Document:

Exhibit 10.6

 

HOTEL MANAGEMENT AGREEMENT

 

between

  

PHR CHERRY OPCO SUB, LLC

as Owner

  

and

  

PHR CHERRY TREE HOTEL MANAGER, LLC

as Manager

  

FOR

 

Cherry Tree Inn and Suites

2345 N. US 31 North, Grand Traverse City, Michigan

 

    

     

    

 

HOTEL MANAGEMENT AGREEMENT

 

This Hotel Management Agreement
(the "Agreement") made as of this 3rd day of June 2021 (the “Effective Date”) between
PHR CHERRY OPCO SUB, LLC, a Michigan limited liability company (the "Owner") and PHR CHERRY TREE HOTEL MANAGER, LLC,
a Michigan limited liability company, as Manager ("Manager"),

 

RECITALS:

 

WHEREAS, PHR CHERRY PROP
CO, LLC, a Michigan limited liability company (“Fee Owner”) is the lessor of the Premises (as defined below), and
(ii) all Building and Appurtenances (as defined below), including, without limitation an existing 76 room hotel which is known as Cherry
Tree Inn and Suites located at 2345 N. US 31 North, Grand Traverse City, Michigan (as more particularly defined in the Article I below,
the “Hotel”).

 

WHEREAS, Owner holds a leasehold
interest in the Hotel pursuant to the Lease (as defined below).

 

WHEREAS, Manager is experienced
in the management and operation of hotels.

 

WHEREAS, Owner desires to
retain Manager to manage and operate the Hotel. Manager is willing to perform such services for the account of Owner on the terms and
conditions set forth in this Agreement.

 

NOW, THEREFORE, in consideration
of the premises and the mutual covenants contained herein, and for other good and valuable consideration, the parties hereto agree as
follows:

 

 

ARTICLE 1

DEFINITIONS, TERMS AND REFERENCES

 

1.1           Definitions.
In this Agreement and any Exhibits, the following terms shall have the following meanings:

 

"AAA” shall
have the meaning set forth in Article 30.

 

"Accounting Period"
shall mean each calendar month (whether of 28, 29, 30 or 31 days) during each Fiscal Year.

 

"Affiliate"
shall mean any person or entity that directly or indirectly, through one or more intermediaries, controls, is controlled by or is under
common control with another person or entity. The term “control” (and correlative terms) shall mean the power, whether
by contract, equity ownership or otherwise, to direct the policies or management of a person or entity. Without limiting the foregoing,
an "Affiliate" also includes any partner or a partnership of any party to this Agreement, any member or membership parties
thereto and any corporation, partnership, individual or trust related to or controlling or controlled by such partnership, individual
or trust related to or controlling or controlled by such partnership party or its partners or such membership party or its members. A
natural person is related to another natural person if he or she is a spouse, parent, or lineal descendant of the other person.

  

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"Allocated Services"
shall mean certain support services that Manager obtains from a third party and provides on a central or regional basis to the hotels
that it manages because such support services can be provided on a more efficient, effective and economical basis to each individual
Manager managed hotel if the expenses of such support services are shared by other Manager managed hotels. Such support services include
services in the areas of sales and marketing, purchasing, food and beverage, human resources, insurance, technology, training and payroll
(each such service, an "Allocated Service"; collectively, the "Allocated Services"). Owner and Manager
agree that Manager shall provide Allocated Services to the Hotel and that the Hotel's portion of the cost thereof shall constitute a
Gross Operating Expense so long as (i) the costs of the Allocated Services are allocated in a commercially reasonable fashion on a proportionate
basis among the Hotel and the other Manager managed hotels benefiting therefrom; and (ii) the Allocated Services shall not include services
that do not benefit the Hotel. The parties agree that Manager (or its Affiliates) and the Hotel shall be returned a proportionate share
of any rebates received by Manager with respect to any of the Allocated Services on a proportionate basis as compared to other hotels
managed by Manager or its Affiliates.

 

"Annual Operating
Budget" shall mean an annual operating projection for the Hotel prepared and submitted by Manager to Owner and approved by Owner
for each Fiscal Year pursuant to Section 4.4(a).

 

"Annual Plan"
shall mean an annual business plan for the operation of the Hotel prepared by the Manager and approved by the Owner, which shall include
the Annual Operating Budget, the Approved Capital Budget and any other material included therein by Manager as provided in Section 4.4.

 

"Approved Capital
Budget" shall have the meaning set forth in Section 4.4(b).

 

"Base Fee"
shall have the meaning set forth in Article 11.

 

"Building and Appurtenances"
shall mean (i) the hotel building located on the Premises, and (ii) landscaping and other related facilities, together with all installations
located at, or used in connection with the operation of the building for hotel purposes including, without limitation, any swimming pools,
health club and recreational facilities, walkways, parking facilities, heating, lighting, sanitation equipment, air conditioning, laundry
facilities, refrigeration, built-in kitchen equipment, and elevators.

 

"Capital Budget"
shall mean Manager's proposed estimate of FF&E and Capital Improvements submitted to Owner each Fiscal Year pursuant to Section 4.4.

 

"Capital Improvements"
shall have the meaning set forth in Section 8.2 hereof.

 

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“Centralized Services”
means those services described on Schedule IV attached hereto, which reflects those Centralized Services provided by the Manager
and which may be amended from time to time in writing by the Owner and Manager or as set forth in an approved Annual Plan.

 

“Commencement Date”
shall mean the date hereof.

 

"Competitive Set"
shall mean the properties listed on Exhibit C attached hereto and any revisions to such list agreed upon by Owner and Manager
from time to time.

 

"CPI" shall
mean the Consumer Price Index for All Urban Consumers, United States City Average, All Items (1982-84=100), issued by the Bureau of Labor
Statistics of the United States Department of Labor.

 

“Default Rate”
shall mean the lesser of (i) the Prime Rate plus four percent (4%) per annum or (ii) the highest lawful rate permitted by applicable
Legal Requirements from time to time.

 

“Earnings Before
Interest, Taxes, Depreciation and Amortization” or “EBITDA” shall Total Operating Revenues less Gross Operating
Expenses, excluding taxes of any kind (including betterments and assessments), interest, depreciation, amortization, reserves, insurance,
any debt service payments and costs of the Hotel (including without limitation, debt service, fees to lenders and servicers, penalties,
late fees, amortization any equipment lease payments and costs) and property, casualty and hazard insurance.

 

"Effective Date"
shall mean the date of this Agreement as set forth on page 1 hereof.

 

"ERISA”
shall have the meaning set forth in Section 4.2(a).

 

"Event of Default"
shall mean any of the events described in Article 16, provided that any condition contained therein for the giving of notice or the lapse
of time, or both, has been satisfied.

 

“Executive Personnel”
shall mean the general manager, director of sales and the controller of the Hotel.

 

“Fee Owner”
shall have the meaning set forth in the introductory section of this Agreement.

 

"Fiscal Year"
shall mean the fiscal year that ends on the last day of each calendar year. The first Fiscal Year shall be the period commencing on the
Commencement Date and ending on December 31st of the same calendar year in which the Commencement Date occurs. The last Fiscal
Year shall be the period commencing on January 1st of the same calendar year in which the last day of the Term of this Agreement occurs
and ending on such last day of the Term. The words "full Fiscal Year" shall mean any Fiscal Year containing not fewer than
365 days. A partial Fiscal Year after the end of the last full Fiscal Year and ending with the expiration or earlier termination of the
Term shall constitute a separate Fiscal Year.

  

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"Furniture, Fixtures
and Equipment" or "FF&E" shall mean all furniture, furnishings, wall coverings, fixtures, carpeting,
rugs, fine arts, paintings, statuary, decorations, and hotel equipment and systems (including the costs associated with the purchase,
installation and delivery thereof) located at, or used in connection with, the operation of the Building and Appurtenances as a hotel,
including without limitation, major equipment and systems required for the operation of kitchens, bars, laundry and dry cleaning facilities,
office equipment, dining room wagons, major material handling equipment, major cleaning and engineering equipment, telephone systems,
computerized accounting and vehicles (including the costs associated with the purchase, installation and delivery thereof) together with
all replacements therefor and additions thereto, but in all events excluding Operating Equipment and Supplies.

 

"GAAP”
shall have the meaning set forth in Section 4.2.

 

"Gross Operating
Expenses" shall have the meaning contained on Schedule II attached hereto. .

 

"Hotel"
shall mean (a) the Building and Appurtenances and the Premises owned by Owner and (b) all FF&E, all Operating Equipment and Supplies,
and all Inventories owned by Owner located at the address set forth on Schedule I.

 

"hotel"
shall mean any hotel (other than the Hotel), inn, motor inn, motor hotel, motel, suite hotel, conference center, meeting center or any
other facility providing either or both of short-term lodging and meeting arrangements.

 

"Hotel Employees"
shall have the meaning set forth in Section 4.2.

 

"Inventories"
shall mean inventories of supplies, in accordance with the Uniform System of Accounts, such as soap, toilet paper, stationery, writing
pens, food and beverage inventories, paper products, menus, expendable office and kitchen supplies, fuel, supplies and items similar
to any of the foregoing.

 

“Lease”
means that certain Hotel Lease entered into by and between Owner, as tenant, and Fee Owner, as landlord, on or about the date hereof,
as the same may be amended from time to time.

 

"Legal Proceedings"
shall mean all complaints, counterclaims or cross-claims filed in a court of competent jurisdiction, any notice of any claim of violation
of any legal requirement by any governmental agency or authority, or any summons or other legal process, in each instance by or against
the Hotel or by or against Owner, or Manager in connection with the Hotel.

 

"Legal Requirements"
shall mean (a) all laws, ordinances, statutes, regulations and orders relating to the Hotel and the Premises now or hereafter in effect,
including but not limited to, environmental laws and (b) all terms, conditions, requirements and provisions of (i) all Permits; (ii)
all leases; and (iii) all liens, restrictive covenants and encumbrances affecting the Hotel or the Premises or any part thereof.

  

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"Liabilities"
shall have the meaning set forth in Section 24.1.

 

"License Agreement"
shall mean the franchise or license agreement from time to time entered into by Owner with respect to the branding and operation of the
Hotel. For the purposes of this definition, the following terms used in said section shall have the following meaning:

 

"Licensor"
shall mean the franchisor or licensor under the franchise or license agreement from time to time entered into by Owner with respect to
the branding and operation of the Hotel.

 

"Licensee"
shall mean Owner; and the "Manual" shall mean the Licensor's operating manual and other manuals for Licensor described
in its standard license agreement.

 

"Major Capital Expenditures"
shall have the meaning set forth in Section 4.4.

 

"Major Renovations"
shall mean a contemporaneously made set or series of alterations, additions and/or improvements to the Hotel with a total cost in excess
of $100,000 (or a lesser amount in the event a project with a total cost less than $100,000 requires material design and purchasing and
installation services related thereto and/or results in a material alteration in the design of the Hotel), but shall not include any
Repairs or Maintenance with respect to Capital Improvements or FF&E.

 

"Management Fee"
shall mean the Base Fee and other fees payable or due hereunder, all as set forth in Article 11 hereof and Schedule I attached hereto.

 

"Manager"
shall have the meaning set forth in the introductory section of this Agreement.

 

"Manager’s
Liability Cap" shall have the meaning set forth in Article 33.

 

"MEPPA”
shall have the meaning set forth in Section 4.2(a).

 

"Minimum Cost"
shall have the meaning set forth in Section 15.1.

 

"Mortgage"
shall mean, collectively, each of the documents evidencing or securing current or future indebtedness on the Hotel in favor of a third
party lender or financial institution or any successor thereto or replacement thereof (the "Lender").

 

"OFAC”
shall have the meaning set forth in Section 26.18.

 

“Open for Business”
shall mean the period of time during which all or substantially all of the Hotel is open for business to the general public.

 

"Operating Account"
shall mean a special account or accounts, bearing the name of the Hotel, established by Owner in a federally insured bank or trust company
selected by Owner.

  

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"Operating Equipment
and Supplies" shall mean supply items which constitute "Operating Equipment and Supplies" under the Uniform System
of Accounts, all miscellaneous serving equipment, linen, towels, uniforms, silver, glassware, china and similar items.

 

“Operating Standards”
shall mean the operation of the Hotel in a manner consistent with (i) the requirements under the License Agreement; (ii) the condition
of the Hotel as of the Commencement Date (or, following completion of a Renovation, the condition of the Hotel as of the completion of
the Renovation), normal wear and tear excepted; (iii) the condition and level of the operation of hotels of comparable class and standing
to the Hotel in its market area; (iv) then current market conditions regarding rental rates and lease terms and conditions with
respect to Hotels of comparable class and standing to the Hotel (including but
not limited to the Competitive Set); (v) the requirements under the Lease; and (vi) then current business and management practices
(including those related to compliance with Legal Requirements) applicable to the management, operation, leasing, maintenance and repair
of a hotel comparable in size, character and location to the Hotel.

 

"Owner"
shall have the meaning set forth in the introductory section of this Agreement.

 

"Owner’s Annual
Plan Objections” shall have the meaning set forth in Section 4.4.

 

"Performance Standard"
shall have the meaning set forth in Section 18.2.

 

"Permits"
shall mean all governmental or quasi-governmental licenses and permits, including but not limited to any certificate of occupancy, business
licenses and liquor licenses.

 

"Permitted Investments"
shall mean (subject to modification, addition or deletion from time to time at the option of Owner by written request to Manager) all
of which shall be in the name of Owner:

 

(a)       interest-bearing
deposit accounts (which may be represented by certificates of deposit, time deposit open account agreements or other deposit instruments)
in commercial banks having a combined capital and surplus of not less than $50,000,000; or

 

		(b)	all other investments approved by Owner.

 

"Premises"
shall mean the land on which the Hotel is located, which land is described in Exhibit A attached hereto.

 

“Prime Rate”
shall mean the rate per annum announced, designated or published from time to time by JP Morgan Chase Bank N.A. as its “prime”,
 “reference” or “base” rate of interest for commercial loans.

 

"Privileged Information"
shall have the meaning set forth in Section 26.19.

 

"Prohibited Persons”
shall have the meaning set forth in Section 26.18.

  

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"Proposed Capital
Expenditures Budget" shall have the meaning set forth in Section 4.4.

 

"Proposed FF&E
Budget” shall have the meaning set forth in Section 4.4.

 

"Proposed Operating
Budget” shall have the meaning set forth in Section 4.4.

 

“Reimbursable Expenses”
shall mean all travel, lodging, entertainment, telephone, facsimile, postage, courier, delivery, employee training and other expenses
incurred by Manager in accordance with the standard policies for expenses incurred by Manager on its own behalf and which are directly
related to its performance of this Agreement, but in no event will Reimbursable Expenses include or duplicate expenses for Manager’s
overhead, Allocated Services or Centralized Services.

 

“Renovation”
shall mean a renovation of any portion of the Hotel during the Term, pursuant to a plan proposed by Manager and approved by Owner to,
among other things, bring the Hotel to a physical condition that satisfies the standards under the License Agreement and to operate in
a manner consistent with the assumptions for the then-current Annual Operating Budget and then-current Annual Plan. A Renovation shall
be carried out at the expense of Owner pursuant to plans and specifications and a schedule prepared by Manager and approved by Owner
and, to the extent required under the License Agreement, by Licensor.

 

"Repairs and Maintenance"
shall have the meaning as defined in Section 8.1.

 

"Reserve"
shall mean an account maintained as a Permitted Investment for Reserve for replacement of FF&E and/or Capital Improvements, as described
in Section 7.1 and funded as provided in Section 7.2.

 

“Schedule I”
shall mean Schedule I attached to and made a part of this Agreement.

 

“Schedule II”
shall mean Schedule II attached to and made a part of this Agreement.

 

“Schedule III”
shall mean Schedule III attached to and made a part of this Agreement.

 

“Schedule IV”
shall mean Schedule IV attached to and made a part of this Agreement.

 

"State"
shall mean the State in which the Hotel is located or other as designated.

 

"Term" shall
mean the term of this Agreement, which shall be an initial ten (10) year term commencing on the Commencement Date and expiring on the
tenth (10th) anniversary of the Commencement Date, as such Term may be extended or shortened as expressly set forth in this
Agreement or as otherwise agreed to by Owner and Manager.

 

“Third Party Purchaser”
shall have the meaning set forth in Section 18.1.

 

"Total Operating
Revenues" has the meaning set forth on Schedule III attached hereto.

  

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"Unavoidable Interruptions"
shall mean interruptions in the operation of or access to the Hotel or any of its essential services on account of an interruption in
any one or more of the utility services described in Section 13.2, or on account of labor disputes, strikes, lockouts, fire or other
casualty, war, terrorist actions, acts of God and other similar causes beyond the reasonable control of the party claiming an unavoidable
interruption, but never financial inability. Other than obligations accruing prior to the occurrence of an event of Unavoidable Interruption
or obligations that, if not performed, would cause a material adverse effect on the Hotel or its operations (for instance, the requirement
to maintain the Permits or insurance obligations hereunder), the obligations of the party hereunder shall be suspended during the period
of an Unavoidable Interruption.

 

"Uniform System of
Accounts" shall mean the Uniform System of Accounts for the Lodging Industry, 11th Revised Edition, 2014, as published by the
Hotel Association of New York City, Inc. or any later edition thereof.

 

"Working Capital"
shall mean and refer to the funds which are reasonably necessary for the day-to-day operation of the Hotel's business, including, without
limitation, amounts sufficient for the maintenance of petty cash funds, operating bank accounts, receivables, payrolls, prepaid expenses,
advance deposits, funds required to maintain inventories, and amounts due to/or from Manager and/or Owner less accounts payable and accrued
current liabilities.

 

1.2          Terminology.
All personal pronouns used in this Agreement, whether used in the masculine, feminine or neuter gender, shall include all genders; the
singular shall include the plural, and the plural shall include the singular. The titles of Articles, Sections and Subsections in this
Agreement are for convenience only, and neither limit nor amplify the provisions of this Agreement, and all references in this Agreement
to Articles, Sections, Subsections, paragraphs, clauses, sub-clauses or exhibits shall refer to the corresponding Article, Section, Subsection,
paragraph, clause or sub-clause of, or exhibit attached to, this Agreement, unless specific reference is made to the articles, sections
or other subdivisions of, or exhibits to, another document or instrument.

 

1.3          Exhibits.
All exhibits, schedules and other attachments attached hereto are by this reference made a part of this Agreement.

 

ARTICLE 2

MANAGEMENT OF HOTEL

 

Owner hereby engages and
appoints Manager, pursuant to the terms of this Agreement, to operate and manage the Hotel, and Manager hereby agrees and contracts to
plan, operate, repair and manage the Hotel pursuant to the terms of this Agreement.

 

Subject to the terms of this
Agreement, Hotel operations shall be under the exclusive supervision of Manager, which, except as otherwise specifically provided in
this Agreement, shall be responsible for the proper and efficient operation, maintenance and repair of the Hotel in accordance with the
terms of this Agreement. Except as specifically set forth in this Agreement, Manager shall have discretion and control respecting matters
relating to management and operation of the Hotel, including, without limitation, charges for rooms and commercial space, credit policies,
food and beverage services, other Hotel services, employment policies, granting of concessions or leasing of shops and agencies within
the Hotel, procurement of inventories, supplies and services, promotion and publicity and, in general, all activities necessary for operation
of the Hotel.

  

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Manager shall devote its knowledge, experience
and efforts to operate and manage the Hotel pursuant to this Agreement in a businesslike manner in accordance with the Operating Standards.
Manager shall make available to Owner the full benefit of the judgment, experience and advice of the members of Manager's organization
and staff with respect to the policies pursued by Owner in operating, maintaining, and servicing the Hotel.

 

ARTICLE 3

TERM

 

3.1         Term.   The
agreement shall be in effect for the initial Term. If this Agreement has not been otherwise terminated in accordance with the terms of
this Agreement, upon the expiration of the initial Term, the initial Term shall be automatically be extended by four (4) terms of one
(1) year each, unless either Owner and Manager send a termination notice at least thirty (30) days prior to the then expiration of the
Term to cancel this Agreement effective as of the then next expiration of the Terms (as it may be extended).
Notwithstanding the foregoing, the Agreement may be terminated prior to the scheduled expiration of the Term or any extension
thereof (i) upon the sale of the Hotel to a bona fide Third Party Purchaser, subject to and as allowed and provided in Article 18 hereof;
and (ii) as otherwise provided in Articles 15, 17 and 18.

