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EXHIBIT 10.68
LICENSE AGREEMENT
This License Agreement ("Agreement") is dated and effective July 12,
1999, and is between RADISSON HOTELS INTERNATIONAL, INC., a Delaware
corporation, 0000 Xxxxxx Xxxx X., Xxxxxxxxxxx, Xxxxxxxxx 00000-0000 ("Licensor")
and LEISURE TIME HOSPITALITY, INC., an Ohio corporation, 0000 Xxxxxxxxxxxxxx
Xxxxx, Xxxxxxxx, Xxxxxxx 00000 ("Licensee").
1. Radisson System. Licensor licenses a system of various types of
hotels ("System Hotels") employing a proprietary and distinctive system
("System") described in this Agreement and in the Operating Manual. The System
is identified by the name Radisson(R) and certain other trademarks owned by
Licensor ( "Marks"). The System and Marks as they now exist or may be changed in
the future are collectively referred to as the "Distinguishing Characteristics."
2. The Hotel. The "Hotel" includes the real property and all
improvements located at 0000 Xxxxx Xxxxxxxx Xxxx, Xxxxxxxxx, Xxxx 00000 (the
"Licensed Location"). The improvements include all buildings, facilities,
appurtenances, improvements, landscaping, furniture, furnishings, fixtures,
equipment and signs and all entry, exit and parking areas. Licensee represents
that it has fee title or leasehold title to the Licensed Location and the Hotel,
without any restrictions that would interfere with the performance of this
Agreement. The Hotel is a Hotel class System Hotel which has or will contain 208
guest rooms. Licensee shall designate the Hotel as the "Radisson Hotel Lakefront
Cleveland" or other name authorized in writing by Licensor.
Licensed Location and Hotel are synonymous unless stated otherwise.
3. Grant and Term of License. Licensor grants Licensee and Licensee
accepts a non-exclusive license ( "License") to develop, own, operate and manage
("Develop") the Hotel using the System and the appropriate Marks at the Licensed
Location, including the right (i) to identify the Hotel and the services offered
by Licensee at the Hotel, and (ii) to promote, market and advertise the Hotel,
all, only in accordance with this Agreement, the Operating Manual and as
otherwise authorized by Licensor. The License commences on the date on which the
Hotel opens for business as a System Hotel ("Opening Date"). Licensor will
perform its obligations under this Agreement so that the Opening Date will occur
no later than April 30, 2000. The License and this Agreement expire on December
31 of the year in which the 20th anniversary of the Opening Date occurs.
Licensee acknowledges (i) that other System licensees may operate under the same
or different forms of agreement, (ii) that the rights and duties of the parties
to those agreements may or may not vary materially from those contained in this
Agreement, and (iii) that complete uniformity in Licensor's enforcement of this
Agreement and the other agreements under various market circumstances may not
always be possible or desirable. Taking the above into account, Licensor
reserves the right at its discretion to vary System standards or the enforcement
of its rights for various System Hotels based upon local conditions, law or
other circumstances, without obligation to Licensee.
4. Development. Licensee shall design and build, or rebuild or
renovate, the Hotel, as applicable, in accordance with the Project Rider which
is attached to and incorporated into this Agreement as Exhibit A.
5. Fees and Other Amounts Payable.
a. Licensor acknowledges receipt of a non-refundable Initial
License Fee of $35,000. If, at any time, the number of guest rooms in
the Hotel is greater than the number set
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forth in Paragraph 2, Licensee shall pay an additional fee of $250 for
each rentable guest room in excess of ten (10) over that number before
Licensee opens the additional guest rooms to the public.
b. For each full or partial month within the term of this
Agreement after the Opening Date, Licensee shall pay (without invoice)
to Licensor on or before the 15th day of the following month a Royalty
Fee in an amount equal to 4% of the daily gross room revenue derived
from the operation of the Hotel ("Gross Room Sales"). Gross Room Sales
is determined in accordance with the "Uniform System of Accounts for
Hotels" (Hotel Association of New York City, Inc., Ninth Revised
Edition, 1996) as revised periodically ("Uniform System") and is
exclusive of sales, use, excise, value added or similar taxes imposed
by governmental authorities having jurisdiction.
c. For each full or partial month within the term of this
Agreement after the Opening Date, Licensee shall pay (without invoice)
to the Radisson Marketing Association ("RMA") on or before the 15th day
of the following month, an amount equal to 1 3/4% of the daily Gross
Room Sales ("RMA Fee "). Licensor shall collect, manage and disburse
RMA Fees collected on behalf of the RMA to promote, market and
advertise the Radisson name and System Hotels, to generate business, to
develop and conduct training programs, to provide reservation services
and to pay administrative and other expenses related to the management
of the RMA Fees and the services provided by Licensor and third
parties, including Licensor's share of joint marketing, sales,
advertising and promotional costs in conjunction with Licensor's
affiliates. Licensor will account for the RMA Fees paid by System
Hotels in separate books of account, and furnish Licensee, upon
request, an unaudited annual statement of receipts and disbursements.
The RMA Fees are not held in a trust or escrow account and Licensor
carries no fiduciary responsibility as to those Fees.
d. For each full or partial month within the term of this
Agreement after the Opening Date, Licensee shall pay (without invoice)
to Licensor on or before the 15th day of the following month, an amount
equal to 2% of the daily Gross Room Sales ("Reservation Fee").
e. License shall pay then current charges for reservations
made through the Global Distribution System ("GDS"), other third party
reservation systems, and Licensor's Internet web site which is a part
of the Reservation System. The charges as of the date of this Agreement
are $3.50 for each reservation delivered through the GDS and $2.50 for
each reservation through Licensor's internet web site. Effective
October 1, 1999, the charge for the GDS reservations will be increased
to $3.90 for each reservation delivered through the GDS.
f. Licensee will not cause Gross Room Sales to be reduced in
order to increase business or revenues from Licensee's or the Hotel's
other activities or operations.
g. In addition to the fees referred to above, Licensee will
pay to Licensor, all other fees and charges incurred with respect to
participation in System advertising and marketing programs and for
services rendered by Licensor for which a fee or charge is imposed,
including the SMART program. For each full or partial month within the
term of this Agreement after the Opening Date, Licensee shall pay
(without invoice) to the RMA a SMART program assessment as determined
periodically by Licensor or RMA. The assessment as of the date of this
Agreement is $0.50 per occupied guest room per night. Effective Janaury
1, 2000, the SMART program assessment will be increased to $0.75 per
occupied guest room per night. Such assessments shall be collected,
managed and disbursed by Licensor on behalf of RMA and Licensee's SMART
Group.
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h. Licensee shall reimburse Licensor for any gross receipts,
sales, use or other similar tax or assessment imposed on any fees or
other amounts payable by Licensee to Licensor by the jurisdiction in
which the Hotel is located, or, if applicable, pay them directly
without deducting them from any payments to Licensor. Unless stated
otherwise in this Agreement, Licensee shall pay all amounts due to
Licensor or its affiliates within ten days after invoice. Amounts not
paid when due shall bear interest at the lesser of 1 1/2% per month or
the maximum rate of interest permitted by applicable law. Licensor may
also assess a late payment fee of up to $100 for each month an amount
due under this Agreement remains delinquent as reimbursement for
Licensor's administrative expenses. This reimbursement is in addition
to amounts which Licensee may have to pay pursuant to the last
subparagraph of Paragraph 13.
i. If requested by Licensor, at any time during the term of
this Agreement, Licensee will comply with the following:
(1) Pay all or any part of the fees and other amounts earned
by Licensor through the electronic transfer of funds or
otherwise at intervals established by Licensor.
(2) Establish a bank account into which Licensee will deposit
sufficient funds to pay all fees and other amounts earned by
Licensor, at intervals established by Licensor, and provide
Licensor with the authority and ability to withdraw funds from
such account in payment of such fees and other amounts,
directly and without any further permission by Licensee.
