Common use of Performance Termination Clause in Contracts

Performance Termination. A. Subject to the provisions of Section 4.02B below, Owner shall have the option to terminate this Agreement with respect to all of the Hotels if the sum of the Operating Profit for all of the Hotels during any period consisting of three (3) consecutive Fiscal Years during the term of this Agreement (not including any period of time before the expiration of the 1992 Fiscal Year) does not equal or exceed eight percent (8%) of the sum total for the same three (3) Fiscal Years of (i) the original total cost ($169,818,182) of the Hotels, as adjusted for any Termination, added once for each of such three (3) Fiscal Years, plus (ii) the weighted average outstanding balance of Additional Hotel Investments with respect to the Hotels, added once for each of such three (3) Fiscal Years. Solely for purposes of the foregoing calculation, the term "Operating Profit" shall include the aggregate amount of any payments pursuant to Section 4.02B with respect to such Fiscal Years, with all such payments being applied first to the earliest Fiscal Year for which Operating Profit did not equal eight percent (8%) of such sum total for such Fiscal Year and then being applied to each successive Fiscal Year until the full amount has been applied (but no more than an amount equal to eight percent (8%) of such sum total for a Fiscal Year shall be applied to such Fiscal Year). Such option to terminate shall be exercised by serving written notice thereof on Management Company no later than sixty (60) days after the receipt by Owner of the annual accounting under Section 8.01 hereof for such third consecutive Fiscal Year. Such notice shall state the basis on which Owner asserts the right of termination and shall show all mathematical calculations constituting the basis therefor. If Management Company does not elect to avoid termination pursuant to Section 4.02B below, this Agreement shall terminate as of the end of the second full Accounting Period following the date on which Management Company receives Owner's written notice of its intent to terminate this Agreement. Owner's failure to exercise its right to terminate this Agreement pursuant to this Section 4.02A during any given Fiscal Year shall not be deemed an estoppel or waiver of Owner's right to terminate this Agreement as to subsequent Fiscal Years to which this Section may apply.

Performance Termination. A. Subject to the provisions of Section 4.02B 2.02.B below, Owner Primary Manager shall have the option to terminate this Agreement with Agreement, if: 1. With respect to all of the Hotels if the sum of the Operating Profit for all of the Hotels during any period consisting of three two (32) consecutive Fiscal Years during the term of this Agreement (not including within any period of time before the expiration of the 1992 Fiscal Year) does not equal or exceed eight percent (8%) of the sum total for the same three (3) Fiscal Years Year period (not including any portion of (i) any Fiscal Year prior to the original total cost ($169,818,182) expiration of the Hotels, as adjusted for any Termination, added once for first (1st) full Fiscal Year after the TakeOver Date) Operating Profit is less than the applicable Performance Termination Threshold; and 2. The Revenue Index of the Hotel during each of such Fiscal Years (i.e. any two (2) Fiscals Years within three (3) Fiscal Years, plus (iiYear period) is less than the weighted average outstanding balance of Additional Hotel Investments with respect to the Hotels, added once for each of such three (3) Fiscal Years. Solely for purposes of the foregoing calculation, the term "Operating Profit" shall include the aggregate amount of any payments pursuant to Section 4.02B with respect to such Fiscal Years, with all such payments being applied first to the earliest Fiscal Year for which Operating Profit did not equal eight percent (8%) of such sum total for such Fiscal Year and then being applied to each successive Fiscal Year until the full amount has been applied (but no more than an amount equal to eight percent (8%) of such sum total for a Fiscal Year shall be applied to such Fiscal Year). Such option to terminate shall be exercised by serving written notice thereof on Management Company no later than sixty (60) days after the receipt by Owner of the annual accounting under Section 8.01 hereof for such third consecutive Fiscal Year. Such notice shall state the basis on which Owner asserts the right of termination and shall show all mathematical calculations constituting the basis thereforRevenue Index Threshold. 1. If Management Company Submanager does not elect to avoid termination such Termination pursuant to Section 4.02B 2.02.B below, this Agreement shall terminate as of the end of the second fourth (4th) full Accounting Period following the date on which Management Company Submanager receives OwnerPrimary Manager's written notice of its intent to terminate this Agreement; provided that such period of time shall be extended as required by applicable Legal Requirements pertaining to the termination of the employment of the employees at the Hotel. OwnerPrimary Manager's failure to exercise its right to terminate this Agreement pursuant to this Section 4.02A during 2.02.A with respect to any given Fiscal Year shall not be deemed an estoppel or waiver of OwnerPrimary Manager's right to terminate this Agreement as with respect to subsequent Fiscal Years to which this Section 2.02.A may apply. B. Upon receipt of Primary Manager's written notice of Termination under Section 2.02.A, Submanager shall have the option, to be exercised within sixty (60) days after receipt of said notice, to avoid such Termination by electing (in a notice to Primary Manager) to waive the payment of the Base Management Fee and the payment of franchise fees under the Franchise Agreement (beginning as of the first day of the next full Accounting Period after the date of such notice from Submanager) until