What must a Sonesta Select Sonesta Essential franchisee do to comply with Brand Standards?

VICES**

Standards and Specifications

In order to maintain quality and uniformity among Brand Hotels, each Brand Hotel must meet the Brand Standards. These standards require that your Hotel and most of the items you use or sell at your Hotel meet our specifications. You must strictly comply with all Brand Standards. In constructing or renovating and operating your Hotel, you must use only those products, supplies, equipment, furnishings, and services that we have approved according to our Brand Standards for appearance, function, and performance, including: the furniture, fixtures, and equipment ("FF&E"); operating supplies and equipment ("OS&E"); décor; layout and floorplan; signage; advertising materials; uniforms; photography; logoed items; operating supplies; guest room amenities; consumable inventories; food and beverage services; wireless high-speed internet access; in-room entertainment; Computer System, including Central Reservation System, Property Management System, and Revenue Management System; insurance; telephone; security items; and such other products and services for which we periodically issue Brand Standards (collectively, the "Supplies"). The Brand Standards may include minimum requirements for delivery, performance, design, and quality of the Supplies. We will provide you this information in our Brand Manual, which we may revise from time to time, or otherwise in writing.

You must procure and maintain, at your expense, insurance coverage in the types and amounts we periodically require, in addition to any other insurance that may be required by applicable law, your landlord, your mortgagee, or otherwise. At a minimum, such policies include the following (primary and excess/umbrella policies may be used in any combination as long as the total minimum limit requirements are met):

• commercial general liability (CGL) insurance for any claims or losses arising or resulting from the operations/premises of the hotel with limits of not less than $1,000,000 per occurrence and a general aggregate limit not less than $3,000,000; limits shall apply on a per location aggregate basis if the hotel is insured under a blanket policy;

• liquor liability (applicable only when or if you distribute, sell, serve, or furnish alcoholic beverages) with limits of not less than $1,000,000 per occurrence; limits shall apply on a per location aggregate basis if the hotel is insured under a blanket policy;
• automobile liability insurance including owned, non-owned, and hired vehicles for combined single limits of bodily injury and property damage of not less than $1,000,000 per occurrence and a general aggregate limit not less than $3,000,000;
• garage-keeper's liability to the extent that hotel operations include parking operations, with a limit adequate to cover the full actual value of all automobiles that are in your care, custody, and control at any one time;
• umbrella or excess liability insurance policies as follows: (i) if your Hotel is three stories or less, then you must carry coverage of at least $14,000,000, or (ii) if your Hotel is more than three stories, then you must acquire a policy with coverage of at least $24,000,000. All policies providing excess/umbrella coverage shall follow the form of the primary CGL, worker's compensation, automobile liability, and liquor liability policies;
• property/all risk and contents insurance (or builder's risk insurance during any period of construction) on all building(s) and contents against loss or damage by fire, lightning and all other risks associated and covered by the "all risks" policy form all in an amount not less than 90% of the replacement cost. Terrorism risk insurance (TRIA) coverage is required;
• boiler & machinery insurance against loss or damage from explosion of boilers or pressure vessels to the extent applicable;
• business interruption insurance covering at least 12 months loss of profits and necessary continuing expenses for interruptions caused by a covered occurrence;
• workers' compensation insurance in statutory amounts for all your employees and employers' liability insurance in amounts not less than $1,000,000 per accident or disease;
• crime insurance covering employee dishonesty, such as theft of money, securities, or property, with a limit of not less than $1,000,000 per occurrence;
• employment practices liability insurance covering wrongful acts arising from the employment process; and
• cyber liability insurance in the amount of not less than $1,000,000 per occurrence.

Each of the insurance policies must: (i) be written by an insurance company with an A.M. Best rating of "A" or better; (ii) to the extent legally permissible, name us, our affiliates, and our and their respective officers, directors, and employees as additional named insureds and loss payees for all liability coverage policies; (iii) provide that the coverages will be primary and that any insurance carried by us will be excess and non-contributory;

Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 46–50)