6. Licensor's Services. Licensor shall:
a. Consult with Licensee periodically on operating and
marketing issues concerning the Hotel.
b. Inspect the Hotel when Licensor deems it necessary to
determine whether Licensee is operating and maintaining the Hotel in
compliance with this Agreement and the Operating Manual. Licensor will
provide Licensee a written report based on that inspection. Such
inspections shall be for the sole purpose of protecting Licensor's
interest in the Distinguishing Characteristics and shall in no way be
construed as the assumption of any duty to control day-to-day operation
and maintenance of the Hotel.
c. Provide Licensee access to the Reservation System. The
Reservation System is a system for accepting and transmitting
reservations to System Hotels through various media including toll free
numbers, the GDS under the chain code authorized by Licensor,
Licensor's Internet web site and other third party services, which may
be retained from time to time for this purpose. The referral of persons
seeking to make a reservation at the Hotel through the Reservation
System, to hotels operating under a brand name of one of Licensor's
affiliates, under circumstances where such referral does not constitute
a diversion of business from the Hotel does not constitute a breach of
this Agreement. Diversion does not occur in circumstances including (i)
there is no System Hotel in the area where the person wants to stay,
(ii) the System Hotel is fully booked, (iii) the System Hotel doesn't
meet the person's requirements in other respects, or (iv) the person is
not going to make the reservation at a System Hotel, but the
reservation can be secured for the affiliate so that the person's needs
are met.
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d. Subject to applicable deadlines, include the Hotel in
future printings of Licensor's directories and other appropriate
promotional and advertising materials and programs selected by
Licensor.
e. Solicit group meeting, convention, incentive, and travel
agency business for the Hotel, where applicable.
f. At Licensee's request, assist Licensee with its grand
opening ceremony for the Hotel and provide consultation on public
relations for the Hotel.
g. Provide orientation training at a comparable System Hotel
in System standards, policies and procedures for the Hotel's general
manager and other key employees as designated by Licensor.
h. Offer periodic general meetings and training, either
directly or through third parties, in specialized fields at locations
selected by Licensor.
i. Hold System-wide business conferences, the locations and
times to be determined by Licensor.
j. Loan to Licensee and revise periodically an Operating
Manual covering: operating policies and standards; design standards;
public relations, standards of advertising graphics, promotional
programs; other standards, specifications and procedures and other
matters. Licensor may change the Operating Manual by way of additions,
deletions and revisions from time to time and Licensee agrees to
implement such changes as they are communicated to Licensee.
k. At Licensee's request and to the extent available, furnish
on generally the same basis and generally to the same extent as made
available to other System Hotels:
1) Technical consulting advice with respect to: (i)
front office, food and beverage, housekeeping, telephone and
other operational department supervisory and control services;
(ii) maintenance and engineering services; (iii) accounting
and claim services; (iv) personnel and labor relation
services; and (v) consulting on other matters such as
marketing and advertising.
Licensee agrees to pay Licensor, Licensor's
then-current charges for such services and Licensor's related
travel and living expenses, if any. Licensee has no obligation
to accept any recommendations Licensor makes. The
implementation of any recommendations made by Licensor based
on such consultation is solely at Licensee's discretion.
(2) Programs for purchase on a pooled or group basis
of various operating supplies, equipment, signage, furniture
and furnishings, at prices and on terms established
periodically by Licensor or its affiliates providing such
programs.
7. Licensee's Duties. In all matters relating to the management and
operation of the Hotel, Licensee is an independent contractor and is solely
responsible for the manner and means by which the Hotel is operated. Licensee
shall operate the Hotel to achieve conformity with the System standards, and to
do so Licensee, continuously during the term of this Agreement unless stated
otherwise, shall:
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a. Equip, furnish, operate and maintain the Hotel as a System
Hotel and use the Distinguishing Characteristics, all (i) in accordance
with this Agreement and the Operating Manual, (ii) in conformity with
the high service, moral and ethical standards of the System, (iii) in
compliance with the requirements of governmental authorities, and (iv)
in accordance with sound business and financial practice.
b. Not (i) use any other name or trademark in connection with
the operation of the Hotel without Licensor's consent, (ii) advertise
or permit the advertising of any other hotel that is not part of the
System on the Hotel premises, or (iii) promote the Hotel in conjunction
with other non-System Hotels or motels.
c. Comply with Licensor's requirements and specifications as
to services and products to be used or offered at the Hotel;
d. Permit inspection of the Hotel by Licensor's
representatives at any reasonable time and provide such representatives
with free room and board at the Hotel during such inspection. Upon
notice by Licensor, Licensee shall promptly take steps necessary to
correct any deficiencies identified during an inspection of the Hotel.
e. Discontinue any use of any Distinguishing Characteristic
which does not comply with Licensor's requirements upon notice from
Licensor.
f. Advertise and promote the Hotel and related facilities on a
local or regional basis, including the use of the System toll free
numbers, GDS chain code and Internet sites, strictly in accordance with
the Operating Manual and standards and specifications set periodically
by Licensor, using only materials and programs authorized by Licensor.
g. Refer guests and customers, whenever possible, only to
other System Hotels; use every reasonable means to encourage use of
System Hotels by the traveling public; display, as required, all
brochures, promotional and other material provided with respect to
System Hotels; and allow advertising and promotion only of System
Hotels on the Hotel premises.
h. Use at and for the Hotel, and for reservations offered by
and from the Hotel to other System Hotels, only the Reservation System
in accordance with the Operating Manual .
i. Not establish Licensee's own web site (or participate in
web sites established by others) on the Internet for the purpose of
accepting reservations for the Hotel or other System Hotels.
j. Honor and give first priority on available rooms to
confirmed reservations referred to the Hotel through the Reservation
System.
k. Prior to the Opening Date, purchase and install from Micros
Fidelio the HARMONY Product Suite, and operate HARMONY in accordance
with the Operating Manual. For the purposes of this Agreement, HARMONY
is the Licensor specified computer system which includes components
such as property and product management, guest information, revenue and
statistical information, yield management and availability controls,
database management, interfaces with Licensor's Reservation System and
its other central knowledge systems. If through
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no fault of Licensee, Licensee is unable to install HARMONY prior to
the Opening Date, Licensee must notify Licensor and request an
extension. If Licensor grants the extension Licensee will purchase and
use a printer and other necessary data processing and
telecommunications devices specified by Licensor for the purpose of
handling reservations through the Reservation System and for updating
the Hotel's database until HARMONY is installed.
(i) Licensee acknowledges that continuing
technological improvements may require Licensor to
periodically improve, modify or replace the Reservation System
and HARMONY ("Systems"). In such event, Licensee will
purchase, install and maintain the equipment required by
Licensor in connection with any such improvements or
modifications to, or replacements of, the Systems. Licensor
will use reasonable efforts to give Licensee as much notice as
reasonably possible under the circumstances to accomplish
this.
(ii) Licensor has no liability whatsoever to Licensee
if the Systems become inoperable or cease to function for any
period of time due to equipment failure or for any other
reason or cause, except as a result of Licensor's gross
negligence or willful misconduct.
l. Honor those credit cards designated periodically in the
Operating Manual, and enter into all necessary credit card arrangements
with the issuers of such cards.
m. Feature in guest rooms and public areas of the Hotel, on
articles specified in the Operating Manual, including the brochure
rack, and in advertising and promotional material, the appropriate
Marks, strictly in accordance with the Operating Manual, including
color, form and content; and provide a guest amenity package prescribed
by Licensor in each guest room.
n. Erect, install and maintain System signage in complete
working order on the exterior of and throughout the interior of the
Hotel in accordance with the Operating Manual, and obtain Licensor's
approval of the plans and specifications for all signage prior to
installation.
o. Identify itself as a licensed independently owned and
operated entity with respect to the ownership and operation of the
Hotel on all purchase orders, invoices and other dealings with
suppliers and persons, to make it clear that Licensee is an independent
entity and that Licensor has no liability for Licensee's debts or
conduct, including:
(i) Displaying the Radisson License Agreement Plaque behind
the front desk in the registration area so as to be visible to
guests checking in.
