MANAGEMENT AGREEMENT

THIS MANAGEMENT AGREEMENT (“Agreement”) is effective as of January 1, 2021 (the “Effective Date”), by and between MOHAMMAD HONARKAR and 4G WIRELESS, INC., a California corporation (“Manager”), and LAGUNA HW, LLC, LAGUNA HI, LLC, SUNSET COVE VILLAS, LLC, RETREAT AT LAGUNA VILLAS, LLC and DUPLEX AT SLEEPY HOLLOW, LLC (“Owner”) (collectively, the “Parties” and individually, a “Party”).

Recitals

A. Manager is knowledgeable and experienced in managing and promoting hotels and resorts.

B Owner desires to engage Manager's services and experience and manage 14 West Boutique Hotel, Holiday Inn Laguna Beach, Sunset Cove Villas, Retreat at Laguna Villas and Duplex at Sleepy Hollow, hotels and vacation rentals owned and operated by Owner and located in Laguna Beach, California (the “Hotel” and the "Vacation Rentals" , collectively "Hotel").

Terms

The Parties agree as follows:

1. DEFINITIONS

Capitalized terms have the meanings set forth on Schedule 1.

2. GENERAL MANAGEMENT AND OPERATIONS.

2.1. General Management Services. Owner engages Manager, and Manager accepts such engagement, to supervise, direct, and control the Operation of the Hotel from the Opening Date through the end of the Term (the “Operating Period”). In performing its services pursuant to this Agreement, Manager is Owner’s agent.

2.2. Authority and Duty of Manager. Subject to the requirements and limitations set forth in this Agreement, during the Operating Period, Manager is authorized to, and Manager shall, as Owner’s agent, Operate the Hotel. The Parties acknowledge that Owner’s objectives in the Hotel’s Operation are to: (i) Operate the Hotel in accordance with the Operating Standard and in accordance with the terms and conditions of this Agreement; (ii) protect, preserve and maintain in good working order the assets that comprise the Hotel; (iii) control Operating Expenses and Capital Expenditures consistent with approved Operating Plans and Budgets; and (iv) maximize the Net Operating Income. Without limiting the generality of Manager’s authority and responsibility set forth in the preceding two m37752-968371_3.doc sentences, Manager shall have the authority and duty, on Owner’s behalf and as its agent, to:

2.2.1 Supervise the Operation of the Hotel and Vacation Rentals;

2.2.2 Supervise and direct all marketing, promotion and sales activities related to the Hotel and Vacation Rentals;

2.2.3 Establish all pricing and discount policies;

2.2.4 Purchase, supervise and manage all inventory and supplies, including Operating Supplies and Fixed Asset Supplies to Operate the Hotel in accordance with the Operating Standard;

2.2.5 Make all payments and collect all receivables related to the Operation of the Hotel and Vacation Rentals;

2.2.6 Manage Capital Improvements in accordance with the applicable Operating Plan and Budget;

2.2.7 Arrange for all information systems in accordance with the Operating Standard;

2.2.8 In addition to Monthly Reports, provide Owner with reports on the Hotel’s financial performance, sales and marketing efforts, and other matters, as the Parties may reasonably agree from time to time;

2.2.9 Meet with Owner periodically to review operations and performance of the Hotel under the then applicable Operating Plan and Budget;

2.2.10 Recruit, employ, relocate, pay, supervise, and discharge all Hotel Personnel on behalf of Owner, subject to the terms of Section 2.3

2.2.11 Determine all Hotel Personnel policies relating to the Hotel, including:

(i) policies relating to terms and conditions of employment, selection, training, compensation, bonuses, employee benefits, discipline, discharge, and replacement; and (ii) policies relating to the exercise by any person or organization of rights under the National Labor Relations Act or any applicable labor laws in relation to the Hotel; provided that Manager is entitled to engage, on Owner’s behalf, and rely upon appropriate professionals to advise and conduct training in connection with such laws, and provided further that Manager shall not, without Owner’s written approval, enter into any union organization or recognition, negotiations, agreement or contract regarding any collective bargaining agreement or multi-employer plan;

2.2.12 Maintain all books and records relating to the Hotel and Vacation Rentals Operations;

2.2.13 Negotiate, enter into, and administer service contracts for Hotel and Vacation Rentals Operations, provided, however, that:

(a) Manager shall obtain Owner’s prior written approval before entering into any such contract if such contract (A) is with an Affiliate of Manager, (B) has a term longer than one (1) year (unless such contract gives Owner the right to terminate the contract without cause and without payment of any termination fee on notice of thirty (30) days or less), or (C) has an annual payment obligation exceeding $25,000 and is not for consumables; and

(b) Manager shall select vendors based upon its commercially reasonable judgment as to the best combination of cost and quality of goods and services available to the Hotel; and

2.2.14 Negotiate, enter into, and administer, on behalf of Owner, contracts for the use of banquet and meeting facilities and guest rooms by groups and individuals;

2.2.15 Reasonably cooperate with Owner and any actual or prospective purchaser, owner, Mortgagee, or other lender in connection with any proposed sale, lease, or financing of, or relating to, the Hotel;

2.2.16 Institute, in its own name or in the name of Owner, any and all legal actions or proceedings to collect charges, rent, or other income derived from the Hotel’s Operations or to oust or dispossess guests, tenants, or other persons in possession therefrom, or to cancel or terminate any lease, license, or concession agreement for the breach thereof or default thereunder by the tenant, licensee, or concessionaire;

2.2.17 Collect on behalf of Owner and account for and remit to governmental authorities all applicable excise, sales, and use taxes or similar governmental charges collected by the Hotel directly from patrons or guests, or as part of the sales price of any goods, services, or displays, such as gross receipts, admission, or similar or equivalent taxes;

2.2.18 Apply for, obtain and maintain in the name of Owner all licenses and permits required in connection with the Operation of the Hotel and the facilities (including restaurant, bar and lounge facilities) located therein; provided that Owner shall execute and deliver any and all applications and other documents and otherwise cooperate to the fullest extent with Manager in applying for, obtaining and maintaining such licenses and permits, and provided further that Manager may engage on Owner’s behalf appropriate professionals to obtain or process any such licenses or permits;

2.2.19 Pay, as an Operating Expense, all Governmental Impositions imposed upon the Hotel or upon the Operations conducted at the Hotel or upon any of Owner’s property at the Hotel, real, personal or mixed, or upon any part thereof under Manager’s management and control, including all interest and penalties thereon. As used herein, Governmental Impositions include all social security taxes, unemployment insurance taxes, withholding taxes, and similar charges imposed on Manager or Owner in connection with any Hotel Personnel;

2.2.20 Oversee the parking operations at the Hotel, and, if such parking operations are managed by a third party operator, exercise Owner’s supervisory rights held by Owner under the agreement with such operator; and

2.2.21 Cooperate with Owner’s accountants, auditors and advisors.

The Parties acknowledge that Manager may, as it deems appropriate, utilize the Hotel Personnel in the performance of, and to accomplish, its duties under this Section 2.2. The Parties further acknowledge that all of Manager’s duties under this Section 2.2 are subject to Owner’s obligations to fund the Operation of the Hotel under Section 6.3.

2.3. Employees. Manager shall, at Owner’s expense, hire and employ the Hotel Personnel as employees of Manager. Manager may use the Hotel Personnel to perform (subject to Manager’s supervision) any of Manager’s duties under this Agreement. All compensation of Hotel Personnel, including fringe benefits, annual bonuses, severance and employment taxes paid or payable to or on behalf of the employees of the Hotel, together with any tax payable by Manager in connection with the payment or reimbursement of such total aggregate compensation, shall be paid out of the Operating Accounts. The term “fringe benefits” in the preceding sentence includes the cost of pension and profit sharing plans, workers’ compensation benefits, group life and accident and health insurance or equivalent benefits and participation, and reciprocation in any of Manager’s company wide employee programs and similar benefits available to such employees by virtue of their employment by Manager.

2.4. Shared Functions.

2.4.1 Identification of Shared Functions. Owner acknowledges that certain functions at the Hotel may be more efficiently performed if those functions are performed by personnel at or shared with other Manager-managed hotels, rather than by one or more dedicated employees hired exclusively for the Hotel. Manager is given permission and authority to determine, in its discretion, the functions and activities that can or should be shared among the Hotel and one or more other Manager-managed hotels (“Shared Functions”). In exercising such discretion, Manager’s objective will be to realize efficiencies, savings, or other enhanced financial performance for the Hotel. Owner acknowledges that (a) Manager has been or will be given similar discretion by the other Managermanaged hotels who participate in Shared Functions, (b) Manager’s objective thereunder will be to exercise such discretion to realize efficiencies, savings, or other enhanced financial performance for such other hotels, and (c) Manager is not, in any event, required to exercise its discretion under this Section 2.4 in a manner that will negatively impact such other hotels or unfairly benefit the Hotel. Owner further acknowledges that Manager may, in its discretion, eliminate any or all of the Shared Functions and undertake to perform all functions and activities separately for the Hotel, if, in Manager’s judgment, undertaking the functions and activities as Shared Functions may be contrary to any applicable law or regulation.

2.4.2 Allocation of Costs and Expenses for Shared Functions. Manager is given permission and authority to allocate, in Manager’s discretion, to the Hotel a share of the costs and expenses (including, for example, wages and benefits for employees engaged in Shared Functions) incurred in connection with each of the Shared Functions (each, a “Hotel Allocation”, and collectively, the “Hotel Allocations”). In exercising such discretion, Manager’s objective will be to fairly allocate such costs and expenses (the “Allocated Expenses”). In making the Hotel Allocations, Manager may consider any reasonable factor(s) or measurement(s), including any or all of the following:

(a) The relative revenue of the hotels (including revenue from particular categories, such as rooms, food, beverage, telephone parking, or other sources), so that one or more categories of the Allocated Expenses are allocated to each of the hotels based on their respective percentage of total revenues in one or more category of revenue.

