TASK DEFINITION: In this task, you're given a passage that represents a legal contract or clause between multiple parties, followed by a question that needs to be answered. Based on the paragraph, you must write unambiguous answers to the questions and your answer must refer a specific phrase from the paragraph. If multiple answers seem to exist, write the answer that is the most plausible.
PROBLEM: REDACTED COPY

CONFIDENTIAL TREATMENT REQUESTED

CONFIDENTIAL PORTIONS OF THIS

DOCUMENT HAVE BEEN REDACTED

AND HAVE BEEN SEPARATELY

FILED WITH THE COMMISSION

  1





ENDORSEMENT AGREEMENT

This Agreement is entered into on January 13, 2005 between professional golfer, TOM WATSON, (hereinafter referred to as CONSULTANT) and ADAMS GOLF, LTD. (hereinafter referred to as ADAMS GOLF).

WITNESSETH

WHEREAS, ADAMS GOLF desires to obtain the right to use the name, likeness and ENDORSEMENT of CONSULTANT in connection with the advertisement and promotion of ADAMS GOLF'S PRODUCT;

NOW THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

CONTRACT PERIOD

1.   TERM OF CONTRACT

The Term of this Agreement shall be for a period of [* ****] years and [*****] months commencing the 1st day of September 2004 and terminating the [*****] day of [*****].

2.   DEFINITIONS

As used in this Agreement, the following terms shall be defined as set forth below:

    A. CONSULTANT'S ENDORSEMENT means the right to use the CONSULTANT'S name, fame, nickname, autograph, voice, facsimile, signature, photograph, likeness, and image in connection with the marketing, advertising, promotion and sale of ADAMS GOLF'S PRODUCT.

B.PRODUCT shall mean all golf clubs including, but not limited to, metal woods,  drivers, fairway woods, irons, iron- woods, utility clubs, wedges, and putters, bags, and headwear.   C.MANDATORY PRODUCTS shall mean the following ADAMS GOLF PRODUCTS  that CONSULTANT must exclusively play/use in all Champions/Senior Professional Golf Association (SPGA) and Professional Golf Association (PGA) events at all times:

[***** ]  Confidential Material redacted and filed separately with the Commission.   2





  1.[*****] 2.Sufficient [*****] to maintain total minimum of [*****] ADAMS GOLF  [*****] (includes [*****])[*****] at all times 3.[*****] 4.[*****] (CONSULTANT may continue to place the [*****] logo on the [*****] consistent with historical practice.)

D. CONTRACT TERRITORY shall mean the entire world.

CONSULTANT'S OBLIGATIONS

3.   CONSULTANT'S ENDORSEMENT

CONSULTANT hereby gives and grants to ADAMS GOLF the exclusive right and license to use CONSULTANT'S ENDORSEMENT in connection with the manufacture, sale, distribution, advertising and promotion of PRODUCT in the CONTRACT TERRITORY.   4. EXCLUSIVITY OF ENDORSEMENT   During the term of this Agreement, unless otherwise authorized at the sole discretion of ADAMS GOLF in writing, CONSULTANT shall not:   A.give the right to use or permit the use of CONSULTANT'S name, facsimile signature, nickname, voice or likeness to any other manufacturer or seller of PRODUCT;

B.sponsor or endorse PRODUCT made or sold by any other manufacturer or seller; or

C.serve as a CONSULTANT or advisor of any other manufacturer or seller of PRODUCT.

D.Notwithstanding paragraphs 4A, 4B and 4C above, CONSULTANT shall be entitled to endorse and play the [*****]. The parties expressly  agree that CONSULTANT may  permit [*****] the use of CONSULTANT'S  name and/or likeness in [*****] print and/or television advertisement provided that this is executed in a manner consistent with [*****] past  [*****] advertising practice using similarly situated professional golfers  with competing golf club endorsement agreements that include [*****]. If  [*****] use of CONSULTANT  varies from past practice of utilizing similarly situated professionals, CONSULTANT will take action to remedy the situation [*****]. If CONSULTANT participates directly in any [*****] sponsored photo shoots for advertising or PR, CONSULTANT shall wear his ADAMS GOLF [*****]. The parties further expressly agree that CONSULTANT'S endorsement of the [*****] shall not include the right to place a [*****] logo on his ADAMS GOLF [*****] or the ADAMS GOLF  [*****]. If CONSULTANT'S relationship with [*****] terminates during this Agreement, CONSULTANT shall be permitted to replace the [*****] endorsement with another [*****] endorsement under the same terms and conditions expressed herein.

[***** ]  Confidential Material redacted and filed separately with the Commission.   3





  E.Notwithstanding  paragraphs 4A, 4B and 4C above, CONSULTANT  shall not be required to wear ADAMS  GOLF [*****] in [*****] ads.

5.   EXCLUSIVE USE OF PRODUCT

During the term of this Agreement, CONSULTANT shall exclusively play/use the MANDATORY PRODUCT. (It is expressly understood by the parties that CONSULTANT may play [* ****] clubs in the bag other than ADAMS GOLF clubs including, but not limited to, a putter by a manufacturer other than ADAMS GOLF but may not endorse those clubs and/or putter.)

6.    CONSULTANT'S ENDORSEMENT OF NON-COMPETITIVE PRODUCT

If CONSULTANT endorses or promotes a non-competitive product and in that endorsement or promotion CONSULTANT wears, plays, uses, holds or is in any way associated with a product that would constitute PRODUCT as defined under this Agreement, CONSULTANT shall use objectively reasonable best efforts to ensure that PRODUCT is an ADAMS GOLF PRODUCT and it shall not be altered or changed in appearance in the endorsement in any manner whatsoever without the express written consent of ADAMS GOLF. When endorsing a non-competitive product, under no circumstances shall CONSULTANT wear, play, use, hold or in any way be associated with an ADAMS GOLF competitor's Product.

7.   CONSULTANT'S SATISFACTION OF MANDATORY PRODUCT

It is particularly and expressly understood and agreed that if CONSULTANT shall find in his sincere best reasonable judgment that the MANDATORY PRODUCT so supplied is not suitable for his use in tournament competition, then he shall promptly notify ADAMS GOLF in writing of such fact and the reasons therefor. Thereafter, ADAMS GOLF shall have a period of thirty (30) days to either, at ADAMS GOLF'S sole discretion, supply CONSULTANT with MANDATORY PRODUCT that is acceptable to him or terminate the agreement. It is agreed that if the contract is terminated pursuant to this paragraph, the compensation due CONSULTANT shall be prorated from the date this Agreement is terminated. Proration of compensation shall be determined on the same repayment schedule as provide in paragraph 8A below.

[***** ]  Confidential Material redacted and filed separately with the Commission.   4





  8. MINIMUM NUMBER OF TOURNAMENTS AND POTENTIAL REPAYMENT OF BASE COMPENSATION

    A.  In each and every calendar year of this Agreement, CONSULTANT shall achieve a satisfactory record of play in a minimum of [* ****] professional golf association events on the SPGA and/or PGA tour (which shall include both the PGA and SPGA Tour Skins Games). If for any reason, CONSULTANT should achieve a satisfactory record of play in less than [*****] SPGA and/or PGA tour events in a calendar year, he shall repay ADAMS GOLF an amount per event for each event under [*****] achieved in the given calendar year as follows:

The agreed upon repayment amount per event per calendar year:

1.  Year 1. $[*****] 2.  Year 2 $[*****] 3.  Year 3 $[*****] 4.  Year 4 $[*****] 5.  Year 5 $[*****]

B.Payment shall be made to ADAMS GOLF within one month following the end of the calendar year. For example, if in the calendar year 2005 CONSULTANT  achieves a satisfactory record of play in [*****] events, he shall repay ADAMS GOLF [*****] dollars no later than January 31, 2006.

C.In the event that CONSULTANT is prevented from competing for reasons outside his control, the parties  agree to a good faith attempt to resolve the issues. If a resolution can not be reached, ADAMS GOLF may, at its sole discretion, demand prorated repayment pursuant to the repayment schedule in paragraph 8A above.

9.     PRODUCT DESIGN   During the term of this Agreement, CONSULTANT shall use best efforts to cooperate with ADAMS GOLF in giving advice, suggestions and recommendations concerning the acceptability and playability of current ADAMS GOLF lines, the development of new ADAMS GOLF lines, and information about significant golf PRODUCT and golf market trends, and meet as reasonably requested with ADAMS GOLF'S Design/Testing Teams.   10.    PROMOTION OF PRODUCT

     During the term of this Agreement, CONSULTANT shall use best efforts to wear the headwear and display ADAMS GOLF'S brand name and to demonstrate, discuss and emphasize the newest features of ADAMS GOLF PRODUCT at every opportunity including but not limited to all Senior PGA tour events and promotional and advertising events in which CONSULTANT takes part.

[***** ]  Confidential Material redacted and filed separately with the Commission.   5





  11.    PROMOTIONAL APPEARANCES

A.During the term of this Agreement, CONSULTANT shall use best efforts to be available for such press interviews, radio or TV appearances arranged for CONSULTANT by ADAMS GOLF which are compatible with CONSULTANT'S own practice, play and personal time requirements. CONSULTANT will be required to be available after a tournament for selected interviews, either the Sunday afternoon or Monday morning following the tournament. In all such interviews and appearances, CONSULTANT will use his best efforts to make reference to the ADAMS GOLF PRODUCT and wear [*****] and display ADAMS GOLF'S brand name.

B.During  the term of this Agreement, CONSULTANT  shall make himself available on not more than [*****]  days for television and radio commercials, photo shoots, modeling and  promotional appearances compatible with CONSULTANT'S  own practice, play and personal time requirements. Said activities shall  be directly related to the promotion of ADAMS GOLF PRODUCT. ADAMS GOLF  shall  reimburse CONSULTANT  for reasonable travel expenses for CONSULTANT when making special appearances for ADAMS GOLF pursuant to this paragraph but ADAMS GOLF shall not pay CONSULTANT session fees, residual payments or the like for television appearances. Travel expenses shall include jet fuel or first-class round-trip airfare and lodging, meals and local transportation.

12.   BEHAVIOR

During the term of this Agreement, CONSULTANT will conduct himself at all times with due regard to public morals and conventions. If the value of CONSULTANT'S ENDORSEMENT is materially reduced or impaired because CONSULTANT:

A.committed or shall commit any public act that involves moral turpitude, B.commits or violates any material foreign, U.S., federal, or other applicable state or local law, C.commits any act which brings him into public disrepute, contempt, scandal or  ridicule, or which insults or offends the community, D.makes any statements in derogation, in any material respect, of ADAMS GOLF or any of its affiliates or any of their respective PRODUCT or  services and such statement is made to the general public or becomes a matter of public knowledge,

then at any time after the occurrence of such act, thing or statement, ADAMS GOLF shall have the right, in addition to its other legal and equitable remedies, to immediately terminate this Agreement, by giving written notice to CONSULTANT. ADAMS GOLF must exercise its right of termination within ninety (90) days of its senior management becoming aware of the conduct giving rise to the right of termination.

[***** ]  Confidential Material redacted and filed separately with the Commission.   6





  13.  FREEDOM TO CONTRACT

CONSULTANT represents and warrants that CONSULTANT is free of all prior undertakings and obligations which would prevent or tend to impair either the full performance of CONSULTANT'S obligations hereunder or ADAMS GOLF'S full enjoyment of the rights and privileges granted to it by CONSULTANT.

14. INDEMNITY

CONSULTANT agrees to protect, indemnify and hold ADAMS GOLF harmless from any and all liability, claims, causes of action, suits, damages and expenses (including reasonable attorneys' fees and expenses) for which it becomes liable or is compelled to pay by reason of a breach of any covenant or representation by CONSULTANT in this Agreement.

15.  ABSENCE OF AGENCY

CONSULTANT shall not and will not have the right or authority to bind ADAMS GOLF by any representation or in any other respect whatsoever or to incur any obligation or liability in the name of or on behalf of ADAMS GOLF.

16. MEMBERSHIPS

CONSULTANT warrants and represents that during the term of this Agreement he is a member in good standing of SAG, AFTRA or any other organization having jurisdiction over CONSULTANT'S services hereunder. This Agreement is subject to all of the terms and conditions of the collective bargaining agreements with SAG, AFTRA, or any other union agreements or codes having jurisdiction over CONSULTANT'S services hereunder. Any and all payments required to be made to SAG or AFTRA or any other organization having jurisdiction over CONSULTANT'S services hereunder, shall be the sole responsibility of CONSULTANT.

ADAMS GOLF'S OBLIGATIONS

17.   SUPPLY OF PRODUCT

A. During the term of this Agreement, ADAMS GOLF shall provide CONSULTANT  with sufficient quantities of such MANDATORY  PRODUCTS  for CONSULTANT'S  use as CONSULTANT  may reasonably need to fulfill his obligations under this agreement.  ADAMS  GOLF  shall pay all charges in connection with the delivery of MANDATORY PRODUCTS to CONSULTANT.

B.In  addition to paragraph 17A above, ADAMS GOLF  shall provide CONSULTANT  with [*****] sets of clubs for CONSULTANT'S family and friends each calendar year of this Agreement.

[***** ]  Confidential Material redacted and filed separately with the Commission.   7





  18.  BASE COMPENSATION

For the entire term of this Agreement, from September 1, 2004 through [*****] ADAMS GOLF shall pay CONSULTANT a base compensation of [*****] dollars. The base compensation shall be paid [*****].

19.   PERFORMANCE BONUSES AND TOTAL COMPENSATION LIMITATION

  A. In addition to his base compensation, CONSULTANT shall also be entitled to bonuses based on performance in particular PGA and SPGA events and year-end standing as follows:

  1. If CONSULTANT wins a PGA Tour Major (consisting of the Masters, US Open, PGA and British Open) or the Champion's Tour (SPGA) US Open, CONSULTANT shall receive a bonus of $ [*****].

  2. If CONSULTANT wins a Champions/Seniors Tour (SPGA) major other than the US Open (which shall for the purposes of this agreement consist of the Senior PGA, Senior British, the Tradition and the Ford Seniors) CONSULTANT shall receive a bonus of $ [*****].

3. If CONSULTANT finishes in the top [*****] on the official year end money list of the Champion's Tour (SPGA), CONSULTANT shall also be entitled to a year end performance bonus according to the following schedule:

a.2005 $ [*****] b.2006$ [*****] c.2007$ [*****] d.2008$ [*****] e.2009$ [*****]

B.Notwithstanding  paragraph A and its subparts above, the maximum total annual bonuses shall  in no case exceed the following schedule:

1.2005 $ [*****] 2.2006$ [*****] 3.2007$ [*****] 4.2008$ [*****] 5.2009$ [*****]

(For example, if in the calendar year [*****]CONSULTANT wins every PGA tour major and finishes in the top [*****] on the official year end money list of the Champion's Tour (SPGA), CONSULTANT'S total bonuses shall be [*****] dollars.

[***** ]  Confidential Material redacted and filed separately with the Commission.   8





      C.  In the event of ADAMS GOLF'S insolvency or bankruptcy, it is expressly agreed to by the parties that CONSULTANT shall not be obligated to repay any money so long as CONSULTANT continues to fully perform his obligations under this Agreement.   20.  APPROVAL OF ADVERTISING

Prior to publishing or placing any advertising or promotional material which uses CONSULTANT'S name, facsimile signature, nickname, voice or likeness, ADAMS GOLF shall submit the same to CONSULTANT, or CONSULTANT'S designee, for approval, which approval shall not be unreasonably withheld or delayed. If CONSULTANT disapproves, the reasons therefore shall be given to ADAMS GOLF in writing within three (3) business days or shall be deemed approved. ADAMS GOLF agrees to protect, indemnify and hold CONSULTANT harmless from and against any and all expenses, damages, claims, suits, actions, judgments and costs whatsoever, arising out of, or in any way connected with, any advertising material furnished by, or on behalf of, the company.

21.  INDEMNITY

  ADAMS GOLF agrees to defend, indemnify and hold harmless CONSULTANT from any and all liability, claims, causes of action, suits, damages and expenses (including reasonable attorneys' fees and expenses) for which he becomes liable or is compelled to pay by reason of or arising out of any claim or action for personal injury, death or otherwise involving alleged defects in ADAMS GOLF'S PRODUCT, provided that ADAMS GOLF is promptly given notice in writing and is given complete authority and information required for the defense, and ADAMS GOLF shall pay all damages or costs awarded therein against CONSULTANT and any other cost incurred by CONSULTANT in defense of any suit, but shall not be responsible for any cost, expense or compromise incurred or made by CONSULTANT without ADAMS GOLF'S prior written consent.

TERMINATION

22.  FAILURE TO PLAY

Notwithstanding any other paragraph of this Agreement, in the event that CONSULTANT dies or is unable to play tour golf at all, ADAMS GOLF may terminate this Agreement on thirty (30) days' written notice. Upon such termination, CONSULTANT and/or CONSULTANT'S estate shall be required to repay ADAMS GOLF for that period of the Agreement not performed by CONSULTANT. The repayment amount shall be calculated in the same way as repayment is calculated under paragraph 8A.   9





  23.  TERMINATION FOR CAUSE

Notwithstanding any other paragraph of this Agreement, if either party commits any material breach of this Agreement, the other party may terminate for cause upon giving fifteen (15) days written notice of such cause and provided the breach is not rectified within such fifteen (15) day period. Upon such termination, CONSULTANT shall be required to repay ADAMS GOLF for that period of the Agreement not performed by CONSULTANT. The repayment amount shall be calculated in the same way as repayment is calculated under paragraph 8A.

24.  ADAMS GOLF'S RIGHTS UPON TERMINATION

A.In  the event of termination of this Agreement,  ADAMS  GOLF  shall cease using the name and/or likeness of CONSULTANT in advertising within [*****] days.

B.In  the event of termination of this Agreement,  ADAMS  GOLF  shall cease using the name and/or likeness of CONSULTANT on Product within [*****] months after termination of this Agreement.

MISCELLANEOUS PROVISIONS

24. SIGNIFICANCE OF HEADINGS

Section headings contained herein are solely for the purpose of aiding in speedy location of subject matter and are not in any sense to be given weight in the construction of this Agreement. Accordingly, in case of any question with respect to the construction of this Agreement, it is to be construed as though such section headings had been omitted.

25. APPLICABLE LAW

This Agreement shall be governed and construed according to the laws of the State of Kansas.

26. ENTIRE AGREEMENT

The provisions of this Agreement are intended by the parties as a complete, conclusive and final expression of their agreement concerning the subject matter hereof, which Agreement supersedes all prior agreements concerning the subject matter, and no other statement, representation, agreement or understanding, oral or written, made prior to or at the execution hereof, shall vary or modify the written terms hereof. No amendments, modifications or releases from any provision hereof shall be effective unless in writing and signed by both parties.

27. WAIVER

Unless otherwise mutually agreed in writing, no departure from, waiver of, or omission to require compliance with any of the terms hereof by either party shall be deemed to authorize any prior or subsequent departure or waiver, or obligate either party to continue any departure or waiver.

[***** ]  Confidential Material redacted and filed separately with the Commission.   10





  28. EXECUTION AND DELIVERY REQUIRED

This instrument shall not be considered to be an agreement or contract nor shall it create any obligation whatsoever on the part of CONSULTANT or ADAMS GOLF unless and until it has been signed by CONSULTANT, or a duly authorized representative, and by duly authorized representatives of ADAMS GOLF and delivery has been made of a fully signed original to both parties.

29. SEVERABILITY

Any provision or part of this Agreement prohibited by applicable law shall be ineffective to the extent of such prohibition without invalidating the remaining provisions or parts hereof.

30. RELATIONSHIP

Both parties agree that this Agreement does not constitute and shall not be construed as a constituting of a partnership or joint venture between ADAMS GOLF and CONSULTANT. Neither party shall have any right to obligate or bind the other party in any manner whatsoever, and nothing herein contained shall give or is intended to give any rights of any kind to any third person.

31. ASSIGNMENT AND CHANGE OF CONTROL

Neither ADAMS GOLF nor CONSULTANT shall have the right to grant sublicenses hereunder or to assign, alienate or otherwise transfer any of its rights or obligations hereunder.

32. CONFIDENTIALITY

Both parties understand that the contents of this Agreement, including, but not limited to, all amounts paid or to be paid and any additional consideration, are extremely confidential, and that disclosure of same to any third party could be detrimental to the interests of one or both parties. Therefore, both parties agree not to disclose the terms of this Agreement, without the permission of the other party, to any third party other than to CONSULTANT'S business, legal and financial advisors, and with respect to all such advisors, CONSULTANT shall take all reasonable steps to ensure such confidentiality to ADAMS GOLF. Furthermore, CONSULTANT recognizes that during the course of performing his duties hereunder he may become aware of proprietary, confidential information concerning ADAMS GOLF, its PRODUCT, methods, processes, billing practices, financial condition, etc., or information ADAMS GOLF designates as confidential (collectively Confidential Information). CONSULTANT agrees that he will maintain in confidence and not disclose to any third party at any time any such Confidential Information and shall not use any such information to the detriment of ADAMS GOLF or for any purpose not contemplated by the Agreement.     11





  33.  ARBITRATION

In the event a dispute arises under this Agreement which cannot be resolved, such dispute shall be submitted to arbitration and resolved by a panel of three arbitrators (who shall be lawyers), in a decision required by a majority of the arbitrators. If the parties cannot agree upon the panel of three arbitrators, then each party may pick an arbitrator and the two chosen arbitrators shall choose upon the three-arbitrator panel. The arbitration shall be conducted in accordance with the Arbitration Rules of the American Arbitration Association. Venue shall be Kansas. The award or decision rendered by the arbitration panel shall be final, binding and conclusive and judgment may be entered upon such award by any court of competent jurisdiction.

34. NOTICE

Every written notice or written report which may be served upon CONSULTANT, according to the terms of this Agreement, may be served by enclosing it in a postpaid envelope addressed to:

Mr. Tom Watson C/O Assured Management Company 1901 W. 47th Place, Suite 200 Westwood, Kansas 66205

or at such other address as is given in writing to ADAMS GOLF by CONSULTANT.

Every written notice which may be served upon ADAMS GOLF, according to the terms of this Agreement, shall be served by enclosing it in a postpaid envelope addressed to:

Attention Legal Department ADAMS GOLF, LTD. 2801 East Plano Parkway Plano, Texas 75074

or at such other address as is given in writing by ADAMS GOLF to CONSULTANT.

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  IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first set forth above.

    APPROVED FOR CONSULTANT                       By: /s/ Tom Watson     Date: January 13, 2005

Tom Watson



    APPROVED FOR ADAMS GOLF, LTD.                       By: /s/ Oliver G. Chip Brewer III     Date: January 13, 2005

Oliver G. (Chip) Brewer III

  CEO, ADAMS GOLF

    13 
Question: Highlight the parts (if any) of this contract related to License Grant that should be reviewed by a lawyer. Details: Does the contract contain a license granted by one party to its counterparty?

