE INTENDED TO SATISFY ANY IMPLIED FIDUCIARY DUTIES THAT MAY EXIST BETWEEN THE
PARTIES AND THE PARTIES INTEND THAT NO IMPLIED FIDUCIARY DUTIES BE CREATED HEREBY; PROVIDED THAT
MANAGER WILL ACT AS A FIDUCIARY IN CONNECTION WITH THE HANDLING OF FUNDS HEREUNDER.

THE PARTIES ALSO HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVE AND RELEASE ANY RIGHT, POWER OR
PRIVILEGE EITHER MAY HAVE TO CLAIM OR RECEIVE FROM THE OTHER PARTY ANY PUNITIVE, EXEMPLARY,
STATUTORY, OR TREBLE DAMAGES OR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES WITH RESPECT TO ANY BREACH
OF THE IMPLIED FIDUCIARY DUTIES.

FURTHERMORE, OWNER SPECIFICALLY CONSENTS TO ALL TRANSACTIONS AND CONDUCT BY MANAGER AND ITS
AFFILIATES DESCRIBED IN AND SUBJECT TO THE TERMS OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION,
THOSE SET FORTH BELOW, AND WAIVES ANY IMPLIED FIDUCIARY DUTIES THAT MANGER MAY OWE TO OWNER NOW, OR
THAT MAY ARISE IN THE FUTURE, IN CONNECTION WITH SUCH TRANSACTIONS OR CONDUCT. OWNER ACKNOWLEDGES
AND AGREES THAT ITS CONSENT TO THE TRANSACTIONS AND CONDUCT BY MANAGER DESCRIBED IN THIS AGREEMENT,
INCLUDING, WITHOUT LIMITATION, THOSE SPECIFICALLY SET FORTH BELOW, AND ITS WAIVER OF ANY IMPLIED
FIDUCIARY DUTIES OTHERWISE OWED BY MANAGER: (I) HAS BEEN OBTAINED BY MANAGER IN GOOD FAITH; (II) IS
MADE KNOWINGLY BY OWNER BASED ON ITS ADEQUATE INFORMED JUDGMENT AS A SOPHISTICATED PARTY AFTER
SEEKING THE ADVISE OF COMPETENT AND INFORMED COUNSEL; AND (III) ARISES FROM THE OWNER’S KNOWLEDGE
AND UNDERSTANDING OF THE SPECIFIC TRANSACTIONS AND ACTIONS OR INACTIONS OF MANAGERS THAT ARE
NORMAL, CUSTOMARY, AND REASONABLY EXPECTED IN THE HOTEL INDUSTRY GENERALLY.

(a) MANAGER AND ITS AFFILIATES MAY ESTABLISH OR ENGAGE IN ANY BUSINESS OF ANY KIND OR
PARTICIPATE IN ANY INVESTMENT OF ANY KIND AT ANY LOCATION, IN MANAGER’S SOLE DISCRETION. MANAGER
AND ITS AFFILIATES MAY EXERCISE SUCH RIGHTS EVEN THOUGH THESE BUSINESSES OR INVESTMENTS MAY
DIRECTLY OR INDIRECTLY COMPETE WITH THE HOTEL, WITH OWNER OR ITS AFFILIATES OR WITH ANY OTHER
BUSINESS OR INVESTMENT OF OWNER OR ITS AFFILIATES.

 

57

 

(b) MANAGER MAY ELECT TO USE THE SERVICES OF ITS AFFILIATES IN FULFILLING ITS OBLIGATIONS
UNDER THIS AGREEMENT, SUBJECT IN EACH CASE TO THE TERMS OF THIS AGREEMENT.

(c) MANAGER AND ITS AFFILIATES MAY RECEIVE FEES, CHARGES AND REIMBURSEMENTS IN CONNECTION WITH
THE PROVISION OF ITS MANAGEMENT SERVICES AND ITS CENTRALIZED SERVICES TO THE HOTEL AND FOR OTHER
MANAGED HOTELS, SUBJECT IN EACH CASE TO THE TERMS OF THIS AGREEMENT.

(d) MANAGER AND ITS AFFILIATES MAY RECEIVE PAYMENTS, FEES, COMMISSIONS AND REIMBURSEMENTS FROM
VENDORS IN CONNECTION WITH MANAGER’S PURCHASING SERVICES FOR THE HOTEL AND FOR OTHER MANAGED
HOTELS, PROVIDED (I) MANAGER SHALL PROMPTLY DISCLOSE THE SAME TO OWNER, (II) SUCH SERVICES SHOULD
BE PROVIDED TO THE HOTEL ON TERMS NO LESS FAVORABLE THAN THOSE THAT CAN BE OBTAINED FROM OTHER
THIRD PARTY VENDORS NOT PROVIDING SUCH PAYMENTS, FEES, COMMISSIONS OR REIMBURSEMENTS, AND (III) THE
SAME SHALL OTHERWISE BE SUBJECT IN EACH CASE TO THE TERMS OF THIS AGREEMENT.

(e) OWNER SHALL OWN THE HOTEL GUEST DATA AS DESCRIBED IN THIS AGREEMENT, AND MANAGER AND ITS
AFFILIATES MAY USE THE HOTEL GUEST DATA IN ANY REASONABLE MANNER, SUBJECT IN EACH CASE TO THE TERMS
OF THIS AGREEMENT.

