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EXHIBIT 3.2
SIGNATURE INNS, INC.
MANAGEMENT AGREEMENT
THIS AGREEMENT is made at Indianapolis, Indiana this 2nd day of
January, 1991, by and between SIGNATURE INNS, INC., an Indiana corporation
("Operator") and Signature I Ltd. Limited Partnership ("Owner").
WHEREAS, Operator is the owner of a Signature Inn Motel located at 0000
Xxxx Xxxxxxxxxx Xxxxxx Xxxx, Xxxx Xxxxx, Xxxxxxx 00000 (the "Motel"), and
WHEREAS, Operator is engaged in the business of operating Signature
Inn Motels; and
WHEREAS, Owner desires to employ Operator to provide management
services in connection with the operation and management of the Motel and
related facilities for the account of Owner in a manner as is customary and
usual in the operation of comparable facilities, and so far as is economically
and legally possible, in accordance with the same procedures, practices,
management techniques and other rules of operation used by similar Motels; and
WHEREAS, Operator desires to accept such employment:
NOW, THEREFORE, in consideration of the mutual promises and convenants
contained herein, the parties agree as follows:
ARTICLE I
APPOINTMENT OF OPERATOR
Owner hereby appoints and employs Operator and grants to Operator the
sole and exclusive right to manage and operate the Motel, and Operator hereby
accepts such appointment and agrees during the term of this Agreement to
supervise, direct and control the management and operation of the Motel upon the
terms and conditions set forth in this Agreement.
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ARTICLE II
DUTIES AND SERVICES OF OPERATOR
In connection with its operation and management of the Motel, Operator
shall have the following duties and shall render the following services AT THE
OWNER'S SOLE COST AND EXPENSE:
(a) Operator shall select, supervise, direct, train and assign the
dates of and terminate all employees, agents and contractors employed by the
Owner of similar persons engaged by Owner in the operation of the motel. The
terms of employment, rates of compensation and all other matters relating to
employment of such personnel by Owner shall he determined and controlled solely
by Operator. However, it is expressly understood and agreed that, except for the
Motel General Manager and the Motel Assistant Manager who shall be employees of
Operator, all such personnel shall be employees of and shall he paid by Owner.
Owner shall not interfere with or give orders or instructions relating to the
operations of the Motel to any such personnel,
(b) Operator shall pay the salary of its own employees who are engaged
in the performance of duties imposed under this Agreement; provided, however,
that Owner shall reimburse Operator for all costs associated with Operator's
employment of the Motel General Manager or Motel Assistant Manager, including
without implied limitation, salary, bonuses, if any, insurance benefits, pension
and profit sharing contributions, sick and vacation pay and incidental benefits.
(c) Subject to the foregoing, the costs, fees, compensations, traveling
expenses or other related expenses of persons engaged by Owner or Operator for
the benefit of Owner to perform duties directly related to the operation of the
Motel of any nature shall be paid by Owner and shall be charged as an operating
expense of the Motel within an approved budget.
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Everything done by Operator in the performance of its obligations under this
Agreement and all its expenses incurred shall be for and on behalf of Owner and
for Owner and for Owner's account, subject to the limitations set forth herein,
and Owner agrees to reimburse Operator for all such expenses paid or incurred
shall be for and on behalf of Owner and for Owner's account, subject to the
limitations set forth herein, and owner agrees to reimburse Operator for all
such expenses paid or incurred by Operator's employees or other persons while
engaged in the performance of Services under this Agreement, including
incidental expenses.
(d) Operator shall establish all prices, price schedules, rates and
rate schedules.
(e) Operator shall apply for, obtain and maintain in the name and at
the expense of Owner, all Licenses and permits required of Owner or Operator in
connection with the management and operation at the Motel. Owner agrees to
execute and deliver any and all applications and other documents necessary
therefore and to cooperate to the fullest extent possible with Operator in the
performance of said obligations.
(f) Operator may obtain and/or grant such concessions and privileges
including, but not limited to, vending machines and newsstands, as Operator may
deem reasonably necessary or desirable in connection with the operation of the
Motel.
(g) Operator shall install reliable accounting and internal auditing
systems.
(h) Operator, at Owner's expense, on Owner's behalf, shall negotiate
Service and other contracts reasonably necessary or desirable in connection with
the operation of the Motel in the usual course of business, except as otherwise
provided in this Agreement.
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(i) Operator. at Owner's expense, shall purchase such inventories,
provisions, supplies and equipment as Operator may deem reasonably necessary in
order to properly maintain and operate the Motel.
(j) Operator, at Owner's expense, shall plan, prepare and contract for
advertising and promotional programs for the Motel.
(k) Operator shall plan and implement a program for the refurbishing of
the Motel, the costs of which shall be paid from the furniture, fixture and
equipment reserve established and maintained by Owner.
(l) Operator shall perform all acts reasonably necessary in connection
with the operation of the Motel in an efficient and proper manner and in
accordance with standards and policies established or to be established for the
operation of similar motels.
ARTICLE III
MANAGEMENT FEE
In consideration of Operator's performance of its duties and services
as described in Article II hereof and subject to the provisions of Article III
herein, Owner shall pay to Operator a Management and Accounting Fee equal to
Five percent (5%) of "Gross Receipts" (as hereinafter defined). The term "Gross
Receipts" as used herein shall mean all income derived from the renting, use or
occupancy of guest rooms, interview centers, and meeting rooms in the motel,
less sales tax or any similar taxes which are required by law to be specially
computed and paid by guests. The Management and Accounting Fees shall be
computed and paid monthly on or before the 25th day of the month following each
calendar month or part thereof during the term of this Agreement.
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ARTICLE IV
EXCESS REVENUES
All revenues remaining after payment of all cash expenses of operation of the
Motel and after payment to Operator of all sums to which it is entitled under
this Agreement shall belong to Owner, and such payments shall be made to Owner
concurrently with the monthly payments to Operator or at such other intervals as
Owner may select providing that such payments are subject to the provisions of
Article V below.
ARTICLE V
WORKING CAPITAL
Owner agrees that the Working Capital required for the operation of the
Motel shall be an amount which Operator deems adequate. Owner shall provide at
its expense said Working Capital which funds may be drawn upon by Operator in
accordance with a budget prepared by Operator and approved by Owner for use in
the operation of any or all of the motels owned by Owner.
All Working Capital furnished by Owner to Operator pursuant to this
Article received in trust by Operator pursuant to this Article shall be received
in trust by Operator to be used exclusively in the operation of the Motel,
subject to Operator's rights to withdraw its Management and Accounting Fees
pursuant to Article III, and its right to pay charges accrued pursuant to
Article XIII.
Notwithstanding the above, should the experience of operating the Motel
show that the Working Capital is inadequate to provide cash on hand to pay
operating and other expenses, Owner shall provide sufficient additional funds to
meet such expenses.
ARTICLE VI
TERM
The term of this Agreement shall commence on January 1, 1991, and shall
continue until January 1, 2002. The term may be renewed upon mutual
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agreement between the parties.
ARTICLE VII
RELATIONSHIP OF THE PARTIES
All duties to be performed under this Agreement shall be for and on
behalf of Owner, by Operator as an independent contractor and not as servant or
agent of Owner. In taking any action pursuant to this Agreement, Operator will
be acting as an independent contractor for Owner only, and nothing in this
agreement shall be construed as creating a partnership or any other relationship
between the parties hereto.
ARTICLE VIII
INSURANCE
Owner agrees that at all times during the term at this Agreement it
will procure, maintain and keep in force at its expense and for the mutual
benefit of Owner and Operator the types and amounts of insurance required under
its Partnership Agreement.
