Document:

Exhibit 10.18

 Exhibit 10.18 
 Twinsburg, OH (Hilton Garden Inn) 
 8971 Wilcox Dr. 
 Twinsburg, Ohio 44087 
 MANAGEMENT AGREEMENT 
 by and between 
 GATEWAY HOSPITALITY GROUP,
INC. 
 as “MANAGER” 
 and 
 APPLE NINE HOSPITALITY MANAGEMENT, INC. 
 as “OWNER” 
 Dated as of October 6, 2008 

 Exhibit 10.18 
 Twinsburg, OH (Hilton Garden Inn) 
 8971 Wilcox Dr. 
 Twinsburg, Ohio 44087 
 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	 	6
			
	2.01.	  	Term	 	6
			
	2.02.	  	Performance Termination	 	7
			
	ARTICLE III	  	        COMPENSATION OF MANAGER	 	8
			
	3.01.	  	Management Fees	 	8
			
	3.02.	  	Operating Profit	 	8
			
	ARTICLE IV	  	        ACCOUNTING, BOOKKEEPING AND BANK ACCOUNTS	 	9
			
	4.01.	  	Accounting, Distributions and Annual Reconciliation	 	9
			
	4.02.	  	Books and Records	 	10
			
	4.03.	  	Accounts, Expenditures	 	10
			
	4.04.	  	Annual Operating Projection	 	11
			
	4.05.	  	Working Capital	 	11
			
	4.06.	  	Fixed Asset Supplies	 	12
			
	4.07.	  	Real Estate and Personal Property Taxes	 	12
			
	4.08.	  	Sarbanes-Oxley Certification	 	13
			
	ARTICLE V	  	        REPAIRS, MAINTENANCE AND REPLACEMENTS	 	14
			
	5.01.	  	Repairs and Maintenance to be Paid from Gross Revenues	 	14
			
	5.02.	  	Repairs, Maintenance and Equipment Replacements to be Paid from Reserve	 	14

  

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	ARTICLE VI	  	        INSURANCE	 	15
			
	6.01.	  	Property Insurance	 	15
			
	6.02.	  	Operational Insurance	 	16
			
	6.03.	  	Coverage	 	17
			
	6.04.	  	Costs and Expenses	 	17
			
	6.05.	  	Owner’s Right to Provide Insurance	 	18
			
	ARTICLE VII	  	        DAMAGE AND REPAIR	 	18
			
	7.01.	  	Damage and Repair	 	18
			
	7.02.	  	Condemnation	 	18
			
	7.03.	  	Subordination to Mortgage	 	19
			
	7.04.	  	No Covenants, Conditions or Restrictions	 	19
			
	7.05.	  	Liens; Credit	 	20
			
	ARTICLE VIII	  	        DEFAULTS	 	20
			
	8.01.	  	Events of Default	 	20
			
	8.02.	  	Remedies	 	21
			
	8.03.	  	Additional Remedies	 	21
			
	ARTICLE IX	  	        ASSIGNMENT AND SALE	 	22
			
	9.01.	  	Assignment	 	22
			
	9.02.	  	Sale of the Hotel	 	22
			
	ARTICLE X	  	        MISCELLANEOUS	 	23
			
	10.01.	  	Right to Make Agreement	 	23
			
	10.02.	  	Consents and Cooperation	 	23
			
	10.03.	  	Relationship	 	23
			
	10.04.	  	Applicable Law; Jurisdiction	 	24
			
	10.05.	  	Recordation	 	24
			
	10.06.	  	Headings	 	24
			
	10.07.	  	Notices	 	24
			
	10.08.	  	Environmental Matters	 	25
			
	10.09.	  	Confidentiality; Projections	 	26
			
	10.10.	  	Indemnification	 	27
			
	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	 	30
			
	10.17.	  	Affiliates	 	30
			
	10.18.	  	Blocked Persons or Entities	 	30
			
	10.19.	  	Restrictions on Operating the Hotel in Accordance with System Standards	 	31
			
	10.20.	  	Counterparts	 	31
			
	10.21.	  	Entire Agreement	 	31
			
	10.22.	  	Franchise Agreement	 	31
			
	10.23.	  	Operation of Other Hotels	 	32
			
	10.24.	  	Waiver of Jury Trial and Punitive Damages	 	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
	Schedule 3	  	-	  	Pending Claims
	Schedule 4	  	-	  	Service Contracts, Warranties, Leases and FF&E Leases
	Exhibit A	  	-	  	Legal Description of Site
	Exhibit B	  	-	  	FF&E Leases, Service Contracts and Leases

  

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 MANAGEMENT AGREEMENT 
 THIS MANAGEMENT AGREEMENT (“Agreement”) is executed as of the 6th day of October, 2008 (“Effective Date”), by APPLE NINE 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 GATEWAY HOSPITALITY GROUP, INC., an Ohio corporation
(“Manager”), with a mailing address at c/o Gateway Hospitality Group Inc., 8921 Canyon Falls Blvd., Ste 140, Twinsburg, Ohio 44087 
 A. The party identified as the “Landlord” in Schedule 1 attached hereto (“Landlord”) is the owner of the hotel identified in Schedule 1, as more particularly described
in the definition of “Hotel” in Section 11.01 hereof. 
 B. Landlord and Owner have entered into that certain
Hotel Lease Agreement dated as of the Effective Date (the “Hotel Lease”) pursuant to which Landlord leases the Hotel to Owner. 
 C. All capitalized terms used in this Agreement shall have the meaning set forth in Section 11.01 hereof. 
 D. Owner desires to engage Manager to manage and operate the Hotel, and Manager desires to accept such engagement, upon the terms and conditions set forth in this Agreement. 
 NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Owner and Manager agree as follows: 
 ARTICLE I 
 APPOINTMENT OF MANAGER 
 1.01.
Appointment. 
 Owner hereby appoints and employs Manager as Owner’s exclusive independent contractor to supervise, direct and
control the management and operation of the Hotel throughout the Term. Manager accepts said appointment and agrees to manage the Hotel during the Term in accordance with the terms and conditions of this Agreement. 
 1.02. Management of the Hotel. 
 A.
Manager shall manage the Hotel, including, without limitation, performance of the following functions, in accordance with Prudent Industry Practices, the provisions of this Agreement and all standards imposed by the Franchise Agreement (provided
that in all cases, except as otherwise specifically set forth in this Agreement, the costs and expenses of performing such functions shall be Deductions): 
 1. Recruit, employ, relocate, manage, supervise, direct and discharge all employees at the Hotel and maintain adequate staff, consistent with Prudent Industry Practices, to carry out its duties under this Agreement.

 2. Establish prices, rates and charges for services provided in the Hotel, including Guest Room rates.

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

 4. Make payments on accounts payable and collect accounts receivable. 
 5. Procure (for Owner) all Inventories and replace Fixed Asset Supplies and otherwise incur customary and reasonable expenses in the operation of the
Hotel, subject to the approved Annual Operating Projection. 
 6. Prepare and deliver Annual Operating Projections, Accounting Period
Statements, Annual Operating Statements, Building Estimates, Repairs and Equipment Estimates and such other information as is required by this Agreement. 
 7. Plan, execute and supervise repairs and maintenance at the Hotel. 
 8. Obtain the insurance required to
be obtained by Manager pursuant to Article VI of this Agreement and provide or cause to be provided all risk management services related thereto, subject to the provisions of Section 6.05. 
 9. Obtain and keep in full force and effect, either in its own name or in Owner’s or Owner’s affiliate’s name, as may be required by
applicable law, any and all licenses (including, without limitation, liquor licenses which shall be maintained in the name of Manager to the extent permitted by law) and permits to the extent same is within the control of Manager (or, if same is not
within the control of Manager, Manager shall use all due diligence and best 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. Subject to
paragraph B below, 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 is approved in advance by
Owner. 
  

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

  

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training all employees at the Hotel, and, generally, establishing and maintaining all policies relating to employment; provided, however, that (i) Owner
shall have the right to 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. Manager shall be solely responsible and liable for all acts or omissions of the personnel employed
at the Hotel and all persons managing such employees. 
 1.04. Owner’s Right to Inspect. 
 Owner, its representatives, employees, agents, Affiliates and Mortgagees shall have access to the Hotel at any and all reasonable times for the purpose of
inspection, exercising any of its rights under this Agreement or showing the Hotel to prospective purchasers, tenants or Mortgagees and at any time in case of an emergency. 
 1.05. Regular Meetings. 
 At
Owner’s request, Owner and Manager shall have meetings at the Hotel and at mutually convenient times. Manager shall be represented at such meetings by the General Manager of the Hotel and such other personnel as the General Manager and/or Owner
may deem appropriate. The purpose of the meetings shall be, inter alia, to discuss the performance of the Hotel and other related issues, including any variations from the Annual Operating Projection for the preceding quarter.

 1.06. System Standards 
 Subject to the availability of adequate funds, Manager shall take such actions consistent with this Agreement as are necessary for the Hotel to comply with the System Standards, and Manager shall operate the Hotel so that the Hotel will at
all times comply with System Standards. 
 1.07. Limitations on Manager’s Authority 
 Manager shall not, without Owner’s prior written approval, enter into any contract or FF&E Lease if (i) the fair market value of the
contract or 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 

  

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leased; (iv) such contract or FF&E Lease is with an Affiliate of Manager or is on payment terms (including the amounts and schedule of payments)
that would be materially more favorable to the lessor thereof than payment terms customary under Prudent Industry Practices for leases of similar FF&E; or (v) such contract or 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 corporation 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 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. 
 C. Property Agreements. A complete list of all FF&E Leases, Service Contracts and Leases (as such terms are defined in the Hotel Purchase Contract) entered into by or on behalf of Manager used in or
otherwise relating to the operation and business of the Hotel is attached hereto as Exhibit B. There are no leases, license agreements, leasing agent’s agreements, equipment leases, building service agreements, maintenance contracts,
suppliers contracts, warranty contracts, operating agreements, or other agreements (i) to which Manager is a party or an assignee, or (ii) binding upon the Hotel, relating to the ownership, occupancy, operation, management or maintenance
of the Hotel, except for those Service Contracts, Leases, Warranties and FF&E Leases disclosed on Exhibit B. The Service Contracts, Leases, Warranties and FF&E Leases disclosed on Exhibit B are in full force and effect, and no
default has occurred and is continuing thereunder and no circumstances exist which, with the giving of notice, the lapse of time or both, would constitute such a default. No party has any right or option to acquire the Hotel or any portion thereof,
other than Buyer. 
 D. Pending Claims. Except as disclosed in Schedule 3 attached hereto, Manager has not received any
written notice of: (i) any claims, demands, litigation, proceedings or governmental investigations pending or threatened against Manager or its Affiliates or related to the business or assets of the Hotel, (ii) any special assessments or
extraordinary taxes, and (iii) any pending or threatened condemnation or eminent domain proceeding which would affect the Hotel or any part thereof. To the best of Manager’s knowledge, Except as disclosed in Schedule 3

  

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attached hereto, there are no: pending arbitration proceedings or unsatisfied arbitration awards, or judicial proceedings or orders respecting awards,
which might become a lien on the Hotel or any portion thereof, pending unfair labor practice charges or complaints, unsatisfied unfair labor practice orders or judicial proceedings or orders with respect thereto, pending charges or complaints with
or by city, state or federal civil or human rights agencies, unremedied orders by such agencies or judicial proceedings or orders with respect to obligations under city, state or federal civil or human rights or antidiscrimination laws or executive
orders affecting the Hotel, or other pending, actual or threatened litigation claims, charges, complaints, petitions or unsatisfied orders by or before any administrative agency or court which affect the Hotel or might become a lien on the Hotel.

 E. Licenses, Permits and Approvals. The Hotel complies with all applicable licenses, permits and approvals and federal, state or
local statutes, laws, ordinances, rules, regulations, requirements and codes including, without limitation, those regarding zoning, land use, building, fire, health, safety, environmental, subdivision, water quality, sanitation controls and the
Americans with Disabilities Act, and similar rules and regulations relating and/or applicable to the ownership, use and operation of the Hotel as it is now operated. To the best of Manager’s knowledge, Manager has received all licenses, permits
and approvals required or needed for the lawful conduct, occupancy and operation of the business of the Hotel, and each license and permit is in full force and effect. 
 F. Employees. All employees employed at the Hotel were employees of the previous owner of the Hotel and upon sale of the Hotel to Owner became employees of Manager or its affiliate. There are no (i) unions
organized at the Hotel, (ii) union organizing attempts, strikes, organized work stoppages or slow downs, or any other labor disputes pending or threatened with respect to any of the employees at the Hotel, or (iii) collective bargaining or
other labor agreements to which Manager or the Manager or the Hotel is bound with respect to any employees employed at the Hotel. 
 G.
Operations. The Hotel has at all times been operated by Manager in all material respects in accordance with all applicable laws, rules, regulations, ordinances and codes. 
 ARTICLE II 
 TERM 
 2.01. Term. 
 The
“Term” of this Agreement shall begin on the Effective Date and shall continue until the expiration date identified in Schedule 1. Notwithstanding the foregoing, Manager or Owner shall have the option to terminate this
Agreement at any time, with or without cause, by giving the other party not less than ninety (90) days prior written notice of its election to terminate. 
  

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 2.02. Performance Termination. 
 A. Owner shall have the option to terminate this Agreement after any twelve (12) consecutive Accounting Periods (the “Performance Termination
Period”) with respect to which the following occurs: 
 1. At any time during the first three (3) years of the Term: 

 

	 	a.	The Operating Profit for the Performance Termination Period is less than 90% of the Performance Termination Threshold; and 

  

	 	b.	The Revenue Index of the Hotel during the Performance Termination Period is less than 100% of the Revenue Index Threshold for such Performance Termination Period.

 2. At any time following the first three (3) years of the Term: 
  

	 	a.	The Operating Profit for the Performance Termination Period is less than the Performance Termination Threshold; or 

  

	 	b.	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. 
  

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 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 (including, without
limitation, all accrued and unpaid Owner’s Priority) as provided in Section 3.02 below. 
 3.02. Operating Profit.

 A. Operating Profit, to the extent available, shall be distributed to Owner and to Manager in the following order of priority, except as
otherwise provided in this Agreement: 
 1. An amount up to the maximum amount of Owner’s Priority shall be paid to Owner; 
 2. The Incentive Management Fee shall be paid to Manager; and 
 3. Any remaining balance of Operating Profit shall be paid to Owner. 
 Owner’s Priority shall be
cumulative from one Fiscal Year to the next, and to the extent the maximum amount of Owner’s Priority is unpaid in any Fiscal Year, such unpaid amount shall accrue and be payable in any subsequent Fiscal Year. Notwithstanding anything in this
Agreement to the contrary, Manager acknowledges and agrees that Incentive Management Fees are only payable (i) annually within thirty (30) days after Owner’s receipt and acceptance of the Annual Operating Statement, (ii) to the
extent of available Operating Profit after payment in full of Owner’s Priority and any accumulated Owner’s Priority and (iii) in no event shall Incentive Management Fees accrue or be deemed to accrue. 
 B. To the extent of available Operating Profit with respect to each Accounting Period, Manager shall distribute a prorated portion of the Owner’s
Priority (including any accrued and unpaid Owner’s Priority) to Owner for each such Accounting Period in accordance with Section 4.01. Any Incentive Management Fee payable to Manager will be payable within thirty (30) days after
Owner’s receipt and acceptance of the Annual Operating Statement. 
  

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 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 certifying that, to the best of his or her knowledge, such Annual Operating Statement is true and correct and (2) a statement (the “Quarterly Operating Statement”) in reasonable
detail summarizing the operations of the Hotel for the immediately preceding calendar quarter and a certificate of Manager’s chief accounting officer certifying that, to the best of his or her knowledge, such 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. 
 C. To the extent there is an Operating Loss for any Accounting Period, unless such loss was due to a force majeure event, no Base Management Fee or Incentive Management Fee shall be paid to or retained from
Gross Revenues by Manager. Any Base Management Fee that would have been payable to Manager had there been an Operating Profit for such Accounting Period shall accrue and shall be payable to Manager to the extent of, and shall reduce, any Incentive
Management Fee payable to Manager in respect of subsequent Accounting Periods. In no event shall Incentive Management Fees accrue, nor shall any Incentive Management Fee be payable to Manager in respect of any Accounting Period (i) as to which
there is an Operating Loss or (ii) as to which accrued Base Management Fees are payable to Manager or accrued Owner’s Priority is payable to Owner. 
 To the extent there is an Operating Loss for any Accounting Period, additional funds in the amount of any such Operating Loss (other than the amount of any Base Management Fee) shall be provided by Owner within thirty
(30) days after Manager has delivered written notice thereof to Owner. If Owner does not fund such Operating Loss within the thirty (30) day time period, Manager shall have the right (without affecting Manager’s other remedies under
this 

  

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Agreement) to withdraw an amount to cover such Operating Loss from future distributions of funds otherwise due to Owner. In the event an Operating Loss
occurs in respect of a Fiscal Year, either Owner or Manager may elect to terminate this Agreement. In no event shall Manager be obligated to invest its own funds to cover any Operating Loss. 
 4.02. Books and Records. 
 Books of
control and account pertaining to operations at the Hotel shall be kept on the accrual basis and in all material respects in accordance with GAAP. Owner may at reasonable intervals during Manager’s normal business hours examine such records. If
Owner desires to audit, examine or review the Annual Operating Statement, Owner shall notify Manager in writing within sixty (60) days after receipt of such Annual Operating Statement of its intention to audit and begin such audit no sooner
than ten (10) days after Manager’s receipt of such notice. Owner shall use reasonable efforts to complete such audit within one hundred twenty (120) days after commencement thereof. If Owner does not make such an audit, then such
Annual 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. 
 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 and either the Assistant General Manager or Accounting 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”). 
  

