PURCHASE AND SALE AGREEMENT

PURCHASE AND SALE AGREEMENT

BY AND BETWEEN

THE WESTIN CHICAGO
LIMITED PARTNERSHIP,
a Delaware limited partnership

AS SELLER

AND

JER PARTNERS ACQUISITIONS III, LLC,
a Delaware limited liability company

AS PURCHASER

DATED AS OF OCTOBER 18, 2004

FOR THE

THE WESTIN MICHIGAN AVENUE
CHICAGO
Chicago, Illinois

Table of Contents

i

ii

iii

LIST OF EXHIBITS

iv

LIST OF SCHEDULES

v

PURCHASE AND SALE AGREEMENT

     THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) is made and entered into as of this 18 ^th day of October, 2004, by and between THE WESTIN CHICAGO LIMITED PARTNERSHIP, a Delaware limited partnership (“Seller”), and JER PARTNERS ACQUISITIONS III, LLC, a Delaware limited liability company (“Purchaser”). (Seller and Purchaser are sometimes referred to herein individually as a “Party”, and collectively as the “Parties”).

     WHEREAS, Seller is the owner of the hotel facility located at 909 N. Michigan Avenue, Chicago, Illinois, and commonly known as THE WESTIN MICHIGAN AVENUE CHICAGO (the “Hotel”), as more specifically described in this Agreement.

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

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

ARTICLE I

DEFINITIONS

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

     “2004 Capital Work” has the meaning set forth in Section 8.15(a).

     “2004 Capital Work Budget” shall mean the budget established by Seller for the 2004 Capital Work.

     “2005 Capital Work” has the meaning set forth in Section 8.15(a).

     “2005 Capital Work Budget” has the meaning set forth in Section 8.15(a).

     “Access Agreement” means that certain Due Diligence and Access Agreement dated August 16, 2004, by and between Seller and Purchaser.

     “Accounts Receivable” means all amounts which Seller has earned and is entitled to receive from the Business which are not paid as of the Closing, including charges for the use or occupancy of any guest, conference, meeting or banquet rooms or other facilities at the Hotel, any restaurant, bar or banquet services, or any other goods or services provided by, for or on behalf of Seller at the Hotel, but expressly excluding all (i) credit card charges, checks and other

instruments which Seller has submitted for payment as of the Closing, and (ii) items of income otherwise prorated for the benefit of Seller pursuant to Section 11.2.

     “Accrued Benefits” means those items set forth in clauses (ii), (iii) and (iv) of the definition of Compensation.

     “Acquisition Proposal” has the meaning set forth in Section 8.11(a).

     “Adverse Proceeding” has the meaning set forth in Section 9.1(a)(i).

     “Affiliate” means, with respect to the Person in question, any other Person that, directly or indirectly, (i) owns or controls fifty percent (50%) or more of the outstanding voting and/or equity interests of such Person, or (ii) controls, is controlled by or is under common control with, the Person in question. For the purposes of this definition, the term “control” and its derivations means having the power, directly or indirectly, to direct the management, policies or general conduct of business of the Person in question, whether by the ownership of voting securities, contract or otherwise. It is expressly acknowledged that for the purposes of this Agreement Chicago Grill on the Alley, LLC shall not be deemed an Affiliate of Seller, Starwood, Manager, Hotel GP, WHLP or their Affiliates.

     “Aging Receivables” has the meaning set forth in Section 11.3(b).

     “Anti-Terrorism Laws” means Executive Order 13224 issued by the President of the United States, the USA PATRIOT Act, and all other present and future Applicable Laws addressing or in any way relating to terrorist acts and acts of war.

     “Applicable Capital Budget” means the 2004 Capital Work Budget or the 2005 Capital Work Budget, as the context requires.

     “Applicable Capital Work” means the 2004 Capital Work or the 2005 Capital Work, as the context requires.

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

     “Bookings” has the meaning set forth in Section 2.1(q).

     “Books and Records” has the meaning set forth in Section 2.1(n).

     “Break-Up Fee” has the meaning set forth in Section 13.3(a).

     “Broker” shall mean Jones Lang LaSalle Americas, Inc., a Maryland corporation.

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     “Business” shall mean the lodging business and all activities related thereto conducted at the Hotel, including (i) the rental of any guest, conference, meeting or banquet rooms or other facilities at the Hotel, (ii) the operation of any restaurant, bar or banquet services, together with all other goods and services provided at the Hotel, (iii) the rental of any commercial or retail space to tenants at the Hotel, (iv) the maintenance and repair of the Real Property and tangible Personal Property, (v) the employment of the Employees, and (vi) the payment of Taxes.

     “Business Day” means any day other than a Saturday, Sunday or federal legal holiday.

     “Casualty” has the meaning set forth in Section 14.1.

     “CDR” has the meaning set forth in Section 8.16(a).

     “CDR Notice” has the meaning set forth in Section 8.16(a).

     “Closing” has the meaning set forth in Section 10.1.

     “Closing Date” has the meaning set forth in Section 10.1.

     “Closing Escrow” has the meaning set forth in Section 10.2.

     “Closing Escrow Agreement” has the meaning set forth in Section 10.2.

     “Closing Statement” has the meaning set forth in Section 11.1.

     “Closing Tax Year” means the Tax Year in which the Closing Date occurs.

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

     “Compensation” means, with respect to any Employee, all salary and wages which such Employee is entitled to receive at the time in question, together with all employment taxes with respect thereto, including any withholding and employer contributions required under Applicable Law, but expressly excluding all other compensation accrued or payable to such Employee, including any (i) bonus and incentive compensation; (ii) accrued vacation days, sick days and personal days; and (iv) any health, welfare and other benefits provided to such Employee under any Seller Employee Plans, and employer contributions to, and amounts paid or accrued under, any Seller Employee Plans for the benefit of such Employee.

     “Competing Proposal” has the meaning set forth in Section 8.11(b).

     “Condemnation” has the meaning set forth in Section 14.2.

     “Confidential Information” has the meaning set forth in Section 8.1(a).

     “Confidentiality Agreement” means that certain Confidentiality and Access Agreement dated June 25, 2004, and executed by Purchaser on June 30, 2004.

     “Consent Solicitation” has the meaning set forth in Section 8.10.

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     “Contracts” means, collectively, the Equipment Leases and Operating Agreements.

     “Current Accounts Receivable” has the meaning set forth in Section 11.3(b).

     “Cut-Off Time” has the meaning set forth in Section 11.2.

     “Deposit” has the meaning set forth in Section 3.2(a).

     “Earnest Money” means, at the time in question, the amounts then deposited with Escrow Agent in respect of the Deposit, together with all interest and any other amounts earned thereon.

     “Earnest Money Escrow Agreement” has the meaning set forth in Section 3.2(a).

     “Employees” means all persons employed by Seller, Starwood, Manager or any of their Affiliates in a full-time or part-time capacity at the Hotel at the time in question, including Non-Union Employees, Union Employees, employees on workers’ compensation, military leave, special military leave, maternity leave, leave under the Family and Medical Leave Act of 1993, union leave, sick leave, short-term or long-term disability, or layoff with recall rights, and employees on other approved leaves of absence with a legal or contractual right to reinstatement.

     “Employer” means the employer of the Employees.

     “Environmental Claims” means all claims for reimbursement, remediation, abatement, removal, clean up, contribution, personal injury, property damage or damage to natural resources made by any Governmental Authority or other Person arising from or in connection with the (i) presence or actual or potential spill, leak, emission, discharge or release of any Hazardous Substances over, on, in, under or from the Property, or (ii) violation of any Environmental Laws with respect to the Property.

     “Environmental Laws” means any Applicable Laws which regulate the manufacture, generation, formulation, processing, use, treatment, handling, storage, disposal, distribution or transportation, or an actual or potential spill, leak, emission, discharge or release of any Hazardous Substances, pollution, contamination or radiation into any water, soil, sediment, air or other environmental media, including (i) the Comprehensive Environmental Response, Compensation and Liability Act, (ii) the Resource Conservation and Recovery Act, (iii) the Federal Water Pollution Control Act, (iv) the Toxic Substances Control Act, (v) the Clean Water Act, (vi) the Clean Air Act, and (vii) the Hazardous Materials Transportation Act, and similar state and local laws, as amended as of the time in question.