such time as the total cumulative amount (the "Cumulative Waived Base Fees") of such waived Base Management Fee and franchise fees equals the total amount (the "Cure Payment") by which Operating Profit for each of the Fiscal Years in question (i.e., the Fiscal Years referred to in Section 2.02.A.1) was less than the Performance Termination Threshold. [ In the case of the Houston, the following applies: Upon receipt of Primary Manager's written notice of Termination under Section 2.02.A, Submanager shall have the option, to be exercised within sixty (60) days after receipt of said notice, to avoid such Termination by electing (in a notice to Primary Manager) to pay an amount equal to the amount (the "Cure Payment") by which Operating Profit for each of the Fiscal Years in question (i.e., the Fiscal Years referred to in Section 2.02.A.1) was less than the Performance Termination Threshold, and shall pay the Cure Payment within thirty (30) days of providing such notice to Primary Manager.] In the event Submanager makes a Cure Payment pursuant to this Section 2.02.B, the Fiscal Years with respect to which such Cure Payment was made shall thereafter not be treated, for purposes of subsequent elections by Primary Manager pursuant to Section 2.02.A, as Fiscal Years in which the circumstances described in Section 2.02.A.1 have occurred. If Submanager exercises such option to make such Cure Payment, then the foregoing Primary Manager's election to terminate this Agreement under Section 2.02.A shall be canceled and of no force or effect with respect to the two (2) Fiscal Years in question, and this Agreement shall not terminate. Such cancellation, however, shall not affect the right of Primary Manager, as to each subsequent Fiscal Year to which Section 2.

Performance Termination. A. Subject to If the provisions of Section 4.02B below, Owner shall have the option to terminate this Agreement with respect to all of the Hotels if the sum average of the Operating Profit (computed for all purposes of this Section 4.03 only (a) by adding back thereto (i) any Impositions or (ii) any funds supplied by Tenant for Working Capital, Inventories, or Fixed Asset Supplies over and above Initial Working Capital pursuant to Section 7.01, or (iii) any taxes (including any penalties, fines, and interest added thereto) payable by or assessed against Landlord or Tenant related to Tenant's lease hereunder of the Hotels and the personal property located therein, but (b) with a deduction for the annual ground rent payable on all MI Ground Leases, whether paid or deferred) during any period consisting of three (3) consecutive Fiscal Years during the term of this Agreement (not including any period of time before the expiration of the 1992 Fiscal Year) does not fails to equal or exceed the lesser of (I) eight percent (8%) of the sum total for of the same three aggregate original costs incurred by Landlord with respect to purchase of the Hotels then subject to this Agreement and any subsequent expansions thereof, or (32) Fiscal Years the sum of (i) the original total cost ($169,818,182) average annual amount of the Hotels, as adjusted for any Termination, added once for each interest portion of such three (3) Fiscal Years, plus (ii) the weighted average outstanding balance of Additional Hotel Investments with respect to the Hotels, added once for each of such three (3) Fiscal Years. Solely for purposes of the foregoing calculation, the term "Operating Profit" shall include the aggregate amount of any payments pursuant to Section 4.02B Debt Service with respect to such Fiscal YearsYears plus (ii) $5 million, with all such payments being applied first Landlord shall, subject to the earliest Fiscal Year for which Operating Profit did not equal eight percent (8%) conditions of such sum total for such Fiscal Year and then being applied Section 4.03.B, have the option to each successive Fiscal Year until the full amount has been applied (but no more than an amount equal to eight percent (8%) of such sum total for a Fiscal Year shall be applied to such Fiscal Year)terminate this Agreement. Such option to terminate shall may be exercised by serving written notice thereof on Management Company no of Landlord's election to terminate this Agreement upon Tenant not later than sixty ninety (6090) days after the receipt by Owner of the annual accounting under Section 8.01 hereof Annual Operating Statement for such third consecutive Fiscal Year. Such notice shall state the basis on which Owner Landlord asserts the right of termination and shall show all mathematical calculations constituting the basis therefor. B. Upon receipt of Landlord's written notice of termination under Section 4.03.A, Tenant shall have the option, to be exercised within thirty (30) days after receipt of said notice, to pay to Landlord the amount of any deficiency described in clauses (1) and (2) of Section 4.03.A and which constituted the basis of said notice. If Management Company Tenant does not elect exercise its option to avoid termination pursuant to make the payment permitted by this Section 4.02B below4.03.B, then this Agreement shall terminate as of the end of the second third (3rd) full Accounting Period following the date on which Management Company Tenant receives OwnerLandlord's written notice of its intent termination under Section 4.03.A; provided, however, that such period of time shall be extended as required by applicable law pertaining to terminate this Agreement. Owner's failure the termination of the employment of the employees at the Hotels either for the minimum period required by law in order not to exercise its right to terminate this Agreement pursuant to this Section 4.02A during any given Fiscal Year shall not be deemed an estoppel in violation thereof or waiver of Owner's right to terminate this Agreement for such lesser period as to subsequent Fiscal Years to which this Section may applybe permitted if certain payments are made (but only if such payments are made by Landlord).