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 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 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. 
 The parties recognize that, as of the Effective Date, the level of Working Capital funds, which shall be held in the Operating Accounts, is reasonably
believed to be reasonably sufficient for the operations of the Hotel, subject at all times to seasonal differences and changes in circumstances after the Effective Date. Manager may from time to time during the Term request that Owner advance any
additional funds necessary to maintain Working Capital at levels reasonably determined by Manager (with the concurrence of Owner) to be necessary to satisfy the needs of the Hotel. In the event Owner and Manager are unable to agree upon the need for
and/or amount of additional Working Capital within thirty (30) days after Owner’s receipt of such written notice from Manager, Manager may increase the amount based on the CPI formula in Paragraph 4.04 above. If Owner and Manager agree
upon the need for and amount of 

  

 11 

 
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 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 

  

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(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 of Manager, in a form approved by Manager’s accounting firm, certifying that, to his or her knowledge, the information contained in the Accounting
Period Statements for the Accounting Periods contained within the applicable Fiscal Year or quarter are true and correct in all material respects, subject to final adjustment based on the annual review conducted by Manager in preparing the Annual
Operating Statement. Owner shall submit such request in writing, along with the date by which such certificate is to be delivered, not less than five (5) business days prior to the requested delivery date, and Manager shall deliver the
certificate by the requested date or, if later, within five (5) business days after Manager’s receipt of Owner’s request. 
 B. In connection with Owner’s or its Affiliates’ certifications under Section 404 (“Section 404”) of the Sarbanes-Oxley Act of 2002, Owner or such Affiliate shall have the right, at its option:

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

  

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 Manager shall provide Owner’s or such Affiliates’ independent auditors access to Manager’s
books and records relating to the Hotel (including, without limitation, access to Manager’s premises) to conduct their audit of the testing performed pursuant to this Section 4.08. If Owner or such Affiliate determine such controls have
weaknesses which should be mentioned in Owner’s or such Affiliates’ report on internal controls under Section 404 or other certifications under the Sarbanes-Oxley Act of 2002, Manager shall use commercially reasonable efforts to
remedy and/or correct identified weaknesses within thirty (30) days after notice; provided, however, that in the event that Manager does not so remedy and/or correct such weaknesses within the applicable thirty (30) day cure period, Owner
shall be entitled to terminate this Agreement upon thirty (30) days prior notice to Manager. Manager shall be responsible for any costs of Owner or its auditors associated with correcting or retesting any such weaknesses. 
 ARTICLE V 
 REPAIRS, MAINTENANCE AND
REPLACEMENTS 
 5.01. Repairs and Maintenance to be Paid from Gross Revenues. 
 Subject to the availability of adequate funds, Manager shall maintain the Hotel in good repair and condition, comply with and abide by all applicable
Legal Requirements pertaining to its operation of the Hotel and shall make or cause to be made such routine maintenance, repairs and minor alterations as it determines are necessary for such purposes and as required pursuant to the terms of the
Franchise Agreement or by Owner. The phrase “routine maintenance, repairs, and minor alterations” as used in this Section 5.01 shall include only those which are normally expensed under generally accepted accounting
principles. The cost of such maintenance, repairs and alterations shall be paid from Gross Revenues (and not from the Reserve) and shall be treated as a Deduction. 
 5.02. Repairs, Maintenance and Equipment Replacements to be Paid from Reserve. 
 A. At Owner’s
option and request, a reserve account in the name of Owner (the “Reserve”) shall be established by Manager, in a bank or similar institution reasonably acceptable to both Manager and Owner, to cover the cost of: 

1. Replacements, renewals and additions to the FF&E at the Hotel; and 
 2. Capital Expenditures. 
 B. During the
Term, Manager shall transfer into the Reserve the amount(s) specified in Schedule 1. Transfers into the Reserve shall be made at the time of each interim accounting described in Section 4.01 hereof. All amounts transferred to the Reserve
shall be deducted from Gross Revenues in determining Operating Profit and shall be deposited in the special Reserve account described in Section 5.02.A. 
 C. Subject to the availability of adequate funds, Manager at Owner’s expense shall from time to time make such (1) replacements and renewals to the FF&E of the Hotel, and (2) Routine Capital
Expenditures, as may be agreed upon by Owner and Manager and as may be required by the Franchise Agreement. At the end of each Fiscal Year, any amounts remaining in 

  

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

 6.01. Property Insurance. 
 A. Subject to Owner’s prior approval and the provisions of Section 6.05, Manager shall, commencing with the Effective Date and for the duration of the Term, procure and maintain, using funds deducted from Gross Revenues in
determining Operating Profit, the following insurance and /or such other insurance as may be approved or required by Owner: 
 1. Insurance on
the Hotel (including contents) against loss or damage by all perils included in “all risk” (as such term is commonly used in the insurance industry) coverage, in an amount not less than one hundred percent (100%) of the replacement
cost thereof, except that if such 100% replacement cost coverage is not available on reasonable rates and terms, then such insurance shall be in an amount not less than ninety percent (90%) of the replacement cost thereof (less excavation and
foundation costs), of the Hotel; 
  

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 2. Insurance against loss or damage from explosion of boilers, pressure vessels, pressure pipes and
sprinklers, to the extent applicable, installed in the Hotel; 
 3. Business interruption insurance covering loss of profits and necessary
continuing expenses for interruptions caused by any occurrence covered by the insurance referred to in Section 6.0l.A.1, 2 and 3, for a period of not less than one (1) year after the occurrence, of a type and in amounts and with such
deductible limits as are agreed upon by Owner and Manager. 
 4. If the Hotel is in an earthquake-prone area, earthquake insurance in
accordance with Prudent Industry Practices. 
 B. All policies of insurance required under Section 6.01.A. 1, 2 and 3 shall insure
Owner, Landlord, Manager, and any Mortgagee, and any losses thereunder shall be payable to the parties as and to the extent their respective interests, if any, may appear. 
 6.02. Operational Insurance. 
 Subject
to Owner’s prior approval and the provisions of Section 6.05, Manager shall, commencing with the Effective Date and for the duration of the Term, procure and maintain, using funds deducted from Gross Revenues in determining Operating
Profit, with insurance companies approved by Owner the following insurance and/or such other insurance as may be approved or required by Owner: 
 A. Workers compensation insurance as may be required under applicable laws covering all of the employees at the Hotel, with such deductible limits or self-insured retentions as are agreed upon by Owner and Manager; 
 B. Fidelity bonds or crime insurance with respect to Hotel employees handling funds of the Hotel, in an amount approved by Owner; 
 C. Comprehensive general public liability insurance against claims for all injury, death or property damage occurring on, in, or about the Hotel, and
automobile insurance on vehicles owned or leased by owner and operated in conjunction with the Hotel, with a combined single limit of not less than Twenty Million Dollars ($20,000,000) for each occurrence for personal injury, death and property
damage, with such deductible limits as are agreed upon by Owner and Manager; 
 D. Such other insurance, including excess/umbrella coverage
and employer’s practice liability insurance, in amounts as Manager in its reasonable judgment deems advisable (with the concurrence of Owner) for protection against claims, liabilities and losses arising out of or connected with the operation
of the Hotel or as reasonably required by a Mortgagee. 
  

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 Owner, Manager and Landlord shall be the named insureds with respect to the insurance described in
Section 6.02.C and, to the extent applicable, Section 6.02.D. Manager shall be the name insured and Owner and Landlord shall be additional insureds on the policies described in Section 6.02.A and 6.02B. 
 6.03. Coverage. 
 All insurance
described in Sections 6.01 and 6.02 may be obtained by Manager by endorsement or equivalent means under its blanket insurance policies, provided that such blanket policies fulfill the requirements specified herein. Deductible limits shall be as
agreed upon by Owner and Manager. No coverage required hereunder shall be self-insured by Manager without prior written approval of Owner. Owner shall have the right to approve the insurance policies to be obtained by Manager pursuant hereto and the
insurance companies issuing such policies. 
 6.04. Costs and Expenses. 
 Insurance premiums and any costs or expenses with respect to the insurance described in this Article VI shall be Deductions in determining Operating
Profit. Premiums on policies for more than one year shall be charged pro rata against Gross Revenues over the period of the policies. Any reserves, losses, costs, damages or expenses which are uninsured, or fall within deductible limits, shall be
treated as a cost of insurance and shall be Deductions in determining Operating Profit. 
  

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

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

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 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. 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. 
 7.04. No Covenants, Conditions or Restrictions. 
 A. Manager acknowledges and agrees with Owner, and represents and warrants to Owner, that, as of the Effective Date, to the best of Manager’s
knowledge, there are no covenants, conditions or restrictions, including reciprocal easement agreements or cost-sharing arrangements (individually or collectively referred to as “CC&R(s)”) affecting the Hotel, other than
those disclosed on Owner’s title insurance commitment which: (i) would prohibit or limit Manager from operating the Hotel in accordance with the System Standards; (ii) would allow the Hotel facilities (for example, parking spaces) to
be used by persons other than guests, invitees or employees of the Hotel; (iii) would allow the Hotel facilities to be used for specified charges or rates which have not been approved by Manager; (iv) would subject the Hotel to exclusive
arrangements regarding food and beverage operation or retail merchandise; or (v) would impose any financial obligations on Owner or the Landlord or on the Hotel. 
  

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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 no such 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. 
 F. In carrying out its duties hereunder, Manager or an officer, director or employee 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, and Manager, upon becoming aware of such offense does not immediately terminate the offending party’s employment.

  

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 G. Any representation or warranty by Manager or any of its Affiliates in this Agreement or in any
certificate or document or financial or other statement furnished or delivered to Owner or any of its Affiliates at any time under or in connection with this Agreement shall have been false or misleading in any material respect on or as of the date
made or deemed made. 
 H. The failure of either party to perform, keep or fulfill any of the other covenants, undertakings, obligations or
conditions set forth in this Agreement, and the continuance of such default for a period of thirty (30) days after the defaulting party’s receipt of written notice from the non-defaulting party of said failure, or, if the default is such
that it cannot reasonably be cured within said thirty (30) day period of time, if the defaulting party fails to commence the cure of such default within said thirty (30) day period of time or thereafter fails to diligently pursue such
efforts to completion, provided that (i) in the case of any default by Manager such default is cured not later than ninety (90) days after Manager’s receipt of such written notice and (ii) no such 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 two (2) percentage points, from and after the date on which the Default occurred. 
 B. The remedies granted under Section 8.02 and Section 8.03 shall not be in substitution for, but shall be in addition, to, any and all rights
and remedies available to the non-defaulting party (including, without limitation, injunctive relief and damages) by reason of applicable provisions of law or equity and shall survive Termination. 
  

 21 

 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 Nine, 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. 
  

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 ARTICLE X 
 MISCELLANEOUS 
 10.01. Right to Make Agreement. 
 Each party warrants, with respect to itself, that neither the execution of this Agreement nor the performance of the transactions contemplated hereby
shall violate any provision of law or judgment, writ, injunction, order or decree of any court or governmental authority having jurisdiction over it; result in or constitute a breach or default under any indenture, contract, other commitment or
restriction to which it is a party or by which it is bound; or, require any consent, vote or approval which has not been taken, or at the time of the transaction involved shall not have been given or taken. Each party covenants that it has and will
continue to have throughout the Term and any extensions thereof, the full right to enter into this Agreement and perform its obligations hereunder. 
 10.02. Consents and Cooperation. 
 Wherever in this Agreement the consent or approval of Owner or Manager is required, except
as otherwise provided in this Agreement or agreed by the parties, such consent or approval may be withheld, delayed or conditioned in the sole and absolute discretion of the party whose consent or approval is required, shall be in writing and shall
be executed by a duly 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 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. 
  

 23 

 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:

  

					
	To Owner:	 	Apple Nine 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

  

 24 

					
	To Manager:	 	Gateway Hospitality Group, Inc.
		 	8921 Canyon Falls Blvd., Ste 140
		 	Twinsburg, Ohio 44087
		 	Phone:	 	(330) 405-9800
		 	Attn:	 	Ron Hutcheson
		 	Fax:	 	(330)405-9898

 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 promptly notify Owner and shall take all appropriate actions with regard to such Hazardous Materials as required of an owner or operator under applicable Environmental Laws. Manager shall keep Owner apprised of the status of addressing
the release or threat of release of Hazardous Materials, and Owner shall have the right at any time to assume control of the matter from Manager. 
 “Environmental Laws” shall mean all federal, state and local environmental, health and safety laws, rules, regulations, ordinances, permits, orders, common law or requirements of any governmental authority,
including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. §§ 9601, et. seq., as amended; Solid Waste Disposal Act, 42 U.S.C. §§ 6901, et.
seq., as amended; Toxic Substances Control Act, 15 U.S.C. §§ 2601, et. seq., as amended; Hazardous Materials Transportation Act, 49 U.S.C. §§ 5101, et. seq., as amended; Federal Water Pollution
Control Act, 33 U.S.C. §§ 1251, et. seq. 
  

 25 

 “Hazardous Materials” shall mean any hazardous substances, hazardous wastes, toxic substances,
hazardous materials, petroleum or petroleum products, pollutants or contaminants (as those terms are defined under Environmental Laws), including, without limitation, polychlorinated biphenyls, lead or lead-based paint, asbestos or mold in such
concentrations or amounts as may impose clean-up, removal, monitoring or other responsibility under the Environmental Laws or which may present a significant risk of harm to guests, invitees or employees of the Hotel. 
 10.09. Confidentiality; Projections. 
 A. Owner and Manager agree that the terms of this Agreement are strictly confidential and will use their reasonable efforts to ensure that the terms of this Agreement are not disclosed to any outside person or entities without the prior
written consent of the other party, except (1) as Owner or Manager may determine is required by any law, rule, regulation or judicial process, or by any regulatory or supervisory authority having jurisdiction over the parties or any of their
Affiliates or (2) to the extent reasonably necessary, (i) to obtain licenses, permits and other public approvals, (ii) in connection with a financing of the Hotel, Owner, or any Affiliate thereof, (iii) in connection with a Sale
of the Hotel or other sale of Owner, or any Affiliate thereof or its or their corporate assets, (iv) subject to the provisions of Section 4.02, in connection with an audit or other investigation conducted pursuant to this Agreement or
(v) in 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. 
 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. 
  

 26 

 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, agents or contractors and (iii) any claim asserted by any employee, contractor or agent of Manager or its Affiliates, including any claim for employment discrimination, wrongful termination, violations of law and
other claims asserted by such employees, except, as to any of the items listed in clauses (i) – (iii) above, to the extent of any costs properly payable from Gross Revenues as Deductions, to the extent of any costs or claims covered
by insurance 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, agents or contractors and (iii) any claim asserted by any employee, contractor or agent of Owner or its Affiliates except, as to any of the 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. 
 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 

  

 27 

 
accounting and the parties agree to readjust such amounts and make the necessary cash adjustments when such information becomes available; provided, however,
that all accounts shall be deemed final two (2) years after Termination. 
 C. Manager shall immediately release and transfer to Owner
any of Owner’s funds which are held or controlled by Manager with respect to the Hotel. 
 D. Manager shall make available to Owner such
books and records respecting the Hotel (including those from prior years) as will be needed by Owner to prepare the accounting statements, in accordance with the GAAP, for the Hotel for the year in which the Termination occurs and for any subsequent
year. 
 E. Manager shall (to the extent permitted by law) assign to Owner or to the new manager all operating licenses and permits for the
Hotel which have been issued in Manager’s name (including liquor and restaurant licenses, if any); provided that if Manager has expended any of its own funds in the acquisition of any of any of such licenses or permits, Owner shall reimburse
Manager therefor if it has not done so already unless such expenditure is a Manager’s Liability. 
 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. 
  

 28 

 I. Various other actions shall be taken, as described in this Agreement, including, but not limited to,
the actions described in Section 4.05 and Section 6.04. 
 J. Manager shall peacefully vacate and surrender the Hotel to Owner on
the date of termination unless otherwise agreed to by the parties. 
 The provisions of this Section 10.11 shall survive Termination.

 10.12. Waiver. 
 The
failure of either party to insist upon a strict performance of any of the terms or provisions of this Agreement, or to exercise any option, right or remedy contained in this Agreement, shall not be construed as a waiver or as a relinquishment for
the future of such term, provision, option, right or remedy, but the same shall continue and remain in full force and effect. No waiver by either party of any term or provision hereof shall be deemed to have been made unless expressed in writing and
signed by such party. 
 10.13. Partial Invalidity. 
 If any portion of any term or provision of this Agreement, or the application thereof to any person or circumstance shall be invalid or unenforceable, at any time or to any extent, the remainder of this Agreement, or
the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Agreement shall be valid and be enforced to
the fullest extent permitted by law. 
 10.14. Survival. 
 Except as otherwise specifically provided in this Agreement, the rights and obligations of the parties herein shall not survive any Termination. 
 10.15. Negotiation of Agreement. 
 Owner and Manager are both business entities having substantial experience with the subject matter of this Agreement, and each has fully participated in the negotiation and drafting of this Agreement. Accordingly, this Agreement shall be
construed without regard to the rule that ambiguities in a document are to be construed against the draftsman. No inferences shall be drawn from the fact that the final, duly executed Agreement differs in any respect from any previous draft hereof.

  

 29 

 10.16. Estoppel Certificates. 
 Each party to this Agreement shall at any time and from time to time, upon not less than fifteen (15) days’ prior notice from the other party,
execute, acknowledge and deliver to such other party, or to any third party specified by such other party, a statement in writing: (a) certifying that this Agreement is unmodified and in full force and effect (or if there have been
modifications, that the same, as modified, is in full force and effect and stating the modifications); and (b) stating to the best knowledge of the certifying party (i) whether or not there is a continuing Default or Event of Default by
the non-certifying party in the performance or observance of any covenant, agreement or condition contained in this Agreement, (ii) the amount, if any, of any past due fees or other past due amounts owed to Manager or Owner; and
(iii) whether or not there are any past due and unpaid obligations with respect to the Hotel, other than in the ordinary course of business. Such statement shall be binding upon the certifying party and may be relied upon by the non-certifying
party and/or such third party specified by the non-certifying party as aforesaid. In addition, upon written request after a Termination, each party agrees to execute and deliver to the non-certifying party and to any such third party a statement
certifying that this Agreement has been terminated. 
 10.17. Affiliates. 
 Manager shall not be entitled to contract with companies that are Affiliates (or companies in which Manager has an ownership interest if such interest is
not sufficient to make such a company an Affiliate) or with third parties or their Affiliates that have other contractual relationships with Manager and/or its Affiliates to provide goods and/or services to the Hotel 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 officers, directors, partners or employees of Manager or its Affiliates, or, to its knowledge,
the funding sources for any of the foregoing, is or will be identified on the list of the U. S. Treasury’s Office of Foreign Asset Control (“OFAC”); (ii) neither Manager nor any of its Affiliates is or will be directly or
indirectly owned or controlled by the government of any country that is subject to an embargo imposed by the United States government; and (iii) neither Manager nor any of its Affiliates is acting or will act on behalf of a government of, or is
involved in business arrangements or other transactions with, any country that is subject to such an embargo. Manager will notify Owner in writing immediately upon the occurrence of any event which would render the foregoing representations and
warranties incorrect. 
  

 30 

 10.19. Restrictions on Operating the Hotel in Accordance with System Standards. 
 In the event of either (i) a Legal Requirement, including an order, judgment or directive by a court or administrative body which is issued in
connection with any Litigation involving Owner, or (ii) any action taken by a Mortgagee in connection with a Foreclosure, which in either case restricts or prevents Manager, in a material and adverse manner, from operating the Hotel in
accordance with System Standards (including without limitation, any restrictions on expenditures by Manager from the Operating Accounts or from the Reserve, other than restrictions which are set forth in this Agreement), Manager shall be entitled,
at its option, to terminate this Agreement upon sixty (60) days’ written notice to Owner. The foregoing shall not reduce or otherwise affect the rights of the parties under Article VIII. 
 10.20. Counterparts. 
 This Agreement
may be executed in any number of counterparts, each of which shall be deemed to be an original, and all of which shall constitute one and the same instrument. Such executed counterparts may be delivered by facsimile which, upon transmission to the
other party, shall have the same force and effect as delivery of the original signed counterpart. The submission of an unsigned copy of this Agreement or an electronic instrument with or without electronic signature to either party shall not
constitute an offer or acceptance. This Agreement shall become effective and binding only upon execution and delivery of this Agreement in non-electronic form by both parties in accordance with this Section. 
 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
             (Accounts and Receipts) and              (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 

  

 31 

 
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, which consent shall not be unreasonably withheld. In addition, if Manager or any of its Affiliates shall acquire, lease, own, manage or operate,
directly or indirectly, any hotel, inn, motel or other type of lodging facility, regardless of whether similar to the Hotel or whether operated under the same or a different brand, in the same geographic area or market as the Hotel, Manager shall
not permit unfair favoritism in the operation and management of such other hotels that would disadvantage the operation or business of the Hotel (such as, by way of example only, directing potential Hotel guests to such other hotels instead of to
the Hotel). At Owner’s request, Manager shall provide such information as may reasonably be requested by Owner to determine if there has been any such unfair favoritism and, in the event Owner, in its reasonable business judgment, determines
that any such unfair favoritism has occurred, Owner may terminate this Agreement. 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. 
 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. 
  

 32 

 “Accounting Period Statement” shall have the meaning ascribed to it in
Section 4.0l.A. 
 “Accounting Quarter” shall mean three consecutive Accounting Periods, the first of which
begins on the first day of the Fiscal Year. 
 “Affiliate” shall mean, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common control with such Person. For purposes of this definition, the term “control” (including the terms “controlling,” “controlled by” and “under
common control with”) of a Person means the possession, directly or indirectly, of the power: (i) to vote more than fifty percent (50%) of the voting stock or other beneficial interests of such Person; or (ii) to direct or cause
the direction of the management and policies of such Person, whether through the Ownership of voting stock, by contract or otherwise. 
 “Agreement” shall mean this Management Agreement between Owner and Manager, including the exhibits attached hereto. 
 “Annual Operating Projection” shall have the meaning ascribed to it in Section 4.04. 
 “Annual Operating Statement” shall have the meaning set forth in Section 4.0l.B. 
 “Available Cash Flow” shall mean an amount, with respect to each Fiscal Year or portion thereof during the Term, equal to the excess, if any, of the Operating Profit over the Owner’s Priority. 
 “Base Management Fee” shall mean an amount payable to Manager as a Deduction from Gross Revenues for all services provided by
Manager pursuant to this Agreement, except as otherwise expressly provided herein. The Base Management Fee shall be the percentage of Gross Revenues shown on Schedule 1 for each Fiscal Year during the Term. 
 “Buildings” shall mean the buildings and improvements constituting that certain hotel more particularly described on Schedule
1 attached hereto and made a part hereof which is located on the Site. 
 “Business Day” shall mean any day other
than a Saturday, Sunday or legal holiday in the Commonwealth of Virginia. 
 “CC&R’s” shall have the meaning
ascribed to it in Section 7.04.A. 
 “Competitive Set” shall mean the group of hotels which are closest in
geographical distance from the Hotel and which are generally within the same hotel market segment as the Hotel, as described in Schedule 1. If any such hotels, subsequent to the Effective Date, either changes its chain affiliation or ceases
to operate or otherwise ceases to reflect the general criteria set forth in the first sentence of this definition, Owner and Manager agree to mutually, reasonably and in good faith, discuss appropriate changes to the foregoing list of the hotels
that shall comprise the Competitive Set. 
  