ARTICLE IX
INDEMNITY
Owner is RESPONSIBLE FOR ALL LOSS, DAMAGE AND CONTRACTUAL LIABILITIES
RESULTING FROM OR IN CONNECTION WITH THE ACTIVITIES OF THE OWNER'S EMPLOYEES,
AGENTS OR CONTRACTORS (OTHER THAN OPERATOR) IN CONJUNCTION WITH THE OPERATION OF
THE MOTEL AND FOR ALL CLAIMS OR DEMANDS FOR DAMAGE TO PROPERTY OR FOR INJURY,
ILLNESS OR DEATH OF PERSONS DIRECTLY OR INDIRECTLY RESULTING THEREFROM. OWNER
AGREES TO DEFEND, INDEMNIFY AND HOLD OPERATOR HARMLESS OF, FROM AND WITH RESPECT
TO ANY AND ALL CLAIMS, DEMANDS, ACTIONS, AND LIABILITIES, INCLUDING ATTORNEYS'
FEES AND EXPENSES, ARISING FROM CONNECTED WITH OR RELATED TO THE ACTIVITIES OF
THE OWNER'S EMPLOYEES, AGENTS OR CONTRACTORS (OTHER THAN OPERATOR) IN
CONJUNCTION WITH THE OPERATION OF THE MOTEL.
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ARTICLE X
ACCOUNTING SERVICES AND FEES
In addition to its other services as described in Article II hereof,
Operator agrees to keep and maintain accurate books, records and accounts
relating to the operation of the Motel, including check backs, bank statements,
ledgers, journals and such other records as sound bookkeeping practice requires.
Operator shall also prepare and furnish to Owner monthly and annual financial
reports including profit and loss statements.
The accounting services to be provided by Operator under this Article
do not include the costs incurred for income tax work or a certified annual
report. Owner or its designated representative shall have access to said
accounting records at all reasonable times during normal business hours.
ARTICLE XI
TERMINATION
Owner or Operator may terminate this Agreement in the following events:
(a) In the event Owner sells, leases of otherwise disposes of the
Motel;
(b) In the event a receiver or trustee has been appointed for either
Owner of Operator, or in the event of the insolvency, bankruptcy, merger or
corporate reorganization of Operator or Owner.
ARTICLE XII
LAWS AND ORDINANCES
Operator agrees that it will at all times conduct the business on the
Motel premises in a lawful manner and in full compliance with all government
laws, ordinances, rules and regulations.
ARTICLE XIII
CHARGES
It is agreed that Operator shall not be liable to third parties for
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any debts, liabilities or obligations of the Motel arising in the course of
business of the Motel or by virtue of its management, supervision, control and
operation of said property for Owner. Operator shall be liable only to Owner for
the faithful performance of Operator's obligations under this Agreement.
ARTICLE XIV
MISCELLANEOUS
(a) Non-Waiver. No waiver of any condition or covenant contained in
this Agreement or failure to exercise a right or remedy by either of the parties
hereto shall he considered to imply or constitute a further waiver by such party
of the same of any other condition, convenant, right or remedy.
(b) Governing Law. The validity and construction of the Agreement shall
be governed by the laws of the State of Indiana.
(c) Construction. Throughout this Agreement the use of the singular
number shall be construed to include the plural, the plural the singular, and
the use of any gender shall include all genders, whenever required by the
context.
(d) Obligation to Execute Documents. Each party to this Agreement shall
from time to time, upon request by the other party, execute, acknowledge and
deliver to such other party a written statement certifying that this Agreement
has not been modified and is in full force and effect (or if there have been
modifications, that the same are in full force and effect and stating such
modifications). Each party to this Agreement shall also, from time to time, upon
request by the other pary, execute any additional documents which may reasonably
be required to effectuate the purposes of this Agreement.
(e) Successors and Assigns. The provisions of this Agreement shall
insure to the benefit of and be binding upon the parties and their respective
representatives, successors and assigns.
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(f) Severability of Provisions. If any provision of this Agreement is
held invalid by any tribunal in a final decision from which no appeal is or can
by taken, such provision shall be deemed modified to eliminate the invalid
element, and, as so modified, such provision shall be deemed a part of this
Agreement as though originally included herein. The remaining provisions of this
Agreement shall not be affected by such modification.
(g) Extent of Agreement. This Agreement represents the entire agreement
between the parties, and supersedes all prior negotiations, representations or
agreements (including addenda thereto), either written or oral. This Agreement
may ha amended only by a written instrument signed by both parties.
(h) Warranties of Representatives. Each person executing this Agreement
on behalf of a party hereto represents and warrants that he has been fully
empowered to execute this Agreement, and that all necessary action for the
execution of this Agreement has been taken.
(i} Notices. All notices under this Agreement shall be in writing and
may be given by personal delivery or by mailing by certified or registered mail
addressed as follows:
If to Owner, at Signature Inns, Inc., 0000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx #000,
Xxxxxxxxxxxx, Xxxxxxx 00000; if to Operator, at Signature Inns, Inc., 0000
Xxxxxxx Xxxxxx Xxxxx, Xxxxx #000, Xxxxxxxxxxxx, Xxxxxxx 00000; or at such other
address as either party may designate in a notice to the other party given in
such manner, Any notice given by mail shall be considered given when deposited
in the United States mail, postage prepaid, addressed as provided above.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
"OPERATOR"
SIGNATURE INNS, INC.
By: /s/ Xxxx X. Xxxxxxxxx
-----------------------------
Xxxx X. Xxxxxxxxx, President
ATTEST:
/s/ Xxxxx X. Xxxxxx
--------------------------
Xxxxx X. Xxxxxx, Secretary
"OWNER"
SIGNATURE I LTD. LIMITED PARTNERSHIP, an
Indiana limited partnership by Signature
Inns, Inc., general partner
By: /s/ Xxxx X. Xxxxxxxxx
-----------------------------
Xxxx X. Xxxxxxxxx, President
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SIGNATURE INNS, INC.
INDIVIDUAL MOTEL LICENSE AGREEMENT
THIS AGREEMENT is made and entered into at Indianapolis, Indiana,
effective this 1st day of January, 1991, by and between SIGNATURE INNS, INC.,
an Indiana corporation with its principal offices located in Indianapolis,
Indiana ("Licensor") and Signature I Ltd. Limited Partnership whose address is
0000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxxxx, Xxxxxxx, 00000 ("Licensee").
RECITALS
A. Licensor is engaged in the business of owning and operating motels
under the distinctive service xxxx "Signature Inn" and is also engaged in the
business of licensing others to use the service xxxx "Signature Inn" in the
operation of their motels.
B. In connection with its businesses, Licensor has originated,
developed and made operational a system ("the Signature System") for providing
to the general public high quality, reasonably priced lodging accommodations
tailored to meet the particular needs of the business and commercial traveler,
as well as those of the leisure vacationer guest, while eliminating typical
restaurant and lounge facilities.
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C. The Signature System is identified and set apart by many
distinguishing features, including (1) the use of specially designed interiors,
exteriors, equipment, furniture and layouts for its motel buildings; (2) the use
of methods of operation which are unique, innovative and known only to Licensor
and its licensees; (3) the use of service marks, including but not limited to
the xxxx "Signature Inn," which are distinctive in design, attractive in
appearance and calculated to distinguish Licensor's services from those
generally available; and (4) clean, comfortable and unique motels, providing
efficient and courteous service at moderate prices.
D. Licensor is the sole and exclusive owner of all proprietary and
other property rights, interests and goodwill in and to the Signature System and
all trademarks, service marks, copyrights, slogans, and trade names associated
with that system, including, without implied limitation, "Signature Inn".
