Document:

Mezzanine Note

 Exhibit 10.13 
 MEZZANINE NOTE 
 New York, New York 
 $90,000,000 
 September 1, 2006 
 MEZZANINE NOTE, dated as of September 1, 2006 (this “Mezzanine Note”), by SHR SCOTTSDALE MEZZ X-1, L.L.C., a Delaware
limited liability company and SHR SCOTTSDALE MEZZ Y-1, L.L.C., a Delaware limited liability company, (each a “Co-Borrower” and collectively, on a joint and several liability basis, the “Mezzanine
Borrower”) having an office at c/o Strategic Hotel Funding, L.L.C., 77 West Wacker Drive, Suite 4600, Chicago, Illinois 60601, in favor of CITIGROUP GLOBAL MARKETS REALTY CORP., a New York corporation (together with its
successors and assigns, “Mezzanine Lender”), having an office at388 Greenwich Street, New York, New York 10013. 
 NOW, THEREFORE, FOR VALUE RECEIVED, Mezzanine Borrower promises to pay to the order of Mezzanine Lender the Principal Amount (as defined below), together with interest from the date hereof and other fees, expenses and charges as provided in
this Mezzanine Note. 
 Section 1. Defined Terms. 
 a. Capitalized terms used but not otherwise defined herein shall have the respective meanings given thereto in the Mezzanine Loan Agreement (as defined below), unless otherwise expressly provided herein. All
references to sections shall be deemed to be references to sections of this Mezzanine Note, unless otherwise indicated. 
 b. The following
terms shall have the meanings ascribed thereto: 
 “Default Rate” shall mean, with respect to an acceleration of the
Mezzanine Loan, a rate per annum equal to the lesser of (a) the Maximum Legal Rate and (b) three percent (3%) above the LIBOR Rate, adjusted from time to time as set forth herein. 
 “Extended Maturity Date” shall have the meaning set forth in Section 5(a). 
 “Extension Notice” shall have the meaning set forth in Section 5(a). 
 “Extension Option” shall have the meaning set forth in Section 5(a). 
 “Extension Term” shall mean the term of the Extension Option. 
 “Initial Maturity Date” shall mean March 9, 2007. 
 “Initial Term” shall mean the term commencing on the date hereof up to the Initial Maturity Date. 

 “Interest Determination Date” shall mean, with respect to each Interest Period,
the date which is two (2) Business Days prior to the fifteenth (15th) day of each calendar month. 
 “Interest
Period” shall mean each interest period commencing on the fifteenth (15th) calendar day of a calendar month and ending on (and including) the fourteenth (14th) calendar day of the following calendar month; provided that
the first interest period shall commence on the date hereof. 
 “LIBOR” shall mean, with respect to any Interest
Determination Date, the rate (expressed as a percentage per annum rounded upwards, if necessary, to the nearest one thousandth (1/1000) of one percent (1%)) for deposits in U.S. Dollars for a one (1) month period that appears on
Telerate Page 3750 (as defined below) as of 11:00 a.m., London time, on such Interest Determination Date. If such rate does not appear on Telerate Page 3750 as of 11:00 a.m., London time, on the applicable Interest Determination
Date, the Mezzanine Lender shall request the principal London office of any four (4) prime banks in the London interbank market selected by the Mezzanine Lender to provide such banks’ quotations of the rates at which deposits in U.S.
Dollars are offered by such banks at approximately 11:00 a.m., London time, to prime banks in the London interbank market for a one (1) month period commencing on the first day of the related Interest Period and in a principal amount that
is representative for a single transaction in the relevant market at the relevant time. If at least two (2) such offered quotations are so provided, LIBOR will be the arithmetic mean of such quotations (expressed as a percentage and rounded
upwards, if necessary, to the nearest one thousandth (1/1000) of one percent (1%)). If fewer than two (2) such quotations are so provided, the Mezzanine Lender will request major banks in New York City selected by the Mezzanine Lender to
quote such banks’ rates for loans in U.S. Dollars to leading European banks as of approximately 11:00 a.m., New York City time, on the applicable Interest Determination Date for a one (1) month period commencing on the first day of
the related Interest Period and in an amount that is representative for a single transaction in the relevant market at the relevant time. If at least two (2) such rates are so provided, LIBOR will be the arithmetic mean of such rates (expressed
as a percentage and rounded upwards, if necessary, to the nearest one thousandth (1/1000) of one percent (1%)). If fewer than two (2) rates are so provided, then LIBOR will be LIBOR used to determine the LIBOR Rate during the immediately
preceding Interest Period. 
 “LIBOR Margin” shall mean (i) during the Initial Term, 70 basis points
(0.70000000%) per annum, and (ii) during the Extension Term (if applicable), 350 basis points (3.50000000%) per annum. 
 “LIBOR Rate” shall mean, with respect to each Interest Period, an interest rate per annum equal to the sum of (a) LIBOR, determined as of the Interest Determination Date immediately preceding the commencement of
such Interest Period, plus (b) the LIBOR Margin. 
 “Maturity Date” shall mean the Initial Maturity Date,
provided that in the event of the exercise by Mezzanine Borrower of the Extension Option pursuant to Section 5(a) of this Mezzanine Note, the Maturity Date shall be the Extended Maturity Date or such earlier date on which the
final payment of principal of this Mezzanine Note becomes due and payable as provided in the Mezzanine Loan Agreement or this Mezzanine Note, whether at such stated maturity date, by declaration of acceleration, or otherwise; provided,
notwithstanding the 
  

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 foregoing, the Maturity Date shall automatically be deemed to refer to any earlier date that the Mortgage Loan is paid in
full (including, without limitation, as a result of an acceleration thereof; a refinancing or otherwise). 
 “Maturity Date
Payment” shall have the meaning set forth in Section 3(d). 
 “Mezzanine Borrower” shall
have the meaning provided in the first paragraph hereof. 
 “Mezzanine Lender” shall have the meaning provided in the
first paragraph hereof. 
 “Mezzanine Loan Agreement” shall mean the Mezzanine Loan and Security Agreement
(Mezzanine), dated the date hereof, between Mezzanine Borrower and Mezzanine Lender. 
 “Mezzanine Note” shall have
the meaning provided in the first paragraph hereof. 
 “Payment Date” shall be the ninth (9th) calendar day of
each calendar month and if such day is not a Business Day, then the Business Day immediately preceding such day, commencing on October 9, 2006 and continuing to and including the Maturity Date. 
 “Prepayment Date” shall have the meaning provided in Section 4(a)(i). 
 “Prepayment Fee” shall mean a non-refundable fee equal to, in connection with Mezzanine Borrower’s payment of the Loan (or
any part thereof, to the extent permitted by the Loan Documents (Mezzanine)) (i) during the first twelve months of the Extension Term only, the Prepayment Fee shall be calculated by multiplying (x) 1/12th of the spread over LIBOR at which interest accrues on the Loan, (y) the number of calendar months remaining until the Maturity Date, and
(z) the outstanding Principal Amount being prepaid. No Prepayment Fee shall be due during the Initial Term or after March 9, 2008. The Prepayment Fee shall be payable simultaneously with Mezzanine Borrower’s payment of the Principal
Amount. 
 “Prepayment Notice” shall have the meaning provided in Section 4(a)(i). 
 “Principal Amount” shall mean NINETY MILLION DOLLARS ($90,000,000) or so much as may be outstanding under this Mezzanine Note
from time to time. 
 “Telerate Page 3750” shall mean the display designated as “Page 3750” on
the Dow Jones Telerate Service (or such other page as may replace Page 3750 on that service) or such other service as may be nominated by the British Bankers’ Association as the information vendor for the purpose of displaying British
Bankers’ Association Interest Settlement Rates for U.S. Dollar deposits. 
  

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 Section 2. Interest. 
 a. Prior to the Maturity Date, interest shall accrue on the Principal Amount as follows: 
 i. From and including the date hereof to, but not including, September 15, 2006, at a rate per annum equal to 6.03000%; and

 ii. From and including September 15, 2006, and thereafter during each Interest Period during the term of this
Mezzanine Note, at the LIBOR Rate. 
 b. From and after the Maturity Date and from and after the occurrence and during the continuance of any
Event of Default, interest shall accrue on the Principal Amount at the Default Rate. 
 c. Except as expressly set forth in the Mezzanine
Loan Agreement to the contrary, interest shall accrue on all amounts advanced by Mezzanine Lender pursuant to the Loan Documents (Mezzanine) (other than the Principal Amount, which shall accrue interest in accordance with clauses a. and b.
above) at the Default Rate. 
 d. Interest, for any given Interest Period, shall be computed on the Principal Amount on the basis of a
fraction, the denominator of which shall be 360 and the numerator of which shall be the actual number of days in the relevant Interest Period. 
 e. The provisions of this Section 2 are subject in all events to the provisions of Section 2.2.4 of the Mezzanine Loan Agreement. 
 Section 3. Payments. 
 a. On each Payment Date, Mezzanine Borrower shall pay to Mezzanine
Lender interest accruing hereunder during the entire Interest Period in which said Payment Date occurs. 
 b. All payments made by Mezzanine
Borrower hereunder or under any of the Loan Documents (Mezzanine) shall be made on or before 12:00 noon New York City time. Any payments received after such time shall be credited to the next following Business Day. 
 c. All amounts advanced by Mezzanine Lender pursuant to the Loan Documents (Mezzanine), other than the Principal Amount, or other charges provided in the
Loan Documents (Mezzanine), shall be due and payable as provided in the Loan Documents (Mezzanine). In the event any such advance or charge is not so repaid by Mezzanine Borrower, Mezzanine Lender may, at its option, first apply any payments
received under this Mezzanine Note to repay such advances, together with any interest thereon, or other charges as provided in the Loan Documents (Mezzanine), and the balance, if any, shall be applied in payment of any installment of interest or
principal then due and payable. 
 d. The entire Principal Amount of this Mezzanine Note, all unpaid accrued interest, all interest that
would accrue on the Principal Amount through the end of the Interest 
  

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 Period during which the Maturity Date occurs (even if such period extends beyond the Maturity Date) and all other fees
and sums then payable hereunder or under the Loan Documents (Mezzanine), including, without limitation the Prepayment Fee, if applicable (collectively, the “Maturity Date Payment”), shall be due and payable in full on the
Maturity Date. 
 e. Amounts due on this Mezzanine Note shall be payable, without any counterclaim, setoff or deduction whatsoever, at the
office of Mezzanine Lender or its agent or designee at the address set forth on the first page of this Mezzanine Note or at such other plane as Mezzanine Lender or its agent or designee may from time to time designate in writing. 
 f. All amounts due under this Mezzanine Note, including, without limitation, interest and the Principal Amount, shall be due and payable in lawful money
of the United States. 
 g. To the extent that Mezzanine Borrower makes a payment or Mezzanine Lender receives any payment or proceeds for
Mezzanine Borrower’s benefit, which are subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, debtor in possession, receiver, custodian or any other party under any bankruptcy law,
common law or equitable cause, then, to such extent, the obligations of Mezzanine Borrower hereunder intended to be satisfied shall be revived and continue as if such payment or proceeds had not been received by Mezzanine Lender. 
 Section 4. Prepayments. 
 a.
Voluntary Prepayments. Mezzanine Borrower shall have the right on any Payment Date to prepay the Principal Amount in whole or in part, upon satisfaction of the following conditions: 
 i. Mezzanine Borrower shall provide prior written notice (the “Prepayment Notice”) to Mezzanine Lender specifying
the proposed Payment Date on which the prepayment is to be made, which date shall be no earlier than thirty (30) days after the date of such Prepayment Notice (the date of a prepayment pursuant to this Section 4(a) and
Section 4(b) below being the “Prepayment Date”). Any such Prepayment Notice shall be revocable by Mezzanine Borrower; provided, however, if Mezzanine Borrower elects to so revoke a Prepayment Notice,
Mezzanine Borrower shall reimburse Mezzanine Lender for the actual out-of-pocket expenses incurred by Mezzanine Lender in connection with such revocation; 
 ii. Mezzanine Borrower shall comply with the provisions set forth in Section 4(c) of this Mezzanine Note; and 
 iii. No voluntary prepayment shall be permitted on any date other than a Payment Date. 
 b. Mandatory
Prepayments. 
 i. On the next occurring Payment Date following the date on which Mezzanine Borrower actually receives
any Proceeds (other than Proceeds with respect to 
  

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 business interruption insurance maintained pursuant to Section 6.1.4 of the Loan Agreement
(Mortgage)), Mezzanine Borrower shall prepay the outstanding principal balance of the Mezzanine Note in an amount equal to one hundred percent (100%) of such Proceeds, but in such event no Prepayment Fee shall be payable; and 
 ii. Mezzanine Borrower shall comply with the provisions set forth in Section 4(c) of this Mezzanine Note. 
 c. Payments in Connection with a Prepayment. 
 i. On the date on which a prepayment, voluntary or mandatory, is made under this Mezzanine Note or as required under the Loan Agreement, Mezzanine Borrower shall pay to Mezzanine Lender all unpaid interest on the
Principal Amount prepaid, such unpaid interest calculated, (1) in the event prepayment is made from the fifteenth (15th) day of any calendar month through the ninth (9th) day of the succeeding calendar month, through the end of the
Interest Period during which such prepayment occurs and (2) in the event such prepayment is made from the Interest Determination Date in any calendar month through the fourteenth (14th) day of any calendar month, through the end of the
Interest Period next succeeding the Interest Period in which such prepayment occurs. In either case, accrued interest shall be calculated as if such Interest Period extends beyond the date of such prepayment and be calculated as if the Loan has not
been prepaid on such date. 
 ii. On the Prepayment Date, Mezzanine Borrower shall pay to Mezzanine Lender all other sums, not
including scheduled interest payments but including and not limited to, the Prepayment Fee, then due under this Note, the Mezzanine Loan Agreement, the Pledge, and the other Loan Documents (Mezzanine); and 
 iii. Mezzanine Borrower shall pay all costs and expenses of Mezzanine Lender incurred in connection with the prepayment (including without
limitation, any costs and expenses associated with a release of the Lien of the related Pledge as set forth in Section 2.3.3 of the Mezzanine Loan Agreement as well as reasonable attorneys’ fees and expenses). 
 Section 5. Extension Option. 
 a.
Extension Option. Subject to the provisions of this Section 5, Mezzanine Borrower shall have the option (the “Extension Option”), by irrevocable written notice (the “Extension
Notice”) delivered to Mezzanine Lender no later than thirty (30) days prior to the Initial Maturity Date, to extend the Maturity Date to September 9, 2008 (the “Extended Maturity Date”). Mezzanine
Borrower’s right to so extend the Maturity Date shall be subject to the satisfaction of the following conditions precedent prior to the extension hereunder: 
 i. No Monetary Default or Event of Default shall have occurred and be continuing both on (A) the date Mezzanine Borrower delivers the
Extension Notice, and (B) on the Initial Maturity Date, the Extended Maturity Date; 
  

