Location: HOTELADDRESS1
HOTELADDRESS2
ID Number: IDNUMBER
Hotel Name: PROPERTYNAME
Date: , 1998
--------------
BRAND
between
BEST FRANCHISING, INC.
and
ENTITYNAMECAPS
1
TABLE OF CONTENTS
Page
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1. The License 1
A. The Hotel 1
B. The Hotel System 1
2. Grant of License 1
3. Your Responsibilities 2
A. Operational and Other Requirements 2
B. Performance of the Work 2
C. Upgrading of the Hotel 2
D. Fees 3
4. Our Responsibilities 4
A. Training 4
B. Services 4
C. Consultation on Operations, Facilities and Marketing 4
D. Use of Marketing/Reservation Contributions 4
E. Application of Manual 4
F. Other Arrangements 4
G. Inspections/Compliance Assistance 5
5. Proprietary Rights 5
A. Ownership of the Hotel System and Proprietary Marks 5
B. Trademark Disputes 5
C. Protection of Name and Marks 5
6. Records and Audits 5
A. Monthly Reports 5
B. Preparation and Maintenance of Records 6
C. Audit 6
D. Annual Financial Statements 6
7. Indemnity and Insurance 6
A. Indemnity 6
B. Insurance 7
8. Transfer 7
A. Transfer by Us 7
B. Transfer by You 8
C. Transfers of the License or Equity Interest in You Upon
Death 9
D. Registration of a Proposed Transfer of Equity Interests 9
E. Non-Waiver of Claims 9
F. Our Right of First Refusal 9
G. No Right of First Refusal 10
9. Condemnation and Casualty 10
A. Condemnation 10
B. Casualty 10
C. Extensions of Term 10
2
10. Termination 10
A. Expiration of Term 10
B. Defaults 10
C. De-identification of Hotel Upon Termination or
Expiration of this Agreement 12
D. Payment of Liquidated Damages 13
11. Renewal 13
A. Requirements. 13
B. Alternative Process 14
12. Relationship of Parties 14
A. No Agency Relationship 14
B. Your Notices to Public Concerning Independent Status 14
C. Use of the Best Name 14
13. Miscellaneous 14
A. Severability and Interpretation 14
B. Binding Effect 14
C. Exclusive Benefit 15
D. Entire Agreement 15
E. Our Withholding of Consent 15
F. Notices 15
G. Descriptive Headings 15
H. Management of the Hotel 15
I. Guest Room Rates 15
GUARANTY
ATTACHMENT A
ATTACHMENT B
ATTACHMENT C
3
LICENSE AGREEMENT
This license agreement ("Agreement" or "License Agreement"),
dated ____________, 199__, is entered into by and between Best
Franchising, Inc., a Georgia corporation having an address at ▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("we", "our", "us"
or "Licensor"), and ENTITYNAMECAPS, a ENTITYTYPE, having an address at
ENTITYADDRESS ("you", "your" or "Licensee"). In consideration of the
following mutual promises, the parties agree as follows:
1. The License.
We have the exclusive right to license a unique concept and system (the
"Hotel System") to establish and operate "mid-level economy" hotels
under the names "Best Inns of America," "Best Suites of America" and
certain brand extensions thereof (collectively, "Hotels" or "Best
Hotels"). Before signing this Agreement, you read our Offering Circular
for Prospective Franchisees ("UFOC") and independently evaluated and
investigated the risks of investing in the hotel industry generally and
purchasing a Best franchise specifically, including such factors as
current and potential market conditions, owning a franchise and various
competitive factors. Following your investigation, you wish to enter
into this Agreement to obtain a license to use the Hotel System to
operate a BRAND hotel located at HOTELADDRESS1, HOTELADDRESS2, (the
"Hotel").
A. The Hotel. The Hotel includes all structures, facilities,
appurtenances, furniture, fixtures, equipment, entry, exit and parking
areas located on the real property identified on Attachment A hereto or
any other real property we approve for Hotel expansion, signage or
other facilities. You agree not to make any material changes to the
Hotel without our prior written consent, including, but not limited to,
any change in the number of rooms or suites at the Hotel ("Guest
Rooms").
B. The Hotel System. We have designed the Hotel System so that
the public associates the Hotels with high quality standards. The Hotel
System includes, without limitation: (i) the tradenames, trademarks,
and service marks "Best Inns of America" and "Best Suites of America"
and such other tradenames, trademarks, and service marks we hereafter
designate for use with the Hotel System (collectively, the "Proprietary
Marks"); (ii) prototypical architectural plans, designs and layouts,
including, without limitation, site, floor, roof, plumbing, lobby,
electrical and landscape plans; (iii) a national toll free number
system for central reservation referrals, as renovated by us from time
to time (collectively, the "CRS"); (iv) the national Best directory
(the "National Directory"); (v) management, personnel and operational
training programs, materials and procedures; (vi) standards and
specifications for operations, marketing, construction, equipment and
furnishings described in our confidential manuals, as amended by us
from time to time (collectively, the "Manual"); and (vii) marketing,
advertising and promotional programs.
2. Grant of License.
We hereby grant to you a license (this "License") to use the Hotel
System to build and operate the Hotel in accordance with the terms of
and commencing on the date of this Agreement and terminating as
provided in Paragraph 10 (the "License Term"). During the License Term,
neither we nor any of our affiliates or franchisees will develop or
license any Best Hotels within the area described in Attachment B (the
"Territory"). This Agreement does not limit our right, or the rights of
our parent, subsidiaries or affiliates, (i) to use or license others to
use any part of the Hotel System outside the Territory; (ii) to conduct
other business activities under, or license others to use, hospitality
brands that are not part of the Proprietary Marks, whether outside or
within the Territory, even if the other brands or business activities
compete with the Hotel and/or the Hotel System; or (iii) to use or
license others to use the Hotel System within the Territory to replace
any previously executed Best Hotel license agreement.
