Common use of Franchise Clause in Contracts

Franchise. (a) Upon the Effective Date, Seller authorizes Purchaser to contact Hilton to seek assumption or re-issuance (as required by Hilton) of the applicable franchise license for the Hotel at Closing (the “Franchise Approval”). Immediately after the Effective Date, Purchaser shall reasonably promptly and diligently in good faith pursue obtaining, at Purchaser’s sole cost and expense, the written consent of Hilton for the Franchise Approval and the corresponding franchise and related agreements pertaining to the operation of the Hotel as a Home2 Suites Hotel after the Closing (collectively, the “New Franchise Agreement”) and providing for the release of Seller and any guarantors of Seller’s future obligations to Hilton effective as of the Closing. (b) If Purchaser elects not to obtain the Franchise Approval (but instead elects another franchisor or brand or elects not to have any franchise or brand) or Purchaser does not obtain the Franchise Approval and does not terminate this Agreement in accordance with Section 5.3 and proceeds to Closing, Purchaser shall (i) pay all cancellation fees, termination fees, removal fees or other amounts owed to Hilton as a result of cancellation and termination of the Existing Franchise Agreement, (ii) immediately upon Closing, cease operating the Property as a “System Hotel” within Hilton’s system, including, without limitation, not directly or indirectly representing or giving the impression that it is a present or former franchisee or licensee of Hilton or that the Property was previously a “System Hotel,” and (iii) immediately upon Closing, at its sole cost and expense, immediately and permanently remove or cause to be removed from the Property all identifying characteristics, marks and intellectual property of Hilton and its “System Hotels,” including, without limitation, all electronic systems, signs, fixtures, furniture, furnishings, equipment, advertising materials, stationery, supplies, forms and other items containing the words, trademark, service marks or insignia for a “System Hotel,” return to Hilton its intellectual property and other materials proprietary to Hilton, make such alterations as may be necessary and required by Hilton to distinguish the Property from its former appearance and other “System Hotels” and allow Hilton to enter upon the Property to complete any of the foregoing not completed by Purchaser within thirty (30) days after Closing (collectively, “De-Identification”). The De-Identification will involve, among other things, all de-identification required by the Existing Franchise Agreement and physical changes of distinctive features for a “System Hotel,” including removal of any free-standing sign down to the structural steel, to preclude any confusion, and compliance with all other requirements of the Existing Franchise Agreement that arise as a result of the sale of the Property to Purchaser. Upon Closing and in the event that Purchaser does not obtain the Franchise Approval from Hilton (but instead elects another franchise or brand or elects not to have any franchise or brand), Purchaser agrees to indemnify and hold Seller harmless from and against any and all losses, claims, damages, liabilities and expenses (including without limitation Attorneys Fees) arising from the termination of the Existing Franchise Agreement hereunder and/or Seller’s ability or inability to obtain a release of Seller or any Seller related guarantor of the Existing Franchise Agreement and any failure by Purchaser to comply with all obligations arising in connection with De-Identification and any obligations imposed by Hilton on the owner of the Property after Closing.

Appears in 4 contracts

Samples: Purchase and Sale Agreement (Condor Hospitality Trust, Inc.), Purchase and Sale Agreement (Condor Hospitality Trust, Inc.), Purchase and Sale Agreement (Condor Hospitality Trust, Inc.)

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