Case 1:14-cv SMG Document 63 Filed 08/25/17 Page 1 of 64 PageID #: 1167 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

Case 1:14-cv-03131-SMG Document 63 Filed 08/25/17 Page 1 of 64 PageID #: 1167 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK SUSAN MOSES, on behalf of herself and all others similarly situated, Case No.1:14-cv-03131 (DLI) (SMG) Plaintiff, v. APPLE HOSPITALITY REIT, INC., Defendant. STIPULATION OF SETTLEMENT This Stipulation of Settlement (hereinafter the Stipulation or the Settlement Agreement ) is entered into between Plaintiff Susan Moses on behalf of herself and all others similarly situated and Defendant Apple Hospitality REIT, Inc. (hereinafter Defendant or AHR ). WHEREAS, this action pending in the United States District Court for the Eastern District of New York, (the Action or the Class Action ) arises out of AHR s pricing of shares through its Dividend Reinvestment Program ( DRIP ); WHEREAS, on September 30, 2016, Judge Irizarry issued a Memorandum Opinion (Dkt. No. 30) granting in part and denying in part Defendant s Motion to Dismiss Plaintiff s Second Amended Complaint; WHEREAS, in her remaining claim, Count I of her Second Amended Complaint (Dkt. No. 23), Plaintiff asserted a breach of contract claim under Virginia law against 1

Case 1:14-cv-03131-SMG Document 63 Filed 08/25/17 Page 2 of 64 PageID #: 1168 AHR in connection with the DRIP pricing; WHEREAS, the parties have engaged in extensive litigation and investigation of the factual and legal basis for the claims herein; WHEREAS, in January 2017, the parties engaged in a private mediation with Hon. Theodore H. Katz, U.S. Magistrate Judge (Ret.) under the auspices of JAMS; WHEREAS, the mediation with Judge Katz resulted in an agreement in principle among the parties which now is reflected in this Stipulation; WHEREAS, the undersigned counsel for Plaintiff have concluded, based upon their investigation, discovery, and analysis, that the terms and conditions of this Stipulation are fair, reasonable, and adequate to the Class, and have agreed to settle the claims raised in this Action pursuant to the terms and provisions of this Stipulation, after considering (a) the substantial benefits that the Class will receive as a result of the Settlement, (b) the attendant risks of litigation, and (c) the desirability of permitting the Settlement to be consummated as provided by the terms of this Stipulation; and WHEREAS, Plaintiff believes that the proposed Settlement of the Action is fair, reasonable, adequate, and in the best interests of the Class; NOW THEREFORE, without any admission or concession on the part of Plaintiff of any lack of merit of the Action whatsoever, and without any admission or concession on the part of Defendant as to the merits of the Action or Defendant s defenses thereto, it is hereby 2

Case 1:14-cv-03131-SMG Document 63 Filed 08/25/17 Page 3 of 64 PageID #: 1169 STIPULATED AND AGREED by and among the parties to this Stipulation, through their respective counsel (subject to approval of this Court pursuant to Rule 23 of the Federal Rules of Civil Procedure), as follows: 1. Terms Used in This Settlement Agreement The words and terms used in this Settlement Agreement, which are expressly defined below, shall have the following meanings ascribed to them. a. Action shall mean the above captioned case. b. Allowed Loss shall mean the amount of net losses of each Class Member determined by the Settlement Administrator (as defined in Section 1(bb) hereof) to have suffered net losses in accordance with the terms of the Plan of Allocation (as defined in Sections 1(s) and 12 hereof) and which complies with Section 11 of this Settlement Agreement. c. Allowed Payment Amount shall mean the amount calculated in accordance with Section 11 of this Settlement Agreement. d. Any shall mean one or more. e. The Class means: Any person in the United States who participated in the DRIPs for Apple REIT Seven and/or Apple REIT Eight from July 17, 2007 to June 27, 2013 inclusive. f. Excluded from the proposed Class are: (a) Defendant, any entity in which Defendant has a controlling interest or which has a controlling interest in Defendant; (b) Defendant s legal representatives, predecessors, successors and assigns; and (c) any persons who affirmatively exclude themselves from the Class pursuant to the procedures described in the Class Notice (Exh. C hereto). 3

Case 1:14-cv-03131-SMG Document 63 Filed 08/25/17 Page 4 of 64 PageID #: 1170 g. Class Action shall mean the above captioned case. h. Class Counsel shall mean Lead Counsel. i. Class Member or Member of the Class shall mean a Person who falls within the definition of the Class as set forth in Section 1(e) and 1(f). j. Class Notice shall mean the notice (substantially in the form of Exhibit C hereto) given to the Class pursuant to this Settlement Agreement in the manner and form approved by the Court and which is in compliance with Rule 23 of the Federal Rules of Civil Procedure. k. Class Period shall mean the period between July 17, 2007 through June 27, 2013, inclusive. l. Court shall mean the United States District Court for the Eastern District of New York. m. Effective Date shall mean the date the Settlement becomes final as defined in Section 18 of this Settlement Agreement. n. Escrow Account means the escrow account established at a federally-insured financial institution by Lead Counsel for the Class for receipt of the settlement consideration designated for the Class, and to which Defendant shall wire the Payment pursuant to Section 4 below. o. Final Order and Judgment shall mean a final judgment and order of dismissal that is substantially in the form of Exhibit B to this Settlement Agreement. p. Lead Counsel shall mean the law firms of Salas Wang LLC, Eccleston Law, LLC, and Law Office of Christopher J. Gray, P.C. 4

