Document:

Form of Lease Agreement

 Exhibit 10.24 
  
 LEASE AGREEMENT 
  
 DATED AS OF
                            , 2004 
  
 BETWEEN 
  
 [OWNER LLC] 
  
 AS LESSOR 
  
 AND 
  
 [CAPITAL LODGING TRS OPERATIONS I, INC.]

  
 AS LESSEE 

 LIST OF EXHIBITS 
  

EXHIBIT “A” - Property Description 
  
 EXHIBIT “B” - Rent Components and Terms 
  
 EXHIBIT “C” - Management Agreement 
  

 LEASE AGREEMENT 
  

THIS LEASE AGREEMENT (hereinafter called “LEASE”), is made as of the             day
of    , 2004, by and between [OWNER LLC], a Delaware limited liability company (hereinafter called “LESSOR”), and [CAPITAL LODGING TRS OPERATIONS I, INC.], a Delaware corporation (hereinafter called “LESSEE”),
and provides as follows: 
  
 WITNESSETH: 
  
 A. Lessor owns fee title to the Leased Property (as defined below);

  
 B. Lessor desires to lease to Lessee and Lessee desires to
lease from Lessor, the Leased Property, pursuant to the terms and conditions of this Lease; 
  
 NOW, THEREFORE, intending to be legally bound, Lessor, in consideration of the payment of rent by Lessee to Lessor, the covenants and agreements to be performed by Lessee, and upon the terms and conditions hereinafter
stated, does hereby rent and lease unto Lessee, and Lessee does hereby rent and lease from Lessor, the Leased Property, as follows: 
  
 ARTICLE 1 
  
 LEASED PROPERTY; TERM 
  
 1.1 LEASED PROPERTY. The Leased Property is comprised of Lessor’s interest in that certain
                             hotel located at
                     in
                    County, and known as the
                                    ,” as follows
(collectively, “LEASED PROPERTY”): 
  
 (a) the land and/or ground leasehold interests described in EXHIBIT “A” attached hereto and by reference incorporated herein (the “LAND”); 
  
 (b) all buildings, structures and other improvements of every kind including, but not limited to, alleyways
and connecting tunnels, sidewalks, utility pipes, conduits and lines (on-site and offsite), parking areas and roadways appurtenant to such buildings and structures presently situated upon the Land (collectively, the “IMPROVEMENTS”);

  
 (c) all easements, rights and appurtenances
relating to the Land and the Improvements; 
  
 (d) all equipment, machinery, fixtures, and other items of property required or incidental to the use of the Improvements as a hotel, including all components thereof, now and hereafter permanently affixed to or incorporated into the
Improvements, including, without limitation, all furnaces, boilers, heaters, electrical equipment, heating, plumbing, lighting, ventilating, refrigerating, incineration, air and water pollution control, waste disposal, air-cooling and
air-conditioning systems and apparatus, sprinkler systems and fire and theft protection equipment, all of which to the greatest extent permitted by law are hereby deemed by the parties hereto to constitute real estate, together with all
replacements, modifications, alterations and additions thereto (collectively, the “FIXTURES”); and 
  
 (e) all existing occupancy leases within the Leased Property (including any security deposits or collateral held by Lessor pursuant
thereto). 
  
 THE LEASED PROPERTY IS DEMISED IN ITS PRESENT
CONDITION WITHOUT REPRESENTATION OR WARRANTY (EXPRESSED OR IMPLIED) BY LESSOR AND SUBJECT TO THE RIGHTS OF PARTIES IN POSSESSION, AND TO THE EXISTING STATE OF TITLE INCLUDING ALL COVENANTS, CONDITIONS, RESTRICTIONS, EASEMENTS AND OTHER MATTERS OF
RECORD INCLUDING ALL APPLICABLE LEGAL REQUIREMENTS, THE LIEN OF FINANCING INSTRUMENTS, MORTGAGES, DEEDS OF TRUST AND SECURITY DEEDS, AND INCLUDING OTHER MATTERS WHICH WOULD BE DISCLOSED BY AN INSPECTION OF THE 
  

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 LEASED PROPERTY OR BY AN ACCURATE SURVEY THEREOF. 
  
 1.2 TERM. The term of the Lease (the “TERM”) shall commence on 2004 (the “COMMENCEMENT DATE”) and
shall end on December 31, 2009 (the “EXPIRATION DATE”), unless sooner terminated in accordance with the provisions hereof. 
  
 1.3 OPTION TO EXTEND. Lessor hereby grants to Lessee the option to extend the term of this Lease for two (2) additional five (5) year periods commencing
when the prior term expires, upon each and all of the following terms and conditions: 
  
 (a) In order to exercise an option to extend, Lessee must give written notice of such election to Lessor and Lessor must receive the same
at least six (6) but not more than nine (9) months prior to the date that the option period would commence, time being of the essence. If proper notification of the exercise of an option is not given, such option shall automatically expire. Options
to extend may only be exercised consecutively. 
  
 (b) Lessee is not in default under this Lease. 
  
 (c) All of the terms and conditions of this Lease shall apply to each option period; provided, however, the terms set forth on EXHIBIT “B” (including Room Revenue Percentage, Food and Beverage Revenue
Percentage, Other Revenue Percentage, and Room Revenue Breakpoint) used in calculating the Base Rent and Percentage Rent for the Leased Property, shall be adjusted to the market base rental value and market percentage rental value (collectively, the
“MRV”) of the Leased Property as compared to hotels of similar type and size in similar markets. Five (5) months prior to the date that the option period would commence, the parties shall attempt to agree upon what the new MRV will be for
the option period. If agreement cannot be reached within thirty days, then: 
  
 (1) Lessor and Lessee shall immediately appoint a mutually acceptable appraiser with hotel appraisal experience to establish the new MRV within the next thirty days. Any associated costs will be split equally between
the parties. 
  
 (2) If Lessor and Lessee are
unable to mutually agree on an acceptable appraiser, fifteen days thereafter Lessor and Lessee shall each select an appraiser with hotel appraisal experience. If either Lessor or Lessee fails to so appoint an appraiser, the one appraiser appointed
shall establish the new MRV. If the two appraisers are appointed but are unable to agree on the new MRV, then the two appraisers shall immediately select a third mutually acceptable appraiser to act as a third appraiser. The third appraiser shall
within thirty days of the appointment of the third appraiser reach a decision as to the new MRV for the Leased Property. The decision of the third appraiser shall be the new MRV. 
  
 (d) This option to extend is personal to the original Lessee, and cannot be assigned or exercised by anyone
other than the original Lessee and only while the original Lessee is in full possession of the Leased Property and without the intention of thereafter assigning or subletting. 
  
 ARTICLE 2 
  
 DEFINITIONS 
  
 2.1 DEFINITIONS. Except as otherwise expressly provided or unless the context otherwise requires, for all purposes of this Lease (a) the terms used in
this Lease and not otherwise defined, shall have the meanings assigned to them in this ARTICLE 2 and include the plural as well as the singular, (b) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance
with generally accepted accounting principles as are at the time applicable, (c) all references in this Lease to designated “Articles,” “Sections” and other subparagraphs are to the designated Articles, Sections and other
subparagraphs of this Lease and (d) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Lease as a whole and not to any particular Article, Section or other subparagraphs.

  

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 ADDITIONAL CHARGES: As defined in SECTION 3.3. 
  
 AFFILIATE: As used in this Lease the term “AFFILIATE” of a person
shall mean (a) any person that, directly or indirectly, controls or is controlled by or is under common control with such person, (b) any other person that owns, beneficially, directly or indirectly, ten percent or more of the outstanding capital
stock, shares or equity interests of such person, or (c) any officer, director, employee, partner or trustee of such person or any person controlling, controlled by or under common control with such person (excluding trustees and persons serving in
similar capacities who are not otherwise an Affiliate of such person). The term “PERSON” as used within this definition means and includes individuals, corporations, general and limited partnerships, stock companies or associations, joint
ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts, or other entities and governments and agencies and political subdivisions thereof. For the purposes of this definition, “CONTROL” (including
the correlative meanings of the terms “CONTROLLED BY” and “UNDER COMMON CONTROL WITH”), as used with respect to any person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the
management and policies of such person, through the ownership of voting securities, partnership interests or other equity interests. 
  
 AWARD: As defined in SECTION 15.1(c). 
  
 BASE RATE: The rate of interest announced publicly by Bank of America, from time to time, as such bank’s base rate. If no such rate is announced or
becomes discontinued, then such other rate as Lessor may reasonably designate. 
  
 BASE RENT: As defined in ARTICLE 3. 
  
 BEVERAGE REVENUES: Shall mean gross revenue from (i) the sale of wine, beer, liquor or other alcoholic beverages, whether sold in the bar or lounge, delivered to a guest room, sold at meetings or banquets or at any other location at the
Leased Property, or, if applicable, in connection with any off site catering or (ii) non-alcoholic beverages sold in the bar or lounge or, if applicable, in connection with any off site catering. Such revenues shall not include the following:

  
 (a) Any gratuity or service charge added to a customer’s
bill or statement in lieu of a gratuity which is paid to an employee (provided, that such exclusion shall not apply in connection with banquets in which the gratuity or service charge is added automatically to the bill or statement); 
  
 (b) Any revenues that are subsequently credited, rebated or refunded in the
ordinary course of business; and 
  
 (c) Sales taxes or taxes of
any other kind imposed on the sale of alcoholic or other beverages. 
  
 BUSINESS DAY: Each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which national banks in the City of
                            , or in the municipality wherein the Leased Property is located are
closed. 
  
 CAPITAL BUDGET: As defined in SECTION 23.3.

  
 CAPITAL EXPENDITURES: Amounts expended to pay the costs of
replacement and renewals to the FF&E of the Leased Property and Capital Improvements. 
  
 CAPITAL IMPROVEMENTS: Certain non-routine repairs and maintenance to the building(s) of the Leased Property which are normally capitalized under generally accepted accounting principles such as, but not limited to,
exterior and interior repainting, resurfacing, building walls, floors, roofs and parking areas, and replacing folding walls and the like, and major repairs, alterations, improvements, renewals or replacement to the building structure of the Leased
Property or to its mechanical, electrical, heating, ventilating, air conditioning, plumbing or vertical transportation systems. 
  

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 CAPITAL LODGING: Capital Lodging REIT 
  
 CERCLA: The Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended. 
  
 CLAIMS: As defined in SECTION 12.1. 
  
 CODE: The Internal Revenue Code of 1986, as amended. 
  
 COMMENCEMENT DATE: The date set forth in SECTION 1.2 as the commencement date
with respect to the Facility. 
  
 CONDEMNATION: As defined in
SECTION 15.1(a). CONDEMNOR: As defined in SECTION 15.1(d). 
  
 CONSUMER PRICE INDEX: Consumer Price Index, published for Urban Consumers for the U.S. City Average for all Items, 1982-84 = 100 issued by the Bureau of Labor Statistics of the United States Department of Labor, as published in The Wall
Street Journal. 
  
 CPI ADJUSTMENT YEAR: The calendar year next
following the year in which the Commencement Date occurs, if the Commencement Date occurs between January 1 and June 30, or the second calendar year following the year in which the Commencement Date occurs, if the Commencement Date occurs between
July 1 and December 31. 
  
 DATE OF TAKING: As defined in SECTION
15.1(b). 
  
 ENCUMBRANCE: As defined in SECTION 26.6. 

 
 ELIGIBLE INDEPENDENT CONTRACTOR: A management company that meets the
following requirements: 
  
 (a) The management company does not
permit wagering activities to be conducted at or in connection with the Facility. 
  
 (b) The management company does not own, directly or indirectly (within the meaning of Section 856(d)(5) of the Code), more than 35% of the outstanding stock of CAPITAL LODGING. 
  
 (c) Not more than 35% of the total combined voting power of the stock in such
management company (or 35% of the total shares of all classes of such stock), or, if such management company is not a corporation, not more than 35% of the aggregate interests in its assets or net profits, is owned, directly or indirectly (within
the meaning of Section 856(d)(5) of the Code), by one or more Persons owning 35% (within the meaning of Section 856(d)(5) of the Code) or more of the outstanding stock of CAPITAL LODGING. 
  
 (d) Neither CAPITAL LODGING, the Lessor, nor the Lessee, derives any income from the management company or any of its
subsidiaries. 
  
 (e) At the time that the management company
enters into a management agreement with the Lessee to operate the Leased Property, the management company (or any “Related Person” within the meaning of Section 856(d)(9)(F) of the Code) is actively engaged in the trade or business of
operating “qualified lodging facilities” within the meaning of Section 856(d)(9)(D) of the Code for any Person who is not a “related person” within the meaning of Section 856(d)(9)(F) of the Code with respect to CAPITAL LODGING
or the Lessee (an “UNRELATED PERSON”). For purposes of determining whether the requirement of this paragraph (e) has been met, a management company shall be treated as being “actively engaged” in such a trade or business if the
management company (i) derives at least 10% of both its profits and revenue from operating “qualified lodging facilities” within the meaning of Section 856(d)(9)(D) of the Code for Unrelated Persons or 
  

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 (ii) complies with any regulations or other administrative guidance under Section 856(d)(9) of the Code that provide a
“safe harbor” rule with respect to the amount of hotel management business with Unrelated Persons that is necessary to qualify as an “eligible independent contractor” within the meaning of such Code section. 
  
 A “qualified lodging facility” is defined in Section 856(d)(9)(D)
of the Code and means a “Lodging Facility” (defined below), unless wagering activities are conducted at or in connection with such facility by any person who is engaged in the business of accepting wagers and who is fully authorized to
engage in such business at or in connection with such facility. A “LODGING FACILITY” is a hotel, motel or other establishment more than one-half of the dwelling units in which are used on a transient basis, and includes customary amenities
and facilities operated as party of, or associated with, the lodging facility so long as such amenities and facilities are customary for other properties of a comparable size and class owned by other owners unrelated to CAPITAL LODGING. 

 
 ENVIRONMENTAL AUTHORITY: Any department, agency or other body or component
of any Government that exercises any form of jurisdiction or authority under any Environmental Law. 
  
 ENVIRONMENTAL AUTHORIZATION: Any license, permit, order, approval, consent, notice, registration, filing or other form of permission or authorization
required under any Environmental Law. 
  
 ENVIRONMENTAL LAWS: All
applicable federal, state, local and foreign laws and regulations relating to pollution of the environment (including without limitation, ambient air, surface water, ground water, land surface or subsurface strata), including, without limitation,
laws and regulations relating to emissions, discharges, a Release or threatened Release of Hazardous Materials or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous
Materials. Environmental Laws include but are not limited to CERCLA, FIFRA, RCRA, SARA and TSCA. 
  
 ENVIRONMENTAL LIABILITIES: Any and all obligations to pay the amount of any judgment or settlement, the cost of complying with any settlement, judgment or
order for injunctive or other equitable relief, the cost of compliance or corrective action in response to any notice, demand or request from an Environmental Authority, the amount of any civil penalty or criminal fine, and any court costs and
reasonable amounts for attorney’s fees, fees for witnesses and experts, and costs of investigation and preparation for defense of any claim or any Proceeding, regardless of whether such Proceeding is threatened, pending or completed, that may
be or have been asserted against or imposed upon Lessor, Lessee, any Predecessor, the Leased Property or any property used therein and arising out of: 
  
 (a) Failure of Lessee, Lessor, any Predecessor or the Leased Property to comply at any time with all Environmental Laws; 
  
 (b) Presence of any Hazardous Materials on, in, under, at or in any way
affecting the Leased Property; 
  
 (c) A Release at any time of
any Hazardous Materials on, in, at, under or in any way affecting the Leased Property; 
  
 (d) Identification of Lessee, Lessor or any Predecessor as a potentially responsible party under CERCLA or under any Environmental Law similar to CERCLA; 
  
 (e) Presence at any time of any above-ground and/or underground storage tanks, as defined in RCRA or in any applicable
Environmental Law on, in, at or under the Leased Property or any adjacent site or facility; or 
  
 (f) Any and all claims for injury or damage to persons or property arising out of exposure to Hazardous Materials originating or located at the Leased Property, or resulting from operation thereof or any adjoining
property. 
  

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 EVENT OF DEFAULT: As defined in SECTION 16.1. 
  
 EXPIRATION DATE: The date set forth in SECTION 1.2 as the expiration date
with respect to the Facility. 
  
 FACILITY: The hotel and/or other
facility offering lodging and other services or amenities being operated or proposed to be operated on the Leased Property. 
  
 FF&E: Shall mean all Fixtures, furniture, furnishings and equipment. 
  
 FIFRA: The Federal Insecticide, Fungicide, and Rodenticide Act, as amended. 
  
 FISCAL YEAR: The 12-month period from January 1 to December 31. FIXTURES: As
defined in SECTION 1.1(d). 
  
 FOOD AND BEVERAGE REVENUE
PERCENTAGE: The percentage corresponding to such term as set forth on EXHIBIT “B”. 
  

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 FOOD REVENUES: Shall mean gross revenue from the sale, for on-site consumption, of food and non-alcohol
beverages sold at the Leased Property, including in respect to guest rooms, banquet rooms, meeting rooms and other similar rooms, or, if applicable, in connection with any off site catering. Such revenues shall not include the following: 

 
 (a) Vending machine sales; 
  
 (b) Any gratuities or service charges added to a customer’s bill or
statement in lieu of a gratuity which is paid to an employee (provided, that such exclusion shall not apply in connection with banquets in which the gratuity or service charge is added automatically to the bill or statement); 
  
 (c) Non-alcoholic beverages sold from the bar or lounge; 
  
 (d) Sales taxes or taxes of any other kind imposed on the sale of food or
non-alcoholic beverages; and 
  
 (e) Any revenues that are
subsequently credited, refunded or rebated in the ordinary course of business. 
  
 FRANCHISE AGREEMENT: Any franchise license agreement with a national franchisor under which the Facility is operated. 
  
 FULL REPLACEMENT COST: As defined in SECTION 13.2. 
  
 GAAP: GAAP shall mean, as of any date of determination, accounting principles (a) set forth as generally accepted in then currently effective Opinions of
the Accounting Principles Board of the American Institute of Certified Public Accountants, (b) set forth as generally accepted in then currently effective Statements of the Financial Accounting Standards Board or (c) that are then approved by such
other entity as may be approved by a significant segment of the accounting profession in the United States of America. The term “consistently applied,” as used in connection therewith, means that the accounting principles applied are
consistent in all material respects to those applied at prior dates or for prior periods. 
  
 GOVERNMENT: The United States of America, any state, district or territory thereof, any foreign nation, any state, district, department, territory or other political division thereof, or any political subdivision of
any of the foregoing. 
  
 GROSS REVENUES: shall mean all revenues
and receipts of every kind received from operating the Facility and all departments and parts thereof, including but not limited to, income from both cash and credit transactions, income from the rental of rooms, stores, offices, banquet rooms,
conference rooms, exhibits or sale space of every kind, license, lease and concession fees and rentals (not including gross receipts of licensees, lessors and concessionaires), vending machines, health club membership fees, food and beverage sales,
wholesale and retail sales of merchandise, service charges, and proceeds, if any, from business interruption or other loss of income insurance; provided, however, Gross Revenues shall not include (a) gratuities to the Facility’ employees
(provided, that such exclusion shall not apply in connection with banquets in which the gratuity or service charge is added automatically to the bill or statement), (b) federal, state or municipal excise, sales or use taxes or similar impositions
collected directly from customers, patrons or guests or included as part of the sales prices of any goods or services paid over to federal, state or municipal governments, (c) property insurance or condemnation proceeds (excluding proceeds from
business interruption coverage), (d) proceeds from the sale or refinance of assets other than sales in the ordinary course of business, (e) funds furnished by the Lessor, (f) judgments and awards, (g) the amount of all credits, rebates or refunds
(which shall be deductions from Gross Revenues) to customers, patrons or guests, (h) the value of complimentary rooms, food and beverages, (i) interest income, (j) lease security deposits, and (k) items constituting “allowances” under the
Uniform System. 
  

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 HAZARDOUS MATERIALS: All chemicals, pollutants, contaminants, wastes and toxic substances, including
without limitation: 
  
 (a) Solid or hazardous
waste, as defined in RCRA or in any Environmental Law; 
  
 (b) Hazardous substances, as defined in CERCLA or in any Environmental Law; 
  
 (c) Toxic substances, as defined in TSCA or in any Environmental Law; 
  
 (d) Insecticides, fungicides, or rodenticides, as defined in FIFRA or in any Environmental Law; and

  
 (e) Gasoline or any other petroleum product
or byproduct, polychlorinated biphenols, asbestos and urea formaldehyde. 
  
 IMPOSITIONS: Collectively, all taxes (including, without limitation, all ad valorem, sales and use, single business, gross receipts, transaction privilege, rent or similar taxes as the same relate to or are imposed
upon Lessee or its business conducted upon the Leased Property), assessments (including, without limitation, all assessments for public improvements or benefit, whether or not commenced or completed prior to the date hereof and whether or not to be
completed within the Term), ground rents, water, sewer or other rents and charges, excises, tax inspection, authorization and similar fees and all other governmental charges, in each case whether general or special, ordinary or extraordinary, or
foreseen or unforeseen, of every character in respect of the Leased Property or the business conducted thereon by Lessee (including all interest and penalties thereon caused by any failure in payment by Lessee), which at any time prior to, during or
with respect to the Term hereof may be assessed or imposed on or with respect to or be a lien upon (a) Lessor’s interest in the Leased Property, (b) the Leased Property, or any part thereof or any rent therefrom or any estate, right, title or
interest therein, or (c) any occupancy, operation, use or possession of, or sales from, or activity conducted on or in connection with the Leased Property, or the leasing or use of the Leased Property or any part thereof by Lessee. Nothing contained
in this definition of Impositions shall be construed to require Lessee to pay (1) any tax based, on net income (whether denominated as a franchise or capital stock or other tax) imposed on Lessor or any other person, or (2) any net revenue tax of
Lessor or any other person, or (3) any tax imposed with respect to the sale, exchange or other disposition by Lessor of any Leased Property or the proceeds thereof, or (4) any single business, gross receipts (other than a tax on any rent received by
Lessor from Lessee), transaction, privilege or similar taxes as the same relate to or are imposed upon Lessor, except to the extent that any tax, assessment, tax levy or charge that Lessee is obligated to pay pursuant to the first sentence of this
definition and that is in effect at any time during the Term hereof is totally or partially repealed, and a tax, assessment, tax levy or charge set forth in clause (1) or (2) is levied, assessed or imposed expressly in lieu thereof. 
  
 IMPROVEMENTS: As defined in SECTION 1.1(b). 
  
 INDEMNIFIED PARTY: Either Lessee Indemnified Party or a Lessor Indemnified
Party. 
  
 INDEMNIFYING PARTY: Any party obligated to indemnify an
Indemnified Party pursuant to SECTIONS 8.3 OR 21.1. 
  
 INSURANCE
REQUIREMENTS: All terms of any insurance policy required by this Lease and all requirements of the issuer of any such policy. 
  
 INVENTORY: All “INVENTORIES OF MERCHANDISE” and “INVENTORIES OF SUPPLIES” as defined in the Uniform System and including any property
of the type described in Section 1221(1) of the Code. 
  
 LAND: As
defined in SECTION 1.1(a). 
  

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 LEASE: This Lease Agreement. 
  
 LEASE YEAR: Any 12-month period from January 1 through December 31 during the Term, or any shorter period at the beginning
or end of the Term. 
  
 LEASED PROPERTY: As defined in SECTION
1.1. 
  