 33 

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

 “Cure Payment” shall have the meaning set forth in Section 2.02.A. 
 “Deductions” shall have the meaning ascribed to it in the definition of Operating Profit. 
 “Default” shall mean the occurrence of any event which, with the lapse of time, the giving of notice or both, would constitute an
Event of Default. 
 “Effective Date” shall have the meaning ascribed to it in the Preamble. 
 “Environmental Laws” shall have the meaning ascribed to it in Section 10.08. 
 “Event of Default” shall have the meaning ascribed to it in Section 8.01. 
 “FF&E” shall mean furniture, furnishings, fixtures, soft goods, case goods, signage, audio-visual equipment, kitchen
appliances, vehicles, carpeting and equipment, including front desk and back-of-the-house computer equipment, that meet Owner’s capitalization policy consistent with GAAP , but shall not include Fixed Asset Supplies or Software. 
 “FF&E Lease” means a lease of any property other than real property. 
 “Fiscal Year” shall mean a calendar year commencing on January 1 and ending on December 31; provided, however, the
first fiscal year commences as of the Effective Date and ends at midnight on December 31 of that same calendar year. A partial Fiscal Year between the end of the last full Fiscal Year and the Termination of this Agreement shall also constitute
a separate Fiscal Year. If Fiscal Year is changed in the future, appropriate adjustment to this Agreement’s reporting and accounting procedures shall be made; provided, however, that no such change or adjustment shall alter the term of this
Agreement or in any way reduce the distributions of Operating Profit or other payments due hereunder. 
 “Fixed Asset
Supplies” shall mean items included within “Property and Equipment” under the Uniform System of Accounts including, but not limited to, linen, china, glassware, tableware, uniforms, and similar items, whether used in
connection with public space or Guest Rooms. 
 “Foreclosure” shall mean any exercise of the remedies available to a
Mortgagee, upon a default under the Mortgage held by such Mortgagee, which results in a transfer of title to or possession of the Hotel. The term “foreclosure” shall include, without limitation, any one or more of the following events, if
they occur in connection with a default under a Mortgage: (i) a transfer by judicial or non-judicial foreclosure; (ii) a transfer by deed in lieu of foreclosure; (iii)

  

 34 

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

 “Guest Room Revenues” shall mean the portion of Gross Revenues of the Hotel which is attributed to the rental of
Guest Rooms. 
 “Hazardous Materials” shall have the meaning ascribed to it in Section 10.08. 
 “Hotel” shall mean the Site together with the Buildings and all other improvements construed or to be constructed on the Site
pursuant to this Agreement, all FF&E and Fixed Asset Supplies installed or located on the Site or in the Buildings, and all easements or other appurtenant rights thereto. 
 “Hotel Lease” shall have the meaning ascribed to it in Recital B. 
 “Hotel Purchase Contract” shall have the meaning ascribed to it in Schedule 1. 
 “Impact Fees” shall have the meaning ascribed to it in Section 4.07.A. 
 “Impositions” shall have the meaning ascribed to it in Section 4.07. 
  

 35 

 “Incentive Management Fee” shall mean an amount payable to Manager, pursuant to
Section 3.01 and Section 4.01, that is set forth in Schedule 1 of Available Cash Flow in any Fiscal Year (or portion thereof) after payment to Owner of Owner’s Priority. 
 “Initial Term” shall have the meaning ascribed to it in Section 2.01. 
 “Inventories” shall mean “Inventories” as defined in the Uniform System of Accounts, such as, but not limited to,
provisions in storerooms, refrigerators, pantries and kitchens; beverages in wine cellars and bars; other merchandise intended for sale; fuel; mechanical supplies; stationery; and other expensed supplies and similar items. 
 “Landlord” shall mean the party identified as “Landlord” in Schedule 1. 
 “Legal Requirement(s)” shall mean any federal, state or local law, code, rule, ordinance, regulation or order of any governmental
authority or agency having jurisdiction over the business or operation of the Hotel or the matters which are the subject of this Agreement, including, without limitation, the following: (i) any building, zoning or use laws, ordinances,
regulations or orders; and (ii) Environmental Laws. 
 “Litigation” shall mean: (i) any cause of action
(including, without limitation, bankruptcy or other debtor/creditor proceedings) commenced in a federal, state or local court; or (ii) any claim brought before an administrative agency or body (for example, without limitation, employment
discrimination claims). 
 “Manager” shall have the meaning ascribed to it in the Preamble hereto or shall mean any
permitted successor or assign, as applicable. 
 “Manager’s Liability” and “Manager’s
Liabilities” shall have the meanings ascribed to such terms in Section 4.03.B. 
 “Mortgage” shall
mean any mortgage, deed of trust or similar security instrument creating a lien on the Hotel. 
 “Mortgagee” shall
mean the holder of any Mortgage encumbering the Hotel or the Site. 
 “Operating Accounts” shall have the meaning
ascribed to it in Section 4.03.A. 
 “Operating Loss” shall mean a negative Operating Profit. 
 “Operating Profit” shall mean the excess of Gross Revenues over the following deductions (“Deductions”)
incurred by Manager, on behalf of Owner, in operating the Hotel: 
 1. the cost of sales, including, without limitation, compensation, fringe
benefits, payroll taxes and other costs related to Hotel employees, provided that the foregoing costs shall 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; 
  

 36 

 2. departmental expenses incurred at departments within the Hotel; administrative and general expenses;
the cost of marketing incurred by the Hotel; advertising and business promotion incurred by the Hotel; heat, light, and power; computer line charges; and routine repairs, maintenance and minor alterations treated as Deductions under
Section 5.01; 
 3. the cost of Inventories and Fixed Asset Supplies consumed in the operation of the Hotel; 
 4. a reasonable reserve for uncollectible accounts receivable as reasonably determined by Manager with the concurrence of Owner; 
 5. all costs and fees of independent professionals or other third parties who are retained by Manager with the concurrence of Owner to perform services
required or permitted hereunder; 
 6. all costs and fees of technical consultants and operational experts who are retained or employed by
Manager with the concurrence of Owner for specialized services (including, without limitation, quality assurance inspectors) and the reasonable cost of attendance by employees of the Hotel at training and manpower development programs sponsored by
Manager, provided Owner has approved attendance at programs and the cost thereof; 
 7. the Base Management Fee; 
 8. all royalty, marketing fund, reservation, communication support, property management system and other similar fees payable to the Franchisor under the
Franchise Agreement; 
 9. insurance costs and expenses as provided in Section 6.04; 
 10. taxes, if any, payable by or assessed against Manager, Owner or Landlord related to this Agreement or to Manager’s operation of the Hotel and
Impositions (exclusive of Manager’s, Owner’s and Landlord’s income taxes or franchise taxes and any other similar taxes payable by Manager and all other taxes, assessments and payments excluded from the definition of Impositions);

 11. transfers to the Reserve required pursuant to Section 5.02; 
 12. any costs paid by Manager pursuant to the Franchise Agreement; 
 13. payments pursuant to FF&E leases or other forms of financing obtained for the FF&E located in or connected with the Hotel; and 
  

 37 

 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 of supervisory personnel of Manager incurred in connection
with managing the Hotel. 
 The term “Deductions” shall not include (a) debt service payments pursuant to a
Mortgage or (b) rental payments under any Hotel Lease, all of which shall be paid by Owner from its own funds. 
 “Owner” shall have the meaning ascribed to it in the Preamble or shall mean any successor or assign, as applicable. 
 “Owner’s Priority” shall mean the amount shown as Owner’s Priority on Schedule 1 attached hereto and made a part hereof, per Fiscal Year (prorated for any partial Fiscal Year)
plus any accrued but unpaid Owner’s Priority for any prior Fiscal Year. Owner’s Priority for each Fiscal Year shall be paid to the extent of Operating Profit available in such Fiscal Year, as provided in Section 3.02 of this
Agreement. In the event of any capital expenditures made with respect to the Hotel after the date of this Agreement that are in excess of the Reserve, the Owner’s Priority shall be increased (but not decreased) for the remaining portion of the
Fiscal Year in which such capital expenditures are made and all subsequent Fiscal Years so as to equal a twelve percent (12%) return on an amount equal to the sum of (i) the initial investment of Owner (including the purchase price,
transaction costs and cost of capital paid by Landlord) for the Hotel plus (ii) such excess capital expenditures. 
 “Performance Termination Period” shall have the meaning ascribed to it in Schedule 1. 
 “Performance Termination Threshold” 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. 
  

 38 

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

  

 39 

 
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. 
 “Site” shall mean the real
property described on Exhibit A attached hereto and made a part hereof. 
 “Software” shall mean all computer
software and accompanying documentation (including all future upgrades, enhancements, additions, substitutions and modifications thereof), other than computer software which is generally commercially available, which are used by Manager in
connection with operating or otherwise providing services to the Hotel. 
 “Specially Designated National or Blocked
Person” shall mean (i) a person designated by the U.S. Department of Treasury’s Office of Foreign Assets Control from time to time as a “specially designated national or blocked person” or similar status, (ii) a
person described in Section 1 of U.S. Executive Order 13224 issued on September 23, 2001, or (iii) a person otherwise identified by government or legal authority as a person with whom Manager or its Affiliates are prohibited from
transacting business. Currently, a listing of such designations and the text of the Executive Order are published under the internet website address www.ustreas.gov/offices/enforcement/ofac. 
 “Subordination Agreement” shall have the meaning ascribed to it in Section 7.03. 
 “Subsequent Owners” shall have the meaning ascribed to it in Section 7.03. 
 “System” shall have the meaning set forth in the Franchise Agreement. 
 “System Standards” shall mean any one or more (as the context requires) of the following three (3) categories of standards:
(i) operational standards (for example, services offered to guests, quality of food and beverages, cleanliness, staffing and employee compensation and benefits, frequent traveler programs and other similar programs; (ii) physical standards
(for example, quality of the hotel, FF&E, and Fixed Asset Supplies, frequency of FF&E replacements, etc.); and (iii) technology standards (for example, those relating to software, hardware, telecommunications, systems security and
information technology); each of such standards shall be the standard which is generally prevailing or in the process of being implemented at other hotels in the System represented by the Franchise Agreement. 
 “Term” shall have the meaning ascribed to it in Section 2.01. 
 “Termination” shall mean the expiration or sooner cessation of this Agreement. 
 “Trade Name” shall mean any name, whether informal (such as a fictitious name or d/b/a) or formal (such as the full legal name of
a corporation or partnership) which is used to identify an entity. 
  

 40 

 “Uniform System of Accounts” shall mean the Uniform System of Accounts for the
Lodging Industry, Ninth Revised Edition, 1996, as published by the Educational Institute of the American Hotel & Motel Association, as revised. 
 “WARN Act” shall mean the Worker Adjustment and Retraining Notification Act, 29 U.S.C. 2101 et seq. 
 “Working Capital” shall mean funds that are 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 NINE HOSPITALITY MANAGEMENT, INC., a Virginia corporation
		
	By:	 	 /s/    Justin G. Knight

	Name:	 	Justin G. Knight
	Title:	 	President
	
	MANAGER:
	
	GATEWAY HOSPITALITY GROUP, INC., an Ohio corporation
		
	By:	 	 /s/    Ron Hutcheson

	Name:	 	Ron Hutcheson
	Title:	 	Chief Financial Officer

  

 Exhibit B – p. 1Exhibit 10.19

 Exhibit 10.19 
 FRANCHISE LICENSE AGREEMENT 
 HILTON GARDEN INN CLEVELAND/TWINSBURG 
 TWINSBURG, OH 

 TABLE OF CONTENTS 
  

			
	 SECTION
	  	PAGE NO.
	 1.      DEFINITIONS
	  	1
		
	 a.      The Hotel
	  	1
	 b.      The Marks
	  	1
	 c.      The System
	  	1
	 d.      The Manual
	  	2
	 e.      Affiliate
	  	2
	 f.       Including
	  	2
	 g.      License Term
	  	2
		
	 2.      GRANT OF LICENSE
	  	2
		
	 3.      OUR RESPONSIBILITIES
	  	3
		
	 a.      Training
	  	3
	 b.      Reservation Services
	  	3
	 c.      Consultation
	  	3
	 d.      Arrangements for Marketing, Etc.
	  	3
	 e.      Inspections/Compliance Assistance
	  	3
	 f.       Manual
	  	4
	 g.      Equipment and Supplies
	  	4
		
	 4.      PROPRIETARY RIGHTS
	  	4
		
	 5.      PROPRIETARY MARKS
	  	4
		
	 a.      Use of Trade Name
	  	4
	 b.      Trademark Disputes
	  	4
	 c.      Web Sites
	  	5
	 d.      Covenant
	  	5
		
	 6.      YOUR RESPONSIBILITIES
	  	5
		
	 a.      Operational and Other Requirements
	  	5
	 b.      Hotel Quality Assurance
	  	9
	 c.      Staff and Management
	  	9
	 d.      ResMax Program
	  	10
		
	 7.      FEES
	  	10
		
	 a.      Monthly Fees
	  	10
	 b.      Calculation and Payment of Fees
	  	10
	 c.      Room Addition Fee
	  	11
	 d.      Other Fees
	  	11
	 e.      Taxes
	  	11
	 f.       Application of Fees
	  	11
		
	 8.      RECORDS AND AUDITS
	  	11
		
	 a.      Reports
	  	11
	 b.      Maintenance of Records
	  	12
	 c.      Audit
	  	12
	 d.      Ownership of Information
	  	12
		
	 9.      INDEMNITY
	  	12
		
	 10.    NOTICE CONCURRENT TO OFFERING A MARKETED INTEREST
	  	13

  

 i 

			
		
	 11.    TRANSFER
	  	13
		
	 a.      Our Transfer
	  	13
	 b.      Your Transfer
	  	14
		
	 12.    CONDEMNATION AND CASUALTY
	  	18
		
	 a.      Condemnation
	  	18
	 b.      Casualty
	  	18
	 c.      No Extensions of Term
	  	18
		
	 13.    TERM OF LICENSE
	  	19
		
	 14.    TERMINATION
	  	19
		
	 a.      Termination, Suspension or Other Interim Remedies by Us on Advance Notice
	  	19
	 b.      Immediate Termination by Us
	  	20
	 c.      Liquidated Damages upon Termination by Us
	  	22
	 d.      De-identification of Hotel Upon Termination
	  	23
	 e.      Special Termination
	  	23
		
	 15.    RELATIONSHIP OF PARTIES
	  	23
		
	 a.      No Agency Relationship
	  	23
	 b.      Notices to Public Concerning Your Independent Status
	  	23
		
	 16.    MISCELLANEOUS
	  	24
		
	 a.      Severability and Interpretation
	  	24
	 b.      Governing Law and Jurisdiction
	  	24
	 c.      Exclusive Benefit
	  	25
	 d.      Entire Agreement
	  	25
	 e.      Consent; Business Judgment
	  	25
	 f.       Notices
	  	25
	 g.      General Release
	  	26
	 h.      Estoppel Certificate
	  	26
	 i.       Descriptive Headings
	  	26
	 j.       Representations and Warranties
	  	26
	 k.      Time
	  	26
	 l.       Counterparts
	  	26
	 m.     Performance Requirements/Responsibilities
	  	26
	 n.      Informational Copies
	  	27
	 o.      Restricted Persons and Anti-bribery Representations and Warranties
	  	27
		
	 17.    WAIVER OF JURY TRIAL
	  	27
		
	 ATTACHMENT A - PERFORMANCE CONDITIONS: CHANGE OF OWNERSHIP
	  	
		
	 ATTACHMENT B - RIDER TO FRANCHISE LICENSE AGREEMENT
	  	
		
	 EXHIBIT A - PRODUCT IMPROVEMENT REPORT (PIP)
	  	

  

 ii 

 FRANCHISE LICENSE AGREEMENT 
 Dated as of the Effective Date in the Rider attached as Attachment B (the “Rider”) between the licensor entity in the Rider (“we,” “us,” “our” or “Licensor”), and the
licensee entity (“you,” “your” or “Licensee”) in the Rider. 
 INTRODUCTION 
 We are a subsidiary of Hilton Hotels Corporation, a Delaware corporation (“HHC”). HHC and its subsidiaries and Affiliates (as defined in Subparagraph
1.e. below) (collectively, “Hilton”) own, license, lease, operate, manage and provide various services for a network of hotels, inns, conference centers, timeshare properties and other operations (the “Network”).
Hilton has authorized us to grant licenses for selected, first-class, independently owned or leased hotel properties, to operate under the brand name in the Rider (the “Licensed Brand”). You have expressed an interest in operating
the property identified in the Rider under the Licensed Brand. You have confirmed to us that you (i) independently investigated the risks of operating a hotel under the Licensed Brand, including current and potential market conditions, and
competitive factors and risks, and have made an independent evaluation of all such matters, and (ii) reviewed our franchise disclosure document (“FDD”), if applicable. After doing so, you have expressed a desire to enter into
this Franchise License Agreement (this “Agreement”) with us to obtain a license to use the Licensed Brand in the operation of a hotel at the address in the Rider. 
 NOW, THEREFORE, in consideration of the premises and the undertakings and commitments of each party to the other party in this Agreement the parties agree as follows: 
 1. Definitions 
 The following capitalized terms will have the
meanings set forth after each term: 
 a. The Hotel. The “Hotel” is the property you will operate under this Agreement, and
includes all structures, facilities, appurtenances, furniture, fixtures, equipment, and entry, exit, parking and other areas located on the site we have approved for your business, or located on any land we approve in the future for additions,
signs, parking or other facilities. 
 b. The Marks. References to the “Marks” means the Licensed Brand and all other
service marks, copyrights, trademarks, logos, insignia, emblems, symbols and designs (whether registered or unregistered), slogans, distinguishing characteristics, trade names, domain names, and all other marks or characteristics associated or used
with or in connection with the System (as defined in Subparagraph 1.c. below), and similar intellectual property rights, that we designate from time to time to be used in the System. 
 c. The System. The “System” is defined as, and consists of, the elements, including know-how, that we designate from time to time
to identify hotels operating worldwide under the Licensed Brand (as may in certain jurisdictions be preceded or followed by a supplementary identifier such as “by Hilton”) that provide to the consuming public a similar, distinctive, high
quality hotel service. “System hotels” means hotels we license to operate under the System and to use the Licensed Brand name. The System currently includes: the Licensed Brand and the Marks; access to a reservation service;
advertising, publicity and other marketing programs and materials; training programs and materials; standards, specifications and policies for construction, furnishing, operation, appearance and service of the Hotel we refer to in this Agreement or
in the Manual (as defined in Subparagraph 1.d. below); and programs for our inspecting the Hotel and consulting with you. We may add elements to the System or modify alter or delete elements of the System at our sole option. 
  

