Document:

EXHIBIT 10.18

 Exhibit 10.18 
 SOMERSET, NJ (CY) 
 HOTEL LEASE AGREEMENT 
 EFFECTIVE NOVEMBER 9, 2007 
 BETWEEN

 APPLE EIGHT HOSPITALITY OWNERSHIP, INC., 
 A VIRGINIA CORPORATION 
 AS LESSOR 
 AND 
 APPLE EIGHT HOSPITALITY MANAGEMENT, INC., 
 A VIRGINIA CORPORATION 
 AS LESSEE

 TABLE OF CONTENTS 
  

							
	 	  	PAGE
	ARTICLE 1 LEASED PROPERTY; OTHER DEFINITIONS	  	1
		  	1.1	  	Leased Property	  	1
		  	1.2.	  	Definitions	  	2
	ARTICLE 2 TERM; TERMINATION	  	14
		  	2.1.	  	Term	  	14
		  	2.2.	  	Lessor's Option to Terminate Lease	  	15
		  	2.3.	  	Transition Procedures	  	15
		  	2.4.	  	Holding Over	  	17
	ARTICLE 3 RENT; RENT ADJUSTMENTS	  	18
		  	3.1.	  	Rent	  	18
		  	3.2.	  	Confirmation of Percentage Rent	  	21
		  	3.3.	  	Additional Charges	  	21
		  	3.4.	  	Net Lease; No Termination, Abatement, Etc.	  	22
		  	3.5.	  	Material Changes in Economic Climate	  	22
		  	3.6.	  	Rent Adjustment: Basic Assumptions Incorrect	  	24
	ARTICLE 4 ANNUAL BUDGETS; BOOKS AND RECORDS	  	25
		  	4.1.	  	Annual Budget	  	25
		  	4.2.	  	Books and Records	  	25
	ARTICLE 5 IMPOSITIONS; HOTEL COSTS	  	26
		  	5.1.	  	Payment of Impositions	  	26
		  	5.2.	  	Notice of Impositions	  	27
		  	5.3.	  	Adjustment of Impositions	  	27
		  	5.4.	  	Utility Charges	  	27
		  	5.5.	  	Insurance Premiums	  	27
		  	5.6.	  	Franchise Fees	  	27
		  	5.7.	  	Ground Rent	  	27
	ARTICLE 6 LEASED PROPERTY; LESSEE'S PERSONAL PROPERTY	  	27
		  	6.1.	  	Ownership of the Leased Property	  	27
		  	6.2.	  	Lessee's Personal Property	  	27
		  	6.3.	  	Lessor's Lien	  	28
		  	6.4.	  	Lessor's Option to Purchase Assets of Lessee	  	28
	ARTICLE 7 CONDITION AND USE OF LEASED PROPERTY	  	29
		  	7.1.	  	Condition of the Leased Property	  	29
		  	7.2.	  	Use of the Leased Property	  	29
		  	7.3.	  	Lessor to Grant Easements, Etc.	  	30
	ARTICLE 8 LESSEE'S COMPLIANCE WITH LAW; ENVIRONMENTAL COVENANTS	  	30
		  	8.1.	  	Compliance with Legal and Insurance Requirements, Etc.	  	30
		  	8.2.	  	Legal Requirement Covenants	  	31
		  	8.3.	  	Environmental Covenants	  	32
	ARTICLE 9 MAINTENANCE AND REPAIRS; ENCROACHMENTS AND RESTRICTIONS	  	34
		  	9.1.	  	Maintenance and Repairs	  	34
		  	9.2.	  	Encroachments, Restrictions, Etc.	  	35

  

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	ARTICLE 10 ALTERATIONS AND IMPROVEMENTS; FF&E RESERVE	  	36
		  	10.1.	  	Alterations	  	36
		  	10.2.	  	Salvage	  	36
		  	10.3.	  	Joint Use Agreements	  	36
		  	10.4.	  	[Reserved]	  	36
		  	10.5.	  	Furniture, Fixture and Equipment Allowance	  	36
	ARTICLE 11 COMPLIANCE WITH FRANCHISE	  	37
		  	11.1.	  	Compliance with Franchise Agreement and Management Agreement	  	37
	ARTICLE 12 PERMITTED LIENS AND CONTESTS	  	37
		  	12.1.	  	Liens	  	37
		  	12.2.	  	Permitted Contests	  	38
	ARTICLE 13 INSURANCE REQUIREMENTS	  	39
		  	13.1.	  	General Insurance Requirements	  	39
		  	13.2.	  	Replacement Cost	  	40
		  	13.3.	  	Waiver of Subrogation	  	40
		  	13.4.	  	Form Satisfactory, Etc.	  	40
		  	13.5.	  	Increase in Limits	  	41
		  	13.6.	  	Blanket Policy	  	41
		  	13.7.	  	No Separate Insurance	  	41
		  	13.8.	  	Reports On Insurance Claims	  	42
	ARTICLE 14 CASUALTY INSURANCE PROCEEDS; RECONSTRUCTION	  	42
		  	14.1.	  	Insurance Proceeds	  	42
		  	14.2.	  	Reconstruction in the Event of Damage or Destruction Covered by Insurance	  	42
		  	14.3.	  	Reconstruction in the Event of Damage or Destruction Not Covered by Insurance	  	43
		  	14.4.	  	Lessee's Property	  	44
		  	14.5.	  	Abatement of Rent	  	44
		  	14.6.	  	Damage Near End of Term	  	44
		  	14.7.	  	Waiver	  	44
	ARTICLE 15 CONDEMNATION; AWARD ALLOCATION	  	44
		  	15.1.	  	Definitions	  	44
		  	15.2.	  	Parties' Rights and Obligations	  	45
		  	15.3.	  	Total Taking	  	45
		  	15.4.	  	Allocation of Award	  	45
		  	15.5.	  	Partial Taking	  	45
		  	15.6.	  	Temporary Taking	  	45
	ARTICLE 16 DEFAULT BY LESSEE; LESSOR'S REMEDIES	  	46
		  	16.1.	  	Events of Default	  	46
		  	16.2.	  	Surrender	  	47
		  	16.3.	  	Damages	  	48
		  	16.4.	  	Waiver	  	49
		  	16.5.	  	Application of Funds	  	49
		  	16.6.	  	Lessor's Right to Cure Lessee's Default	  	49
	ARTICLE 17 DEFAULT BY LESSOR; LESSEE'S REMEDIES	  	49
		  	17.1.	  	Breach by Lessor	  	49
		  	17.2.	  	Lessee's Right to Cure	  	50
		  	17.3.	  	Provisions Relating to Purchase of the Leased Property by Lessee	  	50

  

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	ARTICLE 18 INDEMNIFICATION	  	51
		  	18.1.	  	Indemnification	  	51
	ARTICLE 19 REIT REQUIREMENTS AND RESTRICTIONS	  	52
		  	19.1.	  	Personal Property Limitation	  	52
		  	19.2.	  	Sublease Rent Limitation	  	52
		  	19.3.	  	Sublease Tenant Limitation	  	52
		  	19.4.	  	Lessee Ownership Limitations	  	52
		  	19.5.	  	Lessee Officer and Employee Limitation	  	52
		  	19.6.	  	Payments to Affiliates of Lessee	  	53
	ARTICLE 20 SUBLETTING AND ASSIGNMENT	  	53
		  	20.1.	  	Subletting and Assignment	  	53
		  	20.2.	  	Attornment	  	53
		  	20.3.	  	Conveyance by Lessor	  	54
	ARTICLE 21 QUIET ENJOYMENT; RISK OF LOSS	  	54
		  	21.1.	  	Quiet Enjoyment	  	54
		  	21.2.	  	Risk of Loss	  	54
	ARTICLE 22 LESSOR MORTGAGES; SUBORDINATION OF LEASE	  	54
		  	22.1.	  	Lessor May Grant Liens	  	54
		  	22.2.	  	Subordination of Lease	  	55
	ARTICLE 23 ESTOPPEL CERTIFICATES; FINANCIAL STATEMENTS; INSPECTION RIGHTS	  	55
		  	23.1.	  	Estoppel Certificates; Financial Statements	  	55
		  	23.2.	  	Lessor's Right to Inspect	  	56
	ARTICLE 24 APPRAISERS	  	56
		  	24.1.	  	Appraisers	  	56
	ARTICLE 25 ARBITRATION AND DISPUTE RESOLUTION PROCEDURES	  	57
		  	25.1.	  	Arbitration	  	57
		  	25.2.	  	Alternative Arbitration	  	57
		  	25.3.	  	Arbitration Procedure	  	58
	ARTICLE 26 NOTICES	  	58
		  	26.1.	  	Notices	  	58
	ARTICLE 27 MISCELLANEOUS	  	58
		  	27.1.	  	No Waiver	  	58
		  	27.2.	  	Remedies Cumulative	  	59
		  	27.3.	  	Waiver of Trial by Jury	  	59
		  	27.4.	  	Acceptance of Surrender	  	59
		  	27.5.	  	No Merger of Title	  	59
		  	27.6.	  	Waiver of Presentment, Etc.	  	59
		  	27.7.	  	Action for Damages	  	59
		  	27.8.	  	Lease Assumption in Bankruptcy Proceeding	  	59
		  	27.9.	  	Enforceability	  	60
		  	27.10.	  	Memorandum of Lease	  	60

  

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	Exhibit A – Legal Description
	Exhibit B – Space Leases
	Schedule 2.1 – Commencement Dates
	Schedule 3.1(a) – Base Rents
	Schedule 3.1(b) – Suite Revenue Breakpoint

  

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 HOTEL LEASE AGREEMENT 
 THIS HOTEL LEASE AGREEMENT (hereinafter called “Lease”), effective as of the 9th day of November, 2007, by and between APPLE EIGHT HOSPITALITY OWNERSHIP, INC., a Virginia corporation (hereinafter called “Lessor”), and APPLE EIGHT
HOSPITALITY MANAGEMENT, INC., a Virginia corporation (hereinafter called “Lessee”), provides as follows: 
 AGREEMENT:

 Lessor, for and in consideration of the payment of rent by Lessee to Lessor, the covenants and agreements to be performed by
Lessee, and upon the terms and conditions hereinafter stated, does hereby rent and lease unto Lessee, and Lessee does hereby rent and lease from Lessor, the Leased Property. 
 ARTICLE 1 
 LEASED PROPERTY; OTHER DEFINITIONS 
 1.1. Leased Property. The Leased Property shall mean and is comprised of Lessor’s interest in the following: 
 (a) Landlord’s leasehold interest in the land described in Exhibit A attached hereto and by reference incorporated herein (the
“Land”); 
 (b) all buildings, structures and other improvements of every kind including, but not limited to, alleyways and
connecting tunnels, sidewalks, utility pipes, conduits and lines (on-site and offsite), parking areas and roadways appurtenant to such buildings and structures presently situated upon the Land (collectively, the “Leased Improvements”);

 (c) all easements, rights and appurtenances relating to the Land and the Leased Improvements; 
 (d) all equipment, machinery, fixtures, and other items of property required for or incidental to the use of the Leased Improvements as a hotel,
including all components thereof, now and hereafter permanently affixed to or incorporated into the Leased Improvements, including, without limitation, all furnaces, boilers, heaters, electrical equipment, heating, plumbing, lighting, ventilating,
refrigerating, incineration, air and water pollution control, waste disposal, air-cooling and air-conditioning systems and apparatus, sprinkler systems and fire and theft protection equipment, all of which to the greatest extent permitted by law are
hereby deemed by the parties hereto to constitute real estate, together with all replacements, modifications, alterations and additions thereto (collectively, the “Fixtures”); 
 (e) all furniture and furnishings and all other items of personal property (excluding Inventory and personal property owned by Lessee) located on, and
used in connection with, the operation of the Leased Improvements as a hotel, together with all replacements, modifications, alterations and additions thereto; and 

 LESS AND EXCEPT all portions of the foregoing that are leased under Space Leases and all right, title and
interest of Lessor under the Space Leases (including any rents, security deposits or collateral held by or owing to Lessor pursuant thereto). 
 THE LEASED
PROPERTY IS DEMISED IN ITS PRESENT CONDITION WITHOUT REPRESENTATION OR WARRANTY (EXPRESSED OR IMPLIED) BY LESSOR AND SUBJECT TO THE RIGHTS OF PARTIES IN POSSESSION, AND TO THE EXISTING STATE OF TITLE INCLUDING ALL COVENANTS, CONDITIONS,
RESTRICTIONS, EASEMENTS AND OTHER MATTERS OF RECORD INCLUDING ALL APPLICABLE LEGAL REQUIREMENTS AND OTHER MATTERS WHICH WOULD BE DISCLOSED BY AN INSPECTION OF THE LEASED PROPERTY OR BY AN ACCURATE SURVEY THEREOF. 
 1.2. Definitions. For all purposes of this Lease, except as otherwise expressly provided or unless the context otherwise requires, (a) the
terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular, (b) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with
generally accepted accounting principles as are at the time applicable, (c) all references in this Lease to designated “Articles,” “Sections” and other subdivisions are to the designated Articles, Sections and other
subdivisions of this Lease and (d) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Lease as a whole and not to any particular Article, Section or other subdivision:

 Additional Charges: As defined in Section 3.3. 
 Affiliate: As used in this Lease the term “Affiliate” of a Person shall mean (a) any Person that, directly or indirectly, controls or is controlled by or is under common control with such Person,
(b) any other Person that owns, beneficially, directly or indirectly, ten percent (10%) or more of the outstanding capital stock, shares or equity interests of such Person, or (c) any officer, director, employee, partner, manager or
trustee of such Person or any Person controlling, controlled by or under common control with such Person or any Person that owns, beneficially, directly or indirectly, ten percent (10%) or more of the outstanding capital stock, shares or equity
interests of such Person (excluding trustees and Persons serving in similar capacities who are not otherwise an Affiliate of such Person). For the purposes of this definition, “control” (including the correlative meanings of the terms
“controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person,
through the ownership of voting securities, partnership interests or other equity interests. 
 Annual Budget: As used in this Lease,
the term “Annual Budget” shall mean an operating and capital budget prepared by Lessee and delivered to Lessor in accordance with Section 4.1. 
 Annual Revenues Computation: As defined in Subsection 3.1(b). 
 Award: As defined in
Subsection 15.1(a). 
  

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 Base Rate: The rate of interest announced publicly by Citibank, N.A., in New York, New York, from
time to time, as such bank’s base rate. If no such rate is announced or if such rate becomes discontinued, then such other rate as Lessor may reasonably designate. 
 Base Rent: As defined in Subsection 3.1(a). 
 Business Day: Each Monday, Tuesday, Wednesday,
Thursday and Friday that is not a day on which national banks in the City of New York, New York, or in the municipality wherein the Leased Property is located are closed. 
 CERCLA: The Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended. 
 Change of Control: The sale, conveyance, assignment, encumbering, pledging, hypothecation, granting a security interest in, granting of options with respect to, or other disposition of (directly or indirectly, voluntarily or
involuntarily, by operation of law or otherwise, and whether or not for consideration) of any class stock or other equity interests in a Person (other than among existing holders of interests in such Person on the Commencement Date and/or family
members of such holders and/or trusts for the benefit of any of the foregoing) that, upon a transfer of any portion thereof, will create in the transferee thereof, directly or indirectly, a majority of any class of stock or other equity interests of
such Person. 
 Claims: As defined in Section 12.2. 
 COBRA: As defined in Subsection 8.2(b). 
 Code: The Internal Revenue Code of 1986, as amended. 
 Commencement Date: As defined in Section 2.1. 

Competitive Set: As defined in the STR Reports. Lessor and Lessee shall work in good faith to determine any additions and deletions to the
Hotel’s Competitive Set, on or before November 15th of each year, with such changes to be applicable for the following Fiscal Year. In the event Lessor and Lessee cannot agree to the Hotel’s Competitive Set by November 15th of
any year, such unagreed items shall be determined by Smith Travel Research (or, if it refuses or is unable to do so, by arbitration pursuant to Section 25.2). The costs of resetting the Hotel’s Competitive Set shall be borne equally by the
parties. 
 Comparison Month: As defined in Subsection 3.1(d). 
 Condemnation, Condemnor: As defined in Section 15.1 
 Consolidated Financials: For any fiscal year or other accounting period for Lessee and its consolidated subsidiaries, if any, statements of earnings and retained earnings and of changes in financial position
for such period and for the period from the beginning of the respective fiscal year to the end of such period and the related balance sheet as at the end of such period, 

  

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together with the notes thereto, all in reasonable detail and setting forth in comparative form the corresponding figures for the corresponding period in the
preceding fiscal year, and prepared in accordance with generally accepted accounting principles and audited by independent certified public accountants acceptable to Lessor in its sole discretion. 
 Consumer Price Index: The “U.S. City Average, All Items” Consumer Price Index for All Urban Consumers published by the Bureau of Labor
Statistics of the United States Department of Labor (Base: 1982-1984=100), or any successor index thereto. If the Consumer Price Index is hereafter converted to a different standard reference base or otherwise revised, any determination hereunder
that uses the Consumer Price Index shall be made with the use of such conversion factor, formula or table for converting the Consumer Price Index as may be published by the Bureau of Labor Statistics, or, if the Bureau shall no longer publish the
same, then with the use of such conversion factor, formula or table as may be published by Prentice Hall, Inc., or, failing such publication, by any other nationally recognized publisher of similar statistical information. 
 Date of Taking: As defined in Subsection 15.1(d). 
 Encumbrance: As defined in Section 22.1. 
 Environmental Audit: As defined in Subsection
8.3(b). 
 Environmental Authority: Any department, agency or other body or component of any Government that exercises any form of
jurisdiction or authority under any Environmental Law. 
 Environmental Authorization: Any license, permit, order, approval, consent,
notice, registration, filing or other form of permission or authorization required under any Environmental Law. 
 Environmental Laws:
All applicable federal, state, local and foreign laws and regulations relating to pollution of the environment (including without limitation, ambient air, surface water, ground water, land surface or subsurface strata), including without limitation
laws and regulations relating to emissions, discharges, Releases or threatened Releases of Hazardous Materials or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous
Materials. Environmental Laws include but are not limited to CERCLA, FIFRA, RCRA, SARA and TSCA. 
 Environmental Liabilities: Any and
all obligations to pay the amount of any judgment or settlement, the cost of complying with any settlement, judgment or order for injunctive or other equitable relief, the cost of compliance or corrective action in response to any notice, demand or
request from an Environmental Authority, the amount of any civil penalty or criminal fine, and any court costs and reasonable amounts for attorney’s fees, fees for witnesses and experts, and costs of investigation and preparation for defense of
any claim or any Proceeding, regardless of whether such Proceeding is threatened, pending or completed, that may be or have been asserted against or imposed upon Lessor, Lessee, any Predecessor, the Leased Property or any property used therein and
arising out of: 
 (a) Failure of Lessee, Lessor, any Predecessor or the Leased Property to comply at any time with all Environmental Laws;

  

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 (b) Presence of any Hazardous Materials on, in, under, at or in any way affecting the Leased Property;

 (c) A Release at any time of any Hazardous Materials on, in, at, under or in any way affecting the Leased Property; 
 (d) Identification of Lessee, Lessor or any Predecessor as a potentially responsible party under CERCLA or under any Environmental Law similar to CERCLA;

 (e) Presence at any time of any above-ground and/or underground storage tanks, as defined in RCRA or in any applicable Environmental Law
on, in, at or under the Leased Property or any adjacent site or facility; or 
 (f) Any and all claims for injury or damage to Persons or
property arising out of exposure to Hazardous Materials originating or located at the Leased Property, or resulting from operation thereof or any adjoining property. 
 Event of Default: As defined in Section 16.1. 
 Fair Market Rental: The fair market
rental of the Leased Property means the rental which a willing tenant not compelled to rent would pay a willing landlord not compelled to lease for the use and occupancy of such Leased Property pursuant to the Lease for the term in question,
(a) assuming that Lessee is not in default thereunder and (b) determined in accordance with the appraisal procedures set forth in Article 24 or in such other manner as shall be mutually acceptable to Lessor and Lessee. 
 Fair Market Value: The fair market value of the Leased Property means an amount equal to the price that a willing buyer not compelled to buy would
pay a willing seller not compelled to sell for such Leased Property, (a) assuming the same is unencumbered by this Lease, (b) determined in accordance with the appraisal procedures set forth in Article 24 or in such other manner as shall
be mutually acceptable to Lessor and Lessee, (c) assuming that such seller must pay customary closing costs and title premiums, and (d) taking into account the positive or negative effect on the value of the Leased Property attributable to
the interest rate, amortization schedule, maturity date, prepayment penalty and other terms and conditions of any encumbrance that is assumed by the transferee. In addition, in determining the Fair Market Value with respect to damaged or destroyed
Leased Property such value shall be determined as if such Leased Property had not been so damaged or destroyed. 
 FIFRA: The Federal
Insecticide, Fungicide, and Rodenticide Act, as amended. 
 Fiscal Year: The twelve (12) month period from January 1 to
December 31, or any shorter period at the beginning or end of the Term. 
  

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 Fixtures: As defined in Section 1.1. 
 Force Majeure: An Unavoidable Occurrence, generally affecting travel and/or the hotel or lodging business in the market and/or submarket in which
the Hotel is located. 
 Franchise Agreement: Any franchise agreement or license agreement with a franchisor (such as Courtyard by
Marriott) under which the Hotel is operated. 
 Furniture and Equipment: For purposes of this Lease, the terms “furniture and
equipment” shall mean collectively all furniture, furnishings, wall coverings, fixtures and hotel equipment and systems located at, or used in connection with, the Hotel, together with all replacements therefor and additions thereto, including,
without limitation, (i) all equipment and systems required for the operation of kitchens and bars, laundry and dry cleaning facilities, (ii) office equipment, (iii) material handling equipment, cleaning and engineering equipment,
(iv) telephone and computerized accounting systems, and (v) vehicles. 
 Government: The United States of America, any
state, district or territory thereof, any foreign nation, any state, district, department, territory or other political division thereof, or any agency or political subdivision of any of the foregoing. 
 Gross Operating Expenses: The term “Gross Operating Expenses” shall include (i) all costs and expenses of operating the Hotel
included within the meaning of the term “Total Costs and Expenses” contained in the Uniform System and, (ii) without duplication, the following: all salaries and employee expense and payroll taxes (including salaries, wages, bonuses
and other compensation of all employees of the Hotel, and benefits including life, medical and disability insurance and retirement benefits), expenditures described in Section 9.1, operational supplies, utilities, insurance to be provided by
Lessee under the terms of this Lease, governmental fees and assessments, common area maintenance costs and other common area fees and assessments, food, beverages, laundry service expense, the cost of Inventories, license fees, advertising,
marketing, reservation systems and any and all other operating expenses as are reasonably necessary for the proper and efficient operation of the Hotel and the Leased Property incurred by Lessee in accordance with the provisions hereof (excluding,
however, (i) federal, state and municipal excise, sales and use taxes collected directly from patrons and guests or as a part of the sales price of any goods, services or displays, such as gross receipts, admissions, cabaret or similar or
equivalent taxes paid over to federal, state or municipal governments, (ii) the cost of insurance to be provided under Article 13, (iii) expenditures by Lessor pursuant to Article 13 and (iv) payments on any Mortgage or other mortgage
or security instrument on the Hotel); all determined in accordance with generally accepted accounting principles. No part of Lessee’s central office overhead or general or administrative expense (as opposed to that of the Hotel), and no
operating expenses paid or payable by tenants under Space Leases, shall be deemed to be a part of Gross Operating Expenses, as herein provided. Reasonable out-of-pocket expenses of Lessee incurred for the account of or in connection with the Hotel
operations, including but not limited to postage, telephone charges and reasonable travel expenses of employees, officers and other representatives and consultants of Lessee and its Affiliates, shall be deemed to be a part of Gross Operating
Expenses and such Persons shall be afforded reasonable accommodations, food, beverages, laundry, valet and other such services by and at the Hotel without charge to such Persons or Lessee. 
  

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 Gross Operating Profit: For any Fiscal Year, the excess of Gross Revenues for such Fiscal Year
over Gross Operating Expenses for such Fiscal Year. 
 Gross Revenues: All revenues, receipts, and income of any kind derived directly
or indirectly by Lessee from or in connection with the Hotel (including rentals or other payments from tenants, lessees, licensees or concessionaires but not including their gross receipts and not including rentals or other payments under Space
Leases) whether on a cash basis or credit, paid or collected, determined in accordance with generally accepted accounting principles, excluding, however: (i) funds furnished by Lessor, (ii) federal, state and municipal excise, sales, and
use taxes collected directly from patrons and guests or as a part of the sales price of any goods, services or displays, such as gross receipts, admissions, cabaret or similar or equivalent taxes and paid over to federal, state or municipal
governments, (iii) the amount of all credits, rebates or refunds to customers, guests or patrons, and all service charges, finance charges, interest and discounts attributable to charge accounts and credit cards, to the extent the same are paid
to Lessee by its customers, guests or patrons, or to the extent the same are paid for by Lessee to, or charged to Lessee by, credit card companies, (iv) gratuities or service charges actually paid to employees, (v) proceeds of insurance
and condemnation, (vi) proceeds from sales other than sales in the ordinary course of business, (vii) all loan proceeds from financing or refinancings of the Hotel or interests therein or components thereof, (viii) judgments and
awards, except any portion thereof arising from normal business operations of the Hotel, and (ix) items constituting “allowances” under the Uniform System. 
 Hazardous Materials: All chemicals, pollutants, contaminants, wastes and toxic substances, including without limitation: 
 (a) Solid or hazardous waste, as defined in RCRA or any other Environmental Law; 
 (b) Hazardous substances,
as defined in CERCLA or any other Environmental Law; 
 (c) Toxic substances, as defined in TSCA or any other Environmental Law; 

(d) Insecticides, fungicides, or rodenticides, as defined in FIFRA or any other Environmental Law; and 
 (e) Gasoline or any other petroleum product or byproduct, polychlorinated biphenyl, asbestos and urea formaldehyde. 
 Hotel: The hotel and/or other facility offering lodging and other services or amenities being operated or proposed to be operated on the Leased
Property. 
  

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 Hotel Market Decline: A period of six (6) consecutive calendar months during which there is
(i) a twenty percent (20%) decline in average hotel occupancy for the Hotel from the average hotel occupancy levels for same period during the prior calendar year and (ii) a twenty percent (20%) decline in average hotel occupancy
for the Hotel’s Competitive Set from the average hotel occupancy levels for the same period during the prior calendar year, as published in the applicable STR Reports. 
 Impositions: Collectively, all taxes (including, without limitation, all ad valorem, sales and use, single business, gross receipts, transaction,
privilege, rent or similar taxes as the same relate to or are imposed upon Lessee or its business conducted upon the Leased Property), assessments (including, without limitation, all assessments for public improvements or benefit, whether or not
commenced or completed prior to the date hereof and whether or not to be completed within the Term), ground rents, water, sewer or other rents and charges, excises, tax inspection, authorization and similar fees and all other governmental charges,
in each case whether general or special, ordinary or extraordinary, or foreseen or unforeseen, of every character in respect of the Leased Property or the business conducted thereon by Lessee (including all interest and penalties thereon caused by
any failure in payment by Lessee), which at any time prior to, during or with respect to the Term hereof may be assessed or imposed on or with respect to or be a lien upon (a) Lessor’s interest in the Leased Property, (b) the Leased
Property, or any part thereof or any rent therefrom or any estate, right, title or interest therein, or (c) any occupancy, operation, use or possession of, or sales from, or activity conducted on or in connection with the Leased Property, or
the leasing or use of the Leased Property or any part thereof by Lessee. Nothing contained in this definition of Impositions shall be construed to require Lessee to pay (1) any tax based on net income (whether denominated as a franchise or
capital stock or other tax) imposed on Lessor or any other Person, or (2) any net revenue tax of Lessor or any other Person, or (3) any tax imposed with respect to the sale, exchange or other disposition by Lessor of any Leased Property or
the proceeds thereof, or (4) any single business, gross receipts (other than a tax on any rent received by Lessor from Lessee), transaction, privilege or similar taxes as the same relate to or are imposed upon Lessor, except to the extent that
any tax, assessment, tax levy or charge that Lessee is obligated to pay pursuant to the first sentence of this definition and that is in effect at any time during the Term hereof is totally or partially repealed, and a tax, assessment, tax levy or
charge set forth in clause (1) or (2) is levied, assessed or imposed expressly in lieu thereof. 
 Indemnified Party: Either
of a Lessee Indemnified Party or a Lessor Indemnified Party. 
 Indemnifying Party: Any party obligated to indemnify an Indemnified
Party pursuant to Sections 8.3 or 18.1. 
 Insurance Requirements: All terms of any insurance policy required by this Lease and all
requirements of the issuer of any such policy. 
 Inventory: All “Inventories of Merchandise” and “Inventories of
Supplies” as defined in the Uniform System, including without limitation linens, china, silver, glassware and other non-depreciable personal property, and including any property of the type described in Section 1221(1) of the Code.

  

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 Land: As defined in Section 1.1. 
 Lease: This Lease. 
 Leased
Improvements; Leased Property: Each as defined in Section 1.1. 
 Legal Requirements: All federal, state, county, municipal
and other governmental statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and injunctions affecting either the Leased Property or the maintenance, construction, use or alteration thereof (whether by Lessee or otherwise),
whether now in force or hereafter enacted and in force, including (a) all laws, rules or regulations pertaining to the environment, occupational health and safety and public health, safety or welfare, and (b) any laws, rules or regulations
that may (1) require repairs, modifications or alterations in or to the Leased Property or (2) in any way adversely affect the use and enjoyment thereof; and all permits, licenses and authorizations and regulations relating thereto and all
covenants, agreements, restrictions and encumbrances contained in any instruments, either of record or known to Lessee (other than encumbrances created by Lessor without the consent of Lessee), at any time in force affecting the Leased Property.

 Lending Institution: Any insurance company, credit company, federally-insured commercial or savings bank, national banking
association, savings and loan association, employees welfare, pension or retirement fund or system, corporate profit sharing or pension trust, college or university, or real estate investment trust, including any corporation qualified to be treated
for federal tax purposes as a real estate investment trust, such trust having a net worth of at least $10,000,000. 
 Lessee: The
Lessee designated in this Lease and its respective permitted successors and assigns. 
 Lessee Indemnified Party: Lessee, any
Affiliate of Lessee, any other Person against whom any claim for indemnification may be asserted hereunder as a result of a direct or indirect ownership interest (including a stockholder’s or member’s interest) in Lessee, the officers,
directors, stockholders, members, managers, employees, agents and representatives of Lessee, and the respective heirs, personal representatives, successors and assigns of any such officer, director, stockholder, member, manager, employee, agent or
representative. 
 Lessee’s Personal Property: As defined in Section 6.2. 
 Lessor: The Lessor designated in this Lease and its respective successors and assigns. 
 Lessor Indemnified Party: Lessor, any Affiliate of Lessor, any other Person against whom any claim for indemnification may be asserted hereunder
as a result of a direct or indirect ownership interest (including a stockholder’s or partnership interest) in Lessor, the officers, directors, stockholders, members, managers, employees, agents and representatives of the general partner of
Lessor and any partner, agent, or representative of Lessor, and the respective heirs, personal representatives, successors and assigns of any such officer, director, stockholder, partner, member, manager, employee, agent or representative.

  

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 Licenses: As defined in Subsection 2.3(a). 
 Management Agreement: The agreement pursuant to which Manager operates the Hotel. 
 Manager: Newport Somerset Management, LLC, or any successor manager that is retained by Lessee to operate the Hotel pursuant to this Lease and the
Franchise Agreement. 
 Minimum Price: The sum of (a) the equity in the Leased Property at the time of acquisition of the Leased
Property by Lessor, plus (b) other capital expenditures on the Leased Property by Lessor after the date hereof (less depreciation and amortization thereof) plus (c) the unpaid principal balance of all encumbrances against the Leased
Property at the time of purchase of the Leased Property by Lessee, less (x) all proceeds received by Lessor from any financing or refinancing of the Leased Property after the date hereof (after payment of any debt refinanced and net of any
costs and expenses incurred in connection with such financing or refinancing, including, without limitation, loan points, commitment fees and commissions and legal fees) and (y) the net amount (after deduction of all reasonable legal fees and
other costs and expenses, including without limitation expert witness fees, incurred by Lessor in connection with obtaining any such proceeds or award) of all insurance proceeds received by Lessor and awards received by Lessor from any partial
Taking of the Leased Property that are not applied to restoration. 
 Mortgage: As defined in Section 22.2. 
 National Economic Decline: A period of six (6) consecutive calendar months during which there occurs or continues a ten percent
(10%) decline in average hotel occupancy, from average hotel occupancy levels for the same period during the prior calendar year, for all open and operating hotels in the United States as determined from the applicable STR Reports or, if the
STR Reports are not longer published, other reputable national economic data regarding the hospitality industry. 
 Notice: As defined
in Article 26. 
 Officer’s Certificate: A certificate of Lessee reasonably acceptable to Lessor, signed by the chief financial
officer or another officer authorized so to sign by the board of directors or other governing body of Lessee, or bylaws or limited liability company agreement of Lessee, or any other Person whose power and authority to act has been authorized by
delegation in writing by any such officer. 
 Optional Termination Date: As defined in Section 2.2. 
 Overdue Rate: On any date, a rate equal to the Base Rate plus five percent (5%) per annum, but in no event greater than the maximum rate then
permitted under applicable law. 
  