(b) The number of rooms in each of the hotels, so that one or more categories of the Allocated Expenses are allocated to each of the hotels based on their respective number of rooms.

(c) For any one or more Shared Function, the amount of labor cost attributable to each of the hotels in performing the Shared Function.

(d) Other measures used in the Hospitality Industry, such as cost per pound (e.g., in the case of laundry), cost per occupied room, cost per cover, or cost per square foot of space.

Owner acknowledges that (i) Manager has been or will be given, by the other Manager-managed hotels who participate in Shared Functions, similar discretion to allocate to such other hotels a share of the Allocated Expenses (each, a “Corresponding Allocation”, and collectively, the “Corresponding Allocations”), (ii) Manager’s objective thereunder will be to fairly allocate the Allocated Expenses to such other hotels based on Manager’s application, in its judgment, of the same factors it is entitled to consider in this Section 2.4.2, and (iii) Manager is not, in any event, required to exercise its discretion under this Section 2.4.2 in a manner that will unfairly impact such other hotels or unfairly benefit the Hotel.

2.4.3 Annual Operating Budget. Manager shall include, in each annual Operating Plan and Budget prepared after the date of this Addendum, a list of any Allocated Functions and estimated Hotel Allocations or formulas associated therewith. Manager shall provide Owner, on a quarterly basis, a report showing the Allocated Functions, the Allocated Expenses, and Manager’s calculations that, through the application of the formulas, result in the Hotel Allocations for the prior calendar quarter and the Operating Year through the end of such calendar quarter.

2.4.4 Indemnity. Owner acknowledges that Operator, in exercising its discretion and judgment under Sections 2.4.1 and 2.4.2, does not materially benefit from the conclusions it reaches in determining the Allocated Functions or the Hotel Allocations or Corresponding Allocations (collectively, the “Allocations”). If any Manager-managed hotel owner (including Owner) makes any claim that the Allocated Functions or Allocations should be or should have been made or determined differently, then, for the purposes of Section 13.9.1, such claim, including all liability, loss, damages, costs and expenses (including attorneys fees) arising out of, or incurred in connection with, such claim, shall be deemed Claims caused by activities and events at or in connection with the Operation of the Hotel. To the extent that the resolution of any such claim is capable of being resolved by Owner and the other Manager-managed hotels who participate in Shared Functions, Owner shall exert commercially reasonable efforts to resolve any such claim amicably and promptly with such other owners.

2.5. Limitations on Manager’s Authority

Notwithstanding the terms of this Agreement, Manager shall not take the following actions without the Owner’s prior written consent:

2.5.1 Claim/Litigation Initiate or settle any liability claim, insurance claim, or litigation related to the Hotel involving a payment by or to the Hotel or Owner equal to or greater than $25,000.

2.5.2 Rental/License Enter into any rental, lease or other tenancy of Hotel real property (excluding specifically, however, the renting of the Hotel’s rooms or public spaces to guests in the ordinary course of the Hotel’s Operation).

2.5.3 Borrowing/Encumbrance The granting of any security interest, or any borrowing or other encumbrance of Owner’s assets, other than incurred or created in the generation of trade payables in the ordinary course of Hotel operations.

2.6. Noninterference. The executive staff of the Hotel will manage and operate the Hotel on a day-to-day basis, subject to the supervision of Manager. Owner shall not interfere with Manager’s or the Hotel Personnel’s exercise of their duties under or in connection with this Agreement or the Hotel.

2.7. Public Statements. The Parties shall coordinate with one another on all public statements, whether written or oral and no matter how disseminated, regarding their contractual relationship, as set forth in this Agreement, or the performance by either of them of their respective obligations hereunder.

2.8. No Restriction on Manager’s Activities

Neither Manager nor any of its Affiliates is restricted from owning, operating, licensing, franchising, managing, advising, or otherwise associating in any way with any other hotel, time-share facility, interval ownership facility, vacation club, residential facility, food and beverage operation, or other business of any kind, whether or not such hotel or business may be considered in competition with the Hotel and whether or not such hotel or business is located within the immediate vicinity of the Hotel, and Manager and its Affiliates are expressly permitted to engage in any or all of such activities.

3. CENTRALIZED SERVICES

Owner acknowledges that (i) certain centralized and similar services are provided or made available by Manager (the “Centralized Services”) and (ii) the Centralized Services are an essential element in the effective Operation of managed Hotels. Any Centralized Services to be provided under this Agreement may be provided by

Manager or Affiliate of Manager (the “Manager Centralized Services”) or by a third party designated by Manager or an Affiliate of Manager (the “Third-Party Centralized Services”).

3.1. Mandatory Centralized Services. Owner acknowledges and agrees that (i) the Hotel shall participate in all mandatory Centralized Services applicable to Manager-managed Hotels and (ii) Owner shall pay all Centralized Services Charges for, and comply with all terms and requirements of, such mandatory Centralized Services. The mandatory Centralized Services that are effective as of the Effective Date are set forth in Exhibit A. Owner acknowledges that the mandatory Centralized Services are subject to change from time to time in accordance with Section 3.4.

3.2. Optional Centralized Services. Owner shall have the right, but not the obligation, to participate in any Centralized Services, other than the mandatory Centralized Services described in Section 3.1, that Manager, in its discretion, may make available from time to time to the Hotel as an optional Centralized Service. If Owner elects to participate in any such optional Centralized Service, Owner shall provide notice to Manager, in which case Manager shall make such optional Centralized Service available to Owner upon Owner’s purchase and installation of any equipment and software and training of Hotel employees and completion of all other requirements for participation, and Owner shall pay all Centralized Services Charges for, and comply with all terms of, such optional Centralized Services. Owner acknowledges that the optional Centralized Services are subject to change from time to time in accordance with Section 3.4

3.3. Centralized Services Charges.

3.3.1 The fees and costs charged for the Centralized Services (the “Centralized Services Charges”) will be determined on the same basis for substantially all of the other Manager-managed Hotels that are participating in such Centralized Services, and may include (i) compensation and employee benefits of Manager’s or its Affiliates’ personnel directly involved in providing the Centralized Services, (ii) overhead costs allocable to providing such Centralized Services, (iii) recovery of development costs and promotion costs for such Centralized Services, (iv) costs of equipment employed in providing the Centralized Services, and (v) costs of operating, maintaining and upgrading the Centralized Services. In addition, Owner shall pay all costs for the installation and maintenance of any equipment or software at the Hotel used in connection with the Centralized Services. Manager, its Affiliates, and any third-party providing any Centralized Services have the right to increase or decrease any or all of the Centralized Services Charges from time to time, upon 60 days notice to Owner, provided that any such changes in the Centralized Services Charges are applied to substantially all of the Managermanaged Hotels participating in the applicable Centralized Services.

Exhibit A sets forth all Centralized Service Charges that are mandatory as of the Effective Date. The Parties acknowledge that the fees and costs charged for Centralized Services are Operating Expenses.

3.3.2 Manager represents and warrants to Owner that (i) the Centralized Services Charges for the mandatory Manager Centralized Services do not include a profit component (i.e., a mark-up in addition to the cost items listed in Section 3.3.1) unless specifically disclosed to Owner and (ii) the intent of Manager’s policy regarding allocation of its overhead costs is to allocate such costs to mandatory Manager Centralized Services in a manner that allows Manager to recover its costs for developing and providing such mandatory Manager Centralized Services. Owner acknowledges that from time to time there might be a surplus or deficit of funds for any one or more Centralized Services, and that any retention of funds for use at a later date (including interest earned thereon) does not constitute a profit. Notwithstanding the foregoing, Owner acknowledges that any Third-Party Centralized Services may include a profit component to such third-party, and Manager has the right to include a profit component in any of the optional Manager Centralized Services.

3.3.3 Manager or its Affiliates may (but are not required) to pay any amounts due to a third-party for any Third-Party Centralized Services provided to the Hotel, in which case, notwithstanding anything to the contrary in this Agreement, such amounts are deemed to be Reimbursable Expenses for all purposes under this Agreement.

3.4. Modification of Centralized Services. Owner acknowledges that Manager needs the flexibility to modify the Centralized Services to respond to market trends, customer demands, economic conditions, technological advances and other factors affecting the operation of Manager-managed Hotels, as they may change from time to time. Accordingly, Owner agrees that Manager shall have the right to (a) modify the services provided in respect of any Centralized Services, (b) add a new, or discontinue an existing, Centralized Service, or

(c) make a mandatory Centralized Service optional, or make an optional Centralized Service mandatory, as Manager deems advisable from time to time, each such change to be implemented upon no less than 60 days notice to Owner.

3.5. Centralized or Pooled Purchasing. Owner may, but will not be obligated to, participate, along with other Manager-managed Hotels, in one or more corporate or pooled purchasing programs or arrangements, if any, for the procurement of goods or services used in connection with the Operation of the Hotel (“Purchasing Programs”). If Manager offers such a program to Owner, Manager shall use reasonable efforts to cause such programs to provide the Hotel with terms that, taken in their entirety, are not materially less favorable to the Hotel than those reasonably obtainable by the Hotel from an unrelated party. Owner acknowledges and agrees that certain of such contracts and arrangements may include termination charges and that, upon the expiration or termination of this Agreement, Owner will be responsible for any such termination charges arising from such expiration or termination (unless any such contract or contracts are assumable by Owner and Owner elects to so assume such contract or contracts, as they relate to the Hotel, upon such expiration or termination). Owner also acknowledges that Manager or its Affiliates may from time to time receive certain volume discounts, refunds, rebates or bonuses in connection with its corporate or pooled purchasing programs or arrangements (the “Administrative Fees”). Manager shall use policies, as determined in its good faith discretion, to apportion Administrative Fees amongst the hotels participating in the purchasing program after retaining sufficient Administrative Fees to cover or recover Manager’s costs in creating and administering such Purchasing Programs. Owner acknowledges that from time to time there might be a surplus or deficit of funds for any one or more of the Purchasing Programs, and that Manager’s policies may include retention of funds for use at a later date. Manager may modify (a) the method of apportioning the Administrative Fees or (b) modify or terminate its policy and practice regarding the Administrative Fees or any purchasing fee charged to the Hotel.

