PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS

Exhibit 10.26

SHERATON DELFINA HOTEL

PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS

Between

REGIS PROPERTIES, L.L.C.,

a Delaware limited partnership

as SELLER

and

BLUE DEVILS OWNER LLC,

a Delaware limited liability company

as BUYER

As of October 13, 2010

PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS

     THIS PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS (this “ Agreement ”) is made as of October 13, 2010 (the “ Effective Date ”), by and between REGIS PROPERTIES, L.L.C., a Delaware limited partnership (“ Seller ”), and BLUE DEVILS OWNER LLC, a Delaware limited liability company (“ Buyer ”).

W I T N E S S E T H:

     A. Seller is the owner of the Property (defined below). The Property is located in the County of Los Angeles, State of California.

     B. Seller desires to sell the Property and Buyer desires to purchase the Property, on the terms and conditions set forth in this Agreement.

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the parties, Buyer and Seller agree as follows:

ARTICLE I

PURCHASE AND SALE

(a) the fee simple interest in the land situated in Los Angeles, California more particularly described on Schedule 1.1(a) attached hereto and made a part hereof, together with all and singular the rights and appurtenances of Seller pertaining to such property, including any right, title and interest of Seller in and to adjacent streets, alleys or rights-of-way (the property described in clause (a) of this Section 1.1 being herein referred to collectively as the “ Land ”);

(b) the buildings, structures, garages, fixtures and other improvements on the Land, including specifically, without limitation, that certain hotel commonly known as “Sheraton Delfina” (the “ Hotel ”) and the restaurants, food and beverage, meeting and fitness facilities located therein or thereon (the property described in this clause (b) of this Section 1.1 being herein referred to collectively as the “ Improvements ”);

(c) all tangible personal property owned by Seller and located upon the Land or within the Improvements and used solely in connection with the operation of the Land and Improvements, including specifically, without limitation, appliances, furniture, furnishings, artwork, equipment, carpeting, draperies and curtains, tools and supplies, decorations, china, glassware, linens, silver, utensils, all vehicles (if any), and other items of personal property (excluding cash and deposit accounts) in all cases subject to depletion, resupply, substitution, replacement and disposition in the ordinary course of business, such property being herein referred to collectively as the “ Personal Property ”);

(d) subject to Section 4.4 below, all contracts or reservations for the use of guest rooms, ballroom, banquet and restaurant facilities, conference facilities, meeting rooms or other facilities of the Hotel or located within the Improvements (“ Bookings ”);

(e) all assignable contracts and agreements (collectively, the “ Operating Agreements ”) relating to the upkeep, repair, maintenance or operation of the Land, the Improvements or the Personal Property or other property used in connection with the operation of the Hotel not rejected by Buyer in accordance with the terms hereof, including without limitation (i) the agreements listed on Schedule 1.1(e)(i) attached hereto, (ii) all equipment leases listed on Schedule 1.1(e)(ii) , and (iii) the Collective Bargaining Agreement between Manager (and an affiliate thereof), and UNITE — HERE, Local 11 (“ Local 11 ”) (the “ Collective Bargaining Agreement ”), but excluding (A) the Management Agreement (defined below) and (B) the License Agreements (as defined below);

(f) (i) all assignable existing warranties and guaranties (expressed or implied) issued to Seller in connection with the Improvements or the Personal Property; (ii) all transferable names, marks, logos, websites, domain names and designs, used in the operation or ownership of the Land, the Improvements or the Personal Property or any part thereof, if any; and (iii) all transferable licenses, franchises and permits owned by Seller and used in or relating to the ownership, occupancy or operation of the Land, the Improvements or the Personal Property or any part thereof (the property described in this clause (f) of this Section 1.1 being herein referred to collectively as the “ Intangibles ”);

(g) (i) all food and beverages (except the Alcoholic Beverage Inventory, which shall be conveyed in accordance with Section 4.9 , below); (ii) inventory held for sale to Hotel guests and others in the ordinary course of business including all opened and unopened retail inventory in any Hotel gift shop or any other area at the Hotel conducting retail sales (collectively, “ Retail Inventory ”); (iii) engineering, maintenance and housekeeping supplies, including soap and cleaning materials, fuel and materials; stationery and printing items and supplies; and (iv) other supplies of all kinds, whether used, unused or held in reserve storage for future use in connection with the maintenance and operation of the Land, the Improvements or the Personal Property, in each case to the extent located at the Hotel, together with any additions thereto prior to Closing (defined below) and subject to depletion, resupply, substitution, replacement and disposition in the ordinary course of business (all of the foregoing being referred to herein as the “ Consumable Inventory ” and, to the extent contained in unopened boxes, bottles, jars or containers of any type as of the Closing Date, shall collectively be referred to, together with unopened packages of china, glass, silver and linens, as the “ Unopened Inventory ”);

(h) all leases for the lease and occupancy of space at the Hotel (collectively, the “ Leases ”) listed and described on Schedule 1.1(h) attached hereto and made a part hereof, including any deposits called for under such Leases and not applied to the tenants’ obligations as of the Closing Date. For purposes of this Agreement, “Leases” do not include Bookings; and

(i) subject to Section 4.4.9 hereof, Seller’s interest in the funds contained in “house banks” for the Hotel as of the Cut-Off Time (defined in Section 4.4.10 below), whether held in the name of Seller, the Hotel or Manager and owned by Seller (collectively, the “ House Bank Funds ”). Buyer expressly acknowledges and agrees that the Property to be transferred to

Buyer pursuant to this Agreement does not include any reserve or other accounts created or maintained by Seller or Manager in connection with the ownership or operation of the Hotel.

(a) The Land and the Improvements are sometimes collectively referred to herein as the “ Real Property ” and the Real Property, the Personal Property, the Bookings, the Operating Agreements, the Intangibles, the Consumable Inventory (including the Unopened Inventory), the Leases and the House Bank Funds are hereinafter sometimes referred to collectively as the “ Property ”; provided that, the Purchase Price does not include, and shall be adjusted with respect to, the House Bank Funds and the other adjustment items described in Section 4.4 below.

