Document:

Exhibit 10.10

 Exhibit 10.10 
 SANTA CLARITA, CA (CY) 
 MANAGEMENT AGREEMENT 
 by and between 
 DIMENSION DEVELOPMENT TWO, LLC 
 as “MANAGER” 
 and 
 APPLE NINE HOSPITALITY MANAGEMENT, INC. 
 as “OWNER” 
 Dated as of September 24, 2008 

 SANTA CLARITA, CA (CY) 
 Table of Contents 
  

					
	 	  	 	  	Page
	ARTICLE I	  	APPOINTMENT OF MANAGER	  	1
			
	 1.01.
	  	Appointment	  	1
			
	 1.02.
	  	Management of the Hotel	  	1
			
	 1.03.
	  	Employees	  	3
			
	 1.04.
	  	Owner’s Right to Inspect	  	4
			
	 1.05.
	  	Regular Meetings	  	4
			
	 1.06.
	  	System Standards	  	4
			
	 1.07.
	  	Limitations on Manager’s Authority	  	5
			
	 1.08.
	  	Representations and Warranties of Manager	  	5
			
	ARTICLE II	  	TERM	  	6
			
	 2.01.
	  	Term	  	6
			
	 2.02.
	  	Performance Termination	  	7
			
	ARTICLE III	  	COMPENSATION OF MANAGER	  	6
			
	 3.01.
	  	Management Fees	  	6
			
	 3.02.
	  	Operating Profit	  	7
			
	ARTICLE IV	  	ACCOUNTING, BOOKKEEPING AND BANK ACCOUNTS	  	8
			
	 4.01.
	  	Accounting, Distributions and Annual Reconciliation	  	8
			
	 4.02.
	  	Books and Records	  	9
			
	 4.03.
	  	Accounts, Expenditures	  	9
			
	 4.04.
	  	Annual Operating Projection	  	10
			
	 4.05.
	  	Working Capital	  	10
			
	 4.06.
	  	Fixed Asset Supplies	  	11
			
	 4.07.
	  	Real Estate and Personal Property Taxes	  	11
			
	 4.08.
	  	Sarbanes-Oxley Certification	  	12
			
	ARTICLE V	  	REPAIRS, MAINTENANCE AND REPLACEMENTS	  	13
			
	 5.01.
	  	Repairs and Maintenance to be Paid from Gross Revenues	  	13
			
	 5.02.
	  	Repairs, Maintenance and Equipment Replacements to be Paid from Reserve	  	13
			
	ARTICLE VI	  	INSURANCE	  	15
			
	 6.01.
	  	Property Insurance	  	15

  

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	 6.02.
	  	Operational Insurance	  	15
			
	 6.03.
	  	Coverage	  	16
			
	 6.04.
	  	Costs and Expenses	  	16
			
	 6.05.
	  	Owner’s Right to Provide Insurance	  	16
			
	ARTICLE VII	  	DAMAGE AND REPAIR	  	17
			
	 7.01.
	  	Damage and Repair	  	17
			
	 7.02.
	  	Condemnation	  	17
			
	 7.03.
	  	Subordination to Mortgage	  	18
			
	 7.04.
	  	No Covenants, Conditions or Restrictions	  	18
			
	 7.05.
	  	Liens; Credit	  	18
			
	ARTICLE VIII	  	DEFAULTS	  	19
			
	 8.01.
	  	Events of Default	  	19
			
	 8.02.
	  	Remedies	  	20
			
	 8.03.
	  	Additional Remedies	  	20
			
	ARTICLE IX	  	ASSIGNMENT AND SALE	  	20
			
	 9.01.
	  	Assignment	  	20
			
	 9.02.
	  	Sale of the Hotel	  	21
			
	ARTICLE X	  	MISCELLANEOUS	  	21
			
	 10.01.
	  	Right to Make Agreement	  	21
			
	 10.02.
	  	Consents and Cooperation	  	21
			
	 10.03.
	  	Relationship	  	22
			
	 10.04.
	  	Applicable Law; Jurisdiction	  	22
			
	 10.05.
	  	Recordation	  	22
			
	 10.06.
	  	Headings	  	23
			
	 10.07.
	  	Notices	  	23
			
	 10.08.
	  	Environmental Matters	  	23
			
	 10.09.
	  	Confidentiality; Projections	  	24
			
	 10.10.
	  	Indemnification	  	25
			
	 10.11.
	  	Actions to be Taken Upon Termination	  	25
			
	 10.12.
	  	Waiver	  	27
			
	 10.13.
	  	Partial Invalidity	  	27
			
	 10.14.
	  	Survival	  	28

  

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	 10.15.
	  	Negotiation of Agreement	  	28
			
	 10.16.
	  	Estoppel Certificates	  	28
			
	 10.17.
	  	Affiliates	  	28
			
	 10.18.
	  	Blocked Persons or Entities	  	29
			
	 10.19.
	  	Restrictions on Operating the Hotel in Accordance with System Standards	  	29
			
	 10.20.
	  	Counterparts	  	29
			
	 10.21.
	  	Entire Agreement	  	29
			
	 10.22.
	  	Franchise Agreement	  	30
			
	 10.23.
	  	Operation of Other Hotels	  	30
			
	 10.24.
	  	Waiver of Jury Trial and Punitive Damages	  	30
			
	 ARTICLE XI
	  	DEFINITION OF TERMS	  	31
			
	 11.01.
	  	Definition of Terms	  	31
			
	ARTICLE XII	  	SUPPLEMENTAL PROVISIONS	  	39

  

					
	Schedule 1	 	-	  	Hotel Specific Data
	Schedule 2	 	-	  	Supplemental Provisions
	Exhibit A	 	-	  	Legal Description of Site
	Exhibit B	 	-	  	FF&E Leases, Service Contracts and Leases

  

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 MANAGEMENT AGREEMENT 
 THIS MANAGEMENT AGREEMENT (“Agreement”) is executed as of the
24th day of September, 2008 (“Effective Date”), by APPLE NINE HOSPITALITY MANAGEMENT, INC., a Virginia corporation
(“Owner”), with a mailing address at c/o Apple REIT Companies, 814 E. Main Street, Richmond, Virginia 23219, Attention: Krissy Gathright, and DIMENSION DEVELOPMENT TWO, LLC, a Louisiana limited liability company
(“Manager”), with a mailing address at 401 Keyser Avenue, Natchitoches, Louisiana 71458. 
 R E C I T A L S:

 A. The party identified as the “Landlord” in Schedule 1 attached hereto (“Landlord”) is the owner
of the hotel identified in Schedule 1, as more particularly described in the definition of “Hotel” in Section 11.01 hereof. 
 B. Landlord and Owner have entered into that certain Hotel Lease Agreement dated as of the Effective Date (the “Hotel Lease”) pursuant to which Landlord leases the Hotel to Owner. 

C. All capitalized terms used in this Agreement shall have the meaning set forth in Section 11.01 hereof. 
 D. Owner desires to engage Manager to manage and operate the Hotel, and Manager desires to accept such engagement, upon the terms and conditions set
forth in this Agreement. 
 NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, Owner and Manager agree as follows: 
 ARTICLE I

 APPOINTMENT OF MANAGER 
 1.01. Appointment. 
 Owner hereby appoints and employs Manager as Owner’s exclusive independent contractor to supervise,
direct and control the management and operation of the Hotel throughout the Term. Manager accepts said appointment and agrees to manage the Hotel during the Term in accordance with the terms and conditions of this Agreement. 
 1.02. Management of the Hotel. 
 A.
Manager shall manage the Hotel, including, without limitation, performance of the following functions, in accordance with Prudent Industry Practices, the provisions of this Agreement and all standards imposed by the Franchise Agreement (provided
that Owner makes the funds available to carry out these functions, and in all cases, except as otherwise specifically set forth in this Agreement, the costs and expenses of performing such functions shall be Deductions): 
 1. Recruit, employ or have employed, relocate, manage, supervise, direct and discharge all employees at the Hotel and maintain adequate staff, consistent
with Prudent Industry Practices, to carry out its duties under this Agreement. 

 2. Establish prices, rates and charges for services provided in the Hotel, including Guest Room rates,
subject to Owner’s prior approval of the Annual Operating Projections. 
 3. Establish and revise, as necessary, administrative policies
and procedures, including employment policies and procedures and policies and procedures for the control of revenue and expenditures, for the purchasing of supplies and services, for the control of credit and for the scheduling of maintenance, and
verify that the foregoing procedures are operating in a sound manner. 
 4. Make payments on accounts payable and collect accounts
receivable. 
 5. Procure (for Owner) all Inventories and replace Fixed Asset Supplies and otherwise incur customary and reasonable expenses
in the operation of the Hotel, subject to the approved Annual Operating Projection. 
 6. Prepare and deliver Annual Operating Projections,
Accounting Period Statements, Annual Operating Statements, Building Estimates, Repairs and Equipment Estimates and such other information as is required by this Agreement. 
 7. Plan, execute and supervise repairs and maintenance at the Hotel. 
 8. Obtain the insurance required to be obtained by Manager pursuant to Article VI of this Agreement and provide or cause to be provided all risk management services related thereto, subject to the provisions of
Section 6.05. 
 9. Obtain and keep in full force and effect, either in its own name or in Owner’s or Owner’s affiliate’s
name, as may be required by applicable law, any and all licenses (including, without limitation, liquor licenses which shall be maintained in the name of Manager to the extent permitted by law) and permits to the extent same is within the control of
Manager (or, if same is not within the control of Manager, Manager shall use all due diligence and best efforts to obtain and keep same in full force and effect). 
 10. Execute subordination agreements, estoppel certificates and other documentation required by any purchaser or mortgagee and reasonably cooperate (provided that Manager shall not be obligated to enter into any
amendments of this Agreement) with Owner or Landlord in any attempt(s) by Owner or Landlord to effectuate a Sale of the Hotel or to obtain a Mortgage. 
 11. At the direction and with the concurrence of Owner, arrange for and supervise public relations and advertising and prepare marketing plans. 
 12. Negotiate and enter into, on behalf of Owner, service contracts and other third party agreements required in the ordinary course of operating the
Hotel, including open account guaranties, provided that each such contract or agreement is approved in advance by Owner. 
  

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 13. Manage and operate the Hotel at all times in compliance with the Franchise Agreement, including
(without limitation) the Manual and the System standards (as such terms are defined therein). 
 B. The operation of the Hotel shall be under
the exclusive supervision and control of Manager, except as otherwise specifically provided in this Agreement, and Manager shall be responsible for the proper and efficient operation of the Hotel, subject to Owner making timely available and
adequate funds for Manager to perform its obligations. In fulfilling its obligations under this Agreement, Manager will act as a reasonable, prudent operator of the Hotel, having regard for the status of the Hotel, operating the Hotel in accordance
with Prudent Industry Practices and at all times maintaining and complying with all standards imposed by the Franchise Agreement, and subject to the foregoing and all other terms and conditions of this Agreement, shall have discretion in the
following: charges, terms and conditions for Guest Rooms and commercial space; credit policies and services provided by the Hotel; food and beverage services; employment policies; granting of leases, subleases, licenses and concessions for shops and
businesses within the Hotel, provided that the term of any such lease, sublease, license or concession shall not exceed the lesser of one (1) year or the Term without the prior written approval of Owner; receipt, holding and disbursement of
funds; maintenance of bank accounts; procurement of Inventories, supplies and services; promotion and publicity; payment of costs and expenses as are specifically provided for in this Agreement or are otherwise reasonably necessary for the proper
and efficient operation of the Hotel; and, generally, all activities necessary for operation of the Hotel. With respect to all Material Management Decisions, Manager shall consult with Owner in advance of making any such decisions. The term
“Material Management Decisions” means a decision to be made in connection with any expenditure of more than $10,000 for each item or $50,000 in the aggregate for all such items in any Fiscal Year if such expenditure is not
included in the approved Annual Operating Projection for such Fiscal Year or if such expenditure would result in an increase in the overall Annual Operating Projection. 
 C. Unless prevented by Owner, Manager shall comply with and abide by all applicable Legal Requirements pertaining to its operation of the Hotel. Landlord or Owner shall have the right, but not the obligation, in its
reasonable discretion, to contest or oppose, by appropriate proceedings, any such Legal Requirements. The reasonable expenses of any such contest of a Legal Requirement shall be paid from Gross Revenues as Deductions. Owner or Landlord, as
applicable, shall indemnify and hold Manager harmless from any loss, claim, fees or expenses (including reasonable attorneys’ fees) arising from the noncompliance with any Legal Requirement that Owner or Landlord chooses to contest or as to
which Owner does not fund the cost of compliance. 
 1.03. Employees 
 With the exception of the General Manager and the Director of Sales, all personnel employed at the Hotel shall at all times be the employees of G & B
Hotel Employee Leasing, LLC, an Affiliate of Manager, and not be employees of Owner. Manager shall be solely liable 

  

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for claims by employees other than the General Manager and the Director of Sales for any differentiation in benefits from said General Manager and Director
of Sales. The General Manager and the Director of Sales shall be employees of the Manager, and will be reimbursed by Owner for all costs related to their employment. Manager shall have reasonable discretion with respect to all personnel employed at
the Hotel, including, without limitation, decisions regarding hiring, promoting, transferring, compensating, supervising, terminating, directing and training all employees at the Hotel, and, generally, establishing and maintaining all policies
relating to employment; provided, however, that (i) Owner shall have the right to approve the hiring or termination of the persons who occupy the position of General Manager for the Hotel and (ii) Manager shall not negotiate or enter into
any collective bargaining or other labor agreement with employees or with any organization representing or claiming to represent employees without Owner’s prior consent. Other than employees of Manager on Hotel business, no person shall be
given gratuitous accommodations or services without prior joint approval of Owner and Manager except in accordance with policies agreed upon by Owner and Manager. Owner agrees that it will allow up to thirty days of such accommodations for new
General Manager or Director of Sales hires approved by Owner, if requested by Manager. Owner shall not pay for the relocation costs of any employees except for the cost of relocating the General Manager or the Director of Sales; provided, however,
that (i) the relocation costs for the General Manager and Director of Sales shall be subject to Owner’s prior approval, which approval shall not be unreasonably withheld or delayed, and (ii) Manager shall reimburse Owner for the costs
(including relocation costs) of hiring and training General Managers and Directors of Sales who are employed at the Hotel for less than one (1) year and are transferred or relocated by Manager except to a hotel owned by Owner or an Affiliate of
Owner. Manager shall be solely responsible and liable for all acts or omissions of the personnel employed at the Hotel and all persons managing such employees. 
 1.04. Owner’s Right to Inspect. 
 Owner, its representatives, employees, agents, Affiliates and
Mortgagees shall have access to the Hotel at any and all reasonable times for the purpose of inspection, exercising any of its rights under this Agreement or showing the Hotel to prospective purchasers, tenants or Mortgagees and at any time in case
of an emergency. 
 1.05. Regular Meetings. 
 At Owner’s request, Owner and Manager shall have meetings at the Hotel and at mutually convenient times. Manager shall be represented at such meetings by the Regional Manager and the General Manager of the Hotel
and such other personnel as the General Manager and/or Owner may deem appropriate. The purpose of the meetings shall be, inter alia, to discuss the performance of the Hotel and other related issues, including any variations from the Annual
Operating Projection for the preceding quarter. 
 1.06. System Standards 
 Subject to the availability of adequate funds, Manager shall take such actions consistent with this Agreement as are necessary for the Hotel to comply
with the System Standards, and Manager shall operate the Hotel so that the Hotel will at all times comply with System Standards, unless precluded by Owner. 
  

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 1.07. Limitations on Manager’s Authority 
 Manager shall not, without Owner’s prior written approval, enter into any FF&E Lease if (i) the fair market value of the FF&E subject to
such FF&E Lease at the time of entering into such FF&E Lease exceeds Five Thousand Dollars ($5,000); (ii) the fair market value of the FF&E subject to all FF&E Leases at the time of entering into such FF&E Lease exceeds
Fifty Thousand Dollars ($50,000) in the aggregate; (iii) the FF&E subject to such FF&E Lease is FF&E that is not, consistent with Prudent Industry Practices, customarily leased; (iv) such FF&E Lease is with an Affiliate of
Manager or is on payment terms (including the amounts and schedule of payments) that would be materially more favorable to the lessor thereof than payment terms customary under Prudent Industry Practices for leases of similar FF&E; or
(v) such FF&E Lease is not terminable by Owner upon thirty (30) days’ notice. 
 1.08. Representations and Warranties
of Manager. Manager hereby represents and warrants to Owner as follows: 
 A. Authority; No Conflicts. Manager is a limited
liability company duly formed, validly existing and in good standing in the state identified in Schedule 1. Manager has obtained all necessary consents to enter into and perform this Agreement and is fully authorized to enter into and perform
its obligations under this Agreement. No consent or approval of any person, entity or governmental authority is required for the execution, delivery or performance by Manager of this Agreement, and this Agreement is hereby binding and enforceable
against Manager. Neither the execution nor the performance of, or compliance with, this Agreement by Manager has resulted, or will result, in any violation of, or default under, or acceleration of, any obligation under any existing corporate
charter, certificate of incorporation, bylaw, articles of organization, limited liability company agreement or regulations, partnership agreement or other organizational documents of Manager and under any, mortgage indenture, lien agreement,
promissory note, contract, or permit, or any judgment, decree, order, restrictive covenant, statute, rule or regulation, applicable to Manager or to the Hotel. Owner hereby acknowledges that Manager and Manager’s Affiliates manage other hotel
properties, that no relationship is established between Owner and Manager other than as set forth in this Agreement and that no agency or contractor relationship is established whatsoever between Owner and Manager’s Affiliates, including
Manager’s parent company and Affiliates thereof. 
 B. Bankruptcy. Neither Manager nor any of its Affiliates, is insolvent or the
subject of any bankruptcy proceeding, receivership proceeding or other insolvency, dissolution, reorganization or similar proceeding. 
 C.
Property Agreements. A complete list of all FF&E Leases, Service Contracts and Leases (as such terms are defined in the Hotel Purchase Contract) entered into by or on behalf of Manager used in or otherwise relating to the operation and
business of the Hotel is attached hereto as Exhibit B. There are no leases, license agreements, leasing agent’s agreements, equipment leases, building service agreements, maintenance contracts, suppliers contracts, warranty contracts,
operating agreements, or other agreements (i) to which Manager is a party or 

  

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an assignee, (ii) relating to the ownership, occupancy, operation, management or maintenance of the Hotel, except for those Service Contracts, Leases,
Warranties and FF&E Leases disclosed on Exhibit B. The Service Contracts, Leases, Warranties and FF&E Leases disclosed on Exhibit B are in full force and effect, and no default has occurred and is continuing thereunder and no
circumstances exist which, with the giving of notice, the lapse of time or both, would constitute such a default. 
 D. Pending
Claims. Manager has not received any written notice of any claims, demands, litigation, proceedings or governmental investigations pending or threatened against Manager or its Affiliates, except as disclosed in the Hotel Purchase Contract.

 E. Employees. All employees employed at the Hotel were employees of the previous owner of the Hotel and upon sale of the Hotel to
Owner became employees of G & B Hotel Employee Leasing, LLC, an affiliate of Manager. There are no (i) unions organized at the Hotel, (ii) union organizing attempts, strikes, organized work stoppages or slow downs, or any other labor
disputes pending or threatened with respect to any of the employees at the Hotel, or (iii) collective bargaining or other labor agreements to which Manager or the Manager or the Hotel is bound with respect to any employees employed at the
Hotel. 
 ARTICLE II 
 TERM 
 2.01. Term. 
 The “Term” of this Agreement shall begin on the Effective Date and shall continue until the expiration date identified in Schedule 1. Notwithstanding the foregoing, Manager or Owner
shall have the option to terminate this Agreement at any time, with or without cause, by giving the other party not less than ninety (90) days prior written notice of its election to terminate, after the completion of the first year.

 ARTICLE III 
 COMPENSATION OF MANAGER 
 3.01. Management Fees. 
 In consideration of services to be performed during the Term, Manager shall be paid the sum of the following as its management fees: 
 A. the Base Management Fee, which shall be retained by Manager from Gross Revenues except as otherwise provided in this Agreement; plus 
 B. the Incentive Management Fee but only to the extent of available Operating Profit after payment of Owner’s Priority (including, without
limitation, all accrued and unpaid Owner’s Priority) as provided in Section 3.02 below. 
  

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 C. An accounting fee in the amount set forth in Schedule 1 (the “Accounting
Fee”), per Accounting Period during the Term of this Agreement and for one (1) month after the termination of this Agreement. The Accounting Fee shall be paid on the tenth (10) day of each month. If Manager chooses to
outsource any accounting services, the cost of such outsourcing will be included in the Accounting Fee and will not be added thereto. Notwithstanding the foregoing, the Accounting Fee shall be waived as to any Accounting Period for which Manager
fails to deliver any Accounting Period Statement or interim amounts due Owner in a timely manner as required by Section 4.01.A. 
 Owner
also shall reimburse Manager for contracted internal audits of the Property, postage, overnight mail and travel expenses incurred by Manager’s operational support staff based on then current per diem travel costs, provided that all such
expenses are included in the Annual Operating Projection approved by Owner. 
 3.02. Operating Profit. 
 A. Operating Profit, to the extent available, shall be distributed to Owner and to Manager in the following order of priority, except as otherwise
provided in this Agreement: 
 1. An amount up to the maximum amount of Owner’s Priority shall be paid to Owner; 
 2. The Incentive Management Fee shall be paid to Manager; and 
 3. Any remaining balance of Operating Profit shall be paid to Owner. 
 Owner’s Priority is not
cumulative from one Fiscal Year to the next, and to the extent the maximum amount of Owner’s Priority is unpaid in any Fiscal Year, such unpaid amount shall not accrue or otherwise be payable in any subsequent Fiscal Year. Notwithstanding
anything in this Agreement to the contrary, Manager acknowledges and agrees that Incentive Management Fees are only payable (i) annually within thirty (30) days after Owner’s receipt and acceptance of the Annual Operating Statement,
(ii) to the extent of available Operating Profit after payment in full of Owner’s Priority and (iii) in no event shall Incentive Management Fees accrue or be deemed to accrue. 
 B. To the extent of available Operating Profit with respect to each Accounting Period, Manager shall distribute a prorated portion of the Owner’s
Priority (including any accrued and unpaid Owner’s Priority for the current year) to Owner for each such Accounting Period in accordance with Section 4.01. Any Incentive Management Fee payable to Manager will be payable within thirty
(30) days after Owner’s receipt and acceptance of the Annual Operating Statement. 
  

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 ARTICLE IV 
 ACCOUNTING, BOOKKEEPING AND BANK ACCOUNTS 
 4.01. Accounting, Distributions and Annual
Reconciliation. 
 A. Within Fifteen (15) days after the close of each Accounting Period, Manager shall deliver an interim accounting
(the “Accounting Period Statement”) to Owner, prepared in accordance with the Uniform System of Accounts, showing Gross Revenues, Deductions, Operating Profit and applications and distributions thereof for the preceding
Accounting Period and any other information reasonably requested by Owner. Manager shall transfer to Owner, with each Accounting Period Statement, any interim amounts due Owner, subject to Working Capital needs mutually agreed upon by Owner and
Manager, and shall retain any interim amounts payable to Manager pursuant to the terms of this Agreement. 
 B. Calculations and payments of
the Incentive Management Fee, the Base Management Fee and distributions of Operating Profit made with respect to each Accounting Period shall be accounted for cumulatively within a Fiscal Year, but shall not be cumulative from one Fiscal Year to the
next. Within the SEC Filing Period, Manager shall deliver to Owner a statement (the “Annual Operating Statement”) in reasonable detail summarizing the operations of the Hotel for the immediately preceding Fiscal Year and a
certificate of Manager’s chief accounting officer certifying that, to the best of his or her knowledge, such Annual Operating Statement is true and correct. The parties shall, within five (5) Business Days after Owner’s receipt of
such Annual Operating Statement, make any adjustments, by cash payment, in the amounts paid or retained for such Fiscal Year as are needed because of the final figures set forth in such Annual Operating Statement. Such Annual Operating Statement
shall be controlling over the preceding Accounting Period Statements. 
 C. To the extent there is an Operating Loss for any Accounting
Period, unless such loss was due to a force majeure event, no Incentive Management Fee shall be paid to or retained from Gross Revenues by Manager. Any Base Management Fee that would have been paid to Manager had there been an Operating
Profit for such Accounting Period shall reduce any Incentive Management Fee payable to Manager in respect of subsequent Accounting Periods. In no event shall Incentive Management Fees accrue, nor shall any Incentive Management Fee be payable to
Manager in respect of any Accounting Period (i) as to which there is an Operating Loss or (ii) accrued Owner’s Priority is payable to Owner. 
 To the extent there is an Operating Loss for any Accounting Period, additional funds in the amount of any such Operating Loss shall be provided by Owner within thirty (30) days after Manager has delivered written
notice thereof to Owner. If Owner does not fund such Operating Loss within the thirty (30) day time period, Manager shall have the right (without affecting Manager’s other remedies under this Agreement) to withdraw an amount to cover such
Operating Loss from future distributions of funds otherwise due to Owner. Furthermore, if Owner fails to fund such deficiency upon request by Manager, Manager may also withdraw interest upon such sum from the date payment was due until repayment to
Manager at a rate equal to the Prime Rate plus one (1) percent per annum. In the event an Operating Loss occurs in respect of a Fiscal Year, either Owner or Manager may elect to terminate this Agreement. In no event shall Manager be obligated
to invest its own funds to cover any Operating Loss. 
  

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 4.02. Books and Records. 
 Books of control and account pertaining to operations at the Hotel shall be kept on the accrual basis and in all material respects in accordance with the
Uniform System of Accounts. Owner may at reasonable intervals during Manager’s normal business hours examine such records. If Owner desires to audit, examine or review the Annual Operating Statement, Owner shall notify Manager in writing within
sixty (60) days after receipt of such Annual Operating Statement of its intention to audit and begin such audit no sooner than ten (10) days after Manager’s receipt of such notice. Owner shall use reasonable efforts to complete such
audit within one hundred twenty (120) days after commencement thereof. If Owner does not make such an audit, then such Annual Operating Statement shall be deemed to be conclusively accepted by Owner as being correct, except in the event of
manifest error or fraud, misrepresentation, misconduct or negligence by Manager or its agents, representatives or contractors or other third parties. If any audit by an independent certified professional accountant retained by Owner discloses an
understatement of any amounts due Owner, and the understatement affects Owner’s cash position, Manager shall promptly pay Owner such amounts found to be due, plus, if Manager has taken the funds from Owner’s account, Manager shall pay
interest thereon at the Prime Rate plus one percent (1%) per annum from the date such amounts should originally have been paid. If any audit discloses that Manager has not received any amounts due it, Owner shall pay Manager such amounts, plus
interest thereon at the Prime Rate plus one percent (1%) per annum from the date such amounts should originally have been paid from Owner’s funds. The cost of the audit shall be paid by Owner; provided, however, Manager shall pay for such
cost if such audit discloses an underpayment to Owner for the Fiscal Year so audited of five percent (5%) or more of the amount that should have been paid to Owner for such Fiscal Year. In addition, if the Franchise Agreement requires Owner to
pay interest and/or the cost of an audit to the franchisor on account of an understatement in reports provided by Manager, Manager shall pay such interest and costs in accordance with the Franchise Agreement without (either directly or indirectly)
passing such charges on to Owner. 
 4.03. Accounts, Expenditures. 
 A. All funds derived from operation of the Hotel shall be deposited by Manager in Owner’s bank accounts (the “Operating
Accounts”) established by Manager in a bank or banks designated by Manager with the concurrence of Owner. Withdrawals by Manager from said Operating Accounts shall be made solely by the General Manager or the Assistant General Manager
of the Hotel, a senior officer of Manager or such other representatives of Manager whose signatures have been authorized by Manager with the concurrence of Owner. Reasonable petty cash funds shall be maintained at the Hotel in the form of a
Manager’s checking account and cash on hand. 
 B. Except as otherwise provided in this Agreement, all payments made by Manager
hereunder shall be made from the Operating Accounts, petty cash funds, or from the Reserve (in accordance with Section 5.02). Manager shall not be required to make any advance or payment with respect to the Hotel except out of such funds, and
Manager shall not be obligated to incur 

  

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any liability or obligation with respect to the Hotel unless resulting from acts or omissions of Manager that are in violation of or inconsistent with this
Agreement or from Manager’s negligence or misconduct (each, “Manager’s Liability” and, collectively, “Manager’s Liabilities”) and result in a sustained loss to Owner. Notwithstanding the
above, Manager shall not be responsible for sales tax or franchise tax audit deficiencies, nor any claims based upon the Americans with Disabilities Act (“ADA”). However, if a sales tax audit is performed, and any penalty or interest is
owed due to the negligence of Manager, Manager will be liable for the penalty and interest portion of the total deficiency found. 
 C. Debts
and liabilities (other than Manager’s Liabilities) incurred by Manager as a result of its operation and management of the Hotel pursuant to the terms hereof, whether asserted before or after Termination, will be paid by Owner to the extent
funds are not available for that purpose from Gross Revenues, and Owner shall indemnify, defend and hold Manager harmless from and against all loss, costs, liability, and damage (including, without limitation, reasonable attorneys’ fees and
expenses) arising from Owner’s failure to pay or perform such debts and liabilities. Manager shall pay, indemnify, defend and hold Owner harmless from and against all Manager’s Liabilities and all loss, costs, liability and damage
(including, without limitation, reasonable attorneys’ fees and expenses) arising from Manager’s failure to pay or perform Manager’s Liabilities. The provisions of this Section 4.03.C shall survive Termination. 
 4.04. Annual Operating Projection. 
 Manager shall deliver to Owner for its review, at least thirty (30) days prior to the beginning of each Fiscal Year after the first Fiscal Year following the Effective Date, a preliminary draft of the business plan (including a
proposed budget), the bonus plan for the General Manager and sales staff and a projection of the estimated Gross Revenues, departmental profits, Deductions, and Operating Profit for the forthcoming Fiscal Year for the Hotel (the “Annual
Operating Projection”) for approval by Owner. Manager will consider in good faith suggestions made by Owner with respect to the Annual Operating Projection and make modifications thereto that are agreed upon by Owner and Manager. In the
case of the Fiscal Year beginning on the Effective Date, Manager and Owner have already agreed upon the Annual Operating Projection for such Fiscal Year. Upon approval of the Annual Operating Projection by Owner and Manager, Manager in good faith
shall use best efforts to adhere to such Annual Operating Projection. In the event Owner and Manager are unable to agree upon the Annual Operating Projection by the commencement of the Fiscal Year to which it relates, the Manager shall be entitled
to operate the Hotel in accordance with this Agreement with the maximum approved amount of expenditures to be equal to (i) the aggregate of all items in the proposed budget which are not disputed by Owner, plus (ii) the sum of the items in
dispute increased by the increase (if any) in the CPI on January 1 of the year in question over the CPI on January 1 of the previous year. 
 4.05. Working Capital. 
 The parties recognize that, as of the Effective Date, the level of Working
Capital funds, which shall be held in the Operating Accounts, is reasonably believed to be reasonably sufficient for the operations of the Hotel subject at all times to seasonal differences and changes in circumstances after the Effective Date.
Manager may from time to time during the Term request 

  

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that Owner advance any additional funds necessary to maintain Working Capital at levels reasonably determined by Manager (with the concurrence of Owner) to
be necessary to satisfy the needs of the Hotel. In the event Owner and Manager are unable to agree upon the need for and/or amount of additional Working Capital within thirty (30) days after Owner’s receipt of such written notice from
Manager, Manager may increase the amount based on the CPI formula in Paragraph 4.04 above. If Owner and Manager agree upon the need for and amount of additional Working Capital and thereafter Owner does not so fund additional Working Capital within
ten (10) Business Days after Owner’s receipt of a written request from Manager to fund such additional Working Capital, Manager shall have the right to withdraw an amount equal to the funds requested by Manager for additional Working
Capital from future distribution of funds otherwise due to Owner. All funds so advanced for Working Capital shall be utilized by Manager for the purposes of this Agreement. Upon Termination, Manager shall immediately return the outstanding balance
of the Working Capital to Owner. 
 4.06. Fixed Asset Supplies. 
 The parties further recognize that, as of the Effective Date, the level of funds for Fixed Asset Supplies is reasonably believed to be reasonably
sufficient for the operations of the Hotel, subject at all times to seasonal differences and changes in circumstances after the Effective Date. Any additional funds which are necessary to maintain Fixed Asset Supplies at levels determined by Manager
(with the concurrence of Owner) to be necessary to satisfy the needs of the Hotel, shall be paid from Gross Revenues as Deductions. Fixed Asset Supplies shall remain the property of Owner throughout the term of this Agreement and upon Termination.