(ii) Posting a notice visible to Hotel employees on the
employee bulletin board, identifying the correct name of their
employer and clearly stating that neither Radisson Hotels
International, Inc. nor Radisson Hotel Corporation is their
employer.
p. Operate the Hotel continuously, either directly or through
a management company authorized by Licensor.
q. Employ as general manager of the Hotel only such person as
Licensor approves; cause the general manager (and other key employees
designated by Licensor) to attend and successfully complete Licensor's
orientation training program prior to their hire at a place
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designated by Licensor; and pay the wages, travel, lodging, food, and
incidental expenses of such persons attending the orientation training.
r. Require the Hotel's general manager to attend the
System-wide business conference and pay an assessment equal to the
Hotel's pro rata share of the cost of meals, guest speakers and
trainers, media presentations and similar items in connection with such
conference, regardless of whether the general manager attends.
s. Require the appropriate Hotel personnel to attend any other
required periodic general meetings and training in specialized fields
at locations selected by Licensor, and pay wages, travel, lodging, food
and incidental expenses for Licensee's employees who attend, and such
reasonable amounts assessed by Licensor to recover Licensor's costs
with respect to such meetings and training.
t. Make no major structural change or changes in the
appearance of the Hotel without Licensor's consent; rehabilitate the
Hotel periodically in accordance with the Operating Manual; and
periodically modernize and upgrade the Hotel to conform with standards
applicable generally to similar System Hotels.
u. Maintain the Hotel in a clean, safe, attractive and orderly
condition, and provide efficient, courteous and high-quality service to
guests and visitors in accordance with the Operating Manual, including
high quality food and beverage service.
v. Participate in all System, training, marketing and
advertising programs, including the programs adopted for all System
Hotels and for groups of System Hotels having geographic, class or
business orientation interests in common with the Hotel, and pay the
then current assessments related to such programs. The programs are
subject to change by Licensor. The programs and related costs as of the
effective date of the Uniform Franchise Offering Circular delivered to
Licensee prior to the signing of this Agreement, are generally
identified in that document. The programs include, but are not limited
to:
(i) The Radisson 100% Guest Satisfaction Guarantee
which is comprised of the "Yes I Can! Guest Service
at Radisson" training program, the "Yes I Can! Making
It Right" training program and the "100% Guest
Satisfaction Guarantee Overview" training program;
and pay Licensor's then current program charges and
expenses assessed to System Hotels, including an
administrative fee, which, as of the date of this
Agreement, is $75.00 per complaint that Licensor is
required to resolve on behalf of a Hotel.
(ii) The Radisson Corporate Scrip program including
accepting scrip (Room Certificates) in payment for
rooms.
(iii) The SMART program of joint marketing as a
member of a "SMART Group" which consists of other
System Hotels having common geographic, class or
business orientation interests. Before opening for
business as a System Hotel, Licensee may participate
in its SMART Group upon payment of a lump sum,
prorated assessment, as established for the Hotel by
Licensor or the RMA.
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w. Promptly deliver to Licensor a copy of any notice of
default received from any mortgagee, trustee under any deed of trust,
or ground lessor with respect to the Hotel; and, upon request of
Licensor, provide additional information with respect to such alleged
default or any action or proceeding related to it.
x. Keep Licensee's copy of the Operating Manual current and up
to date with contents as provided by Licensor; comply with all
provisions of the Operating Manual as it exists from time to time;
promptly take steps necessary to correct any deficiencies resulting
from non-compliance with the requirements of the Operating Manual or
this Agreement; refrain, even after the term of this Agreement,
absolutely from disclosing to a third party or using any confidential
or proprietary information, or trade secret owned by Licensor and
disclosed to Licensee by Licensor in any form, except to persons who
need access to the information to perform their responsibilities in the
operation of the Hotel; return out-of-date contents of the Operating
Manual as they are replaced; and return the Operating Manual, related
software and other confidential and proprietary information to Licensor
promptly upon termination or expiration of this Agreement, or a
transfer (as defined in Paragraph 11).
y. Not offer Hotel guestrooms for sale or lease as anything
other than hotel guestrooms, including condominium or time share units.
z. Have a card key locking system that has the ability to be
reprogrammed with each new guest, operational on all guest room doors
in the Hotel.
aa. Integrate all computer systems in the Hotel (hardware and
software) and ensure that they will record, store, process and present
data incorporating calendar dates falling on or after January 1, 2000
in the same manner and with the same functionality that all of the
Hotel's systems record, store, process and present data with calendar
dates falling on or before December 31, 1999.
8. Operating Reports; Accounting Standards. Licensee shall record all
sales and revenues and maintain records as required by the Operating Manual.
Licensee shall submit to Licensor by the 15th of each month a statement and
operating report, in form and content designated periodically by Licensor,
showing amounts due to Licensor under Paragraph 5 for the preceding month(s) and
Gross Room Sales, occupancy data and average room rates. The report shall be
certified by either the Controller or Chief Financial Officer of Licensee.
Licensee shall supply to Licensor electronic access to Licensor designated data
stored in HARMONY (when installed), including statistical information, revenues,
guest information, reservations and product information.
Licensee shall prepare on a current basis financial records as required
by the Operating Manual which fully and accurately reflect all aspects of the
operation of the Hotel. Such records shall be kept under the Uniform System and
shall be preserved for not less than three years. Such records shall include
books of account, tax returns, governmental reports, register tapes, daily
reports and complete monthly and annual financial statements.
Licensee shall deliver to Licensor as soon as available, but not later
than 90 days after the end of Licensee's and the Hotel's fiscal years,
respectively, copies of Licensee's and the Hotel's annual financial statements,
certified at Licensee's cost by a Certified Public Accountant. Licensor will
accept the certification of Licensee's Chief Financial Officer if certification
by a Certified Public Accountant is not obtained by Licensee in the ordinary
course of business. During the term of this Agreement and for 3 years afterward,
Licensor or its designees may inspect, copy and audit such records and any other
information required to be kept pursuant to this Agreement (including records of
any tenant, management company or
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concessionaire of Licensee) during normal business hours where the records are
kept. If an audit discloses a deficiency in any payments due hereunder, Licensee
shall immediately pay the deficiency. If the deficiency is willful or exceeds 5%
of the correct amount, Licensee shall also immediately reimburse Licensor's
entire cost of the audit, including travel, lodging, meals, reasonable
professional fees, salaries and other expenses of the auditing personnel. This
obligation to reimburse is in addition to, and does not affect Licensor's right
to terminate this Agreement when such deficiency is willful.
Licensee will submit to Licensor as soon as available but not later
than 105 days after the end of the Hotel's fiscal year, a statement of the Gross
Room Sales, occupancy and average room rates for such year, certified as correct
by Licensee's Chief Financial Officer.
9. Insurance. Licensee shall secure and maintain commercial general
liability insurance providing coverage for personal injury and bodily injury,
property damage, products liability, liquor liability, contractual liability and
comprehensive automobile liability, with a combined single limit of not less
than $15,000,000 per occurrence, or better, or in such other amounts or coverage
as Licensor periodically may require. The amount of self insured retention or
deductible applicable to any of the coverages must not exceed amounts reasonably
acceptable to Licensor in its sole discretion, provided that the commercial
general liability policy shall have no deductible. Licensee will name Licensor
and its subsidiaries and affiliates in said policy or policies as additional
insureds, and such policy or policies shall stipulate that Licensor shall
receive 30-day written notice of cancellation or material change of the policy.
Licensee also shall secure and maintain:
a. worker's compensation insurance as prescribed by applicable
law, and employer's liability coverage with a limit of not less than
$1,000,000 each accident or disease;
b. dram shop insurance, naming Licensor and Radisson Hotel
Corporation as additional insureds with limits of not less than
$10,000,000 per occurrence;
c. fire insurance with extended coverage in replacement cost
endorsements covering the Hotel and the improvements thereon for not
less than 80% of the full replacement value; and
d. insurance required under any lease, mortgage or deed of
trust covering the Hotel.
Licensor may change the insurance requirements from time to time
including requiring different or additional coverages and minimum limits to
reflect changes in relevant circumstances including changes in standards of
liability and higher damage awards.
Licensee shall mail original certificates of insurance and evidence of
policy renewals 30 days before expiration to Licensor, Attention: Contract
Administration, X.X. Xxx 00000, Xxxxxxxxxxx, Xxxxxxxxx 00000-0000. All policies
shall be written by insurance companies having a Best Rating of A-5 or better.
Licensee shall have all policies of insurance provide that the
insurance company will have no right of subrogation against either party hereto
or their respective agents or employees. Licensee assumes all risks in
connection with the adequacy of any insurance or self-insurance program, waives
any claim against Licensor for any liability, costs or expenses arising out of
any claim not adequately insured or self insured, in part or in full, of any
nature whatsoever.