Performance Termination. A. Subject to the provisions of Section 4.02B 4.02 B below, Owner Lessee shall have the option to terminate this Agreement with respect to all of the Hotels Inns if the sum of the Operating Profit (computed, for purposes of this Section 4.02 only, without deducting Base Management Fees) for all of the Hotels Inns during any period consisting of three two (32) consecutive Fiscal Years during the term of this Agreement (not including any period of time before the expiration of the 1992 1999 Fiscal Year) does not equal or exceed the sum total of (i) the Operating Profit Goal, added once for each of such two (2) Fiscal Years (but to be prorated for any partial Fiscal Year), and (ii) eight percent (8%) of the sum total for the same three (3) Fiscal Years weighted average outstanding balance of (i) the original total cost ($169,818,182) of the Hotels, as adjusted for any TerminationAdditional Inn Investments, added once for each of such three two (32) Fiscal Years, plus Years (ii) the weighted average outstanding balance but to be prorated for any lesser period of Additional Hotel Investments with respect to the Hotels, added once for each of such three (3) Fiscal Years. Solely for purposes of the foregoing calculation, the term "Operating Profit" shall include the aggregate amount of any payments pursuant to Section 4.02B with respect to such Fiscal Years, with all such payments being applied first to the earliest Fiscal Year time for which Operating Profit did not equal eight percent (8%) of such sum total for such Fiscal Year and then being applied to each successive Fiscal Year until the full amount has been applied (but no more than an amount equal to eight percent (8%) of such sum total for a Fiscal Year shall be applied to such Fiscal YearAdditional Inn Investments were made). Such option to terminate shall be exercised by serving written notice thereof on Management Company Manager no later than sixty (60) days after the receipt by Owner Lessee of the annual accounting under Section 8.01 hereof for such third second consecutive Fiscal Year. Such notice shall state the basis on which Owner Lessee asserts the right of termination and shall show all mathematical calculations constituting the basis therefor. If Management Company Manager does not elect to avoid termination pursuant to Section 4.02B 4.02 B below, this Agreement shall terminate as of the end of the second first full Accounting Period following the date on which Management Company receives OwnerManager's written notice of its intent option to terminate this Agreement. Owneravoid such termination expires pursuant to Section 4.02 B. Lessee's failure to exercise its right to terminate this Agreement pursuant to this Section 4.02A 4.02 A during any given Fiscal Year shall not be deemed an estoppel or waiver of OwnerLessee's right to terminate this Agreement as to subsequent Fiscal Years to which this Section may apply. In the event Lessee or Lessor refinances fewer than all of the Inns or refinances all of the Inns pursuant to more than one financing transaction and calculations of various items under this Agreement are adjusted pursuant to Section 18.04 and Lessee and Manager enter into one or more new management agreements covering the Inns being refinanced in accordance with Section 18.04, then, notwithstanding the provisions of Section 18.04, the calculation for determining whether Lessee has a right to terminate this Agreement as set forth above in this Section 4.02 A and the amount of deficiency to be advanced by Manager under Section 4.02 B to avoid termination shall be made as if all of the Inns were still covered by this Agreement and no adjustments had been made. B. Upon receipt of Lessee's written notice of termination under Section 4.02 A, Manager shall have the option, to be exercised within sixty (60) days after receipt of said notice, to avoid such termination by advancing to Lessee the amount of any deficiency described in Section 4.02 A. If Manager exercises such option, then the foregoing Lessee's election to terminate this Agreement under Section 4.02 A shall be canceled and of no force or effect and this Agreement shall not terminate. Such cancellation, however, shall not affect the right of Lessee, as to each subsequent Fiscal Year to which Section 4.02 A applies, to again elect to terminate this Agreement pursuant to the provisions of Section 4.02 A (which subsequent election shall again be subject to