 

3.2         Surrender.   On
the expiration or sooner termination of the Term, Manager shall quit and surrender the Premises to Owner in the condition required pursuant
to this Agreement and take such other actions as contemplated by Article 20 hereof.

 

ARTICLE 4

USE AND OPERATION OF THE HOTEL

 

4.1         Operation.   Manager
shall be the sole and exclusive manager of the Hotel during the Term and shall operate the Hotel in accordance with the Operating Standards
and the provisions of this Agreement. Manager shall act in good faith with respect to the proper protection of and accounting for Owner's
assets and shall deal at arm's length with Owner and all third parties.

  

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4.2          Employment.   (a)   Subject
to the terms of this Agreement, Manager shall select, employ, promote, transfer, compensate, terminate where appropriate, supervise,
direct, train, and assign the duties of the Executive Personnel and, through the Executive Personnel, a sufficient number of personnel
whom Manager reasonably determines to be necessary or appropriate for the proper, adequate and safe operation and management of the Hotel
(collectively, the "Hotel Employees"). All such employees of the Hotel shall be employees of Manager or Manager's Affiliate.
In addition, Manager may, from time to time, assign one or more of its employees to the staff of the Hotel on a full-time, part-time
or temporary basis. Notwithstanding the provisions of this Section 4.2 or any other provision of this Agreement, all costs, expenses
and liabilities relating to Hotel Employees shall be expenses of operating the Hotel and the responsibility of Manager for acts or omissions
of Hotel Employees shall not extend beyond responsibility for the gross negligence or willful misconduct of, or the willful violation
of Legal Requirements by the Executive Personnel. Subject to Section 4.6 below, Manager will negotiate with any union lawfully entitled
to represent such employees and may execute collective bargaining agreements or labor contracts resulting therefrom that have been approved
by Owner. Manager shall fully comply with all Legal Requirements having to do with worker's compensation, social security, unemployment
insurance, hours of labor, wages, working conditions, and other employer-employee related subjects. The cost of all labor, employees
and employment arrangements and any benefits and taxes related thereto shall be charged as Gross Operating Expenses of the Hotel and
shall be accrued in accordance with generally accepted accounting principles (“GAAP”) and shall be promptly paid by
Owner in accordance with the terms of this Agreement. The costs provided for in the immediately preceding sentence shall include, by
way of example and not limitation, all reasonable costs and expenses (including, without limitation, all employment related expenses
incurred by Manager with respect to the Hotel Employees), such as severance pay, unemployment compensation and health insurance and related
costs (i.e., in order to comply with COBRA-type regulations) as a result of the termination of employees and which shall have been paid
or accrued in accordance with GAAP. Manager shall use commercially reasonable efforts and exercise reasonable care to select qualified,
competent, and trustworthy employees. The Hotel's general cashier and all employees having check signing authority shall be adequately
bonded or insured to the reasonable satisfaction of Owner (or as provided herein) and the cost of such bonds or insurance shall be an
expense of the Hotel. To the extent possible and reasonably available, Manager shall use local labor to fill non-Executive Personnel
positions in the operation of the Hotel. Owner may at any time consult or communicate with Manager regarding any of the Hotel Employees,
but will not interfere in the day-to-day activities of Hotel Employees. The Manager shall not discriminate against any employee or applicant
for employment because of race, color, religion, national origin, ancestry, age, sex or sexual orientation, and all employment advertising
shall indicate that Manager and Owner are each an Equal Opportunity Employer as that term is defined under Legal Requirements.

 

Notwithstanding
anything to the contrary contained in this Agreement, the following subparagraphs (b) and (c) shall apply to any liability that may,
from time to time, arise out of the Employee Retirement Income Security Act of 1974 ("ERISA")
and the Multi-employer Pension Plan Amendments Acts of 1980 ("MEPPA"),
respectively, as from time to time amended.

 

(b)       Employee
Benefits: Any Hotel Employees who are not then represented by a collective bargaining representative shall be entitled to participate
in the incentive programs, profit sharing and/or other employee retirement, disability, health, welfare or other benefit plan or plans
then made available by Manager to similarly situated employees of other hotels managed by Manager, in accordance with their respective
terms. Manager will have the right to charge the Hotel with its allocable share of the cost of any such plan or plans and any contributions
to be made thereunder provided that such charges and contributions shall be determined by Manager in good faith on a uniform basis with
respect to charges and contributions imposed for the same or similar plans at other hotels then managed by Manager, subject to Legal
Requirements. Manager's rights under this Subsection (b) shall be subject to the condition that Manager shall not put into effect any
amendment to any existing plan, or adopt any additional plan, which is not imposed upon all other similarly situated hotels managed by
Manager.

 

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Upon the expiration or termination
of this Agreement, the sale of the Hotel or other similar event, Manager shall cooperate with the Owner with respect to disposition of
such plan or plans (or plan assets) in a mutually satisfactory manner, all in compliance with then applicable Legal Requirements.

 

(c)       Collective
Bargaining or Other Multi-employer Plans: Manager and Owner agree that with respect to any withdrawal liability arising under any collective
bargaining agreement or other "multi-employer plan" (as defined in Section 3(37) of ERISA) in which the Hotel Employees become
participants, the obligations of the parties shall be determined as follows:

 

(1)       Withdrawal
liability arising with respect to Hotel Employees shall be the responsibility of Owner, and Owner shall either pay the amount of such
withdrawal liability directly to such plan or reimburse Manager for withdrawal liability payments made to such plan by Manager with respect
to Hotel Employees (including withdrawal liability arising after the sale or other termination of this Agreement, provided that such
liability arises as a result of such sale, disposition, termination or other similar event). To the extent permitted under then applicable
laws, regulations and agreements, Manager shall cooperate with Owner in structuring transactions and transferring actual or contingent
withdrawal liability to a successor in ownership or purchaser of the Hotel in accordance with "relief" provisions of ERISA,
such as ERISA Section 4204 or then applicable statutory or regulatory provisions of a similar nature.

 

(2)       For
purpose of this subparagraph (c), the term "withdrawal liability" shall mean the actual amount assessed by and payable to a
multi-employer pension fund upon a complete or partial withdrawal of the Hotel or Hotel Employees from such fund. Manager shall cooperate
with Owner in challenging a plan's assessment of such liability, provided that all costs of litigation, arbitration or other procedures
shall be paid by Owner (including any bonds that must be posted). If Manager or its Affiliates have employees at other locations who
participate in the same multi-employer plan as Hotel Employees, Owner shall be charged with and be responsible only for multi-employer
plan withdrawal liability arising solely with respect to the participation of Hotel Employees in such plan.

 

4.3          Legal
Proceedings.   Legal Proceedings of a "non-extraordinary nature" (hereafter defined), may be instituted
by Manager, in accordance with guidelines and policies determined from time to time by Manager and Owner, in the name of Manager or the
Hotel or Owner and by counsel designated by Manager pursuant to such guidelines and policies. Legal Proceedings of an "extraordinary
nature" (hereafter defined) shall require Owner's prior approval of the proceedings and counsel approved by Owner. Manager shall
furnish Owner with quarterly status reports with respect to all Legal Proceedings of an extraordinary nature. In addition, Manager shall
have the right to defend, through counsel designated by Manager, Legal Proceedings of a non-extraordinary nature against Owner or Manager
resulting from the operation of the Hotel. The defense of Legal Proceedings against the Hotel of an extraordinary nature (including,
without limitation, any aspect of any claims against Manager or Owner arising out of the operation of the Hotel as to which the insurance
company denies coverage) shall be coordinated with Owner, designated counsel shall be subject to Owner's reasonable approval and Manager
shall furnish Owner with quarterly status reports with respect to such actions. All claims against Owner and/or Manager arising out of
the management or operation of the Hotel which (i) are not covered by insurance shall be promptly communicated to Owner and (ii) are
covered in whole or in part by insurance shall be promptly forwarded by Manager to the appropriate insurer (with a copy thereof to Owner
in the case of claims against Owner). Legal Proceedings of a "non-extraordinary nature" shall be proceedings in which the monetary
exposure is less than $50,000 that are (i) initiated by Manager or Owner relating to the operation of the Hotel for matters such as collections,
maintenance of licenses and permits, enforcement of contracts and proceedings against Hotel tenants; and/or (ii) defense of actions against
the Owner or Manager resulting from the operation of the Hotel, for matters such as guest claims for loss of property or injury to persons
and claims relating to employment or the application for employment at the Hotel. Legal Proceedings of an "extraordinary nature"
shall mean all other Legal Proceedings. All costs, expenses, fees and liability associated with any Legal Proceedings shall be paid solely
by Owner.

 

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4.4          Annual
Plan.  On or before the date that is forty-five (45) days following the Commencement Date, Manager shall submit to Owner
a proposed Annual Plan in Manager’s format for the remaining portion of the Fiscal Year in which the Commencement Date occurs and
Owner and Manager shall cooperate to agree on the annual plan for the remainder of the Fiscal Year in which the Commencement Date occurs,
which shall be the “Annual Plan” for such Fiscal Year. On or before December 1st of each year following the Commencement
Date, Manager shall submit to Owner a proposed Annual Plan in Manager’s format for the next Fiscal Year. On or before December
15th of each year following the Commencement Date, Owner either shall accept the proposed Annual Plan submitted to Owner by
Manager or shall submit to Manager a detailed list of Owner's objections or questions to the proposed Annual Plan ("Owner's Annual
Plan Objections"). Within fifteen (15) days after Manager's receipt of Owner's Annual Plan Objections, Owner and Manager shall
meet and discuss Owner's Annual Plan Objections with the goal of agreeing upon an Annual Plan for the subject Fiscal Year (the “Annual
Plan”). Owner, as part of Owner's Annual Plan Objections, shall have the right to object to the entire proposed Annual Plan
or to any specific item or items contained in the proposed Annual Plan. In the event Owner objects to the proposed Annual Plan or any
specific item or items of expense in the proposed Annual Plan and Owner and Manager are unable to reach agreement thereon as provided
above prior to commencement of the Fiscal Year in question, pending such agreement, the proposed Annual Plan or the specific item or
items of expense (not revenue) in question shall be suspended and replaced for such period that the Annual Plan or such item(s) are in
question by an amount equal to the lesser of (i) that proposed by Manager for such Fiscal Year, or (ii) if an objection to the entire
Annual Plan, the Actual Gross Operating Expenses for the immediately preceding Fiscal Year subject to an adjustment equal to the percentage
increase in the CPI over the last twelve (12) month period immediately preceding the start of the Fiscal Year in question, or (iii) if
an objection to a specific item or items of expense in the Annual Plan, such item or items of expense for the immediately preceding Fiscal
Year subject to an adjustment for each item equal to the percentage increase in the CPI over the twelve (12) month period immediately
preceding the start of the Fiscal Year in question.

 

(a)              
The Annual Operating Budget shall be prepared in accordance with the Uniform System of Accounts. The proposed Annual Operating
Budget shall incorporate Manager's good faith reasonable estimates of the items of revenue and expense contained therein and shall contain
the proposed budget for operations for the succeeding Fiscal Year. When approved by Owner, the proposed Annual Operating Budget shall
be the approved Annual Operating Budget. Any revisions, substitutions or additions to the Annual Operating Budget must be approved by
the Owner in writing. The proposed Annual Plan shall include for the ensuing Fiscal Year, the following proposed budgets and programs:

 

    	Management Agreement - Page	  12

     

    

 

A.                       
A proposed operating budget (the “Proposed Operating Budget”) on a monthly and yearly basis with detailed departmental
schedules for each line item and the assumptions underlying the same, including, without limitation: (a) projected occupancy and
average room rates by month broken down by room segment; (b) projected Total Operating Revenues; (c) proposed Hotel room rates
and charges for other services; (d) projected Gross Operating Expenses; (e) projected EBITDA; (f) proposed staff scheduling
and compensation (including, without limitation, any bonuses or other incentive compensation for Hotel Employees which may take the form
of a “bonus pool” stating an aggregate amount to be distributed among the Hotel Employees as appropriate, rather than separately
setting forth incentive and/or bonus compensation for each Hotel Employee); (g) a narrative comparison of budgeted revenue and expense
levels to the previous Fiscal Year’s estimated and actual results, highlighting material changes for the upcoming Fiscal Year;
(h) anticipated depreciation and amortization of fixed assets at the Hotel; (i) annual debt service with respect to the Hotel;
(j) projected contributions by, and distributions to, Owner as the result of Hotel operations; (k) an estimate of the working
capital funds required to be maintained, as of the end of each month; (l) a year-over-year comparison with comments regarding variance;
(m) the cost of the Centralized Services, and(o) all other items reasonably requested by Owner in order to provide the projected
cash flow for the Hotel during such upcoming Fiscal year.

 

B.                        
A proposed budget (the “Proposed Capital Expenditures Budget” or “Capital Budget” and when
the Annual Plan is approved and agreed, the “Approved Capital Budget”) setting forth Manager’s estimate of the
Capital Expenditures to be made respecting the Hotel for both of the following:

 

(a)              
major repairs, alterations, improvements, renewals and replacements (which repairs, alterations, improvements, renewals and replacements
are not routine maintenance, repairs and alterations referred to in Section 6.1.2(b)) to the structural, mechanical, electrical,
heating, ventilating, air conditioning, plumbing and vertical transportation elements of the Hotel building (“Major Capital
Expenditures”); and

 

(b)              
non-routine repairs and maintenance to the Hotel building which are normally capitalized under GAAP, such as exterior and interior
repainting, resurfacing building walls, floors, roofs and parking areas, and replacing folding walls and the like, but which are not
Major Capital Expenditures.

 

C.                        
A proposed budget (the “Proposed FF&E Budget”) setting forth Manager’s estimate of the FF&E expenditures
to be made and the sources of funds for the replacements and renewals to the Hotel’s FF&E, including all information necessary
to satisfy the reporting requirements in the License Agreement and the Mortgage relating to the FF&E Reserve.

 

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D.                       
A market overview of local competitive properties of the Hotel including narrative descriptions of (a) the Hotel’s
target market, (b) the Hotel’s relative position in such market, and (c) the proposed room rate structures and occupancy
for the target market.

 

E.                        
A marketing plan for the Hotel including narrative descriptions and Hotel allocable costs, of (a) Manager’s national
or regional or business segment marketing plans, (b) local Hotel marketing, and (c) intended sales initiatives.

 

F.                         
A staffing plan describing the general staffing needs for the operation and management of the Hotel.

 

In preparing the Proposed Operating
Budget, or otherwise from time to time upon the request of Owner, Manager shall use commercially reasonable efforts to investigate, consider
and incorporate into the day-to-day operations of the Hotel certain efficiencies and economies of scale that may be achieved by outsourcing
some or all services that may be currently provided “in-house”.

 

In addition, Manager shall provide to Owner for
Owner's review, a written schedule for the Hotel listing all executive and management employees to be employed "on-site" in
the direct management of the Hotel including, but not limited to the positions of General Manager, Director of Sales, and Chief Engineer.
These schedules shall include such employee's title or job description and the salary range including additional compensation or prerequisites
such as lodging, meals, maintenance, moving expenses, bonus/incentive compensation and the like. In the event that any employee's services
are shared with (or subsidized through a sharing arrangement with) another hotel, the employee shall be identified together with a description
of his/her responsibilities and the amount and source of any subsidy, together with a breakdown of the relative time expended with respect
to the Hotel and each other hotel. If Owner notifies Manager that Owner does not believe that some or all of the scheduled wages and
salaries are reasonable and customary as required above, then Manager shall promptly provide to Owner a wage and salary survey that supports
the scheduled wages and salaries. No proposed amendment including changes in salary or other compensation shall be effective unless the
salary or other compensation as changed is reasonable and customary as required above.

 

4.5          Contracts;
Equipment Leases.

 

Subject to the terms
of this Section 4.5, Manager may contract for the purchase of goods and services for the Hotel with third parties that have other contractual
relationships with Manager or its Affiliates, so long as the prices charged by such third parties are reasonably competitive. In addition:

 

    	Management Agreement - Page	  14

     

    

 

 

A.                        Contracts.
Manager is authorized, without the prior written approval of Owner if not otherwise expressly contemplated by the Annual Plan, to enter
in the name of Owner any contracts for or covering the Hotel (except for Equipment Leases and Space Leases as more fully described in
subparagraph B below) with vendors of its choice; provided, however, if not otherwise expressly contemplated by the Annual
Plan, Manager may not enter into any contract for or covering the Hotel without Owner’s prior written approval if (a) the
contract term is longer than one (1) year and is not terminable by Owner without penalty upon 30 days’ prior written
notice, or (b) the total expenditure by the Hotel pursuant to such contract shall be in excess $25,000.

 

B.                        
Equipment Leases. Manager is authorized, without the prior written approval of Owner if not otherwise a part of the Annual
Plan, to enter in the name of Owner any equipment leases and Space Leases covering the Hotel with vendors of its choice; provided,
however, if not otherwise expressly contemplated by the Annual Plan, Manager may not enter into any equipment lease without Owner’s
prior written consent if (a) the contract term is longer than one (1) year and is not terminable by Owner without penalty upon
30 days’ prior written notice or (b) the total expenditures under such Equipment Lease or Space Lease exceed $25,000.

 

4.6       Labor
Relations. Manager shall have no right to enter into any collective bargaining
agreement concerning any employees of the Hotel without the prior written approval of Owner,
which may be granted or withheld in its reasonable discretion. Upon Owner’s approval of any such agreement, Manager shall be responsible
to perform such agreements. To the extent applicable, Manager: (a) represents that it is an equal opportunity employer
as described in Section 202 of Executive Order 11246 dated September 24, 1965, as amended, and as such agrees to comply with the provisions
of Paragraphs 1 through 7 of Section 202 of said Executive Order during the performance of this Agreement, (b) agrees to comply with
the affirmative action requirements of Part 60.741 of Title 41, Code of Federal Regulations, with respect to handicapped workers during
the performance of this Agreement, (c) agrees to comply with the affirmative action requirements of Part 60.250 of Title 41, Code of
Federal Regulations, with respect to Disabled Veterans and Veterans of the Vietnam Era during the performance of this Agreement, and
(d) shall submit to Owner in the form approved by the Director of the Office of Federal Contract Compliance, U.S. Department of Labor,
a certification that Manager does not and will not maintain any facilities that provide for their employees in a segregated manner, or
permit their employees to perform their services at any location under its control, where segregated facilities are maintained, and that
Manager will obtain a similar certification from its contractors.

 

4.7       Liquor
License. Manager shall obtain and maintain throughout the Term any and all alcoholic beverage licenses either in its name or its
designee and shall maintain the alcoholic beverage licenses in good standing and effect, free of all liens (and in compliance with the
conditions imposed upon such alcoholic beverage licenses by any alcoholic beverage control commission or other governmental authority
or agency and pursuant to any License Agreement.)

 

4.8       Employee
Discount. To the extent Manager provides discounted rates to Manager’s employees at other hotels managed by Manager or its
Affiliates, pursuant to discount rate programs applicable to other hotels, Manager agrees to include this Hotel in such discounted rate
programs (subject to availability and black-out periods determined by Owner and Manager during the Annual Plan process, or as otherwise
approved by Manager or Owner as part of the revenue management of this Hotel) and to provide the same discounted rates to the Hotel Employees,
to the extent allowed under the management and franchise agreements affecting such other hotels.

 

4.9       Forms.
Manager shall prepare or cause to be prepared for execution by Owner all forms, reports and returns, if any, required to be filed by
Owner under applicable law with respect to the operation of the Hotel; however, Manager shall not be obligated to prepare any of Owner's
income tax returns. Without limitation, Manager shall timely prepare and deliver, as required by law, an Internal Revenue Service Tax
Form 1099 with respect to payments made during a calendar year to third party contractors and professionals.

 

    	Management Agreement - Page	  15

     

    

 

4.10       Notice
of Violations. Manager shall promptly notify Owner in writing of any written notice received from any regulatory or
governmental body regarding an actual or perceived violation of
any Legal Requirements.

 

4.11        In-House
Services. Manager shall have the right to provide in-house services to the Hotel, including without limitation, legal counsel, the
reasonable costs of which shall not exceed current market rates for similar services and shall be paid to Manager or its Affiliates as
an

Gross Operating Expense of the Hotel; provided, however, that the cost of such in-house services shall not exceed the $25,000 in the
aggregate in any Fiscal Year without Owner’s prior written approval. In the event Manager desires to enter into any transaction
with an Affiliate or any person in which Manager or any of its Affiliates has any ownership, investment or management interest or responsibility
which is on terms that are not arms-length, Manager shall (i) disclose to Owner the nature of such affiliation prior to engaging in any
transaction in connection with the Hotel; and (ii) obtain the prior written approval of Owner (which consent shall not be unreasonably
withheld, conditioned or delayed), regardless if such transaction was included in the approved Annual Plan.

