Common use of Performance Test Clause in Contracts

Performance Test. Lessee shall have the right to terminate this Agreement with respect to any Hotel (for the purposes of this Section 2.03(b)(i) called “Subject Hotel”), subject to the payment of a termination fee as set forth in subsection (ii) below, in the event of the occurrence of the following (collectively herein called, the “Performance Test”): (1) If for any Fiscal Year (a) a Subject Hotel’s Gross Operating Profit Margin for such Fiscal Year is less than seventy-five percent (75%) of the average Gross Operating Profit Margin of comparable hotels in similar markets and geographic locations to the applicable Hotel as reasonably determined by Lessee and Manager, and (b) such Subject Hotel’s REVPAR Yield Penetration is less than the Targeted REVPAR Yield Penetration for such Fiscal Year (herein (a) and (b) collectively called “Performance Failure”); then (2) Manager shall have a period of two (2) years, commencing with the next ensuing Fiscal Year (the “Performance Cure Period”), to cure the Performance Failure after Manager’s receipt of Notice from Lessee of such Performance Failure and Lessee’s intent to terminate this Agreement with respect to the Subject Hotel if the Performance Failure is not cured within such Performance Cure Period; and (3) If after the first full Fiscal Year during the Performance Cure Period, the Performance Failure remains uncured, then upon written Notice to Manager by Lessee, Manager shall engage a consultant reasonably acceptable to Manager and Lessee (with significant experience in the hotel lodging industry) to make a written determination (within forty-five (45) days of such Notice) as to whether another management company (with comparable breadth of knowledge and experience as any of the hotel management companies owned and/or controlled by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. and/or ▇▇▇▇▇ ▇▇▇▇▇▇▇, including with respect to number and type of hotels managed in similar markets and geographical areas) could manage the Subject Hotel in a materially more efficient manner. If such consultant determination is in the negative, then Manager will be deemed not to be in default under the Performance Test. If such consultant determination is in the affirmative, then Manager agrees to engage such consultant (such cost and expense to be shared by Lessee and Manager equally) to assist Manager during the second Fiscal Year of the Performance Cure Period with the cure of the Performance Failure; and (4) If after the end of the Performance Cure Period, the Performance Failure remains uncured and the consultant again makes a written determination that another management company (with comparable breadth of knowledge and experience as any of the hotel management companies owned and/or controlled by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. and/or ▇▇▇▇▇ ▇▇▇▇▇▇▇, including with respect to number and type of hotels managed in similar markets and geographical areas) could manage the Subject Hotel in a materially more efficient manner, then Lessee may, at its election, terminate this Agreement upon forty-five (45) days’ prior Notice to Manager.

Performance Test. Lessee shall have the right to terminate this Agreement with respect to any Initial Hotel after the initial 10-year term of this Agreement applicable to such Initial Hotel and any Future Hotel (for the purposes of this Section 2.03(b)(i2.3(b)(i) called “Subject Hotel”), subject to the payment of a termination fee as set forth in subsection (ii) below, in the event of the occurrence of the following (collectively herein called, the “Performance Test”): (1) If If, commencing with the first Fiscal Year after the initial 10-year term for an Initial Hotel and commencing with the first full Fiscal Year following the Commencement Date for any Future Hotel, and for each Fiscal Year thereafter (a) a Subject Hotel’s Gross Operating Profit Margin for such Fiscal Year is less than seventy-five percent (75%) of the average Gross Operating Profit Margin of comparable hotels in similar markets and geographic locations to the applicable subject Hotel as reasonably determined by Lessee and Manager, and (b) such Subject Hotel’s REVPAR Revpar Yield Penetration is less than the Targeted REVPAR Yield Penetration 80% for such Fiscal Year (herein (a) and (b) collectively called “Performance Failure”); then (2) Manager shall have a period of two (2) years, commencing with the next ensuing Fiscal Year (the “Performance Cure Period”), to cure the Performance Failure after Manager’s receipt of Notice from Lessee of such Performance Failure and Lessee’s intent to terminate this Agreement with respect to the Subject Hotel if the Performance Failure is not cured within such Performance Cure Period; and (3) If after the first full Fiscal Year during the Performance Cure Period, the Performance Failure remains uncured, then upon written Notice to Manager by Lessee, Manager shall engage a consultant reasonably acceptable to Manager and Lessee (with significant experience in the hotel lodging industry) to make a written determination (within forty-five (45) days of such Notice) as to whether another management company (with comparable breadth of knowledge and experience as any of the hotel management companies owned and/or controlled by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. and/or ▇▇▇▇▇ ▇▇▇▇▇▇▇, including with respect to number and type of hotels managed in similar markets and geographical areas) could manage the Subject Hotel in a materially more efficient manner. If such consultant determination is in the negative, then Manager will be deemed not to be in default under the Performance Test. If such consultant determination is in the affirmative, then Manager agrees to engage such consultant (such cost and expense to be shared by Lessee and Manager equally) to assist Manager during the second Fiscal Year of the Performance Cure Period with the cure of the Performance Failure; and (4) If after the end of the Performance Cure Period, the Performance Failure remains uncured and the consultant again makes a written determination that another management company (with comparable breadth of knowledge and experience as any of the hotel management companies owned and/or controlled by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. and/or ▇▇▇▇▇ ▇▇▇▇▇▇▇, including with respect to number and type of hotels managed in similar markets and geographical areas) could manage the Subject Hotel in a materially more efficient manneruncured, then Lessee may, at its election, terminate this Agreement upon forty-five (45) days’ prior Notice to Manager.