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 Payment Date: Any due date for the payment of any installment of Base Rent. 
 Percentage Rent: As defined in Subsection 3.1(b). 
 Person: Any Government, natural person, corporation, general or limited partnership, limited liability company, stock company or association, joint venture, association, company, trust, bank, trust company,
land trust, business trust, or other entity. 
 Personal Property Taxes: All personal property taxes imposed on the furniture,
furnishings or other items of personal property located on, and used in connection with, the operation of the Leased Improvements as a hotel (other than Inventory and other personal property owned by Lessee), together with all replacement,
modifications, alterations and additions thereto. 
 Predecessor: Any Person whose liabilities arising under any Environmental Law
have or may have been retained or assumed by Lessor or Lessee, either contractually or by operation of law, relating to the Leased Property. 
 Primary Intended Use: As defined in Subsection 7.2(b). 
 Proceeding: Any judicial action, suit or proceeding (whether
civil or criminal), any administrative proceeding (whether formal or informal), any investigation by a governmental authority or entity (including a grand jury), and any arbitration, mediation or other non-judicial process for dispute resolution.

 RCRA: The Resource Conservation and Recovery Act, as amended. 
 Real Estate Taxes: All real estate taxes, including general and special assessments, if any, which are imposed upon the Land, and any improvements
thereon. 
 Regional Market Decline: A period of six (6) consecutive calendar months during which there is a twenty percent
(20%) decline in average hotel occupancy from hotel occupancy levels for the same period during the then prior calendar year, for all open and operating hotels in the Smith Travel Research Region in which the Hotel is located, as determined
from applicable STR Reports or, if the STR Reports are no longer published, other reputable regional economic data regarding the hospitality industry. 
 Rejectable Offer Price: An amount equal to the greater of (a) the Fair Market Value, determined as of the applicable purchase date, or (b) the Minimum Price. 
 Release: A “Release” as defined in CERCLA or in any Environmental Law, unless such Release has been properly authorized and permitted in
writing by all applicable Environmental Authorities or is allowed by such Environmental Law without authorizations or permits. 
 Rent: Collectively, the Base Rent, Percentage Rent and Additional Charges. 
  

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 Repositioning: As defined in Section 3.6. 
 SARA: The Superfund Amendments and Reauthorization Act of 1986, as amended. 
 Solvent: As to any Person, (a) the sum of the assets of such Person exceeds its liabilities and (b) such Person has sufficient capital
with which to conduct its business as presently conducted and as proposed to be conducted. 
 Space Leases: With respect to the Land
and Leased Improvements, all leases, licenses, occupancy agreements, or other agreements, demising space in, providing for the use or occupancy of, or otherwise similarly affecting or relating to the use or occupancy of, the Leased Improvements or
Land, including (without limitation) the leases described in Exhibit B attached hereto, together with all amendments, modifications, renewals and extensions thereof, and all guaranties by third parties of the obligations of the tenants
thereunder, and any successor leases for such space. Space Leases shall specifically exclude hotel room or suite rental to hotel guests or convention or meeting space rental, each conducted in the ordinary course of business in the operation of a
hotel. 
 State: The state or commonwealth in which the Hotel is located. 
 STR Reports: Reports compiled by Smith Travel Research, or its successor, which contain historical supply and demand, occupancy, and average rate
information for the Hotel and hotels with which it competes (or, in the event that Smith Travel Research discontinues providing such information, reports of similar nature compiled by an authority recognized nationally in the hospitality industry).

 Subsidiaries: Persons in which Lessee owns, directly or indirectly, more than fifty percent (50%) of the voting stock or
control, as applicable. 
 Suite Revenue Breakpoint: As defined in Subsection 3.1(b). 
 Suite Revenues: All revenues, receipts, and income of any kind derived directly or indirectly by Lessee from or in connection with (i) the
rental of guest rooms or suites, whether to individuals, groups or transients, at the Hotel and (ii) the Hotel’s meeting rooms, telephones, TV and movie rentals, check room, washroom, laundry, valet, vending machines, and other sources
(other than Space Leases), in each case, whether on a cash basis or credit, paid or collected, determined in accordance with generally accepted accounting principles, but, in each case, excluding the following: 
 (a) The amount of all credits, rebates or refunds to customers, guests or patrons, and all service charges, finance charges, interest and discounts
attributable to charge accounts and credit cards, to the extent the same are paid to Lessee by its customers, guests or patrons, or to the extent the same are paid for by Lessee to, or charged to Lessee by, credit card companies; 
  

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 (b) All sales taxes or any other taxes imposed on the rental of such guest rooms or suites or imposed in
connection with the Hotel’s meeting rooms, telephones, TV and movie rentals, check room, washroom, laundry, valet, vending machines, and other sources of revenue; 
 (c) Gratuities or service charges actually paid to employees; and 
 (d) Proceeds of business interruption
and other insurance. 
 Taking: A taking or voluntary conveyance during the Term hereof of all or part of the Leased Property, or any
interest therein or right accruing thereto or use thereof, as the result of, or in settlement of, any Condemnation or other eminent domain Proceeding affecting the Leased Property whether or not the same shall have actually been commenced.

 Term: As defined in Section 2.1. 
 TSCA: The Toxic Substances Control Act, as amended. 
 Unavoidable Delays: Delays due to
strikes, lock-outs, labor unrest, inability to procure materials, power failure, acts of God, governmental restrictions, enemy action, civil commotion, fire, unavoidable casualty or other causes beyond the control of the party responsible for
performing an obligation hereunder, provided that lack of funds shall not be deemed a cause beyond the control of either party hereto unless such lack of funds is caused by the failure of the other party hereto to perform any obligations of such
party under this Lease or any guaranty of this Lease. 
 Unavoidable Occurrence. The occurrence of strikes, lockouts, labor unrest,
gasoline and other energy shortages, widespread disruption of air, auto or other travel, inability to procure materials or services, power or other utility failure, acts of God (such as hurricanes, tornadoes, earthquakes, floods and mud slides),
governmental restrictions, war or other enemy or terrorist action, civil commotion, fire, casualty, condemnation or other similar causes, in each case, if such cause is beyond the reasonable control of Lessee; provided that (i) lack of funds
shall not be deemed a cause beyond the reasonable control of either party hereto unless such lack of funds is caused by the failure of the other party hereto to perform any obligations of such party under this Lease or any guaranty of this Lease,
and (ii) any such occurrence is an extraordinary, as opposed to a routine or cyclical, material event that was not reasonably foreseeable when the then-applicable Annual Budget was prepared. 
 Uneconomic for its Primary Intended Use: A state or condition of the Hotel such that, in the good faith judgment of Lessee, reasonably exercised
and evidenced by the resolution of the board of directors or other governing body of Lessee, the Hotel cannot be operated on a commercially practicable basis for its Primary Intended Use, taking into account, among other relevant factors, the number
of usable rooms and projected revenues, such that Lessee intends to, and shall, complete the cessation of operations from the Leased Hotel. 
  

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 Uniform System: The Uniform System of Accounts for Hotels (9th Revised Edition, 1996) as published
by the American Hotel and Lodging Association, with such later revisions as may be agreed to by both Lessor and Lessee. 
 Unsuitable for
its Primary Intended Use: A state or condition of the Hotel such that, in the good faith judgment of Lessee, reasonably exercised and evidenced by the resolution of the board of directors or other governing body of Lessee, due to casualty damage
or loss through Condemnation, the Hotel cannot function as an integrated hotel facility consistent with standards applicable to a well maintained and operated hotel. 
 WARN Act: As defined in Subsection 8.2(b). 
 Working Capital: Funds reasonably necessary for
the day-to-day operation of the Hotel’s business for a thirty (30) day period, including, without limitation, amounts sufficient for the maintenance of change and petty cash funds, operating bank accounts, payrolls, accounts payable,
accrued current liabilities, and funds required to maintain Inventories. 
 ARTICLE 2 
 TERM; TERMINATION 
 2.1. Term.

 (a) The term of the Lease (the “Term”) shall commence on the date specified in Schedule 2.1 (the “Commencement
Date”), and shall end on the tenth (10th) anniversary of the Commencement Date, unless sooner terminated in accordance with the provisions hereof or extended to an anniversary of the initial expiration date pursuant to this Article 2.

 (b) Lessee is granted the option to extend the Term of this Lease for a period of five (5) years (the “First Extension”),
provided that Lessee is not in default hereunder either at the time of deemed exercise of the option or at the end of the original Term, which option must be exercised by written notice to Lessor at least one hundred twenty (120) days prior to
the expiration of the original Term. The First Extension shall be upon the same terms, conditions and rentals as set forth herein for the original Term. 
 (c) Lessee is granted an option to extend the Term for a period commencing at the expiration of the First Extension and ending on November 8, 2027 (the “Second Extension”), provided that Lessee is not
in default hereunder either at the time of exercise of the option or at the end of the First Extension, which option must be exercised by written notice to Lessor at least one hundred twenty (120) days prior to the expiration of the First
Extension. If such option is exercised, Lessor and Lessee shall negotiate in good faith modifications to the Rent for the Second Extension to adjust such Rent to market rates for arms-length hotel REIT leases between unrelated parties for similar
hotel properties at that time. In the event Lessor and Lessee are unable to agree upon Rent terms for the Second Extension at least ninety (90) days prior to the expiration of the Term, the Rent terms for the Second Extension shall be
determined by a panel of three (3) persons who have generally recognized expertise in evaluating hotel REIT leases and who are not Affiliates 

  

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of Lessor or Lessee. Lessee and the Lessor each shall have the right to designate one panel member and the two (2) panel members so designated will
designate the third panel member. Rent terms approved by at least two (2) of the three (3) panel members will be binding on Lessee and Lessor for the Second Extension, which shall be otherwise on the terms set forth herein. In determining
the market rates for the Second Extension, the panel members shall be instructed to consider hotel REIT lease terms with respect to similar hotel property types. The Second Extension shall be otherwise upon the same terms and conditions as set forth
herein for the original Term. 
 2.2. Lessor’s Option to Terminate Lease. In the event Lessor enters into a bona fide contract to
sell the Leased Property to a non-Affiliate, there is a Change of Control of Lessor, or the provisions of the Code are amended to permit Lessor to operate hotels or otherwise render the structure embodied by this Lease to be obsolete, Lessor may
terminate the Lease by giving not less than thirty (30) days’ prior Notice to Lessee of Lessor’s election to terminate the Lease effective upon, as appropriate, the closing under such contract, the date of such Change of Control, or
the effective date of such amendment to the Code (or any other specified date within 30 days after such date) (the “Optional Termination Date”). Effective upon the Optional Termination Date, this Lease shall terminate and be of no further
force and effect except as to any obligations of the parties existing as of such date that survive termination of this Lease. As compensation for the early termination of its leasehold estate under this Section 2.2, Lessor shall within 12
months of the Optional Termination Date either (a) pay to Lessee the fair market value of Lessee’s leasehold estate hereunder plus interest thereon at the Base Rate as of the Optional Termination Date or (b) offer to lease to Lessee
one or more substitute hotel facilities pursuant to one or more leases that would create for Lessee leasehold estates that have an aggregate fair market value of no less than the fair market value of the original leasehold estate, both such values
as determined as of the Optional Termination Date. Lessor also shall pay to Lessee, or reimburse Lessee for any assignment fees, termination fees or other liabilities arising under the Franchise Agreement or Management Agreement solely as a result
of the assignment or termination of such Franchise Agreement or Management Agreement in connection with the termination of this Lease under this Section 2.2. If Lessor elects and complies with the option described in (b) above, regardless
of whether Lessee enters into the lease(s) described therein, Lessor shall have no further obligations to Lessee with respect to compensation for the early termination of this Lease. In the event Lessor and Lessee are unable to agree upon the fair
market value of an original or replacement leasehold estate, it shall be determined by appraisal using the appraisal procedure set forth in Article 24. 
 For the purposes of this Article, fair market value of the leasehold estate means, as applicable, an amount equal to the price that a willing buyer not compelled to buy would pay a willing seller not compelled to sell
for Lessee’s leasehold estate under this Lease or an offered replacement leasehold estate, taking into account that the leasehold estate is encumbered by the Franchise Agreement and an arm’s-length Management Agreement. 
 2.3. Transition Procedures. Upon the expiration or termination of the Term of this Lease, for whatever reason (other than a purchase of the Leased
Property by Lessee), Lessor and Lessee shall do the following (and the provisions of this Section 2.3 shall survive the expiration or termination of this Lease until they have been fully performed) and, in general, shall cooperate in good faith
to effect an orderly transition of the management and/or lease of the Hotel: 
 (a) Transfer of Licenses. Lessee shall use reasonable
efforts (i) to transfer to Lessor or Lessor’s nominee all licenses, operating permits and other governmental authorizations and all contracts, including contracts with governmental or quasi-governmental entities, that may be necessary for
the operation of the Hotel (collectively, “Licenses”), or (ii) if such transfer is prohibited by law or Lessor otherwise elects, to cooperate with Lessor or Lessor’s nominee in connection with the processing by Lessor or
Lessor’s nominee of any applications for, all Licenses; provided, in either case, that the costs and expenses of any such transfer or the processing of any such application shall be paid by Lessor or Lessor’s nominee. 
  

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 (b) Leases and Concessions. Lessee shall assign to Lessor or Lessor’s nominee simultaneously
with the termination of this Lease, and the assignee shall assume, all leases and concession agreements in effect with respect to the Hotel then in Lessee’s name. 
 (c) Books and Records. All books and records for the Hotel kept by Lessee pursuant to Section 4.2 shall be delivered promptly to Lessor or Lessor’s nominee, simultaneously with the termination of this
Lease, but such books and records shall thereafter be available to Lessee at all reasonable times for inspection, audit, examination, and transcription for a period of one (1) year and Lessee may retain (on a confidential basis) copies or
computer records thereof. 
 (d) Receivables and Payables. Lessee shall be entitled to retain all cash, bank accounts and house banks,
and to collect all Gross Revenues and accounts receivable accrued through the termination date. Lessee shall be responsible for the payment of Rent, all Gross Operating Expenses and all other obligations of Lessee accrued under this Lease as of the
termination date, and Lessor or Lessor’s nominee shall be responsible for all Gross Operating Expenses of the Hotel accruing after the termination date. 
 (e) Final Accounting. Lessee shall, within forty five (45) days after the expiration or termination of the Term, prepare and deliver to Lessor a final accounting statement, dated as of the date of the
expiration or termination, along with a statement of any sums due from Lessee to Lessor pursuant hereto and payment of such funds. 
 (f)
Inventory. Lessee shall insure that the Leased Property, at the date of such termination or expiration, has Inventory of a substantially equivalent nature and amount as exists at the Leased Property on the Commencement Date, and Lessor or its
designee shall acquire such Inventory from Lessee for a sale price equal to the fair market value of such Inventory. 
 (g) Surrender.
Lessee will, upon the expiration or prior termination of the Term, vacate and surrender the Leased Property to Lessor in the condition in which the Leased Property was originally received from Lessor, except as repaired, rebuilt, restored, altered
or added to as permitted or required by the provisions of this Lease and except for ordinary wear and tear (subject to the obligation of Lessee to maintain the Leased Property in good order and repair, as would a prudent owner, during the entire
Term of the Lease), or damage by casualty or Condemnation (subject to the obligations of Lessee to restore or repair as set forth in the Lease) 
  

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 The provisions of this Section 2.3 shall survive the expiration or termination of this Lease until
they have been fully performed. Nothing contained herein shall limit Lessor’s rights and remedies under this Lease if such termination occurs as the result of an Event of Default. 
 2.4. Holding Over. If Lessee for any reason remains in possession of the Leased Property after the expiration or earlier termination of the Term,
such possession shall be as a tenant at sufferance during which time Lessee shall pay as rental each month 150% of the aggregate of (a) one-twelfth of the aggregate Base Rent and Percentage Rent payable with respect to the last Fiscal Year of
the Term, (b) all Additional Charges accruing during the applicable month and (c) all other sums, if any, payable by Lessee under this Lease with respect to the Leased Property. During such period, Lessee shall be obligated to perform and
observe all of the terms, covenants and conditions of this Lease, but shall have no rights hereunder other than the right, to the extent given by law to tenancies at sufferance, to continue its occupancy and use of the Leased Property. Nothing
contained herein shall constitute the consent, express or implied, of Lessor to the holding over of Lessee after the expiration or earlier termination of this Lease. 
  

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 ARTICLE 3 
 RENT; RENT ADJUSTMENTS 
 3.1. Rent. Lessee will pay to Lessor in lawful money of the United
States of America which shall be legal tender for the payment of public and private debts, in immediately available funds, at Lessor’s address set forth in Article 26 hereof or at such other place or to such other Person as Lessor from time to
time may designate in a Notice, all Base Rent, Percentage Rent and Additional Charges, during the Term, as follows: 
 (a) Base Rent:
The annual sum specified in Schedule 3.1(a) (prorated for fiscal year 2007), as adjusted pursuant to Subsection 3.1(d) hereof, payable in advance in equal, consecutive monthly installments, on or before the tenth day of each calendar month of
the Term (“Base Rent”); provided, however, that the first monthly payment of Base Rent shall be payable during the second calendar month of the Term, and that the first and last monthly payments of Base Rent shall be pro rated as to any
partial month (subject to adjustment as provided in Sections 14.5, 15.3 and 15.5). 
 (b) Percentage Rent: For each fiscal year during
the Term commencing with the fiscal year in which the Commencement Date falls and ending with the fiscal year in which the Term (including any applicable extensions) ends, Lessee shall pay percentage rent (“Percentage Rent”). 

Percentage Rent for the applicable Fiscal Year shall be an amount equal to the applicable Annual Revenues Computation (as defined below) less an
amount equal to the Base Rent paid with respect to such Fiscal Year. 
 For the purpose of the foregoing calculation: 
 The annual revenues computation (“Annual Revenues Computation”) is equal to the amount obtained by adding, for the applicable Fiscal Year, an
amount equal to the sum of (i) seventeen percent (17%) of all Suite Revenues for the applicable Fiscal Year up to the applicable suite revenue breakpoint (the “Suite Revenue Breakpoint”) described in Schedule 3.1(b),
attached hereto, (prorated for the first and last Fiscal Year of the Term (including any applicable extensions)) and fifty-five percent (55%) of all Suite Revenues for the applicable Fiscal Year in excess of the applicable Suite Revenue
Breakpoint. At the beginning of each Fiscal Year, the Suite Revenue Breakpoints shall be adjusted by the same percentage that the Base Rent is adjusted pursuant to Subsection 3.1(d). 
 The Percentage Rent shall be payable as follows: 
  

	 	(i)	with respect to each calendar month of the Term, Lessee shall pay on or before the last day of the calendar month an amount equal to the excess, if any, of (A) seventy-five
percent (75%) of the amount of Lessee’s budgeted Percentage Rent payable with respect to the then current calendar month (which budgeted amount shall be equal to one-twelfth (1/12) of the annual estimate of Percentage Rent included in
the Annual Budget for the Fiscal Year in which the calendar month occurs) over (B) Base Rent for such calendar month; and 

  

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	 	(ii)	with respect to each Fiscal Year of the Term, Lessee shall pay on or before the 15th day following the end of the Fiscal Year an amount equal to the amount by which the aggregate
amount of all payments pursuant to Section 3.1(b)(i) in respect of Percentage Rent for such Fiscal Year shall be less than one hundred percent (100%) of the estimated Percentage Rent included in the Annual Budget for such Fiscal Year.

 In no event will the amount of Percentage Rent payable for any Fiscal Year or the result of any Annual Revenues Computation be less than
zero, and there shall be no reduction in the Base Rent regardless of the result of any Annual Revenues Computation. 
 (c) Officer’s
Certificates. On or before March 1 of each year, commencing with March 1, 2008, Lessee shall deliver to Lessor an Officer’s Certificate reasonably acceptable to Lessor setting forth the computation of the actual Percentage Rent
that accrued for the Fiscal Year that ended on the immediately preceding December 31. If the annual Percentage Rent due and payable for any Fiscal Year (as shown in the applicable Officer’s Certificate) exceeds the amount actually paid as
Percentage Rent by Lessee for such year, Lessee shall pay such excess to Lessor at the time such certificate is delivered. If the Percentage Rent actually due and payable for such Fiscal Year is shown by such certificate to be less than the amount
actually paid as Percentage Rent for the applicable Fiscal Year, Lessor, at its option, shall reimburse such amount to Lessee or credit such amount against subsequent months’ Base Rent, and with respect to Percentage Rent, to the extent
necessary, subsequent months’ Percentage Rent payments. Any such credit to Base Rent shall not be applied for purposes of calculating Percentage Rent payable for any subsequent month. 
 Any difference between the annual Percentage Rent due and payable for any Fiscal Year (as shown in the applicable Officer’s Certificate or as
adjusted pursuant to Section 3.3) and the total amount of monthly payments for such Fiscal Year actually paid by Lessee as Percentage Rent, whether in favor of Lessor or Lessee, shall bear interest at the Overdue Rate, which interest shall
accrue from the due date of the last monthly payment for the Fiscal Year until the amount of such difference shall be paid or otherwise discharged. Any such interest payable to Lessor shall be deemed to be and shall be payable as Additional Charges.

 The obligation to pay Percentage Rent shall survive the expiration or earlier termination of the Term, and a final reconciliation, taking
into account, among other relevant adjustments, any adjustments which are accrued after such expiration or termination date but which related to Percentage Rent accrued prior to such termination date, and Lessee’s good faith best estimate of
the amount of any unresolved contractual allowances, shall be made not later than two (2) years after such expiration or termination date, but Lessee shall advise Lessor within sixty (60) days after such expiration or termination date of
Lessee’s best estimate at that time of the approximate amount of such adjustments, which estimate shall not be binding on Lessee or have any legal effect whatsoever. 
  

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 (d) CPI Adjustments to Base Rent and Percentage Rent. For each year of the Term beginning on or
after January 1, 2008, the Base Rent shall be adjusted from time to time as follows: 
 (1) If the most recently
published Consumer Price Index as of the last day of the last month (the “Comparison Month”) of any Fiscal Year is different than the average Consumer Price Index for the twelve (12) month period prior thereto, the Base Rent for the
next Fiscal Year shall be adjusted by the percentage change in the Consumer Price Index calculated as follows: 
 (A) The
difference between the Consumer Price Index for the most recent Comparison Month and the average Consumer Price Index for the twelve (12) month period prior thereto shall be divided by the average Consumer Price Index for the twenty four
(24) month period prior thereto. 
 (B) The Base Rent shall be multiplied by the lesser of (i) seven percent
(7%) or (ii) the quotient obtained in subparagraph (d)(1)(A) above. 
 (C) The product obtained in subparagraph
(d)(1)(B) above shall be added to the Base Rent. 
 Adjustments in the Base Rent shall be effective on the first day of the first calendar
month of the Fiscal Year to which such adjusted Base Rent applies. The Suite Revenue Breakpoint then included in the Annual Revenues Computation pursuant to Subsection 3.1(b) shall be similarly adjusted, effective with any such adjustment in the
Base Rent. 
 (2) If (i) a significant change is made in the number or nature (or both) of items used in determining the
Consumer Price Index, or (ii) the Consumer Price Index shall be discontinued for any reason, the Bureau of Labor Statistics shall be requested to furnish a new index comparable to the Consumer Price Index, together with information which will
make possible a conversion to the new index in computing the adjusted Base Rent hereunder. If for any reason the Bureau of Labor Statistics does not furnish such an index and such information, the parties will instead mutually select, accept and use
such other index or comparable statistics on the cost of living in Washington, D.C. that is computed and published by an agency of the United States or a responsible financial periodical of recognized authority. 
 (e) Manager Fund-up Cure Payments. If and to the extent that Manager pays amounts to Lessee pursuant to the Management Agreement in order to avoid
termination of the Management Agreement by Lessee for Manager’s failure to meet certain performance hurdles described therein, such amounts shall be treated as additional Suite Revenues for purposes of the Percentage Rent calculation hereunder.

 (f) Allocation of Rent. The parties hereto acknowledge and agree that the Base Rent paid or payable by Lessee to Lessor hereunder
shall, to the extent relevant, be allocated between the personal property and real property constituting Leased Property hereunder in direct proportion to the then recognizable fair market value of such personal property and real property.
Percentage Rent in excess of Base Rent shall be allocated solely to real property. 
  

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 3.2. Confirmation of Percentage Rent. Lessee shall utilize, or cause to be utilized, an accounting
system for the Leased Property in accordance with its usual and customary practices, and in accordance with generally accepted accounting principles, that will accurately record all data necessary to compute Percentage Rent, and Lessee shall retain,
for at least four (4) years after the expiration of each Fiscal Year (and in any event until the reconciliation described in Subsection 3.1(c) for such Fiscal Year has been made), reasonably adequate records conforming to such accounting system
showing all data necessary to compute Percentage Rent for the applicable Fiscal Years. Lessor, at its expense (except as provided hereinbelow), shall have the right from time to time, upon prior written notice to Lessee and Manager, by its
accountants or representatives to audit the information that formed the basis for the data set forth in any Officer’s Certificate provided under Subsection 3.1(d) and, in connection with such audits, to examine all Lessee’s records
(including supporting data and sales and excise tax returns) reasonably required to verify Percentage Rent, subject to any prohibitions or limitations on disclosure of any such data under Legal Requirements; provided, however that Lessor may only
inspect or audit records in Manager’s possession subject to the terms of Lessee’s access thereto under the Management Agreement. If any such audit discloses a deficiency in the payment of Percentage Rent, and either Lessee agrees with the
result of such audit or the matter is otherwise determined or compromised, Lessee shall forthwith pay to Lessor the amount of the deficiency, as finally agreed or determined, together with interest at the Overdue Rate from the date when said payment
should have been made to the date of payment thereof; provided, however, that as to any audit that is commenced more than two (2) years after the date Percentage Rent for any Fiscal Year is reported by Lessee to Lessor, the deficiency, if any,
with respect to such Percentage Rent shall bear interest at the Overdue Rate only from the date such determination of deficiency is made unless such deficiency is the result of gross negligence or willful misconduct on the part of Lessee, in which
case interest at the Overdue Rate will accrue from the date such payment should have been made to the date of payment thereof. If any such audit discloses that the Percentage Rent actually due from Lessee for any Fiscal Year exceed those reported by
Lessee by more than three percent (3%), Lessee shall pay the cost of such audit and examination. Any proprietary information obtained by Lessor pursuant to the provisions of this Section shall be treated as confidential, except that such information
may be used, subject to appropriate confidentiality safeguards, in any litigation between the parties and except further that Lessor may disclose such information to prospective lenders. The obligations of Lessee contained in this Section shall
survive the expiration or earlier termination of this Lease. 
 3.3. Additional Charges. In addition to the Base Rent and Percentage
Rent, (a) Lessee also will pay and discharge as and when due and payable all other amounts, liabilities, obligations and Impositions that Lessee assumes or agrees to pay under this Lease, and (b) in the event of any failure on the part of
Lessee to pay any of those items referred to in clause (a) of this Section 3.3, Lessee also will promptly pay and discharge every fine, penalty, interest and cost that may be added for non-payment or late payment of such items (the items
referred to in clauses (a) and (b) of this Section 3.3 being additional rent hereunder and being referred to herein collectively as the “Additional Charges”), and Lessor shall have all legal, equitable and contractual
rights, powers and remedies provided either in this Lease or by statute or otherwise in the case of non-payment of the Additional Charges as in the case of non-payment of the Base Rent. If any installment of Base Rent 

  

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and Percentage Rent or Additional Charges (but only as to those Additional Charges that are payable directly to Lessor) shall not be paid on its due date,
Lessee will pay Lessor on demand, as Additional Charges, a late charge (to the extent permitted by law) computed at the Overdue Rate on the amount of such installment, from the due date of such installment to the date of payment thereof. To the
extent that Lessee pays any Additional Charges to Lessor pursuant to any requirement of this Lease, Lessee shall be relieved of its obligation to pay such Additional Charges to the entity to which they would otherwise be due and Lessor shall pay
same from monies received from Lessee. 
 3.4. Net Lease; No Termination, Abatement, Etc. 
 (a) The Rent shall be paid absolutely net to Lessor, so that this Lease shall yield to Lessor the full amount of the installments of Base Rent, Percentage
Rent and Additional Charges throughout the Term, all as more fully set forth in Article 5, but subject to any other provisions of this Lease that expressly provide for adjustment or abatement of Rent or other charges or expressly provide that
certain expenses or maintenance shall be paid or performed by Lessor. 
 (b) Except as otherwise specifically provided in this Lease, and
except for loss of the Franchise Agreement solely by reason of any action or inaction by Lessor, Lessee, to the extent permitted by law, shall remain bound by this Lease in accordance with its terms and shall neither take any action without the
written consent of Lessor (which shall not be unreasonably withheld or delayed) to modify, surrender or terminate the same, nor seek nor be entitled to any abatement, deduction, deferment or reduction of the Rent, or setoff against the Rent, nor
shall the obligations of Lessee be otherwise affected by reason of (a) any damage to, or destruction of, any Leased Property or any portion thereof from whatever cause or any Taking of the Leased Property or any portion thereof, (b) the
lawful or unlawful prohibition of, or restriction upon, Lessee’s use of the Leased Property, or any portion thereof, or the interference with such use by any Person other than Lessor, (c) any claim which Lessee has or might have against
Lessor by reason of any default or breach of any warranty by Lessor under this Lease or any other agreement between Lessor and Lessee, or to which Lessor and Lessee are parties, (d) any bankruptcy, insolvency, reorganization, composition,
readjustment, liquidation, dissolution, winding up or other proceedings affecting Lessor or any assignee or transferee of Lessor, or (e) for any other cause whether similar or dissimilar to any of the foregoing other than a discharge of Lessee
from any such obligations as a matter of law. Lessee hereby specifically waives all rights, arising from any occurrence whatsoever, which may now or hereafter be conferred upon it by law to (1) modify, surrender or terminate this Lease or quit
or surrender the Leased Property or any portion thereof, or (2) entitle Lessee to any abatement, reduction, suspension or deferment of the Rent or other sums payable by Lessee hereunder, except as otherwise specifically provided in this Lease.
The obligations of Lessee hereunder shall be separate and independent covenants and agreements and the Rent and all other sums payable by Lessee hereunder shall continue to be payable in all events unless the obligations to pay the same shall be
terminated pursuant to the express provisions of this Lease or by termination of this Lease other than by reason of an Event of Default. 
  

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 3.5. Material Changes in Economic Climate. 
 (a) In the event of the occurrence of a Force Majeure or a Hotel Market Decline, Lessor and Lessee shall, in good faith, negotiate possible modifications
to the Base Rent and Percentage Rent to reduce such Base Rent and Percentage Rent to recent market rates for hotel REIT leases for similar hotel properties in the Hotel’s Competitive Set, retroactively effective as of the first calendar month
of the Term following the last day of the six-month period during which such Hotel Market Decline has occurred with the excess of Base Rent and Percentage Rent actually paid for such period over the reduced Base Rent and Percentage Rent, plus
interest thereon at the Base Rate, to be credited to the next payments of Rent due and owing hereunder. If Lessor and Lessee are unable to agree that a Force Majeure or a Hotel Market Decline has occurred, within thirty (30) days after the date
of written certification from Lessee to Lessor that a Force Majeure and Hotel Market Decline has occurred (accompanied by reasonably detailed computations and documentation to support such assertion), the matter may be submitted by either party to
arbitration under Section 25.2 hereof for resolution (during which period Lessee shall continue to pay Base Rent and Percentage Rent as required under Section 3.1 of this Lease). If, within ninety (90) days (during which period Lessee
shall continue to pay Base Rent and Percentage Rent as required under Section 3.1 of this Lease) following the date of such written certification from Lessee (or the date of a decision of an arbitrator if required hereunder to determine that a
Force Majeure and Hotel Market Decline has occurred), Lessor and Lessee are unable to agree upon the amount of reduction in Base Rent and Percentage Rent contemplated hereby, Lessee shall have the option to terminate this Lease upon not less than
thirty (30) days prior written notice to Lessor. 
 (b) In the event of the occurrence of a National Economic Decline or a Regional
Market Decline, Lessor and Lessee shall, in good faith, negotiate (i) possible modifications to the Base Rent and Percentage Rent to reduce such Base Rent and Percentage Rent to recent market rates for hotel REIT leases for similar hotel
properties in the Hotel’s Competitive Set, and (ii) possible modifications to the Base and Percentage Rent payable under each of the Other Leases for Other Hotels in the same Region (as defined in the STR Reports) as the Hotel to reduce
such Base Rent and Percentage Rent to recent market rates for hotel REIT leases for similar hotel properties in the Hotel’s Competitive Set, in each case retroactively effective as of the first calendar month of the Term following the last day
of the six month period during which such Regional Market Decline has occurred with the excess of Base Rent and Percentage Rent actually paid for such period over the reduced Base Rent and Percentage Rent, plus interest thereon at the Base Rent, to
be credited to the next payments of Rent due and owing hereunder. If, within thirty (30) days after the date of written certification from Lessee to Lessor that a National Economic Decline and Regional Market Decline has occurred (accompanied
by reasonably detailed computations and documentation to support such assertion), Lessor and Lessee are unable to agree that a National Economic Decline or Regional Market Decline has occurred, the matter may be submitted by either party to
arbitration under Section 25.2 hereof for resolution (during which period Lessee shall continue to pay Base Rent and Percentage Rent as required under Section 3.1 of this Lease). If, within ninety (90) days (during which period Lessee
shall continue to pay Base Rent and Percentage Rent as required under Section 3.1 of this Lease) following the date of such initial written certification from Lessee (or the date of a decision of an arbitrator if required hereunder to determine
that a National Economic Decline and Regional Market Decline has occurred), Lessor and Lessee are unable to agree upon the amount of reduction in Base Rent and Percentage Rent contemplated hereby, Lessee shall have the option, upon not less than
sixty (60) days prior written notice to Lessor, to terminate all (but not less than all) of the Existing Leases of hotels in the same Region as the Hotel, including this Lease. 
  