 4.07. Real Estate and Personal Property Taxes. 
 A. Except as specifically set forth in Section 4.07.B below, all real estate and personal property taxes, levies, assessments (including special assessments (regardless of when due or whether they are paid as a
lump sum or in installments over time) imposed because of facilities that are constructed by or on behalf of the assessing jurisdiction (for example, roads, sidewalks, sewers, culverts, etc.) which directly benefit the Hotel (regardless of whether
or not they also benefit other buildings)), “Impact Fees” (regardless of when due or whether they are paid as a lump sum or in installments over time) which are required of Owner as a condition to the issuance of zoning variances or
building permits, and similar charges on or relating to the Hotel (collectively, “Impositions”) during the Term shall be paid by Manager from Gross Revenues, before any fine, penalty, or interest is added thereto or lien
placed upon the Hotel or upon this Agreement, unless payment thereof is in good faith being contested and enforcement thereof is stayed, or unless adequate funds for such payment are not available in hotel revenues on hand, in which case the Owner
will pay within five (5) days from request by Manager. Any such payments shall be Deductions in determining Operating Profit. Owner shall, within five (5) days after receipt, furnish Manager with copies of official tax bills and
assessments which it may receive with respect to the Hotel. Either Landlord or Owner may, and at Owner’s request Manager shall, initiate proceedings to contest any negotiations or proceedings with respect to any Imposition, and all reasonable
costs of any such contest shall be paid from Gross Revenues and shall be a Deduction in determining Operating Profit. Manager shall, as part of its contest or negotiation of any Imposition, be entitled, on Owner’s behalf, to waive any
applicable statute of limitations in order to avoid paying the Imposition during the pendency of any proceedings or 

  

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negotiations with applicable authorities. Notwithstanding anything contained herein to the contrary, at Owner’s option (i) Manager shall establish
an escrow account in the name of Owner in a bank or banks designated by Manager with the concurrence of Owner and shall deposit monthly into such account from Gross Revenues an amount that Manager reasonably estimates shall be sufficient to pay the
Impositions, in which case Manager shall pay the Impositions from funds in the escrow account as and when the Impositions become due (and Owner shall promptly deposit into the escrow account any deficiency if the estimated monthly payments are not
sufficient to pay all of the Impositions) or (ii) the amounts that would otherwise be deposited into such escrow account shall be included in the Operating Profit, not deducted from Gross Revenues and shall be distributed in cash to Owner along
with the remainder of the Owner’s Priority. If Owner elects to retain such amounts pursuant to clause (ii) above, Manager shall accrue such amounts as a reserve on the accounting records of the Hotel, and Owner shall fund the same as and
when the Impositions become due, but such accrued and unfunded amounts shall be deducted from Gross Revenues for purposes of calculating the Incentive Management Fee. In addition, if any Mortgagee requires the establishment of an escrow account with
respect to the Impositions, Manager shall comply with such requirements. 
 B. The word “Impositions” as used in this
Agreement shall not include any franchise, corporate, estate, inheritance, succession, capital levy or transfer tax or other assessment or payment in lieu thereof imposed on Owner or Manager, or any income tax imposed on any income of Owner or
Manager (including distributions to Owner or Manager pursuant to Article III hereof), all of which shall be paid solely by Owner or Manager, as applicable, not from Gross Revenues nor from the Reserve. 
 4.08. Sarbanes-Oxley Certification. 
 A. Owner may, in connection with its or any of its Affiliate’s annual or quarterly Securities and Exchange Commission reporting requirements (and in any event no more than four (4) times in any Fiscal Year), request that Manager
deliver to Owner or its Affiliate a certificate from an accounting officer of Manager, in a form approved by Manager’s accounting firm, certifying that, to his or her knowledge, the information contained in the Accounting Period Statements for
the Accounting Periods contained within the applicable Fiscal Year or quarter are true and correct in all material respects, subject to final adjustment based on the annual review conducted by Manager in preparing the Annual Operating Statement.
Owner shall submit such request in writing, along with the date by which such certificate is to be delivered, not less than five (5) business days prior to the requested delivery date, and Manager shall deliver the certificate by the requested
date or, if later, within five (5) business days after Manager’s receipt of Owner’s request. 
 B. In connection with
Owner’s or its Affiliates’ certifications under Section 404 (“Section 404”) of the Sarbanes-Oxley Act of 2002, Owner or such Affiliate shall have the right, at its option: 
 1. Either (i) to require Manager to document its processes and related internal controls for Owner or such Affiliate to use in its required
documentation under Section 404 or (ii) to have access to Manager’s books and records relating to the Hotel (including, without limitation, reasonable access to Manager’s premises) to document Manager’s processes and related
internal controls; and 
  

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 2. Either (i) to require testing by Manager of the controls identified in clause 1 above or
(ii) to have access to Manager’s books and records relating to the Hotel (including, without limitation, reasonable access to Manager’s premises) to permit Owner or such Affiliate to test the controls identified in clause 1 above.

 Manager shall provide Owner’s or such Affiliates’ independent auditors access to Manager’s books and records relating to
the Hotel (including, without limitation, access to Manager’s premises) to conduct their audit of the testing performed pursuant to this Section 4.08. If Owner or such Affiliate determine such controls have weaknesses which should be
mentioned in Owner’s or such Affiliates’ report on internal controls under Section 404 or other certifications under the Sarbanes-Oxley Act of 2002, Manager shall use reasonable best efforts to remedy and/or correct identified
weaknesses in a timely manner. 
 ARTICLE V 
 REPAIRS, MAINTENANCE AND REPLACEMENTS 
 5.01. Repairs and Maintenance to be Paid from Gross
Revenues. 
 Subject to the availability of adequate funds, Manager shall maintain the Hotel in good repair and condition, comply with and
abide by all applicable Legal Requirements pertaining to its operation of the Hotel and shall make or cause to be made such routine maintenance, repairs and minor alterations as it determines are necessary for such purposes and as required pursuant
to the terms of the Franchise Agreement or by Owner. The phrase “routine maintenance, repairs, and minor alterations” as used in this Section 5.01 shall include only those which are normally expensed under generally
accepted accounting principles. The cost of such maintenance, repairs and alterations shall be paid from Gross Revenues (and not from the Reserve) and shall be treated as a Deduction. 
 5.02. Repairs, Maintenance and Equipment Replacements to be Paid from Reserve. 
 A. At Owner’s option and request, a reserve account in the name of Owner (the “Reserve”) shall be established by Manager, in
a bank or similar institution reasonably acceptable to both Manager and Owner, to cover the cost of: 
 1. Replacements, renewals and
additions to the FF&E at the Hotel; and 
 2. Routine Capital Expenditures. 
 B. During the Term, Manager shall transfer into the Reserve the amount(s) specified in Schedule 1. Transfers into the Reserve shall be made at the
time of each interim accounting described in Section 4.01 hereof. All amounts transferred to the Reserve shall be deducted from Gross Revenues in determining Operating Profit and shall be deposited in the special Reserve account described in
Section 5.02.A. 
  

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 C. Subject to the availability of adequate funds, Manager at Owner’s expense shall from time to time
make such (1) replacements and renewals to the FF&E of the Hotel, and (2) Routine Capital Expenditures, as may be agreed upon by Owner and Manager and as may be required by the Franchise Agreement. At the end of each Fiscal Year, any
amounts remaining in the Reserve shall be carried forward to the next Fiscal Year. Proceeds from the sale of FF&E no longer necessary to the operation of the Hotel shall be added to the Reserve. The Reserve will be kept in an interest-bearing
account to the extent not prohibited by any lenders, and any interest which accrues thereon shall be retained in the Reserve. Neither (x) proceeds from the disposition of FF&E, nor (y) interest which accrues on amounts held in the
Reserve, shall (a) result in any reduction in the required contributions to the Reserve set forth in Section 5.02.B above, nor (b) be included in Gross Revenues. If and lender requires advance payment of capital items from borrower,
Owner will advance these funds and will be subsequently reimbursed from the Reserve fund. 
 D. All repairs, alterations, improvements,
renewals or replacements made pursuant to this Article V, and all amounts kept in the Reserve, shall be the property of Owner, subject to Manager’s rights to apply such funds as otherwise provided in this Agreement. In addition and
notwithstanding anything contained herein to the contrary, no funds shall be expended for replacements, renewals and additions to the FF&E, for Routine Capital Expenditures or for any other capital expenditures unless each such expenditure is
included in the Annual Capital Spending Projection approved by Owner. In the event that Owner requests that Manager perform capital improvements that are not included in the Annual Capital Spending Projection, Manager will perform such improvements
provided that Owner and Manager have theretofore agreed upon a mutually satisfactory funding mechanism to pay for the cost of such improvements. Notwithstanding the foregoing, in case of threatened damage or destruction to the Hotel or persons or
property thereon due to force majeure or other comparable emergency, Manager may at Owner’s expense make such repairs, replacements or improvements to the Hotel as Manager reasonably deems necessary to avoid and/or minimize any
such injury, damage or destruction. 
 E. Notwithstanding anything contained herein to the contrary, at Owner’s option the amounts that
would otherwise be deposited into the Reserve pursuant to this Section 5.02 shall be included in the Operating Profit, not deducted from Gross Revenues and shall be distributed in cash to Owner along with the remainder of the Owner’s
Priority. In such case, Manager shall accrue such amounts as a reserve on the accounting records of the Hotel, and Owner shall fund the same only when required under this Agreement to cover the appropriate costs actually incurred. However, such
accrued and unfunded reserves shall be deducted from Gross Revenues for purposes of calculating the Incentive Management Fee. 
 F. Unless
otherwise expressly covered by this Article V (including without limitation in case of emergency as provided in Section 5.02.D.), Manager shall not make any capital expenditure or improvement without first obtaining Owner’s prior written
consent and approval. 
  

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 ARTICLE VI 
 INSURANCE 
 6.01. Property Insurance. 
 A. Subject to Owner’s prior approval and the provisions of Section 6.05, Manager shall, commencing with the Effective Date and for the duration
of the Term, procure and maintain, using funds deducted from Gross Revenues in determining Operating Profit, the following insurance and /or such other insurance as may be approved or required by Owner: 
 1. Insurance on the Hotel (including contents) against loss or damage by all perils included in “all risk” (as such term is commonly used in the
insurance industry) coverage, in an amount not less than one hundred percent (100%) of the replacement cost thereof, except that if such 100% replacement cost coverage is not available on reasonable rates and terms, then such insurance shall be
in an amount not less than ninety percent (90%) of the replacement cost thereof (less excavation and foundation costs), of the Hotel; 
 2. Insurance against loss or damage from explosion of boilers, pressure vessels, pressure pipes and sprinklers, to the extent applicable, installed in the Hotel; 
 3. Business interruption insurance covering loss of profits and necessary continuing expenses for interruptions caused by any occurrence covered by the insurance referred to in Section 6.0l.A.1, 2 and 3, for a
period of not less than one (1) year after the occurrence, of a type and in amounts and with such deductible limits as are agreed upon by Owner and Manager. 
 4. If the Hotel is in an earthquake or hurricane prone area, earthquake or hurricane insurance in accordance with Prudent Industry Practices. 
 B. All policies of insurance required under Section 6.01.A. 1, 2 and 3 shall insure Owner, Landlord, Manager, G & B Hotel Employee Leasing, LLC
and any Mortgagee, and any losses thereunder shall be payable to the parties as and to the extent their respective interests, if any, may appear. 
 6.02. Operational Insurance. 
 Subject to Owner’s prior approval and the provisions of Section 6.05, Manager shall,
commencing with the Effective Date and for the duration of the Term, procure and maintain, using funds deducted from Gross Revenues in determining Operating Profit, with insurance companies approved by Owner the following insurance and/or such other
insurance as may be approved or required by Owner: 
 A. Workers compensation insurance as may be required under applicable laws covering all
of the employees at the Hotel, with such deductible limits or self-insured retentions as are agreed upon by Owner and Manager; 
  

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 B. Fidelity bonds or crime insurance with respect to Hotel employees handling funds of the Hotel, in an
amount approved by Owner; 
 C. Comprehensive general public liability insurance against claims for all injury, death or property damage
occurring on, in, or about the Hotel, and automobile insurance on vehicles owned or leased by owner and operated in conjunction with the Hotel, with a combined single limit of not less than Twenty Million Dollars ($20,000,000) for each occurrence
for personal injury, death and property damage, with such deductible limits as are agreed upon by Owner and Manager; 
 D. Such other
insurance, including excess/umbrella coverage and employer’s practice liability insurance, in amounts as Manager in its reasonable judgment deems advisable (with the concurrence of Owner) for protection against claims, liabilities and losses
arising out of or connected with the operation of the Hotel or as reasonably required by a Mortgagee. 
 Owner, Manager and Landlord shall be
the named insureds with respect to the insurance described in Section 6.02.C and, to the extent applicable, Section 6.02.D. Manager shall be the name insured and Owner and Landlord shall be additional insureds on the policies described in
Section 6.02.A and 6.02B. 
 6.03. Coverage. 
 All insurance described in Sections 6.01 and 6.02 may be obtained by Manager by endorsement or equivalent means under its blanket insurance policies, provided that such blanket policies fulfill the requirements
specified herein. Deductible limits shall be as agreed upon by Owner and Manager, with Owner agreeing to pay any such deductible, with said payment being a Deduction. No coverage required hereunder shall be self-insured by Manager without prior
written approval of Owner. Owner shall have the right to approve the insurance policies to be obtained by Manager pursuant hereto and the insurance companies issuing such policies. 
 6.04. Costs and Expenses. 
 Insurance
premiums and any costs or expenses with respect to the insurance described in this Article VI shall be Deductions in determining Operating Profit. Premiums on policies for more than one year shall be charged pro rata against Gross Revenues over the
period of the policies. Any reserves, losses, costs, damages or expenses which are uninsured, or fall within deductible limits, shall be treated as a cost of insurance and shall be Deductions in determining Operating Profit. If gross revenues are
inadequate, Owner will fund the insurance premium shortfalls, which premiums will be a Deduction. 
 6.05. Owner’s Right to Provide
Insurance. Notwithstanding anything contained in this Agreement to the contrary, Owner and/or its Affiliates (including, without limitation, Landlord) shall have the right to procure and maintain any or all of the property and operational
insurance for the Hotel otherwise required to be maintained by Manager under this Article VI and in lieu of Manager’s procuring the same, provided that (i) Owner shall give Manager not less than thirty (30) days notice of Owner’s
intent to provide such insurance and shall provide to Manager upon request certificates of insurance, naming Manager as an additional insured, evidencing the same 

  

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(ii) Owner’s insurance provides reasonably equivalent coverage to Manager’s policies and (iii) such insurance procured by Owner shall not
become effective until the end of the then-current term of the applicable policy or policies maintained by Manager. In such case, all of the terms and conditions of this Article VI, to the extent applicable, shall govern the insurance procured by
Owner under this Section 6.05. Without limiting the generality of the foregoing, all insurance premiums and any costs or expenses with respect to such insurance shall be Deductions in determining Operating Profit. 
 ARTICLE VII 
 DAMAGE AND REPAIR 

 7.01. Damage and Repair. 
 A. If, during the Term, the Hotel is damaged or destroyed by fire, casualty or other cause, Owner and/or Landlord may elect, in its sole and absolute discretion, to repair or replace the damaged or destroyed portion of the Hotel with such
modifications as Owner may deem appropriate or as may be required by law, and Manager shall have the right to discontinue operating the Hotel to the extent it deems necessary to comply with applicable law, ordinance, regulation or order or as
necessary for the safe and orderly operation of the Hotel. All proceeds from the insurance described in this Agreement shall be paid to Owner and/or Landlord, as the case may be. If Owner elects not to repair or replace said damaged portion of the
Hotel, Owner shall so notify Manager by written notice as soon as reasonable practicable and no later than ninety (90) days after the date of the casualty. 
 B. In the event damage or destruction to the Hotel from any cause materially and adversely affects the operation of the Hotel and Owner notifies Manager that Owner will not repair or replace such damage, either party
may terminate this Agreement by at least thirty (30) days prior written notice to the other party. 
 7.02. Condemnation.

 A. In the event all or substantially all of the Hotel shall be taken in any eminent domain, condemnation, compulsory acquisition, or
similar proceeding by any competent authority for any public or quasi-public use or purpose or in the event a portion of the Hotel shall be so taken, but the result is that either Owner or Manager reasonably determines that it is not feasible to
continue to operate the Hotel in accordance with the standards required by this Agreement, Owner or Manager may terminate this Agreement as of the effective date of such taking. All awards and proceeds of any such taking or proceeding shall belong
to Owner and/or Landlord, as the case may be. 
 B. In the event this Agreement is not terminated pursuant to Section 7.02.A, such
portion of the Hotel that is not so taken shall be repaired or replaced, with such modifications as Owner may deem appropriate or as may be required by law, and this Agreement shall continue except as may be otherwise agreed by the parties. All
awards for any such partial taking or condemnation shall belong to Owner and/or Landlord, as the case may be. Manager shall have the right to discontinue temporarily operating the Hotel to the extent it deems necessary for the safe and orderly
operation of the Hotel. 
  

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 7.03. Subordination to Mortgage. 
 Manager shall provide to any Mortgagee an instrument (the “Subordination Agreement”), reasonably satisfactory in all respects to
Owner and such Mortgagee, which shall be recordable in the jurisdiction where the Hotel is located, pursuant to which: 
 1. This Agreement
and any extensions, renewals, replacements or modifications thereto, and all right and interest of Manager in and to the Hotel, shall be subject and subordinate to such Mortgagee’s Mortgage, with notice and opportunity to cure rights and
post-default cure rights in favor of Mortgagee; 
 2. Manager shall be obligated to each of the Subsequent Owners (as defined below) to
perform all of the terms and conditions of this Agreement for the balance of the remaining Term hereof, with the same force and effect as if such Subsequent Owner were the Owner; and 
 3. In the event that there is a Foreclosure of such Mortgage in connection with which title or possession of the Hotel is transferred to the Mortgagee
(or its designee) or to a purchaser at foreclosure or to a subsequent purchaser from the Mortgagee (or from its designee) (all of the foregoing shall collectively be referred to as “Subsequent Owners”), this Agreement may be
terminated at the election of such Subsequent Owner or Manager as of the date of such Foreclosure or upon thirty (30) days notice. 
 7.04. No Covenants, Conditions or Restrictions. 
 A. Manager acknowledges and agrees with Owner, and represents and warrants
to Owner, that, as of the Effective Date, to the best of Manager’s knowledge, there are no covenants, conditions or restrictions, including reciprocal easement agreements or cost-sharing arrangements (individually or collectively referred to as
“CC&R(s)”) affecting the Hotel, other than those disclosed on Owner’s title insurance commitment which: (i) would prohibit or limit Manager from operating the Hotel in accordance with the System Standards;
(ii) would allow the Hotel facilities (for example, parking spaces) to be used by persons other than guests, invitees or employees of the Hotel; (iii) would allow the Hotel facilities to be used for specified charges or rates which have
not been approved by Manager; (iv) would subject the Hotel to exclusive arrangements regarding food and beverage operation or retail merchandise; or (v) would impose any financial obligations on Owner or the Landlord or on the Hotel.

 7.05. Liens; Credit. 
 Manager and Owner shall use commercially reasonable efforts to prevent any liens from being filed against the Hotel which arise from any maintenance, repairs, alterations, improvements, renewals or replacements in or to the Hotel and shall
cooperate fully in obtaining the release of any such liens. If the lien was not occasioned by the fault of either party, the cost of releasing any lien shall be treated the same as the cost of the matter to which it relates. If the lien arises as a
result of the fault of either party, then the party at fault shall bear the cost of obtaining the lien release. In no event shall either party borrow money in the name of or pledge the credit of the other. 
  

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 ARTICLE VIII 
 DEFAULTS 
 8.01. Events of Default. 
 Each of the following shall, to the extent permitted by applicable law, constitute an “Event of Default” under this Agreement.

 A. The filing of a voluntary petition in bankruptcy or insolvency or a petition for reorganization under any bankruptcy law by either
party, or the admission by either party that it is unable to pay its debts as they become due. 
 B. The consent to an involuntary petition
in bankruptcy or the failure to vacate, within ninety (90) days from the date of entry thereof, any order approving an involuntary petition by either party. 
 C. The entering of an order, judgment or decree by any court of competent jurisdiction, on the application of a creditor, adjudicating either party as bankrupt or insolvent or approving a petition seeking
reorganization or appointing a receiver, trustee, or liquidator of all or a substantial part of such party’s assets, and such order, judgment or decree’s continuing unstayed and in effect for an aggregate of sixty (60) days (whether
or not consecutive). 
 D. The failure of either party to make any payment required to be made in accordance with the terms of this
Agreement, as of the due date as specified in this Agreement and the failure to cure such default within ten (10) days after receipt of written notice from the non-defaulting party demanding such cure. 
 E. Manager, any of its Affiliates or any employee at the Hotel is or becomes a Specially Designated National or Blocked Person, unless, in the case of an
employee, Manager terminates any such employee promptly after becoming aware of the same. 
 F. In carrying out its duties hereunder, Manager
or an officer, director, agent or contractor of Manager or its Affiliates commits any act involving fraud, moral turpitude or willful misconduct relating to the business or affairs of the Hotel, or commits an act which constitutes a felony.

 G. Any representation or warranty by Manager or any of its Affiliates in this Agreement or in any certificate or document or financial or
other statement furnished or delivered to Owner or any of its Affiliates at any time under or in connection with this Agreement shall have been false or misleading in any material respect on or as of the date made or deemed made. 
 H. The failure of either party to perform, keep or fulfill any of the other covenants, undertakings, obligations or conditions set forth in this
Agreement, and the continuance of such default for a period of thirty (30) days after the defaulting party’s receipt of written notice from 

  

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the non-defaulting party of said failure, or, if the default is such that it cannot reasonably be cured within said thirty (30) day period of time, if
the defaulting party fails to commence the cure of such default within said thirty (30) day period of time or thereafter fails to diligently pursue such efforts to completion, provided that (i) in the case of any default by Manager such
default is cured not later than ninety (90) days after Manager’s receipt of such written notice and (ii) no such notice or cure period shall be required in the case of Manager’s failure to maintain the insurance required by
Article VI. 
 8.02. Remedies. 
 Upon the occurrence of an Event of Default, the non-defaulting party shall have the right to pursue any one or more of the following courses of action: (1) to terminate this Agreement by written notice to the defaulting party, which
termination shall be effective as of the effective date which is set forth in said notice, provided that said effective date shall be at least thirty (30) days after the date of said notice in the case of an Event of Default by Owner;
(2) to institute forthwith any and all proceedings permitted by law or equity including, without limitation (but subject to the provisions of Section 10.20 hereof), actions for specific performance; and/or (3) to avail itself of the
remedies described in Section 8.03. 
 8.03. Additional Remedies 
 The remedies granted under Section 8.02 shall not be in substitution for, but shall be in addition, to, any and all rights and remedies available to
the non-defaulting party (including, without limitation, injunctive relief and damages) by reason of applicable provisions of law or equity and shall survive Termination. 
 ARTICLE IX 
 ASSIGNMENT AND SALE 
 9.01. Assignment. 
 A. Manager shall
not assign or transfer its interest in this Agreement without the prior written consent of Owner and any franchisor under the Franchise Agreement. Any assignee consented to by Owner and by such franchisor shall agree in writing to be bound by and
comply with the terms of this Agreement (such written agreement to be acceptable in form and substance to Owner and such franchisor). For purposes of the foregoing, a transfer of Manager’s interest in this Agreement shall include (i) an
assignment or pledge of this Agreement as security for an obligation, (ii) a transfer of any ownership or beneficial interest, direct or indirect, in Manager, including any such transfer by operation of law except to an Affiliate or the
existing owner and (iii) a transfer of Manager’s interest in this Agreement by operation of law, including by merger or consolidation (other than such a transfer to an Affiliate approved by Owner, which approval shall not be unreasonably
withheld). 
 B. Owner shall have the right to assign or transfer its interest in this Agreement without the prior written consent of the
Manager (1) as security for a Mortgage of the Hotel in accordance with this Agreement, (2) in connection with a sale, assignment, transfer or other disposition of the Hotel by Owner or Landlord, subject to Section 9.02, and
(3) in connection with a merger or consolidation or reorganization of, or a sale of all or substantially all of the assets of, Apple REIT Nine, Inc., or any Affiliate thereof. 
  

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 C. In the event Owner and the franchisor under the Franchise Agreement consent to an assignment of this
Agreement by Manager, no further assignment or transfer shall be made without the express consent in writing of such parties. An assignment by Manager of its interest in this Agreement shall not relieve Manager from its obligations under this
Agreement. 
 D. Notwithstanding anything contained herein to the contrary, Manager shall not assign its interest in this Agreement to a
Specially Designated National or Blocked Person. 
 9.02. Sale of the Hotel. 
 Owner or Landlord may, in its or their sole and absolute discretion, enter into any Sale of the Hotel to any Person and, in connection with any such Sale
of the Hotel, may assign this Agreement as provided in Section 9.01. However, if Owner or Landlord enters into a Sale of the Hotel, either Owner or Manager may, at its option, terminate this Agreement upon thirty (30) days notice to the
other party. Upon any such sale or assignment, Owner shall be released of all liabilities and obligations arising under and with respect to this Agreement on and after the date of such Sale of the Hotel; provided, however, that Owner shall continue
to be liable for all obligations and amounts due which arise or accrue during the Term of this Agreement before the date of such Sale of the Hotel. 
 ARTICLE X 
 MISCELLANEOUS 
 10.01. Right to Make Agreement. 
 Each party warrants, with respect to itself, that neither the
execution of this Agreement nor the performance of the transactions contemplated hereby shall violate any provision of law or judgment, writ, injunction, order or decree of any court or governmental authority having jurisdiction over it; result in
or constitute a breach or default under any indenture, contract, other commitment or restriction to which it is a party or by which it is bound; or, require any consent, vote or approval which has not been taken, or at the time of the transaction
involved shall not have been given or taken. Each party covenants that it has and will continue to have throughout the Term and any extensions thereof, the full right to enter into this Agreement and perform its obligations hereunder. 
 10.02. Consents and Cooperation. 
 Wherever in this Agreement the consent or approval of Owner or Manager is required, except as otherwise provided in this Agreement or agreed by the parties, such consent or approval may be withheld, delayed or conditioned in the sole and
absolute discretion of the party whose consent or approval is required, shall be in writing and shall be executed by a duly authorized officer or agent of such party. Owner agrees to cooperate with Manager by executing such leases, subleases,
licenses, concessions, equipment leases, service contracts and other agreements negotiated in good faith and at arm’s length by Manager and pertaining to the Hotel that, in Manager’s reasonable judgment, should be made in the name of the
Owner, provided that all such agreements shall be subject to Owner’s prior approval. 
  

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 10.03. Relationship. 
 The relationship of Owner and Manager shall be that of independent contractors, and neither this Agreement nor any agreements, instruments, documents, or transactions contemplated hereby shall in any respect be
interpreted, deemed or construed as making Manager an agent of or partner or joint venturer with Owner. Owner and Manager agree that neither party will make any contrary assertion, claim or counterclaim in any action, suit, arbitration or other
legal proceedings involving Owner and Manager. Any contract or agreement that Manager enters into with an Affiliate of Manager or with a third party to provide goods or services to the Hotel shall be entered into in the name of Manager or Owner,
provided that no such contract or agreement shall be entered into in the name of Owner without Owner’s prior written consent and approval of each such agreement and contract, and Owner have no liability with respect to any contract or agreement
entered into in the name of Manager other than to pay any sums due thereunder which are Deductions or which Owner otherwise agrees to pay. 
 10.04. Applicable Law; Jurisdiction. 
 This Agreement shall be construed under and shall be governed by the laws of the state
in which the Hotel is located, without regard to that state’s conflict of laws provisions. Each of Owner and Manager hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the state and
(to the extent permitted by law) Federal courts of such state, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such state court or, to the extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that
Owner or Manager may otherwise have to bring any action or proceeding relating to this Agreement against the other party in the courts of any other jurisdiction. Each of Owner and Manager hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to above. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. 
 10.05. Recordation. 
 The terms and
provisions of this Agreement shall not run with the parcel of land designated as the Site, and neither this Agreement nor any memorandum or short form hereof shall be recorded or registered without the prior written consent of Owner. 
  

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 10.06. Headings. 
 Headings of articles and sections are inserted only for convenience and are in no way to be construed as a limitation on the scope of the particular articles or sections to which they refer. 
 10.07. Notices. 
 Notices, statements
and other communications to be given under the terms of this Agreement shall be in writing and delivered by hand against receipt or sent by certified or registered mail (with a copy by first class mail) or Express Mail service, in each case postage
prepaid, return receipt requested or by nationally utilized overnight delivery service, addressed to the parties as follows: 
  

					
	To Owner:	  	 Apple Nine Hospitality Management, Inc.
 c/o Apple REIT Companies
 814 E. Main Street
 Richmond,
Virginia 23219
 Attn: Krissy Gathright

		  	 Phone:
 Fax:
	 	 (804) 727-6323
 (804) 727-6353

		
	To Manager:	  	 Dimension Development Company, Inc.
 401
Keyser Avenue
 Natchitoches, Louisiana 71458
 Attn: Sam Friedman

 Fax No.: (318) 352-8276

 or at such other address as is from time to time designated by the party receiving the notice. Any such notice
that is mailed in accordance herewith shall be deemed received when delivery is received or refused, as the case may be. Additionally, notices may be given by telephone facsimile transmission, provided that an original copy of said transmission
shall be delivered to the addressee by nationally utilized overnight delivery service on the business day following such transmission. Telephone facsimiles shall be deemed delivered on the date of such transmission. 
 10.08. Environmental Matters. 
 A.
Manager shall operate the Hotel in compliance with all applicable Environmental Laws. Manager shall (i) not use, generate or store any Hazardous Materials in or on the Hotel except as necessary for the operation and maintenance of the Hotel and
in compliance with the Environmental Laws, (ii) not allow, permit or cause the release or threat of release of any Hazardous Materials in, on, under or from the Hotel, except for the ordinary use of cleaning and maintenance supplies in
compliance with applicable Environmental Laws, (iii) not allow the accumulation of tires, spent batteries, construction and demolition debris or any other solid waste, except for solid waste generated from the operation of the Hotel and stored
in containers for normal scheduled pickup and disposal off site in compliance with applicable Environmental 

  

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Laws and (iv) use best efforts to operate and maintain the Hotel in a manner to prevent mold, fungal or other microbial growth or conditions that are
favorable for such growth, including, without limitation, the proper operation and maintenance of heating, ventilation and air conditioning systems and removal of any mold, fungal or microbial growth. 
 B. In the event of the discovery of a release or threat of release of Hazardous Materials in, on, under or from any portion of the Hotel during the Term,
Manager shall promptly notify Owner and shall take all appropriate actions with regard to such Hazardous Materials as required of an owner or operator under applicable Environmental Laws. Manager shall keep Owner apprised of the status of addressing
the release or threat of release of Hazardous Materials, and Owner shall have the right at any time to assume control of the matter from Manager. 
 “Environmental Laws” shall mean all federal, state and local environmental, health and safety laws, rules, regulations, ordinances, permits, orders, common law or requirements of any governmental authority,
including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. §§ 9601, et. seq., as amended; Solid Waste Disposal Act, 42 U.S.C. §§ 6901, et.
seq., as amended; Toxic Substances Control Act, 15 U.S.C. §§ 2601, et. seq., as amended; Hazardous Materials Transportation Act, 49 U.S.C. §§ 5101, et. seq., as amended; Federal Water Pollution
Control Act, 33 U.S.C. §§ 1251, et. seq.  
 “Hazardous Materials” shall mean any hazardous substances, hazardous
wastes, toxic substances, hazardous materials, petroleum or petroleum products, pollutants or contaminants (as those terms are defined under Environmental Laws), including, without limitation, polychlorinated biphenyls, lead or lead-based paint,
asbestos or mold in such concentrations or amounts as may impose clean-up, removal, monitoring or other responsibility under the Environmental Laws or which may present a significant risk of harm to guests, invitees or employees of the Hotel.

