Document:

Co-Promotion and Marketing Services Agreement

 EXECUTION COPY 
 EXHIBIT 10.1 
 CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF 
 THIS DOCUMENT HAVE BEEN REDACTED AND HAVE BEEN FILED 
 SEPARATELY WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION 
 COPROMOTION AND MARKETING SERVICES
AGREEMENT 
 by and between 
 VALERA PHARMACEUTICALS, INC. 
 and 
 INDEVUS PHARMACEUTICALS, INC. 

 THIS COPROMOTION AND MARKETING SERVICES AGREEMENT (the “Agreement”) is made as of
December 11, 2006 (“Effective Date”) by and between VALERA PHARMACEUTICALS, INC., a corporation organized and existing under the laws of the State of Delaware and having its principal office at 7 Clarke Drive,
Cranbury, NJ 08512 (“Valera”) and INDEVUS PHARMACEUTICALS, INC., a corporation organized and existing under the laws of the State of Delaware and having its principal office at 33 Hayden Avenue, Lexington, MA
02421(“Indevus”). 
 W I T N E S S E T H: 
 WHEREAS, the Parties desire that Indevus engage in the Promotion (as hereinafter defined) of VANTAS (as hereinafter defined) in the Territory (as
hereinafter defined) for a certain period of time and to coordinate Indevus’ activities with those of Valera, subject to the terms and conditions of this Agreement; 
 NOW, THEREFORE, in consideration of the foregoing statements and the mutual agreements and covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereby agree as follows: 
 ARTICLE 1 
 DEFINITIONS 
 Unless specifically set forth to the contrary herein, the
following terms, where used in the singular or plural, shall have the respective meanings set forth below: 
 1.1 “Act” means
the United States Food, Drug, and Cosmetic Act of 1938, as amended, and the rules and regulations promulgated thereunder, or any successor act, as the same shall be in effect from time to time. 
 1.2 “Adverse Experience” or “AE(s)” means adverse drug experiences, as defined by 21 CFR Section 314.80, relating
to a Product. 
 1.3 “Affiliate” means (i) any corporation or business entity of which more than fifty percent
(50%) of the securities or other ownership interests representing the equity, the voting stock or general partnership interest are owned, controlled or held, directly or indirectly, by a Party; or (ii) any corporation or business entity
which, directly or indirectly, owns, controls or holds more than fifty percent (50%) (or the maximum ownership interest permitted by law) of the securities or other ownership interests representing the equity, the voting stock or, if
applicable, the general partnership interest, of a Party. 
 1.4 “Business Day” means any day that is not a Saturday or a
Sunday or a day on which the New York Stock Exchange is closed. 
 1.5 “Calendar Quarter” means each of the three month
periods ending March 31, June 30, September 30 and December 31, provided that the first Calendar Quarter shall commence as of the Detail Commencement Date and end on March 31, 2007. 

 1.6 “Call” means a contact between a sales representative of a Party and a Detail Target
during which a Detail is made to the Detail Target. 
 1.7 “CFR” means the United States Code of Federal Regulations.

 1.8 “Claims” means any suits, claims, actions, demands, complaints, lawsuits or other proceedings that are brought by any
Third Party, including without limitation product liability claims and claims seeking to recover for personal injury or death that is alleged to have been caused, in whole or in part, by a Product regardless of legal theory. 
 1.9 “Co-promotion Option” shall have the meaning set forth in Section 2.2(a). 
 1.10 “Current Good Manufacturing Practices” or “GMP” or “cGMP” means the current good manufacturing
practice and standards as provided for (and as amended or updated from time to time) in applicable ICH Harmonised Tripartite Guidelines and as defined in Parts 210 and 211 of Title 21 of the CFR, as may be amended from time to time, or any
successors thereto. 
 1.11 “Committee” means the committee described in Section 3.1. 
 1.12 “Deficient Half Year” means any Half Year during the Term in which the total number of Units sold in such Half Year is greater than
the sum of the Quarterly Baseline Units applicable to the two Calendar Quarters comprising such Half Year but less than the Minimum Incremental Units applicable to such Half Year; provided, however, that in no event shall any Half Year be
deemed a Deficient Half Year if during any Calendar Quarter included in such Half Year either (a) Valera did not satisfy its obligation to provide the average number of representatives Detailing VANTAS specified in Section 4.2(b)(i), or
(b) there were any shortages of Finished Product. 
 1.13 “Detail” means a Call during which relevant characteristics
of VANTAS are described by the sales representative using, if necessary or desirable, the Promotional Materials. When used as a verb, “Detail” shall mean to engage in a Detail. 
 1.14 “Detail Commencement Date” means the date that Valera receives written notice from Indevus indicating that the first Call has been
made by Indevus’ sales representatives under the terms of this Agreement. 
 1.15 “Detail Targets” means all
office-based physicians and other health care professionals in the Territory that influence the use of LHRH agonists within a urologist office. 
 1.16 “FDA” means the United States Food and Drug Administration and any successor agency having substantially the same functions. 
 1.17 “Finished Product” means the formulation of VANTAS described in the specifications included in the NDA for VANTAS (the “VANTAS Specifications”) and packaged and labeled and in a
form ready for distribution in the Territory. 
 1.18 “Forecast(s)” has the meaning set forth in Section 3.1(b)(viii).

  

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 1.19 “Half Year” means each of the six-month periods during the Term ending on
June 30 and December 31, provided that the first Half Year shall commence as of the Detail Commencement Date and end on June 30, 2007. 
 1.20 “IND” means an Investigational New Drug application, as described in 21 C.F.R. Section 312.23, including all supplements and amendments thereto. 
 1.21 “Indevus Trademark” means the Indevus® trademark and logo, which Indevus has registered in the Patent Office, together with all related domain names and other common law trademark
rights related thereto. 
 1.22 “Losses” means any and all damages, awards, deficiencies, settlement amounts, defaults,
assessments, fines, dues, penalties (including penalties imposed by any governmental authority), costs, fees, liabilities, obligations, taxes, liens, losses, and expenses (including court costs, interest and reasonable fees of attorneys, accountants
and other experts) awarded or otherwise paid or payable to Third Parties. 
 1.23 “Minimum Incremental Units” means,
(a) for each Half Year during the Term other than the first Half Year, the applicable number of Units in excess of [*] Units, and (b) for the first Half Year of the Term, the applicable number of Units in excess of [*] Units,
in each case as set forth on Schedule 1.23. 
 1.24 “NDA” means a new drug application as defined in the Act and
applicable regulations promulgated thereunder, as amended from time to time. 
 1.25 “Net Sales” means the aggregate gross
amount invoiced for all sales of VANTAS to Third Parties in the Territory during the Term by Valera, its Affiliates, and sublicensees commencing on the Detail Commencement Date, less the following deductions actually allowed or taken and not in
excess of industry standard amounts and determined in accordance with GAAP: 
 (a) credits or allowances actually granted for damaged or
spoiled Product, returns, recalls or rejections of Product, and retroactive price reductions; 
 (b) normal and customary trade, cash and
quantity discounts, allowances and credits actually allowed; 
 (c) sales, value added, excise or similar taxes paid or allowed, or other
governmental charges imposed upon the importation, use or sale of Product in the Territory; 
 (d) legally allowed chargebacks, rebates or
similar payments actually granted to customers, including, but not limited to, managed health care organizations, wholesalers, distributors, buying groups, retailers, health care insurance carriers, pharmacy benefit management companies, health
maintenance organizations, Specialty Pharmacy Accounts or other institutions or health care organizations or to federal, state/provincial, local and other governments, their agencies and purchasers and reimbursers; and 
 (e) credit card processing charges and fees, freight, postage, shipping and insurance charges relating to delivery of VANTAS. 
  

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 Sales or other transfers between Valera and its Affiliates and/or sublicensees shall be excluded from the
computation of Net Sales and no payments will be payable on such sales or transfers except where such Affiliates or sublicensees are end users, but Net Sales shall include the subsequent sales to Third Parties by such Affiliates or sublicensees.

 1.26 “Option Period” shall have the meaning set forth in Section 2.2(a). 
 1.27 “Party” means Indevus or Valera. 
 1.28 “Patent Office” means the United States Patent and Trademark Office. 
 1.29
“PDMA” means the United States Prescription Drug Marketing Act of 1987, as amended, or any successor act thereto, and the regulations promulgated thereunder from time to time. 
 1.30 “Product” means VANTAS. 
 1.31 “Product Label(ing)” shall have the same meaning as defined in the Act and as interpreted by the FDA. 
 1.32
“Projected Detail Commencement Date” means [*]. 
 1.33 “Promotion” means those activities normally
undertaken by a pharmaceutical company to implement promotion plans and strategies aimed at encouraging the appropriate use of a particular prescription pharmaceutical product under a common trademark, up to the point of offering Product for sale.
When used as a verb, “Promote” shall mean to engage in such activities. 
 1.34 “Promotional Materials” means all
written, printed or graphic material provided by Valera, intended for use by sales representatives during a Call, including visual aids, file cards, premium items, clinical studies, reprints, drug information updates and any other promotional
support items that Valera, following consultation with the Committee, deems necessary or appropriate in connection with the Promotion of Product. Promotional Materials shall include materials describing FDA-approved indicated uses, safety,
effectiveness, contraindications, side effects, warnings and other relevant characteristics of a Product. Promotional Materials shall not include any Product packaging or Product Labeling. 
 1.35 “Promotion Budget” means the budgets setting forth Promotion Expenses relating to the Promotion of products, as described in
Section 3.1(b). 
 1.36 “Promotion Expenses” means all actual out-of-pocket expenses incurred (i.e., paid or accrued)
to a Third Party by or on behalf of Valera in connection with selling, marketing and Promotion of a product in the Territory, including the following: 
  

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 (a) marketing, advertising, Promoting, and educational expenses, including speakers’ programs,
medical education programs and symposia, relationships with opinion leaders and professional societies, public relations and market research; 
 (b) training and communications materials and detail and visual aids; 
 (c) implementing marketing programs; and 
 (d) preparation, storage and distribution of Promotional Materials; 
 provided, however, that Promotion Expenses shall specifically exclude salaries and other internal overhead and/or compensation paid to either Party’s employees, including their respective sales forces. 
 1.37 “Promotion Plan” means a plan established by Valera, with consultation of the Committee, relating to the Promotion of a Product, as
contemplated by Section 3.1(b). 
 1.38 “Proprietary Information” means any and all scientific, clinical, regulatory,
sales, marketing, financial and commercial information or data, customer-related materials, know-how, concepts, ideas, trade secrets, expertise, and all of the foregoing regardless of whether communicated in writing, orally or by any other means,
which is owned and under the protection of one Party and is provided by that Party to the other Party in connection with this Agreement. 
 1.39 “Quarterly Payment” means the payment made by Valera to Indevus of its co-promotion fees owed at the end of each Calendar Quarter, in accordance with the terms of Section 5.2(a). 
 1.40 “Quarterly Baseline Units” means, (a) for each Calendar Quarter of the Term other than the first Calendar Quarter of the Term,
[*]; and (b) for the first Calendar Quarter of the Term, [*]. 
 1.41 “SEC” means the Securities and
Exchange Commission and any successor agency having substantially the same functions. 
 1.42 “Specialty Pharmacy Accounts”
means those customers of Valera that, as a pharmacy class, operate at any time during the Term according to payer-specific contracts or product-specific distribution and pharmacy programs. “Specialty Pharmacy” refers to one of a
specific group of pharmacies that either distribute specialty medications, based upon a patient-specific prescription, directly to patients, or to physicians for administration. Valera’s Specialty Pharmacy Accounts as of the Effective Date are
listed on Schedule 1.42. 
 1.43 “Supprelin-LA” means Valera’s hydrogel implant product designed to deliver
histrelin continuously for 12 months to treat central precocious puberty, for which an NDA has been filed with the FDA. 
 1.44“Term” shall have the meaning set forth in Section 12.1. 
  

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 1.45 “Territory” means the United States of America, including the District of Columbia,
and its territories and possessions. 
 1.46 “Third Party(ies)” means a person or entity who or which is neither a Party nor
an Affiliate of a Party. 
 1.47 “Unit” means one 12-month VANTAS implant. 
 1.48 “Valera Patents” means all patents and patent applications in the Territory that are or become during the Term owned or controlled
by Valera, to the extent necessary or useful for the manufacture, Promotion, use, sale and/or offer for sale of any Product, including any patents, patent applications, certificates of invention, or applications for certificates of invention and any
supplemental protection certificates, together with any extensions, registrations, confirmations, reissues, substitutions, divisions, continuations or continuations-in-part, reexaminations or renewals thereof. 
 1.49 “VALSTAR” means the VALSTAR brand of Valrubicin, intended for the treatment of certain bladder cancer. 
 1.50 “VANTAS” means Valera’s hydrogel implant product, marketed under the brand name “VANTAS®”, designed to deliver histrelin continuously for 12 months and indicated
for the palliative treatment of advanced prostate cancer. VANTAS is also concurrently referred to herein as the “Product.” 
 1.51 “VANTAS Trademark” means the VANTAS® trademark, which Valera has registered in the Patent Office, together with all related domain names and other common law trademark rights related thereto. 
 1.52 “Year” means each consecutive twelve-month period starting January 1 and ending December 31, provided that the first Year
of the Term shall start on the Detail Commencement Date and end on December 31, 2007. 
 Where words and phrases are used herein in the
singular, such usage is intended to include the plural forms where appropriate to the context, and vice versa. The words “including”, “includes” and “such as” are used in their non-limiting sense and have the same
meaning as “including without limitation” and “including but not limited to”. References to Articles, Sections, subsections, and clauses are to the same with all their subparts as they appear in this Agreement. “Herein”
means anywhere in this Agreement. “Hereunder” and “hereto” means under or pursuant to any provision of this Agreement. 
 ARTICLE 2 
 GRANT OF RIGHTS 
 2.1 Grant of Co-Promotion Right. Subject to the terms and conditions of this Agreement, Valera hereby grants to Indevus the co-exclusive right with Valera during the Term to Promote VANTAS under the VANTAS
Trademark in the Territory, subject to the terms and conditions of this Agreement. During the Term, neither Valera nor any Affiliate of Valera shall sublicense or otherwise grant any Third Party any rights to Promote, market, sell, or offer for sale
VANTAS in the Territory without Indevus’ prior written consent. 
  

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 2.2 Grant of Option to Negotiate Co-Promotion Right.  
 (a) Subject to the terms and conditions of this Agreement, Indevus hereby grants Valera an option (the “Co-promotion Option”),
exercisable at any time up to and through [*], or such other date as may be agreed to in writing by the Parties (the “Option Period”), to elect to enter into negotiations with Indevus to grant Indevus a co-exclusive right
with Valera to Promote VALSTAR and/or Supprelin-LA during the Term. The Copromotion Option shall constitute a right but not an obligation of Valera. In the event Valera elects to exercise the Co-promotion Option, it shall send a written notice of
such election and of Valera’s proposed terms of such co-promotion arrangement to Indevus, and the Parties shall enter into good faith negotiations to enter into an additional co-promotion agreement, containing such further commercially
reasonable and customary representations, warranties, covenants and agreements, satisfactory in form and substance to the Parties and their legal advisors, as are necessary or appropriate for transactions of this type and for similar types of
products. 
 (b) If as of the expiration of the Option Period: (i) Indevus has not received the notice and proposed terms from Valera, or
(ii) the Parties have not entered into any additional co-promotion agreement, each as contemplated by paragraph (a) above, the Co-promotion Option shall expire and terminate and neither Party shall have any further rights or obligations
with respect thereto. 
 2.3 Access to Information. Subject to the terms and conditions of this Agreement, Valera shall cooperate in
good faith to provide Indevus access to and reasonable assistance with all Valera Proprietary Information as may be required for Indevus to exercise the rights granted and to perform its obligations hereunder. 
 ARTICLE 3 
 GOVERNANCE

 3.1 Committee. 
 (a) Members. The Parties shall establish a committee comprised of four (4) individuals, two (2) of which shall be appointed by Indevus and two (2) of which shall be appointed by Valera (the
“Committee”). The initial members of the Committee are set forth on Schedule 3.1. Either Party may replace any or all of its representatives on the Committee at any time upon written notice to the other. A Party may designate
a substitute to temporarily attend and perform the functions of such Party’s designated representative at any meeting of the Committee. The Chairman of the Committee shall be a representative of and appointed by [*] and the secretary of
the Committee shall be a representative of and appointed by [*]. 
 (b) Role and Responsibilities. The Committee will be used as
the forum during the Term for the Parties to discuss Promotion strategy, including pre-launch, launch, post-launch and ongoing Promotional activities. The Committee shall address these activities (i) during the Option Period, with respect
VANTAS, Valstar and Supprelin-LA, and (ii) after expiration of the Option Period, solely with respect to VANTAS. Accordingly, references in this 

  

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Section 3.1(b) to ‘products’ shall mean the applicable product(s) as set forth in the preceding sentence. In particular, subject to the
foregoing and the other terms and conditions of this Agreement, the Committee shall perform the following functions: 
 (i) Discuss and
advise Valera in connection with the development of Promotion Plans and Promotion Budgets (including allocation of Promotion Expenses within the Promotion Budget on a quarterly basis for training, Promotional Materials, visual aids and other
Promotional activities intended to support the Promotion and Detailing of such Product) for VANTAS, and any material amendments or modifications to any Promotion Plan or Promotion Budget, provided, however, that the Promotion Budget for
VANTAS shall be not less than (a) [*] for the first Half Year, as allocated to the categories set forth on the initial Promotion Budget for VANTAS; and (b) [*] for each Year thereafter. 
 (ii) Discuss the development of Promotion Plans and Promotion Budgets for each of VALSTAR and Supprelin-LA, provided, however, that such Promotion
Budgets for the Option Period shall be consistent with the levels of promotion reasonably expected to be incurred by a company comparable in size to Valera and in connection with the launch of products with similar market potentials. 
 (iii) Discuss the actual results of the Promotion of products in the Territory as compared to the Promotion Plan; 
 (iv) Discuss the state of the markets for products in the Territory and opportunities and issues concerning the Promotion of products in the Territory,
including consideration of marketing, promotional and managed care strategy, marketing research plans, labeling, product positioning and product profile issues, to determine the kind of marketing and selling efforts that are appropriate; 

(v) Discuss the commercial terms and conditions with respect to the sale and distribution of the products; 
 (vi) Review data and reports assembled by Valera from time to time with respect to the Promotion of VANTAS in the Territory; 
 (vii) Review Promotional Materials and promotional activities to be used by the Parties in the Promotion of products, including the quantity, method of
distribution of, and guidelines for the use of Promotional Materials or educational materials and literature related to products; 
 (viii)
Collaborate to develop annual and quarterly forecasts (each, a “Forecast”) for sales of the products; and 
 (ix) Have such
other responsibilities and address any other matters delegated to the Committee under this Agreement or as may be mutually agreed upon in writing by the Parties from time to time. 
 (c) Primary Contact. Indevus and Valera each shall appoint a person (a “Primary Contact”) to be the primary contact between the
Parties with respect to the Promotion 

  

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Plan and to coordinate related correspondence between the Parties. The initial Primary Contact is set forth on Schedule 3.1. Each Party shall notify
the other in writing as soon as practicable upon changing its initial Primary Contact appointment. The Primary Contact of each Party will be one of its two representatives on the Committee. 
 3.2 Meetings. The chairman of the Committee shall call meetings as reasonably requested during the Term by one of the Parties upon not less than
twenty-four hours notice to each member of the Committee; provided, however, that (a) the agenda may be submitted by either Party, and (b) the Committee shall meet on at least a monthly basis during the period commencing on
the Effective Date and expiring at the end of the first Year of the Term (with the first meeting to be held not later than five (5) Business Days after the Effective Date) and thereafter on at least a quarterly basis through the end of the
Term, unless the Parties agree otherwise. Meetings may be held in person, by telephone, or by video conference call and, except as set forth herein, the location of each meeting shall alternate between the Parties’ selected locations in New
Jersey or Massachusetts or such other location as may be mutually agreed upon by the Parties. On advance written notice to the other Party, additional participants may be invited by any representative to attend meetings where appropriate and to
address any matters that are within the responsibilities and functions of the Committee. Each Party shall be responsible for all travel and related costs and expenses for its members and other representatives to participate or attend committee
meetings. Any Proprietary Information disclosed in any meeting of the Committee by a Party shall remain Proprietary Information of such Party. 
 3.3 Minutes of Committee Meetings. Minutes of the each committee meeting shall be transcribed and issued by the secretary at least ten (10) Business Days prior to the date of the next scheduled meeting of such committee and
shall be approved as the first order of business at the immediately succeeding meeting of such committee. Such minutes shall include only key discussion points and decisions made and provide a list of any identified issues yet to be resolved.

 ARTICLE 4 
 PROMOTION
AND MARKETING SERVICES ACTIVITIES 
 4.1 General. Each Party will diligently Promote VANTAS in the Territory during the Term,
subject to the terms and conditions of this Agreement and in accordance with its business, legal, medical and scientific judgment. 
 4.2 The
following shall apply to the Promotion of VANTAS under this Agreement: 
 (a) Indevus Obligations. 
 (i) During the Term, Indevus will provide a professional fully-trained sales force to support Indevus’ obligations under this Agreement. During each
Calendar Quarter during the Term (commencing as of the Detail Commencement Date), The Indevus Sales Force shall [*] representatives Detailing VANTAS to Detail Targets. The Indevus sales force shall remain under the direct and exclusive
authority, supervision and control of Indevus at all times during the Term. 
 (ii) During the Term, the following percentages of the annual
bonus 
  

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target (the payment of which shall be the sole responsibility of Indevus) for the Indevus sales force Detailing VANTAS will be directly related to
VANTAS: (i) for the first Year, at least [*] and (ii) for each subsequent Year, at least [*] 
 (iii) During
the Term, Indevus shall fund “lunch and learn” programs for the representatives Detailing VANTAS, to be held at the offices of Detail Targets, up to a maximum of [*] (assuming a two Year Term, and subject to pro-rata adjustment for
any portion of the Term that is less than two Years), which programs shall be excluded from the Promotion Budget and shall be paid for by Indevus. 
 (b) Valera Obligations. In addition to the services and other obligations of VALERA set forth herein, Valera shall have the following obligations: 
 (i) During the Term, Valera will provide a professional fully-trained sales force to support Valera’s obligations under this Agreement. During each Calendar Quarter of the Term (commencing as of the Detail
Commencement Date), The Valera Sales Force shall [*] representatives Detailing VANTAS to Detail Targets. The Valera sales force shall remain under the direct and exclusive authority, supervision and control of Valera at all times during the
Term. 
 (ii) During the first Half Year of the Term, at least [*] of the annual bonus target (the payment of which shall be the sole
responsibility of Valera) for the Valera sales force Detailing VANTAS will be directly related to VANTAS. 
 (iii) Valera shall be
responsible for payment of and shall pay all Promotion Expenses in accordance with the then applicable Promotion Budget. Notwithstanding the foregoing, in the event Valera does not incur Promotion Expenses at least equal to the amount set forth in
such Promotion Budget, following written notice thereof and Valera’s failure to incur the appropriate additional expenses to meet the applicable Promotion Budget within ten (10) Business Days thereafter, Indevus shall have the right, but
not the obligation, to incur any or all such Promotion Expenses (up to the budgeted amount) on behalf of Valera and, in such event, Valera shall reimburse Indevus for all such Promotion Expenses (up to the budgeted amount) incurred by Indevus on
behalf of Valera within thirty (30) days of receiving an invoice therefor. 
 4.3 Failure to Meet Minimum Incremental Units. In
the event of a Deficient Half Year, the Quarterly Payment for the Calendar Quarter ending concurrently with such Deficient Half Year shall be reduced by an amount equal to the product of (x), (y) and (z), where, 
 (x) =the difference between (i) the applicable Minimum Incremental Units for such Half Year, and (ii) the actual number of Units
in excess of [*] Units ([*] Units for the first Half Year) that are sold during such Half Year; 
 (y) =average
net selling price per Unit during such Half Year; and 
 (z) =[*]  
 If this calculation results in a negative amount, such amount shall be carried forward to reduce subsequent Quarterly Payments until such amount is depleted in its
entirety; provided, however, in the event a negative carry forward remains upon the expiration or termination of this Agreement, Indevus will not owe any amount to Valera. 
  

