Document:

EX-10.53

 PURCHASE AND SALE AGREEMENT 

among 
 CRP/MHI Holdings, L.L.C.

 “Seller” 
 and 

MHI Hospitality TRS II, LLC and MHI Hotel Investments Holdings LLC 

“Purchaser” 
 Date:
June 19, 2015 

 PURCHASE AND SALE AGREEMENT 

THIS PURCHASE AND SALE AGREEMENT (this “Agreement”), dated as of June 19, 2015 (the “Effective Date”),
by and between CRP/MHI Holdings, L.L.C., a Delaware limited liability company (“Seller”), and MHI Hospitality TRS II, LLC, a Delaware limited liability company (“MHI Hospitality”) and MHI Hotel Investments Holdings
LLC (“MHI Hotel Investments”, and together with MHI Hospitality, “Purchaser”). 
 ARTICLE 1 

DEFINITIONS AND CONSTRUCTION 

1.1 Definitions. For purposes of this Agreement, the following terms shall have the meanings indicated: 

1.1.1 “Accounts Receivable” means all amounts which Owner and Lessee are entitled to receive from the
Business which have accrued as of the Cut-off Time, including, without limitation, charges for use or occupancy of any guest, conference, meeting, or banquet rooms or other facilities at the Hotel, rents or other amounts received from any
restaurant, bar, or banquet services, or any other goods or services provided by or on behalf of Owner or Lessee at the Hotel. 

1.1.2 “Additional Earnest Money” has the meaning set forth in Section 8.1. 

1.1.3 “Adverse Proceeding” has the meaning set forth in Section 7.1.3. 

1.1.4 “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 ownership of
voting securities, contract, or otherwise. Neither Manager nor any Affiliate of Manager shall be deemed to be an Affiliate of either Purchaser or Seller, and Seller and Purchaser shall not be deemed to be Affiliates of each other. 

1.1.5 “Agreement” has the meaning set forth in the introductory paragraph hereof. 

1.1.6 “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, or 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 that the Person or property in question is subject to same. 

1.1.7 “Bookings” means all bookings and reservations for guest, conference, and banquet rooms or other
facilities at the Hotel as of the Closing Date for dates on or after the Closing Date, together with all deposits held by Owner, Lessee or Manager with respect thereto. 

  
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 1.1.8 “Business” means the lodging business and all
activities related thereto conducted at the Hotel and otherwise in connection with the Property, 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 and the Real Property, (iii) the rental of any commercial or retail space at the Real Property, (iv) the maintenance and repair of the
Real Property and tangible Personal Property, (v) to the extent applicable, the employment of the Employees and all matters related thereto, and (vi) the payment of Taxes and Real Property taxes relating to the foregoing. 

1.1.9 “Business Day” means any day other than a Saturday, Sunday, or federal or other legal holiday in
the State of Florida. 
 1.1.10 “Carlyle Guarantors” has the meaning set forth within the definition
of “Seller Credit Support Agreements” below. 
 1.1.11 “Closing” has the meaning set forth
in Section 8.1. 
 1.1.12 “Closing Date” means the date upon which the Closing occurs. 

1.1.13 “Closing Escrow” has the meaning set forth in Section 8.1. 

1.1.14 “Closing Instructions” has the meaning set forth in Section 8.1. 

1.1.15 “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. 
 1.1.16 “Contracts”
means, collectively, the Equipment Leases, the Operating Agreements, the Tenant Leases, the Management Agreement, the License Agreement, the Development Agreement and each other contract or agreement to which Owner or Lessee is a party. 

1.1.17 “Cut-off Time” has the meaning set forth in Article 11. 

1.1.18 “Development Agreement” means that certain Agreement Regarding Development dated as of March
2015 by and between PRH 4000 South Ocean LLC, a Florida limited liability company, and Owner. 
 1.1.19
“Dollars” or “$” means lawful currency of the United States of America. All sums paid or payable by either party to the other pursuant to this Agreement shall be paid in Dollars. 

1.1.20 “Earnest Money” shall mean the Initial Earnest Money and the Additional Earnest Money. 

1.1.21 “Effective Date” has the meaning set forth in the introductory paragraph hereof. 

  
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 1.1.22 “Employees” means all Persons employed, in a
full-time or part-time capacity at the Hotel at the time in question, by: (i) Owner, (ii) Seller, (iii) Lessee, (iv) Hotel Lessee Program, (v) Hotel Investment Program, or (vi) Manager, as the case may be. As used
herein, the term “Employees” includes, without limitation, 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 or any individual that was previously employed by Owner, Seller, Lessee, Hotel
Lessee Program, Hotel Investment Program, or Manager, as the case may be, protesting the fact that they are not currently employed. 

1.1.23 “Equipment Leases” means all leases and purchase money security agreements for any equipment,
machinery, vehicles, furniture or other personal property located at the Hotel, or otherwise used in connection with the Business, which are held by, for or on behalf of Owner or Lessee. 

1.1.24 “Escrow Agent” means First American Title Insurance Company or a similar national title
insurance company reasonably acceptable to Seller and Purchaser. 
 1.1.25 “Existing Broker” means
Jones Lang LaSalle. 
 1.1.26 “F&B” means all food and beverages (both alcoholic and
non-alcoholic), which are located at the Hotel (or held off site in storage) for use at the Hotel as of the Closing, including all food and beverages located in the guest rooms. 

1.1.27 “FF&E” means, subject to the Tenant Leases, 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 use at the Hotel as of the
Closing, other than the Supplies, the IT Systems, the F&B, the Retail Merchandise, the books and records for the Business, and the plans and specifications of the Improvements. 

1.1.28 “Final Closing Statement” has the meaning set forth in Section 11.6. 

1.1.29 “Governmental Authority” means the applicable country, state, county, city and any political
subdivision, agency, authority, department, court, commission, board, bureau or instrumentality of any of the foregoing having jurisdiction over the Property, Seller, and/or any of the Owner Parties or Lessee Parties, as the case may be. 

1.1.30 “Guest Ledgers” means all charges accrued to the open accounts of any guests or customers at the
Hotel including, without limitation, the “city ledger” 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 or on behalf of Owner or Lessee at the Hotel. 
 1.1.31 “Hotel” means the
Crowne Plaza Hollywood Beach Resort operated on the Real Property. 

  
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 1.1.32 “Hotel Investment Program” means MHI/Carlyle Hotel
Investment Program I, L.L.C., a Delaware limited liability company. 
 1.1.33 “Hotel Lessee Program”
means MHI/Carlyle Hotel Lessee Program I, L.L.C., a Delaware limited liability company. 
 1.1.34
“Improvements” means all of the buildings, improvements, structures and fixtures, including without limitation, the foundations and footings thereof, located on or affixed to the Land which constitute real property under Applicable
Law. 
 1.1.35 “Indemnification Claim” has the meaning set forth in Section 9.4.1. 

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

1.1.37 “Indemnitee” has the meaning set forth in Section 9.4.1. 

1.1.38 “Indemnitor” has the meaning set forth in Section 9.4.1. 

1.1.39 “Initial Closing Statement” has the meaning set forth in Section 11.6. 

1.1.40 “Initial Earnest Money” has the meaning set forth in Section 3.3. 

1.1.41 “Intangibles” means any and all intangible personal property owned by Owner or Lessee or any
Affiliate of Owner or Lessee and used in the operation of the Hotel or any of the Property, including, without limitation, any drawings, plans and specifications covering the Hotel, any non-Licensor trade names, service marks and logos used in the
operation of the Hotel, and any non-Licensor intellectual property used in the operation of the Hotel, customer lists and software, any telephone numbers used in the operation of the Hotel and (to the extent same are in existence), any guaranties
and warranties from the manufacturers of any equipment, appliances or other items used in the operation of the Hotel and from any contractors, suppliers, architects, engineers, and materialmen with respect to any plans, designs, work or
installations done for or at the Hotel, and any and all claims, choses in action, judgments, remedies, damages and causes of action, and all of Owner’s and Lessee’s right, title and interest in and to the books and records of the Hotel to
the extent Owner or Lessee is entitled thereto pursuant to the Management Agreement. In no event shall Intangibles include any intangible personal property owned by Manager or Licensor, or any of the tenants or licensees under the Tenant Leases or
any of their respective Affiliates. 
 1.1.42 “IT Systems” means all computer hardware,
telecommunications, and information technology systems located at the Hotel and all computer software used at the Hotel, to the extent same are assignable and transferable, but subject to the terms of any license agreement and/or Manager’s,
Manager’s Affiliates’, Licensor’s, and Licensor’s Affiliates’ rights in and to same. 

  
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 1.1.43 “JV Agreements” means (i) that certain
Limited Liability Company Agreement of MHI/Carlyle Hotel Lessee Program I, L.L.C. dated as of May 15, 2007 by and between Seller and MHI Hospitality, and (ii) that certain Limited Liability Company Agreement of MHI/Carlyle Hotel Investment
Program I, L.L.C. dated as of May 15, 2007 by and between Seller and MHI Hotel Investments. 
 1.1.44
“Land” means the land underlying the Real Property, together with all appurtenant easements, rights, and interests thereto. 

1.1.45 “Lender” means Bank of America, National Association. 

1.1.46 “Lessee” means MHI/Carlyle Sian Lessee I, L.L.C., a Delaware limited liability company. 

1.1.47 “Lessee Parties” means Lessee and Hotel Lessee Program. 

1.1.48 “License Agreement” means that certain License Agreement dated September 22, 2006 by and
between Lessee and Licensor, as amended. 
 1.1.49 “Licensor” means Holiday Hospitality Franchising,
Inc., a Delaware corporation. 
 1.1.50 “Loan Agreement” means that certain Loan Agreement dated
December 27, 2013, by and among, Lender, Lessee and Owner. 
 1.1.51 “Management Agreement”
means that certain Hotel Management Agreement dated as of August 8, 2007 by and between Owner and Manager. 

1.1.52 “Manager” means MHI Hotels Services, LLC, a Virginia limited liability company. 

1.1.53 “Membership Interest Transfer Agreement” means that certain Membership Interest Transfer
Agreement dated as of the Closing Date by and between Seller and Purchaser, in the form attached hereto as Exhibit A. 

1.1.54 “MHI Hospitality” has the meaning set forth in the introductory paragraph hereof. 

1.1.55 “MHI Hotel Investments” has the meaning set forth in the introductory paragraph hereof. 

1.1.56 “Outside Accountant” has the meaning set forth in Section 11.6. 

1.1.57 “Operating Agreements” means all repair, utility, maintenance, service and supply contracts,
booking and reservation agreements, credit card service agreements, consulting agreements, and all other similar agreements for goods or services, which are held by, for or on behalf of Owner or Lessee in connection with the Business except for
Tenant Leases, Equipment Leases, the Management Agreement, the License Agreement, the Development Agreement, Permits, and any so-called “master” agreements entered into directly by Licensor or Manager on behalf of the Hotel and other
Licensor or Manager hotels, as applicable. 

  
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 1.1.58 “Organizational Documents” means, with respect to
any Person who is not a natural Person, the certificate or articles of incorporation, memorandum of association, articles of association, trust agreement, by-laws, partnership agreement, limited partnership agreement, certificate of partnership or
limited partnership, limited liability company articles of organization, limited liability company operating agreement and any other organizational document, and all shareholder agreements, voting trusts and similar arrangements with respect to its
stock, partnership interests, membership interests or other equity interests. 
 1.1.59 “Owner” means
MHI/Carlyle Sian Owner I, L.L.C., a Delaware limited liability company. 
 1.1.60 “Owner Parties”
means Owner and Hotel Investment Program. 
 1.1.61 “Permits” means all governmental licenses,
permits, approvals and certificates which are required or used in connection with the operation of the Property and/or the Business. 

1.1.62 “Person” means an individual, corporation, limited liability company, partnership, joint
venture, association, joint stock company, trust, unincorporated organization, or government or any agency or subdivision thereof, or any other legal entity or organization. 

1.1.63 “Personal Property” means all FF&E, F&B, Supplies, Retail Merchandise, Contracts,
Permits, Accounts Receivable, Bookings, Equipment Leases, Guest Ledgers, Intangibles, and IT Systems, together with all other articles of personal property of every kind and nature whatsoever owned by Owner or Lessee or their Affiliates and located
in or at, or used in connection with the ownership, operation or maintenance of, all or any part of the Hotel, the Business or the Real Property, but specifically excluding, without limitation, any personal property owned by the tenants or licensees
under the Tenant Leases, or otherwise specifically excluded hereunder. 
 1.1.64 “Pre-Closing Taxes”
means all Taxes of the Owner Parties and Lessee Parties for taxable periods ending on or before the Closing Date and the portion up to and including the Closing Date for any taxable period that includes (but does not end on) the Closing Date. In the
case of any taxable period that includes (but does not end on) the Closing Date, the amount of Pre-Closing Taxes with respect to such period shall (i) in the case of Taxes that are imposed on a periodic basis, be deemed to be the amount of such
Taxes for the entire period multiplied by a fraction the numerator of which is the number of calendar days in the portion of the period ending on (and including) the Closing Date and the denominator of which is the number of calendar days in the
taxable period and (ii) in the case of Taxes that are not described in clause (i) above (such as payroll and similar taxes), be deemed to be equal to the amount that would have been payable if the taxable year or period of the Owner
Parties and Lessee Parties ended on the Closing Date. 
 1.1.65 “Program Agreement” means that
certain Program Agreement for MHI/Carlyle Hotel Investment Program I, L.L.C. and MHI/Carlyle Hotel Lessee Program I, L.L.C. dated as of May 15, 2007 by and among Seller, Purchaser, Hotel Investment Program and Hotel Lessee Program. 

  
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 1.1.66 “Property” means, collectively, the Real Property
and the Personal Property. 
 1.1.67 “Purchaser” has the meaning set forth in the introductory
paragraph hereof. 
 1.1.68 “Purchaser Closing Conditions” has the meaning set forth in
Section 7.1. 
 1.1.69 “Purchaser Closing Deliveries” has the meaning set forth in
Section 8.3. 
 1.1.70 “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, devisees and Affiliates of each of the foregoing, provided that
Purchaser Indemnitees shall not include Seller or Manager. 
 1.1.71 “Real Property” means the real
property commonly known as 4000 South Ocean Drive, Hollywood, Florida 33019, together with all appurtenant easements, rights and interests thereto. 

1.1.72 “Replacement Credit Support Agreements” means such replacement credit support agreements as
Lender shall request from Purchaser and/or its Affiliates as are required to fully release the Carlyle Guarantors from all of their obligations under the Seller Credit Support Agreements. 

1.1.73 “Retail Merchandise” means all merchandise owned by Owner or Lessee or any of their Affiliates
and held for sale to guests and customers, or ordered for sale at the Hotel as of the Closing, including, without limitation, inventory held for sale in any gift shop, spa, or newsstand operated by Owner, Lessee or Manager at the Hotel, but
expressly excluding the F&B, Supplies and any merchandise owned by the tenants and licensees under the Tenant Leases. 

1.1.74 “Seller” has the meaning given such term in the preamble. 

1.1.75 “Seller Closing Conditions” has the meaning set forth in Section 7.2. 

1.1.76 “Seller Closing Deliveries” has the meaning set forth in Section 8.2. 

1.1.77 “Seller Indemnitee(s)” means Seller 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, devisees, and Affiliates of each of the foregoing, provided that Seller Indemnitees
shall not include Purchaser or Manager. 
 1.1.78 “Seller Credit Support Agreements” means,
collectively, (a) that certain Guaranty Agreement dated as of December 27, 2013 made by CRP V-A AIV, L.P., CRP V-B AIV, L.P., CRP V-C AIV, L.P., CRP V AIV, L.P., CRFI V AIV, L.P. (MHI Sian 

  
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Series), Carlyle Realty Partners V (Canadian), L.P., Carlyle Realty Coinvestment V, L.L.C. and CRP V Manager GP AIV, L.L.C. (collectively, the “Carlyle Guarantors”) in favor of
Lender and (b) that certain Environmental Indemnity Agreement dated as of December 27, 2013 made by the Carlyle Guarantors in favor of Lender. 

1.1.79 “Seller’s Warranties” has the meaning set forth in Section 4.1. 

1.1.80 “Supplies” means all merchandise, goods, materials and supplies used or intended for use at the
Hotel, or held for sale in connection with the Business, including, without limitation, (a) stocks of operating supplies (including, without limitation, glasses, china, silver, linens, and uniforms), (b) engineering, maintenance and
cleaning supplies, (c) guest supplies (including stationery, matches and ashtrays, soap and other toiletries, menus, and directories and other printed materials), and (d) housekeeping supplies. 

1.1.81 “Survival Period” means twelve (12) months following the Closing Date, except pursuant to
Sections 6.1, 6.2 and 6.5, in which case the Survival Period shall be the applicable statute of limitations. 
 1.1.82
“Target Interest” means the seventy-five percent (75%) membership interest in each of (i) Hotel Lessee Program and (ii) Hotel Investment Program, which is held by Seller as of the Closing Date, and which represents
Seller’s entire interest in Hotel Lessee Program and Hotel Investment Program as well as Seller’s entire beneficial interest in the Property. 

1.1.83 “Taxes” means all federal, state or local taxes in any country, including income, unincorporated
business, gross receipts, windfall profits, value added, use, duty, sales, license, excise, transfer, mortgage recording, real property, personal property, commercial rent or occupancy taxes, hotel occupancy taxes, utility taxes, franchise,
employment, payroll, withholding or similar taxes, whether or not contested, and including any estimated taxes of the foregoing, amounts payable under unclaimed property laws, and together with any interest, additions or penalties with respect
thereto and any interest in respect of such additions or penalties. 
 1.1.84 “Tenant Leases” means
Owner’s and Lessee’s interest in all leases, subleases, licenses, concessions, and similar agreements granting to any Person the right to use or occupy any portion of the Real Property, other than the Management Agreement and the Bookings,
together with all security deposits held by Owner, Lessee, Manager, or any of their respective Affiliates. 
 1.2 Construction. The
following rules shall apply to the construction and interpretation of this Agreement. 
 1.2.1 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. 

1.2.2 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, unless otherwise expressly stated or clearly apparent from the context of such reference. All references in this Agreement to particular

  
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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. 
 1.2.3 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. 
 1.2.4 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. 
 1.2.5 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. 

1.2.6 The terms “include,” “including” and similar terms shall be construed as if followed by the
phrase “without limitation.” 
 1.2.7 The term “sole discretion” with respect to any determination
to be made a party under this Agreement means 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. 

1.2.8 Seller, Purchaser and their respective 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 or Schedules hereto. 
 ARTICLE 2 

TRANSFER OF TARGET INTEREST 

2.1 Target Interest. Upon and subject to the terms and conditions of this Agreement, Seller shall sell, and agrees to transfer and
assign to Purchaser, and Purchaser shall purchase and agrees to accept from Seller, all right, title and interest of Seller in and to the Target Interest. 

