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Management contract for major hotel—With incentive provisions. The phrase "operating term" shall mean the period commencing January 1, 19__ and ending on the last day of the original term or, if extended, the last day of the final renewal term. An "operating year" shall mean a full calendar year (January 1 through December 31) during the operating term. Section 3. Duties and Powers of Parties During Operating Term. 3.1. Duties and Powers of Manager. During the operating term, _________[Manager] shall have the following duties and powers: (a). Consistent with the provisions of this Contract, _________[Manager] shall have the right to supervise and direct the management and operation of the Hotel for the account of Owner. (b). _________[Manager] shall supervise and direct the management and operation of the Hotel in accordance with _________, Inc. standards and, subject to such standards, shall have the right to determine operating policies (including the establishment of room rates and charges for food, beverage and entertainment), standards of operation, quality of service and any other matters affecting customer opinion. _________[Manager] shall submit to Owner an original schedule, and revisions from time to time of all room rates and all charges for food, beverage, entertainment and all other services and facilities. All phases of promotion and publicity with respect to the Hotel shall be generally the responsibility of _________[Manager]. (c). Within 30 days after the beginning of the first operating year and at least 30 days before the beginning of each operating year after the first operating year, _________[Manager] shall submit to Owner an annual budget in reasonable detail for such operating year setting forth the estimated expenditures during such operating year for (1) repairs and maintenance, (2) operating equipment and capital expenditures (which term shall include replacements of and all additions to furnishing and equipment), (3) all other replacements of furnishings and equipment, (4) advertising, business promotion and personnel programs of the Hotel, and (5) all other anticipated operating expenses. Each such annual budget is referred to as the "Annual Plan." No capital expenditures under sections (2) and (3) above shall be made by _________[Manager] until that portion of the Annual Plan shall have been approved in writing by Owner, and no amount shall be expended by _________[Manager] in excess of or other than pursuant to the approved Annual Plan. Owner shall respond within 30 days from receipt of Plan from _________[Manager]. If and to the extent that any of items 1, 2, 3, 4, and 5 exceed the Annual Plan budget figures, _________[Manager] agrees to provide Owner with a prompt and reasonable explanation of such excess, in such detail as Owner reasonably requests. (d). _________[Manager] shall have the power and responsibility to hire, promote, discharge and supervise the executive staff of the Hotel (i.e. general manager, assistant managers and department heads) and to supervise through the executive staff the hiring, promotion, discharge and work of all other employees performing services in or about the Hotel. Owner reserves right to approve or disapprove general manager. All of such employees shall be employees of Owner. _________[Manager] shall not be liable to such employees for their wages or compensation _________[Manager] will negotiate, on the Owner's behalf, with any labor union lawfully entitled to represent such employees, but any resulting collective bargaining agreement or labor contract must first be approved by Owner and Owner shall be the only authorized person to execute same. (e). _________[Manager] shall negotiate and consummate, in the name of Owner, contracts or arrangements with concessionaires but only with the prior approval of Owner. (f). _________[Manager] shall have the right to enter into such contracts in the name of and at the expense of Owner as may be deemed necessary or advisable for the furnishing of all utilities, services, operating supplies and other material as may be reasonably needed for the maintenance and operation of the Hotel. (g). _________[Manager] shall, during such operating year, at Owner's expense and in the name of Owner but subject to the limitations of the Annual Plan for such operating year as respects capital expenditures, make all other reasonably needed expenditures for the maintenance and operation of the Hotel. (h). _________[Manager] shall apply for, obtain and maintain, in the name of and at the expense of the Owner, all licenses and permits required of Owner or _________[Manager] in connection with the management and operation of the Hotel. (i). _________[Manager] shall cause to be performed at Owner's expense all such acts and things to be done in and about the Hotel as shall be required by any statute, ordinance, law, rule, regulation or order of any governmental or regulatory body, except such matters as in accordance with good business practice should be contested. (j). _________[Manager] shall establish and maintain a commercial account ("the Operating Account") in owner's name in a banking institution, and only authorized designees of _________[Manager] or Owner shall be empowered to sign checks on such account. There shall be deposited in the Operating Account all monies furnished by Owner as working capital and all monies