Document:

EXHIBIT 10.16

 Exhibit 10.16 
 SOMERSET, NJ (CY) 
 MANAGEMENT AGREEMENT 
 by and between 
 NEWPORT SOMERSET MANAGEMENT, LLC 
 as “MANAGER” 
 and 
 APPLE EIGHT HOSPITALITY MANAGEMENT, INC. 
 as “OWNER” 
 Dated as of November 9, 2007 
  

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 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	  	4
				
		  	  1.08.	  	Representations and Warranties of Manager	  	5
			
	ARTICLE II	  	TERM	  	5
				
		  	  2.01.	  	Term	  	5
				
		  	  2.02.	  	Performance Termination	  	6
			
	ARTICLE III	  	COMPENSATION OF MANAGER	  	6
				
		  	  3.01.	  	Management Fees	  	6
				
		  	  3.02.	  	Operating Profit	  	6
				
		  	  3.03.	  	Reimbursables	  	7
				
		  	  3.04.	  	Termination Fee	  	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	  	10
				
		  	  4.04.	  	Annual Operating Projection	  	10
				
		  	  4.05.	  	Working Capital	  	11
				
		  	  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

  

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	ARTICLE VI	  	INSURANCE	  	15
				
		  	  6.01.	  	Property Insurance	  	15
				
		  	  6.02.	  	Operational Insurance	  	16
				
		  	  6.03.	  	Coverage	  	16
				
		  	  6.04.	  	Costs and Expenses	  	17
				
		  	  6.05.	  	Owner’s Right to Provide Insurance	  	17
				
		  	  6.06.	  	Waiver of Subrogation	  	17
			
	ARTICLE VII	  	DAMAGE AND REPAIR	  	17
				
		  	  7.01.	  	Damage and Repair	  	17
				
		  	  7.02.	  	Condemnation	  	18
				
		  	  7.03.	  	Business Interruption	  	18
				
		  	  7.04.	  	Subordination to Mortgage	  	18
				
		  	  7.05.	  	Liens; Credit	  	19
			
	ARTICLE VIII	  	DEFAULTS	  	19
				
		  	  8.01.	  	Events of Default	  	19
				
		  	  8.02.	  	Remedies	  	20
				
		  	  8.03.	  	Additional Remedies	  	20
			
	ARTICLE IX	  	ASSIGNMENT AND SALE	  	21
				
		  	  9.01.	  	Assignment	  	21
				
		  	  9.02.	  	Sale of the Hotel	  	21
			
	ARTICLE X	  	MISCELLANEOUS	  	22
				
		  	10.01.	  	Right to Make Agreement	  	22
				
		  	10.02.	  	Consents and Cooperation	  	22
				
		  	10.03.	  	Relationship	  	22
				
		  	10.04.	  	Applicable Law; Jurisdiction	  	23
				
		  	10.05.	  	Recordation	  	23
				
		  	10.06.	  	Headings	  	23
				
		  	10.07.	  	Notices	  	23
				
		  	10.08.	  	Environmental Matters	  	24
				
		  	10.09.	  	Confidentiality; Projections	  	25
				
		  	10.10.	  	Indemnification	  	26
				
		  	10.11.	  	Actions to be Taken Upon Termination	  	27
				
		  	10.12.	  	Waiver	  	29

  

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		  	10.13.	  	Partial Invalidity	  	29
				
		  	10.14.	  	Survival	  	29
				
		  	10.15.	  	Negotiation of Agreement	  	29
				
		  	10.16.	  	Estoppel Certificates	  	29
				
		  	10.17.	  	Affiliates	  	30
				
		  	10.18.	  	Blocked Persons or Entities.	  	30
				
		  	10.19.	  	Restrictions on Operating the Hotel in Accordance with System Standards	  	30
				
		  	10.20.	  	Counterparts	  	30
				
		  	10.21.	  	Entire Agreement	  	31
				
		  	10.22.	  	Franchise Agreement	  	31
				
		  	10.23.	  	Operation of Other Hotels	  	31
				
		  	10.24.	  	Waiver of Jury Trial and Punitive Damages	  	32
				
		  	10.25.	  	Termination of the Hotel Lease	  	32
				
		  	10.26.	  	All Payments Subject to the Availability of Funds	  	32
			
	ARTICLE XI	  	DEFINITION OF TERMS	  	32
				
		  	11.01.	  	Definition of Terms	  	32
			
	ARTICLE XII	  	SUPPLEMENTAL PROVISIONS	  	41

  

					
	Schedule 1	 	–	 	Hotel Specific Data
	Schedule 2	 	–	 	Supplemental Provisions
	Exhibit A	 	–	 	Legal Description of Site

  

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 MANAGEMENT AGREEMENT 
 THIS MANAGEMENT AGREEMENT (“Agreement”) is executed as of the 9th day of November, 2007 (“Effective Date”), by APPLE EIGHT 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 NEWPORT SOMERSET MANAGEMENT, LLC, a Virginia limited liability company
(“Manager”), with a mailing address at c/o 4290 New Town Avenue, Williamsburg, Virginia 23188. 
 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 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, relocate, manage, supervise, direct and discharge all employees at the Hotel and maintain adequate staff,
consistent with Prudent Industry Practices and the Annual Operating Projection, 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 or as set forth in the Annual Operating Projection. 
 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, 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 , 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 reasonable diligence and 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, provided that each such contract or agreement that requires expenditures in excess of $5,000 or is not terminable without penalty or fee must first be 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 in the Franchise Agreement). 
 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. 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. 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. 
 All personnel
employed at the Hotel shall at all times be the employees of Manager and not the employees of Owner. 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 

  

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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. 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 shall not pay for the relocation costs of any employees except for the cost of relocating the General Manager; provided, however, that (i) the relocation costs for the General Manager 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 who are employed at the Hotel
for less than one (1) year and are transferred or relocated except to a hotel owned by Owner or an Affiliate of Owner. As is consistent with Prudent Industry Practices, Manager shall be 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 General Manager of the Hotel and such other personnel as the 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. 
 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 Ten Thousand Dollars ($10,000); (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
Twenty-five Thousand Dollars ($25,000) in the aggregate; (iii) the FF&E subject to such FF&E Lease is 

  

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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 best of Manager’s knowledge, to the Hotel. 
 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. 
 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. The Term will be automatically renewed for up to two (2) one-year periods unless either party provides notice not less than one hundred twenty (120) days prior to the expiration of the Term or the initial renewal Term,
as the case may be, in which case this Agreement shall terminate as of the last day of the Term or the initial renewal term, as applicable. Notwithstanding the foregoing, Manager or Owner shall have the option to terminate this Agreement at any time
from and after the date that is one hundred eighty (180) days prior to the expiration of the initial Term, with or without cause, by giving the other party not less than one hundred eighty (180) days prior written notice of its election to
terminate. 
  

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 2.02. Performance Termination. 
 A. Owner shall have the option to terminate this Agreement following any Performance Termination Period with respect to which the following occurs:

 1. The Operating Profit for the Performance Termination Period is less than the Performance Termination Threshold; or 
 2. The Revenue Index of the Hotel during the Performance Termination Period is less than the Revenue Index Threshold for such Performance Termination
Period. 
 Owner shall exercise such option to terminate by serving written notice
thereof on Manager no later than sixty (60) days after Owner’s receipt of the last Accounting Period Statement for Performance Termination Period, and this Agreement shall terminate as of the end of the second (2nd) full Accounting Period following the date on which Manager receives the above-described notice from Owner. Notwithstanding anything contained herein to
the contrary, Manager at its option may elect to void such Termination by so notifying Owner within such sixty (60) day period; provided, however, that the amount that was necessary to have achieved the Performance Termination Threshold or
Revenue Index Threshold, as applicable (the “Deficit Amount”) shall be made up to Owner by either (i) Manager’s paying the Deficit Amount to Owner within ten (10) days after such 60-day period (the “Cure
Payment”) or (ii) offsetting the Deficit Amount against the Base Management Fees, the Incentive Management Fees and/or other amounts or reimbursements payable to Manager under this Agreement, as Owner may direct. 

B. Owner’s failure to exercise its right to terminate this Agreement pursuant to this Section 2.02 shall not be deemed an estoppel or waiver
of Owner’s right to terminate this Agreement with respect to any subsequent event or circumstance that could give Owner the right to terminate hereunder. 
 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 as provided in Section 3.02 below. 
 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; 
  

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 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 shall not be 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 and shall
not 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 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. 
 3.03. Reimbursables. 
 Although Manager shall not be required to advance its own funds for any purpose under this Agreement, Manager shall, nonetheless, be reimbursed from Gross
Revenues or by Owner for all reasonable amounts advanced by Manager, its employees, or agents, including, but not limited to, costs paid to third parties for property specific data processing, third party payroll processing, costs incurred in
complying with the requirements of Section 4.08 hereof, travel and out-of-pocket expenses, such as postage, facsimile, express courier, and long distance telephone expenses incurred in the performance of Manager’s duties and obligations
hereunder. Such expenses shall be set forth in the Annual Operating Projection. The provisions of this Section 3.03 shall survive Termination. 
 3.04. Termination Fee. 
 A. If this Agreement is terminated by Owner for any reason prior to the expiration of the Term
(including, but not limited to, a termination by Owner incident to a Sale of the Hotel as provided in Section 9.02 below), other than (i) a performance termination as provided for in Section 2.02 above or (ii) in the case of an
Event of Default by Manager or (iii) a termination due to an Operating Loss or (iv) termination as provided in Section 4.08 or (v) a termination permitted under Article VII, Owner agrees to pay Manager a “Termination
Fee,” as liquidated damages, and not as a penalty, equal to the sum obtained by multiplying: (1) one-twelfth (1/12) of the annual Base Management Fee in the amount called for in the current Annual Operating Projection (but in no event
less than the Base Management Fee for the preceding full Fiscal Year) times (2) the number of months remaining in the Term. Nothing in this paragraph is intended to imply that Owner has any right to terminate this Agreement except as is
expressly set forth elsewhere herein. 
  

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 B. The parties recognize that if this Agreement is terminated under circumstances that would entitle
Manager to a Termination Fee in accordance with (A) above, Manager would suffer an economic loss by virtue of the loss of management fees that would otherwise have been earned under this Agreement. Because such fees vary in amount depending
upon the Gross Revenues of the Hotel and, accordingly, would be extremely difficult and/or impractical to ascertain with certainty, the parties agree that the Termination Fee constitutes a reasonable estimate of such economic loss and is
appropriately delineated as liquidated damages and not as a penalty. 
 C. Notwithstanding the foregoing, if in the event of a termination
for which a Termination Fee would otherwise be due, Owner may, in its sole and absolute discretion, avoid payment of such Termination Fee by, within sixty (60) days of such termination, by naming Manager as manager for another hotel not already
managed by Manager, provided that such substitute hotel is reasonably comparable to the Hotel in size, number of rooms, quality of franchise, strength of geographic market, and gross revenue. If Manager is so appointed as manager of a substitute
hotel, such management shall be pursuant to the terms and conditions of this Agreement. 
 D. The provisions of this Section 3.04 shall
survive Termination. 
 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
and the Base Management Fee 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 each SEC Filing Period, Manager shall deliver to
Owner (1) 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
(or comparable employee) certifying that, to the best of his or her knowledge, such Annual Operating Statement is true and correct and (2) a statement (the “Quarterly Operating Statement”) in reasonable detail
summarizing the operations of the Hotel for the immediately 

  

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preceding calendar quarter and a certificate of Manager’s chief accounting officer (or comparable employee) certifying that, to the best of his or her
knowledge, such Quarterly 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 Base Management Fee
or Incentive Management Fee shall be paid to or retained from Gross Revenues by Manager. Any Base Management Fee that would have been payable to Manager had there been an Operating Profit for such Accounting Period shall not accrue and shall not be
payable to Manager. 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) as to which accrued
Base Management Fees are payable to Manager. 
 To the extent there is an Operating Loss for any Accounting Period, additional funds in the
amount of any such Operating Loss (other than the amount of any Base Management Fee) 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. 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. 
 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 GAAP. Owner may at reasonable intervals and upon giving reasonable advance notice examine such records
during Manager’s normal business hours. 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, employees, 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, Manager shall promptly pay Owner
such amounts found to be due, plus 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. The cost of the audit shall be paid by Owner and be a Deduction; provided, however, Manager shall pay for such cost if such audit discloses an 

  

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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. 
 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 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”). 
 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
forty-five (45) 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) 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 

  

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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 actual expenditures for the items in dispute in the previous Fiscal Year 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. 
 Owner, as of
the Effective Date, shall establish a level of Working Capital funds, which shall be held in the Operating Accounts, that 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 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, 

  

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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. 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 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 (or equivalent employee) of Manager, in a form approved by Manager’s accounting firm, certifying that, to his or her knowledge, the information

  

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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 
 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 within thirty (30) days after notice; provided, however, that in the event that Manager does not so remedy and/or correct such
weaknesses within the applicable thirty (30) day cure period, Owner shall be entitled to terminate this Agreement upon thirty (30) days prior notice to Manager. Manager shall be responsible for any costs of Owner or its auditors associated
with correcting or retesting any such weaknesses. 
 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 

  

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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. 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. 
 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. The Reserve will be kept in an interest-bearing account, and any interest which accrues thereon shall be retained in the Reserve. Interest which accrues on amounts held in
the Reserve, shall not (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. 
 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 Operating Projection approved by Owner. In the event that Owner requests that Manager perform
capital improvements that are not included in the Annual Operating 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 

  

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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. 
 ARTICLE VI 
 INSURANCE 
 6.01. Property Insurance. 
 A. Subject to Owner’s prior approval, which shall not be unreasonably withheld or delayed, 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 required by the
Franchise Agreement or 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 and 2, 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-prone area, earthquake insurance as is customary in accordance with local practice. 
 B. All policies of insurance required under Section 6.01.A. 1, 2, 3, and 4 shall insure Owner, Landlord, Manager, and any Mortgagee as named
insureds, and any losses thereunder shall be payable to the parties as and to the extent their respective interests, if any, may appear. 
  

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 6.02. Operational Insurance. 
 Subject to Owner’s prior approval, which shall not be unreasonably withheld or delayed, 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 required by the Franchise Agreement or 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; 
 B. Fidelity bonds or crime insurance with respect to Hotel employees and other employees of Manager 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. Employment practices liability insurance covering
employment-related claims and the legal defense of such claims in amounts as Manager in its reasonable judgment deems advisable (with the concurrence of Owner, which shall not be unreasonably withheld or delayed); 
 E. Such other insurance, including excess/umbrella coverage, in amounts as Manager in its reasonable judgment deems advisable (with the concurrence of
Owner, which shall not be unreasonable withheld or delayed) 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.E. Manager shall be the named insured and Owner and Landlord shall be additional insureds on the policies described in Section 6.02.A, 6.02.B. and 6.02.D. 
 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. No coverage required hereunder shall be self-insured by Manager or Owner without prior written approval of Manager and 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. 
  

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 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. 
 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 (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. 
 6.06. Waiver of Subrogation. All policies of insurance carried by any party
pursuant to this Agreement shall expressly waive any right on the part of the insurer against any other party to this Agreement, which right, is hereby expressly waived to the extent that such waiver is not prohibited by or violative of any such
policy or does not otherwise cause a loss or reduction of coverage. The parties to this Agreement agree that their policies will include such waiver clause or endorsement so long as the same shall be obtainable without unreasonable extra cost.

 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. 
  

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 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 sixty (60) 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. 
 7.03. Business Interruption. 
 In the event that the operations of the Hotel are interrupted by the causes described in
Sections 7.01 and 7.02 above, Manager shall nonetheless be entitled to be paid a Base Management Fee during the period of interruption equal to one-twelfth (1/12) of the annual Base Management Fee in the amount called for in the current Annual
Operating Projection (but in no event less than the Base Management Fee for the preceding full Fiscal Year). The Base Management Fee shall be prorated for any partial period of interruption. 
 7.04. 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 
  

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 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 as of the date of such Foreclosure or upon thirty (30) days notice. 
 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. 
 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, provided that only a two (2) business day notice or cure period shall be required in the case of payments by Manager of Owner’s Priority or other distributions of Operating Profit payable to Owner. 
  

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 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, employee, or agent 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 intentionally 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 that continues for a period of thirty (30) days after the defaulting party’s receipt of written notice from 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) only a two (2) business
day 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 10.24 hereof), actions for specific performance and/or damages; and/or (3) to avail itself of the remedies described in Section 8.03. 
 8.03. Additional Remedies. 
 A. Upon the occurrence of a Default by either party under the provisions
of Section 8.0l.D, the amount owed to the non-defaulting party shall accrue interest, at an annual rate equal to the Prime Rate plus three (3) percentage points, from and after the date on which the Default occurred. 
 B. The remedies granted under Section 8.02 and Section 8.03 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 (except as specifically limited by this Agreement) and shall survive Termination.

  

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 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 controlling ownership or beneficial
interest, direct or indirect, in Manager, including any such transfer by operation of law except to an Affiliate 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 Eight, Inc., or any
Affiliate thereof. 
 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 completion of the Sale of the Hotel. 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, including, but not 

  

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limited to, the obligation to pay a Termination Fee as provided in Section 3.04 above but such Termination Fee shall only be payable if Owner (not
Manager) terminates this Agreement upon Sale of the Hotel. Upon the termination of this Agreement pursuant to this Section 9.02, Manager shall be released of all liabilities and obligations arising under and with respect to this Agreement on
and after the date of such termination; provided, however, that Manager 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 termination. 
 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 shall not be withheld, delayed or conditioned, 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. 
 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 shall have no 

  

 22 

 
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. Notwithstanding anything contained herein to the contrary, Manager shall defend, indemnify and hold Owner harmless from and against any claims by the third party vendor or supplier under any contract entered into
by Manager (a) in the name of Owner without Owner’s prior written consent and approval or (b) in the name of Manager without Owner’s prior written consent and/or approval if such consent and/or approval is required by the terms
of this Agreement. 
 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. 
 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:

  

 23 

					
	To Owner:	    	Apple Eight Hospitality Management, Inc.
		    	c/o Apple REIT Companies
		    	814 E. Main Street
		    	Richmond, Virginia 23219
		    	Attn:	 	Krissy Gathright
		    	Phone:	 	(804) 727-6323
		    	Fax:	 	(804) 727-6353
		
	To Manager:	    	c/o Newport Hospitality Group, Inc.
		    	4290 New Town Avenue
		    	Williamsburg, Virginia 23188
		    	Attn:	 	Michael L. Pleninger
		    	Fax No.:	 	(757) 221-0400
		
	and	    	
		    	c/o Newport Hospitality Group, Inc.
		    	116 Park Lane
		    	Concord, Massachusetts 01742
		    	Attn:	 	Andrew T. Carey
		    	Fax No.:	 	(978) 318-0332

 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 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. 
  

 24 

 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. 
 C. Notwithstanding the foregoing paragraphs, the parties agree that Manager is not and shall not be the insurer for the Hotel as to environmental matters
and, to that end, Manager shall only be responsible for environmental remediation necessitated as a result of Manager’s negligence or acts or omissions (as opposed to Owner’s or a third-party’s negligence, acts or omissions).

 “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 (but not its existence) 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 

  

 25 

 
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. 
 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 employees or agents and (iii) any claim asserted by any employee 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 or agents and (iii) any claim asserted by any employee 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. 
 C. In agreeing to the provisions relating to liability and indemnity contained in this Section 10.10, Owner, Landlord, and
Manager recognize that simple mistakes and/or errors in 

  

 26 

 
judgment by Manager and the employees of Manager are ordinary risks of business in the operation of the Hotel and that Manager is not assuming such risks and
shall not be responsible for loss, liability, or costs resulting therefrom. Further, Manager is not undertaking to be an insurer against third party claims or the insurer of the profitability of the Hotel. Furthermore, Manager is not assuming any
liability for work performed or materials or equipment supplied by third parties. 
 D. Neither Owner, Landlord, nor Manager shall be liable
for any special, indirect, incidental, or consequential damages of any kind in connection with this Agreement, including without limitation, damages resulting from loss of profits, lost sales, business or goodwill, whether or not such party has been
advised of the possibility of such damages. 
 E. The provisions of this Section 10.10 shall survive Termination. 
 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. 
 B. Manager shall, within forty-five (45) 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 two (2) years 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 GAAP, for the Hotel for the year in which the Termination occurs and for any subsequent year. 
  

