329061.1

AGREEMENT

Between

Sunstone Hotel Properties, Inc.

And

UNITE HERE Local 21

Rochester, Minnesota

September 1, 2005

to

August 31, 2010

329061.1 A-i

SUNSTONE HOTEL PROPERTIES, INC.

LOCAL 21 WORKING AGREEMENT

PAGE ARTICLE 1 RECOGNITION ............................................................................. 1 ARTICLE 2 UNION SECURITY............................................................................... 1 ARTICLE 3 SENIORITY ................................................................................... 3 ARTICLE 4 PROBATIONARY PERIOD .................................................................6 ARTICLE 5 DISCHARGE OR DISCIPLINE ...................................................... 7 ARTICLE 6 GRIEVANCE AND ARBITRATION PROCEDURE ....................... 7 ARTICLE 7 LEAVES OF ABSENCE ................................................................. 9 ARTICLE 8 WORKWEEK ............................................................................. 11 ARTICLE 9 HOLIDAYS ..................................................................................14 ARTICLE 10 VACATIONS ............................................................................... 16 ARTICLE 11 INSURANCE BENEFITS ..............................................................17 ARTICLE 12 UNIFORMS AND LAUNDRY ......................................................20 ARTICLE 13 BULLETIN BOARDS ....................................................................20 ARTICLE 14 WAGES ....................................................................................... 20 ARTICLE 15 HEALTH, SAFETY AND SICK BENEFITS ................................. 21 ARTICLE 16 PENSION ..................................................................................... 22 ARTICLE 17 401(K) .......................................................................................... 23 ARTICLE 18 NO STRIKE OR LOCKOUT ........................................................ 24 ARTICLE 19 MAINTENANCE TOOL ALLOWANCE ...................................... 24 ARTICLE 20 DISCRIMINATION ......................................................................24 ARTICLE 21 RESPECT & DIGNITY ..................................................................25 ARTICLE 22 MANAGEMENT RIGHTS ............................................................ 25 ARTICLE 23 LAUNDRY AND-DRY CLEANING WORK STABILIZATION ....25 ARTICLE 24 SUCCESSORSHIP ........................................................................26 ARTICLE 25 ENTIRE AGREEMENT .................................................................26 ARTICLE 26 DURATION ...................................................................................26 APPENDIX “A” PAYROLL RATES ......................................................................A-1 APPENDIX “B” DEPARTMENTS AND SENIORITY SECTIONS......................... B-1 APPENDIX “C” MAINTENANCE ADDENDUM ................................................C-1 APPENDIX “D” HOUSEKEEPING ADDENDUM.................................................D-1 APPENDIX “E” BANQUET DEPARTMENT ADDENDUM .................................E-1 APPENDIX “F” FOOD AND BEVERAGE ADDENDUM ........................................F-1 APPENDIX “G” TEXTILE CARE SERVICES ADDENDUM ...............................G-1 APPENDIX “H” BELL POSITION ADDENDUM .................................................H-1 APPENDIX “I” GUEST SERVICE....................................................................................... I-1 APPENDIX “J” DRUG AND ALCOHOL TESTING................................................. J-1

2

SUNSTONE HOTEL PROPERTIES. INC,

WORKING AGREEMENT

This Agreement made this 1st day of September, 2005 by and between Sunstone Hotel Properties, Inc. for and on behalf of The Kahler Grand Hotel, Rochester Marriott Mayo Clinic Area, Kahler Inn & Suites, Holiday Inn Express, and Textile Care Services located in Rochester, Minnesota, hereinafter referred to as “Employer,” and UNITE HERE Local 21, hereinafter referred to as “Union.”

WHEREAS, it is the desire of the respective parties hereto to avoid disruption in

the service and operation of the units covered by this contract and to secure the benefits intended to be derived by the Employer, its employees and the Union under these articles of Agreement, it is agreed by and between the Employer and the Union as follows:

ARTICLE 1

RECOGNITION

The Employer above named, for and on behalf of the properties above named, recognizes the Union as the exclusive bargaining representative of all employees of the Employer employed at the above-properties in Rochester, Minnesota listed in the classifications set forth in Appendix A, with respect to wages, hours, and all other working conditions.

ARTICLE 2

UNION SECURITY

1. The Employer agrees not to enter into any contract or agreement with the employees herein, individually or collectively, which conflicts with the terms and provisions hereof.

2. All employees covered by this contract who are now or who may hereafter become members of the Union shall, during the life of this agreement, remain members of the Union in good standing or pay fees in lieu thereof as a condition of continued employment. “In good standing” for the purposes of this agreement is defined to mean the payment as required by the Union of a standard initiation fee and standard regular monthly dues relating to the Union’s collective bargaining function, applied uniformly to all members of the bargaining unit covered by this contract.

Provided, however, temporary summer employees hired between May 1 and September 30 will be exempt for four (4) months from initiation fees normally charged other employees. It is agreed that these temporary positions shall be posted and that any employees who take a temporary position shall not be restricted from

3

bidding on a regular position should one become available. If such employees are retained past September 30, they will be obligated to pay the initiation fee. Such employees will be entitled to all fringe benefits for which they qualify except seniority and insurance.

3. Employees hired who average ten (10) hours or more per week in a four

(4) week period or who have been working under a work permit shall, as a condition of employment, become and remain members in good standing of the Union or pay fees in lieu thereof after thirty (30) calendar days employment. All such employees averaging over said ten (10) hours shall have all of the benefits under this contract except as to insurance benefits, and such employees shall average twenty-five (25) hours or more per week. Provided, however, that employees in tip classifications who average twenty (20) hours or more per week will be covered by the insurance benefits. In determining the average, the weekly average shall be determined the last pay period of each month based upon the previous twenty-six (26) week period. The twenty-six (26) week period shall be a floating period.

4. The Employer shall mail to the Union all changes occurring during the calendar month by the tenth (10th) of the following month, including acquisitions and terminations. Employees who exceed ten (10) hours average per week in a four (4) week period are considered as new acquisitions.

5. The Employer and the Union agree not to adopt rules or regulations or to engage in practices that will conflict with this agreement.

6. The Employer shall check off monthly Union dues and initiation fees and/or other required fees in a manner according to procedures agreed upon between the representatives of both parties, upon receipt of written authorization form to deduct Union dues or fees signed by the employee. By the twelfth (12th) of each month the Union must submit to the Employer in duplicate a current list of deductions to be made. The Employer agrees to remit such deductions to the Union by the last Friday of the current month after receipt of deduction list. The date of dues deductions may be changed by agreement between the Employer and the Union.

7. When a vacancy exists the Employer will notify the Union which will refer candidates for employment. The Employer shall have no obligation to hire any person so referred.

8. The designated union representative will be allowed to visit the premises of

the Employer for the purpose of administering this Agreement. The Union representative will provide the Human Resources Director or General Manager with as much advance notice as is possible prior to visiting the facility. Upon arriving at the facility, the Union representative will check in at the office. It is agreed that the work of the employees will

4

not be interrupted by such visits. Union representatives will not meet with employees during working time without the knowledge and permission of the Employer.

9. New Member Orientation. The Union or a designated representative will be

provided access to newly hired employees on the Employer’s premises, after thirty (30) days of employment, to provide information about the Labor Agreement and the employees’ rights thereunder. Such access shall be for up to thirty (30) minutes, once per month, at a mutually agreed upon time and location.

10. Tip Check-Off – the Employer agrees to honor political contribution

deduction authorizations from employees in the following form:

I hereby authorize my Employer to deduct from my pay the sum of $___ per pay period and to forward that amount as my voluntary contribution to the UNITE HERE CHICAGO & Midwest Regional Joint Board Political Education Committee, (CMRJBPEC) 333 So. Ashland Avenue, Chicago, Illinois 60607-2775. My decision to participate in the UNITE HERE CMRJBPEC is a voluntary one and I understand that I am under no compulsion to contribute to it, since such contributions are neither a condition of my continued employment or of membership in the Union. I also understand that this authorization may be revoked by me at any time and that it is automatically revoked upon termination of my employment. The political contribution deduction shall be made once each month during which

an employee who has performed compensated service has in effect a voluntarily executed political contribution deduction authorization. The money shall be remitted within thirty (30) days after the last day of the preceding month to the UNITE HERE Chicago & Midwest Regional Joint Board Political Education Committee, 333 So. Ashland Ave., Chicago, IL 60607-2775, accompanied by a form stating the name and Social Security number of each employee for whom a deduction has been made, and the amount deducted.

The Union shall indemnify, defend and save the Employer harmless against any

and all claims, demands, suits, or other terms of liability that may arise out of or by reason of action taken by the Employer in reliance upon payroll deduction authorization cards submitted to the Employer.

ARTICLE 3

SENIORITY

1. Seniority shall be by section (see Appendix B) and by work location (e.g., The Kahler Grand Hotel, Rochester Marriott, Kahler Inn & Suites, Holiday Inn Express, or Textile Care Services), except in the maintenance department as set forth in the maintenance addendum and the banquet department as set forth in the Banquet

5

Department addendum. Employees shall not acquire seniority until they have completed the probationary period; then seniority shall revert to the date of employment.

2. Where qualifications to perform the available work are equal, layoff and recall will be by seniority as defined in paragraph 1.

When recalling employees who have been laid off because of reduction of work force, the Union shall be notified by the Employer of such employees who are to be rehired. If an employee so notified does not. report for work within seven (7) days from the date his notice was mailed by certified mail, he shall forfeit seniority unless he has reasonable excuse for his failure. In the event an employee is employed elsewhere when he/she receives a notice to report for work, the employee shall not forfeit his/her seniority by not reporting unless the Employer gives the employee reasonable assurance of at least three (3) months steady employment. However, the employee must immediately notify the Employer and waive his right to the particular job that is open.

3. Seniority shall mean continuous length of employment with the

Employer in the sections listed in Appendix “B.” Any employee transferred or re-employed in another section retains but does not accumulate his seniority in his original section and, in addition, commences seniority in his new section. When transferring a portion of a section to another section, employees transferred shall merge their seniority in the new section.

4. Where qualifications are equal, employees shall be promoted within their departments on the basis of seniority. Only when a vacancy occurs or a new position is created can seniority be exercised for purposes of shift preference, days off, and server sections.

5. Except where rotation is practiced servers shall be given preferential stations on the basis of seniority, provided that they are sufficiently qualified.

6. As with permanent job openings under section 7, an employee laid

off from his/her section shall have preference based on seniority in hiring over any other applicant for other sections of the Employer, even though it may be in another operation, provided qualifications are equal. Seniority shall be forfeited on the following grounds:

(a) Voluntarily leaving the employ of the Employer; (b) Discharge for proper cause; (c) Layoffs in excess of six (6) months; or (d) Failure to report for work after a layoff within a reasonable

time, not to exceed seven (7) days, after the Employer has notified employee to report for work, as previously provided.

6

7. Permanent job openings in the classifications covered in this Agreement will be posted for a minimum of five (5) days on the main bulletin board and at all time clocks of all Sunstone Rochester properties to advise employees of the opening. Employees interested in the position must advise the human resources office in writing of their desire to be transferred or promoted to the open position. Where qualifications are equal, the opening will be filled by seniority, adhering to the following preferences:

1st Employees working in the classification at the property where the opening is available;

2nd Employees working in the classification at other properties; 3rd Employees working outside of the classification who have demonstrated

the skill or potential ability to successfully perform in the position, and who have notified the Employer of their desire to change classifications;

4th Employees working outside of the classification. For purposes of scheduling, employees moving to a new location in the same

classification shall move to the bottom of the seniority list. However, prior classification seniority shall be maintained. If an employee bids for and receives a permanent job vacancy, he/she cannot bid again for a posted job opening for a period of six (6) months. The six (6) month limitation will not apply to requests for shift preferences or work schedules within a classification and section. “Qualifications,” as used herein, shall be based on the Employer’s reasonable judgment of the applicant’s skills, abilities, aptitude, and overall work record. Notwithstanding the foregoing, the Employer may postpone a transfer or promotion where it would leave another department with an insufficient number of skilled employees or an excessive number of vacancies. Until a permanent job opening is filled, the Employer may use its discretion to select an employee to temporarily fill the opening.

A permanent job opening is a vacancy in a position which is scheduled for fifteen (15) or more hours per week on a regular basis. A permanent job opening will not exist when any person who has a seniority claim on that position is on vacation, sick leave or other leave of absence.

Employees who bid and accept a new position have a thirty (30) day trial period. At the end of the trial period if the employee is unable to meet job requirements or is unhappy in the position, he/she will be returned to the previous position. Either the employee or management may initiate the return. In the event management initiates the return, the employee shall have the right to grieve the decision under the Grievance and Arbitration Procedure contained herein, provided however, the Employer has acted in an arbitrary or capricious manner.

Any regular employee within a classification and section may exercise their

seniority as it applies to shift preference schedules and/or days off up to forty (40) hours in a work week. In the Maintenance Departments, new hires may be trained on the day shift for up to thirty (30) days before shift preference can be exercised to

7

displace that employee. Provided, however, that there will be an automatic extension of an additional thirty (30) days in the event the Employer believes that additional time is required to determine the employee’s ability to work off-shifts. Employees shall not be placed on the third shift until supervisor is satisfied the employee is capable of working alone.