received in connection with the operation of the Hotel. To the extent practicable, all expenditures required to be made in connection with the ownership, maintenance and operation of the Hotel (including the management fees of _________[Manager]) shall be paid out of the Operating Account. All funds in the Operating Account shall be the property of Owner. (k). Within 15 days after the end of each calendar month during an operating year, _________[Manager] shall deliver or cause to be delivered to Owner and its designees a profit and loss statement showing the results of operation of the Hotel for such calendar month and for the period beginning with the commencement of such operating year and ending with such calendar month. Such statement shall be prepared by the internal auditor for the Hotel from the books of account of the Hotel. Within 90 days after the end of each operating year, _________[Manager] will also deliver or cause to be delivered to Owner a statement of profit and loss (including all supporting departmental schedules of revenues and expenses) showing the results of the operation of the Hotel for such operating year; each such statement of profit and loss shall (to the extent reasonably possible) be accompanied by an unqualified opinion of an independent firm of certified public accountants, to the effect that such statement fairly presents the results of the operation of the Hotel during such operating year; Owner shall have the right to select any such accounting firm. Such statement of profit and loss shall have annexed to it a computation of the management fees earned by _________[Manager] for such operating year. All costs and expenses incurred in connection with the preparation of any such statements, schedules and computations and the fees of such firm of accountants shall be borne by Owner and for all purposes of this Contract shall constitute an expense of the Hotel. (l). _________[Manager] shall, in the name and at the expense of Owner, take any and all reasonable legal actions or proceedings to collect charges, rent or other income from the Hotel or to oust or dispossess tenants or other persons in possession under, or to cancel or terminate any concession agreement. All expenses in such connection shall for all purposes of this Contract constitute an expense of the Hotel. 3.2. Duties of Owner. During the operating term, Owner shall have the following duties and obligations: (a). Owner shall promptly examine each Annual Plan submitted to it by _________[Manager] pursuant to and in accordance with this Contract and, if such Annual Plan is reasonable and proper as respects capital expenditures, approve the subdivision of it, relating to capital expenditures within 20 days after submission of the same by _________[Manager] to Owner. (b). Owner shall cooperate with _________[Manager] in applying for, obtaining and maintaining all licenses and permits required in connection with the management and the operation of the Hotel and shall execute and deliver any and all applications and other documents that may be necessary or proper in that connection. (c). Owner shall comply with all statutes, ordinances, laws, rules, regulations and orders of any Federal, state or municipal government and appropriate departments, commissions, boards and officers having jurisdiction in the premises, which are applicable to Owner and relate to the use or manner of use of the Hotel, as well as with all orders and requirements of the local Board of Fire Underwriters or any other body which may exercise similar functions; provided that Owner, at its sole expense and without cost to _________[Manager] shall have the right to contest by proper legal proceedings the validity, so far as applicable to it, of any such statute, ordinance, law, rule, regulation, order or requirement, provided such contest shall not result in a suspension of operations of the Hotel. Owner shall prosecute all such proceedings with all due diligence. (d). Owner shall maintain or provide in the Operating Account funds sufficient to pay the payroll and other current liabilities of the Hotel (including the management fees) as they fall due and to replace Operating Supplies and other operating inventories as they are consumed, so that the Hotel shall operate without interruption and efficiently, and Owner shall not make withdrawals from the Operating Account inconsistent with such obligation. (e). Owner shall designate the name and address of a representative who shall act for Owner in all dealings with _________[Manager], including the giving of approvals to be given by Owner. _________[Manager] may, until Owner gives notice to _________[Manager] to the contrary, rely upon any approval, decision or other act of such representative as being the approval, decision or act of Owner. Owner may from time to time by notice to _________[Manager] change the name and/or address of such representative. Section 4. Management Fee and Payment To Owner. 4.1. Basic Fee. _________[Manager] shall, subject to the provisions of Section 4.3, be entitled to receive as its basic fee for each operating year an amount equal to 4% of the "Gross Revenue" of the Hotel (as such term is defined in Section 4.6) for the first five years and 3% thereafter, assuming the term of contract (Section 2) has been appropriately extended. Such basic fee shall, subject to the provisions of Section 4.3, be payable in tentative monthly installments out of the Operating Account to the extent of funds available in it, and otherwise by Owner, within 15 days after the end of each month included in such operating year, based upon the unaudited Gross Revenue for such month. 