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 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. 
 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. 
 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. 
  

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 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. 
 10.14. Survival. 
 Except as otherwise specifically provided in this Agreement or where required to give effect to a provision of this Agreement or to avoid a forfeiture,
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 

  

 29 

 
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. 
 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 the officers, directors, partners or, to Manager’s knowledge, 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 

  

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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. 
 10.22. Franchise Agreement. 
 During
the Term of this Agreement, subject to the availability of adequate funds, 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, including, without limitation, the obligations of “Franchisee” under Sections XIII (Accounting and Records) 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 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, that is a Competing Hotel without
Owner’s prior written consent. 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 

  

 31 

 
disadvantage the operation or business of the Hotel (such as, by way of example only, directing potential Hotel guests 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. For purposes of this Section, a “Competing Hotel” shall mean any hotel, inn, motel or other type of lodging facility that markets directly to or makes efforts to
attract customers, guests and/or hotel business that would otherwise do business with the Hotel. 
 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. 
 10.25. Termination of the Hotel Lease. 
 Landlord represents and agrees that in the event of the cancellation or termination of the Hotel Lease for any reason, this Agreement shall remain in full force and effect with Landlord substituted as Owner hereunder. 
 10.26. All Payments Subject to Availability of Funds. 
 Whenever Manager is required to make a payment hereunder, it is agreed that such obligation is subject to the availability of adequate operating funds (or other funds provided by Owner) after the payment of all
operating expenses of the Hotel. 
 ARTICLE XI 
 DEFINITION OF TERMS 
 11.01. Definition of Terms. 
 The following terms when used in this Agreement shall have the meanings indicated: 
 “Accounting Period” shall mean a calendar month. 
 “Accounting Period Statement” shall have the meaning ascribed to it in Section 4.0l.A. 
 “Accounting Quarter” shall mean three consecutive Accounting Periods, the first of which begins on the first day 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 

  

 32 

 
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 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. 
 “Business Day” shall mean any day other
than a Saturday, Sunday or legal holiday in the Commonwealth of Virginia. 
 “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.A.

  

 33 

 “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. 
 “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, that meet Owner’s capitalization policy consistent with GAAP, but shall not include Fixed Asset Supplies or Software. 
 “FF&E Lease” means a lease of any property other than real property. 
 “Fiscal Year” shall mean a calendar year commencing on January 1 and ending on December 31; provided, however, the
first fiscal year commences as of the Effective Date and ends at midnight on December 31 of that same calendar 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. 
  

 34 

 “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; and service charges; 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. 
 “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. 
 “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
set forth in Schedule 1 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. 
  

 35 

 “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 mean the party identified as “Landlord” in Schedule 1. 
 “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. 
 “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, deed of trust or similar security instrument 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, 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; 
  

 36 

 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; 
 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) and the reasonable cost of attendance by employees of the Hotel at training and manpower development programs sponsored by
Manager, provided Owner has approved attendance at programs and the cost thereof; 
 7. the Base Management Fee; 
 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, Owner or Landlord related to this Agreement or to Manager’s operation of the Hotel and
Impositions (exclusive of Manager’s, Owner’s and Landlord’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. payments pursuant to FF&E leases or other forms of financing obtained for the FF&E located in or connected with the Hotel; and 
 14. 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. 
  

 37 

 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 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 twelve percent (12%) return on an amount equal to the sum of (i) the purchase price paid by Owner for the Hotel plus (ii) closing costs (including, without limitation, defeasance costs but excluding any
brokerage fees or expenses incurred by Owner’s parent in connection with its public equity raise) plus (iii) such excess capital expenditures. 
 “Performance Termination Period” shall have the meaning ascribed to it in Schedule 1. 
 “Performance Termination Threshhold” 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. 
 “Quarterly Operating Statement” shall have the meaning set forth in Section 4.0l.B. 
 “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 

  

 38 

 
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 in its reasonable discretion, 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. 
 “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. Sale of the Hotel shall exclude related party transactions with Affiliates of Owner and shall also exclude granting of security interests in the Hotel or any part thereof in connection with financing. 
 “SEC Filing Period” shall mean such period of time (a) (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 and (b) (not to exceed twenty (20) days) after the close of each calendar quarter of a Fiscal Year within which Owner must
receive the Quarterly Operating Statement from Manager with respect to such quarter, in each case 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. 
  

 39 

 “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 (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 7.04. 
 “Subsequent Owners” shall have the meaning ascribed to it in Section 7.04. 
 “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 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. 
  

 40 

 “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. 
 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. 
  

 41 

 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 EIGHT HOSPITALITY MANAGEMENT, INC.,
 a
Virginia corporation

		
	By:	 	 /s/ Justin Knight

	Name:	 	Justin Knight
	Title:	 	
	
	MANAGER:
	
	 NEWPORT SOMERSET MANAGEMENT, LLC,
 a Virginia
limited liability company

		
	By:	 	 /s/ Michael L. Pleninger

	Name:	 	Michael L. Pleninger
	Title:	 	Manager

 SCHEDULE 1 
 HOTEL SPECIFIC DATA 
  

	1.	Description of Hotel: That certain hotel known as the Courtyard Somerset, located at 250 Davidson Ave., Somerset, NJ 00873, containing 162 guest rooms, a lobby, meeting
rooms, administrative offices, parking and certain amenities and related facilities located on the Site, including the following: 

  

	 	a.	Number of Guest Rooms: 162 

  

	 	b.	Other Improvements/Amenities: 860 sq. ft. meeting room space; full service business center; indoor swimming pool; whirlpool; exercise room; wireless high speed internet
access; Courtyard Café. 

  

	2.	Franchise Agreement: Franchise Agreement between Apple Eight Hospitality Management, Inc. and Marriott International, Inc. dated November 9, 2007.

  

	3.	Competitive Set: 

 Holiday Inn Somerset 

Somerset Plaza 
 Staybridge Suites Somerset

 Hampton Inn Somerset 
 Hilton
Garden Inn Bridgewater 
  

	4.	Landlord: Apple Eight Hospitality Ownership, Inc. 

  

	5.	Base Management Fee: Three percent (3%) 

  

	6.	a. Incentive Management Fee: 20% of available cash flow after payment of Owner’s Priority 

 b. Owner’s Priority: $1,944,000.00 (12% of Purchase Price plus closing costs [$16,200,000]); 
  

	7.	a. Performance Termination Threshold: $1,620,000.00 (10% of Purchase Price plus closing costs [$16,200,000]); 

 b. Performance Termination Period: Any calendar year; provided, however, the initial Performance Termination Period shall begin on January 1,
2009. 
  

	8.	Revenue Index Threshold: 100% 

  

 2 

	9.	Hotel Purchase Contract: Purchase Contract dated as of September 4, 2007 between Apple Eight Hospitality Ownership, Inc. and NGC Harbison, LLC et al.

  

	10.	Expiration Date of Term: Five (5) years from the Effective Date 

  

	11.	State in which Manager is Organized: Virginia 

  

	12.	FF&E Reserve: An amount equal to five percent (5%) of Gross Revenues for each Accounting Period. 

  

	13.	Other Hotels: None 

  

 3 

 SCHEDULE 2 
 1. Franchise Agreement. [FOR MARRIOTT BRANDS:] During the Term of this Agreement, subject to the availability of adequate funds, 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, 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. Likewise, Owner shall send promptly to Manager any and all notices that Owner receives from the Franchisor
with respect to the Hotel or the Franchise Agreement that would require action or compliance on the part of Manager. 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. 
 [FOR HILTON BRANDS:] During the Term of this Agreement,
subject to the availability of adequate funds, Manager shall perform all of the obligations of Owner as “Licensee” under the Franchise Agreement to the extent such obligations relate to the management or operation of the Hotel, including,
without limitation, the obligations of “Licensee” under Paragraphs 6, 7 and 8 of the Franchise Agreement, and Manager shall not commit any act or omit to take any action that would cause a default by the Licensee 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 Licensee 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. 
 2. Accounting Period. For purposes of this Agreement, the term “Accounting Periods” shall mean a calendar month, except that the first Accounting Period
shall begin on the Effective Date and shall end on the last day of the calendar month in which the Effective Date occurs. 
  

 4 

 3. Fiscal Year. [FOR MARRIOTT BRANDS:] For purposes of this Agreement, the term “Fiscal Year” shall mean
the fiscal year as of the Effective Date that ends at midnight on the Friday closest to December 31 in each calendar year; the new Fiscal Year begins on the Saturday immediately following said Friday. Any partial Fiscal Year between the
Effective Date and the commencement of the first full Fiscal Year shall constitute a separate Fiscal Year and shall be deemed the first 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. 
 [FOR HILTON BRANDS:] For purposes of this Agreement, the term “Fiscal Year” shall mean,
initially, the period beginning as of the Effective Date and ending at midnight on the following December 31 and thereafter each calendar year during the Term. Any partial Fiscal Year between the Effective Date and the commencement of the first
full Fiscal Year shall constitute a separate Fiscal Year and shall be deemed the first 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. 
  

 5 

 EXHIBIT A 
 LEGAL DESCRIPTION OF SITE 
 ALL that certain lot, parcel or tract of land, situate and lying in the Township
of Franklin, County of Somerset, State of New Jersey, and being more particularly described as follows: 
 BEGINNING at an iron pin found
on the southeasterly sideline of Davidson Avenue (66 feet wide), where the said pin is intersected by the most westerly corner of Lot 18.01, Block 468.01 and the most northerly corner of Lot 17.01, Block 468.01 about to be described; thence

  

	 	1.	Departing said sideline and running along the dividing line of Lots 17.01 and 18.01, Block 468.01, South 48 degrees 45 minutes 42 seconds East, a distance of 1,356.64 feet to a
capped iron pin found on the northwesterly sideline of Atrium Drive (a private street 60; R.O.W.); thence 

  

	 	2.	Continuing along said sideline, South 38 degrees 34 minutes 40 seconds West, a distance of 286.19 feet to a capped iron pin found, said pin being the most easterly corner of Lot
15.01, Block 468.01 and the most southerly corner of Lot 17.01, Block 468.01; thence 

  

	 	3.	Departing said sideline and running along the dividing line of Lots 15.01 and 17.01, Block 468.01, North 49 degrees 04 minutes 42 seconds West, a distance of 1,353.88 feet to a
capped iron pin found on the southeasterly sideline of Davidson Avenue; thence 

  

	 	4.	Continuing along said sideline North 38 degrees 06 minutes 18 seconds East, a distance of 293.81 feet to an iron pipe found, said pin being the POINT and PLACE OF BEGINNING.

 The above description is in accordance with a survey prepared by The Reynolds Group, Inc., dated December 30, 2005, revised to
September 27, 2006. 
 FOR INFORMATION PURPOSES ONLY: Also known as Lot 17.01 in Block 468.01 on the Township of Franklin Tax Map. 
  

 6EXHIBIT 10.17

 Exhibit 10.17 
 COURTYARD BY MARRIOTT 
 RELICENSING FRANCHISE AGREEMENT 
 between 
 MARRIOTT INTERNATIONAL,
INC. 
 Franchisor 
 and 
 APPLE EIGHT HOSPITALITY MANAGEMENT, INC. 
 Franchisee 
 Location: 250 Davidson Avenue, Somerset, NJ 08873-4115

 Dated as of: 

 COURTYARD BY MARRIOTT 
 RELICENSING FRANCHISE AGREEMENT 
 TABLE OF CONTENTS 
  

					
	 	  	 	  	PAGE
	RECITALS	  	1
			
	I.	  	GRANT	  	3
			
	II.	  	TERM	  	4
			
	III.	  	FEES	  	4
			
	IV.	  	COURTYARD BY MARRIOTT ASSOCIATION	  	6
			
	V.	  	MANAGEMENT, STAFFING AND TRAINING	  	7
			
	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
			
	XXI.	  	INDEPENDENT CONTRACTOR AND INDEMNIFICATION	  	39

  

 i 

					
	XXII.	  	APPROVALS AND WAIVERS	  	39
			
	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	  	43
			
	XXVIII.	  	WAIVER OF JURY TRIAL	  	44
			
	XXIX.	  	INJUNCTIVE RELIEF	  	44
			
	XXX.	  	FRANCHISEE ACKNOWLEDGMENTS	  	44
		
	ATTACHMENT A     FRANCHISE INFORMATION	  	47
		
	ATTACHMENT B     FORM OF GUARANTY	  	48
		
	ATTACHMENT C     FORM OF MANAGER ACKNOWLEDGMENT	  	51
		
	ATTACHMENT D     FORM OF ELECTRONIC SYSTEMS LICENSE AGREEMENT	  	55
		
	ATTACHMENT E     CHANGE OF OWNERSHIP RIDER	  	58
		
	 PROPERTY IMPROVEMENT PLAN ADDENDUM
	  	60
		
	 EXHIBIT A TO PROPERTY IMPROVEMENT PLAN ADDENDUM
	  	63
		
	 EXHIBIT B TO PROPERTY IMPROVEMENT PLAN ADDENDUM
	  	67
		
	 ATTACHMENT F     FORM OF OWNER AGREEMENT
	  	68

  

 ii 

 COURTYARD BY MARRIOTT 
 RELICENSING FRANCHISE AGREEMENT 
 THIS AGREEMENT is made and entered into effective as of the
     day of                     , 2007 (“Effective Date”), between Marriott International, Inc., a
Delaware corporation (“Franchisor”), and Apple Eight 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, TLC Somerset, LLC (“Existing Franchisee”) and Franchisor are parties to a Courtyard by Marriott franchise agreement (“Existing Franchise Agreement”) for the operation of the Hotel (defined
below); 
 WHEREAS, pursuant to that certain Purchase Contract, dated as of September 4, 2007, between Existing Franchisee and certain
of its affiliates and Apple Eight Hospitality Ownership, Inc., a Virginia corporation (“Owner”), Owner has purchased (i) a leasehold interest in the real property used in connection with the Hotel (as defined herein) (the
“Land”), and (ii) a fee simple interest in all buildings, structures, fixtures, parking areas and other improvements to the Land, and all related facilities, from Existing Franchisee (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 June 28, 2002 (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 E; 
 WHEREAS, Existing Franchisee is the ground lessee of the Hotel pursuant to that certain Ground Lease dated as of April 15, 1999 (as amended and
assigned, the “Ground Lease”), by and between Existing Franchisee and Martin E. Dorf, Trustee of the Dorf Trust, and Widewaters New Castle Development Company, LLC (“Ground Lessor”); 
 WHEREAS, Owner has purchased the leasehold interest of Existing Franchisee under the Ground Lease in the Land and Ground Lessor has consented to the
assignment of the Ground Lease to Owner; 
 WHEREAS, Owner is the owner of the Hotel (except for the Land) 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 F 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 Apple Eight Hospitality, Inc. (the “Guarantor”) of Franchisee’s obligations, in substantially the form set forth in Attachment B hereto.

 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: 
  

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 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 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 the 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 (as defined below) 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; 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 

  

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Marriott; TownePlace Suites by Marriott; Ritz-Carlton; Marriott Conference Centers; Marriott ExecuStay; The Residences at the Ritz-Carlton; JW Marriott
Residences; Nickelodeon Resorts by Marriott; 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. 
 E. Franchisee hereby
represents and warrants to Franchisor that (i) Owner is the sole owner of the Hotel (except for the Land), (ii) Owner holds leasehold title to the Land; (iii) the Hotel is leased to Franchisee pursuant to the Lease Agreement, and
(iv) 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 Effective Date and shall expire on November 3, 2026. 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

  

 4 

 
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 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. 
  

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 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, and shall be submitted to Franchisor together with any
reports required under Section XIII. All payments required in Paragraphs III.E. (ii) 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
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. 
  

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 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, Franchisor’s approval of such operator shall be effective only upon the execution by Franchisee and such management company of a Manager 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 trade name that is competitive with Franchisor, irrespective of the number of hotels operating under such trade name. 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 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. 
 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 Manager 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 Manager 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, 

  

 7 

 
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, 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 Manager 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 

  

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(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 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. 
 G. Franchisee hereby acknowledges and agrees that the termination of the Existing
Franchise Agreement and execution of this Agreement does not change or affect the status or 

  

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performance of the Hotel under the Quality Assurance Program (the “QA Program”) prior to the Effective Date, including its performance for the
current tracking period, or Franchisor’s rights thereunder with respect to such performance. Should the Hotel’s performance in the current tracking period fail to meet the QA Program requirements, the Hotel will be subject to the
applicable terms for such failure as set forth in the Manual. If the Hotel is in the Red Zone for the current tracking period and re-enters the Red Zone during any of the four tracking periods following the Effective Date, Franchisee will be in
default of this Agreement, and if such default is not cured within the applicable cure period, this Agreement may be subject to termination. 
 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. 
  

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 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. 
 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 upon notice 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 

  

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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. 
 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. 
  

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 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. 
 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: 
  

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 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 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

  

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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. 
 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; 
  

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 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; 
 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 Proprietary Marks is instituted or threatened against Franchisee, 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 partners or
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 immediately report to Franchisor the theft or loss of all or any part of the Confidential Information. The 

  

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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.
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 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

  

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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, shall at all times during the term of this Agreement 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) 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. Boiler and machinery insurance against loss or damage caused by machinery breakdown or explosion of
boilers or pressure vessels to the extent applicable to the Hotel. 
 c. Business interruption insurance covering at least twelve
(12) months’ loss of profits and necessary continuing expenses for interruptions caused by any occurrence covered by the insurance referred to in a. and b. immediately above. Such business interruption insurance shall name Franchisor as an
additional insured as its interest may appear. 
 d. 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 including business interruption
coverage in an amount not less than that set forth in Paragraph XIV.A.1.c. above. 
  

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 e. If the Hotel is located in an “earthquake prone zone” as determined by the U.S. Geological
Survey, earthquake 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 claims or losses arising or resulting from 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.3. through 7. shall by endorsement specifically name as unrestricted
additional insureds Franchisor, any affiliate of Franchisor designated by Franchisor, and their employees and agents. 
 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. 
  

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 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 be specifically endorsed to provide that the coverages will be primary and that any
insurance carried by any additional insured shall be excess and non-contributory. 
 5. 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. 
 6. 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.

 7. 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. 
 8.
Franchisee’s obligation to maintain the insurance hereunder shall not relieve Franchisee of its obligations under Section XXI. 
 9.
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,
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 

  

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(greater than 15%) interest in any entity that controls Franchisee, but excluding interests of limited 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. 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 the Transfer involves multiple hotels, must be completed within a short timeframe, or involves other
complications such that Franchisor determines in its Reasonable Business Judgment that it is necessary to obtain 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 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 

  

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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 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 

  

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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 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. 
  

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 (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 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. 
  

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 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. 
 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 

  

 28 

 
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 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. 
  

 29 

 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 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 

  

 30 

 
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 supersedeas 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.; 
 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; 
  

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 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 Ground Lease, Lease Agreement or Owner Agreement, and any such breach or default is
not cured within any applicable period thereunder, or if the Ground Lease, 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 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 

  

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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 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. 
  

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 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, all payments that have then accrued to Franchisor or its affiliates pursuant to other provisions of this Agreement up to the date of such termination (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: 
  

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 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 for at least two (2) years (whether pursuant to this Agreement or a franchise or management agreement
between Franchisor or its affiliate on the one hand and a previous franchisee or owner 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”):

  

																			
	 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	%

  

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 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.,
any costs and expenses incurred 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. 
 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. 
  