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 4.4 Promotional Materials. 
 (a) Valera shall provide Indevus with Promotional Materials updated in accordance with Section 4.4(c) and training materials for the performance and
supervision of Calls, by not later January 8, 2007, which the Parties agree is necessary in order for Indevus to meet the Projected Detail Commencement Date. Such Promotional Materials shall be provided without cost to Indevus, and the cost
shall be part of the Annual Promotion Budget. Valera shall be solely responsible for the preparation, content and method of distribution of the Promotional Materials. Indevus’ representatives shall use only the Promotional Materials provided by
Valera in conducting Calls hereunder and shall not develop, create, or use any other promotional material or literature, or materials or other promotional materials of any kind, for the Detailing of VANTAS. Valera will coordinate with Indevus to
replenish supplies of Promotional Material when depleted on a timely basis. Valera shall advise Indevus promptly of any inaccuracy or incompleteness of the Promotional Materials, and upon such notice Indevus will advise its representatives to cease
the use of any portion or all of the Promotional Materials so identified by Valera, and either destroy or return such Promotional Materials to Valera, at Valera’s instruction and expense and Valera shall furnish Indevus with corrected or
complete Promotional Materials as soon as practicable thereafter. Valera shall be responsible for all submissions and interactions with the FDA regarding approval of all Promotional Materials that require FDA approval. 
 (b) Each of Valera and Indevus shall retain all intellectual property rights, including without limitation, all patents, copyrights and trademarks, to
such Party’s respective existing programs and materials in all formats (print, video, audio, digital, computer, etc.) regarding sales training, patient education and disease management programs owned or controlled by such Party at the time such
materials are shared with the other Party, as well as any modifications of such programs each may develop in the future which are not specific to VANTAS. 
 (c) Except as otherwise prohibited by applicable law and as otherwise set forth herein, all Promotional Materials used during the Term, including journal advertising and sales aids (excluding packaging and FDA
approved Product Labeling) shall display the names and logos of Valera and Indevus. Except as otherwise prohibited by applicable law, and further to the extent reasonably practicable, all Promotional Materials will indicate that VANTAS is
manufactured and sold by Valera, and promoted by Indevus and Valera, and that the VANTAS Trademark is owned by Valera, as directed by Valera. Notwithstanding the foregoing, the Parties acknowledge and agree that, to the extent Valera has backstock
of existing Promotional Materials, Valera shall be permitted to utilize such backstock, and to provide such backstock to Indevus for use in connection with its promotional efforts, prior to the development and distribution of new Promotional
Materials displaying the names and logos of both Valera and Indevus. All applicable logos shall, subject to compliance with applicable law, during the Term, be prominently displayed in accordance with each Party’s specifications and be of
similar size to each other on all such materials. Each Party hereby consents to such use of its name and logo, provided that the other Party adheres to the agreed-on format and language, and provided further that neither Party will acquire any
rights in the other Party’s name or logo. After expiration of the Term or termination of this Agreement, neither Party will include the other’s name or logo on any Promotional Materials, except as required by law. 
  

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 4.5 Training. 
 (a) Each Party shall have the responsibility for training such Party’s sales force with respect to Promotion of VANTAS in the Territory, and each Party will be solely responsible for all costs associated with
training its respective sales force. During the Term, Valera shall provide Indevus with such assistance as is reasonably requested by Indevus and as mutually agreed to in connection with the training programs to help ensure that the training of
Indevus’ sales force will be consistent with the training provided to Valera’s sales force who Detail VANTAS in the Territory. 
 (b) During the Term, Valera shall provide Indevus with sufficient quantities of training materials relating to VANTAS in order to meet the Projected Detail Commencement Date, including an up-to-date programmed learning unit for VANTAS for
“at home” study. Such materials shall be provided to Indevus free of charge for distribution to the Indevus sales force, and all costs associated with the preparation and distribution of training materials shall be deemed Promotion Expense
and the cost counted toward the Annual Promotion Budget. 
 (c) All expenses incurred by either Party associated with any launch meeting or
any training meetings for VANTAS for such Party’s sales force during the Term shall be the responsibility of the Party incurring such cost. Promptly after the Effective Date, Valera and Indevus shall agree on a mutually convenient schedule
which will enable the training of the Indevus sales force in sufficient time to meet the Projected Detail Commencement Date. 
 (d) In
addition to the training referred to above, during the Term, each Party shall conduct separate training programs for their respective sales force with respect to the “Medicare and Medicaid Anti-Kickback Statute”, set forth at 42 U.S.C.
§1320(a)-7b(b) and the prohibited acts set forth thereunder, PDMA regulations, and other applicable guidances relating to promotion of Product. Upon completion of said additional training, each sales force member shall be required to sign a
certificate acknowledging their receipt of such training and certifying and acknowledging their understanding of said statutes and the specified acts prohibited thereunder. 
 4.6 Other Marketing and Promotion Services. 
 (a) Valera shall provide such other Promotional activities, as applicable, which are an integral part of the implementation of Promotion plans to support the activities normally undertaken by a professional sales representative of a
pharmaceutical company comparable in size to Indevus and Valera to Promote a particular prescription pharmaceutical product aimed at encouraging the appropriate use of such product by a health care professional with actual prescribing authority or
influence or, in the case of VALSTAR and Supprelin-LA, to prepare for such activities. Valera shall incur Promotional Expenses up to the amount set forth in the applicable Promotion Budgets. Valera shall be responsible for payment on a timely basis
of all Promotion Expenses set forth in the Promotion Budgets in accordance with such budgets. 
  

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 (b) Valera or its Third Party contractor shall provide reasonable order entry, customer service,
reimbursement management, medical affairs (including reports for all Adverse Experiences as set forth in Article 6), medical information, warehousing, physical distribution, invoicing, credit and collections (including maintaining and enforcing the
credit policy applicable to VANTAS), production forecasting and other related facilities and services necessary or desirable for the manufacturing and supply, distribution, marketing, Promotion and sales of VANTAS under this Agreement. Such services
shall include contract administration, including handling wholesaler chargebacks, managed care contracts, federal and state government contracts, rebate contracts, long-term care contracts, performance-based contracts, Specialty Pharmacy contracts
and hospital purchasing contracts. Valera shall book all sales and be exclusively responsible for accepting and filling purchase orders for Product and for processing billing and returns with respect to the Products. 
 (c) Valera will use reasonable efforts to (i) provide Indevus with reasonable access to all medical advisors and consultants and with medical
education and public relations agencies engaged by Valera with respect to the Promotion of VANTAS (collectively, “Product Advisors”); and (ii) allow Indevus to participate in meetings or discussions relating to marketing,
medical education programs, or any other promotional activities relating principally to VANTAS between Valera and any Product Advisor. 
 (d)
In addition to the reports required by Section 5.2(a), Valera shall provide Indevus (i) on a monthly basis, not less than ten (10) days after the end of each month beginning or ending during the Term, (A) a reconciliation of
actual Promotion Expenses incurred to the Promotion Budget; (B) reports of Net Sales, including any deductions from the gross amount invoiced, including Net Sales to Specialty Pharmacy Accounts, for the immediately preceding month; and
(ii) on a weekly basis, the number of Units sold in the Territory, including number of Units sold to Specialty Pharmacy Accounts, for the immediately preceding week, as well as such other reports as may be reasonably requested by Indevus in
connection with the performance of the Parties’ obligations hereunder. 
 4.7 Covenants of the Parties. 
 (a) Valera covenants that during the Term, the Valera sales force shall (i) limit its claims of efficacy and safety for VANTAS to those that are
consistent with approved promotional claims and FDA-approved prescribing information for VANTAS in the Territory; (ii) not add, delete or modify claims of efficacy and safety in the Promotion of VANTAS from those claims of efficacy and safety
that are consistent with the FDA-approved prescribing information; (iii) use the Promotional Materials in accordance with Section 4.4; (iv) Promote VANTAS under this Agreement in accordance with applicable laws; and (v) comply
with the Valera Code of Conduct. 
 (b) Indevus covenants that during the Term, the Indevus sales force shall (i) limit its claims of
efficacy and safety for VANTAS in the Territory to those that are consistent with approved promotional claims and FDA-approved prescribing information for Product in the Territory; (ii) not add, delete or modify claims of efficacy and safety in
the Promotion of VANTAS under this Agreement from those claims of efficacy and safety that are consistent with the FDA-approved prescribing information; (iii) use the Promotional Materials in accordance with Section 4.4; and
(iv) Promote VANTAS under this Agreement in accordance with applicable laws; and (v) comply with the Indevus Code of Conduct. 
  

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 ARTICLE 5 
 PAYMENTS AND STATEMENTS 
 5.1 Co-Promotion Fees. In consideration for Indevus’
performance of its obligations under this Agreement, Valera shall pay Indevus the following co-promotion fees: (a) 13.5% of Net Sales with respect to all Units sold in a Calendar Quarter up to the number of Units constituting the Quarterly
Baseline Units, (b) 30% of Net Sales with respect to any Units sold in such Calendar Quarter equal to or in excess of the Quarterly Baseline Units, and (c) 35% of Net Sales to Specialty Pharmacy Accounts. The foregoing co-promotion fees
shall be payable quarterly in accordance with Section 5.2. 
 5.2 Reports and Payments. 
 (a) Within thirty (30) days after the end of each Calendar Quarter that begins or ends during the Term, Valera shall furnish to Indevus a written
report showing: (i) total Net Sales and Net Sales to Specialty Pharmacy Accounts for such Calendar Quarter and for the Year to date (including a reconciliation to such Net Sales, including a breakdown of all deductions from the gross amount
invoiced to arrive at such Net Sales); (ii) the number of Units sold (including the number of Units sold to Specialty Pharmacy Accounts) during such Calendar Quarter, for the Year to date and, if such Calendar Quarter ends concurrently with the
end of a Half Year, for such Half Year, in each case broken down by zip code of the customer; and (iii) for any Half Year ending concurrently with the end of such Calendar Quarter, whether or not the applicable Minimum Incremental Units have
been achieved for such Half Year and, if such Half Year is a Deficient Half Year, the amount of any shortfall and the calculation of any adjustment to the Quarterly Payment for the second Calendar Quarter of such Half Year, as required by
Section 4.3. No later than fifteen (15) days following delivery of such report to Indevus, Valera shall submit to Indevus payment of the amount payable for the Calendar Quarter covered by such report (the “Quarterly
Payment”). 
 (b) Any change in the amount that would have been payable from Valera to Indevus under this Agreement which results
from any restatements to a prior period’s financial results due to errors, omissions, or any other misstatements, shall be added to or deducted from, as applicable, the amount of the next Quarterly Payment due under this Agreement. 

(c) Valera shall keep and shall require its Affiliates to keep complete and accurate records in sufficient detail to permit accurate determination of
all amounts necessary for calculation and verification of all payment obligations set forth in this Article 5. In the event payments required to be made under this Section 5.2 are not made on or prior to the required payment date, the amount of
the late payment shall bear interest at the Prime Rate plus 2% commencing on the date such payment is due until such date as the payment is made. “Prime Rate” for purposes of Section 5.2 and 5.3 shall mean the prime rate of Citibank,
N.A. in New York, New York as published in the Wall Street Journal computed on a daily basis and shall change when and as the Prime Rate changes. 
  

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 5.3 Audits. Upon no less than five (5) Business Days prior written notice of Indevus, Valera
shall permit an independent certified public accounting firm of recognized standing, selected by Indevus and reasonably acceptable to Valera, to have access during normal business hours to such of the records of Valera to the extent necessary to
verify the accuracy of the reports under Section 5.2 for any Year ending not more than twenty-four (24) months prior to the date of such request. The accounting firm shall disclose to Indevus whether the reports are correct or incorrect,
the specific details concerning any discrepancies and such other information that should properly be contained in a report required under this Agreement. The number of audits conducted of the records of Valera pursuant to this Section 5.3 shall
not exceed one (1) with respect to each Year of the Term or, assuming the Term expires not later than December 31, 2008, two (2) with respect to the entire Term. 
 (a) If such accounting firm concludes that additional amounts were owed by Valera for such Year, Valera shall pay the additional payments, together with
interest at the Prime Rate on the amount of such additional payments, within ten (10) days of the date Indevus delivers to Valera such accounting firm’s written report so concluding. In the event such accounting firm concludes that amounts
were overpaid by Valera during such period, Indevus shall repay Valera the amount of such overpayment, together with interest at the Prime Rate on the amount of such overpayment, within ten (10) days of the date Indevus delivers to Valera such
accounting firm’s written report so concluding. The fees charged by such accounting firm shall be paid by Indevus; provided, however, that if an error in favor of Indevus of more than [*] of the payments due hereunder for
the period being reviewed is discovered, then the fees and expenses of the accounting firm shall be paid by Valera. 
 (b) Upon the expiration
of [*] months following the end of any year for which Valera has made payment in full of amounts payable with respect to such year, and in the absence of negligence or willful misconduct of Valera or a contrary finding by an accounting firm
pursuant to Section 5.3(a), such calculation shall be binding and conclusive upon Valera, and Valera shall be released from any liability or accountability with respect to payments for such year. 
 (c) Each Party shall treat all financial information subject to review under this Section 5.3 in accordance with the confidentiality provisions of
this Agreement. 
 5.4 All calculations herein shall give pro-rata effect to and shall proportionally adjust (by giving effect to the actual
number of days in the applicable Calendar Quarter, Half Year or Year, respectively) (i) for any Calendar Quarter that is shorter than a standard Calendar Quarter, any Half Year that is shorter than a standard Half Year, or any Year that is
shorter than twelve consecutive calendar months, or (ii) as a result of a determination, in accordance with the terms of this Agreement, that the first day of such Calendar Quarter, Half Year, or Year shall be deemed other than the actual first
day of such Calendar Quarter, Half Year or Year, respectively. All payments due under this Agreement shall be payable in United States dollars. 
  

	[*]	CONFIDENTIAL TREATMENT REQUESTED 

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 ARTICLE 6 
 REGULATORY MATTERS 
 6.1 Valera Obligations. 
 (a) Valera shall fulfill and discharge on a timely basis all obligations under applicable laws, rules and regulations as are necessary or customary in
accordance with accepted business practices and legal requirements to maintain the authorization and/or ability to manufacture, finish, package, store and label the Products in each country where they are so manufactured, finished, packaged, stored,
and labeled, and to import, sell, or market Products in the Territory, including, without limitation, the obligations set forth in this Article 6. 
 (b) Valera’s obligations hereunder shall include as reasonably necessary and applicable the maintenance of all regulatory approvals necessary (i) for the manufacture, finishing and labeling of Products in accordance with cGMPs,
(ii) for the importation of Product into the U.S., if applicable, and (iii) for the use and marketing of Products for all approved indications in the U.S., including, without limitation, maintaining such records and filing such reports as
may be required under the provisions of the Act, as well as applicable state and federal law including, without limitation, all Promotional Materials and labeling relating to Products. Valera shall notify Indevus of any filings, notices, and
correspondence received from or made by it with the FDA relating to any Product or that relate to manufacturing issues that may affect any Product and Valera shall promptly provide Indevus with copies of all such filings, notices, and submissions
and of any minutes of any such meetings or telephone conferences and/or discussions between Valera and the FDA. All communications with government agencies concerning any Product shall be the sole responsibility of Valera, provided that
during the Term, Indevus shall (i) provide reasonable cooperation with Valera to the extent deemed reasonably necessary by the Parties to respond to such communications; and (ii) have the right to communicate with the FDA or any
other governmental agency regarding VANTAS if such communication is necessary to comply with the terms of this Agreement or the requirements of any law, governmental order or regulation or if Indevus made a request of such agency to communicate with
Valera instead, and such agency refused such request; provided, however, that Indevus shall not be permitted to communicate with the FDA regarding VANTAS without (i) obtaining the prior written consent of Valera; and
(ii) allowing Valera to accompany Indevus, take part in any such communications and receive copies of all such communications. 
 (c)
Valera’s obligations hereunder shall include obtaining any necessary FDA approvals of any Product Label, FDA-Approved Prescribing Information, package inserts, monographs and packaging, and Promotional Materials used in connection with the
Products. No less than ten (10) days prior to planned submission to the FDA, Valera shall provide Indevus with drafts of submissions that are intended to change or modify the Product Label, FDA-Approved Prescribing Information for, or the
indications of, any Product, or any Promotional Materials. Valera shall also provide Indevus with final copies of such submissions as soon as practicable after filing with the FDA. 
 6.2 Recalls and Other Corrective Action. Valera shall have the right and responsibility to conduct, at its own expense, any recall, market
withdrawals, or other corrective action related to Product in the Territory. At the reasonable request of Valera, Indevus will assist 

  

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Valera in conducting such recall, provided that any and all fully-burdened costs incurred by Indevus shall be reimbursed by Valera. This Section applies only
to the extent that such recalls, withdrawals or corrective actions were caused by some action or omission of Valera. 
 6.3 Adverse
Experiences. 
 (a) The Parties shall use their established operating procedures to report Adverse Experiences to the FDA in accordance
with applicable laws. Such operating procedures shall include any measures necessary for each Party to fully comply with such laws as apply to such Party. In any event, each Party shall notify the other Party within [*] of any Serious Adverse
Experience (as set forth in 21 CFR 314.80). The agreed procedures will be reviewed jointly on a regular basis or when there is a change in regulations governing Adverse Experience reporting. Valera shall be responsible for the timely filing with the
FDA of all Adverse Experience reports, provided, that nothing herein shall be construed as restricting Indevus’ ability to take action that it deems, based upon the advice of counsel, to be required by applicable law. Valera shall promptly
provide to Indevus copies of all such reports, analyses, summaries and all submissions to the FDA or other governmental agency. 
 (b)
Valera’s central safety department will use its existing toll-free phone number for patients, physicians and others to report Adverse Experiences. The costs of such reporting and of all services provided in connection with Adverse Experiences
hereunder shall be borne by Valera. Valera will timely collect information about the Adverse Experiences, initiate and conduct reasonably required investigations, determine if physical or other testing of Product appears to be reasonably required,
determine the nature of the Adverse Experience based on data and reports it has obtained, and issue any reports, analyses, or summaries of its activities as may be required by applicable laws, including, without limitation, preparing and filing with
the FDA on a timely basis such reports as are necessary and appropriate. Copies of all such reports, including reports filed by Valera with the FDA, will be promptly provided to Indevus. 
 6.4 Regulatory Cooperation. During the Term, each Party shall inform the other Party within [*], of its receipt of any information that:
(i) raises any concern regarding the safety or efficacy of Product; (ii) concerns suspected or actual Product tampering or contamination or other similar problems with respect to Product; (iii) is reasonably likely to lead to a recall
or market withdrawal of Product; (iv) concerns any ongoing or potential FDA investigation, inspection, detention, seizure or injunction or other action involving Product; or (v) any circumstance that is reasonably likely to adversely
impact the manufacturing or supply of VANTAS (including the failure of any batch of Finished Product to meet the VANTAS Specifications, whether or not Valera deems such failure likely to impact such supply). 
 6.5 Safety Contacts. All safety related reports and correspondence shall be addressed to: Cynthia Abell, Valera Pharmaceuticals, Inc. (fax number
609-235-3245; telephone number 609-235-3213), or such other safety representative as may be designated by Valera. 
 6.6 Safety
Meetings. A representative of Indevus shall be entitled to attend in person or by telephone conference, and to receive on a timely basis any written minutes of, any internal safety review meetings held by Valera relating to a Product. Valera
shall provide Indevus with reasonable advance notice of the date, time and location of such meetings. Such information shall be confidential. 
  

	[*]	CONFIDENTIAL TREATMENT REQUESTED 

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 6.7 Medical Inquiries. Valera and its Third Party contractors shall be responsible for responding
to medical questions or inquiries from members of the medical and paramedical professions and consumers regarding the VANTAS, including the distribution of standard medical information letters (provided a form of such letter has been approved by the
appropriate regulatory personnel) resulting from the activities of the sales forces except as otherwise specifically agreed to between the Parties. During the Term, Indevus shall promptly communicate to Valera all comments, requests and inquiries of
the medical profession or any other Third Parties for information relating to the VANTAS, including prescription, Sampling, and safety information, within the Territory, of which it becomes aware. During the Term, upon the reasonable request of
Valera, Indevus shall provide reasonable cooperation to Valera to the extent deemed necessary to respond to such communications and Valera shall provide copies of the responses given, in accordance with the laws, regulations and policies of the FDA,
to Indevus. Valera shall formulate responses to such inquiries, including the content of any Frequently Asked Questions. If appropriate, Valera shall establish a centralized database to document and track medical inquiries. 
 ARTICLE 7 
 REPRESENTATIONS AND
WARRANTIES 
 7.1 General Representations. Each Party hereby represents and warrants to the other Party as follows: 
 (a) Such Party is a corporation duly organized, validly existing and is in good standing under the laws of the jurisdiction of its incorporation, is
qualified to do business and is in good standing as a foreign corporation in each jurisdiction in which the conduct of its business or the ownership of its properties requires such qualification and failure to have such would prevent it from
performing its obligations under this Agreement; 
 (b) The execution, delivery and performance by such Party of this Agreement have been duly
authorized by all necessary corporate action and do not and will not (i) violate any provision of any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award presently in effect having applicability to it or any
provision of its charter or bylaws; or (ii) conflict with or constitute a default under any other agreement to which such Party is a party; 
 (c) This Agreement has been duly executed and is a legal, valid and binding obligation of such Party, enforceable against it in accordance with the terms and conditions hereof, except as enforceability may be limited by (i) any
applicable bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditor’s rights generally, or (ii) general principles of equity, whether considered in a proceeding in equity or at law; and 
 (d) Such Party has obtained all authorizations, consents and approvals, governmental or otherwise, necessary for the execution and delivery of this
Agreement, and to otherwise perform such Party’s obligations under this Agreement. 
  