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 3.6. Rent Adjustment: Basic Assumptions Incorrect. Except to the extent that doing so would cause
Lessor to recognize income other than “rents from real property” as defined in Section 856(d) of the Code, notwithstanding anything herein (other than Article 19) to the contrary, if (i) the facts and circumstances underlying the
documented, basic assumptions upon which both Lessor and Lessee have relied in determining the Base Rent, the Suite Revenue Breakpoint, and the Percentage Rent payable hereunder become materially incorrect solely as a result of (A) a decision
to re-brand the Hotel that is made after the Commencement Date, (B) the scope or cost of substantial renovations or other capital improvements to the Hotel, or (C) the implementation of any other hotel repositioning strategies (that were
not planned as of the Commencement Date) resulting in significant disruption of the operations of the Hotel (collectively, a “Repositioning”), and (ii) Lessor and Lessee so agree in writing, then Lessor and Lessee shall, in good
faith, negotiate modifications to the Base Rent, Suite Revenue Breakpoint and Percentage Rent to adjust (i.e., increase, decrease or reallocate among revenue categories) such Base Rent, Suite Revenue Breakpoint and Percentage Rent to reflect such
change in basic assumptions for the affected periods, using the same methodology and other basic assumptions as were initially utilized in determining the Base Rent, Suite Revenue Breakpoint and Percentage Rent hereunder. If Lessor and Lessee are
unable to agree, within thirty (30) days after the date of written certification from either Lessee or Lessor to the other party that a good faith dispute exists, as to the existence of the occurrence of a Repositioning or the adjustments to be
made to the amounts or percentages for the Base Rent, Suite Revenue Breakpoint and Percentage Rent hereunder as a result of any repositioning, the dispute may be submitted by either party to arbitration under Section 25.2 hereof for resolution
(during which period Lessee shall continue to pay Base Rent and Percentage Rent as required under Section 3.1 of this Lease); provided, however, that for purposes of applying the procedures in Section 25.3 to such arbitration, the target
deadline therein for concluding the arbitration shall be shortened from ninety (90) days to thirty (30) days. 
  

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 ARTICLE 4 
 ANNUAL BUDGETS; BOOKS AND RECORDS 
 4.1. Annual Budget. Not later than thirty (30) days
prior to the commencement of each Fiscal Year, Lessee shall submit the Annual Budget to Lessor. The Annual Budget shall contain the following, to the extent included in the operating budgets and capital budgets provided to Lessee by Manager under
the management agreement for the Hotel: 
 (a) Lessee’s reasonable estimate of Gross Revenues (including room rates and Suite Revenues),
Gross Operating Expenses, and Gross Operating Profits for the forthcoming Fiscal Year itemized on schedules on a quarterly basis as approved by Lessor and Lessee, as same may be revised or replaced from time to time by Lessee and approved by Lessor,
together with the assumptions, in narrative form, forming the basis of such schedules. 
 (b) An estimate of the amounts to be dedicated to
the repair, replacement, or refurbishment of Furniture and Equipment. 
 (c) An estimate of any amounts Lessor will be required to provide
for required or desirable capital improvements to the Hotel or any of its components. 
 (d) A cash flow projection. 
 (e) A business plan, which shall describe business objectives and strategies for the forthcoming Fiscal Year, and shall include without limitation an
analysis of the market area in which the Hotel competes, a comparison of the Hotel and its business with competitive hotels, an analysis of categories of potential guests, and a description of sales and marketing activities designed to achieve and
implement identified objectives and strategies. 
 4.2. Books and Records. Lessee shall keep full and adequate books of account and
other records reflecting the results of operation of the Hotel on an accrual basis, all in accordance with generally accepted accounting principles and the obligations of Lessee under this Lease. The books of account and all other records relating
to or reflecting the operation of the Hotel shall be kept either at the Hotel or at Lessee’s offices in Richmond, Virginia or at Manager’s central offices, and shall be available to Lessor and its representatives and its auditors or
accountants, at all reasonable times, upon prior written notice to Lessee and Manager, for examination, audit, inspection, and transcription; provided, however that Lessor may only inspect or audit records in Manager’s possession subject to the
terms of Lessee’s access thereto under the Management Agreement. All of such books and records pertaining to the Hotel including, without limitation, books of account, guest records and front office records, at all times shall be the property
of Lessor and shall not be removed from the Hotel or Lessee’s offices or Manager’s central offices (but may be moved among any of the foregoing) by Lessee without Lessor approval. 
  

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 ARTICLE 5 
 IMPOSITIONS; HOTEL COSTS 
 5.1. Payment of Impositions. Subject to Section 12.2 (relating
to permitted contests), Lessee will pay, or cause to be paid, all Impositions (other than Real Estate Taxes and Personal Property Taxes, which shall be paid by Lessor) before any fine, penalty, interest or cost may be added for non-payment, such
payments to be made directly to the taxing or other authorities where feasible, and will promptly furnish to Lessor copies of official receipts or other satisfactory proof evidencing such payments. Lessee’s obligation to pay such Impositions
shall be deemed absolutely fixed upon the date such Impositions become a lien upon the Leased Property or any part thereof. If any such Imposition may, at the option of the taxpayer, lawfully be paid in installments (whether or not interest shall
accrue on the unpaid balance of such Imposition), Lessee may exercise the option to pay the same (and any accrued interest on the unpaid balance of such Imposition) in installments and in such event, shall pay such installments during the Term
hereof (subject to Lessee’s right of contest pursuant to the provisions of Section 12.2) as the same respectively become due and before any fine, penalty, premium, further interest or cost may be added thereto. Lessor, at its expense,
shall, to the extent required or permitted by applicable law, prepare and file all tax returns in respect of Lessor’s net income, gross receipts, sales and use, single business, transaction privilege, rent, ad valorem, franchise taxes, Real
Estate Taxes, Personal Property Taxes and taxes on its capital stock, and Lessee, at its expense, shall, to the extent required or permitted by applicable laws and regulations, prepare and file all other tax returns and reports in respect of any
Imposition as may be required by governmental authorities. If any refund shall be due from any taxing authority in respect of any Imposition paid by Lessee, the same shall be paid over to or retained by Lessee if no Event of Default shall have
occurred hereunder and be continuing. If an Event of Default shall have occurred and be continuing, any such refund shall be paid over to or retained by Lessor. Any such funds retained by Lessor due to an Event of Default shall be applied as
provided in Article 16. Lessor and Lessee shall, upon request of the other, provide such data as is maintained by the party to whom the request is made with respect to the Leased Property as may be necessary to prepare any required returns and
reports. Lessee shall file all Personal Property Tax returns in such jurisdictions where it is legally required so to file. Lessor, to the extent it possesses the same, and Lessee, to the extent it possesses the same, will provide the other party,
upon request, with cost and depreciation records necessary for filing returns for any property classified as personal property. Where Lessor is legally required to file Personal Property Tax returns, Lessee shall provide Lessor with copies of
assessment notices in sufficient time for Lessor to file a protest. Lessor may, upon Notice to Lessee, at Lessor’s option and at Lessor’s sole expense, protest, appeal, or institute such other proceedings (in its or Lessee’s name) as
Lessor may deem appropriate to effect a reduction of real estate or personal property assessments for those Impositions to be paid by Lessor, and Lessee, at Lessor’s expense as aforesaid, shall fully cooperate with Lessor in such protest,
appeal, or other action. Lessor hereby agrees to indemnify, defend, and hold harmless Lessee from and against any claims, obligations, liabilities and loss against or incurred by Lessee in connection with such cooperation. Billings for reimbursement
of Personal Property Taxes by Lessee to Lessor shall be accompanied by copies of a bill therefor and payments thereof which identify the personal property with respect to which such payments are made. Lessor, however, reserves the right to effect
any such protest, appeal or other action and, upon Notice to Lessee, shall control any such activity, which shall then go forward at Lessor’s sole expense. Upon such Notice, Lessee, at Lessor’s expense, shall cooperate fully with such
activities. 
  

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 5.2. Notice of Impositions. Lessor shall give prompt Notice to Lessee of all Impositions payable
by Lessee hereunder of which Lessor at any time has knowledge, provided that Lessor’s failure to give any such Notice shall in no way diminish Lessee’s obligations hereunder to pay such Impositions, but such failure shall obviate any
default hereunder for a reasonable time after Lessee receives Notice of any Imposition which it is obligated to pay during the first taxing period applicable thereto. 
 5.3. Adjustment of Impositions. Impositions imposed in respect of the tax-fiscal period during which the Term terminates shall be adjusted and prorated between Lessor and Lessee, whether or not such Imposition
is imposed before or after such termination, and Lessee’s obligation to pay its prorated share thereof after termination shall survive such termination. 
 5.4. Utility Charges. Lessee will be solely responsible for obtaining and maintaining utility services to the Leased Property and will pay or cause to be paid all charges for electricity, gas, oil, water, sewer
and other utilities used in the Leased Property during the Term. 
 5.5. Insurance Premiums. Lessee will pay or cause to be paid all
premiums for the insurance coverage’s required to be maintained by it under Article 13. 
 5.6. Franchise Fees. Lessee will
maintain in full force and effect, and pay or cause to be paid all fees and other charges payable pursuant to, any Franchise Agreement with respect to the Hotel. 
 5.7. Ground Rent. In the event that Lessor’s interest in the Land is pursuant to a Ground Lease or sublease, Lessor shall be solely responsible for the payment of any ground rent, building rent or subrent,
as the case may be, due with respect to the Leased Property. 
 ARTICLE 6 
 LEASED PROPERTY; LESSEE’S PERSONAL PROPERTY 
 6.1. Ownership of the Leased Property. Lessee acknowledges that the Leased Property is the property of Lessor and that Lessee has only the right to the possession and use of the Leased Property upon the terms
and conditions of this Lease. 
 6.2. Lessee’s Personal Property. Lessee will acquire and maintain throughout the Term such
Inventory as is required to operate the Leased Property in the manner contemplated by this Lease. Lessee may (and shall as provided hereinbelow), at its expense, install, affix or assemble or place on any parcels of the Land or in any of the Leased
Improvements, any items of personal property (including Inventory) owned by Lessee. Lessee, at the commencement of the Term, and from time to time thereafter, shall provide Lessor with an accurate list of all such items of Lessee’s personal
property (collectively, the “Lessee’s Personal Property”). Lessee may, subject to the first sentence of this Section 6.2 and the conditions set forth below, remove any of Lessee’s Personal 

  

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Property set forth on such list at any time during the Term or upon the expiration or any prior termination of the Term. All of Lessee’s Personal
Property, other than Inventory, not removed by Lessee within ten (10) days following the expiration or earlier termination of the Term shall be considered abandoned by Lessee and may be appropriated, sold, destroyed or otherwise disposed of by
Lessor without first giving Notice thereof to Lessee, without any payment to Lessee and without any obligation to account therefor. Lessee will, at its expense, restore the Leased Property to the condition required by Subsection 2.3(g), including
repair of all damage to the Leased Property caused by the removal of Lessee’s Personal Property, whether effected by Lessee or Lessor. Upon the expiration or earlier termination of the Term, Lessor or its designee shall have the option to
purchase all Inventory on hand at the Leased Property at the time of such expiration or termination for a sale price equal to the fair market value of such Inventory. Lessee may make such financing arrangements, title retention agreements, leases or
other agreements with respect to Lessee’s Personal Property as it sees fit provided that Lessee first advises Lessor of any such arrangement and such arrangement expressly provides that in the event of Lessee’s default thereunder, Lessor
(or its designee) may assume Lessee’s obligations and rights under such arrangement. 
 6.3. Lessor’s Lien. To the fullest
extent permitted by applicable law, Lessor is granted a lien and security interest on all Lessee’s personal property now or hereinafter placed in or upon the Leased Property, and such lien and security interest shall remain attached to such
Lessee’s personal property until payment in full of all Rent and satisfaction of all of Lessee’s obligations hereunder; provided, however, Lessor shall subordinate its lien and security interest to that of any non-Affiliate of Lessee which
finances such Lessee’s personal property or any non-Affiliate conditional seller of such Lessee’s personal property, the terms and conditions of such subordination to be satisfactory to Lessor in the exercise of reasonable discretion.
Lessee shall, upon the request of Lessor, execute such financing statements or other documents or instruments reasonably requested by Lessor to perfect the lien and security interests herein granted. Lessee hereby authorizes Lessor to execute and
file financing statements signed only be a representative of Lessor covering the security interest of Lessor in Lessee’s personal property. 
 6.4. Lessor’s Option to Purchase Assets of Lessee. Effective on not less than ninety (90) days’ prior Notice given at any time within one hundred eighty (180) days before the expiration of the Term, but not later
than ninety (90) days prior to such expiration, or upon such shorter Notice period as shall be appropriate if this Lease is terminated prior to its expiration date, Lessor shall have the option to purchase all (but not less than all) of the
assets of Lessee, tangible and intangible, relating to the Leased Property (other than this Lease), at the expiration or termination of this Lease for an amount (payable in cash on the expiration date of this Lease) equal to the fair market value
thereof as appraised in conformity with Article 24, except that the appraisers need not be members of the American Institute of Real Estate Appraisers, but rather shall be appraisers having at least ten (10) years’ experience in valuing
similar assets. Notwithstanding any such purchase, Lessor shall obtain no rights to any trade name or logo used in connection with the Franchise Agreement unless separate agreement as to such use is reached with the applicable franchisor.

  

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 ARTICLE 7 
 CONDITION AND USE OF LEASED PROPERTY 
 7.1. Condition of the Leased Property. Lessee
acknowledges receipt and delivery of possession of the Leased Property. Lessee has examined and otherwise has knowledge of the condition of the Leased Property and has found the same to be satisfactory for its purposes hereunder. Lessee is leasing
the Leased Property “as is” in its present condition. Lessee waives any claim or action against Lessor in respect of the condition of the Leased Property. LESSOR MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, IN RESPECT OF THE
LEASED PROPERTY, OR ANY PART THEREOF, EITHER AS TO ITS FITNESS FOR USE, DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE OR OTHERWISE, AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, LATENT OR PATENT, IT BEING AGREED THAT ALL SUCH
RISKS ARE TO BE BORNE BY LESSEE. LESSEE ACKNOWLEDGES THAT THE LEASED PROPERTY HAS BEEN INSPECTED BY LESSEE AND IS SATISFACTORY TO IT. Provided, however, to the extent permitted by law, Lessor hereby assigns to Lessee all of Lessor’s rights to
proceed against any predecessor in title (other than any Affiliate of Lessee, which conveyed the Property to Lessor) for breaches of warranties or representations or for latent defects in the Leased Property. Lessor shall fully cooperate with Lessee
in the prosecution of any such claim, in Lessor’s or Lessee’s name, all at Lessee’s sole cost and expense. Lessee hereby agrees to indemnify, defend and hold harmless Lessor from and against any claims, obligations and liabilities
against or incurred by Lessor in connection with such cooperation. 
 7.2. Use of the Leased Property. 
 (a) Lessee covenants that it will proceed with all due diligence and will exercise reasonable efforts to obtain and to maintain all Licenses and other
approvals needed to use and operate the Leased Property and the Hotel under applicable local, state and federal law. 
 (b) Lessee shall use
or cause to be used the Leased Property only as a Courtyard by Marriott hotel facility, and for such other uses as may be necessary or incidental to such use or such other use as otherwise approved by Lessor (the “Primary Intended Use”).
Lessee shall not use the Leased Property or any portion thereof for any other use without the prior written consent of Lessor, which consent may be granted, denied or conditioned in Lessor’s sole discretion. No use shall be made or permitted to
be made of the Leased Property, and no acts shall be done, which will cause the cancellation or increase the premium of any insurance policy covering the Leased Property or any part thereof (unless another adequate policy satisfactory to Lessor is
available and Lessee pays any premium increase), nor shall Lessee sell or permit to be kept, used or sold in or about the Leased Property any article which may be prohibited by law or fire underwriter’s regulations. Lessee shall, at its sole
cost, comply with all of the requirements pertaining to the Leased Property of any insurance board, association, organization or company necessary for the maintenance of insurance, as herein provided, covering the Leased Property and Lessee’s
Personal Property. 
  

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 (c) Subject to the provisions of Articles 14, 15, 18 and 21, Lessee covenants and agrees that during the
Term it will (1) operate continuously the Leased Property as a hotel facility, (2) keep in full force and effect and comply with all the provisions of the Franchise Agreement and the Management Agreement, (3) not terminate or amend
the Franchise Agreement or the Management Agreement without the consent of Lessor (which shall not be unreasonably withheld or delayed), (4) maintain appropriate certifications and Licenses for such use and (5) seek to maximize the Gross
Revenues generated therefrom consistent with sound business practices. 
 (d) Lessee shall not commit or suffer to be committed any waste on
the Leased Property, or in the Hotel, nor shall Lessee cause or permit any nuisance thereon. 
 (e) Lessee shall neither suffer nor permit
the Leased Property or any portion thereof, or Lessee’s Personal Property, to be used in such a manner as (1) might reasonably tend to impair Lessor’s (or Lessee’s, as the case may be) title thereto or to any portion thereof, or
(2) may reasonably make possible a claim or claims of adverse usage or adverse possession by the public, as such, or of implied dedication of the Leased Property or any portion thereof, except as necessary in the ordinary and prudent operation
of the Hotel on the Leased Property. 
 7.3. Lessor to Grant Easements, Etc. Lessor will, from time to time, so long as no Event of
Default has occurred and is continuing, at the request of Lessee and at Lessee’s cost and expense (but subject to the approval of Lessor, which approval shall not be unreasonably withheld or delayed), (a) grant easements and other rights
in the nature of easements with respect to the Leased Property to third parties, (b) release existing easements or other rights in the nature of easements which are for the benefit of the Leased Property, (c) dedicate or transfer
unimproved portions of the Leased Property for road, highway or other public purposes, (d) execute petitions to have the Leased Property annexed to any municipal corporation or utility district, (e) execute amendments to any covenants and
restrictions affecting the Leased Property and (f) execute and deliver to any Person any instrument appropriate to confirm or effect such grants, releases, dedications, transfers, petitions and amendments (to the extent of its interests in the
Leased Property), but only upon delivery to Lessor of an Officer’s Certificate stating that such grant, release, dedication, transfer, petition or amendment does not interfere with the proper conduct of the business of Lessee on the Leased
Property and does not materially reduce the value of the Leased Property. 
 ARTICLE 8 
 LESSEE’S COMPLIANCE WITH LAW; ENVIRONMENTAL COVENANTS 
 8.1. Compliance with Legal and Insurance Requirements, Etc. Subject to Subsection 8.3(b) below and Section 12.2 (relating to permitted contests), Lessee, at its expense, will promptly (a) comply with
all applicable Legal Requirements and Insurance Requirements in respect of the use, operation, maintenance, repair and restoration of the Leased Property (excluding any repair or restoration of any portion of the Leased Property required to be made
by Lessor pursuant to Subsection 9.1(b) below, which repair shall be made by Lessor), and (b) procure, maintain and comply with all appropriate Licenses and other authorizations required for any use of the Leased Property and Lessee’s
Personal Property then being made, and for the proper erection, installation, operation and maintenance of the Leased Property or any part thereof. 
  

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 8.2. Legal Requirement Covenants. 
 (a) Subject to Subsection 8.3(b) and Subsection 9.1(b) below, Lessee covenants and agrees that the Leased Property and Lessee’s Personal Property
shall not be used for any unlawful purpose, and that Lessee shall not permit or suffer to exist any unlawful use of the Leased Property by others. Lessee shall acquire and maintain all appropriate licenses, certifications, permits and other
authorizations and approvals needed to operate the Leased Property in its customary manner for the Primary Intended Use, and any other lawful use conducted on the Leased Property as may be permitted from time to time hereunder. Lessee further
covenants and agrees that Lessee’s use of the Leased Property and maintenance, alteration, and operation of the same, and all parts thereof, shall at all times conform to all Legal Requirements, unless the same are finally determined by a court
of competent jurisdiction to be unlawful (and Lessee shall cause all sub-tenants, invitees or others within its control so to comply with all Legal Requirements). Lessee may, however, upon prior Notice to Lessor, contest the legality or
applicability of any such Legal Requirement or any licensure or certification decision if Lessee maintains such action in good faith, with due diligence, without prejudice to Lessor’s rights hereunder, and at Lessee’s sole expense. If by
the terms of any such Legal Requirement compliance therewith pending the prosecution of any such proceeding may legally be delayed without the occurrence of any charge or liability of any kind, or the filing of any lien, against the Hotel or
Lessee’s leasehold interest therein and without subjecting Lessee or Lessor to any liability, civil or criminal, for failure so to comply therewith, Lessee may delay compliance therewith until the final determination of such proceeding. If any
lien, charge or civil or criminal liability would be incurred by reason of any such delay, Lessee, on the prior written consent of Lessor, which consent shall not be unreasonably withheld or delayed, may nonetheless contest as aforesaid and delay as
aforesaid provided that such delay would not subject Lessor to criminal liability and Lessee both (a) furnishes to Lessor security reasonably satisfactory to Lessor against any loss or injury by reason of such contest or delay and
(b) prosecutes the contest with due diligence and in good faith. 
 (b) As between Lessor and Lessee, Lessee is solely responsible for
all liabilities or obligations of any kind with respect to employees at the Leased Property during the Term. Without limiting the generality of the foregoing sentence, Lessee is solely responsible for any required compliance with the Worker
Adjustment, Retraining and Notification Act of 1988 (the “WARN Act”) or any similar state law applicable to the Leased Property; any required compliance with the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
(“COBRA”); and all alleged and actual obligations and claims arising from or relating to any employment agreement, collective bargaining agreement or employee benefit plans, any grievances, arbitration’s, or unfair labor practice
charges, and relating to compliance with any applicable state or federal labor employment law, including but not limited to all laws pertaining to discrimination, workers’ compensation, unemployment compensation, occupational safety and health,
unfair labor practices, family and medical leave, and wages, hours or employee benefits. Lessee agrees to indemnify and defend and hold harmless Lessor from and against any claims relating to any of the foregoing matters. Lessee further agrees to
reimburse Lessor for any and all losses, damages, costs, expenses, liabilities and obligations of any kind, including without limitation reasonable attorney’s fees and other legal costs and expenses, incurred by Lessor in connection with any of
the foregoing matters. 
  

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 (c) Notwithstanding the Lessee’s obligations under Section 8.1 to obtain and maintain all
permits and licenses required for the use of the Leased Property, and without limiting any obligations of Lessee hereunder, if (i) applicable law requires that the owner (rather than a lessee) of a hotel be the licensee under the required
liquor license for the Hotel or (ii) the former owner of the Hotel is holding the liquor license and continuing to exercise management and supervision of the liquor services at the Hotel pending transfer of the license to Lessor or Lessee, the
Lessee shall indemnify and hold Lessor harmless from any liability, damages or claims (a) arising in connection with liquor operations at the Hotel during such period of time following the Commencement Date, except to the extent caused by
Lessor’s gross negligence or willful misconduct or (b) made by or through the former owner with respect to liquor operations at the Hotel following the Commencement Date. 
 8.3. Environmental Covenants. Lessor and Lessee (in addition to, and not in diminution of, Lessee’s covenants and undertakings in Sections
8.1 and 8.2 hereof) covenant and agree as follows: 
 (a) At all times hereafter until the later of (i) such time as all liabilities,
duties or obligations of Lessee to Lessor under the Lease have been satisfied in full and (ii) such time as Lessee completely vacates the Leased Property and surrenders possession of the same to Lessor, Lessee shall fully comply with all
Environmental Laws applicable to the Leased Property and the operations thereon. Lessee agrees to give Lessor prompt Notice of (1) all Environmental Liabilities; (2) all pending, threatened or anticipated Proceedings, and all notices,
demands, requests or investigations, relating to any Environmental Liability or relating to the issuance, revocation or change in any Environmental Authorization required for operation of the Leased Property; (3) all Releases at, on, in, under
or in any way affecting the Leased Property, or any Release known by Lessee at, on, in or under any property adjacent to the Leased Property; and (4) all facts, events or conditions that could reasonably lead to the occurrence of any of the
above-referenced matters. 
 (b) Lessor hereby agrees to defend, indemnify and save harmless any and all Lessee Indemnified Parties from and
against any and all Environmental Liabilities other than (i) Environmental Liabilities resulting from conditions disclosed in any environmental audit obtained by Lessor and provided to Lessee prior to the execution of this Lease (the
“Environmental Audit”), and (ii) Environmental Liabilities which were caused by the acts or negligent failures to act of Lessee. 
 (c) Lessee hereby agrees to defend, indemnify and save harmless any and all Lessor Indemnified Parties from and against any and all Environmental Liabilities which were (i) resulting from conditions disclosed in the Environmental
Audit, and (ii) caused by the acts or negligent failures to act of Lessee. 
 (d) If any Proceeding is brought against any Indemnified
Party in respect of an Environmental Liability with respect to which such Indemnified Party may claim indemnification under either Subsection 8.3(b) or (c), the Indemnifying Party, upon request, shall at its sole expense resist and defend such
Proceeding, or cause the same to be resisted and defended by counsel designated by the Indemnified Party and approved by the Indemnifying Party, which approval shall 

  

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not be unreasonably withheld or delayed; provided, however, that such approval shall not be required in the case of defense by counsel designated by any
insurance company undertaking such defense pursuant to any applicable policy of insurance. Each Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel will be at the sole expense of such Indemnified Party unless such counsel has been approved by the Indemnifying Party, which approval shall not be unreasonably withheld or delayed. The Indemnifying Party shall not be liable
for any settlement of any such Proceeding made without its consent, which shall not be unreasonably withheld or delayed, but if settled with the consent of the Indemnifying Party, or if settled without its consent (if its consent shall be
unreasonably withheld or delayed), or if there be a final, nonappealable judgment for an adversary party in any such Proceeding, the Indemnifying Party shall indemnify and hold harmless the Indemnified Parties from and against any liabilities and
loss incurred by such Indemnified Parties by reason of such settlement or judgment. 
 (e) At any time any Indemnified Party has reason to
believe circumstances exist which could reasonably result in an Environmental Liability, upon reasonable prior Notice to Lessee and Manager stating such Indemnified Party’s basis for such belief, an Indemnified Party shall be given immediate
access to the Leased Property (including, but not limited to, the right to enter upon, investigate, drill wells, take soil borings, excavate, monitor, test, cap and use available land for the testing of remedial technologies), Lessee’s
employees, and to all relevant documents and records regarding the matter as to which a responsibility, liability or obligation is asserted or which is the subject of any Proceeding; provided that such access may he conditioned or restricted as may
be reasonably necessary to ensure compliance with law and the safety of personnel and facilities or to protect confidential or privileged information. All Indemnified Parties requesting such immediate access and cooperation shall endeavor to
coordinate such efforts to result in as minimal interruption of the operation of the Leased Property as practicable. 
 (f) The
indemnification rights and obligations provided for in this Article 8 shall be in addition to any indemnification rights and obligations provided for elsewhere in this Lease. 
 (g) The indemnification rights and obligations provided for in this Article 8 shall survive the termination of this Lease. 
 For purposes of this Section 8.3, all amounts for which any Indemnified Party seeks indemnification shall be computed net of (a) any actual
income tax benefit resulting therefrom to such Indemnified Party, (b) any insurance proceeds received (net of tax effects) with respect thereto, and (c) any amounts recovered (net of tax effects) from any third parties based on claims the
Indemnified Party has against such third parties which reduce the damages that would otherwise be sustained; provided that in all cases, the timing of the receipt or realization of insurance proceeds or income tax benefits or recoveries from third
parties shall be taken into account in determining the amount of reduction of damages. Each Indemnified Party agrees to use its reasonable efforts to pursue, or assign to Lessee or Lessor, as the case may be, any claims or rights it may have against
any third party that would materially reduce the amount of damages otherwise incurred by such Indemnified Party. 
  

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 Notwithstanding anything to the contrary contained in this Lease, if Lessor shall become entitled to the
possession of the Leased Property by virtue of the termination of the Lease or repossession of the Leased Property, then Lessor may assign its indemnification rights under this Section 8.3 (but not any other rights under this Section 8.3)
to any Person to whom Lessor subsequently transfers the Leased Property, subject to the following conditions and limitations, each of which shall be deemed to be incorporated into the terms of such assignment, whether or not specifically referred to
therein: 
 (i) The indemnification rights referred to in this section may be assigned only if a known Environmental Liability
then exists or if a Proceeding is then pending or, to the knowledge of Lessee or Lessor, then threatened with respect to the Leased Property; 
 (ii) Such indemnification rights shall be limited to Environmental Liabilities relating to or specifically affecting the Leased Property; and 
 (iii) Any assignment of such indemnification rights shall be limited to the immediate transferee of Lessor, and shall not extend to any
such transferee’s successors or assigns. 
 ARTICLE 9 
 MAINTENANCE AND REPAIRS; ENCROACHMENTS AND RESTRICTIONS 
 9.1. Maintenance
and Repairs. 
 (a) Lessee, at its sole expense, will keep the Leased Property, and all private roadways, sidewalks and curbs appurtenant
thereto that are under Lessee’s control, including windows and plate glass, mechanical, electrical and plumbing systems and equipment (including conduit and ductware), and non-load bearing interior walls, and parking lot surfaces, in good order
and repair, except (i) for ordinary wear and tear (whether or not the need for such repairs occurred as a result of Lessee’s use, any prior use, the elements or the age of the Leased Property, or any portion thereof) and (ii) to the
extent of damage caused by Lessor’s gross negligence or willful misconduct or that of its employees or agents, and, except as otherwise provided in Subsection 9.1(b), Article 14 or Article 15, with reasonable promptness, make all necessary and
appropriate repairs replacements, and improvements thereto of every kind and nature, whether interior or exterior ordinary or extraordinary, foreseen or unforeseen or arising by reason of a condition existing prior to the commencement of the Term of
this Lease (concealed or otherwise), or required by any governmental agency having jurisdiction over the Leased Property, except as to the structural elements of the Leased Improvements. Lessee, however, shall be permitted to prosecute claims
against Lessor’s predecessors in title for breach of any representation or warranty or for any latent defects in the Leased Property to be maintained by Lessee unless Lessor is already diligently pursuing such a claim. All repairs shall, to the
extent reasonably achievable, be at least equivalent in quality to the original work. Lessee will not take or omit to take any action, the taking or omission of which might materially impair the value or the usefulness of the Leased Property or any
part thereof for its Primary Intended Use. 
  