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10. Indemnification. Licensee will indemnify and hold harmless,
Licensor and its affiliates against and from all fines, penalties, taxes,
expenses, claims, causes of action, demands, losses or damages originating: (a)
in or about the Hotel or in connection with the development or operation of the
Hotel; (b) from any occurrence at the Hotel; (c) for any act, omission or
obligation of Licensee, its officers, employees, and agents, or any affiliate or
other entity associated with Licensee related in any way to this Agreement or
transactions contemplated hereunder or the development or operation of the
Hotel; and (d) for all liability and expenses with respect to mechanic's lien
claims for material or labor in connection with the Hotel. Licensee will
reimburse Licensor and its affiliates for any payments, including reasonable
attorney's fees or expenses, by reason of the above or by reason of attorneys'
fees or expenses for pursuing the right to indemnification granted herein.
Licensee will also defend Licensor against the same except Licensor, using its
own counsel1 by notice to Licensee may control any matter in which Licensor is
named or directly affected. The indemnification provided in this Paragraph does
not apply to the direct consequences of Licensor's gross negligence or willful
misconduct, so long as claims or demands are not asserted on the basis of
theories of (i) vicarious liability, including agency, apparent agency or
employment, (ii) negligent failure to compel Licensee's compliance with the
provisions of the Operating Manual or this Agreement. Licensee's obligations
pursuant to this Paragraph 10 shall survive termination or expiration of this
Agreement.
11. Transfer. A Transfer includes the voluntary or compulsory giving to
another, directly or indirectly and by operation of law or otherwise, of all or
any part of that which is being transferred by any means or device, including an
assignment, transfer, conveyance, security interest, encumbrance, divestiture,
sale, disposition, pledge, foreclosure, levy, attachment, execution, trade,
lease, sublease, gift, bequest, inheritance and delegation.
a. Transfers By Licensor. Licensor may Transfer this Agreement
without Licensee's approval. Licensor will provide Licensee
with written notice of any such Transfer upon or after its
effective date. As a condition to the Transfer, the transferee
will be required to assume all of Licensor's obligations.
b. Transfers By Licensee, Generally. Licensor entered into
this Agreement based on negotiations which are specific to the
circumstances and relationship between Licensor and Licensee
as well as those which apply generally to all System Hotels.
As a result, the restrictions imposed on any Transfer are
reasonable and necessary to enable Licensor (i) to protect the
System and the Marks for the benefit of Licensor and other
System Hotels and (ii) to take the relationship with any
transferee into account with respect to (a) the decision
whether to allow the Transfer, (b) the decision whether to
allow the Transfer of this Agreement or require the transferee
to sign a new agreement and (c) the terms of any new license
agreement.
Except as provided otherwise in this Paragraph, Licensee will
not Transfer or permit the Transfer of Licensee's Hotel
business, the Hotel, this Agreement, any Equity Interest2 or
all or substantially all of Licensee's assets (collectively,
"Business Assets") without obtaining Licensor's approval and
only after complying with all of the conditions contained in
this Paragraph with respect to a particular Transfer. An
Equity Interest is any stock membership, partnership or other
ownership interest in Licensee. Licensee shall keep Licensor
fully informed at all times of the identities and percentage
interest of each
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1 and at its own expense,
2 in excess of fifteen percent (15%)
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owner of an Equity Interest, legal and beneficial, ("Owner")
of a 5% or greater of the total Equity Interests.
c. Transfers To Family/Between Owners. There are no
restrictions on Transfers of Business Assets from a natural
person to that person's spouse, children or grandchildren,
trust or estate, or to any other Owner, who was an Owner as of
the date of this Agreement, except that (i) if Licensee is the
transferor, Licensee, while alive, or Licensee's estate (until
the estate is closed), must remain primarily liable under this
Agreement, (ii) no Transfer of the Hotel to a natural person,
trust or estate can take place without a Transfer of this
Agreement to that same person, trust or estate, and (iii)
transferee must enter into a written agreement with and
satisfactory to Licensor, providing that the transferee
assumes the obligations of Licensee under this Agreement. In
all such Transfers, Licensee must notify Licensor immediately
after the Transfer takes place.
d. Transfers To Affiliates. There are no restrictions on
Licensee's Transfer of any of its Business Assets to an
Affiliate except that (i) no Transfer of the Hotel can take
place without a Transfer of this Agreement to that same
Affiliate, (ii) Licensee must notify Licensor immediately
after the Transfer is effective, and (iii) transferee must
enter into a written agreement with and satisfactory to
Licensor, in its sole discretion, providing that the
transferee assumes the obligations of Licensee under this
Agreement. An Affiliate is an entity controlled by,
controlling or under common control with, directly or
indirectly, Licensee. Control means the legal right or
effective ability, directly or indirectly, to direct or cause
the controlled entity to act in accordance with the
controlling entity's instructions.
e. Sale to Public. If Licensee is a corporation and desires to
sell any part of its authorized capital stock to the public
pursuant to either federal or state securities laws, Licensee
will provide Licensor with a copy of the proposed offering
circular or prospectus for its review at least thirty (30)
business days prior to the time that the offering circular or
prospectus is filed with any state securities commission or
the United States Securities and Exchange Commission. At the
same time, Licensee will pay Licensor the then current
non-refundable administrative fee, which as of the date of
this Agreement is1. One or more of the Owners, who were Owners
as of the date of this Agreement or subsequently approved by
Licensor, at all times, must retain direct Control of Licensee
after the offering. Licensor has the right to attend all "due
diligence" meetings held in connection with the offering, and
Licensee will give Licensor at least five (5) business days
prior written notice of all such meetings. Licensee will not
offer its capital stock under any of the Marks or any
deceptively similar names. Licensee must make it clear in the
relevant documents that Licensor is not participating in or
endorsing the offering. In addition, Licensee is obligated to
ensure that the underwriters and all participants in the
offering, including Licensee fully indemnify Licensor with
respect to the offering.
f. Publicly Traded Equity Interests. There are no restrictions
on the Transfer of publicly traded Equity Interests as long as
no person owns or controls directly or indirectly, more than
five percent (5%) of the issued and outstanding voting Equity
Interest in Licensee.
g. Lender's Security. Licensee may Transfer this Agreement by
way of a collateral assignment to a lender in connection with
securing financing for the purchase and
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1 three thousand dollars ($3,000)
11
12
construction/renovation of the Hotel through a mortgage on, or
deed of trust with respect to, the Hotel, with Licensor's
approval, which approval will be evidenced by a written
agreement signed by Licensor, Licensee and the lender, on
terms and conditions satisfactory to Licensor1
i. Transfers of Agreement And Hotel. Except for Transfers
authorized by paragraphs 11(c), (d), (e), (f) and (g),
Licensee will not Transfer this Agreement without, at the same
time, Transferring the Hotel to that same person, which
Transfer is subject to Licensor's approval based on the
following conditions being met as of the date of the Transfer:
(i) Licensee has complied in all respects with the
applicable provisions of this Paragraph 11; and
(ii) All of Licensee's monetary obligations due to
Licensor have been paid in full, and Licensee is not
otherwise in default under this Agreement; and
(iii) The transferee files an application on the form
prescribed by Licensor at least sixty (60) days prior
to the effective date of the Transfer and, within
that time period, demonstrates to Licensor's
satisfaction that transferee meets Licensor's then
current requirements for the granting of a license to
operate a System Hotel; and
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1 and substantially consistent with Exhibit B attached hereto.
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(iv) The transferee, at Licensor's option, signs a
written agreement with and satisfactory to Licensor,
providing that the transferee assumes the obligations
of Licensee under this Agreement, or Licensor's
then-current standard License Agreement for a term
ending with the term of this Agreement, but with fees
and other provisions which may differ materially from
this Agreement; and
(v) Prior to the date of Transfer, if held, or at the
first one scheduled after the Transfer, the general
manager of the Hotel and other key employees
designated by Licensor must attend Licensor's
orientation training; and
(vi) Licensee or transferee taking or agreeing to
take measures to comply with Licensor's requirements
with respect to (a) any construction and other
matters set forth in a Property Improvement Plan
prepared by Licensor; and (b) improvements in the
Operation of the Hotel needed to meet System
standards, regardless of whether Licensor has
required or requested Licensee to take such measures
at any time prior to the request for approval of the
Transfer. Licensor's failure to conduct an inspection
and provide a Property Improvement Plan or list of
operational improvements before the Transfer, whether
with respect to a Transfer or otherwise, does not
constitute a waiver of Licensor's right to enforce
the provisions of this Agreement or the new license
agreement between Licensor and transferee after the
Transfer, as applicable, with respect to the same or
different subject matter; and
(vii) Licensee signing and delivering to Licensor a
general release on terms and conditions acceptable to
Licensor in its sole discretion; and
(viii) Licensee paying a non-refundable transfer fee
in effect as of the date of the Transfer, which, as
of the effective date of this Agreement is the
greater of $15,000 or 50% of the total Initial
License Fee paid pursuant to paragraph 5(a).
