Document:

Exhibit 10.9 

Winston-Salem HI&S 

MANAGEMENT AGREEMENT

by and between

MHH MANAGEMENT, LLC 

as “MANAGER”

and

APPLE TEN HOSPITALITY MANAGEMENT, INC.

as “OWNER”

Dated as of March 15, 2011

i

Table of Contents

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 Page

 
	
  

 	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE I

 	
                APPOINTMENT
 OF MANAGER

 	
  

 	
 1

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 1.01.

 	
  

 	
 Appointment

 	
  

 	
 1

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 1.02.

 	
  

 	
 Management
 of the Hotel

 	
  

 	
 1

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 1.03.

 	
  

 	
 Employees

 	
  

 	
 4

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 1.04.

 	
  

 	
 Owner’s
 Right to Inspect

 	
  

 	
 4

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 1.05.

 	
  

 	
 Regular
 Meetings

 	
  

 	
 4

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 1.06.

 	
  

 	
 System
 Standards

 	
  

 	
 4

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 1.07.

 	
  

 	
 Limitations
 on Manager’s Authority

 	
  

 	
 5

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 1.08.

 	
  

 	
 Representations
 and Warranties of Manager

 	
  

 	
 5

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE II

 	
                TERM

 	
  

 	
 5

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 2.01.

 	
  

 	
 Term

 	
  

 	
 5

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 2.02.

 	
  

 	
 Performance
 Termination

 	
  

 	
 6

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE III

 	
                COMPENSATION
 OF MANAGER

 	
  

 	
 6

 
	
  

 	
  

 	
  

 	
  

 
	
 3.01.

 	
  

 	
 Management
 Fees

 	
  

 	
 6

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 3.02.

 	
  

 	
 Operating
 Profit

 	
  

 	
 7

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE IV

 	
                ACCOUNTING,
 BOOKKEEPING AND BANK ACCOUNTS

 	
  

 	
 7

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4.01.

 	
  

 	
 Accounting,
 Distributions and Annual Reconciliation

 	
  

 	
 7

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4.02.

 	
  

 	
 Books and
 Records

 	
  

 	
 8

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4.03.

 	
  

 	
 Accounts,
 Expenditures

 	
  

 	
 9

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4.04.

 	
  

 	
 Annual
 Operating Projection

 	
  

 	
 10

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4.05.

 	
  

 	
 Working
 Capital

 	
  

 	
 10

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4.06.

 	
  

 	
 Fixed Asset
 Supplies

 	
  

 	
 11

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4.07.

 	
  

 	
 Real Estate
 and Personal Property Taxes

 	
  

 	
 11

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4.08.

 	
  

 	
 Sarbanes-Oxley
 Certification

 	
  

 	
 12

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE V

 	
                REPAIRS,
 MAINTENANCE AND REPLACEMENTS

 	
  

 	
 13

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 5.01.

 	
  

 	
 Repairs and
 Maintenance to be Paid from Gross Revenues

 	
  

 	
 13

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 5.02.

 	
  

 	
 Repairs,
 Maintenance and Equipment Replacements to be Paid from Reserve

 	
  

 	
 13

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE VI

 	
                INSURANCE

 	
  

 	
 14

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 6.01.

 	
  

 	
 Property
 Insurance

 	
  

 	
 14

 

i

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 6.02.

 	
  

 	
 Operational
 Insurance

 	
  

 	
 15

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 6.03.

 	
  

 	
 Coverage

 	
  

 	
 16

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 6.04.

 	
  

 	
 Costs and
 Expenses

 	
  

 	
 16

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 6.05.

 	
  

 	
 Owner’s
 Right to Provide Insurance

 	
  

 	
 16

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE VII

 	
                DAMAGE
 AND REPAIR

 	
  

 	
 16

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 7.01.

 	
  

 	
 Damage and
 Repair

 	
  

 	
 16

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 7.02.

 	
  

 	
 Condemnation

 	
  

 	
 17

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 7.03.

 	
  

 	
 Subordination
 to Mortgage

 	
  

 	
 17

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 7.04.

 	
  

 	
 No
 Covenants, Conditions or Restrictions

 	
  

 	
 18

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 7.05.

 	
  

 	
 Liens;
 Credit

 	
  

 	
 18

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE VIII

 	
                DEFAULTS

 	
  

 	
 18

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 8.01.

 	
  

 	
 Events of
 Default

 	
  

 	
 18

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 8.02.

 	
  

 	
 Remedies

 	
  

 	
 20

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 8.03.

 	
  

 	
 Additional
 Remedies

 	
  

 	
 20

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE IX

 	
                ASSIGNMENT
 AND SALE

 	
  

 	
 20

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 9.01.

 	
  

 	
 Assignment

 	
  

 	
 20

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 9.02.

 	
  

 	
 Sale of the
 Hotel

 	
  

 	
 21

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE X

 	
                MISCELLANEOUS

 	
  

 	
 21

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 10.01.

 	
  

 	
 Right to
 Make Agreement

 	
  

 	
 21

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 10.02.

 	
  

 	
 Consents and
 Cooperation

 	
  

 	
 21

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 10.03.

 	
  

 	
 Relationship

 	
  

 	
 22

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 10.04.

 	
  

 	
 Applicable
 Law; Jurisdiction

 	
  

 	
 22

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 10.05.

 	
  

 	
 Recordation

 	
  

 	
 23

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 10.06.

 	
  

 	
 Headings

 	
  

 	
 23

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 10.07.

 	
  

 	
 Notices

 	
  

 	
 23

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 10.08.

 	
  

 	
 Environmental
 Matters

 	
  

 	
 23

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 10.09.

 	
  

 	
 Confidentiality;
 Projections

 	
  

 	
 24

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 10.10.

 	
  

 	
 Indemnification

 	
  

 	
 25

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 10.11.

 	
  

 	
 Actions to
 be Taken Upon Termination

 	
  

 	
 26

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 10.12.

 	
  

 	
 Waiver

 	
  

 	
 27

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 10.13.

 	
  

 	
 Partial
 Invalidity

 	
  

 	
 28

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 10.14.

 	
  

 	
 Survival

 	
  

 	
 28

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 10.15.

 	
  

 	
 Negotiation
 of Agreement

 	
  

 	
 28

 

ii

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 10.16.

 	
  

 	
 Estoppel
 Certificates

 	
  

 	
 28

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 10.17.

 	
  

 	
 Affiliates

 	
  

 	
 28

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 10.18.

 	
  

 	
 Blocked
 Persons or Entities.

 	
  

 	
 29

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 10.19.

 	
  

 	
 Restrictions
 on Operating the Hotel in Accordance with System Standards

 	
  

 	
 29

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 10.20.

 	
  

 	
 Counterparts

 	
  

 	
 29

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 10.21.

 	
  

 	
 Entire
 Agreement

 	
  

 	
 30

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 10.22.

 	
  

 	
 Franchise
 Agreement

 	
  

 	
 30

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 10.23.

 	
  

 	
 Operation of
 Other Hotels

 	
  

 	
 30

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 10.24.

 	
  

 	
 Waiver of
 Jury Trial and Punitive Damages

 	
  

 	
 31

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE XI

 	
                DEFINITION
 OF TERMS

 	
  

 	
 31

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 11.01.

 	
  

 	
 Definition
 of Terms

 	
  

 	
 31

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE XII

 	
                SUPPLEMENTAL
 PROVISIONS

 	
  

 	
 40

 

	
  

 	
  

 	
  

 
	
 Schedule 1

 	
 -

 	
 Hotel
 Specific Data 

 
	
 Schedule 2

 	
 -

 	
 Supplemental
 Provisions 

 
	
 Exhibit A

 	
 -

 	
 Legal
 Description of Site 

 
	
 Exhibit B

 	
 -

 	
 FF&E
 Leases, Service Contracts and Leases

 

iii

MANAGEMENT AGREEMENT

THIS MANAGEMENT AGREEMENT (“Agreement”)
is executed as of the 15th day of March, 2011 (“Effective Date”), by APPLE TEN HOSPITALITY OWNERSHIP, INC., a
Virginia corporation (“Owner”),
with a mailing address at c/o Apple REIT Companies, 814 E. Main Street,
Richmond, Virginia 23219, Attention: Krissy Gathright, and MHH MANAGEMENT, LLC, a Georgia limited
liability company (“Manager”),
with a mailing address at c/o McKibbon Hotel Group, Inc., 402 Washington St.,
SE, Suite 200, Gainesville, Georgia 30501, Attention: David Hughs. 

          A. The
party identified as the “Landlord” in Schedule 1 attached hereto (“Landlord”) is the
owner of the hotel identified in Schedule 1, as more particularly
described in the definition of “Hotel”
in Section 11.01 hereof. 

          B. Landlord
and Owner have entered into that certain Hotel Lease Agreement dated as of the
Effective Date (the “Hotel Lease”)
pursuant to which Landlord leases the Hotel to Owner. 

          C. All
capitalized terms used in this Agreement shall have the meaning set forth in
Section 11.01 hereof. 

          D. Owner
desires to engage Manager to manage and operate the Hotel, and Manager desires to
accept such engagement, upon the terms and conditions set forth in this
Agreement. 

          NOW,
THEREFORE, in consideration of the mutual covenants contained in this Agreement
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, Owner and Manager agree as follows: 

ARTICLE I

APPOINTMENT OF MANAGER

          1.01. Appointment.

          Owner
hereby appoints and employs Manager as Owner’s exclusive independent contractor
to supervise, direct and control the management and operation of the Hotel
throughout the Term. Manager accepts
said appointment and agrees to manage the Hotel during the Term in accordance
with the terms and conditions of this Agreement. 

          1.02. Management
of the Hotel. 

          A. Manager
shall manage the Hotel, including, without limitation, performance of the
following functions, in accordance with Prudent Industry Practices, the
provisions of this Agreement and all standards imposed by the Franchise
Agreement (provided that in all cases, except as otherwise specifically set
forth in this Agreement, the costs and expenses of performing such functions
shall be Deductions): 

                    1.
Recruit, employ, relocate, manage, supervise, direct and discharge all employees
at the Hotel and maintain adequate staff, consistent with Prudent Industry
Practices, to carry out its duties under this Agreement. 

                    2.
Establish prices, rates and charges for services provided in the Hotel,
including Guest Room rates, subject to Owner’s prior approval, which approval
shall be part of the Annual Operating Projections process. 

                    3.
Establish and revise, as necessary, administrative policies and procedures,
including employment policies and procedures and policies and procedures for
the control of revenue and expenditures, for the purchasing of supplies and
services, for the control of credit and for the scheduling of maintenance, and
verify that the foregoing procedures are operating in a sound manner. 

                    4.
Make payments on accounts payable and collect accounts receivable. 

                    5.
Procure (for Owner) all Inventories and replace Fixed Asset Supplies and
otherwise incur customary and reasonable expenses in the operation of the
Hotel, subject to the approved Annual Operating Projection. 

                    6.
Prepare and deliver Annual Operating Projections, Accounting Period Statements,
Annual Operating Statements, Building Estimates, Repairs and Equipment
Estimates and such other information as is required by this Agreement. 

                    7.
Plan, execute and supervise repairs and maintenance at the Hotel. 

                    8.
Obtain the insurance required to be obtained by Manager pursuant to Article VI
of this Agreement and provide or cause to be provided all risk management
services related thereto, subject to the provisions of Section 6.05. 

                    9.
Obtain and keep in full force and effect, either in its own name or in Owner’s
or Owner’s affiliate’s name, as may be required by applicable law, any and all
licenses (including, without limitation, liquor licenses which shall be
maintained in the name of Manager to the extent permitted by law) and permits
to the extent same is within the control of Manager (or, if same is not within
the control of Manager, Manager shall use all due diligence and commercially
reasonable efforts to obtain and keep same in full force and effect). 

                    10.
Subject to Section 7.03 of this Agreement, execute commercially reasonable
subordination agreements, estoppel certificates and other documentation
required by any purchaser or mortgagee and reasonably cooperate (provided that
Manager shall not be obligated to enter into any amendments of this Agreement)
with Owner or Landlord in any attempt(s) by Owner or Landlord to effectuate a
Sale of the Hotel or to obtain a Mortgage. 

                    11.
At the direction and with the concurrence of Owner, arrange for and supervise
public relations and advertising and prepare marketing plans. 

                    12.
Negotiate and enter into, on behalf of Owner, service contracts and other third
party agreements required in the ordinary course of operating the Hotel,
provided that 

2

Owner’s prior written approval shall be required for any contract
having a non-terminable term in excess of one year, or if the amount of the
aggregate expenditures thereunder would, or are reasonably anticipated to,
exceed $20,000 in the aggregate per annum. 

                    13.
Manage and operate the Hotel at all times in compliance with the Franchise
Agreement, including (without limitation) the Manual and the System standards
(as such terms are defined therein). 

          B. The
operation of the Hotel shall be under the exclusive supervision and control of
Manager, except as otherwise specifically provided in this Agreement, and
Manager shall be responsible for the proper and efficient operation of the
Hotel. In fulfilling its obligations
under this Agreement, Manager will act as a reasonable, prudent operator of the
Hotel, having regard for the status of the Hotel, operating the Hotel in
accordance with Prudent Industry Practices and at all times maintaining and
complying with all standards imposed by the Franchise Agreement, and subject to
the foregoing and all other terms and conditions of this Agreement, shall have
discretion in the following: charges,
terms and conditions for Guest Rooms and commercial space; credit policies and
services provided by the Hotel; food and beverage services; employment
policies; granting of leases, subleases, licenses and concessions for shops and
businesses within the Hotel, provided that the term of any such lease,
sublease, license or concession shall not exceed the lesser of one (1) year or
the Term without the prior written approval of Owner; receipt, holding and
disbursement of funds; maintenance of bank accounts; procurement of
Inventories, supplies and services; promotion and publicity; payment of costs
and expenses as are specifically provided for in this Agreement or are
otherwise reasonably necessary for the proper and efficient operation of the
Hotel; and, generally, all activities necessary for operation of the
Hotel. With respect to all Material
Management Decisions, Manager shall consult with Owner in advance of making any
such decisions. The term “Material Management Decisions”
means a decision to be made in connection with any expenditure of more than
$10,000 for each item or $50,000 in the aggregate for all such items in any
Fiscal Year if such expenditure is not included in the approved Annual
Operating Projection for such Fiscal Year or if such expenditure would result
in an increase in the overall Annual Operating Projection. For purposes hereof, Material Management Decisions
shall also be deemed not to include (i) emergency capital repairs as referenced
in Section 5.02 of this Agreement and (ii) expenditures for utilities, real
estate taxes and assessments, and insurance premiums for insurance policies. With respect to the foregoing exceptions to
Material Management Decisions, Manager may at Owner’s expense make such
expenditures without seeking prior approval from Owner. 

          C. Manager
shall comply with and abide by all applicable Legal Requirements pertaining to
its operation of the Hotel. Landlord or
Owner shall have the right, but not the obligation, in its reasonable
discretion, to contest or oppose, by appropriate proceedings, any such Legal
Requirements. The reasonable expenses
of any such contest of a Legal Requirement shall be paid from Gross Revenues as
Deductions. Owner or Landlord, as
applicable, shall indemnify and hold Manager harmless from any loss, claim,
fees or expenses (including reasonable attorneys’ fees) arising from the
noncompliance with any Legal Requirement that Owner or Landlord chooses to
contest or as to which Owner does not fund the cost of compliance. 

3

          1.03. Employees

          All
personnel employed at the Hotel shall at all times be the employees of Manager
and not the employees of Owner. Manager
shall have reasonable discretion with respect to all personnel employed at the
Hotel, including, without limitation, decisions regarding hiring, promoting,
transferring, compensating, supervising, terminating, directing and training
all employees at the Hotel, and, generally, establishing and maintaining all
policies relating to employment; provided, however, that (i) Owner shall have
the right to participate in the process for the hiring or termination of the
persons who occupy the position of General Manager for the Hotel, including the
interview process, provided that the final selection of the General Manager
shall rest solely with Manager and (ii) Manager shall not negotiate or enter
into any collective bargaining or other labor agreement with employees or with
any organization representing or claiming to represent employees without
Owner’s prior consent. No person shall
be given gratuitous accommodations or services without prior joint approval of
Owner and Manager except in accordance with policies agreed upon by Owner and
Manager. Owner shall not pay for the
relocation costs of any employees except for the cost of relocating the General
Manager; provided, however, that (i) the relocation costs for the General
Manager shall be subject to Owner’s prior approval, which approval shall not be
unreasonably withheld or delayed, and (ii) Manager shall reimburse Owner for
the costs (including relocation costs) of hiring and training General Managers
who are employed at the Hotel for less than one (1) year and are transferred or
relocated to a hotel (other than a hotel owned by Owner or an Affiliate of
Owner) owned or managed by Manager or an Affiliate of Manager. Manager shall be solely responsible and
liable for all acts or omissions of the personnel employed at the Hotel and all
persons managing such employees. 

          1.04. Owner’s
Right to Inspect. 

          Owner, its representatives, employees, agents, Affiliates and
Mortgagees shall have access to the Hotel at any and all reasonable times for
the purpose of inspection, exercising any of its rights under this Agreement or
showing the Hotel to prospective purchasers, tenants or Mortgagees and at any
time in case of an emergency. 

          1.05. Regular
Meetings. 

          At Owner’s
request, Owner and Manager shall have meetings at the Hotel and at mutually
convenient times. Manager shall be represented at such meetings by the General
Manager of the Hotel and such other personnel as the General Manager and/or
Owner may deem appropriate. The purpose
of the meetings shall be, inter alia, to discuss the performance of the Hotel
and other related issues, including any variations from the Annual Operating
Projection for the preceding quarter.  

          1.06. System
Standards 

          Subject to
the availability of adequate funds, Manager shall take such actions consistent
with this Agreement as are necessary for the Hotel to comply with the System
Standards, and Manager shall operate the Hotel so that the Hotel will at all
times comply with System Standards. 

4

          1.07. Limitations
on Manager’s Authority 

          Manager
shall not, without Owner’s prior written approval, enter into any FF&E
Lease if (i) the fair market value of the FF&E subject to such FF&E
Lease at the time of entering into such FF&E Lease exceeds Ten Thousand
Dollars ($10,000); (ii) the fair market value of the FF&E subject to all
FF&E Leases at the time of entering into such FF&E Lease exceeds
Twenty-five Thousand Dollars ($25,000) in the aggregate; (iii) the FF&E
subject to such FF&E Lease is FF&E that is not, consistent with Prudent
Industry Practices, customarily leased; (iv) such FF&E Lease is with an
Affiliate of Manager or is on payment terms (including the amounts and schedule
of payments) that would be materially more favorable to the lessor thereof than
payment terms customary under Prudent Industry Practices for leases of similar
FF&E; or (v) such FF&E Lease is not terminable by Owner upon thirty
(30) days’ notice. 

          1.08. Representations
and Warranties of Manager. Manager hereby represents and warrants to Owner
as follows: 

          A. Authority;
No Conflicts. Manager is a limited liability company duly formed, validly
existing and in good standing in the state identified in Schedule 1. Manager has obtained all necessary consents
to enter into and perform this Agreement and is fully authorized to enter into
and perform its obligations under this Agreement. No consent or approval of any person, entity or governmental
authority is required for the execution, delivery or performance by Manager of
this Agreement, and this Agreement is hereby binding and enforceable against
Manager. Neither the execution nor the
performance of, or compliance with, this Agreement by Manager has resulted, or
will result, in any violation of, or default under, or acceleration of, any
obligation under any existing corporate charter, certificate of incorporation,
bylaw, articles of organization, limited liability company agreement or
regulations, partnership agreement or other organizational documents of Manager
and under any, mortgage indenture, lien agreement, promissory note, contract,
or permit, or any judgment, decree, order, restrictive covenant, statute, rule
or regulation, applicable to Manager. 

          B. Bankruptcy.
Neither Manager nor any of its Affiliates, is insolvent or the subject of any
bankruptcy proceeding, receivership proceeding or other insolvency,
dissolution, reorganization or similar proceeding. 

ARTICLE II

TERM

          2.01. Term.

          The “Term” of this Agreement shall begin
on the Effective Date and shall continue until the expiration date identified
in Schedule 1. Notwithstanding the foregoing, Manager or Owner shall
have the option to terminate this Agreement at any time, with or without cause,
by giving the other party not less than ninety (90) days prior written notice
of its election to terminate.
Notwithstanding anything to the contrary in this Agreement, for a period
of twelve (12) months 

5

following the Effective Date, Owner shall have no right to terminate
this Agreement pursuant to (i) Section 2.01 of this Agreement or (ii) Section
2.02 of this Agreement.

          2.02. Performance
Termination. 

          A. Owner
shall have the option to terminate this Agreement after any twelve (12)
consecutive Accounting Periods (the “Performance Termination Period”)
with respect to which the following occurs: 

                    1.
The SALT (or any successor program in the event SALT is no longer used) results
fail to meet or exceed the average scores for the brand under which the Hotel
operates; or 

                    2.
The Revenue Index of the Hotel during the Performance Termination Period is
less than the Revenue Index Threshold for such Performance Termination Period. 

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

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

ARTICLE III

COMPENSATION OF MANAGER

          3.01. Management
Fees.

          In consideration of services to be performed during the Term, Manager
shall be paid the sum of the following as its management fees: 

          A. the Base
Management Fee, which shall be retained by Manager from Gross Revenues except
as otherwise provided in this Agreement; plus 

6

          B. the Incentive
Management Fee but only to the extent of available Operating Profit after
payment of Owner’s Priority (including, without limitation, all accrued and
unpaid Owner’s Priority) as provided in Section 3.02 below. 

          3.02. Operating
Profit. 

          A.
Operating Profit, to the extent available, shall be distributed to Owner and to
Manager in the following order of priority, except as otherwise provided in
this Agreement: 

                    1.
An amount up to the maximum amount of Owner’s Priority shall be paid to Owner; 

                    2. The
Incentive Management Fee shall be paid to Manager; and 

                    3. Any
remaining balance of Operating Profit shall be paid to Owner. 

          Owner’s
Priority shall be cumulative from one Fiscal Year to the next, and to the
extent the maximum amount of Owner’s Priority is unpaid in any Fiscal Year,
such unpaid amount shall accrue and be payable in any subsequent Fiscal
Year. Notwithstanding anything in this
Agreement to the contrary, Manager acknowledges and agrees that Incentive
Management Fees are only payable (i) annually within thirty (30) days after
Owner’s receipt and acceptance of the Annual Operating Statement, (ii) to the
extent of available Operating Profit after payment in full of Owner’s Priority
and any accumulated Owner’s Priority and (iii) in no event shall Incentive
Management Fees accrue or be deemed to accrue.

          B. To the
extent of available Operating Profit with respect to each Accounting Period,
Manager shall distribute a prorated portion of the Owner’s Priority (including
any accrued and unpaid Owner’s Priority) to Owner for each such Accounting
Period in accordance with Section 4.01.
Any Incentive Management Fee payable to Manager will be payable within
thirty (30) days after Owner’s receipt and acceptance, which shall not be
unreasonably withheld, of the Annual Operating Statement. 

ARTICLE IV

ACCOUNTING, BOOKKEEPING AND BANK ACCOUNTS

          4.01. Accounting,
Distributions and Annual Reconciliation. 

          A. Within
fifteen (15) days after the close of each Accounting Period, Manager shall
deliver an interim accounting (the “Accounting
Period Statement”) to Owner, prepared in accordance with the
Uniform System of Accounts, showing Gross Revenues, Deductions, Operating
Profit and applications and distributions thereof for the preceding Accounting
Period and any other information reasonably requested by Owner. Manager shall transfer to Owner, with each
Accounting Period Statement, any interim amounts due Owner, subject to Working
Capital needs mutually agreed upon by Owner and Manager, and shall retain any
interim amounts payable to Manager pursuant to the terms of this Agreement.

7

          B.
Calculations and payments of the Incentive Management Fee and the Base
Management Fee made with respect to each Accounting Period shall be accounted
for cumulatively within a Fiscal Year, but shall not be cumulative from one
Fiscal Year to the next. Within each
SEC Filing Period, Manager shall deliver to Owner (1) a statement (the “Annual Operating Statement”) in
reasonable detail summarizing the operations of the Hotel for the immediately
preceding Fiscal Year and a certificate of Manager’s chief accounting officer
certifying that, to the best of his or her knowledge, such Annual Operating
Statement is true and correct and (2) a statement (the “Quarterly Operating Statement”) in
reasonable detail summarizing the operations of the Hotel for the immediately
preceding calendar quarter and a certificate of Manager’s chief accounting
officer certifying that, to the best of his or her knowledge, such Quartlery
Operating Statement is true and correct.
The parties shall, within five (5) Business Days after Owner’s receipt
of such Annual Operating Statement, make any adjustments, by cash payment, in
the amounts paid or retained for such Fiscal Year as are needed because of the
final figures set forth in such Annual Operating Statement. Such Annual Operating Statement shall be
controlling over the preceding Accounting Period Statements. 

          C. To the
extent there is an Operating Loss for any Accounting Period, unless such loss
was due to a force majeure event,
no Base Management Fee or Incentive Management Fee shall be paid to or retained
from Gross Revenues by Manager. Any
Base Management Fee that would have been payable to Manager had there been an
Operating Profit for such Accounting Period shall accrue and shall be payable
to Manager to the extent of, and shall reduce, any Incentive Management Fee
payable to Manager in respect of subsequent Accounting Periods. In no event shall Incentive Management Fees
accrue, nor shall any Incentive Management Fee be payable to Manager in respect
of any Accounting Period (i) as to which there is an Operating Loss or (ii) as
to which accrued Base Management Fees are payable to Manager or accrued Owner’s
Priority is payable to Owner. 

          To the
extent there is an Operating Loss for any Accounting Period, additional funds
in the amount of any such Operating Loss (other than the amount of any Base
Management Fee) shall be provided by Owner within thirty (30) days after
Manager has delivered written notice thereof to Owner. If Owner does not fund such Operating Loss
within the thirty (30) day time period, Manager shall have the right (without
affecting Manager’s other remedies under this Agreement) to withdraw an amount
to cover such Operating Loss from future distributions of funds otherwise due
to Owner. In the event an Operating Loss
occurs in respect of a Fiscal Year, either Owner or Manager may elect to
terminate this Agreement. In no event
shall Manager be obligated to invest its own funds to cover any Operating Loss.

          4.02. Books
and Records. 

          Books of
control and account pertaining to operations at the Hotel shall be kept on the
accrual basis and in all material respects in accordance with GAAP. Owner may
at reasonable intervals during Manager’s normal business hours examine such
records. If Owner desires to audit,
examine or review the Annual Operating Statement, Owner shall notify Manager in
writing within sixty (60) days after receipt of such Annual Operating Statement
of its intention to audit and begin such audit no sooner than ten (10) days
after Manager’s receipt of such notice.
Owner shall use reasonable efforts to complete such audit within one
hundred twenty (120) days after commencement thereof. If Owner does not make such an audit, then such Annual 

8

Operating Statement shall be deemed to be conclusively accepted by
Owner as being correct, except in the event of manifest error or fraud,
misrepresentation, misconduct or negligence by Manager or its agents,
employees, representatives or contractors or other third parties. If any audit by an independent certified
professional accountant retained by Owner discloses an understatement of any
amounts due Owner, Manager shall promptly pay Owner such amounts found to be
due, plus interest thereon at the Prime Rate plus one percent (1%) per annum
from the date such amounts should originally have been paid. For the purposes hereof, any amounts held in
accounts for the benefit of Owner shall be deemed to have been paid to
Owner. If any audit discloses that
Manager has not received any amounts due it, Owner shall pay Manager such
amounts. If such audit discloses an
underpayment to Owner for the Fiscal Year so audited of less than five percent
(5%) of the amount that should have been paid to Owner for such Fiscal Year,
the cost of the audit shall be paid by Owner and be a Deduction; provided, however,
Manager shall pay for such cost if such audit discloses an underpayment to
Owner for the Fiscal Year so audited of five percent (5%) or more of the amount
that should have been paid to Owner for such Fiscal Year. In addition, if the Franchise Agreement
requires Owner to pay interest and/or the cost of an audit to the franchisor on
account of an understatement in reports provided by Manager, Manager shall pay
such interest and costs in accordance with the Franchise Agreement without
(either directly or indirectly) passing such charges on to Owner.

