STATEMENT.
(D)
THAT AUDITOR HAS RECOMPUTED THE ANNUAL CALCULATION OF MANAGEMENT
FEES, SERVICE FEES, CONTRIBUTIONS TO THE RESERVE ACCOUNT, EXPENDITURES FROM THE
RESERVE ACCOUNT, OWNER'S PERCENTAGE PRIORITY AND THE RESIDUAL DISTRIBUTION.
(E)
THAT AUDITOR HAS CONFIRMED THE HOTELS SUBJECTED TO AUDIT
PROCEDURES BY MANAGER'S INTERNAL AUDIT DEPARTMENT, IF ANY, AND REVIEWED WORK
PAPERS PROVIDED IN CONNECTION THEREWITH. IF AUDITOR HAS PERFORMED HOTEL LEVEL
AUDIT PROCEDURES AT ANY HOTEL, AUDITOR SHALL IDENTIFY THOSE HOTELS AND LIST THE
PROCEDURES PERFORMED AND RESULTS OBTAINED. IN ANY EVENT AT LEAST THREE HOTELS
SHALL BE SUBJECTED TO AUDIT PROCEDURES EACH FISCAL YEAR BY EITHER INTERNAL AUDIT
OR THE AUDITOR.
1.5
"AUTHORIZED MORTGAGE"
SHALL MEAN ANY FIRST MORTGAGE, FIRST
DEED-OF-TRUST OR FIRST DEED TO SECURE DEBT AND OTHER RELATED SECURITY DOCUMENTS
GRANTED IN CONNECTION THEREWITH NOW OR HEREAFTER GRANTED BY PURCHASER TO SECURE
A LOAN TO, OR OTHER DEBT OF, PURCHASER OR ITS AFFILIATES WHICH IS MADE BY AN
INSTITUTIONAL LENDER, INVESTMENT BANK, PUBLICLY TRADED INVESTMENT FUND OR OTHER
SIMILAR PERSON REGULARLY MAKING LOANS SECURED BY HOTELS OR INCURRED IN
CONNECTION WITH THE ISSUANCE OF A MORTGAGE BACKED SECURITY, WHICH LOAN OR DEBT
PROVIDES FOR (I) LEVEL PAYMENTS OF INTEREST AND PRINCIPAL AND (II) AMORTIZATION
AND OTHER TERMS WHICH ARE COMMERCIALLY REASONABLE.
1.6
"ARBITRATION"
SHALL MEAN AN ARBITRATION CONDUCTED IN ACCORDANCE
WITH THE TERMS OF SECTION 24.19.
1.7
"AWARD"
SHALL HAVE THE MEANING GIVEN SUCH TERM IN THE LEASE.
1.8
"BANK ACCOUNTS"
SHALL MEAN ONE OR MORE BANK ACCOUNTS ESTABLISHED
FOR THE OPERATION OF THE HOTELS IN OWNER'S NAME AT A BANK SELECTED BY MANAGER
AND APPROVED BY OWNER.
1.9
"BASE MANAGEMENT FEE"
SHALL MEAN SEVEN PERCENT (7%) OF THE
AGGREGATE GROSS REVENUES AT THE HOTELS IN EACH FISCAL YEAR DURING TERM.
1.10
"BASE YEAR"
SHALL MEAN, FOR EACH HOTEL, THE 2004 FISCAL YEAR;
PROVIDED, HOWEVER, IF THERE SHALL OCCUR A CASUALTY, CONDEMNATION OR OTHER FORCE
MAJEURE EVENT WITH RESPECT TO A HOTEL WHICH CAUSES A MATERIAL DECLINE IN GROSS
REVENUES FOR SUCH HOTEL FOR THE 2004 FISCAL YEAR OR A FORCE MAJEURE EVENT
NATIONALLY OR IN ANY RELEVANT MARKET THAT RESULTS IN A TEN PERCENT (10%) ANNUAL
DECLINE IN REVPAR FOR THE UPSCALE SEGMENT (OR OTHER APPROPRIATE SEGMENT) AS
CALCULATED BY SMITH TRAVEL RESEARCH, NATIONALLY OR IN THE RELEVANT MARKET, WHICH
CAUSES A MATERIAL DECLINE IN GROSS REVENUES FOR ANY HOTEL, THE
2
BASE YEAR FOR SUCH HOTEL SHALL BE ADJUSTED TO BE THE FIRST FULL FISCAL YEAR OF
OPERATION OF SUCH HOTEL AFTER THE TERMINATION OF ANY SUCH CASUALTY, CONDEMNATION
OR FORCE MAJEURE EVENT.
1.11
"BRAND"
SHALL MEAN, COLLECTIVELY, THE STAYBRIDGE SUITES HOTEL
SERVICE MARKS, THE BRAND STANDARDS, AND ALL OF THE ATTRIBUTES AND FEATURES
CUSTOMARILY ASSOCIATED WITH THE STAYBRIDGE SUITES HOTEL CHAIN IN NORTH AMERICA
FROM TIME TO TIME.
1.12
"BRAND STANDARDS"
SHALL MEAN THE STANDARDS OF OPERATION, AS
AMENDED FROM TIME TO TIME, IN EFFECT AT SUBSTANTIALLY ALL HOTELS WHICH ARE
OPERATED UNDER THE STAYBRIDGE SUITES NAME, WHICH STANDARDS SHALL INCLUDE, BUT
NOT BE LIMITED TO, STANDARDS OF OPERATION FROM TIME