 10.09. Confidentiality; Projections. 
 A. Owner and Manager agree that the terms of this Agreement are strictly confidential and will use their reasonable efforts to ensure that the terms of this Agreement are not disclosed to any outside person or
entities without the prior written consent of the other party, except (1) as Owner or Manager may determine is required by any law, rule, regulation or judicial process, or by any regulatory or supervisory authority having jurisdiction over the
parties or any of their Affiliates or (2) to the extent reasonably necessary, (i) to obtain licenses, permits and other public approvals, (ii) in connection with a financing of the Hotel, Owner, or any Affiliate thereof, (iii) in
connection with a Sale of the Hotel or other sale of Owner, or any Affiliate thereof or its or their corporate assets, (iv) subject to the provisions of Section 4.02, in connection with an audit or other investigation conducted pursuant to
this Agreement or (v) in connection with either party’s enforcement of its rights and remedies under this Agreement. Notwithstanding the foregoing or anything to the contrary set forth herein, the terms of this Agreement shall not be
deemed confidential to the extent: (a) such information becomes generally available to the public other than as a result of unauthorized disclosure by the recipient or persons to whom such recipient has made the information available; or
(b) the party seeking to disclose such confidential information can demonstrate to the reasonable satisfaction of the other party that the information sought to be disclosed is customarily disclosed by at least 80% of all Persons directly or
indirectly owning hotels in the United States. 
  

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 B. Owner acknowledges that any written or oral projections, pro formas, or other similar information that
has been (prior to execution of this Agreement) or will (during the Term) be provided by Manager (or any Affiliate of either) to Owner is for information purposes only, and that Manager, and any such Affiliate do not guarantee that the Hotel will
achieve the results set forth in any such projections, pro formas, or other similar information. Owner further acknowledges that any such projections, pro formas, or other similar information are based on assumptions and estimates, unanticipated
events may occur subsequent to the date of preparation of such projections, pro formas, and other similar information, and the actual results achieved by the Hotel are likely to vary from the estimates contained in any such projections, pro formas,
or other similar information and such variations might be material. 
 10.10. Indemnification. 
 A. Manager hereby agrees to indemnify, defend and hold harmless Owner, its officers, directors, stockholders, employees, agents and their respective
successors and assigns from and against any and all claims, liabilities, damages, losses, obligations and costs (including reasonable attorneys’ fees) arising from (i) Manager’s or any of its Affiliate’s failure to comply with
its obligations under this Agreement and, to the extent provided herein, the obligations of the franchisee under the Franchise Agreement, (ii) any negligent act or omission, theft, fraud or willful misconduct of Manager or its Affiliates and
their respective senior executive employees, and (iii) any claim asserted by any employee, contractor or agent of Manager or its Affiliates, including any claim for employment discrimination, wrongful termination, violations of law and other
claims asserted by such employees, except, as to any of the items listed in clauses (i) – (iii) above, to the extent of any costs properly payable from Gross Revenues as Deductions, to the extent of any costs or claims covered by
insurance and to the extent that the loss or liability giving rise to such claim was caused directly by Owner’s breach of its obligations under this Agreement. 
 B. Owner hereby agrees to indemnify, defend and hold harmless Manager, its officers, directors, stockholders, employees, agents and their respective successors and assigns from and against any and all claims,
liabilities, damages, losses, obligations and costs (including reasonable attorneys’ fees) arising from (i) Owner’s failure to comply with its obligations under this Agreement, (ii) any theft, fraud or willful misconduct of Owner
or its Affiliates or their respective employees, agents or contractors and (iii) any claim asserted by any employee, contractor or agent of Owner or its Affiliates except, as to any of the items listed in clauses (i)-(iii) above, to the
extent the loss or liability giving rise to such claim was caused directly by Manager’s breach of its obligations under this Agreement or is covered by insurance. 
 10.11. Actions to be Taken Upon Termination. 
 Upon a Termination, the following shall be applicable:

 A. All fees or expenses due to Manager for the period before such Termination shall be paid to Manager. On the effective date of such
Termination, Manager shall cease all activities hereunder on behalf of Owner at the Hotel and shall have no further obligations hereunder except as to matters arising before such date and except as otherwise provided in this Agreement. However,
Manager shall cooperate with Owner in the orderly transfer of management to Owner or Owner’s designated agent or manager. 
  

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 B. Manager shall, within ninety (90) days after Termination, prepare and deliver to Owner a final
accounting statement with respect to the Hotel, as more particularly described in Section 4.01 hereof, along with a statement of any sums due from Owner to Manager pursuant hereto, dated as of the date of Termination. Within thirty
(30) days of the receipt by Owner of such final accounting statement, the parties will make whatever cash adjustments are necessary pursuant to such final statement. The cost of preparing such final accounting statement shall be a Deduction,
unless the Termination occurs as a result of an Event of Default by either party, in which case the defaulting party shall pay such cost. Manager and Owner acknowledge that there may be certain adjustments for which the information will not be
available at the time of the final accounting and the parties agree to readjust such amounts and make the necessary cash adjustments when such information becomes available; provided, however, that all accounts shall be deemed final one
(1) year after Termination. 
 C. Manager shall immediately release and transfer to Owner any of Owner’s funds which are held or
controlled by Manager with respect to the Hotel. 
 D. Manager shall make available to Owner such books and records respecting the Hotel
(including those from prior years) as will be needed by Owner to prepare the accounting statements, in accordance with the Uniform System of Accounts, for the Hotel for the year in which the Termination occurs and for any subsequent year. All
records shall be destroyed by Manager or forwarded to Owner, at Owners option, seven (7) years after termination of this agreement, or six (6) years after the date of the records, whichever is sooner. 
 E. Manager shall (to the extent permitted by law) assign to Owner or to the new manager all operating licenses and permits for the Hotel which have been
issued in Manager’s name (including liquor and restaurant licenses, if any); provided that if Manager has expended any of its own funds in the acquisition of any of any of such licenses or permits, Owner shall reimburse Manager therefor if it
has not done so already unless such expenditure is a Manager’s Liability. 
 F. If this Agreement is terminated by reason of
Owner’s Event of Default, a reasonable reserve shall be established from Gross Revenues to reimburse Manager for all costs and expenses incurred by Manager in terminating its employees at the Hotel, such as severance pay, unemployment
compensation, employment relocation and other employee liability costs arising out of the termination of employment of Manager’s employees at the Hotel. If Gross Revenues are insufficient to meet the requirements of such reserve, then Owner
shall deliver to Manager, within ten (10) Business Days after receipt of Manager’s written request therefor, the sums necessary to establish such reserve. 
  

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 G. If this Agreement is terminated before the expiration of the Term for any reason other than an Event
of Default by Manager, Manager may submit to Owner for its approval a budget with respect to expenses anticipated to be incurred by Manager to terminate its activities at the Hotel. Upon approval of such budget by Owner, Owner shall deposit the
total amount of such budget into the Hotel’s operating account, and Manager may use such deposit to pay such expenses. Manager shall provide Owner a final accounting of the foregoing, and any surplus remaining from such deposit shall be
refunded to Owner. 
 H. Owner may, at its option, (i) provide Manager and/or the employees at the Hotel (or require Manager to provide
to the employees at the Hotel) at least sixty (60) days’ notice of a Termination and/or (ii) cause the entity which shall succeed Manager as the operator of the Hotel to offer employment to a sufficient number of the employees at the
Hotel to avoid the occurrence, in connection with such Termination, of a “plant closing” or “mass layoff” within the meaning of the WARN Act. If Owner elects to cause the entity which shall succeed Manager as operator of the
Hotel to offer employment to certain of Manager’s employees, Manager shall not take any action that would cause such employees not to continue as employees at the Hotel. 
 I. Various other actions shall be taken, as described in this Agreement, including, but not limited to, the actions described in Section 4.05 and
Section 6.04. 
 J. Manager shall peacefully vacate and surrender the Hotel to Owner on the date of termination unless otherwise agreed
to by the parties. 
 The provisions of this Section 10.11 shall survive Termination. 
 10.12. Waiver. 
 The failure of either
party to insist upon a strict performance of any of the terms or provisions of this Agreement, or to exercise any option, right or remedy contained in this Agreement, shall not be construed as a waiver or as a relinquishment for the future of such
term, provision, option, right or remedy, but the same shall continue and remain in full force and effect. No waiver by either party of any term or provision hereof shall be deemed to have been made unless expressed in writing and signed by such
party. 
 10.13. Partial Invalidity. 
 If any portion of any term or provision of this Agreement, or the application thereof to any person or circumstance shall be invalid or unenforceable, at any time or to any extent, the remainder of this Agreement, or
the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Agreement shall be valid and be enforced to
the fullest extent permitted by law. 
  

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 10.14. Survival. 
 Except as otherwise specifically provided in this Agreement, the rights and obligations of the parties herein shall not survive any Termination. 
 10.15. Negotiation of Agreement. 
 Owner and Manager are both business entities having substantial experience with the subject matter of this Agreement, and each has fully participated in the negotiation and drafting of this Agreement. Accordingly, this Agreement shall be
construed without regard to the rule that ambiguities in a document are to be construed against the draftsman. No inferences shall be drawn from the fact that the final, duly executed Agreement differs in any respect from any previous draft hereof.

 10.16. Estoppel Certificates. 
 Each party to this Agreement shall at any time and from time to time, upon not less than fifteen (15) days’ prior notice from the other party, execute, acknowledge and deliver to such other party, or to any third party specified
by such other party, a statement in writing: (a) certifying that this Agreement is unmodified and in full force and effect (or if there have been modifications, that the same, as modified, is in full force and effect and stating the
modifications); and (b) stating to the best knowledge of the certifying party (i) whether or not there is a continuing Default or Event of Default by the non-certifying party in the performance or observance of any covenant, agreement or
condition contained in this Agreement, (ii) the amount, if any, of any past due fees or other past due amounts owed to Manager or Owner; and (iii) whether or not there are any past due and unpaid obligations with respect to the Hotel,
other than in the ordinary course of business. Such statement shall be binding upon the certifying party and may be relied upon by the non-certifying party and/or such third party specified by the non-certifying party as aforesaid. In addition, upon
written request after a Termination, each party agrees to execute and deliver to the non-certifying party and to any such third party a statement certifying that this Agreement has been terminated. 
 10.17. Affiliates. 
 Manager shall not
be entitled to contract with companies that are Affiliates (or companies in which Manager has an ownership interest if such interest is not sufficient to make such a company an Affiliate) or with third parties or their Affiliates that have other
contractual relationships with Manager and/or its Affiliates to provide goods and/or services to the Hotel without the prior written consent of Owner. Notwithstanding the foregoing, Manager may contract with Affiliates to provide marketing,
accounting and human resource services subject to the conditions that (i) the costs of such services are included in the Annual Operating Projection approved by Owner and (ii) at the time Manager submits each Annual Operating Projection to
Owner for its approval, Manager specifically identifies the services to be provided by Manager’s Affiliates. 
  

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 10.18. Blocked Persons or Entities. 
 Manager represents and warrants to Owner and covenants for the benefit of Owner that (i) neither Manager nor any of its Affiliates or any of
officers, directors, partners or employees of Manager or its Affiliates, or, to its knowledge, the funding sources for any of the foregoing, is or will be identified on the list of the U. S. Treasury’s Office of Foreign Asset Control
(“OFAC”); (ii) neither Manager nor any of its Affiliates is or will be directly or indirectly owned or controlled by the government of any country that is subject to an embargo imposed by the United States government; and
(iii) neither Manager nor any of its Affiliates is acting or will act on behalf of a government of, or is involved in business arrangements or other transactions with, any country that is subject to such an embargo. Manager will notify Owner in
writing immediately upon the occurrence of any event which would render the foregoing representations and warranties incorrect. 
 10.19.
Restrictions on Operating the Hotel in Accordance with System Standards. 
 In the event of either (i) a Legal Requirement,
including an order, judgment or directive by a court or administrative body which is issued in connection with any Litigation involving Owner, or (ii) any action taken by a Mortgagee in connection with a Foreclosure, which in either case
restricts or prevents Manager, in a material and adverse manner, from operating the Hotel in accordance with System Standards (including without limitation, any restrictions on expenditures by Manager from the Operating Accounts or from the Reserve,
other than restrictions which are set forth in this Agreement), Manager shall be entitled, at its option, to terminate this Agreement upon sixty (60) days’ written notice to Owner. The foregoing shall not reduce or otherwise affect the
rights of the parties under Article VIII. 
 10.20. Counterparts. 
 This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, and all of which shall constitute one and
the same instrument. Such executed counterparts may be delivered by facsimile which, upon transmission to the other party, shall have the same force and effect as delivery of the original signed counterpart. The submission of an unsigned copy of
this Agreement or an electronic instrument with or without electronic signature to either party shall not constitute an offer or acceptance. This Agreement shall become effective and binding only upon execution and delivery of this Agreement in
non-electronic form by both parties in accordance with this Section. 
 10.21. Entire Agreement. 
 This Agreement, together with any other writings signed by the parties expressly stated to be supplemental hereto and together with any instruments to be
executed and delivered pursuant to this Agreement, constitutes the entire agreement between the parties and supersedes all prior understandings and writings, and may be changed only by a written non-electronic instrument that has been duly executed
by the non-electronic (which shall not be deemed to exclude facsimile) signature of an authorized representative of the parties hereto. 
  

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 10.22. Franchise Agreement. 
 During the Term of this Agreement, subject to the availability of adequate funds and unless prevented or not authorized by Owner, Manager shall perform
all of the obligations of Owner as “Franchisee” under the Franchise Agreement to the extent such obligations relate to the management or operation of the Hotel (except that no capital requirements shall be considered an obligation of
Manager), including, without limitation, the obligations of “Franchisee” under Sections XIII (Accounts and Receipts) and XIV (Insurance) of the Franchise Agreement, and Manager shall not commit any act or omit to take any action that would
cause a default by the Franchisee under the Franchise Agreement. In the event of any inconsistency between the provisions of this Agreement and the provisions of the Franchise Agreement, the provisions of the Franchise Agreement shall prevail.
Manager shall send promptly to Owner any and all notices that Manager receives from the Franchisor with respect to the Hotel or the Franchise Agreement and shall keep Owner fully informed with respect to all matters that come to Manager’s
attention under the Franchise Agreement. Notwithstanding the foregoing, Manager shall not have the right to grant any consent, approval or other right reserved to the Franchisee under the Franchise Agreement or to make any decision or agreement on
behalf of Owner under the Franchise Agreement. In the event the Franchise Agreement is terminated for any reason, this Agreement shall also terminate effective as of the date of termination of the Franchise Agreement, unless the parties hereto agree
otherwise. 
 10.23. Operation of Other Hotels. 
 During the Term and except for the Hotel and the other hotels and projects described in Schedule 1, neither Manager nor any of its Affiliates shall acquire, lease, own, manage or operate, directly or
indirectly, any hotel, inn, motel or other type of lodging facility, regardless of whether similar to the Hotel or whether operated under the same or a different brand, in the same geographic area or market as the Hotel. In addition, if Manager or
any of its Affiliates shall acquire, lease, own, manage or operate, directly or indirectly, any hotel, inn, motel or other type of lodging facility, regardless of whether similar to the Hotel or whether operated under the same or a different brand,
in the same geographic area or market as the Hotel, Manager shall not permit unfair favoritism in the operation and management of such other hotels that would disadvantage the operation or business of the Hotel (such as, by way of example only,
directing potential Hotel guests who are considering the Hotel to such other hotels instead of to the Hotel). At Owner’s request, Manager shall provide such information as may reasonably be requested by Owner to determine if there has been any
such unfair favoritism and, in the event Owner, in its reasonable business judgment, determines that any such unfair favoritism has occurred, Owner may terminate this Agreement. 
 10.24. Waiver of Jury Trial and Punitive Damages. 
 Owner and Manager each hereby absolutely, irrevocably and unconditionally waive trial by jury and the right to claim punitive damages in any litigation, action, claim, suit or proceeding, at law or in equity, arising
out of or pertaining to this Agreement or any other agreement, instrument or document entered into in connection herewith. 
  

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 ARTICLE XI 
 DEFINITION OF TERMS 
 11.01. Definition of Terms. 
 The following terms when used in this Agreement shall have the meanings indicated: 
 “Accounting Fee” shall have the meaning ascribed to it in Section 3.01.D. 
 “Accounting Period” shall mean the monthly accounting period based on the calendar year months. 
 “Accounting Period Statement” shall have the meaning ascribed to it in Section 4.0l.A. 
 “Accounting Quarter” shall mean the four Accounting Periods, based in succession on the calendar year, the first of which begins
on the first day of the Calendar Year, which is the beginning of the Fiscal Year. 
 “Affiliate” shall mean, as to
any Person, any other Person that, directly or indirectly, controls, is controlled by or is under common control with such Person. For purposes of this definition, the term “control” (including the terms “controlling,”
“controlled by” and “under common control with”) of a Person means the possession, directly or indirectly, of the power: (i) to vote more than fifty percent (50%) of the voting stock or other beneficial interests of
such Person; or (ii) to direct or cause the direction of the management and policies of such Person, whether through the Ownership of voting stock, by contract or otherwise. 
 “Agreement” shall mean this Management Agreement between Owner and Manager, including the exhibits attached hereto. 

“Annual Operating Projection” shall have the meaning ascribed to it in Section 4.04. 
 “Annual Operating Statement” shall have the meaning set forth in Section 4.0l.B. 
 “Available Cash Flow” shall mean an amount, with respect to each Fiscal Year or portion thereof during the Term, equal to the
excess, if any, of the Operating Profit over the Owner’s Priority. 
 “Base Management Fee” shall mean an amount
payable to Manager as a Deduction from Gross Revenues for all services provided by Manager pursuant to this Agreement, except as otherwise expressly provided herein. The Base Management Fee shall be the percentage of Gross Revenues shown on
Schedule 1 for each Fiscal Year thereafter during the Term. 
 “Buildings” shall mean the buildings and
improvements constituting that certain hotel more particularly described on Schedule 1 attached hereto and made a part hereof which is located on the Site. 
  

 31 

 “Business Day” shall mean any day other than a Saturday, Sunday or legal holiday
in the Commonwealth of Virginia or the State where the Hotel is located. 
 “Capital Spending Projection” shall mean
the projected capital expenditures for the Hotel for the Fiscal Year. 
 “CC&R’s” shall have the meaning
ascribed to it in Section 7.04.A. 
 “Competitive Set” shall mean the group of hotels which are closest in
geographical distance from the Hotel and which are generally within the same hotel market segment as the Hotel, as described in Schedule 1. If any such hotels, subsequent to the Effective Date, either changes its chain affiliation or ceases
to operate or otherwise ceases to reflect the general criteria set forth in the first sentence of this definition, Owner and Manager agree to mutually, reasonably and in good faith, discuss appropriate changes to the foregoing list of the hotels
that shall comprise the Competitive Set. 
 “CPI”, shall mean the Consumer Price Index for All Urban Consumers
(CPI-U) for the U.S. City Average for All Items (1982-1984=100) published by the Bureau of Labor Statistics, United States Department of Labor; provided, however, that if such index ceases to be published or is converted to a different standard or
is otherwise revised, the index shall be adjusted by any then applicable conversion factor, or failing that, by any published price or cost indices or other published data which are as comparable as possible to the Index prior to its termination or
revision. 
 “Cure Payment” shall have the meaning set forth in Section 2.02.B. 
 “Deductions” shall have the meaning ascribed to it in the definition of Operating Profit. 
 “Default” shall mean the occurrence of any event which, with the lapse of time, the giving of notice or both, would constitute an
Event of Default. 
 “Effective Date” shall have the meaning ascribed to it in the Preamble. 
 “Environmental Laws” shall have the meaning ascribed to it in Section 10.08.A. 
 “Event of Default” shall have the meaning ascribed to it in Section 8.01. 
 “FF&E” shall mean furniture, furnishings, fixtures, soft goods, case goods, signage, audio-visual equipment, kitchen
appliances, vehicles, carpeting and equipment, including front desk and back-of-the-house computer equipment, but shall not include Fixed Asset Supplies or Software. 
 “FF&E Lease” means a lease of any FF&E, which lease is properly capitalized for financial accounting purposes. 
 “Fiscal Year” shall mean the fiscal year as of the Effective Date that
ends at midnight on December 31 in each calendar year; the new Fiscal Year begins on January 1st. Any partial 

  

 32 

 
Fiscal Year between the Effective Date and the commencement of the first full Fiscal Year shall constitute a separate Fiscal Year. A partial Fiscal Year
between the end of the last full Fiscal Year and the Termination of this Agreement shall also constitute a separate Fiscal Year. If Fiscal Year is changed in the future, appropriate adjustment to this Agreement’s reporting and accounting
procedures shall be made; provided, however, that no such change or adjustment shall alter the term of this Agreement or in any way reduce the distributions of Operating Profit or other payments due hereunder. 
 “Fixed Asset Supplies” shall mean items included within “Property and Equipment” under the Uniform System of Accounts
including, but not limited to, linen, china, glassware, tableware, uniforms, and similar items, whether used in connection with public space or Guest Rooms. 
 “Foreclosure” shall mean any exercise of the remedies available to a Mortgagee, upon a default under the Mortgage held by such Mortgagee, which results in a transfer of title to or possession
of the Hotel. The term “foreclosure” shall include, without limitation, any one or more of the following events, if they occur in connection with a default under a Mortgage: (i) a transfer by judicial or non-judicial foreclosure;
(ii) a transfer by deed in lieu of foreclosure; (iii) the appointment by a court of a receiver to assume possession of the Hotel; (iv) a transfer of either ownership or control of the Owner, by exercise of a stock pledge or otherwise;
(vi) if title to the Hotel is held by a tenant under a ground lease, an assignment of the tenant’s interest in such ground lease or (vi) any similar judicial or non-judicial exercise of the remedies held by the Mortgagee resulting in
actual ownership or control of the Hotel by such Mortgagee or its designee. 
 “Franchise Agreement” shall mean the
franchise agreement described on Schedule 1 attached hereto and made a part hereof, as the same may be amended or supplemented from time to time. 
 “Gross Revenues” shall mean all revenues and receipts of every kind derived from operating the Hotel and all departments and parts thereof, including, but not limited to: income (from both cash
and credit transactions) from rental of Guest Rooms, telephone charges, stores, offices, exhibit or sales space of every kind; license, lease and concession fees and rentals (not including gross receipts of licensees, lessees and concessionaires);
income from vending machines; income from parking; health club membership fees; food and beverage sales; wholesale and retail sales of merchandise; service charges; and proceeds, if any, from business interruption or other loss of income insurance;
provided, however, that Gross Revenues shall not include the following: gratuities to employees of the Hotel; federal, state or municipal excise, sales or use taxes or any other taxes collected directly from patrons or guests or included as part of
the sales price of any goods or services; proceeds from the sale of FF&E; interest received or accrued with respect to the funds in the Reserve or the other operating accounts of the Hotel; any refunds, rebates, discounts and credits of a
similar nature, given, paid or returned in the course of obtaining Gross Revenues or components thereof; insurance proceeds; condemnation proceeds (other than for a temporary taking); or any proceeds from any Sale of the Hotel or from the financing
or refinancing of any debt encumbering the Hotel. 
  

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 “Guest Room” shall mean a separately-keyed lodging unit in the Hotel. 

“Guest Room Revenues” shall mean the portion of Gross Revenues of the Hotel which is attributed to the rental of Guest Rooms.

 “Hazardous Materials” shall have the meaning ascribed to it in Section 10.08.A. 
 “Hotel” shall mean the Site together with the Buildings and all other improvements construed or to be constructed on the Site
pursuant to this Agreement, all FF&E and Fixed Asset Supplies installed or located on the Site or in the Buildings, and all easements or other appurtenant rights thereto. 
 “Hotel Lease” shall have the meaning ascribed to it in Recital B. 
 “Hotel Purchase Contract” shall have the meaning ascribed to it in Schedule 1. 
 “Impact Fees” shall have the meaning ascribed to it in Section 4.07.A. 
 “Impositions” shall have the meaning ascribed to it in Section 4.07. 
 “Incentive Management Fee” shall mean an amount payable to Manager, pursuant to Section 3.01 and Section 4.01, that is
equal to twenty percent (20%) of Available Cash Flow in any Fiscal Year (or portion thereof) after payment to Owner of Owner’s Priority. 
 “Initial Term” shall have the meaning ascribed to it in Section 2.01. 
 “Inventories” shall mean “Inventories” as defined in the Uniform System of Accounts, such as, but not limited to, provisions in storerooms, refrigerators, pantries and kitchens; beverages in wine cellars
and bars; other merchandise intended for sale; fuel; mechanical supplies; stationery; and other expensed supplies and similar items. 
 “Landlord” shall have the meaning ascribed to it in Recital A. 
 “Legal
Requirement(s)” shall mean any federal, state or local law, code, rule, ordinance, regulation or order of any governmental authority or agency having jurisdiction over the business or operation of the Hotel or the matters which are the
subject of this Agreement, including, without limitation, the following: (i) any building, zoning or use laws, ordinances, regulations or orders; and (ii) Environmental Laws. 
 “Litigation” shall mean: (i) any cause of action (including, without limitation, bankruptcy or other debtor/creditor
proceedings) commenced in a federal, state or local court; or (ii) any claim brought before an administrative agency or body (for example, without limitation, employment discrimination claims). 
 “Manager” shall have the meaning ascribed to it in the Preamble hereto or shall mean any permitted successor or assign, as
applicable. 
  

 34 

 “Manager’s Liability” and “Manager’s
Liabilities” shall have the meanings ascribed to such terms in Section 4.03.B. 
 “Mortgage” shall
mean any mortgage creating a lien on the Hotel. 
 “Mortgagee” shall mean the holder of any Mortgage encumbering the
Hotel or the Site. 
 “Operating Accounts” shall have the meaning ascribed to it in Section 4.03.A. 

“Operating Loss” shall mean a negative Operating Profit. 
 “Operating Profit” shall mean the excess of Gross Revenues over the following deductions (“Deductions”)
incurred by Manager, on behalf of Owner, in operating the Hotel: 
 1. the cost of sales, including, without limitation, compensation,
bonuses, fringe benefits, payroll taxes and other costs related to Hotel employees, provided that the foregoing costs shall not include salaries and other employee costs of executive personnel of Manager who do not work at the Hotel on a regular
basis, which salaries and costs shall be Manager’s Liability; 
 2. departmental expenses incurred at departments within the Hotel;
administrative and general expenses; the cost of marketing incurred by the Hotel; advertising and business promotion incurred by the Hotel; heat, light, and power; computer line charges; and routine repairs, maintenance and minor alterations treated
as Deductions under Section 5.01; 
 3. the cost of Inventories and Fixed Asset Supplies consumed in the operation of the Hotel;

 4. a reasonable reserve for uncollectible accounts receivable as reasonably determined by Manager with the concurrence of Owner;

 5. all costs and fees of independent professionals or other third parties who are retained by Manager with the concurrence of Owner to
perform services required or permitted hereunder, including internal audits by non affiliated third parties; 
 6. all costs and fees of
technical consultants and operational experts who are retained or employed by Manager with the concurrence of Owner for specialized services (including, without limitation, quality assurance inspectors, mystery shoppers, shop calls and employee drug
testing) and the reasonable cost of attendance by employees of the Hotel at training and manpower development programs sponsored by Manager and attendance at Manager’s annual meeting of General Manager’s and Directors of Sales, provided
Owner has approved attendance at programs and the cost thereof; 
 7. the Base Management Fee; 
  

 35 

 8. all royalty, marketing fund, reservation, communication support, property management system and other
similar fees payable to the Franchisor under the Franchise Agreement; 
 9. insurance costs and expenses as provided in Section 6.04;

 10. taxes, if any, payable by or assessed against Manager related to this Agreement or to Manager’s operation of the Hotel and
Impositions (exclusive of Manager’s income taxes or franchise taxes and any other similar taxes payable by Manager and all other taxes, assessments and payments excluded from the definition of Impositions); 
 11. transfers to the Reserve required pursuant to Section 5.02; 
 12. any costs paid by Manager pursuant to the Franchise Agreement; 
 13. The Accounting Fee and cost
reimbursements to be paid as provided in Section 3.01.C; 
 14. payments pursuant to FF&E leases or other forms of financing
obtained for the FF&E located in or connected with the Hotel; and 
 15. to the extent approved in advance by Owner, such other costs and
expenses incurred by Manager as are specifically provided for elsewhere in this Agreement or are otherwise reasonably necessary for the proper and efficient operation of the Hotel, including without limitation, travel expenses or supervisory
personnel of Manager incurred in connection with managing the Hotel. 
 The term “Deductions” shall not include
(a) debt service payments pursuant to a Mortgage or (b) rental payments under any Hotel Lease, all of which shall be paid by Owner from its own funds. 
 “Owner” shall have the meaning ascribed to it in the Preamble or shall mean any successor or assign, as applicable. 
 “Owner’s Priority” shall mean an amount up to, but not in excess of the amount shown as Owner’s Priority on Schedule
1 attached hereto and made a part hereof, per Fiscal Year (prorated for any partial Fiscal Year). Owner’s Priority for each Fiscal Year shall be paid to the extent of Operating Profit available in such Fiscal Year, as provided in
Section 3.02 of this Agreement. In the event of any capital expenditures made with respect to the Hotel after the date of this Agreement that are in excess of the Reserve, the Owner’s Priority shall be increased (but not decreased) for the
remaining portion of the Fiscal Year in which such capital expenditures are made and all subsequent Fiscal Years so as to equal a fifteen percent (15%) return on an amount equal to one hundred three percent (103%) of the sum of
(i) the purchase price paid by Owner for the Hotel plus (ii) such capital expenditures. 
  

 36 

 “Performance Termination Threshold” shall have the meaning ascribed thereto in
Schedule 1. 
 “Person” means an individual (and the heirs, executors, administrators, or other legal representatives
of an individual), a partnership, a corporation, limited liability company, a government or any department or agency thereof, a trustee, a trust and any unincorporated organization. 
 “Prime Rate” shall mean the “prime rate” of interest announced from time to time in the “Money Rates” section
of The Wall Street Journal. 
 “Prudent Industry Practice” shall mean the customary practices of the hotel
industry in the United States for hotels comparable to the Hotel. To the extent inconsistent with the requirements of the Franchise Agreement, such practices shall be conformed to the requirements of the Franchise Agreement for purposes of this
Agreement. 
 “Reserve” shall have the meaning ascribed to it in Section 5.02A. 
 “Revenue Data Publication” shall mean Smith’s STAR Report, a monthly publication distributed by Smith Travel Research, Inc.
of Gallatin, Tennessee, or an alternative source, reasonably satisfactory to both parties, of data regarding the Revenue Per Available Room of hotels in the general trade area of the Hotel. If such Smith’s STAR Report is discontinued in the
future, or ceases (in the reasonable opinion of either Owner or Manager) to be a satisfactory source of data regarding the Revenue Per Available Room of various hotels in the general trade area of the Hotel, Owner and Manager shall select an
alternative source for such data. If the parties fail to agree on such alternative source within a reasonable period of time, either party may terminate this Agreement upon sixty (60) days prior written notice to the other party. 
 “Revenue Index” shall mean that fraction that is equal to (a) the Revenue Per Available Room for the Hotel divided by
(b) the average Revenue Per Available Room for the hotels in the Competitive Set, as set forth in the Revenue Data Publication. Appropriate adjustments to the Revenue Index acceptable to Owner shall be made in the event of a major renovation of
the Hotel. 
 “Revenue Index Threshold” shall mean the number shown on Schedule 1 attached hereto and made a
part hereof. However, if the entry of a new hotel into the Competitive Set (or the removal of a hotel from the Competitive Set) causes significant variations in the Revenue Index that do not reflect the Hotel’s true position in the relevant
market, appropriate adjustments shall be made to the Revenue Index Threshold by mutual consent of Owner and Manager each acting in good faith. 
 “Revenue Per Available Room” shall mean (i) the term “revenue per available room” as defined by the Revenue Data Publication, or (ii) if the Revenue Data Publication is no longer being used (as
more particularly set forth in the definition of “Revenue Data Publication”), the aggregate gross room revenues of the hotel in question for a given period of time divided by the total room nights for such period. If clause (ii) of
the preceding sentence is being used, a “room” shall be an available hotel guestroom that is keyed as a single unit. 
  