          4.03. Accounts,
Expenditures. 

          A. All
funds derived from operation of the Hotel shall be deposited by Manager in
Owner’s bank accounts (the “Operating
Accounts”) established by Manager in a bank or banks designated
by Manager with the concurrence of Owner, which shall not be unreasonably
withheld. Withdrawals by Manager from
said Operating Accounts shall be made solely by the General Manager or the Assistant
General Manager of the Hotel, a senior officer of Manager or such other
representatives of Manager whose signatures have been authorized by Manager
with the concurrence of Owner.
Reasonable petty cash funds shall be maintained at the Hotel. 

          B. Except
as otherwise provided in this Agreement, all payments made by Manager hereunder
shall be made from the Operating Accounts, petty cash funds, or from the
Reserve (in accordance with Section 5.02).
Manager shall not be required to make any advance or payment with
respect to the Hotel except out of such funds, and Manager shall not be
obligated to incur any liability or obligation with respect to the Hotel unless
resulting from acts or omissions of Manager that are in violation of or
inconsistent with this Agreement or from Manager’s gross negligence or
intentional misconduct (each, “Manager’s
Liability” and, collectively, “Manager’s Liabilities”). 

          C. Debts
and liabilities (other than Manager’s Liabilities) incurred by Manager as a
result of its operation and management of the Hotel pursuant to the terms
hereof, whether asserted before or after Termination, will be paid by Owner to
the extent funds are not available for that purpose from Gross Revenues, and
Owner shall indemnify, defend and hold Manager harmless from and against all
loss, costs, liability, and damage (including, without limitation, reasonable
attorneys’ fees and expenses) arising from Owner’s failure to pay or perform
such debts and liabilities. Manager
shall pay, indemnify, defend and hold Owner harmless from and against all
Manager’s Liabilities and all loss, costs, liability and damage (including,
without 

9

limitation, reasonable attorneys’ fees and expenses) arising from
Manager’s failure to pay or perform Manager’s Liabilities. The provisions of this Section 4.03.C shall
survive Termination. 

          4.04. Annual
Operating Projection. 

          Manager shall deliver to Owner for its review, at least forty-five (45)
days prior to the beginning of each Fiscal Year after the first Fiscal Year
following the Effective Date, a preliminary draft of the business plan
(including a proposed budget) and a projection of the estimated Gross Revenues,
departmental profits, Deductions, and Operating Profit for the forthcoming
Fiscal Year for the Hotel (the “Annual
Operating Projection”) for approval by Owner. Manager will consider in good faith
suggestions made by Owner with respect to the Annual Operating Projection and
make modifications thereto that are agreed upon by Owner and Manager. In the case of the Fiscal Year beginning on
the Effective Date, Manager and Owner have already agreed upon the Annual
Operating Projection for such Fiscal Year.
Upon approval of the Annual Operating Projection by Owner and Manager,
Manager in good faith shall use best efforts to adhere to such Annual Operating
Projection. In the event Owner and
Manager are unable to agree upon the Annual Operating Projection by the
commencement of the Fiscal Year to which it relates, the Manager shall be
entitled to operate the Hotel in accordance with this Agreement with the
maximum approved amount of expenditures to be equal to (i) the aggregate of all
items in the proposed budget which are not disputed by Owner, plus (ii) the sum
of the actual expenditures for the items in dispute in the previous Fiscal Year
increased by the increase (if any) in the CPI on January 1 of the year in
question over the CPI on January 1 of the previous year, or if the previous
Fiscal Year were not a full calendar year, such amount multiplied by a
fraction, the numerator of which is the number of days in the full calendar
year in which most of such Fiscal Year fell and the denominator of which is the
number of days in such Fiscal Year, as reasonably adjusted for seasonality and
changes in circumstances. 

          4.05. Working
Capital. 

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

10

          4.06. Fixed
Asset Supplies. 

          The parties further recognize that, as of the Effective Date, the level
of funds for Fixed Asset Supplies is reasonably believed to be reasonably
sufficient for the operations of the Hotel, subject at all times to seasonal
differences and changes in circumstances after the Effective Date. Any
additional funds which are necessary to maintain Fixed Asset Supplies at levels
determined by Manager (with the concurrence of Owner) to be necessary to
satisfy the needs of the Hotel, shall be paid from Gross Revenues as
Deductions. Fixed Asset Supplies shall
remain the property of Owner throughout the term of this Agreement and upon
Termination. 

          4.07. Real
Estate and Personal Property Taxes.

          A. Except
as specifically set forth in Section 4.07.B below, all real estate and personal
property taxes, levies, assessments (including special assessments (regardless
of when due or whether they are paid as a lump sum or in installments over
time) imposed because of facilities that are constructed by or on behalf of the
assessing jurisdiction (for example, roads, sidewalks, sewers, culverts, etc.)
which directly benefit the Hotel (regardless of whether or not they also
benefit other buildings)), “Impact Fees” (regardless of when due or whether
they are paid as a lump sum or in installments over time) which are required of
Owner as a condition to the issuance of zoning variances or building permits,
and similar charges on or relating to the Hotel (collectively, “Impositions”) during the Term shall
be paid by Manager from Gross Revenues, before any fine, penalty, or interest
is added thereto or lien placed upon the Hotel or upon this Agreement, unless
payment thereof is in good faith being contested and enforcement thereof is
stayed. Any such payments shall be
Deductions in determining Operating Profit.
Owner shall, within five (5) days after receipt, furnish Manager with
copies of official tax bills and assessments which it may receive with respect
to the Hotel. Either Landlord or Owner
may, and at Owner’s request Manager shall, initiate proceedings to contest any
negotiations or proceedings with respect to any Imposition, and all reasonable
costs of any such contest shall be paid from Gross Revenues and shall be a
Deduction in determining Operating Profit.
Manager shall, as part of its contest or negotiation of any Imposition,
be entitled, on Owner’s behalf, to waive any applicable statute of limitations
in order to avoid paying the Imposition during the pendency of any proceedings
or negotiations with applicable authorities.
Notwithstanding anything contained herein to the contrary, at Owner’s
option (i) Manager shall establish an escrow account in the name of Owner in a
bank or banks designated by Manager with the concurrence of Owner and shall
deposit monthly into such account from Gross Revenues an amount that Manager
reasonably estimates shall be sufficient to pay the Impositions, in which case
Manager shall pay the Impositions from funds in the escrow account as and when
the Impositions become due (and Owner shall promptly deposit into the escrow
account any deficiency if the estimated monthly payments are not sufficient to
pay all of the Impositions) or (ii) the amounts that would otherwise be
deposited into such escrow account shall be included in the Operating Profit,
not deducted from Gross Revenues and shall be distributed in cash to Owner
along with the remainder of the Owner’s Priority. If Owner elects to retain such amounts pursuant to clause (ii)
above, Manager shall accrue such amounts as a reserve on the accounting records
of the Hotel, and Owner shall fund the same as and when the Impositions become
due, but such accrued and unfunded amounts shall be deducted from Gross Revenues
for purposes of calculating the Incentive Management Fee. In addition, if any Mortgagee requires the 

11

establishment of an escrow account with respect to the Impositions,
Manager shall comply with such requirements. 

          B. The word
“Impositions” as used in
this Agreement shall not include any franchise, corporate, estate, inheritance,
succession, capital levy or transfer tax or other assessment or payment in lieu
thereof imposed on Owner or Manager, or any income tax imposed on any income of
Owner or Manager (including distributions to Owner or Manager pursuant to
Article III hereof), all of which shall be paid solely by Owner or Manager, as
applicable, not from Gross Revenues nor from the Reserve. 

          4.08. Sarbanes-Oxley
Certification.

          A. Owner
may, in connection with its or any of its Affiliate’s annual or quarterly
Securities and Exchange Commission reporting requirements (and in any event no
more than four (4) times in any Fiscal Year), request that Manager deliver to
Owner or its Affiliate a certificate from an accounting officer of Manager, in
a form approved by Manager’s accounting firm, certifying that, to his or her
knowledge, the information contained in the Accounting Period Statements for
the Accounting Periods contained within the applicable Fiscal Year or quarter
are true and correct in all material respects, subject to final adjustment
based on the annual review conducted by Manager in preparing the Annual
Operating Statement. Owner shall submit
such request in writing, along with the date by which such certificate is to be
delivered, not less than five (5) business days prior to the requested delivery
date, and Manager shall deliver the certificate by the requested date or, if
later, within five (5) business days after Manager’s receipt of Owner’s
request. 

          B. In
connection with Owner’s or its Affiliates’ certifications under Section 404 (“Section 404”) of the Sarbanes-Oxley
Act of 2002, Owner or such Affiliate shall have the right, at its option: 

                    1.
Either (i) to require Manager to document its processes and related internal
controls for Owner or such Affiliate to use in its required documentation under
Section 404 or (ii) to have access to Manager’s books and records relating to
the Hotel (including, without limitation, reasonable access to Manager’s
premises) to document Manager’s processes and related internal controls; and 

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

          Manager shall
provide Owner’s or such Affiliates’  independent auditors access to Manager’s
books and records relating to the Hotel (including, without limitation, access
to Manager’s premises) to conduct their audit of the testing performed pursuant
to this Section 4.08. If Owner or such
Affiliate determine such controls have weaknesses which should be mentioned in
Owner’s or such Affiliates’ report on internal controls under Section 404 or
other certifications under the Sarbanes-Oxley Act of 2002, Manager shall use
commercially reasonable efforts to remedy and/or correct identified weaknesses
within thirty (30) days after notice; provided, 

12

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

ARTICLE V

REPAIRS, MAINTENANCE AND REPLACEMENTS

          5.01. Repairs
and Maintenance to be Paid from Gross Revenues.

          Subject to the availability of adequate funds, Manager shall maintain
the Hotel in good repair and condition, comply with and abide by all applicable
Legal Requirements pertaining to its operation of the Hotel and shall make or
cause to be made such routine maintenance, repairs and minor alterations as it
determines are necessary for such purposes and as required pursuant to the
terms of the Franchise Agreement or by Owner.
The phrase “routine maintenance,
repairs, and minor alterations” as used in this Section 5.01
shall include only those which are normally expensed under generally accepted
accounting principles. The cost of such
maintenance, repairs and alterations shall be paid from Gross Revenues (and not
from the Reserve) and shall be treated as a Deduction. 

          5.02. Repairs,
Maintenance and Equipment Replacements to be Paid from Reserve.

          A. At
Owner’s option and request, a reserve account in the name of Owner (the “Reserve”) shall be established by
Manager, in a bank or similar institution reasonably acceptable to both Manager
and Owner, to cover the cost of: 

                    1.
Replacements, renewals and additions to the FF&E at the Hotel; and 

                    2.
Capital Expenditures. 

          B. During
the Term, Manager shall transfer into the Reserve the amount(s) specified in Schedule
1. Transfers into the Reserve shall be made at the time of each interim accounting
described in Section 4.01 hereof. All
amounts transferred to the Reserve shall be deducted from Gross Revenues in
determining Operating Profit and shall be deposited in the special Reserve
account described in Section 5.02.A. 

          C. Subject
to the availability of adequate funds, Manager at Owner’s expense shall from
time to time make such (1) replacements and renewals to the FF&E of the
Hotel, and (2) Routine Capital Expenditures, as may be agreed upon by Owner and
Manager and as may be required by the Franchise Agreement. At the end of each Fiscal Year, any amounts
remaining in the Reserve shall be carried forward to the next Fiscal Year. The Reserve will be kept in an
interest-bearing account, and any interest which accrues thereon shall be
retained in the Reserve. Interest which
accrues on amounts held in the Reserve, shall not (a) result in any reduction
in the required contributions to the Reserve set forth in Section 5.02.B above,
nor (b) be included in Gross Revenues. 

13

          D. All
repairs, alterations, improvements, renewals or replacements made pursuant to
this Article V, and all amounts kept in the Reserve, shall be the property of
Owner, subject to Manager’s rights to apply such funds as otherwise provided in
this Agreement. In addition and
notwithstanding anything contained herein to the contrary, no funds shall be
expended for replacements, renewals and additions to the FF&E, for Routine
Capital Expenditures or for any other capital expenditures unless each such expenditure
is included in the Annual Operating Projection approved by Owner. In the event that Owner requests that
Manager perform capital improvements that are not included in the Annual
Operating Projection, Manager will perform such improvements provided that
Owner and Manager have theretofore agreed upon a mutually satisfactory funding
mechanism to pay for the cost of such improvements. Notwithstanding the foregoing, in case of threatened damage or
destruction to the Hotel or persons or property thereon due to force majeure or
other comparable emergency, Manager may at Owner’s expense make such repairs,
replacements or improvements to the Hotel as Manager reasonably deems necessary
to avoid and/or minimize any such injury, damage or destruction. 

          E.
Notwithstanding anything contained herein to the contrary, at Owner’s option
the amounts that would otherwise be deposited into the Reserve pursuant to this
Section 5.02 shall be included in the Operating Profit, not deducted from Gross
Revenues and shall be distributed in cash to Owner along with the remainder of
the Owner’s Priority. In such case,
Manager shall accrue such amounts as a reserve on the accounting records of the
Hotel, and Owner shall fund the same only when required under this Agreement to
cover the appropriate costs actually incurred.
However, such accrued and unfunded reserves shall be deducted from Gross
Revenues for purposes of calculating the Incentive Management Fee. 

          F. Unless
otherwise expressly covered by this Article V (including without limitation in
case of emergency as provided in Section 5.02.D.), Manager shall not make any
capital expenditure or improvement without first obtaining Owner’s prior
written consent and approval. 

ARTICLE VI

INSURANCE

          6.01. Property
Insurance.

          A. Subject
to Owner’s prior approval and the provisions of Section 6.05, Manager shall,
commencing with the Effective Date and for the duration of the Term, procure
and maintain, using funds deducted from Gross Revenues in determining Operating
Profit, the following insurance and /or such other insurance as may be approved
or required by Owner: 

                    1.
Insurance on the Hotel (including contents) against loss or damage by all
perils included in “all risk” (as such term is commonly used in the insurance
industry) coverage, in an amount not less than one hundred percent (100%) of
the replacement cost thereof, except that if such 100% replacement cost
coverage is not available on reasonable rates and terms, then such insurance
shall be in an amount not less than ninety percent (90%) of the replacement
cost thereof (less excavation and foundation costs), of the Hotel; 

14

                    2.
Insurance against loss or damage from explosion of boilers, pressure vessels,
pressure pipes and sprinklers, to the extent applicable, installed in the
Hotel; 

                    3.
Business interruption insurance covering loss of profits and necessary
continuing expenses for interruptions caused by any occurrence covered by the
insurance referred to in Section 6.0l.A.1, 2 and 3, for a period of not less
than one (1) year after the occurrence, of a type and in amounts and with such
deductible limits as are agreed upon by Owner and Manager. 

                    4.
If the Hotel is in an earthquake-prone area, earthquake insurance in accordance
with Prudent Industry Practices. 

          B. All
policies of insurance required under Section 6.01.A. 1, 2 and 3 shall insure
Owner, Landlord, Manager, and any Mortgagee, and any losses thereunder shall be
payable to the parties as and to the extent their respective interests, if any,
may appear. 

          6.02. Operational
Insurance.

          Subject to
Owner’s prior approval and the provisions of Section 6.05, Manager shall, commencing
with the Effective Date and for the duration of the Term, procure and maintain,
using funds deducted from Gross Revenues in determining Operating Profit, with
insurance companies approved by Owner the following insurance and/or such other
insurance as may be approved or required by Owner: 

          A. Workers
compensation insurance as may be required under applicable laws covering all of
the employees at the Hotel, with such deductible limits or self-insured
retentions as are agreed upon by Owner and Manager; 

          B. Fidelity
bonds or crime insurance with respect to Hotel employees handling funds of the
Hotel, in an amount approved by Owner; 

          C.
Comprehensive general public liability insurance against claims for all injury,
death or property damage occurring on, in, or about the Hotel, and automobile
insurance on vehicles owned or leased by owner and operated in conjunction with
the Hotel, with a combined single limit of not less than Twenty Million Dollars
($20,000,000) for each occurrence for personal injury, death and property
damage, with such deductible limits as are agreed upon by Owner and Manager; 

          D. Such
other insurance, including excess/umbrella coverage and employer’s practice
liability insurance, in amounts as Manager in its reasonable judgment deems
advisable (with the concurrence of Owner) for protection against claims,
liabilities and losses arising out of or connected with the operation of the
Hotel or as reasonably required by a Mortgagee. 

          Owner, Manager
and Landlord shall be the named insureds with respect to the insurance
described in Section 6.02.C and, to the extent applicable, Section 6.02.D. Manager shall be the name insured and Owner
and Landlord shall be additional insureds on the policies described in Section
6.02.A and 6.02B. 

15

          6.03. Coverage.

          All
insurance described in Sections 6.01 and 6.02 may be obtained by Manager by
endorsement or equivalent means under its blanket insurance policies, provided
that such blanket policies fulfill the requirements specified herein. Deductible limits shall be as agreed upon by
Owner and Manager. No coverage required
hereunder shall be self-insured by Manager without prior written approval of
Owner. Owner shall have the right to approve
the insurance policies to be obtained by Manager pursuant hereto and the
insurance companies issuing such policies. 

          6.04. Costs
and Expenses.

          Insurance
premiums and any costs or expenses with respect to the insurance described in
this Article VI shall be Deductions in determining Operating Profit. Premiums on policies for more than one year
shall be charged pro rata against Gross Revenues over the period of the
policies. Any reserves, losses, costs,
damages or expenses which are uninsured, or fall within deductible limits,
shall be treated as a cost of insurance and shall be Deductions in determining
Operating Profit. 

          6.05. Owner’s
Right to Provide Insurance. Notwithstanding anything contained in this
Agreement to the contrary, Owner and/or its Affiliates (including, without
limitation, Landlord) shall have the right to procure and maintain any or all
of the property and operational insurance for the Hotel otherwise required to
be maintained by Manager under this Article VI and in lieu of Manager’s
procuring the same, provided that (i) Owner shall give Manager not less than
thirty (30) days notice of Owner’s intent to provide such insurance and shall
provide to Manager upon request certificates of insurance, naming Manager as an
additional insured, evidencing the same (ii) Owner’s insurance provides
reasonably equivalent coverage to Manager’s policies and (iii) such insurance
procured by Owner shall not become effective until the end of the then-current
term of the applicable policy or policies maintained by Manager. In such case, all of the terms and
conditions of this Article VI, to the extent applicable, shall govern the
insurance procured by Owner under this Section 6.05. Without limiting the generality of the foregoing, all insurance
premiums and any costs or expenses with respect to such insurance shall be
Deductions in determining Operating Profit. 

ARTICLE VII

DAMAGE AND REPAIR

          7.01. Damage
and Repair.

          A. If,
during the Term, the Hotel is damaged or destroyed by fire, casualty or other
cause, Owner and/or Landlord may elect, in its sole and absolute discretion, to
repair or replace the damaged or destroyed portion of the Hotel with such
modifications as Owner may deem appropriate or as may be required by law, and
Manager shall have the right to discontinue operating the Hotel to the extent
it deems necessary to comply with applicable law, ordinance, regulation or
order or as necessary for the safe and orderly operation of the Hotel. All proceeds from the insurance described in
this Agreement shall be paid to Owner and/or Landlord, as the case may be. If Owner elects not to repair or replace
said damaged portion of the Hotel, Owner 

16

shall so notify Manager by written notice as soon as reasonable
practicable and no later than ninety (90) days after the date of the casualty. 

          B. In the
event damage or destruction to the Hotel from any cause materially and
adversely affects the operation of the Hotel and Owner notifies Manager that
Owner will not repair or replace such damage, either party may terminate this
Agreement by at least sixty (60) days prior written notice to the other
party. Until such time as Owner repairs
or replaces the damaged portion of the Hotel or this Agreement is terminated
pursuant to this section, then subject to receipt by Owner of proceeds from
business interruption insurance irrespective of any deductible, which shall be
Owner’s responsibility, (which policy Owner agrees shall be written to include
property management fees) Manager shall be due monthly fees equal to the
average monthly amount of both the Base Management Fee and the Incentive
Management Fee during the immediately preceding twelve (12) month period. 

          7.02. Condemnation.

          A. In the
event all or substantially all of the Hotel shall be taken in any eminent
domain, condemnation, compulsory acquisition, or similar proceeding by any
competent authority for any public or quasi-public use or purpose or in the
event a portion of the Hotel shall be so taken, but the result is that either
Owner or Manager reasonably determines that it is not feasible to continue to
operate the Hotel in accordance with the standards required by this Agreement,
Owner or Manager may terminate this Agreement as of the effective date of such
taking. All awards and proceeds of any
such taking or proceeding shall belong to Owner and/or Landlord; provided,
however, Owner agrees as part of its claim to include a claim for Manager’s
lost fees resulting from such taking or condemnation, which shall be due to
Manager upon recovery. 

          B. In the
event this Agreement is not terminated pursuant to Section 7.02.A, such portion
of the Hotel that is not so taken shall be repaired or replaced, with such
modifications as Owner may deem appropriate or as may be required by law, and
this Agreement shall continue except as may be otherwise agreed by the
parties. All awards for any such
partial taking or condemnation shall belong to Owner and/or Landlord, as the
case may be; provided, however, Owner agrees as part of its claim to include a
claim for Manager’s lost fees resulting from such partial taking or
condemnation, which shall be due to Manager upon recovery. Manager shall have the right to discontinue
temporarily operating the Hotel to the extent it deems necessary for the safe
and orderly operation of the Hotel. 

          7.03. Subordination
to Mortgage.

          Manager
shall provide to any Mortgagee a commercially reasonable instrument (the “Subordination Agreement”), reasonably
satisfactory in all respects to Owner and such Mortgagee, which shall be
recordable in the jurisdiction where the Hotel is located, pursuant to which: 

                    1.
This Agreement and any extensions, renewals, replacements or modifications
thereto, and all right and interest of Manager in and to the Hotel, shall be
subject 

17

and subordinate to such Mortgagee’s Mortgage, with notice and
opportunity to cure rights and post-default cure rights in favor of Mortgagee; 

                    2.
Manager shall be obligated to each of the Subsequent Owners (as defined below)
to perform all of the terms and conditions of this Agreement for the balance of
the remaining Term hereof, with the same force and effect as if such Subsequent
Owner were the Owner; and 

                    3.
In the event that there is a Foreclosure of such Mortgage in connection with
which title or possession of the Hotel is transferred to the Mortgagee (or its
designee) or to a purchaser at foreclosure or to a subsequent purchaser from
the Mortgagee (or from its designee) (all of the foregoing shall collectively
be referred to as “Subsequent Owners”),
this Agreement may be terminated at the election of such Subsequent Owner on
the date of such Foreclosure or upon thirty (30) days notice; provided,
however, in no event will Manager agree to subordinate or waive its right to
receive fees, reimbursements or indemnification payments under this Agreement
arising prior to termination (but (a) if this Agreement is terminated by a
Subsequent Owner as set forth above, Manager shall not look to such Subsequent
Owner (but may look to Owner) for payment of such fees, reimbursements or
indemnification payments and Manager’s right to receive such fees,
reimbursements or indemnification payments shall be subordinated to the
Subsequent Owner’s rights and (b) if this Agreement is not terminated by a
Subsequent Owner as set forth above, then such fees, reimbursements or
indemnification payments shall be payable by the Subsequent Owner). 

          7.04. [Reserved.]

          7.05. Liens;
Credit.

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

ARTICLE VIII

DEFAULTS

          8.01. Events of Default.

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

          A. The
filing of a voluntary petition in bankruptcy or insolvency or a petition for
reorganization under any bankruptcy law by either party, or the admission by
either party that it is unable to pay its debts as they become due. 

18

          B. The
consent to an involuntary petition in bankruptcy or the failure to vacate,
within ninety (90) days from the date of entry thereof, any order approving an
involuntary petition by either party. 

          C. The
entering of an order, judgment or decree by any court of competent
jurisdiction, on the application of a creditor, adjudicating either party as
bankrupt or insolvent or approving a petition seeking reorganization or
appointing a receiver, trustee, or liquidator of all or a substantial part of
such party’s assets, and such order, judgment or decree’s continuing unstayed
and in effect for an aggregate of sixty (60) days (whether or not
consecutive). 

          D. The
failure of either party to make any payment required to be made in accordance
with the terms of this Agreement, as of the due date as specified in this
Agreement and the failure to cure such default within ten (10) days after
receipt of written notice from the non-defaulting party demanding such cure,
provided that in the case of payments by Manager of Owner’s Priority or other
distributions of Operating Profit payable to Owner, if such default shall occur
more than once in any calendar year period, Owner shall have the right to
terminate this Agreement immediately. 

          E. Manager,
any of its Affiliates or any employee at the Hotel is or becomes a Specially
Designated National or Blocked Person, unless, in the case of an employee,
Manager terminates any such employee promptly after becoming aware of the same.

          F. In
carrying out its duties hereunder, Manager or an officer, director, employee,
agent or contractor of Manager or its Affiliates commits any act involving
fraud, moral turpitude or willful misconduct relating to the business or
affairs of the Hotel, or commits an act which constitutes a felony. 

          G. Any
representation or warranty by Manager or any of its Affiliates in this
Agreement or in any certificate or document or financial or other statement
furnished or delivered to Owner or any of its Affiliates at any time under or
in connection with this Agreement shall have been false or misleading in any
material respect on or as of the date made or deemed made. 

          H. The
failure of either party to perform, keep or fulfill any of the other covenants,
undertakings, obligations or conditions set forth in this Agreement, and the
continuance of such default for a period of thirty (30) days after the
defaulting party’s receipt of written notice from the non-defaulting party of
said failure, or, if the default is such that it cannot reasonably be cured
within said thirty (30) day period of time, if the defaulting party fails to
commence the cure of such default within said thirty (30) day period of time or
thereafter fails to diligently pursue such efforts to completion, provided that
(i) in the case of any default by Manager such default is cured not later than
ninety (90) days after Manager’s receipt of such written notice and (ii) a ten
(10) day cure period shall be required in the case of Manager’s failure to
maintain the insurance required by Article VI, provided that (a) Owner shall
have the immediate right to obtain the insurance required by Article VI on its
own initiative and (b) if the foregoing default occurs more than once during
the term of this Agreement, Owner shall have the right to terminate this Agreement
immediately. 

19

          8.02.
Remedies. 

          Upon the
occurrence of an Event of Default, the non-defaulting party shall have the
right to pursue any one or more of the following courses of action: (1) to
terminate this Agreement by written notice to the defaulting party, which
termination shall be effective as of the effective date which is set forth in
said notice; (2) to institute forthwith any and all proceedings permitted by
law or equity including, without limitation (but subject to the provisions of
Section 10.20 hereof), actions for specific performance and/or damages; and/or
(3) to avail itself of the remedies described in Section 8.03. If Manager
terminates this Agreement upon the occurance of an Event of Default of Owner,
Manager shall be entitled to payment by Owner of the Termination Fee. 

          8.03.
Additional Remedies. 

          A. Upon the
occurrence of a Default by either party under the provisions of Section 8.0l.D,
the amount owed to the non-defaulting party shall accrue interest, at an annual
rate equal to the Prime Rate plus three (3) percentage points, from and after
the date on which the Default occurred. 

          B. The
remedies granted under Section 8.02 and Section 8.03 shall not be in
substitution for, but shall be in addition, to, any and all rights and remedies
available to the non-defaulting party (including, without limitation,
injunctive relief and damages) by reason of applicable provisions of law or
equity and shall survive Termination. 