 LEGAL REQUIREMENTS: All federal, state, county, municipal
and other governmental statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and injunctions affecting either the Leased Property or the maintenance, construction, use or alteration thereof (whether by Lessee or otherwise),
whether or not hereafter enacted and in force, including (a) all laws, rules or regulations pertaining to the environment, occupational health and safety and public health, safety or welfare, and (b) any laws, rules or regulations that may (1)
require repairs, modifications or alterations in or to the Leased Property or (2) in any way adversely affect the use and enjoyment thereof; and all permits, licenses and authorizations and regulations relating thereto and all covenants, agreements,
restrictions and encumbrances contained in any instruments, either of record or known to Lessee (other than encumbrances created by Lessor without the consent of Lessee), at any time in force affecting the Leased Property. 
  
 LESSEE: The Lessee designated on this Lease and its respective permitted
successors and assigns. 
  
 LESSEE INDEMNIFIED PARTY: Lessee, any
Affiliate of Lessee, any other Person against whom any claim for indemnification may be asserted hereunder as a result of a direct or indirect ownership interest (including a stockholder’s interest) in Lessee, the officers, directors,
stockholders, employees, agents and representatives of Lessee and any corporate stockholder, agent, or representative of Lessee, and the respective heirs, personal representatives, successors and assigns of any such officer, director, stockholder,
employee, agent or representative. 
  
 LESSEE’S PERSONAL
PROPERTY: As defined in SECTION 6.2. 
  
 LESSOR: The Lessor
designated on this Lease and its respective successors and assigns. 
  
 LESSOR INDEMNIFIED PARTY: Lessor, any Affiliate of Lessor, including CAPITAL LODGING, any other Person against whom any claim for indemnification may be asserted hereunder as a result of a direct or indirect ownership interest in Lessor,
the officers, trustees, directors, stockholders, partners, members, employees, agents and representatives of any of the foregoing Persons and of any stockholder, partner, member, agent, or representative of any of the foregoing Persons, and the
respective heirs, personal representatives, successors and assigns of any such officer, trustee, director, partner, member, stockholder, employee, agent or representative. 
  
 LICENSES: As defined in SECTION 26.1. 
  
 MANAGEMENT AGREEMENT: As defined in SECTION 18.3. 
  
 MANAGER: As defined in SECTION 18.3. 
  
 MRV: As defined in SECTION 1.3(c). 
  

NOTICE: A notice given pursuant to ARTICLE 25. 
  
 OFFICER’S CERTIFICATE: A certificate of Lessee signed by the chief financial officer or another officer authorized so to sign by the board of
directors or by-laws of Lessee, or any other person whose power and authority to act has been authorized by delegation in writing by any such officer. 
  
 OPERATING BUDGET: As defined in SECTION 23.2. 
  

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 OTHER REVENUE PERCENTAGE: The percentage corresponding to such term as set forth on EXHIBIT
“B”. 
  
 OTHER REVENUES: All revenues, receipts, and
income of any kind derived directly or indirectly from or in connection with the Facility and included in Gross Revenues, other than Room Revenues, Food Revenues and Beverage Revenues. 
  
 OVERDUE RATE: On any date, a rate equal to the Base Rate plus     % per annum, but in no event
greater than the maximum rate then permitted under applicable law. 
  
 PAYMENT DATE: Any due date for the payment of any installment of Base Rent. 
  
 PERCENTAGE RENT: As defined in SECTION 3.1(b). 
  
 PERIOD REVENUES COMPUTATION: As defined in SECTION 3.1(b). 
  
 PERSON: Any Government, natural person, corporation, partnership or other legal entity. 
  
 PREDECESSOR: Any Person whose liabilities arising under any Environmental Law have or may have been retained or assumed by Lessee, either contractually or
by operation of law, relating to the Leased Property. 
  
 PRIMARY
INTENDED USE: As defined in SECTION 7.2(b). 
  
 PROCEEDING: Any
judicial action, suit or proceeding (whether civil or criminal), any administrative proceeding (whether formal or informal), any investigation by a governmental authority or entity (including a grand jury), and any arbitration, mediation or other
non-judicial process for dispute resolution. 
  
 RCRA: The
Resource Conservation and Recovery Act, as amended. 
  
 REAL
ESTATE TAXES: All real estate taxes, including general and special assessments, if any, which are imposed upon the Land, and any improvements thereon. 
  
 REIT REQUIREMENTS: As defined in SECTION 18.1(a). 
  
 RELEASE: A “Release” as defined in CERCLA or in any Environmental Law, unless such Release has been properly authorized and permitted in writing
by all applicable Environmental Authorities or is allowed by such Environmental Law without authorizations or permits. 
  
 RENT: As defined in SECTION 3.1. 
  
 ROOM REVENUES: Shall mean gross revenue from the rental of guest rooms, whether to individuals, groups or transients, but excluding the following:

  
 (a) The amount of all credits, rebates or refunds to
customers, guests or patrons; 
  
 (b) All sales taxes or any other
taxes imposed on the rental of such guest rooms; and 
  
 (c) Any
fees collected for amenities including, but not limited to: telephone, laundry, Internet, movies or concessions. 
  
 ROOM REVENUES BREAK POINT: The amount of Room Revenues for the applicable Lease Year corresponding to such term as set forth on EXHIBIT “B”.

  

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 ROOM REVENUE PERCENTAGE: The percentage corresponding to such term as set forth on EXHIBIT “B”.

  
 SARA: The Superfund Amendments and Reauthorization Act of
1986, as amended. 
  
 STATE: The State or Commonwealth of the
United States in which the Leased Property is located. 
  
 SUBSIDIARIES: One or more corporations in which Lessee owns, directly or indirectly, more than 50% of the voting stock or control, as applicable. 
  
 TAKING: A taking or voluntary conveyance during the Term hereof of all or part of the Leased Property, or any interest therein or right accruing thereto
or use thereof, as the result of, or in settlement of, any Condemnation or other eminent domain proceeding affecting the Leased Property whether or not the same shall have actually been commenced. 
  
 TERM: As defined in SECTION 1.2. 
  
 TSCA: The Toxic Substances Control Act, as amended. 
  
 UNAVOIDABLE DELAY: Delays due to acts of God (including adverse weather
conditions), acts of the state or federal government in its sovereign or contractual capacity, war, civil disturbance, riot or mob violence, terrorism, earthquake, flood, fire or other casualty, epidemic, quarantine restriction, labor strikes or
lockout, freight embargo, or similar causes beyond the control of the parties hereto. 
  
 UNECONOMIC FOR ITS PRIMARY INTENDED USE: A state or condition of the Facility such that, in the good faith judgment of Lessee, reasonably exercised and evidenced by the resolution of the board of directors or other
governing body of Lessee, the Facility cannot be operated on a commercially practicable basis for its Primary Intended Use, taking into account, among other relevant factors, the number of usable rooms and projected revenues, such that Lessee
intends to, and shall, complete the cessation of operations at the Leased Facility. 
  
 UNIFORM SYSTEM: Shall mean the Uniform System of Accounts for the Lodging Industry, 9th Revised Edition, as may be modified from time to time by the International Association of Hospitality Accountants. 
  
 UNSUITABLE FOR ITS PRIMARY INTENDED USE: A state or condition of the Facility
such that, in the good faith judgment of Lessee, reasonably exercised and evidenced by the resolution of the board of directors or other governing body of Lessee, due to casualty damage or loss through Condemnation, the Facility cannot function as
an integrated hotel facility consistent with standards applicable to a well maintained and operated hotel. 
  
 ARTICLE 3 
  
 BASE RENT; PERCENTAGE RENT; ADDITIONAL CHARGES 
  
 3.1 RENT. Lessee will pay to Lessor, in lawful money of the United States of America which shall be legal tender for the payment of public and private debts, in immediately available funds, at Lessor’s address set forth in ARTICLE 2
hereof or at such other place or to such other Person, as Lessor from time to time may designate in a Notice, the greater of the following: 
  
 (a) Base Rent: the annual amount of Base Rent set forth on EXHIBIT “B” (the “BASE RENT”), which shall be payable
one-twelfth ( 1/12th) monthly in arrears on or before the first Business Day of the subsequent 

 

 11 

 calendar month beginning on the date as set forth on EXHIBIT “B”; provided, however, that Base
Rent shall be prorated as to any partial Lease Year; plus 
  
 (b) Percentage Rent: an amount of percentage rent (“PERCENTAGE RENT”), calculated for each calendar quarter, equal to the Period Revenues Computation through the end of such calendar quarter for the
applicable Lease Year, which amount shall be payable on or before the fifteenth (15th) day of the following calendar quarter, beginning on the date as set forth on EXHIBIT “B”. 
  
 The term “PERIOD REVENUES COMPUTATION” as used herein shall mean the amount equal to the sum of, for the
applicable Lease Year, (i) an amount equal to the Room Revenue Percentage of all “Lease Year to date” Room Revenues in excess of the Room Revenues Break Point, (ii) an amount equal to the Food and Beverage Revenue Percentage of all
“Lease Year to date” Food Revenues and Beverage Revenues, and (iii) an amount equal to the Other Revenue Percentage of all “Lease Year to date” Other Revenues. 
  
 If the Term begins or ends in the middle of a calendar year, then the number of calendar quarters falling within the Term
during such calendar year shall constitute a separate Lease Year. 
  
 (c) Officer’s Certificates. Additionally, an Officer’s Certificate in form reasonably acceptable to Lessor shall be delivered to Lessor quarterly of each Lease Year during the Term with each Percentage Rent
payment, setting forth the calculation of such rent payment for such quarter. Such quarterly payments shall be as set forth in SECTION 3.1(b). 
  
 In addition, on or before January 25 of each year, commencing with January 25 first following the end of the Fiscal Year in which the Commencement Date
occurs, Lessee shall deliver to Lessor an Officer’s Certificate reasonably acceptable to Lessor setting forth the computation of Percentage Rent accrued and paid during the Fiscal Year that ended on the immediately preceding December 31. If the
annual Percentage Rent due and payable for any Fiscal Year (as shown in the applicable Officer’s Certificate) exceeds the amount actually paid as Percentage Rent by Lessee for such year, Lessee shall pay such excess to Lessor at the time such
certificate is delivered. If the Percentage Rent actually due and payable for such Fiscal Year is shown by such certificate to be less than the amount actually paid as Percentage Rent for the applicable Fiscal Year, Lessor, at its option, shall
reimburse such amount to Lessee or credit such amount against the following months’ Rent payments. 
  
 Any difference between the annual Percentage Rent due and payable for any Fiscal Year (as shown in the applicable Officer’s Certificate or as
adjusted pursuant to this SECTION 3.1(c)) and the total amount of quarterly payments for such Fiscal Year actually paid by Lessee as Percentage Rent, whether in favor of Lessor or Lessee, shall bear interest at the Overdue Rate, which interest shall
accrue from the close of such Fiscal Year until the amount of such difference shall be paid or otherwise discharged. Any such interest payable to Lessor shall be deemed to be and shall be payable as Additional Charges. 
  
 The obligation to pay Percentage Rent shall survive the expiration or earlier
termination of the Term, and a final reconciliation, taking into account, among other relevant adjustments, any adjustments which are accrued after such expiration or termination date but which related to Percentage Rent accrued prior to such
termination date, and Lessee’s good faith best estimate of the amount of any unresolved contractual allowances, shall be made not later than two years after such expiration or termination date, but Lessee shall advise Lessor within sixty (60)
days after such expiration or termination date of Lessee’s best estimate at that time of the approximate amount of such adjustments, which estimate shall not be binding on Lessee or have any legal effect whatsoever. 
  
 (d) CPI Adjustments to Rent. For each Fiscal Year of the Term
beginning on or after the CPI Adjustment Year, the Base Rent then in effect, and the threshold Room Revenues then included in the Period Revenues Computations set forth in SECTION 3.1(b) shall be adjusted from time to time beginning in the CPI
Adjustment Year as follows: 
  
  
 (1) The average Consumer Price Index for the most recently ended Fiscal Year shall be divided by the average Consumer Price Index for the
immediately preceding Fiscal Year. 
  

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 (A) The new Base Rent for the then current Fiscal Year shall be the adjusted amount
obtained by multiplying the Base Rent for the immediately preceding Fiscal Year by the quotient obtained in subparagraph (d) (1) above. 
  
 (B) The new threshold dollar amount in the Period Revenues Computations described in SECTION 3.1(b) above for the then current Fiscal
Year shall be the product of the threshold dollar amount of Room Revenues in effect in the most recently ended Fiscal Year and the quotient obtained in subparagraph (d) (1) above. 
  
 By way of example, if the CPI Adjustment Year were 2004, the amount of Base Rent and the threshold Room Revenues amounts in
the Period Revenues Computations for the Fiscal Year commencing January 1, 2004 would be adjusted to reflect any change in the average Consumer Price Index from the Fiscal Year ended December 31, 2003 as compared to the Fiscal Year ended December
31, 2002. Base Rent and the threshold Room Revenues amounts in the Period Revenues Computations for the Fiscal Year commencing January 1, 2005 would be the Base Rent and threshold Room Revenues amounts applicable for the fiscal year ended December
31, 2004 as further adjusted to reflect any change in the average Consumer Price Index from December 31, 2004 as compared to December 31, 2003. 
  
 Lessor shall calculate the annual adjustments as soon as reasonably possible after the Consumer Price Index becomes available and shall notify Lessee in
writing of the amount of the annual adjustment, together with a copy of the computation showing the adjustment amount. Adjustments calculated as set forth above in the Base Rent and threshold Room Revenues amounts shall be effective on January 1 of
the Fiscal Year to which such adjusted amounts apply. If Rent is paid in any Fiscal Year prior to the determination of the amount of any adjustment to Base Rent or the threshold Room Revenues applicable for such Fiscal Year, payment adjustments for
any shortfall in or overpayment of rent paid shall be made with the first Base Rent payment due after the amount of the adjustments are determined. 
  
 The “AVERAGE CONSUMER PRICE INDEX” for any period shall be the average of the Consumer Price Index for each month during the period. 

 
 (2) If (i) a significant change is made in the number or
nature (or both) of items used in determining the Consumer Price Index, or (ii) the Consumer Price Index shall be discontinued for any reason, the Bureau of Labor Statistics shall be requested to furnish a new index comparable to the Consumer Price
Index, together with information which will make possible a conversion to the new index in computing the adjustments to Rent hereunder. If for any reason the Bureau of Labor Statistics does not furnish such an index and such information, the parties
will instead mutually select, accept and use such other index or comparable statistics on the cost of living that is computed and published by an agency of the United States or a responsible financial periodical of recognized authority. 

 
 3.2 CONFIRMATION OF PERCENTAGE RENT. Lessee shall utilize, or cause to be
utilized, an accounting system for the Leased Property in accordance with its usual and customary practices, and in accordance with GAAP and the Uniform System, that will accurately record all data necessary to compute Percentage Rent, and Lessee
shall retain, for at least four (4) years after the expiration of each Fiscal Year (and in any event until the reconciliation described in SECTION 3.1(c) for such Fiscal Year has been made), reasonably adequate records conforming to such accounting
system showing all data necessary to compute Percentage Rent for the applicable Fiscal Years. Lessor, at its expense (except as provided hereinbelow), shall have the right from time to time by its accountants or representatives to audit the
information that formed the basis for the data set forth in any Officer’s Certificate provided under SECTION 3.1(c) and, in connection with such audits, to examine all Lessee’s records (including supporting data, franchisor reports and
sales and excise tax returns) reasonably required to verify Percentage Rent, subject to any prohibitions or limitations on disclosure of any such data under Legal Requirements. If any such audit discloses a deficiency in the payment of Percentage
Rent, and either Lessee agrees with the result of such audit or the matter is otherwise determined or compromised, Lessee shall forthwith pay to Lessor the amount of the deficiency, as finally agreed or determined, together with interest at the
Overdue Rate from the date when said 
  

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 payment should have been made to the date of payment thereof; provided, however, that as to any audit that is commenced
more than two years after the date Percentage Rent for any Fiscal Year is reported by Lessee to Lessor, the deficiency, if any, with respect to such Percentage Rent shall bear interest at the Overdue Rate only from the date such determination of
deficiency is made unless such deficiency is the result of gross negligence or willful misconduct on the part of Lessee, in which case interest at the Overdue Rate will accrue from the date such payment should have been made to the date of payment
thereof. If any such audit discloses that the Percentage Rent actually due from Lessee for any Fiscal Year exceed those reported and paid by Lessee by more than 3%, Lessee shall pay the cost of such audit and examination. Any proprietary information
obtained by Lessor pursuant to the provisions of this Section shall be treated as confidential, except that such information may be used, subject to appropriate confidentiality safeguards, in any litigation between the parties and except further
that Lessor may disclose such information to prospective lenders. The obligations of Lessee contained in this Section shall survive the expiration or earlier termination of this Lease. 
  
 3.3 ADDITIONAL CHARGES. In addition to the Base Rent and Percentage Rent, (a) Lessee also will pay and discharge as and when
due and payable all other amounts, liabilities, obligations and Impositions that Lessee assumes or agrees to pay under this Lease, and (b) in the event of any failure on the part of Lessee to pay any of those items referred to in clause (a) of this
SECTION 3.3, Lessee also will promptly pay and discharge every fine, penalty, interest and cost that may be added for non-payment or late payment of such items (the items referred to in clauses (a) and (b) of this SECTION 3.3 being additional rent
hereunder and being referred to herein collectively as the “ADDITIONAL CHARGES”), and Lessor shall have all legal, equitable and contractual rights, powers and remedies provided either in this Lease or by statute or otherwise in the case
of non-payment of the Additional Charges as in the case of non-payment of the Base Rent, including, but not limited to, the right, but not the obligation to pay such Additional Charges on behalf of the Lessee and to require reimbursement thereof by
Lessee, together with interest thereon at the Overdue Rate. If any installment of Base Rent, Percentage Rent or Additional Charges (but only as to those Additional Charges that are payable directly to Lessor) shall not be paid on its due date,
Lessee will pay Lessor on demand, as Additional Charges, a late charge (to the extent permitted by law) computed at the Overdue Rate on the amount of such installment, from the due date of such installment to the date of payment thereof. To the
extent that Lessee pays any Additional Charges to Lessor pursuant to any requirement of this Lease, Lessee shall be relieved of its obligation to pay such Additional Charges to the entity to which they would otherwise be due and Lessor shall pay
same from monies received from Lessee. 
  
 3.4 NET LEASE
PROVISION. The Rent shall be paid absolutely net to Lessor, so that this Lease shall yield to Lessor the full amount of the installments of Base Rent, Percentage Rent and Additional Charges throughout the Term, all as more fully set forth in ARTICLE
5, but subject to any other provisions of this Lease that expressly provide for adjustment or abatement of Rent or other charges or expressly provide that certain expenses or maintenance shall be paid or performed by Lessor. 
  
 3.5 CONVERSION OF PROPERTY. If, during the Term, Lessee wishes to cease food
and beverage operations or institute food and beverage operations at the Facility (all in accordance with the requirements of any applicable Franchise Agreement), Lessee shall give Notice of such desire to Lessor. If, during the Term, Lessor wishes
(a) Lessee to cease food and beverage operations or to institute food and beverage operations at the Facility (all in accordance with the requirements of any applicable Franchise Agreement), or (b) to change the franchise affiliation of the Facility
or to make substantial renovations to the Facility, Lessor shall give Notice thereof to Lessee. Following any such notice, Lessor and Lessee shall commence negotiations to adjust Rent to reflect the proposed renovation or change to the operation of
the Facility, each acting reasonably and in good faith, and subject to Lessor’s reasonable satisfaction that any Rent adjustment will not adversely affect CAPITAL LODGING’s status as a real estate investment trust under the Code.
All other terms of this Lease will remain substantially the same. During negotiations, which shall not extend beyond sixty (60) days, Lessee shall not “convert” the Facility and Lessor shall not change the franchise or commence substantial
renovations and Lessee shall continue fulfilling its obligations under the existing terms of this Lease. If no agreement is reached after such 60-day period, Lessee or Lessor, as appropriate, shall withdraw such notice and this Lease shall continue
in full force. 
  

 14 

 ARTICLE 4 
  

IMPOSITIONS 
  
 4.1 PAYMENT OF IMPOSITIONS. Subject to ARTICLE 12 relating to permitted contests, Lessee will pay, or cause to be paid, all Impositions (other than Real
Estate Taxes, which shall be paid by Lessor) before any fine, penalty, interest or cost may be added for non-payment, such payments to be made directly to the taxing or other authorities where feasible, and will promptly furnish to Lessor copies of
official receipts or other satisfactory proof evidencing such payments. Lessee’s obligation to pay such Impositions shall be deemed absolutely fixed upon the date such Impositions become a lien upon the Leased Property or any part thereof. If
any such Imposition may, at the option of the taxpayer, lawfully be paid in installments (whether or not interest shall accrue on the unpaid balance of such Imposition), Lessee may exercise the option to pay the same (and any accrued interest on the
unpaid balance of such Imposition) in installments and in such event, shall pay such installments during the Term hereof (subject to Lessee’s right of contest pursuant to the provisions of ARTICLE 12) as the same respectively become due and
before any fine, penalty, premium, further interest or cost may be added thereto. Lessor, at its expense, shall, to the extent required or permitted by applicable law, prepare and file all tax returns in respect of Lessor’s net income, gross
receipts, sales and use, single business, transaction privilege, rent, ad valorem, franchise taxes, Real Estate Taxes and taxes on its capital stock, and Lessee, at its expense, shall, to the extent required or permitted by applicable laws and
regulations, prepare and file all other tax returns and reports in respect of any Imposition as may be required by. governmental authorities. If any refund shall be due from any taxing authority in respect of any Imposition paid by Lessee, the same
shall be paid over to or retained by Lessee if no Event of Default shall have occurred hereunder and be continuing. If an Event of Default shall have occurred and be continuing, any such refund shall be paid over to or retained by Lessor. Any such
funds retained by Lessor due to an Event of Default shall be applied as provided in ARTICLE 16. Lessor and Lessee shall, upon request of the other, provide such data as is maintained by the party to whom the request is made with respect to the
Leased Property as may be necessary to prepare any required returns and reports. Lessee shall file all personal property tax returns in such jurisdictions where it is legally required to so file. Lessor, to the extent it possesses the same, and
Lessee, to the extent it possesses the same, will provide the other party, upon request, with cost and depreciation records necessary for filing returns for any property so classified as personal property. Where Lessor is legally required to file
personal property tax returns, Lessor shall provide Lessee with copies of assessment notices in sufficient time for Lessee to file a protest. Lessee may, upon notice to Lessor, at Lessee’s option and at Lessee’s sole expense, protest,
appeal, or institute such other proceedings (in its or Lessor’s name) as Lessee may deem appropriate to effect a reduction of real estate or personal property assessments for those Impositions to be paid by Lessee, and Lessor, at Lessee’s
expense as aforesaid, shall fully cooperate with Lessee in such protest, appeal, or other action. Lessee hereby agrees to indemnify, defend, and hold harmless Lessor from and against any claims, obligations, and liabilities against or incurred by
Lessor in connection with such cooperation. Billings for reimbursement of personal property taxes by Lessee to Lessor shall be accompanied by copies of a bill therefor and payments thereof which identify the personal property with respect to which
such payments are made. Lessor, however, reserves the right to effect any such protest, appeal or other action and, upon notice to Lessee, shall control any such activity, which shall then go forward at Lessor’s sole expense. Upon such notice,
Lessee, at Lessor’s expense, shall cooperate fully with such activities. 
  