 

4.12       Centralized
Services. Subject to the terms and conditions of this Agreement, Manager shall furnish or cause its Affiliates to furnish to the
Hotel, the Centralized Services. Subject to the approved Annual Plan and the terms and conditions of this Agreement, Owner shall pay
to Manager the Hotel’s allocable share of the Centralized Services actually incurred by Manager or its Affiliates (without profit,
premium or mark-up or other element of compensation of any kind). Although the method of allocation of the Centralized Services among
the Managed Hotels may change from time to time as agreed to by Owner and Manager, the current method of allocating the Centralized Services
is set forth on Schedule IV. Additional Centralized Services may be added by amendment to Schedule IV from time to time only upon Owner’s
prior written approval (which shall not be unreasonably withheld, conditioned or delayed) with Manager’s explanation of how the
costs of such additional Centralized Services to be charged and allocated among the Manager managed hotels or if provided for in an approved
Annual Plan. Except with respect to the Centralized Services, under no circumstances shall Manager charge for any general corporate overhead
of Manager or Affiliates (except as otherwise provided or allowed in this Agreement). As part of the Proposed Annual Plan, in addition
to the Centralized Services, Manager will set forth a list of those additional services (if any) that are furnished generally on a central
or system-wide basis to Managed Hotels, together with Manager’s proposal as to which of such additional services are appropriate
for the Hotel.

 

4.13       Lease.
Owner or Manager at Owner’s request shall make any and all lease payments under the Lease as and when they become due, and shall
comply with and perform any and all covenants contained in the Lease, in each instance before any event of default (as defined in the
Lease) or other event occurs under the Lease, which would trigger the lessor’s right to terminate the Lease.

 

ARTICLE 5

RELATIONSHIP OF PARTIES

 

Owner and Manager acknowledge
and agree that this Agreement creates an agency relationship; provided, however, that (a) each Hotel Employee shall be the employee of
Manager or Manager’s Affiliate and not of Owner, (b) Manager's authority is subject to the terms and conditions of this Agreement,
and (c) nothing in this Agreement shall constitute, or be construed to be, or create, a partnership, joint venture or lease or employment
arrangement between Owner and Manager with respect to the Hotel or the operation thereof. Employees or agents of Manager are not by this
Agreement or by any actions of Owner and/or Manager hereunder made employees of Owner, and are not entitled to the benefits provided
by Owner or its Affiliates to its employees, including but not limited to, group insurance, leave and pension plan. This Agreement shall
not be deemed at any time to be an interest in real estate or a lien or security interest of any nature against the Hotel, the Premises
or any other land used in connection with the Hotel, or any equipment, fixtures, inventory, motor vehicles, contracts, documents, accounts,
notes, drafts, acceptances, instruments, chattel paper, general intangibles, or other personal property now existing or that may hereafter
be acquired or entered into with respect to the Hotel or the operation thereof.

 

ARTICLE 6

ADVERTISING

 

Subject to and in strict
compliance with the provisions of the License Agreement, Manager shall arrange and contract for all advertising, which Manager may reasonably
deem necessary, in accordance with Section 4.4, for the operation of the Hotel. So long as the License Agreement may be in effect, Manager
generally shall advertise the Hotel under the name of the Hotel set forth on Schedule I or such other name as Owner may designate or
approve.

 

    	Management Agreement - Page	  16

     

    

 

ARTICLE 7

RESERVE FOR FF&E

 

7.1.       Reserve
for Replacement of FF&E. The Reserve shall be funded pursuant to Section 7.2, and Manager shall use amounts in the Reserve to
cover the cost of FF&E expenditures and Capital Improvements, as described in Section 4.4 in conjunction with the Approved Capital
Budget. All FF&E, Capital Improvements and the Reserve  shall
be the property of Owner.

 

7.2       Transfers
to Reserve for FF&E. Commencing on the Commencement Date and continuing thereafter during the remainder of the Term, Manager
shall deposit monthly into the Reserve for FF&E an amount equal to the amounts required by Lender and/or by Licensor; provided that
in no event will the amounts to be deposited monthly into the Reserve be less than an amount equal to such amounts required by the Owner’s
lender or the Franchisor.

 

7.3       Annual
Adjustment. At the end of each Fiscal Year and following receipt by Manager of the annual accounting referred to in Article 10, an
adjustment will be made to such annual account, if necessary and if available, so that the appropriate amount shall have been deposited
in the Reserve.

 

7.4       Maintenance
of Reserve. Checks or other documents of withdrawal shall be signed by representatives of Manager who shall be bonded or otherwise
insured pursuant to insurance provisions of this Agreement. The proceeds from the sale of FF&E no longer needed for the operation
of the Hotel shall be deposited in the Reserve, but not be credited against the obligation to deposit cash in such fund for the then
current Fiscal Year. All interest earned or accrued on amounts invested from the Reserve shall be added to the Reserve (but shall not
be credited against Owner's obligations to fund the Reserve), and shall not constitute Total Operating Revenues or be included therein.

 

7.5       Accumulation
of Reserve and Additional Cost of FF&E and Capital Improvements. Owner and Manager acknowledge and agree that portions of the
Reserve may, from time to time in accordance with the then-current Annual Plan, be used for more significant expenditures than could
be reserved for in a single year. Accordingly, at the end of each Fiscal Year, any amounts remaining in the Reserve shall be carried
forward to the next Fiscal Year, and shall be in addition to the amount to be reserved in the next Fiscal Year. In the event at any time
there are insufficient funds in the Reserve for any Fiscal Year to pay the cost of FF&E in accordance with the Annual Operating Budget
and the Approved Capital Budget, then Owner will, within thirty (30) days after request therefor by Manager shall provide the additional
cash to the Manager.

 

7.6.       Final
Remittance. Upon expiration or termination of this Agreement, subject to the other terms and provisions of this Agreement, all remaining
amounts in the Reserve shall be remitted forthwith to Owner.

 

ARTICLE 8

REPAIRS AND MAINTENANCE AND CAPITAL IMPROVEMENTS

 

8.1       Repairs
and Maintenance. Subject to the terms hereof, Manager shall, from time to time, make such expenditures from Total Operating Revenues
for repairs and maintenance including service contracts ("Repairs and Maintenance") as required by the Lender, the License
Agreement, the Legal Requirements, the then current Annual Plan or as necessary to maintain the Hotel in good operating
condition in compliance with the License Agreement and otherwise in the condition required by this Agreement, including but not limited
to repairs and maintenance of HVAC, mechanical and electrical systems, exterior and interior repainting, resurfacing building walls and
parking areas, waterproofing of exterior surfaces of floors, roofs, and replacement of plate glass, or the like. It is Owner's intent
that the sums allocated for Repairs and Maintenance in accordance with the then current Annual Plan are to be fully expended during that
Fiscal Year exclusively for the purposes identified in such Annual Plan. Except in the event of an emergency due to casualty, act of
God or otherwise under circumstances in which it would be unreasonable to seek to obtain prior approval (and provided that Manager shall
notify Owner of any such expenditure within a reasonable time given the nature and scope of the emergency), all expenditures for the
foregoing shall be as provided in the Annual Operating Budget and the Approved Capital Budget. If any such Repairs or Maintenance shall
be made necessary by any condition against the occurrence of which Owner has received the guaranty or warranty of the builder or the
Hotel or of any supplier of labor or materials for the Hotel or of any supplier of labor or materials for the construction of the Hotel,
then Manager may invoke said guarantees or warranties in Owner's or Manager's name and Owner shall cooperate in all reasonable respects
with Manager in the enforcement thereof.

 

    	Management Agreement - Page	  17

     

    

 

8.2             
Capital Improvements. Owner may, from time to time, at its sole expense, make such structural repairs, replacements, substitutions,
alterations, additions or improvements (exclusive of FF&E) ("Capital Improvements") in or to the Hotel as Owner
shall determine are necessary to comply with the Operating Standards. If Capital Improvements included in the definition of Building
and Appurtenances shall be required at any time during the Term by the terms of any Mortgage, the License Agreement, to maintain the
Hotel in good operating condition or by reason of any Legal Requirements, or because Manager and Owner jointly agree upon the desirability
thereof, then in such event all such Capital Improvements shall be made with as little hindrance to the operation of the Hotel as reasonably
possible. Notwithstanding the foregoing, as long as the Hotel can continue to operate without interruption, Owner shall have the right
to contest the need for any such Capital Improvements required by any Legal Requirements and may postpone compliance therewith, if so
permitted by law and if such postponement will not expose Manager to any civil or criminal liability. All recommendations by Manager
of Capital Improvements shall be submitted in conjunction with the Capital Budget for the Fiscal Year described in Section 4.4(b). In
the event that Owner elects to perform Major Renovations to the Hotel, the oversight of the performance of the Major Renovations shall
be placed to bid, it being agreed that the Manager or its Affiliates may participate in any such bidding process.

 

8.3             
Service Contracts. Manager, without requiring the consent of Owner, shall enter into any contract for cleaning, maintaining,
repairing or servicing the Hotel or any of the constituent parts of the Hotel as Manager deems necessary for the operation of the Hotel,
except as specifically provided in Section 4.4 or 4.5. Unless otherwise approved by Owner, all service contracts shall: (a) be in the
name of Owner or Owner's nominee, (b) to the extent customary, include a provision for cancellation thereof by Owner or Manager upon
not more than thirty (30) days written notice, and (c) shall require that all contractors provide evidence of such insurance as is customarily
carried by other contractors involved in similar servicing arrangements.

 

8.4       Liens.
Owner and Manager shall cooperate and use all commercially reasonable efforts to prevent any liens from being filed against the Hotel
that arise from any maintenance, changes, repairs, alterations, improvements, renewals or replacements in or to the Hotel. If any such
liens are filed, Manager shall, subject to the availability of funds therefor in the Operating Accounts or as otherwise supplied by Owner,
obtain the release thereof prior to the institution of legal proceedings in connection therewith. The cost of obtaining such release
shall be included in Gross Operating Expenses, unless the imposition of the lien results from a default by Owner or Manager, in which
event the cost of obtaining such release shall be borne by such defaulting party.

 

8.5       Notice
of Unavoidable Interruptions. In the event of any occurrence constituting an Unavoidable Interruption, Manager shall promptly notify
Owner of such occurrence and shall keep Owner informed as to the extent and impact thereof on the Hotel.

 

ARTICLE 9

WORKING CAPITAL AND BANK ACCOUNTS; DISTRIBUTIONS

 

9.1       Working
Capital. Owner shall provide initial Working Capital in the amount set forth on Schedule I in addition to the value of all Inventories.
Owner shall at all times cause sufficient funds to be on hand in the Operating Accounts to assure the timely payment of all current liabilities
of the Hotel, including but not limited to Gross Operating Expenses, all other costs and expenses incurred in connection with the Hotel
pursuant to this Agreement and the performance by Manager of its obligations under this Agreement, all fees, charges and reimbursements
payable to Manager hereunder and all amounts required hereunder to be transferred into the Reserve. In no event shall Owner permit the
balance in the Operating Accounts to be less than an amount equal to the estimated monthly operating expenses of the Hotel as reflected
in the then current Annual Operating Budget. From time to time, upon five (5) days prior written notice from Manager that such funds
are required, Owner shall furnish to Manager funds that Manager deems reasonably necessary to assure that the Project shall have adequate
working capital as herein provided. In the event Owner fails to supply required working capital in accordance with the provisions of
this Section or if Manager otherwise deems such action to be necessary, Manager may use all or part of the funds in the Reserve to supplement
the Operating Accounts in order to defray or pay the Hotel's operating costs and expenses, to the extent permitted by the Mortgage. Owner
shall promptly reimburse the Reserve for all sums so used or transferred. All unexpended Working Capital, Inventories and Operating Equipment
and Supplies purchased with Working Capital shall remain the property of Owner.

 

    	Management Agreement - Page	  18

     

    

 

9.2       Operating
Account. All funds (exclusive of funds deposited in the Reserve and house banks at the Hotel) received by Manager in the operation
of or otherwise relating to the Hotel, and funds for Working Capital provided by Owner or retained by Manager from Total Operating Revenues,
shall be deposited in the Operating Account, provided that in connection with any cash management arrangements with the Lender, all Total
Operating Revenues shall be deposited to the Operating Account upon being swept out of the accounts associated with such cash management
arrangements. No funds shall be deposited into the Operating Account attributable to any other property. To the extent permitted by the
Mortgage, amounts in the Operating Account may be temporarily withdrawn and invested by Manager in any Permitted Investments, having
due regard for the timing of cash needs, but in no event shall such funds be co-mingled by Manager with any other funds. From the Operating
Account, Manager shall pay all Gross Operating Expenses (other than the excess FF&E if funded by or through Owner) before any penalty
or interest accrues thereon, however, taking into account sound cash management. All interest earned or accrued on amounts invested from
the Operating Account shall be added to the Operating Account. All checks or other documents of withdrawal from the Operating Account
shall be signed by representatives of Manager except as provided in Section 9.3 hereof.

 

9.3       Maintenance
of Operating Account. Subject to Section 9.4, the Operating Account shall be opened and maintained at all times by Manager and checks
and other documents of withdrawal shall be signed only by representatives of Manager who are covered by the insurance required herein.
The Operating Account and any other bank accounts approved by Owner shall be in Owner's name (for example, “[Owner’s name]
d/b/a/ [trade name of Hotel]”).

 

Manager shall not change the bank or open or
close any bank account described in this Article 9 without Owner's prior written approval, which approval Owner shall not unreasonable
withhold.

 

9.4       Final
Remittance. Upon the expiration or termination of this Agreement, after payment of all Gross Operating Expenses for which bills were
received to such date, Manager's Management Fee, Reimbursable Expenses, any Termination Fee and any other amounts then due and payable
to Manager, all remaining amounts in (i) the Reserve, (ii) the Operating Account and (iii) the Permitted Investments, shall be transferred
forthwith to Owner by Manager. Owner shall pay Manager any remaining Management Fee, any Reimbursable Expenses and any other amounts
then due and payable to Manager and Owner shall pay, or cause to be paid, and shall hold Manager harmless from and against all Gross
Operating Expenses or other costs or expenses received after Manager has so transferred all funds. The provisions hereof shall survive
any termination of this Agreement.

 

9.5       Distributions
of Excess Cash. The Owner agrees that no distributions of cash to Owner or any other party designated by Owner from the Operating
Account except in accordance with the following:

 

Full payment of the following
items in the following order has occurred:

 

		(A)	all due and payable Management Fees, Centralized
                                            Services costs, Reimbursable Expenses and/or any other amounts due hereunder to Manager;

		(B)	due and payable Gross Operating Expenses;
                                            and

		(C)	the deposit of any reserves required to
                                            be held hereunder, under the Mortgage or the License Agreement.

 

Upon payment of the same, Manager may distribute
from the Operating Account to Owner all sums in the Operating Accounts in excess of the then working capital requirements of the Hotel
determined in accordance with Section 9.1 of this Agreement.

 

    	Management Agreement - Page	  19

     

    

 

ARTICLE 10

BOOKS, RECORDS AND STATEMENTS

 

10.1       Books
and Records. Manager (at the cost of Owner) shall keep full and adequate books of account and other records reflecting the results
of operation of the Hotel in accordance with the Uniform System of Accounts and GAAP. The books of account and all other records relating
to or reflecting the operation of the Hotel shall be kept either at the Hotel or at Manager's corporate offices and shall be available
to Owner and its representatives and its auditors or accountants, at all reasonable times for examination, audit, inspection and transcription
at Owner's sole cost and expense. All of such books and records pertaining to the Hotel including, without limitation, books of account,
guest records and front office records at all times shall be the property of Owner. Upon any termination of this Agreement, all of such
books and records forthwith shall be turned over to Owner at a location reasonably designated by Owner so as to insure the orderly continuance
of the operation of the Hotel, but such books and records shall thereafter be available to Manager at all reasonable times for inspection,
audit, examination and transcription for a period of two (2) years. Any books and records relating to Hotel Employees and payroll costs
shall be the property of the Manager.

 

10.2       Financial
Reports.

 

(a)       Manager
shall deliver to Owner within twenty (20) days following the close of each Accounting Period a monthly profit and loss statement reflecting
a comparison of periodic and year-to-date actual revenues and expenses with the Annual Operating Budget as well as a periodic and year-to-date
comparison of such actual revenues and expenses with those of the prior Fiscal Year.

 

(b)       Further,
Manager shall provide to Owner within twenty (20) days following the close of each Accounting Period a report prepared in accordance
with the example set forth in Exhibit B attached hereto and made a part hereof.

 

(c)       Further,
within seventy-five (75) days after (i) the end of each Fiscal Year and (ii) the end of the Term of this Agreement, Manager shall
deliver to Owner an annual accounting, showing the results of operation of the Hotel during the Fiscal Year and a computation of Total
Operating Revenues, Gross Operating Expenses, and any other information necessary to make the computations required hereby or which may
be requested by Owner, all for such Fiscal Year. The annual accounting for any Fiscal Year shall be controlling over the interim accountings
for such Fiscal Year. Owner shall have the right to conduct an audit of the books.

 

(d)       Further,
Manager shall prepare and deliver any additional reports or information as Owner is required to provide under the License Agreement with
respect to the operations of the Hotel.

 

10.3       Audits
by Owner. Owner shall have the right to audit, conducted either by Owner's internal personnel or by a third party auditor retained
by Owner at its expense, all items of expense and revenue under this Agreement including, but not limited to, Total Operating Revenues,
Gross Operating Expenses, depreciation, the Management Fee and Reserve. Manager shall cooperate and assist with such audit. In the event
that an audit reflects an underpayment to Owner or Manager or an overpayment to Manager or Owner, Manager shall correct same by a corrective
payment to Owner or Manager, as appropriate, within ten (10) days following notice of the audit results to Manager, subject to Owner’s
and Manager’s right to challenge the audit results in accordance with the provisions of Article 30 of this Agreement.

 

10.4       Segregation
of Accounts. In any instance where Manager manages several properties for Owner, Manager shall segregate the income and expenses
of each property so that Total Operating Revenues from each property will be applied only to the bills and charges from that property.

 

    	Management Agreement - Page	  20

     

    

 

ARTICLE 11

MANAGER'S MANAGEMENT FEES; TIMING OF 

PAYMENT TO MANAGER

 

11.1       Fees.
For each Fiscal Year or portion thereof, Manager shall receive, by a distribution made by Manager out of Total Operating Revenues
at the end of each Accounting Period in respect of its management services hereunder, a fee (collectively, the "Management Fee(s)")
calculated as follows:

 

(a)  
the Base Fee set forth on Schedule I; plus

 

(b)  
the fees and costs for Centralized Services provided herein.

 

The Management Fee generally shall be computed
separately for each Fiscal Year and shall not be accumulated from Fiscal Year to Fiscal Year. Owner shall reimburse Manager for all Reimbursable
Expenses incurred by it in connection with the performance of this Agreement. Any such amount shall be payable within thirty (30) days
of billing, and upon request of Owner, Manager shall provide a statement showing in reasonable detail the nature and amount of such expenses,
together with supporting documentation reasonably requested by Owner.

 

11.2       Treatment
of Proceeds of Business Interruption Insurance and Condemnation Awards. In the event of a casualty or condemnation for temporary
use resulting in the payment of business interruption insurance (with respect to such casualty) or a condemnation award (with respect
to such condemnation for temporary use), the amount of such proceeds shall be considered a part of Total Operating Revenues for the purpose
of computing Manager's Management Fee.

 

ARTICLE 12

INSURANCE

 

Manager shall procure and maintain (i) the Workers’
Compensation and employer’s liability insurance required under Section 12.2.1 and (ii) Commercial Crime insurance required under
Section 12.2.2 and (iii) Employment Practices Liability insurance required under Section 12.2.4 and (iv) at Manager’s sole cost
and expense, the professional liability/errors and omissions insurance required under Section 12.2.7. Except to the extent caused by
Manager’s or its Affiliate’s negligence or willful misconduct, Owner assumes all risks in connection with the adequacy of
any insurance and waives any claim against Manager and its Affiliates for any liability, cost, or expense arising out of any uninsured
or under-insured claim. All insurance for the Hotel that is obtained under Manager’s insurance program will terminate effective
upon Termination. Except as otherwise provided herein, the costs and expense of the insurance required by the Manager under this Article
12 shall be a Gross Operating Expense or otherwise paid by Owner.