(f) MANAGER SHALL BE PERMITTED TO USE THE FUNDS IN THE OPERATING ACCOUNT FOR THE PURPOSES
DESCRIBED IN THIS AGREEMENT (INCLUDING PAYMENT TO MANAGER OR ITS AFFILIATES OF ALL MANAGEMENT FEES
AND OUT-OF-POCKET EXPENSES DESCRIBED IN THIS AGREEMENT), SUBJECT IN EACH CASE TO THE TERMS OF THIS
AGREEMENT.

(g) MANAGER SHALL BE PERMITTED TO INSTITUTE, PROSECUTE AND SETTLE THE LEGAL ACTIONS OR
PROCEEDINGS DESCRIBED IN THIS AGREEMENT, IN ITS NAME OR IN THE NAME OF OWNER, TO THE EXTENT
PERMITTED BY THIS AGREEMENT.

(h) MANAGER AND ITS AFFILIATES SHALL HAVE THE AUTHORITY TO NEGOTIATE AND MAKE AGREEMENT WITH
ANY LABOR UNIONS AND ENTER INTO OR AMEND OR MODIFY IN ANY MATERIAL RESPECT ANY COLLECTIVE
BARGAINING AGREEMENTS WITH LABOR UNIONS IN CONNECTION WITH THE HOTEL, TO THE EXTENT PERMITTED BY
THIS AGREEMENT AND SUBJECT TO THE LIMITATIONS SET FORTH IN THIS AGREEMENT.

17.20. Further Assurances. The Parties shall execute and deliver all other
appropriate documents and other instruments and take any other action necessary to enable the
Parties to perform their respective obligations under this Agreement and to make this Agreement
fully and legally effective, binding and enforceable as between them and as against third parties.

 

58

 

17.21. Amendments. This Agreement may not be modified or amended except by a written
instrument executed by Owner and Manager.

17.22. Owner’s and Manager’s Limited Liability. No member, who is an individual in or
of Owner or Manager, nor general partner, limited partner, member or corporation of any such member
nor any disclosed or undisclosed officers, shareholders, principals, directors, employees,
partners, servants or agents of Owner or Manager shall be personally liable for the performance of
any of Owner’s or Manager’s respective obligations under this Agreement.

17.23. Estoppel Certificate. Owner shall execute and deliver an estoppel certificate
within ten (10) Business Days of receiving a request from Manager. Any estoppel certificate
executed and delivered in accordance with this Section 17.23 shall (i) certify that this Agreement
has not been modified and is in full force and effect (or if there have been modifications, that
the same is in full force and effect as modified and specifying the modifications), (ii) state
whether, to the best knowledge of the signatory of such certificate, any default exists, including
any Event of Default, and if so, specifying each Event of Default of which the signatory has actual
knowledge, and (iii) provide any additional information reasonably requested by Manager.

17.24. REIT Compliance. Manager acknowledges that an indirect owner of the Owner
(“DRHC”) is a real estate investment trust (a “REIT”) within the meaning of
Sections 856-860 of the IRC and the provisions of this Section 25.14 shall apply for so long as the
Hotel is owned by Fee Owner and leased to Owner (or its Affiliate) as part of any ownership
structure that is subject to REIT tax requirements.

	 	a.	 	Eligible Independent Contractor Qualification. Manager
acknowledges that in order for DRHC to qualify as a REIT, Manager must be an
“eligible independent contractor” within the meaning of Section 856(d)(9) of
the IRC and that, in order to be an “eligible independent contractor,” Manager
(i) collectively with any “related person” in respect of Manager (within the
meaning of Section 856(d)(9)(A)), must be actively engaged in the trade or
business of operating hotels for parties that are not “related persons” (within
the meaning of Section 856(d)(9)(A)) with respect to DRHC, Owner or the
“taxable REIT subsidiary” that owns Owner, (ii) may not own (directly or
indirectly, subject to constructive ownership rules of Section 856(d)(5)) more
than 35% of the shares of DRHC, (iii) may not permit one or more persons owning
(directly or indirectly, subject to constructive ownership rules of Section
856(d)(5)) 35% or more of DRHC to also own (directly or indirectly, subject to
constructive ownership rules of Section 856(d)(5)) 35% of the total combined
voting power (or number of shares) or interest in assets or net profits, as
applicable, of Manager, (iv) may not permit wagering activities to be conducted
at or in connection with the Hotel, and (v) may not cause DRHC, Fee Owner,
Owner, Owner or any other subsidiary to DRHC to derive or receive (directly or
indirectly) any income from Manager, other than and (v) may not cause DRHC, Fee
Owner, Owner or any other subsidiary of DRHC to derive or receive (directly or indirectly) any income
from Manager, other than generally non-recurring payments that may be made
by Manager to Owner pursuant to this Agreement that are customarily included
in hotel management agreements between unrelated hotel Managers and owners
(such as “cure” payments and reimbursements for miscalculated amounts) that,
as of the date hereof, are not expected to be made. Manager agrees that, as
of the date hereof, Manager satisfies the foregoing conditions and further
agrees that it shall use its reasonable commercial efforts to maintain such
status.