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 ii. Mezzanine Borrower shall obtain and deliver to Mezzanine Lender not later than one
(1) Business Day prior to the first day of the term of the Loan as extended one or more Extension Interest Rate Cap Agreements from an Acceptable Counterparty which Extension Interest Rate Cap Agreement(s) shall have a strike rate equal to the
Maximum Pay Rate and shall be effective for the period commencing on the day immediately following the then applicable Maturity Date (prior to giving effect to the applicable Extension Option) and ending on the last day of the Interest Period in
which the applicable extended Maturity Date occurs; 
 iii. Mezzanine Borrower, shall deliver (or shall commit to deliver
within five (5) Business Days thereafter) a Counterparty Opinion with respect to the Extension Interest Rate Agreement and the related Acknowledgment; 
 iv. Mezzanine Borrower, shall pay to Mezzanine Lender an extension fee in the amount of 0.50% of the Principal Amount; and 
 v. Mezzanine Borrower, shall deliver to Mezzanine Lender an “Eagle 9” title policy and comply with all obligations in respect of same, as provided under Section 5.1.23 of the Mezzanine Loan
Agreement. 
 b. Extension Documentation. As soon as practicable following an extension of the Maturity Date pursuant to this
Section 5, Mezzanine Borrower shall, if requested by Mezzanine Lender, execute and deliver an amendment of and/or restatement of the Mezzanine Note and shall, if requested by Mezzanine Lender, enter into such amendments to the related
Loan Documents (Mezzanine) as may be necessary or appropriate to evidence the extension of the Maturity Date as provided in this Section 5; provided, however, that no failure by Mezzanine Borrower to enter into any such
amendments and/or restatements shall affect the rights or obligations of Mezzanine Borrower or Mezzanine Lender with respect to the extension of the Maturity Date. 
 Section 6. Miscellaneous. 
 a. Waiver. Mezzanine Borrower and all endorsers,
sureties and guarantors hereby jointly and severally waive all applicable exemption rights, valuation and appraisement, presentment for payment, demand, notice of demand, notice of nonpayment or dishonor, protest and notice of protest of this
Mezzanine Note, and, except as otherwise expressly provided in the Loan Documents (Mezzanine), all other notices in connection with the delivery, acceptance, performance, default or enforcement of the payment of this Mezzanine Note. Mezzanine
Borrower and all endorsers, sureties and guarantors consent to any and all extensions of time, renewals, waivers or modifications that may be granted by Mezzanine Lender with respect to the payment or other provisions of this Mezzanine Note and to
the release of the collateral securing this Mezzanine Note or any part thereof; with or without substitution, and agree that additional makers, endorsers, guarantors or sureties may become parties hereto without notice to them or affecting their
liability under this Mezzanine Note. 
 b. Non-Recourse. Recourse to the Mezzanine Borrower or any other Person with respect to
any claims arising under or in connection with this Mezzanine Note shall be 
  

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 limited to the extent provided in Section 18 of the Mezzanine Loan Agreement and the terms, covenants and
conditions of Section 18 of the Mezzanine Loan Agreement are hereby incorporated by reference as if fully set forth in this Mezzanine Note. 
 c. Mezzanine Note Secured. This Mezzanine Note and all obligations of Mezzanine Borrower hereunder are secured by the Mezzanine Loan Agreement, the Pledge and the other Loan Documents (Mezzanine).

 d. Notices. Any notice, election, request or demand which by any provision of this Mezzanine Note is required or permitted
to be given or served hereunder shall be given or served in the manner required for the delivery of notices pursuant to the Mezzanine Loan. Agreement. 
 e. Entire Agreement. This Mezzanine Note, together with the other Loan Documents (Mezzanine), constitutes the entire and final agreement between Mezzanine Borrower and Mezzanine Lender with respect to
the subject matter hereof and thereof and may only be changed, amended, modified or waived by an instrument in writing signed by Mezzanine Borrower and Mezzanine Lender. 
 f. No Waiver. No waiver of any term or condition of this Mezzanine Note, whether by delay, omission or otherwise, shall be effective unless in writing and signed by the party sought to be charged, and
then such waiver shall be effective only in the specific instance and for the purpose for which given. No notice to, or demand on, Mezzanine Borrower shall entitle Mezzanine Borrower to any other or future notice or demand in the same, similar or
other circumstances. 
 g. Successors and Assigns. This Mezzanine Note shall be binding upon and inure to the benefit of
Mezzanine Borrower and Mezzanine Lender and their respective successors and permitted assigns. Upon any endorsement, assignment, or other transfer of this Mezzanine Note by Mezzanine Lender or by operation of law, the term “Mezzanine
Lender” as used herein, shall mean such endorsee, assignee, or other transferee or successor to Mezzanine Lender then becoming the holder of this Mezzanine Note. The term “Mezzanine Borrower” as used herein shall include the
respective successors and assigns, legal and personal representatives, executors, administrators, devisees, legatees and heirs of Mezzanine Borrower, if any. 
 h. Captions. All paragraph, section, exhibit and schedule headings and captions herein are used for reference only and in no way limit or describe the scope or intent of, or in any way affect, this
Mezzanine Note. 
 i. Severability. The provisions of this Mezzanine Note are severable, and if any one clause or provision
hereof shall be held invalid or unenforceable in whole or in part, then such invalidity or unenforceability shall affect only such clause or provision, or part thereof, and not any other clause or provision of this Mezzanine Note. 
 j. GOVERNING LAW. THIS MEZZANINE NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO
SECTION 5-1401 OF THE NEW YORK 
  

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 GENERAL OBLIGATIONS LAW. EACH OF MEZZANINE BORROWER AND LENDER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS MEZZANINE
NOTE OR ANY OTHER MEZZANINE LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR ANY FEDERAL COURT SITTING THEREIN AND CONSENT TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE
UPON MEZZANINE BORROWER OR LENDER IN THE MANNER AND AT THE ADDRESS SPECIFIED FOR NOTICES IN THE MEZZANINE LOAN AGREEMENT. EACH OF MEZZANINE BORROWER AND LENDER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH
SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT. 
 k. JURY TRIAL WAIVER. EACH OF MEZZANINE
BORROWER AND LENDER AND ALL PERSONS CLAIMING BY, THROUGH OR UNDER IT HEREBY EXPRESSLY, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (I) ARISING UNDER THIS MEZZANINE
NOTE, INCLUDING, WITHOUT LIMITATION, ANY PRESENT OR FUTURE MODIFICATION THEREOF OR (II) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS MEZZANINE NOTE (AS NOW OR
HEREAFTER MODIFIED) OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION IS NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND MEZZANINE BORROWER HEREBY AGREES AND CONSENTS THAT AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION MAY BE FILED WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT HERETO
TO THE WAIVER OF ANY RIGHT TO TRIAL BY JURY. MEZZANINE BORROWER ACKNOWLEDGES THAT IT HAS CONSULTED WITH LEGAL COUNSEL REGARDING THE MEANING OF THIS WAIVER AND ACKNOWLEDGES THAT THIS WAIVER IS AN ESSENTIAL INDUCEMENT FOR THE MAKING OF THE LOAN. THIS
WAIVER SHALL SURVIVE THE REPAYMENT OF THE LOAN. 
 l. Counterclaims and other Actions. Mezzanine Borrower hereby expressly and
unconditionally waives, in connection with any suit, action or proceeding brought by Mezzanine Lender on this Mezzanine Note, any and every right it may have to (i) interpose any counterclaim therein (other than a counterclaim which can only be
asserted in the suit, action or proceeding brought by Mezzanine Lender on this Mezzanine Note and cannot be maintained in a separate action) and (ii) have any such suit, action or proceeding consolidated with any other or separate suit, action
or proceeding. 
 m. Joint and Several Liability. If Mezzanine Borrower consists of more than one person, the obligations and
liabilities of each such person hereunder and under the other Loan Documents (Mezzanine) shall be joint and several. 
 [REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK] 
  

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 IN WITNESS WHEREOF, Mezzanine Borrower has caused this Mezzanine Note to be executed and delivered as of
the day and year first above written. 
  

			
	MEZZANINE BORROWER:
	
	 SHR SCOTTSDALE X-1, L.L.C., a Delaware
         limited liability company

		
	By:	 	 /s/ Ryan M. Bowie

	Name:	 	 Ryan M. Bowie

	Title:	 	Assistant Treasurer
	
	 SHR SCOTTSDALE Y-1, L.L.C., a Delaware
         limited liability company

		
	By:	 	 /s/ Ryan M. Bowie

	Name:	 	 Ryan M. Bowie

	Title:	 	Assistant Treasurer

  

 Note ExecutionAgreement of Purchase and Sale

 Exhibit 10.18 
  

 AGREEMENT OF PURCHASE AND SALE 
 between 
 LAKESHORE EAST LLC, 
 Seller 
 and 
 STRATEGIC HOTEL FUNDING, L.L.C. , 
 Purchaser 
 Dated as of September 26, 2006 
  

 TABLE OF CONTENTS 
  

					
	 	 	 	  	Page No.
	 ARTICLE I AGREEMENT TO SELL AND PURCHASE
	  	2
	     1.1.
	 	Sale and Purchase	  	2
	     1.2.
	 	Purchase Price	  	2
	     1.3.
	 	Earnest Money Deposits	  	3
	     1.4.
	 	The Closings	  	3
		
	 ARTICLE II DESIGN AND CONSTRUCTION OF PROJECT
	  	5
	     2.1.
	 	Plans and Specifications	  	5
	     2.2.
	 	Construction Contracts	  	6
	     2.3.
	 	Construction	  	7
	     2.4.
	 	Inspection	  	8
	     2.5.
	 	Representatives of Purchaser	  	9
	     2.6.
	 	Purchaser’s Work	  	9
	     2.7.
	 	Labor Covenant	  	9
		
	 ARTICLE III CONDITIONS TO CLOSING
	  	10
	     3.1.
	 	Conditions to Seller’s Obligations	  	10
	     3.2.
	 	Conditions to Purchaser’s Obligations to Close	  	11
	     3.3.
	 	Reasonable Efforts	  	11
	     3.4.
	 	Construction Condition Precedent	  	12
		
	 ARTICLE IV COVENANTS AND AGREEMENTS
	  	12
	     4.1.
	 	Seller Covenants	  	12
	     4.2.
	 	Purchaser’s Covenants with respect to Seller’s Loan	  	13
	     4.3.
	 	Building Operating Agreement; Parking	  	14
	     4.4.
	 	Title and Survey	  	14
	     4.5.
	 	Insurance	  	17
	     4.6.
	 	Environmental Reports	  	17
	     4.7.
	 	Impairment of Conditions	  	17
		
	 ARTICLE V DELIVERIES AT CLOSING
	  	17
	     5.1.
	 	Deliveries by Seller	  	17
	     5.2.
	 	Deliveries by Purchaser	  	18
		
	 ARTICLE VI APPORTIONMENTS AND CLOSING COSTS
	  	19
	     6.1.
	 	Items of Apportionment	  	19
	     6.2.
	 	Insurance Premiums	  	21
	     6.3.
	 	Certain Closing Costs	  	21
	     6.4.
	 	Escrows	  	21
	     6.5.
	 	Pedway	  	22
		
	 ARTICLE VII REPRESENTATIONS AND WARRANTIES
	  	22
	     7.1.
	 	Seller’s Representations and Warranties	  	22
	     7.2.
	 	Purchaser’s Representations and Warranties	  	23

  

 i 

					
	     7.3.
	 	Purchaser’s Acknowledgment	  	24
		
	 ARTICLE VIII DEFAULT; REMEDIES
	  	24
	     8.1.
	 	Seller’s Default	  	24
	     8.2.
	 	Purchaser’s Default	  	25
	     8.3.
	 	Recovery of Litigation Costs	  	25
	     8.4.
	 	Post-Closing Obligations	  	26
		
	 ARTICLE IX CONDEMNATION AND CASUALTY
	  	26
	     9.1.
	 	Condemnation	  	26
	     9.2.
	 	Damage or Destruction	  	26
	     9.3.
	 	No Recision	  	27
		
	 ARTICLE X NON-COMPETITION AGREEMENTS
	  	27
	     10.1.
	 	Purchaser Non-Compete	  	27
	     10.2.
	 	Seller Non-Compete	  	27
		
	 ARTICLE XI INTERPRETATION; MISCELLANEOUS
	  	28
	     11.1.
	 	Interpretation	  	28
	     11.2.
	 	Assignment	  	28
	     11.3.
	 	Broker	  	28
	     11.4.
	 	Survival of Representations, Warranties, Indemnities and Covenants	  	29
	     11.5.
	 	Integration; Waiver	  	29
	     11.6.
	 	Governing Law; Waiver of Jury Trial; Consent to Jurisdiction	  	29
	     11.7.
	 	Binding Effect	  	30
	     11.8.
	 	Severability	  	30
	     11.9.
	 	Notices	  	30
	     11.10.
	 	Counterparts	  	31
	     11.11.
	 	Estoppel Certificate	  	31
	     11.12.
	 	Additional Agreements; Further Assurances	  	31
	     11.13.
	 	Construction	  	31
	     11.14.
	 	Relationship of the Parties	  	31
	     11.15.
	 	No Recordation	  	31
		
	 ARTICLE XII LIST OF DEFINED TERMS
	  	32

  

					
	 Exhibit A
	 	-	  	Legal Description of Land
	 Exhibit B
	 	-	  	Letter of Credit Form
	 Exhibit C
	 	-	  	Building Design Plans
	 Exhibit D
	 	-	  	Finish Standards
	 Exhibit E
	 	-	  	Modified Raw Shell Specification
	 Exhibit F
	 	-	  	Permitted Title Exceptions/Purchaser’s Title Endorsements