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 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 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. 
  

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 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 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. 
  

 38 

 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 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. 

  

 39 

 
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, 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 

  

 40 

 
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
		
	Notices to FRANCHISEE:	  	Apple Eight Hospitality Management, Inc.
		  	814 East Main Street
		  	Richmond, VA 23219
		  	Attn: Krissy Gathright, Vice President
		  	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. 
  

 41 

 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. 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. In entering this
Agreement, Franchisee represents and warrants that it did not rely on and Franchisor and Franchisor’s representatives have not made, any promises, representations or agreements relating to franchising this Approved Location except as expressly
contained in this Agreement. 
 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. 
 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. 
  

 42 

 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. 
 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. 
  

 43 

 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 
 IN ANY LITIGATION BETWEEN THE PARTIES FOUNDED UPON OR ARISING FROM THIS AGREEMENT, THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL, AND THE PARTIES HEREBY STIPULATE THAT ANY SUCH TRIAL SHALL OCCUR
WITHOUT A JURY. 
 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. 
 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 TEN (10) BUSINESS 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. 
  

 44 

 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. 
 {Signatures appear on the following page.} 
  

 45 

 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.
					
	  
	 		  	By:	 	 /s/ Liam Brown
	 	(SEAL)
	Assistant Secretary	 		  	Name:	 	Liam Brown
		 		  	Title:	 	
				
		 		  	FRANCHISEE	 	
			
	ATTEST:	 		  	 APPLE EIGHT HOSPITALITY MANAGEMENT, INC.,
 a Virginia corporation

					
	  
	 		  	By:	 	 /s/ Justin Knight
	 	(SEAL)
	Assistant Secretary	 		  	Name:	 	Justin Knight
		 		  	Title:	 	

  

 46 

 ATTACHMENT A 
 FRANCHISE INFORMATION 
  

	1.	Location of the Franchised Courtyard by Marriott 

 250
Davidson Avenue, Somerset, NJ 08873-4115 
  

	2.	Number of guest rooms 

 162 
  

	3.	Date for commencement of property improvement 

 Effective
Date 
  

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

 December 31, 2008, unless explicitly stated otherwise with respect to any particular item. 
  

	5.	Name of entity that will operate the Hotel 

 Newport
Chester, LLC 
  

	6.	Equity Interest(s) in Franchise or Franchisee 

 (Name(s),
Address(es), and percentage(s) of ownership) 
  

				
	Ownership of Apple Eight Hospitality Management, Inc.	  		
	 Apple Eight Hospitality, Inc.
 c/o Apple REIT Companies, 814 East Main Street, Richmond, Virginia 23219
	  	100	%
		
	Ownership of Apple Eight Hospitality, Inc.	  		
	 Apple REIT Eight, Inc.
 814 East Main Street, Richmond, Virginia 23219
	  	100	%
		
	Ownership of Apple REIT Eight, Inc.	  		
	 Publicly-Held Company
	  	100	%

  

 47 

 ATTACHMENT B 
 FORM OF GUARANTY 
 This GUARANTY (“Guaranty”) is executed as of
                    , 2007, by
                                        ,
a                                         
organized and existing under the laws of
                                        
(“Guarantor”), in favor of and for the benefit of Marriott International, Inc., a Delaware corporation (“Franchisor”). In consideration of and as an inducement to Franchisor to execute the Franchise Agreement dated as of
                    , 2007 (as such agreement may be amended, supplemented, restated or otherwise modified, the “Agreement”), by and
between Franchisor and
                                        
(“Franchisee”), Guarantor hereby agrees as follows: 
 1. Guarantor hereby unconditionally warrants to Franchisor and its successors
and assigns that all of Franchisee’s representations and warranties in (i) any application submitted by Franchisee to Franchisor in connection with the Agreement and (ii) the Agreement are true, accurate and complete as of the time
made and as of the date hereof. Further, Guarantor unconditionally guarantees that all of Franchisee’s obligations under the Agreement will be punctually paid and performed. 
 2. Upon default by Franchisee and notice from Franchisor, Guarantor will immediately make each payment and perform each obligation required by Franchisee
under the Agreement. Franchisor may extend, modify or release any indebtedness or obligation of Franchisee, or settle, adjust or compromise any claims against Franchisee without notice to Guarantor and any such action shall not affect the
obligations of Guarantor under this Guaranty. Guarantor hereby waives notice of any amendment, supplement, restatement or other modification of Agreement and notice of demand for payment or performance by Franchisee. Guarantor’s guarantee
hereunder shall extend to any extension or renewal of the Agreement. 
 3. Guarantor hereby agrees that the obligations of Guarantor under
this Guaranty shall not be reduced, limited, terminated, discharged, impaired or otherwise affected by: (i) Franchisee’s failure to pay a fee or provide other consideration to Guarantor in consideration for the issuance of this Guaranty;
(ii) the occurrence or continuance of a default under the Agreement; (iii) any assignment of the Agreement; (iv) any modification or amendment of, or waiver or consent or other action taken with respect to, the Agreement or any other
agreement or document delivered in connection therewith, including without limitation any indulgence in or extension of time for the payment of any amounts payable of Franchisee under or in connection with the Agreement or for the performance of any
other obligation of Franchisee under the Agreement (any of which modifications, amendments, waivers or consents may be agreed to or granted without the approval or consent of Guarantor); (v) the voluntary or involuntary liquidation, sale or
other disposition of all or any portion of Franchisee’s assets, or the receivership, insolvency, bankruptcy, reorganization or similar proceedings affecting Franchisee or its assets or the release or discharge of Franchisee from any of its
obligations under the Agreement; or (vi) any change of circumstances, whether or not foreseeable, and whether or not any such change does or might vary the risk of Guarantor hereunder. No failure of Franchisor to exercise any power or right
hereunder, or to insist upon compliance by Guarantor with any term hereof shall constitute a waiver of Franchisor’s right thereafter to demand full compliance with any term herein. 
 4. This Guaranty constitutes a guaranty of payment and performance and not of collection, and Guarantor specifically waives any obligation of Franchisor
to proceed against Franchisee on any money or property held by Franchisee or by any other person or entity as collateral security, by way of set-off or otherwise or against any other guarantor. Guarantor further agrees that this Guaranty shall
continue to be effective or be reinstated as the case may be, if at any time payment of any of the 

  

 48 

 
guaranteed obligations is rescinded or must otherwise be restored or returned by Franchisor upon the insolvency, bankruptcy or reorganization of Franchisee
or Guarantor, all as though such payment has not been made. 
 5. Except as otherwise expressly set forth herein, all notices, requests,
demands, statements and other communications required or permitted to be given hereunder shall be in writing and shall be delivered by nationally recognized overnight courier service to Franchisor at the address set forth in the Agreement and to
Guarantor at the address set forth below or for either at such other address as may be designated by Guarantor or by Franchisor, and such communication shall be effective three days after the day sent. This Guaranty may be amended only by a written
instrument signed by a duly authorized representative of each of Guarantor and Franchisor. 
 6. Guarantor hereby unconditionally and
irrevocably waives notice of acceptance of this Guaranty, presentment, demand, diligence, protest and notice of dishonor or of any other kind to which Guarantor otherwise might be entitled under applicable law. 
 7. Guarantor agrees to pay Franchisor all expenses, including reasonable attorneys’ fees and court costs, incurred by Franchisor, its subsidiaries,
affiliates, or any of their respective successors and assigns, to remedy any defaults of or enforce any rights under this Guaranty or the Agreement, effect termination of this Guaranty or the Agreement, or to collect any amounts due under this
Guaranty or the Agreement. 
 8. If more than one person or entity has executed this Guaranty as a Guarantor hereunder, the liability of each
such Guarantor shall be joint, several and primary. This Guaranty may be executed in any number of counterparts, each of which shall be deemed an original, but all of which, when taken together, shall constitute one and the same instrument. Delivery
of an executed signature page to this Guaranty by facsimile transmission shall be effective as delivery of a manually signed counterpart of this Guaranty. 
 9. Upon the death of any individual Guarantor, the estate of such Guarantor will be bound by this Guaranty but only for defaults and obligations hereunder existing at the time of death, and the obligations of any
other Guarantors will continue in full force and effect. 
 10. Guarantor represents and warrants to Franchisor that neither Guarantor
(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 (as defined in the Agreement). Neither Guarantor nor any
affiliate of Guarantor 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 Guarantor nor any affiliate of Guarantor is acting on behalf of a government
of any country that is subject to such an embargo. Guarantor 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 Section 10
incorrect. 
 11. This Guaranty is executed pursuant to, and shall be construed under and governed by, the laws of the State of Maryland,
without regard to its conflict of laws provisions. Guarantor hereby 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 Guaranty; and so far as is permitted under applicable law, this consent to personal jurisdiction shall be self-operative. 
 12. IN ANY LITIGATION BETWEEN FRANCHISOR AND GUARANTOR FOUNDED UPON OR ARISING FROM THIS GUARANTY OR THE FRANCHISE AGREEMENT, GUARANTOR HEREBY WAIVES ITS RIGHT TO A JURY TRIAL, AND GUARANTOR HEREBY STIPULATES THAT ANY
SUCH TRIAL SHALL OCCUR WITHOUT A JURY. 
  

 49 

 IN WITNESS WHEREOF, the undersigned has executed this Guaranty, under seal, as of the date first above
written. 
  

							
		 	GUARANTOR:
		
		 	[GUARANTOR]
				
		 	By:	 	  
	 	(SEAL)
		 	Name:	 	
		 	Title:	 	
			
	ADDRESS FOR NOTICES TO GUARANTOR:	 		 	
			
	  
	 		 	
	  
	 		 	
	  
	 		 	

  

 50 

 ATTACHMENT C 
 FORM OF MANAGER ACKNOWLEDGMENT 
 This Manager Acknowledgment (“Manager
Acknowledgment”) is executed as of                     , 2007, by and among
                                        ,
a                                         
(“Manager”),
                                        ,
a                                         
(“Franchisee”), and Marriott International, Inc., a Delaware corporation (“Franchisor”). 
 WHEREAS, Manager has entered
into an agreement (“Management Agreement”) with Franchisee, pursuant to which Manager will operate that certain
                                        
hotel located at
                                        
(the “Hotel”), in accordance with the terms and conditions of that certain
                                        
Hotel Franchise Agreement dated                     , 2007 (as such agreement may be amended, supplemented, restated or otherwise modified,
the “Franchise Agreement”) between Franchisor and Franchisee; and 
 WHEREAS, Franchisee has requested that Franchisor approve
Manager to operate the Hotel in accordance with the Franchise Agreement. 
 NOW, THEREFORE, in consideration of the mutual undertakings and
benefits to be derived herefrom, the receipt and sufficiency of which are acknowledged by each of the parties hereto, it is hereby agreed as follows: 
 1. Franchisor’s Consent. Franchisor hereby consents to the operation of the Hotel by Manager during the term of the Franchise Agreement on behalf of and subject to the control of Franchisee with respect to
and in accordance with the terms and conditions of the Franchise Agreement, subject to and upon the terms and conditions set forth below. Franchisor’s consent granted in the immediately preceding sentence shall terminate contemporaneously with
any termination of the Franchise Agreement without notice to Manager; provided that the duties and obligations of Manager that by their nature or express language survive such termination, including, without limitation, Sections 3.b. and c. below,
shall continue in full force and effect notwithstanding the termination of the Franchise Agreement. 
 2. Manager Representations and
Covenants. Manager represents and warrants to Franchisor that: 
 a. Manager is not in control of or controlled by persons who have been
convicted of any felony or a crime involving moral turpitude, or been convicted of any other crime or offense or committed any acts, or engaged in any conduct that is reasonably likely to have an adverse effect on the System, the Proprietary Marks,
the goodwill associated therewith, or Franchisor’s interests therein; 
 b. neither Manager nor any affiliate of Manager is a
Competitor; 
 c. the Management Agreement is valid, binding and enforceable; contains no terms, conditions, or provisions that are, or
through any act or omission of Franchisee or Manager, may be or may cause a breach of or default under the Franchise Agreement; and is for a term of not less than ten (10) years; and 
 d. neither Manager nor any affiliate of Manager is a person or entity with whom United States persons are prohibited from transacting business.

  

 51 

 3. Manager and Franchisee Acknowledgements. Manager and Franchisee covenant and agree to the
following: 
 a. Manager shall have the exclusive authority and responsibility for the management of the Hotel on behalf of and subject to the
control of Franchisee with respect to and in accordance with the terms and conditions of the Franchise Agreement. The general manager of the Hotel shall devote his or her full time and attention to the management and operation of the Hotel and shall
have successfully completed Franchisor’s management training program as required under the Franchise Agreement; 
 b. The Hotel will be
operated in strict compliance with the requirements of the Franchise Agreement, and Manager will observe fully and be bound by all terms, conditions and restrictions regarding the management and operation of the Hotel set forth in the Franchise
Agreement, including those related to Confidential Information and the Proprietary Marks, as if and as though Manager had executed the Franchise Agreement as “Franchisee,” provided that Manager obtains no rights under the terms of the
Franchise Agreement except as specifically set forth herein. Manager shall comply with all applicable laws, rules, and regulations, and shall obtain in a timely manner all permits, certificates, and licenses necessary for the full and proper
operation of the Hotel; 
 c. Franchisor may enforce directly against Manager all terms and conditions in the Franchise Agreement regarding
Intellectual Property during and subsequent to Manager’s tenure as operator of the Hotel; 
 d. Any default under the terms and
conditions of the Franchise Agreement caused wholly or partially by Manager shall constitute a default under the terms and conditions of the Management Agreement, for which Franchisee shall have the right to terminate the Management Agreement;

 e. Franchisee and Manager shall not modify or amend the Management Agreement in such a way as to create a conflict or other inconsistency
with the terms and conditions of the Franchise Agreement or this Manager Acknowledgment; 
 f. Except in extraordinary circumstances, such as
theft or fraud on the part of Manager or a default by Franchisee under the Franchise Agreement caused by Manager for which Franchisee needs to promptly remove Manager from the Hotel, the Management Agreement shall not be terminated or permitted to
expire without at least thirty (30) days’ prior written notice to Franchisor; and 
 g. Franchisor shall have the right to
communicate directly with Manager and the managers at the Hotel regarding day-to-day operations of the Hotel and such communications shall be deemed made to Franchisee because Manager and the managers at the Hotel are acting on behalf of Franchisee
and Manager as their agents and Franchisor shall have the right to rely on the instructions of such managers as to matters relating to the operation and promotion of the Hotel. 
 4. Existence and Power. Manager and Franchisee each represents and warrants with respect to itself 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 has the ability to perform its obligations under this Manager Acknowledgment and under the Management Agreement, and (iii) it has all
necessary power and authority to execute and deliver this Manager Acknowledgment. 
  

 52 

 5. Authorization; Contravention. 
 a. Manager and Franchisee each represents and warrants with respect to itself that the execution and delivery of this Manager Acknowledgment and the
performance by Manager and Franchisee of its respective obligations hereunder and under the Management Agreement: (i) have been duly authorized by all necessary action; (ii) do not require the consent 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 regulation of any governmental body or any decision, ruling, order, or award by which each may be bound or affected, or (c) any agreement, indenture or other instrument to which
each is a party; and 
 b. Manager represents and warrants to Franchisor that neither Manager (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 (as defined in the Franchise Agreement). Neither Manager nor any affiliate of Manager 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 Manager nor any affiliate of Manager is acting on behalf of a government of any country that is subject to such an
embargo. Manager further represents and warrants that it is in compliance with any applicable anti-money laundering law, including, without limitation, the USA Patriot Act. Manager 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 Section 5.b. incorrect. 
 6.
Controlling Agreement. If there are conflicts between any provision(s) of the Franchise Agreement and this Manager Acknowledgment on the one hand and the Management Agreement on the other hand, the provision(s) of the Franchise Agreement and
this Manager Acknowledgment shall control. 
 7. No Release. This Manager Acknowledgment shall not release or discharge
Franchisee from any liability or obligation under the Franchise Agreement, and Franchisee shall remain liable and responsible for the full performance and observance of all of the provisions, covenants, and conditions set forth in the Franchise
Agreement. 
 8. Limited Consent. Franchisor’s consent to Manager operating the Hotel is personal to Manager, and this Manager
Acknowledgment is not assignable by Franchisee or Manager. If there is a change in control of Manager or if Manager becomes, is acquired by, comes under the control of, or merges with or into a Competitor, or if there is a material adverse change to
the financial status or operational capacity of Manager, Franchisee shall promptly notify Franchisor of any such change and Manager shall be subject to approval under the Franchise Agreement as a new operator of the Hotel. 
 9. Defined Terms. Unless specifically defined herein, all capitalized terms used in this Manager Acknowledgment shall have the same meanings set
forth in the Franchise Agreement. 
 10. Counterparts. This Manager Acknowledgment may be executed in any number of counterparts, each
of which shall be deemed an original, but all of which, when taken together, shall constitute one and the same instrument. Delivery of an executed signature page to this Manager Acknowledgment by facsimile transmission shall be effective as delivery
of a manually signed counterpart of this Manager Acknowledgment. 
 11. Governing Law. This Manager Acknowledgment shall be construed
in accordance with the laws of the State of Maryland without regard to the conflict of laws principles thereof, and contains 

  

 53 

 
the entire agreement of the parties hereto. Manager hereby 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 Manager Acknowledgment; and so far as is permitted under applicable law, this consent to personal jurisdiction shall be self-operative.

 12. Manager’s Address. Manager’s mailing address is
                                        .
Manager agrees to provide written notice to both Franchisee and Franchisor if there is any change in Manager’s mailing address. 
 13.
IN ANY LITIGATION BETWEEN THE PARTIES FOUNDED UPON OR ARISING FROM THIS MANAGER ACKNOWLEDGMENT OR THE FRANCHISE AGREEMENT, THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL, AND THE PARTIES HEREBY STIPULATE THAT ANY SUCH TRIAL SHALL
OCCUR WITHOUT A JURY. 
 IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Manager Acknowledgment, under seal, as
of the date first above written. 
  

									
		 		 	FRANCHISOR:
			
	ATTEST:	 		 	MARRIOTT INTERNATIONAL, INC.
					
	  
	 		 	By:	 	  
	 	(SEAL)
	Assistant Secretary	 		 	Name:	 	
		 		 	Title:	 	
			
		 		 	FRANCHISEE:
			
	ATTEST:	 		 	[FRANCHISEE]
					
	  
	 		 	By:	 	  
	 	(SEAL)
	(Assistant) Secretary	 		 	Name:	 	
		 		 	Title:	 	
			
		 		 	MANAGER:
			
	ATTEST:	 		 	[MANAGER]
					
	  
	 		 	By:	 	  
	 	(SEAL)
	(Assistant) Secretary	 		 	Name:	 	
		 		 	Title:	 	

  

 54 

 ATTACHMENT D 
 FORM OF ELECTRONIC SYSTEMS LICENSE AGREEMENT 
 This Electronic Systems License Agreement (this
“License Agreement”) is made and entered into effective as of the      day of             , 2007 (“Effective Date”), between Marriott
International, Inc., a Delaware corporation (“Franchisor”), and
                                        ,
a                                         
(“Franchisee”). 
 WITNESSETH: 
 WHEREAS, Franchisor and Franchisee have entered into a Franchise Agreement dated as of the date hereof (the “Franchise Agreement”) pursuant to which Franchisee will establish and operate the Hotel under Franchisor’s System at
the location specified in the Franchise Agreement; and 
 WHEREAS, pursuant to the terms of the Franchise Agreement, Franchisee is required
to use certain Electronic Systems in connection with, and as a condition of operating the Hotel, and Franchisor desires to make available to Franchisee such Electronic Systems pursuant to the terms and conditions of this License Agreement.