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 (b) Notwithstanding Lessee’s obligations under Subsection 9.1(a) above, except to the extent of
damage caused by Lessee’s negligence or willful misconduct or that of its employees or agents, Lessor shall be required to bear the cost of maintaining any underground utilities and the structural elements of the Leased Improvements, including
exterior walls and the roof of the Hotel (but excluding windows and plate glass, mechanical, electrical and plumbing systems and equipment, including conduit and ductware, and non-load bearing walls, and parking lot surfaces). Except as set forth in
the preceding sentence and in Section 10.5, Lessor shall not under any circumstances be required to build or rebuild any improvement on the Leased Property, or to make any repairs, replacements, alterations, restorations or renewals of any
nature or description to the Leased Property, whether ordinary or extraordinary, foreseen or unforeseen, or to make any expenditure whatsoever with respect thereto, in connection with this Lease, or to maintain the Leased Property in any way. Lessee
hereby waives, to the extent permitted by law, the right to make repairs at the expense of Lessor, pursuant to any law in effect at the time of the execution of this Lease or hereafter enacted, except following default by Lessor under this Lease, to
the extent of repairs (for which Lessor is obligated hereunder) required to be made in order for the Hotel, and Lessee’s use thereof, to comply with Lessee’s obligations under the Franchise Agreement and the Management Agreement. Lessor
shall have the right to give, record and post, as appropriate, notices of nonresponsibility under any mechanic’s lien laws now or hereafter existing. 
 (c) Nothing contained in this Lease and no action or inaction by Lessor shall be construed as (1) constituting the request of Lessor, expressed or implied, to any contractor, subcontractor, laborer, materialman
or vendor to or for the performance of any labor or services or the furnishing of any materials or other property for the construction, alteration, addition, repair or demolition of or to the Leased Property or any part thereof, or (2) giving
Lessee any right, power or permission to contract for or permit the performance of any labor or services or the furnishing of any materials or other property in such fashion as would permit the making of any claim against Lessor in respect thereof
or to make any agreement that may create, or in any way be the basis for any right, title, interest, lien, claim or other encumbrance upon the estate of Lessor in the Leased Property, or any portion thereof. 
 9.2. Encroachments, Restrictions, Etc. Lessor represents and warrants that the Leased Improvements do not materially encroach upon any property,
street or right-of-way adjacent to the Leased Property, or violate the agreements or conditions contained in any lawful restrictive covenant or other agreement affecting the Leased Property, or any part thereof, or impair the rights of others under
any easement or right-of-way to which the Leased Property is subject. Except to the extent that such representation and warranty is breached by Lessor, if any of the Leased Improvements, at any time hereafter, materially encroach upon any property,
street or right-of-way adjacent to the Leased Property, or violate the agreements or conditions contained in any lawful restrictive covenant or other agreement affecting the Leased Property, or any part thereof, or impair the rights of others under
any easement or right-of-way to which the Leased Property is subject, then promptly upon the request of Lessor or at the behest of any Person affected by any such encroachment, violation or impairment, Lessee shall, at its expense, subject to its
right to contest the existence of any encroachment, violation or impairment and in such case, in the event of an adverse final determination, either (a) obtain valid and effective waivers or settlements of all claims, liabilities and damages
resulting from each such encroachment, violation or impairment, 

  

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whether the same shall affect Lessor or Lessee or (b) make such changes in the Leased Improvements, and take such other actions, as Lessee in the good
faith exercise of its judgment deems reasonably practicable to remove such encroachment, and to end such violation or impairment, including, if necessary, the alteration of any of the Leased Improvements, and in any event take all such actions as
may be necessary in order to be able to continue the operation of the Leased Improvements for the Primary Intended Use substantially in the manner and to the extent the Leased Improvements were operated prior to the assertion of such violation,
impairment or encroachment. Any such alteration shall be made in conformity with the applicable requirements of Article 10. Lessee’s obligations under this Section 9.2 shall be in addition to and shall in no way discharge or diminish any
obligation of any insurer under any policy of title or other insurance held by Lessor. 
 ARTICLE 10 
 ALTERATIONS AND IMPROVEMENTS; FF&E RESERVE 
 10.1. Alterations. After receiving approval of Lessor, which approval shall not be unreasonably withheld or delayed, Lessee shall have the right to make such additions, modifications or improvements to the Leased Property from time
to time as Lessee deems desirable for its permitted uses and purposes, provided that such action will not significantly alter the character or purposes or significantly detract from the value or operating efficiency thereof and will not
significantly impair the revenue-producing capability of the Leased Property or adversely affect the ability of Lessee to comply with the provisions of this Lease. The cost of such additions, modifications or improvements to the Leased Property
shall be paid by Lessee, and all such additions, modifications and improvements shall, without payment by Lessor at any time, be included under the terms of this Lease and upon expiration or earlier termination of this Lease shall pass to and become
the property of Lessor. 
 10.2. Salvage. All materials which are scrapped or removed in connection with the making of repairs
required by Articles 9 or 10 shall be or become the property of Lessor or Lessee depending on which party is paying for or providing the financing for such work. 
 10.3. Joint Use Agreements. If Lessee constructs additional improvements that are connected to the Leased Property or share maintenance facilities, HVAC, electrical, plumbing or other systems, utilities,
parking or other amenities, the parties shall enter into a mutually agreeable cross-easement or joint use agreement, the form of which has been approved in advance by Lessor, to make available necessary services and facilities in connection with
such additional improvements, to protect each of their respective interests in the properties affected, and to provide for separate ownership, use, and/or financing of such improvements. 
 10.4. [Reserved]. 
 10.5.
Furniture, Fixture and Equipment Allowance. Lessor shall be obligated to pay Lessee, when and as required to meet the requirements of the Franchise Agreement and the Management Agreement for a reserve for periodic repair, replacement or
refurbishing of furniture, fixtures and equipment that constitute Leased Property, an amount equal up to five percent (5%) of Suite Revenues monthly. Upon written request by Lessee to Lessor stating the specific use to be 

  

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made and the reasonable approval thereof by Lessor (or as otherwise required by the franchisor under the Franchise Agreement or Manager under the Management
Agreement), such reserve funds (and additional funds of Lessor, if necessary) shall be made available by Lessor for use by Lessee for replacement or refurbishing of furniture, fixtures and equipment that constitute Leased Property in connection with
the Primary Intended Use; provided, however, that no amounts made available under this Article shall be used to purchase property (other than “real property” within the meaning of Treasury Regulations Section 1.856-3(d)), to the
extent that doing so would cause Lessor to recognize income other than “rents from real property” as defined in Section 856(d) of the Code. Lessor’s obligation shall be cumulative, but not compounded, and any amounts that have
accrued hereunder shall be payable in future periods for such uses and in accordance with the procedure set forth herein. Lessee shall have no interest in any accrued obligation of Lessor hereunder after the termination of this Lease. 
 ARTICLE 11 
 COMPLIANCE WITH
FRANCHISE 
 11.1. Compliance with Franchise Agreement and Management Agreement. To the extent any of the provisions of the
Franchise Agreement or Management Agreement impose a greater obligation on Lessee than the corresponding provisions of the Lease, then Lessee shall be obligated to comply with, and to take all reasonable actions necessary to prevent breaches or
defaults under, the provisions of the Franchise Agreement and the Management Agreement. It is the intent of the parties hereto that Lessee shall comply in every respect with the provisions of the Franchise Agreement and the Management Agreement so
as to avoid any material default thereunder during the term of this Lease. Lessee shall not terminate, extend or enter into any material modification of the Franchise Agreement or the Management Agreement without in each instance first obtaining
Lessor’s prior written consent, which shall not be unreasonably withheld. Lessor and Lessee agree to cooperate with each other in the event it becomes necessary to obtain a franchise extension or modification (or, at Lessor’s option, a new
franchise) for the Leased Property, and in any transfer of the Franchise Agreement or Management Agreement to Lessor or any designee of Lessor or any successor to Lessee upon the termination of this Lease. In the event of expiration or termination
of a Franchise Agreement or Management Agreement, for whatever reason, Lessor will have the right, in the exercise of its sole discretion, to approve any new Franchise Agreement or Management Agreement for the Hotel. 
 ARTICLE 12 
 PERMITTED LIENS
AND CONTESTS 
 12.1. Liens. Subject to the provisions of Section 12.2 relating to permitted contests, Lessee will not
directly or indirectly create or allow to remain and will promptly discharge at its expense any lien, encumbrance, attachment, title retention agreement or claim upon the Leased Property or any attachment, levy, claim or encumbrance in respect of
the Rent, not including, however, (a) this Lease, (b) the matters included as exceptions in the title policy insuring Lessor’s interest in the Leased Property, (c) restrictions, liens and other encumbrances which are consented to
in writing by Lessor or any easements granted pursuant to the provisions of Section 7.3 of this Lease, (d) liens for those taxes upon Lessor or the Leased Property which Lessee is not required to pay hereunder, (e) subleases permitted
by Article 20 hereof, (f) liens for Impositions or for sums 

  

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resulting from noncompliance with Legal Requirements so long as (1) the same are not yet payable or are payable without the addition of any fine or
penalty or (2) such liens are in the process of being contested as permitted by Section 12.2, (g) liens of mechanics, laborers, materialmen, suppliers or vendors for sums either disputed or not yet due provided that (1) the
payment of such sums shall not be postponed under any related contract for more than sixty (60) days after the completion of the action giving rise to such lien and such reserve or other appropriate provisions as shall be required by law or
generally accepted accounting principles shall have been made therefor or (2) any such liens are in the process of being contested as permitted by Section 12.2 hereof, and (h) any liens which are the responsibility of Lessor pursuant
to the provisions of Article 22 of this Lease. 
 12.2. Permitted Contests. Lessee shall have the right to contest the amount or
validity of any Imposition to be paid by Lessee or any Legal Requirement or Insurance Requirement or any lien, attachment, levy, encumbrance, charge or claim (“Claims”) not otherwise permitted by Section 12.1, by appropriate legal
proceedings in good faith and with due diligence (but this shall not be deemed or construed in any way to relieve, modify or extend Lessee’s covenants to pay or its covenants to cause to be paid any such charges at the time and in the manner as
in this Section provided), on condition, however, that such legal proceedings shall not operate to relieve Lessee from its obligations hereunder and shall not cause the sale or risk the loss of any portion of the Leased Property, or any part
thereof, or cause Lessor or Lessee to be in default under any mortgage, deed of trust, security deed or other agreement encumbering the Leased Property or any interest therein. Upon the request of Lessor, Lessee shall either (a) provide a bond
or other assurance reasonably satisfactory to Lessor that all Claims which may be assessed against the Leased Property together with interest and penalties, if any, thereon will be paid, or (b) deposit within the time otherwise required for
payment with a bank or trust company as trustee upon terms reasonably satisfactory to Lessor, as security for the payment of such Claims, money in an amount sufficient to pay the same, together with interest and penalties in connection therewith, as
to all Claims which may be assessed against or become a Claim on the Leased Property, or any part thereof, in said legal proceedings. Lessee shall furnish Lessor and any lender of Lessor with reasonable evidence of such deposit within five
(5) days of the same. Lessor agrees to join in any such proceedings if the same be required legally to prosecute such contest of the validity of such Claims; provided, however, that Lessor shall not thereby be subjected to any liability or loss
for the payment of any costs or expenses in connection with any proceedings brought by Lessee; and Lessee covenants to indemnify and save harmless Lessor from any such liabilities, losses, costs or expenses. Lessee shall be entitled to any refund of
any Claims and such charges and penalties or interest thereon which have been paid by Lessee or paid by Lessor and for which Lessor has been fully reimbursed. In the event that Lessee fails to pay any Claims when due or to provide the security
therefor as provided in this Section and diligently to prosecute any contest of the same, Lessor may, upon ten (10) days’ advance Notice to Lessee, and Lessee’s failure to correct the same within such ten (10) day period, pay
such charges together with any interest and penalties and the same shall be repayable by Lessee to Lessor as Additional Charges at the next Payment Date provided for in this Lease; provided, however, that should Lessor reasonably determine that the
giving of such Notice would risk loss to the Leased Property or cause damage to Lessor, then Lessor shall give such Notice as is practical under the circumstances. Lessor reserves the right to contest any of the Claims at its expense not pursued by
Lessee. Lessor and Lessee agree to cooperate in coordinating the contest of any Claims. 
  

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 ARTICLE 13 
 INSURANCE REQUIREMENTS 
 13.1. General Insurance Requirements. During the Term of this Lease,
Lessor and Lessee shall at all times keep the Leased Property insured with the kinds and amounts of insurance described below, or such other insurance coverage(s) as may be required by the Franchise Agreement. This insurance shall be written by
companies authorized to issue insurance in the State. The policies must name Lessor and/or Lessee, as applicable, as the insured or as an additional named insured, as the case may be. Losses shall be payable to Lessor or Lessee as provided in this
Lease. Any loss adjustment shall require the written consent of Lessor and Lessee, each acting reasonably and in good faith. Evidence of insurance shall be deposited with Lessor. The policies on the Leased Property, including the Leased
Improvements, Fixtures and Lessee’s Personal Property, shall include the following: 
 (a) Lessor shall obtain and
maintain, at its own expense: 
 (i) Building insurance on the “Special Form” (formerly “All Risk” form)
(including earthquake and flood in reasonable amounts as determined by Lessor) in an amount not less than 100% of the then full replacement cost thereof (as defined in Section 13.2) or such other amount which is acceptable to Lessor and Lessee,
and personal property insurance (on other than Lessee’s Personal Property) on the “Special Form” in the full amount of the replacement cost thereof; 
 (ii) Insurance for loss or damage (direct and indirect) from steam boilers, pressure vessels or similar apparatus, now or hereafter
installed in the Hotel, in the minimum amount of $5,000,000 or in such greater amounts as are then customary; and 
 (iii)
Loss of income insurance on the “Special Form”, in the amount of one year of Base Rent and Additional Charges (to the extent quantifiable) for the benefit of Lessor. 
 (b) Lessee shall obtain and maintain, at its own expense: 
 (i) Personal property insurance on Lessee’s Personal Property on the “Special Form” in the full amount of the replacement
cost thereof; 
 (ii) Comprehensive general liability insurance, with amounts not less than $10,000,000 covering each of the
following: bodily injury, death, or property damage liability per occurrence, personal and advertising injury, general aggregate, products and completed operations, with respect to Lessor, and “all risk legal liability” (including liquor
law or “dram shop” liability, if liquor or alcoholic beverages are served on the Leased Property) with respect to Lessor and Lessee; 
  

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 (iii) Insurance covering such other hazards and in such amounts as may be customary for
comparable properties in the area of the Leased Property and is available from insurance companies, insurance pools or other appropriate companies authorized to do business in the State at rates which are economically practicable in relation to the
risks covered, as may be reasonably requested by Lessor; 
 (iv) Fidelity bonds with limits and deductibles as may be
reasonably requested by Lessor, covering Lessee’s employees in job classifications normally bonded under prudent hotel management practices in the United States or otherwise required by law; 
 (v) Worker’s compensation insurance coverage for all persons, if any, employed by Lessee on the Leased Premises, to the extent
necessary to protect Lessor and the Leased Property against Lessee’s worker’s compensation claims, such worker’s compensation insurance to be in accordance with the requirements of applicable local, state and federal law; 

(vi) Vehicle liability insurance for owned, non-owned, and hired vehicles, in the amount of $5,000,000; and 
 (vii) Such other insurance as Lessor may reasonably request for facilities such as the Leased Property and the operation thereof.

 13.2. Replacement Cost. The term “full replacement cost” as used herein shall mean the actual replacement cost of the
Leased Property requiring replacement from time to time including an increased cost of construction endorsement, if available, and the cost of debris removal. In the event either party believes that full replacement cost (the then-replacement cost
less such exclusions) has increased or decreased at any time during the Lease Term, it shall have the right to have such full replacement cost re-determined. 
 13.3. Waiver of Subrogation. All insurance policies carried by Lessor or Lessee covering the Leased Property, the Fixtures, the Hotel or Lessee’s Personal Property, including, without limitation, contents,
fire and casualty insurance, shall expressly waive any right of subrogation on the part of the insurer against the other party. The parties hereto agree that their policies will include such waiver clause or endorsement so long as the same are
obtainable without extra cost, and in the event of such an extra charge the other party, at its election, may pay the same, but shall not be obligated to do so. 
 13.4. Form Satisfactory, Etc. 
 (a) All of the policies of insurance referred to in this Article 13 to
be maintained by Lessee shall be written in a form, with deductibles and by insurance companies satisfactory to Lessor. Lessee shall pay all of the premiums therefor, and deliver such policies or certificates thereof to Lessor prior to their
effective date (and, with respect to any renewal policy, thirty (30) days prior to the expiration of the existing policy), and in the event of the failure of Lessee either to effect such insurance as herein called for or to pay the premiums
therefor, or to deliver such 

  

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policies or certificates thereof to Lessor at the times required, Lessor shall be entitled, but shall have no obligation, to effect such insurance and pay
the premiums therefor, and Lessee shall reimburse Lessor for any premium or premiums paid by Lessor for the coverages required of Lessee under this Article 13 upon written demand therefor, and Lessee’s failure to repay the same within thirty
(30) days after Notice of such failure from Lessor shall constitute an Event of Default within the meaning of Section 16.1. Each insurer mentioned in this Article 13 shall agree, by endorsement to the policy or policies issued by it, or by
independent instrument furnished to Lessor, that it will give to Lessor thirty (30) days’ written notice before the policy or policies in question shall be materially altered, allowed to expire or canceled. 
 (b) All of the policies of insurance referred to in this Article 13 to be maintained by Lessor shall be written in a form, with deductibles and by
insurance companies satisfactory to Lessee. Lessor shall pay all of the premiums therefor, and deliver such policies or certificates thereof to Lessee prior to their effective date (and, with respect to any renewal policy, thirty (30) days
prior to the expiration of the existing policy), and in the event of the failure of Lessor either to effect such insurance as herein called for or to pay the premiums therefor, or to deliver such policies or certificates thereof to Lessee at the
times required, Lessee shall be entitled, but shall have no obligation, to effect such insurance and pay the premiums therefor, and Lessor shall reimburse Lessee for any premium or premiums paid by Lessee for the coverages required under this
Section upon written demand therefor. Each insurer mentioned in this Article 13 shall agree, by endorsement to the policy or policies issued by it, or by independent instrument furnished to Lessee, that it will give to Lessee thirty
(30) days’ written notice before the policy or policies in question shall be materially altered, allowed to expire or canceled. 
 13.5. Increase in Limits. If either Lessor or Lessee at any time deems the limits of the personal injury or property damage under the comprehensive public liability insurance then carried to be either excessive or insufficient,
Lessor and Lessee shall endeavor in good faith to agree on the proper and reasonable limits for such insurance to be carried and such insurance shall thereafter be carried with the limits thus agreed on until further change pursuant to the
provisions of this Article 13. 
 13.6. Blanket Policy. Notwithstanding anything to the contrary contained in this Article 13. Lessee
or Lessor may bring the insurance provided for herein within the coverage of a so-called blanket policy or policies of insurance carried and maintained by Lessee (or Manager) or Lessor; provided, however, that the coverage afforded to Lessor and
Lessee will not be reduced or diminished or otherwise be different from that which would exist under a separate policy meeting all other requirements of this Lease by reason of the use of such blanket policy of insurance, and provided further that
the requirements of this Article 13 are otherwise satisfied. 
 13.7. No Separate Insurance. Lessee shall not, on Lessee’s own
initiative or pursuant to the request or requirement of any third party, take out separate insurance concurrent in form or contributing in the event of loss with that required in this Article to be furnished, or increase the amount of any then
existing insurance by securing an additional policy or additional policies, unless all parties having an insurable interest in the subject matter of the insurance, including in all cases Lessor, are included therein as additional insured, and the
loss is payable under such additional separate insurance in the same manner as losses are payable under this Lease. Lessee shall immediately notify Lessor of any such separate insurance that Lessee has obtained or of the increase of any of the
amounts of the then existing insurance. 
  

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 13.8. Reports On Insurance Claims. Lessee shall promptly investigate and make a complete and
timely written report to the appropriate insurance company as to all accidents, claims for damage relating to the ownership, operation, and maintenance of the Hotel, any damage or destruction to the Hotel and the estimated cost of repair thereof and
shall prepare any and all reports required by any insurance company in connection therewith. All such reports shall be timely filed with the insurance company as required under the terms of the insurance policy involved, and a final copy of such
report shall be furnished to Lessor. Lessee shall be authorized to adjust, settle, or compromise any insurance loss, or to execute proofs of such loss, in the aggregate amount of $25,000 or less, with respect to any single casualty or other event.

 ARTICLE 14 
 CASUALTY INSURANCE PROCEEDS; RECONSTRUCTION 
 14.1. Insurance Proceeds. Subject to the provisions of
Section 14.4, all proceeds payable by reason of any loss or damage to the Leased Property, or any portion thereof, insured under any policy of insurance required by Article 13 of this Lease, shall be paid to Lessor and held in trust by Lessor
in an interest-bearing account, shall be made available, if applicable, for reconstruction or repair, as the case may be, of any damage to or destruction of the Leased Property, or any portion thereof, and, if applicable, shall be paid out by Lessor
from time to time for the reasonable costs of such reconstruction or repair upon satisfaction of reasonable terms and conditions specified by Lessor. Any excess proceeds of insurance (and accrued interest) remaining after the completion of the
restoration or reconstruction of the Leased Property, as hereinafter set forth, shall be paid to Lessee. If neither Lessor nor Lessee is required or elects to repair and restore, and the Lease is terminated without purchase by Lessee as described in
Section 14.2, all such insurance proceeds shall be retained by Lessor. All salvage resulting from any risk covered by insurance shall belong to Lessor. 
 14.2. Reconstruction in the Event of Damage or Destruction Covered by Insurance. 
 (a) Except as
provided in Section 14.6, if during the Term the Leased Property is totally or partially destroyed by a risk covered by the insurance described in Article 13 and the Hotel thereby is rendered Unsuitable for its Primary Intended Use, Lessee
shall, at Lessee’s option, either (1) restore the Hotel to substantially the same condition as existed immediately before the damage or destruction and otherwise in accordance with the terms of the Lease, or (2) offer to acquire the
Leased Property from Lessor for a purchase price equal to the Rejectable Offer Price of the Leased Property. If Lessee restores the Hotel, the insurance proceeds shall be paid out by Lessor from time to time for the reasonable costs of such
restoration upon satisfaction of reasonable terms and conditions, and any excess proceeds remaining after such restoration shall be paid to Lessee. If Lessee acquires the Leased Property, Lessee shall receive the insurance proceeds. If Lessor does
not accept Lessee’s offer so to purchase the Leased Property within ninety (90) days, Lessee may withdraw its offer to purchase the Leased Property and, if so withdrawn, Lessee may terminate the Lease with respect to the Leased Property
without further liability hereunder and Lessor shall be entitled to retain all insurance proceeds. 
  

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 (b) Except as provided in Section 14.6, if during the Term the Leased Property is partially
destroyed by a risk covered by the insurance described in Article 13, but the Hotel is not thereby rendered Unsuitable for its Primary Intended Use, Lessee shall restore the Hotel to substantially the same condition as existed immediately before the
damage or destruction and otherwise in accordance with the terms of the Lease. Such damage or destruction shall not terminate this Lease; provided, however, that if Lessee cannot within a reasonable time obtain all necessary government approvals,
including building permits, licenses and conditional use permits, after diligent efforts to do so, to perform all required repair and restoration work and to operate the Hotel for its Primary Intended Use in substantially the same manner as that
existing immediately prior to such damage or destruction and otherwise in accordance with the terms of the Lease, Lessee may offer to purchase the Leased Property for a purchase price equal to the Rejectable Offer Price of the Leased Property,
determined without regard to such damage or destruction if insurance proceeds are available to restore the Hotel. If Lessee makes such offer and Lessor does not accept the same, Lessee shall withdraw such offer, in which event this Lease shall
remain in full force and effect and Lessee shall immediately proceed to restore the Hotel to substantially the same condition as existed immediately before such damage or destruction and otherwise in accordance with the terms of the Lease. If Lessee
restores the Hotel, the insurance proceeds shall be paid out by Lessor from time to time for the reasonable costs of such restoration upon satisfaction of reasonable terms and conditions specified by Lessor, and any excess proceeds remaining after
such restoration shall be paid to Lessee. 
 (c) If the cost of the repair or restoration exceeds the amount of proceeds received by Lessor
from the insurance it maintains as required under Article 13, Lessee shall be obligated to contribute any excess amounts needed to restore the Hotel. Such difference shall be paid by Lessee to Lessor promptly after Lessee receives Lessor’s
written invoice therefor, to be held in trust in an interest-bearing account, together with any other insurance proceeds, for application to the cost of repair and restoration. 
 (d) If Lessor accepts Lessee’s offer to purchase the Leased Property under this Article, this Lease shall terminate as to the Leased Property upon
payment of the purchase price, and Lessor shall remit to Lessee all insurance proceeds pertaining to the Leased Property being held in trust by Lessor. 
 14.3. Reconstruction in the Event of Damage or Destruction Not Covered by Insurance. Except as provided in Section 14.6, if during the Term the Hotel is totally or materially destroyed by a risk not
covered by the insurance described in Article 13, whether or not such damage or destruction renders the Hotel Unsuitable for its Primary Intended Use, Lessee at its option shall either, (a) at Lessee’s sole cost and expense, restore the
Hotel to substantially the same condition it was in immediately before such damage or destruction and such damage or destruction shall not terminate this Lease, or (b) offer to purchase the Leased Property for a purchase price equal to the
Rejectable Offer Price of the Leased Property without regard to such damage or destruction. If such damage or destruction is not material, Lessee shall restore the Hotel to substantially the same condition as existed immediately before the damage or
destruction and otherwise in accordance with the terms of the Lease. If Lessor does not accept Lessee’s offer so to purchase the Leased Property within ninety (90) days, Lessee may withdraw its offer to purchase the Leased Property and, if
so withdrawn, Lessee may terminate the Lease with respect to the Leased Property without further liability hereunder. 
  

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 14.4. Lessee’s Property. All insurance proceeds payable by reason of any loss of or damage to
any of Lessee’s Personal Property shall be paid to Lessee; provided, however, no such payments shall diminish or reduce the insurance payments otherwise payable to or for the benefit of Lessor hereunder. 
 14.5. Abatement of Rent. Any damage or destruction due to casualty notwithstanding, this Lease shall remain in full force and effect and
Lessee’s obligation to make rental payments and to pay all other charges required by this Lease shall remain unabated during the first three (3) months of any period required for the applicable repair and restoration. Thereafter, Base Rent
shall be equitably abated. 
 14.6. Damage Near End of Term. Notwithstanding any provisions of Section 14.2 or 14.3 appearing to
the contrary, if damage to or destruction of the Hotel rendering it unsuitable for its Primary Intended Use occurs during the last twenty-four (24) months of the Term, then Lessor or Lessee shall have the right to terminate this Lease by giving
Notice, respectively, to Lessee or Lessor within thirty (30) days after the date of damage or destruction, whereupon all accrued Rent shall be paid immediately, and this Lease shall automatically terminate five (5) days after the date of
such Notice. 
 14.7. Waiver. Lessee hereby waives any statutory rights of termination that may arise by reason of any damage or
destruction of the Hotel that Lessor is obligated to restore or may restore under any of the provisions of this Lease. 
 ARTICLE 15

 CONDEMNATION; AWARD ALLOCATION 
 15.1. Definitions. 
 (a) “Award” means all compensation, sums or anything of value
awarded, paid or received on a total or partial Condemnation. 
 (b) “Condemnation” means a Taking resulting from
(1) the exercise of any governmental power, whether by legal proceedings or otherwise, by a Condemnor, and (2) a voluntary sale or transfer by Lessor to any Condemnor, either under threat of condemnation or while legal proceedings for
condemnation are pending. 
 (c) “Condemnor” means any public or quasi-public authority, or private corporation or
individual, having the power of Condemnation. 
 (d) “Date of Taking” means the date the Condemnor has the right to
possession of the property being condemned. 
  

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 15.2. Parties’ Rights and Obligations. If during the Term there is any Condemnation of all or
any part of the Leased Property or any interest in this Lease, the rights and obligations of Lessor and Lessee shall be determined by this Article 15. 
 15.3. Total Taking. If title to the fee of the whole of the Leased Property is condemned by any Condemnor, this Lease shall cease and terminate as of the Date of Taking by the Condemnor. If title to the fee of
less than the whole of the Leased Property is so taken or condemned, which nevertheless renders the Leased Property Unsuitable or Uneconomic for its Primary Intended Use, Lessee and Lessor shall each have the option, by Notice to the other, at any
time prior to the Date of Taking, to terminate this Lease as of the Date of Taking. Upon such date, if such Notice has been given, this Lease shall thereupon cease and terminate. All Base Rent, Percentage Rent and Additional Charges paid or payable
by Lessee hereunder shall be apportioned as of the Date of Taking, and Lessee shall promptly pay Lessor such amounts. 
 15.4. Allocation
of Award. The total Award made with respect to the Leased Property or for loss of rent, or for Lessor’s loss of business beyond the Term, shall be solely the property of and payable to Lessor. Any Award made for loss of Lessee’s
business during the remaining Term, if any, for the taking of Lessee’s Personal Property, or for removal and relocation expenses of Lessee in any such proceedings shall be the sole property of and payable to Lessee. In any Condemnation
proceedings Lessor and Lessee shall each seek its Award in conformity herewith, at its respective expense; provided, however, Lessee shall not initiate, prosecute or acquiesce in any proceedings that may result in a diminution of any Award payable
to Lessor. 
 15.5. Partial Taking. If title to less than the whole of the Leased Property is condemned, and the Leased Property is
not Unsuitable for its Primary Intended Use, and not Uneconomic for its Primary Intended Use, or if Lessee or Lessor is entitled but neither elects to terminate this Lease as provided in Section 15.3, Lessee at its cost shall with all
reasonable dispatch restore the untaken portion of any Leased Improvements so that such Leased Improvements constitute a complete architectural unit of the same general character and condition (as nearly as may be possible under the circumstances)
as the Leased Improvements existing immediately prior to the Condemnation. Lessor shall contribute to the cost of restoration that part of its Award specifically allocated to such restoration, if any, together with severance and other damages
awarded for the taken Leased Improvements; provided, however, that the amount of such contribution shall not exceed such cost. In the event of such a partial Taking, this Lease shall not terminate, but the Base Rent shall be abated in the manner and
to the extent that is fair, just and equitable to both Lessee and Lessor, taking into consideration, among other relevant factors, the number of usable rooms, the amount of square footage, or the revenues affected by such partial Taking. If Lessor
and Lessee are unable to agree upon the amount of such abatement within thirty (30) days after such partial Taking, the matter may be submitted by either party to a court of competent jurisdiction for resolution. 
 15.6. Temporary Taking. If the whole or any part of the Leased Property (other than the fee) or of Lessee’s interest under this Lease is
condemned by any Condemnor for its temporary use or occupancy (which shall mean a period not to exceed two years), this Lease shall not terminate by reason thereof, and Lessee shall continue to pay, in the manner and at the terms herein specified,
the full amounts of Base Rent and Additional Charges. In addition, Lessee shall pay Percentage Rent at a rate equal to the average Percentage Rent during the last three (3) preceding Fiscal Years 

  

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(or if three (3) Fiscal Years shall not have elapsed, the average during the preceding Fiscal Years). Except only to the extent that Lessee may be
prevented from so doing pursuant to the terms of the order of the Condemnor, Lessee shall continue to perform and observe all of the other terms, covenants, conditions and obligations hereof on the part of Lessee to be performed and observed, as
though such Condemnation had not occurred. In the event of any Condemnation as in this Section 15.6 described, the entire amount of any Award made for such Condemnation allocable to the Term of this Lease, whether paid by way of damages, rent
or otherwise, shall be paid to Lessee. Lessee covenants that upon the termination of any such period of temporary use or occupancy it will, at its sole cost and expense (subject to Lessor’s contribution as set forth below), restore the Leased
Property as nearly as may be reasonably possible to the condition in which the same was immediately prior to such Condemnation, unless such period of temporary use or occupancy extends beyond the expiration of the Term, in which case Lessee shall
not be required to make such restoration. If restoration is required hereunder, Lessor shall contribute to the cost of such restoration that portion of its entire Award that is specifically allocated to such restoration in the judgment or order of
the court, if any, and Lessee shall fund the balance of such costs in a manner reasonably satisfactory to Lessor. 
 ARTICLE 16 

 DEFAULT BY LESSEE; LESSOR’S REMEDIES 
 16.1. Events of Default. If any one or more of the following events (individually, an “Event of Default”) occurs: 
 (a) if an Event of Default occurs under any other lease between Lessor or any Affiliate of Lessor and Lessee or any Affiliate of Lessee; or 
 (b) if Lessee fails to make payment of the Base Rent within ten (10) days after the same becomes due and payable; or 
 (c) if Lessee fails to make payment of Percentage Rent when the same becomes due and payable and such condition continues for a period of thirty
(30) days after the end of the applicable quarter; or 
 (d) if Lessee fails to observe or perform any other term, covenant or condition
of this Lease and such failure is not cured by Lessee within a period of thirty (30) days after receipt by Lessee of Notice thereof from Lessor, unless such failure cannot with due diligence be cured within a period of thirty (30) days, in
which case it shall not be deemed an Event of Default if Lessee proceeds promptly and with due diligence to cure the failure and diligently completes the curing thereof provided, however, in no event shall such cure period extend beyond ninety
(90) days after such Notice; or 
 (e) if Lessee shall file a petition in bankruptcy or reorganization for an arrangement pursuant to
any federal or state bankruptcy law or any similar federal or state law, or shall be adjudicated a bankrupt or shall make an assignment for the benefit of creditors or shall admit in writing its inability to pay its debts generally as they become
due, or if a petition or answer proposing the adjudication of Lessee as a bankrupt or its reorganization pursuant to any federal or 

  

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state bankruptcy law or any similar federal or state law shall be filed in any court and Lessee shall be adjudicated a bankrupt and such adjudication shall
not be vacated or set aside or stayed within sixty (60) days after the entry of an order in respect thereof, or if a receiver of Lessee or of the whole or substantially all of the assets of Lessee shall be appointed in any proceeding brought by
Lessee or if any such receiver, trustee or liquidator shall be appointed in any proceeding brought against Lessee and shall not be vacated or set aside or stayed within sixty (60) days after such appointment; or 
 (f) if Lessee is liquidated or dissolved, or begins proceedings toward such liquidation or dissolution, or, in any manner, permits the sale or
divestiture of substantially all of its assets; or 
 (g) if, except as expressly permitted herein, the estate or interest of Lessee in the
Leased Property or any part thereof is voluntarily or involuntarily transferred, assigned, conveyed, levied upon or attached in any proceeding (unless Lessee is contesting such lien or attachment in good faith in accordance with Section 12.2
hereof) or there is a Change of Control of Lessee; or 
 (h) if, except as a result of damage, destruction or a partial or complete
Condemnation as contemplated by this Lease, Lessee voluntarily ceases operations on the Leased Property for a period in excess of thirty (30) days; or 
 (i) if an event of default has been declared by the franchisor under the Franchise Agreement with respect to the Hotel as a result of any action or failure to act by Lessee or any Person with whom Lessee contracts for
management services at the Hotel, and such default is not cured by the earlier of (A) ten (10) days following notice from Lessor or (B) such earlier date as is required for Lessee to avoid termination of the Franchise Agreement by the
franchisor; 
 then, and in any such event, Lessor may exercise one or more remedies available to it herein or at law or in equity, including but not limited
to its right to terminate this Lease by giving Lessee not less than ten (10) days’ Notice of such termination. 
 If litigation is
commenced with respect to any alleged default under this Lease, the prevailing party in such litigation shall receive, in addition to its damages incurred, such sum as the court shall determine as its reasonable attorneys’ fees, and all costs
and expenses incurred in connection therewith. 
 No Event of Default (other than a failure to make a payment of money) shall be deemed to
exist under clause (d) during any time the curing thereof is prevented by an Unavoidable Delay, provided that upon the cessation of such Unavoidable Delay, Lessee remedies such default or Event of Default without further delay. 
 16.2. Surrender. If an Event of Default occurs (and the event giving rise to such Event of Default has not been cured within the curative period
relating thereto as set forth in Section 16.1) and is continuing, whether or not this Lease has been terminated pursuant to Section 16.1, Lessee shall, if requested by Lessor so to do, immediately surrender to Lessor the Leased Property
including, without limitation, any and all books, records, files, licenses, permits and keys relating 

  