8. Employees laid off shall have preference of work over other employees in the section even though it may be in another operation if they have the seniority and the qualifications to do the work.

9. The Employer shall furnish a complete up to date seniority list to the Union of all employees covered by this Agreement within thirty (30) days following a request from the Union representative. Acquisition lists covering the previous three (3) months shall be submitted within thirty (30) days following February 1st and July 1st of each year. The employee shall advise the Union of all complaints regarding the seniority list.

10. Re-employment of members of the Armed Forces shall be governed by the

Selective Service Act, amendments and regulations. 11. The Employer and the Union shall make every effort to provide work for

incapacitated employees returning from the Armed Forces.

12. When an employee is transferred to a position outside the coverage of this Agreement, he/she shall retain seniority for thirty (30) days. At the end of such time, seniority shall be forfeited if the employee retains a position outside the unit.

13. In the event the Employer rehires an employee who has been discharged, such employee shall not be reinstated in accordance with his accumulated seniority unless such action is approved by both the Union and the Employer.

14. Retirees working on an on-call or part-time basis shall receive the benefits of this contract except those provided under Article 3 and Article 11 (except for the continuance of the $1,000 life insurance coverage if the retiree is eligible.)

15. If there is a reposting of a section, the Union will be notified and upon request the Employer will explain the reason for the reposting.

ARTICLE 4 PROBATIONARY PERIOD

The first sixty (60) days of employment shall be probationary, during which time

an employee may be discharged with or without cause and without recourse to the grievance procedure. An automatic extension of the probationary period of an

8

additional thirty (30) days will apply at the written request of the Employer, in the event the Employer believes that additional time is required to determine the employee’s qualifications.

ARTICLE 5 DISCHARGE OR DISCIPLINE

No employee will be disciplined or discharged without just cause. In the event a

meeting is held for disciplinary purposes, the affected employee shall have the right to have a Union steward and/or Union Business Agent present if the employee so requests.

Copies of all warning notices and all other disciplinary action given employees will be mailed to the Union without delay. In addition, it is agreed that if a verbal warning results in a written report by a supervisor for the employee’s personnel file, a copy of such notice will be given to the employee.

If an employee avoids disciplinary offenses for a period of twenty-four (24) consecutive months, offenses in his/her personal record which preceded that time will not be used as a basis for disciplinary action.

ARTICLE 6

GRIEVANCE AND ARBITRATION PROCEDURE

1. The grievance procedure set forth in this article is established for the specific purpose of providing prompt and amicable means of settlement of all questions arising under the terms of this agreement or the application of them. Both the Employer and the Union intend to make every effort to settle grievances quickly and amicably and with a minimum of friction.

2. An employee may, with or without the assistance of a shop steward, first

attempt to resolve workplace disputes with the employee’s manager. If not resolved informally, the following shall be the grievance procedure:

Step 1. The grievance shall be reduced to writing by the Union Business Agent within twenty-one (21) calendar days from the date of the incident giving rise to the grievance, or within twenty-one (21) calendar days of when the employee reasonably should have had knowledge, and shall be furnished to the Human Resources Director. The written grievance shall set forth the facts giving rise to the grievance, including the dates and persons involved, identify the contract provisions violated, and state the relief requested.

9

Step 2. The Union Business Agent and the Human Resources Director shall meet within fourteen (14) calendar days of receipt of the written grievance and attempt to settle the grievance. If the grievance is not settled, the Employer shall issue a written response to the grievance within seven (7) calendar days of the meeting. Step 3 (Optional). If the grievance is not settled at Step 2, the Union Business Agent may appeal the grievance to mediation within seven (7) calendar days from the date of the decision rendered in Step 2 by giving written notice of a request for mediation to the Employer and the Federal Mediation and Conciliation Service (FMCS), Minnesota Bureau of Mediation, or other neutral mediation agency. Mediation shall consist of up to two (2) Employer representatives and up to two (2) Union representatives, and a neutral mediator acceptable to both parties, who shall mediate the dispute in an attempt to have the parties reach a settlement. No attorneys or other consultants may participate in the mediation. The proceedings shall be informal and no formal record of the proceedings shall be made. If no settlement is reached, the mediator shall provide the parties with an immediate written advisory decision of the grievance, including the grounds for such decision. All offers to compromise presented during the mediation, as well as any decision of the mediator, shall be confidential and non-admissible in any subsequent proceedings. Step 4. If the grievance is not settled at Step 3, or if the Union Business Agent chooses to skip Step 3, the Union may submit the matter to arbitration within fourteen (14) calendar days of the date of the mediation or the Employer’s written response to the grievance by furnishing the Employer with a written request for arbitration and proposing therein the names of three (3) arbitrator(s) acceptable to the requesting party. The Union shall also state in writing the matter to be arbitrated and the relief that is sought. If the parties are unable to agree upon an arbitrator within fourteen (14) days the Union shall request the FMCS to submit a panel of seven (7) names. The Employer and the Union shall alternate striking one name from the list submitted until only one name remains. The Union shall take the first strike. The cost of securing the list of arbitrators shall be shared equally between the Employer and the Union. Arbitration shall be handled in the following manner:

(a) Authority of the arbitrator shall be limited solely to the determination of the

matter submitted in writing at the time of request for arbitration. The arbitrator shall not have power to add to, subtract from, or modify in any way the terms of this contract. If, during the course of the arbitration hearing, either party introduces any facts which were not introduced during any of the steps of the grievance procedure, the other party shall be granted an extension of hearing upon request.

(b) The decision of the arbitrator shall be made not later than thirty (30) days after

the submission of post-hearing briefs, and his/her decision shall be final and binding upon both parties and employees involved.

10

(c) Expenses of the arbitrator shall be paid equally by the Employer and the

Union. If a court reporter is used, the ordering party shall pay the cost thereof, unless the other party requests a copy of the transcript, in which case the cost of the court reporter and transcript shall be paid equally.

The time limitations set forth herein relating to the time for filing a grievance and the demand for arbitration shall be mandatory. Failure to follow said time limitations shall result in the grievance being permanently barred and waived. The time limitations and/or grievance steps provided for herein may be extended or waived by mutual written agreement between the parties.

3. Mathematical or mechanical mistakes on a paycheck resulting in an under or overpayment of the employee may be corrected within sixty (60) calendar days of the pay day involved. If an error is discovered, it must be corrected by payment within five (5) business days (Monday - Friday); provided, however, that the Employer will make a concerted effort to make the corrected payment sooner than five (5) business days if possible.

4. The Union shall advise the Employer of the names of the Union Stewards who shall participate in the grievance procedure and who shall be recognized by the Employer as representatives of the employees for purposes of enforcing this agreement, and who will generally act as representatives on the job of the Union.

The words “Union Steward” shall mean and refer only to employees who are designated by the Union in writing to the Employer as authorized representatives of the employees of a specific department for grievance procedure purposes. Whenever such authorization is withdrawn as to an individual Union steward or a new Union steward is added to the number of those authorized, the Union shall promptly notify the Employer in writing of such action. The Employer and its representatives shall be fully protected with a Union steward so authorized with respect to any grievance as to which he has at any time purported to represent the aggrieved employee and they need not deal with any Union steward not so authorized.

5. When a grievance requires the attention of a shop steward during working hours, he/she shall first secure the permission of his/her supervisor. The handling of all grievances shall be done during working hours, without any deduction from wages of employees who necessarily attend. The Union agrees to attempt to minimize any disruption to the Employer’s operation.

ARTICLE 7 LEAVES OF ABSENCE

1. Employees may be granted leaves of absence by the Employer for a period

of not more than thirty (30) days. Leaves of absence in excess of thirty (30) days, and

11

any extensions of leaves beyond the thirty (30) days, shall be put into writing by the Employer and a copy kept by the employee, the Employer and the Union. Requests for such leaves and extensions shall be made to the employee’s immediate supervisor. However, leaves of absence for illness or injury will be granted upon request for absences not to exceed two (2) years.

Illness or injury which qualifies for leave under the Federal Family Medical Leave Act will run concurrently with Family Medical Leave Act leaves.

Employees who have been employed for at least one (1) year may be granted a leave of absence for educational purposes up to twelve (12) months, provided the leave is used for future employment with the Employer, and is approved by management.

2. The Employer agrees to grant necessary time off without pay or loss of seniority rights to any employee designated by the Union to attend a labor convention or serve in any capacity on other official Union business. The Union agrees to give in writing two (2) weeks notice to the Employer. It is agreed that there shall be no disruption of the Employer’s operation.

3. Any employee who is appointed as a full time Business Representative or is elected to a full time office of the Union, or the International Union, shall be given a leave of absence not to exceed a total of six years.

4. Disability leaves of absence for employees will be granted in accordance with the recommendation of the attending physician, not to exceed two (2) years. Maternity/paternity leaves will not be granted beyond three (3) months unless supported by the attending physician.

5. Failure to report for work at the end of the period of a leave of absence is equivalent to resignation.

6. Seniority shall accumulate during the period of leave of absence.

7. In the event of the death of a member of an employee’s immediate family, he/she will be granted time off from work with pay for up to three (3) consecutive days, one of which must be the day of the funeral. The employee will be paid for that portion of his/her regular week’s work which falls within the above three (3) day period if he/she was, under the terms of this Agreement, scheduled to work. If bereavement leave occurs during an employee’s scheduled vacation, the employee will be permitted to substitute bereavement leave in lieu of vacation time. The Employer may require an employee to provide proof of death.

Immediate family shall mean the employee’s father, mother, father-in-law, mother-in-law, spouse, previously declared (on Employer form) same-gender domestic partner,

12

children, stepchildren, stepparents, guardian, brother or sister, grandchild, son-in-law, daughter-in-law, grandparents, half-brother, stepbrother, half-sister, stepsister, current grandparent-in-law, current brother-in-law and current sister-in-law.

In addition to the foregoing paid leave, an employee will be permitted to take one (1) day of unpaid leave in order to serve as a pallbearer. An employee also may take off up to three (3) days without pay to attend the funeral of an aunt or uncle.

8. Jury Duty: If a regular employee with seniority is summoned for petit or grand jury service, such employee shall be paid the difference between jury pay and the pay the employee would have earned from the Employer for each day of jury duty which falls on a day on which the employee would otherwise be scheduled to work. If on a day the employee would otherwise be working for the Employer, he or she is released from jury duty prior to the end of his or her scheduled shift, the employee will be expected to return to work as soon as possible. No employee shall be required to perform work for the employer during any twenty-four (24) hour period (11:00 p.m. - 11:00 p.m.) during which the employee is required to be present for a petite jury or grand jury service.

To be eligible for benefits under this section, the employee must endorse and turn over to the Employer the check received for jury duty. All hours spent on jury duty will be credited for purposes of calculating vacation and holiday benefits. The Employer will in turn pay the employee the pay the employee would otherwise have earned on that day. Payment for jury duty service will be limited to a maximum of six (6) calendar weeks for each contract year.

9. The Employer is obligated to continue to provide health insurance benefits

during an employee’s leave of absence under this Article only to the extent required by law (e.g., FMLA or Minnesota Parental Leave Law).

ARTICLE 8 WORKWEEK

1. The basic work week shall consist of five (5) days, forty (40) hours, and

two (2) consecutive days of rest within a seven (7)-day period, starting the first shift on Saturday of each week. Time and one-half shall be paid after forty (40) hours worked or paid as an approved holiday or vacation day in any one work week. Time and one-half shall be paid for all hours worked on the sixth (6th) day to all employees except banquet servers. However, banquet servers will not normally be required to work a sixth (6th) day until all regular full-time servers have been rescheduled for five (5) days. Double time will be paid for all hours worked on the seventh (7th) day in any work week, if both days off are worked. If only one (1) of the two (2) scheduled days off is worked it will be compensated on the basis of one and one-half (1-1/2) times the employee’s regular rate. Double time will also be paid after forty-eight (48) hours worked or paid as an

13

approved holiday or vacation day in a work week. Employees recalled from layoff to work on the employee’s scheduled days of work will be paid straight time.

Time and one-half is to be paid for any hours worked in excess of eight (8) hours worked in a work day. Provided, however, that daily overtime will not apply to function and on-call employees who work less than four (4) days per week. There shall be no pyramiding of overtime.

Sick leave, paid or unpaid, will not count for purposes of computing overtime. By mutual agreement between employees and the Employer nonconsecutive days

off may be scheduled. The nonconsecutive days off schedule will not be binding on any other employee. Irrespective of the foregoing, non-consecutive days off may be scheduled for function and on-call personnel.

2. Any employee in the maintenance departments who is called from home for an emergency condition shall be given two (2) hours minimum pay at time and one-half for such call-in work. Emergency callbacks will be handled on a seniority basis among employees qualified to correct the emergency. Employees shall be paid for all overtime work and shall not be required to take time off for extra time worked.

3. Employees in the maintenance departments, housekeepers and Kahler PBX operators shall be paid a premium of forty-five cents (45¢) for all hours worked between 10:00 p.m. and 6:00 a.m., except on such call-in work.