4. OPERATING PLAN AND BUDGET; CAPITAL EXPENDITURES

4.1. Preparation and Contents of Operating Plan And Budget. Manager shall assist Owner in its financial planning by preparing and submitting to Owner for Owner’s review and written approval an initial draft of a proposed operating plan and budget (“Operating Plan and Budget”) for the ensuing Operating Year. Manager shall submit the proposed Operating Plan and Budget for the first Operating Year on or before the later of sixty (60) days after the Effective Date. For each Operating Year thereafter, Manager shall submit the proposed Operating Plan and Budget by November 15 before the applicable Operating Year. Manager shall include in the proposed Operating Plan and Budget:

4.1.1 Forecasts for the Operating Year of Gross Revenue, Gross Operating Profit, and the Hotel’s Operating Expenses;

4.1.2 A general description of the Hotel’s target markets, the Hotel’s relative position in those markets, the proposed room rate structures for each market segment, the current and future marketing and sales plans for the Hotel for the Operating Year containing a reasonably detailed budget itemization of the proposed expenditures by category, the advertising and public relations plan for the Hotel, and the proposed staffing for the sales and marketing activities of the Hotel; and

4.1.3 A Capital Expenditures budget estimating the amounts and timing of Capital Expenditures to be made for major building improvements, renovation, repairs and replacements for the Operating Year.

4.2. Agreement Upon Operating Plan and Budget. Owner and Manager shall exercise good faith and exert commercially reasonable efforts to reach agreement on the applicable Operating Plan and Budget prior to the Opening Date with respect to the first Operating Year and, for each subsequent Operating Year, by December 15 of the year preceding such Operating Year. Owner shall have the right to object or request changes to any aspects of the Operating Plan and Budget. If the Owner does not give written approval of the Operating Plan and Budget, then, until the form of the Operating Plan and Budget is approved by Owner, Manager shall have the right to adhere to such portions of the Operating Plan and Budget as are undisputed and, with respect to items in dispute, shall adhere to the most recent Owner-approved Operating Plan and Budget, as adjusted for inflation. As to those items of the Operating Plan and Budget not approved by Owner, the Parties will use commercially reasonable efforts to agree to the Operating Plan and Budget within fifteen (15) days after receipt by Manager of notice from Owner that Owner does not approve the Operating Plan and Budget. If the Parties reach agreement in accordance with this Section 4.2, then the agreed plan and budget (or any part of it) will be the Operating Plan and Budget for the applicable Operating Year.

4.3. Deviations from Operating Plan and Budget. Manager shall obtain Owner’s prior written consent to any expenditure that deviates from the Operating Plan and Budget, except that Owner’s consent is not required:

4.3.1 If the change in any Line Item expense does not exceed the Line Item amount in the Operating Plan and Budget by the greater of five thousand dollars ($5,000) or ten percent (10%) of such Line Item amount;

4.3.2 If the aggregate actual expenses for any Operating Year are no more than five percent (5%) above the aggregate Operating Plan and Budget expenses for that Operating Year;

4.3.3 If actual Gross Revenue for any period exceeds the Gross Revenue budgeted in the Operating Plan and Budget for such period, and there is an increase in variable operating expenses (such as food, labor and supplies) reasonably related to such Gross Revenue increase in a relationship which is not greater than the relationship between variable operating expenses and Gross Revenue anticipated in the applicable Operating Plan and Budget; or

4.3.4 If, under an Operating Plan and Budget, a Capital Improvement project is to be undertaken and the expenditures for any Line Item of such Capital Improvement project does not exceed the Line Item amount by ten percent (10%) and the aggregate actual expenses for such Capital Improvement project do not exceed the amount budgeted for such project in the Operating Plan and Budget by more than ten percent (10%)

4.4. Efforts to Achieve Projected Results; No Guaranty. Manager shall exercise prudent and reasonable efforts to achieve the results projected in the applicable Operating Plan and Budget with respect to any Operating Year. Owner acknowledges, however, that the Operating Plan and Budget is a composition of estimates and, therefore, Manager cannot and does not guarantee that the Operating Plan and Budget will be achieved for any Operating Year

4.5. Capital Improvements And Reserve.

4.5.1 Capital Improvements. Owner and Manager shall consider Capital Expenditures as part of the process for approval of the Operating Plan and Budget under Section 4.2. Notwithstanding the terms of Section 4.2, however, Owner shall not have the right to reject the inclusion of proposed Capital Expenditures in the Operating Plan and Budget or revisions to the Operating Plan and Budget, to the extent such Capital Expenditures are necessary (i) to keep the Hotel in a safe operating condition, (ii) to avoid damage to the Hotel or injury to persons, (iii) to comply with Legal Requirements, or (iv) to comply with the Operating Standard.

4.5.2 Establishment of the Reserve. Manager shall, from funds derived from the operation of the Hotel or funds contributed by Owner, establish the Reserve to apply toward the cost of additions to and substitutions, replacements and renewals of FF&E and other Capital Expenditures. All amounts in the Reserve are the property of Owner, and any interest on amounts in the Reserve remains a part of the Reserve. To the extent that Manager is required to pay any income taxes on any interest paid on amounts in the Reserve, such taxes are payable out of the Reserve.

4.5.3 Deposits into the Reserve. Once each calendar month during the Term, Manager shall transfer from the Operating Accounts into the Reserve an amount equal to (a) one twelfth ( 1/12th) of (b) four and one-half percent (4.5%) of the annual Gross Revenue forecast set forth in the Operating Plan and Budget for the applicable Operating Year. The amount to be contributed to the Reserve is an estimate of amounts required for the purposes set forth in Section 4.5.1. The Parties recognize that the passage of time or unforeseen events or conditions may render such amount insufficient to keep the Reserve at the level required to maintain the Hotel in good repair and condition in keeping with the Operating Standard and this Agreement, and in such case Manager may give Owner written notice that additional funds are required to be deposited in the Reserve. Owner shall provide such additional funds within thirty (30) days after Manager’s notice. The terms of this Section 4.5.3 do not diminish Owner’s obligation, under Section 6.3, to provide sufficient funds to assure the uninterrupted Operation of the Hotel in accordance with the Operating Standard.

4.5.4 Reserve Requirements under Mortgage. Owner and, subject to Section 6.3, Manager shall comply with all requirements of any Mortgage regarding the establishment of the Reserve Additionally, if the terms of any Mortgage require more funds to be deposited into the Reserve than are required by Section 4.5.3, then, subject to Owner’s obligations under Section 6.3, Manager shall deposit into the Reserve, from the Operating Accounts, such additional amounts.

4.5.5 Expenditures. Manager shall endeavor to schedule any substitutions, replacements and renewals of FF&E and other Capital Expenditures to allow them to be adequately funded from the Reserve. Subject to Section 4.5.1, to the extent funds are available in the Reserve, the Operating Accounts, or are otherwise supplied by Owner, Manager is authorized to make from time to time such substitutions, replacements and renewals of FF&E and make Capital Improvements that (a) are required or advisable to comply with applicable life safety requirements, or comply with, and cure or prevent the violation of, any Legal Requirements, (b) are expressly provided for in the applicable Operating Plan and Budget, or (c) are approved in advance by Owner in writing. At the end of each Operating Year, any amounts remaining in the Reserve shall be carried forward to the next Operating Year.

4.6. Technical Advice. Owner acknowledges that any review, advice, assistance, recommendation or direction provided by Manager with respect to the design, construction, reconstruction, equipping, furnishing, decoration, alteration, improvement, renovation or refurbishing of the Hotel or any component thereof during the Operating Period: (a) is intended solely to assist Owner in the development, construction, reconstruction, maintenance, repair and upgrading of the Hotel and Owner’s compliance with its obligations under this Agreement during the Operating Period (b) does not constitute any representation, warranty or guaranty of any kind whatsoever that (i) there are no errors in any plans and specifications, (ii) there are no defects in the design of construction of any part of the Hotel, any component thereof, or any installation of any building systems or FF&E therein, or (iii) such plans, specifications, construction, reconstruction and installation work will comply with Legal Requirements (including the American with Disabilities Act or similar laws or regulations governing public accommodations for individuals with disabilities).

5. BOOKS AND RECORDS, REPORTS, FINANCIAL STATEMENTS, AND AUDITS

5.1. Books and Records. Manager shall keep full and adequate books of account and such other records as are necessary to reflect the results of Operation of the Hotel. Such books of account will be kept in all material respects in accordance with GAAP. The books of account and all other records relating to, or reflecting the Operation of, the Hotel will be kept at or readily accessible from the Hotel and will be available to Owner and its representatives at all reasonable times for examination, inspection and copying. Upon any termination of this Agreement, all of such books and records (or copies thereof) will be turned over to Owner forthwith so as to insure the orderly continuance of the Operation of the Hotel, but Owner shall, for a period of seven (7) years thereafter, make the books and records through such date of termination available to Manager at all reasonable times for inspection, examination and copying.