 

12.1       Property
Insurance. Insurance on the Hotel (including the improvements and contents) against loss or damage on an all risk coverage basis and
all other risks covered by the usual standard extended coverage endorsements, insuring against loss or damage from windstorm, flood,
hail and earthquake, all to the extent available on commercially reasonable terms, with deductible limits in an amount not to exceed
$25,000 per occurrence will be procured and maintained by the Owner, provided however with respect to windstorm and earthquake coverage,
providing for a deductible reasonably satisfactory to Owner and Manager, all in an amount which shall be sufficient to avoid any coinsurance
penalty clause application;

 

12.1.1       Insurance
against loss or damage from explosion of boilers, pressure vessels, pressure pipes and sprinklers, to the extent applicable, installed
in the Hotel; and

 

12.1.2       Business
interruption insurance covering net income plus necessary continuing expenses for interruptions caused by any occurrence covered by the
insurance referred to in Section 12.1.1 and 12.1.2, for a period of not less than twelve (12) months commencing at the time of loss.

 

    	Management Agreement - Page	  21

     

    

 

12.2       Operational
Insurance.

 

12.2.1       Workers’
Compensation and employer’s liability insurance as may be required under Applicable Laws covering all of the Hotel Employees, with
such deductible limits in an amount not to exceed $25,000 and waiver of subrogation in favor of Owner will be procured and maintained
by the Manager.

 

12.2.2       Fidelity
bonds or insurance, subject to a deductible of not more than $25,000 per loss, covering Manager’s on site Hotel Employees in job
classifications normally bonded in the hotel industry or as otherwise required by law will be procured and maintained by the Manager.
Such coverage shall include a loss payable endorsement in favor of Owner and, to the extent available on commercially reasonable terms,
shall include an extension for third party coverage with an endorsement confirming such extension that protects Owner’s property,
including, without limitation, monies and securities.

 

12.2.3       Commercial
general public liability insurance and excess umbrella liability insurance, including, but not limited to, coverage against claims for
personal injury, death or property damage occurring on, in, or about the Hotel, including, without limitation, innkeeper’s liability,
garage liability, garage keeper’s legal liability, liquor liability and automobile insurance on vehicles operated in conjunction
with the Hotel, as applicable, with single-limit coverage for personal and bodily injury and bodily damage of at least $1,000,000 per
occurrence and $2,000,000 in the aggregate and protection for third party claims will be procured and maintained by the Owner. Manager
and any other party or interest requested by Manager shall be included as an additional named insured under the coverages required in
this subsection.

 

12.2.4       Employment
practices liability insurance with an extension for third party claims will be procured and maintained by the Manager.

 

12.2.5       Umbrella
liability insurance coverage to a limit of not less than $25,000,000 which shall provide excess coverage of all underlying insurances
will be procured and maintained by the Owner.

 

12.2.6       Manager’s
or Manager’s Affiliates’ corporate office professional liability/errors and omissions insurance with a minimum amount of
a $2,000,000 limit of liability, covering financial loss arising from errors and omissions committed in the performance of Hotel Management
services at the Hotel. Such insurance shall provide coverage for claims arising from professional services performed by Manager for wrongful
acts which shall be defined as any actual or alleged negligent act, error or omission, misstatement or misleading statement or personal
injury offense committed by the Manager or by any other person or entity acting on Manager’s behalf in the performance of or failure
to perform professional services. Personal injury offense also means any actual or alleged false arrest, detention or imprisonment, malicious
prosecution, defamation including libel, slander and disparagement, publication or an utterance in violation of an individual’s
right to privacy and invasion of the right to private occupancy, including wrongful entry or eviction. The cost of this insurance shall
be borne by Manager and is not an Operating Expense.

 

12.2.7       Cyber
Liability Insurance, covering privacy liability, data breach, network security, network extortion, and business interruption, against
loss from the failure by the Owner or the Hotel or by an independent contractor for which the Insured is legally responsible (including
Manager) to properly handle, manage, store, destroy or otherwise control any : (i) personal information; (ii) third party corporate information
in any format provided to the Insured, the Hotel or the Manager and specifically identified as confidential and protected under a nondisclosure
agreement or similar contract; (iii) an unintentional violation of the Owner’s, Manager’s or the Hotel’s privacy policy
that results in the violation of any law or regulation with respect to privacy and personal information; (iv) a failure of computer network
security. Such coverage will provide minimum limits of Five Million Dollars ($5,000,000).

 

12.3       Cost
and Expense. Except as otherwise provided herein, insurance premiums and any costs or expenses respecting the insurance described in
this Article 12 shall be a Gross Operating Expense of the Hotel or otherwise paid by Owner. Premiums on policies for more than one year
shall be charged pro rata over the period of the policies. Any reserves, losses, costs, damages or expenses which are uninsured, or fall
within deductible limits or self-insured retentions, shall be treated as a cost of insurance and shall be a Gross Operating Expense.

 

    	Management Agreement - Page	  22

     

    

 

12.4       Coverage.
All insurance described in this Article 12 to be obtained by Manager (at Owner’s request) may be obtained by endorsement or equivalent
means under Manager’s blanket insurance policies, provided that such blanket policies substantially fulfill the requirements specified
herein. Deductible limits and self-insured retentions shall be as provided in the blanket policies covering the hotels leased or managed
by Manager. In addition, Manager shall not self-insure or otherwise retain such risks or portions thereof as it may respecting other
hotels it leases or manages. Notwithstanding the foregoing, all insurance policies and coverages shall be subject to the requirements
of all Mortgages and any License Agreement.

 

12.5       Policies
and Endorsements.

 

12.5.1       Where
permitted and as applicable, all insurance provided under this Article 12 shall be carried in the name of Manager. Owner, Fee Owner and
each of their officers, members, partners, shareholders, directors, agents, Affiliates, employees, successors and assigns, Licensor and
the holder of the Mortgage on the Hotel, if any, shall be named as additional insureds on any insurance hereunder and any losses thereunder
shall be payable to the parties as their respective interests may appear. To the extent any insurance is carried in the name of Owner,
Manager and its officers, members, partners, shareholders, directors and employees shall be named as additional insureds on any such
policies and any losses thereunder shall be payable to the parties as their respective interests may appear. The party procuring such
insurance shall deliver to the other party certificates of insurance respecting all policies so procured, including existing, additional
and renewal policies and, in the case of insurance about to expire, shall deliver certificates of insurance respecting the renewal policies
within ten (10) days of the respective expiration dates.

 

12.5.2       All policies of insurance provided
under this Article 12 shall, to the extent obtainable, have attached an endorsement that such policy shall not be canceled or materially
changed without at least thirty (30) days prior notice to Owner, Manager, any Franchisor and the holder of the Mortgage.12.6

 

12.6.       Waiver
of Subrogation. Owner and Manager each waive their respective rights of subrogation against each other.

 

12.7.       Mortgage
Requirements. Insurance shall be maintained in a manner consistent with the terms and conditions of any Mortgage and any conflict
between those terms and conditions and the provisions of this Agreement shall be resolved in favor of the Mortgage.

 

ARTICLE 13

REAL AND PERSONAL PROPERTY TAXES; UTILITIES

 

13.1       Taxes.
Manager shall, on behalf of Owner, pay from the Total Operating Revenues, on or before the dates the same become delinquent, with the
right to pay the same in installments to the extent permitted by law, all real estate taxes, all personal property taxes and all betterment
assessments levied against the Hotel or any of its component parts. Manager shall promptly deliver to Owner all notices of assessments,
valuations and similar documents to be filed by Manager or Owner, which are received from taxing authorities by Manager. Owner shall
have the right to hire property tax consultants or like professionals that reasonably provide economic benefits to Owner and the costs
thereof shall be a part of Gross Operating Expenses. Notwithstanding the foregoing obligations of Manager, Owner may elect to contest
the validity or the amount of any such tax or assessment, provided that such contest does not materially jeopardize Manager's rights
under this Agreement. Manager agrees to cooperate with Owner and execute any documents or pleadings required for such purpose, provided
Owner agrees to reimburse Manager for any out-of-pocket costs occasioned to Manager by any such contest. At Owner's election, all costs
relating to any such contest may be paid from the Operating Account but will not be included as Gross Operating Expenses.

 

13.2       Utilities,
Etc. Manager shall promptly pay all fuel, gas, light, power, water, sewage, garbage disposal, telephone and other utility bills currently
as required to operate the Hotel from the Total Operating Revenues.

 

    	Management Agreement - Page	  23

     

    

 

ARTICLE 14

USE OF NAME

 

14.1       Name.
During the Term of this Agreement, the Hotel shall at all times be known by the hotel name designated on Schedule I or by such
other name as from time to time may be agreed upon by Owner and Manager. Manager shall not use or employ such name unless such use fully
complies with the terms of the License Agreement, if any.

 

ARTICLE 15

DAMAGE OR DESTRUCTION; CONDEMNATION

 

15.1       Damage
or Destruction. (a) If the Hotel or any portion thereof shall be damaged or destroyed at any time or times during the Term by fire,
casualty or any other cause commonly covered by fire and extended coverage insurance and the cost of repairing such damage and restoring
the Hotel to substantially its condition immediately prior to such damage or destruction, as reasonably estimated by Owner based upon
estimates Owner receives from contractors and other reasonable and customary evidence, will not exceed the sum of $1,000,000 plus adjustments
to reflect increases in the CPI for each Fiscal Year after 2018 exclusive of the cost of the foundation and footings ("Minimum
Cost"), Owner will, at its own cost and expense (subject to Owner's receipt of insurance proceeds sufficient to pay such costs
and expenses) and with due diligence repair and/or restore the Hotel so that after such repair and/or restoration, the Hotel shall be
in substantially the same condition as it was immediately prior to such damage or destruction.

 

(b)       If
the cost of such repair and/or restoration will, as so reasonably estimated by Owner, exceed the Minimum Cost, then Owner shall, within
one hundred twenty (120) days after such damage or destruction, elect by notice to Manager either (x) to carry out such repair and/or
restoration, in which case Owner shall complete such repair and/or restoration pursuant to the last sentence of Section 15.1(a) or (y)
to terminate this Agreement; should Owner so elect to terminate this Agreement. Upon the termination of this Agreement pursuant to this
paragraph, Operator shall be entitled to a Reinstatement Right for a period of 24 months from the date of termination.

 

(c)       In
the case of damage or destruction which Owner is required by the preceding provisions of this Section 15.1 to repair or restore or where
Owner has not elected under said preceding provisions to terminate this Agreement, Owner shall undertake to so repair and/or restore
such damage or destruction and neither Owner nor Manager shall have a right to terminate this Agreement on account of such damage or
destruction.

 

15.2       Condemnation.
If the whole of the Hotel shall be taken or condemned in any eminent domain, condemnation, compulsory acquisition or like proceeding
by any competent authority or if such a portion thereof shall be taken or condemned as to make it imprudent or unreasonable, in the sole
opinion of Owner, to use the remaining portion as a hotel of the type and class immediately preceding such taking or condemnation, then
the Term shall terminate as of the date title vests in the condemning authority. Manager has no interest in any award paid to Owner and
Manager shall make no claim against the condemnor for any loss to its business as a result of such condemnation or otherwise. If only
a part of the Hotel shall be taken or condemned and the taking or condemnation of such part does not, in the opinion of Owner, make it
unreasonable or imprudent to operate the remainder as a hotel of the type and class immediately preceding such taking or condemnation,
this Agreement shall not terminate, and so much of any award to Owner shall be made available as shall be reasonably necessary for making
alterations or modifications of the Hotel, or any part thereof, so as to make it a satisfactory architectural unit as a hotel of similar
type and class as prior to the taking or condemnation.

 

15.3.       Mortgage
Requirements. Actions as to damage or destruction and condemnation shall be taken only in a manner that is consistent with the terms
and conditions of the Mortgage and any conflict between those terms and conditions and the provisions of this Agreement shall be resolved
in favor of the Mortgage.

 

    	Management Agreement - Page	  24

     

    

 

ARTICLE 16

EVENTS OF DEFAULT

 

16.1       Manager
Defaults. Subject to the conditions contained in Section 17.3 below, each of the following shall constitute an Event of Default by
Manager:

 

(a)       The
failure of Manager to pay any sum of money to Owner provided for herein when the same is payable, if such failure is not cured within
ten (10) days after written notice specifying such failure is given by Owner to Manager

 

		(b)	An assignment by Manager in violation
                                            of the provisions of Article 23 hereof.

 

(c)       If
Manager shall fail to keep, observe or perform any other material covenant, agreement, term or provision of this Agreement to be kept,
observed or performed by Manager and such failure shall continue for a period of thirty (30) days after written notice specifying such
failure given by Owner to Manager, or if Manager due to any act or omission on the part of Manager and without the fault of Owner, shall
fail to maintain the Permits and such failure shall continue for a period of thirty (30) days after written notice specifying such failure
given by Owner to Manager; provided that if such failure is incapable of cure within such thirty (30) day period, then the cure period
shall be extended provided that Manager commenced the cure during such initial thirty (30) day period and thereafter diligently and continuously
pursues the cure thereof to completion.

 

(d)        If because of any act or omission
on the part of Manager, and without the fault of Owner, either (i) the License Agreement or (ii) any required license for the sale of
alcoholic beverages at the Hotel, is at any time suspended, terminated or revoked for a period of more than thirty (30) consecutive days,
provided, however, if, at the end of such thirty (30) day period the cure has not been effectuated notwithstanding Manager's diligent
and continuous attempts to cure, then the cure period shall be extended for an additional period of ninety (90) days.

 

(e)        If Manager shall fail
to maintain and operate the Hotel in accordance with the standards required under Section 4.1 and such failure shall not be due to a
refusal on the part of Owner to approve the Annual Plan submitted by Manager under Section 4.4 or Owner's failure to properly provide
funds requested pursuant to the provisions of Article 9 and such failure shall continue for a period of sixty (60) days after written
notice by Owner to Manager specifying the matters or conditions which constitute the basis for such Event of Default, provided that if
such failure is not reasonably capable of cure within such sixty (60) day period, then the cure period shall be extended provided that
Manager commences the cure during such initial sixty (60) day period and thereafter diligently and continuously pursues the cure thereof
to completion.

 

(f)       If
Manager shall apply for or consent to the appointment of a receiver, trustee or liquidator of Manager or of all or a substantial part
of its assets, admit in writing its inability to pay its debts as they come due, make a general assignment for the benefit of creditors,
take advantage of any insolvency law, or file an answer admitting the material allegations of a petition filed against Manager in any
bankruptcy, reorganization or judgment or if an order, judgment or decree shall be entered by any court of competition jurisdiction,
on the application of a creditor, adjudicating Manager bankrupt or insolvent or approving a petition seeking reorganization of Manager
or appointing a receiver, trustee or liquidator of Manager or of all or a substantial part of its assets, and such order, judgment or
decree shall continue unstayed and in effect for any period of ninety (90) consecutive days.

 

    	Management Agreement - Page	  25

     

    

 

(g)       The
filing of a voluntary petition in bankruptcy or insolvency or a petition for liquidation or reorganization under any bankruptcy law by
Manager, or Manager shall consent to, acquiesce in, or fail timely to controvert, an involuntary petition in bankruptcy, insolvency or
an involuntary petition for liquidation or reorganization filed against it.

 

(h)       The
filing against Manager of a petition seeking adjudication of Manager as insolvent or seeking liquidation or reorganization or appointment
of a receiver, trustee or liquidator of all or a substantial part of Manager's assets, if such petition is not dismissed within ninety
(90) days.

 

(i)       Failure
of Manager (but excluding such a failure which results from the failure by Owner to provide the necessary funds therefor) to maintain
at all times throughout the term hereof all of the insurance required to be maintained by Manager under Article 12, if such failure is
not cured within fifteen (15) days after written notice specifying such failure is given by Owner to Manager.

 

(j)       The fraud, gross
negligence, willful misconduct or criminal conduct of or by Manager in connection with the Hotel.

 

16.2       Owner
Defaults. Each of the following shall constitute an Event of Default by Owner:

 

(a)       The
failure of Owner to pay or furnish to Manager any money Owner is required to pay or furnish to Manager in accordance with the terms hereof
on the date the same is payable, if such failure is not cured within five (5) days after written notice specifying such failure is given
by Manager to Owner. If any sum of money is not paid within five (5) days following the date same becomes due and payable under this
Agreement, and Manager has advanced such sum on behalf of Owner, such sum shall bear interest at the Default Rate from the date Manager
advanced such sum on behalf of Owner until the date Owner actually pays such sum. If the failure to pay relates to the Management Fee,
such sum shall bear interest at the Default Rate from the date due until the date actually paid.

 

(b)       If
because of a default under the Mortgage, if any, not caused by the act or omission of Manager, the Mortgage shall be foreclosed, or the
Hotel sold in lieu of foreclosure.

 

    	Management Agreement - Page	  26

     

    

 

(c)       If
Owner shall apply for or consent to the appointment of a receiver, trustee or liquidator of Owner of all or a substantial part of its
assets, or admit in writing its inability to pay its debts as they come due, make a general assignment for the benefit of creditors,
take advantage of any insolvency law, or file an answer admitting the material allegations of a petition filed against Owner in any bankruptcy,
reorganization or insolvency proceeding, or if an order, judgment or decree shall be entered by any court of competent jurisdiction,
on the application of a creditor, adjudicating Owner a bankrupt or insolvent or approving a petition seeking reorganization of Owner
or appointing a receiver, trustee or liquidator of Owner or of all or a substantial part of its assets, and such order, judgment or decree
shall continue unstayed and in effect for any period of ninety (90) consecutive days.

 

(d)       The
filing of a voluntary petition in bankruptcy or insolvency or a petition for liquidation or reorganization under any bankruptcy law by
Owner, or Owner shall consent to, acquiesce in, or fail timely to controvert, an involuntary petition in bankruptcy, insolvency or an
involuntary petition for liquidation or reorganization filed against it.

 

(e)       The
filing against Owner of a petition seeking adjudication of Owner as insolvent or seeking liquidation or reorganization or appointment
of a receiver, trustee or liquidator of all or a substantial part of Owner's assets, if such petition is not dismissed within ninety
(90) days.

 

(f)        Failure
of Owner to maintain at all times throughout the term hereof all of the insurance required to be maintained by Owner under Article 12,
if such failure is not cured within fifteen (15) days after written notice specifying such failure is given by Manager to Owner.

 

(g)       The
failure of Owner to perform, keep or fulfill any of the other covenants, undertakings, obligations or conditions set forth in this Agreement,
or the failure of Owner to approve expenditures or to authorize procedures necessary to maintain the standards of the Hotel in accordance
with the Operating Standards, if such failure shall continue for a period of sixty (60) days after written notice by Manager or Licensor
to Owner specifying the matters or conditions which constitute the basis for such Event of Default, provided that if such failure is
incapable of cure within such sixty (60) day period, then the cure period shall be extended provided that Owner commences the cure during
such initial sixty (60) day period and thereafter diligently and continuously pursues the cure thereof to completion.

 

ARTICLE 17

TERMINATION UPON EVENT OF DEFAULT; OTHER REMEDIES;
OTHER MANAGER TERMINATION 

 

17.1         
Termination. Upon the occurrence of an Event of Default, in addition to and cumulative of any and all rights and remedies
available to the non-defaulting party under this Agreement, at law or in equity, the non-defaulting party may: (a) terminate this Agreement
without penalty, effective upon receipt of written notice of termination to the defaulting party, provided that termination may be effective
immediately in the case of fraud, gross negligence, willful misconduct, criminal conduct or misappropriation of funds; and (b) pursue
any and all other remedies and damages available to the non-defaulting party at law or in equity. In addition to and cumulative of the
foregoing, upon the occurrence of any Event of Default on the part of Owner, all Management Fees, Reimbursable Expenses and all other
sums payable to Manager under this Agreement shall be immediately due and payable without notice. In no event shall the provisions of
this Agreement with respect to the any allowed termination of this Agreement under certain circumstances be construed as defining or
limiting the amount recoverable by Manager from Owner by reason of any Event of Default on the part of Owner.