4. Employees who work beyond their regular daily schedule in any day shall not be required to take time off later in the work week because of such extra hours. The employer agrees not to schedule employees for work with less than eight (8) hours between shifts, unless mutually agreed upon by the employee and the employer; provided, however, that this provision shall not apply to employees working split-shifts pursuant to Article 8, Section 12.

5. Any permanent change in basic work schedules shall be in writing, and the employee to be affected by such change in working schedule shall be notified at least seventy-two (72) hours before such change is to take effect.

6. The Employer reserves the right to prepare work schedules and to schedule days off. Work schedules and scheduled days off shall be posted in each department as far in advance as possible, but not later than Tuesday at 12:00 noon, prior to the beginning of the work week involved. Employees will have until noon on Wednesday to contest any discrepancies in the schedule. After noon on Wednesday the schedule will not be changed except in emergencies and/or for business needs. Work schedules and scheduled days off may be changed without notice in case of emergency and/or for business needs. After the emergency, the normal work schedule will be resumed. Any employee who reports

14

to work on his scheduled day off at the request of the Employer will be paid time and one-half for all hours worked on that date. Employees who are scheduled in advance to work one or both of their days off, and calls in sick earlier in the week, shall not be eligible for time and one-half on the scheduled day off. In order to secure time off for a doctor’s appointment, employees must provide notice of the appointment at least a week prior to the start of the new schedule, except in cases of emergency.

7. Temporary Hours Reductions. In the event it is necessary to reduce staffing on a short term basis because of low occupancy, employees, at their request, will be granted absent days on a voluntary basis.

8. New extra or additional employees will not be utilized to prevent regular full-time employees from working forty (40) hours during a work week..

9. Employees shall be granted preferential work schedules and preferential days off in accordance with their seniority within the section and the respective units consistent with the efficient operation of the section.

10. The following reporting pay guarantees will apply:

(a) A four (4) hour call-in on an employee’s day off and a minimum

reporting pay on a regular work day of four (4) hours for all employees normally scheduled to work in excess of twenty (20) hours per week.

(b) Employees who normally are scheduled for twenty (20) or less hours

per week or on-call employees including function personnel will be guaranteed three (3) hours.

(c) A person-called back after having completed his work shift will

receive a minimum of two (2) hours call back pay.

(d) Split-shift employees will receive a three (3) hour guarantee per shift, however, this guarantee would not apply to those employees who choose to voluntarily leave early.

(e) Employees scheduled or called in for a training session or mandatory

meeting will be paid a minimum of two (2) hours at the appropriate rate of pay.

11. The senior employees in a classification. who are on duty shall be given first

preference to work overtime. If senior employees on duty in a particular job classification reject an offer of overtime, the junior employees on duty must perform the overtime work. Involuntary overtime will be assigned based on reverse seniority.

15

An employee working on his/her regular day shall be required to work overtime before

an employee who is working on his/her day off.

12. A split shift shall be defined as any break of more than one (1) hour during working hours. All split shifts will be completed within a twelve (12) hour period, with the exception of function employees and bellpersons.

Lunch periods will be scheduled for a maximum of thirty (30) minutes for all employees.

13. Employees shall be entitled to one (1) fifteen (15) minute break for each four (4) hours of work. It is understood, however, that the Employer reserves the right to schedule the breaks. Employees who work more than one (1) hour of overtime beyond the end of their shift, will be entitled to an additional fifteen (15) minute break after working one hour of overtime, and additional fifteen (15) minute breaks after each additional two (2) hours of overtime worked.

14. Textile Care Services shall have the option to schedule a four (4) day work week using ten (10) hour days in accordance with the following:

The work weeks shall consist of four (4) work days and three (3) scheduled days off. Two (2) days scheduled off to be consecutive.

Hours in excess of ten (10) in a work day or forty (40) in a work week to be paid at one and a half (1-1/2) times base rate. Hours worked on scheduled days off to be paid at one and a half (1-1/2) times base rate.

When computing holiday pay, participating employees will have average days computed using four (4) days per week to a maximum of ten (10) hours.

When computing vacation pay, participating employees will have average days computed using four (4) days per week. Vacation taken in less than full week increments will be computed based on this average day to a maximum of ten (10) hours. 15. At Textile Care Services, the employer agrees to give preference to senior

employees within a section on the same shift to work available hours. 16. The Employer shall not require an employee to work alone without a

reasonable amount of training as provided and determined by the Employer.

16

ARTICLE 9 HOLIDAYS

1. The following shall be classified as holidays: Memorial Day, Independence

Day, Labor Day, Thanksgiving Day, Christmas Day and New Year’s Day. Any time worked on those days shall be paid for at double time. Management shall have the exclusive right to determine which holidays are to be worked.

Should one of the foregoing holidays fall on Sunday, it will be celebrated on Monday in the Laundry and Dry Cleaning Division. In all other departments covered by this agreement, Sunday holidays will be celebrated on that day and paid for accordingly.

2. Holiday pay will be granted to all employees with established seniority irrespective of the day of the week on which it falls. To qualify for pay, an employee must work his regular scheduled work day before and after the holiday. Pay for holidays for employees not scheduled to work will be based on the average daily hours worked by each eligible employee in the twelve (12) week period preceding the holiday up to a maximum of eight (8) hours. An employee who is scheduled to work on a holiday and then fails to report for work will not receive holiday pay unless the absence is an excused absence.

An employee who is absent on the day before or after the holiday on compensable time (vacation, paid sick-leave, etc.) will not be disqualified if otherwise eligible for holiday pay. In addition, an excused absence on the day before or day after a holiday will not disqualify an employee from receiving holiday pay.

Such hours paid for will be counted as hours worked for overtime purposes if the holiday falls on an employee’s regularly scheduled work day.

Employees with seniority who are normally scheduled to work five (5) days will have designated sixth (6th) and seventh (7th) days and such days will not be changed in holiday weeks to avoid payment of overtime for work on the sixth (6th) and seventh (7th) day of a work week. This does not apply to function employees who work on an on call basis.

3. If the holiday comes during the employee’s regularly scheduled vacation the employee shall have the option to convert vacation pay to holiday pay or to receive an extra day’s pay.

4. An employee receiving sick leave pay on leave of absence shall not receive holiday pay.

5. Regular full time bartenders shall not suffer a loss of pay due to their inability to work at their usual assignment or a related assignment during scheduled hours on an election day.

17

6. Employees with eight (8) or more years of service shall be entitled to one (1) paid personal day. Employees with sixteen (16) or more years of service shall be entitled to two (2) paid personal days. Employees with twenty (20) or more years of service shall be entitled to three (3) paid personal days. The paid personal days are to be scheduled by mutual agreement in advance or to cover uncompensated days of sick leave. The paid personal days must be used within the employee’s anniversary year. Eligibility is based upon the employee’s anniversary date of employment.

Personal days may be scheduled and taken in advance of the employee’s anniversary date,

subject to repayment by the employee if the employee does not remain an employee until his/her next anniversary date. Each employee’s check stub will reflect the employee’s personal day balance.

ARTICLE 10 VACATIONS

1. Employees shall receive vacations at the following rates:

After one (1) year of continuous service - one (1) work week vacation; After three (3) years continuous service - two (2) work weeks vacation; After ten (10) years continuous service - three (3) work weeks vacation; After sixteen (16) years continuous service - four (4) work weeks vacation.

2. Any employee whose average work week during the vacation year is

between thirty-eight (38) and forty (40) hours will be paid vacation pay for forty (40) hours. Any employee whose average work week during the vacation year is less than thirty-eight (38) hours or more than forty (40) hours will be paid vacation pay equal to his average work week. Time spent by members of the Union Negotiating Committee in negotiations for renewal of this agreement at the time of its expiration shall be included in computing an employee’s average work week.

Employees in the server and bellperson sections shall be given the option to use two (2) hours of their accrued vacation pay for each hour on vacation.

Tipped Employee Vacation Adjustment. In addition to their regular hourly rates, tipped employees working in the classifications of doorperson, bellperson, bell captain, all servers in functions, room service and all restaurants and lounges, shall be compensated at the rate of three dollars ($3.00) per hour for all vacation hours taken.

Employees shall earn vacation on a biweekly basis prorated in accordance with

compensable hours for the pay period. The biweekly pay stub shall show total vacation hours accumulated. Employees will be eligible to receive their vacation benefits as they accrue it each pay period, providing, however, it can be scheduled with the employee’s supervisor. A maximum of two (2) years’ vacation may be accumulated. Once the employee has accumulated the maximum of two (2) years’ vacation entitlement he/she shall

18

stop accumulating additional vacation but shall not lose any vacation accumulated. Accumulation shall resume as soon as the employee uses accumulated vacation.

By mutual agreement, Employees may sell up to forty (40) hours of accrued vacation one time during a calendar year.

3. Fully earned vacation pay shall be paid in advance of the scheduled vacation if requested by the employee at least two (2) weeks in advance.

4. A vacation sign-up list shall be posted in each work unit at which time employees will sign for vacation between February 15 and March 31 for the period April 1 of the same year to March 31 of the following year. Thereafter, vacations will be selected on a first come, first serve basis and will not be subject to being bumped. Scheduling of vacation shall be arranged so that the functioning of the department shall not be impaired. Vacations can be arranged in one (1)-day increments by mutual agreement between the supervisor and the employee involved.

Vacation requests made over forty-eight (48) hours in advance will be honored whenever reasonably possible. The Employer agrees to affirm or deny in writing the employee’s written request for vacation within seven (7) days of receiving such request.

Employees will be permitted to take vacation year round, provided, however, that the Employer may require adequate staffing levels to meet business needs.

5. Vacations shall be taken within the year following the date the employee becomes eligible. In case of emergency, by mutual agreement an employee may work his vacation and receive his vacation pay in addition to wages for the hours worked or arrange his vacation for some other time.

Employees may take their vacations in one (1) hour increments if requested and approved in advance.

6. If an employee’s services are terminated prior to the time of the taking of his vacation, he shall be immediately paid the full amount of his accumulated vacation pay, provided such employee has completed one or more years of service.

7. If an employee becomes ill during his regularly scheduled vacation and qualifies for sick benefits he may re-schedule his unused vacation.

ARTICLE 11

INSURANCE BENEFITS

Eligible employees may participate in and be covered under the Hotel Employees and Restaurant Employees International Union Welfare Fund and the Employer’s life

19

insurance plan designed for Union employees on the first (1st) day of the month following ninety (90) days of employment.

Employees who elect coverage will contribute monthly toward the cost of insurance coverage by payroll deduction, according to the schedule set forth below. The employee’s contribution may be made under the Employer’s section 125 Plan at the employee’s option.

The Employer agrees to contribute for each participating employee covered by this agreement to the Hotel Employees and Restaurant Employees International Union Welfare Fund for the purpose of providing health and welfare benefits, including dental insurance, under the Hotel Employees and Restaurant Employees International Union Welfare Plan or such new, merged or consolidated plan as may be adopted by the Trustees, the following amounts: $471.42 for single coverage; $920.92 for single plus one; and $1345.62 for family. (These amounts include the amounts contributed by employees.) Said contributions shall be submitted monthly, together with a report of the employee data required by the Trust Fund, on the format prescribed by the Trust Fund, no later than the fifteenth (15th) day of the month following the month for which the contributions are to be made.

Effective January 1, 2006, through December 31, 2008, the Employer agrees to contribute the contribution rates necessary, as determined by the H.E.R.E.I.U. Welfare Fund, to sustain benefits. The Employer contributions are subject to and limited by the agreement by the Fund that limits the maximum annual increases in contribution rates, as set forth in the letter of October 27, 2004, from the Fund to the parties. During this period the employees will make the monthly contributions set forth below.

The Employer and the Union agree to be bound by the Agreement and Declaration of Trust of the said Hotel Employees and Restaurant Employees International Union Welfare Fund as may, from time to time, be amended, and they do hereby irrevocably designate as their respective representatives on the Board of Trustees, such Trustees named in said Agreement and Declaration of Trust as Employer and Union Trustees, together with their successors selected as provided therein, and agree to abide and be bound by all procedures established and actions taken by the Trustees pursuant to said Trust Agreement. Any provision in this Agreement that is inconsistent with the Agreement and Declaration of Trust, or the Plan of Benefits, rules, or procedures established by the Trustees, shall be null and void.

The Employer is not required to make contributions, and no coverage will be provided for employees who voluntarily waive coverage under the H.E.R.E.I.U. Welfare Plan. A waiver of coverage must be on a prospective basis only. Proof of voluntary waiver must be provided to the Employer. The Employer is required to keep such proof with the employee’s file and such proof shall be made available to the Welfare Fund upon request. Absent proof of voluntary waiver of coverage, an eligible employee must be enrolled and contributions paid to the H.E.R.E.I.U. Welfare Plan.