 

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	 	b.	 	Subleases. Manager agrees that Manager shall not enter into
any assignment, lease, sublease or license (including, but not limited to, with
Manager or an affiliate of Manager, but excluding any equipment lease or
license or other non-income producing lease or license entered in the ordinary
course of the operation of the Hotel and in accordance with this Agreement)
with respect to the Hotel (or any part thereof) without first providing Owner
with a copy thereof. Owner shall have twenty (20) days from the date of its
receipt of such proposed assignment, lease, sublease or license to give written
notice to Manager indicating whether such assignment, lease, sublease or
license could, in Owner’s reasonable judgment, cause Fee Owner to receive or
accrue any amount that would fail to qualify as “rents from real property”
within the meaning of Section 856(d) of the IRC, or any similar or successor
provisions thereto. If Owner provides timely notice of its determination that
such proposed assignment, lease, sublease or license could cause Fee Owner to
receive such an amount, then Manager will not enter into such proposed
assignment, lease, sublease or license. If Fee Owner shall fail to give
Manager such written notice within such twenty (20) day period, Fee Owner shall
be estopped from claiming that such assignment, lease, sublease or license
violates the terms of this Section 17.24.

17.25 Owner Agreement. Owner shall, and Owner shall cause Fee Owner to, execute and
deliver the Owner Agreement attached hereto on the Commencement Date. Manager shall execute and
deliver the Owner Agreement on the Commencement Date.

[remainder of this page intentionally left blank]

 

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WITNESS the execution hereof in several counterparts, each of which shall be deemed an
original, and all of which shall constitute but one and the same instrument, as of the date first
above written.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	MANAGER:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	HIGHGATE HOTELS, L.P.,
a Delaware limited partnership	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Norwich GP LLC,	 	 
	 	 	 	 	a Delaware limited liability company,

its general partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	OWNER:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	DIAMONDROCK NY LEX TENANT, LLC,

a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 	 	 

 

61

 

EXHIBIT A

LEGAL DESCRIPTION OF PROPERTY

ALL that certain plot, piece or parcel of land, situate, lying and being in the Borough of
Manhattan, County of New York, City and State of New York, bounded and described as follows:

BEGINNING at the corner formed by the intersection of the southerly side of East 48th Street
with the easterly side of Lexington Avenue;

RUNNING THENCE easterly along the southerly side of East 48th Street, 174 feet 6 inches;

THENCE southerly parallel with Lexington Avenue, 100 feet 5 inches to the center line of the block;

THENCE westerly along said center line of the block, 174 feet 6 inches to the easterly side of
Lexington Avenue; and

THENCE northerly along the easterly side of Lexington Avenue, 100 feet 5 inches to the point or
place of BEGINNING.

 

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EXHIBIT B

OWNER AGREEMENT

THIS OWNER AGREEMENT (this “Agreement”) is being entered into this
 _____ 
day of May, 2011
(the “Effective Date”), by and among DiamondRock NY Lex Owner, LLC, a Delaware limited
liability company (the “Owner”), DiamondRock NY Lex Tenant, LLC, a Delaware limited
liability company (the “Tenant”), and Highgate Hotels, L.P., a Delaware limited partnership
(the “Manager”).

RECITALS:

WHEREAS, on the Effective Date, Owner acquired the fee interest in certain real property in
New York, New York (the “Acquisition”) that is the current site of the Radisson Lexington
Hotel, located at 511 Lexington Avenue at 48th Street, New York, New York (the
“Hotel”);

WHEREAS, Owner and Tenant have entered into a lease agreement, dated as of the Effective Date,
whereby Owner leases the Hotel to Tenant (the “Lease”);

WHEREAS, Tenant and Manager have entered into that certain Hotel Management Agreement, dated
as of the Effective Date (the “Management Agreement”); and

WHEREAS, Owner, Tenant and Manager desire to set forth certain obligations of the parties with
respect to the ownership and operation of the Hotel and to address certain portions of the
Management Agreement that affect the rights and obligations of all three parties.

NOW, THEREFORE, for the mutual covenants and considerations herein contained and for other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto intending to be legally bound agree as follows:

1. Definitions. Capitalized terms that are not specifically defined herein shall have
the meaning ascribed to such terms in the Management Agreement.

2. Owner Consideration. Owner hereby acknowledges that it: (i) derives and expects
to derive benefits from this Agreement, and (ii) has determined that its execution, delivery and
performance of this Agreement directly benefit Owner, are within the organizational purposes of
Owner, and are in the best interest of Owner.

3. Lease. The Lease shall not be construed to impose any additional obligations or
liabilities upon Manager, and shall not be construed to modify or amend any of the rights and
duties of the parties under the Management Agreement. To the extent that any of the provisions of
the Management Agreement impose a greater or inconsistent obligation on Tenant than the
corresponding provisions of the Lease, Tenant shall be obligated to comply with, and to take all
actions necessary to prevent breaches or defaults under the relevant provisions of the Management
Agreement. Manager shall have no duty, obligation or liability to Owner or Tenant to (a) make any
determination as to whether any expense required to be paid by Manager hereunder is a cost of Owner
or a cost of Tenant or (b) require that any costs or expenses of Owner be paid from funds that can be identified as belonging to Owner, or that other costs and
expenses required to be paid by Tenant be paid from funds that can be identified as belonging to
Tenant; it being the intent of the parties to this Agreement that (i) Owner and Tenant shall look
only to each other and not to Manager with respect to moneys that may be owed one to the other
under the Management Agreement or the Lease and (ii) Manager need only look to Tenant to pay
operating costs of the Hotel and other “Owner” obligations under the Management Agreement.

