noncash reserves, determined in accordance with generally accepted
accounting principles.
On or before the 30th day after public availability of the Company's annual
audited financial statements for each fiscal year, the Advisor shall refund (to
the extent of the aggregate Fees it has received with respect to such year) to
the Company the amount, if any, by which the Operating Expenses exceeded the
Limitation; provided however, that unless such action is prohibited by laws or
regulations, the Company may instead permit such refund to be effected by a
reduction in the amount of the Fees to be paid by the Company during the fiscal
years following the fiscal year with respect to which such refund is to be made
until such time as any such refund is fully paid and provided the Limitation
imposed by this Section 13 shall require that only so much of such excess need
be refunded as is conclusively determined by the Trustees, including a majority
of the Independent Trustees, to be unjustified.
14.
LIMITS OF ADVISOR RESPONSIBILITY. THE ADVISOR ASSUMES NO
RESPONSIBILITY OTHER THAN TO RENDER THE SERVICES DESCRIBED HEREIN IN GOOD FAITH
AND SHALL NOT BE RESPONSIBLE FOR ANY ACTION OF THE TRUSTEES IN FOLLOWING OR
DECLINING TO FOLLOW ANY ADVICE OR RECOMMENDATION OF THE ADVISOR. THE ADVISOR,
ITS SHAREHOLDERS, DIRECTORS, OFFICERS, EMPLOYEES AND AFFILIATES WILL NOT BE
LIABLE TO THE COMPANY, ITS SHAREHOLDERS, OR OTHERS, EXCEPT BY REASON OF ACTS
CONSTITUTING BAD FAITH, WILLFUL OR WANTON MISCONDUCT OR GROSS NEGLIGENCE. THE
COMPANY SHALL REIMBURSE, INDEMNIFY AND HOLD HARMLESS THE ADVISOR, ITS
SHAREHOLDERS, DIRECTORS, OFFICERS AND EMPLOYEES AND ITS AFFILIATES FOR AND FROM
ANY AND ALL EXPENSES, LOSSES, DAMAGES, LIABILITIES, DEMANDS, CHARGES AND CLAIMS
OF ANY NATURE WHATSOEVER IN RESPECT OF OR ARISING FROM ANY ACTS OR OMISSIONS OF
THE ADVISOR UNDERTAKEN IN GOOD FAITH AND IN ACCORDANCE WITH THE STANDARD SET
FORTH ABOVE PURSUANT TO THE AUTHORITY GRANTED TO IT BY THIS AGREEMENT.
15.
OTHER ACTIVITIES OF ADVISOR. NONE OF THE ADVISOR, BARRY M.
PORTNOY, GERARD M. MARTIN NOR ADAM D. PORTNOY SHALL, WITHOUT THE CONSENT OF THE
COMPANY'S INDEPENDENT TRUSTEES, (I) PROVIDE ADVISORY SERVICES TO, OR SERVE AS A
DIRECTOR OR OFFICER OF, ANY OTHER REIT WHICH IS PRINCIPALLY ENGAGED IN THE
BUSINESS OF OWNERSHIP OF HOTEL PROPERTIES OR (II) MAKE DIRECT INVESTMENTS IN
HOTEL FACILITIES. NOTHING HEREIN SHALL PREVENT THE ADVISOR FROM ENGAGING IN
OTHER ACTIVITIES OR BUSINESSES OR FROM ACTING AS ADVISOR TO ANY OTHER PERSON
(INCLUDING OTHER REAL ESTATE INVESTMENT TRUSTS) PROVIDED THAT NO SUCH ACTIVITY
SHALL CONFLICT WITH THE ADVISOR'S OBLIGATIONS UNDER THE IMMEDIATELY PRECEDING
SENTENCE; PROVIDED, FURTHER, HOWEVER, THAT THE ADVISOR SHALL NOTIFY THE COMPANY
IN WRITING IN THE EVENT THAT IT DOES SO ACT AS AN ADVISOR TO ANOTHER REAL ESTATE
INVESTMENT TRUST. THE ADVISOR SHALL BE FREE FROM ANY OBLIGATION TO PRESENT TO
THE COMPANY ANY PARTICULAR INVESTMENT OPPORTUNITY WHICH COMES TO THE ADVISOR.
WITHOUT LIMITING THE FOREGOING PROVISIONS, THE ADVISOR AGREES, UPON THE REQUEST
OF ANY TRUSTEE OF THE COMPANY, TO DISCLOSE CERTAIN