Case 1:14-cv-03131-SMG Document 63 Filed 08/25/17 Page 5 of 64 PageID #: 1171 q. Parties shall mean the Plaintiff, the Class and the Defendant, collectively. r. Person shall mean an individual, corporation, partnership, association, proprietorship, trust, governmental or quasi-governmental body or political subdivision or any agency or instrumentality thereof, or any other entity or organization. s. Plan of Allocation shall mean the Plaintiff s proposed plan of distribution developed, calculated, sponsored, petitioned for approval, and executed solely by Plaintiff, substantially in the form attached hereto as Exhibit D, and about which Defendant takes no position and has no role, responsibility or involvement in the development, calculations, methodology, petition for approval or execution. The proposed plan of allocation is subject to Court approval. t. Plaintiff shall mean each Person named as a plaintiff in the Class Action. u. Class Representative shall mean Susan Moses. v. Released Claims shall mean those claims identified in Section 10 of this Settlement Agreement. w. Released Parties shall mean the Defendant and its predecessors Apple REIT Seven, Inc. and Apple REIT Eight, Inc. (the Apple REITs ) and affiliates, including but not limited to Apple Seven Advisors, Inc., Apple Eight Advisors, Inc., and Apple Fund Management, LLC,, and the Apple REITs present and former directors, partners, principals, officers, employees, agents, trustees, attorneys, insurers, reinsurers, parents, subsidiaries, affiliates, divisions, representatives, predecessors, administrators, and assigns. 5

Case 1:14-cv-03131-SMG Document 63 Filed 08/25/17 Page 6 of 64 PageID #: 1172 x. Scheduling Order shall mean the order substantially in the form of Exhibit A hereto that schedules the hearing on final approval and makes provisions for final notice. y. Defendant shall have the meaning assigned above. z. Settling Parties shall mean the Defendant, the Released Parties, and Plaintiff Susan Moses. aa. Settlement shall mean the settlement reflected in this Settlement Agreement. bb. Settlement Administrator shall mean Kurtzman Carson Consultants LLC. cc. Settlement Fund shall mean the sum of the Settlement Payment and all interest accrued thereon. dd. Settlement Payment shall mean the sum of $5,500,000.00, payable by or on behalf of Defendant, as further discussed in Section 4, infra. ee. Net Settlement Fund shall mean the Settlement Fund minus attorneys fees and all expenses, costs and taxes or other charges approved by the Court. ff. Taxes shall mean any and all federal, state and local taxes payable on interest or other income attributable to the Settlement Fund. 2. Class This Settlement is made on behalf of the Class (as defined in Section 1(e) and (f)) without prejudice to any objections, arguments and/or defenses of any party with respect to the Class in the event that this Settlement is not approved. All parties to this agreement 6

Case 1:14-cv-03131-SMG Document 63 Filed 08/25/17 Page 7 of 64 PageID #: 1173 recognize and agree that the Settlement contemplated by this Stipulation results from a compromised agreement and that the Released Parties agree to class certification only for settlement purposes such that if the Settlement fails for any reason, the Released Parties are not bound by any determination that class certification is proper under the facts alleged in the Class Action and no Party, as defined herein, or Class Counsel, will subsequently present a contrary argument in any subsequent litigation process. 3. Class Notice Expenses 3.1 Class Counsel have represented that they will seek an award of attorneys fees in a sum not to exceed 33 and 1/3 percent of the Settlement Fund, and of costs and expenses in a sum not to exceed $150,000 (inclusive of notice and claims administration costs). Further, Class Counsel have estimated that Class Notice and Settlement administration expenses and fees are anticipated to be approximately $150,000.The Parties recognize that the actual costs of Class Notice, the Settlement administration expenses and fees, and Class Counsel s litigation expenses, may vary from this estimate. 3.2 Lead Counsel shall provide complete wire transfer instructions to Defendant for the Escrow Account within three (3) business days after the Court enters the Scheduling Order. 4. Settlement Payment; Attorneys Fees, Costs and Expenses The Defendant shall transfer, and/or cause to be transferred, by wire transfer into the Escrow Account, at least seven business days before the hearing on Final Approval, the Settlement Payment amount of $5,500,000.00. The Settlement Fund is the total and exclusive amount that Defendant and the Released Parties will pay under this Settlement 7

Case 1:14-cv-03131-SMG Document 63 Filed 08/25/17 Page 8 of 64 PageID #: 1174 Agreement for the benefit of the Released Claims (as defined in Section 10 herein), including without limitation funds to satisfy claims by any Class Member, attorneys fees and costs, any Court-approved awards to the Class Representatives, payment of any and all estimated taxes, taxes, tax preparation fees, and payment of any and all administrative and notice expenses associated with the Class Action or this Settlement. 5. No Liability for Settlement Fund 5.1 Defendant and the Released Parties shall have no liability, obligation or responsibility for the investment, disbursement, or other administration or oversight of the Settlement Fund. 5.2 Any payments to the Class Members shall come from the Net Settlement Fund. 6. All Fees, Expenses, and Incentive Awards Paid from Settlement Fund Defendant and the Released Parties shall not be liable for any of the Plaintiff s fees, costs or expenses of the litigation of the Class Action or of this Settlement, including but not limited to those (a) of any of Class Counsel, experts, consultants, agents or representatives; (b) relating to any compensation or reimbursements made to the Plaintiff or Class Representatives for their time devoted or expenses incurred; (c) relating to the provision of notice to the Class; or (d) incurred in or related to administering the Settlement or distributing the Settlement Fund. After the Effective Date, all such fees, costs and expenses, and incentive awards as are approved by the Court will be paid out of the Settlement Fund. In the event that the Settlement is not approved by the Court, Defendant shall reimburse Plaintiff for up to ½ of the costs of Class Notice, not to exceed $20,000. 8