Performance Termination. A. Subject to the provisions of Section 4.02B 4.03 B below, Owner shall have the option to terminate this Agreement with if: 1. With respect to all each of the Hotels if the sum of the Operating Profit for all of the Hotels during any period consisting of three two (32) consecutive Fiscal Years during the term of this Agreement (not including any period of time before the expiration of the 1992 Term commencing with Fiscal Year) does not equal or exceed Year 2004, Operating Profit is less than eight percent (8%) of the sum total for Owner's Investment (the same three (3) Fiscal Years "Threshold Amount"); and 2. The fact that the Retirement Community is not meeting the test set forth in Section 4.03A1 is not the result of either: (i) the original total cost ($169,818,182) of the Hotels, as adjusted for any Termination, added once for each of such three (3) Fiscal Years, plus a Force Majeure; or (ii) the weighted average outstanding balance of Additional Hotel Investments with respect to the Hotels, added once for each of such three (3) Fiscal Years. Solely for purposes any major renovation of the foregoing calculation, the term "Operating Profit" shall include the aggregate amount of any payments pursuant to Section 4.02B with respect to such Fiscal Years, with all such payments being applied first to the earliest Fiscal Year for which Operating Profit did not equal eight percent (8%) of such sum total for such Fiscal Year and then being applied to each successive Fiscal Year until the full amount has been applied (but no more than an amount equal to eight percent (8%) of such sum total for a Fiscal Year shall be applied to such Fiscal Year). Retirement Community. B. Such option to terminate shall be exercised by serving written notice thereof on Management Company Operator no later than sixty (60) days Days after the receipt by Owner of the annual accounting under Annual Financial Report for the second (2nd) of the two (2) Fiscal Years referred to in Section 8.01 hereof for such third consecutive Fiscal Year. Such notice shall state the basis on which Owner asserts the right of termination and shall show all mathematical calculations constituting the basis therefor4.03A1. If Management Company Operator does not elect to avoid termination such Termination pursuant to Section 4.02B 4.03B below, this Agreement shall terminate as of the end of the second fourth (4th) full Accounting Period following the date on which Management Company Operator receives Owner's written notice of its intent to terminate this Agreement; provided that such period of time shall be extended as required by applicable Legal Requirements pertaining to the termination of the employment of the employees at the Retirement Community. Owner's failure to exercise its right to terminate this Agreement pursuant to this Section 4.02A during 4.03A with respect to any given Fiscal Year shall not be deemed an estoppel or waiver of Owner's right to terminate this Agreement as with respect to subsequent Fiscal Years to which this Section 4.03A may apply. 1. Upon receipt of a written notice of Termination sent by Owner to Operator pursuant to Section 4.03B, Operator shall have the option, to be exercised by written notice (the "Cure Notice") to Owner within sixty (60) Days after receipt of said Termination notice from Owner, to avoid such Termination by electing either (i) to pay to Owner an amount equal to the difference between the Threshold Amount for the two consecutive Fiscal Years that gave rise to the Cure Notice and the Operating Profit for the same two consecutive Fiscal Years (the "Shortfall Payment"), or (ii) to reduce the Base Fee payable to Operator pursuant to Section 5.01B during the two (2) full Fiscal Years immediately following the two (2) Fiscal Years referred to in Section 4.03A1 from five percent (5%) of Gross Revenues to two percent (2%) of Gross Revenues. In the event Operator elects to avoid such Termination by sending to Owner a Cure Notice, the two consecutive Fiscal Years referred to in Section 4.03A1 with respect to which such election was made shall thereafter not be treated, for purposes of subsequent elections by Owner pursuant to Section 4.03A, as Fiscal Years in which the circumstances described in Section 4.03A1 have occurred. If Operator exercises such option to send to Owner a Cure Notice, then any Owner's election to terminate this Agreement under Section 4.03 shall be canceled and of no force or effect and this Agreement shall not terminate. The preceding sentence, however, shall not affect the right of Owner, as to each subsequent Fiscal Year to which Section 4.03A applies, to again elect to terminate this Agreement, pursuant to the provisions of Section 4.