2.2 Membership Interest Transfer Agreement. The transfer and assignment of the Target Interest shall be effectuated through the
Membership Interest Transfer Agreement, which shall be executed and delivered at Closing. 
 ARTICLE 3 

PURCHASE PRICE 

3.1 Purchase Price. The aggregate purchase price (the “Purchase Price”) for the Target Interest is
Twenty-Six Million Two Hundred and Fifty Thousand and 00/100 U.S. Dollars (U.S. $26,250,000.00), subject to adjustment as provided herein. 

  
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 3.2 Payment of Purchase Price. At Closing, Purchaser shall pay to the order of Seller via
wire transfer of immediately available U.S. Dollars an amount equal to the Purchase Price (as adjusted pursuant to Article 11), less the Earnest Money (which shall be released to Seller at Closing). The Loan Agreement shall remain in place following
Closing. 
 3.3 Earnest Money. Within two (2) business days of the Effective Date, Purchaser shall deposit Two Million and
00/100 U.S. Dollars ($2,000,000.00) (together with any interest earned thereon, the “Initial Earnest Money”) with the Escrow Agent via wire transfer of immediately available U.S. Dollars, which Initial Earnest Money shall be held by
the Escrow Agent upon the terms set forth in this Agreement. In the event that Purchaser fails to timely deposit the Initial Earnest Money with the Escrow Agent, this Agreement shall be of no force and effect. At Closing, the Earnest Money shall be
applied to the Purchase Price. Unless this Agreement is terminated pursuant to Section 7.1 or Section 12.2, the Earnest Money shall be non-refundable to Purchaser and shall be paid to Seller upon the earlier to occur of the
Closing and the termination of this Agreement. 
  
 ARTICLE 4 

CONDITION OF PROPERTY 

4.1 PURCHASER’S RELIANCE ON ITS INVESTIGATIONS. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW AND EXCEPT FOR
SELLER’S EXPRESS REPRESENTATIONS AND WARRANTIES IN SECTION 5.1 (“SELLER’S WARRANTIES”), THIS SALE IS MADE AND WILL BE MADE WITHOUT REPRESENTATION, COVENANT, OR WARRANTY OF ANY KIND (WHETHER EXPRESS, IMPLIED,
OR, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, STATUTORY) BY SELLER. PURCHASER AGREES TO ACCEPT SELLER’S INTEREST IN THE PROPERTY AND THE TARGET INTEREST ON AN “AS IS” AND “WHERE IS” BASIS, WITH ALL FAULTS AND ANY
AND ALL LATENT AND PATENT DEFECTS, AND WITHOUT ANY REPRESENTATION OR WARRANTY, ALL OF WHICH SELLER HEREBY DISCLAIMS, EXCEPT FOR SELLER’S WARRANTIES. EXCEPT FOR SELLER’S WARRANTIES, NO WARRANTY OR REPRESENTATION IS MADE BY SELLER AS TO
(A) FITNESS FOR ANY PARTICULAR PURPOSE, (B) MERCHANTABILITY, (C) DESIGN, (D) QUALITY, (E) CONDITION, (F) OPERATION OR INCOME, (G) COMPLIANCE WITH DRAWINGS OR SPECIFICATIONS, (H) ABSENCE OF DEFECTS,
(I) ABSENCE OF HAZARDOUS OR TOXIC SUBSTANCES, (J) ABSENCE OF FAULTS, (K) FLOODING, OR (L) COMPLIANCE WITH LAWS AND REGULATIONS INCLUDING, WITHOUT LIMITATION, THOSE RELATING TO HEALTH, SAFETY, AND THE ENVIRONMENT. PURCHASER
ACKNOWLEDGES THAT PURCHASER HAS ENTERED INTO THIS AGREEMENT WITH THE INTENTION OF MAKING AND RELYING UPON ITS OWN INVESTIGATION OF THE PHYSICAL, ENVIRONMENTAL, ECONOMIC USE, COMPLIANCE, AND LEGAL CONDITION OF THE PROPERTY AND THE TARGET INTEREST AND
THAT PURCHASER HAS NOT BEEN INDUCED BY AND HAS NOT RELIED UPON ANY DISCLOSURES, REPRESENTATIONS OR WARRANTIES (IN EACH CASE WHETHER EXPRESS OR IMPLIED OR ORAL OR WRITTEN) MADE BY SELLER, ANY PARTNER OR OWNER OF SELLER, OR ANY AFFILIATE, AGENT,
EMPLOYEE OR OTHER REPRESENTATIVE OF ANY OF THE FOREGOING OR BY EXISTING BROKER OR ANY OTHER PERSON OR ENTITY PURPORTING TO REPRESENT SELLER WITH RESPECT TO THE PROPERTY OR THE TARGET INTEREST OR ANY OTHER MATTER AFFECTING OR RELATING TO THE
TRANSACTIONS CONTEMPLATED HEREBY, EXCEPT FOR SELLER’S WARRANTIES. IN ADDITION, PURCHASER EXPRESSLY ACKNOWLEDGES THAT FROM AND AFTER THE DATE OF THIS AGREEMENT, PURCHASER HAS NOT BEEN AND WILL NOT BE INDUCED BY AND HAS NOT RELIED AND WILL NOT
RELY UPON ANY DISCLOSURES, REPRESENTATIONS OR WARRANTIES (IN EACH CASE WHETHER EXPRESS OR IMPLIED OR 

  
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ORAL OR WRITTEN) MADE BY SELLER, ANY PARTNER OR OWNER OF SELLER, OR ANY AFFILIATE, AGENT, EMPLOYEE OR OTHER REPRESENTATIVE OF ANY OF THE FOREGOING OR BY EXISTING BROKER OR ANY OTHER PERSON OR
ENTITY PURPORTING TO REPRESENT SELLER WITH RESPECT TO THE PROPERTY OR ANY OTHER MATTER AFFECTING OR RELATING TO THE TRANSACTIONS CONTEMPLATED HEREBY, EXCEPT FOR SELLER’S WARRANTIES. PURCHASER FURTHER EXPRESSLY ACKNOWLEDGES AND AGREES THAT NO
PERSON OR ENTITY (EXCEPT FOR SELLER WITH RESPECT TO SELLER’S WARRANTIES) IS ENTITLED TO MAKE ANY DISCLOSURES, REPRESENTATIONS OR WARRANTIES (IN EACH CASE WHETHER EXPRESS OR IMPLIED OR ORAL OR WRITTEN) UPON WHICH PURCHASER SHALL BE ENTITLED TO
RELY, AND THAT, SELLER DOES NOT MAKE ANY REPRESENTATIONS OR WARRANTIES, WHETHER EXPRESS OR IMPLIED OR ARISING BY OPERATION OF LAW, WITH RESPECT TO THE PROPERTY OR THE TRANSACTIONS CONTEMPLATED HEREBY, EXCEPT FOR SELLER’S WARRANTIES. PURCHASER
HAS FULLY REVIEWED THE DISCLAIMERS AND WAIVERS SET FORTH IN THIS AGREEMENT WITH ITS COUNSEL AND UNDERSTANDS THE SIGNIFICANCE AND EFFECT THEREOF. PURCHASER ACKNOWLEDGES AND AGREES THAT THE DISCLAIMERS AND OTHER AGREEMENTS SET FORTH IN THIS ARTICLE 4
ARE AN INTEGRAL PART OF THIS AGREEMENT AND THAT SELLER WOULD NOT HAVE AGREED TO THE TRANSFER OF THE TARGET INTEREST TO PURCHASER WITHOUT THE DISCLAIMERS AND OTHER AGREEMENTS SET FORTH IN THIS ARTICLE 4. 

4.2 SURVIVAL. THE TERMS AND CONDITIONS OF THIS ARTICLE 4 SHALL EXPRESSLY SURVIVE THE CLOSING, AND SHALL NOT MERGE WITH THE PROVISIONS
OF ANY CLOSING DOCUMENTS. 
 ARTICLE 5 

REPRESENTATIONS AND WARRANTIES 

5.1 Representations and Warranties of Seller. To induce Purchaser to enter into this Agreement and to consummate the transactions
described in this Agreement, Seller hereby makes the express representations and warranties in this Section 5.1 as of the Effective Date and the Closing Date (or such other date as specifically set forth below): 

5.1.1 Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the
State of Delaware. Seller has all requisite power and authority to conduct its business as currently conducted and to own or lease and to operate its properties, and is duly qualified or admitted to do business and in good standing as a foreign
entity in all jurisdictions in which the ownership, use or leasing of its assets or properties or the conduct or nature of its business makes such qualification or admission necessary. 

5.1.2 Seller has full power and authority to execute, deliver and perform its obligations under this Agreement and to
consummate the transactions required of it contemplated hereby. The execution, delivery and performance of this Agreement by Seller and the consummation by it of the transactions contemplated hereby have been duly and validly authorized in
accordance with its Organizational Documents. No action or proceeding on the part of Seller is necessary to authorize this Agreement or the consummation of the transactions contemplated hereby. 

  
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 5.1.3 This Agreement and, at the time of Closing, the Membership Interest
Transfer Agreement, have been duly and validly executed and delivered by Seller, and constitute valid, legal and binding obligations, enforceable against Seller, in accordance with their terms, subject to Applicable Law. 

5.1.4 Seller is the record and beneficial owner of one hundred percent (100%) of the Target Interest, free and
clear of all liens, security interests, claims and encumbrances. 
 5.2 Representations and Warranties of Purchaser. To induce Seller
to enter into this Agreement and to consummate the transaction described in this Agreement, Purchaser hereby makes the express representations and warranties in this Section 5.2 as of the Effective Date and the Closing Date (or such other date
as specifically set forth below): 
 5.2.1 MHI Hotel Investments and MHI Hospitality are limited liability companies,
duly organized, validly existing and in good standing under the laws of Delaware. MHI Hotel Investments and MHI Hospitality have all requisite power and authority to conduct their business as currently conducted and to own or lease and to operate
their properties. 
 5.2.2 MHI Hotel Investments and MHI Hospitality have the power and authority to execute, deliver
and perform their obligations under this Agreement and to consummate the transactions contemplated hereby. The execution, delivery and performance by MHI Hotel Investments and MHI Hospitality of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized in accordance with the Organizational Documents of MHI Hotel Investments and MHI Hospitality, as applicable, and no other action or proceeding on the part of MHI Hotel
Investments or MHI Hospitality is necessary to authorize this Agreement or the consummation of the transactions contemplated hereby. This Agreement and, at the time of Closing, the Membership Interest Transfer Agreement, have been duly and validly
executed and delivered by MHI Hotel Investments and MHI Hospitality and constitute legal, valid and binding obligations of MHI Hotel Investments and MHI Hospitality, enforceable in accordance with their terms. 

5.2.3 The execution, delivery and performance of this Agreement by MHI Hotel Investments and MHI Hospitality does not,
and the consummation of the transactions contemplated hereby will not (with or without the giving of notice or lapse of time or both): (i) violate or require any consent or approval under, any provision of the Organizational Documents of MHI
Hotel Investments or MHI Hospitality, as applicable; (ii) violate or result in a default of, or require any consent or approval under any material agreement, policy, instrument, contract, commitment, license, franchise, permit or trust to which
MHI Hotel Investments or MHI Hospitality or any of their subsidiaries is a party or is otherwise subject; or (iii) violate or result in a default of in any material respect, or require any consent or approval under, any judgment, settlement,
consent, injunction, decree, order or ruling of any court or governmental authority to which MHI Hotel Investments and MHI Hospitality or any of their subsidiaries is a party or otherwise subject. 

  
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 ARTICLE 6 

COVENANTS AND ADDITIONAL AGREEMENTS OF THE PARTIES 

6.1 Tax Elections. Purchaser and Seller, with respect to their respective interest in the Owner Parties and Lessee Parties, shall
obtain the prior written consent of the other party prior to making or changing any Tax election, changing an annual accounting period, adopting or changing any accounting method, filing any amended Tax return, entering into any closing agreement,
settling any Tax claim or assessment, consenting to any extension or waiver of the limitation period applicable to any Tax claim or assessment, or taking any other similar action relating to the filing of any Tax return or report or the payment of
any Tax. All obligations in this Section 6.1 shall survive the Closing for the Survival Period. 
 6.2 Filing of Tax Returns.
Purchaser shall prepare and timely file, or cause to be prepared and timely filed, all Tax returns that are required by law to be filed for any taxable period ending on or before the Closing Date and which has not been filed by the Closing Date.
Purchaser (i) shall deliver such Tax returns to Seller for its review within a reasonable amount of time prior to the filing of such Tax returns and consider in good faith any comments provided by Seller, (ii) will not file such Tax
returns without Seller’s consent, which consent will not be unreasonably withheld or delayed, provided that Purchaser shall be permitted to file any such Tax return on the due date thereof even if it has not received such consent from Seller,
and (iii) will, promptly after filing, forward to Seller an accurate and complete copy of such filed Tax returns and proof of payment of the subject Taxes. Such Tax returns shall be prepared on a basis consistent with past practice except to
the extent otherwise required by law. 
 6.3 Organizational Documents. From the Effective Date until the Closing or earlier
termination of this Agreement, neither Purchaser nor Seller shall amend, supplement, terminate or otherwise modify any Organizational Document of a Lessee Party or Owner Party, without receiving the prior written consent of the other party. 

6.4 Conduct of the Business. From the Effective Date until the Closing or earlier termination of this Agreement, neither Seller nor
Purchaser shall take any action which shall cause the Hotel to be operated in a manner which is inconsistent with the Hotel’s ordinary course of business (i.e., consistent with Owner’s, Lessee’s and Manager’s past custom and
practice for the Business, taking into account the facts and circumstances from time to time.) From the Effective Date until the Closing or earlier termination of this Agreement, Seller shall not make any Carlyle Major Decision (as defined in each
of the JV Agreements), without receiving the prior written consent of Purchaser. 
 6.5 Taxes.  

6.5.1 Except as expressly provided herein, Seller will be responsible for seventy-five percent (75%) of all
Pre-Closing Taxes. To the extent Seller’s seventy-five percent (75%) share of any such Tax is not taken into account as a downward adjustment to the Purchase Price pursuant to Section 11.1, Seller will pay such amount to Purchaser in
immediately available funds at least two (2) Business Days prior to the due date of such Tax. 
 6.5.2
Notwithstanding any other provision of this Agreement, all transfer, documentary, recording, notarial, sales, use, registration, stamp and other similar Taxes or fees imposed by any taxing authority in connection with the transactions contemplated
by this Agreement will be borne one hundred percent (100%) by Purchaser. All necessary Tax returns and other documentation with respect to all such Taxes will be filed by the party required by applicable law to make such filing; provided that
the cost of any such filing will be borne one hundred percent (100%) by Purchaser. 

  
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 6.6 Exclusivity. From the Effective Date until the Closing or earlier termination of this
Agreement, Seller agrees that neither Seller nor anyone acting on its behalf will solicit, negotiate or accept any offer for the Target Interest or the Hotel from any person or entity other than Purchaser. 

6.7 JV Agreements. At Closing, Purchaser shall (i) amend and restate the JV Agreements so as to remove all references to
“Carlyle” and “CRP” in the JV Agreements and (ii) change the name of Hotel Investment Program, Hotel Lessee Program, Owner and Lessee so as to remove all references to “Carlyle” in the names of such entities. From
and after the Closing Date, Purchaser shall accede to all rights and obligations of Seller under the JV Agreements and Seller shall no longer have any rights or obligations under the JV Agreements. 

6.8 Replacement Credit Support Agreements. Purchaser shall use commercially reasonable efforts to cause the Carlyle Guarantors to be
fully released from all of their obligations under the Seller Credit Support Agreements. In connection therewith, Purchaser shall use commercially reasonable efforts to cause a credit worthy affiliate acceptable to Lender to provide all Replacement
Credit Support Agreements (together with any other documentation, instruments, agreements, opinions and other materials) required by Lender. Purchaser shall directly communicate with Lender in connection with obtaining such release and providing
such Replacement Credit Support Agreements, provided that Seller shall be entitled to participate in such communications and/or otherwise communicate with Lender in connection with such efforts. In connection therewith, Purchaser shall pay all costs
and fees of the Lender, including Lender’s legal fees and all applicable transfer fees and costs, in connection with obtaining such release of the Carlyle Guarantors under the Seller Credit Support Agreements and the provision of the
Replacement Credit Support Agreements. 
 ARTICLE 7 

CLOSING CONDITIONS 

7.1 Purchaser Closing Conditions. The obligation of Purchaser to consummate the Closing is subject to satisfaction at or prior to
Closing of the following conditions precedent (collectively, the “Purchaser Closing Conditions”): 

7.1.1 This Agreement shall be in full force and effect. 

7.1.2 Seller shall have performed and complied with all of its covenants hereunder in all material respects. 

7.1.3 No judgment, order, decree, statute, law, ordinance, rule or regulation, entered, enacted, promulgated, enforced
or issued by any court or other Governmental Authority of competent jurisdiction or arbitration or other legal restraint or prohibition shall be in effect, and there shall not be pending or threatened in writing any suit, action or proceeding by any
Governmental Authority, in each case only to the extent it prevents or seeks to prevent the transactions described in this Agreement (an “Adverse Proceeding”), unless (in any of the foregoing cases) the same shall have been
dismissed, released or otherwise cured prior to Closing. 
 7.1.4 No Applicable Law shall have been enacted that would
make illegal or invalid or otherwise prevent the consummation of the transactions contemplated by this Agreement. 

  
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 7.1.5 All of the Seller Closing Deliveries shall have been delivered to
Purchaser or deposited with Escrow Agent in the Closing Escrow to be delivered to Purchaser upon Closing. 
 7.1.6 The
representations or warranties of Seller in this Agreement shall be true and correct as of the date made and as of the Closing Date (or as of such other date to which such representation or warranty expressly is made) in all material respects. 

7.1.7 Since the Effective Date, the Property has not been materially damaged, and neither the Property nor any material
portion thereof has become the subject of any proceedings, judicial, administrative or otherwise, with respect to a taking by eminent domain or condemnation. For purposes of this paragraph, the phrase “materially damaged” means damage
reasonably exceeding $5,610,000 to repair and a “material portion” means a taking by eminent domain or condemnation of ten percent (10%) or more of the total land area of the Property or the permanent loss of access to the Property.

 The Purchaser Closing Conditions are for the benefit of Purchaser, and Purchaser shall have the right to waive any of the Purchaser
Closing Conditions at or prior to Closing; provided, however, that any such waiver shall be made in a writing executed by Purchaser. Notwithstanding the foregoing, in the event a Purchaser Closing Condition is not satisfied at or prior to Closing
and Purchaser nevertheless closes the transactions described in this Agreement, then Purchaser shall be deemed to have waived such Purchaser Closing Condition. 