 4.2 NOTICE OF IMPOSITIONS. To the extent Lessor. is notified of any Impositions, Lessor shall give prompt Notice to Lessee of such Impositions payable by Lessee hereunder, provided that Lessor’s failure to give
any such Notice shall in no way diminish Lessee’s obligations hereunder to pay such Impositions, but such failure shall obviate any default hereunder for a reasonable time after Lessee receives Notice of any Imposition which it is obligated to
pay during the first taxing period applicable thereto. 
  
 4.3
ADJUSTMENT OF IMPOSITIONS. Impositions imposed in respect of the tax-fiscal period during which the Term terminates shall be adjusted and prorated between Lessor and Lessee, whether or not such Imposition is imposed before or after such termination,
and Lessee’s obligation to pay its prorated share thereof after termination shall survive such termination. 
  
 4.4 UTILITY CHARGES. Lessee will be solely responsible for obtaining and maintaining utility services to the Leased Property and will pay or cause to be
paid all charges for electricity, gas, oil, water, sewer and other utilities used in the Leased Property during the Term. 
  

 15 

 ARTICLE 5 
  

NO TERMINATION; ABATEMENT 
  
 5.1 NO TERMINATION, ABATEMENT, ETC. Except as otherwise specifically provided in this Lease, Lessee, to the extent permitted by law, shall remain bound by
this Lease in accordance with its terms and shall neither take any action without the written consent of Lessor to modify, surrender or terminate the same, nor seek nor be entitled to any abatement, deduction, deferment or reduction of the Rent, or
setoff against the Rent, nor shall the obligations of Lessee be otherwise affected by reason of (a) any damage to, or destruction of, any Leased Property or any portion thereof from whatever cause or any Taking of the Leased Property or any portion
thereof, (b) the lawful or unlawful prohibition of, or restriction upon, Lessee’s use of the Leased Property, or any portion thereof, or the interference with such use by any Person, corporation, partnership or other entity, or by reason of
eviction by paramount title, (c) any claim which Lessee has or might have against Lessor by reason of any default or breach of any warranty by Lessor under this Lease or any other agreement between Lessor and Lessee, or to which Lessor and Lessee
are parties, (d) any bankruptcy, insolvency, reorganization, composition, readjustment, liquidation, dissolution, winding up or other proceedings affecting Lessor or any assignee or transferee of Lessor, or (e) for any other cause whether similar or
dissimilar to any of the foregoing other than a discharge of Lessee from any such obligations as a matter of law. Lessee hereby specifically waives all rights, arising from any occurrence whatsoever, which may now or hereafter be conferred upon it
by law to (1) modify, surrender or terminate this Lease or quit or surrender the Leased Property or any portion thereof, or (2) entitle Lessee to any abatement, reduction, suspension or deferment of the Rent or other sums payable by Lessee
hereunder, except as otherwise specifically provided in this Lease. The obligations of Lessee hereunder shall be separate and independent covenants and agreements and the Rent and all other sums payable by Lessee hereunder shall continue to be
payable in all events unless the obligations to pay the same shall be terminated pursuant to the express provisions of this Lease or by termination of this Lease other than by reason of an Event of Default. 
  
 5.2 ABATEMENT PROCEDURES. In the event of a partial Taking as described in
SECTION 15.5, the Lease shall not terminate, but the Base Rent shall be abated in the manner and to the extent that is fair, just and equitable to both Lessee and Lessor, taking into consideration, among other relevant factors, the number of usable
rooms, the amount of square footage, or the revenues affected by such partial Taking. If Lessor and Lessee are unable to agree upon the amount of such abatement within thirty (30) days after such partial Taking, the matter may be submitted by either
party to a court of competent jurisdiction for resolution. 
  
 ARTICLE 6 
  
 PERSONAL PROPERTY;
LANDLORD’S LIEN 
  
 6.1 OWNERSHIP OF THE LEASED PROPERTY.
Lessee acknowledges that the Leased Property is the property of Lessor and that Lessee has only the right to the possession and use of the Leased Property upon the terms and conditions of this Lease. 
  
 6.2 LESSEE’S PERSONAL PROPERTY. At all times during the Term, Lessee
will maintain Inventory as is required to operate the Leased Property in the manner contemplated by this Lease. Lessee may (and shall as provided hereinbelow), at its expense, install, affix or assemble or place on any parcels of the Land or in any
of the Improvements, any items of personal property (including Inventory) owned by Lessee (the “LESSEE’S PERSONAL PROPERTY”). Lessee may, subject to the conditions set forth herein, remove any of Lessee’s Personal Property upon
the expiration or any prior termination of the Term. All of Lessee’s Personal Property, other than Inventory, not removed by Lessee within ten days following the expiration or earlier termination of the Term shall be considered abandoned by
Lessee and may be appropriated, sold, destroyed or otherwise disposed of by Lessor without first giving Notice thereof to Lessee, without any payment to Lessee and without any obligation to account therefor. Lessee will, at its expense, restore the
Leased Property to the condition required by SECTION 9.1(d), including repair of all damage to the Leased Property caused by the removal of Lessee’s Personal Property, whether effected by Lessee or Lessor. 
  
 6.3 LESSOR’S LIEN. To the fullest extent permitted by applicable law,
Lessor is granted a lien and security interest on all of Lessee’s Personal Property now or hereinafter placed in or upon the Leased Property, and such lien and security interest shall remain attached to Lessee’s Personal Property until
payment in full of all Rent and satisfaction of all of Lessee’s obligations hereunder; provided, however, Lessor shall subordinate its lien and security interest to that of any non-Affiliate of Lessee which finances such Lessee’s Personal
Property or any non-Affiliate conditional seller of such Lessee’s Personal Property, the terms and conditions of such subordination to be 
  

 16 

 satisfactory to Lessor in the exercise of reasonable discretion. Lessee shall, upon the request of Lessor, execute such
financing statements or other documents or instruments reasonably requested by Lessor to perfect the lien and security interests herein granted. 
  
 ARTICLE 7 
  
 CONDITIONS; USE 
  
 7.1 CONDITION OF THE LEASED PROPERTY. Lessee acknowledges receipt and delivery of possession of the Leased Property. Lessee has examined and otherwise has knowledge of the condition of the Leased Property and has
found the same to be satisfactory for its purposes hereunder. LESSEE IS LEASING THE LEASED PROPERTY “AS IS” IN ITS PRESENT CONDITION. LESSEE WAIVES. ANY CLAIM OR ACTION AGAINST LESSOR IN RESPECT OF THE CONDITION OF THE LEASED PROPERTY. LESSOR MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, IN RESPECT OF THE LEASED PROPERTY, OR ANY PART
THEREOF, EITHER AS TO ITS FITNESS FOR USE, DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE OR OTHERWISE, AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, LATENT OR PATENT, IT BEING AGREED THAT ALL SUCH RISKS ARE TO BE BORNE BY LESSEE.
LESSEE ACKNOWLEDGES THAT THE LEASED PROPERTY HAS BEEN INSPECTED BY LESSEE AND IS SATISFACTORY TO IT. Provided, however, to the extent permitted by law, Lessor hereby assigns to Lessee all of Lessor’s rights to-proceed against any predecessor in
title other than Lessee for breaches of warranties or representations or for defects in the Leased Property. Lessor shall fully cooperate with Lessee in the prosecution of any such claim, in Lessor’s or Lessee’s name, all at Lessee’s
sole cost and expense. Lessee hereby agrees to indemnify, defend and hold harmless Lessor from and against any claims, obligations and liabilities against or incurred by Lessor in connection with such cooperation. 
  
 7.2 USE OF THE LEASED PROPERTY. 
  
 (a) Lessee covenants that it will proceed with all due
diligence and will exercise its best efforts to obtain and to maintain all approvals needed to use and operate the Leased Property and the Facility under applicable local, state and federal law. 
  
 (b) Lessee shall use or cause to be used the Leased Property
only as a hotel facility, and for such other uses as may be necessary or incidental to such use or such other use as otherwise approved by Lessor (the “PRIMARY INTENDED USE”). Lessee shall not use the Leased Property or any portion thereof
for any other use without the prior written consent of Lessor, which consent may be granted, denied or conditioned in Lessor’s sole discretion. No use shall be made or permitted to be made of the Leased Property, and no acts shall be done,
which will cause the cancellation or increase the premium of any insurance policy covering the Leased Property or any part thereof (unless another adequate policy satisfactory to Lessor is available and Lessee pays any premium increase), nor shall
Lessee sell or permit to be kept, used or sold in or about the Leased Property any article which may be prohibited by law or fire underwriter’s regulations. Lessee shall, at its sole cost, comply with all of the requirements pertaining to the
Leased Property of any insurance board, association, organization or company necessary for the maintenance of insurance, as herein provided, covering the Leased Property and Lessee’s Personal Property. 
  
 (c) Subject to the provisions of ARTICLES 4, 15, 20 and 21,
Lessee covenants and agrees that during the Term it will (1) operate or cause to operate continuously the Leased Property as a hotel facility, (2) keep in full force and effect and comply with all the provisions of the Franchise Agreement, (3) not
terminate or amend the Franchise Agreement without the consent of Lessor, (4) maintain appropriate certifications and licenses for such use and (5) will seek to maximize the gross revenues generated therefrom consistent with sound business
practices. 
  
 (d) Lessee shall not commit or
suffer to be committed any waste on the Leased Property, or in the Facility, nor shall Lessee cause or permit any nuisance thereon. 
  
 (e) Lessee shall neither suffer nor permit the Leased Property or any portion thereof, or Lessee’s Personal Property, to be used in
such a manner as (1) might reasonably tend to impair Lessor’s (or Lessee’s, as the case may be) title thereto or to any portion thereof, or (2) may reasonably make possible a claim or claims of 
  

 17 

 adverse usage or adverse possession by the public, as such, or of implied dedication of the Leased Property or any
portion thereof, except as necessary in the ordinary and prudent operation of the Facility on the Leased Property. 
  
 7.3 LESSOR TO GRANT EASEMENTS, ETC. Lessor will, from time to time, so long as no Event of Default has occurred and is continuing, at the request of
Lessee and at Lessee’s cost and expense (but subject to the approval of Lessor, which approval shall not be unreasonably withheld or delayed), (a) grant easements and other rights in the nature of easements with respect to the Leased Property
to third parties, (b) release existing easements or other rights in the nature of easements which are for the benefit of the Leased Property, (c) dedicate or transfer unimproved portions of the Leased Property for road, highway or other public
purposes, (d) execute petitions to have the Leased Property annexed to any municipal corporation or utility district, (e) execute amendments to any covenants and restrictions affecting the Leased Property and (f) execute and deliver to any person
any instrument appropriate to confirm or effect such grants, releases, dedications, transfers, petitions and amendments (to the extent of its interests in the Leased Property), but only upon delivery to Lessor of an Officer’s Certificate
stating that such grant, release, dedication, transfer, petition or amendment is not detrimental to the proper conduct of the business of Lessee on the Leased Property and does not materially reduce the value of the Leased Property. 
  
 ARTICLE 8 
  
 COMPLIANCE WITH APPLICABLE LAWS 
  
 8.1 COMPLIANCE WITH LEGAL AND INSURANCE REQUIREMENTS, ETC. Subject to SECTION
8.3(b) below and ARTICLE 12 relating to permitted contests, and subject further to the obligations of Lessor with respect to Capital Improvements as set forth in SECTION 9.1(b), Lessee, at its expense, will promptly (a) comply with all applicable
Legal Requirements and Insurance Requirements in respect of the use, operation, maintenance, repair and restoration of the Leased Property, and (b) procure, maintain and comply with all appropriate licenses and other authorizations required for any
use of the Leased Property and Lessee’s Personal Property then being made, and for the proper erection, installation, operation and maintenance of the Leased Property or any part thereof. 
  
 8.2 LEGAL REQUIREMENT COVENANTS. Subject to SECTION 8.3(b) below, Lessee
covenants and agrees that the Leased Property and Lessee’s Personal Property shall not be used for any unlawful purpose, and that Lessee shall not permit or suffer to exist any unlawful use of the Leased Property by others. Lessee shall acquire
and maintain all appropriate licenses, certifications, permits and other authorizations and approvals needed to operate the Leased Property in its customary manner for the Primary Intended Use, and any other lawful use conducted on the Leased
Property as may be permitted from time to time hereunder. Lessee further covenants and agrees that Lessee’s use of the Leased Property and maintenance, alteration, and operation of the same, and all parts thereof, shall at all times conform to
all Legal Requirements, unless the same are finally determined by a court of competent jurisdiction to be unlawful (and Lessee shall cause all such sub-tenants, invitees or others to so comply with all Legal Requirements). Lessee may, however, upon
prior Notice to Lessor, contest the legality or applicability of any such Legal Requirement or any licensure or certification decision if Lessee maintains such action in good faith, with due diligence, without prejudice to Lessor’s rights
hereunder, and at Lessee’s sole expense. If by the terms of any such Legal Requirement compliance therewith pending the prosecution of any such proceeding may legally be delayed without the incurrence of any lien, charge or liability of any
kind against the Facility or Lessee’s leasehold interest therein and without subjecting Lessee or Lessor to any liability, civil or criminal, for failure so to comply therewith, Lessee may delay compliance therewith until the final
determination of such proceeding. If any lien, charge or civil or criminal liability would be incurred by reason of any such delay, Lessee, on the prior written consent of Lessor, which consent shall not be unreasonably withheld, may nonetheless
contest as aforesaid and delay as aforesaid provided that such delay would not subject Lessor to criminal liability and Lessee both (a) furnishes to Lessor security reasonably satisfactory to Lessor against any loss or injury by reason of such
contest or delay and (b) prosecutes the contest with due diligence and in good faith. 
  
 8.3 ENVIRONMENTAL COVENANTS. Lessor and Lessee (in addition to, and not in diminution of, Lessee’s covenants and undertakings in SECTIONS 8.1 AND 8.2 hereof) covenant and agree as follows: 
  
 (a) At all times hereafter until such time as all
liabilities, duties or obligations of Lessee to the Lessor under the Lease have been satisfied in full, Lessee shall fully comply with all Environmental Laws applicable 
  

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 to the Leased Property and the operations thereon unless caused by the acts or grossly negligent failures
to act of Lessor. Lessee agrees to give Lessor written notice of the following, promptly after Lessee receives knowledge thereof: (1) all Environmental Liabilities; (2) all pending, threatened or anticipated Proceedings, and all notices, demands,
requests or investigations, relating to any Environmental Liability or relating to the issuance, revocation or change in any Environmental Authorization required for operation of the Leased Property; (3) all Releases at, on, in, under or in any way
affecting the Leased Property, or any Release at, on, in or under any property adjacent to the Leased Property; and (4) all facts, events or conditions that could reasonably lead to the occurrence of any of the above-referenced matters. 

 
 (b) Lessee hereby agrees to defend, indemnify and save
harmless any and all Lessor Indemnified Parties from and against any and all Environmental Liabilities except to the extent caused by the willful misconduct or gross negligence of Lessor. 
  
 (c) Lessor hereby agrees to defend, indemnify and save
harmless any and all Lessee Indemnified Parties from and against any and all Environmental Liabilities caused by the willful misconduct or gross negligence of Lessor. 
  
 (d) If any Proceeding is brought against any Indemnified Party in respect of an Environmental Liability with
respect to which such Indemnified Party may claim indemnification hereunder the Indemnifying Party, upon request, shall at its sole expense resist and defend such Proceeding, or cause the same to be resisted and defended by counsel designated by the
Indemnified Party and approved by the Indemnifying Party, which approval shall not be unreasonably withheld; provided, however, that such approval shall not be required in the case of defense by counsel designated by any insurance company
undertaking such defense pursuant to any applicable policy of insurance. Each Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such
counsel will be at the sole expense of such Indemnified Party unless such counsel has been approved by the Indemnifying Party, which approval shall not be unreasonably withheld. The Indemnifying Party shall not be liable for any settlement of any
such Proceeding made without its consent, which shall not be unreasonably withheld, but if settled with the consent of the Indemnifying Party, or if settled without its consent (if its consent shall be unreasonably withheld), or if there be a final,
nonappealable judgment for an adversary party in any such Proceeding, the Indemnifying Party shall indemnify and hold harmless the Indemnified Parties from and against any liabilities incurred by such Indemnified Parties by reason of such settlement
or judgement. 
  
 (e) At any time any Indemnified
Party has reason to believe circumstances exist which could reasonably result in an Environmental Liability, upon reasonable prior written notice to Lessee stating such Indemnified Party’s basis for such belief, an Indemnified Party shall be
given immediate access to the Leased Property (including, but not limited to, the right to enter upon, investigate, drill wells, take soil borings, excavate, monitor, test, cap and use available land for the testing of remedial technologies),
Lessee’s employees, and to all relevant documents and records regarding the matter as to which a responsibility, liability or obligation is asserted or which is the subject of any Proceeding; provided that such access may be conditioned or
restricted as may be reasonably necessary to ensure compliance with law and the safety of personnel and facilities or to protect confidential or privileged information. All Indemnified Parties requesting such immediate access and cooperation shall
endeavor to coordinate such efforts to result in as minimal interruption of the operation of the Leased Property as practicable. 
  
 (f) The indemnification rights and obligations provided for in this ARTICLE 8 shall be in addition to any indemnification rights and
obligations provided for elsewhere in this Lease. 
  
 (g) The indemnification rights and obligations provided for in this ARTICLE 8 shall survive the termination of this Lease. 
  
 For purposes of this SECTION 8.3, all amounts for which any Indemnified Party seeks indemnification shall be computed net of (a) any actual income tax
benefit resulting therefrom to such Indemnified Party, (b) any insurance proceeds received (net of tax effects) with respect thereto, and (c) any amounts recovered (net of tax effects) from any third parties based on claims the Indemnified Party has
against 
  

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 such third parties which reduce the damages that would otherwise be sustained; provided that in all cases, the timing of
the receipt or realization of insurance proceeds or income tax benefits or recoveries from third parties shall be taken into account in determining the amount of reduction of damages. Each Indemnified Party agrees to use its reasonable efforts to
pursue, or assign to Lessee or Lessor, as the case, may be, any claims or rights it may have against any third party which would materially reduce the amount of damages otherwise incurred by such Indemnified Party. 
  
 Notwithstanding anything to the contrary contained in this Lease, if Lessor
shall become entitled to the possession of the Leased Property by virtue of the termination of the Lease or repossession of the Leased Property, then Lessor may assign its indemnification rights under SECTION 8.3 of this Lease (but not any other
rights hereunder) to any Person to whom the Lessor subsequently transfers the Leased Property, subject to the following conditions and limitations, each of which shall be deemed to be incorporated into the terms of such assignment, whether or not
specifically referred to therein: 
  
 (1) The
indemnification rights referred to in this section may be assigned only if a known Environmental Liability then exists or if a Proceeding is then pending or, to the knowledge of Lessee or Lessor, then threatened with respect to the Leased Property;

  
 (2) Such indemnification rights shall be
limited to Environmental Liabilities relating to or specifically affecting the Leased Property; and 
  
 (3) Any assignment of such indemnification rights shall be limited to the immediate transferee of Lessor, and shall not extend to any such
transferee’s successors or assigns. 
  
 ARTICLE 9

  
 MAINTENANCE AND REPAIRS 
  
 9.1 MAINTENANCE AND REPAIR. 
  
 (a) Except as provided in SECTION 9.1(b) or ARTICLES 8 OR 9,
Lessee, at its sole expense, will keep the Leased Property in good order and repair except for ordinary wear and tear (whether or not the need for such repairs occurred as a result of Lessee’s use, any prior use, the elements or the age of the
Leased Property, or any portion thereof), and, with reasonable promptness, make all necessary and appropriate repairs, replacements, and improvements thereto of every kind and nature, whether interior or exterior, ordinary or extraordinary, foreseen
or unforeseen or arising by reason of a condition existing prior to the commencement of the Term of this Lease (concealed or otherwise), or required by any governmental agency having jurisdiction over the Leased Property. Lessee, however, shall be
permitted to prosecute claims against Lessor’s predecessors in title for breach of any representation or warranty or for any latent defects in the Leased Property to be maintained by Lessee unless Lessor is already diligently pursuing such a
claim. All repairs shall, to the extent reasonably achievable, be at least equivalent in quality to the original work. Lessee will not take or omit to take any action, the taking or omission of which might materially impair the value or the
usefulness of the Leased Property or any part thereof for its Primary Intended Use. 
  
 (b) Lessee shall be required to make (at the sole cost and expense of Lessor) all Capital Expenditures required in connection with (i)
Emergency Situations, (ii) Legal Requirements, (iii) maintenance of the Franchise Agreement, (iv) the performance by Lessee of its obligations under this Lease, and (v) other additions to the Leased Property as it may reasonably deem appropriate and
that are permitted hereunder during the Term. 
  
 (c) Lessee will, upon the expiration or prior termination of the Term, vacate and surrender the Leased Property to Lessor in the condition in which the Leased Property was originally received from Lessor, except as repaired, rebuilt,
restored, altered or added to as permitted or required by the provisions of this Lease and except for ordinary wear and tear (subject to the obligation of Lessee to maintain the Leased Property in good order and repair, as would a prudent owner,
during the entire Term of the Lease, to the extent required in SECTION 9.1(a)), or damage by casualty or Condemnation (subject to the obligations of Lessee to restore or repair as set forth in the Lease.) 
  

 20 

 9.2 ENCROACHMENTS, RESTRICTIONS, ETC. If any of the Improvements, at any time, materially encroach upon
any property, street or right-of-way adjacent to the Leased Property, or violate the agreements or conditions contained in any lawful restrictive covenant or other agreement affecting the Leased Property, or any part thereof, or impair the rights of
others under any easement or right-of-way to which the Leased Property is subject, then promptly upon the request of Lessor or at the behest of any person affected by any such encroachment, violation or impairment, Lessee shall, at its expense,
subject to its right to contest the existence of any encroachment, violation or impairment and in such case, in the event of an adverse final determination, either (a) obtain valid and effective waivers or settlements of all claims, liabilities and
damages resulting from each such encroachment, violation or impairment, whether the same shall affect Lessor or Lessee or (b) make such changes in the Improvements, and take such other actions, as Lessee in the good faith exercise of its judgment
deems reasonably practicable to remove such encroachment, and to end such violation or impairment, including, if necessary, the alteration of any of the Improvements, and in any event take all such actions as may be necessary in order to be able to
continue the operation of the Improvements for the Primary Intended Use substantially in the manner and to the extent the Improvements were operated prior to the assertion of such violation, impairment or encroachment. Any such alteration shall be
made in conformity with the applicable requirements of ARTICLE 10. Lessee’s obligations under this SECTION 9.2 shall be in addition to and shall in no way discharge or diminish any obligation of any insurer under any policy of title or other
insurance held by Lessor. 
  
 ARTICLE 10 
  
 ALTERATIONS 
  
 10.1 ALTERATIONS. Lessor shall have the right to make additions,
modifications or improvements to the Leased Property from time to time as Lessor, in its discretion, may deem to be desirable for the permitted uses and purposes of the Leased Property, provided that such action will not significantly alter the
character or purposes or significantly detract from the value or operating efficiency thereof and will not significantly impair the revenue-producing capability of the Leased Property or adversely affect the ability of the Lessee to comply with the
provisions of this Lease. The cost of such additions, modifications or improvements to the Leased Property shall be paid by Lessor, and all such additions, modifications and improvements shall, be included under the terms of this Lease and shall at
all times be the property of Lessor. 
  