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 7.2 Additional Valera Representations and Warranties. Valera represents and warrants to Indevus
that: 
 (a) the Promotional Materials are not false or misleading in any material respect, and are substantially in compliance with the Act
and all rules and regulations of the FDA; 
 (b) Valera has no reason to believe that any of the Valera Patents are, or are likely to be held,
invalid or unenforceable; and the Valera Patents are in full force and not subject to any pending or threatened re-examination, opposition, interference or litigation proceedings; 
 (c) Valera is the sole and exclusive owner of or controls and has the exclusive right to use in the Territory the Valera Patents and the VANTAS Trademark,
and the Valera Patents and the VANTAS Trademark are not subject to any encumbrance, lien or claim of ownership by any Third Party; Valera has not granted to any Third Party any license, or other rights to use the Valera Patents or the VANTAS
Trademark in the Territory or to import, manufacture, distribute, use, sell or offer to sell any of the Products, which are inconsistent or in conflict with the rights granted to Indevus hereunder; at no time during the Term shall Valera assign,
transfer, encumber or grant rights in or with respect to the Valera Patents or the VANTAS Trademark inconsistent with the rights granted to Indevus under this Agreement; 
 (d) the manufacture, authorized use, importation and/or sale of any Product in the Territory does not infringe or misappropriate any United States patents or other intellectual property right of any Third Party;

 (e) the data and information provided to Indevus prior to the Effective Date relating to (i) pre-clinical and clinical study results
and protocols related to the Products; (ii) any communications to and from any Regulatory Authority with respect to the Products, including any regulatory submissions and filings, correspondence with, and minutes of meetings and telephone
conferences with Regulatory Authorities; and (iii) Adverse Experiences and other IND safety reports with respect to any of the Products, has been accurate and complete in all material respects and Valera has made no material misrepresentation
or material omission in connection with such data and information. No information has come to the attention of Valera as would render the IND or NDA for any Product untrue, incomplete or inaccurate in any material respect; 
 (f) all Finished Product manufactured and supplied by or on behalf of Valera during the Term, (i) has been and will be manufactured in accordance
with and will conform to the VANTAS Specifications, cGMPs, other applicable FDA and other regulatory standards and such quality assurance and quality control practices as are standard in the pharmaceutical manufacturing industry; and 
 (g) Valera is the owner of the registration of the mark VANTAS and no claim or demand has been asserted in writing against Valera as of the Effective Date
alleging trademark infringement resulting from the use and/or registration of the VANTAS Trademark. 
 7.3 DISCLAIMER. EXCEPT AS
PROVIDED ELSEWHERE IN THIS SECTION 7, NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY OF ANY KIND WHATSOEVER, WHETHER EXPRESS OR IMPLIED, STATUTORY, OR BY OPERATION 

  

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OF LAW OR OTHERWISE, AND EACH PARTY EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT AND
SUITABILITY OF THE PRODUCT AND/OR THE COPROMOTION SERVICES TO BE PROVIDED HEREUNDER. 
 ARTICLE 8 
 TRADEMARK MATTERS 
 8.1 General.
It is the intent of the Parties to use the VANTAS Trademark and, solely on the terms and conditions set forth in Section 4.4, the Indevus Trademark, on and in connection with the marketing, sale, advertising and/or Promotion of VANTAS in the
Territory during the Term. Each of the Parties consents to the use of its respective trademark by the other Party and its Affiliates in connection with the performance of such Party’s obligations pursuant to this Agreement. 
 8.2 Maintenance. Each Party shall maintain all registrations of its respective trademark in the Territory. If necessary to permit the other Party
to use its trademark in connection with the performance of such other Party’s obligations pursuant to this Agreement, a Party shall make application to register the other Party as a permitted user or registered user of its trademark.

 8.3 Enforcement. During the Term, each Party shall promptly notify the other of any actual, alleged or threatened infringement of
such Party’s trademark or of any unfair trade practices, passing off of counterfeit goods, or similar offenses of which it becomes aware. Each Party reserves the right to determine, in its sole discretion, whether to and to what extent to
institute, prosecute or defend any actions or proceedings involving or affecting any rights relating to such Party’s trademark in the Territory. Upon a Party’s reasonable request, the other Party shall cooperate with and assist such Party
in its enforcement efforts with respect to its trademark. The Party to whom the trademark belongs shall be responsible for all costs and expenses incurred by either Party at the first Party’s request in connection with any such action defending
its trademark, and, following each Party’s recovery of its respective costs and expenses, the Parties will share all money damages, if any, recovered in connection with such action in proportion to the amount of damage actually suffered by such
Party. 
 ARTICLE 9 
 CONFIDENTIALITY AND PUBLICITY 
 9.1 Non-Disclosure and Non-Use Obligations. All Proprietary Information disclosed by
one Party to the other Party hereunder shall be maintained in confidence and shall not be disclosed to any Third Party or used for any purpose except as expressly permitted herein without the prior written consent of the Party that disclosed the
Proprietary Information to the other Party during the Agreement Term and for a period of [*] thereafter. The foregoing non-disclosure and non-use obligations shall not apply to the extent that such Proprietary Information: 
 (a) is known by the receiving Party at the time of its receipt, and not through a prior disclosure by the disclosing Party, as documented by business
records; 
  

	[*]	CONFIDENTIAL TREATMENT REQUESTED 

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 (b) is or becomes properly in the public domain or knowledge without breach by either Party; 

(c) is subsequently disclosed to a receiving Party by a Third Party who may lawfully do so and is not under an obligation of confidentiality to the
disclosing Party; or 
 (d) is developed by the receiving Party independently of Proprietary Information received from the other Party, as
documented by research and development records. 
 9.2 Permitted Disclosure of Proprietary Information. Notwithstanding
Section 9.1, a Party receiving Proprietary Information of another Party may disclose such Proprietary Information: 
 (a) upon prior
written approval of the other Party to governmental or other regulatory agencies in order to obtain patents pursuant to this Agreement, or to gain approval to conduct clinical trials or to market Product, but such disclosure may be only to the
extent reasonably necessary to obtain such patents or authorizations and in accordance with the terms of this Agreement or as otherwise requested by the FDA; 
 (b) by either Party to its agents, consultants or Affiliates for the Promotion of Product or to otherwise enable such Party to fulfill its obligations and responsibilities under this Agreement, on the condition that
such Third Parties and its Affiliates agree to be bound by confidentiality obligations at least as restrictive as those in this Agreement; or 
 (c) if required to be disclosed by law or court order, provided that notice is promptly delivered to the non-disclosing Party in order to provide an opportunity to challenge or limit the disclosure obligations. 
 9.3 Disclosure of Agreement. Without limiting any of the foregoing, it is understood that the Parties or their Affiliates may make disclosure of
this Agreement and the terms hereof in any filings required by the SEC, other governmental authority or securities exchange, may file this Agreement as an exhibit to any filing with the SEC, other governmental authority or securities exchange, and
may distribute any such filing in the ordinary course of its business; provided, however, that each Party shall be given the opportunity to review the redacted version (if any) of this Agreement prior to filing. 
 9.4 Other Public Statements. Except as set forth in this Agreement or as required by law, including federal and state securities laws or the rules
or regulations of any stock exchange or quotation service on which the disclosing Party’s securities are listed or traded, neither Party shall make any press release or other public announcement or other disclosure to a Third Party concerning
the existence of or terms of this Agreement or the subject matter hereof without the prior written consent of the other Party, which consent shall not be unreasonably withheld. Each Party agrees to provide to the other Party a copy of any public
announcement as soon as reasonably practicable under the circumstances prior to its scheduled release. Each Party shall have the right to expeditiously (but in any event within forty-eight (48) hours of receipt) review and recommend changes to
any press release or announcement regarding this Agreement or the subject matter of this Agreement; provided, however, that such right of review and recommendation shall only apply for the first time that specific information is to be
disclosed, 

  

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and shall not apply to the subsequent disclosure of substantially similar information that has previously been disclosed unless there have been material
developments relating to Product since the date of the previous disclosure. 
 ARTICLE 10 
 ORDERS AND SUPPLY 
 10.1 Orders and
Terms of Sale. Valera shall have the sole right to (i) receive, accept and fill orders for VANTAS; (ii) reject orders for VANTAS based on a negative credit assessment for a prospective customer (as determined in Valera’s sole and
absolute discretion); (iii) control invoicing, order processing and collection of accounts receivable for sales of VANTAS; and (iv) book all Net Sales and record sales of VANTAS in its books of account. 
 10.2 Misdirected Orders. Except in the event specifically authorized in writing to do so by Valera, (i) Indevus will not accept or fill
purchase orders for VANTAS and will not process billing or returns with respect to VANTAS (and in any event Indevus shall have no obligation to do so); and (ii) at no time shall Indevus have any power or authority to accept or reject orders on
behalf of Valera. If, for any reason, Indevus receives orders for VANTAS, Indevus shall forward such orders to Valera immediately for acceptance or rejection. 
 10.3 Product Returns. If any quantities of VANTAS are returned to Indevus, Indevus shall notify Valera in writing within two (2) Business Days and promptly ship them to the facility designated by
Valera, with any shipping or other associated out-of-pocket costs to be paid by Valera only if Indevus’ returns the Product in accordance with Valera’s official return policy, a copy of which is attached hereto as
Schedule 10.3. 
 10.4 Supply Obligations. Subject to the terms and conditions of this Agreement, Valera shall supply or
cause to be supplied all requirements of Finished Product for use in the Territory during the Term. Valera shall ensure that there are sufficient supplies of Finished Product to meet the Forecast requirements at all times during the Term and shall
distribute Finished Product in the Territory such that no material shortages of Finished Product occur during the Term. Valera shall promptly, but in no event later than five (5) Business Days after becoming aware thereof, inform Indevus in
writing of any material shortages that occur during the Term and of the steps that Valera is taking to correct any such situation. 
 10.5
Conformity; Specifications; Quality Control. All Finished Product manufactured, supplied, distributed and sold by or on behalf of Valera shall (i) be manufactured, packaged and labeled in accordance with cGMPs and with applicable laws;
(ii) not be adulterated or misbranded; and (iii) meet and comply with VANTAS Specifications contained in the NDA for VANTAS. Valera shall conduct, or cause to be conducted, quality control testing of VANTAS, in accordance with such
specifications, prior to shipment and prepare and retain records pertaining to such testing in accordance with the NDA, applicable laws and Valera’s internal standard operating procedures. 
  

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 ARTICLE 11 
 INDEMNIFICATION AND INSURANCE 
 11.1 Indemnification by Valera. Valera will indemnify, defend
and hold harmless Indevus and its Affiliates, employees, officers and directors and its successors and assigns (each, an “Indevus Indemnified Party”) from and against any Claims and Losses, in each case that an Indevus Indemnified
Party may incur, suffer or be required to pay, arising out of or attributable to (i) the manufacture, use, sale or Promotion of any Product by Valera; (ii) Valera’s negligence, gross negligence, recklessness or willful misconduct in
exercising or performing any of its rights or obligations under this Agreement; (iii) a material breach by Valera of any of its representations or warranties under this Agreement; (iv) any failure by Valera to Promote VANTAS substantially
in accordance with the FDA-approved labeling, the Promotional Materials and the contractual provisions provided by Valera for distribution to customers, and all applicable laws, rules and regulations; (v) the content or legal sufficiency of the
NDA for any Product or the Promotional Materials relating to any Product; or (vi) the manufacture, of any Product, and/or the Promotion, authorized use, importation, offer for sale, or sale by Valera, Indevus or any of their respective
Affiliates in the Territory of Product that is determined by a court of proper jurisdiction to infringe upon any Third Party United States patent rights, copyrights or trademarks; provided, however, that Valera shall not be obligated
under this Section 11.1, to the extent it is shown by evidence acceptable in a court of law having jurisdiction over the subject matter and meeting the appropriate degree of proof for such Claim that the Claim arose out of (A) a material
breach by Indevus of any of its obligations, representations, warranties or covenants under this Agreement; (B) negligence, gross negligence, recklessness or willful misconduct on the part of any Indevus Indemnified Party; or (C) misuse of
the Product not attributable to Valera. 
 11.2 Indemnification by Indevus. Indevus will indemnify, defend and hold harmless Valera
and its Affiliates, employees, officers and directors, and its successors and assigns, (each, a “Valera Indemnified Party”) from and against any Claims or Losses, in each case that a Valera Indemnified Party may incur, suffer or be
required to pay arising out of or attributable to (i) the Promotion of any Product by Indevus; (ii) Indevus’ negligence, gross negligence, recklessness or willful misconduct in exercising or performing any of its rights or obligations
under this Agreement; (iii) a material breach by Indevus of any of its representations or warranties under this Agreement; or (iv) any failure by Indevus to Promote VANTAS substantially in accordance with the FDA-approved labeling, the
Promotional Materials and the contractual provisions provided by Valera for distribution to customers, and all applicable laws, rules and regulations; provided, however, that Indevus shall not be obligated under this Section 11.2,
to the extent it is shown by evidence acceptable in a court of law having jurisdiction over the subject matter and meeting the appropriate degree of proof for such Claim that the Claim arose out of (A) a failure to warn, or a product design or
manufacturing defect attributable to Valera (regardless of legal theory, including, without limitation, product liability, strict liability and negligence); (B) a material breach by Valera of any of its obligations, representations, warranties
or covenants under this Agreement; (C) negligence, gross negligence, recklessness or willful misconduct on the part of any Valera Indemnified Party; or (D) misuse of the Product not attributable to Indevus. 
  

 -24- 

 11.3 Indemnification Procedure. Each Party shall promptly notify the other Party in writing of any
Claim. Concurrent with the provision of notice pursuant to this section, the Indemnified Party shall provide to the other Party copies of any complaint, summons, praecipe, subpoena or other court filings or correspondence related to such Claim and
will give such other information with respect thereto as the other Party shall reasonably request. The Indemnifying Party and Indemnified Party shall meet to discuss how to respond to such Claim. Failure to provide prompt notice shall not relieve
any Party of the duty to defend or indemnify unless such failure prejudices the defense of any matter. Each Party agrees that it will take reasonable steps to minimize the burdens of the litigation on witnesses and on the ongoing business of the
Indemnified Parties including, without limitation, making reasonable accommodations to witnesses’ schedules when possible and seeking appropriate protective orders limiting the duration and/or location of depositions. 
 11.4 Defense of Claims. Each Party shall undertake the defense of the Claims for which it has obligated itself to defend in this Section 11
(provided that if the obligated Party declines or fails to assume such role thirty (30) days after receiving written notice of such Claim, then the other Party shall be entitled to assume such role at the obligated Party’s expense). The
other Party shall have the right to participate in the defense of any such Claim utilizing attorneys of its choice, at its own expense. The other Party shall have a reasonable opportunity to participate in decision-making with respect to the
strategy of such defense, and the Parties shall reasonably cooperate with each other in connection with the implementation thereof. Each Party shall keep any counsel selected by the other Party reasonably informed of the status and progress of the
defense and shall consult with any counsel selected by the other Party on all material aspects of the defense, including, without limitation, settlement, of such Claim. 
 11.5 Settlement of Indemnified Claims. The indemnifying party under Section 11.1 or 11.2, as applicable, shall have the sole authority to settle any indemnified Claim without the consent of the other
Party, provided, however, that an indemnifying party shall not, without the written consent of the other Party, as part of any settlement or compromise (i) admit to liability on the part of the other Party or an Indemnified Party;
(ii) agree to an injunction against the other Party or an Indemnified Party; or (iii) settle any matter in a manner that separately apportions fault to the other Party or to an Indemnified Party. The Parties further agree that as part of
the settlement of any Indemnified Claim, an indemnifying party shall obtain a full, complete and unconditional release from the claimant on behalf of the Indemnified Parties. 
 11.6 Insurance. Each Party shall maintain, commencing as of the Detail Commencement Date and for a period of [*] after any expiration of
termination of this Agreement, a Commercial General Liability Insurance policy or policies (including coverage for Product Liability, Contractual Liability, Bodily Injury, Property Damage and Personal Injury), with minimum limits of [*] per
occurrence and in the aggregate. Upon request each Party shall provide Certificates of Insurance to the other Party evidencing the coverage specified herein. Except as expressly stated herein, a Party’s liability to the other is in no way
limited to the extent of the Party’s insurance coverage. 
 11.7 Limitation of Liability. With respect to any claim by one Party
against the other arising out of the performance or failure of performance of the other Party under this Agreement, the Parties expressly agree that the liability of such Party to the other Party for such breach will 

  

	[*]	CONFIDENTIAL TREATMENT REQUESTED 

 -25-

 
be limited under this Agreement or otherwise at law or equity to direct damages only, and in no event will a Party be liable to the other Party or any Third
Party for indirect, incidental, punitive, exemplary, special or consequential damages including, without limitation, lost profits, lost data or regulatory fees or penalties. 
 ARTICLE 12 
 TERM AND TERMINATION 
 12.1 Term and Expiration. This Agreement shall be effective as of the Effective Date and, unless terminated earlier pursuant to Section 12.2,
shall extend for a period expiring on December 31, 2008 (the “Term”), provided that the Term may be extended upon mutual agreement by the Parties. 
 12.2 Early Termination. 
 (a) Either Party may terminate this Agreement prior to expiration of the
Term in the event that the other Party (as used in this subsection, the “Breaching Party”) shall have materially breached or defaulted in the performance of any of its obligations hereunder, and has not cured such breach within
[*] (after notice requesting cure of the breach), provided, however, that if a breach other than a non-payment is not capable of being cured within [*] of such written notice, the Agreement may not be terminated sooner
than [*] of such written notice so long as the breaching Party commences and is taking commercially reasonable actions to cure such breach as promptly as practicable. The right of either Indevus or Valera to terminate this Agreement as
provided in this Section 12.2 shall not be affected in any way by such Party’s waiver or failure to take action with respect to any previous breach or default. 
 (b) Either Party may terminate this Agreement upon the filing or institution of bankruptcy, reorganization, liquidation or receivership proceedings, or upon an assignment of a substantial portion of the assets for the
benefit of creditors by the other Party; provided, however, in the case of any involuntary bankruptcy, reorganization, liquidation, receivership or assignment proceeding such right to terminate shall only become effective if the Party consents
to the involuntary proceeding or such proceeding is not dismissed within [*] after the filing thereof. 
 (c) Indevus may terminate
this Agreement on [*] written notice to Valera if (i) Valera discontinues commercial sale of VANTAS for a period of [*] or more, and subsequently fails to resume sales of VANTAS within [*] of having been notified in writing
of such failure by Indevus; or (ii) fails to provide sufficient quantities of Finished Product as per Forecasts for a period of [*] or more at any time during the Term. 
 (d) Either Party may terminate this Agreement on [*] written notice to the other Party in the event of a complete withdrawal of VANTAS from the
Territory. 
 (e)Either Party may terminate this Agreement by providing written notice of such election to the other Party, if Valera enters
into an agreement with a Third Party with respect to the transfer or sale of its business or all or substantially all of its assets or in the event of a merger, consolidation, or similar corporate transaction; provided, however, that
(i) the effective date of such termination shall be the earlier of (A) [*] after receipt by the other party of such written notice, or (B) the date of the closing of such transaction; and (ii) if Valera elects to terminate
this Agreement pursuant to this Section 12.2(e) it shall, upon the effective date of such termination, pay Indevus a cash fee at the closing of such transaction aggregating [*]. 
  

	[*]	CONFIDENTIAL TREATMENT REQUESTED 

 -26-

 12.3 Effect of Expiration or Termination. 
 (a) Expiration or termination of this Agreement shall not relieve either Party of any obligation accruing prior to such expiration or termination,
including, without limitation, the obligation to satisfy the terms of all purchase orders submitted prior to such expiration or termination and the obligation to satisfy all accrued payment obligations arising under Section 5 hereof. In
addition, the Parties shall have the following obligations upon the expiration or termination of this Agreement: (i) Indevus shall promptly return to Valera any and all Promotional Materials and product not delivered to customers; and
(ii) each Party shall (and shall cause its respective agents, employees and subcontractors to) return or destroy, as the owner may direct, any and all documentation in any medium that contains, refers to, or relates to the other Party’s
Proprietary Information. 
 (b) In addition to any other provisions of this Agreement which by their terms continue after the expiration of
this Agreement, the provisions of Article 9 and Article 11 shall survive the expiration or termination of this Agreement and shall continue in effect for [*] from the date of expiration or termination. In addition, any other provisions
required to interpret and enforce the Parties’ rights and obligations under this Agreement shall also survive, but only to the extent required for the full observation and performance of this Agreement. Any expiration or early termination of
this Agreement shall be without prejudice to the rights of any Party against the other accrued or accruing under this Agreement prior to termination. Except as expressly set forth herein, the rights to terminate as set forth herein shall be in
addition to all other rights and remedies available under this Agreement, at law, or in equity, or otherwise. 
 ARTICLE 13 

MISCELLANEOUS 
 13.1 Force
Majeure. Neither Party shall be held liable or responsible to the other Party nor be deemed to have defaulted under or breached the Agreement for failure or delay in fulfilling or performing any term of the Agreement during the period of time
when such failure or delay is caused by or results from fire, flood, earthquake, explosion, storm, blockage, embargo, war, acts of war (whether war be declared or not), terrorism, insurrection, riot, civil commotion, strike, lockout or other labor
disturbance, failure of public utilities or common carriers, act of God or act, omission or delay in acting by any governmental authority or the other Party. The affected Party shall notify the other Party of such force majeure circumstances as soon
as reasonably practicable, but in no event later than five (5) days after the commencement of the Force Majeure circumstances. Either Party may terminate upon thirty (30) days written notice if a Force Majeure event continues beyond sixty
(60) days. 
 13.2 Assignment. The Agreement may not be assigned or otherwise transferred without the prior written consent of
the other Party; provided, however, either Party may, subject to the terms and conditions of this Agreement, assign this Agreement to an Affiliate or in connection with the transfer or sale of its business or all or substantially all
of its assets or in the event of a merger, consolidation, change in control or similar corporate transaction, without such 

  

	[*]	CONFIDENTIAL TREATMENT REQUESTED 

 -27-

 
consent. This Agreement shall be binding upon and inure to the benefit of the successors and permitted assigns of the Parties. Any permitted assignee shall
assume in writing all obligations of its assignor under this Agreement. Any assignment not in accordance with this Agreement shall be void. 
 13.3 Severability. In the event that any of the provisions contained in this Agreement are held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein
shall not in any way be affected or impaired thereby, unless the absence of the invalidated provision(s) adversely affects the substantive rights of the Parties. In such event, the Parties covenant and agree to renegotiate any such term, covenant or
application thereof in good faith in order to provide a reasonably acceptable alternative to the term, covenant or condition of this Agreement or the application thereof that is invalid or unenforceable, it being the intent of the Parties that the
basic purposes of this Agreement are to be effectuated. 
 13.4 Notices. Notices and communications (including but not limited to
notices of termination, force majeure, material breach, change of address, or any other notices required by this Agreement) shall be in writing and shall be deemed to have been given when delivered in person, or sent by overnight courier service
(e.g., FedEx), postage prepaid, or by facsimile confirmed by prepaid registered or certified air mail letter or by overnight express mail (e.g., FedEx), or sent by prepaid certified or registered air mail, return receipt requested, to the following
addresses of the parties (or to such other address or addresses as may be specified from time to time in a written notice), and shall be deemed to have been properly served to the addressee upon receipt of such written communication, to the
following addresses of the Parties: 
 if to Indevus to: 
 INDEVUS PHARMACEUTICALS, INC. 
 33 Hayden Avenue 
 Lexington, MA 02421 
 Attention: Chief
Executive Officer 
 Fax No.: 781.862.3859 
 if to Valera to: 
 VALERA PHARMACEUTICALS , INC. 
 7 Clarke Drive 
 Cranbury NJ 08512 

Attention: President and Chief Executive Officer 
 Fax No.: 609.409.1650 
 or to such other address as the Party to whom notice is to be given may have furnished to the other Parties in writing in
accordance herewith. Any such communication shall be deemed to have been given when delivered if personally delivered or sent by facsimile on a Business Day, upon confirmed delivery by nationally-recognized overnight courier if so delivered and on
the third Business Day following the date of mailing if sent by registered or certified mail. 
  