 

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4. Owner and Tenant Representations and Warranties. Owner and Tenant each hereby
represents and warrants that Owner or its affiliates has and will maintain a direct or indirect
controlling and majority interest in Tenant.

5. Termination of the Lease. The parties agree that the Management Agreement and the
rights and benefits of Manager thereunder shall not be terminated or disturbed in any respect
except in accordance with the terms of the Management Agreement, and not as a result of any
termination of the Lease. Accordingly, if the Lease is terminated for any reason, including,
without limitation, expiration of the term thereof or the “rejection” thereof following Bankruptcy
(as defined below) of Tenant (collectively, a “Lease Termination”), Owner: (a) shall
recognize Manager’s rights under the Management Agreement, (b) agrees that Manager shall not be
named as a party in any eviction or other possessory action or proceeding, and that Manager shall
not be disturbed in its right to manage the Hotel pursuant to the Management Agreement, and (c)
shall at the time of or prior to such Lease Termination either (i) elect not to take either of the
actions described in clause (c)(ii) below, in which case all of “Owner’s” rights, benefits,
privileges and obligations under the Management Agreement with respect to periods after the Lease
Termination shall be assumed directly by Owner, or (ii) cause an Approved Lessee (as defined
below), to (x) succeed to and assume Tenant’s rights and obligations under the Lease, the
Management Agreement, and this Agreement, or (y) enter into a new lease with Owner in substantially
the same form as the Lease, and assume the rights and obligations of Tenant under the Management
Agreement and this Agreement, the intent being that the relationship between any successor Tenant,
Owner and Manager be under the same terms and conditions as the relationship between Tenant, Owner
and Manager hereunder and under the Management Agreement and the Lease. Any successor to Tenant
under clause (c)(ii) above shall be subject to Manager’s consent, which consent shall not be
unreasonably withheld or delayed (an “Approved Lessee”); provided that so long as
DiamondRock Hospitality Company (“DiamondRock”) is a real estate investment trust for
federal income tax purposes (a “REIT”) and Owner is, directly or indirectly, a
majority-owned and controlled subsidiary of DiamondRock, an Approved Lessee shall include any
“taxable REIT subsidiary” (or any subsidiary of such “taxable REIT subsidiary”) that is controlled
by DiamondRock and formed for the purpose of serving as a successor to Tenant.

6. Certain Owner Obligations. Owner agrees that it shall comply with and be bound by
the provisions of the Management Agreement, as it may be amended, in accordance with the terms
thereof and hereof, which relate to restrictions on transfer and restrictions on financing, as if
Owner were “Owner” thereunder.

 

64

 

7. Lease Modifications. Manager agrees that the Lease may be amended or modified from
time to time by agreement between Owner and Tenant, and Owner may exercise any one or more of its
rights under the Lease from time to time at Owner’s discretion (subject, in all events, to the terms and conditions of Section 5 above), all without consent of Manager,
and this Agreement shall continue in full force and effect as to all such renewals, extensions
and/or modifications and all such exercise of rights; provided, however, that the prior consent of
Manager shall be required for any amendment or modification to the Lease with respect to any
provision that, if amended, would be inconsistent with the obligations of the Owner or Tenant
hereunder or under the Management Agreement. Owner and Tenant agree to deliver copies to Manager
of any amendments or modifications of the Lease promptly following the execution and delivery
thereof.

8. Consents Under Management Agreement. Manager will look solely to Tenant to satisfy
the obligations and duties of “Owner” under the Management Agreement, except as otherwise
specifically provided in this Agreement. Without limiting the foregoing, Manager shall seek all
approvals and/or consents required from the “Owner” under the Management Agreement, and elections
to be made by the “Owner” under the Management Agreement, solely from Tenant, and shall be entitled
to rely and act on all approvals and/or consents obtained or received from, or elections made by,
Tenant under any provisions or requirements of the Management Agreement, without any obligation to
confirm the granting of any approval or consent or the making of such election by Owner that may be
required under the Lease or to obtain the signature of any representative of Owner, and Manager
shall not be required to grant any additional time for Owner to instruct Tenant with respect to
such matters. Owner agrees that, in its exercise of rights under the Lease that affect Tenant’s
exercise of rights under the Management Agreement, Owner shall exercise such rights under the same
conditions and principles that apply to Tenant’s exercise of the same rights under the Management
Agreement, and shall, where a dispute is referred for resolution in accordance with the Management
Agreement, agree to be bound by such resolution.

