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; EXCEPT FOR THE BALTIMORE HOTEL, AS OF THE
EFFECTIVE DATE, THE HOTELS ARE IN COMPLIANCE WITH THE APPLICABLE BRAND STANDARDS
IN ALL MATERIAL RESPECTS; EXCEPT FOR CAPITAL REPLACEMENTS TO BE MADE FROM TIME
TO TIME USING THE BALTIMORE REBRANDING AMOUNTS, FUNDS TO BE DEPOSITED IN THE
RESERVE ACCOUNT PURSUANT TO SECTION 5.2(A) AND AMOUNTS TO BE EXPENDED BY THE
MANAGER'S AFFILIATES AS REQUIRED BY THE PURCHASE AGREEMENT, MANAGER CURRENTLY
DOES NOT ANTICIPATE 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 REPLACEMENTS 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.
29
EXCEPT AS OTHERWISE EXPRESSLY SET FORTH HEREIN, MANAGER WAIVES ANY CLAIM OR
ACTION AGAINST OWNER AND PURCHASER WITH RESPECT TO THE CONDITION OF THE HOTELS.
PURCHASER AND OWNER MAKE NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH
RESPECT TO ANY HOTEL 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.
(B)
MANAGER'S REPRESENTATIONS SET FORTH IN SECTION 2.6(A) ARE
QUALIFIED AS TO THE BALTIMORE HOTEL IN CERTAIN RESPECTS BECAUSE, PRIOR TO ITS
EFFECTIVE DATE, THE BALTIMORE HOTEL WAS OPERATED AS AN UNBRANDED HOTEL THAT WAS
OWNED BY AN UNRELATED THIRD PARTY AND, IN ORDER TO BRING THE BALTIMORE HOTEL
INTO COMPLIANCE WITH APPLICABLE BRAND STANDARDS, MANAGER WILL NEED TO SPEND THE
BALTIMORE REBRANDING AMOUNTS ON VARIOUS ITEMS AS CONTEMPLATED BY
SECTION 5.2(H).
MANAGER REASONABLY BELIEVES THAT THE BALTIMORE REBRANDING
AMOUNTS SHALL BE SUFFICIENT FOR PURPOSES OF BRINGING THE BALTIMORE HOTEL INTO
COMPLIANCE WITH APPLICABLE BRAND STANDARD.
EXCEPT FOR THOSE CAPITAL
REPLACEMENTS THAT ARE TO BE MADE AT THE BALTIMORE HOTEL USING THE BALTIMORE
REBRANDING AMOUNTS, MANAGER CURRENTLY DOES NOT ANTICIPATE THE NEED TO MAKE ANY
OTHER CAPITAL REPLACEMENTS DURING THE FIRST FIVE (5) YEARS OF THE TERM WITH
RESPECT TO THE BALTIMORE HOTEL (PROVIDED, HOWEVER, SUCH REPRESENTATION IS NOT A
GUARANTY OR A WARRANTY THAT NO SUCH CAPITAL REPLACEMENTS WILL BE REQUIRED).
MANAGER COVENANTS TO COMPLETE THE REBRANDING OF THE BALTIMORE HOTEL ON OR PRIOR
TO JANUARY 1, 2007.
2.7
NON-ECONOMIC HOTELS.
(A)
MANAGER SHALL BE ENTITLED TO DESIGNATE AS A NON-ECONOMIC HOTEL ANY
HOTEL FOR WHICH, IN EACH OF ANY THREE (3) CONSECUTIVE FULL FISCAL YEARS DURING
THE TERM, THE OPERATING PROFIT IS LESS THAN THE SUM OF (I) AMOUNTS TO