Document:

Preferred Stock Rights Agreement, between the Company & Mellon Investor Services

 Exhibit 4.1 
  

PAIN THERAPEUTICS, INC. 
  
 and 
  
 MELLON INVESTOR SERVICES LLC 
  
 PREFERRED STOCK RIGHTS AGREEMENT 
  
 Dated as of April 28, 2005 

  
 TABLE OF CONTENTS

  

					
	 	  	 	  	Page

	 Section 1.
	  	Certain Definitions	  	1
			
	 Section 2.
	  	Appointment of Rights Agent	  	7
			
	 Section 3.
	  	Issuance of Rights Certificates	  	7
			
	 Section 4.
	  	Form of Rights Certificates	  	9
			
	 Section 5.
	  	Countersignature and Registration	  	10
			
	 Section 6.
	  	Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates	  	11
			
	 Section 7.
	  	Exercise of Rights; Exercise Price; Expiration Date of Rights	  	11
			
	 Section 8.
	  	Cancellation and Destruction of Rights Certificates	  	13
			
	 Section 9.
	  	Reservation and Availability of Preferred Shares	  	14
			
	 Section 10.
	  	Record Date	  	15
			
	 Section 11.
	  	Adjustment of Exercise Price, Number of Shares or Number of Rights	  	16
			
	 Section 12.
	  	Certificate of Adjusted Exercise Price or Number of Shares	  	22
			
	 Section 13.
	  	Consolidation, Merger or Sale or Transfer of Assets or Earning Power	  	23
			
	 Section 14.
	  	Fractional Rights and Fractional Shares	  	26
			
	 Section 15.
	  	Rights of Action	  	28
			
	 Section 16.
	  	Agreement of Rights Holders	  	28
			
	 Section 17.
	  	Rights Certificate Holder Not Deemed a Stockholder	  	29
			
	 Section 18.
	  	Concerning the Rights Agent	  	29
			
	 Section 19.
	  	Merger or Consolidation or Change of Name of Rights Agent	  	30
			
	 Section 20.
	  	Duties of Rights Agent	  	30
			
	 Section 21.
	  	Change of Rights Agent	  	33

  

 -i- 

 TABLE OF CONTENTS 
 (continued) 
  

					
	 	  	 	  	Page

	 Section 22.
	  	Issuance of New Rights Certificates	  	34
			
	 Section 23.
	  	Redemption	  	34
			
	 Section 24.
	  	Exchange	  	35
			
	 Section 25.
	  	Notice of Certain Events	  	37
			
	 Section 26.
	  	Notices	  	37
			
	 Section 27.
	  	Supplements and Amendments	  	38
			
	 Section 28.
	  	Successors	  	39
			
	 Section 29.
	  	Determinations and Actions by the Board of Directors, etc	  	39
			
	 Section 30.
	  	Benefits of this Agreement	  	39
			
	 Section 31.
	  	Severability	  	39
			
	 Section 32.
	  	Governing Law	  	39
			
	 Section 33.
	  	Counterparts	  	40
			
	 Section 34.
	  	Descriptive Headings	  	40

  
 EXHIBITS 
  

			
	 Exhibit A
	  	Form of Certificate of Designation
		
	 Exhibit B
	  	Form of Rights Certificate
		
	 Exhibit C
	  	Summary of Rights

  

 -ii- 

 PREFERRED STOCK RIGHTS AGREEMENT 
  
 This Preferred Stock Rights Agreement (the “Agreement”) is dated as of April 28, 2005, between Pain
Therapeutics, Inc., a Delaware corporation, (the “Company”), and Mellon Investor Services LLC (the “Rights Agent”). 
  
 On April 28, 2005, (the “Rights Dividend Declaration Date”), the Board of Directors of the Company
authorized and declared a dividend of one Preferred Share Purchase Right (a “Right”) for each Common Share (as hereinafter defined) of the Company outstanding as of the Close of Business (as hereinafter defined) on May 12,
2005 (the “Record Date”), each Right representing the right to purchase one one-thousandth (0.001) of a share of Series A Participating Preferred Stock (as such number may be adjusted pursuant to the provisions of this
Agreement), having the rights, preferences and privileges set forth in the form of Certificate of Designations of Rights, Preferences and Privileges of Series A Participating Preferred Stock attached hereto as Exhibit A, upon the terms and
subject to the conditions herein set forth, and further authorized and directed the issuance of one Right (as such number may be adjusted pursuant to the provisions of this Agreement) with respect to each Common Share that shall become outstanding
between the Record Date and the earlier of the Distribution Date and the Expiration Date (as such terms are hereinafter defined), and in certain circumstances after the Distribution Date. 
  
 NOW, THEREFORE, in consideration of the promises and the mutual agreements herein set forth, the parties hereby agree as
follows: 
  
 Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated: 
  
 (a) “Acquiring Person” shall mean any Person, who or which, together with all Affiliates and Associates of such Person, shall be the Beneficial Owner of 15% or more of the Common Shares then
outstanding, but shall not include the Company, any Subsidiary of the Company or any employee benefit plan of the Company or of any Subsidiary of the Company, or any entity holding Common Shares for or pursuant to the terms of any such plan;
provided, however, that Eastbourne Capital Management, LLC, and its affiliates (“Eastbourne”) shall not be deemed an “Acquiring Person” until such time as it together with its respective affiliates
shall be the Beneficial Owner of 20% or more of the Company’s Common Shares then outstanding. Notwithstanding the foregoing, no Person shall be deemed to be an Acquiring Person as the result of an acquisition of Common Shares by the Company
which, by reducing the number of shares outstanding, increases the proportionate number of shares beneficially owned by such Person to 15% or more of the Common Shares of the Company then outstanding (or with respect to Eastbourne and its
affiliates, increases such number of shares to 20% or more of the Common Shares of the Company then outstanding); provided, however, that if a Person shall become the Beneficial Owner of 15% or more of the Common Shares of the Company
then outstanding (or with respect to Eastbourne and its affiliates, shall become the Beneficial Owner of 20% or more of the Common 

  

 1 

 
Shares of the Company then outstanding) by reason of share purchases by the Company and shall, after such share purchases by the Company, become the
Beneficial Owner of any additional Common Shares of the Company (other than pursuant to a dividend or distribution paid or made by the Company on the outstanding Common Shares in Common Shares or pursuant to a split or subdivision of the outstanding
Common Shares), then such Person shall be deemed to be an Acquiring Person unless upon becoming the Beneficial Owner of such additional Common Shares of the Company such Person does not beneficially own 15% or more of the Common Shares of the
Company then outstanding (or with respect to Eastbourne and its affiliates, does not beneficially own 20% or more of the Common Shares of the Company then outstanding). Notwithstanding the foregoing, (i) if the Company’s Board of Directors
determines in good faith that a Person who would otherwise be an “Acquiring Person,” as defined pursuant to the foregoing provisions of this paragraph (a), has become such inadvertently (including, without limitation, because (A) such
Person was unaware that it beneficially owned a percentage of the Common Shares that would otherwise cause such Person to be an “Acquiring Person,” as defined pursuant to the foregoing provisions of this paragraph (a), or (B) such Person
was aware of the extent of the Common Shares it beneficially owned but had no actual knowledge of the consequences of such beneficial ownership under this Agreement) and without any intention of changing or influencing control of the Company, and if
such Person divested or divests as promptly as practicable a sufficient number of Common Shares so that such Person would no longer be an “Acquiring Person,” as defined pursuant to the foregoing provisions of this paragraph (a), then such
Person shall not be deemed to be or to have become an “Acquiring Person” for any purposes of this Agreement including, without limitation Section 1(gg) hereof; and (ii) if, as of the date hereof, any Person is the Beneficial Owner of 15%
or more of the Common Shares outstanding, (or with respect to Eastbourne and its affiliates, is the Beneficial Owner of 20% or more of the Common Shares outstanding) such Person shall not be or become an “Acquiring Person,” as defined
pursuant to the foregoing provisions of this paragraph (a), unless and until such time as such Person shall become the Beneficial Owner of additional Common Shares (other than pursuant to a dividend or distribution paid or made by the Company on the
outstanding Common Shares in Common Shares or pursuant to a split or subdivision of the outstanding Common Shares or upon the acquisition of additional Common Shares in a transaction specifically designated as exempt for purposes of this Section
1(a) by the Board of Directors of the Company), unless, upon becoming the Beneficial Owner of such additional Common Shares, such Person is not then the Beneficial Owner of 15% or more of the Common Shares then outstanding (or with respect to
Eastbourne and its affiliates, is not the Beneficial Owner of 20% or more of the Common Shares outstanding). 
  
 (b) “Adjustment Fraction” shall have the meaning set forth in Section 11(a)(i) hereof. 
  
 (c) “Affiliate” and
“Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Exchange Act, as in effect on the date of this Agreement. 
  

 2 

 (d) A Person shall be deemed the “Beneficial Owner” of and shall
be deemed to “beneficially own” any securities: 
  
 which
such Person or any of such Person’s Affiliates or Associates beneficially owns, directly or indirectly, for purposes of Section 13(d) of the Exchange Act and Rule 13d-3 thereunder (or any comparable or successor law or regulation); 

 
 which such Person or any of such Person’s Affiliates or Associates has (A) the right
to acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding (other than customary agreements with and between underwriters and selling group members with
respect to a bona fide public offering of securities), or upon the exercise of conversion rights, exchange rights, rights (other than the Rights), warrants or options, or otherwise; provided, however, that a Person shall not be deemed
pursuant to this Section 1(d)(ii)(A) to be the Beneficial Owner of, or to beneficially own, (1) securities tendered pursuant to a tender or exchange offer made by or on behalf of such Person or any of such Person’s Affiliates or Associates
until such tendered securities are accepted for purchase or exchange, or (2) securities which a Person or any of such Person’s Affiliates or Associates may be deemed to have the right to acquire pursuant to any merger or other acquisition
agreement between the Company and such Person (or one or more of its Affiliates or Associates) if such agreement has been approved by the Board of Directors of the Company prior to there being an Acquiring Person; or (B) the right to vote pursuant
to any agreement, arrangement or understanding; provided, however, that a Person shall not be deemed the Beneficial Owner of, or to beneficially own, any security under this Section 1(d)(ii)(B) if the agreement, arrangement or
understanding to vote such security (1) arises solely from a revocable proxy or consent given to such Person in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable rules and regulations of the
Exchange Act and (2) is not also then reportable on Schedule 13D under the Exchange Act (or any comparable or successor report); or 
  
 which are beneficially owned, directly or indirectly, by any other Person (or any Affiliate or Associate thereof) with which such Person or any of such Person’s
Affiliates or Associates has any agreement, arrangement or understanding, whether or not in writing (other than customary agreements with and between underwriters and selling group members with respect to a bona fide public offering of securities)
for the purpose of acquiring, holding, voting (except to the extent contemplated by the proviso to Section 1(d)(ii)(B)) or disposing of any securities of the Company; provided, however, that in no case shall an officer or director of
the Company be deemed (x) the Beneficial Owner of any securities beneficially owned by another officer or director of the Company solely by reason of actions undertaken by such persons in their capacity as officers or directors of the Company or (y)
the Beneficial Owner of securities held of record by the trustee of any employee benefit plan of the Company or any Subsidiary of the Company for the benefit of any employee of the Company or any Subsidiary of the Company, other than the officer or
director, by reason of any influence that such officer or director may have over the voting of the securities held in the plan. 
  
 (e) “Business Day” shall mean any day other than a Saturday, Sunday or a federal holiday. 
  

 3 

 (f) “Close of Business” on any given date shall mean 5:00 P. M.,
San Francisco, CA time, on such date; provided, however, that if such date is not a Business Day it shall mean 5:00 P.M., San Francisco, CA time, on the next succeeding Business Day. 
  
 (g) “Common Stock Equivalents” shall
have the meaning set forth in Section 11(a)(iii) hereof. “Common Shares” when used with reference to the Company shall mean the shares of Common Stock of the Company, par value at $0.001 per share. Common Shares when used
with reference to any Person other than the Company shall mean the capital stock (or equity interest) with the greatest voting power of such other Person or, if such other Person is a Subsidiary of another Person, the Person or Persons which
ultimately control such first-mentioned Person. 
  
 (h) “Company” shall mean Pain Therapeutics, Inc., a Delaware corporation, subject to the terms of Section 13(a)(iii)(C) hereof. 
  
 (i) “Current Per Share Market Price” of any security (a “Security” for
purposes of this definition), for all computations other than those made pursuant to Section 11(a)(iii) hereof, shall mean the average of the daily closing prices per share of such Security for the thirty (30) consecutive Trading Days immediately
prior to, but not including such date, and for purposes of computations made pursuant to Section 11(a)(iii) hereof, the Current Per Share Market Price of any Security on any date shall be deemed to be the average of the daily closing prices per
share of such Security for the ten (10) consecutive Trading Days immediately prior to, but not including such date; provided, however, that in the event that the Current Per Share Market Price of the Security is determined during a
period following the announcement by the issuer of such Security of (i) a dividend or distribution on such Security payable in shares of such Security or securities convertible into such shares or (ii) any subdivision, combination or
reclassification of such Security, and prior to the expiration of the applicable thirty (30) Trading Day or ten (10) Trading Day period, after the ex-dividend date for such dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the Current Per Share Market Price shall be appropriately adjusted to reflect the current market price per share equivalent of such Security. The closing price for each day shall be the
last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange or, if the Security is not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the Security is listed or admitted to trading or, if the Security is not listed or admitted to trading on any national securities exchange, the last sale price or, if such last
sale price is not reported, the average of the high bid and low asked prices in the over-the-counter market, as reported by Nasdaq or such other system then in use, or, if on any such date the Security is not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional market maker making a market in the Security selected by the Board of Directors of the Company. If on any such date no market maker is making a market in the Security, the
fair value of 

  

 4 

 
such shares on such date as determined in good faith by the Board of Directors of the Company shall be used. If the Preferred Shares are not publicly traded,
the Current Per Share Market Price of the Preferred Shares shall be conclusively deemed to be (x) the Current Per Share Market Price of the Common Shares as determined pursuant to this Section 1(i), as appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date hereof, multiplied by (y) 1,000. If the Security is not publicly held or so listed or traded, Current Per Share Market Price shall mean the fair value per share as determined in
good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes. 
  
 (j) “Current Value” shall have the meaning set forth in Section 11(a)(iii) hereof.

  
 (k) “Distribution
Date” shall mean the earlier of (i) the Close of Business on the tenth (10th) day (or such later date
as may be determined by action of the Company’s Board of Directors) after the Shares Acquisition Date (or, if the tenth (10th) day after the Shares Acquisition Date occurs before the Record Date, the Close of Business on the Record Date) or (ii) the Close of Business on the tenth (10th) Business Day (or such later date as may be determined by action of the Company’s Board of Directors) after the date that a tender or exchange offer by
any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company, or any Person organized, appointed or established by the Company for or pursuant to the terms of any
such plan) is first published or sent or given within the meaning of Rule 14d-2(a) of the General Rules and Regulations under the Exchange Act, if, assuming the successful consummation thereof, such Person would be an Acquiring Person. 

 
 (l) “Equivalent Shares” shall
mean Preferred Shares and any other class or series of capital stock of the Company which is entitled to the same rights, privileges and preferences as the Preferred Shares. 
  
 (m) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

  
 (n) “Exchange Ratio”
shall have the meaning set forth in Section 24(a) hereof. 
  
 (o) “Exercise Price” shall have the meaning set forth in Section 4(a) hereof. 
  
 (p) “Expiration Date” shall mean the earliest to occur of: (i) the Close of Business on the Final Expiration Date,
(ii) the Redemption Date, or (iii) the time at which the Board of Directors of the Company orders the exchange of the Rights as provided in Section 24 hereof. 
  

(q) “Final Expiration Date” shall mean May 12, 2015. 
  
 (r) “Nasdaq” shall mean The Nasdaq
Stock Market, Inc. 
  

 5 

 (s) “Person” shall mean any individual, firm, limited liability
company, corporation or other entity, and shall include any successor (by merger or otherwise) of such entity. 
  
 (t) “Post-Event Transferee” shall have the meaning set forth in Section 7(e) hereof. 
  
 (u) “Preferred Shares” shall mean
shares of Series A Participating Preferred Stock, par value $0.001 per share, of the Company. 
  
 (v) “Pre-Event Transferee” shall have the meaning set forth in Section 7(e) hereof. 
  
 (w) “Principal Party” shall have the
meaning set forth in Section 13(b) hereof. 
  
 (x) “Record Date” shall have the meaning set forth in the recitals at the beginning of this Agreement. 
  
 (y) “Redemption Date” shall have the meaning set forth in Section 23(a) hereof. 
  
 (z) “Redemption Price” shall have
the meaning set forth in Section 23(a) hereof. 
  
 (aa) “Rights Agent” shall mean (i) Mellon Investor Services LLC, a New Jersey limited liability company (ii) its successor or replacement as provided in Sections 19 and 21 hereof or (iii) any additional Person
appointed pursuant to Section 2 hereof. 
  
 (bb)
“Rights Certificate” shall mean a certificate substantially in the form attached hereto as Exhibit B. 
  
 (cc) “Rights Dividend Declaration Date” shall have the meaning set forth in the recitals at the beginning of this
Agreement. 
  
 (dd) “Section 11(a)(ii)
Trigger Date” shall have the meaning set forth in Section 11(a)(iii) hereof. 
  
 (ee) “Section 13 Event” shall mean any event described in clause (i), (ii) or (iii) of Section 13(a) hereof.

  
 (ff) “Securities Act”
shall mean the Securities Act of 1933, as amended. 
  
 (gg) “Shares Acquisition Date” shall mean the first date of public announcement (which, for purposes of this definition, shall include, without limitation, a report filed pursuant to 

  

 6 

 
Section 13(d) of the Exchange Act) by the Company or an Acquiring Person that an Acquiring Person has become such; provided that, if such Person is
determined not to have become an Acquiring Person pursuant to Section 1(a) hereof, then no Shares Acquisition Date shall be deemed to have occurred by virtue of such event. 
  
 (hh) “Spread” shall have the meaning set forth in Section 11(a)(iii) hereof.

  
 (ii) “Subsidiary” of
any Person shall mean any corporation or other entity of which an amount of voting securities sufficient to elect a majority of the directors or Persons having similar authority of such corporation or other entity is beneficially owned, directly or
indirectly, by such Person, or any corporation or other entity otherwise controlled by such Person. 
  
 (jj) “Substitution Period” shall have the meaning set forth in Section 11(a)(iii) hereof. 
  
 (kk) “Summary of Rights” shall mean
a summary of this Agreement substantially in the form attached hereto as Exhibit C. 
  
 (ll) “Total Exercise Price” shall have the meaning set forth in Section 4(a) hereof. 
  
 (mm) “Trading Day” shall mean a day
on which the principal national securities exchange on which a referenced security is listed or admitted to trading is open for the transaction of business or, if a referenced security is not listed or admitted to trading on any national securities
exchange, a Business Day. 
  
 (nn) A
“Triggering Event” shall be deemed to have occurred upon any Person becoming an Acquiring Person. 
  
 Section 2. Appointment of Rights Agent. The Company hereby appoints the Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The Company may from time to time appoint such co-Rights Agents as it may deem necessary or desirable, upon ten (10) days’ prior written notice to the Rights Agent. The
Rights Agent shall have no duty to supervise, and shall in no event be liable for, the acts or omissions of any co-Rights Agent. 
  
 Section 3. Issuance of Rights Certificates. 
  
 (a) Until the Distribution Date, (i) the Rights will be evidenced (subject to the provisions of Sections 3(b) and 3(c) hereof) by the
certificates for Common Shares registered in the names of the holders thereof (which certificates shall also be deemed to be Rights Certificates) and not by separate Rights Certificates and (ii) the right to receive Rights Certificates will be
transferable only in connection with the transfer of Common Shares. Until the earlier of the 

  

 7 

 
Distribution Date or the Expiration Date, the surrender for transfer of certificates for Common Shares shall also constitute the surrender for transfer of
the Rights associated with the Common Shares represented thereby. As soon as practicable after the Distribution Date, the Company will promptly notify the Rights Agent thereof and prepare and execute, the Rights Agent will countersign, and the
Company will send or cause to be sent (and the Rights Agent will, if requested and provided with all necessary information, send) by first-class, postage-prepaid mail, to each record holder of Common Shares as of the Close of Business on the
Distribution Date, at the address of such holder shown on the records of the Company, a Rights Certificate evidencing one Right for each Common Share so held, subject to adjustment as provided herein. In the event that an adjustment in the number of
Rights per Common Share has been made pursuant to Section 11 hereof, then at the time of distribution of the Rights Certificates, the Company shall make the necessary and appropriate rounding adjustments (in accordance with Section 14(a) hereof) so
that Rights Certificates representing only whole numbers of Rights are distributed and cash is paid in lieu of any fractional Rights (in accordance with Section 14(a) hereof). As of the Distribution Date, the Rights will be evidenced solely by such
Rights Certificates and may be transferred by the transfer of the Rights Certificates as permitted hereby, separately and apart from any transfer of Common Shares, and the holders of such Rights Certificates as listed in the records of the Company
or any transfer agent or registrar for the Rights shall be the record holders thereof. 
  
 (b) On the Record Date or as soon as practicable thereafter, the Company will send a copy of the Summary of Rights by first-class,
postage-prepaid mail, to each record holder of Common Shares as of the Close of Business on the Record Date, at the address of such holder shown on the records of the Company’s transfer agent and registrar. With respect to certificates for
Common Shares outstanding as of the Record Date, until the Distribution Date, the Rights will be evidenced by such certificates registered in the names of the holders thereof together with the Summary of Rights. 
  
 (c) Unless the Board of Directors of the Company by
resolution adopted at or before the time of the issuance of any Common Shares after the Record Date but prior to the earlier of the Distribution Date or the Expiration Date (or, in certain circumstances provided in Section 22 hereof, after the
Distribution Date) specifies to the contrary, Rights shall be issued in respect of all Common Shares that are so issued, and Certificates representing such Common Shares shall also be deemed to be certificates for Rights, and shall bear a legend in
substantially the following form: 
  
 THIS CERTIFICATE ALSO
EVIDENCES AND ENTITLES THE HOLDER HEREOF TO CERTAIN RIGHTS AS SET FORTH IN A RIGHTS AGREEMENT BETWEEN PAIN THERAPEUTICS, INC. AND MELLON INVESTOR SERVICES LLC, AS THE RIGHTS AGENT, DATED AS OF APRIL 28, 2005 (THE “RIGHTS AGREEMENT”), THE
TERMS OF WHICH ARE HEREBY INCORPORATED HEREIN BY REFERENCE AND A COPY OF WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF PAIN THERAPEUTICS, INC. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, SUCH RIGHTS WILL BE EVIDENCED
BY SEPARATE CERTIFICATES AND 

  

 8 

 
WILL NO LONGER BE EVIDENCED BY THIS CERTIFICATE. THE COMPANY WILL MAIL TO THE HOLDER OF THIS CERTIFICATE A COPY OF THE RIGHTS AGREEMENT WITHOUT CHARGE AFTER
RECEIPT OF A WRITTEN REQUEST THEREFOR. UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED TO, OR HELD BY, ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR ANY AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT), WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, MAY BECOME NULL AND VOID. 
  
 With respect to such certificates containing the foregoing legend, until the earlier of the Distribution Date or the Expiration Date, the Rights associated with the
Common Shares represented by such certificates shall be evidenced by such certificates alone, and the surrender for transfer of any such certificate shall also constitute the transfer of the Rights associated with the Common Shares represented
thereby. 
  
 (d) In the event that the Company
purchases or acquires any Common Shares after the Record Date but prior to the Distribution Date, any Rights associated with such Common Shares shall be deemed canceled and retired so that the Company shall not be entitled to exercise any Rights
associated with the Common Shares which are no longer outstanding. 
  
 Section 4. Form of Rights Certificates. 
  
 (a) The Rights Certificates (and the forms of election to purchase Common Shares and of assignment to be printed on the reverse thereof) shall be substantially in the form of Exhibit B hereto and may have such marks of identification
or designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate (but which do not, without the Rights Agent’s consent, affect the rights, duties or responsibilities of the Rights Agent) and are not
inconsistent with the provisions of this Agreement, or as may be required to comply with any applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange or a national market system, on
which the Rights may from time to time be listed or included, or to conform to usage. Subject to the provisions of Section 11 and Section 22 hereof, the Rights Certificates, whenever distributed, shall be dated as of the Record Date (or in the case
of Rights issued with respect to Common Shares issued by the Company after the Record Date, as of the date of issuance of such Common Shares) and on their face shall entitle the holders thereof to purchase such number of one-thousandths (0.001) of a
Preferred Share as shall be set forth therein at the price set forth therein (such exercise price per one one-thousandth (0.001) of a Preferred Share being hereinafter referred to as the “Exercise Price” and the aggregate
Exercise Price of all Preferred Shares issuable upon exercise of one Right being hereinafter referred to as the “Total Exercise Price”), but the number and type of securities purchasable upon the exercise of each Right and
the Exercise Price shall be subject to adjustment as provided herein. 
  

 9 

 (b) Any Rights Certificate issued pursuant to Section 3(a) or Section 22 hereof that
represents Rights beneficially owned by: (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a Post-Event Transferee, (iii) a Pre-Event Transferee or (iv) any subsequent transferee receiving transferred Rights from a
Post-Event Transferee or a Pre-Event Transferee, either directly or through one or more intermediate transferees, and any Rights Certificate issued pursuant to Section 6 or Section 11 hereof upon transfer, exchange, replacement or adjustment of any
other Rights Certificate referred to in this sentence, shall contain (to the extent the Rights Agent has written notice thereof and feasible) the following legend: 
  
 THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING
PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION
7(e) OF THE RIGHTS AGREEMENT. 
  
 Section 5. Countersignature and
Registration. 
  
 (a) The Rights Certificates
shall be executed on behalf of the Company by its Chairman of the Board, its Chief Executive Officer, its Chief Financial Officer, its President or any Vice President, either manually or by facsimile signature, and by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile signature, and shall have affixed thereto the Company’s seal (if any) or a facsimile thereof. The Rights Certificates shall be manually countersigned by the Rights Agent and shall not be
valid for any purpose unless countersigned. In case any officer of the Company who shall have signed any of the Rights Certificates shall cease to be such officer of the Company before countersignature by the Rights Agent and issuance and delivery
by the Company, such Rights Certificates, nevertheless, may be countersigned by the Rights Agent and issued and delivered by the Company with the same force and effect as though the person who signed such Rights Certificates on behalf of the Company
had not ceased to be such officer of the Company; and any Rights Certificate may be signed on behalf of the Company by any person who, at the actual date of the execution of such Rights Certificate, shall be a proper officer of the Company to sign
such Rights Certificate, although at the date of the execution of this Rights Agreement any such person was not such an officer. 
  
 (b) Following the Distribution Date, and receipt by the Rights Agent of written notice to that effect and any other necessary shareholder
information requested by the Rights Agent, the Rights Agent will keep or cause to be kept, at its office designated for such purposes, books for registration and transfer of the Rights Certificates issued hereunder. Such books shall show the names
and addresses of the respective holders of the Rights Certificates, the number of Rights evidenced on its face by each of the Rights Certificates and the date of each of the Rights Certificates. 
  

 10 

 Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed,
Lost or Stolen Rights Certificates. 
  
 (a)
Subject to the provisions of Sections 7(e), 14 and 24 hereof, at any time after the Close of Business on the Distribution Date, and at or prior to the Close of Business on the Expiration Date, any Rights Certificate or Rights Certificates may be
transferred, split up, combined or exchanged for another Rights Certificate or Rights Certificates, entitling the registered holder to purchase a like number of one-thousandths (0.001) of a Preferred Share (or, following a Triggering Event, other
securities, cash or other assets, as the case may be) as the Rights Certificate or Rights Certificates surrendered then entitled such holder to purchase. Any registered holder desiring to transfer, split up, combine or exchange any Rights
Certificate or Rights Certificates shall make such request in writing delivered to the Rights Agent, and shall surrender the Rights Certificate or Rights Certificates to be transferred, split up, combined or exchanged at the office of the Rights
Agent designated for such purpose. Neither the Rights Agent nor the Company shall be obligated to take any action whatsoever with respect to the transfer of any such surrendered Rights Certificate until the registered holder shall have properly
completed and signed the certificate contained in the form of assignment on the reverse side of such Rights Certificate and shall have provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company or the Rights Agent shall reasonably request. Thereupon the Rights Agent shall, subject to Sections 7(e), 14 and 24 hereof, countersign and deliver to the person entitled thereto a Rights Certificate
or Rights Certificates, as the case may be, as so requested registered in such name or names as may be designated by the surrendering registered holder. The Company may require payment from the registered holder of a sum sufficient to cover any tax
or governmental charge that may be imposed in connection with any transfer, split up, combination or exchange of Rights Certificates. 
  
 (b) Upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Rights Certificate, and, in case of loss, theft or destruction, of indemnity or security satisfactory to them, and, at the request of the Company or the Rights Agent, reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of the Rights Certificate if mutilated, the Company will make and deliver a new Rights Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Rights Certificate so lost, stolen, destroyed or mutilated. The Rights Agent shall have no duty or obligation to take any action under Sections 6, 7, 9, 10 and 13 of this Agreement, which require payment by a holder
of the Rights of applicable taxes and/or governmental charges, unless and until it is satisfied, in the absence of bad faith, that all such taxes and/or governmental charges have been paid. 
  
 Section 7. Exercise of Rights; Exercise Price; Expiration Date of Rights.

  
 (a) Subject to Sections 7(e), 23(b) and 24(b)
hereof, the registered holder of any Rights Certificate may exercise the Rights evidenced thereby (except as otherwise provided herein) 

  

 11 

 
in whole or in part at any time after the Distribution Date and prior to the Close of Business on the Expiration Date by surrender of the Rights Certificate,
with the form of election to purchase on the reverse side thereof duly executed, to the Rights Agent at the office of the Rights Agent designated for such purpose, together with payment of the Exercise Price for each one-thousandth (0.001) of a
Preferred Share (or, following a Triggering Event, other securities, cash or other assets as the case may be) as to which the Rights are exercised. 
  
 (b) The Exercise Price for each one-thousandth (0.001) of a Preferred Share issuable pursuant to the exercise of a Right shall initially
be $40.00 (forty dollars), shall be subject to adjustment from time to time as provided in Sections 11 and 13 hereof and shall be payable in lawful money of the United States of America in accordance with paragraph (c) below. 
  
 (c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase duly executed, accompanied by payment of the Exercise Price for the number of one-thousandths (0.001) of a Preferred Share (or, following a Triggering Event, other securities, cash or other
assets as the case may be) to be purchased and an amount equal to any applicable tax or charge required to be paid by the holder of such Rights Certificate in accordance with Section 9(e) hereof, the Rights Agent shall, subject to Section 20(k)
hereof, thereupon promptly (i) (A) requisition from any transfer agent of the Preferred Shares (or make available, if the Rights Agent is the transfer agent for the Preferred Shares) a certificate or certificates for the number of one-thousandths
(0.001) of a Preferred Share (or, following a Triggering Event, other securities, cash or other assets as the case may be) to be purchased and the Company hereby irrevocably authorizes its transfer agent to comply with all such requests or (B) if
the Company shall have elected to deposit the total number of one-thousandths (0.001) of a Preferred Share (or, following a Triggering Event, other securities, cash or other assets as the case may be) issuable upon exercise of the Rights hereunder
with a depository agent, requisition from the depository agent depository receipts representing such number of one-thousandths (0.001) of a Preferred Share (or, following a Triggering Event, other securities, cash or other assets as the case may be)
as are to be purchased (in which case certificates for the Preferred Shares (or, following a Triggering Event, other securities, cash or other assets as the case may be) represented by such receipts shall be deposited by the transfer agent with the
depository agent) and the Company hereby directs the depository agent to comply with such request, (ii) when appropriate, requisition from the Company the amount of cash to be paid in lieu of issuance of fractional shares in accordance with Section
14 hereof, (iii) after receipt of such certificates or depository receipts, cause the same to be delivered to or upon the order of the registered holder of such Rights Certificate, registered in such name or names as may be designated by such holder
and (iv) when appropriate, after receipt thereof, deliver such cash to or upon the order of the registered holder of such Rights Certificate. The payment of the Exercise Price (as such amount may be reduced (including to zero) pursuant to Section
11(a)(iii) hereof) and an amount equal to any applicable tax or charge required to be paid by the holder of such Rights Certificate in accordance with Section 9(e) hereof, may be made in cash or by certified bank check, cashier’s check or bank
draft payable to the order of the Company. In the event that the Company is obligated to issue securities of the Company other than Preferred Shares, pay cash 

  

 12 

 
and/or distribute other property pursuant to Section 11(a) hereof, the Company will make all arrangements necessary so that such other securities, cash
and/or other property are available for distribution by the Rights Agent, if and when necessary. 
  
 (d) In case the registered holder of any Rights Certificate shall exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining unexercised shall be issued by the Rights Agent to the registered holder of such Rights Certificate or to his or her duly authorized assigns, subject to the provisions of Section 14
hereof. 
  
 (e) Notwithstanding anything in this
Agreement to the contrary, from and after the first occurrence of a Triggering Event, any Rights beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any
such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such (a “Post-Event Transferee”), (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights or (B) a transfer which the Company’s Board of Directors has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 7(e) (a “Pre-Event Transferee”) or (iv) any subsequent transferee receiving transferred Rights from a Post-Event Transferee
or a Pre-Event Transferee, either directly or through one or more intermediate transferees, shall become null and void without any further action and no holder of such Rights shall have any rights whatsoever with respect to such Rights, whether
under any provision of this Agreement or otherwise. The Company shall notify the Rights Agent when this Section 7(e) applies and shall use all reasonable efforts to ensure that the provisions of this Section 7(e) and Section 4(b) hereof are complied
with, but neither the Company or the Rights Agent shall have any liability to any holder of Rights Certificates or to any other Person as a result of failure of the Company to make any determinations with respect to an Acquiring Person or any of
such Acquiring Person’s Affiliates, Associates or transferees hereunder. 
  
 (f) Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent nor the Company shall be obligated to undertake any action with respect to a registered holder upon the occurrence of any
purported exercise as set forth in Section 7 unless such registered holder shall, in addition to having complied with the requirements of subsection 7(a), have (i) properly completed and duly signed the certificate contained in the form of election
to purchase set forth on the reverse side of the Rights Certificate surrendered for such exercise and (ii) provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof as
the Company or the Rights Agent shall reasonably request. 
  
 Section 8. Cancellation and Destruction of Rights Certificates. 
  
 All Rights Certificates surrendered for the purpose of exercise, transfer, split up, combination or exchange shall, if surrendered to the Company or to any of its agents, be delivered to the Rights 

  

 13 

 
Agent for cancellation or in canceled form, or, if surrendered to the Rights Agent, shall be canceled by it, and no Rights Certificates shall be issued in
lieu thereof except as expressly permitted by any of the provisions of this Agreement. The Company shall deliver to the Rights Agent for cancellation and retirement, and the Rights Agent shall so cancel and retire, any Rights Certificate purchased
or acquired by the Company otherwise than upon the exercise thereof. The Rights Agent shall deliver all canceled Rights Certificates to the Company, or shall, at the written request of the Company, and after any Securities and Exchange Commission
required retention period, destroy such canceled Rights Certificates, and in such case shall deliver a certificate evidencing the destruction thereof to the Company. 
  
 Section 9. Reservation and Availability of Preferred Shares. 
  
 (a) The Company covenants and agrees that it will use its best efforts to cause to be reserved and kept
available out of its authorized and unissued Preferred Shares not reserved for another purpose (and, following the occurrence of a Triggering Event, out of its authorized and unissued Common Shares and/or other securities), the number of Preferred
Shares (and, following the occurrence of the Triggering Event, Common Shares and/or other securities) that will be sufficient to permit the exercise in full of all outstanding Rights. 
  
 (b) If the Company shall hereafter list any of its Preferred Shares on a national securities exchange, then
so long as the Preferred Shares (and, following the occurrence of a Triggering Event, Common Shares and/or other securities) issuable and deliverable upon exercise of the Rights may be listed on such exchange, the Company shall use its best efforts
to cause, from and after such time as the Rights become exercisable (but only to the extent that the Board of Directors of the Company determines that it is reasonably likely that the Rights will be exercised), all shares reserved for such issuance
to be listed on such exchange upon official notice of issuance upon such exercise. 
  
 (c) The Company shall use its best efforts to (i) file, as soon as practicable following the earliest date after the first occurrence of a
Triggering Event in which the consideration to be delivered by the Company upon exercise of the Rights is described in Section 11(a)(ii) or Section 11(a)(iii) hereof, or as soon as is required by law following the Distribution Date, as the case may
be, a registration statement under the Securities Act with respect to the securities purchasable upon exercise of the Rights on an appropriate form, (ii) cause such registration statement to become effective as soon as practicable after such filing
and (iii) cause such registration statement to remain effective (with a prospectus at all times meeting the requirements of the Securities Act) until the earlier of (A) the date as of which the Rights are no longer exercisable for such securities
and (B) the Expiration Date. The Company may temporarily suspend, for a period not to exceed ninety (90) days after the date set forth in clause (i) of the first sentence of this Section 9(c), the exercisability of the Rights in order to prepare and
file such registration statement and permit it to become effective. Upon any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect. 

  

 14 

 
The Company shall notify the Rights Agent whenever it makes a public announcement pursuant to this Section 9(c) and give the Rights Agent a copy of such
announcement. The Company will also take such action as may be appropriate under, or to ensure compliance with, the securities or “blue sky” laws of the various states in connection with the exercisability of the Rights. Notwithstanding
any provision of this Agreement to the contrary, the Rights shall not be exercisable in any jurisdiction, unless the requisite qualification in such jurisdiction shall have been obtained, or an exemption therefrom shall be available, and until a
registration statement has been declared and remains effective. 
  
 (d) The Company covenants and agrees that it will take all such action as may be necessary to ensure that all Preferred Shares (or other securities of the Company) delivered upon exercise of Rights shall, at the time
of delivery of the certificates for such securities (subject to payment of the Exercise Price), be duly and validly authorized and issued and fully paid and nonassessable. 
  
 (e) The Company further covenants and agrees that it will pay when due and payable any and all federal and
state transfer taxes and charges which may be payable in respect of the original issuance or delivery of the Rights Certificates or of any Preferred Shares (or other securities of the Company) upon the exercise of Rights. The Company shall not,
however, be required to pay any tax or charge which may be payable in respect of any transfer or delivery of Rights Certificates to a person other than, or the issuance or delivery of certificates or depository receipts for the Preferred Shares (or
other securities of the Company) in a name other than that of, the registered holder of the Rights Certificate evidencing Rights surrendered for exercise or to issue or to deliver any certificates or depository receipts for Preferred Shares (or
other securities of the Company) upon the exercise of any Rights until any such tax shall have been paid (any such tax or charge being payable by the holder of such Rights Certificate at the time of surrender) or until it has been established to the
Company’s satisfaction that no such tax is due. 
  
 Section
10. Record Date. Each Person in whose name any certificate for a number of one-thousandths (0.001) of a Preferred Share (or other securities of the Company) is issued upon the exercise of Rights shall for all purposes be deemed to have become the
holder of record of Preferred Shares (or other securities of the Company) represented thereby on, and such certificate shall be dated, the date upon which the Rights Certificate evidencing such Rights was duly surrendered and payment of the Total
Exercise Price with respect to which the Rights have been exercised (and any applicable taxes and charges) was made; provided, however, that if the date of such surrender and payment is a date upon which the transfer books of the
Company are closed, such Person shall be deemed to have become the record holder of such shares on, and such certificate shall be dated, the next succeeding Business Day on which the transfer books of the Company are open. Prior to the exercise of
the Rights evidenced thereby, the holder of a Rights Certificate shall not be entitled to any rights of a holder of Preferred Shares (or other securities of the Company) for which the Rights shall be exercisable, including, without limitation, the
right to vote, to receive dividends or other distributions or to exercise any preemptive rights, and shall not be entitled to receive any notice of any proceedings of the Company, except as provided herein. 
  