3. Your Responsibilities.
A. Operational and Other Requirements. During the License
Term, you agree to:
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1. maintain the Hotel in first class condition
and in a clean, safe and orderly manner;
2. provide efficient, courteous, and
high-quality service to the public while
maintaining a high moral and ethical
standard and atmosphere at the Hotel;
3. operate the Hotel twenty-four (24) hours a
day, every day;
4. strictly comply in all respects with our
requirements concerning:
a) the Hotel System, the Manual and
all other policies and procedures
we communicate to you;
b) our quality standards and the types
of services, products and amenities
you may use, promote or offer at
the Hotel;
c) your use of the Proprietary Marks
and display, style and type of
signage;
d) directory and reservation service
listings of the Hotel; and
e) your participation in all of our
marketing, reservation service,
advertising, Internet, computer,
training and operating programs,
including a property management
system that interfaces with the CRS
or any other central reservation
system we adopt;
5. execute our then-current software license
agreement to participate in, connect with
and use the CRS;
6. except as provided in Paragraph 4E, adopt
all changes we make to the Hotel System;
7. strictly comply with all governmental
requirements, including: (i) the payment of
taxes; (ii) the filing and maintenance of
trade or fictitious name registrations; and
(iii) the filing and maintenance of all
licenses and permits to operate the Hotel;
8. permit our representatives to inspect the
Hotel at any time and provide them free
lodging during the inspection period;
9. not use the Hotel or the Hotel System to
promote a competing business or other
lodging facility;
10. use your best efforts to create a favorable
response to the names "Best Inns of
America," "Best Suites of America" and the
names of any brand extensions we develop;
11. promptly pay to us and/or our parent,
subsidiaries and affiliates when due all
royalties and fees owed under this
Agreement;
12. treat the Manual and any other information
or materials we designate, as confidential
("Confidential Materials") and not
duplicate, circulate or distribute any
Confidential Materials to any unauthorized
person without our prior written consent;
13. obtain from each employee who will have
access to any Confidential Materials their
written agreement to keep the Confidential
Materials confidential; and
14. conduct your advertising in a dignified
manner. At our request, you agree to submit
to us all advertising and promotional
materials and immediately discontinue your
use of any materials we reasonably reject.
B. Performance of the Work. As a primary inducement for us to
enter into this Agreement, you agree to perform the work listed on
Attachment C (the "Work") in strict accordance with our specifications.
C. Upgrading of the Hotel. If at any time the Hotel falls
below the quality standards set forth in the Manual, we may require you
to upgrade or renovate the Hotel to reach acceptable standards. Your
failure to upgrade or renovate the Hotel promptly after we notify you
to do so may result in our issuing a quality default notice which could
lead to our terminating this Agreement.
D. Fees.
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1. For each month (or part of a month) during
the License Term, beginning with the date
the Hotel opens for business (the "Opening
Date"), you shall pay to us by the tenth
(10th) day of the following month:
a) a "Royalty Fee" equal to the
following percentages of Gross Room
Revenues (as defined in Paragraph
3D(2)) of the Hotel: (i) three
percent (3%) during the first
twelve (12) month period following
the Opening Date ("Year 1"); (ii)
four percent (4%) during the twelve
(12) month period following Year 1
("Year 2"); and (iii) five percent
(5%) for each month after Year 2
until the expiration or sooner
termination of this Agreement.
b) a "Marketing/Reservation
Contribution" ("Contribution")
equal to two and one-half percent
(2.5%) of Gross Room Revenues of
the Hotel from the Opening Date
until the expiration or sooner
termination of this Agreement.
Beginning in Year 3, we may, at any
time, increase your Contribution
only if: (i) we simultaneously
increase the Contributions of all
other licensees whose agreements
contain fee provisions similar to
this Paragraph 3D; and (ii) at
least sixty-six percent (66%) of
the open Best Hotels (one vote per
open Hotel) agree to such an
increase; and
c) any sales, gross receipts, or
similar tax imposed on us and
calculated solely on any payment
required under this Agreement,
unless the tax is an optional
alternative to an income tax
otherwise payable by us.
2. "Gross Room Revenues" shall mean gross
receipts attributable to or payable for the
rental of Guest Rooms, including, without
limitation, the net proceeds of use and
occupancy and business interruption, rent
loss, or similar insurance held by you with
respect to the Hotel. However, insurance
proceeds are included in Gross Room Revenues
only if you actually receive them. Gross
Room Revenues do not include gratuities to
employees or service charges levied in lieu
of such gratuities which are payable to
employees, or any taxes or fees collected by
you for transmittal to any taxing
authorities.
3. If we require, you agree to make your
monthly payments to a designated bank
account by telegraphic transfer, automatic
debit arrangement, or other means we
specify. We will pay for the cost of
connection to such telegraphic or automatic
debit service. If an automatic debit or
similar arrangement is utilized and funds
are insufficient to cover your payment
obligation, any amounts unpaid on or before
the due date shall be deemed overdue. If any
payment is overdue, in addition to the
overdue amount, you shall pay us interest on
the overdue amount from the due date until
paid in full at the lesser rate of one and
one-half percent (1.5%) per month or the
maximum rate permitted by law. Our ability
to charge interest on all overdue amounts
shall be in addition to any other remedies
we may have as a result of your failure to
make payments when due.
4. You agree to pay us a $2,500.00 fee each
time you apply to us to add any Guest Rooms
to the Hotel.
5. Subject to our requirements and at your own
expense, you may conduct local and regional
marketing and advertising programs. You
shall pay us reasonable fees for optional
advertising materials you order from us for
these programs.
6. You will participate in any global
distribution system connected to the CRS and
pay applicable commissions to travel agents.
You agree to pay: (i) all commissions and
fees for reservations you accept through any
sources (including the Internet), whether
processed through us, the CRS, third party
reservation systems, or billed directly to
you; and (ii) CRS related telephone and
equipment charges.
4. Our Responsibilities.
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A. Training. We provide initial training prior to the Opening
Date. During the License Term, we will provide both required and
optional training programs. We are responsible for the cost of
instruction and you are responsible for all travel, lodging and other
training expenses, including reasonable charges for training materials.
If any training is held at your Hotel, you agree to provide our
representatives with free lodging.
B. Services. Provided you are in full compliance with your
obligations under this Agreement, you shall have access to the CRS,
listings in advertising publications and the National Directory.
C. Consultation on Operations, Facilities and Marketing. On an
ongoing basis, you may consult with us in connection with Hotel
operations, including suppliers for fixtures, furnishings, signs and
other equipment.
D. Use of Marketing/Reservation Contributions. We will use the
Contributions to pay for: (i) advertising, promotion, publicity, market
research and other marketing programs; (ii) maintaining and producing
the National Directory, our Internet site, and the CRS; and (iii) our
overhead relating directly to national and local marketing and
reservations. Our overhead is limited to costs associated with the
financial management of the Contributions and the salaries and benefits
of certain individuals who work for our reservation or marketing
departments. We will neither profit financially from nor use the
Contributions to directly market our sale of franchises. We are not
obligated to spend funds for marketing or reservation services
exceeding the Contributions received from licensees using the Hotel
System. If we have a surplus of Contributions at the end of any taxable
year, all expenditures in the following taxable year(s) shall be made
first out of earnings accumulated from previous years, next out of
current year earnings, and finally from current year Contributions.
Upon your written request, we will provide you with an annual statement
regarding Contributions.