(b) Notwithstanding anything to the contrary in Section 1.1 or Section 1.2(a) above, the following items are expressly excluded from the Property:

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

(ii) All accounts receivable of the Hotel and all related operations with respect to periods prior to Closing (collectively, the “ Receivables ”); and

(iii) Any tangible or intangible property (including, without limitations, fixtures, personal property or intellectual property) identified on Schedule 1.2 hereto, owned by (A) the supplier, vendor, licensor, lessor or other party under any Operating Agreements, (B) the tenants under any Leases, (C) Manager, (D) any employees, (E) any guests or customers of the Hotel, or (F) any other third party.

(a) On the Closing Date (defined below), Buyer shall deliver to Escrow Agent (defined below) by wire transfer an amount equal to the Purchase Price, as increased or decreased by prorations and adjustments as herein provided, less the Earnest Money (defined below) previously delivered to Escrow Agent.

(b) The Purchase Price, as increased or decreased by prorations and adjustments as herein provided, shall be payable in full at Closing in cash by wire transfer of immediately available federal funds to an escrow account designated by Seller in writing to Buyer and Escrow Agent prior to the Closing.

(a) Within one (1) business day after the full execution and delivery of this Agreement, Buyer shall deposit with Chicago Title Company (“ Escrow Agent ”) having its office at 700 South Flower Street, Suite 800, Los Angeles, California 90017, Attention: Patricia Schlageck, Facsimile: (213) 612-4138, the sum of Five Million and No/100 Dollars ($5,000,000.00) (together with all interest earned on such sum, the “ Earnest Money ”) in good funds by federal wire transfer.

(b) Upon the delivery (or required delivery) of all or any portion of the Earnest Money by Buyer to Escrow Agent, the Earnest Money (including any portion thereof that is required to be delivered but has not been delivered by Buyer) shall be fully earned by Seller and non-refundable to Buyer for any reason whatsoever, except that Buyer shall be entitled to a return of the Earnest Money in the event this Agreement is timely terminated as a result of Buyer’s election to terminate or is otherwise deemed terminated strictly in accordance with and pursuant to (i) Section 3.5 below, (ii) Section 4.8 below, (iii) Section 6.2 below, or (iv) Section 7.2 below.

(c) Escrow Agent shall hold the Earnest Money in an interest-bearing account in accordance with the terms and conditions of this Agreement. All interest accruing on such sums shall become a part of the Earnest Money and shall be distributed as Earnest Money in accordance with the terms of this Agreement. Notwithstanding any provision of this Agreement to the contrary, in no event shall Seller have any responsibility or liability to Buyer in connection with the accrual or payment of interest on any portion of the Earnest Money.

(d) Time is of the essence for the delivery of Earnest Money under this Agreement and the failure of Buyer to timely deliver any portion of the Earnest Money shall be a material default, and shall entitle Seller, at Seller’s sole option, to terminate this Agreement immediately and to pursue all remedies available to Seller under this Agreement and applicable law.

(a) Buyer acknowledges that (i) the Hotel is being operated and managed by KHM Delfina, LLC, a Delaware limited liability company (or an affiliate thereof) (the “ Manager ”), pursuant to that certain Hotel Management Agreement dated as of April 28, 2003, by and between Seller and Manager (or their predecessors-in-interest) (collectively, as amended, the

“ Management Agreement ”), and (ii) Seller shall cause the Management Agreement to be terminated concurrently with the Closing.

(b) Buyer acknowledges that the Property is subject to that certain Sheraton Hotel License Agreement (the “ Sheraton Agreement ”) dated on or about January 31, 2003, by and between The Sheraton Corporation (“ Sheraton ”) and Seller (the Sheraton Agreement, together with any other license agreements related to the Property, the “ License Agreements ”). Seller shall terminate the Sheraton Agreement effective as of the Closing Date and Buyer shall pay at Closing any termination or transfer fees associated with such termination, if applicable, unless such fees are related to a default by Seller under the Sheraton Agreement. Buyer shall attempt to enter into a replacement license agreement(s) with Sheraton (on the same terms as the Sheraton Agreement, for the remainder of the term thereof or on such other terms as are acceptable to Buyer in its sole discretion (provided such other terms do not result in a termination fee to be payable by Seller)) which will become effective as of the Closing (the “ New License Agreement ”); provided, however that in the event that Buyer fails to enter into a New License Agreement and is required to pay a termination fee to Sheraton, Buyer shall receive at Closing a credit against the Purchase Price in the amount of Two Hundred Fifty Thousand and No/100 Dollars ($250,000.00).

(c) Buyer shall, within five (5) days after the Effective Date, subject to applicable waiting periods and timelines dictated by Sheraton, deliver a written application to Sheraton requesting that Sheraton approve Buyer as a licensee and requesting preparation and delivery of a New License Agreement (“ Sheraton’s Consent ”). Buyer shall use good faith, diligent, commercially reasonable efforts to reach agreement with Sheraton on the form of the New License Agreement (provided that Buyer shall accept all terms that are the same as the terms of the existing Sheraton Agreement, and a term that runs for the remainder of the term thereof). Buyer shall pay all application fees, consent fees, termination fees and other costs and expenses related to the License Agreements or the New License Agreement.

(d) Notwithstanding any provision of this Agreement to the contrary, Seller shall not be liable or responsible for the performance by Sheraton under the Sheraton Agreement, to the extent such obligations are required to be performed after the Closing.

ARTICLE II

TITLE AND SURVEY

(a) the lien of all ad valorem real estate taxes and assessments not yet due and payable as of the Closing Date, subject to adjustment as herein provided;

(b) local, state and federal laws, ordinances or governmental regulations, including but not limited to, building and zoning laws, ordinances and regulations, now or hereafter in effect relating to the Real Property;

(c) items appearing of record or shown on the Survey and, in either case, not objected to by Buyer or waived or deemed waived by Buyer in accordance with Section 2.3 hereof; and

(d) the rights of the tenants under the Leases.