20

EMPLOYEE MONTHLY CONTRIBUTIONS DATE COVERAGE HEALTH and DENTAL

Jan. 1, 2005 Single $49.77 Plus 1 $235.51 Family $286.63 Jan. 1, 2006 Single $54.77 Plus 1 $245.51 Family $301.63 Jan. 1, 2007 Single $59.77 Plus 1 $260.51 Family $321.63 Jan. 1, 2008 Single $69.77 Plus 1 $275.51 Family $341.63

Dependents who may be insured are spouse and each unmarried child between birth and twenty-three (23) years of age; provided however, if the child has reached his/her nineteenth (19th) birthday, he/she must be unmarried and a full-time student at an accredited school or university. Child includes stepchild, adopted child and foster child, provided such child is dependent upon the employee for court ordered support and maintenance.

SCHEDULE OF LIFE INSURANCE BENEFITS

Period of continuous service for life insurance eligibility: Years of Service Value ($) One (1) year and less than two (2) years 1,000 Two (2) years and less than three (3) years 1,500 Three (3) years and less than four (4) years 2,000 Four (4) years and less than five (5) years 2,600 Five (5) years and less than six (6) years 3,200 Six (6) years and less than seven (7) years 3,800 Seven (7) years and less than eight (8) years 4,200 Eight (8) years and less than nine (9) years 4,800 Nine (9) years and less than ten (10) years 5,400 Ten (10) years and less than eleven (11) years 6,000 Eleven (11) years and less than twelve (12) years 7,000 Twelve (12) years and less than thirteen (13) years 8,000 Thirteen (13) years and less than fourteen (14) years 9,000 Fourteen (14) years and less than twenty (20) years 10,000 Twenty (20) years and over 20,000

If an employee passes from one class to another due to change in a period of service, the amount of their insurance will be changed in accordance with the schedule

21

of benefits on the date of change in period of service, provided, however, that no such increase will become effective unless and until they are actually at work.

Employees who terminate their employment for the purpose of retirement, and who have completed fifteen (15) or more years of service and have attained the age of sixty-two (62) years or more at the date of termination, shall receive, at no cost to such employee $1,000 life insurance. The balance of the life insurance which such employee is entitled to for continuous service may be converted by such employee at his/her own expense without medical, within thirty (30) days after termination of service.

Employees who retire may at the discretion of the Employer be permitted to work on a part-time or on-call basis.

No later than December 1, 2008, the parties shall meet and bargain over the terms

of Article 11 in order to provide continued and/or different insurance benefits for employees during the period of January 1, 2009 through at least August 31, 2010. In the event the parties have not reached agreement prior to January 1, 2009, Article 18 shall be suspended until such time as the parties reach an agreement, unless the parties mutually agree on terms for interest arbitration to resolve the matter.

ARTICLE 12

UNIFORMS AND LAUNDRY

The Employer agrees to furnish and launder uniforms for all employees who are required to wear them. These uniforms shall not be worn off the premises unless authorized. The employee is expected to treat the uniforms with care. The Employer also agrees to replace, at no cost to the employees, those uniforms which have become permanently stained or worn out.

ARTICLE 13 BULLETIN BOARDS

The Union shall be entitled to reasonable use of the bulletin boards of the

Employer for the purpose of posting notices of official business. Other matters of interest to employees may be posted if approved by the Employer. It is agreed that the bulletin boards may be locked and a key maintained by the Management.

ARTICLE 14 WAGES

22 329061.1

1. A schedule of “Appendix A” covering job classifications and wage rates is attached and made a part of this agreement. Additionally, the parties agree as follows:

(a) Maintenance Boiler Pay - $1.00 per hour paid for all hours worked to employees with a license, working full-time at a hotel where a license is required. (TCS will continue current practice.)

(b) If applicable state or federal minimum wage is increased, all

bellpersons, doorpersons, and servers will receive the same cents per hour as the minimum wage increase cents per hour.

2. An employee required to fill a higher rated job temporarily shall receive

the rate for that job while on that job and must be paid such higher rate for at least three-tenths (3/10ths) of an hour. An employee required to fill a lower job temporarily shall receive his regular rate while on that job.

Employees who request hours in a lower paying job in order to more nearly reach full-time employment will be paid at the rates of the job being performed.

Bargaining unit employees will not be required to temporarily fill in for non-bargaining unit positions.

3. Employees being paid over scale shall receive the same cents per hour increase as employees paid on the contract scale.

4. If any new classifications are added during the life of this contract, wages for the same shall be negotiated by letter or addendum and made a part of this agreement.

5. All rate increases shall become effective on the nearest Saturday to the date on which the employee becomes eligible for the rate increase, it being the intention of the parties that changes in rates of pay not be made during a work week.

6. Employees who are required to leave their jobs because of occupational injury will receive pay for all hours scheduled to work on the day of the injury or accident.

7. Banquet servers working cashier/vending functions shall receive the five (5) year snack bar attendant rate of pay. Senior employees shall have the right to defer such functions to the junior employee provided there are sufficient employees to staff the event.

8. A split shift shall be defined as any break of more than one (1) hour during working hours. All split shifts will be completed within a twelve (12) hour period, with

23 329061.1

the exception of function employees and bellpersons. A premium of twenty cents (20¢) per hour will be paid for all hours worked on any split-shift except tip classifications.

ARTICLE 15

HEALTH, SAFETY AND SICK BENEFITS

1. All regular employees who have completed their probationary period of employment and attained seniority status will be eligible for sick leave benefits beginning with the second day of absence for actual illness. However, sick leave will be paid to any employee on the first day of hospitalization and for the first work day of any four (4) or more consecutively scheduled work day absences.

For employees hired prior to September 1, 2005, sick leave benefits will be earned and accumulated bi-weekly on a pro-rata basis of eighty (80) hours of sick leave for two thousand eighty (2,080) hours of work or pay during an employee’s anniversary year. The maximum benefit that can be accumulated by such an employee will be three hundred (300) hours. Upon an employee reaching the maximum balance, the employee may sell up to sixty (60) hours of sick pay at fifty percent (50%) of value on the employee’s anniversary date.

For employees hired on or after September 1, 2005, sick leave benefits will be earned and accumulated bi-weekly on a pro-rata basis of forty (40) hours of sick leave for two thousand eighty (2,080) hours of work or pay during an employee’s anniversary year of employment. The maximum benefit that can be accumulated by such an employee will be three hundred (300) hours. Upon an employee reaching the maximum balance, the employee may sell up to sixty (60) hours of sick pay at fifty percent (50%) of value on the employee’s anniversary date.

2. Sick leave may be converted to hours in the instance of an employee becoming ill after having reported for work. The hours lost by such an employee on that day by reasons of illness will be accumulated to establish eligibility for sick leave after the required waiting period.

Employees in the server and bellperson sections shall be given the option to use two (2) hours of their accrued sick leave for each hour of sick leave provided they meet the sick leave eligibility requirements.

3. To receive sick pay after three (3) days of illness, an employee must present a doctor’s certificate as proof of illness. Absences due to accidents covered by workers’ compensation are not eligible for sick leave benefits; provided, however, that sick leave which has been accumulated can be utilized in connection with workers’ compensation benefits in order to permit an employee to receive up to the employee’s average income in a combination of workers’ compensation and sick leave pay.

24 329061.1

4. The Employer will do everything reasonably possible to create and maintain safe, healthful and sanitary working conditions. The Union agrees that it will endeavor to have its members observe all of the safety rules.

5. The Employer may make temporary work reassignments in order to accommodate the light duty or special work requirements of an employee returning to work from a work-related injury or illness. Such reassignments will be limited to sixty (60) days unless extended by mutual agreement.

6. The Employer agrees that employees shall be allowed to use any of their accrued sick time for those absences which would be covered by the Family Medical Leave Act.

ARTICLE 16 PENSION

The Employer will continue to maintain and administer a pension plan. The normal

pension benefit will be fourteen dollars ($14.00) per month for each year of service. The pension program will be funded by the Employer as required by the Pension Reform Act. Employees who work beyond age sixty-five (65) will continue to accrue the full benefits subject to the maximum accumulation of forty-five (45) years.

The following is a brief outline of pension eligibility and benefits. The Plan

and Trust Document are the ruling documents in all respects:

Eligibility - Age twenty-one (21), one (1) year of service, and 1,000 hours worked within a twelve (12) month period.

Normal Retirement Age sixty-five (65)

Early Retirement Age sixty-two (62)

Disability retirements are available to qualified employees:

The normal pension benefit will be fourteen dollars ($14.00) per month for each year of service.

There are a number of optional methods for payments of benefits Vesting occurs after five (5) years of Vesting Service

ARTICLE 17 401(k)

25 329061.1

Employees will be eligible for and covered under the Employer’s 401(k)

savings/retirement plan, as it may be amended from time to time.

ARTICLE 18 NO STRIKE OR LOCKOUT

1. There shall be no strike, picketing, work stoppage, slow down, sit

downs, or cessation of work, including of a sympathy nature, boycotts, or any walk out of any kind or for any reason, including any dispute relating to alleged unfair labor practices, during the term of this Agreement. The provisions of this Article shall be absolute and shall apply regardless of whether the dispute is subject to arbitration under the provisions of Article 6 of this Agreement.

2. It will not be a violation of this agreement for employees to refuse to go through a legally authorized picket line in any strike approved by a two-thirds (2/3) vote of the executive board of the Union.

ARTICLE 19 MAINTENANCE TOOL ALLOWANCE

Maintenance employees will be entitled to a tool allowance of up to $275 per year

to maintain and replace tools required by the Employer. Paid receipts must be presented to the Employer before payment is received by the employee. Employees will be reimbursed within fifteen (15) business days of presenting a receipt. Effective September 1, 2006, the tool allowance will increase to $300.

The tool allowance will be paid to eligible employees who are actively employed on

September 1. For those employed less than a full year at that time, the tool allowance will be prorated based on the number of full months worked in the preceding twelve (12) months resulting in one-twelfth (1/12th) of the allowance for each month.

Specialized tools and test equipment required for maintaining equipment, but not listed on the employee tool list will be provided by the employer. These tools will not generally be issued to maintenance employees, but will be stocked in the maintenance shop to be issued on an as needed basis.

ARTICLE 20 DISCRIMINATION

The Employer and the Union agree to abide by the federal law prohibiting

discrimination in hiring practices because of sex, race, age, religion, color, national origin or union membership. The Employer further agrees that there shall be no discrimination in

26 329061.1

regard to tenure, upgrading or work assignments because of sex, race, age, religion, color, national origin or union membership. All employees shall be permitted to wear their official Union button and/or official steward button provided the button is no larger than one and one-quarter (1-1/4) inches in diameter. However, the foregoing limitation on the number and size of buttons worn shall not apply to employees in classifications that are not visible to the public.

ARTICLE 21 RESPECT & DIGNITY

The Union and the Employer recognize that workers in the hospitality industry are

professional employees deserving of the highest regard. The Union, the Employer, the non-Union and Union employees will work together to honor the principles of respect, and dignity. The parties and non-Union and Union employees agree that the continued success and operation of this establishment is dependent upon their mutual respect for one another’s work.

ARTICLE 22 MANAGEMENT RIGHTS

Except as limited by the express provisions of this Agreement, and longstanding

mutually agreed on custom and past practice, the management of the business and the direction of the working forces shall rest solely and exclusively with the Employer. This includes, but is not limited to, the right to hire; to determine the quality and quantity of work performed; to determine the number of employees to be employed; to determine the jobs and job classifications; to layoff employees; to assign and delegate work; to maintain and improve efficiency; to promulgate and require observance of rules, regulations, and other policies; to direct the activities of all employees employed by the Employer; to schedule work and to determine the number of hours to be worked; to determine the methods and equipment to be utilized and the type of service to be provided; and to change, modify or discontinue existing methods of service and equipment to be used or provided.

ARTICLE 23

LAUNDRY AND DRY CLEANING WORK STABILIZATION

Notwithstanding any strike, work stoppage, interruption of work or other economic sanction instigated or conducted by the Union or employees against the Employer for any good reason, specifically including the occasion of negotiating new or different terms of collective bargaining agreements, there shall be no work stoppage or interruption of work as relates to materials being processed in the laundry and dry cleaning departments for the use of any public and private hospitals, the Mayo buildings and nursing homes.

27 329061.1

If such a strike or work stoppage occurs, the Employer and the Union will cooperate with the other to the end that regular employees of the Employer will be made available for the processing of such uninterrupted work and services of public and private hospitals, the Mayo buildings and nursing homes.

In consideration of the foregoing no-strike agreement, the Employer agrees that it will not process any other work in its laundry and dry cleaning facilities during the term of a strike, so long as the Union and the employees do process, without interruption, all work required for the use of any public and private hospitals, the Mayo buildings and nursing homes.

This article shall remain in full force and effect for a period equal to the life of the present collective bargaining agreement and/or any renewal thereof plus six (6) months in addition thereto.

Any breach or threatened breach of this Article or any of the terms thereof in addition

to any remedies at law or under the collective bargaining agreement shall be subject to suit for specific performance by the Employer or the Union.