4.2. Incentive Fee. In addition to the basic fee, _________[Manager] shall, subject to the provisions of Section 4.3, be entitled to receive as its incentive fee for each operating year an amount equal to 8% of the Profit (as defined in Section 5.2) if any for such operating year. Such incentive fee shall, subject to the provisions of Section 4.3, be payable in tentative monthly installments out of the Operating Account to the extent of funds available in it, and otherwise by Owner, within 15 days after the end of each month included in such operating year, based upon the unaudited Profit for such month. Incentive fee will increase to 10% of the Profit, as regards a full 12-month operating year, when gross food and beverage sales exceed $1,000,000 within the full 12-month operating year. 4.3. Minimum Fee Considerations. _________[Manager] shall be guaranteed by Owner a minimum fee for a full 12-month operating year of $60,000, except that: if gross food and beverage sales do not exceed $750,000 in any one fiscal year (January 1—December 31) following commencement of the smorgasbord operation, the annual fee will only be computed at 4% of gross sales for the first 60 months (3% thereafter) and 8% of net profit, adjusted accordingly at the end of such fiscal year. 4.4. Profit Remittance to Owner. _________[Manager] shall, in respect of each operating year, acknowledge Owner's right to withdraw its profit remittance for such operating year in an amount equal to the Profit for such operating year after deduction of _________[Manager's] fees earned for such operating year as provided, respectively, in Sections 4.1, 4.2 and 4.3. In respect of each month during such operating year, Owner shall withdraw out of the Operating Account (but only to the extent thereof) as a tentative monthly installment on Owner's total profit, an amount equal to the Profit for the cumulative period ending with such month less all tentative monthly installments of fees to _________[Manager] for each month included in such cumulative period, as determined under Sections 4.1, 4.2 and 4.3, and less the amounts of Profit previously withdrawn by Owner on account of such cumulative period. 4.5. Adjustment of Tentative Monthly Installments of Management Fee and Profit Withdrawal. Within 10 days after submission to Owner of the profit and loss statement for an operating year referred to in Section 3.1 (1), if the aggregate fees payable to _________[Manager] for such operating year shall be more or less than the aggregate [Manager] of the tentative monthly installments previously paid to _________[Manager] in respect of its fees under Sections 4.1, 4.2 and 4.3, then _________[Manager] shall pay to Owner any such overpayment or Owner shall pay to _________[Manager] any such underpayment (or _________[Manager] may withdraw from the Operating Account the amount of any such underpayment). 4.6. Gross Revenue. "Gross Revenue" for any period during the operating term shall mean and include all revenues and income of any kind derived during such period directly or indirectly from the Hotel, whether on a cash basis or on credit, paid or unpaid, collected or uncollected, and otherwise determined in accordance with The Uniform System of Accounts for Hotels, Sixth Revised Edition ("the Uniform System"), excluding, however, any and all excise, privilege, sales and use taxes collected directly from patrons or guests or as a part of the sales price of any goods, services, or displays, such as gross receipts, admissions, cabaret or similar or equivalent taxes, provided that in determining Gross Revenues for any operating year there shall be deducted the aggregate addition made to the reserve for doubtful accounts for such operating year. Section 5. Determination of Profit. 5.1. Books and Records. _________[Manager] shall keep full and adequate books of account and other records reflecting the results of the operation of the Hotel. Such books and records shall be kept in all material respects in accordance with the then latest edition of the Uniform System of Accounts for Hotels, as adopted by the American Hotel Association, except as otherwise specified in this Contract. The books shall be available for Owner inspection at the Hotel, during normal business hours. 5.2. "Profit" Defined. The "Profit" derived from the Hotel for any operating year shall mean the Gross Operating Profit of the Hotel for such operating year determined in accordance with the Uniform System (attached to this Contract as Exhibit "C" is a copy of Page 12 of the Uniform System showing the items of income and expense which are taken into account in determining Gross Operating Profit) less deductions for the following amounts (but only to the extent that such amounts are not otherwise deducted under the Uniform System in computing Gross Operating Profit): (a) an amount equal to the aggregate deductions made under Section 5.3 for the calendar months included in such operating year minus the credit or plus the charge to be made at the end of such operating year pursuant to Section 5.3; (b) charges authorized under Section 6.2 to the extent allocable to such operating year; (c) to the extent a private telephone system is purchased, an amount comparable to the equipment rental charges that would have been incurred during such operating year by using the Bell system; and (d) any other amounts incurred during such operating year which are, under this Contract, chargeable to expense or deductible in computing Profit. The "Profit" for any month shall be determined in the same manner, except that the deduction under (a) above shall be equal to the actual deduction made under Section 5.3 for such month. 