 1 

 d. The Manual. References to the “Manual” include all written standards and
requirements that have been and are developed and compiled by us from time to time in connection with the construction, equipping, furnishing, supplying, operating, maintaining and marketing of System hotels, including the Hotel. Changes made in the
Manual will apply to System hotels as specified and may not apply to all System hotels. We may provide these standards and requirements in one or more documents or guides. All of these items, as we modify them from time to time, will be considered
the Manual. We may change the Manual from time to time. We will notify you at least thirty (30) days before any change becomes effective. You are responsible for the costs of complying with the Manual, including any changes. 
 e. Affiliate. An “Affiliate” of any entity is any natural person or firm, corporation, partnership, association, trust or other
entity which, directly or indirectly, controls, is controlled by, or is under common control with such entity. The term “control” in all its forms, means the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of an entity, or of the power to veto major policy decisions of an entity, whether through the ownership of voting securities, by contract, or otherwise. 
 f. Including. The word “including,” whenever used in this Agreement, will mean “including, by way of example, but without
limitation.” 
 g. License Term. References to the “License Term” means the period from the Effective Date
(through the expiration of this Agreement, unless terminated earlier under the terms of this Agreement. 
 2. Grant of License 
 We grant to you and you accept a non-exclusive license (the “License”) to use the System during the License Term, at, and in connection with the
operation of, the Hotel, in accordance with the terms of this Agreement. 
 This Agreement does not limit our right, or the right of any of our present or
future owners, subsidiaries, and Affiliates (collectively, the “Entities”), to own, license or operate any other business of any nature (“Other Businesses”), including a hotel, inn, conference center, timeshare
property, lodging facility or similar business, whether under the Licensed Brand, or as a competitive brand, or otherwise. We have the right to engage in any Other Businesses, even if they compete with the Hotel, the System, or the Licensed Brand,
and whether we start those businesses, or purchase, merge with, acquire, are acquired by, or associate with, such businesses. We may also; (a) use or license to others all or part of the System; (b) use the facilities, programs, services
and/or personnel used in connection with the System in Other Businesses; and (c) use the System, the Licensed Brand, and the Marks, in the Other Businesses. You acknowledge and agree that you are not acquiring any rights other than the
non-exclusive right to use the System to operate the Hotel under the Licensed Brand at the site licensed under this Agreement and in accordance with the terms of this Agreement. You acknowledge and agree that you have no rights and will not make any
claims, demands or damages arising from or related to any of the foregoing activities, and you acknowledge and agree that such activities will not give rise to any liability on our part, including liability for claims for unfair competition, breach
of contract, breach of any applicable implied covenant of good faith and fair dealing, or divided loyalty. 
 The Hotel will be initially known by the trade
name in the Rider (the “Trade Name”). We may change the Trade Name and/or the Licensed Brand name and/or any of the Marks at any time at our sole option, but we will not change the principal name identified in the Rider. You may not
change the Trade Name without our specific written consent. You acknowledge and agree that you are not acquiring the right to use any service marks, copyrights, trademarks, logos, designs, insignia, emblems, symbols, slogans, distinguishing
characteristics, trade names, domain names or other marks or characteristics owned by Hilton or the Entities that we do not specifically designate to be used in the System. 
  

 2 

 3. Our Responsibilities 
 a. Training. We will specify required and optional training programs and provide these programs at various locations. We may charge you for: (i) required training services and materials; and
(ii) optional training services and materials we provide to you. You are also responsible for all travel, lodging and other expenses you or your employees incur in attending these programs. 
 b. Reservation Services. We will, directly or indirectly, furnish you with the Reservation Service (as defined in Subparagraph 6.a.(15) below).
This service will be furnished to you on the same basis as it is furnished to other System hotels, subject to the provisions of Subparagraph 14.a.(3) below. 
 c. Consultation. We may, from time to time at our sole discretion, make available to you consultation and advice in areas such as operations, facilities, and marketing on the same basis as other System
hotels. We may establish fees in advance or on a project-by-project basis, for consultation and advice you request. 
 d. Arrangements for
Marketing, Etc. Periodically, we or one of the Entities will publish and make available to the traveling public a directory of System hotels, including the Hotel. Additionally, we will include the Hotel, or cause the Hotel to be included in:
(i) national or regional group advertising of System hotels; and (ii) international, national and regional market programs offered by us or the Entities; subject to and in accordance with our general practice for System hotels. 

We will use your Monthly Program Fee (as defined in Subparagraph 7.a. below) to pay for various programs to benefit the System, including: (i) advertising,
promotion, publicity, public relations, market research, and other marketing programs; (ii) developing and maintaining directories and Internet sites for System hotels; (iii) developing and maintaining the Reservation Service systems and
support; and (iv) administrative costs and overhead related to the administration or direction of these projects and programs. We will have the sole right to determine how and when we spend these funds, including sole control over the creative
concepts, materials and media used in the programs, the placement and allocation of advertising, and the selection of promotional programs. We may enter into arrangements for development, marketing, operations, administrative, technical and support
functions, facilities, programs, services and/or personnel with any other entity, including any Hilton entity and any of the Entities. You acknowledge that Monthly Program Fees are intended for the benefit of the System, and will not simply be used
to promote or benefit any one property or market. We will have no obligation in administering any activities paid by the Monthly Program Fee to make expenditures for you that are equivalent or proportionate to your payments, or to ensure that the
Hotel benefits directly or proportionately from such expenditures. We may create any programs and allocate monies derived from Monthly Program Fees to any regions or localities, as we consider appropriate in our sole judgment. The aggregate of
Monthly Program Fees paid to us by System hotels does not constitute a trust or “advertising fund” and we are not a fiduciary with respect to the Monthly Program Fees paid by you and other System hotels. We are not obligated to expend
funds in excess of the amounts received from System hotels. If any interest is earned on unused Monthly Program Fees, we will use the interest before using the principal. The Monthly Program Fee does not cover your costs of participating in any
optional marketing programs and promotions offered by us or Hilton from time to time in which you voluntarily choose to participate. These fees also do not cover the cost of operating the Hotel in accordance with the standards in the Manual.

 e. Inspections/Compliance Assistance. We will administer a quality assurance program for the System that may include
conducting periodic inspections of the Hotel and guest satisfaction surveys and audits to ensure compliance with System standards. We may inspect the Hotel and its operations at any time, with or without prior notice to you, and to determine if the
Hotel is in compliance with the standards and rules of operation in this Agreement and in the Manual. If the Hotel fails to comply with such standards and rules of operation, we may, at our option and at your cost, require an action plan to correct
the deficiencies. You must then take all steps necessary to correct any deficiencies within the times we establish. You may be charged a fee (“Quality Assurance Re-Evaluation Fee”), and you will provide complimentary accommodations
for the quality assurance auditor, each time we conduct a special on-site quality assurance re-evaluation: (a) after the Hotel has failed a regular quality assurance 

  

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evaluation; or (b) to verify that deficiencies noted in a quality assurance evaluation report or product improvement plan (“PIP”) have been
corrected or completed by the required dates. The Quality Assurance Re-Evaluation fee is currently $1,500 and is subject to change by us from time to time provided that any change will be established in the Manual. Our approval of an action plan
does not waive any rights we may have under this Agreement, nor does it relieve you of any obligations under this Agreement. We may place materials required for System and Hilton purposes at the Hotel. 
 f. Manual. We will issue the Manual to you, and any revisions and updates we may make to the Manual. 
 g. Equipment and Supplies. We will make available to you for use in the Hotel various purchase, lease, or other arrangements for exterior signs,
operating equipment, operating supplies, and furnishings, which we or Hilton may have and which we make available to other System hotels. 
 4.
Proprietary Rights 
 You acknowledge, and will not contest, either directly or indirectly during the License Term or after termination or expiration of
this Agreement: (i) our (and/or any Entities’) ownership of, rights to and interest in the System, Licensed Brand, Marks and any of their element(s) or component(s), including present and future distinguishing characteristics;
(ii) our sole right to grant licenses to use all or any element(s) or component(s) of the System; (iii) that we (and/or the Entities) are the owner of (or the licensee of, with the right to sub-license) all right, title and interest in and
to the Licensed Brand and the Marks used in any form and in any design, alone or in any combination, together with the goodwill they symbolize; and (iv) the validity or ownership of the Marks. You acknowledge that these Marks have acquired a
secondary meaning which indicates that the Hotel, Licensed Brand and System are operated by or with Hilton’s approval. All improvements and additions to, or associated with, the System, all Marks, and all goodwill arising from your use of the
System and the Marks, will inure to our benefit and become our property (or the Entities), even if you develop them. At our request, you will promptly assign to us any rights or registrations to the Marks that you obtain. You acknowledge that you
are not entitled to receive any payment or other value from us or from any of the Entities for any goodwill associated with your use of the System or the Marks, or any element(s) or component(s) of the System. 
 5. Proprietary Marks 
 a. Use of Trade Name.
You will operate under, and prominently display, the Marks in the Hotel. You will not adopt any other names in operating the Hotel that we do not approve. You also will not use any of the Marks, or the word “Hilton,” or other Network
trademarks, trade names or service marks, or any similar word(s) or acronyms, in: (i) your corporate, partnership, business or trade name except as we provide in this Agreement or the Manual; (ii) any Internet-related name (including a
domain name), except as we provide in this Agreement or in the Manual; or (iii) any business operated separately from the Hotel, including the name or identity of developments adjacent to or associated with the Hotel. You agree that any
unauthorized use of the Marks will be an infringement of our rights and a material breach of this Agreement. 
 b. Trademark Disputes.
We and you each agree that the protection of the Marks and their distinguishing characteristics as standing for the System is important to all of us. Accordingly, you will immediately notify us of any infringement or dilution of or challenge to
your use of any of the Marks and will not, absent a court order or our prior written consent, communicate with any other person regarding any such infringement, dilution, challenge or claim. We will take the action we deem appropriate with respect
to such challenges and claims and have the sole right to handle disputes concerning use of all or any part of the Marks or the System. You will fully cooperate with us at your reasonable expense in these matters. You appoint us as your exclusive
attorney-in-fact, to prosecute, defend and/or settle all disputes of this type at our sole option. You will sign any documents we believe are necessary to prosecute, defend or settle any dispute or obtain protection for the Marks and the System and
assign to us any claims you may have related to these matters. Our decision as to the prosecution, defense and settlement of the dispute will be final. All recoveries made as a result of disputes regarding use of all or part of the System or the
Marks will be for our account. 
  

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 c. Web Sites. You may not register, own, maintain or use any domain names, World Wide Web or other
electronic communications sites (collectively, “Site(s)”), relating to the Network or the Hotel or that include the Marks. The only domain names, Sites, or Site contractors that you may use relating to the Hotel or this Agreement
are those we assign or otherwise approve in writing. You must also obtain our prior written approval concerning any third-party Site in which the Hotel will be listed, and any proposed links between such Site and any other Site(s) (“Linked
Sites”) and any proposed modifications to all Sites and Linked Sites. All Sites containing any of the Marks and any Linked Sites must advertise, promote, and reflect on the Hotel and the System in a first-class, dignified manner. You
acknowledge and agree that our right to approve all materials is necessitated by the fact that those materials will include and be linked with our Marks. Therefore, any use of the Marks on the World Wide Web, the Internet, or any computer
network/electronic distribution, must conform to our requirements, including the identity and graphics standards for all System hotels. Given the changing nature of this technology, we have the right to withhold our approval, and to withdraw any
prior approval, and to modify our requirements. 
 You acknowledge that you may not, without a legal license or other legal right, post on your Site(s) any
material in which any third party has any direct or indirect ownership interest (including video clips, photographs, sound bites, copyrighted text, trademarks or service marks, or any other text or image in which any third party may claim
intellectual property ownership interests). You must also incorporate on your Site(s) any information we require in the manner we deem necessary to protect our Marks. 
 Upon the expiration or termination of this Agreement, you must irrevocably assign and transfer to us (or to our designee) all of your right, title and interest in any domain name listings and registrations that
contain any reference to our Marks, System, Network or Licensed Brand, and will notify the applicable domain name registrar(s) of the termination of your right to use any domain name or Site(s) associated with the Marks or the Licensed Brand, and
will authorize and instruct the cancellation of the domain name, or transfer of the domain name to us (or our designee), as we specify. You will also delete all references to our Marks, System, Network or Licensed Brand from any Site(s) you own,
maintain or operate beyond the expiration or termination of this Agreement. 
 d. Covenant. You agree, as a direct covenant with
Hilton, that you will comply with all of the provisions of this Agreement related to the manner, terms and conditions of the use of the Marks, and the termination of any right on your part to use any of the Marks. Any non-compliance by you with this
covenant, the terms of this Agreement, or any unauthorized or improper use of the System or the Marks will cause irreparable damage to us and/or to the Entities. If you engage in this non-compliance, or unauthorized and/or improper use of the System
or the Marks during or after the License Term, Hilton, its successors and assigns, separately or along with us, will be entitled to both temporary and permanent injunctive relief against you from any court of competent jurisdiction, in addition to
all other remedies that Hilton or we may have at law. You consent to the entry of such temporary and permanent injunctions. You must pay all costs and expenses, including, reasonable attorneys’ fees that we, Hilton and/or the Entities may incur
in connection with your non-compliance with this covenant. 
 6. Your Responsibilities 
 a. Operational and Other Requirements. During the License Term, you must: 
 (1) promptly pay to us, or reimburse us for, all amounts due to us and/or Hilton under Paragraph 7 below, and for any other charges due
under this Agreement or for goods and services you or your agents purchase from us and/or Hilton; 
 (2) operate the Hotel
twenty-four (24) hours a day every day, except as we may otherwise permit based on special circumstances; 
  

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 (3) operate, furnish, maintain and equip the Hotel in a clean, safe and orderly manner
and in first-class condition in accordance with the provisions of this Agreement and the Manual, and in compliance with all Applicable Laws (as defined in Subparagraph 6.a.(16) below, including maintaining and conducting your business in accordance
with sound business and financial practices; 
 (4) provide efficient, courteous and high-quality service to the public;

 (5) adopt, use and comply with the standards, requirements, services, products, programs, materials, specifications,
policies, methods, procedures, and techniques in the Manual, as it may be amended by us from time to time, and keep your Manual current at all times; 
 (6) comply with System standards, specifications and requirements regarding the purchase of products and services, including furniture, fixtures, equipment, food, operating supplies, consumable inventories,
merchandise for resale to be used at, and/or sold from, the Hotel, in-room entertainment, computer networking, and any and all other items used in the operation of the Hotel (collectively, the “Supplies”), including our
specifications for all Supplies. We may from time to time require you to purchase a particular brand of product (“Required Brand”); however, you may purchase this Required Brand from any authorized source of distribution;

 (7) comply with System standards, specifications and requirements as to the types and levels of services, amenities and
products that either must or may be used, promoted or offered at or in connection with the Hotel; 
 (8) install, display, and
maintain signage displaying or containing the Licensed Brand name and other distinguishing characteristics in accordance with plans, specifications and standards we establish for System hotels; 
 (9) comply with System requirements for the training of persons involved in the operation of the Hotel, including completion by the
general manager and other key personnel of the Hotel of a training program for operation of the Hotel under the System at a site we designate, except that if, in our sole opinion, it is not necessary or desirable for the general manager or any other
key personnel of the Hotel to complete that training program, then we may waive this requirement in whole or in part. You will pay us for all fees and charges, if any, we require for your personnel to attend these training program(s) on the same
basis as we charge other System hotels. You will also be responsible for the wages, room, board and travel expenses of your personnel; 
 (10) purchase and maintain property management, revenue management, in-room entertainment, telecommunications and other computer and technology systems we designate as System-wide (or area-wide) programs based on our
assessment of the long-term best interests of System hotels, considering the interest of the System as a whole; 
 (11)
advertise and promote the Hotel and related facilities and services on a local and regional basis in a first-class, dignified manner, using our identity and graphics standards for all System hotels, at your cost and expense. You must submit to us
samples of all advertising and promotional materials that we have not previously approved (including any materials in digital, electronic or computerized form, or in any form of media that exists now or is developed in the future) before you produce
or distribute them. You will not begin using the materials until we approve them. You must immediately discontinue your use of any advertising or promotional materials we reasonably believe is not in the best interest of the Hotel or System, even if
we previously approved the materials; 
 (12) participate in, and pay all charges in connection with (i) all required
System guest complaint resolution programs, which programs may include chargebacks to the Hotel for guest refunds or credits, and (ii) all required System quality assurance programs, such as guest comment card and mystery shopper programs; and
maintain minimum performance standards and scores for quality assurance programs that we may establish from time to time in the Manual; 
  

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 (13) comply with System standards, specifications and requirements as to maintenance,
appearance and condition of the Hotel, and adopt in your business all changes or additions to the System as we may periodically designate; 
 (14) honor all nationally recognized credit cards and credit vouchers issued for general credit purposes that are generally honored at other System hotels, and enter into all necessary credit card and voucher
agreements with the issuers of such cards or vouchers; 
 (15) participate in and use, on the terms in this Agreement and in
the Manual, those reservation services we require (the “Reservation Service”), including any additions, enhancements, supplements or variants we or the Entities develop or adopt; and honor and give first priority on available
rooms to all confirmed reservations referred to the Hotel through the Reservation Service. The only reservation service or system you may use for outgoing reservations referred by or from the Hotel to other hotels will be the Reservation Service or
other reservation services we or the Entities designate; 
 (16) do the following: (i) comply with all applicable laws,
rules, enactments, orders, regulations and governmental requirements (collectively, “Applicable Laws”), including, all applicable privacy laws, securities laws, United States and local trade law and investment sanctions,
export controls, anti-terrorism, anti-boycott, anti-money laundering and anti-bribery laws, rules, and regulations applicable to Licensee, the Hotel (including management and operation of the Hotel), the Hotel Site and the management and operation
and as required to perform the terms of this Agreement; (ii) file and maintain any required trade name or fictitious name registrations; (iii) pay all taxes; and (iv) maintain all governmental licenses and permits necessary to operate
the Hotel in accordance with the System; 
 (17) permit inspection of the Hotel by our representatives at any time to ensure
compliance with System standards, cooperate fully with our representatives during these inspections and take all steps necessary to correct any deficiencies detected within the time periods we specify. You will also provide free lodging to our
personnel at the Hotel while they are making their inspections on a space-available basis; 
 (18) provide to us statistics on
Hotel operations in the form we specify and using definitions we specify; 
 (19) not engage, directly or indirectly, in any
cross-marketing or cross-promotion of the Hotel with any other hotel, lodging or related business, except for Affiliated Hotels (as defined in Subparagraph 6.a.(21)), without our prior written consent; 
 (20) participate in, and promptly pay all fees as we require in the Manual and/or specific program terms, of all System travel agent
commission payment program(s), all travel agent commissions and third party reservation service charges (such as airline reservation systems) in accordance with the terms of these programs, all of which may be modified from time to time; 

(21) refer guests and customers, wherever reasonably possible, only to Licensed Brand, and Network hotels (collectively, the
“Affiliated Hotels”) and (if and as we direct) any other hotel systems owned, managed, or licensed by us and/or the Entities (each, “Other Hotels”) (except that this will not prohibit us from requiring
you to participate in programs designed to refer prospective customers to other hotels, whether in the System or otherwise); display all material, including brochures and promotional material we provide for Affiliated Hotels and Other Hotels; and
allow advertising and promotion only of Affiliated Hotels and Other Hotels on the Hotel premises; 
 (22) treat as
confidential the Manual, and all other information or materials concerning the methods, techniques, plans, specifications, procedures, information, systems and knowledge of and experience in the development, operation, marketing and licensing of the
System (the “Proprietary Information”). You acknowledge and agree that you: (i) do not acquire any interest in the Proprietary Information other than the right to utilize the same in the development and operation of the
Hotel under 

  