  

 ii 

 AGREEMENT OF PURCHASE AND SALE, dated as of September 25, 2006 (this
“Agreement”), between LAKESHORE EAST, LLC, an Illinois limited liability company, having an address at 303 E. Wacker Drive, Suite 2750, Chicago, Illinois 60601 (“Seller“), and STRATEGIC HOTEL FUNDING, L.L.C., a
Delaware limited liability company, having an address at 77 West Wacker Drive, Suite 4600, Chicago, Illinois 60601 (“Purchaser”). 
 RECITALS: 
 1. Seller is (or will prior to commencement of construction be) the owner in fee simple of the land legally
described in Exhibit A attached hereto and made a part hereof (the “Land”), known as Parcel P in Lakeshore East, Chicago, Illinois. (A list of all defined terms used in this Agreement and the Sections in which they
are respectively defined is contained in Section 12 of this Agreement.) 
 2. Seller intends to develop the Land by constructing
thereon an approximately 83-story mixed use tower (the “Building” or the “Project”), consisting of the following: 
 A. An air rights lot or lots (collectively, the “Hotel Parcel”) on which shall be constructed a hotel containing (i) 210 hotel suites (each, a “Hotel Suite”) containing approximately 210,811 square
feet of space located on Floors 4 through 18, (ii) approximately 1,200 square feet on Level P-5, the Loading Level, (iii) approximately 8,750 square on Level P-1 for maintenance/storage service, (iv) approximately 3,635
square feet on Level L-1 for hotel lobby and services, (v) an approximately 37,580 square foot ballroom/pre-function-support area on Level L-1 and a terrace adjacent thereto containing approximately 2,500 square feet and space for related
amenities and facilities (the portions of the Hotel described in clauses (i) and (iv), collectively, the “Hotel Suite Floors”); the portions of the Hotel described in clauses (ii), (iii) and (v), collectively, the
“Ballroom/Lobby/Support Areas”) and (vi) other improvements, heating, electrical, plumbing, ventilating, air conditioning and other utility and mechanical systems located therein to be utilized to furnish services thereto (all
of the foregoing air rights and improvements being sometimes herein referred to collectively as the “Hotel”, the utility and mechanical systems serving the Hotel and not located within the Hotel and the portions of the Project
providing access to the Hotel are referred to herein as the “Hotel-Related Project Components”); 
 B. A parcel expected to
contain approximately 486,170 gross square feet, including approximately 504 apartments, to be located on Floors 19 through 52 of the Building and certain related amenities and facilities to be located on Levels P-5 through L-3,
are sometimes herein referred to as the “Apartment Parcel”; 
 C. A parcel expected to contain approximately 394,972 gross
square feet to be located on Levels P-5 through L-1, and Floors 53 through 56 and 58 through 80, which space is intended to be built out and sold by Seller as approximately 235 residential condominium units (the “Units”)
and certain related amenities and facilities, are sometimes herein referred to as the “Condominium Parcel”; sometimes referred to collectively with the Apartment Parcel as the “Residential Parcels”. Lobbies and
service areas which are not included in the Hotel Parcel shall be part of the Residential Parcels; 

 D. A parking garage to be located on Levels P-5 through P-1 (with entrances on Level L-1) which
shall contain about 1,500 spaces (the “Parking Spaces“), of which approximately 390 may be transferred for use by the nearby Building O, leaving a net of approximately 1,110 for the Building. Parking Spaces will be deeded to
purchasers of the Units, with the balance of the Parking Spaces being utilized as a public parking garage, subject to the specific requirements of Section 4.3 of this Agreement; and 
 E. A parcel expected to contain approximately 37,894 gross square feet on Levels P-5 through P-2 and expected to be used for retail space and
related facilities. 
 3. In furtherance of the foregoing, Seller has caused Loewenberg Architects and Studio/Gang/Architects, design
architects for the Building, to prepare plans and specifications for the Project, including the Hotel Parcel, the Apartment Parcel and the Condominium Parcel, which plans and specifications as prepared to date and as further developed and modified
hereafter are herein referred to, collectively, as the “Plans.” (Loewenberg Architects will be the architect of record for the Project and is referred to herein as the “Architect“.) 
 4. Upon completion of construction of the Hotel by Seller to the state of completion set forth in this Agreement (“Seller’s Work”),
Seller desires to sell and convey to Purchaser, and Purchaser desires to purchase and accept from Seller, the Hotel, upon the terms and subject to the conditions set forth in this Agreement. 
 NOW, THEREFORE, in consideration of the foregoing Recitals, the mutual covenants contained herein and other good and valuable consideration, the delivery
and sufficiency of which is acknowledged by Seller and Purchaser, Seller and Purchaser hereby covenant and agree as follows: 
 ARTICLE I

 AGREEMENT TO SELL AND PURCHASE 
 1.1. Sale and Purchase. Upon the terms and subject to the conditions set forth in this Agreement, and in reliance upon the representations and warranties and covenants and agreements set forth herein, Seller
agrees to sell and convey to Purchaser, and Purchaser agrees to purchase and accept from Seller, the Hotel. 
 1.2. Purchase Price.
The purchase price for the Hotel is Eighty-Two Million Three Hundred Fifty Thousand One Hundred Eighty Dollars ($82,350,180), plus or minus apportionments and other adjustments provided for herein, without setoffs. The Purchase Price is allocated
Sixty-Five Million Fifty Thousand Eight Hundred Eighty-Nine Dollars ($65,050,889) (“Hotel Floors Purchase Price”) to the Hotel Suite Floors and Seventeen Million Two Hundred Ninety-Nine Thousand Two Hundred Ninety-One Dollars
($17,299,291) (“Ballroom Purchase Price”) to the Ballroom/Lobby/Support Areas. (The Hotel Floors Purchase Price and Ballroom Purchase Price are referred to individually or collectively, as the context shall infer, as the
“Purchase Price”.) 
  

 2 

 1.3. Earnest Money Deposits. 
 (a) Upon the full execution of this Agreement, Purchaser shall deposit with Seller as an earnest money deposit an Acceptable Letter of Credit in the
amount of Eleven Million Dollars ($11,000,000). (The letter(s) of credit held as earnest money from time to time pursuant to this Agreement are referred to, individually or collectively, as the “Earnest Money Letter of Credit”.) On
or before the later to occur of (i) the date ten (10) Business Days after Purchaser’s receipt of the Ballroom Closing Notice and (ii) the date of closing (“Construction Loan Closing”) of Seller’s loan(s)
financing construction of the Project (the “Construction Loan”), Purchaser shall either cause the amount of the Earnest Money Letter of Credit previously delivered to be increased to Seventeen Million Dollars ($17,000,000) or shall
deliver an additional Acceptable Letter of Credit in the amount of Six Million Dollars ($6,000,000) (the date on which such increase has been effectuated is the “First Increased Deposit Date”). On or before the later to occur of
(x) the date one (1) year after Purchaser’s receipt of the Ballroom Closing Notice or (y) the first anniversary of the Construction Loan Closing, Purchaser shall either cause the Earnest Money Letter of Credit to be increased to
Twenty-Three Million Dollars ($23,000,000) or shall deliver an additional Acceptable Letter of Credit in the amount of Six Million Dollars ($6,000,000) (the date on which such increase has been effectuated is the “Second Increased Deposit
Date”). Purchaser shall cause each Earnest Money Letter of Credit to remain in place until Closing (except as otherwise expressly set forth herein). Upon the Ballroom Closing and payment of the Ballroom Purchase Price, the amount of the
Earnest Money Letter of Credit shall be reduced to Thirteen Million Dollars ($13,000,000). The Earnest Money Letter of Credit shall be returned upon payment of the Purchase Price in full. If any Earnest Money Letter of Credit will expire in thirty
(30) days or less, Seller shall have the right to draw thereon in full, in which event (unless at such time Seller has the right to retain the proceeds thereof in accordance with this Agreement) Seller shall continue to hold the proceeds
thereof as a cash earnest money deposit in accordance herewith. Any such earnest money, whether in the form of an Earnest Money Letter of Credit or in the form of cash, is referred to herein as the “Deposit”. The Deposit shall be
nonrefundable, except as herein provided. 
 (b) An “Acceptable Letter of Credit” shall be an irrevocable, transferable,
unconditional letter of credit issued to Seller (or, if requested by Seller, to Seller’s Lender) by an issuer reasonably acceptable to Seller (and Seller’s Lender) and in the form of Exhibit B attached hereto and made a part
hereof or such other form as is reasonably acceptable to the parties with a term of not less than one (1) year and including a so-called “evergreen” clause. Each such letter of credit must provide that the Letter of Credit and the
proceeds thereof shall be assignable to Seller’s Lender without charge (and any charge imposed by the issuer shall be paid by Purchaser). 
 1.4. The Closings. 
 (a) The delivery of the Deeds, the payment of the Purchase Price and the delivery and payment of the
other documents and amounts to be made in connection with the transfer of title contemplated by this Agreement shall take place at two separate closings (each, a “Closing”). At the “Ballroom Closing”, Purchaser shall pay to
Seller the Ballroom Purchase Price and Seller shall convey the Ballroom/Lobby/Support Areas to Purchaser. At the “Hotel Floors Closing”, Purchaser shall pay to Seller the Hotel Floors Purchase Price and Seller shall convey the Hotel Suite
Floors to Purchaser. The date upon which each Closing is to occur pursuant to the terms of this Section 1.4 shall be referred to herein as a “Closing Date”. 
  

 3 

 (b) The Ballroom Closing shall take place on a date specified by not less than fifteen
(15) months’ prior written notice (the “Ballroom Closing Notice”) from Seller to Purchaser, provided that (x) the Ballroom Closing must occur between April 1 and July 31 of 2008 or on or after
October 1, 2008 (but in no event between July 31 and October 1 of any calendar year) and (y) the Ballroom Closing shall not occur unless a Substantial Completion Certificate has been issued by the Architect for Seller’s Work
for the Ballroom/Lobby/Support Areas. The Closing Date for the Ballroom Closing shall be extended as needed if a Substantial Completion Certificate for the Ballroom/Lobby/Support Areas has not been delivered by Seller to Purchaser prior to the
scheduled Closing Date (provided that the Closing Date shall not be extended for Purchaser Delays), but if such extension causes the Closing Date to occur after July 31 of any calendar year, the Ballroom Closing shall be extended to
January 2 of the succeeding year. 
 (c) The Hotel Floors Closing shall occur thirty (30) days after prior written notice from
Seller to Purchaser accompanied by (or preceded by delivery of) (x) the Substantial Completion Certificate for the Hotel Suite Floors issued by the Architect and (y) a certificate of the General Contractor that the then current scheduled
date for removal of the first construction hoist is not later than six (6) months after the scheduled Closing Date, provided that (i) the Hotel Floors Closing shall not occur prior to September 30, 2008 and (ii) Seller may not
require that the Hotel Floors Closing occur prior to the Ballroom Closing. 
 (d) On each Closing Date, Purchaser shall pay to Seller the
applicable portion of the Purchase Price payable at such Closing by wire transfer of immediately available federal funds to an account or accounts designated in writing by Seller prior to the Closing. Each Closing shall be held at 11:00 a.m. (local
time) on the applicable Closing Date, at such place within the City of Chicago as mutually designated by the parties not less than five (5) business days prior to such Closing Date. If the date for a Closing determined in accordance herewith is
not a Business Day, such Closing shall occur on the next succeeding Business Day. The term “Business Day” shall mean any day other than a Saturday or a Sunday or a day on which banking institutions in the City of Chicago are
required or permitted by law to close. 
 (e) Not less than five (5) Business Days prior to each Closing Date, the parties shall either
provide for a “New York style” closing or establish the usual form of deed and money escrow with the Title Insurer (which shall provide for “gap” coverage and immediate disbursement of funds), which shall be
modified, however, so as to conform to the terms and conditions of this Agreement. Counsel for the respective parties are hereby authorized to execute the escrow trust instructions, as well as any amendments thereto. Seller and Purchaser shall each
bear one-half of the costs associated with such escrow or “New York style” closing. 
  

 4 

 ARTICLE II 
 DESIGN AND CONSTRUCTION OF PROJECT 
 2.1. Plans and Specifications. 
 (a) Purchaser acknowledges that the Plans for the Project listed on Exhibit C attached hereto and made a part hereof (the “Building
Design Plans”) have heretofore been submitted to it for its review and approval and that Purchaser has approved the Building Design Plans as suitable for the development and operation of the Hotel. 
 (b) As drawings and specifications for the Hotel are further developed from time to time and a construction (and building permit) set of drawings,
details and specifications therefor are developed (“Final Building Plans”), Seller agrees that such drawings, details and specifications shall be submitted to Purchaser. Seller may elect to submit to Purchaser Plans as they are
developed in such stages as Seller in good faith believes determines would be beneficial for review thereof. Purchaser shall have the right to approve the Final Building Plans (and any other Plans prepared hereafter) only to the extent such plans
and specifications for the Hotel (and Hotel-Related Project Components) differ in any material respects in scope or quality from the Building Design Plans (“Purchaser’s Plan Approval”). Purchaser shall not have the right to
disapprove Final Building Plans (or any other further development of the Building Design Plans) that is consistent with and reasonably inferable from the Building Design Plans (or from any other Plans approved by Purchaser). 
 (c) In no event shall Purchaser be entitled to approve changes to Project components other than the Hotel (including the Hotel-Related Project
Components). Without limiting the foregoing, Seller shall be entitled to change the number of Units or apartments or otherwise modify the use or configuration of any or all of the other Project components, provided that parking must be maintained
sufficient for Hotel use and in any event sufficient to satisfy the requirements of the Building Operating Agreement. 
 (d) Purchaser shall
not unreasonably withhold or delay its approval of any Plans. If Purchaser withholds Purchaser’s Plan Approval to the Plans which Purchaser is entitled to disapprove, Purchaser shall provide to Seller, within fifteen (15) days after its
receipt of the applicable draft or version of such drawings, details and specifications, written notice (“Purchaser’s Plan Approval Rejection Notice”) of its decision to withhold Purchaser’s Plan Approval, together with
its reasons therefor (in reasonable detail and in writing) and with a description of proposed changes thereto in order to obtain Purchaser’s Plan Approval, and Seller and Purchaser shall cooperate with one another and act in good faith in
determining as soon as reasonably possible whether and, if so, to what extent to incorporate such changes into the Final Building Plans. If Purchaser fails to provide Seller with Purchaser’s Plan Approval Rejection Notice within the above
review period and does not approve thereafter within five (5) days after request by Seller, then Purchaser shall be deemed to have given Purchaser’s Plan Approval with respect to the matters or items in question. 
 (e) Purchaser may request changes (in addition to Purchaser’s Plan Approval, which is governed by the preceding paragraph) to the proposed Plans for
the Hotel within the 

  

 5 

 
general scope and design set forth in the Plans. Any such changes shall be considered and either accepted or rejected by Seller in good faith and in the
exercise of reasonable discretion. Upon request by Purchaser, Seller shall provide information as to the cost of a change. If, individually or collectively, Purchaser requests material changes to the Plans which are accepted by Seller, as aforesaid,
the Purchase Price shall be increased or decreased to reflect the cost (or reduction in cost) to Seller of such changes. (The costs payable by Purchaser in connection with any change requested by Purchaser to Seller’s Work shall include,
without limitation, design, architectural and engineering costs.) The cost to Seller of any change increasing the cost of Seller’s Work shall include a markup for overhead of ten percent (10%). Seller may, at its option, require Purchaser to
pay for such cost increases ordered by Purchaser before performing such work. (Seller agrees not to request such advance payment for changes until such changes aggregate more than $100,000.) Seller shall in no event be obligated to accept any
requested changes which would delay or complicate construction. The Final Building Plans shall also be deemed to include mutually agreed upon details and any modifications thereof agreed to by Seller and Purchaser in writing. 
 (f) Once approved (or deemed approved) to the extent Purchaser’s Plan Approval is required, Seller shall not amend the Final Building Plans in any
manner which will materially adversely affect the Hotel (or Hotel-Related Project Components) without the consent of Purchaser, which consent shall be given or withheld in Purchaser’s reasonable discretion and Purchaser’s Plan Approval
shall be subject to the procedures and requirements set forth in Section 2.1(d). With respect to any other material amendments to the Final Building Plans which would materially affect the Hotel, Seller shall give Purchaser notice
thereof promptly after the amendment is made and, to the extent practical, before the change is integrated into the construction. Purchaser recognizes that in constructing the Project the General Contractor will make changes from the Plans,
including substituting materials. Such changes, including, without limitation, field condition changes, shall be permitted within normal construction tolerances and otherwise in accordance with the General Contract. No approval by Purchaser shall be
required for changes required by governmental authorities which do not materially interfere with use of the Hotel for its intended purposes; Seller shall endeavor to notify Purchaser promptly of any such required change which is material.