     “Environmental Liabilities” means all liabilities and obligations under any Environmental Laws arising from or in connection with the Property, including any obligations to manage, control, contain, remove, remedy, respond to, clean up or abate any actual or potential spill, leak, emission, discharge or release of any Hazardous Substances, pollution, contamination or radiation into any water, soil, sediment, air or other environmental media.

     “Environmental Reports” has the meaning set forth in Section 7.1(j).

     “Equipment Leases” has the meaning set forth in Section 2.1(i).

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     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the rules and regulations, promulgated thereunder.

     “Escrow Agent” means Chicago Title and Trust Company, through its offices at 171 North Clark Street, Chicago, Illinois 60601.

     “Exchange Act” has the meaning set forth in Section 8.10.

     “Excluded IT Systems” has the meaning set forth in Section 2.2(e).

     “Excluded Property” has the meaning set forth in Section 2.2.

     “Existing Applicable Capital Work Contracts” has the meaning set forth in Section 8.15(b)(ii).

     “F&B” has the meaning set forth in Section 2.1(f).

     “FF&E” has the meaning set forth in Section 2.1(c).

     “FF&E Reserve Account” means that certain reserve account more particularly described in that certain Chicago FF&E Escrow Agreement dated June 2, 1994, by and among Seller, Teachers Retirement System of Texas, and American National Bank and Trust Company of Chicago.

     “FF&E Reserve Account Agreement” means the Chicago FF&E Escrow Agreement dated June 2, 1994, by and among Seller, Teachers Retirement System of Texas, and American National Bank and Trust Company of Chicago.

     “General Partner” means the general partner of WHLP.

     “Governmental Authority” means any federal, state or local government or other political subdivision thereof, including any Person exercising executive, legislative, judicial, regulatory or administrative governmental powers or functions, in each case to the extent the same has jurisdiction over the Person or property in question.

     “GP Recommendation” has the meaning set forth in Section 8.10.

     “Guest Ledger” means all charges accrued to the open accounts of any guests or customers at the Hotel as of the Cut-Off Time for the use or occupancy of any guest, conference or banquet rooms or other facilities at the Hotel, any restaurant, bar or banquet services, or any other goods or services provided by, for or on behalf of Seller at the Hotel.

     “Hazardous Substances” means any hazardous or toxic substances, materials or waste, whether in solid, semisolid, liquid or gaseous form, including asbestos, petroleum or petroleum by-products and polychlorinated biphenyls.

     “Hotel” has the meaning set forth in the Recitals.

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     “Hotel GP” means 909 North Michigan Avenue Corporation, a Delaware corporation, in its capacity as sole general partner of Seller.

     “IDR” has the meaning set forth in Section 8.16(a).

     “IDR Notice” has the meaning set forth in Section 8.16(a).

     “Illinois Act” has the meaning set forth in Section 8.16(a).

     “Improvements” has the meaning set forth in Section 2.1(b).

     “Indemnification Cap” has the meaning set forth in Section 15.4(b).

     “Indemnification Claim” has the meaning set forth in Section 15.5(a).

     “Indemnification Deductible” has the meaning set forth in Section 15.4(b).

     “Indemnification Loss” means, with respect to any Indemnitee, any actual (and not contingent) liability, damage (but expressly excluding any consequential damages, punitive damages and lost profits), loss, cost or expense, including reasonable attorneys fees and expenses and court costs, incurred by such Indemnitee as a result of the act, omission or occurrence in question.

     “Indemnitee” has the meaning set forth in Section 15.5(a).

     “Indemnitor” has the meaning set forth in Section 15.5(a).

     “Inspections” has the meaning set forth in Section 8.14(a).

     “Intellectual Property” has the meaning set forth in Section 2.1(m).

     “IT Systems” has the meaning set forth in Section 2.1(e).

     “Knowledge” means (i) with respect to Seller, the actual knowledge of Mr. Thomas Smith, Mr. Alan Schnaid, Ms. Laura Benner, or Mr. Michael Feigenbaum without any duty of inquiry or investigation, and expressly excluding the knowledge of any other shareholder, partner, member, trustee, beneficiary, director, officer, manager, employee, agent, representative or attorney of Seller or any of its Affiliates, and (ii) with respect to Purchaser, (A) the actual knowledge of Mr. Gerald Best, Mr. Alex Gilbert, Thomas Burdi or Bert van Steenbergen, without any duty of inquiry or investigation, and expressly excluding the knowledge of any other shareholder, partner, member, trustee, beneficiary, director, officer, manager, employee, agent, representative or attorney of Purchaser or any of its Affiliates, (B) any matter disclosed in any exhibits or schedules to this Agreement, (C) any matter disclosed in any Seller Due Diligence Materials or any other documents or materials provided by Seller or any of its Affiliates, agents, attorneys, consultants or representatives to Purchaser or any of its Affiliates, agents, attorneys, consultants or representatives prior to Closing, and (D) any matter disclosed by the Inspections or in the Purchaser Due Diligence Reports. For the purposes of this definition, the term “actual

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knowledge” means, with respect to any person, the conscious awareness of such person at the time in question, and expressly excludes any constructive or implied knowledge of such person.

     “Land” has the meaning set forth in Section 2.1(a).

     “Letter of Credit” has the meaning set forth in Section 3.2(e).

     “Liability” means any liability, obligation, damage, loss, diminution in value, cost or expense of any kind or nature whatsoever, whether accrued or unaccrued, actual or contingent, known or unknown, foreseen or unforeseen.

     “Licenses and Permits” has the meaning set forth in Section 2.1(l).

     “Limited Partners” means the limited partners of WHLP.

     “Limited Partners Approval” has the meaning set forth in Section 4.1.

     “LP Adverse Proceeding” has the meaning set forth in Section 9.1(a)(i).

     “Management Agreement” has the meaning set forth in Section 2.1(s).

     “Manager” means 909 North Michigan Avenue Corporation, a Delaware corporation, in its capacity as manager under the Management Agreement.

     “Material Casualty” has the meaning set forth in Section 14.1(a).

     “Material Condemnation” has the meaning set forth in Section 14.2(a).

     “Material Contract” means any Contract requiring in any one calendar year, after the Closing but during the term of such Contract, aggregate payments in excess of Fifty Thousand Dollars ($50,000).

     “Mutual Closing Conditions” has the meaning set forth in Section 9.1(a).

     “National/Regional Operating Agreements” has the meaning set forth in Section 2.2(d).

     “New Survey Defect” has the meaning set forth in Section 5.3(b).

     “New Title Exception” has the meaning set forth in Section 5.3(b).

     “New Title and Survey Election Notice” has the meaning set forth in Section 5.3(b).

     “New Title and Survey Objection Notice” has the meaning set forth in Section 5.3(b).

     “New Title and Survey Response Notice” has the meaning set forth in Section 5.3(b).

     “New Transaction Agreement” has the meaning set forth in Section 13.3(a).

     “Non-Union Employees” means those Employees that are not Union Employees.

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     “Notice” has the meaning set forth in Section 16.1(a).

     “Operating Agreements” has the meaning set forth in Section 2.1(j).

     “Ordinance” has the meaning set forth in Section 8.16(a).

     “Ordinary Course of Business” means the ordinary course of business consistent with Seller’s past custom and practice for the Business, taking into account the facts and circumstances in existence from time to time.

     “Out-of-Pocket Expenses” has the meaning set forth in Section 13.3(b).

     “Parking Management Agreement” means that certain Management Agreement by and between Seller and System Parking, Inc., an Illinois corporation, as the same may be amended from time to time.

     “Permitted Exceptions” has the meaning set forth in Section 5.3(a).

     “Person” means any natural person, corporation, general or limited partnership, limited liability company, association, joint venture, trust, estate, Governmental Authority or other legal entity, in each case whether in its own or a representative capacity.

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

     “Plan” means an “employee benefit plan” as defined in Section 3(3) of ERISA or Section 4975 of the Code.

     “Plans and Specifications” has the meaning set forth in Section 2.1(o).

     “Post-Execution Disclosure” has the meaning set forth in Section 16.13.

     “Pre-Closing Access” has the meaning set forth in Section 8.14(d).

     “Prime Rate” means the rate of interest published in the Wall Street Journal from time to time as the prime rate of interest, changing simultaneously and automatically with each announced change in said rate. In the event the Wall Street Journal ceases to publish a prime rate of interest, the Prime Rate shall be determined by Seller by reference to such other publication as Seller shall reasonably select.