 -28- 

 13.5 Specific Performance. Each of the Parties acknowledges and agrees that the other Party would
be damaged irreparably in the event any of the provisions of this Agreement are not performed in all material respects or otherwise are breached. Accordingly, and notwithstanding anything herein to the contrary, each of the Parties agree that the
other Party shall be entitled to seek injunctive relief to prevent breaches of the provisions of this Agreement, and/or to enforce specifically this Agreement and the terms and provisions hereof, in any action instituted in any court or tribunal
having jurisdiction over the Parties and the matter, without posting any bond or other security, and that such injunctive relief shall be in addition to any other remedies to which such Party may be entitled, at law or in equity. 
 13.6 Applicable Law and Dispute Resolution. This Agreement shall be governed by the laws of the State of Delaware, without regard to conflict of
laws provisions thereof. The Parties agree to attempt initially to solve all claims, disputes, or controversies arising under, out of, or in connection with this Agreement (a “Dispute”) by conducting good faith negotiations. Any
Disputes which cannot be resolved by good faith negotiation within thirty (30) Business Days, shall be referred, by written notice from either Party to the other, to the Chief Executive Officer of each Party. Such Chief Executive Officers shall
negotiate in good faith to achieve a resolution of the Dispute referred to them within thirty (30) Business Days after such notice is received by the Party to whom the notice was sent. If the Chief Executive Officers are unable to settle the
Dispute between them within thirty (30) Business Days, they shall so report to the Parties in writing. The Dispute shall then be referred to arbitration as set forth in the following paragraph. 
 The Parties shall refrain from instituting the arbitration proceedings for a period of sixty (60) days following such notice. During such period,
the Parties shall continue to make good faith efforts to amicably resolve the dispute without arbitration. If the Parties have not reached a settlement during that period the arbitration proceedings shall go forward and the Dispute shall be settled
by final and binding arbitration in accordance with the then existing Comprehensive Rules and Procedures of Judicial Arbitration and Mediation Services (JAMS), and judgment upon the award rendered by the arbitrators may be entered in any court
having jurisdiction over the party against which the award is entered. The arbitration shall be conducted in New York. The parties hereto agree that the service of any notice in the course of such arbitration at the respective addresses as provided
for in Section 13.4 shall be valid and binding. Any such arbitration proceeding shall be heard before a panel of three (3) arbitrators with experience in the pharmaceutical industry, one (1) to be designated by each party, and a third
to be agreed upon by the other two (2); provided, however, that if the two party-appointed arbitrators are unable to agree on a third arbitrator within thirty (30) days after the second arbitrator is appointed, the third arbitrator shall be
selected by JAMS. Judgment upon the award so rendered may be entered in any court having jurisdiction or application may be made to such court for judicial acceptance of any award and an order of enforcement, as the case may be. In no event shall a
demand for arbitration be made after the date when institution of a legal or equitable proceeding based on such claim, dispute or other matter in question would be barred by the applicable statute of limitations. Each Party shall bear its own costs
and expenses incurred in connection with any arbitration proceeding and the Parties shall equally share the cost of the arbitration levied by JAMS. 
  

 -29- 

 13.7 Entire Agreement. This Agreement, including the exhibits and schedules hereto, contains the
entire understanding of the Parties with respect to the subject matter. All express or implied agreements and understandings, either oral or written, heretofore made, including any offering letters or term sheets, are expressly superseded by this
Agreement. This Agreement may be amended, or any term hereof modified, only by a written instrument duly executed by all Parties hereto. 
 13.8 Independent Contractors. It is expressly agreed that the Parties shall be independent contractors and that the relationship between the Parties shall not constitute a partnership, joint venture or agency. Neither Party shall
have the authority to make any statements, representations or commitments of any kind, or to take any action, which shall be binding on the other Party, without the prior consent of such other Party. 
 13.9 Waiver. The waiver by a Party hereto of any right hereunder or the failure to perform or of a breach by another Party shall not be deemed a
waiver of any other right hereunder or of any other breach or failure by said other Party whether of a similar nature or otherwise. 
 13.10
Headings; References. The captions to the several Articles and Sections hereof are not a part of the Agreement, but are merely guides or labels to assist in locating and reading the several Articles and Sections hereof. Any reference in this
Agreement to an Article, Exhibit, Schedule or Section shall, unless otherwise specifically provided, be to an Article, Exhibit, Schedule or Section of this Agreement. 
 13.11 Counterparts. The Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 
 13.12 No Third Party Beneficiaries. Except as specifically set forth herein, none of the provisions of this Agreement shall be for the benefit of
or enforceable by any Third Party, including without limitation any creditor of either Party hereto. No such Third Party shall obtain any right under any provision of this Agreement or shall by reasons of any such provision make any claim in respect
of any debt, liability or obligation (or otherwise) against either Party hereto. 
 [Remainder of this page intentionally left blank]

  

 -30- 

 IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first set forth above.

  

			
	INDEVUS PHARMACEUTICALS, INC.
		
	By:	 	 /s/ Glenn L. Cooper, M.D.

	 Name:
 Title:
	 	 Glenn L. Cooper, M.D.
 Chairman and Chief Executive
Officer

	  
  
 VALERA PHARMACEUTICALS, INC.

		
	By:	 	 /s/ David S. Tierney, M.D.

	 Name:
 Title:
	 	 David S. Tierney, M.D.
 Chief Executive
Officer

  

 -31- 

 SCHEDULES 

 SCHEDULE 1.23 
 MINIMUM INCREMENTAL UNITS 
  

			
	 Half Year ending June 30, 2007
	 	[*]
	 Half Year ending December 31, 2007
	 	[*]
	 Half Year ending June 30, 2008
	 	[*]
	 Half Year ending December 31, 2008
	 	[*]

  

	[*]	CONFIDENTIAL TREATMENT REQUESTED 

 SCHEDULE 1.42 
 SPECIALTY PHARMACY ACCOUNTS 
  

	[*]	

  

	[*]	CONFIDENTIAL TREATMENT REQUESTED 

 SCHEDULE 3.1 
 INITIAL COMMITTEE MEMBERS 
 Indevus designees: 
 [*] 
 Valera designees: 
 [*] 
  

	[*]	CONFIDENTIAL TREATMENT REQUESTED 

 SCHEDULE 10.3 
 PRODUCT RETURN POLICY 
 Damaged Goods: 
 All products lost or damaged in transit will be credited for the full invoice cost. Damaged goods must be noted on carrier’s delivery document, and notification must be made within 10 days after receipt of
shipment. All damaged goods must be returned to Valera Pharmaceuticals, Inc. for proper disposal and so that a credit may be issued. 
 Outdated Goods:

 Outdated products can be returned for credit or exchange no later than 30 days after expiry. All goods must be returned for proper disposal before a credit
will be issued. 
 All returns must be authorized by a representative of Valera Pharmaceuticals, Inc.PURCHASE CONTRACT BETWEEN LINCHRIS HOTEL PARTNERS AND APPLE SEVEN HOSPITALITY

 Exhibit 10.43 
 Ronkonkoma, NY Hilton Garden Inn 
 PURCHASE CONTRACT 
 between 
 LINCHRIS HOTEL PARTNERS OF
L.I., LLC 
 (“SELLER”) 
 AND 
 APPLE SEVEN HOSPITALITY OWNERSHIP, INC. (“BUYER”) 
 Dated: October 30, 2006 

 TABLE OF CONTENTS 
  

					
	 	 	 	  	Page No.
	 ARTICLE I
	 	DEFINED TERMS	  	1
			
	 1.1
	 	Definitions	  	1
			
	 ARTICLE II
	 	PURCHASE AND SALE; PURCHASE PRICE; PAYMENT; EARNEST MONEY DEPOSIT	  	8
			
	 2.1
	 	Purchase and Sale	  	8
	 2.2
	 	Intentionally Omitted	  	8
	 2.3
	 	Purchase Price	  	8
	 2.4
	 	Allocation	  	8
	 2.5
	 	Payment	  	8
	 2.6
	 	Earnest Money Deposit	  	8
			
	 ARTICLE III
	 	REVIEW PERIOD	  	9
			
	 3.1
	 	Review Period	  	9
	 3.2
	 	Due Diligence Examination	  	10
	 3.3
	 	Restoration	  	11
	 3.4
	 	Seller Exhibits	  	11
			
	 ARTICLE IV
	 	SURVEY AND TITLE APPROVAL	  	11
			
	 4.1
	 	Survey	  	11
	 4.2
	 	Title	  	11
	 4.3
	 	Survey or Title Objections	  	11
			
	 ARTICLE V
	 	TERMINATION OF MANAGEMENT AGREEMENT	  	12
			
	 ARTICLE VI
	 	BROKERS	  	13
			
	 ARTICLE VII
	 	REPRESENTATIONS, WARRANTIES AND COVENANTS	  	13
	 7.1
	 	Seller’s and Indemnitor’s Representations, Warranties and Covenants	  	13
	 7.2
	 	Buyer’s Representations, Warranties and Covenants	  	18
	 7.3
	 	Survival	  	18
			
	 ARTICLE VIII
	 	ADDITIONAL COVENANTS	  	18
			
	 8.1
	 	Subsequent Developments	  	18
	 8.2
	 	Operations	  	18
	 8.3
	 	Third Party Consents	  	20
	 8.4
	 	Employees	  	20

  

 i 

					
	 8.5
	 	Estoppel Certificates	  	20
	 8.6
	 	Access to Financial Information	  	20
	 8.7
	 	Bulk Sales	  	21
	 8.8
	 	Indemnification	  	21
	 8.9
	 	Escrow Funds	  	23
	 8.10
	 	Liquor Licenses	  	23
			
	 ARTICLE IX
	 	CONDITIONS FOR CLOSING	  	24
			
	 9.1
	 	Buyer’s Conditions for Closing	  	24
	 9.2
	 	Seller’s Conditions for Closing	  	25
			
	 ARTICLE X
	 	CLOSING AND CONVEYANCE	  	25
			
	 10.1
	 	Closing	  	25
	 10.2
	 	Deliveries of Seller and Indemnitor	  	25
	 10.3
	 	Buyer’s Deliveries	  	27
			
	 ARTICLE XI
	 	COSTS	  	28
			
	 11.1
	 	Seller’s Costs	  	28
	 11.2
	 	Buyer’s Costs	  	28
			
	 ARTICLE XII
	 	ADJUSTMENTS	  	28
			
	 12.1
	 	Adjustments	  	28
	 12.2
	 	Reconciliation and Final Payment	  	30
	 12.3
	 	Employees	  	30
			
	 ARTICLE XIII
	 	CASUALTY AND CONDEMNATION	  	30
			
	 13.1
	 	Risk of Loss; Notice	  	30
	 13.2
	 	Buyer’s Termination Right	  	31
	 13.3
	 	Procedure for Closing	  	31
			
	 ARTICLE XIV
	 	DEFAULT REMEDIES	  	31
			
	 14.1
	 	Buyer Default	  	31
	 14.2
	 	Seller Default	  	31
	 14.3
	 	Attorney’s Fees	  	32
			
	 ARTICLE XV
	 	NOTICES	  	32
			
	 ARTICLE XVI
	 	MISCELLANEOUS	  	33
			
	 16.1
	 	Performance	  	33
	 16.2
	 	Binding Effect; Assignment	  	33
	 16.3
	 	Entire Agreement	  	33

  

 ii 

					
	 16.4
	 	Governing Law	  	33
	 16.5
	 	Captions	  	33
	 16.6
	 	Confidentiality	  	33
	 16.7
	 	Closing Documents	  	34
	 16.8
	 	Counterparts	  	34
	 16.9
	 	Severability	  	34
	 16.10
	 	Interpretation	  	34
	 16.11
	 	(Intentionally Omitted)	  	34
	 16.12
	 	Further Acts	  	34
	 16.13
	 	Joint and Several Obligations	  	34
			
	 ARTICLE XVII
	 	JOINDER BY INDEMNITOR	  	
			
	 17.1
	 	Indemnification by Indemnitor	  	

 SCHEDULES: 
 EXHIBITS:

  

			
	Exhibit A	  	Legal Description
	Exhibit B	  	List of FF&E
	Exhibit C	  	List of Hotel Contracts
	Exhibit D	  	Consents and Approvals
	Exhibit E	  	Environmental Reports
	Exhibit F	  	Claims or Litigation Pending
	Exhibit G	  	Escrow Agreement
	Exhibit H	  	Tax Returns
	Exhibit I	  	Excluded Assets

  

 iii 

 PURCHASE CONTRACT 
 This PURCHASE CONTRACT (this “Contract”) is made and entered into as of October 30, 2006, by and between LINCHRIS HOTEL
PARTNERS OF L.I., LLC ( “Seller”) with a principal office at c/o Linchris Hotel Corp., 269 Hanover Street, #2, Hanover, Massachusetts 02339, and APPLE SEVEN HOSPITALITY OWNERSHIP, INC., a Virginia corporation, with its
principal office at 814 East Main Street, Richmond, Virginia 23219, or its affiliates or assigns (“Buyer”). 
 RECITALS 
 A. Seller is the fee simple owner of that certain 165-room Hilton Garden Inn Islip/MacArthur Airport hotel
property located at 3485 Veterans Memorial Highway, Ronkonkoma, New York (the “Hotel”) identified in on Exhibit A attached hereto and incorporated by reference. 
 B. Buyer is desirous of purchasing the Hotel from Seller, and Seller is desirous of selling the Hotel to Buyer, for the purchase price and upon terms and
conditions hereinafter set forth. 
 AGREEMENT: 
 NOW, THEREFORE, in consideration of the foregoing Recitals, the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto hereby agree as follows: 
 ARTICLE I 
 DEFINED TERMS 
 1.1 Definitions. The following capitalized terms when used in this Contract
shall have the meanings set forth below unless the context otherwise requires: 
 “Additional Deposit” shall mean $250,000.

 “Affiliate” shall mean, with respect to Seller or Buyer, any other person or entity directly or indirectly controlling
(including but not limited to all directors and officers), controlled by or under direct or indirect common control with Seller or Buyer, as applicable. For purposes of the foregoing, a person or entity shall be deemed to control another person or
entity if it possesses, directly or indirectly, the power to direct or cause direction of the management and policies of such other person or entity, whether through the ownership of voting securities, by contract or otherwise. 
 “Appurtenances” shall mean all rights, titles, and interests of a Seller appurtenant to the Land and Improvements, including, but not
limited to, (i) all easements, rights of way, rights of ingress and egress, tenements, hereditaments, privileges, and appurtenances in any way belonging to the Land or Improvements, (ii) any land lying in the bed of any alley, highway,
street, road or avenue, open or proposed, in front of or abutting or adjoining the Land, (iii) any 

  

 1 

 
strips or gores of real estate adjacent to the Land, and (iv) the use of all alleys, easements and rights-of-way, if any, abutting, adjacent, contiguous
to or adjoining the Land. 
 “Brand” shall mean Hilton Garden Inn, the hotel brand or franchise under which the Hotel
operates. 
 “Business Day” shall mean any day other than a Saturday, Sunday or legal holiday in the Commonwealth of
Virginia. 
 “Closing” shall mean the closing of the purchase and sale of the Property pursuant to this Contract.

 “Closing Date” shall have the meaning set forth in Section 10.1. 
 “Code” means the Internal Revenue Code of 1986, as amended. 
 “Contracts, Plans and Specs” shall mean all construction and other contracts, plans, drawings, specifications, surveys, soil reports,
engineering reports, inspection reports, and other technical descriptions and reports. 
 “Deed” shall have the meaning set
forth in Section 10.2(a). 
 “Deposits” shall mean, to the extent assignable, all prepaid rents and deposits
(including, without limitation, any reserves for replacement of FF&E and for capital repairs and/or improvements), refundable security deposits and rental deposits, and all other deposits for advance reservations, banquets or future services,
made in connection with the use or occupancy of the Improvements; provided, however, that to the extent Seller has not received or does not hold all of the prepaid rents and/or deposits attributable to the Leases related to the Property, Buyer shall
be entitled to a credit against the cash portion of the Purchase Price allocable to the Property in an amount equal to the amount of the prepaid rents and/or deposits attributable to the Leases transferred at the Closing of such Property, and
provided further, that “Deposits” shall exclude (i) reserves for real property taxes and insurance, in each case, to the extent pro rated on the settlement statement such that Buyer receives a credit for (a) taxes and premiums in
respect of any period prior to Closing and (b) the amount of deductibles and other self-insurance and all other potential liabilities and claims in respect of any period prior to Closing, and (ii) utility deposits. 
 “Due Diligence Examination” shall have the meaning set forth in Section 3.2. 
 “Earnest Money Deposit” shall have the meaning set forth in Section 2.5(a). 
 “Environmental Requirements” shall have the meaning set forth in Section 7.1(f) 
 “Escrow Agent” shall have the meaning set forth in Section 2.5(a). 
 “Escrow Agreement” shall have the meaning set forth in Section 2.5(b). 
 “Exception Documents” shall have the meaning set forth in Section 4.2. 
  

 2 

 “Excluded Assets” shall mean: 
 (a) all cash, bank accounts and money invested with financial institutions and other liquid assets of the Seller; 
 (b) any interest in and to any refund of Taxes of the Seller for any period and any interest in and to any refund of Taxes relating to the
Hotel or its operations, prior to the Closing; 
 (c) all credits, claims for refund, prepaid expenses, deferred charges,
escrow accounts, advance payments (other than advance booking/room rental payments), security or other deposits, including recoverable deposits, and recoverable prepaid items (and, in each case, security interests relating thereto) arising from or
in connection with, or related to, the Hotel, its contracts or assets; 
 (d) all claims or rights against any person or the
Seller arising prior to Closing Date; 
 (e) all insurance policies owned by the Seller and all rights, claims, proceeds and
causes of action of the Seller under insurance policies and all rights in the nature of insurance, indemnification or contribution relating to the Seller or its property, except as otherwise provided in this Contract; 
 (f) all of Seller’s rights under this Contract and any other agreement to sell assets of the Seller now existing or in the future and
all cash and non-cash consideration payable or deliverable to Seller pursuant to the terms and provisions hereof and thereof; 
 (g) all items listed on Exhibit I, if any; 
 (h) Seller’s interest in any employment agreement; 
 (i) any balances in Lender retained escrows for taxes, insurance, and other funds held by Lender, including any FF&E Reserve;

 (j) all books and records of the Seller that do not relate primarily to the Hotel, financial statements, and accounting
ledgers, records, and work-papers; and 
 (k) subject to the Buyer’s right to review all employee records and financial
books and records necessary for Seller to defend any tax or other audit. 
 “Existing Franchise Agreement” shall mean that
certain franchise license agreement between the Seller and the Franchisor, granting to Seller a franchise to operate the Hotel under the Brand. 
 “Existing Management Agreement” shall mean that certain management agreement between the Seller and the Existing Manager for the operation and management of the Hotel. 
 “Existing Manager” shall mean Linchris Hotel Corp. 
  

 3 

 “FF&E” shall mean all tangible personal property and fixtures of any kind (other
than personal property (i) owned by guests of the Hotel or (ii) leased by Seller pursuant to an FF&E Lease) attached to, or located upon and used in connection with the ownership, maintenance, use or operation of the Land or
Improvements as of the date hereof (or acquired by Seller and so employed prior to Closing), including, but not limited to, all furniture, fixtures, equipment, signs and related personal property; all heating, lighting, plumbing, drainage,
electrical, air conditioning, and other mechanical fixtures and equipment and systems; all elevators, and related motors and electrical equipment and systems; all hot water heaters, furnaces, heating controls, motors and equipment, all shelving and
partitions, all ventilating equipment, and all disposal equipment; all spa, health club and fitness equipment; all equipment used in connection with the use and/or maintenance of the guestrooms, restaurants, lounges, business centers, meeting rooms,
swimming pools, indoor and/or outdoor sports facilities and other common areas and recreational areas; all carpet, drapes, beds, furniture, televisions and other furnishings; all stoves, ovens, freezers, refrigerators, dishwashers, disposals,
kitchen equipment and utensils, tables, chairs, plates and other dishes, glasses, silverware, serving pieces and other restaurant and bar equipment, apparatus and utensils. A current list of FF&E is attached hereto as Exhibit B.

 “FF&E Leases” shall mean all leases of any FF&E and other contracts permitting the use of any FF&E at the
Improvements that are assumed by Buyer. 
 “Financial Statements” shall have the meaning set forth in Section 3.1(b).

 “Franchisor” shall mean Hilton Inns, Inc., or its affiliates. 
 “Ground Lease” shall mean that certain Ground Lease Agreement, dated December 28, 1999, between Ronkonkoma Realty Venture I, L.P.,
as lessor (“Ground Lessor”) and Linchris Hotel Partners of L.I., LLC, as lessee, as amended by First, Second and Third Amendments. 
 “Hotel Contracts” shall have the meaning set forth in Section 10.2(d). 
 “Improvements”
shall mean all buildings, structures, fixtures, parking areas and other improvements to the Land, and all related facilities. 
 “Indemnified Party” shall have the meaning set forth in Section 8.8(c)(i). 
 “Indemnifying
Party” shall have the meaning set forth in Section 8.8(c)(i). 
 “Initial Deposit” shall have the meaning set
forth in Section 2.5(a). 
 “Land” shall mean, collectively, a leasehold interest in the real property more fully
described in Exhibit A, which is attached hereto and incorporated herein by reference, together with a leasehold interest in all rights (including without limitation all air rights and development rights), alleys, streets, strips, gores, waters,
privileges, appurtenances, advantages and easements belonging thereto or in any way appertaining thereto. 
 “Leases” shall
mean all leases, franchises, licenses, occupancy agreements, “trade-out” agreements, advance bookings, convention reservations, or other agreements demising space in, providing for the use or occupancy of, or otherwise similarly affecting
or relating to the use or 

  

 4 

 
occupancy of, the Improvements or Land, together with all amendments, modifications, renewals and extensions thereof, and all guaranties by third parties of
the obligations of the tenants, licensees, franchisees, concessionaires or other entities thereunder. 
 “Legal Action”
shall have the meaning set forth in Section 8.8(c)(ii). 
 “Licenses” shall mean all permits, licenses, franchises,
utility reservations, certificates of occupancy, and other documents issued by any federal, state, or municipal authority or by any private party related to the development, construction, use, occupancy, operation or maintenance of the Hotel,
including, without limitation, all licenses, approvals and rights (including any and all existing waivers of any brand standard) necessary or appropriate for the operation of the Hotel under the Brand. 
 “Liquor Licenses” shall have the meaning set forth in Section 8.10. 
 “Manager” shall mean the management company selected by Buyer to manage the Hotel. 
 “New Franchise Agreement” shall mean the franchise license agreement to be entered into between Buyer and the Franchisor, granting to
Buyer a franchise to operate the Hotel under the Brand on and after the Closing Date. 
 “New Management Agreement” means
the management agreement to be entered into between Buyer and the Manager for the operation and management of the Hotel on and after the Closing Date. 
 “Other Property” shall have the meaning set forth in Section 16.14. 
 “Pending
Claims” shall have the meaning set forth in Section 7.1(e). 
 “Permitted Exceptions” shall have the meaning
set forth in Section 4.3. 
 “Personal Property” shall mean, collectively, all of the Property other than the Real
Property. 
 “PIP” shall mean a product improvement plan for the Hotel, as required by the Existing Manager or the
Franchisor, if any. 
 “Post-Closing Agreement” shall have the meaning set forth in Section 8.9. 
 “Property” shall mean, collectively, (i) all of the following with respect to the Hotel: the Land, Improvements, Appurtenances,
FF&E, Supplies, Leases, Deposits, Records, Service Contracts, Warranties, Licenses, FF&E Leases, Contracts, Plans and Specs, Tradenames, Utility Reservations, as well as all other real, personal or intangible property of Seller related to
any of the foregoing and (ii) any and all of the following that relate to or affect in any way the design, construction, ownership, use, occupancy, leasing, maintenance, service or operation of the Real Property, FF&E, Supplies, Leases,
Deposits or Records, Service Contracts, Warranties, Licenses, Tradenames, Contracts, Plans and Specs and FF&E Lease, excluding, however, the Excluded Assets. 
  