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the terms of this Agreement, (ii) will not use the Proprietary Information in any business or for any purpose other than in the development and
operation of the Hotel under the System, (iii) will maintain the absolute confidentiality of the Proprietary Information during and after the License Term, (iv) will not make unauthorized copies of any portion of the Proprietary
Information, and (v) will adopt and implement all reasonable procedures we may periodically establish to prevent unauthorized use or disclosure of the Proprietary Information, including restrictions on disclosure to employees and the use of
non-disclosure and non-competition clauses in agreements with employees, agents and independent contractors who have access to the Proprietary Information. These restrictions will not apply to any information that does not relate or refer in any way
or part to the System, Manual, Licensed Brand and/or Marks and that you can demonstrate came lawfully to your attention before our disclosure or which, at the time of or after our disclosure, becomes a part of the public domain through lawful
publication or communication by others; 
 (23) not become a Competitor without our prior written consent. For purposes of
this Agreement, a “Competitor” is any individual or entity that at any time during the License Term, whether directly or through an Affiliate, owns in whole or in part or is the licensor or franchisor of a hotel brand or trade name
that, in our sole judgment, competes with the System or any hotel owned, operated or franchised by us or any Hilton entity or any of the Entities. These restrictions apply irrespective of the number of hotels owned, licensed or franchised by the
Competitor under such brand name, but do not prohibit you (or your Affiliates) from: (i) owning a minority interest in a Competitor so long as neither you nor any of your Affiliates is a director or employee of the Competitor, provides services
(including as a consultant) to the Competitor, or exercises or has the right to exercise, control or influence over the business decisions of the Competitor; (ii) being a franchisee or licensee of a Competitor; or (iii) managing a property
for a Competitor; 
 (24) own fee simple title (or long-term ground leasehold interest, provided that such interest has been
granted to you by an unrelated third party ground lessor in an arms length transaction for a term equal to, or longer than, the License Term) to the real property and improvements that comprise the Hotel, or, alternatively, at our request, cause the
fee simple owner or other third party acceptable to us, to provide its guarantee covering all of your obligations under this Agreement in form and substance acceptable to us; 
 (25) maintain legal possession and control of the Hotel and Hotel Site (as defined in Subparagraph 11.b. below) for the term of the
Agreement, and promptly deliver to us a copy of any notice of default you receive from any mortgagee, trustee under any deed of trust, or ground lessor for the Hotel, and upon our request, provide any additional information we may request related to
any alleged default or any subsequent action or proceeding in connection with any alleged default; 
 (26) refrain from
directly or indirectly conducting, or permitting by lease, concession arrangement or otherwise, gaming or casino operations in or connected to the Hotel or on the Hotel Site without our express written permission, which we may withhold at our sole
option, and if we grant such permission, comply with the terms of such permission; 
 (27) refrain from directly or indirectly
conducting, or permitting the marketing or sale of timeshares, vacation ownership, fractional ownership, condominiums or like schemes at, or adjacent to, the Hotel without our express written permission, which we may withhold at our sole option, and
if we grant such permission, comply with the terms of such permission; provided, however, that this restriction will not prohibit you from directly or indirectly conducting timeshare, vacation ownership, fractional ownership, or condominium sales or
marketing at and for any property located adjacent to the Hotel that is owned or leased by you so long as: (i) you do not use any of the Marks in such sales or marketing efforts; and (ii) you do not use the Hotel or its facilities in such
sales, marketing efforts, business operations or Hotel facilities; 
 (28) obtain and maintain in full force and effect from
and after the confirmed Opening Date of the Hotel as defined in Attachment A (conditional or otherwise) all licenses required for the sale of alcoholic beverages at the Hotel (unless no alcoholic beverages are offered at or from the premises of the
Hotel); 
  

 8 

 (29) promptly provide to us or Hilton all information we reasonably request about you and
your Affiliates, including your respective beneficial owners, officers, directors, shareholders, partners or members; and/or the Hotel, title to the property on which the Hotel is constructed and any other property used by the Hotel. The information
requested may include, but not necessarily be limited to, financial condition, credit information, personal and family background, business background, litigation, indictments, criminal proceedings and the like; 
 (30) participate in, and pay, all charges related to: (i) our and Hilton’s marketing programs (in addition to programs covered
by the Monthly Program Fee); and (ii) all guest frequency programs we or Hilton require. You must also honor the terms of any discount or promotional programs (including any frequent guest program) that we or Hilton offer to the public on your
behalf, any room rate quoted to any guest at the time the guest makes an advance reservation, and any award certificates issued to Hotel guests participating in these programs; 
 (31) operate the Hotel so as to maximize Gross Rooms Revenue (as defined in Subparagraph 7.b.) consistent with sound marketing and
industry practice and not engage in any conduct that is likely to reduce Gross Rooms Revenue in order to further other business activities; 
 (32) maintain, at your expense, insurance, of the types, and in the minimum amounts, we specify in the Manual. All such insurance must: (i) be with insurers having minimum ratings we specify; (ii) name as
additional insureds the parties we specify in the Manual; and (iii) carry the endorsements and notice requirements we specify in the Manual. If you fail or neglect to obtain or maintain the insurance or policy limits required by this Agreement,
we have the option, but not the obligation to obtain and maintain such insurance without notice to you, and you, will immediately upon our demand, pay us the premiums and cost we incur in obtaining this insurance; 
 (33) refrain from sharing the business operations and Hotel facilities with any other hotel, inn, conference center, lodging facility or
similar business, without our express written permission, which we may withhold at our sole option, and if we grant such permission, comply with the terms of such permission; and 
 (34) refrain from engaging in any tenant-in-common syndication or Transfer of any tenant-in-common interest in the Hotel or the Hotel
Site, without our express written permission, which we may withhold at our sole option, and if we grant such permission, comply with the terms of such permission. This Subparagraph 6.a.(34) supersedes anything to the contrary contained in this
Agreement. 
 b. Hotel Quality Assurance. We may from time to time require you to modernize, rehabilitate and/or upgrade the
Hotel’s fixtures, equipment, furnishings, furniture, signs, computer hardware and software and related equipment, supplies and other items to meet the then-current standards and specifications specified in the Manual. You will make these
changes at your sole cost and expense. Nothing in this paragraph will relieve you from the obligation to maintain acceptable product quality ratings at the Hotel and maintain the Hotel in accordance with the Manual at all times during the License
Term. We may make limited exceptions to some of our standards based on local conditions or special circumstances, but we are not required to do so. You may not make any change in the number of approved guest rooms (the “Guest
Rooms”) in the Rider or any other significant change (including major changes in structure, design or decor) in the Hotel without our prior written approval. Minor redecoration and minor structural changes that comply with our
standards and specifications will not be considered significant. 
 c. Staff and Management. You are at all times responsible
for the management of the Hotel’s business. You may fulfill this responsibility only by providing: (i) qualified and experienced management, which may be a third-party management company (the “Management Company”);
and (ii) a general manager (the “General Manager”), each approved by us in writing. However, you represent and agree that you have not, and will not, enter into any lease, management agreement or other similar

  

 9 

 
arrangement for the operation of the Hotel or any part of the Hotel with any person or entity without our prior written consent. To be approved by us as the
operator of the Hotel, you, any proposed Management Company, and any proposed General Manager must be qualified to manage the Hotel. We may refuse to approve you, any proposed Management Company or any proposed General Manager which, in our
reasonable business judgment, is inexperienced or unqualified in managerial skills or operating capacity or capability, or is unable to adhere fully to the obligations and requirements of this Agreement. You understand that we reserve the right to
not approve a Competitor, or any entity that (through itself or its Affiliate) is the exclusive manager for a Competitor, to manage the Hotel. If the Management Company becomes a Competitor or the Management Company and/or the General Manager
otherwise becomes unsuitable in our sole judgment to manage the Hotel at any time during the License Term, you will have ninety (90) days to retain a qualified substitute Management Company and/or General Manager acceptable to us. Any
Management Company and/or General Manager must have the authority to perform all of your obligations under this Agreement, including all indemnity and insurance obligations. In the case of any conflict between this Agreement and any agreement with
the Management Company or General Manager, this Agreement prevails. 
 d. ResMax Program. From time to time we or an Affiliate may,
but are not obligated to, offer you the the option to participate in the ResMax Program (previously known as the Hotel Direct Center Program) (the “Program”) or a successor to the Program. If the Program is offered to you and you
want to participate in that Program, you must notify us in writing. That notification will be deemed an agreement on your part to comply with the terms and conditions of that Program that are in effect as of the date of your notification and
thereafter, and to pay all additional fees related to your participation in the Program. You or we may terminate your participation in the Program at any time upon thirty (30) days’ prior written notice. We may also terminate your
participation on shorter notice if you default under this Agreement, and we may terminate the Program for System licensees at any time. Whether you participate in the Program will not otherwise affect your obligations under this Agreement. You
acknowledge and agree that the Program is not the Reservation Service referred to in this Agreement, nor is it considered an outside reservation service or system, but rather, it is an optional, supplemental service whereby reservation calls to the
Hotel will be referred to an offsite call center. Whether you participate in the Program, you must continue participating in the Reservation Service. 
 7. Fees 
 a. Monthly Fees. Beginning on the Opening Date, you will pay to us for each month (or part of a
month, including the final month you operate under this Agreement) the Monthly Royalty Fee and a Monthly Program Fee, each of which is defined in the Rider. The amount of the Monthly Program Fee is subject to change by us from time to time. Any
change may be established in the Manual, but any increase in the Monthly Program Fee will not exceed one percent (1%) of the Hotel’s Gross Rooms Revenue in any calendar year, and the cumulative increases in the Monthly Program Fee, during
the License Term, will not exceed five percent (5%) of Gross Rooms Revenue. 
 b. Calculation and Payment of Fees. The monthly
fees (described in Subparagraph 7.a.) will be calculated in accordance with the accounting methods of then current Uniform System of Accounts for the Lodging Industry, or such other accounting methods as may otherwise be specified by us from time to
time in the Manual. “Gross Rooms Revenue,” as used in the calculation of the Monthly Royalty Fee and the Monthly Program Fee under this Agreement, means all revenues derived from the sale or rental of Guest Rooms (both transient and
permanent) of the Hotel, including guaranteed no-show revenue and credit transactions, whether or not collected, at the actual rates charged, less allowances for any Guest Room rebates and overcharges, and will not include federal, state and local
taxes collected directly from patrons or guests. In the event of fire or other insured casualty that results in a reduction of Gross Rooms Revenue, you shall determine and pay us, from the proceeds of any business interruption or other insurance
applicable to loss of revenues, an amount equal to the forecasted Monthly Program Fee and forecasted Monthly Royalty Fee (based upon the Gross Rooms Revenue amount agreed upon between you and your insurance company(ies)) that would have been paid to
us in the absence of such casualty; provided however, we have the right, at our request to participate with you in the determination of the forecasted Gross Rooms Revenue amount for purposes of calculating the Monthly Program Fee and 

  

 10 

 
Monthly Royalty Fee. Group booking rebates, if any, paid by you or on your behalf to third party groups for group stays must be included, and not deducted,
from the calculation of Gross Rooms Revenue. The Monthly Royalty Fee and the Monthly Program Fee will be paid to us at the place we designate on or before the fifteenth (15th) day of each month and will be accompanied by our standard schedule
setting forth in reasonable detail the computation of the Monthly Royalty Fee and Monthly Program Fee for such month. There will be an annual adjustment within ninety (90) days after the end of each operating year so that the total Monthly
Royalty Fees and Monthly Program Fees paid annually will be the same as the amounts determined by audit. We may require you to transmit the Monthly Royalty Fee and the Monthly Program Fee and all other payments required under this Agreement by wire
transfer or other form of electronic funds transfer. You must bear all costs of wire transfer or other form of electronic funds transfer. 
 c. Room Addition Fee. If you desire to add or construct additional Guest Rooms at the Hotel (the “Room Addition”) at any time after you Open the Hotel under the Licensed Brand, you will pay us a
nonrefundable fee equal to the prevailing per Guest Room initial fee charged to System hotels multiplied by the number of additional Guest Rooms (“Room Addition Fee”). You must pay the Room Addition Fee to us when you submit an
application for the Room Addition, and you must submit that application to us before you enter into any agreement to construct the Room Addition. As a condition to our granting approval of your Room Addition application, we may require you to
modernize, rehabilitate or upgrade the Hotel, subject to Subparagraph 6.b. of this Agreement, and to pay us our then prevailing PIP fee (“PIP Fee”) to prepare a PIP to determine the renovation requirements for the Hotel. The Room
Addition Fee will become non-refundable upon our approval of your Room Addition application. If we disapprove your application, we will refund your Room Addition Fee, less a processing fee and the PIP Fee, if any. 
 d. Other Fees. You will timely pay all amounts due any of the Entities for any invoices or for goods or services purchased by or provided to you
or paid by any of the Entities on your behalf, including pre-opening sales and operations training. 
 e. Taxes. If any gross
receipts, sales, use, excise or any similar tax (the “Gross Receipts Tax”) is imposed upon Hilton based on any payment(s) made by you to Hilton related to this Agreement, then you must reimburse Hilton for any such Gross Receipts
Tax to ensure that the amount of your payment(s) Hilton retains after paying the Gross Receipts Tax, equals the full amount of the payment(s) you are required to pay Hilton had such Gross Receipts Tax not been imposed on Hilton. 
 This Subparagraph 7.e., does not apply to income taxes payable by us or Hilton as a result of its net income relating to any fees collected under this Agreement.

 f. Application of Fees. We may apply any amounts received under this
Paragraph 7 to any amounts due under this Agreement. If any amounts are not paid when due, such non-payment will constitute a material breach of this Agreement and, in addition, such unpaid amounts will accrue a service charge beginning on the first
day of the month following the due date of one and one-half percent (1 1/2%) per month or the maximum amount permitted by
Applicable Law, whichever is less. Should we hire counsel to collect any amounts due under this Agreement, and/or any late charges, you will pay our reasonable attorneys’ fees. 
 8. Records and Audits 
 a. Reports. At our
request, you will prepare and deliver to us daily, monthly, quarterly and annual operating statements, profit and loss statements, balance sheets, and other reports (the “Reports”) we require, prepared in the form, and by the
methods and within the time frames, we require. The reports will contain all information we require, including daily rate and room occupancy, and will be certified as accurate in the manner we require. You will also provide us any additional related
information and Reports we may periodically request and permit us to inspect your books and records at all reasonable times. At least monthly, you will prepare a statement that will include all information concerning Gross Rooms Revenue, other
revenues generated at the Hotel, room occupancy rates, reservation data and other information we require (the “Data”). By the fifteenth (15th) day of each month, you will submit to us a statement setting forth the Data
for the previous month and reflecting the computation of the amounts then due under Paragraph 7, in the form and detail we require. 
  

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 b. Maintenance of Records. You will, in a manner and form satisfactory to us and using accounting
and reporting standards we reasonably require, prepare on a current basis (and preserve for no less than the greater of four (4) years or our record retention requirements), complete and accurate records concerning Gross Rooms Revenue and all
financial, operating, marketing and other aspects of the Hotel, and maintain an accounting system that fully and accurately reflects all financial aspects of the Hotel and its business. These records will include books of account, tax returns,
governmental reports, register tapes, daily reports, and complete quarterly and annual financial statements (including profit and loss statements, balance sheets and cash flow statements). 
 c. Audit. We may require you to have the Gross Rooms Revenue or other monies due to us
computed and certified as accurate by a certified public accountant. During the License Term and for two (2) years thereafter, we and our authorized agents have the right to verify information required under this Agreement by requesting,
receiving, inspecting and auditing, at all reasonable times, any and all records referred to above wherever they may be located (or elsewhere if we request). If any inspection or audit reveals that you understated or underpaid any payment due to us
that is not fully offset by overpayments, you will promptly pay to us the deficiency plus interest from the date each payment was due until paid at a rate of one and one-half percent (1 1/2%) per month or the maximum amount permitted by Applicable Law, whichever is less. If the audit or inspection reveals that the underpayment is either willful, or is
for five percent (5%) or more of the total amount owed for the period being inspected, you will also reimburse us for all inspection and audit costs (including reasonable travel, lodging, meals, salaries and other expenses of the inspecting or
auditing personnel). Our acceptance of your payment of any deficiency will not condone your breach of this Agreement, or waive that breach, or any rights we may have for your breach, including our right to terminate this Agreement as provided in
Paragraph 14. If the audit discloses an overpayment, we will credit this overpayment against your future payments under this Agreement, without interest, or if no future payments are due under this Agreement, we will promptly pay you the amount of
the overpayment without interest. 
 d. Ownership of Information. All information we obtain from you or about the Hotel or its
guests under this Agreement, or under any agreement ancillary to this Agreement (including agreements relating to the computerized reservation, revenue management, property management, and other system(s) we provide or require), or otherwise related
to the Hotel (the “Information”), and all revenues we derive from such Information will be our property. You may use information that you acquire from third parties in operating the Hotel, such as customer data, at any time during
or after the License Term to the extent lawful and at your sole risk and responsibility, but only in connection with operating the Hotel. The Information (except for Information you provide to us or Hilton with respect to you and your Affiliates (if
any), including your or your Affiliates’ respective officers, directors, shareholders, partners or members) will become our Proprietary Information which we may use for any reason as we deem necessary or appropriate, in our judgment, including
making a financial performance representation in our FDD. You will abide by all Applicable Laws pertaining to the privacy and security of personal information, including, without limitation, local, regional and national requirements applicable to
the Hotel (“Privacy Laws”). In addition, you will comply with our standards and policies pertaining to the privacy and security of personal information, customer relationships and Privacy Laws. 
 9. Indemnity 
 You must, during and after the License
Term, indemnify us and the Entities, our respective successors and assigns, and the members, officers, directors, employees, agents, and predecessors of each such entity (the “Indemnified Parties”) against, and hold them harmless
from, all losses, costs, liabilities, damages, claims, and expenses, including reasonable attorneys’ fees, arising out of or resulting from (i) any claimed occurrence at the Hotel or arising from, as a result of, or in connection with the
development, construction or operation of the Hotel (including the design, construction, financing, furnishing, equipment, acquisition of Supplies or operation of the Hotel in any way); (ii) any bodily injury, personal injury, death or property
damage suffered or claimed by any guest, customer, visitor or 

  

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 employee of the Hotel; (iii) your alleged or actual infringement or violation of any patent, mark or copyright or
other proprietary right owned or controlled by third parties; (iv) your alleged or actual violation or breach of any contract (including any system-wide group sales agreement), any Applicable Law, or of any industry standard; (v) any other
business conducted by you or a third party in, on or about the Hotel or its grounds; (vi) any other of your or your Affiliates’ acts, errors, omissions or obligations, or those of anyone associated or affiliated with you, your Affiliates
or the Hotel or in any way arising out of or related to this Agreement; or (vii) your failure to comply with Subparagraph 16.o., including a breach of the representations set forth therein. However, you do not have to indemnify the Indemnified
Parties to the extent damages otherwise covered under this Paragraph 9 are adjudged by final, non-appealable judgment of a court of competent jurisdiction to have been solely the result of the gross negligence or willful misconduct of any of the
Indemnified Parties, and not any of the acts, errors, omissions, negligence or misconduct of you or anyone related to you or the Hotel, and so long as the claims asserted against us or any other Indemnified Party are not so advanced on the basis of:
(i) theories of imputed or secondary liability, such as vicarious liability, agency, or apparent agency; or (ii) our failure to compel you to comply with the provisions of this Agreement, including compliance with standards, Applicable
Laws or other requirements. You will give us written notice of any action, suit, proceeding, claim, demand, inquiry or investigation involving an Indemnified Party within five (5) days of your actual or constructive knowledge of it. At our
election, you will defend us and/or the Indemnified Parties against the same, or we may elect to assume (but under no circumstance will we be obligated to undertake) the defense and/or settlement of the action, suit, proceeding, claim, demand,
inquiry or investigation at your expense and risk. We may obtain separate counsel of our choice if we believe your and our interests may conflict. Our undertaking of defense and/or settlement will in no way diminish your obligation to indemnify the
Indemnified Parties and to hold them harmless. You will also reimburse the Indemnified Parties upon demand for all expenses, including reasonable attorneys’ fees and court costs the Indemnified Parties incur to protect themselves, or to remedy
your defaults. Under no circumstances will the Indemnified Parties be required to seek recovery from third parties or otherwise mitigate their losses to maintain a claim against you, and their failure to do so will in no way reduce the amounts
recoverable from you by the Indemnified Parties. Further, you will indemnify the Indemnified Parties for any claim for damages by reason of the failure of any contractor, subcontractor, supplier or vendor doing business with you relating to the
Hotel to maintain adequate insurance as required in the Manual. 
 You acknowledge and agree that you are directly responsible for all fees and charges due
and owing us and the Entities related to the prior franchise license agreement for the Hotel, if any such fees and charges remain outstanding as of the Effective Date. 
 10. Notice Concurrent to Offering a Marketed Interest 
 Except in the case of a Permitted Transfer (as defined in
Subparagraph 11.b.(2) below), if you, an Affiliate which, directly or indirectly, controls the Hotel and/or controls the entity which owns the Hotel (the “Controlling Affiliate”) want to market the Hotel for sale or lease (other
than the commercial space within the Hotel) or to sell the entity that owns the Hotel, or a controlling interest in that entity, or to sell a Controlling Affiliate, or controlling interest in a Controlling Affiliate (collectively, the
“Marketed Interest”), you must give us written notice concurrently when you begin to market such Marketed Interest for sale or lease. 
 11. Transfer 
 a. Our Transfer. We may transfer or assign this Agreement or any of our rights, obligations, or assets
under this Agreement to any person or legal entity. You acknowledge and agree that this Agreement is a license for the Licensed Brand only, and the programs that are unique to the Licensed Brand. Therefore, if we transfer or assign this Agreement,
your right to use any programs, rights or services related to or provided by the Entities or their designees, including the Reservation Service, any guest frequency program not unique to the Licensed Brand, and any Marks (except the principal name
identified in the Rider), may terminate. The transferee must assume all of our other obligations to you under this Agreement. 
  