5.3. Provision for Replacements of Operating Equipment, Furnishings and Fixtures. (a). During each full operating year _________[Manager] shall deduct for each month included in such operating year, in computing Profit for such period, 1/12 of the total amount of the estimated cost of replacements of or additions to Operating Equipment, Furniture and Equipment, for such operating year and shall credit an equal amount to a book account to be known as "Replacements of Operating Equipment, Furniture and Fixtures." _________[Manager] shall be entitled as agent of the Owner to sell Operating Equipment no longer needed for operation of the Hotel, and all proceeds from their sale shall also be credited to that account. All expenditures made by _________[Manager] for replacements of or additions to Equipment, Furniture, and Fixtures during such operating year shall be charged against such account, and at the end of such operating year such account shall be closed and an adjustment made by crediting or charging Profit for such operating year with the excess or deficit as the case may be. (b). Except as provided in the Annual Plan referred to herein, _________[Manager] shall not, without approval of Owner, expend any monies for replacements of or additions to Furnishings and Equipment in excess of the amount budgeted in the Annual Plan. If _________[Manager] shall, with the approval of Owner, expend such monies in excess of the amount then budgeted in the Annual Plan, the amount so expended shall be paid out of the Operating Account and, unless otherwise agreed by _________[Manager] and Owner, shall be deemed to be an operating expense of the Hotel for the period in which paid for the purpose of determining Profit under this Contract. Section 6. Repairs and Changes. 6.1. Repairs and Maintenance. _________[Manager] shall, except as provided in Section 9 and except as otherwise limited in this Contract, maintain the Hotel in good repair and condition at Owner's cost and expense. 6.2. Other Alterations. Any alterations, additions or improvements shall, if mutually agreed upon, be made promptly and shall be paid for by Owner. Section 7. General Covenants of Manager and Owner. 7.1. Operating Expenses. Subject to the provisions of this Contract, Owner shall bear all of the costs and expenses of maintaining and operating the Hotel, including, without limitation, the salaries of all of its personnel. If _________[Manager] and Owner jointly shall determine that the general manager of the Hotel must reside at the Hotel and be available twenty-four hours a day in order to perform properly the duties of the employment, it is agreed that such general manager, in addition to salary, shall receive the normal maintenance customarily provided a general manager (free room and board). The general manager shall also be reimbursed for any and all expenses, including business entertainment and traveling expenses, which such general manager may reasonably incur in the performance of duties. 7.2. Sign. Owner agrees, at Owner's expense, to change wording of sign near the entrance of the Hotel to read "_________," or reasonable variations of it. 7.3. Right of Inspection and Review. _________[Manager] shall accord to Owner and the duly authorized officers, accountants, employees, agents and attorneys of Owner the right to enter upon any part of the Hotel at all reasonable times during the operating term for the purpose of examining or inspecting the Hotel or examining or making extracts from the books and records of the Hotel operation, or for any other purpose which Owner, in its discretion, shall deem necessary or advisable, but the same shall be done with as little disturbance to the operation of the Hotel as possible. 7.4. Title to Hotel; Nondisturbance Covenant Definitions. Any lease, concession or other agreement through which Owner derives its right to and interest in the Hotel or any part of it is herein referred to as a "lease". 7.5. Payment of Property Taxes. Owner shall, prior to delinquency, pay out of an escrow account established with first mortgagee, to the extent of it, and otherwise Owner shall directly pay, all real and personal property taxes assessed against the Hotel to the extent that the same are properly allocable to the operating term. For the purposes of this Contract, property taxes payable during an operating year shall be deemed properly allocable to such operating year, providing that such taxes are not to be charged against profits as defined in paragraph 5.2 above. Section 8. Insurance. Owner shall at all times during the term of this Contract procure and maintain with financially responsible insurance companies qualified to do business in the State of _________ such insurance as is customarily carried in respect of motor hotels in the _________ Metropolitan area, insuring both Owner and _________[Manager], with the latter named as a coinsured as its interest may appear. All insurance