12. Third Party Operators. The engagement of third party operators of
the Hotel's restaurants, cocktail lounges or other supplementary departments,
whether through leases, management agreements or otherwise, shall be subject to
Licensor's prior written approval1 In addition, whether by inclusion of
appropriate provisions in applicable documents or otherwise, Licensee shall
require all third party operators of the referenced operations and retail shops
and other facilities open to the public to operate and maintain them in the same
manner as Licensee would be required if Licensee were operating them directly.
13. Default. The following events constitute a default and good cause
for Licensor to terminate the License and this Agreement, immediately upon
written notice to Licensee unless provided otherwise below:
a. Licensee becomes insolvent, or is adjudicated bankrupt, or
files a voluntary petition or pleading under the Federal Bankruptcy
Code or under any other state or federal bankruptcy or insolvency laws;
an involuntary petition is filed with respect to Licensee under the
Code or any such laws; a permanent or temporary conservator, receiver
or trustee is appointed for the Hotel or all or substantially all of
Licensee's assets; a levy, execution or attachment takes place against
the Hotel or all or substantially all of Licensee's assets, subject to
being cured through a
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1 , which approval shall not be unreasonably withheld.
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release, stay or satisfaction within1 days; a final judgment is entered
against Licensee2 subject to being cured by satisfaction, discharge,
vacation, reversal or stay within3 days of entry of the judgment;
Licensee makes an assignment for the benefit of creditors or a written
statement to the effect that Licensee is unable to pay its debts as
they become due.
b. Except as provided in Paragraph 14, Licensee ceases to
operate the Hotel, ceases to operate the Hotel as part of the System,
or loses possession or the right to possession of all or a significant
part of the Hotel through sale or otherwise.
c. A transfer occurs or is attempted in violation of Paragraph
11.
d. Licensee, any Holder or an officer, member, partner,
principal, majority shareholder or director of Licensee is convicted of
a felony or other crime of moral turpitude, which is likely to
adversely affect or reflect upon the Hotel or the parties or to impair
the goodwill associated with the Distinguishing Characteristics.
e. Licensee breaches or fails to comply with this Agreement or
the Operating Manual, and Licensee, subject to cure within 30 days (10
days if the breach or failure to comply involves the non-payment of
money owed to Licensor) after notice from Licensor specifying the
breach4
f. Licensee willfully underreports any information used for
the purpose of calculating any fees or other amounts payable to
Licensor under this Agreement or otherwise.
Licensee acknowledges that the events of default under (a) through (d)
and (f) above are not subject to cure, except as provided. This License and this
Agreement shall immediately terminate automatically (to the extent permitted by
law), effective upon the happening of such event or the specified cure period,
as applicable.
Upon termination or expiration of this Agreement, Licensee immediately
shall cease all use of the System and the Distinguishing Characteristics.
Licensee shall make physical changes to the Hotel to remove the Distinguishing
Characteristics and to preclude a likelihood of confusion by the public as to
the status or affiliation of the Hotel, including removal of all signs
containing the word "Radisson" or any of the other Marks. Licensee authorizes
Licensor to enter the premises of the Hotel to make such changes, at Licensee's
expense, if Licensee fails to complete the changes within 30 days after
termination or expiration.
Upon termination (but not expiration) of this Agreement, Licensee will
immediately pay Licensor5
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1 sixty (60)
2 in excess of $100,000,
3 ninety (90)
4 ("Default Notice"); however, if Licensee's failure to comply with this
Agreement does not involve the non-payment of money owed to Licensor and
Licensee commences to cure such failure during the initial thirty (30) day
period and continuously prosecutes such cure to completion with all due
diligence, then Licensee shall have a total of one hundred and eighty (180) days
after the Default Notice to cure.
5 a premature termination fee, which the parties agree is a reasonable estimate
of damages to which Licensor would be entitled related to early termination
(which are otherwise difficult to determine), and are not a penalty, according
to the following formula: (i) in the first ten (10) years of this Agreement, the
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Upon the termination or expiration of this Agreement, Licensee is not
entitled to any compensation related to the concept of "goodwill" arising out of
Licensee's use of the Distinguishing Characteristics or the operation of the
Hotel.
In addition to any other remedies Licensor may have, upon an event of
default by Licensee, Licensor, at the same time a notice of default is sent,
may, upon fourteen (14) days written notice to Licensee, suspend access to the
Reservation System and any other services to be provided under Paragraph 6 of
this Agreement until the default is cured by Licensee. Suspension of any of such
services does not constitute a constructive termination of this Agreement, and
Licensee shall not seek or be entitled to equitable relief preventing or
curtailing Licensor's rights under this paragraph.
Licensee will pay all costs, expenses and reasonable attorneys' fees
incurred by Licensor in enforcing the terms and conditions of this Agreement.
Licensee's obligations contained in this Paragraph 13 shall survive the
termination or expiration of this Agreement.
14. Condemnation or Casualty. If the Hotel or a substantial part
thereof is taken by or sold under threat of eminent domain, Licensee ceases to
operate the Hotel, and Licensee is otherwise in good standing under the License,
Licensee may either terminate this Agreement without liability for damages
related to early termination, or transfer the License to a new hotel at a
location selected by Licensee (subject to the consent of Licensor) for the
remainder of the term of this Agreement. Licensor will respond to Licensee's
application for such new location within six months of the taking or sale. If
approved, Licensee will construct the new hotel in accordance with this
Agreement, System standards and the Operating Manual, and open the Hotel for
business within two years of its closing.
If the Hotel is damaged or destroyed by fire or other casualty,
Licensee will promptly repair the damage (in accordance with Licensor's
then-current standards). If the casualty requires closing the Hotel, Licensee
shall, within 45 days of such closing, provide Licensor with written notice of
Licensee's election to either (i) repair the damage and reopen the Hotel, or
(ii) terminate this Agreement without liability for damages related to premature
termination. If, within 2 years of Licensee's election to terminate pursuant to
(ii) above, Licensee decides to relocate or repair and reopen the Hotel, this
Agreement shall be deemed to have been terminated for default. This provision
shall survive such termination of this Agreement. If Licensee elects to repair
and reopen pursuant to (i) above, Licensee, within six months after closing the
Hotel, will commence reconstruction of the Hotel upon the premises or a new
location selected by Licensee subject to Licensor's consent and in accordance
with this Agreement, System standards and the Operating Manual. In such event,
the Hotel must reopen for business within two years after closing.
If Licensee elects to terminate this Agreement in either of these
situations, all fees and other amounts due or incurred through the cessation of
operation shall be paid at the time notice of the election is given, and
Licensee shall comply with all other post termination obligations contained in
this Agreement.
--------------------------------------------------------------------------------
premature termination fee shall be in an amount equal to four percent (4%) of
the Gross Rooms Sales at the Hotel during the twenty four (24) full calendar
months immediately preceding the date of termination. (If the Hotel has been a
Radisson(R) hotel for less than twenty four (24) months, then the termination
fee shall be four percent of the average monthly Gross Room Sales since opening
multiplied by twenty four (24); or (ii) in the second ten (10) years of the term
of this Agreement, the premature termination fee shall be in an amount equal to
four percent (4%) of the Gross Room Sales at the Hotel during the twelve (12)
full calendar months immediately preceding the date of termination.
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Closing of the Hotel due to condemnation or casualty does not extend
the term of the License or this Agreement.