     “Property” has the meaning set forth in Section 2.1.

     “Prorations” has the meaning set forth in Section 11.2.

     “Purchase Price” has the meaning set forth in Section 3.1.

     “Purchaser Closing Condition Failure” has the meaning set forth in Section 13.4.

     “Purchaser Closing Conditions” has the meaning set forth in Section 9.2.

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     “Purchaser Closing Deliveries” has the meaning set forth in Section 10.3(b).

     “Purchaser Default” means a material breach or default by Purchaser in any of its representations, warranties, covenants or obligations under this Agreement to the extent such breach or default is not caused by a Seller Default and (except for a breach or default under Sections 3.2(a), 3.3, or 16.4, or a failure to make any material delivery set forth in Section 10.3(b) required to be made by Purchaser at Closing, which (in each case) shall have no cure period) which breach or default is not cured within ten (10) Business Days after Purchaser’s receipt of written notice of such breach or default from Seller.

     “Purchaser Documents” has the meaning set forth in Section 7.2(b).

     “Purchaser Due Diligence Reports” has the meaning set forth in Section 8.14(c).

     “Purchaser Indemnitees” means Purchaser and its Affiliates, and each of their respective shareholders, members, partners, trustees, beneficiaries, directors, officers and employees, and the successors, permitted assigns, legal representatives, heirs and devisees of each of the foregoing.

     “Purchaser’s Inspectors” has the meaning set forth in the Section 8.14(a).

     “Real Property” has the meaning set forth in Section 2.1(b).

     “Required Removal Exceptions” means (i) any mortgages, deeds of trust or other security instruments for any financing (other than those caused by Purchaser or any of its Affiliates), (ii) Taxes which would be delinquent if unpaid at Closing, (iii) any exception to title which Seller or any Affiliate of Seller willfully creates following the date of the Title Commitment with the intention and the purpose of not consummating the transaction described in this Agreement and (iv) any other Unpermitted Exceptions which may be removed by payment of an ascertainable and liquidated amount which in the aggregate does not exceed $500,000.00.

     “Response Period” has the meaning set forth in Section 8.11(c).

     “Retail Merchandise” has the meaning set forth in Section 2.1(g).

     “Retailer’s Act” has the meaning set forth in Section 8.16(a).

     “SAP Notice” has the meaning set forth in Section 8.11(c).

     “Scheduled Closing Date” means the date on which the Closing is scheduled to occur as the same may be postponed pursuant to the terms of this Agreement.

     “SEC” has the meaning set forth in Section 8.10.

     “Seller Approval” has the meaning set forth in Section 4.1.

     “Seller Approval Date” has the meaning set forth in Section 4.1.

     “Seller Approval Notice” has the meaning set forth in Section 4.1.

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     “Seller Closing Conditions” has the meaning set forth in Section 9.3(a).

     “Seller Closing Deliveries” has the meaning set forth in Section 10.3(a).

     “Seller Cure Period” has the meaning set forth in Section 13.4.

     “Seller Default” means a material breach or default by Seller in any of its representations, warranties, covenants or obligations under this Agreement, to the extent such breach or default is not caused by a Purchaser Default and (except for a failure to make any material delivery set forth in Section 10.3(a) required to be made by Seller at Closing) which breach or default is not cured within ten (10) Business Days after Seller’s receipt of written notice of such default from Purchaser.

     “Seller Documents” has the meaning set forth in Section 7.1(b).

     “Seller Due Diligence Materials” has the meaning set forth in Section 8.14(b)(i).

     “Seller Employee Plans” means all Plans and all severance, change in control or employment plans, programs or agreements, and vacation, incentive, bonus, stock option, stock purchase and restricted stock plans, programs or policies that are entered into, maintained, administered or directly or indirectly contributed to, as the case may be, by Employer and covers any Employee and/or spouse, dependents or other qualified beneficiaries.

     “Seller Indemnitees” means Seller, Starwood, Manager, Employer, Hotel GP, WHLP, General Partner and their respective Affiliates, and each of their respective shareholders, members, partners, trustees, beneficiaries, directors, officers and employees, and the successors, permitted assigns, legal representatives, heirs and devisees of each of the foregoing.

     “Seller Parties” means Seller, Starwood, Manager, Employer, Hotel GP, General Partner and their respective Affiliates, and each of their respective directors, trustees, officers and employees.

     “Seller’s Possession” means in the physical possession of any officer or employee of Seller or WHLP or any of their respective Affiliates who has primary responsibility for the Business; provided, however, that any reference in this Agreement to Seller’s Possession of any documents or materials expressly excludes the possession of any such documents or materials that (i) are legally privileged or constitute attorney work product, (ii) are subject to a confidentiality agreement with Persons other than Starwood Entities prohibiting their disclosure, or (iii) constitute confidential internal assessments, reports, studies, memoranda, notes or other correspondence prepared by, for or on behalf of any officer or employee of any Starwood Entity and not delivered to any third party (other than a third party which is bound by a confidentiality agreement or other confidentiality obligation).

     “Starwood” means Starwood Hotels & Resorts Worldwide, Inc., a Maryland corporation.

     “Starwood Entity” means Starwood, Seller or any of their respective Affiliates.

     “Starwood Proprietary Marks” has the meaning set forth in Section 2.2(b).

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     “Subsequent Taxable Periods” has the meaning set forth in Section 8.6(a).

     “Superior Acquisition Proposal” has the meaning set forth in Section 8.11(c).

     “Supplies” has the meaning set forth in Section 2.1(d).

     “Survey” has the meaning set forth in Section 5.2.

     “Survey Defects” has the meaning set forth in Section 5.3(a).

     “Survival Period” has the meaning set forth in Section 15.1(c).

     “Tax Reserve Account” means that certain tax reserve account more particularly described in that certain Tax Escrow Agreement dated July 31, 1996, by and among Seller, Teachers Retirement System of Texas, and American National Bank and Trust Company of Chicago.

     “Tax Year” shall mean the year period commencing on January 1 of each calendar year and ending on December 31 of each calendar year.

     “Taxes” means any federal, state, local or foreign, real property, personal property, sales, use, room, occupancy, ad valorem or similar taxes, assessments, levies, charges or fees imposed by any Governmental Authority on Seller with respect to the Property or the Business, including any interest, penalty or fine with respect thereto, but expressly excluding any (i) federal, state, local or foreign income, capital gain, gross receipts, capital stock, franchise, profits, estate, gift or generation skipping tax, or (ii) transfer, documentary stamp, recording or similar tax, levy, charge or fee incurred with respect to the transaction described in this Agreement.

     “Tenant Leases” has the meaning set forth in Section 2.1(h).

     “Third-Party Claim” means, with respect to the Person in question, any claim, demand, lawsuit, arbitration or other legal or administrative action or proceeding against the Person in question by any other Person which is not an Affiliate of the Person in question.

     “Title Commitment” has the meaning set forth in Section 5.1.

     “Title Company” means Chicago Title Insurance Company, through its offices at 171 North Clark Street, Chicago, Illinois 60601.

     “Title Exceptions” has the meaning set forth in Section 5.3(a).

     “Trade Payables” has the meaning set forth in Section 11.2(1).

     “Union Contracts” has the meaning set forth in Section 2.1(k).

     “Union Employees” means any Employees whose employment is subject to the terms of the Union Contracts.

     “Unpermitted Exceptions” has the meaning set forth in Section 5.3(a).

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     “Warranties” has the meaning set forth in Section 2.1(p).

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

     “WHLP Approval” has the meaning set forth in Section 4.1.

     “WHLP Partnership Agreement” means the Amended and Restated Agreement of Limited Partnership of WHLP, as amended.

     Section 1.2. Rules of Construction. The following rules shall apply to the construction and interpretation of this Agreement:

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

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

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

     (d) Any reference to any agreement (including this Agreement), document, instrument, tax or tariff means such agreement, document, instrument, tax or tariff as amended or modified in effect from time to time in accordance with the terms thereof and, if applicable, the terms hereof.

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

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

     (g) The term “sole discretion” with respect to any determination to be made a Party under this Agreement shall mean the sole and absolute discretion of such Party, without regard to any standard of reasonableness or other standard by which the determination of such Party might be challenged.