Performance Test. Lessee shall have the right to terminate this Agreement with respect to any Hotel (for after the purposes base 10 year term of this Section 2.03(b)(i) called “Subject Agreement applicable to such Hotel”), subject to the payment of a termination fee as set forth in subsection (ii) below, in the event of the occurrence of the following with respect to the Hotel (collectively herein called, the “Performance Test”): (1) If for any Fiscal Year (a) a Subject the Hotel’s Gross Operating Profit Margin for such Fiscal Year is less than seventy-five percent (75%) of the average Gross Operating Profit Margin of comparable hotels in similar markets and geographic locations to the applicable Hotel as reasonably determined by Lessee ▇▇▇▇▇▇ and Manager, and (b) such Subject Hotel’s REVPAR Yield Penetration is less than the Targeted REVPAR Yield Penetration for such Fiscal Year (herein (a) and (b) collectively called “Performance Failure”); then (2) Manager shall have a period of two (2) years, commencing with the next ensuing Fiscal Year (the “Performance Cure Period”), to cure the Performance Failure after Manager’s receipt of Notice from Lessee of such Performance Failure and Lessee’s intent to terminate this Agreement with respect to the Subject Hotel if the Performance Failure is not cured within such Performance Cure Period; and (3) If after the first full Fiscal Year during the Performance Cure Period, the Performance Failure remains uncured, then upon written Notice to Manager by Lessee▇▇▇▇▇▇, Manager shall engage a consultant reasonably acceptable to Manager and Lessee (with significant experience in the hotel lodging industry) to make a written determination (within forty-five (45) days of such Notice) as to whether another management company (with comparable breadth of knowledge and experience as any of the hotel management companies owned and/or controlled by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. and/or ▇▇▇▇▇ ▇▇▇▇▇▇▇Manager, including with respect to number and type of hotels managed in similar markets and geographical areas) could manage the Subject Hotel in a materially more efficient manner. If such consultant determination is in the negative, then Manager will be deemed not to be in default under the Performance Test. If such consultant determination is in the affirmative, then Manager agrees to engage such consultant (such cost and expense to be shared by Lessee ▇▇▇▇▇▇ and Manager equally) to assist Manager during the second Fiscal Year of the Performance Cure Period with the cure of the Performance Failure; and (4) If after the end of the Performance Cure Period, the Performance Failure remains uncured and the consultant again makes a written determination that another management company (with comparable breadth of knowledge and experience as any of the hotel management companies owned and/or controlled by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. and/or ▇▇▇▇▇ ▇▇▇▇▇▇▇Manager, including with respect to number and type of hotels managed in similar markets and geographical areas) could manage the Subject Hotel in a materially more efficient manner, then Lessee may, at its election, terminate this Agreement upon forty-five (45) days’ prior Notice to Manager.