5.2. No Obligation to Reconstruct; Opening Balance Sheet. It is acknowledged that Manager has no knowledge and cannot represent the accuracy of historical financial information concerning the Hotel prior to the Effective Date of this Agreement and that Manager is not responsible for reconstruction or correction of accounting records prior to such date. Owner shall furnish Manager with opening balance sheet entries within sixty (60) days after the Effective Date, and notwithstanding any provision in this Agreement to the contrary, Manager is not required to deliver to Owner any financial statements for the Hotel until at least thirty (30) days following receipt of such entries by Manager.

5.3. Monthly Reports. Manager will provide the Monthly Reports to Owner no later than twenty (20) days after the last day of the preceding month, which reports shall pertain to the immediately preceding month and shall be certified by the Hotel’s Controller and at least one Manager Principal, to the best of each such individual’s knowledge after diligently reading such reports, that such reports are true, correct and complete in all material respects.

5.4. Additional Monthly Reports. If a Mortgagee requires reports that are different from the Monthly Reports, then the Parties will work in good faith to (a) modify the Monthly Reports in order to satisfy the reasonable requirements of such Mortgagee and (b) prevent the need for Manager to report duplicative information in different reporting formats.

5.5. Annual Financial Statements.

5.5.1 Within thirty (30) days after the end of each Operating Year, Manager shall prepare and deliver to Owner each of the following with respect to such Operating Year: (i) an unaudited balance sheet, (ii) a statement of operations and retained earnings, (iii) a statement of cash flows, and (iv) a statement showing the calculation and payment of the Management Fee for that Operating Year (identified individually).

5.5.2 Owner may, at intervals determined by Owner, require Manager to cause an audit of annual financial statements prepared under Section 5.5.1 Any such audit will be performed by a firm of independent certified public accountants acceptable to Owner and Manager and shall include a balance sheet, a statement of operations and retained earnings, a statement of cash flows, and a statement of the Gross Revenue (if not shown on the statement of operations and retained earnings), prepared in accordance with GAAP and accompanied by an audit report with regard thereto, from the accounting firm performing such audit. The cost of such audits shall be at Owner’s expense and paid from the Operating Accounts. If, however, the audit shows a variance to the annual financial statements delivered by Manager pursuant to Section 5.5.1 of greater than six percent (6.0%) of Gross Revenue or Gross Operating Profit, then Manager shall correct any misstatements as shown by the audit, and the cost of the audit shall be at Manager’s sole cost and expense.

5.6. Inspections by Owner. Owner and Owner’s designated agent(s) shall, at any time throughout the Term, have the right to examine and inspect the books and records of the Hotel (and make any copies thereof), the Operations of the Hotel and all other services and materials provided to the Hotel or allocated to it by Manager or any Affiliate of Manager upon reasonable prior written notice by Owner to Manager; provided, however, Owner shall also be entitled to conduct spot audits or examinations of the same without prior notice to Manager from time to time. Any examination or inspection pursuant to this Section shall be conducted in such a fashion as to interfere as little as reasonably practicable with the Hotel’s normal Operations and shall be performed as an Operating Expense. Manager shall cooperate with Owner and Owner’s auditor in connection with any such audit and shall promptly make available to Owner and Owner’s auditor any and all information relating to the Hotel that they may reasonably request in connection with such audit.

5.7. Hotel Guest Information. Manager shall maintain as part of the books and records of the Hotel any guest profiles, contact information (e.g., addresses, phone numbers, facsimile numbers and email addresses), and other information obtained in the ordinary course of business from guests of the Hotel during such guests’ stay at the Hotel or during such guests’ use of the facilities associated with the Hotel (including stay histories at the Hotel) (the “Hotel Guest Information”). During the Operating Term, Owner shall have access to the Hotel Guest Information, and may use the Hotel Guest Information in any reasonable manner, so long as such use will not (a) violate the terms of this Agreement, any Legal Requirements, or any of privacy policies of Manager or any of its Affiliates applicable to Manager-managed Hotels, (b) interfere with, or be detrimental to, the use and exclusive Operation of the Hotel by Manager, or (c) interfere with, or be detrimental to, the financial performance of the Hotel. Owner and Manager jointly shall own all Hotel Guest Information.

6. BANK ACCOUNTS AND FUNDING OF HOTEL OPERATIONS; REMITTANCES TO OWNER

6.1. Operating Accounts. Manager shall establish and maintain operating accounts (“Operating Accounts”) at a bank or banks designated, with Owner’s approval, by Manager for the disbursement of monies in connection with the Operation of the Hotel. All bank accounts with respect to the Hotel or this Agreement shall be held in the name of Owner.

6.2. Use of Operating Accounts. Manager shall cause all funds advanced to the Hotel by Owner as working capital and all funds derived from the Operation of the Hotel to be deposited in the Operating Accounts. Owner may deposit such amounts directly into the Operating Accounts. So long as this Agreement shall not have terminated, Manager shall have sole control of the Operating Accounts and Manager is entitled to pay out of the Operating Accounts all Operating Expenses, all costs and expenditures which Manager is permitted or required to make pursuant to this Agreement, all fees, charges, reimbursements and other amounts due Manager under this Agreement, and all other amounts required to perform Manager’s obligations under this Agreement. Checks or other documents of withdrawal drawn upon the Operating Accounts will be signed by representatives of Manager or Hotel Personnel designated by Manager. In addition to the Operating Accounts, Manager is entitled to maintain such funds as it deems necessary in house banks or in petty cash funds at the Hotel. All such funds shall be the property of Owner, and all accounts holding such funds shall be in the name of Owner. Owner acknowledges that failure to use the funds in the Operating Accounts for the purposes set forth in this Section 6.2 could subject Manager to claims by third parties or to loss for failure to pay Manager’s fee (including any amounts due to Manager upon termination of this Agreement). Accordingly, Owner grants to Manager a security interest in, and the irrevocable right to use or reasonably retain, such funds solely for the purposes of paying the expenses, costs, and fees payable or reasonably anticipated to be payable by the Hotel. Manager’s rights under the preceding sentence survive any termination of this Agreement.

6.3. Adequate Funding. Owner shall at all times maintain in the Operating Accounts a minimum balance in an amount (the “Minimum Balance”) to assure the uninterrupted Operation of the Hotel in accordance with the Operating Standard and the terms of this Agreement, including the payment of (a) all Operating Expenses incurred in connection with the Hotel pursuant to this Agreement or Manager’s performance of its obligations under this Agreement, (b) all fees, charges and reimbursements payable to Manager under this Agreement, and (c) all other amounts incurred on Owner’s behalf in accordance with the terms of this Agreement. Without limiting Owner’s obligations under the preceding sentence, Owner shall not at any time permit the balance in the Operating Accounts to be less than an amount equal to the projected applicable Operating Expenses of the Hotel for one (1) month as reflected in the then current Operating Budget, including an amount equal to 30 days’ projected payroll. From time to time, upon ten (10) days prior written notice from Manager that such funds are required, Owner shall furnish to Manager funds in an amount equal to the difference between the Minimum Balance and the funds then on deposit in the Operating Accounts. If Owner fails to supply required working capital in accordance with the provisions of this Section 6.3 or if Manager otherwise deems such action to be necessary, then Manager may use all or part of the funds in the Reserve to supplement the Operating Accounts in order to defray or pay the Hotel’s operating costs and expenses. Manager’s obligations and duties under this Agreement are at all times subject to Owner’s obligation to provide sufficient funds under this Section 6.3. Manager is not under any circumstances required to advance any of its own funds to pay for the Operating Expenses or any other financial requirements of the Hotel.

6.4. Order of Payment of Operating Expenses. All payments by Manager, on behalf of Owner, of Operating Expenses and other Hotel expenses and liabilities incurred pursuant to this Agreement will be applied as designated by Manager, in the exercise of its commercially reasonable discretion. Owner acknowledges and agrees that Owner may not designate an order for application of any fees different from that designated by Manager under the preceding sentence, and (ii) Manager may accept fees paid pursuant to different instructions from Owner without any obligation to follow such instructions, even if such payment is made by its terms conditional on such instructions being followed. This provision may be waived only by written agreement signed by Manager, which written agreement must be separate from the check or other document constituting payment. No restrictive endorsement on any check or in any communication accompanying or relating to any payment to Manager or its Affiliates is binding, and acceptance of such payment shall not constitute an accord and satisfaction.

6.5. Remittances. At such times, and subject to the retention of reasonable operating reserves, as are mutually agreed upon by the Parties, but no less frequently than quarterly, Manager shall remit to Owner any funds in the Operating Accounts which exceed the Minimum Balance.

7. MANAGEMENT FEE, AND REIMBURSABLE EXPENSES

7.1. Management Fee. Owner shall pay Manager the Base Fee for all periods during the Term and the Incentive Fee for each Operating Year during the Operating Period. The Base Fee and the Incentive Fee are prorated for any partial accounting period during the Operating Period.

7.2. Payment of Base Fee. The Base Fee shall be calculated and paid monthly in arrears based on the actual monthly Gross Revenue for the Hotel and shall be paid within thirty (30) days of the end of each month during the Operating Period in which the Base Fee was earned.

7.3. Payment of Incentive Fee. The Incentive Fee shall be calculated annually in arrears based on the actual annual Gross Operating Profit for the Hotel and shall be payable on the date that is the earlier of (a) sixty (60) days after expiration of each Operating Year, so long as Owner has been provided with the annual financial statements in accordance with Section 5.5.1 or (b) thirty (30) days after delivery by Manager to Owner of the annual financial statements delivered with respect to each Operating Year pursuant to Section 5.5.1

7.4. Reimbursement of Reimbursable Expenses Incurred by Manager. Owner shall reimburse Manager for all Reimbursable Expenses. The Parties acknowledge and agree that Manager may allow Manager Corporate Personnel to stay at the Hotel, on a space-available basis, without a nightly room charge, to the extent that such stay is for the purpose of performing Manager’s duties and activities under this Agreement.