 ARTICLE 11

  
 PROHIBITED LIENS AND ENCUMBRANCES 
  
 11.1 LIENS. Subject to the provision of ARTICLE 12 relating to permitted
contests, Lessee will not directly or indirectly create or allow to remain and will promptly discharge at its expense any lien, encumbrance, attachment, title retention agreement or claim upon the Leased Property or any attachment, levy, claim or
encumbrance in respect of the Rent, not including, however, (a) this Lease, (b) the matters, if any, included as exceptions in the title policy insuring Lessor’s interest in the Leased Property, (c) restrictions, liens and other encumbrances
which are consented to in writing by Lessor or any easements granted pursuant to the provisions of SECTION 7.3 of this Lease, (d) liens for those taxes upon Lessor which Lessee is not required to pay hereunder, (e) subleases permitted by ARTICLE 22
hereof, (f) liens for Impositions or for sums resulting from noncompliance with Legal Requirements so long as (1) the same are not yet payable or are payable without the addition of any fine or penalty or (2) such liens are in the process of being
contested, as permitted by ARTICLE 12, (g) liens of mechanics, laborers, materialmen, suppliers or vendors for sums either disputed or not yet due provided that (1) the payment of such sums shall not be postponed under any related contract for more
than sixty (60) days after the completion of the action giving rise to such lien and such reserve or other appropriate provisions as shall be required by law or generally accepted accounting principles shall have been made therefor or (2) any such
liens are in the process of being contested as permitted by ARTICLE 12 hereof, and (h) any liens which are the responsibility of Lessor pursuant to the provisions of ARTICLE 4 of this Lease. 
  

 21 

 ARTICLE 12 
  
 PERMITTED CONTESTS 
  
 12.1 PERMITTED CONTESTS. Lessee shall have the right to contest the amount or validity of any Imposition to be paid by Lessee or any Legal Requirement or
Insurance Requirement or any lien, attachment, levy, encumbrance, charge or claim (“CLAIMS”) not otherwise permitted by ARTICLE 11, by appropriate legal proceedings in good faith and with due diligence (but this shall not be deemed or
construed in any way to relieve, modify or extend Lessee’s covenants to pay or its covenants to cause to be paid any such charges at the time and in the manner as in this ARTICLE 12 provided), on condition, however, that such legal proceedings
shall not operate to relieve Lessee from its obligations hereunder and shall not cause the sale or risk the loss of the Leased Property, or any part thereof, or cause Lessor or Lessee to be in default under any mortgage, deed of trust or security
deed encumbering the Leased Property or any interest therein. Upon the request of Lessor, Lessee shall either (a) provide a bond or other assurance reasonably satisfactory to Lessor that all Claims which may be assessed against the Leased Property
together with interest and penalties, if any, thereon will be paid, or (b) deposit within the time otherwise required for payment with a bank or trust company as trustee upon terms reasonably satisfactory to Lessor, as security for the payment of
such Claims, money in an amount sufficient to pay the same, together with interest and penalties in connection therewith, as to all Claims which may be assessed against or become a Claim on the Leased Property, or any part thereof, in said legal
proceedings. Lessee shall furnish Lessor and any lender of Lessor with reasonable evidence of such deposit within five days of the same. Lessor agrees to join in any such proceedings if the same be required to legally prosecute such contest of the
validity of such Claims; provided, however, that Lessor shall not thereby be subjected to any liability for the payment of any costs or expenses in connection with any proceedings brought by Lessee; and Lessee covenants to indemnify and save
harmless Lessor from any such costs or expenses. Lessee shall be entitled to any refund of any Claims and such charges and penalties or interest thereon which have been paid by Lessee or paid by Lessor and for which Lessor has been fully reimbursed.
In the event that Lessee fails to pay any Claims when due or to provide the security therefor as provided in this paragraph and to diligently prosecute any contest of the same, Lessor may, upon ten days advance Notice to Lessee, pay such charges
together with any interest and penalties and the same shall be repayable by Lessee to Lessor as Additional Charges at the next Payment Date provided for in this Lease. Provided, however, that should Lessor reasonably determine that the giving of
such Notice would risk loss to the Leased Property or cause damage to Lessor, then Lessor shall give such Notice as is practical under the circumstances. Lessor reserves the right to contest any of the Claims at its expense not pursued by Lessee.
Lessor and Lessee agree to cooperate in coordinating the contest of any Claims. 
  
 ARTICLE 13 
  
 INSURANCE
REQUIREMENTS 
  
 13.1 GENERAL INSURANCE REQUIREMENTS. During
the Term of this Lease, Lessee and/or Lessor, as applicable shall at all times keep the Leased Property insured (or cause the Leased Property to be insured) with the kinds and amounts of insurance described below. This insurance shall be written by
companies authorized to issue insurance in the State. The policies must name Lessor and/or Lessee, as the insured or as an additional named insured, as the case may be. Losses shall be payable to Lessor or Lessee as provided in this Lease. Any loss
adjustment shall require the written consent of Lessor and Lessee, each acting reasonably and in good faith. Evidence of insurance shall be deposited with Lessor (with a copy to Lessee). The policies on the Leased Property, including the
Improvements, Fixtures and Lessee’s Personal Property, shall include: 
  
 (a) To be paid for by Lessor as primary insured, with Lessee (lender or ground lessor, as applicable) as additional insured: 
  
 (1) Building insurance on the “SPECIAL FORM” (formerly “All Risk” form) (including earthquake and flood in reasonable
amounts as determined by Lessor) in an amount not less than 100% of the then full replacement cost thereof (as defined in SECTION 13.2) or such other amount which is acceptable to Lessor, and personal property insurance on the “SPECIAL
FORM” in the full amount of the replacement cost thereof; 
  
 (2) Insurance for loss or damage (direct and indirect) from steam boilers, pressure vessels or similar apparatus, now or hereafter installed in the Facility, in the minimum amount of $5,000,000 or in such greater
amounts as are then customary or as may be reasonably requested by Lessor from time to time; 
  

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 (b) To be paid for by Lessee as primary insured, with Lessor, franchisor and Manager, as
required, as additional insured: 
  
 (1) Personal
property insurance on the “SPECIAL FORM” in the full amount of the replacement cost thereof for any personal property owned by Lessee; 
  
 (2) Loss of income insurance on the “SPECIAL FORM”, in the amount of one year of the sum of Base Rent plus Percentage Rent
(based on the last Lease Year of operation or, to the extent the Leased Property has not been operated for an entire 12-month Lease Year, based on prorated Percentage Rent) for the benefit of Lessor, and business interruption insurance on the
“SPECIAL FORM” in the amount of one year of gross operating profit, for the benefit of Lessee; Commercial general liability insurance, with amounts not less than $1,000,000 combined single limit for each occurrence and $2,000,000.00 for
the aggregate of all occurrences within each policy year, as well as excess liability (umbrella) insurance with limits of at least $10,000,000 per occurrence, covering each of the following: bodily injury, death, or property damage liability per
occurrence, personal and advertising injury, general aggregate, products and completed operations, with respect to Lessor, and “all risk legal liability” (including liquor law or “dram shop” liability if liquor or alcoholic
beverages are served on the Leased Property) with respect to Lessor and Lessee; 
  
 (c) To be paid for by Lessee for the benefit of Manager as primary insured, with Lessor and Lessee as additional insured: 
  
 (1) Automobile insurance on vehicles operating in
conjunction with the Facility with limits of liability of at least $1,000,000.00 combined, single limit coverage; 
  
 (2) Workers’ compensation and employer’s liability insurance as may be required under applicable laws to the extent necessary
to protect Lessor, Lessee, and the Leased Property against workers’ compensation claims covering all employees at the Facility, with such deductible limits or self insured retentions as may be established from time to time by Lessee and/or
it’s Manager; 
  
 (3) Fidelity bonds with
limits and deductibles as may be reasonably requested by Lessor, covering Manager’s employees in job classifications normally bonded under prudent hotel management practices in the United States or otherwise required by law; and 
  
 (d) Such other insurance covering such other hazards and in
such amounts as may be customary for comparable properties in the area of the Leased Property to be paid for and carried by Lessor or Lessee, as customary, and which is available from insurance companies, insurance pools or other appropriate
companies authorized to do business in the State at rates which are economically practicable in relation to the risks covered as may be reasonably requested by Lessor. 
  
 13.2 REPLACEMENT COST. The term “FULL REPLACEMENT COST” as used herein shall mean the actual replacement cost of
the Leased Property requiring replacement from time to time including an increased cost of construction endorsement, if available, and the cost of debris removal. In the event either party believes that full replacement cost (the then-replacement
cost less such exclusions) has increased or decreased at any time during the Term, it shall have the right to have such full replacement cost re-determined. 
  
 13.3 WAIVER OF SUBROGATION. All insurance policies carried by Lessor or Lessee covering the Leased Property, the Fixtures, the Facility or Lessee’s
Personal Property, including, without limitation, contents, fire and casualty insurance, shall expressly waive any right of subrogation on the part of the insurer against the other party. The parties hereto agree that their policies will include
such waiver clause or endorsement so long as the same are obtainable without extra cost, and in the event of such an extra charge the other party, at its election, may pay the same, but shall not be obligated to do so. 
  
 13.4 FORM SATISFACTORY, ETC. All of the policies of insurance referred to in
this ARTICLE 13 shall be written in a form, with deductibles and by insurance companies satisfactory to Lessor and shall satisfy the requirements of the Franchise Agreement. Lessee shall pay all of the premiums required for any insurance required

  

 23 

 to be carried by Lessee hereunder, and shall deliver such policies or certificates thereof to Lessor prior to their
effective date (and, with respect to any renewal policy, thirty (30) days prior to the expiration of the existing policy), and in the event of the failure by Lessee either to effect such insurance as herein called for or to pay the premiums
therefor, or to deliver such policies or certificates thereof to Lessor at the times required, Lessor shall be entitled, but shall have no obligation, after ten (10) days’ Notice to Lessee, to effect such insurance and pay the premiums
therefor, and to be reimbursed for any premium or premiums upon written demand therefore. Each insurer mentioned in this ARTICLE 13 shall agree, by endorsement to the policy or policies issued by it, or by independent instrument furnished to Lessee,
that it will give to Lessor thirty (30) days’ written notice before the policy or policies in question shall be materially altered, allowed to expire or canceled. 
  
 13.5 INCREASE IN LIMITS. If either Lessor or Lessee at any time deems the limits of the personal injury or property damage
under the comprehensive commercial general liability insurance then carried to be either excessive or insufficient, Lessor or Lessee shall endeavor in good faith to agree on the proper and reasonable limits for such insurance to be carried and such
insurance shall thereafter be carried with the limits thus agreed on until further change pursuant to the provisions of this Section. 
  
 13.6 BLANKET POLICY. Notwithstanding anything to the contrary contained in this ARTICLE 13, Lessee may bring the insurance provided for herein within the
coverage of a so-called blanket policy or policies of insurance carried and maintained by Lessee or Manager; provided, however, that the coverage afforded to Lessor and Lessee will not be reduced or diminished or otherwise be different from that
which would exist under a separate policy meeting all other requirements of this Lease by reason of the use of such blanket policy of insurance, and provided further that the requirements of this ARTICLE 13 are otherwise satisfied. 
  
 13.7 NO SEPARATE INSURANCE. Lessee shall not on Lessee’s own initiative
or pursuant to the request or requirement of any third party, take out separate insurance concurrent in form or contributing in the event of loss with that required in this ARTICLE 13 to be furnished, or increase the amount of any then existing
insurance by securing an additional policy or additional policies, unless all parties having an insurable interest in the subject matter of the insurance, including in all cases Lessor, are included therein as additional insureds, and the loss is
payable under such additional separate insurance in the same manner as losses are payable under this Lease. Lessee shall immediately notify Lessor that Lessee has obtained any such separate insurance or of the increasing of any of the amounts of the
then existing insurance. 
  
 ARTICLE 14 
  
 INSURANCE PROCEEDS 
  
 14.1 INSURANCE PROCEEDS. Subject to the provisions of SECTION 14.6 and the
terms of any lender mortgage, all proceeds payable by reason of any loss or damage to the Leased Property, or any portion thereof, and insured under any policy of insurance required by ARTICLE 13 of this Lease shall be paid to Lessor and held by
Lessor in an interest-bearing account, shall be made available, if applicable, for reconstruction or repair, as the case may be, of any damage to or destruction of the Leased Property, or any portion thereof, and, if applicable, shall be paid out by
Lessor from time to time for the reasonable costs of such reconstruction or repair upon satisfaction of reasonable terms and conditions specified by Lessor. Any excess proceeds of insurance remaining after the completion of the restoration or
reconstruction of the Leased Property shall be paid to Lessor. If neither Lessor nor Lessee is required or elects to repair and restore, all insurance proceeds shall be retained-by Lessor. All salvage resulting from any risk covered by insurance
shall belong to Lessor. 
  
 14.2 RECONSTRUCTION IN THE EVENT OF
DAMAGE OR DESTRUCTION COVERED BY INSURANCE. 
  
 (a) Except as provided in SECTION 14.6, if during the Term the Leased Property is totally or partially destroyed by a risk covered by the insurance described in ARTICLE 13, whether or not such damage or destruction renders the Facility
Unsuitable for its Primary Intended Use, Lessee shall be obligated, but only to the extent of any insurance proceeds made available to Lessee and any other sums advanced by Lessor pursuant to the next sentence, to restore the Facility to
substantially the same condition as existed immediately before the damage or destruction and otherwise in accordance with the terms of the Lease. If the insurance proceeds are not adequate to 
  

 24 

 restore the Facility to that condition, each of Lessor and Lessee shall have the right to terminate this
Lease, without in any way affecting any other leases in effect between Lessor and Lessee, by giving Notice to the other and all insurance proceeds shall be retained by Lessor; provided, however, that, if such termination is by Lessee, Lessor shall
have the right, in its sole discretion, to nullify the termination and keep this Lease in full force by providing, within thirty (30) days after Lessee’s Notice of termination, a Notice to Lessee of Lessor’s unconditional, legally binding
obligation to be responsible for all restoration costs in excess of the insurance proceeds. If this Lease is not terminated and Lessee restores the Facility, the insurance proceeds, and any other sums made available by Lessor as aforesaid, shall be
paid out by Lessor from time to time for the reasonable costs of such restoration upon satisfaction of reasonable terms and conditions, and any excess proceeds remaining after such restoration shall be retained by Lessor. 
  
 (b) Notwithstanding the provisions of SECTION 14.2(a) above,
if Lessee cannot within a reasonable time obtain all necessary government approvals, including building permits, licenses and conditional use permits, after diligent efforts to do so, to perform all required repair and restoration work and to
operate the Facility for its Primary Intended Use in substantially the same manner as that existing immediately prior to such damage or destruction and otherwise in accordance with the terms of the Lease, either Lessor or Lessee may terminate this
Lease by providing Notice to the other party, without in any way affecting any other Leases then in effect between Lessor and Lessee. 
  
 14.3 RECONSTRUCTION IN THE EVENT OF DAMAGE OR DESTRUCTION NOT COVERED BY INSURANCE. Except as provided in SECTION 14.6, if during the Term the Facility is
totally or materially destroyed by a risk not covered by the insurance described in ARTICLE 13, whether or not such damage or destruction renders the Facility Unsuitable for its Primary Intended Use, the provisions of SECTION 14.2 applicable to
casualties for which insurance proceeds are inadequate shall govern. 
  
 14.4 LESSEE’S PROPERTY. All insurance proceeds payable by reason of any loss of or damage to any of Lessee’s Personal Property shall be paid to Lessee; provided, however, no such payments shall diminish or reduce the insurance
payments otherwise payable to or for the benefit of Lessor hereunder. 
  
 14.5 ABATEMENT OF RENT. Any damage or destruction due to casualty notwithstanding, this Lease shall remain in full force and effect (unless otherwise terminated as set forth hereinabove) and Lessee’s obligation to make rental payments
and to pay Rent required by this Lease shall remain unabated by any damage or destruction which does not result in a reduction of Gross Revenues. If and to the extent that any damage or destruction results in a reduction of Gross Revenues which
would otherwise be realizable from the operation of the Facility, then Lessor shall receive all loss of income insurance and Lessee shall have no obligation to pay Rent in excess of (i) the amount of Percentage Rent, if any, realizable from Gross
Revenues generated by the operation of the Leased Property during the existence of such damage or destruction and (ii) the difference between the then Base Rent and the amount of insurance received by Lessor applicable to Base Rent. 
  
 14.6 DAMAGE NEAR END OF TERM. Notwithstanding any provisions of SECTION 14.2
OR 14.3 appearing to the contrary, if damage to or destruction of the Facility unsuitable for its Primary Intended Use occurs during the last twenty-four (24) months of the Term, then Lessee shall have the right to terminate this Lease by giving
written notice to Lessee within thirty (30) days after the date of damage or destruction, whereupon all accrued Rent shall be paid immediately, and this Lease shall automatically terminate five days after the date of such notice. 
  
 14.7 WAIVER. Lessee hereby waives any statutory rights of termination that
may arise by reason of any damage or destruction of the Facility that Lessor is obligated to restore or may restore under any of the provisions of this Lease. 
  

14.8 TERMINATION FEES. Notwithstanding anything appearing contrary in this ARTICLE 14, if this Lease is terminated by Lessor by reason of damage to the
Facility due to a casualty, then Lessor agrees to pay Lessee, within forty-five (45) says of said termination, the termination fees, as applicable, under the terms of the Management Agreement. No termination fees are payable in the event of
Unavoidable Delay (except for a casualty as set forth hereinabove) or Condemnation. 
  

 25 

 ARTICLE 15 
  
 CONDEMNATION; TAKING 
  
 15.1 DEFINITIONS. 
  
 (a) “CONDEMNATION” means a Taking resulting from (1) the exercise of any governmental power, whether by legal proceedings or
otherwise, by a Condemnor, and (2) a voluntary sale or transfer by Lessor to any Condemnor, either under threat of condemnation or while legal proceedings for condemnation are pending. 
  
 (b) “DATE OF TAKING” means the date the Condemnor has the right to possession of the property
being condemned. 
  
 (c) “AWARD” means
all compensation, sums or anything of value awarded, paid or received on a total or partial Condemnation. 
  
 (d) “CONDEMNOR” means any public or quasi-public authority, or private corporation or individual, having the power of
Condemnation. 
  
 15.2 PARTIES’ RIGHTS AND OBLIGATIONS. If
during the Term there is any Condemnation of all or any part of the Leased Property or any interest in this Lease, the rights and obligations of Lessor and Lessee shall be determined by this ARTICLE 15. 
  
 15.3 TOTAL TAKING. If title to the fee of the whole of the Leased Property is
condemned by any Condemnor, this Lease shall cease and terminate as of the Date of Taking by the Condemnor. If title to the fee of less than the whole of the Leased Property is so taken or condemned, which nevertheless renders the Leased Property
Unsuitable or Uneconomic for its Primary Intended Use, Lessee and Lessor shall each have the option, by notice to the other, at any time prior to the Date of Taking, to terminate this Lease as of the Date of Taking. Upon such date, if such Notice
has been given, this Lease shall thereupon cease and terminate. All Base Rent, Percentage Rent and Additional Charges paid or payable by Lessee hereunder shall be apportioned as of the Date of Taking, and Lessee shall promptly pay Lessor such
amounts. 
  
 15.4 ALLOCATION OF AWARD. The total Award made with
respect to the Leased Property in connection with a Total Taking shall be equitably apportioned between Lessor and Lessee in proportion to the then fair market values of the respective estates and interests of Lessor and Lessee in and to the Leased
Property and under this Lease. 
  
 15.5 PARTIAL TAKING. If title
to less than the whole of the Leased Property is condemned, and the Leased Property is still suitable for its Primary Intended Use, and not Uneconomic for its Primary Intended Use, or if Lessee or Lessor is entitled but neither elects not to
terminate this Lease as provided in SECTION 15.3, Lessee at its cost shall with all reasonable dispatch, but only to the extent of any condemnation awards made available to Lessee and any other sums advanced by Lessor pursuant to the next sentence,
restore the untaken portion of any Improvements so that such Improvements constitute a complete architectural unit of the same general character and condition (as nearly as may be possible under the circumstances) as the Improvements existing
immediately prior to the Condemnation. If the condemnation awards are not adequate to restore the Facility to that condition, each of Lessor and Lessee shall have the right to terminate this Lease, without in any way affecting any other leases in
effect between Lessor and Lessee, by giving Notice to the other; provided, however that, if such termination is by Lessee, Lessor shall have the right, in its sole discretion, to nullify the termination and keep this Lease in full force by
providing, within thirty (30) days after Lessee’s Notice of termination, a Notice to Lessee of Lessor’s unconditional, legally binding obligation to be responsible for all restoration costs in excess of the condemnation awards. If this
Lease is not terminated and Lessee restores the Facility, the condemnation awards, and any other sums made available by Lessor as aforesaid, subject to the terms of any lender mortgage, shall be held in trust by Lessor and paid out by Lessor from
time to time for the reasonable costs of such restoration upon satisfaction of reasonable terms and conditions, and any excess awards remaining after such restoration shall be retained by Lessor unless the partial condemnation materially impairs the
operations or financial performance of the Facility, in which latter event 
  

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 the award shall be equitably apportioned between Lessor and Lessee in proportion to the then fair market values of the
respective estates and interests of Lessor and Lessee in and to the Leased Property and under this Lease. 
  
 15.6 TEMPORARY TAKING. If the whole or any part of the Leased Property or of Lessee’s interest under this Lease is condemned by any Condemnor for its
temporary use or occupancy, this Lease shall not terminate by reason thereof, and Lessee shall continue to pay, in the manner and at the terms herein specified, the full amounts of the Base Rent, Percentage Rent and Additional Charges. In addition,
the entire amount of any Award made for such Condemnation allocable to the Term of this Lease, whether paid by way of damages, rent or otherwise, shall be paid to Lessee and, except for any portion thereof utilized for restoration, shall be deemed
to be Room Revenues for the purpose of calculating the Percentage Rent payable hereunder during such temporary taking. Except only to the extent that Lessee may be prevented from so doing pursuant to the terms of the order of the Condemnor, Lessee
shall continue to perform and observe all of the other terms, covenants, conditions and obligations hereof on the part of the Lessee to be performed and observed, as though such Condemnation had not occurred. Lessee covenants that upon the
termination of any such period of temporary use or occupancy it will, at its sole cost and expense (subject to Lessor’s contribution as set forth below), restore the Leased Property as nearly as may be reasonably possible to the condition in
which the same was immediately prior to such Condemnation, unless (a) such period of temporary use or occupancy extends beyond the expiration of the Term, in which case Lessee shall not be required to make such restoration, or (b) the condemnation
award is inadequate to cover the costs of such restoration, in which case the provisions of SECTION 15.5 applicable to inadequate awards shall govern. If restoration is required in connection with such temporary taking and the condemnation award
(together with any other sums Lessor elects, in its sole discretion, to advance) is adequate to pay the costs thereof, the provisions of SECTION 15.5 shall govern the disbursement of the awards (and other sums, if applicable) and the disposition of
any awards in excess of restoration costs. If restoration is required hereunder, Lessor shall contribute to the cost of such restoration that portion of its entire Award that is specifically allocated to such restoration in the judgment or order of
the court, if any, and Lessee shall, fund the balance of such costs in advance of restoration in a manner reasonably satisfactory to Lessor. 
  