policies carried by Owner pursuant to the above requirement shall, to the extent obtainable, have attached an endorsement that the same shall not be cancelled or changed without at least 5 days prior written notice to _________[Manager]. Owner shall furnish to _________[Manager] satisfactory evidence of such insurance and the premiums on it. Section 9. Damage To and Destruction Of Hotel. If the Hotel or any portion of it shall be damaged at any time or times during the operating term by fire or any other insured casualty, and if the building has been damaged so that the cost of restoration is not less than 25% of the fair market value of the Hotel (exclusive of land value) immediately prior to such damage, then the Owner shall have no responsibility to repair or rebuild the Hotel under this Section, and if Owner elects not to repair or rebuild the Hotel under this Section the Contract shall be terminated. _________[Manager] shall be notified as to a decision to build or not build within 90 days following loss. Section 10. Condemnation. 10.1. Total Taking. If the whole of the Hotel shall be taken or condemned in any eminent domain, condemnation, compulsory acquisition or like proceeding by any competent authority for any public or quasipublic use or purpose, or if such a portion thereof shall be taken or condemned so as to make it imprudent or unreasonable, in Owner's or _________[Manager's] reasonable opinion, to use the remaining portion as a hotel of the type and class immediately preceding such taking or condemnation, then the operating term shall terminate as of the date of such taking or condemnation, but any award for such taking or condemnation shall be fairly and equitably apportioned between Owner and (to the extent, if any, that _________[Manager] is determined in the condemnation proceeding to be legally entitled to a share of the award) _________[Manager], with priority to recoupment by Owner of its investment in the Hotel. 10.2. Partial Taking. If only a part of the Hotel shall be taken or condemned and the taking or condemnation of such part does not make it unreasonable or imprudent, in Owner's and _________[Manager's] reasonable opinion, to operate the remainder as a hotel of the type and class immediately preceding such taking or condemnation, then this Contract shall not terminate, but there shall be made available so much of the condemnation award as shall be reasonably necessary for making alterations to or modifications of the Hotel or any part of it so as to make it a satisfactory architectural unit and a hotel of the type and class immediately preceding such taking or condemnation. The balance of the award, after the deduction of the sum necessary for such alterations or modifications, shall be fairly and equitably apportioned between Owner and (to the extent, if any, that _________[Manager] is determined in the condemnation proceeding to be legally entitled to a share of the award) _________[Manager], with priority to recoupment by Owner of its investment in the Hotel. Section 11. Right to Perform Covenants and Reimbursements. If either party shall fail, within the time and after due notice as specified in Section 12, to make any payment or to perform any act to be made or performed by such party pursuant to this Contract, then the other party may, without further notice to or demand upon such defaulting party, and without waiving or releasing such defaulting party from any obligations under this Contract, make such payment or perform such act. All sums so paid by such other party and all necessary incidental costs and expenses incurred by such other party in connection with the performance of any such act, together with interest thereon at the First National Bank of _________ prime rate at the time of such expenditure plus 3% per annum (but not to exceed the maximum interest allowed by law) from the date of making such expenditure by such other party shall be payable to such other party upon demand. Any amounts payable under this Contract to _________ may, at the option of _________[Manager], be deducted from any payments then due or becoming due to Owner under this Contract. With the exception of emergency cases, neither party shall have the right to make any payment or to perform any act if there is a bona fide dispute between the parties as to the necessity of it and such dispute has been submitted to arbitration. Section 12. Defaults; Termination Rights. 12.1. Defaults. The following shall constitute events of default: (a) the failure of either party to pay the other any amount which may become due under this Contract for a period of 30 days after such amount is payable; (b) the filing (except as provided below) by either party of a voluntary petition in bankruptcy or insolvency or a petition for reorganization under any bankruptcy law or a petition for the appointment of a receiver for all or any substantial portion of the property of such party; (c) the consent (except as provided below) by either party to an involuntary petition in bankruptcy or the failure to vacate, within 60 days from the date of its entry any order approving such involuntary petition; (d) the entry (except as provided below) of an order, judgment or decree by any court of competent jurisdiction on the application of a creditor, adjudicating either party as a bankrupt or insolvent or approving a petition seeking reorganization or appointing a receiver, trustee or