 NOW, THEREFORE, in consideration of the premises and the undertakings and commitments of each party to the other party set forth herein,
the parties agree as follows: 
 1. Defined Terms. Capitalized terms not defined in this License Agreement shall have the meaning given
to them in the Franchise Agreement. 
 2. License Grant. Subject to the terms and conditions of this License Agreement, Franchisor
hereby grants to Franchisee a nonexclusive, non-transferable right and license to use the Electronic Systems made available by Franchisor. For each Electronic System, the license will commence on the installation date thereof, and shall extend until
termination of this License Agreement or such time as Franchisor ceases to make such Electronic System available in accordance with Franchisor’s operation of the System. 
 3. Ownership; Use Restrictions. All Electronic Systems shall at all times remain the sole property of Franchisor or any third-party vendors, as
applicable. Franchisee shall at all times treat the Electronic Systems as confidential. Franchisee shall not at any time, without Franchisor’s or such third party’s prior written consent (which may be withheld in Franchisor’s or such
third party’s sole discretion), copy, modify, reverse engineer, or otherwise duplicate the Electronic Systems or any component thereof, in whole or in part, or otherwise make the same available to any third party. Franchisee will use the
Electronic Systems for the exclusive purpose of operating the Hotel in accordance with the Franchise Agreement. Franchisee will take reasonable measures to ensure that only authorized employees of Franchisee at the Hotel have access to the
Electronic Systems, and only for permitted purposes hereunder. Such measures shall be subject to review and inspection by Franchisor. Franchisee will not attempt to modify, delete or circumvent any measures used by Franchisor to safeguard the
Electronic Systems and the Intellectual Property therein. Franchisor reserves the right to suspend Franchisee’s access to any Electronic System in order to protect Franchisor’s Intellectual Property or other systems, data or property of
Franchisor or its vendors. 
  

 55 

 4. Third Party Vendors; Preferred Vendors. If any Electronic System is provided by a third party
vendor, Franchisee will comply with the terms and conditions provided by such vendors in connection therewith. Franchisee acknowledges and agrees that such third party vendors shall have the right to enforce such terms and conditions directly
against Franchisee, and Franchisor shall have no liability in connection with Franchisee’s use of any third party Electronic System. Franchisor may also require Franchisee to execute license or similar agreements directly with such third party
vendors in order to obtain access to Electronic Systems that are required under Franchisor’s System. Franchisee shall be deemed to be in direct privity of contract with any third party provider of Electronic Systems. From time to time
Franchisor may designate a third party vendor of Electronic Systems as a “preferred vendor” based on Franchisor’s reasonable judgment that such third party Electronic System is suitable or desirable for Franchisor’s System.
Franchisee acknowledges and agrees that Franchisor neither endorses nor makes any representations or warranties in connection with any third party’s Electronic Systems, including any Electronic System provided by a preferred vendor. 

5. Support Services. Franchisor will use commercially reasonable efforts to maintain and support the Electronic Systems (the
“Services”) during the term of this License Agreement either by itself or through third party vendors as deemed appropriate by Franchisor. 
 6. Term and Termination. This License Agreement shall commence on the Effective Date and remain in force until termination of the Franchise Agreement. 
 7. DISCLAIMERS. FRANCHISEE ACKNOWLEDGES AND AGREES THAT, EXCEPT AS EXPRESSLY SET FORTH IN THIS LICENSE AGREEMENT, FRANCHISOR PROVIDES
THE ELECTRONIC SYSTEMS AND ANY ASSOCIATED SERVICES ON AN AS-IS BASIS, AND FRANCHISOR DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, CUSTOM OR
USAGE IN THE TRADE, IN CONNECTION WITH FRANCHISEE’S USE OF THE ELECTRONIC SYSTEMS AND THE PROVISION OF THE SERVICES UNDER THIS LICENSE AGREEMENT. 
 8. Limitation on Liability. Franchisor shall not be liable for any damage arising out of or in connection with the use or failure of any Electronic Systems or Services, including, but not limited to, corruption
of data, and Franchisee hereby waives any right to or claim of any exemplary, incidental, indirect, special, consequential, or other similar damages (including without limitation, loss of profits) in connection with the use or failure of Electronic
Systems or Service, even if Franchisor has been advised of the possibility of same. Franchisor shall use reasonable efforts, to the extent legally permissible, to pass through to Franchisee any warranties or other similar protections provided to
Franchisor by Franchisor’s vendors with respect to Electronic Systems. 
 9. Indemnification. Franchisee agrees to indemnify,
defend and hold harmless Franchisor and its respective officers, directors, employees, agents, successors, and assigns, from any losses, fines, liabilities, damages and claims, and all related costs and expenses, including reasonable legal fees,
disbursements and costs of investigation, litigation, settlement, judgment, interest and penalties (collectively, “Losses”) incurred by Franchisor in connection with Franchisee’s use of the Electronic Systems or any failure by
Franchisee to comply with the terms of this License Agreement. Such indemnification and hold harmless obligations shall be subject to and incorporated into Section XXI.E. of the Franchise Agreement. 
 10. Software License Rights Upon Termination. Franchisee acknowledges and agrees that most Software purchased by Franchisees through
Franchisor’s procurement process is purchased in 

  

 56 

 
Franchisor’s name, and is not assignable to Franchisee upon termination of this License Agreement (“Non-Assignable Software”). As such, upon
termination of this License Agreement, Franchisee’s right to use such Non-Assignable Software shall automatically cease. With respect to software purchased through Franchisor’s procurement process that is assignable to Franchisee upon
termination of this License Agreement (“Assignable Software”), upon the request of Franchisee, Franchisor will provide reasonable assistance in helping to facilitate assignment of such software, including obtaining consent of the vendor
where necessary. Upon termination of this License Agreement, Franchisee shall delete both Assignable Software and Non-Assignable Software obtained through Franchisor’s procurement process and, with respect to Assignable Software, Franchisee may
reinstall such software on the applicable computing equipment using software copies obtained by Franchisee directly from the applicable vendor. 
 11. Miscellaneous. All notices and other communications hereunder shall be in writing and shall be delivered in accordance with the terms of the Franchise Agreement. This License Agreement may not be modified or amended except by an
agreement in writing signed by the parties hereto. Waiver of any provision hereof in one or more instances shall not preclude enforcement thereof on future occasions. This License Agreement may not be assigned by Franchisee to any third party,
except in connection with an assignment of the Franchise Agreement as expressly permitted therein. This License Agreement and the legal relations between the parties hereto shall be governed by and construed in accordance with the laws of the
jurisdiction set forth in the Franchise Agreement. This License Agreement constitutes the entire agreement among the parties hereto with respect to the subject matter hereof, and supersedes all other communications, whether written or oral.

 IN WITNESS WHEREOF, the parties hereto have caused this License Agreement to be duly executed and delivered, under seal, as of the date
first above written. 
  

									
		  		 	FRANCHISOR:
			
	ATTEST:	  		 	MARRIOTT INTERNATIONAL, INC.
					
	  
	  		 	By:	 	  
	 	(SEAL)
	Assistant Secretary	  		 	Name:	 		 	
		  		 	Title:	 		 	
			
		  		 	FRANCHISEE:
			
	ATTEST/WITNESS:	  		 	[FRANCHISEE]
					
	  
	  		 	By:	 	  
	 	(SEAL)
	(Assistant) Secretary/Witness	  		 	Name:	 		 	
		  		 	Title:	 		 	

  

 57 

 ATTACHMENT E 
 CHANGE OF OWNERSHIP RIDER 
 Franchisee desires that the Hotel continue to be operated as a Courtyard by
Marriott hotel and the following additional terms and provisions and modifications to the Agreement shall apply, which shall be an integral part of the Agreement: 
  

	1.	Paragraph I.A is hereby amended by inserting the following sentence at the beginning of such Paragraph: 

 “On or before the Effective Date, Franchisee has (i) caused Existing Franchisee to deliver to Franchisor the Termination
Agreement duly executed by all parties thereto other than Franchisor and (ii) paid Franchisor’s outside legal counsel fees and expenses incurred in connection with the review, preparation and negotiation of this Agreement and ancillary
documents related thereto.” 
  

	2.	Paragraph I.B is hereby amended and restated in its entirety to read as follows: 

 “B. Franchisee understands and agrees that if Franchisee fails to comply with the requirements of the Property Improvement Plan 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 Franchisee to operate 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.” 
  

	3.	Paragraph III.A is hereby amended and restated in its entirety to read as follows: 

 “A. Franchisor acknowledges having received from Franchisee a transfer fee of Sixty-four Thousand and Eight Hundred Dollars
($64,800), which fee was paid by Franchisee to Franchisor in consideration for the administrative and other expenses incurred by Franchisor in processing Franchisee’s application (the “Transfer Fee”). Franchisee acknowledges and
agrees that the Transfer Fee is not refundable. Franchisee shall have no right to expand the number of rooms or suites at the Hotel beyond the number set forth in Attachment A to this Agreement. If Franchisee proposes to expand the number of rooms
or suites, 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 or suite for each proposed additional guest room or suite. 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.” 
  

	4.	Paragraph III. is hereby further amended by adding the following new Paragraph K after Paragraph J: 

 “K. Notwithstanding any provision of this Agreement to the contrary, Franchisee agrees that, except as provided below in this
Paragraph III.K, if the Effective Date is not the first day of an Accounting Period then, for the Accounting Period in which the Effective Date occurs (the “Initial Accounting Period”), Franchisee shall pay to Franchisor all amounts due to
Franchisor or its affiliates with respect to the operation of the Hotel for the entire Initial Accounting Period as though the term of this Agreement had begun on the first day of the Initial Accounting Period, and that any dispute between
Franchisee and Existing Franchisee concerning the allocation of payments for the Initial Accounting Period shall be no defense to Franchisee’s obligations pursuant to this Paragraph III.K. This Paragraph III.K. shall not apply to amounts due
pursuant to Paragraph III.C, III.D or III.E(i) above.” 
  

 58 

	5.	The references to the “Opening Date” in Paragraph XIII.B. are amended to be references to the “Effective Date.” 

  

	6.	Paragraph XXX is hereby amended by adding the following new Paragraphs F and G after Paragraph E: 

 “F. FRANCHISEE ACKNOWLEDGES THAT FRANCHISOR (i) DID NOT ENDORSE, RECOMMEND, OR OTHERWISE CONCUR WITH THE TERMS OF ANY TRANSACTION PURSUANT TO
WHICH FRANCHISEE MAY HAVE ACQUIRED THE RIGHT TO OPERATE THE HOTEL FROM A PRIOR FRANCHISEE OF FRANCHISOR; (ii) DID NOT PARTICIPATE IN THE DECISION REGARDING THE PRICE OR COMPENSATION TO BE PAID BY FRANCHISEE TO ANY THIRD PARTY FOR SUCH RIGHT,
WHICH DECISION WAS MADE WITHOUT ANY INTERVENTION, SUPPORT OR PARTICIPATION BY FRANCHISOR; AND (iii) DID NOT COMMENT UPON ANY FINANCIAL PROJECTIONS SUBMITTED TO FRANCHISEE BY OR ON BEHALF OF ANY PRIOR FRANCHISEE. 
 G. FRANCHISEE ACKNOWLEDGES AND AGREES TO BE BOUND BY ALL ANCILLARY AGREEMENTS BETWEEN EXISTING FRANCHISEE AND FRANCHISOR, INCLUDING, BUT NOT LIMITED TO,
ANY LICENSING AGREEMENTS, COST SHARING AGREEMENTS, CLUSTER REVENUE AGREEMENTS, AND ANY OTHER AGREEMENTS RELATING TO THE EXISTING FRANCHISE AGREEMENT. FRANCHISEE AGREES TO EXECUTE ANY SEPARATE ACKNOWLEDGEMENTS OR AMENDMENTS TO SUCH AGREEMENTS
SIGNIFYING FRANCHISEE’S WILLINGNESS TO BE BOUND BY SUCH AGREEMENTS AS FRANCHISOR MAY REASONABLY REQUEST.” 
  

 59 

 PROPERTY IMPROVEMENT PLAN 
 ADDENDUM 
 Franchisee agrees to upgrade and/or remodel the Hotel in accordance with the
following terms and provisions: 
 A. IMPROVEMENT OF THE HOTEL 
 1. Franchisee agrees to perform the work set forth at Exhibit A attached hereto. Unless otherwise specified in this Addendum, all work, including, without limitation, furniture, fixtures, equipment, furnishings, and
signs, shall conform to Courtyard by Marriott specifications as set forth in the Manual or otherwise in writing by Franchisor. 
 2. IN ORDER
TO SATISFY THE REQUIREMENTS OF THIS ADDENDUM, FRANCHISEE WILL EXPEND SUBSTANTIAL TIME, EFFORT, AND EXPENSE. NEVERTHELESS, IF FRANCHISEE DOES NOT SATISFY ALL THE REQUIREMENTS OF THIS ADDENDUM WITHIN THE TIME SPECIFIED ON ATTACHMENT A OF THIS
AGREEMENT, OR FRANCHISEE DOES NOT COMPLETE ANY ACTION REQUIRED IN THIS ADDENDUM BY SUCH OTHER DATE AS IS SPECIFIED HEREIN, FRANCHISOR SHALL HAVE THE RIGHT TO TERMINATE THIS AGREEMENT AS SET FORTH IN PARAGRAPH XVII.B.7 OF THIS AGREEMENT. FRANCHISEE
ACKNOWLEDGES AND AGREES THAT FRANCHISOR SHALL HAVE NO LIABILITY OR OBLIGATIONS TO FRANCHISEE FOR ANY LOSSES, OBLIGATIONS, LIABILITIES OR EXPENSES INCURRED BY FRANCHISEE IF THIS AGREEMENT IS TERMINATED BECAUSE FRANCHISEE FAILS TO SATISFY IN A TIMELY
MANNER THE REQUIREMENTS OF THIS ADDENDUM. 
 3. Franchisee agrees that time is of the essence with regard to the deadlines for the work set
forth at Exhibit A attached hereto. 
 4. Franchisee, at its expense, shall comply, to Franchisor’s satisfaction, with all of the
requirements set forth below: 
 a. If required to complete the renovations, upgrading or remodeling required by this Addendum, Franchisee
shall employ a qualified architect, design firm or engineer to prepare complete working drawings, including, architectural, mechanical, electrical, civil engineering, plumbing, and fire and life safety plans and landscaping drawings (collectively,
the “Plans”). Franchisor shall have the right to disapprove the architect and design firm (as well as any contractors or subcontractors) to be utilized in connection with the design, renovations, upgrading or remodeling of the Hotel. If
requested by Franchisor, Franchisee shall provide to Franchisor, at least thirty (30) days prior to their engagement by Franchisee, the name and address of any architect, design firm, engineer, contractor or subcontractor that it wishes to
retain. If Franchisor does not respond to Franchisee with its disapproval within thirty (30) days after Franchisor’s receipt of the name, address and any other information on the relevant party(ies) as requested by Franchisor, then
Franchisee may retain such party(ies). Franchisee acknowledges and agrees that Franchisor’s failure to request such information or to respond within the required time period or Franchisor’s consent to Franchisee’s use of such
party(ies) shall not be deemed an approval by Franchisor of any such party(ies). Franchisee acknowledges and agrees that (i) Franchisor is not liable for the unsatisfactory performance of any architect, design firm, engineer, contractor or
subcontractor retained by Franchisee, and (ii) Franchisee is solely responsible for making sure its Plans comply with state, local and federal laws, regulations and ordinances. Franchisee acknowledges and agrees that Franchisee is solely
responsible for making sure that the Hotel and any renovations, upgrading 

  

 60 

 
or remodeling thereto comply with state, local and federal laws, regulations and ordinances. Franchisee shall ensure that the Hotel complies with
Franchisor’s Fire Protection and Life Safety standards even if such standards exceed federal, state or local code requirements and shall maintain the Hotel in accordance with such standards, as the same may be modified from time to time by
Franchisor in its sole discretion. Franchisor requires that the Hotel comply with all state, local, and federal laws, codes and regulations, including but not limited to the Americans with Disabilities Act and/or other similar state laws, codes,
and/or regulations governing public accommodations for persons with disabilities. Franchisee shall, upon the earlier of (i) completion of the work or (ii) the first anniversary of the Effective Date, provide to Franchisor a written
certificate or opinion from its architect, licensed professional engineer, or recognized expert consultant on the Americans with Disabilities Act stating that the Hotel conforms to the requirements of the Americans with Disabilities Act, the related
federal regulations, and all other applicable state and local laws, regulations and other requirements governing public accommodations for persons with disabilities. In the event that the completion date for any item or items set forth in Exhibit A
extends beyond the first anniversary of the Effective Date, Franchisee shall provide an additional certificate to Franchisor with respect to such item or items upon final completion of all work related to any and all such items. The certificate or
opinion should be in a form substantially identical to the form attached hereto as Exhibit B. 
 b. Franchisee must submit Plans and
specifications, furniture layouts and FF&E specifications/samples for all work required hereunder to Franchisor for approval prior to commencing such work. Franchisor shall have the right to charge Franchisee an amount equal to One Hundred
Twenty-Five Dollars ($125) multiplied by the number of hours required for Franchisor’s review of Franchisee’s Plans. When approved by Franchisor, such Plans shall not thereafter be changed or modified, including changes required by
governmental authorities, without the prior written consent of Franchisor. Franchisee acknowledges and agrees that Franchisor’s review of the Plans under this Paragraph A.4.b. is limited solely to determining whether the Plans comply with
Franchisor’s design and construction criteria and the approval by Franchisor of the Plans shall be limited solely to compliance with such design and construction criteria. 
 c. Franchisee shall obtain all permits and certifications required for lawful completion of the renovations, upgrading or remodeling required by this
Addendum and operation of the Hotel including, without limitation, zoning, access, sign, building permits and fire requirements and shall certify in writing to Franchisor, if requested, that all such permits and certifications have been obtained.

 5. During the course of performing the work required by this Addendum, Franchisee, at its expense, shall comply, to Franchisor’s
satisfaction, with all of the requirements set forth below: 
 a. The Hotel must comply with the standards set forth in the most recent
versions of the Manual. 
 b. The Hotel is subject to further review by Franchisor to, among other things, ensure that the Hotel complies
with the requirements of the Property Improvement Plan (“PIP Review”). Franchisee shall ensure that the Hotel complies with all requirements specified by Franchisor following any PIP Review. Franchisee shall cooperate fully, and shall
cause its contractors and subcontractors to cooperate fully, with any inspections conducted by Franchisor pursuant to any PIP Review. 
 c.
If any material changes to the Hotel occur after October 15, 2007, then all such changes shall be subject to additional review by Franchisor (“Material Change Review”). 