 ARTICLE 16 
  
 EVENTS OF DEFAULT; REMEDIES; DAMAGES 
  
 16.1 EVENTS OF DEFAULT. If any one or more of the following events (individually, an “EVENT OF DEFAULT”) occurs: 
  
 (a) if Lessee fails to make payment of the Base Rent or
Percentage Rent or Additional Charges when the same become due and payable for a period of ten (10) days after receipt by the Lessee of Notice from the Lessor thereof; 
  
 (b) if Lessee fails to observe or perform any term, covenant or condition of this Lease, other than the
payment of Rent or Additional Rent, and such failure is not cured by Lessee within a period of thirty (30) days after receipt by the Lessee of Notice thereof from Lessor, unless such failure cannot with due diligence be cured within a period of
thirty (30) days, in which case it shall not be deemed an Event of Default if Lessee proceeds promptly and with due diligence to cure the failure and diligently completes the curing thereof provided, however, in no event shall such cure period
extend beyond one hundred and twenty (120) days after such Notice; or 
  
 (c) if the Lessee shall file a petition in bankruptcy or reorganization for an arrangement pursuant to any federal or state bankruptcy law or any similar federal or state law, or shall be adjudicated a bankrupt or
shall make an assignment for the benefit of creditors or shall admit in writing its inability to pay its debts generally as they become due, or if a petition or answer proposing the adjudication of the Lessee as a bankrupt or its reorganization
pursuant to any federal or state bankruptcy law or any similar federal or state law shall be filed in any court and the Lessee shall be adjudicated a bankrupt and such adjudication shall not be vacated or set aside or stayed within sixty (60) days
after the entry of an order in respect thereof, or if a receiver of the Lessee or of the whole or substantially all of the assets of the Lessee shall be appointed in any proceeding brought by the Lessee or if any such receiver, trustee or liquidator
shall be appointed in any proceeding brought against the Lessee and shall not be vacated or set aside or stayed within sixty (60) days after such appointment; or 
  

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 (d) if Lessee is liquidated or dissolved, or begins proceedings toward such liquidation
or dissolution, or, in any manner, permits the` sale or divestiture of substantially all of its assets; or 
  
 (e) if the estate or interest of Lessee in the Leased Property or any part thereof is voluntarily or involuntarily transferred, assigned,
conveyed, levied upon or attached in any proceeding (unless Lessee is contesting such lien or attachment in good faith in accordance with ARTICLE 12 hereof); or 
  
 (f) if, except as a result of and to the extent required by damage, destruction, partial or complete
Condemnation or Unavoidable Delay, Lessee voluntarily ceases operations on the Leased Property for a period in excess of thirty (30) days; or 
  
 (g) if: (A) an event of default has been declared by the franchisor under the Franchise Agreement with respect to the Facility on the
Leased Premises as a result of any action or failure to act by Lessee or any Person with whom Lessee contracts for management services at the Facility, and (B) Lessee has failed, within thirty (30) days thereafter, to cure such default by either (1)
curing the underlying default under the Franchise Agreement and paying all costs and expenses associated therewith, or (2) obtaining at Lessee’s sole cost and expense a substitute franchise license agreement with a substitute franchisor
acceptable to Lessor, on terms and conditions acceptable to Lessor; provided, however, that if Lessee is in good faith disputing an assertion of default by the franchisor or is proceeding diligently to cure such default, the 30-day period shall be
extended for such period of time as Lessee continues to dispute such default in good faith or diligently proceeds to cure such default, so long as there is no period during which the Facility is not operated pursuant to a Franchise Agreement
approved by Lessor; then, and in any such event, Lessor may exercise one or more remedies available to it herein or at law or in equity, including, but not limited to, its right to terminate this Lease by giving Lessee not less than ten (10)
days’ Notice of such termination. 
  
 If litigation is
commenced with respect to any alleged default under this Lease, the prevailing party in such litigation shall receive, in addition to its damages incurred, such sum as the court shall determine as its reasonable attorneys’ fees, and all costs
and expenses incurred in connection therewith. 
  
 No Event of
Default (other than a failure to make a payment of money) shall be deemed to exist under clause (c) during any time the curing thereof is prevented by an Unavoidable Delay, provided that upon the cessation of such Unavoidable Delay, Lessee remedies
such default or Event of Default without further delay. 
  
 16.2
SURRENDER. If an Event of Default occurs (and the event giving rise to such Event of Default has not been cured within the curative period relating thereto as set forth in SECTION 16.1) and is continuing, whether or not this Lease has been
terminated pursuant to SECTION 16.1, Lessee shall, if requested by Lessor so to do, immediately surrender to Lessor the Leased Property including, without limitation, any and all books, records, files, licenses, permits and keys relating thereto,
and quit the same and Lessor may enter upon and repossess the Leased Property by reasonable force, summary proceedings, ejectment or otherwise, and may remove Lessee and all other persons and any and all personal property from the Leased Property,
subject to rights of any hotel guests and to any requirement of law. Lessee hereby waives any and all requirements of applicable laws for service of notice to re-enter the Leased Property. Lessor shall be under no obligation to, but may if it so
chooses, relet the Leased Property or otherwise mitigate Lessor’s damages, except unless otherwise required by applicable law. 
  
 16.3 DAMAGES. Neither (a) the termination of this Lease, (b) the repossession of the Leased Property, (c) the failure of Lessor to relet the Leased
Property, nor (d) the reletting of all or any portion thereof, shall relieve Lessee of its liability and obligations hereunder, all of which shall survive any such termination, repossession or reletting. In the event of any such termination, Lessee
shall forthwith pay to Lessor all Rent due and payable with respect to the Leased Property to and including the date of such termination. 
  
 Lessee shall forthwith pay to Lessor, at Lessor’s option, as and for liquidated and agreed current damages for Lessee’s default,
either: 
  
 (1) Without termination of
Lessee’s right to possession of the Leased Property, each installment of Rent and other sums payable by Lessee to Lessor under the Lease as the same becomes due and 
  

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 payable, which Rent and other sums shall bear interest at the overdue Rate, and Lessor may enforce, by
action or otherwise, any other term or covenant of this Lease; or 
  
 (2) the sum of: 
  
 (A) the unpaid Rent which had been earned at the time of termination, repossession or reletting, and 
  
 (B) the worth at the time of termination, repossession or reletting of the amount by which the unpaid Rent for the balance of the Term
after the time of termination, repossession or reletting, exceeds the amount of such rental loss that Lessee proves could be reasonably avoided, and 
  
 (C) any other amount necessary to compensate Lessor for all the detriment proximately caused by Lessee’s failure to perform its
obligations under this Lease or which in the ordinary course of things, would be likely to result therefrom. The worth at the time of termination, repossession or reletting of the amount referred to in subparagraph (B) is computed by discounting
such amount at the discount rate of the Federal Reserve Bank of New York at the time of award plus 1%. 
  
 Rent for the purposes of this SECTION 16.3 shall be a sum equal to (i) the average of the annual amounts of the greater of the Base Rent or Percentage
Rent for the three Fiscal Years immediately preceding the Fiscal Year in which the termination, re-entry or repossession takes place, or (ii) if three Fiscal Years shall not have elapsed, the average of the greater of the Base Rent or Percentage
Rent during the preceding Fiscal Years during which the Lease was in effect, or (iii) if one Fiscal Year has not elapsed, the amount derived by annualizing the greater of the Base Rent or Percentage Rent from the effective date of this Lease.

  
 16.4 WAIVER. If this Lease is terminated pursuant to SECTION
16.1, Lessee waives, to the extent permitted by applicable law, (a) any right to a trial by jury in the event of summary proceedings to enforce the remedies set forth in this ARTICLE 16, and (b) the benefit of any laws now or hereafter in force
exempting property from liability for rent or for debt and Lessor waives any right to “pierce the corporate veil” of Lessee other than to the extent funds shall have been inappropriately paid any Affiliate of Lessee following a default
resulting in an Event of Default. 
  
 16.5 APPLICATION OF FUNDS.
Any payments received by Lessor under any of the provisions of this Lease during the existence or continuance of any Event of Default shall be applied to Lessee’s obligations in the order that Lessor may determine or as may be prescribed by the
laws of the State. 
  
 ARTICLE 17 
  
 LESSOR’S RIGHT TO CURE 
  
 17.1 LESSOR’S RIGHT TO CURE LESSEE’S DEFAULT. If Lessee fails to
make any payment or to perform any act required to be made or performed under this Lease including, without limitation, Lessee’s failure to comply with the terms of any Franchise Agreement, and fails to cure the same within the relevant time
periods provided in SECTION 16.1, Lessor, without waiving or releasing any obligation of Lessee, and without waiving or releasing any obligation or default, may (but shall be under no obligation to) at any time thereafter make such payment or
perform such act for the account and at the expense of Lessee, and may, to the extent permitted by law, enter upon the Leased Property for such purpose and, subject to SECTION 16.4, take all such action thereon as, in Lessor’s opinion, may be
necessary or appropriate therefor. No such entry shall be deemed an eviction of Lessee. All sums so paid by Lessor and all costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses, in each case to the extent
permitted by law) so incurred, together with a late charge thereon (to the extent permitted by law) at the Overdue Rate from the date on which such sums or expenses are paid or incurred by Lessor, shall be paid by Lessee to Lessor on demand. The
obligations of Lessee and rights of Lessor contained in this ARTICLE 17 shall survive the expiration or earlier termination of this Lease. 
  

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 ARTICLE 18 
  
 REIT REQUIREMENTS 
  
 18.1 REIT REQUIREMENTS. 
  
 (a) Lessee understands that, in order for CAPITAL LODGING to qualify as a REIT, the following requirements (the “REIT
REQUIREMENTS”) must be satisfied: 
  
 (1)
The average of the fair market values of Lessor’s personal property that is leased to Lessee under a lease at the beginning and end of a calendar year may not exceed 15% of the average of the aggregate fair market values of all of Lessor’s
property that is leased to Lessee under such lease at the beginning and end of such calendar year. 
  
 (2) Lessee may not sublet the property that is leased to it by Lessor, or enter into any similar arrangement, on any basis such that the
rental or other amounts paid by the sublessee thereunder would be based, in whole or in part, on either (i) the net income or profits derived by the business activities of the sublessee or (ii) any other formula such that any portion of the rent
paid by Lessee to Lessor would fail to qualify as “rents from real property” within the meaning of Section 856(d) of the Code. 
  
 (3) Lessee may not sublease the property leased to it by Lessor to, or enter into any similar arrangement with, any Person in which
CAPITAL LODGING owns, directly or indirectly, a 10% or more interest, within the meaning of Section 856 (d) (2) (B) of the Code. 
  
 (4) Lessee and CAPITAL LODGING shall make an election to be, and to operate as a “Taxable REIT Subsidiary” of CAPITAL LODGING
within the meaning of Section 856(1) of the Code. 
  
 (5) Except as otherwise provided in the CAPITAL LODGING Articles of Amendment and Restatement, dated _____, 2004, as amended (the “CAPITAL LODGING CHARTER”), no Person may own, directly or indirectly (within the meaning of Section
856(d)(5) of the Code), stock of CAPITAL LODGING that exceeds the Aggregate Share Ownership Limit or the Common Share Ownership Limit (as such terms are defined in the CAPITAL LODGING Charter). 
  
 (6) Lessee shall not (i) directly or indirectly operate or
manage a “Lodging Facility” within the meaning of Section 856(d)(9)(D)(ii) of the Code or a “Health Care Facility” within the meaning of Section 856(e)(6)(D)(ii) or (ii) directly or indirectly provide to any other person (under a
franchise, license, or otherwise) rights to any brand name under which any lodging facility or health care facility is operated; provided, however, that Lessee may provide such rights to Manager to operate or manage a lodging facility as long as
such rights are held by Lessee as a franchisee, licensee, or in a similar capacity and such lodging facility is either owned by Lessee or is leased to Lessee by Lessor or one of its Affiliates. 
  
 (b) Lessee agrees, and agrees to use reasonable efforts to
cause its Affiliates, to use its best efforts to permit the REIT Requirements to be satisfied. Lessee agrees, and agrees to use reasonable efforts to cause its Affiliates, to cooperate in good faith with CAPITAL LODGING and Lessor to ensure that the
REIT Requirements are satisfied, including but not limited to, providing CAPITAL LODGING with information about the ownership of Lessee, and its Affiliates to the extent that such information is reasonably available. Lessee agrees, and agrees to use
reasonable efforts to cause its Affiliates, upon request by CAPITAL LODGING, and, where appropriate, at CAPITAL LODGING’s expense, to take reasonable action necessary to ensure compliance with the REIT Requirements. Immediately after becoming
aware that the REIT Requirements are not, or will not be, satisfied, Lessee shall notify, or use reasonable efforts to cause its Affiliates to notify, CAPITAL LODGING of such noncompliance. 
  
 18.2 LESSEE OFFICER AND EMPLOYEE LIMITATION. Anything contained in this Lease
to the contrary notwithstanding, none of the officers or employees of the Lessee or any subsidiary of Lessee shall be 
  

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 officers or employees of Manager (or any Person who operates or manages the Leased Property). In addition, if a Person
serves as both (a) a director of the Lessee or any subsidiary of Lessee and (b) a director and officer (or employee) of Manager (or any Person who operates or manages the Leased Property), that Person shall not receive any compensation for serving
as a director of the Lessee or any subsidiary of Lessee. If a person serves as both (a) a director of Manager or any subsidiary of Manager (or any Person who operates or manages the Leased Property) and (b) a director and officer (or employee) of
Lessee, that Person shall not receive any compensation for serving as a director of Manager. 
  
 18.3 MANAGEMENT AGREEMENT. Lessee agrees that, in order to comply with certain of the REIT Requirements, it will, at all times during the Term, cause the Leased Property to be operated and managed by a management
company (“MANAGER”) that is an Eligible Independent Contractor. Effective as of the Commencement Date, the Lessee shall enter into an initial management agreement in the form of EXHIBIT “C” attached hereto (the “MANAGEMENT
AGREEMENT”) and Lessee shall provide Lessor with an executed copy thereof. The Management Agreement is a hotel master management agreement which covers the Leased Property and all of the other hotel properties currently (or to be in the future)
leased by Lessee from Affiliates of Lessor. Lessee may not amend, modify or terminate the Management Agreement in any material respect or change the Manager without the prior written consent of Lessor, which consent shall not be unreasonably
withheld. Lessee shall also provide Lessor with copies of any amendments or modifications to the Management Agreement which are entered into from time to time or any other management agreement. Lessor shall have the right to approve in advance any
manager. 
  
 ARTICLE 19 
  
 HOLDING OVER 
  
 19.1 HOLDING OVER. If Lessee for any reason remains in possession of the
Leased Property after the expiration or earlier termination of the Term, such possession shall be as a tenant at sufferance during which time Lessee shall pay as rental each month two times the aggregate of (a) one-twelfth of the Base Rent and
Percentage Rent payable with respect to the last Fiscal Year of the Term, (b) all Additional Charges accruing during the applicable month and (c) all other sums, if any, payable by Lessee under this Lease with respect to the Leased Property. During
such period, Lessee shall be obligated to perform and observe all of the terms, covenants and conditions of this Lease, but shall have no rights hereunder other than the right, to the extent given by law to tenancies at sufferance, to continue its
occupancy and use of the Leased Property. Nothing contained herein shall constitute the consent, express or implied, of Lessor to the holding over of Lessee after the expiration or earlier termination of this Lease. 
  
 ARTICLE 20 
  
 RISK OF LOSS 
  
 20.1 RISK OF LOSS. During the Term, the risk of loss or of decrease in the
enjoyment and beneficial use of the Leased Property in consequence of the damage or destruction thereof by fire, the elements, casualties, thefts, riots, wars or otherwise, or in consequence of foreclosures, attachments, levies or executions (other
than those caused by Lessor and those claiming from, through or under Lessor) is assumed by Lessee except as specifically provided in this Lease, and, Lessor shall in no event be answerable or accountable therefor, nor shall any of the events
mentioned in this Section entitle Lessee to any abatement of Rent except as specifically provided in this Lease. 
  
 ARTICLE 21 
  
 INDEMNIFICATION 
  
 21.1 INDEMNIFICATION.
Notwithstanding the existence of any insurance, and without regard to the policy limits of any such insurance or self-insurance, but subject to ARTICLES 8, 14 AND 15, Lessee will protect, indemnify, hold harmless and defend Lessor from and against
all liabilities, obligations, claims, damages, penalties, causes of action, costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses), to the 
  

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 extent permitted by law, imposed upon or incurred by or asserted against Lessor Indemnified Parties by reason of: (a) any
accident, injury to or death of persons or loss of or damage to property occurring on or about the Leased Property or adjoining sidewalks, including without limitation any claims under liquor liability, “dram shop” or similar laws, (b) any
past, present or future use, misuse, non-use, condition, management, maintenance or repair by Lessee or any of its agents, employees or invitees of the Leased Property or Lessee’s Personal Property or any litigation, proceeding or claim by
governmental entities or other third parties to which a Lessor Indemnified Party is made a party or participant related to such use, misuse, non-use, condition, management, maintenance, or repair thereof by Lessee or any of its agents, employees or
invitees, including any failure of Lessee or any of its agents, employees or invitees to perform any obligations under this Lease or imposed by applicable law (other than arising out of Condemnation proceedings), (c) any Impositions that are the
obligations of Lessee pursuant to the applicable provisions of this Lease, (d) any failure on the part of Lessee to perform or comply with any of the terms of this Lease, and (e) the non-performance of any of the terms and provisions of any and all
existing and future subleases of the Leased Property to be performed by the landlord thereunder. 
  
 Lessor shall indemnify, save harmless and defend Lessee Indemnified Parties from and against all liabilities, obligations, claims, damages, penalties,
causes of action, costs and expenses imposed upon or incurred by or asserted against Lessee Indemnified Parties as a result of (a) the gross negligence or willful misconduct of Lessor arising in connection with this Lease or (b) any failure on the
part of Lessor to perform or comply with any of its obligations under this Lease. 
  
 Any amounts that become payable by an Indemnifying Party under this Section shall be paid within ten days after liability therefor on the part of the Indemnifying Party is determined by litigation or otherwise, and if
not timely paid, shall bear a, late charge (to the extent permitted by law) at the Overdue Rate from the date of such determination to the date of payment. An Indemnifying Party, at its expense, shall contest, resist and defend any such claim,
action or proceeding asserted or instituted against the Indemnified Party. The Indemnified Party, at its expense, shall be entitled to participate in any such claim, action, or proceeding, and the Indemnifying Party may not compromise or otherwise
dispose of the same without the consent of the Indemnified Party, which may not be unreasonably withheld. Nothing herein shall be construed as indemnifying a Lessor Indemnified Party against its own grossly negligent acts or omissions or willful
misconduct. 
  
 Lessee’s or Lessor’s liability for a
breach of the provisions of this ARTICLE 21 shall survive any termination of this Lease. 
  
 ARTICLE 22 
  
 SUBLETTING AND ASSIGNMENT 
  
 22.1 SUBLETTING AND
ASSIGNMENT. Subject to the provisions of ARTICLE 18 and SECTION 22.2 and any other express conditions or limitations set forth herein, Lessee may, but only with the prior written consent of Lessor which consent shall not be unreasonably withheld,
(a) assign this Lease or sublet all or any part of the Leased Property to an Affiliate of Lessee, or (b) sublet any retail or restaurant portion of the Improvements in the normal course of the Primary Intended Use; provided that any subletting to
any party other than an Affiliate of Lessee shall not individually as to any one such subletting, or in the aggregate, materially diminish the actual or potential Percentage Rent payable under this Lease. In the case of a subletting, the sublessee
shall comply with the provisions of SECTION 22.2, and in the case of an assignment, the assignee shall assume in writing and agree to keep and perform all of the terms of this Lease on the part of Lessee to be kept and performed and shall be, and
become, jointly and severally liable with Lessee for the performance thereof. In case of either an assignment or subletting made during the Term, Lessee shall remain primarily liable, as principal rather than as surety, for the prompt payment of the
Rent and for the performance and observance of all of the covenants and conditions to be performed by Lessee hereunder. An original counterpart of each such sublease and assignment and assumption, duly executed by Lessee and such sublessee or
assignee, as the case may be, in form and substance satisfactory to Lessor, shall be delivered promptly to Lessor. 
  
 22.2 ATTORNMENT. Lessee shall insert in each sublease permitted under SECTION 22.1 provisions to the effect that (a) such sublease is subject and
subordinate to all of the terms and provisions of this Lease and to 
  

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 the rights of Lessor hereunder, (b) if this Lease terminates before the expiration of such sublease, the sublessee
thereunder will, at Lessor’s option, attorn to Lessor and waive any right the sublessee may have to terminate the sublease or to surrender possession thereunder as a result of the termination of this Lease, and (c) if the sublessee receives a
written Notice from Lessor or Lessor’s assignees, if any, stating that an uncured Event of Default exists under this Lease, the sublessee shall thereafter be obligated to pay all rentals accruing under said sublease directly to the party giving
such Notice, or as such party may direct. All rentals received from the sublessee by Lessor or Lessor’s assignees, if any, as the case may be, shall be credited against the amounts owing by Lessee under this Lease. 
  
 ARTICLE 23 
  
 REPORTING AND CERTIFICATION REQUIREMENTS 
  
 23.1 OFFICER’S CERTIFICATES; FINANCIAL STATEMENTS; BUDGETS;
LESSOR’S ESTOPPEL CERTIFICATES AND COVENANTS. 
  
 (a) At any time and from time to time upon not less than twenty (20) days Notice by Lessor, Lessee will furnish to Lessor an Officer’s Certificate certifying that this Lease is unmodified and in full force and effect (or that this
Lease is in full force and effect as modified and setting forth the modifications), the date to which the Rent has been paid, whether to the knowledge of Lessee there is any existing default or Event of Default exists thereunder by Lessor or Lessee,
and such other information as may be reasonably requested by Lessor. Any such certificate furnished pursuant to this Section may be relied upon by Lessor, any lender and any prospective purchaser of the Leased Property. 
  
 (b) Throughout the Term, Lessee will furnish to Lessor such
historical financial information of Lessee and the Facility as Lessor may reasonably request and shall provide Lessor access to Lessee’s books and records with respect thereto. 
  
 (c) Within five (5) days of Lessee’s receipt thereof, any inspection reports received from the
franchisor under the Franchise Agreement. 
  
 (d)
At any time and from time to time upon not less than twenty (20) days notice by Lessee, Lessor will furnish to Lessee or to any person designated by Lessee an estoppel certificate certifying that this Lease is unmodified and in full force and effect
(or that this Lease is in full force and effect as modified and setting forth the modifications), the date to which Rent has been paid, whether to the knowledge of Lessor there is any existing default or Event of Default on Lessee’s part
hereunder, and such other information as may be reasonably requested by Lessee. 
  
 23.2 OPERATING BUDGET. Not later than forty-five (45) days prior to the commencement of each Lease Year, Lessee, in consultation with the Manager, shall prepare and submit to Lessor an operating budget (the
“OPERATING BUDGET”) in form and substance reasonably satisfactory to Lessor, prepared in accordance with the requirements of this SECTION 23.2. The Operating Budget shall be prepared in accordance with the Uniform System to the extent
applicable and show by month and quarter and for the year as a whole in the degree of detail specified by the Uniform System for monthly statements, and in accordance with the detail level of monthly financial statements, the following: 

 
 (a) Lessee’s reasonable estimate of Gross Revenues,
Room Revenues, Food Revenues and Beverage Revenues (including room rates) for the Facility for the forthcoming Lease Year itemized on schedules on a monthly and quarterly basis as approved by Lessor and Lessee, together with the assumptions, in
narrative form, forming the basis of such schedules; 
  
 (b) A cash flow projection; and 
  
 (c)
Lessee’s reasonable estimate for each quarter of the Lease Year of Percentage Rent. 
  