 37 

 “Routine Capital Expenditures” shall mean certain routine, non-major expenditures
which are classified as “capital expenditures” under generally-accepted accounting principles, and which will be funded from the Reserve (pursuant to Section 5.02). Routine Capital Expenditures consist of the following types of
expenditures: exterior and interior painting; resurfacing building walls and floors; resurfacing parking areas; and miscellaneous similar expenditures. Routine Capital Expenditures are not non-routine capital expenditures or major repairs or major
alterations or improvements. 
 “Sale of the Hotel” shall mean any sale, assignment, transfer or other disposition,
for value or otherwise, voluntary or involuntary, of the Site and/or the Hotel or any interest therein, in whole or part. For purposes of this Agreement, a Sale of the Hotel shall also include a lease (or sublease) of all or substantially all of the
Hotel or Site or any interest therein. 
 “SEC Filing Period” shall mean such period of time (not to exceed thirty
(30) days) after the close of each Fiscal Year within which Owner must receive the Annual Operating Statement from Manager with respect to such Fiscal Year in order for Owner to have a reasonable period of time within which to prepare and make
all required filings with the Securities and Exchange Commission and other applicable governmental agencies. 
 “Site” shall mean the real property described on Exhibit A attached hereto and made a part hereof. 
 “Software” shall mean all computer software and accompanying documentation, excluding Manager’s proprietary software and any owned by Franchisor or other third parties, (including all future upgrades,
enhancements, additions, substitutions and modifications thereof), other than computer software which is generally commercially available, which are used by Manager in connection with operating or otherwise providing services to the Hotel.

 “Specially Designated National or Blocked Person” shall mean (i) a person designated by the U.S. Department
of Treasury’s Office of Foreign Assets Control from time to time as a “specially designated national or blocked person” or similar status, (ii) a person described in Section 1 of U.S. Executive Order 13224 issued on
September 23, 2001, or (iii) a person otherwise identified by government or legal authority as a person with whom Manager or its Affiliates are prohibited from transacting business. Currently, a listing of such designations and the text of
the Executive Order are published under the internet website address www.ustreas.gov/offices/enforcement/ofac. 
 “Subordination Agreement” shall have the meaning ascribed to it in Section 7.03. 
 “Subsequent Owners” shall have the meaning ascribed to it in Section 7.03.A. 
 “System” shall have the meaning set forth in the Franchise Agreement. 
 “System
Standards” shall mean any one or more (as the context requires) of the following three (3) categories of standards: (i) operational standards (for example, services offered to guests, quality of food and beverages,
cleanliness, staffing and employee compensation and benefits, frequent traveler programs and other similar programs; (ii) physical standards (for example, quality of the hotel, FF&E, and Fixed Asset Supplies, frequency of 

  

 38 

 
FF&E replacements, etc.); and (iii) technology standards (for example, those relating to software, hardware, telecommunications, systems security
and information technology); each of such standards shall be the standard which is generally prevailing or in the process of being implemented at other hotels in the System represented by the Franchise Agreement. 
 “Term” shall have the meaning ascribed to it in Section 2.01. 
 “Termination” shall mean the expiration or sooner cessation of this Agreement. 
 “Trade Name” shall mean any name, whether informal (such as a fictitious name or d/b/a) or formal (such as the full legal name of
a corporation or partnership) which is used to identify an entity. 
 “Uniform System of Accounts” shall mean the
Uniform System of Accounts for the Lodging Industry, Ninth Revised Edition, 1996, as published by the Educational Institute of the American Hotel & Motel Association, as revised. 
 “WARN Act” shall mean the Worker Adjustment and Retraining Notification Act, 29 U.S.C. 2101 et seq. 
 “Working Capital” shall mean funds that are used in the day-to-day operation of the business of the Hotel, including, without
limitation, amounts sufficient for the maintenance of change and petty cash funds, amounts deposited in operating bank accounts, receivables, amounts deposited in payroll accounts, prepaid expenses and funds required to maintain Inventories, less
accounts payable and accrued current liabilities. The initial Working Capital deposited by Owner as of the Effective Date shall be the amount set forth on Schedule 1. 
 ARTICLE XII 
 SUPPLEMENTAL PROVISIONS 
 All of the terms, conditions, representations, warranties, covenants and other provisions, if any, set forth in the supplemental provisions attached
hereto as Schedule 2 (the “Supplemental Provisions”) are hereby incorporated into this Agreement and shall be considered a part hereof. In the event of any conflict or inconsistency between the Supplemental Provisions and the
other provisions of this Agreement, the Supplemental Provisions shall control. 
  

 39 

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

			
	OWNER:
	
	 APPLE NINE HOSPITALITY MANAGEMENT, INC.,
 a Virginia corporation

		
	By:	 	 /s/    Justin G. Knight

	Name:	 	Justin G. Knight
	Title:	 	President
	
	MANAGER:
	
	 DIMENSION DEVELOPMENT TWO, LLC
 a Louisiana
limited liability company

		
	By:	 	 /s/    Greg Friedman

	Name:	 	Greg Friedman
	Title:	 	ManagerExhibit 10.11

 Exhibit 10.11 
 COURTYARD BY MARRIOTT 
 RELICENSING FRANCHISE AGREEMENT 
 between 
 MARRIOTT INTERNATIONAL,
INC. 
 Franchisor 
 and 
 APPLE NINE HOSPITALITY MANAGEMENT, INC. 
 Franchisee 
 Location: 28523 Westinghouse Place, Valencia, CA 91355

 Dated as of: 
 September 24, 2008 

 COURTYARD BY MARRIOTT 
 RELICENSING FRANCHISE AGREEMENT 
 TABLE OF CONTENTS 
  

					
	 	  	 	  	PAGE
	 RECITALS
	  	1
			
	 I.
	  	 GRANT
	  	2
			
	 II.
	  	 TERM
	  	4
			
	 III.
	  	 FEES
	  	4
			
	 IV.
	  	 COURTYARD BY MARRIOTT ASSOCIATION
	  	6
			
	 V.
	  	 MANAGEMENT, STAFFING AND TRAINING
	  	6
			
	 VI.
	  	 OPERATION OF THE HOTEL
	  	9
			
	 VII.
	  	 FURNISHING AND MAINTAINING THE HOTEL
	  	11
			
	 VIII.
	  	 RESERVATION, PROPERTY MANAGEMENT AND YIELD MANAGEMENT SYSTEMS
	  	13
			
	 IX.
	  	 ADVERTISING AND MARKETING
	  	14
			
	 X.
	  	 PROPRIETARY MARKS AND INTELLECTUAL PROPERTY
	  	16
			
	 XI.
	  	 SYSTEM STANDARDS MANUAL
	  	18
			
	 XII.
	  	 CONFIDENTIAL INFORMATION
	  	19
			
	 XIII.
	  	 ACCOUNTING AND RECORDS
	  	20
			
	 XIV.
	  	 INSURANCE
	  	21
			
	 XV.
	  	 TRANSFERABILITY OF INTEREST
	  	23
			
	 XVI.
	  	 SECURITY OFFERINGS
	  	29
			
	 XVII.
	  	 DEFAULT AND TERMINATION
	  	31
			
	 XVIII.
	  	 OBLIGATIONS UPON TERMINATION
	  	33
			
	 XIX.
	  	 CONDEMNATION AND CASUALTY
	  	37
			
	 XX.
	  	 TAXES, COMPLIANCE WITH LAWS, AND INDEBTEDNESS
	  	38

  

 i 

  

					
	 XXI.
	  	 INDEPENDENT CONTRACTOR AND INDEMNIFICATION
	  	39
			
	 XXII.
	  	 APPROVALS AND WAIVERS
	  	40
			
	 XXIII.
	  	 REPRESENTATIONS AND WARRANTIES OF FRANCHISEE
	  	40
			
	 XXIV.
	  	 NOTICES
	  	41
			
	 XXV.
	  	 ENTIRE AGREEMENT
	  	42
			
	 XXVI.
	  	 CONSTRUCTION AND SEVERABILITY
	  	42
			
	 XXVII.
	  	 APPLICABLE LAW AND CURRENCY REQUIREMENT
	  	44
			
	 XXVIII.
	  	 WAIVER OF JURY TRIAL AND PUNITIVE DAMAGES
	  	44
			
	 XXIX.
	  	 INJUNCTIVE RELIEF
	  	44
			
	 XXX.
	  	 FRANCHISEE ACKNOWLEDGMENTS
	  	45
		
	 STATE AMENDMENT TO FRANCHISE AGREEMENT
	  	47
		
	 ATTACHMENT A    FRANCHISE INFORMATION
	  	50
		
	 ATTACHMENT B    FORM OF GUARANTY
	  	51
		
	 ATTACHMENT C    FORM OF MANAGEMENT COMPANY ACKNOWLEDGMENT
	  	54
		
	 ATTACHMENT D    FORM OF ELECTRONIC SYSTEMS LICENSE AGREEMENT
	  	59
		
	 ATTACHMENT E    FORM OF OWNER AGREEMENT
	  	63
		
	 ATTACHMENT F    CHANGE OF OWNERSHIP RIDER
	  	77
		
	 PROPERTY IMPROVEMENT PLAN ADDENDUM
	  	79
		
	 EXHIBIT A TO PROPERTY IMPROVEMENT PLAN ADDENDUM
	  	82
		
	 EXHIBIT B TO PROPERTY IMPROVEMENT PLAN ADDENDUM
	  	84

  

 ii 

 COURTYARD BY MARRIOTT 
 RELICENSING FRANCHISE AGREEMENT 
 THIS
AGREEMENT is made and entered into effective as of the 24th day of September, 2008 (“Effective Date”), between Marriott International,
Inc., a Delaware corporation (“Franchisor”), and Apple Nine Hospitality Management, Inc., a Virginia corporation (“Franchisee”). 
 WITNESSETH: 
 WHEREAS, Franchisor has developed and owns a concept and system (“System”) for the establishment and
operation of moderately-priced hotels under the names “Courtyard” and “Courtyard by Marriott,” which offer guests exceptional quality and service; all references herein to the “System” shall be to the Courtyard by
Marriott System in the United States and Canada; 
 WHEREAS, the distinguishing characteristics of the System, all of which may be changed,
improved or further developed by Franchisor, include, without limitation: 
 1. the trade names, trademarks and service marks
“Courtyard,” “Courtyard by Marriott,” “Courtyard Club” and such other trade names, trademarks and service marks as are now or as may hereafter be designated by Franchisor in writing as part of the System
(“Proprietary Marks”); 
 2. design & construction criteria documents for Courtyard by Marriott hotels; 
 3. high standards of cleanliness, quality and service as prescribed in the Manual (as defined in Section XI hereof); 
 4. management training; 
 5. advertising,
marketing and promotional programs; 
 6. the Courtyard by Marriott Reservation System; and 
 7. the Courtyard by Marriott Property Management System. 
 WHEREAS, Ocean Park Hotels-CVP, LLC (“Existing Franchisee”) and Franchisor are parties to a Courtyard by Marriott franchise agreement (“Existing Franchise Agreement”) for the operation of the Hotel
(as defined herein); 
 WHEREAS, the Hotel is being sold to Apple Nine Hospitality Ownership, Inc., a Virginia corporation
(“Owner”) (the “Hotel Purchase Transaction”); 
 WHEREAS, Existing Franchisee desires to terminate the Existing Franchise
Agreement in connection with the consummation of the Hotel Purchase Transaction; 
 WHEREAS, Franchisor has agreed to terminate the Existing
Franchise Agreement on the terms and conditions set forth in a Termination Agreement and Release between Existing Franchisee and Franchisor (the “Termination Agreement”); 

 WHEREAS, pursuant to the Termination Agreement, the termination of the Existing Franchise Agreement is
not effective unless, among other things, this Agreement has become effective in accordance with its terms; 
 WHEREAS, Franchisee desires
that the Hotel remain in the System after termination of the Existing Franchise Agreement and Franchisee desires to operate the Hotel under Franchisor’s System at the location specified herein and to obtain a franchise from Franchisor for that
purpose; 
 WHEREAS, in order to enhance public acceptance of, and demand for, all Courtyard by Marriott hotels, Franchisee understands and
acknowledges the importance of complying strictly to Franchisor’s standards and specifications in (i) completing in a timely manner the renovations, upgrading and/or remodeling requirements (the “Property Improvement Plan”) set
forth in the Property Improvement Plan Addendum (the “Addendum”) attached hereto, and (ii) operating the Hotel to be franchised hereunder; 
 WHEREAS, the Hotel opened for business as a Courtyard by Marriott hotel on May 17, 2007 (the “Opening Date”), and was operated under Franchisor’s System from the Opening Date until termination of
the Existing Franchise Agreement pursuant to the Termination Agreement; 
 WHEREAS, certain modifications to this Agreement are required in
order to account for the fact that the Hotel was opened and operating prior to the Effective Date, which are set forth in the Change of Ownership Rider attached hereto as Attachment F; 
 WHEREAS, Owner is the owner of the Hotel and has entered into a Lease Agreement with Franchisee dated as of the Effective Date (the “Lease
Agreement”), pursuant to which Franchisee has leased the Hotel from Owner and Franchisee has rights to operate the Hotel; 
 WHEREAS,
simultaneously with the execution of this Agreement, Franchisor, Franchisee and Owner are entering into an Owner Agreement in substantially the same form set forth in Attachment E hereto (the “Owner Agreement”); and 
 WHEREAS, Franchisor is relying upon the business skill, financial capacity and character of Franchisee and its principals, and the guarantee by the
principals of Franchisee’s obligations, if applicable, as attached to this Agreement. 
 NOW, THEREFORE, the parties, in consideration
of the premises and the undertakings and commitments of each party to the other party set forth herein, agree as follows: 
  

	I.	GRANT 

 A. Franchisor hereby grants to Franchisee, upon the
terms and conditions herein contained, a nonexclusive right and franchise, and Franchisee undertakes the obligation, to operate a Courtyard by Marriott hotel in accordance with Franchisor’s standards and specifications at, and only at, the
location specified in Attachment A hereto (“Approved Location”) and to use solely in connection therewith Franchisor’s System as it may be changed, improved and further developed. Franchisor reserves the right to revise, modify, amend
or change the System, or any part thereof. Such revisions, modifications, amendments, or changes may include new or different systems, programs, specifications, standards, controls, and other distinguishing elements or characteristics that
Franchisor may make mandatory. Franchisee specifically acknowledges that certain modifications or additions to the System 

  

 2 

 
may require Franchisee to contribute to the cost of such modifications or additions on a fair and consistent basis with other participating System hotels or
other hotels, as determined by Franchisor. The grant of this franchise is subject to Franchisee’s satisfying the requirements set forth in the Addendum to this Agreement. 
 B. The “Opening Date” shall be the first day the Hotel opens for business, which date shall be specified in a writing executed on the behalf of
Franchisor and Franchisee, respectively, pursuant to Paragraph C.1.g. of the Addendum attached hereto. The right to use and become part of the System shall begin as of the Opening Date. Franchisee understands and agrees that it shall not open the
Hotel for business as a Courtyard by Marriott hotel or any other hotel at the Approved Location until the Opening Date, and Franchisee has no rights to the franchise or to the use of the System, except to advertise and promote the Hotel prior to its
opening, until the Opening Date. Franchisee understands and agrees further that if Franchisee fails to comply with the construction, furnishing and pre-opening requirements set forth in the Addendum attached hereto in strict compliance with the
standards and specifications of Franchisor, then in such event, (i) Franchisor is not obligated to authorize opening and operation of the Hotel as a Courtyard by Marriott hotel, and (ii) this Agreement shall, upon notice by Franchisor to
Franchisee, be terminated in accordance with Paragraph XVII.B.7. For purposes of this Agreement, the terms “Hotel” and “Franchised Business” shall refer to (i) the hotel and all land used in connection with the hotel located
or to be located at the Approved Location; (ii) all improvements, structures, facilities, entry and exit rights, parking, pools, and appurtenances (including without limitation the hotel building, public facilities, and all operating systems
therein); and (iii) all FF&E (as defined herein), supplies, goods, and other items installed in such improvements. 
 C. Franchisee
acknowledges and agrees that (i) this franchise relates solely to the Approved Location; (ii) this Agreement does not entitle Franchisee to any protected territory, territorial rights or exclusivity; and (iii) this franchise and
Franchisee’s rights hereunder are granted only for the number of guest rooms specified in Attachment A hereto. Franchisee shall not expand or change the number of guest rooms in or make other structural changes to the Hotel without the prior
written consent of Franchisor. 
 D. Franchisee further acknowledges and agrees that Franchisor, its subsidiaries, affiliates and partners
(collectively the “Marriott Companies” and each individually a “Marriott Company”) have and retain the right to develop, promote, construct, own, lease, acquire and/or operate, or authorize or otherwise license or franchise
others to develop, promote, construct, own, lease, acquire and/or operate other lodging products operating under the trade name “Courtyard by Marriott,” including other Courtyard by Marriott hotels, as well as any other lodging products or
concepts, including but not limited to those operated under the trade names Marriott Hotels, Resorts and Suites; JW Marriott Hotels; Marriott Marquis Hotels; Renaissance Hotels, Resorts and Suites; Renaissance ClubSport; Fairfield Inn by Marriott;
Fairfield Suites; Fairfield Inn & Suites by Marriott; Residence Inn by Marriott; SpringHill Suites by Marriott; TownePlace Suites by Marriott; Ritz-Carlton; Marriott Conference Centers; Marriott ExecuStay; The Residences at the
Ritz-Carlton; JW Marriott Residences; Marriott Marquis Residences; Nickelodeon Resorts by Marriott; Edition Hotels; or any other lodging product; vacation, timesharing, interval or fractional ownership facilities, including, but not limited to,
Marriott Vacation Club International; restaurants; or other business operation. Franchisee further acknowledges, accepts and agrees that the Marriott Companies may exercise such right without notice to Franchisee, and Franchisee covenants that it
shall not take any action, including any cause of action in a court of law or equity, that may interfere with the exercise of such right by any of the Marriott Companies. For purposes of this Agreement, “affiliate” means with respect to
any person or entity, any other person or entity directly or indirectly, through one or more intermediaries controlling, controlled by or under common control with such person or entity. 
  

 3 

 E. Franchisee hereby represents and warrants to Franchisor that (i) Owner is the sole owner of the
Hotel, (ii) the Hotel is leased to Franchisee pursuant to the Lease Agreement, and (iii) the Lease Agreement grants Franchisee full and exclusive control of the Hotel and all rights, powers and authority with respect to the Hotel required
or desirable for the performance of Franchisee’s obligations hereunder. To the extent that the Lease Agreement provides that any of the obligations of Franchisee hereunder are to be performed by Owner, Franchisee agrees that it shall cause
Owner to perform such obligations in accordance with this Agreement; provided that Franchisee acknowledges and agrees that neither the existence of this Lease Agreement nor any terms thereof that require Owner to perform obligations of Franchisee
hereunder shall serve as an assignment of such obligation to Owner (or Franchisor’s consent thereto) or shall relieve Franchisee of any obligations under this Agreement and Franchisee covenants that Lease Agreement shall in no way limit or
restrict Franchisor’s rights or remedies under this Agreement. 
  

	II.	TERM 

 The term of this Agreement shall begin on the date
first set forth above and shall expire on the date that is twenty (20) years after the Effective Date. Franchisor and Franchisee agree that this Agreement and the franchise granted by this Agreement are not renewable, and Franchisee agrees that
it has no expectation that it will receive any renewal rights. 
  

	III.	FEES 

 A. Franchisor acknowledges having received from
Franchisee an application fee of Four Hundred Dollars ($400) per guest room in the Hotel or Fifty Thousand Dollars ($50,000), whichever is greater, which fee was paid by Franchisee to Franchisor in consideration for the administrative and other
expenses incurred by Franchisor in processing Franchisee’s application. Franchisee acknowledges and agrees that the application fee is not refundable. Franchisee shall have no right to expand the number of rooms at the Hotel beyond the number
initially approved by Franchisor. If Franchisee proposes to expand the number of rooms, Franchisee must pay to Franchisor, along with its request for approval of expansion, a fee equal to the then-current application fee per guest room for each
proposed additional guest room. The additional application fee will be refundable only if the request for approval is disapproved by Franchisor, which approval or disapproval will be at the sole discretion of Franchisor. The amount refunded will be
the additional application fee less a processing charge. The additional application fee shall be non-refundable upon Franchisor’s approval of the proposed expansion. 
 B. In addition to the application fee and all other fees set forth in this Section III, Franchisee shall pay to Franchisor or its affiliates, on invoice, a charge in an amount specified by Franchisor to pay for the
following: (i) training (tuition, supplies, and in-session meals, including travel, room and board expenses) by Franchisor of the general manager and a second manager at Courtyard University plus any pre-opening or opening training (or training
in connection with a change in ownership of the Hotel) conducted by Franchisor at the Hotel, (ii) initial orientation of executives of the Franchisee at Franchisor’s headquarters (except transportation costs), (iii) purchasing,
staging, programming, installing and interfacing and upgrading of hardware and Software (as defined herein) for Franchisor’s property management system, yield management system (when made available by Franchisor), reservation system, an
administrative personal computer and electronic mail, (iv) charges in connection with the opening authorization process and the cost of manuals provided by Franchisor, and (v) any goods 

  

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or services purchased, leased or licensed by Franchisee from Franchisor or an affiliate of Franchisor and any optional or mandatory programs of Franchisor or
its affiliates in which Franchisee participates. Franchisee may acquire from a third party(ies) some of the hardware and Software, and to the extent Franchisee does so, the cost of such acquisition will not be included in the charges. 
 C. In further consideration of the franchise granted herein, Franchisee shall pay to Franchisor a continuing royalty fee per Accounting Period (as
defined herein) an amount equal to five and one-half percent (5.5%) of gross room revenues throughout the term of this Agreement. 
 D.
Franchisee shall also remit to Franchisor for each Accounting Period an amount equal to two percent (2%) of Franchisee’s gross room revenues as a contribution to the marketing fund which shall be maintained and administered by Franchisor,
or its affiliates, for the System as provided in Section IX. Franchisor warrants and represents that each System hotel operated by Franchisor shall make contributions to the marketing fund at the same percentage of gross room revenues required of
franchisees within the System. Franchisor may periodically increase the marketing fund contributions for all hotels in the System including Franchisee’s Hotel, provided the total marketing fund contribution required of Franchisee in any fiscal
year shall not exceed three percent (3%) of Franchisee’s gross room revenues. 
 E. Franchisee shall remit the reservation system
fees to Franchisor for each Accounting Period, including: (i) the percentage reservation fee, (ii) the transaction reservation fee; and (iii) the communication support fee. The communication support fee covers network line charges,
electronic messaging and lease and maintenance charges of remote communication equipment servicing Franchisee’s Hotel. Reservation system fees shall be subject to increase or decrease by Franchisor; provided, however, any increase or decrease
shall apply equally to all hotels in the System, including Courtyards by Marriott operated by Franchisor or a subsidiary of Franchisor. Franchisor reserves the right to modify or change the reservation system and the basis for computing reservation
system fees, provided the fees are computed on a fair and consistent basis for all System hotels. 
 F. Franchisee shall remit the property
management system fee to Franchisor for each Accounting Period, which fee shall be used by Franchisor to maintain Software for the property management system, including enhancements, additions, substitutions, modifications and upgrades, and to
maintain a Help Desk to provide telephone assistance on property management system operations for all System hotels (so long as such Help Desk is maintained by Franchisor) plus e-mail and access charges for each Accounting Period. The amounts
charged shall be subject to increase or decrease by Franchisor provided, however, any increase or decrease shall apply on a fair and consistent basis to all hotels in the System. 
 G. Upon implementation of Franchisor’s yield management system, Franchisee shall remit to Franchisor a support fee each Accounting Period for the
required use of Franchisor’s yield management system help desk. Franchisee may utilize the services of a revenue management analyst in addition to the required help desk. These fees are subject to increase or decrease by Franchisor, provided,
however, any increase or decrease shall apply on a fair and consistent basis to all hotels in the System with respect to the required yield management system help desk, and shall apply on a fair and consistent basis to all similarly sized hotels in
the System with respect to the services of the yield management system help desk and revenue management analyst. 
 H. All payments required
in Paragraphs III.C., III.D., and III.E.(i). shall be paid to Franchisor by the fifteenth (15th) day following the end of each Accounting Period on the gross room revenues during the preceding Accounting Period. All payments required in
Paragraphs III.B, III.E. (ii)

  

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and (iii), III.F. and III.G. shall be paid to Franchisor pursuant to the timing set forth in the invoice forwarded to Franchisee, which shall not be less
than ten (10) days after Franchisee’s receipt of the invoice. Any payment or report not actually received by Franchisor on or before such date shall be deemed overdue. If any payment is overdue, Franchisee shall pay to Franchisor, in
addition to the overdue amount, a late charge on such amount from the date it was due until paid, at one and one-half percent (1 1/2%) per Accounting Period or the maximum rate permitted by law, whichever is less. Entitlement to such late charge shall be in addition to any other remedies Franchisor may have. 
 I. “Gross room revenues” as used herein shall include all gross revenues attributable to or payable for rental of guest rooms, including,
without limitation, all credit transactions, whether or not collected, and guaranteed no-show revenue that is collected, but excluding any sales or room taxes collected by Franchisee for transmittal to the appropriate taxing authority. Gross room
revenues shall also include all lost revenues and receipts, due to the non-availability of guest rooms, included in the calculation of the proceeds from any business interruption, loss of income, or other similar insurance. Gross room revenues
shall, except to the extent inconsistent with the definition of gross room revenues above, be accounted for in accordance with the Uniform System of Accounts for the Lodging Industry, Tenth Revised Edition, 2006, as published by the Educational
Institute of the American Hotel & Lodging Association, or any later edition or revision that Franchisor approves or designates. 
 J. “Accounting Period” as used herein refers to Franchisor’s fiscal accounting and reporting period. Franchisor’s fiscal year begins on the Saturday closest to January 1 and ends on the Friday closest to
December 31, and is comprised of thirteen (13) four (4)-week Accounting Periods or twelve (12) four (4)-week Accounting Periods and one (1) five (5)-week Accounting Period, depending upon the calendar year. Notwithstanding the
foregoing, with Franchisor’s prior consent, Franchisee may use its own fiscal accounting period for purposes of computing and payment of all fees due under Paragraphs III.C., D. and E.(i). 
  

	IV.	COURTYARD BY MARRIOTT ASSOCIATION 

 If Franchisor should,
during the term of this Agreement, sanction the formation of a Courtyard by Marriott Association (hereinafter “CMA”) or such successor association as may be sanctioned by Franchisor to serve as an advisory council to Franchisor with
respect to advertising, marketing, reservations, and other matters relating to System hotels, all franchisees of the System and Franchisor shall be members of CMA. In such event, Franchisee shall pay to CMA all dues and assessments authorized by CMA
and shall otherwise maintain its membership in CMA in good standing (“good standing” means CMA dues and assessments are current, Franchisor has authorized Franchisee to operate the Hotel as a Courtyard by Marriott hotel and Franchisee is
not in default hereunder). Such fees shall be consistently applied to all franchisees in the System. On all matters on which members of CMA are authorized to vote under the bylaws of CMA, each franchisee member in good standing shall be entitled to
one (l) vote for each System hotel it has in operation; and Franchisor shall be entitled to one (l) vote for each System hotel operated by Franchisor for itself or for parties who are not franchisees. 
  

	V.	MANAGEMENT, STAFFING AND TRAINING 

 A. Franchisee shall at
all times be responsible for oversight of the Franchised Business. The operator of the Hotel, either Franchisee or a third-party management company, shall be subject to the prior approval of Franchisor. Except as may be otherwise approved in writing
by Franchisor, the Hotel will be operated by the entity (Franchisee or an approved management company) identified in Attachment A hereto, provided that, in the case of a third-party management company, 

  

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Franchisor’s approval of such operator shall be effective only upon the execution by Franchisee and such management company of a Management Company
Acknowledgment substantially identical to the form set forth at Attachment C attached hereto, and will be subject to Paragraph V.G. below. 
 1. In order to be approved by Franchisor as the operator of the Hotel, Franchisee or a proposed management company must be deemed by Franchisor, in its sole discretion, qualified to manage the Hotel. Franchisor may refuse to approve, as
operator of the Hotel, Franchisee or any proposed management company that, in Franchisor’s sole discretion, is inexperienced or unqualified in managerial skills or operational capacity or capability, or is otherwise unable to adhere fully to
the obligations and requirements of this Agreement. Franchisor may also withhold its approval if the proposed management company does not provide Franchisor with all information that Franchisor may reasonably request. It is understood that
Confidential Information (as defined herein) is, in the normal course of business, imparted to System franchisees and managers, and Franchisor will be under no obligation to approve a proposed management company or replacement management company
that is a franchisor or owner of, is under the common control of, is affiliated with, or manages hotels exclusively for the franchisor or owner of, a hotel Brand (as defined in Section XV.D.), irrespective of the number of hotels operating under
such Brand. If there are (i) twenty (20) or more full-service hotels, or (ii) fifty (50) or more limited-service hotels in the Brand, then the provisions of Section XV.D. related to “Competitors” (as defined therein)
shall apply. In the event there is a change in the control of the then current management company for any reason whatsoever, or if there is a material adverse change to the financial status or operational capacity of the management company,
Franchisee shall promptly notify Franchisor of any such change, and such management company shall be subject to reapproval in accordance with the provisions of this Paragraph V.A.1. if (i) in Franchisor’s sole discretion, a change in
control has occurred, or (ii) in Franchisor’s Reasonable Business Judgment (as defined in Paragraph XXVI.I.), there has been a material adverse change to the financial status or operational capacity of the management company that will
affect the management company’s ability to operate the Hotel. If the then-current management company becomes a franchisor or owner of, is acquired by, merges with or into, comes under the control of, becomes affiliated with, or begins to manage
hotels exclusively for the franchisor or owner of a hotel Brand, a hotel trade name that is competitive with Franchisor, irrespective of the number of hotels operating under such trade name, Franchisee shall promptly notify Franchisor of any such
change and Franchisor shall have the right to require Franchisee to terminate such management company’s relationship with the Hotel (or, if applicable, Franchisor may exercise its rights under Section XV.D.). 
 2. When Franchisor has approved in principle the management company nominated by Franchisee, Franchisee shall have the right to negotiate and execute a
management agreement with such management company for the management and operation of the Hotel, subject to the terms, conditions, and obligations of this Agreement. Prior to the management agreement becoming effective and prior to the assumption of
any rights thereunder by a management company, the management company and Franchisee must execute a Management Company Acknowledgment substantially identical to the form set forth at Attachment C attached hereto. Franchisor shall have the right to
review the management agreement to ensure that it is consistent with the terms and conditions of this Agreement and the Management Company Acknowledgment. 
 B. Franchisee shall, as prescribed in the Manual, employ qualified personnel sufficient to staff all positions at the Hotel. All personnel employed by Franchisee as a General Manager, a Department Manager, a Sales
Manager or a Reservation Manager shall, prior to assuming their duties at the Hotel, attend and successfully (as defined by Franchisor) complete Franchisor’s management training programs. All subsequent personnel employed by Franchisee in the
positions of General Manager, 

  

 7 

 
Department Manager and Reservation Manager also must successfully complete Franchisor’s management training program within ninety (90) days after
commencement of such employment. Franchisee must inform Franchisor when a change in such management personnel occurs. Franchisor may periodically make available other required or optional training courses to Franchisee’s personnel, as well as
other programs, conferences, seminars and materials, and Franchisee shall insure that such personnel as Franchisor may direct shall satisfactorily complete any required training within the time specified. Franchisor may conduct pre-opening and
opening training (or training in connection with a change of ownership of the Hotel), as determined by Franchisor, for all departments at the Hotel, and Franchisee shall pay such training fees as specified by the Franchisor for such training.
Franchisee shall provide complimentary accommodations at the Hotel for Franchisor’s trainers during the pre-opening and opening training (or training in connection with a change of ownership of the Hotel). All training shall be provided at such
times and locations and for such duration as Franchisor may designate. Franchisee shall pay to Franchisor the applicable tuition fees as specified in the Manual or otherwise in writing by Franchisor for any required training (including the general
manager conference, regardless of whether Franchisee’s personnel attend such conference), and any optional training or meetings attended by Franchisee’s personnel. Franchisee shall also be responsible for Franchisee’s employees’
travel expenses and room, board and wages during any training. Franchisor reserves the right to require, as a condition of providing training, that personnel employed by Franchisee execute confidentiality agreements prepared by Franchisor.