SOLUTION: CONSULTANT hereby gives and grants to ADAMS GOLF the exclusive right and license to use CONSULTANT'S ENDORSEMENT in connection with the manufacture, sale, distribution, advertising and promotion of PRODUCT in the CONTRACT TERRITORY.

PROBLEM: FRANCHISE AGREEMENT   HOMEWOOD SUITES BY HILTON STRATFORD   (Stratford, Connecticut)









  TABLE OF CONTENTS   1.0 DEFINITIONS 1       2.0 GRANT OF LICENSE 6           2.1 Non-Exclusive License 6   2.2 Reserved Rights 7         3.0 TERM 7       4.0 OUR RESPONSIBILITIES 7           4.1 Training 7   4.2 Reservation Service 7   4.3 Consultation 7   4.4 Marketing 7   4.5 Inspections/Compliance Assistance 8   4.6 Manual 8   4.7 Equipment and Supplies 9         5.0 YOUR RESPONSIBILITIES 9           5.1 Operational and Other Requirements 9         6.0 HOTEL WORK 11           6.1 Necessary Consents 11   6.2 Initial Hotel Work 12   6.3 Commencement and Completion of the Hotel Work 12   6.4 Opening the Hotel Under This Agreement 12   6.5 Performance of Agreement 13   6.6 Hotel Refurbishment and Room Addition 13         7.0 STAFF AND MANAGEMENT OF THE HOTEL 14       8.0 PAYMENT OF FEES 14           8.1 Monthly Fees 14   8.2 Calculation and Payment of Fees 14   8.3 Other Fees 15   8.4 Taxes 15   8.5 Application of Fees 15         9.0 PROPRIETARY RIGHTS 15           9.1 Our Proprietary Rights 15   9.2 Trade Name, Use of the Marks 15   9.3 Use of Trade Name and Marks 16   9.4 Trademark Disputes 16   9.5 Web Sites 16   9.6 Covenant 17         10.0 REPORTS, RECORDS, AUDITS, AND PRIVACY 17           10.1 Reports 17   10.2 Maintenance of Records 17   10.3 Audit 17   10.4 Ownership of Information 18   10.5 Privacy and Data Protection 18

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  11.0 CONDEMNATION AND CASUALTY 18         11.1 Condemnation 18   11.2 Casualty 18   11.3 No Extensions of Term 19         12.0 NOTICE OF INTENT TO MARKET 19       13.0 TRANSFERS 19           13.1 Our Transfer 19   13.2 Your Transfer 19         14.0 TERMINATION 22           14.1 Termination with Opportunity to Cure 22   14.2 Immediate Termination by Us 22   14.3 Suspension Interim Remedies 23   14.4 Liquidated Damages on Termination 24   14.5 Actual Damages Under Special Circumstances 24   14.6 Your Obligations on Termination or Expiration 24         15.0 INDEMNITY 25       16.0 RELATIONSHIP OF THE PARTIES 26           16.1 No Agency Relationship 26   16.2 Notices to Public Concerning Your Independent Status 26         17.0 MISCELLANEOUS 26           17.1 Severability and Interpretation 26   17.2 Governing Law, Jurisdiction and Venue 27   17.3 Exclusive Benefit 27   17.4 Entire Agreement 27   17.5 Amendment and Waiver 27   17.6 Consent; Business Judgment 27   17.7 Notices 28   17.8 General Release 28   17.9 Remedies Cumulative 28   17.10 Economic Conditions Not a Defense 28   17.11 Representations and Warranties 28   17.12 Counterparts 29   17.13 Sanctioned Persons and Anti-bribery Representations and Warranties 29   17.14 Attorneys' Fees and Costs 30   17.15 Interest 30   17.16 Successors and Assigns 30   17.17 Our Delegation of Rights and Responsibility 30         18.0 WAIVER OF JURY TRIAL AND PUNITIVE DAMAGES 30         19.0 INTENTIONALLY DELETED 31         ADDENDUM TO FRANCHISE AGREEMENT       NEW YORK ADDENDUM TO FRANCHISE AGREEMENT       EXHIBIT A PRODUCT IMPROVEMENT PLAN

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  FRANCHISE AGREEMENT   This Franchise Agreement between Homewood Suites Franchise LLC (we, us, our or Franchisor) and the Franchisee (you, your or Franchisee) set forth in the Addendum attached to this Agreement, is dated as of the Effective Date. We and you may collectively be referred to as the Parties.   INTRODUCTION   We are a subsidiary of Hilton Worldwide. Hilton Worldwide and its Affiliates own, license, lease, operate, manage and provide various services for the Network. We are authorized to grant licenses for selected, first-class, independently owned or leased hotel properties, to operate under the Brand. You have expressed a desire to enter into this Agreement with us to obtain a license to use the Brand in the operation of a hotel at the address or location described in the Addendum.   NOW, THEREFORE, in consideration of the premises and the undertakings and commitments of each party to the other party in this Agreement, the Parties agree as follows:   1.0 DEFINITIONS   The following capitalized terms will have the meanings set forth after each term:   Affiliate means any natural person or firm, corporation, partnership, limited liability company, association, trust or other entity which, directly or indirectly, controls, is controlled by, or is under common Control with, the subject entity.   Agreement means this Franchise Agreement, including any exhibits, attachments and addenda.   Anti-Corruption Laws means all applicable anti-corruption, anti-bribery, anti-money laundering, books and records, and internal controls laws of the United States and the United Kingdom, including the United States Foreign Corrupt Practices Act and the United Kingdom Bribery Act of 2010.   Brand means the brand name set forth in the Addendum.   Change of Ownership Application means the application that is submitted to us by you or the Transferee for a new franchise agreement in connection with a Change of Ownership Transfer.   Change of Ownership Transfer means any proposed Transfer that results in a change of Control of Franchisee, the Hotel, or the Hotel Site and is not otherwise permitted by this Agreement, all as set out in Subsection 13.2.3.   Competing Brand means a hotel brand or trade name that, in our sole business judgment, competes with the System, or any System Hotel or Network Hotel.   Competitor means any individual or entity that, at any time during the Term, whether directly or through an Affiliate, owns in whole or in part, or is the licensor or franchisor of a Competing Brand, irrespective of the number of hotels owned, licensed or franchised under such Competing Brand name. A Competitor does not include an individual or entity that: (i) is a franchisee of a Competing Brand; (ii) manages a Competing Brand hotel, so long as the individual or entity is not the exclusive manager of the Competing Brand; or (iii) owns a minority interest in a Competing Brand, so long as neither that individual or entity nor any of its Affiliates is an officer, director, or employee of the Competing Brand, provides services (including as a consultant) to the Competing Brand, or exercises, or has the right to exercise, Control over the business decisions of the Competing Brand.

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  Construction Commencement Date means the date set out in the Addendum, if applicable, by which you must commence construction of the Hotel. For the Hotel to be considered under construction, you must have begun to pour concrete foundations for the Hotel or otherwise satisfied any site-specific criteria for under construction set out in the Addendum.   Construction Work means all necessary action for the development, construction, renovation, furnishing, equipping, acquisition of supplies and implementation of the Plans and Designs for the Hotel.   Construction Work Completion Date means the date set out in the Addendum, if applicable, by which you must complete construction of the Hotel.   Control means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity, or of the power to veto major policy decisions of an entity, whether through the ownership of voting securities, by contract, or otherwise.   Controlling Affiliate means an Affiliate that directly or indirectly Controls the Hotel and/or Controls the entity that Controls the Hotel.   Designs means your plans, layouts, specifications, drawings and designs for the proposed furnishings, fixtures, equipment, signs and decor of the Hotel that use and incorporate the Standards.   Effective Date means the date set out in the Addendum on which this Agreement becomes effective. Entities means our present or future Affiliates and direct or indirect owners.   Equity Interest means any direct or indirect legal or beneficial interest in the Franchisee, the Hotel and/or the Hotel Site.   Equity Owner means the direct or indirect owner of an Equity Interest, Expiration Date has the meaning set forth in Section 3.   Force Majeure means an event causing a delay in our or your performance that is not the fault of or within the reasonable control of the party claiming Force Majeure. Force Majeure includes fire, floods, natural disasters, Acts of God, war, civil commotion, terrorist acts, any governmental act or regulation beyond such party's reasonable control. Force Majeure does not include the Franchisee's financial inability to perform, inability to obtain financing, inability to obtain permits or any other similar events unique to the Franchisee or the Hotel or to general economic downturn or conditions.   General Manager has the meaning set forth in Subsection 7.1.   Government or Government Entity means: (i) any agency, instrumentality, subdivision or other body of any national, regional, local or other government; (ii) any commercial or similar entities owned or controlled by such government, including any state-owned and state-operated companies; (iii) any political party; and (iv) any public international organization.   Government Official means the following: (i) officers and employees of any national, regional, local or other Government; (ii) officers and employees of companies in which a Government owns an interest; (iii) any private person acting in an official capacity for or on behalf of any Government or Governmental Entity (such as a consultant retained by a government agency); (iv) candidates for political office at any level; (v) political parties and their officials; (vi) officers, employees, or official representatives of public (quasi-governmental) international organizations (such as the United Nations, World Bank, or International Monetary Fund).   Gross Receipts Tax means any gross receipts, sales, use, excise, value added or any similar tax.

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  Gross Rooms Revenue means all revenues derived from the sale or rental of Guest Rooms (both transient and permanent) of the Hotel, including revenue derived from the redemption of points or rewards under the loyalty programs in which the Hotel participates, amounts attributable to breakfast (where the guest room rate includes breakfast), and guaranteed no-show revenue and credit transactions, whether or not collected, at the actual rates charged, less allowances for any Guest Room rebates and overcharges, and will not include taxes collected directly from patrons or guests. Group booking rebates, if any, paid by you or on your behalf to third-party groups for group stays must be included in, and not deducted from, the calculation of Gross Rooms Revenue.   Guarantor means the person or entity that guaranties your obligations under this Agreement or any of Your Agreements.   Guest Rooms means each rentable unit in the Hotel generally used for overnight guest accommodations, the entrance to which is controlled by the same key, provided that adjacent rooms with connecting doors that can be locked and rented as separate units are considered separate Guest Rooms. The initial number of approved Guest Rooms is set forth in the Addendum.   Hilton Worldwide means Hilton Worldwide Holdings, Inc., a Delaware corporation.   Hotel means the property you will operate under this Agreement and includes all structures, facilities, appurtenances, furniture, fixtures, equipment, and entry, exit, parking and other areas located on the Hotel Site we have approved for your business or located on any land we approve in the future for additions, signs, parking or other facilities.   Hotel Site means the real property on which the Hotel is located or to be located, as approved by us. Hotel Work means Construction Work and/or Renovation Work, as the case may be.   Improper Payment means: (a) any payment, offer, gift or promise to pay or authorization of the payment or transfer of other things of value, including without limitation any portion of the compensation, fees or reimbursements received hereunder or the provision of any service, gift or entertainment, .directly or indirectly to (i) a Government Official; (ii) any director, officer, employee or commercial partner of a Party or its Affiliates; or, (iii) any other person at the suggestion, request or direction or for the benefit of any of the above-described persons and entities, for purposes of obtaining or influencing official actions or decisions or securing any improper advantage in order to obtain, retain or direct business; (b) payments made and expenses incurred in connection with performance of obligations under this Agreement that are not made and recorded with sufficient accuracy, detail, and control to meet the standards in applicable Anti-Corruption Laws; or, (c) any other transaction in violation of applicable Anti-Corruption Laws.   Indemnified Parties means us and the Entities and our and their respective predecessors, successors and assigns, and the members, officers, directors, employees, managers, and agents.   Information means all information we obtain from you or about the Hotel or its guests or prospective guests under this Agreement or under any agreement ancillary to this Agreement, including agreements relating to the computerized reservation, revenue management, property management, and other systems we provide or require, or otherwise related to the Hotel. Information includes, but is not limited to, Operational Information, Proprietary Information, and Personal Information.   Interim Remedy has the meaning set forth in Subsection 14.3.   Laws means all public laws, statutes, ordinances, orders, rules, regulations, permits, licenses, certificates, authorizations, directions and requirements of all Governments and Governmental Entities having jurisdiction over the Hotel, Hotel Site or over Franchisee to operate the Hotel, which, now or hereafter, may apply to the construction, renovation, completion, equipping, opening and operation of the Hotel, including Title ill of the Americans with Disabilities Act, 42 U.S.C. § 12181, et seq., and 28 C.F.R. Part 36.

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  License has the meaning set forth in Subsection 2.1.   Liquidated Damages has the meaning set forth in Subsections 6.4.4 and 14.4.   Management Company has the meaning set forth in Subsection 7.1.   Manual means all written compilations of the Standards. The Manual may take the form of one or more of the following: one or more looseleaf or bound volumes; bulletins; notices; videos; CD-ROMS and/or other electronic media; online postings; e-mail and/or electronic communications; facsimiles; or any other medium capable of conveying the Manual's contents.   Marks means the Brand and all other service marks, copyrights, trademarks, trade dress, logos, insignia, emblems, symbols and designs (whether registered or unregistered), slogans, distinguishing characteristics, and trade names used in the System.   Monthly Fees means, collectively, the Monthly Program Fee and the Monthly Royalty Fee, each of which is set forth in the Addendum.   Monthly Program Fee means the fee we require from you in Subsection 8.1, which is set forth in the Addendum.   Monthly Royalty Fee means the fee we require from you in Subsection 8.1, which is set forth in the Addendum.   Network means the hotels, inns, conference centers, timeshare properties and other operations that Hilton Worldwide and its subsidiaries own, license, lease, operate or manage now or in the future.   Network Hotel means any hotel, inn, conference center, timeshare property or other similar facility within the Network.   Opening Date means the day on which we first authorize the opening of the facilities, Guest Rooms or services of the Hotel to the general public under the Brand.   Operational Information means all information concerning the Monthly Fees, other revenues generated at the Hotel, room occupancy rates, reservation data and other financial and non-financial information we require.   Other Business(es) means any business activity we or the Entities engage in, other than the licensing of the Hotel.   Other Hotels means any hotel, inn, lodging facility, conference center or other similar business, other than a System Hotel or a Network Hotel.   Permitted Transfer means any Transfer by you or your Equity Owners as specified in Section 13.2 of this Agreement.   Person(s) means a natural person or entity.   Personal Information means any information that: (i) can be used (alone or when used in combination with other information within your control) to identify, locate or contact an individual; or (ii) pertains in any way to an identified or identifiable individual. Personal Information can be in any media or format, including computerized or electronic records as well as paper-based files.

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  PIP means product improvement plan.   PIP Fee means the fee we charge for creating a PIP as specified in Section 8.3.   Plans means your plans, layouts, specifications, and drawings for the Hotel that use and incorporate the Standards.   Principal Mark is the Mark identified as the Principal Mark in the Addendum.   Privacy Laws means any international, national, federal, provincial, state, or local law, code, rule or regulation that regulates the processing of Personal Information in any way, including data protection laws, laws regulating marketing communications and/or electronic communications, information security regulations and security breach notification rules.   Proprietary Information means all information or materials concerning the methods, techniques, plans, specifications, procedures, data, systems and knowledge of and experience in the development, operation, marketing and licensing of the System, including the Standards and the Manuals, whether developed by us, you, or a third party.   Publicly Traded Equity Interest means any Equity Interest that is traded on any securities exchange or is quoted in any publication or electronic reporting service maintained by the National Association of Securities Dealers, Inc., or any of its successors or (ii) any Equity Interests sold in any offering under the Securities Act of 1933, as amended, so long as such Equity Interests are beneficially held by no lesi than one hundred (100) unrelated persons or entities by the end of 2014 and thereafter.   Quality Assurance Re-Evaluation Fee has the meaning set forth in Subsection 4.5.   Renovation Commencement Date means the date set out in the Addendum, if applicable, by which you must commence Renovation Work.   Renovation Work means the renovation and/or construction work, including purchasing and/or leasing and installation of all fixtures, equipment, furnishings, furniture, signs, computer terminals and related equipment, supplies and other items that would be required of a new System Hotel under the Manual, and any other equipment, furnishings and supplies that we may require for you to operate the Hotel as set out in any PIP applicable to the Hotel.   Renovation Work Completion Date means the date set out in the Addendum, if applicable, by which you must complete Renovation Work.   Reports mean daily, monthly, quarterly and annual operating statements, profit and loss statements, balance sheets, and other financial and non- financial reports we require.   Reservation Service means the reservation service we designate in the Standards for use by System Hotels.   Room Addition Fee means a sum equal to the then-current Room Addition Fee charged for new System Hotels multiplied by the number of Additional Guest Rooms you wish to add to the Hotel in accordance with Subsection 6.6.3.

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  Sanctioned Person means any person or entity (including financial institutions) who is, or is owned or controlled by, or acting on behalf of any of the foregoing: (a) the Government of any country subject to comprehensive U.S. sanctions in force and which currently include the Government of Cuba, Iran, North Korea, Sudan, and Syria (Sanctioned Countries); (b) located in, organized under the laws of or ordinarily resident in Sanctioned Countries; (c) identified by any government or legal authority under applicable Trade Restrictions as a person with whom dealings and transactions by Franchisee and/or its Affiliates are prohibited or restricted, including but not limited to persons designated under United Nations Security Council Resolutions, the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) List of Specially Designated Nationals and Other Blocked Persons; the U.S. Department of State's lists of persons subject to non-proliferation sanctions; the European Union Financial Sanctions List; persons and entities subject to Special Measures regulations under Section 311 of the USA PATRIOT Act and the Bank Secrecy Act.   Securities means any public offering, private placement or other sale of securities in the Franchisee, the Hotel or the Hotel Site.   Site means domain names, the World Wide Web, the Internet, computer network/distribution systems, or other electronic communications sites.   Standards means all standards, specifications, requirements, criteria, and policies that have been and are in the future developed and compiled by us for use by you in connection with the design, construction, renovation, refurbishment, appearance, equipping, furnishing, supplying, opening, operating, maintaining, marketing, services, service levels, quality, and quality assurance of System Hotels, including the Hotel, and for hotel advertising and accounting, whether contained in the Manual or set out in this Agreement or other written communication.   System means the elements, including know-how, that we designate to distinguish hotels operating worldwide under the Brand (as may in certain jurisdictions be preceded or followed by a supplementary identifier such as by Hilton) that provide to the consuming public a similar, distinctive, high-quality hotel service. The System currently includes: the Brand, the Marks, the Trade Name, and the Standards; access to a reservation service; advertising, publicity and other marketing programs and materials; training programs and materials; and programs for our inspection of the Hotel and consulting with you.   System Hotels means hotels operating under the System using the Brand name.   Term has the meaning set forth in Section 3.0.   Trade Name means the name of the Hotel set forth in the Addendum.   Trade Restrictions means trade, economic or investment sanctions, export controls, anti-terrorism, non-proliferation, anti-money laundering and similar restrictions in force pursuant to laws, rules and regulations imposed under Laws to which the Parties are subject.   Transfer means in all its forms, any sale, lease, assignment, spin-off, transfer, or other conveyance of a direct or indirect legal or beneficial interest.   Transferee means the proposed new franchisee resulting from a Transfer.   Your Agreements means any other agreement between you and us or any of the Entities related to this Agreement, the Hotel and/or the Hotel Site.   2.0 GRANT OF LICENSE   2.1 Non-Exclusive License. We grant to you and you accept a limited, non-exclusive License to use the Marks and the System during the Term at, and in connection with, the operation of the Hotel in accordance with the terms of this Agreement.

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  2,2 Reserved Rights.   2.2.1 This Agreement does not limit our right, or the right of the Entities, to own, license or operate any Other Business of any nature, whether in the lodging or hospitality industry or not, and whether under the Brand, a Competing Brand, or otherwise. We and the Entities have the right to engage in any Other Businesses, even if they compete with the Hotel, the System, or the Brand, and whether we or the Entities start those businesses, or purchase, merge with, acquire, are acquired by, come under common ownership with, or associate with, such Other Businesses.   2.2.2 We may also   2.2.2.1 add, alter, delete or otherwise modify elements of the System;   2.2.2.2 use or license to others all or part of the System;   2.2.2.3 use the facilities, programs, services and/or personnel used in connection with the System in Other Businesses; and   2.2.2.4 use the System, the Brand and the Marks in the Other Businesses.   2.2.3 You acknowledge and agree that you have no rights to, and will not make any claims or demands for, damages or other relief arising from or related to any of the foregoing activities, and you acknowledge and agree that such activities will not give rise to any liability on our part, including liability for claims for unfair competition, breach of contract, breach of any applicable implied covenant of good faith and fair dealing, or divided loyalty.   3.0 TERM   The Term shall begin on the Effective Date and will end, without further notice, on the Expiration Date set forth in the Addendum, unless terminated earlier under the terms of this Agreement. You acknowledge and agree that this Agreement is non-renewable and that this Agreement confers on you absolutely no rights of license renewal or extension whatsoever following the Expiration Date.   4.0 OUR RESPONSIBILITIES   We have the following responsibilities to you under this Agreement, We reserve the right to fulfill some or all of these responsibilities through one of the Entities or through unrelated third parties, in our sole business judgment. We may require you to make payment for any resulting services or products directly to the provider.   4.1 Training. We may specify certain required and optional training programs and provide these programs at various locations. We may charge you for required training services and materials and for optional training services and materials we provide to you. You are responsible for all travel, lodging and other expenses you or your employees incur in attending these programs.   4.2 Reservation Service. We will furnish you with the Reservation Service. The Reservation Service will be furnished to you on the same basis as it is furnished to other System Hotels, subject to the provisions of Subsection 14.3 below.   4.3 Consultation. We may offer consultation services and advice in areas such as operations, facilities, and marketing. We may establish fees in advance, or on a project-by-project basis, for any consultation service or advice you request.   4.4 Marketing.   4.4.1 We will publish (either in hard copy or electronic form) and make available to the traveling public a directory that includes System Hotels. We will include the Hotel in advertising of System Hotels and in international, national and regional marketing programs in accordance with our general practice for System Hotels.