ARTICLE IX

ASSIGNMENT AND SALE

          9.01.
Assignment. 

          A. Manager
shall not assign or transfer its interest in this Agreement without the prior
written consent of Owner and any franchisor under the Franchise Agreement. For
purposes hereof, a transferee shall be deemed reasonably acceptable, and Owner
shall have no right to withhold its consent if (i) such Any assignee consented
to by Owner and by such franchisor shall agree in writing to be bound by and
comply with the terms of this Agreement (such written agreement to be acceptable
in form and substance to Owner and such franchisor). For purposes of the
foregoing, a transfer of Manager’s interest in this Agreement shall include (i)
an assignment or pledge of this Agreement as security for an obligation, (ii) a
transfer of any ownership or beneficial interest, direct or indirect, in
Manager, including any such transfer by operation of law except to an Affiliate
and (iii) a transfer of Manager’s interest in this Agreement by operation of
law, including by merger or consolidation (other than such a transfer to an
Affiliate approved by Owner, which approval shall not be unreasonably
withheld). 

          B. Owner
shall have the right to assign or transfer its interest in this Agreement
without the prior written consent of the Manager (1) as security for a Mortgage
of the Hotel in accordance with this Agreement, (2) in connection with a sale,
assignment, transfer or other disposition of the Hotel by Owner or Landlord,
subject to Section 9.02, and (3) in connection 

20

with a merger
or consolidation or reorganization of, or a sale of all or substantially all of
the assets of, Apple REIT Ten, Inc., or any Affiliate thereof. 

          C. In the
event Owner and the franchisor under the Franchise Agreement consent to an
assignment of this Agreement by Manager, no further assignment or transfer
shall be made without the express consent in writing of such parties. An
assignment by Manager of its interest in this Agreement, as permitted by this
Agreement, shall relieve Manager from its obligations under this Agreement. 

          D.
Notwithstanding anything contained herein to the contrary, Manager shall not
assign its interest in this Agreement to a Specially Designated National or
Blocked Person. 

          9.02.
Sale of the Hotel. 

          Owner or
Landlord may, in its or their sole and absolute discretion, enter into any Sale
of the Hotel to any Person and, in connection with any such Sale of the Hotel,
may assign this Agreement as provided in Section 9.01. However, if Owner or
Landlord enters into a Sale of the Hotel, either Owner or Manager may, at its
option, terminate this Agreement upon thirty (30) days notice to the other
party upon completion of the Sale of the Hotel. Upon any such sale or
assignment, Owner shall be released of all liabilities and obligations arising
under and with respect to this Agreement on and after the date of such Sale of
the Hotel; provided, however, that Owner shall continue to be liable for all
obligations and amounts due which arise or accrue during the Term of this
Agreement before the date of such Sale of the Hotel including, but not limited
to, the obligation to pay a Termination Fee but such Termination Fee shall only
be payable if Owner (not Manager) terminates this Agreement upon Sale of the
Hotel. 

ARTICLE X

MISCELLANEOUS

          10.01.
Right to Make Agreement. 

          Each party
warrants, with respect to itself, that neither the execution of this Agreement
nor the performance of the transactions contemplated hereby shall violate any
provision of law or judgment, writ, injunction, order or decree of any court or
governmental authority having jurisdiction over it; result in or constitute a
breach or default under any indenture, contract, other commitment or
restriction to which it is a party or by which it is bound; or, require any
consent, vote or approval which has not been taken, or at the time of the
transaction involved shall not have been given or taken. Each party covenants
that it has and will continue to have throughout the Term and any extensions
thereof, the full right to enter into this Agreement and perform its
obligations hereunder. 

          10.02.
Consents and Cooperation. 

          Wherever in
this Agreement the consent or approval of Owner or Manager is required, except
as otherwise provided in this Agreement or agreed by the parties, such consent
or approval may be withheld, delayed or conditioned in the sole and absolute
discretion of the party whose consent or approval is required, shall be in
writing and shall be executed by a duly 

21

authorized officer or agent of such party. Owner agrees to cooperate
with Manager by executing such leases, subleases, licenses, concessions,
equipment leases, service contracts and other agreements negotiated in good
faith and at arm’s length by Manager and pertaining to the Hotel that, in
Manager’s reasonable judgment, should be made in the name of the Owner,
provided that certain of such agreements shall be subject to Owner’s prior
approval pursuant to Section 1,02(A)(12). 

          10.03.
Relationship. 

          The
relationship of Owner and Manager shall be that of independent contractors, and
neither this Agreement nor any agreements, instruments, documents, or
transactions contemplated hereby shall in any respect be interpreted, deemed or
construed as making Manager an agent of or partner or joint venturer with
Owner. Owner and Manager agree that neither party will make any contrary
assertion, claim or counterclaim in any action, suit, arbitration or other
legal proceedings involving Owner and Manager. Any contract or agreement that
Manager enters into with an Affiliate of Manager or with a third party to
provide goods or services to the Hotel shall be entered into in the name of
Manager or Owner, provided that no such contract or agreement shall be entered
into in the name of Owner without Owner’s prior written consent and approval of
each such agreement and contract, and Owner shall have no liability with
respect to any contract or agreement entered into in the name of Manager other
than to pay any sums due thereunder which are Deductions or which Owner
otherwise agrees to pay. Notwithstanding anything contained herein to the
contrary, with respect to those agreements which require Owner’s prior written
approval pursuant to Section 1.02(A)(12), Manager shall defend, indemnify and
hold Owner harmless from and against any claims by the third party vendor or
supplier under any contract entered into by Manager (a) in the name of Owner
without Owner’s prior written consent and approval or (b) in the name of
Manager without Owner’s prior written consent and/or approval. 

          10.04.
Applicable Law; Jurisdiction. 

          This
Agreement shall be construed under and shall be governed by the laws of the
state in which the Hotel is located, without regard to that state’s conflict of
laws provisions. Each of Owner and Manager hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the state and (to the extent permitted by law) Federal courts
of such state, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such state court or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may
be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Agreement shall affect any right that
Owner or Manager may otherwise have to bring any action or proceeding relating
to this Agreement against the other party in the courts of any other
jurisdiction. Each of Owner and Manager hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to this Agreement in any
court referred to above. Each of the parties hereto hereby irrevocably waives, 

22

to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court. 

          10.05.
Recordation. 

          The terms
and provisions of this Agreement shall not run with the parcel of land
designated as the Site, and neither this Agreement nor any memorandum or short
form hereof shall be recorded or registered without the prior written consent
of Owner. 

          10.06.
Headings. 

          Headings of
articles and sections are inserted only for convenience and are in no way to be
construed as a limitation on the scope of the particular articles or sections
to which they refer. 

          10.07.
Notices. 

          Notices,
statements and other communications to be given under the terms of this
Agreement shall be in writing and delivered by hand against receipt or sent by
certified or registered mail (with a copy by first class mail) or Express Mail
service, in each case postage prepaid, return receipt requested or by
nationally utilized overnight delivery service, addressed to the parties as
follows: 

	
  

 	
  

 
	
 To Owner:

 	
 Apple Ten
 Hospitality Management, Inc.

 
	
  

 	
 c/o Apple
 REIT Companies

 
	
  

 	
 814 E. Main
 Street

 
	
  

 	
 Richmond,
 Virginia 23219

 
	
  

 	
 Attn:     Krissy
 Gathright

 
	
  

 	
 Phone:  (804)
 727-6323

 
	
  

 	
 Fax:      (804)
 727-6353

 
	
  

 	
  

 
	
 To Manager:

 	
 MHH
 Management, LLC

 
	
  

 	
 c/o McKibbon
 Hotel Group, Inc.

 
	
  

 	
 402
 Washington St., SE, Suite 200

 
	
  

 	
 Gainesville,
 Georgia 30501

 
	
  

 	
 Attn: David
 Hughs

 
	
  

 	
 Phone: (770)
 534-3381

 
	
  

 	
 Fax: (770)
 532-3995

 

or at such other address as is from time to time designated by the
party receiving the notice. Any such notice that is mailed in accordance
herewith shall be deemed received when delivery is received or refused, as the
case may be.

          10.08.
Environmental Matters. 

          A. Manager
shall operate the Hotel in compliance with all applicable Environmental Laws.
Manager shall (i) not use, generate or store any Hazardous Materials in or on
the Hotel except as necessary for the operation and maintenance of the Hotel
and in compliance with the 

23

Environmental Laws, (ii) not allow, permit or cause the release or
threat of release of any Hazardous Materials in, on, under or from the Hotel,
except for the ordinary use of cleaning and maintenance supplies in compliance
with applicable Environmental Laws, (iii) not allow the accumulation of tires,
spent batteries, construction and demolition debris or any other solid waste,
except for solid waste generated from the operation of the Hotel and stored in
containers for normal scheduled pickup and disposal off site in compliance with
applicable Environmental Laws and (iv) use best efforts to operate and maintain
the Hotel in a manner to prevent mold, fungal or other microbial growth or
conditions that are favorable for such growth, including, without limitation,
the proper operation and maintenance of heating, ventilation and air
conditioning systems and removal of any mold, fungal or microbial growth. 

          B. In the
event of the discovery of a release or threat of release of Hazardous Materials
in, on, under or from any portion of the Hotel during the Term, Manager shall
promptly notify Owner and shall take all appropriate actions with regard to
such Hazardous Materials as required of an owner or operator under applicable
Environmental Laws. Manager shall keep Owner apprised of the status of addressing
the release or threat of release of Hazardous Materials, and Owner shall have
the right at any time to assume control of the matter from Manager. 

“Environmental Laws”
shall mean all federal, state and local environmental, health and safety laws, rules,
regulations, ordinances, permits, orders, common law or requirements of any
governmental authority, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. §§
9601, et. seq., as amended; Solid Waste Disposal Act, 42 U.S.C.
§§ 6901, et. seq., as amended; Toxic Substances Control Act, 15
U.S.C. §§ 2601, et. seq., as amended; Hazardous Materials
Transportation Act, 49 U.S.C. §§ 5101, et. seq., as amended;
Federal Water Pollution Control Act, 33 U.S.C. §§ 1251, et. seq.

“Hazardous Materials”
shall mean any hazardous substances, hazardous wastes, toxic substances,
hazardous materials, petroleum or petroleum products, pollutants or
contaminants (as those terms are defined under Environmental Laws), including,
without limitation, polychlorinated biphenyls, lead or lead-based paint,
asbestos or mold in such concentrations or amounts as may impose clean-up,
removal, monitoring or other responsibility under the Environmental Laws or
which may present a significant risk of harm to guests, invitees or employees
of the Hotel. 

          10.09.
Confidentiality; Projections. 

          A. Owner
and Manager agree that the terms of this Agreement are strictly confidential
and will use their reasonable efforts to ensure that the terms of this
Agreement are not disclosed to any outside person or entities without the prior
written consent of the other party, except (1) as Owner or Manager may
determine is required by any law, rule, regulation or judicial process, or by
any regulatory or supervisory authority having jurisdiction over the parties or
any of their Affiliates or (2) to the extent reasonably necessary, (i) to
obtain licenses, permits and other public approvals, (ii) in connection with a
financing of the Hotel, Owner, or any Affiliate thereof, (iii) in connection
with a Sale of the Hotel or other sale of Owner, or any Affiliate thereof or
its or their corporate assets, (iv) subject to the provisions of Section 4.02,
in connection with an audit or other investigation conducted pursuant to this
Agreement or (v) in 

24

connection with either party’s enforcement of its rights and remedies
under this Agreement. Notwithstanding the foregoing or anything to the contrary
set forth herein, the terms of this Agreement shall not be deemed confidential
to the extent: (a) such information becomes generally available to the public
other than as a result of unauthorized disclosure by the recipient or persons
to whom such recipient has made the information available; or (b) the party
seeking to disclose such confidential information can demonstrate to the
reasonable satisfaction of the other party that the information sought to be
disclosed is customarily disclosed by at least 80% of all Persons directly or
indirectly owning hotels in the United States; or (c) the information
communicated was already known to recipient at the time of its receipt. 

          B. Owner
acknowledges that any written or oral projections, pro formas, or other similar
information that has been (prior to execution of this Agreement) or will
(during the Term) be provided by Manager (or any Affiliate of either) to Owner
is for information purposes only, and that Manager, and any such Affiliate do
not guarantee that the Hotel will achieve the results set forth in any such
projections, pro formas, or other similar information. Owner further
acknowledges that any such projections, pro formas, or other similar
information are based on assumptions and estimates, unanticipated events may
occur subsequent to the date of preparation of such projections, pro formas,
and other similar information, and the actual results achieved by the Hotel are
likely to vary from the estimates contained in any such projections, pro
formas, or other similar information and such variations might be material. 

          10.10.
Indemnification. 

          A. Manager
hereby agrees to indemnify, defend and hold harmless Owner, its officers,
directors, stockholders, employees, agents and their respective successors and
assigns from and against any and all claims, liabilities, damages, losses,
obligations and costs (including reasonable attorneys’ fees) arising from (i)
Manager’s or any of its Affiliate’s failure to comply with its obligations
under this Agreement and, to the extent provided herein, the obligations of the
franchisee under the Franchise Agreement, (ii) any grossly negligent act or
omission, theft, fraud or willful misconduct of Manager or its Affiliates and
their respective employees, agents or contractors and (iii) any claim asserted
by any employee, contractor or agent of Manager or its Affiliates, including
any claim for employment discrimination, wrongful termination, violations of
law and other claims asserted by such employees, except, as to any of the items
listed in clauses (i) – (iii) above, to the extent of any costs properly
payable from Gross Revenues as Deductions, to the extent of any costs or claims
covered by insurance or to the extent that the loss or liability giving rise to
such claim was caused directly by Owner’s breach of its obligations under this
Agreement or Owner’s grossly negligent act or omission, theft, fraud, or
willful misconduct. 

          B. Owner
hereby agrees to indemnify, defend and hold harmless Manager, its officers,
directors, stockholders, employees, agents and their respective successors and
assigns from and against any and all claims, liabilities, damages, losses,
obligations and costs (including reasonable attorneys’ fees) arising from (i)
Owner’s failure to comply with its obligations under this Agreement, (ii) any
grossly negligent act or omission, theft, fraud or willful misconduct of Owner
or its Affiliates or their respective employees, agents or contractors and
(iii) any claim asserted by any employee, contractor or agent of Owner or its
Affiliates except, as to any of the 

25

items listed in clauses (i)-(iii) above, to the extent the loss or
liability giving rise to such claim was caused directly by Manager’s breach of
its obligations under this Agreement or Manager’s grossly negligent act or
omission, theft, fraud, or willful misconduct or is covered by insurance. 

          10.11.
Actions to be Taken Upon Termination. 

          Upon
a Termination, the following shall be applicable: 

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

          B. Manager
shall, within forty-five (45) days after Termination, prepare and deliver to
Owner a final accounting statement with respect to the Hotel, as more
particularly described in Section 4.01 hereof, along with a statement of any
sums due from Owner to Manager pursuant hereto, dated as of the date of
Termination. Within thirty (30) days of the receipt by Owner of such final
accounting statement, the parties will make whatever cash adjustments are
necessary pursuant to such final statement. The cost of preparing such final accounting
statement shall be a Deduction, unless the Termination occurs as a result of an
Event of Default by either party, in which case the defaulting party shall pay
such cost. Manager and Owner acknowledge that there may be certain adjustments
for which the information will not be available at the time of the final
accounting and the parties agree to readjust such amounts and make the
necessary cash adjustments when such information becomes available; provided,
however, that all accounts shall be deemed final two (2) years after
Termination. 

          C. Manager
shall immediately release and transfer to Owner any of Owner’s funds which are
held or controlled by Manager with respect to the Hotel. 

          D. Manager
shall make available to Owner such books and records respecting the Hotel
(including those from prior years) as will be needed by Owner to prepare the
accounting statements, in accordance with the GAAP, for the Hotel for the year
in which the Termination occurs and for any subsequent year. 

          E. Manager
shall (to the extent permitted by law) assign to Owner or to the new manager
all operating licenses and permits for the Hotel which have been issued in
Manager’s name (including liquor and restaurant licenses, if any); provided
that if Manager has expended any of its own funds in the acquisition of any of
any of such licenses or permits, Owner shall reimburse Manager therefor if it
has not done so already unless such expenditure is a Manager’s Liability. 

26

          F. If this
Agreement is terminated by reason of Owner’s Event of Default, a reasonable
reserve shall be established from Gross Revenues to reimburse Manager for all
costs and expenses incurred by Manager in terminating its employees at the
Hotel, such as severance pay, unemployment compensation, employment relocation
and other employee liability costs arising out of the termination of employment
of Manager’s employees at the Hotel. If Gross Revenues are insufficient to meet
the requirements of such reserve, then Owner shall deliver to Manager, within
ten (10) Business Days after receipt of Manager’s written request therefor, the
sums necessary to establish such reserve. 

          G. If this
Agreement is terminated before the expiration of the Term for any reason other
than an Event of Default by Manager, Manager may submit to Owner for its
approval a budget with respect to expenses anticipated to be incurred by
Manager to terminate its activities at the Hotel. Upon approval of such budget
by Owner, Owner shall deposit the total amount of such budget into the Hotel’s
operating account, and Manager may use such deposit to pay such expenses.
Manager shall provide Owner a final accounting of the foregoing, and any
surplus remaining from such deposit shall be refunded to Owner. 

          H. Owner
may, at its option, (i) provide Manager and/or the employees at the Hotel (or
require Manager to provide to the employees at the Hotel) at least sixty (60)
days’ notice of a Termination and/or (ii) cause the entity which shall succeed
Manager as the operator of the Hotel to offer employment to a sufficient number
of the employees at the Hotel to avoid the occurrence, in connection with such
Termination, of a “plant closing” or “mass layoff” within the meaning of the
WARN Act. If Owner elects to cause the entity which shall succeed Manager as
operator of the Hotel to offer employment to certain of Manager’s employees,
Manager shall not take any action that would cause such employees not to
continue as employees at the Hotel. 

          I. Various
other actions shall be taken, as described in this Agreement, including, but
not limited to, the actions described in Section 4.05 and Section 6.04. 

          J. Manager
shall peacefully vacate and surrender the Hotel to Owner on the date of
termination unless otherwise agreed to by the parties. 

          The
provisions of this Section 10.11 shall survive Termination. 

          10.12.
Waiver. 

          The failure
of either party to insist upon a strict performance of any of the terms or
provisions of this Agreement, or to exercise any option, right or remedy
contained in this Agreement, shall not be construed as a waiver or as a
relinquishment for the future of such term, provision, option, right or remedy,
but the same shall continue and remain in full force and effect. No waiver by
either party of any term or provision hereof shall be deemed to have been made
unless expressed in writing and signed by such party. 

27

          10.13.
Partial Invalidity. 

          If any
portion of any term or provision of this Agreement, or the application thereof
to any person or circumstance shall be invalid or unenforceable, at any time or
to any extent, the remainder of this Agreement, or the application of such term
or provision to persons or circumstances other than those as to which it is
held invalid or unenforceable, shall not be affected thereby, and each term and
provision of this Agreement shall be valid and be enforced to the fullest
extent permitted by law. 

          10.14.
Survival. 

          Except as
otherwise specifically provided in this Agreement, the rights and obligations
of the parties herein shall not survive any Termination. 

          10.15.
Negotiation of Agreement. 

          Owner and
Manager are both business entities having substantial experience with the
subject matter of this Agreement, and each has fully participated in the
negotiation and drafting of this Agreement. Accordingly, this Agreement shall
be construed without regard to the rule that ambiguities in a document are to
be construed against the draftsman. No inferences shall be drawn from the fact
that the final, duly executed Agreement differs in any respect from any
previous draft hereof. 

          10.16.
Estoppel Certificates. 

          Each party
to this Agreement shall at any time and from time to time, upon not less than
fifteen (15) days’ prior notice from the other party, execute, acknowledge and
deliver to such other party, or to any third party specified by such other
party, a statement in writing: (a) certifying that this Agreement is unmodified
and in full force and effect (or if there have been modifications, that the
same, as modified, is in full force and effect and stating the modifications);
and (b) stating to the best knowledge of the certifying party (i) whether or
not there is a continuing Default or Event of Default by the non-certifying
party in the performance or observance of any covenant, agreement or condition
contained in this Agreement, (ii) the amount, if any, of any past due fees or
other past due amounts owed to Manager or Owner; and (iii) whether or not there
are any past due and unpaid obligations with respect to the Hotel, other than
in the ordinary course of business. Such statement shall be binding upon the
certifying party and may be relied upon by the non-certifying party and/or such
third party specified by the non-certifying party as aforesaid. In addition,
upon written request after a Termination, each party agrees to execute and
deliver to the non-certifying party and to any such third party a statement
certifying that this Agreement has been terminated. 

          10.17.
Affiliates. 

          Manager
shall not be entitled to contract with companies that are Affiliates (or
companies in which Manager has an ownership interest if such interest is not
sufficient to make such a company an Affiliate) or with third parties or their
Affiliates that have other contractual relationships with Manager and/or its
Affiliates to provide goods and/or services to the Hotel 

28

without the prior written consent of Owner, unless such transaction is
in the ordinary course of business, is on terms and conditions that are no less
favorable than if the transaction had been entered into with a third party and
is in compliance with the Owner-approved Annual Operating Projections.
Notwithstanding the foregoing, Manager may contract with Affiliates to provide
marketing, accounting and human resource services subject to the conditions
that (i) the costs of such services are included in the Annual Operating Projection
approved by Owner and (ii) at the time Manager submits each Annual Operating
Projection to Owner for its approval, Manager specifically identifies the
services to be provided by Manager’s Affiliates. 

          10.18.
Blocked Persons or Entities. 

          Manager
represents and warrants to Owner and covenants for the benefit of Owner that
(i) neither Manager nor any of its Affiliates or any of officers, directors,
partners or employees of Manager or its Affiliates, or, to its knowledge, the
funding sources for any of the foregoing, is or will be identified on the list
of the U. S. Treasury’s Office of Foreign Asset Control (“OFAC”); (ii) neither
Manager nor any of its Affiliates is or will be directly or indirectly owned or
controlled by the government of any country that is subject to an embargo
imposed by the United States government; and (iii) neither Manager nor any of
its Affiliates is acting or will act on behalf of a government of, or is
involved in business arrangements or other transactions with, any country that
is subject to such an embargo. Manager will notify Owner in writing immediately
upon the occurrence of any event which would render the foregoing
representations and warranties incorrect. 

          10.19.
Restrictions on Operating the Hotel in Accordance with System Standards.

          In the
event of either (i) a Legal Requirement, including an order, judgment or
directive by a court or administrative body which is issued in connection with
any Litigation involving Owner, or (ii) any action taken by a Mortgagee in
connection with a Foreclosure, which in either case restricts or prevents
Manager, in a material and adverse manner, from operating the Hotel in
accordance with System Standards (including without limitation, any restrictions
on expenditures by Manager from the Operating Accounts or from the Reserve,
other than restrictions which are set forth in this Agreement), Manager shall
be entitled, at its option, to terminate this Agreement upon sixty (60) days’
written notice to Owner. The foregoing shall not reduce or otherwise affect the
rights of the parties under Article VIII. 

          10.20.
Counterparts. 

          This
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original, and all of which shall constitute one and the same
instrument. Such executed counterparts may be delivered by facsimile which,
upon transmission to the other party, shall have the same force and effect as
delivery of the original signed counterpart. The submission of an unsigned copy
of this Agreement or an electronic instrument with or without electronic
signature to either party shall not constitute an offer or acceptance. This
Agreement shall become effective and binding only upon execution and delivery of
this Agreement in non-electronic form by both parties in accordance with this
Section. 

29

          10.21.
Entire Agreement. 

          This
Agreement, together with any other writings signed by the parties expressly
stated to be supplemental hereto and together with any instruments to be
executed and delivered pursuant to this Agreement, constitutes the entire
agreement between the parties and supersedes all prior understandings and
writings, and may be changed only by a written non-electronic instrument that
has been duly executed by the non-electronic signature of an authorized
representative of the parties hereto. 

          10.22.
Franchise Agreement. 

          During the
Term of this Agreement, subject to the availability of adequate funds, Manager
shall perform all of the obligations of Owner as “Franchisee” under the
Franchise Agreement to the extent such obligations relate to the management or
operation of the Hotel, and Manager shall not commit any act or omit to take
any action that would cause a default by the Franchisee under the Franchise
Agreement. In the event of any inconsistency between the provisions of this
Agreement and the provisions of the Franchise Agreement, the provisions of the
Franchise Agreement shall prevail. Manager shall send promptly to Owner any and
all notices that Manager receives from the Franchisor with respect to the Hotel
or the Franchise Agreement and shall keep Owner fully informed with respect to
all matters that come to Manager’s attention under the Franchise Agreement.
Notwithstanding the foregoing, Manager shall not have the right to grant any
consent, approval or other right reserved to the Franchisee under the Franchise
Agreement or to make any decision or agreement on behalf of Owner under the
Franchise Agreement. In the event the Franchise Agreement is terminated for any
reason, this Agreement shall also terminate effective as of the date of
termination of the Franchise Agreement, unless the parties hereto agree
otherwise. 

          10.23.
Operation of Other Hotels. 

          During the
Term and except for the Hotel and the other hotels described in Schedule 1,
neither Manager nor any of its Affiliates shall acquire, lease, own, manage or
operate, directly or indirectly, any hotel, inn, motel or other type of lodging
facility, regardless of whether similar to the Hotel or whether operated under
the same or a different brand, that is a Competing Hotel without Owner’s prior
written consent. In addition, if Manager or any of its Affiliates shall
acquire, lease, own, manage or operate, directly or indirectly, any hotel, inn,
motel or other type of lodging facility, regardless of whether similar to the
Hotel or whether operated under the same or a different brand, in the same
geographic area or market as the Hotel, Manager shall not permit unfair
favoritism in the operation and management of such other hotels that would
disadvantage the operation or business of the Hotel (such as, by way of example
only, directing potential Hotel guests to such other hotels instead of to the
Hotel). At Owner’s request, Manager shall provide such information as may
reasonably be requested by Owner to determine if there has been any such unfair
favoritism and, in the event Owner, in its reasonable business judgment,
determines that any such unfair favoritism has occurred, Owner may terminate
this Agreement after notice and right to cure as provided in this Agreement.
For purposes of this Section, a “Competing Hotel” shall mean any hotel, inn,
motel or other type of lodging facility that is within the geographic area
covered by the STR Report for the Hotel that markets directly to or 

30

makes efforts
to attract customers, guests and/or hotel business that would otherwise do
business with the Hotel. 

          10.24.
Waiver of Jury Trial and Punitive Damages. 

          Owner and
Manager each hereby absolutely, irrevocably and unconditionally waive trial by
jury and the right to claim punitive damages in any litigation, action, claim,
suit or proceeding, at law or in equity, arising out of or pertaining to this
Agreement or any other agreement, instrument or document entered into in
connection herewith. 

          10.25 Accounting
Fee. In addition to the Base Management Fee and the Incentive Management
Fee, the Manager shall be paid a fee for centralized accounting services (the
“Accounting Fee”) equal to the amount charged by Manager monthly for all
Manager’s managed hotels based on the type of hotel managed per Accounting
Period during the Term of this Agreement and for one (1) Accounting Period
after the applicable termination of this Agreement with respect to the Hotel.
The Accounting Fee shall be set annually and is intended to be a break-even fee
for the accounting department. The Accounting Fee for 2008 is $1,500 per month.
Such centralized accounting services consist of the processing of daily
accounting transactions necessary for the preparation of the monthly financial
statements, including general ledger, accounts payable, payroll (in conjunction
with the payroll processing firm) and banking. In addition, the following
expenses are included in the annual accounting fee 

	
  

 	
  

 	
  

 
	
  

 	
 a.

 	
 express mail
 and regular postage for items sent specifically to or on behalf of the Hotel,
 which would include accounts payable checks, weekly invoices and accounting
 information to and from the Hotel, payroll checks, payroll reports and other
 documents necessary for the efficient operation of the Hotel; 

 
	
  

 	
  

 	
  

 
	
  

 	
 b.

 	
 telephone
 and fax costs specifically for the Hotel; and 

 
	
  

 	
  

 	
  

 
	
  

 	
 c.

 	
 costs of
 photocopying specifically for the Hotel. 