9. Agreements Relating to Tenancy. In order to address the fact that Tenant’s
interest in the Hotel is a leasehold interest, and to address certain other related matters, the
parties agree to the following modifications of the Management Agreement, to be effective for so
long as Tenant’s interest in the Hotel is held through tenancy title as that of Tenant or its
successors or assigns:

A. In connection with a sale, assignment, or transfer of the Hotel, Owner and Tenant
agree that an agreement in form and substance similar to this Agreement (or an assumption of
this Agreement) will be required from the transferee, assignee and/or lessee in order to
ensure that Manager will incur no greater liability, cost or risk of termination of the
Management Agreement as a result of such sale, assignment, or transfer of the Hotel.

B. Owner agrees, where applicable, upon request by Manager pursuant to the terms and
conditions of the Management Agreement, not to unreasonably withhold, condition or delay the
prompt signing, without charge, of applications for licenses, permits or other instruments
necessary for operation of the Hotel, which applications shall be prepared by Manager as
necessary from time to time.

C. Owner and Tenant covenant that (i) Owner holds good and marketable fee title to the
Hotel and (ii) Tenant holds leasehold title to the Hotel, both free and clear of any and all liens, encumbrances or other charges, except for those specifically
permitted pursuant to the Management Agreement.

 

65

 

10. Certain Provisions Regarding Bankruptcy. In the event the Lease shall be rejected
on behalf of Owner under Section 365 of the United States Bankruptcy Code (the “Code”) or
any other applicable law or authority (a “Rejection”), Tenant shall promptly notify Manager
in writing of such Rejection and Tenant shall, as directed by Manager, either treat the Lease as
terminated by such Rejection or retain its rights under the Lease as permitted by the Code or other
applicable law or authority. In the event the Management Agreement is terminated as a result of
Rejection on behalf of Tenant, the Management Agreement shall be assumed by Owner, and Owner shall,
if directed by Manager (but only to the extent such right may be exercised under the Code or other
applicable law and authority), terminate the Lease, subject to the provisions of Section 5 hereof.
Each of Owner and Tenant agrees that it will not join in any involuntary petition against the other
under the Code or any other similar federal or state law providing for debtor relief, without the
consent of Manager.

11. Term. The term of this Agreement shall commence on the date set forth above and
shall run concurrently with the term of the Management Agreement, except as otherwise expressly set
forth herein.

12. Indemnification by Tenant. Tenant acknowledges that, notwithstanding Owner’s
contractual liability to Manager hereunder, Manager is operating the Hotel for the benefit of
Tenant, and Tenant agrees to hold Owner harmless for any loss suffered by Owner as a result of
Tenant’s failure to timely perform all of the obligations of Tenant under the Management Agreement.

13. Notices. All notices and other communications provided for hereunder shall be in
writing, and shall be sent or delivered by the methods and to the addresses for Tenant and Manager
as required under the Management Agreement. The address for Owner for purposes of such notices is,
as of the date hereof:

c/o DiamondRock Hospitality Company

3 Bethesda Metro Center, Suite 1500

Bethesda, Maryland 20814

Attention: General Counsel

Facsimile No. 240-477-1199

 

66

 

14. REIT Compliance. Manager has been advised that DiamondRock is a REIT and agrees
that the provisions of this Section 14 shall apply for so long as the Hotel is owned by Owner and
leased to Tenant as part of any ownership structure that is subject to REIT tax requirements.

A. Owner has advised Manager that in order for DiamondRock to qualify as a REIT,
Manager must be an “eligible independent contractor” within the meaning of Section 856(d)(9)
of the Internal Revenue Code of 1986, as amended (the “IRC”), and that, in order to
be an “eligible independent contractor,” Manager (i) collectively with any “related person”
in respect of Manager (which term includes corporations which are members of the same controlled group of corporations or trades or businesses (whether
incorporated or not) that are under common control and treated as a single employer with
Manager), must be actively engaged in the trade or business of operating hotels for parties
that are not “related persons” with respect to DiamondRock, Owner, Tenant or the “taxable
REIT subsidiary” that owns Tenant, (ii) may not own (directly or indirectly) more than
thirty-five percent (35%) of the shares of DiamondRock or Owner, (iii) may not permit a
person who owns (directly or indirectly) thirty-five percent (35%) or more of DiamondRock or
Owner to also own thirty-five percent (35%) of the total voting power or number of shares
(directly or indirectly) of Manager and (iv) may not permit wagering activities to be
conducted at or in connection with the Hotel. Manager agrees that, as of the date hereof,
the foregoing conditions are satisfied and further agrees that it shall use its commercially
reasonable best efforts to maintain such status for the term of the Management Agreement,
provided that each of Owner and Tenant acknowledges that events outside of Manager’s control
could affect Manager’s eligible independent contractor status. Owner, Manager and Tenant
agree to cooperate in good faith to ensure that Manager retains such status, including in
response to a change in law. In furtherance of the foregoing, Manager agrees that it shall
use its commercially reasonable best efforts to ensure that any assignee under Section
12.1(a)(1) of the Management Agreement shall satisfy the conditions of this Section 14.A at
the time of assignment, provided that Owner and Tenant acknowledge that events outside of
Manager’s control could affect the status of a proposed assignee.

Notwithstanding the foregoing, Manager shall not be required to agree to actions which
impair its rights or increase its obligations under the Management Agreement or this
Agreement, shall have no independent obligation to be or remain familiar with requirements
arising from DiamondRock’s status as a REIT and shall be entitled to reimbursement by Owner
or Tenant of all reasonable costs incurred by Manager in connection with, or as a result of,
cooperation pursuant to this Section 14.A.