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

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ARTICLE II

THE PROPERTY AND LIABILITIES

     Section 2.1. Description of the Property. Subject to the terms set forth in this Agreement, at the Closing, Seller shall sell, convey, transfer, assign and deliver to Purchaser, and Purchaser shall purchase and accept from Seller, all right, title and interest of Seller, if any, in and to the property and assets set forth in this Section 2.1, but expressly excluding the Excluded Property (collectively, the “Property”):

     (a) Land. The land described in Schedule 2.1(a), together with all appurtenant easements and any other rights and interests appurtenant thereto (the “Land”);

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

     (c) FF&E. All fixtures (other than those which constitute Improvements), furniture, furnishings, equipment, machinery, tools, vehicles, appliances, art work and other items of tangible personal property which are located at the Hotel and used in the Business, or ordered for future use at the Hotel as of the Closing, other than the Supplies, IT Systems, F&B, Retail Merchandise, Books and Records and Plans and Specifications (the “FF&E”);

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

     (e) IT Systems. All computer hardware, telecommunications and information technology systems located at the Hotel, and all computer software used at the Hotel (subject to the terms of the applicable license agreement and/or Manager’s and Manager’s Affiliates’ (other than Seller) rights in and to the same) as more particularly described on Schedule 2.1(e), to the extent the same are assignable or transferable (all such hardware, systems and software being referred to collectively as the “IT Systems”), but expressly excluding the Excluded IT Systems;

     (f) Food and Beverage. All food and beverages (alcoholic and non-alcoholic) which are located at the Hotel (whether opened or unopened), or ordered for future use at the Hotel as of the Closing, including all food and beverages located in the guest rooms, but expressly excluding any alcoholic beverages to the extent the sale or transfer of the same is not permitted under Applicable Law (the “F&B”);

     (g) Retail Merchandise. All merchandise located at the Hotel and held for sale to guests and customers of the Hotel, or ordered for future sale at the Hotel as of the Closing, including the inventory held for sale in any gift shop or newsstand operated by Seller or Manager at the Hotel, but expressly excluding the F&B (the “Retail Merchandise”);

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     (h) Tenant Leases. All leases, subleases, licenses, concessions and similar agreements granting to any other Person the right to use or occupy any portion of the Real Property (other than the Management Agreement, the Parking Management Agreement and Bookings) (the “Tenant Leases”), together with all security deposits held by Seller (or Manager or any of their respective Affiliates) thereunder, to the extent such security deposits are assignable or transferable;

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

     (j) Operating Agreements. All maintenance, service and supply contracts, booking and reservation agreements, credit card service agreements, and all other similar agreements for goods or services, other than any National/Regional Operating Agreements, which are held by, for or on behalf of Seller in connection with the Business, to the extent the same are assignable or transferable (other than the Tenant Leases, Equipment Leases, Union Contracts, Licenses and Permits, Management Agreement and Parking Management Agreement) (the “Operating Agreements”), together with all deposits made or held by Seller thereunder, to the extent such deposits are assignable or transferable;

     (k) Union Contracts. The following union contracts: (i) Agreement by and between Chicago Joint Executive Board of the Hotel Employees and Restaurant Employees International Union, A.F.L.- C.I.O., as exclusive bargaining agent for Hotel Employees and Restaurant Employees Union, Local No. 1, A.F.L.- C.I.O. and Hotel, Motel, Club, Cafeteria, Restaurant Employees and Bartenders Union, Local 450, A.F.L.- C.I.O., and Seller effective September 1, 2002 through August 31, 2006; and (ii) Collective Bargaining Agreement by and between International Union of Operating Engineers of Chicago, Illinois and Vicinity Local No. 399 and Westin Michigan Avenue, Starwood Lodging Corporation effective July 1, 2003 through June 30, 2007 (the “Union Contracts”);

     (l) Licenses and Permits. All licenses, permits, consents, authorizations, approvals, registrations and certificates issued by any Governmental Authority which are held by, for or on behalf of Seller with respect to the Hotel, including the construction, use or occupancy of the Hotel or the Business, to the extent the same are assignable or transferable (the “Licenses and Permits”), together with any deposits made by Seller thereunder, to the extent such deposits are assignable or transferable;

     (m) Intellectual Property. All of the following (A) owned by Seller or (B) exclusively issued or licensed to Seller and used in connection with the operation of the Hotel to the extent transferable: (i) trademarks, trade names, service marks or other intellectual property rights, including those set forth on Schedule 2.1(m); (ii) direct telephone numbers for the Hotel and (iii) all goodwill in connection with the ownership, operation and maintenance of the Hotel, but excluding any trademark, servicemark or logo relating to the Starwood Proprietary Marks (the “Intellectual Property”);

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     (n) Books and Records. All books and records located at the Hotel which relate exclusively to the Hotel or the Business, but expressly excluding all documents and other materials which (i) are legally privileged or constitute attorney work product, (ii) are subject to a confidentiality agreement with Persons other than Starwood Entities prohibiting their disclosure by any Starwood Entity, or (iii) constitute confidential internal assessments, reports, studies, memoranda, notes or other correspondence prepared by, for or on behalf of any officer or employee of any Starwood Entity, including all (A) internal financial analyses, appraisals, tax returns, financial statements, (B) corporate or other entity governance records, including board minutes, (C) Employee personnel files, (D) any work papers, memoranda, analysis, correspondence and similar documents and materials prepared by or for any Starwood Entity in connection with the transaction described in this Agreement (the “Books and Records”);

     (o) Plans and Specifications. All plans and specifications, blueprints, architectural plans, engineering diagrams and similar items which relate exclusively to the Hotel, to the extent the same are assignable or transferable (the “Plans and Specifications”);

     (p) Warranties. All warranties and guaranties held by, for or on behalf of Seller with respect to any Improvements or Personal Property, to the extent the same are assignable or transferable (the “Warranties”);

     (q) Bookings. All bookings and reservations for guest, conference and banquet rooms or other facilities at the Hotel (the “Bookings”) as of the Closing, together with all deposits with respect thereto;

     (r) Accounts Receivable. All Accounts Receivable (including the Guest Ledger but excluding Aging Receivables) as set forth in Section 11.3(b);

     (s) Management Agreement. That certain Amended and Restated Management Agreement, dated August 21, 1986, by and among Seller, Hotel GP and WHLP, collectively as owner, and Westin Hotel Company, predecessor in interest to Manager, as amended by that certain First Amendment to Amended and Restated Management Agreement dated as of June 2, 1994, as further amended by that certain Second Amendment to Amended and Restated Management Agreement dated as of September 1, 1999, as further amended by that certain Third Amendment to Amended and Restated Management Agreement dated as of February 27, 2002, and as assigned to Manager pursuant to that certain Assignment and Assumption of Agreements dated as of December 31, 1997 (as so amended and assigned and as may be further amended from time to time, the “Management Agreement”), which shall be assumed by Purchaser at Closing; and

     (t) Parking Management Agreement. The Parking Management Agreement, which shall be assumed by Purchaser at Closing.

     For purposes of this Section 2.1, the IT Systems, security deposits under the Tenant Leases, the Equipment Leases and deposits thereunder, the Operating Agreements and deposits thereunder, the Warranties, the Plans and Specifications, and the Licenses and Permits which are “assignable” or “transferable” shall mean such items under which assignment or transfer is permitted without the consent or approval of any Person other than Seller, WHLP, Manager or

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any Affiliate of the foregoing. Purchaser, at its cost and expense, shall be responsible for obtaining, to the extent required for continuation of the Business, the transfer or replacement of all IT Systems, the Equipment Leases and deposits thereunder, the Operating Agreements and deposits thereunder, the Warranties, the Plans and Specifications, and any security deposits held by Seller under any Tenant Leases which are not “assignable” or “transferable”.