ARTICLE III

INSPECTION PERIOD

its environmental, engineering, zoning and land use investigation of the Real Property without obtaining Seller’s consent so long as Buyer provides Seller not less than twenty-four (24) hours prior written notice (via e-mail or telephone, anything herein contained to the contrary notwithstanding) and allows Seller the opportunity to attend or participate in any such meetings, conversations or communications, and (ii) Buyer shall have the right to conduct such interviews with the Hotel General Manager, Director of Sales, Revenue Manager, Controller and Chief Engineer as Buyer shall reasonably require and Seller and Manager shall cause all of the same to cooperate in connection therewith. Buyer agrees to indemnify against, defend, protect and hold Seller harmless from and against any claim for liabilities, losses, costs, expenses (including reasonable attorneys’ fees actually incurred), damages or injuries arising out of or resulting from or in connection with the inspection of the Property by Buyer or its agents, employees, representatives, consultants or contractors (provided that Buyer shall have no such obligation with respect to pre-existing conditions that are merely discovered as a result of Buyer’s inspections) and notwithstanding anything to the contrary in this Agreement, such obligation to indemnify, defend, protect and hold harmless Seller shall survive Closing or any termination of this Agreement. All inspections shall occur at reasonable times agreed upon by Seller and Buyer. Buyer agrees (i) that prior to entering the Property to conduct any inspection, Buyer shall obtain and maintain, and shall cause each of its contractors and agents to maintain (and shall deliver evidence satisfactory to Seller thereof), at no cost or expense to Seller, commercial general liability insurance from an insurer reasonably acceptable to Seller in the amount of Two Million Dollars ($2,000,000) with combined single limit coverage for personal injury or property damage per occurrence, such policies to name Seller as an additional insured party, which insurance shall provide coverage against any claim for personal injury or property damage caused by Buyer or its agents, representatives or consultants in connection with any such tests and investigations, and (ii) to keep the Property free from all liens and encumbrances caused by its inspections of the Real Property. Buyer’s insurance may not be canceled or amended except upon thirty (30) days’ prior written notice to Seller.

ARTICLE IV

CLOSING

(a) Deliver to Buyer a duly executed grant deed (the “ Deed ”) in the form attached hereto as Exhibit A and made a part hereof, conveying the Land and the Improvements, subject only to the Permitted Exceptions, together with any required real estate transfer tax declarations or any similar documentation required to evidence the payment of any tax imposed by the State of California, County of Los Angeles and/or City of Santa Monica on the transaction contemplated hereby;

(b) Execute and deliver to Buyer two (2) original counterparts of a bill of sale in the form attached hereto as Exhibit B and made a part hereof, conveying the Personal Property and Consumable Inventory without warranty of title (except as provided herein) or use and without warranty, expressed or implied, as to merchantability and fitness for any purpose;

(c) Execute and deliver to Buyer two (2) original counterparts of an assignment of Seller’s interest in the Operating Agreements (and cause Manager to assign its interest in the Collective Bargaining Agreement), the Bookings and the other Intangibles (in each case to the extent assignable) (“ Assignment of Contracts ”) in the form attached hereto as Exhibit C and made a part hereof;

(d) Execute and deliver to Buyer two (2) original counterparts of an assignment of Seller’s interest in the Leases in the form attached hereto as Exhibit D and made a part hereof;

(e) Deliver to Buyer a certificate, dated as of the Closing Date and executed on behalf of Seller by a duly authorized officer thereof, stating that the representations and warranties of Seller contained in this Agreement are true and correct in all material respects as of the Closing Date (with appropriate modifications of those representations and warranties made in Section 5.1 hereof to reflect any changes therein including without limitation any changes resulting from actions under Section 5.4 hereof) or identifying any representation or warranty which is not, or no longer is, true and correct and explaining the state of facts giving rise to the change. In no event shall Seller be liable to Buyer for, or be deemed to be in default hereunder by reason of, any breach of representation or warranty which results from any change that (i) occurs between the Effective Date and the Closing Date and (ii) is permitted under the terms of this Agreement or is beyond the reasonable control of Seller to prevent; provided, however , that the occurrence of a change which is not permitted hereunder or is beyond the reasonable control of Seller to prevent shall, if materially adverse to Buyer, constitute the non-fulfillment of the condition set forth in Section 4.6(b) . If, despite changes or other matters described in such certificate, the Closing occurs, Seller’s

representations and warranties set forth in this Agreement shall be deemed to have been modified by all statements made in such certificate;

(f) Deliver to Buyer and the Title Company such evidence as the Title Company may reasonably require as to the authority of the person or persons executing documents on behalf of Seller;

(g) Deliver to Buyer an affidavit duly executed by Seller stating (i) that Seller is not a “foreign person” as defined in the Federal Foreign Investment in Real Property Tax Act of 1980 and the 1984 Tax Reform Act, and (ii) addressing any similar California law disclosure requirements, in the form attached hereto as Exhibit E and made a part hereof;

(h) If not already delivered to Buyer, deliver to Buyer, the Leases, the licenses and permits, if any, in the possession of Seller or Seller’s agents, together with such leasing and property files and records that are material in connection with the continued operation, leasing and maintenance of the Property; provided that any such items shall be deemed to have been delivered by Seller to Buyer if Seller leaves such items at the Property and/or if Manager has possession of such items. Buyer shall cooperate with Seller for a period of seven (7) years after Closing in case of Seller’s need in response to any legal requirement, a tax audit, tax return preparation or litigation threatened or brought against Seller, by allowing Seller and its agents or representatives access, upon reasonable advance notice (which notice shall identify the nature of the information sought by Seller), at all reasonable times to examine and make copies of any relevant instruments, files and records, which right shall survive the Closing;

(i) Deliver to the Escrow Agent an executed closing statement consistent with this Agreement and in a customary form;

(j) Deliver evidence of the termination of the License Agreements;

(k) Deliver the certificates/registrations of title for any vehicles owned by Seller and used in connection with the Property;

(l) Deliver notices addressed to all interested parties, including tenants under the Leases, that the Property has been conveyed to Buyer and directing all payments and inquiries to Buyer at its address;

(m) Execute and deliver two (2) original counterparts of the Balconies/Artwork Holdback Agreement;

(n) Execute and deliver two (2) original counterparts of the Parking Holdback Agreement; and

(o) Deliver such additional documents as shall be reasonably required to consummate the transaction expressly contemplated by this Agreement, provided that none of the same shall increase the burdens upon or decrease the benefits to Seller hereunder.

