Common use of Owner’s Performance Termination Rights Clause in Contracts

Owner’s Performance Termination Rights. (a) Owner shall have the right, subject to Manager’s rights to cure described below, to terminate this Agreement (without the payment of a Special Termination Fee) if, for any full Test Year following the second (2nd) full Test Year during the Operating Term hereof, the Hotel’s Net Operating Income is less than $1,380,000 (the “Net Operating Income Threshold”); provided, however, that Owner shall have such termination right only if the failure to achieve the Net Operating Income Threshold is not directly attributable to (x) an event constituting a Force Majeure and/or (y) any major renovation of the Hotel during such Test Year or during the last six months of the Test Year immediately preceding the applicable Test Year. The determination as to whether such test has been satisfied shall be made in accordance with the audited annual financial statements prepared and delivered pursuant to Section 8.3. Notwithstanding the foregoing, if the Initial Improvements are not completed on or before the first anniversary of the Effective Date, the commencement date for the foregoing performance test shall be extended by a period of time equal to that by which the date of completion of the Initial Improvements follows such first anniversary; provided, however, that if such extended commencement date (the “Extended Date”) is not the first day of a calendar month, the applicable extended commencement date shall be the first day of the calendar month next following the Extended Date. In case of any such extension, the “Test Year,” for purposes of this Section 17.2 only, shall mean each full twelve (12) month period commencing on such extended commencement date and each anniversary thereof, and Manager’s compliance with the performance test for any such pertinent period will be determined pursuant to the unaudited financial statements prepared for the Hotel pursuant to Section 8.2.

Owner’s Performance Termination Rights. (a) Owner shall have the right, subject to Manager’s rights to cure described below, to terminate this Agreement (without the payment of a Special Termination Fee) if, for any full Test Year following the second (2nd) full Test Year during the Operating Term hereof, the Hotel’s Net Operating Income is less than $1,380,000 1,200,000 (the “Net Operating Income Threshold”); provided, however, that Owner shall have such termination right only if the failure to achieve the Net Operating Income Threshold is not directly attributable to (x) an event constituting a Force Majeure and/or (y) any major renovation of the Hotel during such Test Year or during the last six months of the Test Year immediately preceding the applicable Test Year. The determination as to whether such test has been satisfied shall be made in accordance with the audited annual financial statements prepared and delivered pursuant to Section 8.3. Notwithstanding the foregoing, if the Initial Improvements are not completed on or before the first anniversary of the Effective Date, the commencement date for the foregoing performance test shall be extended by a period of time equal to that by which the date of completion of the Initial Improvements follows such first anniversary; provided, however, that if such extended commencement date (the “Extended Date”) is not the first day of a calendar month, the applicable extended commencement date shall be the first day of the calendar month next following the Extended Date. In case of any such extension, the “Test Year,” for purposes of this Section 17.2 only, shall mean each full twelve (12) month period commencing on such extended commencement date and each anniversary thereof, and Manager’s compliance with the performance test for any such pertinent period will be determined pursuant to the unaudited financial statements prepared for the Hotel pursuant to Section 8.2.

Owner’s Performance Termination Rights. (a) Owner shall have the right, subject to Manager’s rights to cure described below, to terminate this Agreement (without the payment of a Special Termination Fee) if, for any full Test Year following the second (2nd) full Test Year during the Operating Term hereof, the Hotel’s Net Operating Income is less than $1,380,000 1,500,000 (the “Net Operating Income Threshold”); provided, however, that Owner shall have such termination right only if the failure to achieve the Net Operating Income Threshold is not directly attributable to (x) an event constituting a Force Majeure and/or (y) any major renovation of the Hotel during such Test Year or during the last six months of the Test Year immediately preceding the applicable Test Year. The determination as to whether such test has been satisfied shall be made in accordance with the audited annual financial statements prepared and delivered pursuant to Section 8.3. Notwithstanding the foregoing, if the Initial Improvements are not completed on or before the first anniversary of the Effective Date, the commencement date for the foregoing performance test shall be extended by a period of time equal to that by which the date of completion of the Initial Improvements follows such first anniversary; provided, however, that if such extended commencement date (the “Extended Date”) is not the first day of a calendar month, the applicable extended commencement date shall be the first day of the calendar month next following the Extended Date. In case of any such extension, the “Test Year,” for purposes of this Section 17.2 only, shall mean each full twelve (12) month period commencing on such extended commencement date and each anniversary thereof, and Manager’s compliance with the performance test for any such pertinent period will be determined pursuant to the unaudited financial statements prepared for the Hotel pursuant to Section 8.2.