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 b. Your Transfer. We recognize that at some time, you or other persons associated with you or the
Hotel may want to sell or transfer all or part of an interest in this Agreement, in the Licensee, in the Hotel, or in the property on which the Hotel is located (“Hotel Site”). At the same time, you understand and acknowledge that
the rights and duties in this Agreement are personal to you, and that we are entering into this Agreement in reliance on your business skill, financial capacity, and personal character (if you are an individual), and that of your officers,
directors, partners, members, shareholders or trustees (if you are a partnership, company, corporation, trust or other legal entity). As a result, if you or other persons associated with you or the Hotel desire to sell, transfer or lease this
Agreement, or any interest in the Licensee, Hotel, or Hotel Site, or in any entity that has an interest in this Agreement, the Licensee, the Hotel, or the Hotel Site, you must comply with this Subparagraph 11.b. 
 References in this Agreement to “Equity Interest” mean any direct or indirect beneficial interest in the Licensee, the Hotel and/or the Hotel Site.
References in this Agreement to an “Equity Owner” mean the owner of a direct or indirect Equity Interest. References in this Agreement to a “Publicly Traded Equity Interest” mean any Equity Interest that is traded
on any securities exchange or is quoted in any publication or electronic reporting service maintained by the National Association of Securities Dealers, Inc., or any of its successors. In computing changes of Equity Interests, limited partners will
not be distinguished from general partners except as provided below. General partners, managing members and other controlling interests in Licensee will be considered Equity Owners for purposes of this paragraph, regardless whether they have any
actual ownership interest in the Licensee. Non-voting equity interests may not qualify as an Equity Interest, in our judgment. Our judgment will be final if there is any question as to the definition of Equity Interest or as to the computation of
relative Equity Interests. You represent that as of the Effective Date the Equity Interests are directly and (if applicable) indirectly owned as shown in the Rider. References in this Agreement to a “Transfer”, in all its forms,
mean any sale, lease, assignment or transfer in any way of a direct or indirect Equity Interest. 
 (1) Transfers That Do
Not Require Our Consent or Notification. 
 (a) Privately Held Equity Interests: Less than 25% Change/No Change of
Control. An Equity Interest that is not publicly traded may be Transferred without notice to us and without our consent, if after the transaction: (i) less than twenty-five percent (25%) of the Equity Interest in the Licensee
(excluding any Transfer under Subparagraph 11.b.(1) (b) below) will have changed hands since the date of this Agreement; and (ii) any such Transfer will not result in a change of control of the Licensee, the Hotel or the Hotel Site.

 (b) Publicly Traded Equity Interests. A Publicly Traded Equity Interest may be Transferred without
notice to us and without our consent if the Transfer does not result in a change in the ownership of the controlling Equity Interest. 
 (c) Commercial Leases. You may lease or sublease commercial space in the Hotel that is customarily subject to lease, or enter into concession arrangements in the ordinary course of business at the Hotel,
without notice to us and without our consent. 
 (d) Hotel Site. If the Hotel Site is owned by an unrelated
third-party lessor, then such lessor may Transfer an Equity Interest in the Hotel Site without notice to us and without our consent provided that, after completion of such Transfer, you remain in compliance with the requirements of Subparagraphs
6.a.(24), 6.a.(25) and 6.a.(34) of this Agreement. 
 (2) Permitted Transfers. Each Transfer of an Equity Interest or a
transfer of this Agreement as described in Subparagraphs 11.b.2.(a) – (e) below is referred to as a “Permitted Transfer.” We will consent to a Permitted Transfer, so long as you: (i) give us sixty (60) days advance
written notice of any proposed Permitted Transfer (the “Permitted Transfer Consent Request”); and (ii) submit to us a nonrefundable processing fee of Three Thousand Dollars ($3,000) with the Permitted Transfer Consent Request,
and meet the requirements for the particular Permitted Transfer as described below. 
  

 14 

 (a) Affiliate Transfer. You or any Equity Owner as of the Effective Date may sell,
lease, transfer or otherwise convey any Equity Interest or transfer this Agreement to an Affiliate (each an “Affiliate Transfer”); provided that: (i) such event does not, in our opinion, result in a change of control of the
Licensee, the Hotel or the Hotel Site; (ii) you are not then in material default under this Agreement; (iii) the Affiliate Transfer is not, directly or indirectly, to a Competitor; and (iv) you otherwise satisfy the conditions in
Subparagraphs 11.b.(3)(a) - (g), (i) and (j) below that we may require you to satisfy. 
 (b) Family
Transfers. If you or any Equity Owner as of the Effective Date are a natural person, and desire to sell, lease, transfer or otherwise convey any Equity Interest or transfer this Agreement to: (i) a member or member of your or any such
Equity Owner’s immediate family i.e. spouse, children, parents, siblings (“Family Members”); or (ii) a trust or trusts for the benefit of Equity Owner or the Equity Owner’s Family Member(s) (each, a
“Family Transfer”), in either case, without causing a change of control of the Licensee, the Hotel or the Hotel Site, we will not withhold our consent to a Family Transfer if you otherwise satisfy the conditions in
Subparagraphs 11.b.(3)(a) - (g), (i), and (j) below that we may require you to satisfy. 
 (c) Transfer Upon
Death. Upon the death of a Licensee or Equity Owner, the Equity Interest or this Agreement may transfer in accordance with such person’s will or, if such person dies intestate, in accordance with laws of intestacy governing the distribution
of such person’s estate (“Transfer Upon Death”), without our consent, provided that (i) the Transfer Upon Death is to a Family Member or to a legal entity formed by such Family Member(s); and (ii) within one
(1) year after the death, such Family Member(s) or entity meets all of our then current requirements for an approved applicant. 
 (d) Bricks and Mortar Transfer. If you or your Affiliate own the Hotel and/or Hotel Site, you or your Affiliate may sell, lease, transfer or otherwise convey the Hotel and/or the Hotel Site (a “Bricks and Mortar
Transfer”), provided that: (i) if in our judgment, after completion of the Bricks and Mortar Transfer, you retain legal possession and control of the Hotel and/or the Hotel Site as ground lessee under a long-term ground lease agreement
with an unrelated third-party lessor; (ii) you retain the management control of the Hotel operations, and continue to comply with the requirements of Subparagraphs 6.a.(24), 6.a.(25) and 6.a.(34) of this Agreement; (iii) you are not then
in material default under this Agreement; (iv) the Bricks and Mortar Transfer is not, directly or indirectly, to a Competitor; and (v) you otherwise satisfy the conditions in Subparagraphs 11.b.(3)(a) - (g), (i) and (j) below
that we may require you to satisfy. If, in our judgment, the Bricks and Mortar Transfer will result in your loss of possession or control of the Hotel or Hotel Site or management of the Hotel, the sale will then be considered a Change of Ownership
(as defined below) and you must comply with the provisions of Subparagraph 11.b.(3). 
 (e) Privately Held Equity
Interests: 25% or Greater Change/No Change of Control. You or any Equity Owner as of the Effective Date may sell, lease, transfer or otherwise convey an Equity Interest if, after the completion of such conveyance: (i) twenty-five percent
(25%) or more cumulative Equity Interest in Licensee (excluding any Transfer under Subparagraph 11.b.(1) (b) above) will have changed hands since the Effective Date of this Agreement; (ii) such event does not, in our opinion, result
in a change of control of the Licensee, the Hotel or the Hotel Site; (iii) you are not then in material default under this Agreement; (iv) the Transfer is not, directly or indirectly, to a Competitor; and (v) you otherwise satisfy the
conditions in Subparagraphs 11.b.(3)(a) - (g), (i) and (j) below that we may require you to satisfy. 
 (3)
Change of Ownership Transfer. Any proposed Transfer that does not otherwise qualify as a Transfer that does not require our consent or notification pursuant to Subparagraph 11.b.(1) or a Permitted Transfer pursuant to Subparagraph 11.b.(2) above
will be considered a change of ownership Transfer (a “Change of Ownership”). You must give us at least sixty (60) days advance written notice of any proposed Change of Ownership. If there is a proposed Change of Ownership and
the proposed new owner (the “Transferee Licensee”) desires to continue to operate the Hotel as a System hotel, the Transferee Licensee must submit to us a complete application for a new franchise license agreement (the
“Change of Ownership Application”) accompanied by payment of our then 

  

 15 

 
prevailing development services fee. If we do not approve the Change of Ownership Application, we will refund the development services fee, less Seven
Thousand Five Hundred Dollars ($7,500) for processing costs. We may also require you or the Transferee Licensee to pay the then prevailing PIP Fee for us to determine the renovation requirements for the Hotel. If we approve the Change of Ownership
Application, we may require the Transferee Licensee to pay any other applicable fees and charges we then impose for new Licensed Brand franchise licenses. 
 We will process the Change of Ownership Application in accordance with our then current procedures, including review of criteria and requirements regarding upgrading of the Hotel, credit, background investigation,
operations abilities and capabilities, prior business dealings, market feasibility, guarantees, and other factors we consider relevant. We will have sixty (60) days from our receipt of the completed and signed application to consent or withhold
our consent to the Transferee Licensee and/or Change of Ownership. During that time you authorize us to communicate with the Transferee Licensee and to provide to the Transferee Licensee any information we have about the Hotel and the market in
which the Hotel operates. 
 We may, at our option, or as applicable, make our consent subject to satisfaction of certain
conditions, including: 
 (a) You must cure any existing defaults or events that would become defaults with the giving of
notice and passage of time, including, the payment in full at the closing of the Transfer (the “Closing”) of all unpaid obligations owed to us and any Entities by you, and/or the renovation by you (or the Transferee Licensee for a
Change of Ownership Transfer) of all or part of the Hotel; 
 (b) We must receive evidence that insurance coverage, as
required by this Agreement, is in full force and effect on the date of Closing; 
 (c) We must receive payment of the amount
of any fees and charges we estimate will accrue to us or any of the Entities through the date of Closing; 
 (d) At all times
pending the Closing, you must remain in compliance with the terms of this Agreement; 
 (e) You must sign an estoppel and a
general release in a form satisfactory to us of any and all claims, demands and causes of action that you and related parties may or might have against us, the Entities and related parties in their corporate and individual capacities, including
claims arising under any Applicable Laws.; 
 (f) You must submit to us all information related to the Transfer that we may
reasonably require, including: (i) copies of any Transfer agreement(s); (ii) copies of organizational documents; (iii) a description of the proposed ownership; and (iv) financial statements and business information for all
participants in the proposed Transfer (collectively, the “Transfer Information”); 
 (g) You must provide us
with evidence and all adequate assurances we may request (as determined by us in our sole and absolute discretion) of the Transferee Licensee’s (or any new Equity Owner’s) assumption of and ability to perform all, or its pro rata share, of
your (or the Transferring Equity Owner’s) obligations under this Agreement; 
 (h) You must execute our then-current
standard form of voluntary termination agreement covering termination of this Agreement, and cause the Transferee Licensee to execute a new franchise license agreement (“New License”) with us. The New License will: (i) be on
our then current form for the grant of new franchise licenses; (ii) contain our then current license terms; and (iii) contain upgrading and other requirements, if any, that we impose; 
  

 16 

 (i) You must cause the guarantor, if any, to execute our then-current standard form of
guarantee of franchise license agreement in accordance with the provisions of Subparagraph 6.a.(24) and 14.a.(4) of this Agreement or as otherwise required under the provisions of the New License; and 
 (j) The new Equity Owner(s), Transferee Licensee and new General Manager and/or employees of the Management Company must successfully
complete any training and orientation programs we require. 
 We may withhold our consent to any proposed Transfer if any of
these conditions are not met to our satisfaction, or if the Transferee Licensee is a Competitor. If we approve the Change of Ownership Application, you will not be liable for any liquidated damages for early termination of this Agreement as long as
the New License is signed by the Transferee Licensee no later than the Closing of the Change of Ownership transaction, and all conditions to our execution of the New License have been satisfied. If we do not approve the Change of Ownership
Application, or if you or the Transferee Licensee do not comply with all these conditions and the Transfer still occurs, then you will be in material default of this Agreement and we will be entitled to all of our remedies, including the right to
terminate this Agreement, and the right to payment of all amounts in Subparagraph 14.c. 
 (4) Public Offering. If you
and/or any of the Equity Owners Offer to Sell or Sell any Securities in the Licensee, the Hotel or the Hotel Site, you must comply with the terms and conditions in this Subparagraph 11.b.(4). All materials required by any Applicable Law for the
Offer or Sale of those Securities must be submitted to us for review at least twenty (20) days before the date you distribute those materials, or file them with any governmental agency, including any materials to be used in any offering exempt
from registration under any securities laws. Upon our request, you must submit to us a non-refundable Five Thousand Dollar ($5,000) processing fee with the offering documents, and pay any additional costs we may incur in reviewing your documents,
including reasonable attorneys’ fees. Except as legally required to describe the Hotel in the offering materials, you also may not use any of the Marks or otherwise imply Hilton’s or our participation in or endorsement of any Securities or
any Securities offering. We will have the right to approve any description of this Agreement or of your relationship with us, or any use of the Marks, contained in any Prospectus, Offering Memorandum or other communications or materials you use in
the Sale or Offer of any Securities. To the extent we give you any comments to your documents, you must modify the documents to address those comments, satisfactory to us, before filing or distributing the documents. Our review of these documents
will not in any way be considered our agreement with any statements contained in those documents, including any projections, or our acknowledgment or agreement that the documents comply with any Applicable Laws. 
 You may not sell any Securities unless you do so in compliance with all Applicable Laws, and unless you clearly disclose to all purchasers
and offerees that: (i) neither we, nor any Entity, nor any of our or their respective officers, directors, agents or employees, will in any way be deemed an Issuer or Underwriter of the Securities; and (ii) we, the Entities, and our
respective officers, directors, agents and employees have not assumed and will not have any liability or responsibility for any financial statements, Prospectuses or other financial information contained in any Prospectus or similar written or oral
communication. You must indemnify, defend and hold the Indemnified Parties free and harmless of and from any and all liabilities, costs, damages, claims or expenses arising out of or related to the Sale or Offer of any of your Securities to the same
extent as provided in Paragraph 9 of this Agreement. All capitalized terms used in this Subparagraph 11.b.(4) that are not defined elsewhere in this Agreement will have the same meaning as in the Securities Act of 1933, as amended. 
 (5) Transfers to a Restricted Person. You may not: (a) assign or transfer this Agreement, any interest in this Agreement, or
any rights or obligations hereunder to a Restricted Person (as defined in Subparagraph 16.o. below) or to an entity owned or controlled by a Restricted Person; or (b) allow or sustain a Transfer to a Restricted Person or to an entity owned or
controlled by a Restricted Person. 
  

 17 

 (6) Transfers Not in Accordance With This Agreement. Any purported Transfer or
assignment of this Agreement, by operation of law or otherwise, that is not in accordance with the provisions of this Agreement, will be null and void and will constitute a material breach of this Agreement, and will allow us to terminate this
Agreement without giving you any opportunity to cure. Further, we will have all other rights and remedies, including the right to specific performance or mandatory or prohibitory injunctive relief, to redress any attempt on your part to Transfer an
Equity Interest or this Agreement in breach of the provisions of this Agreement. 
 (7) Pledge to Lending Institution.
Notwithstanding any other provision of this Agreement, you do not need to notify us or obtain our approval if you or any Equity Owner want to pledge or mortgage the Hotel or any Equity Interest as security for a loan from a third-party bank or other
commercial lending institution that is not directly, or through an Affiliate, a Competitor; provided that the proceeds are used for the direct benefit of the Hotel and you (and/or any guarantor) are the sole borrower. However, you must notify us and
obtain our approval if you or any Equity Owner pledge or mortgage the Hotel or any Equity Interest if the loan will be made to any other borrower(s) and/or secured by any other hotel(s) or other collateral. In addition, before you pledge this
Agreement, you must notify us and obtain our approval. We have the right to charge you a fee for our review of these requests. We may, among other things, condition our approval of a pledge or mortgage of this Agreement on the lender and you
executing a “lender comfort letter” agreement in a form satisfactory to us that describes our requirements on foreclosure, and includes an estoppel and general release of claims that you may have against us, the Entities and related
parties in their corporate and individual capacities. 
 12. Condemnation and Casualty 
 a. Condemnation. You will, at the earliest possible time, give us notice of any proposed taking of any portion of the Hotel by eminent
domain. If we agree that the Hotel or a substantial part of the Hotel is to be taken, we may, at our option and within one hundred twenty (120) days of the taking transfer this Agreement to a nearby location you select. If we approve a new
location, and if within one (1) year of the closing of the Hotel you open a new hotel (or are diligently proceeding toward opening a new hotel and ultimately do so) at the new location in accordance with our specifications and in accordance
with our timing requirements, then the new hotel will be deemed to be the Hotel licensed under this Agreement. If a condemnation takes place and a new hotel does not, for whatever reason, become the Hotel under this Agreement in strict accordance
with this Paragraph 12 (or if it is reasonably evident to us that this will be the case), then we may terminate this Agreement immediately upon notice to you, and we will not require you to pay a Termination Fee (as defined in Subparagraph 14.c.
below). 
 b. Casualty. If the Hotel is damaged by fire or other casualty, you will immediately notify us. If the damage or
repair requires closing the Hotel, you may choose to repair or rebuild the Hotel according to our standards, provided you: (i) immediately notify us (ii) begin reconstruction within four (4) months after closing; and (iii) reopen
the Hotel for continuous business operations as soon as practicable (but in any event within one (1) year after the closing of the Hotel), giving us ample advance notice of the date of reopening. We may, in our sole discretion, extend the time
for commencement of construction and re-opening of the Hotel. Until we determine that the Hotel can be re-opened as a System hotel, the Hotel will not promote itself as a System hotel, or otherwise identify itself with any of the Marks without our
prior written consent. You and we each have the right to terminate this Agreement if you elect not to repair or rebuild the Hotel as set forth above in this Paragraph 12, provided the terminating party gives the other party sixty (60) days
written notice, in which case we will not require you to pay a Termination Fee; provided however, if after the termination notice and before the expiration of three (3) years thereafter or the natural expiration of the License Term, whichever
is earlier, you, or any of your Affiliates, have a controlling interest in and/or operate a hotel at this Hotel Site and that hotel is not operated under a license or franchise from one of the Entities, then you must pay us the Termination Fee upon
our demand. 
 c. No Extensions of Term. Nothing in this Paragraph 12 will extend the License Term. 
  

 18 

 13. Term of License 
 Unless terminated earlier, this Agreement will expire without notice on the date in the Rider. You acknowledge and agree that this Agreement is non-renewable and that this Agreement confers upon you absolutely no rights of license renewal
or extension whatsoever following the expiration of the License Term. 
 14. Termination 
 a. Termination, Suspension or Other Interim Remedies by Us on Advance Notice. In addition to our right to immediately terminate this Agreement upon
the occurrence of any of the events listed in Subparagraph 14.b, we may terminate this Agreement immediately upon notice to you if you fail to cure an Event of Default (as defined in Subparagraph 14.a.(1)) within thirty (30) days after we
furnish notice of default to you based on the Event of Default or, if there is a non-monetary Event of Default that is incapable of cure within thirty (30) days, if you fail to begin to cure within such thirty (30) day period, or fail to
diligently pursue cure of the default or fail to cure the default within the additional time periods we set forth in the notice of default. In lieu of termination, at our sole option, we may elect to postpone termination for a period of time we
alone determine and impose one or more of the Interim Remedies listed below in subsection (3), and you expressly agree that, we will continue to retain the right which we may exercise at any time we determine to terminate this Agreement. 