(a) Pay to the Escrow Agent the full amount of the Purchase Price, as increased or decreased by prorations and adjustments as herein provided, in immediately available wire transferred funds pursuant to Section 1.5 above, it being agreed that at Closing the Earnest Money shall be applied towards payment of the Purchase Price;

(b) Join Seller in execution of (or deliver original executed counterparts of) the instruments described in clauses (c), (d), (i), (m) and (n) of Section 4.2 above;

(c) Deliver a letter duly executed by Buyer, in the form attached hereto as Exhibit F , confirming that Buyer is not acquiring the Property with the assets of an employee benefit plan as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974 (“ ERISA ”), and, in the event Buyer is unable or unwilling to make such a representation, Buyer shall be deemed to be in default hereunder, and Seller shall have the right to terminate this Agreement and to receive and retain the Earnest Money;

(d) Deliver a certificate, dated as of the Closing Date and executed on behalf of Buyer by a duly authorized officer thereof, stating that the representations and warranties of Buyer contained in this Agreement are true and correct in all material respects as of the Closing Date;

(e) Deliver to Title Company such evidence as Title Company may reasonably require as to the authority of the person or persons executing documents on behalf of Buyer;

(f) Buyer hereby covenants and agrees to (i) obtain a sales tax license or permit for the Hotel from each of the applicable jurisdictions and provide an exemption or resale certificate (each, a “ Resale Certificate ”) to Seller not less than two (2) business days prior to Closing (it being the express intention of the parties hereto that no Sales Tax shall be due and payable by Seller (or any Affiliate of Seller) in connection with Buyer’s inability or failure to obtain such Resale Certificates;

(g) Execute or cause its post-Closing Hotel manager to execute an assumption of the Collective Bargaining Agreement unless Buyer has executed a new management agreement with Manager prior to Closing;

(h) Execute the New License Agreement, if applicable; and

(i) Deliver such additional documents as shall be reasonably required to consummate the transaction contemplated by this Agreement, provided that none of the same shall increase the burdens upon or decrease the benefits to Buyer hereunder.

     4.4.1 Proration of Taxes . All real estate ad valorem taxes, general assessments and special assessments and all personal property ad valorem taxes assessed against the Hotel (generically, “ Taxes ”) and payable during the tax year in which Closing occurs and which are then due and payable shall be paid by Seller at or before Closing, and all of the same payable during the tax year in which Closing occurs shall be prorated between Buyer and Seller as of the Closing Date in accordance with local custom for the proration of taxes in commercial real estate transactions in Santa Monica, California. Taxes which become due and payable and applicable to any following tax year, shall be the responsibility of Buyer. Seller retains the right to commence, continue and settle any proceeding to contest any taxes for any taxable period which encompasses any period prior to the date of the Closing, and shall be entitled to any refunds or abatements of Taxes awarded in such proceedings, provided that, to the extent the same are prorated hereunder, Buyer shall be entitled to its prorated share thereof.

     4.4.2 General Proration of Expenses .

(a) The following items of expense with respect to any portion or aspect of the Hotel shall be prorated between Seller and Buyer as of the Closing Date:

(i) All charges and expenses under any Operating Agreements.

(ii) All utility charges (but excluding any utility deposits). To the extent reasonably practicable, though, in lieu of prorating the charges for any metered utility service, Buyer and Seller shall endeavor to have the utility read the meter as early as possible on the Closing Date, render a final bill to Seller based on such reading and bill all subsequent service to Buyer.

(iii) Prepaid expenses of the Hotel, but including without limitation, (1) the expense of all licenses and permits obtained in connection with the operation of the Hotel, and (2) the expense of all insurance obtained by Seller or Manager for the Hotel and transferred to and assumed by Buyer.

(iv) Fees, compensation and all other amounts payable under the License Agreements prior to the termination thereof shall be the responsibility of Seller (other than termination fees under the Sheraton Agreement, if any), and the fees, compensation and all other amounts payable under the New License Agreement (if applicable) together with termination fees under the Sheraton Agreement, if any, shall be the responsibility of Buyer.

(v) All other Hotel operating expenses, other than employment expenses (which are covered by Section 4.4.3 below).

     4.4.3 Employment Expenses .

(a) Seller shall be responsible for all wages and other amounts owed to employees of Manager and/or Seller at the Property relating to the period prior to the Cut-Off Time, and Buyer shall be responsible for all wages and other amounts due to employees at the Property relating to the period after the Cut-Off Time. The obligation to pay or reimburse the Manager for the wages, salaries and other benefits of employment of employees of Manager and/or Seller, together with applicable employment and withholding taxes of such employees, shall be allocated between Buyer and Seller as set forth in this Section 4.4.3 .

(i) With respect to hourly employees, (a) wages of hourly employees shall be allocated according to hours worked during the current pay period before and after the Cut-Off Time; (b) employment and withholding taxes for the current pay period for such employees shall be allocated in the same manner as wages; (c) accrued vacation and required contributions to health, pension and other benefit plans for such employees shall be allocated on the basis used by Manager under the Management Agreement for allocating such costs to particular accounting periods, with such costs attributable to the accounting period in which the Closing Date occurs to be allocated on a per diem basis according to the number of days in the current period occurring before and after the Cut-Off Time.

(ii) With respect to salaried employees, salaries, employment and withholding taxes, accrued vacation and other employment benefits for salaried employees shall be allocated on the basis used by the Manager under the Management Agreement for allocating such costs to particular accounting periods, with such costs during the accounting period in which the Closing Date occurs to be allocated on a per diem basis according to the number of days in the current period occurring before and after the Cut-Off Time.

(iii) Pension expenses for eligible employees shall be prorated at Closing based on actual payroll amounts as reflected in Manager’s books as of the Closing Date.

(b) Notwithstanding any provision of this Agreement to the contrary, Seller shall pay out as of Closing all (i) severance or separation payments, (ii) sick pay, and (iii) “hospitalization pay”, if any, existing as of the Closing Date.

(c) Seller shall be responsible for all pension plan payments payable to the Retirement Plan (as defined in Section 5.8(d) below), which is Local 11’s multi-employer plan under the Collective Bargaining Agreement to the extent relating to the period prior to the Cut-Off Time. Buyer shall be responsible for all pension plan payments payable to the Retirement Plan under the Collective Bargaining Agreement to the extent relating to the period on or after the Cut-Off Time.