Case 1:14-cv-03131-SMG Document 63 Filed 08/25/17 Page 9 of 64 PageID #: 1175 7. All Claims Satisfied by Settlement Fund The Class and each Member of the Class is limited solely to the Settlement Fund for the satisfaction of all Released Claims against all Released Parties as provided herein. Except as provided by order of the Court pursuant to this Settlement Agreement, no Class Member shall have any interest in the Settlement Fund or any portion thereof. 8. Distribution of Settlement Fund Conditioned Upon Effective Date No distribution to any Class Member or disbursement of any kind may be made from the Settlement Fund absent Court order until after the Effective Date, as defined in Section 18 herein. 9. Maintenance of Settlement Fund The Settlement Fund shall be maintained by Lead Counsel under supervision of the Court and shall be distributed solely at such times, in such manner and to such Persons as shall be directed by subsequent orders of the Court consistent with the terms of this Settlement Agreement. The Parties intend that the Settlement Fund be treated as a qualified settlement fund within the meaning of Treasury Regulation 1.468B. Lead Counsel shall ensure that the Settlement Fund at all times complies with Treasury Regulation 1.468B in order to maintain its treatment as a qualified settlement fund. To this end, Lead Counsel shall ensure that the Settlement Fund is approved by the Court as a qualified settlement fund and that any escrow agent or other administrator of the Settlement Fund complies with all requirements of Treasury Regulation 1.468B-2. Any failure to ensure that the Settlement complies with Treasury Regulation 1.468B-2, and the consequences thereof, shall be the sole responsibility of Lead Counsel. If the 9

Case 1:14-cv-03131-SMG Document 63 Filed 08/25/17 Page 10 of 64 PageID #: 1176 Defendant fails to make the Settlement Payment when due, then Lead Counsel, on ten days written notice to counsel for the Defendant, during which ten-day period the Defendant shall have the opportunity to cure the default without penalty, may withdraw from this Settlement Agreement or elect to enforce it. The obligations of Defendant to pay may be enforced in the Class Action as provided by the Federal Rules of Civil Procedure. 10. Release 10.1 In addition to the effect of any final judgment entered in accordance with this Settlement Agreement, and provided that the Court approves this Settlement Agreement, effective upon the Effective Date each and every Class Member (whether or not they object to the Settlement and whether or not they make a claim upon or participate in the Settlement Fund (the Releasing Parties ) hereby releases and forever discharges, to the fullest extent permitted by law, the Released Parties from and against any and all manner of claims, demands, actions, suits, causes of action, damages whenever incurred, liabilities of any nature and kind whatsoever, including without limitation costs, expenses, penalties and attorneys fees, known or unknown, suspected or unsuspected, in law or equity, that each and every Class Member (including any of their past, present or future parents, subsidiaries, divisions, affiliates, stockholders, and each and any of their respective stockholders, officers, directors, insurers, general or limited partners, agents, attorneys, employees, legal representatives, trustees, associates, heirs, executors, administrators, purchasers, predecessors, successors and assigns, acting in their capacity as such) may have, ever had, now has, or hereafter can, shall or may have, directly, representatively, derivatively or in any other capacity, against the Released Parties arising 10

Case 1:14-cv-03131-SMG Document 63 Filed 08/25/17 Page 11 of 64 PageID #: 1177 out of any conduct or claims alleged in any Complaint in this Action, including, without limitation, claims which have been asserted or could have been asserted in this litigation arising under any federal or state securities law or regulation, or common law, including, without limitation, any breach of contract, breach of good faith, breach of fiduciary duty, or any other tort(collectively, the Released Claims ). Each Releasing Party hereby covenants and agrees that he/she/it shall not sue or otherwise seek to establish or impose liability against any Released Party based, in whole or in part, on any of the Released Claims. The Final Order and Judgment shall expressly enjoin the Releasing Parties from asserting any such claims against any of the Released Parties. 10.2 In addition, Releasing Parties hereby expressly waive and release any and all provisions, rights, and benefits conferred by 1542 of the California Civil Code, which reads: Section 1542. General release extent. A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor. 10.3 Each Releasing Party also hereby expressly waives and releases any and all provisions, rights, and benefits conferred by any law of any state or territory of the United States or other jurisdiction, or principle of common law, which is similar, comparable or equivalent to 1542 of the California Civil Code. Each Releasing Party may hereafter discover facts other than or different from those which he, she or it knows or believes to be true with respect to the claims which are the subject matter of this Section 10, but each Releasing Party, through this Settlement Agreement, and with the ability to seek 11

Case 1:14-cv-03131-SMG Document 63 Filed 08/25/17 Page 12 of 64 PageID #: 1178 independent advice of counsel, hereby expressly waives and fully, finally and forever settles and releases any known or unknown, suspected or unsuspected, contingent or non-contingent claim that would otherwise fall within the definition of Released Claims, whether or not concealed or hidden, without regard to the subsequent discovery or existence of such different or additional facts. The releases herein given by the Releasing Parties shall be and remain in effect as full and complete releases of the claims set forth in the Class Action, notwithstanding the later discovery or existence of any such additional or different facts relative hereto or the later discovery of any such additional or different claims that would fall within the scope of the release provided in this Section 10 of this Settlement Agreement, as if such facts or claims had been known at the time of this release. 10.4 Any persons who affirmatively exclude themselves from the Class pursuant to the procedures described in the Notice (Exh. C hereto) shall not be deemed to have released their claims as set forth in Paragraphs 10.1-10.3, supra. 11. Allowed Payments, No Reversion, Cy Pres payment of Unclaimed Funds 11.2 The Allowed Payment Amount of each Class Member shall be the Class Member s Allowed Payment under the Plan of Allocation. 11.3 For purposes of determining the extent, if any, to which a Class Member shall be entitled to receive an Allowed Payment, the following conditions (subject to Court order) shall apply: (a) Each Class Member who wishes to seek to obtain a payment from the Settlement Fund shall be required to agree to a Verification Form and Release in a form mutually agreeable to the Parties by the date specified in the Notice. Class Members need 12