 5 

 “Purchase Price” shall have the meaning set forth in Section 2.2. 
 “Real Property” shall mean, collectively, all Land, Improvements and Appurtenances with respect to the Hotel. 
 “Records” shall mean all books, records, promotional material, tenant data, guest history information (other than any such information
owned exclusively by the Existing Manager), marketing and leasing material and forms (including but not limited to any such records, data, information, material and forms in the form of computerized files located at the Hotel), market studies
prepared in connection with Seller’s current annual plan and other materials, information, data, legal or other documents or records (including, without limitation, all documentation relating to any litigation or other proceedings, all zoning
and/or land use notices, relating to or affecting the Property, all business plans and projections and all studies, plans, budgets and contracts related to the development, construction and/or operation of the Hotel) owned by Seller and/or in
Seller’s possession or control, or to which Seller has access or may obtain from the Existing Manager, that are used in or relating to the Property and/or the operation of the Hotel, including the Land, the Improvements or the FF&E, and
proforma budgets and projections and construction budgets and contracts related to the development and construction of the Hotel and a list of the general contractors, architects and engineers providing goods and/or services in connection with the
construction of the Hotel, all construction warranties and guaranties in effect at Closing and copies of the final plans and specifications for the Hotel. 
 “Release” shall have the meaning set forth in Section 7.1(f). 
 “Review
Period” shall have the meaning set forth in Section 3.1. 
 “SEC” shall have the meaning set forth in
Section 8.6. 
 “Seller Liens” shall have the meaning set forth in Section 4.3. 
 “Seller Parties” shall have the meaning set forth in Section 7.1(e). 
 “Service Contracts” shall mean contracts or agreements, such as maintenance, supply, service or utility contracts. 
 “Supplies” shall mean all merchandise, supplies, inventory and other items used for the operation and maintenance of guest rooms,
restaurants, lounges, swimming pools, health clubs, spas, business centers, meeting rooms and other common areas and recreational areas located within or relating to the Improvements, including, without limitation, all food and beverage (alcoholic
and non-alcoholic) inventory, office supplies and stationery, advertising and promotional materials, china, glasses, silver/flatware, towels, linen and bedding (all of which shall be 2-par level for all suites or rooms in the Hotel), guest cleaning,
paper and other supplies, upholstery material, carpets, rugs, furniture, engineers’ supplies, paint and painters’ supplies, employee uniforms, and all cleaning and maintenance supplies, including those used in connection with the swimming
pools, indoor and/or outdoor sports facilities, health clubs, spas, fitness centers, restaurants, business centers, meeting rooms and other common areas and recreational areas. 
  

 6 

 “Survey” shall have the meaning set forth in Section 4.1. 
 “Tax” or “Taxes” means any federal, state, local, or foreign income, gross receipts, transient occupancy, license,
payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under Code §59A), customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment,
disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, whether computed on a separate or consolidated, unitary or combined basis
or in any other manner, including any interest, penalty, or addition thereto, whether disputed or not and including any obligation to indemnify or otherwise assume or succeed to the Tax liability of any other person. 
 “Tax Return” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including
any schedule or attachment thereto, and including any amendment thereof. 
 “Tax Tolling Agreement” shall mean an agreement
between Seller and the State of New York with respect to an audit of Seller’s Taxes by the State of New York, which audit has not yet been completed. 
 “Third Party Consents” shall have the meaning set forth in Section 8.3. 
 “Title Commitment” shall have the meaning set forth in Section 4.2. 
 “Title Company” shall
have the meaning set forth in Section 4.2. 
 “Title Policy” shall have the meaning set forth in Section 4.2.

 “Title Review Period” shall have the meaning set forth in Section 4.3. 
 “Tradenames” shall mean all telephone exchanges and numbers, trade names, trade styles, trade marks, and other identifying material, and
all variations thereof, together with all related goodwill (it being understood and agreed that the name of the hotel chain to which the Hotel is affiliated by franchise, license or management agreement is a protected name or registered service mark
of such hotel chain and cannot be transferred to Buyer by this Contract, provided that all such franchise, license, management and other agreements granting a right to use the name of such hotel chain or any other trademark or trade name and all
waivers of any brand standard shall be assigned to Buyer. 
 “Utility Reservations” shall mean Seller’s interest in the
right to receive immediately on and after Closing and continuously consume thereafter water service, sanitary and storm sewer service, electrical service, gas service and telephone service on and for the Land and Improvements in capacities that are
adequate continuously to use and operate the Improvements for the purposes for which they were intended, including, but not limited to (i) any right to the present and future use of wastewater, drainage, water and other utility facilities to
the extent such use benefits the Real Property, (ii) any reservations of or commitments covering any such use in the future, and (iii) any wastewater capacity reservations relating to the Real Property. Buyer 

  

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shall be responsible for any requests or documents to transfer the Utility Reservations, at Buyer’s sole cost and expense. 
 “Warranties” shall mean all warranties, guaranties, indemnities and claims for the benefit of Seller with respect to the Hotel, the
Property or any portion thereof, including, without limitation, all warranties and guaranties of the development, construction, completion, installation, equipping and furnishing of the Hotel, and all indemnities, bonds and claims of Seller related
thereto. 
 ARTICLE II 
 PURCHASE AND SALE; PURCHASE PRICE; PAYMENT; 
 EARNEST MONEY DEPOSIT 
 2.1 Purchase and Sale. Seller agrees to sell and convey to Buyer or its Affiliates and/or assigns, and Buyer or its assigns agrees to purchase
from Seller, the Property, in consideration of the Purchase Price and upon the terms and conditions hereof. All of the Property shall be conveyed, assigned, and transferred to Buyer at Closing, free and clear of all mortgages, liens, encumbrances,
licenses, franchises (other than any hotel franchises assumed by Buyer), concession agreements, security interests, prior assignments or conveyances, conditions, restrictions, rights-of-way, easements, encroachments, claims and other matters
affecting title or possession, except for the Permitted Exceptions. 
 2.2 Intentionally Deleted. 
 2.3 Purchase Price. Buyer agrees to pay, and Seller agrees to accept, as consideration for the conveyance of the Property, subject to the
adjustments provided for in this Contract, the amount of Twenty-seven Million and No/100 Dollars ($27,000,000.00) (the “Purchase Price”). 
 2.4 Allocation. Buyer and Seller shall attempt to agree, prior to the expiration of the Review Period, on an allocation of the Purchase Price among Real Property, tangible Personal Property and intangible
property related to the Property. If Buyer and Seller do not agree, each party shall be free to allocate the Purchase Price to such items as they deem appropriate, subject to and in accordance with applicable laws. 
 2.5 Payment. The portion of the Purchase Price, less the Earnest Money Deposit and interest earned thereon, if any, which Buyer elects to have
applied against the Purchase Price (as provided below), less the Escrow Funds, shall be paid to Seller in cash, certified funds or wire transfer, at the Closing of the Property. At the Closing, the Earnest Money Deposit, together with interest
earned thereon, if any, shall, at Buyer’s election, be returned to Buyer or shall be paid over to Seller by Escrow Agent to be applied to the portion of the Purchase Price on behalf of Buyer, and the Escrow Funds shall be deposited into an
escrow account pursuant to the Post-Closing Agreement as contemplated by Section 8.9. 
 2.6 Earnest Money Deposit. 

(a) Within three (3) Business Days after the full execution and delivery of this Contract, Buyer shall deposit the sum of Two
Hundred Fifty Thousand and No/100 Dollars ($250,000.00) in cash, certified bank check or by wire transfer of immediately available funds (the “Initial Deposit”) with the Title Company, as escrow agent (“Escrow
Agent”), which sum 

  

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shall be held by Escrow Agent as earnest money. If, pursuant to the provisions of Section 3.1 of this Contract, Buyer elects to terminate this Contract
at any time prior to the expiration of the Review Period, then the Escrow Agent shall return the Earnest Money Deposit to Buyer promptly upon written notice to that effect from Buyer. If Buyer does not elect to terminate this Contract on or before
the expiration of the Review Period, Buyer shall, within three (3) Business Days after the expiration of the Review Period deposit the Additional Deposit with the Escrow Agent. The Initial Deposit and the Additional Deposit, and all interest
accrued thereon, shall hereinafter be referred to as the “Earnest Money Deposit.” 
 (b) The Earnest
Money Deposit shall be held by Escrow Agent subject to the terms and conditions of an Escrow Agreement dated as of the date of this Contract entered into by Seller, Buyer and Escrow Agent (the “Escrow Agreement”). The Earnest
Money Deposit shall be held in an interest-bearing account in a federally insured bank or savings institution reasonably acceptable to Seller and Buyer, with all interest to accrue to the benefit of the party entitled to receive it and to be
reportable by such party for income tax purposes. 
 ARTICLE III 
 REVIEW PERIOD 
 3.1 Review Period. Buyer shall have a period through 6:00
p.m. Eastern Time on the date that is thirty (30) days after the date of this Contract, unless a longer period of time is otherwise provided for in this Contract and except as otherwise agreed to in writing by Buyer and Seller (the
“Review Period”), to evaluate the legal, title, survey, construction, physical condition, structural, mechanical, environmental, economic, permit status, franchise status, financial and other documents and information related
to the Property. Within two (2) Business Days following the date of this Contract, Seller, at Seller’s sole cost and expense, will deliver to Buyer (or make available at the Hotel) for Buyer’s review, to the extent not previously
delivered to Buyer, true, correct and complete copies of the following, together with all amendments, modifications, renewals or extensions thereof: 
 (a) All Warranties and Licenses relating to the Hotel or any part thereof; 
 (b) Income and
expense statements and budgets for the Hotel, for the current year to date and each of the three (3) prior fiscal years (the “Financial Statements”), and Seller shall provide to Buyer copies of all income and expense
statements generated by Seller or any third party that relate to the operations of the Hotel and that contain information not included in the financial statements, if any, provided to Buyer by the Existing Manager, provided that Seller also agrees
to provide to Buyer’s auditors and representatives all financial and other information necessary or appropriate for preparation of audited financial statements for Buyer and/or its Affiliates as provided in Section 8.6, below; 

(c) All real estate and personal property tax statements with respect to the Hotel and notices of appraised value for the Real Property
for the current year (if available) and each of the three (3) calendar years prior to the current year; 
 (d)
Engineering, mechanical, architectural and construction plans, drawings, specifications and contracts, payment and performance bonds, title policies, reports and 

  

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commitments, zoning information and marketing and economic data relating to the Hotel and the construction, development, installation and equipping thereof,
as well as copies of all environmental reports and information, topographical, boundary or “as built” surveys, engineering reports, subsurface studies and other Contracts, Plans and Specs relating to or affecting the Hotel. If the Hotel is
purchased by Buyer, all such documents and information relating to the Hotel (to the extent assignable or transferable) shall thereupon be and become the property of Buyer without payment of any additional consideration therefor; 
 (e) All FF&E Leases, Services Contracts, Leases and, if applicable, a schedule of such Leases of space in the Hotel, and all
agreements for real estate commissions, brokerage fees, finder’s fees or other compensation payable by Seller in connection therewith; and 
 (f) All notices received from governmental authorities in connection with the Hotel and all other notices received from governmental authorities received at any time that relate to any noncompliance or violation of
law that has not been corrected. 
 (g) A true, correct and complete copy of the Ground Lease and all amendments and
agreements related thereto. 
 Seller shall, upon request of Buyer, make available to Buyer and Buyer’s representatives and agents, for
inspection and copying during normal business hours, Records located at Seller’s corporate offices, and Seller agrees to provide Buyer copies of all other reasonably requested information that is relevant to the management, operation, use,
occupancy or leasing of or title to the applicable Hotel and the plans specifications for development of the Hotel. At any time during the Review Period, Buyer may, in its sole and absolute discretion, elect not to proceed with the purchase of the
Property for any reason whatsoever by giving written notice thereof to Seller, in which event: (i) the Earnest Money Deposit shall be promptly returned by Escrow Agent to Buyer together with all accrued interest, if any, (ii) this Contract
shall be terminated automatically, (iii) all materials supplied by Seller to Buyer shall be returned promptly to Seller, and (iv) both parties will be relieved of all other rights, obligations and liabilities hereunder, except for the
parties’ obligations pursuant to Sections 3.3 and 16.6 below. 
 3.2 Due Diligence Examination. At any time during the Review
Period, and thereafter through Closing of the Property, Buyer and/or its representatives and agents shall have the right to enter upon the Property at all reasonable times for the purposes of reviewing all Records and other data, documents and/or
information relating to the Property and conducting such surveys, appraisals, engineering tests, soil tests (including, without limitation, Phase I and Phase II environmental site assessments), inspections of construction and other inspections and
other studies as Buyer deems reasonable and necessary or appropriate to evaluate the Property, subject to providing reasonable advance notice to Seller unless otherwise agreed to by Buyer and Seller (the “Due Diligence
Examination”). For purposes hereof, reasonable notice shall be deemed to be not less than 24 hours advanced written notice, given on a Business Day. Seller shall have the right to have its representative present during Buyer’s
physical inspections of its Property, provided that failure of Seller to do so shall not prevent Buyer from exercising its due diligence, review and inspection rights hereunder. Buyer agrees to exercise reasonable care 

  

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when visiting the Property, in a manner which shall not materially adversely affect the operation of the Property. 
 3.3 Restoration. Buyer covenants and agrees not to damage or destroy any portion of the Property in conducting its examinations and studies of the
Property during the Due Diligence Examination and, if closing does not occur, shall repair any portion of the Property damaged by the conduct of Buyer, its agents or employees, to substantially the condition such portion(s) of the Property were in
immediately prior to such examinations or studies. 
 3.4 Seller Exhibits. Buyer shall have until the end of the Review Period to
review and approve the information on Exhibits B, C, D, E and F. In the event Buyer does not approve any such Exhibit or the information contained therein, Buyer shall be entitled to terminate this Contract by notice to Seller and the Earnest Money
Deposit shall be returned to Buyer with all interest thereon and both parties shall be relieved of all rights, obligations and liabilities hereunder except for the parties’ obligations pursuant to Sections 3.3 and 16.6. 
 ARTICLE IV 
 SURVEY AND TITLE
APPROVAL 
 4.1 Survey. Seller has delivered to Buyer true, correct and complete copies of the most recent surveys of the Real
Property. In the event that an update of the survey or a new survey (such updated or new surveys being referred to as the “Survey”) are desired by Buyer, then Buyer shall be responsible for all costs related thereto.

 4.2 Title. Seller has delivered to Buyer its existing title insurance policy, including copies of all documents referred to
therein, for its Real Property. Buyer’s obligations under this Contract are conditioned upon Buyer being able to obtain for each Property (i) a Commitment for Title Insurance (each, a “Title Commitment”) issued by
LandAmerica American Title Company, 8201 Preston Road, Suite 280, Dallas, Texas, 75225 (the “Title Company”), for the most recent standard form of lease owner’s policy of title insurance in the state in which the Real
Property is located, covering the Real Property, setting forth the current status of the title to the Real Property, showing all liens, claims, encumbrances, easements, rights of way, encroachments, reservations, restrictions and any other matters
affecting the Real Property and pursuant to which the Title Company agrees to issue to Buyer at Closing an Owner’s Policy of Title Insurance on the most recent form of ALTA (where available) lease owner’s policy available in the state in
which the Land is located, with extended coverage and, to the extent applicable and available in such state, comprehensive, access, single tax parcel, contiguity, Fairway and such other endorsements as may be required by Buyer (collectively, the
“Title Policy”); and (ii) true, complete, legible and, where applicable, recorded copies of all documents and instruments (the “Exception Documents”) referred to or identified in the Title
Commitment, including, but not limited to, all deeds, lien instruments, leases, plats, surveys, reservations, restrictions, and easements affecting the Real Property. If requested by Seller, Buyer shall promptly provide Seller with a copy of the
Title Commitment issued by the Title Company. 
 4.3 Survey or Title Objections. If Buyer discovers any title or survey matter which
is objectionable to Buyer, Buyer may provide Seller with written notice of its objection to same within twenty (20) days after receipt of each Title Commitment (including all Exception 

  

 11 

 
Documents) and the applicable Survey (the “Title Review Period”). If Buyer fails to so object in writing to any such matter set forth
in the Survey or Title Commitment, it shall be conclusively assumed that Buyer has approved same. If Buyer disapproves any condition of title, survey or other matters by written objection to Seller on or before the expiration of the Title Review
Period, Seller shall elect either to attempt to cure or not cure any such item by written notice sent to Buyer within five (5) days after its receipt of notice from Buyer, and if Seller commits in writing to attempt to cure any such item, then
Seller shall be given until the Closing Date to cure any such defect. In the event Seller shall fail to cure a defect which Seller has committed in writing to cure prior to Closing, or if a new title defect arises after the date of Buyer’s
Title Commitment or Survey, as applicable, but prior to Closing, then Buyer may elect, in Buyer’s sole and absolute discretion: (i) to waive such objection and proceed to Closing, or (ii) to terminate this Contract and receive a
return of the Earnest Money Deposit, and any interest thereon. The items shown on the Title Commitment which are not objected to by Buyer as set forth above (other than exceptions and title defects arising after the title review period and other
than those standard exceptions which are ordinarily and customarily omitted in the state in which the applicable Hotel is located, so long as Seller provides the appropriate owner’s affidavit, gap indemnity or other documentation reasonably
required by the Title Company for such omission) are hereinafter referred to as the “Permitted Exceptions.” In no event shall Permitted Exceptions include liens, or documents evidencing liens, securing any indebtedness, any
mechanics’ or materialmen’s liens or any claims or potential claims therefor covering the Property or any portion thereof (“Seller Liens”), each of which shall be paid in full by Seller and released at Closing.

 ARTICLE V 
 MANAGEMENT
AGREEMENT AND FRANCHISE AGREEMENT 
 At or prior to the Closing, Seller shall terminate the Existing Management Agreement and the
Existing Franchise Agreement, and Seller shall be solely responsible for all claims and liabilities arising thereunder on, prior to or following the Closing Date. As a condition to Closing, Buyer shall enter into the New Management Agreement and the
New Franchise Agreement, effective as of the Closing Date, containing terms and conditions acceptable to Buyer (including, without limitation, such terms and conditions as may be required to accommodate Buyer’s and/or Buyer’s
Affiliates’ REIT structure). Seller shall be responsible for paying all costs related to the termination of the Existing Management Agreement. Seller shall be responsible for paying all reasonable and actual costs of the Franchisor related to
the termination of the Existing Franchise Agreement unless Buyer elects to enter into a franchise agreement with a party other than Franchisor or elects to operate the Hotel under no Brand, in which case, Buyer shall reimburse Seller for any
termination fee payable to Franchisor. Seller shall use best efforts to promptly provide all information required by the Franchisor in connection with the New Franchise Agreement, and Seller and Buyer shall diligently pursue obtaining each the same.