 47 

 
thereto, and quit the same and Lessor may enter upon and repossess the Leased Property by summary proceedings, ejectment or otherwise, and may remove Lessee
and all other Persons and any and all personal property from the Leased Property, subject to rights of any hotel guests and to any requirement of law. Lessee hereby waives any and all requirements of applicable laws for service of notice to re-enter
the Leased Property. Lessor shall be under no obligation to, but may if it so chooses, relet the Leased Property or otherwise mitigate Lessor’s damages. 
 16.3. Damages. Neither (a) the termination of this Lease, (b) the repossession of the Leased Property, (c) the failure of Lessor to relet the Leased Property, nor (d) the reletting of all or
any portion thereof, shall relieve Lessee of its liability and obligations hereunder, all of which shall survive any such termination, repossession or reletting. In the event of any such termination, Lessee shall forthwith pay to Lessor all Rent due
and payable with respect to the Leased Property to and including the date of such termination. 
 Lessee shall forthwith pay to Lessor, at
Lessor’s option, as and for liquidated and agreed current damages for Lessee’s default, either: 
 (i) Without
termination of Lessee’s right to possession of the Leased Property, each installment of Rent (including Percentage Rent as determined below) and other sums payable by Lessee to Lessor under the Lease as the same becomes due and payable, which
Rent and other sums shall bear interest at the Overdue Rate, and Lessor may enforce, by action or otherwise, any other term or covenant of this Lease; or 
 (ii) the sum of: 
 (A) the unpaid Rent which had been earned at the time of termination,
repossession or reletting, and 
 (B) the worth at the time of termination, repossession or reletting of the amount by which
the unpaid Rent for the balance of the Term after the time of termination, repossession or reletting, exceeds the amount of such rental loss that Lessee proves could be reasonably avoided and as reduced for rentals received after the time of
termination, repossession or reletting, if and to the extent required by applicable law, and 
 (C) any other amount necessary
to compensate Lessor for all the detriment proximately caused by Lessee’s failure to perform its obligations under this Lease or which in the ordinary course of things, would be likely to result therefrom. 
 The worth at the time of termination, repossession or reletting of the amount referred to in subparagraph (B) is computed by discounting such amount
at the discount rate of the Federal Reserve Bank of New York at the time of award plus one percent (1%). Percentage Rent for the purposes of this Section 16.3 shall be a sum equal to (i) the average of the annual amounts of the Percentage
Rent for the three (3) Fiscal Years immediately preceding the Fiscal Year in 

  

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which the termination, re-entry or repossession takes place, or (ii) if three (3) Fiscal Years shall not have elapsed, the average of the
Percentage Rent during the preceding Fiscal Years during which the Lease was in effect, or (iii) if one Fiscal Year has not elapsed, the amount derived by annualizing the Percentage Rent from the effective date of this Lease. 
 16.4. Waiver. If this Lease is terminated pursuant to Section 16.1, Lessee waives, to the extent permitted by applicable law, (a) any
right to a trial by jury in the event of summary proceedings to enforce the remedies set forth in this Article 16, and (b) the benefit of any laws now or hereafter in force exempting property from liability for rent or for debt and Lessor
waives any right to “pierce the corporate veil” of Lessee other than to the extent funds shall have been fraudulently paid by Lessee to any Affiliate of Lessee following a default resulting in an Event of Default. 
 16.5. Application of Funds. Any payments received by Lessor under any of the provisions of this Lease during the existence or continuance of any
Event of Default shall be applied to Lessee’s obligations in the order that Lessor may determine or as may be prescribed by the laws of the State. 
 16.6. Lessor’s Right to Cure Lessee’s Default. If Lessee fails to make any payment or to perform any act required to be made or performed under this Lease, including, without limitation, Lessee’s
failure to comply with the terms of any Franchise Agreement, and fails to cure the same within the relevant time periods provided in Section 16.1, Lessor, without waiving or releasing any obligation of Lessee, and without waiving or releasing
any obligation or default, may (but shall be under no obligation to) at any time thereafter make such payment or perform such act for the account and at the expense of Lessee, and may, to the extent permitted by law, enter upon the Leased Property
for such purpose and, subject to Section 16.4, take all such action thereon as, in Lessor’s opinion, may be necessary or appropriate therefor. No such entry shall be deemed an eviction of Lessee. All sums so paid by Lessor and all costs
and expenses (including, without limitation, reasonable attorneys’ fees and expenses, in each case to the extent permitted by law) so incurred, together with a late charge thereon (to the extent permitted by law) at the Overdue Rate from the
date on which such sums or expenses are paid or incurred by Lessors, shall be paid by Lessee to Lessor on demand. The obligations of Lessee and rights of Lessor contained in this Article shall survive the expiration or earlier termination of this
Lease. 
 ARTICLE 17 
 DEFAULT BY LESSOR; LESSEE’S REMEDIES 
 17.1. Breach by Lessor. It shall be a breach of this Lease if Lessor
fails to observe or perform any term, covenant or condition of this Lease on its part to be performed and such failure continues for a period of thirty (30) days after Notice thereof from Lessee, unless such failure cannot with due diligence be
cured within a period of thirty (30) days, in which case such failure shall not be deemed to continue if Lessor, within such thirty (30) day period, proceeds promptly and with due diligence to cure the failure and diligently completes the
curing thereof; provided, however, that such default shall be cured by Lessor in any event prior to the date on which the default becomes an event of default under the terms of the Franchise Agreement for the Hotel. The time within which Lessor
shall be obligated to cure any such failure also shall be subject to 

  

 49 

 
extension of time due to the occurrence of any Unavoidable Delay. If Lessor fails to cure any such breach within the grace period described above, Lessee,
without waiving or releasing any obligations hereunder, and in addition to all other remedies available to Lessee at law or in equity, may purchase the Leased Property from Lessor for a purchase price equal to the then Fair Market Value. If Lessee
elects to purchase the Leased Property it shall deliver a Notice thereof to Lessor specifying a settlement date to occur not less than ninety (90) days subsequent to the date of such Notice on which it shall purchase the Leased Property, and
the same shall be thereupon conveyed in accordance with the provisions of Section 17.3; provided, however, that Lessor shall pay the cost of Lessee’s title insurance and all closing costs associated with such purchase by Lessee following
default by Lessor. 
 17.2. Lessee’s Right to Cure. Subject to the provisions of Section 17.1, if Lessor breaches any
covenant to be performed by it under this Lease, Lessee, after Notice to and demand upon Lessor, without waiving or releasing any obligation hereunder, and in addition to all other remedies available to Lessee, may (but shall be under no obligation
at any time thereafter to) make such payment or perform such act for the account and at the expense of Lessor. All sums so paid by Lessee and all costs and expenses (including, without limitation, reasonable attorneys’ fees) so incurred,
together with interest thereon at the Overdue Rate from the date on which such sums or expenses are paid or incurred by Lessee, shall be paid by Lessor to Lessee on demand or, following entry of a final, nonappealable judgment against Lessor for
such sums, may be offset by Lessee against the Base Rent and/or Percentage Rent payments next accruing or coming due. The rights of Lessee hereunder to cure and to secure payment from Lessor in accordance with this Section 17.2 shall survive
the termination of this Lease with respect to the Leased Property. 
 17.3. Provisions Relating to Purchase of the Leased Property by
Lessee. If Lessee purchases the Leased Property from Lessor pursuant to any of the terms of this Lease, Lessor shall, upon receipt from Lessee of the applicable purchase price, together with full payment of any unpaid Rent due and payable with
respect to any period ending on or before the date of the purchase, deliver to Lessee an appropriate limited or special warranty deed or other conveyance conveying the entire interest of Lessor in and to the Leased Property to Lessee free and clear
of all encumbrances other than (a) those that Lessee has agreed hereunder to pay or discharge, (b) those mortgage liens, if any, that Lessee has agreed in writing to accept and to take title subject to, (c) those liens and
encumbrances subject to which the Leased Property was conveyed to Lessor, to the extent not released in connection with the transactions contemplated by this Lease, (d) encumbrances, easements, licenses or rights of way required to be imposed
on the Leased Property under Section 7.3, and (e) any other encumbrances permitted to be imposed on the Leased Property under the provisions of Article 22 that are assumable at no cost to Lessee or to which Lessee may take subject without
cost to Lessee. The difference between the applicable purchase price and the total of the encumbrances assumed or taken subject to shall be paid in cash to Lessor or as Lessor may direct, in federal or other immediately available funds, except as
otherwise mutually agreed by Lessor and Lessee. All expenses of such conveyance, including, without limitation, the cost of title examination or title insurance, if desired by Lessee, Lessee’s attorneys’ fees incurred in connection with
such conveyance and release, and one-half of any transfer taxes and recording fees, shall be paid by Lessee. Lessor shall pay one-half of any transfer taxes and recording fees and its attorney’s fees. 
  

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 ARTICLE 18 
 INDEMNIFICATION 
 18.1. Indemnification. 
 (a) Notwithstanding the existence of any insurance, and without regard to the policy limits of any such insurance or self-insurance, but subject to
Section 13.3 and Section 8.3, Lessee will protect, indemnify, hold harmless and defend Lessor from and against all liabilities, losses, obligations, claims, damages, penalties, causes of action, costs and expenses (including, without
limitation, reasonable attorneys’ fees and expenses), to the extent permitted by law, imposed upon or incurred by or asserted against Lessor Indemnified Parties by reason of: (a) any accident, injury to or death of persons or loss of or
damage to property occurring on or about the Leased Property or adjoining sidewalks, including without limitation any claims under liquor liability, “dram shop” or similar laws, (b) any use, misuse, non-use, condition, management,
maintenance or repair by Lessee or any of its agents, employees or invitees of the Leased Property or Lessee’s Personal Property during the Term or any litigation, proceeding or claim by governmental entities or other third parties to which a
Lessor Indemnified Party is made a party or participant related to such use, misuse, non-use, condition, management, maintenance, or repair thereof by Lessee or any of its agents, employees or invitees, including any failure of lessee or any of its
agents, employees or invitees to perform any obligations under this Lease or imposed by applicable law (other than arising out of Condemnation proceedings), (c) any Impositions that are the obligations of Lessee pursuant to the applicable
provisions of this Lease, (d) any failure on the part of Lessee to perform or comply with any of the terms of this Lease, and (e) the non-performance of any of the terms and provisions of any and all existing and future subleases of the
Leased Property to be performed by the landlord thereunder. 
 (b) Notwithstanding the existence of any insurance, and without regard to the
policy limits of any such insurance or self-insurance, but subject to Section 13.3 and Section 8.3, Lessor shall indemnify, save harmless and defend Lessee Indemnified Parties from and against all liabilities, obligations, claims, damages,
penalties, causes of action, costs and expenses imposed upon or incurred by or asserted against Lessee Indemnified Parties as a result of (a) the gross negligence or willful misconduct of Lessor arising in connection with this Lease or
(b) any failure on the part of Lessor to perform or comply with any of the terms of this Lease. Any amounts that become payable by an Indemnifying Party under this Section shall be paid within ten (10) days after liability therefor on the
part of the Indemnifying Party is determined by litigation or otherwise, and if not timely paid, shall bear a late charge (to the extent permitted by law) at the Overdue Rate from the date of such determination to the date of payment. An
Indemnifying Party, at its expense, shall contest, resist and defend any such claim, action or proceeding asserted or instituted against the Indemnified Party. The Indemnified Party, at its expense, shall be entitled to participate in any such
claim, action, or proceeding, and the Indemnifying Party may not compromise or otherwise dispose of the same without the consent of the Indemnified Party, which may not be unreasonably withheld or delayed. Nothing herein shall be construed as
indemnifying a Lessor Indemnified Party against its own (or Lessor’s) grossly negligent acts or omissions or willful misconduct. 
  

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 (c) Lessee’s or Lessor’s liability for a breach of the provisions of this Article shall survive
any termination of this Lease. 
 ARTICLE 19 
 REIT REQUIREMENTS AND RESTRICTIONS 
 19.1. Personal Property Limitation. Anything contained in
this Lease to the contrary notwithstanding, the average of the adjusted tax bases of the items of personal property that are leased to Lessee under this Lease at the beginning and at the end of any Fiscal Year shall not exceed fifteen percent
(15%) of the average of the aggregate adjusted tax bases of the Leased Property at the beginning and at the end of such Fiscal Year. This Section 19.1 is intended to ensure that the Rent qualifies as “rents from real property,”
within the meaning of Section 856(d) of the Code, or any similar or successor provisions thereto, and shall be interpreted in a manner consistent with such intent. 
 19.2. Sublease Rent Limitation. Anything contained in this Lease to the contrary notwithstanding, Lessee shall not sublet the Leased Property on any basis such that the rental to be paid by the sublessee
thereunder would be based, in whole or in part, on either (a) the income or profits derived by the business activities of the sublessee, or (b) any other formula such that any portion of the Rent would fail to qualify as “rents from
real property” within the meaning of Section 856(d) of the Code, or any similar or successor provision thereto. 
 19.3.
Sublease Tenant Limitation. Anything contained in this Lease to the contrary notwithstanding, Lessee shall not sublease the Leased Property to any Person in which Lessor owns, directly or indirectly, a ten percent (10%) or more interest,
within the meaning of Section 856(d)(2)(B) of the Code, or any similar or successor provisions thereto. 
 19.4. Lessee Ownership
Limitations. 
 (a) Anything contained in this Lease to the contrary notwithstanding, neither Lessee nor an Affiliate of Lessee shall
acquire, directly or indirectly, a ten percent (10%) or more interest in Lessor within the meaning of Section 856(d)(2)(B) of the Code, or any similar or successor provision thereto. 
 (b) Lessee shall not own, operate, manage or have any interest in any hotel or motel property in which Lessor or an Affiliate of Lessor does not have an
interest, pursuant to this Lease or another lease, agreement or arrangement with Lessor or an Affiliate of Lessor. Lessor agrees to notify Lessee promptly of the location of any hotel or motel property in which Lessor or an Affiliate of Lessor has
an interest. 
 19.5. Lessee Officer and Employee Limitation. If a Person serves as both (a) a director of Lessee (or any Person
who furnishes or renders services to the tenants of the Leased Property, or manages or operates the Leased Property) and (b) an officer (or employee) of the Lessor that Person shall not receive any compensation for serving as a director of
Lessee (or any Person who furnishes or renders services to the tenants of the Leased Property, or manages or operates the 

  

 52 

 
Leased Property). Furthermore, if a Person serves as both (a) a director of the Lessor and (b) an officer (or employee) of Lessee (or any Person
who furnishes or renders services to the tenants of the Leased Property, or manages or operates the Leased Property), that Person shall not receive any compensation for serving as a director of the Lessor. No Person, other than Justin G. Knight,
shall serve as an officer (or employee) of both Lessor and Lessee. 
 19.6. Payments to Affiliates of Lessee. During the Term, Lessee
shall not pay, or become obligated to pay, any fees to any Affiliate of Lessee in connection with the Hotel, other than fees that are subordinated to the payments that are required to be made to Lessor pursuant to this Lease. 
 ARTICLE 20 
 SUBLETTING AND
ASSIGNMENT 
 20.1. Subletting and Assignment. Subject to the provisions of Article 19 and Section 20.2 and any other express
conditions or limitations set forth herein, Lessee may, but only with the consent of Lessor (which shall not be unreasonably withheld or delayed), (a) assign this Lease or sublet all or any part of the Leased Property to an Affiliate of Lessee,
or (b) sublet any retail or restaurant portion of the Leased Improvements in the normal course of the Primary Intended Use; provided that any subletting to any party other than an Affiliate of Lessee shall not individually as to any one such
subletting, or in the aggregate, materially diminish the actual or potential Percentage Rent payable under this Lease. In the case of a subletting, the sublessee shall comply with the provisions of Section 20.2, and in the case of an
assignment, the assignee shall assume in writing and agree to keep and perform all of the terms of this Lease on the part of Lessee to be kept and performed and shall be, and become, jointly and severally liable with Lessee for the performance
thereof. Notwithstanding the above, Lessee may assign the Lease to an Affiliate without the consent of Lessor; provided that any such assignee assumes in writing and agrees to keep and perform all of the terms of the Lease on the part of Lessee to
be kept and performed and shall be and become jointly and severally liable with Lessee for the performance thereof. In case of either an assignment or subletting made during the Term, Lessee shall remain primarily liable, as principal rather than as
surety, for the prompt payment of the Rent and for the performance and observance of all of the covenants and conditions to be performed by Lessee hereunder. An original counterpart of each such sublease and assignment and assumption, duly executed
by Lessee and such sublessee or assignee, as the case may be, in form and substance satisfactory to Lessor, shall be delivered promptly to Lessor. 
 20.2. Attornment. Lessee shall insert in each sublease permitted under Section 20.1 provisions to the effect that (a) such sublease is subject and subordinate to all of the terms and provisions of this Lease and to the
rights of Lessor hereunder, (b) if this Lease terminates before the expiration of such sublease, the sublessee thereunder will, at Lessor’s option, attorn to Lessor and waive any right the sublessee may have to terminate the sublease or to
surrender possession thereunder as a result of the termination of this Lease, and (c) if the sublessee receives a Notice from Lessor or Lessor’s assignees, if any, stating that an uncured Event of Default exists under this Lease, the
sublessee shall thereafter be obligated to pay all rentals accruing under said sublease directly to the party giving such Notice, or as such party may direct. All rentals received from the sublessee by Lessor or Lessor’s assignees, if any, as
the case may be, shall be credited against the amounts owing by Lessee under this Lease. 
  

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 20.3. Conveyance by Lessor. Lessor may assign this Lease to any purchaser of the Leased Property.
If Lessor or any successor owner of the Leased Property conveys the Leased Property in accordance with the terms hereof other than as security for a debt, and the grantee or transferee of the Leased Property expressly assumes all obligations of
Lessor hereunder arising or accruing from and after the date of such conveyance or transfer, Lessor or such successor owner, as the case may be, shall thereupon be released from all future liabilities and obligations of Lessor under this Lease
arising or accruing from and after the date of such conveyance or other transfer as to the Leased Property and all such future liabilities and obligations shall thereupon be binding upon the new owner. 
 ARTICLE 21 
 QUIET ENJOYMENT;
RISK OF LOSS 
 21.1. Quiet Enjoyment. So long as Lessee pays all Rent as the same becomes due and complies with all of the terms
of this Lease and performs its obligations hereunder, in each case within the applicable grace periods, if any, Lessee shall peaceably and quietly have, hold and enjoy the Leased Property for the Term hereof, free of any claim or other action by
Lessor or anyone claiming by, through or under Lessor, but subject to all liens and encumbrances subject to which the Leased Property was conveyed to Lessor, to the extent not released in connection with the transactions contemplated by this Lease,
or hereafter consented to by Lessee or provided for herein. Notwithstanding the foregoing, Lessee shall have the right by separate and independent action to pursue any claim it may have against Lessor as a result of a breach by Lessor of the
covenant of quiet enjoyment contained in this Section. 
 21.2. Risk of Loss. During the Term, the risk of loss or of decrease in the
enjoyment and beneficial use of the Leased Property in consequence of the damage or destruction thereof by fire, the elements, casualties, thefts, riots, wars or otherwise, or in consequence of foreclosures, attachments, levies or executions (other
than those caused by Lessor and those claiming from, through or under Lessor) is assumed by Lessee, and, in the absence of gross negligence, willful misconduct or breach of this Lease by Lessor pursuant to Section 17.1, Lessor shall in no event
be answerable or accountable therefor, nor shall any of the events mentioned in this Section entitle Lessee to any abatement of Rent except as specifically provided in this Lease. 
 ARTICLE 22 
 LESSOR MORTGAGES; SUBORDINATION OF LEASE 
 22.1. Lessor May Grant Liens. Without the consent of Lessee, Lessor may, subject to the terms and conditions set forth below in this
Section 22.1, from time to time, directly or indirectly, create or otherwise cause to exist any lien, encumbrance or title retention agreement (“Encumbrance”) upon the Leased Property, or any portion thereof or interest therein,
whether to secure any borrowing or other means of financing or refinancing. Upon the request of Lessor, Lessee shall subordinate this Lease to the lien of a new mortgage on the Leased Property, on the condition that the proposed mortgagee executes a
non-disturbance agreement recognizing this Lease in accordance with the provisions of Section 22.2, and agreeing, for itself and its successors and assigns, to comply with the provisions of this Article 22. 
  

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 22.2. Subordination of Lease. This Lease and Lessee’s interest hereunder shall at all times
be subject and subordinate to the lien and security title of any deeds to secure debt, deeds of trust, mortgages, or other Encumbrances heretofore or hereafter granted by Lessor or which otherwise encumber or affect the Leased Property and to any
and all advances to be made thereunder and to all renewals, modifications, consolidations, replacements, substitutions, and extensions thereof (all of which are herein called the “Mortgage”); provided, however, that with respect to any
Mortgage hereafter granted, such subordination is conditioned upon delivery to Lessee of a non-disturbance agreement which provides that Lessee shall not be disturbed in its possession of the Leased Property hereunder following a foreclosure of such
Mortgage (or delivery of a deed-in-lieu-of-foreclosure) and that the holder of such Mortgage or the purchaser at a foreclosure sale (or grantee under such deed-in-lieu-of-foreclosure) shall perform all obligations of Lessor under this Lease. In
confirmation of such subordination, however, Lessee shall, at Lessor’s request, promptly execute, acknowledge and deliver any instrument which may be required to evidence subordination to any Mortgage and to the holder thereof. In the event of
Lessee’s failure to deliver such subordination and if the Mortgage does not change any term of the Lease, Lessor may, in addition to any other remedies for breach of covenant hereunder, execute, acknowledge, and deliver the instrument as the
agent or attorney-in-fact of Lessee, and Lessee hereby irrevocably constitutes Lessor its attorney-in-fact for such purpose, Lessee acknowledging that the appointment is coupled with an interest and is irrevocable. 
 ARTICLE 23 
 ESTOPPEL
CERTIFICATES; FINANCIAL STATEMENTS; INSPECTION RIGHTS 
 23.1. Estoppel Certificates; Financial Statements. 
 (a) At any time and from time to time upon not less than ten (10) days Notice by Lessor, Lessee will furnish to Lessor an Officer’s Certificate
certifying that this Lease is unmodified and in full force and effect (or that this Lease is in full force and effect as modified and setting forth the modifications), the date to which the Rent has been paid, whether to the knowledge of Lessee
there is any existing default or Event of Default exists thereunder by Lessor or Lessee, and such other information as may be reasonably requested by Lessor. Any such certificate furnished pursuant to this Section may be relied upon by Lessor, any
lender and any prospective purchaser of the Leased Property. 
 (b) Lessee will furnish the following statements to Lessor: 
 (i) with reasonable promptness, such information respecting the financial condition and affairs of Lessee including audited financial
statements prepared by the same certified independent accounting firm that prepares the returns for Lessor or such other accounting firm as may be approved by Lessor, as Lessor may request from time to time; and 
 (ii) the most recent Consolidated Financials of Lessee within forty-five (45) days after each quarter of any Fiscal Year (or, in the
case of the final quarter in any Fiscal Year, the most recent audited Consolidated Financials of Lessee within ninety (90) days); and 
  

 55 

 (iii) on or about the 20th day of each month, a detailed profit and loss statement for
the Leased Property for the preceding month, a balance sheet for the Leased Property as of the end of the preceding month, and a detailed accounting of revenues for the Leased Property for the preceding month, each in form acceptable to Lessor.

 Lessee will permit the inclusion of such statements in any filings required to be made by Lessor under the Securities Act of 1933 and the Securities
Exchange Act of 1934. 
 (c) At any time and from time to time upon not less than ten (10) days Notice by Lessee, Lessor will furnish to
Lessee or to any Person designated by Lessee an estoppel certificate certifying that this Lease is unmodified and in full force and effect (or that this Lease is in full force and effect as modified and setting forth the modifications), the date to
which Rent has been paid, whether to the knowledge of Lessor there is any existing default or Event of Default on Lessee’s part hereunder, and such other information as may be reasonably requested by Lessee. 
 (d) Lessee shall at all times be Solvent. Furthermore, as of the date of this Agreement, Lessee agrees to establish and maintain, in a form satisfactory
to Lessor, a funding commitment in an amount equal to $2,000,000 upon which Lessee may draw upon to pay to Lessor Base Rent, Percentage Rent and Additional Charges. Repayment of the funding commitment shall be subordinated to all payments of Base
Rent, Percentage Rent and additional charges under all Leases between Lessor and Lessee. 
 23.2. Lessor’s Right to Inspect.
Lessee shall permit Lessor and its authorized representatives as frequently as reasonably requested by Lessor to inspect the Leased Property and Lessee’s accounts and records pertaining thereto and make copies thereof, during usual business
hours upon reasonable advance Notice, subject only to any business confidentiality requirements reasonably requested by Lessee. 
 ARTICLE 24 
 APPRAISERS 
 24.1. Appraisers. If it becomes necessary to determine the Fair Market Value or Fair Market Rental of the Leased Property for any purpose of this Lease, the party required or permitted to give Notice of such
required determination shall include in the Notice the name of a Person selected to act as appraiser on its behalf. Within ten (10) days after Notice, Lessor (or Lessee, as the case may be) shall by Notice to Lessee (or Lessor, as the case may
be) appoint a second Person as appraiser on its behalf. The appraisers thus appointed, each of whom must be a member of the American Institute of Real Estate Appraisers (or any successor organization thereto) with at least five (5) years’
experience in the State appraising property similar to the Leased Property, shall, within forty-five (45) days after the date of the Notice appointing the first appraiser, proceed to appraise the Leased Property to determine the Fair Market
Value or Fair Market Rental thereof as of the relevant date (giving effect to the impact, if any, of inflation from the date of their decision to 

  

 56 

 
the relevant date); provided, however, that if only one appraiser shall have been so appointed, then the determination of such appraiser shall be final and
binding upon the parties. To the extent consistent with sound appraisal practice as then existing at the time of any such appraisal, such appraisal shall be made on a basis consistent with the basis on which the Leased Property was appraised for
purposes of determining its Fair Market Value at the time the Leased Property was acquired by Lessor. If two (2) appraisers are appointed and if the difference between the amounts so determined does not exceed five percent (5%) of the
lesser of such amounts, then the Fair Market Value or Fair Market Rental shall be an amount equal to fifty percent (50%) of the sum of the amounts so determined. If the difference between the amounts so determined exceeds five percent
(5%) of the lesser of such amounts, then such two appraisers shall have twenty (20) days to appoint a third appraiser. If no such appraiser shall have been appointed within such twenty (20) days or within ninety (90) days of the
original request for a determination of Fair Market Value or Fair Market Rental, whichever is earlier, either Lessor or Lessee may apply to any court having jurisdiction to have such appointment made by such court. Any appraiser appointed by the
original appraisers or by such court shall be instructed to determine the Fair Market Value or Fair Market Rental within forty-five (45) days after appointment of such appraiser. The determination of the appraiser which differs most in the
terms of dollar amount from the determinations of the other two appraisers shall be excluded, and fifty percent (50%) of the sum of the remaining two determinations shall be final and binding upon Lessor and Lessee as the Fair Market Value or
Fair Market Rental of the Leased Property, as the case may be. This provision for determining by appraisal shall be specifically enforceable to the extent such remedy is available under applicable law, and any determination hereunder shall be final
and binding upon the parties except as otherwise provided by applicable law. Lessor and Lessee shall each pay the fees and expenses of the appraiser appointed by it and each shall pay one-half of the fees and expenses of the third appraiser and
one-half of all other costs and expenses incurred in connection with each appraisal. 
 ARTICLE 25 
 ARBITRATION AND DISPUTE RESOLUTION PROCEDURES 
 25.1. Arbitration. Except as set forth in Section 25.2, in each case specified in this Lease in which it shall become necessary to resort to arbitration, such arbitration shall be determined as provided in this
Section 25.1. The party desiring such arbitration shall give Notice to that effect to the other party, and an arbitrator shall be selected by mutual agreement of the parties, or if they cannot agree within thirty (30) days of such notice,
by appointment made by the American Arbitration Association (“AAA”) from among the members of its panels who are qualified and who have experience in resolving matters of a nature similar to the matter to be resolved by arbitration.

 25.2. Alternative Arbitration. In each case specified in this Lease for a matter to be submitted to arbitration pursuant to the
provisions of this Section 25.2, Lessor and Lessee will agree upon a nationally recognized accounting firm with a hospitality division of which neither party nor their Affiliates of Lessor is a significant client to serve as arbitrator of such
dispute within fifteen (15) days after written demand for arbitration is received or sent by either party. In the event the parties fail to make such designation within such fifteen (15) day period, Lessor shall be entitled to designate
any nationally recognized accounting firm with a hospitality division of which Lessor or an Affiliate of Lessor is not a significant client to serve as arbitrator of such dispute within fifteen (15) days after the parties fail to timely make
such designation. In the event Lessor 

  

 57 

 
fails to make such designation within such fifteen (15) day period, Lessee shall be entitled to designate any nationally recognized accounting firm with
hospitality division of which Lessee or an Affiliate of Lessee is not a significant client to serve as arbitrator of such dispute within fifteen (15) days after the parties fail to timely make such designation. In the event no nationally
recognized accounting firm satisfying such qualifications is available and willing to serve as arbitrator, the arbitrator shall instead be administered as set forth in Section 25.1. 
 25.3. Arbitration Procedure. In any arbitration commenced pursuant to Sections 25.1 or 25.2, a single arbitrator shall be designated and shall
resolve the dispute. The arbitrator’s decision shall be binding on all parties, shall not be subject to further review or appeal except as otherwise allowed by applicable law and may be filed in and enforced by a court of competent
jurisdiction. Upon the failure of either party (the “non-complying party”) to comply with his decision, the arbitrator shall be empowered, at the request of the other party, to order such compliance by the non-complying party and to
supervise or arrange for the supervision of the non-complying party’s obligation to comply with the arbitrator’s decision, all at the expense of the non-complying party. To the maximum extent practicable, the arbitrator and the parties,
and the AAA if applicable, shall take any action necessary to insure that the arbitration shall be concluded within ninety (90) days of the filing of such dispute. The fees and expenses of the arbitrator shall be shared equally by Lessor and
Lessee except as otherwise specified above in this Section 25.3. Unless otherwise agreed in writing by the parties or required by the arbitrator or AAA, if applicable, arbitration proceedings hereunder shall be conducted in the State.
Notwithstanding formal rules of evidence, each party may submit such evidence as each party deems appropriate to support its position and the arbitrator shall have access to and right to examine all books and records of Lessee and Lessor regarding
the Hotel during the arbitration. 
 ARTICLE 26 
 NOTICES 
 26.1. Notices. All notices, demands, requests, consents approvals and other
communications (“Notice” or “Notices”) hereunder shall be in writing and hand-delivered, sent by FedEx or other nationally recognized overnight courier service, or mailed (by registered or certified mail, return receipt requested
and postage prepaid), if to Lessor at 814 East Main Street, Richmond, Virginia 23219, Attn: Krissy Gathright and if to Lessee at 814 East Main Street, Richmond, Virginia 23219, Attn: Krissy Gathright or to such other address or addresses as either
party may hereafter designate. Personally delivered Notice shall be effective upon receipt, and Notice given by overnight courier service or by mail shall be complete at the time of deposit with the courier service or in the U.S. Mail system,
respectively, but any prescribed period of Notice and any right or duty to do any act or make any response within any prescribed period or on a date certain after the service of such Notice given by overnight courier service shall be extended one
(1) day and by mail shall be extended five (5) days. 
 ARTICLE 27 
 MISCELLANEOUS 
 27.1. No Waiver.
No failure by Lessor or Lessee to insist upon the strict performance of any term hereof or to exercise any right, power or remedy consequent upon a breach thereof, and 

  

 58 

 
no acceptance of full or partial payment of Rent during the continuance of any such breach, shall constitute a waiver of any such breach or of any such term.
To the extent permitted by law, no waiver of any breach shall affect or alter this Lease, which shall continue in full force and effect with respect to any other then existing or subsequent breach. 
 27.2. Remedies Cumulative. To the extent permitted by law and unless otherwise provided herein to the contrary, each legal, equitable or
contractual right, power and remedy of Lessor or Lessee now or hereafter provided either in this Lease or by statute or otherwise shall be cumulative and concurrent and shall be in addition to every other right, power and remedy and the exercise or
beginning of the exercise by Lessor or Lessee of any one or more of such rights, powers and remedies shall not preclude the simultaneous or subsequent exercise by Lessor or Lessee of any or all of such other rights, powers and remedies. 

27.3. Waiver of Trial by Jury. LESSOR AND LESSEE EACH WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO A TRIAL BY JURY IN
THE EVENT OF A PROCEEDING WITH RESPECT TO THIS LEASE, INCLUDING, WITHOUT LIMITATION, SUMMARY PROCEEDINGS TO ENFORCE THE REMEDIES SET FORTH IN ARTICLE 16. 
 27.4. Acceptance of Surrender. No surrender to Lessor of this Lease or of the Leased Property or any part thereof, or of any interest therein, shall be valid or effective unless agreed to and accepted in
writing by Lessor and no act by Lessor or any representative or agent of Lessor, other than such a written acceptance by Lessor, shall constitute an acceptance of any such surrender. 
 27.5. No Merger of Title. There shall be no merger of this Lease or of the leasehold estate created hereby by reason of the fact that the same
Person may acquire, own or hold, directly or indirectly: (a) this Lease or the leasehold estate created hereby or any interest in this Lease or such leasehold estate and (b) the fee estate in the Leased Property. 
 27.6. Waiver of Presentment, Etc. Lessee waives all presentments, demands for payment and for performance, notices of nonperformance, protests,
notices of protest, notices of dishonor, and notices of acceptance and waives all notices of the existence, creation, or incurring of new or additional obligations, except as expressly granted herein. 
 27.7. Action for Damages. Except as otherwise expressly provided herein, in any suit or other claim brought by either party seeking damages
against the other party for breach of its obligations under this Lease, the party against whom such claim is made shall be liable to the other party only for actual damages and not for consequential, punitive or exemplary damages. 
 27.8. Lease Assumption in Bankruptcy Proceeding. If an Event of Default occurs and Lessee has filed or has had filed against it a petition in
bankruptcy or for reorganization or other relief pursuant to the federal bankruptcy code, Lessee shall promptly move the court presiding over the proceeding to assume this Lease pursuant to 11 U.S.C. §365, without seeking an extension of the
time to file said motion. 
  