E. Application of Manual. All Best Hotels must comply with the
terms of the Manual, although we may permit limited exceptions based on
local conditions or special circumstances. Each change in the Manual
will be explained to you at least thirty (30) days prior to its
effective date. Any change to the Manual which, in our reasonable
discretion, would cause a substantial investment by you will not be
effective unless approved by sixty-six percent (66%) of the open Best
Hotels. Each open hotel shall have one vote and approval of sixty-six
percent (66%) of the open hotels will be required to implement the
change. Notwithstanding the foregoing, changes to the Manual which
relate to guest security and/or life/safety issues are not subject to
the approval of you or other licensees even if substantial investments
are required.
F. Other Arrangements. We may arrange for development,
marketing, operations, administration, technical and support functions,
facilities, services and/or personnel with any other entity and may use
any facilities, programs, services and/or personnel used in connection
with the Hotel System in connection with our other business activities,
even if our other business activities compete with the Hotel or the
Hotel System.
G. Inspections/Compliance Assistance. We have the right to
inspect your Hotel at any time, with or without notice to you, to
determine if the Hotel is in compliance with the Hotel System and the
standards set forth in the Manual. If the Hotel fails to comply with
either, we may, at our option and at your cost, require you to correct
the deficiencies within the reasonable time we establish.
5. Proprietary Rights.
A. Ownership of the Hotel System and Proprietary Marks. You
acknowledge and shall not contest, either directly or indirectly,
either during the License Term or thereafter: (i) our exclusive right
to both use and grant licenses to use the Hotel System and any
element(s) or component(s) thereof; (ii) that we are the owner or
exclusive licensee of all right, title and interest in and to the
Proprietary Marks together with the goodwill they symbolize; or (iii)
the validity or ownership of the Proprietary Marks.
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All improvements and additions to or associated with the Hotel System
made by you or anyone else and all goodwill arising from your use of
the Proprietary Marks shall inure to our benefit and become our
property. Upon expiration or termination of this Agreement, no monetary
amount shall be attributed to any goodwill associated with your use of
the Hotel System or portion thereof.
B. Trademark Disputes. We have the sole right to handle third
party disputes concerning the use of all or any part of the Hotel
System, and you shall, at your reasonable expense, extend your full
cooperation to us in all matters relating to the operation of the
Hotel. All recoveries made as a result of disputes with third parties
regarding use of the Hotel System or any part thereof belong solely to
us. We are not required to initiate lawsuits against alleged imitators
or infringers and may settle any dispute in our discretion. You shall
not initiate any lawsuit or proceeding against alleged imitators or
infringers or any other lawsuit or proceeding to enforce or protect the
Hotel System without our prior written consent.
C. Protection of Name and Marks. Consistent with their
ownership rights and rights to use the Proprietary Marks, both parties
to this Agreement shall use their reasonable best efforts to protect
and maintain the Proprietary Marks and their distinguishing
characteristics. You agree: (i) to execute any documents we request to
obtain or maintain protection for the Proprietary Marks; (ii) to use
the Proprietary Marks only in connection with the operation of your
Hotel and only as we instruct; and (iii) that your unauthorized use of
the Proprietary Marks shall constitute both an infringement of our
rights and a material breach of your obligations under this Agreement.
You must notify us immediately, in writing, if you have any actual or
constructive knowledge of any infringement or challenge to your use of
the Proprietary Marks or any unauthorized use or possible misuse of
either the Proprietary Marks, the names "Best Inns of America" or "Best
Suites of America" or any Confidential Materials.
6. Records and Audits.
A. Monthly Reports. By the tenth (10th) day of each month, you
agree to prepare and submit to us a statement for the previous month,
certified by your chief financial or principal accounting officer,
listing Gross Rooms Revenue, other revenues generated at the Hotel,
room occupancy rates, reservation data, the amounts currently due under
Paragraph 3D and other information we deem useful in connection with
the Hotel System (the "Data"). The statement shall be in such form and
detail as we may reasonably request, shall be our property and may be
used by us for all reasonable purposes. We will not knowingly provide
Data on your Hotel as an inducement to develop other hotel brands in
your market area, although you understand that some of the Data may be
compiled into information we provide to prospective licensees.
B. Preparation and Maintenance of Records. You agree to: (i)
prepare on a current basis in a form satisfactory to us, (and preserve
for at least four (4) years), complete and accurate records concerning
Gross Rooms Revenue and all financial, operating, marketing and other
aspects of the Hotel; and (ii) maintain an accounting system which
fully and accurately reflects all financial aspects of the Hotel,
including, but not limited to, books of account, tax returns,
governmental reports, register tapes, daily reports, profit and loss
and cash flow statements, balance sheets and complete quarterly and
annual financial statements.
C. Audit. We or our agents may, at any time, examine and copy,
all books, records, and tax returns related to your Hotel and, at our
option, require an independent audit. If an inspection or audit reveals
that you have understated payments in any report to us, you shall
immediately pay us the amount understated, in addition to interest from
the date such amount was due until paid, at the lesser of one and
one-half percent (1.5%) per month or the maximum rate permitted by law.
In this event, we may also require that all of your future annual
financial statements be audited at your expense by an independent
certified public accounting firm you select and we approve. If an
inspection or audit discloses an underpayment to us of five percent
(5%) or more of the total amount owed during any six (6) month period,
you shall, in addition to paying the understated amount with interest,
reimburse us for our costs and expenses in connection with the
inspection or audit, including legal and accounting fees. These
remedies supplement any others we may have under this Agreement.
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D. Annual Financial Statements. Upon our request, not later
than ninety (90) days after the end of your fiscal year, you must
provide us with complete financial statements for such year certified
by your chief financial or principal accounting officer to be true and
correct and prepared in accordance with generally accepted accounting
principles consistently applied. Any false certification shall be a
material breach of this Agreement. Upon our request from time to time
you also agree to provide us with operating statistics for the Hotel.
7. Indemnity and Insurance.
A. Indemnity. You agree that nothing in this Agreement
authorizes either party to make any contract, agreement, warranty or
representation on the other's behalf, or to incur any debt or other
obligation in the other's name, and that neither party shall assume
liability for, or be deemed liable as a result of any such action, or
by reason of any act or omission of the other party or any claim or
judgment arising therefrom.
1. You agree to indemnify, defend and hold
harmless us, our parent, affiliates,
subsidiaries and our respective, officers,
directors, agents, employees, successors and
assigns (the "Indemnified Parties") against,
and to reimburse the Indemnified Parties
for, any and all claims or actions arising
or alleging to arise directly or indirectly
from, as a result of, or in connection with,
your operation of the Hotel, including, but
not limited to, claims alleging either
intentional or negligent conduct, acts or
omissions by you or us relating to the
operation of the Hotel or the Hotel System,
as well as the costs, including attorneys'
fees, of defending against said claims or
actions. We reserve the right to defend any
such claim or action against us. You agree
that this indemnity will survive the
expiration or termination of this Agreement.