Case 1:14-cv-03131-SMG Document 63 Filed 08/25/17 Page 13 of 64 PageID #: 1179 not respond or otherwise take affirmative action to agree to the Verification Form and Release. Not disputing the Verification Form and Release constitutes agreement thereto. (b) Any Class Member who disputes the Verification Form and Release and such dispute is rejected by the Settlement Administrator shall receive the amount determined to by accurate by the Settlement Administrator, and be forever barred from receiving additional payment pursuant to the Settlement, but shall in all other respects be bound by all of the terms of this Agreement and the Settlement, including the terms of the Judgment to be entered in the Class Action and the releases provided for herein, and will be barred from bringing any action against the Parties concerning the Released Claims. (c) A Verification Form and Release shall be deemed to have been agreed to by not disputing the amount in the Verification Form in accordance with the instructions provided in the Notice. (d) Each Class Member who agrees to the Verification Form and Release ( Claimant ) shall be deemed to have submitted to the jurisdiction of the Court with respect to the Claimant s claim, and the claim will be subject to investigation and discovery under the Federal Rules of Civil Procedure, provided that such investigation and discovery shall be limited to that Class Member s status as a Class Member and the amount of the claim. (e) All Class Members whose claims are not approved by the Claims Administrator shall be barred from participating in the distribution from the Settlement Fund, but otherwise shall be bound by all of the terms of this Agreement and the Settlement, including the terms of the Judgment to be entered in this Litigation and the 13

Case 1:14-cv-03131-SMG Document 63 Filed 08/25/17 Page 14 of 64 PageID #: 1180 releases provided for herein, and will be barred from bringing any action against the Parties concerning the Released Claims. (f) Any proceedings with respect to the administration, processing, and determination of claims and all controversies relating thereto, including disputed questions of law and fact with respect to the validity of claims, shall be subject to the jurisdiction of this Court. 11.4 Plaintiff agrees that Defendant and Released Parties owe no duties to Plaintiff with respect to the allowance, valuation or processing of claims. Plaintiff further agrees that she shall have no recourse to the Defendant and Released Parties with respect to any claims arising from the allowance, valuation, processing, or payment of claims pursuant to the terms of the Settlement Agreement and/or Plan of Allocation. 11.5 The sum of any Allowed Payments that are not deposited or otherwise claimed by Class Members ( Unclaimed Funds ) shall be paid by the Settlement Administrator to the Central Virginia Legal Aid Society ( CVLAS ).The Claims Administrator shall presume that any and all payments by check that have not been deposited or cashed within 275 days of the date they were mailed are Unclaimed Funds. 12. Plan of Allocation 12.1 Lead Counsel has established a Plan of Allocation that sets forth the basis for calculating Allowed Payment Amounts in a manner consistent with the terms of this Settlement Agreement. Plaintiffs proposed Plan of Allocation is attached as Exhibit D. 12.3 The Defendant shall have no responsibility for the Plan of Allocation, including, but not limited to, its establishment and implementation. 14

Case 1:14-cv-03131-SMG Document 63 Filed 08/25/17 Page 15 of 64 PageID #: 1181 12.4 The Settlement Administrator, under the supervision of Lead Counsel, shall be responsible for allocating the Net Settlement Fund among Class Members inter se pursuant to the Plan of Allocation. 13. Motion for Preliminary Approval 13.1 On May 5, 2017, Lead Counsel moved the Court for preliminary approval of the Settlement. 13.2 Lead Counsel shall, if they have not already done so, request that the Court make a decision promptly on the motion for a Scheduling Order (substantially in the form of Exh. A annexed hereto) establishing the dates for the Final Fairness Hearing and other deadlines. 13.3 Lead Counsel shall, if they have not already done so, in accordance with Rule 23 of the Federal Rules of Civil Procedure and any other applicable law or regulation, request that the Court preliminarily certify the Class as defined in Section 1(e) and (f)pursuant to Fed. R. Civ. P. 23(a) and (b)(3) (it being understood and agreed that the preliminary certification of the Class is a condition to the effectiveness of this Settlement Agreement). 13.4 Lead Counsel shall be responsible for the reproduction and distribution of the Class Notice, substantially in the form attached hereto as Exhibit C, in the manner provided in the Scheduling Order or as otherwise approved by the Court. 13.5 The Defendant shall comply with the obligations imposed on it under the Class Action Fairness Act of 2005, Pub. L. 109-2, Feb. 18, 2005, 119 Stat. 4. 15

Case 1:14-cv-03131-SMG Document 63 Filed 08/25/17 Page 16 of 64 PageID #: 1182 14. Combination of Class Notice and Settlement Notice 14.1 Lead Counsel will ask the Court to combine the notice of this Settlement with the Class Notice to be given generally, pursuant to Rule 23(c), (d) and (e) of the Federal Rules of Civil Procedure, even if such request delays notice of the proposed settlement. Defendant shall consent to such requests. 14.2 Lead Counsel shall recommend to the Court, and the Defendant shall not oppose, a program and form of notice to the Class consistent with the goals of providing economical, efficacious and expeditious notice, and the best notice practicable under the circumstances, consistent with Rule 23 of the Federal Rules of Civil Procedure. 15. Opportunities to Be Heard The Parties agree that a full and fair opportunity to be heard regarding the Settlement shall be afforded to Class Members. It shall be Lead Counsel s sole responsibility to provide notice to the Class in accordance with Section 14 of this Settlement Agreement and as ordered by the Court. Class Members shall have no recourse as to the Defendant or Released Parties with respect to any claims they may have that arise from any failure in the notice process. 16. Motion for Entry of Final Order and Judgment 16.1 In connection with the hearing to be set by the Court on the motion for final approval of this Settlement Agreement, the Parties hereto shall jointly seek entry of the Final Order and Judgment, substantially in the form attached as Exhibit B, which shall: (a) finally certify the Class in accordance with the requirements of Rule 23 of the Federal Rules of Civil Procedure, and, more specifically, pursuant to Fed. R. Civ. P. 23(a) and (b)(3) (it being understood and 16