ARTICLE 24 SUCCESSORSHIP

In the event the Employer decides to sell, transfer or assign its interest in any of

the four (4) hotels listed on page one (1) of this Agreement, or in Textile Care Services, it will, prior to closing, provide a copy of this Agreement to the purchaser, assignee or transferee. In addition, the Employer will notify the Union and bargain in good faith over the effects of the pending sale, transfer or assignment on bargaining unit employees, prior to closing. The Employer agrees to notify the Union of its intent to sell, transfer or assign its interest at the earliest possible date but in any case, no later than the date, of the execution of the purchase agreement.

ARTICLE 25

ENTIRE AGREEMENT

This Agreement incorporates the entire understanding between the parties and supersedes all prior agreements, letters of understanding, grievance settlements and past practices between the parties except for those practices identified by the parties in Appendix I of the 2001-05 agreement that may continue to be relevant. This Agreement shall be modified or amended only by a writing referring to this Agreement executed by both parties setting forth the amendment or modification.

ARTICLE 26 DURATION

28 329061.1

This Agreement shall be effective as of September 1, 2005 and continue in full force and effect to and including the 31st day of August, 2010 and continue thereafter from year to year unless either party hereto shall, at least sixty (60) days previous to the termination of any yearly period, notify the other party in writing of its intention to amend, modify or terminate this agreement. By yearly period the parties understand that the anniversary date of this contract will be August 31st of any succeeding year unless changed by mutual consent of the parties.

Wage increases set forth in Appendix A will be effective on the first Saturday in September during each year of the contract.

In the event of actual declaration of war by the Congress of the United States, this contract may be reopened by either party on sixty (60) days written notice.

IN WITNESS WHEREOF, The Employer and the Union have hereto set their hands

this _______ day of September 2005.

SUNSTONE HOTEL PROPERTIES, INC. UNITE HERE LOCAL 21 Bruce Fairchild, David Blanchard, Regional Director of Operations Secretary/Treasurer and

Business Manager

A-1 329061.1

APPENDIX “A”

Payroll Rates

The rates of pay for classifications are set forth below. The hiring rate shall apply

to employees transferring to another classification, providing there is no decrease in hourly rate. After an employee who has transferred to another classification completes three (3) months of continuous employment in the new classification, he/she will be granted the appropriate service rate based upon his/her continuous employment with the Employer. Employees will, however, be given credit for actual experience in filling in on the new position towards the three (3) months of continuous employment.

The Employer will have the right to select the individuals who will be classified

lead and to determine the number of lead positions and the shifts where they will be utilized. The Employer will also have the right to increase or decrease the number of lead positions in the future. The minimum wage differential for lead positions will be fifty cents (50¢) per hour. Leads shall be responsible for the general direction of employees in the department and ensuring that all tasks are completed.

329061.1 A-2

Sept. 1, 2005 Sept. 1, 2006

Textile Care Services Hire 12 Mo

24 Mo

42 Mo

60 Mo Hire

12 Mo

24 Mo

42 Mo

60 Mo

Production I 8.42 9.06 9.47 10.02 10.37 8.42 9.15 9.66 10.22 10.68 Feeder/Folder Inventory Preparation Production II 8.75 9.42 9.84 10.34 10.73 8.75 9.51 10.04 10.55 11.05 Cart Handler Production III 9.17 9.82 10.26 10.75 11.15 9.17 9.92 10.47 10.96 11.48 Janitor Dock Worker Soil Sorter Production IV 9.52 10.17 10.63 11.12 11.52 9.52 10.27 10.84 11.35 11.87 Dry Cleaner/Presser Mender Wearing Apparel Finisher Diverter/Classifier Op. Checker Washer Machine Op. Soil Sort Cart Dumper Production V 10.55 10.96 11.45 11.92 12.34 10.55 11.07 11.68 12.16 12.71 Utility Tunnel Dryer Operator Dry Cleaner Machine Operator Production VI 10.84 11.25 11.76 12.22 12.64 10.84 11.36 11.99 12.46 13.02 Tunnel Machine Operator Distribution VII 13.48 13.89 14.52 14.87 15.34 13.48 14.03 14.81 15.17 15.80 Commercial Sv. Rep. Distribution VIII 14.41 14.83 15.50 15.83 16.32 14.41 14.98 15.81 16.15 16.81 Service Rep/Utility Production IX 15.19 15.69 16.40 16.64 17.14 15.19 15.85 16.72 16.98 17.65 CDL TCS Maintenance Laundry Specialist 20.51 20.93 21.87 22.04 22.66 20.51 21.14 22.31 22.48 23.34 Mechanic 17.81 18.23 19.05 19.31 19.86 17.81 18.41 19.43 19.69 20.46 Apprentice 15.47 15.87 16.58 16.90 17.41 15.47 16.03 16.92 17.23 17.93 Preventive Maintenance 13.97 14.39 15.04 15.38 15.87 13.97 14.53 15.34 15.68 16.34 Light/Yard Maintenance 9.44 9.84 10.28 10.79 11.18 9.44 9.94 10.49 11.00 11.51

A-3 329061.1

Sept. 1, 2007 Sept. 1, 2008 Sept. 1, 2009

Hire 12 Mo

24 Mo

42 Mo

60 Mo Hire

12 Mo

24 Mo

42 Mo

60 Mo Hire

12 Mo

24 Mo

42 Mo

60 Mo

8.42 9.33 9.85 10.53 11.00 8.59 9.52 10.15 10.89 11.44 8.76 9.71 10.45 11.28 12.01

8.75 9.70 10.24 10.87 11.39 8.93 9.90 10.55 11.25 11.84 9.10 10.10 10.87 11.64 12.43

9.17 10.12 10.68 11.29 11.83 9.35 10.32 11.00 11.69 12.30 9.54 10.53 11.33 12.10 12.91

9.52 10.48 11.06 11.69 12.22 9.71 10.69 11.39 12.09 12.71 9.90 10.90 11.73 12.52 13.35

10.55 11.29 11.92 12.53 13.09 10.76 11.52 12.27 12.96 13.61 10.98 11.75 12.64 13.42 14.29

10.84 11.59 12.23 12.83 13.41 11.06 11.82 12.60 13.28 13.94 11.28 12.06 12.98 13.75 14.64

13.48 14.31 15.10 15.62 16.27 13.75 14.60 15.55 16.17 16.92 14.02 14.89 16.02 16.74 17.77

14.41 15.28 16.12 16.63 17.32 14.70 15.58 16.61 17.22 18.01 14.99 15.90 17.11 17.82 18.91

15.19 16.16 17.06 17.49 18.18 15.49 16.49 17.57 18.10 18.91 15.80 16.82 18.10 18.73 19.86

20.51 21.56 22.76 23.16 24.04 20.92 21.99 23.44 23.97 25.00 21.34 22.43 24.14 24.81 26.25 17.81 18.78 19.82 20.28 21.07 18.17 19.16 20.41 20.99 21.91 18.53 19.54 21.03 21.73 23.01 15.47 16.35 17.25 17.75 18.47 15.78 16.68 17.77 18.37 19.21 16.09 17.01 18.30 19.02 20.17 13.97 14.82 15.65 16.16 16.83 14.25 15.12 16.11 16.72 17.51 14.53 15.42 16.60 17.31 18.38 9.44 10.14 10.70 11.33 11.86 9.63 10.34 11.02 11.73 12.33 9.82 10.55 11.35 12.14 12.95

329061.1 A-4

Sept. 1, 2005 Sept. 1, 2006

Kahler Hotel Hire 12 Mo

24 Mo

42 Mo

60 Mo Hire

12 Mo

24 Mo

42 Mo

60 Mo

Cooks 2nd Cook 14.45 14.87 15.54 15.87 16.35 14.45 15.02 15.85 16.19 16.84 Lead Cook 13.43 13.85 14.47 14.84 15.30 13.43 13.99 14.76 15.13 15.76 Cook 12.96 13.37 13.97 14.36 14.81 12.96 13.51 14.25 14.65 15.25 Line Cook 10.00 10.38 10.84 11.34 11.74 10.00 10.48 11.06 11.57 12.10 Prep & Serving Pantry & Veg-Lead 8.54 8.96 9.36 9.88 10.26 8.54 9.05 9.55 10.08 10.56 Pantry & Veg-Prep 8.08 8.48 8.86 9.40 9.76 8.08 8.57 9.04 9.59 10.05 Service Bar-Attend 8.03 8.45 8.83 9.36 9.72 8.03 8.53 9.00 9.55 10.01 Snack Bar-Attend 9.67 10.06 10.51 11.01 11.39 9.67 10.16 10.72 11.23 11.74 Storeroom Helper 8.39 8.79 9.18 9.71 10.07 8.39 8.87 9.36 9.90 10.38 Room SV Tele & Setup 8.43 8.86 9.25 9.78 10.12 8.43 8.94 9.44 9.97 10.43 Meat Carver 11.92 12.32 12.87 13.30 13.74 11.92 12.44 13.13 13.56 14.15 Banquet Set up 8.26 9.05 9.46 10.39 10.76 8.26 9.15 9.65 10.60 11.09 Sanitation Busperson 8.19 8.99 9.39 10.33 10.71 8.19 9.08 9.58 10.53 11.03 Dishmachine Oper & Porter 8.26 9.05 9.46 10.39 10.76 8.26 9.15 9.65 10.60 11.09 Potwasher 8.26 9.05 9.46 10.39 10.76 8.26 9.15 9.65 10.60 11.09 Bartenders Bartenders (hired b/f 9/1/91) N/A N/A N/A N/A 13.03 N/A N/A N/A N/A 13.42 Bartenders 8.51 8.84 9.24 9.59 9.86 8.51 8.93 9.42 9.78 10.16 Rooms Housekeeper 9.53 9.91 10.36 10.86 11.24 9.53 10.01 10.57 11.08 11.58 Lobby Porter 7.91 8.31 8.68 9.24 9.58 7.91 8.39 8.85 9.43 9.86 Door Person 7.91 8.31 9.12 9.24 9.25 7.91 8.31 9.12 9.24 9.25 PBX Operator 10.01 10.96 11.45 12.16 12.57 10.01 11.07 11.68 12.40 12.95 Tip Classifications Server 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 Bellperson 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 Bell Captain 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 Maintenance Dept. Specialist/Lead/Required License 18.73 19.15 20.01 20.21 20.78 18.73 19.34 20.41 20.61 21.40 Mechanic 17.81 18.23 19.05 19.30 19.86 17.81 18.41 19.43 19.69 20.45 Apprentice 15.47 15.87 16.59 16.90 17.41 15.47 16.03 16.92 17.24 17.93 Preventative Maintenance 13.97 14.39 15.04 15.38 15.86 13.97 14.53 15.34 15.69 16.34 Light/Yard Maintenance 9.44 9.84 10.28 10.78 11.18 9.44 9.94 10.49 11.00 11.51

329061.1 A-5

Sept. 1, 2007 Sept. 1, 2008 Sept. 1, 2009

Hire 12 Mo

24 Mo

42 Mo

60 Mo Hire

12 Mo

24 Mo

42 Mo

60 Mo Hire

12 Mo

24 Mo

42 Mo

60 Mo

14.45 15.32 16.17 16.67 17.34 14.74 15.62 16.65 17.25 18.03 15.03 15.94 17.15 17.86 18.94 13.43 14.27 15.06 15.59 16.24 13.70 14.55 15.51 16.13 16.89 13.97 14.85 15.98 16.70 17.73 12.96 13.78 14.54 15.09 15.71 13.22 14.05 14.97 15.62 16.34 13.49 14.33 15.42 16.16 17.16 10.00 10.69 11.28 11.91 12.46 10.20 10.90 11.62 12.33 12.96 10.41 11.12 11.97 12.76 13.61

8.54 9.23 9.74 10.38 10.88 8.71 9.42 10.03 10.75 11.32 8.88 9.60 10.34 11.12 11.88 8.08 8.74 9.22 9.87 10.35 8.25 8.91 9.50 10.22 10.77 8.41 9.09 9.78 10.58 11.31 8.03 8.70 9.18 9.84 10.31 8.19 8.88 9.46 10.18 10.73 8.35 9.05 9.74 10.54 11.26 9.67 10.36 10.94 11.57 12.09 9.87 10.57 11.27 11.97 12.57 10.07 10.78 11.60 12.39 13.20 8.39 9.05 9.55 10.20 10.69 8.56 9.23 9.84 10.55 11.11 8.73 9.42 10.13 10.92 11.67 8.43 9.12 9.63 10.27 10.74 8.60 9.31 9.92 10.63 11.17 8.78 9.49 10.21 11.00 11.73 11.92 12.69 13.39 13.97 14.58 12.16 12.94 13.79 14.46 15.16 12.40 13.20 14.21 14.96 15.92 8.26 9.33 9.84 10.92 11.42 8.42 9.51 10.14 11.30 11.88 8.59 9.71 10.44 11.69 12.47

8.19 9.26 9.77 10.85 11.36 8.36 9.45 10.07 11.23 11.81 8.52 9.63 10.37 11.62 12.41 8.26 9.33 9.84 10.92 11.42 8.42 9.51 10.14 11.30 11.88 8.59 9.71 10.44 11.70 12.47 8.26 9.33 9.84 10.92 11.42 8.42 9.51 10.14 11.30 11.88 8.59 9.71 10.44 11.70 12.47