 15 

 Section 11. Adjustment of Exercise Price, Number of Shares or Number of Rights. The Exercise Price, the
number and kind of shares or other property covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11. 
  
 (a) (i) Anything in this Agreement to the contrary notwithstanding, in the event that the Company shall at
any time after the date of this Agreement (A) declare a dividend on the Preferred Shares payable in Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine the outstanding Preferred Shares (by reverse stock split or otherwise)
into a smaller number of Preferred Shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation), then, in each such event, except as otherwise provided in this Section 11 and Section 7(e) hereof: (1) the Exercise Price in effect at the time of the record date for such dividend or of the effective date of
such subdivision, combination or reclassification shall be adjusted so that the Exercise Price thereafter shall equal the result obtained by dividing the Exercise Price in effect immediately prior to such time by a fraction (the
“Adjustment Fraction”), the numerator of which shall be the total number of Preferred Shares (or shares of capital stock issued in such reclassification of the Preferred Shares) outstanding immediately following such time and
the denominator of which shall be the total number of Preferred Shares outstanding immediately prior to such time; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable upon exercise of such Right; and (2) the number of one-thousandths (0.001) of a Preferred Share (or share of such other capital stock) issuable upon the exercise of each
Right shall equal the number of one-thousandths (0.001) of a Preferred Share (or share of such other capital stock) as was issuable upon exercise of a Right immediately prior to the occurrence of the event described in clauses (A)-(D) of this
Section 11(a)(i), multiplied by the Adjustment Fraction; provided, however, that, no such adjustment shall be made pursuant to this Section 11(a)(i) to the extent that there shall have simultaneously occurred an event described in clause (A), (B),
(C) or (D) of Section 11(n) with a proportionate adjustment being made thereunder. Each Common Share that shall become outstanding after an adjustment has been made pursuant to this Section 11(a)(i) shall have associated with it the number of
Rights, exercisable at the Exercise Price and for the number of one-thousandths (0.001) of a Preferred Share (or shares of such other capital stock) as one Common Share has associated with it immediately following the adjustment made pursuant to
this Section 11(a)(i). 
  
 (ii) Subject to Section 24 of this Agreement, in the
event that a Triggering Event shall have occurred, then promptly following such Triggering Event each holder of a Right, except as provided in Section 7(e) hereof, shall thereafter have the right to receive for each Right, upon exercise thereof in
accordance with the terms of this Agreement and payment of the Exercise Price in effect immediately prior to the occurrence of the Triggering Event, in lieu of a number of one-thousandths (0.001) of a Preferred Share, such number of Common Shares of
the Company as shall equal the quotient obtained by dividing (A) the product obtained by multiplying (1) the Exercise Price in 

  

 16 

 
effect immediately prior to the occurrence of the Triggering Event by (2) the number of one-thousandths (0.001) of a Preferred Share for which a Right was
exercisable (or would have been exercisable if the Distribution Date had occurred) immediately prior to the first occurrence of a Triggering Event, by (B) fifty percent (50%) of the Current Per Share Market Price for Common Shares on the date of
occurrence of the Triggering Event; provided, however, that the Exercise Price and the number of Common Shares of the Company so receivable upon exercise of a Right shall be subject to further adjustment as appropriate in accordance
with Section 11(e) hereof to reflect any events occurring in respect of the Common Shares of the Company after the occurrence of the Triggering Event. 
  
 (iii) In lieu of issuing Common Shares in accordance with Section 11(a)(ii) hereof, the Company may, if the Company’s Board of Directors determines that such action
is necessary or appropriate and not contrary to the interest of holders of Rights and, in the event that the number of Common Shares which are authorized by the Company’s Amended and Restated Certificate of Incorporation but not outstanding or
reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights, or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company
shall: (A) determine the excess of (1) the value of the Common Shares issuable upon the exercise of a Right (the “Current Value”) over (2) the Exercise Price (such excess, the “Spread”) and (B) with
respect to each Right, make adequate provision to substitute for such Common Shares, upon exercise of the Rights, (1) cash, (2) a reduction in the Exercise Price, (3) other equity securities of the Company (including, without limitation, shares or
units of shares of any series of preferred stock which the Company’s Board of Directors has deemed to have the same value as Common Shares (such shares or units of shares of preferred stock are herein called “Common Stock
Equivalents”)), except to the extent that the Company has not obtained any necessary stockholder or regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any
necessary stockholder or regulatory approval for such issuance, (5) other assets or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Company’s
Board of Directors based upon the advice of a nationally recognized investment banking firm selected by the Company’s Board of Directors; provided, however, that if the Company shall not have made adequate provision to deliver
value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Triggering Event and (y) the date on which the Company’s right of redemption pursuant to Section 23(a) expires (the later of (x) and
(y) being referred to herein as the “Section 11(a)(ii) Trigger Date”), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, Common
Shares (to the extent available), except to the extent that the Company has not obtained any necessary stockholder or regulatory approval for such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the
Spread. If the Company’s Board of Directors shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of the Rights or that any necessary regulatory approval
for such issuance will be obtained, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder
approval for the authorization of such additional shares or take action to obtain such 

  

 17 

 
regulatory approval (such period, as it may be extended, the “Substitution Period”). To the extent that the Company determines that
some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights and (y) may suspend
the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares, to take any action to obtain any required regulatory approval and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall promptly notify the Rights Agent in writing and it shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public announcement, with prompt written notice to the Rights Agent, at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value
of the Common Shares shall be the Current Per Share Market Price of the Common Shares on the Section 11(a)(ii) Trigger Date and the value of any Common Stock Equivalent shall be deemed to have the same value as the Common Shares on such date.

  
 (b) In case the Company shall, at any time
after the date of this Agreement, fix a record date for the issuance of rights, options or warrants to all holders of Preferred Shares entitling such holders (for a period expiring within forty-five (45) calendar days after such record date) to
subscribe for or purchase Preferred Shares or Equivalent Shares or securities convertible into Preferred Shares or Equivalent Shares at a price per share (or having a conversion price per share, if a security convertible into Preferred Shares or
Equivalent Shares) less than the then Current Per Share Market Price of the Preferred Shares or Equivalent Shares on such record date, then, in each such case, the Exercise Price to be in effect after such record date shall be determined by
multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of Preferred Shares and Equivalent Shares (if any) outstanding on such record date, plus the number of Preferred
Shares or Equivalent Shares, as the case may be, which the aggregate offering price of the total number of Preferred Shares or Equivalent Shares, as the case may be, to be offered or issued (and/or the aggregate initial conversion price of the
convertible securities to be offered or issued) would purchase at such current market price, and the denominator of which shall be the number of Preferred Shares and Equivalent Shares (if any) outstanding on such record date, plus the number of
additional Preferred Shares or Equivalent Shares, as the case may be, to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event
shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. In case such subscription price may be paid in a consideration
part or all of which shall be in a form other than cash, the value of such consideration shall be as determined in good faith by the Company’s Board of Directors, whose determination shall be described in a statement filed with the Rights
Agent. Preferred Shares and Equivalent Shares owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed,
and in the event that 

  

 18 

 
such rights, options or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise Price which would then be in effect if such
record date had not been fixed. 
  
 (c) In case
the Company shall, at any time after the date of this Agreement, fix a record date for the making of a distribution to all holders of the Preferred Shares or of any class or series of Equivalent Shares (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend, if any, or a dividend payable in Preferred Shares) or
subscription rights, options or warrants (excluding those referred to in Section 11(b)), then, in each such case, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the Current Per Share Market Price of a Preferred Share or an Equivalent Share on such record date, less the fair market value per Preferred Share or Equivalent Share (as
determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to a Preferred Share or Equivalent Share, as the case may be, and the denominator of which shall be such Current Per Share Market Price of a Preferred Share or Equivalent Share on such record date;
provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. Such
adjustments shall be made successively whenever such a record date is fixed, and in the event that such distribution is not so made, the Exercise Price shall be adjusted to be the Exercise Price which would have been in effect if such record date
had not been fixed. 
  
 (d) Anything herein to
the contrary notwithstanding, no adjustment in the Exercise Price shall be required unless such adjustment would require an increase or decrease of at least one percent (1%) of the Exercise Price; provided, however, that any
adjustments which by reason of this Section 11(d) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 11 shall be made to the nearest cent or to the nearest
ten-thousandth (0.0001) of a Common Share or other share or one hundred-thousandth (0.00001) of a Preferred Share, as the case may be. Notwithstanding the first sentence of this Section 11(d), any adjustment required by this Section 11 shall be made
no later than the earlier of (i) three (3) years from the date of the transaction which requires such adjustment or (ii) the Expiration Date. 
  
 (e) If as a result of an adjustment made pursuant to Section 11(a) or Section 13(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock other than Preferred Shares, thereafter the number of such other shares so receivable upon exercise of any Right and, if required, the Exercise Price thereof, shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Preferred Shares contained in Sections 11(a), 11(b), 11(c), 11(d), 

  

 19 

 
11(g), 11(h), 11(i), 11(j), 11(k) and 11(l), and the provisions of Sections 7, 9, 10, 13 and 14 with respect to the Preferred Shares shall apply on like
terms to any such other shares. 
  
 (f) All
Rights originally issued by the Company subsequent to any adjustment made to the Exercise Price hereunder shall evidence the right to purchase, at the adjusted Exercise Price, the number of one-thousandths (0.001) of a Preferred Share purchasable
from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided herein. 
  
 (g) Unless the Company shall have exercised its election as provided in Section 11(h), upon each adjustment of the Exercise Price as a
result of the calculations made in Section 11(b) and (c), each Right outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Exercise Price, that number of Preferred Shares
(calculated to the nearest one hundred-thousandth (0.00001) of a share) obtained by (i) multiplying (x) the number of Preferred Shares covered by a Right immediately prior to this adjustment, by (y) the Exercise Price in effect immediately prior to
such adjustment of the Exercise Price, and (ii) dividing the product so obtained by the Exercise Price in effect immediately after such adjustment of the Exercise Price. 
  
 (h) The Company may elect on or after the date of any adjustment of the Exercise Price as a result of the
calculations made in Section 11(b) or (c) to adjust the number of Rights, in substitution for any adjustment in the number of Preferred Shares purchasable upon the exercise of a Right. Each of the Rights outstanding after such adjustment of the
number of Rights shall be exercisable for the number of one-thousandths (0.001) of a Preferred Share for which a Right was exercisable immediately prior to such adjustment. Each Right held of record prior to such adjustment of the number of Rights
shall become that number of Rights (calculated to the nearest one hundred-thousandth (0.00001)) obtained by dividing the Exercise Price in effect immediately prior to adjustment of the Exercise Price by the Exercise Price in effect immediately after
adjustment of the Exercise Price. The Company shall make a public announcement of its election to adjust the number of Rights, and notify the Rights Agent in writing, indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the date on which the Exercise Price is adjusted or any day thereafter, but, if any Rights Certificates have been issued, shall be at least ten (10) days later than the date of the public
announcement. If Rights Certificates have been issued, upon each adjustment of the number of Rights pursuant to this Section 11(h), the Company shall, as promptly as practicable, cause to be distributed to holders of record of Rights Certificates on
such record date Rights Certificates evidencing, subject to Section 14 hereof, the additional Rights to which such holders shall be entitled as a result of such adjustment, or, at the option of the Company, shall cause to be distributed to such
holders of record in substitution and replacement for the Rights Certificates held by such holders prior to the date of adjustment, and upon surrender thereof, if required by the Company, new Rights Certificates evidencing all the Rights to which
such holders shall be entitled after such adjustment. Rights Certificates so to be distributed shall be issued, executed and delivered by the Company and countersigned and delivered by the Rights Agent in the manner provided for herein (and may
bear, at 

  

 20 

 
the option of the Company, the adjusted Exercise Price) and shall be registered in the names of the holders of record of Rights Certificates on the record
date specified in the public announcement. 
  
 (i) Irrespective of any adjustment or change in the Exercise Price or the number of Preferred Shares issuable upon the exercise of the Rights, the Rights Certificates theretofore and thereafter issued may continue to express the Exercise
Price per one one-thousandth (0.001) of a Preferred Share and the number of one-thousandths (0.001) of a Preferred Share which were expressed in the initial Rights Certificates issued hereunder. 
  
 (j) Before taking any action that would cause an adjustment
reducing the Exercise Price below the par or stated value, if any, of the number of one-thousandths (0.001) of a Preferred Share issuable upon exercise of the Rights, the Company shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally issue as fully paid and nonassessable shares such number of one-thousandths (0.001) of a Preferred Share at such adjusted Exercise Price. 
  
 (k) In any case in which this Section 11 shall require that
an adjustment in the Exercise Price be made effective as of a record date for a specified event, the Company may elect to defer (and shall promptly notify the Rights Agent in writing of any such election) until the occurrence of such event the
issuing to the holder of any Right exercised after such record date of the number of one-thousandths (0.001) of a Preferred Share and other capital stock or securities of the Company, if any, issuable upon such exercise over and above the number of
one-thousandths (0.001) of a Preferred Share and other capital stock or securities of the Company, if any, issuable upon such exercise on the basis of the Exercise Price in effect prior to such adjustment; provided, however, that the
Company shall deliver to such holder a due bill or other appropriate instrument evidencing such holder’s right to receive such additional shares (fractional or otherwise) upon the occurrence of the event requiring such adjustment. 

 
 (l) Anything in this Section 11 to the contrary
notwithstanding, prior to the Distribution Date, the Company shall be entitled to make such reductions in the Exercise Price, in addition to those adjustments expressly required by this Section 11, as and to the extent that it in its sole discretion
shall determine to be advisable in order that any (i) consolidation or subdivision of the Preferred or Common Shares, (ii) issuance wholly for cash of any Preferred or Common Shares at less than the current market price, (iii) issuance wholly for
cash of Preferred or Common Shares or securities which by their terms are convertible into or exchangeable for Preferred or Common Shares, (iv) stock dividends or (v) issuance of rights, options or warrants referred to in this Section 11, hereafter
made by the Company to holders of its Preferred or Common Shares shall not be taxable to such stockholders. 
  
 (m) The Company covenants and agrees that, after the Distribution Date, it will not, except as permitted by Sections 23, 24 or 27 hereof,
take (or permit to be taken) any action if at the 

  

 21 

 
time such action is taken it is reasonably foreseeable that such action will diminish substantially or otherwise eliminate the benefits intended to be
afforded by the Rights. 
  
 (n) In the event that
the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Shares payable in Common Shares, (B) subdivide the outstanding Common Shares, (C) combine the outstanding Common Shares (by reverse stock split or
otherwise) into a smaller number of Common Shares, or (D) issue any shares of its capital stock in a reclassification of the Common Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation), then, in each such event, except as otherwise provided in this Section 11(a) and Section 7(e) hereof: (1) each Common Share (or shares of capital stock issued in such reclassification of the Common Shares)
outstanding immediately following such time shall have associated with it the number of Rights as were associated with one Common Share immediately prior to the occurrence of the event described in clauses (A)-(D) above; (2) the Exercise Price in
effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification shall be adjusted so that the Exercise Price thereafter shall equal the result obtained by multiplying the Exercise
Price in effect immediately prior to such time by a fraction, the numerator of which shall be the total number of Common Shares outstanding immediately prior to the event described in clauses (A)-(D) above, and the denominator of which shall be the
total number of Common Shares outstanding immediately after such event; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital
stock of the Company issuable upon exercise of such Right; and (3) the number of one-thousandths (0.001) of a Preferred Share (or shares of such other capital stock) issuable upon the exercise of each Right outstanding after such event shall equal
the number of one-thousandths (0.001) of a Preferred Share (or shares of such other capital stock) as were issuable with respect to one Right immediately prior to such event. Each Common Share that shall become outstanding after an adjustment has
been made pursuant to this Section 11(n) shall have associated with it the number of Rights, exercisable at the Exercise Price and for the number of one-thousandths (0.001) of a Preferred Share (or shares of such other capital stock) as one Common
Share has associated with it immediately following the adjustment made pursuant to this Section 11(n). If an event occurs which would require an adjustment under both this Section 11(n) and Section 11(a)(ii) hereof, the adjustment provided for in
this Section 11(n) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof. 
  
 Section 12. Certificate of Adjusted Exercise Price or Number of Shares. Whenever an adjustment is made as provided in Sections 11 and 13 hereof, the
Company shall promptly (a) prepare a certificate setting forth such adjustment and a brief statement of the facts and computations accounting for such adjustment, (b) file with the Rights Agent and with each transfer agent for the Preferred Shares a
copy of such certificate and (c) mail a brief summary thereof to each holder of a Rights Certificate in accordance with Section 26 hereof. Notwithstanding the foregoing sentence, the failure of the Company to make such certification or give such
notice shall not affect the validity of such adjustment or the force or effect of the requirement for such adjustment. The 

  

 22 

 
Rights Agent shall be fully protected in relying on any such certificate and on any adjustment or statement contained therein and shall not be deemed to have
knowledge of or duty with respect to such adjustment or any such statement unless and until it shall have received such certificate. 
  
 Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power. 
  
 (a) In the event that, following a Triggering Event, directly or indirectly: 
  
 (i) the Company shall consolidate with, or merge with and into, any other Person (other than
a wholly-owned Subsidiary of the Company in a transaction the principal purpose of which is to change the state of incorporation of the Company and which complies with Section 11(m) hereof); 
  
 (ii) any Person shall consolidate with the Company, or merge with and into the Company and
the Company shall be the continuing or surviving corporation of such consolidation or merger and, in connection with such merger, all or part of the Common Shares shall be changed into or exchanged for stock or other securities of any other Person
(or the Company); or 
  
 (iii) the Company shall sell or otherwise transfer (or
one or more of its Subsidiaries shall sell or otherwise transfer), in one or more transactions, assets or earning power aggregating fifty percent (50%) or more of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to
any other Person or Persons (other than the Company or one or more of its wholly owned Subsidiaries in one or more transactions, each of which individually (and together) complies with Section 11(m) hereof), 
  
 then, concurrent with and in each such case, 
  
 (A) each holder of a Right (except as provided in Section
7(e) hereof) shall thereafter have the right to receive, upon the exercise thereof at a price equal to the Total Exercise Price applicable immediately prior to the occurrence of the Section 13 Event in accordance with the terms of this Agreement,
such number of validly authorized and issued, fully paid, nonassessable and freely tradeable Common Shares of the Principal Party (as hereinafter defined), free of any liens, encumbrances, rights of first refusal or other adverse claims, as shall be
equal to the result obtained by dividing such Total Exercise Price by an amount equal to fifty percent (50%) of the Current Per Share Market Price of the Common Shares of such Principal Party on the date of consummation of such Section 13 Event,
provided, however, that the Exercise Price and the number of Common Shares of such Principal Party so receivable upon exercise of a Right shall be subject to further adjustment as appropriate in accordance with Section 11(e) hereof;

  
 (B) such Principal Party shall thereafter be
liable for, and shall assume, by virtue of such Section 13 Event, all the obligations and duties of the Company pursuant to this Agreement; 
  
 (C) the term “Company” shall thereafter be deemed to refer to such Principal Party, it being specifically intended that the
provisions of Section 11 hereof shall apply only to such Principal Party following the first occurrence of a Section 13 Event; 
  

 23 

 (D) such Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of its Common Shares) in connection with the consummation of any such transaction as may be necessary to ensure that the provisions hereof shall thereafter be applicable, as nearly as reasonably may be, in relation
to its Common Shares thereafter deliverable upon the exercise of the Rights; and 
  
 (E) upon the subsequent occurrence of any consolidation, merger, sale or transfer of assets or other extraordinary transaction in respect
of such Principal Party, each holder of a Right shall thereupon be entitled to receive, upon exercise of a Right and payment of the Total Exercise Price as provided in this Section 13(a), such cash, shares, rights, warrants and other property which
such holder would have been entitled to receive had such holder, at the time of such transaction, owned the Common Shares of the Principal Party receivable upon the exercise of such Right pursuant to this Section 13(a), and such Principal Party
shall take such steps (including, but not limited to, reservation of shares of stock) as may be necessary to permit the subsequent exercise of the Rights in accordance with the terms hereof for such cash, shares, rights, warrants and other property.

  
 (F) For purposes hereof, the “earning
power” of the Company and its Subsidiaries shall be determined in good faith by the Company’s Board of Directors on the basis of the operating income of each business operated by the Company and its Subsidiaries during the three fiscal
years preceding the date of such determination (or, in the case of any business not operated by the Company or any Subsidiary during three full fiscal years preceding such date, during the period such business was operated by the Company or any
Subsidiary). 
  
 (b) For purposes of this
Agreement, the term “Principal Party” shall mean: 
  
 (i)
in the case of any transaction described in clause (i) or (ii) of Section 13(a) hereof: (A) the Person that is the issuer of the securities into which the Common Shares are converted in such merger or consolidation, or, if there is more than one
such issuer, the issuer the Common Shares of which have the greatest aggregate market value of shares outstanding, or (B) if no securities are so issued, (x) the Person that is the other party to the merger, if such Person survives said merger, or,
if there is more than one such Person, the Person the Common Shares of which have the greatest aggregate market value of shares outstanding or (y) if the Person that is the other party to the merger does not survive the merger, the Person that does
survive the merger (including the Company if it survives) or (z) the Person resulting from the consolidation; and 
  
 (ii) in the case of any transaction described in clause (iii) of Section 13(a) hereof, the Person that is the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or transactions, or, if more than one Person that is a party to such transaction or transactions receives the same portion of the assets or earning power so transferred and each such portion
would, were it not for the other equal portions, constitute the greatest portion of the assets or earning power so transferred, or if the Person receiving the greatest portion of the assets or earning power cannot be determined, whichever of such
Persons is the issuer of Common Shares having the greatest aggregate market value of shares outstanding; provided that in any such case described in the foregoing clause (b)(i) or (b)(ii), if the Common Shares of such Person are not at such
time or 

  

 24 

 
have not been continuously over the preceding 12-month period registered under Section 12 of the Exchange Act, then (1) if such Person is a direct or
indirect Subsidiary of another Person the Common Shares of which are and have been so registered, the term “Principal Party” shall refer to such other Person, or (2) if such Person is a Subsidiary, directly or indirectly, of more than one
Person, the Common Shares of which are and have been so registered, the term “Principal Party” shall refer to whichever of such Persons is the issuer of Common Shares having the greatest aggregate market value of shares outstanding, or (3)
if such Person is owned, directly or indirectly, by a joint venture formed by two or more Persons that are not owned, directly or indirectly by the same Person, the rules set forth in clauses (1) and (2) above shall apply to each of the owners
having an interest in the venture as if the Person owned by the joint venture was a Subsidiary of both or all of such joint venturers, and the Principal Party in each such case shall bear the obligations set forth in this Section 13 in the same
ratio as its interest in such Person bears to the total of such interests. 
  
 (c) The Company shall not consummate any Section 13 Event unless the Principal Party shall have a sufficient number of authorized Common Shares that have not been issued or reserved for issuance to permit the exercise
in full of the Rights in accordance with this Section 13 and unless prior thereto the Company and such issuer shall have executed and delivered to the Rights Agent a supplemental agreement confirming that such Principal Party shall, upon
consummation of such Section 13 Event, assume this Agreement in accordance with Sections 13(a) and 13(b) hereof, that all rights of first refusal or preemptive rights in respect of the issuance of Common Shares of such Principal Party upon exercise
of outstanding Rights have been waived, that there are no rights, warrants, instruments or securities outstanding or any agreements or arrangements which, as a result of the consummation of such transaction, would eliminate or substantially diminish
the benefits intended to be afforded by the Rights and that such transaction shall not result in a default by such Principal Party under this Agreement, and further providing that, as soon as practicable after the date of such Section 13 Event, such
Principal Party will: 
  
 (i) prepare and file a registration statement under the
Securities Act with respect to the Rights and the securities purchasable upon exercise of the Rights on an appropriate form, use its best efforts to cause such registration statement to become effective as soon as practicable after such filing and
use its best efforts to cause such registration statement to remain effective (with a prospectus at all times meeting the requirements of the Securities Act) until the Expiration Date, and similarly comply with applicable state securities laws;

  
 (ii) use its best efforts to list (or continue the listing of) the Rights and
the securities purchasable upon exercise of the Rights on a national securities exchange or to meet the eligibility requirements for quotation on Nasdaq and list (or continue the listing of) the Rights and the securities purchasable upon exercise of
the Rights on Nasdaq; and 
  
 (iii) deliver to holders of the Rights historical
financial statements for such Principal Party which comply in all respects with the requirements for registration on Form 10 (or any successor form) under the Exchange Act. 
  
 In the event that at any time after the occurrence of a Triggering Event some or all of the Rights shall not have been
exercised at the time of a transaction described in this Section 13, the 

  

 25 

 
Rights which have not theretofore been exercised shall thereafter be exercisable in the manner described in Section 13(a) (without taking into account any
prior adjustment required by Section 11(a)(ii)). 
  
 (d) In case the “Principal Party” for purposes of Section 13(b) hereof has provision in any of its authorized securities or in its certificate of incorporation or by-laws or other instrument governing its corporate affairs, which
provision would have the effect of (i) causing such Principal Party to issue (other than to holders of Rights pursuant to Section 13 hereof), in connection with, or as a consequence of, the consummation of a Section 13 Event, Common Shares or
Equivalent Shares of such Principal Party at less than the then Current Per Share Market Price thereof or securities exercisable for, or convertible into, Common Shares or Equivalent Shares of such Principal Party at less than such then Current Per
Share Market Price, or (ii) providing for any special payment, tax or similar provision in connection with the issuance of the Common Shares of such Principal Party pursuant to the provisions of Section 13 hereof, then, in such event, the Company
hereby agrees with each holder of Rights that it shall not consummate any such transaction unless prior thereto the Company and such Principal Party shall have executed and delivered to the Rights Agent a supplemental agreement providing that the
provision in question of such Principal Party shall have been canceled, waived or amended, or that the authorized securities shall be redeemed, so that the applicable provision will have no effect in connection with or as a consequence of, the
consummation of the proposed transaction. 
  
 (e)
The Company covenants and agrees that it shall not, at any time after the Distribution Date, effect or permit to occur any Section 13 Event, if (i) at the time or immediately after such Section 13 Event there are any rights, warrants or other
instruments or securities outstanding or agreements in effect which would substantially diminish or otherwise eliminate the benefits intended to be afforded by the Rights, (ii) prior to, simultaneously with or immediately after such Section 13
Event, the stockholders of the Person who constitutes, or would constitute, the “Principal Party” for purposes of Section 13(b) hereof shall have received a distribution of Rights previously owned by such Person or any of its Affiliates or
Associates or (iii) the form or nature of organization of the Principal Party would preclude or limit the exercisability of the Rights. 
  
 (f) The provisions of this Section 13 shall similarly apply to successive mergers or consolidations or sales or other transfers.

  
 Section 14. Fractional Rights and Fractional Shares.

  
 (a) The Company shall not be required to
issue fractions of Rights or to distribute Rights Certificates which evidence fractional Rights. In lieu of such fractional Rights, there shall be paid to the registered holders of the Rights Certificates with regard to which such fractional Rights
would otherwise be issuable, an amount in cash equal to the same fraction of the current market value of a whole Right. For the purposes of this Section 14(a), the current market value of a whole Right shall be the closing price of the Rights for
the Trading Day immediately prior to the 

  

 26 

 
date on which such fractional Rights would have been otherwise issuable, as determined pursuant to the second sentence of Section 1(i) hereof. 
  
 (b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions that are integral multiples of one one-thousandth (0.001) of a Preferred Share) upon exercise of the Rights or to distribute certificates which evidence fractional Preferred Shares (other than fractions that
are integral multiples of one one-thousandth (0.001) of a Preferred Share). Interests in fractions of Preferred Shares in integral multiples of one one-thousandth (0.001) of a Preferred Share may, at the election of the Company, be evidenced by
depository receipts, pursuant to an appropriate agreement between the Company and a depository selected by it; provided, that such agreement shall provide that the holders of such depository receipts shall have all the rights, privileges and
preferences to which they are entitled as beneficial owners of the Preferred Shares represented by such depository receipts. In lieu of fractional Preferred Shares that are not integral multiples of one one-thousandth (0.001) of a Preferred Share,
the Company shall pay to the registered holders of Rights Certificates at the time such Rights are exercised as herein provided an amount in cash equal to the same fraction of the current market value of a Preferred Share. For purposes of this
Section 14(b), the current market value of a Preferred Share shall be the product equal to (x) one thousand multiplied by (y) the closing price of a Common Share (as determined pursuant to the second sentence of Section 1(i) hereof) for the Trading
Day immediately prior to the date of such exercise. 
  
 (c) The Company shall not be required to issue fractions of Common Shares or to distribute certificates which evidence fractional Common Shares upon the exercise or exchange of Rights. In lieu of such fractional Common Shares, the Company
shall pay to the registered holders of Rights Certificates at the time such Rights are exercised as herein provided an amount in cash equal to the same fraction of the current market value of a Common Share. For purposes of this Section 14(c), the
current market value of a Common Share shall be the closing price of a Common Share (as determined pursuant to the second sentence of Section 1(i) hereof) for the Trading Day immediately prior to the date of such exercise. 
  
 (d) The holder of a Right by the acceptance of the Right
expressly waives his or her right to receive any fractional Rights or any fractional shares (other than fractions that are integral multiples of one one-thousandth (0.001) of a Preferred Share) upon exercise of a Right. 
  
 (e) Whenever a payment for fractional rights or fractional
shares is to be made by the Rights Agent, the Company shall (i) promptly prepare and deliver to the Rights Agent a certificate setting forth in reasonable detail the facts related to such payment and the prices and/or formulas utilized in
calculating such payments, and (ii) provide sufficient monies to the Rights Agent in the form of fully collected funds to make such payments. The Rights Agent shall be fully protected in relying upon such a certificate and (i) shall not be deemed to
have knowledge of any payment for fractional rights or fractional shares under any section of this Agreement relating to the payment of fractional Rights or fractional shares, unless and until the Rights Agent shall have received such a certificate,
and (ii) shall not be deemed to have any duty with respect to payment 

  

 27 

 
for fractional Rights or fractional shares under any Section of this Agreement relating to the payment of fractional rights or fractional shares, unless and
until the Rights Agent shall have received sufficient monies for such payment. 
  
 Section 15. Rights of Action. 
  
 (a) All rights of action in respect of this Agreement, excepting the rights of action given to the Rights Agent pursuant to Section 18 and Section 20 hereof, are vested in the respective registered holders of the
Rights Certificates (and, prior to the Distribution Date, the registered holders of the Common Shares); and any registered holder of any Rights Certificate (or, prior to the Distribution Date, of the Common Shares), without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the Distribution Date, of the Common Shares), may, in his or her own behalf and for his or her own benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his or her right to exercise the Rights evidenced by such Rights Certificate in the manner provided in such Rights Certificate and in this Agreement. Without limiting the foregoing or
any remedies available to the holders of Rights, it is specifically acknowledged that the holders of Rights would not have an adequate remedy at law for any breach of this Agreement and will be entitled to specific performance of the obligations
under, and injunctive relief against actual or threatened violations of, the obligations of any Person subject to this Agreement. 
  
 (b) Notwithstanding anything in this Agreement to the contrary, neither the Company nor the Rights Agent shall have any liability to any
holder of a Right or other Person as a result of its inability to perform any of its obligations under this Agreement by reason of any preliminary or permanent injunction or other order, judgment, decree or ruling (whether interlocutory or final)
issued by a court or by a governmental, regulatory, self-regulatory or administrative agency or commission, or any statute, rule, regulation or executive order promulgated or enacted by any governmental authority, prohibiting or otherwise
restraining performance of such obligation; provided, however, that the Company must use all reasonable efforts to have any such injunction, order, judgment, decree or ruling lifted or otherwise overturned as soon as possible. 
  
 Section 16. Agreement of Rights Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent and with every other holder of a Right that: 
  
 (a) prior to the Distribution Date, the Rights will be transferable only in connection with the transfer of the Common Shares; 

 
 (b) after the Distribution Date, the Rights Certificates
are transferable only on the registry books of the Rights Agent if surrendered at the office or offices of the Rights Agent designated for such purposes, duly endorsed or accompanied by a proper instrument of transfer and with the appropriate forms
and certificates fully executed; and 
  

 28 

 (c) subject to Sections 6(a) and 7(f) hereof, the Company and the Rights Agent may deem
and treat the Person in whose name the Rights Certificate (or, prior to the Distribution Date, the associated Common Shares certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations
of ownership or writing on the Rights Certificates or the associated Common Shares certificate made by anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent shall be affected by
any notice to the contrary. 
  
 Section 17. Rights Certificate
Holder Not Deemed a Stockholder. No holder, as such, of any Rights Certificate shall be entitled to vote, receive dividends or be deemed for any purpose to be the holder of the Preferred Shares or any other securities of the Company which may at any
time be issuable on the exercise of the Rights represented thereby, nor shall anything contained herein or in any Rights Certificate be construed to confer upon the holder of any Rights Certificate, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as specifically provided in Section 25 hereof), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by such Rights Certificate shall have been exercised in accordance with the
provisions hereof. 
  
 Section 18. Concerning the Rights Agent.

  
 (a) The Company agrees to pay to the Rights
Agent reasonable compensation for all services rendered by it hereunder and, from time to time, on demand of the Rights Agent, its reasonable expenses and counsel fees and other disbursements incurred in the preparation, delivery, amendment,
administration and execution of this Agreement and the exercise and performance of its duties hereunder. The Company also agrees to indemnify the Rights Agent for, and to hold it harmless against, any loss, liability damage, judgment, fine, penalty,
claim, demand, settlement, cost or expense (including, without limitation, reasonable fees and expenses of legal counsel, both in actions by the Company against the Rights Agent and in actions by holders of the Rights against the Rights Agent),
incurred without gross negligence, bad faith or willful misconduct on the part of the Rights Agent, (which gross negligence, bad faith or willful misconduct must be determined by a final order, judgment, decree or ruling of a court of competent
jurisdiction), for any action taken, suffered, or omitted to be taken by the Rights Agent in connection with the acceptance and administration of this Agreement, including, without limitation, the costs and expenses of defending against any claim of
liability in the premises. The costs and expenses incurred in enforcing this right of indemnification shall be paid by the Company. The provisions of this Section 18 and Section 20 below shall survive the termination of this Agreement, the exercise
or expiration of the Rights and the resignation, replacement or removal of the Rights Agent. 
  
 (b) The Rights Agent shall be authorized and protected and shall incur no liability for, or in respect of any action taken, suffered or
omitted by it in connection with, its acceptance and administration of this Agreement, and the exercise and performance of its duties hereunder in 

  

 29 

 
reliance upon any Rights Certificate or certificate for the Preferred Shares or Common Shares or for other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement or other paper or document reasonably believed by it to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons, or otherwise upon the advice of counsel as set forth in Section 20 hereof. The Rights Agent shall not be deemed to have knowledge of any event of which it was supposed to receive notice
thereof hereunder, and the Rights Agent shall be fully protected and shall incur no liability for failing to take any action in connection therewith unless and until it has received such notice 
  
 Section 19. Merger or Consolidation or Change of Name of Rights Agent.

  
 (a) Any Person into which the Rights Agent or
any successor Rights Agent may be merged or with which it may be consolidated, or any Person resulting from any merger or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or any Person succeeding to the
stockholder services business of the Rights Agent or any successor Rights Agent, shall be the successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties
hereto; provided, however, that such Person would be eligible for appointment as a successor Rights Agent under the provisions of Section 21 hereof. In case at the time such successor Rights Agent shall succeed to the agency created by this
Agreement, any of the Rights Certificates shall have been countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of the predecessor Rights Agent and deliver such Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have been countersigned, any successor Rights Agent may countersign such Rights Certificates either in the name of the predecessor Rights Agent or in the name of the successor Rights Agent;
and in all such cases such Rights Certificates shall have the full force provided in the Rights Certificates and in this Agreement. 
  
 (b) In case at any time the name of the Rights Agent shall be changed and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Rights Certificates so countersigned; and in case at that time any of the Rights Certificates shall not have been countersigned, the
Rights Agent may countersign such Rights Certificates either in its prior name or in its changed name; and in all such cases such Rights Certificates shall have the full force provided in the Rights Certificates and in this Agreement. 
  
 Section 20. Duties of Rights Agent. The Rights Agent undertakes to perform
only the duties and obligations expressly imposed by this Agreement (and no implied duties or obligations) upon the following terms and conditions, by all of which the Company and the holders of Rights Certificates, by their acceptance thereof,
shall be bound: 
  
 (a) The Rights Agent may
consult with legal counsel (who may be legal counsel for the Company or any employee of the Rights Agent), and the advice or opinion of such counsel shall 

  

 30 

 
be full and complete authorization and protection to the Rights Agent and the Rights Agent shall incur no liability for or in respect of any action taken,
suffered, or omitted by it in the absence of bad faith and in accordance with such advice or opinion. 
  
 (b) Whenever in the performance of its duties under this Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring Person and the determination of Current Per Share Market Price) be proved or established by the Company prior to taking, suffering or omitting any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by any one of the Chairman of the Board, the Chief Executive Officer, the President,
any Vice President, the Chief Financial Officer, the Secretary or any Assistant Secretary of the Company and delivered to the Rights Agent; and such certificate shall be full and complete authorization and protection to the Rights Agent and the
Rights Agent shall incur no liability for any action taken or suffered or omitted to be taken by it in the absence of bad faith under the provisions of this Agreement in reliance upon such certificate. 
  
 (c) The Rights Agent shall be liable hereunder to the
Company and any other Person only for its own gross negligence, bad faith or willful misconduct (which gross negligence, bad faith or willful misconduct must be determined by a final order, judgment, decree or ruling of a court of competent
jurisdiction). Anything to the contrary notwithstanding, in no event shall the Rights Agent be liable for special, punitive, indirect, consequential or incidental loss or damage of any kind whatsoever (including but not limited to lost profits),
even if the Rights Agent has been advised of the likelihood of such loss or damage. Any liability of the Rights Agent under this Agreement will be limited to the amount of annual fees paid by the Company to the Rights Agent. 
  
 (d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in the Rights Certificates (except its countersignature thereof) or be required to verify the same, but all such statements and recitals are and shall be deemed to have been
made by the Company only. 
  
 (e) The Rights
Agent shall not have any liability for or be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due execution hereof by the Rights Agent) or in respect of the validity or execution
of any Rights Certificate (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Rights Certificate; nor shall it be responsible or liable
for any change in the exercisability of the Rights or any adjustment in the terms of the Rights (including the manner, method or amount thereof) provided for in Sections 3, 11, 13, 23 or 24, or the ascertaining of the existence of facts that would
require any such change or adjustment (except with respect to the exercise of Rights evidenced by Rights Certificates after receipt by the Rights Agent of a certificate furnished pursuant to Section 12 describing such change or adjustment upon which
the Rights Agent may rely); nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or 

  

 31 

 
reservation of any Preferred Shares to be issued pursuant to this Agreement or any Rights Certificate or as to whether any Preferred Shares will, when
issued, be validly authorized and issued, fully paid and nonassessable. 
  
 (f) The Company agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by the Rights Agent of the provisions of this Agreement. 
  