15. Rights to the Distinguishing Characteristics. The contents of the
Operating Manual, including contents which have been replaced, and all other
information marked confidential and proprietary by Licensor, are confidential
and proprietary. Licensee acknowledges and will not contest Licensor's right,
title and interest to the Distinguishing Characteristics or the goodwill derived
from them. Licensee disclaims any right or interest in the Distinguishing
Characteristics beyond the qualified License granted herein. Licensor may change
the Distinguishing Characteristics periodically and Licensee agrees to implement
such changes immediately. All present and future Distinguishing Characteristics,
including any improvements and additions to them, whether by Licensor or
Licensee, shall be Licensor's property and inure to its benefit. Licensee shall
not use or permit others to use any of the same without Licensor's written
consent. Licensee shall not use the name "Radisson" or another element of the
Distinguishing Characteristics in or as its corporate or trade name, but shall
file appropriate notices required under an applicable fictitious or assumed name
law.
Licensor has the sole right to manage and resolve disputes with third
parties concerning the Distinguishing Characteristics. Licensee shall undertake
fully and without any reservation whatsoever to render to Licensor all
assistance in connection with any matter pertaining to the protection of the
Distinguishing Characteristics, and to promptly make available to Licensor, its
representatives, agents and attorneys such of Licensee's files, records and
other information pertaining to the business of Licensee as may be necessary in
providing such assistance.
Licensee agrees to enter into a Registered User Agreement with Licensor
as and when legislation so permits or requires.
Only those Marks listed in Licensor's Uniform Franchise Offering
Circular have been registered in the United States. Licensor is under no
obligation to apply for such registration with respect to any other Marks.
Licensee waives any claims against Licensor which may arise in whole or in part
in connection with or as a result of Licensor's failure to apply for or
inability to obtain such registration or to provide or to protect any rights to
the use of the "RADISSON" Xxxx or any other Marks.1
The License granted herein is specifically limited to the Licensed
Location and does not confer rights of any kind to any other location, area,
market or territory.2 Licensor reserves for itself and its affiliates, the
absolute right to3 non-hotel businesses, including timeshare, and grant others
the same rights, (i) using the System or the Marks, or both and (ii) using other
brands and systems, at locations as determined in Licensor's discretion, and
without any obligation to grant any such rights to Licensee.
16. Relationship of Parties; Interference with Others. Licensor retains
the right to regulate Licensee's conduct only to the extent necessary to protect
Licensor's interest in the Distinguishing
--------------
1 Notwithstanding the above, Licensor agrees to defend Licensee against any
third party action or proceeding challenging Licensee's use of the Marks,
provided Licensee's use of the Marks is in compliance with this Agreement.
2 Within the Protected Area, as defined in the First Addendum to License
Agreement attached hereto,
3 own or operate, and license others to own or operate ("Develop")
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Characteristics through promotion of standardization, uniformity of service, and
public goodwill for the benefit of both contracting parties. The power to
regulate the day-to-day operation of the Hotel, including daily maintenance,
safety concerns, working conditions and personnel matters, including sole
responsibility for hiring, discharging and setting the conditions of employment
for employees at the Hotel as well as complying with applicable employment laws,
rules and regulations, are vested solely and exclusively in Licensee. Licensee
is an independent contractor. Neither party is the agent, legal representative,
partner, subsidiary, joint venturer or employee of the other. Neither party
shall obligate the other or represent any right to do so. This Agreement does
not reflect or create a fiduciary relationship or a relationship of special
trust and confidence.
Licensee shall not solicit or employ any person who is employed by
Licensor or another System licensee. Neither party will interfere with
contractual relations of the other.
17. Miscellaneous Provisions. Notwithstanding any laws with respect to
choice of law under which any other law might be applicable, this Agreement and
the relationship between the parties is subject to and governed by the laws
(statutory or otherwise) of the state in which the Hotel is located.
Paragraph headings are for convenience and do not limit or qualify the terms of
this Agreement. Terms used in any number or gender include any other number or
gender where appropriate.
Licensor's consent, authorization or approval of any matter hereunder
is a permission only and not a representation, warranty or assurance. Approvals,
consents and authorizations by Licensor will not be unreasonably withheld1 or
delayed unless Licensor has reserved sole discretion, but will not be effective
unless given in advance, in writing and duly executed on behalf of Licensor,
unless specifically stated otherwise.
This Agreement, including Exhibit A and other documents pertaining to
the Hotel signed at the same time as this Agreement constitute the entire
agreement between the parties and supersede all prior representations,
agreements or understandings with respect to the Hotel. All of Licensor's
internal policies and procedures, whether or not communicated to Licensee, are
intended for Licensor's use only and are not a part of or intended to amend this
Agreement in any way.
Failure to require strict performance or to exercise any right or
remedy contained herein will not preclude any future requirement of strict
performance or the exercise of such right or remedy or any other right or
remedy.
Any right or remedy contained herein is cumulative to other rights or
remedies available pursuant to this Agreement, at law or in equity.
No change in this Agreement will be valid unless signed in writing by
both parties.
Any notices required or permitted shall be in writing and may be
delivered personally, by fax or by reliable expedited delivery companies
including Federal Express and DHL. Notices by fax are deemed delivered and
received upon transmission provided that the original is delivered personally or
sent by expedited delivery within 48 hours of the transmission by fax. Notices
by expedited delivery shall be deemed delivered and received on the fourth day
following the date on which the notice was given to the expedited delivery
company. Information for notices appears on page one of this Agreement, except
that
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1 conditioned
17
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notices to Licensor by expedited delivery companies must be addressed to
0000 Xxxxxx Xxxx X., Xxxxxxxx, XX 00000, and the notices must be addressed to
the attention of the Legal Department - Mail Stop 8249. If there is no
information for notices to Licensee on page one, notices to Licensee may be
faxed or sent based on information used in the ordinary course of business
between Licensor and Licensee.
Two copies of this Agreement may be signed, each of which, when signed,
is an original and which, together, constitute one and the same instrument, or
it may be signed in counterparts.
Where Licensee is prohibited by this Agreement from directly taking any
action, or where action by Licensee would constitute a default, Licensee agrees
that it will not encourage, authorize or permit any other person or entity,
directly or indirectly or under its direct or indirect control to take such
action.
Licensor may perform all of its obligations directly or through its
affiliates or third party consultants. Despite this, Licensee's obligations with
respect to such matters shall still run directly to Licensor.
The liability of all Licensees signing this Agreement is joint and
several.
All terms and conditions of this Agreement which, as a matter of logic
or otherwise, need to survive the expiration or termination in order to achieve
an intended or logical result, shall survive despite the absence of specific
survival language with respect to each of them.
The use of the words "including" "includes", "such as", for example"
are not intended to limit the list which follows, but is to be read as if the
words "but not limited to", "without limitation" or other phrase implying the
same meaning, as appropriate, unless otherwise stated.
Photocopies and facsimiles of this Agreement showing signatures are
fully binding and effective for all purposes.
Any right or remedy contained in this Agreement is cumulative to other
rights and remedies available at law or in equity.
If the Hotel is located in any one of the states listed in this
paragraph 17, or if the laws of any such state are otherwise found to be
applicable, then this Agreement is automatically amended to bring the provision
into compliance with the laws of such state to the extent that such compliance
can be achieved. If any provision of this Agreement violates the laws of any
state whose law is found to apply, this Agreement is automatically amended to
bring that provision into conformity with such law.
(A) ILLINOIS. If this Agreement is governed by the laws of the State of
Illinois, then: (1) any consent by Licensee to jurisdiction and venue
in Hennepin County, Minnesota may be inapplicable; provided, however,
that such inapplicability in the State of Illinois will not be
construed to mean that venue in Hennepin County, Minnesota is improper,
or that Licensee, its officers, Directors and shareholders are not
subject to jurisdiction in Hennepin County, Minnesota, or in any other
state; and (2) any acknowledgment made by Licensee in this Agreement
regarding financial performance or earnings information, which has the
effect of forcing Licensee to waive or release certain rights it has
under the Illinois Franchise Disclosure Act, is unenforceable.