 ARTICLE VI 
 BROKERS

 Seller and Buyer each represents and warrants to the other that, except for CB Richard Ellis (Dave McElroy) for whose fees and
commissions Seller shall be solely responsible, it has 

  

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not engaged any broker, finder or other party in connection with the transaction contemplated by this Contract. Buyer and Seller each agree to save and hold
the other harmless from any and all losses, damages, liabilities, costs and expenses (including, without limitation, attorneys’ fees) involving claims made by any other agent, broker, or other person by or through the acts of Buyer or Seller,
respectively, in connection with this transaction. 
 ARTICLE VII 
 REPRESENTATIONS, WARRANTIES AND COVENANTS 
 7.1 Seller’s and
Indemnitor’s Representations, Warranties and Covenants. Seller hereby represents, warrants and covenants to Buyer as follows: 
 (a) Authority; No Conflicts. Seller is a limited liability company duly formed, validly existing and in good standing in the State of New York. Seller has obtained all necessary consents to enter into and
perform this Contract and is fully authorized to enter into and perform this Contract and to complete the transactions contemplated by this Contract. No consent or approval of any person, entity or governmental authority is required for the
execution, delivery or performance by Seller of this Contract, except as set forth in Exhibit D, and this Contract is hereby binding and enforceable against Seller. Neither the execution nor the performance of, or compliance with, this
Contract by Seller has resulted, or will result, in any violation of, or default under, or acceleration of, any obligation under any existing corporate charter, certificate of incorporation, bylaw, articles of organization, limited liability company
agreement or regulations, partnership agreement or other organizational documents and under any, mortgage indenture, lien agreement, promissory note, contract, or permit, or any judgment, decree, order, restrictive covenant, statute, rule or
regulation, applicable to Seller or to the Hotel; provided, however, that Franchisor has a right of first refusal in the Existing Franchise Agreement for which Seller is requesting a waiver. 
 (b) FIRPTA. Seller is not a foreign corporation, foreign partnership, foreign trust or foreign estate (as those items are defined
in the Internal Revenue Code and Income Tax Regulations). 
 (c) Bankruptcy. None of Seller, or, to Seller’s
knowledge, any of its partners or members, is insolvent or the subject of any bankruptcy proceeding, receivership proceeding or other insolvency, dissolution, reorganization or similar proceeding. 
 (d) Property Agreements. A complete list of all FF&E Leases, Service Contracts and Leases (other than those entered into by the
Existing Manager on its own behalf) used in or otherwise relating to the operation and business of the Hotel is attached hereto as Exhibit C. The assets constituting the Property to be conveyed to Buyer hereunder constitute all of the
property and assets of Seller used in connection with the operation and business of the Hotel. There are no leases, license agreements, leasing agent’s agreements, equipment leases, building service agreements, maintenance contracts, suppliers
contracts, warranty contracts, operating agreements, or other agreements (i) to which Seller is a party or an assignee, or (ii) to Seller’s knowledge, binding upon the Hotel, relating to the ownership, occupancy, operation, management
or maintenance of the Real Property, FF&E, Supplies or Tradenames, except for those Service Contracts, Leases, Warranties and FF&E Leases disclosed on Exhibit C or to be 

  

 13 

 
delivered to Buyer pursuant to Section 3.1. The Service Contracts, Leases, Warranties and FF&E Leases disclosed on Exhibit C or to be
delivered to Buyer pursuant to Section 3.1 are in full force and effect, and no default has occurred and is continuing thereunder and no circumstances exist which, with the giving of notice, the lapse of time or both, would constitute such a
default. No party has any right or option to acquire the Hotel or any portion thereof, other than Buyer. 
 (e) Pending
Claims. There are no: (i) claims, demands, litigation, proceedings or governmental investigations pending or threatened against Seller, the Existing Manager or any Affiliate of any of them (collectively, “Seller
Parties”) or related to the business or assets of the Hotel, except as set forth on Exhibit F attached hereto and incorporated herein by reference, (ii) special assessments or extraordinary taxes except as set forth in the
Title Commitment or (iii) pending or threatened condemnation or eminent domain proceedings which would affect the Property or any part thereof. There are no: pending arbitration proceedings or unsatisfied arbitration awards, or judicial
proceedings or orders respecting awards, which might become a lien on the Property or any portion thereof, pending unfair labor practice charges or complaints, unsatisfied unfair labor practice orders or judicial proceedings or orders with respect
thereto, pending charges or complaints with or by city, state or federal civil or human rights agencies, unremedied orders by such agencies or judicial proceedings or orders with respect to obligations under city, state or federal civil or human
rights or antidiscrimination laws or executive orders affecting the Hotel, or other pending, actual or, to Seller’s knowledge, threatened litigation claims, charges, complaints, petitions or unsatisfied orders by or before any administrative
agency or court which affect the Hotel or might become a lien on the Hotel (collectively, the “Pending Claims”). 
 (f) Environmental. With respect to environmental matters, (i) there has been no Release or threat of Release of Hazardous Materials in, on, under, to, from or in the area of the Real Property, except as
disclosed in the reports and documents set forth on Exhibit E attached hereto and incorporated herein by reference, (ii) no portion of the Property is being used for the treatment, storage, disposal or other handling of Hazardous
Materials or machinery containing Hazardous Materials other than standard amounts of cleaning supplies and chlorine for the swimming pool, all of which are stored on the Property in strict accordance with applicable Environmental Requirements and do
not exceed limits permitted under applicable laws, including without limitation Environmental Requirements, (iii) no underground storage tanks are currently located on or in the Real Property or any portion thereof, (iv) no environmental
investigation, administrative order, notification, consent order, litigation, claim, judgment or settlement with respect to the Property or any portion thereof is pending or threatened, (v) there is not currently and, to Seller’s
knowledge, never has been any mold, fungal or other microbial growth in or on the Real Property, or existing conditions within buildings, structures or mechanical equipment serving such buildings or structures, that could reasonably be expected to
result in material liability or material costs or expenses to remediate the mold, fungal or microbial growth, or to remedy such conditions that could reasonably be expected to result in such growth, and (vi) except as disclosed on Exhibit
E, there are no reports or other documentation regarding the environmental condition of the Real Property in the possession of Seller or Seller’s Affiliates, consultants, contractors or agents. As used in this Contract:
“Hazardous Materials” means (1) “hazardous wastes” as defined by the Resource Conservation 

  

 14 

 
and Recovery Act of 1976, as amended from time to time (“RCRA”), (2) “hazardous substances” as defined by the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. 9601 et seq.), as amended by the Superfund Amendment and Reauthorization Act of 1986 and as otherwise amended from time to time
(“CERCLA”); (3) “toxic substances” as defined by the Toxic Substances Control Act, as amended from time to time (“TSCA”), (4) “hazardous materials” as defined by the
Hazardous Materials Transportation Act, as amended from time to time (“HMTA”), (5) asbestos, oil or other petroleum products, radioactive materials, urea formaldehyde foam insulation, radon gas and transformers or other
equipment that contains dielectric fluid containing polychlorinated biphenyls and (6) any substance whose presence is detrimental or hazardous to health or the environment, including, without limitation, microbial or fungal matter or mold, or
is otherwise regulated by federal, state and local environmental laws (including, without limitation, RCRA, CERCLA, TSCA, HMTA), rules, regulations and orders, regulating, relating to or imposing liability or standards of conduct concerning any
Hazardous Materials or environmental, health or safety compliance (collectively, “Environmental Requirements”). As used in this Contract: “Release” means spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or disposing. 
 (g) Title and Liens. Except for Seller
Liens to be released at Closing, Seller has good and marketable leasehold title to the Land and fee simple absolute title to all other Real Property (excluding the Land), subject only to the Permitted Exceptions. Except for the FF&E subject to
the FF&E Leases and any applicable Permitted Exceptions, Seller has good and marketable title to the Personal Property, free and clear of all liens, claims, encumbrances or other rights whatsoever (other than the Seller Liens to be released at
Closing), and there are no other liens, claims, encumbrances or other rights pending or of which any Seller Party has received notice or which are otherwise known to any Seller Party related to any other Personal Property. The Ground Lease delivered
by Seller to Buyer is a true, correct and complete copy of the Ground Lease, is in full force and effect, and neither Seller nor the Ground Lessor are in default thereof. 
 (h) Utilities. All appropriate utilities, including sanitary and storm sewers, water, gas, telephone, cable and electricity, are,
to Seller’s knowledge, currently sufficient and available to service the Hotel and all installation, connection or “tap-on”, usage and similar fees have been paid. 
 (i) Licenses, Permits and Approvals. Seller has not received any written notice, and Seller has no knowledge that the Property
fails to comply with all applicable licenses, permits and approvals and federal, state or local statutes, laws, ordinances, rules, regulations, requirements and codes including, without limitation, those regarding zoning, land use, building, fire,
health, safety, environmental, subdivision, water quality, sanitation controls and the Americans with Disabilities Act, and similar rules and regulations relating and/or applicable to the ownership, use and operation of the Property as it is now
operated. Seller has received all licenses, permits and approvals required or needed for the lawful conduct, occupancy and operation of the business of the Hotel, and each license and permit is in full force and effect, and will be received and in
full force and effect as of the Closing. No licenses, permits or approvals necessary for the lawful conduct, occupancy or operation of the business of the Hotel, to Seller’s 

  

 15 

 
knowledge requires any approval of a governmental authority for transfer of the Property except as set forth in Exhibit D. 
 (j) Financial Statements. Seller has delivered copies of all prior and current (i) Financial Statements for the Hotel,
(ii) operating statements prepared by the Existing Manager for the Hotel, and (iii) monthly financial statements prepared by the Existing Manager for the Hotel. Each of such statements is, to Seller’s knowledge, complete and accurate
in all material respects and, except in the case of budgets prepared in advance of the applicable operating period to which such budgets relate, fairly presents the results of operations of the Hotel for the respective periods represented thereby.
Seller has relied upon the Financial Statements in connection with its ownership and operation of the Hotel, and there are no independent audits or financial statements prepared by third parties relating to the operation of the Hotel other than the
Financial Statements prepared by or on behalf of the Existing Manager, all of which have been provided to Buyer. 
 (k)
Employees. All employees employed at the Hotel are the employees of the Existing Manager. There are, to Seller’s knowledge, no (i) unions organized at the Hotel, (ii) union organizing attempts, strikes, organized work stoppages
or slow downs, or any other labor disputes pending or threatened with respect to any of the employees at the Hotel, or (iii) collective bargaining or other labor agreements to which Seller or the Existing Manager or the Hotel is bound with
respect to any employees employed at the Hotel. 
 (l) Operations. The Hotel has at all times been operated by Existing
Manager in accordance with all applicable laws, rules, regulations, ordinances and codes. 
 (m) Existing Management and
Franchise Agreements. Seller has furnished to Buyer true and complete copies of the Existing Management Agreement and the Existing Franchise Agreement, which constitutes the entire agreement of the parties with respect to the subject matter
thereof and which have not been amended or supplemented in any respect. There are no other management agreements, franchise agreements, license agreements or similar agreements for the operation or management of the Hotel or relating to the Brand,
to which Seller is a party or which are binding upon the Property, except for the Existing Management Agreement and the Existing Franchise Agreement. Except as may otherwise be required in a PIP, the Improvements comply with, and the Hotel is being
operated in accordance with, all requirements of such Existing Management Agreement and the Existing Franchise Agreement and all other requirements of the Existing Manager and the Franchisor, including all “brand standard” requirements of
the Existing Manager and the Franchisor. The Existing Management Agreement and the Existing Franchise Agreement are in full force and effect, and shall remain in full force and effect until the termination of the Existing Management Agreement and
the Existing Franchise Agreement at Closing, as provided in Article V hereof. No default has occurred and is continuing under the Existing Management Agreement or the Existing Franchise Agreement, and no circumstances exist which, with the giving of
notice, the lapse of time or both, would constitute such a default. 
  

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 (n) Construction of Hotel. 
 (i) The Hotel has been constructed in a good and workmanlike manner without encroachments and in accordance in all material respects with
the Contracts, Plans and Specs, and all building permits and certificates of occupancy therefor and all applicable zoning, platting, subdivision, health, safety and similar laws, rules, regulations, ordinances and codes. 
 (ii) The Personal Property is in good condition and operating order. 
 (iii) Necessary easements for ingress and egress, drainage, signage and utilities serving the Hotel have either been dedicated to the
public, conveyed to the appropriate utility or will be conveyed to Buyer along with the Property. 
 (o) Taxes.

 (i) Seller has timely filed all Tax Returns that it was required to file. All such Tax Returns were correct and complete in
all respects and were prepared in substantial compliance with all applicable laws and regulations. All Taxes owed by Seller (whether or not shown or required to be shown on any Tax Return) have been paid. Seller is not the beneficiary of any
extension of time within which to file any Tax Return. No claim has ever been made by an authority in a jurisdiction where Seller does not file Tax Returns that Seller is or may be subject to taxation by that jurisdiction. There are no Liens on any
of the assets of Seller that arose in connection with any failure (or alleged failure) to pay any Tax. 
 (ii) Seller has
withheld and paid all Taxes required to have been withheld and paid in connection with any amounts paid or owing to any employee, independent contractor, creditor, partner, or other third party, and all Forms W-2 and 1099 required with respect
thereto have been properly completed and timely filed. 
 (iii) Except as set forth in the Tax Tolling Agreement and as
described in Exhibit F, no Seller partner or officer (or employee responsible for Tax matters) of Seller expects any authority to assess any additional Taxes for any period for which Tax Returns have been filed. There is no dispute or claim
concerning any Tax liability of Seller either (A) claimed or raised by any authority in writing or (B) as to which any of Seller partners and officers (and employees responsible for Tax matters) of Seller has Knowledge based upon personal
contact with any agent of such authority. Exhibit H hereto lists all federal, state, local, and foreign income Tax Returns filed with respect to Seller for taxable periods ended on or after October 1, 2002, indicates those Tax Returns that have
been audited, and indicates those Tax Returns that currently are the subject of audit. Seller has delivered to Buyer correct and complete copies of all Tax Returns, examination reports, and statements of deficiencies assessed against or agreed to by
Seller and any of its Subsidiaries since October 1, 2002. 
  

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 (iv) Except as set forth in the Tax Tolling Agreement, neither Seller nor any person
acting on Seller’s behalf has waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency. 
 7.2 Buyer’s Representations, Warranties and Covenants. Buyer represents, warrants and covenants: 
 (a) Authority. Buyer is a corporation duly formed, validly existing and in good standing in the Commonwealth of Virginia. Buyer has
received or will have received by the applicable Closing Date all necessary authorization of the Board of Directors of Buyer to complete the transactions contemplated by this Contract. No other consent or approval of any person, entity or
governmental authority is required for the execution, delivery or performance by Buyer of this Contract, and this Contract is hereby binding and enforceable against Buyer. 
 (b) Bankruptcy. Buyer is not insolvent nor the subject of any bankruptcy proceeding, receivership proceeding or other insolvency,
dissolution, reorganization or similar proceeding. 
 7.3 Survival. All of the representations and warranties are true, correct and
complete in all material respects as of the date hereof and the statements set forth therein (without qualification or limitation as to a party’s knowledge thereof except as expressly provided for in this Article VII) shall be true, correct and
complete in all material respects as of the Closing Date. All of the representations and warranties made herein shall survive Closing for a period of nine (9) months and shall not be deemed to merge into or be waived by the Deed or any other
closing documents. Notwithstanding the foregoing, the representations contained in section 7.1(g) shall survive until a date which is sixty (60) days after the expiration of the applicable statute of limitations. 
 ARTICLE VIII 
 ADDITIONAL COVENANTS

 8.1 Subsequent Developments. After the date of this Contract and until the Closing Date, Seller shall use best efforts to keep
Buyer fully informed of all subsequent developments of which Seller has knowledge (“Subsequent Developments”) which would cause any of Seller’s representations or warranties contained in this Contract to be no longer
accurate in any material respect. 
 8.2 Operations. From and after the date hereof through the Closing on the Property, Seller shall
comply with the Existing Management Agreement and the Existing Franchise Agreement and keep the same in full force and effect and shall perform and comply with all of the following subject to and in accordance with the terms of such agreements:

 (a) Continue to maintain the Property generally in accordance with past practices of Seller and pursuant to and in
compliance with the Existing Management Agreement and the Existing Franchise Agreement, including, without limitation, (i) using reasonable efforts 

  

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to keep available the services of all present employees at the Hotel and to preserve its relations with guests, suppliers and other parties doing business
with Seller with respect to the Hotel, (ii) accepting booking contracts for the use of the Hotel’s facilities retaining such bookings in accordance with the terms of the Existing Management Agreement and the Existing Franchise Agreement,
(iii) maintaining the current level of advertising and other promotional activities for the Hotel’s facilities, (iv) maintaining the present level of insurance with respect to the Hotel in full force and effect until the Closing Date
for the Hotel and (v) remaining in compliance in all material respects with all current Licenses; 
 (b) Keep, observe,
and perform in all material respects all its obligations under and pursuant to the Leases, the Service Contracts, the FF&E Leases, the Existing Management Agreement, the Existing Franchise Agreement, the Contracts, Plans and Specs, the
Warranties and all other applicable contractual arrangements relating to the Hotel; 
 (c) Not cause or permit the removal of
FF&E from the Hotel except for the purpose of discarding worn and valueless items that have been replaced with FF&E of equal or better quality; timely make all repairs, maintenance, and replacements to keep all FF&E and all other
Personal Property and all Real Property in good operating condition; keep and maintain the Hotel in a good state of repair and condition, reasonable and ordinary wear and tear excepted; and not commit waste of any portion of the Hotel; 

(d) Maintain the levels and quality of the Personal Property generally at the levels and quality existing on the date hereof and keep
merchandise, supplies and inventory adequately stocked, consistent with good business practice, as if the sale of the Hotel hereunder were not to occur, including, without limitation, maintaining linens and bath towels at least at a 2-par level for
all suites or rooms of the Hotel; 
 (e) Advise Buyer promptly of any litigation, arbitration, or administrative hearing
before any court or governmental agency concerning or affecting the Hotel which is instituted or threatened after the date of this Contract or if any representation or warranty contained in this Contract shall become false; 
 (f) Not take, or purposefully omit to take, any action that would have the effect of violating any of the representations, warranties,
covenants or agreements of Seller contained in this Contract; 
 (g) Pay or cause to be paid all taxes, assessments and other
impositions levied or assessed on the Hotel or any part thereof prior to the delinquency date, and comply with all federal, state, and municipal laws, ordinances, regulations and orders relating to the Hotel; 
 (h) Not sell or assign, or enter into any agreement to sell or assign, or create or permit to exist any lien or encumbrance (other than a
Permitted Exception) on, the Property or any portion thereof; and 
 (i) Not allow any permit, receipt, license, franchise or
right currently in existence with respect to the operation, use, occupancy or maintenance of the Hotel to expire, be canceled or otherwise terminated. 
  

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 Seller shall promptly furnish to Buyer copies of all new, amended or extended FF&E Leases, Service
Contracts, Leases and other contracts or agreements (other than routine hotel room bookings entered into in the ordinary course of business) relating to the Hotel and entered into by the Existing Manager prior to Closing; provided, however, that in
the case of any of the foregoing entered into by the Existing Manager on its own behalf, only to the extent Seller has knowledge thereof or a copy of which is obtainable from the Existing Manager. Buyer shall have the right to extend the Review
Period for a period of five (5) Business Days solely in order to review any of the foregoing that are not received by Buyer at least five (5) Business Days prior to the expiration of the Review Period. Seller shall not, without first
obtaining the written approval of Buyer, which approval shall not be unreasonably withheld, enter into any new FF&E Leases, Service Contracts, Leases or other contracts or agreements related to the Hotel, or extend any existing such agreements,
unless such agreements (x) can be terminated, without penalty, upon thirty (30) days’ prior notice or (y) will expire prior to the Closing Date. 
 8.3 Third Party Consents. Prior to the Closing Date, Seller shall, at its expense, (i) obtain any and all third party consents and approvals (x) required in order to transfer the Hotel to Buyer, or
(y) which, if not obtained, would materially adversely affect the operation of the Hotel, including, without limitation, all consents and approvals referred to on Exhibit D and (ii) use best efforts to obtain all other third party
consents and approvals (all of such consents and approvals in (i) and (ii) above being referred to collectively as, the “Third Party Consents”). In particular, Seller shall, if necessary and required by the Ground
Lease, obtain the Ground Lessor’s consent to the assignment of the Ground Lease to Buyer. 
 8.4 Employees. Upon reasonable prior
notice to Seller by Buyer, Buyer and its employees, representatives and agents shall have the right to communicate with Seller’s staff, and, subject to the approval of the Existing Manager, the Hotel staff and the Existing Manager’s staff,
including without limitation the general manager, the director of sales, the engineering staff and other key management employees of the Hotel, at any time before Closing. Buyer shall not interfere with the operations of the Hotel while engaging in
such communication in a manner that materially adversely affects the operation of any Property or the Existing Management Agreements. 
 8.5
Estoppel Certificates. Seller shall obtain from (i) each tenant under any Lease affecting the Hotel (but not from current or prospective occupants of hotel rooms and suites within the Hotel) and (ii) each lessor under any FF&E
Lease for the Hotel identified by Buyer as a material FF&E Lease, the estoppel certificates substantially in the forms provided by Buyer to Seller during the Review Period, and deliver to Buyer not less than five (5) days before the
Closing. 
 8.6 Access to Financial Information. Buyer’s representatives shall have access to, and Seller and its Affiliates
shall cooperate with Buyer and furnish upon request, all financial and other information relating to the Hotel’s operations to the extent necessary to enable Buyer’s representatives to prepare audited financial statements in conformity
with Regulation S-X of the Securities and Exchange Commission (the “SEC”) and other applicable rules and regulations of the SEC and to enable them to prepare a registration statement, report or disclosure statement for filing
with the SEC on behalf of Buyer or its Affiliates, whether before or after Closing and regardless of whether such information is included in the Records to be transferred to Buyer 

  

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hereunder. Seller shall also provide to Buyer’s representative a signed representation letter in form and substance reasonably acceptable to Seller
sufficient to enable an independent public accountant to render an opinion on the financial statements related to the Hotel. Buyer will reimburse Seller for costs reasonably incurred by Seller to comply with the requirements of the preceding
sentence to the extent that Seller is required to incur costs not in the ordinary course of business for third parties to provide such representation letters. The provisions of this Section shall survive Closing or termination of this Contract.

 8.7 Bulk Sales. At Seller’s risk and expense, Seller shall take all steps necessary to comply with the requirements of a
transferor under all bulk transfer laws, if any, that are applicable to the transactions contemplated by this Contract. 
 8.8
Indemnification. If the transactions contemplated by this Contract are consummated as provided herein: 
 (a)
Indemnification of Buyer. Without in any way limiting or diminishing the warranties, representations or agreements herein contained or the rights or remedies available to Buyer for a breach hereof, Seller hereby agrees to indemnify, defend
and hold harmless Buyer and its respective designees, successors and assigns from and against all losses, judgments, liabilities, claims, damages or expenses (including reasonable attorneys’ fees) of every kind, nature and description in
existence before, on or after Closing, whether known or unknown, absolute or continent, joint or several, arising out of or relating to: 
 (i) any claim made or asserted against Buyer or any of the Property by a creditor of Seller, including any claims based on or alleging a violation of any bulk sales act or other similar laws; 
 (ii) the breach of any representation, warranty, covenant or agreement of Seller contained in this Contract; 
 (iii) any liability or obligation of Seller not expressly assumed by Buyer pursuant to this Contract; 
 (iv) any claim made or asserted by an employee of Seller arising out of Seller’s decision to sell the Property; and 
 (v) the conduct and operation by or on behalf of Seller of its Hotel or the ownership, use or operation of its Property prior to Closing.

 (b) Indemnification of Seller. Without in any way limiting or diminishing the warranties, representations or
agreements herein contained or the rights or remedies available to Seller for a breach hereof, Buyer hereby agrees, with respect to this Contract, to indemnify, defend and hold harmless Seller from and against all losses, judgments, liabilities,
claims, damages or expenses (including reasonable attorneys’ fees) of every kind, nature and description in existence before, on or after Closing, whether known or unknown, absolute or contingent, joint or several, arising out of or relating
to: 
  

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 (i) the breach of any representation, warranty, covenant or agreement of Buyer contained
in this Contract; 
 (ii) the conduct and operation by Buyer of its business at the Hotel after the Closing; and 

(iii) any liability or obligation of Buyer expressly assumed by Buyer at Closing. 
 (c) Indemnification Procedure for Claims of Third Parties. Indemnification, with respect to claims resulting from the assertion of
liability by those not parties to this Contract (including governmental claims for penalties, fines and assessments), shall be subject to the following terms and conditions: 
 (i) The party seeking indemnification (the “Indemnified Party”) shall give prompt written notice to the party or
parties from which it is seeking indemnification (the “Indemnifying Party”) of any assertion of liability by a third party which might give rise to a claim for indemnification based on the foregoing provisions of this Section 8.8,
which notice shall state the nature and basis of the assertion and the amount thereof, to the extent known; provided, however, that no delay on the part of the Indemnified Party in giving notice shall relieve the Indemnifying Party of any obligation
to indemnify unless (and then solely to the extent that) the Indemnifying Party is prejudiced by such delay. 
 (ii) If in any
action, suit or proceeding (a “Legal Action”) the relief sought is solely the payment of money damages, and if the Indemnifying Party specifically agrees in writing to indemnify such Indemnified Party with respect thereto and
demonstrates to the reasonable satisfaction of such Indemnified Party its financial ability to do so, the Indemnifying Party shall have the right, commencing thirty (30) days after such notice, at its option, to elect to settle, compromise or
defend, pursuant to this paragraph, by its own counsel and at its own expense, any such Legal Action involving such Indemnified Party’s asserted liability. If the Indemnifying Party does not undertake to settle, compromise or defend any such
Legal Action, such settlement, compromise or defense shall be conducted in the sole discretion of such Indemnified Party, but such Indemnified Party shall provide the Indemnifying Party with such information concerning such settlement, compromise or
defense as the Indemnifying Party may reasonably request from time to time. If the Indemnifying Party undertakes to settle, compromise or defend any such asserted liability, it shall notify such Indemnified Party in writing of its intention to do so
within thirty (30) days of notice from such Indemnified Party provided above. 
 (iii) Notwithstanding the provisions of
the previous subsection of this Contract, until the Indemnifying Party shall have assumed the defense of the Legal Action, the defense shall be handled by the Indemnified Party. Furthermore, (x) if the Indemnified Party shall have reasonably
concluded that there are likely to be defenses available to it that are different from or in addition to those available to the Indemnifying Party; (y) if the Legal Action involves other than money damages and seeks injunctive or 

  

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other equitable relief; or (z) if a judgment against Buyer, as the Indemnified Party, in the Legal Action will, in the good faith opinion of Buyer,
establish a custom or precedent which will be adverse to the best interest of the continuing business of the Hotel, the Indemnifying Party, shall not be entitled to assume the defense of the Legal Action and the defense shall be handled by the
Indemnified Party, provided that, in the case of clause (z), the Indemnifying Party shall have the right to approve legal counsel selected by the Indemnified Party, such approval not to be unreasonably withheld, delayed or conditioned. If the
defense of the Legal Action is handled by the Indemnified Party under the provisions of this subsection, the Indemnifying Party shall pay all legal and other expenses reasonably incurred by the Indemnified Party in conducting such defense.

