Common use of Non-Economic Hotels Clause in Contracts

Non-Economic Hotels. (a) Manager shall be entitled to designate as a Non-Economic Hotel any Hotel for which, in each of any three (3) consecutive full Fiscal Years during the Term, the Operating Profit is less than the sum of (i) amounts to be funded to the Reserve Account pursuant to Section 5.2(a) on account of such Hotel, plus (ii) Owner’s Fixed Priority attributable to such Hotel pursuant to Exhibit C hereto; provided, however, that the number of Hotels designated as Non-Economic Hotels under this Agreement (other than those with respect to which such designation has been withdrawn or deemed withdrawn, but including those which have been sold pursuant to this Section 2.7) shall not exceed three (3). If subsequent to a Hotel being designated as a Non-Economic Hotel but prior to its sale pursuant to this Section 2.7, the Operating Profit of such Hotel for any Fiscal Year shall exceed the sum of amounts to be funded to the Reserve Account pursuant to Section 5.2(a) on account of such Hotel, plus the portion of the Owner’s Fixed Priority for such Fiscal Year so attributable to such Hotel, such designation shall be deemed withdrawn; provided, however, if Manager is then negotiating a sale of such Hotel to a third party, such designation shall not be deemed withdrawn for a period of three (3) months. (b) So long as there is no Manager Default or Manager Event of Default, Manager may market each Hotel that is a Non-Economic Hotel for sale. In addition, if Manager reasonably anticipates based on projections prepared in the ordinary course that a Hotel will become a Non-Economic Hotel within the next twelve (12) months, Manager may market such Hotel for sale; provided, however, no Hotel shall be sold pursuant to this Section 2.7 other than Non-Economic Hotels. If Manager receives an Offer, Manager shall give Owner and Purchaser notice thereof, which notice shall include a copy of the executed Offer. In the event that Owner and Purchaser shall fail to accept or reject such Offer within five (5) Business Days after receipt of such notice, such Offer shall be deemed to be rejected by them. Provided there is no Manager Default or Manager Event of Default, if Owner and Purchaser shall either sell such Non-Economic Hotel pursuant to such Offer or reject or be deemed to have rejected such Offer, then effective as of the date of such sale or, if the Offer was rejected or deemed rejected, the proposed date of sale contained in such Offer, as the case may be, the following shall apply: (i) the Term shall terminate with respect to such Non-Economic Hotel; (ii) no further Owner’s Percentage Priority shall accrue with respect to such Non-Economic Hotel’s Gross Revenues which accrue after such termination; (iii) the Owner’s First Priority shall be reduced by an amount equal to eight percent (8%) of the net (after taking into account any costs paid by Manager) proceeds of sale received by Owner or Purchaser (or, in the case of such a rejection, eight percent (8%) of the projected net (after taking into account any costs to be paid by Manager) proceeds of sale which would have been received by Owner or Purchaser determined by reference to such Offer); and (iv) the Owner’s Second Priority shall be reduced by one half of one percent (0.5%) of such net proceeds (or, in the case of a rejection, one half of one percent (0.5%) of such projected net proceeds).

Non-Economic Hotels. (a) Either Owner or Manager shall be entitled to designate as a Non-Economic Hotel any Hotel for the Gross Revenues of which, in each two (2) out of any three (3) consecutive full Fiscal Years during the Term, the Operating Profit is less than are insufficient to pay the sum of (i) all Operating Costs and, beginning January 1, 2014, all amounts to be funded to the Reserve Account pursuant to Section 5.2(a5.2 (Reserve Account) on account of with respect to such Hotel, plus (ii) Owner’s Fixed Priority attributable to such Hotel pursuant to Exhibit C hereto; provided, however, that provided the number of additional Hotels which may be designated as Non-Economic Hotels under this Agreement (other than those with respect to which such designation has been withdrawn or deemed withdrawn, but including those which have been sold pursuant to this Section 2.7) shall not exceed three twenty five (325). Upon