 

However, Owner is responsible for all payroll processing firm fees
associated with processing the hotel’s payroll as well as any banking service
charges for operating and maintaining the bank account or accounts for the
hotel. Owner shall have use of Manager’s software system (currently Inquire but
changing to M3 Link) at no charge for this Hotel. 

ARTICLE XI

DEFINITION OF TERMS

          11.01.
Definition of Terms. 

          The
following terms when used in this Agreement shall have the meanings indicated: 

31

          “Accounting Period” shall mean a
calendar month. 

          “Accounting Period Statement” shall have
the meaning ascribed to it in Section 4.0l.A. 

          “Accounting Quarter” shall mean three
consecutive Accounting Periods, the first of which begins on the first day of
the Fiscal Year. 

          “Affiliate” shall mean, as to any
Person, any other Person that, directly or indirectly, controls, is controlled
by or is under common control with such Person. For purposes of this
definition, the term “control” (including the terms “controlling,” “controlled
by” and “under common control with”) of a Person means the possession, directly
or indirectly, of the power: (i) to vote more than fifty percent (50%) of the
voting stock or other beneficial interests of such Person; or (ii) to direct or
cause the direction of the management and policies of such Person, whether
through the Ownership of voting stock, by contract or otherwise. 

          “Agreement” shall mean this Management
Agreement between Owner and Manager, including the exhibits attached hereto. 

          “Annual Operating Projection” shall have
the meaning ascribed to it in Section 4.04. 

          “Annual Operating Statement” shall have
the meaning set forth in Section 4.0l.B. 

          “Available Cash Flow” shall mean an
amount, with respect to each Fiscal Year or portion thereof during the Term,
equal to the excess, if any, of the Operating Profit over the Owner’s Priority.

          “Base Management Fee” shall mean an
amount payable to Manager as a Deduction from Gross Revenues for all services
provided by Manager pursuant to this Agreement, except as otherwise expressly
provided herein. The Base Management Fee shall be the percentage of Gross
Revenues shown on Schedule 1 for each Fiscal Year during the Term. 

          “Buildings” shall mean the buildings and
improvements constituting that certain hotel more particularly described on Schedule
1 attached hereto and made a part hereof which is located on the Site. 

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

          “CC&R’s” shall have the meaning
ascribed to it in Section 7.04.A. 

          “Competitive Set” shall mean the group of
hotels which are closest in geographical distance from the Hotel and which are
generally within the same hotel market segment as the Hotel, as described in Schedule
1. If any such hotels, subsequent to the Effective Date, either changes its
chain affiliation or ceases to operate or otherwise ceases to reflect the
general criteria set forth in the first sentence of this definition, Owner and
Manager agree to mutually, reasonably and in good faith, discuss appropriate
changes to the foregoing list of the hotels that shall comprise the Competitive
Set. 

32

          “CPI”, shall mean the Consumer Price
Index for All Urban Consumers (CPI-U) for the U.S. City Average for All Items
(1982-1984=100) published by the Bureau of Labor Statistics, United States Department
of Labor; provided, however, that if such index ceases to be published or is
converted to a different standard or is otherwise revised, the index shall be
adjusted by any then applicable conversion factor, or failing that, by any
published price or cost indices or other published data which are as comparable
as possible to the Index prior to its termination or revision. 

          “Cure Payment” shall have the meaning
set forth in Section 2.02.A. 

          “Deductions” shall have the meaning
ascribed to it in the definition of Operating Profit. 

          “Default” shall mean the occurrence of
any event which, with the lapse of time, the giving of notice or both, would
constitute an Event of Default. 

          “Effective Date” shall have the meaning
ascribed to it in the Preamble. 

          “Environmental Laws” shall have the
meaning ascribed to it in Section 10.08. 

          “Event of Default” shall have the
meaning ascribed to it in Section 8.01. 

          “FF&E” shall mean furniture,
furnishings, fixtures, soft goods, case goods, signage, audio-visual equipment,
kitchen appliances, vehicles, carpeting and equipment, including front desk and
back-of-the-house computer equipment, that meet Owner’s capitalization policy
consistent with GAAP, but shall not include Fixed Asset Supplies or Software. 

          “FF&E Lease” means a lease of any
property other than real property. 

          “Fiscal Year” shall mean a calendar year
commencing on January 1 and ending on December 31; provided, however, the first
fiscal year commences as of the Effective Date and ends at midnight on December
31 of that same calendar year. A partial Fiscal Year between the end of the
last full Fiscal Year and the Termination of this Agreement shall also
constitute a separate Fiscal Year. If Fiscal Year is changed in the future,
appropriate adjustment to this Agreement’s reporting and accounting procedures
shall be made; provided, however, that no such change or adjustment shall alter
the term of this Agreement or in any way reduce the distributions of Operating
Profit or other payments due hereunder. 

          “Fixed Asset Supplies” shall mean items
included within “Property and Equipment” under the Uniform System of Accounts
including, but not limited to, linen, china, glassware, tableware, uniforms,
and similar items, whether used in connection with public space or Guest Rooms.

          “Foreclosure” shall mean any exercise of
the remedies available to a Mortgagee, upon a default under the Mortgage held
by such Mortgagee, which results in a transfer of title to or possession of the
Hotel. The term “foreclosure” shall include, without limitation, any one or
more of the following events, if they occur in connection with a default under
a Mortgage: (i) a 

33

transfer by judicial or non-judicial foreclosure; (ii) a transfer by
deed in lieu of foreclosure; (iii) the appointment by a court of a receiver to
assume possession of the Hotel; (iv) a transfer of either ownership or control
of the Owner, by exercise of a stock pledge or otherwise; (vi) if title to the
Hotel is held by a tenant under a ground lease, an assignment of the tenant’s
interest in such ground lease or (vi) any similar judicial or non-judicial
exercise of the remedies held by the Mortgagee resulting in actual ownership or
control of the Hotel by such Mortgagee or its designee. 

          “Franchise Agreement” shall mean the
franchise agreement described on Schedule 1 attached hereto and made a
part hereof, as the same may be amended or supplemented from time to time. 

          “Gross Revenues” shall mean all revenues
and receipts of every kind derived from operating the Hotel and all departments
and parts thereof, including, but not limited to: income (from both cash and
credit transactions) from rental of Guest Rooms, telephone charges, stores,
offices, exhibit or sales space of every kind; license, lease and concession
fees and rentals (not including gross receipts of licensees, lessees and
concessionaires); income from vending machines; income from parking; health
club membership fees; food and beverage sales; wholesale and retail sales of
merchandise; and service charges; provided, however, that Gross Revenues shall
not include the following: gratuities to employees of the Hotel; federal, state
or municipal excise, sales or use taxes or any other taxes collected directly
from patrons or guests or included as part of the sales price of any goods or
services; proceeds from the sale of FF&E; interest received or accrued with
respect to the funds in the Reserve or the other operating accounts of the
Hotel; any refunds, rebates, discounts and credits of a similar nature, given,
paid or returned in the course of obtaining Gross Revenues or components
thereof; insurance proceeds; condemnation proceeds (other than for a temporary
taking); or any proceeds from any Sale of the Hotel or from the financing or
refinancing of any debt encumbering the Hotel. 

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

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

          “Hazardous Materials” shall have the
meaning ascribed to it in Section 10.08. 

          “Hotel” shall mean the Site together
with the Buildings and all other improvements construed or to be constructed on
the Site pursuant to this Agreement, all FF&E and Fixed Asset Supplies
installed or located on the Site or in the Buildings, and all easements or
other appurtenant rights thereto. 

          “Hotel Lease” shall have the meaning
ascribed to it in Recital B. 

          “Hotel Purchase Contract” shall have the
meaning ascribed to it in Schedule 1. 

          “Impact Fees” shall have the meaning
ascribed to it in Section 4.07.A. 

34

          “Impositions” shall have the meaning
ascribed to it in Section 4.07. 

          “Incentive Management Fee” shall mean an
amount payable to Manager, pursuant to Section 3.01 and Section 4.01, that is
set forth in Schedule 1 of Available Cash Flow in any Fiscal Year (or portion
thereof) after payment to Owner of Owner’s Priority. 

          “Initial Term” shall have the meaning
ascribed to it in Section 2.01. 

          “Inventories” shall mean “Inventories”
as defined in the Uniform System of Accounts, such as, but not limited to,
provisions in storerooms, refrigerators, pantries and kitchens; beverages in
wine cellars and bars; other merchandise intended for sale; fuel; mechanical
supplies; stationery; and other expensed supplies and similar items. 

          “Landlord” shall mean the party
identified as “Landlord” in Schedule 1. 

          “Legal Requirement(s)” shall mean any
federal, state or local law, code, rule, ordinance, regulation or order of any
governmental authority or agency having jurisdiction over the business or
operation of the Hotel or the matters which are the subject of this Agreement,
including, without limitation, the following: (i) any building, zoning or use
laws, ordinances, regulations or orders; and (ii) Environmental Laws. 

          “Litigation” shall mean: (i) any cause
of action (including, without limitation, bankruptcy or other debtor/creditor
proceedings) commenced in a federal, state or local court; or (ii) any claim
brought before an administrative agency or body (for example, without limitation,
employment discrimination claims). 

          “Manager” shall have the meaning
ascribed to it in the Preamble hereto or shall mean any permitted successor or
assign, as applicable. 

          “Manager’s Liability” and “Manager’s Liabilities” shall have the
meanings ascribed to such terms in Section 4.03.B. 

          “Mortgage” shall mean any mortgage, deed
of trust or similar security instrument creating a lien on the Hotel. 

          “Mortgagee” shall mean the holder of any
Mortgage encumbering the Hotel or the Site. 

          “Operating Accounts” shall have the
meaning ascribed to it in Section 4.03.A. 

          “Operating Loss” shall mean a negative
Operating Profit. 

          “Operating Profit” shall mean the excess
of Gross Revenues over the following deductions (“Deductions”) incurred by Manager, on behalf of Owner, in
operating the Hotel: 

                    1.
the cost of sales, including, without limitation, compensation, fringe
benefits, payroll taxes and other costs related to Hotel employees, provided
that the foregoing costs shall 

35

not include salaries and other employee costs of executive personnel of
Manager who do not work at the Hotel on a regular basis, which salaries and
costs shall be Manager’s Liability; 

                    2.
departmental expenses incurred at departments within the Hotel; administrative
and general expenses; the cost of marketing incurred by the Hotel; advertising
and business promotion incurred by the Hotel; heat, light, and power; computer
line charges; and routine repairs, maintenance and minor alterations treated as
Deductions under Section 5.01; 

                    3.
the cost of Inventories and Fixed Asset Supplies consumed in the operation of
the Hotel; 

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

                    5.
all costs and fees of independent professionals or other third parties who are
retained by Manager with the concurrence of Owner to perform services required
or permitted hereunder; 

                    6.
all costs and fees of technical consultants and operational experts who are
retained or employed by Manager with the concurrence of Owner for specialized
services (including, without limitation, quality assurance inspectors) and the
reasonable cost of attendance by employees of the Hotel at training and
manpower development programs sponsored by Manager, provided Owner has approved
attendance at programs and the cost thereof; 

                    7.
the Base Management Fee; 

                    8.
all royalty, marketing fund, reservation, communication support, property
management system and other similar fees payable to the Franchisor under the
Franchise Agreement; 

                    9.
insurance costs and expenses as provided in Section 6.04; 

                    10.
taxes, if any, payable by or assessed against Manager, Owner or Landlord
related to this Agreement or to Manager’s operation of the Hotel and
Impositions (exclusive of Manager’s, Owner’s and Landlord’s income taxes or
franchise taxes and any other similar taxes payable by Manager and all other
taxes, assessments and payments excluded from the definition of Impositions); 

                    11.
transfers to the Reserve required pursuant to Section 5.02; 

                    12.
any costs paid by Manager pursuant to the Franchise Agreement; 

                    13.
payments pursuant to FF&E leases or other forms of financing obtained for
the FF&E located in or connected with the Hotel; and 

36

                    14.
to the extent approved in advance by Owner, such other costs and expenses
incurred by Manager as are specifically provided for elsewhere in this
Agreement or are otherwise reasonably necessary for the proper and efficient
operation of the Hotel, including without limitation, travel expenses or
supervisory personnel of Manager incurred in connection with managing the
Hotel. 

          The term “Deductions” shall not include (a) debt
service payments pursuant to a Mortgage or (b) rental payments under any Hotel
Lease, all of which shall be paid by Owner from its own funds. 

          “Owner” shall have the meaning ascribed
to it in the Preamble or shall mean any successor or assign, as applicable. 

          “Owner’s Priority” shall mean the amount
shown as Owner’s Priority on Schedule 1 attached hereto and made a part
hereof, per Fiscal Year (prorated for any partial Fiscal Year) plus any accrued
but unpaid Owner’s Priority for any prior Fiscal Year. Owner’s Priority for
each Fiscal Year shall be paid to the extent of Operating Profit available in
such Fiscal Year, as provided in Section 3.02 of this Agreement. In the event
of any capital expenditures made with respect to the Hotel after the date of this
Agreement that are in excess of the Reserve, the Owner’s Priority shall be
increased (but not decreased) for the remaining portion of the Fiscal Year in
which such capital expenditures are made and all subsequent Fiscal Years so as
to equal a twelve percent (12%) return on an amount equal to the sum of (i) the
purchase price paid by Owner for the Hotel plus (ii) such excess capital
expenditures. 

          “Performance
Termination Period” shall have the meaning
ascribed to it in Schedule 1. 

          “Performance Termination Threshhold”
shall have the meaning ascribed thereto in Schedule 1. 

          “Person” means an individual (and the
heirs, executors, administrators, or other legal representatives of an
individual), a partnership, a corporation, limited liability company, a
government or any department or agency thereof, a trustee, a trust and any
unincorporated organization. 

          “Prime Rate” shall mean the “prime rate”
of interest announced from time to time in the “Money Rates” section of The Wall
Street Journal. 

          “Prudent Industry Practice” shall mean
the customary practices of the hotel industry in the United States for hotels
comparable to the Hotel. To the extent inconsistent with the requirements of
the Franchise Agreement, such practices shall be conformed to the requirements
of the Franchise Agreement for purposes of this Agreement. 

          “Quarterly
Operating Statement” shall have the meaning set
forth in Section 4.0l.B.

          “Reserve” shall have the meaning
ascribed to it in Section 5.02A. 

37

          “Revenue Data Publication” shall mean
Smith’s STAR Report, a monthly publication distributed by Smith Travel
Research, Inc. of Gallatin, Tennessee, or an alternative source, reasonably
satisfactory to both parties, of data regarding the Revenue Per Available Room
of hotels in the general trade area of the Hotel. If such Smith’s STAR Report
is discontinued in the future, or ceases (in the reasonable opinion of either
Owner or Manager) to be a satisfactory source of data regarding the Revenue Per
Available Room of various hotels in the general trade area of the Hotel, Owner
and Manager shall select an alternative source for such data. If the parties
fail to agree on such alternative source within a reasonable period of time,
either party may terminate this Agreement upon sixty (60) days prior written
notice to the other party. 

          “Revenue Index” shall mean that fraction
that is equal to (a) the Revenue Per Available Room for the Hotel divided by
(b) the average Revenue Per Available Room for the hotels in the Competitive
Set, as set forth in the Revenue Data Publication. Appropriate adjustments to
the Revenue Index acceptable to Owner shall be made in the event of a major
renovation of the Hotel. 

          “Revenue Index Threshold” shall mean the
number shown on Schedule 1 attached hereto and made a part hereof.
However, if the entry of a new hotel into the Competitive Set (or the removal
of a hotel from the Competitive Set) causes significant variations in the Revenue
Index that do not reflect the Hotel’s true position in the relevant market,
appropriate adjustments shall be made to the Revenue Index Threshold by mutual
consent of Owner and Manager each acting in good faith. 

          “Revenue Per Available Room” shall mean
(i) the term “revenue per available room” as defined by the Revenue Data
Publication, or (ii) if the Revenue Data Publication is no longer being used
(as more particularly set forth in the definition of “Revenue Data
Publication”), the aggregate gross room revenues of the hotel in question for a
given period of time divided by the total room nights for such period. If
clause (ii) of the preceding sentence is being used, a “room” shall be an
available hotel guestroom that is keyed as a single unit. 

          “Routine Capital Expenditures” shall
mean certain routine, non-major expenditures which are classified as “capital
expenditures” under generally-accepted accounting principles, and which will be
funded from the Reserve (pursuant to Section 5.02). Routine Capital
Expenditures consist of the following types of expenditures: exterior and
interior painting; resurfacing building walls and floors; resurfacing parking
areas; and miscellaneous similar expenditures. Routine Capital Expenditures are
not non-routine capital expenditures or major repairs or major alterations or
improvements. 

          “Sale of the Hotel” shall mean any sale,
assignment, transfer or other disposition, for value or otherwise, voluntary or
involuntary, of the Site and/or the Hotel or any interest therein, in whole or
part. For purposes of this Agreement, a Sale of the Hotel shall also include a
lease (or sublease) of all or substantially all of the Hotel or Site or any
interest therein. 

          “SEC Filing Period” shall mean such
period of time (a) (not to exceed thirty (30) days) after the close of each
Fiscal Year within which Owner must receive the Annual Operating Statement from
Manager with respect to such Fiscal Year and (b) (not to exceed twenty (20) 

38

days) after the close of each calendar quarter of a Fiscal Year within
which Owner must receive the Quarterly Operating Statement from Manager with
respect to such quarter, in each case in order for Owner to have a reasonable
period of time within which to prepare and make all required filings with the
Securities and Exchange Commission and other applicable governmental agencies. 

          “Site” shall mean the real property
described on Exhibit A attached hereto and made a part hereof. 

          “Software” shall mean all computer
software and accompanying documentation (including all future upgrades,
enhancements, additions, substitutions and modifications thereof), other than
computer software which is generally commercially available, which are used by
Manager in connection with operating or otherwise providing services to the
Hotel. 

          “Specially Designated National or Blocked Person”
shall mean (i) a person designated by the U.S. Department of Treasury’s Office
of Foreign Assets Control from time to time as a “specially designated national
or blocked person” or similar status, (ii) a person described in Section 1 of
U.S. Executive Order 13224 issued on September 23, 2001, or (iii) a person
otherwise identified by government or legal authority as a person with whom
Manager or its Affiliates are prohibited from transacting business. Currently,
a listing of such designations and the text of the Executive Order are
published under the internet website address www.ustreas.gov/offices/enforcement/ofac.

          “Subordination Agreement” shall have the
meaning ascribed to it in Section 7.03. 

          “Subsequent Owners” shall have the
meaning ascribed to it in Section 7.03. 

          “System” shall have the meaning set
forth in the Franchise Agreement. 

          “System Standards” shall mean any one or
more (as the context requires) of the following three (3) categories of
standards: (i) operational standards (for example, services offered to guests,
quality of food and beverages, cleanliness, staffing and employee compensation
and benefits, frequent traveler programs and other similar programs; (ii)
physical standards (for example, quality of the hotel, FF&E, and Fixed
Asset Supplies, frequency of FF&E replacements, etc.); and (iii) technology
standards (for example, those relating to software, hardware,
telecommunications, systems security and information technology); each of such
standards shall be the standard which is generally prevailing or in the process
of being implemented at other hotels in the System represented by the Franchise
Agreement. 

          “Term” shall have the meaning ascribed
to it in Section 2.01. 

          “Termination” shall mean the expiration
or sooner cessation of this Agreement. 

          “Trade Name” shall mean any name,
whether informal (such as a fictitious name or d/b/a) or formal (such as the
full legal name of a corporation or partnership) which is used to identify an
entity. 

39

          “Uniform System of Accounts” shall mean
the Uniform System of Accounts for the Lodging Industry, Ninth Revised Edition,
1996, as published by the Educational Institute of the American Hotel &
Motel Association, as revised. 

          “WARN Act” shall mean the Worker
Adjustment and Retraining Notification Act, 29 U.S.C. 2101 et seq.  

          “Working Capital” shall mean funds that
are necessary for the day-to-day operation of the business of the Hotel,
including, without limitation, amounts sufficient for the maintenance of change
and petty cash funds, amounts deposited in operating bank accounts,
receivables, amounts deposited in payroll accounts, prepaid expenses and funds
required to maintain Inventories, less accounts payable and accrued current
liabilities. 

ARTICLE XII

SUPPLEMENTAL PROVISIONS

          All of the
terms, conditions, representations, warranties, covenants and other provisions,
if any, set forth in the supplemental provisions attached hereto as Schedule
2 (the ‘‘Supplemental Provisions’’) are hereby incorporated into
this Agreement and shall be considered a part hereof. In the event of any
conflict or inconsistency between the Supplemental Provisions and the other
provisions of this Agreement, the Supplemental Provisions shall control.

40

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

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 OWNER:

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 APPLE TEN
 HOSPITALITY MANAGEMENT, INC., a

 
	
  

 	
 Virginia
 corporation

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Justin
 G. Knight

 	
  

 
	
  

 	
  

 	

 

 	
  

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Name:

 	
 Justin G.
 Knight

 	
  

 
	
  

 	
  

 	

 

 	
  

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Title: 

 	
 President

 	
  

 
	
  

 	
  

 	

 

 	
  

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 MANAGER:

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 MHH
 MANGEMENT, LLC

 	
  

 
	
  

 	
 a Georgia
 limited liability company

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 McKibbon
 Hotel Group, Inc., its Manager

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 By:

 	
 /s/ Vann M.
 Herring

 	
  

 
	
  

 	
  

 	
  

 	

 

 	
  

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Name:

 	
 Vann M.
 Herring

 	
  

 
	
  

 	
  

 	
  

 	

 

 	
  

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Title: 

 	
 President

 	
  

 
	
  

 	
  

 	
  

 	

 

 	
  

 

Exhibit B – p. 1

SCHEDULE 1

HOTEL SPECIFIC DATA

	
  

 	
  

 
	
 1.       Description
 of Hotel: That certain hotel known as the Hampton Inn and
 Suites-Winston-Salem/University Area, located at 309 Summit Square Ct,
 Winston-Salem, North Carolina, 27105, containing 94 guest rooms, a lobby,
 meeting rooms, administrative offices, parking and certain amenities and
 related facilities located on the Site, including the following:

 
	
  

 	
  

 
	
  

 	
 a.          Number
 of Guest Rooms: 94

 
	
  

 	
  

 
	
  

 	
 b.          Other
 Improvements/Amenities: 1,064 sq. ft. meeting room space; full service
 business center; indoor saltwater swimming pool; whirlpool; exercise room;
 wireless high speed internet access

 
	
  

 	
  

 
	
 2.

 	
 Franchise Agreement: Franchise Agreement
 between Apple Ten Hospitality Management, Inc. and Hampton Inns Franchise
 LLC, dated March 15, 2011. 

 
	
  

 	
  

 
	
 3.

 	
 Competitive
 Set: 

 
	
  

 	
  

 
	
  

 	
 Clarion
 Collection Hotel Sundance Plaza 

 
	
  

 	
 Residence
 Inn Winston Salem 

 
	
  

 	
 Courtyard
 Winston Salem University 

 
	
  

 	
 Holiday Inn
 Winston Salem University Parkway 

 
	
  

 	
 Hampton Inn
 Winston Salem I40 Hanes Mall 

 
	
  

 	
 Comfort Inn
 Winston Salem 

 
	
  

 	
  

 
	
 4.

 	
 Landlord:
 Apple Ten North Carolina, L.P. 

 
	
  

 	
  

 
	
 5.

 	
 Base
 Management Fee: Three percent (3%)

 
	
  

 	
  

 
	
 6.

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

 
	
  

 	
  

 
	
  

 	
 b.
 Owner’s Priority: $1,320,000 (12% of purchase price) 

 
	
  

 	
  

 
	
 7.

 	
 Performance
 Termination Period: Any 12 consecutive Accounting
 Periods. 

 
	
  

 	
  

 
	
 8.

 	
 Revenue
 Index Threshold: 1.00 

 
	
  

 	
  

 
	
 9.

 	
 Hotel
 Purchase Contract: N/A 

 
	
  

 	
  

 
	
 10.

 	
 Expiration
 Date of Term: 5 years from the Effective Date [March
 14, 2016] 

 

2

11.          State
in which Manager is Organized: Georgia 

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

13.          Reserved.

14.          Termination
Fee: Equals the average monthly amount of the Base Management Fee and
Incentive Management Fee during the immediately preceding twelve (12) month
period (“Monthly Fee Average”), multiplied by the lesser of (i) three (3) and
(ii) the total number of months remaining under the Term. If, at the time of
such termination, less than twelve (12) months have passed under the Agreement,
the Monthly Fee Average shall be equal to the monthly average of the Base
Management Fee and Incentive Management Fee during such period and shall be
multiplied by (i) the total number of months remaining during the first year
under the Agreement plus (ii) three (3). 

15.          Initial
Working Capital: $25,000 

16.          Capital
Project Fee: McKibbon will also serve as purchasing agent in connection
with renovation of properties when renovation is required by franchisor or
otherwise advisable in discretion of the Owner, including contract negotiation
with vendors and oversight of installation of purchases, if McKibbon and Owner
mutually agree to the terms and conditions of such engagement. 

3

SCHEDULE 2 

1. Franchise Agreement. [FOR MARRIOTT BRANDS:] During the Term
of this Agreement, subject to the availability of adequate funds, Manager shall
perform all of the obligations of Owner as “Franchisee” under the Franchise
Agreement to the extent such obligations relate to the management or operation
of the Hotel, including, without limitation, the obligations of “Franchisee”
under Sections XIII (Accounts and Receipts) and XIV (Insurance) of the
Franchise Agreement, and Manager shall not commit any act or omit to take any
action that would cause a default by the Franchisee under the Franchise
Agreement. In the event of any inconsistency between the provisions of this
Agreement and the provisions of the Franchise Agreement, the provisions of the
Franchise Agreement shall prevail. Manager shall send promptly to Owner any and
all notices that Manager receives from the Franchisor with respect to the Hotel
or the Franchise Agreement and shall keep Owner fully informed with respect to
all matters that come to Manager’s attention under the Franchise Agreement.
Likewise, Owner shall send promptly to Manager any and all notices that Owner
receives from the Franchisor with respect to the Hotel or the Franchise
Agreement that would require action or compliance on the part of Manager.
Notwithstanding the foregoing, Manager shall not have the right to grant any
consent, approval or other right reserved to the Franchisee under the Franchise
Agreement or to make any decision or agreement on behalf of Owner under the
Franchise Agreement. In the event the Franchise Agreement is terminated for any
reason, this Agreement shall also terminate effective as of the date of
termination of the Franchise Agreement, unless the parties hereto agree
otherwise. 

[FOR HILTON BRANDS:] During the Term of this Agreement, subject to the
availability of adequate funds, Manager shall perform all of the obligations of
Owner as “Licensee” under the Franchise Agreement to the extent such
obligations relate to the management or operation of the Hotel, including,
without limitation, the obligations of “Licensee” under Paragraphs 6, 7 and 8
of the Franchise Agreement, and Manager shall not commit any act or omit to
take any action that would cause a default by the Licensee under the Franchise
Agreement. In the event of any inconsistency between the provisions of this
Agreement and the provisions of the Franchise Agreement, the provisions of the
Franchise Agreement shall prevail. Manager shall send promptly to Owner any and
all notices that Manager receives from the Franchisor with respect to the Hotel
or the Franchise Agreement and shall keep Owner fully informed with respect to
all matters that come to Manager’s attention under the Franchise Agreement.
Notwithstanding the foregoing, Manager shall not have the right to grant any
consent, approval or other right reserved to the Licensee under the Franchise
Agreement or to make any decision or agreement on behalf of Owner under the
Franchise Agreement. In the event the Franchise Agreement is terminated for any
reason, this Agreement shall also terminate effective as of the date of
termination of the Franchise Agreement, unless the parties hereto agree
otherwise. 

