What are the specific obligations of a Crowne Plaza franchisee regarding the maintenance of standards and specifications, as mentioned in Item 8, and how do these relate to the franchisee's ongoing operational obligations?

SERVICES**

Except as described below, you are not required to purchase or lease products or services from Holiday or its affiliates, or from suppliers approved by Holiday, or under Holiday's specifications.

Standards and Specifications:

You must build, design, furnish, equip, decorate and supply the hotel subject to Holiday's approval of your plans. You must equip and operate the Hotel with products which meet the Standards and specifications, including those described in the License and the Standards for the applicable Crowne Plaza Hotel brand. All modernization, renovation and upgrading of your Hotel must also meet the Standards and specifications. Holiday issues specifications by brand of product and in many instances by brand "or equivalent", by physical characteristics and by other methods, depending on the product or service involved. Holiday can make changes to the Standards. These changes will become binding on you as if originally set forth in the Standards. Any change Holiday makes must be approved by Holiday's designated internal franchise committee or subcommittee, after seeking the advice and counsel of the appropriate committee of the IHG Owners Association. Holiday will provide you with an explanation of any change, in writing, at least 30 days before it goes into effect.

Holiday estimates that the Standards and specifications will apply to 90% to 95% of your purchases and leases. If you purchase or lease any equipment or supplies not previously approved by Holiday, Holiday may require you or the manufacturer to submit a written request for its approval. Holiday reserves the right to require removal of any non-approved product installed at the Hotel. While Holiday has no obligation to respond within a certain time frame, it expects to do so within 45 to 60 days from receipt of your request. Holiday may require certain information, tests, certifications and inspections, at no expense to Holiday, as a condition of approval.

All Crowne Plaza brand group hotels must install in all guestrooms the approved bedding components that comply with the Crowne Plaza Bedding Collection. To ensure brand-wide consistency of the sleep experience, you must purchase mattresses and pillows through the approved suppliers. You must purchase the brand-mandated components (for example duvets and sheets) through the IHG approved distributors.

Under the Crowne Plaza Bulk Bath Amenity Program, all Crowne Plaza brand group hotels must install in all guestrooms the approved bath components that comply with the Guest Bathroom and Supplies and Amenities standards and the IHG Journey to Tomorrow initiative. Approved IHG suppliers have been identified for Crowne Plaza bath amenities. To ensure brand-wide consistency of quality, look and feel, you must purchase the Crowne Plaza bath amenities and bulk amenity brackets from the specified vendors. Under the Crowne Plaza Fitness Center program, all Crowne Plaza brand group hotels must install the fitness center design elements outlined in the section of the Standards regarding fitness centers. Additionally, approved equipment vendors have been identified and all equipment purchases must go through one of the three approved vendors outlined in the section of the Standards regarding fitness centers. Lastly, minimum fitness center square footage requirements which must be adhered to are also outlined in the section of the Standards regarding fitness centers. All plans must be submitted to the IHG PIP and Plan Review team at amerplanreview@ihg.com for review and approval prior to ordering any equipment or design elements.

Holiday requires you to hire qualified, licensed, professional advisors with hotel experience in the form of a project team, which must consist of an interior designer with upscale hotel brand experience and may, depending on complexity and scope of the work, also consist of an architect, engineer, art consultant, lighting consultant, or other related specialist when building or renovating a Crowne Plaza hotel. If you cannot find such licensed professional help, contact your Openings Regional Director. All architects and interior designers must be approved by Holiday prior to the project commencing. Any design work submitted by unqualified individuals hired by you will be rejected and your Hotel can be subject to Plan default, resulting in an assessment of fees under the terms of your License. The fee for such Plan default will be up to $5,000. At our sole discretion, you may be required to remove any product installed in your Hotel that has not been approved by IHG explicitly in writing before installation.

In some instances, Holiday receives a small commission from vendors' sales to offset Holiday's costs of implementing the Standard Room Decor Program ("SRD Program"). These costs include professional design services for creating new décor schemes for Holiday's licensees, prototype room development and testing, specifications development, negotiating and contracting services for items that the licensee may buy through this program, web site updating and maintenance, and licensee support service expenses. The commission amounts to ½% to 3% for SRD items. The information below reflects operations as of the date of this disclosure document and is subject to change. Standard Room Décor commissions for the year ending December 31, 2024, were $5,600,000.

At the time Holiday and you sign a License, and before your Hotel opens, SCH may determine to fund your purchases from approved suppliers and then invoice you. You must reimburse SCH for these purchases. If Holiday funds your purchase before your Hotel opens, Holiday will not receive fees from approved suppliers.

Suppliers:

If Holiday requires you to purchase equipment, furnishings, supplies or other products for the Hotel from a designated or approved supplier or service provider in the License, the Standards, or other communication to you, then you must purchase the mandated product unless you receive prior approval from Holiday to purchase such products from another source whose products meet such specifications. Holiday can designate the type and brand of products to be used at your Hotel to comply with the Standards.

Holiday can designate the designers, architects, contractors and suppliers who will perform Renewal Work and brand refresh work at your Hotel and who will provide brand specified products, such as fixtures or furniture, and services.