designation as a Non-Economic Hotel, such Hotel shall be marketed by Owner for third party sale as though it were a Designated Hotel pursuant to the processes in Sections 2.6(a) and (b) (Designated Hotels and Sale Process). If subsequent Owner receives a bona fide third party offer(s) it does not wish to a accept, Owner shall retain such Non-Economic Hotel being free and clear of any contractual obligations of any franchise or management agreement from Manager or its Affiliates. If Owner retains such Non-Economic Hotel, effective on the last day of the twelfth calendar month following the date such Hotel was designated as a Non-Economic Hotel but prior to its sale pursuant to this Section 2.7Hotel, the Operating Profit of such Hotel for shall be treated as having been purchased by Owner as a Retained Hotel under Section 2.6(c)(Retained Hotels) (Retained Hotels), including the same reduction in Owner’s First Priority and Owner’s Second Priority as provided in Section 2.6(c) (Retained Hotels). If Owner does not receive any Fiscal Year offer within twelve (12) calendar months of the date such Hotel was designated a Non-Economic Hotel, it shall exceed give notice to Manager and Manager shall have the sum of amounts right to be funded purchase such Hotel at the original cost to the Reserve Account pursuant to Section 5.2(a) on account Owner of such Hotel, plus by notice given to Owner within thirty (30) days after the portion last day of the Owner’s Fixed Priority for such Fiscal Year so attributable to such Hotel, such designation shall be deemed withdrawn; provided, however, if Manager is then negotiating a sale of twelfth calendar month following the date such Hotel to a third party, such designation shall not be deemed withdrawn for a period of three (3) months. (b) So long as there is no Manager Default or Manager Event of Default, Manager may market each Hotel that is was designated a Non-Economic Hotel for sale. In addition, if Manager reasonably anticipates based on projections prepared in the ordinary course that a Hotel will become a Non-Economic Hotel within the next twelve (12) months, Manager may market such Hotel for sale; provided, however, no Hotel shall be sold pursuant to this Section 2.7 other than Non-Economic HotelsHotel. If Manager receives an Offerdoes not so elect, Manager shall give Owner and Purchaser notice thereof, which notice shall include a copy of the executed Offer. In the event that Owner and Purchaser shall fail to accept or reject such Offer within five (5) Business Days after receipt of such notice, such Offer shall be deemed to be rejected by them. Provided there is no Manager Default or Manager Event of Default, if Owner and Purchaser shall may elect either sell such Non-Economic Hotel pursuant to such Offer or reject or be deemed to have rejected such OfferHotel treated as having been purchased by Owner as a Retained Hotel under Section 2.6(c) (Retained Hotels), then effective as of provided the date of such sale or, if the Offer was rejected or deemed rejected, the proposed date of sale contained reductions in such Offer, as the case may be, the following shall apply: (i) the Term shall terminate with respect to such Non-Economic Hotel; (ii) no further Owner’s Percentage Priority shall accrue with respect to such Non-Economic Hotel’s Gross Revenues which accrue after such termination; (iii) the Owner’s First Priority shall be reduced by an amount equal to eight percent (8%) of the net (after taking into account any costs paid by Manager) proceeds of sale received by Owner or Purchaser (or, in the case of such a rejection, eight percent (8%) of the projected net (after taking into account any costs to be paid by Manager) proceeds of sale which would have been received by Owner or Purchaser determined by reference to such Offer); and (iv) the Owner’s Second Priority shall be reduced by one half of one percent as provided in Section 2.6(c) (0.5%) Retained Hotels), calculated based upon the original cost to Owner of such net proceeds (orHotel after reduction for any amounts actually expended and any costs which would reasonably have been expected to have been expended if the sale had been consummated, in the case of a rejection, one half of one percent (0.5%) of or to treat such projected net proceedsHotel as an Unsold Hotel under Section 2.6(h)(Unsold Hotels).