 (g) The Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from
any one of the Chairman of the Board, the Chief Executive Officer, the President, any Vice President, the Chief Financial Officer, the Secretary or any Assistant Secretary of the Company, and to apply to such officers for advice or instructions in
connection with its duties, and such instructions shall be full authorization and protection to the Rights Agent and the Rights Agent shall not be liable for or in respect of any action taken, suffered, or omitted by it in the absence of bad faith
in accordance with instructions of any such officer or for any delay in acting while waiting for those instructions. The Rights Agent shall be fully authorized and protected in relying, in the absence of bad faith, upon the most recent instructions
received by any such officer. Any application by the Rights Agent for written instructions from the Company may, at the option of the Rights Agent, set forth in writing any action proposed to be taken, suffered, or omitted by the Rights Agent under
this Rights Agreement and the date on and/or after which such action shall be taken or suffered or such omission shall be effective. The Rights Agent shall not be liable for any action taken or suffered by, or omission of, the Rights Agent in
accordance with a proposal included in any such application on or after the date specified in such application (which date shall not be less than five (5) Business Days after the date on which any officer of the Company actually receives such
application, unless any such officer shall have consented in writing to an earlier date) unless, prior to taking any such action (or the effective date in the case of an omission), the Rights Agent shall have received written instructions in
response to such application specifying the action to be taken, suffered, or omitted. 
  
 (h) The Rights Agent and any stockholder, affiliate, director, officer or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not Rights
Agent under this Agreement. Nothing herein shall preclude the Rights Agent or any such stockholder, affiliate, director, officer or employee from acting in any other capacity for the Company or for any other Person. 
  
 (i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself (through its directors, officers or employees) or by or through its attorneys or agents, and the Rights Agent shall not be answerable or accountable for any act,
default, neglect or misconduct of any such attorneys or agents or for any 

  

 32 

 
loss to the Company resulting from any such act, default, neglect or misconduct, absent gross negligence, bad faith or willful misconduct, in the selection
and continued employment thereof which gross negligence, bad faith or willful misconduct must be determined by a final order, judgment, decree or ruling of a court of competent jurisdiction. 
  
 (j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of its rights if there shall be grounds, in the absence of bad faith, for believing that repayment
of such funds or adequate indemnification against such risk or liability is not assured to it. 
  
 (k) If, with respect to any Rights Certificate surrendered to the Rights Agent for exercise or transfer, the certificate attached to the
form of assignment or form of election to purchase, as the case may be, has either not been completed or indicates an affirmative response to clause 1 and/or 2 thereof, the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company. 
  
 Section 21. Change of Rights Agent. The Rights Agent or any successor Rights Agent may resign and be discharged from its duties under this Agreement upon thirty (30) days’ notice in writing mailed to the Company
by registered or certified mail. The Company may remove the Rights Agent or any successor Rights Agent upon thirty (30) days’ notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Preferred Shares and the Common Shares by registered or certified mail, and to the holders of the Rights Certificates by first-class mail. If the Rights Agent shall resign or be removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Rights Agent. If the Company shall fail to make such appointment within a period of thirty (30) days after giving notice of such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a Rights Certificate (who shall, with such notice, submit his or her Rights Certificate for inspection by the Company), then the registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for the appointment of a new Rights Agent. After appointment, the successor Rights Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any property at the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective date of any such appointment, the Company shall file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Preferred Shares and the
Common Shares, and mail a notice thereof in writing to the registered holders of the Rights Certificates. Failure to give any notice provided for in this Section 21, however, or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be. 
  

 33 

 Section 22. Issuance of New Rights Certificates. Notwithstanding any of the provisions of this Agreement
or of the Rights to the contrary, the Company may, at its option, issue new Rights Certificates evidencing Rights in such form as may be approved by its Board of Directors to reflect any adjustment or change in the Exercise Price and the number or
kind or class of shares or other securities or property purchasable under the Rights Certificates made in accordance with the provisions of this Agreement. In addition, in connection with the issuance or sale of Common Shares following the
Distribution Date and prior to the redemption or expiration of the Rights, the Company (a) shall, with respect to Common Shares so issued or sold pursuant to the exercise of stock options or under any employee plan or arrangement or upon the
exercise, conversion or exchange of other securities of the Company outstanding at the date hereof or upon the exercise, conversion or exchange of securities hereinafter issued by the Company and (b) may, in any other case, if deemed necessary or
appropriate by the Board of Directors of the Company, issue Rights Certificates representing the appropriate number of Rights in connection with such issuance or sale; provided, however, that (i) no such Rights Certificate shall be
issued and this sentence shall be null and void ab initio if, and to the extent that, such issuance or this sentence would create a significant risk of or result in material adverse tax consequences to the Company or the Person to whom such
Rights Certificate would be issued or would create a significant risk of or result in such options’ or employee plans’ or arrangements’ failing to qualify for otherwise available special tax treatment and (ii) no such Rights
Certificate shall be issued if, and to the extent that, appropriate adjustment shall otherwise have been made in lieu of the issuance thereof. 
  
 Section 23. Redemption. 
  
 (a) The Company may, at its option and with the approval of the Board of Directors, at any time prior to the Close of Business on the
earlier of (i) the fifth day following the Shares Acquisition Date (or such later date as may be determined by action of the Company’s Board of Directors and publicly announced by the Company) and (ii) the Final Expiration Date, redeem all but
not less than all the then outstanding Rights at a redemption price of $0.001 per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (such redemption price being herein
referred to as the “Redemption Price”) and the Company may, at its option, pay the Redemption Price either in Common Shares (based on the Current Per Share Market Price thereof at the time of redemption) or cash. Such
redemption of the Rights by the Company may be made effective at such time, on such basis and with such conditions as the Board of Directors of the Company in its sole discretion may establish. The date on which the Board of Directors of the Company
elects to make the redemption effective shall be referred to as the “Redemption Date.” 
  
 (b) Immediately upon the action of the Board of Directors of the Company ordering the redemption of the Rights, prompt written evidence of
which shall have been filed with the Rights Agent, and without any further action and without any notice, the right to exercise the Rights will terminate and the only right thereafter of the holders of Rights shall be to receive the Redemption
Price. The Company shall promptly give public notice of any such redemption; provided, however, that the failure to give, or any defect in, any such notice shall not affect the 

  

 34 

 
validity of such redemption. Within ten (10) days after the action of the Board of Directors of the Company ordering the redemption of the Rights, the
Company shall give written notice of such redemption to the Rights Agent and the holders of the then outstanding Rights by mailing such notice to all such holders at their last addresses as they appear upon the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the transfer agent for the Common Shares. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price will be made. Neither the Company nor any of its Affiliates or Associates may redeem, acquire or purchase for value any Rights at any time in any manner other than that
specifically set forth in this Section 23 or in Section 24 hereof, and other than in connection with the purchase of Common Shares prior to the Distribution Date. 
  
 Section 24. Exchange. 
  
 (a) Subject to applicable laws, rules and regulations, and subject to subsection 24(c) below, the Company may, at its option, by action of
the Board of Directors of the Company, at any time after the occurrence of a Triggering Event, exchange all or part of the then outstanding and exercisable Rights (which shall not include Rights that have become null and void pursuant to the
provisions of Section 7(e) hereof) for Common Shares at an exchange ratio of one Common Share per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (such exchange ratio
being hereinafter referred to as the “Exchange Ratio”). Notwithstanding the foregoing, the Board of Directors of the Company shall not be empowered to effect such exchange at any time after any Person (other than the Company,
any Subsidiary of the Company, any employee benefit plan of the Company or any such Subsidiary, or any Person holding Common Shares for or pursuant to the terms of any such plan), together with all Affiliates and Associates of such Person, becomes
the Beneficial Owner of 50% or more of the Common Shares then outstanding. 
  
 (b) Immediately upon the action of the Board of Directors of the Company ordering the exchange of any Rights pursuant to subsection 24(a) of this Section 24 and without any further action and without any notice, the
right to exercise such Rights shall terminate and the only right thereafter of a holder of such Rights shall be to receive that number of Common Shares equal to the number of such Rights held by such holder multiplied by the Exchange Ratio. The
Company shall give public notice of any such exchange as well as prompt, written notice thereof to the Rights Agent; provided, however, that the failure to give, or any defect in, such notice shall not affect the validity of such
exchange. The Company shall mail a notice of any such exchange to all of the holders of such Rights at their last addresses as they appear upon the registry books of the Rights Agent. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of exchange will state the method by which the exchange of the Common Shares for Rights will be effected and, in the event of any partial exchange, the number of Rights
which will be exchanged. Any partial exchange shall be effected pro rata based on the number of Rights (other than Rights which have become null and void pursuant to the provisions of Section 7(e) hereof) held by each holder of Rights. 

 

 35 

 (c) In the event that there shall not be sufficient Common Shares issued but not
outstanding or authorized but unissued to permit any exchange of Rights as contemplated in accordance with Section 24(a), the Company shall either take such action as may be necessary to authorize additional Common Shares for issuance upon exchange
of the Rights or alternatively, at the option of a majority of the Board of Directors of the Company, with respect to each Right (i) pay cash in an amount equal to the Current Value (as hereinafter defined), in lieu of issuing Common Shares in
exchange therefor, or (ii) issue debt or equity securities or a combination thereof, having a value equal to the Current Value, in lieu of issuing Common Shares in exchange for each such Right, where the value of such securities shall be determined
by a nationally recognized investment banking firm selected by majority vote of the Board of Directors of the Company, or (iii) deliver any combination of cash, property, Common Shares and/or other securities having a value equal to the Current
Value in exchange for each Right. For purposes of this Section 24(c) only, the Current Value shall mean the product of the Current Per Share Market Price of Common Shares on the date of the occurrence of the event described above in subsection (a),
multiplied by the number of Common Shares for which the Right otherwise would be exchangeable if there were sufficient shares available. To the extent that the Company determines that some action need be taken pursuant to clauses (i), (ii) or (iii)
of this Section 24(c), the Board of Directors of the Company may temporarily suspend the exercisability of the Rights for a period of up to sixty (60) days following the date on which the event described in Section 24(a) shall have occurred, in
order to seek any authorization of additional Common Shares and/or to decide the appropriate form of distribution to be made pursuant to the above provision and to determine the value thereof. In the event of any such suspension, the Company shall
promptly notify the Rights Agent in writing of such suspension and shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended. 
  
 (d) The Company shall not be required to issue fractions of Common Shares or to distribute certificates
which evidence fractional Common Shares. In lieu of such fractional Common Shares, there shall be paid to the registered holders of the Rights Certificates with regard to which such fractional Common Shares would otherwise be issuable, an amount in
cash equal to the same fraction of the current market value of a whole Common Share (as determined pursuant to the second sentence of Section 1(i) hereof). 
  
 (e) The Company may, at its option, by majority vote of the Board of Directors of the Company, at any time before any Person has become an
Acquiring Person, exchange all or part of the then outstanding Rights for rights of substantially equivalent value, as determined reasonably and with good faith by the Board of Directors of the Company based upon the advice of one or more nationally
recognized investment banking firms. 
  
 (f)
Immediately upon the action of the Board of Directors of the Company ordering the exchange of any Rights pursuant to subsection 24(e) of this Section 24 and without any further action and without any notice, the right to exercise such Rights shall
terminate and the only right thereafter of a holder of such Rights shall be to receive that number of rights in exchange therefor 

  

 36 

 
as has been determined by the Board of Directors of the Company in accordance with subsection 24(e) above. The Company shall promptly notify the Rights Agent
in writing thereof and shall give public notice of any such exchange; provided, however, that the failure to give, or any defect in, such notice shall not affect the validity of such exchange. The Company shall mail a notice of any
such exchange to the Rights Agent and to all of the holders of such Rights at their last addresses as they appear upon the registry books of the transfer agent for the Common Shares of the Company. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice. Each such notice of exchange will state the method by which the exchange of the Rights will be effected. 
  
 Section 25. Notice of Certain Events. 
  
 (a) In case the Company shall propose to effect or permit to occur any Triggering Event or Section 13 Event,
the Company shall give written notice thereof to the Rights Agent and to each holder of Rights in accordance with Section 26 hereof at least twenty (20) days prior to occurrence of such Triggering Event or such Section 13 Event. 
  
 (b) In case any Triggering Event or Section 13 Event shall
occur, then, in any such case, the Company shall as soon as practicable thereafter give to each holder of a Rights Certificate and to the Rights Agent, in accordance with Section 26 hereof, a written notice of the occurrence of such event, which
shall specify the event and the consequences of the event to holders of Rights under Sections 11(a)(ii) and 13 hereof. 
  
 Section 26. Notices. Notices or demands authorized by this Agreement to be given or made by the Rights Agent or by the holder of any Rights Certificate to
or on the Company shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Rights Agent) as follows: 
  
 Pain Therapeutics, Inc. 
 416 Browning Way 
 South San Francisco, CA 94080 
  
 with a copy to: 
 Wilson Sonsini Goodrich & Rosati 
 Professional Corporation 
 650 Page Mill Road 
 Palo Alto, California 94304-1050 
 Attention: David J. Berger 
  
 Subject to the provisions of Section 21 hereof, any notice or demand authorized by this Agreement to be given or made by the Company or by the holder of
any Rights Certificate to or on 

  

 37 

 
the Rights Agent shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with
the Company) as follows: 
  
 Mellon Investor
Services LLC 
 235 Montgomery Street, 23rd floor 
 San Francisco, CA 94104 
 Attn: Kerri S. Jones 
  
 with a copy to: 
  
 Mellon Investor
Services LLC 
 85 Challenger Road 
 Ridgefield Park, NJ 07660 
 Attn: General Counsel 
  
 Notices or demands
authorized by this Agreement to be given or made by the Company or the Rights Agent to the holder of any Rights Certificate shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company. 
  
 Section 27. Supplements and Amendments. Prior to the occurrence of a Distribution Date, the Company may supplement or amend this Agreement in any respect without the approval of any holders of Rights and the Rights Agent shall, if the
Company so directs but subject to the further provision of this Section 27, execute such supplement or amendment. From and after the occurrence of a Distribution Date, the Company and the Rights Agent may from time to time supplement or amend this
Agreement without the approval of any holders of Rights in order to (i) cure any ambiguity, (ii) correct or supplement any provision contained herein which may be defective or inconsistent with any other provisions herein, (iii) shorten or lengthen
any time period hereunder or (iv) to change or supplement the provisions hereunder in any manner that the Company may deem necessary or desirable and that shall not adversely affect the interests of the holders of Rights (other than an Acquiring
Person or an Affiliate or Associate of an Acquiring Person); provided, this Agreement may not be supplemented or amended to lengthen, pursuant to clause (iii) of this sentence, (A) a time period relating to when the Rights may be redeemed at
such time as the Rights are not then redeemable or (B) any other time period unless such lengthening is for the purpose of protecting, enhancing or clarifying the rights of, and/or the benefits to, the holders of Rights (other than an Acquiring
Person or an Affiliate or Associate of an Acquiring Person). Upon the delivery of a certificate from an appropriate officer of the Company that states that the proposed supplement or amendment is in compliance with the terms of this Section 27, and
provided that such supplement or amendment does not specifically diminish or change the Rights Agent’s rights or specifically increase or change the Rights Agent’s duties, liabilities, or obligations hereunder without the prior written
consent of the Rights Agent, the Rights Agent shall execute such supplement or amendment. Prior to the Distribution Date, the interests of the holders of Rights shall be deemed coincident with the interests of the holders of Common Shares.

  

 38 

 Section 28. Successors. All the covenants and provisions of this Agreement by or for the benefit of the
Company or the Rights Agent shall bind and inure to the benefit of their respective successors and assigns hereunder. 
  
 Section 29. Determinations and Actions by the Board of Directors, etc. For all purposes of this Agreement, any calculation of the number of Common Shares
outstanding at any particular time, including for purposes of determining the particular percentage of such outstanding Common Shares of which any Person is the Beneficial Owner, shall be made in accordance with the last sentence of Rule
13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act. The Board of Directors of the Company shall have the exclusive power and authority to administer this Agreement and to exercise all rights and powers specifically granted to
the Board, or the Company, or as may be necessary or advisable in the administration of this Agreement, including, without limitation, the right and power (i) to interpret the provisions of this Agreement and (ii) to make all determinations and
calculations deemed necessary or advisable for the administration of this Agreement (including a determination to redeem or not redeem the Rights or to amend the Agreement). All such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with respect to the foregoing) which are done or made by the Board in good faith, shall (x) be final, conclusive and binding on the Company, the Rights Agent, the holders of the Rights
Certificates and all other Persons and (y) with respect to claims specifically arising from the Agreement, not subject the Board to any liability to the holders of the Rights. The Rights Agent is entitled always to assume the Company’s Board of
Directors acted in good faith and shall be protected and incur no liability in reliance thereon. 
  
 Section 30. Benefits of this Agreement. Nothing in this Agreement shall be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Rights Certificates (and, prior to the Distribution Date, the Common Shares) any legal or equitable right, remedy or claim pursuant to this Agreement; but this Agreement shall be for the sole and exclusive benefit of
the Company, the Rights Agent and the registered holders of the Rights Certificates (and, prior to the Distribution Date, the Common Shares). 
  
 Section 31. Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, null, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the contrary, if any such term, provision, covenant or restriction is held by such court or authority to be invalid, null, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that severing the invalid language from this Agreement would adversely affect the purpose or effect of this Agreement, the right of redemption set forth in Section 23 hereof shall be
reinstated with prompt written notice thereof to the Rights Agent and shall not expire until the Close of Business on the tenth day following the date of such determination by the Board of Directors of the Company. 
  
 Section 32. Governing Law. This Agreement and each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the laws of the State of Delaware and 

  

 39 

 
for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely
within such State. 
  
 Section 33. Counterparts. This Agreement
may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. 
  
 Section 34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. 
  
 [SIGNATURE PAGE TO FOLLOW] 
  

 40 

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

									
	“COMPANY”	 	 	 	Pain Therapeutics, Inc.
					
	 	 	 	 	 	 	By:	 	 /s/ REMI BARBIER

	 	 	 	 	 	 	 Name:
	 	 Remi Barbier

	 	 	 	 	 	 	 Title:
	 	President, Chief Executive Officer,
and Chairman of the Board
			
	“RIGHTS AGENT”	 	 	 	Mellon Investor Services LLC
					
	 	 	 	 	 	 	By:	 	 /s/ KERRI S. JONES

	 	 	 	 	 	 	 Name:
	 	 Kerri S. Jones

	 	 	 	 	 	 	 Title:
	 	Assistant Vice President

  
 [SIGNATURE PAGE FOR
PREFERRED STOCK RIGHTS AGREEMENT] 
  

  
 EXHIBIT A 

 
 CERTIFICATE OF DESIGNATION OF RIGHTS, PREFERENCES AND PRIVILEGES OF

 SERIES A PARTICIPATING PREFERRED STOCK OF PAIN THERAPEUTICS, INC. 
  
 The undersigned, Remi Barbier, does hereby certify: 
  

1. That he is duly elected and acting President, Chief Executive Officer, and Chairman of the Board of Pain Therapeutics, Inc., a Delaware corporation
(the “Corporation”). 
  
 2. That pursuant
to the authority conferred upon the Board of Directors by the Amended and Restated Certificate of Incorporation of the Corporation, the Board of Directors of the Corporation on April 28, 2005 adopted the following resolutions creating a series of
600,000 shares of Preferred Stock designated as Series A Participating Preferred Stock: 
  
 “RESOLVED, that pursuant to the authority vested in the Board of Directors of the corporation by the Amended and Restated Certificate of Incorporation, the Board of Directors does hereby provide for the issue of
a series of Preferred Stock of the Corporation and does hereby fix and herein state and express the designations, powers, preferences and relative and other special rights and the qualifications, limitations and restrictions of such series of
Preferred Stock as follows: 
  
 1. Designation and Amount.
The shares of such series shall be designated as “Series A Participating Preferred Stock.” The Series A Participating Preferred Stock shall have a par value of $0.001 per share, and the number of shares constituting such
series shall be 600,000. 
  
 2. Proportional Adjustment. In
the event that the Corporation shall at any time after the issuance of any share or shares of Series A Participating Preferred Stock (i) declare any dividend on Common Stock of the Corporation (“Common Stock”) payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the Corporation shall simultaneously effect a proportional adjustment to the
number of outstanding shares of Series A Participating Preferred Stock. 
  
 3. Dividends and Distributions. 
  
 (a) Subject to the prior and superior right of the holders of any shares of any series of Preferred Stock ranking prior and superior to the shares of Series A Participating Preferred Stock with respect to dividends, the holders of shares of
Series A Participating Preferred Stock shall be entitled to receive when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the last day of January, April, July, and
October in each year (each such date being referred to herein as a “Quarterly Dividend Payment Date”), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of
Series A Participating Preferred Stock, in an amount per share (rounded to the nearest cent) equal to 1,000 times the aggregate per share amount of all cash dividends, and 1,000 times the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions other than a dividend payable in shares of Common Stock or a subdivision of the 

  

 
outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock since the immediately preceding Quarterly Dividend
Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A Participating Preferred Stock. 
  
 (b) The Corporation shall declare a dividend or distribution on the Series A Participating Preferred Stock
as provided in paragraph (a) above immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock). 
  
 (c) Dividends shall begin to accrue on outstanding shares of Series A Participating Preferred Stock from the
Quarterly Dividend Payment Date first following the date of issue of such shares of Series A Participating Preferred Stock, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which
case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series A
Participating Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series A Participating Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series A Participating Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than 30 days prior to the date fixed for the payment thereof. 
  
 4. Voting Rights. The holders of shares of Series A Participating Preferred Stock shall have the following voting rights: 
  
 (a) Each share of Series A Participating Preferred Stock
shall entitle the holder thereof to 1,000 votes on all matters submitted to a vote of the stockholders of the Corporation. 
  
 (b) Except as otherwise provided herein or by law, the holders of shares of Series A Participating Preferred Stock and the holders of
shares of Common Stock shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation. 
  
 (c) Except as required by law, the holders of Series A Participating Preferred Stock shall have no special voting rights and their consent
shall not be required (except to the extent that they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action. 
  

 -2- 

 5. Certain Restrictions. 
  
 (a) The Corporation shall not declare any dividend on, make any distribution on, or redeem or purchase or
otherwise acquire for consideration any shares of Common Stock after the first issuance of a share or fraction of a share of Series A Participating Preferred Stock unless concurrently therewith it shall declare a dividend on the Series A
Participating Preferred Stock as required by Section 3 hereof. 
  
 (b) Whenever quarterly dividends or other dividends or distributions payable on the Series A Participating Preferred Stock as provided in Section 3 are in arrears, thereafter and until all accrued and unpaid dividends
and distributions, whether or not declared, on shares of Series A Participating Preferred Stock outstanding shall have been paid in full, the Corporation shall not 
  
 (i) declare or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire
for consideration any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Participating Preferred Stock; 
  
 (ii) declare or pay dividends on, or make any other distributions on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with the Series A Participating Preferred Stock, except dividends paid ratably on the Series A Participating Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled; 
  
 (iii) redeem or purchase or otherwise acquire for consideration shares of any stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Participating Preferred Stock, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such parity stock in exchange for shares of any stock of the
Corporation ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series A Participating Preferred Stock; 
  
 (iv) purchase or otherwise acquire for consideration any shares of Series A Participating Preferred Stock, or any shares of stock ranking
on a parity with the Series A Participating Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective
series or classes. 
  
 (c) The Corporation shall
not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under paragraph (a) of this Section 5, purchase or otherwise acquire such shares at
such time and in such manner. 
  

 -3- 

 6. Reacquired Shares. Any shares of Series A Participating Preferred Stock purchased or otherwise
acquired by the Corporation in any manner whatsoever shall be retired and canceled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as
part of a new series of Preferred Stock to be created by resolution or resolutions of the Board of Directors, subject to the conditions and restrictions on issuance set forth herein and in the Amended and Restated Certificate of Incorporation, as
then amended. 
  
 7. Liquidation, Dissolution or Winding
Up. Upon any liquidation, dissolution or winding up of the Corporation, the holders of shares of Series A Participating Preferred Stock shall be entitled to receive an aggregate amount per share equal to 1,000 times the aggregate amount to be
distributed per share to holders of shares of Common Stock plus an amount equal to any accrued and unpaid dividends on such shares of Series A Participating Preferred Stock. 
  
 8. Consolidation, Merger, etc. In case the Corporation shall enter into any consolidation, merger, combination or
other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case the shares of Series A Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share equal to 1,000 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed
or exchanged. 
  
 9. No Redemption. The shares of Series A
Participating Preferred Stock shall not be redeemable. 
  
 10.
Ranking. The Series A Participating Preferred Stock shall rank junior to all other series of the Corporation’s Preferred Stock as to the payment of dividends and the distribution of assets, unless the terms of any such series shall
provide otherwise. 
  
 11. Amendment. The Amended and
Restated Certificate of Incorporation of the Corporation shall not be further amended in any manner which would materially alter or change the powers, preference or special rights of the Series A Participating Preferred Stock so as to affect them
adversely without the affirmative vote of the holders of a majority of the outstanding shares of Series A Participating Preferred Stock, voting separately as a series. 
  
 12. Fractional Shares. Series A Participating Preferred Stock may be issued in fractions of a share which shall
entitle the holder, in proportion to such holder’s fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of Series A Participating Preferred Stock.

  
 RESOLVED FURTHER, that the President, Chief Executive
Officer or any Vice President of the Corporation be, and they hereby is, authorized and directed to prepare and file a Certificate of Designation of Rights, Preferences and Privileges in accordance with the foregoing resolution and the provisions of
Delaware law and to take such actions as they may deem necessary or appropriate to carry out the intent of the foregoing resolution.” 
  

 -4- 

  
 [INTENTIONALLY LEFT BLANK]

  

 -5- 

  
 I further declare under
penalty of perjury that the matters set forth in the foregoing Certificate of Designation are true and correct of my own knowledge. 
  
 Executed at South San Francisco, California on April 28, 2005. 
  

	
	
	/s/ REMI BARBIER
	
	Remi Barbier
	
	President, Chief Executive Officer, and Chairman of the Board

  

  
 EXHIBIT B

  
 FORM OF RIGHTS CERTIFICATE 
  

					
	Certificate No. R-	 	 	 	                     Rights

  
 NOT EXERCISABLE AFTER
THE EARLIER OF (i) May 12, 2015, (ii) THE DATE TERMINATED BY THE COMPANY OR (iii) THE DATE THE COMPANY EXCHANGES THE RIGHTS PURSUANT TO THE RIGHTS AGREEMENT. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.001 PER RIGHT ON
THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT
HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. 
  
 [THE RIGHTS
REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH RIGHTS AGREEMENT.]* 
  
 RIGHTS CERTIFICATE 
  
 PAIN THERAPEUTICS, INC. 
  
 This certifies that
                                        
        , or registered assigns, is the registered owner of the number of Rights set forth above, each of which entitles the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement dated as of April 28, 2005 (the “Rights Agreement”), between Pain Therapeutics, Inc., a Delaware corporation (the “Company”), and Mellon Investor Services LLC (the “Rights
Agent”), to purchase from the Company at any time after the Distribution Date (as such term is defined in the Rights Agreement) and prior to 5:00 P.M., New York time, on May 12, 2015 at the office of the Rights Agent 

	*	The portion of the legend in bracket shall be inserted only if applicable and shall replace the preceding sentence. 

  

 1 

 designated for such purpose, or at the office of its successor as Rights Agent, one one-thousandth (0.001) of a fully
paid and non-assessable share of Series A Participating Preferred Stock, par value $0.001 per share (the “Preferred Shares”), of the Company, at an Exercise Price of $40.00 (forty dollars) per one-thousandth (0.001) of a
Preferred Share (the “Exercise Price”), upon presentation and surrender of this Rights Certificate with the Form of Election to Purchase and related Certificate duly executed. The number of Rights evidenced by this Rights
Certificate (and the number of one-thousandths (0.001) of a Preferred Share which may be purchased upon exercise hereof) set forth above are the number and Exercise Price as of May 12, 2005 based on the Preferred Shares as constituted at such date.
As provided in the Rights Agreement, the Exercise Price and the number and kind of Preferred Shares or other securities which may be purchased upon the exercise of the Rights evidenced by this Rights Certificate are subject to modification and
adjustment upon the happening of certain events. 
  
 This Rights
Certificate is subject to all of the terms, provisions and conditions of the Rights Agreement, which terms, provisions and conditions are hereby incorporated herein by reference and made a part hereof and to which Rights Agreement reference is
hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities hereunder of the Rights Agent, the Company and the holders of the Rights Certificates, which limitations of rights include the temporary
suspension of the exercisability of such Rights under the specific circumstances set forth in the Rights Agreement. Copies of the Rights Agreement are on file at the principal executive offices of the Company and the above-mentioned office of the
Rights Agent. 
  
 Subject to the provisions of the Rights
Agreement, the Rights evidenced by this Rights Certificate (i) may be redeemed by the Company, at its option, at a redemption price of $0.001 per Right or (ii) may be exchanged by the Company in whole or in part for Common Shares, substantially
equivalent rights or other consideration as determined by the Company. 
  
 This Rights Certificate, with or without other Rights Certificates, upon surrender at the office of the Rights Agent designated for such purpose, may be exchanged for another Rights Certificate or Rights Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate amount of securities as the Rights evidenced by the Rights Certificate or Rights Certificates surrendered shall have entitled such holder to purchase. If this Rights Certificate
shall be exercised in part, the holder shall be entitled to receive upon surrender hereof another Rights Certificate or Rights Certificates for the number of whole Rights not exercised. 
  
 No fractional portion of less than one one-thousandth (0.001) of a Preferred Share will be issued upon the exercise of any
Right or Rights evidenced hereby but in lieu thereof a cash payment will be made, as provided in the Rights Agreement. 
  
 No holder of this Rights Certificate, as such, shall be entitled to vote or receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be issuable on the exercise hereof, nor shall anything contained in the Rights Agreement or herein be construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any 

  

 2 

 
corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights evidenced by this Rights Certificate shall have been exercised as provided in the Rights Agreement. 
  
 This Rights Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by the
Rights Agent. 
  
 WITNESS the facsimile signature of the proper
officers of the Company and its corporate seal. Dated as of
                                ,
            . 
  

									
	 ATTEST:
	 	 	 	 PAIN THERAPEUTICS, INC.

				
	 	 	 	 	By:	 	 
	 Secretary
	 	 	 	 	 	 
				
	 	 	 	 	 Its:
	 	 
	 Countersigned:
	 	 	 	 	 	 
			
	MELLON INVESTOR SERVICES LLC
as Rights Agent	 	 	 	 
					
	 By:
	 	 	 	 	 	 	 	 
					
	 Its:
	 	 	 	 	 	 	 	 

  

 3 

  
 Form of Reverse Side of
Rights Certificate 
  
 FORM OF ASSIGNMENT 
  
 (To be executed by the registered holder if such 
 holder desires to transfer the Rights Certificate) 
  
 FOR VALUE RECEIVED
                             hereby sells, assigns and transfers unto  
  
                                       
                                        
                                        
                                        
                                        
                                        
                    
 (Please print name and
address of transferee) 
  
                                       
                                        
                                        
                                        
                                        
                                        
                    
 this Rights Certificate, together
with all right, title and interest therein, and does hereby irrevocably constitute and appoint
                                 Attorney, to transfer the within Rights
Certificate on the books of the within-named Company, with full power of substitution. 
  
 Dated:                         ,             

  

	
	
	 
	 Signature

  
 Signature Guaranteed:

  
 Signatures must be guaranteed by an “Eligible Guarantor
Institution” (with membership in an approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended. 
  

  
 CERTIFICATE

  
 The undersigned hereby certifies by checking the
appropriate boxes that: 
  
 (1) this Rights Certificate
[    ] is [    ] is not being sold, assigned and transferred by or on behalf of a Person who is or was an Acquiring Person, or an Affiliate or Associate of any such Person (as such terms are defined in the
Rights Agreement); 
  
 (2) after due inquiry and to the best
knowledge of the undersigned, it [    ] did [    ] did not acquire the Rights evidenced by this Rights Certificate from any Person who is, was or subsequently became an Acquiring Person or an Affiliate or
Associate of any such Person. 
  
 Dated:
                        ,              
  

	
	
	 
	 Signature

  
 Signature Medallion Guaranteed:

  
 Signatures must be guaranteed by an “Eligible Guarantor
Institution” (with membership in an approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended. 
  

  
 Form of Reverse Side of
Rights Certificate — continued 
  
 FORM OF ELECTION TO
PURCHASE 
  
 (To be executed if holder desires to 

exercise the Rights Certificate) 
  
 To:                                     

 
 The undersigned hereby irrevocably elects to exercise
                                 Rights represented by this Rights Certificate to
purchase the number of one-thousandths (0.001) of a Preferred Share issuable upon the exercise of such Rights and requests that certificates for such number of one-thousandths (0.001) of a Preferred Share issued in the name of: 
  
 Please insert social security 
 or other identifying number 
  
                                       
                                        
                                        
                                        
                                        
                                        
                    
 (Please print name and
address of transferee) 
  
                                       
                                        
                                        
                                        
                                        
                                        
                    
  
 If such number of Rights shall not be all the Rights evidenced by this Rights Certificate, a new Rights Certificate for the balance remaining of such Rights shall be
registered in the name of and delivered to: 
  
 Please insert social security

 or other identifying number 
  
                                       
                                        
                                        
                                        
                                        
                                        
                    
 (Please print name and
address of transferee) 
  
                                       
                                        
                                        
                                        
                                        
                                        
                    
  
 Dated:                         ,
             
  

	
	
	 
	 Signature

  
 Signature Guaranteed:

  
 Signatures must be guaranteed by an “Eligible Guarantor
Institution” (with membership in an approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended. 
  

  
 CERTIFICATE

  
 The undersigned hereby certifies by checking the
appropriate boxes that: 
  
 (1) the Rights evidenced by this
Rights Certificate [    ] are [    ] are not being exercised by or on behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate of any such Person (as such terms are defined in the
Rights Agreement); 
  
 (2) after due inquiry and to the best
knowledge of the undersigned, it [    ] did [    ] did not acquire the Rights evidenced by this Rights Certificate from any Person who is, was or subsequently became an Acquiring Person or an Affiliate or
Associate of any such Person. 
  
 Dated:
                        ,              
  

	
	
	 
	 Signature

  
 Signature Medallion Guaranteed:

  
 Signatures must be guaranteed by an “Eligible Guarantor
Institution” (with membership in an approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended. 
  

  
 Form of Reverse Side of
Rights Certificate — continued 
  
 NOTICE

  
 The signature in the foregoing Forms of Assignment and
Election must conform to the name as written upon the face of this Rights Certificate in every particular, without alteration or enlargement or any change whatsoever. 
  

  
 EXHIBIT C

  
 SUMMARY OF STOCKHOLDER RIGHTS PLAN 

 
 PAIN THERAPEUTICS, INC. 
  

  
 STOCKHOLDER RIGHTS PLAN

  
 PAIN THERAPEUTICS, INC. 
  
 Summary of Rights 
  

			
	Distribution and Transfer of Rights; Rights Certificate:	  	The Board of Directors has declared a dividend of one Right for each outstanding share of Common Stock of Pain Therapeutics, Inc. (the “Company”). Prior to the
Distribution Date referred to below, the Rights will be evidenced by and trade with the certificates for the Common Stock. After the Distribution Date, the Company will mail Rights certificates to the Company’s stockholders and the Rights will
become transferable apart from the Common Stock.
		
	Distribution Date:	  	Rights will separate from the Common Stock and become exercisable following (a) the tenth day (or such later date as may be determined by the Company’s Board of Directors) after a person
or group acquires beneficial ownership of 15% or more (or 20% or more in the case of Eastbourne Capital Management, LLC and its affiliates (“Eastbourne”) of the Company’s Common Stock or (b) the tenth business day (or
such later date as may be determined by the Company’s Board of Directors) after a person or group announces a tender or exchange offer, the consummation of which would result in ownership by a person or group of 15% or more (or 20% or more in
the case of Eastbourne of the Company’s Common Stock. The earlier of such date is referred to as the “Distribution Date”.
		
	Preferred Stock Purchasable Upon Exercise of Rights:	  	After the Distribution Date, each Right will entitle the holder to purchase for $40.00 (forty dollars) (the “Exercise Price”), one thousandth (0.001) of a share of the
Company’s Preferred Stock with economic terms similar to that of one share of the Company’s Common Stock.
		
	Flip-In:	  	If an acquirer (an “Acquiring Person”) obtains 15% or more of the Company’s Common Stock (or with respect to Eastborne, 20% or more), then each Right
(other than Rights owned by an Acquiring Person or its affiliates) will entitle the holder thereof to purchase, for the Exercise Price, a number of shares of the Company’s Common Stock having a then-current market value of twice the Exercise
Price.
		
	Flip-Over:	  	If, after an Acquiring Person obtains 15% or more of the Company’s Common Stock (or with respect to Eastborne, 20% or more), (a) the Company merges into another entity, (b) an acquiring
entity merges into the Company or (c) the Company

  

 1 

			
	 	  	sells more than 50% of the Company’s assets or earning power, then each Right (other than Rights owned by an Acquiring Person or its affiliates) will entitle the holder thereof to
purchase, for the Exercise Price, a number of shares of Common Stock of the person engaging in the transaction having a then current market value of twice the Exercise Price.
		
	Exchange Provision:	  	At any time after the date on which an Acquiring Person obtains 15% or more of the Company’s Common Stock (or with respect to Eastborne, 20% or more), and prior to the acquisition by the
Acquiring Person of 50% of the outstanding Common Stock, the Board of Directors of the Company may exchange the Rights (other than Rights owned by the Acquiring Person or its affiliates), in whole or in part, for shares of Common Stock of the
Company at an exchange ratio of one share of Common Stock per Right (subject to adjustment).
		
	Redemption of the Rights:	  	Rights will be redeemable at the Company’s option for $0.001 per Right at any time on or prior to the fifth day (or such later date as may be determined by the Company’s Board of
Directors) after public announcement that a Person has acquired beneficial ownership of 15% or more of the Company’s Common Stock (or with respect to Eastborne, 20% or more) (the “Shares Acquisition
Date”).
		
	Expiration of the Rights:	  	The Rights expire on the earliest of (a) May 12, 2015 or (b) exchange or redemption of the Rights as described above.
		
	Amendment of Terms of Rights:	  	The terms of the Rights and the Rights Agreement may be amended in any respect without the consent of the Rights holders on or prior to the Distribution Date; thereafter, the terms of the
Rights and the Rights Agreement may be amended without the consent of the Rights holders in order to cure any ambiguities or to make changes which do not adversely affect the interests of Rights holders (other than the Acquiring
Person).
		
	Voting Rights:	  	Rights will not have any voting rights.
		
	Anti-Dilution Provisions:	  	Rights will have the benefit of certain customary anti-dilution provisions.
		
	Taxes:	  	The Rights distribution should not be taxable for federal income tax purposes. However, following an event which renders the Rights exercisable or upon redemption of the Rights, stockholders
may recognize taxable income.

  
 The foregoing is a summary of certain
principal terms of the Stockholder Rights Plan only and is qualified in its entirety by reference to the Preferred Stock Rights Agreement dated as of April 28, 2005 between the Company and Mellon Investor Service LLC, as Rights Agent (the
“Rights Agreement”). The Rights Agreement may be amended from time to time. A copy of the Rights Agreement was filed with the Securities and Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
______, 2005. A copy of the Rights Agreement is available free of charge from the Company. 
  