(d) To the extent required by applicable law, accrued wages, vacation pay, health and welfare benefit plan payments and other amounts accrued as of the Closing Date

and due to employees of the Hotel shall be paid at Closing by Seller and shall not be prorated unless Seller obtains consent from employees to allow accrued vacation and/or other benefits to be carried over to their employment with Buyer.

4.4.4 Hotel Revenues .

(a) At Closing, Seller and Buyer shall share equally all revenues from the Hotel guest rooms and facilities occupied on the evening immediately preceding the Closing Date, including any sales taxes, room taxes, occupancy taxes and other taxes charged to guests in such rooms, all parking charges, sales from mini-bars, in-room food and beverage, telephone, facsimile and data communications, in-room movie, laundry, and other service charges allocable to such rooms with respect to the evening immediately preceding the Closing Date. All revenues from restaurants, lounges, vending machines and other service operations conducted at the Property shall be allocated based on whether the same accrued before or after the Cut-Off Time as described in the preceding sentence, and Seller shall cause the Manager to separately record sales occurring before and after the Cut-Off Time at the Property. The foregoing amounts are referred to collectively as “ Guest Revenues ”. Notwithstanding the foregoing, all revenues from any bars and lounges at the Property shall be prorated based on the actual closing time for such bar or lounge. For example, if such bar or lounge closes at 2:00 a.m. on the Closing Date, Seller shall retain the revenues from such services and operations even though such revenues were generated two (2) hours after the Cut-Off Time.

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

(c) At Closing, the right to collect all Receivables not actually collected by Seller or Manager prior to the Cut-Off Time shall be retained by Seller. Buyer shall, at no more than di minimis third party out-of-pocket costs to Buyer, reasonably cooperate with Seller and Manager in connection with Seller’s collection efforts after Closing and, to the extent any Receivables are paid to Buyer or Buyer’s agents after Closing, Buyer shall cause all such Receivables to be promptly remitted to Seller.

(d) Any operating revenues not otherwise provided for in this Section 4.4 , shall be prorated between Buyer and Seller as of Closing.

4.4.5 Rent . Rent and other payments payable by tenants, licensees, concessionaires, and other persons using or occupying the Real Property or any part thereof

under a Lease or otherwise, if any, for or in connection with such use or occupancy, including, without limitation, fixed monthly rentals, additional rentals, percentage rentals, escalation rentals, retroactive rentals, operating cost pass-throughs, common area maintenance charges, HVAC charges, payments of taxes and insurance expenses, promotional/marketing charges, construction receivables and other sums and charges payable by the tenants under the Leases (collectively, “ Rent ”) shall be prorated as of the Closing such that Seller will be entitled to Rent attributable to periods prior to the Closing and Buyer will be entitled to Rent attributable to periods from and after the Closing, all as more particularly set forth below:

(a) All Rent, other than Percentage Rent (as defined below), collected by Seller, prior to Closing, under the Leases for the month in which the Closing occurs (“ Current Rent ”) shall be prorated as of the Closing Date.

(b) All Rent other than Current Rent (“ Rent Arrears”) shall not be prorated at Closing. In the event that either Buyer or Seller receives Rent from a tenant after the Closing Date, such Rent shall be applied in the following order of priority (after deduction of actual out-of-pocket costs of collection paid by Buyer to third parties): (a) first to current rent due to Buyer, (b) second to delinquent rent due to Buyer, and (c) thereafter to Rent Arrears due to Seller from such tenant. Any sums owed to Seller pursuant to the foregoing shall be paid by Buyer within ten (10) days following receipt by Buyer. Buyer shall pursue all Rent Arrears in a commercially reasonable manner and shall have the right to negotiate settlements with tenants who have Rent Arrears as it may determine in good faith; provided that, (x) Seller shall have the unrestricted right to pursue collection from any tenant not in possession of its space as of the Closing Date in Seller’s sole discretion including, without limitation, initiating and prosecuting a lawsuit against the applicable tenant (other than a lawsuit seeking eviction), and (y) in the event that after Closing Buyer evicts or otherwise terminates the possession of any tenant with Rent Arrears, if Buyer has neither released the tenant nor pursued eviction to judgment, Seller shall have the unrestricted right to pursue collection from such tenant in Seller’s sole discretion including, without limitation, initiating and prosecuting a lawsuit against the applicable tenant.

(c) Percentage rent or overage rent (referred to herein as “ Percentage Rent ”) under the Leases shall be prorated between Buyer and Seller on a Lease-by-Lease basis with Seller entitled to the portion of total Percentage Rent paid under each Lease for the portion of the current Lease Year (as defined below) in which the Closing occurs (the “ Subject Lease Year ”) occurring prior to the Closing Date and Buyer being entitled to the balance of Percentage Rent for the remainder of the Subject Lease Year, based on the monthly accruals of Percentage Rents under the Leases for the period through the month in which the Closing Date occurs, with an adjustment to be made post-closing to account for any Percentage Rent attributable to the month in which the Closing Date occurs. As used herein, the term “ Lease Year ” means the twelve (12) month period (or, as to tenants for which the Closing

occurs during a partial Lease Year, such applicable shorter period) as to which annual Percentage Rent is owed under each Lease.

     4.4.6 Hotel Payables . At Closing, Buyer shall receive a proration credit equal to the excess of (a) the aggregate estimated amount of all outstanding accounts payable for the Hotel as of the Closing Date (“ Hotel Payables ”) in the Preliminary Statement over (b) Buyer’s prorated share of such Hotel Payables under Section 4.4.2 , and Buyer shall assume the obligation to satisfy all Hotel Payables. After Closing, before paying any amount invoiced or otherwise claimed by a third party due with respect to the Hotel operations prior to Closing which is not included on such schedule (or is claimed in an amount larger than that shown on such schedule), Buyer shall first submit such invoice or claim to Seller. Unless Seller, within fifteen (15) days after receiving such submission, objects to such invoice or claim (thereby making it a “ Seller Disputed Payable ”), Buyer may pay the same and take a credit for such payment on the Final Statement. Notwithstanding the foregoing, upon Closing, Buyer shall assume all obligations of Seller to pay for any (i) consumables or other items ordered by or for the benefit of Seller in the ordinary course of business but which are not yet received as of the Closing Date, and (ii) items or services listed on a purchase order log prepared by Manager, which list shall be updated by Manager immediately prior to Closing; provided that, there shall not be any adjustment to the Purchase Price in connection with Buyer’s assumption of the liabilities described in clauses (i) and (ii) of this sentence.