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  4.4.2 We will use your Monthly Program Fee to pay for various programs to benefit the System, including:   4.4.2.1 advertising, promotion, publicity, public relations, market research, and other marketing programs;   4.4.2.2 developing and maintaining directories of and Internet sites for System Hotels;   4.4.2.3 developing and maintaining the Reservation Service systems and support; and   4.4.2,4 administrative costs and overhead related to the administration or direction of these projects and programs.   4.4.3 We will have the sole right to determine how and when we spend these funds, including sole control over the creative concepts, materials and media used in the programs, the placement and allocation of advertising, and the selection of promotional programs.   4.4.4 We may enter into arrangements for development, marketing, operations, administrative, technical and support functions, facilities, programs, services and/or personnel with any other entity, including any of the Entities or a third party.   4.4.5 You acknowledge that Monthly Program Fees are intended for the benefit of the System and will not simply be used to promote or benefit any one System Hotel or market. We will have no obligation in administering any activities paid for with the Monthly Program Fee to make expenditures for you that are equivalent or proportionate to your payments or to ensure that the Hotel benefits directly or proportionately from such expenditures.   4.4.6 We may create any programs and allocate monies derived from Monthly Program Fees to any regions or localities, as we consider appropriate in our sole business judgment. The aggregate of Monthly Program Fees paid to us by System Hotels does not constitute a trust or advertising fund and we are not a fiduciary with respect to the Monthly Program Fees paid by you and other System Hotels.   4.4.7 We are not obligated to expend funds in excess of the amounts received from System Hotels. If any interest is earned on unused Monthly Program Fees, we will use the interest before using the principal. The Monthly Program Fee does not cover your costs of participating in any optional marketing programs and promotions offered by us in which you voluntarily choose to participate. These Monthly Program Fees do not cover the cost of operating the Hotel in accordance with the Standards.   4.5 Inspections/Compliance Assistance. We will administer a quality assurance program for the System that may include conducting pre- opening and periodic inspections of the Hotel and guest satisfaction surveys and audits to ensure compliance with the Standards. You will permit us to inspect the Hotel without prior notice to you to determine if the Hotel is in compliance with the Standards. You will cooperate with our representatives during these inspections. You will then take all steps necessary to correct any deficiencies within the times we establish. You may be charged a Quality Assurance Re-Evaluation Fee as set forth in the Standards. You will provide complimentary accommodations for the quality assurance auditor each time we conduct a regular inspection or a special on-site quality assurance re-evaluation after the Hotel has failed a regular quality assurance evaluation or to verify that deficiencies noted in a quality assurance evaluation report or PIP have been corrected or completed by the required dates.   4.6 Manual. We will issue to you or make available in electronic form the Manual and any revisions and updates we may make to the Manual during the Term. You agree to ensure that your copy of the Manual is, at all times, current and up to date. If there is any dispute as to your compliance with the provisions of the Manual, the master copy of the Manual maintained at our principal office will control.

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  4.7 Equipment and Supplies. We will make available to you for use in the Hotel various purchase, lease, or other arrangements for exterior signs, operating equipment, operating supplies, and furnishings, which we make available to other System Hotels.   5.0 YOUR RESPONSIBILITIES   5.1 Operational and Other Requirements. You must:   5.1.1 after the Opening Date, operate the Hotel twenty-four (24) hours a day;   5.1.2 operate the Hotel using the System, in compliance with this Agreement and the Standards, and in such a manner to provide courteous, uniform, respectable and high quality lodging and other services and conveniences to the public. You acknowledge that, although we provide the Standards, you have exclusive day-to-day control of the business and operation of the Hotel and we do not in any way possess or exercise such control;   5A.3 comply with the Standards, including our specifications for all supplies, products and services. We may require you to purchase a particular brand of product or service to maintain the common identity and reputation of the Brand, and you will comply with such requirements. Unless we specify otherwise, you may purchase products from any authorized .source of distribution; however, we reserve the right, in our business judgment, to enter into exclusive purchasing arrangements for particular products or services and to require that you purchase products or services from approved suppliers or distributors;   5.1.4 install, display, and maintain signage displaying or containing the Brand name and other distinguishing characteristics in accordance with Standards we establish for System Hotels;   5.1.5 comply with Standards for the training of persons involved in the operation of the Hotel, including completion by the General Manager and other key personnel of the Hotel of a training program for operation of the Hotel under the System, at a site we designate. You will pay us all fees and charges, if any, we require for your personnel to attend these training programs. You are responsible for  all travel, lodging and other expenses you or your employees incur in attending these programs;   5.1.6 purchase and maintain property management, revenue management, in-room entertainment, telecommunications, high-speed Internet access, and other computer and technology systems that we designate for the System or any portion of the System based on our assessment of the long-term best interests of System Hotels, considering the interest of the System as a whole;   5.1.7 advertise and promote the Hotel and related facilities and services on a local and regional basis in a first-class, dignified manner, using our identity and graphics Standards for all System Hotels, at your cost and expense. You must submit to us for our approval samples of all advertising and promotional materials that we have not previously approved (including any materials in digital, electronic or computerized form or in any form of media that exists now or is developed in the future) before you produce or distribute them. You will not begin using the materials until we approve them. You must immediately discontinue your use of any advertising or promotional material we disapprove, even if we previously approved the materials;   5.1.8 participate in and pay all charges in connection with all required System guest complaint resolution programs, which programs may include chargebacks to the Hotel for guest refunds or credits and all required System quality assurance programs, such as guest comment cards, customer surveys and mystery shopper programs. You must maintain minimum performance Standards and scores for quality assurance programs we establish;

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  5.1.9 honor all nationally recognized credit cards and credit vouchers issued for general credit purposes that we require and enter into all necessary credit card and voucher agreements with the issuers of such cards or vouchers;   6.1.10 participate in and use the Reservation Service, including any additions, enhancements, supplements or variants we develop or adopt, and honor and give first priority on available rooms to all confirmed reservations referred to the Hotel through the Reservation Service. The only reservation service or system you may use for outgoing reservations referred by or from the Hotel to other Network Hotels will be the Reservation Service or other reservation services we designate;   5.1.11 comply with Laws and, on request, give evidence to us of compliance;   5.1.12 participate in, and promptly pay all fees, commissions and charges associated with, all travel agent commission programs and third-party reservation and distribution services (such as airline reservation systems), all as required by the Standards and in accordance with the terms of these programs, all of which may be modified;   5.1.13 not engage, directly or indirectly, in any cross-marketing or cross-promotion of the Hotel with any Other Hotel or related business, without our prior written consent. You agree to refer guests and customers, wherever reasonably possible, only to System Hotels or Network Hotels. We may require you to participate in programs designed to refer prospective customers to Other Hotels. You must display all material, including brochures and promotional material we provide for System Hotels and Network Hotels, and allow advertising and promotion only of System Hotels and Network Hotels on the Hotel Site, unless we specifically direct you to include advertising or promotion of Other Hotels;   5.1.14 treat as confidential the Standards, the Manual and all other Proprietary Information. You acknowledge and agree that you do not acquire any interest in the Proprietary Information other than the right to utilize the same in the development and operation of the Hotel under the terms of this Agreement. You agree that you will not use the Proprietary Information in any business or for any purpose other than in the development and operation of the Hotel under the System and will maintain the absolute confidentiality of the Proprietary Information during and after the Term. You will not make unauthorized copies of any portion of the Proprietary Information; and will adopt and implement all procedures we may periodically establish in our business judgment to prevent unauthorized use or disclosure of the Proprietary Information, including restrictions on disclosure to employees and the use of non-disclosure and non-competition clauses in agreements with employees, agents and independent contractors who have access to the Proprietary information;   5.1.15 not become a Competitor, or permit your Affiliate to become a Competitor, in the upscale hotel market segment, or any substantially equivalent market segment, as determined by Smith Travel Research (STR) (or, if STR is no longer in existence, STR's successor or other such industry resource that is as equally as reputable as STR);   5.1.16 own fee simple title (or long-term ground leasehold interest for a term equal to the Term) to the real property and improvements that comprise the Hotel and the Hotel Site, or alternatively, at our request, cause the fee simple owner, or other third party acceptable to us, to provide its guaranty covering all of your obligations under this Agreement in form and substance acceptable to us;   5.1.17 maintain legal possession and control of the Hotel and Hotel Site for the Term and promptly deliver to us a copy of any notice of default you receive from any mortgagee, trustee under any deed of trust, or ground lessor for the Hotel, and on our request, provide any additional information we may request related to any alleged default;   5.1.18 not directly or indirectly conduct, or permit by lease, concession arrangement or otherwise, gaming or casino operations in or connected to the Hotel or on the Hotel Site, or otherwise engage in any activity which, in our business judgment, is likely to adversely reflect upon or affect in any manner, any gaming licenses or permits held by the Entities or the then-current stature of any of the Entities with any gaming commission, board, or similar governmental or regulatory agency, or the reputation or business of any of the Entities;

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  5.1.19 not directly or indirectly conduct or permit the marketing or sale of timeshares, vacation ownership, fractional ownership, condominiums or like schemes at, or adjacent to, the Hotel. This restriction will not prohibit you from directly or indirectly conducting timeshare, vacation ownership, fractional ownership, or condominium sales or marketing at and for any property located adjacent to the Hotel that is owned or leased by you so long as you do not use any of the Marks in such sales or marketing efforts and you do not yse the Hotel or its facilities in such sales and marketing efforts or in the business operations of the adjacent property;   5.1.20 participate in and pay all charges related to our marketing programs (in addition to programs covered by the Monthly Program Fee), all guest frequency programs we require, and any optional programs that you opt into;   5.1.21 honor the terms of any discount or promotional programs (including any frequent guest program) that we offer to the public on your behalf, any room rate quoted to any guest at the time the guest makes an advance reservation, and any award certificates issued to Hotel guests participating in these programs;   5.1.22 after the Effective Date, maintain, at your expense, insurance of the types and in the minimum amounts we specify in the Standards. All such insurance must be with insurers having the minimum ratings we specify, name as additional insureds the parties we specify in the Standards, and carry the endorsements and notice requirements we specify in the Standards. If you fail or neglect to obtain or maintain the insurance or policy limits required by this Agreement or the Standards, we have the option, but not the obligation, to obtain and maintain such insurance without notice to you, and you will immediately on our demand pay us the premiums and cost we incur in obtaining this insurance;   5.1.23 not share the business operations and Hotel facilities with any Other Hotel or other business;   5.1.24 not engage in any tenant-in-common syndication or Transfer of any tenant-incommon interest in the Hotel or the Hotel Site; and   5.1.25 promptly provide to us all information we reasonably request about you and your Affiliates (including your respective beneficial owners, officers, directors, shareholders, partners or members) and/or the Hotel, title to the property on which the Hotel is constructed and any other property used by the Hotel. You will not be required to provide us information about Publicly Traded Equity Owners with a non- Controlling Equity Interest except as we deem necessary in our legal or business judgment to ensure compliance by us or our Affiliates with applicable Laws.   6.0 HOTEL WORK   6.1 Necessary Consents.   6A.1 You must obtain our prior written consent before retaining or engaging any architect, interior designer, general contractor and major subcontractors for the Hotel. We will not unreasonably withhold such consent.   6.1.2 Plans and Designs must be submitted to us in accordance with the schedule specified in the Addendum or any PIP. Before we approve your Plans, your architect or other certified professional must certify to us that the Plans comply with all Laws related to accessibility/accommodations/facilities for those with disabilities.

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  6.1.3 You shall not commence any Hotel Work unless and until we have issued our written consent in respect of the Plans and Designs, which consent will not be unreasonably withheld.   6.1.4 Once we have provided our consent to the Plans and Designs, no change may be made to the Plans or Designs without our prior written consent. By consenting to the Plans and Designs or any changes or modifications to the Plans and Designs, we do not warrant the depth of our analysis or assume any responsibility or liability for the suitability of the Plans and Designs or the resulting Hotel Work,   6.1.5 You are solely responsible for ensuring that the Plans and Designs (including Plans and Designs for Hotel Work) comply with our then-current Standards, the Manual, and all Laws.   6.2 Initial Hotel Work. You will perform or cause the Hotel Work to be performed in accordance with this Agreement, the approved Plans and Designs, the Manual and, for Renovation Work, the PIP. You will bear the entire cost of the Hotel Work, including the cost of the Plans and Designs, professional fees, licenses, permits, equipment, furniture, furnishings and supplies. You are solely responsible for obtaining all necessary licenses, permits and zoning variances required for the Hotel Work.   6.3 Commencement and Completion of the Hotel Work.   6.3.1 You will commence the Hotel Work on or before the Construction Commencement Date or Renovation Commencement Date specified in the Addendum. You may request an extension by submitting a written request for our approval before the applicable deadline, describing the status of the project and the reason for the requested extension, and paying our then-current extension fee. We may condition our approval on an update to the Plans and Designs. Once commenced, the Hotel Work will continue uninterrupted except to the extent continuation is prevented by events of Force Majeure. You must give written notice to us specifying the nature and duration of any event of Force Majeure promptly after becoming aware of the event, and specifying that you have used, and continue to use, reasonable endeavours to mitigate the effects of such event until such event ceases to exist. On verification of the event of Force Majeure, we will approve an extension of the Construction Commencement Date or Renovation Work Completion Date for up to eighteen (18) months. You must promptly provide to us evidence that the Construction Work has commenced if we request it.   6.3.2 The Hotel Work must be completed and the Hotel must be furnished, equipped, and otherwise made ready to open in accordance with the terms of this Agreement no later than the Construction Work Completion Date or Renovation Work Completion Date specified in the Addendum. You may request an extension by submitting a written request for our approval before the applicable deadline, describing the status of the project and the reason for the requested extension, and paying our then-current extension fee.   6.3.3 On completion of the Hotel Work and, as a condition to our authorization to open the Hotel, your architect, general contractor or other certified professional must provide us with a certificate stating that the as-built premises comply with all Laws relating to accessibility/accommodations/facilities for those with disabilities.   6.4 Opening the Hotel Under This Agreement.   6.4.1 You will open the Hotel on the Opening Date. You will not open the Hotel unless and until you receive our written consent to do so pursuant to Subsection 6.4.2 or 6.4.3.   6.4.2 You will give us at least fifteen (15) days advance notice that you have complied with all the terms and conditions of this Agreement and the Hotel is ready to open. We will use reasonable efforts within fifteen (15) days after we receive your notice to visit the Hotel and to conduct other investigations as we deem necessary to determine whether to authorize the opening of the Hotel, but we will not be liable for delays or loss occasioned by our inability to complete our investigation and to make this determination within the fifteen (15) day period. If you fail to pass our initial opening site visit, we may, in our sole business judgment, charge you reasonable fees associated with any additional visits.

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  6.4.3 We shall be entitled to withhold our consent to the opening of the Hotel until:   6.4.3.1 you have complied with all the terms and conditions in this Agreement;   6.4.3.2 your staff has received adequate training and instruction in the manner we require;   6.4.3.3 you have received authorization to open the Hotel from the relevant governmental authority for the jurisdiction in which the Hotel is located, if applicable; and   6.4.3.4 all fees and charges you owe to us or the Entities have been paid.   6.4.4 Opening the Hotel before the Opening Date is a material breach of this Agreement.   6.4.4.1 You will pay us Liquidated Damages in the amount of Five Thousand Dollars ($5,000) per day if you open the Hotel before the Opening Date to compensate us for the damage caused by such breach. You must also reimburse us for all of our costs and expenses, including legal fees, incurred in enforcing our rights under this Agreement.   6.4.4.2 These Liquidated Damages for damage to our Marks shall not limit or exclude any other remedies we may have at law or in equity. You acknowledge and agree that that the Liquidated Damages payable under this Subsection represent a reasonable estimate of the minimum just and fair compensation for the damages we will suffer as the result of the opening of the Hotel before the Opening Date in material breach of this Agreement.   6.5 Performance of Agreement. You must satisfy all of the terms and conditions of this Agreement, and equip, supply, staff and otherwise make the Hotel ready to open under our Standards. As a result of your efforts to comply with the terms and conditions of this Agreement, you will incur significant expense and expend substantial time and effort. You acknowledge and agree that we will have no liability or obligation to you for any losses, obligations, liabilities or expenses you incur if we do not authorize the Hotel to open or if we terminate this Agreement because you have not complied with the terms and conditions of this Agreement.   6.6 Hotel Refurbishment and Room Addition.   6.6.1 We may periodically require you to modernize, rehabilitate and/or upgrade the Hotel's fixtures, equipment, furnishings, furniture, signs, computer hardware and software and related equipment, supplies and other items to meet the then-current Standards. You will make these changes at your sole cost and expense and in the time frame we require.   6.6.2 You may not make any significant changes (including major changes in structure, design or decor) in the Hotel. Minor redecoration and minor structural changes that comply with our Standards will not be considered significant.   6.6.3 You may not make any change in the number of approved Guest Rooms in the Addendum. if you wish to add additional Guest Rooms to the Hotel after the Opening Date, you must submit an application to obtain our consent. If we consent to the addition of Guest Rooms at the Hotel, you must pay us our then-current Room Addition Fee. As a condition to our granting approval of your application, we may require you to modernize, rehabilitate or upgrade the Hotel in accordance with Subsection 6.6.1 of this Agreement, and to pay us our then-current PIP Fee to prepare a PIP to determine the renovation requirements for the Hotel. We may also require you to execute an amendment to this Agreement covering the terms and conditions of our consent to the addition of Guest Rooms.

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  7.0 STAFF AND MANAGEMENT OF THE HOTEL   7.1 You are solely responsible for the management of the Hotel's business. You will provide qualified and experienced management (a Management Company) and an individual to manage the Hotel (a General Manager), each approved by us in writing. We have the right to communicate directly with the Management Company and managers at the Hotel. We may rely on the communications of such managers or Management Company as being on your behalf. Any Management Company and/or General Manager must have the authority to perform all of your obligations under this Agreement. The engagement of a Management Company does not reduce your obligations under this Agreement. In the case of any conflict between this Agreement and any agreement with the Management Company or General Manager, this Agreement prevails.   7.2 You represent and agree that you have not, and will not, enter into any lease, management agreement or other similar arrangement for the operation of the Hotel or any part of the Hotel without our prior written consent. To be approved by us as the operator of the Hotel, you, any proposed Management Company and any proposed General Manager must be qualified to manage the Hotel. We may refuse to approve you, any proposed Management Company or any proposed General Manager who is a Competitor or which, in our business judgment, is inexperienced or unqualified in managerial skills or operating capability or is unable or unwilling to adhere fully to your obligations under this Agreement.   7.3 If the Management Company becomes a Competitor or the Management Company and/or the General Manager resigns or is terminated by you or otherwise becomes unsuitable in our sole business judgment to manage the Hotel during the Term, you will have ninety (90) days to retain a qualified substitute Management Company and/or General Manager acceptable to us.   8.0 PAYMENT OF FEES   8.1 Monthly Fees. Beginning on the Effective Date, you will pay to us for each month (or part of a month, including the final month you operate under this Agreement) the Monthly Fees, each of which is set forth in the Addendum.   8.2 Calculation and Payment of Fees.   8.2.1 The Monthly Fees will be calculated in accordance with the accounting methods of the then-current Uniform System of Accounts for the Lodging Industry, or such other accounting methods specified by us in the Manual.   8.2.2 The Monthly Fees will be paid to us at the place and in the manner we designate on or before the fifteenth (15th) day of each month and will be accompanied by our standard schedule setting forth in reasonable detail the computation of the Monthly Fees for such month.   8.2.3 We may require you to transmit the Monthly Fees and all other payments required under this Agreement by wire transfer or other form of electronic funds transfer and to provide the standard schedule in electronic form. You must bear all costs of wire transfer or other form of electronic funds transfer or other electronic payment and reporting.   8.2.4 In the event of fire or other insured casualty that results in a reduction of Gross Rooms Revenue, you will determine and pay us, from the proceeds of any business interruption or other insurance applicable to loss of revenues, an amount equal to the forecasted Monthly Fees, based on the Gross Rooms Revenue amounts agreed on between you and your insurance company that would have been paid to us in the absence of such casualty.

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  8.3 Other Fees. You will timely pay all amounts due us or any of the Entities for any invoices or for goods or services purchased by or provided to you or paid by us or any of the Entities on your behalf, including pre-opening sales and operations training or extension fees as specified on the Addendum.   8.4 Taxes. If a Gross Receipts Tax is imposed on us or the Entities based on payments made by you related to this Agreement, then you must reimburse us or the Entity for such Gross Receipts Tax to ensure that the amount we or the Entity retains, after paying the Gross Receipts Tax, equals the net amount of the payments you are required to pay us or the Entity had such Gross Receipts Tax not been imposed. You are not required to pay income taxes payable by us or any Entity as a result of our net income relating to fees collected under this Agreement.   8.5 Application of Fees. We may apply any amounts received from you to any amounts due under this Agreement.   9.0 PROPRIETARY RIGHTS   9.1 Our Proprietary Rights.   9.1.1 You will not contest, either directly or indirectly during or after the Term:   9.1.1.1 our (and/or any Entities') ownership of, rights to and interest in the System, Brand, Marks and any of their elements or components, including present and future distinguishing characteristics and agree that neither you nor any design or construction professional engaged by you may use our Standards, our Manual or your approved Plans and Designs for any hotel or lodging project other than the Hotel;   9.1.1.2 our sole right to grant licenses to use all or any elements or components of the System;   9.1.1.3 that we (and/or the Entities) are the owner of (or the licensee of, with the right to sub-license) all right, title and interest in and to the Brand and the Marks used in any form and in any design, alone or in any combination, together with the goodwill they symbolize; or   9,1.1.4 the validity or ownership of the Marks.   9.1.2 You acknowledge that these Marks have acquired a secondary meaning which indicates that the Hotel, Brand and System are operated by or with our approval. All improvements and additions to, or associated with, the System, all Marks, and all goodwill arising from your use of the System and the Marks, will inure to our benefit and become our property (or that of the applicable Entities), even if you develop them.   9.1.3 You will not apply for or obtain any trademark or service mark registration of any of the Marks or any confusingly similar marks in your name or on behalf of or for the benefit of anyone else. You acknowledge that you are not entitled to receive any payment or other value from us or from any of the Entities for any goodwill associated with your use of the System or the Marks, or any elements or components of the System.   9.2 Trade Name, Use of the Marks.   9,2.1 Trade Name.   9.2.1.1 The Hotel will be initially known by the Trade Name set forth in the Addendum. We may change the Trade Name, the Brand name and/or any of the Marks (but not the Principal Mark), or the way in which any of them (including the Principal Mark) are depicted, at any time at our sole option and at your expense. You may not change the Trade Name without our specific prior written consent.