You have no obligation to indemnify us if a
court of competent jurisdiction makes a
final decision not subject to further appeal
that we or our employees directly engaged in
willful misconduct or intentionally caused
the property damage or bodily injury that is
the subject of the claim. You shall notify
us immediately (but not later than five (5)
days following your receipt of notice) of
any claim, action or potential claim or
action naming any Indemnified Party as a
defendant or potential defendant (the
"Indemnification Notice"). The
Indemnification Notice shall include copies
of all correspondence or court papers
relating to the claim or action.
2. We shall indemnify you and hold harmless
your parent, affiliates, subsidiaries and
respective officers, directors, agents, and
employees against all claims against you
arising as a result of, or in connection
with, a material breach by us which is
adjudicated by a court of competent
jurisdiction to be the sole cause of the
claim, as well as the cost of defending the
claim, provided, however, this
indemnification shall be inapplicable if we
have exercised our rights in accordance with
this Agreement.
3. If you fail to comply with this Paragraph
7A, we may retain attorneys and defend any
claim, action or alleged claim or action at
your sole expense. You agree that our
obligations hereunder are exclusively to
you, and no other party may rely on,
enforce, or obtain relief for breach of such
obligations.
B. Insurance. During the License Term, you shall
comply with the insurance requirements of any applicable law, lease or
mortgage covering the Hotel and our specifications regarding amounts
and types of insurance. Prior to the Opening Date, and thereafter on an
annual basis and/or each time you change the terms of your insurance
policy or carrier, you shall provide us with certificates of insurance
which: (i) evidence your liability insurance and its amounts; (ii) name
Best Franchising, Inc. and U.S. Franchise Systems, Inc. as additional
insureds; (iii) state that your policy may not be canceled, amended or
permitted to lapse or expire without thirty (30) days prior written
notice to us. All insurance policies shall be written on a fully
insured basis. Deductibles and self insurance
9
retentions are subject to our prior approval. At the minimum, you agree
to maintain or cause to be maintained (as applicable) the following
insurance underwritten by an insurer we approve:
1. employer's liability and workers'
compensation insurance as prescribed by
applicable law;
2. comprehensive general and automobile
liability insurance (with products,
completed operations and independent
contractors coverage), all on an occurrence
basis, with single-limit coverage for
personal and bodily injury and property
damage of at least $5,000,000.00 per
occurrence which can be met by a combination
of primary liability and umbrella liability
policies. You also agree to cause your
general contractor to maintain comprehensive
general liability insurance of at least
$5,000,000.00 per occurrence naming Best
Franchising, Inc. and U.S. Franchise
Systems, Inc. as additional insureds; and
3. Dram Shop/Liquor liability insurance, in the
same amounts provided above and naming the
same additional insureds, if you serve
alcohol of any kind at the Hotel. If you
begin serving alcohol at any time during the
License Term, you agree to notify us
immediately and provide us with a revised
certificate of insurance evidencing Dram
Shop/Liquor liability insurance coverage.
8. Transfer.
A. Transfer by Us. We have the right to transfer or assign our
rights or obligations under this Agreement to any person or entity and
our interests will inure to the benefit of any transferee, successor or
assignee.
B. Transfer by You. You agree that the rights and duties
created by this Agreement are personal to you and that we have granted
this License in reliance on the business skill, financial capacity and
character of you and your partners, shareholders or members. You may
mortgage the Hotel to any financial institution without our consent if
you remain the mortgagor of the Hotel. Except as provided in Paragraph
8B(1), neither you, any successor to your interest, or any individual,
partnership, corporation, or other legal entity which directly or
indirectly owns any interest in this License or in you shall sell,
assign, transfer, convey or otherwise encumber any direct or indirect
interest in this License, the Hotel or the assets of the Hotel without
our consent.
1. A transfer of less than a fifty percent
(50%) equity interest in you which does not
transfer Control (as defined below), does
not require our consent if you notify us in
writing within thirty (30) days of the
transfer.
2. A transfer which alone or combined with
previous or simultaneous transfers changes
Control of the License, you, the Hotel, or
greater than fifty percent (50%) of the
Hotel's assets requires our prior written
consent. We may require any or all of the
following as conditions of our consent to a
transfer:
a) your compliance with all terms of
this Agreement;
b) the transferee entity or
individual, and all shareholders,
partners or members of the
transferee (collectively, the
"Transferee"), shall meet our
then-current qualifications for new
licensees;
c) the Transferee shall execute our
then-standard forms of license
agreement and other applicable
agreements for new Hotel System
licensees (which will include
then-current fees and
Contributions);
d) any new general manager retained by
the Transferee completes our
initial training program;
e) the Hotel shall be upgraded within
the time period we set to conform
to the then-current standards and
specifications for hotels operating
under the Hotel System;
f) you or the Transferee must pay us a
$5,000.00 transfer fee unless the
transfer is to the spouse, issue,
parent, or sibling of your
partner(s) or shareholder(s), or
from one partner or shareholder to
another. If the Transferee requests
approval of a term exceeding the
remainder of the
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License Term, the Transferee must
pay our then-current application
fee, prorated for the time period
exceeding the License Term;
g) you execute a general release, in a
form satisfactory to us, of any and
all claims by you against us and our
officers, directors, shareholders,
and employees;
h) the Transferee executes a written
assignment, in a form satisfactory
to us, assuming and agreeing to
discharge all of your obligations
under this Agreement; and
i) you execute all documents we
request evidencing your agreement
to remain liable for all
obligations to us and our parent,
subsidiaries and affiliates
prior to the transfer.
2. "Control" or "Controlling" shall mean the
direct or indirect possession of the power
to direct or cause the direction of the
management and policies of any person or
legal entity.
3. Except as otherwise provided herein, any
purported assignment or transfer without our
prior written consent is null and void,
constitutes a material breach of this
Agreement, enables us to terminate this
Agreement without providing you an
opportunity to cure and allows us to seek
both injunctive relief and monetary damages.
4. If you are an individual, you may transfer
this License without paying a transfer or
application fee if: (i) you retain at least
twenty-five percent (25%) ownership; (ii) we
receive your request and supporting
documentation before the Opening Date; and
(iii) the Transferee meets our then-current
standards for new licensees.
