Document:

Severance Agreement with Joseph T. Kingsley

 Exhibit 10.2 
 SEVERANCE AGREEMENT 
 This SEVERANCE AGREEMENT (the “Agreement”) is made and entered
into effective May 24, 2007, by and between Arrowhead Research Corporation, a Delaware corporation (the “Company”), and Joseph T. (Ted) Kingsley, an individual (the “Executive”). 
 WITNESSETH: 
 WHEREAS, the Compensation
Committee of the Board of Directors of Arrowhead Research Corporation wishes to enter into an Agreement with Executive; 
 NOW, THEREFORE, in
consideration of the premises and the mutual covenants and agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, such parties, intending to be
legally bound, agree as follows: 
 1. Employment Duties. 
 (a) The Company hereby employs the Executive as President and Chairman and Chief Financial Officer to perform the customary duties and bear the customary responsibilities of such positions and such other duties and
responsibilities, commensurate with such positions, as the Executive reasonably shall be directed from time to time by the Board of Directors (the “Board”) of the Company to perform or bear, which duties and responsibilities shall be
consistent with the provisions of the Bylaws of the Company in effect on the date hereof that relate to or bear upon the duties of a Chairman of the Board and Chief Executive Officer of the Company. 
 (b) The Executive hereby accepts such employment and agrees to render the services described above. 
 (c) The principal place of employment of the Executive hereunder shall at all times be the Pasadena, CA area or other location(s) as may be mutually
acceptable to the Executive and the Board of Directors. 
 2. Term of Employment. 
 Executive is an “At Will” employee under the laws of California which means the Company can terminate him at any time for any reason. The
Executive has signed the “Employee At-Will, Confidential Information and Invention Agreement” which is attached to this Agreement as Attachment A. 
 3. Severance of Employment 
 The following shall govern Executive’s retirement or termination (except in the case of
Section 5 below): 
  

	 	•	 	 Should Executive voluntarily retire or voluntarily terminate from Arrowhead Research Corporation or its successor for any reason or should Executive be terminated
from Arrowhead Research Corporation or its successor for any reason, Executive will be paid one (1) years salary equal to his highest salary while at Arrowhead Research Corporation. 

  

	 	 •
	 	 Each month, the payment to Executive will be 1/12th of the total amount due under the Agreement. Should Executive die before terminating from Arrowhead or after terminating from Arrowhead but before the full
one (1) year period has ended, his estate will be paid until the full one (1) year period has ended. 

  

	 	•	 	 If Mr. Kingsley or his estate receives any payments from the Company’s Long Term Disability Plan during this one (1) year term, the Company will be
allowed to pay the difference between his salary and the long term disability payment. 

 SEVERANCE AGREEMENT 
  

	 	•	 	 During the one (1) year period, Executive will, at his option, consult with the company if asked (except as noted in Section 9 below). Executive can
decline to consult if he chooses to do so (except as noted in Section 9 below) but the payments will continue until such time as one (1) full year has been paid. 

 4. Payment 
 Payments of Executive will be before any
federal or state tax withholding. Payments will be monthly as stated above but Executive will not accrue any sick or vacation time once he has terminated from Arrowhead Research Corporation. He will be given a 1099 each applicable year and will be
responsible for any and all taxes. Executive will be paid any accrued vacation (less applicable taxes) due him at Date of Termination. 
 5. Termination
by the Company Cause. 
 The Company may terminate the Executive at any time for any reason. However, the Executive and/or his estate are
due no payment if Executive is terminated for “Cause” as defined in the following paragraph: 
 The Executive acts, or fails to
act, in a manner that provides “Cause” for termination. For purposes of this Agreement, the term “Cause” means (1) the Executive’s indictment for, or conviction of, any crime or serious offense involving money or other
property which constitutes a felony in the jurisdiction involved, (2) the Executive’s willful and continual neglect of, or failure to discharge, duties (including fiduciary duties), responsibilities and obligations with respect to the
Company hereunder, provided such neglect or failure remains uncured for a period of thirty (30) days after written notice describing the same is given to the Executive by the Company and, provided further, that isolated and
insubstantial neglect or failures shall not constitute Cause hereunder, (3) the Executive’s violation of the provisions of Section 8 below or of any confidentiality provisions contained in Exhibit A hereto, or (4) any act of
fraud or embezzlement by the Executive involving the Company or any of its Affiliates. All determinations of Cause for termination pursuant to this Section 5 shall be determined by the Board, and shall require at least a two-thirds
(2/3) vote of the entire Board, excluding the participation of the Executive, should he then be a member of the Board. 
 6. Confidentiality.

 The Executive agrees that the “Employee Proprietary Information and Ownership of Inventions Agreement” annexed hereto as Exhibit
A shall be deemed incorporated in and made a part of this Employment Agreement. Notwithstanding any other provision of this Agreement, the Executive shall continue to be bound by the terms of such Proprietary Information and Inventions Agreement for
a period of five (5) years after the expiration or termination of this Agreement for any reason. The Executive and the Company agree that following expiration or termination of this Agreement for any reason the Proprietary Information and
Inventions Agreement shall be applicable only to material, non-public proprietary information of the Company. 
 7. Privacy. 
 Executive is a Reporting Person under the rules and regulations of the SEC. As such, this Agreement may have to be filed with the SEC and the terms of
this Agreement must be included in the annual proxy to shareholder. Therefore, as condition for receiving the Agreement, you waive all rights to privacy. 
 8. Non-Competition, Non-Solicitation and Non-Disparagement. 
 (a) At no time will the Executive knowingly make any written
or oral untrue statement that disparages the Company or its Affiliates in communications with any customer, client or the public. 

 SEVERANCE AGREEMENT 
  

 (b) At no time will the Executive knowingly solicit any of the people current employed by the
Company or its Affiliates. 
 (c) At no times will the Executive, solicit any of the customers of the Company or its Affiliates. 