Performance Test. Lessee shall have the right to terminate this Agreement with respect to any Hotel after the base 10 year term of this Agreement applicable to such Hotel (for the purposes of this Section 2.03(b)(i) called “Subject Hotel”), subject to the payment of a termination fee as set forth in subsection (ii) below, in the event of the occurrence of the following (collectively herein called, the “Performance Test”): (1) If for any Fiscal Year (a) a Subject Hotel’s Gross Operating Profit Margin for such Fiscal Year is less than seventy-five percent (75%) of the average Gross Operating Profit Margin of comparable hotels in similar markets and geographic locations to the applicable Hotel as reasonably determined by Lessee and Manager, and (b) such Subject Hotel’s REVPAR Yield Penetration is less than the Targeted REVPAR Yield Penetration for such Fiscal Year (herein (a) and (b) collectively called “Performance Failure”); then (2) Manager shall have a period of two (2) years, commencing with the next ensuing Fiscal Year (the “Performance Cure Period”), to cure the Performance Failure after Manager’s receipt of Notice from Lessee of such Performance Failure and Lessee’s intent to terminate this Agreement with respect to the Subject Hotel if the Performance Failure is not cured within such Performance Cure Period; and (3) If after the first full Fiscal Year during the Performance Cure Period, the Performance Failure remains uncured, then upon written Notice to Manager by Lessee, Manager shall engage a consultant reasonably acceptable to Manager and Lessee (with significant experience in the hotel lodging industry) to make a written determination (within forty-five (45) days of such Notice) as to whether another management company (with comparable breadth of knowledge and experience as any of the hotel management companies owned and/or controlled by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. and/or ▇▇▇▇▇ ▇▇▇▇▇▇▇, including with respect to number and type of hotels managed in similar markets and geographical areas) could manage the Subject Hotel in a materially more efficient manner. If such consultant determination is in the negative, then Manager will be deemed not to be in default under the Performance Test. If such consultant determination is in the affirmative, then Manager agrees to engage such consultant (such cost and expense to be shared by Lessee and Manager equally) to assist Manager during the second Fiscal Year of the Performance Cure Period with the cure of the Performance Failure; and (4) If after the end of the Performance Cure Period, the Performance Failure remains uncured and the consultant again makes a written determination that another management company (with comparable breadth of knowledge and experience as any of the hotel management companies owned and/or controlled by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. and/or ▇▇▇▇▇ ▇▇▇▇▇▇▇, including with respect to number and type of hotels managed in similar markets and geographical areas) could manage the Subject Hotel in a materially more efficient manner, then Lessee may, at its election, terminate this Agreement upon forty-five (45) days’ prior Notice to Manager.

Performance Test. Lessee shall have the right to terminate this Agreement with respect to any Hotel after the base 10-year term of this Agreement applicable to such Hotel (for the purposes of this Section 2.03(b)(i) called “Subject Hotel”), subject to the payment of a termination fee as set forth in subsection (ii) below, in the event of the occurrence of the following (collectively herein called, the “Performance Test”): (1) If for any If, commencing with Fiscal Year 2007, and for each Fiscal Year thereafter (a) a Subject Hotel’s Gross Operating Profit Margin for such Fiscal Year is less than seventy-five percent (75%) of the average Gross Operating Profit Margin of comparable hotels in similar markets and geographic locations to the applicable Hotel as reasonably determined by Lessee and Manager, and (b) such Subject Hotel’s REVPAR Yield Penetration is less than the Targeted REVPAR Yield Penetration for such Fiscal Year (herein (a) and (b) collectively called “Performance Failure”); then (2) Manager shall have a period of two (2) years, commencing with the next ensuing Fiscal Year (the “Performance Cure Period”), to cure the Performance Failure after Manager’s receipt of Notice from Lessee of such Performance Failure and Lessee’s intent to terminate this Agreement with respect to the Subject Hotel if the Performance Failure is not cured within such Performance Cure Period; and (3) If after the first full Fiscal Year during the Performance Cure Period, the Performance Failure remains uncured, then upon written Notice to Manager by Lessee, Manager shall engage a consultant reasonably acceptable to Manager and Lessee (with significant experience in the hotel lodging industry) to make a written determination (within forty-five (45) days of such Notice) as to whether another management company (with comparable breadth of knowledge and experience as any of the hotel management companies owned and/or controlled by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. and/or ▇▇▇▇▇ ▇▇▇▇▇▇▇, including with respect to number and type of hotels managed in similar markets and geographical areas) could Hotel Master Management Agreement Ashford TRS Corporation File No. 145765 manage the Subject Hotel in a materially more efficient manner. If such consultant determination is in the negative, then Manager will be deemed not to be in default under the Performance Test. If such consultant determination is in the affirmative, then Manager agrees to engage such consultant (such cost and expense to be shared by Lessee and Manager equally) to assist Manager during the second Fiscal Year of the Performance Cure Period with the cure of the Performance Failure; and (4) If after the end of the Performance Cure Period, the Performance Failure remains uncured and the consultant again makes a written determination that another management company (with comparable breadth of knowledge and experience as any of the hotel management companies owned and/or controlled by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. and/or ▇▇▇▇▇ ▇▇▇▇▇▇▇, including with respect to number and type of hotels managed in similar markets and geographical areas) could manage the Subject Hotel in a materially more efficient manner, then Lessee may, at its election, terminate this Agreement upon forty-five (45) days’ prior Notice to Manager.