7.5. Centralized Service Charges. On or before the twentieth (20th) day of each month, Owner shall pay the Centralized Services Charges for all (a) mandatory Centralized Services for the Hotel for the immediately preceding calendar month, and (b) optional Centralized Services for the immediately preceding calendar month for such period during which Owner elects to participate.

7.6. Interest. If a sum owing to any Party under this Agreement remains unpaid for a period of thirty (30) days after the due date and any applicable notice and cure periods, then the obligated Party must pay interest on the sum owing at the Default Rate. Acceptance of interest does not waive the default arising from the defaulting Party’s nonpayment of any amount when due.

8. TRADEMARKS

8.1. Use of Proprietary Rights. As part of Manager’s services under this Agreement for the Operation of the Hotel and Vacation Rentals, Manager shall: (a) Operate the Hotels and Vacation Rentals under the names identified in Exhibit B and (b) use any additional Proprietary Rights in the Operation of the Hotel and the Site as Manager deems appropriate or advisable. Manager has the exclusive right to determine the form of presentation and use of any Proprietary Rights in the Operation of the Hotel, including the marketing, sales, advertising and promotion of the Hotel, any goods or services relating to the Hotel and any signage for the Hotel. Manager reserves the sole right and discretion to: (i) establish operating standards for the use of any Proprietary Rights for the Hotel, which must be satisfied as a condition of the use of such Proprietary Rights in the Operation of the Hotel, and (ii) require Owner, Hotel Personnel, and any other person Manager deems necessary to sign a confidentiality agreement as a condition to the disclosure or use of any Proprietary Rights by such person.

8.2. New or Modified Trademarks. If the name identified in Exhibit B contains any of the Trademarks, then, notwithstanding the terms of Section 8.1, Manager may designate one or more new, modified or replacement Trademarks, without Owner’s consent, to reflect changes in the Trademarks, and may require Owner to use any such Trademarks or change the Hotel Name to conform to such new, modified or replacement Trademarks. If Manager does so, then Manager, at its sole cost and expense, shall pay all expenses associated with implementing such new, modified or replacement Trademarks. Neither Manager nor any of its Affiliates have any liability or obligation whatsoever with respect to any new, modified or replacement Trademark, other than as provided in the preceding sentence.

8.3. Acknowledgment of Manager’s Rights. Owner acknowledges the rights of Manager and its Affiliates in and to the Proprietary Rights and acknowledges and agrees that:

(a) Owner has not acquired, and Owner will not represent in any manner that Owner has acquired, in any manner any ownership rights in the Proprietary Rights;

(b) Manager may use and grant to others the right to use any Proprietary Right, except as expressly provided otherwise in this Agreement;

(c) the restrictions and limitations with respect to Owner’s use of the Proprietary Rights under this Agreement apply to all forms and formats, including print, video, electronic and other media (including Identifiers), and all other identifications and elements used in commerce; (d) all goodwill associated with the Trademarks, is the property of Manager and its Affiliates and inure directly and exclusively to the benefit of Manager and its Affiliates. Owner shall not use any of the Proprietary Rights in any manner for any purpose whatsoever, including using any Trademarks in (i) its legal name or any other trade or assumed name under which Owner does business, or (ii) any publications, Identifiers or other materials or information dissemination to the general public, in each case without Manager’s prior written consent, and if consented to by Manager, then only as expressly permitted in such consent. Owner acknowledges and agrees that no default by Manager under this Agreement, or the expiration or termination of this Agreement, confers on Owner or any person claiming by or through Owner, any right or remedy to use any of the Proprietary Rights in the Operation of the Hotel or otherwise.

8.4. Infringement. During the Term and thereafter, Owner shall not, directly or indirectly, (a) apply for any rights or interests in the Proprietary Rights in any jurisdiction, (b) infringe Manager’s rights in the Proprietary Rights in any way, (c) contest or aid others in contesting the validity, ownership or right to use the Proprietary Rights, or (d) take any other action in derogation of the Proprietary Rights. Owner promptly shall notify Manager of any unauthorized attempt to use any of the Proprietary Rights, including any colorable variation of the Trademarks, or any legal action instituted against Owner with respect to any Proprietary Rights. Owner shall assist Manager and its Affiliates in taking such action as Manager may request to stop such activities, but shall take no action nor incur any expenses on Manager’s behalf without Manager’s prior written approval. Manager shall have the right to select legal counsel and control all litigation with respect to any action brought against Owner or Manager by a thirdparty with respect to the Proprietary Rights. If Manager undertakes the defense or prosecution of any litigation relating to the Proprietary Rights, Owner shall execute any and all fact-finding documents and take or not take such other reasonable actions as may, in the opinion of Manager’s legal counsel, be reasonably necessary to carry out such defense or prosecution, and Manager shall reimburse Owner for its actual out-of-pocket expenses in taking any such actions. This Section 8.4 survives the expiration or termination of this Agreement.

8.5. Improvements to System. All intellectual property rights to the improvements in Manager’s system for Operating the Manager-managed Hotels, or applicable category thereof, developed by Owner or any of its Affiliates are and will automatically become the exclusive property of Manager, and neither Owner nor any of its Affiliates will have any ownership rights in any such improvements. Manager may incorporate such improvements into its system for Operating the Manager-managed Hotels or other hotels, and shall have the exclusive right to patent, copyright, and industrial design rights in and to such improvements, and to register and protect such improvements in Manager’s own name to the exclusion of Owner, who shall have no rights to use such improvements. Owner shall execute, and cause its Affiliates to execute, whatever assignment or other documents Manager may request to evidence its ownership or to assist Manager in securing intellectual property rights to such improvements so long as such documents do not contain provisions increasing the liability of Owner beyond that to which it is already exposed under this Agreement.

9.TERM.

9.1. Term of Agreement. The term of this Agreement (“Term”) begins on the Effective Date and expires on the Expiration Date in accordance with its terms. The Term of the Agreement may be extended for an additional ten (10) years upon the mutual written agreement of both Parties.

10. INSURANCE AND CASUALTY.

10.1. Insurance by Owner. Manager shall, at Owner’s expense, procure and maintain (or cause to be procured and maintained), with insurance companies that are rated AM Best A-VII or better, insurance in such amounts, written on such forms and covering such risks as Owner or Manager otherwise reasonably requires. Manager is authorized, however, to procure and maintain, at a minimum, the insurance described in Exhibit C. With respect to any insurance required by any Mortgagee, Owner shall give notice to Manager of the insurance coverages required under the applicable Mortgage and Manager shall exert commercially reasonable efforts to procure and maintain such insurance. All insurance policies will have attached thereto an endorsement that such policy must not be cancelled or materially changed without at least thirty (30) days prior written notice to Owner and Manager (ten (10) days prior written notice in the case of any such cancellation or material change arising from failure to pay any insurance premium). All liability insurance policies will include Manager as an additional insured. Manager shall, at Owner’s request, deliver to Owner complete copies of each required insurance policy in Manager’s possession.

10.2. Manager Insurance Program. Manager may arrange for and propose to Owner an insurance program (“Manager Insurance Program”) designed to insure the Hotel and other hotels or resorts managed by Manager. Owner shall reasonably consider any proposed Manager Insurance Program on the basis of the price and coverage in comparison to the price and coverage otherwise available to Owner. If Owner accepts the Manager Insurance Program for any period, then Manager may obtain, on behalf of Owner and at Owner’s expense, the insurance provided under the Manager Insurance Program and, for any such period, the requirements of Section 10.1 are deemed satisfied.

10.3. Substantial Casualty/Hotel Operability Due to a Material Taking.

10.3.1 Right of Termination. If (a) more than 25% of the Hotel is damaged or destroyed (“Substantial Casualty”) and Owner does not elect, by giving Manager notice within ninety (90) days after the Substantial Casualty occurs, to restore the Hotel, or (b) the Hotel is subject to a material Taking that prevents the Operation of the Hotel, then either Party may terminate this Agreement (without the payment of any termination fee or any damages hereunder) by giving the other Party a written notice specifying a date, not earlier than thirty (30) days after the giving of such notice, when the Agreement terminates.

10.3.2 Restoration. If Owner elects, under clause (a) of Section 10.3.1, to restore the Hotel, then Owner shall, with due diligence, restore the Hotel to substantially the same condition it was in immediately prior to the Substantial Casualty.

10.3.3 Fees Payable for Periods Affected by Substantial Casualty or Material Taking. For any period (“Interruption Period”) beginning on the date of a Substantial Casualty or the date the Hotel is otherwise inoperable as a result of a material Taking under clause (b) of Section 10.3.1 (either, as the case may be, an “Interruption Event”), and ending on the earlier of the completion of the restoration of the Hotel, the recommencement of Hotel Operations, or the termination of this Agreement in accordance with this Section 10.3, Owner shall pay Manager the greater of: (a) the Management Fee payable under Section 7; or (b) the Average Monthly Fee for (i) the twenty-four month period immediately preceding the calendar month in which the Substantial Casualty or the material Taking (as the case may be) occurs, or (ii), if the Opening Date is within such twenty-four month period, the period beginning on the Opening Date and ending on the last day of the calendar month immediately preceding the Substantial Casualty or the material Taking, as the case may be. The difference between the Management Fee and the Average Monthly Fee payable pursuant to clause (b) of the previous sentence shall be paid to Manager on the earlier of (A) the date when the amount attributable to the Management Fee is paid out and released to Owner by its Business Interruption Insurance and (B) six months after the date on which the Substantial Casualty or material Taking (as the case may be) occurs and continuing monthly thereafter. If an amount is paid to Manager under clause (B) of the preceding sentence, and the Business Interruption Insurance proceeds that are finally paid out and released to Owner on account of the Management Fee are less than the amount paid to Manager, then Manager shall promptly reimburse Owner an amount equal to the deficiency. Notwithstanding the foregoing terms of this Section 10.3.3, if the Interruption Event is due to an excluded peril or a coverage limitation under the coverage required under Section 10.1, then Owner shall pay Manager for the Interruption Period the Management Fee as determined in accordance with the provisions of Section 7

11.MISCELLANEOUS.