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 27.9. Enforceability. Anything contained in this Lease to the contrary notwithstanding, all claims
against, and liabilities of, Lessee or Lessor arising prior to any date of termination of this Lease shall survive such termination. If any term or provision of this Lease or any application thereof is invalid or unenforceable, the remainder of this
Lease and any other application of such term or provisions shall not be affected thereby. If any late charges or any interest rate provided for in any provision of this Lease are based upon a rate in excess of the maximum rate permitted by
applicable law, the parties agree that such charges shall be fixed at the maximum permissible rate. Neither this Lease nor any provision hereof may be changed, waived, discharged or terminated except by a written instrument in recordable form signed
by Lessor and Lessee. All the terms and provisions of this Lease shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. The headings in this Lease are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof. This Lease shall be governed by and construed in accordance with the laws of the State, but not including its conflicts of laws rules. 
 27.10. Memorandum of Lease. Lessor and Lessee shall promptly, upon the request of either party, enter into a short form memorandum of this Lease,
in form suitable for recording under the laws of the State in which reference to this Lease, and all options contained herein, shall be made. Lessee shall pay all costs and expenses of recording such memorandum of this Lease. 
 [SIGNATURES ON NEXT PAGE] 
  

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

			
	“LESSOR”
	
	APPLE EIGHT HOSPITALITY OWNERSHIP, INC., a Virginia corporation
		
	By:	 	 /s/ Justin Knight

	Name:	 	Justin G. Knight
	Title:	 	President
	
	“LESSEE”
	
	APPLE EIGHT HOSPITALITY MANAGEMENT, INC., a Virginia corporation
		
	By:	 	 /s/ Justin Knight

	Name:	 	Justin G. Knight
	Title:	 	President

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

  

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

  

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

  

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

  

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

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

 EXHIBIT B 
 SPACE LEASES 
 None 

 SCHEDULE 2.1 
 COMMENCEMENT DATE 
 November 9, 2007 

 SCHEDULE 3.1(a) 
 BASE RENT 
 Prorated 2007: $236,900 
 Full Year 2007: $1,631,484 

 SCHEDULE 3.1(b) 
 SUITE REVENUE BREAKPOINT 
  

							
	 	  	Prorated
07	  	2007
	 Yearly Breakpoint
	  	$	272,275	  	$	1,875,098EXHIBIT 10.19

 Exhibit 10.19 
 GREENSBORO, NC (SHS) 
 MANAGEMENT AGREEMENT 
 by and between 
 NEWPORT GREENSBORO MANAGEMENT, LLC 
 as “MANAGER” 
 and 
 APPLE EIGHT HOSPITALITY MANAGEMENT, INC. 
 as “OWNER” 
 Dated as of November 9, 2007 
  

 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	  	3
				
		  	  1.04.	  	Owner’s Right to Inspect	  	4
				
		  	  1.05.	  	Regular Meetings	  	4
				
		  	  1.06.	  	System Standards	  	4
				
		  	  1.07.	  	Limitations on Manager’s Authority	  	4
				
		  	  1.08.	  	Representations and Warranties of Manager	  	5
			
	ARTICLE II	  	TERM	  	5
				
		  	  2.01.	  	Term	  	5
				
		  	  2.02.	  	Performance Termination	  	5
			
	ARTICLE III	  	COMPENSATION OF MANAGER	  	6
				
		  	  3.01.	  	Management Fees	  	6
				
		  	  3.02.	  	Operating Profit	  	6
				
		  	  3.03.	  	Reimbursables	  	7
				
		  	  3.04.	  	Termination Fee	  	7
			
	ARTICLE IV	  	ACCOUNTING, BOOKKEEPING AND BANK ACCOUNTS	  	8
				
		  	  4.01.	  	Accounting, Distributions and Annual Reconciliation	  	8
				
		  	  4.02.	  	Books and Records	  	9
				
		  	  4.03.	  	Accounts, Expenditures	  	10
				
		  	  4.04.	  	Annual Operating Projection	  	10
				
		  	  4.05.	  	Working Capital	  	11
				
		  	  4.06.	  	Fixed Asset Supplies	  	11
				
		  	  4.07.	  	Real Estate and Personal Property Taxes	  	11
				
		  	  4.08.	  	Sarbanes-Oxley Certification	  	12
			
	ARTICLE V	  	REPAIRS, MAINTENANCE AND REPLACEMENTS	  	13
				
		  	  5.01.	  	Repairs and Maintenance to be Paid from Gross Revenues	  	13
				
		  	  5.02.	  	Repairs, Maintenance and Equipment Replacements to be Paid from Reserve	  	14

  

 i 

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

  

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

  

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

  

 iii 

 MANAGEMENT AGREEMENT 
 THIS MANAGEMENT AGREEMENT (“Agreement”) is executed as of the 9th day of November, 2007 (“Effective Date”), by APPLE EIGHT HOSPITALITY MANAGEMENT, INC., a Virginia corporation
(“Owner”), with a mailing address at c/o Apple REIT Companies, 814 E. Main Street, Richmond, Virginia 23219, Attention: Krissy Gathright, and NEWPORT GREENSBORO MANAGEMENT, LLC, a Virginia limited liability company
(“Manager”), with a mailing address at c/o 4290 New Town Avenue, Williamsburg, Virginia 23188. 
 A. The party
identified as the “Landlord” in Schedule 1 attached hereto (“Landlord”) is the owner of the hotel identified in Schedule 1, as more particularly described in the definition of
“Hotel” in Section 11.01 hereof. 
 B. Landlord and Owner have entered into that certain Hotel Lease Agreement
dated as of the Effective Date (the “Hotel Lease”) pursuant to which Landlord leases the Hotel to Owner. 
 C. All
capitalized terms used in this Agreement shall have the meaning set forth in Section 11.01 hereof. 
 D. Owner desires to engage Manager
to manage and operate the Hotel, and Manager desires to accept such engagement, upon the terms and conditions set forth in this Agreement. 
 NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Owner and Manager agree as follows: 
 ARTICLE I 
 APPOINTMENT OF MANAGER

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

A. Manager shall manage the Hotel, including, without limitation, performance of the following functions, in accordance with Prudent Industry
Practices, the provisions of this Agreement and all standards imposed by the Franchise Agreement (provided that in all cases, except as otherwise specifically set forth in this Agreement, the costs and expenses of performing such functions shall be
Deductions): 
 1. Recruit, employ, relocate, manage, supervise, direct and discharge all employees at the Hotel and maintain adequate staff,
consistent with Prudent Industry Practices and the Annual Operating Projection, to carry out its duties under this Agreement. 

 2. Establish prices, rates and charges for services provided in the Hotel, including Guest Room rates,
subject to Owner’s prior approval or as set forth in the Annual Operating Projection. 
 3. Establish and revise, as necessary,
administrative policies and procedures, including employment policies and procedures and policies and procedures for the control of revenue and expenditures, for the purchasing of supplies and services, for the control of credit and for the
scheduling of maintenance, and verify that the foregoing procedures are operating in a sound manner. 
 4. Make payments on accounts payable
and collect accounts receivable. 
 5. Procure (for Owner) all Inventories and replace Fixed Asset Supplies and otherwise incur customary and
reasonable expenses in the operation of the Hotel, subject to the approved Annual Operating Projection. 
 6. Prepare and deliver Annual
Operating Projections, Accounting Period Statements, Annual Operating Statements, and such other information as is required by this Agreement. 
 7. Plan, execute and supervise repairs and maintenance at the Hotel. 
 8. Obtain the insurance required to be obtained by Manager
pursuant to Article VI of this Agreement , subject to the provisions of Section 6.05. 
 9. Obtain and keep in full force and effect,
either in its own name or in Owner’s or Owner’s affiliate’s name, as may be required by applicable law, any and all licenses (including, without limitation, liquor licenses which shall be maintained in the name of Manager to the
extent permitted by law) and permits to the extent same is within the control of Manager (or, if same is not within the control of Manager, Manager shall use reasonable diligence and efforts to obtain and keep same in full force and effect).

 10. Execute subordination agreements, estoppel certificates and other documentation required by any purchaser or mortgagee and reasonably
cooperate (provided that Manager shall not be obligated to enter into any amendments of this Agreement) with Owner or Landlord in any attempt(s) by Owner or Landlord to effectuate a Sale of the Hotel or to obtain a Mortgage. 
 11. At the direction and with the concurrence of Owner, arrange for and supervise public relations and advertising and prepare marketing plans.

 12. Negotiate and enter into, on behalf of Owner, service contracts and other third party agreements required in the ordinary course of
operating the Hotel, provided that each such contract or agreement that requires expenditures in excess of $5,000 or is not terminable without penalty or fee must first be approved in advance by Owner. 
  

 2 

 13. Manage and operate the Hotel at all times in compliance with the Franchise Agreement, including
(without limitation) the Manual and the System Standards (as such terms are defined in the Franchise Agreement). 
 B. The operation of the
Hotel shall be under the exclusive supervision and control of Manager, except as otherwise specifically provided in this Agreement, and Manager shall be responsible for the proper and efficient operation of the Hotel. In fulfilling its obligations
under this Agreement, Manager will act as a reasonable, prudent operator of the Hotel, having regard for the status of the Hotel, operating the Hotel in accordance with Prudent Industry Practices and at all times maintaining and complying with all
standards imposed by the Franchise Agreement, and subject to the foregoing and all other terms and conditions of this Agreement, shall have discretion in the following: charges, terms and conditions for Guest Rooms and commercial space; credit
policies and services provided by the Hotel; food and beverage services; employment policies; granting of leases, subleases, licenses and concessions for shops and businesses within the Hotel, provided that the term of any such lease, sublease,
license or concession shall not exceed the lesser of one (1) year or the Term without the prior written approval of Owner; receipt, holding and disbursement of funds; maintenance of bank accounts; procurement of Inventories, supplies and
services; promotion and publicity; payment of costs and expenses as are specifically provided for in this Agreement or are otherwise reasonably necessary for the proper and efficient operation of the Hotel; and, generally, all activities necessary
for operation of the Hotel. With respect to all Material Management Decisions, Manager shall consult with Owner in advance of making any such decisions. The term “Material Management Decisions” means a decision to be made in
connection with any expenditure of more than $10,000 for each item or $50,000 in the aggregate for all such items in any Fiscal Year if such expenditure is not included in the approved Annual Operating Projection for such Fiscal Year or if such
expenditure would result in an increase in the overall Annual Operating Projection. 
 C. Manager shall comply with and abide by all
applicable Legal Requirements pertaining to its operation of the Hotel. Landlord or Owner shall have the right, but not the obligation, in its reasonable discretion, to contest or oppose, by appropriate proceedings, any such Legal Requirements. The
reasonable expenses of any such contest of a Legal Requirement shall be paid from Gross Revenues as Deductions. Owner or Landlord, as applicable, shall indemnify and hold Manager harmless from any loss, claim, fees or expenses (including reasonable
attorneys’ fees) arising from the noncompliance with any Legal Requirement that Owner or Landlord chooses to contest or as to which Owner does not fund the cost of compliance. 
 1.03. Employees. 
 All personnel
employed at the Hotel shall at all times be the employees of Manager and not the employees of Owner. Manager shall have reasonable discretion with respect to all personnel employed at the Hotel, including, without limitation, decisions regarding
hiring, promoting, transferring, compensating, supervising, terminating, directing and training all 

  

 3 

 
employees at the Hotel, and, generally, establishing and maintaining all policies relating to employment; provided, however, that (i) Owner shall have
the right to approve the hiring or termination of the persons who occupy the position of General Manager for the Hotel and (ii) Manager shall not negotiate or enter into any collective bargaining or other labor agreement with employees or with
any organization representing or claiming to represent employees without Owner’s prior consent. No person shall be given gratuitous accommodations or services without prior joint approval of Owner and Manager except in accordance with policies
agreed upon by Owner and Manager. Owner shall not pay for the relocation costs of any employees except for the cost of relocating the General Manager; provided, however, that (i) the relocation costs for the General Manager shall be subject to
Owner’s prior approval, which approval shall not be unreasonably withheld or delayed, and (ii) Manager shall reimburse Owner for the costs (including relocation costs) of hiring and training General Managers who are employed at the Hotel
for less than one (1) year and are transferred or relocated except to a hotel owned by Owner or an Affiliate of Owner. As is consistent with Prudent Industry Practices, Manager shall be responsible and liable for all acts or omissions of the
personnel employed at the Hotel and all persons managing such employees. 
 1.04. Owner’s Right to Inspect. 
 Owner, its representatives, employees, agents, Affiliates and Mortgagees shall have access to the Hotel at any and all reasonable times for the purpose of
inspection, exercising any of its rights under this Agreement or showing the Hotel to prospective purchasers, tenants or Mortgagees and at any time in case of an emergency. 
 1.05. Regular Meetings. 
 At
Owner’s request, Owner and Manager shall have meetings at the Hotel and at mutually convenient times. Manager shall be represented at such meetings by the General Manager of the Hotel and such other personnel as the Manager and/or Owner may
deem appropriate. The purpose of the meetings shall be, inter alia, to discuss the performance of the Hotel and other related issues, including any variations from the Annual Operating Projection for the preceding quarter. 
 1.06. System Standards. 
 Subject to
the availability of adequate funds, Manager shall take such actions consistent with this Agreement as are necessary for the Hotel to comply with the System Standards, and Manager shall operate the Hotel so that the Hotel will at all times comply
with System Standards. 
 1.07. Limitations on Manager’s Authority. 
 Manager shall not, without Owner’s prior written approval, enter into any FF&E Lease if (i) the fair market value of the FF&E subject to
such FF&E Lease at the time of entering into such FF&E Lease exceeds Ten Thousand Dollars ($10,000); (ii) the fair market value of the FF&E subject to all FF&E Leases at the time of entering into such FF&E Lease exceeds
Twenty-five Thousand Dollars ($25,000) in the aggregate; (iii) the FF&E subject to such FF&E Lease is FF&E that is not, consistent with Prudent Industry Practices, customarily leased; (iv) such FF&E 

  

 4 

 
Lease is with an Affiliate of Manager or is on payment terms (including the amounts and schedule of payments) that would be materially more favorable to the
lessor thereof than payment terms customary under Prudent Industry Practices for leases of similar FF&E; or (v) such FF&E Lease is not terminable by Owner upon thirty (30) days’ notice. 
 1.08. Representations and Warranties of Manager. Manager hereby represents and warrants to Owner as follows: 
 A. Authority; No Conflicts. Manager is a limited liability company duly formed, validly existing and in good standing in the state identified in
Schedule 1. Manager has obtained all necessary consents to enter into and perform this Agreement and is fully authorized to enter into and perform its obligations under this Agreement. No consent or approval of any person, entity or
governmental authority is required for the execution, delivery or performance by Manager of this Agreement, and this Agreement is hereby binding and enforceable against Manager. Neither the execution nor the performance of, or compliance with, this
Agreement by Manager has resulted, or will result, in any violation of, or default under, or acceleration of, any obligation under any existing corporate charter, certificate of incorporation, bylaw, articles of organization, limited liability
company agreement or regulations, partnership agreement or other organizational documents of Manager and under any, mortgage indenture, lien agreement, promissory note, contract, or permit, or any judgment, decree, order, restrictive covenant,
statute, rule or regulation, applicable to Manager or, to the best of Manager’s knowledge, to the Hotel. 
 B. Bankruptcy.
Neither Manager nor any of its Affiliates, is insolvent or the subject of any bankruptcy proceeding, receivership proceeding or other insolvency, dissolution, reorganization or similar proceeding. 
 ARTICLE II 
 TERM 
 2.01. Term. 
 The
“Term” of this Agreement shall begin on the Effective Date and shall continue until the expiration date identified in Schedule 1. The Term will be automatically renewed for up to two (2) one-year periods unless
either party provides notice not less than one hundred twenty (120) days prior to the expiration of the Term or the initial renewal Term, as the case may be, in which case this Agreement shall terminate as of the last day of the Term or the
initial renewal term, as applicable. Notwithstanding the foregoing, Manager or Owner shall have the option to terminate this Agreement at any time from and after the date that is one hundred eighty (180) days prior to the expiration of the
initial Term, with or without cause, by giving the other party not less than one hundred eighty (180) days prior written notice of its election to terminate. 
 2.02. Performance Termination. 
 A. Owner shall have the option to terminate this Agreement following
any Performance Termination Period with respect to which the following occurs: 
 1. The Operating Profit for the Performance Termination
Period is less than the Performance Termination Threshold; or 
  

 5 

 2. The Revenue Index of the Hotel during the Performance Termination Period is less than the Revenue
Index Threshold for such Performance Termination Period. 
 Owner shall exercise such
option to terminate by serving written notice thereof on Manager no later than sixty (60) days after Owner’s receipt of the last Accounting Period Statement for Performance Termination Period, and this Agreement shall terminate as of the
end of the second (2nd) full Accounting Period following the date on which Manager receives the above-described notice from Owner. Notwithstanding
anything contained herein to the contrary, Manager at its option may elect to void such Termination by so notifying Owner within such sixty (60) day period; provided, however, that the amount that was necessary to have achieved the Performance
Termination Threshold or Revenue Index Threshold, as applicable (the “Deficit Amount”) shall be made up to Owner by either (i) Manager’s paying the Deficit Amount to Owner within ten (10) days after such 60-day period
(the “Cure Payment”) or (ii) offsetting the Deficit Amount against the Base Management Fees, the Incentive Management Fees and/or other amounts or reimbursements payable to Manager under this Agreement, as Owner may
direct. 
 B. Owner’s failure to exercise its right to terminate this Agreement pursuant to this Section 2.02 shall not be
deemed an estoppel or waiver of Owner’s right to terminate this Agreement with respect to any subsequent event or circumstance that could give Owner the right to terminate hereunder. 
 ARTICLE III 
 COMPENSATION OF MANAGER 
 3.01. Management Fees. 
 In
consideration of services to be performed during the Term, Manager shall be paid the sum of the following as its management fees: 
 A. the
Base Management Fee, which shall be retained by Manager from Gross Revenues except as otherwise provided in this Agreement; plus 
 B. the
Incentive Management Fee but only to the extent of available Operating Profit after payment of Owner’s Priority as provided in Section 3.02 below. 
 3.02. Operating Profit. 
 A. Operating Profit, to the extent available, shall be distributed to Owner
and to Manager in the following order of priority, except as otherwise provided in this Agreement: 
 1. An amount up to the maximum amount of
Owner’s Priority shall be paid to Owner; 
 2. The Incentive Management Fee shall be paid to Manager; and 
  

 6 

 3. Any remaining balance of Operating Profit shall be paid to Owner. 
 Owner’s Priority shall not be cumulative from one Fiscal Year to the next, and to the extent the maximum amount of Owner’s Priority is unpaid
in any Fiscal Year, such unpaid amount shall not accrue and shall not be payable in any subsequent Fiscal Year. Notwithstanding anything in this Agreement to the contrary, Manager acknowledges and agrees that Incentive Management Fees are only
payable (i) annually within thirty (30) days after Owner’s receipt and acceptance of the Annual Operating Statement, (ii) to the extent of available Operating Profit after payment in full of Owner’s Priority and
(iii) in no event shall Incentive Management Fees accrue or be deemed to accrue. 
 B. To the extent of available Operating Profit with
respect to each Accounting Period, Manager shall distribute a prorated portion of the Owner’s Priority to Owner for each such Accounting Period in accordance with Section 4.01. Any Incentive Management Fee payable to Manager will be
payable within thirty (30) days after Owner’s receipt and acceptance of the Annual Operating Statement. 
 3.03.
Reimbursables. 
 Although Manager shall not be required to advance its own funds for any purpose under this Agreement, Manager shall,
nonetheless, be reimbursed from Gross Revenues or by Owner for all reasonable amounts advanced by Manager, its employees, or agents, including, but not limited to, costs paid to third parties for property specific data processing, third party
payroll processing, costs incurred in complying with the requirements of Section 4.08 hereof, travel and out-of-pocket expenses, such as postage, facsimile, express courier, and long distance telephone expenses incurred in the performance of
Manager’s duties and obligations hereunder. Such expenses shall be set forth in the Annual Operating Projection. The provisions of this Section 3.03 shall survive Termination. 
 3.04. Termination Fee. 
 A. If this
Agreement is terminated by Owner for any reason prior to the expiration of the Term (including, but not limited to, a termination by Owner incident to a Sale of the Hotel as provided in Section 9.02 below), other than (i) a performance
termination as provided for in Section 2.02 above or (ii) in the case of an Event of Default by Manager or (iii) a termination due to an Operating Loss or (iv) termination as provided in Section 4.08 or (v) a
termination permitted under Article VII, Owner agrees to pay Manager a “Termination Fee,” as liquidated damages, and not as a penalty, equal to the sum obtained by multiplying: (1) one-twelfth (1/12) of the annual Base Management
Fee in the amount called for in the current Annual Operating Projection (but in no event less than the Base Management Fee for the preceding full Fiscal Year) times (2) the number of months remaining in the Term. Nothing in this paragraph is
intended to imply that Owner has any right to terminate this Agreement except as is expressly set forth elsewhere herein. 
 B. The parties
recognize that if this Agreement is terminated under circumstances that would entitle Manager to a Termination Fee in accordance with (A) above, Manager would suffer an economic loss by virtue of the loss of management fees that would otherwise
have been 

  

 7 

 
earned under this Agreement. Because such fees vary in amount depending upon the Gross Revenues of the Hotel and, accordingly, would be extremely difficult
and/or impractical to ascertain with certainty, the parties agree that the Termination Fee constitutes a reasonable estimate of such economic loss and is appropriately delineated as liquidated damages and not as a penalty. 
 C. Notwithstanding the foregoing, if in the event of a termination for which a Termination Fee would otherwise be due, Owner may, in its sole and
absolute discretion, avoid payment of such Termination Fee by, within sixty (60) days of such termination, by naming Manager as manager for another hotel not already managed by Manager, provided that such substitute hotel is reasonably
comparable to the Hotel in size, number of rooms, quality of franchise, strength of geographic market, and gross revenue. If Manager is so appointed as manager of a substitute hotel, such management shall be pursuant to the terms and conditions of
this Agreement. 
 D. The provisions of this Section 3.04 shall survive Termination. 
 ARTICLE IV 
 ACCOUNTING, BOOKKEEPING
AND BANK ACCOUNTS 
 4.01. Accounting, Distributions and Annual Reconciliation. 
 A. Within fifteen (15) days after the close of each Accounting Period, Manager shall deliver an interim accounting (the “Accounting Period
Statement”) to Owner, prepared in accordance with the Uniform System of Accounts, showing Gross Revenues, Deductions, Operating Profit and applications and distributions thereof for the preceding Accounting Period and any other
information reasonably requested by Owner. Manager shall transfer to Owner, with each Accounting Period Statement, any interim amounts due Owner, subject to Working Capital needs mutually agreed upon by Owner and Manager, and shall retain any
interim amounts payable to Manager pursuant to the terms of this Agreement. 
 B. Calculations and payments of the Incentive Management Fee
and the Base Management Fee made with respect to each Accounting Period shall be accounted for cumulatively within a Fiscal Year, but shall not be cumulative from one Fiscal Year to the next. Within each SEC Filing Period, Manager shall deliver to
Owner (1) a statement (the “Annual Operating Statement”) in reasonable detail summarizing the operations of the Hotel for the immediately preceding Fiscal Year and a certificate of Manager’s chief accounting officer
(or comparable employee) certifying that, to the best of his or her knowledge, such Annual Operating Statement is true and correct and (2) a statement (the “Quarterly Operating Statement”) in reasonable detail
summarizing the operations of the Hotel for the immediately preceding calendar quarter and a certificate of Manager’s chief accounting officer (or comparable employee) certifying that, to the best of his or her knowledge, such Quarterly
Operating Statement is true and correct. The parties shall, within five (5) Business Days after Owner’s receipt of such Annual Operating Statement, make any adjustments, by cash payment, in the amounts paid or retained for such Fiscal Year
as are needed because of the final figures set forth in such Annual Operating Statement. Such Annual Operating Statement shall be controlling over the preceding Accounting Period Statements. 
  

 8 

 C. To the extent there is an Operating Loss for any Accounting Period, unless such loss was due to a
force majeure event, no Base Management Fee or Incentive Management Fee shall be paid to or retained from Gross Revenues by Manager. Any Base Management Fee that would have been payable to Manager had there been an Operating Profit for such
Accounting Period shall not accrue and shall not be payable to Manager. In no event shall Incentive Management Fees accrue, nor shall any Incentive Management Fee be payable to Manager in respect of any Accounting Period (i) as to which there
is an Operating Loss or (ii) as to which accrued Base Management Fees are payable to Manager. 
 To the extent there is an Operating
Loss for any Accounting Period, additional funds in the amount of any such Operating Loss (other than the amount of any Base Management Fee) shall be provided by Owner within thirty (30) days after Manager has delivered written notice thereof
to Owner. If Owner does not fund such Operating Loss within the thirty (30) day time period, Manager shall have the right (without affecting Manager’s other remedies under this Agreement) to withdraw an amount to cover such Operating Loss
from future distributions of funds otherwise due to Owner. In the event an Operating Loss occurs in respect of a Fiscal Year, either Owner or Manager may elect to terminate this Agreement. In no event shall Manager be obligated to invest its own
funds to cover any Operating Loss. 
 4.02. Books and Records. 
 Books of control and account pertaining to operations at the Hotel shall be kept on the accrual basis and in all material respects in accordance with
GAAP. Owner may at reasonable intervals and upon giving reasonable advance notice examine such records during Manager’s normal business hours. If Owner desires to audit, examine or review the Annual Operating Statement, Owner shall notify
Manager in writing within sixty (60) days after receipt of such Annual Operating Statement of its intention to audit and begin such audit no sooner than ten (10) days after Manager’s receipt of such notice. Owner shall use reasonable
efforts to complete such audit within one hundred twenty (120) days after commencement thereof. If Owner does not make such an audit, then such Annual Operating Statement shall be deemed to be conclusively accepted by Owner as being correct,
except in the event of manifest error or fraud, misrepresentation, misconduct or negligence by Manager or its agents, employees, representatives or contractors or other third parties. If any audit by an independent certified professional accountant
retained by Owner discloses an understatement of any amounts due Owner, Manager shall promptly pay Owner such amounts found to be due, plus interest thereon at the Prime Rate plus one percent (1%) per annum from the date such amounts should
originally have been paid. If any audit discloses that Manager has not received any amounts due it, Owner shall pay Manager such amounts. The cost of the audit shall be paid by Owner and be a Deduction; provided, however, Manager shall pay for such
cost if such audit discloses an 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. 
  

 9 

 4.03. Accounts, Expenditures. 
 A. All funds derived from operation of the Hotel shall be deposited by Manager in Owner’s bank accounts (the “Operating
Accounts”) established by Manager in a bank or banks designated by Manager with the concurrence of Owner. Withdrawals by Manager from said Operating Accounts shall be made solely by the General Manager or the Assistant General Manager
of the Hotel, a senior officer of Manager or such other representatives of Manager whose signatures have been authorized by Manager with the concurrence of Owner. Reasonable petty cash funds shall be maintained at the Hotel. 
 B. Except as otherwise provided in this Agreement, all payments made by Manager hereunder shall be made from the Operating Accounts, petty cash funds, or
from the Reserve (in accordance with Section 5.02). Manager shall not be required to make any advance or payment with respect to the Hotel except out of such funds, and Manager shall not be obligated to incur any liability or obligation with
respect to the Hotel unless resulting from acts or omissions of Manager that are in violation of or inconsistent with this Agreement or from Manager’s negligence or misconduct (each, “Manager’s Liability” and,
collectively, “Manager’s Liabilities”). 
 C. Debts and liabilities (other than Manager’s Liabilities)
incurred by Manager as a result of its operation and management of the Hotel pursuant to the terms hereof, whether asserted before or after Termination, will be paid by Owner to the extent funds are not available for that purpose from Gross
Revenues, and Owner shall indemnify, defend and hold Manager harmless from and against all loss, costs, liability, and damage (including, without limitation, reasonable attorneys’ fees and expenses) arising from Owner’s failure to pay or
perform such debts and liabilities. Manager shall pay, indemnify, defend and hold Owner harmless from and against all Manager’s Liabilities and all loss, costs, liability and damage (including, without limitation, reasonable attorneys’
fees and expenses) arising from Manager’s failure to pay or perform Manager’s Liabilities. The provisions of this Section 4.03.C shall survive Termination. 
 4.04. Annual Operating Projection. 
 Manager shall deliver to Owner for its review, at least
forty-five (45) days prior to the beginning of each Fiscal Year after the first Fiscal Year following the Effective Date, a preliminary draft of the business plan (including a proposed budget) and a projection of the estimated Gross Revenues,
departmental profits, Deductions, and Operating Profit for the forthcoming Fiscal Year for the Hotel (the “Annual Operating Projection”) for approval by Owner. Manager will consider in good faith suggestions made by Owner
with respect to the Annual Operating Projection and make modifications thereto that are agreed upon by Owner and Manager. In the case of the Fiscal Year beginning on the Effective Date, Manager and Owner 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 

  

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to which it relates, the Manager shall be entitled to operate the Hotel in accordance with this Agreement with the maximum approved amount of expenditures to
be equal to (i) the aggregate of all items in the proposed budget which are not disputed by Owner, plus (ii) the sum of the actual expenditures for the items in dispute in the previous Fiscal Year increased by the increase (if any) in the
CPI on January 1 of the year in question over the CPI on January 1 of the previous year. 
 4.05. Working Capital.