 C. Franchisee’s General Manager, Department Managers, Sales Manager and Reservation Manager shall devote their full time to the
management and operation of the Hotel, and such persons shall not be employed in any other capacity by Franchisee or its affiliates without the express written consent of Franchisor. Franchisee covenants and agrees that the Hotel shall not, under
any circumstance, be managed by a person or persons who have not successfully completed, within ninety (90) days of employment in such capacity, Franchisor’s management training program. 
 D. Franchisee shall cause all employees of Franchisee, while working at the Hotel, to wear uniforms as specified in the Manual; to present a neat and
clean appearance; and render competent and courteous service to guests of the Hotel. 
 E. Neither party will initiate personal contact to
employ any person, without prior written consent of the other party, who is at that time employed by the other party or another System franchisee. 
 F. If the Hotel is not operated by Franchisee, but is operated by a management company approved by Franchisor, (i) the provisions of Paragraphs V.B., V.C., V.D. and V.E. relating to Franchisee’s general manager and other
employees, shall apply equally to the general managers and other employees of the management company, and (ii) Franchisor shall have the right to communicate directly with the management company or the managers at the Hotel as to matters
relating to the operation and promotion of the Hotel. 
 G. Notwithstanding anything to the contrary set forth in this Agreement, the
Management Company Acknowledgment and/or Franchisor’s Quality Assurance Program, if, during the term of this Agreement, the Hotel is placed in the Yellow Zone for any two consecutive tracking periods or in the Red Zone for any single tracking
period under Franchisor’s Quality Assurance Program, then Franchisor may require, in its sole discretion, Franchisee to replace the then-current management company for the Hotel (the “Manager”) with a management company that has been
approved by Franchisor to operate the Hotel. Such replacement shall occur within sixty (60) days from the receipt by 

  

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Franchisee (or first refusal of delivery) of a written notice by Franchisor advising Franchisee that it must replace the Manager. If Franchisee fails to
replace Manager in accordance with the terms of this Paragraph V.G., then Franchisee shall be in material default under this Agreement and shall have thirty (30) days from receipt by Franchisee (or first refusal of delivery) of a written notice
of default from Franchisor to cure such default and provide evidence of such cure to Franchisor. If Franchisee fails to cure the default within such 30-day period, Franchisor may, at its option, terminate this Agreement and all rights granted
hereunder effective immediately upon the expiration of such 30-day period. For purposes of this Paragraph V.G., capitalized terms not otherwise defined in this Agreement shall have the meanings set forth under Franchisor’s Quality Assurance
Program, as modified from time to time, and the Yellow Zone and Red Zone may be substituted with equivalent standards of unacceptable performance under such program as modified. 
  

	VI.	OPERATION OF THE HOTEL 

 A. Franchisee understands and
acknowledges that each and every standard, specification and procedure of the System is essential in order to maintain the exceptional quality and guest service of Courtyard by Marriott hotels and enhance public acceptance of, and demand for,
Courtyard by Marriott hotels. Franchisee shall conduct the Franchised Business in strict conformity with the standards, specifications and procedures set forth in the Manual (as described below at Section XI.), which standards, specifications and
procedures shall be applied consistently to all System hotels; provided, however, if the market area or the physical peculiarities of a hotel in the System warrant, in the Reasonable Business Judgment of Franchisor, a deviation from such provisions,
then in such event Franchisor may allow such deviation. Franchisee shall not deviate from the requirements of the Manual, as it may be modified by Franchisor, and shall not otherwise operate in any manner that reflects adversely on the System, the
Proprietary Marks, the goodwill associated therewith or Franchisor’s rights therein, or interferes with or impairs the use of the property as a System hotel. 
 B. Franchisee shall use the Hotel premises solely for the operation of the Franchised Business and refrain from using or suffering the use of the premises for any other purpose or activity at any time. Franchisee
shall not provide, or allow others to provide, any guest service at the Hotel except as prescribed in the Manual. 
 C. Franchisee shall
ensure that no part of the Hotel or the System, without limitation, is used to further or promote (i) any lodging business (including any other hotel operated by Franchisee or in which Franchisee or a principal of Franchisee holds an interest)
operated under a trade name or trademark not owned by Franchisor or its affiliates, including without limitation advertising or promotion of hotels, vacation or time-sharing facilities (or any similar product sold on a fractional or other basis with
use rights on a weekly or other periodic basis), conference centers or other lodging products, or (ii) except as expressly permitted in the Manual, any business or concession at the Hotel including, but not limited to, car rental agencies,
airline counters or gift shop (if the gift shop is not operated by Franchisee), unless the Franchisee first obtains the prior written consent of Franchisor, which consent may be withheld at Franchisor’s sole discretion. Franchisee shall use
every reasonable means to encourage the use of System hotels everywhere by the traveling public; provided, however, nothing herein shall prohibit, and Franchisee agrees to participate in, any program specified by Franchisor for referring prospective
customers to other hotels when the customers cannot be accommodated by Franchisee’s Hotel or any other System hotel. Nothing herein shall prohibit Franchisee or an affiliate of Franchisee from developing, operating or promoting other hotels or
lodging facilities so long as Franchisee satisfies the provisions of Paragraphs VI.A., B. and C. of this Agreement. 
  

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 D. Franchisee shall provide food and beverage service in the Hotel in conformity with the standards and
specifications prescribed in the Manual to insure the highest degree of quality and service. Franchisee agrees: 
 1. To use any restaurant
premises and lounge solely for the operation of the business franchised hereunder; keep any restaurant and lounge open and in normal operation for such minimum hours and days as Franchisor may prescribe; and refrain from using or suffering the use
of the premises for any other purpose or activity at any time without first obtaining the written consent of Franchisor; 
 2. to maintain
in sufficient supply, and use at all times, only such food and beverage products and ingredients, supplies, paper goods, dinnerware and furnishings as conform with Franchisor’s standards and specifications, and to refrain from deviating
therefrom without Franchisor’s prior written consent; 
 3. to sell or offer for sale only the menu items and beverages prescribed in
the Manual or otherwise approved in writing by Franchisor; to sell or offer for sale all required menu and beverage items and prepare them in accordance with Franchisor’s standards; and to discontinue selling and offering for sale any items as
Franchisor may, in its discretion, disapprove in writing at any time; and 
 4. to use only menus, signs and promotional displays and other
materials that comply with the style, pattern and design prescribed in the Manual or otherwise approved in writing by Franchisor. With respect to the offer and sale of all menu items and beverages, Franchisee shall have sole discretion as to the
prices to be charged. 
 E. Franchisee shall honor at the Hotel all credit cards specified in the Manual. Franchisee also agrees to
participate in all customer surveys and guest satisfaction audits and offer all guest services, which may include complimentary services, as Franchisor may prescribe for System hotels including, without limitation, programs and services for senior
citizens, children and frequent guests. Additionally, Franchisee shall participate in travel agent programs, any complaint resolution and other programs as Franchisor may reasonably establish for the System, which programs may include, without
limitation, providing complimentary rooms or refunds to guests. 
 F. Franchisor shall administer a quality-assurance program for the System
that may include conducting periodic inspections of the Hotel and guest satisfaction audits and surveys to ensure compliance with System standards. Any such program to survey guests will be as set forth in the Manual, and such program may be
modified by Franchisor. Franchisee’s failure to maintain acceptable results in Franchisor’s quality assurance program will be a material default under this Agreement, giving Franchisor the right to terminate this Agreement pursuant to
Section XVII. Franchisee hereby grants to Franchisor and its representatives the right to enter upon the premises of the Hotel at all reasonable times, with or without prior notice, for the purpose of conducting inspections. Franchisee shall
(i) provide lodging, if available, without charge to Franchisor’s representatives during such time as may reasonably be necessary to complete the inspections, (ii) cooperate fully with Franchisor’s representatives during the
inspections, and (iii) take all steps reasonably necessary to correct any deficiencies detected within the time specified by Franchisor. Franchisee shall provide all information requested by Franchisor for the purpose of Franchisor’s
conducting guest satisfaction audits and surveys. 
  

 10 

	VII.	FURNISHING AND MAINTAINING THE HOTEL 

 A. Franchisee shall,
at Franchisee’s expense, purchase or lease and install at the Hotel all fixtures, equipment, furnishings, furniture, a telephone system, facsimile machine, copier, signs, computer terminals and hardware and related equipment for the property
management system, reservation system and all other items (“FF&E”) specified by Franchisor for the System. Franchisee shall also install and maintain, or arrange to have installed and maintained at the Hotel, all coin-operated vending
machines specified by Franchisor for the System. Franchisee shall refrain from installing or permitting to be installed at the Hotel, without Franchisor’s prior written consent, any FF&E, electronic or video games, vending machines or any
other items not previously approved by Franchisor. The size, form, color scheme, content (except for prices to be charged) and location of all signs, advertisements and graphic materials displayed in any public area or guest rooms at the Hotel shall
be as prescribed in the Manual or otherwise approved in writing by Franchisor. Franchisee shall obtain and display at the Hotel, in accordance with applicable laws and regulations, in prominent locations approved by Franchisor, one or more
illuminated exterior signs meeting Franchisor’s standards and specifications and purchased from a source previously approved by Franchisor. 
 B. Franchisee shall use only such FF&E, supplies and other goods and services at the Hotel that conform to Franchisor’s standards and specifications. Franchisor may specify for System hotels a particular model or brand of FF&E
that may be available from only one manufacturer or supplier. Additionally, Franchisor may, in its discretion, specify that certain food products, FF&E, communication systems, supplies and other goods and services be purchased only from
Franchisor or sources designated or approved by Franchisor. If Franchisee wishes to obtain any FF&E, supplies or other goods and services for which Franchisor has established a standard or specification from a source that Franchisor has not
previously approved as meeting its standards and specifications, Franchisee shall submit a written request to Franchisor and provide such other information and samples as are necessary for Franchisor to determine whether the item and source meet
Franchisor’s then-current criteria. Provided that Franchisee complies with Franchisor’s processes and procedures regarding approval of alternate or additional manufacturers or suppliers, Franchisor shall respond to such requests within a
reasonable period of time. Franchisee shall not purchase any FF&E and other capital items for the Hotel unless such purchase is from a source designated as “approved” by Franchisor or unless Franchisor has approved in writing that the
item proposed by Franchisee meets Franchisor’s standards and specifications. Prior to seeking approval from Franchisor to purchase “soft goods” and “case goods” FF&E from an unapproved source, or where the Hotel will be
using a non-prototypical guestroom, Franchisor may require Franchisee to prepare models of the basic types of rooms (double/double, king and/or single) to be used in constructing or renovating the Hotel, furnish the same with the FF&E proposed
for use therein, and provide Franchisor any opportunity to inspect the model rooms to determine whether such FF&E proposed for use therein satisfies the Standards. Franchisor may modify its standards and specifications in its sole discretion.
Franchisor reserves the right, at its option, to revoke its approval as to future purchases if the source or the item fails to continue to meet Franchisor’s standards and specifications. 
 C. Franchisee shall maintain the Hotel, including, without limitation, all signs (interior and exterior), parking areas, entrance ways, landscaping, and
all other facilities and appurtenances in first-class condition. In connection therewith, Franchisee shall make, at Franchisee’s sole cost and expense, all additions, alterations, repairs and replacements of signs and other FF&E as
Franchisor may reasonably direct; and Franchisee shall not make any material alterations to the Hotel without first obtaining the prior written consent of Franchisor. 
  

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 D. After approximately the fifth (5th) anniversary of the Opening Date and each five (5) year
period thereafter (or such longer period as provided in the System standards), Franchisor shall have the right to require that Franchisee upgrade the Hotel at Franchisee’s sole cost and expense to conform to the building décor and trade
dress and FF&E required under Franchisor’s then-current System standards, (which standards shall be applied consistently throughout the System for hotels of similar age), including, without limitation, such FF&E replacements,
remodeling, redecoration and modifications to existing improvements as may be necessary to do so. Franchisee shall submit its plans for such upgrading and remodeling to Franchisor for its review and approval prior to commencing same. Upgrades to the
Hotel required by Franchisor pursuant to this Paragraph VII.D., considering the then current System standards and requirements and the current structural design of the Hotel, shall be subject to Franchisor’s Reasonable Business Judgment.
Franchisee shall complete, within the time reasonably specified by Franchisor, upgrading and remodeling of the Hotel as required by Franchisor pursuant to this Paragraph VII.D., and Franchisee acknowledges that its failure to do so, except for
delays that may be caused by the occurrence of events constituting force majeure, shall constitute a material default under this Agreement giving Franchisor the right to terminate this Agreement pursuant to Paragraph XVII.B. 
 E. Recognizing the importance of FF&E replacements, remodeling, redecoration and modifications to existing improvements that may become necessary for
Franchisee to undertake pursuant to this Section VII., Franchisee agrees as follows: 
 1. In order to provide funds to accomplish the
significant FF&E replacements, remodeling, redecoration and modifications to existing improvements that may become necessary or required pursuant to this Section VII., Franchisee shall establish, at a bank selected by Franchisee, an escrow
reserve account (the “Reserve”), which Reserve shall be funded on a monthly basis. The Reserve shall not be used for (i) repairs, alterations, improvements, renewals or replacements to the Hotel building’s structure or to its
mechanical, electrical, heating, ventilating, air conditioning, plumbing or vertical transportation systems, which structure and operating systems shall be maintained in good repair and condition (ii) any of the renovation requirements (as set
forth in the Addendum and further described under the Scope of Work attached as Exhibit A to the Addendum). 
 2. Franchisee shall transfer
into the Reserve each month, an amount equal to five percent (5%) of gross revenues (as defined herein) each year throughout the term of this Agreement. The term “gross revenues” as used in this Section includes gross room revenues,
as well as the revenues from all other operations of the Hotel, including but not limited to revenue from Hotel restaurant, lounge, banquet, meeting, catering, convention, event, dining and other food or beverage service operations. 
 3. At the end of each year, any amounts remaining in the Reserve shall be carried forward to the next year. Such amounts carried forward shall not be
credited against or decrease the amount otherwise required to be deposited in the Reserve in the next year. 
 4. At the request of
Franchisor, Franchisee shall prepare an estimate (“Renovation, Replacement and Renewal Estimate”) of the expenditures necessary each year from the Reserve for the necessary replacements and renewals of FF&E and the significant
renovations set forth in this Section VII to be made during the ensuing year and shall submit the Renovation, Replacement and Renewal Estimate to Franchisor for its review and approval. Additionally, at the request of Franchisor, Franchisee shall
each year provide plans covering the next succeeding five (5) years that (i) address renovations, replacements and renewals of FF&E required to comply with the Standards (as defined herein), and (ii) identify the availability of
funding for same. 
  

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 5. Franchisee acknowledges that the percentage deductions for the Reserve set forth in Paragraph
VII.E.2. may not be sufficient to keep the Reserve at the levels necessary to make the replacements and renewals to the Hotel’s FF&E of the nature described in this Section VII. that are required to maintain the Hotel in accordance with
Franchisor’s System requirements. In the event the available funds in the Reserve are insufficient to properly maintain the Hotel in accordance with the provisions of this Agreement, Franchisee will promptly provide the necessary additional
funds, which additional amounts will not be credited against or otherwise decrease amounts required to be deposited in the Reserve in subsequent years. 
  

	VIII.	RESERVATION, PROPERTY MANAGEMENT AND YIELD MANAGEMENT SYSTEMS 

 A. As long as Franchisee is in compliance with all material terms of this Agreement, Franchisor shall make available to Franchisee’s Hotel, the reservation system provided by Franchisor for all System hotels, which system may be
modified or changed by Franchisor. Franchisee acknowledges that offering the public a single, efficient reservation service is essential to the goodwill, reputation and success of the System. Franchisee shall participate during the term of this
Agreement in the reservation system and shall observe all terms and conditions of participation as determined by Franchisor. Franchisee shall be solely responsible for notifying the reservation system office (or such other office as Franchisor may
designate in writing) of any changes in Franchisee’s room rates. Franchisee shall in no event charge any guest a rate higher than the rate specified to the guest by the reservation system center at the time the guest’s reservation was
made. Such rate shall be the rate most recently provided to the reservation system office, according to the records of such office, by Franchisee prior to the guest’s having made such reservation. 
 B. Franchisee, at its expense, shall purchase, install and maintain at the Hotel all equipment necessary for participation in the reservation system
provided by Franchisor, including any future enhancements, additions, substitutions or other modifications specified by Franchisor. Franchisee, at its expense, shall purchase, install and maintain at the Hotel all computer software and accompanying
documentation (including all future enhancements, upgrades, additions, substitutions, and other modifications thereof) provided to Franchisee by or through Franchisor and/or third parties designated by Franchisor for use by System hotels
(“Software”). Franchisee shall also be responsible for telephone line charges for connecting Franchisee’s reservation equipment to the system, for the cost of supplies used in the operation of the equipment and for all other related
expenses. 
 C. In the event Franchisee fails to pay, when due, royalties, marketing fund contributions, reservation system fees, property
management system fees or other sums related to the Franchised Business owed to Franchisor or its affiliates or is otherwise in material default under this Agreement, Franchisor may, if such default is not cured within the applicable cure period,
pursuant to Section XVII, after notice to Franchisee, suspend Franchisee’s Hotel from the reservation system for so long as Franchisee remains in default. Franchisee waives all claims against Franchisor arising from Franchisee’s suspension
from the reservation system pursuant to this Paragraph. 
 D. Franchisor has developed (or may engage a third party to develop) for all
System hotels a property management system (“PMS”) and a yield management system. Franchisor shall provide to Franchisee specifications and all required applications Software for PMS, the yield management system and a personal computer
used for administrative matters (“Admin PC”), which may include a designated supplier(s) for hardware and/or Software. Franchisee shall, at its expense, purchase, install, maintain and use the PMS, yield management system and Admin PC
hardware and install and use all required Software. 
  

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 E. As part of the reservations system, yield management system, and PMS, Franchisee shall use, at
Franchisee’s sole cost and expense, the communications system(s) specified or otherwise approved in writing by Franchisor for System hotels. 
 F. All Software, and all electronic access to Franchisor systems and data, provided to Franchisee in connection with the System, whether provided on the Effective Date or at any time thereafter (collectively, “Electronic
Systems”), shall at all times remain the sole property of Franchisor or any third-party vendors, as applicable, and as a condition to using such Electronic Systems, Franchisee shall execute the form electronic systems license agreement attached
hereto as Attachment D (the “Electronic Systems License Agreement”). Franchisee shall at all times treat the Electronic Systems as confidential. Franchisee acknowledges that Electronic Systems will be modified, enhanced, replaced, become
obsolete, that new Electronic Systems will be created to meet the needs of the System and hotels operating in it and the continual changes in technology, and that any such new Electronic Systems shall be subject to the terms of the Electronic
Systems License Agreement. If from time to time during the term of this Agreement Franchisor determines that it is advisable or necessary to amend the Electronic Systems License Agreement or have a new Electronic Systems License Agreement executed
by Franchisee as a result of the creation, modification, enhancement, replacement or obsolescence of any Electronic Systems, Franchisee, upon the request of Franchisor, shall, as required by Franchisor, execute the then current form of Electronic
Systems License Agreement or an amendment to the Electronic Systems License Agreement. Franchisee agrees that Franchisee shall, at its expense, purchase, install, maintain and use the Electronic Systems required by Franchisor during the term of this
Agreement. 
  

	IX.	ADVERTISING AND MARKETING 

 A. Franchisee shall be
responsible at its own expense for providing local advertising, marketing, promotional and public relations programs and activities for the Hotel, all in accordance with the Manual or otherwise approved in writing by Franchisor. All advertising by
Franchisee in any medium shall be conducted in a dignified manner and shall conform to such standards and requirements as Franchisor may prescribe. Franchisee shall submit to Franchisor (through the mail, return receipt requested), for its prior
approval, samples of all advertising and promotional plans and materials and public relations programs that Franchisee desires to use, including, without limitation, any materials in digital, electronic, or computerized form, or in any form of media
now or hereafter developed (e.g., materials to be made available through a computer or telecommunications network such as the Internet), that have not been either provided or previously approved by Franchisor. Any advertising, marketing or sales
concepts, programs or materials proposed or developed by Franchisee for its Hotel and approved by Franchisor may be used by other System hotels without any compensation to Franchisee. 
 B. Recognizing the value of marketing and advertising to all System hotels, Franchisee agrees that Franchisor or its designee shall administer a
marketing fund (“Fund”) for the System as follows: 
 1. The Fund shall be used on behalf of the System for advertising and
marketing, including, without limitation, any and all costs associated with developing, preparing, producing, directing, administering, conducting, maintaining and disseminating advertising, marketing, promotional and public relations materials,
programs, campaigns, sales and marketing seminars and training programs and activities of every kind and nature, through media now existing or hereafter 

  

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developed, including producing and disseminating a Courtyard by Marriott Directory, conducting marketing research and administering and maintaining guest
programs (except for complimentary guest services to be provided by the Hotel pursuant to Paragraph VI.E. hereof), customer surveys and guest satisfaction audits, advertising/public relations agency fees and expenses, production and media costs, and
administering and maintaining any part of frequent traveler programs. All sums paid by Franchisee, other Courtyard by Marriott franchisees and Franchisor to the Fund, plus any interest or other income earned from such contributions, shall be
maintained in a separate account from the other funds of Franchisor and shall be used to defray any of Franchisor’s reasonable administrative costs and overhead Franchisor incurs in directing and administering the Fund including, without
limitation, the cost of collecting and accounting for the Fund. The Franchisor has the right to make loans to the Fund, and is entitled to receive interest on those loans. The actual advertising and marketing program activities that will be
supported by the Fund may change and shall be determined by Franchisor. 
 2. Franchisor or its designee shall direct all advertising,
promotional and public relations programs using Franchisor’s Reasonable Business Judgment over the concepts, materials and media used in such programs and activities and the placement and allocation thereof. Franchisee acknowledges that, with
respect to advertising, the Fund is intended to maximize general public recognition, acceptance and use of the System and that Franchisor and its designees undertake no obligation in administering the Fund to make expenditures that are equivalent or
proportionate to Franchisee’s contribution, or to ensure that any particular franchisee benefits directly or pro rata from expenditures by the Fund. 
 3. The parties anticipate that all contributions to the Fund shall be expended during the taxable year within which the contributions are made. 
 4. The Fund is not an asset of Franchisor. An accounting of the operation of the Fund shall be prepared annually and shall be available to Franchisee.

 5. Franchisor reserves the right to terminate the Fund and establish other methods for advertising and marketing the System in
Franchisor’s Reasonable Business Judgment. The Fund shall not be terminated, however, until all monies in the Fund have been expended for the purposes described in this Paragraph IX.B. 
 6. When collateral materials are produced, all hotels in the System will receive an equitable portion of the materials. Should the Hotel require an
additional amount of any collateral material, the Hotel shall pay for the costs of such additional material. 
 C. In connection with the
initial opening of the Hotel for business, Franchisee shall conduct an advertising and marketing campaign as prescribed by Franchisor or as otherwise agreed upon by Franchisee and Franchisor. 
 D. Franchisee agrees to the listing of the Hotel in the Courtyard by Marriott Directory for so long as one is produced by Franchisor, and Franchisee
shall furnish to Franchisor such information as Franchisor may request for that purpose. Franchisee shall, as set forth in Paragraph IX.F., determine the rates for the Hotel that appear in the Directory. Franchisor shall have no liability for the
failure of any hotel to honor any Directory rates. Franchisee agrees to not charge higher rates than those that Franchisee causes to be published in the Directory and to comply with such requirements with respect to the Directory as may be specified
in the Manual. 
  

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 E. Franchisor may establish and coordinate cooperative advertising, marketing and sales programs,
customer satisfaction programs, frequent traveler programs, travel agency programs and other programs or activities among System hotels (including the Hotel). These programs or activities may be on a local, regional or national basis or based on the
market orientation of System hotels, and they may include participation by other lodging products of the Marriott Companies. Franchisee shall participate in such programs and activities as Franchisor may prescribe, and such programs and activities
may (at Franchisor’s option) be paid for partially or wholly by the Fund or outside the Fund on a pro rata or other fair and consistent basis by the participants. 
 F. Franchisee is responsible for setting its own prices and rates, although Franchisor may prohibit certain types of charges or billing practices that Franchisor determines are misleading or otherwise detrimental to
the System, such as incremental fees for services that guests would normally expect to be included in the room charge, or require that Franchisee price consistently in various distribution channels. Franchisor may recommend or suggest prices or
rates for the products and services offered by Franchisee, including in connection with Franchisee’s participation in various sales or revenue management programs, account management programs, and/or other consulting services or promotions
offered by Franchisor and its affiliates. Franchisor’s recommendations or suggestions concerning prices or rates are not mandatory, Franchisee is ultimately responsible for determining the prices or rates at which it offers its goods and
services, and Franchisor’s recommendations and suggestions shall not be deemed a representation or warranty by Franchisor that the use of such suggested or recommended prices or rates will produce, increase or optimize Franchisee’s
profits. Franchisee shall honor any price to which it commits in connection with its participation in programs or promotions. 
  

	X.	PROPRIETARY MARKS AND INTELLECTUAL PROPERTY 

 A. Franchisor
represents with respect to the Proprietary Marks that: 
 1. Franchisor is the owner of all right, title, and interest in and to the
Proprietary Marks or has a license to grant Franchisee’s use thereof; 
 2. Franchisor will take all steps reasonably necessary to
preserve and protect the ownership and validity of such Proprietary Marks; and 
 3. Franchisor will use reasonable efforts to assure that
all System franchisees use the Proprietary Marks only in accordance with the System and standards and specifications attendant thereto. 
 B.
With respect to Franchisee’s use of the Intellectual Property (as herein below defined) pursuant to this Agreement: 
 1. Franchisee
shall use the Intellectual Property only in the manner authorized and permitted by Franchisor; 
 2. Franchisee shall use the Intellectual
Property only for the operation of the Hotel franchised hereunder at the Approved Location; 
 3. During the term of this Agreement,
Franchisee shall identify itself as the owner of the Hotel in conjunction with any use of the Proprietary Marks, including, but not limited to, invoices, order forms, receipts, business cards and contracts, as well as in a notice of such content and
form and at such conspicuous locations at the Hotel as Franchisor shall designate in the Manual; 
  

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 4. Franchisee’s right to use the Intellectual Property is limited to such uses as are authorized
under this Agreement, and any unauthorized use thereof shall constitute an infringement of Franchisor’s rights; 
 5. Franchisee shall
not use the Intellectual Property to incur any obligation or indebtedness on behalf of Franchisor; 
 6. Franchisee shall not use the names
“Courtyard,” “Courtyard by Marriott” or “Marriott” (or any of the Proprietary Marks or marks or names that are in Franchisor’s sole opinion similar thereto) as part of its corporate or legal name or in connection
with any other business activity or venture (other than the Hotel), or apply for trademark or service mark registration or domain name registration of any Proprietary Mark, any variation thereof or any mark similar to any Proprietary Mark in the
United States or any other jurisdiction; 
 7. Franchisee shall comply with Franchisor’s instructions in filing and maintaining any
required trade name or fictitious name registrations and shall execute any documents deemed necessary by Franchisor to protect the Proprietary Marks or maintain their validity and enforceability (Franchisor shall pay any required filing or similar
governmental fee incurred by Franchisee resulting from its compliance with Franchisor’s instructions pursuant to this sub-paragraph); and 
 8. In the event that litigation involving the Intellectual Property is instituted or threatened against Franchisee, or Franchisee receives notice of any infringement, Franchisee shall promptly notify Franchisor in writing and shall
cooperate fully in defending or settling such litigation; Franchisor shall take actions in its Reasonable Business Judgment necessary to defend or settle such litigation and shall indemnify and hold Franchisee harmless against any and all claims
that Franchisee’s use of the Proprietary Marks, in accordance with the terms of this Agreement, infringes upon the rights of any other party, as well as the costs, including reasonable attorneys’ fees, of defending against such claims.

 C. Franchisee understands and acknowledges that: 
 1. Franchisor is the owner (or licensee as set forth above at Paragraph X.A.1.) of all right, title, and interest in and to the Intellectual Property and the goodwill associated therewith and symbolized by the
Proprietary Marks; 
 2. the Proprietary Marks are valid and serve to identify the System and those who are franchised under the System;

 3. any and all Intellectual Property is subject to change, addition and deletion, and if any such action is taken by Franchisor,
Franchisee shall bear the cost of conforming the Hotel and the Franchised Business to any such change, addition or deletion; 
 4.
Franchisee shall not directly or indirectly contest the validity of the ownership of the Intellectual Property; 
  

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 5. Franchisee’s use of the Intellectual Property and the System pursuant to this Agreement,
including without limitation, any addition or modification to the System proposed by Franchisee and adopted by Franchisor, shall not give Franchisee any ownership interest or other interest in or to the Intellectual Property or the System, except
the nonexclusive license granted herein; 
 6. any and all goodwill arising from Franchisee’s use of the Intellectual Property and the
System shall inure solely and exclusively to Franchisor’s benefit, and upon expiration or termination of this Agreement and the franchise granted herein, no monetary amount shall be assigned as attributable to any goodwill associated with
Franchisee’s use of the System or the Intellectual Property; 
 7. the right and license of the Intellectual Property granted hereunder
to Franchisee is nonexclusive, and Franchisor thus may itself use and grant licenses to others to use the Intellectual Property; and establish, develop, and license other systems that use the Intellectual Property and the System without offering or
providing Franchisee any rights in, to, or under such other systems; and 
 8. the Intellectual Property will be used for marketing of
Franchisor’s and its affiliates’ lodging products and business operations only and will not be used in any combined sales or marketing activities by Franchisee with any other products, concepts, brands, or services without the prior
written approval of Franchisor, which approval may be granted or withheld in Franchisor’s sole discretion; any such unapproved combined sales and marketing effort by Franchisee will constitute a default under this Agreement. 
 D. “Intellectual Property” means: (i) all Software, including the data and information processed or stored thereby; (ii) the Manual
and all brochures, directives and other information issued by or on behalf of Franchisor for use in the operation of the Hotel or any other hotel in the System; (iii) customer information, customer lists and Guest Profile Data (as defined
below); (iv) all Proprietary Marks; and (v) all Confidential Information, and all other information, materials, and copyrightable or patentable subject matter developed, acquired, licensed or used by Franchisor or any of its affiliates in
the operation of the Hotel or in any other hotel in the System. The foregoing shall apply regardless of the form or medium involved (e.g., paper, electronic, tape, tangible or intangible). “Guest Profile Data” means each personal guest
profile and information regarding guest preferences, including, without limitation, any information derived from or contained in any frequent traveler program. 
  