11.1. Approvals. Unless otherwise expressly stated in this Agreement, neither Manager nor Owner shall unreasonably withhold, condition, or delay any approval requested under this Agreement.

13.2. Limitations on Manager’s Ability to Perform. Notwithstanding any other provision in this Agreement to the contrary, Manager is excused from the performance of its obligations under this Agreement to the extent and whenever Manager is prevented from such compliance by (i) Force Majeure or (ii) any breach by Owner of any provision of this Agreement, including a breach by Owner of any of its obligations under Section 6.3 of this Agreement. If at any time Manager is excused, in whole or in part, from the performance of its obligations under this Agreement pursuant to the terms of the preceding sentence, then, in addition to any other right or remedy available to Manager by reason thereof, Manager may, in its sole and absolute discretion, and for so long as Manager is so excused, exclude the use of any of the Trademarks in connection with the Hotel. The provisions of this Section 13.2 are in addition to, and not in substitution of, any other remedy which Manager may have under the terms of this Agreement or applicable law.

13.3. Compliance with Applicable Law. Owner and Manager shall cooperate in taking all actions necessary to ensure that the business being conducted at the Hotel is in compliance with all legal requirements.

13.4. Governing Law. This Agreement is governed by the laws of the State of California.

13.5. Severability of Provisions. If a court of competent jurisdiction determines that any term of this Agreement is invalid or unenforceable to any extent under applicable law, the remainder of this Agreement shall not be affected thereby, and each remaining term shall be valid and enforceable to the fullest extent permitted by law.

13.6. Modifications and Waiver. No failure by either Party to insist on the strict performance of any covenant, agreement, term, or condition of this Agreement, or to exercise any right or remedy consequent on the breach thereof, shall constitute a waiver of any such breach or any subsequent breach of such covenant, agreement, term, or condition. No covenant, agreement, term, or condition of this Agreement and no breach thereof shall be waived, altered, or modified except in a writing signed by the Party against whom enforcement of such waiver, modification, or alteration is sought. No waiver of any breach shall affect or alter this Agreement, but each and every covenant, agreement, term, and condition of this Agreement shall continue in full force and effect.

13.7. Notices. All notices to be given under this Agreement must be in writing, and all payments to be made under this Agreement must be by check, and may be given, served or made by delivering the same in person or by reputable overnight courier to the Party to be notified. Notice also may be given by facsimile or email. Notice delivered by overnight courier is deemed to have been given on the second Business Day next following the date on which it is entrusted to the courier, or when actually received, whichever is earlier. Notice given in any other manner is effective only if and when received by the Party to be notified. All notices to be given to the Parties must be addressed as follows:

To Manager:

4G Wireless, Inc. 8871 Research Drive Irvine CA 92618

To Owner:

Mohammad Honarkar 8871 Research Drive Irvine CA 92618

Each Party may, by giving the other Party at least fifteen (15) days written notice thereof, change its address and specify as its new address for the purposes this Agreement any other address in the United States of America.

13.8. Successors and Assigns. Subject to the provisions of Section 11, this Agreement inures to the benefit of and is binding on the successors and assigns of the Parties.

13.9. Indemnification.

13.9.1 Owner shall indemnify, defend, and hold harmless Manager and Manager’s Affiliates and their officers, directors, employees, agents, and permitted assignees (“Manager Group”) from and against any and all Claims caused in whole or in part by (i) activities and events at or in connection with the Operation of the Hotel; (ii) Owner’s breach of any provision of this Agreement; (iii) any negligent or willful act or omission of Owner or its employees or agents; or (iv) Manager’s acts or omissions in the performance of its management duties under or in connection with this Agreement; provided that in no event will Owner’s indemnification obligations hereunder extend to acts of fraud, gross negligence, or willful misconduct of any of the Manager Corporate Personnel.

13.9.2 Manager shall indemnify, defend and hold Owner and Owner’s Affiliates and their officers, directors, employees, agents, and permitted assignees harmless from and against any and all Claims arising out of the acts of fraud, gross negligence, or willful misconduct of any of the Manager Corporate Personnel.

13.9.3 The obligations set forth in this Section 13.9 survive any termination or expiration of this Agreement.

13.10. Patriot Act. Each Party represents, warrants and covenants that neither it nor any of its Affiliates (or any of their respective principals, partners or funding sources) is, nor will become, (i) a person designated by the U.S. Department of Treasury’s Office of Foreign Asset Control 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; (iii) a person otherwise identified by a government or legal authority as a person with whom an owner or manager of a hotel is prohibited from transacting business; (iv) directly or indirectly owned or controlled by the government of any country that is subject to an embargo by the United States government; or (v) a person acting on behalf of a government of any country that is subject to an embargo by the United States government. Each Party shall notify the other in writing immediately upon the occurrence of any event which would render incorrect any of such Party’s representations and warranties under this Section 13.10.

13.11. Interpretation. The Table of Contents and captions to Sections of this Agreement are for convenience of reference only and in no way define, limit, describe, or affect the scope or intent of any part of this Agreement. Unless the context clearly indicates to the contrary, words singular or plural in number are deemed to include the other and pronouns having a neuter, masculine or feminine gender are deemed to include the others. “Days,” “months” or “years” mean calendar days, months, or years, as the case may be, unless otherwise explicitly specified. The term “person” is deemed to include an individual, corporation, partnership, limited liability company, trust, unincorporated organization, and any other entity and any government and governmental agency or subdivision, as the context requires. The use of the words “include,” “includes,” and “including” followed by one or more examples is intended to be illustrative and does not limit the scope of the description or term for which the examples are provided. The use of the word “or” is intended to mean one or more of the constituents connected therewith, and is not intended to mean one constituent to the exclusion of the others, unless the context clearly indicates, with words such as “either...or alternatively…”, that only one constituent may be chosen.

13.12. Relationship of the Parties. Manager and Owner are not joint venturers, partners, or in any manner joint owners with respect to the Hotel, and nothing contained in this Agreement shall be construed as creating a partnership, joint venture, or similar relationship between the Parties.

13.13. Confidentiality. The Parties agree that the matters set forth in this Agreement are strictly confidential, and agree to keep strictly confidential all information of a proprietary or confidential nature about or belonging to a Party to which the other Party gains or has access by virtue of the Parties’ relationship. Except as disclosure may be required to obtain the advice of professionals or consultants, or financing for the Hotel from an institutional lender, or as may be required by law, each Party shall make every effort to ensure that such information is not disclosed to any other third person or entity without the prior written consent of the other Party.

13.14. Third Parties. None of the rights or obligations hereunder of either Party shall run to or be enforceable by any person other than a Party to this Agreement or by a Party deriving rights hereunder as the result of an assignment permitted pursuant to the terms hereof.

13.15. Entire Agreement. This Agreement, including the exhibits, schedules, and any and all addenda attached to this Agreement, constitutes the entire agreement between the Parties with respect to the subject matter hereof. The exhibits, schedules and addenda, if any, attached hereto are incorporated into, and are a part of, this Agreement. All prior negotiations, representations and agreements with respect thereto not incorporated in this Agreement are canceled. This Agreement can be modified or amended only by a written document duly executed by the Parties.

13.16. Counterparts. This Agreement may be executed in several counterparts, each of which is an original, but all of which constitute one and the same instrument.

[Signature page(s) follow]

Exhibit A

Centralized Services

(Reference: Sections 3.1 and 3.3.1 of the Agreement)

CENTRALIZED SERVICES

I. MANDATORY SERVICES

ITEM COMMENT

Centralized Accounting: For centralized accounting services.

II. OPTIONAL SERVICES

As determined by Manager from time to time.

CURRENT COST OR DESCRIPTION

$10,000 per month

Exhibit B

NameUnderWhich Hotels and Vacation

Rentals Will Operate

(Reference: Section 8.1 of theAgreement)

The names under which the Hotels will Operate are:

14 West Boutique Hotel

Holiday Inn Laguna Beach

Sunset Cove Villas

Retreat at Laguna Villas

Sleepy Hollow

Duplex at Sleepy Hollow

EXHIBIT C Required Insurance

(Reference: Section 10.1 of theAgreement)

Pursuant to Section 10.1 of the Agreement, Owner shall procure and maintain, at Owner’s expense, insurance in respect of the Hotel as follows:

1. With respect to the hotel building and its contents, replacement costs coverage against loss or damage against “all risk”, perils including boiler and machinery, earthquake and flood in such amounts as Owner determines are economically reasonable from time to time

2. At least $1,000,000 per occurrence and $2,000,000 annual aggregate for commercial general liability and automobile liability, including:

(a) Contractual Liability;

(b) Products and Completed Operations;

(c) Innkeepers Liability Insurance;

(d) Liquor Liability Insurance;

(e) Garagekeepers Legal Liability; and

(f) Professional Liability Coverage (if guest services offered by the Hotel include services which require professional licensure under applicable State law or regulations).

Such insurance shall be primary and shall apply against claims for bodily injury or death, personal injury, and property damage occurring on, in or about the Hotel and any hotel garage and on, in, or about the adjoining streets or passageways thereof or other areas under this agreement.