liquidator of all or a substantial part of such party's assets, and such order, judgment decree shall continue unstayed and in effect for any period of 120 consecutive days; (e) the nonoperation of the Hotel by _________[Manager] at any time that the Hotel could reasonably be operated by another hotel operator; (f) the failure by either party to perform, keep or fulfill any of the other covenants, undertakings, obligations or conditions set forth in this Contract and the continuance of any such default for a period of 30 days after notice of such failure. In any of such events of default, the non-defaulting party may give to the defaulting party notice of intention to terminate this Contract after the expiration of a period of 30 days from the date of such notice, and upon the expiration of such period this Contract shall terminate. If, however, upon receipt of such notice, the defaulting party shall promptly and with due diligence cure the default, or take and continue to take action to cure such default with all due diligence, if such default is not susceptible of being cured within such 30 day period, then such notice shall be no force and effect. The rights granted under this Contract shall not be in substitution for, but shall be in addition to, any and all other rights and remedies for breach of contract available to the nondefaulting party under the applicable law. Notwithstanding the foregoing, neither party shall be deemed to be in default under this Contract if a bona fide dispute with respect to any of the foregoing events of default has arisen between the parties and such dispute has been submitted to arbitration. Section 13. Trade Name. During the operating term the Hotel shall at all times be known and designated as _________, _________. Owner represents and warrants to _________[Manager] that Owner has the legal right to use the name, in accord with its licensing agreement with _________, Inc. Likewise _________[Manager] represents and warrants to Owner that _________[Manager] has the legal right to use the name "_________." Accordingly, Owner for any default of _________[Manager] under this Contract, nor the delivery of possession of the Hotel to Owner upon the expiration or sooner termination of the operating term, nor any provision of this Contract shall confer upon Owner, or any transferee, assignee or successor to Owner, or any person, firm or corporation claiming by or through Owner, the right to use the name "_________" either alone or in conjunction with any other word or words in connection with the use or operation of the Hotel or otherwise. In the event of any breach of this covenant by Owner, _________[Manager] shall be entitled to damages, to relief by injunction and to all other available legal rights or remedies, and this provision shall be deemed to survive the expiration or sooner termination of the operating term. Upon expiration of the operating term or termination of this Contract for any reason, Owner shall remove within 90 days after the date of termination, all _________[Manager] trademarks, trade names and other evidence of _________[Manager's] operation, including, but without limitation, signs, printed matter, ashtrays, plates and other expendables, all of which Owner shall have the right to use during such 90-day period to the extent that such use shall not materially impair _________[Manager's] right to such trademarks or trade names. _________[Manager] agrees that _________ name is subject to the terms of the licensing agreement with _________, Inc. Section 14. Arbitration. Except as otherwise provided in this Contract, if any controversy should arise between the parties in the performance, interpretation or application of this Contract, either party may serve upon the other a written notice stating that such party desires to have such controversy reviewed by a board of 3 arbitrators and naming the person whom such party has designated to act as an arbitrator. Within 15 days after receipt of such notice, the other party shall designate a person to act as arbitrator and shall notify the party requesting arbitration of such designation and the name of the person so designated. The 2 arbitrators so designated shall promptly select a third arbitrator, and if they are not able to agree on such third arbitrator within 10 days, then either arbitrator, on 5 days notice in writing to the other, or both arbitrators, shall apply to the American Arbitration Association to designate and appoint such third arbitrator. If the party upon whom a written request for arbitration is served shall fail to designate its arbitrator within 15 days after receipt of such notice, then the arbitrator designated by the party requesting arbitration shall act as the sole arbitrator and shall be deemed to be the single, mutually approved arbitrator to resolve such controversy. The decision and award of a majority of the arbitrators, or of such sole arbitrator, shall be binding upon both Owner and _________[Manager] and shall be enforceable in any court of competent jurisdiction. Such decision and award may allocate the costs of such arbitration to one of the parties or disproportionately between the parties. The arbitration shall be conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association. Section 15. Successors and Assigns. 15.1. Assignments. _________[Manager] may not, without Owner's written approval, assign this Contract. 