Case 1:14-cv-03131-SMG Document 63 Filed 08/25/17 Page 17 of 64 PageID #: 1183 agreed that the final certification of the Class is a condition to the effectiveness of this Settlement Agreement); (b) finally approve this Settlement as being a fair, reasonable and adequate settlement of the Class s claims under Rule 23 of the Federal Rules of Civil Procedure; (c) direct the Parties to execute the terms of the Settlement Agreement, including, if appropriate, any termination rights; (d) direct that the Class Action be dismissed with prejudice as to the Defendant and without costs as against the Plaintiff; (e) incorporate the Releases contained in Section 10 of this Settlement Agreement; (f) determine pursuant to Rule 54(b) of the Federal Rules of Civil Procedure that there is no just reason for delay and direct that the judgment of dismissal shall be final and appealable; and (g) otherwise reserve continuing and exclusive jurisdiction over the Settlement and this Settlement Agreement, including the administration and consummation of this Settlement, and also including Class Counsel s application for the award of fees and reimbursement of expenses. 16.2 In connection with the motion for final approval of this Settlement Agreement, Lead Counsel will seek, by separate motion, an award of Lead Counsel s attorneys fees and reimbursement of Lead Counsel s expenses. If such separate motion for an award of attorneys fees and reimbursement of expenses is not approved, in whole or in part, it will have no effect on the finality of the judgment. 16.3 The Final Order and Judgment will also contain a provision ruling on the Plan of Allocation. However, the Court may modify the Plan of Allocation or reject it, in whole or in part, and this will have no effect on the finality of approval of the Settlement Agreement or of the judgment. 17. Best Efforts to Effectuate This Settlement 17.1 The Parties hereto and their counsel agree to recommend approval of this Settlement Agreement by the Court and to undertake their best efforts, including all steps 17

Case 1:14-cv-03131-SMG Document 63 Filed 08/25/17 Page 18 of 64 PageID #: 1184 and efforts contemplated by this Settlement Agreement and any other steps and efforts that may reasonably be necessary or appropriate, to obtain Court approval of this Settlement and to carry out the terms of this Settlement Agreement (e.g., taking no action which would diminish the size of the Class), provided that this will not limit any express rights to withdraw from this Settlement Agreement that the Parties have. 17.2 The Parties agree that the Court s authority includes, but is not limited to, monetary and/or injunctive relief and discretion to impose specific performance, sanctions or penalties including imposition of any sanction up to and including contempt of court, pursuant to 28U.S.C. 636(e). The Parties agree that the terms of this Settlement Agreement satisfy the requirements for injunctive relief and specific performance. 17.3 In the event that any party to this Settlement Agreement finds it necessary to bring an action or proceeding against another party to this Settlement Agreement as a result of a breach or default hereunder or to enforce the terms and conditions hereof, including but not limited to the confidentiality provisions set forth in Section 20, the prevailing party in such action or proceedings shall be paid all its reasonable attorneys fees and costs and necessary disbursements incurred in connection with such action. 18. Settlement Becomes Final; Effective Date 18.1 Unless terminated earlier as provided in Section 22, this Settlement shall become final on the first date upon which all of the following three conditions have been satisfied (the Effective Date ): 18.2 The Court has finally approved the Settlement as set forth in this Settlement Agreement in all respects as required by Rule 23(e) of the Federal Rules of Civil Procedure 18

Case 1:14-cv-03131-SMG Document 63 Filed 08/25/17 Page 19 of 64 PageID #: 1185 (for the avoidance of doubt, this required approval does not include the approval of the method of distribution); 18.3 Entry has been made of the Final Order and Judgment substantially in the form of Exhibit B hereto, including, without limitation, the incorporation of the release contained in Section 10 hereof; and (i) no objections have been made or any objections that were made, have been withdrawn; or (ii) in the event that any objections have been made and denied by the Court, the time for appeal or the time to seek permission to appeal from the Court s entry of the Final Order and Judgment has expired with no notice of appeal having been filed with the Court; and 18.4 If the Final Order and Judgment is appealed, then either (i) the Final Order and Judgment has been affirmed in its entirety by the reviewing court to which any appeal has been taken or petition for review has been presented and the time for further appeal or review of such affirmance has expired, or (ii) the withdrawal or dismissal with prejudice of all such appeals. 19. Administration of the Settlement Fund 19.1 Lead Counsel, or their authorized agents, acting on behalf of the Class, subject to Court oversight and direction and in compliance with Treasury Regulation 1.468B-2, shall administer the Settlement Fund under such terms and conditions as may be approved by the Court. Plaintiff agrees that Defendant or Released Parties owe no duties to Plaintiff with respect to administration of the Settlement Fund and have no recourse to the Defendant or Released Parties with respect to any claims arising from the administration of 19