7.2 Seller Closing Conditions. The obligation of Seller to consummate the Closing is subject to satisfaction of the following
conditions (collectively, the “Seller Closing Conditions”): 
 7.2.1 This Agreement shall be in full
force and effect. 
 7.2.2 All of the Purchaser Closing Deliveries shall have been delivered to Seller or deposited
with Escrow Agent in the Closing Escrow to be delivered to Seller upon Closing. 
 7.2.3 The representations and
warranties of Purchaser in this Agreement shall be true and correct in all material respects as of the date made and as of the Closing Date (or as of such other date to which such representation or warranty expressly is made). 

7.2.4 The covenants and obligations of Purchaser in this Agreement shall have been performed in all material respects.

 7.2.5 No Adverse Proceeding shall be in effect, pending or threatened in writing, unless (in any of the foregoing
cases) the same shall have been dismissed, released or otherwise cured prior to Closing. 
 7.2.6 No Applicable Law
shall have been enacted that would make illegal or invalid or otherwise prevent the consummation of the transactions described in this Agreement. 

7.2.7 (i) Purchaser shall have provided Lender with all documentation, instruments, agreements, opinions and other
required materials, at its sole expense, required by the Loan Agreement, the Seller Credit Support Agreements and Lender in connection with the transfer of the Target Interest and (ii) Purchaser and/or one of its credit worthy

  
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affiliates shall have delivered to Lender such Replacement Credit Support Agreements (and other documentation, instruments, opinions and other materials) as Lender requires to fully release the
Carlyle Guarantors from all of their obligations under the Seller Credit Support Agreements. 
 The Seller Closing Conditions are for the
benefit of Seller, and Seller shall have the right to waive any of the Seller Closing Conditions at or prior to Closing, provided, however, that any such waiver shall be made in a writing executed by Seller. Notwithstanding the foregoing, in the
event a Seller Closing Condition is not satisfied at or prior to Closing and Seller nevertheless closes the transactions described in this Agreement, then Seller shall be deemed to have waived such Seller Closing Condition. 

7.3 Frustration of Closing Conditions. Seller and Purchaser may not rely on the failure of the Seller Closing Conditions or the
Purchaser Closing Conditions, as the case may be, if such failure was caused by such party’s failure to act in good faith or failure to use its commercially reasonable efforts to cause the Closing to occur. 

7.4 Failure of a Condition Precedent. Without limiting the ability of each benefitted party to waive the applicable condition as set
forth in Sections 7.2 and 7.3, in the event any of the conditions set forth in Sections 7.2 or 7.3 are not fulfilled or waived, the party benefitted by such conditions may, by written notice to the other party, terminate this Agreement, whereupon
all rights and obligations hereunder of each party shall be at an end except those that expressly survive any termination. In the event this Agreement is terminated as a result of the failure of any condition set forth in Section 7.1, Purchaser
shall be entitled to a refund of the Earnest Money, otherwise, unless this Agreement is terminated pursuant to Section 12.2, the Earnest Money shall be disbursed to Seller as is required pursuant to Section 3.3. In any event,
Purchaser’s consent to the close of escrow pursuant to this Agreement shall waive any remaining unfulfilled conditions, and any liability on the part of Seller for breaches of representations and warranties of which Purchaser had knowledge as
of the Closing. 
 ARTICLE 8 

CLOSING 
 8.1
Closing. The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place by means of a so called “New York style” escrow (the “Closing Escrow”). The Closing Date shall
occur on the date which is sixty (60) days following the Effective Date (or such earlier date selected by Purchaser upon not less than five days’ notice); provided however, that Purchaser may elect to extend the Closing Date for up to
thirty (30) additional days by providing written notice of such election to Seller and contemporaneously depositing an additional Two Million and 00/100 U.S. Dollars ($2,000,000.00) (together with any interest earned thereon, the
“Additional Earnest Money”) with the Escrow Agent via wire transfer of immediately available U.S. Dollars, which Additional Earnest Money shall be held by the Escrow Agent pursuant to the terms of this Agreement. On the Closing
Date, Seller and/or Purchaser shall provide written instructions to the Escrow Agent (via electronic mail or otherwise) (the “Closing Instructions”) pursuant to which (i) all of the documents required to be delivered by Seller
and Purchaser at Closing pursuant to this Agreement shall be deposited with Escrow Agent, and (ii) at Closing, the documents deposited into the Closing Escrow shall be delivered to Seller and Purchaser (as the case may be) pursuant to the
Closing Instructions and otherwise in accordance with the terms of this Agreement. 
 8.2 Seller’s Closing Deliveries. On or
before the Closing Date, Seller or its Affiliates shall deliver or cause to be delivered to Purchaser or deposited with Escrow Agent in the Closing Escrow to be delivered to Purchaser at Closing, all of the (i) documents set forth in this
Section 8.2, each of which shall 

  
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have been, to the extent applicable, duly executed by Seller (or its Affiliate, as applicable) and acknowledged (if required), and (ii) other items set forth in this Section 8.2 (the
“Seller Closing Deliveries”), as follows: 
 8.2.1 an original counterpart of this Agreement; 

8.2.2 appropriate resolutions of Seller authorizing entering into this Agreement, the Membership Interest Transfer
Agreement and the Closing; 
 8.2.3 certificates of good standing from each appropriate jurisdiction dated as of a
recent date and prior to the Closing Date, in the name of Seller; 
 8.2.4 copies of the operating agreement and
certificate of organization of Seller; 
 8.2.5 a counterpart of the Initial Closing Statement; 

8.2.6 a counterpart of the Closing Instructions, if applicable; 

8.2.7 a counterpart of the Membership Interest Transfer Agreement; 

8.2.8 a counterpart of a termination agreement, in form and substance reasonably satisfactory to Purchaser and Seller,
which termination agreement shall acknowledge and agree that the Program Agreement is terminated and of no further force or effect; 

8.2.9 a FIRPTA affidavit in the form set forth in the U.S. Treasury Regulations Section 1.1445-2(b); and 

8.2.10 such other documents and instruments as may be reasonably requested by Purchaser in order to consummate the
Closing. 
 8.3 Purchaser’s Closing Deliveries. On or before the Closing Date, Purchaser shall deliver or cause to be delivered
to Seller or deposited with Escrow Agent in the Closing Escrow to be delivered to Seller all of the (i) documents set forth in this Section 8.3, each of which shall have been, to the extent applicable, duly executed by Purchaser or its
Affiliates (as applicable) and acknowledged (if required), and (ii) other items set forth in this Section 8.3 (the “Purchaser Closing Deliveries”), as follows: 

8.3.1 an original executed counterpart of this Agreement; 

8.3.2 a counterpart of the Initial Closing Statement; 

8.3.3 a counterpart of the Closing Instructions, if applicable; 

8.3.4 a counterpart of the Membership Interest Transfer Agreement; 

8.3.5 appropriate resolutions of Purchaser authorizing entering into this Agreement, the Membership Interest Transfer
Agreement and the Closing; 
 8.3.6 certificates of good standing from each appropriate jurisdiction dated as of a
recent date and prior to the Closing Date, in the name of Purchaser; 

  
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 8.3.7 a counterpart of a termination agreement, in form and substance
reasonably satisfactory to Purchaser and Seller, which termination agreement shall acknowledge and agree that the Program Agreement is terminated and of no further force or effect; 

8.3.8 the Replacement Credit Support Agreements and the documents described in Sections 6.8 and 7.2.7; and 

8.3.9 such other documents and instruments as may be reasonably requested by Seller in order to consummate the
transactions described in this Agreement. 
 ARTICLE 9 

INDEMNIFICATION 
 9.1
Indemnification by Seller. Subject to the limitations expressly set forth in this Agreement either limiting or granting indemnification, Seller shall indemnify, defend, and hold harmless the Purchaser Indemnitees, following the Closing, from and
against any Indemnification Loss incurred by any Purchaser Indemnitee to the extent resulting from (i) a breach or inaccuracy of any express representations or warranties of Seller in this Agreement, subject to the applicable Survival Period
and (ii) a breach by Seller of any of its covenants or obligations under Sections 6.1, 6.2, 6.3, 6.4, 6.5 and 10.1 and Article 11 of this Agreement, subject to the applicable Survival Period. Notwithstanding anything contained herein to the
contrary, but subject to Section 9.3.1, the indemnification obligations set forth in this Section 9.1 shall survive the Closing for the applicable Survival Period. 

9.2 Indemnification by Purchaser. Subject to the limitations expressly set forth in this Agreement, Purchaser shall indemnify, defend,
and hold harmless the Seller Indemnitees from and against any Indemnification Loss incurred by any Seller Indemnitee following the Closing, to the extent resulting from (i) a breach or inaccuracy of any representations or warranties of
Purchaser in this Agreement, subject to the applicable Survival Period and (ii) a breach by Purchaser of any of its covenants or obligations under Sections 6.1, 6.2, 6.3, 6.4, 6.5, 6.7 and 10.2 and Article 11 of this Agreement, subject to the
applicable Survival Period. Notwithstanding anything contained herein to the contrary, but subject to Section 9.3.1, the indemnification obligations set forth in this Section 9.2 shall survive the Closing for the Survival Period. 

9.3 Limitations on Indemnification Obligations. 

9.3.1 Notwithstanding anything to the contrary contained in this Agreement, an Indemnitee which is seeking defense or
indemnification for any Indemnification Loss shall be entitled to indemnification for the breach or inaccuracy of a representation or warranty only if the Indemnitee has given written notice to the Indemnitor prior to the expiration of the Survival
Period. 
 9.3.2 Notwithstanding anything to the contrary in this Agreement, the amount of any Indemnification Loss
for which indemnification is provided to an Indemnitee under this Article 9 shall be net of (a) any Tax benefits actually realized by the Indemnitee that are attributable to any deduction, loss, credit, refund or other reduction in Tax
resulting from or arising out of a Loss in the year in which the Loss giving rise to the claim for indemnification occurs; (b)insurance proceeds received by such Indemnitee in connection with the Indemnification Claim; or (c) any other third
party reimbursement. The Indemnitee shall use commercially reasonable efforts to realize any Tax benefit, collect any 

  
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insurance proceeds or obtain any third party reimbursement with respect to such Indemnification Claim, and if such Tax benefits, insurance proceeds or reimbursement are realized or obtained by
the Indemnitee after the Indemnitor has paid any amount in respect of an Indemnification Loss to the Indemnitee, the Indemnitee shall reimburse the amount realized or collected by the Indemnitee up to the amount received from the Indemnitor for such
Indemnification Loss, less the reasonable costs of collection, including reasonable attorneys’ fees. 
 9.4 Indemnification
Procedure. 
 9.4.1 If any of the Seller Indemnitees or Purchaser Indemnitees (as the case may be) (each, an
“Indemnitee”) is entitled to defense or indemnification under any express provision in this Agreement (each, an “Indemnification Claim”), and the party required to provide defense, or indemnification to such
Indemnitee (the “Indemnitor”) does not expressly accept such Indemnification Claim within thirty (30) days following notice of such Indemnification Claim, the dispute shall be resolved by litigation or other means of
alternative dispute resolution as the parties may agree in writing. 
 9.4.2 Notwithstanding anything to the contrary
contained in this Agreement, the Indemnitee shall have no right to indemnification against the Indemnitor for any Indemnification Claim which disputed by Indemnitor until such time as such dispute is resolved by a court order or order by an
applicable authority with competent jurisdiction, or other means as the parties otherwise may agree in writing. 
 9.5 Exclusive Remedy
for Indemnification Loss. Except for claims based on fraud or intentional misconduct, the indemnification provisions in this Article 9 shall be the sole and exclusive remedy of any Indemnitee with respect to any claim for Indemnification Loss
arising from or in connection with this Agreement. Except as expressly provided in this Agreement, neither Seller nor any of its Affiliates will have any liability with respect to the Business, the Hotel, the Owner Parties or the Lessee Parties
following Closing. 
 9.6 No Contribution. After the Closing, Seller shall have no right of contribution or indemnity from any of the
Owner Parties or Lessee Parties, whether arising as a matter of law or by contract, with respect to any claim for indemnification by any Purchaser Indemnitee hereunder. 

9.7 Survival. Except as expressly set forth in this Agreement, all representations, warranties, covenants, liabilities, and obligations
under this Agreement shall be deemed (i) if the Closing occurs, to not merge into the transfer documents and instead to survive the Closing for the applicable Survival Period, or (ii) if this Agreement is terminated, not to survive such
termination. This Article 9 and all other rights and obligations of defense and indemnification as expressly set forth in this Agreement shall survive the Closing for the applicable Survival Period and such indemnification obligations shall in no
way merge with the delivery of any document required to be delivered in connection with the Closing. 
 ARTICLE 10 

TRANSACTION COSTS 

10.1 Seller’s Transaction Costs. Seller shall be responsible for (a) the cost of its legal counsel, advisors and the other
professionals employed by it in connection with this Agreement and (b) an amount equal to Two Hundred Thirty Seven Thousand Five Hundred Dollars ($237,500) of the fee payable to the Existing Broker. 

  
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 10.2 Purchaser’s Transaction Costs. Purchaser shall be responsible for all costs and
expenses associated with (a) Purchaser’s legal counsel, advisors, engineers, consultants and the other professionals employed by it in connection with the purchase of the Target Interest, (b) any costs and expenses incurred under the
Loan Agreement, the Management Agreement or the License Agreement in connection with the transfer of the Target Interest (including any costs and expenses incurred in connection with the execution of the Replacement Credit Support Agreements and the
approvals required pursuant to Section 6.8), (c) the cost of transferring the applicable Permits, (d) $475,000 of the fee payable to the Existing Broker and (e) all closing escrow fees and costs and recording costs and
(f) all other costs associated with the transactions contemplated by this Agreement. 
 10.3 Survival. The provisions of this
Article 10 shall survive the Closing for the Survival Period. 
 ARTICLE 11 

PURCHASE PRICE PRORATIONS 

Except as provided below or in the definition of Pre-Closing Taxes, which shall govern Taxes, the Purchase Price shall be adjusted as of 12:00
A.M. Hollywood, Florida time on the Closing Date (the “Cut-off Time”), based upon a 365 day year, and the net amount of any such adjustment amount, as applicable, shall be added to (if such net amount is in Seller’s favor) or
deducted from (if such net amount is in Purchaser’s favor) the Purchase Price. The Purchase Price shall be adjusted as set forth in accordance with the provisions of this Article 11. This Article 11 shall survive the Closing for the Survival
Period. 
 11.1 Taxes and Assessments.  

11.1.1 To the extent possible, Seller and Purchaser shall calculate the amount of any Pre-Closing Taxes that have not
been paid before the Closing Date and the Purchase Price shall be adjusted downward in an amount equal to 75% of any such Taxes, subject to Section 6.5.2. 

11.1.2 For purposes of this Agreement, if the Closing shall occur before the tax rate or assessed valuation is fixed for
the Real Property or any part thereof for purposes of calculating any Real Property taxes, the calculation of such Real Property taxes shall be made on the basis of the tax rate for the most recent period for which such Taxes were assessed applied
to the most recently applicable assessed valuation of the Real Property or applicable part thereof; provided that all Real Property taxes shall be prorated assuming the maximum 4% discount for early payment as permitted under Applicable Law. 

11.2 Tax Refunds. Subject to Section 6.5.2, seventy-five percent (75%) of all refunds of Taxes of the Owner Parties and
Lessee Parties relating to periods ending on or before the Closing Date (for this purpose, any refund for periods beginning before the Closing Date and ending after the Closing Date shall be taken into account based on the definition of Pre-Closing
Taxes) shall be paid by (or caused to be paid by) Purchaser to Seller promptly upon receipt of such refund. 
 11.3 Taxes. Any
adjustments made pursuant to this Article 11 will be treated as an adjustment to the Purchase Price by the parties for Tax purposes, unless otherwise required by law. 

11.4 Current Assets. 

  
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 11.4.1 Cash. All cash of Owner and Lessee as of the Cut-Off Time
shall remain the property of Owner or Lessee, as applicable, from and after Closing. Seventy-five percent (75%) of such cash shall be credited to Seller as an upward adjustment to the Purchase Price. All such cash shall be counted as of the
Cut-off Time in the presence of Seller’s and Purchaser’s representatives. 
 11.4.2 Accounts Receivable,
Prepaid Expenses, Working Capital, Inventory and Reserves. All accounts receivable, prepaid expenses, working capital, inventory and reserves of Owner and Lessee as of the Cut-Off Time shall remain the property of Owner or Lessee, as applicable,
from and after Closing. Seventy-five percent (75%) of such accounts receivable, prepaid expenses, working capital, inventory and reserves shall be credited to Seller as an upward adjustment to the Purchase Price. Prepaid expenses shall include
premiums for prepaid insurance policies assumed by Purchaser at Closing for insurance policies that will remain in effect after the Closing Date and attributable to the period following the Cut-Off Time. 

11.5 Current Liabilities. To the extent not duplicative with other provisions of this Agreement, all current liabilities (i.e, accrued
but unpaid interest under the Loan Agreement, trade accounts payable, vouchers, prepaid rents, advance deposits and advance payments under Bookings and commissions due to credit and referral organizations with respect to room nights prior to the
Cut-Off Time, to the extent due after the Cut-Off Time) of Owner and Lessee as of the Cut-Off Time shall remain the liabilities of Owner or Lessee, as applicable, from and after Closing. Seventy-five percent (75%) of such current liabilities
shall be credited to Purchaser as a downward adjustment to the Purchase Price. 
 11.6 Employee Compensation. Purchaser shall receive
a credit in an amount equal to seventy-five percent (75%) of all salaries and wages which the Employees are entitled to receive as of the Cut-Off Time together with all employment taxes with respect thereto (and expressly including any employee
incentive payments, severance, vacation days, sick days and personal days which have accrued and been earned as of the Cut-Off Time.) From and after Closing, Purchaser shall be responsible for the payment of all wages, salaries, compensation and
benefits to Employees when payable in accordance with applicable laws and shall indemnify and hold harmless Seller against any liability to or respecting Employees for such wages, salaries, compensation and benefits to Employees that accrued or was
earned prior to or after the Cut-Off Time. 
 11.7 Other Adjustment. If applicable, the Purchase Price shall be adjusted at the
Closing to reflect the adjustment of any other item which, under the explicit terms of this Agreement, is to be apportioned at Closing to effectuate the intent that, except as otherwise expressly provided herein, all items of operating revenue and
operating expense of the Business prior to the Cut-Off Time shall be for the account of and paid by Seller and all items of operating revenue and operating expense of the Business with respect to the period after the Cut-Off Time shall be for the
account of and paid by Purchaser. Any adjustment amount resulting from this Section 11.7 shall be multiplied by seventy-five percent (75%). 