     Section 2.2. Excluded Property. Notwithstanding anything to the contrary in Section 2.1, the property, assets, rights and interests set forth in this Section 2.2 (the “Excluded Property”) shall not be transferred, assigned or conveyed to Purchaser:

     (a) Cash. Except for deposits expressly included in Section 2.1, all cash on hand or on deposit in any house bank, operating account or other account or reserve maintained in connection with the Business, including any reserve maintained in connection with the Management Agreement, the Tax Reserve Account, and the FF&E Reserve Account;

     (b) Starwood Proprietary Property. All (i) trademarks, trade names, service marks, symbols, logos and other intellectual property rights held by any Starwood Entity, except as set forth in Schedule 2.1(m) (the “Starwood Proprietary Marks”); (ii) signs and other fixtures and personal property at the Hotel which bear any of the Starwood Proprietary Marks; (iii) Starwood Entity internal management, operational, employee and similar manuals, handbooks and publications; and (iv) Starwood Entity centralized systems and programs used in connection with the Business, including the (A) sales and marketing, (B) Starwood Preferred Guest, and (C) purchasing systems and programs;

     (c) Third-Party Property. Any fixtures or personal property owned by (i) the lessor under any Equipment Leases, (ii) the supplier, vendor, licensor or other party under any Operating Agreements, National/Regional Operating Agreements or Licenses and Permits, (iii) the tenant under any Tenant Leases, (iv) the Manager to the extent set forth on Schedule 2.2(c) hereof, (v) any Employees, (vi) the manager under the Parking Management Agreement, or (vii) any guests or customers of the Hotel;

     (d) National/Regional Operating Agreements. All operating agreements or contracts pursuant to which goods, services, licenses or other items are provided to other hotels which are owned, leased or operated by any Starwood Entity, in addition to the Hotel (the “National/Regional Operating Agreements”); and

     (e) Excluded IT Systems. The IT Systems set forth in Schedule 2.2(e) (the “Excluded IT Systems”). Notwithstanding the foregoing, it is contemplated that certain of the Excluded IT Systems shall continue to be used in the Business at the Hotel pursuant to and subject to the terms and provisions of the Management Agreement.

ARTICLE III

PURCHASE PRICE

     Section 3.1. Purchase Price. The purchase price for the Property is One Hundred Thirty Seven Million and No/100 Dollars ($137,000,000) (the “Purchase Price”), which shall be

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adjusted at Closing for the Prorations pursuant to Section 11.2, the Accounts Receivable pursuant to Section 11.3, and as otherwise expressly provided in this Agreement.

     Section 3.2. Earnest Money

     (a) On or before 5:00 p.m. (Eastern Time) on the date which is two (2) Business Days after the execution and delivery of this Agreement, Purchaser shall deposit with Escrow Agent the amount of Six Million and No/100 Dollars ($6,000,000) (the “Deposit”). The Deposit shall be held by Escrow Agent in escrow as earnest money pursuant to the strict joint order escrow agreement in the form attached hereto as Exhibit A, to be entered into among Seller, WHLP, Purchaser and Escrow Agent (the “Earnest Money Escrow Agreement”), and delivered to Escrow Agent prior to or concurrently with the Deposit. The Deposit shall be non-refundable to Purchaser, except as otherwise expressly provided in this Agreement.

     (b) Investment of Earnest Money. The Deposit shall be invested in accordance with the Earnest Money Escrow Agreement upon Purchaser’s delivery of the Deposit.

     (c) Disbursement of Earnest Money to Seller. At Closing, Purchaser and Seller shall direct Escrow Agent to disburse the Earnest Money to Seller, and Purchaser shall receive a credit against the Purchase Price in the amount of the Earnest Money disbursed to Seller. If this Agreement is terminated for any reason and Purchaser is not entitled to a refund of the Earnest Money under an express provision of this Agreement, then Purchaser and Seller shall direct Escrow Agent to disburse the Earnest Money to Seller no later than two (2) Business Days after such termination.

     (d) Refund of Earnest Money to Purchaser. If this Agreement is terminated and Purchaser is entitled to a refund of the Earnest Money, then Seller and Purchaser shall provide written notice to Escrow Agent directing Escrow Agent to disburse the Earnest Money to Purchaser no later than two (2) Business Days after such termination.

     (e) Letter of Credit. Notwithstanding the foregoing, the Earnest Money may, at Purchaser’s option, be in the form of an irrevocable, unconditional standby letter of credit having an expiration date of not earlier than one year after the date of this Agreement and otherwise in form and substance acceptable to Seller, naming Seller as beneficiary thereunder (a “Letter of Credit”). Seller shall have the right to draw on the Letter of Credit: (i) in any circumstances under this Agreement in which Seller is entitled to receive the Deposit (or Earnest Money), and/or (ii) in the event that the Letter of Credit is not renewed and/or replaced by a letter of credit satisfying the requirements of this Section 3.2(e) by the date that is thirty (30) days prior to the expiry date thereof. The Letter of Credit shall provide that any and all funds, proceeds or amounts drawn on, under or pursuant thereto shall be paid and deposited by the issuing bank thereunder directly to Escrow Agent, as escrowee, and, upon any such deposit with the Escrow Agent, such proceeds will be held and/or paid by the Escrow Agent in accordance with the terms and provisions of this Agreement and the terms and provisions of an escrow agreement in the form of the Earnest Money Escrow Agreement, which escrow agreement will be executed by Seller, Purchaser and Escrow Agent concurrently with the delivery of the Letter of Credit to Seller. During the term of this Agreement, Purchaser may, from time to time, substitute cash for a Letter of Credit, or a Letter of Credit for cash, to constitute the Deposit, provided, however,

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Purchaser shall cause any such Letter of Credit deposited as the Earnest Money to be replaced with cash at or prior to the Closing. At any time during the term of this Agreement that Purchaser has provided a Letter of Credit (rather than cash) as the Earnest Money, then (x) any reference herein to a return of the Earnest Money or Deposit to Purchaser (or words of similar import) shall be deemed to mean a return of the Letter of Credit to Purchaser, and (y) any reference herein to the payment of the Earnest Money or Deposit to Seller (or words of similar import) shall be deemed to mean that Seller shall have the right to draw on the full amount of the Letter of Credit, and that Purchaser and Seller will cause the Escrow Agent, within two (2) Business Days after any such draw by Seller, to pay to Seller the full amount of the proceeds of the Letter of Credit from the escrow holding the same.

     Section 3.3. Payment of Purchase Price

     (a) Payment at Closing. At Closing, Purchaser shall pay to Seller by wire transfer of immediately available funds an amount equal to the Purchase Price (as adjusted pursuant to Section 3.1), less the Earnest Money disbursed to Seller. Purchaser shall cause the wire transfer of funds to be received by Seller no later than 1:00 p.m. (Eastern Time) on the Closing Date. If Seller receives the wire transfer of funds from Purchaser after 1:00 p.m. (Eastern Time) and is unable to reinvest such funds on the Closing Date, then as a condition to the completion of the Closing, Purchaser shall pay interest on the amount of such funds from the Closing Date until the next Business Day at the Prime Rate.

     (b) Method of Payment. All amounts to be paid by Purchaser to Seller pursuant to this Agreement shall be paid by wire transfer of immediately available U.S. federal funds.

     Section 3.4. Allocation of Purchase Price. The Parties hereby agree that the Purchase Price shall be allocated in the manner set forth in Schedule 3.4 for federal, state and local tax purposes. The Parties acknowledge and agree that the allocation set forth in Schedule 3.4 represents an arm’s length agreement based on the Parties’ best judgment as to the fair market value of the items set forth thereon. The Parties shall file all federal, state and local tax returns and related tax documents consistent with the allocation set forth in Schedule 3.4, as the same may be adjusted pursuant to Article XI or any other provision in this Agreement.

ARTICLE IV

SELLER APPROVAL

     Section 4.1. Seller Approval. Purchaser acknowledges and agrees that Seller’s obligations to close under this Agreement shall be subject to, and conditioned upon, Seller obtaining approval by WHLP of the transactions contemplated hereby (the “WHLP Approval”), which approval requires that WHLP obtain, pursuant to Section 8.03(b) of the WHLP Partnership Agreement, the approval of the sale of the Property from more than fifty percent (50%) of the interest of the Limited Partners (the “Limited Partners Approval”; the Limited Partners Approval and the WHLP Approval are collectively referred to herein as the “Seller Approval”). Purchaser agrees that Seller shall have until the date that is one hundred fifty (150) days after the date of this Agreement (the “Seller Approval Date”) to obtain the Seller Approval. Seller shall provide written notice to Purchaser promptly upon obtaining the Seller Approval (the

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“Seller Approval Notice”). If Seller does not provide the Seller Approval Notice to Purchaser at or prior to 5:00 P.M. Eastern Time on the Seller Approval Date, Seller shall be deemed to have failed to obtain the Seller Approval, and Purchaser and Seller shall each thereafter have the right to terminate this Agreement after the Seller Approval Date and prior to receipt thereafter by Purchaser of the Seller Approval Notice, by providing written notice to the other, in which case Escrow Agent shall refund the Earnest Money to Purchaser in accordance with Section 3.2(d) and the Parties shall have no further rights or obligations under this Agreement, except those which expressly survive such termination.