 2Purchase and Sale Agreement Dated April 27, 2005

 EXHIBIT 10.1 
  
 PURCHASE AND SALE AGREEMENT 
 BY AND BETWEEN 
  
 MARRIOTT INTERNATIONAL, INC. 
  
 and

  
 SUNSTONE HOTEL INVESTORS, INC., 
  
 April 27, 2005 
  

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page

	 ARTICLE 1.
	  	DEFINITIONS	  	1
			
	 Section 1.1
	  	 Certain Defined Terms
	  	1
	 	  	 Accounting Firm
	  	1
	 	  	 Accounting Period
	  	1
	 	  	 Affiliate
	  	2
	 	  	 Ancillary Agreements
	  	2
	 	  	 Business Day
	  	2
	 	  	 Capital Expenditures
	  	2
	 	  	 Closing Interest Rate
	  	2
	 	  	 Code
	  	2
	 	  	 Commercially Reasonable Efforts
	  	2
	 	  	 Consent
	  	2
	 	  	 Contract
	  	3
	 	  	 Control
	  	3
	 	  	 CTF
	  	3
	 	  	 CTF Ancillary Agreements
	  	3
	 	  	 CTF Schedules
	  	3
	 	  	 CTF Selling Entity
	  	3
	 	  	 CTF’s Knowledge
	  	3
	 	  	 Debt
	  	3
	 	  	 Employee Benefit Plan
	  	3
	 	  	 Encumbrance
	  	4
	 	  	 Environmental Law
	  	4
	 	  	 Equity Interests
	  	4
	 	  	 ERISA
	  	4
	 	  	 ERISA Affiliate
	  	4
	 	  	 FF&E
	  	5
	 	  	 FF&E Reserve
	  	5
	 	  	 GAAP
	  	5
	 	  	 Governmental Authority
	  	5
	 	  	 Governmental Authorization
	  	5
	 	  	 Hotel
	  	5
	 	  	 Hotel Interests
	  	5
	 	  	 Hotel Management Agreements
	  	5
	 	  	 Intercompany Debt
	  	5
	 	  	 Intercreditor Claims Side Letter
	  	5
	 	  	 Interest Holder
	  	5
	 	  	 IRS
	  	5
	 	  	 Law
	  	6
	 	  	 Leased Real Property
	  	6
	 	  	 Leasehold Interest
	  	6
	 	  	 Leases
	  	6

  

 -i- 

					
	 	  	 Legal Proceeding
	  	6
	 	  	 Lien
	  	6
	 	  	 Marriott’s Accounting Practices
	  	6
	 	  	 Marriott’s Closing Deliveries
	  	6
	 	  	 Marriott/CTF Hotel Management Agreements
	  	6
	 	  	 Marriott’s Knowledge
	  	7
	 	  	 Marriott Material Contract
	  	7
	 	  	 Material Contract
	  	7
	 	  	 Minority Owned Entities
	  	7
	 	  	 Miscellaneous Operating Supplies
	  	7
	 	  	 Order
	  	7
	 	  	 Ordinary Course of Business
	  	8
	 	  	 Organizational Documents
	  	8
	 	  	 Orlando Hotel Management Agreement
	  	8
	 	  	 Orlando Mortgage Note
	  	8
	 	  	 Orlando ODL Note
	  	8
	 	  	 Owned Real Property
	  	8
	 	  	 Owner Agreements
	  	8
	 	  	 Permits
	  	9
	 	  	 Permitted Encumbrances
	  	9
	 	  	 Person
	  	9
	 	  	 Personal Property
	  	9
	 	  	 PIP Expenditures
	  	9
	 	  	 Property
	  	9
	 	  	 Property Improvement Plans
	  	9
	 	  	 Property Tax
	  	9
	 	  	 Purchaser Material Adverse Effect
	  	9
	 	  	 Purchaser’s Closing Deliveries
	  	10
	 	  	 Purchaser’s Knowledge
	  	10
	 	  	 Representatives
	  	10
	 	  	 Sales, Use & Occupancy Tax Audit Liabilities
	  	10
	 	  	 Schedules
	  	10
	 	  	 Subsidiary
	  	10
	 	  	 Target
	  	10
	 	  	 Target Sale
	  	10
	 	  	 Tax or Taxes
	  	10
	 	  	 Tax Return
	  	11
	 	  	 Taxing Authority
	  	11
	 	  	 Title Company
	  	11
	 	  	 Transfer Tax
	  	11
	 	  	 Working Capital
	  	11
	 Section 1.2
	  	 Table of Definitions
	  	12
			
	 ARTICLE 2.
	  	THE TRANSACTIONS	  	14
			
	 Section 2.1
	  	 Transactions
	  	14
	 Section 2.2
	  	 Certain Information
	  	15

  

 -ii- 

					
	 Section 2.3
	  	 Debt
	  	16
	 Section 2.4
	  	 Intercompany Debt
	  	16
	 Section 2.5
	  	 Property Improvement Plan Expenditures
	  	16
			
	 ARTICLE 3.
	  	PURCHASE PRICE ADJUSTMENTS AND CLOSING	  	17
			
	 Section 3.1
	  	 Purchase Price
	  	17
	 Section 3.2
	  	 Deposit
	  	17
	 Section 3.3
	  	 Estimated Working Capital, Capital Expenditure and PIP Expenditure Adjustments
	  	17
	 Section 3.4
	  	 Post-Closing Adjustments
	  	18
	 Section 3.5
	  	 Certain Transaction Costs
	  	19
	 Section 3.6
	  	 Structural and Environmental Consultants
	  	19
	 Section 3.7
	  	 Purchase Price Allocation
	  	19
	 Section 3.8
	  	 Closing
	  	20
			
	 ARTICLE 4.
	  	PARAGON BONDS	  	22
			
	 ARTICLE 5.
	  	PASS THROUGH REPRESENTATIONS AND WARRANTIES OF MARRIOTT	  	22
			
	 Section 5.1
	  	 Organization, Existence; Records and Actions
	  	22
	 Section 5.2
	  	 Authority, Approval and Enforceability
	  	23
	 Section 5.3
	  	 Capitalization
	  	23
	 Section 5.4
	  	 Lines of Business
	  	24
	 Section 5.5
	  	 No Conflicts; Consents
	  	25
	 Section 5.6
	  	 Balance Sheets
	  	26
	 Section 5.7
	  	 Absence of Certain Changes
	  	27
	 Section 5.8
	  	 Litigation and Related Matters
	  	27
	 Section 5.9
	  	 Compliance with Laws; Governmental Authorizations
	  	28
	 Section 5.10
	  	 Contracts and Commitments
	  	28
	 Section 5.11
	  	 Hotel Properties
	  	29
	 Section 5.12
	  	 Intellectual Property
	  	29
	 Section 5.13
	  	 Employee Benefits
	  	29
	 Section 5.14
	  	 Insurance
	  	30
	 Section 5.15
	  	 Leases
	  	31
	 Section 5.16
	  	 Taxes
	  	31
	 Section 5.17
	  	 Limitations
	  	33
			
	 ARTICLE 5A.
	  	MANAGER REPRESENTATIONS AND WARRANTIES	  	34
			
	 Section 5.1A
	  	 Organization, Existence; Records and Actions
	  	34
	 Section 5.2A
	  	 Authority, Approval and Enforceability
	  	34
	 Section 5.3A
	  	 Capitalization
	  	34
	 Section 5.4A
	  	 Lines of Business
	  	35
	 Section 5.5A
	  	 No Conflicts; Consents
	  	35
	 Section 5.6A
	  	 Balance Sheets
	  	36

  

 -iii- 

					
	 Section 5.7A
	  	 Absence of Certain Changes
	  	36
	 Section 5.8A
	  	 Litigation and Related Matters
	  	37
	 Section 5.9A
	  	 Compliance with Laws; Governmental Authorizations
	  	37
	 Section 5.10A
	  	 Contracts and Commitments
	  	38
	 Section 5.11A
	  	 Hotel Properties
	  	38
	 Section 5.12A
	  	 Intellectual Property
	  	38
	 Section 5.13A
	  	 Employee Benefits
	  	39
	 Section 5.14A
	  	 Insurance
	  	39
	 Section 5.15A
	  	 Leases
	  	39
	 Section 5.16A
	  	 Taxes
	  	39
	 Section 5.17A
	  	 Inaccuracy of Pass Through Representations
	  	41
			
	 ARTICLE 6.
	  	REPRESENTATIONS AND WARRANTIES OF THE PURCHASER	  	41
			
	 Section 6.1
	  	 Organization
	  	41
	 Section 6.2
	  	 Authority
	  	41
	 Section 6.3
	  	 No Conflict; Required Filings and Consents
	  	42
	 Section 6.4
	  	 Financing
	  	43
			
	 ARTICLE 7.
	  	COVENANTS	  	43
			
	 Section 7.1
	  	 Management of the Hotels Prior to the Closing
	  	43
	 Section 7.2
	  	 Conduct of Business of the Targets Prior to the Closing
	  	43
	 Section 7.3
	  	 Risk of Loss
	  	43
	 Section 7.4
	  	 Covenants Regarding Information
	  	45
	 Section 7.5
	  	 Non-Waiver of Attorney-Client Privilege
	  	46
	 Section 7.6
	  	 Notification of Certain Matters
	  	47
	 Section 7.7
	  	 Resignations
	  	47
	 Section 7.8
	  	 Confidentiality
	  	47
	 Section 7.9
	  	 Consents and Estoppels
	  	48
	 Section 7.10
	  	 Governmental Consents and Filings
	  	49
	 Section 7.11
	  	 Public Announcements
	  	49
	 Section 7.12
	  	 Marriott Undertaking
	  	49
	 Section 7.13
	  	 UST Removal at Westchester Property
	  	50
			
	 ARTICLE 8.
	  	TAX MATTERS	  	50
			
	 Section 8.1
	  	 Tax Returns
	  	50
	 Section 8.2
	  	 Marriott’s Obligations
	  	51
	 Section 8.3
	  	 Purchaser’s Obligations
	  	51
	 Section 8.4
	  	 Straddle Period
	  	51
	 Section 8.5
	  	 Contests
	  	52
	 Section 8.6
	  	 Cooperation on Tax Matters
	  	52
	 Section 8.7
	  	 Price Adjustment
	  	53
	 Section 8.8
	  	 After-Tax Basis
	  	53
	 Section 8.9
	  	 Elections
	  	53

  

 -iv- 

					
	 Section 8.10
	  	 Survival
	  	53
			
	 ARTICLE 9.
	  	TITLE COMMITMENT AND SURVEY REVIEW PROCESS; CONDITIONS TO CLOSING	  	53
			
	 Section 9.1
	  	 Title Commitment and Survey Review Process
	  	53
	 Section 9.2
	  	 Lack of Consents or Estoppels for Certain Leasehold Interests
	  	57
	 Section 9.3
	  	 General Conditions
	  	58
	 Section 9.4
	  	 Conditions to the Obligations of Marriott
	  	58
	 Section 9.5
	  	 Conditions to the Obligations of the Purchaser
	  	59
			
	 ARTICLE 10.
	  	INDEMNIFICATION	  	60
			
	 Section 10.1
	  	 Pass-Through Representations
	  	60
	 Section 10.2
	  	 Survival of Representations, Warranties and Indemnities
	  	60
	 Section 10.3
	  	 Indemnification by Marriott
	  	61
	 Section 10.4
	  	 Indemnification by the Purchaser
	  	61
	 Section 10.5
	  	 Procedures
	  	62
	 Section 10.6
	  	 Limits on Indemnification
	  	64
	 Section 10.7
	  	 Tax Matters
	  	65
	 Section 10.8
	  	 Assignment of Claims
	  	65
	 Section 10.9
	  	 Disclaimer of Implied Warranties
	  	66
			
	 ARTICLE 11.
	  	DEFAULT, REMEDIES	  	67
			
	 Section 11.1
	  	 Purchaser’s Default
	  	67
	 Section 11.2
	  	 Marriott’s Default
	  	67
			
	 ARTICLE 12.
	  	TERMINATION	  	68
			
	 Section 12.1
	  	 Termination
	  	68
	 Section 12.2
	  	 Effect of Termination
	  	69
			
	 ARTICLE 13.
	  	GENERAL PROVISIONS	  	69
			
	 Section 13.1
	  	 Fees and Expenses
	  	69
	 Section 13.2
	  	 Amendment and Modification
	  	69
	 Section 13.3
	  	 Waiver
	  	69
	 Section 13.4
	  	 Notices
	  	70
	 Section 13.5
	  	 Interpretation
	  	71
	 Section 13.6
	  	 Restriction on Acquisitions
	  	71
	 Section 13.7
	  	 Entire Agreement
	  	71
	 Section 13.8
	  	 No Third-Party Beneficiaries
	  	72
	 Section 13.9
	  	 Governing Law
	  	72
	 Section 13.10
	  	 Submission to Jurisdiction
	  	72
	 Section 13.11
	  	 Personal Liability
	  	72
	 Section 13.12
	  	 Assignment; Successors
	  	73
	 Section 13.13
	  	 No Brokers
	  	73

  

 -v- 

					
	 Section 13.14
	  	 Severability
	  	73
	 Section 13.15
	  	 Counterparts
	  	73
	 Section 13.16
	  	 Facsimile Signature
	  	73

  
 Exhibits and
Schedules 
  

			
	 Schedule 1.1(a)
	  	Ancillary Agreements
	 Schedule 1.1(b)(i)
	  	Unopened Operating Supplies
	 Schedule 1.1(b)(ii)
	  	Miscellaneous Operating Supplies Budget
	 Schedule 1.1(c)
	  	Marriott’s Knowledge
	 Schedule 2.1(a)
	  	Hotels (Fee Sale)
	 Schedule 2.1(b)
	  	Hotels (Lease Assignment & Sale)
	 Schedule 2.1(c)
	  	Hotels (Target Sale)
	 Schedule 2.1(c)-1
	  	Alternate Assignment Hotels
	 Schedule 2.1(d)
	  	Minority Owned Entities
	 Schedule 3.3(a)
	  	Target North American Capex
	 Schedule 3.3(b)
	  	Initial Required Working Capital
	 Schedule 3.5
	  	Transfer Taxes
	 Schedule 5.5A
	  	Conflicts
	 Schedule 5.8A
	  	Litigation
	 Schedule 5.9A
	  	Compliance with Laws
	 Schedule 5.10A
	  	Marriott Material Contracts
	 Schedule 9.2(d)
	  	Certain Consents
	 Schedule 9.4(b)
	  	Purchaser’s Closing Deliveries
	 Schedule 9.5(c)
	  	Marriott’s Closing Deliveries
		
	 Exhibit A
	  	Purchase and Sale Agreement – CTF/Marriott
	 Exhibit B
	  	Hotel Management Agreements
	 Exhibit C
	  	Intercreditor Claims Side Letter
	 Exhibit D
	  	Owner Agreements

  

 -vi- 

  
 PURCHASE AND SALE
AGREEMENT 
  
 THIS PURCHASE AND SALE AGREEMENT is
made as of the 27th day of April, 2005 by and among MARRIOTT INTERNATIONAL, INC. (“Marriott”), and SUNSTONE HOTEL INVESTORS, INC., a Maryland corporation, together with rights of assignment to Affiliates (the
“Purchaser”). 
  
 R E C I T A L S

  
 (A) Pursuant to the terms of a Purchase and Sale
Agreement dated April 27, 2005 (the “CTF Agreement”), a copy of which is (as it relates to the Hotels which are the subject of this Agreement) attached hereto as Exhibit A, Marriott is the contract purchaser of certain land,
improvements and personal property consisting of hotels in the United States which are currently owned by CTF Holdings Ltd., a British Virgin Islands company and its subsidiaries (collectively, “CTF”), all of which are currently
operated and managed by Marriott under the Renaissance brand. 
  
 (B) The CTF Agreement grants to Marriott the right to designate persons or entities to which CTF has then agreed it will convey the Hotels as described in the CTF Agreement. The parties hereto intend that Marriott shall designate the
Purchaser as a Designee under the CTF Agreement and Marriott shall cause CTF to sell to the Purchaser as a Designee of Marriott, and the Purchaser shall acquire directly from CTF, all of the interests as described in Recital (C) below. 

 
 (C) Marriott wishes to cause CTF to transfer all of CTF’s interests
in six (6) hotels to the Purchaser, through (i) the sale of the land, improvements and personal property comprising two (2) of such hotels, or at the Purchaser’s option, the sale of equity interests in entities that have interests in such
hotels, (ii) the sale of equity interests in entities that have Leasehold Interests in three (3) hotels or, at Purchaser’s option, the assignment of the leasehold interest in such hotels; and (iii) the sale of minority equity interests in
Minority Owned Entities that have interests in one (1) hotel, and the Purchaser wishes to acquire such interests. 
  
 NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, the mutual receipt and legal
sufficiency of which are hereby acknowledged, Marriott and the Purchaser hereby agree as follows: 
  
 ARTICLE 1. DEFINITIONS. 
  
 Section 1.1 Certain Defined Terms. For purposes of this Agreement: 
  
 “Accounting Firm” means BDO Seidman, LLP, or such other accounting firm as CTF and the
parties shall agree. 
  
 “Accounting
Period” means the four (4) week accounting periods having the same beginning and ending dates as Marriott’s four (4) week accounting periods, 

  

 
except that an Accounting Period may occasionally contain five (5) weeks when necessary to conform Marriott’s accounting system to the calendar.

  
 “Affiliate,” with respect to
any specified Person, means any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person. 
  
 “Ancillary Agreements” means the agreements
listed on Schedule 1.1(a) and any other Closing instruments or other transfer documents necessary or desirable to effectuate the transactions contemplated hereby, including those required under the Laws of any local jurisdiction, and all
other agreements, documents and instruments required to be delivered by any party pursuant to this Agreement, and any other agreements, documents or instruments entered into, at or prior to Closing in connection with this Agreement or the
transactions contemplated hereby, including without limitation, the acknowledgement to be signed and delivered by Purchaser as described in Section 12.12(a) of the CTF Agreement and the Intercreditor Claims Side Letter and excluding the Hotel
Management Agreements and the Owner Agreements. 
  
 “Business Day” means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by Law to be closed in The City of New York. 
  
 “Capital Expenditures” means any
expenditure for property, plant, fixtures and furnishings and equipment located at a Hotel as determined to be a capital expenditure under GAAP and the Uniform System of Accounts. 
  
 “Closing Interest Rate” means 3 month Libor (as quoted by Bloomberg Service for 3-month
Libor or on any successor or substitute page of such service reasonably satisfactory to CTF and the parties at approximately 10:00 a.m., New York City time on any date of determination) plus 150 basis points, calculated on the basis of a 365 day
calendar year. 
  
 “Code” means
the Internal Revenue Code of 1986, as amended through the date hereof, and any Treasury Regulations promulgated thereunder. 
  
 “Commercially Reasonable Efforts” means the efforts that a prudent Person desirous of achieving a result would use in
similar circumstances to achieve such result expeditiously and on commercially reasonable terms, without the expenditure of funds; provided, however, that in connection with its assumption of any Leasehold Interest, the Purchaser is
obligated to provide a party to become the assignee which meets the financial requirements for its acceptance by the landlord set forth in the lease or, if no requirements are specified in the lease, a party that has reasonably sufficient net assets
to assure the applicable landlord of its performance under the lease. 
  
 “Consent” means any approval, consent, ratification, permission, waiver or authorization (including any Governmental Authorization). 
  

 -2- 

 “Contract” means any legally binding written or oral agreement,
contract, subcontract, lease, understanding, option, warranty, purchase order, license, sublicense, insurance policy, or commitment or undertaking of any nature related to any Hotel or Hotel Interest. 
  
 “Control,” including the terms
“controlled by” and “under common control with,” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership
of voting securities, as trustee or executor, as general partner or managing member, by contract or otherwise, including the ownership, directly or indirectly, of securities having the power to elect a majority of the board of directors or similar
body governing the affairs of such Person. 
  
 “CTF” shall mean CTF Holdings Ltd. and those of its Subsidiaries identified as Selling Entities and listed on Schedule 2.1(a), (b) and (c) of the CTF Agreement. 
  
 “CTF Ancillary Agreements” shall mean the
agreements listed on Schedule 1.1(a) of the CTF Agreement and any other Closing instruments or other transfer documents necessary or desirable to effectuate the transactions contemplated thereby, including those required under the Laws of any
local jurisdiction and all other agreements, documents and instruments required to be delivered by CTF pursuant to the CTF Agreement, and any other agreements, documents or instruments entered into, at, or prior to Closing, in connection with the
CTF Agreement or the transactions contemplated thereby. 
  
 “CTF Schedules” means those schedules referenced in, and attached to, the CTF Agreement. All disclosures made on any CTF Schedule are deemed to be made for all CTF Schedules, to the extent it is
apparent or can be reasonably inferred from the nature and contents of the CTF Schedule that such disclosure is applicable to other CTF Schedules. 
  
 “CTF Selling Entity” means CTF and those entities identified as Selling Entities on Schedules 2.1(a)-(e) of the
CTF Agreement. 
  
 “CTF’s
Knowledge” or derivations thereof means the knowledge of any officer or employee of CTF whose name is listed on Schedule 1.1(c) of the CTF Agreement with respect to a particular fact or other matter of which such individual is
actually aware. 
  
 “Debt” means
any debts for borrowed money (including any interest, fees and penalties incurred in connection therewith) outstanding of any Target or that is secured by a lien on any Hotel Interest. 
  
 “Employee Benefit Plan” means an “employee benefit plan” as such term is defined
in Section 3(3) of ERISA or any other employee benefit plan, program or arrangement, including, any pension, profit sharing, 401(k), deferred compensation, retirement, bonus, incentive, stock option, stock appreciation right, stock purchase or

  

 -3- 

 
restricted stock plan, severance or “golden parachute” arrangement, or any other compensation, perquisite, welfare or fringe benefit plan, program
or arrangement providing for benefits for, or for the welfare of, any or all of the current or former employees, leased employees, independent contractors, officers, directors, managers, managing members, members, trustees or partners of any of the
Targets or the beneficiaries of such persons. 
  
 “Encumbrance” means any lien, pledge, hypothecation, charge, mortgage, security interest, encumbrance, claim, infringement, interference, option, right of first refusal, right of first offer, preemptive right or community
property interest (including any restriction on the voting of any security, any restriction on the transfer of any security or other asset, any restriction on the receipt of any income derived from any asset, any restriction on the use of any asset
and any restriction on the possession, exercise or transfer of any other attribute of ownership of any asset); provided, however, that the term Encumbrance shall not be deemed to include (a) Liens for current Property Taxes not yet due
and payable or that are being contested in good faith, in each case, and for which adequate accruals have been established on the books of the CTF Selling Entity or Target, as applicable, (b) Liens for assessments or other governmental charges
established by statute, regulation, ordinance or other Law or, Liens of landlords, carriers, warehousemen, mechanics or materialmen securing obligations incurred in CTF’s Ordinary Course of Business that are not yet due and payable or due but
not delinquent or being contested in good faith, (c) Liens incurred in CTF’s Ordinary Course of Business in connection with workers’ compensation, unemployment insurance and other types of social security or to secure the performance of
tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, performance and return of money bonds and similar obligations, (d) purchase money or similar security interests granted in connection with the purchase or
capital or operating lease of equipment or supplies used in the operations of a Hotel, and (e) Permitted Encumbrances. 
  
 “Environmental Law” means any Law applicable to a Target or in connection with the operation of a Hotel that relates to
or otherwise imposes liability or standards of conduct concerning the prevention and control of air, water and ground pollution or otherwise relating to the manufacture, processing, generation, distribution, use, treatment, storage, disposal,
cleanup, transport or handling of pollutants. 
  
 “Equity Interests” means all CTF’s and/or a CTF Selling Entity’s stock, membership units, partnership interest and other equity interests, as applicable, of a Target. 
  
 “ERISA” means the Employee Retirement
Income Security Act of 1974, as amended. 
  
 “ERISA Affiliate” means any corporation or other entity which is treated as a single employer with any of the Targets pursuant to the provisions of section 414(b), (c), (m) or (o) of the Code. 
  

 -4- 

 “FF&E” shall have the meaning given to that term under the Hotel
Management Agreements. 
  
 “FF&E
Reserve” shall have the meaning given to that term under the Hotel Management Agreements. 
  
 “GAAP” means United States generally accepted accounting principles as in effect on the date hereof. 
  
 “Governmental Authority” means any United
States or non-United States federal, national, supranational, state, provincial, local or similar government, governmental, regulatory or administrative authority, branch, agency or commission or any court, tribunal, or arbitral or judicial body.

  
 “Governmental Authorization”
means any: (a) permit, license, certificate, franchise, permission, variance, clearance, registration, qualification or authorization issued, granted, given or otherwise made available by or under the authority of any Governmental Authority or
pursuant to any applicable Law; or (b) right under any Contract with any Governmental Authority. 
  
 “Hotel” means each hotel identified on Schedules 2.1(a)-(d) to be transferred pursuant to this Agreement.

  
 “Hotel Interests” means the
Fee Properties, Leasehold Properties and Equity Interests being transferred by CTF to the Purchaser in accordance with this Agreement, the Ancillary Agreements, the CTF Agreement and the CTF Ancillary Agreements. 
  
 “Hotel Management Agreements” means each of
the agreements to be executed at Closing, by Designee, as Owner, and Marriott as Manager, of each of the Hotels (other than Techworld) acquired by Purchaser hereunder substantially in the form attached hereto as Exhibit B. 
  
 “Intercompany Debt” means any debts
outstanding of any Target to CTF or any of its Affiliates. For the avoidance of doubt, Intercompany Debt does not include the Orlando ODL Note or the Orlando Mortgage Note. 
  
 “Intercreditor Claims Side Letter” means the letter to be executed by Marriott WSRH
Holdings, LLC and Purchaser hereunder substantially in the form attached hereto as Exhibit C. 
  
 “Interest Holder” means any Target or, with respect to the Hotels being transferred pursuant to the Fee Sale or the Lease
Agreement and Sale, any CTF Selling Entity that conveys a Hotel Interest at the Closing. 
  
 “IRS” means the Internal Revenue Service of the United States. 
  

 -5- 

 “Law” means any statute, law, ordinance, regulation, rule, code,
executive order, injunction, judgment, decree or order of any Governmental Authority. 
  
 “Leased Real Property” means the real property leased by a CTF Selling Entity or Target in each case, as tenant, together
with, to the extent so leased, the Hotel and all other structures, facilities or improvements currently or hereafter located therein or thereon, and all easements, licenses, rights and appurtenances relating to the foregoing. 
  
 “Leasehold Interest” means the leasehold
interest created under the applicable Leases for the Leased Real Property. 
  
 “Leases” means the leases identified on Schedules 2.1(b) and (c).  
  
 “Legal Proceeding” means any action, suit, litigation, arbitration, proceeding (including any civil, criminal,
administrative, investigative or appellate proceeding), hearing, inquiry, audit, examination or investigation commenced, brought, conducted or heard by or before, or otherwise involving, any court or other Governmental Authority or any arbitrator or
arbitration panel. 
  
 “Lien”
shall mean a charge against or interest in property to secure payment of a debt or performance of a liability, whether granted voluntarily or involuntarily, including without limitation, any security interest, pledge, mortgage or charge, except for
any charge against or interest to secure any purchase money obligation or any operating or capital leases of personal property. 
  
 “Marriott’s Accounting Practices” means the primary accounting treatment (including the implicit contractual
interpretations underlying such treatment) that Marriott has given a particular issue on the books and records of the Hotels, consistent with past practices, notwithstanding any objection that CTF has previously raised to such practices. For
avoidance of doubt, “Marriott’s Accounting Practices” shall not include the rights or position that CTF has reserved or asserted, but rather only the accounting treatment actually implemented by Marriott on the books and records of
the Hotels. 
  
 “Marriott’s Closing
Deliveries” means the Ancillary Agreements and the other documents to be delivered at Closing by Marriott as set forth in Schedule 9.5(c). 
  
 “Marriott/CTF Hotel Management Agreements” means each of the agreements, as amended, between CTF or its Subsidiaries and
Marriott, providing for the management and operation of the Hotels including (i) the Master Management Agreement dated August 5, 1993, between CTF Hotel Holdings, Inc. and Renaissance Hotel Operating Company, (ii) the HPI Master Management Agreement
dated as of June 30, 1995 between Renaissance Hotel Group N.V. and Hotel Property Investments (B.V.I) Ltd., (iii) the Agreement dated April 23, 1999 by and among Marriott International, Inc., Renaissance Hotel Operating Company, Renaissance Hotel
Group N.V., CTF Hotel Holdings, Inc., and Hotel Property Investments (B.V.I.), Ltd., and (iv) the Hotel-specific agreements set forth on Schedules 2.1(a)-(c) of the CTF Agreement. 
  

 -6- 

 “Marriott’s Knowledge,” or derivations thereof, means in
Marriott’s capacity as manager of the Hotels under the Marriott/CTF Hotel Management Agreements, the knowledge of any officer or employee of Marriott whose name is listed on Schedule 1.1(c) and, even if not named on Schedule
1.1(c), each employee of Marriott at each Hotel who holds the position as general manager at such Hotel, and those attorneys of Venable LLP who have given substantive legal attention to the representation of Marriott in connection with the
transactions contemplated by this Agreement, subject, however, to the attorney-client privilege. 
  
 “Marriott Material Contract” means any Contract relating to any Hotel or Hotel Interest to which Marriott is a party or
entered into or administered by Marriott on behalf of CTF other than (a) Contracts entered into in the Ordinary Course of Business being those Contracts involving (i) an annual expense of less than $50,000 or (ii) a space lease of less than 3,000
square feet, (b) group sales Contracts, or (c) other Hotel Contracts with guests or customers. 
  
 “Material Contract” means (a) any Contract that (i) involves an annual expense to an Interest Holder of more than
$100,000 (or more than $100,000 on an annualized basis) or (ii) is not terminable upon ninety (90) days notice or less with damages or penalties of such termination not exceeding $10,000, other than (A) those Contracts to which Marriott is a party,
(B) those Contracts entered into or administered by Marriott on behalf of CTF, (C) the Leases, and (D) the Debt and (b) any Contract between an Interest Holder and an Affiliate of CTF other than those identified on Schedule 5.10 of the CTF
Agreement. 
  
 “Minority Owned
Entities” means THA I, LLC, a District of Columbia limited liability company and THA II, LLC, a District of Columbia limited liability company. For the avoidance of doubt, the Minority Owned Entities are not Targets. 
  
 “Miscellaneous Operating Supplies” means
items in unopened packages in the following categories: (i) linen; (ii) china, glass & silver; (iii) miscellaneous serving equipment; (iv) uniforms; and (v) guest supplies. The value of Miscellaneous Operating Supplies for the Hotels shall be
conclusively established as (1) the total of the amounts set forth on Schedule 1.1(b)(i) of the CTF Agreement, less (2) the amounts set forth thereon with respect to any Hotels not transferred by CTF to Purchaser at the Closing, plus (3) the
amount, if any, by which (a) the expense for Miscellaneous Operating Supplies for the Hotels incurred in the aggregate at the Hotels transferred by CTF at the Closing, from January 1, 2005 to the Effective Date exceeds (b) the total of the amounts
set forth on Schedule 1.1(b)(ii) with respect to such transferred Hotels (with the amounts set forth on Schedule 1.1(b)(ii) to be pro rated with respect to Hotels located in the United States if the Effective Date is other than June
17, 2005, and with respect to all other Hotels if the Effective Date is other than June 30, 2005, based in either case on the number of actual days elapsed from January 1, 2005). 
  
 “Order” means any: (a) order, judgment, injunction, edict, decree, ruling, pronouncement,
determination, decision, opinion, verdict, sentence, subpoena, writ or 

  

 -7- 

 
award issued, made, entered, rendered or otherwise put into effect by or under the authority of any court, administrative agency or other Governmental
Authority or any arbitrator or arbitration panel; or (b) Contract with any Governmental Authority entered into in connection with any Legal Proceeding. 
  
 “Ordinary Course of Business” means such action is consistent with the past practices of such Person and is taken in the
ordinary course of the normal day-to-day operations of such Person. 
  
 “Organizational Documents” mean: (a) if a corporation, the articles or certificate of incorporation and the bylaws; (b) if a general partnership, the partnership agreement and any statement of
partnership; (c) if a limited partnership, the limited partnership agreement and the certificate of limited partnership; (d) if a limited liability company, the articles of organization and operating agreement; (e) any other charter or similar
document adopted or filed in connection with the creation, formation or organization of such entity; (f) the minutes of each meeting or written consents of the board of directors or other governing body, any committee of the board of directors or
other governing body, general partners, limited partners, managers or managing members, members, trustees, stockholders or equity holders (g) all equity holders’ agreements, voting agreements, voting trust agreements, joint venture agreements,
registration rights agreements or other agreements or documents relating to the organization, management or operation of such entity, or relating to the rights, duties and obligations of the equity holders of such entity; and (h) any amendment or
supplement to any of the foregoing. 
  
 “Orlando Hotel Management Agreement” means the Marriott/CTF Hotel Management Agreement, dated December 26, 1986 between SWW No. 1 and The CTF Hotel Management Corporation, as amended. 
  
 “Orlando Mortgage Note” means the note
evidencing a loan and mortgage in the principal amount outstanding of $54,229,280 as of December 31, 2004, and all related documents, copies of which are attached as Exhibit B to the CTF Agreement. 
  
 “Orlando ODL Note” means the note
evidencing the loan by CTF Orlando Resort LLC to SWW No. 1 LLC in the outstanding principal amount of $112,742,758 as of December 31, 2004, a copy of which is attached as Exhibit A to the CTF Agreement. 
  
 “Owned Real Property” means the real
property owned by a CTF Selling Entity or Target together with the Hotel and all other structures, facilities or improvements currently or hereafter located thereon, and all easements, licenses, rights and appurtenances relating to the foregoing.

  
 “Owner Agreements” means
each of the agreements to be executed at Closing by Marriott as manager, the Designee that acquires a Hotel and/or Hotel Interest and Purchaser’s tenant REIT subsidiary pursuant to this Agreement in the form attached hereto as Exhibit D.

  

 -8- 

 “Permits” means, with respect to each Hotel property as applicable, all
transferable or assignable permits (including liquor licenses), certificates of occupancy, operating permits, sign permits, development rights and approvals granted by any Governmental Authority or by any private party pursuant to any applicable
declaration of covenants or like instrument, instrument, licenses, warranties and guarantees held by each Interest Holder which relate exclusively to each Hotel, as applicable. 
  
 “Permitted Encumbrances” means with respect to each Hotel property, (a) all matters shown
on or disclosed by the Title Materials which are (i) not objected to by the Purchaser pursuant to Section 9.1 or (ii) are deemed to have been accepted or waived by the Purchaser pursuant to Section 9.1, provided, however, that
Permitted Encumbrances shall in no circumstance include Encumbrances arising from any Debt, (b) the Marriott/CTF Hotel Management Agreements (which, other than Techworld will be terminated at Closing), (c) applicable zoning regulations and
ordinances and other governmental laws, ordinances and regulations provided the same do not prohibit or impair in any material respect use of each Hotel property as currently operated, (d) the occupancy rights of transient lodging guests as
transient lodging guests and (e) liens, pledges, hypothecations, charges, mortgages, security interests, encumbrances, claims, infringements, interferences, options, rights of first refusal, preemptive rights or community property interests created
by the acts or omissions of Marriott as manager of the Hotels. 
  
 “Person” means an individual, corporation, partnership, limited liability company, limited partnership, syndicate, person, trust, association, organization or other entity, including any Governmental
Authority, and including any successor, by merger or otherwise, of any of the foregoing. 
  
 “Personal Property” means all fixtures, furnishings, artwork, systems, equipment and items of personal property (other
than cash) used in the operation of a Hotel or attached or appurtenant to a Hotel. 
  
 “PIP Expenditures” means expenditures of CTF and its Subsidiaries, in respect of the Property Improvement Programs listed
on Schedule 3.2(b) of the CTF Agreement. 
  
 “Property” means the Leasehold Interests, the Owned Real Property and the Personal Property. 
  
 “Property Improvement Plans” shall have the meaning given to that term in Section 2.5 of this Agreement. 
  
 “Property Tax” means real estate or
personal property taxes, assessments and water or sewer charges. 
  
 “Purchaser Material Adverse Effect” means any event, change, circumstance, effect or state of facts that is materially adverse to the ability of the Purchaser to perform its obligations under this
Agreement or the Ancillary Agreements to which it will be a party or to consummate the transactions contemplated hereby or thereby. 
  

 -9- 

 “Purchaser’s Closing Deliveries” means the Ancillary Agreements and
the other documents to be delivered at Closing by the Purchaser as set forth in Schedule 9.4(b). 
  
 “Purchaser’s Knowledge”, or derivations thereof, means the knowledge of Gary Stougaard (CFO), Tom Naughton (VP
Acquisitions), Bob Alter (CEO), Hunter Oliver (Acquisitions), and those attorneys of Squire, Sanders & Dempsey, L.L.P., who have given substantive legal attention to the representation of Purchaser in connection with the transactions
contemplated by this Agreement, subject, however, to the attorney-client privilege. 
  
 “Representatives” means the officers, employees, agents, accountants, advisors, bankers and other representatives of a
Person. 
  
 “Sales, Use & Occupancy
Tax Audit Liabilities” means any liabilities resulting from audits by any Governmental Authority for sales, use and occupancy taxes arising from the operations of the Hotels located within the United States, regardless of the period in
which such liabilities arose. For the avoidance of doubt, Sales, Use & Occupancy Tax Audit Liabilities shall exclude any Transfer Tax liability. 
  
 “Schedules” means each of those schedules referenced in, and attached to, this Agreement. Each such Schedule is
considered part of this Agreement. 
  
 “Subsidiary” or “Subsidiaries” of any Person means any other Person controlled by such Person, directly or indirectly, through one or more intermediaries. 
  
 “Target” means those entities identified as
such on Schedule 2.1(c) and any Subsidiaries of those entities. 
  
 “Target Sale” means the transfer of the Equity Interests of the Targets by CTF to Purchaser in accordance with Sections 2.1(a) and 2.1(c). 
  
 “Tax or Taxes” shall mean any and all
taxes, charges, fees, levies or other assessments, including but not limited to income, gross receipts, excise, real or personal property, sales, withholding, social security, retirement, unemployment, occupation, use, goods and services, service
use, license, value added, capital, net worth, payroll, profits, withholding, franchise, registration, transfer and recording taxes, fees and charges, and any other taxes, assessment or similar charges whether computed on a separate, consolidated,
unitary, combined or any other basis; and such term shall include any interest whether paid or received, fines, penalties or additional amounts attributable to, or imposed upon, or with respect to, any such taxes, charges, fees, levies or other
assessments. 
  

 -10- 

 “Tax Return” shall mean any report, return, document, questionnaire,
declaration or other information or filing required to be supplied to any Taxing Authority with respect to Taxes, including information returns, any documents with respect to or accompanying payments of estimated Taxes, any claim or request for
refunds, or any documents with respect to or accompanying requests for the extension of time in which to file any such report, return, document, questionnaire, declaration or other information. 
  
 “Taxing Authority” means, with respect to
any Tax, the IRS or any other United States authority that imposes such Tax, including any state, county, local, or any subdivision or taxing agency thereof. 
  

“Title Company” means First American Title Insurance Company. 
  
 “Transfer Tax” means any stamp,
registration real or personal property transfer, sales, use, documentary notary fee or other similar Tax or charge related to the Fee Sale, Target Sale or the Lease Assignment & Sale. 
  
 “Working Capital” means the amount
determined in accordance with Marriott’s Accounting Practices, being: (a) the sum of all (i) cash in Hotel operating accounts and petty cash, (ii) accounts receivable (net of (xx) all write-offs determined by Marriott made through the end of
Accounting Period prior to the Closing, and (yy) a reduction equal to 3% for the trailing thirteen period average of non-credit card receivables), (iii) inventories of food and beverages and, under certain circumstances, goods for sale at retail
(but “inventories” shall in no event include furniture or Miscellaneous Operating Supplies), (iv) prepaid expenses, (v) deposits (whether classified as current or otherwise), (vi) prepaid Taxes and Taxes receivable (excluding any United
States federal, state, local, and foreign income taxes, which are addressed in Article 8 of this Agreement), (vii) Miscellaneous Operating Supplies; minus (b) the sum of all: (1) accounts payable and other current payables, (2) accrued payroll,
benefits, and related expenses (including bonuses), (3) accrued operating liabilities, (4) advance deposits from customers and others, (5) Taxes payable excluding any United States federal, state, local, and foreign income taxes, (6) security
deposits paid by tenants as to leases of space in the Hotels in effect on the Effective Date, (7) rent from leases of space in the Hotels received on or before the Effective Date, to the extent allocable to any period after the Effective Date (and
accordingly, rents paid before the Effective Date for the month in which the Effective Date occurs will be accounted for in this clause (b), based on the number of days in such month after the Effective Date), and (8) one-half of the room revenue of
each Hotel acquired by Purchaser at the Closing in respect of the room night that begins on the Effective Date and ends on the day after (it being understood that the revenue for such room shall be for the account of the CTF Selling Entity).
Excluded in all cases from the definition of “Working Capital” are (A) deferred Taxes resulting from an accounting convention to reflect timing differences between book and tax accounting, (B) the current and the long-term portion of any
Debt and any accrued interest thereon, and (C) Management Fees and Reimbursables, as defined in the CTF Agreement. The calculation of “Taxes payable”, as part of Working Capital, includes a pro rata share of the property taxes for the tax
year in which the Effective Date occurs (as estimated by Marriott), based on the number of days in the tax year after the 

  

 -11- 

 
Effective Date, to the extent that such property taxes allocable to the period after the Effective Date have not been paid prior to the Effective Date.
Similarly, the calculation of “prepaid Taxes”, as part of Working Capital, includes a pro rata share of the property taxes for the tax year in which the Effective Date occurs (as estimated by Marriott), based on the number of days in the
tax year after the Effective Date, but only the extent that such property taxes allocable to the period after the Effective Date have been paid prior to the Effective Date. 
  