 (iv) In any Legal Action initiated by a third party and defended by the Indemnified Party (w) the Indemnified Party
shall have the right to be represented by advisory counsel and accountants, at its own expense, (x) the Indemnifying Party shall keep the Indemnified Party fully informed as to the status of such Legal Action at all stages thereof, whether or
not the Indemnified Party is represented by its own counsel, (y) the Indemnifying Party shall make available to the Indemnified Party and its attorneys, accounts and other representatives, all books and records of Seller relating to such Legal
Action and (z) the parties shall render to each other such assistance as may be reasonably required in order to ensure the proper and adequate defense of such Legal Action. 
 (v) In any Legal Action initiated by a third party and defended by the Indemnifying Party, the Indemnifying Party shall not make
settlement of any claim without the written consent of the Indemnified Party, which consent shall not be unreasonably withheld. Without limiting the generality of the foregoing, it shall not be deemed unreasonable to withhold consent to a settlement
involving injunctive or other equitable relief against Buyer or its respective assets, employees, Affiliates or business, or relief which Buyer reasonably believes could establish a custom or precedent which will be adverse to the best interests of
its continuing business. 
 8.9 Escrow Funds. To provide for the timely payment of any post-closing claims by Buyer against Seller
hereunder, at Closing, Seller shall deposit an amount equal to Two Hundred Thousand and No/100 Dollars ($200,000.00) (the “Escrow Funds”) which shall be withheld from the Purchase Price payable to Seller and shall be
deposited for a period of nine (9) months in an escrow account with the Title Company pursuant to an escrow agreement reasonably satisfactory in form and substance to Buyer and Seller (the “Post-Closing Agreement”),
which escrow and Post-Closing Agreement shall be established and entered into at Closing and shall be a condition to Buyer’s obligations under this Contract. If no claims have been asserted by Buyer against Seller, or all such claims have been
satisfied, within such 9-month period, the Escrow Funds deposited by Seller shall be released to Seller. 
 8.10 Liquor Licenses. As a
condition to Buyer’s obligations under this Contract, (i) the Manager or an Affiliate thereof approved by Buyer shall have or shall have obtained all liquor licenses and alcoholic beverage licenses necessary or desirable to operate any
restaurants, bars and lounges presently located within the Hotel (collectively, the “Liquor Licenses”) and, in the case of an Affiliate of the Manager, the Hotel has the right to use such Liquor License, (ii) if 

  

 23 

 
permitted under the laws of the jurisdiction in which the Hotel is located, the Manager shall execute and file any and all necessary forms, applications and
other documents (and Seller shall cooperate with the Manager in filing such forms, applications and other documents) with the appropriate liquor and alcoholic beverage authorities prior to Closing so that the Liquor Licenses remain in full force and
effect upon completion of Closing. 
 8.11 Ground Lease. On the Closing Date, Seller shall transfer and assign its right, title and
interest in and to the Ground Lease and Buyer shall assume Seller’s obligations as lessee under the Ground Lease. 
 ARTICLE IX

 CONDITIONS FOR CLOSING 
 9.1 Buyer’s Conditions for Closing. Unless otherwise waived in writing, and without prejudice to Buyer’s right to cancel this Contract during the Review Period, the duties and obligations of Buyer to proceed to Closing
under the terms and provisions of this Contract are and shall be expressly subject to strict compliance with, and satisfaction or waiver of, each of the conditions and contingencies set forth in this Section 9.1, each of which shall be deemed
material to this Contract. In the event of the failure of any of the conditions set forth in this Section 9.1 or of any other condition to Buyer’s obligations provided for in this Contract, which condition is not waived in writing by
Buyer, Buyer shall have the right at its option to declare this Contract terminated, in which case the Earnest Money Deposit and any interest thereon shall be immediately returned to Buyer and each of the parties shall be relieved from further
liability to the other, except as otherwise expressly provided herein, with respect to this Contract. 
 (a) All of
Seller’s representations and warranties contained in or made pursuant to this Contract shall be true and correct in all material respects as if made again on the Closing Date. 
 (b) Buyer shall have received all of the instruments and conveyances listed in Section 10.2. 
 (c) Seller shall have performed, observed and complied in all material respects with all of the covenants, agreements, closing
requirements and conditions required by this Contract to be performed, observed and complied with by Seller, as and when required hereunder. 
 (d) All Liquor Licenses shall be in full force and effect and shall remain in full force and effect following Closing and shall have been or shall be transferred to, or new Liquor Licenses issued to, the Manager or an
Affiliate thereof approved by Buyer at or as of Closing, and Buyer shall have received satisfactory evidence thereof. 
 (e)
Third Party Consents in form and substance satisfactory to Buyer shall have been obtained and furnished to Buyer. 
 (f) The
Escrow Funds shall have been deposited in the escrow account pursuant to the Post-Closing Agreement and the parties thereto shall have entered into the Post-Closing Agreement. 
  

 24 

 (g) The Existing Management Agreement and the Existing Franchise Agreement shall have
been terminated. 
 (h) Buyer and the Manager shall have executed and delivered the New Management Agreement and Buyer and the
Franchisors shall have executed and delivered the New Franchise Agreements, in each case upon terms and conditions acceptable to Buyer in its sole and absolute discretion. 
 9.2 Seller’s Conditions for Closing. Unless otherwise waived in writing, and without prejudice to Seller’s right to cancel this Contract during the Review Period, the duties and obligations of Seller
to proceed to Closing under the terms and provisions of this Contract are and shall be expressly subject to strict compliance with, and satisfaction or waiver of, each of the conditions and contingencies set forth in this Section 9.2, each of
which shall be deemed material to this Contract. In the event of the failure of any of the conditions set forth in this Section 9.2, which condition is not waived in writing by Seller, Seller shall have the right at its option to declare this
Contract terminated and null and void, in which case the remaining Earnest Money Deposit and any interest thereon shall be immediately returned to Buyer and each of the parties shall be relieved from further liability to the other, except as
otherwise expressly provided herein. 
 (a) All of Buyer’s representations and warranties contained in or made pursuant
to this Contract shall be true and correct in all material respects as if made again on the Closing Date. 
 (b) Seller shall
have received all of the money, instruments and conveyances listed in Section 10.3. 
 (c) Buyer shall have performed,
observed and complied in all material respects with all of the covenants, agreements, closing requirements and conditions required by this Contract to be performed, observed and complied with by Buyer, as and when required hereunder. 
 ARTICLE X 
 CLOSING AND CONVEYANCE

 10.1 Closing. Unless otherwise agreed by Buyer and Seller, the Closing on the Property shall occur on a date selected by Buyer
that is not later than fifteen (15) days after expiration of the Review Period, provided that all conditions to Closing by Buyer hereunder have been satisfied. Buyer will provide Seller at least five (5) days prior written notice of the
Closing Date selected by Buyer. The date on which the Closing is to occur as provided in this Section 10.1, or such other date as may be agreed upon by Buyer and Seller, is referred to in this Contract as the “Closing
Date” for the Property. The Closing shall be held at 10:00 a.m. at the offices of the Title Company, or as otherwise determined by Buyer and Seller. 
 10.2 Deliveries of Seller and Indemnitor. At Closing, Seller or Indemnitor, as applicable, shall deliver to Buyer the following, and, as appropriate, all instruments shall be properly executed and conveyance
instruments to be acknowledged in recordable form (the 

  

 25 

 
terms, provisions and conditions of all instruments not attached hereto as Exhibits shall be mutually agreed upon by Buyer and Seller prior to such Closing):

 (a) Deed and Lease Assignment. A Deed and lease assignment conveying to Buyer fee simple title to the Improvements
and leasehold title to the Land, subject only to the Permitted Exceptions (the “Deed”). 
 (b)
Bills of Sale. Bills of sale to Buyer and/or its designated Lessee, conveying title to the tangible Personal Property (other than the alcoholic beverage inventories, which, at Buyer’s election, shall be transferred by Seller to the
Manager as holder of the Liquor Licenses required for operation of the Hotel). 
 (c) Existing Management and Franchise
Agreements. The termination of the Existing Management Agreement and the Existing Franchise Agreement. 
 (d) General
Assignments. Assignments of all of Seller’s right, title and interest in and to all FF&E Leases, Service Contracts and Leases identified on Exhibit C hereto (the “Hotel Contracts”). The assignment shall
also be a general assignment and shall provide for the assignment of all of Seller’s right, title and interest in all Records, Warranties, Licenses, Tradenames, Contracts, Plans and Specs and all other intangible Personal Property applicable to
the Hotel. 
 (e) FIRPTA; 1099. A FIRPTA Affidavit or Transferor’s Certificate of Non-Foreign Status as required
by Section 1445 of the Internal Revenue Code and an IRS Form 1099. 
 (f) Title Company Documents. All affidavits,
gap indemnity agreements and other documents reasonably required by the Title Company. At Buyer’s sole expense, Buyer shall have obtained an irrevocable commitment directly from the Title Company (or in the event the Title Company is not
willing to issue said irrevocable commitment, then from such other national title company as may be selected by either Buyer or Seller) for issuance of an Owner’s Policy of Title Insurance to Buyer insuring good and marketable fee simple
absolute title to the Real Property constituting part of the Property, subject only to the Permitted Exceptions in the amount of the Purchase Price. 
 (g) Possession; Estoppel Certificates. Possession of the Property, subject only to rights of guests in possession and tenants pursuant to written leases included in the Leases, and estoppel certificates from
tenants under Leases and the lessors under FF&E Leases in form and substance acceptable to Buyer. 
 (h) Vehicle
Titles. The necessary certificates of titles duly endorsed for transfer together with any required affidavits and other documentation necessary for the transfer of title or assignment of leases from Seller to Buyer of any motor vehicles used in
connection with the Hotel’s operations. 
 (i) Authority Documents. Certified copy of resolutions of the Members
or Managers of Seller authorizing the sale of the Property contemplated by this Contract, and/or other evidence reasonably satisfactory to Buyer and the Title Company that the person or persons 

  

 26 

 
executing the closing documents on behalf of Seller have full right, power and authority to do so, along with a certificate of good standing of Seller from
the State in which the Property is located. 
 (j) Miscellaneous. Such other instruments as are contemplated by this
Contract to be executed or delivered by Seller, reasonably required by Buyer or the Title Company, or customarily executed in the jurisdiction in which the Hotel is located, to effectuate the conveyance of property similar to the Hotel, with the
effect that, after the Closing, Buyer will have succeeded to all of the rights, titles, and interests of Seller related to the Hotel and Seller will no longer have any rights, titles, or interests in and to the Hotel. 
 (k) Plans, Keys, Records, Etc. To the extent not previously delivered to and in the possession of Buyer, all Contracts, Plans and
Specs, all keys for the Hotel (which keys shall be properly tagged for identification), all Records, including, without limitation, all Warranties, Licenses, Leases, FF&E Leases and Service Contracts for the Hotel. 
 (l) Closing Statements. Seller’s Closing Statement, and a certificate confirming the truth of Seller’s representations
and warranties hereunder as of the Closing Date. 
 (m) Tax Clearance. Such certification as may be available under
applicable law to enable Buyer to avoid any an all successor or transferee liability for Taxes owed by Seller. Alternatively, Seller may provide such evidence or other documentation acceptable to Buyer indicating that there is no potential exposure
for successor or transferee liability for Taxes. 
 10.3 Buyer’s Deliveries. At Closing of the Hotel, Buyer shall deliver the
following: 
 (a) Purchase Price. The balance of the Purchase Price, adjusted for the adjustments provided for in
Section 12.1, below, and less any sums to be deducted therefrom as provided in Section 2.4. 
 (b) Authority
Documents. Certified copy of resolutions of the Board of Directors of Buyer authorizing the purchase of the Hotel contemplated by this Contract, and/or other evidence satisfactory to Seller and the Title Company that the person or persons
executing the closing documents on behalf of Buyer have full right, power and authority to do so. 
 (c) Miscellaneous.
Such other instruments as are contemplated by this Contract to be executed or delivered by Buyer, reasonably required by Seller or the Title Company, or customarily executed in the jurisdiction in which the Hotel is located, to effectuate the
conveyance of property similar to the Hotel, with the effect that, after the Closing, Buyer will have succeeded to all of the rights, titles, and interests of Seller related to the Hotel and Seller will no longer have any rights, titles, or
interests in and to the Hotel. Buyer shall provide evidence of its execution of a New Franchise Agreement with the Franchisor. 
 (d) Closing Statements. Buyer’s Closing Statement, and a certificate confirming the truth of Buyer’s representations and warranties hereunder as of the Closing Date. 
  

 27 

 ARTICLE XI 
 COSTS 
 All Closing costs shall be paid as set forth below: 
 11.1 Seller’s Costs. In connection with the sale of the Property contemplated under this Contract, Seller shall be responsible for all
transfer and recordation taxes, including, without limitation, all transfer, sales, use or bulk transfer taxes or like taxes on or in connection with the transfer of the Personal Property constituting part of the Property pursuant to the Bill of
Sale, in each case except as otherwise provided in Section 12, and all accrued taxes of Seller prior to Closing and income, sales and use taxes and other such taxes of Seller attributable to the sale of the Property to Buyer. Seller shall be
responsible for all costs related to the termination of the Existing Management Agreement as provided in Article V. Seller shall also be responsible for any fees for the performance of the PIP review and report by the Franchisor, as well as costs
and expenses of its attorneys, accountants, appraisers and other professionals, consultants and representatives. Seller shall also be responsible for payment of all prepayment penalties and other amounts payable in connection with the pay-off of any
liens and/or indebtedness encumbering the Property. Any Franchisor escrows, including PIP escrows, will be transferred to Buyer. Seller shall credit to Buyer $150,000 at Closing. 
 11.2 Buyer’s Costs. In connection with the purchase of the Property contemplated under this Contract, Buyer shall be responsible for the
costs and expenses of its attorneys, accountants and other professionals, consultants and representatives. Buyer shall also be responsible for the costs and expenses in connection with the preparation of any environmental report, any update to the
survey and the costs and expenses of preparation of the title insurance commitment and the issuance of the title insurance policy contemplated by Article IV and the per page recording charges and clerk’s fee for the Deed (if applicable). Buyer
shall be responsible for any application fees in connection with the New Franchise Agreement. 
 ARTICLE XII 
 ADJUSTMENTS 
 12.1 Adjustments.
Unless otherwise provided herein, at Closing, adjustments between the parties shall be made as of 12:01 a.m. on the Closing Date (the “Cutoff Time”), with the income and expenses accrued prior to the Closing Date being
allocated to Seller and the income and expenses accruing on and after the Closing Date being allocated to Buyer, all as set forth below. All of such adjustments and allocations shall be made in cash at Closing and shall be collected through and/or
adjusted in accordance with the terms of the Existing Management Agreement. Except as otherwise expressly provided herein, all apportionments and adjustments shall be made on an accrual basis in accordance with generally accepted accounting
principles. Buyer and Seller shall cooperate in good faith to determine the apportionments, allocations, prorations and adjustments as of the Cutoff Time. 
 (a) Taxes. All real estate taxes, personal property taxes, or any other taxes and special assessments (special or otherwise) of any nature upon the Property levied, assessed or pending for the calendar year in
which the Closing occurs (including the period prior to Closing, regardless of when due and payable) shall be prorated as of the Cutoff Time and, if no tax bills or assessment statements for such calendar year are available, such amounts shall be

  

 28 

 
estimated on the basis of the best available information for such taxes and assessments that will be due and payable on the Hotel for the calendar year in
which Closing occurs. 
 (b) Utilities. All suppliers of utilities shall be instructed to read meters or otherwise
determine the charges owing as of the Closing Date for services prior thereto, which charges shall be allocated to Seller. Charges accruing after Closing shall be allocated to Buyer. If elected by Seller, Seller shall be given credit, and Buyer
shall be charged, for any utility deposits transferred to and received by Buyer at Closing. 
 (c) Income/Charges. All
rents, income and charges receivable or payable under any Leases and Hotel Contracts applicable to the Property, and any deposits, prepayments and receipts thereunder, shall be prorated between Buyer and Seller as of the Cutoff Time. 
 (d) Accounts. All working capital accounts, reserve accounts and escrow accounts (excluding amounts held in tax and insurance
escrow accounts and utility deposits to the extent excluded from the definition of Deposits or any accounts included in the definition of Excluded Assets), shall become the property of Buyer, without additional charge to Buyer and without Buyer
being required to fund the same. 
 (e) Guest Ledger. Subject to (f) below, all accounts receivable of registered
guests at the Hotel who have not checked out and were occupying rooms as of the Cutoff Time, shall be prorated as provided herein. 
 (f) Room Rentals. All receipts from guest room rentals and other suite revenues for the night in which the Cutoff Time occurs shall belong to Seller, but Seller shall provide Buyer credit at Closing equal to the reasonable expenses
to be incurred by Buyer to clean such guests’ rooms. 
 (g) Advance Deposits. All prepaid rentals, room rental
deposits, and all other deposits for advance registration, banquets or future services to be provided on and after the Closing Date shall be credited to Buyer. 
 (h) Accounts Receivable. To the extent not apportioned at Closing and subject to (e) and (f) above, all accounts
receivable and credit card claims as of the Cutoff Time shall remain the property of Seller, and Seller and Buyer agree that the monies received from debtors owing such accounts receivable balances after Closing, unless otherwise provided in the New
Management Agreement, shall be applied as expressly provided in such remittance, or if not specified then to the Seller’s outstanding invoices to such account debtors in chronological order beginning with the oldest invoices, and thereafter, to
Buyer’s account. 
 (i) Accounts Payable. To the extent not apportioned at Closing, any indebtedness, accounts
payable, liabilities or obligations of any kind or nature related to Seller or the Property for the periods prior to and including the Closing Date shall be retained by Seller and promptly allocated to Seller and evidence thereof shall be provided
to Buyer, and Buyer shall not be or become liable therefor, except as expressly assumed by Buyer pursuant to this Contract, and invoices received in the ordinary course of business prior to Closing shall be allocated to Seller at Closing.

  

 29 

 (j) Restaurants, Bars, Machines, Other Income.
All monies received in connection with bar, restaurant, banquet and similar and other services at the Hotel (other than amounts due from any guest and included in room rentals) prior to the close of business for each such operation for the night in
which the Cutoff Time occurs shall belong to Seller, and all other receipts and revenues (not previously described in this Section 12.1) from the operation of any department of the Hotel shall be prorated between Seller and Buyer at Closing.

 (k) Advertising; Licenses. Prepaid fees or other charges for advertising or licenses shall be apportioned on the
basis of the fiscal period covered by such license or advertising. 
 12.2 Reconciliation and Final Payment. Seller and Buyer shall
reasonably cooperate after Closing to make a final determination of the allocations and prorations required under this Contract within one hundred eighty (180) days after the Closing Date. Upon the final reconciliation of the allocations and
prorations under this Section, the party which owes the other party any sums hereunder shall pay such party such sums within ten (10) days after the reconciliation of such sums. The obligations to calculate such prorations, make such
reconciliations and pay any such sums shall survive the Closing. 
 12.3 Employees. Unless Buyer or the New Manager expressly agrees
otherwise, none of the employees of the Hotel shall become employees of Buyer, as of the Closing Date; instead, if New Manager so elects, such employees shall become employees of the New Manager. Seller shall not give notice under any applicable
federal or state plant closing or similar act, including, if applicable, the Worker Adjustment and Retraining Notification Provisions of 29 U.S.C., Section 2102, the parties having agreed that a mass layoff, as that term is defined in 29
U.S.C., 2101(a)(3), will not have occurred. Any liability for payment of all wages, salaries and benefits, including, without limitation, accrued vacation pay, sick leave, bonuses, pension benefits, COBRA rights, and other benefits accrued or earned
by and due to employees at the Hotel through the Cutoff Time, together with F.I.C.A., unemployment and other taxes and benefits due with respect to such employees for such period, shall be charged to Seller, in accordance with the Existing
Management Agreement, for the purposes of the adjustments to be made as of the Cutoff Time. All liability for wages, salaries and benefits of the employees hired by New Manager and accruing in respect of and attributable to the period from and after
Closing shall be charged to Buyer, in accordance with the New Management Agreement. To the extent applicable, all such allocations and charges shall be adjusted in accordance with the provisions of the Existing Management Agreement. 
 ARTICLE XIII 
 CASUALTY AND
CONDEMNATION 
 13.1 Risk of Loss; Notice. Prior to Closing and the delivery of possession of the Property to Buyer in accordance
with this Contract, all risk of loss to the Property (whether by casualty, condemnation or otherwise) shall be borne by Seller. In the event that (a) any loss or damage to the Hotel shall occur prior to the Closing Date as a result of fire or
other casualty, or (b) Seller receives notice that a governmental authority has initiated or threatened to initiate a condemnation proceeding affecting the Hotel, Seller shall give Buyer immediate written notice of such loss, damage or
condemnation proceeding (which notice shall include a certification of 

  