ARTICLE V

TITLE TO THE PROPERTY

     Section 5.1. Title Commitment. Purchaser acknowledges its receipt of that certain title commitment, Order Number 1401-008238016-D2, with an effective date of June 14, 2004, for an ALTA owner’s title insurance policy from the Title Company for the Real Property (the “Title Commitment”), together with a copy of all documents referenced therein obtained from the Title Company.

     Section 5.2. Survey. Purchaser acknowledges its receipt of a survey of the Real Property, prepared by Chicago Guarantee Survey Company, dated July 8, 2004, as Job No. 0406021 (the “Survey”).

     Section 5.3. Exceptions to Title.

     (a) Identification of Unpermitted Exceptions. Except for those items set forth in Schedule 5.3(a) which shall be deemed Unpermitted Exceptions, (i) any liens, encumbrances or other exceptions to title (“Title Exceptions”), encroachments on to or from adjoining properties, encroachments on to easements from Improvements, set back line violations or other survey defects (“Survey Defects”) or other matters disclosed in the Title Commitment or on the Survey, (ii) the rights and interests of customers and guests at the Hotel to occupy rooms on a transient license basis, (iii) the rights of tenants under the Tenant Leases, as tenants only, pursuant to the Tenant Leases set forth on Schedule 7.1(l), or entered into after the date hereof in accordance with Section 8.2 of this Agreement and (iv) all liens and encumbrances caused or created by any Purchaser Indemnitee shall be referred to collectively herein as the “Permitted Exceptions”. The items set forth on Schedule 5.3(a) and, subject to Sections 5.3(b) and 5.3(c), in any New Title and Survey Objection Notice shall be referred to as “Unpermitted Exceptions”.

     (b) Updated Title Commitment or Survey. If any update of the Title Commitment delivered to Purchaser after the date of this Agreement discloses any Title Exception which is not disclosed in the Title Commitment or is not otherwise a Permitted Exception described in Sections 5.3(b)(ii), (iii) or (iv) (a “New Title Exception”), or any update of the Survey delivered to Purchaser after the date of this Agreement discloses any Survey Defect which is not disclosed in the Survey (a “New Survey Defect”), and (i) such New Title Exception or New Survey Defect would have, upon Closing, a materially adverse effect on the Business or the ownership of the Real Property, or on the value of the Business or Real Property, and (ii) such New Title Exception or New Survey Defect was not caused or created by any Purchaser Indemnitee or any

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Person on behalf of any Purchaser Indemnitee, then Purchaser shall have the right to request Seller to remove or cure such New Title Exception or New Survey Defect at or prior to Closing by providing written notice to Seller within the earlier of: (A) five (5) Business Days after receiving the last of such update of the Title Commitment or Survey or, to the extent the same are of record or are otherwise reasonably available, copies of the underlying documents evidencing any such New Title Exception or New Survey Defect, or (B) the Closing Date (the “New Title and Survey Objection Notice”). If Purchaser timely provides a New Title and Survey Objection Notice to Seller, Seller may elect, by providing written notice (the “New Title and Survey Election Notice”) to Purchaser within the earlier of: (X) ten (10) Business Days after Seller’s receipt of such New Title and Survey Objection Notice, or (Y) the Closing Date, (1) to accept such New Title Exception or New Survey Defect as an additional Unpermitted Exception to be removed or cured at or prior to Closing, or (2) not to remove or cure such New Title Exception or New Survey Defect; provided, however, that if such New Title Exception or New Survey Defect is a Required Removal Exception, then such New Title Exception or New Survey Defect shall constitute an “Unpermitted Exception” and Seller shall remove or cure such New Title Exception or New Survey Defect at or prior to Closing. Except with respect to any Required Removal Exception which Seller shall be required to remove on or prior to Closing, if Seller does not provide a New Title and Survey Election Notice to Purchaser within such time period, then Seller shall be deemed to have elected not to remove or cure such New Title Exception or New Survey Defect as an Unpermitted Exception pursuant to clause (2) of the preceding sentence. If Seller elects or is deemed to have elected not to remove or cure a New Title Exception or New Survey Defect, then Purchaser shall have the right to elect, as its sole and exclusive right with respect thereto, by providing written notice (the “New Title and Survey Response Notice”) to Seller within the earlier of ten (10) Business Days after Purchaser’s receipt of the New Title and Survey Election Notice or the Closing Date to (I) terminate this Agreement, in which case the Earnest Money shall be refunded to Purchaser in accordance with Section 3.2(d), and the Parties shall have no further rights or obligations under this Agreement, except those which expressly survive such termination, or (II) proceed to Closing pursuant to this Agreement and accept title to the Real Property subject to such New Title Exception or New Survey Defect which thereafter shall be deemed to constitute a Permitted Exception, without any credit against the Purchase Price for such New Title Exception or New Survey Defect. If Purchaser does not provide a New Title and Survey Response Notice to Seller within such time period, Purchaser shall be deemed to have elected to proceed to Closing pursuant to clause (II) of the preceding sentence.

     (c) Removal of Unpermitted Exceptions. Seller shall have no obligation to cure any Title Exceptions or Survey Defects other than the Unpermitted Exceptions. Seller may, at its option, cure any Unpermitted Exception by (i) removing such Unpermitted Exception from title, or (ii) causing the Title Company to commit to remove or insure over such Unpermitted Exception in a manner which is reasonably acceptable to Purchaser and its lender, at any time prior to or at Closing, in which case the same shall be deemed to constitute a Permitted Exception, without any credit against the Purchase Price for such Title Exception or Survey Defect. If the Title Company does not agree to remove or insure over any Unpermitted Exception, but another nationally recognized title insurance company reasonably acceptable to Purchaser and its lender is willing to issue a title policy without such Unpermitted Exception in such title policy, then Seller shall have the right to obtain, and Purchaser shall accept, a title policy from such other title insurance company which otherwise shall satisfy the requirements

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set forth in this Agreement, in which case the term “Title Company” shall be deemed to refer to such other title insurance company for all purposes in this Agreement.

     (d) Extension of Closing Date. If Seller determines that it will be unable to remove or cure any Unpermitted Exception prior to Closing, Seller shall have the right, but not the obligation, to postpone the Closing one or more times for up to sixty (60) days in the aggregate in each case by providing written notice to Purchaser no later than three (3) Business Days prior to the then scheduled Closing Date; provided, however, Seller may not extend the Closing Date beyond the date that is one hundred eighty (180) days after the date of this Agreement pursuant to this Section 5.3(d).

ARTICLE VI

CONDITION OF THE PROPERTY

     Section 6.1. PROPERTY SOLD “AS IS”. PURCHASER ACKNOWLEDGES AND AGREES THAT (A) THE PURCHASE OF THE PROPERTY SHALL BE ON AN “AS IS”, “WHERE IS”, “WITH ALL FAULTS” BASIS, AND (B) EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, SELLER HAS NO OBLIGATION TO REPAIR ANY DAMAGE TO OR DEFECT IN THE PROPERTY, REPLACE ANY OF THE PROPERTY OR OTHERWISE REMEDY ANY MATTER AFFECTING THE CONDITION OF THE PROPERTY.