	XI.	SYSTEM STANDARDS MANUAL 

 A. Franchisor has provided to, or
made available to, Franchisee Franchisor’s compilation (the “Manual”) of operating rules, procedures and standard operating procedures, systems, guides, requirements, standards, specifications and controls for hotels in the System
(the “Standards”). The Manual may be in hard paper copy or it may be made available to Franchisee in digital, electronic or computerized form or in some other form now existing or hereafter developed that would allow Franchisee to view the
contents thereof. If the Manual (or any changes thereto) is provided in a form other than paper copy, Franchisee shall pay any and all costs to retrieve, review, use or access the Manual. Franchisee shall conduct the Franchised Business in strict
compliance with the Manual as it may be modified by Franchisor. The provisions of the Manual shall be consistently applied by Franchisor to all hotels in the System; provided, however, if the market area or the physical peculiarities of a hotel in
the System warrant, in the Reasonable Business Judgment of Franchisor, a deviation from such provisions, then in such event Franchisor may allow such deviation. 
  

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 B. Franchisee shall at all times treat the Manual, all revisions thereto, and any other manuals created
for or approved for use in the operation of the Hotel, and the information contained therein as confidential, and shall use all reasonable efforts to maintain such information as confidential. Franchisee shall not at any time, without
Franchisor’s prior written consent, copy, duplicate, record or otherwise reproduce the foregoing materials, in whole or in part, or otherwise make the same available to any unauthorized person. 
 C. The Manual shall at all times remain the sole property of Franchisor. 
 D. Franchisor may in its sole discretion revise in any way whatsoever the contents of said Manual. Franchisor shall provide to Franchisee a copy of all revisions and additions to the Manual, and Franchisee expressly
agrees to comply with each new or changed standard. At Franchisor’s sole option, such versions and additions may be provided via hard paper copy or made available to Franchisee in digital, electronic or computerized form or in some other form
now existing or hereafter developed that would allow Franchisee to view the contents thereof. 
 E. Franchisee shall at all times ensure that
Franchisee’s copy of said Manual is kept current and up-to-date, and in the event of any dispute as to the contents of said Manual, the terms of the Manual then being provided to, or made available to, new franchisees shall be controlling.
Franchisee shall maintain the Manual in a safe and secure location, shall take all reasonable measures to prevent unauthorized access thereto, whether any attempted unauthorized access takes the form of physical access or access via computer or
telecommunications networks or otherwise and shall report the theft or loss of the Manual, or any portion thereof, immediately to Franchisor. At a minimum, Franchisee shall, in the case of computer and telecommunications networks, use the latest
available firewall and similar technology to prevent unauthorized access. 
  

	XII.	CONFIDENTIAL INFORMATION 

 Franchisee shall not, during the
term of this Agreement or thereafter, without Franchisor’s prior written consent, which consent may be granted or withheld in Franchisor’s sole discretion, copy, duplicate, record, reproduce, in whole or in part, or otherwise transmit or
make available to any unauthorized person any of the following information (collectively, “Confidential Information”): the Manual, any other manuals or documents created for or approved for use in the System or in the design, construction
or operation of the Hotel, any Software and Guest Profile Data and accompanying documentation developed for the System or elements thereof, or any other confidential information, knowledge, trade secrets, business information or know-how obtained
through the use of any part of the System or concerning the System or the operation of the Hotel, which may be communicated or provided to Franchisee, or of which Franchisee may be apprised, by virtue of Franchisee’s operation of the Hotel
under this Agreement or its access to the System. Franchisee may divulge such Confidential Information only to such of Franchisee’s employees or agents as must have access to it in order to operate the Hotel, provided such employees or agents
are apprised of the confidential nature of such information prior to it being divulged and are bound by confidentiality obligations substantially similar to those set forth herein; all other persons shall be deemed “unauthorized” for
purposes of this Agreement. Franchisee shall be liable to Franchisor for any breaches of the confidentiality obligations in this Section XII. by its employees and agents; provided, however, although Franchisor reserves its rights to pursue all
rights and remedies against such agents, and to pursue its rights and remedies against Franchisee for any breaches by such agents for injunctive relief or damages, Franchisor, however, will not terminate this Agreement for the first breach of this
provision by such agents of Franchisee if Franchisee is otherwise complying herewith. Franchisee shall maintain the Confidential Information in a safe and secure location and shall 

  

 19 

 
immediately report to Franchisor the theft or loss of all or any part of the Confidential Information. The contents of the Manual, all Software, and all
other information, knowledge, know-how or other data that Franchisor designates as confidential shall be deemed confidential for purposes of this Agreement. Franchisor shall not disclose such financial information related to Franchisee (as opposed
to the Hotel) that Franchisee designates as confidential at the time Franchisee provides it to Franchisor (“Franchisee Confidential Financial Information”) to any unauthorized third party without the consent of Franchisee if such
information is not already in the public domain at the time Franchisee delivers it to Franchisor or at such later date of disclosure. Franchisor shall have the right to use and disclose any information concerning the operating results of the Hotel,
such as average daily rate, occupancy, RevPAR, or such other information that is entered into the Franchisor’s PMS, reservations and other systems without first obtaining the consent of Franchisee. 
  

	XIII.	ACCOUNTING AND RECORDS 

 A. Beginning on the Effective Date
and throughout the remainder of the term of this Agreement, Franchisee shall maintain and preserve, for at least five (5) years from the dates of their preparation, full, complete and accurate books, records and accounts in accordance with
generally accepted accounting principles consistently applied and in the form and manner prescribed in the Manual or otherwise in writing. Franchisee’s obligation to preserve such books, records and accounts shall survive the termination
hereof. 
 B. Upon the request of Franchisor, Franchisee shall, at Franchisee’s expense, submit to Franchisor by the fifteenth
(15th) day of each Accounting Period after the Opening Date, including the first partial Accounting Period if the Opening Date is on other than the first day of an Accounting Period, a statement covering the immediately preceding Accounting
Period in the form prescribed by Franchisor, accurately reflecting all gross room revenues, the source and amounts of all other revenues generated at the Hotel, room occupancy and rates, reservations data, and such other data or information as
Franchisor may require. Additionally, Franchisor’s property management system may poll the Hotel’s room revenue results daily. 
 C. Upon the request of Franchisor, Franchisee shall, at Franchisee’s expense, submit to Franchisor an unaudited quarterly and/or annual profit and loss statement for the Hotel (in the form prescribed by Franchisor) and a balance sheet
within thirty (30) days of the end of each fiscal quarter and/or fiscal year during the term hereof. Each statement shall be signed by Franchisee attesting that it is true and correct. 
 D. Franchisee shall, at its expense, submit to Franchisor, for review and audit, such other forms, periodic and other reports, records, information and
data relating to Franchisee, the Hotel and the Hotel’s marketing, sales and guests as Franchisor may reasonably designate, in the form and at the times and places reasonably required by Franchisor, upon request and as specified in the Manual or
otherwise in writing. Franchisor shall have the right to access the Hotel’s PMS and reservations system directly to obtain marketing, sales and guest information, and Franchisee shall take all actions necessary to provide such access.

 E. Franchisor or its designated agent shall have the right at all reasonable times, and upon reasonable notice to Franchisee, to examine
and copy, at its expense, all books, records, accounts and tax returns of Franchisee related to the operation of the Hotel during the preceding five (5) years. Franchisor also shall have the right, at any time, and upon reasonable notice to
Franchisee, to have an independent audit made of these books, accounts and records of Franchisee related to the operation of the 

  

 20 

 
Hotel. Franchisee shall provide lodging, if available, without charge to Franchisor’s agents during the time as may reasonably be necessary to complete
such audits and to render such other assistance as may reasonably be requested. If an inspection should reveal that payments have been understated in any report to Franchisor, Franchisee shall immediately pay to Franchisor upon demand, the amount
understated plus interest from the date such amount was due until paid. The rate of interest shall be one and one-half percent (1 1/2%) per Accounting Period or the maximum rate permitted by law, whichever is less, from the date such amount was due. If an inspection discloses an understatement of three percent (3%) or more for the period being inspected,
Franchisee shall, in addition, reimburse Franchisor for any and all costs and expenses connected with the inspection (including, without limitation, reasonable accounting and attorneys’ fees). The foregoing remedies shall be in addition to any
other remedies Franchisor may have. If an inspection should reveal that Franchisee has made overpayments to Franchisor, the amount of any such overpayment, without interest, shall be credited against future payments due and payable to Franchisor by
Franchisee hereunder. 
 F. Upon the request of Franchisor: (i) Franchisee, if a natural person or persons, shall submit to
Franchisor a list of all owners of this franchise and the interest held by each; (ii) Franchisee, if a partnership, shall submit to Franchisor a list of all partners and the interest in Franchisee held by each; (iii) Franchisee, if a
corporation, shall submit to Franchisor a list of all shareholders and the interest in Franchisee held by each; provided, however if Franchisee’s shares are publicly held, the list of shareholders required shall include only those who own five
percent (5%) or more of the shares outstanding; or (iv) Franchisee, if a limited liability company, shall submit to Franchisor a list of all members of the limited liability company and the interest in Franchisee held by each. 

 

	XIV.	INSURANCE 

 A. Franchisee, at its expense for the term of
this Agreement shall procure and maintain such insurance as may be required by the terms of any lease or mortgage on the premises where the Hotel is located, and in any event no less than the following: 
 1. Property Insurance 
 a. Property
insurance (or builder’s risk insurance during any period of construction or renovation) including boiler and machinery coverage on the Hotel building(s) and contents against loss or damage by fire, lightning, windstorm, and all other risks
covered by the usual all-risk policy form, all in an amount not less than ninety percent (90%) of the full replacement cost thereof and a waiver of co-insurance and agreed amount endorsement. Said policy shall also include coverage for
landscape improvements and law and ordinance coverage in reasonable amounts. 
 b. Business interruption insurance covering at least twelve
(12) months’ loss of profits and necessary continuing expenses including franchise fees for interruptions caused by any occurrence covered by the insurance referred to in a., c and d. in this Section. Such business interruption insurance
shall name Franchisor as an additional insured as its interest may appear. 
 c. If the Hotel is located in whole or in part within an area
identified by the federal government as having a special flood hazard, flood insurance in an amount not less than the maximum coverage available under the National Flood Insurance Program and excess flood coverage with reasonable limits, but in no
event less than ten percent (10%) of the full replacement cost of the Hotel building and contents, including business interruption coverage in an amount not less than that set forth in Paragraph XIV.A.1.b. above. 
  

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 d. If the Hotel is located in an “earthquake prone zone” or “windstorm prone zone”
as determined by the U.S. Geological Survey or the insurance industry, earthquake and windstorm insurance in an amount not less than the probable maximum loss less any applicable deductibles, including business interruption coverage in an amount not
less than that set forth in Paragraph XIV.A.1.c. above, all as determined by a recognized earthquake engineering firm. 
 2. Workers’
Compensation insurance in statutory amounts on all employees of the Hotel and Employer’s Liability Insurance in amounts not less than $1,000,000 per accident/disease. 
 3. Comprehensive or Commercial General Liability Insurance for any losses arising or pertaining to the Hotel or its operation, with combined single
limits of $1,000,000 per each occurrence for bodily injury and property damage. If the general liability coverages contain a general aggregate limit, such limit shall be not less than $2,000,000, and it shall apply in total to this Hotel only by
specific endorsement. Such insurance shall be on an occurrence policy form and shall include premises and operations, independent contractors, blanket contractual, products and completed operations, advertising injury, employees as additional
insureds, broad form property damage, personal injury, incidental medical malpractice, severability of interests, innkeeper’s and safe deposit box liability, and explosion, collapse and underground coverage during any construction, renovation,
upgrading and/or remodeling. 
 4. Liquor Liability (applicable when the Franchisee distributes, sells, serves, or furnishes alcoholic
beverages) for combined single limits of bodily injury and property damage of not less than $1,000,000 each occurrence. 
 5. Business Auto
Liability including owned, non-owned and hired vehicles for combined single limits of bodily injury and property damage of not less than $l,000,000 each occurrence. 
 6. Umbrella Excess Liability on a following form in amounts not less than $24,000,000 if the Hotel is four or five stories in height above ground or $14,000,000 if the Hotel is three stories or less in height in
excess of the liability insurance required under Paragraphs XIV.A.2. through 5. immediately above. Such coverage shall apply in total to the Hotel only by specific endorsement. Franchisor shall have the right to require Franchisee to increase the
amount of coverage if the number of floors of the Hotel above ground is greater than five or if, in Franchisor’s Reasonable Business Judgment, such an increase is warranted. 
 7. Fidelity insurance coverage or a fidelity bond in an amount not less than $250,000 per occurrence. 
 8. Such other insurance as may be customarily carried by other hotel operators on hotels similar to the Hotel. 
 B. The following general insurance requirements will be satisfied by Franchisee. 
 1. All insurance under Paragraph XIV.A.1.b. and A.3. through 8. shall by endorsement specifically name as unrestricted additional insureds Franchisor,
any affiliate of Franchisor designated by Franchisor, and their employees and agents. All insurance required hereunder will be specifically endorsed to provide that the coverages will be primary and that any insurance carried by any additional
insured will be excess and non-contributory. 
  

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 2. Any deductibles or self-insured retentions maintained by Franchisee (excluding deductibles for high
hazard risks in high hazard geological zones, such as earthquake and windstorm, which shall be as required by the insurance carrier) shall not exceed $25,000, or such higher amount as may be approved in writing in advance by Franchisor. 

3. All insurance purchased in compliance herewith shall be placed with insurance companies reasonably acceptable to Franchisor and licensed,
authorized or registered to do business in the state where the Hotel is located. Such licensing requirement shall not apply to those insurers providing Umbrella Excess Liability above $5,000,000 under Paragraph XIV.A.6. 
 4. All insurance required hereunder shall contain an endorsement whereby the policies shall not be canceled, non-renewed, or materially changed without
at least thirty (30) days prior notice to Franchisor. Franchisee shall deliver to Franchisor (Attention: Insurance Department), a certificate of insurance (or certified copy of such insurance policy if requested by Franchisor) evidencing the
coverages required herein and setting forth deductibles and the amount thereof, if any. Renewal certificates of insurance (or certified copies of such insurance policy if requested by Franchisor) shall be delivered to Franchisor not less than ten
(10) days prior to their respective inception dates. 
 5. All insurance required hereunder may be effected under policies of blanket
insurance that cover other properties of Franchisee and its affiliates so long as such blanket insurance fulfills the requirements herein. 
 6. Franchisee’s obligation to maintain the insurance hereunder shall not relieve Franchisee of its obligations under Section XXI. 
 7. All insurance shall be satisfactory to Franchisor in accordance with standards and specifications set forth in the Manual or otherwise in writing. Should Franchisee for any reason fail to procure or maintain the insurance required by
this Agreement or as revised for all franchisees by the Manual or otherwise in writing, Franchisor shall have the right and authority (without however any obligation to do so) to immediately procure such insurance and to charge the cost thereof to
Franchisee, which charges, together with a reasonable fee for Franchisor’s expenses in so acting, shall be payable by Franchisee immediately upon demand. 
  

	XV.	TRANSFERABILITY OF INTEREST 

 A. Franchisee understands and
acknowledges that the rights and duties set forth in this Agreement are personal to Franchisee, and that Franchisor has granted this franchise in reliance on the business skill, financial capacity, and character of Franchisee and its general
partners, controlling shareholders or controlling individuals. Franchisee shall retain ownership of the Hotel except as may be otherwise approved by Franchisor in writing. Accordingly, neither Franchisee nor any immediate or remote successor to any
part of Franchisee’s interest in this franchise, or any individual, partnership, corporation, or other legal entity that directly or indirectly owns or controls any interest (other than interests of limited partners) in this franchise or in
Franchisee, shall sell, assign (collaterally or otherwise), transfer, convey, mortgage, grant a security interest or otherwise encumber (each, a “Transfer”) any direct or indirect interest in this franchise (including any ownership
interest in Franchisee or any controlling (greater than 15%) interest in any entity that controls Franchisee, but excluding interests of limited 

  

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partners, if any), and no Transfer of this Agreement, the Franchised Business, or a substantial portion of the assets (including building and real estate) of
the Franchised Business shall occur without the prior written consent of Franchisor. In the event that Franchisor determines in its Reasonable Business Judgment that it is necessary to retain outside counsel to complete the Transfer, Franchisor
shall have the right to require Franchisee to pay its outside counsel fees in connection with such Transfer. Except as otherwise provided in this Section XV and Section XVI, any Transfer addressed in the immediately preceding sentence, by operation
of law, sale of stock or otherwise, not having the prior written consent of Franchisor will be a material default under this Agreement giving Franchisor the right to terminate this Agreement pursuant to Paragraph XVII.B.4. and seek injunctive relief
as well as monetary damages. Notwithstanding anything to the contrary in this Agreement, Franchisor shall have the right to withhold its consent to any Transfer of any interest in this Agreement, Franchisee or any entity that controls Franchisee if
Franchisee is in default hereunder. 
 B. Except as prohibited under Paragraph XX.F., Franchisor shall not require approval of the Transfer
of all or any part of the assets of the Franchised Business (excluding this franchise, this Agreement, and any stock, partnership or other interests in Franchisee) to banks or other lending institutions that are not a Competitor (as defined herein)
or an affiliate of a Competitor for purposes of any refinancing or as collateral securing a loan made directly to or for the benefit of the Franchised Business. 
 C. Subject to Paragraph XV.D, Franchisor shall not unreasonably withhold its consent to a Transfer of any interest in this franchise, Franchisee, this Agreement, the Franchised Business, or in a substantial portion of
the assets (including building and real estate) of the Franchised Business; provided, however, if a Transfer, alone or together with other previous, simultaneous or proposed Transfers, would result in the Transfer of a controlling interest (as
reasonably determined by Franchisor) in this franchise, Franchisee, the entity that controls Franchisee, this Agreement, or the Franchised Business, or substantially all of the assets (including building and real estate) of the Franchised Business,
Franchisor may, in its sole discretion, require any or all of the following as a condition of its approval: 
 1. Franchisee shall satisfy
all of Franchisee’s accrued monetary obligations to Franchisor, its subsidiaries and affiliates, and shall execute a general release in a form prescribed by Franchisor of any and all claims against Franchisor, its subsidiaries, affiliates, and
their respective officers, directors, agents and employees; 
 2. Franchisee shall provide Franchisor with a true and complete copy of the
purchase and sale agreement or similar document covering the transaction; 
 3. the proposed transferee shall submit to Franchisor an
application, in the form prescribed by Franchisor, for a new franchise agreement to replace this Agreement for its unexpired term, and shall pay to Franchisor a transfer fee (which fee shall be refunded, less Ten Thousand Dollars ($10,000) to cover
Franchisor’s cost of processing the application, in the event the application is disapproved). The amount of the transfer fee shall be equal to the amount of the application fee then being charged by Franchisor per room for System franchises
for new development multiplied by the number of rooms in the Hotel or the minimum amount per hotel then being charged by Franchisor for System franchises for new development, whichever amount is greater. In the event that Franchisor determines in
its Reasonable Business Judgment that it is necessary to retain outside counsel to complete the Transfer, Franchisor shall have the right to require Franchisee to pay its outside counsel fees in connection with such Transfer. If, prior to the
submission of an application, Franchisee desires 

  

 24 

 
Franchisor to review the Hotel to determine the renovations necessary to bring the Hotel into good repair and to conform the Hotel to Franchisor’s then
current standards to transfer, Franchisor may charge its then current Property Improvement Plan (“PIP”) fee (currently, Five Thousand Dollars ($5,000)) to cover Franchisor’s costs associated with such PIP and consent review under this
Paragraph XV.C. If Franchisor enters into a new franchise agreement with the transferee for this Hotel within six (6) months after the PIP and a full transfer fee has been paid to Franchisor in connection therewith, the PIP fee paid to
Franchisor will be refunded or credited against other amounts due from Franchisee to Franchisor at the time of the Transfer. Franchisor also shall have the right to charge Franchisee its costs to inspect the Hotel to evaluate compliance with
Franchisor’s Fire Protection and Life Safety standards at the time of such Transfer. Franchisor reserves the right to reject an application for a Transfer if (i) Franchisor, in its Reasonable Business Judgment, deems the transferee’s
proposed debt service to be too great to permit the transferee to successfully operate the Hotel under the System or (ii) the proposed transferee or the proposed management company, or any of their respective affiliated entities (other than
those holding interests as limited partners only), is a Competitor (as defined in Paragraph XV.D.) or fails to satisfy the requirements of Section V.A.1. In all events, the transferee will be required to certify in writing that (a) Franchisor
did not endorse, recommend or concur with the terms of the Transfer, (b) Franchisor did not comment upon any financial projections submitted by Franchisee to the transferee, or (c) Franchisor did not participate in the decision of the
price to be paid, which decision was made without any intervention, support or participation by Franchisor; 
 4. transferee shall
demonstrate to Franchisor, in its sole discretion, that the transferee and its shareholders or general partners, as appropriate, meet Franchisor’s managerial and business standards and have the aptitude and ability to conduct the Franchised
Business (as may be evidenced by prior related business experience or otherwise); possess good moral character, business reputation and credit rating; and have adequate financial resources and capital to operate the Franchised Business; 

5. Franchisor and the transferee will, upon approval of transferee’s application, enter into a new franchise agreement for the unexpired term of
this Agreement, which shall require transferee to upgrade the Hotel to conform to Franchisor’s then-current System standards and requirements, and which new franchise agreement shall contain the standard terms (except for duration) then being
issued for new franchised hotels under the System; 
 6. transferee’s General Manager, Department Managers, Sales Manager and
Reservation Manager shall, prior to assuming management of the Hotel, successfully (as defined by Franchisor) complete the management training program then being offered by Franchisor; and 
 7. if transferee is a real estate investment trust or form of publicly-held entity, or if the Hotel will be operated by a third-party management
company, Franchisor may, in its Reasonable Business Judgment, require transferee to establish and maintain a reserve to support the cost of future repairs and replacements of furniture, furnishings and equipment at the Hotel; transferee shall
deposit into such reserve each month throughout the term of the new franchise agreement (or through the then unexpired term of this Agreement) an amount equal to five percent (5%) of gross revenues or such other amount as determined by
Franchisor in its Reasonable Business Judgment. 
 D. Notwithstanding anything to the contrary in this Agreement, no Transfer of the Hotel,
an interest in the Hotel, an interest in Franchisee or an interest in an entity that controls Franchisee shall be made to any person or entity that owns, has an interest in, has management responsibility for, or is an affiliate, principal, officer
or director of, a person or entity that owns or has an interest in a hotel 

  

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brand, trade name, trademark, system or chain (a “Brand”) that is comprised of at least (i) twenty (20) full-service or (ii) fifty
(50) limited-service hotels (a “Competitor”). For the purposes of defining “Competitor” herein, “full-service” hotels are those hotels that typically offer at least three (3) meals per day and have an average
of three thousand (3,000) square feet or more of meeting space per hotel in the hotel Brand, and “limited-service” hotels are all hotels that are not “full-service” hotels. A person or entity shall not be deemed to be a
Competitor if such person or entity has an interest in such a Brand merely as a franchisee or as a mere passive investor that has no control or influence over the business decisions concerning the Brand at issue, such as limited partners in a
partnership or as a non-controlling mere stockholder in a corporation. If there is a proposed Transfer to a Competitor of the Hotel, Franchisee’s interest in this Agreement, Franchisee or an affiliate of Franchisee, or an interest in either
Franchisee or such affiliate, and Franchisee or any such affiliate (or such Competitor, as the case may be) wishes to accept such offer, Franchisee shall give notice thereof to Franchisor, stating the full name and identity of the prospective
purchaser or tenant, as the case may be, including the names and addresses of the owners of the capital stock, partnership interests or other proprietary interests of such prospective purchaser or tenant, the price or rental and all terms and
conditions of such proposed transaction, together with all other information with respect thereto that is requested by Franchisor and reasonably available to Franchisee. Within thirty days after receipt by Franchisor of such notice from Franchisee,
Franchisor, in its sole discretion, shall elect by notice to Franchisee one of the immediately following four alternatives: 
 1. If the
proposed Transfer is a sale or lease of the Hotel for cash consideration, Franchisor (or its designee) shall have the right to purchase or lease the Hotel premises and related property at the same price or rental and upon the same terms and
conditions (other than any terms relating to the Brand of the Hotel) as those set forth in such offer from (or to) a Competitor. In such event, Franchisee and Franchisor (or its designee) shall promptly enter into an agreement for sale or lease at
the price or rental and on terms consistent with such offer. 
 2. If the proposed Transfer is a purchase or lease of all or a portion of
the ownership interests or assets (which includes the Hotel) of Franchisee or any affiliate of Franchisee, or a merger with or into Franchisee or any such affiliate, or the acquisition of Franchisee’s interest in this Agreement, or any sale or
lease of the Hotel involving non-cash consideration, or other form of Transfer, Franchisor (or its designee) shall have the right to purchase or lease the Hotel premises and related property at the purchase or lease price pursuant to terms and
consistent with such offer (other than the non-cash nature of the consideration and any provision relating to the Brand of the Hotel) as agreed to by the parties. If the parties are unable to agree as to a purchase or lease price and terms within
fifteen (15) days of Franchisor’s election, the purchase or lease price of the Hotel premises and related property shall be determined in the manner provided below. Within thirty (30) days after the expiration of such fifteen
(15) day period, Franchisor and Franchisee shall each obtain, at its own expense, an appraisal of the fair market value of the Hotel from a nationally recognized appraiser of hotel properties comparable to the Hotel. In determining the fair
market value, the appraisers shall be instructed to assume that the Hotel is not subject to a management agreement but is subject to the existing Franchise Agreement. If, after receiving the appraisals, the parties agree on the fair market value of
the Hotel, such agreed fair market value shall constitute the purchase or lease price hereunder. If, after receiving such appraisals, the parties are not able within ten (10) days to agree on such fair market value, the purchase or lease price
shall be determined by “baseball arbitration” in Washington, D.C. in accordance with the Arbitration Rules for the Real Estate Industry of the American Arbitration Association then in effect (“AAA Rules”) as modified by this
Agreement. The parties shall jointly select a third party to act as the sole arbitrator (the “Arbitrator”) to determine the fair market value of the Hotel, and such Arbitrator shall be a person having at least ten (10) years’
recent professional experience as to the subject matter in question and shall be qualified to act as an Arbitrator in accordance with the AAA Rules. If the parties do not agree on an 

  

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Arbitrator with such qualifications within fifteen (15) days after the expiration of such ten (10) day period referred to above, the Arbitrator
shall be appointed by the American Arbitration Association in Washington, D.C. in accordance with the AAA Rules. 
 (i) The Arbitrator shall
be instructed and obligated to decide, within thirty (30) days after appointment, whether the appraisal submitted by Franchisor or the appraisal submitted by Franchisee most accurately reflects the fair market value of the Hotel based upon the
appraisals submitted and such information as is normally relied upon by an appraiser of hotels and real estate. Each party agrees to fully cooperate and provide all information requested by the Arbitrator related to the determination of fair market
value hereunder. 
 (ii) The Arbitrator’s choice of appraisal shall be in writing, shall constitute the purchase price hereunder, and
shall be final, conclusive and binding on the parties as an “award” under the AAA Rules and may be enforced, by a court of competent jurisdiction. The expenses of the arbitration shall be borne equally by the parties to the arbitration.
Franchisor (or its designee) shall have the right, at any time within thirty (30) days of being notified in writing of the decision of the Arbitrator as aforesaid, to either (a) purchase the Hotel premises and related property at the
valuation fixed by the Arbitrator, or (b) terminate this Agreement pursuant to Paragraph XV.D.3. 
 3. To place Franchisee in default
and terminate this Agreement in accordance with Section XVII.C., in which event Franchisee shall be obligated to pay to Franchisor the applicable liquidated damages as set forth at Paragraph XVIII.E. 
 4. To consent to such Transfer, which consent shall be on such terms and conditions as Franchisor may require, in its sole discretion. 
 Notwithstanding anything to the contrary set forth in this Paragraph XV.D, if a Competitor proposes to acquire all of the interests of an affiliate of Franchisee, and
such affiliate does not, directly or indirectly, own, lease or operate any hotels operating under a trade name owned by a Marriott Company, then in such event, with respect to such Transfer, Franchisor shall not have any right of first refusal to
purchase the Hotel or right to terminate this Agreement as provided above in this Paragraph XV.D. 
 This Paragraph XV.D. shall survive termination of this
Agreement for any reason if, prior to such termination, any event specified in Paragraphs XV.D., XV.E. or XV.F. occurs, as a result of which Franchisor has exercised (or has the right to exercise) the right of first refusal provided herein. In
addition, this Paragraph XV.D. shall survive termination of the Agreement in accordance with Paragraph XV.H. 
 E. If the Transfer to a
Competitor is by foreclosure, judicial or legal process, such as execution and levy, or by any other means, Franchisor shall have the right to purchase the Hotel upon notice to Franchisee. If the parties are unable to agree as to a purchase price
and terms within thirty days of Franchisor’s notice, the fair market value of the Hotel premises and related property shall be determined by arbitration pursuant to the procedure set forth in Paragraph XV.D.2. This provision shall survive the
termination of this Agreement under Paragraph XVII.A in connection with the Competitor’s actions under this Paragraph XV.E. 
 F. If
Franchisee or any of its affiliates becomes a Competitor, Franchisee shall so notify Franchisor providing the data required pursuant to Paragraph XV.D., or if Franchisor otherwise determines that Franchisee or any of its affiliates has become a
Competitor, Franchisor shall so notify 

  

 27 

 
Franchisee and assert that Franchisor has the rights set forth above at Paragraph XV.D. Provided Franchisor has received sufficient pricing and other data to
allow an informed decision, Franchisor shall make its election thereunder within thirty days of Franchisor’s receipt of such notice from Franchisee or within thirty days of Franchisor’s giving notice to Franchisee in which Franchisor
asserts that Franchisee or any of its affiliates has become a Competitor. 
 G. Franchisee acknowledges that Franchisor’s rights under
Paragraphs XV.D., XV.E. and XV.F. are real estate rights in the Hotel. Franchisor is entitled to file a record of such interest in and among the appropriate real estate records of the jurisdiction in which the Hotel is located, and Franchisee shall
cooperate as requested by Franchisor in such filing. Franchisee acknowledges and agrees that damages are not an adequate remedy in the event that Franchisee breaches its obligations under such Paragraphs XV.D., XV.E. or XV.F., and Franchisor shall
be entitled to injunctive relief to prevent or remedy such breach, without the necessity of proving the inadequacy of money damages as a remedy and without the necessity of posting a bond, in addition to such other relief to which it may be entitled
in law and equity. Such recording shall indicate that Franchisor’s rights in real estate under Paragraphs XV.D., XV.E. and XV.F. shall be subordinate only to the interests of bona fide lenders who are not Competitors or affiliates of
Competitors and who record a security interest in the Hotel, provided that any such financing and security interests comply with the requirements of Paragraph XX.F. If Franchisee Transfers the Hotel other than to a Competitor or if a controlling
portion of the ownership interests of Franchisee or any entity that controls Franchisee is Transferred to an entity other than a Competitor and this Agreement is terminated, or if for any other reason Franchisor’s rights under Paragraphs XV.D.,
XV.E. and XV.F. terminate, at the request of Franchisee or the transferee, Franchisor shall execute and deliver an instrument in recordable form to terminate the record of its interest in and among the appropriate real estate records of the
jurisdiction in which the Hotel is located. 
 H. Except for termination of this Agreement pursuant to Paragraph XV.D.3., Franchisee agrees
that Franchisor’s rights under Paragraphs XV.D., XV.E. and XV.F. above shall survive early termination of this Agreement (as opposed to expiration of this Agreement as set forth in Section II) and shall bind Franchisee and its affiliates, if:

 1. prior to or within six months after termination of this Agreement, a proposed Transfer to a Competitor occurs with respect to the
Hotel, Franchisee or an affiliate of Franchisee, or an interest in either Franchisee or such affiliate, and 
 2. either: 

a. this Agreement is terminated pursuant to Paragraphs XVII.A., XVII.B.1. or 4., or pursuant to Paragraph XVII.C., or pursuant to Paragraph XVII.D.
based upon Franchisee’s failure to pay any indebtedness to Franchisor or any Marriott Company when due and payable or a violation of Section X.; or 
 b. this Agreement is terminated pursuant to Paragraph XVII.A. below and an affiliate, principal or director of Franchisee obtains possession of the Hotel, or such affiliate, principal or director is the party filing
the suit or seeking the execution or foreclosure referenced in Paragraph XVII.A. 
 In addition, Franchisor’s rights under Paragraphs XV.D., XV.E. and
XV.F. shall survive any purported early termination of this Agreement (as opposed to expiration of this Agreement as set forth in Section II) by Franchisee, and shall bind Franchisee and its affiliates, if prior to or within six months after such
purported termination, a proposed Transfer to a Competitor occurs with respect to the Hotel, Franchisee or an affiliate of Franchisee, or an interest in either Franchisee or such affiliate. 
  