N/A N/A N/A N/A 13.82 N/A N/A N/A N/A 14.38 N/A N/A N/A N/A 15.10 8.51 9.11 9.61 10.08 10.46 8.68 9.29 9.90 10.43 10.88 8.85 9.47 10.20 10.80 11.43

9.53 10.21 10.78 11.41 11.93 9.72 10.42 11.10 11.81 12.40 9.91 10.63 11.43 12.22 13.02 7.91 8.56 9.03 9.71 10.16 8.07 8.73 9.30 10.05 10.57 8.23 8.90 9.58 10.40 11.10 7.91 8.31 9.12 9.24 9.25 7.91 8.31 9.12 9.24 9.25 7.91 8.31 9.12 9.24 9.25 10.01 11.29 11.92 12.77 13.33 10.21 11.52 12.28 13.22 13.87 10.42 11.75 12.64 13.68 14.56

6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15

18.73 19.73 20.82 21.23 22.04 19.10 20.12 21.45 21.97 22.92 19.49 20.53 22.09 22.74 24.07 17.81 18.78 19.82 20.28 21.07 18.16 19.15 20.41 20.99 21.91 18.52 19.54 21.02 21.73 23.00 15.47 16.35 17.26 17.75 18.47 15.77 16.68 17.78 18.38 19.21 16.09 17.02 18.31 19.02 20.17 13.97 14.82 15.64 16.16 16.83 14.25 15.12 16.11 16.73 17.50 14.53 15.42 16.60 17.31 18.38 9.44 10.14 10.70 11.33 11.86 9.63 10.34 11.02 11.73 12.33 9.82 10.55 11.35 12.14 12.95

329061.1 A-6

Sept. 1, 2005 Sept. 1, 2006

Marriott Hotel Hire 12 Mo

24 Mo

42 Mo 60 Mo Hire

12 Mo

24 Mo

42 Mo

60 Mo

Cooks Lead Cook 13.43 13.85 14.47 14.84 15.30 13.43 13.99 14.76 15.13 15.76 Cook 12.96 13.37 13.97 14.36 14.81 12.96 13.51 14.25 14.65 15.25 Line Cook 10.00 10.38 10.84 11.34 11.74 10.00 10.48 11.06 11.57 12.10 Prep & Serving Pantry & Veg-Prep 8.08 8.48 8.86 9.40 9.76 8.08 8.57 9.04 9.59 10.05 Banquet Set up 8.26 9.05 9.46 10.39 10.76 8.26 9.15 9.65 10.61 11.09 Sanitation Busperson 8.19 8.99 9.39 10.33 10.71 8.19 9.08 9.58 10.53 11.03 Dishmachine Oper & Porter 8.26 9.05 9.46 10.39 10.76 8.26 9.15 9.65 10.60 11.09 Potwasher 8.26 9.05 9.46 10.39 10.76 8.26 9.15 9.65 10.60 11.09 Bartenders Bartenders (hired b/f 9/1/91) N/A N/A N/A N/A 13.03 N/A N/A N/A N/A 13.42 Bartenders 8.51 8.84 9.24 9.59 9.86 8.51 8.93 9.42 9.78 10.16 Rooms Housekeeper 9.53 9.91 10.36 10.86 11.24 9.53 10.01 10.57 11.08 11.58 Lobby Porter 7.91 8.31 8.68 9.24 9.58 7.91 8.39 8.85 9.43 9.86 Door Person 7.91 8.31 9.12 9.24 9.25 7.91 8.31 9.12 9.24 9.25 Tip Classificatons Server 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 Bellperson 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 Maintenance Dept. Specialist/Lead/Required License 18.73 19.15 20.01 20.21 20.78 18.73 19.34 20.41 20.61 21.40 Mechanic 17.81 18.23 19.05 19.30 19.86 17.81 18.41 19.43 19.69 20.45 Apprentice 15.47 15.87 16.59 16.90 17.41 15.47 16.03 16.92 17.24 17.93 Preventative Maintenance 13.97 14.39 15.04 15.38 15.86 13.97 14.53 15.34 15.69 16.34 Light/Yard Maintenance 9.44 9.84 10.28 10.78 11.18 9.44 9.94 10.49 11.00 11.51

329061.1 A-7

Sept. 1, 2007 Sept. 1, 2008 Sept. 1, 2009

Hire 12 Mo

24 Mo

42 Mo

60 Mo Hire

12 Mo

24 Mo

42 Mo

60 Mo Hire

12 Mo

24 Mo

42 Mo

60 Mo

13.43 14.27 15.06 15.59 16.24 13.70 14.55 15.51 16.13 16.89 13.97 14.85 15.98 16.70 17.73 12.96 13.78 14.54 15.09 15.71 13.22 14.05 14.97 15.62 16.34 13.49 14.33 15.42 16.16 17.16 10.00 10.69 11.28 11.91 12.46 10.20 10.90 11.62 12.33 12.96 10.41 11.12 11.97 12.76 13.61

8.08 8.74 9.22 9.87 10.35 8.25 8.91 9.50 10.22 10.77 8.41 9.09 9.78 10.58 11.31 8.26 9.33 9.84 10.93 11.42 8.42 9.51 10.14 11.31 11.88 8.59 9.71 10.44 11.70 12.47

8.19 9.26 9.77 10.85 11.36 8.36 9.45 10.07 11.23 11.81 8.52 9.63 10.37 11.62 12.41 8.26 9.33 9.84 10.92 11.42 8.42 9.51 10.14 11.30 11.88 8.59 9.71 10.44 11.70 12.47 8.26 9.33 9.84 10.92 11.42 8.42 9.51 10.14 11.30 11.88 8.59 9.71 10.44 11.70 12.47

N/A N/A N/A N/A 13.82 N/A N/A N/A N/A 14.38 N/A N/A N/A N/A 15.10 8.51 9.11 9.61 10.08 10.46 8.68 9.29 9.90 10.43 10.88 8.85 9.47 10.20 10.80 11.43

9.53 10.21 10.78 11.41 11.93 9.72 10.42 11.10 11.81 12.40 9.91 10.63 11.43 12.22 13.02 7.91 8.56 9.03 9.71 10.16 8.07 8.73 9.30 10.05 10.57 8.23 8.90 9.58 10.40 11.10 7.91 8.31 9.12 9.24 9.25 7.91 8.31 9.12 9.24 9.25 7.91 8.31 9.12 9.24 9.25

6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15

18.73 19.73 20.82 21.23 22.04 19.10 20.12 21.45 21.97 22.92 19.49 20.53 22.09 22.74 24.07 17.81 18.78 19.82 20.28 21.07 18.16 19.15 20.41 20.99 21.91 18.52 19.54 21.02 21.73 23.00 15.47 16.35 17.26 17.75 18.47 15.77 16.68 17.78 18.38 19.21 16.09 17.02 18.31 19.02 20.17 13.97 14.82 15.64 16.16 16.83 14.25 15.12 16.11 16.73 17.50 14.53 15.42 16.60 17.31 18.38 9.44 10.14 10.70 11.33 11.86 9.63 10.34 11.02 11.73 12.33 9.82 10.55 11.35 12.14 12.95

329061.1 A-8

Sept. 1, 2005 Sept. 1, 2006

Kahler Inn & Suites Hire 12 Mo

24 Mo

42 Mo

60 Mo Hire

12 Mo

24 Mo

42 Mo

60 Mo

Cooks Lead Cook 13.43 13.85 14.47 14.84 15.30 13.43 13.99 14.76 15.13 15.76 Cook 12.96 13.37 13.97 14.36 14.81 12.96 13.51 14.25 14.65 15.25 Line Cook 10.00 10.38 10.84 11.34 11.74 10.00 10.48 11.06 11.57 12.10 Prep & Serving Pantry & Veg-Prep 8.08 8.48 8.86 9.40 9.76 8.08 8.57 9.04 9.59 10.05 Service Bar-Attend 8.03 8.45 8.83 9.36 9.72 8.03 8.53 9.00 9.55 10.01 Sanitation Busperson 8.19 8.99 9.39 10.33 10.71 8.19 9.08 9.58 10.53 11.03 Dishmachine Oper & Porter 8.26 9.05 9.46 10.39 10.76 8.26 9.15 9.65 10.60 11.09 Potwasher 8.26 9.05 9.46 10.39 10.76 8.26 9.15 9.65 10.60 11.09 Rooms Housekeeper 9.53 9.91 10.36 10.86 11.24 9.53 10.01 10.57 11.08 11.58 Lobby Porter 7.91 8.31 8.68 9.24 9.58 7.91 8.39 8.85 9.43 9.86 Door Person 7.91 8.31 9.12 9.24 9.25 7.91 8.31 9.12 9.24 9.25 Tip Classificatons Server 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 Bellperson 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 Maintenance Dept. Specialist/Lead/Required License 18.73 19.15 20.01 20.21 20.78 18.73 19.34 20.41 20.61 21.40 Mechanic 17.81 18.23 19.05 19.30 19.86 17.81 18.41 19.43 19.69 20.45 Apprentice 15.47 15.87 16.59 16.90 17.41 15.47 16.03 16.92 17.24 17.93 Preventative Maintenance 13.97 14.39 15.04 15.38 15.86 13.97 14.53 15.34 15.69 16.34 Light/Yard Maintenance 9.44 9.84 10.28 10.78 11.18 9.44 9.94 10.49 11.00 11.51

329061.1 A-9

Sept. 1, 2007 Sept. 1, 2008 Sept. 1, 2009

Hire 12 Mo

24 Mo

42 Mo

60 Mo Hire

12 Mo

24 Mo

42 Mo

60 Mo Hire

12 Mo

24 Mo

42 Mo

60 Mo

13.43 14.27 15.06 15.59 16.24 13.70 14.55 15.51 16.13 16.89 13.97 14.85 15.98 16.70 17.73 12.96 13.78 14.54 15.09 15.71 13.22 14.05 14.97 15.62 16.34 13.49 14.33 15.42 16.16 17.16 10.00 10.69 11.28 11.91 12.46 10.20 10.90 11.62 12.33 12.96 10.41 11.12 11.97 12.76 13.61

8.08 8.74 9.22 9.87 10.35 8.25 8.91 9.50 10.22 10.77 8.41 9.09 9.78 10.58 11.31 8.03 8.70 9.18 9.84 10.31 8.19 8.88 9.46 10.18 10.73 8.35 9.05 9.74 10.54 11.26

8.19 9.26 9.77 10.85 11.36 8.36 9.45 10.07 11.23 11.81 8.52 9.63 10.37 11.62 12.41 8.26 9.33 9.84 10.92 11.42 8.42 9.51 10.14 11.30 11.88 8.59 9.71 10.44 11.70 12.47 8.26 9.33 9.84 10.92 11.42 8.42 9.51 10.14 11.30 11.88 8.59 9.71 10.44 11.70 12.47

9.53 10.21 10.78 11.41 11.93 9.72 10.42 11.10 11.81 12.40 9.91 10.63 11.43 12.22 13.02 7.91 8.56 9.03 9.71 10.16 8.07 8.73 9.30 10.05 10.57 8.23 8.90 9.58 10.40 11.10 7.91 8.31 9.12 9.24 9.25 7.91 8.31 9.12 9.24 9.25 7.91 8.31 9.12 9.24 9.25

6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15 6.15

18.73 19.73 20.82 21.23 22.04 19.10 20.12 21.45 21.97 22.92 19.49 20.53 22.09 22.74 24.07 17.81 18.78 19.82 20.28 21.07 18.16 19.15 20.41 20.99 21.91 18.52 19.54 21.02 21.73 23.00 15.47 16.35 17.26 17.75 18.47 15.77 16.68 17.78 18.38 19.21 16.09 17.02 18.31 19.02 20.17 13.97 14.82 15.64 16.16 16.83 14.25 15.12 16.11 16.73 17.50 14.53 15.42 16.60 17.31 18.38 9.44 10.14 10.70 11.33 11.86 9.63 10.34 11.02 11.73 12.33 9.82 10.55 11.35 12.14 12.95

329061.1 A-10

Sept. 1, 2005 Sept. 1, 2006

Holiday Inn Express Hire 12 Mo

24 Mo

42 Mo

60 Mo Hire

12 Mo

24 Mo

42 Mo

60 Mo

Rooms Housekeeper 9.53 9.91 10.36 10.86 11.24 9.53 10.01 10.57 11.08 11.58 Maintenance Dept. Specialist/Lead/Required License 18.73 19.15 20.01 20.21 20.78 18.73 19.34 20.41 20.61 21.40 Mechanic 17.81 18.23 19.05 19.30 19.86 17.81 18.41 19.43 19.69 20.45 Apprentice 15.47 15.87 16.59 16.90 17.41 15.47 16.03 16.92 17.24 17.93 Preventative Maintenance 13.97 14.39 15.04 15.38 15.86 13.97 14.53 15.34 15.69 16.34 Light/Yard Maintenance 9.44 9.84 10.28 10.78 11.18 9.44 9.94 10.49 11.00 11.51