  

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Franchisee shall ensure that the Hotel complies with all requirements specified by Franchisor following a Material Change Review. Franchisee shall cooperate
fully, and shall cause its contractor and subcontractors to cooperate fully, with any inspections conducted by Franchisor pursuant to a Material Change Review. 
 d. Franchisor shall not be deemed to have approved any work done pursuant to this Addendum unless such approval is set forth in writing and signed by Franchisor’s authorized representative. If such approval is
partial or contingent, Franchisee hereby authorizes its General Manager of the Hotel or its Director of Operations (or similarly titled person) to acknowledge in writing the additional work to be performed and the time within which such work will be
performed, and such written acknowledgement shall be binding on Franchisee. 
 e. Franchisee shall comply with the relevant insurance
requirements set forth in Section XIV. of this Agreement. 
 6. Franchisor’s exercise of its rights to approve and inspect any
renovation, upgrading or remodeling of the Hotel shall be solely for the purpose of assuring compliance with the terms and conditions of this Agreement and this Addendum, and Franchisor shall have no liability or obligation with respect to
renovation, upgrading, remodeling or furnishing of the Hotel. 
 7. Upon Franchisee’s written request and provided Franchisee has
diligently pursued commencement and completion of the renovation, remodeling or upgrading of the Hotel, Franchisor may, in its sole discretion, extend the dates specified in Attachment A of this Agreement for commencement and completion of the
action required in this Addendum. Extension requests shall be considered in increments of one or more months. For any extension, Franchisor shall have the right to require Franchisee to pay to Franchisor a nonrefundable extension fee not to exceed
Two Thousand Dollars ($2,000) per month for each month of the extension. The extension fee shall be paid to Franchisor with the written request for the extension and shall be fully refunded in the event Franchisor declines to grant the requested
extension. 
 B. DEFAULT AND TERMINATION DUE TO FAILURE TO SATISFY REQUIREMENTS 
 Franchisee shall be deemed to be in default and Franchisor may, at its option, terminate this Agreement and all rights granted thereunder effective immediately upon Franchisee’s receipt of notice or upon first
refusal of delivery of notice by Franchisor, upon the occurrence of any of the following events: 
 1. if Franchisee fails to commence the
Property Improvement Plan for the Hotel in accordance with all of the terms and conditions of this Addendum within the time prescribed at Paragraph 3 of Attachment A of this Agreement or fails to control through fee ownership or leasehold the site
of the Hotel; or 
 2. if Franchisee fails to complete any action in accordance with all of the terms and conditions of this Agreement and
this Addendum within the time prescribed at Paragraph 4 of Attachment A to this Agreement or by such other date as specified herein. 
  

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 EXHIBIT A TO PROPERTY IMPROVEMENT PLAN ADDENDUM 
 SCOPE OF WORK 
 Franchisee agrees to perform
all work and install the items specified below, in addition to satisfying all other requirements set forth in this Agreement as of the dates specified herein. All renovation work, including furniture, fixtures, equipment, furnishings and signs shall
conform to Franchisor’s specifications and standards as set forth in the manuals and drawings or otherwise specified or agreed to in writing by Franchisor. 
 The purpose of this Addendum is to specify the scope of work to be accomplished and the timing appropriate therefor. All work identified must be performed using materials and specifications satisfactory to Franchisor.
The work set forth in this scope of work is in addition to, and the completion of such work does not satisfy, Franchisee’s obligation to periodically update and renovate the Hotel pursuant to Paragraph VII.D. of the Agreement, which obligation
pursuant to Paragraph VII.D. is independent of Franchisee’s obligation to complete the work set forth herein. 
 All items are to
be completed by December 31, 2008, unless otherwise noted with respect to a particular item. 
 I. BUILDING INTERIOR 
 A. LOBBY / PUBLIC SPACES 
  

	 	1.	Implement new public space design concept as required at time of implementation. 

 B. MEETING ROOM / BOARD ROOM 
  

	 	1.	Implement new public space design concept as required at time of implementation. 

 C. PUBLIC RESTROOMS 
  

	 	1.	Implement new public space design concept as required at time of implementation. 

 D. EXERCISE ROOM 
  

	 	1.	Implement new public space design concept as required at time of implementation. 

 E. POOL / SPA / PORCH / GAZEBO 
  

	 	1.	Implement new public space design concept as required at time of implementation. 

	 	2.	Repair spa. 

	 	3.	Repair roof over indoor pool, repair drywall ceiling and repaint. 

  

 63 

 F. OFFICES 
  

	 	1.	Replace carpet, padding and carpet base. 

	 	2.	Install corner guards. 

	 	3.	Repaint previously-painted doors and trim. 

	 	4.	Replace stained or damaged ceiling tiles and/or grid. 

 G. EMPLOYEE DINING 
  

	 	1.	Replace mini-blinds at windows. 

	 	2.	Paint walls. 

 H. BACK OF HOUSE 

 

	 	1.	Clean and paint all walls. 

	 	2.	Replace any damaged or stained ceiling tiles and/or grid. 

	 	3.	Provide an OSHA-approved, hard-plumbed eye wash station, directly connected to cold water supply line and accessible at all times in engineering office. 

	 	4.	Do not use mechanical and electrical rooms for storage, and remove all miscellaneous items. 

	 	5.	Provide new painted shelving in linen storage room. 

 I. CORRIDORS / STAIRWELLS 
  

	 	1.	Replace carpet, padding and carpet base. 

	 	2.	Replace wall vinyl. 

	 	3.	Replace/provide console tables at elevator Lobby with floral arrangement and install mirror or artwork over console table. 

	 	4.	Replace/provide upholstered seating at elevator lobby. 

	 	5.	Replace window treatments. 

	 	6.	Replace corner guards. 

	 	7.	Replace decorative, hardwired lighting. 

	 	8.	Replace any damaged or stained ceiling tiles and/or grid. 

	 	9.	Repaint door trim. 

 J. GUESTROOMS

  

	 	1.	Replace carpet, padding and base. 

	 	2.	Replace upholstered seating. 

	 	3.	Install current bedding package, to include accent pillow, bed skirt and bed scarf. 

	 	4.	Replace window treatments with current standard (sheers and blackout). 

	 	5.	Replace artwork. 

	 	6.	Replace decorative mirrors. 

	 	7.	Replace lamp shades only. 

	 	8.	Replace wall vinyl (to include accent wall vinyl). 

	 	9.	Touch up casegoods. 

	 	10.	Replace armoire in King Suites with stand for new LCD TV. 

	 	11.	Install undercounter refrigerators in suites. 

	 	12.	Install artwork over suite bar. 

	 	13.	Replace corner guards to match wall vinyl. 

	 	14.	Replace door trim. 

	 	15.	Reface bar millwork to new laminate finish to match case goods. Provide new brushed chrome door pulls. 

	 	16.	Replace TV’s with 32” LCD TV per current standards. 

  

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 K. GUESTROOM BATH 
  

	 	1.	Replace wall vinyl. 

	 	2.	Install Courtyard standard shower curtain rings. 

	 	3.	Install new artwork. 

	 	4.	Replace any bent or otherwise damaged hardware. 

	 	5.	Replace cracked/bowed tub surround. 

 II. BUILDING EXTERIOR

 A. SITE ENTRANCE / PORTE COCHERE 
  

	 	1.	Power wash drop off area. 

	 	2.	Install new decorative lighting (i.e. sconces) at Porte Cochere. 

 B. ARCHITECTURAL FAÇADE / BUILDING ENVELOPE 
  

	 	1.	Clean stained areas to “like new” condition. 

 C. LANDSCAPE / VISUAL BARRIERS 
  

	 	1.	Maximize landscape screening at all electrical transformers and at all ground-mounted equipment. 

	 	2.	Remove all dead or misshapen plant materials. 

	 	3.	Provide additional landscaping at main entry. 

 D.
ENGINEERING / FIRE PROTECTION / LIFE SAFETY 
  

	 	1.	Install carbon monoxide detectors with integrated sounder connected to the building electric system (hardwired) in areas with fuel-fired equipment. These areas include the boiler
room, the lobby (near the fireplace), the pool equipment room, the main laundry room, and the kitchen. (to be completed within 30 days of Effective Date) 

	 	2.	Remove storage from fire pump room, mechanical, and electrical rooms. Ensure a minimum 36” clearance around all electrical panels throughout the property. (to be
completed within 30 days of Effective Date) 

	 	3.	Remove storage from underneath both stairwells on the first floor. (to be completed within 30 days of Effective Date) 

	 	4.	Place all flammable liquids, including non-latex paint and paint thinners in approved fire proof cabinets. (to be completed within 30 days of Effective Date)

	 	5.	Properly label all stairs. A common system used in the “A” and “B” stairwells or stairwell “1” and stairwell “2”. This marking has to be on
each floor directly next to the floor number. Example: “Stairwell 3A” or “Stairwell 6B”. (to be completed within 6 months of Effective Date) 

	 	6.	Ensure that all exits have exterior emergency lighting (and are operational) with battery back-up. Currently, most but not all, exits do have these lights. Some of the lights may
not be working. (to be completed within 6 months of Effective Date) 

  

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	 	7.	Install emergency lighting with battery back-up in the back of the house area. (to be completed within 6 months of Effective Date) 

	 	8.	Install an inspector’s test at the hydraulically remote area of each fire sprinkler zone. Equip test with a hard piped drain to the exterior on ground level. (to be
completed within 6 months of Effective Date) 

 FOR INTERNAL USE ONLY 
  

			
	OASIS TR Date:	  	12/31/08
		
	OASIS RD Date:	  	12/31/08

  

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 EXHIBIT B TO PROPERTY IMPROVEMENT PLAN ADDENDUM 
 ADA CERTIFICATION 
 (TO BE
COMPLETED BY FRANCHISEE’S ARCHITECT, ENGINEER, ADA 
 CONSULTANT, OR OTHER LICENSED PROFESSIONAL) 
 In connection with the proposed [NAME AND LOCATION OF HOTEL] (the “Hotel”), I hereby represent and certify to [FRANCHISEE] and to Marriott
International, Inc. that: 
  

	(i)	I have used professionally reasonable efforts to ensure that the Hotel conforms to and complies with the design standards and requirements of the Americans with Disabilities Act
(“ADA”), the ADA Architectural Guidelines (“ADAAG”), and all other related or similar state and local laws, regulations, and other requirements governing public accommodations for persons with disabilities in effect at the time
that this certification is made, and 

  

	(ii)	In my professional judgment, the Hotel does in fact conform to and comply with such design standards and requirements. 

  

			
		
	By:	 	  

		
	Print Name:	 	  

		
	Firm:	 	  

		
	Date:	 	  

  

 67 

 ATTACHMENT F 
 FORM OF OWNER AGREEMENT 
 This AGREEMENT (“Agreement”) is entered into as of the
     day of                     , 2007, by and among Marriott International, Inc., a Delaware corporation
(“Franchisor”),
                                        ,
a                                         
(“Franchisee”), and
                                        ,
a                                         
(“Owner”). 
 WITNESSETH: 
 [The Franchise Agreement should be revised to account for the Owner Agreement. The grant of the franchise should be conditioned on the existence of a valid and effective Owner Agreement. Owner’s or Franchisee’s breach of the
Owner Agreement and the termination of the Owner Agreement should be defaults under the Franchise Agreement granting Franchisor the right to terminate the Franchise Agreement.] 
 WHEREAS, Franchisor and Franchisee are parties to that certain Franchise Agreement dated as of
                     (as may be amended from time to time, the “Franchise Agreement”) relating to the Hotel (as defined in
the Franchise Agreement); and 
 WHEREAS, Owner represents and warrants that it holds fee title to the Hotel; and 
 WHEREAS, Owner and Franchisee [will enter] [have entered] into a lease agreement, management agreement or operating agreement (the “Operating
Agreement”) whereby Franchisee will lease the Hotel from Owner and will operate the Hotel; and 
 WHEREAS, Owner, Franchisee and
Franchisor desire that the Hotel be operated as a [        ] Hotel pursuant to the terms and conditions of the Franchise Agreement and this Agreement. 
 NOW, THEREFORE, the parties, in consideration of the premises and the undertakings and commitments of each party set forth herein, agree as follows:

 1. [Intentionally Omitted] 
 2. Termination of the
Franchise Agreement. 
 Franchisor shall have the right to terminate this Agreement immediately upon termination of the Franchise
Agreement by delivering written notice to Owner. 
 3. Termination of the Operating Agreement. 
 Owner shall notify Franchisor immediately of any pending or actual termination or expiration of the Operating Agreement that is to occur or occurred prior
to expiration of the Franchise Agreement, and Franchisor shall have the right to terminate this Agreement and the Franchise Agreement in connection with any such expiration or termination. If there is a dispute between Owner and Franchisee relating
to the termination of the Operating Agreement, Franchisor shall have the right to permit Franchisee to operate the Hotel pursuant to the Franchise Agreement so long as Franchisee has possession of the Hotel, and all of Franchisor’s rights under
this Agreement shall be reserved pending resolution of such dispute whether by final court or administrative order or negotiated settlement. 
  

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 4. Transfers Not Involving Competitors. 
 Section XV of the Franchise Agreement shall apply hereunder to any Transfer of the Hotel, any ownership interest in the Hotel, this Agreement or the
Operating Agreement, or of a direct or indirect ownership interest in Owner (including any controlling (greater than 15%) interest in any entity that controls Owner, but excluding interests of limited partners, if any) as if Owner were a party
thereto; any such Transfer(s) by Owner as described above shall be made only in strict compliance with said Section XV as the context requires. 
 5.
Transfers Involving a Competitor and Right of First Refusal. 
 A. No Transfers to a Competitor. If there is a proposed Transfer
to a Competitor of the Hotel, any ownership interest in the Hotel, Owner’s ownership interest in this Agreement or in the Operating Agreement, or an ownership interest in either Owner or an affiliate of Owner, and Owner or such affiliate of
Owner (or such Competitor, as the case may be) wishes to accept such proposed Transfer, Owner shall give written notice thereof to Franchisor, stating the name and full identity of the prospective purchaser or tenant, as the case may be, including
the names and addresses of the owners or holders of any ownership interest 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 Owner. Within thirty (30) days after receipt by Franchisor of such notice from Owner, Franchisor, in its sole discretion, shall elect by notice to Owner one of the immediately
following four alternatives: 
 (1) Acquisition of Control of Hotel for Cash. 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 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, Owner 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) Acquisition of Owner/Acquisition of Control of Hotel. If the proposed Transfer is a purchase or lease of all or a portion of the ownership
interests or the assets (which includes the Hotel) of Owner or an affiliate of Owner, or a merger with or into Owner or an affiliate of Owner, or the acquisition of Owner’s ownership interest in this Agreement or in the Operating 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 at the purchase or lease price pursuant to terms 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 purchase or lease price and terms within fifteen (15) days of
Franchisor’s election, the purchase or lease price of the Hotel shall be determined as follows. Franchisor and Owner each shall, at its own expense and within thirty (30) days thereafter, obtain an appraisal of the fair market value of the
Hotel from a nationally recognized appraiser of Hotel properties comparable to such 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 

  

 69 

 
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 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 Owner 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 Arbitrator’s 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, to either (a) purchase the Hotel premises and related property at the valuation determined by the Arbitrator, or
(b) terminate this Agreement pursuant to clause (3) below. 
 (3) Termination of Franchise Agreement. To place Owner and
Franchisee in default and to terminate this Agreement and the Franchise Agreement, in which event Owner and Franchisee shall be obligated, jointly and severally, to pay Franchisor the applicable liquidated damages as set forth in Section XVIII.E of
the Franchise Agreement. 
 (4) Consent. To consent to such Transfer, which consent shall be on such terms and conditions as
Franchisor may require, in its sole discretion. 
 This Section 5.A shall survive termination of this Agreement if, prior to such termination, any event
specified in Section 5 occurs, as a result of which Franchisor has exercised (or has the right to exercise) the right of first refusal provided herein. 
 B. Affiliates. Notwithstanding anything to the contrary set forth in Section 5.A, if a Competitor proposes to acquire all of the ownership interests of an affiliate of Owner and the affiliate does not
directly or indirectly own, lease or operate any hotels operating under a trade name or trademark owned by Franchisor or any of its affiliates, 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 Section 5.A. 
 C. Foreclosure. If the Transfer
to a Competitor is by foreclosure, judicial or legal process, such as execution and levy, or by any other means, Franchisor (or its designee) shall have the right to purchase the Hotel upon written notice to Owner. If the parties are unable to agree
as to a purchase price and terms within thirty (30) 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 Section 5.A(2)
above. This provision shall survive the termination of this Agreement and the termination of the Franchise Agreement under Paragraph XVII.A thereof in connection with the Competitor’s actions under Paragraph XV.E. of the Franchise Agreement or
this Section 5.C. 
  

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 D. Owner Becomes a Competitor. If Owner or any of its affiliates becomes a Competitor, Owner shall
so notify Franchisor providing the data required pursuant to Section 5.A., or if Franchisor otherwise determines that Owner or any of its affiliates has become a Competitor, Franchisor shall so notify Owner and assert that Franchisor has the
rights set forth above at Section 5.A. Provided Franchisor has received sufficient pricing and other data to allow an informed decision, Franchisor shall make its election thereunder within thirty (30) days of Franchisor’s receipt of
such notice from Owner or within thirty days of Franchisor’s giving notice to Owner in which Franchisor asserts that Owner or any of its affiliates has become a Competitor. 
 E. Right of First Refusal. In addition to the events specified in Section 5.A, Franchisor shall have the rights set forth at
Section 5.A. if any event occurs granting Franchisor a right of first refusal under Section XV of the Franchise Agreement. 
 F. Real
Estate Rights. Owner acknowledges that Franchisor’s rights under this Section 5 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 Owner shall cooperate as requested by Franchisor in such filing. Such recording shall indicate that Franchisor’s rights in real estate under Section 5 of this Agreement shall be subordinate
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 Section 7
hereof. Owner acknowledges and agrees that damages are not an adequate remedy in the event that Owner breaches its obligations under this Section 5, and Franchisor shall be entitled to injunctive relief to prevent or remedy such breach.

 G. Survival of Right of First Refusal. Except for termination of this Agreement pursuant to Section 5.A.(3) above, Owner
agrees that Franchisor’s rights under Section 5 shall survive early termination of this Agreement (as opposed to expiration of this Agreement as set forth in Section 12 hereof) and shall bind Owner, and its affiliates, if: 

(i) prior to or within six (6) months after termination of this Agreement, a Competitor offers (or receives an offer from Owner or an affiliate of
Owner) to purchase or lease the Hotel or to purchase an ownership interest in Owner or an affiliate of Owner, or merge with or into either Owner or such affiliate; and 
 (ii) A. the Franchise Agreement is terminated pursuant to Paragraphs XVII.A., XVII.B.1. or 4. thereof, or pursuant to Paragraph XVII.C. thereof, or
pursuant to Paragraph XVII.D. thereof based upon a violation of Section X.B thereof; or 
 B. the Franchise Agreement is terminated pursuant
to Paragraph XVII.A. thereof and an affiliate, principal or director of Owner 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. of the Franchise Agreement. 
 In addition, Franchisor’s rights under Section 5 shall survive any purported early
termination of this Agreement (as opposed to expiration of this Agreement as set forth in Section 12 hereof) by Owner, and shall bind Owner and its affiliates, if, prior to or within six (6) months after such purported termination, a
Competitor offers (or receives an offer from Owner or an affiliate of Owner) to purchase or lease the Hotel, or to purchase an ownership interest in Owner or an affiliate of Owner, or merge with or into either Owner or such affiliate. 
  

 71 

 6. [Intentionally Omitted] 
 7. Financing of the Hotel. 
 Owner 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 Owner or Franchisee (whether such indebtedness is incurred (i) individually on behalf of the Hotel or (ii) on a 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. Owner shall give written notice to Franchisor of the component hotels and legal entities
in a Financed Pool prior to incurring such indebtedness. 
 8. Operation of the Hotel. 
 The Hotel shall be operated as a [            ] Hotel for the term hereof, and Owner shall
cause Franchisee to operate the Hotel in accordance with the terms of the Franchise Agreement. Failure of the Owner to cause the Hotel to be so operated shall be a material default by Owner hereunder giving Franchisor the right to terminate this
Agreement and the Franchise Agreement. 
 9. Owner’s Obligations under the Franchise Agreement. 
 A. Franchisee Default. If Franchisor declares Franchisee to be in default under the Franchise Agreement, Franchisor may enforce the Franchise
Agreement directly against Owner as if Owner were the Franchisee under the Franchise Agreement, and Owner and shall perform, or cause to be performed, the provisions of the Franchise Agreement including, without limitation, Section III on fees,
Section VI on operation of the Hotel, Section XIV on insurance and Section XXI on indemnification. 
 B. Termination of Franchise
Agreement. If the Franchise Agreement is terminated and Franchisee fails to perform any post-termination obligation under the Franchise Agreement, Franchisor may enforce the Franchise Agreement directly against Owner as if Owner were the
Franchisee under the Franchise Agreement, and Owner shall perform, or cause to be performed, all post-termination obligations of Franchisee under the Franchise Agreement, including, without limitation, Section XVIII on liquidated damages and on
de-identifying the Hotel as part of the System and cessation of the use of the System and Proprietary Marks, and Section XXI on indemnification. 
 10.
Provisions of the Operating Agreement. 
 The Operating Agreement shall include the substance of the immediately following provisions.

