Common use of Performance Termination Clause in Contracts

Performance Termination. (a) Beginning with the Fiscal Year starting January 1, 2003, and so long as Owner is not in default of its obligations under this Agreement, including without limitation, funding of all necessary Capital Replacements under Article 6 of this Agreement, Owner may terminate this Agreement without payment of the Termination Fee described in Section 8.03 upon ninety (90) days prior written notice to Manager (such notice to be sent to Manager within thirty (30) days of Owner’s receipt of the final operating statement for such Fiscal Year) if, following the end of any Fiscal Year, the Hotel’s actual Gross Operating Profit for such Fiscal Year is less than ninety percent (90%) of budgeted Gross Operating Profit as determined pursuant to the Yearly Budget for such Fiscal Year (the “Performance Test”). (b) Notwithstanding subsection (a) above, Owner shall not be entitled to exercise such termination right if, within sixty (60) days following Manager’s receipt of Owner’s written notice of termination, Manager cures such failure by paying into the Bank Account the shortfall between the Hotel’s actual Gross Operating Profit and budgeted Gross Operating Profit (as determined pursuant to the Yearly Budget) for such Fiscal Year. Thereafter, such Fiscal Year shall not count toward any future Performance Test measure. However, in no event shall Manager have the right to cure a failure of the Performance Test for more than one (1) period of two (2) consecutive Fiscal Years. (c) Notwithstanding subsection (a) above, Owner and Manager agree that the Performance Test shall be waived in any Fiscal Year that (i) force majeure resulted in a failure of the Performance Test, or (ii) a major renovation to the Hotel costing at least $2,000,000.00 resulted in a failure of the Performance Test.