 33 

 23.3 CAPITAL BUDGET. Not later than forty-five (45) days prior to the commencement of each Lease Year,
Lessee shall prepare and submit to Lessor a capital improvement budget (the “CAPITAL BUDGET”) prepared in accordance with the Uniform System to the extent applicable, and shall set forth the proposed Capital Expenditures for the ensuing
Lease Year. 
  
 ARTICLE 24 
  
 LESSOR’S DEFAULT; CURE RIGHTS 
  
 24.1 LESSEE’S RIGHT TO CURE. Subject to the provisions of SECTION 24.2,
if Lessor breaches any covenant to be performed by it under this Lease, Lessee, after Notice to and demand upon Lessor, without waiving or releasing any obligation hereunder, and in addition to all other remedies available to Lessee, may (but shall
be under no obligation at any time thereafter to) make such payment or perform such act for the account and at the expense of Lessor. All sums so paid by Lessee and all costs and expenses (including, without limitation, reasonable attorneys’
fees) so incurred, together with interest thereon at the Overdue Rate from the date on which such sums or expenses are paid or incurred by Lessee, shall be paid by Lessor to Lessee on demand or, following entry of a final, nonappealable judgment
against Lessor for such sums, may be offset by Lessee against the Base Rent payments next accruing or coming due. The rights of Lessee hereunder to cure and to secure payment from Lessor in accordance with this SECTION 24.1 shall survive the
termination of this Lease with respect to the Leased Property. 
  
 24.2 BREACH BY LESSOR. It shall be a breach of this Lease if Lessor fails to observe or perform any term, covenant or condition of this Lease on its part to be performed and such failure continues for a period of thirty (30) days after
Notice thereof from Lessee, unless such failure cannot with due diligence be cured within a period of thirty (30) days, in which case such failure shall not be deemed to continue if Lessor, within such 30-day period, proceeds promptly and with due
diligence to cure the failure and diligently completes the curing thereof. The time within which Lessor shall be obligated to cure any such failure also shall be subject to extension of time due to the occurrence of any Unavoidable Delay.

  
 ARTICLE 25 
  
 NOTICES 
  
 25.1 NOTICES. All notices, demands, requests, consents approvals and other communications (“NOTICE” or
“NOTICES”) hereunder shall be in writing and personally served, mailed (by registered or certified mail, return receipt requested and postage prepaid) or sent by facsimile, addressed to Lessor at
                                        
                    , and addressed to Lessee at
                                        
                    , or to such other address or addresses as either party may hereafter designate. Personally delivered Notice shall be
effective upon receipt, and Notice given by mail shall be complete at the time of deposit in the U.S. Mail system, but any prescribed period of Notice and any right or duty to do any act or make any response within any prescribed period or on a date
certain after the service of such Notice given by mail shall be extended five days. 
  
 ARTICLE 26 
  
 MISCELLANEOUS PROVISIONS 
  
 26.1 TRANSFER OF
LICENSES. Upon the expiration or earlier termination of the Term, Lessee shall use its best efforts (i) to transfer to Lessor or Lessor’s nominee or designee all Franchise Agreements, licenses, operating permits and other governmental
authorizations and all contracts, including contracts with governmental or quasi-governmental entities, that may be necessary for the operation of the Facility (collectively, “LICENSES”), or (ii) if such transfer is prohibited by law or
Lessor otherwise elects, to cooperate with Lessor or Lessor’s nominee in connection with the processing by Lessor or Lessor’s nominee of any applications for, all Licenses; provided, in either case, that the costs and expenses of any such
transfer or the processing of any such application shall be paid by Lessor or Lessor’s nominee. 
  

 34 

 26.2 [EARLY TERMINATION RIGHTS; TERMINATION FEES. Lessor may terminate the Lease as to any Leased
Property prior to the Expiration Date by reason of a sale of the Facility, the Manager’s failure to satisfy certain performance tests, or for convenience, as set forth in Section      of the Management Agreement (and
pursuant to the notice requirements contained therein), provided Lessor pays to Lessee the termination fees as liquidated damages pursuant to the terms and conditions as set forth in Section          of
the Management Agreement.] 
  
 [The terms and
conditions set forth in Section          of the Management Agreement are fully incorporated herein for all purposes as if fully set forth herein and shall survive termination of this Lease.]

  
 26.3 COMPLIANCE WITH FRANCHISE AGREEMENT. To the
extent any of the provisions of the Franchise Agreement impose a greater obligation on Lessee than the corresponding provisions of this Lease, then Lessee shall be obligated to comply with the provisions of the Franchise Agreement except in regard
to those obligations which are the responsibility of Lessor as provided herein. It is the intent of the parties hereto that Lessee shall comply in every respect with the provisions of the Franchise Agreement so as to avoid any default thereunder
during the term of this Lease. Lessee shall not terminate, extend or enter into any modification of the Franchise Agreement without in each instance first obtaining Lessor’s prior written consent. Lessor and Lessee agree to cooperate with each
other in the event it becomes necessary to obtain a franchise extension or modification or a new franchise for the Leased Property, and in any transfer of the Franchise Agreement to Lessor (if applicable) or any designee of or any successor to
Lessee (as applicable) upon the termination of this Lease. In the event of expiration or termination of a Franchise Agreement, for whatever reason, the Lessor will have the right, in its sole discretion, to approve any new Franchise Agreement for
the Facility. If, upon any expiration or earlier termination of this Lease (other than upon an Event of Default by Lessee), a Franchise Agreement remains in effect, or would but for such expiration or termination remain in effect, Lessor shall
indemnify, defend and hold Lessee harmless with respect to the obligations and liabilities arising thereunder after the date of expiration or termination of this Lease. 
  
 26.4 LESSOR’S RIGHT TO INSPECT. Lessee shall permit Lessor and its authorized representatives as frequently as
reasonably requested by Lessor to inspect the Leased Property and Lessee’s accounts and records pertaining thereto and make copies thereof, during usual business hours upon reasonable advance notice, subject only to any business confidentiality
requirements reasonably requested by Lessee, provided that Lessor shall not cause any interference with the operation of the Leased Property. 
  
 26.5 CONVEYANCE BY LESSOR. If Lessor or any successor owner of the Leased Property conveys the Leased Property to a Person other than a wholly owned
Affiliate of Lessor in accordance with the terms hereof other than as security for a debt, and the grantee or transferee of the Leased Property expressly assumes all obligations of Lessor hereunder arising or accruing from and after the date of such
conveyance or transfer, Lessor or such successor owner, as the case may be, shall thereupon be released from all future liabilities and obligations of Lessor under this Lease arising or accruing from and after the date of such conveyance or other
transfer as to the Leased Property and all such future liabilities and obligations shall thereupon be binding upon the new owner. 
  
 26.6 LESSOR MAY GRANT LIENS. Without the consent of Lessee, Lessor may, subject to the terms and conditions set forth below in this SECTION 26.6, from
time to time, directly or indirectly, create or otherwise cause to exist any lien, encumbrance or title retention agreement (“ENCUMBRANCE”) upon the Leased Property, or any portion thereof or interest therein, whether to secure any
borrowing or other means of financing or refinancing. Upon the request of Lessor, Lessee shall subordinate this Lease to the lien of a new mortgage on the Leased Property. 
  
 26.7 NON DISTURBANCE AGREEMENT. Lessor agrees, subject to any restrictions or limitations imposed by any lender of Lessor,
to execute in favor of manager a non disturbance and attornment agreement in form and substance reasonably acceptable to Lessor and Manager. 
  
 26.8 WAIVER OF PRESENTMENT, ETC. Lessee waives all presentments, demands for payment and for performance, notices of nonperformance, protests, notices of
protest, notices of dishonor, and notices of 
  

 35 

 acceptance and waives all notices of the existence, creation, or incurring of new or additional obligations, except as
expressly granted herein. 
  
 26.9 MEMORANDUM OF LEASE. Lessor and
Lessee shall promptly upon the request of either enter into a short form memorandum of this Lease, in form suitable for recording under the laws of the State in which reference to this Lease, and all options contained herein, shall be made. Lessee
shall pay all costs and expenses of recording such memorandum of this Lease. 
  
 26.10 USURY. If any late charges or any interest rate provided for in any provision of this Lease are based upon a rate in excess of the maximum rate permitted by applicable law, the parties agree that such charges
shall be fixed at the maximum permissible rate. 
  
 26.11 NO
WAIVER. No failure by Lessor or Lessee to insist upon the strict performance of any term hereof or to exercise any right, power or remedy consequent upon a breach thereof, and no acceptance of full or partial payment of Rent during the continuance
of any such breach, shall constitute a waiver of any such breach or of any such term. To the extent permitted by law, no waiver of any breach shall affect or alter this Lease, which shall continue in full force and effect with respect to any other
then existing or subsequent breach. 
  
 26.12 REMEDIES CUMULATIVE.
To the extent permitted by law, each legal, equitable or contractual right, power and remedy of Lessor or Lessee now or hereafter provided either in this Lease or by statute or otherwise shall be cumulative and concurrent and shall be in addition to
every other right, power and remedy and the exercise or beginning of the exercise by Lessor or Lessee of any one or more of such rights, powers and remedies shall not preclude the simultaneous or subsequent exercise by Lessor or Lessee of any or all
of such other rights, powers and remedies. 
  
 26.13 ACCEPTANCE OF
SURRENDER. No surrender to Lessor of this Lease or of the Leased Property or any part thereof, or of any interest therein, shall be valid or effective unless agreed to and accepted in writing by Lessor and no act by Lessor or any representative or
agent of Lessor, other than such a written acceptance by Lessor, shall constitute an acceptance of any such surrender. 
  
 26.14 NO MERGER OF TITLE. There shall be no merger of this Lease or of the leasehold estate created hereby by reason of the fact that the same person or
entity may acquire, own or hold, directly or indirectly: (a) this Lease or the leasehold estate created hereby or any interest in this Lease or such leasehold estate and (b) the fee estate in the Leased Property. 
  
 26.15 QUIET ENJOYMENT. So long as Lessee pays all Rent as the same becomes
due and complies with all of the terms of this Lease and performs its obligations hereunder, in each case within the applicable grace periods, if any, Lessee shall peaceably and quietly have, hold and enjoy the Leased Property for the Term hereof,
free of any claim or other action by Lessor or anyone claiming by, through or under Lessor, but subject to all liens and encumbrances subject to which the Leased Property was conveyed to Lessor or hereafter consented to by Lessee or provided for
herein. Notwithstanding the foregoing, Lessee shall have the right by separate and independent action to pursue any claim it may have against Lessor as a result of a breach by Lessor of the covenant of quiet enjoyment contained in this Section.

  
 26.16 BINDING EFFECT. The covenants, terms, conditions,
provisions and undertakings in this Lease shall extend to and be binding upon the heirs, personal representatives, executors, administrators and permitted successors and assigns of the respective parties hereto. 
  
 26.17 ENTIRE AGREEMENT; NO OFFER. This Lease contains the entire agreement of
Lessor and Lessee with respect to the subject matter hereof, and no representations, warranties, inducements, promises or agreements, oral or otherwise, between the parties not embodied in this Lease shall be of any force or effect. This Lease may
be modified only by a written agreement executed by both parties with the same formalities as this Lease. All prior agreements or communications are and shall be merged into this Lease and shall have no force or effect. Neither any submission of
this Lease by one party to the other, nor any correspondence or other communications between the parties in connection therewith, is intended or shall be deemed to constitute an offer of 
  

 36 

 any kind or to create any obligations between the parties unless and until one or more duplicates of this Lease has been
fully executed and delivered between the parties. Accordingly, any such submission or communications or correspondence between the parties or their respective agents or attorneys is intended only as non-binding discussions, and either party shall
have the absolute right to withdraw from such discussions without any liability whatsoever to the other party. 
  
 26.18 SEVERABILITY. If any clause or provision of this Lease is illegal, invalid or unenforceable under applicable present or future Laws effective during
the Term, the remainder of this Lease shall not be affected. In lieu of each clause or provision of this Lease which is illegal, invalid or unenforceable, there shall be added as a part of this Lease a clause or provision as nearly identical as may
be possible and as may be legal, valid and enforceable. Notwithstanding the foregoing, in the event any clause or provision of this Lease is illegal, invalid or unenforceable as aforesaid and the effect of such illegality, invalidity or
unenforceability is that Lessor no longer has the substantial benefit of its bargain under this Lease, then, in such event, Lessor may in its discretion cancel and terminate this Lease upon providing at least ninety (90) days advance notice thereof
to Lessee. 
  
 26.19 COUNTERPARTS. This Lease may be executed in
several counterparts, each of which shall be deemed an original, and all of such counterparts together shall constitute one and the same instrument. 
  
 26.20 GOVERNING LAW. THIS LEASE AND ITS INTERPRETATION, VALIDITY AND PERFORMANCE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
            . IN THE EVENT ANY COURT OF LAW OF APPROPRIATE JUDICIAL AUTHORITY SHALL HOLD OR DECLARE THAT THE LAW OF ANOTHER JURISDICTION IS APPLICABLE, THIS LEASE SHALL REMAIN
ENFORCEABLE UNDER THE LAWS OF THE APPROPRIATE JURISDICTION. THE PARTIES HERETO AGREE THAT VENUE FOR ANY ACTION IN CONNECTION HEREWITH SHALL BE PROPER IN DALLAS COUNTY, TEXAS. EACH PARTY HERETO CONSENTS TO THE JURISDICTION OF ANY LOCAL, STATE OR
FEDERAL COURT SITUATED IN ANY OF SUCH LOCATIONS AND WAIVES ANY OBJECTION WHICH IT MAY HAVE PERTAINING TO IMPROPER VENUE OR FORUM NON CONVENIENS TO THE CONDUCT OF ANY PROCEEDING IN ANY SUCH COURT. 
  
 26.21 RECITALS; HEADINGS. The recitals set forth in this Lease are true and
correct, and are incorporated herein by this reference. The use of headings, captions and numbers in this Lease is solely for the convenience of identifying and indexing the various paragraphs and shall in no event be considered in construing or
interpreting any provision in this Lease. 
  
 26.22 SURVIVAL.
Notwithstanding anything to the contrary contained in this Lease, the provisions (including, without limitation, covenants, agreements, representations, warranties, obligations and liabilities described therein) of this Lease which from their sense
and context are intended to survive the expiration or sooner termination of this Lease shall survive such expiration or sooner termination of this Lease and continue, to be binding upon the applicable party. 
  
 26.23 EXHIBITS. The exhibits referred to in, and attached to, this Lease are
hereby incorporated in full by reference. Unless otherwise expressly provided in the exhibit or the body of this Lease, in the event of any conflict or inconsistency with the provisions contained in the body of this Lease and the exhibits, the
provisions contained in the body of this Lease shall control. 
  

 37 

 IN WITNESS WHEREOF, the parties have executed this Lease by their duly authorized officers as of the date
first above written. 
  
 [SIGNATURE PAGES TO FOLLOW] 

 

			
	“LESSOR”
	  
  
 [OWNER LLC],
 a Delaware limited liability company

		
	By:	 	 
	 	 	 
	 “LESSEE”

	 	 	 
	By:	 	  

  

 38Systems and Technology Service and Consulting Agreement

 Exhibit 4A.9 
  
 CONTRACT FOR SERVICE AND ADVISING ON DEVELOPMENT AND MAINTENANCE OF 
 SYSTEMS ENGINEERING APPLICATIONS AND TECHNOLOGY 
  
 between 
  
 ALTEC 
  
 and 
  
 BANCO SANTANDER – CHILE

 In Santiago, Chile on December 30, 2003, BANCO SANTANDER – CHILE, a banking corporation with RUT No
97.036.000-K, represented by Gonzalo Romero Astaburuaga, a Chilean, married, an attorney, with National Identity Card No 5.145.609-2, residing at Calle Bandera No 140 of the commune and city of Santiago, Metropolitan Region, hereinafter
also designated as “Bank,” for one party, and for the other, the ALTEC, S.A. company, with RUT No 96-945.770-9, represented by Alberto Patricio Melo Guerrero, a Chilean, married, a civil and electronic engineer, with Identity
Card No 7.008.457-0, residing at Avenida Andrés Bello No 2777, 16th floor, Las Condes commune,
Metropolitan Region, hereinafter also designated as “ALTEC,” have agreed to enter into a Service Contract comprised of the following clauses (the “Contract”): 
  
 CLAUSE 1: DEFINITIONS AND INTERPRETATION 
  
 Glossary 
  
 To aid in the proper common interpretation and understanding of each of the
abbreviations, figures, concepts, and terms used in this Contract, the reader is advised to review it in conjunction with Exhibit No 1 – Glossary, which explains each of the meanings that shall prevail over the interpretation either
party may adopt at any time during the term of this Contract. 
  
 Documents Comprising the Contract 
  
 The parties
declare that the documents listed below, which are known to and accepted by then, are integral parts of this Contract and they undertake to comply fully therewith: 
  

			
		
	•      Exhibit 1 -	    	Glossary
		
	•      Exhibit 2 -	    	Subsidiaries and Related Companies Entitled to Services
		
	•      Exhibit 3 -	    	Specification of Services
		
	•      Exhibit 4 -	    	Transition Plan
		
	•      Exhibit 5 -	    	Systems and Platforms Not Included
		
	•      Exhibit 6 -	    	Operating Requirements Agreement
		
	•      Exhibit 7 -	    	Technological Resources
		
	•      Exhibit 8 -	    	Summary of Intel Platform Inventory
		
	•      Exhibit 9 -	    	Inventory of Applications
		
	•      Exhibit 10 -	    	Effects of Default on Operating Requirements Agreement
		
	•      Exhibit 11 -	    	Technology and Systems Engineering Service Level Agreement
		
	•      Exhibit 12 -	    	Development and Maintenance Service Level Agreement
		
	•      Exhibit 13 -	    	Progress Reports
		
	•      Exhibit 14 -	    	Payments in Transition Period
		
	•      Exhibit 15 -	    	Tools
		
	•      Exhibit 16 -	    	Matrix of Penalties for Default
		
	•      Exhibit 17 -	    	Satisfaction Survey
		
	•      Exhibit 18 -	    	Detail of Resources and Procedures for the Recovery Plan
		
	•      Exhibit 19 -	    	Fees for Service
		
	•      Exhibit 20 -	    	Payroll and Transfer Terms

  
 Updating of the
information by issuing a new version and distributing it to the Technology Committee shall be a responsibility of the parties. Each Exhibit must bear a date and the parties’ signatures. 
  
 In the event of any discrepancy among the provisions of the aforementioned
document, the provisions of the most recent Exhibits shall prevail; and in the event of any discrepancy between the provisions of said Exhibits and those of this Contract, the latter shall prevail. 
  

 2 

 Purpose of the Contract 
  
 Pursuant hereto the Bank entrusts to ALTEC, which being represented as indicated above, accepts the trust and
undertakes to perform the Services described in Clause 3, Scope of Service. 
  
 Bank’s Subsidiaries 
  
 All the subsidiaries of the Bank, which are listed in Exhibit No 2 – Subsidiaries [and Related Companies] Entitled to Services, shall be deemed to be full parties to this Contract. The following companies are
expressly excluded: AFT SummaBansander, Santander GRC (formerly C&R and formerly Fiscalex), and Altavida Cía. de Seguros de Vida. ALTEC may offer the Services prescribed in this Contract to the excluded companies at any time.

  
 The Bank shall be responsible for signing the
respective contracts and agreements with each of the companies mentioned in Exhibit No 2, so as to provide them with each and all the Services, which may in no event exceed the stipulated Levels of Service. 
  
 For all purposes relating to penalties and indemnities, as well as other
obligations incumbent upon the parties for default or delay, ALTEC shall reach agreement with the Bank and leave it to the Bank to make the appropriate transfers of benefits and costs stemming from the execution of this
Contract, if it sees fit or is legally required to do so. 
  
 CLAUSE 2:
TERM OF THE CONTRACT 
  
 Except as provided for in Clause 19,
this Contract has a duration of 3 years commencing on January 1, 2004, the date on which it enters into force; it shall be automatically renewed for successive terms of equal duration unless one party informs the other of its intention to terminate
the Contract for the causes and conditions stipulated in the Termination of Contract clause, or of its intention to change the renewal term, by certified letter sent not less than 6 months prior to the expiration of the original term or the
extension term in question. 
  

	CLAUSE	3: SCOPE OF SERVICE 

  
 The services ALTEC shall provide to the Bank are enumerated below, and are described in detail in Exhibit No 3 – Specification
of Services. 
  

	 	•	Development and Maintenance of Applications 

  

	 	•	Systems Technology and Engineering 

  
 Stages of Service 
  
 The Services shall be provided, commencing as of the starting date, in two distinct stages: the first stage, designated Transition, and the second stage,
designated Standard Service. 
  
 The Transition Stage
contemplates ALTEC’s performance of all the activities required to perfect the provision of Service, which shall be provided commencing as the date on which this Contract is signed, under conditions similar to those currently in force,
and shall have a duration of 6 months, during which the tasks enumerated in Exhibit 4 – Transition Plan shall be carried out. 
  
 Since the Transition Stage is a critical period, arrangements for special meetings and greater involvement by Bank personnel should be considered, which
involvement must be warranted by the Bank. ALTEC shall undertake to keep the Bank informed of the progress made in said stage, and shall inform it forthwith of any proposed change in the definitions stipulated in this Contract,
such as changes in the service model, the invoicing model, etc., stemming from the confirmations and adaptations carried out in the course of the Transition Stage. Said confirmations and adaptations shall be undertaken to ensure the proper and
stable provision of the Services in the Standard Service stage. 
  

 3 

 Technological and Methodological Improvements 
  
 ALTEC must inform the Bank, and reach agreement with it, on
every suggestion for technological or methodological change that is intended to improve the Services and which affect the Bank. 
  
 Government Permits 
  
 The parties agree that the Bank shall be responsible for complying at all times, and especially upon the signing of this Contract, with the
provisions adopted by the financial authority; the provisions of Chapter 20-7 (Banks and Financial Institutions), regulating Data Processing. Services Rendered or Received, of the Superintendency of Banks and Financial Institutions’ Compendium
of Rules and Regulations requires special attention. 
  
 Changes in Laws and Internal and External Rules and Regulations 
  
 If either party learns of any change in the legislation, including the rules and regulations adopted by the financial authority, that might affect the provisions of this Contract, said party must immediately inform
the other thereof so that both of them may work together to identify any impact potentially impairing ALTEC’s ability to continue providing the Services or the Bank’s ability to use them. As part of this process they must
review and agree on any potential costs generated by compliance with the new legal requirements. ALTEC shall be liable for payment of any fines for its violation on any Law applicable to its operations as a supplier of computing services. The
Bank shall be liable for payment of any fines for its violation of any Law applicable to its business or its legal capacity as recipient of the Services. 
  
 If any of said legal or internal and external rule changes prohibit the Bank from retaining ALTEC’s
services, the Bank shall be entitled to terminate the Contract in advance, pursuant to the clause on the subject. 
  
 Policies 
  
 ALTEC must comply with the provisions of the Security Standards document adopted by the Bank and the Information Security Directorate of
Spain for the Santander Group, with which the parties declare that they are familiar. 
  
 At the same time, any normative document regulating Information Security that is generated by the Information Security Directorate of Spain or the Bank in Chile must also be adopted by ALTEC. 