  

 72 

 (i) Franchisee shall have exclusive possession of the Hotel and exclusive control of the day-to-day
operations of the Hotel, subject to a management agreement that complies with the provisions of this Agreement. 
 (ii) The Hotel will be
operated in full compliance with the provisions of the Franchise Agreement. The Franchise Agreement shall control in case of conflict with the Operating Agreement. 
 (iii) The provisions in the Operating Agreement that reflect this Section 10 and any other provisions in the Operating Agreement affecting or for the benefit of Franchisor, shall not be amended or modified
without Franchisor’s prior written consent. 
 11. Surrender by Franchisee. 
 Upon the occurrence of the events described herein for the replacement of Franchisee as possessor and operator of the Hotel, Franchisee shall surrender
its rights and interest in the Franchise Agreement to Franchisor and peaceably turn over possession of the Hotel to Owner without need for legal or judicial process. 
 12. Term. 
 The term of this Agreement shall commence on the date first set forth above and shall
expire upon the expiration of the term of the Franchise Agreement, unless this Agreement is terminated prior thereto in accordance with this Agreement. If the term of the Franchise Agreement is renewed or otherwise extended, the term of this
Agreement shall automatically be extended to be coterminous with the extended term of the relevant franchise agreement. 
 13. Survival. 

Notwithstanding any provision to the contrary contained herein, Sections 9, 16 and 17 of this Agreement shall survive and remain in full force and
effect after termination or expiration of this Agreement for any reason, and Sections 5 and 14 shall survive the termination or expiration of this Agreement for any reason to the extent provided in such Sections. 
 14. Casualty. 
 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, Owner shall have the
right to terminate this Agreement and to cause the Franchise Agreement to be terminated if it elects not to rebuild the Hotel upon written 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 the Franchise Agreement would otherwise have ended pursuant to Section II of the Franchise Agreement if such notice of termination had not been given (“Term Expiration
Date”), Owner or Franchisee, or any affiliated companies or any company controlled by a controlling stockholder of Owner or Franchisee if Owner or Franchisee is a corporation, or any of their respective general partners, or any entity in which
Owner or Franchisee or any of their respective general partners (the “Owner Entity” or “Franchisee Entity”) has a fifteen percent (15%) or greater 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 Franchisor or one
of its affiliates, then in such event, Owner or Franchisee, depending upon whether 

  

 73 

 
an Owner Entity or Franchisee Entity has the ownership interest in or is operating the Other Lodging Product, shall be obligated to promptly pay to
Franchisor an amount equal to the liquidated damages set forth in Section XVIII.E. of the Franchise Agreement, and the time element for calculating the amount of 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 Owner Entity or Franchisee Entity and (ii) the Term Expiration Date. Owner’s and Franchisee’s obligations set forth in this Section 14 shall survive termination of this Agreement
pursuant to this Section 14. In the event that the Hotel does not close for ninety (90) days or the Owner does not elect to terminate this Agreement in accordance with the provisions of this Section 14, 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 of the Franchise Agreement. 
 15. Condemnation. 
 Owner shall, at the earliest
possible time, give Franchisor notice of any proposed taking of the Hotel 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 and the Franchise Agreement shall terminate upon notice by Franchisor to Owner and Franchisee, and Franchisor shall share in the condemnation award to the extent such award includes an allocation for its lost royalty
income. If a non-substantial condemnation shall occur, then in such event Owner 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. 
 16.
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: 
  

							
	If to Franchisor:	  	Marriott International, Inc.
		  	Franchise Attorney
		  	Law Department 52/923.25
		  	10400 Fernwood Road
		  	Bethesda, MD 20817
		
	With a copy to:	  	Marriott International, Inc.
		  	Vice President, Owner and Franchise Services
		  	10400 Fernwood Road
		  	Bethesda, MD 20817
				
	If to Franchisee:	  	  
	  		  	
		  	  
	  		  	
		  	  
	  		  	
		  	  
	  		  	
		  	  
	  		  	

  

 74 

							
	 If to Owner:
	  	  
	  		  	
		  	  
	  		  	
		  	  
	  		  	
		  	  
	  		  	
		  	  
	  		  	
				
	 With copy to:
	  	  
	  		  	
		  	  
	  		  	
		  	  
	  		  	
		  	  
	  		  	
		  	  
	  		  	

 Any notice shall be deemed to have been given at the date and time of: (A) receipt or first refusal of
delivery, if sent via certified mail or delivered by hand; or (B) one day after posting if sent via overnight commercial delivery service. 
 B. Notwithstanding Section 16.A. above, Franchisor may provide Franchisee and/or Owner with routine information, the Standards, 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. 
 17. Successors and Assigns.

 This Agreement shall run to the benefit of and be binding upon the parties hereto and their approved successors and assigns. Franchisor
shall have the right to Transfer this Agreement to any person or legal entity without prior notice to, or consent of, Owner or Franchisee, provided the transferee assumes Franchisor’s obligations to Owner, and Franchisee under this Agreement.
Owner and Franchisee hereby acknowledge and agree that any such Transfer shall constitute a release and novation of Franchisor with respect to this Agreement. Except as may be provided above, this Agreement shall not be assigned by Owner or
Franchisee. 
 18. Governing Law. 
 This
Agreement is executed pursuant to, and shall be construed under and governed exclusively by, the laws of the State of Maryland, United States of America, which laws shall prevail in the event of any conflict of law. Nothing in this Section 18
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. 
 19. Ownership Structure. 
 A. If Owner 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), Owner represents that its equity is directly and (if applicable)
indirectly owned as shown on Attachment A hereto. 
 B. Owner represents and warrants to Franchisor that neither Owner (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 Owner nor any affiliate is directly 

  

 75 

 
or indirectly owned or controlled by the government of any country that is subject to an embargo by the United States government. Neither Owner nor any
affiliate is acting on behalf of a government of any country that is subject to such an embargo. Owner further represents and warrants that it is in compliance with any applicable anti-money laundering law, including, without limitation, the USA
Patriot Act. Owner 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 Section 19.B. incorrect. 
 20. Entire Agreement; Counterparts. 
 A. This
Agreement, including the attachments hereto, and the agreements executed simultaneously herewith, or pursuant to, or in connection with, this Agreement (including, without limitation, the Franchise Agreement), contain the entire agreement between
the parties hereto as it relates to the Hotel as of the date hereof. The Franchise Agreement is attached hereto as Attachment B; Owner hereby acknowledges that it has read and fully understands Attachment B as it applies hereunder. 
 B. 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. This is a fully integrated
agreement. No agreement of any kind relating to the matters covered by this Agreement shall be binding upon any 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. 
 21. Effects of Waivers. 
 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. 
 22. Cost of Enforcement. 
 If for any reason it
becomes necessary for Franchisor or Owner to initiate any legal or equitable action to secure or protect its rights under this Agreement, the prevailing party shall be entitled to recover all costs incurred by it in successfully enforcing said
rights, including reasonable attorneys’ fees. 
 23. Construction and Severability 
 A. Except as expressly provided to the contrary herein, each section, part, term and/or provision of this Agreement shall be considered severable; and if,
for any reason any section, part, term or provision herein is determined to be invalid and 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
sections, parts, terms or provisions shall be deemed not to be a part of this Agreement. 
  

 76 

 B. Nothing in this Agreement is intended, or 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 (and its affiliates), Franchisee or Owner and their respective permitted successors and assigns. 
 24. Captions. 
 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. 
 25. Owner Representations, Warranties and Covenants.

 Owner represents, warrants and covenants 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 their obligations under this Agreement, (iii) it has all necessary power and authority
to execute and deliver this Agreement, (iv) it has read and fully understands Section XV of the Franchise Agreement (attached hereto as Attachment B) as it applies hereunder and (v) during the term of the Franchise Agreement it will not
enter into an Operating Agreement for the management of the Hotel that does not comply with the provisions of the Franchise Agreement, unless otherwise approved by Franchisor. 
 26. Capitalized Terms. 
 Unless the context requires otherwise, capitalized terms not defined herein
shall have the meaning set forth in the Franchise Agreement. 
 27. Waiver of Jury Trial. 
 IN ANY LITIGATION BETWEEN THE PARTIES FOUNDED UPON OR ARISING FROM THIS AGREEMENT OR THE FRANCHISE AGREEMENT, THE PARTIES HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL, AND THE PARTIES HEREBY STIPULATE THAT ANY SUCH TRIAL SHALL OCCUR WITHOUT A JURY. 
  

 77 

 IN WITNESS WHEREOF, the parties have caused their duly authorized representatives to execute this Owner
Agreement, under seal, as of the date first above mentioned. 
  

							
		 	FRANCHISOR:	 	
		
		 	MARRIOTT INTERNATIONAL, INC.
	ATTEST:	 		 		 	
				
	  
	 	By:	 	  
	 	(SEAL)
	Assistant Secretary	 	Name:	 	  
	 	
		 	Title:	 	  
	 	
			
		 	FRANCHISEE:	 	
		 	  
	 	
		 	a/an	 	  
	 	
	ATTEST:	 		 		 	
				
	  
	 	By:	 	  
	 	(SEAL)
	Assistant Secretary	 	Name:	 	  
	 	
		 	Title:	 	  
	 	
			
		 	OWNER:	 	
		 	  
	 	
		 	a/an	 	  
	 	
	ATTEST:	 		 		 	
				
	  
	 	By:	 	  
	 	(SEAL)
	Assistant Secretary	 	Name:	 	  
	 	
		 	Title:	 	  
	 	

  

 78 

 ATTACHMENT A 
 Equity Interest(s) in Owner 
 (Name(s), address(es), and percentages of ownership) 
  

 79 

 ATTACHMENT B 
 FRANCHISE AGREEMENT 
  

 80 

 GUARANTY 
 This GUARANTY (“Guaranty”) is executed as of                     , 2007, by Apple Eight Hospitality,
Inc., a Virginia corporation (“Guarantor”), in favor of and for the benefit of Marriott International, Inc., a Delaware corporation (“Franchisor”). In consideration of and as an inducement to Courtyard by Marriott Relicensing
Franchisor to execute the Franchise Agreement dated as of                     , 2007 (as such agreement may be amended, supplemented, restated
or otherwise modified, the “Agreement”), by and between Franchisor and Apple Eight Hospitality Management, Inc. (“Franchisee”), Guarantor hereby agrees as follows: 
 1. Guarantor hereby unconditionally warrants to Franchisor and its successors and assigns that all of Franchisee’s representations and warranties in
(i) any application submitted by Franchisee to Franchisor in connection with the Agreement and (ii) the Agreement are true, accurate and complete as of the time made and as of the date hereof. Further, Guarantor unconditionally guarantees
that all of Franchisee’s obligations under the Agreement will be punctually paid and performed. 
 2. Upon default by Franchisee and
notice from Franchisor, Guarantor will immediately make each payment and perform each obligation required by Franchisee under the Agreement. Franchisor may extend, modify or release any indebtedness or obligation of Franchisee, or settle, adjust or
compromise any claims against Franchisee without notice to Guarantor and any such action shall not affect the obligations of Guarantor under this Guaranty. Guarantor hereby waives notice of any amendment, supplement, restatement or other
modification of Agreement and notice of demand for payment or performance by Franchisee. Guarantor’s guarantee hereunder shall extend to any extension or renewal of the Agreement. 
 3. Guarantor hereby agrees that the obligations of Guarantor under this Guaranty shall not be reduced, limited, terminated, discharged, impaired or
otherwise affected by: (i) Franchisee’s failure to pay a fee or provide other consideration to Guarantor in consideration for the issuance of this Guaranty; (ii) the occurrence or continuance of a default under the Agreement;
(iii) any assignment of the Agreement; (iv) any modification or amendment of, or waiver or consent or other action taken with respect to, the Agreement or any other agreement or document delivered in connection therewith, including without
limitation any indulgence in or extension of time for the payment of any amounts payable of Franchisee under or in connection with the Agreement or for the performance of any other obligation of Franchisee under the Agreement (any of which
modifications, amendments, waivers or consents may be agreed to or granted without the approval or consent of Guarantor); (v) the voluntary or involuntary liquidation, sale or other disposition of all or any portion of Franchisee’s assets,
or the receivership, insolvency, bankruptcy, reorganization or similar proceedings affecting Franchisee or its assets or the release or discharge of Franchisee from any of its obligations under the Agreement; or (vi) any change of
circumstances, whether or not foreseeable, and whether or not any such change does or might vary the risk of Guarantor hereunder. No failure of Franchisor to exercise any power or right hereunder, or to insist upon compliance by Guarantor with any
term hereof shall constitute a waiver of Franchisor’s right thereafter to demand full compliance with any term herein. 
 4. This
Guaranty constitutes a guaranty of payment and performance and not of collection, and Guarantor specifically waives any obligation of Franchisor to proceed against Franchisee on any money or property held by Franchisee or by any other person or
entity as collateral security, by way of set-off or otherwise or against any other guarantor. Guarantor further agrees that this Guaranty shall continue to be effective or be reinstated as the case may be, if at any time payment of any of the
guaranteed obligations is rescinded or must otherwise be restored or returned by Franchisor upon the insolvency, bankruptcy or reorganization of Franchisee or Guarantor, all as though such payment has not been made. 

 5. Except as otherwise expressly set forth herein, all notices, requests, demands, statements and other
communications required or permitted to be given hereunder shall be in writing and shall be delivered by nationally recognized overnight courier service to Franchisor at the address set forth in the Agreement and to Guarantor at the address set
forth below or for either at such other address as may be designated by Guarantor or by Franchisor, and such communication shall be effective three days after the day sent. This Guaranty may be amended only by a written instrument signed by a duly
authorized representative of each of Guarantor and Franchisor. 
 6. Guarantor hereby unconditionally and irrevocably waives notice of
acceptance of this Guaranty, presentment, demand, diligence, protest and notice of dishonor or of any other kind to which Guarantor otherwise might be entitled under applicable law. 
 7. Guarantor agrees to pay Franchisor all expenses, including reasonable attorneys’ fees and court costs, incurred by Franchisor, its subsidiaries,
affiliates, or any of their respective successors and assigns, to remedy any defaults of or enforce any rights under this Guaranty or the Agreement, effect termination of this Guaranty or the Agreement, or to collect any amounts due under this
Guaranty or the Agreement. 
 8. If more than one person or entity has executed this Guaranty as a Guarantor hereunder, the liability of each
such Guarantor shall be joint, several and primary. This Guaranty may be executed in any number of counterparts, each of which shall be deemed an original, but all of which, when taken together, shall constitute one and the same instrument. Delivery
of an executed signature page to this Guaranty by facsimile transmission shall be effective as delivery of a manually signed counterpart of this Guaranty. 
 9. Upon the death of any individual Guarantor, the estate of such Guarantor will be bound by this Guaranty but only for defaults and obligations hereunder existing at the time of death, and the obligations of any
other Guarantors will continue in full force and effect. 
 10. Guarantor represents and warrants to Franchisor that neither Guarantor
(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 (as defined in the Agreement). Neither Guarantor nor any
affiliate of Guarantor 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 Guarantor nor any affiliate of Guarantor is acting on behalf of a government
of any country that is subject to such an embargo. Guarantor 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 Section 10
incorrect. 
 11. This Guaranty is executed pursuant to, and shall be construed under and governed by, the laws of the State of Maryland,
without regard to its conflict of laws provisions. Guarantor hereby 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 Guaranty; and so far as is permitted under applicable law, this consent to personal jurisdiction shall be self-operative. 
 12. A. In the event that Guarantor’s Net Worth (as defined below) is less than $30,000,000, as adjusted on January 1 of each year for changes in the Consumer Price Index for All Urban Consumers (CPI-U) for
the U.S. City Average for All Items, 1982-84=100 published by the Bureau of Labor Statistics of the United States Department of Labor or, if such index is not at such time so prepared and published, any comparable index then prepared and published
by an agency of the 

  

 2 

 
government of the United States reasonably selected by Franchisor (the “Minimum Net Worth”), then, from and after such date, all references in this
Guaranty to “Guarantor” shall automatically and without any action of any person or entity be deemed to refer to Guarantor and Apple REIT Eight, Inc. (or, if there is a merger, consolidation, transfer of assets and/or stock, or other
reorganization after the date hereof, the entity that succeeds to all or substantially all of the assets of Apple REIT Eight, Inc. in such transaction) (“Successor Guarantor”) and Successor Guarantor shall be bound by the provisions of
this Guaranty to the same extent as Guarantor. Successor Guarantor shall, if requested by Franchisor, execute and deliver to Franchisor a Guaranty substantially identical to this Guaranty; provided that the failure of Successor Guarantor to execute
and deliver such Guaranty shall not affect the validity and enforceability of this Guaranty against Successor Guarantor. Upon the request of Franchisor from time to time, Guarantor shall, at its sole cost and expense, provide to Franchisor a written
certification from the chief financial officer, comptroller or equivalent officer or employee of Guarantor, certifying in reasonable detail and providing supporting documentation as would be necessary to allow Franchisor to verify the results of
such certification, that, as of such date, Guarantor’s Net Worth is at a level equal to or exceeding the Minimum Net Worth. If the certification and supporting documentation described above is not provided to Franchisor within thirty
(30) days after a request is made therefor and Franchisor has notified Guarantor in such request that Guarantor’s failure to provide such information within such 30-day period will result in Successor Guarantor being deemed a
“Guarantor” hereunder, all references in this Guaranty to “Guarantor” shall automatically and without any action of any person or entity be deemed to refer to Guarantor and Successor Guarantor. 
 B. For purposes of this Guaranty, “Net Worth” shall mean the Net Income from Guarantor’s operations (in the twelve (12) months
immediately preceding such calculation) after fixed charges but before Interest Expense, Income Taxes and Depreciation and Amortization, divided by .10, plus (ii) current assets, minus (iii) total liabilities, all in accordance with United
States generally accepted accounting principles, consistently applied. Calculations of Net Worth shall use Revenue and Costs and Expenses determined in accordance with the Uniform System (as defined in the Agreement). For the purposes of the
foregoing calculation, “fixed charges” shall include, without limitation, insurance costs and expenses required pursuant to any and all applicable franchise agreements and management agreements, reasonable fees paid to any third party
managers for managing Guarantor’s hotel properties, the amount of any transfers into any reserve required pursuant to any applicable franchise agreements and management agreements and such other costs and expenses incurred by Guarantor or are
otherwise reasonably necessary for the proper and efficient operation of its hotel properties. Costs and Expenses shall not include debt service payments. 
 13. IN ANY LITIGATION BETWEEN FRANCHISOR AND GUARANTOR FOUNDED UPON OR ARISING FROM THIS GUARANTY OR THE FRANCHISE AGREEMENT, GUARANTOR HEREBY WAIVES ITS RIGHT TO A JURY TRIAL, AND GUARANTOR HEREBY STIPULATES THAT ANY
SUCH TRIAL SHALL OCCUR WITHOUT A JURY. 
  

 3 

 IN WITNESS WHEREOF, the undersigned has executed this Guaranty, under seal, as of the date first above
written. 
  

					
	GUARANTOR:	 	
		
	APPLE EIGHT HOSPITALITY, INC.	 	
			
	By:	 	  
	 	(SEAL)
	Name:	 		 	
	Title:	 		 	

 ADDRESS FOR NOTICES TO GUARANTOR: 
 c/o Apple REIT Companies 
 814 East Main Street 
 Richmond, VA 23219 
 Acknowledged and agreed with respect to Section 12 of this Guaranty: 
  

					
	APPLE REIT EIGHT, INC.	 	
			