 Section 1.2 Table of Definitions. The following terms have the meanings set forth in the pages set forth below:

  

			
	 Definition

	  	Location

	 Adjusted Estimated Total Working Capital
	  	24
	 Adjusted Purchase Price
	  	23
	 Adjusted Working Capital
	  	23
	 Alternate Assignment
	  	20
	 Alternate Target Sale
	  	20
	 Assumed Liabilities
	  	21
	 Balance Sheet
	  	32
	 Base Amount
	  	56
	 Casualty Loss
	  	49
	 Certification
	  	56
	 Claim Deadline
	  	70
	 Closing
	  	26
	 Closing Allocated Price
	  	25
	 Closing Date
	  	27
	 Contest
	  	58
	 CTF Agreement
	  	7
	 CTF Level Data
	  	32
	 De Minimus Amount
	  	70
	 Deposit
	  	23
	 Dispute Notice
	  	70
	 Effective Date
	  	27
	 Estoppel Certificates
	  	55
	 Excluded Liabilities
	  	32
	 Fee Property
	  	20
	 Fee Sale
	  	20
	 Group A Hotels
	  	49
	 Group A Threshold Amount
	  	49
	 Group B Hotels
	  	50
	 Group B Threshold Amount
	  	50
	 Hotel Level Data
	  	32
	 Indemnification Limit
	  	71
	 Indemnified Party
	  	68
	 Indemnifying Party
	  	68

  

 -12- 

			
	 Information
	  	54
	 Initial Required Working Capital
	  	24
	 Lease Assignment & Sale
	  	20
	 Leasehold Property
	  	20
	 Liability Accruals
	  	56
	 Losses
	  	67
	 Marriott
	  	7
	 Marriott Covenants
	  	67
	 Marriott Indemnified Parties
	  	67
	 Mirror Claim
	  	66
	 New Title Matters
	  	62
	 Objection Period
	  	60
	 Pass Through Representations
	  	66
	 Permitted Encumbrances
	  	15
	 PIP Amount
	  	22
	 Potential Contributor
	  	71
	 Pre-Closing Tax Period
	  	57
	 Preliminary Allocated Price
	  	21
	 Preliminary PIPs
	  	22
	 Pro Forma
	  	60
	 Proposed Conveyance Documents
	  	63
	 Purchaser
	  	7
	 Purchaser Indemnified Parties
	  	67
	 Purchaser’s Objections
	  	60
	 Purchaser’s Out of Pocket Costs
	  	27
	 Real Properties
	  	59
	 Requirements
	  	60
	 Straddle Period
	  	57
	 Structural and Environmental Consultants
	  	25
	 Surveyor
	  	59
	 Termination Date
	  	75
	 Threshold Amount
	  	71
	 Title Cure Period
	  	61
	 Title Materials
	  	60
	 Transaction
	  	21
	 Unadjusted Purchase Price
	  	23
	 UST Work
	  	56
	 USTs
	  	56

  

 -13- 

 ARTICLE 2. THE TRANSACTIONS 
  
 Section 2.1 Transactions. Upon the terms and subject to the
conditions of this Agreement, at the Closing: 
  
 (a) With respect to the Hotels listed on Schedule 2.1(a), Marriott shall cause CTF to (i) sell, transfer, convey and deliver the Owned Real Property, (ii) sell, transfer, convey and deliver all of the Personal Property, and (iii) assign or
otherwise transfer and deliver the Permits and Contracts related to such Hotels (for each Hotel, the “Fee Property”) to the Purchaser and the Purchaser shall purchase and assume the Fee Properties from CTF (the “Fee
Sale”); provided, however, at Purchaser’s election (to be made no later than May 3, 2005) in lieu of any specific Fee Sale, Marriott shall cause CTF to sell, transfer, convey and deliver all of the Equity Interests of a
Target to Purchaser, and Purchaser shall purchase such Equity Interest of the Target from CTF in the same manner as set forth in Schedule 2.1(c), and such sale shall be deemed a Target Sale (each, an “Alternate Target Sale”);

  
 (b) With respect to the Hotels listed on
Schedule 2.1(b), Marriott shall cause CTF to (i) assign or otherwise transfer and deliver CTF’s Leasehold Interests, (ii) sell, transfer, convey and deliver all of the Personal Property, and (iii) assign or otherwise transfer and deliver
the Permits and Contracts related to such Hotels (for each Hotel, the “Leasehold Property”) to Purchaser and Purchaser shall assume and purchase the Leasehold Properties from CTF (the “Lease Assignment & Sale”);

  
 (c) With respect to the Hotels listed on
Schedule 2.1(c), Marriott shall cause CTF to sell, transfer, convey and deliver all of the Equity Interests of the Targets to the Purchaser and the Purchaser shall purchase the Equity Interests of the Targets from CTF; provided,
however, with respect to the Hotels identified on Schedule 2.1(c)-1, if the Purchaser has obtained the landlord’s consent for CTF to assign the Leasehold Interests for any such Hotel to the Purchaser, then at Purchaser’s
election (to be made no later than May 3, 2005) in lieu of any specific Target Sale, Marriott shall cause CTF to (i) assign or otherwise transfer and deliver CTF’s Leasehold Interests, (ii) sell, transfer, convey and deliver all of the Personal
Property, and (iii) assign or otherwise transfer and deliver the Permits and Contracts related to such Hotel in the same manner as set forth in Section 2.1(b) above, and such assignment shall be deemed a Lease Assignment & Sale (each an
“Alternate Assignment”); 
  
 (d)
Marriott shall cause CTF to sell, transfer, convey and deliver its equity interests in the Minority Owned Entities to the Purchaser and Purchaser shall purchase the equity interests in the Minority Owned Entities from the CTF; 
  
 (e) Marriott shall cause the CTF Subsidiary which is the
holder of the Orlando Mortgage Note and the Orlando ODL Note to assign and transfer to the Purchaser the Orlando Mortgage Note and the Orlando ODL Note, free and clear of all Encumbrances and the Purchaser shall assume all obligations thereunder and
shall cause The CTF Hotel Management Corporation to assign to Purchaser or terminate, at Marriott’s election, the Orlando Hotel Management Agreement; and 
  

(f) In connection with the Fee Sale and the Lease Assignment & Sale, Purchaser and any entity wholly-owned by Purchaser designated
by Purchaser as the Designee (as that term is used in the CTF Agreement) of any such Fee Sale or Lease Assignment & Sale, shall, jointly and severally, assume and pay, discharge, perform or otherwise satisfy from and after the Closing Date (with
effect as of the Effective Date) 

  

 -14- 

 
the following liabilities and obligations of the CTF Selling Entity relating to the ownership and operation of the applicable Hotel (the “Assumed
Liabilities”); 
  
 (i) all liabilities
referred to in clause (b) of the definition of “Working Capital;” and 
  
 (ii) all liabilities and obligations arising from all Contracts, Leases, Permitted Encumbrances and Permits subsequent to the Closing Date
(with effect as of the Effective Date) 
  
 provided, however, it is
understood and agreed by the parties that the Purchaser shall not assume any Debt except as explicitly set forth herein, and further provided that nothing in this Section 2.1(f) shall be construed as limiting the Purchaser’s recourse in respect
of a representation, warranty or covenant contained in this Agreement in accordance with Article 10. As used and described in this Agreement and in the CTF Agreement, a Designee must be either the Purchaser or a wholly-owned subsidiary of Purchaser.

  
 The transactions set forth in this Section 2.1 are collectively referred to as
the “Transaction.”  
  
 Section 2.2
Certain Information. 
  
 (a) Schedule
2.1(a) sets forth, for each Hotel being transferred through the Fee Sale: (i) the name and location of the Hotel, (ii) the name and jurisdiction of organization of the Target(s), (iii) the name and jurisdiction of organization of the CTF Selling
Entity, (iv) the portion of the Unadjusted Purchase Price (the “Preliminary Allocated Price”) allocated to the Fee Property; and (v) the permitted range of the Closing Allocated Price. 
  
 (b) Schedule 2.1(b) sets forth, for each Hotel being
transferred to the Purchaser through the Lease Assignment & Sale: (i) the name and location of the Hotel; (ii) the name and jurisdiction of organization of the CTF Selling Entity; (iii) title, date and parties to the Lease(s); (iv) the
Preliminary Allocated Price allocated to the Leasehold Interests and Personal Property; and (v) the permitted range of the Closing Allocated Price. 
  
 (c) Schedule 2.1(c) sets forth, for each Hotel being transferred to the Purchaser through the Target Sale: (i) the name and
location of the Hotel; (ii) the name and jurisdiction of organization of the CTF Selling Entity; (iii) the name and jurisdiction of organization of the Target(s); (iv) the nature of the Target’s ownership interest in the Hotel (i.e. fee
ownership or leasehold); (v) the percentage interest in the Target(s) being transferred hereunder; (vi) title, date and parties to the Lease(s), if applicable; (vii) the Preliminary Allocated Price allocated to the Target and Leasehold Property; and
(viii) the permitted range of the Closing Allocated Price. 
  

 -15- 

 (d) Schedule 2.1(d) sets forth for each Minority Owned Entity: (i) the name and
jurisdiction of the CTF Selling Entity; (ii) the percentage interest in the equity of the Minority Owned Entity being transferred hereunder; (iii) the Preliminary Allocated Price allocated to the Minority Owned Entity; and (iv) the permitted range
of the Closing Allocated Price. 
  
 Section 2.3
Debt. Schedule 2.4 of the CTF Agreement sets forth certain Debt as of the date of this Agreement. Marriott shall cause CTF to take such action, such that at the Closing all outstanding Debt shall have been repaid, defeased or otherwise
released. 
  
 Section 2.4 Intercompany Debt.
Marriott shall cause CTF to take such action such that at the Closing there shall be no Intercompany Debt outstanding in respect of any Target. Accordingly, all currently outstanding Intercompany Debt with respect to each Target shall have been
repaid, cancelled, forgiven, contributed to capital or otherwise extinguished (the method of extinguishing such Intercompany Debt to be selected by CTF), such that no Target shall remain liable for the payment of any principal, interest, fees or
penalties on any Intercompany Debt and such that the Purchaser shall not be liable for any Taxes in connection therewith. 
  
 Section 2.5 Property Improvement Plan Expenditures. Purchaser agrees, pursuant to each of the applicable Hotel Management Agreements, to
fund a maximum amount equal to $35,502,000 minus the PIP Expenditures (such amount, the “PIP Amount”) towards the immediate renovation and property improvement needs of the Hotels. Marriott shall, provide Purchaser for the Long
Beach, Westchester and Orlando Hotels prior to Closing, and for the other Hotels subsequent to Closing, with preliminary Property Improvement Plans for each Hotel, together with estimated pricing thereof, describing all of the renovation and
property improvement needs that Marriott considers necessary to meet System Standards (as defined in the Hotel Management Agreements) or otherwise desirable (the “Preliminary PIPs”). Following the delivery of each of the Preliminary
PIPs, Purchaser shall work with Marriott to refine and revise the Preliminary PIPs, in both scope and pricing, with the objective of agreeing upon final Property Improvement Plans that will satisfy all System Standards (as well as any other work
mutually agreed upon) for a budgeted amount not in excess of the PIP Amount. If the parties are able to agree on such final Property Improvement Plans, they shall be deemed to be the Renovation Plans for all purposes of the Hotel Management
Agreements. In the event that, within thirty (30) days following the delivery of the last Preliminary PIP, Purchaser and Marriott are unable to agree on final Property Improvement Plans for the Hotels in an aggregate amount not exceeding the PIP
Amount, then Marriott shall determine the scope of the final Property Improvement Plans (which shall be consistent with the Preliminary PIPs and System Standards) provided that the pricing of such scope (as determined by Marriott) shall not be in
excess of the PIP Amount. If the costs of the agreed final Property Improvement Plans are less than the PIP Amount, the PIP Amount will be reduced accordingly. In no event shall Purchaser be required to fund amounts in excess of the PIP Amount for
the agreed final Property Improvement Plans. Upon completion of the Final PIP (as that term is defined in, and in accordance with, the terms 

  

 -16- 

 
of the applicable Hotel Management Agreement), such Hotel shall be deemed to comply with the System Standards (as defined in the Hotel Management Agreements)
in effect as of the date of completion. 
  
 ARTICLE 3.
PURCHASE PRICE ADJUSTMENTS AND CLOSING 
  
 Section
3.1 Purchase Price. In consideration for the Transaction, the Purchaser shall pay into escrow at the Closing an aggregate purchase price of U.S. $419,470,000 (the “Unadjusted Purchase Price”), as shall be adjusted
as provided in this Article 3, Section 7.3 and Section 9.2 (the “Adjusted Purchase Price”). 
  
 Section 3.2 Deposit. Upon execution of this Agreement, Purchaser shall deposit into escrow $20,000,000 (the “Deposit”) with
the Title Company. The Deposit will be non-refundable, other than for termination based on a failure of a material condition to Purchaser’s obligation to consummate the Transaction. If the Transaction is consummated, the Deposit, and interest
earned thereon, will be applied against the Purchase Price; provided, however, if the Buy-Sell Procedures for the Techworld Hotel are invoked in accordance with Schedule 9.2(d) of this Agreement, the Deposit and all interest earned thereon
shall be retained by the Title Company to secure Purchaser’s obligations pursuant to Schedule 9.2(d). 
  
 Section 3.3 Estimated Working Capital, Capital Expenditure and PIP Expenditure Adjustments. 
  
 (a) Section 3.2 of the CTF Agreement contemplates, and
provides a procedure for, CTF and Marriott to determine certain items defined and described therein as the Estimated Total Working Capital, the Estimated North American Capex and the Estimated PIP Expenditures. Marriott and Purchaser shall
recalculate the Estimated Total Working Capital, utilizing the definition of Working Capital set forth in this Agreement for all purposes and calculations contemplated in this Section 3.3(a). At Closing, the Unadjusted Purchase Price shall be: (i)
increased (or decreased) by the amount by which the Estimated Total Working Capital applicable to the Hotels is more (or less) than $0; (ii) increased (or decreased) by the amount by which the Estimated North American Capex applicable to the Hotels
is more (or less) than the Target North American Capex Amount as set forth on Schedule 3.3(a); and (iii) increased by the amount of the Estimated PIP Expenditures. 
  
 (b) At Closing Purchaser shall provide to Marriott for each Hotel an amount equal to the Adjusted Working
Capital for such Hotel. Adjusted Working Capital shall mean, for each Hotel, the difference, if any, by which (i) the Adjusted Estimated Total Working Capital for such Hotel is less than (ii) the Initial Required Working Capital for such
Hotel. If the Adjusted Estimated Total Working Capital for any Hotel is less than $0, Purchaser shall fund the amount of such Adjusted Estimated Total Working Capital deficit at Closing and shall also fund the applicable Initial Required Working
Capital for such Hotel. If the Adjusted Estimated Total Working Capital for any Hotel is less than $0 and the Initial Required Working Capital for such Hotel is less than $0, 

  

 -17- 

 
Purchaser shall fund the amount equal to the difference between the negative Adjusted Estimated Total Working Capital and the negative Initial Required
Working Capital at Closing. Adjusted Estimated Total Working Capital shall mean, for each Hotel, the amount equal to (i) the Estimated Total Working Capital for such Hotel, minus (ii) the value of the Miscellaneous Operating Supplies included
in the calculation of the Estimated Total Working Capital for such Hotel. Initial Required Working Capital shall mean, with respect to each Hotel, the amount set forth on Schedule 3.3(b) for such Hotel. Marriott and Purchaser shall
recalculate the Estimated Total Working Capital utilizing the definition of Working Capital set forth in this Agreement for all purposes and calculations contemplated in this Section 3.2(b). 
  
 (c) At Closing, with respect to the Westchester Renaissance
only, the Unadjusted Purchase Price shall be further adjusted by a reduction equal to the product of (i) the amount of all trade receivables that are aged 60 days or more, times (ii) 0.85 (the “Aged Receivables”). To make such adjustment,
Marriott shall provide a list of such Aged Receivables, with specific identification of same. Subsequent to Closing, the parties agree that to the extent the Aged Receivables are collected, such amounts shall not be included as part of the revenues
of the Westchester Renaissance, but rather shall be paid directly to Marriott. The parties agree that the staff of the Westchester Renaissance may be used to collect such receivables, as part of their ordinary course of duties and without
prioritization of such receivables over any others. Marriott shall be responsible for tracking payment of the Aged Receivables and shall collect only upon payment of specific Aged Receivables. The foregoing provisions may, at the election of either
party, be included in the Hotel Management Agreement for the Westchester Renaissance. 
  
 Section 3.4 Post-Closing Adjustments. Section 3.3 of the CTF Agreement contemplates that, and provides a procedure for, CTF and Marriott to arrive at certain post-closing adjustments to the Working
Capital. Marriott and Purchaser shall recalculate the Estimated Total Working Capital utilizing the definition of Working Capital set forth in this Agreement for all purposes and calculations contemplated in this Section 3.4. Marriott, with the
assistance of Purchaser, shall prepare, and submit, the Closing Statements defined and described in Section 3.3 of the CTF Agreement including information and documentation provided by Purchaser within sufficient time in order for Marriott to comply
with the time requirements set forth in Section 3.3 of the CTF Agreement. Upon receipt of the final report from the Accounting Firm as described in Section 3.3(c) of the CTF Agreement, which such report shall be final and binding on the parties
hereto, either Marriott shall cause CTF to transfer to Purchaser or Purchaser shall transfer to CTF, as the case may be, by wire transfer as described in Section 3.3(c) of the CTF Agreement, the difference between the adjustments made to the
Unadjusted Purchase Price (pursuant to Section 3.3 above) and the amounts set forth in the Closing Statements (as may be adjusted by the Accounting Firm), along with interest as set forth in Section 3.3(c) of the CTF Agreement. 
  

 -18- 

 Section 3.5 Certain Transaction Costs. 
  
 (a) For the Hotels listed on Schedules 2.1(a) and
(c), CTF shall be allocated one-half of the Transfer Taxes which would be payable if such Hotels were transferred pursuant to the Target Sale at the Preliminary Allocated Price. For the Hotels listed on Schedule 2.1(b), CTF shall be
allocated one-half of the Transfer Taxes payable pursuant to the Lease Assignment & Sale at the Preliminary Allocated Price. Schedule 3.5 sets forth the parties’ initial estimate of the Transfer Taxes to be incurred in connection
with the Fee Sale, Target Sale and Lease Assignment & Sale as well as the estimated amount thereof to be allocated to CTF and Purchaser. Schedule 3.5 shall be adjusted by CTF, Marriott and Purchaser from time-to-time until the Closing to
reflect any elections made by Marriott under the CTF Agreement and calculations made by the Title Company based upon the actual amount of Transfer Taxes due and payable in the applicable jurisdictions as of the Closing Date. 
  
 (b) Regardless of Law or convention, it shall be the
responsibility of Purchaser to pay or cause to be paid all Transfer Taxes and otherwise complete and file all Tax Returns in connection therewith in a timely manner. Marriott shall, and shall cause CTF to, cooperate with Purchaser as reasonably
requested by Purchaser in connection with the preparation and filing of such Tax Returns. The Unadjusted Purchase Price shall be reduced at Closing by the total amount of Transfer Taxes allocated to CTF that are actually paid or payable by
Purchaser, and the Preliminary Allocated Price related to each Hotel Interest affected thereby shall be reduced accordingly. 
  
 Section 3.6 Structural and Environmental Consultants. Marriott has retained third party consultants (the “Structural and
Environmental Consultants”) to perform structural and environmental analyses of the Hotels and Marriott has provided Purchaser with copies of all of the reports and work product prepared by the Structural and Environmental Consultants with
regard to the Hotels. Marriott shall cause the Structural and Environmental Consultants to provide letters authorizing the Purchaser to rely upon the reports, work product, representations and warranties provided by the Structural Environmental
Consultants. At Closing, in addition to payment of the Purchase Price, Purchaser shall reimburse Marriott for the cost of all of the work performed by the Structural and Environmental Consultants with respect to the Hotels. 
  
 Section 3.7 Purchase Price Allocation. 
  
 (a) The parties have agreed upon the amount of the
Preliminary Allocated Price for CTF’s interest in each of the Hotels and Minority Owned Entities, which amounts are set forth on Schedules 2.1(a)-(d). By written notice to Marriott given not less than fourteen (14) Business Days prior to
the Closing, Purchaser may modify the Preliminary Allocated Price for any such interest within the range permitted in Schedules 2.1(a)-(d), as applicable (each such Preliminary Allocated Price as modified in the “Closing Allocated
Price”), provided, however, that the total amount of all Closing Allocated Prices shall at all times equal the Unadjusted Purchase Price as it may be 

  

 -19- 

 
adjusted pursuant to the terms of this Agreement. The Closing Allocated Price of each property shall be set forth on Schedules 2.1(a)-(d) which shall
be delivered by Purchaser to Marriott two (2) Business Days prior to Closing, provided, however, that to the extent such allocations result in an increase in Transfer Taxes allocated to CTF as set forth on Schedule 3.5 of the CTF Agreement,
such difference shall be borne by the Purchaser. In the event of any purchase price adjustment hereunder, Marriott and Purchaser agree to adjust any previously agreed purchase price allocation to reflect such purchase price adjustment and to file
subsequent Tax Returns consistent with such agreed allocation. 
  
 (b) The Purchaser and Marriott agree that the Closing Allocated Price for each Hotel Interest shall be adjusted to reflect the Adjusted Purchase Price as determined at the Closing. For each Hotel Interest, the
purchase of which is treated as an asset purchase for United States federal income tax purposes, the Adjusted Purchase Price, as so adjusted, plus any liabilities attributable to such Hotel Interest that are liabilities for United States tax
purposes, shall be allocated for federal income tax purposes among the assets acquired thereby as agreed to by the parties and, if no agreement is reached, as reasonably determined by each of the parties. Subject to the requirements of applicable
Law, the Purchaser and Marriott and each of their Affiliates, shall file all Tax Returns, consistent with the Closing Allocated Price adjusted to take into account purchase price adjustments at the Closing and with any other allocation that is
agreed in respect of a particular Hotel Interest. In the event of any purchase price adjustment hereunder, Marriott and the Purchaser agree to adjust any previously agreed Purchase Price allocation to reflect such purchase price adjustment and to
file Tax Returns consistent with such agreed allocation. 
  
 Section 3.8 Closing. 
  
 (a) The closing of the Transactions shall take place at a closing (the “Closing”) to be held at the offices of Gibson, Dunn & Crutcher LLP, 200 Park Avenue, New York, New York 10166, at 10:00 A.M., or at such other
place as CTF, Marriott and Purchaser may agree in writing. 
  
 (b) The Closing shall occur on June 17, 2005, provided, however, that if the conditions to Closing of Marriott or Purchaser have not been satisfied as of that date, or upon notice given by Purchaser no
later than June 7, 2005, or by Marriott no later than June 8, 2005, then the Closing shall occur not later than June 30, 2005, provided further, however, if all the conditions of both parties to the Closing have been satisfied,
except that CTF shall not have received the requisite consent pursuant to the Offer and Solicitation to allow for the release of the liens on the Property securing the Notes, as more fully set forth in Article 4 of the CTF Agreement and as those
terms are described and defined in the CTF Agreement, and Marriott exercises its one-time option to postpone the Closing to November 15, 2005 under Section 3.11 of the CTF Agreement, then the Closing hereunder shall also be postponed until November
15, 2005; provided further still, however, if the Closing with respect to any Hotel is delayed in accordance with the terms of this Agreement, the Closing for such Hotel shall occur as soon as 

  

 -20- 

 
practicable following the satisfaction of the conditions to Closing with respect to such Hotel. The day on which a Closing takes place is referred to as the
“Closing Date.” 
  
 (c) If the
Closing does not occur by June 30, 2005, because CTF did not receive the requisite consent as described in Section 3.8(b), and after Purchaser provides written notice to Marriott no later than July 6, 2005 of Purchaser’s intention to postpone
Closing to November 15, 2005, Marriott elects not to exercise its one-time option to postpone the Closing to November 15, 2005 pursuant to Section 3.11 of the CTF Agreement and Marriott elects instead to terminate the CTF Agreement, but Purchaser is
ready, willing and able to close on June 30, 2005, then Marriott will refund the Deposit and all interest thereon to Purchaser and pay Purchaser, Purchaser’s Out of Pocket Costs not to exceed Two Million and No/100 Dollars ($2,000,000). Failure
on the part of Purchaser to notify Marriott on or before July 6, 2005 of its intention to postpone Closing, shall be deemed Purchaser’s election not to postpone Closing and not to terminate this Agreement in accordance with Article 12
hereof. Purchaser being ready, willing and able to close for the purposes of this Section 3.8 shall mean that Purchaser shall have (i) satisfied the condition to Marriott’s obligation to close set forth in Section 9.4(a), (ii) tendered all of
Purchaser’s Closing Deliveries, and (iii) shall have funding commitments for the payment of the entire Purchase Price such that Purchaser would have been in a position to pay the entire Purchase Price had the Closing occurred on June 30, 2005
and all conditions under this Agreement to Purchaser’s obligations had been satisfied. As used herein, “Purchaser’s Out of Pocket Costs” means all Purchaser’s third party out-of-pocket costs and expenses, including,
but not limited to, all travel costs and expenses, all amounts expended by Purchaser for its investigation of the Hotels, including consulting fees and costs and legal fees and costs, all amounts expended by Purchaser, including, but not limited to,
legal fees and costs, in the negotiation of this Agreement, the CTF Agreement, the management agreement with Marriott, and the other documents and instruments in connection with this Transaction, and all fees and costs (including costs incurred to
lock or cap rates of interest) paid by Purchaser to its lenders and potential lenders, including all amounts expended as liquidated damages to the lenders. 
  
 (d) If a Closing occurs after June 17, 2005 with respect to Hotels included in such Closing: 
  
 (i) all of the Transactions shall be deemed to be effective
as of Marriott’s most recently ended Accounting Period prior to the Closing Date (for such Closing, the “Effective Date”); 
  
 (ii) Purchaser shall pay daily interest on the sum of the Preliminary Allocated Price of the Hotels from and including the Effective Date
but not including the Closing Date, at a rate equal to the Closing Interest Rate; and 
  
 (iii) with respect to the Hotels located in the United States, Marriott shall cause CTF to, or the Purchaser shall, as the case may be,
account and pay for the difference between (x) all deposits to CTF’s bank accounts 

  

 -21- 

 
arising from Hotel operations from the close of business on the Effective Date through the Closing Date, and (y) all checks issued, wire transfers and other
disbursements from CTF’s bank accounts arising from Hotel operations from the close of business on the Effective Date through the Closing Date, which would have been disbursed by Marriott if the Closing had occurred on the Effective Date (the
“Cash True-Up”). 
  
 (e) On or
before a Closing, (i) the Purchaser shall deliver to the Title Company by wire transfer to a bank escrow account specified by the Title Company the amount of the Adjusted Purchase Price for the Hotels included in the Closing less the amount of
Deposit (unless such Deposit will continue to be held by the Title Company pursuant to Schedule 9.2(d)) and all interest accrued thereon in immediately available funds in United States dollars (such amount to be shown on a settlement
memorandum detailing required adjustments to the Unadjusted Purchase Price) and such other sums required to be paid by Purchaser hereunder, including Transfer Taxes and other costs of Closing, (ii) Marriott shall deliver to the Title Company
Marriott’s Closing Deliveries and all other documents required by the Purchaser of this Agreement or any Ancillary Agreement to be delivered by Marriott and such other parties as are necessary and appropriate, each such Deliveries and/or
document to be executed by Marriott and such other parties as are necessary and appropriate and to be held in escrow by the Title Company, and (iii) the Purchaser shall deliver to the Title Company the Purchaser’s Closing Deliveries and all
other documents required by the Purchaser under this Agreement or any Ancillary Agreement to be delivered by the Purchaser, each such Deliveries and/or document to be executed by the Purchaser and to be held in escrow by the Title Company following
completion of the matters specified in (d)(i)-(iii) above, and upon the joint written direction of Marriott and Purchaser, the Adjusted Purchase Price and/or documents so held in escrow shall be released from escrow and disbursed and/or distributed
to those Persons entitled thereto, including to those Persons required pursuant to all Ancillary Agreements. In addition, Marriott and Purchaser shall cooperate to develop procedures for the flow of funds at each Closing. 
  
 ARTICLE 4. PARAGON BONDS [INTENTIONALLY OMITTED]

  
 ARTICLE 5. PASS THROUGH REPRESENTATIONS AND
WARRANTIES OF MARRIOTT 
  
 Subject to
Section 5.17, Marriott represents and warrants, and to the extent applicable covenants, to the Purchaser, as of the date hereof and as of the Closing Date, that except as disclosed on the Disclosure Schedules set forth herein and in the CTF
Agreement: 
  
 Section 5.1 Organization, Existence;
Records and Actions. 
  
 (a) Schedules 2.1(a)-(e) of
the CTF Agreement contain, with respect to each CTF Selling Entity and Target, a complete and accurate list of the jurisdiction of formation of such CTF Selling Entity and Target, and any other jurisdictions in which such Target is qualified to do
business as a foreign entity. Each CTF Selling Entity and each Target is duly incorporated or formed and organized, validly existing and in good standing under the laws of the jurisdiction in which each was formed, with corporate power (or
otherwise, as applicable) and authority to conduct its business as it is now 

  

 -22- 

 
being conducted, to own or use the properties and assets that it purports to own or use. Each Target is duly qualified to do business as a foreign entity and
is in good standing under the laws of each jurisdiction in which either the ownership or use of the properties owned or used by it, or the nature of the activities conducted by it, requires such qualification, except where the failure to be so
qualified would not have a material adverse effect on the business or operations of the Target as presently conducted. 
  
 (b) A true and complete copy of the Organizational Documents of each Target, certified by the Secretary or Assistant Secretary of the
Target has been delivered to Marriott, and remain in full force and effect. 
  
 (c) The minute books of each Target contain accurate and complete records of all meetings held, and actions taken by, the board of directors or other governing body, any committees of the board of directors or other
governing body, general partners, limited partners, managers or managing members, members, trustees, stockholders or equity holders of such Target. 
  
 (d) At the Closing, all of the books of account, minute books, equity interest record books, and other records of a Target (including
correspondence related to the Leases) will be in the possession of such Target. As soon as reasonably practicable, but in no event more than twenty (20) days following the Closing, CTF shall physically deliver such corporate minute books and other
corporate records to Marriott and no more than sixty (60) days following the Closing, CTF shall physically deliver all other such books and records to Marriott. 
  

Section 5.2 Authority, Approval and Enforceability. The execution, delivery and performance by CTF and the CTF Selling
Entities of the CTF Agreement and the CTF Ancillary Agreements, as applicable is within the corporate power (or otherwise, as applicable) of CTF and the CTF Selling Entities and has been duly and validly authorized by CTF and the CTF Selling
Entities, and no other corporate proceedings (or otherwise, as applicable) on the part of CTF and the CTF Selling Entities are necessary to authorize the CTF Agreement, the CTF Ancillary Agreements, or the transactions contemplated thereby. The CTF
Agreement has been, and the CTF Ancillary Agreements upon their execution at the Closing will be, validly executed and delivered by CTF and the CTF Selling Entities, and is or will be a valid and binding obligation of CTF and the CTF Selling
Entities enforceable against CTF in accordance with their respective terms, subject to applicable bankruptcy, insolvency, moratorium, reorganization and other similar laws affecting the rights of creditors generally, and to the exercise of a
court’s equitable powers. 
  
 Section 5.3
Capitalization. 
  
 (a) Except as
otherwise set forth on Schedules 2.1(a) and (c) of the CTF Agreement, the Equity Interests constitute all of the outstanding stock membership interests or partnership interests of each Target. All of the outstanding Equity Interests of each
Target have been duly authorized and are validly issued, fully paid and nonassessable and are owned beneficially and of record by the CTF Selling Entity set 

  

 -23- 

 
forth on Schedules 2.1(a) and (c) of the CTF Agreement. Except as set forth on Schedules 2.1(a) and (c) of the CTF Agreement, the CTF Selling
Entities will convey all of the outstanding Equity Interests of each Target to Marriott at the Closing free and clear of any and all Encumbrances. 
  
 (b) The CTF Selling Entities’ interest in the Minority Owned Entities represents the percentage interest of each Minority Owned
Entity as set forth on Schedule 2.1(e) of the CTF Agreement. The CTF Selling Entities’ equity interests in the Minority Owned Entities are owned beneficially and of record by the CTF’s Selling Entity set forth on Schedule
2.1(e) of the CTF Agreement, and such CTF’s Selling Entity will convey such equity interests in the Minority Owned Entities to Marriott at the Closing free and clear of any and all Encumbrances. The capital accounts of the CTF Selling
Entity in each of the Minority Owned Entities as reported to CTF are as set forth on Schedule 2.1(e) of the CTF Agreement as of the date(s) indicated therein. To CTF’s Knowledge, there has been no change in such capital accounts since
the date indicated other than changes arising from income or losses attributable to the operations of the related Hotels. 
  
 (c) Except as set forth on Schedules 2.1(a), (c) and (e) of the CTF Agreement, there is no: (i) outstanding subscription, option,
call, warrant or right (whether or not currently exercisable or contingent) to acquire any equity interest or security of any Target or a CTF Selling Entity’s interest in a Minority Owned Entity; (ii) outstanding security, instrument or
obligation that is or may become convertible into, or exchangeable for, any equity interest or security of any Target; or (iii) Contract under which any Target is or may become obligated to sell or otherwise issue any equity interest or security.

  
 (d) All outstanding equity or securities of
each Target have been issued in compliance with (i) applicable Law and (ii) all requirements set forth in Contracts applicable to the issuance of equity or securities of each Target. 
  
 (e) Except as set forth on Schedules 2.1(a) and (c) of the CTF Agreement, no Target has any
Subsidiaries or any direct or indirect ownership interest in any other Person. 
  
 (f) The Orlando ODL Note and the Orlando Mortgage Note are owned by a Subsidiary of CTF and will be conveyed to Marriott at the Closing
free and clear of any Encumbrances. The obligor of the Orlando ODL Note or the Orlando Mortgage Note is not in default under the terms thereof. 
  
 (g) No CTF Selling Entity or Target has filed a voluntary petition in bankruptcy or similar petition, nor has any order, judgment or
action been taken or suffered by any Interest Holder or any Target under any insolvency or bankruptcy law. 
  
 Section 5.4 Lines of Business. No Target is engaged in any business and no Target has, for two (2) years prior to the date of this
Agreement, engaged in any business other than the ownership and operation of the business of a Hotel and operations 

  

 -24- 

 
incidental thereto. Each Target has conducted its business in all material respects in accordance with its Organizational Documents. 
  
 Section 5.5 No Conflicts; Consents. Neither the execution and
delivery of the CTF Agreement or the CTF Ancillary Agreements nor the consummation or performance of any of the transactions contemplated thereby will, directly or indirectly (with or without notice or lapse of time): 
  
 (a) contravene, conflict with, or result in a violation of
(A) any provision of the Organizational Documents of the CTF Selling Entities, or any Target, or (B) any resolution or action adopted by the board of directors or other governing body, any committee of the board of directors or other governing body,
general partners, limited partners, managers or managing members, members, trustees, stockholders or equity holders of the CTF Selling Entities or Target; 
  
 (b) contravene, conflict with, or result in a violation of, or give any Governmental Authority or other Person the right to challenge any
transaction contemplated by the CTF Agreement or the CTF Ancillary Agreements; 
  
 (c) except as set forth on Schedule 5.5 of the CTF Agreement, give any Governmental Authority or other Person the right to exercise
any remedy or obtain any relief under, any applicable Law or any Order to which the CTF Selling Entities or any Target, or any material assets owned or used by any Interest Holder, may be subject; 
  
 (d) except as set forth on Schedule 5.5 of the CTF
Agreement, contravene, conflict with, or result in a material violation of any of the terms or requirements of, or give any Governmental Authority the right to revoke, withdraw, suspend, cancel, terminate, or modify, any material Governmental
Authorization that is held in the name of any Target other than Permits in relation to the operations of any Hotel; 
  
 (e) except as set forth on Schedules 2.1(a)-(c) or Schedule 5.5 of the CTF Agreement, contravene, conflict with, or result
in a material violation or breach of any provision of, or give any Person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate, or modify, any Material Contract or
Lease; 
  
 (f) result in the imposition or
creation of any Encumbrance upon or with respect to the Property; or 
  
 (g) except as set forth on Schedules 2.1(a)-(c) or Schedule 5.5 of the CTF Agreement, require any Interest Holder to give any notice to, or obtain any Consent from, any Person in connection with the execution
and delivery of the CTF Agreement or the consummation or performance of any of the transactions contemplated by the CTF Agreement or the CTF Ancillary Agreements, except with respect to any Permits in relation to the operations of any Hotel, and any
antitrust Consents from Governmental Authorities. 
  

 -25- 

 (h) except as set forth on Schedule 2.1(e) of the CTF Agreement with respect to
the Minority Owned Entities, constitute a breach of the Organizational Documents of such Minority Owned Entities or other Contracts related thereto to which the CTF Selling Entities or any Subsidiary of CTF is a party. 
  
 Section 5.6 Balance Sheets. 
  
 (a) Attached as Schedule 5.6 of the CTF Agreement is
the consolidating unaudited balance sheet of each Target and its Subsidiaries as at December 31, 2004 (the “Balance Sheet”). With respect to such Target, the Balance Sheet constitutes a compilation prepared by the CTF Selling
Entities of (i) the assets and liabilities of each Hotel owned or leased by such Target excluding the CTF Level Data (the “Hotel Level Data”); and (ii) the other assets and liabilities, if any, of the Target which either (A) are
unrelated to the Hotel or (B) have historically not been accounted for as Hotel Level Data and (C) adjustments made by CTF to the Hotel Level Data (the “CTF Level Data”). The Hotel Level Data is maintained by and has been extracted
from the financial information supplied by Marriott under the Marriott/CTF Hotel Management Agreements. The CTF Level Data has been compiled from the books and records of each Target maintained by the CTF Selling Entities. The Balance Sheet fairly
presents the financial condition of the Target (and its consolidated Subsidiaries as appropriate) as at December 31, 2004 in all material respects in accordance with GAAP, except for any deferred income tax asset or liability and any explanatory
footnotes required under GAAP and except to the extent that any Hotel Level Data is not complete and accurate. 
  