F. Licensee understands that the motel to be operated by Licensee under
this Agreement, together with motels now or hereafter operated by Licensor and
other Licensees, will constitute part of the Signature System. Licensee also
acknowledges that each motel in the Signature System is dependent on the others
in that system to establish and maintain the goodwill necessary for a successful
operation. Licensee agrees that it is, therefore, a benefit to, as well as an
obligation of, Licensee to conform strictly to the terms and conditions of this
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Agreement, all of which terms and conditions are essential for the success of
the Signature System. Licensee also understands that Licensor must develop,
implement and enforce uniform standards of operation in order to facilitate the
successful operation of each of its licensees.
F. Licensee desires to utilize and obtain the benefits of the Signature
System and to operate a motel under the distinctive service xxxx "Signature
Inn," as well as the other distinctive marks, slogans and names listed on
Schedule "A" hereto, upon the terms and conditions herein set forth.
G. Licensor is willing to permit Licensee to use such marks, slogans
and names for and with respect to the licensed motel (without responsibility or
liability upon Licensor for the operation thereof), upon the terms and
conditions herein set forth.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, the parties hereby agree as follows:
ARTICLE I
LICENSE AND TERM
Section 1.1. Grant of License. Subject to Licensee's compliance with
all the terms and conditions of this Agreement, Licensor hereby grants to
Licensee a non-assignable, non-exclusive license:
(a) To use on a non-exclusive basis the Signature System, the service
xxxx "Signature Inn" and all other trademarks, service marks, copyrights,
slogans and trade names listed on
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Schedule "A" hereto, solely in connection with one licensed motel which is owned
and operated by Licensee at the location set forth in Section 1.3 of this
Article;
(b) To use Licensor's operating methods and procedures at that
location; and
(c) To render the services specified by Licensor at that location
according to the procedures, systems and methods defined herein.
Section 1.2. Acceptance of Grant of License. Licensee hereby accepts
the grant of license from Licensor and agrees:
(a) To use the Signature System, the service xxxx "Signature Inn" and
all trademarks, service marks, copyrights, slogans and trade names listed on
Schedule "A" hereto, as veil as any other xxxx, right or name which Licensor
subsequently prescribes for the Signature System, in the manner and to the
extent set forth in this Agreement and solely in connection with one licensed
motel which is owned by Licensee at the location set forth in Section 1.3 of
this Article;
(b) To use the procedures and methods of operation at that location
which are established by Licensor and modified from time to time; and
(c) To render the services at that location which, from time to time,
are specified by Licensor, according to the procedures, Systems and methods
established in this Agreement.
Section 1.3. Location of Licensed Motel. The license
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granted under Section 1.1 of this Article and accepted under Section 1.2 of this
Article is for the ownership and operation of a "Signature Inn" motel containing
103 guest rooms units and such other facilities as Licensor approves ("the
Licensed Motel") located at the following specific site: 0000 Xxxx Xxxxxxxxxx
Xxxxxx Xxxx, Xxxx Xxxxx, Xxxxxxx 00000.
Section 1.4. Limitations on Use of the Xxxx and Name "Signature Inn"
and on the Marks, Rights, Slogans and Names Listed on Schedule "A". Licensee
shall not use the name and xxxx "Signature Inn" or any xxxx, right, slogan or
name listed on Schedule "A" hereto in the name of any corporation, partnership,
joint venture, association, company, proprietorship or other business entity.
Any application by Licensee to use the name and xxxx "Signature Inn" as a trade
or assumed business name, which may be required by the statutes or laws of any
jurisdiction, shall specify that Licensee's use of such name and xxxx is limited
to the premises stated in Section 1.3 of this Article and limited by the terms
of this Agreement. The license granted under section 1.1 and accepted under
Section 1.2 of this Article is non-exclusive, and no property right or privilege
to use any xxxx, right, slogan or name is created which will extend beyond
termination of this Agreement. Licensee hereby agrees that Licensee shall not
acquire any rights in the name and xxxx "Signature Inn" and the other marks,
rights, slogans and names
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listed on Schedule "A" through Licensee's use thereof in connection with the
operation of the Licensed Motel.
Section 1.5. Initial Term of License. Unless earlier terminated for
cause as hereinafter provided, the license granted under Section 1.1 and
accepted under Section 1.2 of this Article shall continue in full force and
effect until August 22, 1998.
Section 1.6. Additional Term. Provided that Licensee shall fully,
faithfully and timely carry out and perform all of its obligations under this
Agreement, Licensee may renew the license granted hereunder for any additional
term of five (5) years upon the expiration of the initial term. In the event
Licensee desires to exercise its option to renew, Licensee shall provide
Licensor with a written notification of Licensee's intent to renew at least 120
days before the expiration date of the initial term of this Agreement. Renewal
of the license shall be effectuated by the execution by Licensor and Licensee of
Licensor's then current form of license agreement at the then current franchise
rates and all other documents then customarily used by Licensor in the grant of
licenses. THE LICENSE GRANTED HEREUNDER SHALL NOT BE RENEWABLE FOLLOWING THE
EXPIRATION OF THE ADDITIONAL TERM, IF ANY, EXCEPT UPON SUCH TERMS AS MAY BE
MUTUALLY AGREED BETWEEN BOTH PARTIES.
ARTICLE II
EXCLUSIVE AREA
In order to facilitate the successful operation of the Licensed Motel
and to protect Licensee's investment in the
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Licensed Motel, Licensor hereby grants to Licensee the exclusive right to own
and operate one (and only one) "Signature Inn" within the geographic area
described in Schedule "B" hereto ("the Exclusive Area"). During the term of this
Agreement, neither Licensor nor any other of its licensees shall be allowed to
establish or operate a "Signature Inn" within the Exclusive Area; provided,
however, Licensor is not prohibited from developing other motel/hotels or other
lodging facility within the Exclusive Area, as long as the lodging facility is
developed and operated under another name.
Licensee acknowledges that the grant of an Exclusive Area under this
Article shall not be construed to authorize Licensee to construct, own or
operate any additional Signature Inn motel facilities within the Exclusive Area,
and that construction, ownership or operation of any additional motel in the
exclusive area or any additional motel facilities on the site of the Licensed
Motel is hereby prohibited.
ARTICLE III
ADDITIONAL COVENANTS OF LICENSOR
Section 3.1. Knowledge and Experience. Licensor agrees to make
available to Licensee the benefit of Licensor's knowledge and experience in the
financing, ownership and operation of Signature Inns. Licensee shall have the
right to consult with Licensor's officers, employees and agents at Licensor's
principal offices concerning any matter relating to the financing, ownership,
leasing and operation of Licensee's Signature Inn.
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Section 3.2. Sources of Equipment, Furniture, Fixtures and Supplies. It
is the sole responsibility of Licensee to select and obtain suppliers of motel
equipment. However, if requested in writing by Licensee, Licensor agrees to
suggest to Licensee persons or firms believed to be in the business of supplying
motel equipment, furniture, furnishings, fixtures and supplies. However, it is
expressly understood and agreed that Licensor shall have no liability,
responsibility or obligation to Licensee or any other person with respect to the
ultimate terms of any contractual relationships with suppliers, nor shall
Licensor have any such liability, responsibility or obligation with respect to
the quality, merchantability, fitness or workmanship of any goods supplied.
Section 3.3. Operations Manual. Licensor agrees to loan Licensee a copy
of the Signature Inn Confidential Manual of Standard Operating Procedures ("the
Manual") upon execution of this Agreement, the receipt of which Licensee
acknowledges by the execution of this Agreement. The Manual, which is
confidential, is designed to insure uniform and high standards of quality,
service and appearance among all Signature Inn motels in order to create and
maintain Signature Inn's goodwill and consumer acceptance. It is understood that
the Manual, including all subsequent amendments thereto, shall remain the
property of Licensor and shall be returned by Licensee to Licensor upon
termination of this Agreement.