2. Accounting Period. For purposes of this Agreement, the term
“Accounting Periods” shall mean a calendar month, except that the first
Accounting Period shall begin on the Effective Date and shall end on the last
day of the calendar month in which the Effective Date occurs. 

4

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

[FOR HILTON BRANDS:] For purposes of this Agreement, the term “Fiscal
Year” shall mean, initially, the period beginning as of the Effective Date and
ending at midnight on the following December 31 and thereafter each calendar
year during the Term. Any partial Fiscal Year between the Effective Date and
the commencement of the first full Fiscal Year shall constitute a separate
Fiscal Year and shall be deemed the first Fiscal Year. A partial Fiscal Year
between the end of the last full Fiscal Year and the Termination of this
Agreement shall also constitute a separate Fiscal Year. 

5

EXHIBIT A

Legal Description

the
Grantee in fee simple, all that certain lot or parcel of land situated in the
City of Winston-Salem, Winston
Township, Forsyth County, North Carolina and more particularly described as
follows:

	
  

 	
  

 
	
  

 	
 BEING KNOWN AND DESIGNATED as Lot 1, as shown on the plat of HANES MILL
 POINTE, as recorded in Plat Book 53, Page 61, in the Office of the Register
 of Deeds of Forsyth County, North Carolina, reference to which is hereby made
 for a more particular description.

 

6

EXHIBIT B

Service Contracts

	
  

 	
  

 
	
 •

 	
 Elevator Contract (Otis
 Elevator)

 
	
 •

 	
 Telephone Contract
 (Windstream)

 
	
 •

 	
 Cable (Time Warner Cable

 
	
 •

 	
 Music On Hold Service
 Contract (DMX)

 
	
 •

 	
 Alarm Monitoring Contract
 (Piedmont Protective Services)

 
	
 •

 	
 Landscaping Contract
 (Premier Landscaping)

 
	
 •

 	
 Dumpster Rental Contract
 (Republic Services)

 

7Exhibit 10.10

FRANCHISE LICENSE AGREEMENT

HAMPTON INN & SUITES WINSTON-SALEM/UNIVERSITY AREA

(Winston-Salem, North Carolina)

Ex 10.10
Franchise Agreement - Winston Salem HI&S

November 2010 - Hampton

TABLE OF CONTENTS

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 1. DEFINITIONS

 	
  

 	
 1

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 2. GRANT OF
 LICENSE

 	
  

 	
 5

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 a.

 	
 Non-Exclusive License

 	
  

 	
 5

 
	
  

 	
 b.

 	
 Reserved Rights

 	
  

 	
 5

 
	
  

 	
 c.

 	
 Restricted Area Provision

 	
  

 	
 5

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 3. OUR
 RESPONSIBILITIES

 	
  

 	
 5

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 a.

 	
 Training

 	
  

 	
 5

 
	
  

 	
 b.

 	
 Reservation Services

 	
  

 	
 5

 
	
  

 	
 c.

 	
 Consultation

 	
  

 	
 6

 
	
  

 	
 d.

 	
 Marketing

 	
  

 	
 6

 
	
  

 	
 e.

 	
 Inspections/Compliance Assistance

 	
  

 	
 6

 
	
  

 	
 f.

 	
 Manual

 	
  

 	
 6

 
	
  

 	
 g.

 	
 Equipment and Supplies

 	
  

 	
 6

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4. PROPRIETARY
 RIGHTS

 	
  

 	
 7

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 5. TRADE NAME,
 USE OF THE MARKS

 	
  

 	
 7

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 a.

 	
 Trade Name

 	
  

 	
 7

 
	
  

 	
 b.

 	
 Use of Trade Name and Marks

 	
  

 	
 7

 
	
  

 	
 c.

 	
 Trademark Disputes

 	
  

 	
 7

 
	
  

 	
 d.

 	
 Web Sites

 	
  

 	
 7

 
	
  

 	
 e.

 	
 Covenant

 	
  

 	
 8

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 6. YOUR
 RESPONSIBILITIES

 	
  

 	
 8

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 a.

 	
 Operational and Other
 Requirements

 	
  

 	
 8

 
	
  

 	
 b.

 	
 Hotel Refurbishment

 	
  

 	
 11

 
	
  

 	
 c.

 	
 Staff and Management

 	
  

 	
 11

 
	
  

 	
 d.

 	
 Obligations of Prior Licensee

 	
  

 	
 12

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 7. FEES

 	
  

 	
 12

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 a.

 	
 Monthly Fees

 	
  

 	
 12

 
	
  

 	
 b.

 	
 Calculation and Payment of Fees

 	
  

 	
 12

 
	
  

 	
 c.

 	
 Room Addition Fee

 	
  

 	
 12

 
	
  

 	
 d.

 	
 Other Fees

 	
  

 	
 13

 
	
  

 	
 e.

 	
 Taxes

 	
  

 	
 13

 
	
  

 	
 f.

 	
 Application of Fees

 	
  

 	
 13

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 8. REPORTS,
 RECORDS, AUDITS, AND PRIVACY

 	
  

 	
 13

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 a.

 	
 Reports

 	
  

 	
 13

 
	
  

 	
 b.

 	
 Maintenance of Records

 	
  

 	
 13

 
	
  

 	
 c.

 	
 Audit

 	
  

 	
 13

 
	
  

 	
 d.

 	
 Ownership of Information

 	
  

 	
 14

 
	
  

 	
 e.

 	
 Privacy and Data Protection

 	
  

 	
 14

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 9. INDEMNITY

 	
  

 	
 14

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 10. NOTICE OF
 INTENT TO MARKET

 	
  

 	
 15

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 11. TRANSFER

 	
  

 	
 15

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 a.

 	
 Our Transfer

 	
  

 	
 15

 
	
  

 	
 b.

 	
 Your Transfer

 	
  

 	
 15

 

Ex 10.10
Franchise Agreement - Winston Salem HI&S

November 2010 - Hampton

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 12. CONDEMNATION
 AND CASUALTY

 	
  

 	
 19

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 a.

 	
 Condemnation

 	
  

 	
 19

 
	
  

 	
 b.

 	
 Casualty

 	
  

 	
 19

 
	
  

 	
 c.

 	
 No Extensions of Term

 	
  

 	
 19

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 13. TERM OF
 LICENSE

 	
  

 	
 19

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 14. TERMINATION
 BY US

 	
  

 	
 19

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 a.

 	
 Termination with Opportunity to
 Cure

 	
  

 	
 19

 
	
  

 	
 b.

 	
 Immediate Termination by Us

 	
  

 	
 20

 
	
  

 	
 c.

 	
 Suspension/Interim Remedies by Us

 	
  

 	
 21

 
	
  

 	
 d.

 	
 Liquidated Damages upon
 Termination

 	
  

 	
 21

 
	
  

 	
 e.

 	
 Actual Damages Under Special
 Circumstances

 	
  

 	
 22

 
	
  

 	
 f.

 	
 Your Obligations upon Termination
 or Expiration

 	
  

 	
 22

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 15. RELATIONSHIP
 OF PARTIES

 	
  

 	
 23

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 a.

 	
 No Agency Relationship

 	
  

 	
 23

 
	
  

 	
 b.

 	
 Notices to Public Concerning Your
 Independent Status

 	
  

 	
 23

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 16. MISCELLANEOUS

 	
  

 	
 23

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 a.

 	
 Severability and Interpretation

 	
  

 	
 23

 
	
  

 	
 b.

 	
 Governing Law, Jurisdiction and
 Venue

 	
  

 	
 24

 
	
  

 	
 c.

 	
 Exclusive Benefit

 	
  

 	
 24

 
	
  

 	
 d.

 	
 Entire Agreement/Amendment/Waiver

 	
  

 	
 24

 
	
  

 	
 e.

 	
 Consent; Business Judgment

 	
  

 	
 25

 
	
  

 	
 f.

 	
 Notices

 	
  

 	
 25

 
	
  

 	
 g.

 	
 General Release

 	
  

 	
 25

 
	
  

 	
 h.

 	
 Remedies Cumulative

 	
  

 	
 25

 
	
  

 	
 i.

 	
 Economic Conditions Not a Defense

 	
  

 	
 25

 
	
  

 	
 j.

 	
 Representations and Warranties

 	
  

 	
 25

 
	
  

 	
 k.

 	
 Counterparts

 	
  

 	
 26

 
	
  

 	
 l.

 	
 Restricted Persons and
 Anti-bribery Representations and Warranties

 	
  

 	
 26

 
	
  

 	
 m.

 	
 Attorneys’ Fees and Costs

 	
  

 	
 27

 
	
  

 	
 n.

 	
 Interest

 	
  

 	
 27

 
	
  

 	
 o.

 	
 Successors and Assigns

 	
  

 	
 27

 
	
  

 	
 p.

 	
 Our Delegation of Rights and Responsibility

 	
  

 	
 27

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 17. WAIVER OF
 JURY TRIAL AND PUNITIVE DAMAGES

 	
  

 	
 27

 

ATTACHMENT A - PERFORMANCE CONDITIONS: CHANGE OF OWNERSHIP

ATTACHMENT B - RIDER TO FRANCHISE LICENSE AGREEMENT

EXHIBIT A – RESTRICTED AREA MAP

Ex 10.10 Franchise Agreement - Winston Salem HI&S

November 2010 - Hampton

FRANCHISE LICENSE AGREEMENT

This Franchise License Agreement is dated as of the Effective Date
between Hampton Inns Franchise LLC (“we,” “us,” “our” or “Licensor”) and the
licensee entity (“you,” “your” or “Licensee”) set forth in the Rider attached
as Attachment B. 

INTRODUCTION

We are a subsidiary
of Hilton Worldwide. Hilton Worldwide and its Affiliates own, license, lease,
operate, manage and provide various services for the Network. We are authorized
to grant licenses for selected, first-class, independently owned or leased
hotel properties, to operate under the Licensed Brand. You have expressed a
desire to enter into this Agreement with us to obtain a license to use the
Licensed Brand in the operation of a hotel at the address or location described
in the Rider.

NOW, THEREFORE, in
consideration of the premises and the undertakings and commitments of each
party to the other party in this Agreement the parties agree as follows:

THE AGREEMENT

1.
Definitions

The following
capitalized terms will have the meanings set forth after each term:

“Affiliate”
means any natural person or firm, corporation,
partnership, limited liability company, association, trust or other entity
which, directly or indirectly, controls, is controlled by, or is under common
Control with, the subject entity. 

“Agreement”
means this Franchise License Agreement, including any exhibits, attachments and
addenda.

“Applicable
Laws” means all public laws, statutes, ordinances, orders, rules,
regulations, permits, licenses, certificates, authorizations, directions and
requirements of all governments and governmental authorities having
jurisdiction over the Hotel or over Licensee to operate the Hotel, which, now
or hereafter, may apply to the construction, renovation, completion, equipping,
opening and operation of the Hotel, including, but not
limited to, Title III of the Americans with Disabilities Act, 42 U.S.C. §
12181, et seq., and 28 C.F.R. Part 36.

“Change of
Ownership Application” means the application submitted to us by
you or the Transferee Licensee for a new franchise license agreement in
connection with a Change of Ownership Transfer.

“Change of
Ownership Transfer” means any proposed Transfer that results
in a change of Licensee or a change in Control of Licensee, the Hotel, or the
Hotel Site and is not otherwise permitted by this Agreement, all as set out in
Subparagraph 11.b.(3).

“Competitor”
means any individual or entity that at any time during the License Term,
whether directly or through an Affiliate, owns in whole or in part, or is the
licensor or franchisor of, a hotel brand or trade name that, in our sole
business judgment, competes with the System or any System Hotel or Network
Hotel. 

“Control”
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of an entity, or of the power to
veto major policy decisions of an entity, whether through the ownership of
voting securities, by contract, or otherwise.

1

Ex 10.10
Franchise Agreement - Winston Salem HI&S

November 2010 - Hampton

“Designs”
means your plans, layouts, specifications, drawings and designs for the
proposed furnishings, fixtures, equipment, signs and décor of the Hotel.

“Effective
Date” means the Effective Date specified in the Rider.

“Entities”
means our present or future Affiliates and direct or indirect owners.

“Equity
Interest” means any direct or indirect legal or beneficial interest
in the Licensee, the Hotel and/or the Hotel Site. 

“Equity Owner”
means the direct or indirect owner of an Equity Interest. 

“Force
Majeure” as used in Attachment A means an event causing a delay in
your performance of any duties under Attachment A, or any non-performance of
such duties, that is not your fault or within your reasonable control. Force
Majeure includes, but is not limited to: fire; floods; natural disasters; Acts
of God; war; civil commotion; terrorist acts; any governmental act or
regulation; and any other similar event beyond your reasonable control. Force
Majeure does not include your own financial inability to perform, inability to
obtain financing, inability to obtain permits or any other similar events
unique to you or the Hotel, or to general economic downturn or conditions.

“General
Manager”
has the meaning set forth in Subparagraph 6.c.

“Gross
Receipts Tax” means any gross receipts, sales, use, excise, value
added or any similar tax.

“Gross Rooms
Revenue” has the meaning set forth in Subparagraph 7.b.

“Guarantor”
means the person or entity that guarantees your obligations under this
Agreement or any of Your Agreements.

“Guest Rooms”
means each rentable unit in the Hotel generally used for overnight guest
accommodations, the entrance to which is controlled by the same key; provided
that adjacent rooms with connecting doors that can be locked and rented as
separate units are considered separate Guest Rooms.

“Hilton
Worldwide” means Hilton Worldwide, Inc., a Delaware corporation.

“Hotel”
means the property you will operate under this Agreement and includes all
structures, facilities, appurtenances, furniture, fixtures, equipment, and
entry, exit, parking and other areas located on the Hotel Site we have approved
for your business or located on any land we approve in the future for
additions, signs, parking or other facilities.

“Hotel Site”
means the real property on which the Hotel is located or to be located, as
approved by us. 

“Indemnified
Parties” means us and the Entities and our respective predecessors,
successors and assigns, and the members, officers, directors, employees,
managers, and agents of each of us.

“Information”
means all information we obtain from you or about the Hotel or its guests or
prospective guests under this Agreement or under any agreement ancillary to
this Agreement, including, but not limited to, agreements relating to the
computerized reservation, revenue management, property management, and other
systems we provide or require, or otherwise related to the Hotel. Information
includes, but is not limited to, Operational Information, Proprietary
Information, and Personal Information.

“Interim
Remedy” has the meaning set forth in Subparagraph 14.c.

“License”
has the meaning set forth in Subparagraph 2.a. 

2

Ex 10.10
Franchise Agreement - Winston Salem HI&S

November 2010 - Hampton

“License Term”
means the period from the Effective Date through the expiration of this
Agreement on the date set forth in the Rider, unless terminated earlier under
the terms of this Agreement. 

“Licensed
Brand” means the brand name set forth in the Rider.

“Linked Sites”
has the meaning set forth in Subparagraph 5.d.

“Liquidated
Damages” has the meaning set forth in Subparagraph 14.d.

“Management
Company” has the meaning set forth in Subparagraph 6.c.

“Manual”
means all written compilations of the Standards. The Manual may take the form
of one or more of the following: one or more loose leaf or bound volumes;
bulletins; notices; videos; CD-ROMS and/or other electronic media; online
postings; e-mail and/or electronic communications; facsimiles; or, any other
medium capable of conveying the Manual’s contents.

“Marks”
means the Licensed Brand and all other service marks, copyrights, trademarks,
trade dress, logos, insignia, emblems, symbols and designs (whether registered
or unregistered), slogans, distinguishing characteristics, and trade names used
in the System.

“Monthly
Program Fee” means the fee we require from you in
Subparagraph 7.a., which is set forth in the Rider.

“Monthly
Royalty Fee” means the fee we require from you in Subparagraph 7.a.,
which is set forth in the Rider.

“Network”
means the hotels, inns, conference centers, timeshare properties and other
operations Hilton Worldwide and its subsidiaries own, license, lease, operate
or manage now or in the future.

“Network
Hotel” means any hotel, inn, conference center, timeshare property
or other similar facility within the Network.

“Opening Date”
means the day on which we authorize you to make available the facilities, Guest
Rooms or services of the Hotel to the general public under the Licensed Brand.

“Operational
Information” means all information concerning Gross Rooms Revenue,
other revenues generated at the Hotel, room occupancy rates, reservation data
and other financial and non-financial information we require.

“Other
Business(es)” means any business activity we or the Entities engage
in, other than the licensing of the Hotel. 

“Other Hotels”
means any hotel, inn, lodging facility, conference center or other similar
business, other than a System Hotel or a Network Hotel.

“Personal
Information” means any information that: (i) can be used (alone or when used in
combination with other information within your control) to identify, locate or
contact an individual; or (ii) pertains in any way to an identified or
identifiable individual. Personal Information can be in any media or format,
including computerized or electronic records as well as paper-based files. 

“PIP”
means product improvement plan.

“PIP Fee” means
the fee we charge for creating a PIP.

“Plans”
means your plans, layouts, specifications, and drawings for the Hotel.

3

Ex 10.10
Franchise Agreement - Winston Salem HI&S

November 2010 - Hampton

“Pre-Opening
Liquidated Damages” has the meaning set forth in Attachment A. 

“Principal
Mark” is the Mark identified as the Principal Mark in the Rider.

 “Privacy Laws” means any international, national,
federal, provincial, state, or local law, code or regulation that regulates the
processing of Personal Information in any way, including, but not limited to,
national data protection laws, laws regulating marketing communications and/or
electronic communications, information security regulations and security breach
notification rules. 

 “Proprietary Information” means all
information or materials concerning the methods, techniques, plans,
specifications, procedures, information, systems and knowledge of and
experience in the development, operation, marketing and licensing of the
System, whether developed by us, you, or a third party.

“Publicly
Traded Equity Interest” means  (i) any Equity Interest that is traded on any securities
exchange or is quoted in any publication or electronic reporting service
maintained by the National Association of Securities Dealers, Inc., or any of
its successors or (ii) any Equity Interests sold in any offering under the Securities
Act of 1933, as amended, so long as such Equity Interests are beneficially held
by no less than one hundred (100) unrelated persons or entities. 

“Quality
Assurance Re-Evaluation Fee” has the meaning set forth in
Subparagraph 3.e.

 “Reports” mean daily, monthly, quarterly and
annual operating statements, profit and loss statements, balance sheets, and
other financial and non-financial reports we require.

“Reservation
Service” means the reservation service we designate
in the Standards for use by System Hotels. 

“Restricted
Area Provision” has the meaning set forth in the Rider. 

“Rider” is
attached as Attachment B.

“Room
Addition” has the meaning set forth in Subparagraph 7.c.

“Room
Addition Fee” is the fee you must pay when submitting the Room
Addition request.

“Site” means
domain names, the World Wide Web, the Internet, computer network/distribution
systems, or other electronic communications sites.

“Standards”
means all standards, specifications, requirements, criteria, and policies that
have been and are in the future developed and compiled by us for use by you in
connection with the design, construction, renovation, refurbishment,
appearance, equipping, furnishing, supplying, opening, operating, maintaining,
marketing, services, service levels, quality, and quality assurance of System
Hotels, including the Hotel, and for hotel advertising and accounting, whether
contained in the Manual or set out in this Agreement or other written
communication.

“System”
means the elements, including know-how, that we designate to distinguish hotels
operating worldwide under the Licensed Brand (as may in certain jurisdictions
be preceded or followed by a supplementary identifier such as “by Hilton”) that
provide to the consuming public a similar, distinctive, high quality hotel
service. The System currently includes: the Licensed Brand, the Marks, the
Trade Name, and the Standards; access to a reservation service; advertising,
publicity and other marketing programs and materials; training programs and
materials; and programs for our inspecting the Hotel and consulting with you. 

“System
Hotels” means hotels operating under the System using the Licensed
Brand name. 

4

Ex 10.10
Franchise Agreement - Winston Salem HI&S

November 2010 - Hampton

“Trademark
Liquidated Damages” has the meaning set forth in Attachment A.

“Trade Name”
means the name of the Hotel set forth in the Rider.

“Transfer”
means in all its forms, any sale, lease, assignment, spin-off, transfer, or
other conveyance of a direct or indirect legal or beneficial interest. 

“Transferee
Licensee” means the proposed new licensee resulting
from a Transfer.

“Your
Agreements” means any other agreement between you and us or any of
the Entities related to this Agreement, the Hotel and/or the Hotel Site.

2.
Grant of License

          a. Non-Exclusive License. We
grant to you and you accept a limited, non-exclusive License to use the Marks
and the System during the License Term at, and in connection with, the
operation of the Hotel in accordance with the terms of this Agreement. You
agree to identify and operate the Hotel as a System Hotel in accordance with
the Marks, the System and this Agreement only as and when authorized by us. You
acknowledge and agree that you are not acquiring any rights other than the
non-exclusive right to use the System to operate the Hotel under the Licensed
Brand at the Hotel Site under this Agreement and in accordance with the terms
of this Agreement. 

          b.
Reserved Rights. This Agreement does not limit our right, or the right of the Entities,
to own, license or operate any Other Business of any nature, whether in the
lodging or hospitality industry or not, and whether under the Licensed Brand, a
competitive brand, or otherwise. We and the Entities have the right to engage
in any Other Businesses, even if they compete with the Hotel, the System, or
the Licensed Brand, and whether we or the Entities start those businesses, or
purchase, merge with, acquire, are acquired by, come under common ownership
with, or associate with, such Other Businesses. We may also: (a) modify the
System by adding, altering, or deleting elements of the System; (b) use or
license to others all or part of the System; (c) use the facilities, programs,
services and/or personnel used in connection with the System in Other
Businesses; and (d) use the System, the Licensed Brand and the Marks in the
Other Businesses. You acknowledge and agree that you have no rights to, and
will not make any claims or demands for, damages or other relief arising from
or related to any of the foregoing activities, and you acknowledge and agree
that such activities will not give rise to any liability on our part,
including, but not limited to, liability for claims for unfair competition,
breach of contract, breach of any applicable implied covenant of good faith and
fair dealing, or divided loyalty. 

          c.
Restricted Area Provision. The
Restricted Area Provision is set forth in the Rider.

3.
Our Responsibilities

          We
have the following responsibilities to you under this Agreement. We reserve the
right to fulfill some or all of these responsibilities through one of the
Entities or through unrelated third parties, in our sole business judgment. We
may require you to make payment for any resulting services or products directly
to the provider.

          a.
Training. We
may specify certain required and optional training programs and provide these
programs at various locations. We may charge you for required training services
and materials and for optional training services and materials we provide to
you. You are responsible for all travel, lodging and other expenses you or your
employees incur in attending these programs.

          b.
Reservation Services. We will furnish you with the Reservation Service. This service will be
furnished to you on the same basis as it is furnished to other System Hotels,
subject to the provisions of Subparagraph 14.c. below.

5

Ex 10.10
Franchise Agreement - Winston Salem HI&S

November 2010 - Hampton

          c.
Consultation.
We may, at our sole option, offer consultation services and advice in areas
such as operations, facilities, and marketing on the same basis as other System
Hotels. We may establish fees in advance, or on a project-by-project basis, for
any consultation service or advice you request. 

          d.
Marketing.
Periodically, we will publish (either in hard copy or electronic form or both)
and make available to the traveling public a directory that includes System
Hotels, including the Hotel. Additionally, we will include the Hotel, or cause
the Hotel to be included, where applicable, in advertising of System Hotels and
in international, national and regional marketing programs offered by us,
subject to and in accordance with our general practice for System Hotels. 

          We
will use your Monthly Program Fee to pay for various programs to benefit the
System, including, but not limited to: (i) advertising, promotion,
publicity, public relations, market research, and other marketing programs;
(ii) developing and maintaining directories of and Internet sites for
System Hotels; (iii) developing and maintaining the Reservation Service
systems and support; and (iv) administrative costs and overhead related to
the administration or direction of these projects and programs. We will have
the sole right to determine how and when we spend these funds, including sole
control over the creative concepts, materials and media used in the programs,
the placement and allocation of advertising, and the selection of promotional
programs. We may enter into arrangements for development, marketing,
operations, administrative, technical and support functions, facilities,
programs, services and/or personnel with any other entity, including any of the
Entities or a third party. You acknowledge that Monthly Program Fees are intended
for the benefit of the System and will not simply be used to promote or benefit
any one System Hotel or market. We will have no obligation in administering any
activities paid by the Monthly Program Fee to make expenditures for you that
are equivalent or proportionate to your payments or to ensure that the Hotel
benefits directly or proportionately from such expenditures. We may create any
programs and allocate monies derived from Monthly Program Fees to any regions
or localities, as we consider appropriate in our sole business judgment. The
aggregate of Monthly Program Fees paid to us by System Hotels does not
constitute a trust or “advertising fund” and we are not a fiduciary with
respect to the Monthly Program Fees paid by you and other System Hotels. We are
not obligated to expend funds in excess of the amounts received from System
Hotels. If any interest is earned on unused Monthly Program Fees, we will use
the interest before using the principal. The Monthly Program Fee does not cover
your costs of participating in any optional marketing programs and promotions
offered by us in which you voluntarily choose to participate. These Monthly
Program Fees do not cover the cost of operating the Hotel in accordance with
the Standards. 

          e.
Inspections/Compliance Assistance. We will administer a quality assurance program for
the System that may include conducting periodic inspections of the Hotel and
guest satisfaction surveys and audits to ensure compliance with System
Standards. You will permit us to inspect the Hotel without prior notice to
determine if the Hotel is in compliance with the Standards. You will cooperate
fully with our representatives during these inspections. You will then take all
steps necessary to correct any deficiencies within the times we establish. You
may be charged a Quality Assurance Re-Evaluation Fee as set forth in the
Standards. You will provide complimentary accommodations for the quality
assurance auditor each time we conduct a regular inspection or a special
on-site quality assurance re-evaluation after the Hotel has failed a regular
quality assurance evaluation or to verify that deficiencies noted in a quality
assurance evaluation report or PIP have been corrected or completed by the
required dates. 

          f.
Manual. We
will issue to you or make available in electronic form the Manual and any
revisions and updates we may make to the Manual during the License Term. You
agree to ensure that your copy of the Manual is, at all times, current and up
to date. If there is any dispute as to your compliance with the provisions of
the Manual, the master copy of the Manual maintained at our principal office
will control.

          g.
Equipment and Supplies. We will make available to you for use in the Hotel
various purchase, lease, or other arrangements for exterior signs, operating
equipment, operating supplies, and furnishings, which we make available to
other System Hotels. 

6

Ex 10.10
Franchise Agreement - Winston Salem HI&S

November 2010 - Hampton

4.
Proprietary Rights

          You
will not contest, either directly or indirectly during the License Term or
after termination or expiration of this Agreement: (i) our (and/or any
Entities’) ownership of, rights to and interest in the System, Licensed Brand,
Marks and any of their elements or components, including present and future
distinguishing characteristics; (ii) our sole right to grant licenses to
use all or any elements or components of the System; (iii) that we (and/or
the Entities) are the owner of (or the licensee of, with the right to
sub-license) all right, title and interest in and to the Licensed Brand and the
Marks used in any form and in any design, alone or in any combination, together
with the goodwill they symbolize; and (iv) the validity or ownership of
the Marks. You acknowledge that these Marks have acquired a secondary meaning
which indicates that the Hotel, Licensed Brand and System are operated by or
with our approval. All improvements and additions to, or associated with, the
System, all Marks, and all goodwill arising from your use of the System and the
Marks, will inure to our benefit and become our property (or that of the
applicable Entities), even if you develop them. You will not apply for or
obtain any trademark or service mark registration of any of the Marks or any
confusingly similar marks in your name or on behalf of or for the benefit of
anyone else. You acknowledge that you are not entitled to receive any payment
or other value from us or from any of the Entities for any goodwill associated
with your use of the System or the Marks, or any elements or components of the
System. 