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  9.2.1.2 You acknowledge and agree that you are not acquiring the right to use any service marks, copyrights, trademarks, trade dress, logos, designs, insignia, emblems, symbols, slogans, distinguishing characteristics, trade names, domain names or other marks or characteristics owned by us or licensed to us that we do not specifically designate to be used in the System.   9.3 Use of Trade Name and Marks. You will operate under the Marks, using the Trade Name, at the Hotel. You will not adopt any other names or marks in operating the Hotel without our approval. You will not, without our prior written consent, use any of the Marks, or the word Hilton, or other Network trademarks, trade names or service marks, or any similar words or acronyms, in:   9.3.1 your corporate, partnership, business or trade name; 9.3.2 any Internet-related name (including a domain name);   9.3.3 or any business operated separately from the Hotel, including the name or identity of developments adjacent to or associated with the Hotel.   9.4 Trademark Disputes.   9.4.1 You will immediately notify us of any infringement or dilution of or challenge to your use of any of the Marks and will not, absent a court order or our prior written consent, communicate with any other person regarding any such infringement, dilution, challenge or claim. We will take the action we deem appropriate with respect to such challenges and claims and have the sole right to handle disputes concerning use of all or any part of the Marks or the System. You will fully cooperate with us and any applicable Entity in these matters. We will reimburse you for expenses incurred by you as the direct result of activities undertaken by you at our prior written request and specifically relating to the trademark dispute at issue. We will not reimburse you for any other expenses incurred by you for cooperating with us or the Entities.   9.4.2 You appoint us as your exclusive attorney-in-fact, to prosecute, defend and/or settle all disputes of this type at our sole option. You will sign any documents we or the applicable Entity believe are necessary to prosecute, defend or settle any dispute or obtain protection for the Marks and the System and will assign to us any claims you may have related to these matters. Our decisions as to the prosecution, defense or settlement of the dispute will be final. All recoveries made as a result of disputes regarding use of all or part of the System or the Marks will be for our account.   9.5 Web Sites.   9.5.1 You may not register, own, maintain or use any Sites that relate to the Network or the Hotel or that include the Marks, The only domain names, Sites, or Site contractors that you may use relating to the Hotel or this Agreement are those we assign or otherwise approve in writing. You acknowledge that you may not, without a legal license or other legal right, post on your Sites any material in which any third party has any direct or indirect ownership interest. You must incorporate on your Sites any information we require in the manner we deem necessary to protect our Marks.   9.5.2 Any use of the Marks on any Site must conform to our requirements, including the identity and graphics Standards for all System hotels. Given the changing nature of this technology, we have the right to withhold our approval, and to withdraw any prior approval, and to modify our requirements.

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  9.6 Covenant.   9.6.1 You agree, as a direct covenant with us and the Entities, that you will comply with all of the provisions of this Agreement related to the manner, terms and conditions of the use of the Marks and the termination of any right on your part to use any of the Marks. Any non-compliance by you with this covenant or the terms of this Agreement related to the Marks, or any unauthorized or improper use of the System or the Marks, will cause irreparable damage to us and/or to the Entities and is a material breach of this Agreement.   9.6.2 If you engage in such non-compliance or unauthorized and/or improper use of the System or the Marks during or after the Term, we and any of the applicable Entities, along with the successors and assigns of each, will be entitled to both temporary and permanent injunctive relief against you from any court of competent jurisdiction, in addition to all other remedies we or the Entities may have at law. You consent to the entry of such temporary and permanent injunctions. You must pay all costs and expenses, including reasonable attorneys' fees, expert fees, costs and other expenses of litigation that we and/or the Entities may incur in connection with your non-compliance with this covenant.   10.0 REPORTS, RECORDS, AUDITS, AND PRIVACY 10.1 Reports.   10.1.1 At our request, you will prepare and deliver to us the Reports containing the Operational Information (and any other information we reasonable require) in the form, manner and time frame we require. At a minimum, by the fifteenth (15th) day of each month, you will submit to us the Operational Information for the previous month and reflecting the computation of the amounts then due under Section 8, in the form, manner and time frame we require.   10.1.2 The Reports will be certified as accurate in the manner we require. You will permit us to inspect your books and records at all reasonable times.   10.2 Maintenance of Records. You will prepare, on a current basis, (and preserve for no less than the greater of four (4) years or the time period we stated in our record retention requirements), complete and accurate records concerning Gross Rooms Revenue and all financial, operating, marketing and other aspects of the Hotel. You will maintain an accounting system that fully and accurately reflects all financial aspects of the Hotel and its business. These records will include books of account, tax returns, governmental reports, register tapes, daily reports, and complete quarterly and annual financial statements (including profit and loss statements, balance sheets and cash flow statements) and will be prepared in the form, manner and time frame we require.   10.3 Audit.   10.3.1 We may require you to have the Gross Rooms Revenue, fees or other monies due to us computed and certified as accurate by a certified public accountant. During the Term and for two (2) years thereafter, we and our authorized agents have the right to verify Operational Information required under this Agreement by requesting, receiving, inspecting and auditing, at all reasonable times, any and all records referred to above wherever they may be located (or elsewhere if we request).   10.3.2 If any inspection or audit reveals that you understated or underpaid any payment due to us, you will promptly pay to us the deficiency plus interest from the date each payment was due until paid at the interest rate set forth in Section 17.15 of this Agreement.   10.3.3 If the audit or inspection reveals that the underpayment is willful, or is for five percent (5%) or more of the total amount owed for the period being inspected, you will also reimburse us for all inspection and audit costs, including reasonable travel, lodging, meals, salaries and other expenses of the inspecting or auditing personnel. Our acceptance of your payment of any deficiency will not waive any rights we may have as a result of your breach, including our right to terminate this Agreement. If the audit discloses an overpayment, we will credit this overpayment against your future payments due under this Agreement, without interest, or, if no future payments are due under this Agreement, we will promptly pay you the amount of the overpayment without interest.

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  10.4 Ownership of Information. All Information we obtain from you and all revenues we derive from such Information will be our property and Proprietary Information that we may use for any reason, including making a financial performance representation in our franchise disclosure documents. At your sole risk and responsibility, you may use Information that you acquire from third parties in connection with operating the Hotel, such as Personal Information, at any time during or after the Term, to the extent that your use is permitted by Law.   10.5 Privacy and Data Protection. You will:   10.5.1 comply with all applicable Privacy Laws;   10.5.2 comply with all Standards that relate to Privacy Laws and the privacy and security of Personal Information;   10.5.3 refrain from any action or inaction that could cause us or the Entities to breach any Privacy Laws;   10.5.4 do and execute, or arrange to be done and executed, each act, document and thing we deem necessary in our business judgment to keep us and the Entities in compliance with the Privacy Laws; and   10.5.5 immediately report to us the theft or loss of Personal Information (other than the Personal Information of your own officers, directors, shareholders, employees or service providers).   11.0 CONDEMNATION AND CASUALTY   11.1 Condemnation. You must immediately inform us of any proposed taking of any portion of the Hotel by eminent domain. If, in our business judgment, the taking is significant enough to render the continued operation of the Hotel in accordance with the Standards and guest expectations impractical, then we may terminate this Agreement on written notice to you and you will not pay us Liquidated Damages. If such taking, in our business judgment, does not require the termination of this Agreement, then you will make all necessary modifications to make the Hotel conform to its condition, character and appearance immediately before such taking, according to Plans and Designs approved by us. You will take all measures to ensure that the resumption of normal operations at the Hotel is not unreasonably delayed.   11.2 Casualty.   11.2.1 You must immediately inform us if the Hotel is damaged by fire or other casualty. If the damage or repair requires closing the Hotel, you may choose to repair or rebuild the Hotel according to the Standards, provided you: begin reconstruction within six (6) months after closing and reopen the Hotel for continuous business operations as soon as practicable (but in any event no later than eighteen (18) months after the closing of the Hotel) and give us at least thirty (30) days notice of the projected date of reopening. If you cannot begin or complete reconstruction within these time frames, you may request extension approval from us in writing, describing the status of the project and the reason for the requested extension, which we will consider in accordance with our standard business practice. Once the Hotel is closed, you will not promote the Hotel as a System Hotel or otherwise identify the Hotel using any of the Marks without our prior written consent.

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  11.2.2 You and we each have the right to terminate this Agreement if you elect not to repair or rebuild the Hotel as set forth above in Subsection 11.2.1, provided the terminating party gives the other party sixty (60) days written notice. We will not require you to pay Liquidated Damages unless you or one of your Affiliates own and/or operate a hotel at the Hotel Site under a lease, license or franchise from a Competitor within three (3) years of the termination date.   11.3 No Extensions of Term. Nothing in this Section 11 will extend the Term.   12.0 NOTICE OF INTENT TO MARKET   Except in the case of a Transfer governed by Subsection 13.2.1 or 13.2.2 of this Agreement, if you or a Controlling Affiliate want to Transfer any Equity Interest, you must give us written notice, concurrently with beginning your marketing efforts.   13.0 TRANSFERS   13.1 Our Transfer.   13.1.1 We may assign or Transfer this Agreement or any of our rights, duties, or assets under this Agreement, by operation of law or otherwise, to any person or legal entity without your consent, provided that any such person or legal entity shall be required to assume all of our obligations to permit you to operate the Hotel under the Brand after such assignment. Any of the Entities may transfer, sell, dispose of, or otherwise convey, their ownership rights in us or any of our Affiliates, by operation of law or otherwise, including by public offering, to any person or legal entity without your consent.   13.1.2 If we assign this Agreement to a third party who expressly assumes our obligations under this Agreement, we will no longer have any performance or other obligations to you under this Agreement and your right to use any programs, rights or services provided to you by us or our Affiliates under this Agreement will terminate.   13.2 Your Transfer. You understand and acknowledge that the rights and duties in this Agreement are personal to you and that we are entering into this Agreement in reliance on your business skill, financial capacity, and the personal character of you, your officers, directors, partners, members, shareholders or trustees. A Transfer by you of any Equity Interest, or this Agreement, or any of your rights or obligations under this Agreement, or a Transfer by an Equity Owner is prohibited other than as expressly permitted herein.   13.2.1 Permitted Transfers That Do Not Require Notice or Consent. The following Transfers are permitted without giving notice or obtaining our consent if the Permitted Transfer does not result in a change in Control of the Franchisee, the Hotel or the Hotel Site and you meet the requirements set forth below.   13.2.1.1 Privately Held Equity Interests: Less than 25% Change/No Change of Control. An Equity Interest that is not publicly traded may be Transferred if, immediately after the transaction, the transferee Equity Owner will own less than twenty-five percent (25%) of the Equity Interest.   13.2.1.2 Publicly Traded Equity Interests. A Publicly Traded Equity interest may be Transferred.

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  13.2.2 Permitted Transfers That Require Notice and Consent. We will permit you or any Equity Owner named in the Addendum as of the Effective Date (or any transferee Equity Owner we subsequently approve) to engage in the Permitted Transfers set forth below if any such Permitted Transfer does not result in a change of Control of the Franchisee, the Hotel or the Hotel Site and: (a) the proposed transferee is not a Sanctioned Person or a Competitor; (b) you give us at least sixty (60) days' advance written notice of the proposed Permitted Transfer (including the identity and contact information for any proposed transferee and any other information we may require in order to review the proposed Permitted Transfer); (c) you pay to us a nonrefundable processing fee of Five Thousand Dollars ($5,000) with the Permitted Transfer request; (d) you follow our then-current procedure for processing Permitted Transfers; and (e) you execute any documents required by us for processing Permitted Transfers. If a Permitted Transfer listed in Subsection 13.2.2 otherwise qualifies as a Permitted Transfer without notice or consent under Subsection 13.2.1, the provisions of Subsection 13.2.1 will control.   13.2.2.1 Affiliate Transfer. You or any Equity Owner may Transfer an Equity Interest or this Agreement to an Affiliate.   13.2.2,2 Transfers to a Family Member or Trust, If you or any Equity Owner as of the Effective Date are a natural person, you and such Equity Owner may Transfer an Equity Interest or this Agreement to an immediate family member (i.e., spouse, children, parents, siblings) or to a trust for your benefit or the benefit of the Equity Owner or the Equity Owner's immediate family members.   13.2.2.3 Transfer On Death. On the death of Franchisee or an Equity Owner who is a natural person, this Agreement or the Equity Interest of the deceased Equity Owner may Transfer in accordance with such person's will or, if such person dies intestate, in accordance with laws of intestacy governing the distribution of such person's estate, provided that: (i) the transfer on death is to an immediate family member or to a legal entity formed by such family member(s); and (ii) within one (1) year after the death, such family member(s) or entity meet all of our then-current requirements for an approved Transferee.   13.2.2.4 Privately Held Equity Interests: 25% or Greater Change/No Change of Control. You or any Equity Owner as of the Effective Date (or any transferee Equity Owner we subsequently approve) may Transfer an Equity Interest in Franchisee even though, after the completion of such Transfer, twenty-five percent (25%) or more of the Equity Interests in Franchisee will have changed hands since the Effective Date of this Agreement.   13.2.3 Change of Ownership Transfer. Any proposed Transfer that is not described in Subsection 13.2.1 or 13.2,2 is a Change of Ownership Transfer. We will have sixty (60) days from our receipt of the completed and signed franchise application to consent or withhold our consent to any proposed Change of Ownership Transfer. You consent to our communication with any party we deem necessary about the Hotel in order for us to evaluate the proposed Change of Ownership Transfer. Our consent to the Change of Ownership Transfer is subject to the following conditions, all of which must be satisfied at or before the date of closing the Change of Ownership Transfer (Closing):   13.2.3.1 the Transferee submits a Change of Ownership Application, pays our then current franchise application fee and any PIP Fee, executes our then-current form of new franchise agreement and all ancillary forms, including a guaranty from a third-party acceptable to us, if required;   13.2.3.2 you are not in default of this Agreement or any other agreements with us or our Affiliates;   13.2.3.3 you or the Transferee pay all amounts due to us and the Entities through the date of the Closing;   13.2.3.4 you execute our then-current form of voluntary termination agreement, which may include a general release, covering termination of this Agreement;   13.2.3.5 you conclude to our satisfaction, or provide adequate security for, any suit, action, or proceeding pending or threatened against you, us or any Entity with respect to the Hotel, which may result in liability on the part of us or any Entity;

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  13.2.3.6 you, the Transferee and/or transferee Equity Owner(s) submit to us all information related to the Transfer that we require, including applications; and   13.2.3.7 the Transferee meets our then-current business requirements for new franchisees and is neither a Sanctioned Person nor a Competitor.   13.2.4 Public Offering or Private Placement.   13.2.4.1 Any offering by you of Securities requires our review if you use the Marks, or refer to us or this Agreement in your offering. All materials required by any Law for the offer or sale of those Securities must be submitted to us for review at least sixty (60) days before the date you distribute those materials or fife them with any governmental agency, including any materials to be used in any offering exempt from registration under any securities laws.   13.2.4.2 You must submit to us a non-refundable Five Thousand Dollar ($5,000) processing fee with the offering documents and pay any additional costs we may incur in reviewing your documents, including reasonable attorneys' fees. Except as legally required to describe the Hotel in the offering materials, you may not use any of the Marks or otherwise imply our participation or that of Hilton Worldwide or any other Entity in or endorsement of any Securities or any Securities offering.   13.2.4.3 We have the right to approve any description of this Agreement or of your relationship with us, or any use of the Marks, contained in any prospectus, offering memorandum or other communications or materials you use in the sale or offer of any Securities. Our review of these documents will not in any way be considered our agreement with any statements contained in those documents, including any projections, or our acknowledgment or agreement that the documents comply with any Laws.   13.2.4.4 You may not sell any Securities unless you clearly disclose to all purchasers and offerees that: (i) neither we, nor any Entity, nor any of our or their respective officers, directors, agents or employees, will in any way be deemed an issuer or underwriter of the Securities, as those terms are defined in applicable securities laws; and (ii) we, the Entities, and our respective officers, directors, agents and employees have not assumed and will not have any liability or responsibility for any financial statements, prospectuses or other financial information contained in any prospectus or similar written or oral communication.   13.2.4.5 You must indemnify, defend and hold the Indemnified Parties free and harmless of and from any and all liabilities, costs, damages, claims or expenses arising out of or related to the safe or offer of any of your Securities to the same extent as provided in Subsection 15.1 of this Agreement.   13.2.5 Mortgages and Pledges to Lending Institutions.   13.2.5.1 You or an Equity Owner may mortgage or pledge the Hotel or an Equity Interest to a lender that finances the acquisition, development or operation of the Hotel, without notifying us or obtaining our consent, provided that: (i) you or the applicable Equity Owner are the sole borrower; and (ii) the loan is not secured by any other hotels or other collateral.   13.2.5.2 You must notify us, in writing, before incurring other proposed indebtedness that involves a mortgage or pledge of the Hotel or an Equity Interest, or a collateral assignment of this Agreement, so that we can evaluate the structure to determine whether any special agreements and/or assurances from the lender, the Franchisee and/or its Equity Owners will be required including a lender comfort letter or a loan related guaranty, in a form satisfactory to us. We may charge a fee for our review of a proposed mortgage or pledge and for the processing of a lender comfort letter.

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  13.2.6 Commercial Leases. You may lease or sublease commercial space in the Hotel, or enter into concession arrangements for operations in connection with the Hotel, in the ordinary course of business, subject to our right to review and approve the nature of the proposed business and the proposed brand and concept, all in keeping with our Standards for System Hotels.   14.0 TERMINATION   14.1 Termination with Opportunity to Cure. We may terminate this Agreement by written notice to you and opportunity to cure at any time before its expiration on any of the following grounds:   14.1.1 You fail to pay us any sums due and owing to us or the Entities under this Agreement within the cure period set forth in the notice, which shall not be less than ten (10) days;   14.1.2 You fail to begin or complete the Hotel Work by the relevant dates set forth in the Addendum or fail to open the hotel on the Opening Date, and do not cure that default within the cure period set forth in the notice, which shall not be less than ten (10) days;   14.1.3 You do not purchase or maintain insurance required by this Agreement or do not reimburse us for our purchase of insurance on your behalf within the cure period set forth in the notice, which shall not be less than ten (10) days; or   14.1.4 You fail to comply with any other provision of this Agreement, the Manual or any Standard and do not cure that default within the cure period set forth in the notice, which shall not be less than thirty (30) days.   14.2 Immediate Termination by Us. We may immediately terminate this Agreement on notice to you and without any opportunity to cure the default if:   14.2.1 after curing any material breach of this Agreement or the Standards, you engage in the same non-compliance within any consecutive twenty-four (24) month period, whether or not the non-compliance is corrected after notice, which pattern of non-compliance in and of itself will be deemed material;   14.2.2 you receive three (3) notices of material default in any twelve (12) month period, even if the defaults have been cured;   14.2.3 you fail to pay debts as they become due or admit in writing your inability to pay your debts or you make a general assignment for the benefit of your creditors;   14.2.4 you have an order entered against you appointing a receiver for the Hotel or a substantial part of your or the Hotel's assets or you file a voluntary petition in bankruptcy or any pleading seeking any reorganization, liquidation, or dissolution under any law, or you admit or fail to contest the material allegations of any such pleading filed against you or the Hotel, and the action results in the entry of an order for relief against you under the Bankruptcy Code, the adjudication of you as insolvent, or the abatement of the claims of creditors of you or the Hotel under any law;   14.2.5 you or your Guarantor lose possession or the right to possession of all or a significant part of the Hotel or Hotel Site for any reason other than those described in Section 11;   14.2.6 you fail to operate the Hotel for five (5) consecutive days, unless the failure to operate is due to fire, flood, earthquake or similar causes beyond your control, provided that you have taken reasonable steps to minimize the impact of such events;   14.2.7 you contest in any court or proceeding our ownership of the System or any part of the System or the validity of any of the Marks;

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  14.2.8 you or any Equity Owner with a controlling Equity Interest are or have been convicted of a felony or any other offense or conduct, if we determine in our business judgment it is likely to adversely reflect on or affect the Hotel, the System, us and/or any Entity;   14.2.9 you conceal revenues, maintain false books and records of accounts, submit false reports or information to us or otherwise attempt to defraud us;   14.2.10 you, your Affiliate or a Guarantor become a Competitor except as otherwise permitted by Subsection 5.1.15;   14.2.11 you Transfer any interest in yourself, this Agreement, the Hotel or the Hotel Site, other than in compliance with Section 13 and its subparts;   14.2.12 you, your Affiliate or a Guarantor become a Sanctioned Person or are owned or controlled by a Sanctioned Person or fail to comply with the provisions of Subsection 17.13;   14.2.13 information is disclosed involving you or your Affiliates, which, in our business judgment, is likely to adversely reflect on or affect in any manner, any gaming licenses or permits held by the Entities or the then-current stature of any of the Entities with any gaming commission, board, or similar governmental or regulatory agency, or the reputation or business of any of the Entities;   14.2.14 any Guarantor breaches its guaranty to us; or   14.2.15 a threat or danger to public health or safety results from the construction, maintenance, or operation of the Hotel.   14.3 Suspension Interim Remedies. If you are in default of'this Agreement, we may elect to impose an Interim Remedy, including the suspension of our obligations under this Agreement and/or our or the Entities' obligations under any other of Your Agreements.   14.3.1 We may suspend the Hotel from the Reservation Service and any reservation and/or website services provided through or by us. We may remove the listing of the Hotel from any directories or advertising we publish. If we suspend the Hotel from the Reservation Service, we may divert reservations previously made for the Hotel to other System Hotels or Network Hotels.   14.3.2 We may disable all or any part of the software provided to you under Your Agreements and/or may suspend any one or more of the information technology and/or network services that we provide or support under Your Agreements.   14.3.3 We may charge you for costs related to suspending or disabling your right to use any software systems or technology we provided to you, together with intervention or administration fees as set forth in the Standards.   14.3.4 You agree that our exercise of the right to elect Interim Remedies will not result in actual or constructive termination or abandonment of this Agreement and that our decision to elect Interim Remedies is in addition to, and apart from, any other right or remedy we may have in this Agreement. If we exercise the right to elect Interim Remedies, the exercise will not be a waiver of any breach by you of any term, covenant or condition of this Agreement. You will not be entitled to any compensation, including repayment, reimbursement, refund or offsets, for any fees, charges, expenses or losses you may directly or indirectly incur by reason of our exercise and/or withdrawal of any Interim Remedy.