Case 1:14-cv-03131-SMG Document 63 Filed 08/25/17 Page 20 of 64 PageID #: 1186 the Settlement Fund. Subject to Court approval by written order and the terms and conditions of this Settlement Agreement, the Settlement Fund may be used: To pay all the costs and expenses reasonably and actually incurred in connection with providing notice, locating Members of the Class, administering and distributing the Settlement Fund to Members of the Class who make claims, processing proof of claim and release forms and paying escrow fees and costs, if any; To pay Taxes, as defined herein; To pay Class Counsel s attorneys fees, expenses and costs thereon, as ordered or approved by the Court; To pay the Class Representative any incentive awards (as discussed in Section 21.2 infra) ordered or approved by the Court; To pay other charges ordered or approved by the Court; and To distribute the balance of the Settlement Fund to Members of the Class as directed by the Court. 19.2 Unclaimed Funds (as defined in Section 11, supra) shall be paid by the Settlement Administrator to the Central Virginia Legal Aid Society ( CVLAS ) as set forth in Section 11.4, supra. 20. Confidentiality Protection 20.1 All discovery materials provided by Defendant or any Released Party hereunder either before or after the date of this Settlement Agreement, shall be governed by all confidentiality and/or protective orders in force as of the date of this Settlement 20

Case 1:14-cv-03131-SMG Document 63 Filed 08/25/17 Page 21 of 64 PageID #: 1187 Agreement and by such additional confidentiality and/or protective orders as may be in effect on the date the discovery takes place. 20.2 Within 60 days after the final termination of the Class Action, Plaintiff, Class Counsel, and all experts or consultants who worked for or with Plaintiff or Class Counsel agree to return to Defendant all materials designated as confidential or restricted confidential and produced to Plaintiff by Defendant or anything derived from such materials that was not already filed (not under seal) with the Court in this action, and all copies of materials, kept in any format, or, in the alternative, to destroy all such confidential materials and anything derived from such materials (and all copies of such materials, kept in any format). 20.3 The contents of this Settlement Agreement may not be admitted into evidence in the Class Action, or in any other action or proceeding, except as may be required to approve or enforce this Settlement Agreement or to defend or enjoin such other litigation or proceeding. 21. Application for Award of Attorneys Fees and Reimbursement of Expenses 21.1 Lead Counsel may apply to the Court at the time of approval of the Settlement for an award from the Settlement Fund of Class Counsel attorneys fees and reimbursement of costs, expenses and charges. Lead Counsel intend to apply for an award of attorneys fees in a sum not to exceed 33 and 1/3 percent of the Settlement Fund, and for reimbursement of costs and expenses in an amount not to exceed $150,000 (inclusive of notice and claims administration costs). 21

Case 1:14-cv-03131-SMG Document 63 Filed 08/25/17 Page 22 of 64 PageID #: 1188 21.2 Plaintiff may also apply at the time of the distribution to Class Members from the Settlement Fund for payment of $10,000 for the Class Representative as compensation for her time devoted to the Class Action. Any such compensation that may be awarded by the Court shall be paid solely out of the Settlement Fund and Defendant shall not be liable for the payment thereof. 21.3 Any attorneys fees and/or incentive awards approved by the Court are payable by Lead Counsel upon the occurrence of the Effective Date. 22. Termination 22.1 The Defendant shall have the right, but not the obligation, in their sole discretion, to terminate this Settlement Agreement within twenty-one days of notice to the other Parties of any of the following events, provided that any such termination shall be dependent upon the realization of the condition subsequent that Plaintiff s claims shall not be dismissed or if they have been dismissed that Plaintiff s claims are reinstated. 22.2 Such events of termination are as follows: the Court denies Plaintiff s motion for approval of the Scheduling Order; or the Court declines to enter the Final Order and Judgment in substantially the form attached as Exhibit B, including, without limitation, incorporating the release contained in Section 10 hereof; or the Final Order and Judgment is withdrawn, rescinded, reversed, vacated, or modified by the Court or on appeal. 22.3 In the event that this Settlement Agreement is terminated pursuant to any of the provisions of sub-section 22.2 above, then: (i) the Settlement Fund (including any attorneys fees), shall be returned to the respective payors together with the interest earned thereon (less any portion of such interest properly reserved for the payment of Taxes); (ii) 22

Case 1:14-cv-03131-SMG Document 63 Filed 08/25/17 Page 23 of 64 PageID #: 1189 this Settlement Agreement and the Final Order and Judgment shall be null and void and of no further effect, and no party shall be bound by any of their terms, except that in addition to this Section, Sections 17, 20 and 23 shall survive; (iii) Plaintiff s claims shall be reinstated and all releases and covenants not to sue shall be of no further force and effect; and (iv) all the Defendant s rights to defend shall be reinstated, and the Parties are returned to the status quo ante. 23. This Settlement is Not an Admission This Settlement Agreement is not and shall not be deemed or construed to be an admission, adjudication or evidence of any violation of any statute or law or of any liability or wrongdoing by Defendant or any Released Party or of the truth of any of the claims or allegations alleged in the Class Action. In the event that the Settlement does not become final or is terminated in accordance with the terms hereof, then this Settlement Agreement, and the release set forth herein, shall be of no force or effect (except for Section 20, concerning confidentiality) and the terms of this Settlement Agreement shall not be offered or received in evidence in any proceeding. The Parties agree that this Settlement Agreement, including its exhibits, whether or not it shall become final, and any and all negotiations, documents and discussions associated with it, shall be without prejudice to the rights of any party, shall not be deemed or construed to be an admission or evidence of any violation of any statute or law or of any liability or wrongdoing by Defendant or any Released Party, or of the truth of any of the claims or allegations, or of any damage or injury. Evidence of this Settlement Agreement or the negotiation of this Settlement Agreement shall not be discoverable or used directly or indirectly, in any way, whether in 23