Performance Test. Lessee shall have the right to terminate this Agreement with respect to any Hotel after the base 10-year term of this Agreement applicable to such Hotel (for the purposes of this Section 2.03(b)(i) called “Subject Hotel”), subject to the payment of a termination fee as set forth in subsection (ii) below, in the event of the occurrence of the following (collectively herein called, the “Performance Test”): (1) If for any If, commencing with Fiscal Year 2007, and for each Fiscal Year thereafter (a) a Subject Hotel’s Gross Operating Profit Margin for such Fiscal Year is less than seventy-five percent (75%) of the average Gross Operating Profit Margin of comparable hotels in similar markets and geographic locations to the applicable Hotel as reasonably determined by Lessee and Manager, and (b) such Subject Hotel’s REVPAR Yield Penetration is less than the Targeted REVPAR Yield Penetration for such Fiscal Year (herein (a) and (b) collectively called “Performance Failure”); then (2) Manager shall have a period of two (2) years, commencing with the next ensuing Fiscal Year (the “Performance Cure Period”), to cure the Performance Failure after Manager’s receipt of Notice from Lessee of such Performance Failure and Lessee’s intent to terminate this Agreement with respect to the Subject Hotel if the Performance Failure is not cured within such Performance Cure Period; and (3) If after the first full Fiscal Year during the Performance Cure Period, the Performance Failure remains uncured, then upon written Notice to Manager by Lessee, Manager shall engage a consultant reasonably acceptable to Manager and Lessee (with significant experience in the hotel lodging industry) to make a written determination (within forty-five (45) days of such Notice) as to whether another management company (with comparable breadth of knowledge and experience as any of the hotel management companies owned and/or controlled by ▇A▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. and/or ▇M▇▇▇▇ ▇▇▇▇▇▇▇, including with respect to number and type of hotels managed in similar markets and geographical areas) could Hotel Master Management Agreement Ashford TRS Corporation File No. 145765 manage the Subject Hotel in a materially more efficient manner. If such consultant determination is in the negative, then Manager will be deemed not to be in default under the Performance Test. If such consultant determination is in the affirmative, then Manager agrees to engage such consultant (such cost and expense to be shared by Lessee and Manager equally) to assist Manager during the second Fiscal Year of the Performance Cure Period with the cure of the Performance Failure; and (4) If after the end of the Performance Cure Period, the Performance Failure remains uncured and the consultant again makes a written determination that another management company (with comparable breadth of knowledge and experience as any of the hotel management companies owned and/or controlled by ▇A▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. and/or ▇M▇▇▇▇ ▇▇▇▇▇▇▇, including with respect to number and type of hotels managed in similar markets and geographical areas) could manage the Subject Hotel in a materially more efficient manner, then Lessee may, at its election, terminate this Agreement upon forty-five (45) days’ prior Notice to Manager.

Performance Test. Lessee shall have the right to terminate this Agreement with respect to any a Hotel (for after the purposes base 10 year term of this Section 2.03(b)(i) called “Subject Agreement applicable to such Hotel”), subject to the payment of a termination fee as set forth in subsection (ii) below, in the event of the occurrence of the following with respect to the Hotel (collectively herein called, the “Performance Test”): (1) If for any Fiscal Year (a) a Subject the Hotel’s Gross Operating Profit Margin for such Fiscal Year is less than seventy-five percent (75%) of the average Gross Operating Profit Margin of comparable hotels in similar markets and geographic locations to the applicable Hotel as reasonably determined by Lessee L▇▇▇▇▇ and Manager, and (b) such Subject Hotel’s REVPAR Yield Penetration is less than the Targeted REVPAR Yield Penetration for such Fiscal Year (herein (a) and (b) collectively called “Performance Failure”); then (2) Manager shall have a period of two (2) years, commencing with the next ensuing Fiscal Year (the “Performance Cure Period”), to cure the Performance Failure after Manager’s receipt of Notice from Lessee of such Performance Failure and Lessee’s intent to terminate this Agreement with respect to the Subject Hotel if the Performance Failure is not cured within such Performance Cure Period; and (3) If after the first full Fiscal Year during the Performance Cure Period, the Performance Failure remains uncured, then upon written Notice to Manager by Lessee, Manager shall engage a consultant reasonably acceptable to Manager and Lessee (with significant experience in the hotel lodging industry) to make a written determination (within forty-five (45) days of such Notice) as to whether another management company (with comparable breadth of knowledge and experience as any of the hotel management companies owned and/or controlled by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. and/or ▇▇▇▇▇ ▇▇▇▇▇▇▇Manager, including with respect to number and type of hotels managed in similar markets and geographical areas) could manage the Subject Hotel in a materially more efficient manner. If such consultant determination is in the negative, then Manager will be deemed not to be in default under the Performance Test. If such consultant determination is in the affirmative, then Manager agrees to engage such consultant (such cost and expense to be shared by Lessee L▇▇▇▇▇ and Manager equally) to assist Manager during the second Fiscal Year of the Performance Cure Period with the cure of the Performance Failure; and (4) If after the end of the Performance Cure Period, the Performance Failure remains uncured and the consultant again makes a written determination that another management company (with comparable breadth of knowledge and experience as any of the hotel management companies owned and/or controlled by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. and/or ▇▇▇▇▇ ▇▇▇▇▇▇▇Manager, including with respect to number and type of hotels managed in similar markets and geographical areas) could manage the Subject Hotel in a materially more efficient manner, then Lessee may, at its election, terminate this Agreement upon forty-five (45) days’ prior Notice to Manager.