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3.4. Training of Licensee's Employees. Licensor will also furnish
technical and procedural advice regarding the operation of the Licensed Motel to
Licensee's employees at Licensor's principal offices. In the event Licensee
requires the service or presence of any officer, employee or agent of Licensor
to aid in operating the Licensed Motel subsequent to the effective date of
this Agreement, Licensee shall pay Licensor all costs of travel and other
expenses of such persons, plus a per diem amount equivalent to the normal daily
remuneration received by such persons from Licensor.
Section 3.5. Promotion of Signature Inns. Licensor agrees to promote
Signature Inns and the use of those Inns by members of the public through such
advertising and public relations programs as Licensor, in its discretion,
determines to be suitable and appropriate.
Section 3.6. Supervision of Licensees. Licensor agrees to supervise
Licensee and other of its licensees as often as Licensor shall deem necessary in
order to assure compliance by all licensees with the Signature Inn Confidential
Manual of Standard Operating Procedures, including the Rules of Operation
contained therein. For that purpose, Licensor agrees to maintain such staff as
is necessary and desirable to allow for on-site inspections of Licensee's
Licensed Motel, as well as on-site inspections of motels of other licensee's and
in conjunction with those inspections to provide guidance in the management and
operations
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of the motels.
Section 3.7. Signs, Insignia and Decalcomania. Licensor agrees, from
time to time, to suggest to Licensee, persons or firms believed to be in the
business of supplying signs, decalcomania, forms, stationery, bulletins and
procedures which at that time are required by Licensor for use in Signature
Inns, and to furnish specifications for standardized signs, letterheads,
registration cards, statements and other similar materials.
Section 3.8. Advertising and Promotion Expenditures. Licensor agrees to
expend all sums received from Licensee pursuant to Article V for the publication
of a directory and for national and/or regional advertising and promotion, as
provided for in that Section.
Section 3.9. Reservations System. Licensor has implemented a
reservations system for the transmission and receipt of reservation requests
among all Signature Inns. Licensor shall make such reservations system available
to Licensee upon the terms set forth in Section 5.2 hereof.
ARTICLE IV
LICENSE FEES AND ACCOUNTING
Section 4.1. Royalty Fee. In consideration of the rights, privileges
and license granted to Licensee under this Agreement and the services to be
rendered to Licensee by Licensor under the terms hereof and subject to Section
4.5 hereof, Licensee hereby agrees to pay to Licensor a license royalty fee
equal to four percent (4%) of Licensee's "Gross Receipts", as defined in Section
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4.2 hereof (hereinafter "License Fee"). Licensee shall pay the License Fee on or
before the 25th day of the month following each calendar month or part thereof,
during the term of this Agreement. Each payment shall be accompanied by a
monthly Statement of Operations on a form provided to Licensee by Licensor,
certified to be true and correct by Licensee, showing, among other information,
the number of rooms rented, the average daily room rate, the percentage of
occupancy and the "Gross Receipts" during the preceding month, or part thereof.
Section 4.2. Definition of "Gross Receipts". The term "Gross Receipts"
as used herein shall include all income derived from the renting, use or
occupancy of quest rooms, working areas, meeting rooms and storage facilities in
the Licensed Motel, less sales tax or any similar taxes which are required by
law to be specially computed and paid by the guests.
Section 4.3. Examination of Licensee's nooks and Records; Annual
Audited Statements. Licensee shall keep on the premises of the Licensed Motel
true and accurate books, records and accounts relating to Gross Receipts. In
order to provide Licensor with a method to insure the accuracy and completeness
of Licensee's monthly Statements of Operations, Licensee hereby grants to
Licensor the right to examine all books, records, accounts and tax returns of
Licensee at all reasonable times and places upon reasonable notice. Licensor
may, at anytime upon reasonable notice, conduct an audit of the books, records
and accounts of the
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Licensed Motel, which shall be conducted at Licensor's expense, except in the
case where Gross Receipts have been understated by two percent (2%) or more by
Licensee for the period covered by the audit. in which event the cost of the
audit shall be borne by Licensee. Within 75 (seventy-five) days after the close
of Licensee's fiscal year, Licensee shall prepare and furnish to Licensor a
Statement of Operations, including a balance sheet and profit and loss statement
for such fiscal year. Such Statement of Operations shall be certified by an
independent certified public accountant to be true and correct and prepared in
conformity with generally accepted accounting principles. In addition to
providing the annual statement, a true copy of Licensee's federal income tax
return and state sales tax returns for the fiscal year shall be furnished.
Section 4.4. Interest on Past Due Amounts. All fees to be paid by
Licensee to Licensor under this Article and under Article V hereof which become
past due shall bear interest at the rate of 1 1/2% of the amount past due per
month. Licensee authorizes Licensor to deduct any such past due amounts from any
sums which may be payable by Licensor to Licensee.
ARTICLE V
ADVERTISING AND RESERVATION SYSTEM
Section 5.1. Advertising. Licensee shall pay to Licensor an amount
equal to two percent (2%) of Licensee's Gross Receipts, as defined in Section
4.2 hereof, for use by Licensor for the publication and distribution of
directories and other advertising
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materials, for radio, television, magazine, newspaper and other forms of media
advertising on a state. regional or national basis as Licensor, in its sole
discretion, deems appropriate. In addition, those amounts may be used by
licensor to pay salaries, benefits and expenses of individuals employed to carry
out and administer direct sales efforts on behalf of the chain. Such payments
shall be made on a monthly basis at the time and in the manner set forth under
Article IV for the payment of License Fees. Licensor shall deposit all such
payments in a separate bank account designated "Signature Inn National
Advertising Trust Account." Licensor hereby warrants that all sums collected
under this Article shall be used for advertising purposes as described above.
Licensor shall maintain accurate books, records and accounts for all receipts
and expenditures from the special account, which books, records and accounts
shall be available for inspection by Licensee at all reasonable times. Licensee
shall be responsible for its own local advertising and promotion.
Section 5.2. Central Reservation System. Licensee shall pay to Licensor
an amount equal to one percent (1%) of Licensee's Gross Receipts, as defined in
Section 4.2 hereof, for use or Licensor in its Central Reservation System. In
addition, the licensee shall pay a specified dollar amount per available room
per month as reasonably determined by the Franchisor. Such payment shall be made
on a monthly basis at the time and in the manner set forth under Article IV for
the payment of License Fees.
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Licensor shall deposit all such payments in a separate bank account designated
"Signature Inn National Reservation Trust Account." Licensor hereby warrants
that all sums collected under this Article shall be used for reservation
purposes as described above. Licensor shall maintain accurate books, records,
and accounts of all receipt and expenditures from this special account, which
books, records and accounts shall be available for inspection by Licensee at all
reasonable times.
ARTICLE VI
ADDITIONAL COVENANTS OF LICENSEE
Section 6.1. Use of Licensed Motel. Licensee hereby covenants that the
Licensed Motel shall be used solely for the purpose of operating a Signature Inn
motel pursuant to the terms of this Agreement, and that its business operations
will be conducted exclusively from the location described in Section 1.3 of
Article I hereof.
Section 6.2. Compliance With the Manual. Licensee covenants that it
shall observe strictly all standards of service and operation prescribed by
Licensor in this Agreement and in the Signature Inn Confidential Manual of
Standard Operating Procedures, as revised or amended by Licensor from time to
time. Licensee acknowledges that the Manual and the Rules of Operation set forth
therein will require amendment from time to time, and Licensee agrees that
Licensor, in its discretion, may make revisions and amendments to the Manual,
provided only that
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Licensor shall apply those provisions and amendments uniformly to all licensees.
Licensee expressly agrees to comply with all such revisions and amendments.