 (g) Seller shall additionally cause the interior of the Hotel Suites to be furnished according to the finish standards attached as
Exhibit D hereto and made a part hereof (the “Finish Standards”), which consist of the standard finish package the Seller is utilizing for the Units as modified per agreement of the parties. The Finish Standards for the
Hotel Suites shall be exclusive of upgrades (except as paid for by Purchaser). The ceiling heights shall be approximately 8-1/2 feet. 
 (h)
Approval by Purchaser of Plans shall not constitute a waiver of any requirements with respect to completion of the Hotel, nor give rise to any liability by Purchaser to Seller, the General Contractor or any third party whatsoever for the adequacy,
completeness or design thereof. 
 2.2. Construction Contracts. Seller shall furnish Purchaser with a copy of the general construction
contract for Building with a general contractor selected by Seller (“General Contractor”) promptly after preparation thereof (“General Contract”). In connection with the 

  

 6 

 
General Contract, the General Contract shall provide for the issuance by the General Contractor of the Hotel Construction Warranty and shall provide for the
release of the General Contractor’s lien (and its subcontractors’ liens) with respect to the Hotel upon the conveyance thereof to Purchaser. 
 2.3. Construction. 
 (a) The date of commencement of construction of the Project (which shall be the
date determined to be such according to the provisions of the General Contract) is the “Construction Commencement Date”. Once construction has commenced in accordance with the terms and conditions of this Agreement, Seller shall
proceed diligently to complete construction of the Project in accordance with the provisions of this Agreement. 
 (b) With respect to the
Hotel, “Seller’s Work” consists of the following: Seller shall complete the Hotel Suites in accordance with the Plans and the Finish Standards, and shall complete hotel floor common areas and all other areas of the Hotel in
Modified Raw Shell Condition in accordance with the Plans. “Modified Raw Shell Condition” shall mean completion to the state set forth in the specifications set forth on Exhibit E attached hereto and made a part hereof.
Seller’s Work does not include finishing beyond Modified Raw Shell Condition any part of the Hotel other than the Hotel Suites, and Purchaser acknowledges Purchaser will not be able to open or operate the Hotel without doing substantial
additional work. 
 (c) Seller shall make reasonable efforts to cause the General Contractor to achieve Substantial Completion of
Seller’s Work on or before the Scheduled Completion Date (as extended in accordance with the provisions of this Agreement). “Substantial Completion” means substantial completion of construction of the Seller’s Work with
respect to the Hotel in all material respects in accordance with the Plans and in compliance with all Legal Requirements, as evidenced by a certificate of the Architect to such effect (“Substantial Completion Certificate”). At such
time as Seller believes Substantial Completion of either the Hotel Suite Floors or the Ballroom/Lobby/Support Areas, as applicable, has occurred, Architect shall furnish Purchaser with a Substantial Completion Certificate with respect to the Hotel
Suite Floors or Ballroom/Lobby/Support Areas, as applicable, together with a punchlist prepared by Seller’s Architect (in conjunction with Purchaser’s representative) of items required to be completed in order to achieve final completion
of Seller’s Work with respect to the Hotel. 
 (d) The “Scheduled Completion Date” for the Project is the date
thirty-three (33) months after the Construction Commencement Date. The “Outside Completion Date” is the date nine (9) months after the Scheduled Completion Date, subject to extension for Force Majeure and for Purchaser
Delays. If Seller fails to cause Substantial Completion of Seller’s Work to be achieved by the Outside Completion Date, then Purchaser shall have the option at any time thereafter before Substantial Completion of Seller’s Work is achieved
to notify Seller that Purchaser intends to terminate this Agreement by reason of such non-completion. Seller shall thereafter have ninety (90) days to cause Substantial Completion of Seller’s Work to occur. If Seller fails to cause
Substantial Completion of Seller’s Work to occur within said cure period, Purchaser may at any time thereafter prior to achievement of Substantial Completion of Seller’s Work terminate this Agreement by written notice to Seller, in which
event the Deposit shall be returned to Purchaser and the parties shall have no further liability hereunder, except for 

  

 7 

 
obligations which by the terms of this Agreement survive termination thereof. “Force Majeure” shall mean any delay in the completion of
construction of the Hotel caused by natural disaster; fire; earthquake; unusual adverse weather conditions; floods; war; acts of terrorism; explosion; strikes; lockouts and other unusual or unforeseeable causes beyond the reasonable control of
Seller, provide in no event shall Seller’s lack of funds be deemed an event of Force Majeure. “Purchaser Delays” shall mean any delays in Seller’s Work caused by changes to the Plans requested by Purchaser,
Purchaser’s failure to respond timely to requests by Seller with respect to Purchaser’s approval of proposed changes to Plans or other delays caused by Purchaser. 
 (e) Once Substantial Completion of Seller’s Work with respect to the Hotel Suite Floors or the Ballroom/Lobby/Support Areas, as applicable, has
occurred, Purchaser shall within ten (10) Business Days give to Seller a list of any additional punchlist items not contained in Seller’s Architect’s punchlist delivered to Purchaser in accordance with Section 2.3(c)
above, and the parties shall act reasonably in achieving agreement on a final list of punchlist items. The Architect shall be the final arbiter of any disagreements as to punchlist items. Seller shall promptly after each Closing cause the applicable
punchlist items to be performed and completed, subject to Force Majeure and to Purchaser Delays. 
 (f) No later than the date six
(6) months after the Hotel Floors Closing (subject to Force Majeure and Purchaser Delays), Seller shall cause the Columbus Drive entrance to the Hotel lobby (and access thereto) to be clear of all construction materials and debris and suitable
for safe and sightly use by Hotel patrons, provided that Seller shall not be responsible for clearing materials and debris from Purchaser’s Work or otherwise for completion of Purchaser’s Work. 
 (g) Within six (6) months after the Ballroom Closing, Seller shall have caused Project life safety systems (and other building systems as may be
required) and emergency access and exiting to be completed to the extent needed for Purchaser to obtain a temporary certificate of occupancy for the Ballroom/Lobby/Support Areas, provided that Seller shall not be responsible for any such items
included in Purchaser’s Work. Within six (6) months after the Hotel Floors Closing, Seller shall have caused Project life safety systems (and other building systems as may be required) and emergency access and exiting to be completed to
the extent needed for Purchaser to obtain a temporary certificate of occupancy for the Hotel Suite Floors, provided that Seller shall not be responsible for any such items included in Purchaser’s Work. If required by the City of Chicago, prior
to opening for business of the Hotel Suite Floors, Seller shall erect a protective canopy (with decorative elements) over the Hotel entrance at approximately the second floor level until completion of construction of the Project (or for such period
as is required by the City of Chicago). 
 2.4. Inspection. Purchaser shall have the right to monitor the progress of the
construction, and the quality of the construction and development of Seller’s Work. Purchaser and its representatives shall be given access to the work, as well as the reasonable cooperation of Seller’s development team and the design and
construction professionals for the Project, all at Purchaser’s own risk and expense. Purchaser and its representatives shall in no event interfere with, or have authority to stop, delay or order changes in, the work. Purchaser shall promptly
after discovery notify Seller of any insufficiencies or defects in Seller’s Work to permit Seller to address same. 
  

 8 

 2.5. Representatives of Purchaser. With respect to all decisions to be made with respect to the
Plans and construction of the Hotel, Purchaser authorizes the following individuals to bind Purchaser by indicating their approval of the matter in question: 
  

			
	 Individual
	 	 Title

	Laurence Geller	 	President and CEO
	Cory Warning	 	Director of Acquisitions and Development
	Tim Taylor	 	Vice President, Capital Projects

 Purchaser shall cause there to be at least two such authorized representatives of Purchaser at any time. The
approval by any one of such individuals shall be sufficient to bind Purchaser without the approval of any other of such individuals. Purchaser may change the identity of any such authorized representative in its sole discretion effective upon
Seller’s receipt of written notice from Purchaser of such change. 
 2.6. Purchaser’s Work. Following each Closing,
Purchaser shall promptly and diligently seek to perform all work (“Purchaser’s Work”) needed to complete the Hotel Suite Floors or Ballroom/Lobby/Support Areas, as applicable, and to prepare and open the Hotel for hotel
operations. All contracts for Purchaser’s Work shall specify that any lien rights thereupon shall arise solely against such portion of the Hotel as has been acquired by Purchaser. Purchaser shall cause any lien arising therefrom and attaching
to Seller’s property to be removed (or insured over on Seller’s and Seller’s Lender’s title policy) within thirty (30) days after filing. Prior to the Ballroom Closing, Seller and Purchaser shall agree to a schedule for
Purchaser’s Work and shall coordinate their respective remaining work to maximize usability of all components of the Project. Portions of Purchaser’s Work may be needed to be completed for Purchaser to obtain a certificate of occupancy
(temporary or permanent) for the Hotel. Closing shall not be delayed if a certificate of occupancy has not been issued because of any Purchaser’s Work. Additionally, to the extent any Purchaser’s Work is needed (x) in order for Seller
to obtain a certificate of occupancy (for any portion of the Project), (y) for use or operation of any other component of the Project or (z) to complete the Hotel lobby and other areas of the Hotel which are publicly visible, and Purchaser
does not perform Purchaser’s Work when needed (to facilitate Seller obtaining a certificate of occupancy for any other component of the Project, for beneficial use by Seller of the balance of the Project or for such other purposes), Seller may
perform such aspects of Purchaser’s Work. Purchaser shall reimburse Seller for the reasonable cost incurred by Seller in performing such portion of Purchaser’s Work or removing liens against Seller’s property which Purchaser fails to
remove within ten (10) days after billing (accompanied by invoices or other reasonable evidence of cost). In the event that Purchaser does not timely reimburse Seller for such reasonable costs, interest shall accrue thereon at the prime rate
(as reported in the Wall Street Journal) plus two percent (2%) per annum (the “Interest Rate”). This paragraph shall survive Closing or termination of this Agreement. 
 2.7. Labor Covenant. 
 (a) Purchaser
shall comply with the following, and shall cause its contractors to comply with the following, in performing Purchaser’s Work. Purchaser shall not permit employment of unfit persons or persons not skilled in tasks assigned to them. Purchaser
shall ensure that all on-site construction at the Hotel (i) shall be performed solely by contractors or 

  

 9 

 
sub-contractors employing craft workers represented by unions affiliated with the local and/or national Building and Construction Trades Council, AFL-CIO,
and/or The Building and Construction Trades Department, AFL-CIO, and (ii) all such employment shall conform to traditional craft jurisdictions in the area (the “Labor Covenant”). If the construction of the exterior or
structural portions of the improvements uses components that are fabricated off-site (e.g., EIFS or brick panel systems), the components must be fabricated in a union-signatory plant and must be delivered to the Hotel by a union-signatory
transportation company. Purchaser shall include the foregoing Labor Covenant in each subcontract entered into by Purchaser and shall require that all subcontracts of any tier include the Labor Covenant. Purchaser shall be obligated to provide such
evidence as Seller, Seller’s Lender or equity partners may reasonably require, from time to time during the course of any construction at the Hotel that the Labor Covenant is being fully and faithfully observed and Purchaser shall include the
obligation to produce such evidence in each contract entered into by Purchaser in connection with Purchaser’s Work and shall require that each subcontractor of any tier include such obligation in each of its subcontracts. Subject to the
foregoing Labor Covenant, Purchaser shall use best efforts to employ labor at the Hotel or in connection with Purchaser’s Work capable of working harmoniously with all construction trades and crafts and with any entities and individuals who may
be working at the Hotel or otherwise associated with the Hotel. Purchaser shall also use best efforts to minimize the likelihood of any strike, work stoppage or other labor disturbance. Any damage, cost or delay to the Seller as a direct or indirect
result of labor disputes or disturbances which are directed at the Hotel (as opposed to a labor dispute or disturbance on the entire market), shall be the sole responsibility of the Purchaser. 
 (b) The provisions of this Section 2.7 shall survive Closing or termination of this Agreement. 
 ARTICLE III 
 CONDITIONS TO
CLOSING 
 3.1. Conditions to Seller’s Obligations. Seller’s obligations are conditioned on the following (as of the
applicable time specified in each subparagraph below): 
 (a) Purchaser’s Performance. Purchaser shall have delivered to Seller
within ten (10) days after the date hereof a corporate resolution authorizing Purchaser’s entry into this Agreement and consummation of the transactions contemplated herein. Purchaser shall be ready, willing and able to deliver the funds
required, and all the documents to be delivered by Purchaser under this Agreement, shall have performed all other covenants, undertakings and obligations to be performed by Purchaser on or prior to such date under this Agreement, shall have
satisfied all conditions required by this Agreement to be satisfied by Purchaser at such time, and the representations and warranties of Purchaser set forth in this Agreement shall be true in all material respects with the same effect as if made on
and as of such date. 
 (b) No Legal Prohibition. As of the commencement of construction and as of Closing, no judgment, order or
injunction shall be in force prohibiting Purchaser from consummating the transactions contemplated hereby. 
  

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 (c) Solvency. Until Seller’s receipt of the Deposit in the full amount of $23,000,000, Seller
shall not be obligated to commence construction of the Hotel for Purchaser if Purchaser is in breach of financial covenants in its corporate credit line (s) or is insolvent . 
 (d) Financing. Seller shall not be obligated to construct the Project unless Seller has obtained construction financing for the Project and the
Construction Loan Closing shall have occurred. 
 3.2. Conditions to Purchaser’s Obligations to Close. Purchaser’s
obligation to close the transaction described in this Agreement is conditioned on the following: 
 (a) Seller’s Performance.
Seller shall be ready, willing and able on the Closing Date to deliver all the documents and other items required to be delivered by Seller pursuant to Section 5.1, shall have performed all other covenants, undertakings and obligations
to be performed by Seller on or prior to the applicable Closing Date under this Agreement, and shall have satisfied all conditions required by this Agreement to be satisfied by Seller at or prior to the applicable Closing, and the representations
and warranties of Seller set forth in this Agreement shall be true in all material respects on and as of the Closing Date with the same effect as if made on and as of such date. 
 (b) No Legal Prohibition. No judgment, order or injunction shall be in force prohibiting Seller from consummating the Closing or proceeding with
the development of the Project contemplated hereby. 
 (c) Completion of Construction. Seller shall have achieved Substantial
Completion of Seller’s Work with respect to the construction of the Hotel Suite Floors or Ballroom/Lobby/Support Areas, as applicable, and the Architect shall have issued the Substantial Completion Certificate with respect thereto. 

