Franchise and Management Clause Samples

Franchise and Management. Purchaser covenants that within seven (7) days after the Effective Date it shall, at its sole cost and expense (excluding, however, any termination or liquidated damage amounts payable in connection with the termination of the Existing Franchise Agreement (defined below), which sums, if any, shall be payable by Seller), apply for and pursue the granting thereof with due diligence, a new franchise agreement for the operation of the Property from Holiday Hospitality Franchising, Inc. (“Franchisor”), to be effective should the Closing occur, in form and content acceptable to Purchaser in its sole and absolute discretion (“New Franchise Agreement”). Purchaser shall deliver to Seller written notice certifying that Purchaser is submitting, simultaneously with such notice, such application to Franchisor. Seller shall assist Purchaser with its efforts to obtain such New Franchise Agreement but shall not be responsible for any costs or expenses in connection therewith, except as described above.

Franchise and Management. Seller has entered into a management agreement with Residence Inn By Marriott, Inc., a Delaware corporation (“Licensor”), dated April 8, 1996, as amended October 8, 1997, for the Property (the “License Agreement”). The parties hereto acknowledge that it is a condition to Seller’s and Buyer’s obligations under this Contract that Seller shall assign to Buyer, and Buyer shall be entitled to assume, the License Agreement and that Licensor shall have consented to such assignment and assumption. Buyer agrees to apply for and use reasonable efforts, and Seller shall cooperate with Buyer, to obtain Licensor’s written consent to the assignment to Buyer of the License Agreement, with such amendments as may be required by Buyer (including, without limitation, such amendments as may be required to accommodate Buyer’s and/or Buyer’s affiliates’ REIT structure), together with the assignment to Buyer of all waivers of any brand standard necessary or appropriate for the operation of the Hotel as a Residence Inn® by Marriott, substantially in the form of the Consent, Assignment and Assumption of Management Agreement attached hereto as Exhibit F-3. Seller shall have the right to approve, and, subject to such right to approve, shall be responsible for paying all costs (other than Buyer’s attorney’s fees and extraordinary costs resulting from Buyer’s affiliates REIT structure) related to such transfer and amendment, including but not limited to, the payment of license, application, transfer and similar fees thereunder, provided that Buyer shall be responsible for costs to complete the improvements set forth in any product improvement plan for the Hotel (“PIP”) to the extent required by Licensor in connection with the transfer and assignment of the License Agreement to Buyer or its affiliate. Notwithstanding anything to the contrary herein, all Licensor transfer, amendment, issuance, assignment or similar fees, if any, other than costs of PIP improvements and other than any fees not yet due under the License Agreement if assumed by Buyer and attributable to the period after Closing, shall be the sole responsibility of Seller. Seller agrees to immediately provide all information required by Licensor in connection with such transfer and amendment, and Seller and Buyer shall diligently pursue obtaining such transfer and amendment.

Franchise and Management