     4.4.7 Credit for Certain Inventories . As of the date immediately prior to the Closing Date, Seller and Buyer shall jointly conduct or cause the Manager to conduct an inventory of all (a) Unopened Inventory, and (b) all Retail Inventory in any Hotel gift shop or any other area at the Hotel conducting retail sales, and shall deliver a written report thereon to Seller and Buyer. Such report shall reflect the value of the Unopened Inventory and the Retail Inventory at the acquisition cost thereof. Inasmuch as the Unopened Inventory and the Retail Inventory shall be deemed included in the Purchase Price, neither party shall receive a credit with respect to the Unopened Inventory and the Retail Inventory.

     4.4.8 Credit for Reservation Deposits . Buyer shall receive a proration credit equal to the aggregate amount of advance deposits that shall have been received by Seller prior to the Cut-Off Time on account of reservations for use or occupancy of the Property after the Cut-Off Time.

     4.4.9 Credit for Cash Banks . Seller shall receive a credit at Closing in an amount equal to all House Bank Funds.

     4.4.10 Regarding Hotel Prorations Generally . Unless this Section 4.4 expressly provides otherwise: (A) all prorations hereunder with respect to the Hotel shall be made as of 12:00:01 a.m., Los Angeles time (for the Hotel) (“ Cut-Off Time ”) on the Closing Date, (B) all prorations shall be made on an actual daily basis, and (C) for purposes of such prorations, all items of revenue and expense with respect to the Hotel’s operations shall be classified and determined in accordance with the Uniform System of Accounts, as reasonably modified by Manager for use at the Hotel and otherwise in accordance with generally accepted accounting principles; provided, however, with respect to food and beverage services at bars, restaurants or lounges, the Cut-Off Time means 2:00 a.m. local

time on the Closing Date. Except as otherwise expressly provided herein, in any case in which Buyer receives a credit at Closing on account of any obligation of Seller hereunder, Seller shall have no further liability for such obligation to the extent of the credit so given, and Buyer shall pay and discharge the same.

     4.4.11 Vouchers . Buyer shall (a) honor all outstanding unexpired gift certificates, coupons or other writings issued by Seller as set forth in Schedule 4.4.11 attached hereto that entitles the holder or bearer thereof to a credit (whether in a specified dollar amount as for a specified item, such as room night or meals) to be applied against the usual charge for rooms, meals and/or goods and services at the Hotel (collectively, “ Vouchers ”) and shall assume all liability, if any, for all outstanding Vouchers as of the Closing Date regardless of any purported expiration, (b) receive a credit against the Purchase Price payable at Closing equal to seventy percent (70%) of the face value (or seventy percent (70%) of the rack rate if no face value is given or if only a maximum value is given) of those Vouchers set forth in Schedule 4.4.11 attached hereto and incorporated herein by this reference, as updated as of the Closing Date, and (c) indemnify, defend and hold Seller harmless from and against all claims, liabilities, costs and expenses arising out of the Vouchers from and after the Closing Date.

     4.4.12 Air Condition Unit Installation . Seller has ordered new air conditioning units (the “ AC Units ”) as required pursuant to that certain default notice dated August 17, 2010 from Sheraton (the “ Sheraton Letter ”) and shall pay for the AC Units prior to Closing. Seller shall also endeavor to begin installation of the AC Units at the Property prior to Closing. In the event no AC Units are installed prior to Closing, Buyer shall receive a credit against the Purchase Price in the amount of Twenty Thousand and No/100 Dollars ($20,000) at Closing (the “ AC Credit ”) and Buyer shall assume all responsibility for the installation of all the AC Units. In the event, however, that some of the AC Units have been installed prior to Closing (each an “ Installed AC Unit ”), Buyer shall receive a pro rata share of the AC Credit for any AC Units remaining to be installed, and Buyer shall assume all responsibility for the installation of the remaining uninstalled AC Units.

     4.4.13 Utility and Other Deposits .

               (a) At Closing, Seller shall receive a credit for all refundable cash or other deposits posted with utility companies serving the Property or any governmental agencies or authorities or posted pursuant to any Operating Agreement, and Seller shall assign to Buyer all right, title and interest in and to such refundable cash or other deposits, or, at Seller’s option, Seller shall be entitled to receive and retain such refundable cash and deposits.

               (b) Buyer shall be entitled to a credit for all unapplied and refundable security and other deposits retained by Seller as of the Closing Date with respect to any Leases at the Hotel.

     4.4.14 Final Statement; Post-Closing Adjustments . Except for prorations for real estate taxes and other assessments, which shall be adjusted as of the Closing Date, and, if necessary, re-adjusted within fifteen (15) business days of receipt of the tax bill for the tax year in which the Closing occurs if such tax bill was not issued as of the Closing Date,

Buyer and Seller shall make a one-time post-Closing adjustment of any item of income and expense subject to adjustment as provided above which was either incomplete or incorrect (whether as a result of an error in calculation or a lack of complete and accurate information) as of the Closing. Buyer will prepare and deliver to Seller for its review and approval a statement of prorations (the “ Final Statement ”) within sixty (60) days following the Closing Date, and the party in whose favor the original incorrect adjustment or error was made (“ Adjusting Party ”) shall pay to the other party (“ Requesting Party ”) the sum necessary to correct such prior incorrect adjustment or error within ten (10) days after delivery of the Final Statement. Notwithstanding any provision of this Agreement to the contrary, all items required to be adjusted pursuant to this Section 4.4 shall be adjusted within 75 days of Closing (except real estate taxes, which shall be re-adjusted within the period set forth above), and such adjustment shall be final and no further adjustment to the prorations or the Purchase Price shall be made.