(d) Insurability of Title. The Title Insurer shall be prepared to issue an ALTA Standard Form owner’s title insurance policy or marked up
and binding and effective specimen policy dated such Closing Date, insuring Purchaser’s fee simple title to the Hotel Parcel (or the portion thereof being acquired at such Closing), subject only to such Schedule B exceptions to the
policy as Purchaser shall approve or be deemed to approve pursuant to Section 4.4 (collectively, the “Permitted Title Exceptions”), in an amount equal to the Purchase Price. Such policy is herein referred to as the
“Title Policy” and shall include extended coverage over the standard general exceptions contained therein, including insurance against any lien for labor or material furnished in connection with the Hotel Parcel (excluding any labor
or materials furnished by, through or under Purchaser), and also including Purchaser’s Endorsements. 
 3.3. Reasonable Efforts.

 (a) Reasonable Efforts. Seller and Purchaser shall each use reasonable best efforts to satisfy, as soon as reasonably practicable,
each of the conditions set forth in this Article III on its part to be satisfied or performed and, upon satisfaction of each such condition, shall give the other party prompt notice thereof. 
  

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 (b) Waiver. At any time or times on or before the date specified for the satisfaction of the
condition or the applicable Closing Date, whichever occurs earlier, Purchaser or Seller may elect to waive in writing the benefit of any of their respective conditions set forth in Sections 3.1 or 3.2, as applicable. 
 3.4. Construction Condition Precedent. This agreement is subject to satisfaction of the Construction Condition Precedent on or before the date
twelve (12) months after the execution hereof. In the event that the Construction Condition Precedent is not timely satisfied, either Seller or Purchaser may terminate this Agreement by written notice to the other at any time prior to
satisfaction of the Construction Condition Precedent. In the event of such termination, the Deposit shall be returned to Purchaser, and neither party shall have any further liability hereunder, except for obligations which survive termination of
this Agreement. The “Construction Condition Precedent” means commencement of construction of the Project has occurred. Without modifying the foregoing, Purchaser acknowledges that the Construction Condition Precedent may not be
satisfied for any number of reasons, including adverse changes in financial or real estate markets or inability of Seller to pre-sell a sufficient number of Units, and Seller shall have no liability to Purchaser if the Construction Condition
Precedent is not satisfied within the required period. 
 ARTICLE IV 
 COVENANTS AND AGREEMENTS 
 4.1. Seller Covenants. Seller shall
promptly undertake the following with due diligence and in an expeditious manner, and in any event, within any time periods specifically set forth below: 
 (a) Governmental Approvals. Use its reasonable best efforts to obtain all permits and approvals of municipal authorities having jurisdiction for zoning and construction of the Building; 
 (b) Commencement of Construction. Upon the satisfaction or waiver of the conditions set forth in Sections 3.1 and Section 4.1(a)
hereof, and the issuance of a building permit therefor, commence and complete the construction of the Building substantially in accordance with the Final Building Plans and in compliance with all applicable laws, codes, ordinances, rules and
regulations (“Legal Requirements”), and in connection therewith, obtain and keep in full force and effect all licenses, permits and approvals required by all applicable laws, codes, ordinances, rules and regulations for the
construction of the Project. 
 (c) Hotel Construction. Following commencement of construction, perform Seller’s Work with
respect to the Hotel in accordance with the requirements of this Agreement. 
 (d) Parking Spaces. Construct the Parking Spaces,
whether before or as soon as practical after Closing, but in any event complete an adequate number of Parking Spaces in sufficient time so that they are available to and usable by users of the Hotel (and other applicable parties) at the time of
opening thereof. 
  

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 (e) Vertical Subdivision. Seller shall cause (i) a vertical subdivision plat of the Building
and Land to be prepared by an Illinois registered surveyor (the “Vertical Subdivision Plat”) delineating the Hotel Parcel and the Residential Parcels, creating such legal descriptions as may be necessary to consummate the
transactions contemplated herein and approved in accordance with all Legal Requirements, and (ii) an update and supplement to the Title Report to include the Hotel Parcel be delivered to Purchaser. If Seller determines in its reasonable
judgment that it is not feasible for the Vertical Subdivision Plat to be approved and recorded prior to Closing, Seller shall prior to Closing cause a metes and bounds survey of each applicable portion of the Hotel to be prepared, and Closing shall
occur based on such legal description. In such event Seller shall deliver a Plat Act Affidavit to the Title Insurer at Closing, and it shall be a condition precedent to Purchaser’s obligation to close that the Title Insurer agrees to issue the
Title Policy based on such metes and bounds description. 
 (f) Punchlist Items. Seller shall cause any “punchlist” items
relating to the Hotel to be corrected or completed within a reasonable period of time. 
 (g) Hotel Warranty. At each Closing, Seller
shall cause General Contractor to issue to Purchaser a separate warranty (“Hotel Construction Warranty”) with respect to the portion of the Hotel being acquired in the same form and substance as that issued by the General Contractor
to Seller with respect to the balance of the Building. Without limiting the foregoing, said warranty shall obligate General Contractor to complete all punchlist work and to correct all defects in materials and workmanship for a period of not less
than one (1) year after completion. So long as the Hotel Construction Warranty is delivered, Seller shall have no liability to Purchaser for defects in materials or workmanship in connection with the construction of the Hotel. Seller shall
cooperate with Purchaser’s enforcement of the Hotel Construction Warranty. 
 4.2. Purchaser’s Covenants with respect to
Seller’s Loan. This Agreement may be collaterally assigned by Seller to Seller’s construction lender or lenders (collectively, “Seller’s Lender”) as security for the Construction Loan, and Seller’s Lender
shall be entitled to succeed to the interest of Seller hereunder. At Construction Loan Closing, Seller, Purchaser and Seller’s Lender shall enter into a tri-party agreement in such form and substance as is reasonably required by Seller’s
Lender. The tri-party agreement shall provide, among other things, (i) for the payment of the Purchase Price to Seller’s Lender to be applied to the Construction Loan, (ii) for the simultaneous release of the Hotel from the mortgage
and other security interests securing the Construction Loan, (iii) for Purchaser’s approval (to the extent required) of title, survey, plans and specifications, the Building Operating Agreement and other items susceptible of approval by
Purchaser at the time of entry into the tri-party agreement and (iv) for Seller’s Lender to have reasonable notice and cure rights with respect to this Agreement. Purchaser shall (without material additional costs or exposure to Purchaser)
cooperate with Seller in Seller’s efforts to satisfy the requirements of Seller’s Lender in order to close the Construction Loan. To the extent Seller’s Lender requires changes to this Agreement to permit financing of the Project,
Purchaser shall agree to such changes if they do not materially adversely affect Purchaser and shall otherwise not unreasonably withhold or delay its approval of required changes. 
  

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 4.3. Building Operating Agreement; Parking. 
 (a) Seller and Purchaser will undertake, with due diligence and in an expeditious and good faith manner within sixty (60) days after the date hereof
(and in any event concluding prior to Construction Loan Closing), to prepare and negotiate, the terms and conditions of a Declaration of Covenants, Conditions, Restrictions, and Easements covering the Building and the Land and including appropriate
and reasonable allocations of common costs, including maintenance of common facilities (such as master antenna, satellite and/or cable system, loading docks and parking), mechanisms for dispute resolution, mutual support, access and other customary
easements, and customary covenants, conditions and restrictions (the “Building Operating Agreement”), provided that, among other things, the owner of the Apartment Parcel shall have primary control over (with certain appurtenant
responsibilities for) common facilities and sole development rights and rewards with respect to the roof of the Building, subject to reasonable limitations on development to be negotiated and included in the Building Operating Agreement. The
Building Operating Agreement shall provide for access to and maintenance of the pedway (with fifty percent (50%) of such maintenance costs to be paid by Purchaser), subject to the rights of and requirements of the City of Chicago. Seller
reserves the right to dedicate the pedway and other improvements to the City of Chicago or other governmental authorities. The Building Operating Agreement shall provide for the prompt removal or insuring over of any mechanic’s lien arising
from work contracted for by any one owner and attaching to property owned by another owner and for the right of a non-defaulting owner to remove a lien arising from work contracted for by a defaulting owner. The Building Operating Agreement shall
also provide for the payment of real estate taxes until such real estate taxes are separately assessed to each component of the Project (in a manner consistent with Article VI hereof) and shall provide that in the event of a default by a
party in paying its specified share of the real estate taxes and the payment of such taxes by another party, the paying party shall have a lien against the defaulting party’s component of the Project. 
 (b) The Building Operating Agreement will grant to Purchaser an easement for non-exclusive use of not less than seventy-two (72) (subject to
increase as set forth below) Parking Spaces in the public parking garage (collectively, the “Hotel Spaces”). The Hotel Parking Spaces shall not be specifically reserved or physically separated spaces. Users of the Hotel Spaces shall
be obligated to pay daily or monthly parking fees at standard garage rates. Forty seven (47) additional Parking Spaces shall remain available (i.e. not be deeded or granted by easement to another party) to be added to the Hotel Spaces in the
event of conversion of the Hotel to residential use. 
 4.4. Title and Survey. 
 (a) Preliminary Title Report and Survey. Seller has delivered to Purchaser (i) a commitment for an ALTA Owner’s Policy of Title Insurance
(“Title Policy”) from First American Title Insurance Company (“Title Insurer”) with respect to the Land, together with complete, accurate and legible copies of the underlying documents relating to the Schedule
B exceptions set forth in such report, if any (collectively, the “Title Report”), and (ii) the last available survey of the Land prepared in accordance with the next current ALTA/ACSM Survey Standards
(“Survey”). The process for reviewing the Title Report and the Survey shall be as follows: 
  

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 (i) Within thirty (30) days after the date of this Agreement (together, “Title Review
Period”), Purchaser shall give Seller notice of Purchaser’s disapproval of any matters shown in the Title Report or the Survey (“Purchaser’s Title Notice”) and Purchaser shall give the Title Insurer a list of its
requested endorsements to the Title Policy (collectively, “Purchaser’s Endorsements”). (Purchaser has given the Title Insurer the list of Purchaser’s Endorsements and Purchaser’s Endorsements are agreed to be the
endorsements identified on Exhibit F attached hereto and made a part hereof.) The failure of Purchaser to give Purchaser’s Title Notice on or before the end of the Title Review Period shall be conclusively deemed to constitute
Purchaser’s approval of the condition of title to the Land and of the Survey and any exceptions or defects shown shall be deemed “Permitted Title Exceptions” for all purposes of this Agreement. A list of exceptions of which
Purchaser is currently aware and has received copies of and which in any event shall be Permitted Title Exceptions is attached as Exhibit F to this Agreement and made a part hereof. As the Permitted Title Exceptions are updated in
accordance with this Agreement, the parties may elect to attach an updated list of Permitted Title Exceptions. 
 (ii) If Purchaser
disapproves in writing any matter of title shown in the Title Report or Survey that relates to or affects, or in the future could reasonably relate to or affect, the Hotel Parcel within the Title Review Period, then Seller may, but (except as
provided below in this clause (ii)) shall have no obligation to, within 10 Business Days after its receipt of Purchaser’s Title Notice (“Seller’s Election Period”), elect to eliminate or insure over to Purchaser’s
reasonable satisfaction the disapproved title matters by giving Purchaser written notice (“Seller’s Title Notice”) of those disapproved title matters, if any, which Seller agrees to so eliminate or insure over by the Closing
Date; provided, that (x) Seller shall be obligated to eliminate or insure over at Closing to Purchaser’s reasonable satisfaction all monetary liens or encumbrances of an ascertainable amount created by Seller which encumber the Hotel
Parcel upon Closing and (y) Seller shall be obligated to remove or cause the Title Insurer to remove or insure over at Closing involuntary liens aggregating up to One Million Dollars ($1,000,000). 
 (iii) Subject to the exception set forth in clause (ii) above, if Seller does not elect to so eliminate or insure over all disapproved title
matters, or if Purchaser disapproves Seller’s Title Notice, or if Seller fails to timely deliver Seller’s Title Notice, or if the Title Insurer refuses to commit to issue at Closing Purchaser’s Endorsements (subject to customary
conditions and requirements relating thereto which Purchaser has the ability to satisfy or, absent such ability, which Seller agrees to satisfy [provided that Seller has no obligation to do so]), then Purchaser shall have the right, upon delivery to
Seller (on or before five (5) Business Days following the expiration of Seller’s Election Period) of a written notice, to either: (A) waive its prior disapproval, in which event said disapproved matters shall be deemed unconditionally
approved and Permitted Title Exceptions; or (B) terminate this Agreement. Failure to take either one of the actions described in (A) and (B) above shall be deemed to be Purchaser’s election to take the action described in
(A) above. 
 (iv) If, in Seller’s Title Notice, Seller has agreed to either eliminate or insure over to Purchaser’s
reasonable satisfaction by the Closing Date certain disapproved title matters described in Purchaser’s Title Notice or if Seller agrees to satisfy a condition or requirement necessary to issue a Purchaser’s Endorsement, but Seller is
unable to do so at Closing, then Purchaser may terminate this Agreement. 
  