  

    	Management Agreement - Page	  27

     

    

 

	17.2	Manager’s Rights to Perform.

 

		(a)	If Owner shall fail to make any payment
                                            or to perform any act required of Owner pursuant to this Agreement, Manager may (but shall
                                            not be obligated to), without further notice to, or demand upon, Owner and without waiving
                                            or releasing Owner from any obligations under this Agreement, make such payment (either with
                                            its own funds or with funds withdrawn for such purpose from the Operating Accounts or the
                                            Reserve) or perform such act. All sums so paid by Manager and all necessary incidental costs
                                            and expenses incurred by Manager in connection with the performance of any such act, together
                                            with interest thereon at the Default Rate from the date of making such expenditure by Manager,
                                            shall be payable to Manager on demand.

 

		(b)	Manager shall have the right to set-off
                                            against any payments to be made to Owner by Manager under any provision of this Agreement
                                            and against all funds from time to time in the Operating Accounts and the Reserve, any and
                                            all liabilities of Owner to Manager. Manager may withdraw from the Operating Accounts and
                                            the Reserve from time to time such amounts as Manager deems desirable in partial or full
                                            payment of all or any portion of said liabilities, the amount of such withdrawals to be paid
                                            by Owner to Manager on demand and to be replaced in the respective account and fund.

 

17.3       Excused
Non-Performance. Notwithstanding any contrary provision of this Agreement, Manager shall be excused from the performance of any obligation
hereunder (including the obligation to operate the Hotel in conformity with the Operating Standards), and shall not be deemed in default,
for such period of time as such performance is prevented by a breach of this Agreement by Owner or a limitation imposed on Manager’s
ability to expend funds in respect of the Hotel, due to Owner’s act or Owner’s failure to act upon Manager’s request
for funds or payment of Gross Operating Expenses, including, Working Capital and/or payroll costs (provided Manager has provided Owner
with reasonably timely notice of the need for additional funds and that the failure to expend or make payment of the same shall reasonably
prevent Manager from meeting such obligation).

 

ARTICLE 18

OWNER'S ADDITIONAL TERMINATION RIGHTS

 

18.1       Sale
of the Hotel. If the Hotel is sold or is otherwise disposed of the Hotel any interests therein, to a bona fide third-party (the "Third-Party
Purchaser"), this Agreement will terminate effective upon the consummation of the closing of such sale. Owner shall provide
Manager with written notice of termination of this Agreement not less than sixty (60) days prior to the scheduled date of closing of
the sale of the Hotel, provided, however, if such a sale does not actually occur, the notice of termination shall be deemed ineffective
and no such termination shall occur. Upon such sale, the Manager shall be entitled to a termination fee equal to the average monthly
Base Fees payable hereunder prior to such sale multiplied by 12.

  

    	Management Agreement - Page	  28

     

    

 

18.2       No
Other Termination Right. Except as expressly provided herein, the Owner shall not have any other “without cause” or similar
discretionary right to terminate the Manager hereunder.

 

ARTICLE 19

INTENTIONALLY OMITTED

 

ARTICLE 20

TRANSFER TO OWNER UPON TERMINATION

 

Upon the termination or expiration
of the Term of this Agreement, whether due to the occurrence of an Event of Default or otherwise, Manager shall cooperate with Owner
and shall execute those documents or instruments reasonably requested by Owner in connection with the transfer or reissue the Permits,
without payment of a fee to Manager, to Owner or its nominee, provided that Manager shall not be required to incur liability or out of
pocket cost in connection with such transfer. Without limiting the generality of the foregoing, Manager shall cause its officials to
execute documents and visit licensing authorities, along with Owner's representatives, in order to expedite the orderly transfer or reissuance
to Owner or its designee of the Permits. Following the termination or expiration of the Term, Manager will prepare provide a final accounting
report in accordance with the provisions set forth in Section 10.2(c) of this Agreement and in the same manner and scope as previously
provided by Manager following prior Fiscal Years under this Agreement. In the event that Owner requests additional reports or assistance
from Manager following the termination or expiration of this Agreement, Owner shall pay to Manager the such reasonable fees as determined
by the Manager through the date on which such additional services or assistance are to be provided. In the event that this Agreement
terminates due to any reason other than a default by Manager under this Agreement, a sufficient number of Hotel Employees will be hired
by Owner or its successor, assign or designee, and retained for at least 90 days thereafter, so as not to cause a “mass layoff”
or “plant closing”, as defined in the Workers Adjustment and Retraining Act, 29 USC, sec 2101 et seq.

 

ARTICLE 21

NOTICES

 

All notices, elections, acceptances,
demands, consents and reports (collectively "notice") provided for in this Agreement shall be in writing and shall be
given to the other party at the address set forth below or at such other address as any of the parties hereto may hereafter specify in
writing.

 

To Owner:                PHR
CHERRY OPCO SUB, LLC

1140 Reservoir
Avenue

Cranston, RI 02920

Attn: Gregory
D. Vickowski

Telephone:
(401) 946-4600

Email:
gvick@procaccianti.com

  

    	Management Agreement - Page	  29

     

    

 

With
a copy to:       Ron M. Hadar, General Counsel

Procaccianti
Companies

1140
Reservoir Avenue

Cranston,
Rhode Island 02920

Telephone:
(401) 946-4600

Email:
rhadar@procaccianti.com

 

To Manager:           1140
Reservoir Avenue

Cranston, Rhode
Island 02920

Attn: Elizabeth
A. Procaccianti

Telephone: (401)
946-4600

Email: bproc@procaccianti.com

 

With a copy to:

Natasha Ruane,
Corporate Counsel

Procaccianti Companies

1140 Reservoir
Avenue

Cranston, Rhode
Island 02920

Telephone: (401)
946-4600

Email: nruane@procaccianti.com

 

Such notice or other communication may be given
by email between the hours of 9 a.m. to 5 p.m. EST, Monday through Friday or Federal Express or other nationally recognized overnight
carrier in which case notice shall be deemed given upon confirmed delivery. Notice may be mailed by United States registered or certified
mail, return receipt requested, postage prepaid, deposited in a United States post office or a depository for the receipt of mail regularly
maintained by the post office. If mailed, then such notice or other communication shall be deemed to have been received by the addressee
on the fifth (5th) day following the date of such mailing. Such notices, demands, consents and reports may also be delivered
by hand, in which case it shall be deemed received upon delivery.

 

ARTICLE 22

CONSENT AND APPROVAL

 

Except as herein otherwise
provided, whenever in this Agreement the consent or approval of Manager or Owner is required, such consent or approval shall not be unreasonably
withheld or delayed. Such consent or approval shall also be in writing only and shall be executed only by an authorized officer or agent
of the party granting such consent or approval.

  

    	Management Agreement - Page	  30

     

    

 

ARTICLE 23

NON-ASSIGNABILITY

 

This Agreement shall not
be assignable by Manager or Owner; provided however, that either party shall be entitled to assign this Agreement to an Affiliate of
such party as part of a modification to such party’s company structure in which all or substantially all of such party’s
assets are transferred to an Affiliate of such party; and Manager shall have the right to assign its rights to receive payments under
this Agreement as security for indebtedness or other obligations. Notwithstanding the foregoing, any “assignment” by Manager
to a successor entity resulting from a merger, acquisition, disposition or consolidation of all or substantially all of the equity or
assets of Manager shall be permitted and not require the consent of Owner hereunder so long as (i) either (A) the “Manager”
under this Agreement remains controlled by at least any two of James A. Procaccianti, Elizabeth A. Procaccianti, Gregory D. Vickowski,
Robert Leven, or Mark Bacon (the “Executive Team”) or, (B) if Manager is itself, or is controlled by, a corporation
whose stock is listed and publicly traded over-the-counter on a nationally recognized stock exchange in the United States, so long as
at least two (2) members of the Executive Team are on the Board of that corporation, (ii) the assignee continues to comply with all of
the obligations of Manager hereunder, (iii) the assignee, in Owner’s good faith reasonable judgment, has the skill, experience,
professional resources and financial ability to perform under this Agreement and can provide the comparable operating, management and
financial reporting functions of Manager under this Agreement consistent with the Operating Standards, including without limitation providing
the Centralized Services and holding the right to use all trademarks and proprietary information related to the Hotel, and (iv) no such
assignment shall cause Owner to be in default under the Franchise Agreement or under the Mortgage.

 

ARTICLE 24

INDEMNITY

 

24.1       Indemnity
by Manager. To the extent that Owner shall not be fully covered by insurance required to be maintained pursuant to this Agreement,
Manager shall indemnify, defend and hold harmless Owner, any director, officer, agent or officer or any corporate partner thereof, from
and against any damages, loss, liability, cost, action, cause, claim or expense, including attorneys' fees, arising out of or in connection
with the management and operation of the Hotel including, without limitation, all employment related claims and litigation (collectively,
the "Liabilities"). The costs of such indemnity shall be borne as follows:

 

(a)       If
the Liabilities are attributable to the gross negligence or willful misconduct of the Executive Personnel, the cost thereof shall be
borne solely by Manager and not paid out of Total Operating Revenues.

 

(b)       If
the Liabilities are attributable to any other reason or cause, the cost of such indemnification shall be paid as a Gross Operating Expense
of the Hotel or failing payment of the same, by Owner.

 

Manager's obligations under
this Section 24.1 shall not include any losses, expenses or damages arising from any matters relating to the structural integrity of
the Hotel or other matters relating to defects in design, materials or workmanship in the construction of the Hotel.

  

    	Management Agreement - Page	  31

     

    

 

24.2         
Indemnity by Owner. To the extent that Manager shall not be fully covered by insurance required to be maintained pursuant
to this Agreement or if, after giving effect to the provisions of Section 24.1(b) of this Agreement, Total Operating Revenues are not
sufficient to pay all Liabilities, Owner shall indemnify, defend and hold harmless Manager and its directors, officers, employees and
agents from and against any damages, loss, liability, cost, action, cause, claim or expense, including attorneys' fees, arising out of,
or incurred in connection with the management and operation of the Hotel.

 

24.3         
Survival. The provisions of this Article 24 shall survive the expiration or earlier termination of this Agreement.

 

ARTICLE 25

PARTIAL INVALIDITY

 

In the event that any one
or more of the phrases, sentences, clauses or paragraphs contained in this Agreement shall be declared invalid by the final and unappealable
order, decree or judgment of any court, this Agreement shall be construed as if such phrases, sentences, clauses or paragraphs had not
been inserted, unless such construction would substantially destroy the benefit of the bargain of this Agreement to either of the parties
hereto.

 

ARTICLE 26

MISCELLANEOUS

 

26.1       Disputes.
Whenever any issue or dispute arises under this Agreement relating to the Annual Operating Budget, the Approved Capital Budget and or
the calculation and payment of the Reserves, and the Management Fee, such issue or dispute shall be resolved utilizing the Uniform System
of Accounts and the by application of GAAP consistently applied.

 

26.2       Further
Assurances. Owner and Manager shall execute and deliver all other appropriate supplemental agreements and other instruments, and
take any other action necessary to make this Agreement fully and legally effective, binding and enforceable as between them and as against
third parties.

 

26.3       Waiver.
The waiver of any of the terms and conditions of this Agreement on any occasion or occasions shall not be deemed a waiver of such terms
and conditions on any future occasion.

 

26.4       Successors
and Assigns. Subject to and limited by Article 23, this Agreement shall be binding upon and inure to the benefit of Owner, its successors
and permitted assigns, and shall be binding upon and inure to the benefit of Manager, its successors and permitted assigns.

 

26.5       Governing
Law. This Agreement shall be construed, both as to its validity and as to the performance of the parties, in accordance with the
laws of the State of Michigan.

 

26.6       Compliance
with Mortgage and License Agreement. In carrying out their respective duties and obligations under the terms of this Agreement, Owner
and Manager shall take no action that could reasonably be expected to constitute a material default under any Mortgage or the License
Agreement and will take such actions as are reasonably necessary to comply therewith.

  

    	Management Agreement - Page	  32

     

    

 

26.7       Amendments.
This Agreement may not be modified, amended, surrendered or changed, except by a written document signed by the Owner and Manager agreeing
to be bound thereby.

 

26.8       Estoppel
Certificates. Owner and Manager agree, at any time and from time to time, as requested by the other party, upon not less than ten
(10) days' prior written notice, to execute and deliver to the other a statement certifying that this Agreement is unmodified and in
full force and effect (or if there have been modifications, that the same are in full force and effect as modified and stating the modifications),
certifying the dates to which required payments have been paid, and stating whether or not, to the best knowledge of the signer, the
other party is in default in performance of any of its obligations under this Agreement, and if so, specifying each such default of which
the signer may have knowledge, it being intended that such statement delivered pursuant hereto may be relied upon by others with whom
the party requesting such certificate may be dealing

 

26.9       Unavoidable
Interruptions. Subject to the express limitations set forth in this Agreement and excluding those obligations that accrue prior to
the occurrence of an event of Unavoidable Interruption or obligations that, if not performed, would cause a material adverse effect on
the Hotel or its operations (for instance, the requirement to maintain the Permits or insurance obligations hereunder), if either party's
failure to comply with, perform or satisfy any representation, warranty, covenant, undertaking, obligation or condition set forth in
this Agreement is caused by or due to, in whole or in part, any Unavoidable Interruption, such representation, warranty, covenant, undertaking,
obligation or condition (except regarding insurance coverages and monetary payments) shall be adjusted to the extent and for so long
as such party's failure is caused by or due to, in whole or in part, such Unavoidable Interruption.

 

26.10       Inspection
Rights. Owner shall have the right to inspect the Hotel and examine the books and records of Manager pertaining to the Hotel at all
reasonable times during the Term upon reasonable notice to Manager, and Owner and the holder of any Mortgage shall have access to the
Hotel and the books and records pertaining thereto at all times during the Term to the extent necessary to comply with the terms of any
Mortgage, all to the extent consistent with applicable law and regulations and the rights of guests, tenants and concessionaires of the
Hotel.

 

26.11       Subordination.
This Agreement, any extension hereof and any modification hereof shall be subject and subordinate to a Mortgage as provided therein.
The provisions of this Section shall be self-operative and no further instrument of subordination shall be required; however, Manager
will execute and return to Owner (or to Lender, as designated by Owner) such documentation as Owner or Lender may reasonably request
to evidence the subordination of this Agreement to the Mortgage.

 

26.12       Effect
of Approval of Plans and Specifications. Owner and Manager agree that in each instance in this Agreement or elsewhere wherein Manager
is required to give its approval of plans, specifications, budgets and/or financing, no such approval shall imply or be deemed to constitute
an opinion by Manager, nor impose upon Manager any responsibility for the design or construction of additions to or improvements of the
Hotel, including but not limited to structural integrity or life/safety requirements or adequacy of budgets and/or financing. The scope
of Manager's review and approval of plans and specifications is limited solely to the adequacy and relationship of spaces and aesthetics
of the Hotel in order to comply with the Operating Standards.

  

    	Management Agreement - Page	  33

     

    

 

26.13       Entire
Agreement. This Agreement constitutes the entire agreement between the parties relating to the subject matter hereof, superseding
all prior agreements or undertakings, oral or written.

 

26.14       Time
is of the Essence. Time is of the essence in this Agreement.

 

26.15       Interpretation.
No provision of this Agreement shall be construed against or interpreted to the disadvantage of any party hereto by any court or other
governmental or judicial authority by reason of such party having or being deemed to have structured or dictated such provision.

 

26.16       Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and need not be signed
by more than one of the parties hereto and all of which shall constitute one and the same agreement.

 

26.17       No
Electronic Transactions. The parties hereby acknowledge and agree that this Agreement shall not be executed, entered into, altered,
amended or modified by electronic means. Without limiting the generality of the foregoing, the parties hereby agree that the transactions
contemplated by this Agreement shall not be conducted by electronic means, except as specifically set forth in Article 21 of this Agreement.

 

26.18       Prohibited
Persons and Transactions.

 

(a)       Manager
is not, and shall not become, a person or entity with whom U. S. persons or entities are restricted from doing business under regulations
of the Office of Foreign Asset Control ("OFAC") of the Department of the Treasury (including those named in OFAC's Specially
Designated and Blocked Person's List) or under any statute, executive order (including the September 24, 2001, Executive Order Blocking
Property and Prohibiting Transactions With Persons Who Commit, or Support Terrorism), or other governmental action (such persons and
entities being "Prohibited Persons").

 

(b)       Owner
is not and shall not become a Prohibited Person.

 

26.19                 
Confidentiality. Owner
and Manager agree to keep the terms and conditions of all leases and other occupancy agreements in effect at the Hotel (if any) and all
other accruements relating to the Hotel, together with all information and data obtained, possessed, or generated by Manager in connection
with the Hotel (collectively, "Privileged Information"), strictly confidential
and not to make any public announcements or any disclosures to any third parties, either orally or in writing, with respect to any Privileged
Information without the express written consent of the other party hereunder; provided, however, the restrictions imposed hereby shall
not apply to any Privileged Information (1) which is required to be disclosed in order to comply with any law, ordinance, governmental
decree or any rule, regulation or decree of any interested governmental body or (2) which must otherwise be disclosed to relevant
third parties, including accountants, attorneys and lenders, in the course of reasonable and diligent management and operation of the
Hotel or the business of Owner, or any subsidiary or Affiliate of Owner or Manager. If Manager makes such disclosure, it shall notify
such third party of this provision and of the requirement of Owner for confidentiality. The provisions of this Section 26.19 shall survive
the expiration or termination of this Agreement for two (2) years after any termination or expiration of this Agreement.

  

    	Management Agreement - Page	  34

     

    

 

26.20                 
No Third Party Rights. This Agreement shall inure solely to the parties hereto. Notwithstanding any other provision of
this Agreement, no third party shall have any rights pursuant to the terms of this Agreement.

 

ARTICLE 27

NO REPRESENTATIONS AS TO INCOME OR FINANCIAL
SUCCESS OF HOTEL

 

In entering into this Agreement,
Manager and Owner acknowledge that neither Owner nor Manager has made any representation to the other regarding projected earnings, the
possibility of future success or any other similar matter respecting the Hotel, and that Manager and Owner understand that no guarantee
is made to the other as to any specific amount of income to be received by Manager or Owner or as to the future financial success of
the Hotel.

 

ARTICLE 28

REPRESENTATIONS OF MANAGER

 

In order to induce Owner
to enter into this Agreement, Manager does hereby make the following representations and warranties:

 

(a)       the
execution of this Agreement is permitted by the certificate of formation and partnership agreement of Manager and this Agreement has
been duly authorized, executed and delivered and constitutes the legal, valid and binding obligation of Manager enforceable in accordance
with the terms hereof;

 

(b)       to
the best knowledge of Manager, there is no claim, litigation, proceeding or governmental investigation pending, or, as far as is known
to Manager, threatened, against or relating to Manager, the properties or business of Manager or the transactions contemplated by this
Agreement which does, or may reasonably be expected to, materially and adversely affect the ability of Manager to enter into this Agreement
or to carry out its obligations hereunder, and to the best knowledge of Manager, there is no basis for any such claim, litigation, proceedings
or governmental investigation, except as has been fully disclosed in writing to Owner; and

 

(c)       neither
the consummation of the transactions contemplated by this Agreement on the part of Manager or to be performed, nor the fulfillment of
the terms, conditions and provisions of this Agreement, conflicts with or will result in the breach of any of the terms, conditions or
provisions of, or constitute a default under, any agreement, indenture, instrument or undertaking to which Manager is a party or by which
it is bound.

  

    	Management Agreement - Page	  35

     

    

 

ARTICLE 29

REPRESENTATIONS OF OWNER

 

In order to induce Manager
to enter into this Agreement, Owner does hereby make the following representations and warranties:

 

(a)       the
execution of this Agreement is permitted by the Limited Liability Company Agreement of Owner and this Agreement has been duly authorized,
executed and delivered and constitutes the legal, valid and binding obligation of Owner enforceable in accordance with the terms hereof;

 

(b)       there
is no claim, litigation, proceeding or governmental investigation pending, or as far as is known to Owner, threatened, against or relating
to Owner, the properties or business of Owner or the transactions contemplated by this Agreement which does, or may reasonably be expected
to, materially and adversely affect the ability of Owner to enter into this Agreement or to carry out its obligations hereunder, and
there is no basis for any such claim, litigation, proceedings or governmental investigation, except as has been fully disclosed in writing
to Manager; and

 

(c)       neither
the consummation of the transactions contemplated by this Agreement by this Agreement on the part of Owner to be performed nor the fulfillment
of the terms, conditions and provisions of this Agreement, conflicts with or will result in the breach of any of the terms, conditions
or provisions of, or constitute a default under, any agreement, indenture, instrument or undertaking to which Owner is a party or by
which it is bound.