Non-Economic Hotels. (a) Manager shall be entitled to designate as a Non-Economic Hotel any Hotel for which, in each of any three (3) consecutive full Fiscal Years during the Term, the Operating Profit is less than the sum of (i) amounts to be funded to the Reserve Account pursuant to Section SECTION 5.2(a) on account of such Hotel, plus (ii) Owner’s 's Fixed Priority attributable to such Hotel pursuant to Exhibit EXHIBIT C hereto; providedPROVIDED, howeverHOWEVER, that the number of Hotels designated as Non-Economic Hotels under this Agreement (other than those with respect to which such designation has been withdrawn or deemed withdrawn, but including those which have been sold pursuant to this Section SECTION 2.7) shall not exceed three (3). If subsequent to a Hotel being designated as a Non-Economic Hotel but prior to its sale pursuant to this Section SECTION 2.7, the Operating Profit of such Hotel for any Fiscal Year shall exceed the sum of amounts to be funded to the Reserve Account pursuant to Section SECTION 5.2(a) on account of such Hotel, plus the portion of the Owner’s 's Fixed Priority for such Fiscal Year so attributable to such Hotel, such designation shall be deemed withdrawn; provided, however, if Manager is then negotiating a sale of such Hotel to a third party, such designation shall not be deemed withdrawn for a period of three (3) months. (b) So long as there is no Manager Default or Manager Event of Default, Manager may market each Hotel that is a Non-Economic Hotel for sale. In addition, if Manager reasonably anticipates based on projections prepared in the ordinary course that a Hotel will become a Non-Economic Hotel within the next twelve (12) months, Manager may market such Hotel for sale; provided, however, no Hotel shall be sold pursuant to this Section SECTION 2.7 other than Non-Economic Hotels. If Manager receives an Offer, Manager shall give Owner and Purchaser notice thereof, which notice shall include a copy of the executed Offer. In the event that Owner and Purchaser shall fail to accept or reject such Offer within five (5) Business Days after receipt of such notice, such Offer shall be deemed to be rejected by them. Provided there is no Manager Default or Manager Event of Default, if Owner and Purchaser shall either sell such Non-Economic Hotel pursuant to such Offer or reject or be deemed to have rejected such Offer, then effective as of the date of such sale or, if the Offer was rejected or deemed rejected, the proposed date of sale contained in such Offer, as the case may be, the following shall apply: (i) the Term shall terminate with respect to such Non-Economic Hotel; (ii) no further Owner’s 's Percentage Priority shall accrue with respect to such Non-Economic Hotel’s 's Gross Revenues which accrue after such termination; (iii) the Owner’s 's First Priority shall be reduced by an amount equal to eight percent (8%) of the net (after taking into account any costs paid by Manager) proceeds of sale received by Owner or Purchaser (or, in the case of such a rejection, eight percent (8%) of the projected net (after taking into account any costs to be paid by Manager) proceeds of sale which would have been received by Owner or Purchaser determined by reference to such Offer); and (iv) the Owner’s 's Second Priority shall be reduced by one half of one percent (0.5%) of such net proceeds (or, in the case of a rejection, one half of one percent (0.5%) of such projected net proceeds).

Non-Economic Hotels. (a) Manager shall be entitled to designate as a Non-Economic Hotel any Hotel for which, in each of any three (3) consecutive full Fiscal Years during the Term, the Operating Profit is less than the sum of (i) amounts to be funded to the Reserve Account pursuant to Section 5.2(a) on account of such Hotel, plus (ii) Owner’s 's Fixed Priority attributable to such Hotel pursuant to Exhibit C hereto; provided, however, that the number of Hotels designated as Non-Economic Hotels under this Agreement (other than those with respect to which such designation has been withdrawn or deemed withdrawn, but including those which have been sold pursuant to this Section 2.7) shall not exceed three (3). If subsequent to a Hotel being designated as a Non-Economic Hotel but prior to its sale pursuant to this Section 2.7, the Operating Profit of such Hotel for any Fiscal Year shall exceed the sum of amounts to be funded to the Reserve Account pursuant to Section 5.2(a) on account of such Hotel, plus the portion of the Owner’s 's Fixed Priority for such Fiscal Year so attributable to such Hotel, such designation shall be deemed withdrawn; provided, however, if Manager is then negotiating a sale of such Hotel to a third third-party, such designation shall not be deemed withdrawn for a period of three (3) months. (b) So long as there is no Manager Default or Manager Event of Default, Manager may market each Hotel that is a Non-Economic Hotel for sale. In addition, if Manager reasonably anticipates based on projections prepared in the ordinary course that a Hotel will become a Non-Economic Hotel within the next twelve (12) months, Manager may market such Hotel for sale; provided, however, no Hotel shall be sold pursuant to this Section 2.7 other than Non-Economic Hotels. If Manager receives an Offer, Manager shall give Owner and Purchaser notice thereof, which notice shall include a copy of the executed Offer. In the event that Owner and Purchaser shall fail to accept or reject such Offer within five (5) Business Days after receipt of such notice, such Offer shall be deemed to be rejected by them. Provided there is no Manager Default or Manager Event of Default, if Owner and Purchaser shall either sell such Non-Economic Hotel pursuant