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 (v) In the event this Agreement is terminated by Purchaser pursuant to the provisions of
Section 4.4, the Deposit shall be returned and neither party shall have any further rights or obligations hereunder, except as may be otherwise expressly provided herein. 
 (b) Seller to Remove Certain Liens. At each Closing, Seller shall cause the Title Insurer to delete or insure over (to Purchaser’s reasonable
satisfaction) any exception to title relating to the portion of the Hotel Parcel being acquired that (i) Seller agreed to eliminate or insure over in Seller’s Title Notice, (ii) by its terms, constitutes a lien to secure the repayment
of borrowed indebtedness by Seller and may be removed or satisfied by the payment of a liquidated sum of money, including any liens existing pursuant to the terms of any Construction Loan Seller obtains for the purpose of constructing the Project,
or (iii) Seller is obligated to eliminate pursuant to Section 4.4(a)(ii) (“Voluntary Liens”). 
 (c)
Seller’s Obligation to Cure Objections and Other Matters. If at any time after Permitted Title Exceptions have been approved or deemed approved by Purchaser pursuant to clause (a) above and prior to Closing there shall arise any
exception to title or any survey defect first disclosed in any updated title report or updated survey, Seller shall promptly notify Purchaser and Purchaser shall then have ten (10) Business Days in which to either (A) object in writing to
such exception or defect (“Objection”), or (B) accept such exception or defect in which event it shall be deemed a Permitted Title Exception. If Purchaser makes an Objection, the procedures set forth in clauses
(a)(ii)-(v) shall apply. If Purchaser fails to notify Seller of an Objection within said ten (10) Business Day period, the exception or defect in question shall be deemed approved and shall constitute a Permitted Title Exception. In no
event shall Seller be obligated to remove or insure over any mechanics’ liens or mechanics’ lien exception prior to Closing. 
 (d)
New Permitted Title Exceptions. Notwithstanding anything to the contrary herein contained, from time to time hereafter, Seller may elect to record against the Land easements or dedications to utilities or governmental authorities and
additional title exceptions of a similar nature reasonably required or desirable in connection with the development of the Project or the development of adjacent parcels in the Lakeshore East development. Such additional title exceptions may include
utility easements, plats (including the Vertical Subdivision Plat), modifications to existing title exceptions and other similar recorded documents. Seller shall endeavor to deliver new title exceptions to Purchaser for comment prior to execution
thereof but so long as any such documents are reasonably required for such purposes and do not materially adversely affect the Hotel Parcel, such document shall constitute an additional Permitted Title Exception without Purchaser’s express
approval and Purchaser shall not be entitled to issue an Objection thereto. 
 (e) Adjournment of Closing to Cure Title Exceptions. If
there are Objections raised less than ninety (90) days prior to a Closing, the provisions of Section 4.4 above shall apply, and Seller, by notice to Purchaser, shall be entitled to a reasonable adjournment of the applicable Closing
Date (but not beyond such ninety (90) days) to attempt to do so. 
 (f) Legal Description. If the Hotel is to be conveyed to
Purchaser by a metes and bounds legal description (prior to completion of the Vertical Subdivision Plat), Seller shall provide such legal description and survey of the Hotel Parcel showing the metes and bounds of 

  

 16 

 
the Hotel as soon as prepared and in any event not less than fifteen (15) days prior to the first Closing to occur. Such survey shall be sufficient to
cause the Title Insurer to issue the Title Policy in the form required hereby. 
 4.5. Insurance. Prior to commencement of
construction of the Building, Seller shall obtain and cause to be kept in full force and effect through the Closing “builder’s risk” property insurance protecting the Project from damage, loss or injury by fire, the perils
contemplated by the standard builder’s risk insurance. 
 4.6. Environmental Reports. Seller has offered to make available to
Purchaser for Purchaser’s review prior to execution of this Agreement the most recent environmental reports obtained by Seller prior to execution hereof (“Existing Environmental Reports”). Seller shall cooperate with Purchaser
with respect to Purchaser obtaining (at its own expense) updates or reliance letters as described by Purchaser or Purchaser’s lender. Seller is not warranting to Purchaser the environmental condition of the Land and releases Seller from any
liability or claim with respect to the environmental condition of the Land, provide that Purchaser does not release Seller of any legal rights Purchaser may have to indemnification or contribution with respect to any action brought against Purchaser
by a third party. 
 4.7. Impairment of Conditions. Neither party to this Agreement shall take an affirmative act that shall impair or
prevent the satisfaction of any condition to the Closing or that shall cause any representation or warranty to become untrue, unless such action is expressly authorized by this Agreement. 
 ARTICLE V 
 DELIVERIES AT CLOSING 
 5.1. Deliveries by Seller. At each Closing, Seller shall deliver or cause to be delivered to Purchaser the following documents, instruments and
other items, all of which shall be in form and substance reasonably satisfactory to Purchaser: 
 (a) Deed. A special warranty deed
(the “Deed”) duly executed and acknowledged by Seller. Such Deed shall convey the Hotel Suite Floors or Ballroom/Lobby/Support Areas, as applicable, to Purchaser, subject only to the Permitted Title Exceptions and to claims by,
through or under Purchaser. 
 (b) Bill of Sale. A bill of sale, conveying any personalty owned by Seller included in the applicable
portion of the Hotel being acquired at such Closing, duly executed by Seller in favor of Purchaser, without any warranty, except that the conveyed personalty is free of claim by, through or under Seller. 
 (c) Transfer Tax Returns and Payments. Originals of any required real estate transfer tax declarations or any other similar documentation imposed
by the State of Illinois, Cook County and City of Chicago on the transaction contemplated hereby, executed by Seller, together with amounts equal to the transfer taxes imposed by the State of Illinois and Cook County on such transaction. 

 

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 (d) Construction Warranties. Issuance of the Hotel Construction Warranty for the applicable
portion of the Hotel being acquired at such Closing. 
 (e) FIRPTA Affidavit executed by Seller and acknowledged. 
 (f) Certificate as to Authority. A certificate of Seller, duly certified by the members of Seller, certifying to the authority on behalf of Seller
of the persons executing this Agreement, the Deed and the other documents executed by the Seller and delivered at or prior to the Closing. 
 (g) Certificate of Seller Regarding Representations executed by Seller consistent with the provisions of Section 7.1. 
 (h) Title Affidavit. An affidavit and a gap undertaking of Seller in the form customarily required by the Title Insurer in order to issue the Title Policy. 
 (i) Lien Searches. Uniform Commercial Code lien search and judgment and tax lien searches in the County of Cook and in the office of the Secretary
of State of Illinois, with respect to the Land, Building and Seller dated no more than thirty (30) days prior to the Closing Date showing no liens against the applicable portion of the Hotel being acquired at such Closing (except for those to
be released at Closing). 
 (j) Building Operating Agreement. If not previously recorded, counterparts, in recordable form, of the
Building Operating Agreement executed by Seller, including the consent of Seller’s Lender and its agreement to subordinate the lien of its mortgage to the Building Operating Agreement. 
 (k) Title Policy. The Title Policy provided for in Section 4.4. 
 (l) Plat Act Affidavit. If the Vertical Subdivision Plat has not been recorded, Seller shall furnish a Plat Act Affidavit to the effect that the
Vertical Subdivision Plat is not required for recording of the Deed. 
 (m) Other Items. Such other documents and instruments as may
be required to be delivered hereunder by Seller at or prior to the Closing. 
 5.2. Deliveries by Purchaser. At each Closing,
Purchaser shall deliver or cause to be delivered to Seller the following documents, instruments and other items, all of which shall be in form and substance reasonably satisfactory to Seller: 
 (a) Amount Payable at the Closing. The amount payable at such Closing in accordance with Section 1.2, as the same may be adjusted in
accordance with the terms hereof; 
 (b) Transfer Tax Returns and Payment. Copies of any required real estate transfer tax
declarations executed by Purchaser or any other similar documentation imposed by the State of Illinois, County of Cook or City of Chicago on the transaction contemplated hereby, together with an amount equal to the transfer tax imposed by the City
of Chicago in connection with such transaction; 
  

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 (c) Building Operating Agreement. If not previously recorded, counterparts, in recordable form, of
the Building Operating Agreement executed by Purchaser, including the consent of Purchaser’s lender thereto and its agreement to subordinate the lien of its mortgage to the Building Operating Agreement. 
 (d) Certificate Regarding Purchaser’s Representations executed by Purchaser consistent with the provisions of Section 7.2.

 (e) Other Items. Such other documents and instruments required to be delivered hereunder by Purchaser at or prior to the Closing.

 ARTICLE VI 
 APPORTIONMENTS AND CLOSING COSTS 
 6.1. Items of Apportionment. The following items shall be apportioned
between Seller and Purchaser as of each Closing Date and with respect to the applicable portion of the Hotel being conveyed on such Closing Date: 
 (a) Property Taxes and Assessments. 
 (i) General real estate taxes. 
 (A) Seller and Purchaser acknowledge that general real estate taxes for the Hotel Parcel for the year in which Closing occurs (and for prior years) shall
be assessed together with general real estate taxes for the balance of the Building and the Land. As soon as reasonably practical after the Closing Date, the parties shall file all necessary applications and documents with the Cook County Assessor
for a tax division to separate the Hotel Parcel. The parties shall cooperate with each other in obtaining such tax division. 
 (B) At
Closing, there shall be no proration for real estate taxes. General real estate taxes assessed for all years prior to the year in which Closing occurs shall be paid by Seller before such real estate taxes become delinquent. Upon receipt of the real
estate tax bill for the first installment of real estate taxes assessed for the year in which the Closing occurs, Seller shall promptly provide a copy of such bill to Purchaser together with a calculation of the portion of such bill allocable to the
Hotel Parcel, as reasonably determined by Seller, i.e., based upon a method of allocating such taxes mutually agreed upon by the parties prior thereto that attempts to equitably allocate taxes between the Hotel and Residential Parcels based upon the
best information available to the parties on the date such allocations are made (including, without limitation, any information available from the assessor’s office), but, absent such mutual agreement, then pro-rata, based upon the gross square
feet in the Hotel Parcel and the Residential Parcels, respectively, provided that with respect to any tax year for which the Land is assessed as improved property, the parties shall adjust such proration to reflect the assessment rates of different
types of property (e.g. to reflect the lower percentage of assessed value applicable to the Units as residential property). Such calculation shall also be based upon the most recent ascertainable assessments, tax rates, and multiplier for each
permanent index number applicable to the Land and Project. All allocations under this Section 6.1(a) for the year in which the Closing occurs shall be based upon a fraction determined by dividing the number of days elapsed 

  

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through the Closing Date by 365. General real estate taxes shall be allocated on the same basis at the time that the actual amount of the real estate taxes
for the year in question are finally determined. Payments in connection with any allocation of real estate taxes shall be due within ten (10) days of written notice and thereafter shall bear interest at the Interest Rate. The foregoing
procedure for allocating taxes shall be followed for each year until a separate tax bill(s) issues for the Hotel Parcel. 
 (ii)
Assessments. If, on the Closing Date, the Land or the Project shall be or shall have been affected by any special assessments, Seller shall be responsible for all such assessments (or, as to assessments which are payable in installments,
those installments of such assessments, including interest thereon) due and payable on or prior to the Closing Date (the current installment of which shall be apportioned at the Closing). As between Seller and Purchaser, Purchaser shall be
responsible for the payment of all installments (and interest) which become due and payable after the Closing Date and which are allocable to the Hotel Parcel, as determined by Purchaser and Seller as set forth below, and Seller is solely
responsible for all such installments of assessments which are payable after the Closing Date, including interest thereon, that are allocable to the Residential Parcels, as determined by Purchaser and Seller as set forth below. Such determinations
shall be made based upon a method of allocating such assessments mutually agreed upon by the parties prior thereto that attempts to equitably allocate assessments between the Hotel Parcel and Residential Parcels based upon the best information
available to the parties on the date such allocations are made (including, without limitation, any information available from the assessor’s office), but absent such mutual agreement, then pro-rata, based upon the gross square feet (exclusive
of parking) in the Hotel Parcel and the Residential Parcels, respectively. 
 (b) Refunds or credits. All net real estate tax refunds
and credits (i.e., after deducting therefrom any reasonable attorneys’ fees and disbursements incurred in obtaining such refunds or credits) attributable to any year prior to the year in which the Closing occurs shall belong to and be the
property of Seller; all net refunds and credits attributable to the Hotel Parcel for any year in which the Residential Parcels and the Hotel Parcel are separately taxed shall belong to and be the property of Purchaser; and all net refunds and
credits received after the Closing attributable to the year during which the Closing occurs or any other subsequent year before the Residential Parcel and the Hotel Parcel are separately taxed shall be reasonably apportioned between Seller and
Purchaser (including allocating the refund to a component to which the refund was intended to apply). Apportionments shall be made pursuant to this subsection (c) employing the same methods as provided for in Section 6.1(a)(i)(B)
above for taxes. 
 (c) Protests prior and subsequent to Closing. The initiation, withdrawal, settlement or compromise of any protest
or reduction proceeding affecting real estate taxes or assessments assessed against any portion of the Land or Building prior to the Project components being separately taxed shall be controlled by Seller. Any refund or reduction shall be first
applied to pay the costs of obtaining such refund or reduction. For the year in which the Closing occurs and each year thereafter until the Hotel Parcel is separately assessed, if Seller elects to not initiate or participate in a protest or
reduction proceeding for any such year, Purchaser may initiate and pursue such a protest or reduction proceeding. 
  

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 (d) Notification of utilities. Seller shall notify each utility furnishing telephone, steam,
electricity, gas or any other utility service to the Building of the transfer of title to the Hotel Parcel contemplated in accordance with this Agreement and shall direct each such utility to bill Seller directly for the charges accruing to the
Closing Date and to bill Purchaser for the charges accruing to the Hotel Parcel on and after the Closing Date. Seller shall cause separate meters to be installed for the Hotel Parcel for utility service to the extent provided for in the Final
Building Plans. 
 6.2. Insurance Premiums. Since insurance policies obtained by Seller with respect to the Project will not be
assigned to Purchaser, premiums for insurance policies with respect to the Property will not be apportioned. From and after the Closing Date, the parties and their respective successors and assigns shall be responsible for keeping the Project
insured in accordance with the terms of the Building Operating Agreement between the respective owners of the Hotel Parcel and the Residential Parcels. 
 6.3. Certain Closing Costs. Seller shall pay (i) the premium for the Title Policy (but not Purchaser’s Endorsements), (ii) the cost of the Vertical Subdivision Plat and a tax division petition,
(iii) the State of Illinois transfer tax, if any, attributable to the transfer of the Hotel Parcel, (iv) the Cook County transfer tax, if any, attributable to the transfer of the Hotel Parcel, and (v) all recording charges incurred or
imposed in connection with the Vertical Subdivision Plat and the release of any liens and security interests that are not Permitted Title Exceptions. Purchaser shall pay the transfer tax, if any, imposed by the City of Chicago in connection with the
sale of the Hotel Parcel to Purchaser, the title charges for Purchaser’s Endorsements, and all recording charges in connection with the Deed. The parties shall split equally the (A) commission owed the Broker as specified in
Section 11.3 and (B) cost of a “New York style” or escrow closing. 
 6.4. Escrows. 
 (a) At the time of the Hotel Floors Closing, neither of the two construction hoists for the Project is expected to have been removed. (As set forth in
Section 1.4(c), the Hotel Floors Closing will be scheduled such that one hoist will be expected to be removed prior to the time the Hotel is open for business approximately six (6) months after the Hotel Floors Closing; the other hoist is
expected to be removed within twelve (12) months after the Hotel Floors Closing.) Two Million Dollars ($2,000,000) ($1,000,000 being the “First Hoist Escrow” and the second $1,000,000 being the “Second Hoist
Escrow”) will, therefore, be withheld in escrow by the Title Insurer at the Hotel Floors Closing. If the first hoist to be removed is not removed within six (6) months after the Hotel Floors Closing, Three Thousand Two Hundred Ninety
Dollars ($3,290) per each day thereafter until one hoist is removed shall be released to Purchaser from the First Hoist Escrow; upon removal of one hoist, the balance in the First Hoist Escrow shall be released to Seller. With respect to the second
hoist to be removed, if such hoist is not removed within six (6) months after the Hotel Floors Closing, Three Thousand Two Hundred Ninety Dollars ($3,290) per each day thereafter until the second hoist is removed shall be released to Purchaser
from the Second Hoist Escrow; upon removal of the second hoist, the balance of the Second Hoist Escrow shall be released to Seller. 
  