329061.1 A-11

Sept. 1, 2007 Sept. 1, 2008 Sept. 1, 2009

Hire 12 Mo

24 Mo

42 Mo

60 Mo Hire

12 Mo

24 Mo

42 Mo

60 Mo Hire

12 Mo

24 Mo

42 Mo

60 Mo

9.53 10.21 10.78 11.41 11.93 9.72 10.42 11.10 11.81 12.40 9.91 10.63 11.43 12.22 13.02

18.73 19.73 20.82 21.23 22.04 19.10 20.12 21.45 21.97 22.92 19.49 20.53 22.09 22.74 24.07 17.81 18.78 19.82 20.28 21.07 18.16 19.15 20.41 20.99 21.91 18.52 19.54 21.02 21.73 23.00 15.47 16.35 17.26 17.75 18.47 15.77 16.68 17.78 18.38 19.21 16.09 17.02 18.31 19.02 20.17 13.97 14.82 15.64 16.16 16.83 14.25 15.12 16.11 16.73 17.50 14.53 15.42 16.60 17.31 18.38 9.44 10.14 10.70 11.33 11.86 9.63 10.34 11.02 11.73 12.33 9.82 10.55 11.35 12.14 12.95

329061.1 B-1

APPENDIX “B”

Departments And Seniority Sections

THE KAHLER GRAND HOTEL

Food & Beverage Department • Cooking Section • Preparation Section • Lord Essex Serving Section • Room Service Serving Section • Grand Grill Serving Section • Function Serving Section • Function Set-Up • Sanitation Section • Bartenders Section • Stores Section • Room Service Telephone Section • Starbucks Section • U-Club Section

Rooms Department • PBX Section • Bellperson, Lobby Porter Section • Housekeeping Section

Maintenance Department

• Maintenance Section KAHLER INN & SUITES

Food and Beverage Department • Cooking Section • Serving Section • Sanitation Section

Rooms Department

Housekeeping Section Bellperson Section

Maintenance Department

B-2 329061.1

• Maintenance Section HOLIDAY INN EXPRESS

Rooms Department • Bellperson, Lobby Porter Section • Housekeeping Section

Maintenance Department

• Maintenance Section

ROCHESTER MARRIOTT

Food and Beverage Department • Cooking Section • Preparation Section • Serving Section • Room Service Serving Section • Function Serving Section • Function Set-Up • Sanitation Section • Bartenders Section • Stores Section

Rooms Department

• Bellperson, Doorperson Section • Housekeeping Section

Maintenance Department

• Maintenance Section

TEXTILE CARE SERVICES Production Department

• Receiving Section • Wash Section • Flat/Tumble Finishing Section • Wearing Apparel Finishing Section • Packaging/Shipping Section • Dry Cleaning Section • Utility Section

Distribution Department

• Service Representative Section

B-3 329061.1

Maintenance Department

• Maintenance Section

329061.1 C-1

APPENDIX “C”

MAINTENANCE ADDENDUM

Apprentices in the Maintenance Department will be permitted to take a test to move to the “mechanic” classification after completing two years of service as an apprentice. The apprentice wishing to take the test will furnish the employer with a written request and will be permitted to take the test within thirty (30) calendar days following the written request. The employer will inform the apprentice of the test results within thirty (30) calendar days of taking the test. If the apprentice passes the test he/she will be promoted to the “mechanic” classification.

At Textile Care Services, the laundry specialist classification will require the employee to have a class 1-B boiler license and maintenance electrician’s license. The employee will be required to demonstrate skills in electronics to troubleshoot PLC and computer control systems, make programming changes as directed by the equipment manufacturer and repair circuit boards. The employee will be required to demonstrate proficiency in welding and plumbing.

The Employer agrees to provide, at no cost to the employee, for all training and education that is required for maintenance employees to obtain and maintain licensure provided the training is approved by the Employer and the course is successfully completed.

The Employer agrees to employ no more than the, following number of employees in the classifications of light/yard maintenance and preventative maintenance:

Facility Light/Yard Preventative The Kahler Grand Hotel 2 2 Kahler Inn & Suites 1 1Rochester Marriott , 1 1Holiday Inn Express 1 1TCS 1 3

Seniority Rights. The Employer will maintain a system-wide/departmental

seniority list containing the names of all maintenance employees at the four (4) hotels for purposes of layoff, sale of one (1) or more of the hotels, and bidding on job openings. In addition, separate seniority lists will be maintained at each hotel, by classification, for purposes of vacation preference, shift preference, overtime, and “temporary” reduction of hours. A separate seniority list for maintenance employees working at Textile Care Services will be maintained for purposes of all seniority rights. “Temporary” as used in this paragraph shall mean reduction of hours after the weekly schedule is posted, or

C-2 329061.1

before the weekly schedule is posted up to a maximum of twenty percent (20%) reduction in a work week.

As part of the 2001 reorganization of the maintenance department and possible reclassification of maintenance employees, positions at all locations will be posted and maintenance employees will be allowed to bid on the positions based on system wide/departmental seniority, according to the job bid procedures set forth in Article 3, Section 7.

Staffing and appropriate coverage at all locations will be determined by management.

With the exception of apprentices, advancement to a higher paid classification

will only be permitted when a new position opens in a specific classification. Any and all license requirements will be determined by management and/or

applicable law.

No maintenance employee’s wages will be reduced or frozen as a result of the 2001 reorganization of the maintenance department, reclassification of maintenance employees in connection with the reorganization, or the creation of new classifications as set forth in Appendix A.

329061.1 D-1

APPENDIX “D”

Housekeeping Addendum

A housekeeping employee shall not be required to clean more than seventeen (17) rooms (sixteen (16) rooms at the Marriott Rochester) within eight (8) hours. When a housekeeping employee cleans eleven (11) or more check outs in a day, the maximum number of assigned rooms shall be reduced by one (1), and when a housekeeping employee cleans fourteen (14) or more check outs in a day, the maximum number of assigned rooms shall be reduced by two (2). Each bedroom or separate sitting room of a suite shall count as one (1) room. Management in its sole discretion may reduce the number of rooms to be cleaned during a shift or assign a houseperson to assist a housekeeping employee with rooms where, for example, rooms are exceptionally dirty or extraordinary cleaning is required.

A housekeeping employee who volunteers to clean more than the foregoing

amount of rooms within eight (8) hours shall be paid a bought room bonus of seven dollars ($7.00) for each additional room. However, the bought room bonus shall not apply to rooms cleaned during overtime.

The Employer shall permit non-probationary housekeeping employees to

leave up to thirty (30) minutes before the end of their scheduled shift, with no loss of pay, after having cleaned all assigned rooms to Hotel standards. Where a housekeeping employee receives a documented verbal or written warning for failure to meet Hotel standards, the housekeeping employee will not be permitted to leave early for thirty (30) days.

Employees asked to clean residential Condos will be paid an additional five dollars ($5.00) per hour with a minimum of one (1) hour.

Housekeeping supervisors shall not normally enter a checkout room before it is

cleaned unless the housekeeper assigned to the room accompanies the supervisor. The Employer shall not arbitrarily reassign housekeeping sections. The Employer will install sharps containers in all Hotel public restrooms.

No Hotel employees shall be required, to clean up and/or dispose of human or

animal waste, vomit or significant blood spill. Employees shall comply with the Employer’s procedures whenever they encounter human or animal feces, vomit, or significant blood spill in the workplace, and shall immediately contact a qualified responder who will handle disposal.

D-2 329061.1

Hotel employees shall not be required to handle any items that have been placed in

a bio-hazard bag. Employees shall contact their supervisor for handling of those items.

In the event Hotel employees encounter improperly discarded syringes or other sharp objects while working, they shall be disposed of in accordance with established policy. The policy will include adequate available “sharps” containers for collection.

329061.1 E-1

APPENDIX “E”

Banquet Department Addendum

Banquet Definition. A banquet shall be deemed to be any reserved function with a pre-set menu and a fixed cost, including receptions, supervised by the banquet department.

System-Wide Seniority. For purposes of lay-off, recall and filling available positions, the Employer shall maintain a master seniority list which shall contain the names of all regular full-time and regular part-time banquet servers who work in each of the Employer’s hotels. Seniority shall be based on first function worked as a regular server following completion of probation.

Seniority by Location. The Employer will maintain at each location three (3) banquet employee seniority lists for purposes of scheduling at each of the Hotels.

A. First List. The First List will contain the names of all regular full-time banquet employees. These employees must be available to work any shift at the Hotel(s), seven days per week. The seniority list for regular full-time banquet employees shall be posted every month.

Although fluctuations in business will have an impact on the Employer’s ability to consistently schedule these employees on a full-time basis, it is the intention of the parties to provide First List employees with a reasonable opportunity to work a full-time schedule. Accordingly, the number of employees on the First List will be established and maintained so as to reflect this intention.

B. Second List.

The Second List will contain the names of banquet employees who are available to work a minimum of three (3) shifts, per week, at the Hotel(s). The days and shifts on which such employees are available will be submitted to management in writing. Second List employees will be on a separate seniority list, which will be posted. Second List employees will be scheduled only after the First List has been exhausted, when necessary, to meet staffing needs, or where use of the First List employees would result in the payment of overtime.

C. On-Call List.

The On-Call List will contain the names of banquet employees who are called and work on an “as needed” basis at the Hotel(s). On-Call employees

E-2 329061.1

may be scheduled when the First and Second Lists have been exhausted, where necessary to meet staffing needs, or where use of First or Second List employees would result in the payment of overtime. Local 21 will check hours worked on a monthly basis to see if hours worked fall under guidelines (average 10 hours/week are subject to dues).

D. Seniority Standing. 1. First List employees moving to the Second List will be “dove-

tailed” based on seniority date. The Second List employees moving to the First List will go to the bottom of the list with seniority based on date of transfer.

2. First List servers will have preference for scheduling purposes at

their own Hotel and preference over Second List and On-Call servers at the other Hotels.

3. Maximum hours available will be offered to senior First List

employees, up to forty (40) hours per week, but no employee will work a-triple shift until all First List employees have been offered a double shift.

4. Any regular server involuntarily cut from a function shall be

entitled to bump the least senior server scheduled to work at their home Hotel, in that work week.

5. Employee requests for days off must be received in writing by

noon, forty-eight (48) hours prior to posting of the weekly schedule, and will be duly considered. A regular server will not be disciplined for his/her inability to work a shift if the server is notified less than twenty-four (24) hours before the scheduled shift.

6. All weekly banquet schedules shall be posted at each of the

Hotels. It is understood that employees may be required to work at all locations.

E. Special Conditions/Scheduling.

Employees will be scheduled by shifts. A shift is defined as a work period of no less than three (3) hours and no more than eight (8) hours. A shift may include working one, or any combination of, the following events:

• Breakfasts • Coffee Breaks • Lunches • Dinners

E-3 329061.1

• Receptions • Special Events

Banquet Employee Compensation.

A. Banquet Service Charge. Banquet servers shall receive fifteen (15%)

of the banquet service charge on all functions, including those contracted for at the Civic Center.

B. Service Charges on Guaranteed Meals. Service charges shall be paid on the

guaranteed number of meals paid for by the customer.

C. Service Charge on Complimentary Functioning. Servers who work a promotional function for which the Hotel does not charge the guest will be paid a service charge percentage consistent with the above schedule. The service charge will be calculated on the retail value of the function.

D. Corkage Fees. When the Employer collects a corkage fee for guest-supplied

alcohol, fifty percent (50%) of that fee shall be added to the service charge pool. For events where no corkage fee is collected, fifty percent (50%) of the customary fee will be added to the service charge pool. However, the foregoing shall not apply to off-site events where the customer will not pay the corkage fee.

E. Cake Cutting. One-half of the cake plating charge shall be included in the

tip pool.

F. Service Charge Increase. Should the service charge be increased, the Hotel will retain the full increase up to seventeen and one-half percent (17-1/2%) percent. Any service charge over seventeen and one-half percent (17-1/2%) percent will be divided equally between the employees and the Hotel.

Tip Pooling System

G. Hotels. Service charge will be pooled and divided on a daily basis based on hours worked at each Hotel.

H. Civic Center. The service charge will be pooled and divided on a daily

basis based on hours worked. Students will be included in the tip pool. However, the student share shall revert to the Employer. Temporary employees shall not be included in the tip pool.

I. Employer Records. The employer records on the amount of service

charge and method of distribution shall be made available to the Union

E-4 329061.1

Representative or designee for purposes of monitoring the tip pooling system. The Union may request a meeting on a quarterly basis to review the system.

F-1 329061.1

APPENDIX “F”

Food and Beverage Addendum

All Employees working in the cook classification will receive a meal during their shift at no cost to the employee.

University Club.

A. Compensation. University Club servers shall be paid at the snack-bar attendant rate and will receive fifteen (15%) of sales plus gratuities voluntarily given. Hours worked at the University Club will not be included in the tip pool.

B. Job Category. The Employer agrees to post the University Club server

position as a separate job category. It is agreed that the banquet servers will staff the University Club until employees are hired for the position and when the position is vacant.