C. Transfers of the License or Equity Interest in You Upon
Death. Upon the death or mental incompetency of you or a person
Controlling you, the executor, administrator, or personal
representative ("Representative") of such person shall transfer within
three (3) months his interest to a third party subject to our approval
and the conditions set forth in Paragraph 8B. In the case of transfer
by devise or inheritance, if the heirs or beneficiaries can not meet
the conditions of Paragraph 8B, the Representative shall have six (6)
months from the death or mental incompetency to dispose of the
interest, subject to the transfer provisions of this Agreement, after
which time we may terminate this Agreement.
D. Registration of a Proposed Transfer of Equity Interests.
Securities in you may be offered to the public only with our prior
written consent. All materials required by federal or state law for the
sale of any interest in you shall be submitted to us for review prior
to distribution or filing with any government agency, including any
materials to be used in any offering exempt from registration under
federal or state securities laws. No offering by you shall imply or
state (by use of the Proprietary Marks or otherwise) that we are
participating as an underwriter, issuer or your representative. You
agree to pay us a non-refundable fee equal to the greater of $5,000.00
or our costs and expenses of reviewing each proposed offering
including, without limitation, attorneys' fees. You acknowledge that we
may require changes to your offering materials and a full
indemnification from all participants in the offering before issuing
our consent.
E. Non-Waiver of Claims. Our consent to a transfer is not a
waiver of: (i) any claims we may have against you; or (ii) our right to
demand strict compliance by the Transferee with the terms of this
Agreement.
F. Our Right of First Refusal. If any party holding any direct
or indirect interest in you or in all or substantially all of the
Hotel's assets desires to accept a bona fide offer from a third party
to purchase the interest, you agree to notify us and provide whatever
documentation relating to the offer we require. If the third party
purchaser wishes to remove the Hotel from the Hotel System, we have the
right and option, exercisable within thirty (30) days after we receive
written notification, to inform you that we intend to purchase the
seller's interest on the same terms and conditions offered by the third
party. If we elect to purchase the seller's interest, closing will
occur within ninety (90) days from the
11
date of our notice to the seller. If we elect not to purchase the
seller's interest, any material change thereafter to the terms of the
offer shall constitute a new offer subject to our same rights of first
refusal as in the case of the third party purchaser's initial offer.
Our failure to exercise this option is not a waiver by us of any other
provision of this Agreement. If the consideration, terms, and/or
conditions offered by the third party purchaser are such that we may
not reasonably be required to furnish the same consideration, terms,
and/or conditions, then we may purchase the interest for the reasonable
cash equivalent. If the parties cannot agree within thirty (30) days on
the reasonable cash equivalent of the consideration, terms, and/or
conditions offered by the third party purchaser, an independent
appraiser whose determination shall be binding will be designated by us
at our expense to determine the reasonable equivalent cash
consideration.
G. No Right of First Refusal. If a third party meeting our
then-current qualifications offers to purchase the Hotel and wishes to
keep the Hotel in the Hotel System, we shall have no right of first
refusal.
9. Condemnation and Casualty.
A. Condemnation. You shall immediately notify us of any
proposed taking of the Hotel by eminent domain. If a taking occurs, we
shall use reasonable efforts (but shall not be obligated) to transfer
this Agreement to a location selected by you and approved by us within
four (4) months of the taking. If we approve the new location and you
subsequently open a new hotel at the new location within two (2) years
of the taking, the new hotel shall be deemed to be the Hotel licensed
hereunder. If a taking occurs and the new hotel does not become the
Hotel licensed hereunder (or if it is evident to us that such shall be
the case), this Agreement will terminate, but you will not pay us any
liquidated damages.
B. Casualty. If the Hotel is damaged by fire or casualty, you
shall repair the damage in accordance with our standards. If the damage
or repair requires closing all or any portion of the Hotel, you shall:
(i) notify us immediately; (ii) commence reconstruction within four (4)
months of closing; and (iii) reopen for continuous business operations
as soon as practicable (but in any event within twenty-four (24) months
after closing of the Hotel and not without providing us at least ten
(10) days advance notice of the proposed reopening date). If the Hotel
is not reopened in accordance with this Paragraph 9B, this Agreement
will terminate and you shall pay us liquidated damages (see Paragraph
10D), provided, however, that your payment of liquidated damages shall
not exceed the amount of any insurance proceeds you receive.
C. Extensions of Term. The License Term will be extended for
the period the Hotel is not operating as a result of fire or other
casualty. You are not required to make any payments pursuant to
Paragraph 3D while the Hotel is closed by reason of condemnation or
casualty unless you receive insurance proceeds.
10. Termination.
A. Expiration of Term. This Agreement will expire without
notice [twenty (20) years for new construction; ten (10) years for
conversions] from the authorized Opening Date, subject to its earlier
termination as set forth herein. You acknowledge the difficulty of
determining our damages if this Agreement terminates prior to its
expiration. You also acknowledge that the liquidated damages set forth
in Paragraph 10D represent the best estimate of our damages arising
from any termination of this Agreement prior to its expiration. Subject
to Paragraph 11A, upon the expiration of the License Term, you shall
comply with our de-identification procedures as set forth in Paragraph
10C of this Agreement or in the Manual.
B. Defaults.
1. Default with Opportunity to Cure.
a) If you fail to comply with or
violate any provision of this
Agreement, the Manual or any Hotel
System standard, unless this
Agreement,
12
applicable law or any
default notice we send to you
provides otherwise, you shall have
thirty (30) days from your receipt
of a written default notice to
remedy such default (the "Cure
Period"). If any default remains
uncured after the Cure Period
expires, this Agreement shall
terminate automatically without
further notice to you, effective
immediately upon the expiration of
the Cure Period. Alternatively,
instead of considering this
Agreement automatically terminated
upon the expiration of the Cure
Period, we may suspend your access
to the CRS or remove your Hotel
from our advertising publications
or the National Directory until
your default is cured to our
satisfaction.
b) If we issue you two (2) written
default notices within any twelve
(12) month period, the Cure Period
in the second written default notice
shall be ten (10) days, unless
applicable law provides otherwise.
c) In any judicial or other proceeding
in which the validity of our
termination of this Agreement is
contested, we may cite and rely upon
all of your defaults or violations
of this Agreement, not solely the
defaults or violations referenced in
any written default notice sent to
you.
d) Any notice of termination or
suspension of services we issue to
you shall not relieve you of your
obligations that survive termination
of this Agreement, including, but
not limited to, its
de-identification, indemnification
and liquidated damages provisions.
e) If you fail to provide us with a
copy of the recorded deed, an
executed lease for at least the
License Term or other evidence
satisfactory to us of your Control
of the Hotel on or before
commencement of construction or
renovation, we may issue you a
default notice which may lead to us
terminating this Agreement.