     4.4.15 Resolution of Disputes . In the case of a dispute, the parties shall attempt to resolve such dispute, but if for any reason such dispute is not resolved by the date that is thirty (30) days after the delivery of the original notice of the claimed adjustment by Buyer or Seller, but not to exceed 75 days after Closing, then the parties shall submit such dispute to Deloitte & Touche (“ Outside Accountants ”), and the determination of the Outside Accountants, which shall be made within a period of fifteen (15) days after such submittal by the parties, shall be conclusive. The fees and expenses of the Outside Accountants shall be paid equally by Buyer and Seller. At such time as the amount of any adjustment or dispute shall be determined (either by agreement or by determination of the Outside Accountants), any amount that shall be payable by the Requesting Party to the Adjusting Party as a result of such adjustment or determination shall be paid within ten (10) business days after the date on which such agreement or determination shall have been made.

     4.4.16 Survival . The provisions of this Section 4.4 shall survive Closing.

(a) Seller shall have delivered to Buyer or deposited with Escrow Agent all of the items required to be delivered to Buyer or deposited with Escrow Agent pursuant to the terms of this Agreement, including but not limited to, those provided for in Section 4.2 .

(b) All of the representations and warranties of Seller contained in this Agreement shall be true and correct in all material respects as of the Closing Date (with appropriate modifications permitted under this Agreement or not materially adverse to Buyer).

(c) Seller shall have performed and observed, in all material respects, all covenants and agreements of this Agreement to be performed and observed by Seller as of the Closing Date.

(d) Seller shall have delivered to Buyer reasonable evidence of completion and payment in full of the capital improvements required pursuant to the Sheraton Letter; provided, however, that for the AC Units, Seller shall instead deliver to Buyer reasonable evidence that all of the AC Units have been purchased (and paid for in full) and, to the extent applicable, reasonable evidence that the Installed AC Units have been installed.

(e) Seller shall have obtained and delivered to Buyer a “tax clearance” letter from the California Board of Equalization showing that all sales and other taxes with respect to the Hotel to be paid by Seller to the State of California have been paid or that none are owing.

(f) The Closing of the Liquor Escrow or the execution and delivery of a mutually acceptable interim management agreement allowing for the operation of the Hotel by Buyer or its manager and the operation of the Existing Liquor License post Closing by the holder of the Existing Liquor License.

(g) The Title Company shall be irrevocably committed to issuance of the Title Policy as of Closing.

(h) The Management Agreement shall have been terminated as of Closing.

(a) Escrow Holder shall have received the Purchase Price, as adjusted pursuant to this Agreement and shall be irrevocably committed to deliver the Purchase Price to Seller in the manner provided for in this Agreement.

(b) Buyer shall have delivered to Seller all of the items required to be delivered to Seller pursuant to the terms of this Agreement, including but not limited to, those provided for in Section 4.3 , other than delivery of the Purchase Price which shall be delivered to Escrow Holder.

(c) All of the representations and warranties of Buyer contained in this Agreement shall be true and correct in all material respects as of the Closing Date.

(d) Buyer shall have performed and observed, in all material respects, all covenants and agreements of this Agreement to be performed and observed by Buyer as of the Closing Date.

(e) The Sheraton Agreement shall have been terminated as of Closing without any cost or penalty to Seller.

(a) Buyer shall use diligent, good faith efforts, and Seller shall cooperate with Buyer, to file any and all paperwork necessary for the transfer of the Type 47 Liquor License (No. 389701) issued to KOR Hotels, LLC with respect to the Hotel (the “ Liquor License ”), to Buyer on or after the Closing Date; provided that, such transfer and cooperation of Seller (i) shall not create any potential liability for Seller and (ii) be at no cost or expense to Seller. Buyer agrees to pay all fees, charges, and related costs in connection with the transfer of the Liquor License. Within thirty (30) days of the parties’ execution of this Purchase and Sale Agreement, Buyer shall submit with the California Department of Alcoholic Beverage Control (“CABC”) all necessary paperwork to transfer the Liquor License to Buyer. Buyer specifically acknowledges and agrees that the transfer of the Liquor License to Buyer on the Closing Date shall not be a condition to Buyer’s obligation to close the transaction contemplated under this Agreement, provided, that, in the event such transfer shall not have occurred upon the Closing Date, the Food and Beverage Management Agreement referenced in subsection (c), below, shall be executed and delivered as of Closing. In no event shall Seller be required to transfer to Buyer the Liquor License or any alcoholic beverage inventory which is located at or held for use in the Hotel unless and until the CABC has approved the transfer of the Liquor License to Buyer.

(b) Cooperation by Seller shall include the opening of a “Liquor License Escrow”, at an escrow company of Buyer’s designation, as required by applicable law for the transfer of the

Liquor License, and the associated transfer of any unopened containers of alcoholic beverages (“ Alcoholic Beverage Inventory ”). The Liquor License Escrow arrangements shall include the following

(i) the conveyance to Buyer of all unopened, and unexpired containers of alcoholic beverages upon the approval by the CABC of the transfer of the Liquor License to Buyer;

(ii) a purchase price of Sixty Thousand and No/100 Dollars ($60,000.00) for the existing Liquor License and the unopened alcoholic beverage inventory to be transferred by Seller to Buyer. The aforementioned amount of deposit is included in the Purchase Price (and is not in addition to the Purchase Price) and said payment shall be credited to Buyer at Closing. Any and all funds remaining in the Liquor License Escrow after the payment of claims by Seller’s creditors, if any, shall be remitted to Seller by the escrow company upon the approval by the CABC of the transfer of the Liquor License to Buyer; and

(c) If the Liquor License has not been transferred to Buyer effective as of the Closing Date, then Buyer’s obligation to close the purchase of the Hotel shall not be excused or delayed or in any other way be affected thereby, the Purchase Price for the Property shall not be reduced, Buyer’s obligation to pay the Liquor License Price pursuant to subparagraph (ii) above shall not be excused or reduced, and Seller shall have no additional obligation as a result thereof; Seller shall, for a period of one hundred and eighty days (180) following the Closing, cooperate and assist in Buyer’s efforts to have the Liquor License transferred to Buyer in accordance with the terms of this Section (it being the sole responsibility of Buyer to arrange for such transfer or issuance of a new alcoholic beverage license) by executing and delivering to Buyer a Food and Beverage Management Agreement, in the form attached as Exhibit G hereto, same to have a term of 90 days plus one 90 day extension exercisable by Buyer in the event issuance of the Liquor License has not occurred prior to expiration of the original term thereof.