Performance Termination. A. Subject to (a) Beginning on January 1, 2002, and continuing for the provisions remainder of Section 4.02B belowthe Term, Owner shall have the option right to terminate this Agreement with respect to all if Net Operating Income for the immediately preceding Fiscal Year does not equal or exceed 90% of the Hotels if budgeted Net Operating Income for such Fiscal Year, as determined pursuant to the sum budgetary process described in Article 8. Owner may exercise such right to terminate this Agreement, without incurring a termination fee or penalty, by giving written notice to Manager within 90 days after receiving the annual financial statement for such Fiscal Year pursuant to Article 8.01. Such performance termination notice shall specify the effective date of such termination which shall not be less than 90 days from the date of such performance termination notice. (b) Notwithstanding anything to the contrary in the foregoing, in the event that Owner is entitled to provide, and does provide, Manager with timely notice of termination of this Agreement pursuant to Article 3.04(a), Manager may elect, but shall not be obligated, to nullify such termination notice and the termination of this Agreement based thereon, by funding to Owner, within thirty (30) days after receipt of Owner's performance termination notice, an amount equal to the amount by which the actual Net Operating Income for the applicable Fiscal Year was less than 90% of the budgeted Net Operating Profit Income for all such Fiscal Year, as determined pursuant to the budgetary process described in Article 8. If Manager exercises this Net Operating Income shortfall cure right, Owner's performance termination notice shall be nullified and of no force and effect, and this Agreement shall remain in full force and effect and the Hotels Fiscal Year in question shall be deemed not to be a Fiscal Year in which there occurred a shortfall in Net Operating Income which would give rise to Owner's termination right under this Article 3.04. Manager shall be entitled to exercise this cure right any number of times during any period consisting of three (3) the Term; provided, however, Manager may not exercise this cure right for more than 2 consecutive Fiscal Years during the term of this Agreement Term. (not including any period of time before the expiration of the 1992 Fiscal Yearc) does not equal or exceed eight percent (8%) of the sum total for the same three (3) Fiscal Years of (i) the original total cost ($169,818,182) of the Hotels, as adjusted for any Termination, added once for each of such three (3) Fiscal Years, plus (ii) the weighted average outstanding balance of Additional Hotel Investments with respect Notwithstanding anything to the Hotelscontrary contained herein, added once for each of such three (3) Fiscal Years. Solely for purposes of the foregoing calculation, the term "Operating Profit" shall include the aggregate amount of any payments pursuant to Section 4.02B with respect to such Fiscal Years, with all such payments being applied first to the earliest Fiscal Year for which Operating Profit did not equal eight percent (8%) of such sum total for such Fiscal Year and then being applied to each successive Fiscal Year until the full amount has been applied (but no more than an amount equal to eight percent (8%) of such sum total for a Fiscal Year shall be applied to such Fiscal Year). Such option to terminate shall be exercised by serving written notice thereof on Management Company no later than sixty (60) days after the receipt by Owner of the annual accounting under Section 8.01 hereof for such third consecutive Fiscal Year. Such notice shall state the basis on which Owner asserts the right of termination and shall show all mathematical calculations constituting the basis therefor. If Management Company does not elect to avoid termination pursuant to Section 4.02B below, this Agreement shall terminate as of the end of the second full Accounting Period following the date on which Management Company receives Owner's written notice of its intent to terminate this Agreement. Owner's failure to exercise its right to terminate this Agreement pursuant to this Section 4.02A during any given Fiscal Year shall not be deemed an estoppel or waiver of Owner's right to terminate this Agreement under Article 3.04(a) (and the amount of any shortfall to be paid by Manager in the event Manager exercises its cure right pursuant to Article 3.04(b)) shall be eliminated, or reduced, as applicable, to subsequent Fiscal Years the extent that the shortfall in Net Operating Income is attributable to (i) force majeure events as described in Article 21 or (ii) increases in utility rates and/or premiums for insurance which Manager is responsible to obtain under Exhibit E, in each case that could not have been reasonably anticipated by Manager in connection with the submission of the Annual Business Plan. Any disputes concerning the applicability of this Section Article 3.04(c) shall be resolved pursuant to the arbitration procedure described in Article 22, and the time period governing any Owner termination right or Manager cure right shall be extended for a reasonable period of time (not exceeding 180 days) pending such resolution. (d) Owner and Manager have agreed upon the Hotel's current Competitive Set and the Hotel's current Yield Index (as reported in the "Star Report" published by Xxxxx Travel Research) versus such Competitive Set ("Base Yield Index"), all as set forth on Exhibit 1. As a part of the budgetary process described in Article 8, Owner and Manager shall review such Competitive Set annually and in good faith agree upon any additions to or deletions from such Competitive Set and, if necessary, adjust the Base Yield Index versus such Competitive Set to reflect any additions thereto or deletions therefrom. (e) Beginning on the later of (i) January 1, 2002, and (ii) the date upon which Owner has borrowed the full amount of the then "Commitment" under the Revolving Credit Agreement, and continuing for the remainder of the Term, Owner shall have the right to terminate this Agreement if, during each of the two immediately preceding fiscal years, the Hotel's Yield Index (as reported in the "Star Report" published by Xxxxx Travel Research) versus its Competitive Set is below the agreed upon Base Yield Index of the Hotel for each of the applicable years. Owner may applyexercise such right to terminate this Agreement, without incurring a termination fee or penalty, by giving written notice to Manager within ninety (90) days after information regarding the Yield Index of the hotels within the Competitive Set is published by Xxxxx Travel Research and provided to Owner by Manager. Such performance termination notice shall specify the effective date of such termination, which shall not be less than ninety (90) days from the date of such performance termination notice.