 
 Exchange of Information 
  
 To minimize the impact of the implementation of new systems or major changes
in existing systems during a change in the version of the Services ALTEC shall provide pursuant to this Contract, so as to ensure that the Bank’s final users will know how to make proper use of those new developments and be able
to take advantage of all their possibilities, the parties must manage the process of change in coordinated fashion, carrying out the activities required to maintain close relations between the ALTEC teams engaged in implementing the new
versions of the Services and the team of individuals designated by the Bank to manage the process of change within the organization. 
  
 To manage the process of change, the parties declare that they are familiar with the Santander Group’s Regional Software Development and Maintenance
Methodology, which describes in detail the general procedure that ALTEC undertakes to follow, in compliance with the Santander Group’s regional guidelines. 
  
 Systems Proper to the Bank 
  

The computing solutions, understood as the applications, the basic software, the computing platforms, and other technological components thereof, which
have been expressly excluded from the Services to be provided to the Bank by ALTEC, shall not be part of this Contract. To ensure maximum clarity and transparency, Exhibit 5 – Systems and Platforms Not Included enumerates
and describes the systems excluded from the Services regulated by this Contract. 
  

 4 

 To all intents and purposes, if required, the inclusion thereof in the Contract shall be governed by the
terms of the additional service and services not included clause. 
  
 ALTEC Personnel 
  
 The parties make a record of
the fact that the personnel assigned by ALTEC to perform the requested services, as technical consultants, project heads, analysts, programmers, etc., whatever be their nature, shall be exclusively its dependents, and no relationship of
subordination or dependence whatsoever that might give rise to an employment status shall be created between said personnel and the Bank by virtue of said performance of services. This declaration must be included in the respective employment
contracts entered into by ALTEC and its personnel, to the Bank’s satisfaction. 
  
 It is a necessary condition for the conclusion, execution, and duration of this Contract that ALTEC must give timely fulfillment of each and all
its obligations toward the workers it assigns to provide the services entrusted to it by the Bank under the labor and social security legislation and the contracts into which it enters. 
  
 The Bank may, through the executive it designates to that end, verify
compliance with this clause and obligate ALTEC to furnish all the background information on the subject for which it is asked, regarding the personnel it assigns to provide the Services. 
  
 If the Bank is sued, fined, or penalized by any labor, social
security, or judicial authority in relation to or because of any ALTEC employee, ALTEC must immediately pay the amount claimed for and indemnify the Bank for the equivalent of the amount demanded in the suit or imposed by the
fine or penalty; the Bank may deduct additional amounts for this purpose from the value of any of the Services provided, pursuant to this Contract or Exhibits thereof. 
  
 ALTEC is solely and exclusively responsible for the payment of compensation, gratuities, vacations, overtime, social
security and health contributions (AFP and ISAPRES), tax withholdings, and other payments owed. 
  
 Every person who participates in the provision of the services to the Bank on ALTEC’s behalf must declare in writing that he/she is
familiar with and abides by the Information Security Standards adopted by the Santander Group, and that he/she will comply with all security policies, rules, and provisions that are defined by the Santander Group or by agreement between the
Bank and ALTEC. 
  
 Every person who participates
in the provision of services to the Bank must be identified in the identity and access control systems adopted by the Bank in conformity with the Santander Group’s Security Policies and Rules. 
  
 As part of this Contract’s entry into force, Exhibit No 20
– Payroll and Transfer Terms identifies the personnel to be transferred and the form and conditions for said transfer. 
  
 CLAUSE 4: ADDITIONAL SERVICES AND SERVICES NOT INCLUDED 
  
 During the Contract’s term the Bank may, upon the expiration of 1 year from the date on which the Contract enters into force, decide to reduce
the scope of the Services by no more than 10% of the average invoicing in the previous 12-month period. Said reduction of the scope of the Services must be communicated to ALTEC by the Bank, through the notification arrangements
prescribed in this Contract, not less than 3 months in advance of the date on which it is to become effective. 
  
 Additional services not included in the Contract’s scope shall be provided by ALTEC at the Bank’s request, through additional
teams and at the established prices for the period in which said teams have been hired. ALTEC and the Bank shall agree on the balance of the profiles to be assigned by ALTEC for provision thereof, which must ensure the degree of
supervision required to achieve the stipulated objective of the Service 
  

 5 

 Level Agreement. The parties must implement the new requirement as a change in the Contract’s
provisions, with which it shall become part of the Services. ALTEC shall not begin providing the additional service until all the procedures to make such a change have been completed. 
  
 Partial or Total Assignment of the Contract 
  
 ALTEC may not divest or assign this Contract or the rights stemming
from it in any form or under any title, either totally or partially, nor may it give third parties any participation therein. Notwithstanding the foregoing, it may retain or subcontract services by third parties with written authorization from the
Bank. 
  
 Neither may ALTEC pledge this Contract or
the rights emanating from it or create any lien or encumbrance thereon, nor impair any right stemming from the payments or collections pursuant to the Contract, without the Bank’s written authorization. 
  
 Payments shall be made and delivered to ALTEC exclusively, and any
form or assignment of payments, such as so-called “factoring,” is expressly excluded, unless the Bank expressly authorizes it in advance. Contracts signed with suppliers prior to the signing of this Contract are excluded from this
provision; they shall be reviewed during the Transition period. 
  
 CLAUSE 5: THE BANK’S RESPONSIBILITIES 
  
 The Bank shall be responsible for furnishing all the information, data, background, and particularities, as well as for performing manual, mechanized, or computerized procedures, where and as they are
implemented and are required for ALTEC to be able to fulfill the obligations emanating from this Contract and ensure the stipulated Levels of Service. 
  

In particular, given their importance, Exhibit No 6 – Operating Requirements Agreement describes in detail the Bank’s
undertakings that have been identified and acknowledged by both parties as critical or even moderately critical, for which the time and responsibilities for fulfillment thereof are stipulated. 
  
 The Bank accepts that it knows how to provide and/or execute each of
the undertakings stipulated in the aforementioned Exhibit, and likewise undertakes to timely update them in the event they undergo changes in any part of their content agreed upon by the parties. To ensure timely updating of said documentation, the
topic shall be addressed at the Progress Meeting. 
  
 If
ALTEC falls into any kind of default upon the provisions of this Contract as a result of the Bank’s failure to make a delivery to ALTEC or to fulfill its undertakings, or of a failure to update the aforementioned Exhibit,
ALTEC shall be exempt from any penalty or payment of indemnification to the Bank. 
  
 The Bank shall give ALTEC logistical and physical access to its facilities, consistent with the General Information Security Policy in
force. The entire Computing Platform and its respective basic software use licenses, together with the physical spaces in which they reside, are the Bank’s property, and the Bank is responsible for providing basic services and
utilities, insurance, conservation and maintenance of civil constructions for said facilities, thereby allowing ALTEC to operate the Services provided from them. Exhibit No 7 – Technological Resources provides a detailed
description of the equipment on hand and the locations that comprise the Bank’s Computing Platform. 
  
 Effects of Default on Responsibilities 
  
 To comply with the Service Level Agreement, ALTEC undertakes to follow the contingency procedures prescribed in Exhibit No 10 –
Effects of Default on Operating Requirements Agreements, as well as to make every effort in its power to ensure the continuity of the processes, having compliance with the Service Levels as the final objective. 
  

 6 

 CLAUSE 6: SERVICE LEVELS 
  
 Service Levels 
  
 ALTEC must perform the Contract in accordance with the Service Levels
prescribed in Exhibit No 11 - Technology and Systems Engineering Service Level Agreement, and Exhibit No 12 – Development and Maintenance Service Level Agreement. These Exhibits shall be reviewed during the Transition
Period in accordance with the guidelines stipulated therein. The Bank must comply with its responsibilities at a level that permits ALTEC to fulfill its obligations under the Service Level Agreement. The latter shall be reflected in
the Operating Requirements Agreement that is described in detail in Exhibit No 6 – Operating Requirements Agreement. 
  
 Adjustment of Service Level Agreement (SLA) and Operating Requirements Agreement (ORA) 
  
 The parties agree to review the Service Level Agreement and the Operating
Level Agreement every 6 months, unless: 
  

	 	•	the Transition period is under way; during its term said documents must be reviewed every 3 months; 

  

	 	•	the parties agree to perform reviews at different intervals. 

  
 Said documents shall be modified to the extent the parties consider it appropriate. 
  
 The different versions of these documents must be approved and signed by the parties, with which the previous versions shall
be annulled, unless the parties agree otherwise and attach said agreement to this Contract as an Exhibit. If the review and modification of the SLA and ORA have any impact on the price of the Services, the parties shall document the agreements they
reach on the subject. 
  
 The Bank may demand that
ALTEC make occasional and exceptional changes in any previously stipulated Service Level, and especially for the most critical Services; the Bank shall be responsible if ALTEC fails to comply with the contractual provisions in
that event. 
  
 Both the Bank and ALTEC shall be
responsible for recommending the incorporation of new indicators, standards, and penalties in addition to those prescribed herein, or the modification of existing ones, with a view to achieving an objective and quantifiable control over the Services
provided by ALTEC. In any event, they shall always be related to this Contract’s purpose and the form in which the parties have agreed on the provision of the stipulated Services. 
  
 All penalties for defaults on the standards shall be consistent with the
structure of penalties for default defined below in this clause. 
  
 Updating of the Service Levels shall be undertaken following agreement of the parties. 
  
 Analysis of the Causes of Deviations from the Service Levels 
  
 ALTEC is responsible for monitoring the causes of any deviations from the Service Levels, and it undertakes to review
and correct those that are attributable to it. The Bank shall likewise report the causes that provoked deviations from the Service Level attributable to it. 
  
 Continual reviews of the causes of deviations shall be performed at the Technology Committee meetings, with a view to
adjusting the Service Levels. 
  

 7 

 Service Level Reports 
  
 ALTEC must keep the Bank informed in detail of the progress made in the Services and the work it performs
pursuant to this Contract at all times. Without prejudice to the foregoing, said information shall be made available on the Web page provided by ALTEC, and in another medium, for use in contingencies. If the Bank requires any
additional information in relation to the foregoing or relating to any other facts or circumstances directly or indirectly related to this Contract, said information must be furnished in detail and prior to the issuance of the next edition of the
same report, but in any event within 30 days from the time the information is requested. 
  
 To comply with this contractual requirement, the following channels for information are defined; they are described in detail in Exhibit No 13 – Progress Reports. 
  

	 	•	Monthly Progress Reports 

  
 ALTEC shall generate and deliver monthly information comprising the following reports: 
  

	 	•	Executive Summary (ALTEC operating information) 

  

	 	•	Service Level of petitions (changeover time in SLA compliance by type of petition and application) 

  

	 	•	Services provided (applications for which ALTEC provides service) 

  

	 	•	Level of activity (hours incurred and margin of error, broken down by application) 

  

	 	•	ALTEC’s Human Resources 

  

	 	•	Productivity and Chargeability 

  

	 	•	Software Homogeneity 

  

	 	•	Financial Statements 

  

	 	•	On-line information available through the Petition Manager (PM) tool: 

  

	 	•	Petitions that permit a visualization of the status thereof and provide a complete detail thereof. 

  

	 	•	Billing Report, on closed monthly periods, hours incurred, billable hours, and non-billables, broken down by application, at the level of detail or summary.

  

	 	•	Information from on-line Measurements in the Petition Manager (PM) tool: 

  

	 	•	Service Level Report identifying the petitions presented and pending, the types of petition (urgent or plannable), petitions not carried out, the margin of error, and the number of
rejections. All this information may be viewed per application, at the detail level, or in summary form. 

  
 Said information shall be complemented by a weekly meeting to review compliance with the SLA and analyze the deviations in regard to each petition.

  

	 	•	Communiqué on the status of production for the item for the new accounting day. 

  

	 	•	Executive Report on the status of the problem reports. 

  

	 	•	Report on consumption in the IBM Host server. 

  

	 	•	Reports on the MAU indicators. 

  

	 	•	Publication of indicators through the Intranet Web page. 

  
 or any others agreed upon by the parties. 
  

 8 

 Measurement and Monitoring Tools 
  
 To perform its work, ALTEC may make use of tools acquired from third parties, for which it undertakes to keep the
licenses from the respective suppliers that authorize it to use said tools in force, and thereby guarantee the continuity of its services to the Bank. 
  

In addition, ALTEC reserves the right, when it sees fit, to develop its own tools for the benefit of its internal operations and for that of the
management of its Services. 
  
 To ensure the maximum
transparency of the parties, Exhibit No 15 – Tools includes a non-exhaustive list of the principal tools in force at the time this Contract is signed, which shall be reviewed during the Transition Stage. 
  
 Continuous Improvement and Best Practice 
  
 To provide continuous improvement in the Service Levels ALTEC gives
the Bank, ALTEC relies on the Regional Software Development and Maintenance Methodology to carry out the Services pursuant to this Contract. 
  
 Said methodology provides for updating through adaptation procedures, with the aim of implementing the best practices identified on the basis of the
monitoring and evaluations performed by both the Bank and ALTEC, making it possible to obtain the information needed to take actions conducive to a continuous improvement of the Services. 
  
 Penalties for Default on the Service Levels 
  
 Any default on the Service Levels for reasons attributable to ALTEC
shall generate the fines or credits for the Bank and against ALTEC specified in this provision, which shall be imposed by written communication from the Bank’s Person Responsible for Local Service to his respective counterpart at
ALTEC. If ALTEC does not agree, it may lodge a complaint with the Technology Committee within ten days following receipt of the communication, in conformity with and for the purposes of the Contract’s dispute resolution clause,
and if no such complaint is filed within that time span, the fine or credit shall become final with no further procedural requirements. Once the fine or credit is signed, whether for not having been challenged, for the expiration of the time limit
for lodging such challenges in the absence of any, or for the final resolution thereof by the appropriate authority approving its application, ALTEC must deduct the amount of said fine from the cost of the Services during the billing period
subsequent to the one in which the fine or credit became final. The penalization score shall be calculated monthly and published in the Progress Report; it shall be deducted from the affected Service line semiannually. 
  
 In the event of an advance termination of the Contract, the accrued credits
shall be deducted from the amount payable or the last billing. 
  
 The amount of the fine shall be determined on the basis of a score to be calculated on the basis of the interrupted Services’ criticality and breadth of effect, pursuant to the table provided in Exhibit No 16 – Matrix of
Penalties for Default. 
  
 If the conditions under which the
Services are provided vary, the parties shall designate, according to the criticality of the changes, a time span in which the Level of Service shall not be mandatory, and, accordingly, the aforementioned penalization scheme shall not be applicable
during the Transition period immediately after the Contract is signed. 
  
 Moreover, in the event of a sustained default by ALTEC on the standards or Service Levels for 2 consecutive months, or for 3 nonconsecutive months during the most recent 6 months, the Bank may, provided it is up to date in the
fulfillment of its obligation, demand the Contract’s advance termination pursuant to the Termination of Contract clause, without any penalization whatsoever. 
  

 9 

 CLAUSE 7: SATISFACTION SURVEYS 
  
 Initial Satisfaction Survey 
  
 Within the 30 days from the date on which the Contract enters into force,
ALTEC and the Bank must reach agreement on an initial satisfaction survey for the final users of the Services, based on a Satisfaction Survey included in Exhibit No 17 – Satisfaction Survey. The results of this survey
shall serve as the baseline, indicating the users’ initial expectations for purposes of defining the Service Levels to be provided subsequent to the Transition Period. 
  
 Satisfaction Survey 
  
 ALTEC shall conduct a satisfaction survey once every 6 months during the Contract’s term. The survey must cover the minimum sample of final
users of the Services, high-level officers, and other appropriate Bank personnel. The minimum sample shall be determined by the parties during the survey’s formulation. The survey’s timing, content, scope, and methods must be
consistent with the Initial Satisfaction Survey and shall be subject to the Bank’s approval. The parties agree that increasing satisfaction at the Bank shall be a criterion for measuring performance under this Contract.

  
 CLAUSE 8: LOCATIONS FOR PROVISION OF
THE SERVICES 
  
 ALTEC Service Offices 
  
 ALTEC’s offices shall be located in Santiago, Chile, and the
services and advising provided under this Contract may be rendered from its own premises or from the Bank’s offices when necessary to ensure faithful and complete fulfillment of the obligations prescribed in this Contract. 
  
 Mode of Service 
  
 The Services shall be duly performed from ALTEC’s offices, to
which end the Bank shall give ALTEC access to the locations where the Bank’s computing equipment and work areas are located, with respect for the Bank’s safety rules in force at the present time or adopted in the
future to that end. 
  
 Security Vis-à-Vis the
Competition 
  
 The parties acknowledge that ALTEC
may, through the personnel providing the Services to the Bank and in conformity with the provisions of this Contract, render similar services to other clients belonging to the Santander Group or not, and that this Contract imposes no
restriction whatsoever on ALTEC’s use of said personnel, third parties’ personnel, or any components of its Computing Platform for such purposes, in accordance with the legal requirements in force. 
  
 In any event, ALTEC must maintain the confidentiality of the
Bank’s information under all circumstances until 2 years after the termination of this Contract. ALTEC may not, even if this Contract has terminated, give third parties information the Bank has designated as confidential.

  
 CLAUSE 9: CONTROL AND MANAGEMENT OF
THE SERVICE 
  
 The operating model shall be comprised of three
major components: ALTEC, the Bank, and the Systems Executive Committee (SEC). The principal functions of each such component shall be as follows: 
  

The Systems Executive Committee shall be responsible for defining the IT Strategy (alliances, governance, purchasing strategy, technological platform)
and submitting proposals to the Regional Systems Council. The Committee shall approve rules and standards (for development, security, quality, infrastructure, architecture), and shall perform tasks of coordination, control, and approval of
ALTEC’s performance. 
  

 10 

 The Bank shall be responsible for purchases of the equipment, inputs, programs, and licenses
required for the Services to be provided, as well as for managing the demand, monitoring the budget, and monitoring the Services. 
  
 ALTEC shall be responsible for providing the Services, proposing rules and standards, possessing the requisite technological knowledge, and
providing technological advising, coordination of offering and control of the Service, quality control, and control of resources. 
  
 Control over the management of this Contract shall be conducted under the following relationship between ALTEC and the Bank: 
  

	 	•	The Technology Committee 

  
 This Committee shall be comprised of the Bank’s top management and ALTEC’s top management. It shall meet at intervals to be
defined during the Transition stage, and shall have the following tasks: 
  

	 	•	Analysis of the impact of the new Local IT strategies 

  

	 	•	Approval of the variations in the SRA having an economic impact 

  

	 	•	Monitoring of the Service Levels 

  

	 	•	Budgeting for expenses and investments 

  

	 	•	Progress Meetings 

  
 These meetings shall be held at intervals to be defined during the Transition stage and with the participation of the Person Responsible for Local Service
(RLS) and the General Manager of ALTEC. The purposes of said meetings shall be: 
  

	 	•	Review of the most important projects 

  

	 	•	Approval of SRA variations having no economic impact 

  

	 	•	Proposals to the Technology Committee for modifications of the SRA having economic impact 

  

	 	•	Review of the status of petitions and the backlog 

  

	 	•	Solution of issues relating to the Services 

  

	 	•	Review of the budget (deviations and projections) 

  

	 	•	The number of meetings and communication circuits required for monitoring and control of the petitions (projects, ongoing and normative maintenance), levels of decision, and
services shall be defined. 

  
 CLAUSE 10: INTELLECTUAL PROPERTY 
  
 Copyrights 
  
 An express record is made of the
fact that all the copyrights, rights over works, invention patents, and any other rights of any kind that may correspond to the processes carried out by ALTEC by virtue of this Contract, as well as all the reports, studies, descriptions, or
other documents or materials that are generated in connection with it, shall belong both to the Bank and to ALTEC. 
  
 Accordingly, in cases where the Bank asks for the development of a program, application, computing product, or other work of a similar nature, the
Bank shall become the owner of such resulting products. 
  

 11 

 CLAUSE 11: DATA 
  
 Ownership of the Data 
  
 All information stemming from the Services ALTEC performs for the Bank in compliance with this Contract shall be the Bank’s
property. By the same token, if Bank information is held at ALTEC offices, it must be kept by ALTEC at a safe place to which only persons determined by the Bank have access, and ALTEC shall be liable pursuant to
the provisions of the Damages, Losses, and Indemnities clause if negligence in applying the established controls leads to a loss, theft, removal, or destruction of Bank information. 
  
 The person at the Bank responsible for their creation, conservation,
and integrity, or the principal user thereof at the Bank, shall be understood as the owner of the information. Accordingly, the owner’s responsibilities shall be: 
  

	 	•	To estimate the information’s value for the Bank prior to its use. 

  

	 	•	To determine the level of control required by it, with support from Information Security. 

  

	 	•	To define the criteria for authorizing access to the information by users. 

  

	 	•	To verify the controls over the information and modify those that are found to be inadequate. 

  

	 	•	To authorize any transfer of information to another institution. 

  
 The parties must generate and keep up to date a record of all the owners of the Bank’s information, consistent with the ownership assignment
criteria that are agreed upon by the two institutions within a period not exceeding 6 months after this Contract goes into force. The responsibility for generating said information shall lie with the source of demand on the Bank’s part
and the person assigned by ALTEC as his/her counterpart. 
  
 Correction of Errors 
  
 All error correction
procedures in the Services to the Bank must be documented and registered on the basis of the Problem Report procedures. In any event, any error correction procedure that implies the participation of ALTEC personnel must be authorized,
registered, and monitored by Bank Information Security personnel. 
  
 No ALTEC officer, other than those explicitly authorized by Information Security and associated with processes of utilization of systems in production, may have access to the production data and software to
read and/or modify information on the Bank’s systems. Procedures shall be available to approve exceptions for any requests for access of this nature. 
  
 There shall be formal Software Change Control procedures associated with Problem Reports, which shall be adopted by the
Bank to ensure compliance with the Bank’s quality standards and software change controls. 
  
 Return of Data 
  
 ALTEC undertakes to deliver the information and data owned by the Bank to the latter’s full satisfaction and under any circumstance.

  
 In the event the Contract is terminated, the delivery of data
shall be regulated in full by the provisions of the Assistance in Case of Termination of Contract clause. 
  
 Data Security 
  
 The definition of the Information Security policies and rules, as well as the responsibility for enforcing compliance therewith, lies with the
Bank’s Information Security function, independently of the counterparts that may exist at ALTEC to provide support in ensuring its compliance with said policies when handling Bank information. 
  

 12 

 Management of access to Bank data and applications shall lie with the Bank’s
Information Security unit. Only said unit, through the controls established in conjunction with the information custodians, shall determine which ALTEC personnel shall have access to what information, processes, or tools that may affect the
Bank’s production. 
  
 ALTEC must ensure the
physical security of the handling and storage of data, in accordance with the General Information Security Policy established by the Bank and the Santander Group through their Security Standards. 
  
 ALTEC shall be responsible for ensuring the information’s
availability through the preparation of, and participation in, the technological plans of the appropriate Business Continuity Plan, which shall be coordinated by the Bank’s Information Security unit. 
  
 ALTEC must comply with the General Information Security Policy
established by the Bank and the Santander Group. 
  
 ALTEC must likewise comply with the legal provisions in force, and in particular with those governing the Services provided, those of Chapter 1-10 (Banks and Financial Institutions), Subject: Conservation and Elimination of Files, of
the Superintendency of Banks and Financial Institutions’ Compendium of Rules and Regulations. 
  