2. Default Without Opportunity to Cure
(Immediate Termination by Us). This Agreement shall
terminate immediately without notice to you if:
a) you, or any guarantor of your
obligations (a "Guarantor"), shall:
(i) not pay its debts as they
become due; (ii) admit its
inability to pay its debts; or
(iii) make a general assignment for
the benefit of creditors;
b) you, or any Guarantor, commence or
consent to any case, proceeding or
action seeking: (i) reorganization,
arrangement, adjustment,
liquidation, dissolution or
composition of you or your debts
under any law relating to
bankruptcy, insolvency,
reorganization or relief of debtors;
or (ii) appointment of a receiver,
trustee, custodian or other official
for any portion of its property;
c) you, or any Guarantor, take any
corporate or other action to
authorize any of the actions set
forth above in Paragraphs 10B(2)(a)
or 10B(2)(b);
d) any case, proceeding, or other
action against you or any Guarantor
is commenced seeking an order for
relief against it as debtor, or
seeking reorganization,
arrangement, adjustment,
liquidation, dissolution or
composition of it or its debts
under any law relating to
bankruptcy, insolvency,
reorganization or relief of
debtors, or seeking appointment of
a receiver, trustee, custodian or
other official for it or for any
portion of its property, and such
case, proceeding or other action:
(i) results in an order for relief
against it which is not fully
stayed within seven (7) business
days after the entry thereof; or
(ii) remains undismissed for
forty-five (45) days;
e) an attachment remains on all or any
part of the Hotel or your or any
Guarantor's assets for thirty (30)
days;
f) you or any Guarantor fail, within
sixty (60) days of the entry of a
final judgment against you or any
Guarantor in any amount exceeding
13
$50,000.00, to discharge, vacate or
reverse the judgment, or to stay
execution of it, or if appealed, to
discharge the judgment within thirty
(30) days after a final adverse
decision in the appeal;
g) you cease to operate the Hotel at
the location designated on
Attachment A or under the
Proprietary Marks, or lose
possession or the right to
possession of all or a significant
part of the Hotel, except as
otherwise provided herein;
h) you contest in any court or
proceeding either all or any portion
of our ownership of the Hotel System
or the validity of any of the
Proprietary Marks;
i) you transfer your rights under this
Agreement in violation of Paragraph
8;
j) you fail to identify the
Hotel to the public as a Best
Hotel;
k) any action is taken to
dissolve or liquidate you or any
Guarantor, except due to death;
l) you or any of your principals or
Guarantors is, or is discovered to
have been, convicted of a felony or
any other offense likely to reflect
adversely upon us, the Hotel System,
or the Proprietary Marks, including,
but not limited to, any violation of
laws or regulations relating to
discrimination, equal employment or
equal opportunity;
m) you knowingly maintain false books
and records of account or knowingly
submit false or misleading reports
or information to us, including any
information you provide or fail to
provide to us on your franchise
application or otherwise;
n) you disclose the contents of any
Confidential Materials to any
unauthorized person or fail to
exercise reasonable care to prevent
such disclosure; or
o) in our discretion, we determine a
threat or danger to public health
or safety results from the
construction, maintenance or
operation of the Hotel, such that
an immediate shutdown of the Hotel
is necessary to avoid a substantial
liability or loss of goodwill to
the Hotel System. Notwithstanding
the foregoing, if we determine, in
our discretion, that both the
threat of danger to public health
or safety is eliminated and the
reopening of the Hotel will not
cause a substantial loss of
goodwill to the Hotel System within
six (6) months of the termination
of this Agreement, we will
reinstate the Agreement on
identical terms and conditions.
C. De-identification of Hotel Upon Termination or Expiration of
this Agreement.
1. Within ten (10) days of the effective date
of termination or expiration of this
Agreement, as the case may be, you agree to
de-identify the Hotel by taking whatever
action we deem necessary to ensure that the
Hotel is no longer identified as a hotel
within the Hotel System and no use is made
of any part of the Hotel System at or in
connection with the Hotel or otherwise.
Among the actions you must take to
de-identify the Hotel, you agree to: (i)
return the Manual and all other proprietary
materials to us; (ii) remove all items
identifying the Hotel System; (iii) change
the telephone listing for the Hotel; (iv)
remove all items bearing the Proprietary
Marks (including all signage) from the
Hotel; (v) cancel all fictitious or assumed
name or equivalent registrations relating to
your use of the Proprietary Marks; (vi) stop
answering the telephone in any way that
would lead a prospective customer to believe
that the Hotel is affiliated with the Hotel
System; and (vii) permit our representative
to enter the Hotel to conduct inspections on
a periodic basis until de-identification is
completed to our satisfaction. Until
de-identification is completed to our
satisfaction, you agree to maintain a
conspicuous sign at the registration desk in
a form we specify stating
14
that the Hotel is no longer associated with
the Hotel System. You acknowledge that the
de-identification process intends to
immediately alert the public that the Hotel
is not affiliated with the Hotel System.
2. If you fail to comply with all of the
de-identification provisions of Paragraph
10C(1) within the permitted ten (10) day
period, you agree to: (i) pay a royalty fee
of $5,000.00 per day until de-identification
is completed to our satisfaction; and (ii)
permit our representative to enter the Hotel
to complete the de-identification process at
your expense.
3. You agree to pay all our costs and expenses
of enforcing these de-identification
provisions, including, but not limited to,
all attorneys' fees. Nothing contained
herein limits our rights or remedies at law
or in equity should you not complete the
de-identification procedures within the
permitted ten (10) day period, including,
but not limited to, our right to seek and
obtain an injunction to remove or cause to
be removed, at your sole cost and expense,
all signage from the Hotel.
D. Payment of Liquidated Damages. If this Agreement terminates
after the first twenty-four (24) months of Hotel operations and prior
to its expiration for any reason other than as set forth in Paragraphs
9A or 9B, you agree to pay us liquidated damages as set forth below.
Your payment of liquidated damages to us shall not be considered a
penalty for your breaching this Agreement, but rather a reasonable
estimate of our damages and lost future fees we would have received
from you under the Agreement. You acknowledge that your obligation to
pay us liquidated damages is in addition to, not in lieu of, your
obligations to pay any amounts then due to us and comply with the
de-identification provisions of Paragraph 10C. You agree to pay us
liquidated damages in a lump sum within thirty (30) days following the
date of termination, based on the average occupancy rate at the Hotel
for the twelve (12) months preceding the termination ("Occupancy Rate")
as follows:
1. if the Occupancy Rate was below fifty
percent (50%), you shall pay no liquidated
damages;
2. if the Occupancy Rate was fifty percent
(50%) to fifty-nine and nine-tenths percent
(59.9%), you agree to pay us an amount equal
to twelve (12) months of all fees under
Paragraph 3D(1)(a), unless you give us
twelve (12) months prior written notice and
your Occupancy Rate meets the criteria of
this Paragraph 10D(2), in which case you
shall pay no liquidated damages;
3. if the Occupancy Rate was sixty percent
(60%) to sixty-nine and nine-tenths percent
(69.9%), you agree to pay an amount equal to
twenty-four (24) months of fees under
Paragraph 3D(1)(a); and
4. if the Occupancy Rate was seventy percent
(70%) or greater, you agree to pay an amount
equal to thirty-six (36) months of fees
under Paragraph 3D(1)(a).