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  14.4 Liquidated Damages on Termination.   14.4.1 Calculation of Liquidated Damages. You acknowledge and agree that the premature termination of this Agreement will cause substantial damage to us. You agree that Liquidated Damages are not a penalty, but represent a reasonable estimate of the minimum just and fair compensation for the damages we will suffer as the result of your failure to operate the Hotel for the Term. If this Agreement terminates before the Expiration Date, you will pay us Liquidated Damages as follows:   14.4.1.1 If termination occurs before you begin the Hotel Work and before the Opening Date, and you or any Guarantor (or your or any Guarantor's Affiliates) directly or indirectly, enter into a franchise, license, management, lease and/or other similar agreement for or begin construction or commence operation of a hotel, motel, inn, or similar facility at the Hotel Site under a Competitor Brand within one (1) year after termination, then you will pay us Liquidated Damages in an amount equal to $3,600 multiplied by the number of approved Guest Rooms at the Hotel.   14.4.1.2 If termination occurs after you begin the Hotel Work but before the Opening Date, you will pay us Liquidated Damages in an amount equal to $3,600 multiplied by the number of approved Guest Rooms at the Hotel, unless your failure to complete the Hotel Work was the result of Force Majeure.   14.4.1.3 If termination occurs after the Effective Date but before the second anniversary of the Opening Date, you will pay us Liquidated Damages in an amount equal to $3,600 multiplied by the number of approved Guest Rooms at the Hotel.   14.4.1.4 If termination occurs after the second anniversary of the Opening Date but before the final five (5) calendar years of the Term, you will pay us Liquidated Damages in an amount calculated by dividing the sum of the Monthly Royalty Fees due to us under this Agreement for the prior twenty-four (24) month period by twenty-four (24) and then multiplying the resulting sum by sixty (60).   14.4.1.5 If there are less than sixty (60) months remaining in the Term on the date of termination, you will pay us Liquidated Damages in an amount calculated by dividing the sum of the Monthly Royalty Fees due to us under this Agreement for the prior twenty-four (24) month period by twenty-four (24) and then multiplying the resulting sum by the number of months remaining in the Term.   14.4.2 Payment of Liquidated Damages. Payment of Liquidated Damages is due thirty (30) days following termination of this Agreement or on demand.   14.5 Actual Damages Under Special Circumstances. You acknowledge that the Liquidated Damages described in Subsection 14.4 may be inadequate to compensate us for additional harm we may suffer, by reason of greater difficulty in re-entering the market, competitive damage to the System or the Network, damage to goodwill of the Marks, and other similar harm, under the following circumstances:   14.5.1 within twelve (12) months of each other, five (5) or more franchise agreements for the Brand between yourself (or any of your Affiliates) and us (or any of our Affiliates) terminate before their expiration date as a result of a breach by you or your Affiliate; or   14.5.2 this Agreement terminates due to an unapproved Transfer either to a (i) Competitor or (ii) buyer that converts the Hotel to a Competing Brand within two (2) years from the date this Agreement terminates.   14.5.3 In the circumstances set forth in Subsection 14.5.1 and 14.5.2, we reserve the right to seek actual damages in lieu of Liquidated Damages.   14.6 Your Obligations on Termination or Expiration. On termination or expiration of this Agreement, you will:   14.6.1 immediately pay all sums due and owing to us or any of the Entities, including any expenses incurred by us in obtaining injunctive relief for the enforcement of this Agreement;

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  14.6.2 immediately cease operating the Hotel as a System Hotel and cease using the System;   14.6.3 immediately cease using the Marks, the Trade Name, and any confusingly similar names, marks, trade dress systems, insignia, symbols, or other rights, procedures, and methods. You will deliver all goods and materials containing the Marks to us and we will have the sole and exclusive use of any items containing the Marks. You will immediately make any specified changes to the location as we may reasonably require for this purpose, which will include removal of the signs, custom decorations, and promotional materials;   14.6.4 immediately cease representing yourself as then or formerly a System Hotel or affiliated with the Brand or the Network;   14.6.5 immediately return all copies of the Manual and any other Proprietary Information to us;   14.6.6 immediately cancel all assumed name or equivalent registrations relating to your use of any Mark, notify the telephone company and all listing agencies and directory publishers including Internet domain name granting authorities, Internet service providers, global distribution systems, and web search engines of the termination or expiration of your right to use the Marks, the Trade Name, and any telephone number, any classified or other telephone directory listings, Internet domain names, uniform resource locators, website names, electronic mail addresses and search engine metatags and keywords associated with the Hotel, and authorize their transfer to us; and   14.6.7 irrevocably assign and transfer to us (or to our designee) all of your right, title and interest in any domain name listings and registrations that contain any reference to our Marks, System, Network or Brand; notify the applicable domain name registrars of the termination of your right to use any domain name or Sites associated with the Marks or the Brand; and authorize and instruct the cancellation of the domain name, or transfer of the domain name to us (or our designee), as we specify. You will also delete all references to our Marks, System, Network or Brand from any Sites you own, maintain or operate beyond the expiration or termination of this Agreement.   15.0 INDEMNITY   15.1 Beginning on the Effective Date, you must indemnify the Indemnified Parties against, and hold them harmless from, all losses, costs, liabilities, damages, claims, and expenses, including reasonable attorneys' fees, expert fees, costs and other expenses of litigation arising out of or resulting from:   15.1.1 any breach by you of this Agreement, the Manual or the Standards;   15.1.2 any act or omission of you or your officers, employees, Affiliates, associates or agents in any way arising out of or relating to this Agreement;   15.1.3 any claimed occurrence at the Hotel including personal injury, death or property damage;   15.1.4 your alleged or actual infringement or violation of any patent, Mark or copyright or other proprietary right owned or controlled by third parties;   15.1.5 your alleged or actual violation or breach of any contract (including any group sales agreement for the System), any Law, or any industry standard;   15.1.6 any business conducted by you or a third party in, on or about the Hotel or Hotel Site and

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  15.1.7 your failure to comply with Subsection 17.13, including a breach of the representations set forth therein.   15.2 You do not have to indemnify an Indemnified Party to the extent damages otherwise covered under this Section 15 are adjudged by a final, non-appealable judgment of a court of competent jurisdiction to have been solely the result of the gross negligence or willful misconduct of that Indemnified Party, and not any of the acts, errors, omissions, negligence or misconduct of you or anyone related to you or the Hotel. You may not rely on this exception to your indemnity obligation if the claims were asserted against us or any other Indemnified Party on the basis of theories of imputed or secondary liability, such as vicarious liability, agency, or apparent agency, or our failure to compel you to comply with the provisions of this Agreement, including compliance with Standards, Laws or other requirements.   15.3 You will give us written notice of any action, suit, proceeding, claim, demand, inquiry or investigation involving an Indemnified Party within five (5) days of your knowledge of it. At our election, you will defend us and/or the Indemnified Parties against the same or we may elect to assume (but under no circumstance will we be obligated to undertake) the defense and/or settlement of the action, suit, proceeding, claim, demand, inquiry or investigation at your expense and risk.   15.4 If we think our respective interests conflict, we may obtain separate counsel of our choice. This will not diminish your obligation to indemnify the Indemnified Parties and to hold them harmless. You will reimburse the Indemnified Parties on demand for all expenses, including reasonable attorneys' fees, expert fees, costs and other expenses of litigation, the Indemnified Parties incur to protect themselves or to remedy your defaults. The Indemnified Parties will not be required to seek recovery from third parties or otherwise mitigate their losses to maintain a claim against you, and their failure to do so will not reduce the amounts recoverable from you by the Indemnified Parties.   15.6 Your obligations under this Section 15 will survive expiration or termination of this Agreement.   16.0 RELATIONSHIP OF THE PARTIES   16.1 No Agency Relationship. You are an independent contractor. Neither Party is the legal representative or agent of the other Party nor has the power to obligate the other Party for any purpose. You acknowledge that we do not supervise or direct your daily affairs and that you have exclusive control over your daily affairs. You expressly acknowledge that the Parties have a business relationship based entirely on, and defined by, the express provisions of this Agreement and that no partnership, joint venture, agency, fiduciary or employment relationship is intended or created by reason of this Agreement.   16.2 Notices to Public Concerning Your Independent Status. All contracts for the Hotel's operations and services at the Hotel will be in your name or in the name of your Management Company. You will not enter into or sign any contracts in our name or any Entity's name or using the Marks or any acronyms or variations of the Marks. You will disclose in all dealings with the public, suppliers and third parties that you are an independent entity and that we have no liability for your debts.   17.0 MISCELLANEOUS   17.1 Severability and Interpretation.   17.1.1 if any provision of this Agreement is held to be unenforceable, void or voidable, that provision will be ineffective only to the extent of the prohibition, without in any way invalidating or affecting the remaining provisions of this Agreement, and all remaining provisions will continue in effect, unless the unenforceability of the provision frustrates the underlying purpose of this Agreement. If any provision of this Agreement is held to be unenforceable due to its scope, but may be made enforceable by limiting its scope, the provision will be considered amended to the minimum extent necessary to make it enforceable.

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  17,1.2 This Agreement will be interpreted without interpreting any provision in favor of or against either Party by reason of the drafting of the provision, or either of our positions relative to the other.   17.1.3 Any covenant, term or provision of this Agreement that provides for continuing obligations after the expiration or termination of this Agreement will survive any expiration or termination.   17.2 Governing Law, Jurisdiction and Venue.   17.2.1 The Parties agree that, except to the extent governed by the United States Trademark Act of 1946 (Lanham Act; 15 U.S.C.  lj 1050 et seq.), as amended, this Agreement will be governed by the laws of the State of New York without recourse to New York choice of law or conflicts of law principles. Nothing in this Section is intended to invoke the application of any franchise, business opportunity, antitrust, implied covenant, unfair competition, fiduciary or any other doctrine of law of the State of New York or any other state that would not otherwise apply absent this Subsection 17.2.1.   17.2.2 The Parties agree that any action brought pursuant to this Agreement or the relationship between them must be brought in the U.S. District Court for the Eastern District of Virginia, in Alexandria, Virginia, or if that court lacks subject matter jurisdiction, then in a court of competent jurisdiction whose jurisdiction includes either Fairfax County, Virginia or New York, New York, or in the county and state where the Hotel is located. You consent to personal jurisdiction and venue in each of these jurisdictions and waive, and agree not to assert, move or otherwise claim that the venue in any of these jurisdictions is for any reason improper, inconvenient, prejudicial or otherwise inappropriate.   17.3 Exclusive Benefit. This Agreement is exclusively for our and your benefit, and none of the obligations of you or us in this Agreement will run to, or be enforceable by, any other party (except for any rights we assign or delegate to one of the Entities or covenants in favor of the Entities, which rights and covenants will run to and be enforceable by the Entities or their successors and assigns) or give rise to liability to a third party, except as otherwise specifically set forth in this Agreement.   17.4 Entire Agreement. This Agreement and all of its attachments, documents, schedules, exhibits, and any other information specifically incorporated into this Agreement by reference (including any representations in any franchise disclosure document that we provided to you for the Brand in connection with the offer of this License) will be construed together as the entire agreement between you and us with respect to the Hotel and any other aspect of our relationship and will supersede and cancel any prior and/or contemporaneous discussions or writings between you and us.   17.5 Amendment and Waiver.   17.5.1 No change, termination, or attempted waiver or cancellation of any provision of this Agreement will bind us unless it is in writing, specifically designated as an amendment or waiver, and signed by one of our officers. We may condition our agreement to any amendment or waiver on receiving from you, in a form satisfactory to us, an estoppel and general release of claims that you may have against us, the Entities, and related parties.   17.5.2 No failure by us or by any of the Entities to exercise any power given us under this Agreement or to insist on strict compliance by you with any of your obligations, and no custom or practice at variance with the terms of this Agreement, will be considered a waiver of our or any Entity's right to demand exact compliance with the terms of this Agreement.   17.6 Consent; Business Judgment.   17.6.1 Wherever our consent or approval is required in this Agreement, unless the provision specifically indicates otherwise, we have the right to withhold our approval at our option, in our business judgment, taking into consideration our assessment of the long-term interests of the Systemoverall. We may withhold any and all consents or approvals required by this Agreement if you are in default or breach of this Agreement. Our approvals and consents will not be effective unless given in writing and signed by one of our duly authorized representatives.

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  17.6.2 You agree not to make a claim for money damages based on any allegation that we have unreasonably withheld or delayed any consent or approval to a proposed act by you under the terms of this Agreement. You also may not claim damages by way of set- off, counterclaim or defense for our withholding of consent. Your sole remedy for the claim will be an action or proceeding to enforce the provisions of this Agreement by specific performance or by declaratory judgment.   17.7 Notices. Notices under this Agreement must be in writing and must be delivered in person, by prepaid overnight commercial delivery service, or by prepaid overnight mail, registered or certified, with return-receipt requested. Notices to us must be sent to 7930 Jones Branch Drive, Suite 1100, McLean, VA 22102, ATTN: General Counsel. We will send notices to your address set forth in the Addendum. If you want to change the name or address for notice to you, you must do so in writing, signed by you or your duly authorized representative, designating a single address for notice, which may not be a P.O. Box, in compliance with this Subsection. Notice will be deemed effective on the earlier of: 1) receipt or first refusal of delivery; 2) one (1) day after posting if sent via overnight commercial delivery service or overnight United States Mail; or 3) three (3) days after placement in the United States mail if overnight delivery is not available to the notice address.   17.8 General Release. With the exception of claims related to representations contained in the franchise disclosure document for the Brand, you, on your own behalf and on behalf of, as applicable, your officers, directors, managers, employees, heirs, administrators, executors, agents and representatives and their respective successors and assigns hereby release, remise, acquit and forever discharge us and the Entities and our and their respective officers, directors, employees, managers, agents, representatives and their respective successors and assigns from any and all actions, claims, causes of action, suits, rights, debts, liabilities, accounts, agreements, covenants, contracts, promises, warranties, judgments, executions, demands, damages, costs and expenses, whether known or unknown at this time, of any kind or nature, absolute or contingent, existing at law or in equity, on account of any matter, cause or thing whatsoever that has happened, developed or occurred relating to this Agreement or the relationship between you and us. This release will survive the termination of this Agreement.   17.9 Remedies Cumulative. The remedies provided in this Agreement are cumulative. These remedies are not exclusive of any other remedies that you or we may be entitled to in case of any breach or threatened breach of the terms and provisions of this Agreement.   17.10 Economic Conditions Not a Defense. Neither general economic downturn or conditions nor your own financial inability to perform the terms of this Agreement will be a defense to an action by us or one of the Entities for your breach of this Agreement.   17.11 Representations and Warranties. You warrant, represent and agree that all statements in your franchise application in anticipation of the execution of this Agreement, and all other documents and information submitted to us by you or on your behalf are true, correct and complete as of the date of this Agreement. You further represent and warrant to us that:   17.11.1 you have independently investigated the risks of operating the Hotel under the Brand, including current and potential market conditions and competitive factors and risks, and have made an independent evaluation of all such matters and reviewed our franchise disclosure document, if applicable;   17.11.2 neither we nor our representatives have made any promises, representations or agreements other than those provided in the Agreement or in our franchise disclosure document provided to you in connection with the offer of this Agreement, if applicable, and you acknowledge that you are not relying on any promises, representations or agreements about us or the franchise not expressly contained in this Agreement in making your decision to sign this Agreement;

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  17.11.3 you have the full legal power authority and legal right to enter into this Agreement;   17.11.4 this Agreement constitutes a legal, valid and binding obligation and your entry into, performance and observation of this Agreement will not constitute a breach or default of any agreement to which you are a party or of any Law;   17.11.5 if you are a corporation, limited liability company, or other entity, you are, and throughout the Term will be, duly formed and validly existing, in good standing in the state in which you are organized, and are and will be authorized to do business in the state in which the Hotel is located; and   17.11.6 no Equity Interest has been issued, converted to, or is held as, bearer shares or any other form of ownership, for which there is no traceable record of the identity of the legal and beneficial owner of such Equity interest.   You hereby indemnify and hold us harmless from any breach of these representations and warranties. These warranties and representations will survive the termination of this Agreement.   17.12 Counterparts. This Agreement may be signed in counterparts, each of which will be considered an original.   17.13 Sanctioned Persons and Anti-bribery Representations and Warranties.   17.13.1 You represent, warrant and covenant to us and the Entities, on a continuing basis, that:   17.13.1.1 you (including your directors and officers, senior management and shareholders (or other Persons) having a controlling interest in you), and any Controlling Affiliate of the Hotel or the Hotel Site are not, and are not owned or controlled by, or acting on behalf of, a Sanctioned Person or, to your actual knowledge, otherwise the target of Trade Restrictions;   17.13.1.2 you have not and will not obtain, receive, transfer or provide any funds, property, debt, equity, or other financing related to this Agreement and the Hotel or Hotel Site to/from a Person that qualifies as a Sanctioned Person or, to your actual or constructive knowledge, is otherwise the target of any applicable Trade Restrictions;   17.13.1.3 you are familiar with the provisions of applicable Anti-Corruption Laws and shall comply with applicable Anti-Corruption Laws in performance of your respective obligations under or in connection with this Agreement;   17.13.1.4 any funds received or paid in connection with entry into or performance of this Agreement have not been and will not be derived from or commingled with the proceeds of any activities that are proscribed and punishable under the criminal laws of the United States, and that you are not engaging in this transaction in furtherance of a criminal act, including acts in violation of applicable Anti- Corruption Laws;   17.13.1.5 in preparation for and in entering into this Agreement, you have not made any Improper Payment or engaged in any acts or transactions otherwise in violation of any applicable Anti-Corruption Laws, and, in connection with this Agreement or the performance of your obligations under this Agreement, you will not directly or indirectly make, offer to make, or authorize any Improper Payment or engage in any acts or transactions otherwise in violation of any applicable Anti-Corruption Laws;

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  17.13.1.6 except as otherwise disclosed in writing to us, neither you, nor any of your direct or indirect shareholders (including legal or beneficial shareholders), officers, directors, employees, agents or other Persons designated by you to act on your behalf or receive any benefit under this Agreement, is a Government Official. Furthermore, no Government Official has or will have any existing or inchoate legal or beneficial interest in this Agreement or any payments to be made under this Agreement. You will shall notify us immediately in writing in the event of a change in the Government Official status of any such persons;   17.13.1.7 any statements, oral, written, electronic or otherwise, that you submit to us or to any third party in connection with the representations, warranties, and covenants described in this Subsection 17.13 are truthful and accurate and do not contain any materially false or inaccurate statements;   17.13.1.8 you will make reasonable efforts to assure that your respective appointed agents in relation to this Agreement comply in all material respects with the representations, warranties, and covenants described in this Subsection 17.13; and   17.13.2 You will notify us in writing immediately on the occurrence of any event which would render the foregoing representations and warranties of this Subsection 17.13 incorrect.   17.14 Attorneys' Fees and Costs. If either Party is required to employ legal counsel or to incur other expenses to enforce any provision of this Agreement or defend any claim by the other, then the prevailing party in any resulting dispute will be entitled to recover from the non- prevailing party the amount of all reasonable fees of attorneys and experts, court costs, and all other expenses incurred in enforcing such obligation or in defending against such claim, demand, action, or proceeding.   17.15 Interest. Any sum owed to us or the Entities by you or paid by us or the Entities on your behalf will bear interest from the date due until paid by you at the rate of eighteen percent (18%) per annum or, if lower, the maximum lawful rate.   17.16 Successors and Assigns. The terms and provisions of this Agreement will inure to the benefit of and be binding on the permitted successors and assigns of the Parties.   17.17 Our Delegation of Rights and Responsibility. In addition to the rights granted to us in Section 4 and Subsection 13.1 of this Agreement, we reserve the right to delegate to one or more of the Entities at any time, any and all of our rights, obligations or requirements under this Agreement, and to require that you submit any relevant materials and documents otherwise requiring approval by us under this Agreement to such Entity, in which case approval by such Entity will be conclusively deemed to be approval by us. During the period of such delegation or designation, any act or direction by such Entity with respect to this Agreement will be deemed the act or direction of us. We may revoke any such delegation or designation at any time. You acknowledge and agree that such delegation may result in one or more of the Entities which operate, license, or otherwise support brands other than the Brand, exercising or performing on our behalf any or all rights, obligations or requirements under this Agreement or performing shared services on our behalf.   18.0 WAIVER OF JURY TRIAL AND PUNITIVE DAMAGES   18.1 IF EITHER PARTY INITIATES LITIGATION INVOLVING THIS AGREEMENT OR ANY ASPECT OF THE RELATIONSHIP BETWEEN THE PARTIES (EVEN IF OTHER PARTIES OR OTHER CLAIMS ARE INCLUDED IN SUCH LITIGATION), ALL THE PARTIES WAIVE THEIR RIGHT TO A TRIAL BY JURY.   18.2 IN ANY DISPUTE BETWEEN THE PARTIES, ARISING OUT OF OR RELATED TO THIS AGREEMENT, ANY BREACH OF THIS AGREEMENT, OR THE RELATIONSHIP BETWEEN THE PARTIES, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, ALL PARTIES WAIVE ANY RIGHT THEY. MAY HAVE TO PUNITIVE OR EXEMPLARY DAMAGES FROM THE OTHER.