(B) INDIANA. If this Agreement is governed by the laws of the State of
Indiana, then: (1) any provision regarding injunctive relief cannot
require Licensee to recognize the inadequacy of any remedy;
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(2) any provision which attempts to limit the period within which
Licensee may commence litigation or arbitration is subject to the
superceding provisions of I.C. 23-2-2.5(30) and I.C. 23-2-2.7(7); (3)
no provision may require or cause Licensee to waive any right under the
Indiana statutes with regard to prior representations made in the
Indiana Uniform Franchise Offering Circular; (4) Licensee's consent to
jurisdiction and venue in Hennepin County, Minnesota is subject to the
provisions of both I.C. 23-2-2.5 and 2.7; (5) a court of competent
jurisdiction will determine whether Radisson will be required to post a
bond or other security, and the amount of such bond or other security,
in any injunctive proceeding, and as provided by I.C. 23-2-2.7-1(10);
(6) Licensee's obligation to indemnify Radisson does not apply to any
liability caused by Licensee's proper reliance on or use of procedures
or materials provided by Radisson or by Radisson's negligence; (7) any
transfers permitted in this Agreement are subject to I.C.
23-2-2.7-1(5); (8) any provision requiring Licensee to pay attorneys'
fees incurred by Radisson in enforcing this Agreement is governed by
I.C. 23-2-2.7-1(10); (9) any provision requiring Licensee to waive the
right to trail by jury is prohibited pursuant to I.C. 23-2-2.7-1 (10);
and (10) pursuant to Ind. Code Section 23-2-2.7-2 (2) and Ind. Code
Section 23-2-2.7-2 (4), if Radisson agrees to a "radius clause" (under
which it agrees not to open or license another System Hotel within a
defined geographic area), Radisson will not operate or manage System
Hotels in that area. If there is no "radius clause", Radisson will
comply with the Indiana law requiring Radisson not to establish System
Hotels which would compete unfairly with Licensee in a reasonable area.
(C) MARYLAND. If this Agreement is governed by the laws of the State of
Maryland, then: (1) any consent by Licensee to jurisdiction and venue
in Hennepin County, Minnesota may be inapplicable, and Licensee may
bring a lawsuit in the State of Maryland for claims arising under the
Maryland Franchise Registration and Disclosure Law; provided, however,
that such inapplicability in the State of Maryland will not be
construed to mean that venue in Hennepin County, Minnesota is improper,
or that Licensee, its officers, Directors and shareholders are not
subject to jurisdiction in Hennepin County, Minnesota, or in any other
state; (2) if a general release is required as a condition of renewal
or transfer, such release may not apply to any liability under the
Maryland Franchise Registration and Disclosure Law; and (3) any
acknowledgments made by Licensee in this Agreement may not be construed
to act as a waiver of Licensee's rights under the Maryland Franchise
Registration and Disclosure Law.
(D) MINNESOTA. If this Agreement is governed by the laws of the State
of Minnesota, then: (1) Radisson may not terminate this Agreement based
on Licensee's default without giving Licensee written notice at least
ninety (90) days prior to the date of such termination, and giving
Licensee sixty (60) days after receipt of such written notice within
which to correct the breach specified in the written notice, subject to
those instances when Radisson may lawfully terminate immediately
without an opportunity to cure; (2) a court of competent jurisdiction
will determine whether Radisson will be required to post a bond or
other security, and the amount of such bond or other security, in any
injunctive proceeding commenced by Radisson against Licensee or
Licensee's shareholders; and (3) to the extent required by Minnesota
law, Radisson will protect Licensee's right to use Radisson's Marks and
indemnify Licensee from any losses, costs or expenses arising out of
any claim, suit or demand regarding the use of Radisson's Marks.
(E) NEW YORK. If this Agreement is governed by the State of New York,
then: (1) any provision of this Agreement regarding revisions to and
maintenance of the Operating Manuals are automatically amended to
provide that such modifications to the Operating Manuals will not
unreasonably increase Licensee's obligations or place an excessive
economic burden on Licensee's operations; (2) any provision of this
Agreement regarding indemnification is automatically amended to require
Licensee to indemnify Radisson against, and will reimburse Radisson
for, any damages resulting from Licensee's breach of this Agreement,
Licensee's negligence or any civil, criminal or other wrong committed
by Licensee during the
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term of this Agreement; and (3) any provision of this Agreement
regarding transfers is automatically amended to provide that all rights
enjoyed by Licensee, and any causes of action arising in its favor from
the provisions of Article 33 of the General Business Law of the State
of New York and the regulations issued thereunder, shall remain in
force; it being the intent of this provision that the non-waiver
provisions of General Business Law Section 687.4 and Section 687.5 be
satisfied.
(F) NORTH DAKOTA. If this Agreement is governed by the laws of the
State of North Dakota, then: (1) Radisson may not terminate this
Agreement based on Licensee's default without giving Licensee written
notice that Licensee has breached this Agreement, and giving Licensee
thirty (30) days after receipt of such written notice within which to
correct the breach, subject to those instances when Radisson may
lawfully terminate immediately without an opportunity to cure; (2) any
provision requiring the payment of a fixed amount or an amount based on
a specific formula as a measure of damages or for exercising Licensee's
option to terminate without cause may constitute a penalty and may be
unenforceable; and (3) the consent by Licensee to jurisdiction and
venue in Hennepin County, Minnesota may be inapplicable; provided,
however, that such inapplicability in the State of North Dakota will
not be construed to mean that venue in Hennepin County, Minnesota, is
improper, or that the Licensee, its officers, Directors and
shareholders are not subject to jurisdiction in Hennepin County,
Minnesota, or in any other state.
(G) RHODE ISLAND. If this Agreement is governed by the laws of the
State of Rhode Island, then Section 19-28.1-14 of the Rhode Island
Franchise Investment Act provides that a provision in a franchise
agreement restricting jurisdiction or venue to a forum outside of Rhode
Island or requiring the application of the laws of another state is
void with respect to a claim otherwise enforceable under this Act.
(H) SOUTH DAKOTA. If this Agreement is governed by the laws of the
State of South Dakota, then: (1) Radisson may not terminate this
Agreement based on Licensee's default without giving Licensee written
notice that Licensee has breached this Agreement, and giving Licensee
thirty (30) days after receipt of such written notice within which to
correct the breach, subject to those instances when Radisson may
lawfully terminate immediately without an opportunity to cure; (2) any
provision which attempts to limit the period within which Licensee may
commence litigation or arbitration may not be enforceable under South
Dakota law; (3) any provision requiring the payment of a fixed amount
or an amount based on a specific formula as a measure of damages or for
exercising Licensee's option to terminate without cause, may constitute
a penalty and may be unenforceable; (4) any provision of this Agreement
which designates jurisdiction or venue outside of the State of South
Dakota or requires Licensee to agree to jurisdiction or venue in a
forum outside of the State of South Dakota is void with respect to any
cause of action which is otherwise enforceable in the State of South
Dakota; provided, however, that such inapplicability in the State of
South Dakota will not be construed to mean that venue in Hennepin
County, Minnesota is improper, or that Licensee, its officers,
Directors and shareholders are not subject to jurisdiction in Hennepin
County, Minnesota, or in any other state; and (5) pursuant to SDCL
37-5A-86, any acknowledgment provision, disclaimer or integration
clause or other provision having a similar effect in this Agreement
will not negate or act to remove from judicial review any statement,
misrepresentation or action that violates Chapter 37-5A or a rule or
order under Chapter 37-5A.
(I) WASHINGTON. If this Agreement is governed by the laws of the State
of Washington, then: (1) the relationship provisions of R.C.W.
19.100.180 or other requirements of the Washington Franchise Investment
Protection Act (the "Act") will prevail over the inconsistent
provisions of the Franchise Offering Circular and this Agreement with
regard to any franchise sold in Washington;
20
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(2) a release or waiver of rights executed by Licensee will not include
rights under the Act except when executed pursuant to a negotiated
settlement after this Agreement is in effect and where the parties are
represented by independent counsel; and (3) provisions such as those
which unreasonably restrict or limit the statute of limitations period
for claims under the Act, or rights or remedies under the Act like a
right to a jury trial, may not be enforceable.
(J) WISCONSIN. If this Agreement is governed by the laws of the State
of Wisconsin, then the provisions of the Wisconsin Fair Dealership Law,
Wis. Stat. Chapter 135, will supersede any conflicting terms of this
Agreement.
RADISSON HOTELS INTERNATIONAL, INC. LEISURE TIME HOSPITALITY, INC.