 30 

 
(i) the amounts of insurance coverages in effect with respect to the loss or damage and (ii) if known, the amount of the award to be received in such
condemnation). 
 13.2 Buyer’s Termination Right. If, prior to Closing and the delivery of possession of the Property to Buyer in
accordance with this Contract, (a) any condemnation proceeding shall be pending against a substantial portion of the Hotel or (b) there is any substantial casualty loss or damage to the Hotel, Buyer shall have the option to terminate this
Contract, provided Buyer delivers written notice to Seller of its election within twenty (20) days after the date Seller has delivered Buyer written notice of any such loss, damage or condemnation as provided above, and in such event, the
Earnest Money Deposit, and any interest thereon, shall be delivered to Buyer and thereafter, except as expressly set forth herein, no party shall have any further obligation or liability to the other under this Contract. In the context of
condemnation, “substantial” shall mean condemnation of such portion of a Hotel (or access thereto) as could, in Buyer’s reasonable judgment, render use of the remainder impractical or unfeasible for the uses herein contemplated, and,
in the context of casualty loss or damage, “substantial” shall mean a loss or damage in excess of One Hundred Thousand and No/100 Dollars ($100,000.00) in value. 
 13.3 Procedure for Closing. If Buyer shall not timely elect to terminate this Contract under Section 13.2 above, or if the loss, damage or
condemnation is not substantial, each applicable Seller agrees to pay to Buyer at the Closing all insurance proceeds or condemnation awards which Seller has received as a result of the same, plus an amount equal to the insurance deductible, and
assign to Buyer all insurance proceeds and condemnation awards payable as a result of the same, in which event the Closing shall occur without Seller replacing or repairing such damage. In the case of damage or casualty, at Buyer’s election,
Seller shall repair and restore the Property to its condition immediately prior to such damage or casualty and shall assign to Buyer all excess insurance proceeds. 
 ARTICLE XIV 
 DEFAULT REMEDIES 
 14.1 Buyer Default. If Buyer defaults under this Contract after the Review Period, and such default continues for thirty (30) days following
written notice from Seller (provided no notice shall extend the time for Closing), then at Seller’s election by written notice to Buyer, this Contract shall be terminated and of no effect, in which event the Earnest Money Deposit, including any
interest thereon, shall be paid to and retained by the Seller as Seller’s sole and exclusive remedy hereunder, and as liquidated damages for Buyer’s default or failure to close, and both Buyer and Seller shall thereupon be released from
all obligations hereunder. 
 14.2 Seller Default. If Seller defaults under this Contract, and such default continues for thirty
(30) days following written notice from Buyer, the Buyer, at its option, shall elect either (a) to terminate this Contract and receive a full refund of the Earnest Money Deposit plus a reimbursement from Seller for Buyer’s actual,
reasonable and documented out-of-pocket third party costs and expenses (including, without limitation, reasonable attorneys’ fees), up to a maximum aggregate amount of One Hundred Thousand Dollars ($100,000), incurred for due diligence and
activities relating to the enforcement of Buyer’s rights under this Contract from the Execution Date through the date on which it receives payment in full from Seller, provided that, Buyer shall not be entitled to the reimbursement of the
foresaid out-of-pocket costs and expenses 
  

 31 

 
if this Contract is terminated by Buyer prior to the expiration of the Review Period unless the breach or default that gives rise to the termination is a
result of Seller’s bad faith or intentional or willful misconduct, and all other rights and obligations of the Seller and the Buyer hereunder (except those that expressly survive termination of this Contract ) shall terminate immediately, or
(b) to waive its right to terminate and, instead, to proceed to Closing, or (c) to seek specific performance of the consummation of the transaction contemplated herein. 
 14.3 Attorney’s Fees. Anything to the contrary herein notwithstanding, if it shall be necessary for either the Buyer or Seller to employ an
attorney to enforce its rights pursuant to this Contract because of the default of the other party, and the non-defaulting party is successful in enforcing such rights, then the defaulting party shall reimburse the non-defaulting party for the
non-defaulting party’s reasonable attorneys’ fees, costs and expenses. 
 ARTICLE XV 
 NOTICES 
 All notices required herein
shall be deemed to have been validly given, as applicable: (i) if given by telecopy, when the telecopy is transmitted to the party’s telecopy number specified below and confirmation of complete receipt is received by the transmitting party
during normal business hours or on the next Business Day if not confirmed during normal business hours, (ii) if hand delivered to a party against receipted copy, when the copy of the notice is receipted or rejected, (iii) if given by
certified mail, return receipt requested, postage prepaid, two (2) Business Days after it is posted with the U.S. Postal Service at the address of the party specified below or (iv) on the next delivery day after such notices are sent by
recognized and reputable commercial overnight delivery service marked for next day delivery, return receipt requested or similarly acknowledged: 
  

			
	 If to Buyer:
	  	 Apple Seven Hospitality Ownership, Inc.
 814 E. Main
Street
 Richmond, Virginia 23219
 Attention: Sam
Reynolds
 Fax No.: (804) 344-8129

		
	 with a copy to:
	  	 Apple Seven Hospitality Ownership, Inc.
 814 E. Main
Street
 Richmond, Virginia 23219
 Attention: Legal
Dept.
 Fax No.: (804) 344-8129

		
	 If to Seller:
	  	 Linchris Hotel Partners of L.I., LLC
 c/o Linchris Hotel
Corp.
 269 Hanover Street, #2
 Hanover, MA 02339
 Attn: Christopher G. Gistis
 Fax No.: (781) 826-2411

  

 32 

			
	 with a copy to:
	  	 Orr & Reno, P.A.
 One Eagle Square
 P. O. Box 3550
 Concord, NH 03302-3550
 Attn: Peter F. Burger, Esquire
 Fax No.: (603) 224-2318

 Addresses may be changed by the parties hereto by written notice in accordance with this Section.

 ARTICLE XVI 
 MISCELLANEOUS 
 16.1 Performance. Time is of the essence in the performance and satisfaction of each and every
obligation and condition of this Contract. 
 16.2 Binding Effect; Assignment. This Contract shall be binding upon and shall inure to
the benefit of each of the parties hereto, their respective successors and assigns. 
 16.3 Entire Agreement. This Contract and the
Exhibits constitute the sole and entire agreement between Buyer and Seller with respect to the subject matter hereof. No modification of this Contract shall be binding unless signed by both Buyer and Seller. 
 16.4 Governing Law. The validity, construction, interpretation and performance of this Contract shall in all ways be governed and determined in
accordance with the laws of the state in which the Property is located (without regard to conflicts of law principles). 
 16.5
Captions. The captions used in this Contract have been inserted only for purposes of convenience and the same shall not be construed or interpreted so as to limit or define the intent or the scope of any part of this Contract. 
 16.6 Confidentiality. Except as either party may reasonably determine is required by law (including without limitation laws and regulations
applicable to Buyer or its Affiliates who may be public companies): (i) prior to Closing, Buyer and Seller shall not disclose the existence of this Contract or their respective intentions to purchase and sell the Property or generate or
participate in any publicity or press release regarding this transaction, except to Buyer’s and Seller’s legal counsel and lender, Buyer’s consultants and agents, the Manager, the Existing Manager, the Franchisor and the Title Company
and except as necessitated by Buyer’s Due Diligence Examination, unless both Buyer and Seller agree in writing and as necessary to effectuate the transactions contemplated hereby and (ii) following Closing, the parties shall coordinate any
public disclosure or release of information related to the transactions contemplated by this Contract, and no such disclosure or release shall be made without the prior written consent of Buyer, and no press release shall be made without the prior
written approval of Buyer and Seller. 
  

 33 

 16.7 Closing Documents. To the extent any Closing documents are not attached hereto at the time of
execution of this Contract, Buyer and Seller shall negotiate in good faith with respect to the form and content of such Closing documents prior to Closing. 
 16.8 Counterparts. This Contract may be executed in counterparts by the parties hereto, and by facsimile signature, and each shall be considered an original and all of which shall constitute one and the same
agreement. 
 16.9 Severability. If any provision of this Contract shall, for any reason, be adjudged by any court of competent
jurisdiction to be invalid or unenforceable, such judgment shall not affect, impair or invalidate the remainder of this Contract but shall be confined in its operation to the provision or provisions hereof directly involved in the controversy in
which such judgment shall have been rendered, and this Contract shall be construed as if such provision had never existed, unless such construction would operate as an undue hardship on Seller or Buyer or would constitute a substantial deviation
from the general intent of the parties as reflected in this Contract. 
 16.10 Interpretation. For purposes of construing the
provisions of this Contract, the singular shall be deemed to include the plural and vice versa and the use of any gender shall include the use of any other gender, as the context may require. 
 16.11 (Intentionally Omitted). 
 16.12
Further Acts. In addition to the acts, deeds, instruments and agreements recited herein and contemplated to be performed, executed and delivered by Buyer and Seller, Buyer and Seller shall perform, execute and deliver or cause to be
performed, executed and delivered at the Closing or after the Closing, any and all further acts, deeds, instruments and agreements and provide such further assurances as the other party or the Title Company may reasonably require to consummate the
transaction contemplated hereunder. 
 16.13 Joint and Several Obligations. If Seller consists of more than one person or entity, each
such person or entity shall be jointly and severally liable with respect to the obligations of Seller under this Contract. 
 16.14 Notice
of Proposed Listing. In the event that the sale of the Property contemplated by this Contract is consummated, if at any time during the five (5) year period commencing on the date of execution of this Contract by Buyer and Seller, Seller or
any of its Affiliates propose to list for sale any hotel property or properties owned, acquired, constructed or developed by Seller or their Affiliates and located within a ten (10)-mile radius of the Hotel (any such other hotel property being
referred to as an “Other Property”), Seller shall promptly deliver to Buyer written notice thereof and Buyer shall have the right to see and participate in the offering and/or otherwise make an offer to purchase any such
Other Property. 
 [Signatures Begin on Following Page] 
  

 34 

 IN WITNESS WHEREOF, this Contract has been executed, to be effective as of the date first above written, by the Buyer and
Seller. 
  

			
	SELLER:
	
	LINCHRIS HOTEL PARTNERS OF L.I., LLC
		
	By:	 	/s/ Christopher G. Gistis
	Name:	 	Christopher G. Gistis
	Title:	 	Manager
	
	BUYER:
	
	APPLE SEVEN HOSPITALITY OWNERSHIP, INC., a Virginia corporation
		
	By:	 	/s/ Justin G. Knight
	 Name:
 Title:
	 	Justin G. Knight
	 	President

  

 35 

 EXHIBIT “A” 
 LEGAL DESCRIPTION OF LAND 
 All that certain plot, piece or parcel of land, lying and being at
Ronkonkoma, in the Town of Islip, Suffolk County, New York, being bounded and described as follows: 
 Beginning at the point formed by the intersection of
the westerly line of Ocean Avenue with the northerly taking line of Veterans Memorial Highway, N.Y.S. Route 454. 
 Running thence from said point of
beginning along said northerly taking line of Veterans Memorial Highway the following two courses and distances: 
 South 43° 56’ 09” West
89.56 feet to a point; 
 North 87° 14’ 13” West 436.00 feet to a point; 
 Thence along land now or formerly of MacArthur Center Assoc. the following courses and distances: 
 North 02° 45’
47” East 367.00 feet to a point; 
 South 87° 14’ 13” East 66.87 feet to a point; 
 North 02° 45’ 47” East 286.43 feet to a point along the southerly side of land now or formerly of Underman-Bass, Inc. 
 Thence along the southerly side of land now or formerly of Underman-Bass, Inc. North 83° 31’ 50” East 328.52 feet to a point and the westerly line of Ocean
Avenue; 
 Thence along said westerly line of Ocean Avenue South 06° 28’ 10” East 647.11 feet to the point of beginning. 

 EXHIBIT B 
 LIST OF FF&E 
 To be provided by Seller and approved by Buyer during the Review Period

  

 2 

 EXHIBIT C 
 LIST OF HOTEL CONTRACTS 
 Operating Agreements 
  

									
	 Vendor
	  	 Purpose
	  	 Expires
	  	 Cost
	  	 Revenue

	 Citibank
	  	System 21	  	8/06	  	$2,600/mo	  	
	 Pitney Bowes
	  	Postage Machines	  	10/08	  	$138/mo	  	
	 Lodgenet
	  	Inroom Entertainment	  	06/10	  	amount varies	  	
	 Schindler Elevator
	  	Elevator Maintenance	  	06/09	  	$620/mo with escalators	  	
	 Majestic Landscaping
	  	Landscaping	  	12/06	  	$761.25/mo	  	
	 Avaya
	  	Phone System	  	07/06	  	$2,615/mo	  	
	 Ford Credit
	  	Van	  	04/07	  	$756/mo	  	
	 Goldentree Comm
	  	High Speed Internet	  	9/06	  	$2,100/yr	  	
	 Hospitality Solutions Intl
	  	Micros Maintenance	  	07/07	  	$1,795/yr	  	
	 Hilton Inns, Inc.
	  	Franchise Agreement	  	10/2022	  	amount varies	  	
	 Nextel of New York, Inc.
	  	communications site lease	  	5/2010 +/-	  		  	$2,380.00
		  		  		  		  	(monthly)
	 Ronkonkoma Realty
	  		  		  		  	
	 Venture I, L.L.C.
	  	ground lease	  	12/2098	  	See Exhibit D	  	

 EXHIBIT D 
 CONSENTS AND APPROVALS 
 A. Consent Under Hotel Contract 
 To be provided by Seller and approved by Buyer during the Review Period 
 B. Consents Under Other Contracts 
 To be provided by Seller and approved by Buyer during the Review Period 
 C. Governmental Approvals and Consents 
 To be provided by
Seller and approved by Buyer during the Review Period 

 EXHIBIT E 
 ENVIRONMENTAL REPORTS 
 To be provided by Seller and approved by Buyer during the Review Period

 EXHIBIT F 
 CLAIMS OR LITIGATION PENDING 
 To be provided by Seller and approved by Buyer during the Review
Period 
 Pending Tax Audit between Seller and State of New York 

 EXHIBIT G 
 ESCROW AGREEMENT 
 THIS ESCROW AGREEMENT (this “Agreement”) made the
30th day of October, 2006 by and among LINCHRIS HOTEL PARTNERS OF L.I., LLC (“Seller”), APPLE SEVEN HOSPITALITY OWNERSHIP, INC. a Virginia corporation, or its assigns (“Buyer”), and LANDAMERICA
AMERICAN TITLE COMPANY (“Escrow Agent”). 
 R E C I T A L S 
 WHEREAS, pursuant to the provisions of Section 2.5 of that certain Purchase Contract dated October 30, 2006 (the “Contract”) between
Seller and Buyer (the “Parties”), the Parties have requested Escrow Agent to hold in escrow in accordance with the provisions, upon the terms, and subject to the conditions, of this Agreement, the Earnest Money Deposit as
defined in the Contract (the “Deposit”); and 
 WHEREAS, the Deposit shall be delivered to Escrow Agent in accordance
with the terms of the Contract and this Agreement. 
 NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the Parties hereto agree as follows: 
 1. Seller and Buyer hereby appoint Escrow Agent to serve as escrow agent
hereunder, and the Escrow Agent agrees to act as escrow agent hereunder in accordance with the provisions, upon the terms and subject to the conditions of this Agreement. The Escrow Agent hereby acknowledges receipt of the Deposit. Escrow Agent
shall invest the Deposit as directed by Buyer. 
 2. Subject to the rights and obligations to transfer, deliver or otherwise
dispose of the Deposit, Escrow Agent shall keep the Deposit in Escrow Agent’s possession pursuant to this Agreement. 
 3. A. Buyer shall be entitled to an immediate return of the Deposit at any time prior to the expiration of the Review Period (as defined in Section 3.1 of the Contract) by providing written notice to Escrow Agent stating that Buyer has
elected to terminate the Contract pursuant to Section 3.1. 
 B. If at any time after the expiration of the Review
Period, Buyer claims entitlement to all or any portion of the Deposit, Buyer shall give written notice to Escrow Agent stating that Seller has defaulted in the performance of its obligations under the Contract beyond the applicable grace period, if
any, or that Buyer is otherwise entitled to the return of the Deposit or applicable portion thereof and shall direct Escrow Agent to return the Deposit or applicable portion thereof to Buyer (the “Buyer’s Notice”).
Escrow Agent shall promptly deliver a copy of Buyer’s Notice to Seller. Seller shall have five (5) business days after receipt 

  

 -i- 

 
of the copy of Buyer’s Notice to deliver written notice to Escrow Agent and Buyer objecting to the release of the Deposit or applicable portion thereof
to Buyer (“Seller’s Objection Notice”). If Escrow Agent does not receive a timely Seller’s Objection Notice, Escrow Agent shall release the Deposit or applicable portion thereof to Buyer. If Escrow Agent does
receive a timely Seller’s Objection Notice, Escrow Agent shall release the Deposit or applicable portion thereof only upon receipt of, and in accordance with, written instructions signed by Seller and Buyer, or the final order of a court of
competent jurisdiction. 
 C. If, at any time after the expiration of the Review Period, Seller claims entitlement to the
Deposit or applicable portion thereof, Seller shall give written notice to Escrow Agent stating that Buyer has defaulted in the performance of its obligations under the Contract, and shall direct Escrow Agent to release the Deposit or applicable
portion thereof to Seller (the “Seller’s Notice”). Escrow Agent shall promptly deliver a copy of Seller’s Notice to Buyer. Buyer shall have five (5) business days after receipt of the copy of Seller’s
Notice to deliver written notice to Escrow Agent and Seller objecting to the release of the Deposit or applicable portion thereof to Seller (“Buyer’s Objection Notice”). If Escrow Agent does not receive a timely
Buyer’s Objection Notice, Escrow Agent shall release the Deposit or applicable portion thereof to Seller. If Escrow Agent does receive a timely Seller’s Objection Notice, Escrow Agent shall release the Deposit or applicable portion thereof
only upon receipt of, and in accordance with, written instructions signed by Buyer and Seller, or the final order of a court of competent jurisdiction. 
 4. In the performance of its duties hereunder, Escrow Agent shall be entitled to rely upon any document, instrument or signature purporting to be genuine and purporting to be signed by and of the Parties or their
successors unless Escrow Agent has actual knowledge to the contrary. Escrow Agent may assume that any person purporting to give any notice or instructions in accordance with the provisions hereof has been duly authorized to do so. 
 5. A. Escrow Agent shall not be liable for any error of judgment, or any action taken or omitted to be taken hereunder, except in the case
of Escrow Agent’s willful, bad faith misconduct or negligence, nor shall Escrow Agent be liable for the conduct or misconduct of any employee, agent or attorney thereof. Escrow Agent shall be entitled to consult with counsel of its choosing and
shall not be liable for any action suffered or omitted in accordance with the advice of such counsel. 
 B. In addition to the
indemnities provided below, Escrow Agent shall not be liable for, and each of the Parties jointly and severally hereby indemnify and agree to save harmless and reimburse Escrow Agent from and against all loss, cost, liability, damage and expense,
including outside counsel fees in connection with its acceptance of, or the performance of its duties and obligations under, this Agreement, including the costs and expenses of defending against any claim arising hereunder unless the same are caused
by the willful, bad faith misconduct or negligence of Escrow Agent. 
 C. Escrow Agent shall not be bound or in any way
affected by any notice of any modification or cancellation of this Agreement, or of any fact or circumstance affecting or alleged to affect rights or liabilities hereunder other than as is herein set forth, or affecting or alleged to affect the
rights and liabilities of any other person, unless notice of the 

  

 -ii- 

 
same is delivered to Escrow Agent in writing, signed by the proper parties to Escrow Agent’s satisfaction and, in the case of modification, unless such
modification shall be approved by Escrow Agent in writing. 
 6. A. Escrow Agent and any successor escrow agent, as the case
may be, may resign his or its duties and be discharged from all obligations hereunder at any time upon giving five (5) days’ prior written notice to each of the Parties hereto. The Parties hereto will thereupon jointly designate a
successor escrow agent hereunder within said five (5) day period to whom the Deposit shall be delivered. In default of such a joint designation of a successor escrow agent, Escrow Agent shall retain the Deposit as custodian thereof until
otherwise directed by the Parties hereto, jointly, or until the Deposit is released in accordance with clause (B) below, in each case, without liability or responsibility. 
 B. Anything in this Agreement to the contrary notwithstanding, (i) Escrow Agent, on notice to the Parties hereto, may take such other
steps as the Escrow Agent may elect in order to terminate its duties as Escrow Agent hereunder, including, but not limited to, the deposit of the Deposit with a court of competent jurisdiction in the Commonwealth of Virginia and the commencement of
an action of interpleaders, and (ii) in the event of litigation between any of the Parties with respect to the Deposit, Escrow Agent may deposit the Deposit with the court in which said litigation is pending and, in any such event, Escrow Agent
shall be relieved and discharged from any liability or responsibility to the Parties hereto. Escrow Agent shall not be under any obligation to take any legal action in connection with this Agreement or its enforcement or to appear in, prosecute or
defend any action or legal proceeding which, in the opinion of Escrow Agent, would or might involve Escrow Agent in any cost, expense, loss, damage or liability, unless and as often as requested, Escrow Agent shall be furnished with security and
indemnity satisfactory to Escrow Agent against all such costs, expenses (including attorney’s fees), losses, damages and liabilities. 
 7. All notices required herein shall be deemed to have been validly given, as applicable: (i) if given by telecopy, when the telecopy is transmitted to the party’s telecopy number specified below and
confirmation of complete receipt is received by the transmitting party during normal business hours or on the next business day if not confirmed during normal business hours, (ii) if hand delivered to a party against receipted copy, when the
copy of the notice is receipted or rejected, (iii) if given by certified mail, return receipt requested, postage prepaid, two (2) business days after it is posted with the U.S. Postal Service at the address of the party specified below or
(iv) on the next delivery day after such notices are sent by recognized and reputable commercial overnight delivery service marked for next day delivery, return receipt requested or similarly acknowledged: 
  

	 	(i)	If addressed to Seller, to: 

 Linchris Hotel Partners of
L.I., LLC 
 c/o Linchris Hotel Corp. 
 269 Hanover Street, #2 
 Hanover, MA 02339 
 Attn: Christopher G. Gistis 
 Fax No.: (781) 826-2411 
  

 -iii- 

 with a copy to: 
 Orr & Reno, P.A. 
 One Eagle Square 
 P. O. Box 3550 
 Concord, NH 03302-3550

 Attn: Peter F. Burger, Esquire 
 Fax No.: (603) 224-2318 
  

	 	(ii)	If addressed to Buyer, to: 

 Apple Seven Hospitality
Ownership, Inc. 
 814 E. Main Street 
 Richmond, Virginia 23219 
 Attn: Sam Reynolds 
 Fax No.: (804) 344-8129 
 with a copy to: 
 Apple Seven Hospitality Ownership, Inc. 
 814 E. Main Street 
 Richmond, Virginia 23219 
 Attn: Legal Dept. 
 Fax No.: (804) 727-6349 
  

	 	(iii)	If addressed to Escrow Agent, to: 

 LandAmerica Dallas
National Division 
 8201 Preston Road, Suite 280 
 Dallas TX 75225 
 Fax No.: (214) 368-0039 
 or such other address or addresses as may be expressly designated by any party by notice given in accordance with the foregoing provisions and actually received by the
party to whom addressed. 
 8. This Agreement may be executed in any number of counterparts each of which shall be deemed an
original and all of which, together, shall constitute one and the same Agreement. 
 9. The covenants, conditions and
agreements contained in this Agreement shall bind and inure to the benefit of each of the Parties hereto and their respective successors and assigns. 
  

 -iv- 

 8. This Agreement may be executed in any number of counterparts each of which shall be
deemed an original and all of which, together, shall constitute one and the same Agreement. 
 9. The covenants, conditions
and agreements contained in this Agreement shall bind and inure to the benefit of each of the Parties hereto and their respective successors and assigns. 
 IN WITNESS WHEREOF the Parties have executed this Agreement as of the day and year first above written. 
  

			
	SELLER:
	
	LINCHRIS HOTEL PARTNERS OF L.I., LLC
		
	By:	 	/s/ Christopher G. Gistis
	Name:	 	Christopher G. Gistis
	Title:	 	Manager

  

			
	BUYER:
	
	APPLE SEVEN HOSPITALITY OWNERSHIP, INC.
		
	By:	 	/s/ Justin Knight
	Name:	 	Justin Knight
	Title:	 	President

  

			
	ESCROW AGENT:
	
	LANDAMERICA AMERICAN TITLE COMPANY
		
	By:	 	/s/ Debby Moore
	Name:	 	Debby Moore
	Title:	 	Escrow Officer

 EXHIBIT H 
 Tax Returns 
  

 -vi- 

 EXHIBIT I 
 Additional Excluded Assets 
  

 -vii-

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