 

ARTICLE 30

DISPUTE RESOLUTION

 

Except as specifically provided in Section 4.4
of this Agreement, Owner and Manager agree that any dispute between the parties related to or arising out of this Agreement that cannot
be amicably settled by the parties hereunder, shall first be submitted for non-binding mediation before resorting to any litigation,
equitable proceeding or other enforcement action. Such mediation shall be held within a twenty-five mile radius of the Hotel (or such
other location mutually agreed by the parties) and the parties shall cooperate in good faith to agree on a mediator who shall be a retired
or semi-retired judge having at least ten (10) years of experience on the bench hearing complex commercial transactions. If the parties
hereto have failed to designate, by a joint written statement, a mediator within thirty (30) days following the date of a written request
therefor by either Manager or Owner to the other, then either Owner or Manager may notify the local office of the American Arbitration
Association ("AAA") or JAMS and request such entity to select a person to act as the mediator to assist in the resolution
of the dispute. The mediation will be a non-binding conference between the parties conducted in accordance with the applicable rules
and procedures of AAA or JAMS (as determined by the mediator). The compensation of the mediator and all related expenses shall be borne
equally by the parties, each of whom shall bear their own costs, irrespective of the outcome of the mediation. If any dispute remains
unresolved between the parties after the mediation is complete, then either party shall be entitled to pursue its rights and remedies
at law or in equity. The provisions of this Article 30 shall survive the expiration or earlier termination of this Agreement.

  

    	Management Agreement - Page	  36

     

    

 

ARTICLE 31

ADDITIONAL OBLIGATIONS OF MANAGER

 

Manager acknowledges that
Owner is vitally interested in the qualifications of the individuals designated as the general manager and the director of sales of the
Hotel. Manager shall, from time to time, consult with Owner and obtain Owner's approval as to the appointment of individuals to such
positions; provided, however, Owner and Manager acknowledge that nothing in this Article is intended to limit or negate the authority
of Manager elsewhere provided in this Agreement to remove and replace, in its sole discretion, the Executive Personnel of the Hotel.

 

ARTICLE 32

TERMINATION OF THE LICENSE AGREEMENT

 

Owner reserves and shall
have the absolute right in its sole and unfettered discretion, at any time and without the consent or approval of (but with notice to)
Manager, to terminate the License Agreement, provided, however, that (i) Owner shall have no such right in order to establish its own
independent operations, such as an operation without a franchise or license or in its own hotel name; (ii) in the event of such a termination
by Owner, Manager shall have the right of approval (which right shall be reasonably exercised) of any new franchise or license for the
Hotel; and (iii) if Owner's decision to terminate the License Agreement is made without the consent of Manager, then the provisions of
Section 18.2 of this Agreement shall no longer apply.

 

ARTICLE 33

RECOURSE

 

Any provision of this Agreement
to the contrary notwithstanding, Manager hereby agrees that no personal, partnership or corporate liability of any kind or character
(including, without limitation, the payment of any judgment) whatsoever now attaches or at any time hereafter under any condition shall
attach to Owner or any of Owner's constituent entities and affiliates or any mortgagee for payment of any amount payable under this Agreement
or for the performance of any obligation under this Agreement. The exclusive remedies of Manager for the failure of Owner to perform
any of its obligations under this Agreement shall be to proceed against the interest of Owner in and to the Hotel for Manager's actual,
out-of-pocket damages (and not any consequential, punitive or exemplary damages), and Owner shall not be personally liable for any deficiency.

 

Notwithstanding any other
provision of this Agreement to the contrary, the liability of Manager arising out of or in connection with this Agreement and the transactions
and obligations contemplated hereby shall at all times be limited to the aggregate amount of management fees payable to Manager under
this Agreement during the initial Term (the “Manager’s Liability Cap”), and in any litigation, arbitration or
any other dispute, neither Owner nor any other party shall seek or have recourse to any other asset of Manager’s members, partners,
directors, officers, employees, associates, agents, executives or affiliates. Without limiting the foregoing, neither Manager nor any
party associated with Manager shall have any liability in excess of the Manager’s Liability Cap for any act by Manager (either
prior to or during the Operating Term of or after the expiration or earlier termination of this Agreement); provided, however, that the
Manager Liability Cap shall not apply to any liability of Manager or its Affiliates resulting from the fraud, gross negligence or willful
misconduct of Manager or its Affiliates. Notwithstanding anything contained in this Agreement to the contrary in no event shall Manager
be liable under this Agreement for any consequential, speculative, punitive, treble, or other special damages.

 

The rest of this page is intentionally left
blank.

  

    	Management Agreement - Page	  37

     

    

 

IN WITNESS WHEREOF, Owner
has caused this Agreement to be executed and its seal affixed by its partners duly authorized thereunto and Manager has caused this Agreement
to be executed and its seal affixed by its officer duly authorized thereunto, the day and year first above written, in duplicate.

 

 

	 	OWNER:
	 	 
	 	PHR
    CHERRY OPCO SUB, LLC
	 	 
	 	By:	/s/ James A. Procaccianti
	 	Name:
    James A. Procaccianti
	 	Title:  Authorized
    Representative
	 	 
	 	MANAGER:
	 	 
	 	PHR
    CHERRY TREE HOTEL MANAGER, LLC
	 	 
	 	By:	/s/ James A. Procaccianti
	 	Name:
    James A. Procaccianti
	 	Title:   Manager

 

	Signature Page to Management Agreement
    - Solo Page	 

 

     

     

    

 

SCHEDULE I

 

	Trade Name/Brand of Hotel:	Cherry Tree Inn and Suites
	 	 
	Physical Address of
  Hotel:	2345 N. US 31 North, Grand
  Traverse City, MI
	 	 
	Number of Guest Rooms:	76
	 	 
	Licensor:	None
	 	 
	Initial Working Capital:	$TBD
	 	 
	Base Fee:	The base fee payable (the "Base Fee") shall be an amount equal to three percent (3.0%)
  of Total Operating Revenues (which exclude the gross receipts of any licensees, lessees and concessionaires) in respect of any applicable
  period; provided, however, in the event that such 3.0% of revenues in any month is less than $7,500.00 (the “Minimum Monthly
  Charge”) the Owner will pay Manager the Minimum Monthly Charge for such month.
	 	 
	Centralized Services Fee:	A centralized service fee of $2,500 minimum per month shall be charged in addition to any other fees
  and costs constituting a Centralized Service
	 	 
	Incentive Fee:	None
	 	 
	 	 
	 	 

 

	Schedules – Page 1	 

 

     

     

    

 

SCHEDULE II

Gross Operating Expenses

 

1.1           Gross
Operating Expenses. “Gross Operating Expenses” means, except to the extent excluded below or in the Agreement,
all costs and expenses of operating the Hotel during the Term pursuant to this Agreement attributable to the Accounting Period, Fiscal
Year or portion of a Fiscal Year under consideration including, without limitation, the following:

 

(a)              
salaries and wages of Hotel Employees, including employee benefits, costs of payroll, and payroll and similar taxes but only to
the extent such expenses are attributable to such Hotel Employee’s employment at the Hotel;

 

(b)              
costs incurred with respect to sales and other revenues generated at the Hotel;

 

(c)              
the costs of all utilities and services including, without limitation, heat, air conditioning, water, light and power, local and
long distance telephone service, and data communication and computer services, except as such costs may be appropriately capitalized
in accordance with GAAP;

 

(d)               the
costs of all food and beverages sold or consumed and of all Operating Equipment and Inventories and Consumable Supplies placed in use,
including the sale, consumption and placement in use of Operating Equipment and Supplies initially supplied pursuant to this Agreement;

 

(e)              
the costs of all other goods and services provided, arranged or obtained by Manager in connection with its operation of the Hotel,
including, without limitation, public utilities charges and the cost of accounting systems, data processing, payroll processing and telecommunications
equipment, office supplies, services performed by third parties and all other supplies, services and hotel equipment of the nature and
type normally used by operators of hotels similar to the Hotel and as is common in the industry, except as such costs may be appropriately
capitalized in accordance with GAAP;

 

(f)               
all costs and fees of any arbitrators, auditors, lawyers and similar persons who perform services required or permitted pursuant
to this Agreement;

 

(g)              
all costs and expenses of technical consultants and specialized operational experts or personnel for services rendered to the
Hotel, except if such costs are incurred in connection with a capital transaction outside of the normal operations of the Hotel;

 

(h)               all
expenses related to marketing of the Hotel;

 

(i)                the
costs of maintaining books of account and other records and producing statements pursuant to Article 7 of this Agreement;

 

	Schedules – Page 2	 

 

 

     

     

    

 

 

(j)                the
actual amount of any goods and services or other similar value added taxes imposed by any governmental authority having jurisdiction
and paid as a result of the operations of the Hotel, less any credits with respect to such taxes otherwise granted with respect to the
operations of the Hotel;

 

(k)              
reasonable reserves for bad debts in accordance with GAAP;

 

(l)                any
insurance premiums for insurance obtained by or on behalf of Manager or Owner with respect to the Hotel, except for insurance premiums
for Manager’s or Manager’s Affiliates’ corporate office professional liability/errors and omissions;

 

(m)            
any deposits into any Reserve;

 

(n)              
all Property taxes and any similar taxes, charges and assessments against the Hotel;

 

(o)              
any fees payable under the License Agreement to Licensor;

 

(p)              
the Base Fee and the Centralized Services;

 

(q)              
Allocated Services;

 

(r)               
the cost of non-capital repairs to and maintenance of the Hotel;

 

(s)               
all expenses otherwise contemplated by this Agreement that are to be treated or contemplated to be treated as Gross Operating
Expenses; and

 

(t)                
all expenses reimbursable to Manager pursuant to the terms and conditions of this Agreement.

 

1.2             
Exclusions from Gross Operating Expenses. For purposes of calculating the fees payable pursuant to this Agreement, Operating
Expenses shall not include any of the following:

 

(a)              
any repayments of advances by Manager on account of Capital Expenditures pursuant to this Agreement;

 

(b)              
any payments from the FF&E Reserve, whether principal or interest, relating to capital improvements to or encumbrances with
respect to the Hotel, including, without limitation, any payments relating to expenditures for initial FF&E and replacements or substitutions
therefor or additions thereto;

 

(c)              
land or building rental or mortgage payments;

 

(d)              
depreciation and amortization expenses, including costs of capital improvements which are made in accordance with this Agreement;

 

(e)              
income, capital or franchise taxes of a party hereto;

 

	Schedules –
    Page 3	 

 

     

     

    

 

(f)               
any Capital Expenditures;

 

(g)              
excise, sales, use and other taxes (including room taxes) or similar charges (i) collected directly from patrons or guests
or as part of the sale price of any goods or services or displays, (ii) remitted to a governmental authority and (iii) excluded
from Gross Revenues;

 

(h)              
salaries, wages, asset management fees or amounts paid to individuals or entities by or upon the instruction of Owner to the extent
such individuals or entities are not under the supervision or direction of Manager;

 

(i)                
interest payable on any credit facility provided to fund working capital; and

 

(j)                
expenses of Owner related to asset management.

 

	Schedules –
    Page 4	 

 

     

     

    

  

SCHEDULE III

 

Total Operating Revenues

 

1.1             
Total Operating Revenues. “Total Operating Revenues” means, subject to the exclusions provided for herein,
all of the following revenue, income and proceeds resulting from the operation of the Hotel and properly attributable to the Accounting
Period, Fiscal Year or portion of a Fiscal Year under consideration:

 

(a)              
Subject to the provisions below and in the Agreement, all revenues from the rental of guest rooms and suites in the Hotel and
all revenues earned from guests, patrons and other persons occupying space in or using the Hotel, including, without limitation, all
revenues derived from goods sold, food and beverage sales, meetings and other events, parking services, spa, health club or other Hotel
facilities’ use or membership, telephone, cable or access television or internet use and all other services provided in connection
with Hotel activities;

 

(b)              
The net proceeds actually received by Owner of use and occupancy or business interruption insurance with respect to the operation
of the Hotel after deduction from such proceeds of all necessary expenses incurred in the adjustment or collection thereof.

 

1.2             
Exclusions from Total Operating Revenues. For purposes of calculating the fees payable pursuant to this Agreement, Total
Operating Revenues shall not include any of the following:

 

(a)              
excise, sales, use and other similar taxes (including room taxes) or similar charges which are required by Applicable Laws to
be collected directly from patrons or guests or as part of the sale price of any goods or services or displays and which must be remitted
to a governmental authority;

 

(b)              
bad debts arising from Total Operating Revenues, provided that any recovered bad debts shall again become part of Total Operating
Revenues in the Fiscal Year in which they are recovered;

 

(c)              
gratuities, service charges or other similar receipts collected for payment to and paid to Hotel Employees and complimentary food
and beverage bills for Hotel Employees (to the extent that the complimentary food and beverage expenditures do not exceed the amount
set forth in Operating Budget unless Owner’s consent is received with respect to such excess amounts) the and guests;

 

(d)              
revenue, income and proceeds of sales of tenants, licensees and concessionaires;

 

(e)              
revenues, including gains or losses arising from the sale or other disposition of capital assets, including, without limitation,
FF&E no longer required for the operation of the Hotel;

 

	Schedules –
    Page 5 	 

 

     

     

    

 

(f)               
proceeds or awards arising from a taking or condemnation of capital property;

 

(g)              
receipts or credits for settlement of claims for loss or theft of or damage to personal property or furnishings, or any recoveries
relating to a breach of warranty or guaranty, excluding, however, those amounts that are compensation for items that would otherwise
be included in Total Operating Revenues hereunder;

 

(h)              
proceeds from any insurance policy other than the net proceeds actually received by Owner of use and occupancy or business interruption
insurance;

 

(i)                
receipts of a capital nature, including any financing of the Hotel;

 

(j)                
Existing Lease and License Arrangements;

 

(k)              
interest, if any, earned on any FF&E Reserve or on funds invested on behalf of Owner; or

 

(l)                
working capital provided by Owner.

 

	Schedules –
    Page 6	 

 

     

     

    

 

SCHEDULE IV

Centralized Services

 

	Schedules –
    Page 7	 

 

     

     

    

 

EXHIBIT A

 

DESCRIPTION OF PREMISES 

 

     

     

    

 

EXHIBIT B

 

EXAMPLE OF MONTHLY TRANSACTIONS REPORT

 

 

     

     

    

 

 

     

     

    

 

EXHIBIT C

COMPETITIVE SET

 

	STR#	 	 	Property Name	 	Room Count	 	 	Open Date	 	City	 	State	 
	 	22182	 	 	Bayshore Resort	 	 	120	 	 	05/1994	 	Traverse City	 	MI	 
	 	40962	 	 	Holiday Inn Express
    & Suites Acme Traverse City	 	 	81	 	 	06/2001	 	Williamsburg	 	MI	 
	 	13977	 	 	Comfort Inn Traverse City	 	 	62	 	 	06/1997	 	Traverse City	 	MI	 
	 	24165	 	 	Hampton Inn Traverse City	 	 	124	 	 	01/1987	 	Traverse City	 	MI	 
	 	29103	 	 	Grand Beach Resort Hotel	 	 	98	 	 	05/1992	 	Traverse City	 	MI	 
	 	59442	 	 	Cambria Hotels Traverse City	 	 	92	 	 	06/2009	 	Traverse City	 	MI	 
	 	36111	 	 	Fairfield Inn & Suites Traverse City	 	 	85	 	 	07/1999	 	Traverse City	 	MI	 
	 	10976	 	 	Cherry Tree Inn & Suites	 	 	76	 	 	11/1999	 	Traverse City	 	MIExhibit 10.1

 

Employment
Agreement

 

This
Employment Agreement (the “Agreement”), effective as of June 14, 2021 (the “Effective Date”),
is by and between Katherine Fogertey (the “Employee”) and each of Shake Shack Inc, a corporation organized under
the laws of the State of Delaware (“Pubco”), SSE Holdings, LLC, a limited liability company organized under the laws
of the State of Delaware (“Partnership”), and Shake Shack Enterprises, LLC, a limited liability company organized under
the laws of the State of New York (“Enterprises” and, together with Pubco and Partnership, collectively, the “Company”).

 

RECITALS

 

WHEREAS,
the Employee has been appointed Chief Financial Officer as of the Effective Date; and

 

WHEREAS, in connection with
such appointment, the parties desire to enter into this Agreement to reflect the terms of the Employee’s employment.

 

NOW, THEREFORE, in consideration
of the foregoing, and for other good and valuable consideration, including the respective covenants and agreements set forth below, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto agree, effective as of the Effective Date, as follows:

 

1.            Certain
Definitions

 

(a)            “Affiliate”
shall mean, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with,
such Person where “control” shall have the meaning given such term under Rule 405 of the Securities Act of 1933, as amended
from time to time.

 

(b)            “Agreement”
shall have the meaning set forth in the preamble hereto.

 

(c)            “Base
Salary” shall have the meaning set forth in Section 3(a).

 

(d)            “Board”
shall mean the Board of Directors of Pubco.

 

(e)            “Bonus”
shall have the meaning set forth in Section 3(b).

 

(f)            “Business” shall mean the business of developing, managing, and/or operating of (i) “better burger” restaurants, (ii) “quick
service” or “fast food” restaurants with an emphasis on hamburgers, and (iii) fast casual restaurants (i.e., restaurants
that do not offer table service but promise a higher quality of food with fewer frozen or processed ingredients than a fast food restaurant;
e.g., Chipotle Mexican Grill, Culvers and Panera).

 

     

     

    

 

(g)            The
Company shall have “Cause” to terminate the Employee’s employment hereunder upon: (i) the willful misconduct,
gross negligence or an act of dishonesty of the Employee with regard to the Company or any of its Affiliates, which in either case, results
in or could reasonably be expected to result in material harm to the Company or such Affiliate; (ii) the willful and continued failure
of the Employee to attempt to perform her duties with the Company or any of its Affiliates (other than any such failure resulting from
Disability), which failure is not remedied within 30 days after receiving written notice thereof; (iii) the conviction of the Employee
of (or the plea by the Employee of guilty or nolo contendere to) any felony involving moral turpitude (other than traffic related
offenses or as a result of vicarious liability); or (iv) a material breach by the Employee of any material provision of this Agreement,
which breach is not remedied within 10 days after receiving written notice thereof.

 

(h)            “Code”
shall mean the Internal Revenue Code of 1986, as amended.

 

(i)            “Company”
shall have the meaning set forth in the preamble hereto.

 

(j)            “Confidential Information” shall mean confidential, proprietary, and personal information about the Company, its partners and owners, and
its customers and patrons. Such confidential, proprietary, and personal information includes but is not limited to information concerning
the personal and financial affairs of the Company’s partners and owners as well as the Company’s business, financial condition,
operations, assets and liabilities, research and development, marketing and public relations strategies, formulas, programs, systems of
operations, recipes, ingredient lists, identification of suppliers and resources for goods and services, information regarding the needs,
preferences, electronic mail addresses, names and telephone numbers of Company customers and guests, customer and guest lists, employee
information, training manuals and videos, written procedures integral to the Company’s day-to-day operations, trade secrets, sales,
products, services, accounts, purchasers of Company products, marketing, packaging, merchandising, distribution, manufacturing, finance,
financial data, technology, intellectual property, including patents, design patents, trademarks, trade dress, copyrights, strategies,
business structures, operations or ventures or other business affairs or plans, or information relating to existing or contemplated businesses,
products and/or services of the Company, and any other information which the Company does not disclose to third parties not in a relationship
of confidence with the Company.

 

(k)            “Date of Termination” shall mean (i) if the Employee’s employment is terminated due to the Employee’s death, the
date of the Employee’s death; (ii) if the Employee’s employment is terminated due to the Employee’s Disability,
the date determined pursuant to Section 4(a)(ii); or (iii) if the Employee’s employment is terminated pursuant
to Section 4(a)(iii)-(vi), either the date indicated in the Notice of Termination or the date specified by the Company pursuant
to Section 4(b), whichever is earlier.

 

(l)            “Disability” shall mean the Employee’s inability to engage in any substantial gainful activity by reason of any medically determinable physical
or mental impairment that can be expected to result in death or that can be expected to last for a continuous period of not less than
12 months.

 

(m)            “Effective
Date” shall have the meaning set forth in the recitals hereto.