11.8 Mechanism for Adjustments. Seller shall make such inventories, examinations, and audits, and of the books and records, as the
parties may reasonably deem necessary, and as otherwise permitted under the Management Agreement, to make the adjustments and prorations required under this Agreement. Purchaser or its designated representative shall be allowed to be present at such
inventories, examinations, and audits. Based upon such inventories, examinations, and audits, Seller and Purchaser shall agree upon an initial closing statement on the Closing Date (the “Initial Closing Statement”). The Initial
Closing Statement shall contain Purchaser’s best estimate of the amounts of the items required to be prorated and adjusted pursuant to this Agreement between the parties as of the Closing Date. The

  
 21 

 
Initial Closing Statement shall be the basis upon which the adjustments provided for under this Agreement shall be made at Closing. Within thirty (30) days following the Closing, Purchaser
and Seller, with the assistance of Manager, shall prepare and agree upon a revised closing statement (the “Final Closing Statement”) which shall reflect the adjustment amounts as of the Cut-off Time. Any adjustments to the Initial
Closing Statement which are required shall be made by Purchaser and Seller, with due diligence and cooperation, by prompt cash payment to the party entitled to a credit as a result of such adjustments. To the extent any items in the Final Closing
Statement are disputed, the parties shall attempt in good faith to resolve any disputed items. To the extent such disputed items are not resolved within ninety (90) days following the Closing, then the parties shall submit such dispute to a
neutral, third-party nationally recognized accounting firm selected jointly by Seller and Purchaser (the “Outside Accountant”), and the determination of the Outside Accountant which shall be made within sixty (60) days after
submittal by the parties of the disputed items shall be conclusive. The non-prevailing party with respect to any disputed item shall be responsible for the fees of the Outside Accountant in connection therewith. In the event that the parties prevail
on one or more disputed items, but do not prevail on one or more other disputed items, respectively, the payment of the Outside Accountant’s fees shall be prorated between the parties based upon the total Dollar amount of the disputed items
resolved in favor of each party. Any errors in calculations to the foregoing adjustments shall be corrected as soon as practicable after the Closing provided, however, the provisions hereof shall survive the Closing for not longer than one hundred
eighty (180) days following the Closing. Notwithstanding anything to the contrary contained in this Agreement, any adjustments or corrections to the Purchase Price shall be made in immediately available U.S. Dollars. 

ARTICLE 12 
 DEFAULT;
REMEDIES; SURVIVAL 
 12.1 Default by Purchaser. If Purchaser defaults in its obligation to purchase the Property from
Seller pursuant to this Agreement, Purchaser agrees that Seller shall have the right to obtain and retain, and to unilaterally instruct the Escrow Agent to deliver to Seller, the Earnest Money as liquidated damages to recompense Seller for time
spent, labor and services performed, and the loss of its bargain. Purchaser and Seller agree that it would be impracticable or extremely difficult to affix damages if Purchaser so defaults and that the Earnest Money, together with the interest
thereon, represents a reasonable estimate of Seller’s damages. Seller agrees to accept the Earnest Money as Seller’s total damages and relief hereunder if Purchaser defaults in an obligation hereunder. If Purchaser does so default, this
Agreement shall be terminated and Purchaser shall have no further right, title, or interest in or to the Target Interest. 
 12.2
Default by Seller. If Seller defaults in its obligation to sell and convey the Target Interest to Purchaser pursuant to this Agreement, Purchaser’s sole remedy shall be to elect one of the following: (a) to terminate this Agreement,
in which event Purchaser shall be entitled to the return of the Earnest Money, or (b) to bring a suit for specific performance, provided that any suit for specific performance must be brought within 30 days of Seller’s default, to the
extent permitted by law, Purchaser hereby waiving the right to bring suit at any later date. As a condition precedent to any suit for specific performance, Purchaser must have tendered to the Escrow Agent all of its deliveries on or before the
Closing Date. Purchaser hereby waives any other rights or remedies. This Agreement confers no present right, title or interest in the Target Interest to Purchaser. 

12.3 DAMAGES. UNDER NO CIRCUMSTANCES SHALL THE PARTIES OR THEIR RESPECTIVE AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES OR AGENTS, OR ANY
OF THEM, BE LIABLE TO THE OTHER PARTIES, WHETHER IN TORT, CONTRACT OR OTHERWISE FOR ANY SPECIAL, CONSEQUENTIAL, INDIRECT, PUNITIVE, OR EXEMPLARY 

  
 22 

 
DAMAGES. THE PARTIES’ LIABILITY HEREUNDER SHALL BE LIMITED TO DIRECT ACTUAL DAMAGES, AND ALL OTHER DAMAGES AT LAW OR IN EQUITY ARE WAIVED. THE LIMITATIONS ON DAMAGES SPECIFIED IN ARTICLE 12
ARE WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING THE NEGLIGENCE OF ANY PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR PASSIVE. THE PROVISIONS OF THIS ARTICLE 12 SHALL SURVIVE THE CLOSING OR EARLIER
TERMINATION OF THIS AGREEMENT. 
 ARTICLE 13 

ASSIGNMENT 
 No
Assignment. Neither this Agreement nor any of the rights of a party hereunder (nor the benefits of such rights) may be assigned, transferred or encumbered by Purchaser or Seller (as applicable) without the other’s prior written consent and
any purported assignment, transfer or encumbrance without such prior written consent shall be void. 
 ARTICLE 14 

EARNEST MONEY 

14.1 Investment and Use of Funds. The Escrow Agent shall invest the Earnest Money in government insured interest-bearing accounts satisfactory to Purchaser and Seller, shall not commingle the Earnest Money with any funds of the Escrow Agent or others, and shall promptly provide Purchaser and Seller with confirmation
of the investments made. Unless this Agreement is terminated pursuant to Section 7.1 or Section 12.2, the Escrow Agent shall deliver the Earnest Money to the Seller upon the earlier to occur of the termination of this Agreement and the
Closing. 
 14.2 Termination. Except as otherwise expressly provided in this Agreement, upon not less than 5 business
days’ prior written notice to the Escrow Agent and the other party, Escrow Agent shall deliver the Earnest Money to the party requesting the same; provided, however, that if the other party shall, within said 5 business day period, deliver to
the requesting party and the Escrow Agent a written notice that it disputes the claim to the Earnest Money, Escrow Agent shall retain the Earnest Money until it receives written instructions executed by both Seller and Purchaser as to the
disposition and disbursement of the Earnest Money, or until ordered by final court order, decree or judgment, which is not subject to appeal, to deliver the Earnest Money to a particular party, in which event the Earnest Money shall be delivered in
accordance with such notice, instruction, order, decree or judgment. 
 14.3 Interpleader. Seller and Purchaser mutually agree
that in the event of any controversy regarding the Earnest Money, unless mutual written instructions are received by the Escrow Agent directing the Earnest Money’s disposition, the Escrow Agent shall not take any action, but instead shall await
the disposition of any proceeding relating to the Earnest Money or, at the Escrow Agent’s option, the Escrow Agent may interplead all parties and deposit the Earnest Money with a court of competent jurisdiction in which event the Escrow Agent
may recover all of its court costs and reasonable attorneys’ fees. Seller or Purchaser, whichever loses in any such interpleader action, shall be solely obligated to pay such costs and fees of the Escrow Agent, as well as the reasonable
attorneys’ fees of the prevailing party in accordance with the other provisions of this Agreement. 
 14.4 Liability of
Escrow Agent. The parties acknowledge that the Escrow Agent is acting solely as a stakeholder at their request and for their convenience, that the Escrow Agent shall not be deemed to be the agent of either of the parties, and that the Escrow
Agent shall not be liable to either of 

  
 23 

 
the parties for any action or omission on its part taken or made in good faith, and not in disregard of this Agreement, but shall be liable for its negligent acts and for any loss, cost or
expense incurred by Seller or Purchaser resulting from the Escrow Agent’s mistake of law respecting the Escrow Agent’s scope or nature of its duties. Seller and Purchaser shall jointly and severally indemnify and hold the Escrow Agent
harmless from and against all costs, claims and expenses, including reasonable attorneys’ fees, incurred in connection with the performance of the Escrow Agent’s duties hereunder, except with respect to actions or omissions taken or made
by the Escrow Agent in bad faith, in disregard of this Agreement or involving negligence on the part of the Escrow Agent. 
 ARTICLE 15

 MISCELLANEOUS 

15.1 Governing Law, Jurisdiction and Venue. 

15.1.1 This Agreement shall be governed by, and construed in accordance with, the substantive laws of the State of
Delaware, without regard to conflict of law principles. 
 15.1.2 Seller and Purchaser hereby (a) irrevocably
consent and submit to the jurisdiction of any Federal, state, county or municipal court sitting in the State of Delaware with respect to any action or proceeding brought therein by any party concerning any matters arising out of or in any way
relating to this Agreement; (b) irrevocably waive personal service of any summons and complaint and consents to the service upon it of process in any such action or proceeding by the mailing of such process to the affected party at the address
set forth herein; (c) irrevocably waive all objections as to venue and any and all rights they may have to seek a change of venue with respect to any such action or proceeding; (d) agrees that the laws of the State of Delaware shall govern
in any such action or proceeding and waives any defense to any action or proceeding granted by the laws of any other country or jurisdiction unless such defense is also allowed by the laws of the State of Delaware; and (e) agree that any
judgment rendered against it in any such action or proceeding shall be conclusive and may be enforced in any jurisdiction by suit on the judgment or in any other manner provided by law. 

15.2 Further Assurances. In addition to the obligations required to be performed hereunder by Seller and Purchaser at or prior to the
Closing, each party, from and after the Closing, shall execute, acknowledge and/or deliver such other instruments, as may reasonably be requested in order to effectuate the purposes of this Agreement; provided, however, neither party shall be
required to execute, acknowledge or deliver any instrument which would or might impose upon such party any additional liability or obligation (beyond that imposed upon it under the documents delivered by such party at the Closing and the other
provisions of this Agreement which survive the Closing). 
 15.3 Successors. All of the provisions of this Agreement and of any of
the documents and instruments executed in connection herewith shall apply to and be binding upon, and inure to the benefit of Seller and Purchaser, their successors and permitted assigns. 

15.4 No Third Party Beneficiary. This Agreement and each of the provisions hereof are solely for the benefit of Purchaser and Seller,
their successors and permitted assigns. No provisions of this Agreement, or of any of the documents and instruments executed in connection herewith, shall be construed as creating in any Person other than Purchaser and Seller, their successors and
permitted assigns any rights of any nature whatsoever. 

  
 24 

 15.5 Notices. All notices, demands, requests and other communications required hereunder
shall be in writing and shall be deemed to have been given: (a) upon delivery, if personally delivered; (b) one (1) Business Day after deposit with a nationally recognized overnight delivery service marked for delivery on the next
Business Day, or (c) upon delivery if sent by facsimile with electronic confirmation and additionally sent by one of the methods described in clauses (a), or (b) hereinabove, in each case addressed to the party for whom it is intended at
its address hereinafter set forth: 
 If to Seller: 

CRP/MHI Holdings, L.L.C. 
 c/o The
Carlyle Group 
 1001 Pennsylvania Avenue, NW 

Washington, D.C. 20004-2505 

Attn: Thad Paul 
 Telephone:
202-729-5373 
 Email: Thad.paul@carlyle.com 

With a copy to: 
 Mayer Brown LLP

 71 South Wacker Drive 

Chicago, IL 60606 
 Attn: Jade
Newburn 
 Telephone: 312-701-8985 

Email: jnewburn@mayerbrown.com 

If to Purchaser: 
 MHI Hospitality
TRS II, LLC 
 MHI Hotel Investments Holdings LLC 

c/o Sotherly Hotels L.P. 
 410
West Francis Street 
 Williamsburg, Virginia 23185 

Attn: David R. Folsom 
 Facsimile:
(757) 564-8801 
 Email: davidfolsom@sotherlyhotels.com 

with a copy to: 
 Baker &
McKenzie LLP 
 815 Connecticut Avenue, NW 

Washington, DC 20006 
 Attn:
Thomas J. Egan, Jr. 
 Facsimile: (202) 416-6955 

Email: thomas.egan@bakermckenzie.com 
 or at such
other address in the United States of America as may be designated by either of the parties in a written notice given in accordance with the provisions of this Section. The attorney for any party may send notices on that party’s behalf. 

15.6 Entire Agreement. This Agreement, together with the documents and instruments executed and delivered in connection herewith, sets
forth the entire agreement between Purchaser and 

  
 25 

 
Seller relating to the transactions contemplated hereby and all other prior or contemporaneous agreements, understandings, representations or statements, oral or written, relating directly to
Seller, the Owner Parties, the Lessee Parties, the Property and Purchaser are superseded hereby. 
 15.7 Severability. If any
provision in this Agreement is found by a court of competent jurisdiction to be in violation of any Applicable Law, and if such court should declare such provision of this Agreement to be unlawful, void, illegal or unenforceable in any respect, the
remainder of this Agreement shall be construed as if such unlawful, void, illegal or unenforceable provision were not contained herein, and the rights, obligations and interests of the parties hereto under the remainder of this Agreement shall
continue in full force and effect undisturbed and unmodified in any way; provided that the deletion of any provision so held to be unlawful, void, illegal, or unenforceable will not materially and adversely effect the expected benefit of any party
to this Agreement. 
 15.8 Modification. This Agreement and the terms hereof may not be changed, waived, modified, supplemented,
canceled, discharged or terminated orally, but only by an instrument or instruments in writing executed and delivered by Purchaser and Seller. 

15.9 Waiver of Trial by Jury. EACH PARTY HEREBY WAIVES, IRREVOCABLY AND UNCONDITIONALLY, TRIAL BY JURY IN ANY ACTION BROUGHT ON, UNDER
OR BY VIRTUE OF OR RELATING IN ANY WAY TO THIS AGREEMENT OR ANY OF THE DOCUMENTS EXECUTED IN CONNECTION HEREWITH, THE TARGET INTEREST, THE OWNER PARTIES, THE LESSEE PARTIES, THE PROPERTY, OR ANY CLAIMS, DEFENSES, RIGHTS OF SET-OFF OR OTHER ACTIONS
OF SELLER OR PURCHASER PERTAINING HERETO OR TO ANY OF THE FOREGOING. 
 15.10 No Recording. Neither this Agreement nor any memorandum
hereof shall be recorded. Each party hereby agrees to indemnify and hold harmless the others for all liabilities, losses, damages, liens, suits, claims, costs and expenses (including reasonable attorneys’ fees) incurred by the other by reason
of a breach of the foregoing covenant. 
 15.11 Counterparts; Facsimile Signature; Headings. This Agreement may be executed in
several counterparts, each of which shall be deemed an original, but such counterparts shall together constitute but one and the same Agreement. In the event that any signature to this Agreement is delivered by facsimile transmission or in portable
document format, such signature shall create a valid binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such signature were the original thereof. The Article and
Section headings in this Agreement are inserted for convenience of reference only and shall not constitute a part hereof. 
 15.12 No
Waiver. Neither the failure of either party to exercise any power given such party hereunder or to insist upon strict compliance by the other party with its obligations hereunder, nor any custom or practice of the parties at variance with the
terms hereof shall constitute a waiver of either party’s right to demand exact compliance with the terms hereof. 
 15.13 Time of
Essence. Time shall be of the essence with respect to this Agreement and the covenants and obligations of the parties hereunder. 

15.14 Attorneys’ Fees. In the event that either party hereto shall commence litigation against the other in connection with this
Agreement and/or the enforcement thereof, the losing party in such action shall reimburse the attorneys’ fees and disbursements of the prevailing party in such action. 

  
 26 

 15.15 Brokers. Seller represents and warrants to Purchaser, that Seller has not dealt with
in any manner, or engaged any broker or finder, in connection with any of the transactions contemplated by this Agreement, other than Existing Broker (who was engaged by Owner). Purchaser represents and warrants to Seller, that Purchaser has not
dealt with in any manner, or engaged any broker or finder, in connection with any of the transactions contemplated by this Agreement, other than Existing Broker (who was engaged by Owner). If the Closing occurs, Existing Broker shall be paid in
accordance with Section 10.1 and Section 10.2. In the event of any claims for additional brokers’ or finders’ fees or commissions in connection with the negotiation, execution or consummation of this Agreement, then Purchaser
shall indemnify, save harmless and defend Seller from and against such claims if they shall be based upon any statement or representation or agreement by Purchaser, and Seller shall indemnify, save harmless and defend Purchaser if such claims shall
be based upon any statement, representation or agreement made by Seller. This Section 15.15 shall survive the termination of this Agreement for any reason. 

[Execution Page(s) Follow] 

  
 27 

 IN WITNESS WHEREOF, this Agreement has been entered into as of the Effective Date. 

 

			
	 PURCHASER:
  

MHI Hotel Investments Holdings LLC,
 a Delaware limited liability
company
  

	By:		         /s/ David R. Folsom

	Name:		                 David R.
Folsom

	Its:		
                Manager

	
	 MHI Hospitality TRS II, LLC,a Delaware limited liability company

 

	 By:
		         /s/ David R. Folsom

	 Name:
		                 David R.
Folsom

	 Its:
		
                Manager

  
 28 

 IN WITNESS WHEREOF, this Agreement has been entered into as of the Effective Date. 

 

			
	 SELLER:

	
	 CRP/MHI Holdings, L.L.C.,

	 a Delaware limited liability company

		
	 By:
		         /s/ Thaddeus Paul

	 Name:
		                 Thaddeus
Paul

	 Its:
		                 Vice
President

 JOINDER OF ESCROW AGENT 

Escrow Agent has executed this Agreement in order to confirm that Escrow Agent shall hold the Earnest Money in escrow, and shall disburse the
Earnest Money pursuant to the provisions of this Agreement. 
  