(1) An “Event of Default” will occur if you fail to satisfy or comply with any of the obligations, requirements,
conditions, or terms in (i) this Agreement, the Manual (including the standards in the Manual and minimum performance scores required by the Manual), or any attachment to this Agreement; or (ii) any other agreement you have with us, or any
of the Entities, relating to the Hotel, including, any computer system agreement, or any agreement to manage the Hotel. An Event of Default will also occur if you make any misrepresentations to us, whether in entering into this Agreement, or in
performing your obligations to us. 
 (2) Our notice of termination will not relieve you of your obligations under this
Agreement or any of its attachments. 
 (3) After expiration of the applicable notice and cure periods, if any, that would
allow us to terminate this Agreement, we may at anytime elect to postpone termination for a period of time we alone determine and impose any one or more of the following interim remedies (each, an “Interim Remedy”), including the
suspension of our obligations under this Agreement and/or Hilton’s obligations under the Hilton Information Technology System Agreement, and any other agreement between you and us or any of the Entities related to the Hotel and/or the property
upon which the Hotel is located (collectively, “Your Agreements”): 
 (a) We and/or Hilton may suspend the
Hotel from any reservation and/or website services. We may remove the listing of the Hotel from any directories we publish, and from any advertising we publish, and/or remove or suspend the Hotel from the Reservation Service. If we suspend the Hotel
from the Reservation Service, we may divert reservations previously made for the Hotel to other System hotels. 
 (b) We
and/or Hilton may disable all or any part of the software provided to you under Your Agreements, and/or may suspend any one or more of the information technology and/or network services that we and/or Hilton provide or support under Your Agreements.

 (c) We and/or Hilton may charge you for: the cost of any computer hardware, computer software, other information technology
and/or information technology service which we and/or Hilton provided to you at no additional charge other than the fees you paid under Your Agreements; costs related to suspending or disabling your right to use any software systems or technology we
and/or Hilton provided to you, together with intervention or administration fees in the Manual; and, the cost of any computer hardware, computer software, other information technology and/or 

  

 19 

 
information technology service we and/or Hilton determine to provide you (at our and Hilton’s option) (each, an “Information Technology
Recapture Charge”) after the date of our notice of default. An Information Technology Recapture Charge may, at our sole option, take the form of one or more specific dollar amounts and/or of a percentage increase to any of the fees charged
based on a percentage of your Gross Rooms Revenue under this Agreement and/or Your Agreements (a “Percentage Fee”). If an Information Technology Recapture Charge consists of one or more specific dollar amounts, then you must pay
each such amount to us or Hilton immediately upon demand. If an Information Technology Recapture Charge consists of an increase to a Percentage Fee, you must pay the increased Percentage Fee when and as Your Agreements required you to pay the
original fee (as applicable). You understand and agree that these increases may be levied on any Percentage Fee notwithstanding any other provision of this Agreement and/or any other of Your Agreements. 
 If, after we impose any Interim Remedy, but before we exercise our reserved right to terminate this Agreement (as provided above), you
completely cure to our satisfaction the subject Event(s) of Default, then we may either elect to terminate this Agreement despite your untimely cure, or, at our sole option, elect not to terminate this Agreement. If the latter, we will withdraw the
Interim Remedy on a going-forward basis. 
 You agree that our exercise of the right to elect Interim Remedies will not result
in actual or constructive termination or abandonment of this Agreement, and that the rights granted to us in this clause (3) to elect Interim Remedies are in addition to, and apart from, any other rights we may have in this Agreement, including
our reserved right to terminate this Agreement. If we exercise the right to elect Interim Remedies, the exercise will not be a waiver of any breach by you of any term, covenant or condition of this Agreement. You will not be entitled to any
compensation, including repayment, reimbursement, refund or offsets, for any fees, charges, expenses or losses you may directly or indirectly incur by reason of our exercise and/or withdrawal of any Interim Remedy. 
 (4) In addition to the cure requirements specified in our written notice of an Event of Default, we may also require you to cause
person(s) or entity(ies) acceptable to us to guarantee all of your obligations under this Agreement by executing our then-current standard form guarantee. 
 b. Immediate Termination by Us. We may terminate this Agreement immediately upon notice to you (or terminate it at the earliest time permitted by Applicable Law) if one or more of the following breaches to this
Agreement or any of its attachments occur: 
 (1) After curing any material breach of this Agreement or the Manual, you engage
in the same noncompliance within any consecutive twenty four (24) month period, whether or not the noncompliance is corrected after notice; or after we have notified you of your noncompliance with any of the requirements imposed by this
Agreement or the Manual, regardless of materiality, you engage in a pattern of noncompliance with any of those requirements, whether or not the noncompliance is corrected after notice, which pattern of non-compliance in and of itself will be deemed
material; 
 (2) You, or any guarantor of your obligations under this Agreement: 
 (a) Generally fails to pay its debts as they become due or admits in writing its inability to pay its debts, or makes a general assignment
for the benefit of its creditors; 
 (b) Commences any case, proceeding or other action seeking reorganization, arrangement,
adjustment, liquidation, dissolution or composition of it or its debts under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, or seeking appointment of a receiver, trustee, custodian or other similar official for it
or for all or any substantial part of its property; 
 (c) Takes any corporate or other action to authorize any of the actions
in clauses (a) or (b) above; 
  

 20 

 (d) Suffers initiation of any case, proceeding or other action against it seeking to have
an order for relief entered against it as debtor, or seeking reorganization, arrangement, adjustment, liquidation, dissolution or composition of it or its debts under any law relating to bankruptcy, insolvency, reorganization or relief of debtors,
or seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its property, and such case, proceeding or other action: (i) results in the entry of an order for relief against it
which is not fully stayed within seven (7) business days after the entry of the order; or (ii) remains undismissed for forty-five (45) days; 
 (e) Allows an attachment to remain on all or a substantial part of the Hotel or of its assets for thirty (30) days; 
 (f) Fails within sixty (60) days of the entry of a final judgment against it in any amount exceeding One Hundred Thousand Dollars ($100,000) to discharge, vacate or reverse the judgment, or to stay execution of
it, or if appealed, to discharge the judgment within thirty (30) days after a final adverse decision in the appeal; 
 (g) Loses possession or the right to possession of all or a significant part of the Hotel or Hotel Site, whether through foreclosure, including, but not limited to, foreclosure of any lien, trust deed, or mortgage, loss of lease, or for
other reasons apart from those described in Paragraph 12; 
 (h) Fails to continue to identify the Hotel to the public as a
System hotel, or abandons the operation of the Hotel by failing to operate the Hotel for five (5) consecutive days, or any shorter period after which it is not unreasonable under the facts and circumstances for us to conclude that you do not
intend to continue to operate the Hotel, unless the failure to operate is due to fire, flood, earthquake or similar causes beyond your control, provided that you have taken reasonable steps to minimize the impact of such events; 
 (i) Contests in any court or proceeding our ownership of the System or any part of the System, or the validity of any of the Marks;

 (j) Takes any action toward dissolving or liquidating itself, if it is a corporation, limited liability company or
partnership, except for death of a partner, 
 (k) Or any of the owners of a controlling Equity Interest is or is discovered
to have been convicted of a felony (or any other offense or conduct if we reasonably determine it is likely to adversely reflect upon or affect the Hotel, the System, us and/or any Entity); 
 (l) Conceals revenues, maintains false books and records of accounts, submits false reports or information to us or otherwise attempts to
defraud us; 
 (m) Becomes a Competitor without our prior written consent; 
 (n) Transfers any interest in Licensee, this Agreement, the Hotel or the Hotel Site, other than in a transaction that we have approved
(unless the Transfer is of a type described in Paragraph 11 where our approval is not required); 
 (o) Does not purchase or
maintain insurance required by this Agreement, or does not reimburse us for our purchase of insurance on its behalf; or 
 (p)
Becomes a Restricted Person or is owned or controlled by a Restricted Person or fails to comply with the Restricted Persons or anti-bribery provisions of Subparagraph 16.o., including a breach of the representations set forth therein.

 (3) Information involving you or your Affiliates, whether provided by you under Subparagraph 6.a.(29) or obtained through
Hilton’s or our own investigation, discloses facts concerning you or your Affiliates, including your or your Affiliates’ respective officers, directors, shareholders, partners 

  

 21 

 
or members, and/or the Hotel, or title to the property over which the Hotel is constructed or any other property used by the Hotel, including leased
commercial space, which, in the reasonable opinion of Hilton is likely to adversely reflect upon or affect in any manner, any gaming licenses or permits held by the Entities or the then current stature of any of the Entities with any gaming
commission, board, or similar governmental or regulatory agency, or the reputation or business of any of the Entities; 
 (4)
We make a reasonable determination that continued operation of the Hotel by you will result in an imminent danger to public health or safety; or 
 (5) Any guarantor of your obligations under this Agreement breaches its guarantee, if any, or any guarantee fails to be a continuing obligation fully enforceable against the person(s) signing the guarantee, or if
there is any inadequacy of the guarantee or guarantor, and the guarantor fails to provide adequate assurances to us as we may reasonably request. 
 c. Liquidated Damages upon Termination by Us. If we terminate the Agreement under Subparagraphs 14.a. or 14.b. above, you acknowledge that your default will cause substantial damage to us, the actual amount of which will be difficult
to determine. Therefore, if we terminate this Agreement under Subparagraphs 14.a. or 14.b. as a result of your default or breach of this Agreement, or if you unilaterally terminate this Agreement without cause, which is not authorized and which
would be a material breach of this Agreement, then, upon termination, we will be entitled to recover, and you must promptly pay us upon demand: 
 (1) all outstanding fees and charges owed to us, Hilton and the Entities under this Agreement for periods up to the date of termination, including amounts accrued but not yet billed; plus 
 (2) as liquidated damages for the future Monthly Royalty Fees and Monthly Program Fees we will lose, a “Termination Fee”
calculated by adding the result of (a) plus the result of (b) where: 
 (a) is calculated by multiplying the
average monthly Gross Rooms Revenue of the Hotel for the twenty-four (24) full calendar-month period immediately before the month of termination by the Monthly Royalty Fee percentage under this Agreement excluding any percentage fee discount
(this product, the “Average Monthly Royalty Fees”), then multiplying the Average Monthly Royalty Fees by thirty-six (36), or by such lesser multiple as would represent the remaining full or partial months between the date of
termination and the expiration of the License Term. If the Hotel has been open and operating as a System hotel for less than twenty-four (24) months, then we will multiply thirty-six (36) by the greater of a) the Average Monthly Royalty
Fees from the date the Hotel opened as a System hotel through the month immediately before the month of termination, and b) the average Monthly Royalty Fees per Guest Room owed to us by all System hotels in operation over the twelve (12) full
calendar-month period immediately before the month of termination, multiplied by the number of Guest Rooms in the Hotel. 
 and 
 (b) is calculated by multiplying the average monthly Gross Rooms Revenue of the Hotel for the twenty-four (24) full calendar-month
period immediately before the month of termination by the Monthly Program Fee percentage under this Agreement excluding any percentage fee discount (this product, the “Average Monthly Program Fees”), then multiplying the Average
Monthly Program Fees by twelve (12), or by such lesser multiple as would represent the remaining full or partial months between the date of termination and the expiration of the License Term. If the Hotel has been open and operating as a System
hotel for less than twenty-four (24) months, then we will multiply twelve (12) by the greater of a) the Average Monthly Program Fees from the date the Hotel opened as a System hotel through the month immediately before the month of
termination, and b) the average Monthly Program Fees per Guest Room owed to us by all System hotels in operation over the twelve (12) full calendar-month period immediately before the month of termination, multiplied by the number of Guest
Rooms in the Hotel. 
  

 22 

 The Termination Fee is intended to compensate us only for the value lost in Monthly
Royalty Fees and Monthly Program Fees as a result of the early termination of the Agreement, and you will remain liable for all other obligations and claims under the Agreement, including obligations following termination under Subparagraphs 5.c.,
5.d., 8.C., 14.d. and Paragraph 9 and liabilities arising out of your breach or default. 
 d. De-identification of Hotel Upon
Termination. Upon expiration or termination of this Agreement for any reason, you will immediately stop holding the Hotel out to the public as a System hotel, and will take whatever action is necessary to assure that no use is made of any part
of the System (including the Marks, all forms of advertising and other indicia of operation as a System hotel), and discontinue use of all distinguishing indicia of System and HHC hotels, including such indicia on exterior and interior signs,
stationery, operating equipment and supplies, Internet sites, brochures and other promotional material at or in connection with the Hotel or otherwise. You will return to us the Manual and all other proprietary materials, remove all distinctive
System features of the Hotel, including the primary freestanding sign down to the structural steel, and take all other actions (“De-identification Actions”) we require to preclude any possibility of confusion on the part of the
public that the Hotel is still using all or any part of the System or is otherwise holding itself out to the public as a System hotel. If within thirty (30) days after the termination or expiration of this Agreement, you fail to comply with
this paragraph, we and our agents, at your expense, may enter the premises of the Hotel to perform the De-identification Actions without being deemed guilty of or liable for trespass or any other tort, and make or cause to be made such changes at
your expense. You will pay all such expenses that we incur upon demand. If you fail to take all De-identification Actions, we and Hilton will be entitled to recover all losses, costs, expenses and damages caused by that failure. We and Hilton will
also be entitled to relief by injunction, and any other right or remedy at law or in equity to enforce our rights under this Agreement. 
 e. Special Termination. You recognize the additional harm by way of confusion for national accounts, greater difficulty in re-entering the market, and damage to goodwill of the Marks that we will suffer if: (i) you (or any of
your Affiliates) cause two (2) or more franchise license agreements for the Licensed Brand between yourself (or any of your Affiliates) and us (or any of our Affiliates) to be terminated before the expiration date of such agreements within
twelve (12) months of each other (if we terminate those agreements as a result of your breach or default, you (or your Affiliate) will be deemed to have caused the termination); or (ii) this Agreement terminates or is terminated by us (or
any of our Affiliates) following an unapproved Transfer (a) to a Competitor, or (b) to a buyer that converts the Hotel to a Competitor hotel within three (3) years from the date this Agreement terminates (each of these will be
referred to as a “Special Termination”). In the case of a Special Termination, you must promptly pay us upon demand, as a substitute for the amount we may demand pursuant to Subparagraph 14.c.(2) above, two (2) times the
Termination Fee payable under Subparagraph 14.c(2) in addition to any other amounts you owe pursuant to Subparagraph 14.c. This Subparagraph 14.e. is not triggered upon mutual voluntary termination of this Agreement. 
 15. Relationship of Parties 
 a. No Agency
Relationship. You are an independent contractor. Neither of us is the legal representative or agent of the other, or has the power to obligate (or has the right to direct or supervise the daily affairs of) the other for any purpose. You
expressly acknowledge that we have a business relationship based entirely on, and defined by, the express provisions of this Agreement and that no partnership, joint venture, agency, fiduciary or employment relationship is intended or created by
reason of this Agreement. Neither we nor any of the Entities will have any responsibility to any person for any debts, liabilities, damages, claims or expenses related to the establishment, construction or operation of the Hotel or arising out of or
related to your policies, procedures, practices or alleged practices in the operation of the Hotel or any other business conducted at the Hotel. 
 b. Notices to Public Concerning Your Independent Status. You will take all steps reasonably necessary to minimize the chance that a claim will be made against us for anything that occurs at the Hotel, or for the acts or omissions of
you or anyone associated or affiliated with you or the 

  

 23 

 
Hotel, including steps mandated by us in the Manual or otherwise. You will not incur any obligation or indebtedness on our behalf. All contracts for the
Hotel’s operations and services at the Hotel will be in your name or in the name of your Management Company. You will not enter into or sign any contracts in our name or using the Marks (including the name of the Licensed Brand) or any acronyms
or variations of the Marks. You will disclose in all dealings with suppliers and third parties that you are an independent entity and that we have no liability for your debts. 
 16. Miscellaneous 
 a. Severability and Interpretation. The remedies provided in this Agreement
are cumulative. These remedies are not exclusive of any other remedies that you or we may be entitled in case of any breach or threatened breach of the terms and provisions of this Agreement. If any provision of this Agreement is held to be
unenforceable, void or voidable, that provision will be ineffective to the extent of the prohibition without in any way invalidating or affecting the remaining provisions of this Agreement, and all remaining provisions will continue in effect. If
any provision of this Agreement is held unenforceable due to its scope, but may be made enforceable by limiting its scope, the provision will be considered amended to the minimum extent necessary to make it enforceable. This Agreement will be
interpreted without interpreting any provision in favor of or against either of us by reason of the drafting of the provision, or either of our positions relative to the other. Any covenant, term or provision of this Agreement that provides for
continuing obligations after the expiration or termination of this Agreement will survive any expiration or termination. To the extent that the provisions of this Agreement provide for periods of notice less than those required by Applicable Law, or
provide for termination, cancellation, non-renewal or the like other than in accordance with Applicable Law, those provisions will, to the extent they do not comply with Applicable Law, be superseded by said law, and we will comply with Applicable
Law in connection with each of these matters. 
 b. Governing Law and Jurisdiction. This Agreement will become valid when signed by
both of us. We each agree that the State of New York has a deep and well developed history of business decisional law. For this reason, we each agree that except to the extent governed by the United States Trademark Act of 1946 (Lanham Act; 15
U.S.C. ¶ 1050 et seq.), as amended, this Agreement, all relations between us, and any and all disputes between us, whether sounding in contract, tort, or otherwise, are to be exclusively construed in accordance with and/or governed by (as
applicable) the laws of the State of New York without recourse to New York (or any other) choice of law or conflicts of law principles. If, however, any provision of this Agreement would not be enforceable under the laws of New York, and if the
Hotel is located outside of New York and the provision would be enforceable under the laws of the state in which the Hotel is located, then the provision in question (and only that provision) will be interpreted and construed under the laws of that
state. Nothing in this section is intended to invoke the application of any franchise, business opportunity, antitrust, “implied covenant,” unfair competition, fiduciary or any other doctrine of law of the State of New York or any other
state that would not otherwise apply absent this Subparagraph 16.b. 
 Because, as stated above, the State of New York has a well developed history of
business decisional law and because the courts of the State of New York are best suited to interpret and apply that law, we each agree that any litigation arising out of or related to this Agreement, any breach of this Agreement, the relationship
between us, and, any and all disputes between us, whether sounding in contract, tort, or otherwise, will be submitted to and resolved exclusively by a court of competent jurisdiction located in the City and State of New York. You waive, and agree
never to assert, move or otherwise claim that this venue is for any reason improper, inconvenient, prejudicial or otherwise inappropriate (including, any claim under the judicial doctrine of forum non conveniens). 
 If our mutual choice of venue in the City and State of New York is not honored by the subject court(s), then we each agree that any litigation arising out of or related
to this Agreement; any breach of this Agreement; the relationship between us; and, any and all disputes between us, whether sounding in contract, tort, or otherwise, will instead be submitted to and resolved exclusively by a court of competent
jurisdiction located in the City and County of Los Angeles, California. You waive, and agree never to assert, move or otherwise claim that this substitute venue is for any reason improper, inconvenient, prejudicial or otherwise inappropriate
(including, any claim under the judicial doctrine of forum non conveniens). 
  