 

(n)            “Employee”
shall have the meaning set forth in the preamble hereto.

 

(o)            “Equity
Award” shall have the meaning set forth in Section 3(c).

 

(p)            “Extension
Term” shall have the meaning set forth in Section 2(b).

 

    2

     

    

 

(q)            The
Employee shall have “Good Reason” to terminate the Employee’s employment hereunder after the occurrence of one
or more of the following conditions without the Employee’s consent: (i) any material adverse change by the Company in the Base
Salary, position, duties, responsibilities, authority, title or reporting obligations, or the assignment of duties to the Employee by
the Company that are materially inconsistent with the Employee’s position; (ii) a relocation of the Employee’s principal
business location by more than 50 miles from its then current location; or (iii) any other material breach by the Company of this
Agreement or any other agreement with the Employee. Notwithstanding the foregoing, no termination for Good Reason will be effective unless:
(A) the Employee provides the Company with at least 30 days prior written notice of her intent to resign for Good Reason (which notice
must be provided within 60 days following the occurrence of the event(s) purported to constitute Good Reason); and (B) the Company
has not remedied the alleged violation(s) within the 30-day period; in which event the Employee’s resignation shall become
effective on the 30th day following the Company’s receipt of written notice.

 

(r)            “Initial
Term” shall have the meaning set forth in Section 2(b).

 

(s)            “Notice
of Termination” shall have the meaning set forth in Section 4(b).

 

(t)            “Person”
shall mean any individual, natural person, corporation (including any non-profit corporation), general partnership, limited partnership,
limited liability partnership, joint venture, estate, trust, company (including any company limited by shares, limited liability company
or joint stock company), incorporated or unincorporated association, governmental authority, firm, society or other enterprise, organization
or other entity of any nature.

 

(u)            “Release”
shall have the meaning set forth in Section 5(b).

 

(v)            “Release
Expiration Date” shall have the meaning set forth in Section 20(c).

 

(w)            “Section 409A”
shall mean Section 409A of the Code and the Department of Treasury regulations and other interpretive guidance issued thereunder,
including without limitation any such regulations or other guidance that may be issued after the Effective Date.

 

(x)            “Severance
Period” shall mean the period beginning on the Date of Termination and ending on the date that is commensurate with the end
of the Employee’s right to severance payments as set forth below:

 

		·	Three (3) months of severance payment if the Date of Termination is after the Employee has completed at least six (6) months
of service to the Company; or

 

		·	Six (6) months of severance payment if the Date of Termination is on or after the first (1st) anniversary date of
the Effective Date; plus

 

		·	For every twelve (12) months of service to the Company, as of the first (1st) anniversary date of the Effective Date, an
additional one (1) month of severance payment.

 

    3

     

    

 

In no event shall the Employee receive more than twelve (12) months
of severance payment.

 

(y)            “Term”
shall have the meaning set forth in Section 2(b).

 

2.            Employment

 

(a)            In
General. The Company shall employ the Employee under this Agreement and the Employee shall remain in the employ of the Company under
this Agreement, for the period set forth in Section 2(b), in the position set forth in Section 2(c), and upon
the other terms and conditions herein provided.

 

(b)            Term
of Employment. The initial term of employment under this Agreement (the “Initial Term”) shall be for the period
beginning on the Effective Date and ending on the third (3rd) anniversary thereof, unless earlier terminated as provided in
Section 4. The Initial Term shall automatically be extended for successive one-year periods (each, an “Extension
Term” and, collectively with the Initial Term, the “Term”), unless either party hereto gives notice of non-extension
of the Term to the other no later than ninety (90) days prior to the expiration of the then-applicable Term.

 

(c)            Position
and Duties. During the Term, the Employee: (i) shall serve as Chief Financial Officer of the Company, with responsibilities,
duties and authority customary for such position, subject to direction by the Chief Executive Officer; (ii) shall report directly
to the Chief Executive Officer; (iii) shall devote substantially all the Employee’s working time and efforts to the business
and affairs of the Company; and (iv) agrees to observe and comply with the Company’s rules and policies as adopted by
the Company from time to time. The parties acknowledge and agree that Employee’s duties, responsibilities and authority may include
services for one or more Affiliates of the Company.

 

3.            Compensation
and Related Matters

 

(a)            Base
Salary. During the Term, the Employee shall receive a base salary at a rate of Four Hundred Fifty Thousand U.S. Dollars ($450,000.00)
per annum, as adjusted, which shall be paid in accordance with the customary payroll practices of the Company (the “Base Salary”).
Employee’s Base Salary shall be reviewed annually in connection with Employee’s annual performance review with an opportunity
for an increase. The annual review of Employee’s Base Salary will consider both Employee’s and the Company’s performance.
Any adjusted salary then shall become Employee’s Base Salary.

 

(b)            Bonus.
With respect to each Company fiscal year that commences during the Term, the Employee shall be eligible to receive a performance-based
cash bonus (the “Bonus”) based on a target bonus opportunity of Fifty Percent (50%) of the Base Salary, which shall
be payable based upon the attainment of Company performance goals established each fiscal year by the Board or the Compensation Committee
thereof, with the opportunity to make up to One Hundred Percent (100%) of the Base Salary, which shall be payable if the Employee and
Company exceed such performance goals. Each such Bonus shall be payable within 120 days following the last day of the fiscal year with
respect to which it relates. Except as provided in Section 5, notwithstanding any other provision of this Section 3(b),
no bonus shall be payable with respect to any fiscal year unless the Employee remains continuously employed with the Company during the
period beginning on the Effective Date and ending on the applicable bonus payment date. Notwithstanding the foregoing, bonus for fiscal
2021 shall be measured quarterly, and shall be payable within 45 days following the last day of the fiscal quarter with respect to which
it relates. Bonus calculation for the fiscal quarter ended June 30, 2021 will be pro-rated based on the Effective Date. Employee
agrees and acknowledges that the future bonus awards, and the terms and conditions of such bonus awards, shall be subject to the sole
discretion of the Board (or the Compensation Committee of the Board).

 

    4

     

    

 

(c)            Equity
Award.

 

(i)            With
respect to each Company fiscal year commencing in fiscal 2022, the Employee shall be eligible to receive an annual equity compensation
award (each such award, an “Equity Award”), currently with a minimum target value of Five Hundred Thousand U.S. Dollars
($500,000.00). Each Equity Award shall be subject to the terms of the Shake Shack Inc. 2015 Incentive Award Plan, as amended and as it
may be further amended, or its successor plan (the “Incentive Award Plan”), and shall be set forth in one or more written
award agreements between the Company and the Employee. The Employee agrees and acknowledges that the future grant of equity awards, if
any, and the terms and conditions of such equity awards, shall be subject to the sole discretion of the Board (or the Compensation Committee
of the Board).

 

(ii)            Notwithstanding
anything in Section 3(c)(i) to the contrary, on or around July 15, 2021, Employee shall be granted an Equity Award
comprised of restricted stock units (the “Restricted Stock Units”) for such number of shares of Pubco’s Class A
common stock as may be determined based on an aggregate grant date fair value of Two Million U.S. Dollars ($2,000,000.00), as calculated
on or as close in time as practicable to the grant date. The Equity Award granted in this Section 3(c)(ii) shall vest,
provided that the Employee continues through the applicable vesting dates, in five equal installments beginning on the first anniversary
of the grant date and continuing on each anniversary date through the fifth anniversary of the grant date.

 

(d)            Benefits.
During the Term, the Employee shall be eligible to participate in employee benefit plans, programs and arrangements of the Company in
accordance with their terms, as in effect from time to time, and as are generally provided by the Company to its senior leaders.

 

(e)            Vacation;
Holidays. During the Term, the Employee shall be entitled to paid vacation each full calendar year in accordance with the Company’s
Paid Time Off Policy, currently eighteen (18) days. Any vacation shall be taken at the reasonable and mutual convenience of the Company
and the Employee. Holidays shall be provided in accordance with Company policy, as in effect from time to time.

 

(f)            Business
Expenses. During the Term, the Company shall reimburse the Employee for all reasonable, documented, out-of-pocket travel and other
business expenses incurred by the Employee in the performance of the Employee’s duties to the Company in accordance with the Company’s
applicable expense reimbursement policies and procedures.

 

    5

     

    

 

(g)            Indemnification.
During the Term and for so long thereafter as liability exists with regard to the Employee’s activities during the Term on behalf
of the Company, the Company shall indemnify the Employee (other than in connection with the Employee’s gross negligence or willful
misconduct) in accordance with the Company’s customary indemnification policies and procedures which are applicable to the Company’s
officers and directors.

 

4.            Termination.
During the Term, the Employee’s employment hereunder may be terminated by the Company or the Employee, as applicable, without any
breach of this Agreement only under the following circumstances:

 

(a)            Circumstances

 

(i)             Death.
The Employee’s employment hereunder shall terminate upon the Employee’s death.

 

(ii)            Disability.
If the Employee incurs a Disability, the Company may give the Employee written notice of its intention to terminate the Employee’s
employment. In that event, the Employee’s employment with the Company shall terminate, effective on the later of the 30th
day after receipt of such notice by the Employee or the date specified in such notice; provided that, within the 30-day period
following receipt of such notice, the Employee shall not have returned to full-time performance of the Employee’s duties hereunder.

 

(iii)            Termination
for Cause. The Company may terminate the Employee’s employment for Cause.

 

(iv)            Termination
without Cause. The Company may terminate the Employee’s employment without Cause.

 

(v)             Resignation
for Good Reason. The Employee may resign from the Employee’s employment for Good Reason.

 

(vi)            Resignation
without Good Reason. The Employee may resign from the Employee’s employment without Good Reason.

 

(b)            Notice
of Termination. Any termination of the Employee’s employment by the Company or by the Employee under this Section 4
(other than a termination pursuant to Section 4(a)(i) above) shall be communicated by a written notice to the other party
hereto (a “Notice of Termination”): (i) indicating the specific termination provision in this Agreement relied
upon, (ii) setting forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Employee’s
employment under the provision so indicated (except with respect to a termination pursuant to Sections 4(a)(iv) or (vi),
for which no detail is necessary), and (iii) specifying a Date of Termination which, if submitted by the Employee, shall be at least
thirty (30) days following the date of such notice with respect to a termination pursuant to Section 4(a)(v) or ninety
(90) days following the date of such notice with respect to a termination pursuant to Section 4(a)(vi); provided, however,
that a Notice of Termination delivered by the Company pursuant to Section 4(a)(ii) shall not be required to specify a
Date of Termination, in which case the Date of Termination shall be determined pursuant to Section 4(a)(ii); provided further,
that, notwithstanding the foregoing, in the event that the Employee delivers a Notice of Termination to the Company, the Company may,
in its sole discretion, accelerate the Date of Termination to any date that occurs following the date of Company’s receipt of such
Notice of Termination (even if such date is prior to the date specified in such Notice of Termination). A Notice of Termination submitted
by the Company (other than a Notice of Termination under Section 4(a)(ii)) may provide for a Date of Termination on the date
the Employee receives the Notice of Termination, or any date thereafter elected by the Company in its sole discretion. The failure by
the Company or the Employee to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause
or Good Reason shall not waive any right of the Company or the Employee hereunder or preclude the Company or the Employee from asserting
such fact or circumstance in enforcing the Company’s or the Employee’s rights hereunder. Notwithstanding the foregoing, a
termination pursuant to Section 4(a)(iii) shall be deemed to occur if following the Employee’s termination of employment
for any reason the Company determines that circumstances existing prior to such termination would have entitled the Company to terminate
the Employee’s employment pursuant to Section 4(a)(iii) (disregarding any applicable cure period).

 

    6

     

    

 

5.            Company
Obligations Upon Termination of Employment

 

(a)            In
General. Upon a termination of the Employee’s employment for any reason, the Employee (or the Employee’s estate) shall
be entitled to receive: (i) any portion of the Employee’s Base Salary through the Date of Termination not theretofore paid,
(ii) any expenses owed to the Employee under Section 3(f), (iii) any accrued but unused vacation pay owed to the
Employee pursuant to Section 3(e), subject to the Company’s Paid Time Off policy and (iv) any amount arising from
the Employee’s participation in, or benefits under, any employee benefit plans, programs or arrangements under Section 3(d),
which amounts shall be payable in accordance with the terms and conditions of such employee benefit plans, programs or arrangements. Except
as otherwise set forth in Section 5(b) below, the payments and benefits described in this Section 5(a) shall
be the only payments and benefits payable in the event of the Employee’s termination of employment for any reason.

 

(b)            Termination
without Cause or for Good Reason. In the event of the Employee’s termination of employment by the Company without Cause pursuant
to Section 4(a)(iv) or by the Employee for Good Reason pursuant to Section 4(a)(v), in addition to the payments
and benefits described in Section 5(a) above, the Company shall, subject to Section 20 and Section 5(c) and
subject to the Employee’s execution and non-revocation of a waiver and release of claims agreement in the Company’s customary
form (a “Release”), as of the Release Expiration Date, in accordance with Section 20(c):

 

(i)            Continue
to pay to the Employee Base Salary during the Severance Period in accordance with the Company’s regular payroll practice as of the
Date of Termination;

 

(ii)            Pay
to the Employee an amount equal to the (A) the amount of the Bonus that would have been payable to the Employee pursuant to Section 3(b) if
the Employee was still employed as of the applicable bonus payment date in respect of the fiscal year in which the Date of Termination
occurs, except that (x) the Employee shall receive only a portion of the Bonus that the Employee otherwise would have been entitled
to pursuant to Section 3(b) that is attributable to achievement of Company performance goals only (and excluding individual
performance goals) in such year and (y) the Bonus shall in no event exceed the portion of the Employee’s target bonus opportunity
set forth in Section 3(b) relating to achievement of the Company’s performance goals only (and excluding individual
performance goals) in such year, multiplied by (B) the ratio of (x) the number of full months elapsed during the fiscal
year during which such termination of employment occurs on or prior to the Date of Termination, to (y) twelve (12). Any amount payable
pursuant to this Section 5(b)(ii) shall, subject to Section 20 and Section 5(c), be paid to Employee
in accordance with Section 3(b) as if the Employee was still employed on the applicable bonus payment date, but in no
event earlier than January 1, or later than December 31, of the calendar year immediately following the calendar year in which
the Date of Termination occurs.

 

    7

     

    

 

In any fiscal year, in the
event the Date of Termination occurs prior to the applicable bonus payment date for the prior fiscal year, the Employee shall be entitled
to receive an Bonus with respect to the prior fiscal year in accordance with the terms set forth in Section 3(b) as if
the Employee was still employed on the applicable bonus payment date, but in no event prior to the applicable bonus payment date for such
prior fiscal year;

 

(iii)            During
the Severance Period, if the Employee elects to continue coverage under the Company’s group health plan in accordance with the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), continue coverage for the Employee and any eligible
dependents under the Company group health benefit plans in which the Employee and any dependents were entitled to participate immediately
prior to the Date of Termination. In the event Employee elects to continue with COBRA coverage, provided that Employee timely submits
to the Company evidence of Employee’s payments made to the COBRA administrator, the Company will reimburse Employee for the Company’s
share of the premiums associated therewith in an amount equal to what the Company pays for the health insurance premiums of other senior
level employees at the Company. The COBRA health continuation period under Section 4980B of the Code shall run concurrently with
the period of continued coverage set forth in this Section 5(b)(iii); provided, however, that in the event Employee
obtains other employment that offers group health benefits, such continuation of COBRA coverage by the Company under this Section 5(b)(iii) shall
immediately cease.

 

(iv)            As
of the Date of Termination, the Company shall, at its expense, provide the Employee with outplacement services from one or more organizations
that are then offered by the Company from time to time for up to six (6) months from the Date of Termination or until employment
is obtained, whichever occurs first.

 

(c)            Breach
of Restrictive Covenants. Notwithstanding any other provision of this Agreement, no payment or benefit shall be made or provided pursuant
to Section 5(b) following the date the Employee first violates any of the restrictive covenants set forth in Section 6
or any other written agreement between the Employee and the Company or any of its Affiliates.

 

(d)            Complete
Severance. The provisions of this Section 5 shall supersede in their entirety any severance payment or benefit obligations
to the Employee pursuant to the provisions in any severance plan, policy, program or other arrangement maintained by the Company.

 

    8

     

    

 

6.            Restrictive
Covenants. In consideration for the potential payments to the Employee hereunder, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Employee agrees to the following:

 

(a)            Confidentiality.
The Employee shall not, at any time during the Term or at any time thereafter, directly or indirectly, use for the benefit of herself
or any third party or disclose to any Person, firm, company or other entity (other than the Company or any of its Affiliates) any Confidential
Information without the prior written consent of the Company, except (i) as required in the performance of her duties to the Company
and its Affiliates, (ii) to the extent that the Employee is required by law, subpoena or court order to disclose any Confidential
Information (provided that in such case, the Employee shall (1) provide the Company with the earliest notice possible that such disclosure
is or may be required, (2) reasonably cooperate with the Company and its Affiliates, at the Company’s expense, in protecting,
to the maximum extent legally permitted, the confidential or proprietary nature of such Confidential Information and (3) disclose
only that Confidential Information which she is legally required to disclose), (iii) disclosing information that has been or is hereafter
made public through no act or omission of the Employee in violation of this Agreement or any other confidentiality obligation or duty
owed to the Company or its Affiliates, (iv) disclosing information and documents to her attorney or tax adviser for the purpose of
securing legal or tax advice (provided that such Persons agree to keep such information confidential) or (v) disclosing only the
post-employment restrictions in this Agreement in confidence to any potential new employer. The Employee shall take all actions necessary
to protect the integrity of the business plans, customer lists, statistical data and compilations, agreements, contracts, manuals or other
materials, in whatever form, of the Company and its Affiliates that contain Confidential Information, and upon the termination of the
Employee’s employment, the Employee agrees that all Confidential Information in her possession or under her control, directly or
indirectly, that is in writing, computer generated or other tangible form (together with all duplicates thereof) will forthwith be returned
to the Company and will not be retained by the Employee or furnished to any Person, either by sample, facsimile, film, audio or video
cassette, electronic data, verbal communication or any other means of communication. The Employee agrees that the provisions of this Section 6
are reasonable and necessary to protect the proprietary rights of the Company and its Affiliates in the Confidential Information and trade
secrets, goodwill and reputation. In addition, the terms and conditions of this Agreement shall remain strictly confidential, and the
Employee shall not disclose the terms and conditions hereof to any Person, other than immediate family members, legal advisors or personal
tax or financial advisors, provided that each such Person agrees to keep such terms and conditions confidential.

 

(b)            Non-Competition.
The Employee shall not, during the Term and for a period of time after the Employee’s Date of Termination equal to twelve (12) months,
directly or indirectly, whether for herself or on behalf of any other Person, engage in, own, manage, operate, advise, provide financing
to, control or participate in the ownership, management or control of, or be connected as an officer, employee, partner, director, or
otherwise with, or have any financial interest (whether as a stockholder, director, officer, partner, consultant, proprietor, agent or
otherwise) in, or aid or assist anyone else in the conduct of, any Business that competes, directly or indirectly, with the Company or
any of its Affiliates in the Business or is otherwise engaged in activities competitive with the Company or any of its Affiliates in the
Business, in any jurisdiction in the United States of America or any other country in the world where the Company or any of its Affiliates
are then engaged in the Business (the “Restricted Area”). Nothing herein shall prohibit Employee’s spouse from
maintaining ownership and/or managerial interests in Korean Chicken restaurants in the Bahamas and Cayman. The Business of any of the
Company’s licensed or franchise partners, whether now or in the future, shall be deemed competitive with the Company or any of its
Affiliates in the Business. The Employee agrees that the restrictions set forth in this Section 6(b) shall apply to any
business (not only the Business) of the Company’s licensed or franchised partners.

 

    9

     

    

 

The Employee agrees that the
Restricted Area is reasonable taking into consideration the nature and scope of the operations of the Company and its Affiliates in the
Business and the Employee’s role in such operations. It shall not be a violation of this Section 6(b) for the Employee
to own less than 1% of the outstanding shares of a corporation that is engaged in the Business whose shares are listed on a national stock
exchange or traded in accordance with the automated quotation system of the National Association of Securities Dealers.