Licensee further agrees that it will maintain the confidentiality of the Manual
and amendments thereto and that it will return all copies of the Manual and
amendments to Licensor upon termination of this Agreement.
Section 6.3. Operating standards, Licensee agrees to maintain a high
moral and ethical standard and atmosphere at the Licensed Motel and to strictly
comply with all local, state and federal laws, ordinances, rules and regulations
relating to the premises or to the improvements thereon. Licensee covenants that
it will maintain its premises and accommodations in a clean, safe and orderly
manner and will provide efficient, courteous and high quality service to the
public. Licensee covenants that it will furnish such motel accommodations,
services and conveniences of the quality and type as are prescribed by Licensor
for motels in the Signature System, such that the Licensed Motel shall help to
create, maintain and enhance the reputation and goodwill of the Signature
System.
Section 6.4. Trademarks, Service Marks and Trade Names.
(a) Licensee agrees to comply with all requests of Licensor with
respect to the appearance and use of the trademarks, service marks, slogans,
copyrights and trade names licensed hereunder, including any request to change
the form or style or discontinue using any of said marks and names. Unless
instructed
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otherwise by Licensor, Licensee covenants to feature in the operation of the
Licensed Motel and in all advertising matter the words "Signature Inn" with
related logo and all other marks prescribed by Licensor, so that Licensee's
motel will be distinctly recognized by the public as an integral part of the
Signature System. In addition, Licensee shall employ such trademarks, service
marks, slogans and copyrights as prescribed by Licensor, from time to time, on
all stationery, linens, towels, furniture, furnishings, advertising matter,
signs or other articles, in the same combination, arrangement and manner as
required or approved by Licensor for the Signature System.
(b) Licensee shall make every effort to protect, maintain and advance
the name "Signature Inn" and all other trademarks, service marks, copyrights,
trade names and slogans which stand for or represent the Signature System as
determined from time to time by Licensor.
(c) Licensee agrees that it shall not use any trademarks, service
marks, copyrights, trade names or slogans licensed hereunder in whole or in part
for any purpose or in conjunction with any product, service or business other
than the business to be conducted under this Agreement.
(d) Licensee acknowledges and agrees that all trademarks, service
marks. copyrights, trade names and slogans (including the goodwill associated
therewith) licensed hereunder and/or used in the Signature System are owned by
Licensor, and
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that Licensee has no interest in or to any such xxxx, right, name or slogan or
the goodwill associated therewith. Licensee shall not register or attempt to
register such trademarks, service marks, copyrights, trade names or slogans in
its own name or that of any other person, firm, association or corporation.
(e) Licensee agrees that, upon termination of this Agreement, Licensee
will immediately cease using and thereafter abstain from using all trademarks,
service marks, copyrights, trade names and slogans licensed hereunder and/or
used in the Signature System, and will surrender and assign to Licensor any and
all rights and goodwill which Licensee may have acquired in or under said marks,
copyrights, names or slogans.
(f) Licensee agrees that in the event Licensor should cease doing
business under the name of "Signature Inn" at any time during the term of this
Agreement for any reason whatsoever, Licensor may select such other name as it
may determine and Signature System and this Agreement shall be thereby amended
in such respect.
Section 6.5. Promotion of Business. Licensee agrees to diligently
promote and make every reasonable effort to steadily increase its business by
printed advertisements, brochures, highway signs and by placing advertising in
any other suitable manner upon its premises and for a reasonable distance
thereof. In addition, Licensee agrees to use every reasonable means to encourage
and promote the use of Signature Inns on a national and
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regional basis by the traveling public. Licensee further agrees that it will use
the name "Signature Inn" in all of its own advertising, and that all such
advertising will be submitted to Licensor for approval before publication.
Section 6.6. Participation in Reservation System. Licensee agrees to
participate in the Central Reservation System of Licensor and to install in the
licensed Motel all equipment which is necessary or desirable for such
participation. Licensee further covenants that it will observe the practices,
procedures and policies as from time to time are prescribed by Licensor for the
operation of the reservation system.
Section 6.7. Equipment, Furnishings and Fixtures. Licensee agrees to
purchase (or lease) and use exclusively at all times during the term of this
Agreement furniture, fixtures, equipment and supplies as shall strictly comply
with the specifications which, from time to time, are prescribed by Licensor
Licensee acknowledges that such specifications are necessary to insure the high
quality of the furniture, fixtures, equipment and supplies to be used in
Signature Inns.
Section 6.8. Inspection of Premises. Licensee agrees to permit Licensor
to inspect the Licensed Motel at anytime During regular business hours. without
notice, so as to assure compliance with the terms of this Agreement and the
Manual. Licensee further agrees to take immediate remedial action to correct any
deficiencies discovered during any such inspection. If necessary,
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Licensee shall provide free lodging to the representative conducting the
inspection.
Section 6.9. Credit Cards. Licensee agrees to recognize for the purpose
of identification and credit all credit cards which Licensor now or hereafter
specifies in accordance with Licensor's procedures established from time to time
in the Manual and to execute central billing agreements as may by required by
the issuers of such credit cards. It is understood that Licensor shall not be
responsible for any charges incurred by the holder of any such credit card.
Section 6.10. Taxes, Licensee agrees to be responsible for all local,
state and federal taxes arising as a result of Licensee's operation of the
Licensed Motel under this Agreement, and Licensee shall indemnify Licensor and
hold it harmless against any claim arising out of Licensee's failure to pay such
taxes.
Section 6.11. Defense of Actions. Licensee agrees that it will
undertake, on behalf of Licensor, the defense of any lawsuit filed against
Licensor on the basis of which is alleged to be the breach of any obligation or
contract by Licensee or the occurrence of any tort or negligence in connection
with the operation of the Licensed Motel. Licensee agrees to retain counsel of
Licensor's choice to represent Licensor in any such suit and to file any
pleadings required or permitted in the defense of such suit. Should Licensee
fail or refuse to secure counsel to represent Licensor in such suit, Licensee
agrees that it shall be
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responsible for all legal fees and expenses incurred by Licensor in defending
such suit. In the event of the entry of any judgment against Licensor, Licensee
expressly agrees to pay such judgment on behalf of Licensor and to indemnify and
save harmless Licensor from such judgment.
Section 6.12. Signs. Licensee agrees to erect on or attach to the
premises of the Licensed Motel such signs as are prescribed by Licensor.
Licensor will recommend to Licensee possible source or sources of signs.
Licensee shall be entitled to acquire the signs from any source. However, all
signs must comply with the standards and specifications required by Licensor
Licensee shall obtain Licensor's approval of the type, quality and design of all
signs (on site and off) prior to their erection. Licensee acknowledges that the
signs will have distinctive characteristics used to identify Signature Inns.
Immediately upon termination of this Agreement, Licensee shall cease using all
such signs and shall remove all such signs, at Licensee's cost.
Section 6.13. Refurbishing. Licensee agrees to effect such refurbishing
of the Licensed Motel (in addition to regular maintenance and repair) as
Licensor reasonably may require to maintain or improve the appearance and
efficient operation of the Licensed Motel and/or increase its sales potential.
Refurbishing may include: (a) replacement of worn out or obsolete equipment,
fixtures, furniture and signs; (b) substitution or addition of new or improved
equipment, fixtures, furniture and signs; (c)
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redecorating; and (a) repair of the interior and exterior of the premises and
repair and resurfacing of parking facilities.
ARTICLE VII
RELATIONSHIP OF PARTIES
Section 7.1. Limitations on Licensor's control of Licensee. Except as
specifically provided in this Agreement, Licensee shall he responsible to
Licensor only for the requirements and results contemplated by the Agreement.