     Section 6.2. LIMITATION ON REPRESENTATIONS AND WARRANTIES. PURCHASER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, NO SELLER PARTY NOR ANY OF THEIR RESPECTIVE AFFILIATES, NOR ANY OF THEIR RESPECTIVE SHAREHOLDERS, MEMBERS, PARTNERS, TRUSTEES, BENEFICIARIES, DIRECTORS, OFFICERS, MANAGERS, EMPLOYEES, ATTORNEYS, ACCOUNTANTS, CONTRACTORS, CONSULTANTS, AGENTS OR REPRESENTATIVES, NOR ANY PERSON PURPORTING TO REPRESENT ANY OF THE FOREGOING, HAVE MADE ANY REPRESENTATION, WARRANTY, GUARANTY, PROMISE, PROJECTION OR PREDICTION WHATSOEVER WITH RESPECT TO THE PROPERTY OR THE BUSINESS, WRITTEN OR ORAL, EXPRESS OR IMPLIED, ARISING BY OPERATION OF LAW OR OTHERWISE, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR ANY REPRESENTATION OR WARRANTY AS TO (A) THE CONDITION, SAFETY, QUANTITY, QUALITY, USE, OCCUPANCY OR OPERATION OF THE PROPERTY, (B) THE PAST, PRESENT OR FUTURE REVENUES OR EXPENSES WITH RESPECT TO THE PROPERTY OR THE BUSINESS, (C) THE COMPLIANCE OF THE PROPERTY OR THE BUSINESS WITH ANY ZONING REQUIREMENTS, BUILDING CODES OR OTHER APPLICABLE LAW, INCLUDING THE AMERICANS WITH DISABILITIES ACT OF 1990, (D) THE ACCURACY OF ANY ENVIRONMENTAL REPORTS OR OTHER DATA OR INFORMATION SET FORTH IN THE SELLER DUE DILIGENCE MATERIALS PROVIDED TO PURCHASER WHICH WERE PREPARED FOR OR ON BEHALF OF SELLER, OR (E) ANY OTHER MATTER RELATING TO SELLER, THE PROPERTY OR THE BUSINESS.

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     Section 6.3. RELIANCE ON DUE DILIGENCE. PURCHASER ACKNOWLEDGES AND AGREES THAT:

     (A) PURCHASER HAS HAD THE OPPORTUNITY TO CONDUCT ALL DUE DILIGENCE INSPECTIONS OF THE PROPERTY AS OF THE DATE OF THIS AGREEMENT, INCLUDING REVIEWING ALL DUE DILIGENCE DOCUMENTS AND MATERIALS (INCLUDING THE SELLER DUE DILIGENCE MATERIALS AND PURCHASER DUE DILIGENCE REPORTS) AND OBTAINING ALL INFORMATION WHICH IT DEEMS NECESSARY TO MAKE AN INFORMED DECISION AS TO WHETHER IT SHOULD PROCEED WITH THE PURCHASE OF THE PROPERTY;

     (B) PURCHASER ACKNOWLEDGES THAT IT IS SATISFIED WITH THE RESULTS OF ITS DUE DILIGENCE REVIEW OF THE PROPERTY;

     (C) PURCHASER WILL BE RELYING ONLY ON ITS DUE DILIGENCE INSPECTIONS OF THE PROPERTY AND THE REPRESENTATIONS AND WARRANTIES EXPRESSLY MADE BY SELLER IN THIS AGREEMENT IN PURCHASING THE PROPERTY;

     (D) PURCHASER WILL NOT BE RELYING ON ANY STATEMENT MADE OR INFORMATION PROVIDED TO PURCHASER BY ANY SELLER PARTY (EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY MADE BY SELLER IN THIS AGREEMENT), OR ANY OF THEIR RESPECTIVE AFFILIATES, OR ANY OF THEIR RESPECTIVE SHAREHOLDERS, MEMBERS, PARTNERS, TRUSTEES, BENEFICIARIES, DIRECTORS, MANAGERS, OFFICERS, EMPLOYEES, ATTORNEYS, ACCOUNTANTS, CONTRACTORS, CONSULTANTS, AGENTS OR REPRESENTATIVES, OR ANY PERSON PURPORTING TO REPRESENT ANY OF THE FOREGOING; AND

     (E) EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT, (I) SELLER MAKES NO REPRESENTATION OR WARRANTY AS TO THE TRUTH, ACCURACY OR COMPLETENESS OF THE SELLER DUE DILIGENCE MATERIALS, (II) PURCHASER ACKNOWLEDGES AND AGREES THAT THE SELLER DUE DILIGENCE MATERIALS ARE PROVIDED TO PURCHASER AS A CONVENIENCE ONLY AND THAT ANY RELIANCE ON OR USE OF THE SELLER DUE DILIGENCE MATERIALS SHALL BE AT THE SOLE RISK OF PURCHASER, AND (III) NO SELLER PARTY OR ANY RESPECTIVE AFFILIATE THEREOF, NOR THE PERSON OR ENTITY WHICH PREPARED ANY OF THE SELLER DUE DILIGENCE MATERIALS DELIVERED OR MADE AVAILABLE BY SELLER TO PURCHASER SHALL HAVE ANY LIABILITY TO PURCHASER FOR ANY INACCURACY IN OR OMISSION FROM ANY SUCH SELLER DUE DILIGENCE MATERIALS.

     Section 6.4. RELEASE AND WAIVER OF SELLER FOR ENVIRONMENTAL LIABILITIES AND VIOLATIONS OF APPLICABLE LAW. NOTWITHSTANDING ANY INDEMNIFICATION OBLIGATION OF SELLER UNDER THIS AGREEMENT, PURCHASER (FOR ITSELF AND ALL PURCHASER INDEMNITEES) DOES HEREBY FOREVER WAIVE, RELEASE AND DISCHARGE THE SELLER INDEMNITEES FROM ANY AND ALL ENVIRONMENTAL CLAIMS, ENVIRONMENTAL LIABILITIES, AND

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ALL VIOLATIONS OF APPLICABLE LAW (INCLUDING VIOLATIONS OF THE AMERICANS WITH DISABILITIES ACT OF 1990) THE PURCHASER INDEMNITEES MAY HAVE AGAINST THE SELLER INDEMNITEES, WHETHER NOW KNOWN OR UNKNOWN TO PURCHASER; PROVIDED, HOWEVER, THAT SUCH WAIVER, RELEASE AND DISCHARGE SHALL NOT APPLY TO ANY INDEMNIFICATION OBLIGATION OF SELLER TO THE EXTENT RESULTING FROM A BREACH OF SELLER’S REPRESENTATION OR WARRANTY SET FORTH IN SECTION 7.1(F) AND SECTION 7.1(J).

ARTICLE VII

REPRESENTATIONS AND WARRANTIES

     Section 7.1. Seller’s Representations and Warranties. To induce Purchaser to enter into this Agreement and to consummate the transaction described in this Agreement, Seller hereby makes the express representations and warranties in this Section 7.1, upon which Seller acknowledges and agrees that Purchaser is entitled to rely.

     (a) Organization and Power. Each of Seller and WHLP is duly formed, validly existing, and in good standing in the State of Delaware. Seller is qualified to do business in the State of Illinois, and has all requisite power and authority to own the Property and conduct the Business as currently owned and conducted.

     (b) Authority and Binding Obligation. Subject to the Seller Approval (and all steps required to obtain such approval), (i) each of Seller and WHLP has full power and authority to execute and deliver this Agreement and all other documents to be executed and delivered by Seller or WHLP, as the case may be, pursuant to this Agreement (the “Seller Documents”), and to perform all obligations of Seller or WHLP (to the extent either Seller or WHLP is a party thereto) under each of the Seller Documents, (ii) the execution and delivery by the signer on behalf of Seller or WHLP (to the extent either Seller or WHLP is a party thereto) and the performance by each of Seller or WHLP (to the extent either Seller or WHLP is a party thereto) of its obligations under each of the Seller Documents, has been, or will be when executed and delivered, duly and validly authorized by all necessary action by Seller or WHLP, as the case may be, and (iii) each of the Seller Documents, when executed and delivered, will constitute the legal, valid and binding obligations of Seller or WHLP (to the extent either Seller or WHLP is a party thereto) enforceable against Seller or WHLP, as the case may be, in accordance with its terms, subject to bankruptcy, insolvency and other laws affecting creditor’s rights or equity principals generally.

     (c) Consents and Approvals; No Conflicts. Subject to the Seller Approval (and all steps required to obtain such approval) and the recordation of any Seller Documents as appropriate, and except as disclosed in Schedule 7.1(c), (i) no filing with, and no permit, authorization, consent or approval of, any Governmental Authority or other Person is necessary for execution or delivery by Seller or WHLP (to the extent either Seller or WHLP is a party thereto) of any of the Seller Documents, or the performance by Seller or WHLP (to the extent either Seller or WHLP is a party thereto) of any of its obligations under any of the Seller Documents, except to the extent the failure to obtain such permit, authorization, consent or

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approval would not have a material adverse effect on the ownership or operation of the Business, and (ii) neither the execution and delivery by Seller or WHLP (to the extent either Seller or WHLP is a party thereto) of any of the Seller Documents, nor the performance by Seller or WHLP (to the extent either Seller or WHLP is a party thereto) of any of its obligations under any of the Seller Documents will: (A) violate any provision of Seller’s or WHLP’s organizational or governing documents; (B) violate any Applicable Law to which Seller or WHLP is subject; (C) result in a violation or breach of, or constitute a default under, any of the Material Contracts; or (D) result in the creation or imposition of any lien or encumbrance on the Property or any portion thereof.