Case 1:14-cv-03131-SMG Document 63 Filed 08/25/17 Page 24 of 64 PageID #: 1190 the Class Action or in any other action or proceeding of any nature, except in connection with a dispute under this Settlement Agreement or an action in which this Settlement Agreement is asserted as a defense. 24. Binding Effect 24.1 Neither this Settlement Agreement, nor any tentative agreement reached between the Parties (which, as set forth herein, shall be superseded by this Settlement Agreement), shall become binding and enforceable unless and until this Settlement Agreement is executed by each of the Parties and approved by the Court by Final Order and Judgment. 24.2 This Settlement Agreement shall be binding upon, and inure to the benefit of, the successors and assigns of Defendant, the Released Parties, the Plaintiffs and Class Members. 24.3 The waiver by one party of any breach of this Settlement Agreement by another party shall not be deemed a waiver of any other prior or subsequent breach of this Settlement Agreement. 25. Integrated Agreement This Settlement Agreement, including all exhibits and agreements referenced herein, contains an entire, complete, and integrated statement of each and every term and provision agreed to by and among the Parties and is not subject to any condition not provided for herein. This Settlement Agreement supersedes all prior or contemporaneous discussions, agreements, and understandings among the Parties to this Settlement 24

Case 1:14-cv-03131-SMG Document 63 Filed 08/25/17 Page 25 of 64 PageID #: 1191 Agreement with respect hereto. This Settlement Agreement shall not be modified in any respect except by a writing that is executed by all the Parties hereto. 26. Documents Nothing in this Settlement Agreement may be interpreted as creating any obligation for Defendant to retain any records or documents, in any form. 27. Headings The headings used in this Settlement Agreement are for the convenience of the Parties only and shall not have substantive effect. 28. No Party is the Drafter None of the Parties hereto shall be considered to be the drafter of this Settlement Agreement or any provision hereof for the purpose of any statute, case law or rule of interpretation or construction that might cause any provision to be construed against the drafter hereof. 29. Choice of Law All terms of this Settlement Agreement and the exhibits hereto shall be governed by and interpreted according to the substantive laws of the Commonwealth of Virginia without regard to its choice of law or conflict of laws principles. 30. Execution in Counterparts This Settlement Agreement may be executed in counterparts. Facsimile signatures and/or signatures delivered as.pdf files via e-mail shall be considered as valid signatures as of the date hereof although the original signature pages shall thereafter be appended to this Settlement Agreement. 25

Case 1:14-cv-03131-SMG Document 63 Filed 08/25/17 Page 26 of 64 PageID #: 1192 31. Submission to and Retention of Exclusive Jurisdiction The Parties and Class Members hereby irrevocably submit, to the fullest extent permitted by law, to the exclusive jurisdiction of the United States District Court for the Eastern District of New York for any suit, action, proceeding or dispute arising out of or relating to this Settlement Agreement, or to the applicability of this Settlement Agreement, and exhibits hereto. Solely for purposes of such suit, action or proceeding, to the fullest extent permitted by law, the Parties hereto irrevocably waive and agree not to assert, by way of motion, as a defense or otherwise, any claim or objection that they are not subject to the jurisdiction of such Court, or that such Court is, in any way, an improper venue or an inconvenient forum or that the Court lacked power to approve this Settlement Agreement or enter any of the orders contemplated hereby. 32. Notices All notices under this Settlement Agreement shall be sent to each of the undersigned counsel or such other address as a party to this Settlement Agreement may designate in writing, from time to time, in accordance with this Settlement Agreement. 33. Timing If any deadline imposed herein falls on a non-business day, then the deadline is extended until the next business day. IN WITNESS WHEREOF, the Settling Parties have caused this Stipulation of Settlement to be executed by their duly authorized attorneys: 26

Case 1:14-cv-03131-SMG Document 63 Filed 08/25/17 Page 27 of 64 PageID #: 1193 case l:l4 cv 0313l~DLl SMG Document 60 1 Filed OB/21117 Page 27 of 29 PageJD #: 1095 c rohacvice) W.LLC a.mes J. Ecc es'ton Stephany D. McLaughlin 55 W. Monroe, Suite 610 Chicago. IL @603 (312) 334 0000 O 12) 332 0003 (Faeillmi1e) jgccles(ru1@~cclesttin!!lw.com. F CE OF C RIS'fOPHERJ. ORAY,.C. Christophed. Gray 360 Lexington A venue, 14th floor New York. New York 100 l'l GU2l838 32'1 {112} 931~3139 (fax) chi is@investorlawvers.net ~~ ~~Icy., Apple.RElr Companie,., Executive Vice President, General Counsel 8l4.Main St.... Richmond, VA 23219 27..

Case 1:14-cv-03131-SMG Document 63 Filed 08/25/17 Page 28 of 64 PageID #: 1194 Case 1:14-cv-03131-DLl-SMG Document 60-1 Filed 08/21117 Page 28 of 29 PagelD #: 1096 MCGUIREWOODS LLP Elizabeth F. Edwards Stanley A. Roberts Gateway Plaza 800 East Canal Street Richmond, VA 23219-3916 (804) 775-1000 (804) 775-1061 (fax) eedwards@mcguirewoods.com sroberrs@mcguirewoods.com Counsel for Defendant Apple Hospitality REIT, Inc. 2&

Case 1:14-cv-03131-SMG Document 63 Filed 08/25/17 Page 29 of 64 PageID #: 1195 EXHIBIT "A"

Case 1:14-cv-03131-DLI-SMG 1:14-cv-03131-SMG Document 6360-2 Filed Filed 08/25/17 08/21/17 Page Page 30 of 164 of 7 PageID #: #: 1196 1098 UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK SUSAN MOSES, on behalf of herself and all others similarly situated, Case No. 1:14-cv-03131 (DLI) (SMG) Plaintiff, v. APPLE HOSPITALITY REIT INC., Defendant. [PROPOSED] ORDER PRELIMINARILY APPROVING CLASS ACTION SETTLEMENT, PRELIMINARILY CERTIFYING SETTLEMENT CLASS, AND APPOINTING INTERIM CLASS COUNSEL WHEREAS, the above-titled putative class action (the Class Action or the Litigation ) is pending before the Court; WHEREAS, Plaintiff and Defendant have entered into a Stipulation of Settlement dated which is subject to review and approval under Rule 23 of the Federal Rules of Civil Procedure and which, together with the exhibits thereto, sets forth the terms and conditions for the proposed settlement of the Litigation (the Settlement ) and the dismissal of the Litigation with prejudice; WHEREAS, the Court has read and considered the Stipulation of Settlement 1 and exhibits thereto, and the accompanying documents; 1 Unless otherwise stated, all capitalized terms used herein have the meanings defined in the Stipulation of Settlement. 1