(d) If the Executive commits a breach, or threatens to commit a breach of Section 8(a), (b) or (c), the Company shall have the right and
remedy to have the provisions of this Agreement or Exhibit A, as the case may be, specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed that any such breach or threatened breach will cause irreparable injury
to the Company and that money damages will not provide an adequate remedy to the Company. 
 (e) Anything else contained in this Agreement
to the contrary notwithstanding, the parties hereto intend to and hereby do confer jurisdiction to enforce the covenants contained in this Section 8 and Exhibit A upon the courts of any state within the geographical scope of such covenants. In
the event that the courts of any one or more of such states shall hold any such covenant wholly unenforceable by reason of the breadth of such scope or otherwise, it is the intention of the parties hereto that such determination not bar or in any
way affect the Company’s right to the relief provided above in the courts of any other state within the geographical scope of such other covenants, as to breaches of such covenants in such other respective jurisdictions, the above covenants as
they relate to each state being, for this purpose, severable into diverse and independent covenants. 
 9. Cooperation. 
 Following Executive’s termination of employment, the Executive agrees to cooperate with, and assist the Company to ensure a smooth transition in
management and, if requested by the Company, will make himself available to consult during regular business hours at mutually agreed upon times for up to a three-month period thereafter. At any time following his termination of employment, the
Executive will provide such information as the Company may reasonably request with respect to any Company-related transaction or other matter in which the Executive was involved in any way while employed by the Company. The Executive further agrees
to assist and cooperate with the Company in connection with the defense or prosecution of any claim that may be made against, or by, the Company or its Affiliates, in connection with any dispute or claim of any kind involving the Company or its
Affiliates, including providing testimony in any proceeding before any arbitral, administrative, judicial, legislative or other body or agency. The Executive shall be entitled to reimbursement for all properly documented expenses incurred in
connection with rendering transition services under this Section 9, including, but not limited to, reimbursement for all reasonable travel, lodging, meal expenses and legal fees, and the Executive shall be entitled to a per diem amount for his
services equal to his highest annualized Base Salary used to determine his one (1) years pay under this Agreement, divided by two hundred forty (240) (business days). 
 10. Excise Tax. 
 If any payments made in respect of this Agreement, or otherwise in respect of the
Executive’s termination of employment with the Company, become subject to the excise tax described in Section 4999 of the Internal Revenue Code of 1986 (or any successor to such section), the Company shall make a special payment to the
Executive sufficient, on an after-tax basis (taking into account federal, state and local income, employment and excise taxes and related interest and, penalties), to put the Executive in the same position as would have been the case had no such
excise taxes been applicable to any payments or benefits provided in this Agreement or otherwise in respect of the Executive’s termination of employment with the Company. Any such special payment shall be made prior to the time any excise tax
is payable by the Executive (through withholding or otherwise). The determination of whether any payment is subject to an excise tax and, if so, the amount to be paid by the Company to the Executive and the time of payment, shall be made by an
independent auditor selected jointly by the Company and the Executive and paid by the Company. Unless the Executive agrees otherwise in writing, the auditor shall be a nationally recognized public accounting firm that has not, during the two
(2) years preceding the date of its selection, acted in any way on behalf of the Company or any of its Affiliates. If the 

 SEVERANCE AGREEMENT 
  

 
Executive and the Company cannot agree on the firm to serve as the auditor under this Section, then the Executive and the Company shall each select one
accounting firm and those two (2) firms shall jointly select the accounting firm to serve as the auditor. 
 11. No Mitigation. 
 The Executive shall not be required to mitigate the amount of any payment provided for hereunder, by seeking other employment or otherwise, nor shall the
amount of any payment provided for hereunder be reduced by any compensation earned by the Executive as the result of employment by another employer after the date of termination of employment by the Company. 
 12. Definitions. 
 As used herein, the following
terms have the following meaning: 
 (a) “Affiliate” means and includes any person, corporation or other entity controlling,
controlled by or under common control with the person, corporation or other entity in question. 
 (b) “Change in Control” means
the occurrence of any of the following events: 
 (i) Any Person, other than the Company, its affiliates (as defined in Rule 12b-2 under the
Exchange Act) or any Company employee benefit plan (including any trustee of such plan acting as trustee), is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing more than forty percent (40%) of
‘the combined voting power of the then outstanding securities entitled to vote generally in the election of directors (“Voting Securities”) of the Company, or 
 (ii) Individuals who constitute the Board of Directors of the Company (the “Incumbent Directors”) cease for any reason to constitute at least
a majority of the directors. Notwithstanding the foregoing any individual becoming a director whose election or nomination for election by the Company’s stockholders, was approved by a vote of at least two-thirds (2/3) of the directors
then comprising the Incumbent Directors shall be considered an Incumbent Director; or 
 (iii) Consummation by the Company of a
recapitalization, reorganization, merger, consolidation or other similar transaction (a “Business Combination”) with respect to which all or substantially all of the individuals and entities who were the beneficial owners of the Voting
Securities immediately prior such Business Combination (the “Incumbent Shareholders”) do not, following consummation of all transactions intended to constitute part of such Business Combination, beneficially own, directly or indirectly,
fifty percent (50%) or more of the Voting Securities of the corporation, business trust or other entity resulting from or being the surviving entity in such Business Combination (the “Surviving Entity”), in substantially the same
proportion as their ownership of such Voting Securities immediately prior to such Business Combination; or 
 (iv) Consummation of a
complete liquidation or dissolution of the Company, or the sale or other disposition of all or substantially all of the assets of the Company, other than to a corporation, business trust or other entity with respect to which, following consummation
of all transactions intended to constitute part of such sale or disposition, more than fifty percent (50%) of the combined Voting Securities is then owned beneficially, directly or indirectly, by the Incumbent Shareholders in substantially the
same proportion as their ownership of the Voting Securities immediately prior to such sale or disposition. 
 For purposes of this
definition, the following terms shall have the meanings set forth below: 
 (A) “Beneficial Owner” shall have the meaning set forth
in Rule 13d-3 under the Exchange Act; 
 (B) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended; and

 (C) “Person” shall have the meaning as used in Sections 13(d) and 14(d) of the Exchange Act. 