Licensee shall not be subject to Licensor's control with respect to the physical
actions or activities of Licensee or of its employees or agents in connection
with the operation of the Licensed Motel or Licensee's fulfilling the
requirements and accomplishing the results contemplated by this Agreement,
Section 7.2. Scope of Authority. Licensee is, and at all times during
the term of this Agreement, shall represent and conduct itself as an independent
contractor. Licensee shall not have the authority, express or implied, to bind
or obligate Licensor in any way.
Section 7.3. Placard. Licensee shall maintain on the premises at the
front desk in open view to the public a placard which shall designate Licensee
as the owner and operator of the premises under a license from Licensor.
Section 7.4. No Authority to Grant: Sub-Licenses. Licensee agrees that
it has no express or implied right to sub-license others to use the Signature
System.
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ARTICLE VIII
INDEMNITY
Licensee is RESPONSIBLE FOR ALL LOSS, DAMAGE AND CONTRACTUAL
LIABILITIES TO THIRD PERSONS RESULTING FROM OR IN CONNECTION WITH THE
CONSTRUCTION AND OPERATION OF THE LICENSED MOTEL AND FOR ALL CLAIMS OR DEMANDS
FOR DAMAGE TO PROPERTY OR FOR INJURY, ILLNESS OR DEATH OF PERSONS DIRECTLY OR
INDIRECTLY RESULTING THEREFROM. LICENSEE AGREES TO DEFEND, INDEMNIFY AND HOLD
LICENSOR HARMLESS OF, FROM AND WITH RESPECT TO ANY AND ALL CLAIMS, DEMANDS,
ACTIONS AND LIABILITIES, INCLUDING ATTORNEYS' FEES AND EXPENSES, ARISING FROM,
CONNECTED WITH OR RELATED TO THE CONSTRUCTION OR OPERATION OF THE LICENSED
MOTEL.
ARTICLE IX
INSURANCE
During the term of this Agreement, Licensee agrees to procure,
maintain and keep in force at its expense insurance for the mutual benefit of
Licensor and Licensee including, but not limited to, general public liability
insurance against claims for personal injury, death and/or property damage
occurring on or about the premises or adjacent thereto with policy limits of at
least $1,000,000 combined single limit bodily injury and personal property
damage with extended coverage endorsement; general liability coverage,
including, but not limited to protection for premises operations, personal
injury, products liability, innkeepers legal liability; comprehensive automobile
coverage with limits of $250,000/$500,000 bodily injury and $100,000 property
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damage liability; statutory xxxxxxx'x compensation insurance with a minimum or
$100,000 employers' liability; fire and business interruption insurance
coverage, all in such minimum amounts as set forth herein, or as from time to
time changed by Licensor in its absolute discretion. Any and all insurance
obtained by the Licensee shall be in form and with insurers acceptable to
Licensor. Licensor shall be named as an additional insured under each of the
said policies, and Licensor shall annually be furnished with copies of the
policies or certificates thereof. All policies of insurance required to be
maintained by the Licensee hereunder shall be renewed (and policies or
certificates together with evidence of payment of premiums delivered to
Licensor) at least thirty (30) days prior to the respective expiration dates of
existing policies of insurance. All such policies shall contain endorsements
requiring the insurer to give Licensor at least ten (10) days' written notice
before cancellation or making any changes in the policy.
ARTICLE X
TRANSFER AND ASSIGNMENT
Section 10.1. General Assignments and Transfers. The license granted
hereunder is personal to Licensee, Accordingly, Licensee shall neither sell,
assign, transfer nor encumber this Agreement or any right or interest herein,
nor suffer or permit any such assignment, transfer or encumbrance to occur by
operation of law, unless the written consent of Licensor shall be first
obtained. If a corporation or partnership, Licensee hereby
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represents and warrants to Licensor that the statement of its legal composition
furnished to Licensor is true and complete as of the date hereof. Licensee shall
not cause any change to be made in its legal composition, or issue any share of
its stock, nor cause or permit any share of its stock to be sold, transferred,
pledged or assigned, after the date of this Agreement, without the prior written
consent of Licensor The assignment of any interest, other than as provided in
this Article, shall constitute a material breach of this Agreement.
Section 10.2. Change to Corporation. If Licensee desires to conduct
business in a corporate capacity, Licensor will consent to the assignment of
this Agreement to a corporation approved by Licensor provided Licensee complies
with the following provisions: At the time of assignment and at all times
thereafter during the term of this Agreement, (a) Fifty-one percent (51%) of the
stock of such assigned corporation shall be held by Licensee, (b) Licensee shall
be the chief executive officer of such assignee, and (c) the assignee shall not
engage in any business activity other than those directly related to the
operation of a "Signature Inn."
Section 10.3. Approved Transfers. In the event of any assignment or
transfer of this Agreement which has been approved by Licensor, Licensee, (and
if a corporation or partnership, then the individual shareholders, directors and
officers, or partners, and each of them) shall nevertheless continue and remain
obligated
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and subject to all the terms hereof.
Section 10.4. Transfer Fee. Licensor may require as a condition to any
assignment or transfer under Section 10.1 hereof that the prospective successor
pay to Licensor a fee of $1,000 for Licensor's time and expenses in determining
and reviewing the qualifications of the prospective successor.
Section 10.5. Transfer and Assignments By Licensor. Licensor may
assign or transfer its interests (but not its duties, responsibilities or
obligations) under this Agreement to any person. In the event of any such
transfer or assignment, Licensor shall notify Licensee of the transfer or
assignment.
ARTICLE XI
TERMINATION AND DEFAULT
Section 11.1. Automatic Termination. This Agreement shall automatically
terminate upon the happening of any of the following events, but in no event
shall such termination relieve Licensee of any of its obligations hereunder:
(a) The filing by or against Licensee of any proceeding under the
Bankruptcy Act or any Chapters thereof if the proceeding shall not be dismissed
within thirty (30) days after filing .
(b) The discontinuance of operations of the Licensed Motel (other than
as a result of fire or other casualty) for a period longer than thirty (30)
days, or abandonment of the franchised business premises.
(c) A general assignment for the benefit of creditors
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by Licensee.
(d) The appointment of a receiver for Licensee by any court of
competent jurisdiction.
(a) Any execution, attachment or other creditors' process issuing
against Licensee or any of Licensee's assets.
Section 11.2. Licensor's Option to Terminate Upon Default. The
occurrence of any of the following events shall constitute good cause for
Licensor, at its option and without prejudice to any other rights or remedies
provided for hereunder or by law or equity, to terminate this Agreement:
(a) A default by Licensee in the payment of any monies due hereunder or
in the submission of financial statements or data or reports on Gross Receipts
as provided herein, which is not cured within ten (10) days after notification
thereof.
(b) Any material false statement or omission in connection with any
financial statement or information furnished by Licensee.
(c) Failure on the part of Licensee to maintain the standards as set
forth in this Agreement, and as may be supplemented by the Manual as to
cleanliness, health and sanitation, and uniformity, which is not cured within
ten (10) days after notification thereof; or repeated serious violations of such
provisions by Licensee.
(d) The violation by Licensee of any law, ordinance, rule or regulation
of a governmental agency in connection with the
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operation of the Licensed Motel, which is not cured within ten (10) days after
notification thereof, unless there is a bona fide dispute as to the violation or
legality of such law, ordinance, rule or regulation, and Licensee promptly
resorts to courts or forums of appropriate jurisdiction to contest such
violation of legality.
(e) A default by Licensee under any lease or sublease or contract to
purchase real estate resulting in the loss of its right to possession of the
Licensed Motel premises.
(f) A violation of any covenant or provision contained in Article XII
hereof.
(g) The violation of any of the other terms or conditions of this
Agreement by Licensee, which is not cured within thirty (30) days after written
notice from Licensor.