 24 

 c. Exclusive Benefit. This Agreement is exclusively for our and your benefit, and none of the
obligations of either of you or us in this Agreement will run to, or be enforceable by, any other party (except for covenants in favor of the Entities, which covenants will run to and be enforceable by the Entities or their successors and assigns),
or give rise to liability to a third party, except as otherwise specifically set forth in this Agreement. 
 d. Entire Agreement. You
and we acknowledge that each party to this Agreement wants all terms of this business relationship defined in this written Agreement, and that neither party wants to enter into a business relationship with the other in which any terms or obligations
are subject to any oral statements or in which oral statements serve as the basis for creating rights or obligations different than or supplementary to the rights and obligations set forth in this Agreement. Therefore, you and we agree that this
Agreement and its attachments will be construed together and will supersede and cancel any prior and/or contemporaneous discussions or writings (whether described as representations, inducements, promises, agreements or by any other term) between
you and us. You and we each agree that neither of us has relied or will rely on any such discussions or writings. You agree that no claims, representations or warranties of earnings, sales, profits, success or failure of the Hotel have been made to
you. This Agreement, its attachments, together with the Manual and any other document referred to, completed or to be completed in accordance with its provisions, is the entire agreement between you and us and contains all of the terms, conditions,
rights and obligations between you and us with respect to the Hotel and any other aspect of the relationship between you and us. No change, modification, amendment or waiver of any of the provisions of this Agreement will be effective or binding on
us unless it is in writing, specifically identified as an amendment to this Agreement, signed by one of our officers, and which may include an estoppel and general release of claims that you may have against us, the Entities, and related parties in
a form satisfactory to us. If any provision of this Agreement is inconsistent with the Manual, the provisions of this Agreement will prevail. No failure by us or by any of the Entities to exercise any power given us under this Agreement or to insist
on strict compliance by you with any of your obligations, and no custom or practice at variance with the terms of this Agreement, will be considered a waiver of our or any Entity’s right to demand exact compliance with the terms of this
Agreement. 
 e. Consent; Business Judgment. Wherever our consent or approval is required in this Agreement, unless the provision
specifically indicates otherwise, we have the right to withhold our approval at our option taking into consideration our assessment of the long-term interests of the System overall. You and we recognize, and any arbitrator or judge is affirmatively
advised that if those decisions are supported by our business judgment, neither an arbitrator nor a judge nor any other person reviewing those decisions will substitute his, her or its judgment for our judgment. When the terms of this Agreement
specifically require that we not unreasonably withhold our approval or consent, if you are in default or breach under this Agreement, any withholding of our approval or consent will be considered reasonable. Our approvals and consents will not be
effective unless given in writing. In no event may you make any claim for money damages based on any claim that we have unreasonably withheld or delayed any consent or approval to a proposed act by you under the terms of this Agreement. You also may
not claim damages by way of set-off, counterclaim or defense for our withholding of consent. Your sole remedy for the claim will be an action or proceeding to enforce the provisions of this Agreement by specific performance or by declaratory
judgment. 
 f. Notices. All notices must be in writing and will be effective on the earlier of: (i) the day it is sent by
facsimile with a confirmation of receipt; (ii) one business day after it is sent by next business day delivery service; or (iii) the third business day after it is sent by first-class or certified mail or other form of express delivery to
the appropriate party at the following single address, or such other single address as may be designated by the party to be notified (which, in no event, is a P.O. Box). If to us, the notice should be sent to our principal executive offices,
addressed to “General Counsel.” The current address of our principal executive offices is as follows: 9336 Civic Center Drive, Beverly Hills, CA 90210. We will send notices to your address in the Rider. Notice to you is deemed given if 1)
delivered in writing by one of the delivery methods above and 2) addressed to the principal correspondent for notice (“Principal 

  

 25 

 
Legal Correspondent”) at the address you designate in the Rider. If you want to change your address or the Principal Legal Correspondent, you
must notify us in writing in accordance with the delivery procedure in this Subparagraph 16.f. If, however, you designate a change in the Principal Legal Correspondent, and the person providing the notice is other than the then currently designated
Principal Legal Correspondent, we may require evidence, acceptable to us in our sole discretion, that the person requesting the change has the authority to do so. Except for notices of actions to be taken pursuant to Paragraph 14, you hereby grant
us permission to send communications to you by facsimile for the purposes of notices under this Agreement, including this Subparagraph 16.f., and/or to provide information from us to you by facsimile or email, subject to any Applicable Law. To the
extent there are any regulations or laws prohibiting such mass communications and to the extent they are waivable, you hereby waive them. 
 g. General Release. You, on your own behalf and on behalf of, as applicable, your officers, directors, employees, heirs, administrators, executors, agents and representatives and their respective successors and assigns hereby
release, remise, acquit and forever discharge us and the Entities and their officers, directors, employees, agents, representatives and their respective successors and assigns from any and all actions, claims, causes of action, suits, rights, debts,
liabilities, accounts, agreements, covenants, contracts, promises, warranties, judgments, executions, demands, damages, costs and expenses, whether known or unknown at this time, of any kind or nature, absolute or contingent, existing at law or in
equity, on account of any matter, cause or thing whatsoever that has happened, developed or occurred before you sign and deliver this Agreement to us. This release will survive the termination of this Agreement. 
 h. Estoppel Certificate. Whenever we reasonably request it, you will deliver to us an estoppel certificate in the form we require as to the
matters described in this Agreement. 
 i. Descriptive Headings. The descriptive headings in this Agreement are for convenience
only and will not control or affect the meaning or construction of any provision in this Agreement. 
 j. Representations and Warranties.
You warrant, represent and agree that all statements in the Application submitted to us in anticipation of this Agreement and all other documents and information submitted to us by you or on your behalf are true, correct and complete as of the
date of this Agreement and that you will continue to update them so that they are always true, correct and complete. You further represent and warrant to us that: (i) you have the full legal power, authority and legal right to enter into,
perform and observe this Agreement; (ii) this Agreement constitutes a legal, valid and binding obligation of Licensee and your entry into, performance and observation of this Agreement will not constitute a breach or default of any agreement to
which you are a party or of any Applicable Law; (iii) if you are a corporation, limited liability company, or other entity, (x) you are, and throughout the License Term will be, duly formed and validly existing, in good standing in the
state in which you are organized, and are and will be authorized to do business in the state in which the Hotel is located, (y) this Agreement does not constitute a breach or default of any of your organizational or governing documents, and
(z) the individual who executed this Agreement on your behalf has the authority to do so; (iv) this Agreement is enforceable against you in accordance with its terms (except as such enforceability may be limited by bankruptcy or insolvency
laws or by general principles of equity or at law); and (v) no Equity Interest has been issued, converted to, or is held as, bearer shares or any other form of ownership, for which there is no traceable record of the identity of the legal and
beneficial owner of such Equity Interest. You hereby indemnify and hold us harmless from any breach of these representations and warranties. These warranties and representations will survive the termination of this Agreement. 
 k. Time. Time is of the essence in this Agreement. 
 l. Counterparts. This Agreement may be signed in counterparts, each of which will be considered an original. 
 m. Performance Requirements/Responsibilities. Attachment A, setting forth certain of your performance conditions and requirements, is incorporated by reference and made a part of this Agreement. 
  

 26 

 n. informational Copies. You acknowledge that we may provide, but are not required to
provide, copies of any information we provide to you concerning the Hotel (such as quality assurance reports and default notices) to the owner and/or lessor of the Hotel. 
 o. Restricted Persons and Anti-bribery Representations and Warranties. You represent and warrant to Hilton that you (including your directors and officers, senior management, shareholders or other persons
having a controlling interest in you), and the owner of the Hotel or the Hotel Site are not, and are not owned or controlled by, or acting on behalf of, any of the following “Restricted Persons”: (1) the government of any country that
is subject to an embargo imposed by the United States government; (2) individuals or entities (collectively, “Persons”) located in or organized under the laws of any country that is subject to an embargo imposed by the United
States government; (3) Persons ordinarily resident in any country that is subject to an embargo imposed by the United States government; or (4) Persons identified from time to time by any government or legal authority under Applicable Laws
as a Person with whom dealings and transactions by Hilton are prohibited or restricted, including Persons designated on the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) List of Specially Designated Nationals and
Other Blocked Persons (including terrorists and narcotics traffickers); and similar restricted party listings, including those maintained by other governments pursuant to applicable United Nations, regional or national trade or financial sanctions.
You will notify us in writing immediately upon the occurrence of any event which would render the foregoing representations and warranties of this Subparagraph 16.o. incorrect. 
 You further represent and warrant to Hilton that you will not directly or indirectly pay, offer, give or promise to pay or authorize the payment of any monies or other things of value to: 
  

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

 

	(b)	any political party or candidate for political office; or 

  

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

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

 TO THE EXTENT EITHER PARTY INITIATES LITIGATION INVOLVING THIS AGREEMENT OR ANY ASPECT OF THE RELATIONSHIP BETWEEN US (EVEN IF OTHER PARTIES OR OTHER
CLAIMS ARE INCLUDED IN SUCH LITIGATION), ALL THE PARTIES WAIVE THEIR RIGHT TO A TRIAL BY JURY. THIS WAIVER WILL APPLY TO ALL CAUSES OF ACTION THAT ARE OR MIGHT BE INCLUDED IN SUCH ACTION, INCLUDING CLAIMS RELATED TO THE ENFORCEMENT OR INTERPRETATION
OF THIS AGREEMENT, ALLEGATIONS OF STATE OR FEDERAL STATUTORY VIOLATIONS, FRAUD, MISREPRESENTATION, OR SIMILAR CAUSES OF ACTION, AND IN CONNECTION WITH ANY LEGAL ACTION INITIATED FOR THE RECOVERY OF DAMAGES BETWEEN OR AMONG US OR BETWEEN OR AMONG ANY
OF OUR OWNERS, AFFILIATES, OFFICERS, EMPLOYEES OR AGENTS. 
 [THIS AGREEMENT CONTINUES WITH AN ATTACHMENT A AND ATTACHMENT B, WHICH ARE A
PART OF THIS AGREEMENT.] 
  

 27 

 ATTACHMENT A - PERFORMANCE CONDITIONS: 
 CHANGE OF OWNERSHIP 
  

	A.	Consultation. You or your representative(s) will meet with us to consult and coordinate with the project manager we assign to you. The meeting will take place within
forty-five (45) days after we notify you of approval, and the meeting will be held at a location we select. 

  

	B.	Work and Purchase Requirement. If applicable, the PIP is attached to this Agreement as Exhibit A, and incorporated in this Attachment A. You will perform the
renovation and/or construction work and purchase the items described on the PIP (the “Renovation Work”) on or before the completion date specified in the Rider. The Renovation Work will include your purchasing and/or leasing and
installing all fixtures, equipment, furnishings, furniture, signs, computer terminals and related equipment, supplies and other items that would be required of a new System hotel under the Manual and any other equipment, furnishings and supplies as
we may require for you to operate the Hotel. You will be solely responsible for obtaining all necessary licenses, permits and zoning variances required for the Hotel. 

  

	C.	Approval of Architect/Designer/Contractors. Before you submit Plans and Designs (as defined in Paragraph D) to us, you will furnish us with resumes and other information we
request pertaining to the architect and/or interior designer you desire to retain to prepare your Plans and Designs. The Plans and Designs will not be approved until we have approved the architect and designer who are to prepare the Plans and
Designs. Before Renovation Work, you will also submit to us resumes and other information we request pertaining to the general contractor and/or any major subcontractors for the Renovation Work. Renovation Work will not begin until we have approved
the contractors, which approval may be conditioned on bonding of the contractors. 

  

	D.	Approval of Plans and Designs. On or before the date specified in the Rider for submission of the Plans, you must submit to us your plans, layouts, specifications, drawings
and designs for the Renovation Work, including any proposed changes to the Hotel’s furnishings, fixtures, equipment, signs, decor, and physical appearance (collectively, the “Plans and Designs”). We may supply you with
representative prototype Guest Room and public area plans and schematic building plans as a guide for preparation of the Plans and Designs. Renovation Work will not begin unless and until we have approved the Plans and Designs. Before we approve the
Plans and Designs, we may require you to submit to us the existing plans, equipment, layouts, specifications, drawings and designs for the Hotel. Once we approve the Plans and Designs, no change may be made to the Plans and Designs without our
advance consent. In approving the Plans and Designs, we do not warrant the depth of our analysis or assume any responsibility for the efficacy of the Plans and Designs or the resulting Renovation Work. You will cause the Hotel renovation and/or
construction to be in accordance with this Agreement, the approved Plans and Designs, the Manual and the PIP. You will be solely responsible for obtaining all necessary licenses, permits and zoning variances that may be required for the Renovation
Work. It is solely your responsibility to ensure your Plans comply with our then prevailing standards and specifications in the Manual and with all Legal Requirements (as defined below). 

 You are responsible for making certain that the Hotel and the Renovation Work complies in all respects with all Legal Requirements. For purposes of this
Agreement, “Legal Requirements” means all public laws, statutes, ordinances, orders, rules, regulations, permits, licenses, authorizations, directions and requirements of all governments and governmental authorities, which, now or
hereafter, may apply to the construction, completion, equipping and Opening of the Hotel and the operation of the Hotel, including environmental, zoning, building, and life safety. We and Hilton will have the right to, and you will arrange for us
and Hilton to, participate in all progress meetings during the development and construction of the Hotel, to have access to all contract and construction documents relating to the Hotel, and to have access to the Hotel during reasonable business
hours to visit the Hotel and the Renovation Work. However, neither we nor 

  

 Attachment A - 1 

 
Hilton are obligated to participate in progress meetings, or visit the Hotel and the Renovation Work, and our and Hilton’s participation and site visits
are not to be considered as a representation of the adequacy of the construction, the structural integrity, or the sufficiency of mechanical and electrical systems for the Hotel. Before we approve your Plans, your architect or other certified
professional must certify to us that the Plans either comply with all applicable Legal Requirements relating to accessibility/accommodations/facilities for those with disabilities. Within ten (10) days after completion of the Renovation Work,
your architect, general contractor or other certified professional must provide us with a certificate stating that the as-built premises complies with all applicable Legal Requirements relating to accessibility/accommodations/facilities for those
with disabilities. 
 The Manual may not be used by you or any design or construction professional for any hotel project other than the Hotel.

  

	E.	Commencement; Completion. You will begin the Renovation Work on or before the date specified in the Rider and will continue the Renovation Work uninterrupted (except to the
extent continuation is prevented by events beyond your control, such as acts of God, third party strikes, acts of terrorism, war, or general governmental restrictions (“Force Majeure”)) until it is completed. For purposes of
this Paragraph E, Force Majeure does not include your own financial inability, inability to obtain financing, inability to obtain permits or any other events unique to you or the Hotel. Notwithstanding any Force Majeure, or any other matter, the
Renovation Work must be completed and the Hotel must be furnished, equipped, and comply with this Agreement no later than the date specified in the Rider (the “Renovation Work Completion Date”). We will have the sole right to
determine whether the Renovation Work has been completed in accordance with this Agreement, the approved Plans and Designs, the Manual and the PIP. 

  

	F.	Site Visits. During the course of Renovation Work, you and your architect, designer, contractors, and subcontractors will cooperate fully with us for the purpose of
permitting us to visit the Hotel and review the progress of the Renovation Work. In addition, you and your contractors, architect and designer will supply us with samples of construction materials, supplies, equipment, materials and reports as we
may request and give our representatives access to the Hotel Site and Renovation Work in order to permit us to carry out our site visits. 

  

	G.	Progress Reports. You will submit to us upon our request a report showing progress made toward fulfilling the terms of this Agreement. 

  

	H.	Acquisition of Equipment, Furnishings, and Supplies. You will purchase and/or lease and install all fixtures, equipment, furnishings, furniture, signs, computer terminals and
related equipment, supplies and other items we require in order to assure that the Renovation Work is completed under this Agreement. 

  

	I.	Cost of Construction and Equipping. You will bear the entire cost of the Renovation Work, including the cost of the Plans and Designs, professional fees, licenses, permits,
equipment, furniture, furnishings and supplies. 

  

	J.	Limitation of Liability. We will have no liability or obligation with respect to design and construction of the Hotel. We have furnished to you that portion of the Manual
which contains the technical standards and specifications to assist you in completing the Renovation Work. You acknowledge you have studied these standards and specifications and satisfied yourself that the Hotel can be designed, furnished and
equipped in accordance with these standards and specifications and that you and your design and construction consultants and contractors have the necessary resources and skills to do so. The Manual does not encompass the architectural, structural,
mechanical or electrical safety, adequacy, integrity or efficiency of the design or compliance with applicable Legal Requirements. We do not undertake to approve the Hotel as complying with governmental requirements or as being safe for guests or
other third parties and we have no responsibilities in these areas. You must indemnify us with regard to compliance with these matters to the extent provided in Paragraph 9 of this Agreement. 

  

 Attachment A - 2 

	K.	Conditional Authorization. We may conditionally authorize you to continue to operate the Hotel as a System hotel even though you have not fully complied with the terms of
this Attachment. Under certain circumstances, we may suspend services to the Hotel (including reservation services) while the Renovation Work is being performed by you. 

  

	L.	Performance of Agreement. You must satisfy all of the terms and conditions of this Agreement, and to equip, supply, staff and otherwise make the Hotel ready to continue to
operate under our standards. As a result of your efforts to comply with the terms and conditions of this Agreement, you will incur significant expense and expend substantial time and effort. You acknowledge and agree that we will have no liability
or obligation to you for any losses, obligations, liabilities or expenses you incur if we terminate this Agreement because you have not complied with the terms and conditions of this Agreement. 

 (Remainder of page left intentionally blank.) 
  

 Attachment A - 3 

 ATTACHMENT B - 
 RIDER TO FRANCHISE LICENSE AGREEMENT 
  

			
	Effective Date:	  	October 7, 2008
		
	Licensor Name:	  	 HILTON GARDEN INNS FRANCHISE LLC, a Delaware
 limited liability company

		
	Licensed Brand:	  	Hilton Garden Inn
		
	Initial Approved Hotel Name (Trade Name):	  	Hilton Garden Inn Cleveland/Twinsburg
		
	Principal Name in Licensed Brand:	  	Hilton
		
	 Licensee Name and Address
 (Principal Legal
Correspondent):
	  	 APPLE NINE HOSPITALITY MANAGEMENT, INC.
 c/o
Krissy Gathright
 814 East Main Street
 Richmond,
VA 23219
 Telephone: 804/344-8121
 Facsimile:
804/344-8129
 Email: kgathright@applereit.com

		
		  	
		
	Address of Hotel:	  	 8971 Wilcox Drive
 Twinsburg, OH
44087

		
	Initial Number of Approved Guest Rooms:	  	142
		
	Plans Submission Dates:	  	N/A
		
	Renovation Commencement Date:	  	On the Effective Date
		
	Renovation Work Completion Date:	  	All Renovation Work must be completed in accordance with the dates set forth in the PIP attached as Exhibit A.

 You agree that the Renovation Commencement Date and Renovation Work Completion Date may be extended by written
notice from us in our discretion. 
 Expiration of License Term: At midnight on SEPTEMBER 30, 2028 
 Monthly Program Fee: Four and Three-Tenths percent (4.3%) of the Hotel’s Gross Rooms Revenue for the preceding calendar month. 
 Monthly Royalty Fee: five (5%) of the Hotel’s Gross Rooms Revenue for the preceding calendar month. 
 Additional Requirements/Special Provisions: 
  

	 	•	 	 Paragraph 10 – Right of First Offer: deleted and replaced with Paragraph entitled “Notice Concurrent to Offering a Marketed Interest”

  

 Attachment B - 1 

	 	•	 	 All references in this Agreement to the “Opening Date” shall mean the ‘Effective Date.”  

 Your Ownership Structure: See Attached Schedule 1 
 Ownership
Structure of Affiliate Fee Owner or Lessor/Sublessor of the Hotel or Hotel Site: 
 See Attached Schedule 2 
 IN WITNESS WHEREOF, the parties have executed this Agreement which has an effective date as of the date in this Rider (the “Effective
Date”). 
  

									
	LICENSEE:	 		 	LICENSOR:
			
	APPLE NINE HOSPITALITY MANAGEMENT, INC.,	 		 	HILTON GARDEN INNS FRANCHISE LLC.
	a Virginia corporation	 		 	a Delaware limited liability company
					
	By:	 	/s/ Justin G. Knight	 		 	By:	 	/s/ Dawn P. Beghi
	Name:	 	Justin G. Knight	 		 	Name:	 	Dawn P. Beghi
	Title:	 	President	 		 	Title:	 	 VP – Franchise Contract Administration
 Hilton
Hotels Corporation

	Executed on: 9/23/08	 		 		 	

  

 Attachment B - 2

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