30







  NOTHING IN THIS SECTION LIMITS OUR RIGHT OR THE RIGHT OF AN INDEMNIFIED PARTY TO BE INDEMNIFIED AGAINST THE PAYMENT OF PUNITIVE OR EXEMPLARY DAMAGES TO A THIRD PARTY. THE PARTIES ACKNOWLEDGE THAT LIQUIDATED DAMAGES PAYABLE BY YOU UNDER THIS AGREEMENT (WHETHER PRE-OPENING LIQUIDATED DAMAGES OR LIQUIDATED DAMAGES FOR EARLY TERMINATION) ARE NOT PUNITIVE OR EXEMPLARY DAMAGES.   19M INTENTIONALLY DELETED

31







  ADDENDUM TO FRANCHISE AGREEMENT   Effective Date: March 21, 2014 (closing date)     Franchisor Name: HOMEWOOD SUITES FRANCHISE LLC, a Delaware limited liability company     Brand: Homewood Suites by Hilton (excluding Home2 Suites by Hilton and any other brands or product lines containing Suites, Hilton or the by Hilton tagline in the name)   Initial Approved Hotel Name (Trade Name): Homewood Suites by Hilton Stratford     Principal Mark in Brand: Homewood     Franchisee Name and Address ARC Hospitality TRS Stratford, (Attn: Principal Legal Correspondent): LLC 405 Park Avenue New York, New York 10022 Attention: Jesse Galloway Phone: (212) 415-6500 E-mail: juallowavRarIcap.com       Franchisor will also provide a courtesy copy of any notice, for informational purposes only, to:       Crestline Hotels & Resorts, LLC   3950 University Drive, Suite 301   Fairfax, Virginia 22030   Attention: CEO and General Counsel   E-mail: james.carrollcrestlinehotels.com   pierre.donahueacrestlinehotels.com       Any failure by Franchisor to provide a courtesy copy of any notice will not constitute a breach of this Agreement nor will it affect the validity of any notice that is provided to Franchisee pursuant to Subsection 17.7 of this Agreement.     Address of Hotel: 6905 Main Street   Stratford, Connecticut 06614   Initial Number of Approved Guest Rooms: 135     Plans Submission Dates:   Preliminary Plans: n/a     Design Development (50%) Plans and Specifications: n/a     Final (100%) Plans and Specifications: n/a     Construction Commencement Date: n/a

1







  Construction Work Completion Date: n/a     Renovation Commencement Date: The Effective Date     Renovation Work Completion Date: In accordance with the attached PIP     Expiration Date: at midnight on the last day of the month fifteen (15) years from the Effective Date     Monthly Fees:   Monthly Program Fee: Four percent (4%) of the Hotel's Gross Rooms Revenue for the preceding calendar month. The Monthly Program Fee is subject to change by us. Any change may be established in the Standards, but the rate will not exceed the standard Monthly Program Fee as of the Effective Date plus one percent (1%) of the Hotel's Gross Rooms Revenue during the Term     Monthly Royalty Fee: Five percent (5%) of the Hotel's Gross Rooms   Revenue for the preceding calendar month   Additional Requirements/Special Provisions:   ·  The parties acknowledge that the Hotel is an existing System Hotel that was authorized to open under the Brand before the Effective Date.   ·  Obligations of Prior Franchisee. You acknowledge and agree that you are directly responsible for, and will pay on demand, all fees and charges due and owing us and the Entities related to the prior franchise agreement for the Hotel if any such fees and charges remain outstanding as of or accrue after the Effective Date of this Agreement.   ·  Section 1, Definitions of Opening Date and Publicly Traded Equity Interest: Modified   ·  Subsection 5.1.25: Modified   ·  Subsection 8.1: Modified   ·  Subsection 11.2.1: Modified   ·  Subsections 14.4.1.1. and 14.4.1.3: Modified   ·  Section 19 - Acknowledgment of Exemption: Intentionally Deleted   Your Ownership Structure: See Attached Schedule 1   Ownership Structure of Affiliate Fee Owner or Lessor/Sublessor of the Hotel or Hotel Site: See Attached Schedule 2

2







    IN WITNESS WHEREOF, the Parties have executed this Agreement, which has been entered into and is effective as of the Effective Date set forth above.   FRANCHISEE:   FRANCHISOR:       ARC HOSPITALITY TRS STRATFORD LLC,  a Delaware limited liability corn an   HOMEWOOD SUITES FRANCHISE LLC,  a Delaware limited liability company           By: /s/ Jesse C. Galloway   By: /s/ James Holthouser           Name: Jesse C. Galloway   Name: James Holthouser   Authorized Signatory     Authorized Signatory           Title:         Executed on: 3/14/14   Executed on: ( Lir

1







  NEW YORK ADDENDUM TO FRANCHISE AGREEMENT   Notwithstanding anything to the contrary set forth in the Franchise Disclosure Document or Franchise Agreement, the following provisions will supersede and apply to all franchises offered and sold under the laws of the State of New York:   1. Subsection 9.6 of the Franchise Agreement requiring you to consent to the entry of an injunction is amended to provide that you consent to the seeking of such an injunction.   2. Subsection 17.8 is amended to provide that no release language set forth in the Franchise Agreement will relieve Franchisor or any other person, directly or indirectly, from liability imposed by the laws of the State of New York concerning franchising.   FRANCHISEE: FRANCHISOR:     ARC HOSPITALITY TRS STRATFORD,  LLC, a Delaware limited liability company HOMEWOOD SUITES FRANCHISE LLC, a Delaware limited liability company     By: Name: Title: Executed on:           By: /s/ Jesse C. Galloway   By:           Name: Jesse C. Galloway   Name:           Title: Authorised Signatory   Title:  Authorized Signatory             3/i4/11 4

1







  NEW YORK ADDENDUM TO FRANCHISE AGREEMENT   Notwithstanding anything to the contrary set forth In the Franchise Disclosure Document or Franchise Agreement, the following provisions will supersede and apply to all franchises offered and sold under the laws of the State of New York:   1. Subsection 9.6 of the Franchise Agreement requiring you to consent to the entry of an Injunction is amended to provide that you consent to the seeking of such an injunction.   2. Subsection 17.8 is amended to provide that no release language set forth in the Franchise Agreement will relieve Franchisor or any other person, directly or indirectly, from liability imposed by the laws of the State of New York concerning franchising.   FRANCHISEE: FRANCHISOR:     ARC HOSPITALITY TRS STRATFORD, LLC, a Delaware limited liability company HOMEWOO a Delawar UITES FRANCHISE LLC, II. Nifty company   By:     By: /s/ James Holthouser           Name:     Name: James Holthouser       Title:   Title: Authorized Signatory   Executed on:











  EXHIBIT A PRODUCT IMPROVEMENT PLAN   Product Improvement Plan   Prepared for: Homewood Suites by Hilton Stratford, CT (InnCotle: BORCT, Facility ED:41017)   6905 Main Street, Stratford, Connecticut, United States   To be relicensed as a Homewood Suites by Hilton   HOMEWOOD SUITES — maim.   By Kenneth-Savage   Inspection Date: Jan4-872013 FINAL PIP REVISION DATE-. Sep-08-2013 by Roy Johnson   BrataManauement Approval   Final PIP Approval Date : Sep-08-2013   Final FLA PIP Approval Signature: /s/ [ILLEGIBLE]   PIP Contact   Corinne Hight Email: Corinne.hight@hilton.com Phone: 901-374-6044









  EXHIBIT A - PRODUCT IMPROVEMENT PLAN   Property Information   Open Date: 2005-02-14 Last Renovation: 2009: Corridor, Lodge and Suite carpet Parking: Asphalt surface parking lot Whirlpool: Indoor Airport Van: None Number Floors: 3 Food Service Facilities: Pantry Meeting Space: 4000 sq ft 2 Meeting Rooms Business Center: Yes Exercise Room: Yes. Precor renovated @ 235 sq ft Other Recreation: None Retail Outlets: None Guest Laundry: Yes Number Of Guest Rooms: 135 Guest Room Size Parlor: 20'7' X 14'5 Guest Room Mix:   Typical King: 52 Typical DID: 59     Guest Bathroom:   Size: 80' X 7'10 Door Width: 36' Tub Surround: acrylic one-piece unit Floor: 4 X 4 ceramic tile ' Vanity: Wood-front base with granitetop, Water Closet: Tank-type'. elongated .b6w1 with open-front seats     HVAC System:   100% Makeup Air: ,.- Yes Public Areas: Packaged units Guestrooms: VrA Cs tiyithOgital thermostats     Elevators:       High Speed Internet:   Public Areas: AT&T Meeting Space: - AT&T Guestrooms: AT&T     Telephone System:









  EXHIBIT A - PRODUCT IMPROVEMENT PLAN   PLEASE NOTE: Key information about the terms and effectiveness of this Property Improvement Plan is set out at the end of the document.   General   #   Active Date   Scope of Work   Finish Date                       Notice to owner. All hotels must comply with applicable local, state, and federal accessibility requirements. This PIP does not necessarily include any work that may be required for compliance with Title 111 of the Americans with Disabilities Act (ADA). lit addition, if a Franchise Agreement or a Management Agreement for a hotel constructed for first occupancy after January 26th 1993 is executed after March 30th 2011 Hilton Worldwide will require the owmrr to conduct a self-survey (provided by Hilton Worldwide) of the hotel's guestrooms and parting for compliance with ADA Title III requirements. Any areas of non-compliance will need to be addressed within five to seven years (dependi on the item in question) as a condition of the franchise or management agreeMent.

  Per Brand Standards

  BRAND STANDARDS   #   Active Date   Scope of Work   Finish Date               1       40''113SIREISITz;     2       2502.00- Brand Standard - Take Flight - Homewood Suites `:Hilton has developed a comprehensive hotel refresh concept called 'Tat:C....Plight A Style Guide will be available in August 2013. Take Flight impacts iteritS such as the front entrance; interior sigrrage; FT&B, lighting, flooring and wall finishesin the lobby and lodge including the front desk-4114e shop, and business tenter layout and design; outdoor- kitchen, (pool, patih.:.And gritting areas)„headboards, back lit vanity mina, and other cosmetic updates the suites. Details will be posted on wwwhiltonworldwide.conu'design as they beCpme available. A certified and approved designer or design Finn ,BUST be &;i rutted and retained. For further information, please contact RoylOhnson

  12 Months

3       Brand Standard- D.,„igrirevi6W Strbini.ttals are cg.-for all replacements and new products prior to purchase and installation Addition to any binders, fabrics, etc., an electronic copy (via a noh- retiirnabl:CD) is required. Contact rsigitreview@hiltonsom for filither inforination.

  180 Days

4       Support Rules - Hotel smut net inslalllile-over-tile in any areas of the hotel. Old tile must be completely reihoved b.)fore new tile in installed-   Per Brand Standards 5       Support Rule.5:11eitel iiiiiandt:install wall vinyl over existing wall vinyl in any areaof the hotel. Old wall vind must be completely removed before new wall vinA:is installed...   Per Brand Standards 6       Suppoitrgules - All hotels undergoing a change of ownership or license renewal PIP will tie required to 'complete a one-time revenue management consultation and analysis.   12 Months

        Th1sis a fee bid service and will be performed by the Revenue Management 01,irsolidation Center. For additiorml details contact RMCCinfoOlton_com

7       P4Q5.02 Public Area Recycling - Each floor, second floor and above, must have integrated and/or coordinating recycling station, including the trash receptacle, loc'ated near the ice/vendirg areas. If space is limited, relocation to elevator lobby is Omitted, Required by 12/31/13 per Brand Standards

  Per Brand Standards

8       902.00 — In-suite Recycling - Provide a decorative in-suite recycling container at / near the work surface in each suite. The designated recycling container must be a t lqt container minimum_ If trash can is offered at the work surface, the recycling and trash can must match. Blue recycling containers are prohibited. Required by 12/31/13 per Brand Standards

  Per Brand Standards

9       504.03 - Interior Signage - Replace all existing interior, pool, and sport court signage. Install new brand required signage package. (Refer to the Take Flight Design Guide.)   12 Months

10       2500.00 - This document was updated 09/0812013 with the latest Brand Initiatives and with any applicable items from the latest Quality Assurance visit dated arest2013   12 Months











  EXHIBIT A - PRODUCT IMPROVEMENT PLAN   11       902.02 Brand Standard - Top of Bed - The Homewood Suites brand is currently launching a turn-key, bed skirt & coverlet program that is requried brand-wide. All hotels across the brand are required to convert to the approved program (50% of inventory in 2013; remaining 50% in 2014).

  Per Brand tandards

12       2505.02 Take Plight — Public Space - All Take Flight elements in the public area must occur at once; they cannot beadded individually overtime. Refer to the Take Flight Design Guide for information on design intent and design requirements

  12 Months

  COMMERCIAL FACILITIES   #   Active Date   Scope of Work   Finish Date               13       2514.03 D - Offices - Replace all carpet (wont/discolored). Install new carpet and carpet pad. Vinyl base is acceptable in areas that cannot be viewed by guests.   12 Months

14       2513.01 B - Offices - Provide door viewer at the main office door entry.   12 Months 15       2513.01 B - Offices - Provide key-punch lock at the main office door entry.   17. Nlonths 16       2509.03 A - Corridors - Replace all corridor carpet and carpet pad Onafted,w env.. Install new 6 wood or 4 carpet base.   24 Months

17       2509.03 A - Corridors - Replace all stairwell carpet and carpet pad (matterlAvorn)Install new 4' carpet base.   12 Months

18       2514.03 A - Corridors - Replace all corridor tile; both at eleVaterlandingiand at , all first floor secondary entrances into the Lodge and Suites(s)corridors. Milan/ new 18' X 18' (minimum) decorative file flooring and 6litiatching base. Rectangular shaped tile is acceptable (plank shaped and no snialler than 3 X'24 and no larger than 9' X 36.

  12 Months

19       2500.00 - Corridors - Replace entrance doors to Pool Area. Ensue both sets of entrance doors are in a like-new condition   12 Months

20       2509.00 - Corridors - Install solid surfa0material or granite window sills.   12 Months 21       2509.03 - Corridors - Continue repairs to-3rd floor corrid6t ceilings. Ensure all ceilings have a consistent appearance.'''-/-..-

22       2509.03 A - Corridors - Replace all dantagecliscaried door hardware at secondary   12 Months       entrances into building.-     23       2500.00 - Elevators -,Refinish 6xtc der doers of elevators to remove scarring. All doors are to be41, likemee, coridilion 9r replaced.   12 Months

24 '       2509.03 Corridor' window treatmant - Replace window treatment with operable sheers and decorative rod and hard vane. Sheers mast be pleated or rippled to double fulinev,,,-.:   12 Months

25       2502402.1. Great Roorn/Lodge - Replace all carpet and carpet pad. (Note: flooring:Orid floorifighaositions will b impacted by Take Flight)   12 Months

26       2599.03 —1421iy/Loclge window treatment - Replace window treatment with operable shell-tiaddecorath'e rod and hardware. Sheers must be pleated or rippled to double 'fullness   12 Months

27       -:::2502.02 - Lobby/Lodge Flooring - Install the flooring in front of the fireplace, at the.frod desk, in the suite shop, and in the pantry. Install carpet/pad in the lodge (cliaing.and lounge zones) and home office. (Refer to the Take Flight Design Guide for flooring transitions.)

  12 Months

28       2502,04 - Front Desk - Install a stand-alone, pod, or open ended front desk with ADA shelf. Remove duck art and install a decorative back-wall panel systems]. Match hie flooring with suite shop and lobby (Refer to the Take Flight Design Guide)

  12 Months

29       2502.02 Lodge - Implement the fake Flight lobby and lodge concept by installing natural finish accents and prescribed furnishings to create the connect, dining, and lounge zones.Take Flight also includes the front desk, suite shop, pantry, integrated trashirecycle/busqng, home office, front porch, and outdoor _kitchen areas, (Refer to the Take Flight Design Guide)

  12 Months











  EXHIBIT A — PRODUCT IMPROVEMENT PLAN   30       2502.02 - Lobby/Lodge Furniture — In the lobby, install the curved sofa and elliptical rug. In the Lodge, outfit the dining area with tables and chairs of different styles, finishes, and heights. Include the signature wing table and pendants in the dining zone.Install the two-sided sectional and lighting to help define the separation between the dining and lounge zone. On the lounge side, outfit with tea- height tables and lounge chairs. Incorporate conxr banquette(s) with pendant lighting. (Refer to the Take Flight Design Guide

  12 Months

31       2501.00 - Exterior - Paint exterior with accent oclor(s) as outlined in the Exterior Design Guidelines (posted on www,hiltonworldwi&conitdesign) .   12 Months

32       2501.02 F - Landscape - Add special landscaping or fencing to screen out transformers, gas meters, HVAC units etc., from guest view without hindering operation or routine maintenance.   12 Months

33       2500.00 - Parking Lot - Repair any cracked/damaged areas in the parking lot. Re-seal and re-stripe the parking lot.   12 Months

34       2513.09 C - Exterior - Install painted steel pipe bollards around the container to prevent damage to walls.  12 Months 35       2500.00 Exterior - Ensure that all building sigrrage is updated to the current Homewood standards. 'Hilton. trademark sign is required on all building-mounted signage.   12 Months

36       2513.09 —Trash collection Area- If existing trash collectionfdompstel- enclostire cannot a cconrinothte recycling bins, the dampster and clumpster pad 'Must be enlarged to accommodate the additional NUS,.

  12 Months

37       2501.04.D — Exterior - Secondary Entrances - Upgrade secondary entrances to include a covered area that matches the building andfor poste coeliere in des; ' t and finish. Install upscale decorative lighting, along with.' a decoratiVe/upsc trash and ash receptacle similar to the main entry.Rker`to the Eakferior Design Guidelines and Take Flight Design Guidelines

  12 :Months -

38       2501.05. Exterior - Front Entrance / Front Porch.. a. Provide ceiling recrossed cans and decorative upscale ivaIliconates b. Provide outdoor seating for two minim:int, adjacent to the prinuaiy entrance. Seating fabrication and style must be similar to the lodge patioseating; park benches are not allowed.ir- :H:,::::!„,.r. e. Provide a decorative combo trash, recieling, and ash reeeptade at the main entrance. The unit must include a hood to piaatect trash from weather. Refer to the Take Flight Design Guide for design intent.—.:: ,..2. d. Provide three decorative plardOs e.: varying sizes (2501.02)

  12 Months

39       2501,04 —Exterior - Building Finish ,,:ladd secondary finish to the exterior as outlined in the Exterior Design guir',31'F,Xteritif building finish must be a combination of two Or more of tly.-rollowini materials: HIES & brick; EIFS & Stone; or stone and litelc. Re feu IO: I he Exterior Design Guidelines

  12 Months

40       2507,00 -Bu ,: ' s Center '; Provide all components of the Global Business Center Solution.   Dee-31-2013 41       2507.05A - BmAriessCenter - Install 6 decorative wood base to match the wood base inlhe lobby.''.. :-   12 Months 42       2547.05 Al`130.sinest: Center - Replace cabinets and countertops New wall and ba se.cabinets inust be funrihtre quality with all exposed surfaces made of wood. IX.-.Sk lop must be Intl:nal or engineered stone or better and 30 above the finished floor. Upper cabinets must be provided for supply storage. Under cabinet lighting is required. Note: This area will be impacted by 'Take Flight.

  12 Months

43       2514.03 - Guest Laundry - Replace the floor tile. Install new 18' x 18 (tnirilmurn) decorative tile flooring and matching 6 base. Rectangular gaped tile is acceptable (plank shaped and no smaller than 3 x 24 and no larger than 9 x 36').

  12 Months

44       2500.00 - Guest Laundry - Install an electronic entry loch. The deadbolt function must be disabled.   12 Months 45       2506.02 G Guest Laundry - Install a minimum 36 x 22 innnan,ent counter with12             a laminate top 34 triaminum above the finished floor. Provide two stools or chairs as seatarg.   Months 46       2506.02 F - Guest Laundry - Install vinyl wall covering.12   Months 47       2506.02 I - Guest Laundry - Conceal all electrical and plumbirg connections 12 behind the connected equipment. (Remove lattice panel)   Months

48       2503.00 F - Public Restrootns - Remove the combination paper towel dispenser 12 and waste receptacle recsed into tire wall. Install an automated touch-less paper dispenser and a free-standing decorative trash receptacle.

  Months











  EXHIBIT A - PRODUCT IMPROVEMENT PLAN   49       2514.03 A - Public Restrooms - Replace the floor tile. Install new 18 x 18' (minimtun) decorative tile flooring and matching 6 base. Rectangular shaped tile is acceptable (plank shaped and no smaller than 3 x 24 and no larger than 9 x 36').

  12 Months

50       250100 D - Public Restrooms - Replace all vinyl wall covering and wall tile. Ceramic, porcelain, or stone the at fall height is required at wet/phunbing walls.   12 Months

51       2503.00 E - Public Restrooms - (Pool Area) - Replace all msted/corroded chrome fixtures in restrooms.   12 Months 52       2506.01 Suite Shop - Install granite on all display counters. This area will be impacted by Take Flight'.   12 Months 53       2514.03 A - Suite Shop - Replace the floor tile. Install new 18' x 18 (minimum) decorative tile flooring and matching 6 base. Rectangular shaped tile is acceptable (plank shaped and no smaller than 3 x 24 and no larger than 9' x 36). Note: This area will be impacted by 'Take Flight.

  12 Months

54       2506.01 E - Suite Shop - Install vinyl wall covering.   12 Months 55       2506.01 — Suite Shop—Install the 'Take Flight suite shop b openim up the space to the front desk/lobby, flooring, accent wall vinyl, updated millwork, focal table w/pridant, refrigeration units and graphics. (Refer to the Take Flight Design



        Guide).' .   12 Months 56       2503.00 — Public Restrooms —Provide commercial grade faucets that are. , touchless. All faucets must be plated brass with replaceable cartridges,` and: ::,.....

        manufaetured by nationally lorown manufacturers. All fixtures inusehe lcm-110iv.            ...-.             type   12 Months 57       2507.05 - Busimiss Center - Implement the 'Take Flight home office -e-Once]il.             (Open tip the apace —removing door and partial wall, install'riattatation7 printer             FCIlinsula w/pendant, decorative panel/divider, accent wall vinyl .,0.1 tura sting :::::             flooring, etc. Refer to the Take Flight Design Guido);` -,:r. -,r,!:.1   12 Months i,.'         .., —.....,—.     55       2504.05 H - Pantry - Replace the breakfast area countertops. InstalTgratiita at the             countertops at the cabinets and island.,..,:,             Ice wells must be built-in. Note: This area will be impacted by Take Flight'.   12 Months 59       254405 K - Pantry - Replace the breakfast area cabinets' Install new decorative millwork base and wall cabinets. New cabinets must incorporate under-cabinet lighting as well as accent lighting in upper Cabinets withglass doors. All cabinet lighting must be on a dedicated, switch.

  12 Months

60       2504.05 0- Pantry - Replace thetile, Install iiew 18 x 18 (minimum)             decorative tile flooring and ntitchini.071aase,_ReCtangular shaped his is acceptable (plank shaped and nii,smaller than.3. x.24 and no larger than 9 x 36). Note: This aria will la impacted by rTake Flight.

  12 Months

61       2504.06 - Pantry - CoOidinale/update pantry serving area finishes with updated Take Flight lodge renctroninelgding updates such as pendant over island. (Refer tothel4e flight Dkrign Gifide)   12 Months

              62       ; J:17,1toardroorn - provide a remanent conference table to seat a minimum I.-opt:ix Table ftilistliave an electrical power source, telephone outlet, and AV conneetiOns in potrup boxes on the top of the table.

  12 Months

63       2507.03 - Badfdt66rn - Provide, a built-in buffet counter, 48x24 ntininnun;   12 Months 64       247.63 - Boddroom - Provide artwork appropriate for space available.   12 Months 65       2547.03 - Boardroom - provide a ceiling recessed, electronically operated screen. Controls must be near the lighting controls.   12 Months

66       250,03 - Boardroom - Provide a 52 well mounted flat panel TV with connectivity to a MATV system and to boardroom table connection.   12 Months

67       2507.03 - Board room - Replace Nvalll vinyl. The vinyl is damaged at the windows. Repair all moisture damage and eliminate source.   12 Months

              68       2543.07 A - Activity Court - Install an activity court or alternative recreational feature approved by the brand. This is a required facility.   12 Months

69       2508.03 P - Pool Area - A saline-based generator system must be used for swimming pool water pitrification. The system must comply with all loc-al codes and meet all local health department regulatiorn. The system must be NSF-54 and ULt 031 tested and certified (or the equivalent) and sized as per Loral and State Department of Environmental Health guidelines.