 SEVERANCE AGREEMENT 
  

 (c) “Company’s Field of Interest” means the primary businesses of the Company as
described in the Company’s then most-recent filings with the Securities and Exchange Commission. 
 13. Representations by Executive. 

The Executive represents and warrants that he has full right, power and authority to execute this Agreement and perform his obligations hereunder;
this Agreement has been duly executed by the Executive and such execution and the performance of this Agreement by the Executive does not and will not result in any conflict, breach or violation of or default under any other agreement or any
judgment, order or decree to which the Executive is a party or by which he is bound. The Executive acknowledges and agrees that any material breach of the representations set forth in this Section 13 will constitute Cause under Section 5.

 14. Arbitration. 
 The parties shall
attempt in good faith to resolve all claims, disputes and other disagreements arising hereunder by negotiation. In the event that a dispute between the parties cannot be resolved within thirty (30) days of written notice from one party to the
other party, such dispute shall, at the request of either party, after providing written notice to the other party, be submitted to arbitration in Los Angeles, California in accordance with the arbitration rules of the American Arbitration
Association then in effect. The notice of arbitration shall specifically describe the claims, disputes or other matters in issue to be submitted to arbitration. The parties shall jointly select a single arbitrator who shall have the authority to
hold hearings and to render a decision in accordance with the arbitration rules of the American Arbitration Association. If the parties are unable to agree within ten (10) days, the arbitrator shall be selected by the Chief Judge of the Los
Angeles Court. The discovery rights and procedures provided by the Federal Rules of Civil Procedure shall be available and enforceable in the arbitration proceeding. The written decision of the arbitrator so appointed shall be conclusive and binding
on the parties and enforceable by a court of competent jurisdiction. The expenses of the arbitration shall be borne equally by the parties to the arbitration, and each party shall pay for and bear the cost of its own experts, evidence and legal
counsel, unless the arbitrator rules otherwise in the arbitration. Both parties agree to use their best efforts to cause a final decision to be rendered with respect to the matter submitted to arbitration within sixty (60) days after its
submission. Notwithstanding the foregoing, the Company shall be free to pursue its rights and remedies under Section 8 hereof and pursuant to Exhibit A hereto in any court of competent jurisdiction, without regard to the arbitral proceedings
contemplated by this Section 14. 
 15. Notices. 
 All notices, requests, consents and other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given if sent by private overnight mail service (delivery
confirmed by such service), registered or certified mail (return receipt requested and received), telecopy (confirmed receipt by return fax from the receiving party) or delivered personally, as follows (or to such other address as either party shall
designate by notice in writing to the other in accordance herewith): 
  
  
  
  
  

					
		 	If to the Company:
		
		 	Arrowhead Research Corporation
		 	201 South Lake Avenue, Suite 703
		 	Pasadena, California 91101
		 	Attention: Chairman of the Compensation Committee
		
		 	Telephone: (626) 304-3400
		 	Fax: (626) 304-3401
		
		 	If to the Executive:
		
		 	J. T. (Ted) Kingsley
		 	Address:
                            
		 	                                      
     	 	
		 	Telephone:                         

 SEVERANCE AGREEMENT 
  

	16.	General. 

 (a) This Agreement shall be governed by
and construed and enforced in accordance with the laws of the State of California. 
 (b) This Agreement, together with any ancillary
agreements referred to herein, sets forth the entire agreement and understanding of the parties relating to the subject matter hereof, and supersedes all prior agreements, arrangements and understandings, written or oral, relating to the subject
matter hereof. No representation, promise or inducement has been made by either party that is not embodied in this Agreement, and neither party shall be bound by or liable for any alleged representation, promise or inducement not so set forth.

 (c) This Agreement may be amended, modified, superseded, canceled, renewed or extended, and the terms or covenants hereof may be waived,
only by a written instrument executed by the parties hereto, or in the case of a waiver, by the party waiving compliance. The failure of a party at any time or times to require performance of any provision hereof shall in no manner affect the right
at a later time to enforce the same. No waiver by a party of the breach of any term or covenant contained in this Agreement, whether by conduct or otherwise, or anyone or more or continuing waivers of any such breach, shall constitute a waiver of
the breach of any other term or covenant contained in this Agreement. 
 (d) This Agreement shall be binding upon and inure to the benefit
of the legal representatives, heirs, distributees, successors and permitted assigns of the parties hereto. The Company may not assign its rights and obligation under this Agreement without the prior written consent of the Executive, except to a
successor to substantially all the Company’s business, which expressly assumes the Company’s obligations hereunder in writing. For purposes of this Agreement, “successors” shall mean any successor by way of share exchange,
merger, consolidation, reorganization or similar transaction, or the sale of all or substantially all of the assets of the Company. The Executive may not assign, transfer, alienate or encumber any rights or obligations under this Agreement, except
by will or operation of law, provided that the Executive may designate beneficiaries to receive any payments permitted under the terms of the this Agreement. 
 [Signature Page Follows] 

 SEVERANCE AGREEMENT 
  

 IN WITNESS WHEREOF, the each of the parties has executed this Agreement under its or his seal as of
the date first above written. 
  

			
	Compensation Committee.
		
	By:	 	 /s/ Edward W. Frykman

	Print Name:	 	Edward W. Frykman
	Title:	 	Chairman

  

			
	 Attest:
	 	
		
	By:	 	 /s/ R. Bruce Stewart

	Print Name:	 	R. Bruce Stewart
	Title:	 	Chief Executive Officer
		
		 	[SEAL]

  