5.
Trade Name, Use of the Marks

          a.
Trade Name.
The Hotel will be initially known by the Trade Name set forth in the Rider. We
may change the Trade Name, the Licensed Brand name and/or any of the Marks (but
not the Principal Mark), or the way in which any of them (including the
Principal Mark) are depicted, at any time at our sole option and at your
expense. You may not change the Trade Name without our specific prior written consent.
You acknowledge and agree that you are not acquiring the right to use any
service marks, copyrights, trademarks, trade dress, logos, designs, insignia,
emblems, symbols, slogans, distinguishing characteristics, trade names, domain
names or other marks or characteristics owned by us or licensed to us that we
do not specifically designate to be used in the System.

          b.
Use of Trade Name and Marks. You will operate under the Marks, using the Trade
Name, at the Hotel. You will not adopt any other names or marks in operating
the Hotel without our approval. You will not use any of the Marks, or the word
“Hilton,” or other Network trademarks, trade names or service marks, or any
similar words or acronyms, in: (i) your corporate, partnership, business
or trade name except as we permit under this Agreement or the Standards;
(ii) any Internet-related name (including a domain name), except as we
permit under this Agreement or in the Standards; or (iii) any business
operated separately from the Hotel, including the name or identity of
developments adjacent to or associated with the Hotel. You agree that any
unauthorized use of the Marks will be an infringement of our rights and a
material breach of this Agreement. 

          c.
Trademark Disputes. You will immediately notify us of any infringement or dilution of or
challenge to your use of any of the Marks and will not, absent a court order or
our prior written consent, communicate with any other person regarding any such
infringement, dilution, challenge or claim. We will take the action we deem
appropriate with respect to such challenges and claims and have the sole right
to handle disputes concerning use of all or any part of the Marks or the
System. You will fully cooperate with us and any applicable Entity in these
matters. We do not reimburse your expenses incurred in cooperating with us or
the Entities in these matters. You appoint us as your exclusive
attorney-in-fact, to prosecute, defend and/or settle all disputes of this type
at our sole option. You will sign any documents we or the applicable Entity
believe are necessary to prosecute, defend or settle any dispute or obtain
protection for the Marks and the System and will assign to us any claims you
may have related to these matters. Our decisions as to the prosecution, defense
or settlement of the dispute will be final. All recoveries made as a result of
disputes regarding use of all or part of the System or the Marks will be for
our account. 

          d.
Web Sites.
You may not register, own, maintain or use any Sites that relate to the Network
or the Hotel or that include the Marks. The only domain names, Sites, or Site
contractors that you may

7

Ex 10.10
Franchise Agreement - Winston Salem HI&S

November 2010 - Hampton

use relating to the
Hotel or this Agreement are those we assign or otherwise approve in writing.
You must also obtain our prior written approval concerning any third-party Site
in which the Hotel will be listed, any proposed links between such Site and any
other site (“Linked Sites”) and any proposed modifications to Sites and Linked
Sites. All Sites containing any of the Marks and any Linked Sites must
advertise, promote, and reflect on the Hotel and the System in a first-class,
dignified manner. Any use of the Marks on any Site must conform to our
requirements, including the identity and graphics Standards for all System
hotels. Given the changing nature of this technology, we have the right to
withhold our approval, and to withdraw any prior approval, and to modify our
requirements.

          You acknowledge
that you may not, without a legal license or other legal right, post on your
Sites any material in which any third party has any direct or indirect
ownership interest (including, but not limited to, video clips, photographs,
sound bites, copyrighted text, trademarks or service marks, or any other text
or image in which any third party may claim intellectual property ownership
interests). You must incorporate on your Sites any information we require in
the manner we deem necessary to protect our Marks. 

          e.
Covenant.
You agree, as a direct covenant with us and the Entities, that you will comply
with all of the provisions of this Agreement related to the manner, terms and
conditions of the use of the Marks and the termination of any right on your
part to use any of the Marks. Any non-compliance by you with this covenant or
the terms of this Agreement related to the Marks, or any unauthorized or
improper use of the System or the Marks, will cause irreparable damage to us
and/or to the Entities. If you engage in such non-compliance or unauthorized
and/or improper use of the System or the Marks during or after the License
Term, we and any of the applicable Entities, along with the successors and
assigns of each, separately or along with each other, will be entitled to both
temporary and permanent injunctive relief against you from any court of
competent jurisdiction, in addition to all other remedies we or the Entities
may have at law. You consent to the entry of such temporary and permanent
injunctions. You must pay all costs and expenses, including reasonable
attorneys’ fees, expert fees, costs and other expenses of litigation that we
and/or the Entities may incur in connection with your non-compliance with this
covenant. 

6.
Your Responsibilities

          In
addition to any other responsibilities and obligations you have under this
Agreement, you are responsible for performing the following obligations:

          a.
Operational and Other Requirements. During the License Term, you must:

                    (1)
after the Opening Date, operate the Hotel twenty-four (24) hours a day; 

                    (2)
operate the Hotel using the System, in compliance with this Agreement and the
Standards, and in such a manner to provide courteous, uniform, respectable and
high quality lodging and other services and conveniences to the public. You
acknowledge that, although we provide the Standards, you have exclusive
day-to-day control of the business and operation of the Hotel and we do not in
any way possess or exercise such control;

                    (3)
comply with System Standards, including our specifications for all supplies,
products and services, regarding (i) the types and levels of services,
amenities and products that must be used, promoted or offered in connection
with the Hotel and (ii) the purchase of products and services, including, but
not limited to, furniture, fixtures, equipment, food, operating supplies,
consumable inventories, merchandise for resale to be used at, and/or sold from,
the Hotel, in-room entertainment, computer networking, and any and all other
items used in the operation of the Hotel. We may require you to purchase a
particular brand of product. Unless we specify otherwise, you may purchase this
product from any authorized source of distribution; however, we reserve the
right, in our business judgment, to enter into exclusive purchasing
arrangements for particular products or services and to require that you
purchase products or services from approved suppliers or distributors;

8

Ex 10.10
Franchise Agreement - Winston Salem HI&S

November 2010 - Hampton

                    (4)
install, display, and maintain signage displaying or containing the Licensed
Brand name and other distinguishing characteristics in accordance with
Standards we establish for System Hotels;

                    (5)
comply with System Standards for the training of persons involved in the
operation of the Hotel, including completion by the General Manager and other
key personnel of the Hotel of a training program for operation of the Hotel
under the System, at a site we designate. You will pay us for all fees and
charges, if any, we require for your personnel to attend these training
programs. You will also be responsible for the wages, room, board and travel
expenses of your personnel;

                    (6)
purchase and maintain property management, revenue management, in-room
entertainment, telecommunications, high-speed internet access, and other
computer and technology systems we designate as System-wide (or area-wide)
programs based on our assessment of the long-term best interests of System
Hotels, considering the interest of the System as a whole;

                    (7)
advertise and promote the Hotel and related facilities and services on a local
and regional basis in a first-class, dignified manner, using our identity and
graphics Standards for all System Hotels, at your cost and expense. You must
submit to us for our approval samples of all advertising and promotional
materials that we have not previously approved (including any materials in
digital, electronic or computerized form or in any form of media that exists
now or is developed in the future) before you produce or distribute them. You
will not begin using the materials until we approve them. You must immediately
discontinue your use of any advertising or promotional material we believe in
our business judgment is not in the best interest of the Hotel or System, even
if we previously approved the materials;

                    (8)
participate in and pay all charges in connection with (i) all required System
guest complaint resolution programs, which programs may include chargebacks to
the Hotel for guest refunds or credits, and (ii) all required System quality
assurance programs, such as guest comment cards, customer surveys and mystery
shopper programs. You must maintain minimum performance Standards and scores
for quality assurance programs we establish;

                    (9)
honor all nationally recognized credit cards and credit vouchers issued for
general credit purposes that we require and enter into all necessary credit
card and voucher agreements with the issuers of such cards or vouchers;

                    (10)
participate in and use, on the terms in this Agreement and in the Standards,
the Reservation Service, including any additions, enhancements, supplements or
variants we develop or adopt, and honor and give first priority on available
rooms to all confirmed reservations referred to the Hotel through the
Reservation Service. The only reservation service or system you may use for
outgoing reservations referred by or from the Hotel to other Network Hotels
will be the Reservation Service or other reservation services we designate;

                    (11)
comply with Applicable Laws and, upon request, give evidence to us of
compliance;

                    (12)
participate in, and promptly pay all fees, commissions and charges associated
with, all travel agent commission programs and third-party reservation and
distribution services (such as airline reservation systems), all as required by
the Standards and in accordance with the terms of these programs, all of which
may be modified;

                    (13)
not engage, directly or indirectly, in any cross-marketing or cross-promotion
of the Hotel with any Other Hotel or related business, except as outlined in
this Paragraph, without our prior written consent, which we may be withhold or
condition in our business judgment. You agree to refer guests and customers,
wherever reasonably possible, only to System Hotels or Network Hotels. We may
require you to participate in programs designed to refer prospective customers
to Other Hotels. You must display all material, including brochures and
promotional material we provide for System Hotels and Network Hotels, and allow
advertising and promotion only of System Hotels and

9

Ex 10.10
Franchise Agreement - Winston Salem HI&S

November 2010 - Hampton

Network Hotels on
the Hotel Premises, unless we specifically direct you to include advertising or
promotion of Other Hotels; 

                    (14)
treat as confidential the Standards, the Manual and all other Proprietary
Information. You acknowledge and agree that you: (i) do not acquire any
interest in the Proprietary Information other than the right to utilize the
same in the development and operation of the Hotel under the terms of this
Agreement; (ii) will not use the Proprietary Information in any business
or for any purpose other than in the development and operation of the Hotel
under the System; (iii) will maintain the absolute confidentiality of the
Proprietary Information during and after the License Term; (iv) will not
make unauthorized copies of any portion of the Proprietary Information; and
(v) will adopt and implement all procedures we may periodically establish
in our business judgment to prevent unauthorized use or disclosure of the
Proprietary Information, including restrictions on disclosure to employees and
the use of non-disclosure and non-competition clauses in agreements with
employees, agents and independent contractors who have access to the
Proprietary Information;

                    (15)
not become a Competitor, or permit your Affiliate to become a Competitor,
without our prior written consent. These restrictions apply irrespective of the
number of hotels owned, licensed or franchised by the Competitor under such
brand name, but we do not prohibit you (or your Affiliates) from: (i) owning a
minority interest in a Competitor so long as neither you nor any of your Affiliates
is a director or employee of the Competitor, provides services (including as a
consultant) to the Competitor or exercises or has the right to exercise,
control or influence over the business decisions of the Competitor; (ii) being
a franchisee or licensee of a Competitor; or (iii) managing a property for a
Competitor;

                    (16)
own fee simple title (or long-term ground leasehold interest, provided that
such interest has been granted to you by an unrelated third-party ground lessor
in an arms length transaction for a term equal to, or longer than, the License
Term) to the real property and improvements that comprise the Hotel, or
alternatively, at our request, cause the fee simple owner, or other third party
acceptable to us, to provide its guarantee covering all of your obligations
under this Agreement in form and substance acceptable to us;

                    (17)
maintain legal possession and control of the Hotel and Hotel Site for the term
of the Agreement and promptly deliver to us a copy of any notice of default you
receive from any mortgagee, trustee under any deed of trust, or ground lessor
for the Hotel, and upon our request, provide any additional information we may
request related to any alleged default or any subsequent action or proceeding
in connection with any alleged default;

                    (18)
refrain from directly or indirectly conducting, or permitting by lease,
concession arrangement or otherwise, gaming or casino operations in or
connected to the Hotel or on the Hotel Site; without our prior written consent,
which we may be withhold or condition in our business judgment;

                    (19)
refrain from directly or indirectly conducting or permitting the marketing or
sale of timeshares, vacation ownership, fractional ownership, condominiums or
like schemes at, or adjacent to, the Hotel without our written consent, which
we may withhold or condition in our business judgment; provided, however, that
this restriction will not prohibit you from directly or indirectly conducting
timeshare, vacation ownership, fractional ownership, or condominium sales or
marketing at and for any property located adjacent to the Hotel that is owned
or leased by you so long as: (i) you do not use any of the Marks in such sales
or marketing efforts; and (ii) you do not use the Hotel or its facilities in
such sales and marketing efforts or in the business operations of the adjacent
property;

                    (20)
participate in and pay all charges related to our marketing programs (in
addition to programs covered by the Monthly Program Fee), all guest frequency
programs we require; and any optional programs that you opt into. You must also
honor the terms of any discount or promotional programs (including any frequent
guest program) that we offer to the public on your behalf, any room rate quoted
to any guest at the time the guest makes an advance reservation, and any award
certificates issued to Hotel guests participating in these programs;

10

Ex 10.10
Franchise Agreement - Winston Salem HI&S

November 2010 - Hampton

                    (21)
maintain, at your expense, insurance of the types and in the minimum amounts we
specify in the Standards. All such insurance must be with insurers having the
minimum ratings we specify, name as additional insureds the parties we specify
in the Standards, and carry the endorsements and notice requirements we specify
in the Standards. If you fail or neglect to obtain or maintain the insurance or
policy limits required by this Agreement, we have the option, but not the
obligation, to obtain and maintain such insurance without notice to you, and
you will immediately upon our demand pay us the premiums and cost we incur in
obtaining this insurance; 

                    (22)
refrain from sharing the business operations and Hotel facilities with any
Other Hotel, without our written consent, which we may withhold or condition in
our business judgment;

                    (23)
refrain from any activity which, in our business judgment, is likely to
adversely reflect upon or affect in any manner, any gaming licenses or permits
held by the Entities or the then current stature of any of the Entities with
any gaming commission, board, or similar governmental or regulatory agency, or
the reputation or business of any of the Entities;

                    (24)
notwithstanding anything to the contrary in this Agreement, refrain from
engaging in any tenant-in-common syndication or Transfer of any
tenant-in-common interest in the Hotel or the Hotel Site, without our express
written permission, which we may withhold at our sole option, and, if we grant
such permission, comply with the terms of such permission; and

                    (25)
promptly provide to us all information we reasonably request about you and your
Affiliates (including your respective beneficial owners, officers, directors,
shareholders, partners or members) and/or the Hotel, title to the property on
which the Hotel is constructed and any other property used by the Hotel. The
information requested may include, but not necessarily be limited to, financial
condition, credit information, personal and family background, business
background, litigation, indictments, criminal proceedings and the like.

          b.
Hotel Refurbishment. In addition to the general requirement for you to operate the Hotel
according to our Standards, we may periodically require you to modernize,
rehabilitate and/or upgrade the Hotel’s fixtures, equipment, furnishings,
furniture, signs, computer hardware and software and related equipment,
supplies and other items to meet the then-current Standards. You will make
these changes at your sole cost and expense. Nothing in this
subparagraph will relieve you from the obligation to maintain acceptable
product quality ratings at the Hotel and maintain the Hotel in accordance with
the Standards at all times during the License Term. You may not make any change
in the number of approved Guest Rooms in the Rider or any other significant
change (including major changes in structure, design or decor) in the Hotel
without our prior written approval. Minor redecoration and minor structural
changes that comply with our Standards will not be considered significant. 

          c.
Staff and Management. You are at all times solely responsible for the management of the
Hotel’s business. You may fulfill this responsibility by providing:
(i) qualified and experienced management, which may be a third-party
Management Company; and (ii) a General Manager, each approved by us in
writing. You agree that we will have the right to communicate directly with the
Management Company and managers at the Hotel and that we may rely on the
communications of such managers or Management Company as being on your behalf.

          You
represent and agree that you have not, and will not, enter into any
lease, management agreement or other similar arrangement for the operation of
the Hotel or any part of the Hotel with any person or entity without our prior
written consent. To be approved by us as the operator of the Hotel, you, any
proposed Management Company and any proposed General Manager must be qualified
to manage the Hotel. We may refuse to approve you, any proposed Management
Company or any proposed General Manager which, in our business judgment, is
inexperienced or unqualified in managerial skills or operating capacity or
capability or is unable to adhere fully to the obligations and requirements of
this Agreement. You understand that we reserve the right to not approve a
Competitor, or any entity that (through itself or its Affiliate) is the
exclusive manager for a Competitor, to manage the Hotel. If the

11

Ex 10.10
Franchise Agreement - Winston Salem HI&S

November 2010 - Hampton

Management Company becomes a Competitor or the Management Company and/or
the General Manager resigns or is terminated by you or otherwise becomes
unsuitable in our sole business judgment to manage the Hotel at any time during
the License Term, you will have ninety (90) days to retain a qualified
substitute Management Company and/or General Manager acceptable to us. Any
Management Company and/or General Manager must have the authority to perform
all of your obligations under this Agreement, including all indemnity and
insurance obligations. The engagement of a Management Company does not reduce
your obligations under this Agreement. In the case of any conflict between this
Agreement and any agreement with the Management Company or General Manager,
this Agreement prevails. 

          d.
Obligations of Prior Licensee. You acknowledge and agree that you are directly responsible
for, and will pay on demand, all fees and charges due and owing us and the
Entities related to the prior franchise license agreement for the Hotel if any
such fees and charges remain outstanding as of or accrue after the Effective
Date of this Agreement.

7. Fees

          a.
Monthly Fees.
Beginning on the Opening Date, you will pay to us for each month (or part of a
month, including the final month you operate under this Agreement) a Monthly
Royalty Fee and a Monthly Program Fee, each of which is set forth in the Rider.
The amount of the Monthly Program Fee is subject to change by us. Any change
may be established in the Standards, but any increase in the Monthly Program
Fee will not exceed one percent (1%) of the Hotel’s Gross Rooms Revenue during
the License Term.

          b.
Calculation and Payment of Fees. The monthly fees will be calculated in accordance
with the accounting methods of the then current Uniform System of Accounts for
the Lodging Industry, or such other accounting methods as may otherwise be
specified by us in the Manual. Gross Rooms Revenue, as used in the calculation
of the Monthly Royalty Fee and the Monthly Program Fee under this Agreement,
means all revenues derived from the sale or rental of Guest Rooms (both
transient and permanent) of the Hotel, including revenue derived from the
redemption of points or rewards under the loyalty programs in which the Hotel
participates, amounts attributable to breakfast (where the guest room rate
includes breakfast), and guaranteed no-show revenue and credit transactions,
whether or not collected, at the actual rates charged, less allowances for any
Guest Room rebates and overcharges, and will not include taxes collected
directly from patrons or guests. In the event of fire or other insured casualty
that results in a reduction of Gross Rooms Revenue, you will determine and pay
us, from the proceeds of any business interruption or other insurance
applicable to loss of revenues, an amount equal to the forecasted Monthly
Program Fee and forecasted Monthly Royalty Fee, based upon the Gross Rooms
Revenue amount agreed upon between you and your insurance company, that would
have been paid to us in the absence of such casualty; provided however, we have
the right, at our request, to participate with you in the determination of the
forecasted Gross Rooms Revenue amount for purposes of calculating the Monthly
Program Fee and Monthly Royalty Fee. Group booking rebates, if any, paid by you
or on your behalf to third-party groups for group stays must be included
in, and not deducted from, the calculation of Gross Rooms Revenue. The Monthly
Royalty Fee and the Monthly Program Fee will be paid to us at the place and in
the manner we designate on or before the fifteenth (15th) day of each month and
will be accompanied by our standard schedule setting forth in reasonable detail
the computation of the Monthly Royalty Fee and Monthly Program Fee for such
month. There will be an annual adjustment within ninety (90) days after the end
of each operating year so that the total Monthly Royalty Fees and Monthly
Program Fees paid annually will be the same as the amounts determined by audit.
We reserve the right to require you to transmit the Monthly Royalty Fee and the
Monthly Program Fee and all other payments required under this Agreement by
wire transfer or other form of electronic funds transfer and to provide the
standard schedule in electronic form. You must bear all costs of wire transfer
or other form of electronic funds transfer or other electronic payment and reporting.

          c.
Room Addition Fee. If you desire to add or construct additional Guest Rooms at the Hotel
at any time after the Opening Date of the Hotel under the Licensed Brand (“Room Addition”), before you enter into any
agreement to construct the Room Addition or begin constructing the Room
Addition, you

12

Ex 10.10
Franchise Agreement - Winston Salem HI&S

November 2010 - Hampton

must: (i) submit to
us a written request describing the proposed Room Addition and including any
information we may in our business judgment require to consider your request;
and (ii) along with your request, pay us a nonrefundable Room Addition Fee
equal to the then-prevailing per room Guest Room development fee charged for
new System Hotels, multiplied by the number of proposed additional Guest Rooms.
We will follow our then-current procedure for processing your Room Addition
request. As a condition to our granting approval of your Room Addition
Application, we may require you to modernize, rehabilitate or upgrade the Hotel,
subject to Subparagraph 6(b) of this Agreement, and to pay us our then
prevailing PIP Fee to prepare a PIP to determine the renovation requirements
for the Hotel. We may also require you to execute an amendment to this
Agreement covering the terms and conditions of the Room Addition, which may
include an estoppel and general release of claims against us, the Entities, and
related persons.

          d.
Other Fees.
You will timely pay all amounts due us or any of the Entities for any invoices
or for goods or services purchased by or provided to you or paid by us or any
of the Entities on your behalf, including pre-opening sales and operations
training.

          e.
Taxes. If
any Gross Receipts Tax is imposed upon us or any of the Entities based on any
payments made by you related to this Agreement, then you must reimburse us or
the Entity for any such Gross Receipts Tax to ensure that the amount we or the
Entity retains, after paying the Gross Receipts Tax, equals the full amount of
the payments you are required to pay us or the Entity had such Gross Receipts
Tax not been imposed; provided that you will not be required to pay income
taxes payable by us or any Entity as a result of the net income relating to any
fees collected under this Agreement.

          f.
Application of Fees. We may apply any amounts received from you to any amounts due under
this Agreement. Failure to pay any amount when due is a material breach of this
Agreement. Such unpaid amounts will accrue a service charge beginning on the
first day of the month following the due date of one and one-half percent (11⁄2%)
per month or the maximum amount permitted by Applicable Law, whichever is less.

8.
Reports, Records, Audits, and Privacy

          a.
Reports. At
our request, you will prepare and deliver to us daily, monthly, quarterly and
annual Reports we require, prepared in the form, manner and within the time
frame we require. The Reports will contain all Operational Information we
require and will be certified as accurate in the manner we require. You will
also provide us any additional related Operational Information and Reports and
other information we may periodically request and permit us to inspect your
books and records at all reasonable times. At least monthly, you will prepare a
statement that will include all information concerning the Operational
Information. By the fifteenth (15th) day of each month, you will submit to us a
statement setting forth the Operational Information for the previous month and
reflecting the computation of the amounts then due under Paragraph 7, in
the form and detail we require. 

          b.
Maintenance of Records. In a manner and form satisfactory to us and using
accounting and reporting Standards we require in our business judgment, you
will: (i) prepare on a current basis (and preserve for no less than the greater
of four (4) years or our record retention requirements), complete and accurate
records concerning Gross Rooms Revenue and all financial, operating, marketing
and other aspects of the Hotel; and (ii) maintain an accounting system that
fully and accurately reflects all financial aspects of the Hotel and its
business. These records will include books of account, tax returns,
governmental reports, register tapes, daily reports, and complete quarterly and
annual financial statements (including profit and loss statements, balance
sheets and cash flow statements).

          c.
Audit. We
may require you to have the Gross Rooms Revenue, fees or other monies due to us
computed and certified as accurate by a certified public accountant. During the
License Term and for two (2) years thereafter, we and our authorized agents
have the right to verify Operational Information required under this Agreement
by requesting, receiving, inspecting and auditing, at all reasonable times, any
and all records referred to above wherever they may be located (or elsewhere if
we request). If any inspection or audit reveals that you understated or
underpaid any payment due to us that is not fully offset

13

Ex 10.10
Franchise Agreement - Winston Salem HI&S

November 2010 - Hampton

by overpayments,
you will promptly pay to us the deficiency plus interest from the date each
payment was due until paid at a rate of one and one-half percent (11⁄2%) per
month or the maximum amount permitted by Applicable Law, whichever is less. If
the audit or inspection reveals that the underpayment is willful, or is for
five percent (5%) or more of the total amount owed for the period being
inspected, you will also reimburse us for all inspection and audit costs,
including reasonable travel, lodging, meals, salaries and other expenses of the
inspecting or auditing personnel. Our acceptance of your payment of any
deficiency will not waive any rights we may have as a result of your breach,
including our right to terminate this Agreement. If the audit discloses an
overpayment, we will credit this overpayment against your future payments due
under this Agreement, without interest, or if no future payments are due under
this Agreement, we will promptly pay you the amount of the overpayment without
interest.

          d.
Ownership of Information. All Information and all revenues we derive from such
Information will be our property. You may use Information that you acquire from
third parties in operating the Hotel, such as Personal Information, at any time
during or after the License Term to the extent lawful and at your sole risk and
responsibility, but only in connection with operating the Hotel. The
Information will become our Proprietary Information which we may use for any
reason as we deem necessary, including making a financial performance
representation in our franchise disclosure documents. 

          e.
Privacy and Data Protection. You will: (i) comply with all applicable Privacy
Laws; (ii) comply with all Standards that relate to Privacy Laws and the
privacy and security of Personal Information; (iii) refrain from any action or
inaction that could cause us or the Entities to breach any Privacy Laws; (iv)
do and execute, or arrange to be done and executed, each act, document and
thing we deem necessary in our business judgment to keep us and the Entities in
compliance with the Privacy Laws; and (v) immediately report to us the theft or
loss of Personal Information (other than the Personal Information of your own
officers, directors, shareholders, employees or service providers). 

9.
Indemnity

          You
must, during and after the License Term, indemnify the Indemnified Parties
against, and hold them harmless from, all losses, costs, liabilities, damages,
claims, and expenses, including reasonable attorneys’ fees, expert fees, costs
and other expenses of litigation arising out of or resulting from: (i) any
claimed occurrence at the Hotel or arising from, as a result of, or in
connection with the development, construction or operation of the Hotel
(including the design, construction, financing, furnishing, equipment,
acquisition of supplies or operation of the Hotel in any way); (ii) any
bodily injury, personal injury, death or property damage suffered or claimed by
any guest, customer, visitor or employee of the Hotel; (iii) your alleged
or actual infringement or violation of any patent, mark or copyright or other
proprietary right owned or controlled by third parties; (iv) your alleged
or actual violation or breach of any contract (including any System-wide group
sales agreement), any Applicable Law, or any industry standard; (v) any
business conducted by you or a third party in, on or about the Hotel or its
grounds; (vi) any other of you or your Affiliates’ acts, errors, omissions or
obligations, or those of anyone associated or affiliated with you, your
Affiliates or the Hotel or in any way arising out of or related to this
Agreement; or (vii) your failure to comply with Subparagraph 16.l., including a
breach of the representations set forth therein. However, you do not have to
indemnify an Indemnified Party to the extent damages otherwise covered under
this Paragraph 9 are adjudged by a final, non-appealable judgment of a
court of competent jurisdiction to have been solely the result of the gross
negligence or willful misconduct of that Indemnified Party, and not any of the
acts, errors, omissions, negligence or misconduct of you or anyone related to
you or the Hotel. You may not rely on this exception to your indemnity
obligation if the claims were asserted against us or any other Indemnified
Party on the basis of: (i) theories of imputed or secondary liability,
such as vicarious liability, agency, or apparent agency; or (ii) our
failure to compel you to comply with the provisions of this Agreement,
including compliance with Standards, Applicable Laws or other requirements.

          You
will also indemnify the Indemnified Parties for any claim for damages by reason
of the failure of any contractor, subcontractor, supplier or vendor doing
business with you relating to the Hotel to maintain adequate insurance as
required in the Standards.