 

(c)            Non-Solicitation.
The Employee shall not, during the Term and for a period time after the Employee’s Date of Termination equal to twelve (12) months,
either directly or indirectly, and whether for herself or on behalf of any other Person; (i) seek to persuade any employee or consultant
of the Company or any of its Affiliates to discontinue or diminish her or her status or employment therewith or seek to persuade any employee,
former employee (who was employed by the Company or any of its Affiliates at any time during the 12-month period prior to the termination
of the Employee’s employment with the Company), or exclusive consultant of the Company or any of its Affiliates to become employed
or to provide consulting or contract services to a business competitive with the Company or its Affiliates in the Business; (ii) solicit,
employ or engage, or cause to be solicited, employed, or engaged, any person who is or was employed by the Company or any of its Affiliates
at any time during the 12-month period prior to the termination of the Employee’s employment with the Company; or (iii) solicit,
encourage, or induce any contractor, agent, client, customer, supplier, or the like of the Company or any of its Affiliates to terminate
or diminish its/her relationship with, the Company or any of its Affiliates, or to refrain from entering into a relationship with the
Company or any of its Affiliates, including, without limitation, any prospective contact, contractor, agent, client, customer, or the
like of the Company or any of its Affiliates; provided, however, that the foregoing shall not prohibit the Employee from
placing any general advertisements for employees so long as such general advertisements are not directed to any employees of the Company
or any of its Affiliates (provided that the Employee may not, during the time periods set forth in this Section 6(c), hire
or engage any such Person who responds to such general advertisement).

 

(d)            Non-Disparagement.
The Employee agrees not to disparage the Company, any of its products or practices, or any of its directors, officers, agents, representatives,
partners, members, equity holders or Affiliates, either orally or in writing, at any time, and the Company agrees to instruct its directors
and officers as of the Date of Termination not to disparage the Employee, either orally or in writing, at any time; provided that
the Employee, the Company and the Company’s directors and officers may confer in confidence with their respective legal representatives
and make truthful statements as required by law.

 

(e)            Return
of Company Property. On the date of the Employee’s termination of employment with the Company for any reason, the Employee shall
return all property belonging to the Company or its Affiliates (including, but not limited to, any Company-provided laptops, computers,
cell phones, wireless electronic mail devices or other equipment, or documents and property belonging to the Company). The Employee may
retain her rolodex and similar books, provided that such items only include contact information.

 

    10

     

    

 

(f)            Remedies.
In addition to whatever other rights and remedies the Company and its Affiliates may have at equity or in law (including, without limitation,
the right to seek monetary damages), if the Employee breaches any of the provisions contained in this Section 6, (i) the
Company shall have the right immediately to terminate the Employee’s right to any amounts payable under this Agreement and (ii) the
Company and its Affiliates shall have the right to injunctive relief, without the requirement to prove actual damages or to post any bond
or other security, and to obtain the costs and reasonable attorneys’ fees they incur in enforcing their rights under this Agreement.
The Employee acknowledges that (A) her breach of this Section 6 would cause irreparable injury to the Company and/or
its Affiliates, (B) money damages alone would not provide an adequate remedy for the Company or its Affiliates, (C) her services
to the Company are special, unique and extraordinary, and (D) the restrictions in this Section 6 (x) are no greater
than required to protect the Company’s legitimate protectable interests (including, without limitation, the Confidential Information
and the Company’s goodwill), (y) do not impose undue hardship on the Employee, and (z) are reasonable in duration and
geographic scope. The Employee further acknowledges that (I) any breach or claimed breach of the provisions set forth in this Agreement
shall not be a defense to enforcement of the restrictions set forth in this Section 6 and (II) the circumstances of the
Employee’s termination of employment with the Company shall have no impact on her obligations under this Section 6.

 

(g)            Blue
Pencil. In the event the terms of this Section 6 shall be determined by any court of competent jurisdiction to be unenforceable
by reason of its extending for too great a period of time or over too great a geographical area or by reason of its being too extensive
in any other respect, it will be interpreted to extend only over the maximum period of time for which it may be enforceable, over the
maximum geographical area as to which it may be enforceable, or to the maximum extent in all other respects as to which it may be enforceable,
all as determined by such court in such action.

 

(h)            Tolling
During Periods Of Breach. The Employee and the Company agree and intend that the Employee’s obligations under this Section 6
be tolled during any period that the Employee is in breach of any of the obligations under this Section 6, so that the Company
and each Affiliate of the Company are provided with the full benefit of the restrictive periods set forth herein.

 

(i)            Third
Party Beneficiary. The Company and each Affiliate of the Company are intended third party beneficiaries of the terms of this Section 6
and shall have the right to enforce the provisions of this Section 6 as if they were a party hereto.

 

(j)            Survival.
The Employee’s obligations under this Section 6 shall survive the termination of this Agreement and the termination
of his employment with the Company.

 

7.            Assignment
and Successors. The Company may assign its rights and obligations under this Agreement to any entity, including
any successor to all or substantially all the assets of the Company, by merger or otherwise, and may assign or encumber this Agreement
and its rights hereunder as security for indebtedness of the Company and its Affiliates. The Employee may not assign the Employee’s
rights or obligations under this Agreement to any individual or entity. This Agreement shall be binding upon and inure to the benefit
of the Company, the Employee and their respective successors, assigns, personnel and legal representatives, executors, administrators,
heirs, distributees, devisees, and legatees, as applicable.

 

    11

     

    

 

8.            Dispute
Resolution.

 

(a)            Employee
and the Company agree that any claim, dispute, or controversy arising between them, including but not limited to all issues and questions
concerning the application, construction, validity, interpretation and enforcement of this Agreement (collectively, “Claims”),
shall be resolved by final and binding arbitration, pursuant to the Federal Arbitration Act, by JAMS in accordance with its Employment
Arbitration Rules & Procedures (or any successor rules and procedures then in effect for employment disputes) (“Rules”).
Both the Company and Employee shall have the right to be represented by counsel of their choosing (at their own expense) and shall be
entitled to adequate discovery prior to the arbitration as determined by the arbitrator, who shall be selected in accordance with the
Rules. Any such arbitration shall take place in New York, New York, unless otherwise mutually agreed upon by Employee and the Company.
To the extent the rules of JAMS differ from the terms of this Agreement, the terms of this Agreement shall govern.

 

(b)            Employee
understands and agrees that the procedures outlined in this Agreement will be the exclusive means of redress for any disputes relating
to or arising from Employee’s employment with the Company (or Employee’s termination), whether such disputes are initiated
by Employee or the Company. The claims covered by this provision include, but are not limited to: (i) claims for wages or other compensation,
including such claims due to breach of any contract or covenant (express or implied); (ii) tort claims, including claims for damages
or personal injury; (iii) claims for benefits (except where an employee benefit or pension plan specifies that its claims procedures
shall culminate in an arbitration procedure different from this one); and (iv) claims for violation of any federal, state, or local
law, statute, regulation, or ordinance, or the common law. The arbitrator shall apply the substantive law of the state in which the Claim
arose or federal law, or both, as applicable to the Claim asserted. The following claims are not covered by this Section 8
arbitration provision: claims for: (i) workers’ compensation; (ii) unemployment compensation benefits; (iii) pre-dispute
claims under the Dodd-Frank Act; and (iv) to the extent that the Federal Arbitration Act, 9 U.S.C. § 1 et seq.,
does not preempt New York State Senate Bill S7507C and/or New York Civil Practice Law and Rules Section 7515, claims for sexual
harassment. A request for arbitration must be submitted within the applicable statute of limitations period under the federal, state,
or local law governing the Claim at issue; otherwise, the Claim shall be void and deemed waived. The Federal Rules of Evidence shall
apply to the arbitration proceeding.

 

(c)            Employee
and the Company understand and acknowledge that, by entering into this Agreement, Employee and the Company are waiving their respective
rights to a trial by jury and to have any Claims adjudicated by a court or jury. Employee and the Company agree that the arbitrator’s
award will be final and binding on both parties and understand that their ability to appeal the arbitrator’s written decision is
strictly limited under the Federal Arbitration Act. Each party will have the right to request that the arbitrator issue a written decision
that memorializes the essential findings of fact and law and the conclusions upon which the arbitrator’s decision and the award,
if any, are based. The arbitrator shall be empowered to award either party any remedy at law or equity to which the party otherwise would
have been entitled had the matter been litigated in court, including, but not limited to, general, special, and punitive damages, injunctive
relief, costs and attorneys’ fees; provided, however, that the authority to award any remedy is subject to whatever limitations,
if any, exist in the applicable law on such remedies. The arbitrator shall have no jurisdiction to issue any award contrary to or inconsistent
with the law, including the statute, regulation, ordinance, or common law at issue.

 

    12

     

    

 

(d)            Employee
understands that nothing in this Agreement shall prohibit Employee from filing a charge with a government agency responsible for the enforcement
of statutory rights, including but not limited to the National Labor Relations Board, the U.S. Equal Employment Opportunity Commission,
the United States Department of Labor, and similar state and local agencies. However, notwithstanding the foregoing, Employee may not
file a private lawsuit in any court regarding those statutory rights. Moreover, Employee may not participate as a class and/or collective
member in any class and/or collective action filed in any court.

 

(e)            Employee
and the Company expressly intend and agree that: (i) class action, collective action, and representative action procedures shall
not be asserted, nor will they apply, in any arbitration pursuant to this Agreement; (ii) neither Employee nor the Company will assert,
participate in, or join class action, collective action, or representative action claims against the other party in arbitration or otherwise;
and (iii) Employee and the Company shall only submit their own, individual claims in arbitration and will not seek to represent the
interests of any other person.

 

9.            Validity.
The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and effect.

 

10.            Notices.
Any notice, request, claim, demand, document and other communication hereunder to any party hereto shall be effective upon receipt (or
refusal of receipt) and shall be in writing and delivered personally or sent by telex, telecopy, or certified or registered mail, postage
prepaid, to the following address (or at any other address as any party hereto shall have specified by notice in writing to the other
party hereto):

 

(a)            If
to the Company:

 

Shake Shack Enterprises, LLC

225 Varick Street, Suite 301

New York, NY 10014

Attn: Ronald Palmese, Jr., Senior Vice President and
General Counsel

Email:
rpalmese@shakeshack.com

Phone: 646-747-7241

 

(b)            If
to the Employee, at the address set forth on the signature page hereto.

 

11.            Counterparts.
This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, but all of which together will
constitute one and the same Agreement.

 

    13

     

    

 

12.            Entire
Agreement. The terms of this Agreement (together with any other agreements and instruments contemplated hereby or
referred to herein) is intended by the parties hereto to be the final expression of their agreement with respect to the employment of
the Employee by the Company and may not be contradicted by evidence of any prior or contemporaneous agreement (including, without limitation,
any term sheet or offer letter). The parties hereto further intend that this Agreement shall constitute the complete and exclusive statement
of its terms and that no extrinsic evidence whatsoever may be introduced in any judicial, administrative, or other legal proceeding to
vary the terms of this Agreement.

 

13.            Amendments;
Waivers. This Agreement may not be modified, amended, or terminated except by an instrument in writing, signed by
the Employee and a duly authorized officer of the Partnership, which expressly identifies the amended provision of this Agreement. The
Employee or a duly authorized officer of the Partnership may waive compliance by the other party or parties hereto with any provision
of this Agreement that such other party was or is obligated to comply with or perform; provided, however, that such waiver
shall not operate as a waiver of, or estoppel with respect to, any other or subsequent failure to comply or perform. No failure to exercise
and no delay in exercising any right, remedy, or power hereunder shall preclude any other or further exercise of any other right, remedy,
or power provided herein or by law or in equity.

 

14.            No
Inconsistent Actions. The parties hereto shall not voluntarily undertake or fail to undertake any action or course
of action inconsistent with the provisions or essential intent of this Agreement. Furthermore, it is the intent of the parties hereto
to act in a fair and reasonable manner with respect to the interpretation and application of the provisions of this Agreement.

 

15.            Construction.
This Agreement shall be deemed drafted equally by both of the parties hereto. Its language shall be construed as a whole and according
to its fair meaning. Any presumption or principle that the language is to be construed against any party hereto shall not apply. The headings
in this Agreement are only for convenience and are not intended to affect construction or interpretation. Any references to paragraphs,
subparagraphs, sections or subsections are to those parts of this Agreement, unless the context clearly indicates to the contrary. Also,
unless the context clearly indicates to the contrary, (a) the plural includes the singular and the singular includes the plural;
(b) “and” and “or” are each used both conjunctively and disjunctively; (c) “any,” “all,”
 “each,” or “every” means “any and all,” and “each and every”; (d) ”includes”
and “including” are each “without limitation”; (e) “herein,” “hereof,” “hereunder”
and other similar compounds of the word “here” refer to the entire Agreement and not to any particular paragraph, subparagraph,
section or subsection; and (f) all pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter,
singular or plural as the identity of the Persons referred to may require.

 

16.            Enforcement.
If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws effective during the term
of this Agreement, such provision shall be fully severable; this Agreement shall be construed and enforced as if such illegal, invalid
or unenforceable provision had never comprised a portion of this Agreement; and the remaining provisions of this Agreement shall remain
in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance from this Agreement.
Furthermore, in lieu of such illegal, invalid or unenforceable provision there shall be added automatically as part of this Agreement
a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and be legal, valid and enforceable.

 

    14

     

    

 

17.            Withholding.
The Company and its Affiliates shall be entitled to withhold from any amounts payable under this Agreement, any federal, state, local
or foreign withholding or other taxes or charges which the Company or any of its Affiliates is required to withhold. The Company and its
Affiliates shall be entitled to rely on an opinion of counsel if any questions as to the amount or requirement of withholding shall arise.

 

18.            Absence
of Conflicts; Employee Acknowledgement; Confidentiality. The Employee hereby represents that from and after the
Effective Date the performance of the Employee’s duties hereunder will not breach any other agreement to which the Employee is a
party. The Employee acknowledges that the Employee has read and understands this Agreement, is fully aware of its legal effect, has not
acted in reliance upon any representations or promises made by the Company or any of its Affiliates other than those contained in writing
herein, and has entered into this Agreement freely based on the Employee’s own judgment. The Employee agrees not to disclose the
terms or existence of this Agreement to any Person unless the Company agrees to such disclosure in advance and in writing; provided
that the Employee may, without such permission, make such disclosures as are required by applicable law, including disclosures to taxing
agencies, and disclose the terms of this Agreement to the Employee’s attorney(s), accountant(s), tax advisor(s), and other professional
service provider(s), and to members of the Employee’s immediate family, as reasonably necessary; provided, further,
that the Employee instructs such Person(s) that the terms of this Agreement are strictly confidential and are not to be revealed
to anyone else except as required by applicable law.

 

19.            Survival.
The expiration or termination of the Term shall not impair the rights or obligations of any party hereto which shall have accrued prior
to such expiration or termination (including, without limitation, pursuant to the provisions of Section 6 hereof).

 

20.            Section 409A.

 

(a)            General.
The parties hereto acknowledge and agree that, to the extent applicable, this Agreement shall be interpreted in accordance with, and incorporate
the terms and conditions required by, Section 409A. Notwithstanding any provision of this Agreement to the contrary, in the event
that the Company determines that any amounts payable hereunder will be immediately taxable to the Employee under Section 409A, the
Company reserves the right (without any obligation to do so or to indemnify the Employee for failure to do so) to (i) adopt such
amendments to this Agreement and appropriate policies and procedures, including amendments and policies with retroactive effect, that
the Company determines to be necessary or appropriate to preserve the intended tax treatment of the benefits provided by this Agreement,
to preserve the economic benefits of this Agreement and to avoid less favorable accounting or tax consequences for the Company and/or
(ii) take such other actions as the Company determines to be necessary or appropriate to exempt the amounts payable hereunder from
Section 409A or to comply with the requirements of Section 409A and thereby avoid the application of penalty taxes thereunder.
Notwithstanding anything herein to the contrary, in no event shall any liability for failure to comply with the requirements of Section 409A
be transferred from the Employee or any other individual to the Company or any of its Affiliates, employees or agents pursuant to the
terms of this Agreement or otherwise.

 

    15

     

    

 

(b)            Separation
from Service under Section 409A. Notwithstanding any provision to the contrary in this Agreement: (i) no amount shall be
payable pursuant to Section 5(b) unless the termination of the Employee’s employment constitutes a “separation
from service” within the meaning of Section 1.409A-1(h) of the Department of Treasury Regulations; (ii) for purposes
of Section 409A, the Employee’s right to receive installment payments pursuant to Section 5(b) shall be treated
as a right to receive a series of separate and distinct payments; and (iii) to the extent that any reimbursement of expenses or in-kind
benefits constitutes “deferred compensation” under Section 409A, such reimbursement or benefit shall be provided no later
than December 31 of the year following the year in which the expense was incurred. The amount of expenses reimbursed in one year
shall not affect the amount eligible for reimbursement in any subsequent year. The amount of any in-kind benefits provided in one year
shall not affect the amount of in-kind benefits provided in any other year. Notwithstanding any provision to the contrary in this Agreement,
if the Employee is deemed at the time of his separation from service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of
the Code, to the extent delayed commencement of any portion of the termination benefits to which the Employee is entitled under this Agreement
is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such portion of the Employee’s
termination benefits shall not be provided to the Employee prior to the earlier of (A) the expiration of the six-month period measured
from the date of the Employee’s “separation from service” with the Company (as such term is defined in the Treasury
Regulations issued under Section 409A of the Code) or (B) the date of the Employee’s death; upon the earlier of such dates,
all payments deferred pursuant to this sentence shall be paid in a lump sum to the Employee, and any remaining payments due under the
Agreement shall be paid as otherwise provided herein.

 

(c)            Release.
Notwithstanding anything to the contrary in this Agreement, to the extent that any payments of “nonqualified deferred compensation”
(within the meaning of Section 409A) due under this Agreement as a result of the Employee’s termination of employment are subject
to the Employee’s execution, delivery and non-revocation of a Release, (i) the Company shall deliver the Release to the Employee
within 7 days following the Date of Termination, and (ii) if the Employee fails to execute the Release on or prior to the Release
Expiration Date (as defined below) or timely revokes his acceptance of the Release thereafter, the Employee shall not be entitled to any
payments or benefits otherwise conditioned on the Release. For purposes of this Section 20(c), “Release Expiration
Date” shall mean the date that is 21 days following the date upon which the Company timely delivers the Release to the Employee,
or, in the event that the Employee’s termination of employment is “in connection with an exit incentive or other employment
termination program” (as such phrase is defined in the Age Discrimination in Employment Act of 1967), the date that is 45 days following
such delivery date. To the extent that any payments of nonqualified deferred compensation (within the meaning of Section 409A) due
under this Agreement as a result of the Employee’s termination of employment are delayed pursuant to Section 5(b) and
this Section 20(c), such amounts shall be paid in a lump sum on the first payroll date to occur on or after the 60th day following
the Date of Termination, provided that, as of such 60th day, the Employee has executed and has not revoked the Release (and any applicable
revocation period has expired).

 

    16

     

    

 

21.            Compensation
Recovery Policy. The Employee acknowledges and agrees that, to the extent the Company adopts any clawback or similar policy
pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act or otherwise, and any rules and regulations promulgated
thereunder, she shall take all action necessary or appropriate to comply with such policy (including, without limitation, entering into
any further agreements, amendments or policies necessary or appropriate to implement and/or enforce such policy).

 

[Signature pages follow]

 

    17

     

    

 

IN WITNESS WHEREOF, the parties
hereto have executed this Employment Agreement on the date and year first above written, effective as of the Effective Date.

 

 

	 	SHAKE SHACK
	 	 
	 	 
	 	SHAKE SHACK INC.
	 	 
	 	By: 	/s/
    Ronald Palmese Jr.                     
	 	Name: Ronald Palmese Jr.
	 	Title: Senior Vice President &
    General Counsel
	 	 
	 	 
	 	SSE HOLDINGS, LLC
	 	 
	 	By:	 /s/ Ronald Palmese Jr.
	 	Name: Ronald Palmese Jr.
	 	Title: Senior Vice President &
    General Counsel
	 	 
	 	 
	 	SHAKE SHACK ENTERPRISES, LLC
	 	 
	 	By: 	 /s/ Ronald Palmese Jr.
	 	Name: Ronald Palmese Jr.
	 	Title: Senior Vice President, General
    Counsel
	 	 
	 	 
	 	EMPLOYEE
	 	 
	 	By:	 /s/ Katherine Fogertey
	 	
	 	Katherine Fogertey
	 	 
	 	Residence Address:
	 	250 South End Ave
	 	Apt 16BD
	 	NY, NY 10280

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