(a) Cause the Deed and any other documents which the parties hereto may mutually direct to be recorded in the Official Records of Los Angeles County, California in the order directed by the parties;

(b) Disburse to Seller from funds deposited by Buyer with Escrow Agent towards payment of all items (including, without limitation, the Purchase Price) chargeable to the account of Buyer;

(c) Deliver to Seller a fully executed original of the instruments described in clauses (c), (d), (i), and (j) of Section 4.2 above and clauses (c), (d) and (f) of Section 4.3 above and a conformed copy of the Deed;

(d) Deliver to Buyer a fully executed original of the instruments described in clauses (b), (c), (d), (e), (g), (i), and (j) of Section 4.2 above and a conformed copy of the Deed; and

(e) Direct the Title Company to issue the Title Policy to Buyer.

ARTICLE V

REPRESENTATIONS, WARRANTIES AND COVENANTS

(a) Organization and Authority . Seller has been duly organized and is validly existing and in good standing under the laws of Delaware. Seller has the full right and authority to enter into this Agreement and to transfer all of the Property to be conveyed by Seller pursuant hereto and to consummate or cause to be consummated the transactions contemplated herein to be made by Seller. The person signing this Agreement on behalf of Seller is authorized to do so.

(b) No Breach . To Seller’s knowledge, the execution, delivery and performance of this Agreement by Seller and the consummation of the transaction contemplated herein will not: (i) result in a breach or acceleration of or constitute a default or event of termination under the provisions of any agreement or instrument by which the Property is bound or affected which would have a material adverse impact on the ownership and operation of the Property by Buyer; (ii) result in the creation or imposition of any lien, charge or encumbrance, against the Property or any portion thereof; or (iii) constitute or result in the violation or breach by Seller of any judgment, order, writ, injunction or decree issued against or imposed upon Seller or result in the violation of any applicable law, rule or regulation of any governmental authority which, with respect to any of the foregoing, would have a material adverse impact on the ownership or operation of the Property by Buyer.

(c) Litigation/Condemnation . Except as set forth on Schedule 5.1(c) attached hereto, Seller has not received written notice of any, and there is no, litigation which has been filed (and that is pending) against Seller that arises out of the ownership of the Property and that would materially and adversely affect the Property or use thereof or Seller’s ability to perform its obligations hereunder, nor has Seller received written notice of any eminent domain, condemnation or similar proceedings relating to the Real Property. To Seller’s knowledge, there is no threatened litigation that arises out of the ownership of the Property and that would materially and adversely affect the Property or use thereof or Seller’s ability to perform its obligations hereunder.

(d) Leases . To Seller’s knowledge, the list of Leases attached hereto as Schedule 1.1(h) is accurate and lists all Leases currently affecting the Hotel, and Seller has delivered (or otherwise made available to Buyer) a true and correct copy of such Leases and no uncured notice of default has been delivered by Seller or received by Seller with respect to any Leases and there are no oral understandings or side agreements with any tenant of the Property that has not been reduced to a writing and which is not set forth among the Leases.

(e) No Violations . Except as set forth on Schedule 5.1(e) attached hereto, to Seller’s knowledge, Seller has not received prior to the Effective Date any written notification from

any governmental or public authority that the Property is in violation of any applicable fire, health, building, use, occupancy or zoning laws or other statute, ordinance, law or code (including without limitation Environmental Laws, the Americans with Disabilities Act, as amended, and the Development Agreement) bearing on the construction, operation or use of the Property or any part thereof where such violation remains outstanding and, if unaddressed, would have a material adverse effect on the use of the Property as currently owned and operated.

(f) Operating Agreements and Equipment Leases . To Seller’s knowledge, there are no Operating Agreements or Equipment Leases which will affect the Property after the Closing Date except as set forth on the Schedule 1.1(e)-1 and Schedule 1.1(e)-2 , respectively, and no Operating Agreements or Equipment Leases have been amended except as set forth in said Schedules and there are no oral understandings or side agreements with respect to the rental of any equipment that has not been reduced to a writing and which is not set forth on said Schedules and there are no oral understandings or side agreements with respect to any service or equipment that has not been reduced to a writing and which is not set forth among said Schedules. To Seller’s knowledge, no uncured written notice of material default has been delivered by Seller or received by Seller with respect to any Operating Agreements or Equipment Leases. To Seller’s knowledge, the copies of Operating Agreements and Equipment Leases delivered or made available to Buyer by Seller are true and complete.

(g) Personal Property . To Seller’s knowledge, Seller owns the Personal Property, other than any leased Personal Property under the Equipment Leases, and upon its delivery to Buyer at Closing, the Personal Property shall be free of all liens and encumbrances.

(h) No Consents . No consent, approval or action of, filing with or notice to any governmental or regulatory authority or any other person or entity on the part of Seller is required in connection with the execution, delivery and performance of Agreement or the consummation of the transactions contemplated.

(i) Patriot Act Compliance . Neither Seller nor any individual or entity having an interest in Seller is a person or entity either (i) is listed on the Specially Designated Nationals and Blocked Persons List maintained by the Office of Foreign Assets Control, Department of the Treasury (“ OFAC ”) pursuant to Executive Order No. 133224, 66 Fed. Reg. 49079 (September 25, 2001) (the “ Order ”) and/or on any other list of terrorists or terrorist organizations maintained pursuant to any of the rules and regulations of OFAC or pursuant to any other applicable orders (such lists are collectively referred to as the “ Lists ”); (ii) is a person or entity who has been determined by competent authority to be subject to the prohibitions contained in the Orders; or (iii) is owned or controlled by, or acts for or on behalf of, any person or entity on the Lists or any other person or entity who has been determined by competent authority to be subject to the prohibitions contained in the Order.

(j) Compliance with Laws . Seller has not received prior to the Effective Date any written notice of default under that certain Development Agreement dated June 29, 1