to such Offer or reject or be deemed to have rejected such Offer, then effective as of the date of such sale or, if the Offer was rejected or deemed rejected, the proposed date of sale contained in such Offer, as the case may be, the following shall apply: (i) the Term shall terminate with respect to such Non-Economic Hotel; (ii) no further Owner’s Percentage Priority shall accrue with respect to such Non-Economic Hotel’s Gross Revenues which accrue after such termination; (iii) the Owner’s First Priority shall be reduced by an amount equal to eight percent (8%) of the net (after taking into account any costs paid by Manager) proceeds of sale received by Owner or Purchaser (or, in the case of such a rejection, eight percent (8%) of the projected net (after taking into account any costs to be paid by Manager) proceeds of sale which would have been received by Owner or Purchaser determined by reference to such Offer); and (iv) the Owner’s Second Priority shall be reduced by one half of one percent (0.5%) of such net proceeds (or, in the case of a rejection, one half of one percent (0.5%) of such projected net proceeds).2.7

Non-Economic Hotels. (a) Manager shall be entitled to designate as a Non-Economic Hotel any Hotel for which, in each of any three (3) consecutive full Fiscal Years during the TermTerm subsequent to the Parsippany Hotel Effective Date, the Operating Profit is less than the sum of (i) amounts to be funded to the Reserve Account pursuant to Section 5.2(a) on account of such Hotel, plus (ii) Owner’s Fixed Priority attributable to such Hotel pursuant to as set forth in Exhibit C hereto; provided, however, that the number of Hotels designated as Non-Economic Hotels under this Agreement (other than those with respect to which such designation has been withdrawn or deemed withdrawn, but including those which have been sold pursuant to this Section 2.72.12) shall not exceed three (3). If subsequent to a Hotel being designated as a Non-Economic Hotel but prior to its sale pursuant to this Section 2.72.12, the Operating Profit of such Hotel for any Fiscal Year shall exceed the sum of amounts to be funded to the Reserve Account pursuant to Section 5.2(a) on account of such Hotel, plus the portion of the Owner’s Fixed Priority for such Fiscal Year so attributable to such Hotel, such designation shall be deemed withdrawn; provided, however, if Manager is then negotiating a sale of such Hotel to a third third-party, such designation shall not be deemed withdrawn for a period of three (3) months. (b) So long as there is no Manager Default or Manager Event of Default, Manager may market each Hotel that is a Non-Economic Hotel for sale. In addition, if Manager reasonably anticipates based on projections prepared in the ordinary course that a Hotel will become a Non-Economic Hotel within the next twelve (12) months, Manager may market such Hotel for sale; provided, however, no Hotel shall be sold pursuant to this Section 2.7 2.12 other than Non-Economic Hotels. If Manager receives an Offeroffer, Manager shall give Owner and Purchaser notice thereof, which notice shall include a copy of the executed Offer. In the event that Owner and Purchaser shall fail to accept or reject such Offer within five (5) Business Days after receipt of such notice, such Offer shall be deemed to be rejected by them. Provided there is no Manager Default or Manager Event of Default, if Owner and Purchaser shall either sell such Non-Economic Hotel pursuant to such Manager’s Offer or reject or be deemed to have rejected such Manager’s Offer, then effective as of the date of such sale or, if the Manger’s Offer was rejected or deemed rejected, the proposed date of sale contained in such Manager’s Offer, as the case may be, the following shall apply: (i) the Term shall terminate with respect to such Non-Economic Hotel; (ii) no further Owner’s Percentage Priority shall accrue with respect to such Non-Economic Hotel’s Gross Revenues which accrue after such termination; and (iii) the Owner’s First Base Priority Amount shall be reduced by an amount equal to eight to: (x) for a Non-Economic Hotel that is an Initial Hotel, nine and twelve hundredths percent (89.12%) of the net (after taking into account any costs paid by Manager) proceeds of sale received by Owner or Purchaser (or, in the case of such a rejection, eight and sixty-two hundredths percent (8.62%) of the projected net (after taking into account any costs to be paid by Manager) proceeds of sale which would have been received by Owner or Purchaser determined by reference to such Offer), (y) for a Non-Economic Hotel that is an Expansion Hotel, eight and eighty-five hundredths percent (8.85%) of the net (after taking into account any costs paid by Manager) proceeds of sale received by Owner or Purchaser (or, in the case of such a rejection, eight and thirty-five hundredths percent (8.35%) of the projected net (after taking into account any costs to be paid by Manager) proceeds of sale which would have been received by Owner or Purchaser determined by reference to such Offer), and (z) if the Non-Economic Hotel is the Parsippany Hotel, eight and one half percent (8.5%) of the net (after taking into account any costs paid by Manager) proceeds of sale received by Owner or Purchaser (or, in the case of such a rejection, eight percent (8%) of the projected net (after taking into account any costs to be paid by Manager) proceeds of sale which would have been received by Owner or Purchaser determined by reference to such Offer); and (iv) the Owner’s Second Priority shall be reduced by one half of one percent (0.5%) of such net proceeds (or, in the case of a rejection, one half of one percent (0.5%) of such projected net proceeds).