 21 

 (b) At the time of the Hotel Floors Closing, an additional One Million Dollars ($1,000,000)
(“Entranceway Escrow”; referred to, individually or collectively, with the First Hoist Escrow and the Second Hoist Escrow as an “Escrow”) shall be held in escrow until Seller has performed its obligations under
Section 2.3(f) in all material respects. If Seller has not performed its obligations under Section 2.3(f) in all material respects within six (6) months after the Hotel Floors Closing (subject to Force Majeure and
Purchaser Delays), then Purchaser may after ten (10) days’ prior written notice to Seller, cure any uncured default by Seller in performing such obligations, in which event Purchaser’s actual costs in curing said default shall be paid
to Purchaser from the Entranceway Escrow, and any remaining balance shall be paid to Seller; if Seller timely performs its obligations under Section 2.3(f), upon completion of such performance, the balance in the Entranceway Escrow shall
be paid to Seller. 
 (c) Each Escrow shall be invested in an investment selected by Seller and reasonably satisfactory to Purchaser for the
benefit of Seller, except to the extent the principal of the applicable Escrow is insufficient to pay the amount payable to Purchaser under Section 6.4(a) or Section 6.4(b), as applicable. To the extent any Escrow, including
interest earned thereon, is insufficient to pay the amount payable to Purchaser under Section 6.4(a) or Section 6.4(b), as applicable, Seller shall pay to Purchaser any insufficiency on demand. 
 6.5. Pedway. At the Ballroom Closing, Purchaser shall reimburse the Seller for one-half of the cost of constructing the pedway (which will serve
the Hotel). 
 ARTICLE VII 
 REPRESENTATIONS AND WARRANTIES 
 7.1. Seller’s Representations and Warranties. Seller represents and
warrants to Purchaser that as of the date hereof: 
 (a) Due Organization. Seller is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Illinois with all necessary power and authority to own its properties and conduct its business as presently conducted. 
 (b) Valid and Binding Agreement. Seller has all necessary power and authority to execute, deliver and perform this Agreement and this Agreement
has been duly authorized by Seller and as executed and delivered by Seller constitutes a valid and binding agreement of Seller enforceable in accordance with its terms and does not violate Seller’s organizational documents. 
 (c) Consents. All approvals and consents required in order for Seller to enter into and perform this Agreement have been obtained by Seller.

 (d) No Violation. Neither the execution and delivery of this Agreement nor the performance of the obligations set forth herein and
the consummation of the transactions contemplated hereby will, to Seller’s knowledge, violate any law or conflict with or result in a breach of or constitute a default under any contract, mortgage, deed of trust, indenture, lease or other
instrument or agreement, or any order or decree of any court or governmental instrumentality, binding upon Seller. 
  

 22 

 (e) No Litigation. To Seller’s knowledge, there is no litigation, suit or other legal or
administrative proceeding pending or threatened (i) against Seller which may, if determined adversely to Seller, prevent Seller from performing its obligations under this Agreement or (ii) in relation to the Project which would bind or
materially affect Purchaser or the Hotel after Closing. 
 (f) Environmental. Except with respect to matters disclosed in the Existing
Environmental Reports, Seller has not received written notice of any currently existing hazardous material contamination of the Land. 
 (g)
Knowledge. The person(s) listed with respect to Sellers in Section 11.1 have primary knowledge of matters related to Seller’s representations, warranties and covenants made in this Agreement. 
 If Purchaser has actual knowledge prior to a Closing that any representation or warranty by Seller shall be breached and Purchaser, with that knowledge,
elects to close, Purchaser shall be deemed to have waived any such breach with respect to such Closing. 
 7.2. Purchaser’s
Representations and Warranties. Purchaser represents and warrants to Seller that as of the date hereof: 
 (a) Due Organization.
Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware with all necessary power and authority to own its properties and conduct its business as presently conducted. 
 (b) Valid and Binding Agreement. Purchaser has all necessary power and authority to execute, deliver and perform this Agreement and this Agreement
has been duly authorized by Purchaser and as executed and delivered by Purchaser constitutes a valid and binding agreement of Purchaser enforceable in accordance with its terms and does not violate Purchaser’s organizational documents.

 (c) Consents. All approvals and consents required in order for Purchaser to enter into and perform this Agreement have been
obtained. 
 (d) No Violation. Neither the execution and delivery of this Agreement nor the performance of the obligations set forth
herein and the consummation of the transactions contemplated hereby will, to Purchaser’s knowledge, violate any law or conflict with or result in a breach of or constitute a default under any contract, mortgage, deed of trust, indenture, lease
or other instrument or agreement, or any order or decree of any court or governmental instrumentality, binding upon Purchaser. 
 (e) No
Litigation. There is no litigation, suit or other legal or administrative proceeding pending or, to Purchaser’s knowledge, threatened against Purchaser which may, if determined adversely to Purchaser, prevent Purchaser from performing its
obligations under this Agreement. 
  

 23 

 If Seller has actual knowledge prior to a Closing that any representation or warranty by Purchaser shall
be breached and Seller, with that knowledge, elects to close, Seller shall be deemed to have waived any such breach with respect to such Closing. 
 7.3. Purchaser’s Acknowledgment. Purchaser acknowledges that, except as expressly set forth in this Agreement or in any document delivered by Seller hereunder: (i) neither the Seller nor any agent, employee or other
representative of the Seller has made any representation or warranty whatsoever, express or implied, regarding the Land or the Building (including the Hotel and the Hotel Parcel), including representations as to the physical nature or condition of
same or the Purchaser’s intended use of the Hotel Parcel and (ii) the sale of the Hotel to Purchaser shall be “AS IS” and is made without any warranties, express or implied, except as expressly set forth in this Agreement or in
any document issued by Seller pursuant hereto. Purchaser releases Seller of any claim or action with respect to the physical condition of the Hotel and the Hotel Parcel, except for Seller’s express warranties and obligations under this
Agreement or in any document issued by Seller pursuant hereto. Nothing herein shall be deemed to limit or impair the Hotel Construction Warranty. 
 ARTICLE VIII 
 DEFAULT; REMEDIES 
 8.1. Seller’s Default. 
 (a) Events of Default. Seller shall be deemed to be in default
under this Agreement in the event that Seller shall fail to perform any of Seller’s covenants, agreements and obligations under this Agreement in accordance with its terms and such failure shall continue (x) if monetary, for a period of
ten (10) days after notice of default from Purchaser, or (y) if non-monetary, for a period of 30 days after such notice from Purchaser (or for such additional period of time (but not beyond an additional sixty [60] days) as may be
reasonably necessary if such failure cannot reasonably be cured within said 30 day period, but is reasonably susceptible of being cured), during which period Seller shall have the right to cure or remedy such failure, provided that no notice or cure
period shall be applied with respect to Seller’s default in closing on a Closing Date. In no event shall Seller’s inability to cause the Title Policy to be issued be deemed a default by Seller (and in no event shall Seller be obligated to
remove or cause the Title Insurer to remove or insure over involuntary liens aggregating in excess of $1,000,000) provided that Purchaser may in such event exercise its rights under Section 4.4 with respect thereto. The foregoing grace
and cure periods shall not be deemed to modify Purchaser’s rights to terminate this Agreement pursuant to Section 2.3(e) or Section 3.4 hereof, which rights are exercisable within the time periods respectively set forth
in said sections. 
 (b) Purchaser’s Remedies. In the event a Closing shall fail to occur by reason of any default by Seller
under this Agreement, Purchaser shall have the right, at its option, as its sole and exclusive remedy (A) to terminate this Agreement and receive return of the Deposit, or (B) seek, pursue and obtain, to the fullest extent permitted by
law, specific performance of Seller’s obligations under this Agreement. 
  

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 8.2. Purchaser’s Default. 
 (a) Events of Default. Purchaser shall be deemed to be in default under this Agreement (an “Event of Default”) in the event that
Purchaser shall fail to perform any of Purchaser’s covenants, agreements and obligations under this Agreement in accordance with its terms and such failure shall continue (x) if monetary (including the failure of Purchaser to increase the
Deposit as specified in Section 1.3) for a period of ten (10) days after notice of default from Seller, or (y) if not described in subsection (x) immediately above, for a period of 30 days after such notice from Seller (or
for such additional time (but not beyond an additional sixty [60] days) as may be reasonably necessary if such failure cannot reasonably be cured within said thirty (30) day period, but is reasonably susceptible of being cured), during which
period Purchaser shall have the right to cure or remedy such failure, provided that no notice or cure period shall be applicable with respect to Purchaser’s default in closing on a Closing Date. 
 (b) Seller’s Remedies. 
 (i) In
the event that an Event of Default by Purchaser shall occur prior to the First Increased Deposit Date, then Purchaser shall be liable to Seller for Seller’s damages in connection with such termination in the maximum amount of the sum
(“First Damage Cap”) of (x) the Deposit and (y) Thirty-Six Million Dollars ($36,000,000). In such event, Seller may draw upon Deposit to compensate Seller for its damages and may additionally bring an action for damages
against Purchaser to collect any actual damages in excess of the amount of the Deposit up to the First Damage Cap. 
 (ii) In the event that
an Event of Default by Purchaser shall occur on or after the First Increased Deposit Date but prior to the Second Increased Deposit Date, then Purchaser shall be liable to Seller for Seller’s damages in connection with such termination in the
maximum amount of the sum (“Second Damage Cap”) of (x) the Deposit and (y) Eighteen Million Dollars ($18,000,000). In such event, Seller may draw upon Deposit to compensate Seller for its damages and may additionally bring
an action for damages against Purchaser to collect any actual damages in excess of the amount of the Deposit up to the Second Damage Cap. 
 (iii) In the event that an Event of Default by Purchaser shall occur on or after the Second Increased Deposit Date, Seller’s sole and exclusive remedy shall be to terminate this Agreement and retain, as liquidated damages, the Deposit
(the “Liquidated Damages”). In view of the difficulty of accurately ascertaining the actual loss and damages which Seller will suffer by reason of this transaction not closing, commencing on the Second Increased Deposit Date the
Liquidated Damages provided for in this Subsection 8.2(b)(iii) are hereby fixed and agreed by the parties as the agreed upon liquidated damages (and not a penalty) that the parties acknowledge reflects a reasonable estimate of damages and
that the parties agree that Purchaser shall pay by reason of Purchaser’s Event of Default. Without limiting the foregoing, the parties agree that the Hotel includes a ballroom and other substantial facilities which Seller would not otherwise
have constructed in a residential building and which cannot readily be reused by Seller. 
 8.3. Recovery of Litigation Costs. In the
event any dispute between the parties to this Agreement shall result in litigation or other proceeding, the prevailing party shall be entitled to 

  

 25 

 
collect from the non-prevailing party all reasonable costs and expenses, including without limitation reasonable attorneys’ fees and disbursements,
incurred by the prevailing party in connection with such litigation or other proceeding and any appeal thereof. Such costs, expenses, fees and disbursements shall be included in and made a part of the judgment recovered by the prevailing party, if
any. This provision shall survive termination of this Agreement. 
 8.4. Post-Closing Obligations. The foregoing provisions of this
Article VIII shall not relieve the parties from liability with respect to their respective post-closing obligations. 
 ARTICLE IX

 CONDEMNATION AND CASUALTY 
 9.1. Condemnation. 
 (a) Condemnation and Termination. If, on or prior to a Closing Date, all
or any portion of the Hotel Parcel (excluding a portion of the Hotel Parcel which has already been acquired by Purchaser) which would prevent or substantially impair the intended operations of Hotel is taken by eminent domain or is the subject of a
pending material taking which has not yet been consummated, Seller shall notify Purchaser of such fact promptly after obtaining knowledge thereof, and either party shall have the right to terminate this Agreement by giving notice to the other not
later than sixty (60) days after the giving of Seller’s notice, in which event neither party shall have any further obligation hereunder, except for obligations which survive termination of this Agreement. 
 (b) No Termination of Agreement. If neither party elects to terminate this Agreement as described in Section 9.1(a), (i) there
shall be no abatement of the Purchase Price, (ii) any of the conditions set forth in this Agreement that cannot be satisfied solely by reason of such condemnation shall be deemed waived by the applicable party to the extent directly affected by
such condemnation and (iii) Seller shall assign and transfer to Purchaser at the Closing all awards previously made and the rights of Seller to (and Purchaser shall be entitled to receive and keep) all awards to be made for the taking of the
Hotel Parcel (or such portion thereof as is then being conveyed) or any portion thereof or any interest therein. 
 9.2. Damage or
Destruction. 
 (a) Restoration. In the event that the Building, or any part thereof, shall be damaged or destroyed by fire or any
other casualty (“Casualty”) prior to the Closing, Seller shall promptly give Purchaser written notice of such event and, at Seller’s sole cost and expense, shall restore the Building or the portions thereof that shall have been
damaged or destroyed and shall complete any portion of the Project that shall be incomplete, so that on the Closing Date Seller shall have achieved Substantial Completion of Seller’s Work (with respect to the portion of the Hotel being acquired
on such Closing Date), provided that Seller’s Lender makes available insurance proceeds for restoration in accordance with this Section 9.2 and such insurance proceeds are adequate to complete such restoration. If such proceeds are
not made available or are not adequate, then Seller shall have the right to terminate this Agreement by giving notice to Purchaser not later than thirty (30) days after Seller has knowledge that such insurance proceeds 

  

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will not be made available or are inadequate. Additionally, if restoration cannot reasonably be completed by the sooner of (x) the Outside Closing Date
as extended by Force Majeure in connection with such Casualty and (y) nine months after the Outside Closing Date determined without extension for such Casualty, then either party shall have the right to terminate this Agreement by giving notice
to the other not later than thirty (30) days after such Casualty occurs, and in either such event the Deposit shall be returned to Purchaser and neither party shall have any further obligations hereunder, except for obligations which survive
termination of this Agreement. 
 (b) Postponement of Closing. In the event neither Seller nor Purchaser terminates pursuant to
Section 9.2(a), the Closing may be postponed by Seller in the event of any Casualty for such reasonable period of time as may be necessary to complete restoration to the extent required under Section 9.2(a). 
 9.3. No Recision. No termination of this Agreement under Section 9.1 or Section 9.2 shall impair or otherwise affect any
Closing that has already occurred under this Agreement. 
 ARTICLE X 
 NON-COMPETITION AGREEMENTS 
 10.1. Purchaser Non-Compete.
Purchaser agrees not to sell Hotel Suites as individual units (whether marketed as residential condominium units, hotel condominium units or otherwise) until the first to occur of (x) eighty percent (80%) of the Units to be located on the
Condominium Parcel are subject to binding sales contracts (which, for purposes of this Article X, shall mean contracts which are no longer subject to any right of rescission or finance or other contingency) or (y) eighteen
(18) months after the date of this Agreement. After the sale of Hotel Suites as individual units is permitted pursuant to the preceding sentence, the Hotel Suites must be marketed and sold solely as furnished hotel condominium units for not
less than Seven Hundred Dollars ($700) per saleable square foot and the purchaser of the Hotel Suite must have the option to enter into a management contract for the rental of the Hotel Suite as part of the operation of the Hotel. The restrictions
set forth in the immediately preceding sentence shall expire on the first to occur of (i) ninety percent (90%) of the Units to be located on the Condominium Parcel are subject to binding sales contracts and (ii) the date thirty
(30) months after the date of this Agreement; provided, however, that the Hotel Suites must continue to be marketed only as furnished hotel condominium units until the first to occur of (A) ninety-five percent (95%) of the Units to be
built on the Condominium Parcel are subject to binding sales contracts and (B) five (5) years from the date of this Agreement. At Seller’s election, the Deed for the Hotel Suite Floors shall expressly be made subject to such
restrictions. 
 10.2. Seller Non-Compete. Seller shall not convert other components of the Project to use as a hotel until such time
(after opening of the Hotel) as the Hotel ceases to be used as a hotel, provided that nothing herein shall prohibit (i) leasing of furnished apartments for periods of thirty (30) days or more as part of a corporate leasing program,
(ii) leasing of up to four (4) furnished apartments at any one time for guests of residents of Seller or its affiliates, or (iii) construction of a ballroom, meeting space or similar facilities in the podium of the Project to be used
in connection with a hotel not otherwise located in the Project. 
  