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 I. Subject to Paragraph XV.D., in the event of the death or mental incompetency of Franchisee or any
shareholder or partner of Franchisee, the interest of such person may be Transferred in accordance with and subject to the terms of Paragraph XV.C., provided that (i) any such Transfer shall be made within six (6) months of the date of
death or mental incompetency and (ii) the obligations of Franchisee under this Agreement are satisfied pending the Transfer, including adequate provision for management of the Hotel. 
 J. Subject to Paragraph XV.D., provided the Franchisee has executed a guarantee substantially identical to the form of guarantee attached to this
Agreement and provides to Franchisor documentation evidencing the Transfer by which the transferee expressly assumes the obligations of Franchisee under this Agreement, then in such event, the Franchisee will have the right to Transfer, without
payment of the transfer fee, this Agreement to an entity controlled by Franchisee. 
 K. Subject to Paragraph XV.D., and subject to
Franchisee’s giving prior notice to Franchisor, any individual holding an interest in Franchisee shall have the right to Transfer his/her interest in Franchisee or a portion thereof to a member of the immediate family of such individual or to
an entity in which such individual and/or a member of his/her immediate family has and retains the controlling interest; provided, however, if the transferor is Transferring a controlling interest in Franchisee, then in such event, Franchisor shall
have the right to require a guarantee, substantially identical to the form of guarantee attached to this Agreement, from any such transferor. 
 L. If Franchisee is neither a natural person nor a publicly held corporation, the stock of which is traded on a nationally recognized stock exchange (with no individual holding 5% or more of the outstanding stock), Franchisee represents
that its equity is directly and (if applicable) indirectly owned as shown on Attachment A. This Section XV will be applied by looking through or disregarding direct, indirect and intervening ownership interests in Franchisee to the extent deemed
appropriate by Franchisor in order to ascertain the ultimate beneficial ownership and/or control of Franchisee’s equity. Such ultimate or beneficial interests are referred to in this Section XV. as “equity interest.” The transfer,
creation or elimination of an equity interest by operation of law, sale of stock or otherwise, unless specifically authorized herein, will be a material default under this Agreement giving Franchisor the right to terminate this Agreement pursuant to
Paragraph XVII.B.4. 
 M. Franchisor shall have the right to Transfer this Agreement to any person or legal entity without prior notice to,
or consent of, Franchisee, provided the transferee assumes Franchisor’s obligations to Franchisee under this Agreement. Franchisee hereby acknowledges and agrees that any such Transfer shall constitute a release and novation of Franchisor with
respect to this Agreement. 
 N. Notwithstanding anything to the contrary in this Agreement, no Transfer shall be made to a Specially
Designated National or Blocked Person (as herein defined below) or to an entity in which a Specially Designated National or Blocked Person has an interest. 
  

	XVI.	SECURITY OFFERINGS 

 A. Publicly-traded securities in
Franchisee or in any entity that directly or indirectly controls Franchisee or any direct or indirect interest in the Hotel previously registered under federal securities law may be Transferred without Franchisor’s consent if (i) the
Transfer is exempt from 

  

 29 

 
registration under federal and state securities law, and (ii) the Transfer will not result in a Transfer of control (as reasonably determined by
Franchisor) in Franchisee or any entity that directly or indirectly controls Franchisee. Any Transfer of securities in Franchisee or in any entity that directly or indirectly controls Franchisee or any direct or indirect interest in the Hotel that
will result in a Transfer of control requires Franchisor’s prior written consent, which shall be conditioned upon satisfaction of the requirements of Paragraph XV.C. 
 B. In connection with any proposed public or private offering to potential investors of securities of Franchisee or any entity that directly or indirectly controls Franchisee or any direct or indirect interest in the
Hotel, Franchisee shall: 
 1. submit to Franchisor for its review at least thirty (30) days before the earliest of the date on which
any registration statement, solicitation, prospectus (preliminary or otherwise), private placement memorandum, offering circular, or similar documentation, including any amendments thereto (collectively, the “Prospectus”) is delivered to a
potential investor or filed with the Securities and Exchange Commission or any other governmental authority responsible for the regulation of the sale of securities, a copy of the proposed Prospectus, all supporting and related materials and
releases, together with a nonrefundable fee of $2,000 to reimburse Franchisor for its expense in performing the limited review of the proposed Prospectus in accordance with this Paragraph XVI; 
 2. fully, unconditionally, and in writing, indemnify and hold harmless Franchisor and its affiliates in connection with the Prospectus, and the
offering; 
 3. include in the Prospectus and all supporting and related materials and releases a disclaimer, in a form approved by
Franchisor, that Franchisor and its affiliates are not, in any way, participating in or endorsing the offering or solicitation described therein; 
 4. use any Proprietary Marks in the Prospectus and in any supporting or related materials only as approved by Franchisor in writing; 
 5. provide in the appropriate agreements and other documents related to the offering for establishment of a capital replacement reserve fund escrowing a percentage of gross room revenues, as reasonably determined by Franchisor, to assure
Franchisee’s ability to continue to meet System standards and the periodic upgrade requirements set forth in the Franchise Agreement; and 
 6. refrain from filing, publishing, issuing or releasing the Prospectus or any supporting or related materials without having received the prior written approval of Franchisor. 
 C. If the indemnification provided for in Paragraph XVI.B.2 above shall for any reason be unavailable or insufficient to hold Franchisor and its
affiliates harmless in respect of any claim, then Franchisee shall, in lieu of indemnifying Franchisor and its affiliates, contribute to the amount paid or payable by Franchisor and its affiliates as a result of any such claim, action, loss
liability, cost, and expense of any kind, including reasonable attorneys’ fees, in respect thereof, (i) in such proportion as shall be appropriate to reflect the relative benefits received by Franchisor and its affiliates on the one hand
and Franchisee and its affiliates on the other or (ii) if (but only if) the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of Franchisor and its affiliates on the one hand and Franchisee and its affiliates on the other with respect to any claim, or action in respect thereof, as well as any other relevant equitable
considerations. Franchisee and Franchisor agree that it 

  

 30 

 
would not be just and equitable if contributions pursuant to this Paragraph XVI.C were to be determined by pro rata allocation or by any other method of
allocation that does not take into account the equitable considerations referred to herein. Franchisee’s obligations under this Paragraph XVI.C shall survive the termination or expiration of this Agreement. 
 D. Franchisor’s review of the Prospectus or the information included therein will be conducted solely for the benefit of Franchisor to determine the
accuracy and completeness of any description of Franchisor’s relations with Franchisee and compliance with the other requirements of this section and not to benefit or protect any other person, and its approval shall not constitute any kind of
authorization, acceptance or agreement, endorsement or ratification of the offering or Prospectus, either express or implied. Franchisee agrees to make any and all changes to the Prospectus as Franchisor may request in its Reasonable Business
Judgment in accordance with this Section XVI. 
  

	XVII.	DEFAULT AND TERMINATION 

 A. Franchisee shall be deemed to
be in material default under this Agreement, and Franchisor may, at its option, terminate this Agreement and all rights granted hereunder without affording Franchisee any opportunity to cure the default, effective immediately upon Franchisee’s
receipt or first refusal of delivery of notice by Franchisor, (i) if Franchisee shall become insolvent or make a general assignment for the benefit of creditors, or (ii) if a petition in bankruptcy is filed by Franchisee or such a petition
is filed against and consented to by Franchisee, or (iii) if Franchisee is adjudicated bankrupt, or (iv) if a bill in equity or other proceeding for the appointment of a receiver of Franchisee or other custodian for Franchisee’s
business or assets is filed and consented to by Franchisee, or (v) if a receiver or other custodian (permanent or temporary) of Franchisee’s assets or property, or any part thereof, is appointed by any court of competent jurisdiction, or
(vi) if proceedings for a compromise with creditors under any state or federal law is instituted by, against or consented to by Franchisee, or (vii) if a final judgment remains unsatisfied or of record for ninety (90) days or longer
(unless supersede as bond is filed), or (viii) if execution is levied against Franchisee’s Hotel or other real or personal property at the Hotel, or (ix) suit to foreclose any lien or mortgage against the Hotel or other real or
personal property appurtenant thereto is initiated against Franchisee or (x) if the real or personal property of Franchisee’s Hotel shall be sold after levied upon by any sheriff, marshal, or constable; provided, however, Franchisee shall
be granted one hundred twenty (120) days to obtain dismissal of any involuntary receivership, bankruptcy or other insolvency proceeding before Franchisor will take any action regarding termination so long as no other default by Franchisee then
occurs under this Agreement. 
 B. Franchisee shall be deemed to be in material default under this Agreement and Franchisor may, at its
option, terminate this Agreement and all rights granted hereunder, upon the occurrence of any of the events in the immediately following subparagraphs (i) with respect to the following subparagraphs 1, 2, 3, 5, 8, 9 and 10 only, without
affording Franchisee any opportunity to cure the default, effective immediately upon Franchisee’s receipt of notice (or refusal of delivery), or (ii) with respect to the following subparagraphs 4, 6 and 7 only, effective upon expiration of
the cure period established by Franchisor in the notice to Franchisee if such default is then uncured: 
 1. if Franchisee fails to obtain or
loses control of the Approved Location, or Franchisee ceases to do business at the Hotel or ceases to operate the Hotel under the Proprietary Marks and System, or loses ownership or possession or the right to possession of the Hotel, or otherwise
forfeits the right to conduct the Franchised Business at the Approved Location, except as otherwise provided in Section XIX.; 
  

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 2. if a threat or danger to public health or safety results from the construction, renovations,
upgrading and/or remodeling, maintenance or operation of the Hotel franchised hereunder, and an immediate shutdown of the Hotel is reasonably determined by Franchisor to be essential to avoid substantial liability or loss of goodwill; provided,
however, Franchisor and Franchisee shall reinstate this Agreement if, within six (6) months after termination under this Paragraph XVII.B.2., the threat or danger to public health or safety is eliminated and Franchisor reasonably determines
that reopening the Hotel would not cause a substantial loss of goodwill; 
 3. if Franchisee or a principal thereof who controls Franchisee
is or has been convicted of a felony, or is or has been convicted of any other crime or offense or has engaged in a pattern or practice of acts or conduct that is likely, as a result of the adverse publicity that has occurred in connection with such
offense, acts or conduct, in the Reasonable Business Judgment of Franchisor, to adversely affect the System, the Proprietary Marks, the goodwill associated therewith, or Franchisor’s interest therein; 
 4. if Franchisee or any partner or shareholder in Franchisee purports to Transfer any rights or obligations under this Agreement or any interest in
Franchisee, the Franchised Business or the Hotel to any third party without Franchisor’s prior written consent, contrary to the terms of Sections XV. or XVI.; 
 5. if Franchisee (or its employees or agents) intentionally discloses or divulges the contents of the Manual or other trade secret, Software, or Confidential Information contrary to Sections VI., XI. or XII. hereof;

 6. if Franchisee fails to complete (except for reasons constituting force majeure), within the time specified by Franchisor, renovating,
upgrading and remodeling of the Hotel as required by Franchisor pursuant to Paragraph VII.D.; 
 7. if Franchisee fails to commence or
satisfy the requirements set forth in the Addendum attached hereto within the time set forth at Attachment A or to complete any work required in the Addendum by such other date as specified in the Addendum; 
 8. if any of the representations and warranties made by Franchisee pursuant to Section XXIII. proves to have been untrue, incorrect or incomplete when
made, deemed made, furnished or as of the date of this Agreement, or if the representations and warranties made by Franchisee pursuant to Section XXIII.B. fails to be true and correct at any time during the term of this Agreement, or if a Transfer
is made in violation of Paragraph XV.N.; 
 9. if Franchisee or any of its affiliates receives a notice of default under any financing
documents with respect to any hotel that is in the same Financed Pool (as defined in Paragraph XX.F) as the Hotel and such default is not cured within the applicable cure period; or 
 10. if Franchisee or Owner is in breach of, or default under, the Lease Agreement or Owner Agreement, and any such breach or default is not cured within
any applicable period thereunder, or if the Lease Agreement or Owner Agreement is terminated for any reason. 
 C. Franchisee shall be deemed
to be in material default under this Agreement if Franchisee or any of its affiliates becomes a Competitor (as defined at Paragraph XV.D.) or becomes affiliated with a Competitor, or Transfers an interest in Franchisee, this Agreement or the Hotel
to a 

  

 32 

 
Competitor, and, in such event, Franchisor shall have the rights provided in this Agreement at Paragraph XV.D., including, to terminate this Agreement
without affording Franchisee any opportunity to cure the default, effective immediately upon Franchisee’s receipt or first refusal of delivery of notice by Franchisor. 
 D. Franchisee shall be in material default under this Agreement for any failure to comply with any of the requirements imposed by this Agreement, as it
may be supplemented by the Manual, or to carry out the terms of this Agreement in good faith. Except as provided in Paragraphs XVII.A., XVII.B. and XVII.C. and for non-payment of any amounts due to Franchisor or its affiliates, Franchisee shall have
thirty (30) days or such longer period as specified herein after its receipt from Franchisor (or first refusal of delivery) of a notice of default, within which to remedy any default and provide evidence thereof to Franchisor. If Franchisee is
delinquent in payment of any amounts due to Franchisor and its affiliates, Franchisee shall have ten (10) business days after receipt of a notice of non-payment within which to cure such monetary default. If any such default is not cured within
that time, or such longer period as applicable law may require (or such longer period as Franchisor may, in its Reasonable Business Judgment, deem necessary to permit Franchisee to cure any non-monetary default provided Franchisee immediately
commences, diligently and in good faith pursues, and cures, such default), Franchisor shall have the right to terminate this Agreement upon notice to Franchisee. 
  

	XVIII.	OBLIGATIONS UPON TERMINATION 

 Upon termination or
expiration, this Agreement and all rights granted hereunder to Franchisee shall forthwith terminate, and Franchisee shall comply with all of the obligations applicable to the Approved Location as set forth in this Section XVIII. 
 A. Franchisee shall immediately cease operation of the Hotel as a System hotel and shall not thereafter, directly or indirectly, represent to the public
or hold itself out as a present or former franchisee of Franchisor. 
 B. Franchisee shall immediately and permanently cease to use, by
advertising or in any other manner whatsoever, the names “Courtyard,” “Courtyard by Marriott,” and “Marriott,” all variations thereof and all other Proprietary Marks of Franchisor, any other identifying characteristics
and marks of the System, and all Intellectual Property. Franchisee shall forthwith remove from its place of business, and discontinue using for any purpose, any and all signs, fixtures, furniture, furnishings, equipment, advertising materials,
stationery, supplies, forms or other articles that display the Proprietary Marks or any distinctive features or designs associated with the System. Any signs containing the Proprietary Marks that Franchisee is unable to remove within one day of
expiration or termination of this Agreement shall be completely covered by Franchisee until the time of their removal, and, in all events, removal of such signs shall occur within seventy-two hours of termination of this Agreement and the franchise
granted hereby. 
 C. Franchisee shall, at its expense, immediately make such modifications or alterations (except structural changes) as may
be necessary to distinguish the Hotel so clearly from its former appearance and other hotels operated under the System as to prevent any possibility of confusion therewith by the public, and to prevent the operation of any business at the location
of the Hotel by Franchisee or others in derogation of this Paragraph XVIII.C. (including, without limitation, removal of all distinctive physical features identifying hotels in the System, removal of all distinctive signs and emblems, and changing
of telephone numbers and other directory listings). Franchisee shall, at Franchisee’s expense, make such specific additional changes as Franchisor may reasonably request for 

  

 33 

 
this purpose. Until all modifications and alterations required by this Paragraph XVIII.C. are completed, Franchisee shall (i) maintain a conspicuous
sign at the registration desk in a form specified by Franchisor stating that Franchisee’s Hotel is no longer associated with the Courtyard by Marriott System, and (ii) until Franchisee has changed telephone numbers at the Hotel, advise all
customers and prospective customers telephoning Franchisee’s Hotel that the Hotel is no longer associated with the Courtyard by Marriott System. Franchisee expressly acknowledges that its failure to make such alterations will cause irreparable
injury to Franchisor. 
 D. Franchisee shall take such action as may be necessary to cancel any assumed name or equivalent registration that
contains the names “Courtyard,” “Courtyard by Marriott,” “Marriott” or any variation thereof and any Proprietary Mark of Franchisor, and Franchisee shall furnish Franchisor with evidence satisfactory to Franchisor of
compliance with this obligation within thirty (30) days after termination or expiration of this Agreement. 
 E. Franchisee has agreed
to operate the Hotel as a Courtyard by Marriott hotel in compliance with this Agreement for the full term of the Agreement. If Franchisee should fail to do so, Franchisee acknowledges and agrees that Franchisor would be damaged in several ways,
including but not limited to: loss of future franchise fees, loss of marketing fees used to market the System and injury to the good will in the Proprietary Marks. Franchisee further acknowledges and agrees that if this Agreement is terminated with
Special Circumstances (as defined below), Franchisor and the System will suffer greater damage because of loss of multiple hotels, which practicably may not be replaceable or, if replaceable, may take more extended periods to replace due to the
Special Circumstances. The consequences of Special Circumstances include but are not limited to significant loss of distribution in the markets served by the hotels, confusion to national account and individual customers because of brand switching
and unavailability of Franchisor Brand (as defined below) hotels in locations previously serviced under Franchisor Brands and resulting loss of customer confidence, disadvantage to Franchisor in competing for national accounts and other types of
bookings for the System, loss of foregone opportunities in markets in which the hotels were located and increased difficulty in quality System growth. Franchisee acknowledges and agrees that it is difficult to estimate the revenues of the Hotel over
a period of years and that elements of Franchisor’s damages not directly calculated from the Hotel’s revenues are inherently difficult to calculate although such damages are real and meaningful to Franchisor and the System.
Franchisor’s damages in the event of termination would not be easily ascertained, would be difficult to estimate accurately, and the proofs thereof would be burdensome and costly, and Franchisor and Franchisee agree that liquidated damages (as
calculated in Paragraph XVIII.E.2 below) are not a penalty and represent a reasonable estimate of just and fair compensation of Franchisor for the damages that it would suffer. Franchisee and Franchisor further acknowledge and agree that termination
with Special Circumstances creates greater and fundamentally different damages due to the number or types of hotels exiting the System; therefore, they agree that a distinct liquidation schedule is warranted, as described below. In the event this
Agreement is terminated, such termination shall not affect the obligations of Franchisee hereunder to take action or abstain from taking action after the termination hereof as required by this Section XVIII. As used herein, “Special
Circumstances” means that, in connection with the termination of this Agreement, one or more additional franchise, license or owner agreements between Franchisor and Franchisee, or the respective affiliates of either, are terminated as further
described in Paragraph XVIII.E.2.c., within the twelve-month period that includes the termination date of this Agreement. As used herein, “Franchisor Brand” means any brand licensed or franchised by a Marriott Company. 
 1. In the event this Agreement is terminated, Franchisor shall be entitled to recover from Franchisee, and Franchisee shall be obligated to promptly pay
to Franchisor: (i) all 

  

 34 

 
payments that have then accrued to Franchisor or its affiliates pursuant to other provisions of this Agreement up to the date of such termination, and
(ii) an amount equal to a reasonable estimate of costs and fees not yet accumulated and/or invoiced, which shall be due on the date Franchisee is notified of such amount (without limiting Franchisee’s obligations to pay to Franchisor any
payments that relate to the period prior to the date of such termination, but that are not billed to Franchisee prior to the date of such termination). 
 2. In addition to all amounts due to Franchisor pursuant to Paragraph XVIII.E.1. above, if termination of this Agreement is due to a default by Franchisee under this Agreement, Franchisee shall promptly pay to
Franchisor liquidated damages in the following amounts, as indicated below: 
 a. If
an early termination of this Agreement is due to a default by Franchisee under this Agreement, Franchisee shall promptly pay to Franchisor liquidated damages in an amount equal to (i) the sum of (x) the average of the monthly contribution
to the marketing fund under Paragraph III.D. theretofore payable to Franchisor over the immediately preceding two (2) years, plus (y) the average of the monthly royalty fee under Paragraph III.C. theretofore payable to Franchisor
over the immediately preceding two (2) years, times (ii) the lesser of (x) thirty-six (36) or (y) one-half ( 1/2) the number of months that remain in the term of this Agreement. If the Hotel has not opened or been operating as a Courtyard by Marriott pursuant to a franchise agreement for at least two (2) years (whether
pursuant to this Agreement or a franchise agreement between Franchisor on the one hand and a previous franchisee on the other hand), the average monthly royalty fee and contribution to the marketing fund for the previous two (2) years for all
hotels, on a per room basis, operated in the System in the United States (“System Average Performance”) shall be multiplied by the number of rooms at the Hotel and then such sum shall be multiplied by the lesser of thirty-six (36) or
one-half ( 1/2) the number of months that remain in the term of this Agreement to arrive at the amount of liquidated damages. If
either party believes that the System Average Performance calculation would not be representative of the projected performance of the Hotel, the party shall notify the other in writing and the amount of liquidated damages will be calculated by
substituting the projected stabilized revenue submitted by Franchisee in its application for the System Average Performance. The amounts described in this Paragraph XVIII.E.2.a. shall be referred to herein as “Liquidated Damages”. 

 b. If, in connection with the termination of this Agreement, the Hotel is Transferred to a Competitor, or any other event
specified in Paragraphs XV.D., XV.E. or XV.F. occurs, as a result of which Franchisor has the right of first refusal provided in Paragraph XV.D., and Franchisor’s right of first refusal under such Paragraph XV.D. is not effectuated for any
reason, or Franchisor elects to terminate this Agreement or condition its consent to such Transfer on the payment of Liquidated Damages, Franchisee shall pay to Franchisor an amount equal to one hundred fifty percent (150%) of the amount of the
Liquidated Damages that would otherwise be payable hereunder (“Competitor Liquidated Damages”). In the event the Transfer to a Competitor also involves Special Circumstances and the percentage multiplier, as determined in accordance with
Paragraph XVIII.E.2.c. below, pursuant to such Special Circumstances for any franchise, license or owner agreement is greater than 150%, Franchisee shall promptly pay to Franchisor Special Circumstances Liquidated Damages as defined in Paragraph
XVIII.E.2.c. below. 
 c. If an early termination due to a default hereunder by Franchisee occurs with Special Circumstances, then
Franchisee shall pay to Franchisor an amount equal to the percentage set forth in the chart below multiplied by the amount of the Liquidated Damages that would otherwise be payable hereunder (“Special Circumstances Liquidated Damages”):

  

 35 

													
	 Termination Class
	  	1-2
Agreements	 	3-4
Agreements	 	5-8
Agreements	 	9-15
Agreements	 	16-25
Agreements	 	326
Agreements
	 Franchisor Brand Hotels
	  	100%	 	100%	 	125%	 	175%	 	200%	 	300%
	 State
	  	100%	 	125%	 	150%	 	200%	 	250%	 	300%
	 Top 20% of Room Count, Royalty Contribution or GSS
	  	100%	 	125%	 	150%	 	200%	 	250%	 	300%
	 Metropolitan Statistical Area
	  	100%	 	175%	 	250%	 	300%	 	300%	 	300%
	 Hotels Over 400 Guest Rooms that are the Major Group Representation in a Secondary or Tertiary Market
	  	150% if 2	 	175%	 	250%	 	300%	 	300%	 	300%
	 Resort Designated or Hotels for Which at Least 50% of Guests are Leisure Travelers
	  	150% if 2	 	175%	 	250%	 	300%	 	300%	 	300%
	 JW Marriott Hotels
	  	150% if 2	 	175%	 	250%	 	300%	 	300%	 	300%

 For each franchise, license or owner agreement terminated, Special Circumstances Liquidated Damages will be
calculated using the largest percentage multiplier for which a Termination Class (as defined below) is applicable. By way of example, if six agreements for Franchisor Brand hotels are terminated, five of which are for hotels located in the same
State (and do not fall within another Termination Class), and the remaining agreement is for a hotel located in another State (and does not fall within another Termination Class), the percentage multiplier for each of the first five agreements shall
be 150% and the percentage multiplier for the remaining agreement shall be 125%. “Termination Class” means the grouping into which each franchise, license or owner agreement, including this Agreement, is placed to determine the percentage
multiplier to be used when calculating liquidated damages in connection with a termination under Special Circumstances. 
 In addition to all such liquidated
damages described in Paragraph XVIII.E.2, Franchisor shall have the right to recover reasonable attorneys’ fees and court costs incurred in collecting such sums plus interest (calculated pursuant to Paragraph XIII.E.) on all amounts due
pursuant to this Paragraph XVIII.E. from the date of such termination until paid. The legal remedies hereunder shall not preclude Franchisor from any equitable remedies to which it may be entitled under applicable law. Franchisee’s obligation
to pay Franchisor liquidated damages, if applicable, and other sums pursuant to this Paragraph XVIII.E. shall survive termination of this Agreement. 
 F. Franchisee shall promptly pay all sums owing to Franchisor, its subsidiaries and affiliates. In the event of termination for any default of Franchisee, such sums shall include any payment to Franchisor required
under Paragraph XVIII.E., the then-current fee charged in connection with removing the Hotel from the System, and all damages, costs and expenses, including reasonable attorneys’ fees, incurred by Franchisor in obtaining (i) injunctive or
other relief for the enforcement of any provisions of this Agreement or (ii) contested termination of this Agreement. 
  

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 G. Franchisee shall immediately turn over to Franchisor all Intellectual Property except for Proprietary
Marks, which must be removed as set forth in this Article XVIII above (all of which are acknowledged to be the Franchisor’s Property), and shall retain no copy or record of any of the foregoing, excepting only Franchisee’s copy of this
Agreement and any correspondence between the parties, and any other documents that Franchisee reasonably needs for compliance with any provision of law. In the event that Franchisor permits Franchisee to continue using any Intellectual Property
after the date of termination (such permission to be explicit and specific), such use by Franchisee shall be in accordance with the terms of this Agreement. 
 H. Franchisor shall have the right, but not the duty, to be exercised by notice of intent to do so within thirty (30) days after termination or expiration, to purchase any and all signs, advertising materials,
supplies and inventory and any other item bearing Franchisor’s Proprietary Marks, at Franchisee’s cost. With respect to any purchase by Franchisor as provided herein, Franchisor shall have the right to set off all amounts due from
Franchisee under this Agreement. 
 I. The obligations of Franchisee set forth in this Section XVIII. shall survive termination of this
Agreement. 
  

	XIX.	CONDEMNATION AND CASUALTY 

 A. Franchisee shall, at the
earliest possible time, give Franchisor notice of any proposed taking by eminent domain. If the Hotel is condemned, or such a substantial portion of the Hotel is condemned to render impractical the continued operation of the Hotel in accordance with
the System, this Agreement shall terminate upon notice by Franchisor or Franchisee to the other party, and Franchisor and Franchisee shall share equitably in the condemnation award; provided, however, Franchisor’s portion shall be limited to
compensating Franchisor for Franchisor’s lost royalty income, which amount shall not exceed the amount of the applicable liquidated damages due under Section XVIII. If a non-substantial condemnation shall occur, then in such event, Franchisee
shall promptly make whatever repairs and restoration may be necessary to make the Hotel conform substantially to its former condition, character and appearance, according to plans and specifications approved by Franchisor, and the resumption of
normal operation of the Hotel shall not be unreasonably delayed. 
 B. If the Hotel is damaged or destroyed by fire or other cause and such
damage or destruction is substantial and material, affecting over fifty percent (50%) of the Hotel, and necessitates the closing of the Hotel for a period in excess of ninety (90) days, Franchisee shall have the right to terminate this
Agreement if it elects not to repair or rebuild the Hotel upon notice to Franchisor given within ninety (90) days of such closing of the Hotel; provided, however, if subsequent to such notice and prior to the date on which the term of this
Agreement would otherwise have ended pursuant to Section II if such notice of termination had not been given (the “Term Expiration Date”), Franchisee, any of its members if it is a limited liability company or any of its affiliated
companies or any company controlled by a controlling stockholder of Franchisee if Franchisee is a corporation, or any of its general partners or any entity in which Franchisee or any of its general partners (the “Franchisee Entity”), has a
greater than fifteen percent interest in or operates a hotel; vacation, timesharing, interval or fractional ownership facility; condominium; apartment; or other lodging product at the Approved Location (the “Other Lodging Product”), which
Other Lodging Product is not operated pursuant to a license or franchise from one of the Marriott Companies, then in such event, Franchisee shall be obligated to promptly pay to 

  

 37 

 
Franchisor an amount equal to the applicable liquidated damages set forth at Paragraph XVIII.E., and the time element for calculating the amount of
applicable liquidated damages shall be the lesser of (a) thirty-six (36) months or (b) one-half ( 1/2) the
number of months then remaining between (i) the date upon which the Other Lodging Product is first operated by or for the Franchisee Entity and (ii) the Term Expiration Date. Franchisee’s obligation set forth herein shall survive
termination of this Agreement pursuant to this Paragraph XIX.B. In the event the Hotel does not close for more than ninety (90) days due to a casualty or Franchisee does not elect to terminate this Agreement in accordance with the provisions of
this Paragraph XIX.B., the Hotel shall be promptly renovated and reopened within a reasonable time in accordance with the System and pursuant to plans and specifications approved by Franchisor in accordance with Section VII. 
  

	XX.	TAXES, COMPLIANCE WITH LAWS, AND INDEBTEDNESS 

 A.
Franchisee shall promptly pay when due, all taxes levied or assessed by any federal, state or local tax authority, and any and all other indebtedness incurred by Franchisee in the conduct of the Franchised Business. Franchisee shall pay to
Franchisor an amount equal to any tax, including any sales, gross receipts or similar tax imposed as a result of the operation of the Hotel and calculated based on payments required hereunder, unless the tax is credited against income tax otherwise
payable by Franchisor. 
 B. In the event of any bona fide dispute as to liability for taxes assessed or other indebtedness, Franchisee may
contest the validity of the amount of the tax or indebtedness in accordance with the procedures of the taxing authority or applicable law; however, in no event shall Franchisee permit a tax sale or seizure by levy of execution or similar writ or
warrant, or attachment by creditor, to occur against the premises of the Hotel or any improvement thereon. 
 C. Franchisee shall comply with
all federal, state, and local laws, rules and regulations, and shall timely obtain any and all permits, certificates or licenses necessary for the full and proper conduct of the Franchised Business including, without limitation, licenses to do
business, fictitious name registration and sales tax permits, health and sanitation permits and ratings and fire clearances. Copies of all inspection reports, warnings, certificates and ratings, issued by any governmental entity during the term of
this Agreement in connection with the Hotel that indicate a violation of governmental standards or material non-compliance with any applicable law, rule or regulation, shall be forwarded to Franchisor by Franchisee within five (5) days of
Franchisee’s receipt thereof. 
 D. Franchisee shall notify Franchisor in writing within five (5) days of the commencement of any
action, suit or proceeding, and of the issuance of any order, writ, injunction, award or decree of any court, agency or other governmental instrumentality, that may adversely affect the operation or financial condition of the Franchised Business.