			
	Joseph T. (Ted) Kingsley
		
	By:	 	 /s/ Joseph T. Kingsley

	Print Name:	 	Joseph T. KingsleyADVISORY AGREEMENT

 Exhibit 10.1 
 ADVISORY AGREEMENT 
 BETWEEN 
 APPLE REIT EIGHT, INC. 
 AND 
 APPLE EIGHT ADVISORS, INC. 
 THIS ADVISORY AGREEMENT, dated as of May 24, 2007, is between APPLE REIT
EIGHT, INC., a Virginia corporation (the “Company”), and APPLE EIGHT ADVISORS, INC., a Virginia corporation (the “Advisor”). 
 RECITALS 
 A. The purpose of the Company is to invest primarily in hotels, residential apartment communities and other
income-producing real estate in selected metropolitan areas of the United States. The Company intends to qualify as a real estate investment trust pursuant to Sections 856 through 860 of the Internal Revenue Code of 1986, as amended. 
 B. The Company desires to engage the Advisor to provide information, advice, assistance and facilities to the Company and to have the Advisor undertake
the duties and responsibilities hereinafter set forth, all subject to the supervision of the Company’s Board of Directors, on the terms and conditions set forth herein. In consideration therefor, the Company desires to pay the Advisor certain
fees as herein set forth. 
 NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements contained herein,
the parties agree as follows: 
 1. Definitions. For purposes of this Agreement, the following terms shall have the meanings set forth
below. 
 (a) “Affiliate” means (i) any Person directly or indirectly controlling, controlled by or under
common control with another Person, (ii) any Person owning or controlling 10% or more of the outstanding voting securities or beneficial interests of such other Person, (iii) any officer, director, trustee or general partner of such Person
and (iv) if such other Person is an officer, director, trustee or partner of another entity, then the entity for which that Person acts in any such capacity. “Affiliated” means being an Affiliate of a specified Person. 
 (b) “Articles of Incorporation” means the Company’s Articles of Incorporation filed with the Virginia State Corporation
Commission, including all amendments, restatements or modifications thereof. 

 (c) “Asset Management Fee” means the fee payable to the Advisor for its
services hereunder. Such fee will be paid pursuant and subject to Section 11 of this Agreement. 
 (d) “Average
Invested Assets” for any period means the average of the aggregate book value of the assets of the Company invested, directly or indirectly, in equity interests in and loans secured by real estate, before reserves for depreciation or bad debts
or other similar non-cash reserves, computed by taking the average of such values at the end of each month during such period. 
 (e) “Board of Directors” means the Company’s Board of Directors as of any particular time. 
 (f)
“Bylaws” means the Company’s Bylaws, including all amendments, restatements or modifications thereof. 
 (g)
“Calendar Year” means the year ended December 31st and any portion thereof treated by the Internal Revenue Service as a reporting period for the Company. 
 (h) “Code” means the Internal Revenue Code of 1986, as amended from time to time, including successor statutes thereto.

 (i) “Company Net Income” for any period means the total revenues of the Company for such period, less expenses
applicable to such period other than additions to reserves for depreciation or bad debts or other similar non-cash reserves. “Company Net Income,” for purposes of calculating Operating Expenses in Section 15 of this Agreement, does
not include the gain from the sale of the Company’s assets. 
 (j) “Directors” means, as of any particular
time, the directors of the Company holding office at such time. 
 (k) “Modified Net Income” means net income
(computed in accordance with generally accepted accounting principles) excluding gains (or losses) from debt restructuring and sales of property, plus depreciation of real property, and after adjustments for significant non-recurring items and
unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect modified net income on the same basis. 
 (l) “Offering” means the public offering of the Company’s Units. 
 (m) “Operating Expenses” means all operating, general and administrative expenses of the Company as determined under generally
accepted accounting principles (including regular compensation payable to the Advisor), excluding, however, the following: 
 (i) expenses of raising capital; 
 (ii) interest payments; 
  

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 (iii) taxes; 
 (iv) non-cash expenditures, such as depreciation, amortization and bad debt; 
 (v) reserves; 
 (vi) incentive fees paid to the Advisor, if any; and 
 (vii) costs related directly to asset acquisition, operation
or disposition. 
 (n) “Organizational and Offering Expenses” means all expenses incurred in connection with the
formation and registration of the Company and in qualifying and marketing the Units under applicable federal and state law, and any other expenses actually incurred and directly related to the qualification, registration, offer and sale of the
Units, including such expenses as (i) all marketing expenses and payments made to broker-dealers as compensation or reimbursement for all costs of reviewing the Offering, including due diligence investigations and fees and expenses of their
attorneys, accountants and other experts; (ii) registration fees, filing fees and taxes; (iii) the costs of printing, amending, supplementing and distributing the registration statement and Prospectus; (iv) the costs of obtaining
regulatory clearances of, and printing and distributing, sales materials used in connection with the offer and sale of the Units; (v) the costs related to investor and broker-dealer sales meetings concerning the Offering; and
(vi) accounting and legal fees incurred in connection with any of the foregoing. 
 (o) “Person” includes an
individual, corporation, partnership, joint venture, association, company, trust, bank or other entity, or government and any agency and political subdivision of a government. 
 (p) “Property” or “Properties” means partial or entire equity interests, including equity participation interests such
as general partnership interests and joint venture interests, owned by the Company in real property as described in the Prospectus. 
 (q) “Prospectus” has the meaning given to that term by Section 2(10) of the Securities Act of 1933, as amended, and as used herein, the term means the Prospectus of the Company pursuant to which the Units are offered to the
public. 
 (r) “Return Ratio” means, for any period, the ratio of Modified Net Income to Total Contributions.

 (s) “Shareholders” means the holders of record of the Company’s Units. 
 (t) “Total Contributions” means the gross offering proceeds which have been received by the Company from time to time from the
sale or sales of the Units. Total Contributions shall be calculated to reflect the average of the daily amounts during the period in question of the gross offering proceeds which have been received by the Company from time to time from the sales of
Units, to extent such Units are issued and such sales have actually been closed. 
  