14

Ex 10.10
Franchise Agreement - Winston Salem HI&S

November 2010 - Hampton

          You
will give us written notice of any action, suit, proceeding, claim, demand,
inquiry or investigation involving an Indemnified Party within five (5) days of
your actual knowledge of it. At our election, you will defend us and/or the
Indemnified Parties against the same or we may elect to assume (but under no
circumstance will we be obligated to undertake) the defense and/or settlement
of the action, suit, proceeding, claim, demand, inquiry or investigation at
your expense and risk. We may obtain separate counsel of our choice if we
believe your and our interests may conflict. Our undertaking of defense and/or
settlement will in no way diminish your obligation to indemnify the Indemnified
Parties and to hold them harmless. You will also reimburse the Indemnified
Parties upon demand for all expenses, including reasonable attorneys’ fees,
expert fees, costs and other expenses of litigation, the Indemnified Parties
incur to protect themselves or to remedy your defaults. Under no circumstances
will the Indemnified Parties be required to seek recovery from third parties or
otherwise mitigate their losses to maintain a claim against you, and their
failure to do so will in no way reduce the amounts recoverable from you by the
Indemnified Parties. 

          Your
obligations under this Paragraph 9 will survive expiration or termination of
this Agreement.

10. Notice of
Intent to Market

          Except
in the case of a Transfer governed by Subparagraph 11.b.(1) or 11.b.(2), below,
if you or an Affiliate that directly or indirectly Controls the Hotel and/or Controls
the entity that Controls the Hotel (the “Controlling Affiliate”), want to Transfer
by sale or lease or market for sale or lease all or part of your interest in
the Hotel or the Hotel Site, you or the applicable Controlling Affiliate must
first give us written notice of your intent to sell or lease the Hotel or Hotel
Site, concurrent with beginning your marketing efforts.

11.
Transfer

          a.
Our Transfer.
We may Transfer this Agreement or any of our rights, obligations, or assets
under this Agreement, by operation of law or otherwise, to any person or legal
entity without your consent. Any of the Entities may Transfer their ownership
rights in us or any of our parents or Affiliates, by operation of law or
otherwise, including by public offering, to any person or legal entity without
your consent. You acknowledge and agree that this Agreement is a license for
the Licensed Brand only and the programs that are unique to the Licensed Brand.
Therefore, if we Transfer or assign this Agreement, your right to use any
programs, rights or services related to or provided by the Entities or their
designees, including the Reservation Service, any guest frequency program not
unique to the Licensed Brand, and any Marks (except the principal name
identified in the Rider) may terminate. After our Transfer of this Agreement to
a third party who expressly assumes our obligations under this Agreement, we
will no longer have any performance or other obligations under this Agreement. 

          b.
Your Transfer.
You understand and acknowledge that the rights and duties in this Agreement are
personal to you and that we are entering into this Agreement in reliance on
your business skill, financial capacity, and the personal character of you,
your officers, directors, partners, members, shareholders or trustees. A
Transfer by you of any Equity Interest, or this Agreement, or any of your
rights or obligations under this Agreement, or a Transfer by an Equity Owner is
prohibited other than as expressly permitted herein. You represent that as of
the Effective Date, the Equity Interests are directly and/or indirectly owned
as shown in the Rider. 

                    (1)
Transfers That Do Not Require Notice to Us or Our Consent. The following Transfers will be
permitted, without giving us notice or receiving our consent, as long as they
meet the stated requirements.

                              (a)
Privately
Held Equity Interests: Less than 25% Change/No Change of Control. An
Equity Interest that is not publicly traded may be Transferred without notice
to us and without our consent, if after the transaction: (i) less than
twenty-five percent (25%) of the Equity Interest in the Licensee (excluding any
Transfer under Subparagraph 11.b.(1)(b) below) will have changed hands

15

Ex 10.10
Franchise Agreement - Winston Salem HI&S

November 2010 - Hampton

since the Effective
Date of this Agreement; and (ii) any such Transfer will not result in a change
of Control of the Licensee, the Hotel or the Hotel Site. 

                              (b)
Publicly
Traded Equity Interests. A Publicly Traded Equity Interest may be
Transferred without notice to us and without our consent if the Transfer does
not result in a change in Control of the Licensee, the Hotel or the Hotel Site.

                    (2)
Other Permitted Transfers. We will permit the types of Transfers listed in this
Subparagraph 11.b.(2) (“Permitted Transfers”), on the conditions
stated, so long as (a) the proposed transferee is not a Specially Designated
National or Restricted or Blocked Person (as defined in Subparagraph 16.l.) or
a Competitor and (b) you or, if applicable, the transferring Affiliate or
Equity Owner: (i) give us sixty (60) days advance written notice of the
proposed Transfer (including the identity and contact information for any
proposed transferee and any other information we may in our business judgment
require in order to review the proposed Transfer and verify compliance with
this Paragraph 11; (ii) are not in default under this Agreement or any related
agreement; (iii) pay to us a nonrefundable processing fee of Three Thousand
Dollars ($3,000) with the Transfer request; (iv) follow our then-current
procedure for processing Permitted Transfers; and (v) execute any documents
required by the procedure for processing Permitted Transfers, which may include
an estoppel and general release of claims that you or the Equity Owner may have
against us, the Entities, and related persons.

                              (a)
Affiliate
Transfer. You or any Equity Owner named in the Rider as of the
Effective Date (or any transferee Equity Owner we subsequently approve) may
Transfer an Equity Interest or this Agreement to an Affiliate, as long as: (i)
any Transfer of an Equity Interest does not result in a change of Control of
the Licensee, the Hotel or the Hotel Site; (ii) in any Transfer of this
Agreement to an Affiliate, the Control of the Transferee Licensee is not
different from the Control of the transferring Licensee; and (iii) the Transfer
otherwise satisfies the conditions in this Subparagraph 11.b.(2). 

                              (b)
Transfers
to Family Member or Trust. If you or any Equity Owner as of the
Effective Date (or any transferee Equity Owner we subsequently approve) are a
natural person, and desire to Transfer any Equity Interest or this Agreement to
a member of your (or any such Equity Owner’s) immediate family (i.e. spouse,
children, parents, siblings) or to a trust or trusts for your benefit (or the
benefit of the Equity Owner or the Equity Owner’s immediate family members), we
will consent to the Transfer provided that (i) such event does not result in a
change of Control of the Licensee, the Hotel or the Hotel Site, and (ii) the
Transfer otherwise satisfies the conditions in this Subparagraph 11.b.(2). 

                              (c)
Transfer
Upon Death. Upon the death of a Licensee or Equity Owner who is a
natural person, this Agreement or the Equity Interest of the deceased Equity
Owner may Transfer in accordance with such person’s will or, if such person dies
intestate, in accordance with laws of intestacy governing the distribution of
such person’s estate without our consent, provided that: (i) the Transfer Upon
Death is to an immediate family member or to a legal entity formed by such
family member(s); and (ii) within one (1) year after the death, such family
member(s) or entity meet all of our then current requirements for an approved
applicant and the Transfer otherwise satisfies the conditions in this
Subparagraph 11.b.(2).

                              (d)
Bricks
and Mortar Transfer. If you or your Affiliate own the Hotel and/or
Hotel Site, you or your Affiliate may Transfer the Hotel and/or the Hotel Site
provided that after completion of the transaction, (i) you remain in full
compliance with this Agreement and all of its subparts; (ii) you retain the
management control of the Hotel operations; and the Transfer otherwise
satisfies the conditions in this Subparagraph 11.b.(2).

                              (e)
Privately
Held Equity Interests: 25% or Greater Change/No Change of Control. You
or any Equity Owner as of the Effective Date (or any transferee Equity Owner we
subsequently approve) may Transfer an Equity Interest even though, after the
completion of such conveyance, twenty-five percent (25%) or more cumulative
Equity Interest in Licensee will have changed hands since the Effective Date of
this Agreement, so long as (i) such event does not result in a change of

16

Ex 10.10
Franchise Agreement - Winston Salem HI&S

November 2010 - Hampton

Control of the
Licensee, the Hotel or the Hotel Site; (ii) you are not then in material
default under this Agreement; and (iii) the Transfer otherwise satisfies the
conditions in this Subparagraph 11.b.(2).

                    (3)
Change of Ownership Transfer. Any proposed Transfer that is not described in
Subparagraph 11.b.(1), 11.b.(2), or 11.b.(5) is a Change of Ownership Transfer.
You must give us at least sixty (60) days advance written notice of any
proposed Change of Ownership Transfer, including the identity and contact
information for any proposed Transferee Licensee or transferee Equity Owner(s)
and any other information we may in our business judgment require in order to
review and consent to the Transfer. The Transferee Licensee must submit to us a
Change of Ownership Application accompanied by payment of our then prevailing
development services fee. If you are remaining as Licensee, with a change of
Control, you or the transferee Equity Owner(s) must submit the Change of
Ownership Application and pay the fee. We may also require you or the
Transferee Licensee to pay the then prevailing PIP Fee for us to determine the
renovation requirements for the Hotel. If we approve the Change of Ownership
Transfer, we may require you (if there is no Transferee Licensee), or the
Transferee Licensee to pay any other applicable fees and charges we then impose
for new Licensed Brand franchise licenses. 

                    We
will process the Change of Ownership Application in accordance with our then
current procedures, including review of criteria and requirements regarding
upgrading of the Hotel, credit, background investigation, operations abilities
and capabilities, prior business dealings, market feasibility, guarantees, and
other factors we consider relevant in our business judgment. We will have sixty
(60) days from our receipt of the completed and signed application to consent
or withhold our consent to the transferee Equity Owner(s), the Transferee
Licensee and/or Change of Ownership Transfer. During our review process, you
authorize us to communicate with the transferee Equity Owner(s), any Transferee
Licensee and any other necessary party and to provide to the transferee Equity
Owner(s), any Transferee Licensee any information we have about the Hotel and
the market in which the Hotel operates.

                    Our
consent to the Change of Ownership Transfer is subject to the following
conditions, all of which must be satisfied at or prior to the date of closing
the Transfer (“Closing”): 

                              (a)
You are not in default of this Agreement or any related agreement; 

                              (b)
We must receive, at or before Closing, payment of all amounts due to us or the
Entities through the date of Closing, along with your written agreement to
promptly pay any amounts that may become due after Closing related to your
operation of the Hotel prior to Closing;

                              (c)
You, the Transferee Licensee and/or transferee Equity Owner(s) must submit to
us all information related to the Transfer that we, in our business judgment,
require, including, but not limited to: (i) copies of any Transfer agreements;
(ii) copies of organizational documents; (iii) identity and description of the
proposed ownership; and (iv) financial statements and business information for
all participants in the proposed Transfer;

                              (d)
You must, if we so request, execute our then-current standard form of voluntary
termination agreement, which may include an estoppel and general release,
covering termination of this Agreement; and

                              (e)
You resolve to our satisfaction, or provide adequate security (including
security for your continuing indemnity obligations) for, any suit, action, or
proceeding pending or threatened against you or us with respect to the Hotel,
which may result in liability to us, including outstanding accounts payable to
third parties.

                    We
may withhold our consent to any proposed Change of Ownership Transfer if: (i)
any of the above conditions are not met to our satisfaction; (ii) you, the
Transferee Licensee or transferee Equity Owner(s) do not provide us with
information we, in our business judgment, require, in order to review and
consent to the Transfer; (iii) you (if there is no Transferee Licensee) or, if
applicable, the Transferee Licensee does not agree to execute a new franchise
license agreement with us (“New

17

Ex 10.10
Franchise Agreement - Winston Salem HI&S

November 2010 - Hampton

License”), which will be on our then
current form for the grant of new franchise licenses, contain our then
current license terms, and contain upgrading and other requirements, if any,
that we impose; (iv) any required Guarantor fails to execute our then-standard
form of guarantee of franchise license agreement; (v) you (if there is no
Transferee Licensee) or, if applicable, the Transferee Licensee fails to
provide evidence that insurance coverage, as required by the New License, will
be effective by the date of Closing; or (vi) the Transferee Licensee or a
transferee Equity Owner is a Specially Designated National, or Restricted or
Blocked Person (as defined in Subparagraph 16.l.) or a Competitor, or otherwise
fails to meet our then-current criteria for new licensees or Equity Owners. 

                    (4)
Public Offering or Private Placement. Any public offering, private placement or other sale
of securities in the Licensee, the Hotel or the Hotel Site (“Securities”)
requires our consent. All materials required by any Applicable Law for the
offer or sale of those Securities must be submitted to us for review at least
sixty (60) days before the date you distribute those materials or file them
with any governmental agency, including any materials to be used in any offering
exempt from registration under any securities laws. You must submit to us a
non-refundable Five Thousand Dollar ($5,000) processing fee with the offering
documents and pay any additional costs we may incur in reviewing your
documents, including reasonable attorneys’ fees. Except as legally required to
describe the Hotel in the offering materials, you also may not use any of the
Marks or otherwise imply our participation or that of Hilton Worldwide or any
other Entity in or endorsement of any Securities or any Securities offering. We
will have the right to approve any description of this Agreement or of your
relationship with us, or any use of the Marks, contained in any prospectus,
offering memorandum or other communications or materials you use in the sale or
offer of any Securities. Our review of these documents will not in any way be
considered our agreement with any statements contained in those documents,
including any projections, or our acknowledgment or agreement that the
documents comply with any Applicable Laws.

                    You
may not sell any Securities unless you clearly disclose to all purchasers and
offerees that: (i) neither we, nor any Entity, nor any of our or their
respective officers, directors, agents or employees, will in any way be deemed
an Issuer or underwriter of the Securities, as those terms are defined in
applicable securities laws; and (ii) we, the Entities, and our respective
officers, directors, agents and employees have not assumed and will not have
any liability or responsibility for any financial statements, prospectuses or
other financial information contained in any prospectus or similar written or
oral communication. You must indemnify, defend and hold the Indemnified Parties
free and harmless of and from any and all liabilities, costs, damages, claims
or expenses arising out of or related to the sale or offer of any of your
Securities to the same extent as provided in Paragraph 9 of this
Agreement. 

                    (5)
Other Transactions. 

                              (a)
Mortgages
and Pledges to Lending Institutions. You or an Equity Owner may
mortgage or pledge the Hotel or an Equity Interest to a lender that finances
the acquisition, development or operation of the Hotel, without notifying us or
obtaining our consent, provided that (i) the proceeds are used for the direct
benefit of the Hotel, (ii) you or the applicable Equity Owner are the sole
borrower, and (iii) the loan is not secured by any other hotels or other
collateral. You must notify us of any other proposed mortgage or pledge,
including any collateral assignment of this Agreement, and obtain our consent,
which we may withhold in our business judgment. We will evaluate the proposed
mortgage or pledge according to our then-current procedure and standards for
processing such requests. As a condition to our consent, we may require, among
other things, that you (and/or the Equity Owner) and the lender execute a
“lender comfort letter” agreement in a form satisfactory to us that describes
our requirements on foreclosure, and may include an estoppel and general
release of claims that you or the Equity Owner may have against us, the
Entities, and related persons. We may charge a fee for our review of a proposed
mortgage or pledge and for the processing of a lender comfort letter. 

                              (b) Commercial Leases. You may lease or sublease
commercial space in the Hotel, or enter into concession arrangements for
operations in connection with the Hotel, in the ordinary course of business,
subject to our right to review and approve the nature of the proposed business
and the proposed brand and concept, all in keeping with our then current
Standards for System Hotels.

18

Ex 10.10
Franchise Agreement - Winston Salem HI&S

November 2010 - Hampton

12.
Condemnation and Casualty

          a.
Condemnation.
You must immediately inform us of any proposed taking of any portion of the
Hotel by eminent domain. If, in our business judgment, the taking is
significant enough to render the continued operation of the Hotel in accordance
with System Standards and guest expectations impractical, then we may terminate
this Agreement upon written notice to you. You will take all necessary steps to
permit us to participate in the proceeds of an eminent domain proceeding and/or
any insurance proceeds applicable to the condemnation. If such taking, in our
business judgment, does not require the termination of the Hotel, then you will
make all necessary repairs to make the Hotel conform to its condition,
character and appearance immediately before such taking, according to plans and
specifications approved by us. You will take all measures to ensure that the
resumption of normal operations at the Hotel is not unreasonably delayed.

          b.
Casualty.
You must immediately inform us if the Hotel is damaged by fire or other
casualty. If the damage or repair requires closing the Hotel, you may choose to
repair or rebuild the Hotel according to System Standards, provided you:
(i) begin reconstruction within four (4) months after closing; and
(ii) reopen the Hotel for continuous business operations as soon as
practicable (but in any event no later than one (1) year after the closing of
the Hotel), giving us at least thirty (30) days notice of the projected date of
reopening. Until we determine that the Hotel can be re-opened as a System
Hotel, the Hotel will not promote itself as a System Hotel or otherwise
identify itself with any of the Marks without our prior written consent. You
and we each have the right to terminate this Agreement if you elect not to
repair or rebuild the Hotel as set forth above in this Paragraph 12,
provided the terminating party gives the other party sixty (60) days written
notice, in which case we will not require you to pay Liquidated Damages; provided
however, if after the termination notice and before the expiration of three (3)
years thereafter or the natural expiration of the License Term, whichever is
earlier, you, or any of your Affiliates, have a controlling interest in and/or
operate a hotel at this Hotel Site and that hotel is not operated under a
license or franchise from one of the Entities, then you must pay us the
Liquidated Damages upon our demand. You will take all necessary steps to permit
us to participate in any insurance proceeds applicable to the business
interruption due to the casualty.

          c.
No Extensions of Term. Nothing in this Paragraph 12 will extend the License Term.

13.
Term of License

          Unless
terminated earlier, this Agreement will expire without notice on the date set
forth in the Rider. You acknowledge and agree that this Agreement is
non-renewable and that this Agreement confers upon you absolutely no rights of
license renewal or extension whatsoever following the expiration of the License
Term.

14.
Termination by Us

          a.
Termination with Opportunity to Cure. We may terminate this Agreement by written notice to you at any time
before its expiration on any of the following grounds:

                    (1)
You fail to pay us any sums due and owing to us or the Entities under this
Agreement within the cure period set forth in the notice;

                    (2)
You fail to comply with any provision of this Agreement, the Manual or any
System Standard and do not cure that default within the cure period set forth
in the notice; or

                    (3)
You do not purchase or maintain insurance required by this Agreement or do not
reimburse us for our purchase of insurance on your behalf.

19

Ex 10.10
Franchise Agreement - Winston Salem HI&S

November 2010 - Hampton

          b.
Immediate Termination by Us. We may immediately terminate this Agreement upon
notice to you and without any opportunity to cure the default if:

                    (1)
After curing any material breach of this Agreement or the Standards, you engage
in the same non-compliance within any consecutive twenty-four (24) month
period, whether or not the non-compliance is corrected after notice, which
pattern of non-compliance in and of itself will be deemed material; 

                    (2)
We send you three notices of material default in any twelve (12) month period,
regardless of whether the defaults have been cured;

                    (3)
You or any Guarantor fail to pay debts as they become due or admit in writing
your inability to pay your debts or you make a general assignment for the
benefit of your creditors; 

                    (4)
You: (i) file a voluntary petition in bankruptcy or any pleading seeking any
reorganization, liquidation, or dissolution under any law, or you admit or fail
to contest the material allegations of any such pleading filed against you or
the Hotel, and the action results in the entry of an order for relief against
you under the Bankruptcy Code, the adjudication of you as insolvent, or the
abatement of the claims of creditors of you or the Hotel under any law; or (ii)
have an order entered against you appointing a receiver for the Hotel or a
substantial part of your or the Hotel’s assets; or (iii) make an assignment for
the benefit of creditors, or similar disposition of the assets of the Hotel;

                    (5)
You or any Guarantor lose possession or the right to possession of all or a
significant part of the Hotel or Hotel Site, whether through foreclosure,
foreclosure of any lien, trust deed, or mortgage, loss of lease, or for any
other reason apart from those described in Paragraph 12; 

                    (6)
You fail to operate the Hotel for five (5) consecutive days, unless the failure
to operate is due to fire, flood, earthquake or similar causes beyond your
control, provided that you have taken reasonable steps to minimize the impact
of such events; 

                    (7)
You contest in any court or proceeding our ownership of the System or any part
of the System or the validity of any of the Marks; 

                    (8)
You or any Equity Owners with a controlling Equity Interest are or have been
convicted of a felony or any other offense or conduct, if we determine in our
business judgment it is likely to adversely reflect upon or affect the Hotel,
the System, us and/or any Entity; 

                    (9)
You conceal revenues, maintain false books and records of accounts, submit
false reports or information to us or otherwise attempt to defraud us; 

                    (10)
You, your Affiliate, or your Guarantor become a Competitor without our prior
written consent; 

                    (11)
You Transfer any interest in yourself, this Agreement, the Hotel or the Hotel
Site, other than in compliance with Paragraph 11 and its subparts; 

                    (12)
You or a Guarantor become a Specially Designated National or Restricted or
Blocked Person or are owned or controlled by a Specially Designated National or
Restricted or Blocked Person or fail to comply with the provisions of
Subparagraph 16.l., including a breach of the representations set forth
therein;

                    (13)
Information involving you or your Affiliates, whether provided by you or
obtained through our own investigation, discloses facts concerning you or your
Affiliates, including your or your Affiliates’ respective officers, directors,
shareholders, partners or members, and/or the Hotel, or title to the property
over which the Hotel is constructed or any other property used by the Hotel,
including leased commercial space, which, in our business judgment, is likely
to adversely reflect upon or affect in any

20

Ex 10.10
Franchise Agreement - Winston Salem HI&S

November 2010 - Hampton

manner, any gaming
licenses or permits held by the Entities or the then current stature of any of
the Entities with any gaming commission, board, or similar governmental or
regulatory agency, or the reputation or business of any of the Entities; 

                    (14)
Any Guarantor breaches its guarantee, or any guarantee fails to be a continuing
obligation fully enforceable against the person(s) signing the guarantee, or if
there is any inadequacy of the guarantee or Guarantor, and the Guarantor fails
to provide adequate assurances to us as we may request; or 

                    (15)
a threat or danger to public health or safety results from the construction,
maintenance, or operation of the Hotel.

          c.
Suspension/Interim Remedies by Us. If you are in default of this Agreement, we may
elect to postpone termination and impose an Interim Remedy, including the
suspension of our obligations under this Agreement and/or our or the Entities’
obligations under any other of Your Agreements:

                    (1)
We may suspend the Hotel from the Reservation Service and any reservation
and/or website services provided through or by us. We may remove the listing of
the Hotel from any directories or advertising we publish. If we suspend the
Hotel from the Reservation Service, we may divert reservations previously made
for the Hotel to other System Hotels or Network Hotels. 

                    (2)
We may disable all or any part of the software provided to you under Your
Agreements and/or may suspend any one or more of the information technology
and/or network services that we provide or support under Your Agreements.

                    (3)
We may charge you for costs related to suspending or disabling your right to
use any software systems or technology we provided to you, together with
intervention or administration fees as set forth in the Standards after the
date of our notice of default. 

                    (4)
You agree that our exercise of the right to elect Interim Remedies will not
result in actual or constructive termination or abandonment of this Agreement
and that our decision to elect Interim Remedies is in addition to, and apart
from, any other right or remedy we may have in this Agreement. If we exercise
the right to elect Interim Remedies, the exercise will not be a waiver of any
breach by you of any term, covenant or condition of this Agreement. You will
not be entitled to any compensation, including repayment, reimbursement, refund
or offsets, for any fees, charges, expenses or losses you may directly or
indirectly incur by reason of our exercise and/or withdrawal of any Interim
Remedy.

          d.
Liquidated Damages upon Termination. You acknowledge that the premature termination of
this Agreement will cause substantial damage to us, the actual amount of which
will be difficult to determine. Therefore, if we terminate this Agreement under
Subparagraph 14.a. or 14.b. as a result of your breach of this Agreement, or if
you owe Liquidated Damages pursuant to Subparagraph 12.b. of this Agreement, or
if you unilaterally terminate this Agreement, you will pay us Liquidated
Damages for the premature termination of the Agreement. You will owe Liquidated
Damages in addition to any outstanding fees and charges owed to us or any of
the Entities accruing through the date of termination. Payment of Liquidated
Damages is due the earlier of thirty (30) days following termination or the
Closing of any Change of Ownership transaction in which a New License is not
entered into; except that, if Liquidated Damages become due pursuant to
Paragraph 12.b., payment is due thirty (30) days after our demand. Nothing in this
Paragraph gives you any right to terminate this Agreement, but provides for the
calculation of damages in the event you do so.

          You
agree that Liquidated Damages are not a penalty and represent a reasonable
estimate of the minimum just and fair compensation for the damages we will
suffer as the result of your failure to operate the Hotel as a System Hotel in
compliance with this Agreement for the full License Term, assuming that we
would be able to replace the Hotel in the market within a reasonable time.

21

Ex 10.10
Franchise Agreement - Winston Salem HI&S

November 2010 - Hampton

          Liquidated
Damages for premature termination will be calculated by adding the result of
(1) plus the result of (2) where:

                    (1)
is calculated by multiplying the average monthly Gross Rooms Revenue of the
Hotel for the twenty-four (24) full calendar-month period immediately before
the month of termination by the Monthly Royalty Fee percentage under this
Agreement, without applying any discount to the standard fee percentage (this
product being the “Average Monthly Royalty Fees”), then
multiplying the Average Monthly Royalty Fees by thirty-six (36), or by such
lesser multiple as would represent the remaining full or partial months between
the date of termination and the expiration of the License Term. If the Hotel
has been open and operating as a System Hotel for less than twenty-four (24)
months, then we will multiply thirty-six (36) by the greater of (i) the Average
Monthly Royalty Fees from the date the Hotel opened as a System Hotel through
the month immediately before the month of termination, or (ii) the product of
the average Monthly Gross Rooms Revenue per Guest Room of all System Hotels in
operation in the US over the twelve (12) full calendar-month period immediately
before the month of termination, times the Monthly Royalty Fee percentage under
this Agreement (without applying any discount to the standard fee percentage)
multiplied by the number of Guest Rooms in the Hotel; and

                    (2)
is calculated by multiplying the average monthly Gross Rooms Revenue of the
Hotel for the twenty-four (24) full calendar-month period immediately before
the month of termination by the Monthly Program Fee percentage under this
Agreement, without applying any discount to the standard fee percentage (this
product being the “Average Monthly Program Fees”), then
multiplying the Average Monthly Program Fees by twelve (12), or by such lesser
multiple as would represent the remaining full or partial months between the
date of termination and the expiration of the License Term. If the Hotel has
been open and operating as a System Hotel for less than twenty-four (24)
months, then we will multiply twelve (12) by the greater of (i) the Average
Monthly Program Fees from the date the Hotel opened as a System Hotel through
the month immediately before the month of termination, or (ii) the product of
the average Monthly Gross Rooms Revenue per Guest Room of all System Hotels in
operation in the US over the twelve (12) full calendar-month period immediately
before the month of termination, times the Monthly Program Fee percentage under
this Agreement (without applying any discount to the standard fee percentage)
multiplied by the number of Guest Rooms in the Hotel.

          e. Actual Damages Under Special Circumstances.
You recognize that the Liquidated Damages described in Subparagraph 14.d. may
be inadequate to compensate us for additional harm we may suffer, by reason of
greater difficulty in re-entering the market, competitive damage to the System
or the Network, damage to goodwill of the Marks, and other similar harm, under
the following circumstances: (i) within twelve (12) months of each other, seven
(7) or more franchise license agreements for the Licensed Brand between
yourself (or any of your Affiliates) and us (or any of our Affiliates)
terminate before their expiration date either because you (or any of your
Affiliates) unilaterally terminate the agreements or because we or any of our
Affiliates terminate the agreements as a result of your or your Affiliate’s
breach or default or (ii) this Agreement terminates automatically or is
terminated by us (or any of our Affiliates) following an unapproved Transfer
either to a Competitor or to a buyer that converts the Hotel to a Competitor
hotel within two (2) years from the date this Agreement terminates. In any of
these circumstances, we reserve the right to seek actual damages in lieu of
Liquidated Damages. For purposes of this subparagraph only, Licensed Brand
includes Hampton Inn and Hampton Inn & Suites.

          f.
Your Obligations upon Termination or Expiration. On termination or expiration of
this Agreement you will:

                    (1)
immediately pay all sums due and owing to us or any of the Entities, including
any expenses incurred by us in obtaining injunctive relief for the enforcement
of this Agreement;

                    (2)
immediately cease operating the Hotel as a System Hotel and cease using the
System;

                    (3)
immediately cease using the Marks, the Trade Name, and any confusingly similar
names, marks, trade dress systems, insignia, symbols, or other rights,
procedures, and methods. You

22

Ex 10.10
Franchise Agreement - Winston Salem HI&S

November 2010 - Hampton

will deliver all
goods and materials containing the Marks to us and we will have the sole and
exclusive use of any items containing the Marks. You will immediately make any
specified changes to the location as we may reasonably require for this
purpose, which will include removal of the signs, custom decorations, and
promotional materials;

                    (4)
immediately cease representing yourself as then or formerly a System Hotel or
affiliated with the Licensed Brand or the Network;

                    (5)
immediately return all copies of the Manual and any other Proprietary
Information to us;

                    (6)
immediately cancel all assumed name or equivalent registrations relating to
your use of any Mark, notify the telephone company and all listing agencies and
directory publishers including Internet domain name granting authorities,
Internet service providers, global distribution systems, and web search engines
of the termination or expiration of your right to use the Marks, the Trade
Name, and any telephone number, any classified or other telephone directory
listings, Internet domain names, uniform resource locators, website names,
electronic mail addresses and search engine metatags and keywords associated
with the Hotel, and authorize their transfer to us; and

                    (7)
irrevocably assign and transfer to us (or to our designee) all of your right,
title and interest in any domain name listings and registrations that contain
any reference to our Marks, System, Network or Licensed Brand; notify the
applicable domain name registrars of the termination of your right to use any
domain name or Sites associated with the Marks or the Licensed Brand; and
authorize and instruct the cancellation of the domain name, or transfer of the
domain name to us (or our designee), as we specify. You will also delete all
references to our Marks, System, Network or Licensed Brand from any Sites you
own, maintain or operate beyond the expiration or termination of this
Agreement. 