 E. Franchisee recognizes that Franchisee’s failure or repeated delay in making prompt payment in accordance with the terms of any
agreements, leases, invoices or statements for any purchases or leases will be detrimental to the reputation and credit standing of Franchisee, Franchisor and other System franchisees. Franchisee shall pay when due all such amounts owed in
connection with operating the Hotel. 
 F. Franchisee shall not incur or replace any indebtedness that is secured by a lien on or mortgage of
the Hotel or pledge of the stock, partnership, membership or other ownership interests in Franchisee (whether such indebtedness is incurred (i) individually on behalf of the Hotel or (ii) on a 

  

 38 

 
pooled basis with other hotels or legal entities (a “Financed Pool”)) unless the following conditions are met: (1) the terms of such
indebtedness are commercially reasonable, (2) commencing on the third anniversary of the Opening Date, the debt coverage ratio is equal to or greater than 1.3, and (3) the lender is not a Competitor or an affiliate of a Competitor. The
debt coverage ratio shall be the ratio of (a) cash available for the payment of the annual debt service payments (interest and principal) based on the cash flow from the Hotel (or hotels, including the Hotel, that are part of the Financed Pool)
(after deduction for any management fee and reserve required under such management agreement or as a condition to such financing) for the twelve (12) months immediately preceding the written commitment for such indebtedness, to (b) the
amount of such annual debt service payments. Franchisee shall give written notice to Franchisor of the component hotels and legal entities in a Financed Pool prior to incurring such indebtedness. 
  

	XXI.	INDEPENDENT CONTRACTOR AND INDEMNIFICATION 

 A. Nothing in
this Agreement creates a fiduciary relationship between the parties hereto. Franchisee is an independent contractor, and nothing in this Agreement is intended to constitute either party an agent, legal representative, subsidiary, joint venturer,
partner, employee or servant of the other for any purpose whatsoever. 
 B. During the term of the Agreement and any extensions hereof,
Franchisee shall hold itself out to the public as an independent contractor operating the business pursuant to a franchise from Franchisor and as an authorized user of the Proprietary Marks which are owned by Franchisor. Franchisee shall take such
affirmative action as may be necessary to do so, including, without limitation, exhibiting notices of that fact at the Hotel as required under Paragraph X.B.3. 
 C. Nothing in this Agreement authorizes either party to make any contract, agreement, warranty or representation on the other’s behalf, or to incur any debt or other obligation in the other’s name.

 D. Franchisor does not exercise any direction or control over the employment policies or employment decisions of Franchisee. All employees
of Franchisee are solely employees of Franchisee, not Franchisor. Franchisee is not Franchisor’s agent for any purpose in regard to Franchisee’s employees or otherwise. 
 E. Franchisee shall and hereby does indemnify and shall defend and save harmless Franchisor, its affiliates, their officers and employees, and their
respective successors and assigns, from and against all losses, costs, liabilities, damages, claims and expenses, of every kind and description, including allegations of negligence by Franchisor, its employees and agents, to the fullest extent
permitted by applicable law, and including reasonable attorneys’ fees, arising out of or resulting from the construction, renovation, upgrading, operation, alteration, remodeling, repair or use of the Franchised Business or the Hotel premises
or of any other business conducted on or in connection with the Franchised Business by the Franchisee (or any management company operating the Hotel), or because of any act or omission of the Franchisee or anyone associated with, employed by, or
affiliated with Franchisee (or any management company operating the Hotel). Franchisee shall promptly give notice to Franchisor of any action, suit, proceeding, claim, demand, inquiry, or investigation related to the foregoing. Franchisor shall in
any event have the right, through counsel of its choice, at Franchisee’s expense, to control the defense or response to any such action if it could affect the interests of Franchisor, and such undertaking by Franchisor shall not, in any manner
or form, diminish Franchisee’s obligations to Franchisor hereunder. Under no circumstances shall Franchisor be required or obligated to seek recovery 

  

 39 

 
from third parties or otherwise mitigate its losses in order to maintain a claim under this indemnification and against Franchisee, and the failure of
Franchisor to pursue such recovery or mitigate a loss will in no way reduce the amounts recoverable by Franchisor from Franchisee. The obligations of Franchisee under this Paragraph XXI.E. shall survive the termination or expiration of this
Agreement. 
  

	XXII.	APPROVALS AND WAIVERS 

 A. Approvals and consents by either
party will not be effective unless evidenced by writing signed by such party. Either party’s consent, wherever required, may be withheld if any default by the other party exists under this Agreement. 
 B. Except as otherwise provided in any written agreement executed by Franchisor and Franchisee, Franchisor makes no warranties or guarantees upon which
Franchisee may rely. Franchisor assumes no liability or obligation to Franchisee by providing any waiver, approval, consent or suggestion to Franchisee in connection with this Agreement or by reason of any delay or denial of any request therefor.

 C. No failure of a party to exercise any power reserved to it by this Agreement, or to insist upon strict compliance by the other party
with any obligation or condition hereunder, and no custom or practice of the parties at variance with the terms hereof, shall constitute a waiver of such party’s right thereafter to demand exact compliance with any of the terms herein. Waiver
by a party of any particular default by the other party shall not affect or impair such party’s rights with respect to any subsequent default of the same, similar, or different nature; nor shall any delay, forbearance, or omission of a party to
exercise any power or right arising out of any breach or default by the other party of any of the terms, provisions, or covenants hereof, affect or impair such party’s right to exercise the same. 
  

	XXIII.	REPRESENTATIONS AND WARRANTIES OF FRANCHISEE 

 A.
Franchisor entered into this Agreement in reliance upon the statements and information submitted to Franchisor by Franchisee in connection with this Agreement. Franchisee represents and warrants that all such statements and information submitted by
Franchisee in connection with this Agreement, including, without limitation, all statements made and information given in connection with any application submitted by Franchisee, are true, correct and complete in all material respects. Franchisee
agrees to promptly advise Franchisor of any material changes in the information or statements submitted. 
 B. Franchisee represents and
warrants to Franchisor that neither Franchisee (including, without limitation, any and all of its directors and officers), nor any of its affiliates or the funding sources for either is a Specially Designated National or Blocked Person. Neither
Franchisee nor any affiliate is directly or indirectly owned or controlled by the government of any country that is subject to an embargo by the United States government. Neither Franchisee nor any affiliate is acting on behalf of a government of
any country that is subject to such an embargo. Franchisee further represents and warrants that it is in compliance with any applicable anti-money laundering law, including, without limitation, the USA Patriot Act. Franchisee agrees that it will
notify Franchisor in writing immediately upon the occurrence of any event which would render the foregoing representations and warranties of this Paragraph XXIII.B. incorrect. For purposes of this Agreement, “Specially Designated National or
Blocked Person” means (i) a person or entity designated by the U.S. Department of Treasury’s Office of Foreign Assets Control from time to time as a “specially designated national or blocked person” or similar status,
(ii) a person or entity described in Section 1 of U.S. Executive Order 13224, issued on September 23, 

  

 40 

 
2001, or (iii) a person or entity otherwise identified by government or legal authority as a person with whom Franchisor, or any of the other Marriott
Companies or any of their affiliates, are prohibited from transacting business. As of the Effective Date, a list of such designations and the text of the Executive Order are published under the internet website address
www.ustreas.gov/offices/enforcement/ofac. 
 C. Franchisee represents and warrants that (i) it is a legal entity duly formed,
validly existing, and in good standing under the laws of the jurisdiction of its formation, (ii) it and its affiliates have and will continue to have throughout the term hereof the ability to perform its obligations under this Agreement, and
(iii) it has and will continue to have throughout the term hereof all necessary power and authority to execute and deliver this Agreement. 
 D. Franchisee represents and warrants that the execution and delivery of this Agreement and the performance by Franchisee of its obligations hereunder: (i) have been duly authorized by all necessary action; (ii) do not require the
consent, vote, or approval of any third parties (including lenders) except for such consents as have been properly obtained; and (iii) do not and will not contravene, violate, result in a breach of, or constitute a default under (a) its
certificate of formation, operating agreement, articles of incorporation, by-laws, or other governing documents, (b) any provision of law, regulation of any governmental body, or any judgment, writ, injunction, decision, ruling, order, decree
or award of any court or governmental authority having jurisdiction over it or any of its affiliates by which it or any of its affiliates may be bound or affected, or (c) any agreement, indenture, contract, commitment, restriction or other
instrument to which it or any of its affiliates is a party or by which it or any of its affiliates is bound. 
 E. Franchisee represents and
warrants that all of the representations and warranties in the application and any information provided in addition to the application in connection with the franchise granted herein is true, correct and complete as of the time made and as of the
date hereof, regardless of whether such was provided by Franchisee, one of its affiliates, or by a third party on behalf of Franchisee, unless Franchisee has notified Franchisor of a change in the representations and warranties or the information
and Franchisor has approved the change in writing. 
  

	XXIV.	NOTICES 

 A. Any and all notices, requests, demands,
statements and other communications required or permitted under this Agreement shall be in writing and shall be delivered personally or delivered by a nationally-recognized overnight commercial delivery service (such as Airborne Express or Federal
Express) or by certified mail, return receipt requested, to the respective parties at the following addresses unless and until a different address has been designated by written notice to the other party: 
  

			
	Notices to FRANCHISOR:	  	Marriott International, Inc.
		  	Franchise Attorney
		  	Law Department 52/923.25
		  	10400 Fernwood Road
		  	Bethesda, MD 20817
		
	with copy to:	  	Marriott International, Inc.
		  	 Vice President, Owner and Franchise Services

		  	 10400 Fernwood Road

		  	 Bethesda, MD 20817

  

 41 

			
	Notices to FRANCHISEE:	  	APPLE NINE HOSPITALITY MANAGEMENT, INC.
		  	814 East Main Street
		  	Richmond, VA 23219
		  	Attn: Krissy Gathright
		  	Email: kgathright@applereit.com

 Any notice shall be deemed to have been given at the date and time of (i) receipt or first refusal of
delivery if sent via certified mail or delivered by hand, or (ii) one (1) day after posting if sent via overnight commercial delivery service. 
 B. Notwithstanding Paragraph XXIV.A., Franchisor may provide Franchisee with routine information, the Manual and other System requirements and programs, such as the quality assurance program, including any
modifications thereto, by regular mail or by e-mail, facsimile, the internet, an extranet, or other electronic means. 
  

	XXV.	ENTIRE AGREEMENT 

 This Agreement, including the
attachments, exhibits and addenda hereto, and any execution copies thereof, the agreements executed simultaneously herewith or pursuant to, or in connection with, this Agreement, contain the entire agreement between the parties hereto as it relates
to the Approved Location as of the date hereof. Nothing in this Agreement is intended to require Franchisee to waive reliance on any representations contained in the Disclosure Document referred to in Section XXX.C. below. This is a fully integrated
agreement. No agreement of any kind relating to the matters covered by this Agreement shall be binding upon either party unless and until the same has been made in a written, non-electronic instrument that has been duly executed by the
non-electronic signature of all interested parties. This Agreement may not be amended or modified by conduct manifesting assent, or by electronic signature, and each party is hereby put on notice that any individual purporting to amend or modify
this Agreement by conduct manifesting assent or by electronic signature is not authorized to do so. 
  

	XXVI.	CONSTRUCTION AND SEVERABILITY 

 A. Unless otherwise
specified, the term “Franchisee” as used in this Agreement shall include the entity identified in the preamble to this Agreement. 
 B. Except as expressly provided to the contrary herein, each section, part, term and/or provision of this Agreement, including, but not limited to Section XXI.E., shall be considered severable; and if, for any reason any section, part, term
or provision herein is determined to be invalid, unenforceable or contrary to, or in conflict with, any existing or future law or regulation by a court or agency having valid jurisdiction, such shall not impair the operation of, or have any other
effect upon, such other sections, parts, terms and provisions of this Agreement as may remain otherwise intelligible, and the latter shall continue to be given full force and effect and bind the parties hereto; and said invalid or unenforceable
sections, parts, terms or provisions shall be deemed to be replaced with a provision that is valid and enforceable and most nearly reflects the original intent of the invalid or unenforceable provision. 
 C. Nothing in this Agreement is intended, nor shall be deemed, to confer any rights or remedies under or by reason of this Agreement upon any person or
legal entity other than Franchisor or Franchisee and such of their respective successors and assigns subject to the prior approvals set forth in Section XV. hereof. 
  

 42 

 D. Franchisee and Franchisor expressly agree to be bound by any promise or covenant imposing the maximum
duty permitted by law that is subsumed within the terms of any provision hereof, as though it were separately articulated in and made part of this Agreement, that may result from striking any of the provisions hereof and portion or portions that a
court may hold to be unreasonable and unenforceable in a final decision to which Franchisor or Franchisee, as applicable, is a party, or from reducing the scope of any promise or covenant to the extent required to comply with such a court order.

 E. All captions in the Agreement are intended solely for the convenience of the parties, and none shall be deemed to affect the meaning or
construction of any provision hereof. 
 F. All references herein to the masculine, neuter or singular shall be construed to include the
masculine, feminine, neuter or plural, where applicable, and all acknowledgments, promises, covenants, agreements and obligations herein made or undertaken by Franchisee shall be deemed jointly and severally undertaken by all the parties hereto on
behalf of Franchisee. 
 G. This Agreement may be executed in a number of identical counterparts, each of which shall be deemed an original
for all purposes and all of which shall constitute, collectively, one agreement. Delivery of an executed signature page to this Agreement by facsimile transmission shall be effective as delivery of a manually signed counterpart of this Agreement.

 H. When this Agreement provides that Franchisor may take or refrain from taking any action or exercise discretion, such as rights of
approval, to modify the System, or to make determinations, Franchisor may do so from time to time. 
 I. Except where Franchisor has reserved
“sole discretion” or as otherwise indicated in this Agreement, Franchisor agrees to use “Reasonable Business Judgment” when discharging its obligations or exercising its rights or discretion under this Agreement, including with
respect to any consents and approvals and the administration of its relationship with Franchisee. “Reasonable Business Judgment” means that Franchisor’s action or inaction has a business basis that is intended to benefit the System or
the profitability of the System, including Franchisor, regardless of whether some individual hotels may be unfavorably affected; or to increase the value of the Proprietary Marks; or to increase or enhance overall hotel guest or franchisee or owner
satisfaction; or to minimize possible brand inconsistencies or customer confusion. In the event that such obligation or exercise of discretion is unrelated to the System, standards, brand or other subjects described above, Reasonable Business
Judgment shall mean that Franchisor has a business basis and has not acted in bad faith. Franchisee shall have the burden of establishing that Franchisor failed to exercise Reasonable Business Judgment, and neither the fact that Franchisor benefited
economically from an action nor the existence of other “reasonable” alternatives will, by themselves, establish such failure. To the extent that any implied covenant, such as the implied covenant of good faith and fair dealing, is applied
to this Agreement, Franchisor and Franchisee intend that Franchisor shall not have violated such implied covenant if Franchisor has exercised Reasonable Business Judgment. 
  

 43 

	XXVII.	APPLICABLE LAW AND CURRENCY REQUIREMENT 

 A. This Agreement
takes effect upon its acceptance and execution by Franchisor in the State of Maryland, and shall be interpreted and construed under the laws thereof, which laws shall prevail in the event of any conflict of law. Nothing in this Section XXVII is
intended, or shall be deemed, to make the Maryland Franchise Registration and Disclosure Law apply to this Agreement, or the transactions or relationships contemplated hereby, if such law otherwise would not be applicable. 
 B. No right or remedy conferred upon or reserved to Franchisor or Franchisee by this Agreement is intended to be, nor shall be deemed, exclusive of any
other right or remedy herein or by law or equity provided or permitted, but each shall be cumulative of every other right or remedy. 
 C.
Nothing herein contained shall bar either party’s right to obtain injunctive relief against threatened conduct that will cause it loss or damages, under the usual equity rules, including the applicable rules for obtaining restraining orders and
preliminary injunctions. 
 D. All fees and payments required by this Agreement shall be paid in U.S.A. currency. 
 E. Each party hereby expressly and irrevocably submits itself to the non-exclusive jurisdiction of the courts of the State of Maryland, United States of
America in any suit, action, or proceeding arising, directly or indirectly, out of or relating to this Agreement; and so far as is permitted under applicable law, this consent to personal jurisdiction shall be self-operative. 
  

	XXVIII.	WAIVER OF JURY TRIAL AND PUNITIVE DAMAGES 

 FRANCHISEE AND FRANCHISOR EACH HEREBY ABSOLUTELY, IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY AND THE RIGHT TO CLAIM OR RECEIVE PUNITIVE DAMAGES IN ANY LITIGATION, ACTION, CLAIM, SUIT OR PROCEEDING, AT LAW OR IN EQUITY, ARISING
OUT OF, PERTAINING TO OR IN ANY WAY ASSOCIATED WITH THE COVENANTS, UNDERTAKINGS, REPRESENTATIONS OR WARRANTIES SET FORTH HEREIN, THE RELATIONSHIPS OF THE PARTIES HERETO, WHETHER AS “FRANCHISEE” OR “FRANCHISOR” OR OTHERWISE, THIS
AGREEMENT OR ANY OTHER AGREEMENT, INSTRUMENT OR DOCUMENT ENTERED INTO IN CONNECTION HEREWITH, OR ANY ACTIONS OR OMISSIONS IN CONNECTION WITH ANY OF THE FOREGOING. THE FOREGOING PROVISIONS OF THIS SECTION CONSTITUTE THE WRITTEN CONSENT OF FRANCHISEE
AND FRANCHISOR TO WAIVE THEIR RIGHT TO A JURY TRIAL, AS CONTEMPLATED BY CCP 631(D)(5) AND EITHER PARTY MAY SUBMIT THE PROVISIONS OF THIS SECTION TO THE APPLICABLE COURT OR JUDICIAL BODY TO EVIDENCE SUCH CONSENT OF THE PARTIES. 

 

	XXIX.	INJUNCTIVE RELIEF 

 Franchisor shall be entitled to
injunctive or other equitable or other judicial relief without the necessity of proving the inadequacy of money damages as a remedy, without the necessity of posting a bond, and without waiving any other rights or remedies at law or in equity, for
any actual or threatened material breach or violation of this Agreement or the Manual. 
  

 44 

	XXX.	FRANCHISEE ACKNOWLEDGMENTS 

 A. FRANCHISEE ACKNOWLEDGES
THAT IT DID NOT RELY ON ANY PROMISES, REPRESENTATIONS OR AGREEMENTS ABOUT THE FRANCHISOR OR THE FRANCHISE NOT EXPRESSLY CONTAINED IN THIS AGREEMENT AND THE DISCLOSURE DOCUMENT REFERRED TO IN XXX.C. BELOW IN MAKING ITS DECISION TO SIGN THIS
AGREEMENT. FRANCHISEE FURTHER REPRESENTS AND WARRANTS THAT FRANCHISOR AND ITS REPRESENTATIVES HAVE NOT MADE ANY PROMISES, REPRESENTATIONS OR AGREEMENTS, ORAL OR WRITTEN, EXCEPT AS EXPRESSLY CONTAINED IN THIS AGREEMENT AND THE DISCLOSURE DOCUMENT
REFERRED TO IN XXX.C. BELOW. 
 B. FRANCHISEE ACKNOWLEDGES THAT FRANCHISEE HAS CONDUCTED AN INDEPENDENT INVESTIGATION OF THE BUSINESS
FRANCHISED HEREUNDER, AND RECOGNIZES THAT THE BUSINESS VENTURE CONTEMPLATED BY THIS AGREEMENT INVOLVES BUSINESS RISKS AND THAT ITS SUCCESS WILL BE LARGELY DEPENDENT UPON THE ABILITY OF FRANCHISEE AS AN INDEPENDENT BUSINESSMAN. FRANCHISOR EXPRESSLY
DISCLAIMS THE MAKING OF, AND FRANCHISEE ACKNOWLEDGES THAT FRANCHISEE HAS NOT RECEIVED, ANY WARRANTY OR GUARANTEE, EXPRESS OR IMPLIED, AS TO THE POTENTIAL VOLUME, PROFITS OR SUCCESS OF THE BUSINESS VENTURE CONTEMPLATED BY THIS AGREEMENT. 

C. FRANCHISEE ACKNOWLEDGES THAT FRANCHISEE RECEIVED A COPY OF THIS AGREEMENT, THE EXHIBITS AND ATTACHMENTS HERETO, IF ANY, AND AGREEMENTS RELATING
THERETO, IF ANY, AT LEAST FIVE (5) BUSINESS DAYS PRIOR TO THE DATE ON WHICH THIS AGREEMENT WAS EXECUTED. FRANCHISEE FURTHER ACKNOWLEDGES THAT FRANCHISEE HAS RECEIVED THE DISCLOSURE DOCUMENT REQUIRED BY THE TRADE REGULATION RULE OF THE FEDERAL
TRADE COMMISSION ENTITLED DISCLOSURE REQUIREMENTS AND PROHIBITIONS CONCERNING FRANCHISING AND BUSINESS OPPORTUNITY VENTURES AT THE EARLIER OF (i) AT LEAST FOURTEEN (14) CALENDAR DAYS PRIOR TO THE DATE ON WHICH THIS AGREEMENT WAS EXECUTED,
OR (ii) THE FIRST MEETING BETWEEN FRANCHISOR AND FRANCHISEE FOR THE PURPOSE OF DISCUSSING A PROSPECTIVE FRANCHISE. 
 D. FRANCHISEE
ACKNOWLEDGES THAT IT HAS READ AND UNDERSTOOD THIS AGREEMENT, THE EXHIBITS AND ATTACHMENTS HERETO, IF ANY, AND THAT FRANCHISEE HAS HAD AMPLE TIME AND OPPORTUNITY TO CONSULT WITH ADVISORS OF FRANCHISEE’S OWN CHOOSING ABOUT THE POTENTIAL BENEFITS
AND RISKS OF ENTERING INTO THIS AGREEMENT. FRANCHISEE ACKNOWLEDGES THAT FRANCHISEE HAS HAD AN OPPORTUNITY TO NEGOTIATE, AND HAS FULLY NEGOTIATED, THE ESSENTIAL STIPULATIONS OF THIS AGREEMENT AND THAT SUCH STIPULATIONS WERE NOT UNILATERALLY IMPOSED
ON IT BY FRANCHISOR. 
 E. ALL OF THE OBLIGATIONS OF FRANCHISOR HEREUNDER ARE TO FRANCHISEE ONLY; NO OTHER PERSON OR ENTITY IS ENTITLED TO
RELY ON, ENFORCE, OR OBTAIN RELIEF FOR BREACH OF SUCH OBLIGATIONS EITHER DIRECTLY OR BY SUBROGATION. 
 F. NOTWITHSTANDING FRANCHISEE’S
ACKNOWLEDGMENT IN SECTION XXX.C ABOVE, FRANCHISEE REPRESENTS THAT FRANCHISEE’S INITIAL 

  

 45 

 
INVESTMENT IN THE FRANCHISED BUSINESS IS IN EXCESS OF ONE MILLION DOLLARS ($1,000,000), EXCLUDING THE COST OF UNIMPROVED LAND AND ANY FINANCING RECEIVED FROM
FRANCHISOR OR ITS AFFILIATES, AND THUS, IS EXEMPTED FROM THE FEDERAL TRADE COMMISSION’S FRANCHISE RULE DISCLOSURE REQUIREMENTS, PURSUANT TO 16 CFR 436.8(A)(5)(i). 
 IN WITNESS WHEREOF, the parties hereto have duly executed, sealed and delivered this Courtyard by Marriott Relicensing Franchise Agreement in duplicate as of the Effective Date. 
  

									
		 		 	 FRANCHISOR
	 	
				
	ATTEST:	 		 	 MARRIOTT INTERNATIONAL, INC.
	 	
					
	 /s/     Brenda Beerman Trickey
	 		 	By:	 	 /s/    James C. Fisher
	 	(SEAL)
	Assistant Secretary	 		 	Name:	 	 James C. Fisher
	 	
		 		 	Title:	 	 Vice President
	 	
				
		 		 	 FRANCHISEE
	 	
				
	ATTEST:	 		 	 APPLE NINE HOSPITALITY MANAGEMENT, INC.
	 	
		 		 	 a Virginia corporation
	 	
					
	 /s/    Amy Kramer
	 		 	By:	 	 /s/    Justin G. Knight
	 	(SEAL)
	(Assistant) Secretary	 		 	Name:	 	 Justin G. Knight
	 	
		 		 	Title:	 	 President
	 	

  

 46 

 STATE AMENDMENT TO FRANCHISE AGREEMENT 
 In recognition of the requirements of California law, the parties to the attached FRANCHISE AGREEMENT (the “Agreement”) agree as follows:

  

	 	1.	Section XXVI. of the Agreement shall be supplemented by the addition of the following new Paragraph XXVI.J., which shall be considered an integral part of the Agreement:

  

	 	J.	Franchisee and Franchisor acknowledge and agree as follows: 

  

	 	a.	Enforceability of termination upon bankruptcy is a matter governed by federal bankruptcy law, and enforceability or non-enforceability is subject to that law and rulings or to a
court of competent jurisdiction. 

  

	 	b.	California Business and Professions Code §§20000-20043 provide rights to the franchisee concerning termination or nonrenewal of a franchise. If the Agreement is
inconsistent with the law, the law will control. 

  

	 	c.	The Agreement contains liquidated damages provisions. Under California Civil Code § 1671, certain liquidated damages clauses are unenforceable in California.

  

	 	d.	The requirement that the laws of the state of Maryland govern this Agreement may not be enforceable with respect to claims under the California Franchise Investment Law.

  

	 	2.	Section XXVIII. WAIVER OF JURY TRIAL AND PUNITIVE DAMAGES is hereby deleted and replaced with the following: 

 XXVIII. WAIVER OF JURY TRIAL; PUNITIVE DAMAGES; ARBITRATION 
 A. FRANCHISEE AND FRANCHISOR EACH HEREBY ABSOLUTELY, IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY AND THE RIGHT TO CLAIM OR
RECEIVE PUNITIVE DAMAGES IN ANY LITIGATION, ACTION, CLAIM, SUIT OR PROCEEDING, AT LAW OR IN EQUITY, ARISING OUT OF, PERTAINING TO OR IN ANY WAY ASSOCIATED WITH THE COVENANTS, UNDERTAKINGS, REPRESENTATIONS OR WARRANTIES SET FORTH HEREIN, THE
RELATIONSHIPS OF THE PARTIES HERETO, WHETHER AS “FRANCHISEE” OR “FRANCHISOR” OR OTHERWISE, THIS AGREEMENT OR ANY OTHER AGREEMENT, INSTRUMENT OR DOCUMENT ENTERED INTO IN CONNECTION HEREWITH, OR ANY ACTIONS OR OMISSIONS IN
CONNECTION WITH ANY OF THE FOREGOING. THE FOREGOING PROVISIONS OF THIS SECTION CONSTITUTE THE WRITTEN CONSENT OF FRANCHISEE AND FRANCHISOR TO WAIVE THEIR RIGHT TO A JURY TRIAL, AS CONTEMPLATED BY CCP 631(D)(5) AND EITHER PARTY MAY SUBMIT THE
PROVISIONS OF THIS SECTION TO THE APPLICABLE COURT OR JUDICIAL BODY TO EVIDENCE SUCH CONSENT OF THE PARTIES. 
  

 47 

 B. 1. Except as otherwise specified in this Agreement, any dispute, controversy, or claim
arising out of or relating to this Agreement, including any question regarding its existence, validity, legality or termination, or regarding a breach thereof, as well as any claim that Franchisor violated any laws in connection with the execution
or enforcement of this Agreement (each, a “Dispute”), shall be resolved referred to, and finally settled by, arbitration under and in accordance with the Commercial Arbitration Rules of the American Arbitration Association (or any similar
successor rules thereto). The arbitrator(s) shall be appointed in accordance with said rules. The number of arbitrators shall be one unless the parties agree otherwise in accordance with said rules. The place where arbitration proceedings shall be
conducted is Baltimore, Maryland. 
 2. The decision of the arbitral tribunal shall be final and binding upon the parties, and
such decision shall be enforceable in any courts having jurisdiction. The arbitral tribunal shall have no authority to amend or modify the terms of this Agreement. The arbitral tribunal shall have the right to award or include in their award any
relief they deem proper in the circumstances, including money damages (with interest on unpaid amounts from the date due), specific performance and legal fees and costs in accordance with this Agreement; however, the arbitral tribunal may not award
punitive, consequential or exemplary damages. The costs and expenses of arbitration shall be allocated and paid by the parties as determined by the arbitral tribunal. 
 3. Any arbitration proceeding pursuant to this Agreement shall be conducted on an individual (not a class-wide) basis and shall not be
consolidated with any other arbitration proceedings to which Franchisor is a party, except that Franchisor may join any management company operating the Hotel, any owner under an owner agreement related hereto, and any guarantor of any obligations
hereunder in any such proceeding. Any Dispute to be settled by arbitration pursuant to this Section shall at the request of Franchisee or Franchisor be resolved in a single arbitration before a single tribunal together with any Dispute arising out
of or relating to any other agreement between Franchisee and Franchisor and its affiliates. No decision on any matter in any other arbitration proceeding in which Franchisor is a party shall prevent any party to the arbitration proceeding from
submitting evidence with respect to the same or a similar matter or prevent the arbitral tribunal from rendering an independent decision without regard to such decision in such other arbitration proceeding. 
 4. Franchisor may, without waiving any rights it has under this Agreement, seek from a court having jurisdiction any interim or
provisional relief that may be necessary to protect its rights or property (including, without limitation, any aspect of the System, or any reason concerning the safety of the Hotel or the health and welfare of any of the Hotel’s guests,
invitees or employees). 
 5. The provisions of this Section shall survive the expiration or termination of this Agreement.

  

	 	3.	 Each provision of this Amendment to the Agreement shall be effective only to the extent that the jurisdictional requirements of the California Franchise Investment
Law, Cal. Corp. Code §§31000-31516, or the California Franchise Relations Act, Cal. Bus. & Prof. 

  

 48 

	 	 
Code §§20000-20043, or the California Civil Code §1671 are met independently with respect to each such provision and without reference to this
Amendment to the Agreement. 

  

	 	4.	Franchisor reserves the right to challenge the applicability of any law that declares provisions in the Agreement void or unenforceable. 

 IN WITNESS WHEREOF, the parties hereto have duly executed, sealed and delivered this Amendment to the Agreement in duplicate on the day and year first
above written in the Agreement. 
  

									
		 		 	 FRANCHISOR:

			
	ATTEST:	 		 	 MARRIOTT INTERNATIONAL, INC.

					
	 /s/    Brenda Beerman Trickey
	 		 	By:	 	 /s/    James C. Fisher
	 	(SEAL)
	Assistant Secretary	 		 	Name:	 	 James C. Fisher
	 	
		 		 	Title:	 	 Vice President
	 	
			
		 		 	 FRANCHISEE

			
	ATTEST:	 		 	 APPLE NINE HOSPITALITY MANAGEMENT, INC.

		 		 	 a Virginia corporation

					
	 /s/    Amy Kramer
	 		 	By:	 	 /s/    Justin G. Knight
	 	(SEAL)
	(Assistant) Secretary	 		 	Name:	 	 Justin G. Knight
	 	
		 		 	Title:	 	 President
	 	

  

 49 

 ATTACHMENT A 
 FRANCHISE INFORMATION 
  

	1.	Location of the Franchised Courtyard by Marriott 

 28523 Westinghouse Place, Valencia, CA 91355 
  

	2.	Number of guest rooms 

 140 
  

	3.	Date for commencement of construction or property improvement 

 Effective Date 
  

	4.	Date for complete satisfaction of the requirements set forth in the Addendum attached to the Franchise Agreement 

 Within six (6) months of the Effective Date unless explicitly stated otherwise with respect to any particular item. 
  

	5.	Name of entity that will operate the Hotel 

 Dimension Development Two, LLC 
  

	6.	Equity Interest(s) in Franchise or Franchisee 

 (Name(s),
Address(es), and percentage(s) of ownership) 
 Ownership of Apple Nine Hospitality Management, Inc. 
  

				
	 Apple Nine Hospitality, Inc.
 c/o Apple REIT Companies, 814 East Main Street, Richmond, Virginia 23219
	  	100	%

 Ownership of Apple Nine Hospitality, Inc. 
  

				
	 Apple REIT Nine, Inc.
 814 East Main Street, Richmond, Virginia 23219
	  	100	%

 Ownership of Apple REIT Nine, Inc. 
  

				
	 Publicly-Held Company
	  	100	%

  

 50

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