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 (u) “Units” means the Units of the Company. Each Unit consists of one Common
Share and one Series A preferred share of the Company. 
 2. Duties of the Advisor. Subject to the terms of the Articles of
Incorporation, the Bylaws, and the supervision of the Board of Directors, the Advisor, at its own cost and expense, unless otherwise set forth herein, on behalf of the Company, shall: 
 (a) serve as the Company’s investment advisor and consultant in connection with policy and investment decisions to be made by the
Board of Directors, furnish reports to the Board of Directors, and provide research, economic and statistical data in connection with the acquisition, financing, refinancing, holding, leasing and disposition of Properties and other investments of
the Company; 
 (b) administer the day-to-day operations of the Company and perform or supervise the various administrative
functions reasonably necessary for the management of the Company; 
 (c) investigate, select and, on behalf of the Company,
engage and conduct business with (including, but not limited to, entering into contracts in the name of the Advisor or the Company) consultants, accountants, correspondents, lenders, servicers, technical advisors, attorneys, brokers, underwriters,
corporate fiduciaries, escrow agents, depositaries, custodians, agents for collection, insurers, insurance agents, banks, builders, developers, property owners, mortgagors, and other mortgage and investment participants, any and all agents for any
of the foregoing, including Affiliates of the Advisor, and Persons acting in any other capacity deemed by the Board of Directors necessary or desirable for the performance of any of the foregoing services; 
 (d) act as attorney-in-fact or agent in acquiring, financing, refinancing, leasing and disposing of Properties and other investments, in
disbursing and collecting funds of the Company, in paying the debts and fulfilling the obligations of the Company and in handling, prosecuting and settling any claims of the Company, including the foreclosure or other enforcement of any mortgage or
other lien securing Properties or other investments, and exercise its own discretion in doing so; provided that any fees and costs payable to independent Persons incurred by the Advisor in connection with the foregoing shall be the responsibility of
the Company; 
 (e) negotiate on behalf of the Company with banks or other lenders for loans to be made to the Company, and
negotiate on behalf of the Company with investment banking firms and broker-dealers or negotiate private sales of the securities of the Company or obtain loans for the Company, but in no event in such a way so that the Advisor shall be acting as
broker-dealer or underwriter; and provided, further, that any fees and costs payable to third parties incurred by the Advisor in connection with the foregoing shall be the responsibility of the Company; 
 (f) invest or reinvest any money of the Company, as directed by the Board of Directors or subject to such discretionary powers as the
Board of Directors may from time to time delegate; 
  

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 (g) if requested by the Company, provide appraisal reports on any real property that is,
or is proposed to be, acquired by the Company for investment; 
 (h) at any time reasonably requested by the Board of
Directors (but not more than monthly) make reports of its performance of services to the Company; 
 (i) communicate on behalf
of the Company with the Shareholders of the Company as required to satisfy the continuous reporting and other requirements of any governmental bodies or agencies to the Shareholders and third parties and to maintain effective relations with the
Shareholders; 
 (j) counsel the Company in connection with policy decisions to be made by the Board of Directors; 

(k) provide the executive and administrative personnel and services required in rendering the foregoing services to the Company; and

 (l) perform such other services as may be required from time to time for management and other activities relating to the
assets of the Company as the Advisor shall deem appropriate under the particular circumstances. 
 3. Commitments. In order to meet
the investment requirements of the Company, but only as determined by the Board of Directors, or any authorized committee thereof, from time to time, the Advisor agrees at the direction of the Board of Directors or any such committee to issue on
behalf of the Company commitments on such terms as are established by the Board of Directors or any such committee, for the acquiring of Properties or other assets. 
 4. Duties of the Board of Directors. In order for the Advisor to fulfill its duties, the Board of Directors shall, to the extent it deems proper, provide the Advisor with full information concerning the
Company, its capitalization and investment policies and the intentions of the Board of Directors with respect to future investments. The Company shall furnish the Advisor with a copy of all audited financial statements, a signed copy of each report
prepared by independent accountants, and such other information with regard to its affairs as the Advisor may from time to time reasonably request. 
 5. Advice. In addition to the services described in Section 2 above, the Advisor shall consult with the Board of Directors and the officers of the Company and shall furnish them with advice and recommendations with respect to
the acquiring of Properties or commitments therefor, or other investments of, or investments considered by, the Company, and shall furnish advice and recommendations with respect to other aspects of the business and affairs of the Company. In order
to facilitate the investment of the funds of the Company and enable it to avail itself of investment opportunities as they arise, the Advisor may from time to time be granted, but is not hereby granted, the power and authority to make and dispose of
investments and to make and terminate commitments for investments, on behalf of and in the name of the Company, without further or express authority from the Board of Directors; provided, however that the Board of Directors shall have the power to
revoke, suspend, modify or limit such power and authority at any time or from time to time, but not retroactively. Unless otherwise notified by the 

  

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Board of Directors, a representative of the Advisor shall attend all regular and special meetings of the Board of Directors, and the Board of Directors shall
notify the Advisor of such meetings. 
 6. Bank Accounts. The Advisor may establish and maintain one or more bank accounts in the name
of the Company and may collect and deposit into any such account or accounts, and disburse from any such account or accounts, any money on behalf of the Company, under such terms and conditions as the Board of Directors may approve, provided that
all such accounts shall be maintained in such fashion as to make clear that the funds therein are the property of the Company and not of the Advisor. The Advisor shall from time to time render appropriate accountings of such collections and payments
to the Board of Directors and to the auditors of the Company. 
 7. Investment Undertakings. The Advisor shall use its best efforts to
assure that (i) any mortgage securing a Property of the Company shall be and remain a valid lien upon the mortgaged property according to its terms; (ii) the title to any Property is insured by appropriate policies of title insurance;
(iii) any Property is duly insured against loss or damage by fire, with extended coverage, and against such other insurable hazards and risks as is customary and appropriate in the circumstances; and (iv) the policies from time to time
specified by the Board of Directors with regard to the protection of the Company’s investments are carried out. Any and all fees and costs incurred by the Advisor in performing such functions, whether payable to its Affiliates or independent
Persons shall be borne by the Company. 
 8. Records; Confidentiality. The Advisor shall maintain appropriate records of all its
activities hereunder and make such records available for inspection by the Board of Directors and by counsel, auditors and authorized agents of the Company, at any time or from time to time during normal business hours. The Advisor shall at all
reasonable times have access to the books and records of the Company. The Advisor shall keep confidential any and all information obtained in connection with the services rendered hereunder and shall not disclose any such information to
nonaffiliated Persons except with the prior consent of the Board. 
 9. Limitation of Activities. Anything else in this Agreement to
the contrary notwithstanding: 
 (a) The Advisor shall refrain from taking any action which, in its sole judgment made in good
faith, would adversely affect the status of the Company as a real estate investment trust as defined in the Code, subject the Company to regulation under the Investment Company Act of 1940, violate any law, rule or regulation or would otherwise not
be permitted by the Articles of Incorporation or Bylaws of the Company, except if such action shall be ordered by the Board of Directors, in which case the Advisor shall notify promptly the Board of Directors of the Advisor’s judgment of the
potential impact of such action and shall refrain from taking such action until it receives further clarification or instructions from the Board of Directors. Notwithstanding the foregoing, the Advisor and its stockholders, directors, officers and
employees shall not be liable to the Company, or to the Company’s Board of Directors or Shareholders for any act or omission by the Advisor, or its stockholders, directors, officers or employees except as provided in Section 16 of this
Agreement. 
  