B. Manager agrees that Manager shall not enter into any assignment, lease, sublease or
license (including, but not limited to, with Manager or an affiliate of Manager) with
respect to the Hotel (or any part thereof), but expressly excluding the rental of Hotel
rooms and meeting or banquet space in the ordinary course of business of the Hotel, without
first providing Owner with a copy thereof. Owner shall have twenty (20) days from the date
of its receipt of such proposed assignment, lease, sublease or license to give written
notice to Manager indicating whether such assignment, lease, sublease or license could, in
Owner’s reasonable judgment, cause Owner to receive or accrue any amount that would fail to
qualify as “rents from real property” within the meaning of Section 856(d) of the IRC, or
any similar or successor provisions thereto. If Owner provides timely notice of its
determination that such proposed assignment, lease, sublease or license could cause Owner to
receive such an amount, then Manager will not enter into such proposed assignment, lease,
sublease or license. If Owner shall fail to give Manager such written notice within such
twenty (20) day period, Owner shall be estopped from claiming that such assignment, lease,
sublease or license violates the terms of this Section 14.B.

 

67

 

15. Miscellaneous.

A. Modification of this Agreement. No amendment, modification, alteration or
waiver of any provision of this Agreement shall be effective unless it is in writing and
signed by the party against whom enforcement of such amendment is sought, and no waiver of
any provision of this Agreement by any party hereto, and no consent to any departure
therefrom by any party hereto, shall be effective unless it is in writing and signed by the
party against whom enforcement of such waiver or consent is sought, and then such waiver or
consent shall be effective only in the specific instance and for the specific purpose for
which given.

B. No Waiver. No failure by any party hereto to exercise, and no delay in
exercising, any right under the Management Agreement or this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any right preclude any other or
further exercise thereof or the exercise of any other right.

C. Remedies Cumulative. The rights and remedies of any party hereto provided
in the Management Agreement and this Agreement are cumulative and are in addition to, and
not exclusive of, any rights or remedies provided by law or equity.

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

E. Severability. The invalidity, illegality or unenforceability of any one or
more phrases, sentences, clauses or sections contained in this Agreement shall not affect
the validity, legality or enforceability of the remaining portions of this Agreement.

F. Successors and Assigns. The parties hereto shall not assign or transfer or
permit the assignment or transfer of this Agreement without the prior written consent of the
other parties hereto, except that Tenant and Manager shall each have the right and
obligation to assign its respective interest in this Agreement to any party to which its
respective interest in the Management Agreement may be assigned under the terms of the
Management Agreement (and such party shall assume such interest), and Owner shall have the
right and obligation to assign its interest in this Agreement to any party to which its
interest in the Hotel may be assigned (and such party shall assume such interest), subject
to the requirements of the Management Agreement.

G. Captions. The captions and headings of the sections and subsections of this
Agreement are for purposes of convenience and reference only and shall not limit or
otherwise affect the meaning hereof.

H. Time of the Essence. Time shall be of the essence in the performance of
this Agreement.

I. Incorporation of Recitals. The recitals hereto are incorporated herein as
part of this Agreement.

J. Counterparts. This Agreement may be executed simultaneously in several
counterparts, each of which shall be deemed an original, but each of which, taken together
with the others shall constitute one and the same instrument.

 

68

 

[SIGNATURES FOLLOW ON NEXT PAGE]

 

69

 

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

	 	 	 	 	 	 	 	 	 	 	 
	 	 	OWNER:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	DIAMONDROCK NY LEX OWNER, LLC,

a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Name:	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	TENANT:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	DIAMONDROCK NY LEX TENANT, LLC,

a Delaware limited liability company
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Name:	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	MANAGER:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	HIGHGATE HOTELS, L.P.,
a Delaware limited partnership	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Norwich GP LLC,	 	 
	 	 	 	 	a Delaware limited liability company,

its general partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 	 	 

	 	 

 

70

 

EXHIBIT C

INSURANCE COVERAGES AND LIMITS

The Parties shall procure the insurance coverages hereinafter set forth in accordance with
this Agreement and ensure that they are in full force and effect on the Commencement Date and that
they remain in full force and effect throughout the Term of this Agreement:

	 	 	 
	Coverages:	 	Amounts of Insurance
	 
	 	 
	Property

	 	Waiver of Coinsurance
	Builders Risk

	 	Full replacement cost/Agreed Amount
	Earthquake/Flood

	 	Completed value of the Hotel
	Business Interruption

	 	As required
	 

	 	Calculated yearly based on estimated revenues

Subject to Article IX, Manager (or Owner, as the case may be), on behalf of Owner and at
Owner’s expense, shall procure the insurance coverages hereinafter stet forth and ensure that they
are in full force and effect on the Commencement Date and that they remain in full force and effect
throughout the Term. All cost(s) and expense(s) incurred by Manager in procuring the following
insurance coverages shall be Operating Expenses or Fixed Expenses, as applicable, and shall be paid
from the Operating Account:

	 	 	 
	Coverages:	 	Amounts of Insurance
	 
	 	 
	Workers’ Compensation

	 	Statutory
	Employ’s Liability

	 	$1,000,000 
	Fidelity (Employee Dishonesty)

	 	As required
	Money and Securities

	 	As required
	Umbrella/Excess Liability

	 	$25,000,000 
	Commercial General Liability

	 	$1,000,000 each occurrence
	 

	 	$2,000,000 aggregate
	Including:
	 	 
	Products/Completed Operations

	 	$2,000,000 
	Contractual
	 	 
	Personal Injury
	 	 
	Liquor Liability/Dram Shop (if applicable)

	 	$1,000,000 
	 
	 	 
	Limits apply per location
	 	 
	Automobile Liability

	 	$1,000,000 
	Owned Vehicles
	 	 
	Hired Non-Owned Vehicles
	 	 
	Uninsured motorist where required by
statute
	 	 
	Garagekeepers
	 	 
	Automobile Physical Damage (Optional)

	 	(To value if insured)
	Comprehensive and Collision
	 	 
	Employment Practices Liability

	 	$1,000,000 

 

1

 

SCHEDULE 1

Centralized Services

 

2

 

SCHEDULE 2

Permitted Encumbrances

[to be attached]

 

3

 

EXHIBIT 15

REPRESENTATION BRING DOWN CERTIFICATE

Reference is made to that certain Purchase and Sale Agreement, dated as of May
 ________, 2011 (the
“Purchase Agreement”), by and between LEXINGTON HOTEL, LLC, a Delaware limited liability
company (“Seller”), and [_____________], a [_____________] (“Purchaser”).

Pursuant to [Section 18(a)(xv)] [Section 18(b)(vi)] of the Purchase Agreement,
[Seller] [Purchaser] hereby certifies, as of the date hereof, that each of [Seller’s] [Purchaser’s]
representations and warranties set forth in [Section 13(a)] [Section 13(e)] of the
Purchase Agreement are true, complete and correct in all material respects as of the date hereof.

Dated: __________, 2011

[Signature Page Immediately Follows]

 

Exhibit 15-1

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	[SELLER:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	LEXINGTON HOTEL, LLC, a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Lexington Hotel (Holdings), LLC, a Delaware
limited liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Lex Intermediate Mezz, LLC, a
Delaware limited liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	Lex Intermediate Mezz (Holdings), LLC,
a Delaware limited liability company,
its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	By:	 	Lex Sub Mezz (Holdings), LLC, a Delaware limited
liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	By:	 	WH/LEX, LLC, a Delaware limited
liability company, its managing member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 

Name:
	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	By:	 	MERISTAR LEXINGTON PARTNERS, LLC, a
Delaware limited liability company,
its managing member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 

Name:
	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	Title:]	 	 

	 	 	 	 	 	 	 	 	 
	 	 	[PURCHASER:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	                                        ,	 	 
	 	 	a                                         	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	 

	]	 
	 

	 	 	 	 	 	 

	 	 

 

Exhibit 15-2

 

EXHIBIT 16

RADISSON CONSENT

FORM OF ASSIGNMENT AND ASSUMPTION 

OF FRANCHISE AGREEMENT

THIS ASSIGNMENT AND ASSUMPTION OF FRANCHISE AGREEMENT (this “Assignment”), is made
and entered into this
 _____ 
day of May 2011 by and between LEXINGTON HOTEL, LLC, a Delaware limited
liability company, having an address c/o Highgate Holdings, Inc., 870 Seventh Avenue, 2nd Floor,
New York, New York 10019 (“Assignor”), DIAMONDROCK NY LEX TENANT, LLC, a Delaware limited
liability company, having an address c/o DiamondRock Hospitality Company, 3 Bethesda Metro Center,
Suite 1500, Bethesda, Maryland 20814 (“Assignee”), and RADISSON HOTELS INTERNATIONAL, INC.,
a Delaware corporation, having an address [_________] (“Franchisor”).

R E C I T A L S :

WHEREAS, pursuant to that certain Purchase and Sale Agreement (the “Purchase
Agreement”) by and between Assignor and DiamondRock NY Lex Owner, LLC (“Purchaser”),
dated May
 ______, 2011, Assignor has agreed to sell to Purchaser, and Purchaser has agreed to purchase
from Assignor, that certain piece and parcel of land located at 511 Lexington Avenue, New York, New
York, together with the hotel located thereon commonly known as “The Radisson Lexington Hotel” (the
“Hotel”), which Hotel includes, without limitation, approximately 712 guest rooms, meeting
facilities, conference rooms, restaurants, a fitness center and retail facilities. Capitalized
terms used but not otherwise defined shall have the meanings ascribed to such terms in the Purchase
Agreement;

WHEREAS, the Hotel is subject to that certain Amended and Restated License Agreement,
effective as of February 1, 2002, as amended by that certain First Amendment to Amended and
Restated License Agreement, dated as of April 1, 2005, and as further amended by that certain
Second Amendment to Amended and Restated License Agreement, dated and effective as of March 31,
2010 (as amended, the “Franchise Agreement”) by and between Assignor and Franchisor;

WHEREAS, Purchaser and Assignee are each wholly owned indirect subsidiaries of DiamondRock
Hospitality Company;

WHEREAS, it is contemplated that immediately following Purchaser’s acquisition of the Hotel,
Purchaser will enter into a lease of the Hotel with Assignee, with the operations of the Hotel
being conducted on behalf of the Assignee;

WHEREAS, Purchaser and Assignee each desire to continue to operate the Hotel under the
Radisson Hotel brand as a “System Hotel” (as defined in the Franchise Agreement) and Franchisor has
agreed to permit Assignee to so operate the Hotel, subject to and in accordance with the terms set
forth in this Assignment;

 

Exhibit 16-1

 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto covenant and agree as follows:

A G R E E M E N T S :

1. Assignment. Assignor hereby sells, assigns, transfers and conveys to Assignee all
of Assignor’s right, title and interest in and to the Franchise Agreement.