15.
Relationship of Parties

          a.
No Agency Relationship. You are an independent contractor. Neither of us is
the legal representative or agent of the other or has the power to obligate the
other for any purpose. You acknowledge that we do not supervise or direct your
daily affairs and that you have exclusive control over your daily affairs. You
expressly acknowledge that we have a business relationship based entirely on,
and defined by, the express provisions of this Agreement and that no
partnership, joint venture, agency, fiduciary or employment relationship is
intended or created by reason of this Agreement. 

          b.
Notices to Public Concerning Your Independent Status. All contracts for the Hotel’s
operations and services at the Hotel will be in your name or in the name of
your Management Company. You will not enter into or sign any contracts in our
name or any Entity’s name or using the Marks or any acronyms or variations of
the Marks. You will disclose in all dealings with the public, suppliers and
third parties that you are an independent entity and that we have no liability
for your debts. 

16.
Miscellaneous

          a.
Severability and Interpretation. If any provision of this Agreement is held to be
unenforceable, void or voidable, that provision will be ineffective only to the
extent of the prohibition, without in any way invalidating or affecting the
remaining provisions of this Agreement, and all remaining provisions will
continue in effect, unless the unenforceability of the provision frustrates the
underlying purpose of this Agreement. If any provision of this Agreement is
held to be unenforceable due to its scope, but may be made enforceable by
limiting its scope, the provision will be considered amended to the minimum
extent necessary to make it enforceable. This Agreement will be interpreted
without interpreting any provision in favor of or against either of us by
reason of the drafting of the provision, or either of our positions relative to
the other. Any covenant, term or provision of this Agreement that provides for
continuing obligations after the expiration or termination of this Agreement
will survive any expiration or termination.

23

Ex 10.10
Franchise Agreement - Winston Salem HI&S

November 2010 - Hampton

          b.
Governing Law, Jurisdiction and Venue. We each agree that the State of New York has a deep
and well developed history of business decisional law. For this reason, we each
agree that except to the extent governed by the United States Trademark Act of
1946 (Lanham Act; 15 U.S.C. ¶ 1050 et seq.), as amended, this Agreement will be
construed in accordance with, and all disputes between us (whether in contract,
tort, or otherwise) arising out of or related to this Agreement, any breach of
this Agreement, or the relationship between us, will be governed by, the laws
of the State of New York without recourse to New York (or any other) choice of
law or conflicts of law principles. If, however, any provision of this
Agreement would not be enforceable under the laws of the State of New York, and
if the Hotel is located outside of New York and the provision would be
enforceable under the laws of the state in which the Hotel is located, then the
provision in question (and only that provision) will be interpreted and
construed under the laws of that state. Nothing in this paragraph is intended
to invoke the application of any franchise, business opportunity, antitrust,
“implied covenant,” unfair competition, fiduciary or any other doctrine of law
of the State of New York or any other state that would not otherwise apply
absent this Subparagraph 16.b.

          You
agree that any action brought by you against us arising out of or related to
this Agreement, any breach of this Agreement, or the relationship between us, must
be brought in the U.S. District Court for the Eastern District of Virginia, in
Alexandria, Virginia or if that court lacks subject matter jurisdiction, then
in a court of competent jurisdiction whose jurisdiction includes either Fairfax
County, Virginia or New York, New York. Any action brought by us or any Entity
against you arising out of or related to this Agreement, any breach of this
Agreement, or the relationship between us, may be brought by us in the U.S. District
Court for the Eastern District of Virginia, in Alexandria, Virginia or if that
court lacks subject matter jurisdiction, then in any court of competent
jurisdiction whose jurisdiction includes either Fairfax County, Virginia or New
York, New York, or the county and state where the Hotel is located. You consent
to personal jurisdiction and venue in each of these jurisdictions and waive,
and agree never to assert, move or otherwise claim that the venue in any of
these jurisdictions is for any reason improper, inconvenient, prejudicial or
otherwise inappropriate (including any claim under the judicial doctrine of forum non
conveniens).

          c.
Exclusive Benefit. This Agreement is exclusively for our and your benefit, and none of the
obligations of you or us in this Agreement will run to, or be enforceable by,
any other party (except for any rights we assign or delegate to one of the
Entities or covenants in favor of the Entities, which rights and covenants will
run to and be enforceable by the Entities or their successors and assigns) or
give rise to liability to a third party, except as otherwise specifically set
forth in this Agreement. 

          d.
Entire Agreement/Amendment/Waiver. You and we acknowledge that each of us wants all
terms of this business relationship defined in this written Agreement, and that
neither of us wants to enter into a business relationship with the other in
which any terms or obligations are subject to any oral statements or in which
oral statements serve as the basis for creating rights or obligations different
than or supplementary to the rights and obligations set forth in this
Agreement. Therefore, you and we agree that this Agreement and all of its
attachments, documents, schedules, exhibits, and any other information
specifically incorporated into this Agreement by reference: (i) will be construed
together as the entire agreement between you and us in respect to the Hotel and
any other aspect of the relationship between you and us; and (ii) will
supersede and cancel any prior and/or contemporaneous discussions or writings
(whether described as representations, inducements, promises, agreements or by
any other term) between you and us. You acknowledge that: (i) no officer,
employee, or other servant or agent of ours is authorized to make any
representation, warranty, or other promise not contained in this Agreement;
(ii) no claims, representations or warranties of earnings, sales, profits,
success or failure of the Hotel have been made to you; and (iii) you have not
relied on any such communications in entering into this Agreement. No change,
termination, or attempted waiver or cancellation of any provision of this
Agreement will bind us unless in writing, specifically designated as an
amendment or waiver, and signed by one of our officers. We may condition our
agreement to any amendment or waiver on receiving from you, in a form
satisfactory to us, an estoppel and general release of claims that you may have
against us, the Entities, and related parties. No failure by us or by any of
the Entities to exercise any power given us under this Agreement or to insist
on strict compliance by you with any of your obligations, and no custom or
practice at variance with the terms of this Agreement, will be considered a
waiver of our or any Entity’s right to

24

Ex 10.10
Franchise Agreement - Winston Salem HI&S

November 2010 - Hampton

demand exact
compliance with the terms of this Agreement. Nothing in this Subparagraph 16.d.
disclaims any representation made in the Franchise Disclosure Document provided
to you for the Licensed Brand in connection with the offer of this Agreement.

          e.
Consent; Business Judgment. Wherever our consent or approval is required in this
Agreement, unless the provision specifically indicates otherwise, we have the
right to withhold our approval at our option, in our business judgment, taking
into consideration our assessment of the long-term interests of the System
overall. We may withhold any and all consents or approvals required by this
Agreement if you are in default or breach of this Agreement. Our approvals and
consents will not be effective unless given in writing and signed by one of our
duly authorized representatives. In no event may you make any claim for money
damages based on any claim that we have unreasonably withheld or delayed any
consent or approval to a proposed act by you under the terms of this Agreement.
You also may not claim damages by way of set-off, counterclaim or defense for
our withholding of consent. Your sole remedy for the claim will be an action or
proceeding to enforce the provisions of this Agreement by specific performance
or by declaratory judgment.

          f.
Notices. Notices under this Agreement must be in writing and
must be delivered in person, by prepaid overnight commercial delivery service,
or by prepaid overnight mail, registered or certified, with return-receipt
requested, addressed as follows: Notices to us must be sent to us at 7930 Jones
Branch Drive, Suite 1100, McLean, VA 22102, ATTN: General Counsel. We will send
notices to your address set forth in the Rider. If you want to change the name
or address for notice to you, you must do so in writing, signed by you or your
duly authorized representative, designating a single address for notice, which
may not be a P.O. Box, in compliance with this subparagraph. notice will be
deemed effective upon the earlier of: 1) receipt or first refusal of delivery;
2) one day after posting if sent via overnight commercial delivery service or
overnight United States Mail; or 3) three days after placement in the United
States mail if overnight delivery is not available to the notice address.

          g.
General Release. With the exception of claims related to representations contained in
the Franchise Disclosure Document for the Licensed Brand, you, on your own
behalf and on behalf of, as applicable, your officers, directors, managers,
employees, heirs, administrators, executors, agents and representatives and
their respective successors and assigns hereby release, remise, acquit and
forever discharge us and the Entities and our and their respective officers,
directors, employees, managers, agents, representatives and their respective
successors and assigns from any and all actions, claims, causes of action,
suits, rights, debts, liabilities, accounts, agreements, covenants, contracts,
promises, warranties, judgments, executions, demands, damages, costs and
expenses, whether known or unknown at this time, of any kind or nature,
absolute or contingent, existing at law or in equity, on account of any matter,
cause or thing whatsoever that has happened, developed or occurred before you
sign and deliver this Agreement to us. This release will survive the
termination of this Agreement. 

          h.
Remedies Cumulative. The remedies provided in this Agreement are cumulative. These remedies
are not exclusive of any other remedies that you or we may be entitled in case
of any breach or threatened breach of the terms and provisions of this
Agreement.

          i.
Economic Conditions Not a Defense. Neither general economic downturn or conditions nor
your own financial inability to perform the terms of this Agreement will be a
defense to an action by us or one of the Entities for your breach of this
Agreement. 

          j.
Representations and Warranties. You warrant, represent and agree that all statements
in the your application, submitted to us in anticipation of this Agreement, and
all other documents and information submitted to us by you or on your behalf
are true, correct and complete as of the date of this Agreement. You further
represent and warrant to us that: 

	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 you have independently
 investigated the risks of operating a hotel under the Licensed Brand,
 including current and potential market conditions and competitive factors and
 risks, and have made an independent evaluation of all such matters and reviewed
 our Franchise Disclosure Document, if applicable; 

 

25

Ex 10.10
Franchise Agreement - Winston Salem HI&S

November 2010 - Hampton

	
  

 	
  

 	
  

 
	
  

 	
 (ii)

 	
 neither we nor our representatives
 have made any promises, representations or agreements other than those provided
 in the Agreement or in our Franchise Disclosure Document provided to you in
 connection with the offer of this Agreement, if applicable, and you
 acknowledge that you are not relying on any promises, representations or
 agreements about us or the franchise not expressly contained in this
 Agreement in making your decision to sign this Agreement;

 
	
  

 	
 (iii)

 	
 you have the full legal power
 authority and legal right to enter into, perform and observe this Agreement; 

 
	
  

 	
 (iv)

 	
 this Agreement constitutes a
 legal, valid and binding obligation of Licensee and your entry into,
 performance and observation of this Agreement will not constitute a breach or
 default of any agreement to which you are a party or of any Applicable Law; 

 
	
  

 	
 (v)

 	
 if you are a corporation, limited
 liability company, or other entity, you are, and throughout the License Term
 will be, duly formed and validly existing, in good standing in the state in
 which you are organized, and are and will be authorized to do business in the
 state in which the Hotel is located; 

 
	
  

 	
 (vi)

 	
 no Equity Interest has been
 issued, converted to, or is held as, bearer shares or any other form of
 ownership, for which there is no traceable record of the identity of the
 legal and beneficial owner of such Equity Interest.

 

          You
hereby indemnify and hold us harmless from any breach of these representations
and warranties. These warranties and representations will survive the
termination of this Agreement.

          k.
Counterparts.
This Agreement may be signed in counterparts, each of which will be considered
an original.

          l.
Restricted Persons and Anti-bribery Representations and Warranties. You represent and warrant to us and
the Entities that you (including your directors and officers, senior management
and shareholders (or other persons) having a controlling interest in you), and
the owner of the Hotel or the Hotel Site are not, and are not owned or
controlled by, or acting on behalf of, any of the following “Restricted Persons”: (1) the government of
any country that is subject to an embargo imposed by the United States
government; (2) individuals or entities (collectively, “Persons”) located in or organized under the
laws of any country that is subject to an embargo imposed by the United States
government; (3) Persons ordinarily resident in any country that is subject to
an embargo imposed by the United States government; or (4) Persons identified
from time to time by any government or legal authority under Applicable Laws as
a Person with whom dealings and transactions by us or the Entities are
prohibited or restricted, including Persons designated on the U.S. Department
of the Treasury’s Office of Foreign Assets Control (OFAC) List of Specially
Designated Nationals and Other Blocked Persons (including terrorists and
narcotics traffickers); and similar restricted party listings, including those
maintained by other governments pursuant to applicable United Nations, regional
or national trade or financial sanctions. You will notify us in writing
immediately upon the occurrence of any event which would render the foregoing
representations and warranties of this Subparagraph 16.l. incorrect. 

          You
further represent and warrant to us and the Entities that you will not directly
or indirectly pay, offer, give or promise to pay or authorize the payment of
any monies or other things of value to:

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 an official or employee of a
 government department, agency or instrumentality, state-owned or
 controlled enterprise or public international organization; 

 
	
  

 	
 (b)

 	
 any political party or candidate
 for political office; or 

 
	
  

 	
 (c)

 	
 any other person at the
 suggestion, request or direction or for the benefit of any of the
 above-described persons and entities 

 

if any such
payment, offer, act or authorization is for purposes of influencing official
actions or decisions or securing any improper advantage in order to obtain or
retain business, or engaging in acts or transactions otherwise in violation of
any applicable anti-bribery legislation.

26

Ex 10.10
Franchise Agreement - Winston Salem HI&S

November 2010 - Hampton

          m.
Attorneys’ Fees and Costs. If either party is required to employ legal counsel
or to incur other expenses to enforce any provision of this Agreement or defend
any claim by the other, then the prevailing party in any resulting dispute will
be entitled to recover from the non-prevailing party the amount of all
reasonable fees of attorneys and experts, court costs, and all other expenses
incurred in enforcing such obligation or in defending against such claim,
demand, action, or proceeding.

          n.
Interest.
Any sum owed to us or the Entities by you or paid by us or the Entities on your
behalf will bear interest from the date due until paid by you at the rate of
eighteen percent (18%) per annum or, if lower, the maximum lawful rate.

          o.
Successors and Assigns. The terms and provisions of this Agreement will
inure to the benefit of and be binding upon the permitted successors and
assigns of the parties. 

          p.
Our Delegation of Rights and Responsibility. In addition to the rights granted to
us in Paragraph 3 and Subparagraph 11.a., we reserve the right to delegate to
one or more of the Entities at any time, any and all of our rights, obligations
or requirements under this Agreement, and to require that you submit any
relevant materials and documents otherwise requiring approval by us under this
Agreement to such Entity, in which case approval by such Entity will be
conclusively deemed to be approval by us. During the period of such delegation
or designation, any act or direction by such Entity with respect to this
Agreement will be deemed the act or direction of us. We may revoke any such
delegation or designation at any time. You acknowledge and agree that such
delegation may result in one or more of the Entities which operate, license, or
otherwise support brands other than the Licensed Brand, exercising or
performing on our behalf any or all rights, obligations or requirements under
this Agreement or performing shared services on our behalf.

17.
WAIVER OF JURY TRIAL AND PUNITIVE DAMAGES

          a.
IF EITHER PARTY INITIATES LITIGATION INVOLVING THIS AGREEMENT OR ANY ASPECT OF
THE RELATIONSHIP BETWEEN US (EVEN IF OTHER PARTIES OR OTHER CLAIMS ARE INCLUDED
IN SUCH LITIGATION), ALL THE PARTIES WAIVE THEIR RIGHT TO A TRIAL BY JURY. 

          b. IN ANY DISPUTE BETWEEN THE PARTIES, ARISING
OUT OF OR RELATED TO THIS AGREEMENT, ANY BREACH OF THIS AGREEMENT, OR THE
RELATIONSHIP BETWEEN THE PARTIES, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE, ALL PARTIES WAIVE ANY RIGHT THEY MAY HAVE TO PUNITIVE OR EXEMPLARY
DAMAGES FROM THE OTHER. NOTHING IN THIS PARAGRAPH LIMITS OUR RIGHT OR THE RIGHT
OF AN INDEMNIFIED PARTY TO BE INDEMNIFIED AGAINST THE PAYMENT OF PUNITIVE OR
EXEMPLARY DAMAGES TO A THIRD PARTY. THE PARTIES ACKNOWLEDGE THAT LIQUIDATED
DAMAGES PAYABLE BY LICENSEE UNDER THIS AGREEMENT (WHETHER PRE-OPENING
LIQUIDATED DAMAGES, TRADEMARK LIQUIDATED DAMAGES, OR LIQUIDATED DAMAGES FOR
EARLY TERMINATION) ARE NOT PUNITIVE OR EXEMPLARY DAMAGES.

THIS AGREEMENT
CONTINUES WITH AN ATTACHMENT A AND ATTACHMENT B, EACH OF

WHICH IS A PART OF THIS AGREEMENT.

27

Ex 10.10
Franchise Agreement - Winston Salem HI&S

November 2010 - Hampton

ATTACHMENT A - PERFORMANCE CONDITIONS:

CHANGE OF OWNERSHIP

Intentionally
deleted

Attachment A - 1

Ex 10.10
Franchise Agreement - Winston Salem HI&S

November 2010 - Hampton

ATTACHMENT B –

RIDER TO FRANCHISE LICENSE AGREEMENT

	
  

 	
  

 	
  

 
	
 Effective Date:

 	
  

 	
 March 15, 2011

 (the Closing Date) 

 
	
  

 	
  

 	
  

 
	
 Licensor Name:

 	
  

 	
 HAMPTON INNS FRANCHISE LLC, a Delaware limited liability
 company 

 
	
  

 	
  

 	
  

 
	
 Licensed Brand:

 	
  

 	
 Hampton Inn & Suites (excluding Hampton Inn and any
 other brands or product lines containing “Hampton” in the name) 

 
	
  

 	
  

 	
  

 
	
 Initial Approved Hotel Name (Trade

 Name):

 	
  

 	
 Hampton Inn & Suites Winston-Salem/University Area

 
	
  

 	
  

 	
  

 
	
 Principal Mark in Licensed Brand:

 	
  

 	
 Hampton

 
	
  

 	
  

 	
  

 
	
 Licensee Name and Address (Attn:

 Principal Legal Correspondent):

 	
  

 	
 Apple Ten Hospitality Management, Inc.

 (Krissy Gathright)

 814 East Main Street

 Richmond, Virginia 23219

 Telephone: (804) 344-8121

 Facsimile: (804) 344-8129

 Email: kgathright@applereit.com

 
	
  

 	
  

 	
  

 
	
 Address of Hotel:

 	
  

 	
 309 Summit Square Court

 Winston-Salem, North Carolina 27105 

 
	
  

 	
  

 	
  

 
	
 Initial Number of Approved Guest

 Rooms:

 	
  

 	
 94

 
	
  

 	
  

 	
  

 
	
 Plans Submission Dates:

 	
  

 	
 Not applicable 

 
	
  

 	
  

 	
  

 
	
 Renovation Commencement Date:

 	
  

 	
 Not applicable

 
	
  

 	
  

 	
  

 
	
 Renovation Work Completion Date:

 	
  

 	
 Not applicable

 
	
  

 	
  

 	
  

 
	
 Expiration of License Term:

 	
  

 	
 At midnight on July 31. 2029

 
	
  

 	
  

 	
  

 
	
 Monthly Program Fee:

 	
  

 	
 Four percent (4%) of the Hotel’s Gross Rooms Revenue for
 the preceding calendar month.

 
	
  

 	
  

 	
  

 
	
 Monthly Royalty Fee:

 	
  

 	
 Five percent (5%) of the Hotel’s Gross Rooms Revenue for
 the preceding calendar month.

 

Additional
Requirements/Special Provisions:

	
  

 	
  

 
	
 •

 	
 Paragraph
 1 – Definitions – Publicly Traded Equity Interest: has been modified.

 

Attachment B - 1

Ex 10.10
Franchise Agreement - Winston Salem HI&S

November 2010 - Hampton

	
  

 	
  

 
	
 •

 	
 Restricted
 Area Provision 

 
	
  

 	
  

 
	
  

 	
           Notwithstanding
 the provisions of Paragraph 2 of this Agreement, from the Effective Date
 until midnight July 30, 2011 (the “Restrictive Period”), neither we nor any
 of the Entities will open, or allow to open, a hotel or motel under the
 Licensed Brand or under the Hampton Inn brand (collectively, the “Restricted
 Brands”), as such names may be changed by us from time to time, within the
 Restricted Area (described below). This restriction does not apply to any
 hotel or motel that is currently open or under construction or has been
 approved for development or opening as the same Restricted Brand hotel as of
 the Effective Date (“Existing Hotel”). The term Existing Hotel also includes
 any hotel located or to be located within the Restrictive Area that replaces
 such Existing Hotel under the Restricted Brand.

 
	
  

 	
  

 
	
  

 	
           The
 restrictions also do not apply to: (1) any hotel(s) or motel(s) under brands
 other than the Restricted Brands; (2) any hotel(s) or motel(s) that will not
 begin operating under the Restricted Brands until after the expiration of the
 Restrictive Period; (3) any gaming-oriented
 hotels or facilities using the Restricted Brands; (4) any shared ownership
 properties (commonly known as “vacation ownership” or “time share ownership”
 or similar real estate properties) under the Restricted Brands; and (5) any
 hotel(s), motel(s), or inn(s) that are part of a chain or group of four (4)
 or more hotels, motels, or inns that we or the Entities, as a result of a
 single transaction or group of related transactions, own, operate, acquire,
 lease, manage, franchise, license, or join through a merger, acquisition or
 marketing agreement (or otherwise), whether under their existing name or the
 Restricted Brands name or any other name.

 
	
  

 	
  

 
	
  

 	
           Restricted
 Area as used in this provision means the area located
 within the following boundaries:

 

	
  

 	
  

 
	
  

 	
 a three (3) mile radius of the Hotel, the center
 point of which is the front door of the Hotel. This Restricted Area is generally
 illustrated on the map attached to, and incorporated by reference into, this
 Agreement as Exhibit A. If there is a conflict between Exhibit A and this narrative
 description, this description will control.

 

	
  

 	
  

 
	
 •

 	
 All references in this Agreement to
 the “Opening Date” will mean the “Effective Date.”

 

Your Ownership
Structure: 

               See
Attached Schedule 1

Ownership Structure
of Affiliate Fee Owner or Lessor/Sublessor of the Hotel or Hotel Site: 

               See
Attached Schedule 2

 (Signatures on following page.)

Attachment B - 2

Ex 10.10
Franchise Agreement - Winston Salem HI&S

November 2010 - Hampton

IN WITNESS WHEREOF, the parties have executed
this Agreement, which has been entered into and is effective as of the
Effective Date set forth above.

	
  

 	
  

 	
  

 
	
 LICENSEE:

 	
 LICENSOR:

 
	
  

 	
  

 
	
 APPLE
 TEN HOSPITALITY MANAGEMENT, INC., 
a Virginia corporation

 	
 HAMPTON
 INNS FRANCHISE LLC,
a Delaware limited liability company

 
	
  

 	
  

 	
  

 
	
 By: /s/ Justin G. Knight

 	
 By:

 	
 /s/ Scott Schrank

 
	

 

 	
  

 	

 

 
	
  

 	
  

 	
  

 
	
 Name: Justin G. Knight

 	
 Name:

 	
 Scott Schrank

 
	

 

 	
  

 	

 

 
	
  

 	
  

 	
 Authorized Signatory

 
	
  

 	
  

 	
  

 
	
 Title: President

 	
  

 	
  

 
	

 

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 Executed on: March 14, 2011

 	
 Executed on: March 18, 2011

 
	

 

 	

 

 

Attachment B - 3

Ex 10.10
Franchise Agreement - Winston Salem HI&S

November 2010 - Hampton

SCHEDULE 1

	
  

 	
  

 
	
 Your
 Ownership Structure:

 	
 APPLE
 TEN HOSPITALITY MANAGEMENT, INC.

 
	
  

 	
 a Virginia corporation

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Name
 (Shareholder, Partner,
Member, and Manager)

 	
  

 	
 Nature of
 Ownership Interest

 	
  

 	
 % Interest

 
	

 

 	
  

 	

 

 	
  

 	

 

 
	
  

 
	
 Apple Ten Hospitality, Inc.

 	
  

 	
 Sole Shareholder

 	
  

 	
 100%

 
	
 Apple REIT Ten,
 Inc.          100%

 (a public REIT)

 	
  

 	
  

 	
  

 	
  

 

Schedule 1

Ex 10.10
Franchise Agreement - Winston Salem HI&S

November 2010 - Hampton

SCHEDULE 2

Ownership Structure
of Affiliate Fee Owner or Lessor/Sublessor of the Hotel or Hotel Site: 

APPLE TEN NORTH CAROLINA, L.P.,

a Virginia
limited partnership

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Name
 (Shareholder, Partner,

 Member, and Manager)

 	
  

 	
 Nature of
 Ownership Interest

 	
  

 	
 % Interest

 
	

 

 	
  

 	

 

 	
  

 	

 

 
	
  

 
	
 Apple Ten NC GP, Inc.

 	
  

 	
 General Partner

 	
  

 	
 1%

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Apple Ten Hospitality Ownership,
 Inc.          100%

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Apple Ten Hospitality, Inc.
           100%

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Apple REIT Ten,
 Inc.          100%

 (a public REIT)

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Apple Ten NC LP, Inc.

 	
  

 	
 Limited Partner

 	
  

 	
 99%

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Apple Ten Hospitality Ownership,
 Inc.          100%

 (see above for structure)

 	
  

 	
  

 	
  

 	
  

 

Schedule 2

Ex 10.10
Franchise Agreement - Winston Salem HI&S

November 2010 - Hampton

Exhibit A – RESTRICTIVE AREA MAP 

Exhibit A 

Ex 10.10
Franchise Agreement - Winston Salem HI&S

November 2010 - Hampton

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00189-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00189-of-00352.parquet"}]]