 6 

 (b) In performing its duties and obligations under this Agreement, the Advisor shall
abide by and comply with the provisions and policies set forth in the Articles of Incorporation and Bylaws. 
 10. Relationship with Board
of Directors. Employees of the Advisor may serve as members of the Board of Directors or any committee thereof and as officers of the Company, except that no employee of the Advisor who also is a Director or officer of the Company shall receive
any compensation from the Company for serving as a Director or officer other than for reasonable reimbursement for travel and related expenses incurred in attending meetings of the Board of Directors or any committee thereof. 
 11. Fees. 
 (a) Asset
Management Fee. The Company shall pay to the Advisor quarterly, for services rendered under this Agreement, an Asset Management Fee calculated as follows: The Asset Management Fee for any calendar quarter shall be a applicable percentage of the
Total Contributions. The applicable percentage used to calculate such Asset Management Fee shall be based upon the Return Ratio, calculated on a per annum basis, for the preceding calendar quarter. The Asset Management Fee shall be as follows with
respect to any such quarter: 0.1% of Total Contributions if the Return Ratio for the preceding calendar quarter is 6.0% per annum or less; 0.15% of Total Contributions if the Return Ratio for the preceding calendar quarter is more than
6.0% per annum but not more than 8.0% per annum; and 0.25% of Total Contributions if the Return Ratio for the preceding calendar is above 8.0% per annum. If the Asset Management Fee is payable with respect to any partial calendar
quarter, it shall be prorated based on the number of days elapsed during any such partial calendar quarter. 
 (b) Payment of
Asset Management Fee. The Advisor shall compute the compensation payable to it under Section 11(a) of this Agreement within 45 days of the end of each calendar quarter. A copy of the computations made by the Advisor to calculate its
compensation shall thereafter promptly be delivered to the Board of Directors and, upon such delivery, payment of the compensation earned under Section 11(a) of this Agreement shown therein shall be due and payable within 60 days after the end
of such calendar quarter. 
 12. Expenses. 
 (a) The Company shall pay directly or reimburse the Advisor for the following expenses in addition to the compensation provided for in
this Agreement: 
 (i) all costs of personnel employed by the Company and involved in the business of the Company; 

(ii) expenses incurred in connection with the initial investment of the funds of the Company, including all direct expenses incurred in
connection with investigation and acquisition of Properties; 
  

 7 

 (iii) interest and other costs for borrowed money, including discounts, points and other
similar fees; 
 (iv) taxes and assessments on income or property and taxes as an expense of doing business; 
 (v) fees and commissions, including finder’s fees and brokerage commissions with respect to the acquisition and disposition of assets
of the Company, whether payable to an Affiliate of the Advisor or an unrelated Person, including, without limitation, costs of foreclosure, maintenance, repair and improvement of Property; 
 (vi) costs associated with insurance required in connection with the business of the Company or by the Board of Directors; 
 (vii) expenses of managing and operating real property owned by the Company, whether payable to an Affiliate of the Advisor or an
unrelated Person; 
 (viii) fees and expenses of legal counsel for the Company; 
 (ix) fees and expenses of independent auditors and accountants for the Company; 
 (x) all expenses in connection with payments to the Board of Directors or any committee thereof and meetings of the Board of Directors or
any committee thereof and Shareholders; 
 (xi) expenses associated with listing the Units on a national stock exchange or
quoting the Units on the NASDAQ National Market System if requested by the Board of Directors, or with the issuance and distribution of any additional Units of the Company at any time, such as taxes, legal and accounting fees, listing and
registration fees, and other expenses; 
 (xii) dividend and dividend distributions; 
 (xiii) expenses of organizing, revising, amending, converting, modifying or terminating the Company, the Articles of Incorporation or the
Bylaws; and 
 (xiv) expenses of maintaining communications with Shareholders, including the cost of preparation, printing,
and mailing annual reports and other Shareholder reports, proxy statements and other reports required by governmental entities; and 
 (xv) all costs and expenses associated with the office space used by the Advisor in rendering its services hereunder. 
  

 8 

 Expenses incurred by the Advisor on behalf of the Company and payable pursuant to this Section, shall be
reimbursed quarterly to the Advisor within 60 days after the end of each quarter. The Advisor shall prepare a statement documenting the expenses of the Company during each quarter, and shall deliver such statement to the Company within 45 days after
the end of each quarter. 
 (b) Except as otherwise provided herein, the Advisor shall pay all expenses of performing its
obligations under this Agreement, including, without limitation, the following expenses: 
 (i) employment expenses of the
Advisor, including, but not limited to, salaries, wages, payroll taxes, costs of employee benefit plans, and temporary help expenses, except to the extent that such expenses are otherwise reimbursable pursuant to Section 12(a) of this Agreement
or the Articles of Incorporation or Bylaws; 
 (ii) audit fees and expenses of the Advisor; 
 (iii) legal fees and other expenses of professional services to the Advisor; 
 (iv) rent, telephone, utilities and other office expenses of the Advisor; 
 (v) insurance of the Advisor; and 
 (vi) all other administrative expenses of the Advisor. 
 13. Limitation on the Advisor’s Investment
Advice. Notwithstanding anything to the contrary in this Agreement, the Advisor shall not be required to, and shall not, advise the Company as to any investments in securities, except when, and to the extent that, the Advisor and the Company
specifically agree (i) that such advice is desirable, and (ii) that such advice can be rendered consistently with applicable legal requirements, including any applicable provisions of relevant “investment advisor” laws.