3. Employee dishonesty coverage not less than $10,000 and loss of money and security coverage as usual and customary for hotel operations in Orange County, California.

4. With respect to all hotel personnel, appropriate worker’s compensation insurance required by California State and employers liabilityinsurance in the amount of not less than $1,000,000.

5. Commercial umbrella liability with a limit of $10,000,000 per occurrence and in the aggregate.

6. Employment practices liability coverage in the amount, per common occurrence, of not less than $1,000,000.

7. Business Interruption and Extra Expense from loss or damage resulting from the hazards referred to in subsection 1, sufficient to cover loss of profits and necessary continuing expenses, including the Base Fee, for a minimum period of eighteen (18) months from the date of loss. Such insurance should also provide “extended period of indemnity” provisions for payment of loss until normal operations resume, subject to minimum period of 18 months from the date of loss.

8. Such insurance in such higher amounts or such other insurance against other insurable risks which are required by any hotel lender, or are requested by Operating Tenant and commonly insured against by owners of hotel premises in Laguna Beach, California, with due regard being given to then existing circumstances and to the type, construction, design, use and occupancy of the hotel. Manager may require Terrorism Insurance and Pollution Legal Liability so long as such insurance is commercially available.

9. Any coverage minimums listed may be adjusted by Manager in accord with California requirements.

Exhibit D

Specimen Consolidated Income Statement

(Reference: Definition of “Gross Operating Profit” in the Glossary)

(attached)

[attach specimen]

Exhibit E

Legal Description of Sites

(Reference: Definition of “Site” in the Glossary)

(Attached)

Exhibit E - 1

Schedule 1 Glossary

The following definitions apply to this Agreement:

“Administrative Fees” – as defined in Section 3.5.

“Affiliate” means with respect to Manager or Owner, as the case may be, any person, partnership, corporation, limited liability company or other entity which directly or indirectly controls, is controlled by, or is under common control with, Manager or Owner. For purposes hereof, the term “control” (including “controls”, “controlled by”, and “under common control with”) means the ability through ownership, direct or indirect, of voting stock or other equity interests, to direct or cause the direction of the management and policies of a person, partnership, corporation, limited liability company or other entity.

“Agreement” – as defined in the preamble of this Hotel Management Agreement.

“Allocated Expenses” – as defined in Section 2.4.2.

“Allocations” – as defined in Section 2.4.4.

“Average Monthly Fee” means (a) the total Management Fees payable under this Agreement for the Measuring Period, divided by (b) the number of months in the Measuring Period. In the preceding sentence, “Measuring Period” means the period beginning on the first day for which the Average Monthly Fee is calculated and ending on the last day of the period for which the Average Monthly Fee is calculated. If any partial month is included in the Measuring Period, then, in calculating the Average Monthly Fee for the Measuring Period, the Management Fees for such partial month will be prorated based on the number of days in such partial month.

“Base Fee” means, for any period after the Opening Date, an amount equal to five percent (5%) of Gross Revenue for such period.

“Business Interruption Insurance” means insurance coverage against “Business Interruption and Extra Expense” (as that phrase is used within the United States insurance industry for application to transient lodging facilities).

“Capital Expenditure” means expenditures for any alterations, additions or improvements in or to the Hotel (excluding ordinary repair and maintenance expenditures) that constitute Capital Improvements.

Schedule 1 (Glossary) - 1

“Capital Improvement” means an item of any nature incorporated into the Hotel that, according to GAAP, cannot be deducted as a current expense on the books of the Hotel but rather must be capitalized.

“Centralized Services” – as defined in Section 3.

“Claims” means, collectively, all claims, demands, actions (including enforcement proceedings initiated by any government agency), penalties, suits, and liabilities (including the cost of defense, settlement, appeal, and reasonable attorneys’ fees, expenses and costs).

“Confidential Information” means information developed or acquired by Manager or its Affiliates relating to the development or Operation of hotels Operated by Manager, including (a) methods, formats, specifications, standards, systems, procedures, and sales and marketing techniques used, and knowledge of and experience, in developing and Operating Manager-managed Hotels; (b) any marketing and advertising programs of or for Manager-managed Hotels; (e) any of Manager’s or its Affiliates’ strategic plans, development plans, or other business strategies that are not publicly announced by Manager or its Affiliates; (f) product sources; (g) the contents of any manuals, specifications, and procedures applicable to Manager-managed Hotels; and (h) the Methods of Operation.

“Corresponding Allocations” – as defined in Section 2.4.2.

“CPI” means the Consumer Price Index for all Urban Consumers, All Items, for the market area that includes the Hotel, as published by the Bureau of Labor Statistics of the United States Department of Labor, using the years 1982-84 as a base of 100, or if such index is discontinued, the most comparable index published by any federal government agency.

“Default Rate” means the greater of (i) the Prime Rate plus four percent (4%) or (ii) twelve percent (12%) per annum. If Legal Requirements places a lower limit on this interest rate, then the Default Rate will equal that lower limit.

“Effective Date” – as defined in the preamble of this Agreement.

“Executive Personnel” means all of the following executives at the Hotel: General Manager, Director of Sales and Marketing, and Financial Controller.

“Expiration Date” means 11:59:59 pm, local time, of the year in which the tenth (10th) anniversary of the Opening Date occurs. If the Term is extended in writing in accordance with the last sentence of Section 9.1, then the Expiration Date will be December 31 of the year in which the twentieth (20th) anniversary of the Opening Date occurs or such other date as is specifically set forth in such written extension.

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“FF&E” means items of furniture, fixtures, and equipment used in the ordinary course of Operating the Hotel that, under GAAP, must be capitalized on the books of the Hotel.

“Fixed Asset Supplies” means supply items (often referred to as either “Hotel Equipment and Operating Supplies” (HE&OS) or “Operating Supplies and Equipment” (OS&E)) included within “Property and Equipment” under the Uniform System, including linen, china, glassware, silver, uniforms and similar items.

“Force Majeure” means any one or more of the following events or circumstances that, alone or in combination, directly or indirectly, adversely affects in any material respect the Operation of the Hotel: fire, earthquake, storm or other casualty; strikes, lockouts, or other labor interruptions; war, rebellion, riots, acts of terrorism, or other civil unrest; epidemics, quarantine or any other public health restrictions or public health advisories; any other occurrence or event or condition beyond the reasonable control of Manager. In no event shall Force Majeure include general economic and/or market factors.

“GAAP” means generally accepted accounting principles consistently applied in the United States and includes the Uniform System.

“Governmental Impositions” means all taxes, assessments and governmental charges or levies of any kind.

“Gross Operating Profit” means, for any period, the “Gross Operating Profit” of the Hotel for such period as calculated in accordance with the Uniform System and the specimen Consolidated Income Statement attached to this Agreement as Exhibit D. In the event of a conflict between the Uniform System and the specimen Consolidated Income Statement, the specimen Consolidated Income Statement governs.

“Gross Revenue” means all revenue and income of any kind derived directly or indirectly from operations at the Hotel, which are properly attributable to the period under consideration, determined in accordance with the Uniform System; provided that the following are not included in determining Gross Revenue:

(a) Applicable excise, sales, and use taxes, or similar government or other charges collected directly from patrons or guests, or as a part of the sales price of any goods, services, or displays, such as gross receipts, admission, cabaret, or similar or equivalent taxes;

(b) Receipts from the financing, sale or other disposition of capital assets or salvage sales and income or interest derived from bank accounts, securities and other property acquired and held for investment;

(c) Receipts from any condemnation awards or sales or other transfers in lieu of and under the threat of condemnation;

(d) Proceeds of any insurance;

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(e) Rebates, discounts, or credits of a similar nature (not including charge or credit card discounts);

(f) The value or costs of any complimentary rooms, food, or beverage provided to guests, Hotel employees, those rendering services to the Hotel, Owner, or Owner’s employees, agents or designees;

(g) Gratuities collected on behalf of and distributed to Hotel employees;

(h) Any deposits made by Owner;

(i) Any security deposits (except as applied or forfeited);

(j) Consideration received at the Hotel for hotel accommodations, goods and services to be provided at other hotels arranged by, for or on behalf of, Manager;

(k) Other income or proceeds derived from operations not related to the business of the Hotel;

(l) Any reversal of any contingency or tax reserve or non-monetary reserves;

(m) Any proceeds from settlement or legal proceedings; provided, however, that if any such proceeds are received for items that would otherwise have been included in Gross Revenue, such proceeds, after payment of legal fees, and deduction of any punitive, consequential or other noncompensatory damage component and any court costs, shall be included in Gross Revenue; and

(n) The initial operating funds and any other funds provided by Owner to Manager whether for Operating Expenses or otherwise.

“Gross Rooms Revenue” means, for any period, the gross receipts of every kind, including credit charges, derived from the rental, sale, use, or occupancy of the sleeping rooms at the Hotel, net of sales tax or other taxes required by law to be collected from Hotel guests, all as determined in accordance with GAAP.

“Hotel” means as outlined in the Recitals hereinabove including the Site and the hotel located on the Site (including any construction contemplated by and completed in connection with any addendum to this Agreement) consisting or to be consisting of the following facilities and amenities: rentable guest rooms; meeting space; and all other additional facilities and amenities required by the Operating Standard. “Hotel” also includes (i) any and all other restaurants, retail shops, recreational amenities, health, sports and fitness and other facilities that may at any time be situated on the Site and all related improvements, equipment and ancillary and supporting facilities, and (ii) all FF&E, Fixed Asset Supplies and all other supplies and materials relating to the Hotel.

“Hotel Allocations” – as defined in Section 2.4.2.

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“Hotel Guest Information” — as defined in Section 5.7.

“Hotel Personnel” means all individuals hired, on Owner’s behalf, by Manager or an Affiliate of Manager, who perform services for and in the name of the Hotel.

