OF AN
EMERGENCY AS DETERMINED BY PURCHASER IN ITS REASONABLE DISCRETION, PRIOR NOTICE
SHALL NOT BE REQUIRED.
2.5
RIGHT OF OFFSET. MANAGER SHALL NOT OFFSET AGAINST ANY AMOUNTS OWED
TO OWNER; PROVIDED, HOWEVER, MANAGER MAY OFFSET AMOUNTS WHICH OWNER HAS FAILED
TO FUND IN VIOLATION OF SECTION 5.2(C) AGAINST THE AMOUNTS OWED TO OWNER
HEREUNDER PROVIDED THAT AFTER GIVING EFFECT TO SUCH OFFSET THERE SHALL STILL BE
PAID TO OWNER AN AMOUNT SUFFICIENT TO PAY REGULARLY SCHEDULED PAYMENTS OF
INTEREST AND PRINCIPAL UNDER ANY LOAN OR OTHER DEBT SECURED BY AN AUTHORIZED
MORTGAGE AND ATTRIBUTABLE TO THE PLEDGED HOTELS.
2.6
CONDITION OF THE HOTELS. MANAGER ACKNOWLEDGES RECEIPT AND DELIVERY
OF POSSESSION OF EACH HOTEL, AND MANAGER ACCEPTS EACH HOTEL IN ITS "AS IS"
CONDITION AS OF THE EFFECTIVE DATE, SUBJECT TO THE RIGHTS OF PARTIES IN
POSSESSION, THE EXISTING TITLE, INCLUDING ALL COVENANTS, CONDITIONS,
RESTRICTIONS, RESERVATIONS, MINERAL LEASES, EASEMENTS AND OTHER MATTERS OF
RECORD OR THAT ARE VISIBLE OR APPARENT ON THE HOTELS, ALL APPLICABLE LEGAL
REQUIREMENTS, AND SUCH OTHER MATTERS WHICH WOULD BE DISCLOSED BY AN INSPECTION
OF THE HOTELS AND THE RECORD TITLE THERETO OR BY AN ACCURATE SURVEY THEREOF.
MANAGER REPRESENTS THAT:
IT HAS INSPECTED THE HOTELS INCLUDING THE FF&E AND ALL
OF THE FOREGOING AND HAS FOUND THE CONDITION THEREOF SATISFACTORY AND IN
COMPLIANCE WITH THE BRAND STANDARDS IN ALL MATERIAL RESPECTS; EXCEPT FOR CAPITAL
REPLACEMENT TO BE MADE FROM TIME TO TIME USING FUNDS TO BE DEPOSITED IN THE
RESERVE ACCOUNT PURSUANT TO SECTION 5.2(A), MANAGER CURRENTLY DOES NOT
ANTICIPATED THE NEED TO MAKE CAPITAL REPLACEMENTS DURING THE FIRST FIVE YEARS OF
THE TERM (PROVIDED, HOWEVER, SUCH REPRESENTATION IS NOT A GUARANTY OR WARRANTY
THAT NO SUCH CAPITAL REPLACEMENT WILL BE REQUIRED); AND IT IS NOT RELYING ON ANY
REPRESENTATION OR WARRANTY OF OWNER, PURCHASER OR ANY OF THEIR AGENTS OR
EMPLOYEES WITH RESPECT TO ANY OF THE MATTERS SET FORTH IN THIS SECTION. MANAGER
WAIVES ANY CLAIM OR ACTION AGAINST OWNER AND PURCHASER WITH RESPECT TO THE
CONDITION OF THE HOTELS.
15
PURCHASER AND OWNER MAKE NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH
RESPECT TO THE HOTELS OR ANY PART THEREOF, EITHER AS TO ITS FITNESS FOR USE,
DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE OR OTHERWISE, OR AS TO THE
QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, LATENT OR PATENT.
ARTICLE 3
TERM AND RENEWALS
3.1
TERM. THE TERM OF THIS AGREEMENT SHALL BE FOR A PERIOD BEGINNING
ON THE EFFECTIVE DATE AND CONTINUING FOR THE INITIAL TERM AND ANY EXTENSION OF
THE TERM HEREOF IN ACCORDANCE WITH THE PROVISION OF THIS AGREEMENT, UNLESS
SOONER TERMINATED AS HEREINAFTER PROVIDED.
3.2
RENEWAL TERM. THE TERM MAY BE EXTENDED, AT MANAGER'S OPTION, FOR
UP TO TWO (2) CONSECUTIVE PERIODS (EACH, A "RENEWAL TERM") OF TWELVE (12) YEARS
AND SIX (6) MONTHS EACH ON NOT LESS THAN TWO (2) YEARS' PRIOR NOTICE TO OWNER.
IN THE EVENT MANAGER FAILS TO GIVE NOTICE OF ITS ELECTION NOT TO EXERCISE EITHER
OF ITS OPTIONS