Case 1:14-cv-03131-DLI-SMG 1:14-cv-03131-SMG Document 6360-2 Filed Filed 08/25/17 08/21/17 Page Page 31 of 264 of 7 PageID #: #: 1197 1099 WHEREAS, the Counsel for Plaintiff have submitted, and the Court has reviewed, a motion and accompanying memorandum of law supporting preliminary approval of the proposed Settlement; and WHEREAS, the Parties to the Settlement have consented to the entry of this Order, the Court: NOW, THEREFORE, HEREBY ORDERS, ADJUDGES AND DECREES THAT: 1. Pursuant to Rule 23(a) and Rule 23(b)(3) of the Federal Rules of Civil Procedure, and for the purposes of the Settlement only, the Court preliminarily certifies the following Settlement Class (the Class ): Any person in the United States who participated in the DRIPs for Apple REIT Seven and/or Apple REIT Eight from July 17, 2007 to June 27, 2013 inclusive 2. 2. Pursuant to Fed. R. Civ. P. 23, and for purposes of this Settlement only, the Court hereby preliminarily appoints Susan Moses as class representative of the Class ( Class Representative ). 3. The Court preliminarily finds that the prerequisites for maintaining a class action under Rule 23(a) of the Federal Rules of Civil Procedure have been satisfied for the Settlement Class in that: (a) the number of Class members is so numerous that joinder of all members is impracticable; (b) there are questions of law and fact common to each member of the Class; (c) the claims of the Class Representative are typical of the claims of the members of the Class she seeks to represent; and (d) Plaintiff will fairly and adequately represent the interests of the Class. 2 Excluded from the proposed Class are: (a) Defendant, any entity in which Defendant has a controlling interest or which has a controlling interest in Defendant; (b) Defendant s legal representatives, predecessors, successors and assigns; and (c) any persons who affirmatively exclude themselves from the Class pursuant to the procedures described in the Notice. 2

Case 1:14-cv-03131-DLI-SMG 1:14-cv-03131-SMG Document 6360-2 Filed Filed 08/25/17 08/21/17 Page Page 32 of 364 of 7 PageID #: #: 1198 1100 4. Plaintiff also satisfies Federal Rule of Civil Procedure 23(b)(3). Common questions of law and fact predominate and a class action is the superior method available to fairly and efficiently litigate this class action involving the sale of securities. 5. Having considered the factors set forth in Fed. R. Civ. P. 23(g)(1) and the qualifications of Plaintiff s counsel submitted to the Court, the Court hereby preliminarily appoints Salas Wang LLC, Eccleston Law, LLC, and Law Office of Christopher J. Gray, P.C. as Interim Class Counsel. 6. The Court preliminarily concludes that the Settlement was negotiated in good faith and is fair, reasonable and adequate, subject to proof to this Court s satisfaction in connection with Final Approval. See Fed. R. Civ. P. 23(e). Accordingly, the Court hereby preliminarily approves the Settlement. 7. The Court reserves the authority to approve the Settlement with or without modification and with or without further notice of any kind. The Court further reserves the authority to enter its Final Order and Judgment approving the Settlement and dismissing the Claims against Defendant on the merits and with prejudice regardless of whether it has awarded attorneys fees and expenses. 8. A Final Fairness Hearing (which, from time to time, and without further notice to the Class other than by filing a notice on the docket in the Class Action in advance of the Final Fairness Hearing, may be continued or adjourned by order of this Court) will be held by this Court on, 2017 at.m. for the following purposes: (a) to finally determine whether the Class satisfies the applicable prerequisites for certification under Fed. R. Civ. P. 23(a) and 23(b)(3); 3

Case 1:14-cv-03131-DLI-SMG 1:14-cv-03131-SMG Document 6360-2 Filed Filed 08/25/17 08/21/17 Page Page 33 of 464 of 7 PageID #: #: 1199 1101 (b) to finally determine whether the Settlement should be approved by the Court as fair, reasonable and adequate and in the best interests of the Class; (c) to determine whether a Final Order and Judgment should be entered pursuant to the Settlement Agreement, dismissing the Class Action with prejudice as against the Plaintiff and the Class and effectuating the releases described below; (d) to determine whether the proposed Plan of Allocation of the settlement fund set forth in the Notice is fair and reasonable, and should be approved by the Court; (e) to consider any request by counsel for an award of attorneys fees and reimbursement of litigation expenses; (f) to hear and determine any objections to the Settlement or to any request by counsel for an award of attorneys fees and reimbursement of litigation expenses; and (f) to rule on such other matters as the Court may deem appropriate. 9. The Court approves the substance and requirements of the Notice, in the form annexed as Appendix A hereto. 10. No later than, 2017, Interim Class Counsel shall mail, or cause to be mailed, the Notice to those Class members who can be identified through reasonable effort. Not later than, 2017, Interim Class Counsel shall also cause a summary notice in the form annexed hereto as Appendix B to be published via PR Newswire or another national wire service and shall establish a website that will (at a minimum) provide Class members with access to this Order, the Stipulation of Settlement, the Notice, and all of the papers before the Court on this motion. 11. The Court finds that mailing and dissemination of the Notice, as described herein, constitutes the best notice practicable under the circumstances and is due and sufficient notice of 4