 Owner, as of the Effective Date, shall establish a level of Working Capital funds, which shall be held in the Operating Accounts, that is
reasonably believed to be reasonably sufficient for the operations of the Hotel, subject at all times to seasonal differences and changes in circumstances after the Effective Date. Manager may from time to time during the Term request that Owner
advance any additional funds necessary to maintain Working Capital at levels reasonably determined by Manager (with the concurrence of Owner) to be necessary to satisfy the needs of the Hotel. In the event Owner and Manager are unable to agree upon
the need for and/or amount of additional Working Capital within thirty (30) days after Owner’s receipt of such written notice from Manager, Manager may increase the amount based on the CPI formula in Paragraph 4.04 above. If Owner and
Manager agree upon the need for and amount of additional Working Capital and thereafter Owner does not so fund additional Working Capital within ten (10) Business Days after Owner’s receipt of a written request from Manager to fund such
additional Working Capital, Manager shall have the right to withdraw an amount equal to the funds requested by Manager for additional Working Capital from future distribution of funds otherwise due to Owner. All funds so advanced for Working Capital
shall be utilized by Manager for the purposes of this Agreement. Upon Termination, Manager shall immediately return the outstanding balance of the Working Capital to Owner. 
 4.06. Fixed Asset Supplies. 
 The
parties further recognize that, as of the Effective Date, the level of funds for Fixed Asset Supplies is reasonably believed to be reasonably sufficient for the operations of the Hotel, subject at all times to seasonal differences and changes in
circumstances after the Effective Date. Any additional funds which are necessary to maintain Fixed Asset Supplies at levels determined by Manager (with the concurrence of Owner) to be necessary to satisfy the needs of the Hotel, shall be paid from
Gross Revenues as Deductions. Fixed Asset Supplies shall remain the property of Owner throughout the term of this Agreement and upon Termination. 
 4.07. Real Estate and Personal Property Taxes. 
 A. Except as specifically set forth in Section 4.07.B below, all real
estate and personal property taxes, levies, assessments (including special assessments (regardless of when due or whether they are paid as a lump sum or in installments over time) imposed because of facilities that are constructed by or on behalf of
the assessing jurisdiction (for example, roads, 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 

  

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Hotel (collectively, “Impositions”) during the Term shall be paid by Manager from Gross Revenues, before any fine, penalty, or
interest is added thereto or lien placed upon the Hotel or upon this Agreement, unless payment thereof is in good faith being contested and enforcement thereof is stayed. Any such payments shall be Deductions in determining Operating Profit. Owner
shall, within five (5) days after receipt, furnish Manager with copies of official tax bills and assessments which it may receive with respect to the Hotel. Either Landlord or Owner may, and at Owner’s request Manager shall, initiate
proceedings to contest any negotiations or proceedings with respect to any Imposition, and all reasonable costs of any such contest shall be paid from Gross Revenues and shall be a Deduction in determining Operating Profit. Manager shall, as part of
its contest or negotiation of any Imposition, be entitled, on Owner’s behalf, to waive any applicable statute of limitations in order to avoid paying the Imposition during the pendency of any proceedings or negotiations with applicable
authorities. Notwithstanding anything contained herein to the contrary, at Owner’s option (i) Manager shall establish an escrow account in the name of Owner in a bank or banks designated by Manager with the concurrence of Owner and shall
deposit monthly into such account from Gross Revenues an amount that Manager reasonably estimates shall be sufficient to pay the Impositions, in which case Manager shall pay the Impositions from funds in the escrow account as and when the
Impositions become due (and Owner shall promptly deposit into the escrow account any deficiency if the estimated monthly payments are not sufficient to pay all of the Impositions) or (ii) the amounts that would otherwise be deposited into such
escrow account shall be included in the Operating Profit, not deducted from Gross Revenues and shall be distributed in cash to Owner along with the remainder of the Owner’s Priority. If Owner elects to retain such amounts pursuant to clause
(ii) above, Manager shall accrue such amounts as a reserve on the accounting records of the Hotel, and Owner shall fund the same as and when the Impositions become due, but such accrued and unfunded amounts shall be deducted from Gross Revenues
for purposes of calculating the Incentive Management Fee. In addition, if any Mortgagee requires the establishment of an escrow account with respect to the Impositions, Manager shall comply with such requirements. 
 B. The word “Impositions” as used in this Agreement shall not include any franchise, corporate, estate, inheritance, succession,
capital levy or transfer tax or other assessment or payment in lieu thereof imposed on Owner or Manager, or any income tax imposed on any income of Owner or Manager (including distributions to Owner or Manager pursuant to Article III hereof), all of
which shall be paid solely by Owner or Manager, as applicable, not from Gross Revenues nor from the Reserve. 
 4.08. Sarbanes-Oxley
Certification. 
 A. Owner may, in connection with its or any of its Affiliate’s annual or quarterly Securities and Exchange
Commission reporting requirements (and in any event no more than four (4) times in any Fiscal Year), request that Manager deliver to Owner or its Affiliate a certificate from an accounting officer (or equivalent employee) of Manager, in a form
approved by Manager’s accounting firm, certifying that, to his or her knowledge, the information 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 

  

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certificate is to be delivered, not less than five (5) business days prior to the requested delivery date, and Manager shall deliver the certificate by
the requested date or, if later, within five (5) business days after Manager’s receipt of Owner’s request. 
 B. In connection
with Owner’s or its Affiliates’ certifications under Section 404 (“Section 404”) of the Sarbanes-Oxley Act of 2002, Owner or such Affiliate shall have the right, at its option: 
 1. Either (i) to require Manager to document its processes and related internal controls for Owner or such Affiliate to use in its required
documentation under Section 404 or (ii) to have access to Manager’s books and records relating to the Hotel (including, without limitation, reasonable access to Manager’s premises) to document Manager’s processes and related
internal controls; and 
 2. Either (i) to require testing by Manager of the controls identified in clause 1 above or (ii) to have
access to Manager’s books and records relating to the Hotel (including, without limitation, reasonable access to Manager’s premises) to permit Owner or such Affiliate to test the controls identified in clause 1 above. 
 Manager shall provide Owner’s or such Affiliates’ independent auditors access to Manager’s books and records relating to the Hotel
(including, without limitation, access to Manager’s premises) to conduct their audit of the testing performed pursuant to this Section 4.08. If Owner or such Affiliate determine such controls have weaknesses which should be mentioned in
Owner’s or such Affiliates’ report on internal controls under Section 404 or other certifications under the Sarbanes-Oxley Act of 2002, Manager shall use reasonable best efforts to remedy and/or correct identified weaknesses within
thirty (30) days after notice; provided, however, that in the event that Manager does not so remedy and/or correct such weaknesses within the applicable thirty (30) day cure period, Owner shall be entitled to terminate this Agreement upon
thirty (30) days prior notice to Manager. Manager shall be responsible for any costs of Owner or its auditors associated with correcting or retesting any such weaknesses. 
 ARTICLE V 
 REPAIRS, MAINTENANCE AND REPLACEMENTS 
 5.01. Repairs and Maintenance to be Paid from Gross Revenues. 
 Subject to the availability of adequate funds, Manager shall maintain the Hotel in good repair and condition, comply with and abide by all applicable Legal Requirements pertaining to its operation of the Hotel and
shall make or cause to be made such routine maintenance, repairs and minor alterations as it determines are necessary for such purposes and as required pursuant to the terms of the Franchise Agreement or by Owner. The phrase “routine
maintenance, repairs, and minor alterations” as used in this Section 5.01 shall include only those which are 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. 
  

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 5.02. Repairs, Maintenance and Equipment Replacements to be Paid from Reserve. 
 A. At Owner’s option and request, a reserve account in the name of Owner (the “Reserve”) shall be established by Manager, in
a bank or similar institution reasonably acceptable to both Manager and Owner, to cover the cost of: 
 1. Replacements, renewals and
additions to the FF&E at the Hotel; and 
 2. Capital Expenditures. 
 B. During the Term, Manager shall transfer into the Reserve the amount(s) specified in Schedule 1. Transfers into the Reserve shall be made at the
time of each interim accounting described in Section 4.01 hereof. All amounts transferred to the Reserve shall be deducted from Gross Revenues in determining Operating Profit and shall be deposited in the special Reserve account described in
Section 5.02.A. 
 C. Subject to the availability of adequate funds, Manager at Owner’s expense shall from time to time make such
(1) replacements and renewals to the FF&E of the Hotel, and (2) Routine Capital Expenditures, as may be agreed upon by Owner and Manager and as may be required by the Franchise Agreement. At the end of each Fiscal Year, any amounts
remaining in the Reserve shall be carried forward to the next Fiscal Year. The Reserve will be kept in an interest-bearing account, and any interest which accrues thereon shall be retained in the Reserve. Interest which accrues on amounts held in
the Reserve, shall not (a) result in any reduction in the required contributions to the Reserve set forth in Section 5.02.B above, nor (b) be included in Gross Revenues. 
 D. All repairs, alterations, improvements, renewals or replacements made pursuant to this Article V, and all amounts kept in the Reserve, shall be the
property of Owner, subject to Manager’s rights to apply such funds as otherwise provided in this Agreement. In addition and notwithstanding anything contained herein to the contrary, no funds shall be expended for replacements, renewals and
additions to the FF&E, for Routine Capital Expenditures or for any other capital expenditures unless each such expenditure is included in the Annual Operating Projection approved by Owner. In the event that Owner requests that Manager perform
capital improvements that are not included in the Annual Operating Projection, Manager will perform such improvements provided that Owner and Manager have theretofore agreed upon a mutually satisfactory funding mechanism to pay for the cost of such
improvements. Notwithstanding the foregoing, in case of threatened damage or destruction to the Hotel or persons or property thereon due to force majeure or other comparable emergency, Manager may at Owner’s expense make such repairs,
replacements or improvements to the Hotel as Manager reasonably deems necessary to avoid and/or minimize any such injury, damage or destruction. 
 E. Notwithstanding anything contained herein to the contrary, at Owner’s option the amounts that would otherwise be deposited into the Reserve pursuant to this Section 5.02 shall 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. 
  

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 F. Unless otherwise expressly covered by this Article V (including without limitation in case of
emergency as provided in Section 5.02.D.), Manager shall not make any capital expenditure or improvement without first obtaining Owner’s prior written consent and approval. 
 ARTICLE VI 
 INSURANCE 
 6.01. Property Insurance. 
 A. Subject
to Owner’s prior approval, which shall not be unreasonably withheld or delayed, and the provisions of Section 6.05, Manager shall, commencing with the Effective Date and for the duration of the Term, procure and maintain, using funds
deducted from Gross Revenues in determining Operating Profit, the following insurance and/or such other insurance as may be required by the Franchise Agreement or approved or required by Owner: 
 1. Insurance on the Hotel (including contents) against loss or damage by all perils included in “all risk” (as such term is commonly used in the
insurance industry) coverage, in an amount not less than one hundred percent (100%) of the replacement cost thereof, except that if such 100% replacement cost coverage is not available on reasonable rates and terms, then such insurance shall be
in an amount not less than ninety percent (90%) of the replacement cost thereof (less excavation and foundation costs), of the Hotel; 
 2. Insurance against loss or damage from explosion of boilers, pressure vessels, pressure pipes and sprinklers, to the extent applicable, installed in the Hotel; 
 3. Business interruption insurance covering loss of profits and necessary continuing expenses for interruptions caused by any occurrence covered by the insurance referred to in Section 6.0l.A.1 and 2, for a
period of not less than one (1) year after the occurrence, of a type and in amounts and with such deductible limits as are agreed upon by Owner and Manager. 
 4. If the Hotel is in an earthquake-prone area, earthquake insurance as is customary in accordance with local practice. 
 B. All policies of insurance required under Section 6.01.A. 1, 2, 3, and 4 shall insure Owner, Landlord, Manager, and any Mortgagee as named insureds, and any losses thereunder shall be payable to the parties as
and to the extent their respective interests, if any, may appear. 
 6.02. Operational Insurance. 
 Subject to Owner’s prior approval, which shall not be unreasonably withheld or delayed, and the provisions of Section 6.05, Manager shall,
commencing with the Effective Date and for the duration of the Term, procure and maintain, using funds deducted from Gross Revenues in 

  

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determining Operating Profit, with insurance companies approved by Owner the following insurance and/or such other insurance as may be required by the
Franchise Agreement or approved or required by Owner: 
 A. Workers compensation insurance as may be required under applicable laws covering
all of the employees at the Hotel, with such deductible limits or self-insured retentions as are agreed upon by Owner and Manager; 
 B.
Fidelity bonds or crime insurance with respect to Hotel employees and other employees of Manager handling funds of the Hotel, in an amount approved by Owner; 
 C. Comprehensive general public liability insurance against claims for all injury, death or property damage occurring on, in, or about the Hotel, and automobile insurance on vehicles owned or leased by owner and
operated in conjunction with the Hotel, with a combined single limit of not less than Twenty Million Dollars ($20,000,000) for each occurrence for personal injury, death and property damage, with such deductible limits as are agreed upon by Owner
and Manager; 
 D. Employment practices liability insurance covering employment-related claims and the legal defense of such claims in
amounts as Manager in its reasonable judgment deems advisable (with the concurrence of Owner, which shall not be unreasonably withheld or delayed); 
 E. Such other insurance, including excess/umbrella coverage, in amounts as Manager in its reasonable judgment deems advisable (with the concurrence of Owner, which shall not be unreasonable withheld or delayed) for protection against
claims, liabilities and losses arising out of or connected with the operation of the Hotel or as reasonably required by a Mortgagee. 
 Owner, Manager and Landlord shall be the named insureds with respect to the insurance described in Section 6.02.C and, to the extent applicable, Section 6.02.E. Manager shall be the named insured and Owner and Landlord shall be
additional insureds on the policies described in Section 6.02.A, 6.02.B. and 6.02.D. 
 6.03. Coverage. 
 All insurance described in Sections 6.01 and 6.02 may be obtained by Manager by endorsement or equivalent means under its blanket insurance policies,
provided that such blanket policies fulfill the requirements specified herein. Deductible limits shall be as agreed upon by Owner and Manager. No coverage required hereunder shall be self-insured by Manager or Owner without prior written approval of
Manager and Owner. Owner shall have the right to approve the insurance policies to be obtained by Manager pursuant hereto and the insurance companies issuing such policies. 
 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 

  

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

 6.06. Waiver of Subrogation. All policies of insurance carried by any party pursuant to this Agreement shall expressly waive any
right on the part of the insurer against any other party to this Agreement, which right, is hereby expressly waived to the extent that such waiver is not prohibited by or violative of any such policy or does not otherwise cause a loss or reduction
of coverage. The parties to this Agreement agree that their policies will include such waiver clause or endorsement so long as the same shall be obtainable without unreasonable extra cost. 
 ARTICLE VII 
 DAMAGE AND REPAIR 
 7.01. Damage and Repair. 
 A. If,
during the Term, the Hotel is damaged or destroyed by fire, casualty or other cause, Owner and/or Landlord may elect, in its sole and absolute discretion, to repair or replace the damaged or destroyed portion of the Hotel with such modifications as
Owner may deem appropriate or as may be required by law, and Manager shall have the right to discontinue operating the Hotel to the extent it deems necessary to comply with applicable law, ordinance, regulation or order or as necessary for the safe
and orderly operation of the Hotel. All proceeds from the insurance described in this Agreement shall be paid to Owner and/or Landlord, as the case may be. If Owner elects not to repair or replace said damaged portion of the Hotel, Owner shall so
notify Manager by written notice as soon as reasonable practicable and no later than ninety (90) days after the date of the casualty. 
 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. 
  

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 7.02. Condemnation. 
 A. In the event all or substantially all of the Hotel shall be taken in any eminent domain, condemnation, compulsory acquisition, or similar proceeding by any competent authority for any public or quasi-public use or
purpose or in the event a portion of the Hotel shall be so taken, but the result is that either Owner or Manager reasonably determines that it is not feasible to continue to operate the Hotel in accordance with the standards required by this
Agreement, Owner or Manager may terminate this Agreement as of the effective date of such taking. All awards and proceeds of any such taking or proceeding shall belong to Owner and/or Landlord, as the case may be. 
 B. In the event this Agreement is not terminated pursuant to Section 7.02.A, such portion of the Hotel that is not so taken shall be repaired or
replaced, with such modifications as Owner may deem appropriate or as may be required by law, and this Agreement shall continue except as may be otherwise agreed by the parties. All awards for any such partial taking or condemnation shall belong to
Owner and/or Landlord, as the case may be. Manager shall have the right to discontinue temporarily operating the Hotel to the extent it deems necessary for the safe and orderly operation of the Hotel. 
 7.03. Business Interruption. 
 In the
event that the operations of the Hotel are interrupted by the causes described in Sections 7.01 and 7.02 above, Manager shall nonetheless be entitled to be paid a Base Management Fee during the period of interruption equal to one-twelfth
(1/12) of the annual Base Management Fee in the amount called for in the current Annual Operating Projection (but in no event less than the Base Management Fee for the preceding full Fiscal Year). The Base Management Fee shall be prorated for
any partial period of interruption. 
 7.04. Subordination to Mortgage. 
 Manager shall provide to any Mortgagee an instrument (the “Subordination Agreement”), reasonably satisfactory in all respects to
Owner and such Mortgagee, which shall be recordable in the jurisdiction where the Hotel is located, pursuant to which: 
 1. This Agreement
and any extensions, renewals, replacements or modifications thereto, and all right and interest of Manager in and to the Hotel, shall be subject and subordinate to such Mortgagee’s Mortgage, with notice and opportunity to cure rights and
post-default cure rights in favor of Mortgagee; 
 2. Manager shall be obligated to each of the Subsequent Owners (as defined below) to
perform all of the terms and conditions of this Agreement for the balance of the remaining Term hereof, with the same force and effect as if such Subsequent Owner were the Owner; and 
 3. In the event that there is a Foreclosure of such Mortgage in connection with which title or possession of the Hotel is transferred to the Mortgagee
(or its designee) or to a purchaser at foreclosure or to a subsequent purchaser from the Mortgagee (or from its designee) (all of the foregoing shall collectively be referred to as “Subsequent Owners”), this Agreement may be
terminated at the election of such Subsequent Owner as of the date of such Foreclosure or upon thirty (30) days notice. 
  

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

 8.01. Events of Default. 
 Each of the following shall, to the extent permitted by applicable law, constitute an “Event of Default” under this Agreement. 
 A. The filing of a voluntary petition in bankruptcy or insolvency or a petition for reorganization under any bankruptcy law by either party, or the admission by either party that it is unable to pay its debts as they
become due. 
 B. The consent to an involuntary petition in bankruptcy or the failure to vacate, within ninety (90) days from the date
of entry thereof, any order approving an involuntary petition by either party. 
 C. The entering of an order, judgment or decree by any
court of competent jurisdiction, on the application of a creditor, adjudicating either party as bankrupt or insolvent or approving a petition seeking reorganization or appointing a receiver, trustee, or liquidator of all or a substantial part of
such party’s assets, and such order, judgment or decree’s continuing unstayed and in effect for an aggregate of sixty (60) days (whether or not consecutive). 
 D. The failure of either party to make any payment required to be made in accordance with the terms of this Agreement, as of the due date as specified in
this Agreement and the failure to cure such default within ten (10) days after receipt of written notice from the non-defaulting party demanding such cure, provided that only a two (2) business day notice or cure period shall be required
in the case of payments by Manager of Owner’s Priority or other distributions of Operating Profit payable to Owner. 
 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. 
  

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 F. In carrying out its duties hereunder, Manager or an officer, director, employee, or agent of Manager
or its Affiliates commits any act involving fraud, moral turpitude or willful misconduct relating to the business or affairs of the Hotel, or commits an act which constitutes a felony. 
 G. Any representation or warranty by Manager or any of its Affiliates in this Agreement or in any certificate or document or financial or other statement
furnished or delivered to Owner or any of its Affiliates at any time under or in connection with this Agreement shall have been false or intentionally misleading in any material respect on or as of the date made or deemed made. 
 H. The failure of either party to perform, keep or fulfill any of the other covenants, undertakings, obligations or conditions set forth in this
Agreement that continues for a period of thirty (30) days after the defaulting party’s receipt of written notice from the non-defaulting party of said failure, or, if the default is such that it cannot reasonably be cured within said
thirty (30) day period of time, if the defaulting party fails to commence the cure of such default within said thirty (30) day period of time or thereafter fails to diligently pursue such efforts to completion. , provided that (i) in
the case of any default by Manager such default is cured not later than ninety (90) days after Manager’s receipt of such written notice and (ii) only a two (2) business day notice or cure period shall be required in the case of
Manager’s failure to maintain the insurance required by Article VI. 
 8.02. Remedies. 
 Upon the occurrence of an Event of Default, the non-defaulting party shall have the right to pursue any one or more of the following courses of action:
(1) to terminate this Agreement by written notice to the defaulting party, which termination shall be effective as of the effective date which is set forth in said notice, provided that said effective date shall be at least thirty
(30) days after the date of said notice in the case of an Event of Default by Owner; (2) to institute forthwith any and all proceedings permitted by law or equity including, without limitation (but subject to the provisions of
Section 10.24 hereof), actions for specific performance and/or damages; and/or (3) to avail itself of the remedies described in Section 8.03. 
 8.03. Additional Remedies. 
 A. Upon the occurrence of a Default by either party under the provisions
of Section 8.0l.D, the amount owed to the non-defaulting party shall accrue interest, at an annual rate equal to the Prime Rate plus three (3) percentage points, from and after the date on which the Default occurred. 
 B. The remedies granted under Section 8.02 and Section 8.03 shall not be in substitution for, but shall be in addition, to, any and all rights
and remedies available to the non-defaulting party (including, without limitation, injunctive relief and damages) by reason of applicable provisions of law or equity (except as specifically limited by this Agreement) and shall survive Termination.

  

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 ARTICLE IX 
 ASSIGNMENT AND SALE 
 9.01. Assignment. 
 A. Manager shall not assign or transfer its interest in this Agreement without the prior written consent of Owner and any franchisor under the Franchise
Agreement. Any assignee consented to by Owner and by such franchisor shall agree in writing to be bound by and comply with the terms of this Agreement (such written agreement to be acceptable in form and substance to Owner and such franchisor). For
purposes of the foregoing, a transfer of Manager’s interest in this Agreement shall include (i) an assignment or pledge of this Agreement as security for an obligation, (ii) a transfer of any controlling ownership or beneficial
interest, direct or indirect, in Manager, including any such transfer by operation of law except to an Affiliate and (iii) a transfer of Manager’s interest in this Agreement by operation of law, including by merger or consolidation (other
than such a transfer to an Affiliate approved by Owner, which approval shall not be unreasonably withheld). 
 B. Owner shall have the right
to assign or transfer its interest in this Agreement without the prior written consent of the Manager (1) as security for a Mortgage of the Hotel in accordance with this Agreement, (2) in connection with a sale, assignment, transfer or
other disposition of the Hotel by Owner or Landlord, subject to Section 9.02, and (3) in connection with a merger or consolidation or reorganization of, or a sale of all or substantially all of the assets of, Apple REIT Eight, Inc., or any
Affiliate thereof. 
 C. In the event Owner and the franchisor under the Franchise Agreement consent to an assignment of this Agreement by
Manager, no further assignment or transfer shall be made without the express consent in writing of such parties. An assignment by Manager of its interest in this Agreement shall not relieve Manager from its obligations under this Agreement.

 D. Notwithstanding anything contained herein to the contrary, Manager shall not assign its interest in this Agreement to a Specially
Designated National or Blocked Person. 
 9.02. Sale of the Hotel. 
 Owner or Landlord may, in its or their sole and absolute discretion, enter into any Sale of the Hotel to any Person and, in connection with any such Sale
of the Hotel, may assign this Agreement as provided in Section 9.01. However, if Owner or Landlord enters into a Sale of the Hotel, either Owner or Manager may, at its option, terminate this Agreement upon thirty (30) days notice to the
other party upon completion of the Sale of the Hotel. Upon any such sale or assignment, Owner shall be released of all liabilities and obligations arising under and with respect to this Agreement on and after the date of such Sale of the Hotel;
provided, however, that Owner shall continue to be liable for all obligations and amounts due which arise or accrue during the Term of this Agreement before the date of such Sale of the Hotel, including, but not limited to, the obligation to pay a
Termination Fee as provided in Section 3.04 above but such Termination Fee shall only be payable if Owner (not Manager) terminates this Agreement upon Sale of the Hotel. Upon the termination of this Agreement pursuant to this Section 9.02,

  

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Manager shall be released of all liabilities and obligations arising under and with respect to this Agreement on and after the date of such termination;
provided, however, that Manager shall continue to be liable for all obligations and amounts due which arise or accrue during the Term of this Agreement before the date of such termination. 
 ARTICLE X 
 MISCELLANEOUS 
 10.01. Right to Make Agreement. 
 Each
party warrants, with respect to itself, that neither the execution of this Agreement nor the performance of the transactions contemplated hereby shall violate any provision of law or judgment, writ, injunction, order or decree of any court or
governmental authority having jurisdiction over it; result in or constitute a breach or default under any indenture, contract, other commitment or restriction to which it is a party or by which it is bound; or, require any consent, vote or approval
which has not been taken, or at the time of the transaction involved shall not have been given or taken. Each party covenants that it has and will continue to have throughout the Term and any extensions thereof, the full right to enter into this
Agreement and perform its obligations hereunder. 
 10.02. Consents and Cooperation. 
 Wherever in this Agreement the consent or approval of Owner or Manager is required, except as otherwise provided in this Agreement or agreed by the
parties, such consent or approval shall not be withheld, delayed or conditioned , shall be in writing and shall be executed by a duly authorized officer or agent of such party. Owner agrees to cooperate with Manager by executing such leases,
subleases, licenses, concessions, equipment leases, service contracts and other agreements negotiated in good faith and at arm’s length by Manager and pertaining to the Hotel that, in Manager’s reasonable judgment, should be made in the
name of the Owner, provided that all such agreements shall be subject to Owner’s prior approval. 
 10.03. Relationship.

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

  

 22 

 
hold Owner harmless from and against any claims by the third party vendor or supplier under any contract entered into by Manager (a) in the name of
Owner without Owner’s prior written consent and approval or (b) in the name of Manager without Owner’s prior written consent and/or approval if such consent and/or approval is required by the terms of this Agreement. 
 10.04. Applicable Law; Jurisdiction. 
 This Agreement shall be construed under and shall be governed by the laws of the state in which the Hotel is located, without regard to that state’s conflict of laws provisions. Each of Owner and Manager hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the state and (to the extent permitted by law) Federal courts of such state, and any appellate court from any thereof, in any action or proceeding arising out
of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined
in such state court or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that Owner or Manager may otherwise have to bring any action or proceeding relating to this Agreement against the other party in the courts of any
other jurisdiction. Each of Owner and Manager hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in any court referred to above. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such
action or proceeding in any such court. 
 10.05. Recordation. 
 The terms and provisions of this Agreement shall not run with the parcel of land designated as the Site, and neither this Agreement nor any memorandum or
short form hereof shall be recorded or registered without the prior written consent of Owner. 
 10.06. Headings. 
 Headings of articles and sections are inserted only for convenience and are in no way to be construed as a limitation on the scope of the particular
articles or sections to which they refer. 
 10.07. Notices. 
 Notices, statements and other communications to be given under the terms of this Agreement shall be in writing and delivered by hand against receipt or
sent by certified or registered mail (with a copy by first class mail) or Express Mail service, in each case postage prepaid, return receipt requested or by nationally utilized overnight delivery service, addressed to the parties as follows:

  

 23 

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

 or at such other address as is from time to time designated by the party receiving the notice. Any such notice
that is mailed in accordance herewith shall be deemed received when delivery is received or refused, as the case may be. Additionally, notices may be given by telephone facsimile transmission, provided that an original copy of said transmission
shall be delivered to the addressee by nationally utilized overnight delivery service on the business day following such transmission. Telephone facsimiles shall be deemed delivered on the date of such transmission. 
 10.08. Environmental Matters. 
 A. Manager shall operate the Hotel in compliance with all applicable Environmental Laws. Manager shall (i) not use, generate or store any Hazardous Materials in or on the Hotel except as necessary for the operation and maintenance of
the Hotel and in compliance with the Environmental Laws, (ii) not allow, permit or cause the release or threat of release of any Hazardous Materials in, on, under or from the Hotel, except for the ordinary use of cleaning and maintenance
supplies in compliance with applicable Environmental Laws, (iii) not allow the accumulation of tires, spent batteries, construction and demolition debris or any other solid waste, except for solid waste generated from the operation of the Hotel
and stored in containers for normal scheduled pickup and disposal off site in compliance with applicable Environmental Laws and (iv) use best efforts to operate and maintain the Hotel in a manner to prevent mold, fungal or other microbial
growth or conditions that are favorable for such growth, including, without limitation, the proper operation and maintenance of heating, ventilation and air conditioning systems and removal of any mold, fungal or microbial growth. 
 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 

  

 24 

 
promptly notify Owner and shall take all appropriate actions with regard to such Hazardous Materials as required of an owner or operator under applicable
Environmental Laws. Manager shall keep Owner apprised of the status of addressing the release or threat of release of Hazardous Materials, and Owner shall have the right at any time to assume control of the matter from Manager. 
 C. Notwithstanding the foregoing paragraphs, the parties agree that Manager is not and shall not be the insurer for the Hotel as to environmental matters
and, to that end, Manager shall only be responsible for environmental remediation necessitated as a result of Manager’s negligence or acts or omissions (as opposed to Owner’s or a third-party’s negligence, acts or omissions).

 “Environmental Laws” shall mean all federal, state and local environmental, health and safety laws, rules, regulations,
ordinances, permits, orders, common law or requirements of any governmental authority, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. §§ 9601, et. seq., as
amended; Solid Waste Disposal Act, 42 U.S.C. §§ 6901, et. seq., as amended; Toxic Substances Control Act, 15 U.S.C. §§ 2601, et. seq., as amended; Hazardous Materials Transportation Act, 49 U.S.C. §§ 5101,
et. seq., as amended; Federal Water Pollution Control Act, 33 U.S.C. §§ 1251, et. seq.  
 “Hazardous
Materials” shall mean any hazardous substances, hazardous wastes, toxic substances, hazardous materials, petroleum or petroleum products, pollutants or contaminants (as those terms are defined under Environmental Laws), including,
without limitation, polychlorinated biphenyls, lead or lead-based paint, asbestos or mold in such concentrations or amounts as may impose clean-up, removal, monitoring or other responsibility under the Environmental Laws or which may present a
significant risk of harm to guests, invitees or employees of the Hotel. 
 10.09. Confidentiality; Projections. 
 A. Owner and Manager agree that the terms of this Agreement (but not its existence) are strictly confidential and will use their reasonable efforts to
ensure that the terms of this Agreement are not disclosed to any outside person or entities without the prior written consent of the other party, except (1) as Owner or Manager may determine is required by any law, rule, regulation or judicial
process, or by any regulatory or supervisory authority having jurisdiction over the parties or any of their Affiliates or (2) to the extent reasonably necessary, (i) to obtain licenses, permits and other public approvals, (ii) in
connection with a financing of the Hotel, Owner, or any Affiliate thereof, (iii) in connection with a Sale of the Hotel or other sale of Owner, or any Affiliate thereof or its or their corporate assets, (iv) subject to the provisions of
Section 4.02, in connection with an audit or other investigation conducted pursuant to this Agreement or (v) in connection with either party’s enforcement of its rights and remedies under this Agreement. Notwithstanding the foregoing
or anything to the contrary set forth herein, the 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. 
  

 25 

 B. Owner acknowledges that any written or oral projections, pro formas, or other similar information that
has been (prior to execution of this Agreement) or will (during the Term) be provided by Manager (or any Affiliate of either) to Owner is for information purposes only, and that Manager, and any such Affiliate do not guarantee that the Hotel will
achieve the results set forth in any such projections, pro formas, or other similar information. Owner further acknowledges that any such projections, pro formas, or other similar information are based on assumptions and estimates, unanticipated
events may occur subsequent to the date of preparation of such projections, pro formas, and other similar information, and the actual results achieved by the Hotel are likely to vary from the estimates contained in any such projections, pro formas,
or other similar information and such variations might be material. 
 10.10. Indemnification. 
 A. Manager hereby agrees to indemnify, defend and hold harmless Owner, its officers, directors, stockholders, employees, agents and their respective
successors and assigns from and against any and all claims, liabilities, damages, losses, obligations and costs (including reasonable attorneys’ fees) arising from (i) Manager’s or any of its Affiliate’s failure to comply with
its obligations under this Agreement and, to the extent provided herein, the obligations of the franchisee under the Franchise Agreement, (ii) any negligent act or omission, theft, fraud or willful misconduct of Manager or its Affiliates and
their respective employees or agents and (iii) any claim asserted by any employee or agent of Manager or its Affiliates, including any claim for employment discrimination, wrongful termination, violations of law and other claims asserted by
such employees, except, as to any of the items listed in clauses (i) – (iii) above, to the extent of any costs properly payable from Gross Revenues as Deductions, to the extent of any costs or claims covered by insurance and to the
extent that the loss or liability giving rise to such claim was caused directly by Owner’s breach of its obligations under this Agreement. 
 B. Owner hereby agrees to indemnify, defend and hold harmless Manager, its officers, directors, stockholders, employees, agents and their respective successors and assigns from and against any and all claims, liabilities, damages, losses,
obligations and costs (including reasonable attorneys’ fees) arising from (i) Owner’s failure to comply with its obligations under this Agreement, (ii) any theft, fraud or willful misconduct of Owner or its Affiliates or their
respective employees or agents and (iii) any claim asserted by any employee or agent of Owner or its Affiliates except, as to any of the items listed in clauses (i)-(iii) above, to the extent the loss or liability giving rise to such claim
was caused directly by Manager’s breach of its obligations under this Agreement or is covered by insurance. 
 C. In agreeing to the
provisions relating to liability and indemnity contained in this Section 10.10, Owner, Landlord, and Manager recognize that simple mistakes and/or errors in judgment by Manager and the employees of Manager are ordinary risks of business in the
operation of the Hotel and that Manager is not assuming such risks and shall not be responsible for loss, liability, or costs resulting therefrom. Further, Manager is not undertaking to be an insurer against third party claims or the insurer of the
profitability of the Hotel. Furthermore, Manager is not assuming any liability for work performed or materials or equipment supplied by third parties. 
  

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 D. Neither Owner, Landlord, nor Manager shall be liable for any special, indirect, incidental, or
consequential damages of any kind in connection with this Agreement, including without limitation, damages resulting from loss of profits, lost sales, business or goodwill, whether or not such party has been advised of the possibility of such
damages. 
 E. The provisions of this Section 10.10 shall survive Termination. 
 10.11. Actions to be Taken Upon Termination. 
 Upon a Termination, the following shall be applicable: 
 A. All fees or expenses due to Manager for the period before such
Termination shall be paid to Manager. On the effective date of such Termination, Manager shall cease all activities hereunder on behalf of Owner at the Hotel and shall have no further obligations hereunder except as to matters arising before such
date and except as otherwise provided in this Agreement. However, Manager shall cooperate with Owner in the orderly transfer of management to Owner or Owner’s designated agent or manager. 
 B. Manager shall, within forty-five (45) days after Termination, prepare and deliver to Owner a final accounting statement with respect to the
Hotel, as more particularly described in Section 4.01 hereof, along with a statement of any sums due from Owner to Manager pursuant hereto, dated as of the date of Termination. Within thirty (30) days of the receipt by Owner of such final
accounting statement, the parties will make whatever cash adjustments are necessary pursuant to such final statement. The cost of preparing such final accounting statement shall be a Deduction, unless the Termination occurs as a result of an Event
of Default by either party, in which case the defaulting party shall pay such cost. Manager and Owner acknowledge that there may be certain adjustments for which the information will not be available at the time of the final accounting and the
parties agree to readjust such amounts and make the necessary cash adjustments when such information becomes available; provided, however, that all accounts shall be deemed final two (2) years after Termination. 
 C. Manager shall immediately release and transfer to Owner any of Owner’s funds which are held or controlled by Manager with respect to the Hotel.