  12 Months

70       2501.03 3- Rear Porch/Patio - Provide a mirinium of Iwo outdoor gas or charcoal grills (Outdoor kiitchen will be part of Take Flight').12 Months   12 Months











  EXHIBIT A - PRODUCT IMPROVEMENT PLAN   #   Active Date   Scope of Work   Finish Date 71       2501.03 Outdoor Patio/Kitchen - Implement the Take Flight- outdoor kitchen concept (Island `v/stainless steel grills and upscale seating, pergola, string S4, sconce lighting, upscale lounge seating with removable cushions, upscale decorative outdoor trash container, Wi-Fi, music, outdoor planters, etc. Refer to the Take Flight Design Guide.).

  12 Months

              72       2512.04 0 - Guest Bathrooms - Remove all existing acrylic tub/surround units. Provide cast iron, porcelain over steel, or Vikrell tubs as manufactured by Sterling. Install brand approved surrounds as outlined in Homewood Suites Brand Standards. The tub/shower surrounds must extend to the ceiling, coordinate with rarity color, and have a matte finish.

  12 Months

73       2512.04 I - Guest Bathrooms - Install closed front toilet seats.   12 Months 74       2512,02 A - Guest Bathrooms - Vanity area - install 12(minimum) ceramic floor tile and matching base. The floor tile most be the same as the bath area ttoor.tile.   1? Months

75       2514.03 A - Guest Bathrooms —Replace all floor tile. Install new decorative.   12 Months       porcelain fluor tile and matching base. Floor tile must be 12 iniritmiin.   76       2500.00 - Guest Bathrooms - Replace brass door hardware on the bath side of the; entry door. Install hardware to match the chronic or satinflxhires intlLial ft area. Exterior door hardware mast match entry door hardware. .

  12 Months

77       2512.09 C - Guest Bathrooms - Provide a single prong chrome towel hook to be,/:             mounted in close proximity to the tub/shower.:.-.. -.   12 Months 78       2512.02 B - Guest Bathrooms - Replace all vinyl wall covering.   12 Months 79       2500.00 - Install drawer and door hardware (pulls and }mobs) on vanity, baseca binet.   12 Months ..           80       2500.00 - Bathroom Storage - remove per labile, wire basket storage units. Provide vanity base or other built-intorage unit that is upscale in presentation.   12 Months

81       2512.06 - Guest Bathrooms — Vanity Mirror- Install bark—lit mirror over vanity sink. (Take Flight)   12 Months               82       2500.00 - Guest Bedrooms - Replace all Carpet, carpet pad, and carpet base.Months   12 Months               83       2510.00 - Guest Bediooms - Replae&all case goods.12 Months     84       Std 2510.05.B -Bed bases mush be 7 1/2' high. Replace current bed bases to neestandards   12 Months 85       2510.02 KGpest Bedrooms., Install metal stops at all windows to ensure no more than 47,6petiirg of WiridoWis allowed.   12 Months

86       251,0102 K - Gitest Bedrooms - Install solid surface material or granite window     S:,       12 Months     87       15] 0,06 1.3.:Gu&st BedoSoms - Replace all artwork.   12 Months 88       2 '!n]'',..00 - Chtest Bedrooms - Upgrade all window treatments; ensuring valance,             she'ers, black-Opt panels and stationary side pawls are in place. , 12 Months 89       2510.06 D - Girest Bedroom - Ceiling fans (hugger-type) are required in the bedrooms of all Suites and Studio Suites, Fans must be controlled by a wall Aritch. ;Pull chains are not allowed.   12 Months

90       2510.06 C - Guest Bedrooms - Replace lighting package. Install a new Holiwood approved lighting package. (To include beveled switches and electrical outlets).   12 Months

91       2510.06 - Guest Bedroom — Headboard - Install fake Flight upholstered headboard.   12 Months 92       2510.03 Guest Bedroom - Headboard Well - install tonal accent wall vinyl headboard -wall. Bold or bright colors are not accept abel for the headboard accent wall.   12 Months

        2510.03 D- Guest Kitchens - Install 1 2x12 tile, or plank tile. Install wood or tile base to snatch.   12 Months 94       2510.10 - Kitchen - Replace kitchen chairs.   12 Months 95       2510.03 E - Kitchens - Install IleV7wall vinyl in litchenlareakfast counter area.   12 Months









  EXHIBIT A - PRODUCT IMPROVEMENT PLAN           2510.10 D - Guest Kitchens - Replace all mismatched appliances. Microwave, refrigerator and dishwasher must be stainless steel. Cooktop must be black or stainless steel. All appliance must be Energy Star rated_

  12 Months

97       2500 00 - Gust Kitchens - add pulls and knobs to kitchen cabinetry.   12 11 onths 98       2510.06.D. - Guest Kitchens - Pendant Light - install decorative pendant over -tater' table   12 Months 49       2510,03.B. - Guest Kitchens - Accent wall - install tonal accent wall vinyl in kitchen   12 Months         LI lattagAIM     100       2510.03 E - Guest Parlors - Replace all carpet carpet pad, and carpet base.   24 Months 101       2510.02 K - Gust Parlors - Install solid surface material or granite window sills.   12 Months 102       2500.00 Gust Parlors - Install metal stop° at all windows to ensure no more than 4 window opening is allowed.   12 Months

103       2500.00 Guest Parlors - Remove silk plants form suites. (No longer required per 2012 standards).   12 Months 104       2515.00 - Guest Parlors - Upgrade all window treatments to include a valance, sheers, black-out panels and stationary panels are lupine.   12 Months

105       2510.00 - Guest Parlors - Replace all case goods.   12 Months 106       2510.06 C- Guest Parlors - Replace lighting package. Install a new voltII             lighting package.   12 Months 107       2510.01 - Guest suites - Provide cover plates (gmstroorn side) ter entrance door viewers   12 Months 108       2510.01 C - Guest Parlors - Install an approved auxiliary lock on all connecting     doors..      12 Morals     109       2510.06.A. - Glit Parlors—Cocktail Ottoman - Replace coffee table. Install:an upholstered cocktail ottoman with a wrap-over parsons table • . •   12 Months

110       2510.00 - Parlors - Replace all seating (fabric worn and discolored)°   12 Months   The improvements identified in this property improvement plan (PIP) relevant to the brand specified on the cover page of this PIP (Brand) ar,e,based on,tonditions at the hotel existing on the Inspection Date specified on the cover page of thiS PIP (InSpection Date). This PIP and any specified waivers of relevant brand standards are only'effeclive for the purpose of incorporation by reference into a fully executed and datetliagreement relat ing to the implementation of the PIP (Relevant Agreement) With the affiliate'Oititf:Or'Ililton Worldwide, Inc. that is party to such Relevant Agreement (Hilton), if _such RelOrAitt Agreement is entered into within 180 calendar days of the Inspection Date. In the 'event that aRelevant Agreement is not entered into within 180 calendar clays of the Inspection Date;-,an updated PIP may be required (in Hilton's absolute discretion). The preparatiort:andtor supply of this PIP shall not obligate Hilton (or any affiliate of Hilton) to en ter into anyeReleV:Mt Agreeinent (including, but not limited to, a franchise agreement or a management agreeinent). , This PIP review islimitato,aesthette and functional layout and design, and certain functional, operational and, qual ity criteilaas/sPecified by Hilton. It does not encompass, and Hilton does not make any repreSentiitien or Wiri.anty as to, nor shall Hilton be responsible for, the architectural, structural, thedianical, 'or electrical adequacy, accessibility requirements or other compliance with applicable government or other legal reqUirements. Compliance is required with brand standards (including4he..fire safety and security equipment standards specified by Hilton), all applicable local, state shish federal building codes, any legally mandated accessibility requirements anti all other legal requirements. Accordingly, Hilton recommends that its eennterparty(ies) engage an appropriate professional team and legal counsel to advise on such compliance. Any omission in this PIP report does not constitute a waiver of such requirements and does not release any obligation in any Relevant Agreement to conform to brand standards. Nothing in this PIP is intended to modify the terms of any Relevant Agreement to which it may be attached and/or incorporated by reference. In the event of any conflict of the terms, the terms of the Relevant Agreement are the terms that prevail.   The works set out in this PIP are required to be completed by the specified Finish Date, All Finish Dates that are a specified number of months or days shall mean the number of months or days from the date of the Relevant Agreement into which the PIP is incorporated by reference. 
Question: Highlight the parts (if any) of this contract related to Covenant Not To Sue that should be reviewed by a lawyer. Details: Is a party restricted from contesting the validity of the counterparty’s ownership of intellectual property or otherwise bringing a claim against the counterparty for matters unrelated to the contract?

SOLUTION: 14.2.7 you contest in any court or proceeding our ownership of the System or any part of the System or the validity of any of the Marks;

PROBLEM: Exhibit 10.5

Reseller Agreement

This Agreement is made and entered into by and between 695014 B.C. Ltd. dba Galaxy Telecom, having a principal office at 200 - 375 Water Street, Vancouver, British Columbia V6B 5C6 Canada (Galaxy) and Galaxy Telnet SRL, having a principal office at Aleea Malinului, Nr. 11, Bl. D, Scara C, Apt. 43, Constanta, Judetul Constanta, Romania (Telnet) as of the 1s t day of June, 2004.

WHEREAS: Galaxy is a wholesale provider of Voice over Internet Protocol (VoIP) telephony and related services and products. Telnet is a provider of VoIP telephony and related services and products to Subscribers, as defined hereafter. Galaxy wishes to provide to Telnet and Telnet wishes to acquire from Galaxy VOIP related services and products from time to time for the purpose of providing them to Telnet's existing and future clients. NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the Parties, the Parties covenant and agree with each other as follows: 1. DEFINITIONS AND INTERPRETATION 1.1 Definitions In this agreement unless the context otherwise requires: Agreement means this agreement; Confidential Information means all information which one of the Parties will have access to or come into possession of which is confidential and proprietary to the other Party and which is either declared to be confidential or which the receiving Party should know, acting reasonably, is confidential or proprietary in nature and includes, but is not limited to, the terms and pricing for the Products and Services, all information contained on or accessible through the Partner Portal, as defined hereafter, any information disclosed by any third party which the third party is obligated to treat as confidential or proprietary to one of the Parties hereto, trade secrets, know-how, processes, standards, product specifications, marketing plans and techniques, cost and financial pricing figures, all client or customer information (including without limitation their names, financial information, address or telephone number), all systems software applications, all software/systems source and object code, data, documentation, program files, flow charts, and all operational procedures. Effective Date means the date first written above; Force Majeure shall include but not be limited to an Act of God, strike, lockout, labour dispute, act of a public enemy, war whether declared or undeclared, blockade, revolution, riot, insurrection, civil commotion, lightning, fire storms, flood, or other natural calamities, explosion, governmental restraint or restrictions, laws, regulations, orders, proclamations of any governmental entities, judgement or orders of any court of law, embargoes, unavailability of equipment and any other cause (other than a shortage or unavailability of funds) which is not reasonably within the control of the Party whose performance under this Agreement is affected by the cause; Partner Portal means Galaxy's web-based VoIP subscriber, management and business administration system; Party means either Galaxy or Telnet as is appropriate in context and Parties means both or either of Galaxy and Telnet as is appropriate in context; Product means one of and Products means some or all of the VoIP related devices offered for sale by Galaxy; Service means one of and Services means some or all of the VoIP services as listed in Schedule A attached hereto; Subscriber means a client of Telnet who is a consumer of the Products or Services as provided by Galaxy and sold by Telnet. 1.2 Currency All references to currency, unless otherwise specified, are to lawful money of the United States. 1.3 Headings The division of this Agreement into articles, sections, and/or subsections and the provision of headings for all or any of them are for convenience of reference only and shall not affect the interpretation of this Agreement. 1.4 Schedules The following schedules are attached to and form part of this Agreement: Schedule A Services and Products and Pricing Schedule B Tier 1 Subscriber Support





Schedule C Subscriber Contract Clauses Whenever any provision of any schedule to this Agreement conflicts with any provision in the body of this Agreement, the provision in the body of this Agreement shall prevail. References herein to a schedule shall mean a schedule of this Agreement. Reference in any schedule of this Agreement to an agreement shall mean this Agreement. 1.5 Usage In this Agreement, unless there is something in the subject matter or context inconsistent therewith: words importing the singular shall include the plural and vice versa; and words importing gender shall include masculine, feminine and neuter genders. 1.6 Governing Law This Agreement shall be governed by and construed in accordance with the laws of the Province of British Columbia and the federal laws of Canada applicable therein, excluding its conflict-of-laws rules. The parties expressly disclaim the application of the United Nations' Uniform Convention for the Sale of Goods convention, to this Agreement.

2. RELATIONSHIP OF THE PARTIES 2.1 Non-Exclusive Reseller Subject to the terms and conditions of this Agreement, Galaxy hereby appoints Telnet as a non-exclusive authorized reseller of the Products and Services and Telnet hereby accepts the appointment. 2.2 Not a Partnership This Agreement does not and shall not be construed to create a partnership, joint venture, agency or any other business relationship which would authorize either Party to act on behalf of the other or to have any authority to create any liability or obligations on behalf of or in the name of the other. Each of the Parties is and will remain completely independent of the other. Telnet may indicate to the public that it is an authorized seller of Galaxy Services and it may advertise Products and Services under Galaxy trademarks, logos, and symbols as provided for in this Agreement, but under no circumstances shall it represent itself to be an associate, franchisee, representative, servant or agent of Galaxy.

3. TELNET OBLIGATIONS 3.1 Marketing and Sales Telnet shall be responsible for promoting, marketing and selling those Products and Services it offers for sale or distribution and it shall use its reasonable best efforts to do so; Telnet may market and sell the Services as being Telnet services or as Galaxy services being provided by Telnet. 3.2 Business Expenses Telnet shall be responsible for all expenses it incurs from its business activities associated with the marketing, promotion, sale and support of the Products and Services, including, but not limited to, those expenses related to the installation and activation of Products and Services. 3.3 Pricing Structure & Levels Telnet shall, in its sole discretion, set the prices it charges for the Products and Services it sells or distributes and the manner, if any, in which it bundles or combines them. 3.4 Qualified Sales and Marketing Representatives Telnet covenants that all of its employees, agents and representatives who promote, market and sell the Products and Services will be fully qualified in and knowledgeable of the Products and Services. 3.5 Terms of Service Telnet shall include those terms set out in Schedule C as a term in each Subscriber agreement for Services. 3.6 Subscriber Support Telnet shall maintain a first line of response, known within the telephony industry as a Tier 1 Subscriber help-desk and support function, as further defined in Schedule B, as is required to maintain Subscriber satisfaction at or above industry standards. 3.7 Government Authorizations Telnet shall obtain and maintain in good standing all licenses, permits and other governmental approvals and authorizations required in connection with implementation of this Agreement and the sale of Products and Services, including without limitation, business licenses, import licenses and foreign exchange permits. Telnet shall keep Galaxy apprised of any change in the status of the licenses, permits and approvals and authorizations as are referred to in subsection 3.7(a) which may materially affect the implementation of this Agreement. 3.8 Notification of Infringement Telnet shall notify Galaxy immediately of any actual, suspected or alleged infringement of Galaxy trademarks, or copyrights that it





becomes aware of.

4. TELNET RECORDS 4.1 Maintain Records Telnet shall maintain complete and, to the best of its ability, accurate records on the Partner Portal (the Records) of all Subscribers, including: (a) Name, location, contact information and date of activation; (b) Products purchased, including model and serial number and date of activation; (c) Services subscribed; including date of activation; and All service calls relating to Products or Services, showing Subscriber information, date and nature of call, Telnet response, service work performed and such other information as Galaxy may reasonably request. 4.2 Ownership and Privacy of Records Galaxy shall own the Records, but it shall use the information contained therein only as allowed by the terms and conditions and intent of this Agreement. Galaxy shall treat the Records as Confidential Information and it shall not provide to or allow access by any third party except as required or allowed by this Agreement. 4.3 911 Call Response Service Galaxy shall have the right to disclose Records to any third party providing emergency call response service to Subscribers as are required by such third party in order to provide the service.

5. GALAXY RESPONSIBILITIES Services and Products Subject to the terms and conditions of this Agreement, Galaxy shall provide the Products and Services to Telnet. 5.2 Network Galaxy shall establish a Telnet account within the Partner Portal and, subject to the terms and conditions of this Agreement, it shall provide Telnet with access thereto. 5.3 Materials Galaxy shall provide Telnet with access to electronic copies of sales and technical materials, user manuals, installation manuals and brochures and catalogues relating to the Products and Services which Galaxy has electronic versions of and which it, in its absolute discretion, is of the opinion are relevant. 5.4 Supporting Information Galaxy shall make available to Telnet such technical and commercial information which Galaxy has or which comes into Galaxy's possession and which, in Galaxy's opinion, may be of assistance to Telnet in selling and supporting the Products and Services. 5.5 Tier 2 Support  Galaxy shall provide Tier 2 technical support to Telnet which would include assistance with any technical issues related to the Services and Products that could not be resolved by Telnet's Tier 1 Subscriber support personnel.

6. PRODUCTS 6.1 Approved Products Galaxy shall, at its sole discretion, determine the technical specifications and the brand and model of those devices which it will support in providing the Services and chooses to offer as Products; Telnet shall purchase from Galaxy all devices or Products used or to be used by it to enable the provisioning of the Services pursuant to this Agreement and Galaxy shall be required to support only those devices actually purchased from Galaxy by Telnet; Notwithstanding section 6.1(b), Telnet may request from Galaxy that it enable and support devices other than Products acquired by Telnet from Galaxy, and Galaxy shall not unreasonably refuse such request; and Galaxy shall have the right, at its sole discretion, to change the Products by discontinuing or adding new devices to the Products offered and by changing manufacturers, brands, models or technical or software specifications of any of them. 6.2 Pricing Prices for Products shall be as quoted at the time of order by Telnet and are subject to change at any time; Prices quoted shall be for the Products only and shall not include applicable taxes and shipping, insurance, expedition, import/export, brokerage and other fees, which shall be in addition to the quoted Product prices. 6.3 Ordering All Telnet orders of Products are subject to acceptance by Galaxy (upon acceptance, the Order). Galaxy shall have the right to not accept an order of Products from Telnet, in whole or in part, if Telnet is in breach of any term or condition of this Agreement;





Unless specifically agreed otherwise and stated in writing, the terms of this Agreement shall supersede the terms of any Order; 6.4 Payment Telnet shall pay (the Product Payment ) for an Order, using a payment method acceptable to Galaxy, prior to shipment of the Order by Galaxy; If Telnet falls into arrears on its account for Services, Galaxy shall have the right to apply any Product Payment, in whole or in part, to Telnet's account for Services and any Product Payment so transferred shall be deemed to be a payment for Services, not Products, and Galaxy shall have no further obligation to deliver the Products which such funds were originally payment for. 6.5 Delivery Galaxy shall, subject to availability, use all reasonable effort to deliver the Order within a reasonable time from the date of the Order; Galaxy shall have the right to suspend or stop delivery of an Order, in whole or in part, if Telnet is in breach of any of the terms and conditions of this Agreement, and, if Galaxy elects to stop delivery pursuant to this section, it shall deem such Order to be an inventory return subject to section 6.7. 6.6 Order Substitution Subject to obtaining Telnet's approval for any price changes, Galaxy shall have the right to deliver a different Product of equal or greater technical capability in place of the Order. 6.7 Inventory Returns Galaxy may, at its sole discretion, accept the return, in whole or in part, of an Order and, if it elects to do so, Telnet shall pay a restocking fee of 25% of the original purchase price of the returned Product or Products. 6.8 Warranty Unless specifically stated otherwise, Galaxy makes no warranty or guarantee, express or implied, including any implied warranty of merchantability or fitness for a particular purpose, with regard to the Products. All warranties with regard to the Products shall be those of the original equipment manufacturer only.

7. SERVICES 7.1 Available Services Listed in Schedule A is a list of the Services which are available to Telnet as of the Effective Date. 7.2 Change to Services Galaxy reserves the right to, at its sole discretion, to add, delete or change any of the Services from time to time. 7.3 Provision of Service Upon Telnet's activation of a Subscriber account, Galaxy shall, subject to the terms and conditions of this Agreement, provide the requested Services to Subscriber on behalf of Telnet; Subject to section 13.2, if Telnet is in breach of any of the terms and conditions of this Agreement, Galaxy shall have the right to suspend or terminate delivery of the Services, in whole or in part, to Telnet and the Subscribers. 7.4 Communication of Termination Galaxy may, at its sole and absolute discretion, provide long distance termination through one or more termination partners. Galaxy shall have the right, at its sole discretion, to reroute the communication traffic originating from Telnet or Subscribers between Galaxy's different termination partners. 7.5 411 and 911 Service Galaxy shall arrange with third parties for the provision of: 411 directory assistance service; and 911 emergency call response service, which services will be provided through Galaxy as part of the Services. 7.6 Prices The prices charged by Galaxy to Telnet for each of the Services (the Service Prices) shall be as listed in Schedule A; Galaxy shall have the right, but not the obligation, to: during the term of this Agreement, adjust any of the Service Prices by an amount that is proportionate with any changes to Galaxy's direct third party costs in providing the related Services; at the time of any renewal of this Agreement, adjust the Service Prices as it, in its absolute discretion, determines provided it has given written notice to Telnet of such price changes a minimum of 60 days in advance of the renewal. Prices for long distance termination shall be as posted on the Partner Portal and Telnet understands and agrees that, other than for those destinations noted in Schedule A as being fixed in price for the term of this Agreement, such prices are variable and subject





to change without notice. 7.7 Billing For Services Galaxy shall invoice Telnet once per month for the Services delivered, termination fees, 411 directory assistance and 911 emergency call service fees and any other fees or billings chargeable to Telnet; Galaxy shall deliver each invoice to Telnet's account in the Partner Portal; and Telnet shall give notice to Galaxy of all errors and inaccuracies in an invoice within 15 days of receipt by Telnet of the invoice at issue. Thereafter, Telnet will be deemed to have agreed with the accuracy of the invoice. 7.8 Payment of Services Invoice Telnet hereby covenants to pay all invoices rendered to its account by Galaxy within 15 days of the date of invoice; Interest shall accrue on overdue accounts at the rate of 1.5% per month calculated and payable from the date of invoice until the date of payment in full of the overdue amount. 7.9 Warranty Galaxy does not guarantee the integrity of data transmitted using the Products and Services or that the Products and Services will operate uninterrupted or error-free, including, without limitation, the degradation of voice transmission quality and the failure of an incoming or outgoing call, including emergency calls (911 or equivalent), to be connected or completed.