 (b) There are no liabilities or obligations of any nature (whether known or unknown, absolute, contingent, or otherwise) of any Target
(excluding any (i) deferred tax liabilities resulting from an accounting convention to reflect timing differences between book and tax accounting, (ii) liabilities in respect of Sales, Use & Occupancy Tax Audit Liabilities, and (iii) liabilities
in respect of employee claims arising out of any Employment Practices Liabilities (clauses (i)-(iii), collectively being the “Excluded Liabilities” except for liabilities or obligations reflected on or reserved against in the
Balance Sheet with respect to such Target and except to the extent that the Hotel Level Data is not complete and accurate. Since the date of the Balance Sheet through the Closing Date, the CTF Selling Entities have not caused and will not permit any
Target to suffer or incur any liability except for liabilities (A) pursuant to Contracts which are not Material Contracts; (B) pursuant to executory Material Contracts disclosed on Schedule 5.10 of the CTF Agreement; (C) for capital
expenditures provided under Section 2.6 of the CTF Agreement; (D) pursuant to any Lease; (E) that are Intercompany Debt or (F) that are included within Working Capital for such Target as defined in the CTF Agreement; or (G) that constitute Excluded
Liabilities. 
  
 (c) Except as set forth on
Schedule 7.12 of the CTF Agreement, no Target is the guarantor of the obligations of a third party. No Target has contractually indemnified any third party, except in respect of liabilities directly related to the operations of a
Target’s Hotel. 
  

 -26- 

 (d) Except as set forth on Schedule 2.4 of the CTF Agreement, as of the date of
this Agreement, no Target has any Debt. 
  
 (e)
The CTF Level Data accounting records are maintained by and are in the possession of the CTF Selling Entities. 
  
 Section 5.7 Absence of Certain Changes. Except as set forth on Schedules 2.1(a) and 2.1(c) of the CTF Agreement, since December 31,
2004, no Target has: 
  
 (a) sold, transferred,
or otherwise disposed of any of its Property except in the Ordinary Course of Business; 
  
 (b) forgiven or canceled debts or waived any claims or rights of substantial value other than Intercompany Debt; or 
  
 (c) incurred any debt or extended any credit other than in
the Ordinary Course of Business, except for Intercompany Debt; or 
  
 (d) made any change in any method of accounting or accounting practices or policy. 
  
 Section 5.8 Litigation and Related Matters. 
  
 (a) Except as set forth in Schedule 5.8 of the CTF Agreement, there is no pending Legal Proceeding that has been commenced by or
against any Interest Holder or related to the Property other than routine litigation related to the operations of a Hotel which is covered by insurance, and, to CTF’s Knowledge, no Legal Proceeding has been threatened and no event has occurred
or circumstance exists that may give rise to or serve as a basis for the commencement of any such Legal Proceeding. CTF has made available to Marriott copies of all pleadings, correspondence, and other documents relating to each Legal Proceeding set
forth in Schedule 5.8 of the CTF Agreement. 
  
 (b) Except as set forth in Schedule 5.8 of the CTF Agreement, and with the further exception that, with respect to the operations of any Hotel, the following representations are made to CTF’s Knowledge only: 
  
 (i) there is no Order to which any Interest Holder, any of
the assets owned or used by any Target, is subject; 
  
 (ii) no Interest Holder is subject to any Order that relates to the business or Property of any Interest Holder; and 
  
 (iii) no officer, director, manager, managing member, trustee, partner, agent, or employee of any Target who is not under the control of
Marriott is subject to any Order that prohibits such Person from engaging in or continuing any conduct, activity, or practice relating to the business of any Target. 
  

 -27- 

 (c) Except as set forth in Schedule 5.8 of the CTF Agreement and with the further
exception that with respect to the operations of any Hotel the following representations are made to CTF’s Knowledge only. 
  
 (i) each Target and Interest Holder is in compliance in all material respects with the terms and requirements of each Order to which it is
subject; 
  
 (ii) no event has occurred or
circumstance exists that may constitute or result in (with or without notice or lapse of time) a violation of or failure to comply, in any material respect by an Interest Holder, with the terms or requirements of any Order to which it is subject;
and 
  
 (iii) no Interest Holder has received any
written notice from any Governmental Authority or any other Person regarding any actual, alleged, possible or potential violation of, or failure to comply with the terms and requirements of any Order to which it is subject. 
  
 Section 5.9 Compliance with Laws; Governmental Authorizations.

  
 (a) Each Target is presently or, at the
Closing shall be, in compliance in all material respects with all Governmental Authorizations necessary for the continued operation of the business of each Target, other than any Permits. Each Interest Holder has complied with, and is not in
violation of, any applicable Law affecting such Target, excluding any applicable Law relating to the operations or business of any Hotel. 
  
 (b) Except as set forth on Schedule 2.1(a)-(d) of the CTF Agreement, the CTF Selling Entities have not received written notice of
any request, application, proceeding, plan, study or effort including any condemnation proceeding, proposed change of zoning or other proposed land use regulation or action, which would have a material adverse effect on any Hotel or on any Permits.
The CTF Selling Entities have not received written notice that the present development, improvement, use and operation of any Hotel are not in compliance with or violate any applicable Law or any Permit. 
  
 Section 5.10 Contracts and Commitments. 
  
 (a) Other than (i) the Contracts set forth on Schedule
5.10 of the CTF Agreement; (ii) the Leases; (iii) the exceptions noted on any Title Commitments (which shall be governed by Section 9.1 of the CTF Agreement); and (iv) the Orlando Mortgage Note and the Orlando ODL Note, there are no Material
Contracts that will be binding on any Target or the Owned Real Property or the Leased Real Property subsequent to the Closing Date. 
  
 (b) (i) Schedule 5.10 of the CTF Agreement sets forth a true and complete list of all Material Contracts, true and complete copies
of which have been delivered to Marriott; (ii) the Material Contracts are in full force and effect and no Interest Holder nor to CTF’s Knowledge any other party thereto, is in material default in the performance of any of its obligations
thereunder, nor, to CTF’s Knowledge, has any event occurred which could give any party thereunder the right to give a notice of default 

  

 -28- 

 
to any other party; (iii) the Material Contracts have not been further modified, supplemented or amended in any material respect; and (iv) all rent, charges
or other payments due from any Interest Holder under any Material Contract, as applicable, have either been paid through the date of this Agreement or the Closing Date, as applicable, or provision has been made for the payment thereof as and when
the same shall become due and payable. 
  
 (c)
Except as set forth on Schedule 5.10 of the CTF Agreement, the CTF Selling Entities have no equity or other economic interest in any supplier, landlord or lessee of any Target. Except as set forth on Schedule 5.10 of the CTF Agreement,
there are no Contracts between CTF or any Affiliate of CTF, that will be binding on any Target subsequent to the Closing Date. 
  
 (d) To CTF’s Knowledge, no Target and no Person on behalf of a Target has made any illegal or unrecorded payments, deposits or
similar items. 
  
 (e) True and complete copies
of all agreements and instruments with respect to (i) the Orlando Mortgage Note; and (ii) the Orlando ODL Note have been delivered to Marriott, and such agreements and instruments have not been, and will not be, further modified, supplemented or
amended. 
  
 (f) All Contracts related to PIP
Expenditures have been, and those Contracts related to PIP Expenditures after the date hereof will be, delivered to Marriott. 
  
 Section 5.11 Hotel Properties.  
  
 (a) With the exception of Encumbrances which will be satisfied and discharged at Closing, each Interest Holder as appropriate owns the
Property free and clear of any Encumbrances as defined in the CTF Agreement. 
  
 (b) Except as set forth on Schedule 5.11 of the CTF Agreement, to CTF’s Knowledge, since January 1, 2003, no Interest Holder has received written notice by any Governmental Authority of any violation of an
Environmental Law or written notice by any Person of any breach by an Interest Holder of its obligations under any Contract for the remediation of any condition at a Hotel under an Environmental Law. 
  
 Section 5.12 Intellectual Property. INTENTIONALLY OMITTED

  
 Section 5.13 Employee Benefits. With respect to
those Targets organized within the United States: 
  
 (a) No Interest Holder or an ERISA Affiliate thereof has sponsored, maintained and/or contributed to Employee Benefit Plan at any time within the past five (5) years; and 
  
 (b) Except as set forth on Schedule 5.13 of the CTF Agreement, no Target has any employees, except
employees under the control of Marriott who are employed in connection with the business and operations of the Hotels. 
  

 -29- 

 Section 5.14 Insurance. 
  
 (a) Schedule 5.14 of the CTF Agreement lists: 
  
 (i) all of the policies of insurance that have been issued
covering losses that may have occurred during the past three (3) insurance policy years (including the current year) preceding the date of the CTF Agreement to which any Target or Interest Holder is a party or has been covered excluding any policies
placed by the landlords under the Leases, true and complete copies of which have been provided to Marriott; 
  
 (ii) a list of the policy numbers and names of insurance carriers for two (2) policy years in addition to those covered by clause (i)
above, excluding casualty policies, excluding property and business interruption policies, as well as property terrorism policies and excluding any policies placed by the landlords under the Leases; 
  
 (iii) all pending applications for policies of insurance,
true and complete copies of which have been provided to Marriott; 
  
 (iv) a schedule of all locations insured under the policies listed in subsection 5.14(a)(i) of the CTF Agreement; and 
  
 (v) all surety bonds placed directly by CTF to which any Target is a party or has been covered within the current year, true and complete
copies of which have been provided to Marriott. 
  
 (b) Schedule 5.14 of the CTF Agreement describes any self-insurance arrangement by or affecting any Target, including any reserves established thereunder. 
  
 (c) CTF has previously provided to Marriott by line of coverage, by policy year for each Interest Holder,
for each of the three (3) preceding policy years (including the current policy year): 
  
 (i) a recent summary of the loss experience under each insurance policy; and 
  
 (ii) a statement describing the loss experience for all
claims that were self-insured, including the number and aggregate cost of such claims. 
  
 (d) Except as set forth on Schedule 5.14 of the CTF Agreement, all policies to which any Target is a party: 
  
 (i) are valid, outstanding, and enforceable; 
  
 (ii) will continue in full force and effect until the
Closing Date; and 
  

 -30- 

 (iii) do not provide for any retrospective premium adjustment or other experience-based
liability on the part of any Target. 
  
 (e)
Within the past twelve (12) months, no Target has received (A) any notice of a material increase in premiums, or (B) any notice of cancellation or any other indication that any insurance policy is no longer in full force or effect or that the issuer
of any policy is not willing or able to perform its obligations thereunder. 
  
 (f) Each Target has paid all premiums due under each policy to which it is a party. 
  
 (g) CTF shall be responsible for the payment of all
brokers’ or insurance service providers’ fees relating to insurance that is terminated at or prior to Closing with respect to the Hotels. 
  
 Section 5.15 Leases. Schedules 2.1(b) and (c) of the CTF Agreement set forth a complete and accurate list of the Leases, including
the dates thereof and all amendments thereto. Except as set forth on Schedule 5.15 of the CTF Agreement, each Lease is in full force and effect and has not been modified, supplemented, or amended in any respect and no default has occurred by
the respective tenant and is continuing under the Lease and no event has occurred and is continuing which with the giving of notice or lapse of time or both would constitute a default thereunder on the part of the respective tenant. Furthermore, to
CTF’s Knowledge, no default by the respective landlord under each Lease has occurred and is continuing under such Lease and no event has occurred and is continuing which with the giving of notice or lapse of time or both would constitute a
default thereunder on the part of such landlord. 
  
 Section
5.16 Taxes. Except for Taxes the reporting and payment of which is the responsibility of Marriott pursuant to its management of the Hotel: 
  
 (a) Except as set forth on Schedule 5.16 of the CTF Agreement, each Target has duly and timely filed all Tax Returns required to be
filed with any Taxing Authority (or has timely and properly filed valid extensions of time with respect to the filing thereof) and CTF or CTF’s Affiliates have duly and timely filed each Tax Return required to be filed with any Taxing Authority
by CTF or CTF’s Affiliates which include or are based upon the assets, operations, ownership or activities of any of the Targets, including any consolidated, combined, unitary, fiscal unity or similar Tax Return which includes or is based upon
the assets, operations, ownership or activities of any of the Targets (or CTF or CTF’s Affiliates have timely and properly filed valid extensions of time with respect to the filing thereof) and all such Tax Returns were correct and complete in
all material respects. The Targets (or CTF or CTF’s Affiliates on behalf of the Targets) have paid all Taxes owing with respect to the assets, ownership, operations and activities of the Targets (whether or not shown on any Tax Return).

  
 (b) There are no Liens on any of the assets
of any of the Targets that arose in connection with any failure (or alleged failure) to pay any Tax, other than Liens for Taxes not yet due and payable. 
  

 -31- 

 (c) Except as set forth in Schedule 5.16 of the CTF Agreement, there are no
pending audits, assessments or claims from any Taxing Authority for deficiencies, penalties or interest against any of the Targets or any of their assets, operations or activities. Except as set forth in Schedule 5.16 of the CTF Agreement,
there are no pending claims for refund of any Tax of any Target (including refunds of Taxes allocable to the Targets or with respect to consolidated, combined, unitary, fiscal unity or similar Tax Returns). 
  
 (d) Except as set forth in Schedule 5.16 of the CTF
Agreement, there is no pending investigation or other proceeding by any Taxing Authority for any jurisdiction where any of the Targets does not file Tax Returns with respect to a given Tax that may lead to an assertion by such Tax Authority that any
of the Targets is or may be subject to a given Tax in such jurisdiction. 
  
 (e) Except as set forth in Schedule 5.16 of the CTF Agreement, none of the Targets has (i) waived any statute of limitations in respect of income Taxes or, (ii) agreed to any extension of time with respect to
the filing of any Tax Return of any of the Targets (including any Tax Return which includes or is based upon their respective assets, ownership, operations or activities), the payment of any Taxes of any of the companies, or any limitation period
regarding the assessment of any such Taxes or (iii) received approval to make or agreed to a change in accounting method or has any application pending with any Taxing Authority requesting permission for any such change. 
  
 (f) Except as set forth in Schedule 5.16 of the CTF
Agreement, none of the Targets has elected under Treasury Regulation Section 301.7701-3 to be taxed as a corporation for United States Tax purposes. Except as set forth in Schedule 5.16 of the CTF Agreement, none of the Targets has elected
under Treasury Regulation Section 301.7701-3 to be taxed as a partnership or disregarded entity for United States Tax purposes. 
  
 (g) Except as set forth in Schedule 5.16 of the CTF Agreement, there are no outstanding rulings or determinations of, or requests
for rulings or determinations with, any state, local or foreign Taxing Authority expressly addressed to any Target (or to an Affiliate of any Target) that are, or if issued would be, binding upon any Target. 
  
 (h) Except as set forth in Schedule 5.16 of the CTF
Agreement, none of the Targets is a party to any Tax allocation, Tax reimbursement or Tax sharing agreement. 
  
 (i) Except as set forth in Schedule 5.16 of the CTF Agreement, as to each year or period for which the relevant limitation period
for assessments has not yet expired as to a given Tax, none of the Targets: (I) has been a member of an affiliated, consolidated, unitary, fiscal unity, combined or similar Tax group which files a consolidated, unitary, fiscal unity, combined or
similar Tax Return for purposes of that Tax other than the group of which it currently is a member; or (II) has any liability for the Taxes of any Person (other than any of the members of the group of which it currently is a member) under Regulation
Section 1.1502-6 (or any similar provision of state, local or foreign law), as a transferee or successor, by contract or otherwise. 
  

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 (j) Except as set forth in Schedule 5.16 of the CTF Agreement, none of the Targets
is a party to any joint venture, partnership or other arrangement or contract that could be treated as a partnership for US or Non-US Tax purposes. 
  
 (k) No Selling Entity that is selling a United States real property interest is a “foreign person” within the meaning of Code
Section 1445. 
  
 (l) Except as set forth in
Schedule 5.16 of the CTF Agreement, none of the Selling Entities or the Targets has given a power of attorney to any Person (other than a Tax Matters Partner pursuant to Code Section 6231(a)(7)) on any matters relating to Taxes. 

 
 (m) Except as set forth in Schedule 5.16 of the
CTF Agreement, each asset with respect to which any Target claims depreciation, amortization or similar expense for Tax purposes is owned for Tax purposes by such Target under applicable Tax Law. 
  
 (n) Except as set forth in Schedule 5.16 of the CTF
Agreement, no Target will have any taxable income or gain as a result of prior intercompany transactions with Affiliates of the Targets that have been deferred and that will be subject to Tax as a result of the changes in ownership of each of the
Targets as contemplated by this Agreement. 
  
 (o) Each Target has withheld from each payment made to any of its past and present shareholders, directors, officers, employees and agents the amount of all Taxes and other deductions required to be withheld and has paid or made adequate
provision for the payment of such amounts to the proper Taxing Authority. 
  
 Section 5.17 Limitations. CTF’s representations, warranties, and to the extent applicable, covenants set forth in Sections 5.4, 5.6(b)-(d), 5.7, 5.9, 5.10, 5.12 and 5.15 of the CTF Agreement are
expressly made subject to any action of Marriott or its Representatives or any failure of Marriott or its Representatives to act in circumstances where Marriott is under a legal or contractual duty to act, and in the event of such action or failure
to act by Marriott, CTF assumes no responsibility for the accuracy or completeness of such representations and warranties or the performance of such covenants to the extent of such inaccuracy, incompleteness or failure to perform is a result of such
action or failure to act by Marriott. In addition, CTF’s representations, warranties, and to the extent applicable, covenants are qualified by reference to any condition identified in the property condition reports that are listed in
Schedule 2.6(c) of the CTF Agreement. 
  

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 ARTICLE 5A. MANAGER REPRESENTATIONS AND WARRANTIES. Marriott, in its capacity as manager of
the Hotels, represents and warrants, and to the extent applicable covenants, to the Purchaser, as of the date hereof and as of the Closing Date, that except as disclosed on the Disclosure Schedules set forth herein and in the CTF Agreement.

  
 Section 5.1A Organization, Existence; Records and
Actions. 
  
 (a) INTENTIONALLY OMITTED

  
 (b) A true and complete copy of the
Organizational Documents of each Target, certified by the Secretary or Assistant Secretary of the Target, delivered by CTF to Marriott has been delivered to Purchaser. 
  
 (c) INTENTIONALLY OMITTED 
  
 (d) As soon as reasonably practicable, but in no event more than sixty-five (65) days following the Closing,
Marriott shall physically deliver all corporate minutes and other corporate records it has received from CTF to Purchaser. 
  
 Section 5.2A Authority, Approval and Enforceability. The execution, delivery and performance by Marriott of this Agreement and the Ancillary
Agreements, as applicable is within the corporate power (or otherwise, as applicable) of Marriott and has been duly and validly authorized by Marriott, and no other corporate proceedings (or otherwise, as applicable) on the part of Marriott are
necessary to authorize this Agreement, the Ancillary Agreements, or the transactions contemplated thereby. This Agreement has been, and the Ancillary Agreements upon their execution at the Closing will be, validly executed and delivered by Marriott,
and is or will be a valid and binding obligation of Marriott enforceable against Marriott in accordance with its respective terms, subject to applicable bankruptcy, insolvency, moratorium, reorganization and other similar laws affecting the rights
of creditors generally, and to the exercise of a court’s equitable powers. Exhibit A is a true and correct copy of the CTF Agreement (including Schedules and Exhibits thereto) as it relates to the Hotels that are the subject of this
Agreement. The CTF Agreement shall not be modified or amended with respect to such Hotels. In addition to the restrictions set forth in the preceding sentence, the CTF Agreement and the documents delivered pursuant thereto (including security
documents and guarantees) shall not be modified or amended so as to materially adversely affect Purchaser’s rights hereunder. Marriott shall cause its counsel, Venable LLP, to deliver to Purchaser a legal opinion, in form and substance
satisfactory to Purchaser as to the lawful existence of Marriott and the due execution and delivery of this Agreement and the applicable documents executed and delivered by Marriott at Closing. 
  
 Section 5.3A Capitalization. 
  
 (a) INTENTIONALLY OMITTED 
  
 (b) INTENTIONALLY OMITTED 
  

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 (c) INTENTIONALLY OMITTED 
  
 (d) INTENTIONALLY OMITTED 
  
 (e) INTENTIONALLY OMITTED 
  
 (f) INTENTIONALLY OMITTED 
  
 (g) INTENTIONALLY OMITTED 
  
 (h) Marriott has not filed a voluntary petition in bankruptcy or similar petition, nor has any order,
judgment or action been taken or suffered by Marriott under any insolvency or bankruptcy law. 
  
 Section 5.4A Lines of Business. Marriott, as manager under the Marriott/CTF Hotel Management Agreements has not taken any action or failed to take any action in circumstances where Marriott is under a
legal or contractual duty to act such as to cause any Target to become engaged in any business other than the ownership and operation of the business of a Hotel and operations incidental thereto. 
  
 Section 5.5A No Conflicts; Consents. Except as set forth on
Schedule 5.5A, neither the execution and delivery of this Agreement or the Ancillary Agreements nor the consummation or performance of any of the transactions contemplated hereby or thereby will, directly or indirectly (with or without notice
or lapse of time): 
  
 (a) contravene, conflict
with, or result in a violation of (A) any provision of the Organizational Documents of Marriott, or (B) any resolution or action adopted by the board of directors or other governing body, any committee of the board of directors or other governing
body, general partners, limited partners, managers or managing members, members, trustees, stockholders or equity holders of Marriott; 
  
 (b) contravene, conflict with, or result in a violation of, or give any Governmental Authority or other Person the right to challenge any
transaction contemplated by this Agreement or the Ancillary Agreements; 
  
 (c) give any Governmental Authority or other Person the right to exercise any remedy or obtain any relief under, any applicable Law or any Order to which Marriott may be subject; 
  
 (d) to Marriott’s Knowledge, except as set forth on
Schedule 5.5 of the CTF Agreement, contravene, conflict with, or result in a material violation of any Permits in relation to the operations of the Hotel; 
  
 (e) except as set forth on Schedule 5.5A, contravene, conflict with, or result in a material
violation or breach of any provision of, or give any Person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate, or modify, any Marriott Material Contract. 

 

 -35- 

 (f) INTENTIONALLY OMITTED 
  
 (g) to Marriott’s Knowledge, except as set forth on Schedules 2.1(a)-(c) or Schedule 5.5 of the
CTF Agreement, require Consent from any Person in connection with respect to any Permits in relation to the operations of any Hotel except as set forth in the last sentence of this subsection (g). Marriott is the holder of certain liquor licenses
with respect to certain Hotels; each such liquor license is in full force and effect (except as set forth on Schedule 5.5A). Prior to any transfer of such liquor license to Purchaser, certain actions (including filings with governmental
authorities) will be required to be taken in order for the Hotels, after being purchased by Purchaser to continue to have the benefit of such liquor licenses. 
  

(h) INTENTIONALLY OMITTED 
  
 Section 5.6A Balance Sheets. 
  
 (a) The Hotel Level Data maintained by Marriott has been extracted by CTF from the financial information supplied by Marriott to CTF under
the Marriott/CTF Hotel Management Agreements and such Hotel Level Data maintained by Marriott is complete and accurate. 
  
 (b), (c) and (d) Marriott, as manager under the Marriott/CTF Hotel Management Agreements, has not taken any action or failed to take any
action, where Marriott is under a legal or contractual duty to act: 
  
 (i) since the date of the Balance Sheet through the Closing Date, to cause any Target to suffer or incur any liability described in Section 5.6(b) of this Agreement; 
  
 (ii) to cause any Target to become a guarantor of the
obligations of a third party or to contractually indemnify any third party except in respect of liabilities directly related to the operations of a Target’s Hotel; or 
  
 (iii) to cause any Target to incur any Debt. 
  
 (e) INTENTIONALLY OMITTED 
  
 Section 5.7A Absence of Certain Changes. The financial results reported in the operating statements prepared
by Marriott in its capacity as the manager of the Hotels for the three (3) fiscal years preceding the date hereof and provided to Purchaser by Marriott are fairly presented and are free of material error or omission, and include the Marriott
Material Contracts. Marriott, as manager under the Marriott/CTF Hotel Management Agreements, has not taken any action or failed to take any action where Marriott is under a legal or contractual duty to act, to cause any Target to take any of the
actions prohibited in Section 5.7 of this Agreement. As of the Effective Date to the Closing Date Marriott has not and will not create by its acts or omissions as manager of the Hotels, any liens, pledges, hypothecations, charges, mortgages,
security interests, encumbrances, claims, 

  

 -36- 

 
infringements, interferences, options, rights of first refusal, preemptive rights or community property interests with respect to the Hotel Interests.

  
 Section 5.8A Litigation and Related Matters.

  
 (a) Marriott has made available to the
Purchaser copies of all pleadings, correspondence, and other documents relating to each Legal Proceeding set forth in Schedule 5.8 of the CTF Agreement provided by CTF to Marriott. To Marriott’s Knowledge, Marriott has not received any
written notice that any Legal Proceeding has been threatened or an event having occurred or circumstances existing that may give rise to or serve as a basis for the commencement of any such Legal Proceeding with respect to the Hotels, other than the
routine Legal Proceedings related to the operations of the Hotel that are covered by insurance or as set forth on Schedule 5.8A.  
  
 (b) Except as set forth in Schedule 5.8 of the CTF Agreement, with respect to the operations of any Hotel, the following
representations are made to Marriott’s Knowledge only: 
  
 (i) there is no Order to which any Interest Holder, any of the assets owned or used by any Interest Holder, is subject; 
  
 (ii) no Selling Entity is subject to any Order that relates to the business or Property of any Interest Holder; and 
  
 (iii) no officer, director, manager, managing member,
trustee, partner, agent, or employee of any Target who is under the control of Marriott is subject to any Order that prohibits such Person from engaging in or continuing any conduct, activity, or practice relating to the business of any Target.

  
 (c) INTENTIONALLY OMITTED 
  
 Section 5.9A Compliance with Laws; Governmental Authorizations.

  
 (a) Marriott, as manager under the
Marriott/CTF Hotel Management Agreements has not taken any action or failed to take any action in circumstances where Marriott is under a legal or contractual duty to act to cause any Hotel not to be in compliance in all material respects with all
Governmental Authorizations necessary for the continued operation of the business of each Hotel nor has Marriott received any notice that any Hotel is in violation of any applicable Law affecting the operation of such Hotel except as may have been
set forth in the reports of the Structural and Environmental Consultants or as set forth on Schedule 5.9A. 
  
 (b) To Marriott’s Knowledge, except as set forth on Schedule 5.9A, Marriott has not received written notice of any request,
application, proceeding, plan, study or effort, including any condemnation proceeding, proposed change of zoning or other proposed land use regulation or action, which would have a material adverse effect on any Hotel or any Permits. To
Marriott’s Knowledge, Marriott has not received written 

  

 -37- 

 
notice that the present development, improvement, use and operation of any Hotel are not in compliance with or violate any applicable Law or any Permit
except as may have been set forth in the reports of the Structural and Environmental Consultants. 
  
 Section 5.10A Contracts and Commitments. True and complete copies of the Material Contracts delivered to Marriott by CTF have been delivered
to Purchaser. Marriott, as manager under the Marriott/CTF Hotel Management Agreements, has not taken any action or failed to take any action in circumstances where Marriott is under a legal or contractual duty to act other than as set forth on
Schedule 5.10 of the CTF Agreement: 
  
 (a) to create or enter into any contract other than (i) those contracts set forth on Schedule 5.10A, (ii) contracts entered into in the Ordinary Course of Business and (iii) Marriott Material Contracts that will be binding upon any
Target or the Owned Real Property or Leased Real Property subsequent to the Closing Date; 
  
 (b) to cause any Interest Holder to materially default in the performance of any of its obligations under any Material Contract, nor
modify, supplement or amend in any material respect any Material Contract; 
  
 (c) INTENTIONALLY OMITTED 
  
 (d) to cause any Target to make any illegal or unrecorded payments, deposits or similar items; and 
  
 (e) True and complete copies of all agreements and instruments with respect to (i) the Orlando Mortgage Note; and (ii) the Orlando ODL
Note that have been delivered to Marriott by CTF have been delivered to Purchaser. 
  
 (f) All Contracts related to PIP Expenditures as of the date hereof, and those Contracts related to PIP Expenditures after the date
hereof, delivered to Marriott have been, or will be, delivered to Purchaser. At Purchaser’s request, Marriott shall use Commercially Reasonable Efforts to provide to the Purchaser on or before the Closing Date as to each Hotel, a summary
regarding the status of the work performed under the Property Improvement Plans, including the amount paid for such work, the percentage of completion, material disputes with contractors and the amount remaining to be paid. 
  
 Section 5.11A Hotel Properties. 
  
 (a) INTENTIONALLY OMITTED 
  
 (b) To Marriott’s Knowledge, except as set forth on
Schedule 5.11 of the CTF Agreement or Schedule 5.9A, as of the date hereof, no Hotel has received written notice by any Governmental Authority of any violation of an Environmental Law or written notice by any Person of any breach by a
Hotel of its obligations under any Contract for the remediation of any condition at a Hotel under an Environmental Law. 
  
 Section 5.12A Intellectual Property. INTENTIONALLY OMITTED  
  

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 Section 5.13A Employee Benefits. 
  
 (a) To Marriott’s Knowledge, except as set forth on
Schedule 5.13A, no Hotel has any employees, except employees under the control of Marriott who are employed in connection with the business and operation of the Hotels pursuant to the Marriott/CTF Hotel Management Agreements. 
  
 (b) INTENTIONALLY OMITTED 
  
 Section 5.14A Insurance. INTENTIONALLY OMITTED 
  
 Section 5.15A Leases. Except as set forth on Schedule
5.15 of the CTF Agreement, Marriott, as manager under the Marriott/CTF Hotel Management Agreements, has not taken any action nor failed to act in circumstances where Marriott is under a legal or contractual duty to act: 
  
 (a) to modify, supplement or amend any Lease; or 

 
 (b) to cause a default by the respective tenant that is
continuing under the Lease, or to cause any event to occur and continue, which with the giving of notice or lapse of time or both would constitute a default under the Lease on the part of the respective tenant. 
  
 Section 5.16A Taxes. Solely as to Taxes the reporting, filing
and payment of which are the contractual obligation of Marriott or its Affiliates pursuant to the management of the Hotel under the Marriott/CTF Management Agreements, Marriott represents to the Purchaser: 
  
 (a) Marriott or its Affiliates have duly and timely filed
each Tax Return contractually required pursuant to the Marriott/CTF Management Agreements to be filed with any Taxing Authority by Marriott or its Affiliates which include or are based upon the assets, operations, ownership or activities of any of
the Hotels, including any consolidated, combined, unitary, fiscal unity or similar Tax Return which includes or is based upon the assets, operations, ownership or activities of any of the Hotels (or Marriott or its Affiliates have timely and
properly filed valid extensions of time with respect to the filing thereof) and all such Tax Returns were correct and complete in all material respects. Marriott or its Affiliates on behalf of the Hotels have paid all Taxes owing with respect to the
assets, ownership, operations and activities of the Hotels (whether or not shown on any Tax Return) in accordance with their contractual obligations of the Marriott/CTF Management Agreements. 
  
 (b) To Marriott’s Knowledge there are no Liens on any
of Hotels or the assets of any of the Hotels that arose in connection with any failure (or alleged failure) by Marriott or its Affiliates to pay, on behalf of the Hotels, any Tax in accordance with the contractual terms of the Marriott/CTF
Management Agreements, other than Liens for Taxes not yet due and payable. 
  

 -39- 

 (c) Except as set forth in Schedule 5.16 of the CTF Agreement, to Marriott’s
Knowledge there are no pending audits, assessments or claims from any Taxing Authority for deficiencies, penalties or interest against any of the Hotels or any of their assets, operations or activities for Taxes that are the contractual filing and
payment obligation of Marriott or its Affiliates pursuant to the Marriott/CTF Management Agreements. Except as set forth in Schedule 5.16, there are no pending claims for refund of any Tax of any Hotel (including refunds of Taxes allocable to
the Hotel or with respect to consolidated, combined, unitary, fiscal unity or similar Tax Returns) related to any Taxes that are the contractual obligation of Marriott or its Affiliates pursuant to the Marriott/CTF Management Agreements. 

 
 (d) INTENTIONALLY OMITTED 
  
 (e) Except as set forth in Schedule 5.16 of the CTF
Agreement, Marriott or its Affiliates have not (i) agreed to any extension of time with respect to the filing of any Tax Return for any of the Hotels contractually required to be filed by Marriott or its Affiliates pursuant to the Marriott/CTF
Management Agreements (including any Tax Return which includes or is based upon the Hotels’ respective assets, ownership, operations or activities), or any limitation period regarding the assessment of any such Taxes or (ii) received approval
to make or agreed to a change in accounting method with respect to such Taxes or has any application pending with any Taxing Authority requesting permission for any such change. 
  
 (f) INTENTIONALLY OMITTED 
  
 (g) Except as set forth in Schedule 5.16 of the CTF Agreement, to Marriott’s Knowledge there are
no outstanding rulings or determinations of, or requests for rulings or determinations with, any state, local or foreign Taxing Authority expressly addressed to any Hotel that are, or if issued would be, binding upon any Hotels with respect to any
Taxes that are the contractual obligation of Marriott or its Affiliates pursuant to the Marriott/CTF Management Agreements. 
  
 (h) INTENTIONALLY OMITTED 
  
 (i) INTENTIONALLY OMITTED 
  
 (j) INTENTIONALLY OMITTED 
  
 (k) INTENTIONALLY OMITTED 
  
 (l) Except as set forth in Schedule 5.16 of the CTF Agreement, none of Marriott or its Affiliates have given a power of attorney to
any Person on any matters relating to Taxes that are the contractual obligation of Marriott or its Affiliates pursuant to the Marriott/CTF Management Agreements (other than a Tax Matters Partner pursuant to Code Section 6231(a)(7)). 
  

 -40- 

 (m) INTENTIONALLY OMITTED 
  
 (n) INTENTIONALLY OMITTED 
  
 (o) To the extent contractually required pursuant to the Marriott/CTF Management Agreements, Marriott or its
Affiliates have withheld all Taxes and other deductions required to be withheld and have paid or made adequate provision for the payment of such amounts to the proper Taxing Authority. 
  
 Section 5.17A Inaccuracy of Pass Through Representations. To Marriott’s Knowledge, none of the
representations made in Article 5 are inaccurate, false, or misleading in any material respect. The pass through representations, warranties and to the extent applicable covenants made in Article 5 and Article 5A, as to the physical condition and
environmental status of the Hotels and the Property are qualified by reference to reports prepared by the Structural and Environmental Consultants listed in Schedule 2.6(c) of the CTF Agreement. The pass through representations and warranties
and to the extent applicable covenants made in Article 5 and Article 5A, as to financial matters are qualified by reference to the due diligence reports prepared by Deloitte and Touche. 
  
 ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER 
  
 The Purchaser hereby represents and warrants to Marriott as follows:

  
 Section 6.1 Organization. 
  
 (a) The Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of Maryland and has all necessary corporate power and authority to own, lease and operate its properties and to carry on its business as it is now being conducted. The Purchaser is duly qualified or
licensed as a foreign corporation to do business, and is in good standing, in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its business makes such qualification or licensing necessary,
except, in each case, for any such failures that would not, individually or in the aggregate, reasonably be expected to have a Purchaser Material Adverse Effect. 
  
 (b) The Purchaser has heretofore furnished to Marriott a complete and correct copy of the Purchaser’s
certificate of incorporation and bylaws. Such certificates of incorporation and bylaws are in full force and effect. Purchaser shall cause its counsel to deliver to Marriott a legal opinion in form and substance satisfactory to Marriott as to the
existence of Purchaser, and the due execution of this Agreement and the applicable documents executed and delivered by Purchaser at Closing. 
  
 Section 6.2 Authority. The Purchaser has full corporate power and authority to execute and deliver this Agreement and each of the Ancillary
Agreements to which it will be a party, to perform its obligations hereunder and thereunder and to consummate the 

  

 -41- 

 
transactions contemplated hereby and thereby. The execution and delivery by the Purchaser of this Agreement each of the Ancillary Agreements and each of the
CTF Ancillary Agreements to which it will be a party and the consummation by the Purchaser of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary corporate action. This Agreement has been, and upon
their execution each of the Ancillary Agreements and each of the CTF Ancillary Agreements to which the Purchaser will be a party will have been, duly and validly executed and delivered by the Purchaser. This Agreement constitutes, and upon their
execution each of the Ancillary Agreements and each of the CTF Ancillary Agreements to which the Purchaser will be a party will constitute, the legal, valid and binding obligations of the Purchaser, enforceable against the Purchaser in accordance
with its and their respective terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general principles of equity (regardless of
whether considered in a proceeding in equity or at law). 
  
 Section 6.3 No Conflict; Required Filings and Consents. 
  
 (a) The execution, delivery and performance by the Purchaser of this Agreement and each of the Ancillary Agreements and each of the CTF
Ancillary Agreements to which the Purchaser will be a party, and the consummation of the transactions contemplated hereby and thereby, do not and will not: 
  
 (i) conflict with or violate the certificate of incorporation or bylaws of the Purchaser; 
  
 (ii) conflict with or violate any Law applicable to the
Purchaser or by which any property or asset of the Purchaser is bound or affected; or 
  
 (iii) conflict with, result in any breach of, constitute a default (or an event that, with notice or lapse of time or both, would become a
default) under, require any consent of any Person pursuant to, or give to others any rights of termination, acceleration or cancellation of, any material contract or agreement to which the Purchaser is a party; 
  
 except, in the case of clause (ii) or (iii), for any such conflicts, violations, breaches,
defaults or other occurrences that would not, individually or in the aggregate, reasonably be expected to have a Purchaser Material Adverse Effect. 
  
 (b) The Purchaser is not required to file, seek or obtain any notice, authorization, approval, order, permit or consent of or with any
Governmental Authority in connection with the execution, delivery and performance by the Purchaser of this Agreement each of the Ancillary Agreements and each of the CTF Ancillary Agreements to which it will be party or the consummation of the
transactions contemplated hereby or thereby or in order to prevent the termination of any right, privilege, license or qualification of the Purchaser, except where failure to obtain such consent, approval, authorization or action, or to make such
filing or notification, would not, individually or 

  

 -42- 

 
in the aggregate, reasonably be expected to have a Purchaser Material Adverse Effect or (iv) as may be necessary as a result of any facts or circumstances
relating solely to Marriott or any of its Affiliates. 
  
 Section 6.4 Financing. The Purchaser has, and shall have at the Closing, sufficient funds to permit the Purchaser to consummate the transactions contemplated by this Agreement and the Ancillary Agreements and each of the CTF
Ancillary Agreements to which Purchaser will be a party. The parties acknowledge and agree that it shall not be a condition to the obligations of the Purchaser to consummate the transactions contemplated hereby that the Purchaser have sufficient
funds for payment of the Purchase Price and any adjustments thereto. 
  
 ARTICLE 7. COVENANTS. 
  
 Section
7.1 Management of the Hotels Prior to the Closing. Between the date of this Agreement and the Closing Date, except as set forth in this Agreement or in the CTF Agreement, Marriott shall operate and manage the Hotels in accordance with (i)
the approved annual operating and Capital Expenditure budgets for each Hotel, (ii) customary and prudent practices for hotels of similar size, quality and standing and otherwise only in conformity with the Marriott/CTF Hotel Management Agreements
and the brand standards applicable to the operations of a Renaissance Hotel. 
  
