Common use of PIP Work Clause in Contracts

PIP Work. Franchisors of certain of the Properties have or are expected to issue New PIPs in connection with the Merger Transaction. Parent shall be responsible for (i) Costs of New PIP Work required pursuant to the New PIPs and (ii) the costs of completing the existing requirements of the applicable Franchisor of the Atlanta Marriott Century Center (the “Costs of the Atlanta Work”) (together, the Costs of New PIP Work and the Costs of the Atlanta Work, are referred to as the “Costs of Post-closing PIP Work”); provided, however, that in connection therewith, the RLJ REITs shall give a credit in the amount of Five Million Dollars ($5,000,000) to Parent against the Company Merger Consideration at Closing (i.e., the Company Merger Consideration shall be reduced by Five Million Dollars ($5,000,000)). All additional Costs of Post-closing PIP Work shall be borne by Parent. For purposes of this Section 3.10, “Costs of New PIP Work” shall mean the costs of installing all of the improvements required by the New PIPs regardless of the date when installation thereof is required. Except as otherwise provided in this Section 3.10, the RLJ REITs shall be responsible for causing the completion of any work currently required pursuant to existing PIPs, provided that if any such work is not completed by the Closing Date, the RLJ REITs shall give Parent a credit in the amount of the cost of completing the uncompleted existing PIP work, such cost to be determined in good faith by mutual agreement of Parent and the Company Parties prior to the Closing Date, based upon such reasonable construction estimates as the parties may obtain from qualified contractors.