Section 11.3. Effects of Termination,
(a) Termination of Right to Use System and Marks. Upon termination of
this Agreement, Licensee's right to use the xxxx "Signature inn" or any other
xxxx, name, insignia or slogan used by Licensor in connection with its business
shell terminate forthwith. Licensee shall not thereafter, directly or
indirectly, identify itself in any manner as a "Signature Inn" licensee, or
publicly identify itself as a former "Signature Inn" licensee or use any of
Licensor's trade secrets, signs, symbols, devices, or other materials
constituting part of Licensor's system or process. Licensee agrees that, upon
termination of this Agreement
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by lapse of time or default, or for any reason, it will immediately make such
removals or changes in signs and colors of buildings and structure. as Licensor
shall reasonably request so as to distinguish effectively said premises from
their former appearance and from any other "Signature Inn" motel. If Licensee
shall fail to make such changes forthwith, then Licensor may enter upon
Licensee's premises and make such changes at Licensee's expense.
(b) Phone Numbers. Licensee acknowledges that the phone number(s) used
by it will become inextricably bound up with the Signature System through
advertising of the numbers in conjunction with the marks associated with the
system. Licensee agrees that Licensor shall have the exclusive proprietary
interest in such phone number(s) and that Licensee will take all action
necessary to having the phone company records reflect Licensor's interest.
Licensee agrees that it may not, without Licensor's consent, change such
number(s) during the term of this Agreement. In addition, Licensee agrees that,
upon termination of this Agreement, it will take all action necessary to change
such numbers and assign the number to Licensor.
(c) Payment of Amounts Due Upon Termination. Upon termination of this
Agreement, Licensee shall immediately pay to Licensor all amounts owing under
Articles IV and V hereof computed through the date of termination,
(d) Liquidated Damages. Both parties agree that
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termination of the Agreement prior to the end of the then current term will
result in substantial damages to Licensor, which damages would be very
difficult, to calculate in terms of a dollar amount. In order to avoid the
problem of calculation of damages, the parties agree that, in lieu of actual
damages, Licensee shall pay to Licensor liquidated damages equal to the greater
of (a) the product of the multiplication of the total of all fees earned by
Licensor under Article IV hereof during the twelve (12) months immediately
preceding termination times two and one-half (2 1/2) or (b) Thirty-five Thousand
Dollars ($35,000).
(e) Option to Purchase Goods. Licensee grants to Licensor the option to
purchase all paper goods, containers, signs, and any and all goods bearing
Licensor's marks thereon at the lower of cost or fair market value at the time
of termination.
Section 11.5. Attorneys Fees. Upon the occurrence of an event of
default by Licensee, Licensor shall be entitled to recover from Licensee
reasonable attorneys' fees incurred by Licensor as a result of such default.
Section 11.6. Remedies Cumulative. The remedies provided under this
Article are not exclusive and shall be in addition to any other remedy which
Licensor may have at law or in equity.
ARTICLE XII
TRADE SECRETS
Licensee recognizes that during the term of this Agreement it will have
access to the Licensor's trade secrets and confidential information. Licensee
acknowledges that the knowledge associated
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with the Signature System constitutes confidential information and trade secrets
of Licensor and that the same have been revealed to it in confidence. Licensee
further acknowledges that it acquires no right to use or duplicate such
operations and the confidential information associated therewith and contained
in the Manual other than at the location of the Licensee's business and only
during the term of this Agreement. To safeguard such trade secrets and
confidential information, Licensee agrees:
(a) All information designated by Licensor as confidential information
shall be marked as such at the time of delivery, if delivered in writing, or if
delivered orally, shall be reduced to writing and so marked as soon as
convenient thereafter. Licensee shall acknowledge receipt of such information,
confirming that the same is received in confidence and will be treated as
prescribed herein, and a copy of such acknowledgment shall be attached to each
copy of such information furnished to or made by Licensee.
(b) Licensee shall not disclose such trade secrets or confidential
information to his employees without taking all steps necessary to safeguard the
confidentiality of such information.
(c) Such information shall not be disclosed to any third parties,
including without limitation affiliates, subcontractors, customers, licensees,
consultants, or prospective purchasers of any part of Licensee's business,
without the prior written consent of Licensor.
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(d) All trade secrets, confidential information and knowledge of
information not made available to the public respecting Licensor's products,
methods, designs, systems, improvements, trade secrets, or other confidential
information shall be regarded by Licensee as strictly confidential and shall not
be directly or indirectly used or disclosed or divulged by Licensee or its
shareholders, directors, officers or partners at any time during the term of
this Agreement, or thereafter without Licensor express written permission.
(e) In the event of any disclosure or the use of confidential
information, inadvertent or otherwise, in violation of this Agreement or any
employee commitment executed pursuant hereto, Licensor may, notwithstanding any
other provision of this Agreement) terminate this Agreement or, at its option
without terminating this Agreement, apply to a court of competent jurisdiction
for an order restraining any further disclosure of such information and for such
other relief as it may deem appropriate, and Licensee shall, at Licensor's
request, initiate and diligently prosecute at its own expense legal proceedings
to restrain such disclosure or to obtain such other relief. Licensee agrees that
the disclosure or use of any confidential information or trade secrets would
irreparably harm Licensor and that Licensor shall have the right to injunctive
relief to enforce these restrictions.
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ARTICLE XIII
RIGHT OF FIRST REFUSAL
If Licensee, at any time during the term hereof, shall receive a bona
fide offer acceptable to Licensee to purchase, lease or sublease the Licensed
Motel, Licensee shall promptly inform Licensor in writing, setting forth the
full terms of such offer, and Licensor may, within thirty (30) days after
receipt of such written notice, at its option, elect, by giving written notice
to Licensee, to purchase, lease or sublease the Licensed Motel on the same terms
and conditions contained in said offer, until the end of the thirty (30) day
option period, Licensee shall not accept any third party bona fide offer. If, at
the expiration of the thirty (30) day period, Licensor has failed to elect to
exercise the option, Licensee may transfer, sell, lease or sublease the Licensed
Motel on the same terms as those submitted to Licensor in writing, subject to
Licensor's approval of the prospective purchaser or lessee, as hereinafter
provided. Licensor shall have sixty (60) days from and after the expiration of
the thirty (30) day period to approve or disapprove of the prospective successor
in writing. In the event the prospective successor is not acceptable, Licensor
shall notify the Licensee of this fact in writing, and shall provide to Licensee
the reasons for its decision. In such event, Licensee shall not be permitted to
transfer its interest in this Agreement and in the license granted hereby to
such party.
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ARTICLE XIV
MISCELLANEOUS
Section 14.1. Non-Waiver. No waiver of any condition or covenant
contained in this Agreement or failure to exercise a right or remedy by either
of the parties hereto shall be considered to imply or constitute a further
waiver by such party of the same or any other condition, covenant, right or
remedy.
Section 14.2. Governing Law. The validity and construction of this
Agreement shall be governed by the laws of the State of Indiana.
Section 14.3. Construction. Throughout this Agreement, the use of the
singular number shall be construed to include the plural, the plural the
singular, and the use of any gender shall include all genders, whenever required
by the context.
Section 14.4. Obligation to Execute Documents. Each party to this
Agreement shall from time to timer upon request by the other party, execute,
acknowledge and deliver to such other party a written statement certifying that
this Agreement has not been modified and is in full force and effect (or if
there have been modifications. that the same are in full force and effect and
stating such modifications). Each party to this Agreement shall also, from time
to time, upon request by the other party, execute any additional documents which
may reasonably be required to effectuate the purposes of this Agreement.
Section 14.5. Successors and Assigns. The provisions of this Agreement
shall inure to the benefit of and be binding upon
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the parties and their respective representatives, successors and assigns.