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 ARTICLE XI 
 INTERPRETATION; MISCELLANEOUS 
 11.1. Interpretation. In this Agreement, unless
otherwise specified, (a) singular words include the plural and plural words include the singular; (b) defined terms which include a number of constituent parts, things or elements shall be construed as referring separately to each
constituent part, thing or element thereof, as well as to all such constituent parts, things or elements as a whole; (c) words importing any gender include the other gender; (d) references to any party include such party’s successors
and permitted assigns; (e) references to any statute or other provision of law include all applicable rules, regulations and orders adopted or made thereunder and all statutes or other laws amending, consolidating or replacing the statute or
law referred to; (f) references to any agreement or other document, including this Agreement, include all subsequent amendments thereto or hereto or other modifications thereof or hereof entered into in accordance with the provisions thereof or
hereof; (g) the words “include“ and “including“ and words of similar import shall be deemed to be followed by the words “without limitation”; (h) the words “hereto“, “hereof“,
“hereunder“ and words of similar import, refer to this Agreement in its entirety; (i) any words or expressions of duty or obligation used in this Agreement shall be given the same force and effect as though made in the form of
covenants; (j) references to Articles, Sections, paragraphs, Exhibits and Schedules are to the Articles, Sections, paragraphs, Exhibits and Schedules of this Agreement; (k) numbering and headings of Articles, Sections, paragraphs, Exhibits
and Schedules are inserted as a matter of convenience and shall not affect the construction of this Agreement and in no way define, describe or limit the scope or intent of this Agreement or of any of the provisions hereof; (l) all Exhibits and
Schedules to this Agreement are incorporated herein by this reference thereto as if fully set forth herein, and all references herein to this Agreement shall be deemed to include all such incorporated Exhibits and Schedules;
(m) “Seller’s knowledge“, or words of similar import, as used herein, shall mean the current, actual knowledge of Joel Carlins and David Carlins, without independent investigation or inquiry; and (n) “Purchaser’s
knowledge,” or words of similar import, as used herein, shall mean the current, actual knowledge of Cory Warning and Tim Taylor, without independent investigation or inquiry. 
 11.2. Assignment. Neither party shall assign this Agreement or its rights and obligations hereunder without the prior written consent of the other
party, which consent shall be in such other party’s sole discretion. Notwithstanding the foregoing, (i) Seller may, simultaneously with the conveyance of the Land to a single-purpose entity owned by or affiliated with Seller, assign its
rights and obligations under this Agreement to such entity, (ii) Seller may assign this Agreement to Seller’s Lender and (iii) Purchaser may require that the Hotel be conveyed at Closing to a direct or indirect subsidiary or Affiliate
of Purchaser. Upon any assumption contemplated hereunder, there shall be privity of estate between the non-assigning party and such transferee, provided the non-assigning party shall have no duty to recognize the assigning party’s permitted
transferee hereunder unless all of the assigning party’s obligations hereunder accruing and unperformed prior to the effective date of such assignment are performed. 
 11.3. Broker. Seller and Purchaser each represents and warrants to the other that it has not dealt with any broker, except for U.S. Equities Realty, Inc. (“Broker”) who the parties have 

  

 28 

 
agreed to pay (fifty percent [50%] each) a commission at Closing in the aggregate amount of Five Hundred Fifty Thousand Dollars ($550,000) (to be divided
between the Ballroom Closing and the Hotel Floors Closing pro rata in proportion to the Ballroom Purchase Price and the Hotel Floor Purchase Price), in this transaction and each agrees to hold harmless the other and indemnify the
other from and against any and all damages, costs or expenses (including but not limited to reasonable attorneys’ fees and disbursements) suffered by the indemnified party as a result of acts of the indemnifying party that would constitute a
breach of its representation and warranty in this Section 11.3. 
 11.4. Survival of Representations, Warranties, Indemnities
and Covenants. The provisions of this Agreement that contemplate (either expressly or implied) performance after a Closing or after a termination of this Agreement shall survive a Closing or any such termination and shall not be deemed to be
merged into or waived by any documents executed and delivered at such Closing; provided, however, that the representations and warranties contained herein (excluding the Hotel Construction Warranty) shall survive the applicable Closing and the
execution and delivery of the Deed for only a period of six (6) months following the applicable Closing Date (“Survival Period”) and no action based thereon shall be commenced after the expiration of the Survival Period as to
any claim or suspected claim that is not made by notice to the other party prior to the expiration of the Survival Period. Any rights a party may have hereunder in the event such party terminates this Agreement pursuant to the terms hereof shall
survive such termination. 
 11.5. Integration; Waiver. This Agreement, together with the Schedules and Exhibits attached hereto,
embodies and constitutes the entire understanding between the parties with respect to the transactions described herein or contemplated hereunder, and all prior agreements, understandings, representations and statements, oral or written, are
superseded by and merged into this Agreement. Neither this Agreement nor any provision hereof may be waived, modified, amended or discharged except by an instrument signed by the party against whom the enforcement of such waiver, modification,
amendment or discharge is sought and then only to the extent set forth in such instrument. Neither party hereto has relied upon any statement or representation made by any other party or person or on any state of facts which is not expressly set
forth in this Agreement. No waiver by either party hereto of any failure or refusal by the other party to comply with its obligations hereunder shall be deemed a waiver of any other or subsequent failure or refusal to so comply. Any information
disclosed by Seller on any exhibit or schedule shall be deemed disclosed as required on any other exhibit or schedule. 
 11.6. Governing
Law; Waiver of Jury Trial; Consent to Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Illinois, without regard to its principles of conflicts of laws. THE PARTIES HERETO HEREBY WAIVE
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT THEY MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF THIS AGREEMENT. Seller and Purchaser each hereby submits to the exclusive jurisdiction of
the courts of the State of Illinois in the case of any action, suit or proceeding commenced with respect to this Agreement by Seller, Purchaser or any of their respective affiliates, waiving the right of any jurisdiction by reason of their present
or future domicile. 
  

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 11.7. Binding Effect. Subject to the provisions of Section 11.2, this Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. 
 11.8.
Severability. If any term or provision of this Agreement or the application thereof to any persons or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Agreement or the application of such term or
provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforced to the fullest extent permitted by law.

 11.9. Notices. Any notice, request, demand, consent, approval, and other communications provided for under this Agreement shall be
in writing and shall be deemed duly given or made at the time and on the date when personally delivered as shown on a receipt therefor (which shall include delivery by a nationally recognized overnight delivery service) or three (3) Business
Days after being mailed by prepaid certified mail, return receipt requested, to the address for each party set forth below, or one day following transmission by telecopier machine with electronic confirmation of receipt (the original of such notice
to be sent thereafter by courier or mail service, provided that the failure to so confirm by courier or mail service shall not affect the validity of telecopier notice where alternate evidence of receipt by the intended recipient exists), in each
case to the party listed below at the respective addresses and telecopier numbers stated below or at such other or additional offices of which a party listed below shall have notified the party giving such notice in accordance with this
Section 11.09. 
 To Seller: 
 Lakeshore East LLC 
 c/o Magellan Development Group, Ltd. 
 303 E. Wacker Drive, Suite 2750 
 Chicago, IL 60601 
 Attention: Joel M. Carlins and David Carlins 
 Facsimile No.: 312-642-2773 
 with a copy to: 
 Katten Muchin Rosenman LLP 
 525 W. Monroe Street 
 Chicago, IL 60661 
 Attention: Mark C. Simon, Esq. 
 Facsimile No.: 312-577-4517 
 To Purchaser: 
 Strategic Hotel Funding, L.L.C. 
 77 West Wacker Drive, Suite 4600 
 Chicago, Illinois 60601 
 Attention: Laurence Geller 
 Facsimile No.:
                         
  

 30 

 with a copy to: 
 Perkins Coie LLP 
 131 S. Dearborn Street 
 Chicago, IL 60603 
 Attention: Phillip Gordon, Esq. 
 Facsimile No.: 312-324-9400 
 Any notice to be given by any party hereto may be given by the counsel for such party.

 11.10. Counterparts. This Agreement may be executed in counterparts, each of which shall be an original and all of which
counterparts taken together shall constitute one and the same agreement. Signatures by telecopy on this Agreement shall be valid and given equal force and effect as ink signatures. 
 11.11. Estoppel Certificate. At the request of the other party, each party will provide a certificate that this Agreement is unmodified (except as
stated in such certificate) and in full force and effect and as to the absence of known defaults under this Agreement. 
 11.12.
Additional Agreements; Further Assurances. Subject to the terms and conditions herein provided, each of the parties hereto agrees to execute, acknowledge and deliver such documents as the other party shall reasonably request to consummate and
make effective the transactions described in this Agreement, provided that the execution and delivery of such documents by such party shall not result in any additional liability or cost to such party. 
 11.13. Construction. The parties acknowledge that each party and its counsel have reviewed and revised this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any amendment, schedule or exhibit hereto. Nothing in this Agreement is intended to or
shall create or confer any right, remedy or claim in any person not a party to this Agreement, nor shall any insurer be entitled, by subrogation or otherwise, to rely on, enforce or make a claim based on this Agreement except against its own insured
in accordance with the terms of the policy between it and its insured. 
 11.14. Relationship of the Parties. Nothing in this
Agreement shall cause the relationship between Seller and Purchaser to constitute a partnership or joint venture, it being acknowledged by the parties that their sole relationship is that of bona fide seller and purchaser of the real property in
accordance with the terms of this Agreement. 
 11.15. No Recordation. Neither party shall record this Agreement or any memorandum
hereof without the prior written consent of the other party. 
  

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 ARTICLE XII 
 LIST OF DEFINED TERMS 
  

			
	 Definition
	  	Page
	 Acceptable Letter of Credit
	  	3
	 Agreement
	  	1
	 Apartment Parcel
	  	1
	 Architect
	  	2
	 Ballroom Closing Notice
	  	4
	 Ballroom Purchase Price
	  	2
	 Ballroom/Lobby/Support Areas
	  	1
	 Broker
	  	28
	 Building
	  	1
	 Building Design Plans
	  	5
	 Building Operating Agreement
	  	14
	 Business Day
	  	4
	 Casualty
	  	26
	 Closing
	  	3
	 Closing Date
	  	3
	 Condominium Parcel
	  	1
	 Construction Commencement Date
	  	7
	 Construction Condition Precedent
	  	12
	 Construction Loan
	  	3
	 Construction Loan Closing
	  	3
	 Deed
	  	17
	 Deposit
	  	3
	 Earnest Money Letter of Credit
	  	3
	 Event of Default
	  	25
	 Existing Environmental Reports
	  	17
	 Final Building Plans
	  	5
	 Finish Standards
	  	6
	 First Damage Cap
	  	25
	 First Hoist Escrow
	  	21
	 First Increased Deposit Date
	  	3
	 Force Majeure
	  	8
	 General Contract
	  	6
	 General Contractor
	  	6
	 hereof
	  	28
	 hereto
	  	28
	 hereunder
	  	28
	 Hotel
	  	1
	 Hotel Construction Warranty
	  	13
	 Hotel Parcel
	  	1
	 Hotel Purchase Price
	  	2
	 Hotel Spaces
	  	14
	 Hotel Suite
	  	1
	 Hotel Suite Floors
	  	1
	 Hotel-Related Project Components
	  	1
	 include
	  	28
	 including
	  	28
	 Interest Rate
	  	9

  

 32 

			
	 Labor Covenant
	  	10
	 Land
	  	1
	 Legal Requirements
	  	12
	 Liquidated Damages
	  	25
	 Modified Raw Shell Condition
	  	7
	 Objection
	  	16
	 Outside Completion Date
	  	7
	 Parking Spaces
	  	2
	 Permitted Title Exceptions
	  	11, 15
	 Plans
	  	2
	 Project
	  	1
	 Purchase Price
	  	2
	 Purchaser
	  	1
	 Purchaser Delays
	  	8
	 Purchaser’s Endorsements
	  	15
	 Purchaser’s knowledge
	  	28
	 Purchaser’s Plan Approval
	  	5
	 Purchaser’s Plan Approval Rejection Notice
	  	5
	 Purchaser’s Title Notice
	  	15
	 Purchaser’s Work
	  	9
	 Residential Parcels
	  	1
	 Scheduled Completion Date
	  	7
	 Second Damage Cap
	  	25
	 Second Hoist Escrow
	  	21
	 Second Increased Deposit Date
	  	3
	 Seller
	  	1
	 Seller’s Election Period
	  	15
	 Seller’s knowledge
	  	28
	 Seller’s Title Notice
	  	15
	 Seller’s Work
	  	2, 7
	 Substantial Completion
	  	7
	 Substantial Completion Certificate
	  	7
	 Survey
	  	14
	 Survival Period
	  	29
	 Title Insurer
	  	14
	 Title Policy
	  	11, 14
	 Title Report
	  	14
	 Title Review Period
	  	15
	 Units
	  	1
	 Vertical Subdivision Plat
	  	13

  

 33 

 IN WITNESS WHEREOF, each party hereto has caused this Agreement of Purchase and Sale to be duly executed
on its behalf on the day and year first above written. 
  

			
	SELLER:
	
	 LAKESHORE EAST, LLC, an
 Illinois limited
liability company

		
	By:	 	/s/ David Carlins
	Name:	 	David Carlins
	Title:	 	  
	
	PURCHASER:
	
	STRATEGIC HOTEL FUNDING, L.L.C., a Delaware limited liability company
		
	By:	 	/s/ Laurence Geller
	Name:	 	Laurence Geller
	Title:	 	President and Chief Executive Officer

  

 34

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