     (d) Title to Personal Property. Except as set forth in Schedule 7.1(d), Seller has not pledged, assigned, hypothecated or transferred any of its right, title or interest in any Personal Property, other than in connection with such Seller’s existing financing of the Hotel. Seller has good and valid title to all tangible Personal Property, which shall be free and clear of all liens and encumbrances as of the Closing.

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

     (f) Compliance with Applicable Law. Except as set forth in Schedule 7.1(f), Seller has not received any written notice from any Governmental Authority of a violation of any Applicable Law with respect to the Property which has not been cured or dismissed.

     (g) Litigation. Except as set forth in Schedule 7.1(g), Seller has not (i) been served with any court filing or received any written notice in any pending or threatened litigation with respect to the Property or the Business in which Seller is named a party which has not been resolved, settled or dismissed, or (ii) received written notice of any claim, charge or complaint from any Governmental Authority or other Person pursuant to any administrative, arbitration or similar adjudicatory proceeding with respect to the Property or the Business to which Seller is named a party which has not been resolved, settled or dismissed.

     (h) Employees.

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

          (ii) Except as set forth in Schedule 7.1(h)(ii), Seller has not (a) been served with any court filing in any litigation with respect to the Employees in which Seller is a named party, or (b) received written notice from any Employee, Governmental Authority or other Person making a formal charge, complaint, or request for a grievance or arbitration proceeding against Seller alleging a breach or default under the Union Contracts or Employment

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Agreements or a violation of any Applicable Law relating to the employment or service relationship of the Employees.

          (iii) Schedule 7.1(h)(iii) identifies each Seller Employee Plan.

          (iv) No Seller Employee Plan is subject to Title IV of ERISA.

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

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

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

          (viii) Seller is not a Plan, and the Property and Business do not constitute a Plan under the Department of Labor Regulations codified at Section 2510.3-101, subject to Title I of ERISA or Section 4975 of the Code.

     (i) Taxes. Except as disclosed in Schedule 7.1(i), (i) all Taxes which would be delinquent if unpaid will be paid in full or prorated at Closing as part of the Prorations pursuant to Section 11.2; provided, however, that if any Taxes are payable in installments, such representation and warranty shall apply only to such installments which would be delinquent if unpaid at Closing, (ii) Seller has not received any written notice for an audit of any Taxes which has not been resolved or completed, and (iii) Seller is not currently contesting any Taxes.

     (j) Environmental Matters. To Seller’s Knowledge, Schedule 7.1(j) sets forth a correct and complete list of all environmental assessments, reports and studies relating to the Property in Seller’s Possession (the “Environmental Reports”), and Seller has made available to Purchaser a true and complete copy of the Environmental Reports. Seller has not received any written notice from any Governmental Authority or other Person of any Environmental Claims, Environmental Liabilities or violation of any Environmental Laws with respect to the Property.

     (k) Licenses and Permits. Seller has made available to Purchaser a true and complete copy of the Licenses and Permits. Except as set forth in Schedule 7.1(k), Seller has not received any written notice from any Governmental Authority of (i) any violation, suspension, revocation or non-renewal of any Licenses and Permits with respect to the Property or the Business that has not been cured or dismissed, or (ii) any failure by Seller to obtain any Licenses and Permits required for the Property or the Business that has not been cured or dismissed.

     (l) Tenant Leases. Schedule 7.1(l) sets forth a correct and complete list of the Tenant Leases, and Seller has made available to Purchaser a true and complete copy of the Tenant Leases. Except as set forth in Schedule 7.1(l), (i) Seller has neither given nor received any

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written notice of any breach or default under any of the Tenant Leases which has not been cured, and to Seller’s Knowledge, there are no material defaults under the Tenant Leases by any of the parties thereto which have not been cured, (ii) to Seller’s Knowledge, fixed rent and additional rent are currently being collected under such Tenant Leases without offset, counterclaim or deduction, (iii) all decorations, alterations or other work required to be performed by Seller pursuant to the Tenant Leases has been performed in full, (iv) Schedule 7.1(l) sets forth a true and complete list of security deposits currently held by Seller with respect to the Tenant Leases, and (v) there are no brokerage commissions or finders fees payable by Seller with respect to any current or renewal term of the Tenant Leases or the negotiation of any new Tenant Lease.

     (m) Contracts. Schedule 7.1(m) sets forth a correct and complete list of the Material Contracts, and Seller has made available to Purchaser a true and complete copy of the Material Contracts. Except as set forth on Schedule 7.1(m), Seller has neither given nor received any written notice of any breach or default under any of the Material Contracts which has not been cured, and to Seller’s Knowledge, there are no material defaults under any of the Material Contracts by any of the parties thereto which have not been cured.

     (n) Management Agreements. Except for the Management Agreement, the Parking Management Agreement or as otherwise disclosed in this Agreement, Seller is not a party to any management, franchise, license, concession or other agreements with respect to the management of the Hotel.

     (o) Bookings. Schedule 7.1(o) sets forth a correct list of all Bookings as of a date which is not earlier than ten (10) Business Days prior to the date of this Agreement, which shall be updated at Closing to a date which is not earlier than ten (10) Business Days prior to Closing; provided, however, that such list of Bookings shall be redacted to exclude all information identifying the particular Persons holding such Bookings.

     (p) Insurance. Schedule 7.1(p) sets forth a correct and complete list of each insurance policy maintained by Seller or its Affiliates with respect to the Property and the Business.

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

     (r) Foreign Person. Seller is a “United States person” (as defined in Section 7701(a)(30)(B) or (C) of the Code) for the purposes of the provisions of Section 1445(a) of the Code.

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

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

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     (u) Prepaid Fees and Deposits. Schedule 7.1(u) sets forth a list of each prepaid fee, reservation, advanced payment and deposit in excess of $10,000.00 relating to the Hotel as of the date which is ten (10) Business Days prior to the date hereof.

     (v) Trade Associations. Schedule 7.1(v) sets forth all trade associations to which Seller or Manager belongs and the respective dues and fees therefor.

     (w) Financial Information. Earnings before interest, taxes, depreciation and amortization (“EBITDA”) information for the Hotel for the year ended December 31, 2003 and the six months ended June 30, 2004 attached as Schedule 7.1(w) was prepared using generally accepted accounting principles applied on a consistent basis during the periods involved and fairly present in all material respects EBITDA for the periods then ended (subject to normal period-end adjustments). As of the date of this Agreement, to Seller’s Knowledge, no event, act or condition has occurred which has had (or could reasonably be expected to result in) a material adverse change in the financial condition of the Hotel since June 30, 2004.

     Notwithstanding the foregoing, if Purchaser has Knowledge of a breach of any representation or warranty made by Seller in this Agreement prior to Closing and Purchaser nevertheless proceeds to close the transaction described in this Agreement, such representation or warranty by Seller shall be deemed to be qualified or modified to reflect Purchaser’s Knowledge of such breach.

     Section 7.2. Purchaser’s Representations and Warranties. To induce Seller to enter into this Agreement and to consummate the transaction described in this Agreement, Purchaser hereby makes the representations and warranties in this Section 7.2, upon which Purchaser acknowledges and agrees that Seller is entitled to rely.

     (a) Organization and Power. Purchaser is duly formed, validly existing and in good standing under the laws of the State of Delaware, is (or will be prior to Closing) qualified to do business in the State of Illinois and has all requisite power and authority to own, lease and operate its properties and to carry on its business as currently being conducted.

     (b) Authority and Binding Obligation. (i) Purchaser has full power and authority to execute and deliver this Agreement and all other documents to be executed and delivered by Purchaser pursuant to this Agreement (the “Purchaser Documents”), and to perform all obligations of Purchaser arising under each of the Purchaser Documents, (ii) the execution and delivery by the signer on behalf of Purchaser of each of the Purchaser Documents, and the performance by Purchaser of its obligations