 Section 7.2 Conduct of Business of the Targets Prior to the Closing. INTENTIONALLY OMITTED 
  
 Section 7.3 Risk of Loss. The risk of loss or damage to the Owned Real Property or the Leased Real Property, including without limitation,
loss or damage resulting from casualty, condemnation, eminent domain and any business interruption therefrom attributable to any acts or occurrences prior to the Closing (a “Casualty Loss”) shall be borne by CTF. In the event of a
Casualty Loss, the following shall apply: 
  
 (a)
If the Casualty Loss relates to a Hotel listed on Schedule 7.3(a) of the CTF Agreement (the “Group A Hotels”, and the casualty results in a loss of less than $2,000,000 (the “Group A Threshold Amount”) as
estimated by CTF and the Purchaser, Purchaser will proceed to Closing with respect to such Hotel and at Closing Marriott shall assign, or cause CTF to assign, all insurance proceeds to Purchaser except to the extent such insurance is related to
business interruption or extraordinary expenses incurred prior to Closing. If insurance proceeds in respect of such Casualty Loss that are available for the costs of repair and restoration of the Fee Property or the Leasehold Property, as
applicable, are estimated to be insufficient to cover such costs, or if the Casualty Loss is uninsured, the parties will reduce the Preliminary Allocated Price by the amount of the estimated shortfall in insurance proceeds available for such costs.
In any case where the Casualty Loss is insured, at Closing the Preliminary Allocated Price shall be reduced by any deductible applicable to the insurance coverage; or 
  

 -43- 

 (b) If the Casualty Loss relates to a Hotel listed on Schedule 7.3(b) of the CTF
Agreement (the “Group B Hotels”), and the casualty results in a loss of less than the lesser of $5,000,000 or 10% of the Preliminary Allocated Price applicable to the affected Hotel (the “Group B Threshold Amount”)
as estimated by CTF and the Purchaser, Purchaser will proceed to Closing with respect to such Hotel and at Closing Marriott shall assign, or cause CTF to assign, all insurance proceeds to Purchaser except to the extent such insurance is related to
business interruption or extraordinary expenses incurred prior to Closing. If insurance proceeds in respect of such Casualty Loss that are available for the costs of repair and restoration of the Fee Property or the Leasehold Property, as
applicable, are estimated to be insufficient to cover such loss, or if the Casualty Loss is uninsured, the parties will reduce the Preliminary Allocated Price by the amount of the estimated shortfall in insurance proceeds available for such costs.
In any case where the Casualty Loss is insured, at Closing the Preliminary Allocated Price shall be reduced by any deductible applicable to the insurance coverage; or 
  
 (c) If the Casualty Loss exceeds the Group A Threshold Amount or the Group B Threshold Amount, as
applicable, Purchaser, at its option, may either: 
  
 (i) proceed to Closing with respect to such Hotel and at Closing Marriott shall assign, or cause CTF to assign, all insurance proceeds to Purchaser except to the extent that such insurance is related to business interruption or
extraordinary expenses incurred prior to Closing. If insurance proceeds in respect of such Casualty Loss that are available for the costs of repair and restoration of the Fee Property or the Leasehold Property, as applicable, are estimated by the
Purchaser to be insufficient to cover the Casualty Loss, or if the Casualty Loss is uninsured, the parties will reduce the Preliminary Allocated Price by the amount of the estimated shortfall in insurance proceeds available for such costs. In any
case where the Casualty Loss is insured, at Closing the Preliminary Allocated Price shall be reduced by any deductible applicable to the insurance coverage; or 
  

(ii) elect not to close with respect to such Hotel at Closing (with a reduction in the Unadjusted Purchase Price by the Preliminary
Allocated Price for such Hotel). 
  
 (d) In the
event of a Casualty Loss affecting the Renaissance Techworld Hotel in excess of $5,000,000, Purchaser, at its election, shall either (i) eliminate the equity interest in such Minority Owned Entity in such Hotel from the Transaction and the
Unadjusted Purchase Price shall be reduced by the Preliminary Allocated Purchase Price of such Hotel; or (ii) elect to proceed to Closing in connection with such equity interest in the Minority Owned Entity in such Hotel pursuant to the terms of
this Agreement. 
  
 (e) In the event of a
Casualty Loss, Marriott shall cause CTF, in cooperation with Purchaser, to promptly and diligently file and pursue recovery of, all appropriate insurance claims and to the extent of any insurance proceeds recovered, with Purchaser’s consent,
apply such proceeds to the restoration of the Property. In the event 

  

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any lender on a Property damaged by a Casualty Loss exercises any rights with respect to the insurance proceeds, such that they are not available for
restoration of the Property or assignment to Purchaser, the Preliminary Allocated Price of the related Hotel shall be reduced by the amount of the proceeds taken by such lender. Insurance proceeds for business interruption losses shall be applied to
such losses and shall not be counted against property casualty losses. 
  
 (f) All risk of loss or damage to the Owned Real Property and the Leased Real Property, including without limitation, loss or damage resulting from casualty, condemnation, eminent domain and any business interruption
resulting therefrom shall be borne by Purchaser upon the Closing of the Transaction. 
  
 Section 7.4 Covenants Regarding Information. 
  
 (a) From the date hereof until the Closing Date, upon reasonable notice, CTF and its Subsidiaries have agreed in the CTF Agreement that
they shall (i) afford Marriott and the Purchaser and their Representatives reasonable access to the books and records of the Targets and the Selling Entities related to the Targets; (ii) furnish Marriott with such financial, operating and other data
and information as Marriott may reasonably request, and which Marriott shall furnish to Purchaser, and (iii) furnish the Representatives usual and customary “management representation letters” to a firm of certified public accountants
necessary for completion of an independent audit of the Target (it being understood that with respect to the Hotel Level Data, such letter shall rely on an equivalent letter from the Hotel’s manager); provided, however, that any
such access or furnishing of information shall be conducted at the Purchaser’s expense during normal business hours upon reasonable notice, under the supervision of CTF’s personnel, and in such a manner as to not unreasonably interfere
with the normal operations of CTF. Marriott shall promptly request from CTF and diligently seek to obtain, subject to the terms and conditions of the CTF Agreement, such information from CTF as the Purchaser may reasonably request and that Marriott
is entitled to obtain from CTF under the CTF Agreement. Notwithstanding anything to the contrary in this Agreement, neither CTF nor any of its Subsidiaries shall be required to disclose any information to the Purchaser or its Representatives if such
disclosure would (A) in CTF’s sole discretion jeopardize any attorney-client privilege or any work-product privilege, or (B) contravene any duty imposed by applicable Laws. 
  
 (b) CTF has consented to the Purchaser engaging, at the Purchaser’s expense, the independent registered
public accounting firm that audited, reviewed or otherwise advised CTF regarding the financial statements of any Target to audit such financial statements for periods preceding the Closing Date and to access the audit work papers relating to such
prior period. Marriott shall cause CTF to cooperate with Purchaser in responding to Purchaser’s reasonable requests for other information relating to such financial statements. 
  
 (c) For a period of seven (7) years after the Closing or, if shorter, the applicable period specified in
Purchaser’s document retention policy, the Purchaser shall 

  

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(i) retain the books and records relating to the Targets, Hotels, Leased Real Property or Owned Real Property relating to periods prior to the Closing, and
(ii) afford the Representatives of CTF reasonable access (including the right to make, at the CTF’s expense, photocopies), during normal business hours upon reasonable notice, to such books and records wherever located in order to allow CTF to
fulfill any pre-existing contractual obligation which is binding upon CTF and disclosed to Purchaser or requirement of any Law or defend any claim (other than a claim by an Indemnified Party), including any litigation (civil, criminal or otherwise),
governmental investigation, tax audit or insurance claim. 
  
 (d) For a period of seven (7) years after the Closing or, if shorter, the applicable period specified in CTF’s document retention policy, with respect to any documents not previously delivered to Marriott, CTF
has agreed in the CTF Agreement to (i) retain the books and records relating to the CTF Level Data with respect to the Targets, Hotels, Leased Real Property or Owned Real Property or Personal Property relating to periods prior to the Closing to the
extent not delivered to the Purchaser at the Closing, and (ii) afford the Representatives reasonable access (including the right to make, at the Purchaser’s expense, photocopies), during normal business hours upon reasonable notice, to such
books and records wherever located in order to allow the Purchaser to fulfill any pre-existing contractual obligation or requirement which is binding on Purchaser and disclosed to CTF or requirement of any Law or to defend any claim (other than a
claim by an Indemnified Party), including any litigation (civil, criminal or otherwise), governmental investigation, tax or insurance claim. 
  
 Section 7.5 Non-Waiver of Attorney-Client Privilege. 
  
 (a) The Purchaser agrees that CTF, the CTF Selling Entities, and their respective Affiliates, by virtue of
the transfer of the CTF Selling Entities’ interest in the Hotels or any other transaction contemplated by this Agreement and the Ancillary Agreements and the CTF Ancillary Agreements, are not surrendering, waiving or transferring any
attorney-client, work product, or other applicable privileges that exist with respect to any and all attorney-client relationships that exist between CTF and/or the CTF Selling Entities and the attorneys listed below, including any relationships
related to: 
  
 (i) any matters arising out or
related to the matters listed on Schedule 7.5 of the CTF Agreement; 
  
 (ii) any advice provided by Gibson, Dunn & Crutcher LLP or any other law firm retained by CTF in connection with the negotiation of the CTF Agreement and the CTF Ancillary Agreements; 
  
 (iii) any other legal advice provided by Gibson Dunn &
Crutcher LLP to CTF and the CTF Selling Entities; 
  

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 (iv) any legal advice provided by Skadden, Arps, Slate Meagher & Flom LLP to CTF and
the CTF Selling Entities; 
  
 (v) any legal
advice provided by Weil Gotshal & Manges LLP; and 
  
 (vi) any legal advice provided by Daniel Heininger and Bradley Hornbacher. 
  
 (b) The Purchaser further agrees that: (i) CTF and the CTF Selling Entities and their respective Affiliates have received and continue to
receive legal representation in various matters from all of the above referenced attorneys, and (ii) the Purchaser shall not be entitled to receive or review any attorney work product, information subject to attorney-client privilege or client files
relating to CTF, the CTF Selling Entities, or their respective Affiliates in the possession of any counsel referenced above; and (iii) that neither this Agreement, the CTF Agreement, the Purchaser’s subsequent ownership of the Hotel Interests
or the Minority Owned Interests, nor any transaction that arises out of or related to this Agreement, the Ancillary Agreements or the CTF Ancillary Agreements shall provide any basis for the Purchaser, its Subsidiaries or any of its Affiliates or
their successors or assigns to: (A) except to the extent specifically agreed in the Conflict Waiver Agreement dated November 24, 2004 with respect to Gibson, Dunn & Crutcher LLP or any similar agreements concerning law firms retained by CTF in
connection with this Agreement, seek to disqualify any of the above referenced counsel’s representation or CTF, the CTF Selling Entities or their respective Affiliates in any matter, including any matter adverse to the Purchaser, its
Subsidiaries of its Affiliates, whether or not related to the any of the above referenced counsel’s prior representation of CTF, the CTF Selling Entities or their respective Affiliates or any of the Hotels that are the subject of this Agreement
or the Ancillary Agreements, or (B) claim or assert that any privilege has been waived between CTF, the CTF Selling Entities, and their respective Affiliates and the above-referenced counsel. 
  
 Section 7.6 Notification of Certain Matters. Until the Closing,
each party hereto shall promptly notify the other party in writing of any fact, change, condition, circumstance or occurrence or nonoccurrence of any event of which it is aware that will or is reasonably likely to result in any of the conditions set
forth in Sections 9.2 through 9.4 of this Agreement or in Sections 9.3 through 9.5 of the CTF Agreement becoming incapable of being satisfied. 
  
 Section 7.7 Resignations. Marriott will cause CTF to deliver at the Closing the written resignation of all of the directors, managers,
general partners and officers of the Targets, effective as of the Closing Date which CTF shall have delivered to Marriott. 
  
 Section 7.8 Confidentiality. Until the Closing, each of the parties shall, and shall cause its Affiliates and Representatives to keep
confidential, disclose only to its Affiliates and Representatives and use only in connection with the transactions contemplated by this Agreement and the Ancillary Agreements, all information and data 

  

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obtained by them from the other party or its Affiliates and Representatives relating to such other party in the course of due diligence (collectively, the
“Information”), unless disclosure of the Information or data is required by applicable Law. Notwithstanding the foregoing, the provisions of this Section 7.8 shall not apply to those portions of any Information which (a) are or
become generally available to the public other than as a result of a disclosure by the other party or its Representatives or CTF; (b) become available on a non-confidential basis from a source other than the other party or its Representatives or CTF
which to the knowledge of the party receiving such information, is not bound by a confidentiality agreement or other obligation of confidentiality prohibiting such disclosure; (c) were known on a non-confidential basis prior to disclosure by the
other party or its Representatives or CTF; or (d) are independently developed without reference to the Information in the event that the transactions contemplated hereby are not consummated, each party shall, and shall use its Commercially
Reasonable Efforts to cause its Affiliates and Representatives to, promptly return to the other party or destroy all documents (including all copies thereof) containing any such Information. 
  
 Section 7.9 Consents and Estoppels. 
  
 (a) Each party shall use Commercially Reasonable Efforts to
take, or cause to be taken, all appropriate action to do, or cause to be done, all things necessary, proper or advisable to obtain from any third party all consents necessary to assign the Material Contracts and the Marriott Material Contracts to
the Purchaser. Notwithstanding the foregoing, if there shall not be assigned to the Purchaser any Material Contract or Marriott Material Contract or if an attempted assignment thereof without the consent of the other party or parties thereto would
constitute a breach thereof or in any way adversely affect the rights of the parties thereunder and such consent is not obtained, of if an attempted assignment would be ineffective or would affect the rights of the parties thereunder so that the
Purchaser would not, in fact, receive the benefits thereof, CTF has agreed in the CTF Agreement that in such case, the beneficial interest in and to any such Material Contract shall, to the extent permitted by the relevant Material Contract and by
Law, passed to the Purchaser and Marriott shall cause CTF to: (i) hold all such Material Contracts and Marriott Material Contracts in trust for the benefit of the Purchaser, its successors or assigns, from and after the Closing Date with effect from
the Effective Date, (ii) use Commercially Reasonable Efforts to obtain and secure any and all consents and approvals that may be necessary to effect such assignment or assignments of the same and (iii) make or complete such assignment or assignments
as soon as reasonably possible. 
  
 (b) Subject
to Section 9.2, the Purchaser shall use Commercially Reasonable Efforts with the reasonable cooperation of Marriott to take, or cause to be taken, all appropriate action to do, or cause to be done, all things necessary, proper or advisable to obtain
from any third party all consents sufficient to create a valid transfer of the Equity Interests and the CTF Selling Entities’ interest in the Minority Owned Entities to the Purchaser without causing the Purchaser to incur additional liabilities
or limitation of rights as assignee of the Equity Interests in the Minority Owned Entities. 
  

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 (c) Subject to Section 9.2, the Purchaser shall use Commercially Reasonable Efforts with
the reasonable cooperation of Marriott to take, or cause to be taken, all appropriate action to do, or cause to be done, all things necessary, proper or advisable to obtain consents from the applicable lessors or landlords sufficient to create a
valid to the assignment of the Leasehold Interests to the Purchaser without causing the Purchaser to incur additional liabilities or limitation of rights as assignee of the Leasehold Interests. 
  
 (d) Subject to Section 9.2, the parties agree that they
shall use Commercially Reasonable Efforts to obtain an estoppel certificate from the applicable lessors or landlords under the Leases containing the information required by the terms of the Leases or, in the event that no such requirements are set
forth therein, in a form reasonably acceptable to the Purchaser and addressed to (i) in the case of a Lease Assignment & Sale, the Purchaser, or (ii) in the case of a Target Sale, Target (collectively, the “Estoppel
Certificates”). 
  
 Section 7.10 Governmental
Consents and Filings. Each party shall use Commercially Reasonable Efforts to take, or cause to be taken, all appropriate action to do, or cause to be done, all things necessary, proper or advisable under applicable Law or otherwise to
consummate and make effective the transactions contemplated by this Agreement the Ancillary Agreements and the CTF Ancillary Agreements as promptly as practicable, including to (i) obtain from Governmental Authorities all consents, approvals,
authorizations, qualifications and orders as are necessary for the consummation of the transactions contemplated by this Agreement and the Ancillary Agreements, and (ii) promptly make all necessary filings, and thereafter make any other required
submissions, with respect to this Agreement required under any applicable Law. 
  
 Section 7.11 Public Announcements. The parties shall consult with each other before issuing any press release with respect to this Agreement the Ancillary Agreements or the CTF Ancillary Agreements or
the transactions contemplated hereby or thereby, and neither party nor its Representatives shall criticize, disparage, defame or otherwise make any statement which would reflect negatively on (i) the other party, (ii) any current or former
employees, officers, directors, agents or other persons associated with the either party, (iii) any of the services provided by either party or (iv) any of the current or past business practices of either party and/or CTF. Furthermore, the Purchaser
specifically agrees that it will not file this Agreement or any Ancillary Agreement with any Governmental Authority unless and until required to do so. The Purchaser also agrees that it will give Marriott and CTF reasonable notice of such filing,
and, at the reasonable request of CTF and/or Marriott the Purchaser shall use its Commercially Reasonable Efforts to seek confidential treatment of any provisions herein or therein. 
  
 Section 7.12 Marriott Undertaking. To the extent liability accruals are necessary as a result of employment
practices liability insurance claims or from audits of sales, use and occupancy taxes levied by any Governmental Authority with respect to any of the Hotels that arise post-Closing but relate to the period prior to the Purchaser’s 

  

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ownership (collectively, the “Liability Accruals”), Marriott shall be solely responsible for the payment of the Liability Accruals and
Marriott does hereby agree to indemnify and hold harmless the Purchaser from and against any loss, claim, damage or expense which the Purchaser may suffer, incur or expend arising out of a failure on the part of Marriott to pay the Liability
Accruals. 
  
 Section 7.13 UST Removal at Westchester
Property. A portion of the North American Capex Amount, consisting of $500,000 (the “Base Amount”) has been allocated to perform and complete the removal and replacement of two (2) petroleum underground storage tanks
(“USTs”) at the Renaissance Westchester property. Marriott hereby agrees that it will use Commercially Reasonable Efforts to cause CTF to complete, prior to Closing, the closure in accordance with applicable federal and New York
laws relating to petroleum USTs, including tank removal, release reporting, release investigation, and any corrective remediation action. Completion of such work shall be evidenced by a No Further Action Letter from the New York Department of
Environmental Conservation (the “Certification”). If, by Closing, the Certification has not been obtained, then Marriott will, subsequent to Closing, take such actions as are necessary to complete the replacement of the USTs, and
perform such remediation work as is required to obtain the Certification (all such work, from the beginning of the UST tank removal process through Certification, is referred to as the “UST Work”). To the extent the cost of the UST
Work exceeds the Base Amount, Marriott agrees that it shall be responsible for all such costs, and agrees to indemnify and hold Purchaser and Purchaser’s lender harmless from and against all costs, expense and liabilities suffered or incurred
by Purchaser in connection with the UST Work over and above such Base Amount, including, without limitation, any continuing costs of monitoring or testing that may be required in connection with UST Work. Purchaser agrees that the Base Amount shall
be included in the calculation of the Target North American Capex Amount.  
  
 ARTICLE 8. TAX MATTERS. 
  
 Section 8.1 Tax Returns. 
  
 (a) Marriott or its Affiliates shall prepare, or shall cause to be prepared, and shall file or cause to be filed, all Tax Returns for any Hotel for taxable years that end on or before the Closing Date (other than
those Tax Returns that are the contractual obligation of CTF under the CTF Agreement). Except as required by applicable law, such Tax Returns shall be prepared in a manner that is consistent with past practice. 
  
 (b) The Purchaser shall prepare or cause to be prepared and
shall file or cause to be filed all other Tax Returns for the Hotels (other than those Tax Returns that are the contractual obligation of CTF under the CTF Agreement). Except as required by applicable law, such Tax Returns shall be prepared in a
manner that is consistent with past practice. The Purchaser shall deliver to Marriott a copy of any Tax Returns in respect of which Marriott is required to make a payment pursuant to this Agreement, completed in draft form, at least 20 days before
the due date thereof for the review and approval of Marriott, which approval will not be unreasonably withheld or delayed, and a schedule, in reasonable detail, of the amount of payment due to the Purchaser. If Marriott approves such Tax Return, it
shall pay the amount owed the Purchaser before the due date of such Tax Return. 
  

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 Section 8.2 Marriott’s Obligations. Solely to the extent of (i) any Taxes imposed as a
result of the gross negligence or willful misconduct of Marriott; (ii) any Transfer Taxes allocated between the parties under the terms of this Agreement, and (iii) any Taxes (including real property taxes) taken into account in the definition of
Working Capital, Marriott shall be responsible for and pay, and shall indemnify the Purchaser and its Affiliates from, (a) any and all Taxes imposed on any of the Hotels, or for which an owner of a Hotel is liable, for any taxable period ending on
or before the Closing Date and the portion through the end of the Closing Date for any taxable period that includes but does not end on the Closing Date (the “Pre-Closing Tax Period”); provided, however, that Marriott
shall not be responsible for any Taxes arising out of events outside the ordinary course of business and within the control of the Purchaser occurring on the Closing Date after the Closing, (b) any and all Taxes imposed on any of the Hotels, or for
which an owner of a Hotel becomes liable, for any taxable period ending after the Closing Date to the extent that such Taxes result directly from a transaction or an event occurring on or before the Closing Date, (c) any Taxes arising out of a
breach of the representations in Section 5.16 and (d) any costs or expenses with respect to Taxes indemnified hereunder. Marriott shall indemnify, defend and hold the Purchaser harmless from, and shall be entitled to any refund of, any and all Taxes
that are Marriott’s responsibility pursuant to the immediately preceding sentence. Any indemnity payment required to be made by Marriott pursuant to this Section 8.2 shall be made within 30 days of written notice from the Purchaser. 

 
 Section 8.3 Purchaser’s Obligations. Except as
otherwise provided in Section 8.2, from and after the Effective Date, the Purchaser and its Affiliates shall be solely responsible for the payment or discharge of all Taxes imposed on the any of the Hotels and any costs or expenses with respect to
taxes indemnified hereunder. The Purchaser shall indemnify, defend and hold Marriott and its Affiliates harmless from, and shall be entitled to any refund of, any and all Taxes that are the Purchaser’s responsibility pursuant to the immediately
preceding sentence. Any indemnity payment required to be made by the Purchaser pursuant to this Section 8.3 shall be made within 30 days of written notice from Marriott or any one of its Affiliates. 
  
 Section 8.4 Straddle Period. In the case of any taxable period
that includes (but does not end on) the Effective Date (a “Straddle Period”), the amount of any Taxes based on or measured by income or receipts of a Hotel for the Pre-Closing Tax Period shall be determined based on an interim
closing of the books as of the close of business on the Effective Date (and for such purpose, the taxable period of any partnership or other pass-through entity in which the Hotel’s owner holds a beneficial interest shall be deemed to terminate
at such time) and the amount of other Taxes of a Hotel for a Straddle Period that relates to the Pre-Closing Tax Period shall be deemed to be the amount of such Tax for the entire taxable period multiplied by a fraction the numerator of which is the
number of days in the taxable period ending on the Effective Date and the denominator of which is the number of days in such Straddle Period. The benefits of lower tax brackets and other similar benefits shall be apportioned in making the 

  

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calculation of such allocated portions on the basis of the number of days in the Purchaser’s and Marriott’s holding periods for the taxable period
beginning before and ending after the Effective Date. 
  
 Section 8.5 Contests. For purposes of this Agreement, a “Contest” is any audit, court proceeding or other dispute with respect to any tax matter that affects a Hotel. Unless the Purchaser has previously
received written notice from Marriott of the existence of such Contest, the Purchaser shall give written notice to Marriott of the existence of any Contest relating to a tax matter that is Marriott’s responsibility under Section 8.2 within ten
(10) days from the receipt by the Purchaser of any written notice of such Contest, but no failure to give such notice shall relieve Marriott of any liability hereunder. Unless Marriott has previously received written notice from the Purchaser of the
existence of such Contest, Marriott shall give written notice to the Purchaser of the existence of any Contest for which the Purchaser has responsibility within ten (10) days from the receipt by Marriott of any written notice of such Contest.
Marriott shall, at its election, have the right to represent a Hotel’s interests in any Contest relating to a Tax matter arising in a period ending on or before the Effective Date, to employ counsel of its choice at its expense and to control
the conduct of such Contest, including settlement or other disposition thereof; provided, however, that the Purchaser shall have the right to consult with Marriott regarding any such Contest that may affect such Hotel for any periods
ending after the Effective Date at the Purchaser’s own expense and provided, further, that any settlement or other disposition of any such Contest may only be with the consent of the Purchaser, which consent will not be
unreasonably withheld or delayed. 
  
 Section 8.6
Cooperation on Tax Matters. The Purchaser, on the one hand, and Marriott, on the other, agree, in each case at no cost to the other party, to cooperate with the other and the other’s Representatives in a prompt and timely manner in
connection with any Contest. Such cooperation shall include, but not be limited to, making available to the other party, during normal business hours, all books, records, Tax Returns, documents, files, other information (including working papers and
schedules), officers or employees (without substantial interruption of employment) or other relevant information necessary or useful in connection with any Contest requiring any such books, records and files. The Purchaser, on the one hand, and
Marriott, on the other, agree, in each case at no cost to the other party, to cooperate fully in a prompt and timely manner with the other and the other’s Representatives, as and to the extent reasonably requested by the other party, in
connection with the filing of Tax Returns pursuant to Section 8.1 and in connection with any Contest. Such cooperation shall include the retention and (upon the other party’s request) the provision of records and information which are
reasonably relevant to any such Tax Return or Contest and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. Marriott agrees (i) to retain all books and
records with respect to Taxes pertinent to the Hotels relating to any taxable period beginning before the Closing Date until 90 days following the expiration of the period of limitations applicable to the related Tax, (ii) to abide by all record
retention agreements entered into with any Tax authority, other than those books and records relating to the Hotels which the Purchaser shall provide to Marriott on or before the Closing Date; and (iii) to give the Purchaser reasonable written
notice prior to transferring, destroying or discarding any 

  

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such books and records and, if the Purchaser so requests, Marriott shall allow the Purchaser to take possession of such books and records. Marriott and the
Purchaser further agree, upon request, to use their commercially reasonable efforts to obtain any certificate or other document from any governmental authority as may be necessary to mitigate, reduce or eliminate any Tax that could be imposed
(including, but not limited to, with respect to the transactions contemplated hereby). 
  
 Section 8.7 Price Adjustment. All amounts paid pursuant to this Agreement by one party to another party (other than interest payments) shall be treated by such parties as an adjustment to the Purchase
Price, to the extent appropriate and permitted by law. 
  
 Section 8.8 After-Tax Basis. All payments due in respect of Non-United States Taxes under this Article 8 shall be fully adjusted to reflect (i) any net increase in Taxes that the recipient of such payments will experience as a
result of receiving such payments, (ii) any net increase in Taxes such recipient will experience as a result of receiving any gross-up payments under this Section 8.8 and (iii) any net Tax benefits that the recipient will incur as a result of the
payment of the indemnified tax. 
  
 Section 8.9
Elections. Marriott and its Affiliates shall cooperate fully with the Purchaser, to the extent necessary and to the extent reasonably requested by the Purchaser, in connection with the filing of any elections relating to Taxes which become
available to the Purchaser or its Affiliates as a result of the transactions described in this Agreement; provided, however, that Marriott and its Affiliates shall not be obligated to consent to an election if such election would
increase the amount of Taxes it is required to pay unless the parties otherwise agree. 
  
 Section 8.10 Survival. All obligations under this Article 8 shall survive the Closing hereunder and continue until 90 days following the expiration of the period of limitations applicable to the related
Tax. If a Tax claim that is raised by one party during the survival period is disputed by the other party, such claim shall survive the dispute between the parties is resolved. 
  
 ARTICLE 9. TITLE COMMITMENT AND SURVEY REVIEW PROCESS; CONDITIONS TO CLOSING. 
  
 Section 9.1 Title Commitment and Survey Review Process.

  
 (a) Title Review Process. Purchaser
and Marriott have each initiated the title review process consisting of, with respect to the Leased Real Property, the Owned Real Property and the real property owned by any Minority Owned Entity located in the United States (the “Real
Properties”), (A) ordering from the Title Company a Uniform Commercial Code financing statement search including a search on any Target and a commitment for owner’s title insurance, on such policy form as is available in the applicable
jurisdiction as selected by Purchaser, and (B) ordering from Bock & Clark Corporation National Surveyors Network (“Surveyor”) an ALTA survey with such instructions regarding information to be shown and the scope of certification
as Purchaser shall determine. The Uniform Commercial Code financing statement search results and 

  

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the title commitments and surveys obtained by Purchaser, as revised or updated from time to time, are herein referred to as “Title
Materials.” Copies of all Title Materials shall be provided to Marriott’s counsel as and when received, which copies shall not be required to be returned. During the period from the date of this Agreement and ending at 11:59 pm May 3,
2005 (the “Objection Period”), Purchaser shall notify Marriott in writing of those matters relating to title disclosed to Purchaser in the Title Materials or otherwise disclosed in materials received by Purchaser at least
forty-eight (48) hours prior to 11:59 pm, May 3, 2005 to which Purchaser objects (including, for example, the size or configuration of any Real Properties which are not acceptable to Purchaser), and that are not Permitted Encumbrances set forth in
items (b)-(e) of the definition thereof (collectively, the “Purchaser’s Objections”). As to matters relating to title disclosed in the Title Materials or otherwise disclosed in materials received by Purchaser within forty-eight
(48) hours prior to 11:59 pm, May 3, 2005, Purchaser shall notify Marriott in writing of its Title Objections within forty-eight (48) hours of its receipt of such materials, but in no event later than 11:59 pm, May 5, 2005. Purchaser shall endeavor
to deliver the Purchaser’s Objections in a reasonably expeditious manner and on a property-by-property basis commencing no later than the date hereof and thereafter as soon as reasonably practical after the date Purchaser receives the
applicable portion of the Title Materials. Purchaser shall not be deemed to waive its right to make Purchaser’s Objections even if Purchaser’s Objections are not made in a reasonably expeditious manner so long as Purchaser’s
Objections are made during the Objection Period. At Closing Purchaser shall reimburse Marriott for all costs and expenses incurred or expended by Marriott to the Title Company and/or Surveyor in connection with obtaining the Title Materials with
regard to the Real Properties. 
  
 (b) Title
Policies. Prior to the expiration of the Objection Period, Purchaser shall obtain from the Title Company, with respect to the Leased Real Property and the Owned Real Property, in all jurisdictions where available, a commitment to insure
accompanied by a Pro Forma title policy, in form acceptable to Purchaser (each, a “Pro Forma”). Each Pro Forma shall be written on an ALTA Form B (1970, amended 10/17/70, or if the 1970, amended 10/17/70 form is not available, the
1992 form with no creditors’ rights exclusion (except in States or jurisdictions where such form or deletion is not permitted)) or on such similar form as is available in the applicable jurisdiction, insuring extended owner’s title
coverage and shall evidence Title Company commitment, upon compliance with the Title Company’s requirements as set forth in the Title Company’s commitments to insure (the “Requirements”), to insure title to the Real
Property that is the subject of any Pro Forma, subject only to the Permitted Encumbrances. The Pro Formas shall be in form and substance acceptable to Purchaser, and shall include all endorsements reasonably required by Purchaser. Purchaser shall
deliver all Pro Formas and Requirements (including the form of any affidavits or certifications required to be executed by Marriott or CTF in satisfaction of a Requirement) to Marriott’s counsel no later than the expiration of the Objection
Period. 
  
 (c) Title Cure Period. Upon
the termination of the Objection Period, except for the Purchaser’s Objections if the same are timely raised, the Purchaser shall be deemed to have accepted the form and substance of all matters disclosed in the Title 

  

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Materials which shall become Permitted Encumbrances for all purposes under the terms of this Agreement and the Ancillary Agreements. Following the Objection
Period, and without any obligation to do so, Marriott shall have until May 16, 2005, or by delivery of written notice to Purchaser by Marriott, until such later date, but not beyond May 23, 2005 (as such date may have been extended, the
“Title Cure Period”) to cause CTF to elect to cure or elect not to cure any or all matters raised in Purchaser’s objections; provided, however, CTF agrees to have released by Closing the liens securing any Debt
that is not to be assumed by Marriott or Purchaser pursuant to the terms of the CTF Agreement or this Agreement, as applicable. If CTF elects to cure such Title Objections, the cure must be sufficient for the Title Company to remove the applicable
Title Objection from the exceptions to title set forth in the applicable Pro Forma. 
  
 (d) Termination of Title Cure Period. If, for any reason, CTF is unable or at CTF’s sole election, unwilling to take such
actions as may be required to cause the matter identified in Purchaser’s Objections to be cured or removed so as to convey title to the Real Properties consistent with the Pro Formas, or if CTF objects to any Requirement or any other obligation
which it may incur in connection with the issuance of the Pro Forma title policies, Marriott shall give Purchaser notice thereof prior to the expiration of the Title Cure Period; it being understood and agreed that the failure of Marriott to timely
give such notice shall be deemed an election by CTF not to remedy such matters. If CTF shall elect not (or be deemed to elect not) to remove any matter identified in Purchaser’s Objections, Purchaser may, in the exercise of its sole discretion
either: (i) close the Transaction with respect to the Real Properties subject to the Purchaser’s Objections (that CTF will not cure) without abatement of the Unadjusted Purchase Price, in which event: (A) the Purchaser’s Objections that
CTF will not cure shall be, and be deemed to be, for all purposes, Permitted Encumbrances; (B) the Purchaser shall close the Transactions notwithstanding the existence of any of the Purchaser’s Objections that CTF will not cure; and (C) neither
CTF nor Marriott shall have any obligation or liability whatsoever after the Closing with respect to CTF’s failure to cause any of the Purchaser’s Objections to be eliminated; or (ii) terminate this Agreement by written notice given to
Marriott within four (4) calendar days after expiration of the Title Cure Period, in which event this Agreement shall terminate, the Deposit and all interest accrued thereon shall be returned to Purchaser and neither party hereto shall have any
further obligations thereunder other than those obligations expressly stated herein to survive the termination of this Agreement. In the event Purchaser elects to proceed to Closing, the Pro Formas shall be revised to (1) delete those Requirements
objected to by CTF and (2) add Purchaser’s Objections that CTF will not cure so that the Pro Formas shall be consistent with the quality of title accepted or deemed accepted by the Purchaser pursuant to this Section 9.1(d). 
  
 (e) Requirement to Eliminate Purchaser’s Objections;
Requirement to Remove Liens’ Additional Title Matters. It is expressly understood that unless CTF expressly agrees, in the exercise of its sole discretion, to cure or remove a matter identified in the Purchaser’s Objections prior to
Closing, neither CTF nor Marriott shall be required to bring any action, institute any proceeding, or otherwise incur any costs or expenses in order to attempt to eliminate any of the Purchaser’s Objections or to 

  

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otherwise cause title to the Real Properties to comport with the terms of this Agreement on the Closing Date; provided, however, that Marriott
shall use Commercially Reasonable Efforts to cause CTF to remove (i) any liens that are filed against the Real Properties during the period after the expiration of the Title Cure Period and before Closing but only if they are recorded by CTF or
caused by CTF’s actions or failure to act; and (ii) any liens securing Debt not assumed by the Purchaser pursuant to this Agreement or under the terms of the CTF Agreement. Should matters relative to title, other than liens CTF is obligated to
remove pursuant to the preceding sentence, be discovered from any update of the Title Materials received by Purchaser or otherwise after the expiration of the Objection Period that were not disclosed in the Title Materials received by the Purchaser
prior to the expiration of the Objection Period (collectively, the “New Title Matters”), the Purchaser shall have the right to notify Marriott in writing of any new Title Matters which are not Permitted Encumbrances set forth in
items (b)-(e) of the definition thereof to which the Purchaser objects provided that Purchaser notifies Marriott in writing of its objection within twenty-four (24) hours after such matter is disclosed to Purchaser. Marriott shall use Commercially
Reasonable Efforts to cause CTF to remove any New Title Matters that are filed against any of the Real Properties during the period after the expiration of the Title Cure Period and before Closing but only if they are recorded by CTF or caused by
CTF’s actions or failure to act. With respect to all other new Title Matters, Marriott shall use Commercially Reasonable Efforts to cause CTF within five (5) days after receipt of notice of the New Title Matters, to advise Marriott whether CTF
will cure such New Title Matters prior to the Closing Date and Marriott will promptly notify Purchaser of CTF’s response. Should CTF fail to cure or remove prior to the Closing Date any New Title Matter which is objected to by Purchaser, and
should such New Title Matter materially and adversely impair the value or use of any of the Real Properties to which such objection relates, such failure shall constitute a failure of a condition to Purchaser’s obligation to proceed to Closing
with respect to the Real Properties affected by such New Title Matters, and Purchaser may, at its election, determine not to close with respect to such Real Properties. All other New Title Matters which are not cured or removed by CTF shall be
deemed waived by the Purchaser and shall constitute Permitted Encumbrances for all purposes under this Agreement and the Ancillary Agreements. If the Purchaser elects not to close with respect to any Real Properties in accordance with Section
9.1(e), in such case, the Unadjusted Purchase Price shall be decreased by the Preliminary Allocated Price applicable to any such Real Properties. 
  
 (f) Related Fees, Cost and Expenses. All the fees, costs and expenses associated with the Purchaser’s procurement,
preparation, delivery and review of the Title Materials, the issuance of title policies and any endorsements related thereto shall be for the account of the Purchaser pursuant to Section 13.1 herein. 
  
 (g) Marriott Assurance. Marriott covenants and agrees
to cooperate with the Purchaser in connection with the Title Materials and the title review process and will cause CTF to provide such affidavits or other documents and information as Purchaser may reasonably require in order to obtain affirmative
endorsements or other assurances available under local practice as the Purchaser may require, including 

  

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non-imputation endorsements, where applicable, provided, however, that (i) all of the foregoing requirements are commercially reasonable, (ii)
Marriott shall not be obligated to cause CTF to provide any affidavit, certification or indemnification to the Title Company that causes CTF to incur any liability in excess of CTF’s liability under the CTF Agreement, and (iii) Marriott shall
not be obligated to cause CTF to provide any affidavit, certification or indemnification with respect to the Minority Owned Entities. 
  
 (h) Form of Fee Sale Transfer and Conveyance Documents. Seven (7) days prior to the expiration of the Objection Period, Purchaser
shall forward to Marriott the proposed form of the deeds, bills of sale, assignments, certificates, affidavits and such other instruments and documents (excluding any documents previously provided in connection with the Requirements) (collectively,
“Proposed Conveyance Documents”) as may be reasonably necessary in order to consummate the Transactions and facilitate the issuance by the Title Company of the title insurance policies reasonably requested by Purchaser and
facilitate the obtaining of other commercially reasonable assurances available under local practice. Marriott and Purchaser shall negotiate in good faith to agree upon the final form of the Proposed Conveyance Documents on or prior to the Closing
Date. Purchaser and Marriott acknowledge and agree that the warranty of title set forth in the various deeds and other conveyancing documents shall be in accordance with the commercially reasonable customary practices of the applicable jurisdictions
but in all cases sufficient to enable the Title Company to issue the title policies in the forms of the Pro Formas. The warranties of title contained in the various deeds shall not be subject to the provision of Section 10.8(b) of this Agreement.
Nothing herein shall be construed as requiring Marriott to cause CTF to make any representations, warranties or covenants in the Proposed Conveyance Documents other than those contained in Article 5 and Article 7 of the CTF Agreement. 
  
 Section 9.2 Lack of Consents or Estoppels for Certain Leasehold
Interests. 
  
 (a) Matters concerning the
consents for the Transfer of the interests in the Minority Owned Entities are addressed in Schedule 9.2(d). 
  
 (b) If any Estoppel Certificate satisfying the requirements of Section 7.9(d) is not obtained prior to the Closing Date or if obtained,
contains information which is inconsistent with Marriott’s representations and warranties set forth herein in Article 5 and 5A, then Purchaser shall elect to either: (i) proceed with Closing with respect to the applicable Hotel or Hotels and
waive any right to require the receipt of an Estoppel Certificate and the right to make a claim for indemnification under Article 10 based upon the facts or circumstances disclosed by the applicable Estoppel Certificate, or (ii) elect not to proceed
with Closing with respect to the applicable Hotel or Hotels (in which case the Unadjusted Purchase Price shall be decreased by the Preliminary Allocated Price for such Hotel or Hotels) in order to permit Marriott a period of time during which to
attempt to obtain an Estoppel Certificate in the form required hereby. In the event that Purchaser elects under clause (ii) above to permit Marriott additional time to obtain an Estoppel Certificate and Marriott fails to deliver an Estoppel
Certificate satisfying the requirements of Section 7.9(e) to Purchaser prior to December 31, 2005, then Purchaser 

  

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shall either (A) elect not to proceed to Closing with respect to the applicable Hotel or Hotels or (B) shall proceed to consummate the Transaction with
respect to the applicable Hotel and shall retain any rights it may have under the indemnification provisions of Article 10. 
  