The lead cook rate of pay will be applied to at least one (1) cook in the Grand

Grill, Center Street Country Cafe, and Oak Room for all hours of operation. It is agreed there will be no more than one (1) sous chef and one

(1) executive chef assigned per shift at each hotel. Starbucks and Bakery Basket employees will be paid at the snack bar rate. The Employer will not subcontract or lease out to another food and beverage

operator any kitchen, bar, or restaurant in either the Marriott or Kahler Grand that is subject to this Agreement.

G-1 329061.1

APPENDIX “G”

Textile Care Services Addendum

Employees in the janitor classification shall receive the same night shift differential as the maintenance classification.

The Employer shall provide employees working in the soil sort department with

OSHA-approved gowns and gloves. Employees shall not remove these items from the premises.

H-1 329061.1

APPENDIX “H” Bell Position Addendum

For groups of more than ten (10) people, bellpersons shall receive a portage rate of

two dollars ($2.00) per person each coming in and two dollars ($2.00) each for going out if negotiated and collected. It is agreed that these amounts are only minimums.

I-1

APPENDIX “I”

GUEST SERVICE

The parties agree to supplement the Agreement for the following purposes:

WHEREAS, the parties recognize that premier guest service is essential to the success of the Hotel and its ability to employ persons who are paid competitive wages;

WHEREAS, the parties recognize that because most guest dissatisfaction is not reported, and most dissatisfied guests simply take their business elsewhere, the guest complaints received by the Hotel are a reflection of dissatisfaction by some who have not complained but who will not return to the Hotel;

WHEREAS, the parties agree that the Hotel shall train employees on how to provide premier guest service and that each employee may be expected to successfully complete such training;

WHEREAS, the parties agree that the Hotel should not employ or continue to employ employees who are either unable or unwilling to provide, or who do not provide, premier guest service;

NOW, THEREFORE, the parties agree as follows: (1) The Hotel has the right to establish service standards and appearance, grooming, and dress standards that must be adhered to by all employees and managers.

(2) The parties agree that the Hotel may apply progressive discipline, up to and including discharge, against employees who are the subject of guest complaints other than those set forth in the following paragraph 3 (examples of complaints include, but are not limited to, misplaced luggage, guest room not completely cleaned, mishandled food or beverage order, incorrect credit card charge). (3) The parties agree that the Hotel shall have just cause for discharge of any employee who, among other reasons:

a) Is the subject of two or more legitimate complaints from guests within one year of poor, rude, or discourteous service (examples include, but are not limited to, use of foul language in the presence of a guest, arguing with a guest, indifference to a guest concern, carrying on personal business while a guest is waiting);

I-2

b) Is the subject of one legitimate complaint from a guest of extraordinarily

poor, rude, or discourteous guest service (examples include, but are not limited to, directing foul language toward a guest, sexual or other harassment of a guest, refusal to assist a guest, requesting or adding a gratuity);

c) Fails to pass a course pertaining to the Hotel’s service standards;

d) Acts in gross neglect of the Hotel’s service standards on one occasion or

more, unless the Hotel deems it appropriate to excuse such neglect on a non-precedent setting basis.

(4) In the event the Hotel chooses to conduct written or oral testing of

employees in connection with guest service training, such tests must be reasonable, job related, and non-discriminatory. Such tests shall be limited to guest service and communication skills and abilities, as well as employee knowledge of the services and products offered by the Hotel. The Union shall be permitted to a copy of any tests used in advance of utilization by the Hotel. The Union shall be permitted to grieve such tests if it believes they are unreasonable, not job related, and/or discriminate on an unlawful basis.

(5) Where a guest complaint is reduced to writing, the Hotel shall not be required to compel the guest to testify during the grievance and arbitration procedure or reveal the guest’s address or telephone number to the Union or to the employee. The Hotel may introduce into evidence at arbitration written guest complaints. Upon request of the Union, the Hotel shall provide the Union with a copy of any written guest complaint that resulted in disciplinary action being taken against an employee, with the guest’s identity redacted from such copy. Where the Union wishes to investigate a complaint, the Hotel shall arrange for a conference call between the guest, a representative of the Union, and a representative of Hotel management. Where, however, an employee has been discharged based on one or more guest complaints the Union shall be permitted to investigate the complaint to the extent permitted by the National Labor Relations Act, as interpreted by the National Labor Relations Board and the courts.

J-1

APPENDIX “J”

DRUG AND ALCOHOL TESTING

This Drug and Alcohol Testing Policy is intended to be in accordance with Minnesota law and with the terms of the Agreement. OBJECTIVE:

The Company strives to maintain a work environment free from the effects of drug and alcohol abuse for the protection of our customers, employees, and the community.

The Company recognizes that alcoholism and other drug dependencies are behavioral/medical problems which can be treated. POLICY STATEMENTS:

1. The possession, use, manufacture, transfer, or sale of illegal drugs during work hours, while operating a Company vehicle or on Company premises is prohibited. The Company premises include all SUNSTONE HOTEL PROPERTIES, INC. worksites, including parking facilities. Employees violating this provision may be terminated.

2. Employees are not permitted to work under the influence of alcohol or any illegal drug. Employees violating this provision are subject to disciplinary action up to and including termination.

3. Abuse of legally prescribed drugs or controlled substances, or over-the-counter drugs, is prohibited because it may impair an employee’s ability to perform his or her job responsibilities. Depending on individual circumstances, this abuse could result in termination.

4. Employees suffering from drug dependency are encouraged to seek medical treatment. The Human Resources representative may be contacted for referrals for evaluation and/or treatment facilities and the application of Company medical benefits for evaluation and treatment. No employee may suffer reprisals as a result of seeking help. If an employee feels he/she has suffered reprisals, he/she should report it to the Human Resources representative immediately and an appropriate investigation and action will take place. 5. Every employee will receive a copy of the Drug and Alcohol Testing Policy and will be required to sign an Acknowledgment Form, Attachment A, which will be kept in the employee’s personnel file. In addition, the Company shall post notices in

J-2

appropriate and conspicuous locations at each of its worksites that the Company has adopted a Drug and Alcohol Testing Policy and that copies of the Policy are available for inspection during regular business hours by its employees and job applicants in the Company’s Human Resources office. 6. An employee may be required to undergo drug and alcohol testing when at least two (2) supervisors (if feasible) have reasonable suspicion that the employee:

a) is under the influence of drugs or alcohol. Factors that may be considered in determining whether an employee is under the influence of drugs and alcohol include but are not limited to: evidence of repeated errors on the job, Company rule violation, and unsatisfactory time and attendance patterns, if coupled with specific facts and rational inferences drawn from those facts that indicate possible drug use; or

b) has violated the Company’s written Policy Statements (numbers 1, 2, or 3

above); or

c) has had a personal injury while working or has caused a personal injury to another person; or

d) has caused a work-related accident or was operating or helping to operate

machinery, equipment or vehicles in a work-related accident.

Post-accident or injury testing will be conducted as soon as practical following the accident, but not later than thirty-two (32) hours following the accident.

7. Drug and alcohol testing will be accomplished by the collection of hair, urine, and/or blood. The screening of hair, urine, and/or blood samples will be performed by qualified and certified testing laboratories. Testing is done for alcohol and the following drugs and drug classes:

Marijuana metabolites, cocaine metabolites, the opiates morphine and codeine, phencyclidine (PCP, angel dust), and amphetamines (amphetamine and methamphetamine), and/or all other drug classes as described in Schedules I through V of Minn. Stat. Section 152.02.

The detection levels of confirmatory tests shall be those established under Minnesota Rules.

J-3

8. Every employee has the right to refuse to undergo drug and alcohol testing. Employees who refuse to undergo testing are subject to disciplinary action up to and including termination.

9. Any employee who tests positive shall have the right to explain the positive test result of a confirmatory test or request and p ay for a confirmatory retest of the original specimen sample.

10. If a positive test result on a confirmatory test was the first such result for the employee on a drug or alcohol test by the Company, the employee will be immediately suspended without pay. The employee can be reinstated upon participation in either a drug or alcohol counseling or rehabilitation program, whichever is more appropriate as determined by the Company after consultation with a certified chemical use counselor or a physician trained in the diagnosis and treatment of chemical dependency. The cost for the evaluation will be paid by the Company. Costs for the recommended treatment will be the employee’s responsibility. Employees who refuse to participate in the counseling or rehabilitation program or fail to successfully complete the program, as evidenced by withdrawal from the program before its completion or by a positive test result on a confirmatory test after the completion of the program, may be subject to termination.

11. An employee who is referred by the Company for chemical dependency treatment or evaluation or is participating in a chemical dependency treatment program may be requested or required to undergo drug or alcohol testing without prior notice during the evaluation or treatment period and for up to one (1) year following completion of any prescribed chemical dependency treatment program. An employee testing positive during this period may be subject to termination.

12. A Medical Review Officer (M.R.O.) will review all test results. All positive test results shall be confirmed by a Gas Chromatography Mass Spectrometry analysis of the original specimen sample. The M.R.O. will review and interpret analytical (laboratory) results, validate the results scientifically, and determine if there is a legitimate medical explanation for a positive test result, and notify the Company of the results. The M.R.O. is a third party licensed physician with specialized knowledge of substance abuse.

13. The Company reserves the right to change or terminate this Policy and Procedures at any time, after prior notice and negotiation with the Union. Every employee will be given a copy of the amended policy if a change is made.

14. Test result reports and other information acquired in the drug and alcohol testing process are confidential information. Disclosure of the results to third parties may be done with the employee’s prior written consent. Notwithstanding the above, test results may be disclosed to any federal agency or other unit of the United

J-4

States government as required under federal law, regulation or order, or in accordance with compliance requirements of a federal government contract. The test results may also be disclosed to a substance abuse treatment facility for the purpose of evaluation or treatment of the employee, or may be disclosed to the Union or other necessary persons in connection with a potential or actual grievance or threatened or actual litigation. An employee has the right to request and receive from the Company, a copy of the test result report on any drug or alcohol test.

15. No employee may be required to undergo drug or alcohol testing without the

prior approval of the Director of Human Resources or the General Manager or his/her designee.

PROCEDURES:

1. When at least two (2) supervisors (if feasible) have reasonable suspicion to test an employee as stated in Policy Statement #6, the request must go to the applicable Human Resources representative or his/her designee to arrange for the collection and begin the required paperwork designating the need for hair, urine, and/or blood specimen.

2. Before a test is administered, the Company will ensure that the employee has completed a Drug and Alcohol Acknowledgment Form.

3. The employee will go to the collection site and provide a hair, urine, and/or blood specimen and appropriate identification. The collection site staff will begin the chain of custody paperwork and forward the specimen to the certified laboratory for testing. If an employee appears impaired and unable to safely go to the collection site on his/her own, the Company will arrange for transportation to the collection site and home following the collection procedure. Under no circumstances should an employee suspected of being impaired be allowed to drive. The employee will be reimbursed for any out-of-pocket expense incurred in taking the test, with proper documentation.

4. Test results will be reviewed to determine if there is evidence of the use of alcohol, drugs or controlled substances and forwarded to the M.R.O. If the specimen sample shows a positive result, the original sample will be kept for additional confirming tests.

5. The M.R.O. will communicate the results to the Company Human Resources representative.

6. The Human Resources representative and/or the employee’s supervisor will communicate the results of the test to the employee or job applicant, as the case may be, within three working days upon receipt of the results.

J-5

7. If an employee tests positive for drug use, the employee will be notified in

writing of his/her right to explain the positive test and the Company may request that the employee indicate any over-the-counter or prescription medication that the individual is currently taking or has recently taken and any other information relevant to the reliability of, or explanation for, a positive test result.

8. Within three (3) working days after notice of a positive test result on a confirmatory test, the employee may submit information to the Company, in addition to any information already submitted under paragraph 7, to explain that result, or may request a confirmatory re-test of the original sample at the employee's own expense.

9. The Human Resources representative will follow up on any recommended treatment and determine whether the employee has successfully completed the treatment.

Attachment A

DRUG AND ALCOHOL POLICY ACKNOWLEDGMENT FORM

I, the undersigned, certify that I have received and read a copy of the Company’s Policy regarding drug and alcohol abuse.

As part of my employment with the Company, I understand that my position is subject to drug and alcohol testing and that I may be requested to provide a hair, urine, and/or blood specimen for a drug or alcohol test.

I understand that I may refuse to take the drug and alcohol test and that such refusal may result in termination. Employee Social Security Number Date Witness

LETTER OF AGREEMENT

SUNSTONE HOTEL PROPERTIES, INC. and

UNITE HERE LOCAL 21

The Employer and the Union will evaluate a merger of the Employer’s Single Employer Defined Benefit Plan (referenced in Article 16) with the UNITE HERE Workers Defined Benefit Plan administered out of Rhode Island (the Plan former known as “Textile”). The evaluation will include full disclosure by both parties regarding Plan funding levels, assets, liabilities, and actuarial valuations. The parties will make all decisions regarding merger of the Plans in the best interest of all concerned parties. In the event of a deadlock, Article 18 shall be suspended until such time as the parties reach an agreement, unless the parties mutually agree on terms for interest arbitration to resolve the matter.