Section 14.6. Severability of Provisions. If any provision of this
Agreement is held invalid by any tribunal in a final decision from which no
appeal is or can be taken, such provision shall be deemed modified to eliminate
the invalid element, and, as so modified, such provision shall be deemed a part
of this Agreement as though originally included herein. The remaining provisions
of this Agreement shall not be affected by such modification.
Section 14.7. Extent of Agreement. This Agreement represents the entire
agreement between Licensor and Licensee, and supersedes all prior negotiations,
representations or agreements (including addenda thereto), either written or
oral. This Agreement may be amended only by a written instrument signed by
Licensor and Licensee.
Section 14.8. Warranties of Representatives. Each person executing this
Agreement on behalf of a party hereto represents and warrants that he has been
fully empowered to execute this Agreement, and that all necessary action for the
execution of this Agreement has been taken.
Section 14.9. Inconsistencies With Applicable State Law. If any of the
provisions of this Agreement are inconsistent with applicable state law, then
the state law shall apply.
Section 14.10. Notices. All notices under this Agreement
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shall be in writing and may be given by personal delivery or by mailing by
certified or registered mail addressed as follows: If to Licensee, at 0000
Xxxxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxxxx, XX 00000; if to Licensor, at same
as above, Indianapolis, Indiana; or at such other address as either party may
designate in a notice to the other party given in such manner. Any notice given
by mail shall be considered given when deposited in the United States mail,
postage prepaid, addressed as provided above.
35
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the dates indicated below their respective signatures.
SIGNATURE INNS, INC. LICENSOR
By /s/ Xxxx X. Xxxxxxxxx
-----------------------------
Xxxx X. Xxxxxxxxx, President
ATTEST:
/s/ Xxxxx X. Xxxxxx
----------------------------------
Xxxxx X. Xxxxxx, Secretary
Date of Execution by
SIGNATURE INNS, INC.
1-2-91
--------------------------------
(Licensor 's Acknowledgement)
STATE OF INDIANA )
) SS:
COUNTY OF XXXXXX )
On January 2, 1991, before me, the undersigned, a Notary Public in
and for said County and State, personally appeared Xxxx X. Xxxxxxxxx and Xxxxx
x. Xxxxxx, known to me to be the President and Secretary, respectively, of
Signature Inns, Inc., and acknowledged to me that they have executed the within
instrument for and on behalf of Signature Inns, Inc., being thereunto duly
authorized.
WITNESS my hand and official seal.
/s/ Xxxxxxxx X. Xxxxxxxx
--------------------------
Xxxxxxxx X. Xxxxxxxx
Notary
Xxxxxxxx X. Xxxxxxxx
--------------------------
Printed Signature
My Commission Expires:
February 8, 1994
-----------------------------
My County of Residence:
Xxxxxxxx
-----------------------------
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SIGNATURE I LTD., Limited partnership
an Indiana limited partnership by
Signature Inns, Inc., general partner
By /s/ Xxxx X. Xxxxxxxxx, President
___________________________________
Xxxx X. Xxxxxxxxx, President
ATTEST:
/s/ Xxxxx X. Xxxxxx
____________________________
Signature and Title
(Licensee's Acknowledgement: Individual)
STATE OF __________________ )
) ss:
COUNTY OF _________________ )
On ____________________ 19__, before me, a Notary Public in and for
said County and State, personally appeared _____________________________, known
to me to be the person(s) who subscribed to the within instrument and
acknowledged that they executed the same.
WITNESS my hand and official seal.
___________________________
Notary Public
___________________________
(Printed Signature)
My Commission Expires:
_____________________________
My County of Residence:
_____________________________
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(Licensee's Acknowledgement: Corporation)
STATE OF Indiana )
) SS:
COUNTY OF Xxxxxx )
On January 2, 1991, before me, the undersigned, a Notary Public in and
for said County and State, personally appeared Xxxx X. Xxxxxxxxx and Xxxxx X.
Xxxxxx, known to me to be the president and Secretary, respectively, of the
corporation that executed the within instrument, and acknowledged to me that
they have executed the within instrument for and on behalf of such corporation
being thereunto duly authorized.
WITNESS my hand and official seal.
/s/ Xxxxxxxx X. Xxxxxxxx
------------------------------
Notary Public
Xxxxxxxx X. Xxxxxxxx
------------------------------
(Printed Signature)
My Commission Expires:
February 8, 1994
----------------------------
My County of Residence:
Xxxxxxxx
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SCHEDULE "A"
MARKS, NAMES AND SLOGANS
The following service marks, trademarks, slogans, copyrights and names
are licensed under the Agreement, subject to change as provided in the
Agreement:
"A Home away from the Home - An Office away from the Office"
"We help you get down to business."
"Sincerely Yours."
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SCHEDULE "B"
EXCLUSIVE AREA
The "Exclusive Area" provided under Article II of the Agreement is
defined as follows:
A one-half mile radius from the center point of the
intersection of I-69 and Xxxxx Xxxx 0, Xx. Xxxxx, Xxxxxxx.
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AMENDMENT
Effective May 1, 1991
The Individual Motel Franchise Agreement dated January 1, 1991 by and between
Signature Inns, Inc. and Signature I Ltd, Article V, Advertising and Reservation
System, should be amended as follows:
ARTICLE V
ADVERTISING AND RESERVATION SYSTEM
Section 5.1 Advertising. Licensee shall pay to Licensor an amount equal
to two percent (2%) or Licensee's Gross Receipts, as defined in Section 4.2
hereof, for use by Licensor for the publication and distribution of directories
and other advertising materials, for radio, television, magazine, newspaper and
other forms of media advertising on a state, regional or national basis as
Licensor, in its sole discretion, deems appropriate. In addition, those amounts
may be used by licensor to pay salaries, benefits and expenses of individuals
employed to carry out and administer direct sales efforts on behalf of the
chain. Such payments shall be made on a monthly basis at the time and in the
manner set forth under Article IV for the payment of License Fees. Licensor
shall deposit all such payments in a separate bank account designated "Signature
Inn National Advertising Trust Account." Licensor hereby warrants that all sums
collected under this Article shall be used for advertising purposes as described
above or may be combined with reservation receipts and utilized for joint
purposes or projects as deemed appropriate. Licensor shall maintain accurate
books, records and accounts for all receipts and expenditures from the special
account, which books, records and accounts shall be available for inspection for
its own local advertising and promotion.
Section 5.2. Central Reservation System. Licensee shall pay to Licensor
an amount equal to one and one half percent (1.5%) of Licensee's Gross Receipts,
as defined in Section 4.2 hereof, for use by Licensor in its Central Reservation
System. Such payment shall be made on a monthly basis at the time in the manner
set forth under Article IV for the payment of License Fees. Licensor shall
deposit all such payments in a separate bank account designated "Signature Inn
National Reservation Trust Account." Licensor hereby warrants that all suing
collected under this Article shall be used for reservation purposes as described
above or combined with advertising receipts and utilized for joint purposes or
projects as deemed appropriate. Licensor shall maintain accurate books, records,
and accounts of all receipts and expenditures from this special account, which
books, records and accounts shall be available for inspection by Licensee at all
reasonable times.
SIGNATURE INNS, INC., LICENSOR
By: /s/ Xxxx X. Xxxxxxxxx
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Xxxx X. Xxxxxxxxx, President
52
/s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx, Secretary
Date of Execution by
Signature Inns, Inc.
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SIGNATURE I LTD, BY
SIGNATURE INNS, INC.
GENERAL PARTNER
By: /s/ Xxxx X. Xxxxxxxxx
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Xxxx X. Xxxxxxxxx
Attest:
/s/ Xxxxx X. Xxxxxx
-----------------------------------------
Xxxxx X. Xxxxxx, Secretary
SIGNATURE INNS, INC., GENERAL PARTNER