15.2. Assignment by Owner. Owner shall have the right to sell, hypothecate and convey the Hotel or to assign its interest in this Contract or both without the consent of _________[Manager]; provided, however, that any such assignee shall expressly assume in writing the obligations of Owner under this Contract. The term "Owner" as used in this Contract so far as covenants or obligations on the part of the Owner are concerned shall be limited to mean and include only the owner or owners at the time in question of the Hotel, and in the event of any transfer or transfers of the title to the Hotel, the Owner (and in case of any subsequent transfers or conveyances the then grantor) shall be automatically freed and relieved, from and after the date of such transfer or conveyance, of all personal liability as respects the performance of any covenants or obligations on the part of the Owner contained in this Contract, provided that any funds in the hands of such Owner or the then grantor at the time of such transfer, in which _________[Manager] has an interest, shall be turned over to the grantee and any amount, then due and payable to _________[Manager] by the Owner or the then grantor under any provisions of this Contract shall be paid to _________[Manager], it being intended that, except as above provided to the contrary, the covenants and obligations contained in this Contract on the part of the Owner shall be binding on Owner, its successors and assigns only during and in respect of their respective successive periods of ownership. 15.3. Purchase of Real Estate and Business. If a bona fide offer to purchase the real estate and operating business is presented to Owner along with 10% earnest money, _________[Manager] shall have the first right of refusal to purchase real estate and operating business for a 30-day period following receipt of a written notice and true copy of the offer and earnest money, subject to same terms and conditions. If the real estate and operating business are sold for more than $2,500,000 net, _________[Manager] will receive 2% of the overage. 15.4. Binding on Successors. The terms, provisions, covenants, undertakings, agreements, obligations and conditions of this Contract shall be binding upon and shall inure to the benefit of the successors in interest and the assigns of the parties with the same effect as if mentioned in each instance where the party is named or referred to, except that no assignment, transfer, pledge, mortgage or sublease by or through _________[Manager] or any sublessee or by or through Owner, as the case may be, in violation of the provisions of this Contract shall vest any rights in the assignee, transferee, mortgagee, pledgee, sublessee or occupant. Section 16. Termination by Owner and/or Manager for Inadequate Profit. Owner and/or _________[Manager] will have the right to terminate this agreement, with 90-days notice, if during any total fiscal year, food and beverage department profit (before unallocated expenses) has not exceeded $41,000. Section 17. Notices. All notices to be given under this Contract shall be in writing and shall be deposited in the U.S. Mails, with postage prepaid, registered or certified, and if intended for Owner addressed to: _________ _________ _________ and if intended for _________ addressed to: _________ _________ _________ Any of the foregoing parties may change the address for receipt of notices under this Contract by such party giving notice of such change to each of the other foregoing parties in the manner provided above. Section 18. Approvals. Whenever any party is requested under this Contract to give its approval to a matter, such approval shall not be unreasonably withheld. If a party shall desire the approval of another party to any matter, such party may give notice to such other party that it requests such approval, specifying in such notice the matter as to which such approval is requested and reasonable detail respecting such matter. If such other party shall not respond negatively to such notice within 10 days after receipt (unless some other period for response is specified in this Contract), such other party shall be deemed to have approved the matter referred to in such notice. Section 19. No Partnership or Joint Venture. Nothing contained in this Contract shall constitute or be construed to create a partnership or joint venture between Owner or its successors or assigns and _________[Manager] or its successors and assigns. Section 20. Further Instruments. Upon notice from _________[Manager], Owner shall execute (in recordable form) and deliver to _________[Manager] an appropriate instrument which, when recorded, will impart constructive notice to third parties of the rights of _________[Manager] under this Contract. Owner shall further execute and deliver all other appropriate supplemental agreements and other instruments and take any other action necessary to make this Contract fully and legally effective, binding and enforceable as between the parties and as against third parties. Section 21. Applicable Law. This Contract shall be governed in all respects by the laws of the State of _________. In witness of which, Owner and _________[Manager] have executed this Management Contract as of the day and year first above written. _________, a _________ Limited Partnership By: _________, General Partner By: _________, General Partner
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