“Identifier” means any domain name, universal resource locator, link, metatag, keyword, pop-up or pop-under ad or other means of identifying Manager or its Affiliates or the Hotel on the internet.

“Interruption Event” – as defined in Section 10.3.3.

“Interruption Period” – as defined in Section 10.3.3.

“Inventories” means all food and beverages, energy (such as fuel), amenities and supplies (such as for example, soap, light bulbs, stationery and paper supplies, and cleaning supplies), mechanical supplies, and other similar consumable and expendable items necessary or customary (now or in the future) in the reasonable opinion of Manager in order to Operate the Hotel in accordance with the terms of this Agreement and the Operating Standards.

“Legal Requirements” means all laws, statutes, ordinances, rules, regulations, permits, licenses, authorizations, directions, and requirements of all governments and governmental authorities, that now or hereafter may be applicable to the Hotel or the ownership or the Operation thereof, including those relating to employees, employee benefits, providing continued health care coverage under the Employees Retirement Income Security Act of 1974, zoning, building, life/safety, environmental matters, health, and liquor licensing.

“Lien” means a claim for lien or encumbrance or security interest.

“Line Item” means a line item contained in the applicable Operating Plan and Budget.

“Management Fee” means, collectively, the Base Fee and the Incentive Fee for the applicable period.

“Manager” – as defined in the preamble of this Agreement.

“Manager Centralized Services” – as defined in Section 3.

“Manager Corporate Personnel” means (i) any personnel from the corporate offices of Manager and its Affiliates who perform activities in connection with the services provided by Manager under this Agreement and (ii) the Manager Principals.

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“Manager Group” – as defined in Section 13.9.1.

“Manager Guest Data” means all guest or customer profiles, contact information (such as addresses, phone numbers, facsimile numbers and email addresses), histories, preferences and any other guest or customer information in any database of Manager or its Affiliates, whether obtained or derived by Manager or its Affiliates from: (a) guests or customers of any other hotel or lodging property (including any condominium or interval ownership properties) owned, leased, operated, licensed or franchised by Manager or its Affiliates, or any facility associated with such hotels or other properties (including restaurants, golf courses and spas); or (b) any other sources and databases, including branded websites, central reservations databases, operational data bases, and any frequent guest programs, but specifically excluding all Hotel Guest Information

“Manager Insurance Program” – as defined in Section 10.2.

“Manager Principal” means each of the following: (a) Manager’s Chief Executive Officer, its Chief Financial Officer, and its Chief Marketing Officer; (b) any Managing Member of Manager; and (c) any other Manager employee who is an area supervisor of Manager that supervises the operations of at least two (2) hotels, including the Hotel, that are Operated by Manager pursuant to a written management agreement with the owners of such hotels.

“Manager Transferee” – as defined in Section 11.1.

“Methods of Operation” means, collectively, the standards, policies, programs (including marketing programs), methods, procedures, manuals, directives, systems, specifications, equipment, designs, trade dress, merchandise, products, supplies and materials, software, copyrightable works, products and supply sources and specifications, design, construction, mechanical and technology standards, methods of Internet usage, marketing programs, and Web Pages applicable to Manager-managed Hotels, as designated or modified by Manager or its Affiliates from time to time. The marketing programs included in the Methods of Operations may include a discount program for Manager’s employees designed to encourage Manager’s employees to frequent and become familiar with Manager-managed Hotels, including the Hotel. The Methods of Operation include those programs that are applied to Manager-managed Hotels based on reasonable categories that Manager may designate, such as reasonable geographic categories or categories based on reasonably definable segments (e.g., whether the hotel is a resort or an urban hotel); provided that, to be applicable to the Hotel, any such program that is applied on the basis of any such category must be applicable to at least one Manager-managed Hotel in addition to the Hotel. All improvements to and customization of Methods of Operation are Manager’s property.

“Minimum Balance” – as defined in Section 6.3.

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“Monthly Reports” means the following reports, which shall be in form substantially similar to Manager’s reports for other hotels managed by Manager and reasonably acceptable to Owner:

(a) An executive summary containing a brief narrative summary of performance by major departments, financial results, Capital Expenditures and other pertinent financial information relating to the Hotel;

(b) A monthly operating statement;

(c) A monthly capital expenditure report. Manager may deliver this report quarterly or as part of the monthly operating statement referred to in the preceding subparagraph; and

(d) A cash flow forecast for the immediately succeeding three (3) months and for the remainder of the Operating Year, including cash requirements, and the timing thereof for the same periods.

“Mortgage” means any mortgage, deed of trust or security agreement encumbering the Hotel or any part thereof, excluding any such encumbrance held by an Affiliate of Owner

“Mortgagee” means any holder of a Mortgage (excluding any Affiliate of Owner), to the extent that any such person or entity has made a loan or extended credit.

“Net Operating Income” means “Income Before Interest, Depreciation and Amortization and Income Taxes” as shown and described in the sample “Summary Statement of Income” in Part V of the Uniform System.

“Opening Date” means the Effective Date. If, however, the Parties have executed a Construction Addendum as a part of this Agreement, then the Opening Date has the meaning set forth in such Addendum.

“Operate”, “Operating” or “Operation” means to manage, operate, use, maintain, market, promote, and provide other management or operations services to a hotel including the provision of revenue and expense management, quality assurance, facility management staffing, staff training and compliance.

“Operating Account(s)” means the bank account or accounts established for the Hotel pursuant to Section 6.1.

“Operating Expenses” means all those ordinary and necessary expenses, all as determined as determined in accordance with the Uniform System, including Reimbursable Expenses incurred by Manager or Owner, in the Operation of the Hotel in accordance with the applicable Operating Plan and Budget and the terms of this Agreement, including (i) salaries, wages, fringe benefits, fund payments and any union mandated benefits, vacation, holidays, usual and customary severance payments, WARN Act or similar closing law payments and other similar employee benefits of Hotel Personnel, (ii) the cost of maintenance and utilities, (iii) administrative expenses, (iv) the costs of advertising, marketing, and business promotion (v) any amounts payable to Manager as set forth in this Agreement.

“Operating Period” – as defined in Section 2.1.

“Operating Plan and Budget” – as defined in Section 4.1.

“Operating Standard” means the Operation of the Hotel in accordance with the Methods of Operation and in a manner reasonably calculated to (i) meet the Four Diamond rating on the American Automobile Association’s Five Diamond scale, (ii) protect and preserve the assets that comprise the Hotel and comply with the Legal Requirements, (iii) maximize Gross Operating Profit over the Term, and (iv) control and efficiently manage the Operating Expenses of the Hotel.

“Operating Supplies” means consumable items used in, or held in storage for use in (or if the context so dictates, required in connection with), the Operation of the Hotel, including food and beverages, fuel, soap, cleaning material, matches, stationery and other similar items.

“Operating Year” means each twelve-month period during the Term commencing on January 1, and ending on December 31, except that the first Operating Year is the partial year beginning on the Opening Date and ending on the following December 31, and if this Agreement is terminated effective on a date other than December 31 in any year, then the last Operating Year is the partial year commencing on January 1 of the year in which such termination occurs and ending on the effective date of termination.

“Owner” – as defined in the preamble of this Agreement.

“Party” and “Parties” – as defined in the preamble of this Agreement.

“Prohibited Transferee” means any Person that (a) is generally recognized in the community as being a person of ill repute or is in any other manner a person with whom a prudent businessperson would not wish to associate in a commercial venture, or (b) is a person that would jeopardize the Hotel’s liquor license or Manager’s or its Affiliates’ compliance with any Legal Requirements.

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“Proprietary Rights” means those trademarks, Identifiers, and Confidential Information, including the Trademarks and the Manager Guest Data, and other property rights and interests that are part of Manager’s system for Operating hotels as a Managermanaged Hotel or that by their nature would reasonably be understood to be proprietary to Manager or its Affiliates.

“Purchasing Programs” – as defined in Section 3.5.

“Reimbursable Expenses” means (a) travel and lodging expenses incurred in accordance with Manager’s corporate travel policies that are applicable to Manager’s corporate employees and that are then in effect and provided to Owner in writing (including by electronic transmission), (b) reasonable entertainment, telephone, telecopy, postage, courier, delivery, employee training expenses, (c) other reasonable expenses incurred by Manager which are directly related to its performance of this Agreement, including attorneys fees and costs incurred by Manager in connection with any Mortgagee’s request that Manager enter into any documents or certificates in connection with such Mortgagee’s loans or loan documents.

“Reserve” means a separate interest-bearing account of a type and with an institution approved in writing by Owner to be expended for the replacement of or additions to FF&E or any other Capital Expenditures.

“Shared Functions” – as defined in Section 2.4.1.

“Site” means those certain tracts of land located in the State of California, County of Orange, Cityof Laguna Beach, more particularlydescribed in Exhibit E to this Agreement.

“Substantial Casualty” – as defined in Section 10.3.

“Taking” means a taking as a result of condemnation or eminent domain, or a conveyance by Owner in lieu thereof, of all or part of the Hotel.

“Term” – as defined in Section 9.1.

“Third Party Centralized Services” – as defined in Section 3.

“Trademarks” means any trademarks, trade name, service marks and copyrights, marks, logos, symbols, know-how, trade dress, slogans and all similar proprietary rights owned by Manager or its Affiliates and associated any of the programs provided by Manager to hotels managed by Manager, including all derivations of any of the foregoing or replacements thereof.

“Uniform System” means the Uniform System of Accounts for the Lodging Industry, Tenth Revised Edition, 2006, as adopted by the American Hotel and Lodging Association and all future amendments and supplements thereto approved by Manager and Owner (such approval not to be unreasonably withheld, delayed or conditioned).

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