	By:	 	  
	 	(SEAL)
	Name:	 		 	
	Title:	 		 	

  

 4 

 MANAGER ACKNOWLEDGMENT 
 This Manager Acknowledgment (“Manager Acknowledgment”) is executed as of
                    , 2007, by and among Newport Chester, LLC, a Virginia limited liability company (“Manager”), Apple Eight
Hospitality Management, Inc., a Virginia corporation (“Franchisee”), and Marriott International, Inc., a Delaware corporation (“Franchisor”). 
 WHEREAS, Manager has entered into an agreement (“Management Agreement”) with Franchisee, pursuant to which Manager will operate that certain Courtyard by Marriott hotel located at 250 Davidson Avenue,
Somerset, NJ 08873 (the “Hotel”), in accordance with the terms and conditions of that certain Courtyard by Marriott Hotel Franchise Agreement dated
                    , 2007 (as such agreement may be amended, supplemented, restated or otherwise modified, the “Franchise
Agreement”) between Franchisor and Franchisee; and 
 WHEREAS, Franchisee has requested that Franchisor approve Manager to operate the
Hotel in accordance with the Franchise Agreement. 
 NOW, THEREFORE, in consideration of the mutual undertakings and benefits to be derived
herefrom, the receipt and sufficiency of which are acknowledged by each of the parties hereto, it is hereby agreed as follows: 
 1.
Franchisor’s Consent. Franchisor hereby consents to the operation of the Hotel by Manager during the term of the Franchise Agreement on behalf of and subject to the control of Franchisee with respect to and in accordance with the terms
and conditions of the Franchise Agreement, subject to and upon the terms and conditions set forth below. Franchisor’s consent granted in the immediately preceding sentence shall terminate contemporaneously with any termination of the Franchise
Agreement without notice to Manager; provided that the duties and obligations of Manager that by their nature or express language survive such termination, including, without limitation, Sections 3.b. and c. below, shall continue in full force and
effect notwithstanding the termination of the Franchise Agreement. 
 2. Manager Representations and Covenants. Manager represents and
warrants to Franchisor that: 
 a. Manager is not in control of or controlled by persons who have been convicted of any felony or a crime
involving moral turpitude, or been convicted of any other crime or offense or committed any acts, or engaged in any conduct that is reasonably likely to have an adverse effect on the System, the Proprietary Marks, the goodwill associated therewith,
or Franchisor’s interests therein; 
 b. neither Manager nor any affiliate of Manager is a Competitor; 
 c. the Management Agreement is valid, binding and enforceable; contains no terms, conditions, or provisions that are, or through any act or omission of
Franchisee or Manager, may be or may cause a breach of or default under the Franchise Agreement; and is for a term of not less than ten (10) years; and 
 d. neither Manager nor any affiliate of Manager is a person or entity with whom United States persons are prohibited from transacting business. 

 3. Manager and Franchisee Acknowledgements. Manager and Franchisee covenant and agree to the
following: 
 a. Manager shall have the exclusive authority and responsibility for the management of the Hotel on behalf of and subject to the
control of Franchisee with respect to and in accordance with the terms and conditions of the Franchise Agreement. The general manager of the Hotel shall devote his or her full time and attention to the management and operation of the Hotel and shall
have successfully completed Franchisor’s management training program as required under the Franchise Agreement; 
 b. The Hotel will be
operated in strict compliance with the requirements of the Franchise Agreement, and Manager will observe fully and be bound by all terms, conditions and restrictions regarding the management and operation of the Hotel set forth in the Franchise
Agreement, including those related to Confidential Information and the Proprietary Marks, as if and as though Manager had executed the Franchise Agreement as “Franchisee,” provided that Manager obtains no rights under the terms of the
Franchise Agreement except as specifically set forth herein. Manager shall comply with all applicable laws, rules, and regulations, and shall obtain in a timely manner all permits, certificates, and licenses necessary for the full and proper
operation of the Hotel; 
 c. Franchisor may enforce directly against Manager all terms and conditions in the Franchise Agreement regarding
Intellectual Property during and subsequent to Manager’s tenure as operator of the Hotel; 
 d. Any default under the terms and
conditions of the Franchise Agreement caused wholly or partially by Manager shall constitute a default under the terms and conditions of the Management Agreement, for which Franchisee shall have the right to terminate the Management Agreement;

 e. Franchisee and Manager shall not modify or amend the Management Agreement in such a way as to create a conflict or other inconsistency
with the terms and conditions of the Franchise Agreement or this Manager Acknowledgment; 
 f. Except in extraordinary circumstances, such as
theft or fraud on the part of Manager or a default by Franchisee under the Franchise Agreement caused by Manager for which Franchisee needs to promptly remove Manager from the Hotel, the Management Agreement shall not be terminated or permitted to
expire without at least thirty (30) days’ prior written notice to Franchisor; and 
 g. Franchisor shall have the right to
communicate directly with Manager and the managers at the Hotel regarding day-to-day operations of the Hotel and such communications shall be deemed made to Franchisee because Manager and the managers at the Hotel are acting on behalf of Franchisee
and Manager as their agents and Franchisor shall have the right to rely on the instructions of such managers as to matters relating to the operation and promotion of the Hotel. 
 4. Existence and Power. Manager and Franchisee each represents and warrants with respect to itself 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 has the ability to perform its obligations under this Manager Acknowledgment and under the Management Agreement, and (iii) it has all
necessary power and authority to execute and deliver this Manager Acknowledgment. 
  

 2 

 5. Authorization; Contravention. 
 a. Manager and Franchisee each represents and warrants with respect to itself that the execution and delivery of this Manager Acknowledgment and the
performance by Manager and Franchisee of its respective obligations hereunder and under the Management Agreement: (i) have been duly authorized by all necessary action; (ii) do not require the consent 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 regulation of any governmental body or any decision, ruling, order, or award by which each may be bound or affected, or (c) any agreement, indenture or other instrument to which
each is a party; and 
 b. Manager represents and warrants to Franchisor that neither Manager (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 (as defined in the Franchise Agreement). Neither Manager nor any affiliate of Manager 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 Manager nor any affiliate of Manager is acting on behalf of a government of any country that is subject to such an
embargo. Manager further represents and warrants that it is in compliance with any applicable anti-money laundering law, including, without limitation, the USA Patriot Act. Manager 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 Section 5.b. incorrect. 
 6.
Controlling Agreement. If there are conflicts between any provision(s) of the Franchise Agreement and this Manager Acknowledgment on the one hand and the Management Agreement on the other hand, the provision(s) of the Franchise Agreement and
this Manager Acknowledgment shall control. 
 7. No Release. This Manager Acknowledgment shall not release or discharge Franchisee
from any liability or obligation under the Franchise Agreement, and Franchisee shall remain liable and responsible for the full performance and observance of all of the provisions, covenants, and conditions set forth in the Franchise Agreement.

 8. Limited Consent. Franchisor’s consent to Manager operating the Hotel is personal to Manager, and this Manager
Acknowledgment is not assignable by Franchisee or Manager. If there is a change in control of Manager or if Manager becomes, is acquired by, comes under the control of, or merges with or into a Competitor, or if there is a material adverse change to
the financial status or operational capacity of Manager, Franchisee shall promptly notify Franchisor of any such change and Manager shall be subject to approval under the Franchise Agreement as a new operator of the Hotel. 
 9. Defined Terms. Unless specifically defined herein, all capitalized terms used in this Manager Acknowledgment shall have the same meanings set
forth in the Franchise Agreement. 
 10. Counterparts. This Manager Acknowledgment may be executed in any number of counterparts, each
of which shall be deemed an original, but all of which, when taken together, shall constitute one and the same instrument. Delivery of an executed signature page to this Manager Acknowledgment by facsimile transmission shall be effective as delivery
of a manually signed counterpart of this Manager Acknowledgment. 
 11. Governing Law. This Manager Acknowledgment shall be construed
in accordance with the laws of the State of Maryland without regard to the conflict of laws principles thereof, and contains 

  

 3 

 
the entire agreement of the parties hereto. Manager hereby 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 Manager Acknowledgment; and so far as is permitted under applicable law, this consent to personal jurisdiction shall be self-operative.

 12. Manager’s Address. Manager’s mailing address is 4290 New Town Avenue, Williamsburg, VA 23188. Manager agrees to
provide written notice to both Franchisee and Franchisor if there is any change in Manager’s mailing address. 
 13. IN ANY LITIGATION
BETWEEN THE PARTIES FOUNDED UPON OR ARISING FROM THIS MANAGER ACKNOWLEDGMENT OR THE FRANCHISE AGREEMENT, THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL, AND THE PARTIES HEREBY STIPULATE THAT ANY SUCH TRIAL SHALL OCCUR WITHOUT A
JURY. 
 IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Manager Acknowledgment, under seal, as of the date
first above written. 
  

							
	 	 	FRANCHISOR:	 	 
			
	ATTEST:	 	MARRIOTT INTERNATIONAL, INC.	 	
				
	  
	 	By:	 	  
	 	(SEAL)
	Assistant Secretary	 	Name:	 		 	
		 	Title:	 		 	
			
		 	FRANCHISEE:	 	
			
	ATTEST:	 	APPLE EIGHT HOSPITALITY MANAGEMENT, INC.	 	
				
	  
	 	By:	 	  
	 	(SEAL)
	(Assistant) Secretary	 	Name:	 		 	
		 	Title:	 		 	
			
		 	MANAGER:	 	
			
	WITNESS:	 	NEWPORT CHESTER, LLC	 	
				
	  
	 	By:	 	  
	 	(SEAL)
	Witness	 	Name:	 		 	
		 	Title:	 		 	

  

 4 

 ELECTRONIC SYSTEMS LICENSE AGREEMENT 
 This Electronic Systems License Agreement (this “License Agreement”) is made and entered into effective as of the
     day of             , 2007 (“Effective Date”), between Marriott International, Inc., a Delaware corporation (“Franchisor”), and
Apple Eight Hospitality Management, Inc., a Virginia corporation (“Franchisee”). 
 WITNESSETH: 
 WHEREAS, Franchisor and Franchisee have entered into a Franchise Agreement dated as of the date hereof (the “Franchise Agreement”) pursuant to
which Franchisee will establish and operate the Hotel under Franchisor’s System at the location specified in the Franchise Agreement; and 
 WHEREAS, pursuant to the terms of the Franchise Agreement, Franchisee is required to use certain Electronic Systems in connection with, and as a condition of operating the Hotel, and Franchisor desires to make available to Franchisee such
Electronic Systems pursuant to the terms and conditions of this License Agreement. 
 NOW, THEREFORE, in consideration of the premises and
the undertakings and commitments of each party to the other party set forth herein, the parties agree as follows: 
 1. Defined Terms.
Capitalized terms not defined in this License Agreement shall have the meaning given to them in the Franchise Agreement. 
 2. License
Grant. Subject to the terms and conditions of this License Agreement, Franchisor hereby grants to Franchisee a nonexclusive, non-transferable right and license to use the Electronic Systems made available by Franchisor. For each Electronic
System, the license will commence on the installation date thereof, and shall extend until termination of this License Agreement or such time as Franchisor ceases to make such Electronic System available in accordance with Franchisor’s
operation of the System. 
 3. Ownership; Use Restrictions. All Electronic Systems shall at all times remain the sole property of
Franchisor or any third-party vendors, as applicable. Franchisee shall at all times treat the Electronic Systems as confidential. Franchisee shall not at any time, without Franchisor’s or such third party’s prior written consent (which may
be withheld in Franchisor’s or such third party’s sole discretion), copy, modify, reverse engineer, or otherwise duplicate the Electronic Systems or any component thereof, in whole or in part, or otherwise make the same available to any
third party. Franchisee will use the Electronic Systems for the exclusive purpose of operating the Hotel in accordance with the Franchise Agreement. Franchisee will take reasonable measures to ensure that only authorized employees of Franchisee at
the Hotel have access to the Electronic Systems, and only for permitted purposes hereunder. Such measures shall be subject to review and inspection by Franchisor. Franchisee will not attempt to modify, delete or circumvent any measures used by
Franchisor to safeguard the Electronic Systems and the Intellectual Property therein. Franchisor reserves the right to suspend Franchisee’s access to any Electronic System in order to protect Franchisor’s Intellectual Property or other
systems, data or property of Franchisor or its vendors. 
 4. Third Party Vendors; Preferred Vendors. If any Electronic System is
provided by a third party vendor, Franchisee will comply with the terms and conditions provided by such vendors in connection therewith. Franchisee acknowledges and agrees that such third party vendors shall have the right to enforce such terms and
conditions directly against Franchisee, and Franchisor shall have no 

 
liability in connection with Franchisee’s use of any third party Electronic System. Franchisor may also require Franchisee to execute license or similar
agreements directly with such third party vendors in order to obtain access to Electronic Systems that are required under Franchisor’s System. Franchisee shall be deemed to be in direct privity of contract with any third party provider of
Electronic Systems. From time to time Franchisor may designate a third party vendor of Electronic Systems as a “preferred vendor” based on Franchisor’s reasonable judgment that such third party Electronic System is suitable or
desirable for Franchisor’s System. Franchisee acknowledges and agrees that Franchisor neither endorses nor makes any representations or warranties in connection with any third party’s Electronic Systems, including any Electronic System
provided by a preferred vendor. 
 5. Support Services. Franchisor will use commercially reasonable efforts to maintain and support
the Electronic Systems (the “Services”) during the term of this License Agreement either by itself or through third party vendors as deemed appropriate by Franchisor. 
 6. Term and Termination. This License Agreement shall commence on the Effective Date and remain in force until termination of the Franchise
Agreement. 
 7. DISCLAIMERS. FRANCHISEE ACKNOWLEDGES AND AGREES THAT, EXCEPT AS EXPRESSLY SET FORTH IN THIS LICENSE
AGREEMENT, FRANCHISOR PROVIDES THE ELECTRONIC SYSTEMS AND ANY ASSOCIATED SERVICES ON AN AS-IS BASIS, AND FRANCHISOR DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, CUSTOM OR USAGE IN THE TRADE, IN CONNECTION WITH FRANCHISEE’S USE OF THE ELECTRONIC SYSTEMS AND THE PROVISION OF THE SERVICES UNDER THIS LICENSE AGREEMENT. 
 8. Limitation on Liability. Franchisor shall not be liable for any damage arising out of or in connection with the use or failure of any
Electronic Systems or Services, including, but not limited to, corruption of data, and Franchisee hereby waives any right to or claim of any exemplary, incidental, indirect, special, consequential, or other similar damages (including without
limitation, loss of profits) in connection with the use or failure of Electronic Systems or Service, even if Franchisor has been advised of the possibility of same. Franchisor shall use reasonable efforts, to the extent legally permissible, to pass
through to Franchisee any warranties or other similar protections provided to Franchisor by Franchisor’s vendors with respect to Electronic Systems. 
 9. Indemnification. Franchisee agrees to indemnify, defend and hold harmless Franchisor and its respective officers, directors, employees, agents, successors, and assigns, from any losses, fines, liabilities,
damages and claims, and all related costs and expenses, including reasonable legal fees, disbursements and costs of investigation, litigation, settlement, judgment, interest and penalties (collectively, “Losses”) incurred by Franchisor in
connection with Franchisee’s use of the Electronic Systems or any failure by Franchisee to comply with the terms of this License Agreement. Such indemnification and hold harmless obligations shall be subject to and incorporated into Section
XXI.E. of the Franchise Agreement. 
 10. Software License Rights Upon Termination. Franchisee acknowledges and agrees that most
Software purchased by Franchisees through Franchisor’s procurement process is purchased in Franchisor’s name, and is not assignable to Franchisee upon termination of this License Agreement (“Non-Assignable Software”). As such,
upon termination of this License Agreement, Franchisee’s right to use such Non-Assignable Software shall automatically cease. With respect to software purchased through Franchisor’s procurement process that is assignable to Franchisee upon
termination of this 

  

 2 

 
License Agreement (“Assignable Software”), upon the request of Franchisee, Franchisor will provide reasonable assistance in helping to facilitate
assignment of such software, including obtaining consent of the vendor where necessary. Upon termination of this License Agreement, Franchisee shall delete both Assignable Software and Non-Assignable Software obtained through Franchisor’s
procurement process and, with respect to Assignable Software, Franchisee may reinstall such software on the applicable computing equipment using software copies obtained by Franchisee directly from the applicable vendor. 
 11. Miscellaneous. All notices and other communications hereunder shall be in writing and shall be delivered in accordance with the terms of the
Franchise Agreement. This License Agreement may not be modified or amended except by an agreement in writing signed by the parties hereto. Waiver of any provision hereof in one or more instances shall not preclude enforcement thereof on future
occasions. This License Agreement may not be assigned by Franchisee to any third party, except in connection with an assignment of the Franchise Agreement as expressly permitted therein. This License Agreement and the legal relations between the
parties hereto shall be governed by and construed in accordance with the laws of the jurisdiction set forth in the Franchise Agreement. This License Agreement constitutes the entire agreement among the parties hereto with respect to the subject
matter hereof, and supersedes all other communications, whether written or oral. 
 IN WITNESS WHEREOF, the parties hereto have caused this
License Agreement to be duly executed and delivered, under seal, as of the date first above written. 
  

							
		 	FRANCHISOR:	 	
			
	ATTEST:	 	MARRIOTT INTERNATIONAL, INC.	 	
				
	  
	 	By:	 	  
	 	(SEAL)
	Assistant Secretary	 	Name:	 		 	
		 	Title:	 		 	
			
		 	FRANCHISEE:	 	
			
	ATTEST:	 	APPLE EIGHT HOSPITALITY MANAGEMENT, INC.	 	
				
	  
	 	By:	 	  
	 	(SEAL)
	(Assistant) Secretary	 	Name:	 		 	
		 	Title:	 		 	

  

 3 

 OWNER AGREEMENT 
 This AGREEMENT (“Agreement”) is entered into as of the      day of
                    , 2007, by and among Marriott International, Inc., a Delaware corporation (“Franchisor”), Apple Eight
Hospitality Management, Inc., a Virginia corporation (“Franchisee”), and Apple Eight Hospitality Ownership, Inc., a Virginia corporation (“Owner”). 
 WITNESSETH: 
 WHEREAS, Franchisor and Franchisee are parties to that certain Franchise Agreement dated as of
                    , 2007 (as may be amended from time to time, the “Franchise Agreement”) relating to the Hotel (as defined in the
Franchise Agreement); and 
 WHEREAS, Owner represents and warrants that it holds fee title to the Hotel (except for the Land) and a
leasehold interest in the Land; and 
 WHEREAS, Owner and Franchisee have entered into a lease agreement, management agreement or operating
agreement (the “Operating Agreement”) whereby Franchisee will lease the Hotel and sublease the Land from Owner and will operate the Hotel; and 
 WHEREAS, Owner, Franchisee and Franchisor desire that the Hotel be operated as a Courtyard by Marriott Hotel pursuant to the terms and conditions of the Franchise Agreement and this Agreement. 
 NOW, THEREFORE, the parties, in consideration of the premises and the undertakings and commitments of each party set forth herein, agree as follows:

 1. [Intentionally Omitted] 
 2. Termination of the
Franchise Agreement. 
 Franchisor shall have the right to terminate this Agreement immediately upon termination of the Franchise
Agreement by delivering written notice to Owner. 
 3. Termination of the Operating Agreement. 
 Owner shall notify Franchisor immediately of any pending or actual termination or expiration of the Operating Agreement that is to occur or occurred prior
to expiration of the Franchise Agreement, and Franchisor shall have the right to terminate this Agreement and the Franchise Agreement in connection with any such expiration or termination. If there is a dispute between Owner and Franchisee relating
to the termination of the Operating Agreement, Franchisor shall have the right to permit Franchisee to operate the Hotel pursuant to the Franchise Agreement so long as Franchisee has possession of the Hotel, and all of Franchisor’s rights under
this Agreement shall be reserved pending resolution of such dispute whether by final court or administrative order or negotiated settlement. 
 4.
Transfers Not Involving Competitors. 
 Section XV of the Franchise Agreement shall apply hereunder to any Transfer of the Hotel, any
ownership interest in the Hotel, this Agreement or the Operating Agreement, or of a direct or indirect ownership interest in Owner (including any controlling (greater than 15%) interest in any entity that 

 
controls Owner, but excluding interests of limited partners, if any) as if Owner were a party thereto; any such Transfer(s) by Owner as described above shall
be made only in strict compliance with said Section XV as the context requires. 
 5. Transfers Involving a Competitor and Right of First Refusal.