Performance Termination. A. Subject to the provisions of Section 4.02B 4.02.B below, Owner shall have the option to terminate this Agreement with respect to all of the Hotels Inns if the sum average of the Operating Profit (computed, for purposes of this Section 4.02.A only, without deducting any Impositions) for all of the Hotels Inns during any period consisting of three (3) consecutive Fiscal Years during the term of this Agreement (not including any period of time before the expiration of the 1992 Fiscal Year) does not equal or exceed eight percent (8%) of the sum total for the same three (3) Fiscal Years of (i) the original total cost ($169,818,182) of the HotelsTotal Original Cost, as adjusted for any Termination, added once for each of such three (3) Fiscal Years, plus and (ii) the weighted average outstanding balance of any Additional Hotel Inn Investments previously made with respect to the Hotels, added once for each of such three (3) Fiscal Years. Solely for purposes of Inns that were subject to this Agreement during the foregoing calculation, the term "Operating Profit" shall include the aggregate amount of any payments pursuant to Section 4.02B with respect to such Fiscal Years, with all such payments being applied first to the earliest Fiscal Year for which Operating Profit did not equal eight percent (8%) of such sum total for such Fiscal Year and then being applied to each successive Fiscal Year until the full amount has been applied (but no more than an amount equal to eight percent (8%) of such sum total for a Fiscal Year shall be applied to such Fiscal Year)relevant periods. Such option to terminate shall be exercised by serving written notice thereof on Management Company Manager no later than sixty (60) days after the receipt by Owner of the annual accounting under Section 8.01 hereof for such third consecutive Fiscal Year. Such notice shall state the basis on which Owner asserts the right of termination and shall show all mathematical calculations constituting the basis therefor. If Management Company Manager does not elect to avoid termination pursuant to Section 4.02B 4.02.B below, this Agreement shall terminate as of the end of the second full Accounting Period following the date on which Management Company Manager receives Owner's written notice of its intent to terminate this Agreement. Owner's failure to exercise its right to terminate this Agreement pursuant to this Section 4.02A 4.02.A during any given Fiscal Year shall not be deemed an estoppel or waiver of Owner's right to terminate this Agreement as to subsequent Fiscal Years to which this Section may apply. B. Upon receipt of Owner's written notice of termination under Section 4.02.A, Manager shall have the option, to be exercised within sixty (60) days after receipt of said notice, to avoid such termination by advancing to Owner the amount of any deficiency described in Section 4.02.A. If Manager exercises such option, then the foregoing Owner's election to terminate this Agreement under Section 4.02.A shall be canceled and of no force or effect and this Agreement shall not terminate. Such cancellation, however, shall not affect the right of Owner, as to each subsequent Fiscal Year to which Section 4.