 Section 9.3 General Conditions. The respective obligations of the Purchaser and Marriott to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment, at or prior to the Closing, of each of the following conditions, any of which may, to the extent permitted by applicable Law, be waived in writing by either party in its sole discretion
(provided, that such waiver shall only be effective as to the obligations of such party): 
  
 (a) No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Law (whether temporary, preliminary or
permanent), that is then in effect and that enjoins, restrains, makes illegal or otherwise prohibits the consummation of the transactions contemplated by this Agreement or the Ancillary Agreements. 
  
 (b) Any waiting period (and any extension thereof) under any
antitrust laws applicable to the transactions contemplated by this Agreement and the Ancillary Agreements shall have expired or shall have been terminated. All other material consents of, or registrations, declarations or filings with, any
Governmental Authority legally required for the consummation of the transactions contemplated by this Agreement and the Ancillary Agreements shall have been obtained or filed or (with respect to liquor licenses) shall be in the process of being
obtained and Marriott shall be responsible for the process with respect to liquor licenses such that there will be no interruption in the sale of liquor at the Hotels being purchased by Purchaser. 
  
 (c) Closing under the CTF Agreement with respect to the
Hotels shall have occurred or shall occur simultaneously with Closing hereunder. 
  
 Section 9.4 Conditions to the Obligations of Marriott. The obligations of Marriott to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment, at or prior to the
Closing, of each the following conditions, any of which may be waived in writing by Marriott in its sole discretion: 
  
 (a) The Purchaser shall have performed in all material respects all obligations and agreements and complied in all material respects with
all covenants and conditions required by this Agreement to be performed or complied with by it prior to or at the Closing and Marriott shall have received from the Purchaser a certificate to such effect, signed by a duly authorized officer thereof.

  
 (b) Marriott shall have received an executed
counterpart of each of the Purchaser’s Closing Deliveries, signed by each party thereto other than Marriott. 
  
 (c) At Closing, issuance by the Title Company of a title policy identical to the Pro Forma for each of the Properties which is a part of
the Transaction as 

  

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each such Pro Forma has been modified in accordance with the provisions of Section 9.1(d), subject only to changes required to incorporate a New Title Matter
accepted by Purchaser in accordance with Section 9.1(e). 
  
 Section 9.5 Conditions to the Obligations of the Purchaser. The obligations of the Purchaser to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment, at or prior to the Closing, of
each of the following conditions, any of which may be waived in writing by the Purchaser in its sole discretion: 
  
 (a) There shall not have occurred any of the following: 
  
 (i) an event or matter which constitutes a breach of a representation and warranty in Sections 5.2,
5.3(a)-(e) or 5.11(a); 
  
 (ii) the entry against
CTF of an Order which constitutes a breach of a representation and warranty in Section 5.8(b) and, as of the Closing, prevents a Hotel from operating in the Ordinary Course of Business in all material respects; or 
  
 (iii) an event or matter, other than a Casualty Loss, that
constitutes a breach of any other of CTF’s representations, warranties or covenants contained in the CTF Agreement that (A) with respect to any Group A Hotels, or the Hotel Interests related thereto, adversely impacts the value of one or more
of such Hotels, or the Hotel Interests related thereto, by more than the Group A Threshold Amount or (B) with respect to any Group B Hotels, or the Hotel Interests related thereto, adversely impacts the value of one or more of such Hotels, or the
Hotel Interests related thereto, by more than the Group B Threshold Amount, 
  
 provided, however, if Purchaser determines not to proceed to Closing with respect to such Hotel, Purchaser’s sole remedy in event of such event or breach shall be that: (1) Marriott shall not cause CTF to assign,
transfer, convey or deliver such Hotel Interest affected by such event or breach to the Purchaser at the Closing, and (2) the Unadjusted Purchase Price shall be reduced by the Preliminary Allocated Price for such Hotel Interest. 
  
 (b) Marriott shall have performed in all material respects
all obligations and agreements and complied in all material respects with all covenants and conditions required by this Agreement to be performed or complied with by it prior to or at the Closing and the Purchaser shall have received from Marriott a
certificate to such effect, signed by a duly authorized officer thereof. 
  
 (c) The Purchaser shall have received an executed counterpart of each of Marriott’s Closing Deliveries, signed by each party thereto other than the Purchaser. 
  
 (d) At the Closing, issuance by the Title Company of a title
policy identical in all material respects to the Pro Formas for the Real Property related to the Hotel Interests being transferred at the Closing as each such Pro Forma has been modified in accordance with the provisions of Section 9.1(d) subject
only to changes required to incorporate a New Title Matter accepted by Purchaser in accordance with Section 9.1(e). 
  

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 ARTICLE 10. INDEMNIFICATION. 
  
 Section 10.1 Pass-Through Representations. 
  
 (a) The representations and warranties set forth in Section
4.1 through 4.17 hereof are substantially identical to those certain representations and warranties made by CTF to Marriott in Sections 5.1 through 5.17 of the CTF Agreement (the “Pass Through Representations”). Purchaser
acknowledges that Marriott may have no direct or actual knowledge of the facts contained in certain of the Pass Through Representations and that except as set forth in Section 5.18A, Marriott is relying exclusively on the correctness of the Pass
Through Representations of CTF in making the Pass Through Representations to Purchaser. Purchaser acknowledges and agrees that Marriott’s liability to Purchaser for any Breach of the Pass Through Representations shall be limited to the actual
monetary damages or other relief received by Marriott based on the breach of the Pass Through Representations by CTF. Except as set forth in this Section 10.1(a)-10.1(b), Marriott shall have no liability or obligation to Purchaser for any Breach by
Marriott of the Pass Through Representations. 
  
 (b) Upon the occurrence of a Breach of the Pass Through Representations and upon Purchaser making a claim against Marriott, Marriott shall exercise any and all rights and remedies available to Marriott under the CTF Agreement or at law or
in equity (i) to bring against CTF a claim for indemnification and institute litigation to enforce such claim to the same extent as made by Purchaser against Marriott (but only to, and in the manner permitted by the CTF Agreement and subject to the
limitations of Article 10 of the CTF Agreement, which for the avoidance of doubt, exempts Tax matters from any such limitations imposed by Article 10 of the CTF Agreement) (a “Mirror Claim”); and (ii) to seek as damages in the
Mirror Claim, all Losses of the Purchaser arising from the Mirror Claim (but only to in the manner permitted by this Agreement and subject to the limitations of Article 10 as aforesaid). In taking any action against CTF, Purchaser shall have the
right to select counsel and to manage any and all claims, actions, causes of action and/or litigation which Marriott may pursue in order to enforce its rights hereunder. Marriott shall cooperate fully with Purchaser in Purchaser’s efforts to
enforce its right based on a Breach of the Pass Through Representations. Purchaser shall be responsible for, and shall pay all of Purchaser’s reasonable expenses which Purchaser may suffer, incur or expend in its efforts to enforce its rights
against CTF, including, without limitation, reasonable counsel fees, fees of experts, and court costs and may include such costs as a part of its claim for damages. 
  
 Section 10.2 Survival of Representations, Warranties and Indemnities. The representations, warranties and
covenants of Marriott and the Purchaser contained in this Agreement shall survive the Closing until April 30, 2007, provided, however, that the representations and warranties set forth in Sections 5.2, 5.3(a)-(e), 7.4 and 7.11 shall 

  

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survive indefinitely. Survival of the representations and warranties in Sections 5.16 and 5.16A shall be governed by the provisions of Section 8.9.

  
 Section 10.3 Indemnification by Marriott.
Subject to the terms and conditions of this Article 10, Marriott shall save, defend, indemnify and hold harmless the Purchaser (including the Targets and their Subsidiaries) and the respective Representatives, successors and assigns of each of the
foregoing (collectively, the “Purchaser Indemnified Parties”) from and against any and all losses, damages, liabilities, deficiencies, claims, interest, awards, judgments, penalties, costs and expenses (including reasonable
attorneys’ fees, costs and other out-of-pocket expenses incurred in investigating, preparing or defending the foregoing) (hereinafter collectively, “Losses”), incurred, sustained or suffered by any of the foregoing to the
extent arising out of or resulting from: 
  
 (a)
any breach of any material representation or warranty made by Marriott contained in this Agreement other than the Pass Through Representations set forth in Section 5 of this Agreement; 
  
 (b) any breach of any material covenant or agreement by Marriott (hereinafter the “Marriott
Covenants”) contained in this Agreement other than a covenant by Marriott to cause CTF to perform in any stated manner; 
  
 (c) any Third Party Claim that arises from an event that occurs prior to Closing regarding any Interest Holder other than (i) a liability
reflected on the Balance Sheet of such Target to the extent of the amount so reflected, or (ii) any Assumed Liability and any other liability expressly assumed by Purchaser under this Agreement to the extent of the amount so assumed; 
  
 (d) any liability for any brokers’ or investment
banking fees of Marriott or its Affiliates in connection with this Agreement and the transactions contemplated hereby; and 
  
 (e) Marriott’s actions or failure to take actions where required, all obligations, penalties, liabilities and expenses under the
Worker Adjustment and Retraining Notification Act of 1988, as amended, or other similar state laws, arising from the Transactions, 
  
 Section 10.4 Indemnification by the Purchaser. The Purchaser shall save, defend, indemnify and hold harmless Marriott and its Affiliates and
the respective Representatives, successors and assigns of each of the foregoing (collectively, the “Marriott Indemnified Parties”) from and against any and all Losses incurred, sustained or suffered by any of the foregoing to the
extent arising out of or resulting from: 
  
 (a)
any breach of any representation or warranty made by the Purchaser contained in this Agreement; 
  

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 (b) any breach of any covenant or agreement by the Purchaser contained in this Agreement;

  
 (c) any Third Party Claim which arises from
an event that occurs after the Closing against any Marriott Indemnified Party with respect to the operations or ownership of the Hotels or Hotel Interests except to the extent that such claim was caused by a breach of Marriott’s obligations and
duties as manager under the Hotel Management Agreements or with respect to which Marriott is otherwise responsible pursuant to the terms and conditions of the Hotel Management Agreements (in which event the terms and conditions of the Hotel
Management Agreements shall govern); 
  
 (d) any
Assumed Liabilities; 
  
 (e) any claim for any
brokers’ or investment banking fees of the Purchaser in connection with this Agreement and the transactions contemplated hereby; and 
  
 (f) arising other than from CTF’s actions or failure to take actions where required, all obligations, penalties, liabilities and
expenses under the Worker Adjustment and Retraining Notification Act of 1988, as amended, or other similar laws arising from the Transactions. 
  
 Section 10.5 Procedures. 
  
 (a) In order for a Purchaser Indemnified Party or Marriott Indemnified Party (the “Indemnified Party”) to be entitled to
any indemnification provided for under this Agreement in respect of, arising out of or involving a Loss or a claim or demand made by any Person other than Marriott and its Affiliates and the Purchaser against the Indemnified Party, including a
Mirror Claim (a “Third Party Claim”), such Indemnified Party shall deliver notice thereof to the party against whom indemnity is sought (the “Indemnifying Party”) promptly after receipt by such Indemnified Party of
written notice of the Third Party Claim, but in no event later than the Claims Deadline, describing in reasonable detail the facts giving rise to any claim for indemnification hereunder, the amount or method of computation of the amount of such
claim (if known) and such other information with respect thereto as the Indemnifying Party may reasonably request. The failure to provide as part of the initial written notice of claim, the information set forth in the preceding sentence shall not
invalidate the effectiveness of the written notice provided the information is delivered in a reasonable time period thereafter. The failure to provide such notice, however, shall not release the Indemnifying Party from any of its obligations under
this Article 10 except to the extent that the Indemnifying Party is prejudiced by such failure. 
  
 (b) The Indemnifying Party shall have the right, upon written notice to the Indemnified Party within thirty (30) days of receipt of notice
from the Indemnified Party of the commencement of such Third Party Claim except as may be provided to the contrary as to a Mirror Claim in which case Purchaser shall bear all of the costs associated therewith, to assume the defense thereof at the
expense of the Indemnifying 

  

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Party with counsel selected by the Indemnifying Party and reasonably satisfactory to the Indemnified Party. If the Indemnifying Party assumes the defense of
such Third Party Claim, the Indemnified Party shall have the right to employ separate counsel and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of the Indemnified Party. If the Indemnifying
Party assumes the defense of any Third Party Claim, the Indemnified Party shall cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses, pertinent records, materials and information in the
Indemnified Party’s possession or under the Indemnified Party’s control relating thereto as is reasonably required by the Indemnifying Party. If the Indemnifying Party assumes the defense of any Third Party Claim, the Indemnified Party
shall not admit any liability with respect to, or settle, compromise or discharge, or offer to compromise, settle or discharge, such Third Party Claim without the Indemnifying Party’s prior written consent unless the Indemnifying Party
withdraws from the defense of such Third Party Claim or unless a final judgment from which no appeal may be taken by or on behalf of the Indemnifying Party is entered against the Indemnified Party for such Third Party Claim. If the Indemnifying
Party does not assume the defense of any such claims or proceeding pursuant to this Section 10.5 and the Indemnified Party proposes to settle such claims or proceeding prior to a final judgment thereon or to forgo any appeal with respect thereto,
then the Indemnified Party shall give the Indemnifying Party prompt written notice thereof and the Indemnifying Party shall have the right to participate in the settlement or assume or reassume the defense of such claims or proceeding. The
Indemnifying Party and its counsel shall conduct such defense or settlement in a manner reasonably satisfactory and effective to protect the Indemnified Party fully. The Indemnifying Party and its counsel shall keep the Indemnified Party fully
advised as to its conduct of such defense or settlement, and shall not compromise or settle such Third Party Claim without the prior written consent of the Indemnified Party (not to be unreasonably withheld or delayed) unless such settlement or
compromise does not subject the Indemnified Party to any monetary liability, includes a complete, unconditional release of the Indemnified Party from all liability with respect to such Third Party Claim, and does not constitute an acknowledgement or
acceptance by the Indemnified Party of fault, culpability, or responsibility of any kind. Notwithstanding the Indemnifying Party’s election to defend against or settle the Third Party Claim, the Indemnified Party may, upon written notice to the
Indemnifying Party, elect to employ its own counsel and assume control of such defense or settlement if (A) the Indemnifying Party is also a Person against whom the Third Party Claim is made and the Indemnified Person determines in good faith that
joint representation would be inappropriate; (B) the Indemnified Party determines in good faith that the Indemnified Party may have available to its one or more defenses or counterclaims that are inconsistent with, different from, or in addition to
one or more of those that may be available to the Indemnifying Party with respect to such Third Party Claim; (C) the Indemnifying Party fails to provide reasonable assurance to the Indemnified Party of its financial capacity to defend such Third
Party Action; (D) the Indemnifying Party shall not in fact have employed counsel reasonably satisfactory to the Indemnified Party for the defense or settlement of such Third Party Action; provided, however, that the assumption of
control of the defense or settlement of a Third Party Action by the Indemnified Party pursuant to this sentence shall not relieve the Indemnifying Party of its obligation to indemnify and hold the Indemnified Party harmless. 
  

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 (c) In the event any Indemnified Party should have a claim against any Indemnifying Party
hereunder that does not involve a Third Party Claim being asserted against or sought to be collected from such Indemnified Party, the Indemnified Party shall deliver notice of such claim to the Indemnifying Party no later than the Claims Deadline,
describing in reasonable detail the facts giving rise to any claim for indemnification hereunder, the amount or method of computation of the amount of such claim (if known) and such other information with respect thereto as the Indemnifying Party
may reasonably request. The failure to provide as part of the initial written notice of claim, the information set forth in the preceding sentence shall not invalidate the effectiveness of the written notice provided the information is provided in a
reasonable time period thereafter. The failure to provide such notice, however, shall not release the Indemnifying Party from any of its obligations under this Article 10 except to the extent that the Indemnifying Party is prejudiced by such
failure. The Indemnifying Party shall have thirty (30) days after receipt of notice of any claim pursuant to this Section 10.5(c) to (i) agree to the amount or method of determination set forth in such claim and to pay such amount to such
Indemnified Party or (ii) provide the Indemnified Party with notice (a “Dispute Notice”) that it disagrees with the amount or method of determination set forth in such claim. If the Indemnifying Party has timely delivered a Dispute
Notice, the Indemnifying Party and the Indemnified Party shall, during a period 30 days from the Indemnified Party’s receipt of such Dispute Notice, negotiate to achieve resolution of such dispute and, if not resolved through negotiations, such
dispute shall be resolved as provided in Section 12.9. 
  
 Section 10.6 Limits on Indemnification. 
  
 (a) No claim may be asserted against any party for breach of any representation or warranty contained in this Agreement unless written notice of such claim is received by such party describing in reasonable detail the
facts and circumstances with respect to the subject matter of such claim on or prior to May 30, 2007 (the “Claim Deadline”) in which case such representation, warranty or covenant shall survive as to such claim until such claim has
been finally resolved. Notwithstanding the foregoing, there shall be no Claims Deadline applicable to a claim raised with respect to a breach of Sections 5.2, 5.3(a)-(e), 7.4 and 7.11 hereof. In addition, no claim may be asserted against Marriott
for breach of any of CTF’s or Marriott’s representations or warranties to the extent that the Title Materials contain information that is inconsistent with such representations or warranties. 
  
 (b) Notwithstanding anything to the contrary contained in
this Agreement with respect to each Fee Property, Target, Leasehold Interest in a Minority Owned Entity: (i) Marriott shall not be liable for any claim for indemnification of $5,000 or less pursuant to Sections 10.1(a), 10.1(b), or 10.3 resulting
from any single claim or aggregated claims arising out of the same facts, events or circumstances (the “De Minimus Amount”, (ii) Marriott shall not be liable unless and until the aggregate amount of indemnifiable Losses which may be
recovered from Marriott on account of all claims 

  

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equals or exceeds $50,000 (the “Threshold Amount”), at which time Marriott shall be liable for all such Losses, (iii) the maximum aggregate
amount of indemnifiable Losses which may be recovered by Purchaser Indemnified Parties arising out of or relating to the causes set forth in Sections 10.3(a), 10.3(b) or 10.3(c) in relation to any single Fee Property, Target, Leasehold Interest or
in a Minority Owned Entity shall equal fifty percent (50%) of the Preliminary Allocated Price in respect of such Fee Property, Target, Leasehold Interest or in such a Minority Owned Entity, as the case may be (the “Indemnification
Limit”); and (iv) no party hereto shall have any liability under any provision of this Agreement for any punitive, consequential, incidental, special or indirect damages relating to the breach or alleged breach of this Agreement or the
Ancillary Agreements. Notwithstanding the foregoing, the Indemnification Limit applicable to Losses related to a breach of a representation, warranty or covenant under Sections 5.2 and 5.3(a)-(e) shall be the Preliminary Allocated Price of each
Target. 
  
 (c) For all purposes of this Article
10, “Losses” shall be net of (i) any insurance (other than any self-insured retention program) or other recoveries paid (subject to Section 10.8 by a third party to the Indemnified Party or its Affiliates in connection with the facts,
events or circumstances giving rise to the right of indemnification and (ii) any net Tax benefit available to such Indemnified Party or its Affiliates arising in connection with the accrual, incurrence or payment of any such Losses (including the
net present value of any Tax benefit arising in subsequent taxable years). 
  
 (d) The Purchaser and Marriott shall cooperate with each other with respect to resolving any Third Party claim with respect to which one party is obligated to indemnify the other party hereunder, including by making
Commercially Reasonably Efforts to mitigate such claim. In the event that the Purchaser or Marriott shall fail to make such Commercially Reasonably Efforts to mitigate or resolve any claim or liability, then notwithstanding anything else to the
contrary contained herein, the other party shall not be required to indemnify any person to the extent of any loss, liability, claim, damage or expense that could reasonably be expected to have been avoided if the Purchaser or Marriott, as the case
may be, had made such efforts. 
  
 (e) For
purposes of this Article 10, “Losses” shall be determined in all cases without regard to any qualification or limitation with respect to “materiality” whether by reference to “in any material respect” or any other use
of “material.” 
  
 Section 10.7 Tax
Matters. Anything in this Article 10 to the contrary notwithstanding, the rights and obligations of the parties with respect to indemnification for any and all Tax matters shall be governed by Article 8. 
  
 Section 10.8 Assignment of Claims. If any Purchaser Indemnified
Party receives any payment from Marriott in respect of any Losses pursuant to Section 10.3 and the Purchaser Indemnified Party could have recovered all or a part of such Losses from a third party (a “Potential Contributor”) based on
the underlying claim asserted against Marriott, the Purchaser Indemnified Party shall assign, on a non-recourse basis and without any representation or warranty, such of its rights to proceed against the Potential 

  

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Contributor as are necessary to permit Marriott to recover from the Potential Contributor the amount of such payment. Any payment received in respect of such
claim shall be distributed, (i) first to the Purchaser Indemnified Party in the amount of any deductible or similar amount required to be paid by the Purchaser Indemnified Party prior to Marriott being required to make any payment to the Purchaser
Indemnified Party, (ii) second to Marriott in an amount equal to the aggregate payments made by Marriott to the Purchaser Indemnified Party in respect of such claim, plus costs and expenses incurred in investigating, defending or otherwise incurred
in connection with addressing such claim and (iii) the balance, if any, to the Purchaser Indemnified Party. 
  
 Section 10.9 Disclaimer of Implied Warranties. 
  
 (a) It is the explicit intent and understanding of each party hereto that neither party hereto nor its Representatives is making any
representation or warranty whatsoever, oral or written, express or implied, as to the accuracy or completeness of any information regarding the Property, except as expressly set forth in this Agreement, and neither party hereto is relying on any
statement, representation or warranty, oral or written, express or implied, made by the other party hereto or such other party’s Representatives, except for the representations and warranties expressly set forth in this Agreement. 

 
 (b) Each party hereto hereby agrees and acknowledges that
with the exception of the various deeds which will be placed of record in the applicable real property records each of the conveyance documents contemplated hereunder and under the CTF Agreement to consummate the Transaction shall explicitly reflect
the fact that the Purchaser is purchasing the applicable Owned Real Property or Leased Real Property on an “as is” condition “with all faults” and without any warranties, representations or guaranties of any kind, oral or
written, express or implied, concerning the Property from or on behalf of Marriott or CTF, except as may be expressly set forth in the representations and warranties in this Agreement as contemplated under Section 9.1(g). The Purchaser acknowledges
that, except as may be expressly set forth in this Agreement and the conveyance documents contemplated hereunder and under the CTF Agreement, Marriott has not, does not, and will not make any representations, warranties or guaranties, of any kind,
oral or written, express or implied, concerning the Property including, without limitation (i) the quality, adequacy, state of repair or physical condition of the Property, (ii) the habitability, merchantability or fitness, suitability or adequacy
of the Property or any portion thereof for any particular use or purpose, (iii) the zoning or other legal status of the Property, (iv) the compliance by the Property, or any portion thereof, with any applicable codes, laws, regulations, statutes,
ordinances, covenants, conditions or restrictions of any governmental or quasi-governmental entity or of any Person, or (v) the environmental condition of the Property, including its compliance with environmental laws and the presence or
non-presence of hazardous substances. At the Closing Purchaser shall execute and deliver a certificate to and for the benefit of CTF and Marriott reflecting its acknowledgement of the foregoing provisions. 
  

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 ARTICLE 11. DEFAULT, REMEDIES. 
  
 Section 11.1 Purchaser’s Default. Should Purchaser default
under this Agreement prior to Closing, Marriott shall be entitled (i) to retain the Deposit, and (ii) to collect the sum of $5 million from Purchaser (which shall become due and payable upon such default), collectively as liquidated damages and
terminate this Agreement (and the retention of the Deposit and such $5 million shall be the sole and exclusive remedy of Marriott for such default) in which event Purchaser shall have no rights under this Agreement or the CTF Agreement, and Marriott
shall have the right, but not the obligation, to close under the CTF Agreement. Following Closing, in the event the Deposit is retained by the Title Company pursuant to the provisions of Schedule 9.2(d)), the provisions of subsection (ii) above
shall have no further force or effect. 
  
 Section 11.2
Marriott’s Default. 
  
 (a) If all
other parties, including CTF and the other purchaser of Hotels under contract with Marriott to acquire such hotels, shall have fully performed their respective obligations under this Agreement and any other applicable Purchase and Sale Agreement
with regard to the Hotels including the CTF Agreement, and Marriott shall default hereunder, Purchaser shall be entitled to receive from Marriott as its sole and exclusive remedy (i) a refund of its Deposit and all interest earned thereon, (ii)
Purchaser’s Out of Pocket Costs, and (iii) a payment in the amount of Five Million Dollars ($5,000,000). 
  
 (b) If Marriott shall default under this Agreement as a result of a default by the other purchaser of any of the hotels under contract
with Marriott pursuant to the CTF Agreement under its applicable Purchase and Sale Agreement, and such default shall not have been caused by a default by CTF under the CTF Agreement, Purchaser shall be entitled to receive from Marriott (i) a refund
of its Deposit and all interest earned thereon and its reasonable Purchaser’s Out of Pocket Costs not to exceed Two Million Dollars ($2,000,000). 
  
 (c) If Marriott’s default hereunder results from a default by CTF under the CTF Agreement, Marriott shall determine which if any
remedy it wishes to pursue against CTF and shall provide to Purchaser notice of such determination. Purchaser shall have a period of ten (10) days after receipt of Marriott’s determination within which to elect to participate in such action or
not to so participate. If Purchaser elects to participate with Marriott in any such litigation, Purchaser shall be entitled to its pro rata share of damages in fact awarded to, and received by Marriott, and if such litigation shall include an action
for specific performance, Purchaser shall be entitled to acquire, pursuant to this Agreement and any of such order, judgment or decree of the applicable court, the Hotels which are the subject of this Agreement. For the purposes of this Section
11.2(c), the pro rata share of damages (less all costs incurred by Marriott and Purchaser in pursuing such action shall be determined based on the Unadjusted Purchase Price for the Hotels which are the subject of this Agreement as compared with the
Unadjusted Purchase Price under the CTF Agreement, unless any such damages as contemplated in this Section 11.2(c) shall be awarded based on specific damage to a 

  

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particular Hotel, in which event the damages awarded and paid shall belong to the party taking title to such Hotel. If Purchaser elects not to participate in
any such action, this Agreement shall terminate and neither party shall have any further liability or obligation to the other under this Agreement. In any event, all decisions as to the pursuit of remedies and the prosecution of any litigation shall
be made solely by Marriott. 
  
 (d) If Marriott
defaults under this Agreement, and such default shall not have resulted from a default by CTF under the CTF Agreement, and if thereafter Marriott either acquires the Hotels under the CTF Agreement or otherwise transfers its right to acquire the
Hotels under the CTF Agreement to a third party, Purchaser shall have the right to specific performance as to this Agreement; provided, however, Purchaser must (i) institute such action for Specific Performance against Marriott within three (3)
months from the first date on which Purchaser first learns or discovers that Marriott has so acquired the Hotels under the CTF Agreement or so transferred its rights under the CTF Agreement and (ii) as a closing condition to the Purchaser of such
Hotels, repay to Marriott any sums previously paid by Marriott to Purchaser for out-of-pocket expenses as provided in Sections 11.2(a) and 11.2(b) hereof less however Purchaser’s costs in pursuing such action for specific performance against
Marriott. In the event that an action for specific performance is not available, Purchaser shall be entitled to a refund of its Deposit and its reasonable third party out-of-pocket expenses not to exceed $2,000,000 as liquidated damages. 

 
 ARTICLE 12. TERMINATION. 
  
 Section 12.1 Termination. This Agreement may be terminated at
any time prior to the Closing: 
  
 (a) by mutual
written consent of the Purchaser and Marriott; 
  
 (b) (i) by Marriott, if any of the material conditions set forth in Section 9.3 or Section 9.4 shall have become incapable of fulfillment prior to the Termination Date or (ii) by the Purchaser, if any of the conditions set forth in Section
9.3 or Section 9.5 shall have become incapable of fulfillment prior to the Termination Date; provided, however, that the right to terminate this Agreement pursuant to this Section 12.1(b) shall not be available if the failure of the
party so requesting termination to fulfill any obligation under this Agreement shall have been the cause of the failure of such condition to be satisfied on or prior to such date;  
  
 (c) (1) by either Marriott or the Purchaser if the Closing
shall not have occurred by June 30, 2005 unless Closing under the CTF Agreement has been extended by Marriott pursuant to Section 3.11 of the CTF Agreement and Purchaser has elected pursuant to Section 3.8(c) hereof to postpone Closing, in which
event Closing hereunder shall be extended until November 15, 2005, or (2) if the Closing shall not have occurred by November 15, 2005, by either Marriott or Purchaser; provided, however, that the right to terminate this Agreement under
this Section 11.1(c) shall not be available if the failure of the party so requesting termination to fulfill any obligation under this Agreement shall 

  

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have been the cause of the failure of the Closing to occur on or prior to such date (June 30, 2005 or November 15, 2005, as applicable, (the
“Termination Date”)); or 
  
 (d)
by either Marriott or the Purchaser in the event that any Governmental Authority shall have issued an order, decree or ruling or taken any other action restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement
and such order, decree, ruling or other action shall have become final and non-appealable; provided, that the party so requesting termination shall have complied with Section 7.10. 
  
 The party seeking to terminate this Agreement pursuant to this Section 12.1 (other than Section 12.1(a)) shall give prompt written notice of
such termination to the other party. 
  
 Section 12.2
Effect of Termination. In the event of termination of this Agreement as provided in Section 12.1, this Agreement shall forthwith become void the Deposit shall be returned to Purchaser and there shall be no liability on the part of either
party except (a) for the representations of both parties relating to broker’s fees and finder’s fees, Section 7.8 relating to confidentiality, Section 7.11 relating to public announcements, Section 13.1 relating to fees and expenses,
Section 13.4 relating to notices, Section 13.8 relating to third-party beneficiaries, Section 13.9 relating to governing law, Section 13.10 relating to submission to jurisdiction and this Section 12.2 and (b) that nothing in this Section 12.2 shall
relieve either party from liability for any breach of this Agreement or any Ancillary Agreement. 
  
 ARTICLE 13. GENERAL PROVISIONS. 
  
 Section 13.1 Fees and Expenses. Except as otherwise provided herein, all fees and expenses incurred in connection with or related to this
Agreement and the Ancillary Agreements and the transactions contemplated hereby and thereby shall be paid by the party incurring such fees or expenses, whether or not such transactions are consummated. In the event of termination of this Agreement,
the obligation of each party to pay its own expenses will be subject to any rights of such party arising from a breach of this Agreement by the other. All fees, expenses and premiums in connection with the procurement of any Title Materials and
other related fees, expenses and premiums pursuant to Section 9.1(e) herein shall be for the account of the Purchaser. 
  
 Section 13.2 Amendment and Modification. This Agreement may not be amended, modified or supplemented in any manner, whether by course of
conduct or otherwise, except by an instrument in writing signed on behalf of each party and otherwise as expressly set forth herein. 
  
 Section 13.3 Waiver. No failure or delay of either party in exercising any right or remedy hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the parties hereunder are cumulative and are not exclusive of any rights or remedies 

  

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which they would otherwise have hereunder. Any agreement on the part of either party to any such waiver shall be valid only if set forth in a written
instrument executed and delivered by a duly authorized officer on behalf of such party. 
  
 Section 13.4 Notices. All notices and other communications hereunder shall be in writing and shall be deemed duly given (a) on the date of delivery if delivered personally, or if by facsimile, upon
written confirmation of receipt by facsimile, e-mail or otherwise, (b) on the first Business Day following the date of dispatch if delivered by a recognized next-day courier service or (c) on the earlier of confirmed receipt or the fifth Business
Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered to the addresses set forth below, or pursuant to such other instructions as may be
designated in writing by the party to receive such notice: 
  
 if
to Marriott, to: 
  
 Marriott International, Inc. 
 10400 Fernwood Road 
 Bethesda, MD 20817

  
 Attention: Michael E. Dearing and Jeffrey Holdaway

 Facsimile: 301-380-6727 
  
 with copies (which shall not constitute notice) to: 
  
 Venable LLP 
 1800 Mercantile Bank and Trust
Building 
 2 Hopkins Plaza 
 Baltimore, MD 21201 
  
 Attention: Jan K. Guben

 Facsimile: 410-244-7742 
  
 if the Purchaser, to: 
  
 Sunstone Hotel Investors, Inc. 
 903 Calle
Amanecer, Suite 100 
 San Clemente, CA 92673 
  
 Attention: Gary A. Stougaard 
 Facsimile:
949-369-4110 
  

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 with a copy (which shall not constitute notice) to: 
  
 Squire, Sanders & Dempsey, L.L.P. 
 Two Renaissance Square 
 40 North Central
Avenue, Suite 2700 
 Phoenix, AZ 85004 
  
 Attention: Richard F. Ross 
 Facsimile:
602-253-8129 
  
 Section 13.5 Interpretation. When a
reference is made in this Agreement to an Article, Section, Schedule or Exhibit such reference shall be to an Article, Section, Schedule or Exhibit of this Agreement unless otherwise indicated. The table of contents and headings contained in this
Agreement or in any Exhibit are for convenience of reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. All disclosures made on every Schedule to this Agreement shall be deemed made for all
Schedules attached to this Agreement. All words used in this Agreement will be construed to be of such gender or number as the circumstances require. Any capitalized terms used in any Schedule or Exhibit but not otherwise defined therein shall have
the meaning as defined in this Agreement. All Schedules and Exhibits attached hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth herein. The word “including” and words of similar
import when used in this Agreement will mean “including, without limitation,” unless otherwise specified. This Agreement and the Ancillary Agreements shall be construed without regard to any presumption or rule requiring construction or
interpretation against the party drafting or causing any instrument to be drafted. Whenever in this Agreement Marriott undertakes to cause CTF to take action or to deliver any material to Purchaser, the taking of such action or delivery by Marriott
shall be deemed full performance as to such action or delivery as is required under this Agreement. 
  
 Section 13.6 Restriction on Acquisitions. Purchaser agrees that for one (1) year from termination of this Agreement neither Purchaser nor
any persons or entity controlled by Purchaser shall consummate, negotiate, offer, solicit offers, discuss, or arrange, directly or indirectly, the acquisition of any hotel which is the subject of the purchase and sale described in the CTF Agreement;
provided, however, Purchaser may discuss and negotiate with the current partner of Techworld for the acquisition of his interest in Techworld, and with him, the acquisition of the CTF interest in Techworld. 
  
 Section 13.7 Entire Agreement. This Agreement and the Ancillary
Agreements, Exhibits, Schedules and other agreements and instruments delivered in connection herewith constitute the entire agreement, and supersede all prior written agreements, arrangements, communications and understandings and all prior and
contemporaneous oral agreements, arrangements, communications and understandings among the parties with respect to the subject matter of this Agreement. Furthermore, to the extent this Agreement or Ancillary Agreements conflict with, or provide for
remedies different from, any prior agreements between Marriott and the Purchaser, this Agreement and the Ancillary Agreements shall control. Neither this Agreement nor any Ancillary Agreement shall be deemed to contain or imply any restriction,
covenant, representation, 

  

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warranty, agreement or undertaking of any party with respect to the transactions contemplated hereby or thereby other than those expressly set forth herein
or therein or in any document required to be delivered hereunder or thereunder, and none shall be deemed to exist or be inferred with respect to the subject matter hereof. 
  
 Section 13.8 No Third-Party Beneficiaries. This Agreement shall be binding upon and inure solely to the
benefit of each of the parties and their respective successors and assigns, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person including without limitation, CTF, any legal or equitable right,
benefit or remedy of any nature under or by reason of this Agreement, except as provided in Article 10. 
  
 Section 13.9 Governing Law. This Agreement and all disputes or controversies arising out of or relating to this Agreement or the
transactions contemplated hereby shall be governed by, and construed in accordance with, the internal laws of the State of New York, without regard to the laws of any other jurisdiction that might be applied because of the conflicts of laws
principles of the State of New York other than Section 5-1401 of the New York General Obligations Law. 
  
 Section 13.10 Submission to Jurisdiction. Each of the parties irrevocably agrees that any legal action or proceeding arising out of or
relating to this Agreement or for recognition and enforcement of any judgment in respect hereof brought by the other party or its successors or assigns may be brought and determined in any New York State or federal court sitting in the Borough of
Manhattan in The City of New York (or, if such court lacks subject matter jurisdiction, in any appropriate New York State or federal court), and each of the parties hereby irrevocably submits to the exclusive jurisdiction of the aforesaid courts for
itself and with respect to its property, generally and unconditionally, with regard to any such action or proceeding arising out of or relating to this Agreement and the transactions contemplated hereby. Each of the parties further agrees to accept
service of process in any manner permitted by such courts. Each of the parties hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any action or proceeding arising
out of or relating to this Agreement or the transactions contemplated hereby, (a) any claim that it is not personally subject to the jurisdiction of the above-named courts for any reason other than the failure lawfully to serve process, (b) that it
or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of
judgment or otherwise) and (c) to the fullest extent permitted by law, that (i) the suit, action or proceeding in any such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper or (iii) this
Agreement, or the subject matter hereof, may not be enforced in or by such courts. 
  
 Section 13.11 Personal Liability. This Agreement shall not create or be deemed to create or permit any personal liability or obligation on the part of any direct or indirect stockholder of Marriott or
the Purchaser or any officer, director, employee, Representative or investor of either party hereto. 
  

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 Section 13.12 Assignment; Successors. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement may be assigned or delegated, in whole or in part, by operation of law or otherwise, by either party without the prior written consent of the other party, and any such assignment without such prior
written consent shall be null and void; provided, however, that Purchaser may assign this Agreement to any of its Affiliates without the prior consent of Marriott and; provided further, that Marriott may assign any of its
rights under this Agreement to one or more of its Affiliates without the consent of the Purchaser and; provided still further, that no assignment shall limit the assignor’s obligations hereunder. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns. 
  
 Section 13.13 No Brokers. The parties hereto represent and warrant to each other that neither has dealt with any broker or intermediary in
connection with the Transaction. Marriott and Purchaser do hereby indemnify and hold harmless the other from and against any claims by any brokers with whom the indemnifying party may have dealt or is alleged to have dealt in connection with the
Transaction. 
  
 Section 13.14 Severability.
Whenever possible, each provision or portion of any provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable Law, but if any provision or portion of any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable Law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or portion of any provision in such jurisdiction, and this
Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained herein. 
  
 Section 13.15 Counterparts. This Agreement may be executed in
two or more counterparts, all of which shall be considered one and the same instrument and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party. 
  
 Section 13.16 Facsimile Signature. This Agreement may be
executed by facsimile signature and a facsimile signature shall constitute an original for all purposes. 
  
 [The remainder of this page is intentionally left blank.] 
  

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 IN WITNESS WHEREOF, Marriott and the Purchaser have caused this Agreement to be executed as of the date
first written above by their respective officers thereunto duly authorized. 
  

					
	 MARRIOTT INTERNATIONAL, INC.

		
	By:	 	      /s/ Michael E. Dearing
	 	 	 Name:
	 	MICHAEL E. DEARING
	 	 	 Title:
	 	Executive Vice President
	
	 SUNSTONE HOTEL INVESTORS, INC.

		
	By:	 	      /s/ Robert A. Alter
	 	 	 Name:
	 	ROBERT A. ALTER
	 	 	 Title:
	 	Chief Executive Officer

  

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