If this Agreement terminates at any time during the
first twenty-four (24) months of the operation of the
Hotel, you agree to pay us liquidated damages equal
to the greater of: (i) $2,000.00 multiplied by the
number of Guest Rooms; or (ii) thirty-six (36)
multiplied by the average monthly fees required under
Paragraph 3D(1)(a).
11. Renewal.
A. Requirements. Upon your written submission of our
then-current form of renewal application at least 180 days prior to
this Agreement's expiration date, we shall grant you a ten (10) year
renewal term if, in our discretion, the following criteria are
satisfied:
1. you pay a non-refundable fee equal to
one-half of the then-current franchise
application fee;
2. you received passing Quality Assurance
Scores (as defined in the Manual) during the
preceding three (3) year period;
3. you agree to upgrade the Hotel to meet our
then-current criteria for the Hotel System;
and
4. you have a favorable operating and payment
history.
15
Notwithstanding the foregoing, if an independent
third party chosen by us determines that the location
of the Hotel is inappropriate or obsolete for the
brand we shall not be required to renew your license.
We will accept or reject your written renewal request
within thirty (30) days of its receipt by us. You
agree to execute our then-current form of license
agreement to effectuate any renewal.
B. Alternative Process. If we determine that you do not meet
the above criteria, you may apply to renew this Agreement for a ten
year term by submitting an application at least 120 days prior to the
expiration of the License Term with a non-refundable renewal fee equal
to our then-current franchise application fee. We will evaluate your
application based on your operating history, the location of the Hotel
and your agreement to upgrade the Hotel. If we accept your application,
you will execute our then-current form of license agreement.
12. Relationship of Parties.
A. No Agency Relationship. You are an independent contractor.
Neither party is the legal representative or agent of, or has the power
to obligate the other for any purpose. The parties have a business
relationship defined entirely by the express provisions of this
Agreement. No partnership, joint venture, affiliate, agency, fiduciary
or employment relationship is intended or created hereby.
B. Your Notices to Public Concerning Independent Status. You
shall take such steps as we require to minimize the chance of a claim
being made against us for any occurrence at the Hotel, or for acts,
omissions or obligations of you or anyone affiliated with you or the
Hotel. Such steps may include giving notice in private or public rooms
or on advertisements, business forms and stationery, making clear to
the public that we are not the owner or operator of the Hotel and are
not accountable for events occurring at the Hotel.
C. Use of the Best Name. You shall not use the word "Best" or
any similar words in your entity or trade name, nor authorize or permit
such use by anyone else. You shall not use the word "Best" or any other
name or mark associated with the Hotel System to incur any obligation
or indebtedness.
13. Miscellaneous.
A. Severability and Interpretation. The remedies provided in
this Agreement are not exclusive. If any provision of this Agreement is
held unenforceable, void or voidable, all remaining provisions shall
continue in full force and effect unless deletion of the provision(s)
materially frustrates the purpose of the parties or makes performance
commercially impracticable. If any provision requires interpretation,
such interpretation shall be based on the reasonable intention of the
parties without interpreting any provision in favor of or against any
party hereto by reason of the drafting of the party or its position
relative to the other party.
B. Binding Effect. This Agreement is valid when executed and
accepted by us at our office in Atlanta, Georgia. It is made and
entered into in the State of Georgia and shall be governed and
construed under and in accordance with the laws of the State of
Georgia. You acknowledge that you have sought, voluntarily accepted,
and become associated with us at our headquarters in Atlanta, Georgia.
The choice of law designation permits but does not require that all
lawsuits or proceedings concerning this Agreement be filed in the State
of Georgia.
C. Exclusive Benefit. This Agreement is exclusively for the
benefit of the parties hereto and shall not create liability to any
third party, unless otherwise set forth herein. No agreement between us
and any third party is for your benefit.
D. Entire Agreement. This is the entire Agreement between the
parties relating to the Hotel. Neither we nor any person on our behalf
has made any representation to you concerning this Agreement, the Hotel
or the Hotel System that is not set forth herein or in our UFOC. No
change in this
16
Agreement shall be valid unless in writing signed by
both parties. No failure to require strict performance or to exercise
any right or remedy hereunder shall preclude requiring strict
performance or exercising any right or remedy in the future.
E. Our Withholding of Consent. Our consent, wherever required,
may be withheld if any default by you exists under this Agreement.
Prior to any deviation by you from any material term of this Agreement,
you must obtain our prior written consent.
F. Notices. All notices given under this Agreement shall be in
writing, delivered by any means which provides evidence of the date
received. Notices shall be deemed given at the date and time receipt is
evidenced, to the respective parties at the following addresses unless
and until a different address is designated by written notice to the
other party:
Notices to us:Best Franchising, Inc. Notices to you: ENTITYNAMECAPS13
Corporate Square, PCNAME
Suite 250 PCADDRESS1
Atlanta, Georgia30329 PCADDRESS2
Attention: ▇▇▇ ▇▇▇▇▇
G. Descriptive Headings. The headings in this Agreement are
for convenience only and shall not control or affect the meaning or
construction of any provision.
H. Management of the Hotel. You must at all times retain and
exercise direct management control over the business of the Hotel. You
shall not enter into any lease, management agreement or other similar
arrangement for the operation of the Hotel or any part thereof with any
independent entity without our prior written consent.
I. Guest Room Rates. You shall establish room rates for the
Hotel which must be submitted to us before the deadline for the next
National Directory. With the exception of special event periods, you
agree not to charge any rate exceeding the rate published in the
current edition of the National Directory.
[SIGNATURES TO FOLLOW ON NEXT PAGE]
17
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first stated above.
LICENSEE:
ENTITYNAMECAPS
By:
---------------------------------------------
SIGNEENAME
SIGNEETITLE
Attest/Witness:
----------------------------------------------
Any other corporate officer or notary
public w/seal
LICENSOR:
BEST FRANCHISING, INC.