 A. No Transfers to a Competitor. If there is a proposed Transfer to a Competitor of the Hotel, any ownership interest in the Hotel,
Owner’s ownership interest in this Agreement or in the Operating Agreement, or an ownership interest in either Owner or an affiliate of Owner, and Owner or such affiliate of Owner (or such Competitor, as the case may be) wishes to accept such
proposed Transfer, Owner shall give written notice thereof to Franchisor, stating the name and full identity of the prospective purchaser or tenant, as the case may be, including the names and addresses of the owners or holders of any ownership
interest 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
Owner; provided that Owner shall have no obligations under this sentence with respect to the sale of one hundred percent (100%) of the ownership interests or assets of an affiliate of Owner that (i) is not a direct or indirect subsidiary
or parent company of Owner and (ii) has no interest (direct or indirect) in Owner, Franchisee, the Hotel or any other Marriott brand hotel. Within thirty (30) days after receipt by Franchisor of such notice from Owner, Franchisor, in its
sole discretion, shall elect by notice to Owner one of the immediately following four alternatives: 
 (1) Acquisition of Control of Hotel
for Cash. 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 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, Owner 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) Acquisition of Owner/Acquisition of Control of Hotel. If the proposed Transfer is a
purchase or lease of all or a portion of the ownership interests or the assets (which includes the Hotel) of Owner or an affiliate of Owner, or a merger with or into Owner or an affiliate of Owner, or the acquisition of Owner’s ownership
interest in this Agreement or in the Operating 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 at the purchase
or lease price pursuant to terms 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 purchase or
lease price and terms within fifteen (15) days of Franchisor’s election, the purchase or lease price of the Hotel shall be determined as follows. Franchisor and Owner each shall, at its own expense and within thirty (30) days
thereafter, obtain an appraisal of the fair market value of the Hotel from a nationally recognized appraiser of Hotel properties comparable to such 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 

  

 2 

 
with the AAA Rules. If the parties do not agree on an 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 Owner 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 Arbitrator’s 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, to
either (a) purchase the Hotel premises and related property at the valuation determined by the Arbitrator, or (b) terminate this Agreement pursuant to clause (3) below. 
 (3) Termination of Franchise Agreement. To place Owner and Franchisee in default and to terminate this Agreement and the Franchise Agreement, in
which event Owner and Franchisee shall be obligated, jointly and severally, to pay Franchisor the applicable liquidated damages as set forth in Section XVIII.E of the Franchise Agreement. 
 (4) Consent. To consent to such Transfer, which consent shall be on such terms and conditions as Franchisor may require, in its sole discretion.

 This Section 5.A shall survive termination of this Agreement if, prior to such termination, any event specified in Section 5 occurs, as a result
of which Franchisor has exercised (or has the right to exercise) the right of first refusal provided herein. 
 B. Affiliates.
Notwithstanding anything to the contrary set forth in Section 5.A, if a Competitor proposes to acquire all of the ownership interests of an affiliate of Owner and the affiliate does not directly or indirectly own, lease or operate any hotels
operating under a trade name or trademark owned by Franchisor or any of its affiliates, 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 Section 5.A. 
 C. Foreclosure. If the Transfer to a Competitor is by foreclosure, judicial or
legal process, such as execution and levy, or by any other means, Franchisor (or its designee) shall have the right to purchase the Hotel upon written notice to Owner. If the parties are unable to agree as to a purchase price and terms within thirty
(30) 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 Section 5.A(2) above. This provision shall survive the
termination of this Agreement and the termination of the Franchise Agreement under Paragraph XVII.A thereof in connection with the Competitor’s actions under Paragraph XV.E. of the Franchise Agreement or this Section 5.C. 
 D. Owner Becomes a Competitor. If Owner or any of its affiliates becomes a Competitor, Owner shall so notify Franchisor providing the data
required pursuant to Section 5.A., or if Franchisor 

  

 3 

 
otherwise determines that Owner or any of its affiliates has become a Competitor, Franchisor shall so notify Owner and assert that Franchisor has the rights
set forth above at Section 5.A. Provided Franchisor has received sufficient pricing and other data to allow an informed decision, Franchisor shall make its election thereunder within thirty (30) days of Franchisor’s receipt of such
notice from Owner or within thirty days of Franchisor’s giving notice to Owner in which Franchisor asserts that Owner or any of its affiliates has become a Competitor. 
 E. Right of First Refusal. In addition to the events specified in Section 5.A, Franchisor shall have the rights set forth at
Section 5.A. if any event occurs granting Franchisor a right of first refusal under Section XV of the Franchise Agreement. 
 F. Real
Estate Rights. Owner acknowledges that Franchisor’s rights under this Section 5 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 Owner shall cooperate as requested by Franchisor in such filing. Such recording shall indicate that Franchisor’s rights in real estate under Section 5 of this Agreement shall be subordinate
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 Section 7
hereof. Owner acknowledges and agrees that damages are not an adequate remedy in the event that Owner breaches its obligations under this Section 5, and Franchisor shall be entitled to injunctive relief to prevent or remedy such breach.

 G. Survival of Right of First Refusal. Except for termination of this Agreement pursuant to Section 5.A.(3) above, Owner
agrees that Franchisor’s rights under Section 5 shall survive early termination of this Agreement (as opposed to expiration of this Agreement as set forth in Section 12 hereof) and shall bind Owner, and its affiliates, if: 

(i) prior to or within six (6) months after termination of this Agreement, a Competitor offers (or receives an offer from Owner or an affiliate of
Owner) to purchase or lease the Hotel or to purchase an ownership interest in Owner or an affiliate of Owner, or merge with or into either Owner or such affiliate; and 
 (ii) A. the Franchise Agreement is terminated pursuant to Paragraphs XVII.A., XVII.B.1. or 4. thereof, or pursuant to Paragraph XVII.C. thereof, or
pursuant to Paragraph XVII.D. thereof based upon a violation of Section X.B thereof; or 
 B. the Franchise Agreement is terminated pursuant
to Paragraph XVII.A. thereof and an affiliate, principal or director of Owner 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. of the Franchise Agreement. 
 In addition, Franchisor’s rights under Section 5 shall survive any purported early
termination of this Agreement (as opposed to expiration of this Agreement as set forth in Section 12 hereof) by Owner, and shall bind Owner and its affiliates, if, prior to or within six (6) months after such purported termination, a
Competitor offers (or receives an offer from Owner or an affiliate of Owner) to purchase or lease the Hotel, or to purchase an ownership interest in Owner or an affiliate of Owner, or merge with or into either Owner or such affiliate. 
 6. [Intentionally Omitted] 
  

 4 

 7. Financing of the Hotel. 
 Owner 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 Owner or Franchisee (whether such
indebtedness is incurred (i) individually on behalf of the Hotel or (ii) on a 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. The chief financial officer of Owner (or other officer performing the equivalent function) shall certify in writing to Franchisor that Owner has complied with the provisions of this Section 7 at the time that
Owner shall incur or replace any indebtedness that is secured by a lien on or mortgage of the Hotel or pledge of ownership interests in Owner. Owner shall give prompt written notice to Franchisor of the component hotels and legal entities in a
Financed Pool prior to incurring such indebtedness. 
 8. Operation of the Hotel. 
 The Hotel shall be operated as a Courtyard by Marriott Hotel for the term hereof, and Owner shall cause Franchisee to operate the Hotel in accordance with
the terms of the Franchise Agreement. Failure of the Owner to cause the Hotel to be so operated shall be a material default by Owner hereunder giving Franchisor the right to terminate this Agreement and the Franchise Agreement. 
 9. Owner’s Obligations under the Franchise Agreement. 
 A. Franchisee Default. If Franchisor declares Franchisee to be in default under the Franchise Agreement, Franchisor may enforce the Franchise Agreement directly against Owner as if Owner were the Franchisee under the Franchise
Agreement, and Owner and shall perform, or cause to be performed, the provisions of the Franchise Agreement including, without limitation, Section III on fees, Section VI on operation of the Hotel, Section XIV on insurance and Section XXI on
indemnification. 
 B. Termination of Franchise Agreement. If the Franchise Agreement is terminated and Franchisee fails to perform
any post-termination obligation under the Franchise Agreement, Franchisor may enforce the Franchise Agreement directly against Owner as if Owner were the Franchisee under the Franchise Agreement, and Owner shall perform, or cause to be performed,
all post-termination obligations of Franchisee under the Franchise Agreement, including, without limitation, Section XVIII on liquidated damages and on de-identifying the Hotel as part of the System and cessation of the use of the System and
Proprietary Marks, and Section XXI on indemnification. 
 10. Provisions of the Operating Agreement. 
 The Operating Agreement shall include the substance of the immediately following provisions. 
  

 5 

 (i) Franchisee shall have exclusive possession of the Hotel and exclusive control of the day-to-day
operations of the Hotel, subject to a management agreement that complies with the provisions of this Agreement. 
 (ii) The Hotel will be
operated in full compliance with the provisions of the Franchise Agreement. The Franchise Agreement shall control in case of conflict with the Operating Agreement. 
 (iii) The provisions in the Operating Agreement that reflect this Section 10 and any other provisions in the Operating Agreement affecting or for the benefit of Franchisor, shall not be amended or modified
without Franchisor’s prior written consent. 
 11. Surrender by Franchisee. 
 Upon the occurrence of the events described herein for the replacement of Franchisee as possessor and operator of the Hotel, Franchisee shall surrender
its rights and interest in the Franchise Agreement to Franchisor and peaceably turn over possession of the Hotel to Owner without need for legal or judicial process. 
 12. Term. 
 The term of this Agreement shall commence on the date first set forth above and shall
expire upon the expiration of the term of the Franchise Agreement, unless this Agreement is terminated prior thereto in accordance with this Agreement. If the term of the Franchise Agreement is renewed or otherwise extended, the term of this
Agreement shall automatically be extended to be coterminous with the extended term of the relevant franchise agreement. 
 13. Survival. 

Notwithstanding any provision to the contrary contained herein, Sections 9, 16 and 17 of this Agreement shall survive and remain in full force and
effect after termination or expiration of this Agreement for any reason, and Sections 5 and 14 shall survive the termination or expiration of this Agreement for any reason to the extent provided in such Sections. 
 14. Casualty. 
 If the Hotel is damaged or destroyed
by fire or other cause and such damage or destruction is substantial and material, the total cost of repairing and/or replacing the damaged portion of the Hotel to the same condition as existed previously would be forty-five percent (45%) or
more of the then total replacement cost of the Hotel, and such damage necessitates the closing of the Hotel for a period in excess of ninety (90) days, Owner shall have the right to terminate this Agreement and to cause the Franchise Agreement
to be terminated if it elects not to rebuild the Hotel upon written 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 the
Franchise Agreement would otherwise have ended pursuant to Section II of the Franchise Agreement if such notice of termination had not been given (“Term Expiration Date”), Owner or Franchisee, or any affiliated companies or any company
controlled by a controlling stockholder of Owner or Franchisee if Owner or Franchisee is a corporation, or any of their respective general partners, or any entity in which Owner or Franchisee or any of their respective general partners (the
“Owner Entity” or “Franchisee Entity”) has a fifteen percent (15%) or greater 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 

  

 6 

 
Product”), which Other Lodging Product is not operated pursuant to a license or franchise from Franchisor or one of its affiliates, then in such event,
Owner or Franchisee, depending upon whether an Owner Entity or Franchisee Entity has the ownership interest in or is operating the Other Lodging Product, shall be obligated to promptly pay to Franchisor an amount equal to the liquidated damages set
forth in Section XVIII.E. of the Franchise Agreement, and the time element for calculating the amount of 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 Owner Entity or Franchisee Entity and (ii) the Term Expiration Date. Owner’s and Franchisee’s obligations set forth in this Section 14 shall survive termination of this Agreement pursuant to this
Section 14. In the event that the Hotel does not close for ninety (90) days or the Owner does not elect to terminate this Agreement in accordance with the provisions of this Section 14, 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 of the Franchise Agreement. 
 15. Condemnation. 
 Owner shall, at the earliest
possible time, give Franchisor notice of any proposed taking of the Hotel 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 and the Franchise Agreement shall terminate upon notice by Franchisor to Owner and Franchisee, and Franchisor shall share in the condemnation award to the extent such award includes an allocation for its lost royalty
income. If a non-substantial condemnation shall occur, then in such event Owner 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. 
 16.
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: 
  

			
	If to Franchisor:	  	Marriott International, Inc.
		  	Franchise Attorney
		  	Law Department 52/923.25
		  	10400 Fernwood Road
		  	Bethesda, MD 20817
		
	With a copy to:	  	Marriott International, Inc.
		  	Vice President, Owner and Franchise Services
		  	10400 Fernwood Road
		  	Bethesda, MD 20817
		
	If to Franchisee:	  	Apple Eight Hospitality Management, Inc.
		  	815 East Main Street
		  	Richmond, VA 23219
		  	Attn: Krissy Gathright

  

 7 

			
	If to Owner:	  	Apple Eight Hospitality Ownership, Inc.
		  	815 East Main Street
		  	Richmond, VA 23219
		  	Attn: Krissy Gathright

 Any notice shall be deemed to have been given at the date and time of: (A) receipt or first refusal of
delivery, if sent via certified mail or delivered by hand; or (B) one day after posting if sent via overnight commercial delivery service. 
 C. Notwithstanding Section 16.A. above, Franchisor may provide Franchisee and/or Owner with routine information, the Standards, 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. 
 17. Successors and Assigns.

 This Agreement shall run to the benefit of and be binding upon the parties hereto and their approved successors and assigns. Franchisor
shall have the right to Transfer this Agreement to any person or legal entity without prior notice to, or consent of, Owner or Franchisee, provided the transferee assumes Franchisor’s obligations to Owner, and Franchisee under this Agreement.
Owner and Franchisee hereby acknowledge and agree that any such Transfer shall constitute a release and novation of Franchisor with respect to this Agreement. Except as may be provided above, this Agreement shall not be assigned by Owner or
Franchisee. 
 18. Governing Law. 
 This
Agreement is executed pursuant to, and shall be construed under and governed exclusively by, the laws of the State of Maryland, United States of America, which laws shall prevail in the event of any conflict of law. Nothing in this Section 18
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. 
 19. Ownership Structure. 
 A. If Owner 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), Owner represents that its equity is directly and (if applicable)
indirectly owned as shown on Attachment A hereto. 
 B. Owner represents and warrants to Franchisor that neither Owner (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 Owner 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 Owner nor any affiliate is acting on behalf of a government of any country that is subject to such an embargo. Owner further represents and
warrants that it is in compliance with any applicable anti-money laundering law, including, without limitation, the USA Patriot Act. Owner 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 Section 19.B. incorrect. 
  

 8 

 20. Entire Agreement; Counterparts. 
 A. This Agreement, including the attachments hereto, and the agreements executed simultaneously herewith, or pursuant to, or in connection with, this Agreement (including, without limitation, the Franchise Agreement),
contain the entire agreement between the parties hereto as it relates to the Hotel as of the date hereof. The Franchise Agreement is attached hereto as Attachment B; Owner hereby acknowledges that it has read and fully understands Attachment B as it
applies hereunder. 
 B. 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. This
is a fully integrated agreement. No agreement of any kind relating to the matters covered by this Agreement shall be binding upon any 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. 
 21. Effects of Waivers. 
 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. 
 22. Cost of Enforcement. 
 If for any reason it
becomes necessary for Franchisor or Owner to initiate any legal or equitable action to secure or protect its rights under this Agreement, the prevailing party shall be entitled to recover all costs incurred by it in successfully enforcing said
rights, including reasonable attorneys’ fees. 
 23. Construction and Severability 
 A. Except as expressly provided to the contrary herein, each section, part, term and/or provision of this Agreement shall be considered severable; and if,
for any reason any section, part, term or provision herein is determined to be invalid and 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
sections, parts, terms or provisions shall be deemed not to be a part of this Agreement. 
 B. Nothing in this Agreement is intended, or
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 (and its affiliates), Franchisee or Owner and their respective permitted successors and assigns. 

 

 9 

 24. Captions. 
 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. 
 25. Owner Representations, Warranties and Covenants. 
 Owner represents, warrants and covenants 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
their obligations under this Agreement, (iii) it has all necessary power and authority to execute and deliver this Agreement, (iv) it has read and fully understands Section XV of the Franchise Agreement (attached hereto as Attachment B) as
it applies hereunder and (v) during the term of the Franchise Agreement it will not enter into an Operating Agreement for the management of the Hotel that does not comply with the provisions of the Franchise Agreement, unless otherwise approved
by Franchisor. 
 26. Capitalized Terms. 
 Unless the context requires otherwise, capitalized terms not defined herein shall have the meaning set forth in the Franchise Agreement. 
 27.
Waiver of Jury Trial. 
 IN ANY LITIGATION BETWEEN THE PARTIES FOUNDED UPON OR ARISING FROM THIS AGREEMENT OR THE FRANCHISE
AGREEMENT, THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL, AND THE PARTIES HEREBY STIPULATE THAT ANY SUCH TRIAL SHALL OCCUR WITHOUT A JURY. 
  

 10 

 IN WITNESS WHEREOF, the parties have caused their duly authorized representatives to execute this Owner
Agreement, under seal, as of the date first above mentioned. 
  

							
		 	FRANCHISOR:	 	
			
		 	MARRIOTT INTERNATIONAL, INC.	 	
	ATTEST:	 		 		 	
				
	  
	 	By:	 	  
	 	(SEAL)
	Assistant Secretary	 	Name:	 	  
	 	
		 	Title:	 	  
	 	
			
		 	FRANCHISEE:	 	
			
		 	 APPLE EIGHT HOSPITALITY MANAGEMENT, INC.,

 a Virginia corporation
	 	
	ATTEST:	 		 		 	
				
	  
	 	By:	 	  
	 	(SEAL)
	Assistant Secretary	 	Name:	 	  
	 	
		 	Title:	 	  
	 	
			
		 	OWNER:	 	
			
		 	 APPLE EIGHT HOSPITALITY OWNERSHIP, INC.,

 a Virginia corporation
	 	
	ATTEST:	 		 		 	
				
	  
	 	By:	 	  
	 	(SEAL)
	Assistant Secretary	 	Name:	 	  
	 	
		 	Title:	 	  
	 	

  

 11 

 ATTACHMENT A 
 Equity Interest(s) in Owner 
 (Name(s), address(es), and percentages of ownership) 
  

				
	Ownership of Apple Eight Hospitality Ownership, Inc.	 
	 Apple Eight Hospitality, Inc.
 c/o Apple REIT Companies, 814 East Main Street, Richmond, Virginia 23219
	  	100	%
		
	Ownership of Apple Eight Hospitality, Inc.	  		
	 Apple REIT Eight, Inc.
 814 East Main Street, Richmond, Virginia 23219
	  	100	%
		
	Ownership of Apple REIT Eight, Inc.	  		
	 Publicly-Held Company
	  	100	%

  

 12 

 ATTACHMENT B 
 FRANCHISE AGREEMENT 
  

 13

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