2. Assumption. Assignee hereby assumes the benefits of Assignor and assumes and
agrees to be bound by all of the covenants, obligations, liabilities, and burdens of Assignor under
the Franchise Agreement that arise and accrue from and after the date of this Assignment. Assignor
shall remain liable for the covenants, obligations, liabilities and burdens of Assignor under the
Franchise Agreement to the extent that they arose or accrued prior to the date of this Assignment.

3. Consent and Release. Franchisor hereby consents to the assignment of the Franchise
Agreement from Assignor to Assignee and to the modifications hereinafter set forth. Franchisor
hereby releases Assignor from any and all liability with respect to the representations, covenants,
obligations, liabilities and burdens under the Franchise Agreement, including, without limitation,
the payment of the Termination Fee (as such term is hereinafter defined) to the extent that the
same may arise or accrue from and after the date hereof and from any obligation to pay any
liquidated damages, fees or other sums in connection with any assignment of the Franchise Agreement
and any termination of the Franchise Agreement. Franchisor represents and warrants to Assignor that
it has no claims against Assignor with respect to the Franchise Agreement, other than payment of
any franchise fees accrued but not yet due and payable.

4. Modifications. Franchisor and Assignee hereby agree that, notwithstanding any
provision to the contrary contained in the Franchise Agreement, Assignee shall be entitled to
terminate the Franchise Agreement, in its sole and absolute discretion, at any time prior to March
31, 2012, by furnishing thirty (30) days prior written notice thereof to Franchisor
(“Assignee’s Termination Option”). As a condition to the effectiveness of any such
termination, Assignee shall pay to Franchisor Seven Hundred Fifty Thousand and 00/100 Dollars
($750,000.00) (the “Termination Fee”), which Franchisor acknowledges and agrees shall be in
lieu of, and not in addition to, the payment of any other penalty or termination fee or any other
amount required to be paid to Franchisor pursuant to and in accordance with the terms of the
Franchise Agreement in connection with the termination thereof by the Licensee (as such term is
defined in the Franchise Agreement). If Assignee elects not to exercise Assignee’s Termination
Option or fails to timely deliver such notice of termination in the manner described herein,
Assignee shall have no further right to exercise Assignee’s Termination Option and the Franchise
Agreement shall continue in full force and effect.

 

Exhibit 16-2

 

5. Notices. All notices, demands or other communications required or permitted to be
given in connection with the Franchise Agreement shall be made in accordance with the terms of the
Franchise Agreement, if to Franchisor, to the address set forth in the Franchise Agreement, and, if
to Assignee, addressed as follows:

DiamondRock NY Lex Tenant, LLC

c/o DiamondRock Hospitality Company

3 Bethesda Metro Center

Suite 1500

Bethesda, Maryland 20814

Attention: General Counsel

Telephone No.: (240) 744-1188

Facsimile No.: (240) 477-1199

with a copy to:

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, New York 10019-6099

Attention: Steven D. Klein, Esq.

Telephone: No. (212) 728-8221

Facsimile No.: (212) 728-9221

6. Successors. This Assignment shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, legal representatives, successors and assigns.

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

[Signature Page Immediately Follows]

 

Exhibit 16-3

 

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

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	ASSIGNOR:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	LEXINGTON HOTEL, LLC, a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Lexington Hotel (Holdings), LLC, a Delaware
limited liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Lex Intermediate Mezz, LLC, a
Delaware limited liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	Lex Intermediate
Mezz (Holdings), LLC, a Delaware limited liability
company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	By:	 	Lex Sub Mezz (Holdings), LLC, a Delaware limited
liability company, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	By:	 	WH/LEX, LLC, a Delaware limited
liability company, its managing member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 

Name:
	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	By:	 	MERISTAR LEXINGTON PARTNERS, LLC, a
Delaware limited liability company, its
managing member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 

Name:
	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	Title:	 	 

[Signature Page Continues]

 

Exhibit 16-4

 

	 	 	 	 	 	 	 
	 	 	PURCHASER:	 	 
	 
	 	 	 	 	 	 
	 	 	DIAMONDROCK NY LEX TENANT, LLC, a Delaware limited
liablity company	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 

[Signature Page Continues]

 

Exhibit 16-5

 

	 	 	 	 	 	 	 
	 	 	FRANCHISOR:	 	 
	 
	 	 	 	 	 	 
	 	 	RADISSON HOTELS INTERNATIONAL, INC., a Delaware
corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 

 

Exhibit 16-6

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