Performance Test. Lessee shall have the right to terminate this Agreement with respect to any Initial Hotel after the base 10-year term of this Agreement applicable to such Initial Hotel and any Future Hotel (for the purposes of this Section SECTION 2.03(b)(i) called “Subject Hotel”"SUBJECT HOTEL"), subject to the payment of a termination fee as set forth in subsection (ii) below, in the event of the occurrence of the following (collectively herein called, the “Performance Test”"PERFORMANCE TEST"): (1) If for any If, commencing with Fiscal Year 2004, and for each Fiscal Year thereafter (a) a Subject Hotel’s 's Gross Operating Profit Margin for such Fiscal Year is less than seventy-five percent (75%) of the average Gross Operating Profit Margin of comparable hotels in similar markets and geographic locations to the applicable Hotel as reasonably determined by Lessee and Manager, and (b) such Subject Hotel’s 's REVPAR Yield Penetration is less than the Targeted REVPAR Yield Penetration for such Fiscal Year (herein (a) and (b) collectively called “Performance Failure”"PERFORMANCE FAILURE"); then (2) Manager shall have a period of two (2) years, commencing with the next ensuing Fiscal Year (the “Performance Cure Period”"PERFORMANCE CURE PERIOD"), to cure the Performance Failure after Manager’s 's receipt of Notice from Lessee of such Performance Failure and Lessee’s 's intent to terminate this Agreement with respect to the Subject Hotel if the Performance Failure is not cured within such Performance Cure Period; andand Hotel Master Management Agreement Ashford TRS Corporation (3) If after the first full Fiscal Year during the Performance Cure Period, the Performance Failure remains uncured, then upon written Notice to Manager by Lessee, Manager shall engage a consultant reasonably acceptable to Manager and Lessee (with significant experience in the hotel lodging industry) to make a written determination (within forty-five (45) days of such Notice) as to whether another management company (with comparable breadth of knowledge and experience as any of the hotel management companies owned and/or controlled by Archie Bennett, Jr. and/or Monty Bennett, including ▇▇▇▇ ▇▇▇pect to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. and/or ▇▇▇▇▇ ▇▇▇▇▇▇▇, including with respect to number and type pe of hotels managed in similar markets and geographical areas) could manage the Subject Hotel in a materially more efficient manner. If such consultant determination is in the negative, then Manager will be deemed not to be in default under the Performance Test. If such consultant determination is in the affirmative, then Manager agrees to engage such consultant (such cost and expense to be shared by Lessee and Manager equally) to assist Manager during the second Fiscal Year of the Performance Cure Period with the cure of the Performance Failure; and (4) If after the end of the Performance Cure Period, the Performance Failure remains uncured and the consultant again makes a written determination that another management company (with comparable breadth of knowledge and experience as any of the hotel management companies owned and/or controlled by Archie Bennett, Jr. and/or Monty Bennett, including ▇▇▇▇ ▇▇▇pect to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. and/or ▇▇▇▇▇ ▇▇▇▇▇▇▇, including with respect to number and type pe of hotels managed in similar markets and geographical areas) could manage the Subject Hotel in a materially more efficient manner, then Lessee may, at its election, terminate this Agreement upon forty-five (45) days’ ' prior Notice to Manager.