							
					 First American Title Insurance Company

				
	 Date: June 19, 2015
				By:		         /s/ Joshua Slan

					Name:		                 Joshua
Slan

					Its:		
                Counsel

 Exhibit A 

Form of Membership Interest Transfer Agreement 

MEMBERSHIP INTEREST TRANSFER AGREEMENT 

THIS MEMBERSHIP INTEREST TRANSFER AGREEMENT (this “Agreement”) is entered into as of
                    , 2015 (the “Effective Date”), by and between CRP/MHI HOLDINGS, L.L.C., a Delaware limited liability company
(“Assignor”), and MHI Hospitality TRS II, LLC, a Delaware limited liability company (“MHI Hospitality”) and MHI Hotel Investments Holdings LLC (“MHI Hotel Investments” and together with MHI
Hospitality, “Assignee”). 
 WITNESSETH 

WHEREAS, as of the date hereof, Assignor is (i) a member of, and holder of a seventy-five percent (75.0%) Membership Interest (as
defined in the Owner Operating Agreement) (the “Owner Interest”) in MHI/Carlyle Hotel Investment Program I, L.L.C. (“Hotel Investment Program”), which Owner Interest represents Assignor’s entire interest in
Hotel Investment Program, and (ii) a member of, and holder of a seventy-five percent (75.0%) Membership Interest (as defined in the Lessee Operating Agreement) (the “Lessee Interest”, and together with the Owner Interest,
the “Target Interest”) in, MHI/Carlyle Hotel Lessee Program I, L.L.C. (“Hotel Lessee Program”; and together with Hotel Investment Program, the “Companies”), which Lessee Interest represents
Assignor’s entire interest in Hotel Lessee Program; 
 WHEREAS, Assignor and MHI Hotel Investments are parties to that certain Limited
Liability Company Agreement of MHI/Carlyle Hotel Investment Program I, L.L.C. dated as of May 15, 2007 (the “Owner Operating Agreement”); 

WHEREAS, Assignor and MHI Hospitality are parties to that certain Limited Liability Company Agreement of MHI/Carlyle Lessee Program I, L.L.C.
dated as of May 15, 2007 (the “Lessee Operating Agreement”, and together with the Owner Operating Agreement, the “Operating Agreements”); 

WHEREAS, Assignor, pursuant to the applicable provisions of the Operating Agreements, wishes to assign, transfer and convey to Assignee, and
Assignee desires to acquire from Assignor, all of Assignor’s right, title and interest in and to the Target Interest on the terms and conditions set forth herein; and 

WHEREAS, Assignor desires to withdraw from the Companies as a member of the Companies and Assignee desires to be admitted to the Companies as
a substitute member of each Company. 
 NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows: 
 1. Capitalized terms used but not defined herein shall have the meanings given to them
in the Sale Agreement (defined below). 
 2. Assignor does hereby absolutely, irrevocably and unconditionally convey, transfer and assign
unto Assignee, without recourse, representation or warranty (other than the representations and warranties contained in that certain Purchase and Sale Agreement (the “Sale Agreement”) dated June
                    , 2015, between Assignor and Assignee, all of which are restated as of the date hereof and shall survive this

 
Agreement in accordance with the terms of the Sale Agreement), the Target Interest such that immediately following such conveyance, transfer and assignment, Assignee will be the owner and holder
of the Target Interest, together with all benefits, rights, advantages, entitlements and interests appurtenant thereto or arising therefrom. 

3. Notwithstanding any provision to the contrary in the Operating Agreements, contemporaneously with the assignment described in
Section 2 of this Agreement, Assignee shall be admitted to each Company as a substitute member. Assignee does hereby assume and agree to perform, all of the duties and obligations of Assignor (a) as the owner and holder of the Target
Interest under and pursuant to the Operating Agreements and (b) to the extent otherwise relating or appurtenant to the ownership of the Target Interest. 

4. ASSIGNEE, ON BEHALF OF ITSELF, ITS AFFILIATES, THE OWNER PARTIES AND THE LESSEE PARTIES (COLLECTIVELY, THE “ASSIGNEE RELEASING
PARTIES”), FULLY, FINALLY AND IRREVOCABLY AND UNCONDITIONALLY RELEASES EACH OF ASSIGNOR AND ITS AFFILIATES, AND EACH OF THEIR PAST AND PRESENT MEMBERS, PARTNERS, LIMITED PARTNERS, GENERAL PARTNERS, MANAGERS, TRUSTEES, OWNERS, SUBSIDIARIES,
OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES, AGENTS, SERVANTS, ATTORNEYS, INSURERS, AND OTHER REPRESENTATIVES AND ALL HEIRS, EXECUTORS, ADMINISTRATORS, PREDECESSORS, SUCCESSORS, AND ASSIGNS OF THE FOREGOING (COLLECTIVELY, THE “ASSIGNOR
RELEASED PARTIES”), FROM AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, RIGHTS, CLAIMS, CAUSES OF ACTION AND DEMANDS AT LAW OR IN EQUITY, CONTROVERSIES, DAMAGE, COSTS, LOSSES AND EXPENSES WHETHER KNOWN OR UNKNOWN AT THE TIME OF THIS
AGREEMENT, WHICH ASSIGNEE OR ANY OF SUCH PARTIES HAS OR MAY HAVE IN THE FUTURE, ARISING OUT OF THE PROPERTY, THE TARGET INTEREST, THE LICENSE AGREEMENT, THE MANAGEMENT AGREEMENT, THE ORGANIZATIONAL DOCUMENTS OF THE LESSEE PARTIES AND THE OWNER
PARTIES, OR RELATING TO THE PROPERTY, THE PHYSICAL, ENVIRONMENTAL, ECONOMIC OR LEGAL CONDITION OF THE PROPERTY AND THE PROSPECTS, FINANCIAL CONDITION, OPERATION OR RESULTS OF OPERATIONS OF THE PROPERTY OR THE TARGET INTEREST, INCLUDING, WITHOUT
LIMITATION, ALL CLAIMS IN TORT OR CONTRACT, ALL CLAIMS UNDER A WARRANTY OF ANY KIND (WHETHER EXPRESS, IMPLIED, OR, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, STATUTORY) AND INCLUDING ANY WARRANTY OF MERCHANTABILITY, HABITABILITY OR GOOD AND
WORKMANLIKE CONSTRUCTION AND WARRANTIES OF FITNESS FOR USE OR ACCEPTABILITY FOR THE PURPOSE INTENDED, AND ALL CLAIMS FOR INDEMNIFICATION OR CONTRIBUTION ARISING UNDER THE COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION, AND LIABILITY ACT (42
U.S.C. SECTION 9601, ET SEQ.) OR ALL SIMILAR FEDERAL, STATE OR LOCAL STATUTE, RULE OR REGULATION, AND ANY OTHER BASIS FOR RECOVERY OR REIMBURSEMENT (INCLUDING NEGLIGENCE OR STRICT LIABILITY, AND ALL CLAIMS RELATING TO EMPLOYEES) (COLLECTIVELY, THE
“CLAIMS”), EXCEPT AS PROVIDED IN THE SALE AGREEMENT. ASSIGNEE AND ALL ASSIGNEE RELEASING PARTIES, UPON CLOSING, SHALL BE DEEMED TO HAVE WAIVED, EXONERATED, RELINQUISHED AND RELEASED ASSIGNOR AND ALL ASSIGNOR RELEASED PARTIES FROM
AND AGAINST ANY AND ALL MATTERS AFFECTING ASSIGNOR AND ALL OTHER ASSIGNOR RELEASED PARTIES AND/OR THE PROPERTY, EXCEPT AS PROVIDED IN THE SALE AGREEMENT. IN THIS CONNECTION AND TO THE GREATEST EXTENT PERMITTED BY LAW, ASSIGNEE 

 
HEREBY AGREES, REPRESENTS AND WARRANTS THAT ASSIGNEE REALIZES AND ACKNOWLEDGES THAT FACTUAL MATTERS NOW KNOWN OR UNKNOWN TO IT MAY HAVE GIVEN OR MAY HEREAFTER GIVE RISE TO CLAIMS WHICH ARE
PRESENTLY UNKNOWN, UNANTICIPATED AND UNSUSPECTED, AND ASSIGNEE FURTHER AGREES, REPRESENTS AND WARRANTS THAT THE WAIVERS AND RELEASES HEREIN AND THE PROVISIONS OF THIS SECTION 4 HAVE BEEN NEGOTIATED AND AGREED UPON IN LIGHT OF THAT REALIZATION
AND THAT ASSIGNEE (AND ALL OF THE ASSIGNEE RELEASING PARTIES) NEVERTHELESS HEREBY INTENDS TO RELEASE, DISCHARGE AND ACQUIT ASSIGNOR AND ALL OF THE ASSIGNOR RELEASED PARTIES FROM ANY SUCH UNKNOWN CLAIMS (OTHER THAN CLAIMS ARISING UNDER THE SALE
AGREEMENT). ASSIGNOR HAS GIVEN ASSIGNEE AND THE ASSIGNEE RELEASING PARTIES MATERIAL CONCESSIONS REGARDING THIS TRANSACTION IN EXCHANGE FOR ASSIGNEE AGREEING TO THE PROVISIONS OF THIS SECTION 4. 

5. ASSIGNOR, ON BEHALF OF ITSELF AND ITS AFFILIATES (COLLECTIVELY, THE “ASSIGNOR RELEASING PARTIES”) FULLY, FINALLY AND IRREVOCABLY
AND UNCONDITIONALLY RELEASES ASSIGNEE, THE OWNER PARTIES, THE LESSEE PARTIES AND THEIR AFFILIATES, AND EACH OF THEIR PAST AND PRESENT MEMBERS, PARTNERS, LIMITED PARTNERS, GENERAL PARTNERS, MANAGERS, TRUSTEES, OWNERS, SUBSIDIARIES, OFFICERS,
DIRECTORS, SHAREHOLDERS, EMPLOYEES, AGENTS, SERVANTS, ATTORNEYS, INSURERS, AND OTHER REPRESENTATIVES AND ALL HEIRS, EXECUTORS, ADMINISTRATORS, PREDECESSORS, SUCCESSORS, AND ASSIGNS OF THE FOREGOING (COLLECTIVELY, THE “ASSIGNEE RELEASED
PARTIES”), FROM AND AGAINST ANY AND ALL CLAIMS, EXCEPT AS PROVIDED IN THE SALE AGREEMENT. ASSIGNOR AND THE ASSIGNOR RELEASING PARTIES, UPON CLOSING, SHALL BE DEEMED TO HAVE WAIVED, EXONERATED, RELINQUISHED AND RELEASED ASSIGNEE AND ALL OTHER
ASSIGNEE RELEASED PARTIES FROM AND AGAINST ANY AND ALL MATTERS AFFECTING ASSIGNEE AND ALL OTHER ASSIGNEE RELEASED PARTIES AND/OR THE PROPERTY, EXCEPT AS PROVIDED IN THE SALE AGREEMENT. IN THIS CONNECTION AND TO THE GREATEST EXTENT PERMITTED BY LAW,
ASSIGNOR HEREBY AGREES, REPRESENTS AND WARRANTS THAT ASSIGNEE REALIZES AND ACKNOWLEDGES THAT FACTUAL MATTERS NOW KNOWN OR UNKNOWN TO IT MAY HAVE GIVEN OR MAY HEREAFTER GIVE RISE TO CLAIMS WHICH ARE PRESENTLY UNKNOWN, UNANTICIPATED AND UNSUSPECTED,
AND ASSIGNOR FURTHER AGREES, REPRESENTS AND WARRANTS THAT THE WAIVERS AND RELEASES HEREIN AND THE PROVISIONS OF THIS SECTION 5 HAVE BEEN NEGOTIATED AND AGREED UPON IN LIGHT OF THAT REALIZATION AND THAT ASSIGNOR (AND ALL OF THE ASSIGNOR
RELEASING PARTIES) NEVERTHELESS HEREBY INTENDS TO RELEASE, DISCHARGE AND ACQUIT ASSIGNEE AND ALL OF THE ASSIGNEE RELEASED PARTIES FROM ANY SUCH UNKNOWN CLAIMS (OTHER THAN CLAIMS ARISING UNDER THE SALE AGREEMENT). ASSIGNEE HAS GIVEN ASSIGNOR AND
THE ASSIGNOR RELEASING PARTIES MATERIAL CONCESSIONS REGARDING THIS TRANSACTION IN EXCHANGE FOR ASSIGNOR AGREEING TO THE PROVISIONS OF THIS SECTION 5. 

6. Notwithstanding any provision in the Operating Agreements to the contrary, immediately following the admission of Assignee as a substitute
member of each Company, Assignor shall, and hereby does, withdraw from each Company as a member of each Company, and shall thereupon cease to be a member of the Companies. 

 7. This Agreement shall be construed exclusively in accordance with and governed by the internal
laws of the State of Delaware (without regard to principles of conflicts of laws). 
 8. This Agreement is executed by, and shall be binding
upon and inure to the benefit of, the parties hereto and each of their respective successors and assigns. None of the provisions of this Agreement shall be for the benefit of or enforceable by any other person. 

9. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and together shall be deemed one
and the same document. 
 [SIGNATURE PAGE FOLLOWS] 

 IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the Effective Date. 

 

			
	 ASSIGNOR:
  

CRP/MHI Holdings, L.L.C.,
 a Delaware limited liability
company
  

			
	By:		  

			
	Name:		  

			
	Its:		  

			
	  
 ASSIGNEE:

 
 MHI Hotel Investments Holdings LLC,

a Delaware limited liability company

 

			
	By:		  

			
	Name:		  

			
	Its:		  

			
	  
 MHI Hospitality TRS II, LLC,

a Delaware limited liability company

 

			
	By:		  

			
	Name:		  

			
	Its:2015-06-22 8K Exhibit 101

			

					

						 

					

					

						 

					

					

						 

					

					

						 

				
	

					

						 

					

					

						 

					

					

						 

					

					

						Exhibit 10.1

				

		

			 

		

		
			VERMILLION, INC.
		

		
			SECOND AMENDED AND RESTATED 2010 STOCK INCENTIVE PLAN
		

		
			————————————————
		

		
			Plan Document
		

		
			————————————————
		

		
			Vermillion, Inc. (the “Company”) hereby establishes and adopts the following Second Amended and Restated 2010 Stock Incentive Plan (the “Plan”), effective upon approval by the Company’s stockholders at the Company’s 2015 Annual Meeting of Stockholders (the “Effective Date”).
		

		
			1.Introduction.
		

		
			(a) Purpose. The purposes of the Plan are: (i) to enhance the Company’s ability to attract highly qualified personnel; (ii) to strengthen its retention capabilities; (iii) to enhance the long-term performance and competitiveness of the Company; and (iv) to align the interests of Plan participants with those of the Company’s stockholders. Effective Date. This Plan, as amended and restated, shall be submitted to the stockholders of the Company for approval and, if approved, shall become effective as of the Effective Date.
		

		
			(b) Definitions. Terms in the Plan and any Appendix that begin with an initial capital letter have the defined meaning set forth in Appendix I or elsewhere in this Plan, in either case unless the context of their use clearly indicates a different meaning.
		

		
			(c) Effect on Other Plans, Awards, and Arrangements. This Plan is not intended to affect and shall not affect any stock options, equity-based compensation, or other benefits that the Company or its Affiliates may have provided, or may separately provide in the future, pursuant to any agreement, plan, or program that is independent of this Plan.
		

		
			(d) Appendices. Incorporated by reference and thereby part of the Plan are the definitions set forth in Appendix I hereof.
		

		
			2.Types of Awards. The Plan permits the granting of the following types of Awards according to the Sections of the Plan listed here:
		

		
			Section 5Stock Options
		

		
			Section 6Share Appreciation Rights (“SARs”)
		

		
			Section 7Restricted Shares, Restricted Share Units (“RSUs”), and Unrestricted Shares
		

		
			Section 8Deferred Share Units (“DSUs”)
		

		
			Section 9Performance and Cash-settled Awards
		

		
			Section 10Dividend Equivalent Rights
		

		
			3.Shares Available for Awards.
		

		
			(a) Number of Shares. Subject to Section 13 below, a total of 8,122,983 Shares shall be available for issuance under the Plan. The Shares deliverable pursuant to Awards shall be authorized but unissued Shares, or Shares that the Company otherwise holds in treasury or in trust.
		

		
			(b) Replenishment; Counting of Shares. For purposes of the limitation under Section 3(a), to the extent that Shares underlying any Plan Awards are not issued or delivered by reason of (i) forfeiture, cancellation, expiration or termination (other than by exercise) or (ii) the settlement of such Shares in cash, then such Shares shall be added back to the Shares available for issuance under the Plan. Notwithstanding the foregoing, the following Shares shall not be added to the Shares authorized for grant under the Plan: (i) Shares that were subject to an Option or an SAR and were not issued or delivered upon the net settlement or net exercise of such Option or SAR, (ii) Shares delivered to or withheld by the Company to pay purchase price or the withholding taxes related to an Award or (iii) Shares 
		

		 

 

		

			 

		

		repurchased by the Company on the open market with the proceeds of an Option exercise. Further, and to the extent permitted under Applicable Law, the maximum number of Shares available for delivery under the Plan shall not be reduced by any Shares issued under the Plan through the settlement, assumption, or substitution of outstanding awards or obligations to grant future awards as a condition of the Company’s or an Affiliate’s acquiring another entity.
		

		
			(c) ISO Share Reserve. The number of Shares that are available for ISO Awards shall not exceed the total number set forth in Section 3(a) above (as adjusted pursuant to Section 13 of the Plan, and as determined in accordance with Code Section 422).
		

		
			4.Eligibility.
		

		
			(a) General Rule. Subject to the express provisions of the Plan, the Committee shall determine from the class of Eligible Persons those Persons to whom Awards may be granted. Each Award shall be evidenced by an Award Agreement that sets forth its Grant Date and all other terms and conditions of the Award, that is signed on behalf of the Company (or delivered by an authorized agent through an electronic medium), and that, if required by the Committee, is signed by the Eligible Person as an acceptance of the Award. The grant of an Award shall not obligate the Company or any Affiliate to continue the employment or service of any Eligible Person, or to provide any future Awards or other remuneration at any time thereafter.
		

		
			(b) Option and SAR Limits per Person. Subject to adjustment pursuant to Section 13, the maximum number of Shares with respect to which Options or SARs, or a combination thereof, may be granted during any fiscal year of the Company to any person shall be 1,000,000.
		

		
			5.Stock Options.
		

		
			(a) Grants. Subject to the special rules for ISOs set forth in the next paragraph, the Committee may grant Options to Eligible Persons pursuant to Award Agreements setting forth terms and conditions that are not inconsistent with the Plan, that may be immediately exercisable or that may become exercisable in whole or in part based on future events or conditions, that may include vesting or other requirements for the right to exercise the Option, and that may differ for any reason between Eligible Persons or classes of Eligible Persons, provided in all instances that:
		

		
			(i)  the exercise price for Shares subject to purchase through exercise of an Option shall not be less than 100% of the Fair Market Value of the underlying Shares on the Grant Date; and
		

		
			(ii)  no Option shall be exercisable for a term ending more than ten years after its Grant Date.
		

		
			(b) Special ISO Provisions. The following provisions shall control any grants of Options that are denominated as ISOs.
		

		
			(i)  Eligibility. The Committee may grant ISOs only to Employees (including officers who are Employees) of the Company or an Affiliate that is a “parent corporation” or “subsidiary corporation” within the meaning of Code Section 424.
		

		
			(ii)  Documentation. Each Option that is intended to be an ISO must be designated in the Award Agreement as an ISO, provided that any Option designated as an ISO will be a Non-ISO to the extent the Option fails to meet the requirements of Code Section 422. In the case of an ISO, the Committee shall determine on the Grant Date the acceptable methods of paying the exercise price for Shares, and it shall be included in the applicable Award Agreement.
		