 CLAUSE 12: RECOVERY IN CASE OF DISASTER AND FORCE MAJEURE 
  
 Disaster Recovery Plans 
  
 ALTEC must be responsible for having technological contingency plans in existence, which shall be part of the Business Continuity Plan that ensures
the continuity of critical processes in the event of major disasters. 
  
 The analysis of risk and impact on the business in reference to the contingency plans shall be the Bank’s responsibility, and in that case ALTEC must propose the technological recovery plans to the Bank within 60
days after notification to that end, on the basis of the risk analyses and recovery needs determined by the Bank. 
  
 The costs and implementation of the Technological Recovery Plan are defined within the costs of the Services included in this Contract. 
  
 The detail of the resources embraced by the Technological Recovery Plan, the
degree of criticality, and the actions to be taken that are embodied in policies and procedures must be reflected in the Technological Contingency Plan’s documentation; they are enumerated in Exhibit No 18 – Detail of Resources and
Procedures for the Recovery Plan. 
  
 The Technological
Contingency Plan must be tested as determined by agreement of the parties. The needs to be addressed, the degree of interruption of activities provoked by the tests, and the personnel’s need to become familiar with the plan itself shall be
among the criteria for designation of the testing calendar. Said calendar must be agreed upon by the Bank and ALTEC. 
  
 The Bank’s Information Security unit shall be responsible for ensuring compliance with the policies associated with the Technological Contingency
Plan, i.e., ensuring the quality of its documentation, tests, scope, and currency. 
  
 Force Majeure 
  
 Any
default by ALTEC or the Bank on their respective contractual obligations shall be a default on this Contract, unless said default is caused by, or has its origin in, events that can be described as comprising force majeure or acts of
God. 
  
 Force majeure or acts of God are understood as fire,
flood, earthquake, the natural elements, acts of war, riots, civil disturbances, rebellions or revolutions, terrorist acts, or any other causes that cannot be resisted and are 
  

 13 

 beyond the parties’ reasonable control. The affected party must advise the other in writing, via fax
or e-mail, of the cause of the force majeure or act of God that has occurred, within a maximum of 2 hours from the time it learns of such event. 
  
 The same notification must be given when the cause of force majeure ceases. The affected party must receive confirmation of receipt of said notification
by the other party, by the same route. 
  
 In such cases of acts
of God or force majeure, the parties shall be relieved of their contractual obligations and neither one may demand that the other comply with its obligations, nor claim for the payment of indemnification of any kind. The foregoing does not relieve
the parties of the need to fulfill other obligations not impaired by the event that is the cause of force majeure or act of God. 
  
 If the event comprising force majeure or an act of God, regardless of the Service Level Agreement, lasts more than 24 hours for the most critical Services
for the business, or more than 10 days for the other Services, either party may terminate the Contract, without the need for any legal action or judicial intercession, by advising the other party in writing upon the expiration of the aforementioned
time spans. 
  
 Nevertheless, changes originating in a law or a
rule or regulation adopted by the financial authority shall not be subject to the provisions of this clause. 
  
 CLAUSE 13: FORM OF PAYMENT AND INVOICING 
  

The value that the Bank shall pay to ALTEC for the Services provided pursuant to this Contract shall be expressed in the Development
Units defined by the Central Bank of Chile, or by their respective successor mechanism or institution. The Bank may pay the price of the Services in pesos, to which end ALTEC must issue an invoice in said currency translated at the
published exchange rate for the date on which ALTEC issues its invoice. Said value shall be comprised of one-twelfth of the annual fixed fee and a variable amount. Both such amounts shall be paid by the Bank at monthly intervals.

  
 The fixed amount payable at monthly intervals includes the
Services prescribed in this Contract, regardless of the number of hours required. 
  
 The variable amount corresponds to the work actually performed by ALTEC for the Bank, measured in man/ hours, for the normative maintenance, leveling, and evolutive Services the Bank has demanded,
i.e., excluding the hours attributed to corrective and perfecting/adaptive maintenance. The price shall be determined by multiplying the number of hours attributed to the Bank in the month for the contractually prescribed Services by the unit
price per man/hour. 
  
 Invoices shall be paid monthly within the
first 10 business days of the month following the one in which the services were provided (expired month). The date from which the number of days shall be counted is that of the Bank’s receipt of the document to its satisfaction, i.e.,
following analysis of the attribution of associated expenses. 
  
 Nevertheless, the maximum time limit for payment to ALTEC may not exceed the 15th business day of the following month. If said time limit is exceeded, ALTEC may collect the maximum legally permitted interest. 
  
 The fees for the Services are described in detail in Exhibit No 19
– Fees for Service. 
  
 Payment in the Transition
Period 
  
 Given the circumstances in which this process will
be carried out and since it is a transition period, both parties have agreed that the Bank shall pay, up to the 5th day of each month during the 6 months from the date on which this Contract enters into force, an amount equivalent to the costs the Bank would have incurred if it had continued its contractual relationship with the persons,
services, and others, detailed in Exhibit No 14 – Payments in Transition Period transferred to ALTEC. Said payment must be made within the first 10 business days following the commencement of service provision. 
  

 14 

 Detail of Invoicing 
  
 The invoices issued by ALTEC must be sent directly to the Bank’s Invoice Management Unit, located at
Bombero Ossa 1068, 11th floor, Central Santiago commune, or to the other address indicated by the Bank.

  
 The document must be clearly identified as being sent to the
attention of: BANCO SANTANDER – CHILE, with the following gloss: “PROVISION OF SERVICES AND ADVISING ON DEVELOPMENT AND MAINTENANCE OF APPLICATIONS, AND UTILIZATION AND MAINTENANCE OF COMPUTING PLATFORM,” in addition to containing all
the data inherent to its purposes. 
  
 Together with the
foregoing, each invoice must be accompanied by a detailed report on both the composition of the charge and the Services provided. 
  
 Given the foregoing, the Bank reserves the right to reject all improperly or incompletely issued documents. 
  
 CLAUSE 14: TAX COMPLIANCE REGARDING THE BENEFITS
PROVIDED UNDER THIS CONTRACT 
  
 The parties agree that, given
the nature of the Services that will be provided by virtue of this Contract, consisting of the improvement and/or periodic maintenance of computer programs, as well as the activities of advising on computing issues, software development, and
technological and systems engineering services, and pursuant to the instructions issued by the Internal Taxation Service through Circulars No 930 of March 18, 1991, No 1940 of July 9, 1996, and No 33 of January 4, 2001, all relating
to the application of Article 20, Part 5 of the Income Tax Act and Article 2, Part 2 of the Sales and Service Tax Act, said Services and benefits that ALTEC has agreed upon in this instrument with the Bank are not subject to the
Value-Added Tax (VAT) and accordingly, said tax shall not be charged on them in the invoices. 
  
 CLAUSE 15: AUDITS 
  
 The Bank or external auditors retained by either party, or the Chilean or Spanish regulatory authorities, may freely make the inspections they
consider necessary to verify compliance with the aforementioned legal requirements and other obligations prescribed in this Contract, and ALTEC is obligated to provide them with all necessary facilities to that end. 
  
 ALTEC shall likewise provide the Superintendency of Banks and
Financial Institutions with the facilities needed for it to perform inspections at its installations in relation to this Contract, with a view to complying with the fourth paragraph of Point II., Data Processing Outside the Institution, Number 1,
General Conditions, of Chapter 20-7 of the Superintendency’s Compendium of Rules and Regulations. 
  
 CLAUSE 16: CONFIDENTIALITY 
  
 ALTEC shall give confidential status, and shall provide the care and discretion merited by confidential information pursuant to the Information
Classification Policies established in the Santander Group Security Standards. Insofar as the Bank has classified its information as confidential, the treatment ALTEC shall give said information shall be in accordance with the
appropriate treatment of each class of information, as prescribed in the Information Classification Policy and Procedures that are adopted. 
  
 ALTEC must take care at all times to avoid falling into any violation of the secrecy and/or reserve and/or treatment of personal data provisions of
the laws on current and checking accounts at banks in the General Banking Act and/or Law No 19628, whether said information is on paper, on a magnetic medium, or on a different support. These commitments apply to all the representatives and
personnel of ALTEC and third parties working on ALTEC’s behalf in the provision of the Services pursuant to this Contract, and shall apply even after the Contract’s term has finished. All of them must declare in writing that
they will act in strict accord with the aforementioned obligations and rules. 

	

  

 15 

 Infringement of this obligation, after demonstration of negligence on ALTEC’s part, shall be
grounds for the immediate termination of the Contract, in which case the Bank reserves the right to claim for the indemnification to which it may be entitled. 
  
 Moreover, ALTEC shall make every effort and give all possible cooperation for the judicial and extrajudicial
clarification of facts that, whether of a criminal nature or not, being misplacements, assaults, thefts, terrorist attacks, etc., adversely affect Bank property, offices, facilities, or premises where personnel for whom it is responsible are
working. 
  
 CLAUSE 17: REPRESENTATIONS
AND WARRANTIES 
  
 For purposes of mutually warranting the
relationship between ALTEC and the Bank, the parties must abide by the clauses included in this Contract for such purpose, and in particular the clauses governing indemnities, fines, or other payments to compensate for defaults,
advance termination, and other special events. 
  
 Special
Events Associated with ALTEC Personnel 
  
 ALTEC must
have a Contingency Plan to cope with potential situations such as strikes or other labor conflicts, or any other disturbance of normal activity among the personnel assigned to provide the Services prescribed by this Contract. 
  
 The general guidelines of the aforementioned Contingency Plan shall be
proposed to the Bank by ALTEC and agreed upon by the parties within a period following the signing of this Contract designated by agreement. 
  
 ALTEC shall inform the Bank 30 days in advance of any labor negotiations that might give rise to a strike, provided the legal time limits
allow it to do so in advance. 
  
 CLAUSE
18: DISPUTE RESOLUTION 
  
 Any dispute that may arise between
the parties, in regard to the construction of any of the clauses and stipulations of this Contract or the fulfillment of ALTEC’s or the Bank’s obligations hereunder, must be submitted to the procedure described below, without
prejudice to the application of the special arrangements provided for in other clauses for particular situations. 
  
 The Technology Committee shall meet at the written request of any of the Persons Responsible for Local Service, within 10 days after such a meeting was
requested, to make an effort to resolve the dispute. If the Committee does not meet within that time limit, it shall be understood to have been unable to resolve the controversy, difficulty, difference, or dispute in accordance with this provision.

  
 The Technology Committee may appoint one or more
representatives of each party to examine the situation and propose a way to resolve the dispute within 5 business days. Said time limit may be extended if the Technology Committee considers it necessary. Said representatives shall have the status of
advisors to the Committee and shall not be deemed to be members thereof. The Committee shall meet as often as it deems necessary to gather and provide all the information pertinent to the issue that it considers appropriate and relevant for purposes
of the dispute’s resolution. The Committee must discuss the problem and negotiate in good faith in an effort to resolve the dispute without the need to resort to a formal process. 
  
 All reasonable demands one party may make on the other for non-privileged information relating to this Contract shall be met
during the course of said negotiation, so that each party may have all the information on the other’s position. 
  
 The specific format for these discussions shall be at the Technology Committee’s discretion, but it may include the preparation of agreements made
under written statements of fact or statements of position presented to the other party. 
  

 16 

 If the Committee, having met, cannot resolve the dispute within 15 days of the request, the parties shall
be at liberty to commence the arbitration procedure described in the respective clause of this Contract, and/or take the legal actions or request the formal proceedings they consider appropriate. 
  
 All agreements or decisions of the Systems Technology Committee must be
adopted by a majority of its members. 
  
 Continuity of the
Services 
  
 Unless it is impossible to do so or the
Bank has exercised its power to terminate this Contract pursuant to Clause No 19, both parties agree to continue fulfilling their respective obligations pursuant to the provisions of this Contract as long as the dispute is pending
resolution, unless and until such obligations expire or are deemed terminated pursuant to the foregoing. The Technology Committee itself must decide on said impossibility, if so requested, within a term of 3 business days, and if it does not reach
agreement thereon within said time span, it shall cease operating and the parties shall be at liberty to commence the legal actions or formal proceedings they consider appropriate. 
  
 Conciliation and Arbitration Committee 
  
 The parties shall agree that any difficulty or dispute that may arise between then in regard to the application,
construction, duration, validity, or execution of this Contract or for any other reason shall be submitted to a Conciliation Committee comprised of the following persons: Mr. Sergio Urrejola Monckeberg, and in his absence, impediment, or
resignation, Mr. Eustaquio Martínez Martínez. If for any cause or reason the Conciliation is not successful, the issue shall be submitted to Arbitration before an Arbitral Panel, which shall act as a collective court, competent in law
and in equity. Said panel shall be comprised of the aforesaid persons, who shall not only convene as an Arbitral Panel but must also appoint a third person by agreement, who shall chair the panel. In the absence of an agreement on the person who is
to chair said Arbitral Panel, he/she shall be appointed in accordance with the Procedural Regulations for Arbitration of the Santiago Arbitration and Mediation Center. The parties shall confer an irrevocable special power of attorney on the
Cámara de Comercio de Santiago A.G. (Santiago Chamber of Commerce), so that at the written request of any member of the Arbitral Panel appointed by them, it may designate the Chairman of the Arbitral Panel. The designee must be any of the
attorneys who are members of the group of arbitrators of the Santiago Arbitration and Mediation Center. The Arbitral Panel’s resolutions shall be adopted by simple majority, and there shall be no appeal whatsoever therefrom, wherefore the
parties expressly waive any such appeal. The Arbitral Panel must determine its rules and procedures, which must in all cases include a hearing of the parties and arrangements for receiving the evidence and information they may contribute, and as
soon as its members have been appointed, it must prescribe the way in which petitions or claims are to be formulated and the arrangement for notification it will use to inform the parties of the resolutions or decisions it adopts. The Panel is
likewise specially empowered to decide on all matters coming under its authority and/or jurisdiction. The members of the Conciliation Committee designated by the parties may be replaced by them. 
  
 The Contract’s Validity 
  
 If a court or other competent authority should determine that a part,
paragraph, or clause of this Contract is illegal, null and void, or inconsistent with any legal provision, that determination shall not affect the remaining parts hereof, and it shall obligate the contracting parties to renegotiate the part,
paragraph, or clause in question. 
  
 For any effect stemming
from this Contract, the parties submit to Chilean law. 
  
 CLAUSE 19: THE CONTRACT’S TERMINATION 
  
 For Act of God, Force Majeure, or Legal Impediment 
  
 This Contract shall terminate in advance, without charges or payments of any kind for that reason, if there occurs an act of God or a case of force majeure that totally or permanently prevents ALTEC from providing the stipulated
Services. In addition to impediments that are permanent by their nature or characteristics, those which 
  

 17 

 in practice do not allow ALTEC to restore provision of the contractual Service within 24 hours for
the Services most critical to the business, or 10 days for the other Services, after the act of God or case of force majeure occurs, shall be deemed permanent. 
  

For Grave Default on the Parties’ Obligations 
  
 The party that is up to date in the fulfillment of its obligations may demand advance termination of this Contract, with resulting indemnification of
damages, if the other party incurs a grave default on any of its obligations. 
  
 Special situations: 
  

	 	•	For purposes of advance termination of this Contract due to ALTEC’s default on its obligations relating to the service indicators, the provisions of the Penalty clause
and Exhibit shall be applied. 

  

	 	•	For purposes of advance termination of this Contract due to failure to make full and timely payment of the stipulated price or fee, the Bank’s delay in making payment
for up to 10 consecutive days shall not, in and of itself, be deemed to constitute a grave default. 

  

	 	•	If the Contract terminates due to a grave default on the Bank’s obligations, it shall pay ALTEC the monthly installments or the partial installments for fractions
of months that it owes, having been earned and invoiced, plus the corresponding penalty interest on arrears, if any. 

  
 For Change of Ownership of ALTEC 
  
 The Bank may request advance termination of this Contract without any obligation to pay ALTEC if the Santander Group ceases to own a
majority holding in the capital and/or in the administration and management of ALTEC, but the latter shall be obligated to continue providing the Services to the Bank until the latter decides otherwise. 
  
 At the Bank’s Will, Without Statement of Cause 
  
 After the expiration of 24 months from the date on which the contract goes
into force (6 months of transition and 18 months of standard service), the Bank may terminate this Contract in advance, at its sole discretion and without statement of cause, giving ALTEC notice by certified letter issued by a notary
of the city of Santiago, Chile at least 3 months in advance of the date on which this Contract is to terminate. 
  
 CLAUSE 20: CONTRACT TERMINATION FEES 
  
 In the event the Contract terminates in advance without a statement of cause after the expiration of the period stipulated in the preceding clause, the
Bank must pay ALTEC the amount of investment made in association with this Contract and not yet depreciated, within the 30 consecutive days following the termination date and according to the month in which said termination takes
place, as an indemnification for damages appraised by agreement of the parties. 
  
 CLAUSE 21: ASSISTANCE IN THE EVENT OF THE CONTRACT’S TERMINATION 
  
 Whatever the cause, reason, or motive for the termination of this Contract,
even if it is for the Bank’s default on its obligations or at its will without statement of cause, ALTEC shall be obligated to provide the services the Bank instructs it to, insofar as they are prescribed in this Contract,
and to perform an orderly transfer of the data, source programs, services, functions, and operations prescribed in this Contract to the Bank or the supplier(s) designated by the Bank, or with the Bank itself in their absence,
upon the following terms: 
  

	 	•	The Bank must be up to date in payment of the fee, price, or values of this Contract, as well as penalty interest on arrears, if any. 

  

 18 

	 	•	The provision of services and the transfer shall be carried out during the period stipulated in the transition plan drawn up by agreement of the parties prior to the effective date
of termination, which may not exceed 6 months, renewable a single time for another 6 six months, and shall include at least the key personnel and services needed to establish and ensure operational continuity to the Bank’s satisfaction
at the facilities and with the supplier designated by the Bank, or with the Bank itself in the latter’s absence. 

  

	 	•	The monthly charges generated by application of the provisions of this clause may not exceed the monthly charge for the last month of the Contract’s currency for equivalent
resources used or services provided. Nevertheless, if the Contract’s termination was caused by a fact attributable to ALTEC, the latter must bear the cost of the transfer of services to the Bank or to the suppliers it indicates.

  

	 	•	If the Contract terminates due to the Bank’s default on its obligation to make timely payment of the charges for the Services, to be entitled to this aid or cooperation,
the Bank must have paid the Advanced Termination of Contract Charges, and shall in addition pay an advance equivalent to the budgeted value of the additional resources and expenses, which advance shall be paid within 30 days after the
termination of the aid or cooperation to which said resources and expenses apply. 

  
 All the applicable provisions of this Contract shall be extended and shall be enforceable during the entire period of orderly transfer of the Services,
with the exception of the undertakings for Service indicators and standards, which shall be modified and finally agreed upon by the parties at the beginning of said period and shall reflect the responsibilities incumbent on each party while
maintaining the criteria employed in this Contract for purposes of the determination of fines for default. Any discrepancy or difficulty between the parties in the establishment of said undertakings and responsibilities shall be resolved as
stipulated in the dispute resolution clause. 
  
 ALTEC
shall accept and cooperate in allowing the Bank to make job offers to, and hire, personnel assigned by ALTEC to provide the Services prescribed in this Contract upon its termination. Likewise, ALTEC shall not oppose or make
counteroffers of employment to the personnel assigned by ALTEC to provide the Services prescribed in this Contract whom the Bank decides to rehire, but this limitation shall expire 120 days after the date set for the termination of
this Contract. 
  
 The transfer of data, copies, backups,
documentation, and reports generated for the process of transfer of the Services must be consistent with the confidentiality criteria prescribed in the Confidentiality clause. 
  
 CLAUSE 22: DAMAGES, LOSSES, AND INDEMNITIES 
  
 The parties shall be liable in their performance of this Contract for slight
faults and/or faults on the part of their representatives, agents, and officers in general. The party in default must therefore indemnify the other party for all losses caused by its negligence. 
  
 In the event ALTEC has provided the Bank with a new service or
has updated existing services, ALTEC shall bear no liability whatsoever for damages stemming from the Bank’s inappropriate, inadequate, or incorrect use of the software. However, in the latter case it undertakes to take the
necessary steps to correct the problem. 
  
 ALTEC shall be
liable to the Bank for any fine the Superintendency of Banks and Financial Institutions may impose due to delays in the implementation of an updating or modification of software required by said Institution and for whose implementation the
Bank has requested ALTEC’s services in good time, provided said delay is due to causes attributable to ALTEC. 
  
 ALTEC shall not be liable for the Services it provides in regard to their use for a given end or a particular purpose considered by the Bank
in requesting the work. Neither shall ALTEC warrant that the Services it provides will operate uninterruptedly or free of error. But it does undertake to take the necessary steps to correct problems of that kind. 
  

 19 

 CLAUSE 23: PUBLICITY 
  
 Each party shall submit to the other all the advertising materials, printed
sales literature, press releases, and other aspects of publicity relating to this Contract that mention the other’s name or trademark or which could be inferred from the language employed in relation to said name or trademark; and the parties
shall not publish or use said advertising, sales promotion, press releases, or other publicity without first giving the other party an opportunity to examine said communications and ask it for the changes it considers appropriate in accordance with
its policies on publicity communications. Nevertheless, either party may include the other’s name and a description of the work done pursuant to the provisions of this Contract in its internal bulletins and documents and in its Annual Report to
the Shareholders, as well as when required to do so for legal, accounting, or regulatory purposes. 
  
 CLAUSE 24: DOMICILE AND NOTICES 
  
 Domicile 
  
 For all of the effects stemming from this Contract, the parties establish their domicile in the city of Santiago, Chile. 
  
 Notices 
  
 All the notices or communications prescribed in this Contract or which may
be made by the parties for any cause or reason and for which a specific different form of transmission is not prescribed shall be sent in writing to the address of the party to which they are addressed in the form of a letter delivered by hand, by
certified mail, fax, or electronic mail, addressed to the General Manager of ALTEC or the Bank, as the case may be. 
  
 If a letter has been delivered by hand or transmitted by fax or e-mail, the date of delivery of the letter or transmission by fax or e-mail shall be
deemed to be the date of notification. If said letter has been sent by certified mail, the fifth day after its deposit with the postal service, which shall be evidenced by the receipt issued by the postal service, shall be deemed to be the date of
notification. 
  
 ALTEC’s address for all the
purposes mentioned herein is Avda. Andrés Bello No 2777, 16th floor, Las Condes commune, Santiago,
Chile. Its telephone and fax numbers are 562 – 2706790 and 562 – 2706791, respectively. 
  
 The Bank’s address for the same purposes is Calle Bandera No 140, Santiago. Its telephone and fax numbers are 562 – 6474325 and 562
– 6724237. 
  
 CLAUSE 25: COPIES AND
CAPACITIES 
  
 Copies 
  
 This instrument is signed in four identical counterparts, two of which shall
be held by each party. 
  
 Capacities 
  
 Mr. Gonzalo Romero Astaburuaga’s legal capacity to represent Banco
Santander – Chile is evidenced in a public document dated September 9, 2003, executed before Notary Public Nancy De la Fuente Hernández. Alberto Patricio Melo Guerrero’s legal capacity to act in representation of ALTEC is
evidenced in a public document dated February 27, 2001, executed before Notary María Gloria Acharán Toledo. 
  

							
	 /s/  Gonzalo Romero Astaburuaga

	  	 /s/  Patricio Melo Guerrero

	For	 	BANCO SANTANDER CHILE	  	For	 	ALTEC S.A.
	 	 	Gonzalo Romero Astaburuaga	  	 	 	Patricio Melo Guerrero

  

 20

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