By:
------------------------------------------------
▇▇▇ ▇▇▇▇▇,
Executive Vice President, Franchise Operations
Attest:
--------------------------------------------
Assistant Secretary
18
GUARANTY
As an inducement to Best Franchising, Inc. ("we," "our" or "us") to
execute that certain license agreement (including any future amendments
thereto) with ENTITYNAMECAPS("Licensee") dated as of _______________, a
copy of which is attached hereto, (collectively, the "License
Agreement"), the undersigned (individually, a "Guarantor" and
collectively, the "Guarantors"), jointly and severally, hereby
unconditionally warrant to us and our parent, successors and assigns
that all representations of Licensee contained in both the License
Agreement and the application submitted in connection therewith are
true and correct. The Guarantors also jointly and severally guarantee
the timely payment and performance of all of Licensee's obligations
under the License Agreement.
Upon notice from us that Licensee is in default under any of the terms
of the License Agreement, the Guarantors shall cure any monetary
default within five (5) business days from such notice and immediately
perform all other obligations of Licensee under the License Agreement.
Without affecting the obligations of the Guarantors under this
Guaranty, we may without notice to the undersigned extend, modify or
release any indebtedness or obligation of the Licensee, or settle,
adjust or compromise any claims against the Licensee. The Guarantors
waive notice of amendment of the License Agreement and notice of demand
for payment or performance by the Licensee. The Guarantors expressly
acknowledge that their joint and several obligation to cure all
defaults and guaranty the performance of Licensee shall survive the
termination of the License Agreement.
Upon the death of a Guarantor, the estate of such Guarantor shall be
bound by this Guaranty but only for defaults and obligations hereunder
existing at the time of death. The obligations of the surviving
Guarantors shall continue in full force and effect.
This Guaranty constitutes a guaranty of payment and performance and not
of collection, and each of the Guarantors specifically waives any
obligation we may have to proceed against the Licensee on any money or
property held by the Licensee or by any other person or entity as
collateral security, by way of set off or otherwise. The Guarantors
further agree that this Guaranty shall continue to be effective or be
reinstated, as the case may be, if at any time payment or any of the
guaranteed obligations is rescinded or must otherwise be restored or
returned by us upon the insolvency, bankruptcy or reorganization of the
Licensee or any Guarantor, all as though such payment has not been
made.
Our failure to enforce all or any portion of our rights under this
Guaranty shall not constitute a waiver of our ability to do so at any
point in the future.
IN WITNESS WHEREOF, each of the undersigned has signed this Guaranty as
of ____________, the date of the License Agreement.
Witnesses: Guarantors:
Notarized (with seal):
------------------------- -------------------------------
GUARANTOR1, Legal Signature
------------------------- -------------------------------
GUARANTOR2, Legal Signature
------------------------- -------------------------------
, Legal Signature
------------------------- -------------------------------
, Legal Signature
------------------------- -------------------------------
19
ATTACHMENT A
THE HOTEL
Facilities (Paragraph 1 ):
Site --- Area and general description: ABRANDhotel located at:
HOTELADDRESS1 HOTELADDRESS2
Number of approved Guest Rooms: ROOMS
Number of Suites included:
Ownership of Licensee (Paragraph 8):
ENTITYNAMECAPS 100%
20
ATTACHMENT B
TERRITORY
PROPERTYNAME#IDNUMBER
The Territory is defined as that area bordered by:
21
ATTACHMENT C
THE WORK
You acknowledge that every detail of the Hotel System is
important to us and other licensees operating under the Hotel
System to develop and maintain the standards and public image
of the Hotel System. You agree to strictly comply with the
details of the Hotel System, as set forth in the Manual or
otherwise in writing. The following constitutes the
development schedule for the Hotel.
(1) Conversion of an Existing Facility
(a) You agree to renovate the Hotel in strict accordance and
within the time frames set forth on the attached property
conversion plan ("PCP"). If requested by us, you agree to
submit renovation plans for the Hotel for our approval. If we
require you to submit renovation plans, renovations shall not
begin until we approve the renovation plans in writing. Once
we approve the renovation plans, you agree not to make any
subsequent changes without our prior written consent. Our
approval of your renovation plans is exclusively for the
purpose of ensuring compliance with our then-current
standards. Your failure to renovate the Hotel in strict
accordance with the PCP and within the specified time frames
shall constitute a material breach of this Agreement and may
lead to us issuing a default notice and subsequently
terminating this Agreement.
(b) The Hotel shall be ready to open for business not later than
six (6) months from the date hereof, unless otherwise provided
in the PCP ("Completion Date"). Within ten (10) days of the
Completion Date you shall ask us to conduct a final
inspection, which we shall promptly conduct. You shall not
open for business prior to our written authorization to do so,
and you agree to open within ten (10) days of our
authorization. We will not authorize you to open the Hotel
unless and until you are in full compliance with all terms of
this Agreement.
(2) New Development
(a) You shall submit preliminary plans (the "Plans"), including
site layout and outline specifications within three (3) months
from the date of this Agreement.
(b) You shall attend at your own expense a briefing to acquaint
you with our building process and support structure at our
headquarters in Atlanta, Georgia within four (4) months from
the date of this Agreement.
(c) You shall submit to us complete working drawings and
specifications for the Hotel, including its proposed
equipment, furnishings, facilities and signs, with such detail
and containing such information as we require within five (5)
months from the date of this Agreement. The Plans shall
conform to our then-prevailing Hotel System standards.
Construction shall not begin until we have approved the Plans
in writing. Following our approval of your Plans, you shall
make no changes to the Plans without our prior written
consent. If during the course of construction changes in the
Plans are required, you shall notify us immediately. Your
failure to construct the Hotel in strict accordance with the
Plans we approve in writing shall constitute a material breach
and may lead to our issuing a default notice and subsequently
terminating this Agreement. Our approval of the Plans is
intended exclusively to ensure compliance with our
then-current standards.
(d) Construction shall commence within seven (7) months from the
date of this Agreement. You shall notify us within (5) days of
commencement of construction, which shall mean excavation and
poured footings with a finished building slab. Construction
shall continue uninterrupted (unless interrupted by force
majeure) until completion of the Hotel. The term "force
majeure" shall mean an act of God, war, civil disturbance,
government action, fire, flood, accident, hurricane,
earthquake or other calamity, strike or other labor dispute.
The Hotel shall be ready to open for business within twelve (12) months
from the date hereof ("Completion Date"). Within ten (10) days of the
Completion Date you shall ask us to conduct a
22
final inspection, which we shall promptly conduct. You shall not open
for business prior to our written authorization to do so, and you agree
to open within ten (10) days of our authorization. We will not
authorize you to open the Hotel unless and until you are in full
compliance with all terms of this Agreement.
23