		
			(iii)  $100,000 Limit. To the extent that the aggregate Fair Market Value of Shares with respect to which ISOs first become exercisable by a Participant in any calendar year (under this Plan and any other plan of the Company or any Affiliate) exceeds U.S. $100,000, such excess Options shall be treated as Non-ISOs. For purposes of determining whether the U.S. $100,000 limit is exceeded, the Fair Market Value of 
		

		 

 

		

			 

		

		the Shares subject to an ISO shall be determined as of the Grant Date. In reducing the number of Options treated as ISOs to meet the U.S. $100,000 limit, the most recently granted Options shall be reduced first. In the event that Code Section 422 is amended to alter the limitation set forth therein, the limitation of this paragraph shall be automatically adjusted accordingly.
		

		
			(iv)  Grants to 10% Holders. In the case of an ISO granted to an Employee who is a Ten Percent Holder on the Grant Date, the ISO’s term shall not exceed five years from the Grant Date, and the exercise price shall be at least 110% of the Fair Market Value of the underlying Shares on the Grant Date. In the event that Code Section 422 is amended to alter the limitations set forth therein, the limitations of this paragraph shall be automatically adjusted accordingly.
		

		
			(v)  Substitution of Options. In the event the Company or an Affiliate acquires (whether by purchase, merger, or otherwise) all or substantially all of outstanding capital stock or assets of another corporation or in the event of any reorganization or other transaction qualifying under Code Section 424, the Committee may, in accordance with the provisions of that Section, substitute ISOs for ISOs previously granted under the plan of the acquired company provided (A) the excess of the aggregate Fair Market Value of the Shares subject to an ISO immediately after the substitution over the aggregate exercise price of such shares is not more than the similar excess immediately before such substitution, and (B) the new ISO does not give additional benefits to the Participant, including any extension of the exercise period.
		

		
			(vi)  Notice of Disqualifying Dispositions. By executing an ISO Award Agreement, each Participant agrees to notify the Company in writing immediately after the Participant sells, transfers or otherwise disposes of any Shares acquired through exercise of the ISO, if such disposition occurs within the earlier of (A) two years of the Grant Date, or (B) one year after the exercise of the ISO being exercised. Each Participant further agrees to provide any information about a disposition of Shares as may be requested by the Company to assist it in complying with any applicable tax laws.
		

		
			(c) Method of Exercise. Each Option may be exercised, in whole or in part (provided that the Company shall not be required to issue fractional shares) at any time and from time to time prior to its expiration, but only pursuant to the terms of the applicable Award Agreement, and subject to the times, circumstances and conditions for exercise contained in the applicable Award Agreement. Exercise shall occur by delivery of both written notice of exercise to the secretary of the Company, and payment of the full exercise price for the Shares being purchased. The methods of payment that the Committee may in its discretion accept or commit to accept in an Award Agreement include:
		

		
			(i)  cash or check payable to the Company (in U.S. dollars);
		

		
			(ii)  other Shares that (A) are owned by the Participant who is purchasing Shares pursuant to an Option, (B) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which the Option is being exercised, (C) are all, at the time of such surrender, free and clear of any and all claims, pledges, liens and encumbrances, or any restrictions which would in any manner restrict the transfer of such Shares to or by the Company (other than such restrictions as may have existed prior to an issuance of such Shares by the Company to such Participant), and (D) are duly endorsed for transfer to the Company;
		

		
			(iii)  a net exercise by surrendering to the Company Shares otherwise receivable upon exercise of the Option;
		

		
			(iv)  a cashless exercise program that the Committee may approve, from time to time in its discretion, pursuant to which a Participant may elect to concurrently provide irrevocable instructions (A) to such Participant’s broker or dealer to effect the immediate sale of the purchased Shares and remit to the Company, out of the sale proceeds available on the settlement date, sufficient funds to cover the exercise price of the Option plus all Withholding Taxes, and (B) to the Company to deliver the certificates for the purchased Shares directly to such broker or dealer in order to complete the sale; or
		

		

		

		 

 

		

			 

		

		(v)  any combination of the foregoing methods of payment.
		

		
			The Company shall not be required to deliver Shares pursuant to the exercise of an Option until the Company has received sufficient funds to cover the full exercise price due and all applicable Withholding Taxes required by reason of such exercise.
		

		
			Notwithstanding any other provision of the Plan to the contrary, no Participant who is a Director or an “executive officer” of the Company within the meaning of Section 13(k) of the Exchange Act shall be permitted to make payment with respect to any Awards granted under the Plan, or continue any extension of credit with respect to such payment with a loan from the Company or a loan arranged by the Company in violation of Section 13(k) of the Exchange Act.
		

		
			(d) Exercise of an Unvested Option. The Committee in its sole discretion may allow a Participant to exercise an unvested Option, in which case the Shares then issued shall be Restricted Shares having analogous vesting restrictions to the unvested Option.
		

		
			(e) Termination of Continuous Service. The Committee may establish and set forth in the applicable Award Agreement the terms and conditions on which an Option shall remain exercisable, if at all, following termination of a Participant’s Continuous Service. The Committee may waive or modify these provisions at any time. To the extent that a Participant is not entitled to exercise an Option at the date of his or her termination of Continuous Service, or if the Participant (or other person entitled to exercise the Option) does not exercise the Option to the extent so entitled within the time specified in the Award Agreement or below (as applicable), the Option shall terminate and the Shares underlying the unexercised portion of the Option shall revert to the Plan and become available for future Awards.
		

		
			The following provisions shall apply to the extent an Award Agreement does not specify the terms and conditions upon which an Option shall terminate when there is a termination of a Participant’s Continuous Service:
		

			
					
						 

					
					
						 

				
	
					
						Reason for terminating Continuous Service

					
					
						Option Termination Date

				
	
					
						(I) By the Company for Cause, or what would have been Cause if the Company had known all of the relevant facts.

					
					
						Termination of the Participant’s Continuous Service, or when Cause first existed if earlier.

				
	
					
						(II) Disability of the Participant.

					
					
						Within one year after termination of the Participant’s Continuous Service.

				
	
					
						(III) Retirement of the Participant after age 65 with five years or more of Continuous Service.

					
					
						Within one year after termination of the Participant’s Continuous Service.

				
	
					
						(IV) Death of the Participant during Continuous Service or within 90 days thereafter.

					
					
						Within one year after termination of the Participant’s Continuous Service.

				
	
					
						(V) Other than due to Cause or the Participant’s Disability, Retirement, or Death.

					
					
						Within 90 days after termination of the Participant’s Continuous Service.

				

		
			 
		

		
			If there is a Securities and Exchange Commission blackout period (or a Committee-imposed blackout period) that prohibits the buying or selling of Shares during any part of the ten day period before the expiration of any Option based on the termination of a Participant’s Continuous Service (as described above), the period for exercising the Options shall be extended until ten days beyond when such blackout period ends. Notwithstanding any provision hereof or within an Award Agreement, no Option shall ever be exercisable after the expiration date of its original term as set forth in the Award Agreement.
		

		

		

		 

 

		

			 

		

		6.SARs.
		

		
			(a) Grants. The Committee may grant SARs to Eligible Persons pursuant to Award Agreements setting forth terms and conditions that are not inconsistent with the Plan; provided that:
		

		
			(i)  the exercise price for the Shares subject to each SAR shall not be less than 100% of the Fair Market Value of the underlying Shares on the Grant Date;
		

		
			(ii)  no SAR shall be exercisable for a term ending more than ten years after its Grant Date; and
		

		
			(iii)  each SAR shall, except to the extent an SAR Award Agreement provides otherwise, be subject to the provisions of Section 5(e) relating to the effect of a termination of Participant’s Continuous Service, with “SAR” being substituted for “Option.”
		

		
			(b) Settlement. Subject to the Plan’s terms, an SAR shall entitle the Participant, upon exercise of the SAR, to receive Shares having a Fair Market Value on the date of exercise equal to the product of the number of Shares as to which the SAR is being exercised, and the excess of (i) the Fair Market Value, on such date, of the Shares covered by the exercised SAR, over (ii) an exercise price designated in the SAR Award Agreement. Notwithstanding the foregoing, an SAR Award Agreement may limit the total settlement value that the Participant will be entitled to receive upon the SAR’s exercise, and may provide for settlement either in cash or in any combination of cash or Shares that the Committee may authorize pursuant to an Award Agreement. If, on the date on which an SAR or portion thereof is to expire, the Fair Market Value exceeds the per Share exercise price of such SAR, then the SAR shall be deemed exercised and cancelled without any payment in settlement thereof; subject to any specific provision to the contrary within an Award Agreement.
		

		
			(c) SARs related to Options. The Committee may grant SARs either concurrently with the grant of an Option or with respect to an outstanding Option, in which case the SAR shall extend to all or a portion of the Shares covered by the related Option, and shall have an exercise price that is not less than the exercise price of the related Option. An SAR shall entitle the Participant who holds the related Option, upon exercise of the SAR and surrender of the related Option, or portion thereof, to the extent the SAR and related Option each were previously unexercised, to receive payment of an amount determined pursuant to Section 6(b) above. Any SAR granted in tandem with an ISO will contain such terms as may be required to comply with the provisions of Code Section 422.
		

		
			7.Restricted Shares, RSUs, and Unrestricted Share Awards.
		

		
			(a) Grant. The Committee may grant Restricted Share, RSU, or Unrestricted Share Awards to Eligible Persons, in all cases pursuant to Award Agreements setting forth terms and conditions that are not inconsistent with the Plan. The Committee shall establish as to each Restricted Share or RSU Award the number of Shares deliverable or subject to the Award (which number may be determined by a written formula), and the period or periods of time (the “Restriction Period”) at the end of which all or some restrictions specified in the Award Agreement shall lapse, and the Participant shall receive unrestricted Shares (or cash to the extent provided in the Award Agreement) in settlement of the Award. Such restrictions may include, without limitation, restrictions concerning voting rights and transferability, and such restrictions may lapse separately or in combination at such times and pursuant to such circumstances or based on such criteria as selected by the Committee, including, without limitation, criteria based on the Participant’s duration of employment, directorship or consultancy with the Company, individual, group, or divisional performance criteria, Company performance, or other criteria selection by the Committee. The Committee may make Restricted Share and RSU Awards with or without the requirement for payment of cash or other consideration. In addition, the Committee may grant Awards hereunder in the form of Unrestricted Shares which shall vest in full upon the Grant Date or such other date as the Committee may determine or which the Committee may issue pursuant to any program under which one or more Eligible Persons (selected by the Committee in its sole discretion) elect to pay for such Shares or to receive Unrestricted Shares in lieu of cash bonuses that would otherwise be paid.
		

		
			(b) Vesting and Forfeiture. The Committee shall set forth, in an Award Agreement granting Restricted Shares or RSUs, the terms and conditions under which the Participant’s interest in the Restricted Shares or the 
		

		 

 

		

			 

		

		Shares or cash subject to RSUs will become vested and non-forfeitable. Except as set forth in the applicable Award Agreement or as the Committee otherwise determines, upon termination of a Participant’s Continuous Service for any reason, the Participant shall forfeit his or her Restricted Shares and RSUs to the extent the Participant’s interest therein has not vested on or before such termination date; provided that if a Participant purchases Restricted Shares and forfeits them for any reason, the Company shall return the purchase price to the Participant to the extent either set forth in an Award Agreement or required by Applicable Law.
		

		
			(c) Certificates for Restricted Shares. Unless otherwise provided in an Award Agreement, the Company shall hold certificates representing Restricted Shares and dividends (whether in Shares or cash) that accrue with respect to them until the restrictions lapse, and the Participant shall provide the Company with appropriate stock powers endorsed in blank. The Participant’s failure to provide such stock powers within ten days after a written request from the Company shall entitle the Committee to unilaterally declare a forfeiture of all or some of the Participant’s Restricted Shares.
		

		
			(d) Section 83(b) Elections. A Participant may make an election under Code Section 83(b) (the “Section 83(b) Election”) with respect to Restricted Shares. A Participant who has received RSUs may, within ten days after receiving the RSU Award, provide the Committee with a written notice of his or her desire to make Section 83(b) Election with respect to the Shares subject to such RSUs. The Committee may in its discretion convert the Participant’s RSUs into Restricted Shares, on a one-for-one basis, in full satisfaction of the Participant’s RSU Award. The Participant may then make a Section 83(b) Election with respect to those Restricted Shares; provided that the Participant’s Section 83(b) Election will be invalid if not filed with the Company and the appropriate U.S. tax authorities within 30 days after the Grant Date of the RSUs replaced by the Restricted Shares.
		

		
			(e) Deferral Elections for RSUs. To the extent specifically provided in an Award Agreement, a Participant may irrevocably elect, in accordance with Section 8 below, to defer the receipt of all or a percentage of the Shares that would otherwise be transferred to the Participant both more than 12 months after the date of the Participant’s deferral election and upon the vesting of an RSU Award. If the Participant makes this election, the Company shall credit the Shares subject to the election, and any associated Shares attributable to Dividend Equivalent Rights attached to the Award, to a DSU account established pursuant to Section 8 below on the date such Shares would otherwise have been delivered to the Participant pursuant to this Section.
		

		
			(f) Issuance of Shares upon Vesting. As soon as practicable after vesting of a Participant’s Restricted Shares (or of the right to receive Shares underlying RSUs), the Company shall deliver to the Participant, free from vesting restrictions, one Share for each surrendered and vested Restricted Share (or deliver one Share free of the vesting restriction for each vested RSU), unless an Award Agreement provides otherwise and subject to Section 11 regarding Withholding Taxes. No fractional Shares shall be distributed, and cash shall be paid in lieu thereof.
		

		
			8.DSUs.
		

		
			(a) Elections to Defer. The Committee may make DSU awards to Eligible Persons pursuant to Award Agreements (regardless of whether or not there is a deferral of the Eligible Person’s compensation), and may permit select Eligible Persons to irrevocably elect, on a form provided by and acceptable to the Committee (the “Election Form”), to forego the receipt of cash or other compensation (including the Shares deliverable pursuant to any RSU Award) and in lieu thereof to have the Company credit to an internal Plan account a number of DSUs having a Fair Market Value equal to the Shares and other compensation deferred. These credits will be made at the end of each calendar quarter (or other period determined by the Committee) during which compensation is deferred. Notwithstanding the foregoing sentence, a Participant’s Election Form will be ineffective with respect to any compensation that the Participant earns before the date on which the Election Form takes effect. For any Participant who is subject to U.S. income taxation, the Committee shall only authorize deferral elections under this Section (i) pursuant to written procedures, and using written Election Forms, that satisfy the requirements of Code Section 409A, and (ii) only by Eligible Persons who are Directors, Consultants, or members of a select group of management or highly compensated Employees (within the meaning of ERISA).
		

		
			(b) Vesting. Unless an Award Agreement expressly provides otherwise, each Participant shall be 100% vested at all times in any Shares subject to DSUs.
		

		

		

		 

 

		

			 

		

		(c) Issuances of Shares. Unless an Award Agreement expressly provides otherwise, the Company shall settle a Participant’s DSU Award, by delivering one Share for each DSU, in five substantially equal annual installments that are issued before the last day of each of the five calendar years that end after the date on which the Participant’s Continuous Service ends for any reason, subject to –
		

		
			(i)  the Participant’s right to elect a different form of distribution, only on a form provided by and acceptable to the Committee, that permits the Participant to select any combination of a lump sum and annual installments that are triggered by, and completed within ten years following, the last day of the Participant’s Continuous Service, and
		

		
			(ii)  the Company’s acceptance of the Participant’s distribution election form executed at the time the Participant elects to defer the receipt of cash or other compensation pursuant to Section 8(a), provided that the Participant may change a distribution election through any subsequent election that (A) the Participant delivers to the Company at least one year before the date on which distributions are otherwise scheduled to commence pursuant to the Participant’s initial distribution election, (B) such distribution election does not take effect until at least one year after the date it was executed by the Participant and (C) defers the commencement of distributions by at least five years from the originally scheduled distribution commencement date.
		

		
			Fractional shares shall not be issued, and instead shall be paid out in cash.
		

		
			(d) Emergency Withdrawals. In the event that a Participant suffers an unforeseeable emergency within the contemplation of this Section, the Participant may apply to the Committee for an immediate distribution of all or a portion of the Participant’s DSUs. The unforeseeable emergency must result from a sudden and unexpected illness or accident of the Participant, the Participant’s spouse, or a dependent (within the meaning of Code Section 152) of the Participant, casualty loss of the Participant’s property, or other similar extraordinary and unforeseeable conditions beyond the control of the Participant. The Committee shall, in its sole and absolute discretion, determine whether a Participant has a qualifying unforeseeable emergency, may require independent verification of the emergency, and may determine whether or not to provide the Participant with cash or Shares. Examples of purposes which are not considered unforeseeable emergencies include post-secondary school expenses or the desire to purchase a residence. In no event will a distribution be made to the extent the unforeseeable emergency could be relieved through reimbursement or compensation by insurance or otherwise, or by liquidation of the Participant’s nonessential assets to the extent such liquidation would not itself cause a severe financial hardship. The amount of any distribution hereunder shall be limited to the amount necessary to relieve the Participant’s unforeseeable emergency plus amounts necessary to pay taxes reasonably anticipated as a result of the distribution. The number of Shares subject to the Participant’s DSU Award shall be reduced by any Shares distributed to the Participant and by a number of Shares having a Fair Market Value on the date of the distribution equal to any cash paid to the Participant pursuant to this Section. For all DSUs granted to Participants who are U.S. taxpayers, the term “unforeseeable emergency” shall be interpreted in accordance with Code Section 409A.
		

		
			(e) Termination of Service. For purposes of this Section, a Participant’s “Continuous Service” shall only end when the Participant incurs a “separation from service” within the meaning of Treasury Regulations § 1.409A-1(h). A Participant shall be considered to have experienced a termination of Continuous Service when the facts and circumstances indicate that either (i) no further services will be performed for the Company or any Affiliate after a certain date, or (ii) that the level of bona fide services the Participant will perform after such date (whether as an Employee, Director, or Consultant) are reasonably expected to permanently decrease to no more than 50% of the average level of bona fide services performed by such Participant (whether as an Employee, Director, or Consultant) over the immediately preceding 36-month period (or full period of services to the Company and its Affiliates if the Participant has been providing such services for less than 36 months).
		

		
			9.Performance and Cash-Settled Awards.
		

		
			(a) Performance Units. Subject to the limitations set forth in paragraph (b) hereof, the Committee may in its discretion grant Performance Awards, including Performance Units to any Eligible Person, including Performance Unit Awards that (i) have substantially the same financial benefits and other terms and conditions as Options, SARs, 
		

		 

 

		

			 

		

		RSUs, or DSUs, but (ii) are settled only in cash. All Awards hereunder shall be made pursuant to Award Agreements setting forth terms and conditions that are not inconsistent with the Plan.
		