Performance Termination. A. Subject to the provisions of Section 4.02B below, Owner 8.1 Lessee shall have the option to terminate this Agreement all of the Operating Agreements (as a complete group with respect to all of the Hotels if Leased Properties), subject to this Article VIII, if: (a) With respect to any full Fiscal Year commencing after the sum date of this Agreement, the Aggregate Operating Profit for all of is less than the Hotels during any period consisting of three (3) consecutive Fiscal Years during the term of this Agreement (not including any period of time before the expiration of the 1992 Fiscal Year) does not equal or exceed eight percent (8%) of the sum total for the same three (3) Fiscal Years of (i) the original total cost ($169,818,182) of the Hotels, as adjusted for any Termination, added once for each of such three (3) Fiscal Years, plus (ii) the weighted average outstanding balance of Additional Hotel Investments with respect to the Hotels, added once for each of such three (3) Fiscal Years. Solely for purposes of the foregoing calculation, the term "Operating Profit" shall include the aggregate amount of any payments pursuant to Section 4.02B with respect to such Fiscal Years, with all such payments being applied first to the earliest Fiscal Year for which Operating Profit did not equal eight percent (8%) of such sum total First-Tier Minimum Rent due for such Fiscal Year and then being applied to each successive (the "First-Tier Performance Threshold"); (b) Aggregate Operating Profit for any two consecutive, full Fiscal Year until the full amount has been applied (but no more Years is less than an amount equal to eight percent (8%) of such sum total for a Fiscal Year shall be the following percentage applied to such Lessee's Investment Basis (as defined in the Operating Agreements), together with the Lessee's Additional Investment (as defined in the Operating Agreements): (i) 8.0% with respect to Fiscal YearYears 2003 and 2004, (i) 8.5% with respect to Fiscal Years 2005 through 2007, (i) 9.0% with respect to Fiscal Years 2008 and following (the "Second-Tier Performance Threshold"). Such ; provided, however, Lessee shall not have the option to terminate the Operating Agreements, if the First-Tier Performance Threshold or the Second-Tier Performance Threshold is not satisfied as a result of (i) Force Majeure affecting one or more of the Leased Properties; or (ii) major renovation to any Leased Property(ies) that materially and adversely affects the operation of such Leased Property(ies); or (iii) any default by Lessee under this Agreement, the Operating Agreements or any of the Operative Documents. Provided, further, that Lessee shall not have the option to terminate the Operating Agreements following Fiscal Years 2004 and 2005, in the event that the Second-Tier Performance Threshold would be exercised satisfied by serving written excluding that portion of the Aggregate Operating Profit, Lessee's Investment Basis (as defined in the Operating Agreements), and Lessee's Additional Investment (as defined in the Operating Agreements) allocable to the Brighton Gardens of Naples, Florida Leased Property and the Brighton Gardens of Venice, Florida Leased Property. Section 8.2 Lessee shall have the right to exercise its option under Section 8.1 by giving Operator notice thereof on Management Company no later than sixty of such exercise within ninety (6090) days after the of Lessee's receipt by Owner of the annual accounting under Section 8.01 hereof Annual Financial Report (as defined in the Operating Agreements) for such third consecutive the Fiscal YearYear(s) in question. Such notice shall state the basis on which Owner asserts the right of termination and shall show all mathematical calculations constituting the basis therefor. If Management Company does not elect to avoid termination pursuant to Section 4.02B below, this Agreement shall terminate as of the end of the second full Accounting Period following the date on which Management Company receives Owner's written notice of its intent to terminate this Agreement. OwnerLessee's failure to exercise its right option under Section 8.1 with respect to terminate this Agreement pursuant to this Section 4.02A during any given two (2) consecutive Fiscal Year Years in which the Second-Tier Performance Threshold is not satisfied shall not be deemed an estoppel or waiver of OwnerLessee's right to exercise its option under Section 8.1 for the Second-Tier Performance Threshold with respect to the second of such two (2) Fiscal Years and the immediately following Fiscal Year. Section 8.3 Upon receipt of a notice of exercise sent by Lessee to Operator pursuant to Section 8.2, Operator may avoid termination of the Operating Agreements by delivering to Lessee the Shortfall Payment within thirty (30) days after receiving such notice. For purposes of this Agreement, the "Shortfall Payment" shall mean: (i) with respect to any failure to satisfy the First-Tier Performance Threshold, an amount by which Aggregate Operating Profit for the applicable Fiscal Year is less than the First-Tier Performance Threshold for such Fiscal Year, or (ii) with respect to any failure to satisfy the Second-Tier Performance Threshold, an amount by which Aggregate Operating Profit for the applicable two (2) Fiscal Years is less than the Second-Tier Performance Threshold for such two (2) Fiscal Years. Under no circumstances shall Lessee be obligated to repay or reimburse Operator for any Shortfall Payment, and the Shortfall Payment shall not be characterized as a loan. In the event Operator delivers the Shortfall Payment, then any exercise by Lessee of an option to terminate this Agreement pursuant to Section 8.1 shall be canceled and of no force or effect with respect to the Fiscal Year(s) in question and the Operating Agreements shall not terminate; provided, however, Lessee's option to terminate the Operating Agreements under Section 8.1 shall remain in effect as to subsequent Fiscal Years Years. In the event Operator makes a Shortfall Payment pursuant to this Section 8.3, the Fiscal Year(s) with respect to which this Section may applysuch Shortfall Payment are made shall thereafter not be treated as Fiscal Year(s) in which the First-Tier Performance Threshold or the Second-Tier Performance Threshold is not satisfied. Operator shall have the right to make a Shortfall Payment (i) on unlimited occasions with respect to the First-Tier Performance Threshold, (ii) on only two (2) occasions during the Initial Term of the Operating Agreements (as defined therein) with respect to the Second-Tier Performance Threshold, and (iii) only one (i) occasion during each of the Extended Terms, if any, under the Operating Agreements (as defined therein) with respect to the Second-Tier Performance Threshold.