 14. Other Services. Should the Board of Directors request that the Advisor or any employee thereof render material services for the
Company other than set forth in Section 2, such services shall be separately compensated and shall not be deemed to be services pursuant to the terms of this Agreement. 
 15. Limitation on Operating Expenses. Within 120 days from the end of any Calendar Year, the Advisor shall refund to the Company the amount, if
any, by which the Operating Expenses of the Company, excluding extraordinary nonrecurring items and those items referred to in Section 14, during such Calendar Year exceeded the greater of either of the following limitations: 
 (a) 2% of the Average Invested Assets of the Company for such Calendar Year; or 
  

 9 

 (b) 25% of the Company’s Company Net Income for such Calendar Year, determined in
accordance with generally accepted accounting principles. 
 The Directors of the Company may determine that, because of unusual and
non-recurring factors which they deem sufficient, a higher level of Operating Expenses is justified for such Calendar Year. The Advisor shall be promptly reimbursed for any payments made under this Section 15 if, in any succeeding Calendar
Year, the Operating Expenses of the Company are less than the permitted level of Operating Expenses. 
 16. Advisory Responsibility.
The Advisor assumes no responsibility under this Agreement other than to render the services called for hereunder in good faith and with integrity, and shall not be responsible for any action of the Company in following or declining to follow any
advice or recommendation of the Advisor. Neither the Advisor, its shareholders, directors, officers nor employees nor any of its Affiliates, nor any Person contracting with the Advisor for services and its shareholders, directors, officers and
employees nor any of its Affiliates shall be liable to the Company or its Shareholders, except by reason of acts constituting gross negligence or willful misconduct. The Advisor hereby agrees to look solely to the assets of the Company for
satisfaction of all claims against the Company, and in no event shall any Shareholder, Director, officer or agent of the Company have any personal liability for the obligation of the Company under this Agreement. 
 17. Incorporation of the Articles of Incorporation and Bylaws. To the extent the Articles of Incorporation and Bylaws impose obligations or
restrictions on the Advisor or grant the Advisor certain rights which are not set forth in this Agreement, the Advisor shall abide by such obligations or restrictions and such rights shall inure to the benefit of the Advisor with the same force and
effect as if they were set forth herein. 
 18. Fiduciary Duty and Indemnification. Subject to Section 16, the Advisor shall have
a fiduciary relationship to the Shareholders. However, the Company shall indemnify the Advisor, to the fullest extent permitted by law, for its liabilities and losses arising from the operations of the Company (including its costs and expenses,
including legal fees and expenses, incurred in connection with investigating and defending itself against such liabilities and losses) if the following conditions are met: 
 (a) the Directors have determined, in good faith, that the course of conduct which caused the liability or loss was undertaken in good
faith within what the Advisor reasonably believed to be the scope of its employment or authority and for a purpose which it reasonably believed to be in the best interests of the Company; 
 (b) the Directors have determined, in good faith, that the liability or loss was not the result of willful misconduct, bad faith, reckless
disregard of duties or violation of the criminal law on the part of the Advisor; and 
 (c) the indemnified amount is
recoverable only out of the assets of the Company and not from the Shareholders. 
  

 10 

 Notwithstanding the foregoing, indemnification will not be allowed for any liability imposed by judgment,
and costs associated therewith, including attorneys’ fees, arising from or out of a violation of state or federal securities laws associated with the Offering of the Units unless (i) there has been a successful adjudication on the merits
of each count involving alleged securities laws violations as to the particular indemnitee, or (ii) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the particular indemnitee or
(iii) a court of competent jurisdiction approves a settlement of the claims against a particular indemnitee. 
 19. Transactions
between the Advisor and the Company. All transactions between the Advisor and the Company shall require the approval by a majority of the Directors and shall otherwise comply with the conflict of interest provisions of the Bylaws. 
 20. Relationship of Advisor and Company. The Company and the Advisor are not partners or joint ventures with each other, and nothing herein shall
be construed to make them such partners or joint ventures or impose any liability as such on either of them. 
 21. Other Activities.
Except as otherwise expressly provided herein, nothing contained herein shall limit the right of the Advisor or any of its officers, directors or employees, whether or not a Director, officer or employee of the Company, to engage in other business
activities or to render services of any kind to any other Person even if such other business activities or services may be in direct competition with the Company. 
 22. Term; Termination of Agreement. 
 (a) This Agreement shall have an initial term
ending seven years after May 24, 2007, and thereafter shall be renewed for additional two-year terms upon the consent of the Directors. 
 (b) Prior to any renewal of this Agreement, the Directors shall review (i) the performance of the Advisor hereunder to determine its compliance with the provisions of this Agreement, and (ii) the fees
payable to the Advisor hereunder to determine whether they are reasonable in relation to the nature and quality of services performed. The findings of the Directors shall be recorded in the minutes of the Directors. 
 (c) This Agreement shall be terminable (i) without cause by the Advisor or (ii) without cause by a majority of the Directors, in
each case upon 60 days’ prior written notice to the non-terminating party. 
 (d) In the event of the termination of the
Advisor, the Advisor will cooperate with the Company and take all reasonable steps requested to assist the Directors in making an orderly transition of the advisory function to another Person. 
  