		
			(b) Performance Compensation Awards. Subject to the limitations set forth in this Section, the Committee may, at the time of grant of a Performance Unit, designate such Award as a “Performance Compensation Award” (payable in cash or Shares) in order that such Award constitutes, and has terms and conditions that are designed to qualify as, “qualified performance-based compensation” under Code Section 162(m). With respect to each such Performance Compensation Award, the Committee shall establish, in writing within the time required under Code Section 162(m), a “Performance Period,” “Performance Measure(s)”, and “Performance Formula(e)” (each such term being defined below). Once established for a Performance Period, the Performance Measure(s) and Performance Formula(e) shall not be amended or otherwise modified to the extent such amendment or modification would cause the compensation payable pursuant to the Award to fail to constitute qualified performance-based compensation under Code Section 162(m).
		

		
			A Participant shall be eligible to receive payment in respect of a Performance Compensation Award only to the extent that the Performance Measure(s) for such Award is achieved and the Performance Formula(e) as applied against such Performance Measure(s) determines that all or some portion of such Participant’s Award has been earned for the Performance Period. As soon as practicable after the close of each Performance Period, the Committee shall review and certify in writing whether, and to what extent, the Performance Measure(s) for the Performance Period have been achieved and, if so, determine and certify in writing the amount of the Performance Compensation Award to be paid to the Participant and, in so doing, may use negative discretion to decrease, but not increase, the amount of the Award otherwise payable to the Participant based upon such performance
		

		
			(c) Limitations on Awards. The maximum Performance Award and the maximum Performance Compensation Award that any one Participant may receive during any 12-month period during a Performance Period, without regard to time of vesting or exercisability, shall not together exceed 500,000 Shares, as adjusted pursuant to Section 13 below (or, for Performance Units to be settled in cash, U.S. $2,000,000.
		

		
			(d) Definitions.
		

		
			(i)  “Performance Formula” means, for a Performance Period, one or more objective formulas or standards established by the Committee for purposes of determining whether or the extent to which an Award has been earned based on the level of performance attained or to be attained with respect to one or more Performance Measure(s). Performance Formulae may vary from Performance Period to Performance Period and from Participant to Participant and may be established on a stand-alone basis, in tandem or in the alternative.
		

		
			(ii)  “Performance Measure” means one or more of the following selected by the Committee to measure Company, Affiliate, and/or business unit performance for a Performance Period, whether in absolute or relative terms (including, without limitation, terms relative to a peer group or index): earnings per share; sales or revenue; earnings before interest, and taxes (in total or on a per share basis); net income; returns on equity, assets, capital, or revenue; economic value added; working capital; total stockholder return; and product development, product market share, research, licensing, successful completion of clinical trials, submission of applications with the U.S. Food and Drug Administration (“FDA”) for new tests, receipt from the FDA of clearance for new tests, commercialization of new tests, litigation, human resources, information services, mergers, acquisitions, sales of assets of Affiliates or business units. Each such measure shall be, to the extent applicable, determined in accordance with generally accepted accounting principles as consistently applied by the Company (or such other standard applied by the Committee) and, if so determined by the Committee, and in the case of a Performance Compensation Award, to the extent permitted under Code Section 162(m), adjusted to omit the effects of extraordinary items, gain or loss on the disposal of a business segment, unusual or infrequently occurring events and transactions and cumulative effects of changes in accounting principles. Performance Measures may vary from Performance Period to Performance Period and from Participant to Participant, and may be established on a stand-alone basis, in tandem or in the alternative.
		

		

		

		 

 

		

			 

		

		(iii)  “Performance Period” means one or more periods of time (of not less than one fiscal year of the Company), as the Committee may designate, over which the attainment of one or more Performance Measure(s) will be measured for the purpose of determining a Participant’s rights in respect of an Award.
		

		
			(e) Deferral Elections. At any time prior to the date that is both at least six months before the close of a Performance Period (or shorter or longer period that the Committee selects) with respect to a Performance Award and at which time vesting or payment is substantially uncertain to occur, the Committee may permit a Participant who is a member of a select group of management or highly compensated employees (within the meaning of ERISA) to irrevocably elect, on a form provided by and acceptable to the Committee, to defer the receipt of all or a percentage of the cash or Shares that would otherwise be transferred to the Participant upon the vesting of such Award. If the Participant makes this election, the cash or Shares subject to the election, and any associated interest and dividends, shall be credited to an account established pursuant to Section 8 hereof on the date such cash or Shares would otherwise have been released or issued to the Participant pursuant to this Section.
		

		
			10.Dividend Equivalent Rights. To the extent expressly provided in an Award Agreement, a Dividend Equivalent Right shall entitle an Eligible Person who has received an Award to be credited with dividends that the Company declares and pays (in cash, Shares, or other securities) to its stockholders of record between the Grant Date and the settlement date of the Award. Any Dividend Equivalent Rights arising from cash dividends shall be immediately deemed to be reinvested in Shares having a Fair Market Value equal to such cash dividends (unless an Award Agreement provides otherwise). The Company shall settle Dividend Equivalent Rights by issuing Shares to a Participant to the extent they were previously credited to the Participant as Dividend Equivalent Rights and are attributable to Shares that the Participant is receiving as settlement of an Award. Notwithstanding the foregoing, the Committee may in an Award Agreement or modification thereto provide for (i) an earlier or later settlement event for Dividend Equivalent Rights, and (ii) complete or partial settlement in cash rather than in Shares; provided that Dividend Equivalent Rights associated with an Award subject to performance-based vesting conditions shall be deposited with the Company and shall be subject to the same restrictions as the underlying Award.
		

		
			11.Taxes; Withholding.
		

		
			(a)  General Rule. Participants are solely responsible and liable for the satisfaction of all taxes and penalties that may arise in connection with Awards, and neither the Company, any Affiliate, nor any of their employees, directors, or agents shall have any obligation to mitigate, indemnify, or to otherwise hold any Participant harmless from any or all of such taxes. The Company’s obligation to deliver Shares (or to pay cash) to Participants pursuant to Awards is at all times subject to their prior or coincident satisfaction of all required Withholding Taxes. Except to the extent otherwise either provided in an Award Agreement or thereafter authorized by the Committee, the Company or any Affiliate will satisfy required Withholding Taxes that the Participant has not otherwise arranged to settle before the due date thereof –
		

		
			(i)  first from withholding the cash otherwise payable to the Participant pursuant to the Award; 
		

		
			(ii) then by withholding and cancelling the Participant’s rights with respect to a number of Shares that (A) would otherwise have been delivered to the Participant pursuant to the Award, and (B) have an aggregate Fair Market Value equal to the Withholding Taxes (such withheld Shares may not have a value in excess of the aggregate Fair Market Value thereof on the date of the withholding determined by applying the minimum statutory withholding rate); and
		

		
			(iii) finally, withholding the cash otherwise payable to the Participant by the Company.
		

		
			(b)  U.S. Code Section 409A. To the extent that the Committee determines that any Award granted under the Plan is subject to Code Section 409A, the Award Agreement evidencing such Award shall incorporate the terms and conditions required by Code Section 409A. To the extent applicable, the Plan and Award Agreements shall be interpreted in accordance with Code Section 409A and Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the Effective Date. Notwithstanding any provision of the Plan to the contrary, the Committee may adopt such amendments to the Plan and the applicable Award Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Administrator 
		

		 

 

		

			 

		

		determines are necessary or appropriate (i) to exempt the Award from Code Section 409A and/or preserve the intended tax treatment of the benefits provided with respect to the Award, or (ii) to comply with the requirements of Code Section 409A and related Department of Treasury guidance and thereby avoid the application of any penalty taxes under such Section.
		

		
			(c)  Unfunded Tax Status. The Plan is intended to be an “unfunded” plan for incentive compensation. With respect to any payments not yet made to a Person pursuant to an Award, nothing contained in the Plan or any Award Agreement shall give the Person any rights that are greater than those of a general creditor of the Company or any Affiliate, and a Participant’s rights under the Plan at all times constitute an unsecured claim against the general assets of the Company for the collection of benefits as they come due. Neither the Participant nor the Participant’s duly-authorized transferee or Beneficiaries shall have any claim against or rights in any specific assets, Shares, or other funds of the Company.
		

		
			12.Non-Transferability of Awards.
		

		
			(a)  General. Except as set forth in this Section, or as otherwise approved by the Committee, Awards may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner other than by will or by the laws of descent or distribution. The designation of a death Beneficiary by a Participant will not constitute a transfer. An Award may be exercised, during the lifetime of the holder of an Award, only by such holder, by the duly-authorized legal representative of a holder who is Disabled, or by a transferee permitted by this Section.
		

		
			(b)  Limited Transferability Rights. The Committee may in its discretion provide in an Award Agreement that an Award in the form of a Non-ISO, a Share-settled SAR, Restricted Shares, RSUs, Performance Awards, Performance Units may be transferred without consideration and on such terms and conditions as the Committee deems appropriate, either (i) by instrument to the Participant’s “Immediate Family” (as defined below), (ii) by instrument to an inter vivos or testamentary trust (or other entity) in which the Award is to be passed to the Participant’s designated beneficiaries, or (iii) by gift to charitable institutions. Any transferee of the Participant’s rights shall succeed and be subject to all of the terms of the applicable Award Agreement and the Plan. “Immediate Family” means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, and shall include adoptive relationships.
		

		
			(c)  Death. In the event of the death of a Participant, any outstanding Awards issued to the Participant shall automatically be transferred to the Participant’s Beneficiary (or, if no Beneficiary is designated or surviving, to the person or persons to whom the Participant’s rights under the Award pass by will or the laws of descent and distribution).
		

		
			13.Change in Capital Structure; Change in Control; Etc.
		

		
			(a)  Changes in Capitalization. The Committee shall equitably adjust the number of Shares covered by each outstanding Award, the number of Shares that have been authorized for issuance under the Plan but as to which no Awards have yet been granted or that have been returned to the Plan upon cancellation, forfeiture, or expiration of an Award, the per person maximums set forth in the Plan, as well as the exercise or other price per Share covered by each such outstanding Award, to reflect any increase or decrease in the number of issued Shares resulting from a stock-split, reverse stock-split, stock dividend, combination, recapitalization or reclassification of the Shares, merger, consolidation, change in form of organization, or any other increase or decrease in the number of issued Shares effected without receipt of consideration by the Company. In the event of any such transaction or event, the Committee may provide in substitution for any or all outstanding Awards under the Plan such alternative consideration (including cash or securities of any surviving entity) as it may in good faith determine to be equitable under the circumstances and may require in connection therewith the surrender of all Awards so replaced. In any case, such substitution of cash or securities shall not require the consent of any person who is granted Awards pursuant to the Plan. Except as expressly provided herein, or in an Award Agreement, if the Company issues for consideration shares of stock of any class or securities convertible into shares of stock of any class, the issuance shall not affect, and no adjustment by reason thereof shall be required to be made with respect to the number or price of Shares subject to any Award.
		

		

		

		 

 

		

			 

		

		(b)  Dissolution or Liquidation. In the event of the dissolution or liquidation of the Company other than as part of a Change in Control, each Award will terminate immediately prior to the consummation of such dissolution or liquidation, subject to the ability of the Committee to exercise any discretion authorized in the case of a Change in Control.
		

		
			(c)  Change in Control. In the event of a Change in Control but subject to the terms of any Award Agreements or employment-related agreements between the Company or any Affiliates and any Participant, each outstanding Award shall be assumed or a substantially equivalent award shall be substituted by the surviving or successor company or a parent or subsidiary of such successor company (in each case, the “Successor Company”) upon consummation of the Change in Control. Notwithstanding the foregoing, instead of having outstanding Awards be assumed or replaced with equivalent awards by the Successor Company, the Committee may in its sole and absolute discretion and authority, without obtaining the approval or consent of the Company’s stockholders or any Participant with respect to his or her outstanding Awards, take one or more of the following actions (with respect to any or all of the Awards, and with discretion to differentiate between individual Participants and Awards for any reason):
		

		
			(i)  accelerate the vesting of Awards so that Awards shall vest (and, to the extent applicable, become exercisable) as to the Shares that otherwise would have been unvested and provide that repurchase rights of the Company with respect to Shares issued pursuant to an Award shall lapse as to the Shares subject to such repurchase right;
		

		
			(ii)  arrange or otherwise provide for the payment of cash or other consideration to Participants in exchange for the satisfaction and cancellation of outstanding Awards (with the Committee determining the amount payable to each Participant based on the Fair Market Value, on the date of the Change in Control, of the Award being cancelled, based on any reasonable valuation method selected by the Committee);
		

		
			(iii)  terminate all or some Awards upon the consummation of the Change in Control, provided that the Committee shall provide for vesting of such Awards in full as of a date immediately prior to consummation of the Change in Control. To the extent that an Award is not exercised prior to consummation of a transaction in which the Award is not being assumed or substituted, such Award shall terminate upon such consummation;
		

		
			(iv)  make such other modifications, adjustments or amendments to outstanding Awards or this Plan as the Committee deems necessary or appropriate, subject however to the terms of Section 13 above.
		

		
			14.Termination, Rescission and Recapture of Awards.
		

		
			(a)  Each Award under the Plan is intended to align the Participant’s long-term interests with those of the Company. Accordingly, unless otherwise expressly provided in an Award Agreement, the Company may terminate any outstanding, unexercised, unexpired, unpaid, or deferred Awards (“Termination”), rescind any exercise, payment or delivery pursuant to the Award (“Rescission”), or recapture any Shares (whether restricted or unrestricted) or proceeds from the Participant’s sale of Shares issued pursuant to the Award (“Recapture”), if the Participant does not comply with the conditions of subsections (b), (c), and (e) hereof (collectively, the “Conditions”).
		

		
			(b)  The Participant shall comply with any agreement between the Participant and the Company or any Affiliate with regard to nondisclosure of the proprietary or confidential information or material of the Company or any Affiliate.
		

		
			(c)  The Participant shall comply with any agreement between the Participant and the Company or any Affiliate with regard to intellectual property (including but not limited to patents, trademarks, copyrights, trade secrets, inventions, developments and improvements).
		

		

		

		 

 

		

			 

		

		(d)  Upon exercise, payment, or delivery of cash or Company Stock pursuant to an Award, the Participant shall certify on a form acceptable to the Company that he or she is in compliance with the terms and conditions of the Plan.
		

		
			(e)  If the Company determines, in its sole and absolute discretion, that (i) a Participant has violated any of the Conditions set forth in subsection (b) or (c); (ii) during his or her Continuous Service, or within one year after its termination for any reason, a Participant has solicited any non-administrative employee of the Company to terminate employment with the Company; or (y) during his or her Continuous Service, a Participant has engaged in activities which are materially prejudicial to or in conflict with the interests of the Company, including any breaches of fiduciary duty or the duty of loyalty, then the Company may, in its sole and absolute discretion, impose a Termination, Rescission, and/or Recapture with respect to any or all of the Participant’s relevant Awards, Shares, and the proceeds thereof.
		

		
			(f)  Within ten days after receiving notice from the Company of any such activity described in Section 14(e) above, the Participant shall deliver to the Company the Shares acquired pursuant to the Award, or, if Participant has sold the Shares, the gain realized, or payment received as a result of the rescinded exercise, payment, or delivery; provided, that if the Participant returns Shares that the Participant purchased pursuant to the exercise of an Option (or the gains realized from the sale of such Company Stock), the Company shall promptly refund the exercise price, without earnings, that the Participant paid for the Shares. Any payment by the Participant to the Company pursuant to this Section shall be made either in cash or by returning to the Company the number of Shares that the Participant received in connection with the rescinded exercise, payment, or delivery.
		

		
			(g)  Notwithstanding the foregoing provisions of this Section, the Company has sole and absolute discretion not to require Termination, Rescission and/or Recapture, and its determination not to require Termination, Rescission and/or Recapture with respect to any particular act by a particular Participant or Award shall not in any way reduce or eliminate the Company’s authority to require Termination, Rescission and/or Recapture with respect to any other act or Participant or Award.
		

		
			(h)  All administrative and discretionary authority given to the Company under this Section shall be exercised by the most senior human resources executive of the Company or such other person or committee (including without limitation the Committee) as the Committee may designate from time to time.
		

		
			(i)  If any provision within this Section is determined to be unenforceable or invalid under any Applicable Law, such provision will be applied to the maximum extent permitted by Applicable Law, and shall automatically be deemed amended in a manner consistent with its objectives and any limitations required under Applicable Law.
		

		
			15.Recoupment of Awards. Unless otherwise specifically provided in an Award Agreement, and to the extent permitted by Applicable Law, the Committee may in its sole and absolute discretion, without obtaining the approval or consent of the Company’s stockholders or of any Participant, require that any Participant reimburse the Company for all or any portion of any Awards granted under this Plan (“Reimbursement”), or the Committee may require the Termination or Rescission of, or the Recapture associated with, any Award, if and to the extent—
		

		
			(a)  the granting, vesting, or payment of such Award was predicated upon the achievement of certain financial results that were subsequently the subject of a material financial restatement;
		

		
			(b)  in the Committee’s view the Participant either benefited from a calculation that later proves to be materially inaccurate, or engaged in fraud or misconduct that caused or partially caused the need for a material financial restatement by the Company or any Affiliate; and
		

		
			(c)  a lower granting, vesting, or payment of such Award would have occurred based upon the miscalculated amounts or the conduct described in clause (b) of this Section.
		

		
			In each instance, the Committee will, to the extent practicable and allowable under Applicable Laws, require Reimbursement, Termination or Rescission of, or Recapture relating to, any such Award granted to a Participant; provided that the Company will not seek Reimbursement, Termination or Rescission of, or Recapture 
		

		 

 

		

			 

		

		relating to, any such Awards that were paid or vested more than three years prior to the first date of the applicable restatement period.
		

		
			16.Relationship to other Benefits. No payment pursuant to the Plan shall be taken into account in determining any benefits under any pension, retirement, savings, profit sharing, group insurance, welfare or other benefit plan of the Company or any Affiliate except to the extent otherwise expressly provided in writing in such other plan or an agreement thereunder.
		

		
			17.Administration of the Plan. The Committee shall administer the Plan in accordance with its terms, provided that the Board may act in lieu of the Committee on any matter. The Committee shall hold meetings at such times and places as it may determine and shall make such rules and regulations for the conduct of its business as it deems advisable. In the absence of a duly appointed Committee, the Board shall function as the Committee for all purposes of the Plan.
		

		
			(a)  Committee Composition. The Board shall appoint the members of the Committee. If and to the extent permitted by Applicable Law, the Committee may authorize one or more executive officers to make Awards to Eligible Persons other than themselves. The Board may at any time appoint additional members to the Committee, remove and replace members of the Committee with or without Cause, and fill vacancies on the Committee however caused.
		