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

  

 27 

 
name (including liquor and restaurant licenses, if any); provided that if Manager has expended any of its own funds in the acquisition of any of any of such
licenses or permits, Owner shall reimburse Manager therefor if it has not done so already unless such expenditure is a Manager’s Liability. 
 F. If this Agreement is terminated by reason of Owner’s Event of Default, a reasonable reserve shall be established from Gross Revenues to reimburse Manager for all costs and expenses incurred by Manager in terminating its employees at
the Hotel, such as severance pay, unemployment compensation, employment relocation and other employee liability costs arising out of the termination of employment of Manager’s employees at the Hotel. If Gross Revenues are insufficient to meet
the requirements of such reserve, then Owner shall deliver to Manager, within ten (10) Business Days after receipt of Manager’s written request therefor, the sums necessary to establish such reserve. 
 G. If this Agreement is terminated before the expiration of the Term for any reason other than an Event of Default by Manager, Manager may submit to
Owner for its approval a budget with respect to expenses anticipated to be incurred by Manager to terminate its activities at the Hotel. Upon approval of such budget by Owner, Owner shall deposit the total amount of such budget into the Hotel’s
operating account, and Manager may use such deposit to pay such expenses. Manager shall provide Owner a final accounting of the foregoing, and any surplus remaining from such deposit shall be refunded to Owner. 
 H. Owner may, at its option, (i) provide Manager and/or the employees at the Hotel (or require Manager to provide to the employees at the Hotel) at
least sixty (60) days’ notice of a Termination and/or (ii) cause the entity which shall succeed Manager as the operator of the Hotel to offer employment to a sufficient number of the employees at the Hotel to avoid the occurrence, in
connection with such Termination, of a “plant closing” or “mass layoff” within the meaning of the WARN Act. If Owner elects to cause the entity which shall succeed Manager as operator of the Hotel to offer employment to certain
of Manager’s employees, Manager shall not take any action that would cause such employees not to continue as employees at the Hotel. 
 I. Various other actions shall be taken, as described in this Agreement, including, but not limited to, the actions described in Section 4.05. 
 J. Manager shall peacefully vacate and surrender the Hotel to Owner on the date of termination unless otherwise agreed to by the parties. 
 The provisions of this Section 10.11 shall survive Termination. 
  

 28 

 10.12. Waiver. 
 The failure of either party to insist upon a strict performance of any of the terms or provisions of this Agreement, or to exercise any option, right or remedy contained in this Agreement, shall not be construed as a
waiver or as a relinquishment for the future of such term, provision, option, right or remedy, but the same shall continue and remain in full force and effect. No waiver by either party of any term or provision hereof shall be deemed to have been
made unless expressed in writing and signed by such party. 
 10.13. Partial Invalidity. 
 If any portion of any term or provision of this Agreement, or the application thereof to any person or circumstance shall be invalid or unenforceable, at
any time or to any extent, the remainder of this Agreement, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and
provision of this Agreement shall be valid and be enforced to the fullest extent permitted by law. 
 10.14. Survival. 
 Except as otherwise specifically provided in this Agreement or where required to give effect to a provision of this Agreement or to avoid a forfeiture,
the rights and obligations of the parties herein shall not survive any Termination. 
 10.15. Negotiation of Agreement. 
 Owner and Manager are both business entities having substantial experience with the subject matter of this Agreement, and each has fully participated in
the negotiation and drafting of this Agreement. Accordingly, this Agreement shall be construed without regard to the rule that ambiguities in a document are to be construed against the draftsman. No inferences shall be drawn from the fact that the
final, duly executed Agreement differs in any respect from any previous draft hereof. 
 10.16. Estoppel Certificates. 
 Each party to this Agreement shall at any time and from time to time, upon not less than fifteen (15) days’ prior notice from the other party,
execute, acknowledge and deliver to such other party, or to any third party specified by such other party, a statement in writing: (a) certifying that this Agreement is unmodified and in full force and effect (or if there have been
modifications, that the same, as modified, is in full force and effect and stating the modifications); and (b) stating to the best knowledge of the certifying party (i) whether or not there is a continuing Default or Event of Default by
the non-certifying party in the performance or observance of any covenant, agreement or condition contained in this Agreement, (ii) the amount, if any, of any past due fees or other past due amounts owed to Manager or Owner; and
(iii) whether or not there are any past due and unpaid obligations with respect to the Hotel, other than in the ordinary course of business. Such statement shall be binding upon the certifying party and may be relied upon by the non-certifying
party and/or such third party specified by the 

  

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non-certifying party as aforesaid. In addition, upon written request after a Termination, each party agrees to execute and deliver to the non-certifying
party and to any such third party a statement certifying that this Agreement has been terminated. 
 10.17. Affiliates. 
 Manager shall not be entitled to contract with companies that are Affiliates (or companies in which Manager has an ownership interest if such interest is
not sufficient to make such a company an Affiliate) or with third parties or their Affiliates that have other contractual relationships with Manager and/or its Affiliates to provide goods and/or services to the Hotel without the prior written
consent of Owner. Notwithstanding the foregoing, Manager may contract with Affiliates to provide marketing, accounting and human resource services subject to the conditions that (i) the costs of such services are included in the Annual
Operating Projection approved by Owner and (ii) at the time Manager submits each Annual Operating Projection to Owner for its approval, Manager specifically identifies the services to be provided by Manager’s Affiliates. 
 10.18. Blocked Persons or Entities. 
 Manager represents and warrants to Owner and covenants for the benefit of Owner that (i) neither Manager nor any of its Affiliates or any of the officers, directors, partners or, to Manager’s knowledge, employees of Manager or its
Affiliates, or, to its knowledge, the funding sources for any of the foregoing, is or will be identified on the list of the U. S. Treasury’s Office of Foreign Asset Control (“OFAC”); (ii) neither Manager nor any of its Affiliates
is or will be directly or indirectly owned or controlled by the government of any country that is subject to an embargo imposed by the United States government; and (iii) neither Manager nor any of its Affiliates is acting or will act on behalf
of a government of, or is involved in business arrangements or other transactions with, any country that is subject to such an embargo. Manager will notify Owner in writing immediately upon the occurrence of any event which would render the
foregoing representations and warranties incorrect. 
 10.19. Restrictions on Operating the Hotel in Accordance with System Standards.

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

  

 30 

 
executed counterparts may be delivered by facsimile which, upon transmission to the other party, shall have the same force and effect as delivery of the
original signed counterpart. The submission of an unsigned copy of this Agreement or an electronic instrument with or without electronic signature to either party shall not constitute an offer or acceptance. This Agreement shall become effective and
binding only upon execution and delivery of this Agreement in non-electronic form by both parties in accordance with this Section. 
 10.21.
Entire Agreement. 
 This Agreement, together with any other writings signed by the parties expressly stated to be supplemental hereto
and together with any instruments to be executed and delivered pursuant to this Agreement, constitutes the entire agreement between the parties and supersedes all prior understandings and writings, and may be changed only by a written non-electronic
instrument that has been duly executed by the non-electronic (which shall not be deemed to exclude facsimile) signature of an authorized representative of the parties hereto. 
 10.22. Franchise Agreement. 
 During
the Term of this Agreement, subject to the availability of adequate funds, Manager shall perform all of the obligations of Owner as “Franchisee” under the Franchise Agreement to the extent such obligations relate to the management or
operation of the Hotel, including, without limitation, the obligations of “Franchisee” under Sections XIII (Accounting and Records) and XIV (Insurance) of the Franchise Agreement, and Manager shall not commit any act or omit to take any
action that would cause a default by the Franchisee under the Franchise Agreement. In the event of any inconsistency between the provisions of this Agreement and the provisions of the Franchise Agreement, the provisions of the Franchise Agreement
shall prevail. Manager shall send promptly to Owner any and all notices that Manager receives from the Franchisor with respect to the Hotel or the Franchise Agreement and shall keep Owner fully informed with respect to all matters that come to
Manager’s attention under the Franchise Agreement. Notwithstanding the foregoing, Manager shall not have the right to grant any consent, approval or other right reserved to the Franchisee under the Franchise Agreement or to make any decision or
agreement on behalf of Owner under the Franchise Agreement. In the event the Franchise Agreement is terminated for any reason, this Agreement shall also terminate effective as of the date of termination of the Franchise Agreement, unless the parties
hereto agree otherwise. 
 10.23. Operation of Other Hotels. 
 During the Term and except for the Hotel and the other hotels described in Schedule 1, neither Manager nor any of its Affiliates shall acquire,
lease, own, manage or operate, directly or indirectly, any hotel, inn, motel or other type of lodging facility, regardless of whether similar to the Hotel or whether operated under the same or a different brand, that is a Competing Hotel without
Owner’s prior written consent. In addition, if Manager or any of its Affiliates shall acquire, lease, own, manage or operate, directly or indirectly, any hotel, inn, motel or other type of lodging facility, regardless of whether similar to the
Hotel or whether operated under the same or a different brand, in the same geographic area or market as the Hotel, Manager shall not permit unfair favoritism in the operation and management of such other hotels that would 

  

 31 

 
disadvantage the operation or business of the Hotel (such as, by way of example only, directing potential Hotel guests to such other hotels instead of to the
Hotel). At Owner’s request, Manager shall provide such information as may reasonably be requested by Owner to determine if there has been any such unfair favoritism and, in the event Owner, in its reasonable business judgment, determines that
any such unfair favoritism has occurred, Owner may terminate this Agreement. For purposes of this Section, a “Competing Hotel” shall mean any hotel, inn, motel or other type of lodging facility that markets directly to or makes efforts to
attract customers, guests and/or hotel business that would otherwise do business with the Hotel. 
 10.24. Waiver of Jury Trial and
Punitive Damages. 
 Owner and Manager each hereby absolutely, irrevocably and unconditionally waive trial by jury and the right to claim
punitive damages in any litigation, action, claim, suit or proceeding, at law or in equity, arising out of or pertaining to this Agreement or any other agreement, instrument or document entered into in connection herewith. 
 10.25. Termination of the Hotel Lease. 
 Landlord represents and agrees that in the event of the cancellation or termination of the Hotel Lease for any reason, this Agreement shall remain in full force and effect with Landlord substituted as Owner hereunder. 
 10.26. All Payments Subject to Availability of Funds. 
 Whenever Manager is required to make a payment hereunder, it is agreed that such obligation is subject to the availability of adequate operating funds (or other funds provided by Owner) after the payment of all
operating expenses of the Hotel. 
 ARTICLE XI 
 DEFINITION OF TERMS 
 11.01. Definition of Terms. 
 The following terms when used in this Agreement shall have the meanings indicated: 
 “Accounting Period” shall mean a calendar month. 
 “Accounting Period Statement” shall have the meaning ascribed to it in Section 4.0l.A. 
 “Accounting Quarter” shall mean three consecutive Accounting Periods, the first of which begins on the first day of the Fiscal Year. 
 “Affiliate” shall mean, as to any Person, any other Person that, directly or indirectly, controls, is controlled by or is under common control with such Person. For purposes of this 

  

 32 

 
definition, the term “control” (including the terms “controlling,” “controlled by” and “under common control with”)
of a Person means the possession, directly or indirectly, of the power: (i) to vote more than fifty percent (50%) of the voting stock or other beneficial interests of such Person; or (ii) to direct or cause the direction of the
management and policies of such Person, whether through the Ownership of voting stock, by contract or otherwise. 
 “Agreement” shall mean this Management Agreement between Owner and Manager, including the exhibits attached hereto. 
 “Annual Operating Projection” shall have the meaning ascribed to it in Section 4.04. 
 “Annual Operating Statement” shall have the meaning set forth in Section 4.0l.B. 
 “Available Cash Flow” shall mean an amount, with respect to each Fiscal Year or portion thereof during the Term, equal to the excess, if any, of the Operating Profit over the Owner’s Priority. 
 “Base Management Fee” shall mean an amount payable to Manager as a Deduction from Gross Revenues for all services provided by
Manager pursuant to this Agreement, except as otherwise expressly provided herein. The Base Management Fee shall be the percentage of Gross Revenues shown on Schedule 1 for each Fiscal Year during the Term. 
 “Buildings” shall mean the buildings and improvements constituting that certain hotel more particularly described on Schedule
1 attached hereto and made a part hereof which is located on the Site. 
 “Business Day” shall mean any day other
than a Saturday, Sunday or legal holiday in the Commonwealth of Virginia. 
 “Competitive Set” shall mean the group
of hotels which are closest in geographical distance from the Hotel and which are generally within the same hotel market segment as the Hotel, as described in Schedule 1. If any such hotels, subsequent to the Effective Date, either changes
its chain affiliation or ceases to operate or otherwise ceases to reflect the general criteria set forth in the first sentence of this definition, Owner and Manager agree to mutually, reasonably and in good faith, discuss appropriate changes to the
foregoing list of the hotels that shall comprise the Competitive Set. 
 “CPI”, shall mean the Consumer Price Index
for All Urban Consumers (CPI-U) for the U.S. City Average for All Items (1982-1984=100) published by the Bureau of Labor Statistics, United States Department of Labor; provided, however, that if such index ceases to be published or is converted to a
different standard or is otherwise revised, the index shall be adjusted by any then applicable conversion factor, or failing that, by any published price or cost indices or other published data which are as comparable as possible to the Index prior
to its termination or revision. 
 “Cure Payment” shall have the meaning set forth in Section 2.02.A.

  

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 “Deductions” shall have the meaning ascribed to it in the definition of Operating
Profit. 
 “Default” shall mean the occurrence of any event which, with the lapse of time, the giving of notice or
both, would constitute an Event of Default. 
 “Effective Date” shall have the meaning ascribed to it in the
Preamble. 
 “Environmental Laws” shall have the meaning ascribed to it in Section 10.08. 
 “Event of Default” shall have the meaning ascribed to it in Section 8.01. 
 “FF&E” shall mean furniture, furnishings, fixtures, soft goods, case goods, signage, audio-visual equipment, kitchen
appliances, vehicles, carpeting and equipment, including front desk and back-of-the-house computer equipment, that meet Owner’s capitalization policy consistent with GAAP , but shall not include Fixed Asset Supplies or Software. 
 “FF&E Lease” means a lease of any property other than real property. 
 “Fiscal Year” shall mean a calendar year commencing on January 1 and ending on December 31; provided, however, the
first fiscal year commences as of the Effective Date and ends at midnight on December 31 of that same calendar year. A partial Fiscal Year between the end of the last full Fiscal Year and the Termination of this Agreement shall also constitute
a separate Fiscal Year. If Fiscal Year is changed in the future, appropriate adjustment to this Agreement’s reporting and accounting procedures shall be made; provided, however, that no such change or adjustment shall alter the term of this
Agreement or in any way reduce the distributions of Operating Profit or other payments due hereunder. 
 “Fixed Asset
Supplies” shall mean items included within “Property and Equipment” under the Uniform System of Accounts including, but not limited to, linen, china, glassware, tableware, uniforms, and similar items, whether used in
connection with public space or Guest Rooms. 
 “Foreclosure” shall mean any exercise of the remedies available to a
Mortgagee, upon a default under the Mortgage held by such Mortgagee, which results in a transfer of title to or possession of the Hotel. The term “foreclosure” shall include, without limitation, any one or more of the following events, if
they occur in connection with a default under a Mortgage: (i) a transfer by judicial or non-judicial foreclosure; (ii) a transfer by deed in lieu of foreclosure; (iii) the appointment by a court of a receiver to assume possession of
the Hotel; (iv) a transfer of either ownership or control of the Owner, by exercise of a stock pledge or otherwise; (vi) if title to the Hotel is held by a tenant under a ground lease, an assignment of the tenant’s interest in such
ground lease or (vi) any similar judicial or non-judicial exercise of the remedies held by the Mortgagee resulting in actual ownership or control of the Hotel by such Mortgagee or its designee. 
  

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

 “Hazardous Materials” shall have the meaning ascribed to it in Section 10.08. 
 “Hotel” shall mean the Site together with the Buildings and all other improvements construed or to be constructed on the Site
pursuant to this Agreement, all FF&E and Fixed Asset Supplies installed or located on the Site or in the Buildings, and all easements or other appurtenant rights thereto. 
 “Hotel Lease” shall have the meaning ascribed to it in Recital B. 
 “Hotel Purchase Contract” shall have the meaning ascribed to it in Schedule 1. 
 “Impact Fees” shall have the meaning ascribed to it in Section 4.07.A. 
 “Impositions” shall have the meaning ascribed to it in Section 4.07. 
 “Incentive Management Fee” shall mean an amount payable to Manager, pursuant to Section 3.01 and Section 4.01, that is
set forth in Schedule 1 of Available Cash Flow in any Fiscal Year (or portion thereof) after payment to Owner of Owner’s Priority. 
 “Initial Term” shall have the meaning ascribed to it in Section 2.01. 
  

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 “Inventories” shall mean “Inventories” as defined in the Uniform System
of Accounts, such as, but not limited to, provisions in storerooms, refrigerators, pantries and kitchens; beverages in wine cellars and bars; other merchandise intended for sale; fuel; mechanical supplies; stationery; and other expensed supplies and
similar items. 
 “Landlord” shall mean the party identified as “Landlord” in Schedule 1. 
 “Legal Requirement(s)” shall mean any federal, state or local law, code, rule, ordinance, regulation or order of any governmental
authority or agency having jurisdiction over the business or operation of the Hotel or the matters which are the subject of this Agreement, including, without limitation, the following: (i) any building, zoning or use laws, ordinances,
regulations or orders; and (ii) Environmental Laws. 
 “Litigation” shall mean: (i) any cause of action
(including, without limitation, bankruptcy or other debtor/creditor proceedings) commenced in a federal, state or local court; or (ii) any claim brought before an administrative agency or body (for example, without limitation, employment
discrimination claims). 
 “Manager” shall have the meaning ascribed to it in the Preamble hereto or shall mean any
permitted successor or assign, as applicable. 
 “Manager’s Liability” and “Manager’s
Liabilities” shall have the meanings ascribed to such terms in Section 4.03.B. 
 “Mortgage” shall
mean any mortgage, deed of trust or similar security instrument creating a lien on the Hotel. 
 “Mortgagee” shall
mean the holder of any Mortgage encumbering the Hotel or the Site. 
 “Operating Accounts” shall have the meaning
ascribed to it in Section 4.03.A. 
 “Operating Loss” shall mean a negative Operating Profit. 
 “Operating Profit” shall mean the excess of Gross Revenues over the following deductions (“Deductions”)
incurred by Manager, on behalf of Owner, in operating the Hotel: 
 1. the cost of sales, including, without limitation, compensation, fringe
benefits, payroll taxes and other costs related to Hotel employees, provided that the foregoing costs shall not include salaries and other employee costs of executive personnel of Manager who do not work at the Hotel on a regular basis, which
salaries and costs shall be Manager’s Liability; 
 2. departmental expenses incurred at departments within the Hotel; administrative
and general expenses; the cost of marketing incurred by the Hotel; advertising and business promotion incurred by the Hotel; heat, light, and power; computer line charges; and routine repairs, maintenance and minor alterations treated as Deductions
under Section 5.01; 
  

 36 

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

4. a reasonable reserve for uncollectible accounts receivable as reasonably determined by Manager with the concurrence of Owner; 
 5. all costs and fees of independent professionals or other third parties who are retained by Manager with the concurrence of Owner to perform services
required or permitted hereunder; 
 6. all costs and fees of technical consultants and operational experts who are retained or employed by
Manager with the concurrence of Owner for specialized services (including, without limitation, quality assurance inspectors) and the reasonable cost of attendance by employees of the Hotel at training and manpower development programs sponsored by
Manager, provided Owner has approved attendance at programs and the cost thereof; 
 7. the Base Management Fee; 
 8. all royalty, marketing fund, reservation, communication support, property management system and other similar fees payable to the Franchisor under the
Franchise Agreement; 
 9. insurance costs and expenses as provided in Section 6.04; 
 10. taxes, if any, payable by or assessed against Manager, Owner or Landlord related to this Agreement or to Manager’s operation of the Hotel and
Impositions (exclusive of Manager’s, Owner’s and Landlord’s income taxes or franchise taxes and any other similar taxes payable by Manager and all other taxes, assessments and payments excluded from the definition of Impositions);

 11. transfers to the Reserve required pursuant to Section 5.02; 
 12. any costs paid by Manager pursuant to the Franchise Agreement; 
 13. payments pursuant to FF&E leases or other forms of financing obtained for the FF&E located in or connected with the Hotel; and 
 14. to the extent approved in advance by Owner, such other costs and expenses incurred by Manager as are specifically provided for elsewhere in this Agreement or are otherwise reasonably necessary for the proper and
efficient operation of the Hotel, including without limitation, travel expenses or supervisory personnel of Manager incurred in connection with managing the Hotel. 
  

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 The term “Deductions” shall not include (a) debt service payments pursuant
to a Mortgage or (b) rental payments under any Hotel Lease, all of which shall be paid by Owner from its own funds. 
 “Owner” shall have the meaning ascribed to it in the Preamble or shall mean any successor or assign, as applicable. 
 “Owner’s Priority” shall mean the amount shown as Owner’s Priority on Schedule 1 attached hereto and made a part hereof, per Fiscal Year (prorated for any partial Fiscal Year).
Owner’s Priority for each Fiscal Year shall be paid to the extent of Operating Profit available in such Fiscal Year, as provided in Section 3.02 of this Agreement. In the event of any capital expenditures made with respect to the Hotel
after the date of this Agreement that are in excess of the Reserve, the Owner’s Priority shall be increased (but not decreased) for the remaining portion of the Fiscal Year in which such capital expenditures are made and all subsequent Fiscal
Years so as to equal a twelve percent (12%) return on an amount equal to the sum of (i) the purchase price paid by Owner for the Hotel plus (ii) closing costs (including, without limitation, defeasance costs but excluding any
brokerage fees or expenses incurred by Owner’s parent in connection with its public equity raise) plus (iii) such excess capital expenditures. 
 “Performance Termination Period” shall have the meaning ascribed to it in Schedule 1. 
 “Performance Termination Threshhold” shall have the meaning ascribed thereto in Schedule 1. 
 “Person” means an individual (and the heirs, executors, administrators, or other legal representatives of an individual), a partnership, a corporation, limited liability company, a government or any department or
agency thereof, a trustee, a trust and any unincorporated organization. 
 “Prime Rate” shall mean the “prime
rate” of interest announced from time to time in the “Money Rates” section of The Wall Street Journal. 
 “Prudent Industry Practice” shall mean the customary practices of the hotel industry in the United States for hotels comparable to the Hotel. To the extent inconsistent with the requirements of the Franchise
Agreement, such practices shall be conformed to the requirements of the Franchise Agreement for purposes of this Agreement. 
 “Quarterly Operating Statement” shall have the meaning set forth in Section 4.0l.B. 
 “Reserve” shall have the meaning ascribed to it in Section 5.02A. 
 “Revenue Data
Publication” shall mean Smith’s STAR Report, a monthly publication distributed by Smith Travel Research, Inc. of Gallatin, Tennessee, or an alternative source, reasonably satisfactory to both parties, of data regarding the Revenue
Per Available Room of hotels in the general trade area of the Hotel. If such Smith’s STAR Report is discontinued in the 

  

 38 

 
future, or ceases (in the reasonable opinion of either Owner or Manager) to be a satisfactory source of data regarding the Revenue Per Available Room of
various hotels in the general trade area of the Hotel, Owner and Manager shall select an alternative source for such data. If the parties fail to agree on such alternative source within a reasonable period of time, either party may terminate this
Agreement upon sixty (60) days prior written notice to the other party. 
 “Revenue Index” shall mean that
fraction that is equal to (a) the Revenue Per Available Room for the Hotel divided by (b) the average Revenue Per Available Room for the hotels in the Competitive Set, as set forth in the Revenue Data Publication. Appropriate adjustments
to the Revenue Index, acceptable to Owner in its reasonable discretion, shall be made in the event of a major renovation of the Hotel. 
 “Revenue Index Threshold” shall mean the number shown on Schedule 1 attached hereto and made a part hereof. However, if the entry of a new hotel into the Competitive Set (or the removal of a hotel from the
Competitive Set) causes significant variations in the Revenue Index that do not reflect the Hotel’s true position in the relevant market, appropriate adjustments shall be made to the Revenue Index Threshold by mutual consent of Owner and
Manager each acting in good faith. 
 “Revenue Per Available Room” shall mean (i) the term “revenue per
available room” as defined by the Revenue Data Publication, or (ii) if the Revenue Data Publication is no longer being used (as more particularly set forth in the definition of “Revenue Data Publication”), the aggregate gross
room revenues of the hotel in question for a given period of time divided by the total room nights for such period. If clause (ii) of the preceding sentence is being used, a “room” shall be an available hotel guestroom that is keyed
as a single unit. 
 “Routine Capital Expenditures” shall mean certain routine, non-major expenditures which are
classified as “capital expenditures” under generally-accepted accounting principles, and which will be funded from the Reserve (pursuant to Section 5.02). Routine Capital Expenditures consist of the following types of expenditures:
exterior and interior painting; resurfacing building walls and floors; resurfacing parking areas; and miscellaneous similar expenditures. Routine Capital Expenditures are not non-routine capital expenditures or major repairs or major alterations or
improvements. 
 “Sale of the Hotel” shall mean any sale, assignment, transfer or other disposition, for value or
otherwise, voluntary or involuntary, of the Site and/or the Hotel or any interest therein, in whole or part. For purposes of this Agreement, a Sale of the Hotel shall also include a lease (or sublease) of all or substantially all of the Hotel or
Site or any interest therein. Sale of the Hotel shall exclude related party transactions with Affiliates of Owner and shall also exclude granting of security interests in the Hotel or any part thereof in connection with financing. 
 “SEC Filing Period” shall mean such period of time (a) (not to exceed thirty (30) days) after the close of each Fiscal
Year within which Owner must receive the Annual Operating Statement from Manager with respect to such Fiscal Year and (b) (not to exceed twenty (20) days) after the close of each calendar quarter of a Fiscal Year within which Owner must
receive the Quarterly Operating Statement from Manager with respect to such quarter, in each case in order for Owner to have a reasonable period of time within which to prepare and make all required filings with the Securities and Exchange
Commission and other applicable governmental agencies. 
  

 39 

 “Site” shall mean the real property described on Exhibit A attached hereto
and made a part hereof. 
 “Software” shall mean all computer software and accompanying documentation (including all
future upgrades, enhancements, additions, substitutions and modifications thereof), other than computer software which is generally commercially available, which are used by Manager in connection with operating or otherwise providing services to the
Hotel. 
 “Specially Designated National or Blocked Person” shall mean (i) a person designated by the U.S.
Department of Treasury’s Office of Foreign Assets Control from time to time as a “specially designated national or blocked person” or similar status, (ii) a person described in Section 1 of U.S. Executive Order 13224 issued
on September 23, 2001, or (iii) a person otherwise identified by government or legal authority as a person with whom Manager or its Affiliates are prohibited from transacting business. Currently, a listing of such designations and the text
of the Executive Order are published under the internet website address www.ustreas.gov/offices/enforcement/ofac. 
 “Subordination Agreement” shall have the meaning ascribed to it in Section 7.04. 
 “Subsequent Owners” shall have the meaning ascribed to it in Section 7.04. 
 “System” shall have the meaning set forth in the Franchise Agreement. 
 “System
Standards” shall mean any one or more (as the context requires) of the following three (3) categories of standards: (i) operational standards (for example, services offered to guests, quality of food and beverages,
cleanliness, staffing and employee compensation and benefits, frequent traveler programs and other similar programs; (ii) physical standards (for example, quality of the hotel, FF&E, and Fixed Asset Supplies, frequency of FF&E
replacements, etc.); and (iii) technology standards (for example, those relating to software, hardware, telecommunications, systems security and information technology); each of such standards shall be the standard which is generally prevailing
or in the process of being implemented at other hotels in the System represented by the Franchise Agreement. 
 “Term” shall have the meaning ascribed to it in Section 2.01. 
 “Termination”
shall mean the expiration or sooner cessation of this Agreement. 
 “Trade Name” shall mean any name, whether
informal (such as a fictitious name or d/b/a) or formal (such as the full legal name of a corporation or partnership) which is used to identify an entity. 
 “Uniform System of Accounts” shall mean the Uniform System of Accounts for the Lodging Industry, Ninth Revised Edition, 1996, as published by the Educational Institute of the American
Hotel & Motel Association, as revised. 
  

 40 

 “WARN Act” shall mean the Worker Adjustment and Retraining Notification Act, 29
U.S.C. 2101 et seq. 
 “Working Capital” shall mean funds that are used in the day-to-day operation of the
business of the Hotel, including, without limitation, amounts sufficient for the maintenance of change and petty cash funds, amounts deposited in operating bank accounts, receivables, amounts deposited in payroll accounts, prepaid expenses and funds
required to maintain Inventories, less accounts payable and accrued current liabilities. 
 ARTICLE XII 
 SUPPLEMENTAL PROVISIONS 
 All of the
terms, conditions, representations, warranties, covenants and other provisions, if any, set forth in the supplemental provisions attached hereto as Schedule 2 (the “Supplemental Provisions”) are hereby incorporated into this
Agreement and shall be considered a part hereof. In the event of any conflict or inconsistency between the Supplemental Provisions and the other provisions of this Agreement, the Supplemental Provisions shall control. 
  

 41 

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

			
	OWNER:
	
	APPLE EIGHT HOSPITALITY MANAGEMENT, INC.,
	a Virginia corporation
		
	By:	 	 /s/ Justin Knight

	Name:	 	Justin Knight
	Title:	 	President
	
	MANAGER:
	
	NEWPORT GREENSBORO MANAGEMENT, LLC,
	a Virginia limited liability company
		
	By:	 	 /s/ Michael L. Pleninger

	Name:	 	Michael L. Pleninger
	Title:	 	Manager

 SCHEDULE 1 
 HOTEL SPECIFIC DATA 
  

	1.	Description of Hotel: That certain hotel known as the SpringHill Suites Greensboro, located at 6006 Landmark Center Blvd., Greensboro, North Carolina, containing 82 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: 82 

  

	 	b.	Other Improvements/Amenities: 225 sq. ft. meeting room space; full service business center; indoor swimming pool; whirlpool; exercise room; wireless high speed internet
access. 

  

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

  

	3.	Competitive Set: 

 Holiday Inn Express Greensboro

 Courtyard Greensboro 
 Amerisuites Greensboro Wendover 
 Hampton Inn Greensboro Airport 
 La Quinta Inn & Suites Greensboro 
 Wingate by Wynhdam Greensboro 
  

	4.	Landlord: Apple Eight Hospitality Ownership, Inc. 

  

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

  

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

 b. Owner’s Priority: $984,000.00 (12% of Purchase Price plus closing costs [$8,200,000]) 
  

	7.	a. Performance Termination Threshold: $820,000.00 (10% of Purchase Price plus closing costs [8,200,000]); 

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

	8.	Revenue Index Threshold: 100% 

  

 2 

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

  

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

  

	11.	State in which Manager is Organized: Virginia 

  

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

  

	13.	Other Hotels: None 

  

 3 

 SCHEDULE 2 
 1. Franchise Agreement. During the Term of this Agreement, subject to the availability of adequate funds, Manager shall perform all of the obligations of Owner as “Franchisee” under the Franchise
Agreement to the extent such obligations relate to the management or operation of the Hotel, including, without limitation, the obligations of “Franchisee” under Sections XIII (Accounts and Receipts) and XIV (Insurance) of the Franchise
Agreement, and Manager shall not commit any act or omit to take any action that would cause a default by the Franchisee under the Franchise Agreement. In the event of any inconsistency between the provisions of this Agreement and the provisions of
the Franchise Agreement, the provisions of the Franchise Agreement shall prevail. Manager shall send promptly to Owner any and all notices that Manager receives from the Franchisor with respect to the Hotel or the Franchise Agreement and shall keep
Owner fully informed with respect to all matters that come to Manager’s attention under the Franchise Agreement. Likewise, Owner shall send promptly to Manager any and all notices that Owner receives from the Franchisor with respect to the
Hotel or the Franchise Agreement that would require action or compliance on the part of Manager. Notwithstanding the foregoing, Manager shall not have the right to grant any consent, approval or other right reserved to the Franchisee under the
Franchise Agreement or to make any decision or agreement on behalf of Owner under the Franchise Agreement. In the event the Franchise Agreement is terminated for any reason, this Agreement shall also terminate effective as of the date of termination
of the Franchise Agreement, unless the parties hereto agree otherwise. 
 [FOR HILTON BRANDS:] During the Term of this Agreement, subject to the availability
of adequate funds, Manager shall perform all of the obligations of Owner as “Licensee” under the Franchise Agreement to the extent such obligations relate to the management or operation of the Hotel, including, without limitation, the
obligations of “Licensee” under Paragraphs 6, 7 and 8 of the Franchise Agreement, and Manager shall not commit any act or omit to take any action that would cause a default by the Licensee under the Franchise Agreement. In the event of any
inconsistency between the provisions of this Agreement and the provisions of the Franchise Agreement, the provisions of the Franchise Agreement shall prevail. Manager shall send promptly to Owner any and all notices that Manager receives from the
Franchisor with respect to the Hotel or the Franchise Agreement and shall keep Owner fully informed with respect to all matters that come to Manager’s attention under the Franchise Agreement. Notwithstanding the foregoing, Manager shall not
have the right to grant any consent, approval or other right reserved to the Licensee under the Franchise Agreement or to make any decision or agreement on behalf of Owner under the Franchise Agreement. In the event the Franchise Agreement is
terminated for any reason, this Agreement shall also terminate effective as of the date of termination of the Franchise Agreement, unless the parties hereto agree otherwise. 
 2. Accounting Period. For purposes of this Agreement, the term “Accounting Periods” shall mean a calendar month, except that the first Accounting Period shall begin on the Effective Date and shall end
on the last day of the calendar month in which the Effective Date occurs. 
  

 4 

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

 5 

 EXHIBIT A 
 LEGAL DESCRIPTION OF SITE 
 LOCATED IN GUILFORD COUNTY, NORTH CAROLINA AND BEING: 
 All of that tract of land containing approximately 1.57 acres, more particularly shown as Lot 33 Revised on the “Revised Final Record Map of Lots 33, 34 and 35
Wendover South Associates,” Prepared by F. Donald Lawrence & Associates, P.A., recorded in Plat Book 146, Page 32, Guilford County Registry, to which plat reference is made for a more particular description of Lot 33 Revised.

  

 6

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