8. LIMITATION OF REMEDIES AND LIABILITY 8.1 Telnet's Exclusive Remedies  Telnet's sole and exclusive remedies concerning Galaxy's performance or non-performance in any matter related to this Agreement or the provisioning of the Services or Products are limited to those expressly stated in this Agreement. 8.2 Limitation of Galaxy Liability Galaxy shall have no liability to Telnet, whether in contract, tort (including negligence), strict liability or otherwise, for any special, indirect or consequential damages or for lost profits, in any matter related to this Agreement, including but not limited to any delay or failure by Galaxy to furnish, deliver or provide Products or Services; Galaxy's liability in any matter related to Product shall be limited to the purchase price paid by Telnet for the Product with respect to which such liability relates; Galaxy's liability in any matter related to Services shall be limited to the fee paid by Telnet for the Service with respect to which the liability relates in the month or months in which the event giving rise to the liability occurred. 8.3 Liability Upon Termination of Agreement Neither Party shall be liable to the other for any damages or compensation in connection with termination of this Agreement including, without limitation, for loss of profits, loss of investment or expenditures made in reliance on this Agreement or loss of goodwill. 8.4 Force Majeure  Neither party will be liable to the other for any delay or failure to perform if that delay or failure results from a cause beyond its reasonable control. 8.5 Telnet's Indemnity  Telnet agrees to indemnify Galaxy (and any business entity controlled by it, controlling it or under common control with it) and save them harmless from any claim made against any of them, directly or indirectly, by a Subscriber or resulting from: (i) any promise or commitment that Telnet may have made purportedly on Galaxy's behalf in violation of this Agreement; or (ii) from any breach by Telnet or Telnet's employees with respect to Telnet's obligations under this Agreement. 8.6 Limitation of Privacy  The Products and Services utilize, in whole or in part, the public Internet and third party networks to transmit voice and other communications. Galaxy shall not be liable to Telnet for any loss or damages caused by or related to a lack of privacy which may be experienced as a result of use of the Products and Services.

9. USE OF NAME, LOGOS, TRADEMARKS AND LICENSED MATERIALS 9.1 News Releases Neither Party will use the name of the other in any news release, public announcement, advertisement or other form of publicity, without the prior written consent of the other Party. 9.2 Ownership and Use of Galaxy Trade Marks Telnet acknowledges Galaxy's exclusive ownership of the Galaxy name and logo as well as certain other trademarks and trade names which Galaxy uses in connection with the Products and Services (the Trademarked Material) and agrees that Telnet will not acquire any interest in any of the Trademarked Material by virtue of this Agreement or anything done pursuant to it; While this Agreement is in effect, Telnet may indicate to the public its status of being an authorized seller of the Galaxy Products





and Services; Except with the prior written consent of Galaxy, Telnet will not adopt or use any of the Trademarked Material, in whole or in part, or any confusingly similar word or symbol, as part of Telnet's name or, to the extent Telnet has knowledge of such use and the power to prevent such use, allow others to use the Trademarked Material; Nothing in this Agreement contains any transfer or license to Telnet of any Trademarked Material or other proprietary rights. 9.3 Review and Approval of Uses  Galaxy shall have the right to review any use by Telnet of the Trademarked Material and to approve or disapprove, in its absolute discretion, Telnet's use of it and if Galaxy disapproves of Telnet's use of Trademarked Material, Telnet shall not use the Trademarked Material for such use. Telnet shall, at Galaxy's request, provide to Galaxy a copy of anything which Telnet is using or may use and which contains the Trademarked Material; Telnet must adhere to Galaxy's standards of use in respect to any of the Trademarked Material. Among other things, Telnet will be required to indicate explicitly Galaxy's ownership of the name or mark. 9.4 No Removal of Logos, Trademarks & Notices Unless Telnet first obtains express written consent from Galaxy, Telnet will not remove or alter any patent numbers, trade names, trademarks, copyright or other proprietary notices, serial numbers, labels, tags or other identifying marks, symbols or legends affixed to or included with any Product or portion thereof, whether on packaging, media, presentations or otherwise, or any related materials provided to Telnet by Galaxy.

10. TERM AND TERMINATION 10.1 Term of the Agreement The initial term of this Agreement will be for two (2) year(s) commencing on the Effective Date. Thereafter, this agreement will renew automatically from year to year unless cancelled in writing by either Party giving the other written notice of such cancellation a minimum of 60 days before the end of the then current term. 10.2 Termination for Default Subject to section 13.2, either Party may terminate this Agreement, effective immediately, if the other commits a material breach of it, commits any material fraudulent act in performing any of its obligations or makes any material misrepresentation to the other or commits an act of malfeasance or misfeasance in the performance of its or his duties or is unable or unwilling to perform its obligations and duties under this Agreement which circumstances will include, but not be limited to: If a receiver, trustee in bankruptcy or similar officer is appointed to take charge of any of its assets; or If it files for relief under any applicable bankruptcy laws. 10.3 Obligations Upon Termination Upon expiration or termination of this Agreement: (a) Telnet shall immediately: stop representing itself as a seller of the Products and Services and marketing and selling the Products and Services; discontinue using the Trademarked Materials; and return to Galaxy all Galaxy sales and technical materials and other Galaxy literature; Galaxy shall deliver pending Orders per the terms of such Orders; and all amounts due from each party to the other shall become immediately due and payable. 10.4 Inventory Returns Upon termination of this Agreement, Galaxy may, at its sole discretion accept inventory returns of Products. If Galaxy accepts inventory returns, Telnet shall pay a restocking fee of twenty-five percent (25%) of the original billing amount for the returned inventory. 10.5 Subscribers If this Agreement is terminated pursuant to section 10.2, Galaxy shall have the right to contact Subscribers directly and solicit such Subscribers to become subscribers of Galaxy, an affiliate thereof or of another client of Galaxy's.

11. CONFIDENTIALITY 11.1 Confidential Information Each of the Parties acknowledges that in the course of their relationship pursuant to this Agreement, each (the Receiving Party) will have access to or come into possession of Confidential Information of the other Party (the Disclosing Party) and that the disclosure of such Confidential Information to third parties or to the general public would be detrimental to the best interests and business of the Disclosing Party.





11.2 Exceptions to Confidential Information Notwithstanding the definition of Confidential Information and the provisions of section 11.1, Confidential Information does not include information or data, which the Receiving Party can prove, on a balance of probabilities, is or was: publicly known at the time of disclosure; already known by the Receiving Party at the time it receives the information; provided to the Receiving Party by a third party that is not under obligation to keep such information confidential; or independently developed by the Receiving Party without use of any Confidential Information of the Disclosing Party. 11.3 Limitations on Use The Receiving Party will not, during the term of this Agreement or at any time thereafter: disclose any Confidential Information to any person; use or exploit, directly or indirectly, the Confidential Information for any purpose other than the proper purposes of the Disclosing Party; or disclose for any purpose, other than those of the Disclosing Party, the private affairs of the Disclosing Party or any other information which the Receiving Party may acquire during the term of the Agreement with respect to the business and affairs of the Disclosing Party, whether acquired in the course of carrying out the Agreement or incidentally. 11.4 Required Disclosure Notwithstanding the foregoing, the Receiving Party will be entitled to disclose Confidential Information if required by law provided that the Receiving Party will promptly notify the Disclosing Party, consult with the Disclosing Party and cooperate with the Disclosing Party in any attempt to enjoin, to resist or narrow such disclosure or to obtain an order or other assurance that such information will be accorded confidential treatment. 11.5 Survival of Confidentiality All covenants of confidentiality herein shall survive the term of this agreement by three (3) additional years counting from the date of termination of this Agreement.

12. EXCLUSION FROM TERRITORIES 12.1 Right to Exclude Subject to section 12.2 Galaxy reserves the right to grant to any other person an exclusive territory (the Territory) for the marketing, sales and distribution of the Services and, from that date which is 30 days after the date upon which Galaxy delivers notice in writing to Telnet of such grant of exclusivity over a Territory (the Exclusion Date), Telnet shall not sell, distribute or market the Services within the Territory. However, Telnet shall be entitled to continue to sell the Services to any Subscriber resident within the Territory who became a Subscriber prior to the Exclusion Date. 12.2 Territories From Which Telnet May Not Be Excluded During the term of this Agreement, Telnet may not be excluded pursuant to section 12.1, from the following areas: (a) Romania.

13. MISCELLANEOUS 13.1 No Waiver The failure by either Party to enforce or take advantage of any of the provisions of this Agreement shall not constitute nor be construed as a waiver of such provisions or of the right subsequently to enforce or take advantage of each and every such provision. 13.2 Default If either of the Parties should be in default (the Defaulting Party) of any obligation or requirement under this Agreement, the Party affected may give written notice to the Defaulting Party specifying the default and will give the Defaulting Party a grace period of 30 days (the Grace Period) to cure such default or to take such reasonable steps to cure without undue delay such default prior to seeking any remedy it may have on account of such default. The Defaulting Party shall lose no rights under this Agreement if it cures the stated default within the Grace Period. 13.3 Disputes Galaxy and Telnet will attempt to settle any claim or controversy relating to this Agreement through consultation and negotiation in good faith and a spirit of mutual cooperation. If those attempts fail, then a mutually acceptable mediator, chosen by Galaxy and Telnet within forty-five (45) days after written notice from one of the parties to the other, demanding mediation, will mediate the dispute. Neither party may unreasonably withhold consent to the selection of a mediator. Galaxy and Telnet will share the costs of the mediation equally and each shall bear its own costs. Any dispute which the parties cannot resolve between themselves through negotiation or mediation within ninety (90) days after the date of the initial demand for mediation may then be submitted to the courts for final resolution. Nothing in this paragraph will prevent either party from resorting to judicial proceedings if:





good faith efforts to resolve the dispute under these procedures have been unsuccessful; or interim relief from a court is necessary to prevent serious and irreparable injury to one party or to others. 13.4 Notices Any formal notice between the Parties hereto will be in writing and will be either personally delivered or sent by facsimile or by registered mail to the appropriate party or parties at the address noted for that party on the first page of this Agreement, or such other address as may be designated by a party in a written notice sent to the other parties in accordance with this paragraph. Any notice or other communication will be effective seven calendar days from the day that it was sent, or if given by personal delivery or facsimile, the day following its receipt. 13.5 Assignment Neither party may assign this Agreement without the prior written consent of the other. However, Telnet agrees that Galaxy may assign this entire Agreement to an affiliate or sell, transfer or assign any account receivable under it to a financing institution to enforce the Galaxy's rights to receive payment from Telnet. This Agreement will be binding upon any authorized assignee or successor of Telnet or Galaxy. 13.6 Compliance with Law Each of the Parties agrees to comply with all applicable laws, rules and regulations of the jurisdictions in which it operates and to do nothing to cause the other to violate the law, rules and regulations of those jurisdictions. If this Agreement or the performance hereof, is determined to be contrary of the laws, rules or regulations of the Territory or of Canada, this Agreement will automatically terminate subject the terms of Termination outlined in this Agreement.

14. GENERAL 14.1 Entire Agreement  This Agreement and all documents contemplated by or delivered under or in connection with this Agreement constitute the entire agreement between the Parties with respect to the subject matter of this Agreement, and supersede all prior agreements, negotiations, discussions, undertakings, representations, warranties and understandings, whether written or oral, express or implied, statutory or otherwise.  14.2 Amendment No amendment, supplement, restatement or termination of any provision of this Agreement is binding upon the Parties hereto unless it is in writing and signed by an authorized representative of each Party to this Agreement at the time of the amendment, supplement, restatement or termination.  14.3 Severability If any provision or any portion of any provision of this Agreement shall be held unlawful or unenforceable, the balance of such provision and all other provisions hereof shall nonetheless in all respects remain binding and effective and shall be construed in full force and effect to the extent lawfully permissible. 14.4 Time of Essence Time is of the essence in the performance of the terms and conditions of this Agreement. 14.5 Enurement This Agreement enures to the benefit of and binds the Parties and their respective heirs, executors, administrators, successors and permitted assigns. 14.6 Counterpart Signature and Facsimile Delivery This Agreement may be executed in two or more counterparts and may be delivered by facsimile, each of which will be deemed to be an original and all of which will constitute one agreement, effective as of the reference date given above.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives as of the date first written above:

695014 B.C. LTD.   GALAXY TELNET SRL

Per: Peter Wiggans   Per: Michael Stunden

  Authorized Signatory     Authorized Signatory

  Peter Wiggans     Michael Stunden

  (Print name)     (Print name)

Title: Chief Operating Officer   Title: Chief Financial Officer







SCHEDULE A





SCHEDULE A PARTNER PRICING Galaxy Telnet

Table 1

  Business Partner Pricing

VoIP Services One-Time Fee Monthly Service Fee

VoIP Connectivity (per port charge)

Includes: Unlimited VoIP calls, VoIP Caller ID, Call waiting, Basic voicemail

$9.95 $5.95

VoIP Connectivity - Commpanion Galaxy Telecom Brand

With i-box subscription

Includes: Unlimited VoIP calls, VoIP Caller ID, Call waiting, Basic voicemail, 3-way Calling, Call forwarding, Do not disturb, Call hold, Auto answer, Call ignore, Call go to voicemail, Redial, Mute

$19.95 $1.95

VoIP Connectivity - i-box Commpanion Galaxy Telecom Brand

Stand alone subscription

Includes: Unlimited VoIP calls, VoIP Caller ID, Call waiting, Basic voicemail, 3-way Calling, Call forwarding, Do not disturb, Call hold, Auto answer, Call ignore, Call go to voicemail, Redial, Mute

$19.95 $5.95

VoIP to VoIP Termination included included

VoIP to PSTN Termination (Long distance) included See Current Published Rates

Basic Voicemail Service included included

i-box CommCenter - Enhanced Voicemail

Includes: Web interface, call forwarding, do not disturb, speed dial, call logs, email message notify management, time zone control, profile management, greeting management and password control

included $2.00

Services

Partner Portal included included

Partner Portal Back-Office (API) included included

Special Accounts

Demonstration Accounts See note 3 free free





Employee only Accounts See note 3 free $1.95

Promotion Accounts

TBD Special Special

Phone Numbers

Direct Inward Dial (DID) - Canada $250 one time fee per order

see note 1

$3.00

Direct Inward Dial (DID) - USA $250 one time fee per order

see note 1

$2.50

Toll Free Dial (1-8XX) - Canada/USA $2.50 $2.50 plus usage ($.05 avg.)

Use existing phone number see note 2 $10.00 $3.00

Bundles & Calling Zones

Monthly 250 North America minute bundle n/a $2.95

Monthly 500 North America minute bundle n/a $5.95

Monthly 750 North America minute bundle n/a $8.95

Monthly 1000 North America minute bundle n/a $11.95

Local Calling Zone

On-net locations only

Includes: 750 minutes inbound and outbound local calls. Requires DID. Subscriber must reside in Local Calling area.

included $6.95

Virtual Calling Zone

On-net locations only

Includes: 750 minutes inbound calls from virtual calling area. Requires DID Applies to North America-based subscribers only.

See note 4

included $6.95

Custom Calling Zone

Off-net locations

Custom Quote Custom Quote

Note 1 Not available in all areas, see Table 3, 25 DID number block minimum Note 2 Not available in all areas see Table 3 Note 3 Quantity to be agreed between parties, Long distance charges apply Note 4 Unlimited calling FROM Virtual Calling Zone only. Long distance charges apply when calling to VCZ.









Table 2 i-box Commpanion Telecom Branded Version

Licenses i-box CommPanion Additional 500 Licenses $7,000 $14.00 ea 1,350 Licenses $14,000 $10.50 ea 2,500 Licenses $21,000 $8.40 ea 3,650 Licenses $28,000 $7.70 ea 5,000 Licenses $35,000 $7.00 ea 6,700 Licenses $42,000 $6.30 ea 8,750 Licenses $49,000 $5.60 ea 11,500 Licenses $56,000 $4.90 ea 15,000 Licenses $63,000 $4.20 ea 20,000 Licenses $70,000 $3.50 ea

Note 1 Co-Branding one time charge $1,350.00





Table 3 Galaxy Telecom On-net locations

Canada Province City Alberta Calgary Edmonton British Columbia Vancouver Victoria Kelowna Whistler Abbotsford Manitoba Winnipeg Nova Scotia Halifax Ontario Toronto Ottawa Hamilton Windsor Kitchener London Guelph Kingston Oshawa St. Catherines Waterloo Hespeler Quebec Montreal Quebec City Saskatchewan Regina

USA State City Alabama Birmingham Arizona Phoenix California Los Angeles San Diego San Francisco Colorado Denver Florida Gainesville Miami Orlando Tampa Georgia Atlanta Illinois Chicago Indiana Indianapolis Maryland Baltimore Michigan Detroit Minnesota Minneapolis Missouri Kansas City St Louis New York New York City North Carolina Charlotte Fayetteville Greensboro Raleigh Ohio Cincinnati Cleveland Dayton





Oregon Portland Pennsylvania Philadelphia Tennessee Nashville Texas Dallas Austin Houston San Antonio Utah Salt lake City Virginia Culpepper Washington Seattle Washington DC Washington DC





SCHEDULE B TIER 1 SUBSCRIBER SUPPORT

Under this Agreement the Telnet is required to maintain Tier 1 Subscriber Support (the Subscriber Support) functioning as initial response for any direct Subscriber inquiries. Galaxy will provide Tier 2 technical support for technical inquiries from qualified resellers only. The Criteria for the Subscriber Support are as follows: Subscriber Satisfaction Telnet will use its best efforts to ensure that Subscribers achieve the highest levels of satisfaction with the Services delivered by Telnet. Telnet shall notify Galaxy immediately of any complaints by Subscribers, whether they involve sales, Service, Performance or other issues. Galaxy shall use Subscriber satisfaction surveys, field Service reports, and random audits, as it deems necessary to determine if the appropriate levels of Subscriber satisfaction are achieved. If Galaxy determines that an inappropriate level of Subscriber dissatisfaction exists, Galaxy and Telnet shall put in place an action plan as approved by Galaxy to continually improve and maintain Subscriber satisfaction levels. Staff Subscriber Support shall be staffed by fully qualified and trained personnel as per the following criteria: 1. Training Telnet shall maintain technically qualified Service personnel and use its best efforts to service Telnet subscribers in the Territory. 2. Technical Team (a) Language Capabilities Telnet shall employ at least one lead Service engineer who is fluent in English who will be responsible for communicating with Galaxy's technical staff and who can accurately translate all technical documentation from English. Service Staff Upon execution of this Agreement and annually thereafter, Telnet shall furnish Galaxy with a list of its Service management and other technical staff qualified to support Galaxy Services. (c) Help Desk Telnet shall ensure that the personnel staffing the Subscriber help desk, as set out in section 3.6, shall have a sufficient working knowledge of: networking in a TCP/IP WAN/LAN environment; configuring and maintaining network equipment; relevant operating systems (Macintosh, Windows, Linux); and both written and spoken English,. to be able to provide effective help to Subscribers, communicate and work with Galaxy's Tier 2 help desk to address those Subscriber issues which Telnet's help desk are unable to resolve and to communicate and work with Galaxy with regard to technical issues.

SCHEDULE C





SCHEDULE C SUBSCRIBER CONTRACT CLAUSES

Telnet shall include as a term of any agreement between itself and a Subscriber with respect to any of the Services, the relevant clauses of the following: General

The Subscriber will not use the Service for any purpose that is unlawful, abusive, intrusive on another's privacy, harassing, libellous, defamatory, threatening or hateful, or in any other way that would violate any applicable governmental law.

Telnet offers the Service internationally. While the Service may be used to make and receive international calls, we do not represent that the use of the Service is legally appropriate in locations outside of Canada and the United States. If the Subscriber chooses to use the Service from or to a location outside of Canada and the United States, the Subscriber is responsible for compliance with any and all governing foreign and local laws.

The Subscriber may not reverse engineer, distribute, publish, display, modify or in any way exploit the configuration parameters Telnet provides as a means to access the Service.

The Subscriber acknowledges that any devices and embedded software or firmware (Products) furnished by Telnet are exclusively for use with Telnet's Service.

Residential Use of Service

If you have subscribed to Residential Services, the Service is provided to you as a residential user, for your personal, residential, non-business and non-professional use.  This means that you are not using the service for any commercial or governmental activities, profit-making or non-profit, including but not limited to business, sales, telecommuting, telemarketing, autodialing, continuous or extensive call forwarding, fax broadcast, fax blasting or any other activity that would be inconsistent with normal residential usage patterns. Telnet reserves the right to immediately terminate or modify the service, if Telnet determines, in its sole discretion, that the subscriber's service is being used for any of the aforementioned activities.

The Service is offered on a monthly basis to the Subscriber. The monthly Service term begins on the date that Service is activated for the subscriber. Full monthly terms will renew automatically unless Telnet is otherwise notified of the intent to cancel the Service. Upon cancellation, the Subscriber will be responsible for charges for the full term of the then current billing period and any unbilled charges.

Small Business Use of Service

If you have subscribed to Small Business Services, the Service is provided to you as a small business user. You agree not to use the Service for auto-dialling, continuous or extensive call forwarding, telemarketing or fax broadcasting. Telnet reserves the right to immediately terminate or modify the service, if Telnet determines, in its sole discretion, that the subscriber's service is being used for any of the aforementioned activities.

The Service is offered on a monthly basis to the Subscriber. The monthly Service term begins on the date that subscriber requests activation of the Service. Full monthly terms will renew automatically unless the Telnet and Galaxy is otherwise notified of the intent to cancel the Service. Upon cancellation, the Subscriber will be responsible for charges for the then current full monthly term and any unbilled charges

Short Form Emergency Services, E911 and 911

The Service presently does not support 911, E911 or any other type of emergency Services; that calls to 9-1-1 cannot be connected; and that alternative arrangements need to be made to contact emergency Services in situations where emergency numbers would have to be dialled.

Theft

The Subscriber is responsible for cancelling the Service if Subscriber believes that the associated Products have been lost or stolen, or if the Subscriber becomes aware that the Service provided is being used or misused without Subscribers consent. Subscriber is liable for all charges accruing to Subscribers account for the Service until Subscriber cancels the Service. Service Termination The Provider reserves the right to terminate the Service at any time with or without notice and for any reason. The subscriber agrees that the provider shall not be liable to the subscriber or to any third party for any modification, suspension or discontinuance of the Service. Privacy Personal data and certain other information submitted by the subscriber is subject to our Privacy Policy. Voice over IP





communications are transmitted over public networks including the Internet. The subscriber acknowledges that the provider is not liable for any loss of privacy arising out of use of the Service. 
Question: Highlight the parts (if any) of this contract related to Covenant Not To Sue that should be reviewed by a lawyer. Details: Is a party restricted from contesting the validity of the counterparty’s ownership of intellectual property or otherwise bringing a claim against the counterparty for matters unrelated to the contract?

SOLUTION:
Telnet acknowledges Galaxy's exclusive ownership of the Galaxy name and logo as well as certain other trademarks and trade names which Galaxy uses in connection with the Products and Services (the "Trademarked Material") and agrees that Telnet will not acquire any interest in any of the Trademarked Material by virtue of this Agreement or anything done pursuant to it;