		
			(b)  Powers of the Committee. Subject to the provisions of the Plan, the Committee shall have the authority, in its sole discretion:
		

		
			(i)  to grant Awards and to determine Eligible Persons to whom Awards shall be granted from time to time, and the number of Shares, units, or dollars to be covered by each Award;
		

		
			(ii)  to determine, from time to time, the Fair Market Value of Shares;
		

		
			(iii)  to determine, and to set forth in Award Agreements, the terms and conditions of all Awards, including any applicable exercise or purchase price, the installments and conditions under which an Award shall become vested (which may be based on performance), terminated, expired, cancelled, or replaced, and the circumstances for vesting acceleration or waiver of forfeiture restrictions, and other restrictions and limitations;
		

		
			(iv)  to approve the forms of Award Agreements and all other documents, notices and certificates in connection therewith which need not be identical either as to type of Award or among Participants;
		

		
			(v)  to construe and interpret the terms of the Plan and any Award Agreement, to determine the meaning of their terms, and to prescribe, amend, and rescind rules and procedures relating to the Plan and its administration;
		

		
			(vi)  to the extent consistent with the purposes of the Plan and without amending the Plan, to modify, to cancel, or to waive the Company’s rights with respect to any Awards, to adjust or to modify Award Agreements for changes in Applicable Law, and to recognize differences in foreign law, tax policies, or customs;
		

		
			(vii)  in the event that the Company establishes, for itself or using the services of a third party, an automated system for the documentation, granting, settlement, or exercise of Award, such as a system using an internet website or interactive voice response, to implement paperless documentation, granting, settlement, or exercise of Awards by a Participant may be permitted through the use of such an automated system; and
		

		
			(viii)  to make all interpretations and to take all other actions that the Committee may consider necessary or advisable to administer the Plan or to effectuate its purposes.
		

		

		

		 

 

		

			 

		

		Subject to Applicable Law and the restrictions set forth in the Plan, the Committee may delegate administrative functions to individuals who are Directors or Employees.
		

		
			(c)  Law Adjustments and Sub-plans. To facilitate the making of any grant of an Award under this Plan, the Committee may adopt rules and provide for such special terms for Awards to Participants who are located within the United States, foreign nationals, or who are employed by the Company or any Affiliate outside of the United States of America as the Committee may consider necessary or appropriate to accommodate differences in local law, tax policy or custom. Without limiting the foregoing, the Company is specifically authorized to adopt rules and procedures regarding the conversion of local currency, taxes, withholding procedures and handling of stock certificates which vary with the customs and requirements of particular countries. The Company may adopt sub-plans and establish escrow accounts and trusts, and settle Awards in cash in lieu of shares, as may be appropriate, required or applicable to particular locations and countries.
		

		
			(d)  Action by Committee. Unless otherwise established by the Board or in any charter of the Committee, a majority of the Committee shall constitute a quorum and the acts of a majority of the members present at any meeting at which a quorum is present, and acts approved in writing by all members of the Committee in lieu of a meeting, shall be deemed the acts of the Committee. Each member of the Committee is entitled to, in good faith, rely or act upon any report or other information furnished to that member by an officer or other employee of the Company or any Affiliate, the Company’s independent certified public accounts, or any executive compensation consultant or other professional retained by the Company to assist in the administration of the Plan.
		

		
			(e)  Deference to Committee Determinations. The Committee shall have the discretion to interpret or construe ambiguous, unclear, or implied (but omitted) terms in any fashion it deems to be appropriate in its sole discretion, and to make any findings of fact needed in the administration of the Plan or Award Agreements. The Committee’s prior exercise of its discretionary authority shall not obligate it to exercise its authority in a like fashion thereafter. The Committee’s interpretation and construction of any provision of the Plan, or of any Award or Award Agreement, and all determination the Committee makes pursuant to the Plan shall be final, binding, and conclusive. The validity of any such interpretation, construction, decision or finding of fact shall not be given de novo review if challenged in court, by arbitration, or in any other forum, and shall be upheld unless clearly made in bad faith or materially affected by fraud.
		

		
			(f)  No Liability; Indemnification. Neither the Board nor any Committee member, nor any Person acting at the direction of the Board or the Committee, shall be liable for any act, omission, interpretation, construction or determination made in good faith with respect to the Plan, any Award or any Award Agreement. The Company and its Affiliates shall pay or reimburse any member of the Committee, as well as any Director, Employee, or Consultant who in good faith takes action on behalf of the Plan, for all expenses incurred with respect to the Plan, and to the full extent allowable under Applicable Law shall indemnify each and every one of them for any claims, liabilities, and costs (including reasonable attorney’s fees) arising out of their good faith performance of duties on behalf of the Plan. The Company and its Affiliates may, but shall not be required to, obtain liability insurance for this purpose.
		

		
			(g)  Expenses. The expenses of administering the Plan shall be borne jointly and severally by the Company and its Affiliates.
		

		
			18.Modification of Awards and Substitution of Options. Within the limitations of the Plan, the Committee may modify an Award to accelerate the rate at which an Option or SAR may be exercised, to accelerate the vesting of any Award, to extend or renew outstanding Awards, to accept the cancellation of outstanding Awards to the extent not previously exercised, or to make any change that the Plan would permit for a new Award. Notwithstanding the foregoing, no modification of an outstanding Award may materially and adversely affect a Participant’s rights thereunder unless either (a) the Participant provides written consent to the modification, or (b) before a Change in Control, the Committee determines in good faith that the modification is not materially adverse to the Participant. Except as provided in Section 13, without prior stockholder approval, in no event may the Committee exercise its discretion to reduce the exercise price of outstanding Options or SARs or effect repricing through cancellation and re-grants or cancellation in exchange for cash.
		

		
			19.Plan Amendment and Termination. The Board may amend or terminate the Plan as it shall deem advisable; provided that no change shall be made that increases the total number of Shares reserved for 
		

		 

 

		

			 

		

		issuance pursuant to Awards (except pursuant to Section 13 above) unless such change is authorized by the stockholders of the Company. A termination or amendment of the Plan shall not materially and adversely affect a Participant’s vested rights under an Award previously granted to him or her, unless either (a) the Participant consents in writing to such termination or amendment, or (b) before a Change in Control, the Committee determines in good faith that the modification is not materially adverse to the Participant. Notwithstanding the foregoing, the Committee may amend the Plan to comply with changes in tax or securities laws or regulations, or in the interpretation thereof.
		

		
			20.Term of Plan. If not sooner terminated by the Board, this Plan shall terminate at the close of business on the date ten years after its Effective Date. No Awards shall be made under the Plan after its termination; however, termination of the Plan shall not affect the Committee’s ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination.
		

		
			21.Governing Law. The terms of this Plan shall be governed by the laws of the State of Delaware, within the United States of America, without regard to the State’s conflict of laws rules.
		

		
			22.Laws and Regulations.
		

		
			(a)  General Rules. This Plan, the granting of Awards, the exercise of Options and SARs, and the obligations of the Company hereunder (including those to pay cash or to deliver, sell or accept the surrender of any of its Shares or other securities) shall be subject to all Applicable Laws. In the event that any Shares are not registered under any Applicable Law prior to the required delivery of them pursuant to Awards, the Company may require, as a condition to their issuance or delivery, that the persons to whom the Shares are to be issued or delivered make any written representations and warranties (such as that such Shares are being acquired by the Participant for investment for the Participant’s own account and not with a view to, for resale in connection with, or with an intent of participating directly or indirectly in, any distribution of such Shares) that the Committee may reasonably require, and the Committee may in its sole discretion include a legend to such effect on the certificates representing any Shares issued or delivered pursuant to the Plan.
		

		
			(b)  Black-out Periods. Notwithstanding any contrary terms within the Plan or any Award Agreement, the Committee shall have the absolute discretion to impose a “blackout” period on the exercise of any Option or SAR, as well as the settlement of any Award, with respect to any or all Participants (including those whose Continuous Service has ended) to the extent that the Committee determines that doing so is either desirable or required in order to comply with applicable securities laws.
		

		
			23.No Stockholder Rights. Neither a Participant nor any transferee or Beneficiary of a Participant shall have any rights as a stockholder of the Company with respect to any Shares underlying any Award until the date of issuance of the Shares to such Participant, transferee, or Beneficiary for such Shares in accordance with the Company’s governing instruments and Applicable Law. Prior to the issuance of Shares or Restricted Shares pursuant to an Award, a Participant shall not have the right to vote or to receive dividends or any other rights as a stockholder with respect to the Shares underlying the Award (unless otherwise provided in the Award Agreement for Restricted Shares), notwithstanding its exercise in the case of Options and SARs. No adjustment will be made for a dividend or other right that is determined based on a record date prior to the date the Share is issued, except as otherwise specifically provided for in this Plan or an Award Agreement.
		

		

		

		 

 

		

			 

		

		___________________
		

		
			Appendix I: Definitions
		

		
			___________________
		

		
			 
		

		
			As used in the Plan, the following terms have the meanings indicated when they begin with initial capital letters within the Plan:
		

		
			“Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls or is controlled by or under common control with such Person. For the purposes of this definition, “control,” when used with respect to any Person, means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person or the power to elect directors, whether through the ownership of voting securities, by contract or otherwise; and the terms “affiliated,” “controlling” and “controlled” have meanings correlative to the foregoing.
		

		
			“Applicable Law” means the legal requirements relating to the administration of options and share-based plans under any applicable laws of the United States, any other country, and any provincial, state, or local subdivision, any applicable stock exchange or automated quotation system rules or regulations, as such laws, rules, regulations and requirements shall be in place from time to time.
		

		
			“Award” means any award made pursuant to the Plan, including awards made in the form of an Option, an SAR, a Restricted Share, a RSU, an Unrestricted Share, a DSU, a Performance Unit, a Performance Award, or Dividend Equivalent Rights, or any combination thereof, whether alternative or cumulative.
		

		
			“Award Agreement” means any written document setting forth the terms of an Award that has been authorized by the Committee. The Committee shall determine the form or forms of documents to be used, and may change them from time to time for any reason.
		

		
			“Beneficiary” means the person or entity designated by the Participant, in a form approved by the Company, to exercise the Participant’s rights with respect to an Award or receive payment or settlement under an Award after the Participant’s death.
		

		
			“Board” means the Board of Directors of the Company.
		

		
			“Cause” will have the meaning set forth in any unexpired employment agreement between the Company and the Participant. In the absence of such an agreement, “Cause” will exist if the Participant is terminated from employment or other service with the Company or an Affiliate for any of the following reasons: (i) the Participant’s willful failure to substantially perform his or her duties and responsibilities to the Company or deliberate violation of a material Company policy; (ii) the Participant’s commission of any material act or acts of fraud, embezzlement, dishonesty, or other willful misconduct; (iii) the Participant’s material unauthorized use or disclosure of any proprietary information or trade secrets of the Company or any other party to whom the Participant owes an obligation of nondisclosure as a result of his or her relationship with the Company; or (iv) Participant’s willful and material breach of any of his or her obligations under any written agreement or covenant with the Company. The foregoing definition does not in any way limit the Company’s ability to terminate a Participant’s employment or
		

		
			consulting relationship at any time, and the term “Company” will be interpreted herein to include any Affiliate or successor thereto, if appropriate.
		

		
			“Change in Control” means any of the following:
		

		
			(i)  Merger. The Company consummates a merger, or consolidation of the Company with any other corporation unless: (A) the voting securities of the Company outstanding immediately before the merger or consolidation would continue to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; and (B) no Person (other than 
		

		 

 

		

			 

		

		Persons who are Employees at any time more than one year before a transaction) becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s then outstanding securities.
		

		
			(ii)  Sale of Assets. The stockholders of the Company approve an agreement for the sale or disposition by the Company of all, or substantially all, of the Company’s assets.
		

		
			Notwithstanding the foregoing, a “Change in Control” shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the record holders of the common stock of the Company immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assets of the Company immediately following such transaction or series of transactions.
		

		
			“Code” means the Internal Revenue Code of 1986, as amended.
		

		
			“Committee” means the Compensation Committee of the Board or its successor, provided that the term “Committee” means (i) with respect to any decision involving an Award intended to satisfy the requirements of Code Section 162(m), a committee consisting of two or more Directors of the Company who are intended to be “outside directors” within the meaning of Code Section 162(m), and (ii) with respect to any decision relating to a Reporting Person, a committee consisting of solely of two or more Directors who are intended to be disinterested within the meaning of Rule 16b-3.
		

		
			“Company” means Vermillion, Inc., a Delaware corporation; provided that in the event the Company reincorporates to another jurisdiction, all references to the term “Company” shall refer to the Company in such new jurisdiction.
		

		
			“Company Stock” means common stock, $0.001 par value, of the Company. In the event of a change in the capital structure of the Company affecting the common stock (as provided in Section 13), the Shares resulting from such a change in the common stock shall be deemed to be Company Stock within the meaning of the Plan.
		

		
			“Consultant” means any person (other than an Employee or Director), including an advisor, who is engaged by the Company or any Affiliate to render services and is compensated for such services.
		

		
			“Continuous Service” means a Participant’s period of service in the absence of any interruption or termination, as an Employee, Director, or Consultant. Continuous Service shall not be considered interrupted in the case of: (i) sick leave; (ii) military leave; (iii) any other leave of absence approved by the Committee, provided that such leave is for a period of not more than 90 days, unless reemployment upon the expiration of such leave is guaranteed by contract or statute, or unless provided otherwise pursuant to Company policy adopted from time to time; (iv) changes in status from Director to advisory director or emeritus status; or (iv) transfers between locations of the Company or between the Company and its Affiliates. Changes in status between service as an Employee,
		

		
			Director, and a Consultant will not constitute an interruption of Continuous Service if the individual continues to perform bona fide services for the Company. The Committee shall have the discretion to determine whether and to what extent the vesting of any Awards shall be tolled during any paid or unpaid leave of absence; provided, however, that in the absence of such determination, vesting for all Awards shall be tolled during any such unpaid leave (but not for a paid leave).
		

		
			“Deferred Share Units” or “DSUs” mean Awards pursuant to Section 8 of the Plan.
		

		
			“Director” means a member of the Board, or a member of the board of directors of an Affiliate.
		

		
			“Disabled” means a condition under which a Participant –
		

		

		

		 

 

		

			 

		

		(i)  is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or
		

		
			(ii)  is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, received income replacement benefits for a period of not less than three months under an accident or health plan covering employees of the Company.
		

		
			“Dividend Equivalent Rights” means Awards pursuant to Section 10 of the Plan, which may be attached to other Awards.
		

		
			“Effective Date” means the date on which the shareholders of the Company approve the Plan, as amended and restated.
		

		
			“Eligible Person” means any Consultant, Director, or Employee.
		

		
			“Employee” means any person whom the Company or any Affiliate classifies as an employee (including an officer) for employment tax purposes, whether or not that classification is correct. The payment by the Company of a director’s fee to a Director shall not be sufficient to constitute “employment” of such Director by the Company.
		

		
			“Employer” means the Company and each Subsidiary and Affiliate that employs one or more Participants.
		

		
			“Exchange Act” means the Securities Exchange Act of 1934, as amended.
		

		
			“Fair Market Value” means, as of any date, the closing price of the Company Stock on the New York Stock Exchange, the American Stock Exchange, NASDAQ or such other stock exchange as the Company Stock is then listed for trading, as of such date (and, if none, as determined by the Committee in good faith based on relevant facts and circumstances).
		

		
			“Grant Date” means the later of (i) the date designated as the “Grant Date” within an Award Agreement, and (ii) date on which the Committee determines the key terms of an Award, provided that as soon as reasonably practical thereafter the Committee both notifies the Eligible Person of the Award and enters into an Award Agreement with the Eligible Person.
		

		
			“Incentive Stock Option” (or “ISO”) means, an Option that qualifies for favorable income tax treatment under Code Section 422, and which is intended by the Committee to constitute an Incentive Stock Option
		

		
			“Non-ISO” means an Option that is not an Incentive Stock Option.
		

		
			“Option” means a right to purchase Company Stock granted under the Plan, at a price determined in accordance with the Plan.
		

		
			“Participant” means any Eligible Person who holds an outstanding Award.
		

		
			“Performance Awards” mean Awards granted pursuant to Section 9.
		

		
			“Performance Unit” means an Award granted pursuant to Section 9(a) of the Plan which may be paid in cash, in Shares, or such combination of cash and Shares as the Committee in its sole discretion shall determine.
		

		
			“Person” means any natural person, association, trust, business trust, cooperative, corporation, general partnership, joint venture, joint-stock company, limited partnership, limited liability company, real estate investment trust, regulatory body, governmental agency or instrumentality, unincorporated organization or organizational entity.
		

		
			“Plan” means this Vermillion, Inc. Second Amended and Restated 2010 Stock Incentive Plan.
		

		

		

		 

 

		

			 

		

		“Recapture” and “Rescission” have the meaning set forth in Section 14 of the Plan.
		

		
			“Reimbursement” has the meaning set forth in Section 15 of the Plan.
		

		
			“Reporting Person” means an Employee, Director, or Consultant who is subject to the reporting requirements set forth under Rule 16b-3.
		

		
			“Restricted Share” means a Share of Company Stock awarded with restrictions imposed under Section 7.
		

		
			“Restricted Share Unit” or “RSU” means a right granted to a Participant to receive Shares or cash upon the lapse of restrictions imposed under Section 7.
		

		
			“Retirement” means a Participant’s termination of employment after age 65.
		

		
			“Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act, as amended from time to time, or any successor provision.
		

		
			“Share” means a share of Company Stock, as adjusted in accordance with Section 13 of the Plan.
		

		
			“SAR” or “Share Appreciation Right” means a right to receive amounts awarded under Section 6.
		

		
			“Ten Percent Holder” means a person who owns (within the meaning of Code Section 422) stock representing more than ten percent (10%) of the combined voting power of all classes of stock of the Company.
		

		
			“Unrestricted Shares” mean Shares (without restrictions) awarded pursuant to Section 7 of the Plan.
		

		
			“Withholding Taxes” means the aggregate minimum amount of federal, state, local and foreign income, payroll and other taxes that the Company and any Affiliates are required to withhold in connection with any Award.
		

		

		

		 

 

		

			 

		

		Vermillion, Inc.
		

		
			Second Amended and Restated 2010 Stock Incentive Plan
		

		
			_______________________
		

		
			Appendix II: ____ Sub-Plan
		

		
			_______________________
		

		
			 
		

		
			This Appendix II applies to any Awards that are made to Eligible Persons who are residents of ___________ and who are or may become subject to its tax laws (i.e. income tax and/or social security tax) as a result of Awards granted under the Vermillion, Inc. Second Amended and Restated 2010 Stock Incentive Plan (the “Plan”). Terms herein that begin with initial capital letters have the special definition set forth in the Plan.
		

		
			This Appendix II shall be read in conjunction with the Plan and is subject to the terms and conditions of the Plan; provided that, to the extent that the terms and conditions of the Plan differ from or conflict with the terms of this Appendix II, the following terms of this Appendix II shall prevail:
		

		
			1.______________________
		

		
			Vermillion, Inc.
		

		
			Second Amended and Restated 2010 Stock Incentive Plan

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