Performance Termination. A. Subject to the provisions of Section 4.02B 4.03 B below, Owner shall have the option to terminate this Agreement with if: 1. With respect to all each of the Hotels if the sum of the Operating Profit for all of the Hotels during any period consisting of three two (32) consecutive Fiscal Years during the term of this Agreement (not including any period of time before the expiration of the 1992 Term commencing with Fiscal Year) does not equal or exceed Year 2000, Operating Profit is less than eight percent (8%) of the sum total for Owner's Investment (the same three (3) Fiscal Years "Threshold Amount"); and 2. The fact that the Retirement Community is not meeting the test set forth in Section 4.03A1 is not the result of either: (i) the original total cost ($169,818,182) of the Hotels, as adjusted for any Termination, added once for each of such three (3) Fiscal Years, plus a Force Majeure; or (ii) the weighted average outstanding balance of Additional Hotel Investments with respect to the Hotels, added once for each of such three (3) Fiscal Years. Solely for purposes any major renovation of the foregoing calculation, the term "Operating Profit" shall include the aggregate amount of any payments pursuant to Section 4.02B with respect to such Fiscal Years, with all such payments being applied first to the earliest Fiscal Year for which Operating Profit did not equal eight percent (8%) of such sum total for such Fiscal Year and then being applied to each successive Fiscal Year until the full amount has been applied (but no more than an amount equal to eight percent (8%) of such sum total for a Fiscal Year shall be applied to such Fiscal Year). Retirement Community. B. Such option to terminate shall be exercised by serving written notice thereof on Management Company Operator no later than sixty (60) days Days after the receipt by Owner of the annual accounting under Annual Financial Report for the second (2nd) of the two (2) Fiscal Years referred to in Section 8.01 hereof for such third consecutive Fiscal Year. Such notice shall state the basis on which Owner asserts the right of termination and shall show all mathematical calculations constituting the basis therefor4.03A1. If Management Company Operator does -------------------------------------------------------------------------------- OPERATING AGREEMENT PAGE 25 not elect to avoid termination such Termination pursuant to Section 4.02B 4.03B below, this Agreement shall terminate as of the end of the second fourth (4th) full Accounting Period following the date on which Management Company Operator receives Owner's written notice of its intent to terminate this Agreement; provided that such period of time shall be extended as required by applicable Legal Requirements pertaining to the termination of the employment of the employees at the Retirement Community. Owner's failure to exercise its right to terminate this Agreement pursuant to this Section 4.02A during 4.03A with respect to any given Fiscal Year shall not be deemed an estoppel or waiver of Owner's right to terminate this Agreement as with respect to subsequent Fiscal Years to which this Section 4.03A may apply. 1. Upon receipt of a written notice of Termination sent by Owner to Operator pursuant to Section 4.03B, Operator shall have the option, to be exercised by written notice (the "Cure Notice") to Owner within sixty (60) Days after receipt of said Termination notice from Owner, to avoid such Termination by electing either (i) to pay to Owner an amount equal to the difference between the Threshold Amount for the two consecutive Fiscal Years that gave rise to the Cure Notice and the Operating Profit for the same two consecutive Fiscal Years (the "Shortfall Payment"), or (ii) to reduce the Base Fee payable to Operator pursuant to Section 5.01B during the two (2) full Fiscal Years immediately following the two (2) Fiscal Years referred to in Section 4.03A1 from five percent (5%) of Gross Revenues to two percent (2%) of Gross Revenues. In the event Operator elects to avoid such Termination by sending to Owner a Cure Notice, the two consecutive Fiscal Years referred to in Section 4.03A1 with respect to which such election was made shall thereafter not be treated, for purposes of subsequent elections by Owner pursuant to Section 4.03A, as Fiscal Years in which the circumstances described in Section 4.03A1 have occurred. If Operator exercises such option to send to Owner a Cure Notice, then any Owner's election to terminate this Agreement under Section 4.03 shall be canceled and of no force or effect and this Agreement shall not terminate. The preceding sentence, however, shall not affect the right of Owner, as to each subsequent Fiscal Year to which Section 4.03A applies, to again elect to terminate this Agreement, pursuant to the provisions of Section 4.