By: /s/ By: /s/
----------------------------------- ---------------------------------
Print Name: T. Xxxxx Xxxxx Print Name: Xxxxx X. Xxxxx
--------------------------- -------------------------
Its: President - Development Division Its: Executive Vice President
---------------------------------- --------------------------------
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EXHIBIT A
PROJECT RIDER TO
LICENSE AGREEMENT
1. General. Licensee shall design and build, renovate, rebuild or substantially
alter the Hotel, (the "Project") in accordance with Licensor's requirements as
set forth in the License Agreement, this Rider and any attached Exhibits or
Addenda, the Operating Manual, approved Plans and other System information
issued by Licensor in the ordinary course of business ("Licensor's
Requirements").
2. Cooperation. Licensee will cooperate with Licensor in the exchange of all
information regarding the Project and will ensure the cooperation of others
under its direction or control. At Licensor's request, Licensee and such others
engaged by Licensee on the Project as Licensor may reasonably request, will
attend a Project meeting at Licensor's offices in Minneapolis, Minnesota.
3. Design and Construction Services. The engagement of the architect, engineer,
contractor and other design and construction professionals by Licensee for the
Project after the execution of this Rider is subject to Licensor's approval.
Prior to their engagement, Licensee shall furnish Licensor with information in
such detail as will enable Licensor to evaluate their qualifications and
capabilities. If Licensor does not object to their engagement within thirty (30)
days of the receipt of that information, or such other information as Licensor
may reasonably request, their engagement shall be deemed approved.
4. Approval of Plans. Before starting the Project, Licensee shall submit
proposed preliminary and final plans, specifications, scheme boards and drawings
for the Project, including proposed equipment, furnishings, facilities,
landscaping, and signs with such detail and containing such information as
Licensor may reasonably request (the "Plans"), for Licensor's consent. Licensee
shall not begin the Project unless and until Licensor gives its consent to the
Plans. Thereafter, Licensee shall make no change to the Plans without Licensor's
consent. Licensee shall cause the Hotel to be constructed or renovated according
to the Plans as consented to by Licensor.
5. Scheduling. Licensee shall begin the Project on or before1 by excavation for
footings in the case of new construction or major reconstruction, or initiation
of removal of prior fixtures, equipment and decor in the case of rehabilitation.
Once the Project has begun, Licensee shall diligently pursue the Project to
completion.
6. Inspection; Cooperation. Licensor shall have access to the Hotel and the
Project at all reasonable times to determine whether the Project is proceeding
on schedule, in accordance with the approved Plans and for any other purpose
reasonably related to the exercise of its rights and obligations. Licensee shall
cooperate fully, and require others involved in the Project to cooperate fully,
with Licensor in the exercise of Licensor's rights and obligations hereunder.
7. Acquisition of Equipment, Furnishings and Supplies. Licensee shall acquire
and install all fixtures, equipment, furnishings, furniture, signs and related
equipment, supplies, landscaping, and other items required by the Plans, the
License Agreement and the Operating Manual, and such other equipment,
furnishings and supplies as may be necessary in order to prepare the Hotel to
open for business in accordance with the License Agreement.
--------------
1 the date of execution of the License Agreement,
23
8. Opening the Hotel; Prior Consent. Licensee shall not open the Hotel for
business as a System Hotel unless: (a) Licensor has accepted in writing (i)
completion of the Project in accordance with the Plans or, if applicable, all
pre-opening requirements of any attached Exhibit, and (ii) the installation of
all equipment, furniture, furnishings, signs and related equipment, supplies,
landscaping, and other items as required by paragraph 7 and (b) Licensee pays
all amounts due Licensor and its affiliates. Licensee shall give Licensor
written notice that, in Licensee's opinion, Licensee has complied with all of
the terms and conditions of the License Agreement, the Operating Manual and the
Plans, and the Hotel is ready to open for business as a System Hotel. Licensor
shall use its best efforts within 15 days after receipt of such notice to
inspect the Hotel and to determine whether to authorize opening the Hotel for
business as a System Hotel, but Licensor shall not be liable for delays or loss
occasioned by Licensor's inability to complete its investigation and to make
such determination within said 15 days.
9. Cost of Project. Licensee shall bear the entire cost of the Project,
including the Plans, professional fees, licenses and permits, equipment,
furniture, furnishings and supplies.
10. Limitation on Licensor Liability. Licensee is responsible for complying with
the requirements of all governmental authorities, including the Americans With
Disabilities Act , with respect to the design and construction of the Hotel.
Licensee acknowledges that Licensor's right to inspect, review and approve the
Project and the Plans are exercised primarily to determine their compliance with
Licensor's Requirements relating to operational considerations and aesthetic
aspects of the Project such as architectural and interior design, landscaping,
color schemes, sizes, finishes and materials. Notwithstanding the right of
Licensor to consent to or authorize the Plans, the architect, engineer,
contractor and other design and construction professionals and to inspect and
accept the construction or renovation work at the Hotel, Licensor's review and
consent or approval of all or any part of the Project is a permission only, and
not an assurance, representation or warranty of the qualifications,
capabilities, suitability, adequacy, legality or performance of any persons,
design, item, or system, even though the Plans and Licensor's inspections and
consent may relate to architectural, engineering, safety, code compliance or
other matters. Licensor is not responsible for reviewing nor shall its review or
consent to any plan or design be deemed approval of any plan or design from the
standpoint of structural safety or conformance with building or other codes.
Licensor shall have no liability or obligation to Licensee, the architect,
engineer, contractor, subcontractors, suppliers or third parties with respect to
construction or renovation of the Hotel, Licensor's rights being reserved and
exercised solely for the purpose of assuring itself of Licensee's compliance
with the terms and conditions of the License Agreement insofar as they relate to
conformity to System standards.
RADISSON HOTELS INTERNATIONAL, INC. LEISURE TIME HOSPITALITY, INC.
By: /s/ By: /s/
---------------------------------- ---------------------------------
Print Name: T. Xxxxx Xxxxx Print Name: Xxxxx X. Xxxxx
-------------------------- -------------------------
Its: President - Development Division Its: Executive Vice President
--------------------------------- --------------------------------
24
ADDENDUM TO LICENSE AGREEMENT
FOR
RADISSON HOTEL LAKEFRONT CLEVELAND
CLEVELAND, OHIO
This Addendum to the License Agreement between Radisson Hotels
International, Inc. ("Licensor") and Leisure Time Hospitality, Inc. ("Licensee")
is dated and effective ______________________________.
1. Licensor agrees to reimburse or cause the RMA to reimburse Licensee for
Qualified Advertising expenses in an amount not to exceed a total of $25,000
during the first twelve (12) full calendar months after the Hotel opens as a
Radisson(R) Hotel and to the extent that Licensee complies with the requirements
of the RMA Local Qualified Advertising Reimbursement Program (the "Program") in
effect at the time the expenditures are made. A copy of the current Program is
attached hereto as Exhibit D and made a part hereof.
Such reimbursement shall be given in the form of a credit memo applied to
Licensee's account payable to Licensor, only after:
(a) The full RMA and Reservation Fee has been paid as and when
due; and
(b) Licensor has examined and approved the advertising and proof
of payment, which Licensee submits in accordance with Program
requirements.
Any credit granted under the Program will be suspended if Licensee fails to
comply with the provisions hereof, is in default of the License Agreement or if
a condition exists which would be a default if notice were given.
2. Subject to Paragraph 15 of the License Agreement, Licensor agrees that during
the term or until the earlier termination of the License Agreement, Licensor
will not own, operate or license another hotel under the name Radisson(R) within
the area as depicted as Exhibit C ("Protected Area"). Outside of the Protected
Area, Licensor reserves for itself and its affiliates, the absolute right to
Develop hotels and other non-hotel businesses, including timeshare, (i) using
the System or the Marks, or both and (ii) using other brands and systems, all
whether in competition with the Hotel or not, at locations as determined in
Licensor's discretion, and without any obligation to grant any rights to
Licensee with respect thereto.
3. Except as amended hereby, all of the other terms and provisions contained in
the License Agreement shall remain in full force and effect and this Addendum
and the License Agreement shall be merged and considered one instrument.
RADISSON HOTELS INTERNATIONAL, INC. LEISURE TIME HOSPITALITY, INC.
By: /s/ By: /s/
---------------------------------- ---------------------------------
Print Name: T. Xxxxx Xxxxx Print Name: Xxxxx X. Xxxxx
-------------------------- -------------------------
Its: President - Development Division Its: Executive Vice President
-------------------------------- --------------------------------