 11 

 (e) At the sole option of a majority of the Directors, this Agreement may be terminated
for cause by written notice of termination from the Company to the Advisor if any of the following events occur: 
 (i) if the
Advisor shall violate or default in the performance of any material provision of this Agreement and, after written notice of such violation or default, shall not cure such violation or default within 30 days; 
 (ii) if the Advisor shall be adjudged bankrupt or insolvent by a court of competent jurisdiction, or an order shall be made by a court of
competent jurisdiction for the appointment of a receiver, liquidator or trustee of the Advisor, or of all or substantially all of its property by reason of the foregoing, or approving any petition filed against the Advisor for reorganization, and
such adjudication or order shall remain in force or unstayed for a period of 30 days; or 
 (iii) if the Advisor shall
institute proceedings for voluntary bankruptcy or shall file a petition seeking reorganization under the federal bankruptcy laws, or for relief under any law for relief of debtors, or shall consent to the appointment of a receiver for itself or for
all or substantially all of its property, or shall make a general assignment for the benefit of its creditors, or shall admit in writing its inability to pay its debts, generally, as they become due. 
 (f) Any notice of termination under this Section shall (except to the extent this Section requires a different notice period) be effective
on the date specified in such notice, which may be the day on which such notice is given or any date thereafter. The Advisor agrees that if any of the events specified in subparagraph (ii) or (iii) of Section 22(e) shall occur, it
shall give written notice thereof to the Board of Directors within 5 days after the occurrence of such event. 
 23. Action Upon
Termination. 
 (a) From and after the effective date of termination of this Agreement pursuant to Section 22 hereof,
the Advisor shall not be entitled to compensation for further services rendered hereunder, but shall be entitled to receive from the Company within 30 days after the effective date of such termination, an amount in cash equal to all earned but
unpaid Asset Management Fees payable to the Advisor prior to the termination of this Agreement. 
 (b) Within a reasonable
period of time, but in no event later than 30 days after the termination of this Agreement, the Advisor shall: 
 (i) pay over
to the Company all money collected and held for the account of the Company pursuant to this Agreement, after deducting any accrued compensation and reimbursement for its expenses to which it is then entitled; 
 (ii) deliver to the Board of Directors a full accounting, including a statement showing all payments collected by it and a statement of
all money held by it, covering the period following the date of the last accounting furnished to the Board of Directors; and 
 (iii) deliver to the Board of Directors all property and documents of the Company then in the custody of the Advisor. 
  

 12 

 The Advisor shall be entitled to receive, promptly after such 30-day period, reimbursement for any
additional expenses to which it is entitled (and for which it has not been reimbursed under clause (i) of Section 23(b)). 
 24.
Assignment. This Agreement may be assigned by the Advisor with the approval of a majority of the Board of Directors; provided, however, that such approval shall not be required in the case of an assignment to a corporation, association, trust
or organization which may take over the assets and carry on the affairs of the Advisor, provided that at the time of such assignment, such successor organization shall be owned substantially by the Advisor or its Affiliates and that an officer of
the Advisor shall deliver to the Board of Directors a statement in writing indicating the ownership structure of the successor organization. Such an assignment shall bind the assignees hereunder in the same manner as the Advisor is bound hereunder
and the assignee shall be entitled to any and all rights under this Agreement, including those set forth in section 18. Upon assignment of this Agreement, the Advisor shall be discharged from its future duties and shall not be entitled to any of the
rights granted under this Agreement. This Agreement shall not be assigned by the Company without the consent of the Advisor, except in the case of an assignment by the Company to a corporation or other organization which is a successor to the
Company, in which case such successor organization shall be bound hereunder and by the terms of said assignment in the same manner as the Company is bound hereunder. 
 25. Bylaws. The execution and performance of this Agreement hereby is expressly made subject to Article VIII of the Bylaws of the Company. 
 26. Notices. Any notice, report or other communication required or permitted to be given hereunder shall be in writing unless some other method of
giving such notice, report or other communication is accepted by the party to whom it is given, and shall be given by being delivered to the addresses set forth herein: 
 To the Board of Directors or to the Company: 
 Apple REIT Eight, Inc. 
 814 East Main Street 
 Richmond, Virginia 23219 
 Attn: Board of Directors 
 To the Advisor: 
 Apple Eight Advisors, Inc. 
 814 East Main Street 
 Richmond, Virginia 23219 
 Attn: Glade M. Knight 
 Either party may at any time give notice in writing to the other party of a change in its address for the purposes of this Section. 
 27. Modification. This Agreement shall not be changed, modified, amended, terminated or discharged, in whole or in part, except by an instrument in writing signed by both parties hereto, or their respective
successors or assigns. 
  

 13 

 28. Shareholder Liability. No Shareholder of the Company shall be personally liable for any of the
obligations of the Company under this Agreement. 
 29. Severability. The provisions of this Agreement are independent of and
severable from each other, and no provision shall be affected or rendered invalid or unenforceable by virtue of the fact that for any reason any other or others of them may be invalid or unenforceable in whole or in part. 
 30. Binding. This Agreement shall bind any successors or permitted assigns of the parties hereto as herein provided. 
 31. Construction. The provisions of this Agreement shall be construed and interpreted in accordance with the laws of the Commonwealth of Virginia.

 32. Entire Agreement. This Agreement contains the entire agreement and understanding among the parties hereto with respect to the
subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof. The express terms
hereof control and supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof. 
 33.
Indulgences, Not Waivers. Neither the failure nor any delay on the part of a party to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any
right, remedy, power or privilege preclude any other or further exercise of the same or of any other right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a
waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver. 
 34. Gender. Words used herein regardless of the number and gender specifically used, shall be deemed and construed to include any other number,
singular or plural, and any other gender, masculine, feminine or neuter, as the context requires. 
 35. Titles Not to Affect
Interpretation. The titles of sections and subsections contained in this Agreement are for convenience only, and they neither form a part of this Agreement nor are they to be used in the construction or interpretation hereof. 
 36. Execution in Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall together constitute one and the same instrument. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the
signatures of all of the parties reflected hereon as the signatories. 
  

 14 

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement by their duly authorized officers as
of the date first written above. 
  

			
	 APPLE REIT EIGHT, INC.
 a Virginia
corporation

		
	By:	 	/s/ Glade M. Knight
	Title:	 	Glade M. Knight, President
	
	 APPLE EIGHT ADVISORS, INC.,
 a Virginia
corporation

		
	By:	 	/s/ Glade M. Knight
	Title:	 	Glade M. Knight, President

  

 15

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